The Danaher Business System Mindset | In Practise

The Danaher Business System Mindset

Former Director at Danaher Corporation

Learning outcomes

  • Why Danaher’s culture is unique
  • A walkthrough of the Danaher Business System (DBS) process to solve problems
  • Why the DBS is a mindset not a methodology
  • Why other companies struggle to adopt a system similar to DBS
  • Why no PowerPoints are allowed at Danaher
  • How Danaher can apply DBS to intangible asset-based companies
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Executive Bio

Bruno Meinhardt

Former Director at Danaher Corporation

Bruno has over 20 years of experience in supply chain and logistics and is the Former Regional Director of Distribution for Europe at Danaher Corporation. He enjoyed over three years immersed in the Danaher Business System (DBS) as Head of Logistics for Leica Biosystems, a Danaher diagnostics operating company, and also as a member of the Transport and Logistics Leadership Team for Europe at Danaher. Bruno applied DBS to consolidate the logistics network in Europe between Leica and other platforms outside of diagnostics. He was also a Problem Solving Process (PSP) trainer who was responsible for training new recruits in how to detect and solve problems in the business. Bruno now runs a plant for MANN+HUMMEL, a global leader in filtration systems.Read more

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Bruno, can you share a short introduction to your experience and role at Danaher?

I was with Danaher for more than three years, particularly working for Leica Biosystems in the cancer diagnostics platform. I was responsible for logistics and distribution, across EMEA, as a regional director. I was also been a member of the global T&L Steering Committee for all OpCos.

You were head of logistics, for Leica, but also involved in a European wide logistics team?

Exactly. When it came to Leica, in those days, Leica had a sales turnover of roughly one billion, with multiple sites, from Australia to China, Singapore and plenty of sites in Europe and the US, as well as Mexico and Canada. My sphere was EMEA.

Take me back to when you first joined Danaher. When you walked into the company, what was the training process like?

The training process was pretty interesting because, normally, all the Danaher companies had some kind of immersion plan. For me, when I arrived, from day one, I was on policy deployment, as we had the idea to transform the company. My task was to bring in the related cost reductions to finance the rest. My training was pretty limited but, for sure, over the time, I needed to do some mandatory courses such as the framework in the DBS, for example, or in the PSP environment.

What really surprised you about the culture at Danaher, when you first joined?

When I joined the company and also later on, what really surprised me was the fact that everything was really related to the Danaher Business System, to the DBS. The DBS is some kind of lean methodology, a bit like the one from Toyota. What really surprised me was that that this company was extremely focused on numbers and all the relevant consequences. Numbers talk. This was pretty new for me.

Why is the culture unique?

In my opinion, it is unique because no matter where anybody is in the company, everybody, whether he is a manager or department leader or even a President of a company, they have to learn the DBS system, or at least the basics and also apply the PSP problem-solving tool, as the language. This is unique. It goes from the strategy down to the policy deployment and down to the daily management, so it’s totally consistent. In my opinion, this is also unique, because what I have seen in other companies, in many industries, people have lots of indicators and matrices to deal with things, but they are not particularly closely related to each other.

Why don’t other companies set up a system similar to DBS if it works so well?

I think they feel the consequences. When you really do it like this and speak very strongly to the philosophy, over time, you also face some trade-offs. For example, when it comes to budgeting, the budgeting rule takes the P&L from last year and deducts 5%. But when you do this multiple times, with each round, things will become much more difficult. The DBS should help you to improve the productivity, but it only brings in the relevant results when you are able to use the people which may lead to a productivity increase, according to your growth. This is why growth is the engine and you need to have both. You need to have the growth approach and the DNA and then later on, you need to have the DBS. This is something that people fear.

Also, over time, as this company culture is really very restricted to numbers, it’s very simple. You don’t make the numbers, you get asked why, you need to undertake a problem-solving process, speak to the action plan and make it happen. Hopefully, you will make it happen, otherwise you will be out pretty quickly. For example, I was in this committee for all the different OpCos. We met twice a year and, in each meeting, I had about 40% of new people on board, because the pressure is super high on the numbers.

So they were pretty relentless on focusing on numbers and if you don’t hit your numbers, then you’re out the door?

When you don’t hit your numbers, you need to run a problem-solving process and find ways to make it happen, otherwise you will be sent, pretty fast, into poor-performance improvement. Normally, when you go into the process of poor-performance improvement, things become very, very difficult. What I have seen so far, people themselves then decide that this kind of company is not a meaningful one for them.

How would you describe that culture? How does it feel to be an employee?

This is a very difficult one because the different companies or the different sites are, more or less, brought together. Yes, each company and each site brings in its own culture. But over the years, and as they become part of a platform or part of a Danaher company, they start to lose this culture, because they have to embrace the DBS culture. The issue is, either you embrace it, or you exit. A lot of people like it and really like to become part of DBS because it is really cool to go for improvements. But the downside is, in the same situation, you need to grow. If you are not able to grow, you have a problem with all the process improvements because then you have a lot of people left over. Then you will need to go for lay-offs.

Does that create a lot of pressure for employees?

Yes, definitely. Every department, every OpCo, every site, every platform is running to around seven different key performance indicators and it is really broken down from the strategy to the policy deployment to the daily management. Everybody sticks to this, every single day. Certainly, one part of the DBS culture is also to make things transparent and to make things ugly. For example, we always said that red is the new green. We put some targets out and if you have reached the targets and you become green in all of them, we skip the targets, go to the next level so that, more or less, everything is red again. This brings a lot of pressure to the people and a lot of folks can’t really deal with this.

But I don’t think it’s so bad because you have constant improvement. It is also very dependent on the site leader or OpCo leader as to how you really deal with these things. They need to explain to the people that red is nothing bad, but it is a chance, an opportunity. Therefore, they really have to embrace the culture because, as they were brought together, they bring in their old culture and, in the old culture, red was something negative.

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The Danaher Business System Mindset

October 23, 2020

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