Chapter 7
Try a Lot of Stuff and Keep What Works

To my imagination it is far more satisfactory to look at [well-adapted species] not as specially endowed or created instincts, but as small consequences of one general law leading to the advancement of all organic beings—namely, multiply, vary, let the strongest live and the weakest die.

CHARLES DARWIN, ORIGIN OF SPECIES, 1859¹

Our company has, indeed, stumbled onto some of its new products. But never forget that you can only stumble if you’re moving.

RICHARD P. CARLTON, FORMER CEO, 3M CORPORATION, 1950²

Failure is our most important product.

R. W. JOHNSON, JR., FORMER CEO, JOHNSON & JOHNSON, 1954³

In examining the history of the visionary companies, we were struck by how often they made some of their best moves not by detailed strategic planning, but rather by experimentation, trial and error, opportunism, and—quite literally—accident. What looks in hindsight like a brilliant strategy was often the residual result of opportunistic experimentation and “purposeful accidents.” Consider the following examples at Johnson & Johnson, Marriott, and American Express.

Johnson & Johnson’s Accidental Move into Consumer Products

In 1890, Johnson & Johnson—then primarily a supplier of antiseptic gauze and medical plasters—received a letter from a physician who complained about patient skin irritation from certain medicated plasters. Fred Kilmer, the company’s director of research, quickly responded by sending a packet of soothing Italian talc to apply on the skin. He then convinced the company to include a small can of talc as part of the standard package with certain products. To the company’s surprise, customers soon began asking to buy more of the talc directly. J&J responded by creating a separate product called “Johnson’s Toilet and Baby Powder,” which became a famous household staple around much of the world. According to J&J’s own official history, “the Johnsons got into the baby powder business quite by accident.”⁴ Even more significant, the company thereby took a tiny incremental step that eventually mushroomed into a significant strategic shift into consumer products—an “accident” which eventually grew to become 44 percent of J&J’s revenues—and as important to its growth as medical supplies and pharmaceutical products.⁵

Later, J&J stumbled upon another famous product by accident. In 1920, company employee Earle Dickson created a ready-to-use bandage—made of surgical tape with small pieces of gauze and a special covering so it would not stick to the skin—for his wife who had a knack for cutting herself with kitchen knives. When he mentioned his invention to the marketing people, they decided to experiment with the product on the market. Eventually, after a slow start and a never-ending process of tinkering, Band-Aid products became the biggest selling category in the company’s history and further solidified J&J’s “accidental” strategic move into consumer products.⁶

Marriott’s Opportunistic Step into Airport Services

In 1937—ten years after opening his first root beer stand—J. Willard Marriott had built a chain of nine profitable restaurants staffed by two hundred zealous employees trained in the company’s meticulous methods of customer service. Marriott clearly had a system that worked. With plans to double the number of restaurants over the next three years, the future prospects of the emerging company never looked brighter. J. Willard and his management team would certainly attain great success—and, just as certain, have their hands full—if they simply focused on executing the restaurant expansion plan.

But what to do about the odd emerging situation at Marriott shop number eight? Located near Hoover Airport in Washington, D.C., number eight had attracted an entirely different clientele than other Marriott shops: Passengers on their way to catch a flight began purchasing meals and snacks which they stuffed in pockets, paper bags, and carry-on luggage. “Well how about that,” said Marriott during an inspection visit to number eight. “Coming in here and buying things to eat on the plane?”⁷

“Every day,” his store manager explained, “we get a few more of them.”

Marriott pondered the situation overnight, according to Robert O’Brian in the book Marriott. The very next day, he paid a visit to Eastern Air Transport and created a new business arrangement whereby shop number eight would deliver prepackaged box lunches directly onto the tarmac in a bright orange truck with Marriott’s logo and lettering on the side. Within a few months, the service expanded to American Airlines and catered twenty-two flights per day. Marriott soon put a full-time manager in charge of the emerging business, with the mission to fully develop it at Hoover and expand it to other airports. Airport services evolved from the seed of that unexpected opportunity to become a major business for Marriott Corporation, eventually reaching more than a hundred separate airports.⁸

Marriott could have bogged down in long meetings and strategic analyses to decide what to do. The unusual clientele at number eight presented Marriott with an odd variation to its traditional customer base. The company could have ignored it, but chose instead to experiment—to actually test and see if this “odd variation” might prove to be a favorable variation. Marriott made an incremental shift in corporate strategy by quick, vigorous action taken to seize upon a stroke of unexpected good luck. The step looks brilliant in retrospect, but in reality was simply the result of an opportunistic experiment that happened to work out.

American Express’s Unintended Evolution into Financial and Travel Services

American Express began life in 1850 as a regional freight express business (essentially the nineteenth-century equivalent of the United Parcel Service). In 1882, the company took a small, incremental step that turned out to be the genesis of a dramatic strategic shift. Due to the increasingly popular postal money order, American Express faced declining demand for its cash-shipping services (similar to an armored car service). In response, AmEx created its own money order. The “Express Money Order” became an unexpected success—11,959 of them sold during the first six weeks. AmEx aggressively seized the opportunity and began selling the product not only at its own offices, but also at railroad stations and general stores, and thereby began—unwittingly—to transform itself into a financial services company.⁹

A decade later, in 1892, American Express president J. C. Fargo took a European vacation, where he found it difficult to translate his letters of credit into cash—a problem (and therefore an opportunity) which impelled a further shift in the company’s trajectory. In his book American Express 1850–1950, Alden Hatch wrote:

On his return, [Fargo] stalked through the corridors of 65 Broadway with more than his usual preoccupation. . . . He walked right past his own office to that of [employee Marcellus] Berry. “Berry,” he said, omitting a salutation and going straight to the point, “I had a lot of trouble cashing my letters of credit. The moment I got off the beaten track they were no more use than so much wet wrapping paper. If the president of American Express has that sort of trouble, just think what ordinary travelers face. Something has got to be done about it.”¹⁰

Berry did indeed do something about it. He created an elegant solution which required simply a signature upon purchase and a countersignature upon redemption, which eventually became known around the world as the ubiquitous “American Express Travelers Cheque.” The mechanics of the traveler’s check gave American Express an unexpected bonus: Due to lost checks and delays, the company sold more orders than it redeemed each month, which created a cash cushion. According to Jon Friedman and John Meehan in House of Cards:

Unintentionally, AmEx had invented the ‘float.’ . . . A mere $750 at the beginning, the float would eventually top $4 billion by 1990, generating $200 million in revenue. The company had virtually [and accidentally] created a new international currency.¹¹

In what started as just another incremental, opportunistic step, the traveler’s check further evolved American Express toward financial services. AmEx didn’t plan to become a financial services company. Nonetheless, it became one.

The traveler’s check also contributed to the company’s completely unintentional evolution into a travel services company. In fact, president J. C. Fargo issued a clear, unambiguous dictum that American Express was not going into the travel/tourism business: “We want it distinctly kept in mind at all times and in all places and by all the company’s forces, that this company is not and does not intend going into the touring [travel services] business [emphasis ours].”¹²

In spite of Fargo’s dictum, that’s exactly what AmEx did. The company had developed a pattern of solving customer problems and quickly exploiting opportunities—an impulse guided by its core ideology of heroic customer service—that could not be easily suppressed, even by the CEO. Soon after the company opened its first European traveler’s check office in Paris in 1895, an entrepreneurial employee named William Dalliba began expanding the company’s activities in response to the needs of American travelers that always crammed the Paris office clamoring for check cashing, mail services, travel schedules, tickets, advice, and so on. Dalliba had to be careful and low-profile, of course, so as not to raise the ire of J. C. Fargo. So he moved incrementally, experimenting with ticket windows to sell berths on steamships. Using his successful experiment as a foot in the door, Dalliba convinced the company to open a “Travel Department” and began selling train tickets, packaged tours, and a range of travel services.¹³ By 1912, AmEx had “firmly established itself as a great travel organization, though even yet it did not admit the fact [emphasis ours].”¹⁴ By the early 1920s, Dalliba’s experiments had turned travel-related services into the second most important strategic pillar of the company, behind financial services.

Thus, through a series of incremental steps—most of them opportunistic and certainly not part of any grand plan—American Express had evolved into something entirely different from its original founding concept as a freight express business.

CORPORATIONS AS EVOLVING SPECIES

What should we make of these examples from J&J, Marriott, and American Express? We might be tempted to just ignore them as weird aberrations, but they weren’t the only such examples we found. Bill Hewlett told us that HP “never planned more than two or three years out” during the pivotal 1960s.¹⁵ Nor did the company have any grand plan in mind when making its watershed strategic move into the computer business. Quite the opposite. In 1965, HP designed its first small computer simply to add power to its line of instruments products.¹⁶ Explained former chief executive John Young:

It was basically an under the bench thing. We didn’t even call it a computer. We called it an “instrument controller.” Although we knew computers would be important in the future, we wanted to maintain our reputation as an instrument company and did not want to be known as a computer company.¹⁷

Similarly, Motorola initially entered the field of advanced electronics (transistors, semiconductors, integrated circuits) simply as a natural outgrowth of its small Phoenix laboratory set up in 1949 to develop a few electronic components for use in the company’s televisions and radios.¹⁸ Only later, in 1955, did Motorola make a conscious strategic choice to move into the electronics business—and that simply because the company could not afford to build an advanced plant unless it sold some of the output to outside customers.

We could go on with examples from Citicorp, Philip Morris, GE, Sony, and others. Don’t get us wrong. We’re not saying that these companies never had plans. But we were surprised to find so many examples of key moves by the visionary companies that came about by some process other than planning. Nor do these examples merely represent random luck. No, we found something else at work.

These provocative examples led us to a second type of progress (the first was BHAGs) stimulated by the visionary companies to a greater degree than the comparison companies: evolutionary progress. The word “evolutionary” describes this type of progress because it closely resembles how organic species evolve and adapt to their natural environments. Evolutionary progress differs from BHAG progress in two key ways. First, whereas BHAG progress involves clear and unambiguous goals (“We’re going to climb that mountain”), evolutionary progress involves ambiguity (“By trying lots of different approaches, we’re bound to stumble onto something that works; we just don’t know ahead of time what it will be”). Second, whereas BHAG progress involves bold discontinuous leaps, evolutionary progress usually begins with small incremental steps or mutations, often in the form of quickly seizing unexpected opportunities that eventually grow into major—and often unanticipated—strategic shifts.

Why lead into the topic of evolutionary progress with examples of unplanned strategies? Because evolutionary progress is unplanned progress. Indeed, if we looked at species in the natural world through the lens of strategic planning, we might easily conclude that they were the result of well-executed plans: They’re so well adapted, they must have been created exactly that way as part of a brilliant overall strategic plan. How else could we explain them? But, from the perspective of modern biology, such a conclusion would be dead wrong. After the Darwinian revolution, biologists came to understand that species were not directly created in a specific preplanned form; they evolved. Not only that, they evolved by a process with remarkable similarity to how some of our visionary companies became well adapted to their environments.

Darwin’s Theory of Evolution Applied to Visionary Companies

The central concept of evolutionary theory—and Charles Darwin’s great insight—is that species evolve by a process of undirected variation (“random genetic mutation”) and natural selection. Through genetic variation, a species attains “good chances” that some of its members will be well suited to the demands of the environment. As the environment shifts, the genetic variations that best fit the environment tend to get “selected” (that is, the well-suited variations tend to survive and the poorly suited tend to perish—that’s what Darwin meant by “survival of the fittest”). The selected (surviving) variations then have greater representation in the gene pool and the species will evolve in that direction. In Darwin’s own words: “Multiply, vary, let the strongest live, and the weakest die.”^*

Now consider a company—say, American Express—as analogous to a species. By the early twentieth century, American Express found its traditional freight business under siege. Government regulators eroded the company’s monopolistic rate structure and in 1913 the U.S. Post Office began a competing parcel-post system. Profits fell 50 percent.¹⁹ Then in 1918 the U.S. government nationalized all freight express businesses, creating a cataclysmic industry change.²⁰ Most freight companies disappeared as the government snatched away their core business. But for American Express, its experiments in financial and travel services (described earlier) proved to be favorable—albeit unplanned—variations that were better suited to the changed environment than its traditional freight business. These variations were then selected as the path to evolve beyond its traditional—and now obsolete—line of business and on which to base its future prosperity.²¹

WE like to describe the evolutionary process as “branching and pruning.” The idea is simple: If you add enough branches to a tree (variation) and intelligently prune the deadwood (selection), then you’ll likely evolve into a collection of healthy branches well positioned to prosper in an ever-changing environment.

To this day, Johnson & Johnson consciously encourages branching and pruning. It tries lots of new things, keeps those that work, and quickly discards those that don’t. It stimulates variation by fostering a highly decentralized environment that encourages individual initiative and allows people to experiment with new ideas. At the same time, J&J imposes rigorous selection criteria. Only those experiments that prove to be profitable and that fit with J&J’s core ideology get to remain in the company’s portfolio of businesses.

With his oft-repeated statement “Failure is our most important product,” R. W. Johnson Jr., understood that companies must accept failed experiments as part of evolutionary progress. And, in fact, J&J has had a number of prominent failures to “prune away” in its history, including a foray into kola stimulants (made from sherry and kola nut extract) and colored casts for children that “met an early demise when the pure food dyes turned bed linens into a symphony of colors and hospital laundries into bedlam.”²² It has also had more recent failed ventures in heart valves, kidney dialysis equipment, and ibuprofen pain relievers.²³ Failures at J&J have been an essential price to pay in creating a healthy branching tree within the context of its core ideology. In spite of these setbacks, the company has never posted a loss in its 107-year history. J&J’s financial success makes the company look to outsiders like it was all mapped out by a strategic genius. In reality, J&J’s history is filled with favorable accidents, trial and error, and periodic failures. Summed up chief executive Ralph Larsen in 1992: “Growth is a gambler’s game.”²⁴

Similarly, Wal-Mart’s phenomenal success in the 1970s and 1980s can better be understood by an evolutionary perspective than a creationist perspective. In fact, the folks at Wal-Mart have always been somewhat amused by the primary explanation of Wal-Mart’s success frequently taught in microeconomics textbooks and MBA strategic planning courses. As Jim Walton summed up:

We all snickered at some writers who viewed Dad [Sam Walton] as a grand strategist who intuitively developed complex plans and implemented them with precision. Dad thrived on change, and no decision was ever sacred.²⁵

Indeed, the tools taught in most corporate strategy courses utterly fail to capture how the company’s strategic competitive advantage came to be—how Wal-Mart attained its “brilliant” system in the first place. The Wal-Mart system came into being not primarily by a strategic plan formulated by economic genius, but largely by an evolutionary process of variation and selection: “Multiply, vary, let the strongest [experiments] win, and the weakest die.”²⁶ That’s exactly what Wal-Mart made a habit of doing from the time Sam Walton opened his first store in 1945. Wal-Mart looks like it had brilliant foresight, just as it looks like a species was preplanned and created. As a Wal-Mart executive described: “We live by the motto, ‘Do it. Fix it. Try it.’ If you try something and it works, you keep it. If it doesn’t work, you fix it or try something else.”²⁷

Wal-Mart’s famous people greeters, for example, did not come from any grand plan or strategy. A store manager in Crowley, Louisiana, was having trouble with shoplifting, so he tried an experiment: He put a friendly older gentleman by the front door to “greet” people on their way in and out. The “people greeter” made honest people feel welcome: “Hi! How are ya? Glad you’re here. If there’s anything I can tell you about our store, just let me know.” At the same time, the greeter sent a message to potential shoplifters that someone would see them if they tried to walk out with stolen merchandise. No one at Wal-Mart—including Sam Walton—had conceived of anything like the greeter concept before the Crowley manager put it in place. Nonetheless, this odd experiment proved effective and eventually became standard practice across the company and a competitive advantage for Wal-Mart.

Using Wal-Mart as an example, we can rephrase Darwin’s quote at the beginning of the chapter so it might read like this:

It might be far more satisfactory to look at well-adapted visionary companies not primarily as the result of brilliant foresight and strategic planning, but largely as consequences of a basic process—namely, try a lot of experiments, seize opportunities, keep those that work well (consistent with the core ideology), and fix or discard those that don’t.

Of course, we should be careful about making a wholesale analogy from biology to business. We do not think all visionary company adaptation and progress comes from an undirected evolutionary process. Certainly it would be inaccurate to view corporations as exactly like biological species.

For one thing, companies do in fact have the ability to set goals and plan. Species do not. And certainly our visionary companies do set goals and make plans—even Wal-Mart, which has simultaneously pursued both BHAGs and evolutionary progress throughout its history. It uses BHAGs to define a mountain to climb, and uses evolution to invent a way to the top. Jack Welch at General Electric embraced this paradoxical mixture of goals and evolution in a management idea labeled “planful opportunism,” as described by Tichy and Sherman in Control Your Own Destiny or Someone Else Will:

Instead of directing a business according to a detailed . . . strategic plan, Welch believed in setting only a few clear, overarching goals. Then, on an ad hoc basis, his people were free to seize any opportunities they saw to further those goals. . . . [Planful opportunism] crystallized in his mind . . . after he read Johannes von Moltke, a nineteenth century Prussian general influenced by the renowned military theorist Karl von Clausewitz [who] argued that detailed plans usually fail, because circumstances inevitably change.²⁸

For another thing, the process of variation and selection in human organizations differs from a purely Darwinian process in the natural world. Darwinian selection with species is natural selection—an entirely unconscious process whereby the variations that best fit with the environment survive and the weakest variations perish. In other words, species in the natural world do not consciously choose what variations to select; the environment selects. Human organizations, on the other hand, can make conscious selections. Furthermore, evolution in the natural world has no goal or ideology other than sheer survival of the species. Visionary companies, on the other hand, stimulate evolutionary progress toward desired ends within the context of a core ideology—a process we call purposeful evolution.

Of course, all companies evolve to some degree. Evolution “happens” whether we purposefully stimulate it or not. The real world is full of chance events that affect the trajectory of life. It happens to individual people. It happens to organizations. It happens to entire economic systems. But—and this is the crucial point—visionary companies more aggressively harness the power of evolution. This brings us to the key point of the chapter:

IF well understood and consciously harnessed, evolutionary processes can be a powerful way to stimulate progress. And that’s exactly what the visionary companies have done to a greater degree than the comparison companies.

Of course, purposeful evolution is not the only type of progress stimulated by visionary companies, nor do all of them use it extensively. Some, such as Boeing, IBM, and Disney, have relied more heavily on BHAG stimulated progress. (After all, it would be difficult to build an incremental Boeing 747!) Others, such as Merck, Nordstrom, and Philip Morris, have relied more on continuous self-improvement, as shown in a later chapter. Nonetheless, wherever they fall along the continuum, the visionary companies have harnessed the power of evolution to a greater degree than the comparison companies in fifteen out of eighteen comparative cases. (See Table A.7 in Appendix 3.)

3M: “THE MUTATION MACHINE FROM MINNESOTA”^* AND HOW IT BLEW AWAY NORTON

During our interview with Bill Hewlett of HP, we asked him if there is any company that he greatly admired and saw as a role model. He responded without hesitation: “3M! No doubt about it. You never know what they’re going to come up with next. The beauty of it is that they probably don’t know what they’re going to come up with next, either. But even though you can never predict what exactly the company will do, you know that it will continue to be successful.” We agree with Hewlett. Indeed, if we had to bet our lives on the continued success and adaptability of any single company in our study over the next fifty to one hundred years, we would place that bet on 3M.

The great irony, of course, is that 3M began life as a failure—a big mistake. Dealt a nearly lethal blow when its initial concept to mine corundum failed (see Appendix 2), the tiny company tried for months to come up with something—anything—that might prove viable. According to Virginia Tuck in her book, Brand of the Tartan—The 3M Story:

The board of directors met every week during the cold November of 1904, seeking a solution. The founders were determined not to give up [on the company]. Fortunately their employees felt the same way. Everyone offered some personal sacrifice [including some working for free] to keep the company going.²⁹

Finally, the board agreed to the suggestion by one of its investors that 3M should shift away from mining and become a manufacturer of sandpaper and grinding wheels. (What else could it do with all that unusable, low-grade grit coming out of its failed mine?) So, out of desperation more than careful planning, 3M gave up mining and made a strategic shift to abrasives.

Enter William McKnight

From 1907 to 1914, the company struggled with quality problems, low margins, excess inventory, and cash flow crises. But under the quiet and deliberate urgings of a bookish young accountant-turned-sales-manager named William McKnight, the company began tinkering and experimenting with product improvements that kept the company viable—just barely.

In 1914, the company promoted McKnight, still in his twenties, to general manager. An instinctive clock builder, McKnight quickly set aside a five-by-eleven-foot corner storage room, invested $500 for a sink and glue bath for experiments and testing, and thereby created 3M’s first “laboratory.”³⁰ After months of experimentation with an artificial mineral, 3M introduced a new and highly successful cloth abrasive, called “Three-M-Ite”³¹—a product that propelled 3M to its first-ever dividend and was still listed in 3M’s product directory seventy-five years after its invention.³²

Although shy and unobtrusive on the outside, McKnight carried within an insatiable curiosity and unrelenting drive for progress, frequently working seven days a week to further the cause of the fledgling 3M Corporation and always looking for new opportunities that the company might pursue.³³ For example, in January 1920, McKnight opened an unusual letter that read:

Please send samples of every mineral grit size you use in manufacturing sandpaper [to] Francis G. Okie, Manufacturer of printing inks, bronze powders, and gold ink liquids, Philadelphia.³⁴

3M didn’t sell raw materials, so there was no business to transact. But McKnight—curiosity piqued and on the prowl for interesting new ideas that might move the company forward—asked a simple question: “Why does Mr. Okie want these samples?”³⁵

3M thereby stumbled into one of the most important products in its history, for Mr. Okie had invented a revolutionary waterproof sandpaper that would prove immensely useful to automobile manufacturers and repaint shops around the world. (As an aside, Okie had requested samples from numerous mineral and sandpaper companies, but none—except 3M—had bothered to ask why he wanted the samples.) 3M quickly acquired rights to the technology and began selling “Wetodry” brand sandpaper.

But that’s not all 3M acquired. Indeed, Wetodry wasn’t even the most valuable part of the transaction. McKnight—the consummate clock builder who always focused on building the organization—didn’t just sign an agreement with Okie and thank him. He hired him! Okie closed his shop in Philadelphia, moved to St. Paul, and became a key player in developing new inventions at 3M until his retirement nineteen years later.³⁶

“BRANCHING AND PRUNING” AT 3M

3M’s near-fatal early days had made a big impression on McKnight. He therefore wanted 3M to have enough internal variation to protect itself:

Our eggs were all in one basket at the beginning [the failed mine]. . . . By diversifying products . . . it was unlikely a trade war would hit them all at once [and] at least part of our business would always be profitable.³⁷

But, as his hiring of Okie illustrates, McKnight did not want the evolution and expansion of the company to depend only on himself. He wanted to create an organization that would continually self-mutate from within, impelled forward by employees exercising their individual initiative. McKnight’s approach was captured in phrases that would be chanted often by 3Mers throughout its history:³⁸

“Listen to anyone with an original idea, no matter how absurd it might sound at first.”

“Encourage; don’t nitpick. Let people run with an idea.”

“Hire good people, and leave them alone.”

“If you put fences around people, you get sheep. Give people the room they need.”

“Encourage experimental doodling.”

“Give it a try—and quick!”

McKnight intuitively understood that encouraging individual initiative would produce the raw material of evolutionary progress—undirected variation. He also understood that not all such variation would prove favorable:

Mistakes will be made [by giving people the freedom and encouragement to act autonomously], but. . . the mistakes he or she makes are not as serious in the long run as the mistakes management will make if it is dictatorial and undertakes to tell those under its authority exactly how they must do their job. Management that is destructively critical when mistakes are made kills initiative and it’s essential that we have many people with initiative if we are to continue to grow.³⁹

In fact, 3M’s first attempt at self-mutation beyond sandpaper—a foray into automobile wax and polish introduced in 1924—proved to be a costly mistake, and the company eventually discontinued the line.⁴⁰

But its second mutation proved wildly successful. Working in the give-it-a-try atmosphere created by McKnight, a young 3M employee named Dick Drew visited a customer site—an auto paint shop—and overheard a violent explosion of particularly vivid profanity. Two-tone auto paint jobs had become popular, but the improvised glues and adhesive tapes separating the two colors failed to mask properly, leaving behind ugly blotches and uneven lines.

“Can’t anyone give us something that will work?” yowled the paint man, storming across the paint shop.

“We can!” responded the 3M visitor. “I’ll bet we can adapt something at our lab to make foolproof masking tape.”⁴¹

Drew discovered, however, that 3M had no such readily adaptable product in the lab. So, like any true 3Mer, he invented one: 3M masking tape. In response to an opportunity disguised as a problem—a process to be repeated thousands of times—3M had finally made its first incremental shift away from sandpaper. Five years later, in response to companies that had contacted 3M looking for a waterproof packaging tape, Drew built on the masking tape technology and invented a product destined to become a household item worldwide: Scotch cellophane tape.

Scotch tape wasn’t planned. No one at 3M had any idea in 1920 that 3M would enter the tape business, and certainly no one expected that it would become the most important product line in the company by the mid-1930s. Scotch was a natural outgrowth of the organizational climate McKnight created, not the result of a brilliant strategic plan.

Even more important than Scotch tape itself, however, was the fact that 3M institutionalized the evolutionary process that led to Scotch tape. Richard P. Carlton, director of research and later president of 3M, codified the strategy of “variation and selection” in 3M’s technical guidance manual as early as 1925:

[We] must possess a two-fisted generating and testing [process] for ideas. . . . Every idea evolved should have a chance to prove its worth, and this is true for two reasons: 1) if it is good, we want it; 2) if it is not good, we will have purchased our insurance and peace of mind when we have proved it impractical.⁴²