Dow AgroSciences and Health Care & Life Sciences and Life Science & Biotech and Manufacturing & Technology

Exiting AgroSciences chief shook up strategy, culture

August 29, 2009

One of Indianapolis’ business dynamos is being promoted to a job in Philadelphia. But let’s not let him slip out of town without gleaning a bit of his wisdom.

Jerome Peribere helped lead Dow AgroSciences into a golden era. Since he took the helm in early 2004, sales for the maker of pesticides and other agricultural chemicals have swelled 50 percent, to $4.5 billion. Better yet, earnings before interest and taxes have shot up 72 percent, to $761 million.

And that doesn’t tell the whole story. Under Peribere, the company has evolved from an average-performing maker of low-margin chemicals into a thriving, seed-biotechnology powerhouse. The seed business isn’t even profitable yet. But analysts are so bullish on its potential that when parent company Dow Chemical floated the idea of selling AgroSciences earlier this year, analysts speculated it might fetch $12 billion.

Peribere


Performance like that doesn’t occur by happenstance, of course. It takes strong leadership.

Enter Peribere, who had been working his way up Dow Chemical’s ranks since joining the company as a specialty-chemicals sales rep in France in 1977. He began overhauling AgroSciences after becoming executive vice president in 2002, a quest he continued after vying successfully for the CEO’s job two years later.

Back then, Peribere recalled, “There was pressure to launch one active ingredient per year, and R&D was feeling compelled to launch whatever was possible, regardless of whether it was a breakthrough solution, or whether it was a me-too product.”

Peribere shifted the company’s focus toward what he calls “revolutionary solutions,” and he got managers thinking about what they wanted the company to look like in 10 years.

“I added a longer-term perspective to what was essentially a fairly short-term perspective,” Peribere said. “This is when we decided to be a big dog in seed biotechnology.”

Rather than casting aside the bread-and-butter agricultural chemicals business, he focused on sharpening its performance. That allowed Dow AgroSciences to continue to increase profit at the same time it was ratcheting up investments in research.

Thanks to acquisitions and internal growth, seed biotechnology now accounts for 17 percent of sales—up from 5 percent just two years ago. And some of the most promising seed products haven’t even reached market yet.

Perhaps the biggest blockbuster could be SmartStax, a biotech corn variety the company is rolling out in partnership with St. Louis-based Monsanto. It contains eight genetically engineered traits, four from each company and the most ever contained in one seed.

The companies say the product offers greater protection against below- and above-ground insects, as well as weed killers. It also allows farmers to plant a smaller “refuge”—land planted with conventional corn to help prevent pests from developing resistance.

“This is huge proof of the strength of our technology,” Peribere said, noting that Monsanto wouldn’t cut such a deal unless it believed AgroSciences was coming to the table with something valuable.

Changing the mindset

But what’s happened at AgroSciences under Peribere wasn’t just about strategy. It also was about changing culture.

For starters, he said, he built a united management team—one that agreed on strategy, was committed to implementing it, and was accountable for both the successes and failures.

“It seems obvious,” Peribere said. “But how many times have you seen a management team that is not united? How many times have you seen a management team member with a personal agenda?”

From there, Peribere said, the challenge was to try to create a startup mentality in a large company—in AgroSciences’ case, one with 5,400 workers. He admits it’s hard to motivate employees and make them feel indispensable when they walk into a headquarters building housing hundreds of employees.

But treating employees like adults, Peribere said, can work wonders. He said too many executives treat them like children, and don’t level with them about how the business is really doing, or how their job responsibilities fit into the big picture.

“If you explain this kind of thing to your employees,” he said, “they work really hard.”

Such principles carry over to any business, which helps explain why Peribere is leaving town. Dow Chemical CEO Andrew Liveris has promoted him to run the company’s Philadelphia-based advanced materials business. The unit includes Rohm & Haas, which Dow bought this spring for $15 billion.

In a conference call with analysts, Liveris called Peribere “the architect of the highly successful strategy at Dow AgroSciences that has enabled it to evolve into a higher-margin, higher-growth business.”

Higher margins and faster growth. Not a bad Indianapolis legacy for the 55-year-old Peribere.•

 

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