A Lesson on Recognizing and Applying Strategic Insights || 3M’s Post It Notes as an Example || Thinking Strategically

recognizing and applying strategic insightsIn the article How Strategists Produce Strategic Insights, I introduced the concept of insights, defining them as a person’s realization of “the true nature of a thing” and/or its relationship to some contextual factor. The following example of the development of 3M’s Post It notes shows that it’s a valid definition. I found six strategic insights.

Insight #1 – A Strategic Thinker Recognizes Interesting Functional and Physical Properties

In 1968, 3M research scientist Dr. Spence Silver first developed the technology was working on an assigned project to improve the acrylate adhesives that 3M uses in many of its tapes. In a classic case of innovative serendipity, Silver found something quite remarkably different from what he was originally looking for. It was an adhesive that formed itself into tiny spheres with a diameter of a paper fiber. The spheres would not dissolve, could not be melted and were very sticky individually. But because they made only intermittent contact, they did not stick very strongly when coated onto tape backings.

Silver knew that he had a highly unusual new adhesive. Now the challenge was: How to find a commercial opportunity? For the next five years, Silver gave seminars and approached individual 3Mers, extolling the potential of this new adhesive and showing samples of it in spray-can form and as a bulletin board.

Insight #2 – A New Product Needs a User Who Will Find Utility

Art Fry a product developer at 3M was frustrated at how his scrap paper bookmarks kept falling out of his church choir hymnal. Fry’s insight was that using “Silver’s adhesive could make for a reliable bookmark.” This was the first practical application of what we now know as Post It notes.

Fry extended the bookmarking insight and realized that there was a broader application. In a BBC interview recounting the insight, Fry slaps his forehead with his palm and exclaims, “What we have here is not just a bookmark. It’s a whole new way to communicate.”

Insight #3 – Find New Ways to Gauge Market Potential for New, Unfamiliar Products  

Market research is difficult with really new products. Four test marketing experiments in different cities in 1978 had proven disappointing. Few people wanted to pay for a product when they could use cost-free scrap paper. Two 3M executives became personally involved in a test in Richmond, Virginia and achieved as useful insight when they experimented with giving away samples to fellow executives.  People liked them and wanted more!

The next trial was a marketing demonstration called the Boise Blitz, because of its intensity. It scored a 90 % reorder rate from free samples, twice what 3M had seen with any other office product.

With the results of the Boise Blitz, 3M knew that a market existed.  It could now commit to the time and cost of engineering and manufacturing the product on a commercial scale, which it accomplished in 1980.

Insight #4 – Exploit Your Core Competencies for Strategic Advantage  

There were many engineering challenges to solve with this brand-new product. One was the paradoxical challenge of getting a weak adhesive to adhere to the paper.  A second challenge was designing machines and manufacturing processes.

All US production was centered in a manufacturing facility near Louisville, Kentucky. There, 3M could apply its core competencies in engineering and manufacturing. 3M’s ability to design a robust, qualified, efficient manufacturing process was the key to the profitability of the product. An engineer who had worked at the Kentucky facility for years told me that they would joke that the Post-It manufacturing process was so lucrative that they were really just printing money.

It takes insight to recognize and match core competencies to engineering and production challenges.

Insight #5 – Extend Your Advantages (Product Family Line)

The “genius” of the technology is in the adhesive and its binding to the paper.  Now, with just a little imagination you can create an entire product line.

Insight #6 – Persistence and Ambition Are Components of Strategy

The story of Post-Its makes for a great narrative and it illustrates the formation of a strategy of opportunistically combining insights.  Yet, the product would have gone nowhere without the of the people involved.

  • It took twelve years from the time that Silver developed the adhesive until the product was launched.  At times, both Silver and Fry were working on the development “off budget.”
  • The company kept at the market research, too, not being discouraged by the poor results. Executives championed the somewhat-risky idea of giving the product away and watching for insight in the results.

As I look at the relationship of strategic thinking to strategy in this and other examples, I come to the conclusion that strategy is assembled out of insights and other things. Those other  things must include the  persistence and ambitions of individuals, which is the quality of strong mindedness. (Watch for a future article.)

Conclusion

I introduced this article by characterizing strategic insights. I wrote that they are a person’s realization of “the true nature of a thing” and/or its relationship to some contextual factor. In the above, I mentioned two individuals – Silver and Fry – who had realized something that seemed relevant and important.  The insights had to do with the contextual factors of materials, users, markets, competencies, and personal values. There are other contextual factors present in the case; however, it seemed a bit of an overkill to discuss them. They include: opportunities, viewpoints of the past/present/future, competitor behavior, macroeconomics, and 3M’s historical narrative from its founding to the time of the case.

Individuals acquire insights through conscious analysis mixed with unconscious (intuitive) cognition. The first example of this is Fry’s conscious effort to apply the adhesive to scrap paper for marking hymnals, combined with the realization that “this is a new way to communicate.” A second example was the market research that mixed formal analysis of demand with a leap-of-faith demonstration: Here are free samples. Use them and let us know when you want more.

Note that activities that involve trial and error often generate insights. Indeed, the very discovery of the adhesive was a result of experimentation and serendipity. Fry developed and tested a hypothesis: “Would this adhesive-coated scrap paper function effectively as a place holder in a hymnal?”  The initial attempts at market research did not signal potential, but a breakthrough insight came with the response to free samples in Richmond and its confirmation with the Boise Blitz.

Does the story of 3Ms Post Its provide you with a better understanding and appreciation of the value of strategic insights?  Would you like to learn more about how to generate, recognize, and organize them?

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