The Andrew Davidson Interview: Robin Saxby - The chairman of ARM, the soaring microchip design company, says he was just following his hobby. For all his success a part of him is still the gadget-obsessed Mr Fixit student, whose good humour is only put to

The Andrew Davidson Interview: Robin Saxby - The chairman of ARM, the soaring microchip design company, says he was just following his hobby. For all his success a part of him is still the gadget-obsessed Mr Fixit student, whose good humour is only put to

by
Last Updated: 31 Aug 2010

I have seen the future of business and it's ... 'Wake up, wake up!' Robin Saxby is shouting. He is standing against a deep-blue wall opposite his office, three floors up at ARM's Maidenhead base, posing for photographs.

The formal interview is over, but he's still fielding questions from me.

Questions like, I don't quite understand, do you keep an office here because you like the Thames Valley? I thought the head office was in Cambridge?

Or California?

I think I've hit a sore point. No, no, no, says Saxby, get rid of all those old-fashioned ideas like head offices and bureaucracies and manufacturing plants. We don't run things that way, this is new, this is the future.

And what a curious future it is. Saxby's secretary is holding a circuit board behind his head (artistic purposes). He keeps chattering away, a volatile bundle of energy and ideas, clearly perturbed by my Neanderthal business brain.

'Shut your mouth,' says Harry the photographer, adjusting his focus. Saxby replies: 'I am not sure I can keep this still.'

We can believe it. He winces slightly before launching into another rush of words, this time about his son's attempts to teach him how edit video on computer. He loves it. He loves the fact that here he is, 52-year-old electrical engineer, chairman of ARM, dubbed the king of Britain's Silicon Fen, running the company that saw the biggest market cap growth of any last year, that designs computer chips for everything from laptops to mobile phones to digital television, that stands at the forefront of the knowledge economy,and he's getting lessons in high-tech from his son!

He's a hard man to dislike. I had turned up three-quarters of an hour late, my schedule torpedoed by a British Rail bomb scare. Not a problem, shrugs his secretary. Oh, don't worry, says Saxby, sipping coffee from his ARM mug, great to see you.

It's Friday, it's pretty relaxed. Colleagues say Saxby's biggest strength is his chirpy ability to relate to people instantly and put them at ease.

It has made him an invaluable salesman for ARM and a reassuring leader as publicity has settled on the company like a spotlight. The drawback to his voluble enthusiasm, say those who know him well, is that you can always hear the bomb ticking. Sometimes Saxby can just go off and you have to take cover.

You wouldn't guess it to meet him. Skinny and medium-height, with his long, mousey hair swept brusquely forward and round, Saxby oozes attentive bonhomie without a trace of temper. Sit down, he waves, let's talk. He perches on a black sofa under the window of his office and gives me one of his wide, Jimmy Tarbuck smiles. He has got a new pinstripe suit on - he buys them bulk in the sales, he says - and some expensive-looking brown loafers with those little leather tassles that the Americans like so much. It's the only visible sign of prosperity I can see.

The rise of Saxby and ARM is the great British success story of the moment.

ARM's rapidly growing fortune - grounded in its ability to design microchips, then let others make them - has been well analysed elsewhere. Less well understood is the effect of that success on the team that has led the firm since its inception 10 years ago. In the past couple of years, as Saxby acknowledges, it has all gone a bit crazy. The shares were doing great at around pounds 12 in December 1998 then, whoosh, the market went technology mad. By January this year ARM stock was yo-yoing between pounds 33 and pounds 38 a share and the company, which had a turnover of only pounds 42 million in 1998, had been catapulted into the FTSE-100.

Profits in 1999 were up 50%. And Chesterfield-born Saxby, who has a 2.4% stake in the firm and is now worth upwards of pounds 150 million, is smiling out of every business page you open. With more than 200,000-plus share options at exercise prices such as 9p, 19p, 35p and 40p, can you blame him?

But life, of course, is not that simple. ARM's success may have turned Saxby into a wealthy man and a well-known face, but with the profile comes the downside. He and his wife hate the obsession everyone suddenly has with how rich he has become and both are beginning to feel vulnerable (his wife, he tells me, was furious with him for revealing to an interviewer where they lived). When I ask him, partway through the interview, whether he thinks he may now be Chesterfield's richest son - more as a joke, than anything else - I stumble straight into the backlash. He goes very, very cold.

'I don't particularly like the question,' he snaps. 'It really is an irrelevance. At the end of the day I happen to be worth a lot more money than I used to be worth. That has some advantages and some disadvantages.

I don't consider my wealth to be a mark of respect, it is just a by-product of success. Focusing on money only is a very dangerous thing to do.'

Point taken. But we like our business heroes rich and Saxby, on his admission, is an awkward mix of old and new. As he tells it, he's not a shaggy-haired computer nerd, he's the boy from the mining communities south of Sheffield who used to fix tellies for his dad's drinking mates, and has merged his technological know-how with old-fashioned, entrepreneurial nous to propel his firm to the top. 'All I've done in my life is follow my hobby,' he grins, warming up again.

But there is something compelling about his restless drive. It pushed him out of his first job as an electrical engineer at Rank Bush Murphy and through positions in marketing and senior management at a handful of companies till he ended up in Cambridge 10 years ago, sitting in a pub with 12 electrical engineers, the team he had promised to whip into a new sort of high-tech firm for backers Apple and Acorn. A company that didn't actually make anything, but just provided design solutions for others. A company whose product was intellectual property. A company of the future.

He was, according to many, the perfect high-tech start-up leader. Technologically proficient but never a geek (Saxby, joke his workmates, is always the one to buy the latest gadget, then ring you up at 11 at night to ask how it works - he is too impatient to read the instructions). And confident in his people skills. 'He's not a conventional manager,' says his old friend and colleague Jamie Urquhart, ARM's chief operating officer, 'he's a consensus-driven person, though when necessary he will take the tough decisions. But one of his real strengths is his refusal to accept defeat.

He is so good at being optimistic and motivational.'

In the early years, ARM needed that, as Saxby will quickly tell you.

Finding partners to commission its brainwork wasn't quite as easy as it is now. Nor did the firm's backers flood the start-up with cash - a good thing, Saxby argues, 'it made us be careful and work hard' - and for a time things looked dicey: pay rises were frozen, getting a working credit line was a slog. Today's success stems from a lot of graft, jetting round the world, selling the company's work, signing up partners, pushing through new technology. The design cycles of the sort of products that ARM designs chips for are much longer than people realise, he points out, so the roots of the current success go back years.

'For the new range of mobile phones it's five years, for technology in cars it's 10 years.' Right now it's payback time for ARM as all the designs it licenses, and gets a commission on, reach the market. ARM-designed chips have the highest rate of growth in the industry (51 million units shipped in 1998, more than 150 million units last year), mainly on the back of rocketing mobile phone sales. But the chips will also soon be in new airbags, new anti-skid technology, new computer games, new networking products.

Saxby's grey-blue eyes widen with an almost evangelical zeal.

'I want ARM chips in everything digital,' he says. You can see why City analysts are impressed. Some pundits (the Motley Fool newsletter in January, for instance) even predict that ARM will increase sales at 50% a year for the next six years, hitting pounds 1 billion in 2006. Hence the shares' rocket-ride.

That success allows Saxby to recruit and reward his invaluable engineers with ever-more-lucrative share options, one of the reasons he took ARM public in 1998; but it also cranks up the heat. There are, so the joke goes, a lot of happy in-laws circling ARM, prompted to buy shares early on by their children's enthusiasms. What if the stock, which looks overvalued to some, crashes? Saxby says he forbade his mother, now 83 and still living in Chesterfield, from investing. 'It was just too much pressure,' he moans.

Was it his upbringing that drove him to the top? Those who know Saxby say he doesn't talk about his family much. His background, he says defensively, was neither affluent nor poor, just 'normal'. His dad worked as a security guard at a local factory. His mum helped him in his hobby, fixing tellies.

He has a younger brother who has just retired from a job at an industrial air company in Chesterfield. What else? Grandad on his mother's side was a butcher. Saxby says he probably got his hard-work gene from him. He worked till he was 75 and died at 93. His own father, he says, was more interested in sport than business or work.

As for ambition, it was probably Chesterfield Grammar School, packed full of great teachers, many of whom had served in the second world war, that propelled him. He points out that little bits of serendipity also fell his way. A neighbour died and left him his ham radio kit. He was inspired by a physics teacher who was a radio astronomer. He still remembers his pride at winning a prize of two shillings and sixpence for devising the best practical demonstration of what they had learned in physics that term.

And he was always a boy who planned. 'At each step,' he says, 'I always think: what is the next step?' At Liverpool University, one of his plans fell apart in the nicest possible way. 'I thought I should get married at 28, but I fell in love at an early age, which spoiled the plan.' He was married in 1970, at the tender age of 23. 'You have to take the opportunity when it comes, and my wife came along earlier than planned,' he laughs.

Starting a family fuelled his business ambitions. He moved from Rank Bush to Motorola because of the company car on offer - a white Cortina with black upholstery. 'We were very poor, my wife was a teacher, we were buying a house in Kent and my car had broken down - what was I going to do about it?'

Rank, where he had been designing chips for television, gave him a sense of project management. Motorola gave him a vision of what else was possible: people skills, global reach, financial know-how. It also turned him into a salesman. Mike Alderson, his old boss at Motorola, remembers Saxby as one of the most enthusiastic and committed managers he has ever worked with, and also one of the most volatile.

'Robin was always so full of ideas, but he was very tempestuous too.

He would come in and resign every three months. We would have some pretty tough fights, he would swear and storm out, then come back and apologise and we'd go and have a beer. He is the classic guy who wants to control his own show.'

What Alderson noticed most about Saxby was just how good he was at latching on to the right customers and making them trust him. In one case, his colleagues at Motorola were astounded when he managed to get himself invited to a customer's wedding after only two months.

Colleagues at ARM tell similar stories, of bonds forged over skiing trips and tennis matches and after-meeting drinks. Urquhart cites how Saxby, on discovering that a Japanese business partner was a Monty Python fan, moved a Tokyo meeting into the hotel corridor for a Silly Walk parade - classic, ice-breaking stuff. And he is constantly available, both to colleagues and customers, living off his e-mail and his mobile, which is never turned off. Urquhart remembers ringing Saxby with some sensitive business information and, on hearing something in the background, asking his chairman where he was - 'just in the middle of giving a lecture at the IEE'. In the sometimes cold and clinical world of multinational high-tech, it is eccentric touches like this that mark Saxby out as something special.

Moves to Henderson Security and Euro Silicon Structures, both times as boss, completed Saxby's business education. Henderson, says Saxby, was his Harvard. A security company that dealt with national governments and marketed products such as the 'terrorist truck-bomb stopper' - 'very popular with our Middle East clients' - it had pounds 6 million of revenue and a few hundred staff. It was the best way to learn how to run a business. At ES2, a European chip manufacturer, he went back into high-tech.

He hints that he took on the ARM challenge only because of Apple's involvement.

'ARM was never going to be just a British company, it was always going to be global from day one.' No one was sure that the concept of a company that didn't actually make its main product would work. Saxby scoured around looking for equivalents to see if he could convince people. He looked at Intel, Microsoft, Dolby, Nintendo.

'Dolby is a licensing company, it licenses its technology to others.

Nintendo has very little staff of its own, and makes millions of pounds' worth of profit per employee. There are parallels with Intel's chip business and Microsoft, obviously, because part of what we do is software. But it was our own business. I said we would be the global standard, and maybe half of the people there thought it was possible,' he laughs. 'I'm not sure about the others.'

And since then, he says, he has always used his close links to ARM's customers - the 'partners' with whom it works closely, often combining teams and ideas - as a constant opportunity to learn. 'I am lucky. I meet a lot of chief executives of partners, I talk to them, I get inspirational things from them. They'll say something and I'll think, yeah, that's a good idea we can apply to ARM, and I also see bad things, especially people behaving politically and not telling the truth. That isn't any good.'

The key point, he stresses, is that ARM takes a bit of something from everywhere: from America, from Japan.

And Britain? What are we good at? 'We are very good at analysis. One of my friends from Nokia told me that the British are really good at writing reports. Ha ha ha!'

He rolls back on the sofa, laughing at his own joke.

It is a mistake, obviously, to see ARM as a very British company. Already it is stretched across the world, working closely with partners in America and the Far East - one of the reasons it opened a sales base in Maidenhead, conveniently close to Heathrow. (The other reason, whisper colleagues, is that Saxby loves his family home in the Thames Valley and always found Cambridge rather too snotty for his tastes, though he won't admit it in public).

The challenge for Saxby now is to manage the company's enormous growth in a way that keeps its tiny-team spirit intact.

In the early days in Cambridge, a rack of empty Moet bottles, each marked with the name of the chip it was drunk to christen, signified that bond in the converted barn where they started. And now? Saxby tries to keep it feeling small, breaking the company into business units, and insisting on meeting all the 450-plus staff at least twice a year for conference sessions. He provides the strategy and vision but the day-to-day management is out of his hands now. 'I don't actually feel I am managing,' he says. 'My job is to lead.

Others are better managers than me now.'

But he is, as ever, hugely confident. The biggest threat to ARM, he says, is not the Yank chip designers that the stock market gets jittery about, but ARM itself. 'Having better brains won't be enough to beat us now, because we have the momentum. We have done it for longer in our space.

Even if someone comes up with a better product, where is the software?

Where are the tools? Where is the support? It is a lot more complicated than just the transistors. For someone to overtake us, we have to trip up. And if we do trip up, we will trip up slowly,' he says.

'So we have to continue to innovate, to do things in our laboratories that will have an impact in five or 10 years' time.' It comes down to people, he adds. 'If we don't have the best people we will turn into a dinosaur. In the technology business you are either growing or declining.

We have been growing pretty fast and we want to keep doing that for ever.'

Will he finish his business career at ARM? Probably, he says.

'I am not saying I will do the same job for ever, but I am highly likely to be associated with ARM for a long time.' His schedule will remain the same, spending half his year abroad, flying round the partners, keeping in contact, building new bonds. His children, both educated through local state schools, are nearly grown up now and he has a new house to renovate in his beloved Thames Valley (his daughter says the first thing he did in the house was run out and buy the latest Bang & Olufsen TV and hi-fi and wire up the whole place for music in every room, even before they had furniture). Luxury is creeping up on him but he hopes it won't change him. 'I've still got the same old Saab,' he laughs, then adds thoughtfully that he is pleased the money came late in life; too late, he hopes, to affect his children.

And that is what most people like about Saxby. For all his success, he has little arrogance, few pretensions. He used to love fiddling about with the PA system for his son's rock gigs and is pleased as Punch that his daughter is reading business at college, and he will wax lyrical about Muddy Waters and Howling Wolf, the old blues music he adores.

He can be tough to work with, and is, as one colleague puts it, probably a 'change junkie', never happier than when he is jetting off somewhere, taking up some new cause. But he is honest in his passions and open about what he does, and if he is occasionally sharp and competitive, he leavens it with an engaging desire to please. So one minute he tells me that Richard Branson, no less, passed on to him the secret of sanity in the spotlight: protect your family from the media. The next he gives me his daughter's e-mail address, pointing out she is an MT subscriber.

And later, as the photos are being taken, when I tell him how Felix Dennis, the publishing millionaire and fellow blues fanatic, does a passable Howling Wolf impersonation, looks suddenly pensive. I turn round to ask Harry something and, before I know it, Saxby has broken into song (he will forgive me if I misquote him).

'I have had my fun/If I never get well no more/Oh my health is fading fast/Oh yes, I'm going down slow ...'

He smiles when he's finished.

'Going down slow,' he says, looking rather pleased that he hasn't disappointed me. 'I think it's about syphilis, actually.'

SAXBY IN A MINUTE

1947: born 4 February in Chesterfield, Derbyshire. Educated Chesterfield Grammar School, Liverpool University

1968: electronic design engineer at Rank Bush Murphy

1972: senior design engineer with Pye TMC (Philips)

1973: sales engineer at Motorola Semiconductors

1984: managing director of Henderson Security Systems

1986: MD of European Silicon Structures' UK subsidiary, later becoming president of its US affiliate

1990: head-hunted by Apple and Acorn to run ARM

1998: floats ARM on London stock exchange

1999: ARM technology captures half the mobile phone market; company breaks into the FTSE-100.

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Subscribe

Get your essential reading delivered. Subscribe to Management Today