Business the richard branson way

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Copyright©DesDearlove1999,2002and2007

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Includesbibliographical

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ISBN978-1-84112-764-4(pbk.:alk.paper)

1.Branson,Richard.2.Businessmen--GreatBritain--Biography.3.Successinbusiness--GreatBritain--Casestudies.4.Brandnameproducts--GreatBritain.5.Aeronautics,Commercial--GreatBritain--History.6.VirginGroup--History.I.

Title.II.Title:RichardBranson.

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CONTENTS

Acknowledgmentsvii

RichardBransonRevisited…

ix

TheLifeandTimesofRichardBranson

1

One:PickonSomeoneBiggerThanYou

21

PickingonthebigguysisalmostanarticleoffaithforVirgin,butitalsoplaysanimportantroleinBranson’ssuccess.

Two:DotheHippy,Hippy

Shake

35

Withhisinformalstyleandnon-conformistattitude,RichardBransonhasbeencalleda“hippycapitalist.”

Three:Haggle:Everything’sNegotiable

53

OneofRichardBranson’slesswell-knowntalentsisarazor-sharpnegotiatingtechnique.

Four:MakeWorkFun

65

Creatinganexcitingworkcultureisthebestwaytomotivateandretaingoodpeople;italsomeansyoudon’thavetopaythemas

much.

Five:DoRightbyYourBrand

79

Lookafteryourbrandanditwilllast.BransonbelievesthataslongastheVirginbrand’sintegrityisnotcompromised,thenitisinfinitelyelastic.

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viBUSINESS

THERICHARDBRANSONWAY

Six:SmilefortheCameras

91

Mediaattentionisagreatwaytopromoteyourbusiness.EverytimeBranson’spictureappearsinanewspaperormagazine,itpromotestheVirginbrand.

Seven:Don’tLeadSheep,HerdCats

109

Ratherthanexpectpeopletofollowblindlywhereheleads,Bransonreliesonhisabilitytogetthebestfromindividualsbycreatingachallengingenvironment.

Eight:MoveFasterThanaSpeedingBullet

123

Bransonmovesquicklywhenanopportunitypresents

itself.Hehascreatedexceptionallyshortdecision-makingchains.

Nine:SizeDoesMatter

135

Thinkbigbutkeepitsimple.Businessstart-upsareaVirginspeciality.

Ten:NeverLosetheCommonTouch

147

RichardBranson’sultimategiftisthecommontouch.Itistherealsecrettohisenduringsuccess–andpopularity.

HowtoBuildaBrandtheBransonWay

159

LastWord

167

Index169

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ACKNOWLEDGMENTS

I’dliketothinkthisbook

providesafairanalysisofwhyRichardBransonhasbeensosuccessfuloversomanyyears.

Intheend,though,whetheryouseehimasthebeardedcrusaderorsimplycapitalismwithahairyface,itisimpossibletoescapetheconclusionthatheisaremarkableindividual.ForthreedecadeshehasdazzledtheBritishbusinessscene

withauniquemixtureofsubstanceandstyle.Attheveryleast,hehasbroughtcolorandfunintotheotherwisealltoogreylivesofcountlessbusinessjournalistsaroundtheworld.Richard,forthatyouhavemyheartfeltthanks.

Inresearchingthisbook,Ihaveplunderedaveritabletreasuretroveofarticles,aswellasseveralexcellent

biographies.IwouldparticularlyliketothankMickBrownandTimJackson,whosebookswereaninspiration;AlanMitchellofAmropInternational;andacastofthousandswhohaveinterviewedandanalysedBransonovertheyears.

Iwouldalsoliketothank:SteveCoomberforhisresearchandinsights;MarkAllin,RichardBurtonand

CatherineMeyrickatCapstonePublishingforprovidingmewiththeopportunitytowritethebook;andJohnMoseleyatWileyforallhishelp.Finally,I’dliketothankStuartCrainerforsuchasplendiddayoutontheriver,allthoseyearsago.

DesDearlove,November2006

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RICHARDBRANSON

REVISITED…

SincethisbookwaslastrevisedmuchhashappenedintheBransonbusinessempire.NoteverythinghasgoneBranson’sway.Whileoneofhismorerecentventures,VirginGalactic,hasBransonshootingforthestars,anumberof

endeavourshaveprovedlessmeteoric.Yet,althoughBransonhassufferedhisshareofsetbacks,theyarecomparativelyfewforsomeonewhohasrunabillion-dollarbusinessforthirtyplusyears.ThefactthatmuchismadeofanydisappointmentsintheVirgincorporateportfolioonlyservestohighlightthecompany’sresoundingoverallsuccess.And,everthe

optimist,Bransoncontinuestospinoffideas,backnewVirginbusinesses,andwhipupPRinthemediaforhisvariousventures.

Itwasn’tthatlongagothatsomecommentatorsweresuggest-ingBransonmayhavelosthisMidastouch.Prematurely,asitturnsout.In1999,theyearafterthefirsteditionofBusinessTheRichardBransonWaywas

published,BransonfeaturedinForbesmagazine’slistoftheWorld’sRichestPeoplewithafortuneestimatedat$2.6billion.

By2000thatfigurehadrisento$3.3billion.Yetin2001,Branson’snetworthhaddeclinedtosome$1.8billion.Partoftheflast.inddix

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xBUSINESS


reasonforthissharpreductioninvaluewasplainlyoutsideofBranson’sinfluence;aglobaleconomicslowdown.

Anotherreason,however,wasthattheVirginbrandprovednottobeasinfinitelyelasticasmanycommentatorshadsuggested.

Although,insplendidstyle,BransondonnedarmyfatiguesandrodeintoTimesSquareinabattletanktolaunchVirginColaintheUS,aspartofanassaultonthecolamarket,thecolaventureeventuallyfellalittleflat.In

February2000,VirginadmitteddefeatinitswaragainstCoca-ColaandPepsi-ColaintheUS.

Thenewversionofcolahadlostitsfizz,withoutmakingmuchofadentinthecolamarket,Virginchangedthestrategy,managementandlocationofitssoftdrinksbusiness,concentratinginsteadon“newage”drinks,includingfruitjuicesand

energybeverages.

Bransonmayhavelookedfetchinginabridaloutfit(minusbeard)stirringupaPRfrenzyforthelaunchofVirginBridesin1996,asthecompanyopeneditsflagshipLondonstore.Notonlyweretheretheusualweddingdressesandaccessoriesbuttherewasalsoaweddingplanningservicethatextendedtoarrang-ingthe

entireeventifrequired.AshopinManchesterfollowedin2001.Butthehoneymoonwassoonover.TheLondonstoreclosedin2003,andtheremainingManchesterstorefocusedonareducedserviceconcentratingonclothesandaccessoriesratherthantheplanning.

PerhapsthebiggestchallengeforBransoninrecentyearshasbeenVirginTrains.

VirginTrains’serviceshitthebuffersearlyon,andthecompanyhasstruggledtogetbackontrackeversince.AttimestheVirginTrainsrailwayfranchiseshaveplumbednewdepthsoftrainservicemisery;quiteanachievementintheUKwheretrainsarefamouslyinefficient.

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RICHARDBRANSONREVISITED

xi

It’stemptingtofeelsorryforBranson.Therailfranchisesgrewtobesomethingofa

poisonedchalice.AtonepointitseemedthatnomatterwhatBransonsaidordidthebadpublicityfromVirgin’stardyrailwayoperationsjustkeptoncoming.

In1999,VirginTrainshadtheworstrecordforpunctualityinthecountry,accordingtofiguresfromtheshadowstrategicrailauthority.InFebruary2001,

anattempttoincreasethenumberofrailtravellersonVirginTrainsthroughahalf-pricerailfarebonanzaranintoproblemsduetounderestimateddemand.

Bransonpromised,“tocapturetheimaginationofpassengerswhohavesufferedtrafficjams.”Unfortunately,therealitywaspeoplejams–withhugequeuesandlongwaitsfortickets,whether

buyingticketsoverthephoneorinperson.Theensu-ingchaosandadversepublicitytooktheedgeoffofagenuineandgenerousoffer.

TheVirginTrainssagahasundoubtedlybeendifficultforVirgin.

AttimesVirginTrainsappearedtobetheantithesisofeverythingRichardBransonstandsfor.Knowing

thatmaintainingpublictrustandconfidenceintheVirginnameunderpinsthesuccessofthewholeVirginGroup,Bransonhasalwaysgonetogreatlengthstoprotecthisbrandimage.ThepoorperformanceofVirginTrainshasthreatenedtounderminethattrust.Inhisdefense,VirginTrainsinherited30-year-oldrollingstock,runningonarailwaythathadbeenunderfundedforyears.

WhenBransontookupthechallengeofrunningtherailfranchisesheacknowledgedthatitwouldtakefiveyearstoturnthelinesoper-atedfromtheworstinthecountrytothebest.Hewasright.

Thegoodnewsisthatthepunctualityfiguresin2005and2006

wereamarkedimprovementonthosein2002when,

accordingtoStrategicRailAuthorityfigures,only73.6percentofWestflast.inddxi

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xiiBUSINESS


Coasttrainsand62.5percentofcross-countrytrainsarrivedwithintenminutesofthescheduledarrivaltime.DeliveryofthePendolinotiltingtrains,travelingatspeedsofupto140milesperhour,aswellasreplacementofoldrollingstock,hasmadeabigdifference.ByApril2006thepunctualityfigureswere92percentforWestCoastPendolinotrainsand93percentforcross-country

Voyagerservices.

ElsewhereintheVirginempire,however,ithasbeenbusinessasusual.NewVirginventurescontinuetobeaddedtotheec-lecticcollectionofcompaniesgatheredundertheVirginbrandumbrellaatbreakneckspeed.TheseincludeVirginCars,VirginWines,VirginStudent,VirginEnergy,VirginBikes,andVirgin

Digital.

AtthesametimeasaddingtotheVirginportfolio,anumberofexistingVirgincompanieshavebeenexpandingrapidly.VirginActivebecamethefourthlargesthealthandfitnessgroupintheworld,raising£100millionforitsexpansionplansintheUK

andabroad.InSeptember

2006itboughtHolmesPlace,itsbiggestUKrival.InManchester,VirginCarsdroveatruckthroughtheusualcarsalesbusinessmodelopeningthefirstevervehicledepartmentstore.

Theventurethathasattractedthemostcolumninchesinthelastfewyears,however,hastobeVirginGalactic.Foreveryonewhodreamtofbeinganastronautwhenthey

wereyounger,forbuddingspacetravellerseverywhere,Bransonisabouttolaunchtheworld’sfirstpassengerserviceintosuborbitalspace.For$200,000orso,passengerswillbeabletosoarabovetheEarthandenjoythedelightsofweightlessness,albeitbriefly.

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xiii

And,forthosewholackthenecessaryfunds,butstillhankerafterajourneyinto

space,thereisalwaysthefrequentflyermilesoption.Youwillneedquiteafewthough;twomillionorso,possibly.That’showmanyAlanWattsintheUKrackedupwithVirginwhenhewasofferedaone-offopportunitytoupgradetoaspaceflightin2009.Heaccepted.

WithVirginGalactictheskyisnotthelimit.Bransonhasnointentionofstickingwith

abrieftripinsuborbitalspace.Theplanistoextendtheservicebothtopoint-to-pointsuborbitalroutesaroundtheplanet,aswellasorbitaltrips,andeventuallythemoon.

Aswellasvariouscompanies,Bransonalsoacquiredamoreunusualassetin2003whenheboughtMakepeaceIslandinQueensland,Australia.Most

companieshaveacompanycan-teen,theoddcorporatedayout,butBransonnowhasanislandresortfortheVirginstaff.

Bransonhasbeenraisingmoneyrecently,sellingVirgin’sstakeinseveralventures.The51percentholdinginVirgin.netwassoldtocablebusinessNTL.ThesamecompanyalsoboughtVirginMobilein

2006,withBransontakingasignificanttakeinNTLatthesametime.InAustraliatherewasthesuccessfulIPO

ofVirginBlue.

Nodoubtthemoneywillbeusefulforfundingoneofhislatest,toughestandpossiblymostimportantchallengesyet.Latein2006,Bransonopenlyjoinedtheclimatechangedebate.Notknown

fordoingthingsbyhalves,Bransondemonstratedhiscommitmenttotacklingtheplanet’sproblembypledgingthreebilliondollarstofightglobalwarming,withprofitsfromVir-flast.inddxiii

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xivBUSINESS


gin’stravelfirmsoveraten-yearperiodinvestedindevelopingbiofuels.

Bylate2006Bransonhadalreadymadesomesubstantialinvestmentsinthebiofuelbusiness.Theseincludeda$50millionplus

investmentinaCalifornianethanolplant,aswellasexpressinganinterestinEthanolGrainProcessors,anAmericanbiofuelcompany.

Attackingtheproblemofclimatechangeandfindingalternativeenergysourceswiththesamekindofenergyandenthusiasmhedevotestohisbusinessempire,Bransonwrotetohisfellowtransportindustryexecutives,to

airlines,andenginemanufac-turerstoroundupsupportforacross-industryforumfocusingoninnovativesolutionstotheworld’soverheatingproblems.Inhisletterheurgedgreaterspeedinaddressingthespecificissuesrelatingtotheairlineindustry’simpactoncarbondioxideemissions.

Characteristicallyoptimistic,Bransonsuggestedthata

collectiveindustryeffortcouldreducethecarbondioxideemissionsfortheaviationindustry–responsiblefortwopercentofglobalCO2emissions–byuptoaquarter.Hewasn’tshortofideasonhowthiscouldbeachievedeither.Onesuggestionwasanewstartinggridsystemforplanetake-offsandlandings.Insteadof“sittingonplaneswithCOspewingoutofthoseplanes

for2

anythingupto60–90minutes…,”asBransonexplainedtheexistingpositiontolistenersofBBCRadio4’sTodayprogramme,airplanescouldturnenginesoffuntilshortlybefore,andshortlyafterlanding,beingtowedintoplace“byasmalltug.”

Thisnewsystemwould,Bransonsuggested,reduce

groundcarbonemissionsbysome50percentatHeathrowandupto90

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xv

percentatJohnFKennedyairportinNewYork.Plusthosepeoplelivingnearbywouldenjoysubstantiallycleanerair,aswellaslowernoiselevels.Whenitcomestotheissueofcompaniesreducinggreenhousegasemissionssomeoneneedstotakealead;maybethatpersonisBranson.

Itisnotthefirsttimehehasgotinvolvedinissuesthattouchonthepublicgood.ForsometimeBransonwasintentonrunningtheUK’sNationalLottery.Losingoutonthe1996franchise,hewasbackinlineforthefranchisewhenitcameupagainin2001.

Bransonpromisedtocreate“amillionaireaday”byintroducingnewimproved

gamesandincreasingparticipation.Crucially,thePeople’sLotterywould,heclaimed,returnmorefundstocharitythantheincumbentoperatorCamelot.Unfortunately,afterabiddingfiasco,duringwhichbidswerewithdrawn,legalbattlesfought,andbidsresubmitted,afuriousBransonlostoutoncemore,vowingintheprocessnevertobidagain.

BransoncontinuestoridetherollercoasterthatisVirgin.OneofBranson’senduringstrengthsishisabilitytoabsorbpunches,totaketheroughwiththesmooth.Hehasbouncebackability

–lotsofit.

“WheneverIexperienceanykindofsetbacks,”Bransonobserves,

“Ialwayspickmyselfupandtryagain.IpreparemyselftohaveanotherstabatthingswiththeknowledgeI’vegainedfromthepreviousfailure.Mymotheralwaystaughtmenevertolookbackinregret,buttomoveontothenextthing.Theamountoftimethatpeoplewasteonfailures,ratherthanputtingthatenergyintoanotherproject,alwaysamazesme.Asetbackisneverabad

experience,justalearningcurve.”

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xviBUSINESS

THERICHARDBRANSON

WAY

Onemorethingdeservesamention:onMarch30th,2000,plainRichardBransonbecameSirRichardBranson.KnightedintheNewYear’sHonoursListforservicestoentrepreneurship,thehabituallycasuallyattiredBransondonnedamorningsuitforthefirsttimeeverathisinvestitureceremonyatBuckinghamPalace.While

respectabilitybeckoned,sofarhehasstoutlyresistedthetemptationtojointheestablishment.Withtypicalélan,party-lovingBransoncelebratedhisknighthoodbyholdingareceptionforthe250othersreceivinghonoursonthesameday.

Whenaskedhowitfelttobe“SirRichard,”Bransonanswered:

“Itfeelsgreat.ItfeelsoddsleepingwithaLadythough.”

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THELIFEAND

TIMESOF

RICHARDBRANSON

Inthemodernworldofbusiness,RichardBransonisananomaly.Inaneradominatedbystrategists,heisanopportunist.ThroughhiscompanytheVirginGroup,hehascreatedauniquebusinessphenomenon.Neverbeforehasasinglebrandbeenso

successfullydeployedacrosssuchadiverserangeofgoodsandservices.ThedistinctiveredandwhiteVirginlogo,itseems,isaselasticasMatescondoms–justoneofthemanyproductsVirginhaspromoted.1

THEBRANSONPHENOMENON

InthefilmFourWeddingsandaFuneral,acharacter

jokesthathisfriendmustbetherichestmaninBritain,butthefriendsays:

“Ofcoursenot.There’sthequeen.AndthatBransonblokeisdoingterriblywell.”

Britain’sbestknownentrepreneur,Bransonhasbeendoing

“terriblywell”formorethanthreedecadesnow.Hestarted

hisfirstbusinessattheageof16,andwasamillionaireat24.Nowinhis50s,BransonisaregularentryinForbesmagazine’slistoftherichestmenintheworld.

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2BUSINESS


Hispersonalwealthhasbeenestimatedatover$3billion,butit’shardtogetanaccuratetally,sincehiscompaniesareprivate,constantlydividingandmultiplying,andarecontrolledviaaseriesoftax-efficientoffshoretrusts–all

perfectlylegalandaboveboard,buthardtountangle.

Today,Bransonisthedrivingforceatthecentreofawebofmorethan200companies,employingmorethan30,000peoplearoundtheworld.Hiscommercialinterestsspantravel,hotels,consumergoods,computergames,musicandairlines.YoucanevenbuyaVirginpensionorinvestmentplan.

ButfinancialservicesisafarcryfromtheadolescentrecordlabelthathelpedputPunkonthemapinthe1980s,withacontroversiallynamedalbumbytheSexPistols.Everythingabouttherecordsuggestedrebellion–includingthePistol’srenditionof

“GodSavetheQueen”;butthealbumwasasteppingstoneforBranson.

Bythen,VirginhadalreadywontherespectofthehippygenerationwithTubularBells,fromayoungunknownartistcalledMikeOldfield.NeverMindtheBollockswastheperfectproducttoestablishtheVirginbrandwithanewgenerationofspiky-hairedteenagers.Bransonhadcreatedanewfusionofrebellionandbusiness–anddiscoveredauniquenewbrand

proposition.Hehasbeenrepeatingtheformulaeversince.

YetBransonismorethanjustabusinessman,heisapopularpublicfigure–admiredbyparentsandyoungpeoplealike.Oneofagenerationofbusinessleaderswhogrewupinthe1960s,hehasbeendescribedasa“hippycapitalist.”Tothis,hehasaddeda

reputationasanadventurer–settinganewworldrecordforcintro.indd2

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THELIFEANDTIMESOFRICHARDBRANSON

3

crossingtheAtlantic,andalmostlosinghislifetryingtocircumnavigatetheglobeinahotairballoon.

Hisderring-dooutsideofbusinesslifeismatchedbytheboldnessofhisescapadesinit.Hehasrepeatedlyused

theVirginbrandtotakeonaggressivemarketleadersandshakeupcomplacentmarkets–firstthebigrecordcompanies,thentheairlinesandmorerecentlysoftdrinksandfinancialservices.Thesecommercialadventureshavealmostbankruptedthecompanyonseveraloccasions.TheyhaveearnedhimaspecialplaceintheaffectionsoffirsttheBritishpublicandnowtheworld.

ButhispopularimagebeliesanothersidetoBranson.2Despitehiswealth,heremainsunrelentinginhiscommercialambitions.

Attimes,heseemstolaunchnewventuresonanalmostdailybasis.“Aruthlesslyambitiousworkaholic,”ishowonebiographerdescribedhim.

BransonclaimsthatVirgin

wasstartedfromapublicphoneboothwithlesscapitalthanmostpeoplewouldhappily“blow”onagoodnightoutatarestaurant.Anecdoteandmythsurroundshim.Yet

“Aruthlessly

Bransonthebusinessmanandmaster

ambitious

brand-builderremainsshroudedina

workaholic.”

publicrelationssmokescreen.

THEUNIVERSALBRAND

Branson’sgreatestcommercialachievement,todate,istocreatewhatisarguablytheworld’sfirst

universalbrand.Otherfamousnameshavebecomesynonymouswiththeproducttheyadorn:cintro.indd3

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4BUSINESS


Hoovervacuumcleaners,Coca-Cola,andLeviStrausstonamejustafew.ButonlyVirgintranscendsproducts.

Yetdespiteitsremarkablesuccess,Bransonwouldhaveusbelievethatnoneofitwasplanned.Hegivesthe

impressionthattheVirginphenomenonisoneofthoseoddthingsthathappentopeoplesometimes.ThisispartoftheBransonmystique.Hemakesitlookandsoundsosimple.

“Whenwecameupwiththename‘Virgin’insteadof‘SlippedDisc’Recordsforourrecordcompanyinthewinterof1969,Ihadsomevagueideaofthenamebeing

catchyandapplyingtolotsofotherproductsforyoungpeople.”3

“ItwouldhavebeeninterestingtohavetrackedthesuccessoftheVirgincompaniesorotherwiseifwehadcalledthecompanySlippedDiscRecords.SlippedDisc

“Itwouldhave

Condomsmightnothaveworkedas

well.”

beeninteresting

tohavetracked

Thequipistypicalofamanwho

thesuccessofthe

haslivedhiswholelifelikesomebig

Virgincompanies

adventure.Anoutspokencriticof

orotherwiseif

businessschoolsandmanagement

theory,Bransonlikesto

portrayhim-

wehadcalledthe

selfastheordinarymanonthestreet

companySlipped

(despitehiscomfortablemiddleclass

DiscRecords.

origins).Heisthesmallguywhoout-

SlippedDisc

smartsthebigguys.Hisaccountof

Condomsmight

howthefamousVirginlogocameto

beistypicaloftheway

thingsseemto

nothaveworkedas

happenatVirgin.

well.”

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5

“WhenVirginRecordsbecamesuccessfulwefollowedourinstincts…,”Bransonexplains.“Initiallythemusicreflectedthe

‘hippy’eraandourlogoofanakedladybacktobackrefl

ectedthattoo.ThenwhenPunkcamealongwefeltweneededacrisp-erimage…Ratherthanspendingafortunecomingupwiththenewimage,Iwastalkingtoourgraphicdesigneronedayexplainingwhatwewantedandhethrewonthefloorhisdoodling

–thenowfamousVirginsignature–whichIfortunatelypickeduponthe

waytotheloo.”

Itsoundssocasual,butthewordsmaskanextraordinaryentrepreneurialmind,onethathasreinventedbusinesstofitthetimeshelivesin.

CORPORATEROCKSTAR

ButBransonismorethanjustasuccessfulbusinessman.Heisoneofanewbreedof

entrepreneurswhosecelebritystatusandirreverentapproachmeanstheyhavemoreincommonwithrockstarsthanthe“suits”whopopulatethebusinessworld.

AlongwithAnitaRoddick,Ben&Jerryoficecreamfame,BillGatesandTedTurner,Bransonhasbecomeaculturalicon.Partofanewgenerationofbusiness

leaders,hisalternativebusinessphilosophyisavitalpartoftheVirginbrandappeal.

Bransondeliberatelytargetsmarketswherethecustomerhasbeenconsistentlyripped-offorunder-served,andthecompetitioniscomplacent.HedelightsincastingVirginasthecheekyunderdog,fasteronitsfeetandnippingattheheelsofbigbusiness.

NooneplaystheDavidtotheGoliathof“BigBusiness”bettercintro.indd5

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6BUSINESS


thanRichardBranson.Itisamarketingstrategythat

appealstomillions.

Whereveritappears,theVirginlogoattractsitsownanti-establishmentconsumers.Bransonhimself–withhislonghair,toothygrinandoutrageousbehavior

–isasfamousasthecompany.Ifany-

Nooneplaysthe

thing,heisbetterknownthanmany

DavidtotheGoliath

oftherockstarshehelpedcreate.(In

of“BigBusiness”

businessschool-speak,Bransonper-

betterthanRichard

sonallyaccountsforamajorchunkof

Branson.

thecompany’sintellectualcapital.)

Lovehimorhatehim,Bransonis

oneofthemostsuccessfulbusinessmenontheplanet.Buthisinfluenceand

popularityextendfarbeyondthebusinessworld.

Amongbusinesstycoons,hestandsoutasanadventureraswellasasuccessfulentrepreneur.Branson’sforaysintotherecordbooksincludethefastestcrossingoftheAtlanticbyseainVirginAtlanticChallenger;andseveralattemptstocircumnavigatetheglobeinahot-airballoon.

Alongtheway,too,BransonhasmanagedtoendearhimselftotheBritishpublicinawaythatnootherentrepreneureverhas.HefoughttomaketheNationalLotteryanon-profitmakingventurewiththeproceedsgoingtoworthycauses;heheadedupagovernmentenvironmentalcampaign;andlaunchedMatescondomstoraiseawarenessaboutAIDS.Hisfaceappearsonthefront

pagesofthenationalpressandtelevisionalmostasoftenastheRoyalFamily.

Yet,despitebeingabillionairewithhisownCaribbeanIslandtoretreatto,Bransonhassomehowretainedthecommontouch.

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7

Unlikeothercelebritiesinthepubliceyehehasalsomanagedtoprotecthisprivacy.WeonlyseeBransonwhenhewantsusto.

Heisalmostasadeptatavoidingbadpublicityasheisatcreatingpositivecoverage.

Hehasalsomanagedtokeepaveilaroundtheinnerworkingsofhisfinancialempire.In1986hefloatedhisVirginbusinessontheLondonStockExchange,onlytobuyitbackbecausehedidn’tliketheconstraintsamarketlistingbroughtwith

it.(The1987StockMarketcrashwiped£millionsoffthevalueofthecompanyovernight,confirminghisdistrustofthesuitsfromtheinvestmentcommunitiesofWallStreetandtheCityofLondon,andgoadinghimintotakingbackcontrol.)

TakingthecompanybackintoprivateownershiphasallowedBransontoshielditsinnermostworkingsfromthe

publicgaze.

Ithasenabledhimtocreateabusinessempirethatisverydifferenttothenorm.Insteadofthetraditionalmodelofahandfulofoperatingcompaniesreportingtoaholdingcompany,Virginisanatomizedempire–amyriadofbusinesseslooselyboundtogetherbytheVirginbrand,manyofthemjointventureswithoutside

investors:anetworkthatseemstohavelittleincommonexceptthename.OnlyRichardBransonandahandfulofhisseniorexecutiveshaveanoverallview.Mostofthemarevirtuallyunknowntothepublic.Thegroup’schairmanandfounder,however,isanintegralpartoftheVirginbrand.

Here,too,thereisparadox.

ThepublicBransonisinstantlyrecognizabletomillionsofpeople.Hisistheaffableandcaringfaceofbusiness.Themanwhohasmadeacareeroutoftakingonbigbusinessandwinning;themanwhoprefersbrightlycoloredsweaterstotheconventionalcorporatesuitandtie.ButtheprivateBransonismuchlesswellknown.

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8BUSINESS


Indeed,ithasbeensuggested

thattherearetwoRichardBransons:thepeople’schampionknowntomillionsandthedealmakerknownonlytohisbusinesspartners.

AccordingtoTimJackson,authorofVirginKingtheunofficialBransonbiography,Branson’smottoshouldbearsestcelareartem

–theartliesinconcealing

theart.ThisistheessenceoftheBransonmanagementstyle,andthecornerstoneoftheVirginempire.

THEEARLYYEARS

RichardCharlesNicholasBransonwasbornon18July1950.BythetimebabyRichardarrived,hisfatherEdwardBransonandmotherEveBransonhadsettledinthesleepyvillageofShamley

GreenintheSurreystockbrokerbelt.WithTedBransononlyrecentlyqualifiedasabarrister,moneywastightandthefamilyrentedaramblingandsomewhatramshacklehousefor12shil-lingsaweek.

Hisformaleducationwasconventional,andstartedatScaitcliffePreparatorySchool.TheyoungBransonwasnotacademicallyminded

andonlyscrapedintopublicschoolatStoweafteraspellatacrammer.

Althoughhelikedsport,thefinerpointsofaclassicalBritisheducationwerewastedonhim,buttheexperiencewasinvaluableforhisfuturecareer.Traditionalineverysenseoftheword,theschoolprovidedtheperfecteducationforthewell-spokenyoungmanwho

wouldgoontobuildabusinessempirethattradedonbuckingthesystem.

InthoseearlyyearsglimpsesoftheBransonpsychologyarealreadyevident.

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9

Asonecommentatorobserved:“Thefresh-facedyoungladhadonlyscrapedintohisminorpublicschoolafterspecialtutoringfortheentryexam.Subsequentlyhehadfailedhiselementary

mathematicsthreetimes.Yetstillhewasinnodoubtthathecoulddoabetterjobofrunningtheschoolthanthepowersthatbe.Sohepennedtheheadmasteramemo,outlininghissuggestions.Amongthem:allowsixthformerstodrinktwopintsofbeeraday.”

ButBransonnevermadeitintothesixthform.Hedroppedoutofschoolat16,

hisheadtoofullofbigideasandbusinessschemestotakeinanythingelse.Atthetime,hisheadmasterobservedthatBransonwouldendupeitheramillionaireorbehindbars.Therest,astheysay,ishistory(althoughintheeventitwasaclosecallbetweenthetwo).

Aquarterofacenturylater,Bransonisknowntheworldover.

Theexuberantbusinessbuccaneerwhoflewinthefaceofreceivedwisdomintheairlineindustryandturnedupthevolumeonthebigrecordlabels,whoshookupthecolagiants,andgavetheUKfinancialservicesfirmsagoodrunfortheirmoney;theadventurerwhobrokethetrans-Atlanticspeedrecord;thedaredevilhotairballoonist.AboveallheisknownastheDavidwho

tookonGoliathintheshapeofBritishAirways,dirtytricksandall–andwon.Butitcouldhavebeenverydifferent.

TYCOON-IN-WAITING

Branson’sfirstbusinessventuresbeganatschool.WithNickPowell,hischildhoodfriendandlong-timebusinesspartner,theyoungBransoncuthis

businessteethfirstbreedingbudgerigars,andthengrowingChristmastrees.Bothfailed.

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10BUSINESS


Hisfirstproperbusiness–amagazinecalledStudent,waslaunchedwhenhewasjust16yearsold–andwasnotaresoundingsuccesseither.Then,somethinghappened(andhaskeptonhappeningeversince).Withlittleornoknowledgeofpopmusic,Bransonstumbledontotheideaofamailorderrecord

company.Shortofadvertisements,hepublishedhisownadinthemagazine.

Theyearwas1969,andLondonwasripeformailordermusic.

Thefirsttheyoungentrepreneurknewofitwaswhenchecksstartedarrivingthroughtheletterbox.Thebusinesstookoff.

RichardBransonwasairborne.

Serendipity,too,playeditspartinhismovefrommailordertorecordstores;apostalstrikecrippledthemailorderbusiness,forcinghimtoseeknewoutlets.HeopenedhisfirststoreinOxfordStreetin1971.

AnearlyskirmishwithHMCustoms&Excisetaught

Bransonthesenseofstayingontherightsideofthelaw–andthevalueofgoodlegalandfinancialadvisers,somethingwhichhasstoodhimingoodsteadeversince.Theyoungentrepreneurhaddiscoveredaloopholeinthetaxsystem.Recordsthatwereforexportdidnotincurtax.Butthecustomsofficialsdidn’tcheckwhichalbumswerebeingshipped.Itwasjusttootemptingto

sendworthlessoldstocktoEuropeandsellthenewstockintheUKwithoutpayinganytaxonthem.Whenthescamwasuncovered,Bransonwasarrestedandthreatenedwithprosecution–athreatonlywithdrawnwhenheagreedtopaybackthemoneyheowed.

FromhisVirginrecordshopsBransonmovedintorecordproduction,launchingahighlysuccessfulrecord

label.OneofthefirstartistsitsignedwasMikeOldfield,whosealbumTubularBellsstayedintheUKchartsforthenexttenyears.TheproceedsfromTubularBellsbankrolledtheVirginempire.

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11

Inthe1980s,theVirginlabelbecamesynonymouswithastringofradicalyoungmusicians.IthelpedputPunkonthemapwithayoungbandcalledtheSexPistols.In1982,Virgindiscovered

BoyGeorgeandCultureClub.ThecashgeneratedbytheVirginrecordlabelmeantthatBransoncouldbeginbuildinghisempireinearnest.

By1984Virginwasliterallyairborne.Bransonhadmigratedfrompopmusictotransatlanticflight,launchingVirginAtlanticAirways.Ayearlater,Virginminustheairline,which

Bransonretained,wasfloatedontheLondonStockMarket.Butthecrashof1987andhisgeneralmisgivingsaboutthefinancialcommunityconvincedBransontotaketheextraordinarystepoftakingthecompanybackintoprivateownership.

Therest,astheysay,ishistory.Today,theVirginempirespansairtravel,

holidays,clothing,recordstores,softdrinks,radio…

thelistgoesonandon.ButhowdidRichardBransonshrugoffsomeofthefiercestcompetitorsinBritainandAmericatocreatethemostpowerfulbrandintheworld?Andwhatarethelessonsfortheentrepreneursoftomorrow?

BUSINESSSTRATEGY

BransonhasprobablyneverheardofMichaelPorter’sfiveforces

–eventhoughtheHarvardBusinessSchoolprofessorhasbeenessentialreadingforbusinessschoolgraduatesformorethan20years.Ifhehad,hewouldknowthattheairlinebusiness,thecolamarketandtheUKfinancialservicesmarkets–tonamejustsomeoftheareaswhere

hehassuccessfullysetupVirgincompanies–aretextbookexamplesofextremecompetitivenessorhighbarrierstoentry,andbestavoided.(Askedhowonecintro.indd11

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12BUSINESS


becomesamillionaire,Bransonrepliesthatyoustartoffasabillionaireandthenopenanairline.)Thatmighthavedeprivedusofoneofthemostcolorfulanddynamicbusinessempirestheworldhaseverseen.

Ontheotherhand,Branson’sreactiontobeingtoldsomethingisimpossibleisusuallytoregarditasachallenge.Porter’sanalysiswouldprobablyhaveinspiredhim.ItispreciselybecauseBransondoesn’treadthebusinesstextbooksthatheissosuccessful.

(Manyofthetechniquesheintroducedinthe1960sarenowbeingheldupas

panaceasformanagementinthe21stCentury.)CORECOMPETENCIES

Inanuncharacteristicreferencetobusinessschooltheory,theideasofGaryHamelandC.K.Prahaladinparticular,inrecentyearsBransonhasdistilledVirgin’sfourcorecompetencies.

Theseare:

◆Theabilitytoidentifyappropriategrowthopportunities

◆Theabilitytomovequickly

◆Thewillingnesstogiveday-to-daymanagementcontroltorelativelysmalloperatingteams.“Wetrytokeepourcompaniessmall,”hesays.(Eventhoughtheairlinenowhas6000

staff,Bransonlikestothinkithas“retainedasmallcompanyenvironmentandinformality.”)

◆Theabilitytocreateandmanageeffectivejointventures.

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13

OthershavesuggestedBranson’s

Askedhow

ownrealcorecompetenceistheabil-

itytomotivatepeopleand

pushthem

onebecomesa

tothelimit.Stillothers,pointtohis

millionaire,Branson

relentlessandsometimesruthlessne-

repliesthatyou

gotiatingskills.

startoffasa

billionaireandthen

Carefuldissection,however,reveals

thatthetruthismoresubtle.The

openanairline.

Bransonphenomenoncanbere-

ducedtoanumberoflessonsthat

cansharpenthebusinessacumenofanymanagerorentrepreneur.Butthatdoesn’tmeanthattheformulacanbeduplicated.

Whattheanalysisshowsisthatittakesaveryspecial

individualtorunabusinesstheBransonway.Thequestionis,doyouhavewhatittakestobeaRichardBranson?

BRANSON’SWORLD

AbriefhistoryofVirgin:

1950RichardCharlesNicholasBransonborn,firstchildofEdwardBranson,barrister,andEveBranson,

formerdancerandairstewardess.

1964AdmittedtoStoweSchool,Buckinghamshire.

1966BransonfoundsStudentmagazinewithaschoolfriend.

1967BransonleavesschoolafterOlevelsandmovestoLondontoconcentrateonmagazine.

1968January26,firstissueofStudentMagazine,RichardBranson’sfirstbusinessventureisproduced.Bransonfoundsnon-profitStudentAdvisoryCentre.

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1969BransontakesoutHighCourtwrittoforcetheBeatlestoproviderecordingforStudent’sfrontcover.FirstadvertisementformailorderrecordbusinessappearsinlastissueofStudent.

1970StartofVirginmail-orderoperation.Bransonfined£7forusingwords

“venerealdisease”inpublicitymaterialforStudentAdvisoryCentre.

1971Postalstrike.FirstVirginrecordstoreopensinLondon’sOxfordStreet.SimonDraper,Branson’sSouthAfricancousin,joinsVirgin.RaidedbyHMCustoms&Excise,theUKtaxauthorities;Bransonarrestedforpurchasetaxfraud.Agreestopay£53,000

intaxanddutiesovernextthreeyears.Prosecutionisdropped.

1972FirstVirginrecordingstudioopensat“TheManor”nearOxford,England.MikeOldfieldstartsrecordingTubularBells.BransonmarriesfirstwifeKristenTomassi.

1973VirginRecordlabelislaunchedwithTubularBells

becomingoneofthebiggestsellingrecordsofthedecade.

MusicpublishingbusinessestablishedintheUK.

1975BransonunsuccessfullytriestosigntheRollingStonesand10CC.

1976SexPistolscausefurorewhentheyswearonearlyeveningTV.TVpresenterBillGrundyisfired.

1977VirginsignstheSexPistolsafterbothEMIandA&Mhavedecidedtheyaretoocontroversial.

1978TheVenue,Virgin’sfirstnightclub,opens…HumanLeaguesignedtoVirginrecordlabel.

1980VirginRecordsmovesintooverseasmarkets,initiallythroughlicensingdealsbutlaterthroughits

ownsubsidiariesinFranceandthenelsewhere.

1981PhilCollinssignstoVirgin.

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15

1982VirgintalentscoutdiscoversBoyGeorge.CultureClubsignstoVirginforworldwiderights.

1983VirginVision(forerunnerofVirginCommunications)isformedtodistributefilmsandvideos.VansonDevelopments,Virgin’spropertycompanyisformed.

VirginGames(computergamessoftwarepublisher)islaunched

…VirginGroup’scombinedpre-taxprofitrisesto£2milliononturnoverofjustunder£50million.

1984VirginAtlanticAirwaysandVirginCargoarelaunched.

Acquisitionofinterestin

luxuryhotelinDeya,Mallorca,forerunnertohoteloperationsinUKandCaribbean.DonCruickshankhiredasVirgin’snewgroupmanagingdirector;TrevorAbbottbroughtinasfinancedirector.VirginVisionlaunches“TheMusicChannel,”a24-hoursatellite-deliveredmusicstationandproducestheaward-winningfilm1984.

1985£25millionplacingof7%ConvertibleStockiscompletedwith25EnglishandScottishinstitutions,intherunuptofloatingthecompany.BransontransfersbulkofVirginshareholdingtooffshoretrusts

VirginwinsaBusinessEnterpriseAwardforcompanyoftheyear.VirginHolidaysisformed.Bransonjoinsunsuccessful

ChallengerattemptonAtlanticcrossingrecord.

1986VirginGroup,comprisingthemusic,retailandproperty,and-communicationsdivisions,isfloatedontheLondonStockExchange.(Airline,clubs,holidaysandaviationservicesremainpartofprivatelyownedcompanycalledVoyagerGroup.)BransonbreaksAtlanticsea

speedrecordinChallengerII,winninghuge-publicity.

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THERICHARDBRANSON

WAY

1987VirginRecordsAmericaislaunched,quicklyfollowedbysubsidiaryinJapan.BSB.Virginsetsup525postproductionfacilityinLosAngelestoworkonhighqualitycommercialsandpopvideos.Stockmarketcrashes,Virginsharepricefallsbacktobelow90p.Bransonforcedtoabandonattemptathostiletakeoverof

EMI.Matescondomslaunched,withproceedstogotoHealthcareFoundation.Virgindirectorsvetouseofcompanynameoncondomventure.VirginshareslistedonNASDAQexchangeinUS.

1988RichardBransonannouncesmanagementbuy-outofVirginGroup,followingthestockmarketcrashinOctober.

BransonandotherVirgindirectorsbuycompanyfromothershareholderswithloanof£182.5million.

1989VirginAtlanticAirwaysannouncesdoubledpre-taxprofitsat£10million.CruickshankresignsasGroupMD,Abbotttakesover.BransonmarriesJoanTempleman.

1990BransonandPer

LindstrandflyPacificinhotairballoon.

GulfWarbreaksoutduringflighttriggeringairlinerecession.VirginAtlanticsends747toIraqtopickupBritishhostages.VirginRetailGroupandMarui(Japaneseretailer)announcetheformationof50:50jointventurecompanytooperateMegastoresinJapan.

1991VirginPublishingisformedbycombiningWHAllen,Al-lison&BusbyandVirginBooks.

Virgin

operates

firstHeathrowservices.Virginsells

50%ofMegastoresbusinesstoWHSmith.Branson

decidestosell-VirginMusicGroup–“thejewelinthecrown.”

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17

1992SaleofVirginMusicGrouptoTHORNEMI.ThedealvaluesVirginMusicGroupatUS$1billion,withRichardBransontoremainnon-executivepresidentofthegroup.

PostproductioninterestsarereorganizedunderanewholdingcompanyVirginTelevision.UScarrierVintageAirtoursisestablishedtooperateadaily

servicefromOrlandotoFloridaKeys,offeringnostalgictripsinDC–3.

BransonthreatenslibelactionagainstBritishAirwaysfordismissinghisallegationsof“dirtytricks”aspublicityseeking.

1993BritishAirwayssettleslibelactionfor£610,000plusalllegalcosts(totalcostsbelievedtoexceed£4.5

million).

VirginAtlanticvotedairlineoftheyearbyExecutiveTravelmagazineforthethirdyearrunning.VirginRadio1215

AMlaunched.

1994BransonbidsforfranchisetorunBritain’sNationalLottery,promisingtogiveallprofitsto

charitablefoundation.

LotteryawardedtorivalCamelotconsortium.

VirginAtlantictakes$325millionanti-trustcaseagainstBritishAirwaystoUScourt.BransonfamilynarrowlyescapesdeathincarcrashonM40motorway.

VirginColalaunchedwithmuchfanfare.

1995VirginDirectPersonalFinancialServiceislaunched.Virgin,TPGPartners,amajorUSinvestmentfundandHotelPropertiesLtdannouncetheacquisitionofMGMCinemas.AustralianMutualProvincial(AMP)buysa50%

stakeinVirginDirect,buyingoutNorwichUnion,theoriginalpartner.

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18BUSINESS

THERICHARDBRANSON

WAY

1996VirginBride,thelargestbridalretailshopinEuropeislaunchedinLondon.VirginenterstheInternetmarketwithVirgin.net.VirginRailGroupwinsfranchisetooperateInterCityExpressserviceslinking130stationsacrossBritain.

1997Virgin’sbidtooperate

theInterCityWestCoasttrainserviceissuccessful,witha15yearrailfranchise.VirginVie,anewjointventurecosmeticsandbeautycarecompany,launchesitsfourflagshipstoresinBritain.VirginDirectlaunchesitsfirstbankingproduct,VirginOneAccount.

ChrisEvans’GingerProductionsacquiresVirginRadiofor£85million.The

company,renamedGingerMediaGroup,toberunbytheexistingstaffundertheVirginRadioname.

1998VirginTradingpurchasesremainingstakeinVirginColafromCottEurope,takingfullcontrolofsales,marketing,logisticsanddistribution.

1999BransonknightedinNewYear’sHonoursList.

Sells49

percentofVirginAtlantictoSingaporeAirlines.VirginMobilelaunched.

2000LosessecondbidtooperatetheNationalLottery,afteraselectionprocessdoggedbycontroversyhandsittoincumbent,Camelot.VirginClothingfoldsintheUK.VirginCarslaunched.

2001SellsstakeinmortgagebrokerageVirginOnetoRoyalBankofScotland.VirginTrainslaunches“world’sbiggestrailoffer.”Cutsalmostallrailfaresby50percent.

Promotiondoesn’trunassmoothlyasVirginwouldlike.

2002Virgincreditcardintroduced.

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19

2003VirginShopsmergeswithVirginMegastores.VirginCarsopensthefirstevervehicledepartmentstoreinManchester.

2004It’sup,upandawayasVirginannouncesthelaunchofVirginGalactic–tourist

travelintospace.VirginAtlanticcelebratesits20thbirthday.

2006TheVirginAtlanticGlobalflyerpilotedbySteveFossettbreakstherecordforthelongestflightinhistory.Bransonannounces$3billioninvestmentintacklingglobalwarming.

NOTES

1

Curiouslyenough,Virgin’sexecutivesoriginallyrefusedtoletBransonusetheVirginbrandoncontraceptives,fearingitwouldbetoocontroversial.

2Jackson,

Tim,

VirginKing,HarperCollins,

London,1994.

3

Branson,Richard,BBC‘MoneyProgramme’Lecture,1998.

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ONE

PICKONSOMEONE

BIGGERTHANYOU

“AtVirgin,wehaveastrategyofusingthecredibilityofourbrandtochallengethedominantplayersinarangeofindustrieswherewebelievetheconsumerisnotgettingvalueformoney.”

–RichardBranson

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PICKONSOMEONE

BIGGERTHANYOU

23

RichardBransonhasmadeacareeroutofplayingDavidtotheotherguy’sGoliath.Inthepasttwodecades,Virginhascrossedswordswithsomeofthemostpowerfulcompaniesontheplanet.Inthe1970s,theVirginrecordlabelwentupagainstthemusicestablishment,

includingthelikesofEMI.WhenhesetupVirginAtlanticAirwaysinthe1980s,Bransontookonthebigairlines,goingheadtoheadwithBritishAirways.Inthe1990s,Virginenteredthesoftdrinksmarketwithofallthingsacola–placingitindirectcompetitionwiththegiantsofCoca-ColaandPepsiCo.Infinancialservices,VirginDirectcompeteswiththebanksand

otherlarge-scalefinancialinstitutions.

Wheresomeentrepreneursmighttakeonelookatthemarketdominanceofthebigplayersandthinkbetterofit,Bransonactuallydelightsintakingon,andoutmaneuveringlargecorporations.WhenBransonlaunchedVirgincola,onejournalistnoted:“Igottheimpressionitwasnotthe

moneybuttheprospectoftakingonthemightyCoca-Colacorporationthatreallygavehimhiskicks.”1

“Virginstandsforasenseofchallenge,”saysBranson.“Weliketousethebrandtotakeonsomeverylargecompanies,whomwebelieveexerttoomuchpower.Therearecaseswhereabrandnamehastraditionallybeenalmostsynonymouswiththeproduct

itisselling–Coca-Cola,Kellogg’s,Hooverforexample–withheavyadvertisingtokeepitthatway.Infact,manyAmericanbrandnameslikethesegrewupduringtheso-callederaofthec01.indd23

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24BUSINESS


robberbaronswhichledtotheintroductionofAmerica’sexcellentanti-trustlawsintheearly20thCentury.”

RICHARDTHELIONHEART

Bransonhasaremarkable

abilitytoclothealmosteverythinghedoesinacrusadingcloak.ThislendstheVirginbrandmoralauthority.Whenpittedagainsttheimmenselypowerfulforcesof“bigbusiness,”Branson-stylecapitalismlooksalmostsaintlybycomparison.Bytargetingcompanieswithdominantandoftenaggressivemarketpositions,Virginisabletoseizethe

moralhighgroundfromtheoutset,somethingthatgivesitadistinctiveedgewithconsumers.

Whereotherempirebuildersgetinvolvedincommercialdog-fights,Bransongoesinforcrusades–withVirgininvariablyonthesideoftheangels.Thestrategyreliesonthecredibilityofthebrand,andpublicconfidenceintheVirginchairmanhimself,to

“dotherightthing.”(Incrediblyforabusinessman,BransonwasoneofahandfulofpeoplechoseninapollofBritain’syouthassomeonetheywouldtrustto“re-writetheTenCommand-ments.”)

InmanyofthemarketsVirginhasenteredconsumerssensedthattheywerenotbeingtreatedfairly,butcouldn’tseeanyotherchoice

thanthebigplayers.Theysimplyacceptedthattheirbestinterestswerenotbeingserved.Virginoffersanalternative.AsoneVirginexecutiveobserves:“Ifyougoforbig,fat,lazybrandleaders,it’softeneasytoofferbettervalueformoney.”

Inaddition,itallowsyoutobeonthesideoftheconsumer,whowillthank

youforit.

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PICKONSOMEONEBIGGERTHANYOU

25

Branson’sgreatestgiftasanentre-

“Ifyougofor

preneurandabusinessmanishis

preoccupationwiththeconsumers’

big,fat,lazybrand

pointofview.Whenhewentinto

leaders,it’soften

themusicbusinessinthe1970s,for

easytoofferbetter

example,thelong-haired–andlat-

valueformoney.”

erspikyhaired–youngstershewas

sellingtohatedthe“straight”

music

establishment,whichtheybelievedrippedofffansandartists.

TheysawBransonasacrusaderfortheiralternativeculture.

WhenhelaunchedVirginDirect,thefinancialservicescompany,Bransonexpresslysaidthathewasgoingto

shakeupthemarket.

Itwasa“dirtybusiness”hesaid,thatneededcleaningup.

“TheVirginnameistrusted,especiallybyyoungerpeople,”hesaid.“Theconsumerhasbeentakenforaridefortoolongbyanindustrywhichhasbeenabletohideitscharges.”2

HOISTAPIRATEFLAG

OthersseeBransonmoreasabuccaneerthanacrusader.TheappealoftheswashbucklingVirginboss,theyargue,ishiscompletelackofrespectforfiguresofauthority.This,combinedwithagleefulsenseoffun,andthepleasureofbeinganirritanttobigbusiness,iswhatattractsthemtohisside.

Onthisreading,hesteersa

courseforthemostheavilyarmedtreasureships,ladenwiththespoilsofexcessivemarketpower.

Timeandtimeagain,hehashoistedtheVirginlogooveranewventurelikeamoderndayskullandcrossbones,asheandhisc01.indd25

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26BUSINESS


youthfulpiratecrewboardthemar-

Bransonon

ketofonemultinationaloranother.

financialservices:

“Theconsumerhas

Bransoniswellawareofthisimag-

eryandhasusedthepiratemotifto

beentakenfora

goodeffect,togeneratepublicity

ridefortoolongby

andtoantagonizethe

competition,

anindustrywhich

somethingthatheexcelsat.Shortly

hasbeenableto

afterthelaunchofVirginAtlantic

hideitscharges.”

Airways,forexample,Bransonissued

aninvitationtophotographersfrom

theBritishnationalpresstorecord

hisswashbucklingantics.Thelocation:Heathrow,London’smainairport–whereBritishAirwayskeepsafull-sizemodelof

Concordedeckedoutinitscorporatelivery.

Attheappointedtime,Bransonappeareddressedasabuccaneer,completewitheyepatch,andloweredtheVirginliveryontoConcorde,stealingtheUKnationalcarrier’sthunderandprovidingafantasticphotoopportunity.ThenewspapersthenextdaycarriedphotographsofBransonand

hisVirginpiratesboardingtheBAflagship.LordKing,BAchairmanatthetime,wassaidtobesoincensedwhenhesawthepicturesthathealmostbrokethesoundbarrierhimself.

EVERYUNDERDOGMUSTHAVEHISDAY

BransonisverygoodatpositioningVirginastheunderdog(eventhoughwhen

viewedasagroup,Virginisactuallyabigcompanyinitsownright).It’shardtothinkbadlyofamanwhopicksoncompaniesthatare,oratleastappeartobe,muchbiggerthanhis.

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27

Sportsfansknowthattheoutsiderwilloftenattracttheneutralobservertoitsside.Thesameseemstoworkinbusiness.PositioningVirginasthesmallguyhasimportantpsychological

advantages.Itplayswellwithcustomers,especiallythosewhofeelneglectedorthattheyhavebeentakenforarideinthepast.Theyarelikelytobedrawntotheplucky,tenaciousstyleofthelittleguywhoispreparedtostanduptothebullies.Facedwiththeprospectofsomecheekyupstarttakingonthemightofamultinational,neutralonlookerscan’thelpbutapplaudVirgin’s

audacity.

It’salsogoodforthemotivationofVirginemployeestofeeltheyaretakingpartinanepicstruggle:Virgin’sentrepreneurialflairandenthusiasmpittedagainstlumberingcorporatebeefcake.

Astheunderdog,theyhaveeverythingtogainand

nothingtolose.Atthesametime,thearrivalofaloud-mouthed“hippy”likeBransonontheirterritoryisalmostguaranteedtoincensethecompetition–forcingthemtomakemistakes.

It’sclear,too,thatthere’ssomethinginBranson’spsychethatrespondstothechallenge.Hedelightsinhavingtheoddsstackedagainsthim,andtakes

enormouspleasureindoingwhattheexpertssaycan’tbedone.Wherethatchallengeinvolvesadministeringshocktreatmenttoacomplacentmarketleader,itisallthemoreappealing.

WhenaCoca-Colaexecutiveboastedthat“withoutoureconomiesofscaleandourincrediblemarketingsystem,whoevertriedtoduplicateourproductwouldget

nowhere,”Bransoncouldn’twaittohaveago.3

Healsohasaninstinctivefeelforwhatcanbeachieved.Ofhisdecisiontogointotheairlinebusinessin1984,hesays:“Itc01.indd27

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wasamovewhichinpureeconomictermseverybodythoughtwasmad,includingmyclosestfriends.ButitwassomethingwhichIfeltwecouldbringsomethingtothatotherswerenotbringing.”

PICKYOURBATTLES

Thedecisionstoenterboththeairlineandcolamarkets,however,werecarefullyconsidered.Althoughhegivestheimpressionthathelikestoclimbbusinessmountainssimplybecause“theyarethere,”inalmosteverycaseBransonisrespondingtospecificbusinessopportunitiesthatpresentthemselves.

InthecaseofVirginCola,he

wasapproachedbyasoftdrinkscompanywithahighqualitycolaformulalookingforstrongbrandname;inthecaseofVirginAtlantichewasapproachedbyRandolphFields,ayounglawyer

whohadalreadydonemuchofthe

Bransonon

legworkforlaunchingan

airlinebut

tacklingbig

neededfinancialbacking.Bothop-

business:

portunitiesweretoogoodtomiss.

“Ifyoutake

onestablished

Sometimes,however,thelogicisnot

clearatfirsttotheso-calledexperts,

brands,manyof

apointBransonlikestoramhome

whomhavenear

whenhegetsthechance.Takethe

monopolies,you

exampleofVirgin’sforayintotheUK

expecteverything

financialservicesmarket.

tobethrownatyou

“Welookedlongandhardatthemar-

toweakenyour

ketplaceandrealizedthatalthough

position.”

therewere600companiesselling

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29

PEPs,pensionsandthelike,theyallchargedalmostidenticallyhighprices.There

wasalwaysanup-frontcommission(oftenhidden)ahighannualfeeandusuallyaMrorMrsTenPercentsittinginthemiddlerakingoffafatcommission.Itwaslikeagiantcartel…”

“Theinterestingthinghereisthatwhenwelaunchedthebusiness,themarketinggurusalmostuniversallycriedoutthefatalwords‘brandstretching’,withoutstopping

tothinkthat,infact,thewholeideawasincrediblyclosetothebasicpropositionofferedbyVirginAtlantictotransatlanticpassengers.Atitssimplest,aqualityproductwithflairatreasonableprices.Alltheycouldseewasadifferentproduct.Butthegeneralpublic,notversedinmarketingspeak,sawitinmuchthesamewayaswedid.”4

Butthereisanothersidetopickingyourbattles.IfthereisonelessonthatRichardBransoncanteachaspiringentrepreneursaboveallothers,itistoexpecttroublewhenyougoupagainstbigbusiness.Thereisanoldproverb:agorillawithagnatonitsbackhasatendencytotrytoswatit(allthemoresoifthatgnatismakingalotofnoiseandhasitsphotographinthenewspapers).

“Ifyoutakeonestablishedbrands,manyofwhomhavenearmonopolies,youexpecteverythingtobethrownatyoutoweakenyourposition.Wehavehadtoputupwiththesesortsofattackformanyyears.Vastamountsofmoneyarespentspinningstoriesinanattempttodamageyourproposition,orpreferablytosmotheritbeforeitgetsestablished.”5

Virgin,however,hasshownitselftobearobustcompetitor.

Therearetwofactorshere.ThefirstisthatBransonhasneverc01.indd29

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beenpreparedtoletthebigguyswalkalloverhim.Butsecond,andjustasimportant,hepickshisbattlesvery,verycarefully.

Facedwithanaggressivecompetitor,theBransonstrategyissimple.Makealot

ofnoisetoirritatehimsothathetriestoswatyou,andthensitbackandwaitforhimtomakeamistake.Oncehedoes,hithimhardwhereitreallyhurts.Thisisatechniquehehasusedtogoodeffectonanumberofoccasions.(Ithelpstohavesomeexcellentlawyers,too.)

HIT’EMWHEREITHURTS

Inanumberofcases,Bransonhasusedguerrillatacticsagainstalargerrival.WhentheairlineVirginAtlanticstarted,promotionalactivitiesweretargetedtoscorepointsoffthemuchlargerBritishAirways.Toosmalltobeaseriouscompetitoratthattime,Virginneverthelesstalkedagoodfight.

TheBAmanagementculture

atthattimecanbedescribedasrobustifnotdownrightaggressive.AtBA’sheadquarters,Bransonwasseenasanupstartwithrathertoomuchtosayforhimself.

Worsestill,hehadnoexperienceofrunninganairlineandhadidentifiedhimselfwithFreddieLaker,anotherupstart,whoseairlinehaddonemuchtobringdownthepricesoftransatlantic

faresbeforegoingbust.AnumberofcheekypublicitystuntsandcarefullywordedBransonsoundbiteswereboundtogetundertheskinoftheBAmanagement.

Whathappenednextisstillunclear.ItwouldappearthatasmallcadreofmanagerswithinBAbecameincensedbywhattheyregardedasanaffronttotheircompany.Apparently,thisledto

seriouserrorsofjudgement,includingtheuseofsomesharpc01.indd30

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31

competitivepractices–ordirtytricks–aimedatunderminingVirgin’sbusiness.Facedbyaseriousthreattohisairline,andquitepossiblytherestofVirgintoo,Bransoncameoutfighting.

IntheUS,hecouldtakeadvantageofthe“excellentanti-trustlaws”topursueBAthroughthecourts.ButinBritainheoptedtofightona

differentbattlefield.KnowingfullwellthattheUK

competitionlawsarenotasstrong,hedecidedtoshameBApublicly.

BransontoldthepressthatBAwaswagingadirtytrickscampaignagainstVirginAtlantic.Buttheallegationsseemedsofar-fetchedthattheBritishpressdidn’tknow

quitewhattomakeofthem.

Finally,however,adocumentarymakerstartedtoinvestigatetheclaims.Theresultingprogrammewascalled“ViolatingVirgin,”andprovidedcorroborativeevidencetobackupBranson’sclaimsofadirtytrickscampaign.

WhenthedocumentarymakerapproachedBAto

commentonhisfindings,aletterfromaBAspokesmanclaimed:“hehadfallenintothetrapofbeingusedforRichardBranson’spropa-ganda,whichsetsouttocontrivecontroversywithBritishAirwaystocreatepublicityforhimselfandhiscompanyandinflictseriousdamageonthereputationofBA.”

Inanattempttoreassureits

employees,BAthenpublishedtheletterinitsin-housenewspaperBANews,andthecompany’smediaspokesmanalsodraftedaletterforBA’schairmanLordKingtosendtothosewhohadwrittentohimaboutthedocumentary.TheletteraccusedBransonof“continuingtomountacampaignagainstusthroughthemedia”andadded“ItappearsMrBranson’s

motivationistocreatepublicityforhimselfandhisairline.”

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Thecompetitionhadjustmadeamistake,andRichardBransonwasabouttopunishthemforit.Citingtheletters,BransonissuedawritforlibelagainstBAanditschairman.

NicciGerrardon

Inearly1993,BritishAirwayssettled

thelibelactionfor£610,000

–atthe

Branson

time,thehighestsumeverpaidin

versusSnowden:

Britainasalibelsettlement–plusall

“Acharacterfrom

legalcosts.Thefinalbillwasprobably

ChariotsofFire

over£5million.

haddefeateda

But,asonenewspapernotedin1993:

characteroutof

“TheDirtyTricksaffairwonBranson

Goodfellas.”

morethanjustthe£610,000indam-

agesandpublicapologyfromhis

arch-enemyLordKing.Italsoboostedhisappealtoapublicthatinstinctively

backedthesmallguyoverthebullyinggiant.

NoweveryonewantsasliceoftheBransonmyth.”6

Morerecently,Bransonwasontheotherendofalibelaction,butstillcameoutontop.ThecasewasbroughtagainstBransonbyGuySnowden,chairmanoftheAmericangamingcompanyGTech,andamemberofthe

boardoftheUKlotteryorganizerCamelot.AfterBranson’sownbidtoruntheUKlotterythroughaconsortiumhadfailed,heallegedthatSnowdenhadtriedtobribehimtopulloutoftheracetoruntheUKNationalLottery.Snowdendeniedtheallegation,andsuedBransonforlibel.

Thisprovedamistake.Onebarristercommentedthat,

fromthedefendant’spointofview,RichardBransonisthenightmareplaintiffinalibelcase.OfallfiguresinBritishpubliclife,hehasthepurestreputationandisgenerallywell-likedbythepublic.

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33

Withitsfondnessforheroesandvillains,TheBritishpresscharacterizedSnowden

asavillain;RichardBransonasthepeople’schampion.HishighcourtvictoryledtoSnowdenstandingdownfromhispostatCamelot.Bransongavethe£100,000damagesfromthecasetocharity.

Onejournalistnotedatthetimethat“AcharacterfromChariotsofFirehaddefeatedacharacteroutofGoodfellas.”7


PickingonthebigguysisalmostanarticleoffaithforVirgin,butitalsoplaysanimportantroleinBranson’ssuccess.Alongwiththeobviousdownsides,attackingdominantmarketpositionshassomeimportantupsides.Marketsdominatedbybigplayerstendtohavefatprofitmargins,withplentyof

scopetomakemoney.TheyalsoenableVirgintoplaytheroleoftheunderdog,somethingthatworkstoitsadvantagewithconsumers,employeesandthemedia.

ThefirstlessonoftheBransonbusinessstrategyis:

◆

Makebusinessacrusade.Bransonhasaremarkable

abilitytoclothealmosteverythinghedoesinacrusadingcloak.ThislendstheVirginbrandmoralauthority.

◆

Hoistapirateflag.OthersseeBransonmoreasabuccaneerthanacrusader.Hisappealisseenasalackofrespectforfiguresofauthority,combinedwitha

gleefulsenseoffunandthepleasureofbeinganirritanttobigbusiness.

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◆

Playtheunderdog.It’shardtothinkbadlyofamanwhopicksoncompaniesthatare,oratleastappeartobe,biggerthanhis.

◆

Pickyourbattles.Althoughhegivestheimpressionthathelikestoclimbbusinessmountainssimplybecause

“theyarethere,”inalmost

everycaseBransonisrespondingtospecificbusinessopportunitiesthatpresentthemselves.

◆

Hitthemwhereithurts.Inanumberofcases,Bransonhassuccessfullyusedguerrillatacticsagainstalargerrival.

NOTES

1

Hoskings,Patrick,writingintheIndependent.

2Brown,

Mick,

RichardBranson:TheAuthorizedBiography,4thedn,Headline,UK,1998.

3Mitchell,

Alan,

LeadershipbyRichardBranson,AmropInternational,1995.

4

Branson,Richard,BBC“MoneyProgramme”lecture,July1998.

5

Branson,Richard,BBC“MoneyProgramme”lecture,July1998.

6

Davidson,Andrew,“Virgin’sAngel:TheriseandriseofRichardBranson,”SundayTimesMagazine,May30,1993.

7

Gerrard,Nicci,“WhydoweloveRichardBranson,”TheObserver,February8,1998.

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TWO

DOTHEHIPPY,HIPPY

SHAKE

“WhenIstarted,Ididn’trealizetherewasadifferentwaytobeabusinessperson.Nowmybusinessisusingitscredibilityandpowertomakeourworldabetterplacetohangoutin.”

–BenCohen,co-founderof

Ben&Jerry’sHomemade1

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DOTHEHIPPY,HIPPYSHAKE

37

Withhisinformalstyleandnonconformistattitude,RichardBransonhasbeencalleda“hippycapitalist.”AproductoftheswingingSixties,hisaversionto

wearingasuit,inparticular,hasledtohimbeinglinkedtoother“newagemanagers”includingAnitaRoddickofthenaturalcosmeticscompanyBodyShopandthosepurveyorsofloveandicecream,BenCohenandJerryGreenfieldofBen&Jerry’sHomemade.

Inthe1960s,BransonmarchedontheAmericanEmbassyinLondoncalling

foranendtotheVietnamWar–asdidmanyotherlong-hairedyoungmenandwomen.HealsousedhismagazineStudenttovoicetheviewsofliberalreactionariessuchastheactressVanessaRedgrave.ButhewasmoreattractedbythebuzzandexcitementofLondonatthattimethanheeverwastothehippycause.

InBranson’scasethehippy

tagismisleading.Inreality,hisaffinitywithflowerpowerandthe1960smovementislessacommitmenttoahardandfastsetofprinciplesorpoliticalbeliefs,andmuchmoretodowithbeingintunewiththetimes.Thissenseofbeingpartofwhateverishipandtrendyisoneofhisgreatestbusinessattributes.IthasallowedhimtoprojecttheVirginbrandasa“cool”

alternativetowhateverthesuitsareoffering.

Bransonhasalwaysbeenuncomfortablewiththehippylabel.

Moreaccurately,heisandalwayshasbeenanti-corporate.Hehasahealthydisrespectforthehubrisandbullshitofbigbusi-c02.indd37

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38BUSINESS


ness.Inparticularhehasnotimeforthosewhohidebehindsuitsandties,orforbusinessschoolgraduateswhothinkthatmanagingabusinessisjustaboutnumbers.

Lookingaroundhimatthe

Britishbusinessestablishmentinthe1960s,hedidn’tmuchlikewhathesaw.“Apartfromafewexceptions,post-warBritainhasbredadomesticcommercialculturethatisanti-competitive,cartel-based,andpatriarchal,”Bransonnotes.Fromthestart,heappointedhimselfastheofficialde-bunkerofthatculture,andhasmadehisfortunebyprovidingan

alternative.

Hereagain,factandfictionfusetocreateanimpressionofBransonthatisteasinglyopentointerpretation.“Achildoftherevolutionary1960s,he’sforgedauniquesynthesisoftheyouthrevolution’svaluesandtheneedsofamodernbusiness,”2saysonecommentator.

Bransononthe

Alternatively,ashisbiographerMick

Britishbusiness

Brownobserves,hesimply“absorbed

establishment:

theidealismoftheeraandassimilat-

editintoahazybenevolence,‘todo

“Apartfromafew

somethingforyoungpeople’–par-

exceptions,post-

ticularlyifthatsomethingprovided

warBritainhas

fun,excitementandachallengefor

bredadomestic

himself.”

commercial

Bransonwouldhavebeendrawnto

culturethatis

whateverwashappeningatthetime.

anti-competitive,

Inthe1960sitwasinevitablethathe

cartel-based,and

wouldbeinvolvedinthehippyscene.

patriarchal.”

Hisantennaalwayspickupthelatest

crackleofenergy–andheusually

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39

slapstheVirginbrandonthesource.Intheearly1970s,forexample,hisrecordlabelsignedMikeOldfieldandTangerineDream.Later,ithelpedputPunkonthemap,signinguptheSexPistolswhentheotherrecordlabelsthoughttheyweretoo

controversial.

Asonejournalistnoted:“itisasifwegotitthewrongwayroundallalong.Insteadofahippyenteringtheworldofbusiness;itwasabusinessmanwhoenteredthehippyworld(andthePunkworld,andthenanyothergapinthemarkethehappenedtosee.)”3

Bransonisn’tthatinterested

inpolitics,althoughhispopularityandinfluencewithyoungerpeoplemeanthatpoliticiansbeatapathtohisdoor.Inthe1980s,hewasphotographedwithMargaretThatcher.Buteventhoughshelikedtoseehimasanexemplarofherpolicies,thetwowereneverclose.Morerecently,Bransonhasbeenlinkedwith

TonyBlair’sgovernment.

“Insteadofahippy

Thetruthisthatheisnotparticularly

enteringtheworld

interestedinideologies.Pragmatism

ofbusiness;itwas

istheBransoncreed,apointre-

abusinessman

flectedinhiswillingnesstoworkwith

whoenteredthe

governmentsofdifferentshades.At

heart,heisleftofcentreonsocialis-

hippyworld(and

sues,butnotfanaticallyso.“Isuppose

thePunkworld,

Iamleft-wing–wellonlytotheextent

andthenanyother

thatIthinkleft-wingviewsaresane

gapinthemarket

andrational,”hetoldtheleft-leaning

hehappenedto

Guardiannewspaper.“Utopianbut

almostapolitical”ishowoneformer

see.)”

employeedescribeshim.

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DON’TBEABREAD

HEAD

“Moneyisnothismotivation,”saysafriendwhohasknownBransonfor25years.“Itisnotanecessity.Hecouldcopefinewithoutit.”Andhedoes,travellingtheworldwithoutanycashonhim.

Someseethisastheaffectationofamillionaire,butotherssayBranson’sonly

realinterestinmoneyisasawayofmeasuringhisachievements.Somehow,too,he’spersuadedothersthatmoneyisn’tthemostimportantthing.

Virginhasalong-standingtraditionofnotoverpayingitsstaff.

Manyemployeeshavebeencontenttoworkforlessthanthegoingmarketrate

becausetheyenjoythebuzz.(Thecompanyalsotriestoprovidealong-termcareerforthosewhoremainloyal.)ThecousinofoneemployeewhoworkedonBranson’sfirstcommercialventure,forexample,recallshisinitialimpressionsofthefledglingentrepreneur.OnarrivinginAlbionStreet,wherethemagazinewasbased,hewassurprisedtobegreetedbyBransonwithakiss.“I

thought,Christ,thisisodd,butalsowhataninterestingandexcitingplacetobe–becauseitwasafriendlykiss.”

Itneededtobe,4becausenobodyonthemagazine’sstaffwasbeingpaidasalaryatthattime.ManyhaveremarkedonBranson’sextraordinaryknackforgettingpeopletoworkforlittleornofinancialreward

andnootherobviouspersonaladvantage.Anumberputitdowntoacuriouslyinspiringsensethatitwassomehowforthegreatergood,andinsomewayfurtheredthecauseofsomenobleidea.Butnobodycouldeverquiteputtheirfingeronwhatitwas.Bysomeingeniousmethod,Bransonconvincedtheseotherwiserationalindividualsthattoforgofi-

nancialrewardwas“fun.”

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41

Hedoesn’tlikepayingbigexecutivesalarieseither.Eventhoughhehasmadeseveralofhislong-termmanagersmillionairesbygivingthemastakeinthebusiness,heiscannyaboutusingfi-

nancialcarrots,andisastuteenoughtooffersharesinindividualbusinessesworthmuchlessthanastakeinthegroup.

Despitehiswealth,Branson’sownappetiteformaterialthingsissurprisinglymodest–bybillionairestandards,atleast.True,hedidownaCaribbeanIslandwhichisnowownedbytheVirginGroup,andhasseveralhomesaroundtheworld,butunlikeotherveryrichmenhedoesn’tflaunthiswealth.Hedoesn’tcollectpricelessworksofart,carsorhorses(somerarespeciesofduckat

hisOxfordshirehomedon’treallycount).Hehatesshoppingforclothes,andisfamousforwearingcheapshoesandtastelessjumpers.Thesedays,hepreferstolethiswifeshopforhim.

Sometimes,saythosewhoworkwithhim,hecanbearrogant,butheisneverflash.Healsoshowslittleinterestinhangingoutwiththeinternationaljetset–

althoughhisinterestsinthemusicbusinessmeanhebumpsintotheoddrockstarhereandthere,usuallyathisownparties.AsoneVirginemployeeobserves:“Heseeseverythingasagame.HeregardslifeasacosmicversionofMonopoly.”5

NOJACKETREQUIRED

Branson’sdislikeofwearingasuitandtieislegendary.

Thesedays,thetrademarkpatternedsweatersarelessevident.Thelookisstillcasualthough–usuallyanopenshirtandsportsjacket.

Hemayhaveputonapin-stripeandbowlerhattopromoteVirginshareswhenthecompanywasfloated,buthisideaofpowerdressingremainsresolutelylowkey.

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Hereagain,though,heisnot

thehippypeopletakehimfor.Theyoungentrepreneurwasmorenerdthanbeatnik.“Theoutsizejumperanduntidyhaircut,theblack,horn-rimmedspectacles,fracturedatthebridgeandheldtogetherwithSellotape,gavehimtheairofaperpetuallygenialschoolboy–anairwhichhehasneverquiteshakenoff.”MickBrown,notesinhisbiographyofBranson.6

Hisinformaldresssensestandsoutfromthecrowd,somethingthatworkstohisadvantage.Thereisonestorythatepitomizeshisinversepowerdressing.IntheearlydaysofVirgin,thesightofpony-tailedmenandwomeninjeansandtanktopswalkingintoCoutts,oneoftheoldestandmostconservativeBritishbanks,becamearegularsight.Itwasnaturalthereforethat

whenthecompanyexperiencedacashflowcrisisthatthreatenedtoputitoutofbusinessthatitshouldturntothebankforhelp.

AmeetingwasarrangedbetweenBransonandtheVirginaccountmanageratCoutts.Whenthedayarrived,theyoungentrepreneurturnedupforworkdressedasusualinjeansandT-shirt.“Richard,”

saidoneofhiscolleagues,“don’tyouthinkit’stimetoputasuiton?”TheyoungBransongrinned.“IfIsud-denlyturnupatthebankwearingasuitandtie,”heexplained,

“theywillknowwe’reintrouble.”Intheevent,Bransonstrolledintothemeetinginhisjeans,andinformedhisbankersthatthebusinesswasexpandingso

quicklythatheneededabiggeroverdrafttokeepupwithorders.Thebanktookonelookatthescruffy,self-assuredyouthandagreed.

AndrewDavidson,ajournalistwhointerviewedBranson,tellsanotherstorythatsumsuptheVirginchairman’sattitudetothestuffyBritishbusinessestablishment.7DuetogiveaspeechattheInstituteof

Directors’annualconferenceattheRoyalAlbertc02.indd42

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43

Hall,BransonwasansweringquestionsinamakeshiftofficeinhisHollandParkhome,wearinggreyslacks,cheapblackshoesandahand-knittedsweater.Thenfromtheroomnextdoor,hisassistantenquiresaboutthewhereaboutsofhissuit.Hegroans.

“DoIhavetowearasuit?”

“Withoutthinking,”Davidsonsays,“Itellhimhowyearsago,IwasoncethrownoutoftheInstituteofDirectorsforforgettingtowearatie.It’slikearedragtoabull.‘Right,that’ssettled,’

Bransonshoutsthroughtohisassistantinthenextroom.‘Nosuit,Penni.I’mgoingasIam.’Heknowsthat,asheisgivingoneofthekeynote

speeches,heishardlylikelytobeturnedaway.”

POWERTOTHEPEOPLE

OneareawhereBranson’ssixtiescredentialsaregenuineisinhistreatmentofthepeoplewhoworkforhim.Bransonisagreatbelieverinpeoplepower.HehasbuilttheVirginbrandonthepremisethatpeople–customersandemployees–

comefirst.

Heisaproductofthedemocratizing

idealsoftheSixtiesandhasaninstinc-

tivesensethatallpeopleshouldbe

Bransononthe

treatedwithrespect.Today,

compa-

interestsof

nieseverywherearebusydismantling

employees:

theirhierarchiesandeliminatingthe

“Staffshouldcome

outwardsignsofexecutiveprivilege.

first;ifitmeans

Ineschewingthetrappingsofstatus

andpowerfromthestart,Branson

making£5million

waswayaheadofthegame.

less,thenthatis

therightdecisionto

BransonlikestorefertoVirgin

make.”

employeesasbelongingtoalargeex-

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44BUSINESS


tendedfamily.IntheearlyyearsofVirgin,everynewemployeewasgiven

Branson’shometelephonenumber,andencouragedtocalliftheyhadanybrightideas–orcomplaints.Tothisday,everyoneinthecompanycallshimbyhisfirstname.

ItistypicalofBranson,too,thatwhenhisVirginMegastoreopenedinNewYork,theinvitationlistincludedthecrewsofallVirginAtlanticaircraftthat

happenedtobeintownthatnight.

AnotherclassicBransontouchwastoshareoutthe£610,000

settlementfromBritishAirwaysfromthedirtytrickslibelcase.

ThemoneywasdividedequallybetweenallVirginstaff.Eachemployee

received£166–knownasthe“BABonus.”Itsentamessagethattogethertheyhadallwonagreatvictory.

Bransonbelievesinkeepingfaithwithhisstaffingoodtimesandinbad.Employeeswholosetheirjobscanappealdirectlytothechairman,whohasbeenknowntointervenepersonallyifhethinkstheappealisjustified.Even

whentheairlinebusinesswasdepressedbytheGulfWarandtherecessionoftheearly1990s,VirginAtlanticwasanxioustoavoidredundancies,andmanagedtoavoidlayingoffanystaffbetween1991and1993.

“Wetriedtolookforeverywayroundthat,”saysBranson.“Somewentoffonhalf-paidleavewiththeunderstandingthatifthey

wantedtheirjobsbackwhenbusinesspickeduptheycouldhavethem.”

Interestingly,hehasmadeavirtueofthefactthatheretainsownershipofthemajorityshareoftheVirginempiretoprotectemployees.HisdecisiontotakethecompanybackintoprivateownershipafteritwasfloatedontheLondonStockmarket,heclaims,giveshim

morefreedomtobeacaringboss.

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45

“Thepointisthatasaprivatecompany,youcanmakedecisionswhichapubliccompanyfindsmoredifficult.Staffshouldcomefirst;ifitmeansmaking£5millionless,thenthatistherightdecisiontomake.It’slikeafamily.Whenpeopleusethewordfamilywithregardtocompaniesitisoftenextremelymisused.

Butifthegoingwastough,Iwouldneverthrowmychildrenout.

Everyonejustsharesabitless.Itshouldbeexactlythesamewithacompany.”8

SEXANDDRUGSAND

ROCK’N’ROLL

Fromthestart,theVirginbusinesswasrunona

deliberatepolicyofmixingbusinesswithpleasure.Fromitsearliestdays,theVirginphilosophyhasbeenworkhard,playhard.Foryears,theentirestaffoftherecordcompany,publishingcompany,andstudiomanagementteamwouldspendweekendsawaytogetheratthecompany’sexpense.StartingonaFridayandendingonaSundaynight,theywoulddecampto

acountryhotel.

AsTimJacksonnotesinhisbookVirginKing:“Attendancewasintheoryoptional,butthosewhodidnotcomeweretoldjokinglythattheywereexpectedtospendtheweekendworkingintheoffice.”

“Atthehotel,otherrecordcompaniesmightfillthedayswithtalkofsalestargets

ornewproducts.AtVirgin,businesswasbanned.Instead,theguestswouldspendtheweekendplayingtennisorgolf,swimmingandsunningthemselves,eatinganddrinkingwithgreatgusto,andtakingafewdrugsandsleepingwitheachotherintheevenings.”9

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46BUSINESS


ItwastypicalofBranson,too,thatwhenMayfairmagazineun-earthedsomenudepicturesofhiswifeJoantakenadecadeorso

earlier,hetookitinhisstride.Whereothermillionairetycoonsmighthavetriedtopreventthemagazinepublishingthepictures,Bransonwasdelightedthattheworldshouldknowhowbeautifulthemotherofhischildrenwas.10WhenaVirginemployeelaterteasedhimaboutthepictures,Bransonretortedthathehadaskedthemagazineforfull-color

enlargementsandplannedtoputthemonthewalloverhisbed.

TheofficesofStudent,Branson’sfirstbusinessventureafterleavingschool,aresaidtohaveresembledahippycommunemorethanamagazineoffice.Deadlinesslipped,thepublicationlostmoneyandeventuallyfailed,butthepeopleworkingonthepublicationhadagoodtime.

Whereothercompaniesmighthold“brainstormingsessions,”staffatthemagazineweremorelikelytositaroundandgetstoned.

Branson’snextprojectwasmoresuccessful,buttheattitudewasthesame.Accordingtoonesource:“Thenewenterprise–amailorderrecordcompany–wasconductedinanatmospherefilledwithmarijuana

smoke.11Thefirstorderofthedaywastorolljoints.Thecompany’sinspirednamewasconceivedduringonesuchsession.”

(WhetherBransonhimselfactuallyinhaledisdifficulttosay.ButonarecentBBCtelevisionprogramme,12hewasaskedwhethertherewasanyproductthattheVirginnamewouldneverbeusedtobrand.Hesensiblyducked

thequestion,butofferedthethoughtthatiflegalizedVirginwouldbemorelikelytoputitslogooncannabiscigarettesthanitwouldontobacco.)c02.indd46

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DOTHEHIPPY,HIPPY

SHAKE

47

Rock’n’roll,meanwhile,waspayingthebills.Notonlydidthecompanygoontoopenanumberofrecordstores,bythe1970stheVirginrecordlabelwasmakingaseriouscontributionatsource–discoveringthelikesofMikeOldfield,TangerineDream,

andBoyGeorge,andsigningtheSexPistols.Itevenattemptedtosignthosemastersoftherock’n’rolllifestyle,theRollingStones.(TheprofitsfromMikeOldfield’sTubularBellsandtoalesserextentTangerineDream’salbumPhaedrabankrolledtheentireVirginenterpriseandexpansionforthreeyearsaftertheirrelease.Later,therevenuefromsalesofCultureClub’srecords

madeamajorcontributiontotheVirgincoffers–releasingvastreservoirsofcashintothestrugglingVirginempire.)

Despiteitssize,thesocialaspectofthebusinessremainsimportanttothisday.Eachyear,BransonhostsaseriesofpartiesathishomeforalltheVirginemployees–everyonefromseniormanagerstoairline

crew,shopassistantstoaero-engineers,andsoftdrinksexpertstosecretaries.Theretheyarelavishlyentertainedwithafun-fair,barbecues,bouncycastles,puntingonthenearbyriverandotheractivities.ItisaVirgintradition,too,thatBransonhimselfendsupinthewateratleastacoupleoftimesinthecourseoftheweekend.

AsMickBrownsaysinhis

biographyofBranson:“Oneishardputtothinkofanyotherbusinessmanorcaptainofindustryinanyfield–LordHansonorDonaldTrump,AlanSugarorBillGates–whowouldentertainhisstafflikethis.Equallyitishardtothinkofanotherchairmanofanairlinewhowouldgreethispassengersatthedooroftheaircraft,ordressupinfulldragasastewardesstoservethemin-

flightdrinks.”

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48BUSINESS


SHAKEITUPBABY

AnothercommondenominatorofbusinessBranson-styleisthedesiretoshakeupthemarketsheenters–andtheestablishmentingeneral.ThesectorswhereVirginhassetupitsstallarerarelyeverthesameagain.ItisintrinsictotherebelliousBransonapproachtopicksectorsthatarecryingoutforinnovation.

Often,theyarecharacterizedbyalackofimaginationandalackofresponsivenesstotherealneedsofcustomers.Insomecases,thesadstateofaffairsisalmostacceptedbyconsumersassimply

“thewayitis.”ThenalongcomesBransonandsays,“itdoesn’thavetobethisway.”

AclassicexamplewasVirgin’sentryintotheUKfi

nancialservicesmarket.ItwashardtoimagineanythingmoreincongruousthanthepiratesofVirgintalkingaboutpensionsandinvestmentplans.Yet,onceitbecamecleartheywereserious,nothingseemedmorenatural:Virgin,thecompanywithseriousstreetcred,offeringyoungpeopleanalternativetothestuffybankersandinsurancecompaniesbyprovidingano

nonsense,nobullshitapproachtofinancialservices.

Toidentifytheopportunity,however,ittooksomeonewhoknewhowthefinancialcommunityworkedbutwasn’tpartofit.RowanGormleyhadjoinedVirginfromaventurecapitalcompanyin1991.ForseveralyearshehadworkedwithBransonsiftingthroughthe

hundredsofbusinessproposalsthecompanyreceives.HeknewtheVirginformula.ItwasGormleywhoapproachedhisbosswiththeideathatVirginshouldgetinvolvedinpensionsandlifeinsurance.

Initially,though,evenBransonthoughtthiswasgoingtoofar.Attheageof46,hehadneverhadapensioninhislife–andwith

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49

hismillionswasunlikely

evertoneedone.Hisfortune,afterall,wasbuiltonrisk-taking.Besides,therewasnothingsexyorfunaboutpensions.

ButGormleyarguedhiscasefromanotherstandpoint.Ahugeamountofthepaymentspeoplemadeforpensionsandlifeinsurancewentonadministrativechargesandoverheads,hepointedout.Fundmanagementand

investmentcompaniesalsochargedhugecommissionsforhandlingcustomers’money.ButanumberofnewventuresincludingDirectLineandFirstDirecthadshownthatdirectbankingandinsuranceviathetelephoneratherthanhighstreetbrancheswasaviablemodelintheUK.

Therewasanaddedappeal,too.Branson’sbrushwiththe

stockmarketwhenVirginwaslistedhadreinforcedasuspicionoftheinvestmentcommunity.Fundmanagerswhodecidedwhichsharestobuyandsellwerearrogantandoftenill-informedabouttherealvalueandprioritiesofthecompaniestheytradedin.Gormleyconfirmedthepoint,explainingthatsimplytrackingtheFTSEindexwaslikelytobemorefinanciallyrewardingthaninvestingina

managedfund.Virgin,then,shouldlaunchanindextrackingPEP(PersonalEquityPlan).

Withintheinvestmentcommunity,indexlinkedfunds,hetoldBranson,hadbeenawell-keptsecretforyears,partlybecausetheyhadbeenshownregularlytooutperforminvestmentfundmanagers.WithanindextrackingPEP,linkedtothe

performanceofthebestcompaniesonthestockexchange,investorscouldplaythestockmarketwithoutthehassleandhighcommissionsofbrokersorfundmanagers.Itwouldshakeuptheindustry.ThisappealedtoBranson.

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50BUSINESS


Whatatfirstsighthadseemedan

Bransonon

unlikelyventurewasinfactagaping

thelaunchof

holeinthemarket.Itsimplytookthe

VirginDirect:

Virginangleonthingstoseeitfor

whatitwas.“Ican’twalkpastafatand

“Ican’twalkpasta

complacentbusinesssector

without

fatandcomplacent

wantingtoshakeitupabit,”Branson

businesssector

said,onthelaunchofVirginDirect.

withoutwantingto

HewasbankingontheVirginname,

shakeitupabit.”

hesaid,toallaythedistrustthatordi-

narypeoplehavetraditionallyfeltfor

CityandWallStreettypes.

Thewholepointisthat

RichardBransonisnotabankeroranaccountant–orevena“grownup”intheconventionalsenseoftheterm–andnoraremostofVirginDirect’scustomers.ItisbecausetheyliketothinkthattheyhavesomethingincommonwiththeVirginchairman,thattheVirginnameappeals,andalsobecausetheytrusthimpersonally.

TheVirginPEPquicklybecamethefastest-sellingproductinthefinancialmarket.Initsfirstyear,VirginDirectsold£400millionofPEPsto75,000investors.Bytheendof1997,200,000peoplehadinvestedintheschemeandmorethan£1billionwasunderVirginDirectmanagement.

In2001VirginDirectjoined

withvirginmoney.comtocreatetheVirginMoneybrand.SincethenVirginMoneyhasbecomeamajorplayerinthefinancialservicesmarket.

ThecompanywasbroughtbackentirelyunderVirgin’scontrolin2004and,in2006,hadaroundonemillioncustomersand

£2.4billionoffundsunder

management.

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51

Thefinancialservicesmarketwillneverbequitethesameagain.


Withhisinformalstyleandnonconformistattitude,RichardBransonhasbeencalleda“hippycapitalist.”Ahippyhe’snot,butBranson’salternativemanagementstyleoffersthefollowinglessons

tothosewhoaspiretomakemoneynotwar:

◆Don’tbeabreadhead–there’smoretobusinessthanjustmoney.Despitehiswealth,Branson’sownappetiteformaterialthingsissurprisinglymodest.Somehow,too,hepersuadesothersthatmoneyisn’tthemostimportantthing.

◆Dressdowneveryday(not

justFridays).Branson’sdislikeofwearingasuitandtieislegendary.Hisinformaldresssensestandsoutfromthecrowd,somethingthatworkstohisadvantage.

◆Putpeoplefirst.Bransonisagreatbelieverinpeoplepower.HehasbuilttheVirginbrandonthepremisethatpeople–customersandemployees–comefirst.

◆Everybodymustgetstoned.Fromthestart,theVirginbusinesswasrunonadeliberatepolicyofmixingbusinesswithpleasure.Fromitsearliestdays,theVirginphilosophyhasbeenworkhard,playhard.

◆Don’timitate,innovate.AnothercommondenominatorofbusinessBranson-styleisthedesiretoshakeupthemarketshe

enters–andtheestablishmentingeneral.

ThesectorswhereVirginhassetupitsstallarerarelyeverthesameagain.

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NOTES

1BenCohen,TheGlobeandMail,May1988.

2Mitchell,Alan,LeadershipbyRichardBranson,AmropInternational,1995.

3Gerrard,Nicci,“WhydoweloveRichardBranson?”TheObserver,February8,1998.

4Brown,Mick,RichardBranson:TheAuthorizedBiography,4thedn,Headline,1998.

5Mitchell,Alan,LeadershipbyRichardBranson,AmropInternational,1995.

6Brown,Mick,RichardBranson:TheAuthorizedBiography,4thedn,Headline,1998.

7Davidson,Andrew,“Virginangel:theriseandriseofRichardBranson,”SundayTimesMagazine,May30,1993.

8Davidson,Andrew,“Virginangel:theriseandriseofRichardBranson,”Sunday

TimesMagazine,May30,1993.

9Jackson,Tim,VirginKing,HarperCollins,London,1994,p51.

10Jackson,

Tim,

VirginKing,HarperCollins,London,1994,p.

173.

11Rodgers,Paul,‘TheBransonPhenomenon’,Enterprisemagazine,March/April1997.

12“TheMoneyProgramme,”BBC,July1998.

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THREE

HAGGLE:

EVERYTHING’S

NEGOTIABLE

“…Hehadastreettrader’saptitudefornegotiation,

knowingexactlywhentotalkandwhentostaysilent,whentopresshiscounterpartonapointandwhensimplytowalkaway.”

–TimJackson,authorofVirginKing

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55

OneofRichardBranson’slesswellknowntalentsisarazor-sharpnegotiatingtechnique.Niceguys,sothesayinggoes,finishlastbutnotBranson.Despite–orperhapsbecauseof–hisMrNiceGuyimage,Bransonrarelycomesoutsecondbestinanyofthedealshemakes.Charismaandanaffablecharmbelieacalculating

businessbrain.

ItisnocoincidencethatofthebusinesspartnerswhohavenegotiatedfavorabletermswithBranson,anumberpreferredtoconductnegotiationsthroughtheirlawyersratherthanstrikeadealwithhimface-to-face.TheseincludeBranson’sowncousinSimonDraperwhowasresponsibleforsigningmanyofVirgin’smusical

discoveriesincludingCultureClub.

ItisnotthatBransonisintimidating–quitetheopposite;infact,heisamodelofaffability.Butwhatthosewhoknowhimrecognizeisthathiseasygoingstylehidesashrewdbusinessmindandafiercelycompetitivenature.Theseattributesarecomplementedbyanappetite

forhagglingthatwouldputaTurkishcarpetsalesmantoshame.

Thisiscombinedwithsurprisingpatienceinonenormallysoimpulsive,andtheabilitytopersuadeothersthatwhattheyarebeingofferedisn’tjustveryreasonablebutisactuallythebettersideofthebargain.Often,too,thereisastrongelementofcheekinvolved;

Bransonhasnoembarrassmentinaskingforfarmorethananyoneelsewoulddare.

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56BUSINESS


NICEGUYSFINISHFIRST

Askyourselfthis:whenmostentrepreneursendupgivingawaylargerandlargersharesintheirbusinessesinordertosecureadditionalinvestmenttogrow,howdidBransongrowhisempireandendupwithalargershareofthe

group?In1973,Bransonowned60percentofthemainVirginholdingcompany;by1995,heandhisfamilyowned60percentofamuchexpandedVirginempireworthinexcessof£1billion.

Thathehasachievedthisremarkablefeatisatestamenttohisshrewdnegotiatingskillsandpersuasivetongue.WhatBransonisverygoodatis

realizingwherethevalueofadealreallyliesandusingotherelementsasbargainingchips.ThefactthatVirginisawebofmainlysmallwithafewnot-so-smallbusinessesisagreatadvantagehere.Herealizedlongagothatofferingalargepercentageofasmallbusinessisinfinitelypreferabletogivingawaysharesinthegroupasawhole.

Butthe“atomizedempire”isjustonefactor.TimJackson,authoroftheunofficialbiographyofBransonVirginKing,notesacontrastbetweenBranson’sprivatestyleandhisexpansivepublicpersona.Heobserves:“Whentherewasbusinesstobedone,Bransonlovedtohaggle;hehadastreettrader’saptitudefornegotiation,knowingexactlywhentotalkandwhentostay

silent,whentopresshiscounterpartonapointandwhensimplytowalkaway.”

ThereistoBranson,too,ahighlycompetitivestreak,whichisalwayslookingtogaintheadvantage.Thisisvitalforanyentrepreneurofseriousambitionsandshouldbecultivatedbytheup-and-comingtycoon.InBranson’scase,itisaccentuatedbyanumberofother

characteristics.Mostimportantoftheseisanc03.indd56

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57

easycharmthatlullsallbutthemosthardenedofnegotiatorsintodroppingtheirguard.

Branson’sgreatskillasanegotiatorisoneofthosehappy(forhim)accidentsofbirth.Natureinallitswisdomsawfittobestowamarkettrader’smindonamiddle-classandseeminglyeasygoingsonofabarrister.NotonlydoesBranson

possessthewherewithaltostrikeameandeal,itispartofhispsyche.WereEnglishpublicschoolslessinterestedincompet-ingatcricketandrugbyandrather

“Whenthere

moreininstillingcommercialnous

wasbusinessto

intheirpupils,theymightconsider

bedone,Branson

inter-schoolnegotiatingmatches.In

thatunlikelyevent,RichardBranson

lovedtohaggle;

mighthavecaptainedhis

school.

hehadastreet

trader’saptitudefor

OnestoryillustratesBranson’smis-

negotiation.”

chievousdelightinnegotiating.

Intheearlydaysofthemailorder

recordbusiness,amantelephonedtoofferthecompanysomebootleggedJimiHendrixrecords.Thecallerwastoldtodropbyatthecompany’sofficesthenextdaytodiscussthedealwithaMrZimmerman.Whenthemanturnedupat10a.m.itwastobetoldbyanearnestRichardBranson

thatMrZimmermanwasatacaféjustaroundthecorner.

WhenthemanreturnedsometimelatertoreportthatMrZimmermanhadnotturnedup,Bransonexpressedsurpriseandinnocentlyaskedwhatitwashewantedtoseehimabout.Themanexplainedthathewasgoingtosellhimsomerecordsfor

£1apiece.“I’llgiveyou50p

each,”theartfulBransonsaid,andadealwasstruck.Withindays,theyweresoldtodevotedJimiHendrixfansbymailorderat£3each.

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58BUSINESS


CHEEKOFTHEDEVIL

WheneverheisnegotiatingBransonexpectstohaggle,alwaysputtinginalower–andsometimessignificantlylower–offer.

Onlargepurchases–country

mansions,aircraft,aCaribbeanisland–thatcanmakeaverybigdifference.Funnilyenough,manybusinesspeople,especiallythosewhohavespenttheirworkingliveswithinlargecorporations,don’texpecttocomeupagainstamarkettradermentality,amanwhowillhaggleforthesheerpleasureofit.

Branson’sbrilliant

negotiatingskillsalsopartlyexplainwhyVirginhasdonesowellfromjointventuresandotherpartnershiparrangements.Hischeekofthedevilnegotiatingskillhasbecomeahallmarkofthecompany.“No,”“never,”and“impossible”arenotwordsintheBransonbusinessdictionary.

“Whenthecompanywassmallandhewasstriking

agreementsonhisown,Bransonhadenoughcheektodemandfarmorethanheeverhopedtowin–butalsoenoughpatiencetoargueadealpointbytinypointiftheadversarysodemanded,”notesTimJackson.“Hewashighlyskilfulathidingbehindothers,tellingthosehewasnegotiatingwiththatitwastheobjectionsofhislawyersorhiscolleagues,ratherthanhisown

misgivings,thatmadehimunabletoagreetoaproposal.”

Onmanyoccasions,too,Branson’sabilitytocajoleothersintodoingwhathewantshasenabledhimtomakethingshappenthatmightotherwisehavebeenimpossible.Bransonisespeciallygoodatcuttingthroughredtape.Duringthepreparationsforoneofhis

hotairballoonrecordattempts,forexample,Bransonwasinformedthatavitaltestontheprototypeballooncouldnotbecarriedoutbecausetheaerospacecompanythatownedthec03.indd58

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59

testchamberhadbookeditouttoothercustomerseverydayforthenexttwoyears.Bransondemandedthenameandtelephonenumberofthechairmanofthecompany.Twohourslaterhecalledbacktosaythatnotonlywas

thechambernowimmediatelyavailable,butthatasagoodwillgesture,thenormalchargeof£25,000wouldbewaived.

TALKSOFTLYANDCARRYABIGSTICK

Forallhisbonhomie,therearethosewhosaythatRichardBransonisn’tnearlysonicetodobusinesswithasyoumightthink.

Thisisacuriousviewofoneofthemostsuccessfulbusinessmenthiscentury.Itwouldbenaïvetothinkotherwise.AnyoneconsideringgoingintobusinesswithVirginshouldaskthemselvesafewsimple–andratherobvious–questions.

Forexample:isthisthesameRichardBransonwhoafterthreedecadesremainsthe

unchallengedleaderofoneofthebestknowncompaniesintheworld–andstillownsabout60percentoftheequity?IsthisthesameRichardBransonwhohastakenmarketsharefromsomeofthemostaggressivecompaniesintheworld?

Thepointtounderstandhereisthatthisisnopussycatwe’retalkingabout.Itwouldbefoolishtothinkotherwise.

Youdon’tgettobewhereBransoniswithoutahardedgetoyourdealmaking.

WhenRandolphFields,ayounglawyer,broughtBransontheideaforVirginAtlanticAirways,theoriginalagreementwasthatbothmenwouldownhalftheairline.Duringthenegotiationsbeforetheairline’slaunch,however,BransonforcedFieldsto

accepta25percentshare;laterthesameyear,Fieldswasforcedc03.indd59

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60BUSINESS

THERICHARDBRANSON

WAY

tostepdownaschairmanofVirginAtlantic.AyearlaterBransonboughtoutField’sstakefor£1million.1

Bransonhasawell-developedsenseofwherethepowerliesinabargainingsituation.Onoccasion,hehasbeenknowntopresshometheadvantagewhenheknowsheholdsthebetterhand.

That,astheysay,isbusiness.AnyonewhothinksVirginisacharityshouldthinkagain.

ACTINGONGOODADVICE

WhileBransonhimselfseemstofloatfromonebusinessadventuretoanother,hereliesontheadviceofotherswiththeirfeetfirmlyontheground.BehindBranson’shappy-go-

luckypublicimagelurksnotjustacalculatingbusinessman,butonewhoknowsverywellthevalueofgoodprofessionaladvisers.

“I’mnotgoodwithfigures,”hesays.“Ifailedmyelementarymathsexam.”2

Hemaynotbeanaccountant,buthe

Anyonewhothinks

hasalwayssurroundedhimselfwith

Virginisacharity

peoplewhocandothesums.Ever

sincehisscrapewiththeBritishtax

shouldthinkagain.

authoritiesintheearly1970s,

which

Bransonmaynot

nearlylandedhiminjail,hehas

beanaccountant,

reliedonhavingtop-notchaccount-

buthehasalways

ants,lawyersandmerchantbankers

surroundedhimself

helpinghimdotthe“i”sandcrossthe

“t”sofhisdeals.

withpeoplewho

candothesums.

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61

WithintheVirginGroup,hehasalsoalwaysmadesurethattherewasateamofhard-nosedexecutivestofollowthroughandtieupanylooseends.Thesehaveincludedlong-termBransonaideDavidAbbott,anaccountantbytraining,andDonCruikshank,theformerMcKinsey&Co.consultantwhocameintogetVirginreadyforprivatizationandwentontoheadtheLondon

StockExchange.

SomepeoplehaveevengonesofarastosuggestthatBransonismoreinthralltohisadvisersthanevenVirgininsidersrealize.

AnumberofbusinesspartnershavebeenirritatedbyBranson’srefusaltobetieddowninacontract,andhisinfuriatinghabitofrenegotiatingterms.

OnedisgruntledbusinessmanwentsofarastoclaimthatmuchoftheVirginphenomenonistheproductofa“magnificentmanipulation”by“animpenetrableinnersanctumatthecentreoftheVirginempire.”

Ifso,itwouldhavetobearemarkableonethatcouldpullthestringsofsomeoneaswilfulasRichardBranson.

SILVERLININGS

ButthereisanotheraspecttoBransonthedealmaker.Whenitcomestosetupcosts,mostcannyentrepreneursseektocoverthedownsiderisk.Branson,ontheotherhand,wantstocovertheupside,too.Inhismind,everycloudcouldhaveasilver-platedlining.

In1984,forexample,Virgin

wasinthethroesofsettingupVirginAtlantic.Thefirsttaskwastoacquireanaircraft.Boeinghadc03.indd61

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62BUSINESS


aslightlyused747standingidleintheArizonadesert.Bransonwasquitesurethathedidn’twanttoowntheaircraftoutright(he’dseenwhathappenedtoFreddieLakerwhenhetriedtobuyaircraft)butnordidhewanttoincurheavypenaltiesiftheairlinedidn’tgetofftheground.Thedealthatwasput

togetherbyVirgin’slawyerswasnotastraightforwardone.3

ThejumbowouldbeboughtfromBoeingbyBarclaysBank,whichwouldthenbeabletoclaimthetaxallowancesfortheaircraft’sdepreciation.BarclayswouldthenleaseittoasubsidiaryoftheChemicalbankofNewYork,whichinturnwouldleaseittoVirginAtlantic.

New,theaircraftwouldhavecostaround$100million,butthepricenegotiatedbyBranson’spartnerRandolphFieldswas$27.8million.Byallaccountsitwasagooddeal,especiallysinceBoeingpromisedtobuyitbackfor$25millionafterayearortwoifVirginwanted.ButnotgoodenoughfortheVirginchairman.

Bransonwasadamantthat

Virginshouldbeabletobenefitfromtheupsideifaircraftpricesshouldrise.Athisinsistence,itwasagreedthatBoeingwouldhavetopaythemarketpriceforitifVirgindecidedtosell.

NOTES

1Jackson,

Tim,


16.

2

Branson,Richard,“MoneyProgramme,”BBC,July1998.

3Jackson,

Tim,

VirginKing,HarperCollins,London,1994.`

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HAGGLE:EVERYTHING’S

NEGOTIABLE

63


OneofRichardBranson’slesswellknowntalentsisarazor-sharpnegotiatingtechnique.Despite–orperhapsbecauseof

–hisMrNiceGuyimage,Bransonrarelycomesoutsecondbestinanyofthedealshemakes.Charismaandanaffablecharmbelieacalculatingbusinessbrain.ThelessonsfromtheBransonschoolofnegotiatingare:

◆Niceguysfinishfirst.Branson’sshrewdnegotiatingskillsandpersuasivetongueareaccentuatedbyaneasycharmthatlullsallbutthe

mosthardenedofnegotiatorsintodroppingtheirguard.

◆Nevertakenoforananswer.Branson’scheekofthedevilnegotiatingskillhasbecomeahallmarkofthecompany.“No,”“never,”and“impossible”arenotwordsintheBransonbusinessdictionary.

◆Talksoftlyandcarryabigstick.Forallhisbonhomie,

therearethosewhosaythatRichardBransonisn’tnearlysonicetodobusinesswithasyoumightthink.Thisisacuriousviewofoneofthemostsuccessfulbusinessmenthiscentury.Itwouldbenaïvetothinkotherwise.

◆Getgoodprofessionaladvice.BehindBranson’shappy-go-luckypublicimagelurksnotjustacalculatingbusinessman,but

onewhoknowsverywellthevalueofgoodprofessionaladvisers.

◆

Alwayscovertheupside.Whenitcomestosetupcosts,mostcannyentrepreneursseektocoverthedownsiderisk.Branson,ontheotherhand,wantstocovertheupside,too.Inhismind,everycloudcouldhavea

silver-platedlining.

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FOUR

MAKEWORKFUN

“Hecaptivatesthepublicandemployeesbytheunexpectedprospectofmakingthegreyworldofworksparklewithfunandexcitement.”

–AlanMitchell,from

LeadershipbyRichard

Branson

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MAKEWORKFUN

67

Business,inRichardBranson’sview,shouldbefun.ThisisanimportantfactorbothinBranson’sownappetiteforworkandthe

successofhisventures.Creatinganexcitingworkcultureisthebestwaytomotivateandretaingoodpeople;italsomeansyoudon’thavetopaythemasmuch.Thisisausefulasset,especiallyifyoudon’thaveareputationasabrilliantinventor,ormanagementvisionary,tofallbackon.It’sallverywellbeingclever,butallworkandnoplaymakesJackadullboy.Not

Richard.

Unlikethecomputerwhiz-kidsBillGatesandSteveJobs,Bransonhasneverinventedanyproductofarevolutionarynature.

NordoeshehavethecorporatekudosofaJackWelch,theformerCEOofGE,creditedwithturningthecompanyaround.

Branson’sachievementisactuallymoredifficulttoexplain.Alltheindustrieshehassucceededinareconventionaloneswithlittleincommonexceptthattheyarematureanddominatedbylargeplayers.SowhatisitthatRichardBransonknowsaboutbusinessthatotherpeoplewhohavebeenintheseconventionalindustriesforyearshavefailedtograsp?Moretothepoint,

whatdoesBransondothattheydonot?

TheanswerisBransoninspirespeople.Becauseheinspiresthem,hehastheabilitytomotivatethosewhoworkwithhimandpushthemtothelimit.Hepossessesaremarkableabilitytoenableotherstoachievewhattheydidn’tknowtheywerecapableof.WhatBransonisreallygoodatiscreating

energyaroundagoal–beitabusinessventureoraworldrecordattempt.Heexudesconfidenceandabeliefthatnomountainistoohightoc04.indd67

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climb.Curiouslyenough,peopleseemtolikethatevenmorethanmoney(forawhileanyway).

AREWEHAVINGFUNYET?

ThroughouthisbusinesslifeBransonhasmanagedtoportrayworkasasocial

activity.GoingtotheofficeatVirginisn’tthedrudgerythatitcanbeatothercompanies,oratleast,that’swhatBransonwantshispeopletobelieveandclearlybelieveshimself.“Igetthebestpeople,Iaskquestions,andthenIsay:

‘let’shavesomefun’,”heexplains.1

Intheearlydays,lowwages

andrun-downworkenvironmentswerecompensatedforbyregularwildpartiesandacarnivalatmosphere.Eventoday,thelinebetweenworkinglifeandsociallifeishardtodrawatthecompany.Virginstaffworkhardandplayhard.

Thereismethodinthemadness.WhenyoublurthedividebetweenworkandplayasBransondoes,you

begintobreakdownthedividebetweenwhatmatterstopeopleintheirprivatelivesandwhathappensatwork.Peopledon’tresentworkinglonghoursiftheybelievethattheyareachievingsomethingforthemselvesandthepeopletheycareabout.

AnotherimportantaspectoftheVirgincultureisitscheekysenseofhumor–

somethingthatextendstoitsbrandvalues.

Bransonhimselfhasareputationforplayingschoolboypranksofthenot-so-subtlekind.Storiesofhisanticsarelegion.

Ononeoccasion,sothestorygoes,hethoughtitwouldbeentertainingtoplayatrickononeofhisseniormanagersandclosestc04.indd68

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adviserswhowasawayforafewdays.

Bransonon

Theplanwastosneakintotheman-

ager’shomeatnightandremoveall

theoffice

hisfurnitureandpersonal

belong-

environment:

ingssothatwhenhearrivedhomehe

“Igetthebest

wouldthinkhe’dbeenburgled.

people,Iask

questions,andthen

WhatBransondidn’tknow,however,

wasthathisplanhadbeentumbled,

Isay:‘let’shave

andarrangementsmadetoturnthe

somefun’.”

jokeonhim.Onhisarrivalatthead-

dress,hewasmetbythepolice,who

arrestedtheprotestingVirginbossandlockedhimupforthenight.Inthemorning,theentireVirginstaffwentdowntothepolicestationtobailhimout.Hisreleasewasgreetedwithloudapplause.

Branson’ssenseofhumorhaslandedhimintroubleonotheroccasions,too.Oneofhistrademarkpartytricksistoseizeholdofglamorousguestsandturnthemupsidedown.IvanaTrump,formerwifeoftheAmericanbillionairebusinessmanDonaldTrump,stillhasn’tforgivenBransonforhangingherupsidedownoveraswimmingpoolinfrontofhundredsofguestsatablack-

tieparty.

Thestoryofhis1992meetingwiththelateSirJamesGoldsmithshowsthathejustcan’thelphimselfsometimes.TwomoredifferenttycoonsthanBransonandGoldsmithwouldbehardtoimagine.Bransonthehippy,whobuilthisempirebygrowinghisownbusinesses,meetsGoldsmith,thecorporate

raiderandtakeoverbaron.InvitedtoGoldsmith’sretreatinMexico,Bransonpushedthebillionaireintotheswimmingpoolonthefirstc04.indd69

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morning–afterpromisingnotto–andwaspromptlyaskedtoleave.JoanBranson’sonlycommentwas“ThankGod.”2

ThestoryshowsBranson’srecklessdisregardforthebusinessestablishment.(Othershaveobservedthatitwasanoutstandingexample

ofmanmanagement.)

LET’EMLOOSE

Hehasalwaysbeenpreparedtohirebrightyoungpeoplewithnoproventrackrecord,andletthemlooseonprojects.IntheearlydaysofVirginMusic,therecordlabel,forexample,Bransonwashappytotakepeoplewhohadlittleformalexperienceoftheindustry

buthadarealloveofmusicandpassionformakingrecords.Unsupervised,theywouldputhugeeffortandenergyintotheirwork–tojustifythecompany’sbeliefinthem.Itwascommoninthosedaysforstaffatthecompanytoturndownjoboffersfromothercompaniesthatwouldhavedoubledtheirsalaries.Thereason?TheyenjoyedworkingatVirginsomuch.

Empowerment–delegatingdecision-makingauthoritytostafflowerdowntheorganization–becamefashionablewithmanagementgurusinthe1980s;ithasalwaysbeeninvogueatVirgin.

Fromtheverybeginning,Bransonhassurroundedhimselfwithtalentedpeopleandgiventhemthefreedomtobecreative.

Timeandtimeagain,theyhaverewardedhisconfidencewithdazzlingresults.

TaketheexampleofSimonDraper,Branson’sSouthAfricancousinandlong-timeheadoftheVirginrecordlabel.DraperitwaswhospottedmanyofVirgin’sgreatestmusicaldiscoveries,includingMikeOldfield,TangerineDreamandCultureClub.

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Yetwhenhejoinedthecompanyhehadnoformal

trainingorexperience,justhisenthusiasmformusictoguidehim.Onoccasions,too,DraperhadtotellBransonwhyacertainartistwouldnotfitwiththelabel’savantegardeimage.Formanyyears,VirginMusic,duelargelytoDraper’sfreedomtosigntheartistshewanted,bankrolledtheentireVirginempire.

Asimilarapproachcascades

downtheorganization,withVirginemployeestypicallyhavingfarmorediscretionarypowerthanstaffinothercompaniesatthesamelevel.VirginAtlanticcabincrewaremuchmorelikelytousetheirinitiativethanthosefromcertainotherairlineswhohavetofollowcompanydictattotheletter.

Bransonusesthephysicalenvironmentatworkto

reinforcetheVirginculture.Thecompaniesthatmakeupthegrouparelocatedinbuildings–bighousesratherthanofficeblocks–thatresonatewithinformality.Theyhavebeenlikenedto“hippyhideouts.”3

Bransonalsousesanunorthodox“loose”organizationalstructuretogiveemployeesfreerein.Virginismadeupofacluster

ofsmallcompaniesthatoperateindependentlyofeachother.

Thiscreatesmorefreedomformaneuver.Employeesoftenworkharderinsmallentrepreneurialgroupswherethewholeheartedcontributionofeveryoneisvitaltothesuccessofall.ThereisnoroomforcoastingorpassengersatVirgin.

Becausetheyareinfriendlycompetitionwithotherpartsofthegrouptoo,thedifferentVirginbusinessesareencouragedtobehaveinamoreentrepreneurialmanner.Thisalsorestrictsinterferencefromthecentre,makingitmoredifficultforseniorVirginexecutives(apartfromBranson)tomeddle.Inthiswayc04.indd71

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hehascreatedtheclassic“divideandrule”model,whichallowshimtogivehispeopletheirheadsbutmaintainabsolutecontrolwhilstalsopreservinghiscult-likestatus.

CALLMERICHARD

TotheaverageVirginemployee,Branson,thecompany’schairmanandmajorshareholder,issimplyRichard.Thesecretwithpeople,hesays,istopraiseratherthancriticize(somethinghesaysappliestobringingupchildren,too:“Childrenandcompaniesflourishunderpraise”4).

IntheearlydaysofVirgin,whenemployeeswantedto

formatradesunion,Bransonissaidtohavebeentrulyhurt.Hewantedallhisemployeestobeabletodiscussproblemswithhimpersonally.Aboveall,hewantspeopletotrusthim.

VisitorstohisofficeinHollandParkhaveremarkedthatheisuncommonlycourteoustothepeoplewhoworkwithhim.Heworkshisstaffhard,butunlikemany

othercompanychairmenhehasresistedthetemptationtoorderhissecretariesandassistantsaroundasiftheywereservants.Heisfamouslyapproachable,andpeoplecallinghisofficeareaslikelytofindthemselvestalkingdirectlytoBransonastheyareto

asecretaryorassistant.

Branson

onpeople

AsSimonLester,formermanag-

management:

ingdirectorofCottEurope,the

“Childrenand

companythatprovidedtheoriginal

formulaandexpertiseforVirgin

companiesflourish

Cola,explains:“Heisreallyquitean

underpraise.”

extraordinaryfellow.Hecontinually

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surprisesyouwithhisbehavior.Whenhefirstcalled,hetelephonedthroughdirectly:nosecretary;no

normalcorporateblockages,whichimmediatelyknocksyouoffyourstrideandmakesyouthink,howunusual,howdifferent.

“Andwhenyoumeethim,youexpecttomeetthisunbelievable,powerfulmoderndayicon,andhe’sjustthemostcharmingindividualinaveryordinaryway.Hestuttersafairamount.Heisnotapower

monger.Heisjustareallyniceguy.Andunder-neathyouknowheisoneofthemostdeterminedandenergeticpeoplethatyoucouldpossiblywishtomeet.”

ItishislackoffrontthathasenabledBranson,thepublicschoolboyofprivilegedupbringing,tocourttheadorationofhisstaffaswellasthegeneralpublic.Hispopularitycrossesclass

barriers.Butitgoesdeeperthanthat.PeopleseeinBransonabusinessleaderwhoismotivatedbyahigherpurpose;someonewhoembodiesasetofvaluesandispreparedtostandupandbecounted.ThisisanimageBransoncultivatesasitprovidestheidealcounterbalancetothefrivolousfunandgames.

NOPAIN,NOGAIN

Partiesandpranksarenosubstituteforhardwork,ofcourse.

WhattheydoachieveistosetthemoodandcultureofVirgin.

Theothersideoftheequationiscreatingasenseofchallenge.Byinspiringhisstaff,Bransongetsexceptionalperformancefromthem,withsalesand

profitlevelsfaraboveindustrystandards.

Here,thewaytheVirginempireisstructuredisimportant.

Bransonexplains:“Whenacompanygetstoacertainsize,insteadoflettingitgrowbiggerandbiggerandputtingitintoc04.indd73

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biggerandbiggeroffices,Iwilltake,say,theassistantmarketingmanager,theassistantmanagingdirector,theassistantsalesmanager,

andI’llsay:you’renowthemanagerofanewcompany.ThiswasthecasewithVirginrecordswhichwaseventuallydividedintofivecompanies.”5

ThispolicyofpromotingtalentedpeoplefromwithinencouragesVirginstafftogivetheirallinthehopethattheywillbenoticedbythecompany’schairmanandgivenanopportunityreallyto

shine.ButanotheranecdoteshowsanothersidetoBranson:themastermotivator,pushinghisemployeestotheirlimits.

Bransonlikestoattempttheimpossible.OnoneoccasionhetelephonedthemarketingdirectorofVirginAtlanticandaskedhimtoplaceanadintheLondonEveningStandard,onlytobetoldthatitwastoolate,andthatthey

hadmissedthenewspaper’scopydeadlines.Bransoninsistedthathismarketingmanagerdohisbestallthesame.Theskepticalemployeespenttheentiremorningonthetelephone.Throughasuperhumaneffortonallsides,anaddidjustmakethelasteditionoftheStandard.Onhearingthis,Bransonthankedhismarketingmanagerforhisefforts;buttherewasan

unmistakablenoteoftriumphinhisvoiceashedidso.6

Themessageisclear.Bransonwantsandexpectsthepeoplearoundhimtodotheirbesttoachievewhatevergoalshesets,ratherthanargueoverwhethersomethingcanorcannotbedone.Butthen,doingtheimpossibleispartoftheVirginculture,somethingthatisreinforcedby

Branson’sownrecord-breakingfeatsandderring-doinspeedboatsandhotairballoons.

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THEMAGICALMYSTERYTOUR

PartoftheappealofVirginasanemployerandasaconsumerbrandisthepromiseofanadventuretobehad.Everythingaboutitslarger-than-lifefounderresonateswiththe“Boy’sOwn”

heroesfromchildren’sstories.PartBigglesandpartpirate,Bransonbristleswithfunandadventure–somethinghehasbroughttoeveryindustryVirginhasentered.

Thereis,too,anauraofexcitementaboutdoingsomethingnew.“WhatIlikemostofallistolearn,”Bransonsays.“WhenIfeelthatI’velearntwhatthereis

toknowabouttelecommunica-tions,orairlines,orcosmetics–wellyounameit–thenImoveontosomethingelse.It’slikebeingatuniversity,whichIneverwentto,andtakingcrashcourses.”7

ThewholeVirginphenomenon,forhim,isamagicalmysterytour.It’sajourneythathasalreadylasted35years.IfVirgin

wentbankrupt–“anditdidnearlygobankruptduringthedirtytrickstime,andthat’swhyIhadtoselltherecordcompany”hesays

–hewouldn’tmindsomuch.“Iwouldpackupmybagandtakethefamilyonanadventure.SouthAmerica.I’veneverbeentoSouthAmerica.Itwouldbefun.”

Butasmoreandmorepeople

getonthebus,thepressureonthedrivertotakethemsomewheredifferent–somewherefun,butalsosomewhereupliftingandunspoiledbytheexcessesofcapitalism–increases.

Todate,BransonhaspersuadedcustomersandemployeestoboardtheVirgintourbussimplybecauseitofferedanadven-c04.indd75

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turethatwassomethingdifferenttowhatthesuitswereoffering.

Inthefuturehemayfindthatpassengersexpecthimtohaveadestinationinmind–akinder,morecaringversionofwhatbusinessisfor,perhaps.Thislegacyseemstooccupyhimmorethanitusedto.

Increasingly,heseemstosensethatsomesortofexplanationofwheretheadventuremightleadisexpectedofhim.Thisis

startingtoshowinhisrhetoric.ThegreatquestionforBransoniswherenowforhisvisionofbusiness?WillVirginsimplycrumbletodustwhenhevacatesthepremises,orhashebuiltalastingmonumenttoanewformofcapitalism?

Thebrashadventurerisbeingaskedtoputhistelescopetohisgoodeyeandtelltheworldwhatheseesjustover

thehorizon.

Bransonisstartingtothinkaboutwhatitallmeans,andhisplaceinhistory.

Heisanadmirerofwhatheregardsasotherlike-mindedbusinesses.HedetectsakindredspiritatthefamouslyeccentricSouthwestAirlines.Asherecentlyexplained:“Southwestemployeeshaveboughtintothecompanyfor

theprinciplesforwhichtheairlinestands.Apieceoflegislationthatadvocateshigherlandingfees,forexample,isn’tseenjustasanaffronttotheirprofitability;it’salsoanaffronttotheiridealism.Theyarefirmlyentrenchedintheideathatprofitabilityistheprecursortojobsecurity,shareholderreturn,andinvestmentinthecommunity.Theyareinthebusinesstomakea

difference.Thisiswhatabrandshouldstandfor.”8

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MAKEWORKFUN

Business,inRichardBranson’sview,shouldbefun.Creatinganexcitingworkcultureisthebestwaytomotivateandretaingoodpeople;italsomeansyoudon’thavetopaythemasmuch.TheBransontechniqueformanagingpeopleprovidesthefollowinglessons:

◆

Itpaystoplay.GoingtotheofficeatVirginisn’tthedrudgerythatitcanbeatothercompanies,oratleastthat’swhatBransonwantshispeopletobelieveandclearlybelieveshimself.

◆

Letemployeesloose.Bransonhasalwayssurroundedhimselfwithtalentedpeopleandgiven

themthefreedomtobecreative.Timeandtimeagain,theyhaverewardedhisconfidencewithdazzlingresults.

◆

Encourageinformality–stayonfirstnameterms.TotheaverageVirginemployee,Branson,thecompany’schairmanandmajorshareholder,issimply

“Richard.”

◆

Enthusiasmisinfectious.Byinspiringhisstaff,Bransongetsexceptionalperformancefromthem,withsalesandprofitlevelsfaraboveindustrystandards.

◆

Makebusinessanadventure.

PartoftheappealofVirginasanemployerandasaconsumerbrandisthepromiseofanadventuretobehad.

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NOTES

1

Gerrard,Nicci,“WhydoweloveRichardBranson?”TheObserver,February8,1998.

2

Davidson,Andrew,“VirginAngel:TheriseandriseofRichardBranson,”SundayTimesMagazine,May30,1993.

3

Kaye,MarkandYe,Danzhao,“BehindVirgin’ssuccess:howRichardBransonmotivatespeople,”workingpaper.

4Mitchell,

Alan,


5Interview

in

Inc.magazine,November1987.

6Jackson,

Tim,

VirginKing,HarperCollins,London,1994.

7

Gerrard,Nicci,‘WhydoweloveRichardBranson?’TheObserver,February8,1998.

8

Branson,Richard,“TheMoneyProgramme,”BBC,July1998.

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FIVE

DORIGHTBYYOUR

BRAND

“Ibelievethereisalmostnolimittowhatabrandcando,butonlyifusedproperly.”

–RichardBranson

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OneofthemostfrequentlyaskedquestionsaboutVirginishowfarthebrandcanstretch.SomecommentatorsbelievethatbyputtingtheVirginnameonsuchawiderangeofproductsandservices,Bransonrisksseriouslydilutingthebrand.

Branson’sanswertothiscriticismisthataslongas

thebrand’sintegrityisnotcompromised,thenitisinfinitelyelastic.

JusthowpowerfultheVirginbrandiswasshownbya1997survey.Itfoundthat96%ofBritishconsumershaveheardofVirginand96%cancorrectlynameRichardBransonasitsfounder.

“VirginisauniquephenomenonontheBritish

businessscene,”

notesonecommentator.“Ithas,essentially,oneprincipalasset,andanintangibleoneatthat–itsname.FromfinancialservicesthroughairlinesandrailwaystoentertainmentMegastoresandsoftdrinks,clothesandevenbridalsalons,thebrandisinstantlyrecognizabletotheconsumer,conjuringupanimageofgoodquality,

cheapprices,andatrendyhipnessthatfewotherscanmatch.”1

Bransonintendstokeepitthatway.ButheacknowledgesthattheVirginstrategywouldnotworkforanybrand;itisbasedonwhathecalls“reputationalbranding”ratherthantraditionalproductandservicebranding.

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HAVEBRAND,WILL

TRAVEL

Originallyaimedatyoungerpeople,todayVirginhasawidertargetaudience.AsBransonhasmaturedsotoohasthebrand’sappeal.“Fouryearsagowecrossedoverintoappealingtotheirparents,”hesays.“Butwehavetobecarefulwedon’tlosethekids.I’dlikepeopletofeelmostoftheirneedsinlifecanbefilledbyVirgin.

Theabsolutelycriticalthingiswemustneverletthemdown.”2

Bythemid1990s,Virginseemedtobeeverywhere.SoubiquitoushadthebrandbecomethathardlyadayseemedtogobywithoutseeingagrinningRichardBransonlaunchingsomenewVirginproductorservice.ThefamousflyingVlogowasembla-zonedonaircraft,

megastoreandcinemafronts,andwasabouttomakeitsdebutoncolacans.

Theactivitypromptedsometoquestionthecompany’sstrategy.

Thosewhounderstoodwhathewasabout,however,recognizedthatwhatBransonhadcreatedwasanentirelynewkindofbrandproposition.JohnMurphy,

chairmanofthefamousbrandconsultancyInterbrand,forexample,observedthat:“Unlesstheypoisonsomeoneorstartapplyingthebrandtoinappropriateproductssuchaspensionfundsorphotocopiers,IdoubtwhethertheVirginbrandwilleverbediluted.”LittledidMurphyknowthatby1996,VirginDirectwouldbeofferingfinancialservices

–includingpensions.

STRETCHINGAPOINT

BransoniscriticalofthetraditionalWesternviewofbranding.

HelikensVirgin’sapproachtothatofsomeJapanesecompa-c05.indd82

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83

nies.ReferringtothedecisionbyMarsnottouseitsfamousbrandnameonpetfoodproducts,hesays:“WhatIcall‘MarsSyndrome’infectseverymarketingdepartmentandadvertisingagencyinthecountry.Theythinkthat

brandsonlyrelatetoproductsandthatthereisalimitedamountofstretchthatispossible.Theyseemtohaveforgottenthatno-onehasaproblemplayingaYamahapiano,havingriddenaYamahamotorbikethatday,orlisteningtoaMitsubishistereoinaMitsubishicar,drivingpastaMitsubishibank.”

“Theideaofbrandscrossing

corporatestructuresandproductareas…hasfounditsmodernmanifestationintheJapanesemanagementstructure‘keiretsu’,wheredifferentbusinessactasafamilyunderonebrandname.”

Thepointforwould-bebrand-

builderstorealizeisthatthemost

importantaspectoftheVirginbrand

Bransononbrand

propositionisitscredibilityamong

stretching:

itsmarketsegment.Justasexisting

“No-onehasa

Virginproductsandservicesprovide

problemplaying

credibilityfornewofferings,the

relationshipbetweentheVirginfam-

aYamahapiano,

ilycouldalsoworkin

reverse.Ifthe

havingriddena

imageweretobecometarnishedby

Yamahamotorbike

associationwithashoddyproductor

thatday,or

poorserviceoranofferingthatwasa

listeningtoa

rip-off,thenthestandingofthewider

Virginbrandcouldbedamaged.

Mitsubishistereo

inaMitsubishi

Bransonisnotafraidtostepinatake

car,drivingpasta

actiontoprotectthebrandinsuch

Mitsubishibank.”

acase.TheVirginnamewascaught

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upinamis-sellingcontroversywhenLondonEnergyanditsonlinepartner

VirginEnergywerefinedbytheenergyregulatorOfgem.VirginmovedtoprotectitsbrandandtheresultisthatenergyisnotsoldviaVirginHomeEnergyonlineanylonger.

EquallytheforayintotheUKrailwaymarkethasdoneVirgin’sbrandnofavors.AsrecentlyasNovember2006therewerestoriesinthemediaofpassengersona

VirginPendolinotrainbeingaskediftheyhadanynutsandboltsonthemtohelpfixafaultywindscreenwiper.

TimewilltellifthecriticismVirginTrainshasattractedwilldolastingdamagetotheVirginumbrellabrand.Withrecentimprovementintrainservices,though,itseemsunlikely.

KEEPINGTHEFAITH

Forallhisjapes,RichardBransontakesthereputationoftheVirginbrandextremelyseriously.“Yourbrandnameisonlyasgoodasyourreputation,”hesays.“Oursisoftremendousvalue.”

WhatisperhapsuniqueabouttheVirginbrandisthatitis,asoneofthecompany’sslogansputsit,“alifetimerelationship.”

WillWhitehorn,directorofcorporateaffairsatVirginmanagementandlong-timecolleagueofBranson,observes:“AtVirginweknowwhatthebrandmeansandwhenweputourbrandnameonsomething,we’remakingapromise.It’sapromisewe’vealwayskeptandalwayswill.It’sharderworkkeepingpromisesthanmakingthem,butthereisnosecretformula.Virginsticks

toitsprinciplesandkeepsitspromises.”

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BransonhasacknowledgedtimeandtimeagainthatthemostvitalassetVirginhasisitsreputation.PuttheVirginnameonanyproductthatdoesn’tcomeuptoscratchandthewholecompanyisbroughtintodisrepute.“Ourcustomerstrustus,”hesays.

TheBransonphilosophy,then,is:lookafteryourbrand

anditwilllast.Thereis,however,andalwayshasbeenatensionattheheartoftheVirginbrand.ForallhisunquestionedemphasisontheintegrityoftheVirginname,oneofBranson’spersonalcharacteristics–thathasbecomeastrandofwhatVirginstandsfor

–isacertainrestlessness.Hehasaninsatiabledesiretotakerisksandexplorenew

areas.ItisinhisbloodthatBransonhastobeconstantlyexpandingthebordersoftheempire.Yetitisvitaltodosowithoutdamagingthegoodnameofthecompany.Thiscreatessomethingofadilemma.ItisonethatBransoniswellawareof.

“Weareexpandingandgrowingouruseofthebrand,”hesays,

“butarealwaysmindfulofthefactthatweshouldonlyputitonproductsandservicesthatfit–orwillfit–ourveryexactingcriteria.”

Inrecentyears,hehasthoughtlongandhardaboutwhattheVirginbrandstandsfor.Hebelievesthereputationthecompanyhasbuiltupisbasedonfivekeyfactors:valueformoney;quality;competitive

challenge;innovation;andanindefinable,butnonethelesspalpable,senseoffun.(Another,slightlysnappier,versionoftheVirginbrandvaluesis:genuineandfun;contemporaryanddifferent;consumers’champion;andfirstclassatbusiness-classprice.)3

Inaclassicpieceofreverseengineering,thesearenowthebrandvaluesthatVirgin

applieswhenconsideringnewbusinessventures.

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THERICHARDBRANSON

WAY

Hesaysanynewproductorservicemusthave,orhavetheprospectofhavinginthefuture,thefollowingattributes:

◆itmustbeofthebestquality

◆itmustbeinnovative

◆itmustbegoodvaluefor

money

◆itmustbechallengingtoexistingalternatives

◆anditmustaddasenseoffunorcheekiness.

Virginclaimsthatmanyprojectsitconsidersarepotentiallyveryprofitablebut,iftheydon’tfitwiththeGroup’svalues,theyarerejected.4ButBransonsays:

“Ifanideasatisfiesatleastfourofthesefivecriteria,we’llusuallytakeaseriouslookatit.”

MAKINGWAVES

Ifyou’vegotagreatbrandandcanseeamarketopportunity,youshouldn’tletalittlethinglikewhetheryouhaveanyexperienceofthatmarketgetintheway.AccordingtoBranson:“If

youknowhowtomotivateanddealwithpeople,itdoesn’tmatterwhetheryouaretakingontheairlineindustry,thesoftdrinksindustryorthefilmindustry.Thesamerulesapply.”

“Butyoushouldnevergointoanindustryjustwiththepurposeofmakingmoney.Onehastopassionatelybelieveitispossibletochangetheindustry,toturnit

onitshead,tomakesurethatitwillneverbethesameagain.Withtherightpeopleandthatconviction,anythingispossible.Andyoucanthenignorethosewhogoonaboutbrandstretching.”

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87

Lately,however,Branson’sbeliefthatVirgincanchangethewaythatindustriesareperceivedhascomeunderpressure.Thecompany’sinvolvementwithtrains–especiallytheinvestment-starvedBritishrailwaynetwork–hasdrawncriticism.

AfterinitialexcitementthatVirgin

Bransononbrand

wouldbringabreathoffreshairand

reputation:

punctualitytopartsofthefamously

“Ifyouhave20or

tardyBritishRailnetwork,commut-

30yearsofgood

ersweredisappointed.Virginservices

quicklygainedareputationforbeing

reputationbehind

bothdilapidatedandlate.Branson

you,thepublicget

explainedthatitwouldtakefiveyears

toknowyoulike

tobringtheserviceuptothestan-

you’reabrotheror

dardsVirginexpects.(andrecent

sister.”

evidenceofimprovementsuggests

hewasright).Somecritics

argued

theadventurewasdamagingtheVirginbrand.Bransonbelievesthecompany’sgoodnameismorerobustthanthat.

“Ifyouhave20or30yearsofgoodreputationbehindyou,thepublicgettoknowyoulikeyou’reabrotherorsister,”hesays.

“Theyknowyouandthecompanies’strengths–theyknowyourweaknesses.Abrandbuiltonthatlengthofreputationshouldbeabletowithstandtheoccasionalslipupandevencomeoutstrongerasaresult.”5

BEARDFACEDCHEEK

ThereisoneotherintangiblebutvitalingredienttotheBransonmarketingmix.

WhateverVirgindoes,itaddsasenseoffunorcheekiness.“Intheearlydays,”hesays,“theactualVirginnameitselfwasperceivedasslightlyrisqué.Weweren’tevenallowedc05.indd87

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toregisteritforthreeyearswiththePatentofficebecausetheyfeltitwas‘rude’.”

“Butsometimesyouhavetotakesomeriskindevelopingabrand.EMIfeltthathavingtheSexPistolsontheirbooks

woulddamagethecompany’sreputation.WefeltthatitwasjustthetickettotakeVirginoutofthehippyeraandtoattractmoremodernartists.CourtcasesoverthenameofthealbumNeverMindtheBollocks,Here’stheSexPistolsonlyhelpedstrengthenVirgin’simage.”

Andit’snotjustVirginrecordcoversthatteasetheestablishment.

EveryVirginproductorservicehasaslightlytongue-in-cheekapproach.Itisnotthatthecompanygoesintoanythinginanunprofessionalway–farfromit.It’ssimplythatithasasenseofhumor.Oftenthejokeisattheexpenseofitsvenerablechairman.

Consider,forexample,theadvertisingcampaignforthecompany’sfinancialservices

companyVirginDirect.AtatimewhenanotherleadingUKproviderwasrunningacampaignbasedaroundthesensibleandsomewhatstaidimageofitschiefexecutive,Virginoffered1960sfootageofayoungandgeekishlookingBranson,completewithJoeNinetyspecsandahaircutfromhell.Themessage?Presumably,thatevenwaywardentrepreneurshavetogrowupsometime.

Thentherewasthedouble-pageadvertisementplacedinTheTimesandotherleadingnewspapers.Thefull-colorpromotionfortheVirgindesignerclotheslabelfeaturedagrinningpictureofBransoninoneofhismostdreadfulpatternedjumpers.Thecaptionread:“Georgiodesigns.Ralphdesigns.Calvindesigns.

Richarddoesn’t.”

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DORIGHTBYYOURBRAND

OneofthemostfrequentlyaskedquestionsaboutVirginishowfarthebrandcanstretch.Branson’sansweristhataslongasthebrand’sintegrityisnotcompromised,thenitisinfinitelyelastic.Virgin’sstrategyisbasedonwhathecalls

“reputationalbranding”ratherthantraditionalproductandservicebranding.LessonsfromBransonthebrandmasterare:

◆

Agoodbrandtravels.TheubiquitousVirginbrandhaspromptedsomecommentatorstoaskwhetherthebrandisbeingdiluted.Thosewhounderstoodwhat

Bransonwasabout,however,recognizethathehascreatedanentirelynewkindofbrandproposition.

◆

Brandelasticityisinfinite.ThemostimportantaspectoftheVirginbrandpropositionisitscredibilityamongitsmarketsegment.ExistingVirginproductsandservicesprovidecredibilityfornew

offerings.

◆

Love,honorandcherishyourbrand.BransonhasacknowledgedtimeandtimeagainthatthemostvitalassetVirginhasisitsreputation.Hisphilosophyis:lookafteryourbrandanditwilllast.

◆

Rulesareforbreaking.Ifyou’vegotagreatbrandandcanseeamarketopportunity,youshouldn’tletalittlethinglikewhetheryouhaveanyexperienceofthatmarketgetintheway.

◆

Apinchofsaltaddsflavor.WhateverVirgindoes,itaddsasenseoffunorcheekiness.Itisnotthatthe

companygoesintoanythinginanunprofessionalway–farfromit.

It’ssimplythatithasasenseofhumor.

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NOTES

1

Rodgers,Paul,“TheBransonPhenomenon,”Enterprisemagazine,March/April1997.

2


3

Campbell,AndrewandSadtler,David,“CorporateBreak-ups,”Strategy&Business,ThirdQuarter1998.

4

VirginGroupliterature.

5

Branson,Richard,“MoneyProgramme”lecture,BBC,July1998.

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“Therearesomewhobelievethatinhisown

charminglyhaphazardway,Bransonrunstheslickestpublicrelationsoperationin

Britain.”

–AndrewDavidson,journalist

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HemaynotlooklikeafinelytunedPRmachine,butRichardBransonhasturned

himselfintoawalking,talkinglogo.WhereMcDonald’shastheredhairedclownRonaldMcDonald,andDisneyhasasixfootmouse;Virginhasitsgoofychairman.Everytimehispictureappearsinanewspaperormagazine,itpromotestheVirginbrand.

Thisisentirelydeliberate,andprobablyoneofthemosteffectivepromotional

strategieseveremployedbyacompany.Therisktothereputationofthebrand,ofcourse,iscorrespondinglyhighshouldBranson’spersonalimagebecometarnished.Todate,however,1ithasprovedhighlysuccessful,enablinghimtobuildtheVirginbrandonashoestringadvertisingbudget.

Calculatingtheadvertising

valueofBranson’sfailedattempttocircumnavigatetheglobeinahotairballoon,oneAmericanadvertisingexecutivesaid“therearen’tenoughzerostodothemaths.”

Itishisabilitytoorchestratepublicityforhisbusinessventurewhich,perhapsmorethananyotherfacet,singlesoutRichardBransonfromeveryotherbusinessleader.

EventhelikesofAnitaRoddick,BillGatesandTedTurnerdon’tgeneratepositivecoveragelikeBranson.PublicrelationsisBranson’sspecialgift.

AsTimJackson,authorofVirginKing,observes:“AchievinggoodpresshasbeenasimportantinBranson’sbusinesscareerasmakingsurethebooksbalanceattheendofthe

year.Fromhisfirstdaysasamagazinepublisherandrecordretailer,Bransonknewc06.indd93

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THERICHARDBRANSON

WAY

thatdescriptionsofhisventuresassuccessfulandexpansionarycouldbecomeself-fulfilling.”

ButwiththelaunchofVirginAtlanticAirwayshelearnedanewtrick.Thebigairlinesspendliterallymillionsofdollarsonadvertisingeveryyear.Bransonsoonrealizedthatfreemediacoveragewas

theonlywayhecouldhopetosurvive.Thisgaverisetoaseriesofdaredevilescapadesandpublicitystunts.Apparently,thedecisiontochallengefortheBlueRiband–attemptingtobreaktherecordforthefastestAtlanticcrossing–wasmadewhenBransondiscoveredhecouldn’taffordNewYorkTVadvertisingratestopromotehisairline.

ItisatacticthatBransonhasusedtoremarkableeffecteversince,settingasideaboutaquarterofhistimeforPRactivities.2

AlthoughtherearesignsthatBranson’srelentlessPRenginemaybeslowingdownalittle.

HOLDTHEFRONTPAGE

Whereothercompanies

spendhugesumsofmoneyonadvertising,Bransongeneratesyardsofcolumninchesforfree.AndwhereotherfirmsemployexpensivePRfirmstoorganizecontrivedmediaevents,Bransondeliversamuchmorevaluablecommodity–news.

Thesecrettohisself-servingpublicitycampaignsisaninstinctiveunderstandingof

whatappealstothemedia.Topublicizethelaunchofhisairline,forexample,Bransonarrivedattheinau-guralpressconferencewearingabrownleatheraviator’shelmet,Bigglesstyle.Editorslovedit,andsplashedBranson’sphotographallovertheirnewspapers.Thestorygeneratedsomuchc06.indd94

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publicinterestthatVirgindidn’t

“Fromhisfirst

needtoadvertiseitsfirstflights.

daysasamagazine

And,ofcourse,whenthewinnerof

publisherand

theVolvoandVirginGalacticcom-

recordretailer,

petition–firstprize,atripintospace

Bransonknew

–wasannouncedinNewYorkin

thatdescriptions

2005,therewasBranson,theusual

grinbarelyvisiblefrominsidehisas-

ofhisventuresas

tronautoutfit.

successfuland

expansionarycould

SincethenBranson’smediaevents

becomeself-

haveescalated.TolaunchVirgin

fulfilling.”

ColaintheUS,forinstance,hedrove

afullbattletankdownabusyNew

YorkCitystreettodemolishawallof

colacans.Nosurprisesforguessingwhichcompanymadethenewsthenextday.

Buthiseye-catching

performancesanddazzlingtimingactuallymaskaself-consciousstreak.Intheearlydays,Bransonwentoutofhiswaytoavoidinterviewswithjournalists.Tothosewhohavenotmethim,theideathatBransonmightbeshyseemsridiculous.Closerobservationrevealsthatalthoughheisanexhibitionistinsomeregards,hecanalsoappeardiffidentandawkward.Thereis,in

fact,somethingoftheactorabouthim.

Infrontofthecameras,helookslikeamanperformingarolethathasbeenwrittenforhim.Bransonhimselfacknowledgesasmuch,andinsiststhathehastoforcehimselftoperform.

“UptothetimeIlaunchedtheairline,Iwasareasonablyshyperson.I

didn’tlikedoinginterviews,avoidedthepress.Itookmymother’sadvicetoletmybusinessesspeakforthemselves.

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Butwhenwedecidedto

launchanairline,FreddieLakersaidthatifIwasgoingtotakeonAmericanAirlines,UnitedandBritishAirways,Iwouldneverhavetheadvertisingspendthattheyemploy…butifIwentandmadeabitofafoolofmyself,I’dgetonthefrontcovers.”3

Hisshynessactuallyaddstohisappeal.Whereothertycoonsappearpompousand

selfimportant,Bransonradiatesschoolboyenthusiasm.Thefactthathispublicpersonaisselfcreatedandgoesagainstthegrainmakesitallthemoreimpressive.Heisaself-mademediaicon.

WhatisbeyonddoubtisthatBranson’sfeelforpublicrelationsisagift.Hisinstinctiveabilitytorecognizeandexploita

mediaopportunityallowshimtorunringsaroundthestaidandconservativebusinessmenthepublicareusedtoseeing.Contrivedornot,Bransonmanagestoappear“natural”andeven“spon-taneous”evenwhenyouknowhehasbeenansweringthesamequestionsallday.

HisinstinctsallowhimtoavoidtheclichésofPRthat

mostself-publicistseventuallyfallinto.Hisslightlyawkwarddelivery,packedwithummsandahs,soundsunscripted.Thereisafrank-nessaboutBranson,too,thatisendearing.Whathehasthatotherslackiscredibility–something

thatheretainsevenwhenheisin-

Whereother

volvedinablatantPRexercise.

tycoonsappear

pompousandself

AskedifVirgin’shighproportion

important,Branson

ofBlackandAsianemployeesisthe

resultofaconsciousnon-discrimina-

radiatesschoolboy

tionpolicy,hereplies:“Perhapsit

enthusiasm.

shouldbe,butitjusthappenedthat

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way.”Toldofapressreportthatdeniedhiscompanieswereregisteredoffshoreto

avoidBritishtax,heresponds:“It’swrong.

Thedecisionwastaxled.”

Noamountofpre-interviewbriefingcouldprovidesuchasmoothpassagethroughpotentialmediaminefields.

Attimes,thedramahasbeenalltooreal.Whenhisattempttocircumnavigatetheglobeinthehotairballoonwent

danger-ouslywrong,withtheGlobalChallengerfallingatarateof2000

feetperminute,noonewasinanydoubtthatthelivesofthecrew–Bransonamongthem–wereinseriousdanger.Asthedramaunfolded,AlexRitchie,the52-year-oldseniorengineerontheprojectandalastminutestand-inforthethirdcrewmember,madeaheroic

climbontotheballoontoreleaseadditionalweight,avertingdisaster.Therecordattempthadfailed,butcommerciallyitwasatriumph.

Ithadcost£3millionfortheGlobalChallengertotravelbarely400miles.Butnoonefromtheworldofmarketingwasinanydoubtthatithadbeenmoneywellspent.Referringtoa£300

millionPepsiCo.advertisingcampaignthatincludedrepaintingConcordeblue,oneBritishPRexpertclaimedthatsimplybyleavingtheground,Bransonhad“outdonePepsifourfold.”4

Oneanecdotehighlightshisaptitudeformediarelations.OnhissecondandsuccessfulattempttobringbacktheBlueRibandtoBritainfor

thefastestseacrossingoftheAtlantic,VirginstaffbackondrylandwerekeptbusythroughoutmuchofthevoyagegoingthroughalistoftheUK’snationalandregionalmedia.

FromtheoperationalheadquartersinoneofVirgin’srecordstores,theycalledtheeditorsonebyoneandofferedtopatchc06.indd97

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themthroughforaliveinterviewwithBransononboardtheVirginAtlantic

ChallengerII.

WhileBransonansweredquestionsfromonenewspaper,thenextwouldbereceivingabackgroundbriefingfromtheland-basedstaffandwaitingtobeputthrough.TheChallenger’sskipperkeptthisupforhours,answeringthesamequestionsandmakingthesamewisecracksagainandagaintoobtainmaximum

coverage.Finally,heturnedtoChayBlyth,theround-the-worldyachtsmanaccompanyinghimontherecordattempt,andsaid:

“Thisisgettingboring.We’vegottotellthemsomethingelse.”

“We’vejustmissedawhale,”theastuteyachtsmansaidbywayofreply.“Where,where?,”askedBranson

gettingexcited.“Ididn’tseeit.”ItwasonlywhenheglancedbackatBlyththatherealizedthat,whaleornowhale,thestorymadegoodnewspapercopy.“Ohyeah,”hesaid,“I’vegotit.”Thenextfeweditorsheardaboutthehugeseacreaturethathadhadsuchaclosebrushwiththeboat.Naturally,theylappeditup.

SowellknownisBranson’s

talentforagoodstorythatnewVirginventureshavelittledifficultynowinarousingpublicandmediainterest.VirginBride,thecompany’schainofbridalstores,wasstill18monthsofflaunchwhenarumor,startedinaWestLondonestateagent,reachedallthenationalnewspaperswithinthreedays.ThecompanyevenreceivedaphonecallfromtheLosAngelesTimes.5

ALLTEETHANDNOTROUSERS

Bransonwilldoalmostanythingtopromotehisbrand.Thisiscomplementedbyhisyenforadventure.Hisheadline-grabbingactivitiesincludedaredevilattemptstobecomethefirstpersonc06.indd98

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tocircumnavigatetheglobeinahotairballoon,whichverynearlycosthimhislife,andsettinganewworldspeedrecordforcrossingtheAtlanticinaspeedboat.Suchexploitsresonatewiththemessage“lifeisanadventure;lifeisfun”–

whichmatchestheVirginapproachtobusiness.

TheVirginchairmanisespeciallygoodatcreatingstorieswithvisualimpact.Heispreparedtodressupandacttheclown,wheremostbusinessmentakethemselvesfartooseriouslytodoanysuchthing.Certainlymostchairmenoflargecompaniesdrawthelineatwearingfancydress

costumestopromotetheirproducts.Inthepublic’smind,ofcourse,Branson’swillingnesstoplaythefoolonlyservestoemphasizewhatabunchofstuffedshirtstheothersare.

“I’vewornalmosteverycostumethereistowear,”saysBranson.

“Itmakesaback-pagephotointoafront-pageone.And

theycomebackformore.”

AnevenmoreoutrageousBransonployiscross-dressing.Thisheusedtogoodeffectwhenlaunchinghisnewairline–hedonnedstewardessuniform–andmorerecentlywhenhemodeledaweddingdressandhighheelsfor

thelaunchofhisnewchainofbridal

Bransononfancy

stores.Howmanyothercompany

dress:

chairmenwoulddressupinwomen’s

“I’vewornalmost

underwear–inpublic?

everycostume

Infact,amongVirginstaffthechair-

thereistowear.It

man’sexhibitionisttendenciesare

makesaback-page

wellknown.Heseemstohaveapas-

photointoafront-

sionfordressingupandstrippingoff

pageone.”

inequalmeasure.Oneseniorem-

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ployee6recallsthatBranson’spropensitytostripoffreachedthepointwhereagroanwentupononetriptoSwitzerlandwhenheoffered

tobeteveryone£10thathewoulddaretoskiallthewaydownhillstarknaked.Nobodytookhimuponthebet,butBransonwentthroughwiththedareanyway.

TheSunnewspaperoncereportedthatonaVirginweekendaway,hehadentertainedemployeesataseafoodrestaurantbyperformingatabletop

stripteaseinfishnetstockingsandlacysuspenders.Thestoryranundertheheadline:“Shockingstockingscaperbypoptycoon.”

Thenewspaperevenmanagedtogetholdofaphotographoftheincident,inwhichBransonwasinstantlyrecognizablebyhistrademark–thebrightlypatternedsweaterhewas

wearing.

Atthetime,VirginwasalistedcompanyontheLondonStockExchange.Suchastorymighthavedamagedthecompany’sshareprice.Indeed,inthesameyear,reportsthatRalphHalpern,the48-year-oldchairmanofthemen’swearretailertheBurtonGroup,hadhadanaffairwitha19-year-oldtoplessmodel,were

followedbyadropinthecompany’sshareprice.

ButtheSunarticlewasactuallyfavorable.ItpraisedtheVirginchairmanforhis“downtoearth”attitudeandasenseoffunwhich,itquippedintrueSunstyle,was“Virginontheridiculous.”

Theonenoteofcriticismcamefromclaimsthatthe

weekendhadcostthecompany£250,000(thecompanysaidtherealcostwasclosertohalfthatfigure).

VirgininvestorsseemedtotakeBranson’sbehaviorasonlytobeexpectedfromasomeonewhohobnobbedwithpopstarsandhippies,ranhiscompanyfromaboat,andrefusedtowearasuit.

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BRANSON:SUPERHERO

Bransonalsohasaremarkableknackofpoppingupatunexpectedmomentsofpublicdrama.Intherun-uptotheGulfWar,forexample,whenaBritishAirwaysplaneandcrewwasheldhostagebySaddamHussein’sforces,BransoninformedtheBritishmediathathehadofferedPrimeMinisterJohnMajortheuseofaVirginaircrafttogetthemout.Heputaplaneon24-hourstandbytoflyin

andbringthehostageshome.

JustdaysafterPrincessDianaannouncedthatshewouldbewithdrawingfrompubliclifebecauseofmediapressure,sheappearedonthesameplatformasBransontolaunchanewadditiontotheVirginAtlanticfleet.DianalookedrelaxedandateaseasBransonsprayedherwithchampagneandpersuadedhertoposeinaredVirgin

Atlanticjacket.(PRgeniusisnottoostrongatermforBranson.)

WhenthepopstarBoyGeorgefoundhimselfindifficultstraitsoverhisheroinaddiction,whosteppedintoofferafatherlyhandofhelp?NoneotherthanRichardBranson,whoseVirginrecordlabelhaddiscoveredGeorgeinhisCultureClubdays.Bransonwhiskedthe

troubledpopstarawayfromthemediagazeandcheckedhimintoatopdrugrehabilitationclinic.CynicssawablatantPRopportunistatwork,butotherssawtheVirginbossasthecaringfaceofthepopbusiness.

In2006Bransonuppedhisgamewhenheannouncedhewascommittinghistimeandbillionsofdollarstohelpingsavetheplanetfromthe

threatofclimatechange.ThereisnoonewhocoulddoubtBranson’sdeterminationtomakeadifferencewhenhecommitstoaproject.Whoknows,hemightjustprovethecatalystformanymorecorporationstogetinvolvedintacklingglobalwarming.

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PHILANTHROPYANDSTAMPCOLLECTING

ARETWODIFFERENTTHINGS

ThereisalsoanotheraspecttoRichardBransonthatreceivesmediaattention.Overtheyears,hehasbeeninvolvedinanumberofhigh-profilecommunityactivities.TheseincludehisbidtorunBritain’sNationalLottery,withallprofitstogotoacharitablefoundation.PlushisinvolvementintheAidsawarenesscampaign,whichgaverisetothelaunchofMatescondomsto

challengethenearmonopolypositionofDurexintheUKmarketandfromwhichallprofitswenttocharity;whenthebusinesswassoldtoAnsell,theproceedswenttotheVirginHealthcarecharitablefoundation.Andnotforgettinghissupportforanon-smokingcampaignaimedatchildren;andhisinvolvementintheUKgovernmentsponsoredUK2000initiativetohelp

unemployedyoungstersandcleanupthelitterfromBritain’sstreets.

TherewaseventalkofBransontakingonamajorpublicoffice,withrumorsthathewouldentertheraceforthenewpostofMayorofLondon.Itisatestamenttohispublicpopularity,too,thatpollsindicatedthathewouldhavebeenthefirstchoiceofmanyLondoners.

These“publicspirited”activitiesrevealBransonthephilanthro-pist.Althoughtheyaregenerallyseparatefromhisbusinessempire,theyalsogeneratepublicityfortheVirgingroup.ThishaspromptedsomepeopletoquestionBranson’smotives.

Manycelebrities,ofcourse,arewellknownfortheirless-than-charitablereasonsfortakingoncharitableworks.

Filmstars,popstarsandpoliticiansarenotabovemilkingsentimentfromtheoddgoodcauseforabitofpopularpress.InBranson’scase,however,suchaccusationsseemmisplaced.Certainly,hispersonalc06.indd102

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reputationhasbenefitedfromchampioningworthycauses,buthisreasons,inthemain,seemtobegenuinelyidealistic.Thisistheman,afterall,whoattheageof18foundedthenon-profit

StudentAdvisoryCentretohelpwithyoungpeople’sproblems.

Thatwasbackin1968,beforehe’devenstartedthemail-orderrecordbusinessthatlaidtheseedsfortheVirginempire.

Infact,ifthereisoneareawhereRichardBransonhasnotreceivedthecreditheisdue,itishischaritablework.

Forsuchanenthusiasticandableself-publicist,hehasshownhimselftobeuncharacteristicallyclumsywhenitcomestoobtainingpositivecoverageforhisgoodworks.Althoughhedoesnotgivevastamountsofmoneytocharity,Bransonhasgivengenerouslyofhisenergyandtimetosupportcauseshebelievesin.Hehasbeeninvolvedinanumberofmajorpublicprojects.

TheUK2000campaignwasaninitiativetopooltheresourcesofanumberofprivateandgovernmentschemestoimproveBritain’senvironmentandprovidemeaningfulworkexperienceforunemployedyoungsters.AttherequestofMargaretThatcher’sgovernment,Bransonacceptedtheroleofchairman.Fromtheveryoutset,however,thecampaignwasplaguedby

hostilepresscoverage,withtheBritishtabloidsdeterminedtoportrayitasnomorethananexerciseinpickinguplitter.Bransonleftthepostayearlater,lickinghiswounds.

AnotherpublicspiritedforayinvolvedthelaunchofMates,abrandofcut-pricecondomsaimedatshakingupthenearmonopolypositionofDurex.ThelaunchofMateswasa

businesssuccess,puttingcondomadvertisementsonBritishtelevisionforthefirsttime.But,despiteraisingpublicawarenessofHIV,theadvertisinghadlittlerealimpactonpublichealth,whichwasitsstatedaim.Bransonwascriticizedbythepresseventhoughhec06.indd103

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riskedhisownmoneytolaunchaproductwhoseproceedswereintendedforcharity.WhenthecompanywassoldtoAustralian

businessAnsell,theentire£1millionproceedswereusedtolaunchtheVirginHealthcareFoundation.

Branson’sbidfortheUKNationalLotteryfranchisealsoearnedhimunfavourablepresscoverage.Despitehisinsistencethathewouldmakenoprofitsfromrunningthelotteryandthatalloftheproceedswouldbeadministeredbyacharitable

foundationentirelyseparatefromtheVirgingroup,Bransonfailedtogethismessageacrosstothepublic.Onceagain,cynicaljournalistsplayedfastandloosewithhisaltruisticintentions.

ItisaninterestinginsightintoBranson’spersonality,too,thatheappearstobesurprisinglysensitivetosuchcriticism.Wheremostpeople

inthepubliceyewouldexpecttobemisunderstood,Bransonappearsalmostnaïveaboutwhythepressmightpickonhim.Indeed,heseemsgenuinelydisappointedthatjournalistsshouldquestionthemotivationbehindhispublic-spiriteddisplays.Perhapshehasjustbecomeusedtopositivecoverage.

Alternatively,hemaysee

playingthehurtpartyasthebestwaytodeflectcriticism.

NOWYOUSEEME,NOWYOUDON’T

AlmostasimpressiveashisabilitytostealthelimelightwhenhewantstoistheVirginchairman’sabilitytoavoidnegativepublicityforhisbusinessactivitiesorhavehisprivatelifereportedbythemedia.Likethe

CheshireCatinAliceinWonderland,Bransonseemstobeabletovanishwhenitsuitshim,sothatallthatremainsvisibleishistoothysmile.

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WhileotherswithalternativebusinesscredossuchasAnitaRoddickhavebeenpunishedbythepressiftheyputafootwrong,manyofBranson’sbusinesssetbacksandfailuresremaindis-cretelyhiddenfromthepublicgaze.Roddick,itseems,was

penalizedforherapparentself-righteousnessandfortakingwhatsomesawasamarketinggimmicktooseriously.Branson,ontheotherhand,isseenasaschoolboypranksterandgiventhebenefitofthedoubt.ThismayexplainwhywhenBransonhasreceivedcriticalpresscoverageithastendedtobeforhisphilanthropicactivitiesratherthanhiscommercial

adventures.

Byandlarge,themediaattentionVirginreceivesispositive.TheothersideoftheBransonmediamanipulationishisabilitytodropoutofsightwhenitsuitshim.FromtimetotimetherearerumorsofcashshortageswithintheVirginGroup,andthathehasoverstretchedhimself.Thefactthathisbusinessisa

privatecompanywithmostofitsinterestsregisteredthroughoffshoretrustsmakesitverydifficultforoutsiderstoknowwhatthetruebalancesheetpositionis.Thisperfectlylegalandtax-efficientarrangementworkstoBranson’sadvantage.

Bransonhasmanagedtokeepaveilaroundtheinnerworkingsofhisfinancialempire.In1986hefloated

hisVirginbusinessontheLondonStockExchange,onlytobuyitbackbecausehedidn’tliketheconstraintsamarketlistingbroughtwithit.

IthasbeensuggestedthattherearetwoRichardBransons:thepeople’schampionknowntomillionsandthedealmakerknowntohisbusinesspartners.

Hisabilitytostepoutofthelimelightandvirtuallydisappearfromviewisbothpartofthesecretofhisenduringsuccess,andalsopartofthewayinwhichheprotectshisbusinessinterestsc06.indd105

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fromdamagingspeculation.Norwillyouseehischildreninthemediaspotlight–hiswifeJoanseestothat.HowBransonachievesthisremarkableconjuringtrickisunclear.Perhapsitispartoftheartofbeinganeverymancharactertobeableto

disappearintothewoodworkwhenitsuits.HavingaCaribbeanislandofyourowntodisappeartoandthrowingexcellentpartiesforthemediaprobablyhelp,too.

NOTES

1

Anddespiteanallegationofsexualharassment.

2Mitchell,

Alan,


3

“I’mRichard,flyme,”RoyHattersley,TheGuardian,June20,1998.

4Brown,

Mick,

RichardBranson:TheAuthorizedBiography,4thedn,Headline,1998.

5

VirginGroupLiterature.

6Jackson,

Tim,


126.

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SMILEFORTHECAMERAS

107

SMILEFORTHECAMERAS

HemaynotlooklikeafinelytunedPRmachine,butRichardBransonhasturnedhimselfintoawalking,talkinglogo.Everytimehispictureappearsinanewspaperormagazine,itpromotestheVirginbrand.Promotingyourbusinessthe

Bransonwayhasanumberofsubtleandnot-so-subtletwiststoit.

Theseinclude:

◆

Understandwhatthemediawant,andgiveittothem.

Whereothercompaniesspendhugesumsofmoneyonadvertising,Branson

generatesyardsofcolumninchesforfree.AndwhereotherfirmsemployexpensivePR

firmstoorganizecontrivedmediaevents,Bransondeliversamuchmorevaluablecommodity–news.

◆

Thinkinpictures.Bransonwilldoalmostanythingto

promotehisbrand.Heisespeciallygoodatcreatingstorieswithvisualimpact.

◆

Standupandbecounted.Bransonhasaremarkableknackofpoppingupatunexpectedmomentsofpublicdrama.

◆

Remember,philanthropyandstampcollectingaretwodifferentthings.Overtheyears,Bransonhasbeeninvolvedinanumberofhigh-profilecommunityactivities.

Althoughthesearegenerallyseparatefromhisbusinessempire,theyalsogeneratepublicityfortheVirgingroup.

◆

Knowwhentoduck.AlmostasimpressiveasBranson’sabilitytostealthelimelightwhenhewantstoishisabilitytoavoidnegativepublicityforhisbusinessactivities.

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SEVEN

DON’TLEADSHEEP,

HERDCATS

“Virginstaffarenotmerehiredhands.Theyarenotmanagerialpawnsinsomegiganticchessgame.

Theyareentrepreneursintheirownright.”1

–RichardBranson

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DON’TLEADSHEEP,

HERDCATS

111

Don’tleadsheep;herdcats–that’stheBransonstyleofleadership.Ratherthanexpectpeopletofollowblindlywhereheleads,hereliesonhisabilitytogetthebestfromindividualsbycreatingachallengingenvironment.Likeherdingcats,it’smuchhardertodo

butalotmorelively.

Inmanyways,theVirginbossisthearchetypalleaderofthefuture.Herarelycoerces,inspiringinstead.Hepossessesthatmostpreciousofallleadershipassets–credibility.Youcouldsayheobtainsthebestperformancefromthepeoplearoundhimnotthroughthreatsbutthroughpureadulation.Alternatively,heisajusta

fairlytalentedentrepreneurcarriedalongbyhisownenthusiasmandalongrunofluck.Unlikely.Inreality,itisbecausehedoesn’t“play”thebigleaderlikeanactor,butworkshardatit,thatheissoeffectiveintherole.WhatBransonunderstandsbetterthanmostisthatleadershipisanart:butonethatismoreakintotheskilloftheorchestraconductorthanthesoloist.

Leadershipis,perhaps,themostdifficultofallhumanattributestodefine.Intermsofstyleofleadership,thereismuchtobesaidfortiming.Comeththehour,astheysay,comeththeman.

Whateverelsewethinkaboutthebusinessleadersofthe21stcentury,itseemsclearthatintermsofstyletheywillbemoreBransonthanLordHanson.Thedaysofthe

assetstrippersarenumbered.Theabilitytomanagestart-upsandputempirestogetherismorevaluedthanthatofsellingoffthefamilysilver.

Butallthestyleintheworldcannotcompensateforalackofsubstance.Perhapsthatiswhyinadequatebusinessleaderspreferc07.indd111

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112BUSINESS


tohidebehindtheirjobtitlesandsta-

WhatBranson

tussymbols,relyingonhierarchical

understands

powerfortheirauthority.

Successful

betterthanmost

entrepreneurs,ontheotherhand,

havetendedtobefiguresofawe;

isthatleadership

inspiringfearandwonderinequal

isanart:but

measure.

onethatismore

akintotheskill

Today,wearelessimpressedwithei-

oftheorchestra

therofthesestyles.The

modernview

isthatleadershipreliesonpeoplebe-

conductorthanthe

ingwillingtofollow.WhenRichard

soloist.

Bransonstartedoutinbusinessback

inthe1960stherewaslittletosuggest

thatcommandandcontrolwascrumbling,certainlynotinthecorporateworld.Bydiscardinghierarchicalpowerinfavorofinspirationalleadership,Bransonwas25yearsaheadofhistime.

LEADINGFROMTHEREAR

OneofthecharacteristicsoftheBransonleadershipstyleisknowingwhentogetoutthewayandletpeoplegetonwithit.

ThewaythatVirginisstructuredmeanshereallyhasnochoice.

With200andupwardscompaniesintheVirginfamily–itishardtokeepcount–itsimplyisn’t

feasibletothinkhecouldbehands-onbossofallofthem.Whetherbyluckordesign,then,Bransonisforcedtobeaback-seatleader.(Theonecompanythathedoesn’tseemabletoleavealoneisVirginAtlantic.)Byandlarge,though,thehands-offleadershipstyleishighlybeneficial.Managersinthegroupenjoytheopportunityofrun-c07.indd112

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DON’TLEADSHEEP,HERDCATS

113

ningtheirownshow;theyfindithighlymotivating.Unlikemostcompanies,too,

theydon’twastetimeonunnecessarymeetingsandpointlessreportstogivecorporateheadquarterssomethingtodo.

Soifheisn’trunningthebusinessonaday-to-daybasiswhatdoesVirgin’sbackseatleaderactuallydo?It’shardtodescribeexactly.Youcouldsay,heenthusesotherpeople,contributingtothebuzzthatemanatesfrom

everypartofthegroup.

Beyondthat,BransonisalsoimportantasafigureheadfortheVirginbrand.Heputshisfullsupportbehindnewventures.Thepublicityhegenerates,promotesallofthecompaniesinthegroup.Thesedays,hehastorationhispersonalappearancestooneortwomediaeventsperbusinessperyear.

ButthereissomethingmoretotheBransonleadershipmodel.

Hestandsforsomethingthatmakespeoplefeelgoodtoworkforhiscompany,asetofvaluesthatareimportanttoVirginemployees.It’shardtopindownexactlywhatthosevaluesare,buttheyhavesomethingtodowithrunningabusinessforapurposeotherthanpurely

profit.

CATALYTICCONVERTER

AnothervitalaspectofBranson’sroleas“leader”ofVirginisthatofplanningthefuture.UnlikebusinessvisionariessuchasMicrosoft’sBillGates,andIntel’sAndyGrove,however,heisnotinthebusinessofcrystalballgazingor

strategizing.Rather,Bransonisaprospector,panningthemultitudeofbusinessideasthatVirginattractsfornuggetsofpurestgold.

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Heisalwaysonthelookoutfornewbusinessventures.Heandhistwoexpertadvisersconsidersomewherecloseto50proposalsaweek.Mostwillberejectedoutofhand,butifthereisagleamofanopportunityforanewVirgincompanytheywill

takealonghardlook.

Itisonethingtorecognizepotentialforabusiness,andquiteanotherthingtomakeitareality.ThisisoneofBranson’ssecrets:theabilitytomakethingshappen.Heisthecatalystthattriggersachainreactionthattransformspotentialenergyinaprojectorideaintokineticenergythatsendspeoplescurryingina

thousanddirections.

WhenthebusinessconsultantDonCruickshankwasbroughtinasgroupmanagingdirectortoprepareVirginforprivatization,hequicklyrealizedthattryingtogetBransontofitintoaconventionalorganizationalstructurewaspointless–andwouldbeself-defeating.Instead,hesensiblyconcluded,thecompany

wouldhavetobestructuredarounditsenergeticchairman.

Recognizinghistalentforenthusingothers,Cruickshank,theex-McKinseyconsultant,encouragedBransonto“continuetodreamupnewideas,tolookatabewilderingarrayofnewventuresandtostartmorecompaniesintwoyearsthan

mostentrepreneursdointheirwholecareers.”2

Bransonshouldnottrytoalterhisnature,Cruickshankwarned.

Insteadheshouldsticktowhatheisreallygoodat:motivatingothersandpassingonhisconfidenceandbeliefthateverynewprojectwouldsucceed.Inshort,Bransonshoulddevote

allhisenergytoactingasacatalyst.Allthatwasneededwasacorpsofpeopletotidyupbehindhim,andtohelphimclarifywhathewastryingtoachieve.

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115

OneofBranson’sgreattalentsisgettingpeoplefiredupaboutanewbusinessideaandthenlettingthemlooseonit.Hisownenthusiasmiscontagious,focusingexcitementonagoalordestinationwhichthenallowshimtostepbackandletothersrunwithit.Somehow,too,hespurs

peopleontoachievementstheywouldn’thavebelievedwerepossible.

TALENTSCOUT

Whenyougetrightdowntoit,RichardBransonhasnoclearlydefinedbusinessskillortraining.He’snotreallyanumbersman

–hefailedhiselementarymathsexaminationthree

times.NorisheanITwhiz-kid–hehasneverbeenkeenonwordprocessingorcomputers,preferringhistrustynotepad,orthebackofhishand.Marketingandpublicityhehasaflairfor,butlittlegraspoforinterestinthetheory;hewouldratherdoithisway.What,then,doesBransonbringtotheparty?(Apartfromthepartyitself.)

“WhatIdobestisfindingpeopleand

lettingthemwork,”hesays.“Virgin

Bransonon

staffarenotmerehiredhands.They

hisstaff:

arenotmanagerialpawnsin

some

“Virginstaffare

giganticchessgame.Theyareentre-

notmerehired

preneursintheirownright.”3

hands.Theyarenot

ItseemsthatwhatBransonis

goodat

managerialpawns

issurroundinghimselfwithverytal-

insomegigantic

entedpeopleandcreatingtheright

chessgame.They

environmentforthemtoflourish.

areentrepreneurs

Thisisnomeanfeat.

intheirownright.”

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Overtheyears,Branson’spersonalreputationhasprovedoneofthemosteffectivewaysofrecruitingstaff.AgreatmanyofVirgin’smostablemanagersactuallyapproachedBranson,

drawnbywhattheyhadseenandheardaboutthewayherunshisbusiness.Oneofhisgreatcontributionstothebusinessistoactasamagnetforthesepeople,andtorecognizeandrewardthemwhentheyappear.Heisatalentscout.

Thesameprincipleappliestobusinessopportunities.ThesedaysBransonspendsmuchofhistimereviewingthemany

businessproposalsmadetoVirginbyothercompanies.Goodprospectsarethosethatinvolveinstitutionalizedmarkets,fittheVirginbrand(genuineandfun;contemporaryanddifferent;consumers’champion;andfirstclassatbusiness-classprices),willrespondtotheVirginrecipe,offeringanenticingrisk-to-rewardratioandarepresentedbyacapablemanagementteam.

WhereVirginventureshavenotbeensuccessful,ithasbeennoted,4itisoftenwhenhehashadagoodideahimselfandgoneouttolookforamanagertorunit.Thebestbusinessproposalshavecometohimfrommanagerswhowanttorunthebusinessthemselves.Heisbetteratspottingtalentwhenitcomestohimthanheisatgoingoutandfindingit.

MASTEROFMAYHEM

Branson’sothergreatleadershiproleistopresideoverandencouragethecreativeenvironmentthatgivesVirginitsspecialbuzz.“Amadhouse,”ishowonevisitordescribedthegroup’spremises.“Therewerepeoplerunningaboutallovertheplace.”

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117

AnotherdescribedthesceneatAlbionStreet,thesiteofBranson’sfirstbusiness

venture,in1969:“Phoneswereringing;attractivewomenwerecomingandgoing.Attheotherendoftheroom,ayoungmanwithtousledlightbrownhairandadazzlingsmilewastalkingveryearnestlyintothetelephone.”

YetanotherdescribedtheVirginheadquartersinHollandPark:

“TherearedirtyplatesstackedupinthekitchenaboveRichardBranson’soffice.Thereisaphotocopieronthelanding.Alloverthehousewhereheoverseeshis200companiestherearedoorsajar,mugsleftontables,peoplewanderinginandout…itisnothinglikeamoderncorporateheadquarters.”5

Andinthecentreofallthe

mayhem,thereisalwaysRichardBranson:usuallyworkingthetelephone,charming,teasing,cajoling,shouting,orinsomeotherwaytryingtogetsomeonetodosomethingtothebenefitofVirgin.

LikethedirectorofaMarxBrothersfilm,Bransonisthemasterofmayhem,orchestratingthechaos.Inhisownopinion,hedoesso

withcommendablerestraint,leavingthemanagersoftheVirgincompaniestomaketheirowndecisionsandseldominterferinginoperationalmatters.

“Thebossesofeachcompanyhavealmosttotalauthoritytomaketheirowndecisions.IfIdomakeasuggestion,quiteoftentheytellmetofuckoff,”hesays.

Butthereisanotherview.ThereasonVirginneverworkedasapubliccompany,hiscriticssay,isbecauseBransonisacontrolfreakwhohatestobeaccountabletoanyone.Heisalso,saythecritics,aninveteratemeddler,whounderminestheauthorityofc07.indd117

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118BUSINESS


hismanagersbyinterferingindecisionsthathehassupposedlydelegated.

ContrarytoBranson’sownclaims,saysonedisgruntledformeremployee,theVirgin

topmanagement“allsittherelikenoddingdogs,theirheadsnoddingwhicheverwayBranson’sdoes.

Noneofhismanagementdaregotothetoiletwithoutaskinghimfirst.”

TheseandotheraccusationshavebeenleveledatBranson,butitisdifficulttoseehowsuchpandemoniumcouldberuledoverbysucha

panjandrum.Mostdictatorsrelyonrulestokeeppeopleinline.Branson’sempireisclosertochaos.

SHIPAHOY

Bransonhasbeencalledavisionary,asage,agurueven.“The

‘hippycapitalist’hasbecomeabusinessvisionarywhosemanagementstyleand

philosophyofferssomepotentiallycruciallessonsforcapitalisminthethroesofchange,”notesonecommentator.6

“Achildoftherevolutionary1960s,he’sforgedauniquesynthesisoftheyouthrevolution’svaluesandtheneedsofamodernbusiness…somehowhisvaluesandstyleallayournaggingdoubtsaboutthemoralityof

moderncapitalism’sendsandmeans.”

Utopianintheromanticsensehemaybe,butBransonisnosocialengineer.Hehasnoblueprint.Evenifhethoughtheknewtheanswer,Bransonwouldn’twanttoalienatepeoplefromtheVirginbrandbyexplainingit.

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119

Althoughhehasanoutrageous

“The‘hippy

senseofhumor,heisfartoopoliti-

callycorrecttooffendany

particular

capitalist’has

socialgroup.Whenaskedquestions

becomeabusiness

oncontroversialtopicshistypical

visionarywhose

responseistooffermultiplechoice

managementstyle

answers,indicatingtherearemany

andphilosophy

dimensionstotheissue,ortosug-

gestthatperhaps“thereisno

right

offerssome

orwronganswer.”

potentiallycrucial

lessonsfor

Intruth,the“visionthing”isn’tre-

capitalisminthe

allyBranson’sthing.Whatheisgood

throesofchange.”

atiskeepinghisonegoodpirate’s

eyepressedtothetelescopeand

constantlyscanningthehorizonfor

heavilyladentreasureshipsripeforboarding.Theothereyeheusestokeepawatchfulvigilonthehereandnow,andtoensureheknowswhatisgoingonwithhisconstituency–theVirginfaithful.

OneofthelessonstobelearnedfromBransonisnottogettoohungupongrandioseideasandprojects,buttomovewiththetimes.

HisgreatskillistheabilitytostayintouchwithVirgin’scustomersandemployeesandusethatknowledgetospynewbusinessopportunitiesthatareripefortheVirginformula.

Asforhisphilosophyandideasofabetterworld,itishardtoseparatethemfromhisinstinctivefeelforwhatmotivatesandinspirespeople.Inotherwords,don’t

askBransonforanswers,justfollowwherehisinstinctleads.

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120BUSINESS


DON’TLEADSHEEP,

HERDCATS

Ratherthanexpectpeopletofollowblindlywhereheleads,Bransonreliesonhisabilitytogetthebestfromindividualsbycreatingachallengingenvironment.Likeherdingcats,it’smuchhardertodobutalotmorelively.Thelessonsforleadersare:

◆

Beabackseatleader.OneofthecharacteristicsoftheBransonleadershipstyleisknowingwhentogetoutthewayandletpeoplegetonwithit.

◆

Actasacatalyst.Bransonisthecatalystthattransformspotentialenergyinaproject

orideaintokineticenergythatsendspeoplescurryinginathousanddirections.

◆

Surroundyourselfwithtalentedpeople.WhatBransonisgoodatissurroundinghimselfwithverytalentedpeopleandcreatingtherightenvironmentforthemtoflourish.

Thisisnomeanfeat.

◆

Encouragechaos.Bransonisthemasterofmayhem,orchestratingthechaos.

◆

Constantlyscanthehorizonfornewopportunities.Branson’sgreatskillistheabilitytostayintouchwith

Virgin’scustomersandemployeesandusethatknowledgetospynewbusinessopportunitiesthatareripefortheVirginformula.

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121

NOTES

1Mitchell,

Alan,


2Jackson,

Tim,

VirginKing,HarperCollins,London,1994.

3Mitchell,

Alan,


4


5

“Hashewonthelottery?,”TheIndependent,December17,1995.

6Mitchell,

Alan,


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EIGHT

MOVEFASTERTHAN

ASPEEDINGBULLET

“HejustsaysYesorNo.Hedoesn’tspendvaluabletimefartingabouttryingtoconvinceabunchofmiddlemanagersit’sagoodidea.”

–RowanGormley,CEO,VirginDirect

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MOVEFASTERTHANASPEEDINGBULLET

125

IfthereisoneareawhereRichardBranson’sdisdainforthe

“suits”ofthecorporateworldisentirelyjustified,itisinthespeedoftheirreactions.Managementgurusareagogatthenotionofalargecorporationthatcanmovequickly.Inmostmultinationals,bureaucracy

heapedonbureaucracyhascreatedanenvironmentwheremanagementbookssuchasTeachingtheElephanttoDanceandWhenGiantsLearntoDancearebestsellers.

Eventhe“downsizing”ofrecentyearshasfailedtogettotherealproblem.Attheheartofmostcompaniesthereisafattylayerofinefficientseniormanagement,

whocouldn’tmakeadecisioniftheirlivesdependedonit.Yet,forthreedecades,Bransonhasshownhislumberingrivalsthemeaningofagility.Timeandtimeagain,Virginhasdemonstratedhowtoexploitawindowofopportunity.

TodosoBransonreliesoninstinctasmuchasanalysis.Hehascreatedexceptionallyshortdecision-making

chains.Thenormalcommitteestagesarealmostentirelyabsent.

TURBOBRANSON

LikeSuperman,Bransonmovesfasterthanaspeedingbulletwhenanopportunitypresentsitself.Thereareinvaluablelessonsforthewould-beentrepreneurofthefuture.Anin-builtsuperchargercanwork

wonders.ThespeedatwhichBransonexpectstomove,forexample,isoftenbreathtaking.

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126BUSINESS


VirginAtlanticAirwayswasliterallyairbornejustfivemonthsafterBransonfirstdiscussedtheidea.VirginTrading,theconsumergoodscompany,wascreatedjustdaysbeforeVirginColawaslaunched.

VirginDirect,thefinancialservicesarm,wasupand

runninginfivemonths.“Mostpeoplewouldhavetakentwoyearsatleast,”

saysRowanGormley,foundingCEO,andnowchiefexecutiveofVirginWines.“Bransonhasfantasticallygoodmarketinginstinctsandhebelievesinthem.HejustsaysYesorNo.Hedoesn’tspendvaluabletimefartingabouttryingtoconvinceabunchofmiddlemanagers

it’sagoodidea.”

EvenwhenheisworkingonNeckerIslandheisawhirlwindofactivity.AFortunereporterwhowentouttointerviewBranson,recountedhowBranson,whousuallygetsupat5.30inthemorning,washardatworkby7.00inthemorninghavingalreadycrammedinseveralgamesoftennis,withsomeslightlylessenthusiastic

tennispartners.1

“Heseemstoworkabout35hoursaday,”saysonelong-standingVirginemployee–andheexpectshisstafftodothesame,oftenplacingimpossibledemandsontheirtimeandpatience.

OnmanyoccasionsBransonhasusedspeedtooutflankcompetitors.Inonecase,forexample,hewenttovisit

Ariola,theFrencharmofaGermanrecordingcompanythatalsohandledrecorddistributionforothercompaniesincluding,atthattime,Virgin.AnexecutiveletslipthatAriolaplannedtosignatalentedsingercalledJulienClerc.Bransonrushedofftothebathroomandwrotedownthenameonhishand.Assoonasthechancepresenteditself,hecalledoneofthedirectorsofVirgin’s

ownFrenchoperationsandaskedhimaboutthesinger.Clercc08.indd126

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127

wasverypopular,hewastold.Bransonthentrackeddownthesinger’smanagerandsignedClerctoVirgin.2

LEAPBEFOREYOULOOK

Bransonisnotagreatbelieverinmarketresearch,preferringtotrusthisinstinctivefeelforwhatconsumerswant,oftenbasedonhisownconversations

withthem.WhereVirginhasbenefitedfrommarketresearchithasoftenbeencarriedoutbyajointventurepartnereitherpriortomakingabusinesspropositionortorefinetheproductofferingonceVirginisonboard.Oneofthegreatadvantagesofowningsuchapowerfulbrandisthatpartnerswilloftenmaketherunning.

Oncetheideahasagreen

lightfromBranson,thenthefinerdetailscanbehonedbyothers.Branson’swillingnesstoleapbeforehelookshasimportantadvantages.ItmeansthatVirgincanoftenlaunchnewproducts–evenwholenewcompanies

–intothemarketplacemuchquickerthanitslumberingrivals.

Withthespeedatwhichthe

businessenvironmentchangesthesedays,thiscanmakeallthedifferencebetweentakingadvantageofawindowofopportunityandmissingout.Attheendoftheday,aslongastheVirginreputationisnotcompromisedinanyway,

Oneofthegreat

thenanunprofitableventurecanbe

advantagesof

closeddown.

owningsucha

Itmaysoundlikeacavalierattitude

powerfulbrandis

towardsthepricelessVirginbrand.

thatpartnerswill

However,thereareanumberof

oftenmakethe

safeguardsbuiltintotheprocessthat

running.

allowBransontobecommercially

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128BUSINESS


promiscuous.Ithasbeensaid

thatheisabitofacontrolfreakwhenitcomestojointventures.Theonlypartnershipswithothercompaniesthatheistrulycomfortablewitharethosewherehehasacontrollingstake.WhentheVirginnameisusedonanothercompany’sproduct,Bransonretainstheroleofbrandguardian.

“Wearecarefulnottoassociateourselveswith

productswecannotbeproudof,”hesays.“Andwehavetherighttowithdrawthenameataweek’snoticeifwearenothappywiththeobjectivesoftheothercompany.”

Atthesametime,inthemajorityofitspartnerships,Virginaimstonegotiatea“supermajority,”withacontrollingstakefarinexcessoftheequityithas

invested.

“Bransonhastakenasmartrouteforaprivatecompany,”saysoneinvestmentexpert,“expandingthroughjointventures,withoutsidersputtingupasmuchcashaspossible,ratherthangettinginhockwithbanks.”

THEDECISIVEMOMENT

Timingisallimportantto

Branson’ssuccess.Heisamasterofthedecisivemoment.Thisistheall-importantmomentwhenanopportunitypresentsitself.Itcouldbethepointatwhichpowershiftsfromonesidetotheotherinabusinessdeal;oritcouldbewhenarivalmakesafatalmistake.Itmaylastmonthsorjustseconds,butBransonisbrilliantatrecognizingitandexploitingit.

InthecaseofBritishAirwaysandthedirtytricksaffair,thedecisivemomentcamewhenBA’smediamachinesuggestedthatc08.indd128

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MOVEFASTERTHANA

SPEEDINGBULLET

129

Branson’smotivesformakingallegationsagainstBAwereto

“createpublicityforhisairline.”ThatmistakegaveBranson’slawyerswhattheyneededtofilealibelwritagainstBAanditschairmanLordKing.Upuntilthat

point,Virgincoulddolittletoprotectitselfexcepttrytodrawmediaattentiontowhatwashappening.Inreality,however,theallegationsweretoocomplexforthepublictograspeasily.Butoncethedecisivemomentwasreached,thetideturned.

Bransonhasalsousedthisskilltogreateffectduringnegotiationsthroughouthisbusinesscareer,seizingon

opportunitiestorenegotiatemorefavorabletermsorpresshomesomenewadvantage.

TimingisalsoabsolutelycriticaltomanyofhisPRactivities.Asintheotherareasofhisbusinesslife,Bransonisabrilliantopportunistwhenitcomestothemedia.Whenitbecametangledinitsownsophistryaboutbeingaglobalairline

anddecidedtodroptheBritishflagfromitslivery,BAofferedBransonanewsstoryonaplate.HardlywasthepaintdryontheBAaircraftthanBransonthepatriotwasorderingthattheunionflagbeincludedontheVirginlivery,tellingjournaliststhatifBAdidn’twanttoflytheflag,Virginwouldbeproudto.

WITHALITTLEHELP

FROMMYFRIENDS

SomethingBransonisespeciallygoodatispersuadingotherstogetinvolvedinhisprojects.Whetherit’sVirginemployeesorpartnerorganizations,Branson’senthusiasmisinfectious.

Inrecentyears,too,thecredibilityoftheVirginbrandmeansthathehas

becomeamagnetforbusinessproposalsfromotherorganizations.

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130BUSINESS


VirginCola,forexample,grewoutofthedevelopmentofapre-miumcolaformula

fromacompanycalledCottsEuropethatsuppliesmanyofthesupermarketswithownbrandcolas.WhenVirginmovedintocomputersitwasinpartnershipwithICL.

WhenitwentintotheUSretailingmarketitwaswithBlockbust-er.TheoriginalbackroomexpertiseforVirginDirect,Branson’sfinancialservicesoperation,camefromNorwichUnion,a

leadingUKinsurancecompany,andsubsequentlyfromAustralianMutualProvincial(AMP).

ThispartlyexplainsthespeedwithwhichVirgincompanieshavebeensetup.Thehugeadvantageofapartnerthatalreadyknowsthebusinessisthatlearningcurvesarefarlesssteep,andspe-cialistexpertiseisontap.Oncetheproductorservice

hasbeendecided–usuallyasingleofferingtobeginwith–themainfocusoftheeffortgoesintogettingthemessagerightforconsumers,andaddingthatallimportantcheekyVirgintwist.

TheappealoftheVirginbrandnameisalsosuchthatinrecentyearsBransonhasbeenabletotakeriskswithotherpeople’smoneyaswellas,andsometimesinsteadof,

hisown.But,asastoryfromhischildhoodillustrates,hehasalwaysunderstoodthebenefitsofusingotherpeople’sassetstoresourcehisadventures.

ThefriendshipbetweenBransonandhisschoolfriendandlong-timebusinesspartnerNikPowellassumedarecurringpattern.

Ononeoccasion,itwas

decidedto

“christen”Nik’snewbicyclebytak-

“RichardBranson

ingitinturnstoridehellforleather

hasthe

downahilltowardsanearbyriver.

concentrationofa

Theobjectofthegamewastoseewho

gnat.”

couldgettheclosesttotheedgewith-

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131

outgoingin.YoungNikskiddedtoa

Bransonon

haltafewfeetshortoftheriver.Then

cameRichard’sturn.Withawhoop

takingrisks:

ofdelight,hesetoffdownthehill

“Oneshould

andstraightintotheriver.Nikhad

justgetonwith

tofishhimoutwithapieceofwood.

itandlearnfrom

Thebicycle,however,wasneverseen

mistakes.”

again,andBranson’sparentshadto

findthecostofareplacement.3

VIRGIN’SSAMPLEOFONE

Bransongetsfiredupbynewideasandconvertsthemintobusinessopportunitieswithhead-spinningspeed.ThedownsideforVirginemployeesisthattheirillustriousleaderisconstantlyswitchingfromonehobbyhorsetothenext.

“RichardBransonhastheconcentrationofagnat,”saysoneVirginemployee.ReferringtoBranson’sbelief

thathecanspotabusinesswinnerwithoutmarketresearch,membersofstafftalkaboutVSO–Virgin’sSampleofOne,shorthandforBranson’slatesthare-brainedschemethat’sprobablydoomedtofailure.

Inevitably,someofBranson’sschemeshavecrashedspectacu-larly.Vanson,forexample,thepropertybusinesshestarted

in1983,costhim£12millionthroughitsmisguidedinvestments;Event,amagazinehestartedin1981,wasanon-event.

ButBransontakessuchsetbacksinhisstride.Tohim,theyarepartofbeinganentrepreneur.ABransonviewoftheworldisthat“hewhonevermadeamistake,nevermadeanything.”

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132BUSINESS


Accordingtoanadvertising

executivewhoknowshimwell,Bransonhaskilledoffwellover100companies.Hisattitudeisgooutandtestsomething.Youonlylearnbytesting.Bransonhimselfputsitmorepositively:“Oneshouldjustgetonwithitandlearnfrommistakes,”hesays.“IlovewhatIdobecauseeverysingledayI’mlearningsomethingnew.”

NOTES

1

Morris,Betsy.RichardBranson:WhataLife.Fortune,September22,2003.

2

Inc.magazine,November1987.

3Brown,

Mick,

RichardBranson:TheAuthorizedBiography,4thedn,Headline,London,1998.

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133

MOVEFASTERTHANASPEEDING

BULLET

IfthereisoneareawhereRichardBranson’sdisdainforthe

“suits”ofthecorporateworldisentirelyjustified,itisinthespeedoftheirreactions.

Managementgurusareagogatthenotionofalargecorporationthatcanmovequickly.Hehascreatedexceptionallyshortdecision-makingchains.Thenormalcommitteestagesarealmostentirelyabsent.Thelessonsare:

◆

Avoidparalysisbyanalysis.ThespeedatwhichBranson

expectstomoveisoftenbreathtaking.

◆

Leapbeforeyoulook.Bransonisnotagreatbelieverinmarketresearch,preferringtotrusthisinstinctivefeelforwhatconsumerswant,oftenbasedonhisownconversationswiththem.

◆

Streamlinedecisionmaking.TimingisallimportanttoBranson’ssuccess.Heisamasterofthedecisivemoment–theall-importantmomentwhenanopportunitypresentsitself.

◆

Getplentyofhelp.SomethingBransonis

especiallygoodatispersuadingotherstogetinvolvedinhisprojects.

Whetherit’sVirginemployeesorpartnerorganizations,Branson’senthusiasmisinfectious.

◆

Don’tbeafraidofmakingmistakes–it’stheonlywaytolearn.Bransongetsfired

upbynewideasandconvertsthemintobusinessopportunitieswithhead-spinningspeed.ThedownsideforVirginemployeesisthattheirillustriousleaderisconstantlyswitchingfromonehobbyhorsetothenext.

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NINE

SIZEDOESMATTER

“Everytimeabusinessgetstoobig,westartanewone.Keepingthingssmallmeanskeepingthings-

personal.”

–RichardBranson

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Whilemuchofthecorporateworldseemsobsessedbythesizeofeachothersorgan(ization)s,Bransonpreferstokeepitsmall.TheVirginGroupiseffectivebecauseitmaximizestheentrepreneurialspiritofitsstaffwhilstminimizingthebureaucracyofitssystems.Virginisnotatraditionalhierarchicalcompany.Rather,itisaclusterof

looselyassociatedbusinesses,withtheirownofficesandtheirownmanagementteams.

Bransonexplains:“Everytimeabusinessgetstoobig,westartanewone.Keepingthingssmallmeanskeepingthingspersonal;keepingthingspersonalmeanskeepingthepeoplethatreallymatter.”

Ifyoutriedtodesignacorporatestructuretoprovidethegreatestnumberofemployeesindirectcontactwiththeirmarketplace,theresultwouldbeverysimilartotheVirginmodel.Onceagain,Bransoninstinctivelydoeswhatbusinessschoolprofessorshavespentyearsfiguringout.1

FROMACORNS

Bransonisabuildernotabuyer,somethingthatmarkshimoutasaspecialkindofbusinessleader.Whereotherbusinesstycoonshavecreatedempiresbygobblingupsmallerempires,Bransonhasgrownhisown.2“Wedon’tinvestinlandorexpandbybuyingotherlargecompanies,”hesays.“Settingupcompaniesismyskill.”

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Inrecentyears,Virginhasalsoprovedhighlyadeptatcreatingjointventuresand

otherpartnerships.ThishasenabledBransontotaketheVirginbrandintocomplexmarketplaces–providingthedistinctiveVirginofferingwithouthavingtocreateanorganizationfromscratch.Agoodexampleisthe50:50jointventurewithNorwichUnion,oneoftheUK’sleadingfinancialservicescompanies(subsequentlyreplacedbyAustralianMutualProvident).3The

partnershipenabledVirgintoofferfinancialproductsincludingcomplexpensionplansandinvestmentpackageswithouthavingtobringinallthenecessaryexpertisein-house.

SuchisthepullingpoweroftheVirginnamethatcompaniesareonlytoopleasedtoworkwithVirgin.Inrecentyears,Bransonhasstatedthattheabilityto

createandmanageeffectivejointventuresisoneofVirgin’scorecompetencies.

Muchofhistimeisspentlookingatpotentialnewbusinesses.

AhumandynamoatthecentreoftheVirginempire,heisconstantlysparkingoffnewprojects,whicheithertakerootandgroworsimplywitheronthevine.(Branson

andhisbusinessdevelopmentteamhavebeensaidtogetthroughabout50businessproposalsaweek.Atanyonetimetheyhaveaboutfournewprospectsunderreview.)4

Onceapromisingventurehasbeenidentified,Virginisexceptionallygoodatgettingabusinessoffthegroundquickly

–ofteninjustafewmonths.AlthoughBransonhimselfhasthegoodsensebothtosurroundhimselfwithablepeopleandtoletpeoplerunwiththeball,hisownenthusiasmfortheadventureinvariablygetsthebetterofhim.Forsheerpromotionalmuscle,too,thereisnothingquitelikeaBransonPReventtolaunchanewVirginbusiness.

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SIZEDOESMATTER

139

Bransonhimselfadmitshisgreatloveandmain

occupationissettingupnewfirms.“Iimmersemyselfinthemforthreemonths,thenbackoff,”hesays.“AfterthatIhavetosaytothemtheycanonlyhavemeonceortwiceayear.Ifanythingthatknackfordelegationisthecompany’scorecompetence.”5(Anothercorecompetence.)

TheexceptiontotheruleisVirginAtlanticAirways,

whichcommandsthelion’sshareofBranson’sattention.SincethesaleofVirginMusicGrouptoThornEMIin1992,ithasbeenthejewelintheVirgincrown.

THESIMPLELIFE

Branson’sconstantquestfornewbusinessesmeansthattheVirginGroupisanintricateandconstantlyevolvingwebofstart-ups,

jointventuresandpartnerships.Likeanover-fertilegarden,suchacomplexandorganicempirecouldeasilybecomeovergrown,butBranson’spromiscuousattitudetocommerceismatchedbyhisdisdainforhubris.AnimportantpartoftheBransonbusinessphilosophyiskeepitsimple–avaluethathepersonifies.

Branson’slifeisremarkablyuncluttered.Hisstyleislow-keyandlow-tech.Heisnotfondofcomputers,anddidn’tacquirehisfirstmobilephoneuntil1993.IfthereisoneadagethatepitomizestheBransonapproachitis“keepitsimple.”

“Bransonworksasifhe’srunningastartup”observedForbesmagazine.“…Therearenoflowcharts,no

traditionalmanagementhierarchies.Hedoesn’tevenknowhowtoturnonaThinkPad,andassociatesLotusnotwithNotesbutwithaveryfastcar…Ananachronismintheworldofinternationalbusinessmagnates,c09.indd139

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140BUSINESS


Bransonkeepshisappointmentsina

“Bransonworks

diaryandscribblesideasonhishand.

asifhe’srunninga

Itworks,apparently.”6

startup.”

HecarriesabouthispersonanA4

notepadboughtfromastationery

store.Inithescribbleshisownideasandnotesonconversationsandlistsoftaskstodo.(Suchistheesteeminwhichhe’sheld,thatotherVirginstaffimitatehimbyscribblinginnotebooks.)Thisprincipleappliesinhisprivatelifejustasmuchashisbusinesslife.Evenhistasteinfoodand

drinkissimple.AcruelremarkbyonebusinessacquaintanceinvitedtodinnerwithBransondescribedthefoodas“likeschooldinners.”

NeckerIsland,partoftheBritishVirginIslands,nowofficiallybelongstothecompany.Itboastsafinekitchenandwinecellar,butthesearemoreforthebenefitofvisitorsandVirgin

executives.Bransonhimselfshowslittleinterestinsuchmatters.HeissaidtohavebeenscandalizedwhenVirginexecutiveswantedtospendcompanymoneytastingvintagewinesinrestaurants,andusedtohavearulenevertospendmorethan£15onabottle.

Bransonseemscuriouslydetachedfromthematerialdetailsofhislife.Joan,his

wife,isknowntodespiseaffectation.

Despitehishugepersonalwealth,Bransondresseslikesomeoneofmuchmoremodestmeans.Indeed,ofhisdresssense,ithasbeenobservedthathelooksasthoughhepickedtheclothesheiswearingoutofthecupboardatrandominthedark.ToBranson,noneofthisisimportant.

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SIZEDOESMATTER

141

THEATOMIZEDEMPIRE

Muchthesameprincipleappliestothewayheorganizeshisbusinessempire.Toavoidbureaucracy,thewholeofVirginisdividedintomanageablechunks.Tomaximizetheentrepreneurialenergy,andtocounterbalancetheriskof

lossesinonepartoftheempireinfectingtheotherparts,eachVirginventureisintendedtobeastand-alonebusiness(eventhoughinpractice,cashgeneratedbyonebusinessisoftenusedtofinanceanother).ThisisreflectedinthestructureoftheGroup.

BransonrejectsWesterncorporateorthodoxy,preferringaloosegrouping

ofcompaniesmoreakintotheJapanesekeiretsumodelorfamilyofcompanies:theVirginGroupisacollectionofsemi-independent,looselyconnectedempires.7

“TheGroup,”hesays,“isdefinedbyitsconstituentparts.”Eachoneofwhichishousedinadifferentbuildingandencouragedtohavethecharacteristicsofasmallbusinessinitsownright.

Virginhasanexceptionallydecen-

Bransononthe

tralizedstructure.TheVirginbrand

iscontrolledbylicensingagreements

atomizedVirgin

witheachbusiness.

(Branson’sinter-

empire:

estsareprotectedbyensuringthathe

“Wherewesee

almostinvariablyhasanownership

anopportunityor

stakeof50percentorgreater.)The

gap,westartanew

businessesarerunasindependent

companiesbytheirownboardsof

division.Everytime

directors.

abusinessgets

toobig,westart

TheVirginGroupconsistsofanum-

anotherone.”

berofdivisionsor“clusters”ofrelated

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142BUSINESS


concerns.Forexample,atravelclustercontainstwoairlines,anaviationservices

businessandatravelcompany.Anentertain-mentsclusterincludescinemas,music“Megastores,”arecordlabelandfilminterests.Thefinancialservicesclustersellspensionsandinvestmentplans.

“Whereweseeanopportunityorgap,westartanewdivision.

Everytimeabusinessgets

toobig,westartanotherone,”Bransonsays.Thisinturnfostersacozy,informalatmosphere.Ageneralruleofthumbhereisthatonceabusinessgetstoobigtoknoweveryonebytheirfirstname,thenitistimetobreakitup.

“Usuallytherearenomorethan60peopleinanyonebuilding,”

Bransonsays.

THEHOUSEBOATHQ

Longbeforetheyfelloutoffavorwithmanagementgurus,Bransonspurnedtheveryideaofalargecorporateheadquarters.

Formanyyears,herantheVirginempirefromahouseboatontheRiverThames:boardmeetingswereheldaroundBranson’skitchentable,orinanearby

pub.Whenthehouseboatsank,takingmostofhisbelongingswithit,hehadtomakealternativearrangements.

Buteventhenhewasn’tpreparedtomoveintoconventionalof-ficespace.TheVirginHQmovedupmarketwiththepurchaseoffirstone,andeventuallyawholestringofhouses,inLondon’strendyHolland

Park.DifferentVirginbusinesseswerelocatedinthedifferenthouses,providingeachwithasenseofidentity,andenablingthedifferentmanagementteamstoruntheirownshow.Forawhile,Bransonranthebusinessfromanofficeinoneofthehouseswhichdoubledashishome.HenowhasanofficeataseparateHollandParkaddressdowntheroadfromhishouse.

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SIZEDOESMATTER

143

AvisitingreporterdescribedtheVir-

ginhub:“Thehouseiscertainlygrand

“Outofthe

(creamywalls,whitemoldedceilings,

apparentrandom

andallthevaststucco

proportions

chaosoftheVirgin

therichinwestLondonacquire)but

organization,

itisnothinglikeamoderncorporate

abusiness

headquarters.”8

philosophy–almost

Eventoday,theideaofhousingthe

anentrepreneurial

companyinatowerblockwouldbe

blueprint–couldbe

anathematotheBransonphiloso-

discerned.”

phy.ThevariousVirginbusinesses

stilloperatefrombuildingsscattered

aroundHollandPark.9

GOODIDEASALWAYS

WELCOME

TheNotInventedHeresyndromeisthescourgeofmanybusinessorganizations,buttheVirgincultureisopentonewideasfromanyquarter.RichardBransonhasmadeitcompanypolicytolisten.Hehasalsomadeitpublicknowledgethatthecompanywilltakealookatbusinessproposalsfromwould-bepartners.Inreality,

Virginendsuprejectingabout95percentoutofhand,preferringtoexploretheonesthathaveseriousbacking.

WithintheVirginorganization,Bransonheadsupasmallteam(includinghimself,andanexperiencedventurecapitalexpert)thatmeetstodiscusstheseproposals.

Hehasalwaysencouraged

Virginemployeestomakesuggestionsforimprovingthebusiness–andestimatesthathereceivesbetween30and40lettersadayfromVirginstaff.Hetriestoreplytotheirlettersfirst.Butthewholestructureofthecom-c09.indd143

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144BUSINESS


panyisdesignedtoencourageentrepreneurialbehavior,andtoengenderasenseofbelonging.

AsBranson’sbiographerMickBrownobserves:“Out

oftheapparentrandomchaosoftheVirginorganization,abusinessphilosophy–almostanentrepreneurialblueprint–couldbediscerned.Bysituatingeachcompanyonitsown–albeitsmallanddeterminedlyunglamorouspremises–overheadswerekepttoaminimum,but,moreimportant,afamilialatmospherewascreatedamongstaff.”

NOTES

1

ThemanagementguruTomPeters,inparticular,hasravedabouttheeffortsofcompaniessuchastheABB,theSwed-ish-Swissengineeringcompany,tobreakthemselvesdownintosmallentrepreneurialunits.

2

Hedidhaveanattackoftakeovermaniainthemid-1980s,butitwasshortlived.Virgin’shostilebidforEMIwascutshortbythestockmarketcrashof1987.

3

AMPsubsequentlyboughtoutNorwichUnion’sshareintheventure.

4


5


6

“RichardBranson:theinterview,”Forbes,February24,1997.

7Mitchell,

Alan,


8

“Hashewonthelottery?”TheIndependent,December17,1995.

9


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145

SIZEDOESMATTER

TheVirginGroupiseffectivebecauseitmaximizestheentrepreneurialspiritofitsstaffwhilstminimizingthebureaucracyofitssystems.Virginisnotatraditionalhierarchicalcompany.

Rather,itisaclusteroflooselyassociatedbusinesses,withtheirownofficesandtheirown

managementteams.TheBransonapproachtocorporatestructurehasfivekeypoints:

◆

Growyourown.Bransonisabuildernotabuyer,somethingthatmarkshimoutasaspecialkindofbusinessleader.Whereotherbusinesstycoonshavecreatedempiresbygobbling

upsmallerempires,Bransonhasgrownhisown.

◆

Keepitsimple.Branson’slifeisremarkablyuncluttered.

ThisadageepitomizestheBransonapproach.

◆

Breakitupintomanagementmolecules.Tomaximizetheentrepreneurialenergy,andtocounterbalancetheriskoflossesinonepartoftheempireinfectingtheotherparts,eachVirginventureisintendedtobeastand-alonebusiness.

◆

Keepheadquarterstoaminimum.Longbeforethey

felloutoffavourwithmanagementgurus,Bransonspurnedtheveryideaofalargecorporateheadquarters.

◆

Ensurethesumofthepartsisgreaterthanthewhole.

RichardBransonhasmadeitcompanypolicytolisten.

Hehasalsomadeitpublic

knowledgethatthecompanywilltakealookatbusinessproposalsfromwould-bepartners.

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TEN

NEVERLOSETHE

COMMONTOUCH

“There’sthisapproachabilityabouthim,notlikeapopstar

orotherbusinessmen.”

–MickBrown,Branson’sbiographer

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NEVERLOSETHECOMMONTOUCH

149

RichardBranson’sultimategiftisthecommontouch.

Hemakesusfeelasifheisoneofus.Inmanywaysthisisthemostdifficultlessonofall.ThosewhowanttofollowinRichardBranson’sfootstepshavetomasterthisskilloralltheotherlessonswillcometonothing.Morethanjusthumility,Branson’sabilitytomixwithpeopleofallwalksoflifesetshimapartfromjustabouteveryotherbusinessexecutiveyouwillmeet.Itisthekeytohis

enduringsuccess–andpopularity.

ThosewhoknowhimwellsaythatBransonalwaysseesthingsfromtheconsumer’spointofview.That’seasyenoughtodowhenyou’refirststartingout.Buttobestilldoingit35yearsonwhenyou’reamulti-millionaireandchairmanofagroupofcompaniesworth£billionsisdeeplyimpressive.Andmake

nomistakeaboutit,Bransonisverymuchintouch.Howdoeshedoit?

“I’mlucky,”hesays(luckisawordheusesalot).“Icantalktopeople.WhenIfirstcametoLondonasateenager,itwassuchalonelyplacetobe.Nowpeoplecomeuptomeinthestreetsorontheunderground.Iamluckytoknoweverybody.”1

HI,I’MTHECHAIRMAN

Wheneverhefliesonhisairline,whichisaboutonceaweek,Bransontakestimeouttotalktotheotherpassengers.Hehasbeenknowntohamitup,donningastewardessuniformandc10.indd149

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150BUSINESS


lipsticktoservedrinkstothepassengersandcrew.Butonmanyotheroccasionshesimplymakestheefforttochatwithhiscustomersandaskthemwhattheythinkofhiscompany.Itis

deceptivelypowerful.

Imaginethatyouareapassengerflyingeconomyclasswithyourfamilyonatransatlanticflightwithaleadingairline.Sometimeintotheflight,amanyouimmediatelyrecognizeastheairline’schairmanintroduceshimselfandpolitelyasksifhecanjoinyou.

Hethenproceedstoperform

afewconjuringtrickstoamusethekidsbeforeproducinganotepadandpencil.“Whatdoyouthinkoftheairline?”Heasks,notinganysuggestionsyoumighthave.“IsthereanythingIcandotoimprovetheservice?”

Fewairlinemanagers–letalonechairmenandowners–takethetimetotalktotheircustomerslikethis.Yetweallknowthattheymust

travelontheirownflightsfrequently,justasBransondoes.Thedifferenceisthatheusestheopportunitytolistentohiscustomerswhiletheyarefartooimportanttotalktomereeconomypassengers(theflightcrewofonefamousairlineunofficiallyreferstotheeconomyclassasthepigpen).

WhenhefirstsetupVirginAtlantic,Branson’spolicyof

personallyphoning50customersamonthtoaskthemabouttheservicewonhimadulation.Notonlywasheofferingbetterserviceandlowerfares,hemanagedtoincludethepersonaltouch.Asoneobservernoted:“ThiswasinstarkcontrasttothemonopolistmonolithBritishAirways–whichatthattimewasdefinitelynottheworld’sfavouriteairline.”2

Evenifyouwanttobecynicalaboutitandsayhe’sonlydoingitforeffect,itisveryhardnottobeimpressedwhenthechairmanc10.indd150

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151

ofamajorcompanytakesthetrouble

MickBrown

toaskyourviewsonhisairline.

onBranson’s

So,thereyouhaveit:thedifference

persona:

betweenRichardBransonand99.9

“Hedoesn’tdoit

percentofthepeoplewhorunlarge

deliberately,but

businessesisthathetreatspeoplede-

it’safactthathis

centlyandlistenstowhattheythink.

Sadly,thatisenoughtoputhimhead

personaconceals

andshouldersabovemostofthe

hisorigins.”

competition.

EVERYMAN

ThereisaboutBransonsomethingoftheEverymanfigure.Fornoreadilyapparentreason,peopleseemtoidentifywithhim,believingheislikethem.YouwillevenhearpeopleinBritainsaythathe’stheoriginal“barrowboycomegood,”eventhoughhisoriginsaremanymilesfromLondon’sEastEnd.Despite

hispublicschoolboybackground,hisposhaccent,hisexpensivehousesaroundtheworld,andhisimmensewealthandpower,forsomeoddreasonordinarypeopleaccepthimasoneoftheirown.(PrincessDianahadasimilarknackofmakingpeoplefeelshewasoneofusinsteadofoneofthem.)Thethingis,themanislikeable.

Peoplewhoknowthe

BransonswellsaythathiswifeJoankeepshisfeetfirmlyontheground.ItishislackoffrontthathasenabledBransontocourtapopularappealthattranscendsclassbarriersaswellasnationalbarriers.

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“Hedoesn’tdoitdeliberately,”saysMickBrown,Branson’sof-ficialbiographer,“butit’safactthathispersonaconcealshisorigins.Peopleseehimasegalitarian,déclassé,

meritocratic;that,combinedwithhisbusinesssuccessandhisbuccaneeringimage,makeshimveryattractive.Andthere’sthisapproachabilityabouthim,notlikeapopstarorotherbusinessmen.”

Asurvey3inMay1993,shortlyafterthesettlementwithBA,showedthatBransonwastherolemodelthemajorityofyoungpeople

inBritainwouldmostliketoemulate.Thepsychologistwhoanalyzedthefindingsnoted:“There’sanFFactortoBranson:he’sgotfame,fortuneandfun.”Thecombinationmakespeoplefeelgood.Adecadelaterandhehasbeenelevatedbeyondthestatusofanationalhero,almosttothatofglobalicon.

InOctober2006hecamethird(afterHollywoodactor

GeorgeClooneyandrapartistJay-Z)inapollofoveronemillionmen,inwhichtheAskMen.comwebsiteaskeditsmalereaderstonamethemantheymostadmired.

Peoplealsoseethemselvesinhim.Hisachievementsaresomehowtheirachievements,andtheylovehimforit.Weseehimdoingthethingswewouldliketodo.Asone

interviewerobserved:“ThisishowwethinkofRichardBranson:inspecialmoments.Richardsprayingchampagne,likeastudentcomingoutoffinals;Richardofferingtorunthelotterywithoutprofit,likeRobinHood;RicharddefeatingthegreatmightofBritishAirwayswithallitsdirtytricks,aDavidagainstabullyGoliath;Richardingoggles,amodern-dayBiggles;Richardcuttinga

ribbon;huggingamodel;huggingaPrincess;huggingScarySpice.Richarddressingupasawoman;asabunnyrabbit,asaclown.”4

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153

LITTLETHINGSTHATMATTER

AstudentwhospentsometimeworkingatacompanyprovidinghotairballoontripsintheSwissAlpsremembersmeetingRichardBranson.Bransonwasthere

withtheaviatorPerLindstrandpreparingforoneoftheirattemptsatcircumnavigatingtheglobeinaballoon.Itwasearlyinthemorningandthetem-peraturewasmanydegreesbelowfreezing.Thestudent,whowaspreparingtheballoonforaflightwasfrozentothebone.

AsthetwopilotsapproachedherecognizedBransonfrom

hispicturesontelevisionandinnewspapers.

WithoutthinkingheslippedoffhisglovetoshaketheVirginchairman’shand,immediatelyregrettingitbecauseofthegnawingcold.Branson,seeingwhattheyoungmanhaddone,removedhisownglovebeforeshakinghands.Hedidn’thaveto.

Asthechairmanofalargeandpowerfulbusinessempire,theyoungmanmeantnothingtohim,andhewouldprobablyneverseehimagain.Untilthatmoment,however,thestudentwasnofanofRichardBranson.Inhiseyes,hewasjustanotherfatcat,whopreferredajumpertoasuit.Butwhatheremembersabouthimisthathegreetedhimasanequal.

Therewerenocamerastheretorecordthemoment.Thatinitselfisrevealinginawaythatinterviewswithjournalistscanneverbe.ThestorysaysalotaboutBranson.Itsuggeststhatheisbasi-callyquiteaniceman;thatheisn’tpompousorpuffeduponhisownselfimportance.Italsoindicatessomethingabouthisstyle.

Bransonknowsthatthelittle

thingsmatter.ItisafeatureofalltheVirginproductsandservices.

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154BUSINESS


THEPEOPLE’S

Bransonknows

CHAMPION

thatthelittlethings

matter.Itisa

WhatBransonhasthatothers

–businessmen,politiciansandTV

featureofallthe

producersinparticular–canonly

Virginproductsand

dreamofishisfingeronthepulse

services.

ofthenation.Heseemstospeakfor

alargepartofthepopulation.

Even

thoughhecouldhaveaffordedthe

redcarpettreatmentonConcordewheneverheliked,hesensedthatpeoplewerefedupwiththeattitudeofthebigairlines.

Hewasright–justaswell,really,sinceVirginAtlanticnearlybankruptedhim.

Somehow,despitethefactthathisown£millionsarecontrolledbytax-efficientoffshoretrusts,hecorrectlysurmisedthatpeoplewithalittlebitofmoneysavedweretiredofthesalespatterandhighchargesfromUKfinancialservicescompanies.SomehowheknewtheywerereadytotrustVirginwiththeirhard-earnedcash.

Cynicswillanswerthathe

hasadviserstotellhimthesethings.

Butwhyshouldthoseadvisersknowanymoreaboutwhatannoysconsumersthanthepeoplewhoadvisetheexecutivesinanyothercompany?Intheend,evenallowingforgoodadvice,it’shardtoavoidtheconclusionthatBransonhashisownbarom-eterofpublicopinionthatinformshis

decisions.

Naturallyenough,hesaysthathetalkstopeopleandlistenstotheiropinionsandideas.Hewouldsaythat,ofcourse.Butyoudon’thavetobeageniustoseethatifyouspendasmuchtimeashedoeswithcustomers,someofithastoruboffonyou.ThosewholiketoknockRichardBranson,orquestionhissincerity,c10.indd154

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NEVERLOSETHE

COMMONTOUCH

155

mightconsiderthis:evenifitwereallabigsham,designedtomakehimlookgood,itwouldstillmeanhespentmoretimetalkingtocustomersthanjustaboutanyothercompanychairman.Thatinitself,makeshimthepeople’schampion.

KARMACHAMELEON

TheBransonphenomenonisprobablyunique.Itisanunusualcocktailofpersonalitycultandbusinessinstincts.Itisalsocuriouslypalatable.PerhapstheappealofBransonisthatheisdifferentthingstodifferentpeople.Whetheryouprefertothinkofhimasthehippyidealistonamissiontocleanupbusiness,alovablepirate

rogue,acorporatePeterPan,orevenarobberBaronindisguise,dependsonyourpointofview.WhatisundeniableisthathehasdazzledtheBritishbusinesssceneformorethanthreedecadesinawaythatnootherentrepreneureverhasbefore,orislikelytoagain.

True,Bransonhasbeenfortunatetoliveinexcitingtimes.Fromthesocial

revolutionofthe1960s,throughtheboomofthe1980s,thedotcomrushofthe1990s,andintothefirstdecadeofthe21stCentury,hehasbeentherewithhisVirginbrandtoofferanalternativetakeonwhateverthesuitsweretryingtosellus.Hehasmadealargefortunedoingit.Butinthesefatcatdayswhenunknownfacelessbureaucrats

areshamelesslyawardingeachother

Perhapsthe

hugesumsofmoneyforcorporate

blandness,Bransonisgoodvalue.

appealofBranson

isthatheis

Intheend,though,itisimpossible

differentthingsto

topindownRichardBranson.Heis,

differentpeople.

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156BUSINESS


inthewordsofBoyGeorge,oneofVirgin’sfamous

discoveries,theultimateKarmaChameleon.


RichardBranson’sultimategiftisthecommontouch.Hemakesusfeelasifheisoneofus.Morethanjusthumility,Branson’sabilitytomixwithpeopleofallwalksoflifesetshimapartfromjustabouteveryother

businessexecutiveyouwillmeet.Itistherealsecrettohisenduringsuccess–andpopularity.HerearetheBransonlessons:

◆

Listentopeople–it’stheleastpractisedmanagementskillofthemall.ThedifferencebetweenRichardBransonand99.9percentofthepeoplewhorunlarge

businessesisthathetreatspeopledecentlyandlistenstowhattheythink.

◆

Don’tletsuccessgotoyourhead–asenseofhumorhelps,sodoesbeingthrownintoswimmingpoolsbyyourstaffonaregularbasis.ThereisaboutBransonsomethingoftheEverymanfigure.Fornoreadilyapparentreason,

peopleseemtoidentifywithhim,believingheislikethem.

◆

Useyourcustomersasconsultants–theyknowtheirrequirementsbetterthantheMcKinseysandBainsofthisworld.Bransonknowsthatthelittlethingsmatter.ItisafeatureofalltheVirginproductsandservices.

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NEVERLOSETHE

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157

◆

Treateveryoneasanequal;BransonismorelikelytoberudetotheCEOofamultinationalthanacheck-inclerk.

WhatBransonhasthatothers–businessmen,politicians

andTVproducersinparticular–canonlydreamofishisfingeronthepulseofthenation.Heseemstospeakforalargepartofthepopulation.

◆

Bewhatpeoplewantyoutobe,anddon’tletthemdown.

PerhapstheappealofBransonisthatheisdifferent

thingstodifferentpeople.WhatisundeniableisthathehasdazzledtheBritishbusinesssceneformorethantwodecadesinawaythatnootherentrepreneureverhasbefore.

NOTES

1

Gerrard,Nicci,“WhydoweloveRichardBranson?”The

Observer,February8,1998.

2Mitchell,

Alan,

LeadershipbyRichardBranson,AMROPInternational,1995.

3

SponsoredbytheTSB.

4

Gerrard,Nicci,“WhydoweloveRichardBranson,”TheObserver,February8,1998.

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HOWTOBUILD

ABRANDTHE

BRANSONWAY

Businessvisionaryor

personalitycult?RichardBranson’sVirginbrandisunique.Noothercompanyhasevercreatedanythingquitelikeit.OnlytimewilltellwhetherBransonhasinventedanewblueprintforcapitalismforthe21stCentury,orissimplyabettersalesman.Nirvanaormoreofthesamewithadifferentspin?Italldependsonyourpointofview.

Forthosewhowanttofollowinhisfootsteps,herearethesecretsofhissuccess.

1Pickonsomeonebiggerthanyou:

attackdominantmarketplayers

RichardBransonhasmadeacareeroutofplayingDavidtotheotherguy’sGoliath.Wheresomeentrepreneurs

mighttakeonelookatthemarketdominanceofthebigplayersandthinkbetterofit,Bransonactuallydelightsintakingonandoutmaneuveringlargecorporations.

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160BUSINESS


TheBransonstrategyis:

◆makebusinessacrusade

◆hoistapirateflag

◆playtheunderdog

◆pickyourbattles

◆hitthemwhereithurts.

2Dothehippy,hippyshake

Branson’saffinitywithflowerpowerandthewhole1960smovementislessacommitmenttoasetofprinciplesorpoliticalbeliefs,andmuchmorerelatedtobeingintunewiththetimes

–oneofhisgreatestbusinessattributes.Branson’salternativemanagementstyleoffersthefollowinglessonstoaspiringmo-guls,including:

◆don’tbeabreadhead

◆dressdowneveryday(notjustFridays)

◆putpeoplefirst

◆blurthedividebetweenworkandplay

◆shakeitup(don’timitate,innovate).

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161

3Haggle:everything’snegotiable

OneofRichardBranson’slessappreciatedtalentsisarazorsharpnegotiatingtechnique.Niceguysfinishlast,orsotheysay,butnot

Branson.Despite–orperhapsbecauseof–hisMrNiceGuyimage,Bransonrarelycomesoutsecondbestinanyofthedealshemakes.Charismaandconsiderablepersonalcharmbelieacalculatingbusinessbrain.

ThelessonsfromtheBransonschoolofnegotiatingare:

◆niceguysfinishfirst

◆neversaynever

◆talksoftlyandcarryabigstick

◆actongoodadvice

◆covertheupsideaswellasthedownside.

4Makeworkfun

Business,inRichardBranson’sview,shouldbe

fun.Creatinganexcitingworkcultureisthebestwaytomotivateandretaingoodpeople;italsomeansyoudon’thavetopaythemasmuch.

Unlikethecomputerwhiz-kidsBillGatesandSteveJobs,Bransonhasneverinventedanyproductofarevolutionarynature.Alltheindustrieshehassucceededinareconventionaloneswith

littleincommonexceptthattheyarematureanddominatedbylargeplayers.SowhatisitthatRichardBransonknowsaboutc11.indd161

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162BUSINESS


businessthatotherpeoplewhohavebeenintheseconventionalindustriesforyearshavefailedtograsp?

Theanswerissimple.Bransonhastheabilitytomotivatepeopleandpushthemtothelimit.Hepossessesaremarkableabilitytoinspireothersto

achievewhattheydidn’tknowtheywerecapableof.TheBransontechniqueformanagingpeopleprovidesthefollowinglessons:

◆itpaystoplay

◆letemployeesloose

◆encourageinformality–stayonfirstnameterms

◆praisepeopleratherthan

criticizingthem

◆makebusinessanadventure.

5Dorightbyyourbrand

OneofthemostfrequentlyaskedquestionsaboutVirginishowfarthebrandcanstretch.Somecommentatorsbelievethat,byputtingtheVirginnameonsuchawiderangeofproductsand

services,Bransonrisksseriouslydilutingthebrand.Hisanswertothiscriticismisthataslongasthebrand’sintegrityisnotcompromised,thenitisinfinitelyelastic.

LessonsfromBranson,thebrandmasterare:

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163

◆agoodbrandtravels

◆brandelasticityisinfinite

◆lovehonorandcherishyourbrand

◆rulesareforbreaking

◆becheeky.

Virgin’sfivebrandvaluesare:

◆valueformoney

◆quality

◆fun/cheek

◆innovation

◆challenge.

6Smileforthecameras

RichardBransonhasturnedhimselfintoawalking,talkinglogo.WhereMcDonald’shasRonaldMcDonald,asixfoot,ginger-hairedclown,andDisneyhas

MickeyMouse;Virginhasitsgoofychairman.Everytimehispictureappearsinanewspaperormagazine,itpromotestheVirginbrand.

Thisisentirelydeliberate,andprobablyoneofthemosteffectivepromotionalstrategieseveremployedbyacompany.Thec11.indd163

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164BUSINESS


risktothereputationofthebrand,ofcourse,iscorrespondinglyhighshouldBranson’spersonalimagebecometarnished.Todate,

however,ithasprovedhighlysuccessful,enablinghimtobuildtheVirginbrandonashoestringadvertisingbudget.

◆Understandwhatthemediawant,andgiveittothem

◆thinkinpictures

◆standupandbecounted

◆remember,philanthropy

andstampcollectingaretwodifferentthings

◆knowwhentoduck.

7Don’tleadsheep,herdcats

Liberatecreativity,andencouragepeopletodowhattheydobest.

◆Beaback-seatleader

◆actasacatalyst

◆surroundyourselfwithtalentedpeople

◆encouragechaos

◆makegoodideaswelcome(wherevertheycomefrom).

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165

8Movefasterthanaspeedingbullet

Bransonmovesquicklywhen

anopportunitypresentsitself.

◆Seizethemoment(bewareofparalysisbyanalysis)

◆leapbeforeyoulook(avoidparalysisbyanalysis)

◆streamlinedecisionmaking

◆usejointventurestoleverageexpertise

◆makeplentyofmistakes(it’stheonlywaytolearn).

9Sizedoesmatter

Ifyou’reaVirgin,thensizeisimportanttoyou.TheVirginGroupiseffectivebecauseitmaximizestheentrepreneurialspiritofitsstaffwhilstminimizingthebureaucracyofitssystems.Virginisnotatraditionalhierarchicalcompany.

Rather,itisaclusteroflooselyassociatedbusinesses,withtheirownofficesandtheirownmanagementteams.

Ifyoutriedtodesignacorporatestructuretoprovidethegreatestnumberofemployeesindirectcontactwiththeirmarketplace,theresultwouldbeverysimilartotheVirginmodel.Onceagain,Bransoninstinctively

doeswhatbusinessschoolprofessorsspendyearsfiguringout.TheessenceoftheBransonapproachtocorporatestructurehasfivekeypoints:

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166BUSINESS


◆growyourown

◆keepitsimple

◆breakupyourempireintosmallmolecules

◆keepheadquarterstoaminimum

◆putoutthewelcomematforgoodideas.

10Neverlosethecommontouch

Inmanywaysthisisthemostdifficultlessonofall.ThosewhowanttofollowinRichardBranson’sfootstepshavetomasterthisoralltheotherlessonswillcometonothing.Morethanjusthumility,Branson’sabilityto

mixwithpeopleofallwalksoflifesetshimapartfromjustabouteveryotherbusinessexecutiveyouwillmeet.

Itistherealsecrettohisenduringsuccess–andpopularity.

◆Listentopeople–customersandemployeesareagoodplacetostart

◆don’tletsuccessgotoyourhead

◆useyourcustomersasconsultants–theyknowtheirrequirementsbetterthantheMcKinseysandBainsofthisworld

◆treateveryoneasanequal;oneofBranson’smostendearingtraitsisthatheismorelikelytoberudetotheCEOofamultinationalthan

acheck-inclerk

◆bewhatpeoplewantyoutobe–beachameleon.

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LASTWORD

InhisbookVirginKing,TimJacksonobservesthatBranson’smottoshouldbearsestcelareartem–theartliesinconcealingtheart.Branson’sbusinessrivalshavepaiddearlyforunderestimat-inghim;formistakinghispublicpersonaforthewholestory.

ThereismuchmoretotheVirginchairmanthanhispublicitystuntsand

schoolboypranks–askLordKing.

ButperhapstherealsecretofBransonisthatheisdifferentthingstodifferentpeople.Whetheryouprefertothinkofhimasthehippyidealistonamissiontocleanupbusiness,alovablepiraterogue,acorporatePeterPan,orevenarobberbaronindisguise,dependsonyourpointofview.Whatis

undeniableisthathehasdominatedtheBritishbusinesssceneformorethanthreedecadesinawaythatnootherentrepreneureverhasbefore,orislikelytoagain.

Bransonhasbeenfortunatetoliveinexcitingtimes.Fromthesocialrevolutionofthe1960sthroughthehalcyondaysofthe1980s,intothemorecaring1990s,andinto

thenewmillenniumhehasbeentherewithhisVirginbrandtoofferanalternativetakeonwhateverthesuitsweretryingtosellus.Youcan’thelpthinkingthoughthathewouldhavemadeanytimeinteresting.

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168BUSINESS


Intheend,though,itisimpossibletoputRichardBransoninaspecimenjar.NotonlyishetheultimateKarmaChameleon

–changingcolortosuithis

surroundings–buthehasbroughthismanycolorstotheworldofconsumers,employeesandbigbusiness.Sofar,atleast,hehasgiventhesuitsadamngoodrunfortheirmoney.

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INDEX

Abbott,David61

exploitmarketopportunity

agility125

86–7

avoidparalysisbyanalysis

integrity

81

125–7

logo

4–5

don’tbeafraidofmaking

love,honour,cherish84–6

mistakes131–2

reputational81,84–6

getplentyofhelp129–31

tongue-in-cheek

approach

leapbeforeyoulook127–8

87–8

streamlinedecisionmaking

ubiquitous

82

128–9

values

85

AIDS6,102

Branson,Joan70,140

Ansell102,104

Bransonphenomenon1–3

Ariola126

Branson,Richard

AustralianMutualProvincial

adventurousoutlook2–3,6,

(AMP)130,138

74,75–6,96–9

approachablestyle72–3

BarclaysBank62

businessstrategy11–12

BlueRiband94,97

casualstyle41–3

Blyth,Chay98

commercialambitions3

Boeing61–2

confident/can-dopersonality

BoyGeorge11,47,101,

67–70

156

culturalicon5

brand

delightinhaggling55–60

appeal

130

earlyyears8–9

attributes

86

exhibitionist

tendencies

credibility

83

99–100

elasticity

82–4

hippylabel2,37–9

bindex.indd169

bindex.indd169

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170BUSINESS


ideology

39

Gormley,Rowan48–9,126

naiveness

104

GTech32–3

networthix-x

GulfWar101

aspoliticallycorrect119

public/privateimage7–8

Halpern,Ralph100

publicityimage93–106

Hamel,Gary12

shyness

95–6

Hendrix,Jimi57

simple/modestlife140

socialaspects47

innovation48–51

astechnophobe139–40

tycoon-in-waiting

9–11

Jackson,Tim8,45,58,96

viewoflife40–41

BritishAirways(BA)30–32,44,

King,Lord31,32,129

96,128

Brown,Mick38,42,47

Laker,Freddie30,96

BurtonGroup100

leadership

actascatalyst113–15

Clerc,Julian126–7

encouragechaos116–18

Coca-Colax,23,27

hands-off/back-seat

112–13

competition29–30

planningthefuture113–14

corecompetence12–13,139

scanfornewopportunities

CottEurope72

118–19

Couttsbank42

style

111–12

Cruikshank,Don61,114

surroundyourselfwithtalent

CultureClub11,47,70

115–16

Lester,Simon72

Davidson,Andrew42,43

libelactions31–3,44

decisionmaking28–9,45,128–9

LondonEnergy84

Diana,Princess101

Draper,Simon55,70–71

MakepeaceIsland,Queensland

(Australia)xiii

environmentxiii-xv,6,101

MarsSyndrome83

Mates1,102,103–4

Fields,Randolph59–60,62

Mayfairmagazine46

financemarket48–51

Murphy,John82

GlobalChallenger97

NationalLotteryxv,6,102,104

Goldsmith,SirJames69–70

NeckerIsland140

bindex.indd170

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INDEX

171

negotiation

keepitsimple139–40

alwayscovertheupside61–2

minimum

headquarters

getgoodprofessionaladvice

142–3

60–61

SlippedDiscRecords2,4

hagglingstyle55–60

Snowden,Guy32–3

nevertakenoforananswer

SouthwestAirlines76

589

staffrelations43–5

niceguysfinishfirst56–8

strategy11–12

talksoftly,carryabigstick

crusadingattitude24–5

59–60

guerrillatactics30–33

NorwichUnion130,138

pickyourbattles28–9

positioningasunderdog26–8

Oldfield,Mike2,10,47,70

swashbucklingattitude25–6

StudentAdvisoryCentre103

Pepsi-Colax,97

Studentmagazine10,37,46

Porter,Michael11

style

Powell,Nick9,130–31

don’timitate,innovate48–51

Prahalad,C.K.12

dress-downeveryday41–3

publicrelations(PR)138

financialmodesty40–41

advertisingvalue93,94

informal/nonconformist

avoidanceofnegative

37–9

publicity104–6

people

first43–5

favourablepress93–4

workhard,playhard45–7

publicspiritedactivities102–4

standupandbecounted101

TangerineDream47,70

thinkinpictures98–100

ThorneEMI139

understandwhatmediawant

94–8

UK2000103

Ritchie,Alex97

VirginActivexii

Roddick,Anita8,105

VirginAtlanticAirways11,23,

30–32,44,59–60,61–2,

set-upcosts61–2

74,94,112,126,139

SexPistols2,47,88

VirginAtlanticChallengerII98

size137

VirginBridex,98

considernewproposals143–4

VirginColax,23,72,95,130

decentralizedstructure141–2

VirginDirect23,48–51,82,88,

growyourown137–9

126,130

bindex.indd171

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172BUSINESS


VirginEnergyxii,84

virginmoney.com50

VirginGalacticix,xii-xiii

Virgin.netxiii

VirginGroup1,105,137

Virgin’sSampleofOne(VSO)

advisersin61

131

divisionalstructure141–2

historicaltimeline13–19

workculture

ownership7,44–5,56

creativefreedom70–72

trustedname25

divideandrulemodel71–2

universalbrand3–5

empowerment

70–71

VirginHealthcare102

enthusiastic

74

VirginMegastores44,142

excitement/adventure

75–6

VirginMobilexiii

havingfun68–70

VirginMoney50

informal

72–3

VirginMusicGroup70–71,139

looseorganizationalstructure

VirginPEP49–50

71

VirginRecords5,47,88

makingadifference76

VirginTrainsx-xii,84,87

motivation

67–8

VirginWinesxii126

promotionstrategy73–4

bindex.indd172

bindex.indd172

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DocumentOutline

BusinesstheRichardBransonWay

AcknowledgmentsRichardBransonRevisited…TheLifeandTimesofRichardBransonOne:Pickon

SomeoneBiggerThanYouTwo:DotheHippy,HippyShakeThree:Haggle:Everything’sNegotiableFour:MakeWorkFunFive:DoRightbyYourBrandSix:SmilefortheCamerasSeven:Don’tLead

Sheep,HerdCatsEight:MoveFasterThanaSpeedingBulletNine:SizeDoesMatterTen:NeverLosetheCommonTouchHowtoBuildaBrandtheBransonWayLastWordIndex