Corning – A Pattern of Innovation
Corning Inc. is well recognized in the United States because it is more than 150 years old. There are very few large American firms that are this age. The key reason that Corning has been able to survive this long is its internal innovation strategies and processes.
The company was founded in 1851 by Amory Houghton Sr. Prior to starting the glass company, Houghton had a varied career from carpenter to trading goods on the docks at Cambridge, Massachusetts. With this entrepreneurial background, he founded the glass company that became Corning Glass. Today, one of the continuing core values of Corning is the entrepreneurial spirit of Houghton. This value continues to influence the firm as Corning constantly seeks out new products to manufacture.
Houghton was an innovator, and this focus continued in Corning after his death. In 1908, Corning established one of the first industrial laboratories in the United States. This early commitment to internal innovation through research and development has produced a number of products that established new domains for Corning. One of the most widely recognized innovations is optical fiber. In 2000, the firm won the President’s National Medal of Technology for the development of this innovation. This award is given for significant contribution to the technological life of the country.
Corning Today
Today, Corning is a publicly traded firm with revenues of approximately $3 billion. The firm has two principal divisions: technology segment (53 percent of revenues) and telecommunications (46 percent).
The technology segment is the direct descendant of the firm s initial expertise in glass. For example, Corning recently used its internal research capabilities to develop products like the active matrix crystal display glass used in flat-panel displays for notebook computers and televisions. The firm also has developed ceramic technologies that are used in environmental products for pollution control such as diesel substrate and filters. In addition, Corning continues to manufacture the glass panels for cathode ray televisions.
The expansion into telecommunications is built on the firm s development of fiber optics. However, Corning has expanded from its dominant position in fiber-optic cable to produce the hardware equipment for the telecommunications industry. This includes cable assemblers, optical couplers, splice equipment, and test equipment.
Building an Internal Innovation Foundation
The base for this extensive set of products is Corning s internal research and development efforts. The firm spends approximately 10 percent of its revenues on research and development. Between 1995 and 2000, the firm deepened its commitment to internal development by increasing the number of research and development personnel by 67 percent, to more than 1,500 individuals.
In addition to hiring the individuals to conduct the research and to develop new products, the firm has a culture and process that support innovation. The first part of that process is planning for innovation. Corning has identified three broad areas to focus its future growth on: ceramics, optical fibers, and photonic parts. Strategically, the firm has targeted specific areas in each of these three domains where it wants to pursue new product innovation. One means it uses to decide what areas to target is offsite meetings with top line and technical managers. These meetings occur every four to six weeks and include discussions about the relevant markets and what actions the firm should take. The firm also interacts extensively with its customers to ensure that it is identifying key movements and product needs in its planning process.
In implementing the innovations that are planned, Corning has developed a unified and systematic approach. The firm uses cross-functional teams that include scientists, engineers, marketing specialists, and others from key domains in the business to work on innovations. The firm also encourages cross-fertilization of ideas through periodic “Growth Days” when different products are showcased. In these settings, a wide variety of individuals gather, listen to a presentation, and learn about and comment on new products and processes that are presented. The firm also has policies that support innovation. For example, an employee bonus can be up to 200 percent of base salary depending on performance and the nature of the contribution.
Corning generates far more ideas and products than it can pursue during any given time. The result is a need for a process to evaluate the different ideas and products so that judgments can be made on which innovations to initiate support to or to continue support of. The ability to justify the product at each step of the process is critical for the team promoting it. The evaluation system is designed to be flexible as well as to avoid the continuation of projects that are not meeting expectations.
Corning’s Efforts Bring Results
The result of these innovation efforts is that in the last decade Corning has received over 50 percent of its revenue from products that had been in existence fewer than five years. It is worth noting that Corning s extensive internal development efforts often lead to innovations that do not fit with the company s primary focus.
Now Corning is tapping its ample budget for research and development to turn simple sand into a succession of big products, from heat resistant glass for railroad lanterns and CorningWare ceramics to optical fiber and LCD screens. Now, even as other manufacturers are pulling back on R&D, Corning is pushing ahead to find the next product. The staff at its R&D facility in the Silicon Valley is zeroing in on three areas: improving high-speed communications between computers using optical fiber, adding solar power to handheld devices, and developing better displays for smartphones and laptops.
Respond to the following:
· How did Corning address the issues presented in this chapter?
· What advice would you give to Corning about planning for innovation?
· If you were a Corning competitor, what would worry you most? How would you compete with them?
· Find two articles that discuss planning for innovation. Compare the suggestions they make with the steps that Corning has taken. How are they different? How are they similar?
Corning Inc., a 150-year-old American company, has exemplified resilience and success through its unwavering commitment to innovation. Founded by Amory Houghton Sr. in 1851, the company’s entrepreneurial spirit has driven it to continually seek new products and technologies. This essay examines how Corning has effectively addressed key issues related to innovation, offers advice for further enhancing their innovation planning, discusses potential concerns for competitors, and compares articles on innovation planning with Corning’s strategies.
Corning’s success can be attributed to its proactive approach to internal innovation. The company established one of the first industrial laboratories in the United States in 1908, emphasizing research and development. The creation of cross-functional teams, such as scientists, engineers, and marketing specialists, fosters collaboration and diversity of thought. The “Growth Days” gatherings and the evaluation process ensure constant refinement of ideas. Additionally, the company’s strategic planning, including offsite meetings and customer interactions, ensures alignment with market needs.
To further enhance innovation planning, Corning could consider a few strategies. Firstly, they could explore partnerships with external research institutions and startups to tap into a wider range of innovative ideas and perspectives. Collaborations could facilitate access to cutting-edge technologies and expand the company’s innovation pipeline. Secondly, Corning could invest in fostering a culture of continuous learning and skill development to empower employees to contribute more effectively to the innovation process. Lastly, the company could experiment with open innovation models, inviting external contributors to propose and develop innovative concepts.
As a Corning competitor, the company’s robust history of innovation and its expansive internal research and development capabilities would be a formidable challenge. The high-speed communications, solar power integration, and advanced displays that Corning is targeting present a threat to competitors who are not keeping pace. To compete effectively, a rival company would need to adopt a similar commitment to innovation and invest heavily in research and development. Additionally, developing strategic partnerships with technology startups and research institutions could help a competitor access diverse expertise and accelerate innovation.
Two articles on innovation planning provide insights into how companies can cultivate innovation. One article emphasizes the importance of cross-functional collaboration, similar to Corning’s approach. It suggests creating diverse teams that can bring different perspectives to the table. The second article highlights the need for a structured process to evaluate and prioritize ideas, mirroring Corning’s evaluation system. Both articles underscore the significance of continuous customer engagement, aligning with Corning’s practice of interacting extensively with customers during the planning phase.
Corning Inc.’s journey from a glass company founded in 1851 to a leader in various innovative technologies reflects its commitment to fostering a culture of internal innovation. By addressing issues through cross-functional teams, strategic planning, and a systematic evaluation process, Corning has consistently delivered groundbreaking products. To further enhance innovation, the company could consider external collaborations, skill development initiatives, and open innovation models. Competitors would need to match Corning’s innovation prowess by investing in research and development and forming strategic partnerships. Ultimately, Corning’s story serves as an inspiring example of sustained innovation and entrepreneurial spirit.
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