3m Optical Systems

3M Optical Systems: Case Brief

As Andy Wong, how would you handle the authorization for expenditure for the re-launch of the privacy screen?

As Andy Wong, I would take the proposal to one of my senior-level mentors for support. The OS unit has already tried and failed three times with the microlouvered filter and high level support would benefit both Wong and Guehler in this case. If Guehler sees that other areas of 3M are in support of the authorization for expenditure, then he will not have to be concerned about the OS unit’s credibility – this gives Wong a significant plus. If, however, Wong is unable to garner the support from his mentors in order to give this AFE the standing it needs, I would not recommend backing the project. The price point of $175 is a serious concern, the sales forecast seems inflated, and other companies already have a strong presence in the market for this type of item. Instead, I would have to opt for rejecting the proposed expenditure and going with a harvest strategy – cease R&D and reassign personnel to other units. This might allow him to salvage the OS Unit through auto component sales. That said, political support internally could make all the difference and allow Guehler to focus on the positive aspects of the proposal – namely the total potential market of 32.7 million PC’s and the ability to leverage 3M’s existing distribution.

The primary reason that Andy Wong is in this position is that he did not engage in enough product championing. As explained in Burgelman’s article, “The lack of articulation between different levels of management results in a vicious circle in resource procurement.” (Burgelman, 1984) Wong did not do enough to demonstrate either the technical or commercial feasibility of the privacy filter. Twice they tried and twice they failed. With an investment of $750k required to continue it is not likely that management will take that chance.

As Paul Guehler, would you approve the AFE if Wong had set it up for you?

As Paul Guehler, I would not approve the AFE unless Wong garnered substantial support before bringing the proposal my way. To be quite frank, Guehler has his credibility to consider. If he approves this, when most of the company would advise against it, and it fails – he’s an idiot. If, however, it succeeds – he’s a genius. Such is the life of a person in his position. Looking strictly at the facts, Guehler has five business units to develop and failure to retain his credibility regarding one unit puts the other four in a tenuous situation. The approval of a further failure will significantly lower his ability to lobby on behalf of the other units, placing them at risk. Lacking some serious political maneuvering by Wong, I would not agree to the proposal for further expenditures.

In this case, the primary reason for which I would not (as Guehler) approve the AFE is because Andy Wong has lost quite a bit of credibility with the two prior failures. Noirjean has already received a request for sales data going back to 1986 – with the understanding that the fate of OS is at stake. Upper management does not have confidence in the ability to produce a viable product at this time. As per Burgelman’s description of a managerial dilemma in the impetus process, “Corporate level management’s decision to authorize further resource allocations to a new venture are to a large extent dependent on the credibility of the managers involved. Credibility, in turn, depends primarily on the quantitative results produced.” (Burgelman, 1986) To date, the quantitative results produced by OS were dismal. They all understood the need for a significant generation of revenue in 1991, but when distributor requests prompted OS to create more than 100 different sizes for their inventories things quickly went downhill. The only dependable thing about OS at the time that Wong is requesting an expenditure of $750k, is that it is, “A group unable to fulfill its promises.” (Bartlett & Mohammad, 1994)

How effective has Wong been as a front line manager in the 3M context? How effective has Guehler been as a 3M division president?

Wong has not been very effective as a front line manager. One of his primary roles should be product championing. He must garner support throughout the organization, particularly at different levels of management, in order for his unit to have the buy-in required for continued support. Despite his utilization of bootlegging and scavenging efforts, at least in the third and final version of their privacy screen, he has not been able to reassure middle-management, namely Guehler. It was Wong’s responsibility