strategy+business is published by PwC Strategy& Inc.
 
or, sign in with:
strategy and business
Published: March 1, 2010

 
 

Five Gates to Innovation

Corning Inc.’s process for developing inventive products actually works, a claim that few companies can make.

By 2007, some cell phone makers were at their wit’s end about the screens on their devices. The plastic screens broke too easily when the handsets were dropped, and keys and other objects left deep scratches. Sensing a business opportunity, a small team in the specialty materials division of Corning Inc. dug out of the company’s archives the formula for a superstrong but flexible glass — something called Chemcor, which Corning had unsuccessfully attempted to introduce in 1962 for automobile windshields — and sought to test it for mobile phones.

But just producing an experimental batch was slated to cost as much as US$300,000, enough for the division to miss its budget target for the year. Primarily for this reason, the team’s boss, Senior Vice President and General Manager James Steiner, was opposed to the idea. But he concedes he had another reason as well: “I didn’t really get the concept of using glass on cell phones,” Steiner recalls.

However, team leader Mark Matthews was persistent — and his hunches had been right before. In 2003, Matthews had led the charge at Corning to sell a specialized glass product to Texas Instruments (TI) for its digital light processing projectors, considered a highly chancy venture at the time because sales of high-tech items had slowed after the dot-com bust. But TI’s product proved to be a hit, and Matthews’s risk taking made his boss, Steiner, look savvy.

Trusting Matthews’s instincts once again, Steiner finally relented and gave the go-ahead for the cell phone glass test run at a company facility in Danville, Va. Matthews “took all the risk, knowing I wasn’t thrilled about it,” Steiner says.

Today, after only a couple of years on the market, Corning’s cell phone glass — now known as Gorilla — is a huge success. Samsung, LG, and Motorola have placed it in three dozen handheld models, and Dell has chosen it for some of its laptops. Gorilla is selling at an annual rate of $100 million and is projected to become a $500 million business by 2015. That will make it a significant revenue stream for Corning, whose sales in 2009 totaled $5.4 billion.

In Record Time

Like other top companies, Corning has a rigorous system for managing ideas through a stage-gate process in which they are embryonic in Stage 1 and commercially marketed in Stage 5. But in Corning’s case, the system actually produces consistent results; few organizations could move a product from concept to commercial success in the short time that it took Gorilla to reach customers. “If I have 100 students in a class and I ask them, ‘How many of you have a stage-gate process in your company?’ about 95 raise their hands,” says Rebecca M. Henderson, a Harvard Business School professor who has studied innovation and knows Corning well. “But if I ask, ‘How many of you have a stage-gate process that really works?’ only about 15 raise their hands. For a company of its size and complexity, Corning is exceptional.”

What Corning appears to do better than most is insist that innovation be managed not by individual inventors or small teams in silos, begging for scraps of support from the parent corporation, but by multidisciplinary groups throughout the organization. Overseeing this process and making sure that Corning departments cooperate in product development efforts sanctioned by management are two bodies: the Corporate Technology Council, led by Executive Vice President and Chief Technology Officer Joseph Miller, and the Growth and Strategy Council, cochaired by Corning Chairman and CEO Wendell Weeks and President and Chief Operating Officer Peter Volanakis. The former unit concentrates on early-stage ideas, and the latter takes over when an idea is nearing commercialization.

 
 
 
Follow Us 
Facebook Twitter LinkedIn Google Plus YouTube RSS strategy+business Digital and Mobile products App Store

 

Resources

  1. Davis Dyer and Daniel Gross, The Generations of Corning: The Life and Times of a Global Corporation (Oxford University Press, 2001): A company-approved but nonetheless revealing history of the Houghton family and the company.
  2. Margaret B.W. Graham and Alec T. Shuldiner, Corning and the Craft of Innovation (Oxford University Press, 2001): A history of the research and development process at Corning.
  3. William J. Holstein, “Trial by Fire,” Business 2.0, February 1, 2003: A look at how Wall Street urged Corning to dump all non-fiber optic businesses, which the company resisted.
  4. Michael Mandel, “Corning: Lessons from the Bust and Boom,” Business Week, May 4, 2009: An interview with Corning CEO Wendell Weeks on how the company navigates its way through technology cycles.
 
Close