Richard Branson is one of the world’s most innovative minds today. His experiences in entrepreneurship are a treasure trove that he has shared in The Virgin Way (2015).
He believes that successful entrepreneurship entails much more than simply leading. Right from dropping out of high school to opening his first Virgin records store, he shares insights into his eccentric leadership, success in business, the future of the business world, and that his brand isn’t built on great leadership alone.
Lessons From The Past
We inherit our looks, our behaviors, and even personalities from our parents. Our parents on the other hand always strive to give us a good upbringing, good values, positive philosophies, and righteous principles in life. As adults, we have much to thank our parents for. Richard Branson believes that his leadership approach was influenced greatly by his father.
When he was young, he would often visit a local shop to buy chocolates. He would steal change from his parent’s room to pay for the chocolates. The shopkeeper, suspecting Branson’s stealing habit, told his father Ted about his visits to the local store.
While Branson expected punishment that evening, he simply got a cold shoulder treatment from his father. His father’s reaction showed sheer disappointment in him and taught him a lifelong lesson of not stealing.
Later, while he was running Virgin Records, he learned that an Artists and Repertoire (A&R) employee was stealing from the store and selling them to other stores. He remembered his father’s lesson in second chances and privately confronted the employee, giving him a second chance. The employee never stole again. Instead, he used his talent to work hard and become an asset to the company.
Not everyone believes in second chances, forgiveness, and keeping a humane attitude, yet it is this humane attitude that separates the leaders from great leaders.
The Secret Of Listening
We all know that to be a good leader, one requires great oratory skills. However, Branson opines that it is keen listening skills that are far more worthy. Branson inculcated a habit, early on, of listening keenly to others and making a note of interesting remarks. As a teenager, he would use a small tape recorder to record interviews for his magazine, Student. However, the tape recorder rarely worked, and he got into the habit of taking notes.
Similarly, Branson recalls Sir Stelios Haji-Ioannou, the founder of UK’s EasyJet, attending one of his speeches in Greece. As a youngster, Haji-Ioannou was the only one in the audience who asked excellent questions, asked better follow-up questions, and also made a note of Branson’s answers. It was his passion for listening and making notes that gave him the edge to become as successful as he is today.
The Importance Of Having Fun
In the words of the famous Peter Drucker, “Culture eats strategy for breakfast.”
Richard Branson truly agrees and complies with this sentence. For Branson and his workmates at Virgin Records (before the brand became the behemoth it is), the work culture was all about having fun and enjoying the work they do with the people they enjoy with most.
Ask anyone in the corporate world what is the culture like in his or her company and you’ll probable get a blank stare. Many companies completely miss the point even. Inculcating a fun-loving culture in the company is often the difference between a mediocre company and a great one.
The Virgin way is to be serious about having fun! Late-night parties are the norm, as is working hard and beating the tough times. Similarly, Southwest Airlines CEO, Herb Kelleher has incorporated fun and humor into the culture of the company. Once, when a competitor almost sued the company for plagiarism (for using the tagline ‘Just Plane Smart’), Kelleher persuaded his competitor to settle the dispute by an arm-wrestling competition!
In another instance, the flight attendants of a particular Southwest flight hid in the overhead bins and jumped out at the baffled passengers with a ‘Surprize!’ While it may sound silly, it is a clear demonstration of a fun company with a great work culture. The outcome? Due to its fun-loving culture, Southwest Airlines is the only company to rake in profits for forty years straight!
Brave, Well Prepared, And Lucky!
Luck surely pays some part in our lives. Yet, without bravery and well preparedness, luck can easily escape doors of opportunity.
During the company’s earlier days, their first album release was Mike Oldfield’s Tubular bells. Branson was finding it difficult to sell the album to Ahmet Ertegun, the head of Atlantic Records in the US, in spite of the fact that it was a hit in the UK. Branson kept calling him on the phone to listen to the album. As luck would have it, the day Ertegun was listening to the album, after a day of persuasion from Branson, William Friedkin walked in. On hearing the music, he decided that the music that was playing would be the soundtrack of his upcoming movie The Exorcist. The rest is history!
The question we ask is, would Ertegun have heard the album had Branson not pestered him to hear it that day? Therefore while Friedkin’s presence at that very time was luck, it was Branson’s preparedness to keep pushing the album that gave it the successful opportunity.
But how do bravery and luck connect? The relation between the two is well explained by the experience Branson’s friend, Antonio, experienced as a student at Stanford University.
Antonio, while waiting in the cinema queue, randomly struck a conversation with a stranger. Antonio and the stranger, who also turned out to be a student, went out for a cup of coffee. During their conversation, the student told Antonio about a company he was going to start with another friend.
Antonio liked the idea and thought it had potential. So he took the risk of pledging $10,000 (which he had saved up for a new car) to his newfound friend. At the nascent stage of the company, the $10000 amounted to 1 share.
That student Antonio met was Sergey Brin, and the company launched, was Google. That 1 share, amounting to billions of dollars today, was the outcome of sheer luck that Antonio went for coffee. Yet without Antonio’s courage and brave risk-taking, mere luck wouldn’t have made him a billionaire!
Procrastination Can Have Positives
Decision-making isn’t an easy process. Moreover, for a top-level decision-maker like Branson, instinctively jumping feet-first into decision-making, rather than having a measured approach has seen both, successes (like the Virgin Atlantic and Virgin Blue aviation ventures) and failures (like his 1984 Virgin Cola and 1996 Virgin Brides bridal wear).
However, Branson, with four decades of experience under his belt, prefers to procrastinate on decision-making. Cautiousness in making decisions has indeed proved to be rewarding for the company. Branson’s caution actually saved him from the great financial crash of 2007.
Branson was approached by Goldman Sachs to invest in a lesser-known commodity. While his Virgin Money team jumped at the opportunity, Branson, having no knowledge or experience, urged the team to wait and gather more information. Eventually, despite the pressure from Goldman Sachs, he politely declined. The commodity in question was subprime mortgages – the cause of the global financial crash in 2007. Later on, in 2010, Goldman Sachs was fined for handling out incomplete information and for misleading potential investors. Branson had received this very misleading information that Goldman Sachs was fined for.
Conventional Wisdom And Innovation
Conventional wisdom is considered the safe route to take in business. However, it is a proven fact that conventional wisdom often thwarts innovation. Branson’s Virgin Megastore launch in Times Square, New York is a prime example. When he decided to launch the store in 1996, many warned him of the ‘scary’ Times Square neighborhood. Dismissing the naysayers and proving them wrong, Branson’s Megastore not only flourished and gave tremendous profits, but also triggered the redevelopment of the area, making it the Times Square it is today.
In another example, Branson Virgin Atlantic introduced the concept of clubhouse departure lounges, a luxury without which we cannot think of air travel today!
Despite critic warnings, Branson realized that passengers spend about 40% of their time at the airport. Wanting to make the Virgin experience more luxurious for his passengers, he decided to launch lounges, business centers, haircuts, and massage spas, and sit-down meals, all included in the price of the tickets.
Many warned Branson of the financial risks of the idea, but the idea proved them all wrong, making the idea a resounding success and even winning over the loyal customers of other airlines.
Branson believes that while it is important to give conventional wisdom a listening ear, one should never let it thwart innovation.
The Future Of The World
Being a high school dropout, Branson always believed and still does, that the schooling system in the country does not place enough emphasis on entrepreneurial skills. He believes in the future generation and their ability to lead the world of entrepreneurship. He is calling out to schools to change the out-dated schooling systems and inculcate more relevant career-oriented topics.
He believes that rather than focussing on calculus and algebra, youngsters should be exposed to careers in the real world by specialists in different fields. Educators should create the opportunity for students to be able to have open discussions with entrepreneurs, innovators, and those who have paved themselves a different path.