Sinclair and the 'Sunrise' Technology: The Deconstruction of a Myth (6 page)

As a result of minimal cash flow from the television, and increasing Japanese penetration of the calculator market, particularly at the budget four-function chainstore end of the market, the NEB found that its initial investment hadn’t turned the tide for Britain’s answer to the canny Orientals. Despite Lord Ryder’s departure from the NEB, losing Sinclair a personal ally, and his replacement by Sir Leslie Murphy, the decision was made to continue to support Radionics. This was done by means of a further £1.65m. of equity purchase, giving it control of the company with a 73 per cent stake in July 1977. There was also a £1m. loan facility extended, of which two-thirds had already been taken up by the end of the year.

Sinclair was now out of the driving seat, as the agreement on this tranche of taxpayers’ money required him to take on a managing director who would have effective control of the company. A buy-back clause in the contract would however allow Sinclair to regain control if profits exceeded £3.5m. a year for any two out of three consecutive years. He had sufficient confidence in the television and other products fermenting in his mind to declare publicly that this was ‘a tall order, but not impossible’ (Guardian, 13 December 1977). Privately, it must have been during this period in which he was subject to the state’s appointed representatives that he decided to cut his own losses and start afresh. That Sinclair had a certain pride in, and commitment to, Sinclair Radionics, the company he had founded and built up, is not the point. The NEB equity purchase made him a minority shareholder, so diminishing his control, bringing in constraints on his activities and making him answerable to others in a fashion to which he was unaccustomed and hostile. Sinclair Radionics was still ‘his’ company, accustomed to his style, and relying on his ideas and the skills of his technical team for future money-spinners. The conflict of styles of management, cavalier versus corporate, is the major emphasis of this chapter since it illustrates the Sinclair phenomenon in a variety of ways.

The hope for the NEB was still that the miniature television would save the company. The Sovereign calculator and the Cambridge series were being produced, but although further calculator models were launched in the next year or so, the Japanese assault led by Sharp and Casio was taking the market by storm. Their production standards, manufacturing and marketing capabilities, allied with their ability to engage effectively in the cost-cutting tactics necessary to expand a company’s share of a mature market, had eclipsed Radionics.

The company Sinclair had created then employed some 300 people, including the women on the calculator and television production lines, who made up around half of the total workforce. The technical staff directly involved with basic research numbered around 15, more than half of them on the flat-screen project. There were 25 or 30 technicians, draughtsmen and engineers concerned with product development and production processes. The movement of production in-house for these products, rather than solving quality problems, merely ensured that there were no outside contractors to blame. The justification for accepting the rate of returns that lack of production standards and quality control ensured was the ‘no-quibble’ replacement/repair guarantee. For any product sold in the shops, rather than through mail order, and especially for products exported, this is not a solution likely to endear itself to either the consumer or the retailer. It also ensures that the company’s reputation declines rather than grows.

Nicholas Barber was appointed to the Radionics board to look after the NEB’s interests, and a managing director was sought who would be acceptable to both parties. Barber took the role of acting MD in the meantime. He found a discrepancy between the NEB’s intent to back high technology and the idiosyncrasies of the Radionics set-up:

Certainly we [the NEB] were investing in Clive Sinclair, but we don’t back individuals or magic inventors with black boxes, we back companies. I think that one or two ‘i’s needed dotting and ‘t’s crossing in the accounts at that time. (BBC Radio 4, 18 January 1978.)

After a couple of nominees had failed to become established, a likely candidate was found. Norman Hewett was on the job market from his position in charge of GEC’s heavy cables division, and after approaching the NEB he was appointed to run Radionics. He recollects that:

I went to see Sir Leslie Murphy at the NEB, and he said that this company had had some ups and downs and technical problems in the past. In his view Sinclair was a brilliant chap technically, but he probably wanted some help on the management side, and that they had at the moment a wonderful product, a miniature TV.

It sounded interesting as a challenge and I had dabbled with a Sinclair calculator, although it did go wrong and I should have been warned, perhaps. I went along and got on well personally with Sinclair in the discussion ... Although he obviously didn’t really want anybody, he thought we could get along. I suppose he thought any sucker would do and this one appeared less obnoxious than some.

Although I had the mandate to try and improve the management and financial structure, it was put to me that I had to do this and keep Clive sweet, since he was the kingpin from the inventive technical point of view. (Interview, 16 October 1985.)

However, the official version of the story has it slightly differently: ‘
[Sinclair] was not a little surprised when the NEB appointed Norman Hewett out of the blue.
’ (Rodney Dale, The Sinclair Story (Duckworth, 1985), p. 81.)

It is obvious that the NEB, via Nick Barber, was aware of a potential problem in putting Sinclair into a subsidiary position, not only in terms of his shareholding, but in terms of control. The couple of Barber quotes below illustrate the point, and also a favourite description of the time - buccaneering. That piratical adventurers should be an appropriate analogy for people perceived as the mainstay of a company into which millions of pounds of the taxpayers’ money were being poured seems surprising, but perhaps represented an unconscious or repressed awareness of the truth of the matter.

One has to be careful to strike a balance between systematic management disciplines and the buccaneering spirit that has given the firm its strength. (Nicholas Barber, quoted in the Observer, 30 October 1977.)

We have tried ... to be very careful in this case [Radionics] to try and find the balance between introducing some systematic management but not stifling the buccaneering spirit. After all it is that which comes first, and I’m not just talking about Clive here, but there’s a marvellous team of people at Sinclair, and they haven’t come to work for that company for nothing, they’re excited by that environment. (Nicholas Barber, BBC Radio 4,18 January 1978.)

Let us note here, and then pass on, that Sinclair’s notorious temper, and the undoubted loyalty he inspires in his chosen associates, may well have played some part in these views, since they were expressed after some time spent dealing with Sinclair. The buccaneering spirit had not managed to come to any accommodation with the need for managerial control during the rollercoaster ride of Radionics’ growth, even if it was perceived as a true need, which is doubtful. As far as management goes, the answer is that there was little evidence of it on anything other than a pragmatic level. Sinclair’s participation in all aspects of the company was pervasive, but unsystematic. As The Sinclair Story expresses it:

The company had grown very quickly - too quickly. There was no real management structure, and though Sinclair is the first to admit that management was - and is - his weak spot, self-flagellation is no solution to such a fundamental problem. He had not seen the need to reorganize the company as it grew ... Sinclair knew little about managing people, production lines and stock control; he was trying to be in charge of everything himself: design, development, manufacturing and marketing, (p. 78.)

For a company that at its high point had touched a turnover of £6.3m. and been one of Europe’s biggest calculator producers, the management expertise was minimal. Sinclair has indeed consistently, throughout his career, admitted (in what he presumably hopes is a disarming fashion) that management is his weak spot:

[At Radionics] I didn’t know how to start recruiting management. (Management Today, March 1981.)

It was impossible for me to do both the long-term planning and run the company on a day-to-day basis. I had always recognized the need for a professional managing director ... There are plenty of good professional managers around; the only trouble for us was getting one when we needed it most. (Guardian, 13 December 1977.)

After the NEB came in [in 1976] it was clear that we needed a managing director to run the company day-to-day. I wanted that as much as the NEB. But it was very difficult to find someone. (Financial Times, 29 September 1978.)

Such problems have been encountered and overcome by many lesser companies that started out as one-man bands and went on to success. We should remember that at the point we’re talking about, Radionics had had a turnover greater than £1m. for four years. If we take this as an arbitrary point at which a company chairman uninterested in performing management tasks might well have looked hard for an efficient managing director, we are entitled to assume that the problem was not one of identifying suitable candidates, but of coming to terms with delegating control. When asked about Sinclair’s repeated statements on his own lack of managerial capacity and the company’s need for it Norman Hewett responded:

Well, he’ll say that whenever it suits him ...

So he thinks basically that nothing is beyond him, and that he can run a business?

Yes, I would hazard a guess that, apart from the technicalities, which are pioneering, frontiers of knowledge and so on, which are hard and worthy, therefore, he thinks the other aspects of business are basically mundane, known, and the proper business of hired functionaries. It isn’t so much that he can’t do it, it’s more that it’s not the sort of work that’s worthy of him.

So why doesn’t he get efficient managers?

You have to understand that he doesn’t understand the price you have to pay to acquire and use these people ... he doesn’t appreciate that it’s one thing to have a butler, but another to live up to the style of life that will justify you having one. It’s no good having a butler and insisting on running into the kitchen, grumbling about every course and bringing it in yourself. In other words, he’s not willing to acclimatize to management. (Interview, 16 October 1985.)

Put more bluntly, the Observer (30 October 1977) probably had it right:

Clive Sinclair, left as chairman to run the research side and chart the overall course of the firm, says he had always planned to bring in a professional to handle day-to-day management. Nobody disbelieves him, but, says an associate, ‘If it hadn’t been for the NEB’s influence, he would have ended up treating Hewett as an office boy.’

Norman Hewett brought with him into Radionics his financial director from GEC, Derek Holley. The pair of them set to work to bring, if not order out of chaos, then information and structure out of an idiosyncratic jumble, which had no longer the justification of making money. Derek Holley recollects the initial problems:

Nick Barber had really sorted Clive out. He’d spent about four months [at Radionics] and had sorted out all the problems that Clive had created, like all the little special people that were on the payroll, the family and all that. Typical small family business stuff. Then we had the poet who was on the payroll, George Barker ... he was some distant relative of Clive’s, but this was part of Clive’s general image, that he liked to be seen to be helping people ... He was given a retainer fee of £1000 a year, paid quarterly. I can’t remember what the justification for it was, he was just paid it, and it was part of the costs of running the company. (Interview, 13 November 1985.)

Exercising poetic licence in advertising copy perhaps? More potentially embarrassing for a subsidiary of the NEB, set up by the Labour government, was the £1000 donation to the Cambridge Conservative Party. This was paid once a year by standing order, and escaped Holley’s scrutiny until after the payment had gone through. The problem was solved by Sinclair paying back the money to Radionics, and making it a personal donation. Such staunch support for political principles would be rewarded when the wilderness years of Toryism were ended.

Holley had other problem areas to sort out in the realms of financial control:

The thing I stopped when I got here was that, in this immediate vicinity of St Ives, any employee of Sinclair, and in fact people who weren’t employed by Sinclair, could go into virtually any garage, any restaurant, any pub ... and charge it to Sinclair’s account. There was no control whatsoever. Again, it might have been set up with all good intention, which I believe it was, but it had grown like Topsy, and there was no control, (ibid.)

Such systems, or lack of system, had remained unchanged throughout the growth of Radionics from a family firm to a multi-million-pound business. Derek Holley attributes this to the type of personnel Clive chose:

Because of the nature of the man, the people he employed were of a similar nature, in respect of their business dealings, so therefore they had no incentive to get these systems changed, because it suited them to operate that way, because they were exactly the same as Clive. So you had sales managers, production managers, research and design managers all of a very similar ilk, none of whom wanted any constraints on their operation. So they didn’t want to have to sign a petty-cash voucher or raise a purchase order when they wanted to do something, (ibid.)