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The Original Success Stories of Intrapreneurship

A 3M and Sony Case Study

Posted on September 27, 2013

Every once in a while, the biggest mistakes and failures become success stories. Some of them, we use daily.

For Sony and 3M, employee curiosity and creativity are responsible for our favorite gadgets and their most successful products. Check out these major innovations that we wouldn’t have without great employees, internal entrepreneurship and second chances.

Case: 3M and the Post-It Note

In 1968, Spencer Silver was working at 3M to create a super strong adhesive for use in the aerospace industry. Instead, he accidently created an incredibly weak, pressure sensitive adhesive. While useless for his project the new adhesive had two interesting features. First, when stuck to a surface, it could be removed without leaving residue, and second, it was reusable. 

Unable to use this product in his work, Silver then tried to introduce bulletin boards coated with the adhesive as an alternative to pushpins. While effective, the bulletin board market was too small to offer any real promise and the project was shelved.

Silver found himself in a sticky situation. His product failed.

3M encouraged Silver to continue seeking suggestions from other employees and for nearly five years the adhesive stayed in the company as an interesting, but useless innovation.

In a moment of frustration chemical engineer and 3M employee Art Fry suggested that perhaps Silver had been using the adhesive backwards all along. Fry had struggled with keeping his page markers in his hymn book, and having learnt about the adhesive from one of Silver’s lectures thought this adhesive could be the key.

The key difference he explained was instead of coating bulletin boards, 3M could put the adhesive on a piece of paper and stick it to anything. By applying this adhesive to a strip of paper, Fry could mark his pages, move the markers around and easily flip between hymns without damaging the books.

And the Post-It note was born.

Fun fact: The familiar yellow of the post it notes came from the original scraps of paper Fry had used his hymn book. It was not a conscious color choice but another happy accident.

Case: Ken Kutaragi and Sony PlayStation

In 1994, Ken Kutaragi, a junior employee in Sony’s sound labs bought his daughter a Nintendo game console. Disappointed by the primitive sound effects he began working on sound chip to improve Nintendo’s next generation of consoles.

Kutargi was nearly fired when Sony found out

Then-CEO Norio Ohga decided to transform this side project into a joint partnership with Nintendo. Instead of firing Kutaragi, he recognized the value of his innovation and encouraged the creation of the “SPC7000” sound chip for Nintendo’s CD ROM based gaming system, the Super Famicom. Things were going well until Nintendo publically scrapped the partnership, striking a deal with Sony competitor Phillips. 

Frustrated, Ohga then put Kutaragi to work developing Sony’s own gaming system, the PlayStation. The first PlayStation made Sony a major player in the games market and introduced Sony’s Computer entertainment division.

Kutaragi was quickly promoted through the ranks to manage this new area and continue to grow Sony’s business, making the PlayStation Two one of the most profitable gaming systems in history.

Learning from Mistakes

Spencer Silver could have easily thrown away his weak adhesive and today there would be no Post-It notes. However, because 3M encouraged Silver to share his discovery with coworkers in other fields, Art Fry was able to keep track of his hymnal pages.

Had Sony fired Kutaragi upon discovering his side project, they would have lost one of their most creative minds. Instead Ohga recognized entrepreneurship and creativity in his employee and saw where it could take him. Luckily for Ohga, this act of faith turned into a remarkably profitable investment changing the future of Sony’s business.

Great companies recognize talent and innovation lurking within their organizations.

No one understands businesses’ daily operations quite like its employees. This makes them the best source of potential knowledge for growth and innovation. Internal entrepreneurs (better known as Intrapreneurs) represent a very special breed capable turning ideas from daily life into remarkable business solutions.


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