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Richard Branson’s Books: Why Did We Review Three?

Richard Branson

Sir Richard Branson, author and business natural.

Introduction

When we mentioned Richard Branson in one of our GoodBusiness Monday Morning posts we got an instant, strong, positive response.  And why not?  He’s an iconoclast who’s made good on his own terms.  He started from nothing, and he’s been at it for over 40 years.  His signature smile and Virgin brand extend, at this point, to about 400 companies.  The Forbes 2014 list says Richard Branson is the 7th richest person in the UK with an estimated net worth of $4.9B.

When he writes… should we read?  Therein lies GoodBusiness’ challenge.  In our post we said:

 “Richard Branson has a natural talent that guides him; distilled into advice and separated from his well-honed business instincts, his advice might… or might not… work for us.”

There was only one way to find out.  So, in one weekend, we read three of Richard Branson’s best-known books:

  • Screw Business as Usual (2011)
  • Like a Virgin: Secrets They Won’t Teach You at Business School (2012)
  • The Virgin Way: Everything I Know About Leadership (2014)

What we found entertained us, surprised us, and occasionally, dismayed us.

In the next three sections we’ll review each book separately.  We’ll present the nuggets we haven’t read elsewhere.  Fearlessly and perhaps presumptuously, we’ll tell you when we think you shouldn’t take his advice.

Finally, we’ll recommend a different way to get the best from the written Richard Branson.

Screw Business as UsualScrew Business as Usual

If we want to understand the role of sustainable business in the ecology of commerce we’ve come to the right place.  However, we were looking for concrete advice to take away.  We found plenty in chapter one, ‘Capitalism 24902’  but we had to dig for it, and I’m not sure that Richard Branson meant to give it to us.  It just spilled out of his experience, on the way to another point.

If we want the really valuable insights we have to identify them for ourselves.  I did it by constantly comparing ‘Screw Business as Usual’  with all the other business books I’ve read through the years.  Here’s our take-away from Chapter one’s business cases.

Finisterre is, according to Richard Branson, an award winning ethical clothing company.  Based in Cornwall, England, Finisterre founder Tom Kay sells cold water surfing clothing and explains Finisterre this way:

Cold water surfing is what we love.  Chasing space, running from the crowds, living off the land and surfing perfect, cold waves in remote areas of the world; it’s what we live for and why Finisterre was founded.

Finisterre’s strategy, a strategy that applies to all kinds of artisans businesses, is captured in one brilliant little sentence from Richard Branson.

“Niche’ is an important word for the business entrepreneur. Identifying the brand and then the niche and knowing the customer are all crucial to success.”

Finisterre’s brand is cold water surfing technical clothing.  Finisterre’s web site carefully explains, for instance, their approach to rethinking and redesigning wet suits specifically for cold water surfing.  Their other clothing reflects the same approach to careful design and extensive testing.

Finisterre’s niche is recyclable fabrics engineered for of minimum lifetime impact.  They carefully calculates the energy used to make, sell and maintain their clothing and minimizes that energy needed to make what Richard Branson labels ethical clothing.  Finisterre demonstrates their niche by dramatizing it through their i-spy traceability program, showing how product, environment and people combine to produce the durable clothing that minimizes total lifespan energy emissions and usage.

Tom Kay knows his customer because he is one.  Cold water surfers are a small market, but their needs reflect the needs of real and aspiring cold-water explorers everywhere.  Tom has gathered a core of similarly committed cold water explorers who provide the expert input and feedback that makes Finisterre clothing uniquely fitted to its customers.

Like most artisanal businesses, Finisterre’s challenge is in growing.  But Finisterre has found a way to expand their market beyond cold water surfers, by expanding their vision to include everyone living simply in cold water environments.  It was a feasible extension because cold water surfing often means shoreside camping.  Finisher kept the exclusivity of their recyclable apparel niche and their “we-are-the-customer” approach; they’re still doing what they do best.

From this business case, we at GoodBusiness learned a vital lesson about defining a unique brand, niche and customer base… and then redefining it.

So… is it worth buying ‘Screw Business as Usual’ to read parts of  Chapter one?  I don’t think so.

However… if you’re truly interested in one (very influential) person’s experience of sustainable business, Richard Branson’s book is a place to start.  As a sourcebook of vignettes for sustainable business advocates, ‘Screw Business as Usual’ is good value for money.  I suggest you go right to the appendix “I Rest My Case Studies” for an inspiring series of stories that will help you make your case.  (If you want inspiration right away, why not read a small business success story from GoodBusiness?)

Like a VirginLike a Virgin: Secrets They Won’t Teach You at Business School

Does Richard Branson tell business secrets we can’t learn in classroom?  Yes. He also tells us some things we’re not likely to hear from other entrepreneurs, either.

Richard Branson is a specialist’s generalist.  Early on, he discovered that he was good at starting and building companies where service is delivered by people.  He understood that many businesses really should be treated like people-powered service providers, whether or not the business community or the economists categorize them that way.  (In that way Richard Branson has been to extend his expertise into improbable markets.)

Bottom line; if we want to learn about building big people-powered service companies, then Richard Branson is our man.  And “Like a Virgin…” is our book.

Here are some of insights we haven’t found elsewhere.

Teach accountants (and other bean-counters and procedure-checkers) about service.  Richard Branson highlights several vignettes where frontline Virgin Atlantic airline employees went way beyond the ordinary to satisfy customers who found themselves in scheduling difficulties.  The moral of the story is that extraordinary service is delivered at the front lines.  Line managers and accountants, normally focused on consistency and process, will need extra training to recognize that there are valid exceptions. If they don’t get it, they’re likely to rebuke frontline staff, killing brand, business, and morale in the process.  (Note: For manufacturing companies, superior quality is a result of relentless consistency; for service companies, superior service sometimes demands that procedure be ignored.  This is a critical difference between the two.)

There’s opportunity during hard times… but what’s the escape hatch?  I was fascinated to discover that Richard Branson and Warren Buffett think alike when it comes to looking for opportunities; they both look harder in tough economic times.  Both Branson and Buffett point out that when we start or buy a business with very little money, that leaves a cushion of cash to be used to help the company survive and grow.  But both Branson and Buffett also look for “escape hatches”, or ways to close down or resell the business if the opportunity doesn’t work out.  For instance, Richard Branson started Virgin Atlantic Air in direct competition with British Airways… but he used leased airplanes that could be returned at the end of one year if the business failed.

Protect the downside.  Although many of Richard Branson’s stories describe daring decisions, he’s at pains to point out that he always considers the downside risk.  He doesn’t risk the entire business to pursue an opportunity.  (The right way to approach this is NOT to ask “what if we fail?”  Rather, ask “what will we lose when this fails?”  The first question simply stimulates worry; it’s the answer to the second question that tells us whether the business is at risk.  How important is limiting risk?  It’s one of the essential business tradeskills.))

Grab the spotlight… to give your brand personality.  Richard Branson isn’t the only entrepreneur to use personal charm to help his business.  But he is the one of the few to consistently use it to build an entire brand.  Although we think of Richard Branson as a natural showman, here’s what he himself has to say about why he grabs the spotlight with both hands:

At the urging of Sir Freddie Laker, who made an art form of grabbing the limelight for his airline, I quickly became a willing victim in all kinds of wild and crazy adventures to promote the fledgling Virgin Atlantic. You couldn’t buy a quarter-page ad on the front of the New York Times, but when my sinking speedboat or crashing hotair balloon just happened to feature the distinctive Virgin logo, there we were!

There’s great power in using personality to build a brand.  Just don’t forget that we’re in the limelight for our companies, not ourselves.

The message of “we” and “they”.  People-based service businesses succeed when the employees identify with the business.  Richard Branson suggests a disarmingly simple barometer of business health.  When employees talk about the company, do they say “we” or “they”?  “We” means that people are thinking and working like a team.  “They” means that employees are watching out for themselves first because they’re not confident that the company, or even their co-workers, are supporting them.

‘Vertical Disintegration’.  Richard Branson uses this term to describe his deliberate strategy of dividing service companies so that they stay small enough to respond quickly to opportunities in the service market. Often, small and midsize companies have to rely on flexibility to outwit their market-dominating competitors.  In the service industries, size doesn’t confer the same economies of scale found in manufacturing.  Too, large loans secured by fixed assets and inventory aren’t often needed.  Thus, there’s more benefit than downside to staying (relatively) small to stay nimble.

If there’s a weak section of the book, it’s the chapter dealing with handling failure and recovering from mistakes.  Mercifully, it’s very short.  Here’s the kind of fuzzy advice we at GoodBusiness just can’t recommend.

The impending failure of a business is something that you will instinctively recognize deep down…

Most startups are short of cash in the launch stages, and then lurch from one crisis to another as they struggle to keep afloat.

… But almost every time I kept going and tried another angle, convinced that our situation was not as dire as it appeared.

However, you must balance this dogged streak with a  sense of realism.

Best to skip this chapter and find business wisdom elsewhere.

We can lay our hands on “Like a Virgin: Secrets They Won’t Teach You at Business School”  for as little as $1 at www.abebooks.com.  We say it’s worth the money at many times that price.

The Virgin WayThe Virgin Way:  Everything I know About Leadership

There are more gems in Richard Branson’s next book.  “The Virgin Way…” repeats some stories from the other books, but there are still gems to be gleaned.  Here are some of the best, chapter by chapter.

In Chapter 8 there’s a wonderful story about innovation during the early days of Virgin Atlantic.  By asking “why?” repeatedly, the team discovered that it actually cost less to buy a good set of electronic ear buds and let the passengers take them home than distribute/collect/clean/repackage/redistribute old-fashioned rubber tube headsets.  Virgin Atlantic actually saved money by providing better sound to their passengers in flight, and a set of ear buds to take home.  Richard Branson’s moral is that asking questions about every part of the business pays off.   Our take-away at GoodBusiness is that (a) asking “why?” and (b) following it with “what if…” and then (c) calculating before-and-after costs can be a fertile source of superior value for the customer.  (Does that sound familiar to GoodBusiness visitors?  It should, because it’s the classic Japanese formula for incremental process improvement, applied to a service industry.)

In Chapter 9 there’s a cautionary tale about the cost of becoming a public company.  Two decades before the financial reforms of the late 2000’s Richard Branson learned, by taking the Virgin Group public, that public ownership slows decision making and innovation.  In fact, the effect was so severe that two years later the Virgin Group became a privately owned company again, just to recover the rapid decision-making style obliterated by the reporting requirements of publicly traded stock companies.

Chapter 11 is a gem.  Richard Branson yarns about the best hiring for service businesses.  In the process he gives the best hiring advice we’ve ever read.  Here are the nuggets:

“I have always insisted on being involved with senior-level hiring decisions in all of our companies,”

“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. ”

“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. ”

“While the majority of skills can be learned, when it comes to personality what you see tends to be what you get – with the caveat, of course, that what you’ll see on a ‘best behavior’ interview showing is not always what you’ll get… ”

“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.”

(Here’s more wisdom from GoodBusiness about the interview during the hiring process.)

Most of chapter 16 is… I’m not sure what it is.  But buried among it all is a priceless gem about being your own brand on behalf of your company.  Inside the stories, the lesson lies buried in three separated phrases.  They’re the golden keys to understanding his Virgin branding success.

From Freddie Laker: “Listen, Richard, you’ll never make even a dent in their amour with traditional marketing methods.  I learned early on that you yourself have to got to get your are our there.  Be visible, take risks, get  creative, make yourself heard and take the fight to them before they bring it to you.  If you can’t find ways to generate a lot of attention through free ink they’ll eat you alive.”

At Virgin Atlantic we had deliberately underplayed our ambitions and so stayed under the British Airways’ radar until it was too late for them to snuff us out.

As one should, we quickly moved on and put our Cola adventure down to experience.  It taught me a huge lesson, though; while in some markets, like aviation, we had managed to sneak up and outsmart some huge and cumbersome competitors we should never underestimate the might determination, distribution and sheet marketing clout of a mega brand like Coke!

Chapter 18: The chapter is build around an excellent central section called ‘the art of the decision’.  It’s a very good description of how to turn an art into a learnable skill.

We think “Like a Virgin…” has a place on your bookshelf as long as you don’t believe that it’s everything Richard Branson knows about leadership.

Summarizing…

If we’re reading for entertainment and inspiration, Richard Branson is a reliable source.  His image may be larger than than life (remember, it’s a branding mechanism), but the personal Richard Branson is honest about both his successes and failures, about his strengths and shortcomings, and about his supporting team.  There’s lots of good business history.

Richard Branson speaks to both business and social entrepreneurs in a common language. We at GoodBusiness focus on business. It’s not that we don’t believe in social entrepreneurship; we prefer to let others do that talking.  We also recognize that same advice doesn’t always apply across the board.

In this review we’ve tried to put his practical business lessons front and center.  However, you should know that it wasn’t always easy to distill his lessons from from his life experience.  Furthermore, we had to call on decades of our own reading to distill Richard Branson’s insightful best from much more commonplace advice.

We’re glad we reviewed three books by Richard Branson, because now we understand why and how to read his books.

Here’s why we read Richard Branson.

  • He’s a master of branding, and using branding to build distinctive businesses.
  • He very effectively explains the mechanics and culture of people-based service companies (although it’s up to the reader to appreciate that his advice doesn’t always apply to manufacturing companies).
  • His methods of recruiting and hiring don’t fit well with conventional human resources wisdom, so we learn a different way to get and keep great staff.  (We think it’s a better way, too.)

Here’s how we recommend reading Richard Branson.

We’d start a Branson book club.  We’d buy all the books, and then hand each book to a book club member along with a colored highlighter.  We’d ask all the members to highlight the best advice in the books.  Then we’d excerpt all the highlighted portions and combine them into one set of business instructions.  Finally, we’d hand off the set to the club’s best writer for editing into a cohesive document.  Since Richard Branson seems to be publishing a new book every year, updating the business instructions would be an annual exercise.

Is Richard Branson worth all this attention?  Yes, he is.

Postscript

Richard Branson is an endurance entrepreneur.  That long term view changes his perspective.  Here’s what’s might be going on inside Richard Branson’s head, from two other endurance entrepreneurs.  May we all be so fortunate!

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