29112017 sufian corning inc

MM 5011 – Knowledge & Innovation Sufian (29112017)

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CORNING INCORPORATED:

The Growth and Strategy Council (GSC)

Learning Points

1. Innovation was the core of corning’s Identity, because corning is a science based

company, Innovation is the engine for the company. Corning Incorporated tagline (motto)

is “Discovering Beyond Imagination”.

2. Collaborative business structure and R&D focus has resulted in consistent innovations

that have created new markets and established Corning as an industry leader.

3. Corning’s history has been profoundly influenced by some remarkable business leaders,

scientists, and engineers. The success of any business or institution depends on people.

4. Corning survived its own near-death experience in 2001 and weathered the global

economic crisis of 2009 and 2010 through a strategy of strengthening and consolidating

R&D with a focus on growth through innovation that builds on the company’s core

competencies.

5. Innovation at Corning was centrally managed by a group called the Growth and Strategy

Council (GSC). The core group members are CEO, COO, CTO, heads of research,

development and engineering and the head of HR.

Lesson Learned

1. Based on my own experiences

In my organization, there’s a group similar to GSC, we called it Business Process

Improvement (BPI) team. The role of BPI team is to evaluate all existing (as-is) business process

and analyze if there’s lack of efficiency or “pain-points” in particular processes. They could re-

design some processes and recommend it to the users (or Corporate Management Team - CMT)

for better performance. The BPI team however could not make any decision or intervention to

the existing processes without any request/ approval from users or CMT.


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Related to the technology and innovation, my organization is developing an innovation to

improve global core processes and apply effective technology while replacing ineffective system

which will take place in 2014. It is called “Transform core processes with technology (TCPT)”

with three phases (Enable, Extend, and Empower).

Another similarity with the Corning Inc., if we look at page 8 the last statement saying

“We do move people across divisions, early and often”. It is part of their strategy in the talent

and knowledge sharing. In my organization, we have some staffs called Field-based Partnership

Facilitators who are placed in several places in North Sumatera, DKI Jakarta, West Java, Central

Java, DIY Jogjakarta, East Java, Bali, and NTT. We also have the strategy of moving those staffs

across regions (we are divided into 4 regions: West, Java-1, Java-2, and East) every 3-5 years.

2. From the perspective of management concept

- Business Ethics

Corning Inc. time-honored Values set it apart from other companies as well. They are the

unchanging moral and ethical compass of Corning and are all-important in guiding its actions.

They enable Corning to deliver superior, long-range economic benefits to its customers,

employees and the communities in which Corning operate.

An appreciation for innovation must be embedded in the heart and soul of the company. The

preference for a growth trajectory through innovation must be part of an overall strategy and

philosophy.

- Marketing management

Corning divides its operations into five reportable

business segments:

Telecommunications

Corning competes across all of its product

lines with many large and varied customers.

Corning’s competition comes both domestically and

foreign. Some of Corning’s competitors are larger


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than Corning and have broader product lines. Corning strives to maintain its competitive position

through constant Research & Development expense in order to maintain its technological edge.

Corning believes its competitive advantage lies within the ability to innovate.

Because of its long history, Corning understands that markets are continually changing,

but its commitment to its core technologies and ongoing research is its strength. By careful

management of innovation and insight into markets and customer needs and creating of a

pipeline of new products, Corning will ensure its future success as markets evolve.

Innovation pipeline/lifecycle and innovation effectiveness model

- Operation management

Corning’s reengineered five-step innovation process ensures a focus on core competency and

demands more involvement from senior management and the board.

Innovation Process Effectiveness – Execute Programs


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- Organizational Behavior

Corning Inc. strong, visionary leadership has always been guided by an enduring set of Values

that define Corning’s relationships with employees, customers and the communities in which it

operate. Corning employ approximately 29,000 employees worldwide (2011). Accordingly, the

commitment of present and future employees and managers will play a large part in ensuring that

Corning meets the challenges of the future. Below is the organizational structure of Corning Inc.:

Corning has formed the Growth and Strategy Council (GSC) in 2001. Corning needs to maintain

their performance in a long term condition. It needs strategy and great people who involved and

have willingness to improve the performance for sustainability. The individual or group that

undertakes the task of initiating and managing change in an organization is known as a change

agent and that what’s corning did when formed GSC. The role of GSC is varied from making

decisions about pacing and investment, advising businesses on pricing strategy etc. The GSC is

about establishing best practices and getting all innovation programs to the same level of rigor.

- Knowledge & Innovation

Knowledge sharing approaches can be done with following activities:

1. Morning meetings (Progress reports and seeking input)

2. Technical tutorials (teaching specific expertise)

3. Technical reviews – open

4. Senior Leadership Team meet (sharing information and interact)

5. Technical/Business Information Center

6. Special events, such as anniversary celebration


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Innovation at Corning was centrally managed by a group called the Growth and Strategy

Council (GSC). Innovation is a social activity. Multidisciplinary teams working together with

purpose and energy beat individual genius every time. Innovation is not a handoff process; many

people—with diverse experiences and perspectives—need to be involved from the beginning.

Innovation is essentially team based, and leadership has the responsibility to create a culture that

welcomes input from every member of that team.

Corning developed a community of practice, such as Self-initiated or suggested by leadership;

Entech – our largest community of practice; Best practices, lessons learned, skills development;

invite external speakers; and strong linkage with outside networks.

Corning also centralized RD&E essential for effective knowledge sharing. Centralizing

Corning’s R&D activities and consolidating facilities was a brave step in an era when many

companies were globalizing and decentralizing.

The innovation process requires capabilities, processes, money, a nurturing culture, and much

more. But perhaps most importantly, innovation requires will. It requires a determination to

succeed. In practice, innovation at Corning followed what was called the “innovation recipe” as

shown in the figure below. Corning’s innovation recipe keeps the company focused on its core

competencies.

- Accounting (Finance management)

Costs of goods (COGS) sold were projected as a percentage of revenue. Corning’s core products

require significant quantities of energy, uninterrupted power sources, certain precious metals,

and various batch materials. Corning’s manufacturing processes can operate on oil, propane,

natural gas or a combination of these energy sources. This flexibility allows the company to keep

energy costs low. Going forward we project costs of goods sold to increase with increasing

margin pressure from customers, specifically in Display Technologies where inability to pass

costs to customers has begun to deteriorate margins.


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Corning Inc. applied the straight-line method to project depreciation and amortization. It

depreciates computer hardware and software, manufacturing equipment, furniture and fixtures

and transportation equipment. The straight-line deprecation time was the most accurate

depreciation for the fiscal year ending January 25, 2012.

Net working capital was projected using a working capital model

which incorporates a number of ratios to calculate an expected

path for working capital into perpetuity. The most significant

change in the model was to cash, as management has built up an

enormous cash balance and plans to disperse this cash in a

number of different ways going forward. The projections show

cash depleting to more normalized levels for Corning as

management buys back shares, acquires companies, and

increases spending on R&D. Corning also increased its dividend

by 50% in 2011, which could also contribute to a declining cash

balance in the future. Other line items were projected as a percent

of revenue, with a few exceptions, and the current ratio was used

as a guide to ensure reasonable projections into the future.


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Revenue Breakdown by segment

- Business Strategy

The main growth driver for the company is its focus on R&D. Management has historically

targeted a spending level around 10% of revenue for R&D and they plan to maintain their focus

on this area of the business.

As scientists focus on innovation within the company’s labs, the management team has

strategically sought acquisitions with a similar focus on innovation. Corning’s acquisitions are

used to gain access to technology and product offerings that supplement its five business

segments.

One more important strategic growth initiative Corning has pursued in the past is a significant

focus on joint ventures. Some of these ventures have become a material part of Corning’s

earnings, with Dow Corning and Samsung Corning Precision being the two largest.

References

1. http://www.corning.com/about_us/faq.aspx

2. Corning, Inc. (University of Oregon – Investment Group), February 10, 2012

3. Corning Incorporated by Brian Howard (Reprinted from American Biotechnology

Laboratory, October 2005)

4. Knowledge sharing and communities of Practice (Front end of innovation

conference) by Dr. James Scott, Science & Technology, May 22, 2006

5. Out of a near-death experience into a chaotic global economy: how Corning

rediscovered its innovation roots, by Joseph A. Miller, Jr. (November-December

2011)

http://www.corning.com/about_us/faq.aspx

29112017 sufian corning inc

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