Richard Branson's Still On The Rise
Richard Branson sees savvy as the key vehicle for shooting skyward.
Branson, 58, is the man who made the Virgin brand — with over 300 firms that carry the Virgin name.
These range from record labels to airlines to megastores and have made him among the world's 250 richest men, says Forbes magazine, with a net worth is $4.4 billion.
In a chat with IBD, Branson, who quit school when he was 15, said that "you get savvy by getting out there in the real world and being in the jungle. You get savvy by surviving in the jungle and learning from our mistakes and successes."
Michael Faith has a unique take on Branson's drive. Faith is CEO of San Francisco-based Headsets.com, a $30 million retailer that specializes in phone attachments. He met Branson two years ago when Faith organized a charity dinner that honored the Virgin boss. They discovered they shared an affliction.
"Like me, he is dyslexic," Faith told IBD, referring to the reading affliction. "This probably works in his favor in that dyslexics don't see the same boundaries that 'normal' people do."
Branson agrees, contending that what most people consider a negative can be turned into a positive.
"If you've got dyslexia, it forces you to leave things that you're not really good at for others to do," he said. "I've become a good delegator and found people who can compensate for my weaknesses. And that allows me to concentrate on areas where I excel.
"I don't want a report; I want a one-page summary. As a dyslexic, when I decided to launch an airline in America (Virgin America), I didn't ask two or three accounting firms to do reports on whether the airline will or won't be profitable. I know that American airlines are dreadfully run, and if I go in there and do it right it will be successful."
Branson tends to trust his gut, and in this case his insides were correct. A year after its launch, readers of Conde Nast Traveler magazine voted Virgin America best American domestic airline.
These days Branson is chairman of Virgin Group, which bulged to 50,000 employees and $20 billion in sales in 2007. He attributes much of that rise to his workplace approach.
"Too many companies put the stockholders first. But I believe if you can gather a well-motivated group of people and put them first, they'll be happy, the customers will be happy and the stockholders will be happy as well," he said.
What does he look for? Attitude over job skills. Branson argues you can always learn a job, but you can't learn a positive outlook.
"It's important not to put people in slots," he said. "I think it's very important that you don't see a switchboard operator as a switchboard operator forever. It's also important that you promote from within as opposed to importing so-called experts, which demoralizes everyone in the company."
Take the manager at one of Virgin's hotels in Morocco. She started her career as a masseuse in a Virgin Atlantic aircraft. Or a woman who was managing director of a Virgin recording division. She started at the company as a cleaning lady.
Sandy Gluckman, a Texas-based executive consultant and author, lauds Branson as a leader who "sets high standards and supports people in achieving goals."
Branson feels it's "important to give our staff the freedom to interact with customers."
Simply put, Virgin tries to make customers happy. On its planes, attendants can offer legitimately dissatisfied customers a free flight.
When Virgin Media (VMED) — a combination of three telecom firms — started in 2007, Branson discovered that the customers of one of the units, NTL, weren't satisfied. He saw that NTL's reps dealt with complaints by reading from scripts.
Branson tossed the scripts, told the reps to resolve every issue in one phone call and plowed resources into boosting the operation.
That was just at NTL.
Overall, Branson makes his managers regularly leave their desks and hit the field. He also insists they sign checks for an entire month twice each year. That helps managers see the waste, leading to cost cuts.
Branson does the same. He signs checks and visits Virgin firms regularly, all the while writing down employee and customer ideas.
"A good leader is someone who listens," he said, "Some leaders just talk nonstop. I wonder how they ever learn anything. Being a very good listener, asking a lot of questions, you learn a lot."
The suggestions he hears include everything from dirty carpets to the choice of cheese in what he calls his airline's upper class.
These "details are crucial," he said. "Exceptionally run companies are ones that get the details right."
Branson was raised an hour southwest of London, where he lives now. He didn't do well in school, yet showed an aptitude for entrepreneurship — starting a Christmas tree business, raising parakeets and running a student magazine.
Branson's first Virgin company was Virgin Records, a mail-order firm that made money by discounting albums.
In his new book, "Business Stripped Bare," Branson wrote that innovation is a plus, "but being the best is what really counts."
Branson warns against falling too much in love with an idea; if success isn't in the cards, fold 'em.
He did exactly that after putting $100 million into luxurious seats for Virgin's trans-Atlantic service. At about the same time, 2000, British Airways came out with a better seat. Branson might have held on to his seats until they were fully depreciated, but made the tough call: Dump them and invest in a more comfortable version. "We now have the best business-class flat seats in the world . . . and we have created a product our rivals can't match," he wrote. "We have easily recouped our losses with this decision."