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Highlights of the
Corning's Innovation Strategy
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The company's long-range
technological strategy emphasizes optic fibers, photonic parts,
and leading-edge ceramics
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From 1995 to 2000, R&D
spending increased from 3.4% of sales to 8.4%, from $175 million to
$560 million; research space doubled; research personnel increased
by 67%, to more than 1,500 people
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In 1998, 57% of the
company's sales were from products less than four years old; in
2000, that portion had grown to 84%
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The company's market
capitalization rose from $9 billion in 1997 to $65 billion in 2000
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from 1998 to 2000, the
Corning's stock price rose tenfold, from less than $25 to more than
$280
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Five Steps
to Turning an Idea into a Successful New Product |
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The Jazz of Innovation
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Building Knowledge and
Road-Mapping – establishing a shared view of trends,
discontinuities, and related events that could shape the future;
formulating general industry map, event map, and systems map by a
cross-functional roadmap team; and developing project portfolio.
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Determining Feasibility
– developing a small working
prototype;
experimenting with new ideas both in the laboratory settings and
with potential customers; defining if the idea can be developed into
a product with significant market potential, if proof of concept can
be achieved, and if the technology can achieve the intending
objectives.
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Testing Practicality
– developing a larger prototype that reflects the initial
product or process concept; testing this prototype both in the
laboratory and with target customers; estimating manufacturing costs
and overall capital requirements; assessing potential competitor
response; raising funds as appropriate.
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Proving Profitability
– determining whether the product will satisfy a large market
need, can be manufactured reliably, and produced at a cost that
allows for a profit.
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Commercializing and Improving Continuously
– building sales volume; gaining market share, maintaining
sustainable competitive advantage;
and satisfying customer needs. As it is important not to let the
product mature, the company is
constantly making improvements
and seeking new growth markets.
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Corporate Culture of
Innovation
Corning, a Fortune 50 company, has
a long heritage of
inventing
new technologies and
creating new
businesses. It presents an excellent example of harnessing the benefits
of the
in-company ventures and the
business systems approach
to new product development and
project management.
Research, development, and the innovation
process are the lifeblood of Corning. It is an integral part of its
culture
and
values-driven
tradition. Corning is oriented around
innovation, built on constant reinvention
"Discovering Beyond
Imagination" is a corporate slogan that embodies literal truth.
Yin-Yang of Value Innovation
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From Corning's
Discovery Centre Statement: Our Culture for Innovation
A world leader in industrial research and
development, Corning staunchly believes in change. We thrive on seeking new
opportunities to make a difference for mankind and bringing them to life.
Our dedicated scientists conduct their research
with the highest integrity, finely tuned processes and superb skill.
Breakthroughs occur when our researchers leverage existing technologies
across product lines or come as the result of a profound moment of
inspiration or even as an unexpected, experimental outcome. That is when
research is at its most exciting.
We do everything possible to sustain our
culture of innovation. We
continually invest in research and development to provide our scientists
with the resources they need. This has enabled our scientific community to
develop a unique ability to solve complex problems and maintain a keen focus
on things that really matter -- technologies that improve our lives and
change our world.
R&D is the foundation on which Corning’s
history has been built, and we have no doubt it will lead us to future
technological triumphs. |
Internal Venture
Capabilities: Key Features
Compared with many corporate
innovation processes, Corning's internal venture capabilities differ in
three ways:
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Managers have a shared view of
trends discontinuities and future events that could have an impact on
industry and shape the future; they develop industry, systems, and
technology
roadmaps to develop the
innovation strategy
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Respect for company's researchers, who are
linked to the company's business objectives
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New business creation is central to achieving corporate strategic and
financial objectives;
cross-functional teams are involved at every stage of the
innovation process; employees recognize the innovation process as the
creative source of next-generation systems and products.
Corporate Vision and Core
Technological Competence
Corning invented optical fiber,
has deep knowledge of materials, technology, and high-speed manufacturing,
and also has a systems perspective of how the various pieces of an
optical communication network fit together. All that knowledge and expertise
fostered Corning's clear vision of the large and fast-growing optical
communications industry.
To form the
corporate vision
and
technological strategy, a series of
day-long off-site meetings of company's ten top-line and technical managers
were held. These "deep dives" meetings were schedules every four to six
weeks. Besides shaping the Corning's technological strategy and finding ways
to get close to customers, the meetings were also to build a sense of
informality, trust and shared understanding of the future among the ten team
members.
Disciplined Approach to
Managing Innovation
Having realized that a disciplined
and highly managed radical innovation
process for new product development makes the critical difference between
success and failure, Corning identified the five steps
to turning an idea into a successful new product. General managers oversee a
mix of mature and growth businesses, as well as early-stage ventures.
The innovation process is used at
Corning not just for product development; it is also applied to achieving
process improvement.
Developing and Managing
Project Portfolio
Project selection is a highly
competitive and tightly managed process – not all projects get funded.
For new high-risk and high-potential-return projects, project teams work
hard to find opportunities for lowering costs and reducing risks.
CEO
and the corporate executive
team formally review individual projects three times a year, making
decisions about the portfolio.
Involving Cross-Functional
Teams
Cross-functional teams are involved at every stage of the
innovation process and have access to every resource and technology that
is needed for project success. These teams address technology,
manufacturing, and marketing concerns with every new idea and experiment,
and they work to keep all these functions synchronized. They determine quite
early in the innovation process exactly how the technology fits with
customer and market needs, as well as manufacturing constraints. This
process is highly iterative.
Project Leadership
Corning realized that having a
sound innovation process is not enough. What is important is how you
practice it. Thus, it's all comes down to
leadership.
It's project leadership,
not control by top management, that makes the process work.
10 Key Project Leader Skills
To maintain the rigor of the
innovation process, Corning selects project managers on the basis of their
innovation
leadership skills and their
cross-functional understanding of technology, marketing and
manufacturing. Corning gives project leaders an autonomy to decide when to
go fast, call for a formal review, or to blow through a prototype review
gate that combines prototype and product development steps in order to
accelerate time to market.
Project Management: Business Synergies Approach
Two or three times a year, Corning
stages a companywide "Growth Day" at which it show-cases its emerging
products and businesses. The process is very informal. At the end of
presentation, top managers usually ask the project leader: 'What are you
worried about? What can we do to help you? We're not here to review you. The
only thing we require is that you make your milestones. What do you need?'
Employee Motivation
Banking on people's potential to
be
entrepreneurial
– to
solve problems
and keep innovation and invention moving steadily along, Corning offers its
employees quality facilities, access to resources, long-term
commitment, and an attractive
compensation program that includes stock option. It rewards well its
best employees, including hourly workers, through performance bonus plans.
The size of the bonus may vary from 0 to 200% depending on the employee's
performance.
Developing Technological
Strategy together with Suppliers and Customers
Corning keeps it's customers, such
as Nortel Networks, end-users, such as AT&T, as well as OEM suppliers well
informed of its product development plans. It uses road-mapping as a
co-innovation tool that allows customers and suppliers to
work together to build products. |
