“You Need an Innovation Strategy” is the title of a recent article in the Harvard Business Review; it is also a statement of fact. An organization without one is, as author Gary Pisano notes, a “grab bag of much-touted best practices” that will only become successful through sheer luck.
Pisano put forth Corning Inc. as an example of a company that has maintained a long-term innovation strategy focused on internally-funded basic and applied research. Corning has a large, centralized R&D center in Sullivan Park, New York that invests heavily in knowledge development around its core technologies of materials, ceramics, and advanced manufacturing practices. Decisions about innovation investments are grounded in a deep understanding of technology and demand-pull from the existing customer base. This type of innovation strategy is certainly not the only one that an organization can adopt, however it is a straightforward approach that has proved successful for Corning.
Pisano’s article provides examples of Corning’s successes over the past century; clearly, Corning is a company that thinks long-term, and this thinking has resulted in the emergence of a new, hugely profitable product every decade or so. To have faith that something groundbreaking will be developed at these regular (but relatively infrequent) intervals requires considerable commitment on the part of the company’s leaders to its long-term strategy.
A steadfast strategy such as this does have several notable risks, such as failing to pursue tangential (but potentially fruitful) technology paths due to R&D capacity limits. Additionally, the strategy can result in “blindness” to disruptive innovation of the sort documented by Clayton Christensen. An internally-focused strategy also makes the organization more susceptible to the “not-invented-here” syndrome, and thus less nimble in the face of radical shifts in technology. Finally, execution of this innovation strategy also requires continual coordination with other practices of the company.
Corning’s most recent innovation success, Gorilla Glass, is a striking example of how long-term retention of institutional knowledge can produce unexpected payoffs. Gorilla Glass is ubiquitous in current cellular phones, tablets, and other electronic screen devices, and generates annual revenues for Corning of close to one billion dollars—a significant portion of its total revenue. As documented in a 2012 Wired story, Apple’s Steve Jobs reached out in the mid-2000's to Corning CEO Wesley Weeks in search of creative materials for the display face of the iPhone. Weeks quickly saw the value in working with Apple and dedicated investments into mass-producing the glass.
Jobs’ knowledge of Corning’s capabilities is not surprising, as Corning is a well-known innovator. What is surprising is the origin of Gorilla Glass: the technology platform that Weeks pitched to Jobs was developed in the 1960s and was fifty years old by the time Corning teamed up with Apple!
Gorilla Glass was the result of Corning’s basic research and development in the 1960s as part of a "Project Muscle" initiative. The Gorilla Glass precursor was launched and marketed as a product called Chemcor, which was not particularly successful. It was originally targeted for phone booths, car windshields, and eyeglasses but was ultimately more expensive and less safe than traditional glass due to its high-impact resistance. Ultimately, consumers wanted their glass products to break before their heads did and Chemcor was taken off the market in 1971.
The fascinating part of this history is that a present-day CEO could know about research and products from a bygone era. Such extensive knowledge of a company’s R&D archives is certainly not typical for a CEO. I am not aware of programs whose purpose is to steep executives in the decades-long research history of the company so that he or she will be primed in the event of some serendipitous conversation with another executive. At the time of his conversation with Jobs however, Weeks had been with Corning for 25 years and was directly involved in the specialty-glass business. He was keenly aware of institutional research projects and capabilities from decades of glass research.
Corning was able to execute its strategy of long-term knowledge generation in part because of its amazingly low turnover—less than one percent per year. Weeks is not a unique case. S. Donald Stookey, the inventor of Corningware, worked at Corning for forty-seven years (and still visited the lab regularly thereafter). Thus, when a new use was found for Chemcor, Corning did not struggle to start up the old program and could quickly tap the deep institutional knowledge of its executives, scientists, and engineers.
Innovation success is a long-term game and execution of innovation strategy must acknowledge this type of temporal complexity. Corning’s success with Gorilla Glass was both the result of a strategy that allowed it to slowly build a huge technology advantage in advanced ceramics, and of system-wide policies that maintained its institutional knowledge. Without the latter, the company may easily have missed the opportunity to partner with Apple, lost technology capabilities, or ceded its technical competence to other firms.
Unfortunately, most companies do not have innovation strategies that result in knowledge being thoroughly captured through the shared knowledge of employees. Aside from the challenges of retaining a workforce, it is also increasingly difficult for companies to maintain the breadth of technological capabilities needed for a given product. The necessary expertise may be just too expensive to employ over long, seemingly-unproductive stretches of company history.
Most organizations I speak with have a limited understanding of the knowledge supply chain that exists within them. It is often unclear whether ideas originated with suppliers, universities, clients, or internal staff, and there is no infrastructure in place that allows the scope of ongoing activities or the outcomes of past projects to be efficiently identified. As a result, the organization has no insight into its own knowledge, and this valuable asset is often lost as quickly as it is generated.
Companies need to create new ideas that will sustain or launch new, successful products. The first part of the solution is a long-term commitment to an innovation strategy that meets the company’s needs through a mix of internal R&D, supplier collaboration and technology sourcing, university research, commercialization, etc. The second is establishing coordination between organizational capabilities such as human resources and information technology that will retain the institutional knowledge generated.