Danaher, Beckman Coulter, & The DBS Machine

Former Laboratory Automation Sales Manager, Beckman Coulter, Danaher

Why is this interview interesting?

  • How DHER changed Beckman and implemented DBS post-acq
  • Why Beckman’s market share has declined from 90% to 30% in the last decade
  • Why Danaher lost a core coagulation contract with IL
  • Beckman’s challenge without an infectious disease product

Executive Bio

Chris Ramsey

Former Laboratory Automation Sales Manager, Beckman Coulter, Danaher

Chris has a Phd in Biology and spent 10 years at Beckman Coulter, a large subsidiary of Danaher. Chris was hired for his scientific background to improve the technicality of the selling instruments to pathologists. He started in coagulation before moving up to senior management where he managed a region selling automation, biology, and chemistry instruments.Read more

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Interview Transcript

Disclaimer: This interview is for informational purposes only and should not be relied upon as a basis for investment decisions. In Practise is an independent publisher and all opinions expressed by guests are solely their own opinions and do not reflect the opinion of In Practise.

What were your responsibilities when you first joined Beckman?

I joined in November 2007 and they hired me because of my science background. I was at Scripps Research at the time, doing an immunology post-doctoral fellowship and they needed to speak with pathologists but had no PhDs in their sales organization. They had a PhD, Dr Dave Schaffner, who was director of medical affairs but he couldn't be everywhere. Initially, they put me in coagulation and, for the first three and a half years, things were doing very well. We had a partnership with Instrumentation Laboratory who had recently released an amazing system which they were trying to commercialize and build US territories with 25 specialists on board. They knew they would have to move me up after three and a half years years and Dave Vespalco, who was VP of North American sales, approved me becoming one of the scientific affairs officers, which I thought I wanted to do, but I turned it down. I was connected at the scientific level and gave seminars because of my background, but 90% of my time was on the ground sales.

Did you only work in coag or did you move into other sides of the business?

I loved coag because it was definitely complicated, which was just the way I like it. In 2011, Beckman Coulter screwed up by making several changes to the troponin assay without informing the regulatories, and the FDA made them remove that assay from the platform. Troponin is one of the biggest biomarkers for cardiac so that threw everything into a tail spin. At the time, Scott Garrett, the CEO of the company, said we were complacent. They were trying to get through things without going through regulatories and got complacent. We got our hand slapped where we literally had to place competitor systems in our hospitals so they could run that assay, and eventually that business was eroding. That was the same time in 2012 when Danaher acquired Beckman for $6.8 billion.

How would you describe Beckman, pre-acquisition?

Scott Garrett and his people were like a good old boys’ club. He picked his people, everything was closed doors and nothing was transparent. Sales had no idea what was going on at the top or how they were doing things. They were grappling with manufacturing a smaller chemistry analyzer out of China because it was cheaper. All the quality that came from Dr Arnold Beckman and the Coulter franchise, started eroding after he passed away in 1997. If you were part of the good old boys’ club, they protected you and moved you up and so forth. They valued culture and experience and if you were in the field for 27 years, they took care of you. They valued that experience with the customer and kept some of the older folks around knowing they were the ones who had the relationships which is extremely valuable. They were doing the selling and they worked with them, even though they didn't want to do some of the newer computerized things because they were older folks, but it was nice to have that culture and they compensated people well.

When you say eroding, do you mean the culture and that they were hiring people who didn't align with the traditional culture or was market share also eroding?

Market share eroded due to lower quality and Scott Garrett being a bad leader. He was simply trying to hit the mark so he could get his bonuses, and the board of directors kicked him out after the troponin issue. He was one of the top corporate pays in the US.

When Danaher purchased the business, how were you introduced to DBS?

Danaher Business Systems is 120 tools for manufacturing, process improvements, management systems and some sales. This was their biggest acquisition in healthcare, which they had no experience in. They tried to rally everybody to Danaher Business Systems and got a lot of resistance in the first few years. They were introducing us to Kaizen and problem-solving strategies to find the root causes of some of the issues we were having. There was also a set of tools we used for customers to help them with process improvements. They picked certain people to be certified at certain levels with these tools, and I was one who was eager to learn many of these management tools. They had daily, weekly, monthly and quarterly management systems to ensure we were hitting our goals and targets.

What does daily management look like?

Everything was derived from the Toyota lean process and is all about being able to look at a one-page, color-coded chart, and know if you were doing well or poorly. The daily system would be your metrics and it would be green or red, so management could walk by and look at the daily metrics that pertain to their operations and ask questions. They used the 5Y process to figure out why a metric was down that day, which is how Danaher works.

Can we walk through an example of DBS in action, more on the commercial side during the sales process? How was DBS implemented post-acquisition?

Prior to Danaher, sales people and lower management could not solve problems. Danaher involved everybody with their Kaizen concept, which brings key individuals from all parts of the process into a room who collectively solve that problem. Pre-Danaher, we would get a monthly or quarterly report like most companies would, and we found issues and would work on them. Post-Danaher, everybody understood what those issues were and many of us were involved in problem solving.

Post-acquisition, I was promoted to the automation sales management position and was involved in many Kaizens to solve shipping problems, put the right systems in or find missing parts. We would set up a Kaizen event to figure out the root cause, and manufacturing, delivery and sales were involved. We would go through the entire process to figure out where issues arose and how to resolve them. We used Salesforce to look at our funnels in order to forecast better than before. I was part of some problem solving, but if there was a major problem with delivery or manufacturing, we would go through those exercises with the team.

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Danaher, Beckman Coulter, & The DBS Machine(April 4, 2022)

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