New product innovation and R&D acceleration

“The first half of this year we launched about 75, 76 new product introductions. This year we'll do probably less than 150. And as I reflect back over the last eight or nine, 10 years, at one point in time we did over 1000. So we've really got to turn that around.”

“As I've gotten into the details, what I've learned is that ex- Solventum R&D investment for core 3M, which is running about $1 billion per year, or about 4.5% of revenue, has been flattened nominally over the past five years and down on a real basis as the focus was on investing in and strengthening the healthcare business.”

“As a result of the decline in investment, along with a strategic shift to fewer, but larger innovation opportunities, the number of and revenue from new product introductions has steadily declined over the past decade.”

“The simple fact is that our products are aging.”

“For example, improving the velocity of our new product development process and increasing the effective capacity of our engineers by eliminating bottlenecks and non-value added work, and over time, redeploying those currently working on PFAS exit activities to growth initiatives.”

“We added 50 people in Q4 and we moved about another 100 people into R&D development in the quarter.”

“On the Abrasives side, we should see a better '25 than '24. Part of it is because of the industrial economy. Part of it is because of the launch of a new product offering called Cubitron 3 that we launched over the last year. It's now moving into a variety of different instantiations of different Abrasive products. It's growing. It's got tremendous differentiation versus competitors.”

“In 2024, we launched 169 new products, up 32% over the prior year. This was above expectations due in part to the rigor and governance we've put in place around new product introductions, but more importantly, to the enthusiasm of the team to get back to innovating for our customers.”

“One launch we're particularly excited about is our LCD 2.0 platform program that enables LCD displays for tablets, notebooks and monitors to achieve the brightness and contrast similar to OLED, combining our multilayer optical film technology with our microreplication technology.”

“Over time, we need to work to shorten the development cycle time to increase launch cadence, focus investment dollars on higher octane programs and see NPI translate into higher sales and margins.”

“We have largely moved past product portfolio prioritization headwinds and the small amount that remains is incorporated into our guidance and won't be specifically called out going forward.”

“So year one sales on these products are going to be somewhat light and it will grow over time over the next several years. More importantly, as we grow our NPI launches next year by double-digit, we shift to more what I call higher octane or Class IV type products, which have more sales capability.”

“Central to top-line growth is increasing the cadence of new product launches. In Q1, we launched 62 new products, up about 60% year on year on top of a 32% increase in 2024.”

“A few notable new products introduced in Q1 include Scotch Blue ProSharp painters tape with edge lock technology for sharper lines and less paint bleed through, a low sparkle optical film with enhanced brightness for the mainstream notebook market, and a new solid-state drive connector for the data center market.”

“We bottomed out and turned the corner on five-year new product sales with Q1 up 3%, and tracking well toward the target of growing sales from products launched in the past five years by more than 15% by year-end.”

“5-year new product sales bottomed last year, and was up 9% in the first half, accelerating from Q1 into Q2 and tracking well to be up more than 15% for the year.”

“In our consumer business, we've been building around the Filtrete platform. with 4 new product launches in the last 6 months, including 1 with a reusable filter frame that can be refilled by a collapsible deplete filter analogous to a razor, razor blade model.”

“As part of our commitment to innovation excellence, we're increasing the cadence of new product launches. In Q2, we launched 64 new products, up about 70% versus last year.”

“In our Fire Safety business, we launched a low-profile rugged air pack with updated electronics to enable telemetry and connectivity and that has been well received by our largest firefighting customers, especially those who value compacts and maneuverability in small spaces.”

“This chart demonstrates the recent acceleration in organic growth stemming from a combination of strong end market demand, our portfolio simplification, and innovation. This drove a 300 to 400 basis point improvement in LTM average organic growth since the beginning of 2024.”

“Our performance simplification efforts are positioning the company toward less cyclical and less capital-intensive markets, where we can build our installed base and leverage this to drive software and services growth.”

“On innovation, we delivered 4% organic growth from our new product introduction in 2025, with the majority coming from innovation in new markets and offerings as opposed to upgrades on existing core products.”

“We added approximately 600 engineers to our workforce in 2025, which has greatly bolstered our R&D capacity and have also allocated the overwhelming majority of R&D to new product development.”

“Additionally, our sales team incentives are now better aligned to our objective of prioritizing the commercialization of new products, further reinforcing our plan to drive growth through innovation while building stronger customer intimacy.”

“You look at our portfolio, we've been migrating to high growth verticals where we can afford better pricing and we have a bigger step up in terms of revenue that is generated by NPI.”

“We also now measure every quarter new product revenue coming from new products. And our internal target is like, we did 4% last year, like to maintain that rate.”