Business the richard branson way
Transcript of Business the richard branson way
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Copyright©DesDearlove1999,2002and2007
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Firsteditionpublished1999
Secondeditionpublished2002
Thirdeditionpublished2007
CapstonePublishingLtd.(aWileyCompany)
TheAtrium,SouthernGate,Chichester,PO198SQ,UK.
www.wileyeurope.com
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Email(forordersandcustomerserviceenquires):cs-books@wiley.co.ukTherightofDesDearlovetobeidentifiedastheauthorofthisbookhasbeenassertedinaccordancewiththeCopyright,DesignsandPatentsAct1988
AllRightsReserved.Nopartofthispublicationmaybereproduced,storedinaretrievalsystemor
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transmittedinanyformorbyanymeans,electronic,mechanical,photocopying,recording,scanningorotherwise,exceptunderthetermsoftheCopyright,DesignsandPatentsAct1988orunderthetermsofalicenceissuedbytheCopyrightLicensingAgencyLtd,90TottenhamCourtRoad,LondonW1T4LP,UK,withoutthepermissioninwritingofthePublisher.
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RequeststothePublishershouldbeaddressedtothePermissionsDepartment,JohnWiley&SonsLtd,TheAtrium,SouthernGate,Chichester,WestSussexPO198SQ,England,[email protected],orfaxedto(+44)1243770571.
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JohnWiley&SonsInc.,111RiverStreet,Hoboken,NJ07030,USAJossey-Bass,989MarketStreet,SanFrancisco,CA94103–1741,USAWiley-VCHVerlagGmbH,Boschstr.12,D-69469Weinheim,GermanyJohnWiley&SonsAustraliaLtd,42McDougallStreet,Milton,Queensland4064,AustraliaJohnWiley&Sons(Asia)PteLtd,2ClementiLoop#02–01,JinXingDistripark,
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Wileyalsopublishesitsbooksinavarietyofelectronicformats.Somecontentthatappearsinprintmaynotbeavailableinelectronicbooks.
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LibraryofCongressCataloging-in-PublicationDataDearlove,Des.
BusinesstheRichardBransonway:10secretsoftheworld’sgreatestbrandbuilder/DesDearlove.
--3rded.
p.cm.
Includesbibliographical
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referencesandindex.
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.
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Title.II.Title:RichardBranson.
HC252.5.B73D42007
338’.04092--dc22
[B]
2006100405
AnniversaryLogoDesign:RichardJ.Pacifico
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SetinITCNewBaskervillebySparks(www.sparks.co.uk)PrintedandboundinGreatBritainbyTJInternationalLtd,Padstow,CornwallThisbookisprintedonacid-freepaperresponsiblymanufacturedfromsustainableforestryinwhichatleasttwotreesareplantedforeachoneusedforpaperproduction.SubstantialdiscountsonbulkquantitiesofCapstoneBooksare
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availabletocorporations,professionalassociationsandotherorganizations.FordetailstelephoneJohnWiley&Sonson(+44)1243–770441,fax(+44)1243770571
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CONTENTS
Acknowledgmentsvii
RichardBransonRevisited…
ix
TheLifeandTimesofRichardBranson
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1
One:PickonSomeoneBiggerThanYou
21
PickingonthebigguysisalmostanarticleoffaithforVirgin,butitalsoplaysanimportantroleinBranson’ssuccess.
Two:DotheHippy,Hippy
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Shake
35
Withhisinformalstyleandnon-conformistattitude,RichardBransonhasbeencalleda“hippycapitalist.”
Three:Haggle:Everything’sNegotiable
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OneofRichardBranson’slesswell-knowntalentsisarazor-sharpnegotiatingtechnique.
Four:MakeWorkFun
65
Creatinganexcitingworkcultureisthebestwaytomotivateandretaingoodpeople;italsomeansyoudon’thavetopaythemas
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much.
Five:DoRightbyYourBrand
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Lookafteryourbrandanditwilllast.BransonbelievesthataslongastheVirginbrand’sintegrityisnotcompromised,thenitisinfinitelyelastic.
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viBUSINESS
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Six:SmilefortheCameras
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91
Mediaattentionisagreatwaytopromoteyourbusiness.EverytimeBranson’spictureappearsinanewspaperormagazine,itpromotestheVirginbrand.
Seven:Don’tLeadSheep,HerdCats
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Ratherthanexpectpeopletofollowblindlywhereheleads,Bransonreliesonhisabilitytogetthebestfromindividualsbycreatingachallengingenvironment.
Eight:MoveFasterThanaSpeedingBullet
123
Bransonmovesquicklywhenanopportunitypresents
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itself.Hehascreatedexceptionallyshortdecision-makingchains.
Nine:SizeDoesMatter
135
Thinkbigbutkeepitsimple.Businessstart-upsareaVirginspeciality.
Ten:NeverLosetheCommonTouch
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147
RichardBranson’sultimategiftisthecommontouch.Itistherealsecrettohisenduringsuccess–andpopularity.
HowtoBuildaBrandtheBransonWay
159
LastWord
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167
Index169
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ACKNOWLEDGMENTS
I’dliketothinkthisbook
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providesafairanalysisofwhyRichardBransonhasbeensosuccessfuloversomanyyears.
Intheend,though,whetheryouseehimasthebeardedcrusaderorsimplycapitalismwithahairyface,itisimpossibletoescapetheconclusionthatheisaremarkableindividual.ForthreedecadeshehasdazzledtheBritishbusinessscene
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withauniquemixtureofsubstanceandstyle.Attheveryleast,hehasbroughtcolorandfunintotheotherwisealltoogreylivesofcountlessbusinessjournalistsaroundtheworld.Richard,forthatyouhavemyheartfeltthanks.
Inresearchingthisbook,Ihaveplunderedaveritabletreasuretroveofarticles,aswellasseveralexcellent
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biographies.IwouldparticularlyliketothankMickBrownandTimJackson,whosebookswereaninspiration;AlanMitchellofAmropInternational;andacastofthousandswhohaveinterviewedandanalysedBransonovertheyears.
Iwouldalsoliketothank:SteveCoomberforhisresearchandinsights;MarkAllin,RichardBurtonand
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CatherineMeyrickatCapstonePublishingforprovidingmewiththeopportunitytowritethebook;andJohnMoseleyatWileyforallhishelp.Finally,I’dliketothankStuartCrainerforsuchasplendiddayoutontheriver,allthoseyearsago.
DesDearlove,November2006
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RICHARDBRANSON
REVISITED…
SincethisbookwaslastrevisedmuchhashappenedintheBransonbusinessempire.NoteverythinghasgoneBranson’sway.Whileoneofhismorerecentventures,VirginGalactic,hasBransonshootingforthestars,anumberof
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endeavourshaveprovedlessmeteoric.Yet,althoughBransonhassufferedhisshareofsetbacks,theyarecomparativelyfewforsomeonewhohasrunabillion-dollarbusinessforthirtyplusyears.ThefactthatmuchismadeofanydisappointmentsintheVirgincorporateportfolioonlyservestohighlightthecompany’sresoundingoverallsuccess.And,everthe
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optimist,Bransoncontinuestospinoffideas,backnewVirginbusinesses,andwhipupPRinthemediaforhisvariousventures.
Itwasn’tthatlongagothatsomecommentatorsweresuggest-ingBransonmayhavelosthisMidastouch.Prematurely,asitturnsout.In1999,theyearafterthefirsteditionofBusinessTheRichardBransonWaywas
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published,BransonfeaturedinForbesmagazine’slistoftheWorld’sRichestPeoplewithafortuneestimatedat$2.6billion.
By2000thatfigurehadrisento$3.3billion.Yetin2001,Branson’snetworthhaddeclinedtosome$1.8billion.Partoftheflast.inddix
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xBUSINESS
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reasonforthissharpreductioninvaluewasplainlyoutsideofBranson’sinfluence;aglobaleconomicslowdown.
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Anotherreason,however,wasthattheVirginbrandprovednottobeasinfinitelyelasticasmanycommentatorshadsuggested.
Although,insplendidstyle,BransondonnedarmyfatiguesandrodeintoTimesSquareinabattletanktolaunchVirginColaintheUS,aspartofanassaultonthecolamarket,thecolaventureeventuallyfellalittleflat.In
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February2000,VirginadmitteddefeatinitswaragainstCoca-ColaandPepsi-ColaintheUS.
Thenewversionofcolahadlostitsfizz,withoutmakingmuchofadentinthecolamarket,Virginchangedthestrategy,managementandlocationofitssoftdrinksbusiness,concentratinginsteadon“newage”drinks,includingfruitjuicesand
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energybeverages.
Bransonmayhavelookedfetchinginabridaloutfit(minusbeard)stirringupaPRfrenzyforthelaunchofVirginBridesin1996,asthecompanyopeneditsflagshipLondonstore.Notonlyweretheretheusualweddingdressesandaccessoriesbuttherewasalsoaweddingplanningservicethatextendedtoarrang-ingthe
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entireeventifrequired.AshopinManchesterfollowedin2001.Butthehoneymoonwassoonover.TheLondonstoreclosedin2003,andtheremainingManchesterstorefocusedonareducedserviceconcentratingonclothesandaccessoriesratherthantheplanning.
PerhapsthebiggestchallengeforBransoninrecentyearshasbeenVirginTrains.
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VirginTrains’serviceshitthebuffersearlyon,andthecompanyhasstruggledtogetbackontrackeversince.AttimestheVirginTrainsrailwayfranchiseshaveplumbednewdepthsoftrainservicemisery;quiteanachievementintheUKwheretrainsarefamouslyinefficient.
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RICHARDBRANSONREVISITED
xi
It’stemptingtofeelsorryforBranson.Therailfranchisesgrewtobesomethingofa
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poisonedchalice.AtonepointitseemedthatnomatterwhatBransonsaidordidthebadpublicityfromVirgin’stardyrailwayoperationsjustkeptoncoming.
In1999,VirginTrainshadtheworstrecordforpunctualityinthecountry,accordingtofiguresfromtheshadowstrategicrailauthority.InFebruary2001,
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anattempttoincreasethenumberofrailtravellersonVirginTrainsthroughahalf-pricerailfarebonanzaranintoproblemsduetounderestimateddemand.
Bransonpromised,“tocapturetheimaginationofpassengerswhohavesufferedtrafficjams.”Unfortunately,therealitywaspeoplejams–withhugequeuesandlongwaitsfortickets,whether
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buyingticketsoverthephoneorinperson.Theensu-ingchaosandadversepublicitytooktheedgeoffofagenuineandgenerousoffer.
TheVirginTrainssagahasundoubtedlybeendifficultforVirgin.
AttimesVirginTrainsappearedtobetheantithesisofeverythingRichardBransonstandsfor.Knowing
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thatmaintainingpublictrustandconfidenceintheVirginnameunderpinsthesuccessofthewholeVirginGroup,Bransonhasalwaysgonetogreatlengthstoprotecthisbrandimage.ThepoorperformanceofVirginTrainshasthreatenedtounderminethattrust.Inhisdefense,VirginTrainsinherited30-year-oldrollingstock,runningonarailwaythathadbeenunderfundedforyears.
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WhenBransontookupthechallengeofrunningtherailfranchisesheacknowledgedthatitwouldtakefiveyearstoturnthelinesoper-atedfromtheworstinthecountrytothebest.Hewasright.
Thegoodnewsisthatthepunctualityfiguresin2005and2006
wereamarkedimprovementonthosein2002when,
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accordingtoStrategicRailAuthorityfigures,only73.6percentofWestflast.inddxi
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Coasttrainsand62.5percentofcross-countrytrainsarrivedwithintenminutesofthescheduledarrivaltime.DeliveryofthePendolinotiltingtrains,travelingatspeedsofupto140milesperhour,aswellasreplacementofoldrollingstock,hasmadeabigdifference.ByApril2006thepunctualityfigureswere92percentforWestCoastPendolinotrainsand93percentforcross-country
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Voyagerservices.
ElsewhereintheVirginempire,however,ithasbeenbusinessasusual.NewVirginventurescontinuetobeaddedtotheec-lecticcollectionofcompaniesgatheredundertheVirginbrandumbrellaatbreakneckspeed.TheseincludeVirginCars,VirginWines,VirginStudent,VirginEnergy,VirginBikes,andVirgin
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Digital.
AtthesametimeasaddingtotheVirginportfolio,anumberofexistingVirgincompanieshavebeenexpandingrapidly.VirginActivebecamethefourthlargesthealthandfitnessgroupintheworld,raising£100millionforitsexpansionplansintheUK
andabroad.InSeptember
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2006itboughtHolmesPlace,itsbiggestUKrival.InManchester,VirginCarsdroveatruckthroughtheusualcarsalesbusinessmodelopeningthefirstevervehicledepartmentstore.
Theventurethathasattractedthemostcolumninchesinthelastfewyears,however,hastobeVirginGalactic.Foreveryonewhodreamtofbeinganastronautwhenthey
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wereyounger,forbuddingspacetravellerseverywhere,Bransonisabouttolaunchtheworld’sfirstpassengerserviceintosuborbitalspace.For$200,000orso,passengerswillbeabletosoarabovetheEarthandenjoythedelightsofweightlessness,albeitbriefly.
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And,forthosewholackthenecessaryfunds,butstillhankerafterajourneyinto
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space,thereisalwaysthefrequentflyermilesoption.Youwillneedquiteafewthough;twomillionorso,possibly.That’showmanyAlanWattsintheUKrackedupwithVirginwhenhewasofferedaone-offopportunitytoupgradetoaspaceflightin2009.Heaccepted.
WithVirginGalactictheskyisnotthelimit.Bransonhasnointentionofstickingwith
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abrieftripinsuborbitalspace.Theplanistoextendtheservicebothtopoint-to-pointsuborbitalroutesaroundtheplanet,aswellasorbitaltrips,andeventuallythemoon.
Aswellasvariouscompanies,Bransonalsoacquiredamoreunusualassetin2003whenheboughtMakepeaceIslandinQueensland,Australia.Most
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companieshaveacompanycan-teen,theoddcorporatedayout,butBransonnowhasanislandresortfortheVirginstaff.
Bransonhasbeenraisingmoneyrecently,sellingVirgin’sstakeinseveralventures.The51percentholdinginVirgin.netwassoldtocablebusinessNTL.ThesamecompanyalsoboughtVirginMobilein
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2006,withBransontakingasignificanttakeinNTLatthesametime.InAustraliatherewasthesuccessfulIPO
ofVirginBlue.
Nodoubtthemoneywillbeusefulforfundingoneofhislatest,toughestandpossiblymostimportantchallengesyet.Latein2006,Bransonopenlyjoinedtheclimatechangedebate.Notknown
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fordoingthingsbyhalves,Bransondemonstratedhiscommitmenttotacklingtheplanet’sproblembypledgingthreebilliondollarstofightglobalwarming,withprofitsfromVir-flast.inddxiii
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xivBUSINESS
THERICHARDBRANSONWAY
gin’stravelfirmsoveraten-yearperiodinvestedindevelopingbiofuels.
Bylate2006Bransonhadalreadymadesomesubstantialinvestmentsinthebiofuelbusiness.Theseincludeda$50millionplus
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investmentinaCalifornianethanolplant,aswellasexpressinganinterestinEthanolGrainProcessors,anAmericanbiofuelcompany.
Attackingtheproblemofclimatechangeandfindingalternativeenergysourceswiththesamekindofenergyandenthusiasmhedevotestohisbusinessempire,Bransonwrotetohisfellowtransportindustryexecutives,to
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airlines,andenginemanufac-turerstoroundupsupportforacross-industryforumfocusingoninnovativesolutionstotheworld’soverheatingproblems.Inhisletterheurgedgreaterspeedinaddressingthespecificissuesrelatingtotheairlineindustry’simpactoncarbondioxideemissions.
Characteristicallyoptimistic,Bransonsuggestedthata
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collectiveindustryeffortcouldreducethecarbondioxideemissionsfortheaviationindustry–responsiblefortwopercentofglobalCO2emissions–byuptoaquarter.Hewasn’tshortofideasonhowthiscouldbeachievedeither.Onesuggestionwasanewstartinggridsystemforplanetake-offsandlandings.Insteadof“sittingonplaneswithCOspewingoutofthoseplanes
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for2
anythingupto60–90minutes…,”asBransonexplainedtheexistingpositiontolistenersofBBCRadio4’sTodayprogramme,airplanescouldturnenginesoffuntilshortlybefore,andshortlyafterlanding,beingtowedintoplace“byasmalltug.”
Thisnewsystemwould,Bransonsuggested,reduce
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groundcarbonemissionsbysome50percentatHeathrowandupto90
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RICHARDBRANSONREVISITED
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xv
percentatJohnFKennedyairportinNewYork.Plusthosepeoplelivingnearbywouldenjoysubstantiallycleanerair,aswellaslowernoiselevels.Whenitcomestotheissueofcompaniesreducinggreenhousegasemissionssomeoneneedstotakealead;maybethatpersonisBranson.
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Itisnotthefirsttimehehasgotinvolvedinissuesthattouchonthepublicgood.ForsometimeBransonwasintentonrunningtheUK’sNationalLottery.Losingoutonthe1996franchise,hewasbackinlineforthefranchisewhenitcameupagainin2001.
Bransonpromisedtocreate“amillionaireaday”byintroducingnewimproved
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gamesandincreasingparticipation.Crucially,thePeople’sLotterywould,heclaimed,returnmorefundstocharitythantheincumbentoperatorCamelot.Unfortunately,afterabiddingfiasco,duringwhichbidswerewithdrawn,legalbattlesfought,andbidsresubmitted,afuriousBransonlostoutoncemore,vowingintheprocessnevertobidagain.
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BransoncontinuestoridetherollercoasterthatisVirgin.OneofBranson’senduringstrengthsishisabilitytoabsorbpunches,totaketheroughwiththesmooth.Hehasbouncebackability
–lotsofit.
“WheneverIexperienceanykindofsetbacks,”Bransonobserves,
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“Ialwayspickmyselfupandtryagain.IpreparemyselftohaveanotherstabatthingswiththeknowledgeI’vegainedfromthepreviousfailure.Mymotheralwaystaughtmenevertolookbackinregret,buttomoveontothenextthing.Theamountoftimethatpeoplewasteonfailures,ratherthanputtingthatenergyintoanotherproject,alwaysamazesme.Asetbackisneverabad
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experience,justalearningcurve.”
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xviBUSINESS
THERICHARDBRANSON
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WAY
Onemorethingdeservesamention:onMarch30th,2000,plainRichardBransonbecameSirRichardBranson.KnightedintheNewYear’sHonoursListforservicestoentrepreneurship,thehabituallycasuallyattiredBransondonnedamorningsuitforthefirsttimeeverathisinvestitureceremonyatBuckinghamPalace.While
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respectabilitybeckoned,sofarhehasstoutlyresistedthetemptationtojointheestablishment.Withtypicalélan,party-lovingBransoncelebratedhisknighthoodbyholdingareceptionforthe250othersreceivinghonoursonthesameday.
Whenaskedhowitfelttobe“SirRichard,”Bransonanswered:
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“Itfeelsgreat.ItfeelsoddsleepingwithaLadythough.”
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THELIFEAND
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TIMESOF
RICHARDBRANSON
Inthemodernworldofbusiness,RichardBransonisananomaly.Inaneradominatedbystrategists,heisanopportunist.ThroughhiscompanytheVirginGroup,hehascreatedauniquebusinessphenomenon.Neverbeforehasasinglebrandbeenso
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successfullydeployedacrosssuchadiverserangeofgoodsandservices.ThedistinctiveredandwhiteVirginlogo,itseems,isaselasticasMatescondoms–justoneofthemanyproductsVirginhaspromoted.1
THEBRANSONPHENOMENON
InthefilmFourWeddingsandaFuneral,acharacter
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jokesthathisfriendmustbetherichestmaninBritain,butthefriendsays:
“Ofcoursenot.There’sthequeen.AndthatBransonblokeisdoingterriblywell.”
Britain’sbestknownentrepreneur,Bransonhasbeendoing
“terriblywell”formorethanthreedecadesnow.Hestarted
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hisfirstbusinessattheageof16,andwasamillionaireat24.Nowinhis50s,BransonisaregularentryinForbesmagazine’slistoftherichestmenintheworld.
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2BUSINESS
THERICHARDBRANSONWAY
Hispersonalwealthhasbeenestimatedatover$3billion,butit’shardtogetanaccuratetally,sincehiscompaniesareprivate,constantlydividingandmultiplying,andarecontrolledviaaseriesoftax-efficientoffshoretrusts–all
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perfectlylegalandaboveboard,buthardtountangle.
Today,Bransonisthedrivingforceatthecentreofawebofmorethan200companies,employingmorethan30,000peoplearoundtheworld.Hiscommercialinterestsspantravel,hotels,consumergoods,computergames,musicandairlines.YoucanevenbuyaVirginpensionorinvestmentplan.
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ButfinancialservicesisafarcryfromtheadolescentrecordlabelthathelpedputPunkonthemapinthe1980s,withacontroversiallynamedalbumbytheSexPistols.Everythingabouttherecordsuggestedrebellion–includingthePistol’srenditionof
“GodSavetheQueen”;butthealbumwasasteppingstoneforBranson.
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Bythen,VirginhadalreadywontherespectofthehippygenerationwithTubularBells,fromayoungunknownartistcalledMikeOldfield.NeverMindtheBollockswastheperfectproducttoestablishtheVirginbrandwithanewgenerationofspiky-hairedteenagers.Bransonhadcreatedanewfusionofrebellionandbusiness–anddiscoveredauniquenewbrand
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proposition.Hehasbeenrepeatingtheformulaeversince.
YetBransonismorethanjustabusinessman,heisapopularpublicfigure–admiredbyparentsandyoungpeoplealike.Oneofagenerationofbusinessleaderswhogrewupinthe1960s,hehasbeendescribedasa“hippycapitalist.”Tothis,hehasaddeda
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reputationasanadventurer–settinganewworldrecordforcintro.indd2
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THELIFEANDTIMESOFRICHARDBRANSON
3
crossingtheAtlantic,andalmostlosinghislifetryingtocircumnavigatetheglobeinahotairballoon.
Hisderring-dooutsideofbusinesslifeismatchedbytheboldnessofhisescapadesinit.Hehasrepeatedlyused
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theVirginbrandtotakeonaggressivemarketleadersandshakeupcomplacentmarkets–firstthebigrecordcompanies,thentheairlinesandmorerecentlysoftdrinksandfinancialservices.Thesecommercialadventureshavealmostbankruptedthecompanyonseveraloccasions.TheyhaveearnedhimaspecialplaceintheaffectionsoffirsttheBritishpublicandnowtheworld.
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ButhispopularimagebeliesanothersidetoBranson.2Despitehiswealth,heremainsunrelentinginhiscommercialambitions.
Attimes,heseemstolaunchnewventuresonanalmostdailybasis.“Aruthlesslyambitiousworkaholic,”ishowonebiographerdescribedhim.
BransonclaimsthatVirgin
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wasstartedfromapublicphoneboothwithlesscapitalthanmostpeoplewouldhappily“blow”onagoodnightoutatarestaurant.Anecdoteandmythsurroundshim.Yet
“Aruthlessly
Bransonthebusinessmanandmaster
ambitious
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brand-builderremainsshroudedina
workaholic.”
publicrelationssmokescreen.
THEUNIVERSALBRAND
Branson’sgreatestcommercialachievement,todate,istocreatewhatisarguablytheworld’sfirst
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universalbrand.Otherfamousnameshavebecomesynonymouswiththeproducttheyadorn:cintro.indd3
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4BUSINESS
THERICHARDBRANSONWAY
Hoovervacuumcleaners,Coca-Cola,andLeviStrausstonamejustafew.ButonlyVirgintranscendsproducts.
Yetdespiteitsremarkablesuccess,Bransonwouldhaveusbelievethatnoneofitwasplanned.Hegivesthe
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impressionthattheVirginphenomenonisoneofthoseoddthingsthathappentopeoplesometimes.ThisispartoftheBransonmystique.Hemakesitlookandsoundsosimple.
“Whenwecameupwiththename‘Virgin’insteadof‘SlippedDisc’Recordsforourrecordcompanyinthewinterof1969,Ihadsomevagueideaofthenamebeing
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catchyandapplyingtolotsofotherproductsforyoungpeople.”3
“ItwouldhavebeeninterestingtohavetrackedthesuccessoftheVirgincompaniesorotherwiseifwehadcalledthecompanySlippedDiscRecords.SlippedDisc
“Itwouldhave
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Condomsmightnothaveworkedas
well.”
beeninteresting
tohavetracked
Thequipistypicalofamanwho
thesuccessofthe
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haslivedhiswholelifelikesomebig
Virgincompanies
adventure.Anoutspokencriticof
orotherwiseif
businessschoolsandmanagement
theory,Bransonlikesto
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portrayhim-
wehadcalledthe
selfastheordinarymanonthestreet
companySlipped
(despitehiscomfortablemiddleclass
DiscRecords.
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origins).Heisthesmallguywhoout-
SlippedDisc
smartsthebigguys.Hisaccountof
Condomsmight
howthefamousVirginlogocameto
beistypicaloftheway
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thingsseemto
nothaveworkedas
happenatVirgin.
well.”
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THELIFEANDTIMESOFRICHARDBRANSON
5
“WhenVirginRecordsbecamesuccessfulwefollowedourinstincts…,”Bransonexplains.“Initiallythemusicreflectedthe
‘hippy’eraandourlogoofanakedladybacktobackrefl
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ectedthattoo.ThenwhenPunkcamealongwefeltweneededacrisp-erimage…Ratherthanspendingafortunecomingupwiththenewimage,Iwastalkingtoourgraphicdesigneronedayexplainingwhatwewantedandhethrewonthefloorhisdoodling
–thenowfamousVirginsignature–whichIfortunatelypickeduponthe
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waytotheloo.”
Itsoundssocasual,butthewordsmaskanextraordinaryentrepreneurialmind,onethathasreinventedbusinesstofitthetimeshelivesin.
CORPORATEROCKSTAR
ButBransonismorethanjustasuccessfulbusinessman.Heisoneofanewbreedof
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entrepreneurswhosecelebritystatusandirreverentapproachmeanstheyhavemoreincommonwithrockstarsthanthe“suits”whopopulatethebusinessworld.
AlongwithAnitaRoddick,Ben&Jerryoficecreamfame,BillGatesandTedTurner,Bransonhasbecomeaculturalicon.Partofanewgenerationofbusiness
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leaders,hisalternativebusinessphilosophyisavitalpartoftheVirginbrandappeal.
Bransondeliberatelytargetsmarketswherethecustomerhasbeenconsistentlyripped-offorunder-served,andthecompetitioniscomplacent.HedelightsincastingVirginasthecheekyunderdog,fasteronitsfeetandnippingattheheelsofbigbusiness.
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6BUSINESS
THERICHARDBRANSONWAY
thanRichardBranson.Itisamarketingstrategythat
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appealstomillions.
Whereveritappears,theVirginlogoattractsitsownanti-establishmentconsumers.Bransonhimself–withhislonghair,toothygrinandoutrageousbehavior
–isasfamousasthecompany.Ifany-
Nooneplaysthe
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thing,heisbetterknownthanmany
DavidtotheGoliath
oftherockstarshehelpedcreate.(In
of“BigBusiness”
businessschool-speak,Bransonper-
betterthanRichard
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sonallyaccountsforamajorchunkof
Branson.
thecompany’sintellectualcapital.)
Lovehimorhatehim,Bransonis
oneofthemostsuccessfulbusinessmenontheplanet.Buthisinfluenceand
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popularityextendfarbeyondthebusinessworld.
Amongbusinesstycoons,hestandsoutasanadventureraswellasasuccessfulentrepreneur.Branson’sforaysintotherecordbooksincludethefastestcrossingoftheAtlanticbyseainVirginAtlanticChallenger;andseveralattemptstocircumnavigatetheglobeinahot-airballoon.
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Alongtheway,too,BransonhasmanagedtoendearhimselftotheBritishpublicinawaythatnootherentrepreneureverhas.HefoughttomaketheNationalLotteryanon-profitmakingventurewiththeproceedsgoingtoworthycauses;heheadedupagovernmentenvironmentalcampaign;andlaunchedMatescondomstoraiseawarenessaboutAIDS.Hisfaceappearsonthefront
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pagesofthenationalpressandtelevisionalmostasoftenastheRoyalFamily.
Yet,despitebeingabillionairewithhisownCaribbeanIslandtoretreatto,Bransonhassomehowretainedthecommontouch.
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THELIFEANDTIMESOFRICHARDBRANSON
7
Unlikeothercelebritiesinthepubliceyehehasalsomanagedtoprotecthisprivacy.WeonlyseeBransonwhenhewantsusto.
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Heisalmostasadeptatavoidingbadpublicityasheisatcreatingpositivecoverage.
Hehasalsomanagedtokeepaveilaroundtheinnerworkingsofhisfinancialempire.In1986hefloatedhisVirginbusinessontheLondonStockExchange,onlytobuyitbackbecausehedidn’tliketheconstraintsamarketlistingbroughtwith
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it.(The1987StockMarketcrashwiped£millionsoffthevalueofthecompanyovernight,confirminghisdistrustofthesuitsfromtheinvestmentcommunitiesofWallStreetandtheCityofLondon,andgoadinghimintotakingbackcontrol.)
TakingthecompanybackintoprivateownershiphasallowedBransontoshielditsinnermostworkingsfromthe
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publicgaze.
Ithasenabledhimtocreateabusinessempirethatisverydifferenttothenorm.Insteadofthetraditionalmodelofahandfulofoperatingcompaniesreportingtoaholdingcompany,Virginisanatomizedempire–amyriadofbusinesseslooselyboundtogetherbytheVirginbrand,manyofthemjointventureswithoutside
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investors:anetworkthatseemstohavelittleincommonexceptthename.OnlyRichardBransonandahandfulofhisseniorexecutiveshaveanoverallview.Mostofthemarevirtuallyunknowntothepublic.Thegroup’schairmanandfounder,however,isanintegralpartoftheVirginbrand.
Here,too,thereisparadox.
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ThepublicBransonisinstantlyrecognizabletomillionsofpeople.Hisistheaffableandcaringfaceofbusiness.Themanwhohasmadeacareeroutoftakingonbigbusinessandwinning;themanwhoprefersbrightlycoloredsweaterstotheconventionalcorporatesuitandtie.ButtheprivateBransonismuchlesswellknown.
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8BUSINESS
THERICHARDBRANSONWAY
Indeed,ithasbeensuggested
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thattherearetwoRichardBransons:thepeople’schampionknowntomillionsandthedealmakerknownonlytohisbusinesspartners.
AccordingtoTimJackson,authorofVirginKingtheunofficialBransonbiography,Branson’smottoshouldbearsestcelareartem
–theartliesinconcealing
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theart.ThisistheessenceoftheBransonmanagementstyle,andthecornerstoneoftheVirginempire.
THEEARLYYEARS
RichardCharlesNicholasBransonwasbornon18July1950.BythetimebabyRichardarrived,hisfatherEdwardBransonandmotherEveBransonhadsettledinthesleepyvillageofShamley
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GreenintheSurreystockbrokerbelt.WithTedBransononlyrecentlyqualifiedasabarrister,moneywastightandthefamilyrentedaramblingandsomewhatramshacklehousefor12shil-lingsaweek.
Hisformaleducationwasconventional,andstartedatScaitcliffePreparatorySchool.TheyoungBransonwasnotacademicallyminded
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andonlyscrapedintopublicschoolatStoweafteraspellatacrammer.
Althoughhelikedsport,thefinerpointsofaclassicalBritisheducationwerewastedonhim,buttheexperiencewasinvaluableforhisfuturecareer.Traditionalineverysenseoftheword,theschoolprovidedtheperfecteducationforthewell-spokenyoungmanwho
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wouldgoontobuildabusinessempirethattradedonbuckingthesystem.
InthoseearlyyearsglimpsesoftheBransonpsychologyarealreadyevident.
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THELIFEANDTIMESOFRICHARDBRANSON
9
Asonecommentatorobserved:“Thefresh-facedyoungladhadonlyscrapedintohisminorpublicschoolafterspecialtutoringfortheentryexam.Subsequentlyhehadfailedhiselementary
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mathematicsthreetimes.Yetstillhewasinnodoubtthathecoulddoabetterjobofrunningtheschoolthanthepowersthatbe.Sohepennedtheheadmasteramemo,outlininghissuggestions.Amongthem:allowsixthformerstodrinktwopintsofbeeraday.”
ButBransonnevermadeitintothesixthform.Hedroppedoutofschoolat16,
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hisheadtoofullofbigideasandbusinessschemestotakeinanythingelse.Atthetime,hisheadmasterobservedthatBransonwouldendupeitheramillionaireorbehindbars.Therest,astheysay,ishistory(althoughintheeventitwasaclosecallbetweenthetwo).
Aquarterofacenturylater,Bransonisknowntheworldover.
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Theexuberantbusinessbuccaneerwhoflewinthefaceofreceivedwisdomintheairlineindustryandturnedupthevolumeonthebigrecordlabels,whoshookupthecolagiants,andgavetheUKfinancialservicesfirmsagoodrunfortheirmoney;theadventurerwhobrokethetrans-Atlanticspeedrecord;thedaredevilhotairballoonist.AboveallheisknownastheDavidwho
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tookonGoliathintheshapeofBritishAirways,dirtytricksandall–andwon.Butitcouldhavebeenverydifferent.
TYCOON-IN-WAITING
Branson’sfirstbusinessventuresbeganatschool.WithNickPowell,hischildhoodfriendandlong-timebusinesspartner,theyoungBransoncuthis
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businessteethfirstbreedingbudgerigars,andthengrowingChristmastrees.Bothfailed.
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10BUSINESS
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THERICHARDBRANSONWAY
Hisfirstproperbusiness–amagazinecalledStudent,waslaunchedwhenhewasjust16yearsold–andwasnotaresoundingsuccesseither.Then,somethinghappened(andhaskeptonhappeningeversince).Withlittleornoknowledgeofpopmusic,Bransonstumbledontotheideaofamailorderrecord
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company.Shortofadvertisements,hepublishedhisownadinthemagazine.
Theyearwas1969,andLondonwasripeformailordermusic.
Thefirsttheyoungentrepreneurknewofitwaswhenchecksstartedarrivingthroughtheletterbox.Thebusinesstookoff.
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RichardBransonwasairborne.
Serendipity,too,playeditspartinhismovefrommailordertorecordstores;apostalstrikecrippledthemailorderbusiness,forcinghimtoseeknewoutlets.HeopenedhisfirststoreinOxfordStreetin1971.
AnearlyskirmishwithHMCustoms&Excisetaught
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Bransonthesenseofstayingontherightsideofthelaw–andthevalueofgoodlegalandfinancialadvisers,somethingwhichhasstoodhimingoodsteadeversince.Theyoungentrepreneurhaddiscoveredaloopholeinthetaxsystem.Recordsthatwereforexportdidnotincurtax.Butthecustomsofficialsdidn’tcheckwhichalbumswerebeingshipped.Itwasjusttootemptingto
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sendworthlessoldstocktoEuropeandsellthenewstockintheUKwithoutpayinganytaxonthem.Whenthescamwasuncovered,Bransonwasarrestedandthreatenedwithprosecution–athreatonlywithdrawnwhenheagreedtopaybackthemoneyheowed.
FromhisVirginrecordshopsBransonmovedintorecordproduction,launchingahighlysuccessfulrecord
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label.OneofthefirstartistsitsignedwasMikeOldfield,whosealbumTubularBellsstayedintheUKchartsforthenexttenyears.TheproceedsfromTubularBellsbankrolledtheVirginempire.
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THELIFEANDTIMESOFRICHARDBRANSON
11
Inthe1980s,theVirginlabelbecamesynonymouswithastringofradicalyoungmusicians.IthelpedputPunkonthemapwithayoungbandcalledtheSexPistols.In1982,Virgindiscovered
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BoyGeorgeandCultureClub.ThecashgeneratedbytheVirginrecordlabelmeantthatBransoncouldbeginbuildinghisempireinearnest.
By1984Virginwasliterallyairborne.Bransonhadmigratedfrompopmusictotransatlanticflight,launchingVirginAtlanticAirways.Ayearlater,Virginminustheairline,which
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Bransonretained,wasfloatedontheLondonStockMarket.Butthecrashof1987andhisgeneralmisgivingsaboutthefinancialcommunityconvincedBransontotaketheextraordinarystepoftakingthecompanybackintoprivateownership.
Therest,astheysay,ishistory.Today,theVirginempirespansairtravel,
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holidays,clothing,recordstores,softdrinks,radio…
thelistgoesonandon.ButhowdidRichardBransonshrugoffsomeofthefiercestcompetitorsinBritainandAmericatocreatethemostpowerfulbrandintheworld?Andwhatarethelessonsfortheentrepreneursoftomorrow?
BUSINESSSTRATEGY
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BransonhasprobablyneverheardofMichaelPorter’sfiveforces
–eventhoughtheHarvardBusinessSchoolprofessorhasbeenessentialreadingforbusinessschoolgraduatesformorethan20years.Ifhehad,hewouldknowthattheairlinebusiness,thecolamarketandtheUKfinancialservicesmarkets–tonamejustsomeoftheareaswhere
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hehassuccessfullysetupVirgincompanies–aretextbookexamplesofextremecompetitivenessorhighbarrierstoentry,andbestavoided.(Askedhowonecintro.indd11
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12BUSINESS
THERICHARDBRANSONWAY
becomesamillionaire,Bransonrepliesthatyoustartoffasabillionaireandthenopenanairline.)Thatmighthavedeprivedusofoneofthemostcolorfulanddynamicbusinessempirestheworldhaseverseen.
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Ontheotherhand,Branson’sreactiontobeingtoldsomethingisimpossibleisusuallytoregarditasachallenge.Porter’sanalysiswouldprobablyhaveinspiredhim.ItispreciselybecauseBransondoesn’treadthebusinesstextbooksthatheissosuccessful.
(Manyofthetechniquesheintroducedinthe1960sarenowbeingheldupas
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panaceasformanagementinthe21stCentury.)CORECOMPETENCIES
Inanuncharacteristicreferencetobusinessschooltheory,theideasofGaryHamelandC.K.Prahaladinparticular,inrecentyearsBransonhasdistilledVirgin’sfourcorecompetencies.
Theseare:
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◆Theabilitytoidentifyappropriategrowthopportunities
◆Theabilitytomovequickly
◆Thewillingnesstogiveday-to-daymanagementcontroltorelativelysmalloperatingteams.“Wetrytokeepourcompaniessmall,”hesays.(Eventhoughtheairlinenowhas6000
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staff,Bransonlikestothinkithas“retainedasmallcompanyenvironmentandinformality.”)
◆Theabilitytocreateandmanageeffectivejointventures.
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THELIFEANDTIMESOFRICHARDBRANSON
13
OthershavesuggestedBranson’s
Askedhow
ownrealcorecompetenceistheabil-
itytomotivatepeopleand
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pushthem
onebecomesa
tothelimit.Stillothers,pointtohis
millionaire,Branson
relentlessandsometimesruthlessne-
repliesthatyou
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gotiatingskills.
startoffasa
billionaireandthen
Carefuldissection,however,reveals
thatthetruthismoresubtle.The
openanairline.
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Bransonphenomenoncanbere-
ducedtoanumberoflessonsthat
cansharpenthebusinessacumenofanymanagerorentrepreneur.Butthatdoesn’tmeanthattheformulacanbeduplicated.
Whattheanalysisshowsisthatittakesaveryspecial
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individualtorunabusinesstheBransonway.Thequestionis,doyouhavewhatittakestobeaRichardBranson?
BRANSON’SWORLD
AbriefhistoryofVirgin:
1950RichardCharlesNicholasBransonborn,firstchildofEdwardBranson,barrister,andEveBranson,
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formerdancerandairstewardess.
1964AdmittedtoStoweSchool,Buckinghamshire.
1966BransonfoundsStudentmagazinewithaschoolfriend.
1967BransonleavesschoolafterOlevelsandmovestoLondontoconcentrateonmagazine.
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1968January26,firstissueofStudentMagazine,RichardBranson’sfirstbusinessventureisproduced.Bransonfoundsnon-profitStudentAdvisoryCentre.
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14BUSINESS
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THERICHARDBRANSONWAY
1969BransontakesoutHighCourtwrittoforcetheBeatlestoproviderecordingforStudent’sfrontcover.FirstadvertisementformailorderrecordbusinessappearsinlastissueofStudent.
1970StartofVirginmail-orderoperation.Bransonfined£7forusingwords
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“venerealdisease”inpublicitymaterialforStudentAdvisoryCentre.
1971Postalstrike.FirstVirginrecordstoreopensinLondon’sOxfordStreet.SimonDraper,Branson’sSouthAfricancousin,joinsVirgin.RaidedbyHMCustoms&Excise,theUKtaxauthorities;Bransonarrestedforpurchasetaxfraud.Agreestopay£53,000
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intaxanddutiesovernextthreeyears.Prosecutionisdropped.
1972FirstVirginrecordingstudioopensat“TheManor”nearOxford,England.MikeOldfieldstartsrecordingTubularBells.BransonmarriesfirstwifeKristenTomassi.
1973VirginRecordlabelislaunchedwithTubularBells
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becomingoneofthebiggestsellingrecordsofthedecade.
MusicpublishingbusinessestablishedintheUK.
1975BransonunsuccessfullytriestosigntheRollingStonesand10CC.
1976SexPistolscausefurorewhentheyswearonearlyeveningTV.TVpresenterBillGrundyisfired.
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1977VirginsignstheSexPistolsafterbothEMIandA&Mhavedecidedtheyaretoocontroversial.
1978TheVenue,Virgin’sfirstnightclub,opens…HumanLeaguesignedtoVirginrecordlabel.
1980VirginRecordsmovesintooverseasmarkets,initiallythroughlicensingdealsbutlaterthroughits
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ownsubsidiariesinFranceandthenelsewhere.
1981PhilCollinssignstoVirgin.
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THELIFEANDTIMESOFRICHARDBRANSON
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15
1982VirgintalentscoutdiscoversBoyGeorge.CultureClubsignstoVirginforworldwiderights.
1983VirginVision(forerunnerofVirginCommunications)isformedtodistributefilmsandvideos.VansonDevelopments,Virgin’spropertycompanyisformed.
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VirginGames(computergamessoftwarepublisher)islaunched
…VirginGroup’scombinedpre-taxprofitrisesto£2milliononturnoverofjustunder£50million.
1984VirginAtlanticAirwaysandVirginCargoarelaunched.
Acquisitionofinterestin
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luxuryhotelinDeya,Mallorca,forerunnertohoteloperationsinUKandCaribbean.DonCruickshankhiredasVirgin’snewgroupmanagingdirector;TrevorAbbottbroughtinasfinancedirector.VirginVisionlaunches“TheMusicChannel,”a24-hoursatellite-deliveredmusicstationandproducestheaward-winningfilm1984.
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1985£25millionplacingof7%ConvertibleStockiscompletedwith25EnglishandScottishinstitutions,intherunuptofloatingthecompany.BransontransfersbulkofVirginshareholdingtooffshoretrusts
VirginwinsaBusinessEnterpriseAwardforcompanyoftheyear.VirginHolidaysisformed.Bransonjoinsunsuccessful
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ChallengerattemptonAtlanticcrossingrecord.
1986VirginGroup,comprisingthemusic,retailandproperty,and-communicationsdivisions,isfloatedontheLondonStockExchange.(Airline,clubs,holidaysandaviationservicesremainpartofprivatelyownedcompanycalledVoyagerGroup.)BransonbreaksAtlanticsea
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speedrecordinChallengerII,winninghuge-publicity.
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16BUSINESS
THERICHARDBRANSON
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WAY
1987VirginRecordsAmericaislaunched,quicklyfollowedbysubsidiaryinJapan.BSB.Virginsetsup525postproductionfacilityinLosAngelestoworkonhighqualitycommercialsandpopvideos.Stockmarketcrashes,Virginsharepricefallsbacktobelow90p.Bransonforcedtoabandonattemptathostiletakeoverof
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EMI.Matescondomslaunched,withproceedstogotoHealthcareFoundation.Virgindirectorsvetouseofcompanynameoncondomventure.VirginshareslistedonNASDAQexchangeinUS.
1988RichardBransonannouncesmanagementbuy-outofVirginGroup,followingthestockmarketcrashinOctober.
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BransonandotherVirgindirectorsbuycompanyfromothershareholderswithloanof£182.5million.
1989VirginAtlanticAirwaysannouncesdoubledpre-taxprofitsat£10million.CruickshankresignsasGroupMD,Abbotttakesover.BransonmarriesJoanTempleman.
1990BransonandPer
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LindstrandflyPacificinhotairballoon.
GulfWarbreaksoutduringflighttriggeringairlinerecession.VirginAtlanticsends747toIraqtopickupBritishhostages.VirginRetailGroupandMarui(Japaneseretailer)announcetheformationof50:50jointventurecompanytooperateMegastoresinJapan.
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1991VirginPublishingisformedbycombiningWHAllen,Al-lison&BusbyandVirginBooks.
Virgin
operates
firstHeathrowservices.Virginsells
50%ofMegastoresbusinesstoWHSmith.Branson
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decidestosell-VirginMusicGroup–“thejewelinthecrown.”
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THELIFEANDTIMESOFRICHARDBRANSON
17
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1992SaleofVirginMusicGrouptoTHORNEMI.ThedealvaluesVirginMusicGroupatUS$1billion,withRichardBransontoremainnon-executivepresidentofthegroup.
PostproductioninterestsarereorganizedunderanewholdingcompanyVirginTelevision.UScarrierVintageAirtoursisestablishedtooperateadaily
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servicefromOrlandotoFloridaKeys,offeringnostalgictripsinDC–3.
BransonthreatenslibelactionagainstBritishAirwaysfordismissinghisallegationsof“dirtytricks”aspublicityseeking.
1993BritishAirwayssettleslibelactionfor£610,000plusalllegalcosts(totalcostsbelievedtoexceed£4.5
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million).
VirginAtlanticvotedairlineoftheyearbyExecutiveTravelmagazineforthethirdyearrunning.VirginRadio1215
AMlaunched.
1994BransonbidsforfranchisetorunBritain’sNationalLottery,promisingtogiveallprofitsto
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charitablefoundation.
LotteryawardedtorivalCamelotconsortium.
VirginAtlantictakes$325millionanti-trustcaseagainstBritishAirwaystoUScourt.BransonfamilynarrowlyescapesdeathincarcrashonM40motorway.
VirginColalaunchedwithmuchfanfare.
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1995VirginDirectPersonalFinancialServiceislaunched.Virgin,TPGPartners,amajorUSinvestmentfundandHotelPropertiesLtdannouncetheacquisitionofMGMCinemas.AustralianMutualProvincial(AMP)buysa50%
stakeinVirginDirect,buyingoutNorwichUnion,theoriginalpartner.
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18BUSINESS
THERICHARDBRANSON
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WAY
1996VirginBride,thelargestbridalretailshopinEuropeislaunchedinLondon.VirginenterstheInternetmarketwithVirgin.net.VirginRailGroupwinsfranchisetooperateInterCityExpressserviceslinking130stationsacrossBritain.
1997Virgin’sbidtooperate
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theInterCityWestCoasttrainserviceissuccessful,witha15yearrailfranchise.VirginVie,anewjointventurecosmeticsandbeautycarecompany,launchesitsfourflagshipstoresinBritain.VirginDirectlaunchesitsfirstbankingproduct,VirginOneAccount.
ChrisEvans’GingerProductionsacquiresVirginRadiofor£85million.The
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company,renamedGingerMediaGroup,toberunbytheexistingstaffundertheVirginRadioname.
1998VirginTradingpurchasesremainingstakeinVirginColafromCottEurope,takingfullcontrolofsales,marketing,logisticsanddistribution.
1999BransonknightedinNewYear’sHonoursList.
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Sells49
percentofVirginAtlantictoSingaporeAirlines.VirginMobilelaunched.
2000LosessecondbidtooperatetheNationalLottery,afteraselectionprocessdoggedbycontroversyhandsittoincumbent,Camelot.VirginClothingfoldsintheUK.VirginCarslaunched.
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2001SellsstakeinmortgagebrokerageVirginOnetoRoyalBankofScotland.VirginTrainslaunches“world’sbiggestrailoffer.”Cutsalmostallrailfaresby50percent.
Promotiondoesn’trunassmoothlyasVirginwouldlike.
2002Virgincreditcardintroduced.
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THELIFEANDTIMESOFRICHARDBRANSON
19
2003VirginShopsmergeswithVirginMegastores.VirginCarsopensthefirstevervehicledepartmentstoreinManchester.
2004It’sup,upandawayasVirginannouncesthelaunchofVirginGalactic–tourist
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travelintospace.VirginAtlanticcelebratesits20thbirthday.
2006TheVirginAtlanticGlobalflyerpilotedbySteveFossettbreakstherecordforthelongestflightinhistory.Bransonannounces$3billioninvestmentintacklingglobalwarming.
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1
Curiouslyenough,Virgin’sexecutivesoriginallyrefusedtoletBransonusetheVirginbrandoncontraceptives,fearingitwouldbetoocontroversial.
2Jackson,
Tim,
VirginKing,HarperCollins,
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London,1994.
3
Branson,Richard,BBC‘MoneyProgramme’Lecture,1998.
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ONE
PICKONSOMEONE
BIGGERTHANYOU
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“AtVirgin,wehaveastrategyofusingthecredibilityofourbrandtochallengethedominantplayersinarangeofindustrieswherewebelievetheconsumerisnotgettingvalueformoney.”
–RichardBranson
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BIGGERTHANYOU
23
RichardBransonhasmadeacareeroutofplayingDavidtotheotherguy’sGoliath.Inthepasttwodecades,Virginhascrossedswordswithsomeofthemostpowerfulcompaniesontheplanet.Inthe1970s,theVirginrecordlabelwentupagainstthemusicestablishment,
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includingthelikesofEMI.WhenhesetupVirginAtlanticAirwaysinthe1980s,Bransontookonthebigairlines,goingheadtoheadwithBritishAirways.Inthe1990s,Virginenteredthesoftdrinksmarketwithofallthingsacola–placingitindirectcompetitionwiththegiantsofCoca-ColaandPepsiCo.Infinancialservices,VirginDirectcompeteswiththebanksand
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otherlarge-scalefinancialinstitutions.
Wheresomeentrepreneursmighttakeonelookatthemarketdominanceofthebigplayersandthinkbetterofit,Bransonactuallydelightsintakingon,andoutmaneuveringlargecorporations.WhenBransonlaunchedVirgincola,onejournalistnoted:“Igottheimpressionitwasnotthe
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moneybuttheprospectoftakingonthemightyCoca-Colacorporationthatreallygavehimhiskicks.”1
“Virginstandsforasenseofchallenge,”saysBranson.“Weliketousethebrandtotakeonsomeverylargecompanies,whomwebelieveexerttoomuchpower.Therearecaseswhereabrandnamehastraditionallybeenalmostsynonymouswiththeproduct
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itisselling–Coca-Cola,Kellogg’s,Hooverforexample–withheavyadvertisingtokeepitthatway.Infact,manyAmericanbrandnameslikethesegrewupduringtheso-callederaofthec01.indd23
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24BUSINESS
THERICHARDBRANSONWAY
robberbaronswhichledtotheintroductionofAmerica’sexcellentanti-trustlawsintheearly20thCentury.”
RICHARDTHELIONHEART
Bransonhasaremarkable
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abilitytoclothealmosteverythinghedoesinacrusadingcloak.ThislendstheVirginbrandmoralauthority.Whenpittedagainsttheimmenselypowerfulforcesof“bigbusiness,”Branson-stylecapitalismlooksalmostsaintlybycomparison.Bytargetingcompanieswithdominantandoftenaggressivemarketpositions,Virginisabletoseizethe
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moralhighgroundfromtheoutset,somethingthatgivesitadistinctiveedgewithconsumers.
Whereotherempirebuildersgetinvolvedincommercialdog-fights,Bransongoesinforcrusades–withVirgininvariablyonthesideoftheangels.Thestrategyreliesonthecredibilityofthebrand,andpublicconfidenceintheVirginchairmanhimself,to
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“dotherightthing.”(Incrediblyforabusinessman,BransonwasoneofahandfulofpeoplechoseninapollofBritain’syouthassomeonetheywouldtrustto“re-writetheTenCommand-ments.”)
InmanyofthemarketsVirginhasenteredconsumerssensedthattheywerenotbeingtreatedfairly,butcouldn’tseeanyotherchoice
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thanthebigplayers.Theysimplyacceptedthattheirbestinterestswerenotbeingserved.Virginoffersanalternative.AsoneVirginexecutiveobserves:“Ifyougoforbig,fat,lazybrandleaders,it’softeneasytoofferbettervalueformoney.”
Inaddition,itallowsyoutobeonthesideoftheconsumer,whowillthank
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youforit.
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PICKONSOMEONEBIGGERTHANYOU
25
Branson’sgreatestgiftasanentre-
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“Ifyougofor
preneurandabusinessmanishis
preoccupationwiththeconsumers’
big,fat,lazybrand
pointofview.Whenhewentinto
leaders,it’soften
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themusicbusinessinthe1970s,for
easytoofferbetter
example,thelong-haired–andlat-
valueformoney.”
erspikyhaired–youngstershewas
sellingtohatedthe“straight”
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music
establishment,whichtheybelievedrippedofffansandartists.
TheysawBransonasacrusaderfortheiralternativeculture.
WhenhelaunchedVirginDirect,thefinancialservicescompany,Bransonexpresslysaidthathewasgoingto
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shakeupthemarket.
Itwasa“dirtybusiness”hesaid,thatneededcleaningup.
“TheVirginnameistrusted,especiallybyyoungerpeople,”hesaid.“Theconsumerhasbeentakenforaridefortoolongbyanindustrywhichhasbeenabletohideitscharges.”2
HOISTAPIRATEFLAG
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OthersseeBransonmoreasabuccaneerthanacrusader.TheappealoftheswashbucklingVirginboss,theyargue,ishiscompletelackofrespectforfiguresofauthority.This,combinedwithagleefulsenseoffun,andthepleasureofbeinganirritanttobigbusiness,iswhatattractsthemtohisside.
Onthisreading,hesteersa
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courseforthemostheavilyarmedtreasureships,ladenwiththespoilsofexcessivemarketpower.
Timeandtimeagain,hehashoistedtheVirginlogooveranewventurelikeamoderndayskullandcrossbones,asheandhisc01.indd25
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26BUSINESS
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THERICHARDBRANSONWAY
youthfulpiratecrewboardthemar-
Bransonon
ketofonemultinationaloranother.
financialservices:
“Theconsumerhas
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Bransoniswellawareofthisimag-
eryandhasusedthepiratemotifto
beentakenfora
goodeffect,togeneratepublicity
ridefortoolongby
andtoantagonizethe
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competition,
anindustrywhich
somethingthatheexcelsat.Shortly
hasbeenableto
afterthelaunchofVirginAtlantic
hideitscharges.”
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Airways,forexample,Bransonissued
aninvitationtophotographersfrom
theBritishnationalpresstorecord
hisswashbucklingantics.Thelocation:Heathrow,London’smainairport–whereBritishAirwayskeepsafull-sizemodelof
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Concordedeckedoutinitscorporatelivery.
Attheappointedtime,Bransonappeareddressedasabuccaneer,completewitheyepatch,andloweredtheVirginliveryontoConcorde,stealingtheUKnationalcarrier’sthunderandprovidingafantasticphotoopportunity.ThenewspapersthenextdaycarriedphotographsofBransonand
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hisVirginpiratesboardingtheBAflagship.LordKing,BAchairmanatthetime,wassaidtobesoincensedwhenhesawthepicturesthathealmostbrokethesoundbarrierhimself.
EVERYUNDERDOGMUSTHAVEHISDAY
BransonisverygoodatpositioningVirginastheunderdog(eventhoughwhen
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viewedasagroup,Virginisactuallyabigcompanyinitsownright).It’shardtothinkbadlyofamanwhopicksoncompaniesthatare,oratleastappeartobe,muchbiggerthanhis.
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27
Sportsfansknowthattheoutsiderwilloftenattracttheneutralobservertoitsside.Thesameseemstoworkinbusiness.PositioningVirginasthesmallguyhasimportantpsychological
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advantages.Itplayswellwithcustomers,especiallythosewhofeelneglectedorthattheyhavebeentakenforarideinthepast.Theyarelikelytobedrawntotheplucky,tenaciousstyleofthelittleguywhoispreparedtostanduptothebullies.Facedwiththeprospectofsomecheekyupstarttakingonthemightofamultinational,neutralonlookerscan’thelpbutapplaudVirgin’s
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audacity.
It’salsogoodforthemotivationofVirginemployeestofeeltheyaretakingpartinanepicstruggle:Virgin’sentrepreneurialflairandenthusiasmpittedagainstlumberingcorporatebeefcake.
Astheunderdog,theyhaveeverythingtogainand
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nothingtolose.Atthesametime,thearrivalofaloud-mouthed“hippy”likeBransonontheirterritoryisalmostguaranteedtoincensethecompetition–forcingthemtomakemistakes.
It’sclear,too,thatthere’ssomethinginBranson’spsychethatrespondstothechallenge.Hedelightsinhavingtheoddsstackedagainsthim,andtakes
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enormouspleasureindoingwhattheexpertssaycan’tbedone.Wherethatchallengeinvolvesadministeringshocktreatmenttoacomplacentmarketleader,itisallthemoreappealing.
WhenaCoca-Colaexecutiveboastedthat“withoutoureconomiesofscaleandourincrediblemarketingsystem,whoevertriedtoduplicateourproductwouldget
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nowhere,”Bransoncouldn’twaittohaveago.3
Healsohasaninstinctivefeelforwhatcanbeachieved.Ofhisdecisiontogointotheairlinebusinessin1984,hesays:“Itc01.indd27
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28BUSINESS
THERICHARDBRANSONWAY
wasamovewhichinpureeconomictermseverybodythoughtwasmad,includingmyclosestfriends.ButitwassomethingwhichIfeltwecouldbringsomethingtothatotherswerenotbringing.”
PICKYOURBATTLES
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Thedecisionstoenterboththeairlineandcolamarkets,however,werecarefullyconsidered.Althoughhegivestheimpressionthathelikestoclimbbusinessmountainssimplybecause“theyarethere,”inalmosteverycaseBransonisrespondingtospecificbusinessopportunitiesthatpresentthemselves.
InthecaseofVirginCola,he
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wasapproachedbyasoftdrinkscompanywithahighqualitycolaformulalookingforstrongbrandname;inthecaseofVirginAtlantichewasapproachedbyRandolphFields,ayounglawyer
whohadalreadydonemuchofthe
Bransonon
legworkforlaunchingan
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airlinebut
tacklingbig
neededfinancialbacking.Bothop-
business:
portunitiesweretoogoodtomiss.
“Ifyoutake
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onestablished
Sometimes,however,thelogicisnot
clearatfirsttotheso-calledexperts,
brands,manyof
apointBransonlikestoramhome
whomhavenear
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whenhegetsthechance.Takethe
monopolies,you
exampleofVirgin’sforayintotheUK
expecteverything
financialservicesmarket.
tobethrownatyou
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“Welookedlongandhardatthemar-
toweakenyour
ketplaceandrealizedthatalthough
position.”
therewere600companiesselling
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29
PEPs,pensionsandthelike,theyallchargedalmostidenticallyhighprices.There
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wasalwaysanup-frontcommission(oftenhidden)ahighannualfeeandusuallyaMrorMrsTenPercentsittinginthemiddlerakingoffafatcommission.Itwaslikeagiantcartel…”
“Theinterestingthinghereisthatwhenwelaunchedthebusiness,themarketinggurusalmostuniversallycriedoutthefatalwords‘brandstretching’,withoutstopping
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tothinkthat,infact,thewholeideawasincrediblyclosetothebasicpropositionofferedbyVirginAtlantictotransatlanticpassengers.Atitssimplest,aqualityproductwithflairatreasonableprices.Alltheycouldseewasadifferentproduct.Butthegeneralpublic,notversedinmarketingspeak,sawitinmuchthesamewayaswedid.”4
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Butthereisanothersidetopickingyourbattles.IfthereisonelessonthatRichardBransoncanteachaspiringentrepreneursaboveallothers,itistoexpecttroublewhenyougoupagainstbigbusiness.Thereisanoldproverb:agorillawithagnatonitsbackhasatendencytotrytoswatit(allthemoresoifthatgnatismakingalotofnoiseandhasitsphotographinthenewspapers).
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“Ifyoutakeonestablishedbrands,manyofwhomhavenearmonopolies,youexpecteverythingtobethrownatyoutoweakenyourposition.Wehavehadtoputupwiththesesortsofattackformanyyears.Vastamountsofmoneyarespentspinningstoriesinanattempttodamageyourproposition,orpreferablytosmotheritbeforeitgetsestablished.”5
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Virgin,however,hasshownitselftobearobustcompetitor.
Therearetwofactorshere.ThefirstisthatBransonhasneverc01.indd29
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30BUSINESS
THERICHARDBRANSONWAY
beenpreparedtoletthebigguyswalkalloverhim.Butsecond,andjustasimportant,hepickshisbattlesvery,verycarefully.
Facedwithanaggressivecompetitor,theBransonstrategyissimple.Makealot
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ofnoisetoirritatehimsothathetriestoswatyou,andthensitbackandwaitforhimtomakeamistake.Oncehedoes,hithimhardwhereitreallyhurts.Thisisatechniquehehasusedtogoodeffectonanumberofoccasions.(Ithelpstohavesomeexcellentlawyers,too.)
HIT’EMWHEREITHURTS
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Inanumberofcases,Bransonhasusedguerrillatacticsagainstalargerrival.WhentheairlineVirginAtlanticstarted,promotionalactivitiesweretargetedtoscorepointsoffthemuchlargerBritishAirways.Toosmalltobeaseriouscompetitoratthattime,Virginneverthelesstalkedagoodfight.
TheBAmanagementculture
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atthattimecanbedescribedasrobustifnotdownrightaggressive.AtBA’sheadquarters,Bransonwasseenasanupstartwithrathertoomuchtosayforhimself.
Worsestill,hehadnoexperienceofrunninganairlineandhadidentifiedhimselfwithFreddieLaker,anotherupstart,whoseairlinehaddonemuchtobringdownthepricesoftransatlantic
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faresbeforegoingbust.AnumberofcheekypublicitystuntsandcarefullywordedBransonsoundbiteswereboundtogetundertheskinoftheBAmanagement.
Whathappenednextisstillunclear.ItwouldappearthatasmallcadreofmanagerswithinBAbecameincensedbywhattheyregardedasanaffronttotheircompany.Apparently,thisledto
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seriouserrorsofjudgement,includingtheuseofsomesharpc01.indd30
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31
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competitivepractices–ordirtytricks–aimedatunderminingVirgin’sbusiness.Facedbyaseriousthreattohisairline,andquitepossiblytherestofVirgintoo,Bransoncameoutfighting.
IntheUS,hecouldtakeadvantageofthe“excellentanti-trustlaws”topursueBAthroughthecourts.ButinBritainheoptedtofightona
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differentbattlefield.KnowingfullwellthattheUK
competitionlawsarenotasstrong,hedecidedtoshameBApublicly.
BransontoldthepressthatBAwaswagingadirtytrickscampaignagainstVirginAtlantic.Buttheallegationsseemedsofar-fetchedthattheBritishpressdidn’tknow
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quitewhattomakeofthem.
Finally,however,adocumentarymakerstartedtoinvestigatetheclaims.Theresultingprogrammewascalled“ViolatingVirgin,”andprovidedcorroborativeevidencetobackupBranson’sclaimsofadirtytrickscampaign.
WhenthedocumentarymakerapproachedBAto
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commentonhisfindings,aletterfromaBAspokesmanclaimed:“hehadfallenintothetrapofbeingusedforRichardBranson’spropa-ganda,whichsetsouttocontrivecontroversywithBritishAirwaystocreatepublicityforhimselfandhiscompanyandinflictseriousdamageonthereputationofBA.”
Inanattempttoreassureits
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employees,BAthenpublishedtheletterinitsin-housenewspaperBANews,andthecompany’smediaspokesmanalsodraftedaletterforBA’schairmanLordKingtosendtothosewhohadwrittentohimaboutthedocumentary.TheletteraccusedBransonof“continuingtomountacampaignagainstusthroughthemedia”andadded“ItappearsMrBranson’s
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motivationistocreatepublicityforhimselfandhisairline.”
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32BUSINESS
THERICHARDBRANSONWAY
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Thecompetitionhadjustmadeamistake,andRichardBransonwasabouttopunishthemforit.Citingtheletters,BransonissuedawritforlibelagainstBAanditschairman.
NicciGerrardon
Inearly1993,BritishAirwayssettled
thelibelactionfor£610,000
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–atthe
Branson
time,thehighestsumeverpaidin
versusSnowden:
Britainasalibelsettlement–plusall
“Acharacterfrom
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legalcosts.Thefinalbillwasprobably
ChariotsofFire
over£5million.
haddefeateda
But,asonenewspapernotedin1993:
characteroutof
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“TheDirtyTricksaffairwonBranson
Goodfellas.”
morethanjustthe£610,000indam-
agesandpublicapologyfromhis
arch-enemyLordKing.Italsoboostedhisappealtoapublicthatinstinctively
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backedthesmallguyoverthebullyinggiant.
NoweveryonewantsasliceoftheBransonmyth.”6
Morerecently,Bransonwasontheotherendofalibelaction,butstillcameoutontop.ThecasewasbroughtagainstBransonbyGuySnowden,chairmanoftheAmericangamingcompanyGTech,andamemberofthe
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boardoftheUKlotteryorganizerCamelot.AfterBranson’sownbidtoruntheUKlotterythroughaconsortiumhadfailed,heallegedthatSnowdenhadtriedtobribehimtopulloutoftheracetoruntheUKNationalLottery.Snowdendeniedtheallegation,andsuedBransonforlibel.
Thisprovedamistake.Onebarristercommentedthat,
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fromthedefendant’spointofview,RichardBransonisthenightmareplaintiffinalibelcase.OfallfiguresinBritishpubliclife,hehasthepurestreputationandisgenerallywell-likedbythepublic.
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PICKONSOMEONEBIGGERTHANYOU
33
Withitsfondnessforheroesandvillains,TheBritishpresscharacterizedSnowden
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asavillain;RichardBransonasthepeople’schampion.HishighcourtvictoryledtoSnowdenstandingdownfromhispostatCamelot.Bransongavethe£100,000damagesfromthecasetocharity.
Onejournalistnotedatthetimethat“AcharacterfromChariotsofFirehaddefeatedacharacteroutofGoodfellas.”7
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PICKONSOMEONEBIGGERTHANYOU
PickingonthebigguysisalmostanarticleoffaithforVirgin,butitalsoplaysanimportantroleinBranson’ssuccess.Alongwiththeobviousdownsides,attackingdominantmarketpositionshassomeimportantupsides.Marketsdominatedbybigplayerstendtohavefatprofitmargins,withplentyof
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scopetomakemoney.TheyalsoenableVirgintoplaytheroleoftheunderdog,somethingthatworkstoitsadvantagewithconsumers,employeesandthemedia.
ThefirstlessonoftheBransonbusinessstrategyis:
◆
Makebusinessacrusade.Bransonhasaremarkable
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abilitytoclothealmosteverythinghedoesinacrusadingcloak.ThislendstheVirginbrandmoralauthority.
◆
Hoistapirateflag.OthersseeBransonmoreasabuccaneerthanacrusader.Hisappealisseenasalackofrespectforfiguresofauthority,combinedwitha
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gleefulsenseoffunandthepleasureofbeinganirritanttobigbusiness.
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34BUSINESS
THERICHARDBRANSONWAY
◆
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Playtheunderdog.It’shardtothinkbadlyofamanwhopicksoncompaniesthatare,oratleastappeartobe,biggerthanhis.
◆
Pickyourbattles.Althoughhegivestheimpressionthathelikestoclimbbusinessmountainssimplybecause
“theyarethere,”inalmost
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everycaseBransonisrespondingtospecificbusinessopportunitiesthatpresentthemselves.
◆
Hitthemwhereithurts.Inanumberofcases,Bransonhassuccessfullyusedguerrillatacticsagainstalargerrival.
NOTES
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1
Hoskings,Patrick,writingintheIndependent.
2Brown,
Mick,
RichardBranson:TheAuthorizedBiography,4thedn,Headline,UK,1998.
3Mitchell,
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Alan,
LeadershipbyRichardBranson,AmropInternational,1995.
4
Branson,Richard,BBC“MoneyProgramme”lecture,July1998.
5
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Branson,Richard,BBC“MoneyProgramme”lecture,July1998.
6
Davidson,Andrew,“Virgin’sAngel:TheriseandriseofRichardBranson,”SundayTimesMagazine,May30,1993.
7
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Gerrard,Nicci,“WhydoweloveRichardBranson,”TheObserver,February8,1998.
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TWO
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DOTHEHIPPY,HIPPY
SHAKE
“WhenIstarted,Ididn’trealizetherewasadifferentwaytobeabusinessperson.Nowmybusinessisusingitscredibilityandpowertomakeourworldabetterplacetohangoutin.”
–BenCohen,co-founderof
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Ben&Jerry’sHomemade1
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DOTHEHIPPY,HIPPYSHAKE
37
Withhisinformalstyleandnonconformistattitude,RichardBransonhasbeencalleda“hippycapitalist.”AproductoftheswingingSixties,hisaversionto
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wearingasuit,inparticular,hasledtohimbeinglinkedtoother“newagemanagers”includingAnitaRoddickofthenaturalcosmeticscompanyBodyShopandthosepurveyorsofloveandicecream,BenCohenandJerryGreenfieldofBen&Jerry’sHomemade.
Inthe1960s,BransonmarchedontheAmericanEmbassyinLondoncalling
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foranendtotheVietnamWar–asdidmanyotherlong-hairedyoungmenandwomen.HealsousedhismagazineStudenttovoicetheviewsofliberalreactionariessuchastheactressVanessaRedgrave.ButhewasmoreattractedbythebuzzandexcitementofLondonatthattimethanheeverwastothehippycause.
InBranson’scasethehippy
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tagismisleading.Inreality,hisaffinitywithflowerpowerandthe1960smovementislessacommitmenttoahardandfastsetofprinciplesorpoliticalbeliefs,andmuchmoretodowithbeingintunewiththetimes.Thissenseofbeingpartofwhateverishipandtrendyisoneofhisgreatestbusinessattributes.IthasallowedhimtoprojecttheVirginbrandasa“cool”
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alternativetowhateverthesuitsareoffering.
Bransonhasalwaysbeenuncomfortablewiththehippylabel.
Moreaccurately,heisandalwayshasbeenanti-corporate.Hehasahealthydisrespectforthehubrisandbullshitofbigbusi-c02.indd37
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38BUSINESS
THERICHARDBRANSONWAY
ness.Inparticularhehasnotimeforthosewhohidebehindsuitsandties,orforbusinessschoolgraduateswhothinkthatmanagingabusinessisjustaboutnumbers.
Lookingaroundhimatthe
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Britishbusinessestablishmentinthe1960s,hedidn’tmuchlikewhathesaw.“Apartfromafewexceptions,post-warBritainhasbredadomesticcommercialculturethatisanti-competitive,cartel-based,andpatriarchal,”Bransonnotes.Fromthestart,heappointedhimselfastheofficialde-bunkerofthatculture,andhasmadehisfortunebyprovidingan
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alternative.
Hereagain,factandfictionfusetocreateanimpressionofBransonthatisteasinglyopentointerpretation.“Achildoftherevolutionary1960s,he’sforgedauniquesynthesisoftheyouthrevolution’svaluesandtheneedsofamodernbusiness,”2saysonecommentator.
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Bransononthe
Alternatively,ashisbiographerMick
Britishbusiness
Brownobserves,hesimply“absorbed
establishment:
theidealismoftheeraandassimilat-
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editintoahazybenevolence,‘todo
“Apartfromafew
somethingforyoungpeople’–par-
exceptions,post-
ticularlyifthatsomethingprovided
warBritainhas
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fun,excitementandachallengefor
bredadomestic
himself.”
commercial
Bransonwouldhavebeendrawnto
culturethatis
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whateverwashappeningatthetime.
anti-competitive,
Inthe1960sitwasinevitablethathe
cartel-based,and
wouldbeinvolvedinthehippyscene.
patriarchal.”
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Hisantennaalwayspickupthelatest
crackleofenergy–andheusually
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DOTHEHIPPY,HIPPYSHAKE
39
slapstheVirginbrandonthesource.Intheearly1970s,forexample,hisrecordlabelsignedMikeOldfieldandTangerineDream.Later,ithelpedputPunkonthemap,signinguptheSexPistolswhentheotherrecordlabelsthoughttheyweretoo
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controversial.
Asonejournalistnoted:“itisasifwegotitthewrongwayroundallalong.Insteadofahippyenteringtheworldofbusiness;itwasabusinessmanwhoenteredthehippyworld(andthePunkworld,andthenanyothergapinthemarkethehappenedtosee.)”3
Bransonisn’tthatinterested
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inpolitics,althoughhispopularityandinfluencewithyoungerpeoplemeanthatpoliticiansbeatapathtohisdoor.Inthe1980s,hewasphotographedwithMargaretThatcher.Buteventhoughshelikedtoseehimasanexemplarofherpolicies,thetwowereneverclose.Morerecently,Bransonhasbeenlinkedwith
TonyBlair’sgovernment.
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“Insteadofahippy
Thetruthisthatheisnotparticularly
enteringtheworld
interestedinideologies.Pragmatism
ofbusiness;itwas
istheBransoncreed,apointre-
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abusinessman
flectedinhiswillingnesstoworkwith
whoenteredthe
governmentsofdifferentshades.At
heart,heisleftofcentreonsocialis-
hippyworld(and
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sues,butnotfanaticallyso.“Isuppose
thePunkworld,
Iamleft-wing–wellonlytotheextent
andthenanyother
thatIthinkleft-wingviewsaresane
gapinthemarket
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andrational,”hetoldtheleft-leaning
hehappenedto
Guardiannewspaper.“Utopianbut
almostapolitical”ishowoneformer
see.)”
employeedescribeshim.
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DON’TBEABREAD
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HEAD
“Moneyisnothismotivation,”saysafriendwhohasknownBransonfor25years.“Itisnotanecessity.Hecouldcopefinewithoutit.”Andhedoes,travellingtheworldwithoutanycashonhim.
Someseethisastheaffectationofamillionaire,butotherssayBranson’sonly
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realinterestinmoneyisasawayofmeasuringhisachievements.Somehow,too,he’spersuadedothersthatmoneyisn’tthemostimportantthing.
Virginhasalong-standingtraditionofnotoverpayingitsstaff.
Manyemployeeshavebeencontenttoworkforlessthanthegoingmarketrate
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becausetheyenjoythebuzz.(Thecompanyalsotriestoprovidealong-termcareerforthosewhoremainloyal.)ThecousinofoneemployeewhoworkedonBranson’sfirstcommercialventure,forexample,recallshisinitialimpressionsofthefledglingentrepreneur.OnarrivinginAlbionStreet,wherethemagazinewasbased,hewassurprisedtobegreetedbyBransonwithakiss.“I
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thought,Christ,thisisodd,butalsowhataninterestingandexcitingplacetobe–becauseitwasafriendlykiss.”
Itneededtobe,4becausenobodyonthemagazine’sstaffwasbeingpaidasalaryatthattime.ManyhaveremarkedonBranson’sextraordinaryknackforgettingpeopletoworkforlittleornofinancialreward
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andnootherobviouspersonaladvantage.Anumberputitdowntoacuriouslyinspiringsensethatitwassomehowforthegreatergood,andinsomewayfurtheredthecauseofsomenobleidea.Butnobodycouldeverquiteputtheirfingeronwhatitwas.Bysomeingeniousmethod,Bransonconvincedtheseotherwiserationalindividualsthattoforgofi-
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nancialrewardwas“fun.”
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41
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Hedoesn’tlikepayingbigexecutivesalarieseither.Eventhoughhehasmadeseveralofhislong-termmanagersmillionairesbygivingthemastakeinthebusiness,heiscannyaboutusingfi-
nancialcarrots,andisastuteenoughtooffersharesinindividualbusinessesworthmuchlessthanastakeinthegroup.
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Despitehiswealth,Branson’sownappetiteformaterialthingsissurprisinglymodest–bybillionairestandards,atleast.True,hedidownaCaribbeanIslandwhichisnowownedbytheVirginGroup,andhasseveralhomesaroundtheworld,butunlikeotherveryrichmenhedoesn’tflaunthiswealth.Hedoesn’tcollectpricelessworksofart,carsorhorses(somerarespeciesofduckat
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hisOxfordshirehomedon’treallycount).Hehatesshoppingforclothes,andisfamousforwearingcheapshoesandtastelessjumpers.Thesedays,hepreferstolethiswifeshopforhim.
Sometimes,saythosewhoworkwithhim,hecanbearrogant,butheisneverflash.Healsoshowslittleinterestinhangingoutwiththeinternationaljetset–
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althoughhisinterestsinthemusicbusinessmeanhebumpsintotheoddrockstarhereandthere,usuallyathisownparties.AsoneVirginemployeeobserves:“Heseeseverythingasagame.HeregardslifeasacosmicversionofMonopoly.”5
NOJACKETREQUIRED
Branson’sdislikeofwearingasuitandtieislegendary.
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Thesedays,thetrademarkpatternedsweatersarelessevident.Thelookisstillcasualthough–usuallyanopenshirtandsportsjacket.
Hemayhaveputonapin-stripeandbowlerhattopromoteVirginshareswhenthecompanywasfloated,buthisideaofpowerdressingremainsresolutelylowkey.
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Hereagain,though,heisnot
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thehippypeopletakehimfor.Theyoungentrepreneurwasmorenerdthanbeatnik.“Theoutsizejumperanduntidyhaircut,theblack,horn-rimmedspectacles,fracturedatthebridgeandheldtogetherwithSellotape,gavehimtheairofaperpetuallygenialschoolboy–anairwhichhehasneverquiteshakenoff.”MickBrown,notesinhisbiographyofBranson.6
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Hisinformaldresssensestandsoutfromthecrowd,somethingthatworkstohisadvantage.Thereisonestorythatepitomizeshisinversepowerdressing.IntheearlydaysofVirgin,thesightofpony-tailedmenandwomeninjeansandtanktopswalkingintoCoutts,oneoftheoldestandmostconservativeBritishbanks,becamearegularsight.Itwasnaturalthereforethat
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whenthecompanyexperiencedacashflowcrisisthatthreatenedtoputitoutofbusinessthatitshouldturntothebankforhelp.
AmeetingwasarrangedbetweenBransonandtheVirginaccountmanageratCoutts.Whenthedayarrived,theyoungentrepreneurturnedupforworkdressedasusualinjeansandT-shirt.“Richard,”
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saidoneofhiscolleagues,“don’tyouthinkit’stimetoputasuiton?”TheyoungBransongrinned.“IfIsud-denlyturnupatthebankwearingasuitandtie,”heexplained,
“theywillknowwe’reintrouble.”Intheevent,Bransonstrolledintothemeetinginhisjeans,andinformedhisbankersthatthebusinesswasexpandingso
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quicklythatheneededabiggeroverdrafttokeepupwithorders.Thebanktookonelookatthescruffy,self-assuredyouthandagreed.
AndrewDavidson,ajournalistwhointerviewedBranson,tellsanotherstorythatsumsuptheVirginchairman’sattitudetothestuffyBritishbusinessestablishment.7DuetogiveaspeechattheInstituteof
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43
Hall,BransonwasansweringquestionsinamakeshiftofficeinhisHollandParkhome,wearinggreyslacks,cheapblackshoesandahand-knittedsweater.Thenfromtheroomnextdoor,hisassistantenquiresaboutthewhereaboutsofhissuit.Hegroans.
“DoIhavetowearasuit?”
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“Withoutthinking,”Davidsonsays,“Itellhimhowyearsago,IwasoncethrownoutoftheInstituteofDirectorsforforgettingtowearatie.It’slikearedragtoabull.‘Right,that’ssettled,’
Bransonshoutsthroughtohisassistantinthenextroom.‘Nosuit,Penni.I’mgoingasIam.’Heknowsthat,asheisgivingoneofthekeynote
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speeches,heishardlylikelytobeturnedaway.”
POWERTOTHEPEOPLE
OneareawhereBranson’ssixtiescredentialsaregenuineisinhistreatmentofthepeoplewhoworkforhim.Bransonisagreatbelieverinpeoplepower.HehasbuilttheVirginbrandonthepremisethatpeople–customersandemployees–
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comefirst.
Heisaproductofthedemocratizing
idealsoftheSixtiesandhasaninstinc-
tivesensethatallpeopleshouldbe
Bransononthe
treatedwithrespect.Today,
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compa-
interestsof
nieseverywherearebusydismantling
employees:
theirhierarchiesandeliminatingthe
“Staffshouldcome
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outwardsignsofexecutiveprivilege.
first;ifitmeans
Ineschewingthetrappingsofstatus
andpowerfromthestart,Branson
making£5million
waswayaheadofthegame.
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less,thenthatis
therightdecisionto
BransonlikestorefertoVirgin
make.”
employeesasbelongingtoalargeex-
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tendedfamily.IntheearlyyearsofVirgin,everynewemployeewasgiven
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Branson’shometelephonenumber,andencouragedtocalliftheyhadanybrightideas–orcomplaints.Tothisday,everyoneinthecompanycallshimbyhisfirstname.
ItistypicalofBranson,too,thatwhenhisVirginMegastoreopenedinNewYork,theinvitationlistincludedthecrewsofallVirginAtlanticaircraftthat
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happenedtobeintownthatnight.
AnotherclassicBransontouchwastoshareoutthe£610,000
settlementfromBritishAirwaysfromthedirtytrickslibelcase.
ThemoneywasdividedequallybetweenallVirginstaff.Eachemployee
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received£166–knownasthe“BABonus.”Itsentamessagethattogethertheyhadallwonagreatvictory.
Bransonbelievesinkeepingfaithwithhisstaffingoodtimesandinbad.Employeeswholosetheirjobscanappealdirectlytothechairman,whohasbeenknowntointervenepersonallyifhethinkstheappealisjustified.Even
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whentheairlinebusinesswasdepressedbytheGulfWarandtherecessionoftheearly1990s,VirginAtlanticwasanxioustoavoidredundancies,andmanagedtoavoidlayingoffanystaffbetween1991and1993.
“Wetriedtolookforeverywayroundthat,”saysBranson.“Somewentoffonhalf-paidleavewiththeunderstandingthatifthey
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wantedtheirjobsbackwhenbusinesspickeduptheycouldhavethem.”
Interestingly,hehasmadeavirtueofthefactthatheretainsownershipofthemajorityshareoftheVirginempiretoprotectemployees.HisdecisiontotakethecompanybackintoprivateownershipafteritwasfloatedontheLondonStockmarket,heclaims,giveshim
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morefreedomtobeacaringboss.
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45
“Thepointisthatasaprivatecompany,youcanmakedecisionswhichapubliccompanyfindsmoredifficult.Staffshouldcomefirst;ifitmeansmaking£5millionless,thenthatistherightdecisiontomake.It’slikeafamily.Whenpeopleusethewordfamilywithregardtocompaniesitisoftenextremelymisused.
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Butifthegoingwastough,Iwouldneverthrowmychildrenout.
Everyonejustsharesabitless.Itshouldbeexactlythesamewithacompany.”8
SEXANDDRUGSAND
ROCK’N’ROLL
Fromthestart,theVirginbusinesswasrunona
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deliberatepolicyofmixingbusinesswithpleasure.Fromitsearliestdays,theVirginphilosophyhasbeenworkhard,playhard.Foryears,theentirestaffoftherecordcompany,publishingcompany,andstudiomanagementteamwouldspendweekendsawaytogetheratthecompany’sexpense.StartingonaFridayandendingonaSundaynight,theywoulddecampto
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acountryhotel.
AsTimJacksonnotesinhisbookVirginKing:“Attendancewasintheoryoptional,butthosewhodidnotcomeweretoldjokinglythattheywereexpectedtospendtheweekendworkingintheoffice.”
“Atthehotel,otherrecordcompaniesmightfillthedayswithtalkofsalestargets
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ornewproducts.AtVirgin,businesswasbanned.Instead,theguestswouldspendtheweekendplayingtennisorgolf,swimmingandsunningthemselves,eatinganddrinkingwithgreatgusto,andtakingafewdrugsandsleepingwitheachotherintheevenings.”9
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ItwastypicalofBranson,too,thatwhenMayfairmagazineun-earthedsomenudepicturesofhiswifeJoantakenadecadeorso
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earlier,hetookitinhisstride.Whereothermillionairetycoonsmighthavetriedtopreventthemagazinepublishingthepictures,Bransonwasdelightedthattheworldshouldknowhowbeautifulthemotherofhischildrenwas.10WhenaVirginemployeelaterteasedhimaboutthepictures,Bransonretortedthathehadaskedthemagazineforfull-color
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enlargementsandplannedtoputthemonthewalloverhisbed.
TheofficesofStudent,Branson’sfirstbusinessventureafterleavingschool,aresaidtohaveresembledahippycommunemorethanamagazineoffice.Deadlinesslipped,thepublicationlostmoneyandeventuallyfailed,butthepeopleworkingonthepublicationhadagoodtime.
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Whereothercompaniesmighthold“brainstormingsessions,”staffatthemagazineweremorelikelytositaroundandgetstoned.
Branson’snextprojectwasmoresuccessful,buttheattitudewasthesame.Accordingtoonesource:“Thenewenterprise–amailorderrecordcompany–wasconductedinanatmospherefilledwithmarijuana
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smoke.11Thefirstorderofthedaywastorolljoints.Thecompany’sinspirednamewasconceivedduringonesuchsession.”
(WhetherBransonhimselfactuallyinhaledisdifficulttosay.ButonarecentBBCtelevisionprogramme,12hewasaskedwhethertherewasanyproductthattheVirginnamewouldneverbeusedtobrand.Hesensiblyducked
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thequestion,butofferedthethoughtthatiflegalizedVirginwouldbemorelikelytoputitslogooncannabiscigarettesthanitwouldontobacco.)c02.indd46
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SHAKE
47
Rock’n’roll,meanwhile,waspayingthebills.Notonlydidthecompanygoontoopenanumberofrecordstores,bythe1970stheVirginrecordlabelwasmakingaseriouscontributionatsource–discoveringthelikesofMikeOldfield,TangerineDream,
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andBoyGeorge,andsigningtheSexPistols.Itevenattemptedtosignthosemastersoftherock’n’rolllifestyle,theRollingStones.(TheprofitsfromMikeOldfield’sTubularBellsandtoalesserextentTangerineDream’salbumPhaedrabankrolledtheentireVirginenterpriseandexpansionforthreeyearsaftertheirrelease.Later,therevenuefromsalesofCultureClub’srecords
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madeamajorcontributiontotheVirgincoffers–releasingvastreservoirsofcashintothestrugglingVirginempire.)
Despiteitssize,thesocialaspectofthebusinessremainsimportanttothisday.Eachyear,BransonhostsaseriesofpartiesathishomeforalltheVirginemployees–everyonefromseniormanagerstoairline
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crew,shopassistantstoaero-engineers,andsoftdrinksexpertstosecretaries.Theretheyarelavishlyentertainedwithafun-fair,barbecues,bouncycastles,puntingonthenearbyriverandotheractivities.ItisaVirgintradition,too,thatBransonhimselfendsupinthewateratleastacoupleoftimesinthecourseoftheweekend.
AsMickBrownsaysinhis
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biographyofBranson:“Oneishardputtothinkofanyotherbusinessmanorcaptainofindustryinanyfield–LordHansonorDonaldTrump,AlanSugarorBillGates–whowouldentertainhisstafflikethis.Equallyitishardtothinkofanotherchairmanofanairlinewhowouldgreethispassengersatthedooroftheaircraft,ordressupinfulldragasastewardesstoservethemin-
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flightdrinks.”
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48BUSINESS
THERICHARDBRANSONWAY
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SHAKEITUPBABY
AnothercommondenominatorofbusinessBranson-styleisthedesiretoshakeupthemarketsheenters–andtheestablishmentingeneral.ThesectorswhereVirginhassetupitsstallarerarelyeverthesameagain.ItisintrinsictotherebelliousBransonapproachtopicksectorsthatarecryingoutforinnovation.
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Often,theyarecharacterizedbyalackofimaginationandalackofresponsivenesstotherealneedsofcustomers.Insomecases,thesadstateofaffairsisalmostacceptedbyconsumersassimply
“thewayitis.”ThenalongcomesBransonandsays,“itdoesn’thavetobethisway.”
AclassicexamplewasVirgin’sentryintotheUKfi
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nancialservicesmarket.ItwashardtoimagineanythingmoreincongruousthanthepiratesofVirgintalkingaboutpensionsandinvestmentplans.Yet,onceitbecamecleartheywereserious,nothingseemedmorenatural:Virgin,thecompanywithseriousstreetcred,offeringyoungpeopleanalternativetothestuffybankersandinsurancecompaniesbyprovidingano
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nonsense,nobullshitapproachtofinancialservices.
Toidentifytheopportunity,however,ittooksomeonewhoknewhowthefinancialcommunityworkedbutwasn’tpartofit.RowanGormleyhadjoinedVirginfromaventurecapitalcompanyin1991.ForseveralyearshehadworkedwithBransonsiftingthroughthe
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hundredsofbusinessproposalsthecompanyreceives.HeknewtheVirginformula.ItwasGormleywhoapproachedhisbosswiththeideathatVirginshouldgetinvolvedinpensionsandlifeinsurance.
Initially,though,evenBransonthoughtthiswasgoingtoofar.Attheageof46,hehadneverhadapensioninhislife–andwith
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DOTHEHIPPY,HIPPYSHAKE
49
hismillionswasunlikely
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evertoneedone.Hisfortune,afterall,wasbuiltonrisk-taking.Besides,therewasnothingsexyorfunaboutpensions.
ButGormleyarguedhiscasefromanotherstandpoint.Ahugeamountofthepaymentspeoplemadeforpensionsandlifeinsurancewentonadministrativechargesandoverheads,hepointedout.Fundmanagementand
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investmentcompaniesalsochargedhugecommissionsforhandlingcustomers’money.ButanumberofnewventuresincludingDirectLineandFirstDirecthadshownthatdirectbankingandinsuranceviathetelephoneratherthanhighstreetbrancheswasaviablemodelintheUK.
Therewasanaddedappeal,too.Branson’sbrushwiththe
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stockmarketwhenVirginwaslistedhadreinforcedasuspicionoftheinvestmentcommunity.Fundmanagerswhodecidedwhichsharestobuyandsellwerearrogantandoftenill-informedabouttherealvalueandprioritiesofthecompaniestheytradedin.Gormleyconfirmedthepoint,explainingthatsimplytrackingtheFTSEindexwaslikelytobemorefinanciallyrewardingthaninvestingina
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managedfund.Virgin,then,shouldlaunchanindextrackingPEP(PersonalEquityPlan).
Withintheinvestmentcommunity,indexlinkedfunds,hetoldBranson,hadbeenawell-keptsecretforyears,partlybecausetheyhadbeenshownregularlytooutperforminvestmentfundmanagers.WithanindextrackingPEP,linkedtothe
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performanceofthebestcompaniesonthestockexchange,investorscouldplaythestockmarketwithoutthehassleandhighcommissionsofbrokersorfundmanagers.Itwouldshakeuptheindustry.ThisappealedtoBranson.
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50BUSINESS
THERICHARDBRANSONWAY
Whatatfirstsighthadseemedan
Bransonon
unlikelyventurewasinfactagaping
thelaunchof
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holeinthemarket.Itsimplytookthe
VirginDirect:
Virginangleonthingstoseeitfor
whatitwas.“Ican’twalkpastafatand
“Ican’twalkpasta
complacentbusinesssector
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without
fatandcomplacent
wantingtoshakeitupabit,”Branson
businesssector
said,onthelaunchofVirginDirect.
withoutwantingto
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HewasbankingontheVirginname,
shakeitupabit.”
hesaid,toallaythedistrustthatordi-
narypeoplehavetraditionallyfeltfor
CityandWallStreettypes.
Thewholepointisthat
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RichardBransonisnotabankeroranaccountant–orevena“grownup”intheconventionalsenseoftheterm–andnoraremostofVirginDirect’scustomers.ItisbecausetheyliketothinkthattheyhavesomethingincommonwiththeVirginchairman,thattheVirginnameappeals,andalsobecausetheytrusthimpersonally.
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TheVirginPEPquicklybecamethefastest-sellingproductinthefinancialmarket.Initsfirstyear,VirginDirectsold£400millionofPEPsto75,000investors.Bytheendof1997,200,000peoplehadinvestedintheschemeandmorethan£1billionwasunderVirginDirectmanagement.
In2001VirginDirectjoined
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withvirginmoney.comtocreatetheVirginMoneybrand.SincethenVirginMoneyhasbecomeamajorplayerinthefinancialservicesmarket.
ThecompanywasbroughtbackentirelyunderVirgin’scontrolin2004and,in2006,hadaroundonemillioncustomersand
£2.4billionoffundsunder
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management.
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DOTHEHIPPY,HIPPYSHAKE
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Thefinancialservicesmarketwillneverbequitethesameagain.
DOTHEHIPPY,HIPPYSHAKE
Withhisinformalstyleandnonconformistattitude,RichardBransonhasbeencalleda“hippycapitalist.”Ahippyhe’snot,butBranson’salternativemanagementstyleoffersthefollowinglessons
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tothosewhoaspiretomakemoneynotwar:
◆Don’tbeabreadhead–there’smoretobusinessthanjustmoney.Despitehiswealth,Branson’sownappetiteformaterialthingsissurprisinglymodest.Somehow,too,hepersuadesothersthatmoneyisn’tthemostimportantthing.
◆Dressdowneveryday(not
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justFridays).Branson’sdislikeofwearingasuitandtieislegendary.Hisinformaldresssensestandsoutfromthecrowd,somethingthatworkstohisadvantage.
◆Putpeoplefirst.Bransonisagreatbelieverinpeoplepower.HehasbuilttheVirginbrandonthepremisethatpeople–customersandemployees–comefirst.
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◆Everybodymustgetstoned.Fromthestart,theVirginbusinesswasrunonadeliberatepolicyofmixingbusinesswithpleasure.Fromitsearliestdays,theVirginphilosophyhasbeenworkhard,playhard.
◆Don’timitate,innovate.AnothercommondenominatorofbusinessBranson-styleisthedesiretoshakeupthemarketshe
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enters–andtheestablishmentingeneral.
ThesectorswhereVirginhassetupitsstallarerarelyeverthesameagain.
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52BUSINESS
THERICHARDBRANSONWAY
NOTES
1BenCohen,TheGlobeandMail,May1988.
2Mitchell,Alan,LeadershipbyRichardBranson,AmropInternational,1995.
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3Gerrard,Nicci,“WhydoweloveRichardBranson?”TheObserver,February8,1998.
4Brown,Mick,RichardBranson:TheAuthorizedBiography,4thedn,Headline,1998.
5Mitchell,Alan,LeadershipbyRichardBranson,AmropInternational,1995.
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6Brown,Mick,RichardBranson:TheAuthorizedBiography,4thedn,Headline,1998.
7Davidson,Andrew,“Virginangel:theriseandriseofRichardBranson,”SundayTimesMagazine,May30,1993.
8Davidson,Andrew,“Virginangel:theriseandriseofRichardBranson,”Sunday
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TimesMagazine,May30,1993.
9Jackson,Tim,VirginKing,HarperCollins,London,1994,p51.
10Jackson,
Tim,
VirginKing,HarperCollins,London,1994,p.
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173.
11Rodgers,Paul,‘TheBransonPhenomenon’,Enterprisemagazine,March/April1997.
12“TheMoneyProgramme,”BBC,July1998.
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THREE
HAGGLE:
EVERYTHING’S
NEGOTIABLE
“…Hehadastreettrader’saptitudefornegotiation,
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knowingexactlywhentotalkandwhentostaysilent,whentopresshiscounterpartonapointandwhensimplytowalkaway.”
–TimJackson,authorofVirginKing
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55
OneofRichardBranson’slesswellknowntalentsisarazor-sharpnegotiatingtechnique.Niceguys,sothesayinggoes,finishlastbutnotBranson.Despite–orperhapsbecauseof–hisMrNiceGuyimage,Bransonrarelycomesoutsecondbestinanyofthedealshemakes.Charismaandanaffablecharmbelieacalculating
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businessbrain.
ItisnocoincidencethatofthebusinesspartnerswhohavenegotiatedfavorabletermswithBranson,anumberpreferredtoconductnegotiationsthroughtheirlawyersratherthanstrikeadealwithhimface-to-face.TheseincludeBranson’sowncousinSimonDraperwhowasresponsibleforsigningmanyofVirgin’smusical
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discoveriesincludingCultureClub.
ItisnotthatBransonisintimidating–quitetheopposite;infact,heisamodelofaffability.Butwhatthosewhoknowhimrecognizeisthathiseasygoingstylehidesashrewdbusinessmindandafiercelycompetitivenature.Theseattributesarecomplementedbyanappetite
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forhagglingthatwouldputaTurkishcarpetsalesmantoshame.
Thisiscombinedwithsurprisingpatienceinonenormallysoimpulsive,andtheabilitytopersuadeothersthatwhattheyarebeingofferedisn’tjustveryreasonablebutisactuallythebettersideofthebargain.Often,too,thereisastrongelementofcheekinvolved;
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Bransonhasnoembarrassmentinaskingforfarmorethananyoneelsewoulddare.
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56BUSINESS
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THERICHARDBRANSONWAY
NICEGUYSFINISHFIRST
Askyourselfthis:whenmostentrepreneursendupgivingawaylargerandlargersharesintheirbusinessesinordertosecureadditionalinvestmenttogrow,howdidBransongrowhisempireandendupwithalargershareofthe
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group?In1973,Bransonowned60percentofthemainVirginholdingcompany;by1995,heandhisfamilyowned60percentofamuchexpandedVirginempireworthinexcessof£1billion.
Thathehasachievedthisremarkablefeatisatestamenttohisshrewdnegotiatingskillsandpersuasivetongue.WhatBransonisverygoodatis
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realizingwherethevalueofadealreallyliesandusingotherelementsasbargainingchips.ThefactthatVirginisawebofmainlysmallwithafewnot-so-smallbusinessesisagreatadvantagehere.Herealizedlongagothatofferingalargepercentageofasmallbusinessisinfinitelypreferabletogivingawaysharesinthegroupasawhole.
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Butthe“atomizedempire”isjustonefactor.TimJackson,authoroftheunofficialbiographyofBransonVirginKing,notesacontrastbetweenBranson’sprivatestyleandhisexpansivepublicpersona.Heobserves:“Whentherewasbusinesstobedone,Bransonlovedtohaggle;hehadastreettrader’saptitudefornegotiation,knowingexactlywhentotalkandwhentostay
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silent,whentopresshiscounterpartonapointandwhensimplytowalkaway.”
ThereistoBranson,too,ahighlycompetitivestreak,whichisalwayslookingtogaintheadvantage.Thisisvitalforanyentrepreneurofseriousambitionsandshouldbecultivatedbytheup-and-comingtycoon.InBranson’scase,itisaccentuatedbyanumberofother
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characteristics.Mostimportantoftheseisanc03.indd56
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HAGGLE:EVERYTHING’SNEGOTIABLE
57
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easycharmthatlullsallbutthemosthardenedofnegotiatorsintodroppingtheirguard.
Branson’sgreatskillasanegotiatorisoneofthosehappy(forhim)accidentsofbirth.Natureinallitswisdomsawfittobestowamarkettrader’smindonamiddle-classandseeminglyeasygoingsonofabarrister.NotonlydoesBranson
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possessthewherewithaltostrikeameandeal,itispartofhispsyche.WereEnglishpublicschoolslessinterestedincompet-ingatcricketandrugbyandrather
“Whenthere
moreininstillingcommercialnous
wasbusinessto
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intheirpupils,theymightconsider
bedone,Branson
inter-schoolnegotiatingmatches.In
thatunlikelyevent,RichardBranson
lovedtohaggle;
mighthavecaptainedhis
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school.
hehadastreet
trader’saptitudefor
OnestoryillustratesBranson’smis-
negotiation.”
chievousdelightinnegotiating.
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Intheearlydaysofthemailorder
recordbusiness,amantelephonedtoofferthecompanysomebootleggedJimiHendrixrecords.Thecallerwastoldtodropbyatthecompany’sofficesthenextdaytodiscussthedealwithaMrZimmerman.Whenthemanturnedupat10a.m.itwastobetoldbyanearnestRichardBranson
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thatMrZimmermanwasatacaféjustaroundthecorner.
WhenthemanreturnedsometimelatertoreportthatMrZimmermanhadnotturnedup,Bransonexpressedsurpriseandinnocentlyaskedwhatitwashewantedtoseehimabout.Themanexplainedthathewasgoingtosellhimsomerecordsfor
£1apiece.“I’llgiveyou50p
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each,”theartfulBransonsaid,andadealwasstruck.Withindays,theyweresoldtodevotedJimiHendrixfansbymailorderat£3each.
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58BUSINESS
THERICHARDBRANSONWAY
CHEEKOFTHEDEVIL
WheneverheisnegotiatingBransonexpectstohaggle,alwaysputtinginalower–andsometimessignificantlylower–offer.
Onlargepurchases–country
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mansions,aircraft,aCaribbeanisland–thatcanmakeaverybigdifference.Funnilyenough,manybusinesspeople,especiallythosewhohavespenttheirworkingliveswithinlargecorporations,don’texpecttocomeupagainstamarkettradermentality,amanwhowillhaggleforthesheerpleasureofit.
Branson’sbrilliant
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negotiatingskillsalsopartlyexplainwhyVirginhasdonesowellfromjointventuresandotherpartnershiparrangements.Hischeekofthedevilnegotiatingskillhasbecomeahallmarkofthecompany.“No,”“never,”and“impossible”arenotwordsintheBransonbusinessdictionary.
“Whenthecompanywassmallandhewasstriking
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agreementsonhisown,Bransonhadenoughcheektodemandfarmorethanheeverhopedtowin–butalsoenoughpatiencetoargueadealpointbytinypointiftheadversarysodemanded,”notesTimJackson.“Hewashighlyskilfulathidingbehindothers,tellingthosehewasnegotiatingwiththatitwastheobjectionsofhislawyersorhiscolleagues,ratherthanhisown
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misgivings,thatmadehimunabletoagreetoaproposal.”
Onmanyoccasions,too,Branson’sabilitytocajoleothersintodoingwhathewantshasenabledhimtomakethingshappenthatmightotherwisehavebeenimpossible.Bransonisespeciallygoodatcuttingthroughredtape.Duringthepreparationsforoneofhis
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hotairballoonrecordattempts,forexample,Bransonwasinformedthatavitaltestontheprototypeballooncouldnotbecarriedoutbecausetheaerospacecompanythatownedthec03.indd58
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HAGGLE:EVERYTHING’SNEGOTIABLE
59
testchamberhadbookeditouttoothercustomerseverydayforthenexttwoyears.Bransondemandedthenameandtelephonenumberofthechairmanofthecompany.Twohourslaterhecalledbacktosaythatnotonlywas
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thechambernowimmediatelyavailable,butthatasagoodwillgesture,thenormalchargeof£25,000wouldbewaived.
TALKSOFTLYANDCARRYABIGSTICK
Forallhisbonhomie,therearethosewhosaythatRichardBransonisn’tnearlysonicetodobusinesswithasyoumightthink.
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Thisisacuriousviewofoneofthemostsuccessfulbusinessmenthiscentury.Itwouldbenaïvetothinkotherwise.AnyoneconsideringgoingintobusinesswithVirginshouldaskthemselvesafewsimple–andratherobvious–questions.
Forexample:isthisthesameRichardBransonwhoafterthreedecadesremainsthe
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unchallengedleaderofoneofthebestknowncompaniesintheworld–andstillownsabout60percentoftheequity?IsthisthesameRichardBransonwhohastakenmarketsharefromsomeofthemostaggressivecompaniesintheworld?
Thepointtounderstandhereisthatthisisnopussycatwe’retalkingabout.Itwouldbefoolishtothinkotherwise.
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Youdon’tgettobewhereBransoniswithoutahardedgetoyourdealmaking.
WhenRandolphFields,ayounglawyer,broughtBransontheideaforVirginAtlanticAirways,theoriginalagreementwasthatbothmenwouldownhalftheairline.Duringthenegotiationsbeforetheairline’slaunch,however,BransonforcedFieldsto
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accepta25percentshare;laterthesameyear,Fieldswasforcedc03.indd59
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60BUSINESS
THERICHARDBRANSON
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WAY
tostepdownaschairmanofVirginAtlantic.AyearlaterBransonboughtoutField’sstakefor£1million.1
Bransonhasawell-developedsenseofwherethepowerliesinabargainingsituation.Onoccasion,hehasbeenknowntopresshometheadvantagewhenheknowsheholdsthebetterhand.
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That,astheysay,isbusiness.AnyonewhothinksVirginisacharityshouldthinkagain.
ACTINGONGOODADVICE
WhileBransonhimselfseemstofloatfromonebusinessadventuretoanother,hereliesontheadviceofotherswiththeirfeetfirmlyontheground.BehindBranson’shappy-go-
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luckypublicimagelurksnotjustacalculatingbusinessman,butonewhoknowsverywellthevalueofgoodprofessionaladvisers.
“I’mnotgoodwithfigures,”hesays.“Ifailedmyelementarymathsexam.”2
Hemaynotbeanaccountant,buthe
Anyonewhothinks
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hasalwayssurroundedhimselfwith
Virginisacharity
peoplewhocandothesums.Ever
sincehisscrapewiththeBritishtax
shouldthinkagain.
authoritiesintheearly1970s,
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which
Bransonmaynot
nearlylandedhiminjail,hehas
beanaccountant,
reliedonhavingtop-notchaccount-
buthehasalways
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ants,lawyersandmerchantbankers
surroundedhimself
helpinghimdotthe“i”sandcrossthe
“t”sofhisdeals.
withpeoplewho
candothesums.
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61
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WithintheVirginGroup,hehasalsoalwaysmadesurethattherewasateamofhard-nosedexecutivestofollowthroughandtieupanylooseends.Thesehaveincludedlong-termBransonaideDavidAbbott,anaccountantbytraining,andDonCruikshank,theformerMcKinsey&Co.consultantwhocameintogetVirginreadyforprivatizationandwentontoheadtheLondon
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StockExchange.
SomepeoplehaveevengonesofarastosuggestthatBransonismoreinthralltohisadvisersthanevenVirgininsidersrealize.
AnumberofbusinesspartnershavebeenirritatedbyBranson’srefusaltobetieddowninacontract,andhisinfuriatinghabitofrenegotiatingterms.
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OnedisgruntledbusinessmanwentsofarastoclaimthatmuchoftheVirginphenomenonistheproductofa“magnificentmanipulation”by“animpenetrableinnersanctumatthecentreoftheVirginempire.”
Ifso,itwouldhavetobearemarkableonethatcouldpullthestringsofsomeoneaswilfulasRichardBranson.
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SILVERLININGS
ButthereisanotheraspecttoBransonthedealmaker.Whenitcomestosetupcosts,mostcannyentrepreneursseektocoverthedownsiderisk.Branson,ontheotherhand,wantstocovertheupside,too.Inhismind,everycloudcouldhaveasilver-platedlining.
In1984,forexample,Virgin
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wasinthethroesofsettingupVirginAtlantic.Thefirsttaskwastoacquireanaircraft.Boeinghadc03.indd61
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62BUSINESS
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THERICHARDBRANSONWAY
aslightlyused747standingidleintheArizonadesert.Bransonwasquitesurethathedidn’twanttoowntheaircraftoutright(he’dseenwhathappenedtoFreddieLakerwhenhetriedtobuyaircraft)butnordidhewanttoincurheavypenaltiesiftheairlinedidn’tgetofftheground.Thedealthatwasput
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togetherbyVirgin’slawyerswasnotastraightforwardone.3
ThejumbowouldbeboughtfromBoeingbyBarclaysBank,whichwouldthenbeabletoclaimthetaxallowancesfortheaircraft’sdepreciation.BarclayswouldthenleaseittoasubsidiaryoftheChemicalbankofNewYork,whichinturnwouldleaseittoVirginAtlantic.
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New,theaircraftwouldhavecostaround$100million,butthepricenegotiatedbyBranson’spartnerRandolphFieldswas$27.8million.Byallaccountsitwasagooddeal,especiallysinceBoeingpromisedtobuyitbackfor$25millionafterayearortwoifVirginwanted.ButnotgoodenoughfortheVirginchairman.
Bransonwasadamantthat
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Virginshouldbeabletobenefitfromtheupsideifaircraftpricesshouldrise.Athisinsistence,itwasagreedthatBoeingwouldhavetopaythemarketpriceforitifVirgindecidedtosell.
NOTES
1Jackson,
Tim,
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VirginKing,HarperCollins,London,1994,p.
16.
2
Branson,Richard,“MoneyProgramme,”BBC,July1998.
3Jackson,
Tim,
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VirginKing,HarperCollins,London,1994.`
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HAGGLE:EVERYTHING’S
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NEGOTIABLE
63
HAGGLE:EVERYTHING’SNEGOTIABLE
OneofRichardBranson’slesswellknowntalentsisarazor-sharpnegotiatingtechnique.Despite–orperhapsbecauseof
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–hisMrNiceGuyimage,Bransonrarelycomesoutsecondbestinanyofthedealshemakes.Charismaandanaffablecharmbelieacalculatingbusinessbrain.ThelessonsfromtheBransonschoolofnegotiatingare:
◆Niceguysfinishfirst.Branson’sshrewdnegotiatingskillsandpersuasivetongueareaccentuatedbyaneasycharmthatlullsallbutthe
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mosthardenedofnegotiatorsintodroppingtheirguard.
◆Nevertakenoforananswer.Branson’scheekofthedevilnegotiatingskillhasbecomeahallmarkofthecompany.“No,”“never,”and“impossible”arenotwordsintheBransonbusinessdictionary.
◆Talksoftlyandcarryabigstick.Forallhisbonhomie,
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therearethosewhosaythatRichardBransonisn’tnearlysonicetodobusinesswithasyoumightthink.Thisisacuriousviewofoneofthemostsuccessfulbusinessmenthiscentury.Itwouldbenaïvetothinkotherwise.
◆Getgoodprofessionaladvice.BehindBranson’shappy-go-luckypublicimagelurksnotjustacalculatingbusinessman,but
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onewhoknowsverywellthevalueofgoodprofessionaladvisers.
◆
Alwayscovertheupside.Whenitcomestosetupcosts,mostcannyentrepreneursseektocoverthedownsiderisk.Branson,ontheotherhand,wantstocovertheupside,too.Inhismind,everycloudcouldhavea
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silver-platedlining.
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26/01/200712:53:25
FOUR
MAKEWORKFUN
“Hecaptivatesthepublicandemployeesbytheunexpectedprospectofmakingthegreyworldofworksparklewithfunandexcitement.”
–AlanMitchell,from
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LeadershipbyRichard
Branson
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MAKEWORKFUN
67
Business,inRichardBranson’sview,shouldbefun.ThisisanimportantfactorbothinBranson’sownappetiteforworkandthe
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successofhisventures.Creatinganexcitingworkcultureisthebestwaytomotivateandretaingoodpeople;italsomeansyoudon’thavetopaythemasmuch.Thisisausefulasset,especiallyifyoudon’thaveareputationasabrilliantinventor,ormanagementvisionary,tofallbackon.It’sallverywellbeingclever,butallworkandnoplaymakesJackadullboy.Not
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Richard.
Unlikethecomputerwhiz-kidsBillGatesandSteveJobs,Bransonhasneverinventedanyproductofarevolutionarynature.
NordoeshehavethecorporatekudosofaJackWelch,theformerCEOofGE,creditedwithturningthecompanyaround.
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Branson’sachievementisactuallymoredifficulttoexplain.Alltheindustrieshehassucceededinareconventionaloneswithlittleincommonexceptthattheyarematureanddominatedbylargeplayers.SowhatisitthatRichardBransonknowsaboutbusinessthatotherpeoplewhohavebeenintheseconventionalindustriesforyearshavefailedtograsp?Moretothepoint,
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whatdoesBransondothattheydonot?
TheanswerisBransoninspirespeople.Becauseheinspiresthem,hehastheabilitytomotivatethosewhoworkwithhimandpushthemtothelimit.Hepossessesaremarkableabilitytoenableotherstoachievewhattheydidn’tknowtheywerecapableof.WhatBransonisreallygoodatiscreating
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energyaroundagoal–beitabusinessventureoraworldrecordattempt.Heexudesconfidenceandabeliefthatnomountainistoohightoc04.indd67
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THERICHARDBRANSONWAY
climb.Curiouslyenough,peopleseemtolikethatevenmorethanmoney(forawhileanyway).
AREWEHAVINGFUNYET?
ThroughouthisbusinesslifeBransonhasmanagedtoportrayworkasasocial
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activity.GoingtotheofficeatVirginisn’tthedrudgerythatitcanbeatothercompanies,oratleast,that’swhatBransonwantshispeopletobelieveandclearlybelieveshimself.“Igetthebestpeople,Iaskquestions,andthenIsay:
‘let’shavesomefun’,”heexplains.1
Intheearlydays,lowwages
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andrun-downworkenvironmentswerecompensatedforbyregularwildpartiesandacarnivalatmosphere.Eventoday,thelinebetweenworkinglifeandsociallifeishardtodrawatthecompany.Virginstaffworkhardandplayhard.
Thereismethodinthemadness.WhenyoublurthedividebetweenworkandplayasBransondoes,you
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begintobreakdownthedividebetweenwhatmatterstopeopleintheirprivatelivesandwhathappensatwork.Peopledon’tresentworkinglonghoursiftheybelievethattheyareachievingsomethingforthemselvesandthepeopletheycareabout.
AnotherimportantaspectoftheVirgincultureisitscheekysenseofhumor–
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somethingthatextendstoitsbrandvalues.
Bransonhimselfhasareputationforplayingschoolboypranksofthenot-so-subtlekind.Storiesofhisanticsarelegion.
Ononeoccasion,sothestorygoes,hethoughtitwouldbeentertainingtoplayatrickononeofhisseniormanagersandclosestc04.indd68
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MAKEWORKFUN
69
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adviserswhowasawayforafewdays.
Bransonon
Theplanwastosneakintotheman-
ager’shomeatnightandremoveall
theoffice
hisfurnitureandpersonal
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belong-
environment:
ingssothatwhenhearrivedhomehe
“Igetthebest
wouldthinkhe’dbeenburgled.
people,Iask
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questions,andthen
WhatBransondidn’tknow,however,
wasthathisplanhadbeentumbled,
Isay:‘let’shave
andarrangementsmadetoturnthe
somefun’.”
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jokeonhim.Onhisarrivalatthead-
dress,hewasmetbythepolice,who
arrestedtheprotestingVirginbossandlockedhimupforthenight.Inthemorning,theentireVirginstaffwentdowntothepolicestationtobailhimout.Hisreleasewasgreetedwithloudapplause.
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Branson’ssenseofhumorhaslandedhimintroubleonotheroccasions,too.Oneofhistrademarkpartytricksistoseizeholdofglamorousguestsandturnthemupsidedown.IvanaTrump,formerwifeoftheAmericanbillionairebusinessmanDonaldTrump,stillhasn’tforgivenBransonforhangingherupsidedownoveraswimmingpoolinfrontofhundredsofguestsatablack-
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tieparty.
Thestoryofhis1992meetingwiththelateSirJamesGoldsmithshowsthathejustcan’thelphimselfsometimes.TwomoredifferenttycoonsthanBransonandGoldsmithwouldbehardtoimagine.Bransonthehippy,whobuilthisempirebygrowinghisownbusinesses,meetsGoldsmith,thecorporate
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raiderandtakeoverbaron.InvitedtoGoldsmith’sretreatinMexico,Bransonpushedthebillionaireintotheswimmingpoolonthefirstc04.indd69
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THERICHARDBRANSONWAY
morning–afterpromisingnotto–andwaspromptlyaskedtoleave.JoanBranson’sonlycommentwas“ThankGod.”2
ThestoryshowsBranson’srecklessdisregardforthebusinessestablishment.(Othershaveobservedthatitwasanoutstandingexample
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ofmanmanagement.)
LET’EMLOOSE
Hehasalwaysbeenpreparedtohirebrightyoungpeoplewithnoproventrackrecord,andletthemlooseonprojects.IntheearlydaysofVirginMusic,therecordlabel,forexample,Bransonwashappytotakepeoplewhohadlittleformalexperienceoftheindustry
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buthadarealloveofmusicandpassionformakingrecords.Unsupervised,theywouldputhugeeffortandenergyintotheirwork–tojustifythecompany’sbeliefinthem.Itwascommoninthosedaysforstaffatthecompanytoturndownjoboffersfromothercompaniesthatwouldhavedoubledtheirsalaries.Thereason?TheyenjoyedworkingatVirginsomuch.
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Empowerment–delegatingdecision-makingauthoritytostafflowerdowntheorganization–becamefashionablewithmanagementgurusinthe1980s;ithasalwaysbeeninvogueatVirgin.
Fromtheverybeginning,Bransonhassurroundedhimselfwithtalentedpeopleandgiventhemthefreedomtobecreative.
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Timeandtimeagain,theyhaverewardedhisconfidencewithdazzlingresults.
TaketheexampleofSimonDraper,Branson’sSouthAfricancousinandlong-timeheadoftheVirginrecordlabel.DraperitwaswhospottedmanyofVirgin’sgreatestmusicaldiscoveries,includingMikeOldfield,TangerineDreamandCultureClub.
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Yetwhenhejoinedthecompanyhehadnoformal
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trainingorexperience,justhisenthusiasmformusictoguidehim.Onoccasions,too,DraperhadtotellBransonwhyacertainartistwouldnotfitwiththelabel’savantegardeimage.Formanyyears,VirginMusic,duelargelytoDraper’sfreedomtosigntheartistshewanted,bankrolledtheentireVirginempire.
Asimilarapproachcascades
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downtheorganization,withVirginemployeestypicallyhavingfarmorediscretionarypowerthanstaffinothercompaniesatthesamelevel.VirginAtlanticcabincrewaremuchmorelikelytousetheirinitiativethanthosefromcertainotherairlineswhohavetofollowcompanydictattotheletter.
Bransonusesthephysicalenvironmentatworkto
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reinforcetheVirginculture.Thecompaniesthatmakeupthegrouparelocatedinbuildings–bighousesratherthanofficeblocks–thatresonatewithinformality.Theyhavebeenlikenedto“hippyhideouts.”3
Bransonalsousesanunorthodox“loose”organizationalstructuretogiveemployeesfreerein.Virginismadeupofacluster
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ofsmallcompaniesthatoperateindependentlyofeachother.
Thiscreatesmorefreedomformaneuver.Employeesoftenworkharderinsmallentrepreneurialgroupswherethewholeheartedcontributionofeveryoneisvitaltothesuccessofall.ThereisnoroomforcoastingorpassengersatVirgin.
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Becausetheyareinfriendlycompetitionwithotherpartsofthegrouptoo,thedifferentVirginbusinessesareencouragedtobehaveinamoreentrepreneurialmanner.Thisalsorestrictsinterferencefromthecentre,makingitmoredifficultforseniorVirginexecutives(apartfromBranson)tomeddle.Inthiswayc04.indd71
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72BUSINESS
THERICHARDBRANSONWAY
hehascreatedtheclassic“divideandrule”model,whichallowshimtogivehispeopletheirheadsbutmaintainabsolutecontrolwhilstalsopreservinghiscult-likestatus.
CALLMERICHARD
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TotheaverageVirginemployee,Branson,thecompany’schairmanandmajorshareholder,issimplyRichard.Thesecretwithpeople,hesays,istopraiseratherthancriticize(somethinghesaysappliestobringingupchildren,too:“Childrenandcompaniesflourishunderpraise”4).
IntheearlydaysofVirgin,whenemployeeswantedto
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formatradesunion,Bransonissaidtohavebeentrulyhurt.Hewantedallhisemployeestobeabletodiscussproblemswithhimpersonally.Aboveall,hewantspeopletotrusthim.
VisitorstohisofficeinHollandParkhaveremarkedthatheisuncommonlycourteoustothepeoplewhoworkwithhim.Heworkshisstaffhard,butunlikemany
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othercompanychairmenhehasresistedthetemptationtoorderhissecretariesandassistantsaroundasiftheywereservants.Heisfamouslyapproachable,andpeoplecallinghisofficeareaslikelytofindthemselvestalkingdirectlytoBransonastheyareto
asecretaryorassistant.
Branson
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onpeople
AsSimonLester,formermanag-
management:
ingdirectorofCottEurope,the
“Childrenand
companythatprovidedtheoriginal
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formulaandexpertiseforVirgin
companiesflourish
Cola,explains:“Heisreallyquitean
underpraise.”
extraordinaryfellow.Hecontinually
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surprisesyouwithhisbehavior.Whenhefirstcalled,hetelephonedthroughdirectly:nosecretary;no
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normalcorporateblockages,whichimmediatelyknocksyouoffyourstrideandmakesyouthink,howunusual,howdifferent.
“Andwhenyoumeethim,youexpecttomeetthisunbelievable,powerfulmoderndayicon,andhe’sjustthemostcharmingindividualinaveryordinaryway.Hestuttersafairamount.Heisnotapower
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monger.Heisjustareallyniceguy.Andunder-neathyouknowheisoneofthemostdeterminedandenergeticpeoplethatyoucouldpossiblywishtomeet.”
ItishislackoffrontthathasenabledBranson,thepublicschoolboyofprivilegedupbringing,tocourttheadorationofhisstaffaswellasthegeneralpublic.Hispopularitycrossesclass
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barriers.Butitgoesdeeperthanthat.PeopleseeinBransonabusinessleaderwhoismotivatedbyahigherpurpose;someonewhoembodiesasetofvaluesandispreparedtostandupandbecounted.ThisisanimageBransoncultivatesasitprovidestheidealcounterbalancetothefrivolousfunandgames.
NOPAIN,NOGAIN
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Partiesandpranksarenosubstituteforhardwork,ofcourse.
WhattheydoachieveistosetthemoodandcultureofVirgin.
Theothersideoftheequationiscreatingasenseofchallenge.Byinspiringhisstaff,Bransongetsexceptionalperformancefromthem,withsalesand
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profitlevelsfaraboveindustrystandards.
Here,thewaytheVirginempireisstructuredisimportant.
Bransonexplains:“Whenacompanygetstoacertainsize,insteadoflettingitgrowbiggerandbiggerandputtingitintoc04.indd73
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74BUSINESS
THERICHARDBRANSONWAY
biggerandbiggeroffices,Iwilltake,say,theassistantmarketingmanager,theassistantmanagingdirector,theassistantsalesmanager,
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andI’llsay:you’renowthemanagerofanewcompany.ThiswasthecasewithVirginrecordswhichwaseventuallydividedintofivecompanies.”5
ThispolicyofpromotingtalentedpeoplefromwithinencouragesVirginstafftogivetheirallinthehopethattheywillbenoticedbythecompany’schairmanandgivenanopportunityreallyto
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shine.ButanotheranecdoteshowsanothersidetoBranson:themastermotivator,pushinghisemployeestotheirlimits.
Bransonlikestoattempttheimpossible.OnoneoccasionhetelephonedthemarketingdirectorofVirginAtlanticandaskedhimtoplaceanadintheLondonEveningStandard,onlytobetoldthatitwastoolate,andthatthey
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hadmissedthenewspaper’scopydeadlines.Bransoninsistedthathismarketingmanagerdohisbestallthesame.Theskepticalemployeespenttheentiremorningonthetelephone.Throughasuperhumaneffortonallsides,anaddidjustmakethelasteditionoftheStandard.Onhearingthis,Bransonthankedhismarketingmanagerforhisefforts;buttherewasan
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unmistakablenoteoftriumphinhisvoiceashedidso.6
Themessageisclear.Bransonwantsandexpectsthepeoplearoundhimtodotheirbesttoachievewhatevergoalshesets,ratherthanargueoverwhethersomethingcanorcannotbedone.Butthen,doingtheimpossibleispartoftheVirginculture,somethingthatisreinforcedby
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Branson’sownrecord-breakingfeatsandderring-doinspeedboatsandhotairballoons.
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75
THEMAGICALMYSTERYTOUR
PartoftheappealofVirginasanemployerandasaconsumerbrandisthepromiseofanadventuretobehad.Everythingaboutitslarger-than-lifefounderresonateswiththe“Boy’sOwn”
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heroesfromchildren’sstories.PartBigglesandpartpirate,Bransonbristleswithfunandadventure–somethinghehasbroughttoeveryindustryVirginhasentered.
Thereis,too,anauraofexcitementaboutdoingsomethingnew.“WhatIlikemostofallistolearn,”Bransonsays.“WhenIfeelthatI’velearntwhatthereis
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toknowabouttelecommunica-tions,orairlines,orcosmetics–wellyounameit–thenImoveontosomethingelse.It’slikebeingatuniversity,whichIneverwentto,andtakingcrashcourses.”7
ThewholeVirginphenomenon,forhim,isamagicalmysterytour.It’sajourneythathasalreadylasted35years.IfVirgin
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wentbankrupt–“anditdidnearlygobankruptduringthedirtytrickstime,andthat’swhyIhadtoselltherecordcompany”hesays
–hewouldn’tmindsomuch.“Iwouldpackupmybagandtakethefamilyonanadventure.SouthAmerica.I’veneverbeentoSouthAmerica.Itwouldbefun.”
Butasmoreandmorepeople
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getonthebus,thepressureonthedrivertotakethemsomewheredifferent–somewherefun,butalsosomewhereupliftingandunspoiledbytheexcessesofcapitalism–increases.
Todate,BransonhaspersuadedcustomersandemployeestoboardtheVirgintourbussimplybecauseitofferedanadven-c04.indd75
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76BUSINESS
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turethatwassomethingdifferenttowhatthesuitswereoffering.
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Inthefuturehemayfindthatpassengersexpecthimtohaveadestinationinmind–akinder,morecaringversionofwhatbusinessisfor,perhaps.Thislegacyseemstooccupyhimmorethanitusedto.
Increasingly,heseemstosensethatsomesortofexplanationofwheretheadventuremightleadisexpectedofhim.Thisis
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startingtoshowinhisrhetoric.ThegreatquestionforBransoniswherenowforhisvisionofbusiness?WillVirginsimplycrumbletodustwhenhevacatesthepremises,orhashebuiltalastingmonumenttoanewformofcapitalism?
Thebrashadventurerisbeingaskedtoputhistelescopetohisgoodeyeandtelltheworldwhatheseesjustover
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thehorizon.
Bransonisstartingtothinkaboutwhatitallmeans,andhisplaceinhistory.
Heisanadmirerofwhatheregardsasotherlike-mindedbusinesses.HedetectsakindredspiritatthefamouslyeccentricSouthwestAirlines.Asherecentlyexplained:“Southwestemployeeshaveboughtintothecompanyfor
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theprinciplesforwhichtheairlinestands.Apieceoflegislationthatadvocateshigherlandingfees,forexample,isn’tseenjustasanaffronttotheirprofitability;it’salsoanaffronttotheiridealism.Theyarefirmlyentrenchedintheideathatprofitabilityistheprecursortojobsecurity,shareholderreturn,andinvestmentinthecommunity.Theyareinthebusinesstomakea
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difference.Thisiswhatabrandshouldstandfor.”8
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MAKEWORKFUN
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MAKEWORKFUN
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Business,inRichardBranson’sview,shouldbefun.Creatinganexcitingworkcultureisthebestwaytomotivateandretaingoodpeople;italsomeansyoudon’thavetopaythemasmuch.TheBransontechniqueformanagingpeopleprovidesthefollowinglessons:
◆
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Itpaystoplay.GoingtotheofficeatVirginisn’tthedrudgerythatitcanbeatothercompanies,oratleastthat’swhatBransonwantshispeopletobelieveandclearlybelieveshimself.
◆
Letemployeesloose.Bransonhasalwayssurroundedhimselfwithtalentedpeopleandgiven
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themthefreedomtobecreative.Timeandtimeagain,theyhaverewardedhisconfidencewithdazzlingresults.
◆
Encourageinformality–stayonfirstnameterms.TotheaverageVirginemployee,Branson,thecompany’schairmanandmajorshareholder,issimply
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“Richard.”
◆
Enthusiasmisinfectious.Byinspiringhisstaff,Bransongetsexceptionalperformancefromthem,withsalesandprofitlevelsfaraboveindustrystandards.
◆
Makebusinessanadventure.
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PartoftheappealofVirginasanemployerandasaconsumerbrandisthepromiseofanadventuretobehad.
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78BUSINESS
THERICHARDBRANSONWAY
NOTES
1
Gerrard,Nicci,“WhydoweloveRichardBranson?”TheObserver,February8,1998.
2
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Davidson,Andrew,“VirginAngel:TheriseandriseofRichardBranson,”SundayTimesMagazine,May30,1993.
3
Kaye,MarkandYe,Danzhao,“BehindVirgin’ssuccess:howRichardBransonmotivatespeople,”workingpaper.
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4Mitchell,
Alan,
LeadershipbyRichardBranson,AmropInternational,1995.
5Interview
in
Inc.magazine,November1987.
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6Jackson,
Tim,
VirginKing,HarperCollins,London,1994.
7
Gerrard,Nicci,‘WhydoweloveRichardBranson?’TheObserver,February8,1998.
8
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Branson,Richard,“TheMoneyProgramme,”BBC,July1998.
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DORIGHTBYYOUR
BRAND
“Ibelievethereisalmostnolimittowhatabrandcando,butonlyifusedproperly.”
–RichardBranson
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81
OneofthemostfrequentlyaskedquestionsaboutVirginishowfarthebrandcanstretch.SomecommentatorsbelievethatbyputtingtheVirginnameonsuchawiderangeofproductsandservices,Bransonrisksseriouslydilutingthebrand.
Branson’sanswertothiscriticismisthataslongas
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thebrand’sintegrityisnotcompromised,thenitisinfinitelyelastic.
JusthowpowerfultheVirginbrandiswasshownbya1997survey.Itfoundthat96%ofBritishconsumershaveheardofVirginand96%cancorrectlynameRichardBransonasitsfounder.
“VirginisauniquephenomenonontheBritish
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businessscene,”
notesonecommentator.“Ithas,essentially,oneprincipalasset,andanintangibleoneatthat–itsname.FromfinancialservicesthroughairlinesandrailwaystoentertainmentMegastoresandsoftdrinks,clothesandevenbridalsalons,thebrandisinstantlyrecognizabletotheconsumer,conjuringupanimageofgoodquality,
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cheapprices,andatrendyhipnessthatfewotherscanmatch.”1
Bransonintendstokeepitthatway.ButheacknowledgesthattheVirginstrategywouldnotworkforanybrand;itisbasedonwhathecalls“reputationalbranding”ratherthantraditionalproductandservicebranding.
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82BUSINESS
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HAVEBRAND,WILL
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TRAVEL
Originallyaimedatyoungerpeople,todayVirginhasawidertargetaudience.AsBransonhasmaturedsotoohasthebrand’sappeal.“Fouryearsagowecrossedoverintoappealingtotheirparents,”hesays.“Butwehavetobecarefulwedon’tlosethekids.I’dlikepeopletofeelmostoftheirneedsinlifecanbefilledbyVirgin.
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Theabsolutelycriticalthingiswemustneverletthemdown.”2
Bythemid1990s,Virginseemedtobeeverywhere.SoubiquitoushadthebrandbecomethathardlyadayseemedtogobywithoutseeingagrinningRichardBransonlaunchingsomenewVirginproductorservice.ThefamousflyingVlogowasembla-zonedonaircraft,
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megastoreandcinemafronts,andwasabouttomakeitsdebutoncolacans.
Theactivitypromptedsometoquestionthecompany’sstrategy.
Thosewhounderstoodwhathewasabout,however,recognizedthatwhatBransonhadcreatedwasanentirelynewkindofbrandproposition.JohnMurphy,
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chairmanofthefamousbrandconsultancyInterbrand,forexample,observedthat:“Unlesstheypoisonsomeoneorstartapplyingthebrandtoinappropriateproductssuchaspensionfundsorphotocopiers,IdoubtwhethertheVirginbrandwilleverbediluted.”LittledidMurphyknowthatby1996,VirginDirectwouldbeofferingfinancialservices
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–includingpensions.
STRETCHINGAPOINT
BransoniscriticalofthetraditionalWesternviewofbranding.
HelikensVirgin’sapproachtothatofsomeJapanesecompa-c05.indd82
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DORIGHTBYYOURBRAND
83
nies.ReferringtothedecisionbyMarsnottouseitsfamousbrandnameonpetfoodproducts,hesays:“WhatIcall‘MarsSyndrome’infectseverymarketingdepartmentandadvertisingagencyinthecountry.Theythinkthat
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brandsonlyrelatetoproductsandthatthereisalimitedamountofstretchthatispossible.Theyseemtohaveforgottenthatno-onehasaproblemplayingaYamahapiano,havingriddenaYamahamotorbikethatday,orlisteningtoaMitsubishistereoinaMitsubishicar,drivingpastaMitsubishibank.”
“Theideaofbrandscrossing
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corporatestructuresandproductareas…hasfounditsmodernmanifestationintheJapanesemanagementstructure‘keiretsu’,wheredifferentbusinessactasafamilyunderonebrandname.”
Thepointforwould-bebrand-
builderstorealizeisthatthemost
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importantaspectoftheVirginbrand
Bransononbrand
propositionisitscredibilityamong
stretching:
itsmarketsegment.Justasexisting
“No-onehasa
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Virginproductsandservicesprovide
problemplaying
credibilityfornewofferings,the
relationshipbetweentheVirginfam-
aYamahapiano,
ilycouldalsoworkin
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reverse.Ifthe
havingriddena
imageweretobecometarnishedby
Yamahamotorbike
associationwithashoddyproductor
thatday,or
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poorserviceoranofferingthatwasa
listeningtoa
rip-off,thenthestandingofthewider
Virginbrandcouldbedamaged.
Mitsubishistereo
inaMitsubishi
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Bransonisnotafraidtostepinatake
car,drivingpasta
actiontoprotectthebrandinsuch
Mitsubishibank.”
acase.TheVirginnamewascaught
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84BUSINESS
THERICHARDBRANSONWAY
upinamis-sellingcontroversywhenLondonEnergyanditsonlinepartner
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VirginEnergywerefinedbytheenergyregulatorOfgem.VirginmovedtoprotectitsbrandandtheresultisthatenergyisnotsoldviaVirginHomeEnergyonlineanylonger.
EquallytheforayintotheUKrailwaymarkethasdoneVirgin’sbrandnofavors.AsrecentlyasNovember2006therewerestoriesinthemediaofpassengersona
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VirginPendolinotrainbeingaskediftheyhadanynutsandboltsonthemtohelpfixafaultywindscreenwiper.
TimewilltellifthecriticismVirginTrainshasattractedwilldolastingdamagetotheVirginumbrellabrand.Withrecentimprovementintrainservices,though,itseemsunlikely.
KEEPINGTHEFAITH
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Forallhisjapes,RichardBransontakesthereputationoftheVirginbrandextremelyseriously.“Yourbrandnameisonlyasgoodasyourreputation,”hesays.“Oursisoftremendousvalue.”
WhatisperhapsuniqueabouttheVirginbrandisthatitis,asoneofthecompany’sslogansputsit,“alifetimerelationship.”
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WillWhitehorn,directorofcorporateaffairsatVirginmanagementandlong-timecolleagueofBranson,observes:“AtVirginweknowwhatthebrandmeansandwhenweputourbrandnameonsomething,we’remakingapromise.It’sapromisewe’vealwayskeptandalwayswill.It’sharderworkkeepingpromisesthanmakingthem,butthereisnosecretformula.Virginsticks
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toitsprinciplesandkeepsitspromises.”
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85
BransonhasacknowledgedtimeandtimeagainthatthemostvitalassetVirginhasisitsreputation.PuttheVirginnameonanyproductthatdoesn’tcomeuptoscratchandthewholecompanyisbroughtintodisrepute.“Ourcustomerstrustus,”hesays.
TheBransonphilosophy,then,is:lookafteryourbrand
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anditwilllast.Thereis,however,andalwayshasbeenatensionattheheartoftheVirginbrand.ForallhisunquestionedemphasisontheintegrityoftheVirginname,oneofBranson’spersonalcharacteristics–thathasbecomeastrandofwhatVirginstandsfor
–isacertainrestlessness.Hehasaninsatiabledesiretotakerisksandexplorenew
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areas.ItisinhisbloodthatBransonhastobeconstantlyexpandingthebordersoftheempire.Yetitisvitaltodosowithoutdamagingthegoodnameofthecompany.Thiscreatessomethingofadilemma.ItisonethatBransoniswellawareof.
“Weareexpandingandgrowingouruseofthebrand,”hesays,
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“butarealwaysmindfulofthefactthatweshouldonlyputitonproductsandservicesthatfit–orwillfit–ourveryexactingcriteria.”
Inrecentyears,hehasthoughtlongandhardaboutwhattheVirginbrandstandsfor.Hebelievesthereputationthecompanyhasbuiltupisbasedonfivekeyfactors:valueformoney;quality;competitive
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challenge;innovation;andanindefinable,butnonethelesspalpable,senseoffun.(Another,slightlysnappier,versionoftheVirginbrandvaluesis:genuineandfun;contemporaryanddifferent;consumers’champion;andfirstclassatbusiness-classprice.)3
Inaclassicpieceofreverseengineering,thesearenowthebrandvaluesthatVirgin
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applieswhenconsideringnewbusinessventures.
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86BUSINESS
THERICHARDBRANSON
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WAY
Hesaysanynewproductorservicemusthave,orhavetheprospectofhavinginthefuture,thefollowingattributes:
◆itmustbeofthebestquality
◆itmustbeinnovative
◆itmustbegoodvaluefor
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money
◆itmustbechallengingtoexistingalternatives
◆anditmustaddasenseoffunorcheekiness.
Virginclaimsthatmanyprojectsitconsidersarepotentiallyveryprofitablebut,iftheydon’tfitwiththeGroup’svalues,theyarerejected.4ButBransonsays:
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“Ifanideasatisfiesatleastfourofthesefivecriteria,we’llusuallytakeaseriouslookatit.”
MAKINGWAVES
Ifyou’vegotagreatbrandandcanseeamarketopportunity,youshouldn’tletalittlethinglikewhetheryouhaveanyexperienceofthatmarketgetintheway.AccordingtoBranson:“If
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youknowhowtomotivateanddealwithpeople,itdoesn’tmatterwhetheryouaretakingontheairlineindustry,thesoftdrinksindustryorthefilmindustry.Thesamerulesapply.”
“Butyoushouldnevergointoanindustryjustwiththepurposeofmakingmoney.Onehastopassionatelybelieveitispossibletochangetheindustry,toturnit
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onitshead,tomakesurethatitwillneverbethesameagain.Withtherightpeopleandthatconviction,anythingispossible.Andyoucanthenignorethosewhogoonaboutbrandstretching.”
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BRAND
87
Lately,however,Branson’sbeliefthatVirgincanchangethewaythatindustriesareperceivedhascomeunderpressure.Thecompany’sinvolvementwithtrains–especiallytheinvestment-starvedBritishrailwaynetwork–hasdrawncriticism.
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AfterinitialexcitementthatVirgin
Bransononbrand
wouldbringabreathoffreshairand
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reputation:
punctualitytopartsofthefamously
“Ifyouhave20or
tardyBritishRailnetwork,commut-
30yearsofgood
ersweredisappointed.Virginservices
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quicklygainedareputationforbeing
reputationbehind
bothdilapidatedandlate.Branson
you,thepublicget
explainedthatitwouldtakefiveyears
toknowyoulike
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tobringtheserviceuptothestan-
you’reabrotheror
dardsVirginexpects.(andrecent
sister.”
evidenceofimprovementsuggests
hewasright).Somecritics
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argued
theadventurewasdamagingtheVirginbrand.Bransonbelievesthecompany’sgoodnameismorerobustthanthat.
“Ifyouhave20or30yearsofgoodreputationbehindyou,thepublicgettoknowyoulikeyou’reabrotherorsister,”hesays.
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“Theyknowyouandthecompanies’strengths–theyknowyourweaknesses.Abrandbuiltonthatlengthofreputationshouldbeabletowithstandtheoccasionalslipupandevencomeoutstrongerasaresult.”5
BEARDFACEDCHEEK
ThereisoneotherintangiblebutvitalingredienttotheBransonmarketingmix.
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WhateverVirgindoes,itaddsasenseoffunorcheekiness.“Intheearlydays,”hesays,“theactualVirginnameitselfwasperceivedasslightlyrisqué.Weweren’tevenallowedc05.indd87
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88BUSINESS
THERICHARDBRANSONWAY
toregisteritforthreeyearswiththePatentofficebecausetheyfeltitwas‘rude’.”
“Butsometimesyouhavetotakesomeriskindevelopingabrand.EMIfeltthathavingtheSexPistolsontheirbooks
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woulddamagethecompany’sreputation.WefeltthatitwasjustthetickettotakeVirginoutofthehippyeraandtoattractmoremodernartists.CourtcasesoverthenameofthealbumNeverMindtheBollocks,Here’stheSexPistolsonlyhelpedstrengthenVirgin’simage.”
Andit’snotjustVirginrecordcoversthatteasetheestablishment.
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EveryVirginproductorservicehasaslightlytongue-in-cheekapproach.Itisnotthatthecompanygoesintoanythinginanunprofessionalway–farfromit.It’ssimplythatithasasenseofhumor.Oftenthejokeisattheexpenseofitsvenerablechairman.
Consider,forexample,theadvertisingcampaignforthecompany’sfinancialservices
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companyVirginDirect.AtatimewhenanotherleadingUKproviderwasrunningacampaignbasedaroundthesensibleandsomewhatstaidimageofitschiefexecutive,Virginoffered1960sfootageofayoungandgeekishlookingBranson,completewithJoeNinetyspecsandahaircutfromhell.Themessage?Presumably,thatevenwaywardentrepreneurshavetogrowupsometime.
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Thentherewasthedouble-pageadvertisementplacedinTheTimesandotherleadingnewspapers.Thefull-colorpromotionfortheVirgindesignerclotheslabelfeaturedagrinningpictureofBransoninoneofhismostdreadfulpatternedjumpers.Thecaptionread:“Georgiodesigns.Ralphdesigns.Calvindesigns.
Richarddoesn’t.”
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DORIGHTBYYOURBRAND
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89
DORIGHTBYYOURBRAND
OneofthemostfrequentlyaskedquestionsaboutVirginishowfarthebrandcanstretch.Branson’sansweristhataslongasthebrand’sintegrityisnotcompromised,thenitisinfinitelyelastic.Virgin’sstrategyisbasedonwhathecalls
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“reputationalbranding”ratherthantraditionalproductandservicebranding.LessonsfromBransonthebrandmasterare:
◆
Agoodbrandtravels.TheubiquitousVirginbrandhaspromptedsomecommentatorstoaskwhetherthebrandisbeingdiluted.Thosewhounderstoodwhat
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Bransonwasabout,however,recognizethathehascreatedanentirelynewkindofbrandproposition.
◆
Brandelasticityisinfinite.ThemostimportantaspectoftheVirginbrandpropositionisitscredibilityamongitsmarketsegment.ExistingVirginproductsandservicesprovidecredibilityfornew
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offerings.
◆
Love,honorandcherishyourbrand.BransonhasacknowledgedtimeandtimeagainthatthemostvitalassetVirginhasisitsreputation.Hisphilosophyis:lookafteryourbrandanditwilllast.
◆
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Rulesareforbreaking.Ifyou’vegotagreatbrandandcanseeamarketopportunity,youshouldn’tletalittlethinglikewhetheryouhaveanyexperienceofthatmarketgetintheway.
◆
Apinchofsaltaddsflavor.WhateverVirgindoes,itaddsasenseoffunorcheekiness.Itisnotthatthe
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companygoesintoanythinginanunprofessionalway–farfromit.
It’ssimplythatithasasenseofhumor.
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90BUSINESS
THERICHARDBRANSONWAY
NOTES
1
Rodgers,Paul,“TheBransonPhenomenon,”Enterprisemagazine,March/April1997.
2
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Rodgers,Paul,“TheBransonPhenomenon,”Enterprisemagazine,March/April1997.
3
Campbell,AndrewandSadtler,David,“CorporateBreak-ups,”Strategy&Business,ThirdQuarter1998.
4
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VirginGroupliterature.
5
Branson,Richard,“MoneyProgramme”lecture,BBC,July1998.
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26/01/200712:55:43
SIX
SMILEFORTHE
CAMERAS
“Therearesomewhobelievethatinhisown
charminglyhaphazardway,Bransonrunstheslickestpublicrelationsoperationin
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Britain.”
–AndrewDavidson,journalist
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SMILEFORTHECAMERAS
93
HemaynotlooklikeafinelytunedPRmachine,butRichardBransonhasturned
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himselfintoawalking,talkinglogo.WhereMcDonald’shastheredhairedclownRonaldMcDonald,andDisneyhasasixfootmouse;Virginhasitsgoofychairman.Everytimehispictureappearsinanewspaperormagazine,itpromotestheVirginbrand.
Thisisentirelydeliberate,andprobablyoneofthemosteffectivepromotional
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strategieseveremployedbyacompany.Therisktothereputationofthebrand,ofcourse,iscorrespondinglyhighshouldBranson’spersonalimagebecometarnished.Todate,however,1ithasprovedhighlysuccessful,enablinghimtobuildtheVirginbrandonashoestringadvertisingbudget.
Calculatingtheadvertising
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valueofBranson’sfailedattempttocircumnavigatetheglobeinahotairballoon,oneAmericanadvertisingexecutivesaid“therearen’tenoughzerostodothemaths.”
Itishisabilitytoorchestratepublicityforhisbusinessventurewhich,perhapsmorethananyotherfacet,singlesoutRichardBransonfromeveryotherbusinessleader.
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EventhelikesofAnitaRoddick,BillGatesandTedTurnerdon’tgeneratepositivecoveragelikeBranson.PublicrelationsisBranson’sspecialgift.
AsTimJackson,authorofVirginKing,observes:“AchievinggoodpresshasbeenasimportantinBranson’sbusinesscareerasmakingsurethebooksbalanceattheendofthe
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year.Fromhisfirstdaysasamagazinepublisherandrecordretailer,Bransonknewc06.indd93
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94BUSINESS
THERICHARDBRANSON
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WAY
thatdescriptionsofhisventuresassuccessfulandexpansionarycouldbecomeself-fulfilling.”
ButwiththelaunchofVirginAtlanticAirwayshelearnedanewtrick.Thebigairlinesspendliterallymillionsofdollarsonadvertisingeveryyear.Bransonsoonrealizedthatfreemediacoveragewas
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theonlywayhecouldhopetosurvive.Thisgaverisetoaseriesofdaredevilescapadesandpublicitystunts.Apparently,thedecisiontochallengefortheBlueRiband–attemptingtobreaktherecordforthefastestAtlanticcrossing–wasmadewhenBransondiscoveredhecouldn’taffordNewYorkTVadvertisingratestopromotehisairline.
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ItisatacticthatBransonhasusedtoremarkableeffecteversince,settingasideaboutaquarterofhistimeforPRactivities.2
AlthoughtherearesignsthatBranson’srelentlessPRenginemaybeslowingdownalittle.
HOLDTHEFRONTPAGE
Whereothercompanies
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spendhugesumsofmoneyonadvertising,Bransongeneratesyardsofcolumninchesforfree.AndwhereotherfirmsemployexpensivePRfirmstoorganizecontrivedmediaevents,Bransondeliversamuchmorevaluablecommodity–news.
Thesecrettohisself-servingpublicitycampaignsisaninstinctiveunderstandingof
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whatappealstothemedia.Topublicizethelaunchofhisairline,forexample,Bransonarrivedattheinau-guralpressconferencewearingabrownleatheraviator’shelmet,Bigglesstyle.Editorslovedit,andsplashedBranson’sphotographallovertheirnewspapers.Thestorygeneratedsomuchc06.indd94
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SMILEFORTHECAMERAS
95
publicinterestthatVirgindidn’t
“Fromhisfirst
needtoadvertiseitsfirstflights.
daysasamagazine
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And,ofcourse,whenthewinnerof
publisherand
theVolvoandVirginGalacticcom-
recordretailer,
petition–firstprize,atripintospace
Bransonknew
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–wasannouncedinNewYorkin
thatdescriptions
2005,therewasBranson,theusual
grinbarelyvisiblefrominsidehisas-
ofhisventuresas
tronautoutfit.
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successfuland
expansionarycould
SincethenBranson’smediaevents
becomeself-
haveescalated.TolaunchVirgin
fulfilling.”
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ColaintheUS,forinstance,hedrove
afullbattletankdownabusyNew
YorkCitystreettodemolishawallof
colacans.Nosurprisesforguessingwhichcompanymadethenewsthenextday.
Buthiseye-catching
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performancesanddazzlingtimingactuallymaskaself-consciousstreak.Intheearlydays,Bransonwentoutofhiswaytoavoidinterviewswithjournalists.Tothosewhohavenotmethim,theideathatBransonmightbeshyseemsridiculous.Closerobservationrevealsthatalthoughheisanexhibitionistinsomeregards,hecanalsoappeardiffidentandawkward.Thereis,in
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fact,somethingoftheactorabouthim.
Infrontofthecameras,helookslikeamanperformingarolethathasbeenwrittenforhim.Bransonhimselfacknowledgesasmuch,andinsiststhathehastoforcehimselftoperform.
“UptothetimeIlaunchedtheairline,Iwasareasonablyshyperson.I
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didn’tlikedoinginterviews,avoidedthepress.Itookmymother’sadvicetoletmybusinessesspeakforthemselves.
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96BUSINESS
THERICHARDBRANSONWAY
Butwhenwedecidedto
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launchanairline,FreddieLakersaidthatifIwasgoingtotakeonAmericanAirlines,UnitedandBritishAirways,Iwouldneverhavetheadvertisingspendthattheyemploy…butifIwentandmadeabitofafoolofmyself,I’dgetonthefrontcovers.”3
Hisshynessactuallyaddstohisappeal.Whereothertycoonsappearpompousand
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selfimportant,Bransonradiatesschoolboyenthusiasm.Thefactthathispublicpersonaisselfcreatedandgoesagainstthegrainmakesitallthemoreimpressive.Heisaself-mademediaicon.
WhatisbeyonddoubtisthatBranson’sfeelforpublicrelationsisagift.Hisinstinctiveabilitytorecognizeandexploita
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mediaopportunityallowshimtorunringsaroundthestaidandconservativebusinessmenthepublicareusedtoseeing.Contrivedornot,Bransonmanagestoappear“natural”andeven“spon-taneous”evenwhenyouknowhehasbeenansweringthesamequestionsallday.
HisinstinctsallowhimtoavoidtheclichésofPRthat
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mostself-publicistseventuallyfallinto.Hisslightlyawkwarddelivery,packedwithummsandahs,soundsunscripted.Thereisafrank-nessaboutBranson,too,thatisendearing.Whathehasthatotherslackiscredibility–something
thatheretainsevenwhenheisin-
Whereother
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volvedinablatantPRexercise.
tycoonsappear
pompousandself
AskedifVirgin’shighproportion
important,Branson
ofBlackandAsianemployeesisthe
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resultofaconsciousnon-discrimina-
radiatesschoolboy
tionpolicy,hereplies:“Perhapsit
enthusiasm.
shouldbe,butitjusthappenedthat
c06.indd96
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97
way.”Toldofapressreportthatdeniedhiscompanieswereregisteredoffshoreto
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avoidBritishtax,heresponds:“It’swrong.
Thedecisionwastaxled.”
Noamountofpre-interviewbriefingcouldprovidesuchasmoothpassagethroughpotentialmediaminefields.
Attimes,thedramahasbeenalltooreal.Whenhisattempttocircumnavigatetheglobeinthehotairballoonwent
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danger-ouslywrong,withtheGlobalChallengerfallingatarateof2000
feetperminute,noonewasinanydoubtthatthelivesofthecrew–Bransonamongthem–wereinseriousdanger.Asthedramaunfolded,AlexRitchie,the52-year-oldseniorengineerontheprojectandalastminutestand-inforthethirdcrewmember,madeaheroic
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climbontotheballoontoreleaseadditionalweight,avertingdisaster.Therecordattempthadfailed,butcommerciallyitwasatriumph.
Ithadcost£3millionfortheGlobalChallengertotravelbarely400miles.Butnoonefromtheworldofmarketingwasinanydoubtthatithadbeenmoneywellspent.Referringtoa£300
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millionPepsiCo.advertisingcampaignthatincludedrepaintingConcordeblue,oneBritishPRexpertclaimedthatsimplybyleavingtheground,Bransonhad“outdonePepsifourfold.”4
Oneanecdotehighlightshisaptitudeformediarelations.OnhissecondandsuccessfulattempttobringbacktheBlueRibandtoBritainfor
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thefastestseacrossingoftheAtlantic,VirginstaffbackondrylandwerekeptbusythroughoutmuchofthevoyagegoingthroughalistoftheUK’snationalandregionalmedia.
FromtheoperationalheadquartersinoneofVirgin’srecordstores,theycalledtheeditorsonebyoneandofferedtopatchc06.indd97
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THERICHARDBRANSONWAY
themthroughforaliveinterviewwithBransononboardtheVirginAtlantic
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ChallengerII.
WhileBransonansweredquestionsfromonenewspaper,thenextwouldbereceivingabackgroundbriefingfromtheland-basedstaffandwaitingtobeputthrough.TheChallenger’sskipperkeptthisupforhours,answeringthesamequestionsandmakingthesamewisecracksagainandagaintoobtainmaximum
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coverage.Finally,heturnedtoChayBlyth,theround-the-worldyachtsmanaccompanyinghimontherecordattempt,andsaid:
“Thisisgettingboring.We’vegottotellthemsomethingelse.”
“We’vejustmissedawhale,”theastuteyachtsmansaidbywayofreply.“Where,where?,”askedBranson
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gettingexcited.“Ididn’tseeit.”ItwasonlywhenheglancedbackatBlyththatherealizedthat,whaleornowhale,thestorymadegoodnewspapercopy.“Ohyeah,”hesaid,“I’vegotit.”Thenextfeweditorsheardaboutthehugeseacreaturethathadhadsuchaclosebrushwiththeboat.Naturally,theylappeditup.
SowellknownisBranson’s
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talentforagoodstorythatnewVirginventureshavelittledifficultynowinarousingpublicandmediainterest.VirginBride,thecompany’schainofbridalstores,wasstill18monthsofflaunchwhenarumor,startedinaWestLondonestateagent,reachedallthenationalnewspaperswithinthreedays.ThecompanyevenreceivedaphonecallfromtheLosAngelesTimes.5
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ALLTEETHANDNOTROUSERS
Bransonwilldoalmostanythingtopromotehisbrand.Thisiscomplementedbyhisyenforadventure.Hisheadline-grabbingactivitiesincludedaredevilattemptstobecomethefirstpersonc06.indd98
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SMILEFORTHECAMERAS
99
tocircumnavigatetheglobeinahotairballoon,whichverynearlycosthimhislife,andsettinganewworldspeedrecordforcrossingtheAtlanticinaspeedboat.Suchexploitsresonatewiththemessage“lifeisanadventure;lifeisfun”–
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whichmatchestheVirginapproachtobusiness.
TheVirginchairmanisespeciallygoodatcreatingstorieswithvisualimpact.Heispreparedtodressupandacttheclown,wheremostbusinessmentakethemselvesfartooseriouslytodoanysuchthing.Certainlymostchairmenoflargecompaniesdrawthelineatwearingfancydress
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costumestopromotetheirproducts.Inthepublic’smind,ofcourse,Branson’swillingnesstoplaythefoolonlyservestoemphasizewhatabunchofstuffedshirtstheothersare.
“I’vewornalmosteverycostumethereistowear,”saysBranson.
“Itmakesaback-pagephotointoafront-pageone.And
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theycomebackformore.”
AnevenmoreoutrageousBransonployiscross-dressing.Thisheusedtogoodeffectwhenlaunchinghisnewairline–hedonnedstewardessuniform–andmorerecentlywhenhemodeledaweddingdressandhighheelsfor
thelaunchofhisnewchainofbridal
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Bransononfancy
stores.Howmanyothercompany
dress:
chairmenwoulddressupinwomen’s
“I’vewornalmost
underwear–inpublic?
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everycostume
Infact,amongVirginstaffthechair-
thereistowear.It
man’sexhibitionisttendenciesare
makesaback-page
wellknown.Heseemstohaveapas-
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photointoafront-
sionfordressingupandstrippingoff
pageone.”
inequalmeasure.Oneseniorem-
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100BUSINESS
THERICHARDBRANSONWAY
ployee6recallsthatBranson’spropensitytostripoffreachedthepointwhereagroanwentupononetriptoSwitzerlandwhenheoffered
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tobeteveryone£10thathewoulddaretoskiallthewaydownhillstarknaked.Nobodytookhimuponthebet,butBransonwentthroughwiththedareanyway.
TheSunnewspaperoncereportedthatonaVirginweekendaway,hehadentertainedemployeesataseafoodrestaurantbyperformingatabletop
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stripteaseinfishnetstockingsandlacysuspenders.Thestoryranundertheheadline:“Shockingstockingscaperbypoptycoon.”
Thenewspaperevenmanagedtogetholdofaphotographoftheincident,inwhichBransonwasinstantlyrecognizablebyhistrademark–thebrightlypatternedsweaterhewas
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wearing.
Atthetime,VirginwasalistedcompanyontheLondonStockExchange.Suchastorymighthavedamagedthecompany’sshareprice.Indeed,inthesameyear,reportsthatRalphHalpern,the48-year-oldchairmanofthemen’swearretailertheBurtonGroup,hadhadanaffairwitha19-year-oldtoplessmodel,were
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followedbyadropinthecompany’sshareprice.
ButtheSunarticlewasactuallyfavorable.ItpraisedtheVirginchairmanforhis“downtoearth”attitudeandasenseoffunwhich,itquippedintrueSunstyle,was“Virginontheridiculous.”
Theonenoteofcriticismcamefromclaimsthatthe
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weekendhadcostthecompany£250,000(thecompanysaidtherealcostwasclosertohalfthatfigure).
VirgininvestorsseemedtotakeBranson’sbehaviorasonlytobeexpectedfromasomeonewhohobnobbedwithpopstarsandhippies,ranhiscompanyfromaboat,andrefusedtowearasuit.
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101
BRANSON:SUPERHERO
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Bransonalsohasaremarkableknackofpoppingupatunexpectedmomentsofpublicdrama.Intherun-uptotheGulfWar,forexample,whenaBritishAirwaysplaneandcrewwasheldhostagebySaddamHussein’sforces,BransoninformedtheBritishmediathathehadofferedPrimeMinisterJohnMajortheuseofaVirginaircrafttogetthemout.Heputaplaneon24-hourstandbytoflyin
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andbringthehostageshome.
JustdaysafterPrincessDianaannouncedthatshewouldbewithdrawingfrompubliclifebecauseofmediapressure,sheappearedonthesameplatformasBransontolaunchanewadditiontotheVirginAtlanticfleet.DianalookedrelaxedandateaseasBransonsprayedherwithchampagneandpersuadedhertoposeinaredVirgin
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Atlanticjacket.(PRgeniusisnottoostrongatermforBranson.)
WhenthepopstarBoyGeorgefoundhimselfindifficultstraitsoverhisheroinaddiction,whosteppedintoofferafatherlyhandofhelp?NoneotherthanRichardBranson,whoseVirginrecordlabelhaddiscoveredGeorgeinhisCultureClubdays.Bransonwhiskedthe
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troubledpopstarawayfromthemediagazeandcheckedhimintoatopdrugrehabilitationclinic.CynicssawablatantPRopportunistatwork,butotherssawtheVirginbossasthecaringfaceofthepopbusiness.
In2006Bransonuppedhisgamewhenheannouncedhewascommittinghistimeandbillionsofdollarstohelpingsavetheplanetfromthe
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threatofclimatechange.ThereisnoonewhocoulddoubtBranson’sdeterminationtomakeadifferencewhenhecommitstoaproject.Whoknows,hemightjustprovethecatalystformanymorecorporationstogetinvolvedintacklingglobalwarming.
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THERICHARDBRANSONWAY
PHILANTHROPYANDSTAMPCOLLECTING
ARETWODIFFERENTTHINGS
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ThereisalsoanotheraspecttoRichardBransonthatreceivesmediaattention.Overtheyears,hehasbeeninvolvedinanumberofhigh-profilecommunityactivities.TheseincludehisbidtorunBritain’sNationalLottery,withallprofitstogotoacharitablefoundation.PlushisinvolvementintheAidsawarenesscampaign,whichgaverisetothelaunchofMatescondomsto
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challengethenearmonopolypositionofDurexintheUKmarketandfromwhichallprofitswenttocharity;whenthebusinesswassoldtoAnsell,theproceedswenttotheVirginHealthcarecharitablefoundation.Andnotforgettinghissupportforanon-smokingcampaignaimedatchildren;andhisinvolvementintheUKgovernmentsponsoredUK2000initiativetohelp
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unemployedyoungstersandcleanupthelitterfromBritain’sstreets.
TherewaseventalkofBransontakingonamajorpublicoffice,withrumorsthathewouldentertheraceforthenewpostofMayorofLondon.Itisatestamenttohispublicpopularity,too,thatpollsindicatedthathewouldhavebeenthefirstchoiceofmanyLondoners.
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These“publicspirited”activitiesrevealBransonthephilanthro-pist.Althoughtheyaregenerallyseparatefromhisbusinessempire,theyalsogeneratepublicityfortheVirgingroup.ThishaspromptedsomepeopletoquestionBranson’smotives.
Manycelebrities,ofcourse,arewellknownfortheirless-than-charitablereasonsfortakingoncharitableworks.
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Filmstars,popstarsandpoliticiansarenotabovemilkingsentimentfromtheoddgoodcauseforabitofpopularpress.InBranson’scase,however,suchaccusationsseemmisplaced.Certainly,hispersonalc06.indd102
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103
reputationhasbenefitedfromchampioningworthycauses,buthisreasons,inthemain,seemtobegenuinelyidealistic.Thisistheman,afterall,whoattheageof18foundedthenon-profit
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StudentAdvisoryCentretohelpwithyoungpeople’sproblems.
Thatwasbackin1968,beforehe’devenstartedthemail-orderrecordbusinessthatlaidtheseedsfortheVirginempire.
Infact,ifthereisoneareawhereRichardBransonhasnotreceivedthecreditheisdue,itishischaritablework.
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Forsuchanenthusiasticandableself-publicist,hehasshownhimselftobeuncharacteristicallyclumsywhenitcomestoobtainingpositivecoverageforhisgoodworks.Althoughhedoesnotgivevastamountsofmoneytocharity,Bransonhasgivengenerouslyofhisenergyandtimetosupportcauseshebelievesin.Hehasbeeninvolvedinanumberofmajorpublicprojects.
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TheUK2000campaignwasaninitiativetopooltheresourcesofanumberofprivateandgovernmentschemestoimproveBritain’senvironmentandprovidemeaningfulworkexperienceforunemployedyoungsters.AttherequestofMargaretThatcher’sgovernment,Bransonacceptedtheroleofchairman.Fromtheveryoutset,however,thecampaignwasplaguedby
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hostilepresscoverage,withtheBritishtabloidsdeterminedtoportrayitasnomorethananexerciseinpickinguplitter.Bransonleftthepostayearlater,lickinghiswounds.
AnotherpublicspiritedforayinvolvedthelaunchofMates,abrandofcut-pricecondomsaimedatshakingupthenearmonopolypositionofDurex.ThelaunchofMateswasa
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businesssuccess,puttingcondomadvertisementsonBritishtelevisionforthefirsttime.But,despiteraisingpublicawarenessofHIV,theadvertisinghadlittlerealimpactonpublichealth,whichwasitsstatedaim.Bransonwascriticizedbythepresseventhoughhec06.indd103
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104BUSINESS
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riskedhisownmoneytolaunchaproductwhoseproceedswereintendedforcharity.WhenthecompanywassoldtoAustralian
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businessAnsell,theentire£1millionproceedswereusedtolaunchtheVirginHealthcareFoundation.
Branson’sbidfortheUKNationalLotteryfranchisealsoearnedhimunfavourablepresscoverage.Despitehisinsistencethathewouldmakenoprofitsfromrunningthelotteryandthatalloftheproceedswouldbeadministeredbyacharitable
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foundationentirelyseparatefromtheVirgingroup,Bransonfailedtogethismessageacrosstothepublic.Onceagain,cynicaljournalistsplayedfastandloosewithhisaltruisticintentions.
ItisaninterestinginsightintoBranson’spersonality,too,thatheappearstobesurprisinglysensitivetosuchcriticism.Wheremostpeople
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inthepubliceyewouldexpecttobemisunderstood,Bransonappearsalmostnaïveaboutwhythepressmightpickonhim.Indeed,heseemsgenuinelydisappointedthatjournalistsshouldquestionthemotivationbehindhispublic-spiriteddisplays.Perhapshehasjustbecomeusedtopositivecoverage.
Alternatively,hemaysee
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playingthehurtpartyasthebestwaytodeflectcriticism.
NOWYOUSEEME,NOWYOUDON’T
AlmostasimpressiveashisabilitytostealthelimelightwhenhewantstoistheVirginchairman’sabilitytoavoidnegativepublicityforhisbusinessactivitiesorhavehisprivatelifereportedbythemedia.Likethe
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CheshireCatinAliceinWonderland,Bransonseemstobeabletovanishwhenitsuitshim,sothatallthatremainsvisibleishistoothysmile.
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WhileotherswithalternativebusinesscredossuchasAnitaRoddickhavebeenpunishedbythepressiftheyputafootwrong,manyofBranson’sbusinesssetbacksandfailuresremaindis-cretelyhiddenfromthepublicgaze.Roddick,itseems,was
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penalizedforherapparentself-righteousnessandfortakingwhatsomesawasamarketinggimmicktooseriously.Branson,ontheotherhand,isseenasaschoolboypranksterandgiventhebenefitofthedoubt.ThismayexplainwhywhenBransonhasreceivedcriticalpresscoverageithastendedtobeforhisphilanthropicactivitiesratherthanhiscommercial
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adventures.
Byandlarge,themediaattentionVirginreceivesispositive.TheothersideoftheBransonmediamanipulationishisabilitytodropoutofsightwhenitsuitshim.FromtimetotimetherearerumorsofcashshortageswithintheVirginGroup,andthathehasoverstretchedhimself.Thefactthathisbusinessisa
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privatecompanywithmostofitsinterestsregisteredthroughoffshoretrustsmakesitverydifficultforoutsiderstoknowwhatthetruebalancesheetpositionis.Thisperfectlylegalandtax-efficientarrangementworkstoBranson’sadvantage.
Bransonhasmanagedtokeepaveilaroundtheinnerworkingsofhisfinancialempire.In1986hefloated
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hisVirginbusinessontheLondonStockExchange,onlytobuyitbackbecausehedidn’tliketheconstraintsamarketlistingbroughtwithit.
IthasbeensuggestedthattherearetwoRichardBransons:thepeople’schampionknowntomillionsandthedealmakerknowntohisbusinesspartners.
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Hisabilitytostepoutofthelimelightandvirtuallydisappearfromviewisbothpartofthesecretofhisenduringsuccess,andalsopartofthewayinwhichheprotectshisbusinessinterestsc06.indd105
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106BUSINESS
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fromdamagingspeculation.Norwillyouseehischildreninthemediaspotlight–hiswifeJoanseestothat.HowBransonachievesthisremarkableconjuringtrickisunclear.Perhapsitispartoftheartofbeinganeverymancharactertobeableto
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disappearintothewoodworkwhenitsuits.HavingaCaribbeanislandofyourowntodisappeartoandthrowingexcellentpartiesforthemediaprobablyhelp,too.
NOTES
1
Anddespiteanallegationofsexualharassment.
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2Mitchell,
Alan,
LeadershipbyRichardBranson,AmropInternational,1995.
3
“I’mRichard,flyme,”RoyHattersley,TheGuardian,June20,1998.
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4Brown,
Mick,
RichardBranson:TheAuthorizedBiography,4thedn,Headline,1998.
5
VirginGroupLiterature.
6Jackson,
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Tim,
VirginKing,HarperCollins,London,1994,p.
126.
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107
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HemaynotlooklikeafinelytunedPRmachine,butRichardBransonhasturnedhimselfintoawalking,talkinglogo.Everytimehispictureappearsinanewspaperormagazine,itpromotestheVirginbrand.Promotingyourbusinessthe
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Bransonwayhasanumberofsubtleandnot-so-subtletwiststoit.
Theseinclude:
◆
Understandwhatthemediawant,andgiveittothem.
Whereothercompaniesspendhugesumsofmoneyonadvertising,Branson
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generatesyardsofcolumninchesforfree.AndwhereotherfirmsemployexpensivePR
firmstoorganizecontrivedmediaevents,Bransondeliversamuchmorevaluablecommodity–news.
◆
Thinkinpictures.Bransonwilldoalmostanythingto
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promotehisbrand.Heisespeciallygoodatcreatingstorieswithvisualimpact.
◆
Standupandbecounted.Bransonhasaremarkableknackofpoppingupatunexpectedmomentsofpublicdrama.
◆
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Remember,philanthropyandstampcollectingaretwodifferentthings.Overtheyears,Bransonhasbeeninvolvedinanumberofhigh-profilecommunityactivities.
Althoughthesearegenerallyseparatefromhisbusinessempire,theyalsogeneratepublicityfortheVirgingroup.
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◆
Knowwhentoduck.AlmostasimpressiveasBranson’sabilitytostealthelimelightwhenhewantstoishisabilitytoavoidnegativepublicityforhisbusinessactivities.
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SEVEN
DON’TLEADSHEEP,
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HERDCATS
“Virginstaffarenotmerehiredhands.Theyarenotmanagerialpawnsinsomegiganticchessgame.
Theyareentrepreneursintheirownright.”1
–RichardBranson
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HERDCATS
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Don’tleadsheep;herdcats–that’stheBransonstyleofleadership.Ratherthanexpectpeopletofollowblindlywhereheleads,hereliesonhisabilitytogetthebestfromindividualsbycreatingachallengingenvironment.Likeherdingcats,it’smuchhardertodo
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butalotmorelively.
Inmanyways,theVirginbossisthearchetypalleaderofthefuture.Herarelycoerces,inspiringinstead.Hepossessesthatmostpreciousofallleadershipassets–credibility.Youcouldsayheobtainsthebestperformancefromthepeoplearoundhimnotthroughthreatsbutthroughpureadulation.Alternatively,heisajusta
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fairlytalentedentrepreneurcarriedalongbyhisownenthusiasmandalongrunofluck.Unlikely.Inreality,itisbecausehedoesn’t“play”thebigleaderlikeanactor,butworkshardatit,thatheissoeffectiveintherole.WhatBransonunderstandsbetterthanmostisthatleadershipisanart:butonethatismoreakintotheskilloftheorchestraconductorthanthesoloist.
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Leadershipis,perhaps,themostdifficultofallhumanattributestodefine.Intermsofstyleofleadership,thereismuchtobesaidfortiming.Comeththehour,astheysay,comeththeman.
Whateverelsewethinkaboutthebusinessleadersofthe21stcentury,itseemsclearthatintermsofstyletheywillbemoreBransonthanLordHanson.Thedaysofthe
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assetstrippersarenumbered.Theabilitytomanagestart-upsandputempirestogetherismorevaluedthanthatofsellingoffthefamilysilver.
Butallthestyleintheworldcannotcompensateforalackofsubstance.Perhapsthatiswhyinadequatebusinessleaderspreferc07.indd111
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112BUSINESS
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THERICHARDBRANSONWAY
tohidebehindtheirjobtitlesandsta-
WhatBranson
tussymbols,relyingonhierarchical
understands
powerfortheirauthority.
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Successful
betterthanmost
entrepreneurs,ontheotherhand,
havetendedtobefiguresofawe;
isthatleadership
inspiringfearandwonderinequal
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isanart:but
measure.
onethatismore
akintotheskill
Today,wearelessimpressedwithei-
oftheorchestra
therofthesestyles.The
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modernview
isthatleadershipreliesonpeoplebe-
conductorthanthe
ingwillingtofollow.WhenRichard
soloist.
Bransonstartedoutinbusinessback
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inthe1960stherewaslittletosuggest
thatcommandandcontrolwascrumbling,certainlynotinthecorporateworld.Bydiscardinghierarchicalpowerinfavorofinspirationalleadership,Bransonwas25yearsaheadofhistime.
LEADINGFROMTHEREAR
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OneofthecharacteristicsoftheBransonleadershipstyleisknowingwhentogetoutthewayandletpeoplegetonwithit.
ThewaythatVirginisstructuredmeanshereallyhasnochoice.
With200andupwardscompaniesintheVirginfamily–itishardtokeepcount–itsimplyisn’t
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feasibletothinkhecouldbehands-onbossofallofthem.Whetherbyluckordesign,then,Bransonisforcedtobeaback-seatleader.(Theonecompanythathedoesn’tseemabletoleavealoneisVirginAtlantic.)Byandlarge,though,thehands-offleadershipstyleishighlybeneficial.Managersinthegroupenjoytheopportunityofrun-c07.indd112
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113
ningtheirownshow;theyfindithighlymotivating.Unlikemostcompanies,too,
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theydon’twastetimeonunnecessarymeetingsandpointlessreportstogivecorporateheadquarterssomethingtodo.
Soifheisn’trunningthebusinessonaday-to-daybasiswhatdoesVirgin’sbackseatleaderactuallydo?It’shardtodescribeexactly.Youcouldsay,heenthusesotherpeople,contributingtothebuzzthatemanatesfrom
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everypartofthegroup.
Beyondthat,BransonisalsoimportantasafigureheadfortheVirginbrand.Heputshisfullsupportbehindnewventures.Thepublicityhegenerates,promotesallofthecompaniesinthegroup.Thesedays,hehastorationhispersonalappearancestooneortwomediaeventsperbusinessperyear.
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ButthereissomethingmoretotheBransonleadershipmodel.
Hestandsforsomethingthatmakespeoplefeelgoodtoworkforhiscompany,asetofvaluesthatareimportanttoVirginemployees.It’shardtopindownexactlywhatthosevaluesare,buttheyhavesomethingtodowithrunningabusinessforapurposeotherthanpurely
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profit.
CATALYTICCONVERTER
AnothervitalaspectofBranson’sroleas“leader”ofVirginisthatofplanningthefuture.UnlikebusinessvisionariessuchasMicrosoft’sBillGates,andIntel’sAndyGrove,however,heisnotinthebusinessofcrystalballgazingor
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strategizing.Rather,Bransonisaprospector,panningthemultitudeofbusinessideasthatVirginattractsfornuggetsofpurestgold.
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114BUSINESS
THERICHARDBRANSONWAY
Heisalwaysonthelookoutfornewbusinessventures.Heandhistwoexpertadvisersconsidersomewherecloseto50proposalsaweek.Mostwillberejectedoutofhand,butifthereisagleamofanopportunityforanewVirgincompanytheywill
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takealonghardlook.
Itisonethingtorecognizepotentialforabusiness,andquiteanotherthingtomakeitareality.ThisisoneofBranson’ssecrets:theabilitytomakethingshappen.Heisthecatalystthattriggersachainreactionthattransformspotentialenergyinaprojectorideaintokineticenergythatsendspeoplescurryingina
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thousanddirections.
WhenthebusinessconsultantDonCruickshankwasbroughtinasgroupmanagingdirectortoprepareVirginforprivatization,hequicklyrealizedthattryingtogetBransontofitintoaconventionalorganizationalstructurewaspointless–andwouldbeself-defeating.Instead,hesensiblyconcluded,thecompany
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wouldhavetobestructuredarounditsenergeticchairman.
Recognizinghistalentforenthusingothers,Cruickshank,theex-McKinseyconsultant,encouragedBransonto“continuetodreamupnewideas,tolookatabewilderingarrayofnewventuresandtostartmorecompaniesintwoyearsthan
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mostentrepreneursdointheirwholecareers.”2
Bransonshouldnottrytoalterhisnature,Cruickshankwarned.
Insteadheshouldsticktowhatheisreallygoodat:motivatingothersandpassingonhisconfidenceandbeliefthateverynewprojectwouldsucceed.Inshort,Bransonshoulddevote
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allhisenergytoactingasacatalyst.Allthatwasneededwasacorpsofpeopletotidyupbehindhim,andtohelphimclarifywhathewastryingtoachieve.
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115
OneofBranson’sgreattalentsisgettingpeoplefiredupaboutanewbusinessideaandthenlettingthemlooseonit.Hisownenthusiasmiscontagious,focusingexcitementonagoalordestinationwhichthenallowshimtostepbackandletothersrunwithit.Somehow,too,hespurs
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peopleontoachievementstheywouldn’thavebelievedwerepossible.
TALENTSCOUT
Whenyougetrightdowntoit,RichardBransonhasnoclearlydefinedbusinessskillortraining.He’snotreallyanumbersman
–hefailedhiselementarymathsexaminationthree
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times.NorisheanITwhiz-kid–hehasneverbeenkeenonwordprocessingorcomputers,preferringhistrustynotepad,orthebackofhishand.Marketingandpublicityhehasaflairfor,butlittlegraspoforinterestinthetheory;hewouldratherdoithisway.What,then,doesBransonbringtotheparty?(Apartfromthepartyitself.)
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“WhatIdobestisfindingpeopleand
lettingthemwork,”hesays.“Virgin
Bransonon
staffarenotmerehiredhands.They
hisstaff:
arenotmanagerialpawnsin
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some
“Virginstaffare
giganticchessgame.Theyareentre-
notmerehired
preneursintheirownright.”3
hands.Theyarenot
ItseemsthatwhatBransonis
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goodat
managerialpawns
issurroundinghimselfwithverytal-
insomegigantic
entedpeopleandcreatingtheright
chessgame.They
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environmentforthemtoflourish.
areentrepreneurs
Thisisnomeanfeat.
intheirownright.”
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116BUSINESS
THERICHARDBRANSONWAY
Overtheyears,Branson’spersonalreputationhasprovedoneofthemosteffectivewaysofrecruitingstaff.AgreatmanyofVirgin’smostablemanagersactuallyapproachedBranson,
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drawnbywhattheyhadseenandheardaboutthewayherunshisbusiness.Oneofhisgreatcontributionstothebusinessistoactasamagnetforthesepeople,andtorecognizeandrewardthemwhentheyappear.Heisatalentscout.
Thesameprincipleappliestobusinessopportunities.ThesedaysBransonspendsmuchofhistimereviewingthemany
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businessproposalsmadetoVirginbyothercompanies.Goodprospectsarethosethatinvolveinstitutionalizedmarkets,fittheVirginbrand(genuineandfun;contemporaryanddifferent;consumers’champion;andfirstclassatbusiness-classprices),willrespondtotheVirginrecipe,offeringanenticingrisk-to-rewardratioandarepresentedbyacapablemanagementteam.
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WhereVirginventureshavenotbeensuccessful,ithasbeennoted,4itisoftenwhenhehashadagoodideahimselfandgoneouttolookforamanagertorunit.Thebestbusinessproposalshavecometohimfrommanagerswhowanttorunthebusinessthemselves.Heisbetteratspottingtalentwhenitcomestohimthanheisatgoingoutandfindingit.
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MASTEROFMAYHEM
Branson’sothergreatleadershiproleistopresideoverandencouragethecreativeenvironmentthatgivesVirginitsspecialbuzz.“Amadhouse,”ishowonevisitordescribedthegroup’spremises.“Therewerepeoplerunningaboutallovertheplace.”
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117
AnotherdescribedthesceneatAlbionStreet,thesiteofBranson’sfirstbusiness
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venture,in1969:“Phoneswereringing;attractivewomenwerecomingandgoing.Attheotherendoftheroom,ayoungmanwithtousledlightbrownhairandadazzlingsmilewastalkingveryearnestlyintothetelephone.”
YetanotherdescribedtheVirginheadquartersinHollandPark:
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“TherearedirtyplatesstackedupinthekitchenaboveRichardBranson’soffice.Thereisaphotocopieronthelanding.Alloverthehousewhereheoverseeshis200companiestherearedoorsajar,mugsleftontables,peoplewanderinginandout…itisnothinglikeamoderncorporateheadquarters.”5
Andinthecentreofallthe
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mayhem,thereisalwaysRichardBranson:usuallyworkingthetelephone,charming,teasing,cajoling,shouting,orinsomeotherwaytryingtogetsomeonetodosomethingtothebenefitofVirgin.
LikethedirectorofaMarxBrothersfilm,Bransonisthemasterofmayhem,orchestratingthechaos.Inhisownopinion,hedoesso
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withcommendablerestraint,leavingthemanagersoftheVirgincompaniestomaketheirowndecisionsandseldominterferinginoperationalmatters.
“Thebossesofeachcompanyhavealmosttotalauthoritytomaketheirowndecisions.IfIdomakeasuggestion,quiteoftentheytellmetofuckoff,”hesays.
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Butthereisanotherview.ThereasonVirginneverworkedasapubliccompany,hiscriticssay,isbecauseBransonisacontrolfreakwhohatestobeaccountabletoanyone.Heisalso,saythecritics,aninveteratemeddler,whounderminestheauthorityofc07.indd117
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THERICHARDBRANSONWAY
hismanagersbyinterferingindecisionsthathehassupposedlydelegated.
ContrarytoBranson’sownclaims,saysonedisgruntledformeremployee,theVirgin
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topmanagement“allsittherelikenoddingdogs,theirheadsnoddingwhicheverwayBranson’sdoes.
Noneofhismanagementdaregotothetoiletwithoutaskinghimfirst.”
TheseandotheraccusationshavebeenleveledatBranson,butitisdifficulttoseehowsuchpandemoniumcouldberuledoverbysucha
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panjandrum.Mostdictatorsrelyonrulestokeeppeopleinline.Branson’sempireisclosertochaos.
SHIPAHOY
Bransonhasbeencalledavisionary,asage,agurueven.“The
‘hippycapitalist’hasbecomeabusinessvisionarywhosemanagementstyleand
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philosophyofferssomepotentiallycruciallessonsforcapitalisminthethroesofchange,”notesonecommentator.6
“Achildoftherevolutionary1960s,he’sforgedauniquesynthesisoftheyouthrevolution’svaluesandtheneedsofamodernbusiness…somehowhisvaluesandstyleallayournaggingdoubtsaboutthemoralityof
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moderncapitalism’sendsandmeans.”
Utopianintheromanticsensehemaybe,butBransonisnosocialengineer.Hehasnoblueprint.Evenifhethoughtheknewtheanswer,Bransonwouldn’twanttoalienatepeoplefromtheVirginbrandbyexplainingit.
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DON’TLEADSHEEP,HERDCATS
119
Althoughhehasanoutrageous
“The‘hippy
senseofhumor,heisfartoopoliti-
callycorrecttooffendany
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particular
capitalist’has
socialgroup.Whenaskedquestions
becomeabusiness
oncontroversialtopicshistypical
visionarywhose
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responseistooffermultiplechoice
managementstyle
answers,indicatingtherearemany
andphilosophy
dimensionstotheissue,ortosug-
gestthatperhaps“thereisno
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right
offerssome
orwronganswer.”
potentiallycrucial
lessonsfor
Intruth,the“visionthing”isn’tre-
capitalisminthe
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allyBranson’sthing.Whatheisgood
throesofchange.”
atiskeepinghisonegoodpirate’s
eyepressedtothetelescopeand
constantlyscanningthehorizonfor
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heavilyladentreasureshipsripeforboarding.Theothereyeheusestokeepawatchfulvigilonthehereandnow,andtoensureheknowswhatisgoingonwithhisconstituency–theVirginfaithful.
OneofthelessonstobelearnedfromBransonisnottogettoohungupongrandioseideasandprojects,buttomovewiththetimes.
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HisgreatskillistheabilitytostayintouchwithVirgin’scustomersandemployeesandusethatknowledgetospynewbusinessopportunitiesthatareripefortheVirginformula.
Asforhisphilosophyandideasofabetterworld,itishardtoseparatethemfromhisinstinctivefeelforwhatmotivatesandinspirespeople.Inotherwords,don’t
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askBransonforanswers,justfollowwherehisinstinctleads.
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120BUSINESS
THERICHARDBRANSONWAY
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DON’TLEADSHEEP,
HERDCATS
Ratherthanexpectpeopletofollowblindlywhereheleads,Bransonreliesonhisabilitytogetthebestfromindividualsbycreatingachallengingenvironment.Likeherdingcats,it’smuchhardertodobutalotmorelively.Thelessonsforleadersare:
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◆
Beabackseatleader.OneofthecharacteristicsoftheBransonleadershipstyleisknowingwhentogetoutthewayandletpeoplegetonwithit.
◆
Actasacatalyst.Bransonisthecatalystthattransformspotentialenergyinaproject
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orideaintokineticenergythatsendspeoplescurryinginathousanddirections.
◆
Surroundyourselfwithtalentedpeople.WhatBransonisgoodatissurroundinghimselfwithverytalentedpeopleandcreatingtherightenvironmentforthemtoflourish.
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Thisisnomeanfeat.
◆
Encouragechaos.Bransonisthemasterofmayhem,orchestratingthechaos.
◆
Constantlyscanthehorizonfornewopportunities.Branson’sgreatskillistheabilitytostayintouchwith
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Virgin’scustomersandemployeesandusethatknowledgetospynewbusinessopportunitiesthatareripefortheVirginformula.
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NOTES
1Mitchell,
Alan,
LeadershipbyRichardBranson,AmropInternational,1995.
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2Jackson,
Tim,
VirginKing,HarperCollins,London,1994.
3Mitchell,
Alan,
LeadershipbyRichardBranson,AmropInternational,1995.
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4
Campbell,AndrewandSadtler,David,“CorporateBreak-ups,”Strategy&Business,ThirdQuarter1998.
5
“Hashewonthelottery?,”TheIndependent,December17,1995.
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6Mitchell,
Alan,
LeadershipbyRichardBranson,AmropInternational,1995.
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EIGHT
MOVEFASTERTHAN
ASPEEDINGBULLET
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“HejustsaysYesorNo.Hedoesn’tspendvaluabletimefartingabouttryingtoconvinceabunchofmiddlemanagersit’sagoodidea.”
–RowanGormley,CEO,VirginDirect
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125
IfthereisoneareawhereRichardBranson’sdisdainforthe
“suits”ofthecorporateworldisentirelyjustified,itisinthespeedoftheirreactions.Managementgurusareagogatthenotionofalargecorporationthatcanmovequickly.Inmostmultinationals,bureaucracy
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heapedonbureaucracyhascreatedanenvironmentwheremanagementbookssuchasTeachingtheElephanttoDanceandWhenGiantsLearntoDancearebestsellers.
Eventhe“downsizing”ofrecentyearshasfailedtogettotherealproblem.Attheheartofmostcompaniesthereisafattylayerofinefficientseniormanagement,
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whocouldn’tmakeadecisioniftheirlivesdependedonit.Yet,forthreedecades,Bransonhasshownhislumberingrivalsthemeaningofagility.Timeandtimeagain,Virginhasdemonstratedhowtoexploitawindowofopportunity.
TodosoBransonreliesoninstinctasmuchasanalysis.Hehascreatedexceptionallyshortdecision-making
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chains.Thenormalcommitteestagesarealmostentirelyabsent.
TURBOBRANSON
LikeSuperman,Bransonmovesfasterthanaspeedingbulletwhenanopportunitypresentsitself.Thereareinvaluablelessonsforthewould-beentrepreneurofthefuture.Anin-builtsuperchargercanwork
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wonders.ThespeedatwhichBransonexpectstomove,forexample,isoftenbreathtaking.
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126BUSINESS
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THERICHARDBRANSONWAY
VirginAtlanticAirwayswasliterallyairbornejustfivemonthsafterBransonfirstdiscussedtheidea.VirginTrading,theconsumergoodscompany,wascreatedjustdaysbeforeVirginColawaslaunched.
VirginDirect,thefinancialservicesarm,wasupand
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runninginfivemonths.“Mostpeoplewouldhavetakentwoyearsatleast,”
saysRowanGormley,foundingCEO,andnowchiefexecutiveofVirginWines.“Bransonhasfantasticallygoodmarketinginstinctsandhebelievesinthem.HejustsaysYesorNo.Hedoesn’tspendvaluabletimefartingabouttryingtoconvinceabunchofmiddlemanagers
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it’sagoodidea.”
EvenwhenheisworkingonNeckerIslandheisawhirlwindofactivity.AFortunereporterwhowentouttointerviewBranson,recountedhowBranson,whousuallygetsupat5.30inthemorning,washardatworkby7.00inthemorninghavingalreadycrammedinseveralgamesoftennis,withsomeslightlylessenthusiastic
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tennispartners.1
“Heseemstoworkabout35hoursaday,”saysonelong-standingVirginemployee–andheexpectshisstafftodothesame,oftenplacingimpossibledemandsontheirtimeandpatience.
OnmanyoccasionsBransonhasusedspeedtooutflankcompetitors.Inonecase,forexample,hewenttovisit
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Ariola,theFrencharmofaGermanrecordingcompanythatalsohandledrecorddistributionforothercompaniesincluding,atthattime,Virgin.AnexecutiveletslipthatAriolaplannedtosignatalentedsingercalledJulienClerc.Bransonrushedofftothebathroomandwrotedownthenameonhishand.Assoonasthechancepresenteditself,hecalledoneofthedirectorsofVirgin’s
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ownFrenchoperationsandaskedhimaboutthesinger.Clercc08.indd126
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MOVEFASTERTHANASPEEDINGBULLET
127
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wasverypopular,hewastold.Bransonthentrackeddownthesinger’smanagerandsignedClerctoVirgin.2
LEAPBEFOREYOULOOK
Bransonisnotagreatbelieverinmarketresearch,preferringtotrusthisinstinctivefeelforwhatconsumerswant,oftenbasedonhisownconversations
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withthem.WhereVirginhasbenefitedfrommarketresearchithasoftenbeencarriedoutbyajointventurepartnereitherpriortomakingabusinesspropositionortorefinetheproductofferingonceVirginisonboard.Oneofthegreatadvantagesofowningsuchapowerfulbrandisthatpartnerswilloftenmaketherunning.
Oncetheideahasagreen
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lightfromBranson,thenthefinerdetailscanbehonedbyothers.Branson’swillingnesstoleapbeforehelookshasimportantadvantages.ItmeansthatVirgincanoftenlaunchnewproducts–evenwholenewcompanies
–intothemarketplacemuchquickerthanitslumberingrivals.
Withthespeedatwhichthe
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businessenvironmentchangesthesedays,thiscanmakeallthedifferencebetweentakingadvantageofawindowofopportunityandmissingout.Attheendoftheday,aslongastheVirginreputationisnotcompromisedinanyway,
Oneofthegreat
thenanunprofitableventurecanbe
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advantagesof
closeddown.
owningsucha
Itmaysoundlikeacavalierattitude
powerfulbrandis
towardsthepricelessVirginbrand.
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thatpartnerswill
However,thereareanumberof
oftenmakethe
safeguardsbuiltintotheprocessthat
running.
allowBransontobecommercially
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128BUSINESS
THERICHARDBRANSONWAY
promiscuous.Ithasbeensaid
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thatheisabitofacontrolfreakwhenitcomestojointventures.Theonlypartnershipswithothercompaniesthatheistrulycomfortablewitharethosewherehehasacontrollingstake.WhentheVirginnameisusedonanothercompany’sproduct,Bransonretainstheroleofbrandguardian.
“Wearecarefulnottoassociateourselveswith
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productswecannotbeproudof,”hesays.“Andwehavetherighttowithdrawthenameataweek’snoticeifwearenothappywiththeobjectivesoftheothercompany.”
Atthesametime,inthemajorityofitspartnerships,Virginaimstonegotiatea“supermajority,”withacontrollingstakefarinexcessoftheequityithas
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invested.
“Bransonhastakenasmartrouteforaprivatecompany,”saysoneinvestmentexpert,“expandingthroughjointventures,withoutsidersputtingupasmuchcashaspossible,ratherthangettinginhockwithbanks.”
THEDECISIVEMOMENT
Timingisallimportantto
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Branson’ssuccess.Heisamasterofthedecisivemoment.Thisistheall-importantmomentwhenanopportunitypresentsitself.Itcouldbethepointatwhichpowershiftsfromonesidetotheotherinabusinessdeal;oritcouldbewhenarivalmakesafatalmistake.Itmaylastmonthsorjustseconds,butBransonisbrilliantatrecognizingitandexploitingit.
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InthecaseofBritishAirwaysandthedirtytricksaffair,thedecisivemomentcamewhenBA’smediamachinesuggestedthatc08.indd128
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SPEEDINGBULLET
129
Branson’smotivesformakingallegationsagainstBAwereto
“createpublicityforhisairline.”ThatmistakegaveBranson’slawyerswhattheyneededtofilealibelwritagainstBAanditschairmanLordKing.Upuntilthat
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point,Virgincoulddolittletoprotectitselfexcepttrytodrawmediaattentiontowhatwashappening.Inreality,however,theallegationsweretoocomplexforthepublictograspeasily.Butoncethedecisivemomentwasreached,thetideturned.
Bransonhasalsousedthisskilltogreateffectduringnegotiationsthroughouthisbusinesscareer,seizingon
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opportunitiestorenegotiatemorefavorabletermsorpresshomesomenewadvantage.
TimingisalsoabsolutelycriticaltomanyofhisPRactivities.Asintheotherareasofhisbusinesslife,Bransonisabrilliantopportunistwhenitcomestothemedia.Whenitbecametangledinitsownsophistryaboutbeingaglobalairline
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anddecidedtodroptheBritishflagfromitslivery,BAofferedBransonanewsstoryonaplate.HardlywasthepaintdryontheBAaircraftthanBransonthepatriotwasorderingthattheunionflagbeincludedontheVirginlivery,tellingjournaliststhatifBAdidn’twanttoflytheflag,Virginwouldbeproudto.
WITHALITTLEHELP
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FROMMYFRIENDS
SomethingBransonisespeciallygoodatispersuadingotherstogetinvolvedinhisprojects.Whetherit’sVirginemployeesorpartnerorganizations,Branson’senthusiasmisinfectious.
Inrecentyears,too,thecredibilityoftheVirginbrandmeansthathehas
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becomeamagnetforbusinessproposalsfromotherorganizations.
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130BUSINESS
THERICHARDBRANSONWAY
VirginCola,forexample,grewoutofthedevelopmentofapre-miumcolaformula
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fromacompanycalledCottsEuropethatsuppliesmanyofthesupermarketswithownbrandcolas.WhenVirginmovedintocomputersitwasinpartnershipwithICL.
WhenitwentintotheUSretailingmarketitwaswithBlockbust-er.TheoriginalbackroomexpertiseforVirginDirect,Branson’sfinancialservicesoperation,camefromNorwichUnion,a
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leadingUKinsurancecompany,andsubsequentlyfromAustralianMutualProvincial(AMP).
ThispartlyexplainsthespeedwithwhichVirgincompanieshavebeensetup.Thehugeadvantageofapartnerthatalreadyknowsthebusinessisthatlearningcurvesarefarlesssteep,andspe-cialistexpertiseisontap.Oncetheproductorservice
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hasbeendecided–usuallyasingleofferingtobeginwith–themainfocusoftheeffortgoesintogettingthemessagerightforconsumers,andaddingthatallimportantcheekyVirgintwist.
TheappealoftheVirginbrandnameisalsosuchthatinrecentyearsBransonhasbeenabletotakeriskswithotherpeople’smoneyaswellas,andsometimesinsteadof,
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hisown.But,asastoryfromhischildhoodillustrates,hehasalwaysunderstoodthebenefitsofusingotherpeople’sassetstoresourcehisadventures.
ThefriendshipbetweenBransonandhisschoolfriendandlong-timebusinesspartnerNikPowellassumedarecurringpattern.
Ononeoccasion,itwas
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decidedto
“christen”Nik’snewbicyclebytak-
“RichardBranson
ingitinturnstoridehellforleather
hasthe
downahilltowardsanearbyriver.
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concentrationofa
Theobjectofthegamewastoseewho
gnat.”
couldgettheclosesttotheedgewith-
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131
outgoingin.YoungNikskiddedtoa
Bransonon
haltafewfeetshortoftheriver.Then
cameRichard’sturn.Withawhoop
takingrisks:
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ofdelight,hesetoffdownthehill
“Oneshould
andstraightintotheriver.Nikhad
justgetonwith
tofishhimoutwithapieceofwood.
itandlearnfrom
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Thebicycle,however,wasneverseen
mistakes.”
again,andBranson’sparentshadto
findthecostofareplacement.3
VIRGIN’SSAMPLEOFONE
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Bransongetsfiredupbynewideasandconvertsthemintobusinessopportunitieswithhead-spinningspeed.ThedownsideforVirginemployeesisthattheirillustriousleaderisconstantlyswitchingfromonehobbyhorsetothenext.
“RichardBransonhastheconcentrationofagnat,”saysoneVirginemployee.ReferringtoBranson’sbelief
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thathecanspotabusinesswinnerwithoutmarketresearch,membersofstafftalkaboutVSO–Virgin’sSampleofOne,shorthandforBranson’slatesthare-brainedschemethat’sprobablydoomedtofailure.
Inevitably,someofBranson’sschemeshavecrashedspectacu-larly.Vanson,forexample,thepropertybusinesshestarted
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in1983,costhim£12millionthroughitsmisguidedinvestments;Event,amagazinehestartedin1981,wasanon-event.
ButBransontakessuchsetbacksinhisstride.Tohim,theyarepartofbeinganentrepreneur.ABransonviewoftheworldisthat“hewhonevermadeamistake,nevermadeanything.”
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THERICHARDBRANSONWAY
Accordingtoanadvertising
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executivewhoknowshimwell,Bransonhaskilledoffwellover100companies.Hisattitudeisgooutandtestsomething.Youonlylearnbytesting.Bransonhimselfputsitmorepositively:“Oneshouldjustgetonwithitandlearnfrommistakes,”hesays.“IlovewhatIdobecauseeverysingledayI’mlearningsomethingnew.”
NOTES
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1
Morris,Betsy.RichardBranson:WhataLife.Fortune,September22,2003.
2
Inc.magazine,November1987.
3Brown,
Mick,
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RichardBranson:TheAuthorizedBiography,4thedn,Headline,London,1998.
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MOVEFASTERTHANASPEEDINGBULLET
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133
MOVEFASTERTHANASPEEDING
BULLET
IfthereisoneareawhereRichardBranson’sdisdainforthe
“suits”ofthecorporateworldisentirelyjustified,itisinthespeedoftheirreactions.
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Managementgurusareagogatthenotionofalargecorporationthatcanmovequickly.Hehascreatedexceptionallyshortdecision-makingchains.Thenormalcommitteestagesarealmostentirelyabsent.Thelessonsare:
◆
Avoidparalysisbyanalysis.ThespeedatwhichBranson
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expectstomoveisoftenbreathtaking.
◆
Leapbeforeyoulook.Bransonisnotagreatbelieverinmarketresearch,preferringtotrusthisinstinctivefeelforwhatconsumerswant,oftenbasedonhisownconversationswiththem.
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◆
Streamlinedecisionmaking.TimingisallimportanttoBranson’ssuccess.Heisamasterofthedecisivemoment–theall-importantmomentwhenanopportunitypresentsitself.
◆
Getplentyofhelp.SomethingBransonis
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especiallygoodatispersuadingotherstogetinvolvedinhisprojects.
Whetherit’sVirginemployeesorpartnerorganizations,Branson’senthusiasmisinfectious.
◆
Don’tbeafraidofmakingmistakes–it’stheonlywaytolearn.Bransongetsfired
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upbynewideasandconvertsthemintobusinessopportunitieswithhead-spinningspeed.ThedownsideforVirginemployeesisthattheirillustriousleaderisconstantlyswitchingfromonehobbyhorsetothenext.
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NINE
SIZEDOESMATTER
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“Everytimeabusinessgetstoobig,westartanewone.Keepingthingssmallmeanskeepingthings-
personal.”
–RichardBranson
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Whilemuchofthecorporateworldseemsobsessedbythesizeofeachothersorgan(ization)s,Bransonpreferstokeepitsmall.TheVirginGroupiseffectivebecauseitmaximizestheentrepreneurialspiritofitsstaffwhilstminimizingthebureaucracyofitssystems.Virginisnotatraditionalhierarchicalcompany.Rather,itisaclusterof
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looselyassociatedbusinesses,withtheirownofficesandtheirownmanagementteams.
Bransonexplains:“Everytimeabusinessgetstoobig,westartanewone.Keepingthingssmallmeanskeepingthingspersonal;keepingthingspersonalmeanskeepingthepeoplethatreallymatter.”
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Ifyoutriedtodesignacorporatestructuretoprovidethegreatestnumberofemployeesindirectcontactwiththeirmarketplace,theresultwouldbeverysimilartotheVirginmodel.Onceagain,Bransoninstinctivelydoeswhatbusinessschoolprofessorshavespentyearsfiguringout.1
FROMACORNS
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Bransonisabuildernotabuyer,somethingthatmarkshimoutasaspecialkindofbusinessleader.Whereotherbusinesstycoonshavecreatedempiresbygobblingupsmallerempires,Bransonhasgrownhisown.2“Wedon’tinvestinlandorexpandbybuyingotherlargecompanies,”hesays.“Settingupcompaniesismyskill.”
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138BUSINESS
THERICHARDBRANSONWAY
Inrecentyears,Virginhasalsoprovedhighlyadeptatcreatingjointventuresand
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otherpartnerships.ThishasenabledBransontotaketheVirginbrandintocomplexmarketplaces–providingthedistinctiveVirginofferingwithouthavingtocreateanorganizationfromscratch.Agoodexampleisthe50:50jointventurewithNorwichUnion,oneoftheUK’sleadingfinancialservicescompanies(subsequentlyreplacedbyAustralianMutualProvident).3The
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partnershipenabledVirgintoofferfinancialproductsincludingcomplexpensionplansandinvestmentpackageswithouthavingtobringinallthenecessaryexpertisein-house.
SuchisthepullingpoweroftheVirginnamethatcompaniesareonlytoopleasedtoworkwithVirgin.Inrecentyears,Bransonhasstatedthattheabilityto
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createandmanageeffectivejointventuresisoneofVirgin’scorecompetencies.
Muchofhistimeisspentlookingatpotentialnewbusinesses.
AhumandynamoatthecentreoftheVirginempire,heisconstantlysparkingoffnewprojects,whicheithertakerootandgroworsimplywitheronthevine.(Branson
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andhisbusinessdevelopmentteamhavebeensaidtogetthroughabout50businessproposalsaweek.Atanyonetimetheyhaveaboutfournewprospectsunderreview.)4
Onceapromisingventurehasbeenidentified,Virginisexceptionallygoodatgettingabusinessoffthegroundquickly
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–ofteninjustafewmonths.AlthoughBransonhimselfhasthegoodsensebothtosurroundhimselfwithablepeopleandtoletpeoplerunwiththeball,hisownenthusiasmfortheadventureinvariablygetsthebetterofhim.Forsheerpromotionalmuscle,too,thereisnothingquitelikeaBransonPReventtolaunchanewVirginbusiness.
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Bransonhimselfadmitshisgreatloveandmain
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occupationissettingupnewfirms.“Iimmersemyselfinthemforthreemonths,thenbackoff,”hesays.“AfterthatIhavetosaytothemtheycanonlyhavemeonceortwiceayear.Ifanythingthatknackfordelegationisthecompany’scorecompetence.”5(Anothercorecompetence.)
TheexceptiontotheruleisVirginAtlanticAirways,
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whichcommandsthelion’sshareofBranson’sattention.SincethesaleofVirginMusicGrouptoThornEMIin1992,ithasbeenthejewelintheVirgincrown.
THESIMPLELIFE
Branson’sconstantquestfornewbusinessesmeansthattheVirginGroupisanintricateandconstantlyevolvingwebofstart-ups,
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jointventuresandpartnerships.Likeanover-fertilegarden,suchacomplexandorganicempirecouldeasilybecomeovergrown,butBranson’spromiscuousattitudetocommerceismatchedbyhisdisdainforhubris.AnimportantpartoftheBransonbusinessphilosophyiskeepitsimple–avaluethathepersonifies.
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Branson’slifeisremarkablyuncluttered.Hisstyleislow-keyandlow-tech.Heisnotfondofcomputers,anddidn’tacquirehisfirstmobilephoneuntil1993.IfthereisoneadagethatepitomizestheBransonapproachitis“keepitsimple.”
“Bransonworksasifhe’srunningastartup”observedForbesmagazine.“…Therearenoflowcharts,no
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traditionalmanagementhierarchies.Hedoesn’tevenknowhowtoturnonaThinkPad,andassociatesLotusnotwithNotesbutwithaveryfastcar…Ananachronismintheworldofinternationalbusinessmagnates,c09.indd139
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Bransonkeepshisappointmentsina
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“Bransonworks
diaryandscribblesideasonhishand.
asifhe’srunninga
Itworks,apparently.”6
startup.”
HecarriesabouthispersonanA4
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notepadboughtfromastationery
store.Inithescribbleshisownideasandnotesonconversationsandlistsoftaskstodo.(Suchistheesteeminwhichhe’sheld,thatotherVirginstaffimitatehimbyscribblinginnotebooks.)Thisprincipleappliesinhisprivatelifejustasmuchashisbusinesslife.Evenhistasteinfoodand
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drinkissimple.AcruelremarkbyonebusinessacquaintanceinvitedtodinnerwithBransondescribedthefoodas“likeschooldinners.”
NeckerIsland,partoftheBritishVirginIslands,nowofficiallybelongstothecompany.Itboastsafinekitchenandwinecellar,butthesearemoreforthebenefitofvisitorsandVirgin
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executives.Bransonhimselfshowslittleinterestinsuchmatters.HeissaidtohavebeenscandalizedwhenVirginexecutiveswantedtospendcompanymoneytastingvintagewinesinrestaurants,andusedtohavearulenevertospendmorethan£15onabottle.
Bransonseemscuriouslydetachedfromthematerialdetailsofhislife.Joan,his
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wife,isknowntodespiseaffectation.
Despitehishugepersonalwealth,Bransondresseslikesomeoneofmuchmoremodestmeans.Indeed,ofhisdresssense,ithasbeenobservedthathelooksasthoughhepickedtheclothesheiswearingoutofthecupboardatrandominthedark.ToBranson,noneofthisisimportant.
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141
THEATOMIZEDEMPIRE
Muchthesameprincipleappliestothewayheorganizeshisbusinessempire.Toavoidbureaucracy,thewholeofVirginisdividedintomanageablechunks.Tomaximizetheentrepreneurialenergy,andtocounterbalancetheriskof
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lossesinonepartoftheempireinfectingtheotherparts,eachVirginventureisintendedtobeastand-alonebusiness(eventhoughinpractice,cashgeneratedbyonebusinessisoftenusedtofinanceanother).ThisisreflectedinthestructureoftheGroup.
BransonrejectsWesterncorporateorthodoxy,preferringaloosegrouping
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ofcompaniesmoreakintotheJapanesekeiretsumodelorfamilyofcompanies:theVirginGroupisacollectionofsemi-independent,looselyconnectedempires.7
“TheGroup,”hesays,“isdefinedbyitsconstituentparts.”Eachoneofwhichishousedinadifferentbuildingandencouragedtohavethecharacteristicsofasmallbusinessinitsownright.
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Virginhasanexceptionallydecen-
Bransononthe
tralizedstructure.TheVirginbrand
iscontrolledbylicensingagreements
atomizedVirgin
witheachbusiness.
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(Branson’sinter-
empire:
estsareprotectedbyensuringthathe
“Wherewesee
almostinvariablyhasanownership
anopportunityor
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stakeof50percentorgreater.)The
gap,westartanew
businessesarerunasindependent
companiesbytheirownboardsof
division.Everytime
directors.
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abusinessgets
toobig,westart
TheVirginGroupconsistsofanum-
anotherone.”
berofdivisionsor“clusters”ofrelated
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concerns.Forexample,atravelclustercontainstwoairlines,anaviationservices
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businessandatravelcompany.Anentertain-mentsclusterincludescinemas,music“Megastores,”arecordlabelandfilminterests.Thefinancialservicesclustersellspensionsandinvestmentplans.
“Whereweseeanopportunityorgap,westartanewdivision.
Everytimeabusinessgets
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toobig,westartanotherone,”Bransonsays.Thisinturnfostersacozy,informalatmosphere.Ageneralruleofthumbhereisthatonceabusinessgetstoobigtoknoweveryonebytheirfirstname,thenitistimetobreakitup.
“Usuallytherearenomorethan60peopleinanyonebuilding,”
Bransonsays.
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THEHOUSEBOATHQ
Longbeforetheyfelloutoffavorwithmanagementgurus,Bransonspurnedtheveryideaofalargecorporateheadquarters.
Formanyyears,herantheVirginempirefromahouseboatontheRiverThames:boardmeetingswereheldaroundBranson’skitchentable,orinanearby
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pub.Whenthehouseboatsank,takingmostofhisbelongingswithit,hehadtomakealternativearrangements.
Buteventhenhewasn’tpreparedtomoveintoconventionalof-ficespace.TheVirginHQmovedupmarketwiththepurchaseoffirstone,andeventuallyawholestringofhouses,inLondon’strendyHolland
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Park.DifferentVirginbusinesseswerelocatedinthedifferenthouses,providingeachwithasenseofidentity,andenablingthedifferentmanagementteamstoruntheirownshow.Forawhile,Bransonranthebusinessfromanofficeinoneofthehouseswhichdoubledashishome.HenowhasanofficeataseparateHollandParkaddressdowntheroadfromhishouse.
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SIZEDOESMATTER
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AvisitingreporterdescribedtheVir-
ginhub:“Thehouseiscertainlygrand
“Outofthe
(creamywalls,whitemoldedceilings,
apparentrandom
andallthevaststucco
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proportions
chaosoftheVirgin
therichinwestLondonacquire)but
organization,
itisnothinglikeamoderncorporate
abusiness
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headquarters.”8
philosophy–almost
Eventoday,theideaofhousingthe
anentrepreneurial
companyinatowerblockwouldbe
blueprint–couldbe
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anathematotheBransonphiloso-
discerned.”
phy.ThevariousVirginbusinesses
stilloperatefrombuildingsscattered
aroundHollandPark.9
GOODIDEASALWAYS
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WELCOME
TheNotInventedHeresyndromeisthescourgeofmanybusinessorganizations,buttheVirgincultureisopentonewideasfromanyquarter.RichardBransonhasmadeitcompanypolicytolisten.Hehasalsomadeitpublicknowledgethatthecompanywilltakealookatbusinessproposalsfromwould-bepartners.Inreality,
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Virginendsuprejectingabout95percentoutofhand,preferringtoexploretheonesthathaveseriousbacking.
WithintheVirginorganization,Bransonheadsupasmallteam(includinghimself,andanexperiencedventurecapitalexpert)thatmeetstodiscusstheseproposals.
Hehasalwaysencouraged
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Virginemployeestomakesuggestionsforimprovingthebusiness–andestimatesthathereceivesbetween30and40lettersadayfromVirginstaff.Hetriestoreplytotheirlettersfirst.Butthewholestructureofthecom-c09.indd143
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panyisdesignedtoencourageentrepreneurialbehavior,andtoengenderasenseofbelonging.
AsBranson’sbiographerMickBrownobserves:“Out
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oftheapparentrandomchaosoftheVirginorganization,abusinessphilosophy–almostanentrepreneurialblueprint–couldbediscerned.Bysituatingeachcompanyonitsown–albeitsmallanddeterminedlyunglamorouspremises–overheadswerekepttoaminimum,but,moreimportant,afamilialatmospherewascreatedamongstaff.”
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NOTES
1
ThemanagementguruTomPeters,inparticular,hasravedabouttheeffortsofcompaniessuchastheABB,theSwed-ish-Swissengineeringcompany,tobreakthemselvesdownintosmallentrepreneurialunits.
2
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Hedidhaveanattackoftakeovermaniainthemid-1980s,butitwasshortlived.Virgin’shostilebidforEMIwascutshortbythestockmarketcrashof1987.
3
AMPsubsequentlyboughtoutNorwichUnion’sshareintheventure.
4
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Campbell,AndrewandSadtler,David,“CorporateBreak-ups,”Strategy&Business,ThirdQuarter1998.
5
Rodgers,Paul,“TheBransonPhenomenon,”Enterprisemagazine,March/April1997.
6
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“RichardBranson:theinterview,”Forbes,February24,1997.
7Mitchell,
Alan,
LeadershipbyRichardBranson,AmropInternational,1995.
8
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“Hashewonthelottery?”TheIndependent,December17,1995.
9
Campbell,AndrewandSadtler,David,“CorporateBreak-ups,”Strategy&Business,ThirdQuarter1998.
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SIZEDOESMATTER
TheVirginGroupiseffectivebecauseitmaximizestheentrepreneurialspiritofitsstaffwhilstminimizingthebureaucracyofitssystems.Virginisnotatraditionalhierarchicalcompany.
Rather,itisaclusteroflooselyassociatedbusinesses,withtheirownofficesandtheirown
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managementteams.TheBransonapproachtocorporatestructurehasfivekeypoints:
◆
Growyourown.Bransonisabuildernotabuyer,somethingthatmarkshimoutasaspecialkindofbusinessleader.Whereotherbusinesstycoonshavecreatedempiresbygobbling
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upsmallerempires,Bransonhasgrownhisown.
◆
Keepitsimple.Branson’slifeisremarkablyuncluttered.
ThisadageepitomizestheBransonapproach.
◆
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Breakitupintomanagementmolecules.Tomaximizetheentrepreneurialenergy,andtocounterbalancetheriskoflossesinonepartoftheempireinfectingtheotherparts,eachVirginventureisintendedtobeastand-alonebusiness.
◆
Keepheadquarterstoaminimum.Longbeforethey
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felloutoffavourwithmanagementgurus,Bransonspurnedtheveryideaofalargecorporateheadquarters.
◆
Ensurethesumofthepartsisgreaterthanthewhole.
RichardBransonhasmadeitcompanypolicytolisten.
Hehasalsomadeitpublic
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knowledgethatthecompanywilltakealookatbusinessproposalsfromwould-bepartners.
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TEN
NEVERLOSETHE
COMMONTOUCH
“There’sthisapproachabilityabouthim,notlikeapopstar
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orotherbusinessmen.”
–MickBrown,Branson’sbiographer
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149
RichardBranson’sultimategiftisthecommontouch.
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Hemakesusfeelasifheisoneofus.Inmanywaysthisisthemostdifficultlessonofall.ThosewhowanttofollowinRichardBranson’sfootstepshavetomasterthisskilloralltheotherlessonswillcometonothing.Morethanjusthumility,Branson’sabilitytomixwithpeopleofallwalksoflifesetshimapartfromjustabouteveryotherbusinessexecutiveyouwillmeet.Itisthekeytohis
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enduringsuccess–andpopularity.
ThosewhoknowhimwellsaythatBransonalwaysseesthingsfromtheconsumer’spointofview.That’seasyenoughtodowhenyou’refirststartingout.Buttobestilldoingit35yearsonwhenyou’reamulti-millionaireandchairmanofagroupofcompaniesworth£billionsisdeeplyimpressive.Andmake
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nomistakeaboutit,Bransonisverymuchintouch.Howdoeshedoit?
“I’mlucky,”hesays(luckisawordheusesalot).“Icantalktopeople.WhenIfirstcametoLondonasateenager,itwassuchalonelyplacetobe.Nowpeoplecomeuptomeinthestreetsorontheunderground.Iamluckytoknoweverybody.”1
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HI,I’MTHECHAIRMAN
Wheneverhefliesonhisairline,whichisaboutonceaweek,Bransontakestimeouttotalktotheotherpassengers.Hehasbeenknowntohamitup,donningastewardessuniformandc10.indd149
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lipsticktoservedrinkstothepassengersandcrew.Butonmanyotheroccasionshesimplymakestheefforttochatwithhiscustomersandaskthemwhattheythinkofhiscompany.Itis
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deceptivelypowerful.
Imaginethatyouareapassengerflyingeconomyclasswithyourfamilyonatransatlanticflightwithaleadingairline.Sometimeintotheflight,amanyouimmediatelyrecognizeastheairline’schairmanintroduceshimselfandpolitelyasksifhecanjoinyou.
Hethenproceedstoperform
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afewconjuringtrickstoamusethekidsbeforeproducinganotepadandpencil.“Whatdoyouthinkoftheairline?”Heasks,notinganysuggestionsyoumighthave.“IsthereanythingIcandotoimprovetheservice?”
Fewairlinemanagers–letalonechairmenandowners–takethetimetotalktotheircustomerslikethis.Yetweallknowthattheymust
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travelontheirownflightsfrequently,justasBransondoes.Thedifferenceisthatheusestheopportunitytolistentohiscustomerswhiletheyarefartooimportanttotalktomereeconomypassengers(theflightcrewofonefamousairlineunofficiallyreferstotheeconomyclassasthepigpen).
WhenhefirstsetupVirginAtlantic,Branson’spolicyof
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personallyphoning50customersamonthtoaskthemabouttheservicewonhimadulation.Notonlywasheofferingbetterserviceandlowerfares,hemanagedtoincludethepersonaltouch.Asoneobservernoted:“ThiswasinstarkcontrasttothemonopolistmonolithBritishAirways–whichatthattimewasdefinitelynottheworld’sfavouriteairline.”2
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Evenifyouwanttobecynicalaboutitandsayhe’sonlydoingitforeffect,itisveryhardnottobeimpressedwhenthechairmanc10.indd150
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NEVERLOSETHECOMMONTOUCH
151
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ofamajorcompanytakesthetrouble
MickBrown
toaskyourviewsonhisairline.
onBranson’s
So,thereyouhaveit:thedifference
persona:
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betweenRichardBransonand99.9
“Hedoesn’tdoit
percentofthepeoplewhorunlarge
deliberately,but
businessesisthathetreatspeoplede-
it’safactthathis
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centlyandlistenstowhattheythink.
Sadly,thatisenoughtoputhimhead
personaconceals
andshouldersabovemostofthe
hisorigins.”
competition.
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EVERYMAN
ThereisaboutBransonsomethingoftheEverymanfigure.Fornoreadilyapparentreason,peopleseemtoidentifywithhim,believingheislikethem.YouwillevenhearpeopleinBritainsaythathe’stheoriginal“barrowboycomegood,”eventhoughhisoriginsaremanymilesfromLondon’sEastEnd.Despite
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hispublicschoolboybackground,hisposhaccent,hisexpensivehousesaroundtheworld,andhisimmensewealthandpower,forsomeoddreasonordinarypeopleaccepthimasoneoftheirown.(PrincessDianahadasimilarknackofmakingpeoplefeelshewasoneofusinsteadofoneofthem.)Thethingis,themanislikeable.
Peoplewhoknowthe
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BransonswellsaythathiswifeJoankeepshisfeetfirmlyontheground.ItishislackoffrontthathasenabledBransontocourtapopularappealthattranscendsclassbarriersaswellasnationalbarriers.
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152BUSINESS
THERICHARDBRANSONWAY
“Hedoesn’tdoitdeliberately,”saysMickBrown,Branson’sof-ficialbiographer,“butit’safactthathispersonaconcealshisorigins.Peopleseehimasegalitarian,déclassé,
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meritocratic;that,combinedwithhisbusinesssuccessandhisbuccaneeringimage,makeshimveryattractive.Andthere’sthisapproachabilityabouthim,notlikeapopstarorotherbusinessmen.”
Asurvey3inMay1993,shortlyafterthesettlementwithBA,showedthatBransonwastherolemodelthemajorityofyoungpeople
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inBritainwouldmostliketoemulate.Thepsychologistwhoanalyzedthefindingsnoted:“There’sanFFactortoBranson:he’sgotfame,fortuneandfun.”Thecombinationmakespeoplefeelgood.Adecadelaterandhehasbeenelevatedbeyondthestatusofanationalhero,almosttothatofglobalicon.
InOctober2006hecamethird(afterHollywoodactor
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GeorgeClooneyandrapartistJay-Z)inapollofoveronemillionmen,inwhichtheAskMen.comwebsiteaskeditsmalereaderstonamethemantheymostadmired.
Peoplealsoseethemselvesinhim.Hisachievementsaresomehowtheirachievements,andtheylovehimforit.Weseehimdoingthethingswewouldliketodo.Asone
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interviewerobserved:“ThisishowwethinkofRichardBranson:inspecialmoments.Richardsprayingchampagne,likeastudentcomingoutoffinals;Richardofferingtorunthelotterywithoutprofit,likeRobinHood;RicharddefeatingthegreatmightofBritishAirwayswithallitsdirtytricks,aDavidagainstabullyGoliath;Richardingoggles,amodern-dayBiggles;Richardcuttinga
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ribbon;huggingamodel;huggingaPrincess;huggingScarySpice.Richarddressingupasawoman;asabunnyrabbit,asaclown.”4
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NEVERLOSETHECOMMONTOUCH
153
LITTLETHINGSTHATMATTER
AstudentwhospentsometimeworkingatacompanyprovidinghotairballoontripsintheSwissAlpsremembersmeetingRichardBranson.Bransonwasthere
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withtheaviatorPerLindstrandpreparingforoneoftheirattemptsatcircumnavigatingtheglobeinaballoon.Itwasearlyinthemorningandthetem-peraturewasmanydegreesbelowfreezing.Thestudent,whowaspreparingtheballoonforaflightwasfrozentothebone.
AsthetwopilotsapproachedherecognizedBransonfrom
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hispicturesontelevisionandinnewspapers.
WithoutthinkingheslippedoffhisglovetoshaketheVirginchairman’shand,immediatelyregrettingitbecauseofthegnawingcold.Branson,seeingwhattheyoungmanhaddone,removedhisownglovebeforeshakinghands.Hedidn’thaveto.
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Asthechairmanofalargeandpowerfulbusinessempire,theyoungmanmeantnothingtohim,andhewouldprobablyneverseehimagain.Untilthatmoment,however,thestudentwasnofanofRichardBranson.Inhiseyes,hewasjustanotherfatcat,whopreferredajumpertoasuit.Butwhatheremembersabouthimisthathegreetedhimasanequal.
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Therewerenocamerastheretorecordthemoment.Thatinitselfisrevealinginawaythatinterviewswithjournalistscanneverbe.ThestorysaysalotaboutBranson.Itsuggeststhatheisbasi-callyquiteaniceman;thatheisn’tpompousorpuffeduponhisownselfimportance.Italsoindicatessomethingabouthisstyle.
Bransonknowsthatthelittle
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thingsmatter.ItisafeatureofalltheVirginproductsandservices.
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154BUSINESS
THERICHARDBRANSONWAY
THEPEOPLE’S
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Bransonknows
CHAMPION
thatthelittlethings
matter.Itisa
WhatBransonhasthatothers
–businessmen,politiciansandTV
featureofallthe
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producersinparticular–canonly
Virginproductsand
dreamofishisfingeronthepulse
services.
ofthenation.Heseemstospeakfor
alargepartofthepopulation.
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Even
thoughhecouldhaveaffordedthe
redcarpettreatmentonConcordewheneverheliked,hesensedthatpeoplewerefedupwiththeattitudeofthebigairlines.
Hewasright–justaswell,really,sinceVirginAtlanticnearlybankruptedhim.
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Somehow,despitethefactthathisown£millionsarecontrolledbytax-efficientoffshoretrusts,hecorrectlysurmisedthatpeoplewithalittlebitofmoneysavedweretiredofthesalespatterandhighchargesfromUKfinancialservicescompanies.SomehowheknewtheywerereadytotrustVirginwiththeirhard-earnedcash.
Cynicswillanswerthathe
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hasadviserstotellhimthesethings.
Butwhyshouldthoseadvisersknowanymoreaboutwhatannoysconsumersthanthepeoplewhoadvisetheexecutivesinanyothercompany?Intheend,evenallowingforgoodadvice,it’shardtoavoidtheconclusionthatBransonhashisownbarom-eterofpublicopinionthatinformshis
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decisions.
Naturallyenough,hesaysthathetalkstopeopleandlistenstotheiropinionsandideas.Hewouldsaythat,ofcourse.Butyoudon’thavetobeageniustoseethatifyouspendasmuchtimeashedoeswithcustomers,someofithastoruboffonyou.ThosewholiketoknockRichardBranson,orquestionhissincerity,c10.indd154
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NEVERLOSETHE
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COMMONTOUCH
155
mightconsiderthis:evenifitwereallabigsham,designedtomakehimlookgood,itwouldstillmeanhespentmoretimetalkingtocustomersthanjustaboutanyothercompanychairman.Thatinitself,makeshimthepeople’schampion.
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KARMACHAMELEON
TheBransonphenomenonisprobablyunique.Itisanunusualcocktailofpersonalitycultandbusinessinstincts.Itisalsocuriouslypalatable.PerhapstheappealofBransonisthatheisdifferentthingstodifferentpeople.Whetheryouprefertothinkofhimasthehippyidealistonamissiontocleanupbusiness,alovablepirate
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rogue,acorporatePeterPan,orevenarobberBaronindisguise,dependsonyourpointofview.WhatisundeniableisthathehasdazzledtheBritishbusinesssceneformorethanthreedecadesinawaythatnootherentrepreneureverhasbefore,orislikelytoagain.
True,Bransonhasbeenfortunatetoliveinexcitingtimes.Fromthesocial
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revolutionofthe1960s,throughtheboomofthe1980s,thedotcomrushofthe1990s,andintothefirstdecadeofthe21stCentury,hehasbeentherewithhisVirginbrandtoofferanalternativetakeonwhateverthesuitsweretryingtosellus.Hehasmadealargefortunedoingit.Butinthesefatcatdayswhenunknownfacelessbureaucrats
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areshamelesslyawardingeachother
Perhapsthe
hugesumsofmoneyforcorporate
blandness,Bransonisgoodvalue.
appealofBranson
isthatheis
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Intheend,though,itisimpossible
differentthingsto
topindownRichardBranson.Heis,
differentpeople.
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156BUSINESS
THERICHARDBRANSONWAY
inthewordsofBoyGeorge,oneofVirgin’sfamous
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discoveries,theultimateKarmaChameleon.
NEVERLOSETHECOMMONTOUCH
RichardBranson’sultimategiftisthecommontouch.Hemakesusfeelasifheisoneofus.Morethanjusthumility,Branson’sabilitytomixwithpeopleofallwalksoflifesetshimapartfromjustabouteveryother
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businessexecutiveyouwillmeet.Itistherealsecrettohisenduringsuccess–andpopularity.HerearetheBransonlessons:
◆
Listentopeople–it’stheleastpractisedmanagementskillofthemall.ThedifferencebetweenRichardBransonand99.9percentofthepeoplewhorunlarge
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businessesisthathetreatspeopledecentlyandlistenstowhattheythink.
◆
Don’tletsuccessgotoyourhead–asenseofhumorhelps,sodoesbeingthrownintoswimmingpoolsbyyourstaffonaregularbasis.ThereisaboutBransonsomethingoftheEverymanfigure.Fornoreadilyapparentreason,
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peopleseemtoidentifywithhim,believingheislikethem.
◆
Useyourcustomersasconsultants–theyknowtheirrequirementsbetterthantheMcKinseysandBainsofthisworld.Bransonknowsthatthelittlethingsmatter.ItisafeatureofalltheVirginproductsandservices.
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NEVERLOSETHE
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COMMONTOUCH
157
◆
Treateveryoneasanequal;BransonismorelikelytoberudetotheCEOofamultinationalthanacheck-inclerk.
WhatBransonhasthatothers–businessmen,politicians
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andTVproducersinparticular–canonlydreamofishisfingeronthepulseofthenation.Heseemstospeakforalargepartofthepopulation.
◆
Bewhatpeoplewantyoutobe,anddon’tletthemdown.
PerhapstheappealofBransonisthatheisdifferent
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thingstodifferentpeople.WhatisundeniableisthathehasdazzledtheBritishbusinesssceneformorethantwodecadesinawaythatnootherentrepreneureverhasbefore.
NOTES
1
Gerrard,Nicci,“WhydoweloveRichardBranson?”The
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Observer,February8,1998.
2Mitchell,
Alan,
LeadershipbyRichardBranson,AMROPInternational,1995.
3
SponsoredbytheTSB.
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4
Gerrard,Nicci,“WhydoweloveRichardBranson,”TheObserver,February8,1998.
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HOWTOBUILD
ABRANDTHE
BRANSONWAY
Businessvisionaryor
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personalitycult?RichardBranson’sVirginbrandisunique.Noothercompanyhasevercreatedanythingquitelikeit.OnlytimewilltellwhetherBransonhasinventedanewblueprintforcapitalismforthe21stCentury,orissimplyabettersalesman.Nirvanaormoreofthesamewithadifferentspin?Italldependsonyourpointofview.
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Forthosewhowanttofollowinhisfootsteps,herearethesecretsofhissuccess.
1Pickonsomeonebiggerthanyou:
attackdominantmarketplayers
RichardBransonhasmadeacareeroutofplayingDavidtotheotherguy’sGoliath.Wheresomeentrepreneurs
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mighttakeonelookatthemarketdominanceofthebigplayersandthinkbetterofit,Bransonactuallydelightsintakingonandoutmaneuveringlargecorporations.
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160BUSINESS
THERICHARDBRANSONWAY
TheBransonstrategyis:
◆makebusinessacrusade
◆hoistapirateflag
◆playtheunderdog
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◆pickyourbattles
◆hitthemwhereithurts.
2Dothehippy,hippyshake
Branson’saffinitywithflowerpowerandthewhole1960smovementislessacommitmenttoasetofprinciplesorpoliticalbeliefs,andmuchmorerelatedtobeingintunewiththetimes
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–oneofhisgreatestbusinessattributes.Branson’salternativemanagementstyleoffersthefollowinglessonstoaspiringmo-guls,including:
◆don’tbeabreadhead
◆dressdowneveryday(notjustFridays)
◆putpeoplefirst
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◆blurthedividebetweenworkandplay
◆shakeitup(don’timitate,innovate).
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HOWTOBUILDABRANDTHEBRANSONWAY
161
3Haggle:everything’snegotiable
OneofRichardBranson’slessappreciatedtalentsisarazorsharpnegotiatingtechnique.Niceguysfinishlast,orsotheysay,butnot
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Branson.Despite–orperhapsbecauseof–hisMrNiceGuyimage,Bransonrarelycomesoutsecondbestinanyofthedealshemakes.Charismaandconsiderablepersonalcharmbelieacalculatingbusinessbrain.
ThelessonsfromtheBransonschoolofnegotiatingare:
◆niceguysfinishfirst
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◆neversaynever
◆talksoftlyandcarryabigstick
◆actongoodadvice
◆covertheupsideaswellasthedownside.
4Makeworkfun
Business,inRichardBranson’sview,shouldbe
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fun.Creatinganexcitingworkcultureisthebestwaytomotivateandretaingoodpeople;italsomeansyoudon’thavetopaythemasmuch.
Unlikethecomputerwhiz-kidsBillGatesandSteveJobs,Bransonhasneverinventedanyproductofarevolutionarynature.Alltheindustrieshehassucceededinareconventionaloneswith
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littleincommonexceptthattheyarematureanddominatedbylargeplayers.SowhatisitthatRichardBransonknowsaboutc11.indd161
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THERICHARDBRANSONWAY
businessthatotherpeoplewhohavebeenintheseconventionalindustriesforyearshavefailedtograsp?
Theanswerissimple.Bransonhastheabilitytomotivatepeopleandpushthemtothelimit.Hepossessesaremarkableabilitytoinspireothersto
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achievewhattheydidn’tknowtheywerecapableof.TheBransontechniqueformanagingpeopleprovidesthefollowinglessons:
◆itpaystoplay
◆letemployeesloose
◆encourageinformality–stayonfirstnameterms
◆praisepeopleratherthan
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criticizingthem
◆makebusinessanadventure.
5Dorightbyyourbrand
OneofthemostfrequentlyaskedquestionsaboutVirginishowfarthebrandcanstretch.Somecommentatorsbelievethat,byputtingtheVirginnameonsuchawiderangeofproductsand
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services,Bransonrisksseriouslydilutingthebrand.Hisanswertothiscriticismisthataslongasthebrand’sintegrityisnotcompromised,thenitisinfinitelyelastic.
LessonsfromBranson,thebrandmasterare:
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◆agoodbrandtravels
◆brandelasticityisinfinite
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◆lovehonorandcherishyourbrand
◆rulesareforbreaking
◆becheeky.
Virgin’sfivebrandvaluesare:
◆valueformoney
◆quality
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◆fun/cheek
◆innovation
◆challenge.
6Smileforthecameras
RichardBransonhasturnedhimselfintoawalking,talkinglogo.WhereMcDonald’shasRonaldMcDonald,asixfoot,ginger-hairedclown,andDisneyhas
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MickeyMouse;Virginhasitsgoofychairman.Everytimehispictureappearsinanewspaperormagazine,itpromotestheVirginbrand.
Thisisentirelydeliberate,andprobablyoneofthemosteffectivepromotionalstrategieseveremployedbyacompany.Thec11.indd163
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risktothereputationofthebrand,ofcourse,iscorrespondinglyhighshouldBranson’spersonalimagebecometarnished.Todate,
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however,ithasprovedhighlysuccessful,enablinghimtobuildtheVirginbrandonashoestringadvertisingbudget.
◆Understandwhatthemediawant,andgiveittothem
◆thinkinpictures
◆standupandbecounted
◆remember,philanthropy
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andstampcollectingaretwodifferentthings
◆knowwhentoduck.
7Don’tleadsheep,herdcats
Liberatecreativity,andencouragepeopletodowhattheydobest.
◆Beaback-seatleader
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◆actasacatalyst
◆surroundyourselfwithtalentedpeople
◆encouragechaos
◆makegoodideaswelcome(wherevertheycomefrom).
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8Movefasterthanaspeedingbullet
Bransonmovesquicklywhen
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anopportunitypresentsitself.
◆Seizethemoment(bewareofparalysisbyanalysis)
◆leapbeforeyoulook(avoidparalysisbyanalysis)
◆streamlinedecisionmaking
◆usejointventurestoleverageexpertise
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◆makeplentyofmistakes(it’stheonlywaytolearn).
9Sizedoesmatter
Ifyou’reaVirgin,thensizeisimportanttoyou.TheVirginGroupiseffectivebecauseitmaximizestheentrepreneurialspiritofitsstaffwhilstminimizingthebureaucracyofitssystems.Virginisnotatraditionalhierarchicalcompany.
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Rather,itisaclusteroflooselyassociatedbusinesses,withtheirownofficesandtheirownmanagementteams.
Ifyoutriedtodesignacorporatestructuretoprovidethegreatestnumberofemployeesindirectcontactwiththeirmarketplace,theresultwouldbeverysimilartotheVirginmodel.Onceagain,Bransoninstinctively
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doeswhatbusinessschoolprofessorsspendyearsfiguringout.TheessenceoftheBransonapproachtocorporatestructurehasfivekeypoints:
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◆growyourown
◆keepitsimple
◆breakupyourempireintosmallmolecules
◆keepheadquarterstoaminimum
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◆putoutthewelcomematforgoodideas.
10Neverlosethecommontouch
Inmanywaysthisisthemostdifficultlessonofall.ThosewhowanttofollowinRichardBranson’sfootstepshavetomasterthisoralltheotherlessonswillcometonothing.Morethanjusthumility,Branson’sabilityto
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mixwithpeopleofallwalksoflifesetshimapartfromjustabouteveryotherbusinessexecutiveyouwillmeet.
Itistherealsecrettohisenduringsuccess–andpopularity.
◆Listentopeople–customersandemployeesareagoodplacetostart
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◆don’tletsuccessgotoyourhead
◆useyourcustomersasconsultants–theyknowtheirrequirementsbetterthantheMcKinseysandBainsofthisworld
◆treateveryoneasanequal;oneofBranson’smostendearingtraitsisthatheismorelikelytoberudetotheCEOofamultinationalthan
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acheck-inclerk
◆bewhatpeoplewantyoutobe–beachameleon.
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LASTWORD
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InhisbookVirginKing,TimJacksonobservesthatBranson’smottoshouldbearsestcelareartem–theartliesinconcealingtheart.Branson’sbusinessrivalshavepaiddearlyforunderestimat-inghim;formistakinghispublicpersonaforthewholestory.
ThereismuchmoretotheVirginchairmanthanhispublicitystuntsand
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schoolboypranks–askLordKing.
ButperhapstherealsecretofBransonisthatheisdifferentthingstodifferentpeople.Whetheryouprefertothinkofhimasthehippyidealistonamissiontocleanupbusiness,alovablepiraterogue,acorporatePeterPan,orevenarobberbaronindisguise,dependsonyourpointofview.Whatis
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undeniableisthathehasdominatedtheBritishbusinesssceneformorethanthreedecadesinawaythatnootherentrepreneureverhasbefore,orislikelytoagain.
Bransonhasbeenfortunatetoliveinexcitingtimes.Fromthesocialrevolutionofthe1960sthroughthehalcyondaysofthe1980s,intothemorecaring1990s,andinto
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thenewmillenniumhehasbeentherewithhisVirginbrandtoofferanalternativetakeonwhateverthesuitsweretryingtosellus.Youcan’thelpthinkingthoughthathewouldhavemadeanytimeinteresting.
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Intheend,though,itisimpossibletoputRichardBransoninaspecimenjar.NotonlyishetheultimateKarmaChameleon
–changingcolortosuithis
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surroundings–buthehasbroughthismanycolorstotheworldofconsumers,employeesandbigbusiness.Sofar,atleast,hehasgiventhesuitsadamngoodrunfortheirmoney.
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INDEX
Abbott,David61
exploitmarketopportunity
agility125
86–7
avoidparalysisbyanalysis
integrity
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81
125–7
logo
4–5
don’tbeafraidofmaking
love,honour,cherish84–6
mistakes131–2
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reputational81,84–6
getplentyofhelp129–31
tongue-in-cheek
approach
leapbeforeyoulook127–8
87–8
streamlinedecisionmaking
ubiquitous
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82
128–9
values
85
AIDS6,102
Branson,Joan70,140
Ansell102,104
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Bransonphenomenon1–3
Ariola126
Branson,Richard
AustralianMutualProvincial
adventurousoutlook2–3,6,
(AMP)130,138
74,75–6,96–9
approachablestyle72–3
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BarclaysBank62
businessstrategy11–12
BlueRiband94,97
casualstyle41–3
Blyth,Chay98
commercialambitions3
Boeing61–2
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confident/can-dopersonality
BoyGeorge11,47,101,
67–70
156
culturalicon5
brand
delightinhaggling55–60
appeal
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130
earlyyears8–9
attributes
86
exhibitionist
tendencies
credibility
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83
99–100
elasticity
82–4
hippylabel2,37–9
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ideology
39
Gormley,Rowan48–9,126
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naiveness
104
GTech32–3
networthix-x
GulfWar101
aspoliticallycorrect119
public/privateimage7–8
Halpern,Ralph100
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publicityimage93–106
Hamel,Gary12
shyness
95–6
Hendrix,Jimi57
simple/modestlife140
socialaspects47
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innovation48–51
astechnophobe139–40
tycoon-in-waiting
9–11
Jackson,Tim8,45,58,96
viewoflife40–41
BritishAirways(BA)30–32,44,
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King,Lord31,32,129
96,128
Brown,Mick38,42,47
Laker,Freddie30,96
BurtonGroup100
leadership
actascatalyst113–15
Clerc,Julian126–7
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encouragechaos116–18
Coca-Colax,23,27
hands-off/back-seat
112–13
competition29–30
planningthefuture113–14
corecompetence12–13,139
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scanfornewopportunities
CottEurope72
118–19
Couttsbank42
style
111–12
Cruikshank,Don61,114
surroundyourselfwithtalent
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CultureClub11,47,70
115–16
Lester,Simon72
Davidson,Andrew42,43
libelactions31–3,44
decisionmaking28–9,45,128–9
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LondonEnergy84
Diana,Princess101
Draper,Simon55,70–71
MakepeaceIsland,Queensland
(Australia)xiii
environmentxiii-xv,6,101
MarsSyndrome83
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Mates1,102,103–4
Fields,Randolph59–60,62
Mayfairmagazine46
financemarket48–51
Murphy,John82
GlobalChallenger97
NationalLotteryxv,6,102,104
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Goldsmith,SirJames69–70
NeckerIsland140
bindex.indd170
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INDEX
171
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negotiation
keepitsimple139–40
alwayscovertheupside61–2
minimum
headquarters
getgoodprofessionaladvice
142–3
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60–61
SlippedDiscRecords2,4
hagglingstyle55–60
Snowden,Guy32–3
nevertakenoforananswer
SouthwestAirlines76
589
staffrelations43–5
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niceguysfinishfirst56–8
strategy11–12
talksoftly,carryabigstick
crusadingattitude24–5
59–60
guerrillatactics30–33
NorwichUnion130,138
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pickyourbattles28–9
positioningasunderdog26–8
Oldfield,Mike2,10,47,70
swashbucklingattitude25–6
StudentAdvisoryCentre103
Pepsi-Colax,97
Studentmagazine10,37,46
Porter,Michael11
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style
Powell,Nick9,130–31
don’timitate,innovate48–51
Prahalad,C.K.12
dress-downeveryday41–3
publicrelations(PR)138
financialmodesty40–41
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advertisingvalue93,94
informal/nonconformist
avoidanceofnegative
37–9
publicity104–6
people
first43–5
favourablepress93–4
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workhard,playhard45–7
publicspiritedactivities102–4
standupandbecounted101
TangerineDream47,70
thinkinpictures98–100
ThorneEMI139
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understandwhatmediawant
94–8
UK2000103
Ritchie,Alex97
VirginActivexii
Roddick,Anita8,105
VirginAtlanticAirways11,23,
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30–32,44,59–60,61–2,
set-upcosts61–2
74,94,112,126,139
SexPistols2,47,88
VirginAtlanticChallengerII98
size137
VirginBridex,98
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considernewproposals143–4
VirginColax,23,72,95,130
decentralizedstructure141–2
VirginDirect23,48–51,82,88,
growyourown137–9
126,130
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THERICHARDBRANSONWAY
VirginEnergyxii,84
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virginmoney.com50
VirginGalacticix,xii-xiii
Virgin.netxiii
VirginGroup1,105,137
Virgin’sSampleofOne(VSO)
advisersin61
131
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divisionalstructure141–2
historicaltimeline13–19
workculture
ownership7,44–5,56
creativefreedom70–72
trustedname25
divideandrulemodel71–2
universalbrand3–5
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empowerment
70–71
VirginHealthcare102
enthusiastic
74
VirginMegastores44,142
excitement/adventure
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75–6
VirginMobilexiii
havingfun68–70
VirginMoney50
informal
72–3
VirginMusicGroup70–71,139
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looseorganizationalstructure
VirginPEP49–50
71
VirginRecords5,47,88
makingadifference76
VirginTrainsx-xii,84,87
motivation
67–8
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VirginWinesxii126
promotionstrategy73–4
bindex.indd172
bindex.indd172
26/01/200715:37:33
26/01/200715:37:33
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DocumentOutline
BusinesstheRichardBransonWay
AcknowledgmentsRichardBransonRevisited…TheLifeandTimesofRichardBransonOne:Pickon
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SomeoneBiggerThanYouTwo:DotheHippy,HippyShakeThree:Haggle:Everything’sNegotiableFour:MakeWorkFunFive:DoRightbyYourBrandSix:SmilefortheCamerasSeven:Don’tLead
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Sheep,HerdCatsEight:MoveFasterThanaSpeedingBulletNine:SizeDoesMatterTen:NeverLosetheCommonTouchHowtoBuildaBrandtheBransonWayLastWordIndex