Visionary in valve design

Portsmouth, NH--You may not know Hans Baumann, but his industrial valve designs have touched your life through lower costs and higher-quality products from petrochemicals to computer chips. His CAMFLEX rotary valves alone replaced some two million globe valves and represent a $2 billion installed base worldwide.

That was a valve he designed for someone else. When he became bored with life as a corporate chief engineer, he set out on his own and never looked back. In a time of downsized hopes, he says with earnestness and a trace of a German accent that America is still the land of opportunity.

"First, think of a problem that needs solving--you have to have a mousetrap," he says. The rest is sixty-hour work weeks and the discipline to avoid spending money on what he calls "nice-to-have stuff."

In Baumann's case, the better mousetrap came in 1977 when he bought an underperforming bronze utility valve line about to be discontinued by a former employer. At the time, he was a consultant, but previously had spent 20 years working for several European and American valve companies. He'd quit the corporate world three years before when, as he puts it, "reason won out over loyalty."

What he got with his purchase of that utility valve was a good design. "All that valve needed was a little attention," he says. The only bidder on the patent, he used his savings to buy it. Concentrating on engineering and on cost accounting equally, he cut the valve's shop-cost ratio from 80 to 35%. Started in April of that year in a rented 2,500 sq. ft. building with four employees, the company turned a profit the following October and hasn't had a losing quarter in 17 years.

Precocious re-engineering. Since his tiny company couldn't compete in large-volume markets in smokestack industries like petroleum and chemicals, it instead focused on what were, at the time, niche markets like bio-processing and semiconductors. Although his timing was fortuitous, it didn't involve luck.

Along with the 50-odd valve-design and manufacturing patents Baumann garnered in his years as a corporate employee, he picked up a lot of business acumen. Long before business-book gurus heralded "re-engineering", he'd seen how large capital costs, non-recurring R&D expenses, and extraneous personnel expenses could drag an enterprise down. "I discovered that the number of marketing managers is inversely proportional to the number of new products developed," he quips.

To this day, H.D. Baumann, Inc. has no marketing managers and no purchasing or personnel departments. Yet, its 38 employees generate some $300,000 each in revenue yearly, twice the national average. The company concentrates on valve design, assembly, testing, and shipping. It buys cast and machined parts from selected vendors to reduce its variable costs and ensure quality.

"The trick was to start fresh," says Baumann. The hardest part was re-training workers who came from conventional business environments to deal with his flat and frugal organization. He acknowledges mistakes over the years with valve designs for markets that didn't materialize, but claims he's never made a hiring mistake.

His own expertise lets him judge a candidate's technical qualifications. Common sense and honesty, key factors in the hiring decision, he judges by intuition during interviews. The ability to work in a team? "They see that there isn't anyone here sitting around with nothing to do," he explains. Job candidates have to like that idea to be considered.

That fresh thinking extends to his business dealings with other companies. "If all the valve manufacturers were like him, half the instrument design engineers would be out of jobs," declares Lee Brewer, a senior design engineer with Fluor Daniel, Inc., Greenville, SC. Too many manufacturers waste engineers' time trying to get them to change their designs to fit the manufacturers' products, he says. Instead, Baumann listens to the engineer and, if possible, adapts his products to the application. If not, he doesn't bid. "He's opinionated," says Brewer, "But that's not bad--you're not going to talk him into a mistake."

Life-long learning. Baumann's advice for engineers eager to set out on their own: Learn as much about business, law, and manufacturing as you can so that you trust your own instincts when making decisions. This frees you from the tyranny of "experts" and allows time for the engineering work you love.

For example, none of the 25 patents and countless contracts he's generated since starting the company has been written by a lawyer. He explains that, unless patent attorneys are familiar with a technology, they don't know what can be done, and thus can't write proper claims. So, Baumann wrote them himself. None has ever been successfully challenged.

Another ingredient for success: staying current with technological changes. Baumann's done this through reading technical journals, teaching, and engineering committee work. He's a Fellow of the ISA and ASME, Chairman of the ASME's Bioprocessing Equipment Committee on Seals, and the author of more than seventy papers and a textbook on instrumentation engineering.

Research also pays dividends. Because of his "excellent" staff and an admitted hatred for managing people, Baumann has structured his business so that 70% of his time is devoted to R&D. His work on critical flow factor and pipe-reducer factors as well as research into acoustical and cavitation noise have led to ISA standards.

Entrepreneurship's rewards to Baumann can be summed up as the chance to do what you want to do. His greatest satisfaction has been in designing things that work and are accepted by his peers.

The company's position as a leader in the specialty valve market was confirmed in a way in February, 1995, when it was acquired by Fisher Controls, Inc., the world's largest maker of control valves. Baumann won't go into the specifics of the deal, but he was made a senior vice president at Fisher and retains the title of President and CEO of H.D. Baumann, Inc. He's clearly not sad about the change and plans to continue working. "I'm too young to retire," he says smiling.