Human Capital Planning at Corning: More Than a Head Count

By Pamela Babcock Mar 27, 2008
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NEW YORK—Analyzing talent needs and determining what it will take to be competitive in the future can be a challenge, particularly for a company such as Corning Inc., where there’s always a new technology offering on the horizon.

But Corning has found that analyzing its future talent needs isn’t so much about “people,” but “processes,” company experts told those attending a recent session during the Talent Management Strategies Conference here sponsored by The Conference Board.

“Human capital planning (HCP) at Corning is the bridge that translates business strategy into talent strategy,” said Donald H. Ruse, senior vice president for Sibson Consulting, which worked with Corning to develop its HCP process. “The bottom line is talent issues can restrict growth and profitability.”

Unlike traditional workforce planning, HCP enables Corning to invest time, money and energy into those processes that are more critical to ensuring that the company always has the right amount, type and quality of talent. It’s not intended to be a precise headcount; rather HCP focuses on segmentation as the foundation for effective planning.

Corning’s Discovery

Corning is perhaps best known as a leader in specialty glass and ceramics, and its competitive advantage comes through intellectual property and being first to market, said Christine M. Pambianchi, Corning’s vice president of human resources.

In March 2007, Corning was named to Fast Company’s Top 50 list of the world’s most innovative companies. According to Fast Company, 75 percent of Corning’s revenue today comes from products that didn’t exist five years ago, such as an eco-friendly LCD glass made without heavy metals.

But Corning knows its talent portfolio issues can negatively affect its ability to succeed. Over- or understaffed units can affect the company’s cost structure, cash flow and the ability to deliver goods and services. The wrong skill mix—leading to an under-skilled workforce—can mean missed market opportunities, or—if the workforce is over-skilled—cost structures that drag on profitability.

The inability to quickly deploy people where they’re needed also can mean missed market opportunities and/or poor customer service and, ultimately, revenue erosion.

And finally, having an ill-equipped pipeline of qualified managers and technical experts can directly affect the organization’s ability to execute strategy and business plans, Ruse said.

So four years ago, Corning adopted a four-step HCP process to help it focus on the company’s continually changing workforce needs. Every spring, it goes through a “deep dive” look at the five-year business cycle, Pambianchi explained.

Tenets of Corning’s HCP Process

Ruse said the foundation of Corning’s human capital planning process is based on the following considerations:

  • The cornerstone is a series of questions that “drive conversations” to develop insights regarding talent. In addition, specific web-based analytic tools help document and support these conversations and decisions.
  • HCP differentiates talent based on the relative value of the contribution to the business.
  • The focus is on talent roles critical to the strategy and business objectives, not the competencies required. It also focuses on roles, not the people in the roles. “This is not planning for Larry, Sally and Bob,” Ruse explained.
  • HCP provides directional recommendations on the number of people needed for a given role, but the company believes over-reliance on the precision of forecasts provides little incremental value for managing talent. “This is not a precise headcount process,” Ruse added.
  • HCP is designed to inform management decisions, not to make decisions for managers. “It’s meant to give Corning leaders foresight and insight,” Ruse explained.
  • Lastly, HCP does not replace the company’s succession management process.

Doing the Four-Step

During the first step of HCP, Corning’s HR department engages the line in a dialogue to answer three critical questions:

  • What are the key business challenges?
  • What are the critical business initiatives?
  • What capabilities and corresponding types of talent are most/least critical?

From there, Corning decides what critical business initiatives it will focus on for the next two to five years, what roles will most impact critical business initiatives and what roles will be affected most by the defined critical business initiatives.

The company then uses analytic tools, developed by its consultative partner Sibson, to address segmentation in order to understand and manage its talent “like a portfolio of assets,” Pambianchi said. It breaks it down to roles that impact strategy—both strategic and core—and roles that are affected by the strategy—both requisite and non-core. From there, Corning decides for each whether to build, protect, streamline/outsource or redirect.

The second step in the process is to identify future talent requirements. Corning develops a business-based estimate of the number of people needed and the timing of the need by role. Talent dynamics are modeled for strategic and core roles “to get a true picture of future talent needs,” Pambianchi said. Factors considered include turnover, retirement, movement, the labor market, and incumbent productivity and proficiency.

By answering key questions, Corning can identify the real number of people needed and figure out things like additional headcount needed to cover expected growth within strategic and core roles, replacement headcount or the number needed to replace anticipated “churn” and re-tooled headcount, or the number of people needed to be trained to have a “fully productive staff.”

Using analytics, Corning then models future talent needs across multiple scenarios.

Step 3 is the point where the company examines potential talent gaps. Corning dissects each gap into strategic and core roles to figure out where the shortage comes from and what options the company has to close it.

It then analyzes “build vs. buy” strategies to close the gap. It “builds” when the timing of the talent needs is such that it can re-tool existing talent from requisite or non-core roles or when the specific skills it needs can’t be found in the external labor market. It “buys” when the talent need is immediate, when it can onboard external talent faster than it can retool internal talent or when specific skill sets needed are so unique that Corning must go outside to find them, Ruse said.

Using a “build/buy” decision analysis tool helps Corning understand the trade-offs associated with hiring and developing talent.

Corning then addresses requisite and non-core roles. For requisite roles, the company determines whether it can streamline the work to reduce headcount and free investment dollars. What are the economic benefits and downsides to outsourcing in terms of quality, community reputation and control?

For non-core roles, Corning determines whether it should shed those roles to free resources to fund “buy” and “build” investments for strategic and core roles, Ruse said. The company also decides at that time whether it can re-direct the people in those shed roles to other roles or other divisions where their skill sets match up with identified talent gaps. Finally, the company decides whether it can re-tool any of the people in those roles to fill core or strategic talent gaps in other divisions.

As a final step, Corning uses insights gained from the process to align HR strategy with business strategy, Pambianchi said. HCP results are reviewed by HR and the line to determine human capital priorities, investments and actions needed.

The company’s HR leaders—both in the field and at its Centers of Excellence—then develop two-year goals and objectives and validate these with the line. Human capital needs are prioritized by division and across divisions, Pambianchi said. The type and level of support are determined, priority changes in HR processes are made to address needs, budget and staffing requirements are identified and an operating plan is developed, including metrics to measure performance.

Pambianchi said a key to the process is educating HR generalists how to have the initial business conversations that are so critical to the success of HCP.

“It takes new skills to implement HCP,” she said. “We’re not there yet, but four years into the mission we’ve set a bar and this has allowed us to raise that bar.”

Pamela Babcock is a freelance writer based in the New York City area.

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