entrepreneurial leaders, charismatic Richard Branson and visionary Muhammad Yunus, and discusses their leadership styles and major business principles.
Who would have guessed that this high school dropout would become a billionaire and world-renowned entrepreneur? Born Richard Charles Nicholas Branson on July 18, 1950 in Surrey, England, Branson launched his first successful business at age 16. Branson struggled with dyslexia until he dropped out of boarding school to launch a youth culture magazine called Student. The publication was run by students, for students and sold $8,000 worth of advertising in its first edition. The first run of 50,000 copies was disseminated for free, after Branson covered the costs with advertising (Bio, 2011).
Branson went on to become the founder of the Virgin Group, an international conglomerate of some 350 companies, all of them combining for more than $8 billion in annual sales. He became Sir Richard Branson when he was knighted by the Queen in 1999 for "services to entrepreneurship." (Sukhiy, 2007).
Branson credits the origins of his leadership style to his mother, who taught him to stand on his own two feet. At age six, his mother would shove him out of the car and tell him to try to find his own way home. At age 10, she put her son on a bike to ride 300 miles. According to Branson, these lessons built character as well as endurance and leadership qualities ("Importance," 2005).
Branson believes he learned leadership through trial and error since founding his first company at age 16. When asked what is the most important quality of a good leader Branson responded "Having a personality of caring about people is important. You can't be a good leader unless you generally like people. That is how you bring out the best in them." Branson reinforces that message with all his CEOs and top managers ("Importance," 2005).
Branson said his goal is to turn Virgin into "the most respected brand in the world." He also describes his criterion for expanding into a new industry: "Our criterion is will it fulfill the Virgin yardstick of being good value for the money? Will it enhance the brand by bringing great quality? Will we have fun doing it and can we make it profitable? If those criteria work, then we'll seriously look at a new industry" ("Importance," 2005).
Branson manifests his philosophy of leadership by way of delegation and time management skills, allowing him to own 350 companies and get everything done. There are no formal meetings, but rather informal lines of open communication. For the companies in which he holds the post of chief executive, Branson writes his staff "chitty-chatty" letters to tell them everything that is going on and encourage them to write him with suggestions. Every employee has Branson's phone number and home address and can pitch new product ideas directly to him (Sukhiy, 2007). This informality is another trait of the charismatic leader.
He also credits his philosophy of "look for the best and you'll get the best" with helping him build an empire that is recognized for its culture. Branson also believes in praising his employees: "For the people who work for you or with you, you must lavish praise on them at all times." Branson feels strongly that if an employee is not excelling in one area of the company, he or she should be given the opportunity to do well in a different Virgin Group job. Firing an employee is seldom an option ("Importance," 2005). Showing confidence in his employees is another trait of charismatic leaders.
Branson's motivational strategies extend to innovative ideas. He believes the key to encouraging innovation within the Virgin ranks is to listen to any and all ideas, and to offer feedback. Also, Branson has developed a level of trust with his top managers by setting the direction and then stepping back to let them navigate ("Importance," 2005). A relationship of trust is another characteristic of the charismatic leader.
Professor Muhammad Yunus, winner of the 2006 Nobel Peace Prize, established the Grameen Bank in Bangladesh in 1983, driven by his belief that credit is a fundamental human right. His objective was to help poor people escape from poverty by providing loans on terms they would find manageable, and by teaching them a few sound financial principles to empower them to help themselves (Muhammad Yunus, 2006).
Starting with Dr. Yunus' personal loan of small amounts to destitute basket weavers in Bangladesh in the mid-70s, the Grameen Bank has advanced to the forefront of a growing worldwide movement toward eradicating poverty through microlending. Replicas of the Grameen Bank model operate in more than 100 countries worldwide (Muhammad Yunus, 2006).
Born on June 28, 1940 in the seaport city of Chittagong, Professor Yunus studied at Dhaka University in Bangladesh before receiving a Fulbright scholarship to study economics at Vanderbilt University. He received his Ph.D. In economics from Vanderbilt in 1969, and then became an assistant professor of economics at Middle Tennessee State University. After his return to Bangladesh, Yunus headed the economics department at Chittagong University (Muhammad Yunus, 2006).
As a young professor teaching at Chittagong University, Yunus developed the idea of microloans, a credit system that enabled poor Bangladeshis to borrow small amounts as part of a peer group, thus ensuring that they would repay. Yunus began studying the economic aspects of poverty in 1974 as famine swept through Bangladesh. Yunus decided that what the poor needed was access to capital that would help them build small businesses as an alternative to borrowing from moneylenders that charged usurious interest. In 1976 Yunus began a program of micro loans, a credit system designed to meet the needs of the poor in Bangladesh. Borrowers, whose loans might be for as little as $25, join lending groups where support from group members, as well as peer pressure, coaxes borrowers to repay their loans. The Bangladesh government made the Grameen Bank Project an independent bank in 1983, with the government owning a minority stake (Bio, 2011).
Yunus ran Grameen Bank, a leading advocate for the world's poor that has lent more than $5.1 billion to 5.3 million people. The bank is built on Yunus 'conviction that poor people can be both reliable borrowers and avid entrepreneurs. Grameen even has a project called Struggling Members Program that serves 55,000 beggars. Under Yunus' leadership, Grameen has spread the idea of microcredit throughout Bangladesh, Southern Asia, and the rest of the developing world (Gangemi, 2005). Yunus' ability to manifest his vision to achieve such results is a truly remarkable example of visionary leadership.
Yunus comments "At first I didn't think what I did had any significance in a broader context" (Gangemi, 2005). When Yunus started Grameen, he wanted to turn traditional banking on its head. One of his first moves was to focus on women, because they are most likely to advocate for family needs. Yunus' approach represented a radical step in a traditional Muslim society. And it took six years to reach his initial goal of a 50-50 gender distribution among the bank's borrowers. In 2005, 96% of Grameen's borrowers were women. "If banks made large loans, he made small loans. If banks required paperwork, his loans were for the illiterate. Whatever banks did, he did the opposite," marveled San Daley-Harris, director of the Microcredit Summit Campaign. "He's a genius" (Gangemi, 2005). Visionary leaders are especially noted for creating strategies that are outside the box of conventional thought.
Yunus possessed a visionary style of leadership, as evidenced by his rethinking of the relationship between the rich and the poor. Yunus took elementary economic wealth creation methods and made it available to the very poor and disadvantaged. Yunus' leadership style is also evident in the way that new employees of Grameen Bank were selected and trained. Yunus required that new hires had no prior traditional banking experience, preferably no work experience at all and that they be from a disadvantaged background. In this way Yunus was able to train new employees to participate in his vision of microcredit delivery (Zavala and Kabuye, n.d.).
Yunus is also deeply committed to servicing his clientele and as a result, successfully established an organization that also thinks outside conventional norms. To reduce the fear that the poor and illiterate might feel in coming to a bank, Grameen staff visit their clients instead. In fact, staff members are punished if they are seen at the office. Bank philosophy is that staff is not paid to sit around at the office, but rather to be with the people. Likewise Grameen requires very little proof of collateral to take out a loan. Yunus' strong dislike for bureaucracy and creative thinking in devising solutions to combat poverty show his entrepreneurial approach to making a positive impact on society by changing millions of lives for the better (Zavala and Kabuye, n.d.).
Leadership Style I Identify With
Much as I admire Dr. Yunus, I identify more with Richard Branson's charismatic leadership style. Branson's…