Sir Richard Branson is the Founder and Chairman of the Virgin Group, and an entrepreneur. Most recently, his company has launched an initiative for commercial space travel called Virgin Galactic. He visited the London Business School where a Q and A session was held for students and graduates of the school. Here are the main takeaways from the Q and A session.
- Survival First
“When you first set up, the only thing that matters is survival,” Richard Branson said. “If you don’t survive, you can’t make a difference in the world.”
But once your business is established, then you can worry about social responsibility. If capitalism is to be given a good name, entrepreneurs must give back to society. One way they can do that is by reinvesting their profits toward new businesses, which creates more jobs.
- Alternative Fuels, Conventional Profits
Alternative fuel is one area where social responsibility and profits can coincide. Branson said alternative fuels like bioethanol could be as profitable as conventional fuels, maybe even more so.
“You can run a good business, sort out the environment, and bring fuel prices down,” he said. “So it’s a win-win-win situation.”
- Treat the World as One Country
He said his company treats the world as one country, and they don’t go into a new industry unless it can be a global industry. With the enormous market growth in countries like China and India, it would be ridiculous not to take them seriously if you’re a global player.
“If Western business people don’t treat the world as one country, we’ll be swamped,” he said. “Soon we’ll become insignificant.”
- “The key to being a good business leader is how good you are with people.”
When Branson flies on a Virgin Airlines plane, he keeps a notebook in his back pocket. He makes it a habit to talk to both employees and passengers, and he writes down their concerns in the notebook to remember for later.
That fits in with his philosophy of genuinely caring about his employees; he said you have to care not just for your fellow directors, but also for the cleaning lady, the switchboard operator, the janitor — everybody throughout the company.
“It’s really your people skills that will set you apart,” he said. “I don’t think that can be overemphasized.”
- How to Find the Right People
He prefers to promote people within the company because it has two benefits: it gives employees incentive to work harder knowing they can grow with the company, and the management already know the strengths and the weaknesses of their employees. If you promote people outside of the company, it can be demoralizing to your employees.
And even though at the beginning he didn’t have any well-developed criteria for hiring, he has developed one along the way: “I want to be sure they would be good motivators of people.”
- Branson on Investing and Selling
Branson only makes a new investment if it can do two things: enhance the Virgin Group brand and the work has to be enjoyable. But he does think he says yes too often because he loves a challenge.
He usually sells a company when it reaches maturity, then uses that money to reinvest in new businesses; he understands that his strength is in starting businesses, not running large businesses.
- Too Small to Fail
When one of the Virgin Group’s companies becomes too big, they split them up into smaller companies. He said that once Virgin Records became too big, he started to break it up into separate, smaller record companies.
He doesn’t think it’s in the best interest of the consumer, and, most likely, not in the interest of the company itself, to become too dominant in one sector. He believes the government must, in all circumstances, avoid the situation where one company has a monopoly on the marketplace.
“A company can be too successful,” Branson said. “And that is what governments are there to protect against.”
Image credit: CC by Jarle Naustvik