From Bacon…to Human Organs?

In a shifting economy and corporate world, agility has become a key predictor of success—yet studies show only a fraction of the global workforce is considered highly agile. In this regular column, Michael Distefano, president of the Korn Ferry Institute, and chief operating officer, Asia Pacific, will explore the concept of agility: who has it, who doesn’t and what companies can do to mold it.

“Our bread and butter has always been the bacon, sausage, fresh pork — very much a food-focused operation … We want to signal to the medical-device and science communities that this is an area we’re focused on, that we’re not strictly packers.”

I had to read the above quote from an executive at a new bioscience unit from all places—food giant Smithfield—several times to be sure I wasn’t losing it. What on earth does the world’s largest pork producer have to do with the medical-device and science community? And why does it have a bioscience unit, anyway?

Turns out that Smithfield is looking to diversify its business and begin selling pig organs for transplantation into humans. Take a few seconds to let that sentence sink in. The company, a $14 billion division of China’s WH Group, has been supplying pig parts for medical uses, but it recently joined a tissue-engineering consortium funded by an $80 million grant from the U.S. Department of Defense.ake a few more seconds to let the extraordinary fact that the U.S. DOD is funding research conducted by a China-owned company also sink in.

The fact that Smithfield is the only food company in the consortium, alongside major healthcare companies, is a testament to its enterprise agility, which we define here at Korn Ferry as an organization’s ability to embrace change to deal with constantly shifting business demands. Only a culture that fosters collaboration, flexibility, speed, innovation, and experimentation could identify and capture this kind of opportunity in the face of rapid market changes. Going from producing ham to producing genes isn’t exactly a natural business line extension.

Instituting and executing cultural transformation in response to environmental change, what Korn Ferry calls learning agility, is not new to Smithfield. In 2013, the company sold itself to Shuanghui International for $7.1 billion, which ranks as the second-largest ever buyout of an American company by a Chinese company. A year after the deal’s closing, a press release announcing that Shuanghui was changing its name to WH Group hinted at the kind of strategic changes in store for Smithfield by noting its focus on “creating sustainable value by embracing a visionary management philosophy rooted in continuous innovations, with a long-term and forward-thinking perspective.”

Normally, this would read as little more than corporate jargon. But it actually aligns with a number of characteristics identified by Korn Ferry in superior-performing companies, among them purpose and vision (an organization’s aspirations and core enduring aim); focus and choice (how it strategically organizes and activates its resources to achieve its long-term purpose and vision); capability (its supply and stock of talent with skills needed to meet future business needs); and commitment (the extent to which an organization can provide opportunity and motivate employees to realize its future success). With its move, Smithfield, and by extension WH Group, is trying to signal is that it aspires to be more than a pork producer (“not strictly packagers,” as the company executive put it).  It created a new bioscience division to help achieve this vision, hired people outside of the traditional industry talent pool with the skills needed to executive its vision, and secured funding from the government to illustrate its commitment.

In a Reuters article, Smithfield has disclosed it already had deals in place to supply pig organs to two undisclosed entities and has aspirations to sell directly to researchers and healthcare companies, who currently buy from third parties, in the future. From a financial standpoint, the move could have huge ramifications for Smithfield—the U.S. market for pork byproducts used for medical, pet food, and non-food purposes could be nearly $100 billion alone, without accounting for animal-to-human transplants.

Now that’s a lot of bacon.