Transcript - Martin McCourt, CEO of Dyson
Nicholas O’Regan, Professor of Strategy and Innovation talks to Martin McCourt, CEO of Dyson, and discusses the challenges posed by the recession and Dyson's model of investing in innovation.
Q. Dyson is growing at a rapid rate despite the recession. What are the main challenges facing business over the next 3-5 years?
Martin: More of the same I’m afraid, if that comes as bad news. Recession presents all sorts of difficulties for businesses. The biggest challenge of all is, what do you do with your investment plans? Do you pull up shy in order to try and repair the bottom line? Or do you keep taking risks? And for us we’re very much in the latter frame.
We’ve actually continued to invest very heavily throughout the recession. We’ll continue to battle whether economic adversity lies ahead of us, using exactly the same method, because that’s what we believe in: ideas, technology and taking risk.
Q. What are the key challenges faced by Dyson?
Martin: I think the biggest challenge that we have is, Can we actually cope with the rate of growth that we’re experiencing? That sounds like a wonderful problem to have, but it’s a very real issue. We’ve had to ramp up the number of hires we have, for example in research, design and development: we’ve announced that recently we’re looking at doubling the number of engineers that we hire to work in Malmesberry for example – from 350 to 700. That sounds easy; it isn’t. We need them all to be of a high calibre and to come out of university with the right kind of qualifications. I think the biggest challenge is that without those people we can’t turn our raw inventions into machines.
Q. What are the key growth opportunities?
Martin: Well I think that growth for us lies in three areas. The first and obvious one for us is, although we are in 50 markets, we haven't penetrated all of those markets. So if you take America as an example: it’s the biggest market in the world for the kind of products that we sell, and it’s also our biggest market. But we still only have perhaps about a 10% penetration of that market. We may have a current market share of almost 30% but if you look at the total number of homes in America, we’ve only been selling there since 2003. So we’ve still got a long way to go.
Then if I look at two other areas, one would be staying with geography, what about the 25 – 30 countries that we’re not yet in? There are massive geographies that we’re targeting: South America, India, China, a lot of the Gulf States. We’re not there yet and we’re determined to get there.
And the final limb of those three areas is new products. Now we have vacuum cleaners and we have bladeless fans and we have hand dryers that actually dry your hands, but we’re targeting to move into other new categories and then we’ll push those into all those geographies that we’ve been busy penetrating over the last 17 years or so.
Q. You have been involved in continuous innovation. What factors enable you to have such a high success rate?
Martin: I think a lot of it is just a gritty determination to uncover and recognise great ideas and when those ideas emerge, really back them. Don’t just talk it, really do it. Be prepared to put up the risk capital in order to bring those ideas to fruition and believe them and accept that there are going to be knocks, there are going to be setbacks.
But keep your head down: if you believe in it, follow your instincts and go for it. I think that’s really been our secret of success. We’ve actually been really focused. We’ve had some incredible ideas and we’ve driven them very, very hard and very successfully.
Q. In business people are very important and in an innovative company like Dyson, one of the key issues is retaining creative people.How do you retain the key people?
Martin: I think it's a bit of a chicken and egg situation there because if we don’t have the right people to start with, we’re not going to generate the ideas, or if we have the raw ideas we’re never going to turn them into anything.
But then if we do have those people we do create these great technologies, these fantastic machines that enjoy huge success. There is nothing more likely to turn around a team of people than that kind of success. Particularly if it’s rapid and if it’s on the world stage the rest of it is fairly straightforward I think. It’s about feeding that aspect of the business.
It’s about keeping that energy and that drive within the company, then also making sure you treat those people properly, you pay them well and all those other obvious things.
Q. What are the core competencies of Dyson?
Martin: That is probably the toughest question you’ve asked me, it’s very difficult to define. We are, as I’ve said, about invention. In fact, we don’t even use the word ‘innovation’ even though that is a word that you use a lot here. For us we flip it and call it ‘invention’. So we’re about trying to create the environment where young people, people who come straight from university with no previous work experience, can come to our place of work, cut their teeth, make their mistakes - and I’ll happily let them do that - but create wonderful openings for us. We’ll then turn those into I hope magnificently-packaged pieces of technology, great machines and that’s the fun of it. I think that really is what we’re good at: spotting ideas and turning them into something wonderful.
Q. There is a great deal about effective leadership in the private sector now. What are the attributes of good leadership?
Martin: Well, I’m fortunate because I work in an environment where the philosophy is defined by other people and other things around me, starting with James Dyson, who is the inspiration for everything we do. But now of course it’s much, much greater than James. Now there are 2,750 of us worldwide. But we all sign up to the same deal, and the deal is we’re going to come out with products which work differently and better than other people. And all our focus is going to be on that. So for me, when I look at my leadership team, I’m looking for them to be completely into the detail of that, completely signed up to it, showing an enormous enthusiasm for it in every encounter with their people, and totally focused on it. If I get that from my leaders, I can put up with a lot of the other stuff that maybe isn’t so good. As long as we’ve got that cost that’s the drive that holds us all together.
Q. Based on your own successes and challenges, what advice would you give to budding entrepreneurs?
Martin: Follow your instincts - that’s probably quite obvious but so many of them are rather doubtful of the overwhelming challenge, the prospect of how they must need to invest and what they have to do. Follow your instincts, be ready for things to go totally wrong - which they will - don’t expect any help from the market you're going into, particularly not your competitors because they will do absolutely everything they can to thwart you. Unless of course your ideas are no good in the first place, in which case you're likely to have an easy time, but not a very good time as a business.
Q. You have received the Orange Leader of the Year 2010. What does this mean for you?
Martin: That was hugely flattering of course: I mean I was quite happy to be nominated, let alone win it. It’s a great recognition not just for me, but for all Dyson people. I think actually the reason why that award came my way is because what Dyson has been doing over the last 17 years is quite a dream story. We started with something with very humble beginnings and we’ve climbed onto a global stage. We’ve competed with some of the biggest international organisations that there are in the world. We fought them tooth and nail in our backyard, and we had a lot of fun doing it and a great deal of success.
Q. Did you always want to be a CEO of a leading company?
Martin: No, I wanted to be an actor. I wanted to be in films.
Q. Is there a big difference?
Martin: Do you know what - I don’t know! Does that mean I could make it in Hollywood? I don’t know. But fortunately, I got the idea when I was very young, when I was in my late teens, that I probably wasn’t going to give George Clooney a run for his money so I found myself weaving into the business world instead. And I’m very pleased I made that decision.
Q. Sir James Dyson is the company founder and Chairman – how do you see the relationship between the Chairman and CEO?
Martin: Well the relationship between James and me goes back - we’re actually rolling into our 15th year together. It’s actually quite a simple split on the surface because James is the engineer and I’m the guy that runs the business and that’s very much how we do it. Now there are moments in the course of a day, week or month where we come together and take joint decisions, but much of the time we’re working in complementary but quite different areas. James is much more at home in the laboratory or with the engineers than in the boardroom.
Nicholas: Thank you Martin.
Martin: You're welcome.