Breakthrough innovations, the kind to redefine products and services, are elusive things. We’re familiar with stories centred on epiphany moments, garage-based start-ups and entrepreneurs boosted by giant R&D budgets. But Olly Dmitriev’s breakthrough innovation – ultra-compact, low-vibration, very powerful and highly efficient compressors – didn’t begin with a lightning bolt or within an R&D lab. Instead, his journey started at London Business School (LBS) somewhere between the communal lounge, the local pub and the library.
Most compressors sold today were first developed 80 years ago. Portable models rate low on efficiency and high on noise and oil contamination. In 2010, Dmitriev decided it was time to shake things up by rewinding history.
“Innovation in compressors had been slow. My idea was to go one step back and question the status quo,” says Dmitriev, whose Edinburgh-based company Vert Rotors (Vert) designs and manufactures compressors that are two times smaller than similar products.
Vert has developed a genius conical screw compressor that’s improving everything from supercars and satellites to medical devices. The new technology removes vibration, improves efficiency by 35% and makes “the impossible possible”.
“I started from the basic principle of compression and went back to the core idea of conical geometry. Just like cars today have four wheels instead of three or six, people historically have selected designs which then become commonplace, but it’s useful to ask why.” By starting over and undoing decades of engineering, Dmitriev has developed technology that is currently wowing Fortune-500 customers worldwide.
But it hasn’t all been breakthrough plain sailing.
“The biggest problem when I started was that no-one would believe. Sceptics are the worst because they undermine your idea. They say, ‘It won’t work!’ But they say that because no-one else has done it,” he says.
On those dark days, Dmitriev looked for hope in just 1–2% of people who could see the innovation’s potential. Fellow elective classmate Takuma Baba was Vert’s first believer and investor. The second was business sage Ian Marchant, the former Chief Executive of SSE.
“Ian’s support came at the right time. I knew if I didn’t get the money tomorrow the game was over.” But Dmitriev’s “valley of death” moment and injection of capital from Marchant saw Vert emerge stronger and sparked interest with other investors and customers.
Today Dmitriev is focused on staying ahead of the ultra-competitive, ultra-precision manufacturing game. He plans to do it in six ways.
“My team consists of brilliant engineers – great talents in CAD design, CNC manufacturing and R&D work, and they produce parts that others say are impossible. We achieve tolerances of 1–3 microns.” In other words, it’s accurate work that requires a specialist team. So-called wiggle room is just half the diameter of a human red blood cell: by comparison, a human hair measures at a whopping 75 microns.
Dmitriev carefully handpicks his team to create a blend of expertise and personal chemistry. “It might sound strange but I’m trying to build a family and select team members on their skills and personality traits. We spend so much time together; we learn from each other.”
Dmitriev even invested in having one member trained to deliver psychological Belbin profiling. Richard Jolly introduced him to the team behaviours in week one of the EMBA-Global programme. “Now, we always run behavioural tests when hiring someone new. With lots of creatives we need ‘completer finishers’ to get things done!”
On a scale of one to 10, how important is having a great network in reaching your goals? For Dmitriev, it’s a 10. For instance, a friend of someone within the LBS network put him in touch his critical second investor, Ian Marchant. If they hadn’t, who knows where Vert would be today.
Dmitriev also sought advice from professors such as John Mullins, who sent him relevant chapters of his book, and hired independent strategist Graham Webb, also an EMBA alumnus, to help focus his ideas. Graham supports companies such as Vert to gain commercial traction. “He helped us pitch to Innovate UK, translating technical ideas into a language they could immediately understand,” says Dmitriev.
So far Vert has served client needs by offering bespoke problem-solving solutions. For example, a car manufacturer with an F1 division asked the team to produce a tiny, high-pressure, low-vibration compressor. In this case, they adjusted their technology to meet the exacting needs of the customer.
“All of our clients are Fortune-500 companies so when they say, ‘Can you make an impossible compressor for us?’ We say, ‘Here you go.’” The company has proven itself time and again and is now on the cusp of shifting its model from custom to serial. The serial business model will enable the team to manufacture high-quality products in larger quantities and will mark a new era for the firm.
A design-thinking mindset is part of Vert’s philosophy. “We have a direct and energetic style of management. We work as a team to solve technical challenges and simply do not accept 'no' for an answer,” he says. They’ve also invested in sophisticated, high-end machinery in-house, worth around £500,000, which allows them the flexibility to continually try and test new ideas.
The company has the capabilities – talent, skills, resources, machinery – to formulate an idea in the morning and produce a part on a computer-controlled machine (CNC) by the evening. To borrow one of Steve Jobs’ favourite phrases, the team is set up to iteratively produce “insanely great” things.
“We have an interesting mix of projects; everyone gets involved – designers run tests and testers feed into design, which means we learn at speed.” This hands-on approach cuts slack time and increases collaboration.
Vert has a global customer base, such as world-leading industrial giants or manufacturers of supercars. But everything it creates is produced in Britain. This core value is something Dmitriev hopes will cut through future competition.
“‘Made in Britain’ unites us as a team. We’re proud we don’t outsource anything. All around us we see old traditional firms declining, especially in Scotland where we’re based. Aberdeen is becoming darker by the day because companies are slowing down, production is closing and people are losing their jobs. We’re going down a completely different path.”
“I don't believe in growing through expansion. I believe in growing through specification,” says Dmitriev. About this Vert is resolute: it will grow through automation and efficiency, not through hulk-like low-quality production.
“The old-school approach of engineering is that as you grow you need to outsource manufacturing to China as it’s cheaper. Almost as if 100 people will help us produce 10 times more. But my approach is different. If we need 10 times more, we need to improve efficiency.
“Last year alone we increased efficiency in our factory through better machinery by 21 times.”
In a quest for breakthrough ideas, we too often forget to shape our competitive advantage. By zeroing in on what makes your innovation relevant, unique and exciting, you have all the essentials you need to step ahead of the pack.
In the meantime, stay competitive.