As senior vice president and general counsel of Danaher Corporation, Brian Ellis has the distinct challenge of bringing outside companies under Danaher’s umbrella, but at the same time, letting those businesses run independently. “We have a unique operating model,” he says. “Danaher operates very decentralized. We manage our operating businesses in such a way where they are fairly autonomous, and with the appropriate guidance and counsel, they are the engine that drives Danaher’s success.”
Headquartered in Washington, DC, Danaher is a large global science and technology company, with acquired businesses in the life sciences, diagnostics, dental, water quality, and product identification fields. “We are committed to remaining a diversified science and technology company and growing beyond our twenty operating companies,” Ellis says. “Some companies are driven from the center and have a very strong corporate persuasion. Danaher has strong general management leadership that helps assimilate new operating companies into our culture and helps chart their success, but we leave them a lot of latitude to decide their own directions.”
The Danaher Business System is at the center of the company’s common culture. This system provides a set of tools and processes that enable the operating companies to execute and maintain their competitive advantage. The Danaher Business System and the core values are built on the notion that the best team wins and are the cornerstones of the company’s culture.
“Danaher’s corporate executives are a talented group of experienced general managers and functional leaders. Since the operating leaders are closest to their customers, they understand what decisions would be best for their overall growth and sustainability,” he says. “The operating companies’ directions get approved by corporate Danaher, but the strategies for growth of those individual companies are set and delivered by the operating companies themselves.”
Ellis, who was brought aboard with Danaher in January 2016, arrived with a wealth of experience leading and developing global legal teams and supporting business growth. He graduated from the University of Illinois College of Law in 1991, and before Danaher, he worked at Medtronic Inc., where he was vice president and chief legal counsel of the Restorative Therapies Group. Prior to that, Ellis worked at GE Healthcare, where he was chief compliance officer and general counsel of monitoring solutions and services. While there, Ellis provided legal services to the business units with a focus on global commercial operations, litigation, compliance, employment, and business development.
Now as the general counsel of the entire company, Ellis works with Danaher’s operating leaders and general counsels to manage the legal risks and opportunities that the operating companies face. “I have a sizable staff of capable lawyers—one hundred-plus lawyers—who sit on staff of the operating leaders of those companies,” he explains. “Twelve lawyers are part of our corporate staff in DC. The others are embedded in our operating companies.”
Ellis explains that Danaher also has an incredibly robust process of how it cultivates acquisition targets. “My team supports and works alongside the corporate development team that is structuring, executing, and integrating transactions post-close,” he says. “We have subject-matter experts on the corporate side and a legal team of outside vendors that assist with these transactions.”
Danaher owns large operating companies that make and sell products to other businesses, researchers, and clinicians. In 2014, Danaher generated $19.9 billion in revenue and its market capitalization exceeded $60 billion, according to the company’s website. “Danaher operates across the life sciences, environmental sectors, diagnostics, water quality, space, and dental businesses,” Ellis says. “We’re a complex group of companies; the technologies are far-flung and wide. Their commonality is their strong brand recognition and the fact that they’re well positioned in their market. The Danaher Business System helps accelerate growth and drives sustainability.”
In July 2016, Danaher separated into two independent, publicly traded companies with the spin-off of Fortive, an industrial growth company driving innovation in the areas of field instrumentation, transportation, sensing, product realization, automation and specialty, and franchise distribution. “It was an incredible effort to make the spin-off successful,” Ellis recalls. “We gave the industrial companies within Fortive the ability to make their own decisions and make smart capital allocation decisions to accelerate their growth as an independent public company.”
Ellis says Fortive is doing well on its own as many of the associates in Danaher that were working for Fortive went with the company during the split. “For example, James Lico, who was Danaher’s executive vice president, is now the CEO at Fortive,” he says. “It was the right decision for Danaher’s shareholders, customers, and associates.”