Corporate Development

The strategic development of the company often boils down to defining “our value proposition”, “our core competences” and “our priorities”. 

Very few companies are able to do this, and even fewer are able to communicate it. XOventure educates the relevant managers in strategic thinking and consolidates it in to a crystal clear communication. A management that is not strong in strategic thinking is like a captain without a compass. Wind and tide may change – but the strategic direction is maintained and through it organic growth. 

XOventure has been successful in reshaping and strengthening the corporate strategy of companies at various stages - from big pharma to early start-up. 

Larger corporations often suffer from insufficient growth. Some companies like J&J have accepted that one big unit is a barrier for growth and have divided or kept smaller entities or  spun-out non-core activities.

In 1995 Jan Ekberg, Chairman of Kabi Pharmacia, challenged Jørgen Thorball: “Come-up with a proposal for how to generate more organic growth”. The answer to this can be boiled down to a simple model, which was first put to the test in 2001 in Novozymes by Jørgen Thorball:

The core of the model is to “remove the competition for power”:

In large organization people are more preoccupied with political considerations and activities than with building something innovative. New initiatives are seen as a threat to the existing structure, particular when resources are reallocated to them. In other words there is no genuine incentive to support new activities unless you are going to lead them. And if you are the chosen one, others are not and do not have a strong motive to assist. The CEO is of course very aware of this, and is frequently called in to stress how important the new initiative is, and that the organization should support it (Read: "If you don’t – you will be punished"). In high-tech industries negative reinforcement does not facilitate innovation though, quite on the contrary.

If you want to create more innovation inside your organization – either restructure the whole company into small units or build a growth incubator that reports to the CEO. The position of the head of the incubator must however have one important condition – no consideration of promotion, job done and exit. The reason is simple: Every time the incubator has developed a new business idea into a sizable unit, it will be transferred and headed by one of the senior directors in the core business. The core business soon starts to see the advantage of having a growth incubator, and since the head of the incubator cannot be promoted, collaboration does not constitute a risk to the personal career considerations of senior people in the core organization.

In order to grow efficiently, the incubator is given responsibility to use the 3 tools:

1. Build on own inventions
2. Execute M&A in areas that support in-house ideas/capabilities
3. In-license missing technology or products and/or out-license surplus

In accordance to the above model Jørgen Thorball created 4 new business units over a period of 6 years. A detailed plan was in place, but the order one might suspect from above model was quite random: One unit was initiated by an acquisition, others by a project or an in-license deal.