Innovative business: Large business category
National Instruments' search for solutions takes it to the top
Austin Business Journal - by Emily Sopensky Special To The Austin Business Journal
From its beginnings 25 years ago to its current state as a corporation with more than 2,500 employees and a presence in over 35 countries, National Instruments Inc. [Nasdaq: NATI] is a one-of-a-kind force of technology and innovation.
The company's whole premise resulted from frustrations co-founder Dr. James Truchard experienced as a researcher in the 1970s. Faced with computers that could not interface with testing equipment, Truchard and two others from the University of Texas' Applied Research Laboratory -- now the J.J. Pickle Research Center -- pooled $13,000 in 1976. They started National Instruments, a company that creates software-based test and measurement tools to easily work on desktop computers.
With products so utilitarian and useful to all types of testing situations, National Instruments' customers cover a broad range of industries. No one industry represents more than 10 percent of the company's revenue, according to John Graff, vice president of marketing. In fact, not one of the 24,000 customers, other than the U.S. government, accounts for more than 1 percent of the company's revenue.
National Instruments is particularly strong in the semiconductor, automotive and telecommunications businesses, as well as chemical, petrochemical and biomedical research industries. Its software is used by Stanford University in human genome research.
"Virtually any fuel cell research is conducted using National Instruments products," Graff says.
"The core innovative products that we provide are supported by a high quality and wide spectrum of services and support," he says -- one reason 80 percent of its revenue comes from existing customers.
The $410 million in total sales National Instruments saw in 2000 represents a 24 percent increase in sales -- a recurrent experience for the company. The company also has never laid off an employee in its history.
A quiet but steady success story, National Instruments' predisposition to innovation can be traced to the care it gives to its customers and the rapport employees share up and down the chain of command.
Led by its president and CEO Truchard, or Dr. "T," employees at the company use his "sneakers" theory of management.
Truchard believes walking around and talking to employees face-to-face is the best way to stay in touch with employee concerns. The company reaps the rewards from cultivating this style of management. Besides a great record of profitability, National Instruments was named among Fortune magazine's 100 Best Companies to Work for in America for two consecutive years.
In 2001, Worth magazine ranked Truchard among the best CEOs in America -- for the third time. Based on a survey of the 200 top Wall Street analysts, the magazine noted that under Truchard's leadership, National Instruments' stock value has grown while the company continues to introduce innovative products using standard computer technologies and the Internet.
Creatively leveraging the Internet, National Instrument's Web site provides a range of services. From an online store where each one of the company's 950 products can be purchased and customer support initiated to online post-sales technical support, its Web site proves practical and useful.
National Instruments was recently recognized as one of the top 10 best Web support sites in 2001 by the Association of Support Professionals. More than 1,000 technical support managers and professionals from personal computer software, hardware and outsourcing firms rate the Web sites. Then there are Web seminars, or Webinars, a new tool that lets customers and prospects hear National Instrument news in real time.
"It's easy to do what everyone else is doing, but innovation is a core value here," Graff says. "These come from our founder, who constantly focuses on innovation and differentiating from the competition."
National Instruments boasts that its top competitors are also some of its best customers.
"We spend a lot of effort in educating the customers in the market about our innovative technologies," Graff says. "Through seminars, webinars, users' symposiums and in meetings with editors around the world, we are constantly communicating that vision to the market."
Probably the most innovative and longest lasting effort at National Instruments is the nature of its relationship with the University of Texas. National Instruments employs many of its engineers straight out of college. In fact, the company's personnel infrastructure is built around working with new talent. With an internship program that recruits many of the best and brightest engineering students, the company supplies mentors for each one of the 100 or so interns it hires each year.
"National Instrument is a very unusual company," says Ben Streetman, dean of UT's engineering school. "It is built almost entirely from fresh graduates." He says the company is set on a course to grow at a rate allowing starting employees to move into management jobs when they are ready.
It is an unusual company because of the family feel it has. "Employees gain a sense of working their way up and a sense of ownership," Streeman says.
In 2000, the University of Texas awarded National Instruments with its corporate service award because of the company's total involvement in technology and learning. Established in 1966, the award is given to any company in the world that shows consistent involvement of its executives with the university's programs and students. More than 400 companies were considered for the award in 2000.
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