CHAIRMAN AND CEO
Headquarters: Lakeville (other sales, process engineering, and service locations in China, Japan, Germany, Taiwan, and Singapore)
What it does: Manufactures next-generation thermal-processing tools and technology for industries including semiconductor, solar, and carbon-fiber manufacturing
Employees: 437 worldwide; 395 in Lakeville
Revenues: Not disclosed
Solutions: Hire the best people available worldwide and weave
them into the company culture
Patrick Peyton’s solution to the recession sounds counterintuitive: He hired more than 130 people to increase his work force by 50 percent.
The main reason: In late 2009, Peyton says, the world saw a shift in solar cell production to China, and a surge in the demand for solar cells. Manufacturing solar cells requires firing furnaces, which “bake” and cure these cells as a final step in production. Those furnaces also happen to be Despatch Industries’ core product.
“One way we dealt with economic uncertainty was to make hay when the sun was shining,” Peyton says. “As we exposed our products to the marketplace, we were able to maintain number-one market share globally, and we wanted to continue adding to that by capturing as much business as possible.”
That opportunity required Despatch to ramp up head count. Production employees, who accounted for half of the new hires, were quickly added. A few dozen other people were also quickly added and distributed throughout all locations to shore up every aspect of the business.
For the final dozen, Peyton looked for specific skill sets that would enhance the company’s existing talent. “Our strategic goals are to be the technology leader and the market leader globally in our markets,” Peyton says. “And that means we have to be constantly bringing in enhanced skill sets to advance our thermal-
processing technology. That’s especially true during periods of economic uncertainty. If we’re doing well, we can do even better with more highly skilled people.”
Peyton scoured the planet to locate engineers and technologists who were recognized leaders in their respective fields. Finding the people he needed in California, Europe, and Asia was one challenge; perhaps a bigger one was convincing them to pull up stakes and come all the way to Minnesota.
“It’s not so much that it’s tough getting people to Minnesota; the uncertainty of the times makes people leery of uprooting their family and moving anywhere,” Peyton says. “They have to feel confident that they’re coming to a company that has demonstrated market leadership and that has a very long tenure, such as our 109 years.”
The results of Peyton’s hiring initiative speak for themselves. With a second shift in place, production output doubled in 2010. The company finished the year with more than $200 million worth of new orders.
Nearly two years ago, Despatch commanded 65 percent of the world’s market in firing furnaces; today, that market share remains at 65 percent. But those numbers actually reflect significant growth because the market itself has grown dramatically. From 2006 through today, the number of solar cell producers in China rose from 30 to more than 250; about 165 of those companies are Despatch customers. Currently, 85 percent of Despatch’s business is with overseas customers.
“Despatch’s senior management team has done a remarkable job in building a leading global business despite a weak economic climate,” notes Bryan Dow, a cleantech investment banker in the San Francisco office of boutique bank ThinkEquity. “Their ability to identify compelling nascent market opportunities and strategically execute a business plan is unparalleled.”
That nimbleness appears to be a key to Despatch’s current strong position. (That strength may have been a major reason why Fortune 500 firm Illinois Tool Works announced in July that it was acquiring the Minnesota company.) “Despatch has reinvented itself many times over the past hundred years as technology has changed,” Peyton says. “Because we have such low turnover and have been through so many shifts in direction, our long-term employees are not intimidated by change.”