Interview: Graham Ryan
Alistair Schofield speaks to Graham Ryan, Chief Commercial Officer of NXT, one of Britain’s most innovative companies.
Britain has a worldwide reputation for producing great inventors, although unfortunately its track record of capitalising on those inventions is not so good. All too often it seems that the inventors are not the ones to make money from their inventions.
In considering this conundrum, I thought it would be interesting to speak to an organisation that is at the forefront of technological advancement, but which also needs to make money. How do they balance the need for continual innovation with the potentially conflicting need to turn new ideas into saleable products?
I chose NXT as a company to speak to as I am a big fan of their products and because they have an interesting history. They began life as a loudspeaker manufacturer but decided to sell off the manufacturing capability and concentrate entirely on innovation.
When I met up with Graham Ryan, NXT’s Chief Commercial Officer, I therefore asked him to explain a little bit about the company’s history:
“The organisation began as the Verity Group, which was a manufacturer of a number of British HiFi brands including Wharfdale, Mission and Quad. However, in the early 1990’s Henry Azima, our Chief Technology Office, came across a technology that could produce high quality sound from virtually any hard flat surface.”
“We realised that the potential for this ‘bending wave’ technology was far bigger than the UK HiFi market as it would enable high quality sound to be used in places that were unsuited to conventional loudspeakers. The design advantages alone were huge, as the technology would enable manufacturers to do away with the ugly grills that are needed for traditional loudspeakers. We therefore decided to move the company to a licensing model, similar to the British chip manufacturer ARM.”
“We sold off our manufacturing plants and the HiFi brands, renamed the company NXT and set out on a mission to sell licenses to use our technology to everyone we could think of.”
As I recall, NXT was one of the darlings of the City during the late 1990’s. What happened?
“The dot.com boom had raised the level of interest in virtually everything technical, and our technology certainly captured the imaginations of a lot of people. The problem was that the expectations were based on the potential for the technology, not on a more realistic judgement of the rate at which manufacturers would be prepared to adopt it.”
Do you think this slowness to adopt new technology is a British thing?
“Not in particular. It is certainly true that the Japanese tend to be the first to adopt any new technology, the Americans second and Britain third, but I don’t think that was the difficulty facing us as we were selling internationally anyway.”
“I think the problem had more to do with recognising that the time for invention was over and that we really needed to focus more on the commercialisation of the product”.
“We also needed to recognise that just having a great technology was not reason alone for someone wanting to buy it. Take televisions for example, when people are purchasing a new television they will look at the picture and they will consider how the set will look in their home, but very few will listen to it to assess the sound quality. We may be able to turn the whole of the front of the screen into a loudspeaker and make the television sound as good as a HiFi system, but until buyers of televisions start to demand that sort of quality, only a few forward thinking manufacturers, such as Philips, will offer it.”
Having turned yourselves into a company of inventors, was this move to greater commercialisation an easy one?
“No, not really. We are company full of incredibly creative people, all of whom have a great passion for what they do and who are constantly coming up with brilliant ideas and new inventions. Being more commercially focused inevitably means that we have to pass over many of these good ideas in order that we stay focused on our core business and on working with our partners to bring finished products to market.”
“However, this is not to say that all good ideas not pursued by us disappear. For example, one of the best ideas that we didn’t attempt to commercialise internally was that of using bending waves in reverse. The thought was that if we can turn a hard surface into a loudspeaker by making it vibrate, we must be able to detect the position of vibrations on a hard surface by applying the same principles in reverse. However, we took the hard decision not to pursue this opportunity and instead licensed it exclusively to 3M, who are now developing it for use in touch-panel displays, mouse pads and so on.”
Do you think that this move to being more commercially focused has succeeded and if so, how did you achieve it?
“I not only think it has been successful, I know it has! I can say this quite categorically because I know that if you speak to anyone in the company they will be just as passionate about the commercialisation of our technologies as they are about the technologies themselves.”
“We achieved this with the assistance of Marc Cox and his company Brand Spirit Limited. I had previously worked with Marc when I was Sales and Marketing Director for Bosch Europe and found his services to be of great help in achieving the brand focus we were looking for.”
“At NXT, Marc helped us develop a model for the business based on three values; roots, passion and vision.”
“The purpose of the model is to ensure that the company’s brand encompasses all three aspects of the model. In NXT’s case this resulted in the following:”
“Roots. This is about the organisation’s heritage, its people and about what gets them excited. In NXT we employ a lot of people whose background was in the HiFi industry. They are highly creative and passionate about music. It’s infectious. When I come back from a holiday or a trip abroad, I can’t wait to get back to the office to see what’s new. On one occasion, I came back to find that someone had been experimenting with low cost materials and produces a speaker system that used two flat panels and a piece of domestic sewage pipe as a subwoofer that sounded better than my HiFi system at home.”
“Passion. The change that took place here was a recognition that we were not inventing for the sake of it, but that we are working with partner companies to create commercially useful products.”
“Vision. Whereas the company’s early vision was to replace conventional loudspeakers, our realisation was that a lot of conventional loudspeakers do a perfectly good job, so why replace them? The unique advantage our technology had over them is in putting high quality speakers in places where the use of conventional loudspeakers are either impossible or impractical.”
“By going through the process of defining the organisation in these terms, I believe that we all arrived at a point where we said ‘that’s it!’ We had found the set of values that worked for everyone.”
In my experience, a lot of companies succeed in defining models of the business such as this but then fail in implementing them. What steps have you taken to ensure that the implementation is successful?
“I won’t pretend that it was an easy transition for everyone, and some people have left as a result. While this is unfortunate, I do believe that it is essential that everyone ‘walks the talk’, especially the management team.”
“For example, one aspect of the change has been that we are using more of our engineers in front-line roles. I remember when I was at Bosch, the engineers were in a separate building hidden away from customers. At NXT we have even moved some of our engineers into sales roles in recognition of the fact that their passion for the technology is a key part of our brand value.”
Do you feel that NXT is now achieving the right balance between commercialisation and innovation and that this will translate into improved results?
“Absolutely. It’s been a much tougher journey than we first anticipated, but we now have an organisation where all of our effort, commitment and passion is directly linked to the brand values that our customers will experience when they use our products.”
And what of the future?
“We are hugely excited about the changes that are taking place in the markets for sound. Take the mobile phone market as an example. Whereas a few years ago a mobile phone was just that, a phone, today the market is for composite devices that include a phone, a camera, a video player and so on. All this requires higher quality sound from a device that needs to be roughly the same size as a phone from five years ago. Since our technology can turn the whole of the screen into a speaker, we can improve the sound quality as well as saving space over conventional speakers.”