The Andrew Davidson interview: Malcolm Miller - With his gruff exterior, beetling brow and four-day stubble, he is often read as a low-key clone of Sir Alan Sugar. But the former Mr Arctic Roll, rescuer of Sega Europe and reinventor of Pace Micro has long

The Andrew Davidson interview: Malcolm Miller - With his gruff exterior, beetling brow and four-day stubble, he is often read as a low-key clone of Sir Alan Sugar. But the former Mr Arctic Roll, rescuer of Sega Europe and reinventor of Pace Micro has long

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Last Updated: 31 Aug 2010

The past is sometimes hard to escape. For Malcolm Miller, the 44-year-old chief executive of the very successful Pace Micro, it repeats like an old curry every interview he does, principally in the bristly form of his former boss Sir Alan Sugar. Miller, as everyone has noticed, shaves a bit like Sugar (four-day beard), talks a bit like Sugar, even appears to share the same gruff, uncompromising persona - and lo and behold, everyone wants to ask him about ...

OK, enough!

Miller's people were rather firm about this before I met him: Malcolm, they said, is happy to talk about anything but Sir Alan. He's had it up to here (unshaven neck level). He's moved on. Let's write about Pace.

I agree. It must be incredibly irritating to have the terms of your success constantly delineated in relation to a boss you left five years ago. Miller has also worked at Unilever and Sega but no one asks him much about that. But Sugar, well, everyone wants an anecdote. Come on, Malcolm, you must know some good ones.

'Yeah,' says Miller wearily, 'people always ask that, you can't get away from it.'

How long will he have to live with it?

'I think it takes people a long time to forget. You know, if Alan's not in the business pages, there he is in the sports section ...'

I know, I know. Never work for a colourful entrepreneur, eh?

'No, I enjoyed a lot and I learnt a lot - how to do things and how not to do things,' Miller says. 'And we still talk. I've got great admiration for Alan I and wish him well.'

Oops, and I promised not to ask. There is a simple equation going on here, of course - Sugar: brash, colourful, always good copy; Miller, his former right-hand man: modest, glummer, not so colourful, rather more thoughtful. Hmm, so who shall we talk about? No contest. But then ask yourself who would you rather invest in right now? These are interesting times in consumer electronics. Miller's Pace, which makes set-top boxes for digital television and only three years ago looked a virtual dodo in stock-market terms, now seems somewhat more successful than Sugar's current vehicles and in not dissimilar sectors. The pupil has outpaced his teacher, then, ho ho. I can feel Miller's considerable brow beetling severely as he reads this, so let's just leave it at that for now.

We are sitting in the offices of Pace's public relations firm in Victoria, London. Miller looks in a good mood, at least, as much as his long, lugubrious face and rather drowsy, almond eyes allow him. He has been presenting to the City, and reckons that Pace's credibility is just about restored. It crumpled when, after a successful flotation in 1997, its share price slid rapidly away on the back of profit warnings and eventual loss. And that's where Miller came in, poached from Sega Europe, where he had been doing much the same job of shoring up a leaking vessel, three years after leaving Amstrad.

At the pounds 182 million-turnover Pace, though, he has done more than just repair the broken; he appears to have sorted out its future, too. So much so, in fact, that its share price leapt from a low of 82p last year to, at one point, over pounds 9 - encouraged, no doubt, by the fact that BSkyB started giving away Pace 'digiboxes' to encourage digital take-up in the UK. Pace's interim result in January showed turnover was up by 58%.

Suddenly Miller's push to focus solely on producing new technology to work digital television - it had been making boxes for analogue satellite broadcasts, too - appeared to be paying off. More than that, his vision of turning Britain into a world leader in digital television, just as Scandinavia is in mobile telecommunications, and then diversifying into producing technology that will effectively run the home of the future, linking appliances, services and entertainment, has now got a lot of people very excited.

Have we been here before? Maybe. The company does come with a bit of history - some of it inseparably entwined with that of Amstrad. Based in Saltaire, Shipley, on the edge of Bradford, Pace was founded in 1982 to build disk drives for Acorn computers. It moved into modems (sold to an MBO in 1994, went bust last year) and then produced set-top boxes for analogue satellite television. That was a market that had initially been dominated by Amstrad, following its link-up with Sky in the UK at the end of the 1980s. Somehow Pace came from nowhere to push Amstrad out of the way, becoming in the process a hot tech company (in the days when technology was only mildly, rather than wildly, exciting). On the back of it, Pace floated and then mysteriously fell apart as digital television was endlessly delayed and the company lost control of its costs.

Enter Miller into the picture, the man who had witnessed the effectiveness of Pace's products at first hand. Those at the company's Yorkshire headquarters expected the worst: 'I think everyone thought, oh my God, it's Alan Sugar all over again,' says one of Miller's senior team. 'But as they got to know him, they realised he is actually a very good manager.'

Miller is fully aware of what people expected. 'I am sure,' he says, 'that a lot of people thought I was the axeman.' In one sense, they were proved right: he rapidly closed down offices and reduced staff - essential as Pace had dropped into the red. (When Miller was hired, he was told profits were about to dip to pounds 12 million. 'As the story turned out,' he remarks drolly, 'we were about to lose pounds 12 million.') But he increased the number of engineers while others were losing their jobs and insisted on focus, and especially on what customers wanted.

It was not a radical shift - old Pace hands point out that much of the strategy was already in place before Miller arrived - but there is no doubt that the company has now hit boom-time. Its deals to provide boxes for digital broadcasters around the globe, Europe, the Americas, the Far East and Australasia, have already won it a Queen's Award for export, the first in this sector. But more than that, a series of important relationships with global giants such Cisco Systems, Microsoft, NDS and Time Warner, in which it explores the possible expansion of television into interactive entertainment and information systems (offering everything from video-on-demand and web access to food orders for your fridge), puts it at the cutting edge of new technology. It has also given it a clout way beyond its relatively small FTSE-250 status.

That takes some managing, especially for a man seen, in his Amstrad years, as an Establishment outsider and one who has repeatedly throughout his career been described as 'unclubbable'.

Fair description? Miller looks thoughtful.

'I think it's probably fair. I am not the kind of chap that likes sitting in restaurants chatting, but I do have good relationships with key providers for the company.'

Others point out that Miller was always more than just a macho manager and he has clearly changed his style from his time with Sugar, when the hard men of Essex (Amstrad's base) would strike fear into retailers across the land.

'Malcolm is somewhat less aggressive than he was at Amstrad,' says Rupert Gavin, now chief executive of BBC Worldwide but formerly of Dixons where he dealt with Miller. 'We used to think he was just driven by Sugar, but what I admire about him is that he has emerged from Sir Alan's shadow as driven as ever and is creating his own style of management. He's savvy, he's modest and, most importantly, he doesn't get self-deluded into believing in his own brilliance.'

Miller is certainly rather more affable than his morose countenance suggests.

Other executives say he is the kind of man you warm to gradually: unflashy, undemonstrative but reliable. He doesn't need a big group around him to feel comfortable, and in his leisure hours he chooses solo pursuits such as running, and playing tennis (the sport of choice for tech bosses) but singles, not doubles: he thrives on competition, and that's his key.

Miller says he gets his business drive from his grandfather, a Russian Jewish immigrant who set up a chain of tailor shops around London. The firm later collapsed. 'One thing that stuck in my mind early on,' says Miller, 'is that my grandfather had managed to set up eight shops and a factory and his sons-in-law didn't change with the times and they failed. They thought people were always going to walk in and have suits made for them. When it turned into an off-the-peg market, they didn't see it coming.' It was, he says, his first business lesson and one he has never forgotten. 'Sometimes you have to tear things up and move on.'

The second lesson was that it's a lonely world. His father died when he was 11. Introspection is not a Miller strong point (somehow, after 16 years at Amstrad, you imagine that side of his brain must have been wiped) but he does acknowledge that 'some journalists have reported that I wanted to prove myself more because of that', and there may be truth in it. He was the eldest of two - he has a younger sister - and his father's death pitched him closer to his mother and made him all the more determined to succeed. After school, he read business at Central London Polytechnic (now Westminster University). He spent his placement at Unilever and was promptly recruited by the food and cosmetics giant when he graduated. He cut his teeth in frozen foods, becoming Mr Arctic Roll, among other things. It was a marketing man's dream. The research was meticulous: consumer reaction, share of freezer, advertising. And yet he left?

'A lot of people did.'

Why, ambition? Probably. 'I told the personnel officer I was worried I wasn't getting on and she pulled out a chart and said, 'No, look at your age and look where you are on the curve.' I said I didn't want to be on her curve, I wanted to be above it.' Part of him, too, was clearly uncomfortable with the big-company bureaucracy.

Life at Amstrad was rather different. Miller and Sugar, who shared similar rag-trade roots, clearly clicked to such an extent that many saw Miller, with his lookalike beard and taciturn manner, as something of a Sugar clone - a perception that dogs him to this day. In fact, says Miller, he learnt a lot more from Sugar than just razor technique. 'Amstrad rewrote the rule book on many things and was a fantastic opportunity for me,' says Miller. 'It was all about reconstructing different parts of the consumer electronic industry into packages that consumers could afford, understand and find easy-to-use.' That, he says, was Sugar's genius. 'Alan is brilliant at listening to different ideas and putting them together in a way that people will accept.'

Miller sums up the Amstrad approach as being flexible, driving down costs and understanding what people want - objectives similar to those of Unilever, but chased at greater speed. And eventually speed was the problem. Too many corners were cut, too little focus, too much leaping around when the company should, in fact, have been concentrating on keeping its customers. How could it let its lead in word processors just disappear? Why did it let Pace barge into its market for satellite set-top boxes? Miller won't say it, but others do. 'The Amstrad boxes just weren't as reliable,' says ex-Dixons man Gavin.

And then Miller joined Sega, a difficult move especially as Sugar does not like people leaving. 'Alan always thought people should stay,' says Miller ruefully. 'I told him it was a credit to us, that people do well, they go off and do other things but ...' He left, he says, because he wanted to do something on his own, he had built up a relationship with the Japanese and he liked the challenge. 'I love difficult things. The company was bleeding quite heavily but I didn't doubt I could put sound business principles to it.'

More than that, he wanted to be his own man. At Sega, Miller filled in the last bit of his business education jigsaw, in particular, learning that quintessential Japanese skill: 'Acquiring a customer costs a lot of money,' he says. 'Keeping him does not and losing him is very painful. The Japanese are always intent on improvement and enhancement, they are good at keeping their customers.'

Miller fulfilled his three-year contract, pushing the company back to break-even, but again he found the lack of ultimate power frustrating. 'I wanted to work for something where I had a better control of the destiny of the company,' he says now. The call from Pace came at the right time. Miller took the leap and, with seven weeks to kill between leaving Sega and joining Pace, he started training for his pilot's licence. As he says, he likes a challenge.

Why Pace? Because, says Miller, he could see the potential. At Amstrad and Sega he had always believed in digital television. It was a question of when, not if. 'I could see the passion for more channels and more choice and more interactive services.' The way the market was moving, no one was sure who would get the lead: the software companies, the PC makers, the media moguls, the telephone giants. It was, and still is, all up for grabs. Imagine if a little British company could squeeze in as the link between all four? The problem was controlling Pace's costs and growth, especially as the company had 'a lot of ideas ahead of its time'.

Why Miller? Because, according to one involved in his selection at Pace, the company wanted to keep the start-up spirit alive that had nurtured the firm for so long. Miller fitted perfectly. 'We knew that parts of us needed to grow up and that we were moving on to bigger things,' says Rob Fleming, operations director at Pace and one of the original team from the early '80s. 'But we didn't want to lose the entrepreneurial attitude in the company.' (Fleming's stake in the company is worth close to pounds 100 million now, so he is probably the richest executive Miller has ever had reporting to him).

What Miller really brought to Pace, however, gleaned from his years at Unilever, Amstrad and Sega, is that indefinable nous for what consumers want - an essential instinct in a marketplace where high-tech and consumer electronics are now merging together very fast and a wealth of possibilities have to be steered through. Last year, for instance, Pace produced a set-top box with an integral hard-disk drive that allows viewers to pause and record live programmes. Goodbye video recorder. But how and when does it market that?

'To prosper as a leader in this industry,' says Pace finance director John Dyson, who has worked at LSI Logic, CASE and Norbain, 'You have either got to be a very strong engineer or you have to have a strong understanding of what might succeed. There is no room for the all-purpose general manager.'

'I suppose,' agrees Miller, 'I am good at spotting opportunities and spreading the word.' What he is bad at, he says, is patience. He always wants everything now, immediately. This can have advantages. He says he has learnt, in dealing with engineers, that it is important to insist on something being ready for a deadline, otherwise they will just go on improving a product forever and never get it to market.

Miller is also a worrier, someone who insists on attention to detail at all times, and an enthuser, usually to be found perched on someone's desk, clutching his Palm Pilot, telling an executive to 'go on, just do it!' His life, according to one colleague, is ruled by his new-found mastery of the electronic organiser, which is wrestled over by Miller and his PA (who constantly updates it while he is on the road). Another notes that, while Miller is a Palm Pilot evangelist, he won't let his executives buy them on expenses. They have to pay for it themselves. That, he says wryly, is very Malcolm.

Can Pace keep that small company spirit? The company has broken the 1,000 employee mark and, if its market cap continues its tidal-wave growth, Pace will be heading for the FTSE-100. What if someone gobbles it up? It must look pretty attractive to some of the electronics giants trying to get a foot in the door of the future.

Then Miller will be seriously rich. His salary doubled to pounds 440,000 last year on the back of Pace's rapidly improving performance but, more importantly, he is now sitting on options for almost two million shares at 53p each, which would gain him around pounds 17 million pounds if cashed in at time of writing; many, many millions more if there were a bid.

That has to be a nice feeling, right? Some think he has his old boss Sir Alan Sugar in his sights (with Sugar's total wealth likely to be pounds 580 million-plus in this year's Sunday Times Rich List, he would have some way to go) but Miller shrugs it off and points out that most of Pace's staff have a stake in the company: over 50% have share options, over 70% are in the share saver scheme. The opportunity to create wealth for people, he says, is a powerful bond. As for whether it will change him, it's unlikely. His two children, he says with a smile, are nearly grown up now and constantly complain that their pocket money is below that of their friends. 'I tell them to go get a job,' he mutters. So what does he spend his money on? Holidays, he says. He has one house, in Radlett, north of London, but he likes to go skiing twice a year to Courchevel, and stay in the south of France in summer. His working week is split between Saltaire - where he stays in a company flat before zipping down the motorway and home to his wife - and London, his base and where he plays his tennis, at The Drive club in Edgware. He gripes about the travel infrastructure in the north, especially in comparison with America, where every city seems to have a decent airport. The Government, he suggests, should get its finger out and decide if it wants to create wealth outside the Southeast.

As for the national game. During his Amstrad days, Miller was a regular at White Hart Lane watching Tottenham (owned by you-know-who, of course). Not so much any more. He finds it too frustrating. 'It's the fact that you are not in control. You are out there on the edge of your seat for 90 minutes. It's an obsession that becomes agony,' he says and now he goes only occasionally. So does he pay for his own ticket?

He laughs. 'I ring Daniel (Sugar's son who runs Tottenham) and I promise to pay.' So relations are still good, then? Oh, sorry, there we go again, too much Sugar.

'No, it's just that people have covered all this in so much detail before and I think an article on what we are doing at Pace is much more exciting.'

And he's right, of course, I am only teasing. Anyway, talking of obsessions, and just in case I didn't get the message, I receive another telephone call from Pace while I'm writing this.

You're not going to ...

Heaven forbid, barely a mention.

ROBINSON IN A MINUTE

1955: Born 22 August in London. Educated Hendon County Grammar and Central London Polytechnic

1976: Takes job at Birds Eye Foods as product manager for cakes and desserts

1978: Joins Amstrad

1985: Appointed marketing director, Amstrad

1989: Sales and marketing director, Amstrad

1992: Managing director, Amstrad

1994: European chief executive officer, Sega

1997: Chief executive, Pace Micro Technology

2000: Oversees the first UK demonstration of set-top box as part of 'smart home' concept.

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