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Be like Burnley, a hotspot of innovation and enterprise

September 2, 2013

Perhaps necessity and hardship is the mother of entrepreneurship after all, rather than inspired thinking – I say this as Burnley, a small Victorian mill town in East Lancashire, with pride and passion in its heart, has been named as the most enterprising town in the UK by the Government for its pioneering culture and economic prospects

The Lancashire town won an Enterprising Britain Award announced last week by the Department for Business, Innovation and Skills. Burnley is pulling itself up by its own bootstraps. With a heritage of graft and enterprise, it is one of a handful of Lancashire towns where more businesses are being created than are closing down.

The town was praised for its ‘Burnley Bondholders’ scheme, which brought together 125 local firms to promote the town as a place for business and has attracted £10m investment. The scheme is reinvigorating the local economy and helping to change perceptions. Burnley is well on its way to forging an international reputation as a centre of excellence for manufacturing, particularly in the aerospace industry.

Like many Northern towns, Burnley has got a great sense of identity. When it comes to the epicentre of entrepreneurial vigour, Burnley might not seem to have quite the glamour and hi-tech attractions of London’s cosmopolitan Shoreditch, but do not be fooled by the London-centric self-publicists, the Bondholders scheme demonstrates that collaborative thinking can make a real difference, and it doesn’t always have to be about digital this-and-that. This accolade puts us on the map as a place where enterprise and innovation are thriving.

This recognition follows the success of Dave Fishwick, who simply calls himself ‘Dave from Burnley’. Dave achieved success manufacturing and selling minibuses, and sponsors a stand at Burnley FC. However, when he saw local companies struggling to secure funding from traditional lenders as the credit crisis hit, he set up the ‘Bank of Dave’, a peer-to-peer lender, to plug the funding gap. Check out http://www.burnleysavingsandloans.co.uk/ and http://www.channel4.com/programmes/bank-of-dave/articles/all/meet-dave

It’s great that we’re the most enterprising area in the UK but it’s only the start. It reflects what’s happening in the town but it’s nowhere near the end of the story – for example, work is underway to create an innovative aerospace ‘Supply Village’, converting an old manufacturing site that was symbolic of Britain’s industrial decline into a shining high-tech manufacturing future.

To fully appreciate the enterprising culture of Burnley and Lancashire today, we must look to its past to understand the role it played in what is arguably the single most significant event in our history, and the start of entrepreneurship – the Industrial Revolution.

The Lancashire textile industry is one of the enduring images of the Industrial Revolution. We see thousands of workers beavering away in tune to vast machinery, hear the deafening clatter of the looms, sense the air thick with cotton, feel the heat and the crowds – men, women and children pouring in and out of factories to the sound of the factory bell, under the beady eye of the factory owner, and swarming through the streets of the newly expanding mill towns.

Danny Boyle’s 2012 Olympics opening ceremony reminded the nation not only of the power and money that stemmed from the Industrial Revolution but also of its great cultural impact. Lancashire was blessed with a dazzling array of serendipitous boons that an inventive people were able to exploit.

There are many heroes in the Industrial Revolution and Lancastrian heritage relishes the larger-than-life inventors and entrepreneurs such as Hargreaves, Arkwright, Kay and Crompton, and their inventiveness that created the technical innovations that led to mechanised textile production.

An accident is said to have given Oswaldtwistle born spinner James Hargreaves the idea for the first mechanical improvement of the spinning process. In 1764 he noticed an overturned spinning wheel continued to turn with the spindle vertical rather than horizontal. This gave him the idea that several spindles could be worked simultaneously from a wheel in this position. He developed a version with eight spindles for use by his own family, immediately raising their output eight times.

It acquired the name ‘spinning jenny’, after Hargreaves’ daughter, who gave him the idea when she knocked over her spinning wheel. He patented his device in 1770. By his death in 1778, the latest versions of his machine worked eighty spindles each – and there were 20,000 jennies in use.

This was still a hand-operated mechanism; the next development was the application of power. This was developed by Richard Arkwright, whose innovation was drawing out the cotton by means of rollers before it is twisted into yarn. He succeeds first with a machine worked by a horse, but two years later he successfully applied water power, with the result that his invention became known as the ‘water frame’. It lead to an immense expansion of the cotton industry.

The technologies of Arkwright and Hargreaves complemented each other for a few years until the merits of each were combined by Samuel Crompton, who takes the final step in the evolution of spinning technology. He observed the tendency of the spinning jenny to break the yarn, and he improves this aspect of the process by a machine, which he perfects in 1779, called the ‘mule’ due to its flexibility of spinning almost every kind of yarn at considerable speed.

Lancashire’s damp climate (some may call it rainy!) was perfect for maintaining the moisture in fine cotton yarns, whilst the abundant supply of water via Pennine rivers drove water-powered mills. Twenty-nine of the first 35 steam driven engines were installed in Lancashire. By the end of the C19th century, Lancashire mills accounted for 25% of Britain’s entire export trade.

Lancashire’s entrepreneurs and enterprising culture were crucial in Britain’s Industrial Revolution and by 1830 East Lancashire had emerged as a highly sophisticated local economy including manufacturing, commerce, finance, transport, mining, machine making and machine tools.

So what is it that saw Lancashire as the cradle of the Industrial Revolution, a hotbed of enterprise, entrepreneurship and endeavour that has resurfaced in the resurgence and re-ignition of Burnley? What makes a town, an organisation, people like ‘Dave from Burnley’, entrepreneurs?

The C20th economist Joseph Schumpeter focused on how the entrepreneur’s drive for innovation and improvement creates upheaval and change. Schumpeter viewed entrepreneurship as a force of ‘creative destruction’. Business thinker Peter Drucker took this idea further, describing the entrepreneur as someone who searches for change, responds to it, and exploits change as an opportunity – which clearly profiles the Lancastrian cotton machine entrepreneurs.

An enterprising culture, as seen in the cotton industry, is the way the spirit and passion of innovation is embedded as a core value in its people. An enterprising culture serves to socialise new ideas and disruptive thinking as it promotes curiosity and discovery. So how does this manifest itself in an organisation?

Jim Stengel, formerly Global Marketing head of Proctor & Gamble, in his book Grow: how ideals power growth and profit chronicles a ten-year study of 50 businesses, and concludes that those who focused on their culture had a growth rate triple that of competitors in their categories.

Here are the key enterprising culture principles from his study that I believe have the potential for tripling the growth potential of your own entrepreneurial efforts:

Be clear about what you stand for, inside and outside your company Your personal priorities, values, and principles set the culture. The best way to be clear about them is to regularly engage team members, customers and suppliers. People follow what you do, not what you say.

Design your organisation for what it needs to win This includes the capabilities you need to build for a competitive advantage, and the career path for team members to bring this to life. Be bold, ‘traditional’ organisation structures often lead to mediocrity.

Get your team right, and do it quickly This means knowing where you need help and hiring carefully. Hire people who are smarter than you in the domain they know, and ensure they are ‘thinkers and doers’.

Champion innovation of all kinds You must visibly champion a passion for innovation, emanating from dreams, not desperation. Innovation should be much more than just product or process improvements, and include searching for new business models.

Set your aspirations very high Tell people every day what meets your aspirations and keep this visible. Ensure the entire organisation steps up to the challenge, and your customers will notice and respond to the culture of aspiration.

Continuous Learning Every interaction every day is a learning event, coach, rather than criticise, to improve the outcome next time. Learning is a hallmark of an enterprising culture.

Think like a winner, act like a winner Customers sense an organisation’s culture from seeing the people and how they communicate and behave, so never back away from an opportunity to delight a customer.

Live your desired legacy If you don’t know your ultimate goal, you will never get there. Create a culture that builds and sustains a business of tomorrow, not just today.

How many of these principles do you practice in your business?

An enterprising business culture doesn’t require a cult atmosphere, but it does require a disdain for conventional wisdom and status quo. It has to be built around vision, values and ideals. It’s all about making a difference and something other than just making profit. The Burnley Bondholders scheme is just this.

The Burnley scheme is a statement of vision and has started to remove the stigma that the town has as an industrial wasteland marred by social deprivation. Whilst Burnley remains amongst the dozen most socially deprived areas of the UK, it has started to buck the decline. It is the tenth best town in Britain for private sector growth – since 2011, private sector employment has risen by 2.8% compared to a 3% national decline.

When people from outside Lancashire talk about Burnley, it’s the football club they recall, with recognition of the achievements on the 1960s, when the club was top of the pile in England and a force in Europe.  They think Burnley FC’s glory days are 50 years behind us. With the advent of the monopoly money from Sky and egotistical billionaire foreign owners, in reality it probably is. However, like the town itself, we dare to dream. Without the dream, why bother? It’s the same mind-set you need for your business.

Across the North, the legacy of the Industrial Revolution is being recast in faded brick and glittering plate glass. Its old mills and factories are now the best addresses in town. The canals are places of leisure, not labour. It’s easy to forget the people who made these towns what they are, and whose lives we can barely imagine.

It may no longer be true that ‘what Lancashire thinks today, the world thinks tomorrow’ but this county, peopled by its highly individual inhabitants, has led the way with its endeavour and enterprising culture. Looking forward, get your head up and make your business like the town of Burnley: learn from yesterday, live for today and be positive about tomorrow.

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