You may recognize him from some of the world’s most successful companies or you may recognize him as the larger than life celebrity, always appearing at the high profile launches of his new service offerings. You may also recognize him as the gung-ho adventurer trying to go further in a hot air balloon than anyone else. One thing’s for sure, you’d have to be living under a rock for the past 20 years to not know of Richard Branson.
It’s a commonly shared opinion that he is lucky. Everything he touches seems to turn to gold. That may be true if you consider Virgin Atlantic, Virgin Media or Virgin America, but these and other successes have come on the back of some hard work, major challenges and sometimes David and Goliath encounters. In the next ten minutes we will share the common themes and practices behind the Virgin Companies as Richard Branson shows us his “Business Stripped Bare”.
The IdeaCode for this week is: TIPPIN. The Readitfor.me IdeaCode is a shorthand system to help you memorize the core concepts, so you can quickly apply then in any situation.
[emaillocker]TEAMWORK and PLAY: Behind a successful company is a great team, a team who work together and play together.
INTRINSIC BRAND: A brand should be more than just a stamp. It must permeate though all of the company, all of the staff and especially the leadership.
PROTECT THE DOWNSIDE: Don’t ever think you are invincible. Even the best companies in the world have to learn from their mistakes.
PRIORITIZE DELIVERY OF CHANGE: Nothing lasts forever. Embrace change and make its delivery a priority.
INNOVATE AND INNOVATE AGAIN: Innovation must be appropriate for your business, fulfil a need and give you an edge over your competitors.>
NOTEBOOKS ARE FOR NOTES: Having a notebook to jot down ideas as they arise can ensure that no nuggets of inspiration or challenges to be met are missed.
Lesson 1: Teamwork.
Branson immediately sets out to dispel the idea that he is Virgin. He strongly suggests that the success of his Virgin Empire is not all his making but behind each of the successful companies are a team of equally determined and equally spirited people.
“Good people have always been at the heart of the Virgin business” says Branson, largely because Virgin has tried to keep their businesses small, and their management teams tight-knit. Small, compact companies are, generally, better run.
Virgin has therefore focussed on pulling together teams of entrepreneurially minded individuals and give them a place to work that stimulates innovation and creativity. In an ideal business environment, people should be aware of each others roles and challenges. Cubicle layouts are horrible for the type of collaboration that is necessary. When people aren’t forced to talk, niggling problems fester. No one runs that extra mile for you.
Equally so, if your people aren’t talking to each other, how are they ever going to get great ideas? As Albert Einstein said: ‘What a person does on his own, without being stimulated by the thoughts and experiences of others, is even in the best cases rather paltry and monotonous.’
The size of the company is also important. Putting aside Virgin’s transportation businesses, which by their very nature need to be organizationally large, Branson suggests keeping company structures dynamic.
In earlier days to maintain the entrepreneurial spirit of his early companies, when a company headcount reached around 100, he would ask to see the deputy managing director, the deputy sales manager and the deputy marketing director and say to them: ‘You are now the managing director, the sales manager and the marketing director of a new company.’ Then he’d split the company in two.
When either of those companies got to a hundred people, he would once again ask to see the deputies and split the company again. In this way he’d keep the group fresh, increase commitment, get access to new ideas and innovation and build trust and loyalty all in one action.
As Branson points out “There is nothing more demoralising than to work your pants off, only for strangers to be promoted to the senior positions you aspire to. At Virgin, we keep business in the family wherever we can, and we promote from within.”
Lesson 2 : Play.
Branson is famous for being gregarious and suggests we should try to be the same. This is not to say you should dress up in a bridal gown or dangle from a helicopter over Sydney harbour, but a manager should basically be a considerate person who is as interested in the switchboard operator and the person who cleans the lavatories as he or she is in the fellow managers. After all, we only live once, and most of our time is spent at work, so it’s vital that we are allowed to feel good about what we do.
Throwing yourself into a job you enjoy is one of life’s greatest pleasures – but it’s one that some leaders of industry seem determined to stamp out at all costs. Branson also makes it a rule when in a city, to stay, if possible, where his cabin crew hang out. Do you do the same?
Inspire your people to think like entrepreneurs, and whatever you do, treat them like adults. The hardest taskmaster of all is a person’s own conscience, so the more responsibility you give people, the better they will work for you. The more you free your people to think for themselves, the more they can help you. You don’t have to do it all on your own.
Lesson 3: Have an Intrinsic Brand
Business School 101 states businesses should stick with what they know. Of the top companies in the world, most do. Energy, automobiles, finance, technology, they are all focused on one market. Most businesses concentrate on one thing for the best of reasons: because their founders and leaders care about one thing, above all others, and they want to devote their lives to that thing. They’re not limited in their thinking. They’re focused.
Branson agrees. You should focus on what you know. You should also focus on what gets you up in the morning and for most people, that means you should focus on one core business. Yet despite its involvement in a mish-mash of different industries: Aviation, Health, Technology, Leisure – Space Travel – Virgin too, is focussed.
Its oddness comes from what it focuses on. Virgin focusses on giving customers a Virgin experience, and they make sure that this Virgin experience is a substantial and consistent one, across all sectors of its business.
The Virgin brand tells you that using this credit card is rather like using this airline, which, in turn, is rather like using this health spa, and listening to this record, and paying into this pension fund. What’s the family resemblance between these diverse goods and services? Well, it has something to do with the customer, because when you look at the range of things Virgin is involved in, a great customer experience is about the only factor common to all of them. And that really is all there is to it.
A brand should reflect what you CAN do. Too many companies want their brands to reflect some idealized, perfected image of themselves. As a consequence, their brands acquire no texture, no character and no public trust. You have to deliver, faultlessly and for all time, whatever your brand promises. Get the brand right from the start, by being honest with yourself about what it is you’re offering.
A brand will eventually date you, so as Virgin has, think of intelligently evolving it rather than tritely updating the logo, or the brand standards manual.
Lesson 4: Protect the Downside
Remember Virgin Cola? Branson though that a new entrant to the soft drinks market was viable and as the Virgin brand was popular, Virgin Cola would be a hit. How could they lose? Virgin lost by ignoring the gaping hole in this otherwise rather solid-sounding proposition: as a cola manufacturer, Virgin weren’t the people’s champion.
Virgin Pulse is another example. An early entrant to the digital music player market and competitor to the iPod, Virgin lost out when Apple introduced the cheaper and smaller iPod nano and slammed the door on anyone else trying to build significant market share beneath them. The Virgin Pulse bombed and Virgin had to write off $20 million.
However, the key observation from these failures – and others – is Virgin’s resilience and ability to learn from its mistakes and the fact they always had other parts of the business to support mis-adventures. What’s the most critical factor in any business decision? Basically, it’s this: If the venture crashes, will it bring the whole house tumbling down like a pack of cards?
Failure usually occurs when leaders avoid the reality of business. Never imagine that you are immune from big events. Make your small decisions in the light of the bigger picture, and you are at least pointing your craft in the right direction to ride out any storm. ‘Protecting the downside’ is one of the very few business tenets adhered to at Virgin.
Lesson 5: Prioritize the Delivery of Change.
So, the hat maker says to his son: ’Don’t worry, lad. People will always need hats.’ What he means is: ‘I will always need hats.’ Hats are his life, and he is proud of what he does. Is his attitude a healthy one? Of course it is. However, no business lasts for ever, and being true to your life’s work carries with it the risk that you may lose your future.
Virgin’s success is primarily down to the consistent way it’s delivered on its brand proposition. Closing the business of Virgin Music, the original Virgin company, the demise of its retail business and the examples of failed ventures above were discomforting to the company. But because the central proposition of the Virgin brand is about customer experience, Virgin has overall found it less painful than most to innovate products or services to satisfy changing consumer demands.
Change and getting to grips with an unfamiliar infrastructure is simply a question of workload – of mastering detail. A basic understanding of the business, gleaned by immersing yourself in every little detail for months or even weeks, is often enough to get you started.
However remember that its not only you that will be affected. The welcome changes you’re bringing in may well look like threats – and almost certainly will be threats – to existing interests. These interests may look rather paltry to you, but they’re life and death to some.
Remember to communicate, and pay attention to detail. You wouldn’t believe how far you can get, just by remembering and practising those two rules. One more thing: befriending your enemy is a good rule for business – and life. How close are you to your competitors? One day – because of the change that’s going on – they may be your best ally.
Lesson 6: Innovate and Innovate Again.
Every change ushers in unforeseen consequences both welcome and unwelcome.
Branson states: “It always tickles me when a spokesperson comes on the television to explain, with an earnest frown, that an ailing company is ‘a victim of its own success’ – as though it had undergone some sort of business equivalent of alien abduction. Success one day does not give you a free lunch every day thereafter. Obviously, you can’t plan for the unexpected. All you can really do is never let your guard down. It’s is not just hard work: it’s endless.”
Continuous innovation is the key and much easier for the smaller company. For sole proprietors and very small companies, the distinction between innovation and day-to-day delivery is barely noticeable and unimportant. It’s all just business, and creative, responsive, flexible business comes easier to you the smaller your operation.
For larger organisations, the separation of day-to-day business from the energy that created the company does cause problems. Suddenly, innovating is seen as something extra, something special, something separated from the activities the company normally engages in.
Virgin’s management style is unique, designed to both empower employees and avoid a culture of fear. Innovation can occur when the most elementary questions are asked and employees are given the resources and power to achieve the answers. Innovation must also be appropriate for your business. It must fulfil a need, and it must give you an edge over your competitors.
Innovation, however, must align to the underpinning brand. For example, Virgin Galactic sees Virgin turn innovation to space travel for the masses. What the Virgin brand will do – unlike any others in the commercial space market – is establish in the public mind that space tourism is for them: a service industry that’s going to be a lot of fun, while being as safe as people can make it.
The brand will also help to give the team global credibility as they build out the business to include environmental science work in space, satellite payload launching and astronaut training.
The secret to innovation and success in any new sector is watchfulness, usually over a period of many years. It’s hard to spin waiting and watching into a vibrant business lesson, but if there’s one thing you take away, let it be this: that Virgin’s sudden emergence as a leader in cutting-edge industries was decades in the making.
Lesson 7: Notebooks are for Notes.
Throughout his business life, Branson has always carried one item in his pocket: …….. a Notebook. To finish here is his justification.
“I’d advise every owner of a company to keep a notebook and jot down the things that need doing. If you’re listening to staff or customers, then write down the main points. If you’re visiting a factory or touring a new site or partying with your staff, use the notebook. When you’re busy with a lot going on around you, if you don’t write things down, I doubt you’ll be able to remember one out of twenty items the next day.”
There’s a lot to be learned from a man who has captured the businesses world’s attention like none-other, except for perhaps Steve Jobs. And as we compare these two business icons, one thing is clear, there are many ways to find success. But always know this – a passion for creating things that the marketplace will love, is always good business.