Reference no: EM133508508

Case Study: 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.

Questions: 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?