In a record of sorts, Mr. James McNerney, one of two candidates who lost the race for the top job at the world's most admired corporation, General Electric, created history at the Minnesota Mining & Manufacturing, the large US manufacturing group better known as 3M. Mr. McNerney was named chairman and chief executive officer of 3M, known for its innovative products, and will become the first outsider in the company's 98-year history to occupy the top slot. 3M has, in the past, been famous for its close corporate culture, which has always put heavy emphasis on internal innovation.
His exit from GE has not come as a surprise to anyone. Indeed, Mr. Jack Welch, chairman of GE, while anointing Mr. Jeffrey Immelt as the new chairman and chief executive-designate of the company, had told a press conference that the two candidates who lost out in the race – Mr. McNerney and Mr. Robert Nardelli – would be actively wooed by headhunters in the country. Mr. McNerney was heading the aircraft engines business of General Electric.
Mr. McNerney is to take up his new assignment on January 1 and will be replacing Mr. Livio DeSimone, long time 3Mer who, having joined the company in 1957, has been chairman since 1991. His appointment was immediately welcomed by analysts, some of whom upgraded their ratings on the stock on hopes that Mr McNerney would bring GE-type discipline to 3M. What also went in Mr. McNerney's favour is his extensive international experience and strong negotiation skills.
3M, which has significant technical strengths and the ability to develop and introduce new products that have great revenue potential, has been looking for some time to introduce a fresh, possibly tighter approach, to the sprawling group. Mr. McNerney will take over at a time when 3M's prospects are fairly encouraging and analysts expect the company to post double-digit percentage earnings increases this year and next.
Mr McNerney, known for his ability to seal deals and energise employees, faces the biggest challenge in being able to encourage dramatic change at 3M without disrupting that strong culture. One of the first ideas that he is expected to introduce at 3M is the concept of "Six Sigma" – a management tool aimed at eliminating mistakes - that is being very successfully used at GE.