The Virgin Way: Everything I Know About Leadership (16 page)

In retrospect I was also glad she just happened to be watching TV at home one Sunday evening and saw a discussion about the struggles facing Northern Rock, an iconic bank in the north of England that had run afoul of the 2007 financial crisis. Apparently some TV banking expert on the show said something to the effect that, ‘What this bank needs is someone like Richard Branson to sort it out and run it.’ She sent me an email right away saying, ‘Maybe it’s not a bad idea so let’s talk about it.’ We did – and following a call to Alistair Darling, the Chancellor of the Exchequer, the next day, we were on our way for what would be a highly frustrating but finally successful four-year pursuit: in January of 2012 Northern Rock officially became a part of Virgin Money when we acquired it from the UK government.

It was agreed that all of the Northern Rock branches would be rebranded as Virgin Money as quickly as possible and just like that we found ourselves with a high-street banking presence for the first time. Northern Rock had a lot of wonderful people working for them but understandably they’d been feeling pretty beaten up as their bank was dragged through bankruptcy and was then run by the government for four years. Talk about one extreme to the other! An overnight leap from being a government employee to working for Virgin is about as dramatic (hopefully not traumatic) a change as I can imagine. The effect was wonderful to see, though, as everyone seemed completely re-energised and thrilled with their chance to be part of a whole new beginning.

We quickly set about giving each branch a fresh new ultra-modern look in addition to new banking products and the same kind of great people service that is an expectation with the Virgin brand. But it wasn’t enough. Looking through that wide-angle lens again, the idea of doing something radically different came along. Our inspiration came, in large part, from an interesting but defunct idea that Jayne-Anne remembered from the Royal Bank of Scotland in Edinburgh. It seems that in 1964 they'd opened something they dubbed their
‘
Ladies Branch’. It was essentially a women-only, tearoom-cum-bank designed to make female customers feel less intimidated by the banking experience. Staffed exclusively by women, it offered complimentary tea and coffee, soft music, and even free paracetamol! By the seventies, however, it was already drawing accusations of being discriminatory against the male of the species and it finally closed its doors in 1997. Flash forward ten years to Virgin Money – Jayne-Anne’s ultra-creative mind had recalled the Ladies Branch idea the moment she saw some beautiful oak-panelled rooms we inherited (by coincidence) in Edinburgh that were in excess of our banking needs and bingo – just like that the Virgin Money Lounge concept was born. The big difference of course being that this time it was for everyone, men, women and children – and I'm not sure about the paracetamol.

We have a credo at Virgin Money that goes by the name of ‘EBO’, which stands for ‘Everybody Better Off’, and what we had here was a perfect example of what that quest is all about. Just like our Clubhouse Lounges at Virgin Atlantic are perhaps a little ‘over the top’ by traditional standards, the new Virgin Money Lounges would quite deliberately be more of the same. ‘EBO’ depends very much on giving people the benefit of the doubt. Too many companies and individuals will shy away from what might be the greatest of initiatives for fear that some customers or employees will ‘game the system’ and abuse any freedoms or trust you place in them. In other words, because two or three per cent of users may exploit something, the other ninety-seven per cent will be denied access to a benefit they would have enjoyed and respected.

With a lot of crossover thinking from the airline’s award-winning Clubhouses, we spent many months with specialist design consultants Allen International developing the Money Lounge concept and working through every detail. A lot of time and effort also went into finding the perfect locations to bring the lounge idea to life. We wanted to avoid a cookie-cutter look so went to great pains to develop custom designs to complement each building. The first two lounges opened in Edinburgh and Norwich with Manchester following a few months later and all three became instant successes.

Our lounges do not sit inside a bank branch but (so far at least) are self-contained havens where Virgin Money customers can come to unwind. They can drop in for a hot drink and a snack, use our free Wi-Fi or one of our iPads, read a newspaper or magazine, or just sit and do nothing. Children are welcomed with a dedicated kids’ area in every lounge, complete with toys, books and games consoles. And our Virgin Money Lounge hosts are always on hand to make customers feel welcome. While you have to be a customer or guest of a customer to use the lounges, we’ve always seen them as a great place for local charity and community groups to meet as well for after-hours community events like exhibitions, talks and book signings. And the
coup de grâce
has to be the fact that every lounge features a grand piano! A little over the top? Probably, but hey, why not? The pianos are frequently and grandly played by some very talented customers (and occasionally by the not so talented, but we all have to start somewhere) and during the Edinburgh Festival we even had some world-class performers drop by to give impromptu mini concerts. And what is the cost of membership for this veritable private club? No more than being a Virgin Money customer.

I perhaps shouldn’t be releasing the following statistic for fear that every bank is going to attempt to follow suit, but our branches with lounges last year averaged almost 300 per cent higher sales than those without. Yet another tribute to the philosophy of ‘Everybody Better Off’!

Driving meaningful innovation with EBO in mind has always been at the core of every Virgin enterprise and over the almost half century we have been at it, I have had the privilege of working alongside and learning from some of the world’s most inspiring and inspired young people. I often get given way too much credit for what we have achieved at Virgin, which is maybe inevitable to a degree when your name and your brand become so closely intertwined. Or as it has been written by a number of commentators over the decades, ‘it’s sometimes hard to figure out where the brand stops and the Branson begins’. My role particularly in recent years has more often than not been that of a facilitator or an enabler. I set the table for entrepreneurs and our growing band of home-grown ‘intrapreneurs’ to do what they do best by giving them the backing in every sense of the word and the supportive environment to incubate their ideas and get them up and going.

Among the many pieces of feedback we got from the Virgin leadership research I mentioned earlier was this quote from a staffer at Limited Edition (the division that markets our exclusive resort destinations such as Necker Island). Talking about a senior person there it read:

‘He gives me rope and just says look I’m there to help. I’m there to pick you up if you fall down . . . he lets me run with it and that for me is fantastic you know. It gives me a sense of purpose, it gives me a sense of drive, it allows me to make decisions.’

This is the kind of leadership that enables and drives the constant level of innovation that every company has to foster in order to keep moving forward. The rapidly moving, ever-evolving business world is one in which, to survive, companies have to behave rather like sharks – if they don’t keep moving forward they will drown. And sharks are a pretty appropriate metaphor to use: they may have changed very little over the millennia, but by staying constantly on the move, they have survived for over 450 million years.

The word innovation tends to set most people thinking about places like Silicon Valley – which has its own fair share of sharks – about huge technological advances and companies with even huger research and development budgets. But my favourite stories are always those about people who have come up with a simple idea and with little or no money made a big success of it. Obviously the likes of Sergey Brin and Larry Page, Steve Jobs, Mark Zuckerberg and others qualify for inclusion in such a category but there are also a lot of lesser known but every bit as impressive stories out there – like Sara Blakely’s, for instance – a lady whose career track has an amazing number of parallels to mine.

SPANX A MILLION

I first met Sara when she became a contestant on my 2004–05 one-season wonder of a US TV show
The Rebel Billionaire
. When she joined us for the ten weeks it took to film the entire series, I was surprised to learn that she was already four years into building her what sounded like a one-woman business. When I asked who was minding the store while she was away she just said, ‘Oh, don’t worry about that – I have Laurie-Ann there and I trust her implicitly to keep things going just fine.’ I remember wondering if I would ever have had the courage to walk away from Virgin for a couple of months when it was in its fourth year. To be honest, and with no disrespect to my colleagues at the time, the answer was a resounding ‘No way!’

Although Sara was the runner-up in the final of
Rebel Billionaire
,
she took her ten weeks out and then went back to business where she quietly continued on her track to becoming, at forty-one, one of the youngest ever self-made female billionaires in the US. Oh, did I forget to mention that Sara (if you didn’t know already) is the founder and CEO of Spanx, the ‘shapewear’ company she started in her apartment with only $5,000 in the bank? Sara had failed to pass the law-school admission test and so became a door-to-door photocopier salesperson in Florida – a job she did for five years, which says a lot about her persistence.

The birth of Spanx was a classic entrepreneurial case study where if you can’t find something you want then go out and create it. Sara had been wearing tights with the legs cut off but always had problems with them riding up her leg. So she started looking into how she could make a shaper that worked. It took her months of phone calls and visits to different mills before she found one in North Carolina that was prepared to make her product. In the meantime she’d perfected her prototypes – which for the longest time was a weird-looking mingling of underwear, elastic bands and paperclips.

Next came the branding decision. Sara had heard somewhere that names with a K in them sold well, so she came up with the name Spanks, a name that a lot of people in the Bible belt found too offensive. So she put the garments in a red box and changed the spelling to Spanx with an X – people were still offended, but she thought it was more fun. As Sara tells it, ‘I was inventing something in one of the most boring categories ever. If you’re wearing a shaper you didn’t tell a soul.’ But that was before Spanx changed all the rules!

Sara the inventor became Sara the sales lady. She didn’t have the funds to go to trade shows so she decided to go on the offensive. She started trying to get hold of the buyer at Neiman Marcus, one of the swankiest stores in New York City, but could never get her to take a call. Then one day the buyer accidentally picked up the phone herself and Sara quickly recited her well-rehearsed pitch, wrapping it up with, ‘And if you give me an appointment I will fly to New York to see only you.’ Impressed by Sara’s energy and enthusiasm for her product, she got the appointment and then subsequently the sale. Sara the PR person and the face of the company also got a gigantic break when Oprah Winfrey named Spanx as one of her ‘favourite things in 2000’. Incredibly, at the time Spanx didn’t even have a website; nevertheless in their first year sales totalled an astounding $4 million! The following year QVC, the TV home shopping channel, took the product and revenues doubled. Sara was on her way, and there’s been no stopping her ever since. By 2012 sales were pushing $700 million and Sara owned a brand name that, rather like Google is to search engines, has become generic to the market segment she created.

Okay, so you are probably going to ask what exactly are those parallels between Sara’s career and mine? Well, like me she didn’t go to university. She had an idea for a product that didn’t exist and set about learning how to fill the gap. She was a ‘Jack of all trades’ (or is that ‘Jill’?) during the early years. She picked a brand name that was slightly risqué and controversial. Red is her corporate packaging colour and she has a couple of girls depicted on there just as the original Virgin record label did. More importantly, however, by putting ourselves out front along with a lot of innovative, smart, low-cost sales and marketing, we have both built highly successful companies from the ground up with the help of a lot of wonderfully loyal and engaged employees.

We both love what we do but we both learned the art of delegation at an early stage and we both believe in paying it back. Sara became one of the first (individual as opposed to part of a couple) women to sign up to Bill Gates and Warren Buffett’s ‘Giving Pledge’ whereby she (as I have done) agrees to pledge over half her wealth to charity.

After her wonderful performance on
The Rebel Billionaire
,
Sara didn’t end up as the winner mostly because I saw she was already well on her way to becoming a huge success with Spanx. In gratitude for her efforts on the show, however, I sent her home with a personal cheque for $750,000 to help her establish The Sara Blakely Foundation which is dedicated to giving (pun intended I am sure)
‘a leg up’
to women globally and locally through education and entrepreneurship.

Sara’s amazing story should certainly be a huge source of inspiration for everyone, but especially young female entrepreneurs who might feel the weight of the world is upon them. What Sara achieved with no outside funding and nothing except a great idea and grim determination and perseverance to getting it done is truly textbook entrepreneurship!

Engagement in a digital world

Shakespeare’s Richard lll proclaimed ‘off with his head’ with casual abandon and Donald Trump expanded his brand awareness via his TV show
The Apprentice
with his almost joyful proclamations of ‘You’re fired.’ For my own part, letting people go has never made me anything but extremely sad. I almost always feel that firings are much more of an indictment on the company’s failure than that of the employee – no matter what the circumstances behind it might be.

On the other hand I always derive great pleasure from telling someone, ‘You’re hired!’

WHY HIRING SHOULD BE YOUR #1 PRIORITY

Whether you’re planning a start-up, preparing to re-launch or expanding your business, it’s often hard to know which tasks to delegate, which to delay, and which to tackle right away. In my experience, if there is one area in which you should definitely become immersed and do a lot of the work yourself, it is the hiring process. As much as I believe in delegation, putting your imprimatur on the key management is something you have to do: remember that these are the people to whom you are going to be delegating a lot of important decisions, and quickly, so they’d better be people with whom you feel a hundred per cent comfortable!

And if you’re reading this and thinking that your company is just too big already and you are way too important and busy to involve yourself with something as mundane as the hiring of staff (‘That’s what we have a “people department” for, isn’t it?’), then maybe you should think again. I have always insisted on being involved with senior-level hiring decisions in all of our companies, even if it sometimes means flying the applicants all the way to Necker Island to spend time with me, something about which I have received very few complaints! Even at Google – a $400 billion company which is still hiring at a rate of over 4,000 people a year – founder and CEO Larry Page still insists on being the final arbiter on whether or not to make a job offer to anyone being considered for a leadership role within the company. I know first-hand how this critical approach has paid off around the Virgin Group and I know from personal conversations with Larry that he sees his involvement in the hiring process not as some symbolic role that he has to make time for but rather as one of the most important parts of his job.

As I am sure Larry Page and his partner Sergey Brin will vividly recall (given that Google was incorporated as recently as 1998), the founders of a company inevitably must wear many very different hats during the first few crazy years. In Virgin’s case – a mere thirty years or so before Google – I handled everything from the secretarial work to (scarily) the company accounts at our first businesses. Like all young entrepreneurs, however, my first big business lesson was that you have simply got to delegate your duties if you want your venture to survive and (ideally) grow. It is almost impossibly hard to acknowledge this in the early going, but you should also be hiring with a weather eye on the day when you’re going to delegate even your CEO position and step back from the business’s day-to-day operations and focus on ensuring that your company is prepared for what’s next. Sara Blakely once told me, ‘The smartest thing I ever did in the early going was to hire my weaknesses.’ That unusually early level of self-awareness and smarts may be one of the biggest contributing factors to how Sara has managed to build a billion-dollar business from the ground up in just a dozen or so years.

In my case, I think it was in large part down to my dyslexia that I learned very early on in my career that I needed to become comfortable with the art of delegation. As I had already realised in my aborted school career, there were just some tasks with which I really struggled – for example whether it’s called ‘mathematics’ or ‘accounting’, numbers were just not my forte. We hired an accountant early on. As we grew and I delegated further I still felt I had the knowledge base to be comfortable getting involved in almost all the major decision-making processes. As soon as we stepped outside of the entertainment field, however, that was most decidedly no longer the case, something I quickly discovered when I unilaterally decided it was time for us to take the hugely tangential leap into commercial aviation.

PLANE SAILING

When we were getting ready to launch Virgin Atlantic, and with zero experience whatsoever in the airline industry, I realised how important the ability to delegate was going to be. With a helping hand from Sir Freddie Laker and others, we were soon able to assemble a team of very smart and highly qualified aviation experts to blend with our experienced Virgin business managers. Roy Gardner, who became our first managing director, and David Tait, who ran the US side of the business, were two of the first people we grabbed, both having formerly worked closely with Sir Freddie at Laker Airways. I soon got the feeling that Roy and David were used to having a boss who knew the airline business inside out so I think they quite enjoyed working with someone new to aviation who was prepared to delegate most of the decision-making to them.

For a new company it was almost like managing a merger. And the blending of our existing Virgin Group music industry people with the newly hired career airline people certainly made for an extremely interesting chemistry experiment. A lot of the time we never quite knew how the laid-back Virgin attitude of ‘Hey, don’t sweat it – rules are made to be broken’ was going to react when mixed with the more ‘by-the-book’ and rigid disciplines of the airline industry. We obviously couldn’t tell an engineer to try plugging his gizmos in somewhere else just to see what happened, but we could suggest that maybe we should try using the famous French restaurateur Maxim’s of Paris with butlers in tailcoats to serve our Upper Class section. Sadly it didn’t last more than a few weeks! The fancy French sauces that worked in a kitchen at sea level just didn’t hold together at 35,000 feet and worse still those tails kept tripping the butlers up as they climbed the circular staircase to our Boeing 747’s upper deck. But it certainly got us lots of press and – as with all attempts to effect real change – if we’d never tried it we’d never have known.

It was a tribute to the people on both sides of the equation that – surprisingly, perhaps – we never had any violent eruptions and the two groups quickly came together with a healthy balance and understanding as to which elements the other needed to function and where there were grounds for serious further experimentation. Together, in an unprecedented period of just five months, the team not only got a brand-new transatlantic airline off the ground (literally) but in the process they succeeded in creating and delivering the level of service that I had hoped for and that a lot of newly acquired passengers would appreciate for many years to come. Had I not been willing and able to step back and let them get on with it, the outcome could have been very different.

Hiring the right people is a skill, and like most things you get better at it with practice, but there are some good shortcuts that can help you learn quickly. Here are my tips for identifying great people and building your team.

CHARACTERS AND CULTURES

Although almost certainly not involved in hiring people, the nineteenth-century American essayist Ralph Waldo Emerson once wrote that, ‘
Character is higher than intellect.’
I
am sure it will come as no surprise that I wholeheartedly endorse this line of thought, although the task of uncovering the true character of a job candidate can be a challenge. Essentially an interview is a game of figuring out whether or not the character of a candidate will be a good fit with the culture of the company. One great way to test this may be to ask two or three of the employees who will work with this person to join you at some point in the interview, and to come prepared with a few of their own questions.

When your employees start talking to the candidate, it’s time for you to listen and observe not just what is said but any tell-tale body language signs that might indicate that what they’re saying and what they’re thinking might not be the same thing. How is everyone getting along? While a little awkwardness and nervousness has to be expected, look for someone with a sense of humour, who is fun, friendly and caring, because that is a person who likely understands teamwork and will help others. If they are clearly suffering from an extreme case of the interview jitters, I have often broken the ice by asking them to tell me a joke. It’s amazing how telling a joke, even if doing it really badly, can make someone laugh at themselves and come out of their shell. In fact, as one of the world’s worst tellers of jokes, I relate really well to the ones who get stuck after, ‘Did you hear the one about . . . ’

In the US, our hotel team has been doing some innovative things on the hiring front as we gear up for the late 2014 opening of the first property in Chicago. Rather than just wading through hundreds if not thousands of job-seeker applications, we have been creating a local buzz via social media and conducting hiring roadshows. The plan is to touch audiences that aren’t necessarily looking to change jobs and grab their attention with what looks like an interesting new career path in a really cool work environment. At our group interviews applicants may find themselves playing Twister with potential co-workers, or role-playing things like taking an eighty-five-year old guest to her room. The idea being to let applicants’ personalities shine through in simulated real-life situations – we want people who can laugh and have fun with our guests, which is not something you can easily discover by reading a CV and asking questions over an interview desk.

A CV IS JUST A PIECE OF PAPER

Obviously a good CV is important but if you were going to hire by what they say about themselves on paper you wouldn’t need to waste time on an interview. One good question to ask a candidate is what he or she didn’t include. I have always valued capability over expertise. While you may need to hire specialists for some positions, take a close look at people who have thrived in different industries and jobs – they are usually more versatile, have transferable skills, and can potentially tackle problems creatively. The would-be ‘expert’ who has been stuck in a groove somewhere else for years is much more likely to simply replicate their past, almost muscle memory-like, approach to the job. Obviously a healthy mix of experience and novel thinking is the ideal, but on balance I would anticipate more fresh and objective solutions to flow from the smart and curious inexpert outsider than the ‘been there done that’ experts.

Also don’t jump to the conclusion that someone who has worked for five different companies in the last five years ‘cannot hold down a job’ – it could just be that the job couldn’t hold them! Be forthright and ask pointed questions like what it is they are seeking and why you should hire them if they’re only going to be around for a year. Rather than being just another stepping stone along their way, can you perhaps give them what they are looking for in a mutually appealing destination?

Above all, don’t get hung up on qualifications alone. A person who has multiple degrees in your field isn’t always better than someone who has broad experience and a great personality. By the same token, the expression that someone is ‘overqualified for the job’ is utterly nonsensical; if they feel they want a change of pace or a new direction then more power to them.

TAKE CHANCES ON PEOPLE

I have always been a great believer in trusting your instincts when interviewing people. First impressions shouldn’t rule the day but remember that the initial reaction you have when meeting an interviewee is presumably based on the best impression they can create. So if at first sight your gut screams ‘You’ve got to be joking!’ then think how they will come across when they’re not trying so hard, and would you want this person walking into a room as your representative.

On the other hand I have also found that some people can seem like oddballs at first sight but then turn out to be indispensable: a maverick who sees off-the-wall opportunities where others see nothing but problems can energise your entire group. So even if their CV may not be quite right, he or she may be a little different than everyone else on your team, this might be a good time to take a risk and hire them anyway.

Whenever possible, promote from within. If you’ve been hiring great people all along, when an executive or manager does leave you should look long and hard at filling that job from within if at all possible. If, however, as can sometimes be the case with the most senior jobs, you do not have a candidate who is quite ready or a perfect fit then don’t make the mistake of moving someone into the role just because it’s ‘their turn’. And even when you do seem to have a prime candidate in-house, it never hurts to advertise the job and see what is available on the open market. Your inside candidate can suddenly look very different when seen in the context of someone else whom you never thought would be available or interested in working for you.

When you can promote from within, however, it certainly sends a great message to everyone in the company that when someone demonstrates a passion for the job and leadership skills at every step along the way then the sky’s the limit. We have countless great success stories all across the group of people starting in entry-level jobs making it into senior management. For example, Chris Rossi who is now Virgin Atlantic’s senior vice-president in the USA started out working behind the check-in counter when we first began flying to Boston in 1991. Chris next moved into the local sales team, eventually making it to VP sales before becoming our senior person in the US.

At Virgin Active in South Africa, Xiki Baloyi began her career in 2003 as a receptionist – she had trained in sports management but couldn’t find a position in that field. As the first team member that Active members met on entering the club, Xiki’s people skills shone through and quickly earned her a promotion to fitness instructor, where she demonstrated her commitment to not just improving members’ fitness but also to building their motivation levels. In the last seven years Xiki has been promoted several times and in 2013 was named the assistant general manager of our new Alice Lane Health Club.