Richard Branson\'s Leadership Style: Transformational Leadership Sir

Richard Branson's Leadership Style: Transformational Leadership

Sir Richard Branson has proven to be a transformational leader in the airline industry. The edgy, unpredictable and youthful image of Virgin has garnered the company a kind of a 'cult following,' despite increasingly fickle consumer tastes. There have been a number of disasters, however, partially generated by Branson's shoot-from-the-hip style. Bucking conventional wisdom, Branson held onto underperforming Virgin stores and unsuccessfully tried to challenge Apple's iPod with a Virgin MP3 player. However, Branson's willingness to stay true to what he believes is right is what makes him so inspiring. He has crafted a unique image for his company, with a distinct ethos that has a clear system of values. This is exemplified in Branson's promote-from-within strategy and an emphasis on hiring people because of their personal qualities, rather than specific experiences. Branson's positive and forward-thinking attitude is reflected in the people he chooses to surround him.

Similar to Steve Jobs of Apple, Branson focuses on what he thinks customers need, rather than what market analysts tell him they say they want. But one of the aspects of Branson's leadership that is so distinct is his stress upon treating employees well. In fact, in the company hierarchy, employees come before customers. It is employees who provide the service that 'brands' Virgin as Virgin. Customers will stay loyal if employees are happy and productive. This will also translate into higher profits for the company.

Branson's strategy of keeping employees happy is not unique to Virgin. Southwest, an American-based airplane company has a similarly quirky philosophy and also places a strong emphasis on hiring the right people. Branson's individualistic style of leadership seems well-suited to American companies, given America's emphasis on individualism as part of its national ethos. Also, all companies in all industries must fight to distinguish themselves from their competitors. They must have a cohesive sense of mission that all employees understand. Offering high-quality service is increasingly essential to generate a competitive advantage.

Recommend a different leadership style

Branson's leadership has proven to be effective at Virgin. It is the antithesis of the transactional style of leadership, which only seeks to motivate employees through a 'carrot and stick' approach, in which activities by employees are rewarded and punished in an external fashion. Branson is a risk-taker and enjoys soliciting opinions from employees rather than simply telling them what to do. He is known as 'Dr. Yes' because of his willingness to listen and to try new things. The downside to this is that some poorly-tested ideas may be implemented, diverting resources away from potentially more lucrative projects.

Branson could thus benefit from introducing a rewards-based system for employees who generate the most value-enhancing ideas for the Virgin brand and use more data-driven comparative metrics to track the progress of different projects. This would give employees additional motivation to innovate but also encourage them to generate more substantive information to support their contentions. It would also empower the company to review what ideas have 'worked' and not worked over time.

How Branson would develop and lead a global team working on a major project

Regardless of the capacity in which he works, Branson would likely use a 'brainstorming' approach to innovation, rather than trying to cautiously imitate his competitors or to confine his organization to one or two competencies in a singular fashion. He is also extremely distrustful of existing market research regarding what consumers say they want or what has worked in the past. The market environment is constantly changing, and Branson wishes to remain several steps ahead of the competition, rather than playing catch-up.

With this in mind, regardless of the nature of the project, Branson would strive to hire people with a similar mentality as himself. He would delegate critical responsibilities to them, to give them a sense of investment in the project, but remain a forceful leader in the way he set the tone for the project. He would seek to generate as many ideas as possible, and not become stymied if one or two did not 'work out.' He would have a clear sense of the goals and the unique value conveyed to the customer by the product. Virgin is noteworthy because of its simultaneous emphasis on quality and value as an airline, and all of Branson's employees are aware of this. As freewheeling in spirit as an enterprise might be, Branson ensures that it remains true to this spirit of democracy and fun -- his personal, quintessential values as well as those of Virgin.