Our cash flows have exceeded our net income for the past



Our cash flows have exceeded our net income for the past
Our cash flows have
exceeded our net income
for the past 21 years
Photo: Manoj Patil
It started with a small fishing trip to Danaher creek in Montana by brothers Steven and
Mitchell Rales in the early 1980s. That’s where they decided to start a manufacturing
company that would not compromise on continuous improvement and customer satisfaction.
The aptly named Danaher Corporation is today a global science and technology giant which
owns a portfolio of companies that design, manufacture and market innovative products and
services to professional, medical, industrial and commercial customers. Over the years,
Danaher has grown both organically and inorganically. Organically, by investing heavily in
research and development and strengthening systems and processes, and inorganically, by
acquiring strong performers in attractive markets. Since 1984 Danaher has acquired over
400 companies globally — this makes it one of the world’s largest conglomerates. Some key
acquisitions include industry leaders such as Fluke, Tektronix, Leica Microsystems,
Pantone, X-Rite, Beckman Coulter, Navman Wireless, Genetix, Gendex, Trojan
Technologies and so on. Today, Danaher has presence in 126 countries and over 63,000
associates. In 2012, it clocked a turnover of $18.3 billion from five reporting segments —
test and measurement, environmental, dental, life sciences and diagnostics, and industrial
technologies. Danaher India has 28 operating companies in India with over 1,700 associates
and revenues of more than $2 billion and an annual growth of 30 per cent over the past five
years. The company’s global R&D centre in Bengaluru has filed more than 36 global patents
in the past year. “Where opportunities are concerned, India is a big and attractive market.
We need to expand our existing customer reach to adequately cover tier 3 and tier 4 cities,”
says Danaher India President and CEO Jai Shankar Krishnan. The company is also looking
at social inclusion by providing infrastructure for socially-relevant projects (healthcare and
water), a viable business/financial model that provides access to mass market, and by
contributing to education and research. In an interview to Prerna Raturi, Krishnan talks
about the challenges and opportunities for a science and technology company in India, as
well as how the Indian market is a significant one for the brand.
38 | november 2013
How big a market is India for the
Danaher Group when it comes to
turnover, market share and company
growth? How does the group see the
Indian market?
Danaher is a leading science and
technology company and has been
investing in India for the past 10 years.
We have diversified into five business
segments, with 28 of our companies
operating in India. As a science and
technology innovator, the Indian
market is an exciting place to be.
Our total addressable market is about
$2 billion and we have been growing
at a compounded annual growth rate
(CAGR) of 30 per cent in the past five
years in India.
What’s your business strategy for India
and how does it align with the group’s
global business plans?
Given the diversity of our products, we
touch the lives of our customers across
several sectors. We want to be viewed
as partners with our customers, helping
them advance scientific research and
technology. We have many examples
of this partnership. Prof Shinya
Yamanaka of Japan, who won the
Nobel Prize in Medicine in 2012, relied
on AB SCIEX Mass Spectrometers for
carrying out his research. In India,
too, our technology is being used for
water testing (Hach), forensics and
dope testing (AB SCIEX), and cataract
operations (Leica Microsystems).
Where our business strategy is
concerned, we are No. 1 or 2 in most of
our businesses globally, and that is our
desired market position in India as well.
Tell us a little about Danaher’s India
journey so far — the surprises that
the Indian market threw at you, the
challenges and the opportunities?
Our foray into India was about 15 years
ago, when we set up a manufacturing
facility for Portescap, one of Danaher’s
operating companies, to make
miniature motors in Seepz in Mumbai.
It is an export-oriented facility and has
40 | november 2013
been the largest export earner from
Seepz for the past four years.
Our commercial build-up in India
has picked up speed during the past
decade. We ramped up our India
operations and started incubating many
of our companies into India. We have
been driving our growth organically by
putting in place strong systems and
processes using the Danaher Business
System (DBS). We have also accelerated
growth through local strategic
Danaher recognises the abundant
talent availability in India and we
source talent from India for our India
and global operations. We have a
strong R&D presence in the country;
we employ more than 1,000 people in
India, both direct and indirect, who drive
our global R&D operations. One of our
global R&D centres in Bengaluru
has filed over 36 global patents in the
past year.
The biggest challenge for us has been
in market entry and establishing our
presence as a multinational company
in the country. Incubating and starting
our entity in India was demanding and
time-consuming. Procuring multiple
statutory and regulatory licences
affected the time to market. The other
challenges have been getting quality
partners and the right technical
Where opportunities are concerned,
India is a big and attractive market. We
need to expand our existing customer
reach to adequately cover tier III and
tier IV cities. There is a tremendous
need to improve access to safe water
and quality healthcare. We feel that
with our products in life science and
diagnostics and water technology,
Danaher has an important role to play
in India.
Of your five reporting segments
— tests and measurement,
environmental, dental, life sciences
and diagnostics, and industrial
technologies — which is the most
significant for you in the Indian market
and why?
For us each of these segments is
significant and presents an opportunity.
Life science and diagnostics, currently
our largest segment, offers significant
opportunity for us to grow with the
increasing penetration of high-end
diagnostics labs and hospitals in
smaller towns and cities in India. Things
have become better with the increase in
research in areas such as pharma and
biotechnology. Test and measurement
offers a great potential with the growing
technology industry in India.
We expect our water quality group
to grow with the increase in demand
for clean water. GVR, our petroleum
dispensing business, is witnessing
growth with the rising energy needs of
the country. Our industrial technologies
segment, which covers industrial
coding and motion, is growing with the
increasing levels of sophistication and
automation in Indian industries. Lastly,
our dental platform offers enormous
potential as we offer end-to-end
solutions from equipment to imaging to
consumables for dentists.
Danaher is one of the best examples
when it comes to inorganic growth.
While it has to be a business strategy,
what are some of the challenges that
come in the way when it comes to
acquiring companies?
Danaher has a well-defined process
for doing deals. Globally, we have done
about 90 acquisitions in the past five
years, of which six are in India. One key
learning for us has been the need to get
cultural alignment. Thus, cultivation is
extremely important in India. Also due
to India’s complex legal, regulatory and
financial framework, the timeline for
getting deals done can be lengthy.
Talking about mergers and
acquisitions, what kind of companies
have you been looking to acquire in
India? Do you have a target?
Acquisition, by itself, is not a strategy.
For us, what is most important is to get
Globally, we
have done
about 90
in the past
five years, of
which six are
in India
our products to the end customer. So
what we look for is collaboration, so
that we reach the right market with the
right products. Whether that happens
through joint product development,
channel partnership or through
acquisitions depends on the business
How is the Indian merger and
acquisition sector, in your experience?
India has seen quite a few cross-border
deals, both inbound and outbound.
Talking of outbound deals, Indian
companies are getting bolder and they
are looking to add new markets for
their products and resources to meet
the needs of their growing businesses.
Also, India remains an attractive
destination for global companies, given
the rising disposable income and quick
adoption of technology. However, the
tough tax and regulatory climate pose
a challenge.
What is the funding pattern for your
company when it comes to acquiring
other companies?
Free cash flow is an extremely critical
factor that drives our acquisition
and are part of various industrial bodies.
There is a huge demand for the
benefits of science and technology
reaching the remote parts of India.
What is Danaher doing in this regard?
Can you share some examples?
In India, we are looking at social
inclusion on three fronts. The first is
by providing infrastructure for sociallyrelevant projects (healthcare and
water); second, by providing a viable
business/financial model that gives
access to mass market; and third, by
contributing to education and research.
Talking of examples, our equipment
has been used for conducting more
than a million diagnostic tests in public
and private hospitals, many of which
have been in the smaller cities and
villages across India. We have also
been involved in various academic and
scientific projects targeted at bringing
technology to remote areas.
strategy. For Danaher, the cash flows
have exceeded the net income for the
past 21 years. Thus we have sufficient
cash on hand, which we typically use to
fund acquisitions.
For a company that is growing fast in
the science and technology sector, do
you feel the need to reach out with your
brand to the end-consumer? What are
some the steps you have taken with
regards to marketing and advertising?
There is a significant opportunity for
us to reach out to the end-customer.
However, being a B2B company, we need
to focus on more targeted campaigns
rather than generic ones. Also there is
a need to ensure that we localise our
campaigns and engage with our endcustomers. Through our best-in-class
six centres of excellence, we invite
students, researchers and academicians
to experience our world-class technology
and equipment. We have set up a KOL
(Key Opinion Leader) network which
comprises of top-notch scientists and
researchers who are our advocates in
scientific forums and communities. Also
we regularly take part in trade shows
42 | november 2013
We are No.
1 or 2 in
most of our
and that is
our desired
position in
India as well
Danaher India also has a number of
partnerships with government and
private companies. What kind of
synergies are at work here?
We have partnered on multiple fronts
with both the government and the private
sector. We are working on setting up
guidelines and regulatory framework
on various technical initiatives with
the government. We are also providing
technology for mission critical projects
to both the government and private
sector. Many of our instruments are
also being used in government-related
health schemes by providing high-quality
diagnostics to people.
have taken to DBS very well and we
are using DBS tools quite extensively
to drive growth. Having said that, we
have a culture of continuous learning at
Danaher and we strongly feel the need
to have a constant evolving process of
teaching, training and disseminating
our DBS best practices.
What are some of the challenges in
having the executives understand,
appreciate and encourage such
concepts? How has it been in India?
India has a robust learning culture.
Many people have joined us with a
desire to learn more about the way
we do business, our systems and
our processes. Thus we ensure that
there is a culture of constant learning
at Danaher. We regularly expose all
our associates to DBS tools and best
practices through Kaizen and training
sessions throughout the year.
What kind of a policy does the
Danaher Group have when it comes
to sustainable development and
minimising your own carbon footprint?
Kaizen and lean concepts are about
eliminating waste and sustainability.
We are constantly looking at resource
We are
looking at
and energy
efficiency, as
they are deeply
linked with
our culture
of continuous
conservation and energy efficiency, as
they are deeply linked with our culture
of continuous improvement. Also, our
cutting-edge technologies are focussed
towards improving efficiencies,
eliminating wastages, as well as
removing bottlenecks and improving
systems. Our products support cuttingedge research in food testing, detecting
contaminants, drug discovery, water
conservation and chip development,
which will invariably lead to improved
quality and a more sustainable world.
Are you getting adequate quality talent?
What is your view on talent in India?
Indians excel when it comes to
technology-oriented jobs. We thus
consider India to be a strong source of
talent for us, both locally and globally.
We have hired aggressively from India
and will continue to do so for both our
commercial operations and R&D.
Once at Danaher, we ensure
continuous growth for our associates
through on-the-job training, Kaizen
sessions and a strong mentorship
programmes across all levels. Our
track record of attrition, which has been
in the lower single digit range for the
past five years, speaks for itself.
Danaher Group also spells out
concepts such as Kaizen and lean
manufacturing as crucial to growth.
How has the Indian division imbibed it?
Lean manufacturing and Kaizen
were pioneered by Toyota to improve
productivity on the shop floor. At
Danaher we have imbibed some of the
best concepts and have developed some
tools and best practices that we are now
using to drive growth and leadership,
in addition to factory productivity. We
call these tools the Danaher Business
System (DBS).
The operating companies in India
from Nature.
What is your greatest indulgence?
Nothing in particular.
Are you fond of collecting anything?
Fond memories.
Your kind of books...
The books that I like these days are
mostly on physics and astrophysics.
The latest book I am reading is called
Physics of the Future by Mitchio Kako.
It’s fabulous and talks about how
science will shape our lives until 2100.
The other book that had me really
engrossed is Gödel, Escher, Bach:
An eternal Golden Braid written
by Pulitzer Prize winner Douglas
R Hofstadter.
All kinds of music. No favourites. Any
music that can elevate my mood works.
A day in your life...
A typical morning starts very early with planning for the
day and the week. Outdoor team sports with loads of
fresh air and fresh coffee (not necessarily in the same
sequence) every morning is a given. Day is usually intense
and is interspersed with numerous meetings, business
reviews and discussions. I try my best to ensure a good
blend of internal meetings and external touch points.
Meeting with customers and understanding their needs
is a critical part of my daily/weekly routine. Most days run
into late evenings with conference calls/meetings across
the globe.
the marketplace, doing business deals and transactions,
or in setting goals and expectations for the organisation.
I strongly believe in not only talking the talk, but also
walking the walk. While monetary incentives certainly
motivate good performers, it is the learning experience
that builds team cohesiveness and improves productivity.
Given our strong culture of continuous improvement, we
have numerous programmes that inculcate the spirit
of inclusion, especially in high impact projects. This, I
believe, gives our associates the opportunity to unleash
their creative and entrepreneurial spirit and transition
from being a good to a great performer.
How do you prepare for an important business meeting?
Planning is paramount for any important business
meeting. For me it is structured around two aspects —
deeper understanding of the ‘business context’ so that
I get prepared with relevant content; and the other is
getting to know more about the leaders and stakeholders
I am going to meet.
Five interesting things in your office...
My office is the least interesting place and I am rarely in
my office. It has nothing beyond a lot of papers and
reference books.
The best way to hand out pink slips...
I try to be objective when I have to handout pink slips.
Being straightforward and honest about it helps.
How do you motivate your staff?
I try to motivate my team by ‘leading by example’, be it at
44 | november 2013
How do you like to unwind?
I have allocated time for outdoor sports early morning
during my workdays — at least thrice a week. I play
outdoor sports with my kids during the weekend. I also
like to unwind by listening to music.
Your ultimate holiday destination...
I recently went to the Masai Mara in Kenya and saw the
great migration. It was awe-inspiring. I learnt so much
My kind of car is anything that takes
me from Point A to Point B —
preferably with a driver — especially
in a place like Mumbai.
For me time is most precious. My
ultimate watch is “to watch out for the
moment” and I wear my heart on my
sleeve and wrist.
I am grateful to be able to indulge
in the diversity of cuisine available
in India. And given my international
travel, I get to try different international
cuisine, too. I love them all.
Any CMD or CEO you admire and why?
The CEOs I like (and there are many)
are mostly for their clear vision and
ruthless execution, for their drive and
passion that makes dreams happen,
and their ability to be grounded and
humble. Also I admire many of them
for giving back to the society. I am
a great fan of Danaher’s CEO, H
Lawrence Culp, Jr., who exhibits many
qualities that I admire.
Photo: Manoj Patil
Personal Memo
Hardly watch much cinema.