Richard Branson's Leadership Style and Virgin's Success

Introduction

Richard Branson rose from obscurity in England to become one of the most revered business leaders in the world. From a small record shop in London to an independent record label that signed revolutionary bands like The Sex Pistols and the Rolling Stones, Branson's company Virgin became a brand dedicated to doing things differently. The inspiration for Branson — whether it was selling music or selling tickets on Virgin Airlines — was always to fulfill a need that the public had. The style of leadership that Branson personified was servant leadership: his aim from the beginning was to serve consumers by getting them what they wanted at a price and quality they could not find anywhere else.

This paper discusses Branson's early leadership experiences, his personality, the values he has embodied and instilled in his company, the organizational culture of Virgin, decision-making behaviors for which he is famous, the effectiveness of his leadership style, how his ethics are reflected in his organization and decision-making process, and the effects of his leadership on Virgin's overall performance. The conclusion reflects on what can be learned from Branson as a leader and considers whether any decisions might have been made differently.

Early Experiences and Formative Lessons

Early experiences taught Branson a great deal. He dropped out of school to pursue a non-academic life, and his headmaster told him that he would either end up in jail or become a millionaire (De Vries, 1998). Branson actually did both. His early record shop performed well, but Branson had not mastered the finer points of income tax reporting, and he spent a night in prison after being charged with tax evasion (De Vries, 1998). Branson learned from the experience and deepened his awareness of business law so that he would not repeat the same mistake. As far as ingenuity was concerned, however, he was just getting started. His headmaster had aptly perceived in Branson a fire that would drive him all the way to the top of the business world — a fire consisting of personal charisma and a willingness to do almost anything to promote himself and his brand (De Vries, 1998).

Branson went on to establish the Virgin brand — a name that came from his own awareness of being a "virgin" when it came to running a business. Virgin would become a major record label, an airline, and much more. Branson's early lessons, both as a small record-shop owner and as a school dropout, taught him that all one truly needs in life is a little vision and a little motivation — and that big things can happen. At the same time, it pays to know the rules and observe all laws so as not to run afoul of them.

Personality and Impression Management

Branson's force of personality was really what drove him to succeed in the business world. He also had a keen sense of what people wanted. His initial record shop was a response to the demand among young people for more affordable records. His Virgin record label was a response to young, alternative bands not being signed by major labels because they were too far outside the mainstream. Branson recognized talent when he saw it. His intuition and people skills were extraordinarily high, allowing him to sign some of the biggest names in rock music, including the Rolling Stones and The Sex Pistols (Entrepreneur, 2008). In terms of growing his business and expanding the Virgin brand across multiple industries, Branson knew that technical skills alone were not sufficient. He needed — and possessed — great interpersonal skills, which Robbins and Judge (2017) acknowledge as essential for optimal management of organizational behavior.

Branson understood intuitively that a leader must be able to develop strong relationships with followers in order to achieve organizational goals. His personality attracted the awe, respect, enthusiasm, and admiration of those with whom he came into contact. His dynamic energy and willingness to put himself out there — no matter how unconventional he looked or sounded — enabled him to be exceptional at developing relationships, communicating his vision, and serving his workers so that they, in turn, would serve the vision and achieve the goals he set.

He also understood the power of making an impression. As Ladkin (2008) points out, Branson engaged in impression management: the process of taking specific steps to convey a specific impression to others. For example, when he was trying to establish Virgin as a brand, he would perform small tricks to give important clients the impression that he was the "real deal." One trick he frequently used was to call important clients from a pay phone, having the operator connect the call so that the client would hear, "I have Mr. Branson for you" — leading the client to assume Branson had his own telephone service and was therefore a highly successful label owner (Ladkin, 2008). Another trick involved having a team member shout across the room, while Branson was on the phone with a client, that an important figure in the British government was on the other line (Ladkin, 2008). Small maneuvers like these were part of Branson's personality and his penchant for self-promotion — the very same penchant his headmaster had recognized would either land him in jail or make him rich and famous.

Values and Servant Leadership

Branson's values were best articulated when he stated that "customer service is everything in the end" (Gallo, 2013). Though he engaged in self-promotion and small tricks, he knew that the product and service had to ultimately close the sale. Unless the service was genuinely special, no consumer would remain loyal for long. For that reason, Branson focused on providing exceptional customer service through the Virgin brand.

He also knew that to please customers, a leader first had to please his own workers. That is why he stated, "If you take care of your employees, your employees will take care of your customers, and your customers will take care of your shareholders" (Entrepreneur, 2008). Serving others was the ultimate value in Branson's eyes. Publicity stunts could get people's attention, but they were just marketing ploys; there had to be real substance behind what one was doing, or one would, as the headmaster rightly predicted, end up in jail. Branson avoided substantial legal trouble because he offered genuine service and backed up his publicity with real quality.

Branson was, in the end, a servant leader. He employed emotional and social intelligence to understand what consumers wanted and how he could support his teams and organizations in delivering it. He recognized the importance of making an impression and knew that clients want to work with people who are themselves focused on success. He understood that the company one keeps ultimately shapes the company one builds. The essence of this kind of intelligence lay in his ability to read people and environments. He saw the power that music was having on his generation and found a way to bring great music to consumers when established business leaders showed no interest. When it came to launching an airline, he did so simply because he felt that existing airlines were not doing a good enough job getting passengers where they wanted to go on time (Zeveloff, 2011).

Branson had no interest in exploiting people or chasing a dollar in the same manner as countless faceless corporations piggy-backing over one another toward the same goal. He looked at businesses caught up in the rat race and was frustrated by the way they operated — putting profits before people. Branson's goal was to put people before profits, and in doing so he achieved immense financial success. But the goal was never to make a fortune. The goal was to serve others by doing for them what no one else would or could (Gallo, 2013).

Conclusion

What this examination of Richard Branson's leadership at the helm of Virgin reveals is that being a visionary is really only half the battle. To be an effective business leader and to promote sound organizational behavior, one must truly love making a difference and doing positive things for people. Everyone in the world is in need of something, and a leader who can recognize that fact and provide what is needed is a leader who puts people first. Branson is precisely such a leader.

It is also clear that being rooted in ethics is essential for any business leader. Branson did not give ethics much thought initially — at least not in terms of ensuring all taxes were paid. However, his early run-in with the law drove the point home that ethical leadership is a must. A leader must lead beautifully and guide others meaningfully toward the good life — which is, ultimately, where everyone wants to be.

By treating others as he would want to be treated, Branson set the tone early and embraced the Golden Rule. This is the essence of his organizational culture, and it is a culture that fosters positive organizational behavior. His devotion to corporate social responsibility shows: he attracts like-minded people who want to make a difference in the world rather than sit idly by while the status quo marches on.

Branson also recognized the impact of impression management — arguably one of the most surprising and admirable aspects of his story. His willingness to use small tricks to make a big impression on clients was clever and creative. Yet he knew he had to back up those impressions with quality products and service; otherwise, none of it would matter at all.

The one decision that might have been made differently, however, is the sale of Virgin Records to keep Virgin Airlines afloat. Running an airline is a heavily commercial enterprise, and Branson is anti-establishment to the core — he loves shaking things up and doing things differently. The record label embodied that ethos more purely than almost any other Virgin venture. To sell it in order to keep a struggling airline afloat seems to go against the grain. Branson wanted to see his airline succeed, and that ambition is understandable. However, from the perspective of staying true to one's core values — and Virgin began as a record company — selling the label to prop up a commercial airline suggests a deviation from those foundational values. That said, Branson's desire to transform the airline industry and keep his dream alive is entirely understandable, even if the trade-off is one a different leader might not have made.