Richard Longdon, CEO of Aveva

Published March, 2013. Original article here (£).

longdonThe Megabuyte interview: Richard Longdon
Often when Richard Longdon meets people at social gatherings they don’t really get what he does for a living, even after it’s been explained to them. After all, what goes on at Aveva, the international engineering design software development company, is hard to compress into a soundbite. Not that this matters all that much to Longdon, though: “What people do is kind of irrelevant really, isn’t it? That’s just their job. You don’t like somebody because they are the CEO of a company. It’s about what they are like as a person.”

This could be an easy thing to say when you are at the top of your field, but Longdon seems to have a knack for listening to people: “My life revolves around talking to people in the business, to our employees, to the customers, and the shareholders and investors.” And this includes his assistant and the receptionist too, who tells me how friendly “Richard” is as I’m waiting for my taxi back to Cambridge train station, after the CEO in charge of 1400 people has drawn me into chatty banter far beyond what should probably go to press.

Longdon is working from his Cambridge office this week, but the international footprint of the world-class player in the software market for the power, plant and marine industries means the CEO is often on the road. “We just had our budget planning week, where the key financial stakeholders in different parts of the business from all over the world tell us what is happening, and what they expect they can do next year. […] It’s an interesting week because you get to speak face to face to each person in each division around the world, about is happening to them, what the critical issues are for them, what people and additional resources they need for next year.”

Balancing innovation
Aveva celebrated its 45th anniversary last year, and Longdon has been at the helm for the last 14. But his history at Aveva goes back to 1984, when he joined the process products divisions, and headed the German office for a while before returning to the UK as part of the 1994 management buyout. Aveva’s solid financial performance is a testament to Longdon’s ability to keep the company innovative, which includes strategic acquisitions. Aveva’s 3D products are now gaining traction, boosted by last year’s acquisition of Bocad for its structural detailing software, Global Majic Software for its visualisation technology, and Z+F for its laser scanning software.

“The exciting thing about global managing, and generally this is true with high-end visualisation too, is that you want to innovate with a small group of people. If you try to do it with a lot of people it will be really slow. You have to keep refreshing your ideas,” says Longdon, before telling the story of how Aveva had a 3D visualisation supercomputer to show customers back in 2000, which at the time felt like a sci-fi as you stepped inside a virtual environment. Except that people hated it: “Customers couldn’t get to grips with it, it made people feel sick, and you needed a million pound computer to make it run fast enough.” But now the technology has improved, cost has come down, and people are more familiar with the general 3D idea: “But while 3D computer graphics you get at home look flashy, it’s just the skin. Our 3D models have got masses of data behind them. […] We are moving objects around, and you can click on one and say, ‘Ok, tell me 100,000 things about that object.’ It’s a different ball game.”

While the initial 3D experiment at Aveva didn’t yield much financial reward at the time, Longdon admits part of the reason they did it was to stir up attention. While the industries buying from Aveva are “really, really conservative”, they face just as much pressure to remain cutting edge. This means Aveva’s job is in part to take customers forward at a pace they can handle, and this may mean introducing a concept such as immersive 3D a decade before the big push: “Customers want us to be innovative, but they don’t want us to give them anything that isn’t tried and tested.” The Cloud is a classic example: when first hearing about it, many of Aveva’s customers would flat out reject the idea of keeping data ‘out there’, but now they are starting to get onboard. “And if we hadn’t been doing any work on it, we wouldn’t be paying the game now. We have to try and predict, tease them with ideas and say, ‘We think this is quite good, what do you reckon?’ And often they will say, ‘No, bad idea, don’t do that!’ Then two years later it will be the best thing since sliced bread.”

So what’s Aveva’s secret to predicting which are the ideas that will kick off in the future? Longdon thinks it’s staying close to the customers. Building a direct sales channel between the company and the customers is one of the things he is most pleased with from his tenure at Aveva, which previously mostly used agents: “We spend a huge amount of time on customer clinics, and workshops with customers trying out our ideas. There has never been a piece of technology where we haven’t had industrial partners working with us before it ever saw the light of day.”

This sort of collaboration can be a lot of fun for Aveva’s employees, and as a former engineer, Longdon understands the value of giving people an amount of creative freedom. Aveva uses innovative work techniques such as Scrum to break through hierarchies, but still, with R&D happening in 15 separate locations, projects need strict managing to make sure they join up at the right time. Longdon acknowledges an ongoing challenge is to foster a feeling of cohesion as the company grows: “We learnt a lesson about this when we first started outsourcing to India, when we didn’t tightly manage the outsourcers. […] I think we have become pretty good at developing products in multiple locations and bringing them all into one unified source.” Video conferencing is a vital tool to achieve this, as was the case during a large marine development that was recently completed by teams in Cambridge, India, Sweden and Korea.

Unfinished business
Anyone who becomes an Aveva employee gets a trip to Cambridge, whether they be a marketing assistant from Beijing or the new head of America. Longdon meets them all during their visit, which includes learning about the company culture and providing feedback to the management. And then they all go to the pub. It must foster loyalty, I point out: “Yes, it shows you care enough to try to make them feel part of the family.” But is loyalty the reason he has been with Aveva for 29 years?

“No, not particularly. It’s more that I still feel there is a lot of opportunity, so it feels like the job is never done. But I had never stayed in a job for more than three years before I came here. […] I knew about the business when I was in engineering, and though that company could be interesting. I took a pay cut, gave up my company car and came here.” But did he think he would have the big seat? “I didn’t think I would be CEO, no!” Longdon laughs. “But it has worked out rather well. It’s different all the time. Always new challenges. Either we’ve got an acquisition opportunity, we are developing a new product, or we have hired a different group of people that bring more diversity to the business. You can see it growing.”

This is Longdon’s key motivation for sticking with Aveva after all this time: “We have taken a company that, when I joined, should have been way more successful than it was. It was a government research laboratory with fantastic technology, but it was massively under-exploited and that was a real frustration for me. We have being playing catch up for a long time. Having got to the position we are in now, I think we could become a much, much bigger company.”

Longdon views Aveva as a classic case of a privatisation done badly, “in terms of giving rights to people that should never have had them to sell the product, which undermined the company and locked us out of key markets as they were starting to really take off”. Our conversation trails off to Cambridge’s start-up arena, where Longdon finds it disappointing that so few make it to the stockmarket: “If I were starting a tech company today it wouldn’t be in the UK. Too much legislation.” Longdon has previously spoken to the press about the possibility of Aveva leaving the UK over the red tape issue, the details of which he will discuss at length. But how serious is he?

“Would we actually move away? We think about it from time to time. We would still have this office in Cambridge together with all the people here, and would just relocate the headquarters. But the company is becoming more and more diverse at management level. […] Businesses like us want to be successful on the global stage. We just happen to be in the UK but it is not a big driver for us. The big driver is Asia.” This is not because Aveva doesn’t want to pay tax, emphasises Longdon, but due to regulation: “Our future competitors are going to be mostly American or Asian businesses, so we want to be in a place where we can be the most competitive.”

In the fast lane
At 58, Longdon will hit his retirement age in four years, but reckons he may keep working: “But my lifestyle is not conducive to living a long time!” He jokes, because he loves cars to the point he is running out of garages. He reluctantly gives me the number of vehicles in his possession, as he doesn’t want to come across as just being in it for the money. There’s a photo of one of the Aston Martins next to the wall of awards, he has a Lamborghini, couple of motorbikes, a boat. He is part-owner in a pub chain, he likes skiing. “I am just mad keen on life, really.”

Longdon reckons he may become a Chairman one day, but it’s not something he spends any time thinking about. Asked about mentors, Longdon notes Aveva alumni Robin Lee, who was part of the MBO, and Richard King, the first Chairman following the MBO: “King is a terrific guy. We naively thought we were picking our Chairman when we went to interview him for the role, but he said, ‘You think you are interviewing me for the job, but I am seeing if you are good enough to have me!’ He saw us through some really difficult situations.” Longdon pauses for a moment. “To be honest, being a CEO can be a lonely job sometimes, because you can’t cry on anybody’s shoulder.” The Chairman is an exception to this, he adds, as long as you have a good one, like Aveva does again now with Phil Aiken. “You have to lead from the front and give the impression that we are going to fix this, even if in that moment you don’t know how. […] You have to be good at being self motivated. You have to get up every day and get back to the fight.”

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