Tuesday, November 3, 2009

Richard Branson and the Virgin Group

Richard Branson, CEO and founder of the mega-corporation, Virgin Group is very vocal about what he thinks works for his company. First, that good ideas come from everywhere, not just in the boardroom. Second, that his employees are central to his success, and finally that he has to use his authority as a leader.

It is in his seemingly carefree spirit that he has no formal business headquarters, does not hold regular board meetings and supposedly doesn’t know how to use a computer. This attitude does not mean that he isn’t incredibly involved or busy. It is somewhat of an allusion, but one that lends itself to a creative workplace that has allowed him to use his brand in a little bit of everything from music to air travel to environmental protection efforts and make it one of the most licensed in the world. The leadership attributes that Mumford points to as important characteristics are: “openness, tolerance of ambiguity, and curiosity” (22). By utilizing these in an open work environment Branson has been able to foster a creative work environment that really does accept ideas from all levels. In the article, “The Knowledge-Creating Company”, Nonaka points to the importance of freedom of knowledge for the very reason of fostering such an environment.

Like Choi’s idea of a Charismatic leader having empathetic qualities, Branson sees the importance of this in his leadership style. “Having a personality of caring about people is important,” says Branson. “You can’t be a good leader unless you generally like people. That is how you bring out the best in them.” Because of his openness and empathy it is apparent that he recognizes the importance of his employees. He goes on to say, “A company is people…employees want to know…am I being listened to or am I a cog in the wheel? People really need to feel wanted.” He gives his employees a stake in the ventures that they were a part of creating. In the same vein as Florida and Goodnight’s idea of creative capital and viewing employees as assets, Branson has built his brand by employing people he can involve in the process.

He is adventurous and curious, but also realizes he cannot agree to everything. Branson has noted how difficult it is to say no to his employees because he does not want to discourage their creativity. He explains that he had to learn how to say ‘no’ and make the tough decisions like McGregor explains in “The Boss Must Boss”. McGregor says he, “finally began to realize that a leader cannot avoid the exercise of authority”. Branson had shaped his mission of fostering creativity.

The great success of Branson’s leadership can stand as an example for many leaders even outside of entrepreneurship. His attitude of inclusion and equity grounds him as a leader who is highly approachable. This benefits both the employees and the organization.


  1. Hailey, I appreciate the leadership review of Branson. Bringing up his acknowledgement that he needed some development of his own (needing to say "no") was insightful. I hope we can find more examples like this to see how great leaders work on improving their leadership skills.

    For me this notion pokes even more holes into the the early "born,not made" theory that Stogdill later suggested was really more about traits being a function of the situation (1948).

  2. Hailey, your article brings out the important idea that a leader should be able to create the processes where employees feel a sense of ownership for what they produce than feel merely as cogs in the wheel. Branson giving stake to employees in the ventures they have being part of, is a good example for this.

    Branson is empathetic to people and listens to their ideas but at the same time exercises his authority in applying those ideas--a leader needs this balance as no employees want their leader to be weak, ignorant or indecisive (Geneen)...also exercising authority would not hamper creativity when it is balanced with empathy. Employees want their ideas to be listened to. If the leader acknowledges the worth of their ideas but gives a sound rationale for not using them, the employees would not be disappointed. In fact, with a good feedback from the leader, employees can be motivated to be more creative and therefore come up with better ideas.

  3. Shilpa, I think you're right that it is a balance between encouragement and guidance. It seems that every leader must find that in their organization. For Branson, creating Virgin from the ground up, he has been able to shape that type of balance and truly be the creator and leader. This reminds me of a quote from Senge in this weeks reading: "It is fruitless to be the leader in an organization that is poorly designed".

  4. Branson's views on his own leadership touch on McGregor's not just from the "Boss Must Be Boss" aspect but also regarding Theory Y. By operating on the assumption that good ideas come from everywhere, not just the board room, Branson echoes McGregor's statement that people are leading all over an organization, not just in top management, that development in an organization should involve many, not just a few, and that given the opportunity, people will fulfill their greatest potential rather than just getting the job sufficiently done in order to get paid. I had not really seen this connection between the traditional leadership gurus and creative leadership until now.

    As we have been reviewing and summarizing all of the theories we have read in order to develop our ow leadership models, I am really starting to see them in practice (or not ... you all know now how I feel about Batman) through the examples on the blog and it's so interesting. Thanks for the post, Haley!

  5. What I find so intersting about Branson is his motivation. Without formal business headquarters, regular board meetings and supposedly not knowing how to use a computer, one could very easily not be motivated whatsoever and end up running a failing business. His drive and desire to be at the top, while not being a traditional leader shows that thinking outside the box and using creative leadership can still be very effective.

  6. Ann Candler, great parallel to Theory Y. You're right that Branson was very focused on the "human side of enterprise". I think he balances the intrinsic and extrinsic rewards very well to make his company profitable in a traditional sense, but also a place people enjoy working.

    Jamie, you're definitely right about being effective and thinking outside of the box. In one of the interviews I read of Branson, he was sailing off the coast of his island where he said he can get the most work done in the sun and fresh air.

  7. I think this is a great example of a charismatic leader. He is able to get people inspired with his passion and excitement of his vision. This helps others to envision. As the article also mentions he is empathetic and empowers his people. So, he seems to fit Choi's leadership theory to a T.

    I also feel like it seems like his style has created effective followers. Which makes me wonder, do effective leaders create effective followers, or are effective followers that way by their own internal motivation. As Haley mentioned, it seems like it comes from both intrinsic and extrinsic rewards. It seems that through Branson's vision and charismatic attitude it helps his employee's to gain both of those rewards and therefore create effective followers and empowered employees.

    Another factor, is that it seems to come from an authentic place. Part of me wonders if his style is able to be mimicked, since it seems like this is something that is a part of his personality, not just something learned.


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