C-level executives have a lot on their plates, ranging from personnel to finances. In the photonics realm there can be even more to think about—cutting-edge technologies, innovation, and keeping up with a constantly changing and evolving industry.
The Lasers & Photonics Marketplace Seminar in January featured talks and information from and for all levels of executives and decisionmakers but rounded out the day with a panel discussion, moderated by John Dexheimer, president of LightWave Advisors, a firm that provides executive and board of director assistance to emerging, growing, and established companies in advanced technology-driven products and services.
The panel of leaders of small- and medium-sized enterprise firms in photonics included Debbie Gustafson, CEO of Energetiq Technology; Jennifer Cable, president of Thorlabs; Seppo Orsila, CEO of Modulight Corp.; and Wilhelm Kaenders, Ph.D., CEO of Toptica Photonics.
“There’s a lot of interest in what kinds of strategic directions and advice leaders can give to small companies in this sector,” Dexheimer says, adding that all of the panelists “have gone from bootstrapped origins into sizable companies and players within specific areas of the sector, and are leaders within their sectors.” And company values are central to their success.
Maintaining corporate culture
“At Toptica, culture is the key for success,” Kaenders says. “It's the glue that keeps us internally together, but also what we want to radiate externally.”
He notes employees and others associated with the company are “inspired by the Toptica spirit,” finding the drive to develop their own products. “They’re contributing by following the Toptica model we have in Germany of having researchers in the sales process, in the development process, and very close to the customer. This is the key for us.”
When Thorlabs moved into the optics realm, from machine parts, with the acquisition of optics manufacturer Nova Phase Inc. in the late 1990s, vertical integration became part of the company culture’s evolution, as has supporting employees’ innovative ideas.
“We allow a lot of independence and freedom for decision-making leaders throughout Thorlabs’ various companies and locations,” Cable says. “I think that really allows them to feel empowered and to feel like they're part of setting the strategic direction of the company. And it also lightens the management burden of overseeing these teams. So, for us, having seasoned leaders as part of that allows those sites to operate fairly autonomously, while also having the benefit of being part of our larger corporate organization.”
For Gustafson, who has gone from small companies acquired by large companies (all of which were U.S. based), her experience with corporate culture was a bit different. When Energetiq was acquired several years ago by Hamamatsu, a Japanese company that Gustafson calls “a great match, technically,” thanks to the companies’ complementary products, she chose a different type of process in regard to company culture, communication, and management. It prompted Energetiq to take a close look at their “integration and acceptance of people.”
Energetiq was in operation for about 12 years before it was acquired. While it can be relatively easy to sell a company when it’s newer, it can still be accompanied by challenges. “When you've created your own culture, and you have a board of investors, you have two sides of the puzzle you have to deal with,” explains Gustafson. “One is the fiduciary responsibility to your shareholders, and the other is ensuring you support your employees.”
But Hamamatsu did a really great thing with the acquisition. “They sent somebody to Energetiq for a year, not to manage us, but to watch to see what we were all about,” she adds. “And for the past five years now, my job is to make sure we keep Energetiq’s culture very creative and innovative, as well as taking the positive things of Hamamatsu. And that's why it's been successful.”
Modulight has “gone through a number of evolutions,” says Orsila, noting the company’s decision to go public. “When we decided that, we wondered: ‘How can we take it to the next level?’”
They also didn’t want to give up the spirit of the company because it’s fundamentally what creates value or doesn't. “We’re a very small company, still less than 100 people,” he adds. “And I believe we can keep doing things the way we've been doing in the past, and also in the foreseeable years.”
Financial risks
Hamamatsu takes calculated risks on some things, while in other ways “it’s pretty conservative,” Gustafson says. “As a startup company focused on keeping a culture of innovation, you need to take risks. As CEO, I'm always encouraging risk so we can invent the next cool product or new market. I build risk into the company and we're profitable enough to continue it.”
Taking risks can also aid employee retention, Gustafson notes, citing Energetiq’s Innovation Days, during which employees are able to look at different things, go spend some money, have fun, and try to find something new. “It's a little bit of a calculated risk,” she says.
Risks, and the amount of them a company engages in, must be “proportional to what the company can carry,” according to Kaenders. “If the company is larger, you can take on bigger projects. At Toptica, with increased size, we have different challenges. But with risks, a company must also consider protecting what it has.”
Cable agrees. For Thorlabs, “the bets are smaller proportional to our size.” She says it has been counterbalanced by the company’s willingness and ability to take risks, as it’s a privately held organization without outside investments. “This has really limited the size of the risks that we can take. We’ve taken some, and it’s healthy to do this, but it needs to be balanced with reinvesting within our core business.”
Modulight takes risks based partly on product development. Orsila says his company implemented a strategy several years ago, in which they pick up projects where customers can pay a good margin. “To me, is essentially a risk management thing,” he points out.
Orsila explains that if his company can afford the price, it could mean it’s not just Modulight and the customer who believe in the project—there could likely be a big company finance department or venture capital firm that would back it. “It’s less likely to be a failure,” he says, “because it’s been vetted through other viewpoints.”
Gustafson, citing smaller companies, believes financial risks are worthwhile, as long as “you’re always watching the money.”
“It depends on how much cash you have in the bank,” she notes. “We took risks—some successful, some not. As small companies, we need to evolve all the time. We have to always be evolving.”
