An Interview with Will Butler-Adams: Cycles of success
Brompton Bicycle is a shining example of British innovation and entrepreneurship – a small company that became a little bigger and found itself able to take on the world. We meet Will Butler-Adams, the man who has kept the firm ahead of the chasing pack.
Everybody knows about Brompton bikes. At least, everyone who either lives in a city or travels by train to a city knows about them. They’re the funny little folding bikes that hardcore commuters ride from the station to the office to avoid using the bus or Tube.These ‘funny little folding bikes’ are, however, a major British success story and testimony to our design and engineering genius. They are a triumph of innovation and dogged persistence by their inventor, Andrew Ritchie, and of intelligent management and export success by the company’s managing director, Will Butler-Adams.
Butler-Adams is a remarkable businessman. Still just 40, he joined Brompton Bicycle at 28 following a conversation with a man on a coach, who turned out to be the chairman. When he mentioned that he was an engineer, the man said he needed someone to help run the company and invited him to the factory in Brentford for an interview.
It went well, even though he was required to ride around on a Brompton – an amusing sight as he’s 6’4”. He also met Andrew Ritchie, who was running the company having patented the design in 1979. Brompton was making a profit, but couldn’t make enough bikes. To Butler-Adams, who was running a modern £150m chemical plant for ICI in Middlesbrough, the factory seemed almost Dickensian.
But he could see the potential. Brompton had won The Queen’s Award for Export Achievement in 1995, so its product had international appeal. At the time, Butler-Adams was considering going to INSEAD to do an MBA with a view to running a smaller company of around 200 people. With just 24 employees, Brompton was much smaller, but with typical optimism he thought: “What have I got to lose?”
That was 2002. He became a director in 2005 and nine years later, Brompton is the UK’s biggest bicycle manufacturer with 230 employees. It sells 40,000 bikes a year in 45 markets, either directly to dealers (UK, Ireland, USA and Canada) or through distributors. In 2010, the company won two Queen’s Awards for Enterprise (Innovation and International Trade) – it is very unusual to receive two of these awards in one year.
It sounds straightforward, but as Butler-Adams says: “There have been challenges.” The first was to persuade Andrew Ritchie that his inventor’s eye for detail and need for control were holding the company back. Butler-Adams had to defy him and, though his ‘disobedience’ initially caused friction, it ultimately led to respect between the two. Unlike so many small business founders, Ritchie eventually accepted the need for change and, as Technical Director, is still integral to the company.
Butler-Adams insists that incoming managers need to understand the emotions and pride that are inherent in small, family-owned businesses. “You will fail if you don’t respect that.” But he also had to be honest and say what needed to change. Now, he sees his job as employing good people and encouraging them to move fast and take opportunities.
He is helped in this as Brompton isn’t listed and doesn’t have outside shareholders. In 2008, he brought in extra capital to grow the firm, asking friends and family for support and leveraging every penny. The company has been growing ever since, but is still facing challenges. According to Butler-Adams, one of the key issues in growing a business is that increased size makes you a target as those who have previously tolerated you notice your profits: “Once you stick your head above the parapet, you have to run very fast.”
Exports have been the principal source of growth, but this took a major strategic decision. The company’s main export market was the US, which was also where it made its highest margins. Butler-Adams felt the company needed to diversify its markets, not least because northern hemisphere demand was seasonal. Even though Brompton couldn’t meet the demand from its current dealers, he looked at expanding in new markets, such as Japan and China.
“To be honest, it really annoyed our dealers as it restricted their growth,” he says, “and margins were lower in new markets.” This leads to a core belief: “The key to success is to be obsessed by the product more than by profit. We make bikes and that is the key – we have to do it beautifully.” Today 78% of sales come from exports, still short of Butler-Adams’s target of 80%.
His approach to identifying new markets is refreshing: “We analyse their potential, but doing is so much more powerful than endless procrastinating analysis – the assumptions are usually wrong anyway. There is a role for market research, but we’re not swayed by it. I don’t need a consultant to tell me that folding bikes will be successful in Japan. Invest say £50k and don’t worry about the downside – get on a plane and go to some trade shows.”
He also speaks very positively of government-sponsored trade trips, although warns that you must already be committed to increasing your exports. “Don’t underestimate the huge theatre of well-connected, intelligent people itching to justify the network of embassies and consulates. They are a good tool – if you weave them into your existing strategy, they are only ever a good use of time.”
This raises the issue of having your intellectual property (IP) breached. He says it’s a risk everywhere, not just in China: “You have to assume the worst – if you have a good product, it will be copied. The key is to be faster and better than the opposition. IP is serious and should be defended, but the principal focus of a company should be to innovate and provide excellent service. There’s no point wasting too much time and money on lawsuits. Hit them hard every now and then to stop them taking advantage, but save your energy for innovation.”
Brompton focuses on its machinery and product quality as well as service. It recently opened a high-end retail outlet in Covent Garden, which it owns, and others in Milan, Amsterdam, Hamburg, Kobe, Shanghai and Beijing, which are licensed. These are proving to be very successful and show how a small British company with a clever, but relatively straightforward, product can stay ahead of the pack and take on the world.
Robert Hughes-Penney - investment director