With clients including the Ministry of Defence, and its creations used by more than half of US firefighters, product design consultancy Design Reality is making waves far beyond its north Wales home. Managing director Troy Baker discusses the “amazing” impact of Brexit, and why a rural location is proving key to securing talent
It’s a cold, sunny February morning and the roads around St Asaph are quiet. With just 3,355 residents, this historic settlement in Denbighshire, north Wales, is Britain’s second smallest city. But a modest population and sleepy demeanour belie the fact that this is home to some of the UK’s most innovative businesses.
Tucked away in an unassuming corner of the St Asaph Business Park is the base of Design Reality – the consultancy responsible for developing the General Service Respirator (GSR), worn by the British Armed Forces, among a host of other innovations for clients in a range of health and safety industries.
Today the business employs 26 staff, has gained a foothold in international markets including the US and Australia, and is on course to achieve turnover of £2.1m in the year to April.
This month the company will pick up a prestigious iF Design Award – an internationally recognised symbol of design excellence – for its work on Scott Sight, a groundbreaking firefighter’s mask with built-in thermal imaging viewer.
Indeed, Design Reality estimates 65 per cent of US firefighters now use respirators developed here in north Wales. With plans afoot to start making its own products, as well as continuing to design for established manufacturers, the firm’s owners are understandably bullish about the future.
The venture has come a long way since Liverpool John Moores design graduate Caroline Baker launched it in late 2000, with fellow graduate and now husband Troy joining the following summer. “Caroline’s passion was design and so was mine, we wanted to create a design consultancy, but we had to do what paid the bills,” Troy tells Director.
This meant operating 3D-printing machines for other companies – including Unilever where Caroline had spent a placement while at university – and teaching CAD (computer-aided design). “When we started Design Reality it was very meagre, we weren’t taking a huge amount, we were working from savings,” he adds.
A breakthrough moment came, though, when two men Troy had been teaching approached him after the course: “They said, ‘We’d like you to come to [military research base] Porton Down to have a chat with us.’ Within a couple of weeks I found myself there among a load of other consultancies, being interviewed to quote for a piece of work called the RGSR – the prototype version of the GSR.
“They showed me a product and said, ‘How long would it take you to do this?’ I replied, ‘A couple of weeks, there’s nothing hard about reverse engineering that,’ and they said, ‘Really?’ As I was driving back up the M6, I got a call and they said, ‘We’d like you to start straight away.’”
Design Reality would go on to be selected as the design consultancy to work with Scott Health and Safety, the firm which won the contract to manufacture the next generation of respirators for the British Armed Forces – it was the start of a relationship which would lead to a host of fruitful future projects, including the aforementioned Scott Sight firefighter’s mask.
Back then, though, the immediate challenge was a need for additional skilled help and leadership expertise. As well as bringing in their university peer Graham Wilson – now a director and shareholder – they turned to Caroline’s father Peter, a vastly experienced designer who had played a key role in the development of the SodaStream.
“We’d taken on this huge project but had no project management skills,” says Troy. “So we brought Peter out of retirement for the initial 15 months to teach us the skills, the pitfalls, to do all the paperwork and management – he gave us a huge amount of advice and guidance in the early days.”
As the project prospered and the business began to grow in turnover and headcount, Design Reality obtained a grant from the Welsh Assembly in 2005 to purchase its own 3D-printing machine – the first firm in north Wales to do so – at a cost of £100,000, allowing the team to develop ideas quicker and pursue new clients.
A glance at the company’s portfolio today reveals a fascinating array of innovations from 3D-printed mountain bike goggles to a hand-held device for measuring the viscosity of a patient’s blood – and maintaining this focus on health and safety, says Troy, has helped the business beat the effects of the last recession:
“When times are bad, people invest in gold, in commodities,” he says. “In the design world, it’s the world of health and safety, of medical [sectors]… the 2008 recession we didn’t even see, because we were in this industry that always has to be there. We’ve kind of exploded in the world of personal protection devices because we’ve pushed ourselves into that niche industry.”
On the subject of turbulent times, how has the company fared since the Brexit vote? “Brexit was amazing for Design Reality. We work in the US, Australia and China, a little in Europe but not so much – so from a consultancy point of view we became cheaper literally overnight,” he says.
“We have customers who pay us in dollars, so that’s good for us at the moment, and the companies that pay us in pounds through UK subsidiaries are using us more because they’re getting more for their dollar by paying us in pounds. Brexit has only affected us from the point of view that we’ve got busier.”
There has also been a boost for the wider UK, he adds, as using British suppliers is now viable where it was once inefficient: “On behalf of our clients we raise tooling all the time – and we do a lot of tooling out in the Far East.
“But now we’re looking to the mainland because the difference in cost has been reduced to within the range where you can make the decision based on ‘well, it’s local, it’s here, it’s in the UK’.
“China is still a force to be reckoned with, but only where labour is involved – when you look at [automated processes] as soon as Brexit hit, the divide moved to the point where we’ve had stuff produced cheaper in the UK than China.”
While economic climate changes have not been a challenge for the company so far, another perennial business bugbear – access to talent – has. Fighting with big consultancies in London for the best designers has been, he admits, a challenge – though the tide is turning: “There are an awful lot of people who believe if it isn’t in London, it isn’t in Britain,” says the north Wales native.
“But we’re seeing a shift, especially since around 2010, that there are more skills coming up north – and people are trying to get out of cities and enjoy the countryside. North Wales, for example, offers some of the best sporting activities in the country from mountain biking to surfing, from zip-lining to hiking in Snowdonia… We’ve had guys come from places like Bristol and Oxford and, as soon as they move out of the cities, they realise they’ve got a lot more disposable income and can enjoy life a lot more.”
Though work-life balance is key to Troy Baker’s leadership philosophy (“If my staff can’t do their work between 9am and 5pm, then we’ve quoted wrong,” he says), he admits that the company has also now changed its pay strategy to stay in the market for the very best people: “We’ve had to bring ourselves up in line with what London gets paid,” he says.
“But you can look at it the other way and say that we’re nudging arm to arm with London consultancies, but we certainly don’t have the same running costs of the business as a company down south.”
Indeed, the firm’s consultancy fee model has proved highly profitable (“our EBIT is about 45 per cent, well above any industry standard,” he says) and Design Reality is now moving ahead with investment in what has been a long-held ambition for the company – manufacturing its own products.
Having developed a wealth of intellectual property – including their own patented respirator system – the directors have launched new business, Core Protection Systems, with the aim of taking new products to market.
“We’ve seen a niche in the market that’s not been answered and we’ve spoken to our client who is potentially a competitor in the future – they accept the choices we’re making because we’re being open with them at every step of the way,” he says.
“Respiratory protection is a $20bn-plus business, and there are just nine key players in that industry. To develop a respirator would cost them millions, but as a design consultancy that has the knowledge and has been doing this for years we’ve come up with a low-cost competing product in an industry that nobody can break into at the smaller level – we’re going to be coming to the market with something very, very different.”
And with no plans to leave its north Wales home for a bigger city any time soon, the philosophy of this innovative firm is as fresh a breath of air as any inhaled by its firefighting customers.
Design Reality Vital stats
Founded 2000 by Caroline Baker, now the company’s financial director. Husband Troy Baker, now managing director, joined in 2001
HQ St Asaph, Denbighshire
Turnover £1.87m in the year to April 2016, expected to rise to £2.1m in April 2017
Key markets Australia, China and the US. An independent Design Reality office was established in North Carolina in 2015.
Products Include Celt, a tool for testing CT scanners and Balance Master, an exercise machine to help rehabilitation after lower limb injury or loss.
Advice to entrepreneurs “A hard lesson we learned was that quoting right is most important. You can under-quote when you’re cutting your teeth, and you won’t want that to happen again.”