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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.

In Gorilla’s case, once the test run had been completed and customers grew excited about the possible product, Steiner had to gear up the whole organization, reaching across traditional turf lines to obtain scientific, management, and sales help. There was little time to waste. The rate of innovation in the consumer electronics field is so relentless that “you can’t be out there making promises with vaporware,” Matthews says. “You’ve got to put resources behind the opportunity and jump on it.”

Convincing the Researchers

The key source of technical expertise was Sullivan Park Research Center in Erwin, N.Y., the company’s heralded R&D facility, home of such technical breakthroughs as cathode-ray tubes, advanced purification materials for catalytic converters, and highly efficient, low-loss optical fibers. To recruit a group of scientists for the Gorilla project, Steiner enlisted his business technology manager, Xavier Lafosse, who also works for the top brass at Sullivan Park in a dual reporting arrangement Corning designed to facilitate joint activities between the commercial units and research teams. With Lafosse pointing the way and Steiner reaching out in person to individual scientists to spark their interest in Gorilla, as many as 100 researchers joined the project either full-time or part-time. “Our scientists will work where they know they can make an impact and where they’re appreciated,” Steiner says.

Indeed, Steiner and his team needed all the scientific help they could get. The manufacturing process was a complex affair marked by a painstakingly intricate ion exchange in a salt bath. Essentially, the glass is soaked in potassium at several hundred degrees centigrade until sodium ions on both sides of the glass are replaced by much bigger potassium ions, which because of their size greatly strengthen the material. Scientists at Sullivan Park liken the operation to taking a wall made of tennis balls, ripping out most of the tennis balls, and replacing them with basketballs. Obviously, the wall would have much higher density.

Sampling began in December 2007. Four months later, Corning won its first Gorilla customer, and by June, full-scale production and marketing were under way — a fast track through the stage gates that posed any number of challenges. For one, Steiner had to find a melting tank to manufacture Gorilla in large batches because the Danville facility couldn’t handle such an ambitious effort. He approached his colleagues in the much larger and highly successful display division and was able to obtain tank space in a plant in Harrodsburg, Ky. “We kind of had to wedge in,” says Steiner.

Company Expectations

That Steiner could even accomplish that illustrates a key advantage of Corning’s innovation process. Although turf issues can be tricky to navigate — executives approached by Steiner had little to gain from working with him because their compensation was based primarily on meeting their own targets — Corning’s division heads recognize that the company expects them to support promising new product launches. “In many companies, Gorilla glass might get to use the tank one time because the CEO makes the phone call,” says Harvard’s Henderson. After that event, she adds, the CEO’s attention is often diverted and the upstart is likely to be frozen out. In this case, intervention from CEO Weeks was unnecessary, the company says.

Throughout the development of Gorilla, Steiner made sure that the scientists attached to the project were meeting face-to-face with possible customers. “We have to create demand, and our scientists are one of our best commercial weapons,” Steiner says. “The credibility they give us is more than we can grow on our own.” Moreover, Corning officials say, by talking to customers frequently, the researchers can at times anticipate their needs.

As the Gorilla project raced toward its last stage gate, it soaked up more and more resources at Corning; as a result, other projects had to be pared away. Keeping business units motivated in the face of cutbacks is one of the toughest challenges in managing innovation. Corning’s response is to maintain the backlog of development efforts as live but unstaffed and to avoid laying off researchers in favor of moving them to ongoing development programs. “If there is an absence of pull in the marketplace, a fundamental flaw in the technology, or if the investment is unaffordable, the project manager is responsible for bringing that information forward,” CTO Miller says. “He’ll do that if he feels safe that if we shut it down, his people are going someplace else within the company. Otherwise, self-preservation kicks in.”

Add it all up, says Harvard’s Henderson, and Corning is able to maintain an equilibrium that other companies struggle to find. Some companies have the right processes in place, but employees don’t trust one another and don’t cooperate; other companies encourage a close-knit culture but lack the systems and processes to wring innovation out of the staff. As an illustration, Henderson notes that researchers at 3M are allowed to take 10 percent of their time to pursue personal interests. But despite the oft-cited Post-It Note example, a prominent instance in which a successful item emerged from a 3M employee’s idea, a very low percentage of researchers’ creativity is turned into an actual product. “If there is no place to plug that work in later, it tends to dribble away,” Henderson says. “But at Corning, they have a perfect loose–tight balance: looseness when it comes to creativity but tightness when it comes to making decisions.”

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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.
 
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