Richard Branson: Business Stripped Bare

Later on, we’ll be returning to Virgin’s African adventures, and some of the wider political questions this story throws up. For now, though — since we have to start somewhere — let’s start at home. Let’s start with you. Wouldn’t it be wonderful if your company were full of people like the seamstress who accosted me that day in Ulusaba? Think what you could achieve.

Well, there’s no reason why it can’t be, and in this chapter I’m going to tell you how Virgin tries to foster the entrepreneurial spirit at every level of its business.

First of all, take a cold, hard look at your present surroundings.

Are you really going to be able to empower the people around you? I ask because, for all I know, your workplace may be a sink of despair. And while we’ve had a few notable successes in this area, it is, I would say, superhumanly difficult to change a company’s existing culture.

Virgin learned this the hard way in 1996, when we acquired Euro Belgian Airlines and turned it into a cheap, cheerful, go-getting budget airline called Virgin Express. Well, that was what Virgin Express was supposed to become. We rebranded the airline and floated 49 per cent of its stock on the Brussels and NASDAQ stock markets. We knew it wouldn’t be easy, because we’d be in competition with solid low-cost airlines such as easyJet, Ryanair and Go, with all the benefits they had of being based in the UK. Not only that, we would be based in Belgium (remembering how much it cost us to operate there brings tears to my eyes to this day). Nevertheless, I believed that with a quick transfusion of the Virgin spirit, we could make a go of it.

Boy, was I wrong.

Our Brussels-based low-cost carrier was one of the toughest challenges we have faced. Debilitating European regulations on the thirty-five-hour working week and high fixed costs meant that there was little room for radical changes. This is a nightmare when you are trying to run a low-cost operation and arrange rosters and crew patterns. But if it was bad for us, imagine what it was like for the staff. They were cynical about the business, for the very good reason that there was no fun, no camaraderie and no real sense of ownership.

We set about changing all that — or tried to — and landed feet first in a can of worms: strict union regulations, tortuous pay negotiations, constant strike threats. I had to go in myself and try to sort it out, and it taxed my own legendary reserves of karma. The crucial lesson I learned was: avoid taking on someone else’s legacy . In June 1999 I wrote in my notebook with reference to the turmoil at Virgin Express: ‘ Almost for the first time in my life I can’t sleep at night. Fighting the outside world is easy. Trying to make peace among one’s own staff is hell. We must never allow another company to get into this mess. ’

As life turned out, shortly after that diary entry we made Neil Burrows the CEO and he set about turning the business around with incredible hard work and great leadership. However, just as Neil had got the costs into line with the most competitive in Europe and finally turned Virgin Express into a credible people business which worked, 9/11 bankrupted our biggest partner SABENA. Eventually, in March 2006, Virgin Express and SN Brussels Airlines merged to create Brussels Airlines and Neil went on to lead the combined businesses merging the two cultures and creating what is today a very successful airline in the capital of Europe. It was a salutary experience, and the business message is clear: if you’re in the mood to buy a new business — wait. It can take a long time to change a business culture. Are you sure you wouldn’t be better off starting one from scratch? So many business acquisitions end up being disasters because the people involved fail to understand the real challenges involved with getting different types of people to all work together and share the same goals. They look only at the numbers.

This lesson can be applied more widely, and that’s what I want you to do now. Look around you. If the people you’re responsible for have already been crushed beyond recognition, and if your bosses are more interested in putting you right than in listening to what you have to say, you are better off hunting out more promising surroundings for yourself.

Even better, start from scratch. Seek out people with the right spirit, bubbling just beneath the surface, and get working with them.

The people you need are rare, but they’re not hard to spot, so let’s start with them.

You will find the ‘Virgin type’ of person all over the world. I bump into them frequently in bars, cafes, hotels and small businesses, in libraries, post offices, in hospitals, at the jetty in the Caribbean, even in government offices and the civil service. Virgin types pop up everywhere, and in every nation. These people don’t know they’re special, but they are; they are out there, and you can spot them.

If you’re in charge of a company, or a human resources department (I hate this description — I call them ‘people’ departments!), you should be searching for them, too. These people, by their nature and their outlook on life, enjoy working with others. They’re attentive. They smile freely. They’re often lively, and fun to be with. I don’t underestimate qualifications — I just don’t assume they’re going to tell me anything about a person’s character. Having ‘savvy’ is much more important than having a formal education. The things you learn can only complement who you are — and in my book, who you are counts for a whole lot.

I am always on the lookout for talent — it’s not easy to find energetic and enthusiastic people with the right attitude. We look for people who can grow into their work, and respond with excitement when we give them greater responsibility. Jobs, after all, can be learned. Recently, we noticed two guys doing a brilliant job of running the water-sports activities at a rival hotel. Everyone loved them. We didn’t need water-sports people. But we needed managers: and we asked these guys to run our island home in the Caribbean, Necker. In business, someone who can stay cool and calm under pressure is an asset. This is especially true for the Virgin Group, as so much of what we do involves dealing directly with the public. Today’s consumer can be very demanding, especially when things aren’t going according to plan.

I want to keep the Virgin Group fresh. So I have tried very hard to re-create, in every company, the atmosphere of Virgin’s early years. There’s no rule book. The past is the past. We can’t preserve it; it would be silly for us to try. But what we can do is look for the next generation of the right sort of people. Like everybody else, we’re looking for dedication, and belief, and a willingness to go that extra mile for colleagues and customers. But we keep certain other thoughts in mind, too. It seems to me that when you love what you do, you’re too busy to stand on your dignity. When you’re good at what you do, you don’t worry so much about your image. So I think it’s a positive sign when people don’t take themselves too seriously.

Good people have always been at the heart of the Virgin business, and that’s largely because we have tried to keep our businesses small, and our management teams tight-knit. I feel that small, compact companies are, generally, better run. This is partly because people feel more connected in smaller companies.

In an ideal business environment, everybody should have a rough idea of what everyone else is going through. People should be free to talk. Banter is essential. Anonymous, over-formal, regimented surroundings produce mediocre results. Niggling problems either fester, or they end up on your desk. No one runs that extra mile for you.