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Legacy of Innovation: 1920s–40s

Of greatest significance to both the company's foundation and future were the hirings in 1907 and 1909 of William L. McKnight and A.G. Bush, respectively. Former farmhands trained as bookkeepers, the two worked as a team for well over 50 years and developed the system that helped make 3M a success. McKnight ran 3M between 1914 and 1966, serving as general manager from 1914 to 1929, president from 1929 to 1949, and chairman of the board from 1949 to 1966. He created the general guidelines of diversification, avoiding price cuts, increasing sales by 10 percent a year, high employee morale, and quality control that fueled the company's growth and created its unique corporate culture. In some ways, the sales system overshadowed the guidelines. McKnight and Bush designed an aggressive, customer-oriented brand of salesmanship. Sales representatives, instead of dealing with a company's purchasing agent, were encouraged to proceed directly to the shop where they could talk with the people who used the products. In so doing, 3M salesmen could discover both how products could be improved and what new products might be needed. This resultedin some of 3M's early innovations. For instance, when Henry Ford's newly motorized assembly lines created too much friction for existing sandpapers, which were designed to sand wood and static objects, a 3M salesman went back to St. Paul with the news. 3M devised a tougher sandpaper, and thus captured much of this niche market within the growing auto industry. Another salesman noticed that dust from sandpaper use made the shop environment extremely unhealthy. Around the same time, a Philadelphia ink manufacturer named Francis G. Okie wrote McKnight with a request for mineral grit samples. According to Virginia Huck, "McKnight's handling of Okie's request changed the course of 3M's history. He could have explained to Okie that 3M didn't sell bulk minerals… . Instead, prompted by his curiosity, McKnight instructed 3M's Eastern Division sales manager, R.H. Skillman, to get in touch with Okie to find out why he wanted the grit samples." The reason soon became clear: Okie had invented a waterproof, and consequently dust-free, sandpaper. In 1921, after purchasing the patent and then solving various defects, 3M came out with Wetordry sandpaper and significantly expanded its business, eventually licensing two other manufacturers, Carborundum and Behr-Manning, to keep up with demand. It also hired the inventor as its first full-time researcher. This marked the creation of one of the nation's first corporate research and development divisions.

Sending salesmen into the shops paid off a few years later in an even more significant way, by giving 3M its first nonabrasives product line. In 1923 a salesman in an auto body painting shop noticed that the process used to paint cars in two tones worked poorly. He promised the painter that 3M could develop an effective way to prevent the paints from running together. It took two years, but the research and development division invented a successful masking tape—the first in a line of pressure-sensitive tapes that now extends to more than 900 varieties. The invention of Scotch tape, as it came to be called and then trademarked, established 3M as a force for innovation in American industry. Taking a page from its sandpaper business, 3M immediately began to develop different applications of its new technology. Its most famous adaptation came in 1930, when some industrious 3M workers found a way to graft cellophane, a Du Pont invention, to adhesive, thus creating a transparent tape.

Transparent Scotch tape, now a generic commodity, provided a major windfall during the Great Depression, helping 3M to grow at a time when most businesses struggled to break even. Another salesman invented a portable tape dispenser, and 3M had its first large-scale consumer product. Consumers used Scotch tape in a variety of ways: to repair torn paper products, strengthen book bindings, mend clothes until they could be sewn, and even remove lint. By 1932 the new product was doing so well that 3M's main client base shifted from furniture and automobile factories to office supply stores. During the 1930s, 3M funneled some 45 percent of its profits into new product research; consequently, the company tripled in size during the worst decade American business had ever endured.

3M continued to grow during World War II by concentrating on understanding its markets and finding a niche to fill, rather than shifting to making military goods, as many U.S. corporations did. Nevertheless, the war left 3M with a need to restructure and modernize, and not enough cash on hand to do so. To meet its building needs, in 1947 3M issued its first bond offerings. Its first public stock offering, coupled with its tremendous growth rate, attracted additional attention to 3M. Among the new products debuting in the immediate postwar period was Scotch magnetic audiotape, which was introduced in 1947. In 1949, when President McKnight became chairman of the board (with A.G. Bush also moving from daily operations to the boardroom), it marked the end of a tremendous era for 3M. Under McKnight, 3M had grown almost 20-fold. By its 50th year, it had surpassed the $100 million mark and was employing some 10,000 people.