Bioenergy PROFITS Principles: Position Only For Growth, and Codexis

POSITION ONLY FOR GROWTH

So What’s New?  Marketing Your Strategic Direction

Position Only For Growth is the first PROFITS principle.  For our purposes, growth is profitability, expansion, or other ways you may define success in your industry – in this case, bioenergy.  When you Position Only For Growth, any change you make keeps you focused on sustainable profitability.

Think about your company.  Is it time to refocus your direction – or can you better position yourself without making major changes in your strategy?  Many times, a company only needs to make its purpose/mission/vision more clear.  In our continuing series about Codexis Inc., we continue to examine some of the important best practices the company follows as it positions itself more clearly.

Positioning is an ongoing best practice.  It is not something you do once.  As your market and industry evolve, be sure to shift your focus and/or rethink your marketing message and approach to your customers and other stakeholders.  Some of these positioning actions will influence your approach to the market:

Þ   Market to shape our strengths

Þ   Strengthen strategic relationships

Þ   Highlight your competitive advantage

Þ   Speak to the media

Once again, using Codexis as our example, we examine some of their practices as the company goes to market in licensing its technology and providing other avenues for customer growth.

Market to shape your strengths

Many times, bringing new people into the organization, or changing the structure in your existing organization, sends a signal to the market that the company is repositioning.  This helps people pay attention and gather information about company positioning changes.  This year, Codexis refocused major roles to alert the market that Codexis is more than a technology platform with two very different divisions.  The message is that Codexis is integrated with a common platform.

Recently, Codexis reframed the role of its Senior Vice President, Research and Development, Dr. Dave Anton with responsibility for R&D activities for both the company’s bioindustrials and pharmaceuticals businesses. His previous responsibilities included only Codexis Bioindustrials.  Codexis is positioning itself as a strong science company and moving beyond its emphasis in technology.  Since Codexis already has technology credibility, the company is evolving to an applications company.

The company also announced that John Grate, Ph.D., previously Senior Vice President, Technology and Innovation and Chief Technology Officer, became Senior Vice President, Science and Innovation and Chief Science Officer.  Though the changes may appear subtle, they highlight the company’s marketing shift to the importance of science applications, in addition to technology,  in all divisions.

For example, instead of featuring development of new technologies and practical applications, John Grate, also in a new role, has responsibility for creating and leading a productive R&D team addressing the challenge of climate change with next generation biofuels.  Furthermore, Codexis, in its press release stated that Dr. Grate provided outstanding leadership, driving our directed evolution platform beyond the legacy technology and on to commercial scale in the pharmaceuticals industry, and launching our program in biofuels.

It also states that Dr. Grate is advancing biocatalysis technology globally to expand Codexis technology platform through innovation, licensing and acquisition, and creating new markets focused on protecting the environment.

The challenge, emphasizing the focus on climate change with next generation biofuels is more targeted than previously.  Also, by highlighting the advance of biocatalysis technology and expansion of the technology applications and licensing/acquisitions and creating new markets focused on protecting the environment, we can see how Codexis is repositioning the company and its direction for future growth.

As you think about repositioning for growth, mentally make note of your customers.  Which customers are in the best position for future growth?  Do any of these customer companies offer you opportunities in terms of supplier relationships, customers and/or customer relationships?  Think about whether these companies afford you with potential growth opportunities. If these are important relationships, what can you do to foster growth for strengthening your relationship with them?

Strengthen strategic relationships

When companies form strategic relationships, there appear to be opportunities for everyone involved.  Is this true in your case?  Are there companies that you keep your focus on?  What makes them a good, potential strategic partner?  Do they have resources and will they share these resources with you?  Are these potential market driven relationships or product driven relationships?  Do you have relationships with your customer’s customers?  Are there areas of mutual respect?  Do you share important customer information?  What would it take for your partnership to develop further?”

Shell and Codexis are expanding a collaboration that started in November 2007 to investigate the research of new biocatalysts to convert biomass directly into components similar to gasoline and diesel.

Shell also increased its equity stake in Codexis and will take an additional seat on the company’s board.  This new development provides both Shell and Codexis with a better sense of direction and the opportunity to highlight its competitive advantage.

Highlight your competitive advantage

A competitive advantage can be anything you possess and can use as influence. Additionally, stakeholders view this competitive advantage as valuable.. This competitive advantage must be unique to your company.   And as a first adopter, in any area, you may have an edge over your competition.  What is unique about your company, product and services?  How can you position your message with greater clarity and broader market reach?  If nothing comes to mind that provides you with a competitive advantage, you may want to retire your business.  A ‘me too’ company just won’t be good enough.

Codexis prominently highlights its competitive advantage on its website.  It effectively lays out how the technology works and is complete with diagrams. The website also formats the competitive advantage in a readable and clearly displayed list of key features, along with an overall statement of competitive advantage.

Codexis’ website prints that its ‘technology creates significant value for its customers by improving chemical development productivity while reducing cost and environmental impact.  Working with Codexis can yield competitive advantages for partners in several significant ways.’

It goes on to highlight its five key competitive advantages:

• Proprietary and disruptive Technology Platform
• Multiple major target markets
• Partnerships with global industry leaders
• Capital efficient business model
• Diversified and visible revenue base

Communicate who you are to the industry. Highlight areas that you offer that your competition does not.  Emphasize processes that work and are unique.

As long as you are providing the information, the media can be your friend.  They may even be willing to promote you at no fee, if you can be an interesting feature that offers practical advice.

Speak to the media

Take the opportunity to get publicity and get your name out in front of customers and potential customers.  Below is an example of how Codexis CEO, Alan Shaw, spreads the word about Codexis and demonstrates openness and flexibility to attract interested customers and other stakeholders.

Codexis CEO, Alan Shaw speaks to the media and clarifies key points and interests about Codexis.  For example, on August 11, 2009, Reuters published an article about Codexis and the coal market.  It stated…”Coal companies, governments and environmental activists are hoping for breakthrough technologies that will help trap, transport and bury underground carbon dioxide, the main greenhouse gas blamed for global warming.”

Shaw, then let it be known that Codexis is now actively looking for a partner to help the company market an enzyme that helps capture carbon dioxide from smokestacks of coal-fired power plants.  He remarked, “Coal is not going anywhere fast. There’s an urgent need to take carbon dioxide out of coal-fired power stations.”

In a somewhat bold statement, Shaw said the company, which also counts General Electric Co and Pfizer Inc as shareholders, has successfully completed testing its product in the last couple of months and is looking to commercialize the technology.

“We need a partner and are actively talking” to companies, he said, citing a huge interest in the market for such a technology. “The market is meeting us more than halfway.  ….A company like GE could be a great partner,” Shaw said, but he declined to say if Codexis was in talks with the industrial conglomerate.  Shaw said the company plans to aggressively scale-up its plans for the carbon market in 2010.

As you can see, Shaw put the market on notice about what it needed and wanted to be a market leader in this arena.  This is what market leaders do.

In Summary

Today’s topic, Position Only for Growth, is one of the seven Bioenergy PROFITS Principles.  As you Position Only for Growth, market to shape our strengths, strengthen strategic relationships, highlight your competitive advantage and speak to the media, you engage in some of the most powerful best practices.

This series highlights proven principles to running your business more effectively (from the newly released book, Run Your Business like a Fortune 100: 7 Principles for Boosting PROFITS, by Rosalie Lober, Ph.D.) and illustrates best practices and history of the successful company, Codexis.

Codexis develops biocatalysts for the pharmaceutical and biodiesel industries. Its technology produces biofuel from plant material and works with other markets to use its technology to manage CO₂ emissions from coal-fired power plants and to treat wastewater.

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