11 January 2011

Henri Richard, chief sales and marketing officer, Freescale

Freescale's chief sales and marketing officer tells Graham Pitcher that he's working for a 'new company'.

A late substitute for ceo Rich Beyer at last year's electronica ceo roundtable, Henri Richard made some notable contributions, including his assertion that you should 'never waste a good crisis'.
What did he mean? "We've had to face a lot of challenges," he explained. "Alongside the economic downturn, Freescale faced structural problems and the downturn forced us to go back to basics and to work out where to go, where to invest and how to focus our effort."

And Richard is pleased with the results of the process. "There are now brighter skies ahead," he claimed. "Freescale is a different company and the greatest complement we have had is from our competitors, who say Freescale is different. When they take notice, it means we are doing things right."

Freescale has something of a chequered history. Its was Motorola's semiconductor product sector, but was spun out in 2004. Then, in 2006, the company accepted a $17.6billion offer from a consortium led by Blackstone Group. That purchase was one of the largest private buyouts of a technology company and one of the ten largest buyouts of all time.

The move saw Freescale ending up with a large amount of debt on its balance sheet, just as the market turned down. Freescale, along with fellow private equity company NXP, were seen as being potential casualties. But it survived and the debt is being managed. "We're improving revenues and earnings," Richard observed. "The debt is still important, but it isn't a topic of conversation now."

Reformatting companies is never easy, particularly when they are the size of Freescale. "We have lost a lot of people, we've made some difficult decisions, but I have to say I feel optimistic about the future," he said. "We are getting more design wins and the company has regained its sense of winning."

Richard joined Freescale a matter of months before things started going wrong. "I looked at our customer relationships and the depth of the product portfolio, so I wasn't concerned about Freescale's continued existence. But I had no expectations."

Now, Richard says most of the changes have been done. "We've lost certain product lines and have refocused on market segments where we can be number one or number two."
But the process was not without risk. "Customers in some key markets were concerned about whether we were serious or not," he recalled. "But we've made progress in terms of execution, quality and so on, and 2010 is likely to be a record year."

Freescale has not only taken a look at its portfolio, but also how it goes to market. "My main focus now is growing our distribution business. Growing our channel business is a 'natural' and we probably haven't spent as much time on that in the past as we should have."

Richard also pointed to a refreshed portfolio. "We needed to address some gaps and have done that with Kinetis (the ARM Cortex-M4 based mcu range), a refreshed Coldfire line up, plus the i.MX range of application processors and our sensors."

Richard also believes strongly that Freescale needs offer system solutions. "I came to Freescale from the pc business, where if you don't have a solution, you're nothing. I'm trying to create an environment where we can bring a richer set of reference designs, more tested and proven solutions that include software. We're making a significant transformation towards solutions that include software. Before, our partners have been good at hardware, but future success will come from their understanding of complete systems. Solutions will not be complete until the software works."

Richard also appreciates the importance of the web. "I want to be number one online," he said. "Semiconductor company engagement models are changing rapidly. Young engineers don't need personal contact; what they need is access to most of the information they need online. So I'm spending time beefing up our online presence and developing tools that make an engineer's life easier."

One of the things for which Freescale has justifiably been proud is its investment in R&D. "Through the downturn, it was the one budget we didn't touch," Richard asserted. But he admitted there is less R nowadays. "There's a rebalancing, largely because we don't need to maintain our own process technology. But in areas like sensors or 64bit PowerPC, we still have hard core R&D. Today, it's about making sure the 'R' part is addressing technologies which are fully differentiated and not spending the money on reinventing something. But the number of patents granted is still a corporate metric."

Now, the tighter focus on D means any project with a timeline of more than a year is questioned to make sure it's right. "We're also trying to develop derivatives and multiple revenues streams from our research efforts," he added.
For the future, Richard is looking forward to the company going public again. "When the market is ready, it will be a good thing," he concluded.

Graham Pitcher

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