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.”
William J. Holstein is a veteran business journalist and author based in New
York. S+B March 1, 2010 http://www.strategy-business.com/article/00021?pg=all
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