A couple days ago I received the annual report from one of my favorite lean-oriented companies, Danaher. Like most companies they are grappling with the economic slowdown… sort of. Sales, income, EPS, cash flow up in 2008. Granted, growth in income is slower than top line growth, but compare that to most companies in the sectors Danaher plays in. 2009, at least early 2009, could be a different story but we'll have to see. With the hit the stock price has taken, perhaps an opportunity? (Full disclosure: I am not a financial advisor, never have been, never want to be, have pretty pathetic performance over the past year, but I do own Danaher stock.)
Danaher buys a lot of companies, and in doing so they generally shed human and physical assets. Is that lean? Perhaps questionable, although some would argue that poorly-performing acquisition targets are often full of poorly-performing people… or is that poorly-performing processes? That's why I call Danaher "lean-oriented"… I'm not really ready to call them truly lean.
But Danaher does have a very robust "Danaher Business System" that guides acquisitions and ongoing activities. The DBS is obviously core to every activity, judging from how often it is referred to in the opening pages of the annual report.
That helps create focus, which coincidentally is the theme of the report and the topic of one particular paragraph I found interesting:
In both good and bad times, the Danaher Business System (DBS) helps us focus on the “critical few” opportunities and challenges fundamental to each of our businesses’ future performance and success. Our operating bias is to focus on a short to-do list, execute relentlessly and completely and then move on, rather than appear to be advancing across a broad front with only modest results. Amid unprecedented economic uncertainty, strategic focus is even more critical and we can ill afford to waste a day on “B or C” priorities. Simply, it is this focus that helped us to deliver our 2008 performance and will be critical as we seek to outperform in 2009 and beyond.
While each of our businesses has unique opportunities and challenges to address, across the company we have several “A” level priorities on which we are focused, including:
- Building and strengthening our business portfolio;
- Maintaining a strong financial position; and
- Developing and retaining the best team.
This aligns with my Tuesday post on the simplicity that haiku can create. Create a short to-do list and execute relentlessly. How many projects and initiatives are you juggling? Where will you be in a year? Part-way on all of them, or a slam-dunk full improvement on a few?