Ecolab's Doug Baker has already started his next chapter

Becoming chief executive of Ecolab was not a sure thing for Doug Baker.

He was named president and chief operating officer in 2002. But the company let him know that while he was in a position for the top job, it would conduct an outside search.

"So basically, I'm either going to become CEO or I'll be fired," Baker joked, reminiscing about his time at Ecolab. He retired as executive chairman at the company's annual meeting earlier this month.

Baker did get that promotion to CEO in 2004, when he was 45 years old, and readily admits he inherited a good company.

Yet he led a transformation of the company during his 16 years as CEO and the last year and a half as executive chairman — including leading it through a recession and its biggest acquisition.

His retirement will be a working one. Known as a community booster as well as an astute executive, Baker now looks forward to leading in new ways.

Under Baker's tenure, Ecolab experienced tremendous growth. Net income more than tripled, from $310 million to $1.1 billion. Annual revenue grew from $4.18 billion to $12.7 billion. Stock value also grew nearly 600% during that time, well ahead of the S&P 500 Index's return of 430%.

"Our good much outweighed our challenges," Baker said. "But honestly, we needed to get bigger or we were likely going to get bought, eventually."

But first the company had to manage its ways through the great recession and resolve an ownership issue. In 1989 the German chemical company Henkel had purchased a big stake in Ecolab, eventually controlling almost 30% of Ecolab's shares.

So during Baker's first years at the helm of Ecolab, which anchors downtown St. Paul, missteps could have led to it being acquired. Instead, in 2008, Henkel sold its shares in Ecolab.

After Ecolab successfully navigated the recession, it had more leeway to control its future and pursue growth opportunities.

Without Henkel's exit, Baker said, Ecolab would not have been able to pull off a game-changing acquisition several years later.

Major deal transforms Ecolab

In 2011, Ecolab announced a deal to acquire Nalco Holding Co., an Illinois-based industrial water company, for $8.1 billion in cash and debt. The deal increased Ecolab's annual revenue by nearly 75% and added 12,000 employees.

"That was transformational for the company — on a number of levels," Baker said. "But I mean, the real goal is to make yourself better. It's easy to become bigger. It's not as easy to become better. And doing both at the same time is sort of the holy grail."

The Nalco deal not only brought Ecolab into water services in a much broader way, it gave the company additional competencies in technology and data analytics, said Justin Miller, an investment manager at St. Paul-based Mairs & Power who has followed Ecolab for more than a decade.

"I point to that as being that huge pivot point in his tenure," Miller said. "That really kind of launched Ecolab into its current form."

And Baker said he had to become a different type of CEO. He was an operations guy who successfully ran various parts of Ecolab's business before leading the whole corporation, and when he was first CEO, the various businesses reported directly to him.

"You grow as the company grows," Baker said.

He had to think long-term and strategically about where the company could continue to grow and where it had holes to fill.

One of those areas was technology.

"I would say we've worked very hard to go build competence in this area," Baker said. "We spent a lot of money."

The challenge was to take the data and know-how the company had and turn it into advantages for their customers. Now Baker and his successor as CEO, Christophe Beck, often refer to Ecolab as a technology company.

At Ecolab, as with any company, as it grew bigger, the leadership challenge was to stay nimble, which is harder as more layers of management are added.

"I think making change, expecting change as part of the culture is absolutely vital," Baker said. "Because it's a lot healthier."

When U.S. Bancorp CEO Andy Cecere was chief financial officer and then in his first year as chief executive, Baker was on the U.S. Bank board of directors. From 2008-2018, Baker was on the board's audit, governance, risk management and other board committees.

Cecere said Baker was particularly helpful to him during the financial crisis in working through issues such as strategy, financial stability and reputation.

"He was very good at ... getting to the essence of things and cutting through the noise," Cecere said. "As the CFO he was certainly one of my confidants, from a board member standpoint, to help me think through things."

A community leader

Beyond U.S. Bancorp, Baker also was a long-time board member at Target Corp. and actively engaged in the broader community.

Baker and other CEOs with the Minnesota Business Partnership helped the state of Minnesota secure personal protective equipment for health care workers at the outset of the pandemic when the need was greatest.

Baker also was co-chair of the effort to land the 2018 Super Bowl and helped create the economic development group Greater MSP.

Baker recruited Cecere to be a co-chair with him and former HealthPartners CEO Mary Brainerd to build the new Dorothy Day Center, which provides services for homeless people in St. Paul.

"He's a great example of CEOs not just doing a great job running the company, but doing a great job and trying to make the community a better place," Cecere said.

Baker said he has always taken civic responsibilities seriously.

"Companies count on healthy communities and benefit from healthy communities. And, honestly, you really can't have a healthy community without a strong economy, long term. So communities count on healthy businesses," he said. "Neither should take the other for granted."

What's next

Because Baker has been so involved in the local community, there is plenty of interest in what he'll do as he leaves Ecolab and where he'll do it. He's adamant he'll stay in Minnesota.

"I plan to stay active in this community," Baker said. "My passions are going to be around helping broaden ... access to the economy and to sustainability. Those are the two things I'm focused on."

To that end, Baker has taken an equity position in an Excelsior-based company JIT Services, run by Ravi Norman, which helps companies save money and lower their carbon footprint.

He also formed a new partnership, E2SG Partners, with wind- and solar-energy expert Dan Juhl; architect and leader in sustainable development Bill McDonough; and Clay Miller, a partner and co-founder of Minneapolis-based Stone Arch Capital. Baker said that group will focus on investing in technologies that accelerate the green economy.

He also will be watching the progress of Ecolab, celebrating its 100th anniversary in 2023. He became a major shareholder during his career and has a vested interest in its continued success.

"I'm really excited about Ecolab. I'm really excited that Christophe is leading it. He's got a really good team," Baker said. "I think our duty as leaders is to help the organization reach its full potential. And so my hope is that it gets even closer to its full potential over the next 10 years."