Battelle's new CEO is streamlining the Columbus research giant's operations while also expanding its community reach.
A sleeve that can help paraplegics move again. Technology that can determine hair and eye color from DNA. A brace that can heal severely injured limbs. A device that can render enemy drones useless—and a vast number of other projects can all be found inside Battelle's sprawling campus, with practically a section of building for every decade it's been around (nearly nine). Inside its headquarters are twisting corridors of offices, hallways filled with laboratories, a huge model of a molecule, and some classified things in the basement the public doesn't get to see.
Battelle's biggest business is defense contracts, which requires a special kind of talent. That's where Lou Von Thaer comes in. His supporters say his unique skill set is just what Battelle needs as it goes through a difficult restructuring and cost-cutting process, which included a round of layoffs earlier this year—260 employees in central Ohio and 90 more elsewhere around the country, roughly a 10-percent workforce reduction.
A very mature company like Battelle can get lulled into banking on previous success, says Von Thaer, and that is what was happening at the 89-year-old nonprofit research giant as it struggled to compete with other science and technology development companies in recent years. Von Thaer's career was unwittingly training him to be able to help Battelle. The first of his family to go to college, Von Thaer grew up a Midwestern boy in Kansas who loved math and science, who was fascinated by taking things apart and putting them back together again, and who knew no engineers. But, after obtaining degrees in electrical engineering, Von Thaer began his career at Bell Laboratories, where he says he was given an opportunity to work with Nobel laureates and was surrounded by “very smart people.”
Then once Bell Laboratories was purchased by General Dynamics, Von Thaer says his business education began. “General Dynamics was strong at [business],” he says. “I learned how to do mergers and acquisitions, create and build companies—and that was fun to really create value and find new ways to compete in market spaces.” After this introduction into an administrative role, Von Thaer hasn't really looked back. And he's good at the business side—Battelle is not the first company Von Thaer has used his unique talents to turn around. In fact, he's known for this ability.
Ron Townsend, Battelle's executive vice president of global laboratory operations, recognizes Von Thaer's unique value to the organization. “We are fundamentally a research and development organization that engages a lot of scientific and technological activities,” Townsend says. “But we're also a business, and we have to operate in a highly competitive environment in order to succeed. What the board, and what I see, in Lou is exactly the right balance of scientific and technical background complemented by extraordinary, proven business experience.”
When Von Thaer was approached to join Battelle, he hadn't been hearing much about the company in recent years. He was the CEO of a company in Washington called DynCorp International—another innovative government solutions provider. “I was approached by a couple of our board members that I've known for a long time. [They] gave me a call and said, ‘If you get a call [about a potential position], don't hang up,' ” he says.
“As I was talking to people more, I thought, I've got about 10 years left to do this on a full-time basis and this would be a really great way to finish my career if the board is willing to put up with me that long, and hopefully do something meaningful here to expand our mission, make sure we stay impactful.”
The Battelle board had been addressing the need for changes before Von Thaer was hired, but once he came on board, he expedited the process.
“The couple years prior to Lou's arrival, we had been engaged in making comparable kinds of changes. We didn't just recognize when Lou walked in the door that we needed to make changes,” says Townsend. “What Lou pointed out to us was we hadn't been making changes fast enough. ... Lou helped us realize that, and then what he did was instilled throughout the entire leadership team that extended into the organization a greater sense of urgency to accelerate those changes.”
Von Thaer is neither callous nor remorseful about the layoffs that occurred under his watch—it's part of business. In Battelle's case, there was no way around the restructuring that took place. Leadership noticed support organizations that were clunky and detrimental to Battelle's growth, so it became more streamlined with fewer layers of managers to go through before making final calls. That way, Von Thaer says, the focus can be directed toward the end customer and on developing Battelle's invaluable engineers and scientists. It has taken time to adjust for employees, some of whom are managing more people than before.
“It's always very difficult, and you always hate to [approach] somebody who is doing good things for you and say, ‘There is no room for you anymore,' ” Von Thaer says. “But I think we did it pretty well. I think we did it with transparency and respect for people, which is very important. So far, I think the feedback has been pretty positive.”
Townsend agrees. “While the changes … were painful in many ways—we lost a lot of really good people, not because of performance, but simply because we needed to restructure to remain competitive—Lou very effectively made that case that we needed to accelerate change to become more effective, more competitive,” he says.
Down the road, Von Thaer's goal is to “get back to where we're creating equity each year instead of using it. We want to reinvest that in expanding our research and development portfolios and expanding our philanthropic giving into the community,” though he can't predict when exactly the changes will start to have huge impacts.
“I've gone through versions of this a number of times. No two are exactly alike,” he says. “While I drove this, this wasn't my plan, it was the leadership's plan. … Our leadership team got together before work each morning for two months, and we spent the first couple hours of the day together looking through every detail and looking through the options of what we had to do, and in the end we developed a plan that we were all aligned on, and we think will make a big difference in the company.” He says that quarterly numbers are beginning to reflect the changes, but that the period of change could last as long as 3-5 years before seeing very big, transformative results. “This will be a while, but we'll make progress on the way,” he says.
“While difficult and painful—making the structural changes are the easy things because you can do those quickly,” says Townsend. “The harder things are changing the culture, changing the mindset to being one of doing extraordinary science and technology while operating in a more disciplined business environment—that represents a culture change that is a balance that's going to take some time to implement. It's effectively about changing the hearts and minds of the way we think and behave [at Battelle].”
Townsend names a few leadership qualities of Von Thaer's that, in addition to his business experience, aid in the challenging job set before him. He describes Von Thaer as a leader who works to build consensus, rather than merely dictating his will to those under him.
“That creates buy-in from a leadership team and actually from the employees to understand why the changes are being made—that's not to say everybody agrees with it and applauds it, but at least there's an understanding of why we are doing what we are doing and what the expected outcome will be,” he says.
“In the end, the CEO doesn't do all that much—just kind of sets the direction,” Von Thaer says. “Everybody else is smarter than you are. Our team has proven that pretty well so far.”
Although Von Thaer has been primarily a businessman for a long time now, he lights up when he talks about all the science and tech work going on at Battelle, saying, “Every nook and cranny you stick your nose in, there's something cool going on.”
He excitedly describes the effort Battelle is making in partnering with local companies to help them innovate. “If you look at what we have actually done today, it ranges from radio frequency technologies that can take over the command signals and stop a drone, to helping a paraplegic actually think thoughts and bypass the part of the spine that's disconnected … and actually drink a cup of coffee again. And everything in between, from helping a beer company build a new tap that helps the right amount of foam come out when it does a pour, to how you keep headlight covers from yellowing over time.” He adds, “Because our core capabilities follow material/life sciences, really deep biology, and knowing how things work at an atomic level—those can apply to a lot of different problems.”
One project particularly intrigues Von Thaer. It's called the National Ecological Observatory Network—NEON for short. Sponsored by the National Science Foundation and operated by Battelle, the goal of NEON is to be an all-encompassing ecological database.
“We have hundreds of people out in field collecting samples,” Von Thaer explains. “They're getting bug bites and sprained ankles and things that we're just not used to seeing as we look at how we operate. … We're making it so that any scientist can get a hold of it and use it for scientific discovery. Eventually, I think we're going to work with the National Science Foundation to potentially tie it into maybe arctic systems and coastal systems, systems with other countries, and build out a potential worldwide database that has consistent data for long periods of time, that we can look at changes in our environment. It's going to be very exciting to see what researchers can come up with out of this data we've been collecting.”
As excited as he is to nerd-out on all the innovation being done in Battelle's many buildings, Von Thaer is also proud to roll out projects for the government. He has been a defense contractor for much of his career.
“It's a fantastic mission,” he says. “We're saving soldiers' lives, we're helping them do their missions better, we're helping them find the bad guys. … I've always joked that, if we made underarm deodorant, we'd definitely be providing a service that the world needs, but I'm not sure it would be as exciting to get up every morning and know that somebody on the other side there is an 18- or 20-year-old who is protecting our country, who's depending on this work.”
Other projects are focused on philanthropy—a word you'll hear Von Thaer say often. Becoming more philanthropic is a central part of the company's vision moving forward. Von Thaer says the way Battelle likes to give is by helping to establish self-sufficient organizations—Battelle for Kids is an example of a past success. An event called the COSI Science Festival is an example of a new endeavor—it will debut next May in partnership with Battelle, which committed $850,000 of funding over three years to the program.
Battelle has a clear focus on encouraging a love of science in children. In addition to the COSI Science Festival, Battelle co-founded with Ohio State University the Metro Early College High School in 2006 and then added a middle school seven years later. Both schools emphasize STEM (science, technology, engineering and math). “Through the Metro schools and some contracts we've won, just in Ohio and Tennessee, we're going to [reach] 89,000 kids for STEM education this year,” Von Thaer says. “We're really about trying to create the next generation of scientists and engineers—and particularly getting that out to kids that might not be exposed to those kinds of skill sets and just help them understand the choices they have in front of them.”
Battelle has another imperative—to connect the community more with the organization that's been on King Avenue for so long, known for being shrouded in secrecy—a by-product of conducting so much top-secret government work.
Some things going on behind Battelle's closed doors, however, must remain mysterious. Von Thaer discusses Battelle's work with trace elements, saying, “If they find eyelashes on a terrorist or something like that, chances are it's coming here to the basement for one of the things we can't talk about.”
“So many people I've met say, ‘Oh, Battelle has been here for years—I have no idea what you do,' ” Von Thaer says. “There's a lot of things we do that we can't talk about, but there's a lot of things we can. Part of what I have been talking to the team about is getting ourselves … a little more focused-in on the community.”
As Battelle gears up to celebrate 90 years of existence in 2019, Von Thaer's ultimate goal for the company is this: “I want to make darn sure we're around 90 years after I am gone and still going strong.”
Chloe Teasley is staff writer.