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Wed October 10, 2012
Virgin's Richard Branson Bares His Business 'Secrets'
Originally published on Wed October 10, 2012 7:53 am
Richard Branson is not your average entrepreneur. He dropped out of school at 15 and, despite suffering from dyslexia and attention deficit disorder, went on to found Virgin Group, a business empire that includes airlines, cellphone companies, banks, hotels, health clubs and even a space travel business.
In his new book, Like a Virgin: Secrets They Won't Teach You at Business School, Branson reflects on his dyslexia as well as some frequently asked questions about his success. He joins NPR's Renee Montagne to discuss the book and some of his company's recent projects.
On how his dyslexia worked in his favor
"I think by being dyslexic, I simplify everything. I calculate everything on the back of an envelope, and if it makes sense I'll do it, and if it doesn't make sense I won't. I don't overcomplicate it. I'll just give you one amusing story: I was having a board meeting and somebody gave me some figures, and I said, 'Well, is that good news or bad news?' And the director said, 'Richard, I don't think you know the difference between net and gross.' And I owned up, I don't. And so he pulled out a piece of paper, and he penciled in a sea and then he penciled in a net, a fishing net in the sea, and he said, 'Well, you know, the fish that are in the net, that's your profit at the end of the year, and what's outside is your turnover.' Sadly, I actually thought it was the other way around; I thought we were doing much better than we were. But ever since then I've been showing off and saying 'net profit' and 'gross profit' ... I suppose the interesting point about all that is it doesn't matter too much, you know. I mean, it's useful to be able to add up and subtract and maybe multiply. And apart from that, you can create an empire with 60,000 employees and find other people to add up the numbers at the end of the year."
On the possibility of buying or merging with the bankrupt American Airlines
"We don't normally buy other companies or merge with other companies, because you take on a lot of history. Having said that, it would be quite fun to do something with American Airlines. And so, yeah, if anybody from American Airlines is listening, we'd be happy to get your call."
On what he would do to turn American Airlines around
"You would need to really go into all the planes; gut them out, you know; get the best interior designers, as you would with a new hotel, to completely refigure them, you know; put in the best leather seats; put in the best entertainment you can; work with the crew to make sure they have the best uniforms, the ones which make them really feel great, and let them decide on what uniforms they want to have; and you know, just surpris[e] people. ...
"Relative to the income you'll get as a result, it's not a huge expense ... and, ultimately, it's the only way to survive. I mean, when we started 30 years ago with one plane flying out of England, there were 15 American carriers that we were competing with: Pan Am, TWA, Eastern, People Express, etc., etc. Every single one of them ... disappeared. And they disappeared because, although we were much smaller than them, their quality was awful."
On how much legacy costs — like pensions or an aging fleet — affect an airline's ability to make improvements
"I think that if [a] company's got a great manager at the top, then they can get these issues sorted out. I mean, it's strange because in America you've got fantastic hotels, great restaurants, but the airline industry just has not gone out to make sure that every single person that flies on those planes [gets] a wonderful experience. And the good thing about that is that leaves room for an airline like Virgin America to emerge. And, you know, we did the same thing with Virgin Atlantic when we started 30 years ago with, you know, one plane against British Airways. And the difference there is that actually British Airways did react, and they did start copying what we were doing, and they did improve their game ... And so, you know, because you've got legacy things hanging over you doesn't mean you can't get your act together."
On making air travel more sustainable
"About three or four years ago, at the Clinton Global Initiative, I pledged that 100 percent of any profits we made from our airline businesses we would invest in alternative fuels. And what we've been trying to do is come up with a fuel that we can power our planes by that emits no carbon. ...
"When we did the first test flight on coconut oil, using coconuts and a mixture, you know, there [were] a lot of jokes made. The chairman of British Airways said it was all pie in the sky, etc., etc. But the most important thing in life is just to try these things, and we tried it."
On the common thread between all of his company's ventures
"You have to go back to thinking: What is a business? A business is people coming up with an idea to make a difference in other people's lives. And throughout my life, I keep on coming across situations where I feel we can do it better than it's being done. You know, for instance, I used to travel on Britain's rail network, and the rail was run down, dilapidated, run by government; and we went in and persuaded them to give a chunk of it to us. And you know, we absolutely transformed it from 8 million passengers a year to, you know, 33 million passengers a year. And so I think we know how to do it.
"I'm inquisitive; I love learning about new things. So, you know, we have ended up with sort of 300 or 400 companies, but we've become a sort of way-of-life brand. ... People think of Virgin — if they hear that Virgin's going into a new area, they know that the quality will be good, that we'll do it in a fun way, that we'll give good value for money. And so it gives us a leg up when we go into a new venture. People already [trust] us, and they'll give us a try and, generally speaking, people seem to like what they find."