If you trace the journey of a log from its stump to a piece of fine furniture, you will see a similar process to developing products from concept to profits. You start with some raw materials and a good idea, add lots of effort and capital, a little luck, and out the other end comes something that customers pay handsomely to acquire.

• On the stump – A log on the stump (aka a tree) is worth about $50 to $100 per MBF.* This is like you and your colleague having an idea over a cold drink. It is a good starting point, but is not really worth much yet. It is a long way between this tree (concept) and a nice coffee table (products). If you look at biotherapeutics, over 80% of the cost to develop them is dealing with formulations, clinical trials, regulatory issues, and production engineering.

• Saw logs at the mill – Here the tree has been cut, skidded, sawn to length, and delivered to the mill on the truck. The value is about $500 per MBF, and this increase in value pays the labor, overhead, costs of trees and profit for the logger. At this point you have your innovations patented and the value of your enterprise has increased, albeit not much. If you look at typical royalty rates for patent licenses they are often in the 3-5% range.

• Rough cut boards – Now the wood is starting to be in a useful form, with a commensurate increase in value to around $2 per BF. Your product has progressed to the proof of concept stage, and your concept now works quite well. It is indeed able to do what you had dreamed about months or years earlier.

• Dry, planed and cut lumber – This wood is ready to be turned into useful things. At Home Depot this will set you back about $6 per BF for a red oak board. Your business is now gaining in value as you have a prototype to demonstrate to customers, and they like what they see.

• Finished furniture – This is where the greatest transformation in value happens. From less than $100 in lumber you can create an $800 table. Your product has passed all its tests and is now in the market. Don’t forget, though, that you will still need to get people excited about your new offering so they open their wallets.

So whether you are crafting a fine coffee table or developing the next MRSA diagnostic, you will build value as you progress down the development path. There are few shortcuts, and it takes time and lots of work. But eventually you will transform your raw logs into valuable products and an invaluable business.

* board foot or BF is a standard measure of wood volume equal to a square foot of wood, 1 inch thick [a foot of board], or 144 cubic inches. MBF is 1000 board feet

As we were taxiing down the runway at Denver airport recently, the pilot gently glided the plane over to the side and stopped. A collective sigh was heard as we all anticipated the usual explanations for the delay. The pilot came on to tell us that a series of storms in the Midwest was preventing us from flying directly to Boston, and we have been re-routed to a northern route over Minnesota. Our agenda had been altered from taking the fastest trip to Boston (happy customers, less fuel) to avoiding the nasty storms that would rattle the passengers and shake the plane.

Similarly many companies at the recent conference I attended came in with agendas set on growth and prosperity, only to find storm clouds upsetting their plans. New products from the competition, unexpected customer reactions to their offerings, or ground-breaking developments have all caused companies to reset their agendas.

If we look at agendas, which hopefully you all have, they usually have 2 or 3 main items and fall into a few simple buckets.

• Growth – innovation, M&A
• Costs – do more with less
• Capital – finding $$ to fuel growth
• Risks – gotcha’s and surprises
• People – the right people to move the agenda

That’s about it. Pick your most critical couple areas of focus and get the company lined up behind them. Sounds simple enough, and if asked you can usually say – we are focused on “getting our costs of goods in line,” or “developing our market for IVD’s”

Agendas really have 2 parts to them – first is picking the right one, and the second is knowing when it needs to change. Picking the right one flows from your overarching strategy, and assuming you have a good plan, your agenda should be clear. However, when some storms appear in your path, you need to asses whether your agenda needs to change. Here are few indicators that your direction needs adjustment

• Timelines are being bent beyond reason
• Many of your assumptions are proving inaccurate
• Your people are losing confidence in their ability to meet the goals
• Your sales or costs are trending in the wrong directions

None of these are fatal flaws unless they are ignored. People and companies are extremely malleable, and with good leadership can be steered onto the right route. So when you detect storm clouds on the horizon, be sure to take stock of your agenda. If you can weather the storm, then proceed ahead; but if you expect some unhealthy buffeting, then reset your agenda. Though this should not be a knee-jerk to the challenges you face, it is important to realize when you need to take the longer, yet smoother route to your destination.

It amazes me that the windmills over in Princeton have never stopped turning. Every time I gaze across the Wachusett Reservoir to the ridge in Princeton, the big white blades are lazily spinning. Maybe they do stop once in a while, but I’ve never seen it. Many companies would love this type of business – at all hours of the day the cash keeps rolling in.

This is a conundrum for companies, large and small, that are developing new products. How do you maximize the revenue that can be obtained from the innovative products coming out from behind the curtain? Many look to the windmill model where they first sell a piece of equipment then watch as the revenue rolls in from the consumption of the bits and pieces needed to keep it operating. This works great if the measurements or tests are all the same, the thousands of samples are the same type, and the operator does not need 3 PhD’s.

However, many companies making equipment are relying on the customers to be the experts and develop their own custom methods. This case is more like the windmill manufacturers that sell 3 million dollar windmills to towns like Princeton. A long sales cycle, a big sale, then start a new sales cycle again – kinda lumpy.

To smooth this out, others look to leveraging their technologies to offer a service to their customers. Many companies consider this as an easy add-on to their current businesses. Just look at how many instrument vendors now have service arms (Bruker, Caliper, Beckman, Millipore to name a few)

Another approach to harvesting your innovations is to collaborate to create valuable biological discoveries. This is a riskier approach with longer payback, but has worked for some folks with unique platforms such as BG Medicine and Rules Based Medicine.

A final pathway is to take your research technology and move it downstream to a production environment or a diagnostic facility. Both have much more stringent requirements than the RUO (research use only) world. But once inserted into a process or accepted as a routine test, the revenue flows quite nicely.

So when you are looking to get the most from your innovations, be sure to look beyond just selling a cool new box. Like the windmills in Princeton, consider the various ways to bring your value to the market, and you too may be able to generate energy ($$) day and night.

And this is exactly what new products do as well. They migrate from a concept or idea, fueled by energy and resources ($$) to become successful products in a welcoming market. The parallels are quite fascinating.

• The gathering - Before the trip starts, the dragonflies or birds begin to gather. They have a shared idea of what they want to accomplish. When they have enough members together and the conditions are right, they depart. With new products some time must be spent getting resources together and having the team understand the goals of the project.

• The journey -While travelling, the migrators stick together since they often rely on each other for support and direction. They also pay close attention to the weather since this has a huge effect on when they fly as well as the direction they take. Similarly, since the product development journey takes some time (often more than planned…) the team must closely monitor the market and make corrections if the target opportunity changes.

• Rest stops – Of course few creatures can fly 1000 miles non-stop so they pause along the way. This allows them to re-fuel, rest, and check their progress. As the product moves down the development pipeline, critical checkpoints must make sure things are on track – most importantly, confirming the product will solve the customer’s big problem. Some adjustment of features can occur as the product comes to life so you must be certain it will still hit the target.

• The arrival - After a huge effort, good decisions along the way, and a little luck, the creatures arrive at their promised land full of sun, food, and water. Your product also hopefully comes to the marketplace ready to reap the harvest – customers in great need, lots of them with cash in pocket, and a product that knows no equal.

So like the little dragonfly moving south for the winter, your products can have a successful migration. Be sure to have clear goals, a good team, enough funding and your finger on the pulse of the market. With all this (and a little luck) you will also arrive in the land of plenty.

First, he is not tied to the ways of the past. He did not hone his craft from listening to coaches and the like; he skied how he felt he should, exploring along the way. Second, he is absolutely clear on his bottom line – to ski as fast as humanly possible. By combining these two tenets he has amassed a chest full of medals and reached the pinnacle of his sport.

Though sport analogies are everywhere, I think we can learn from Bode’s approach here and develop some robust strategies. Looking at the first concept, the challenge is to think in new ways, but this is difficult. If you are raising money, nothing will raise eyebrows faster than mentioning a “new business model.” People funding companies are somewhat conservative and want companies and people to follow well worn paths. If you are in a larger organization it is even more challenging. The common approaches have worked in the past and are strongly held on to. The result is little change and stifled innovation.

To break this gridlock on creativity, the bottom line must be the starting point. The first step is to identify the real bottom line which is often not net income or EBITDA. These are, of course, very important metrics, but they are hard to use as barometers when people are deciding what to do in a certain circumstance. What is it you are really trying to accomplish – improve health, identify new markers of disease, or clean the air?

After you have made the bottom line as clear as a bell, then you can unleash your creative juices to determine how to get there. Rather than pull out the “five forces” and “blue ocean” tools, let the creativity take over and craft a new pathway to your goal. Granted some structure is required, but it doesn’t need to have a name. There are lots of techniques and names for making ski turns, but Bode doesn’t necessarily use them.

With the pathway and goals laid out, it is imperative that people are lined up with them. In fact, if they helped define the path – even better. It requires more than mission statements to be sure people understand the goals and how they fit into making this happen. After all, making the plan become reality is often the hardest part.

So simplify the whole process of growing your business and don’t make it an onerous procedure. Think in new ways and have a laser focus on the goals. As Bode has shown us, this simple approach can bring home the gold.

I marveled at the balance of the little grey tree frog that had one toe on a leaf, one on a branch and a third on the window.  He carefully supported himself on these three spots to remain upright while hanging in mid-air.  It reminded me of the dynamics organizations undergo as they grow and evolve.

As companies move to new markets, mature their operations, or simply get more sales, they must maintain a proper balance within their organizations.  On a simple level, the priority of the three main areas – operational efficiency, innovation leadership, and customer relations – have to be weighted appropriately according to the situation in the company.  You need to focus on one area, but maintain an adequate level of involvement the others.  The tree frog would be dangling if only one toe was holding on.

If we look at young life science technology companies, they are usually heavily focused on innovation — being close to customers is not a priority, nor is having streamlined operations.  As the organization grows it needs to shift its balance with more weight towards the other two areas.  Excel spreadsheets are fine when there are 12 customers, but with a hundred, more efficient and formal systems need to be in place.

Another area of shifting balance is when companies move to new markets, with either new or current products.  A common scenario is when the instrument company decides to sell to application-focused customers in areas such as food safety, drug manufacturing, or environmental monitoring.  The companies soon realize that they need to be much more closely aligned to the customer’s world than with their own technology.

If, for example, we look at process analytical technology (PAT) applications in pharmaceuticals, a whole new set of requirements comes into play.  Not only must the instrument perform well, but the supplier must also have proper quality systems and lots of other internal controls on the products.  Without these, they can’t play in the PAT sandbox.  They must shift their balance.

So while the current situation may be just fine, when a company is growing, a keen awareness of balance is needed.  It is important to know whether increased focus on the customer or improved innovation will provide the support for growth.  Like the tree frog with a toe on each surface, having the right balance in the company will keep you upright and growing.