After more than 50 acquisitions from 2001 to 2006, Danaher Corporation has become a collection of strategic growth platforms. The firm was able to shift from a cyclical industry to one that manufactures scientific and technical apparatus. Danaher acquired five growth platforms and launched operations in seven focused specialist companies.

The Secret Behind Danaher’s Success

The Danaher Business System was and continues to be a keystone of the organization’s expansion strategy (DBS). This system establishes standards for strategic planning, deployment, and execution in accordance with the Kaizen principles of continuous improvement.


A Look Into DBS

Conventional ‘batch-and-queue’ production is substituted in the DBS with a single-piece or one-piece flow Lean strategy that reduces process time, stock, and overhead costs. These Lean concepts were also implemented to transactional operations, allowing the system to be expanded to concentrate on innovation, development, promotion, and sales.

The utilization of innovative strategies, such as faster product development, strategic pricing, and intellectual property management, guaranteed that the problem of accelerated expansion was met with the same Kaizen mindset used to address cost and efficiency issues.

Key Principles that Stimulated Growth

The DBS technique is based on four elements. The focus should be on development, Lean strategy, and leadership when implementing these ideas to existing or new enterprises.

  1. People: Regular skill evaluations are required as part of ordinary business state assessments or customary acquisition to identify employees who may not mesh into the Danaher traditions.
  2. Plan: When acquiring a company, a strategic plan is developed to address the questions of “what game are we playing?” and “how do we win?”. This strategy should encourage managers to recognize areas for growth and develop a common vision for long-term success.
  3. Process: A one-week training program precedes and concludes a one-week Kaizen event for indoctrinating executives into DBS procedures. During this session, managers will learn about Kaizen approaches, including single-piece flow, visual mapping, and benefit tracking.
  4. Performance: Lastly, a policy deployment system is used to help execute and track the plan.

The Results

Since adopting the DBS strategy, Danaher has increased its profit by over 30 percent annually. There has been an 80 percent increase in Danaher’s market value during the 1980s, with exceptionally high free cash flow.

This growth has enabled the corporation to pursue a highly successful model for mergers and acquisitions, which has substantially influenced overall shareholder returns. The total return on Danaher’s shares from 2001 to 2010 was over 150%, thanks to the expansion of Kaizen methodology from the production line and backroom to innovation, marketing, and so on.