Driving Strategic Success through Human Capital Planning: How Corning Links Business and HR Strategy to Improve the Value and Impact of Its HR Function

Article excerpt

The HR function at Corning, Incorporated, considers human capital planning (HCP) a critical business process because of its transformational impact on the value the function delivers to the business and the way it delivers that value. With HCP, HR has the opportunity to get and keep a seat at the strategic decisionmaking table.

Corning uses HCP to improve its ability to identify human capital implications of corporate strategy and reshape HR services to better support the business. This article shares the evolution of HCP at Corning, the process and tools in place, its business impact, and key lessons learned in designing and implementing this critical business process.

Corning: A Legacy of Innovation

The evolution of human capital planning at Corning directly reflects the history of Corning itself. Corning is a 150+ year-old firm with a record of successful process and materials innovation in support of life-changing products, a record that stretches all the way back to the invention of a shatter-resistant lens for railroad lanterns in 1874 (see Exhibit 1).

EXHIBIT 1

150 Years of Corning Innovations

1880
Electric Light
Bulb Envelope

1874
Railroad Lantern
Glass

1897
Thermometer
Tubing Machine

1915
Pyrex[R]
Glass

1936
Telescope
Mirror

1947
CRT
Bulb

1957
CorningWare[R]
Housewares

1961
Spacecraft
Windows

1970
Optical
Fiber

1972
Catalytic
Converter Cores

1984
LCD Glass
Substrate

2002
LID Drug
Discovery

Corning has historically maintained a diverse portfolio of businesses based on a common desire to be first to market with products that have functional advantages for customers and strong intellectual property protection against potential competitors. Talented employees have remained central to the company's ability to sustain an innovation-based business model, regardless of how the specific mix of products in the portfolio have changed over time.

A Wake-Up Call for Corning: The Impact of the Telecommunications Bubble

Corning's traditional strategy of maintaining a balanced portfolio was sorely tested by the telecommunications boom of the late 1990s, which ended in one of the most difficult industry contractions since the boom-bust cycles experienced in the U.S. railroad and steel industries in the late 19th and early 20th centuries.

The collapse of the telecom bubble, and its impact on Corning's profitability, threatened the company's viability and forced a serious re-evaluation of Corning's business plans and processes. The analysis included tough decisions regarding the portfolio of businesses on which Coming would continue to make bets on future growth, and resulted in the sale of several large businesses. During this time, Corning shed nearly half of its workforce and shrank from over 40,000 employees to just over 20,000. The mix of talent required shifted away from the optical, electronic, and systems specialties demanded by the telecommunications businesses back to materials and process specialties demanded by the environmental and display technologies businesses.

While the business portfolio was being reshaped, the corporation re-evaluated its investments in corporate staffs. Corning considered, and ultimately rejected, several proposals to outsource a range of staff functions that included procurement, human resources, information technology, and finance, choosing instead to centralize these functions to gain greater leverage from functional structure while significantly reducing costs. This process generated new performance expectations for each of these functions. Each group was challenged to sharpen its ability to add value to Corning's portfolio of businesses.

In response to this challenge, Human Resources renewed its focus on building functional capability and service offerings that ensure each business has the right number, quality, and type of talent needed to execute its strategy, and gets the highest and best use from that talent portfolio. …