A Dynamo Called Danaher

Business Week

I don't think the Danaher story is such a secret to those of us in the Lean world, but Business Week has discovered them, from the article:

Danaher Corp. (DHR ) is not nearly as big, famous, or influential as conglomerates such as General Electric (GE ), Berkshire Hathaway (BRK ), or 3M (MMM ). It owns such a mundane and sprawling portfolio of sleepy, underloved industrial businesses--companies that make dental surgery implements, multimeters, drill chucks, servomotors, and wrenches, just to name a few--that it seems deliberately assembled to be as unsexy as possible.

But despite its low profile, Danaher is probably the best-run conglomerate in America.

BW credits the Danaher Business System:

These conglomerateurs have built their portfolio not by buying undervalued companies and holding them but by imposing on them the "Danaher Business System."

DBS, as it's called, is a set of management tools borrowed liberally from the famed Toyota (TM ) Production System. In essence, it requires every employee, from the janitor to the president, to find ways every day to improve the way work gets done. Such quality-improvement programs and lean manufacturing methods have been de rigueur for manufacturers for years. The difference at Danaher: The company started lean in 1987, one of the earliest U.S. companies to do so, and it has maintained a cultish devotion to making it pay off.

Back at Honeywell, I worked for an excellent Lean manager who had been trained well at Danaher. I learned about the different Danaher brands that we all know, including Craftsman tools. Even in my new healthcare role, I run into Danaher products, but didn't realize it:

Leica Microsystems (DHR ), which makes high-end microscopes for pathology labs.

The BW article is right in the sense that I've never heard of the men behind Danaher, they haven't spoken to the media in over 20 years.

The Washington (D.C.) company is the brainchild of the obsessively private brothers Steven M. and Mitchell P. Rales.

A 1985 Forbes article headlined "Raiders in Short Pants" suggested the Raleses were "callow youths," "more like real estate speculators than industrialists," and "cocky to the point of foolishness." Neither Mitchell nor Steven has spoken to the media since.

Hmm, I wonder why they stay away from the media now?

You can read more at the BW site, it's an interesting story. One tidbit that tells a lot about their corporate culture and the mindset of continuous improvement:

"There are a lot of companies where if you win 10-9, nobody wants to talk about the nine runs [they] just gave up," [CEO] Culp says. "We'll celebrate the win, but we'll talk about 'How did we give up nine runs? Why didn't we score 12?'"

Really good comments from Kevin Meyer over at Evolving Excellence.