Leading the Transformatiion

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EASTMAN Leading the Transformation The
International Association of Institutional
Venturing and Intrapreneurship (IAIVI),
Boston July 25-26, 2002
Brenda M. Barnicki Director, Services Business
Development Eastman Chemical Company
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Agenda
EASTMAN

• Who are we?

• Why are we changing?
• What are we doing?
• What are our results?
• What have we learned?

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Eastman Chemical Company

• Headquartered in Kingsport, Tennessee
• Spin-off from Kodak in 1994
• 2001 Sales Revenues of 5.4 Billion
• Businesses
• Coatings, Adhesives, Specialty
• Polymers Inks
• Specialty Plastics
• Performance Chemicals and Intermediates
• Voridian Polymers and Fibers

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Eastman Geographic Expansion
1Banbury, UK
Tianjin, China
Bury, UK
Shandong, China
Funing, China
Jiangsu, China
Batesville, AR
Eastman Division Sites Shared Sites w
Voridian Genencor Joint Venture (Eastman Division)
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Agenda

EASTMAN

• Who are we?

• Why are we changing?

• What are we doing?
• What are our results?
• What have we learned?

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It is not the strongest of the species that
survives, not the most intelligent, but the one
most responsive to change
Charles Darwin
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What Investors See
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What Investors Do !Stock Price ComparisonLast 5
Years
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Agenda
EASTMAN

• Who are we?
• Why are we changing?

• What are we doing?

• What have we learned?
• What are our results?

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Organization
New Business Development
Eastman Ventures
Technology Licensing
Digital Business
Services
Asia Pacific
Europe, Middle East and Africa
Latin America
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NBD PORTFOLIO
I. Ideas
V. Business
II. Concept Development
III. Experiment
IV. Venture
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Agenda
EASTMAN

• Who are we?
• Why are we changing?
• What are we doing?

• What are our results?

• What have we learned?

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Agenda
EASTMAN

• Who are we?
• Why are we changing?
• What are we doing?
• What are our results?

• What have we learned?

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Key Learnings

• Quantity and Quality of Ideas
• Get outside the corporate walls!
• Lots of good ideas yield a few viable businesses
• Established gate criteria important
• Speed through pipeline to experiments
• Ability to morph and grow

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Key Learnings

• Validation
• Validate with customers early and often
• External review early
• Realistic financial projection

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Key Learnings

• Big Company vs. Entrepreneurial
• The corporate advantage intellectual property,
  brand,
• customers, people, competencies, and capital
• The corporate disadvantage liability, threat to
  existing
• businesses, established processes and norms
• Speed

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Key Learnings

• People
• Right skills and attributes at the right stage of
  business
• Business building skills vs. parent company
  skills
• High energy and passion of a startup but patience
  and
• process orientation to negotiate corporate
  environment
• Partner selection

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Challenges Open Issues

• People
• Continuous flow of top talent
• Comp packages corporate policy versus market
  reality
• Big Company vs. Entrepreneurial
• Agility needed for a startup while satisfying
  corporate
• requirements
• Corporate antibodies
• Portfolio
• Balance autonomy of individual businesses while
  capturing synergies

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Summary We are leading the transformation

• From
• A company with a chemical industry P/E
• Mature, capital intensive, product centric,
  cyclical manufacturer of chemicals

• To
• An innovative company with a growth P/E
• A company that gets paid for what we know not
  just what we make
• A company recognized as a technology company

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Questions
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