When you ask the founder of a £1 billion company established almost half a century ago to identify a single moment that underpinned his career, you might expect a hint of indecision as he mentally sifts through more than a few likely candidates.
Not so with Sir David McMurtry, who doesn’t need time to think. While assistant chief engine designer at Rolls-Royce back in the early 1970s, McMurtry had a moment of creative genius, his memory of which still shines bright today. “I was asked to look at a manufacturing problem with the Olympus 593 engine for the Concorde, as the square nacelles that it had meant there was a lack of space, so we were having real problems measuring the pipes. We had tried using a coordinate measurement machine, but it simply hadn’t proved possible due to the hard probes that were used back then.
“I thought that a device based on balls and rollers, rather than optics, would give greater flexibility. I milled it out of a piece of bar in my machine shop at home, put the balls in and wired it up. It worked. The problem was solved.”
McMurtry had created the touch trigger probe and, unbeknown to him, had sown the seeds for the formation of Renishaw, a company that has gone on to become one of the biggest measurement companies in the world. McMurtry has been at the helm every step of the way, applying his unique blend of engineering knowledge and management prowess. Renishaw now employs more than 3,500 people, two-thirds in the UK, and is listed on the FTSE 250. And the future looks golden, with McMurtry identifying disruptive technologies such as additive layer manufacturing to ensure that the company keeps going in the right direction.
McMurtry’s achievements are all the more impressive bearing in mind that he didn’t come from a family of engineers. As a child growing up in Ireland, his love was aircraft modelling and taking their engines to bits, but his parents wanted him to go into what they saw as a more ‘noble’ profession. “I stayed on at school until 18, and my parents wanted me to go into insurance,” he recalls. “They arranged an interview through the old boy network, and I went along. The interviewer asked me why I wanted to come into the insurance business – I said I didn’t! Unsurprisingly, I didn’t get the job.”
Insurance’s loss proved to be engineering’s gain. McMurtry set about pursuing his interest in aviation, writing to what was then Bristol Aero Engines. He won through to interview, and found it much more to his liking. “I spent most of the interview taking an engine to bits.”
His aptitude evidently shone through, with Bristol offering him the chance to
become an apprentice machinist and fitter, with once-a-week release to study for an HNC. An offer of a full-time student apprenticeship followed, allowing McMurtry to get into the design office rather than focusing on production roles. This position brought him into competition with younger students who had followed the more academic routes.
“I was 25 then, whereas the graduates were 21, and many had studied at Oxbridge. But my apprenticeship background meant that I had developed some useful practical skills. I had been through the machine shop, and through strip and build. I was practical, and some of the others weren’t.”
Bristol Aero Engines later became Bristol Siddeley Engines, which in turn became part of Rolls-Royce. McMurtry’s star continued to shine, and he enjoyed a series of promotions, with stints as senior project designer in the advanced propulsion research group, and deputy chief designer on the RB.401 programme. By the age of 30, he had become assistant chief of engine design – quite an accolade for an apprentice fitter.
He recalls his days at Rolls-Royce with pleasure – bar its well-documented period of receivership in 1971. “I was at Derby in a meeting when that happened,” he says.” It was announced over the tannoy. We all looked at each other and said ‘what do we do now?’ I looked out of the window and people were going home. We just carried on and finished the meeting.”
It was while he was at Rolls-Royce working to develop the hot-end of the Tornado programme – the final nozzle and thrust reverser – that McMurtry had his eureka moment, designing the touch-trigger probe. It was only when a Rolls-Royce customer tried to place an order for 12 probes that he started to appreciate the commercial value of what he had created. “I was busy with the day job, so I gave what I thought would be a go-away price – £350 each, serious money back then. But the customer came back and said ‘yes’. I needed help.”
McMurtry teamed up with John Deer, a colleague at Rolls-Royce, and set about establishing a company that could handle such an order. McMurtry would do the designs and drawings, while Deer would get them made. Renishaw had been born.
It was still a fledgling outfit while McMurtry and Deer were at Rolls-Royce,
as illustrated by an anecdote he tells. “John was doing all the business from a pay phone in reception in his lunchtime. We were caught out when he gave the number to a potential customer – when they tried to call us back we realised the phone only made outgoing calls.”
In a sign of simpler times, Rolls-Royce was understanding about its employees’ efforts to grow a new business. Indeed, it owned the intellectual property (IP) behind the probe. As McMurtry and Deer’s commercial activities continued, Rolls-Royce remained supportive. Deer left in 1974 and McMurtry in 1979, after making a consultancy agreement with Rolls-Royce a few years earlier. “They tried to talk me out of it. But Renishaw was paying me more than Rolls-Royce.”
IP agreements were concluded with Rolls-Royce, and McMurtry and Deer got cracking on building a future for Renishaw. And the world had started to notice. After one of its customers showed the probe at an international event, Renishaw had a surprise visitor at its facility at Wotton-under-Edge in Gloucestershire – Henry Sharpe, president of US metrology giant Brown & Sharpe. “In he came, with his bow tie and American accent,” says McMurtry. “He wanted to buy a probe. Usually you have to go out to sell products, but people were coming to us. We thought ‘our prices must be too low’.”
The company was flourishing. By the early 1980s, it had diversified into machine tool probes, delivering year after year of organic growth. The graphs looked good, and financially the company was settled. And it was hugely solvent. “We never had debt. There was never a year where we didn’t have money in the bank,” he says.
Such success attracts attention, and in 1982 a merchant banker knocked on the door asking McMurtry if he knew just how much the business was worth. “He gave me a long story about how it was better to have eggs in different baskets.” The banker was trying to put forward the benefits of flotation, allowing McMurtry and Deer to take money out and secure their finances in the long term. “The words he used made a lot of sense at the time, and he was promising a nice sum of money,” says McMurtry. The flotation in May 1983 valued the company at £42 million, with McMurtry and Deer retaining a controlling interest.
Looking back, McMurtry admits this probably wasn’t the best of moves. The company didn’t need the money, and in the long term he probably lost out financially. Would he make that deal again? “Hindsight’s a great thing,” he says, “but the answer is ‘no’.”
Nevertheless, Renishaw continued to boom, investing heavily in research and development that allowed it to innovate in several sectors. The company carved out an international reputation for quality across measurement, motion control, spectroscopy and precision machining. Its products were being used for applications as diverse as machine tool automation, coordinate measurement, additive manufacturing, gauging, Raman spectroscopy, machine calibration, position feedback, CADCAM dentistry, neurosurgery and medical diagnostics.
Everything looked rosy – until the crash of 2008. Suddenly, almost overnight, the very future of Renishaw was at stake. “The first half of the financial year in 2008 was fine. But during the second half of the year, we went into freefall. Some of our customers’ businesses reduced by 80% overnight. They went off the edge of a cliff. We started to suffer large losses every month. We couldn’t see when it was all going to end,” he says.
Even now, McMurtry looks shaken when discussing what happened around that time, especially when talk turns to the hundreds of employees who lost their jobs. “It was the first and only time that we have had to lay people off. Our figures were dropping, dropping, dropping: there was no hint of a kick-up. It was terrifying. I don’t ever want to be there again. I thought we were going to go bust – that’s why we took the decisions that we did.”
Then, towards the end of 2009, the market turned almost as quickly as it had disappeared the year before. Many of the staff that Renishaw had laid off were taken back on. Indeed, pre-recession the company had 2,300 employees; that fell to 1,850 – and now it is back up to 3,500. The vast majority of these workers are based in the UK, and many of them are highly-skilled engineers.
Now the business is fighting fit, and that brings other challenges. McMurtry says Renishaw has to work hard to ensure that it attracts enough of the brightest talent. The company takes a refreshingly proactive approach to recruitment. It takes on many apprentices, supports students through their degrees, and has a growing graduate scheme, too. “We work with schools, assist the science teachers and sponsor their brightest students,” he says. “Some of our biggest divisions are now run by people who we supported through such routes. Summer placements are available, too. It works like a long interview process, for both us and the students – it de-risks the whole thing.”
What are the other challenges in running the business? IP infringement is one, says McMurtry. Renishaw has won several high-profile legal battles against rival firms that have copied its designs. And strong patents continue to be at the heart of how the company goes about its business. “We have five full-time patent attorneys, and they are all battle-hardened,” he says, with a smile.
And then there’s spotting and developing emerging technologies. ALM is a case in point. Renishaw has worked up several patents in this area, and McMurtry sees the technology as offering huge potential. “There are going to be niches around additive layer technology that we can fulfil with our metrology expertise, and no doubt other companies will find their own niche. Where we are going with additive layer depends on the patents. But there is no question that it will be hugely disruptive – it already is in certain areas such as dentistry,” he says.
Where there is certainty is in manufacturing strategy. Renishaw has eschewed the well-trodden journey of outsourcing, preferring to invest in the UK. Three years ago it bought the sprawling former Bosch plant at Miskin in South Wales to secure long-term capacity, and it is building a leading-edge R&D facility at its Wotton-under-Edge headquarters. “We want to have control over our manufacturing – it allows us to gear up more effectively when necessary,” he says. “We are a high-value, low-volume producer. If it was the other way around, then China might make sense.”
McMurtry broadly approves of the government’s efforts to rebalance the economy away from services, pointing to R&D tax breaks and the formation of the Patent Box legislation as indicators of support for manufacturing. But he has a wish list of other things that could be done. He says there is too much emphasis on funding blue-skies research in academia, much of which is not properly protected and often doesn’t lead to the commercialisation of any product.
He would prefer the government to direct more funding towards successful companies, which are more likely to use it to innovate and create jobs. “This country needs a lot more Renishaws – high-value manufacturers. We need to encourage more British-owned companies such as us and JCB. And if there is a successful business, then let it spend its own money rather than taxing it and then inviting it to apply for grants.”
McMurtry says he is confident that Renishaw will continue to thrive. Now 74, he has no plans of resting on his laurels. He’s still an active man, regularly playing badminton, squash and table tennis. So, will he ever retire? It seems unlikely. “I’ve always enjoyed this job. And I hope I can continue enjoying it,” he says.”
UK footprint: Renishaw machine stop at Stonehouse in Gloucestershire
Home base: Renishaw footprint across the UK
Renishaw prides itself on being a UK-based manufacturer, insisting that shorter supply chains better suit high-value, low-volume products. It employs more than 3,500 people, many of whom are engineers, across more than a dozen sites.
Gloucestershire
New Mills, near Wotton-under-Edge – headquarters, with research and development and prototype manufacture.
Old Town, Wotton-under-Edge – spectroscopy products division, specialising in Raman spectroscopy systems for materials analysis.
Charfield, near Wotton-under-Edge – dental products division, neurological products division and group engineering software team.
Stonehouse – main machine shop for metal component manufacture, along with dental manufacturing unit where the company machines zirconia dental structure and 3D print metal structure using additive layer manufacturing.
Woodchester, near Stroud – main assembly plant, along with laser and calibration products division.
South West
Exeter – research facility at the Innovation Centre, Exeter University.
South Wales
Miskin, near Cardiff – 193-acre (78ha) site with 42,828m2 of buildings purchased from Bosch in 2011. Manufacturing operations including a machine shop, electronics assembly and assembly of the company’s additive manufacturing machine.
Midlands
Castle Donington – metrology software development team.
Stone, Staffordshire – additive manufacturing products division.
North
York – spatial measurement division (formerly Measurement Devices Ltd) developing laser scanning and surveying systems.
Alnwick, Northumberland – associate company (50% ownership) Metrology Software Products.
Scotland
Glasgow – Renishaw Diagnostics, developing systems to rapidly diagnose infectious diseases.
Edinburgh – research facility near Heriot-Watt University.
Aberdeen – office focusing on marine application products for spatial measurement division.