Executive Insight: Richard Branson
People matter. That’s the view of Virgin Group founder Sir Richard Branson, whose unique approach to business has put him on top of the world. But don’t think he’s stopping there.... We spoke with the ambitious founder of The Virgin Group and discussed how he wants to make a difference in the world while still maintaining a sense of smallness and humility. His ideas are grand, but he tempers them with a desire to make them accessible to everyone.
It’s a Thursday morning in August, and a webcam is broadcasting live from a tropical hideaway. It looks like something out of Gilligan’s Island – except for the spaceship. The miniature model is perched on a bookshelf in front of a stucco wall, overhung by a thatched roof. Everything is calm until, out of nowhere, Sir Richard Branson bursts into the scene. He’s wearing a loose-fitting white T-shirt and an ear-to-ear grin. “Is this working? Can you hear me? Yes? Hello, there!”
This is the Virgin Group founder’s first time in a Google+ Hangout. The unusual backdrop betrays his location: He’s on Necker Island, one of several pockets of land he owns in the British Virgin Islands. Technically speaking, he’s on vacation.
Only Richard Branson is never on vacation. There are over 300 companies worldwide under the Virgin umbrella, and embodying them all is a full-time gig. It’s a diverse portfolio that includes an undersea exploration unit, several wine distributors, a concert festival series, and multiple airlines headquartered on three continents.
Still, let’s not forget the perks: Necker is the ultimate private getaway, ringed by white-sand beaches and cerulean seas. It’s also classic Branson – a place where business pragmatism goes hand-in-hand with adventure pursuits and eco-friendly philanthropism. The island doubles as a luxury resort, with a portion of each guest’s bill going straight to Virgin Unite, the Group’s charity arm.
It’s this combination of flair, generosity, and sensitivity that has fueled Branson’s success. Where business best-practice suggests that only a ruthless pursuit of the bottom line can guarantee results, Branson intuitively grasped that people matter. And the things that matter to people matter, too.
That’s how he’s succeeded when so many were convinced he’d fail. It’s how he took on Britain’s biggest airline and won. How he sustained a cell phone brand in the crowded wireless market. How, as a personal project, he turned a Moroccan king’s New Jersey vacation home into a culinary destination.
He accomplished these things by holding to the belief that Virgin brands should give people, whether employees or customers, something to believe in and someone to root for. Now he has his sights set on an even grander prize, because Branson is out to save the world – or leave it behind completely.
Virgin’s ambitions have gone stratospheric. Virgin Galactic, an ambitious spaceflight start-up, is on track to take its first tourists into suborbital space next year, and will also handle science missions and satellite launches now NASA’s manned shuttle program has come to an end. Then there’s The Elders, a Virgin-backed nonprofit that attempts to solve global conflicts through a coalition of seasoned leaders and humanitarians. It grew out of Branson’s last-ditch attempt, with the aid of Nelson Mandela and Kofi Annan, to persuade Saddam Hussein to step down before the US-led invasion of Iraq in 2003.
“Out of that came the idea of setting up a group of elders headed by Nelson Mandela; a high moral authority who could go into conflict regions and try to solve them,” Branson says. “It’s got a very good chief executive who runs it as an independent organization and in an entrepreneurial way. We’ll run it just like we’d run any other business, except that it’s a not-for-profit – it’s a force for good rather than a force to make money.”
Critics of Branson have been saying more or less the same things about him for three decades – that he’s reckless, unfocused, and more concerned with making a splash than with building lasting businesses. Branson has been consistently good at proving them wrong, like those who considered the 1984 launch of Virgin Atlantic Airways an ego project that was sure to flop – it has, of course, been an extraordinary business success. Now that he’s hoping to use the Virgin brand to change the world, he wants other business leaders to take notice.
“I think that in the past, people have assumed that companies are there just to create jobs and make money,” Branson says. “But that thinking is changing, particularly as people realize that governments can only do so much and companies must be more than just moneymaking machines. They must become a force for good, they must use their entrepreneurial skills to make a real difference in the world, and they must use their financial resources to make a real difference in the world.”
Branson says that the starting point for such ambitions is the Virgin Group’s own workforce, which he imbues with a sense that they’re a very small part of something much bigger, both in terms of the business world and the global community. “Each of the individual Virgin companies starts quite small, and their reason for being is to take on some of the big giants, especially some of those giants that have got a bit fat and flabby, and prod them in their stomach and do things a little bit better than has been done in the past,” Branson explains.
“Our people do it with style and panache. They have fun. They try to bring good value for money, they try to make sure that the quality is better than any other company around, and they try to do it ethically. So I think that when members of the public come in contact with the Virgin brand, generally speaking, they feel they can trust it, and I think people who work for the Virgin brand want to make sure they don’t let the brand down.”
Branson’s own origin story emphasizes above all that he started small; he famously created a magazine called Student at the age of 16 and, several years later, a mail-order record company called Virgin. This, of course, begat the Virgin Records powerhouse that became so successful that it funded Virgin’s expansion into the airline business – the rest, more or less, is history.
Plenty of billionaires tout humble roots involving lemonade stands and assembly-line factory jobs, but few are as adamant as Branson that all their employees know what it’s like to be part of a small operation up against far bigger competitors. At Virgin Records, he’d even split up employees’ physical workspaces as the company grew in order to maintain an underdog atmosphere.
“As the record company got bigger, when it had more than 100 people in a building, I’d go in and ask to see the deputy managing director, the deputy sales manager, the deputy marketing manager, and I’d say, ‘You’re now the marketing manager, the sales manager, of a new company,’ and we would then find a new building, set up a brand new company, and we kept on replicating this,” Branson explains. “We had about 25 different record companies in 25 different buildings, rather than one massive group of people in one building. It seemed to work, and so as much as possible we continued to try to do that. I think if you’ve got more than 150 people, it’s very difficult for a chief executive to know everybody and for everybody to know each other well.”
Perhaps it’s because he can’t be on a first-name basis with his employees any longer that he’s expanded his ‘people’ focus to embrace just about everyone on the planet. Among the current projects at Virgin Unite are a fundraiser to combat the current hunger crisis in the Horn of Africa, a campaign to support homeless teenagers in Australia, and a Virgin Galactic-specific scholarship fund to encourage math and science careers in the US.
Detractors might say that Virgin Unite is spreading itself too thin, but Branson would argue that creativity and a willingness to experiment is the best way to change the world as well as run a business. It’s an example that he, as his brand’s own best marketing vehicle, hopes to set for those both inside and outside Virgin. Getting Saddam Hussein to step down didn’t work, but the pieces of that failed effort turned into The Elders. A failure is rarely a dead end.
As the conversation winds down and Branson prepares for a leisurely day of kitesurfing, he chats about the status of Virgin Galactic, which has had a handful of false starts, but which finally seems to be on track for a 2012 lift-off. Many people have already eagerly paid for their $200,000 tickets. But what Branson really wants isn’t just to hurl billionaires into space for a few minutes; rather, he ultimately wants to use Virgin Galactic as a vehicle for research and eventually, as costs drop, a way for ordinary people to experience the extraordinary. “I think in time that price will come down. The idea is to allow, one day, anybody who wants to experience being an astronaut to go into space,” he says. “That’s the challenge we’ve set ourselves.”
For now, they have a creative and particularly Virgin-esque alternative: Two million frequent flier miles on Virgin Atlantic Airways can be cashed in for a trip to space. “If we have an airline and a spaceship company, we might as well have one help the other,” Branson says with a grin.
"Companies must be more than just moneymaking machines. They must become a force for good, they must use their entrepreneurial skills to make a real difference in the world."
- Published September 2011