Lecture 8: Danaher

Question 1

What’s the secret behind Danaher’s great performance?

Answer 1

Danaher pursues and achieves ‘continuous improvement’

LEAN MANAGEMENT AND TOOLKIT

Question 2

What’s Danaher’s portfolio strategy?

Answer 2

1. Make sure we play in ‘good’ industries
2. Make sure we participate via a company that is already pretty strong
   – But has potential to do even better
3. Make sure we play in areas where we can do ‘roll-ups’ – Having secured a platform to build off

Question 3

How does Danaher add value?

Answer 3

1. Extracting synergies: Platforms plus bolt-ons
2. Extracting superior performance:
   a) Acquisition of companies which can use DBS
   b) DBS itself

Question 4

Why does DBS deliver such great results?

Answer 4

KAIZEN

– Stretch strategy leading to
– Highly aligned actions (execution) leading to
– Continuous improvement (and significant enhancements)

Question 5

Why does DBS really deliver such great results?

Answer 5

1. Availability of tools and support (e.g. DBSO) when you need them
2. High involvement of a knowledgeable, smart and committed corporate team
3. Measurement, visibility, accountability
4. The right people (to make the system work)
5. Culture of open communication, teamwork, asking for help, learning etc.
6. Belief: “you can always improve”, “DBS can get you there”

ENABLING THE ENABLERS
(recruitment and so on)

Question 6

What is the difference between strategy and implementation?

Answer 6

– Strategy is about choices i.e. where there are valid alternative ways of doing things
– Implementation is about executing choices utilizing bestpractice

Question 7

Draw the 7S model of strategy implementation by Mckinsey

Answer 7

1. Structure
2. Strategy
3. Skills
4. Systems
5. Style
6. Staff
7. SHARED VALUES IN THE MIDDLE

Question 8

The implementation conundrum

Answer 8

aligning implementation with the strategy is important

however strategies much evolve as implementation happens and business collects more info

agility is key

strategy testing process needed!

Question 9

What’s the road to strategic renewal

Answer 9

1. Perception
2. Motivation
3. Inspiration
4. Coordination

Question 10

What happens in perception phase?

Answer 10

PERCEPTION

“I don’t see the threat”

• Denial: selective rejection of bad news
• Hubris: pride in past accomplishments
• Set beliefs and rigid mental models
• Misplaced sensors: e.g., paying attention to best customers

Question 11

What happens in motivation phase?

Answer 11

MOTIVATION

“I see the threat but don’t want to respond”

• “Rational” concerns –Loss of valued assets
–Cost / benefit tradeoff –Some cannibalization
• “Irrational” concerns 
–Other cannibalization
• Agency issues
–Cushion from success 
–Subsidies from other
businesses, gov’t. 
–Self-protection of
current managers

Question 12

What happens in inspiration phase?

Answer 12

INSPIRATION

“I want to respond but don’t see how”

• Sometimes, there really is no good response but to harvest the business
• Deer-in-the- headlights syndrome
• Commitment to industry or firm convention
• Function-by-function planning; lack of integrative skills

Question 13

What happens in coordination phase?

Answer 13

COORDINATION

“I see how to respond but can’t get the organization to move”

• Political deadlocks 
–Divergent
interests /
winners & losers 
–Divergent beliefs –Symptom:
infighting
• Interactions among
existing activities 
–Single changes
backfire 
–Systemic
change is hard
to coordinate 
–Bureaucracy kicks back 
• Risk aversion