Venture Strategies:

Spinouts

Case Study:  Thermo Electron Corporation

Managing Radical Innovation through Spin-Outs

Coaching Potential CEOs for Venture Companies

To groom potential CEOs for the future spinouts, Thermo introduced a special formal program for training new CEOs and preparing them to deal with Wall Street and media. The two major features of the training are:

1. Contracting Harvard Business Scholl professors as trainers

2. Placing a major emphasis on case studies written for and about Thermo and the experience of its subsidiaries' and spinouts' executives

Thermo is also known for its executive "bench". The company hires bright young MBA graduates and engineers and assigns them to a series of projects as assistants to senior executives. Thus, when a new business emerges new managers are available to step up and lead it. The steady stream of new executive positions makes these prospects very attractive to young talents.

Selection of New Ventures to be Spun Out

To be spun out, each venture is required to pass tests. It should:

1. demonstrate a unique and proprietary product or service

2. project time-to-market of less than three years

3. aim at a large and growing market; and

4. promise 20% annual growth

Building Management Teams for Venture Companies...

Staying Close to the Parent Company...

Support Provided by the Parent Company Spin-outs...

Raising Private Equity Funds for Spinouts...

Fast-Track to Establishing Marketing and Selling Operations...