Movers & Shakers interview with Mr.Ian Rhodes and Mr. Geoff McGrath - McLaren Applied Technologies

Published: 3 Aug 2015

Ian Rhodes (CEO of McLaren Applied Technologies)

Ian Rhodes began his career in 1983 as a mechanical engineer developing aircraft engines for Rolls-Royce.
In 1988 Ian moved to PA Technology, the Cambridge based consultancy specialising in innovation and technology development. He then moved to the company's health and life sciences department, remaining there for 25 years. During this time, Ian developed many new products and services for drug delivery, diagnostics, surgical devices and implants.

Ian progressed from lead engineer on multi-disciplinary development programs to senior partner and joint leader of the firm's health and life science business. He was responsible for turnover of approximately £60 million.
At the beginning of October 2014, Ian became the CEO of McLaren Applied Technologies.

Geoff McGrath (Chief Innovation Officer of McLaren Applied Technologies)

Geoff McGrath trained as a mechanical engineer, initially working in aeronautical, civil, chemical, petroleum and mechanical engineering. Gaining experience in all aspects of the field, from conceptual engineering through to business development for start-up and blue-chip firms alike, he later switched focus to the world of telecoms, media and entertainment.

He joined McLaren Applied Technologies in 2009 and has brought more than 20 years’ experience to bear on the company’s innovative and dynamic approach to pursuing groundbreaking conceptual design, development and engineering.
He is currently focused on developing and applying Applied Technologies’ specialist capabilities to a diverse range of subjects in the world of energy, pharmaceuticals and transport.

1. McLaren Technology Group has expressed a vision and strategy that is looking to diversify its business. What can you tell us about this strategy?

GM: We are a car company, but we're first and foremost a technology company and that’s why the future growth engine in the McLaren Technology Group is McLaren Applied Technologies. We want to be known as the best destination of choice for people looking to break new ground.  At Applied Technologies , we are literally capitalising on the conversion of data management, predictive analytics and simulation technologies developed for racing to deliver high performance design of products and processes for other industries. Our ability to adapt emerging technologies and a racing DNA allows us to fast track ideas and, consequently, helps us catalyse change in bigger organisations that know they need to innovate.
IR: The vision is the same that Ron [Dennis Chairman, of McLaren Technology Group] has. It is about becoming an iconic partner for specific areas of technology that people want to work with or partner with us on to help them develop their next generation products and services. It may even be about manufacturing some of the high value core components and devices that feed in to some of those products and services that our Partners then scale and globalise.

2. What is unique and visionary about McLaren Applied Technologies that can be spun-off for other industries? What are some of the key future needs and applications that the technology will address that competitor’s lack?

GM:  McLaren has developed world class expertise in predictive analytics, high performance design and technology development. This expertise, comprising of our ethos of constant innovation, attention to detail and determination to win, enables us to complement and improve already existing capabilities in companies and push their business to the next level.

Any action that gives actionable intelligence, or can be simulated can be analysed by us. That includes health data and analytics on the scale of professional sports teams or individuals. Being able to capitalise on the convergence of data management and predictive analytics is one of the key business that we're in.
IR: We are independent and motivated by the right financial, clinical, commercial and ethical principles to reengineer structures and address systemic problems by bringing in the art-of-the possible from a technological point of view. We create the next generation of products and services for our Partners.

3. Which industries do you think will embrace your products and solutions the most? What are a few ground breaking ideas (if any) that are being pursued as a direct result of your technology in other industries?  How will it augment certain industries overall?

GM: The markets we would expect to focus on will be health and wellness. I think after that we would be interested in smart products. It could be smart products in health, transport, energy and even consumer brands. Some of the new consumer technologies such as wearables are absolutely fascinating.

IR: I wouldn’t like to give the impression that we are all about analytics, that’s probably what some have picked up on. We do a lot of work on product design and we always had a philosophy of making the “intelligence inside”. So we have learnt through our sensing and analytics work about how to design a better product in the future. That is as relevant to sports equipment as it could be to medical equipment and future transport systems.

4. Regarding healthcare, is it more in the pharma area or is it more in the devices, or monitoring and IT? Where do you see the healthcare opportunities?

IR: The starting point for health in my opinion is with the payers and providers. Healthcare systems around the world are largely broken, bankrupted in one form or another and have serious cost. The days of having suppliers like pharma, bio-pharma, medical device diagnostics and IT companies developing new products and technologies and throwing them over the fence to the healthcare systems and expecting these systems to adopt them and continue writing bigger and bigger checks are gone. The healthcare systems can’t afford to adopt new technology on this basis anymore. We now have leading global technology firms working closely and collaboratively with the healthcare systems to reengineer care pathways in a way that they can adopt new technologies to generate better quality regarding patient and clinical outcome at lower costs. Looking at it simplistically,  if it were possible to integrate and industrialise the operations of the NHS in the way successful companies in, for example,  automotive, consumer electronics, food and drink have, the NHS could probably deliver what it is delivering today for 30 per cent less cost.  While this is never going to be possible on a top-down basis, I think we are the sort of organisation that can go into certain parts of the health care system, certain care pathways, certain therapy areas and help with the adoption of new technologies and new ways of working on a case-by-case basis.

5. How do you view potential Partners? Is it more in terms of companies or organisations?

IR: McLaren has been in partnership with ExxonMobil for decades now and we have got very substantial undertakings underway with KPMG and GSK. Those are all completely different relationships and we plan to add to those. We provide technology that powers products and services for all sorts of companies. We are agile and innovative and can develop quickly, our Partners have got the abilities to scale and globalise, they have got the network, the pipeline to customers. They own the manufacturing and the distribution, sales marketing and the aftersales support. They don’t necessarily own and can’t necessarily access in an agile way the new technology that is coming into their industry and is impacting them. Our key strategic decisions pivot around who we want to be closely associated with for the next 10 to 30 years.
GM: Additionally, I am very interested to establish a network of likeminded smaller start-up companies who share our vision about future opportunities. We like the sort of people who are focusing on future days and we may be working with venture capital to start new businesses. So we are looking to work with them in the spirit of an accelerator to bring these technologies to market.

6. Your alliance with KPMG is very interesting. Are they amping up their analytics portfolio with you in an effort to mitigate risks from technologies such as artificial intelligence that could carry out auditing with ease?

GM: KPMG is a really good long-term strategic alliance for us. Through the operational excellence work we do we are able to deliver services that change the way KPMG is doing business. We are looking at how we can create new levels of value through transformation of the audit process, improving quality and providing greater insight to management teams, audit committees and investors.

7. How does the business model work with McLaren Applied technologies? Is it a typical technology licensing strategy or do you have other unique revenue sharing agreements?

GM: It sounds like a service model but actually we are evolving a model of three phases. There is a high value initial ‘discovery’ phase, which is where we go in to find and understand what the real challenges are, we apply our design thinking to understand what insight is valued most. Then with Partners’ permission we develop a solution, maybe a prototype solution so everybody can understand what we are talking about. And then when we deploy we expect to share the reward. Most of our new business is done that way these days.

8. What geographies are you focusing on? Which markets are showing the most traction for such products and services?

GM: We are headquartered in the UK but we have the eye on the growth markets which for us means we go east before we go west. We like to place ourselves were there are clusters of talent and technology.

9. Where do you see the company in 15 years from now?

GM: We should create credibility through our track record rather than relying on race track performance. The aim is that if you look at Applied Technologies in 10 to 20 years’ time what you will see is a global technology company.

IR: More effective healthcare, more sustainable transport, more affordable energy, those are the sort of key things that we intend to be associated with delivering. The aspects of McLaren that are quite striking for me are the culture and the people. I have inherited 300 highly talented people working on fast growing technologies and the culture in which we live and operate and work is phenomenal. The vision is about being a good guardian with that culture as we grow through our work in a selected number of technologies and markets while maintaining and building on the quality and instinct for innovation.

3rd June 2015 - Interview by Sarwant Singh, Senior Partner, Frost & Sullivan

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