New Innova Prez Hits Ground Running

The Daily News
December 13, 2007
By Scott Shepard

When Ken Woody started his new job in the past couple of weeks, he already had a backlog of work, which he's more than doubled since then.

Woody is the first president of Innova, a novel business development project spun out of Memphis Bioworks Foundation. Innova's mission is to identify promising ideas and help turn them into viable local businesses, particularly in the fields of biotechnology and logistics. On Woody's first day he had eight candidates; his portfolio since has grown to 18, with about three new, unsolicited proposals showing up each week.

"We intend to engage the entrepreneurial engine," said Steve Bares, president of Bioworks. "There's a great chasm between the researcher and the first round of funding, and we plan to bridge that."

Maturity and foresight

There are probably dozens, and perhaps hundreds, of potential businesses languishing in the file cabinets and labs of Memphis, he said, all of them stopped short for a small group of forces. Research grants typically run out once a concept is proven, but before it has been fully developed into a prototype. Before they lay down the cash, investors want to see the prototype and have the future market defined: thus the chasm.

Innova will get $11.5 million over five years, using the money to fund that gap, along with providing business guidance. Woody is tailor-made for the job, Bares said, bringing an impressive resume from some of the world's largest and most dynamic companies.

"Only someone with business maturity can get this job done," Bares said.

Woody previously was senior vice president of Global Sales for Smith & Nephew Orthopaedics. Further down the resume he was vice president of sales for the DePuy Spine division of Johnson & Johnson, and spent 18 years with General Electric, rising from a sales representative for diagnostic imaging to general manager of sales and marketing for GE Medical Systems. A year ago when he left Smith & Nephew, his reputation in the field meant numerous job offers, but Woody discovered a passion for small business, coaching and advising entrepreneurs.

"I've done the big company thing," Woody said. "You don't get any bigger than General Electric."

He refers to General Electric's legendary former CEO Jack Welch simply as "Jack" and said he believes the same things Welch did to expand GE can be used to turbo-up small-business creation. GE is successful because it takes a long-term view, setting targets and then building a process to reach the goal. That's how Woody was able to achieve 10 percent growth in his division while the rest of the market was just a third of that.

"One of the things that can kill a company is fast, unexpected growth," he said. "You can have a great product but not a process in place to handle the demand."

Boosting backers' confidence

One company he worked with had explosive growth, 72 employees but no comptroller to keep track of the cash flow. It was a disaster waiting to happen before he stepped in. In other cases he's seen brilliant ideas but the business plan was not structured to make it appealing.

"Most venture capitalists look at a proposal as a banker would, looking for ideas that fit their parameters," Woody said. "They won't tell you what's lacking or how to improve it. I will tell them how to change their plan to make it more palatable for the people with the money."

Memphis has an infrastructure in place that already defines the best opportunities: in musculoskeletal medicine, logistics and agriculture. Taking a narrow focus means the typical 24-month cycle for new product development, he said, can be compressed into as little as six months.

"If I leverage what is already here, then I'm not building brick and mortar, which burns your cash and your time," he said. "I'm using the existing brick and mortar in new ways."

FedEx Express, for example, already has a system in place for overnight delivery of biologic products, so an obvious candidate will have a unique product that must be delivered quickly. That company may be lurking the halls of the University of Tennessee Health Science Center, or it may be in another city. Without even promoting Innova, Woody has already received queries from Minnesota, Indiana and Israel; entrepreneurs who think their businesses can thrive best in Memphis, with Innova's money and advice.

The ultimate goal is job creation, Bares said, especially high-tech professional jobs that feed a secondary cycle of job creation. For every funded lab scientist there's an average of seven related jobs, from lab technicians to data entry. They, in turn, use outside vendors, creating more economic activity and jobs at all skill levels.

Bares talked with Woody for three months before convincing him to take the helm of Innova. Bares was attracted to Woody's attitude and his sales background.

"People who are successful in sales have the attitude of, 'How can I get it done?' " Bares said. "Ken also has very strong corporate skills, which he uses going in and out of corporations big and small."

Keeping it real - not political

Innova is funded by MemphisED, a public/private partnership developed by the Memphis Regional Chamber to spur economic development. The basic concept of Innova is not new, but Bares studied variations of it across the United States, learning what to do, and, more important, what not to do.

"The bulk of these are state funded; Indiana has a new fund worth $70 million," Bares said. "One of our great strengths is that we're private, and so we have the entrepreneurial culture. We have the foundation of hundreds of successful people."

Publicly funded programs quickly become politicized, he said. They chase the next Toyota plant with 1,000 jobs, but skip the entrepreneurs who create the innovative, high-value jobs of the future.

Bares also de-coupled Innova from real estate. He found that too many business incubators provide low-rent space, but because they have rooms to fill, there's a tendency to support businesses that will also become tenants.

"Rent becomes the economic driver," Bares said. "Ken's job is to create companies with jobs, and it doesn't matter where they rent space."