Richard Branson's entrepreneurial leadership and corporate innovation at Virgin

Business

Richard Branson: A Corporate Maverick and Entrepreneurial Magician

Richard Branson is one of the world's leading entrepreneurs and corporate success stories. His Virgin brand is recognized around the Globe. Virgin is a leader in a wide variety of fields, in everything from media, to travel and transportation. Much of Virgin's success and reputation is owing to the image and qualities of its leader and founder _ Richard Branson. Branson has made a name for himself by portraying himself as a trendy, perpetual young person, who knows what the market wants, because he is that market. Branson has taken popular concepts such as environmentalism and exploited their trendy aspects to showcase his own products and ventures as cutting edge and desirable. The Virgin name added to any venture equals spectacular success. Branson projects the image of leader who does not care about tradition or traditional decorum - he is open and accessible to his employees and colleagues - yet he is also a hard-nosed businessman who knows that innovation and "in-ness" sell. Catch the trend and you catch the market.

Background

Sir Richard Branson is perhaps one of the best known entrepreneurs of our time. The ruler of a corporate empire, the Virgin Group, that has encompassed Virgin Airways, Virgin Records, Virgin Mobile, Virgin Galactic, and just about anything else with the Virgin trade name, is associated with daring decisions, and an often unconventional style. The British-born innovator and industrialist - now one of the wealthiest people in the United Kingdom - started from small beginnings. Branson himself lays the foundation of the Branson Legend in the opening chapter of his autobiography, Losing My Virginity (Branson, Virgin.com, 2006) where he describes a childhood imbued with challenges purposely set by parents intent on building their children's character. Relates Branson, "Our challenges tended to be physical rather than academic, and soon we were setting them for ourselves." ("About Richard," Virgin.com, 2006) the young Branson was taught to believe that only by trying new things, and assaulting problems directly, could one come up with solutions. Branson's first successful venture was the now world-famous Virgin Records. The name itself is a symbol of its founders irreverence and willingness to push things beyond their commonly accepted limits.

WHEN 20-year-old Richard Branson selected the name Virgin for his new mail order record company - due to his business inexperience, not any sexual frustrations - the name garnered attention for his start-up. But the name was just one part of the image that Branson was creating: of an innocent, innovative, irreverent company run by the innocent, innovative, and irreverent Branson.

A www.questia.com/PM.qst?a=o&d=5005835617"("Mirror Jobs: The Secrets of Their Success; MAKE the MOST of OPPORTUNITIES," 2004, p. 56)

The young entrepreneur's life experience had already taught him the importance of setting goals, and of creating an image - what would come to be called branding.

In building up Virgin Records during the 1970's, Richard Branson was careful to focus the growing company's attentions on the ever-expanding youth market. Not wanting Virgin to be considered just another Rock label, he signed the (at the time) outre group, the Sex Pistols, (Hopkins, 2006) and so catered to the cutting edge in pop music. Billboard Magazine has,

Noted the multiple ways in which the group is important as a historical force that has disrupted the rock industry; the Sex Pistols are given credit for allowing many new bands to emerge in their wake (P. Jones 68). Further, Virgin's Richard Branson claims that signing the band seemed especially fit for a "truly independent" company (Sloop, 1999, p. 51)

Independence has remained essential to Branson's business philosophy, and his impelled many of his decisions over the years. Since the founding of Virgin Records (a company that has since been sold off), Branson has expanded into innumerable other ventures, always with an eye to serving the market in ways that are unexpected. Branson's conglomerate might be seen as an all encompassing lifestyle provider. The Virgin group provides and runs limousine services, trains, bikes; makes cosmetics, runs health clubs, juice bars; provides vacation packages, and even manufactures lingerie. (Hopkins, 2006) in short, Branson and his Virgin Group are about today's trendsetters and those who would be like them. The Virgin Group anticipates - what might even say - creates needs to serve.

Richard Branson and his Virgin Group are currently positioned as one of the leaders in the global marketplace. Though Virgin does only about ten percent of its business in the United States (Hopkins, 2006), the Virgin name is one of the most recognizable brands across the planet. Key to Virgin's success has been the name itself, a tool used by Branson to parlay relatively small investments into huge fortunes almost overnight. Since the 1992 sale of Virgin records, he has used much the same technique to repackage ventures with the Virgin name and turn them into profit-making machines:

In just six-and-a-half years, he's turned an initial outlay of [pounds sterling]50 million into [pounds sterling]1 billion. It was a typical Branson play: he put in not very much; a partner - in this case T-Mobile - had already paid billions of pounds for the licensing and technology; the network was stamped Virgin; and more than five million customers, many of them young, were attracted to its hip image. Same with the airline, where Singapore Airlines owns 49% of Virgin Atlantic. ("How Does He Do," 2006, p. 29)

The Virgin Brand is strongly associated with upmarket quality. The importance of this factor reveals what has been, for many years, a significant trend in the marketplace - the creation of brands meant to appeal to the upwardly mobile. Said Branson, "One of the advantages Virgin has had is that I've always determined to go for the best, so we have Virgin Upper Class. Similarly, a TV company such as NTL can adopt our brand because it's a quality brand." ("How Does He Do," 2006, p. 29) the company has grown to its present size by capitalizing on the perceived qualities of its products. It does not matter that Virgin has never been involved in this or that particular business before putting up its relatively small share of the funding. Immediately upon hearing that Branson is involved, investors and consumers feel assured that the product or venture will be successful.

The continued expansion of the Virgin Group is based, as well, on a notion of transformation. Virgin brings not merely an existing set of qualities to a new product or venture, but also a set of expectations in regard to how that product or venture will be changed by receiving the Virgin "stamp of approval." Richard Branson has made billions by taking seemingly mundane industries and making them appear cutting edge. Trains are hardly new inventions - certainly not the smoke-spewing diesel-engined behemoths that replaced the even earlier steam driven models on many nation's aging tracks. However, a super high-speed, clean and environmentally-friendly electric train - now, that is another proposition. It is that kind of transformation that the Virgin name makes possible. Richard Branson has strongly associated his Virgin Brand with the current awareness of the need to conserve and protect the Earth's natural environment. Virgin is eco-friendly. The corporate name is connected with the idea of a "Perennial Civilization: a free, peaceful, healthy, and sustainable society." (Lessem & Palsule, 1999, p. 16) Such an image enables anything linked ot Virgin to appear not only good, in the broadest sense, but significantly, to appear good in a popular sense. It is very "in" to be concerned about the environment, about the sustainability of the planet, and to be concerned with developing a human culture that is both humane and responsible in its use of natural resources. Furthermore, and quite important in terms of bottom lines, these ideas are all very much in vogue among younger consumers - the most coveted share of the market.

Leadership Analysis

The phenomenal success of the Virgin Group has generally been attributed to the management style of its founder, Richard Branson. Branson's eye for knowing what the market wants is but one part of the equation - Branson himself is the other. From the beginning, he has approached management in a non-traditional fashion, attempting to bring leadership out into the open. He believes in interacting with his employees and colleagues. As he says, think the stereotype you see in films of businessmen who tread all over people to get to the top is not actually a correct stereotype. The world is a very small place. If you have a good, trusted relationship, a good reputation, people will come back for more. Sometimes it is worth not squeezing the last penny out of a deal, leaving a bit behind for the other side, striking a fair balance. (Glancey & McQuaid, 2000, p. 94)

The technique is one of understanding people as individuals. One must build relationships, act in a responsible manner, and see the creation of appositive business environment as worth more, in the end, than a slight increase in profits in the present.

Branson cites his early management decisions at Virgin Records as prime examples of this people-oriented approach:

At Virgin records we attracted some of the best artists because they liked the way we ran it. We never lost a major artist in 20 years which is quite rare in the record industry. We dressed as we felt comfortable. We worked in pleasant buildings rather than office blocks and people working there had fun, enjoyed the job, enjoyed challenging, taking on the major record companies. (Glancey & McQuaid, 2000, p. 94)

If Virgin Records was going to about catering to the musical tastes of a new generation, then the company that supplied those wants was going to have to be a company that operated in accord with the views and aspirations of that new generation. Traditional business attire and the smug accoutrements of the typical corporate headquarters would be dispensed with in order to create an atmosphere more in tune with the nature of the business; its employees, and its clientele.

For many years, Branson has cultivated an almost anti-corporate image. He shows up for meeting wearing jeans and a short-sleeved shirt and his hair is unkempt. He likes to tell people that he dropped out of school at fifteen (Garten, 2000, p. 115), rather than play up his education background as do many other CEO's or persons in positions of influence. The ambience at corporate headquarters is casual, relaxed, and non-threatening. The powerful owner of one's of the world's mega-corporations likes people to know that he prefers carousing with ordinary employees to black-tie dinners and formal parties:

Last night, when I came to New York, I was very tired," he said. "But I made absolutely sure that I took one hundred and fifty [of my employees] out -- not to a formal dinner but to Mr. Chow's [so that we could] let our hair down, get drunk and have a good time. But I also sat down and listened and talked to them and made notes which I dealt with the next day. And it's often... The little things that can turn a positive workforce against a company. (Garten, 2000, p. 115)

Richard Branson likes to show himself off as an outsider bucking the establishment and its ideas. He will use familiar language, and does not refrain from expressing dissatisfaction with figures presumed to have not kept their promises to the public or to the organizations they manage and control. Regarding a scheme to take over the Royal Opera House,

Richard Branson ("Virgin MegaSing"). No, when we are sitting round the conference table in his office he produces some pop paper, whose front cover has a pic of the Master and the headline "You cheated us Tony, now piss off!" (Charles, 1998, p. 9)

Branson is the "everyman" at the helm of a multinational corporation.

Perhaps a good part of Richard Branson and Virgin's success can be attributed to seamless blending of an apparently unconventional leadership style with the traditional attributes of the successful corporate executive and entrepreneur. While Branson is careful to let his employees, associates, and the public see the unconventional leader who says what he thinks and does what he feels is right, there is also another side to the business genius.