John R. MartinPresident
ViraCor-IBT Laboratories
October 9, 2009
ViraCor-IBT Laboratories:Insights & Innovation
Growth: Few things attract us Growth: Few things attract us more more
• New babies• Springtime / Gardens• Growing companies…like many of yours,
and…ViraCor-IBT!
…We love to be around growth; we want to be a part of the miracle of growth!
The Pattern of GrowthThe Pattern of Growth
“Every activity belongs to a pattern. You identify with your pattern or thought. Your patterns leads your life.”
- J.G. Gallimore
Pattern of GrowthPattern of Growth
• The Call• The Fear• The Choice• The Growth (or lack thereof)
The decision to grow always involves a choice between Risk and Comfort
Risk and ComfortRisk and Comfort
• If we’re honest, though, most of us are seekers of comfort• Extreme comfort would be nice…or would it?
University of CA at Berkeley Amoeba Experiment
Challenge and GrowthChallenge and Growth
• There is something about all living creatures, even amoebas, that demands challenge
• We require change, adaptation, and challenge the way we require food and air
• Comfort alone…will kill us
The Pattern of GrowthThe Pattern of Growth
• Both choices—risk and comfort—tend to grow into a habit or pattern
• Each time you decide to take a risk, you become a little more likely to do so the next time
• It’s not that the fear goes away, but you get used to living with fear
• You realize that it doesn’t have the power to destroy you
Walk on Water…Walk on Water…
• At ViraCor-IBT, we have chosen “to walk on water” rather than sit in the boat
• We have chosen a bold pattern of growth that involves choosing risk– Courage alone is not enough, it must be
accompanied by wisdom and discernment – This is not a story about extreme sports; it’s
a story about extreme discipline
AgendaAgenda
• The story of ViraCor-IBT– Overview– The entrepreneurs– The business guy (me)– The growth (ViraCor focus)– The merger
• Insights into Innovation
ViraCor-IBT LaboratoriesViraCor-IBT Laboratories
Leader in molecular diagnostic testing for infectious diseases
Preeminent clinical diagnostics & biomedical research
laboratory specializing in immunology
& allergy assays
Lee’s Summit, MO Lenexa, KS
ViraCor-IBT Laboratories ViraCor-IBT Laboratories OverviewOverview
• Recent merger (June 30, 2009) to form ViraCor-IBT• Both KC area companies founded by entrepreneurs
(ViraCor in 2000; IBT in 1983)• Specialty diagnostics clinical laboratory business• Market niche: Patients with immune-related conditions,
encompassing allergy, immunology and infectious disease• >200 employees• Serve >4,000 physicians, hospitals, commercial
laboratories & biopharmaceutical companies• Impressive financial performance: strong growth in in
revenue and earnings
Founding Entrepreneurs… Founding Entrepreneurs… Science and ServiceScience and Service
Dr. Jack Halsey, IBT Founder
Flip Short, ViraCor Founder
The business guy…what The business guy…what did I see?did I see?
• ROIC…foundation for sustainable competitive advantage
ROIC
Balance Sheet Income Statement
Sales X Operating Income
Sales
Return on Invested Capital
Net Asset (a) Turnover Operating Margin
Net Assets
a) Net Assets = NWC + Net PP&E + Net Other; Net Assets = Invested Capital
“Most managers focus only on margins…and ignore the multiplier (Net Asset Turnover).”
Growth: Know ThyselfGrowth: Know Thyself
• We understand what our company stands for…
We save patient lives by delivering complex tests fast
Growth: Know thy Growth: Know thy CustomerCustomer
• Competitive keys– Science/Quality– Turnaround Time/Service– Ease of Doing Business– Price
• Innovation– Anticipate customer needs– News tests, improved turnaround time, new
services
Growth: Company CultureGrowth: Company Culture
“A company’s culture and a company’s service are two
sides of the same coin.”
- Tony Hsieh, CEO Zappos.com
Growth: Innovation in Speed Growth: Innovation in Speed & Service& Service
• Speed: Jump to the next curve– Not better sameness, but true innovation– Unparalleled test result turnaround time from a
high complexity lab (went from 1 week+ to 1 day)
– Same-day Turnaround Time: 99%, consistently
• Compassionate, personalized service– Expertise in immunocompromised patient
conditions; direct access to scientists– Patient-first culture and supporting systems
Growth: Built-in ScalabilityGrowth: Built-in Scalability
• Leaders – HR executive/culture in place to develop leaders and implement scalable growth
• Integrated Science / Systems / Service technology platform– Strong core systems integrated and enhanced
with application-rich intranet– Scalable for significant future growth and
accommodation of other laboratory workflows
The Merger: Our Strategic The Merger: Our Strategic VisionVision
• Patients have need of it!• Industry landscape is ideal--large commercial labs
have difficulty matching service and specialization• ViraCor-IBT is well positioned among small,
independent labs in molecular diagnostics/ immunology to become the premier specialty lab with scale
Become the Premier Specialty Lab in Immunology and Infectious Disease
AgendaAgenda
• The story of ViraCor-IBT– Overview– The entrepreneurs– The business guy (me)– The growth (ViraCor focus)– The merger
• Insights into Innovation
Insights into InnovationInsights into Innovation
• Looking backward• Looking outward• Looking forward, and…
…I’ll save that for the last slide
Looking Backward - ViraCor Looking Backward - ViraCor Founding PrinciplesFounding Principles
• Patients First
• And, Associates, too
Looking Backward - Remember Looking Backward - Remember who you are…who you are…
• “If we take care of patients, everything else will follow.” – Flip Short
• Remember that we are a team that works together, unselfishly, for our clients
“It is amazing what you can accomplish if you do not care who gets the credit.”
- Harry Truman
Looking OutwardLooking Outward
• Gaining fresh perspective by looking outward– Industry Conferences
– Consultants/Thought Leaders
– Customers/Physicians
– Associate Survey/Feedback
– Scientific Literature/Content
– Domain-specific Content – Management Books
– Leaders in Business/Society
Looking Outward…Looking Outward…
Hedge Hog, Fly Wheel/ Building for Breakthrough,
Culture of Discipline
Pattern of Growth:The Call, The Fear,
The Choice
Leaders: Energy, Edge, Execution, Resilient/See
Around the Corner, Optimistic
Looking Outward…Looking Outward…
- The Art of Innovation- The Art of Execution-The Art of Driving Your Competition Crazy…
- Simple- Unexpected- Credible- Concrete- Emotional- Story
Looking Outward…The Art of Looking Outward…The Art of InnovationInnovation
•Make meaning•Jump to the next curve (not better
sameness)•Don’t worry, be crappy•Churn, baby, churn•Let a hundred flowers blossom•Never ask people (customers) to do
what you wouldn’t do
Looking Forward…Looking Forward…
“Vision without action is merely a dream. Action without vision is just a waste of the time.
Vision with action can change the world.”
- Joel A. Barker
Looking Forward...Change Looking Forward...Change the World!the World!
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ViraCor-IBT Actions (Mission, Associate Attributes, Business Plan)
IBT
Insights into InnovationInsights into Innovation
• Looking backward• Looking outward• Looking forward, and…• Looking inward
Looking inward…Looking inward…
• I close with a quote from my uncle, Oliver Martin, a businessman, written after enduring three years of the Great Depression in 1930’s…
“The past three year’s experiences have convinced me that that there really is a silver lining…
But there’s no use looking for it unless you use an X-ray, because it’s inside us.”
- Oliver Martin March 4, 1934