Learning From Sir Richard Branson
August 9, 2012 12 Comments
Here is what Sir Richard has to say:
1. On big companies vs. small companies
“Small is beautiful.” Sir Richard doesn’t see size as a competitive advantage.
His Virgin Records label is not the biggest in the music industry, but in 1992 it attracted the Rolling Stones. Virgin Airlines has a mere 37 airplanes versus the 700+ maintained by its competitors. It’s better to spin off a company into a second smaller company (as Virgin Atlantic spun off Virgin America) than grow larger, Sir Richard believes, because smaller companies can stay both more nimble and more customer-focused. They can also maintain the style and “cheekiness” of their early trailblazing if they stay relatively compact.
2. On the foundation of a brand
Sir Richard believes that “outstanding brands are built around great people who deliver consistently great customer service every day.”
Ultimately, a brand is only as good as the products behind it. A business’s top priority is to get its products right, and then wrap a great brand around it.As Sir Richard puts it- “You can’t kid people.”
3. On his inspiration in nature
As Sir Richard puts it,Virgin has a “lot in common with bumblebees.” The aerodynamics of the bee’s biology suggest that it shouldn’t be able to fly. “But it just goes out and does it.”
4. On seeing things through your customer’s eyes
Sir Richard’s inspiration for Virgin Airlines grew out of his own miserable experience as a passenger on commercial airlines replete with “dreadful service.” Virgin went head-to-head against the “well-oiled marketing machines” of the “big, boring competition,” as he says.
“We didn’t know how much we didn’t know.We had no idea how serious airlines were supposed to be run—so we looked at it entirely from the passenger’s perspective.”
5. On positioning
Virgin decided to compete on service—rather than price—as a way to set itself apart from other air carriers. Virgin also “focused on what we knew best—entertainment,” as Sir Richard says, positioning itself as a “well-priced product [that would] make flying fun again” via perks like onboard bars, massages, power plugs at every seat, the flexibility to order food in your seat when you want it, and so on.“We weren’t out to be the biggest, but definitely to be the best.”
6. On hiring
Most companies look for employees with relevant experience first. But from its outset,as Sir Richard puts it, Virgin “hired friendly over experienced”. It sought out employees who had fresh perspectives, great attitudes, and were eager to have fun, and then trained them to do their jobs. In his opinion,those who arrived with experience from other air carriers were those who essentially “had learned how to not do their jobs”.
Sir Richard also believes in promoting from within. “We try to take people on from within”because “we know their weakness and strengths.” What’s more, he often promotes people above the position they expect. “We take a risk. You can start off as a cleaning lady and go to the top.” Also, according to him,hiring from within “doesn’t demoralize people in the company.”
7. On listening to customers and employees
Sir Richard is well known for his personable management style. Early on, he wrote monthly letters to all Virgin Group employees, and every employee was given his home telephone number. He extends that openness to customers, too, at times randomly calling select customers to inquire about their experience on his airline, for example.
Have a “fearlessness of engaging with people,” Sir Richard says, because “conversations can change the world.”“We like to listen to our customers, because it’s an opportunity to be creative” .
8. On social media
For businesses, social media offers both challenges and opportunities, according to Sir Richard. For example, an unhappy Virgin passenger might use the megaphone of a social media platform to complain, when a push of an onboard call button would resolve the issue. But at the same time, social channels can help your customers find one another and allow them a chance to interact, which makes an onboard community on an airplane, for example, a “smaller, warmer, friendlier” place.
Sir Richard believes that when businesses carefully monitor and respond, social media helps businesses anticipate needs. For example, when a Virgin passenger expressed his concern on Twitter about whether he might make his connecting flight, Virgin staffers made sure he made it.
Social channels can also offer immediate feedback on what your customers will respond to: When Virgin America announced a fare sale on Twitter, it became the fourth highest sale day in the airline’s history.
9. On having a sense of humor
Sir Richard believes that approaching business playfully, and with a healthy sense of humor and fun, is critical. Virgin “built its business on free advertising, and largely with a sense of humor”. According to him,a “cheeky” approach to business and “fun, gentle digs at competitors help put your name on the map.
10. On failure
According to Sir Richard,entrepreneurs take risks and as such “mustn’t be afraid of failure.” Failure doesn’t damage a reputation as much as some fear. And anyways, it’s more fun to challenge yourself to succeed than to not act out of fear of failing, especially as success begets success: “If you can run one business well, you should be able to run any business well.”
True entrepreneurs “love challenging themselves, and love challenging the people around us,” especially when it comes to succeeding in otherwise established markets, where most businesses are “diabolically run.”
11. On his fascination with space travel
Sir Richard founded Virgin Galactic in 1990 with a goal of making commercial space travel viable. His fascination with space travel took root when he (along with the rest of the world) watched the first manned spacecraft land on the moon in 1969. After seeing Apollo 11, he “assumed I’d be going into space.” And decades later he worked to develop a reusable, safe spaceship that could make suborbital spaceflight a reality.
12. On the importance of company culture
Sir Richard believes that everything comes down to the people you hire to run your company. Those running the company have to love it, and they also have to believe in the products you sell. The CEO must care as much about the cleaning ladies and switchboard operators as well as the company’s other directors.
The Virgin Group tries to maintain an equal number of men and women on its boards and in it’s staffing. Too often corporate boards are overwhelmingly male, but sir Richard believes companies benefit from a more equal split.
13. On partying with employees
It’s important for higher-ups to get to know people on a personal level, outside of work. “We encourage as much partying as possible”.
For executives, that means staying at the same hotel where your staff stays, and hanging out at the bar with them, after hours. “You’ll get the honest feedback at a bar”,as Sir Richard puts it.
14. On success
According to Sir Richard with success comes wealth and fame, but also enormous responsibility to help other people and improve the world we live in. He now spends most of his time on humanitarian and social issues.
15. On which business is his favorite
According to Sir Richard,he doesn’t run any business daily, as he’s become expert at the “art of delegation”. But those businesses that interest him most tend to be the ones that are struggling.
“The businesses I become closest to as those that are like a child getting bullied; I tend to spend more time with them than with other businesses” to help steer them onto the right track.