Derry's Repositioning Is Paying Off
Snell & Wilcox chief stalks the big Kahuna: quality and value
By Ken Kerschbaumer -- Broadcasting & Cable, 6/5/2005 8:00:00 PM
For years, British electronics-equipment maker Snell & Wilcox enjoyed a well-polished reputation for the design and manufacture of high-end video products. But the logic of maintaining that rarefied perch—alongside another U.K. company, Quantel, with similarly exacting standards—proved tricky in the wake of the economic downturn of 2001. Post-production and broadcast customers endured belt-tightening that, in turn, pinched suppliers like Snell & Wilcox.
Sensing a need to adjust course, the company in 2002 recruited a new chief executive: Simon Derry, who at the time headed Vitec Group's Broadcast Systems Division.
Derry quickly introduced a campaign to change the company's profile, from manufacturer of luxurious video gear to a maker of top-quality equipment that delivers value. The effort appears to be working: Snell & Wilcox is now experiencing double-digit annual growth, with U.S. revenue up 20% in 2004.
Derry has been considerably aided by the opportunity to take advantage of evolving chip and processing technologies that keep performance high at reduced expense. The company's modular products (space-saving PC-card–type equipment typically used for signal processing, upconversion, etc.) are proving popular in this country; Turner Broadcasting uses more than 5,000 of them in its Atlanta facility. And Snell & Wilcox's Kahuna production switcher—which handles high-definition and standard-definition signals simultaneously as well as offering a cost-saving internal upconversion capability—is also finding fans, even at smaller U.S. stations that usually turn to less pricey equipment from Sony, Ross Video and Grass Valley for production-switcher needs.
Nurturing a perception
Liberty Corp. has about 100 Snell & Wilcox IQ modular frames and 1,000 modular cards in its 15 stations, according to Eric Bergman, chief engineer of WTOL Toledo, Ohio. “You may pay a little more upfront, but it provides value because it works well and can grow with our company.”
That sort of perception is precisely what Derry has been trying to nurture. “It takes time to change,” he says. “We're getting that message out to a broader audience.”
Helping get the message out: the company's championing of the Material Exchange Format (MXF). MXF allows the seamless transfer of video and audio files between equipment from different vendors, a customer-friendly technology that Snell & Wilcox has embraced, from offering a free DVD explaining MXF on the company's Web site ( www.snellwilcox.com) to providing a free download of MXF software last year, in an effort to encourage other equipment makers to adopt the format.
“We support open standards,” says Derry. “Our customers need to be able to pick best-of-breed products.”
Of course, goodwill aside, Derry is confident that, as open technologies spread, customers seeking such products will choose Snell & Wilcox gear. He recognizes that this approach will test the company, but he considers it a healthy development: “One of the great challenges is how to pioneer and make technology relevant to the changing business needs of customers.”
After graduating with an electrical-engineering degree in 1982, Derry worked at British telecommunications company GEC Plessey (which became Marconi), then after seven years moved to Nokia Telecommunications as general manager of its switching systems business in the UK.
At the time, the early 1990s, Nokia was anything but a thriving technology leader. “My boss at Plessey told me Nokia would never go anywhere,” Derry recalls. Nokia was indeed struggling with its consumer-electronics business, but Derry was excited about the technology he found in use. “All the dynamics were right for a new, young challenger in the market.”
A useful skill set
By 1996, Derry was VP, sales and marketing, responsible for annual sales totaling £100 million in 12 countries. Three years later, he jumped from telecommunications to the video-equipment industry, joining the Vitec Group as managing director of Vinten Broadcast, a supplier of tripods and camera-support gear.
His skill set proved useful as he restructured Vinten's customer relationships and manufacturing processes—and Derry was rewarded by being put in charge of four other Vitec companies: Sachtler, ClearCom, Drake and Anton Bauer. “That was interesting,” he says, “because they were all successful but needed to figure out how to maintain that success.”
His performance at Vitec caught the attention of Snell & Wilcox founder Roderick Snell, who hired him away three years ago. Snell is pleased with the results so far: “The company's performance under Simon's wing has been remarkable. Kahuna has been extremely well-received, and we're making good progress with other product lines.”
Derry found many similarities between Snell & Wilcox and the Nokia of a dozen years ago. “Great technology, the marketplace was changing dramatically, and I felt that the business, with the right orientation, could be extremely successful,” he says. “It was very appealing.”
Also appealing to Derry has been the chance during his career to balance the commercial side of businesses with his interest in engineering. But as time progressed, he says, the scales have increasingly tipped toward commerce. Derry sheepishly admits, “I was never a great engineer.”
Luckily, he's in a position to hire as many as he needs.
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