The Bloomington company hopes its engineers' creativity will power it through uncertain times.
While President Obama was delivering a speech Tuesday about economic glimmers of hope, engineers at Donaldson Co. in Bloomington were gathering for an innovation awards ceremony, replete with a buffet line featuring chicken breasts and asparagus spears.
After they took their places at dining tables, Deb Wilfong, Donaldson's chief technology officer, called off the names of Donaldson employees who'd received patents in recent months.
Once they stood and received a round of applause, Wilfong took them on a walk down memory lane.
She asked the engineers to remember what life was like in the early 1980s, the time of the last severe recession. Disco music had just died, Americans were playing Pac-Man video games and Ronald Reagan was in the White House, Wilfong reminded the audience of about 85.
At Donaldson, she said, "We were inventing." Donaldson was filing patents for disk drive filters that could be used in personal computers, more advanced versions of which Donaldson still sells today.
The current recession hit Donaldson "quickly and hard" over the winter -- sales fell 10 percent in its most recent quarter -- but CEO Bill Cook said that creating new products and applying new uses for Donaldson's patented technologies will propel Donaldson through tough economic times.
"Innovation has always been part of the company," Cook said in an interview. "It is one of the things that we have control over, despite a difficult economic environment. Innovation is finding ways to leverage our technology to our customers' benefit."
Donaldson, which generated $2.2 billion in annual sales for the fiscal year that ended in July, makes filtration systems and replacement parts for industrial facilities and mobile equipment that ranges from big trucks to military tanks.
Donaldson estimates that its sales will decline by 11 to 16 percent for the fiscal year that will end in July. It has cut 1,850 positions, or 14 percent of its workforce, and the company continues to look for ways to reduce operating costs.
But it is loath to sacrifice investments in research and development. Wilfong called the experimentation that leads to new products the "lifeblood" of the company. As he pulls Donaldson through the recession, Cook wants employees to focus on "things that we can control, advances in technology, advances in manufacturing processes."
Tractor part or centerpiece
At last week's awards luncheon, engineers accepted trophies for breakthrough processes and products that will contribute to the company's financial success. They ate at tables with round and blue Donaldson PowerCore filters as centerpieces. Plates of dessert bars sat atop the utilitarian filters, which Cook said are used in everything from farm tractors to construction equipment.
In a Tuesday interview, Cook said that it's still too early to determine whether the economy is beginning to recover.
"I had a customer say to me not that long ago that it's sort of like driving in a fog right now," Cook said. "It's very difficult to get any sense of what is around us or what's in front of us."
He added that "the tone among the president [of the United States] and economic experts has turned more positive," and he's encouraged that the stock market has improved.
But Cook said that he's focused on managing costs and perpetuating a company culture that has produced product innovations over more than nine decades.
The luncheon, he said, serves to "recognize the [innovation] contributors and then reinforce that this is exactly the type of thing that we need to continue to do."
He presented a posthumous award to the family of an engineer who developed the Torit PowerCore dust collector system that's now used in industrial settings. The product innovation offers improved performance over earlier products and is much smaller than older dust collection systems.
Still more to discover
Debasish Mallick, a University of St. Thomas decision sciences professor, said that companies that want to maximize innovation within their workforces must strike a "very, very delicate balance between creativity and discipline." They must create the climate that supports experimentation, but they need the discipline to regulate prototype testing and determine which products to take to the marketplace, he said.
"Any knowledge that is created today will be available to your competitors in a matter of time," Mallick said.
Gary Rocklitz, director of computer-aided engineering at Donaldson, won a Frank A. Donaldson Award, which was named for the company's founder. He told his peers that when he joined the company about 35 years ago the filtration product business was a "mature industry." But Rocklitz said that today he envisions unlimited product possibilities for Donaldson. "We're still not a technologically mature company," Rocklitz said.
Liz Fedor • 612-673-7709