Edmund O. Schweitzer III founded Schweitzer Engineering Laboratories in 1984, and essentially from the beginning, the company has been growing rapidly. 

The 31-year-old, Pullman-based enterprise designs, manufactures, and supports products and services for power-system protection, monitoring, control, automation, and metering and has built a campus of its own in the small college town on the rolling Palouse. 

Schweitzer sat down with the Journal recently to talk about the company’s growth trajectory, innovation, and shattering the project management triangle. 

Journal: The last time one of our reporters went down to Schweitzer, in June of 2014, we met with Luis D’Acosta (chief operating officer at that time who was named CEO last September). At that time, Schweitzer had 3,600 employees worldwide, 2,000 in Pullman and 100 job openings How has that changed in the past year?

Schweitzer: We’re right at 4,000. It’s up about 400, or 10 percent, since we last visited with you. And there are over 200 career opportunities right now. 

J: How much of that activity is in the Inland Northwest? 

Schweitzer: The market growth is around the world, and the employment growth is also around the world. We’re looking for more people in Pullman than anywhere else, but percentagewise, other areas may have higher percentages of growth.

In Lewiston, we’re moving down a few people who live in Lewiston but are working in Pullman. That’s why we started that operation. There were 140 people driving up every day, and we needed more space, so I said, ‘Let’s build in Lewiston so they don’t have to drive.’ It just worked out beautifully. 

J: What about Spokane? You have a satellite office in the Valley as well. 

Schweitzer: The Sullivan Road operation has right around 30. There’s application engineering activity. There’s some business support activity. There’s some contract management. It’s a number of people who wanted to join SEL and either wanted or needed to stay in the Spokane area as opposed to moving to Pullman. It doesn’t always work out, depending on the nature of the work, but the whole idea is, why waste people’s time when you can avoid it? We all spend a lot of time at our jobs. The last thing we need to do is get there tired and go home tired after an hour or hour-and-a-half drive. 

J: Is it more a function of moving individual jobs rather than business units?

Schweitzer: Sometimes, but not always. For example, our SEL Mexico operation is mainly about serving the Mexican market. We didn’t go there to chase cheap labor or something like that. That now has grown to become a good-sized operation, maybe 650 people, and we’re there because we want to be close to our customers. 

In many of our offices around that U.S., we’re there to be close to our customers. But we have been thinking a lot about turning each of those offices into centers of excellence in one area.

J: Now might be a good time to back up and talk about the number of offices you have. 

Schweitzer: Fifty-nine domestic offices—can you imagine that?—and 48 international. That’s changing all the time. We only manufacture in Pullman, Lewiston, San Luis Potosi, Mexico, and Lake Zurich, Illinois. So, that’s lots of offices. Some of them are one-person, two-person, but we try to avoid the home-office thing, because so much of work is collaboration. 

J: What are some things you do in Pullman that cannot be done elsewhere?

Schweitzer: That’s an interesting question. I don’t think there’s anything we do in Pullman that we couldn’t do someplace else. 

J: One of the other things we talked to Luis about was revenues. He didn’t disclose annual revenues, but he said they double every five to six years and that on the trajectory at that time, you were looking at surpassing $1 billion in annual revenues within five years. I just wanted to see if you’re still feel like you are on that path.

Schweitzer: We sure are. We’re doing real well. We’re profitable. We’re efficient. We believe profit fuels growth, and the moral justification for taking a profit is taking some risk in doing business. By taking a risk, I don’t mean doing risky things, but when we put a lot of money into developing a new product or going into a new market, there’s no guarantee it’s going to work. We work hard to succeed, and when we do, we put it back into new areas of business at home and around the world.

J: With that projected growth in revenue, what do you project in employment growth over that time? 

Schweitzer: Well, the employment grows generally in proportion to the revenue. We will see continued, strong revenue and employment growth. We’re going to see a lot of career opportunities.

J: Where do you see that growth occurring? 

Schweitzer: I’m going to answer that two different ways. One is going to be more objective, and one is going to be more subjective. 

I like to think of the three components of the growth vector. One is developing new products for existing markets. Another one is introducing products and services to new markets. The third area is geographic markets.

We’re proceeding in all of those according to a five-year plan. We put a lot of time into looking at that plan and evaluating that plan. We want to follow it but have the flexibility to be opportunistic. 

Then there’s the subjective. I think about the legacy. We work in an industry that moves energy at the speed of light. Nobody else gets to do that. Amazon does a great job. You find a book you want today, you’ll be reading it tomorrow. It’s just amazing. But if you turn the light switch on here, the energy that goes into the light bulbs to illuminate your room is being delivered to your business at the speed of light. You can’t touch that. That’s our legacy. It’s a modern miracle, even though these principles go back 100 years. 

The second one is creativity. Some people will draw a project management triangle, and they’ll talk about the cost of the project, the schedule of the project, and the quality of the work. And they say you can only have two of the three of those. Have you ever seen that?

J: I have. I have. 

Schweitzer: But it’s a myth. It’s a myth. Anyone who really attests to that project management myth lives in a dull, gray, boring world that I don’t want any part of. 

You start to think about before there were cars, there were horses. Well, you could have a faster horse, but you’re going to have to feed that horse more and maybe it wouldn’t work and whatnot. If your world was horses, then maybe there’s truth in that. But the idea is transportation. As the automobile evolved, more people could go more places cheaper and more comfortable than they ever could with horses. That’s the creativity and invention is what busts that project management triangle myth. 

Another way we like to think about that is Alan Kay, I think it was, who stated the best way to predict the future is to invent it. 

The third thing to think about in this subjective way of our growing is constantly looking at simplicity. As Einstein said, everything should be as simple as possible, but no simpler. He also said that if you can’t explain it to a 6-year-old, you don’t understand it yourself. So, we’re always trying to go back to first principles and even reset complexity. In any industry, things start out pretty simple, then people refine it and add features and it gets more and more complicated. Look at your computers today. The numbers of things you can click on are in the hundreds. It’s very complicated. Who’s going to come along and reset that? It’s a very creative act, but it’s based on can we make this simpler? Because when you do, you lower costs and make it more fun to use. 

The fourth area is the performance. Sheer performance. In power-system protection, one of the things I like to worry about is how fast can we trip a circuit breaker when something goes wrong? 

Consider a Bonneville Power transmission line, 500 Kv, and it might be carrying 3,000 megawatts, and that would be like—let me see if I can get it—(pauses) the equivalent energy flow of 500 pounds of coal per second, which would be on the order of maybe 40 gallons of oil per second. When something goes wrong, we can trip the circuit breaker in 20 milliseconds or less, which is the equivalent of 10 pounds of coal or a gallon of oil. That’s all that gets spilled, so to speak. Compare that to a train wreck or an oil-spill leak. You can’t shut off a pipeline in 20 milliseconds. You can’t put a train back on the tracks in 20 milliseconds. Here we do that all the time in electric power. It’s pretty cool. 

In terms of performance, even though we’re doing very well with this, let’s try to do better. Every time we get a millisecond faster in tripping, in clearing faults, that increases the stability level enough to where that transmission line can serve a whole new distribution feeder of energy. That’s impressive. 

On the subjective side, it’s legacy, creativity, simplicity, and performance. On the objective side, it’s the three components or vectors of growth: new products, new market segments, and geographical markets. 

J: When you talked about the objective vehicles of growth, out of all of those components, is there one segment of the market that excites you the most? 

Schweitzer: I’ll give you a couple. I don’t know if I’m allowed to have favorites, but some of the things get me interested. In the area of performance, it’s this idea of time-domain protection. This time next year, we will introduce a new relay that is significantly faster. That’s got me excited. 

Another one is cybersecurity. We’re doing a very good job. We always have. We’ve always taken it seriously, even before anybody was talking about it. We first started making these products in 1984. We didn’t call it cybersecurity then, but we’ve been very, very focused on that. It’s a whole topic for another time, I would say, but it has a lot of interest on my part. 

There are two areas I’m really interested in, but especially that first one. I’ve got this need for speed, if you will. 

J: One thing I don’t have a good feel for with your business is the competitive landscape. Could you characterize where that stands now and how it’s evolved? 

Schweitzer: Sure. We delivered our first products in 1984. At that time in the United States, the first products were protective relays, and the first customer was Ottertail Power Company in Fergus Falls, Minn. At that time, the competitive landscape was Westinghouse and General Electric making electromechanical relays. It would take a protective relay panel the size of the door behind you there (standard-sized office door) full of these electromechanical devices. Very sophisticated, but also very expensive, very complicated. Our devices competed by being one-eighth of the size, one-tenth of the weight, one-third of the price. Plus, we offered things nobody had before: automated self-testing, recording of events so you could go back and see what happened to a system, and locating a fault in the line. 

We pretty much taught this technology to an industry. It was embraced slowly over time, and the competitors have changed over time. Westinghouse has sold its interest to ABB, which is a Swiss conglomerate. GE closed their operations in Pennsylvania and purchased a startup company in Canada, so we compete with them. But this whole world has gone in the direction we led. We do have competition here in the United States, predominantly from GE with the products made in Canada. Around the world, there’s Siemens, ABB, Chinese manufacturers, and some others. 

J: It sounds like the competition is more direct than it used to be. Has it increased in intensity in recent years? 

Schweitzer: Gosh, I wouldn’t know how to measure that. No matter what you make or what you do, you always have competition, and there’s a lot to competing. It’s not just price and features. It’s price, quality, features, innovation, delivery, customer service, and all of these things going together. I like to say we compete to serve our customers. I like to be close to our customers. We have the best warranty in the business. We have the best turnaround when something needs to be replaced. We don’t charge. It drives our competitors nuts. Sometimes they’ll ask why we don’t charge for things out of warranty. I say, ‘We don’t want to.’ We want to encourage customers to come back to us when we have a problem so we can find out about it and not only satisfy them but do something about it going forward. 

J: I wanted to ask you about the company’s relationship with Washington State University. It seems like you have a pretty tight relationship with them. Could you describe that? 

Schweitzer: SEL is really lucky. We’re located within a shadow of two great land-grant universities: Washington State University and University of Idaho. 

We have a good relationship with those two universities and many, many others. We work very hard to have good relationships with universities. With WSU, I got my Ph.D. from WSU. I taught there, and it’s the closest one to home. It’s probably no surprise that we hire a lot of their graduates in all fields, not just engineering. However, Dave Whitehead, our VP or R&D, was telling me that we are the largest consumer of WSU’s electrical engineering graduating classes. And at any given time, we have well over 200 interns. 

I love universities. I used to teach, so I have a real affinity for it. We’re lucky to be so close to two land-grant institutions.