Bob Watson is a modest and understated Scotsman. He even apologises for a moment of unalloyed brashness when he allows his ruby red Audi R8 V10 Spyder to open up to 8,000 revs as it hurtles along an empty stretch of the M90 motorway towards Kinross. Jeremy Clarkson describes this beast as “bonkers fast” – and the massive acceleration pins a grinning, bespectacled Watson right back in his seat.
“It’s never been about the money,” he shouts above the powerful engine roar. “It never even entered my head. It’s about the creation. What has driven me in business is creating something that no-one has done before, or doing it in a different way than anyone has thought of before.
“Over the years we had done pretty well and we’ve enjoyed that. We’re a completely self-financing group of companies. I’m pretty pleased about that.” Bob is one of Scotland’s secret entrepreneurs; a rich man with a very low profile. Yet his Newgate Technology Group is a gem of a business. It has been a pioneer in the use of barcodes across the UK, and Bob invented a touch-screen system for use in operating theatres that makes a surgeon, anaesthetist and nurse’s job much less stressful.
After perfecting this unique data processing system, he has taken a back-seat from Newgate, turning his attention to bringing electric bicycles to Britain, and when he couldn’t find a suitable steel shed to store them in, he set up a steel shed company which now erects warehouses all over the UK“I don’t actually consider myself an entrepreneur, just somebody who does things.” says Watson, “but when I went to the United States and spoke to some business people I found that the fundamental difference between the guys who succeeded and those who didn’t was that the entrepreneurial types said when times are tough ‘I can still do this, but I’ve just got to figure out a way to get through the next week, month or year’.
Whereas, the other guy says ‘stuff it’ and gives up.” Bob Watson has never, ever, given up. A child of the 1950s, he grew up on the vast Murthly Estate in Perthshire where he developed a fascination for the objects, stuffed animals and curios collected at the 15th century castle by several generations of Highland lairds. His dad was the clerk of works and the young Watson roamed the farms, fields and policies where exotic trees and shrubs had brass plaques with Latin names, and information on where and when they were planted and collected. Watson, now 57, was interested in this sense of order and a wonder at how things worked.
This quest for keeping track on things would eventually define his career path. His grandmother and dey – or grandfather in Fife dialect – were a strong working-class influence. Dey was a self-educated coal miner in Methil who read philosophy and instilled in him a capacity for reading and inquiry. As a teenager, he devoured science fiction, listened to rock and roll music and tuned into Radio Moscow to staccato reports on the latest Soviet grain harvest. He was fascinated with the space race, admired President Kennedy and even his girlfriend – later his wife – was called Jackie. Jackie, who became a high school chemistry teacher, remains at his side in the businesses today. When his dad got a job with Perth Council, he moved to the academy there, and found his way to Wilkie’s Music House where a guy called Robbie taught him the guitar.
He showed aptitude and was asked to help Robbie with his pupils. The family then moved to Dunfermline and spindly, long-haired 17-year-old set up his first business, the Watson Guitar School in a rented room in historic Abbot House. The queues of would-be axe heroes soon helped him to put enough down for a deposit on a motorbike – and this would become a life-long passion, leading to him buying Steve McQueen’s bike from the film The Great Escape. Instead of going to university in Glasgow to study engineering, which would disrupt his guitar school earnings, he went to college in Kirkcaldy to do an HND in business studies.
Two years later, he landed a full-time job in Dalgety Bay in Fife working at the defence contractor Marconi, which had a manufacturing plant in Donibristle.
“My first job was as a progress chaser on the production line,” he recalls, sipping tea and now sitting in his converted farmhouse in Cleish, with its stunning views towards the Ochil Hills. Watson was a kind of human just-in-time delivery man, dashing from one part of the factory to another to ensure that all the bits were put together. He worked on top-secret military projects, such as the Mark 24 torpedo, the Clansman radio system for the army, and the improved firing control system for the Chieftain tank. This was cutting-edge British innovation because Marconi’s laser-guided system allowed the tank to fire its rounds as it moved rather than stop to aim at its target. There were other military hardware projects such as the nose cone for the Blowpipe cruise missile and, more controversially for Watson, an antipersonnel land mine designed simply to maim. It was an interesting time but he left to work for a new inward investor from America who had arrived in Silicon Glen, the mighty Burroughs counting machines company which had been enticed to Livingston.
“It was a leading electronic system firm supplying the banks with counting machines,” says Watson. “The American culture anticipated that you give them 100% of your life. I was very well paid – it doubled in three years – but I had one week off on holiday in that time.” Watson says Burroughs was never truly committed to Scotland and was simply here to make the most of cheap loans and government grants, but it expanded quickly from 120 people to more than 600.
But he was one of the first to be sent to Chicago on technology and advanced manufacturing courses and he learned a huge amount as a production manager in charge of material management. Burroughs was at the forefront of optical and magnetic instrumentation which could read thousands of cheques an hour. It was the dawn of the barcoding revolution.
“We were talking about automated materials handling in 1982 when no-one in UK industry was even thinking about this,” he says. “We had the first barcode readers in the UK. The barcode for me was the way to go.
You couldn’t do automated materials handling unless you found a way of saying where any component was.” Watson became expert in MRP2 – Materials Requirements Planning and Manufacturing Resources Planning – which boiled down to ‘Have I Got The Bits and I Have Got the Means to Manufacture the Bits to Put Them Together?’. In America, Olly Wight was the improvement guru of MRP2, which was radical change management in manufacturing – and Burroughs was at the forefront.
Bob Watson could see how its application was now transforming material requirement planning, which became a cost-saving management initiative in advanced manufacturing. But three years of a relentless give-it-all-to-us corporate culture was enough for him and he left to join either IBM or the UK’S ICL. ICL in Edinburgh made a faster offer and he accepted – much to the chagrin of an IBM HR executive who questioned his sanity. After Burroughs, Watson discovered ICL was in the dark ages – no-one started work until after 9.15am, for instance, yet it was supplying a large chunk of UK business.
“ICL didn’t know what to do with me,” he says. “They sent me on training courses, but their systems and software were five to ten years behind the Americans. I wanted to introduce barcoding to ICL’s customers and I wrote board papers but there was a lack of interest. Yet their systems did stupid things such as re-order minimum numbers between one and 100,000, when often you only needed a few widgets.
“The Japanese had systems that sent a single item. I could see the efficiencies that could be made and I was deeply frustrated by this.” A barcode is a series of a numbers. It requires a scanner to insert the code and a link to a database to make it effective. Barcoding meant that data was much more readily accessible and could automatically update a computer system, and this could ensure a new component was made and sent out. Supermarkets were well ahead of the industrial sector in their use to resupply their stores.
Watson says: “The barcode in itself was clever. But it was how you changed the way you recorded and used this data in advanced manufacturing that really interested me “ICL didn’t see it. I just couldn’t get them interested, so I said, ‘stuff this for a lark’ and I decided to leave. Of course when Fujitsu bought ICL the first thing they did was introduce a big barcoding system.” He was certain he could do a better job on his own. He was able to visualise a system in his head and knew he could make it a reality. In February 1988, Bob and Jackie set up Newgate Technology with two Amstrad pcs with 5.25in floppy disc drives that broke down a lot.
The business plan stated simply: “We will create systems for manufacturing companies which will track the progress of materials on the shop floor, and track which person works on these materials to assemble them through to the finished product.” Bob Watson understood that if you have all this information you are able to work out what’s happening in your business on a real-time, micro level; you can say what the total time of production is likely to be, and work out how much things actually cost to produce.
He employed a programmer and within the first few months they had £120,000 worth of orders. “Then, in 1989, the worst recession ever came along,” he says. “Within three months we were down to £20k. Every manufacturing company in the UK asked itself, ‘are we going to be here in a year’s time?’ – and there was no way they were going to spend money on our tracking systems. The 1989 recession was dreadful for us.” Watson’s recurring question was: “How the hell am I going to keep this going?” At one point he was £280,000 in the red, but he adopted a mind-set that said: “I know I can get through this, I just have to figure out how to do it”.
“The recession in 1989-1990 was very hard for Scotland because we still had a lot of manufacturing in this country,” he says. “They’ve all disappeared now and today everything is predicated on service. “I vowed then that this was never going to happen to us again. I wanted to be recession-proof.” Watson looked at industries that will always require maintenance contracts for the systems that he was able to put in. Increasingly, there was a focus on local government and the health care sector. He managed to persuade the Bank of Scotland in Dunfermline to support him.
“You have to fight,” he says. “If you can keep a positive attitude and talk to the bank manager saying ‘you can do this’, then this really can work for you. If you say to your bank manager, ‘if I prove I can do this one big thing, will you back me on the next bit?’ It’s step by step. And it took us four years to get on track again.” With a £20,000 bank loan, Newgate Technology’s business started to pick up in 1994, now with ten staff.
A breakthrough was when cataract lens company, IoLab in Livingston, took its system to track the sterile manufacturing of the lens and a chance visit from an NHS central services manager led to an introduction.
Watson says: “Although we’d been knocking at hospital doors, we weren’t getting anywhere because we weren’t a preferred supplier, which was ridiculous. But this NHS manager could see how good the system was and asked us, ‘can you apply barcodes to the manufacturing and reproduction of sterile services and the clean instruments for operating theatres?’” It wasn’t a problem for Newgate Technology. Precision stainless steel instruments are washed, brought in for repacking and then placed in an autoclave for sterilisation before being ready again in the theatre. Watson’s business made this easier using laser barcoding with Bridge of Earn Hospital, then Ninewells in Dundee adopting the systems.
“We progressed in various areas,” he says. “It opened doors for us and we were asked to apply the technology to operating theatres. Barcoding in operation theatres had been going on but I couldn’t see how it might work effectively. A surgeon wearing rubber gloves wasn’t going to pick up a barcode reader.” Newgate was experimenting with touchscreen tablets applications in 1998, long before the iPad. He bought an early US system and asked one of his software boffins to adapt it. For example, welders wearing visors and big gloves found it hard to pick up a barcode reader, too, so Watson invented a simple yes-and-no touch-screen that recorded the date and time of a procedure. “That design of walking up to a screen and pressing a big green button and knowing instinctively that the machine knew what you wanted it to do was a breakthrough,” he says.
“This emphasis on functionality defined the design of all our future systems from that point.” Since then the business has been working on refining and updating its systems, culminating in a continuing contract in 2005 to run the patient and hospital data for the whole of the Northern Ireland NHS area, linking all the hospitals.
The system is worth £6m, and Bob Watson feels Newgate Technology could adopt a similar system in Scotland for a fraction of the £200m spent on the current system that has failed to achieve similar outputs.
Today, Newgate Technology – based in Inverkeithing, Fife – is competing with the majors and has a turnover of several million a year.
The value of all of Watson’s companies is several millions of pounds, although he’s reluctant to put a figure on this. Managing director Ross Mackenzie who has been a partner of Watson’s for many years, and Pauline Walker, the finance director, now run Newgate Technology, while Watson – who admits to having a typical entrepreneur’s attention span – has been working on other ideas.
This restlessness has seen him moving into electric bicycles. “Six years ago I didn’t know what eBay was,” he says. “It was my son Adam who introduced me to it. I said, ‘show me how to do that’ and it was like a bolt of lightning. Here we have a huge 24/7 selling ability, anywhere. And it was like OK, what can I sell?” Watson wanted to sell something with mass appeal that fits in with various aspects of modern life. Health and fitness were obvious with people living longer but with their knees often giving out.
He says: “Fitness was an issue and it occurred to me that I was overweight and wanted to do something like cycle. But I was getting left at the bottom of the hill when Jackie and Adam were away cycling up the brae. And I was pushing the bike. Then I thought, ‘I can do something about this’.” He invented an electric motor to drive a bike wheel and had it made in China. He ordered a container consignment of bikes from China, and modified the design.
AlienOcean, named in homage to one of his science fiction favourites, became an internet bike brand, based in Lochgelly, with a shop opened in Kinross called the Scottish eBike Centre.
He has now sold over 3,000 bikes and his “Designed by Bob” logo has a cult following. “It’s only really scratching the surface because we need to show more people the value of using an electric bike,” he says. “We need to educate people that this way of travelling exists and it’s not a cop-out for fitness, but it can help you get back into cycling.” For Bob Watson it is a fresh direction, challenging his thinking, and making him do what he enjoys most in life – solving problems to make life a little easier.
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