Gene Situation Analysis and Problem Statement

Situation Analysis and Problem Statement

Private companies are often touted as family type businesses where relationships are close and problems are handled internally without the brash glare of headlines. In some instances these companies strive on their privacy and their ability to make decisions without government oversight. Private companies are often reluctant to go public and will avoid doing so at all costs. However, there may come a time when there is not other choice.

This paper will look at one such company and review the issues that are incumbent in an IPO situation and discuss questions such as the following: How does going public affect the stakeholders? What is the best way to go public with the least amount of fallout? Is going public the right decision at the right time? How can the company executives make this work?

Situation Background (Step 1)

Gene One is a biotechnological company that has led the industry in groundbreaking technology. Their technological approach to abolishing disease in tomatoes and potatoes has eliminated the need for pesticides, thus paving the way for consumers to purchase these items without the worry of ingesting cancer causing chemicals. On target to become an industry leader, Gene One is positioned to go public and the leadership team has been tasked with developing a sound strategy to do so.

Gene One is the brainchild of CEO Don Ruiz and he along with four of his colleagues made the company a reality. Don is the creative force behind the company and has extensive technology and industry expertise. Michelle Houghton is the CFO and one of the founders of the company. She has never been in charge of finances in a large corporation or been involved in an IPO but she has an excellent reputation with those she has done business with. Teri Robertson is another of the original founders of the company. She is the Chief Technology Officer and is related to Don. Teri is known worldwide and her doctoral research led to the genetic breakthrough discovery that upon which Gene One's success is built.

Not all the leadership team is enthusiastic about making the company public. One of the concerns voiced is that taking the company public will destroy the foundation of the company and put less focus on technological advances that will help people and more focus on making money. There also concerns about the timing of the IPO. Apparently, a recent scandal involving another biotechnology company has made potential investors more cautious about investing in the industry.

Issue Identification

Because of its prodigious growth, Gene one has hired thousands of employees over the past two years. Because of this, the Chief Human Resource Officer has not been able to focus on developing talent or creating a culture conducive to growing the business. This can affect their ability to develop new technology and expand their research as well as rend their goal to grow the company by 40% each year. The team also needs to determine how the news the IPO offering will affect their employee base.

Since no one on the leadership team has experience with public offerings, the IPO transformation will be difficult, but not impossible, to do effectively without outside assistance. This can result in missteps regarding financial disclosures and other legal ramifications.

The company will have to develop new marketing and advertising strategies to appeal to the public. Since a recent scandal involving another company, the public trust in the biotechnological industry has waned. Gene One has to find a strategy that will instill trust in the public. Although Gene One has an excellent reputation now, once the company goes public every flaw in the organization will be outlined.

Opportunity Identification

Gene One has the opportunity to develop new talent among the thousands of employees the company currently have. This, in turn, will advance an environment of trust, loyalty and commitment to the organizational goals.

The company also has the opportunity to further the education of its executive staff in dealing with IPO transformation processes. This will also help them build new relationships within the industry and the regulatory agencies as they communicate with those who have expertise in the area of IPO offerings.

Another opportunity that is apparent is the opportunity to receive capital necessary to introduce new products and technologies. Being a publicly traded company will give

Gene One the credibility needed to be a driving force in the industry.

Stakeholder Perspectives/Ethical Dilemmas

The key stake holders are: (1) the employees who must decide if they want to take a chance that the company will be successful if it goes public. They also must weigh their future options with their loyalty to the company, (2) the public who must decide if taking a risk and purchasing stock in this company is a viable option for them. As consumers, they must also determine how important it is to them to be able to purchase vegetables that are chemical free, (3) the executive staff including the founders of the company who must contemplate whether their primary goal is to make money or to advance technology that will have a positive impact on the public at large. As this will affect their decision to stay with the company for the long hall, the executive staff has to decide if it is possible to do both.

Problem Definition (Step 2)

Gene One must develop a strategy for going public that will maintain the focus of the company while broadening and enhancing its employee base and expanding its reputation in the public eye.

End-State Goals (Step 3)

1. Gene One will go public and get the capital needed to develop new technology and enhance product development. The leadership team will become educated regarding IPO transformations by gathering industry data on other companies that have gone