He said that he and a group of fellow scientists were starting a company and he wanted to borrow money against farmland he owned in North Dakota to get it started.
The banker, not convinced that a bunch of former U.S. Steel research scientists had the savvy to run a business, greeted Lee’s request with more than a little skepticism.
“I said, ‘Well, it seems to me that what we are are problem-solvers, and I cannot understand the difference between solving a problem and running a business, and solving a technical problem or a production problem,” says Lee.
Two decades later, Lee and his company are still making those kinds of connections and making them work. His knack for seeing relationships that others might not grasp at first and instilling the same spirit in his employees has contributed mightily to the success of R.J. Lee Group, a 287-employee company that posted a 43 percent growth in sales over the three-year period ending in 2004.
Lee, trained as a theoretical physicist, traces the inspiration for his approach to a scientist he worked with at U.S. Steel. A senior research scientist, the man seemed to make effortless connections between elements and factors that Lee often found unrelated at first.
That skill, says Lee, is every bit as applicable in a business environment as it is in a scientific research setting.
“I was so impressed when I saw him sit down and apply his general kinds of concepts to the next problem that didn’t look anything like the last problem to me,” Lee says. “It’s a process of integration and is, without a doubt, applicable for every manager, certainly in every business, and is a differentiator.”
No obvious connections
R.J. Lee Group could be construed at first blush as an amalgam of unrelated pursuits. A recent project involved analyzing the plaster in the U.S. Supreme Court building for an upcoming restoration. A major crayon manufacturer enlisted R.J. Lee Group to test its product for asbestos content. And, it’s built a wine-testing lab in Washington to service the region’s winemaking industry.
Those all appear at least loosely related, but some other pieces don’t seem to fit as neatly. R.J. Lee is also a products company it creates computer software and has a division that manufactures electron microscopes. It not only performs forensics testing but sells forensics testing supplies.
Lee sees them all as working independently as operating arms of the company but also being there to support other efforts within the organization, each capable of lending specific expertise to the problem at hand. That’s because at its core, R.J. Lee Group is a research company that solves materials analysis problems for its clients.
And it doesn’t stop there. By connecting and reconnecting the dots, new business ideas often spring up, either out of a need to solve an internal problem or out of work done on behalf of clients.
“In some sense, they’re actually independent operations, yet when you have a problem, you can draw on talent, not unlike in a university setting or a research organization at a major company,” Lee says.
“All of the activities are connected,” says Glenn Harmon, R.J. Lee Group vice president. “The connections aren’t obvious at all. And 90 percent of the connection has to do with Rich’s intuition about how this plays into what we do. For instance, we got into software solving an economic problem.”
Out of a need for a better solution for its own data management problems and because it couldn’t find a ready solution, says Harmon, R.J. Lee Group developed its own software. That led to a database management product for the Air Force and a software development arm for R.J. Lee Group.
Says Harmon: “It doesn’t appear to fit, on the surface, with all the other material science things we do, except that its genesis came directly out of them.”
Another venture on the boards is a system for infection control in hospitals, one that came about after the company hired an employee who is familiar with such systems.
“It’s not obvious until you think about it,” Lee says. “Infectious disease control in a hospital, done properly, probably is very similar to running a laboratory. You’ve got means for standard operating procedures, you’ve got means for testing and evaluation. Are you clean, are you communicating things, are you transmitting by your hands, your tie, your coat, are people trained properly? That is probably an exact replica of our core business at the conceptual level.”
With no shortage of ideas floating around and lots of creative people interacting, there are bound to be false starts. The company has scuttled, at least for the moment, a car battery warmer and a new type of shipping container.
“We’ve done a lot of things where we end up saying, ‘Let’s put this up on the shelf and let it incubate for awhile because we can’t figure out how to make it work,’” says Lee.
While commercialization of new ventures that come out of R.J. Lee Group’s research is sparked by the ingenuity of those like Lee who can see new possibilities growing out of it, it’s the core research that feeds the engine of innovation. To support its research function, the company invested $2 million in analytical instrumentation last year.
“The core business is what allows us to do everything else,” says Harmon.
“At some point, if you say we have an intellectual property from which all these things evolve, you have to keep feeding that,” says Dave Crawford, director of R.J. Lee’s technical consulting group. “In my opinion, intellectual property is three or four departments in this building, where we’ve got people and equipment that are just first class, and we’ve got to keep feeding them with better people and better equipment so we can take that intellectual property and apply it to either a proof of concept or a commercialization.”
Room to run
Lee contends that giving his managers and department heads lots of room to run has been instrumental in keeping the creative energy high, even if it isn’t always flowing in the same direction. And while everyone might not be running in the same direction at all times, there is clarity of purpose, Lee says, that guides the entire organization.
“We always kept a pretty highly autonomous management structure in place, so I think that’s been very, very important,” Lee says. “Secondly, our individual department managers function with a great deal of autonomy, mostly to our benefit but certainly not always. There are as many views, if you sit a group of R.J. Lee people down, probably as many views of the organization as there are people, and they’re all pretty strongly held.
“What they all would agree on is that their fundamental mission is taking ideas and turning them into something for problem-solving. They would all agree that we should continuously develop new things, new technology. They just never agree on which technology.”
To break through that barrier, Lee spends a lot of hands-on time in the business, walking the halls and talking to everyone, acting as a catalyst to bring ideas and people together. But the process isn’t designed to simply allow people and ideas to run off in a million unchecked directions without any design or purpose. His purpose, Lee says, is to clear the bottlenecks and help people do their jobs.
“It isn’t just letting people be creative, but it’s helping people focus their creativity,” Harmon says. “It isn’t just that they have ideas and they run around and play with their ideas all the time. The ideas filter up and the direction filters down.”
Says Lee: “What I think makes the difference with people is when you, as a manager or as president or anything else, is when you, on a day-to-day basis, are reaching out, touching them, saying, ‘What are you doing?’ giving them a suggestion or saying, ‘Hey, you know so-and-so down the hall, you two ought to be getting together and doing this.’”
Lee sees ongoing reconfiguration of his company’s organizational structure not as a disruption or distraction but as a way to keep it nimble and ready to respond to both the opportunities that arise out of its own pursuits and the challenges that its clients’ problems pose.
“We keep structuring and restructuring,” says Lee. “We don’t want to lose that ability to turn on a dime.”
HOW TO REACH: R.J. Lee Group, www.rjleegroup.com