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20 MTR May 2006 these deep waters, Anderson is quick to point out that the system must be robust. "You have to deliver performance and enhanced capabilities without giving away the robust nature of the system," he said. The deployment and recov- ery of a vehicle at those depths takes a few hours, which is essentially "dead time". So you have to provide a high- tech, robust system that is able to stay down for extended periods of time. Controls technology is the core to Perry Slingsby Systems' products (vehicles and bespoke tooling). Process products are permanent equipment that are part of the function of a fixed facility with an independent or dedi- cated control system. The new business line, Controls & Process Products, focuses on the improvement of existing systems, the devel- opment of the next generation of systems and will enable research and development into ancillary and innovative subsea products and applications. A major focus of this has been on an advanced robotic arm, with the emphasis on improving the control. The ultimate goal: dexterity and controls that, as closely as possible, emulate that of the human hand. The Business of Technology The evolution of the undersea market extends far beyond the technical capabilities of the system. In a busi- ness sense, the industry is significantly changed from two decades ago, particularly in terms of the manner in which systems are developed and procured. "Everything we do, in some way, is managing risk," Anderson said. "The risk level of projects has increased, and shifted to suppliers, who must now take on much more commercial and tech- nical risk." He explained that 20 years ago, it was normal for PSS' customers to pay for the development of a project, but today the company takes on much of the risk to develop and deliver a system to a customer's expectations. "We must estimate well," he said, in an understatement. "Very few companies are willing to pay for it (product develop- ment) today." While industry insiders and lay people alike are often awed by the capabilities of underwater technology com- panies, focus for PSS does not stray from the fact that it is indeed a business, created to make profit and accountable to investors. In addressing the global nature of the business and of Perry Slingsby Systems, Anderson said "it's not the easiest company to run," with coordination and communication posing two of the biggest challenges. When Anderson took over as CEO two and a half years ago, he brought with him a management style that relies on direct com- munication on a regular basis to clearly define responsi- bility and demand accountability as the core tenant. "Three years ago, we had one model that was being sold across the board," he said. "But the drivers and needs for the oil and gas business, for example, are completely dif- ferent from defense." We had to recognize that we have a range of products that bridge many different markets, and the challenge is finding new applications for our old cus- tomers, and new customers for existing applications. While the diversity of the PSS product and service lines combined with its cumulative engineering experience are major competitive advantages, Anderson said that "evolved in everything but focused on nothing, can be a danger." To avoid complacency and move forward in the most efficient manner, PSS has created focused business teams within the organization, teams that are focused on win- ning orders, delivering systems and forward-planning for product and system lines sold to specific business areas, such as oil & gas, telecom, geotechnical and defense mar- kets. When Anderson joined the PSS team, his assessment of the company found many strengths — established prod- ucts, financial flexibility and engineering expertise — which he intended to leverage to the company's benefit. Simply by virtue of its longevity, PSS has outlived many of its competitors and has built a critical mass of products with major customers around the globe. But while steady business from large customers is a success, it can also spell trouble. "When you have as long of a track record as Perry Slingsby Systems, you have to guard against complacen- cy," Anderson warns. "You can get flabby if you're not out there fighting (for new business) every day." To complement its product lines and engineering know- how, PSS is able to offer a number of innovative financial models. For example, the company can help arrange financing, a feature that is particularly attractive to extend the PSS brand to new, smaller clients. In another move to help the company extend its market share, PSS has adopt- ed a new Tooling Rental program at key international locations. While PSS seeks to grow its product and service lines organically, Anderson also noted - but declining to elabo- rate - that "the industry is full of takeover opportunities right now, and the trick is to find the right one." MTR#4 (17-32).qxd 5/8/2006 9:52 AM Page 20
