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., with its rich history of over 150 years, has successfully navigated the challenges of time through a persistent commitment to innovation. This essay explores how Corning addressed key issues related to innovation, provides advice for refining their innovation planning, discusses potential concerns for competitors, and compares two external articles on innovation planning with Corning’s practices.
Entrepreneurial Spirit and Legacy: Corning’s strong entrepreneurial spirit, inherited from its founder Amory Houghton Sr., has driven the company’s consistent pursuit of new products. This legacy continues to shape its innovative culture, enabling Corning to stay relevant and adaptable.
R&D Investment: Corning’s establishment of an early industrial laboratory and continued investment in research and development (R&D) exemplify a commitment to internal innovation. Devoting around 10% of revenues to R&D and expanding the R&D personnel base demonstrate a genuine effort to foster creativity and new ideas.
Strategic Planning: Corning’s strategic approach involves identifying growth areas like ceramics, optical fibers, and photonic parts. Regular offsite meetings and customer engagement ensure alignment with market trends and needs, guiding Corning’s innovation focus effectively.
Cross-Functional Collaboration: The company’s employment of cross-functional teams, its encouragement of cross-fertilization of ideas through “Growth Days,” and its focus on collaboration between scientists, engineers, and marketers reflect its holistic approach to innovation.
Evaluation and Adaptability: Corning’s flexible evaluation system allows for careful assessment of ideas and projects at various stages. This adaptability helps the company allocate resources effectively and weed out projects not meeting expectations.
Diversify Innovation Focus: While Corning has made significant strides in various domains, diversifying further could provide an edge. Exploring adjacent markets and leveraging its expertise could lead to the creation of breakthrough products.
Open Innovation: Corning could consider embracing open innovation practices, collaborating with external partners, startups, and universities. This could infuse fresh perspectives and accelerate the pace of innovation.
Long-Term Vision: Balancing short-term gains with long-term vision is crucial. Corning could create a roadmap for disruptive innovations that might take years to materialize but could secure its position as a pioneer.
If I were a competitor of Corning, several aspects would concern me:
Rapid Innovation: Corning’s ability to generate more than 50% of revenue from new products within five years indicates a high level of agility. Competitors would worry about Corning consistently outpacing them in terms of innovation.
Diverse Product Portfolio: Corning’s diverse product portfolio, spanning from glassware to telecommunications, makes it a formidable competitor across multiple industries. Competing would require a multi-faceted approach.
Research Investment: Corning’s sustained investment in R&D grants it a competitive advantage by consistently developing cutting-edge technologies. Competitors would need to match this commitment to keep pace.
Article 1: “Strategies for Effective Innovation Planning” This article emphasizes the importance of creating a clear innovation strategy, aligning with market trends, and fostering a culture of creativity. Corning’s offsite meetings, strategic planning, and cross-functional teams align with these suggestions.
Article 2: “Open Innovation: Collaborating for Success” The second article advocates for open innovation by collaborating with external partners. While Corning’s cross-functional teams and Growth Days foster internal collaboration, exploring open innovation further could provide a different perspective.
Corning’s enduring success is rooted in its unwavering commitment to innovation. By addressing key issues, embracing cross-functional collaboration, and adapting to changing dynamics, Corning has carved a pattern of innovation that sets it apart. To refine their innovation planning, Corning could diversify its focus, embrace open innovation, and balance short-term gains with long-term visionary projects. Competitors would need to match Corning’s rapid innovation pace, product diversity, and research investment to stay competitive. As the company continues to evolve, it exemplifies a true pattern of innovation that others can learn from and be inspired by.
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