Leadership Evaluation: Sir Richard Branson

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Table of Contents

Introduction
A brief biography on Richard Branson
Branson’s Dominant Leadership Style
Specific Behavior that is Important to Branson’s Success
Which behavior described, would ensure student’s future life success?
Behaviors from Richard Branson that leaders should avoid
Conclusion
References

Introduction

Strong leadership is necessary if an organization is to achieve its goal of higher performance and increased productivity. For this reason, effective leadership is rightfully regarded as a critical factor in the success of all organizations.

There exist many leadership styles and their effectiveness depends on the particular business environment as well as the personal traits and values of the individual leader (Bartlett & Goshal, 2000). One individual who has emerged as a successful leader is the Virgin group’s CEO, Richard Branson.

He has built himself a reputation by being a successful entrepreneur who has founded many profitable groups of companies. This paper will set out to review the leadership styles used by Branson.

Specifically, the paper will analyze his dominant leadership styles and cite specific behaviors that have been critical to the success of Branson.

Specific behavior by Branson that would ensure a student’s future life success will be highlighted. A review of behaviors from Branson that leaders should avoid will also be made.

A brief biography on Richard Branson

Richard Branson is an English business entrepreneur who is most renowned for founding the Virgin Group of companies. He was born in 1950 and although an underachiever in school, he had great practical intelligence and possessed numerous creative abilities.

Richard Branson began his business career while studying at Stowe, an exclusive private boy’s school. His first venture which was a magazine called “Student” which became a success.

This motivated Branson to abandon school and pursue his business interests in 1968. His magazine attracted significant readership due to its elective style and its venture into subjects that were not addressed by the well established magazines.

The next venture undertaken by Branson was mail order records and this venture was chosen since it required no up-front investment and no working capital which made it ideal for Branson who had little money at his disposal.

The name “Virgin Records” was chosen for this commercial entity. The success of the retail store led to expansion into record publishing with great financial success for the company.

A fundamental notion held by Branson is that “small is beautiful” and as such, when a unit grows too large it is split apart.

Virgin Atlantic Airways which is Branson’s grand jewel was founded in 1984 following a proposal by a Californian lawyer for Branson to start an intercontinental cut-price airline.

Unlike the previous ventures, the airline business required a lot of capital and by 1985, the financial needs of the airline were creating a cash squeeze for Virgin (Kets de Vries, 1998).

This led to the Virgin Group going public so as to gain the needed capital. However, Branson was unhappy with the public status of his company and in 1987; he bought out external shareholders and therefore made Virgin a private company again.

By the early 1990s, the airline had become the centerpiece of Branson’s interests and the capital needs of the airline made it necessary for him to acquire more capital. The capital was to be acquired by selective divestment.

Specifically, Branson sold Virgin Music (which was his most profitable business) for close to $1 billion and then used the money to support new business ventures and also to expand the airline.

Virgin Atlantic gained a competitive edge over the more established airlines because of its reduced prices and the superior and innovative customer services.

Kets de Vries (1998) notes that the airline was able to offer its business class travelers amenities that exceeded those offered to first class passengers by its competitors therefore making it appealing to many travelers.

Virgin airline showed innovation in customer service and for this, the airline has won numerous awards and experienced significant success on the global market.

Even so, the Airline has had to constantly compete with major airlines most notably of which are British Airways.

The company has relied on Branson’s innovativeness to remain profitable in the tough airline industry and therefore defend its strategic position.

Branson’s Dominant Leadership Style

Transformational Leader

Richard Branson engages in transformational leadership where the leader “looks for potential motives in followers, seeks to satisfy higher needs, and engages the full person of the follower” (Burns 1978, p.173). The most distinctive attribute of transformational leaders is that they demonstrate significant consideration of follower’s needs.

Branson strongly believes in the importance of his staff as is elaborated by his maxim “staff first, customers second, and shareholders third”.

Kets de Vries (1998) reveals that Branson strongly believes in this concept and to him, people are the greatest asset that his business empire has.

In an interview with CNBC Business (2007), Branson reveals that his leadership approach entails motivating people and looking for the best in them while at the same time keeping criticism at a minimal.

Branson demonstrates his transformational style by granting his employees opportunities to exhibit great personal and professional growth.

For example, when a company becomes too big, he splits it up and promotes the assistant managers of the original company into becoming heads of the new company.

All employees are therefore motivated to set aside their own self-interest and work collectively to achieve organizational goals since this will help them to achieve even higher goals (London, 2002).

Such a policy gives employees an opportunity to experience professional growth and it also makes the employees work harder in the hope that they will get the opportunity to be promoted or even head their own company.

Branson expects his followers to achieve more than their initial personal goals and empowers them to be successful. When speaking about his staff, Branson states that “Virgin staff are not mere hired hands; they are not managerial pawns in some gigantic chess game.

They are entrepreneurs in their own right” (Dearlove, 2010, p.104).considering the current economic environment, his statement addresses one of the most fundamental issues, which is success.

A common goal which Branson has set for his employees is that they should aim to expand into bigger markets and gain higher loyalty among customers.

Dearlove (2010) reveals that these goals are well articulated to all employees and everybody involved is expected to provide the best services to the customers and look for opportunities to expand the business.

This approach works and Virgin workers are constantly coming up with proposals which Branson reviews and then follows up on if they have merit.

Charismatic Leader

Branson has also set himself apart as a charismatic leader. Kunstler (2008) suggests that Branson has been successful in his role as the figurehead of Virgin group, that he has grown to be more important than the brand itself.

This thought is further supported by Dearlove (2010) who declares that a charismatic leader should have ample ability to sell a vision of trust, tranquilly and dedication to a prescribed cause to all employees.

Through his character, Branson has not only proved to his employees that integrity and dedication lead to success, but also, a sense of belonging and purpose.

Such, virtues promote commitment, all the while propelling the belief that as employees, people have it in them to make a significant difference.

A charismatic leader creates an environment that is conducive for the followers to exercise creativity and take some risks without fear of consequences.

Branson encourages his staff to be innovative and creativity is rewarded in the organization, which makes the employees more likely to innovate and try new approaches.

The business consultant Don Cruickshank deduced that Virgin is structured around its energetic chairman whose enthusiasm has led to the continued success of the company (Dearlove, 2010).

Branson is charismatic since he shows a lot of enthusiasm and self-confidence which makes it possible for him to influence his followers.

He is therefore able to motivate his followers to do more than they normally do and make personal sacrifices for the good of the organization.

The charismatic leaders is also a visionary who is willing to take risks in order to achieve his vision while at the same time remaining sensitive to how the vision meets followers needs.

The success of Virgin Airlines and Virgin mobile is largely attributed to the charisma exuded by Richard Branson.

Dyck and Neubert (2008) assert that Branson used his power of personality and ability to communicate a compelling vision in order to lead his followers to take risks and achieve great success in the airline and wireless industries.

Branson is the reason why Virgin is one of the world’s most recognized brands. It is as a result of his charisma that he is able to attract investors who supply the majority of the capital for his new ventures.

Dearlove (2010) admits that over the years, Branson’s personal reputation has been the most effective tool of recruiting the best staff for Virgin group.

He states that many of the company’s most able managers were drawn by what they had seen and heard about the way Branson runs his business.

Branson is really good at motivating others and passing on his confidence and belief that every new project will succeed and by doing this, he acts as a catalyst for the development and success of new business ventures.

When he set up Virgin Atlantic Airlines, Branson was going head to head with big airlines such as British Airways which held a huge market share (Kets de Vries, 1998).

However, he was able to convince his staff that they could compete favorably against these giants and emerge victorious.

Based on his personal convictions that they would succeed, he was able to inspire his followers to work hard and realize his high expectations.

Specific Behavior that is Important to Branson’s Success

Branson is well known for his risk taking attitude and his believe that one can succeed even in the face of numerous odds. This quality has been the reason behind the numerous success experienced by the Virgin group.

One of the riskiest business ventures Branson undertook was by entering into the railway business in the late 1990s. He took over some segments of Britain’s railway network which was old and inefficient.

By making use of technological advances, Branson was able to increase the efficiency of the railway network and hence make the railway more appealing to customers.

While Virgin Trains has not achieved the monumental success that Virgin Atlantic has, it has made some progress in spite of the negative outcomes that many analysts predicted (Dearlove, 2010).

The visibility of Virgin Group’s products is greatly enhanced by Branson’s genius at promoting his company. He does this through daring personal exploits which help him to get the attention of extensive media coverage.

For example, Shavinina (2006) records that Branson has broken a number of world records by crossing the Atlantic in a hot air balloon and also by boat.

His latest exploit has been in successfully kite-surfing across the English Channel and therefore becoming the oldest person to do so. His flamboyant nature also generates a lot of free publicity for his companies.

For example, to avoid incurring the huge costs required to advertise the new airline in the mainstream media in 1984, Branson appeared in a World War 1 flying outfit to celebrate the first flight of the newly formed Virgin Atlantic.

Branson takes advantage of investment opportunities even when the competition seems high. He has also shown that one should not be intimidated by the bigger players in the market and he has proved that one can succeed “despite the odds”.

For example, Branson has launched products such as Virgin Cola in a market that is dominated by the two major soft drink giants; Coca Cola and Pepsi (Dearlove, 2010).

Another behavior that has led to Branson’s success is that he always stays in touch with Virgin customers and employees. He is therefore aware of their perception of the current commodities offered by Virgin and can gain valuable information on new needs.

Sosik and Dinger (2007) state that Branson spends significant amount of time looking into complaints made by customers as well as reading and responding to suggestions made by his employees.

Which behavior described, would ensure student’s future life success?

Branson emphasizes on the importance of innovation among his followers. This is a behavior that can be beneficial in my future since for an organization to survive in today’s business environment, one has to expand the horizon beyond personal goals and focus more on progression, which can only be accomplished by innovation (Katsioloudes & Hadjidakis, 2007).

A leader should therefore foster creativity and innovation among his followers instead of having followers who only follow orders.

Branson’s view in this case is indicative of a dominant leadership style, which demands for strategic empowerment in a bid to improve self-worth among employees.

Branson also demonstrates concern for the welfare of his employees and he constantly states that they are the most important asset of the organization.

Alimo-Metcalfe & ALban-Metcalfe (2001) reveal that the transformational leader gives priority to his follower’s needs which leads to the followers having a lot of respect and admiration for their leader.

Delegation is another behavior by Branson that can ensure a student’s future life success. Branson takes a back seat in the running of Virgin and lets his employees engage in the day to day running of the company with little interruption.

He declares that he finds the most talented people and then gives them the space to do their job. Virgin Atlantic Airways is the exception in Branson’s hands off approach and he devotes a lot of time and attention to the airline.

Dearlove (2010) states that such an approach is necessary when one is heading as many companies as Branson does since it would be unrealistic for him to involve himself in the operations of all the companies.

As a student, I would want to emulate this behavior by entrusting some tasks to my followers. An effective leader should be skilled at allocating tasks and responsibilities to different followers based on their strengths.

In some instances, delegation will require more than simply giving up some of the responsibilities; it may entail relinquishing of power to others.

Behaviors from Richard Branson that leaders should avoid

A behavior from Branson that leaders should avoid is taking too much risk in a bid to achieve goals and assuming that positive attitude and enthusiasm will lead to success.

Dearlove (2010) notes that Branson rarely makes use of market research when taking up a venture; instead, he relies on his instincts as to what the customers want.

He believes in risking it all to achieve his goals and maintains a positive attitude to each project he undertakes (Dyck & Neubert, 2008) state that.

Branson is known for making major risks in a bid to achieve his goals. This risk taking has led to some significant failures by Branson. For example, a number of his online retailing companies that were established during the dot.com bubble were failures making it necessary for the ventures to be abandoned.

His venture in vodka and computers were also failures. While the Virgin Group of companies can afford to make a few unsuccessful ventures without dire repercussions, most leaders do not have the same luxury and one failure may break the company.

Leaders should therefore avoid unnecessary risks in order to ensure the survivability and future success of their organizations. Branson has a reputation of acting at record-breaking speed when a new opportunity presents itself.

He disregards bureaucracy and does not use time consulting with middle managers about the feasibility of his latest ideas. This impulsive approach to new ventures may be detrimental to the well being of a small or middle sized organization.

Another behavior that leaders should avoid is overemphasizing personal charisma. As it is, Virgin is heavily reliant on Branson as the charismatic leader.

Branson has grown to be more important than the brand and there is concern as to the future of the group since it will be very hard to find a worthwhile successor to him.

Den Hartog et al. (1999) warn that charismatic leaders may have a negative impact on the future of a company as is the case with Virgin. Leaders should therefore ensure that they put they do not jeopardize the future prospects of the company.

Conclusion

This paper set out to review the Branson’s dominant leadership styles and access the manner in which his behavior can ensure a student’s future life success.

It has been noted that Branson began utilizing his entrepreneurial capabilities at the early age of 17 and has continued to develop many companies with great success.

The paper has noted that Branson’s dominant leadership styles are transformational and charismatic. It has been articulated that Branson creates a challenging and exciting environment in which his followers can exercise their creativity and innovation instead of following him blindly wherever he leaders.

The paper has also underscored the fact that creativity is a major driving force behind all operations by Branson and he seeks to impart the same spirit to his followers.

The empowering attitude that Branson emphasizes leads to greater performance being obtained from his staff and this causes the organization to excel.

This paper has come out with a number of lessons that can be learnt from Branson’s leadership styles. By putting these lessons into practice, one can become an effective leader and therefore become an asset to the organization.

References

Alimo-Metcalfe, B. & ALban-Metcalfe, R. (2001). The Development of a new transformational Leadership questionnaire. Journal of Occupational and Organizational Psychology, 74, 1-27, 2001.

Bartlett, C.A. & Goshal, S. (2000). Going global lesson from late movers. Harvard Business Review 78 (2):132-142.

CNBC Business (2007). Richard Branson: Simon Hobbs meets the Virgin Group founder. Web.

Dearlove, D. (2010). The Unauthorized Guide to Doing Business the Richard Branson Way: 10 Secrets of the World’s Greatest Brand Builder. NY: John Wiley & Sons.

Den Hartog, D. N., House, R. J., Hanges, P. J., Ruiz-Quintanilla, S. A., Dorfman, P.W., Abdalla, I. A., et al. (1999). Culture specific and cross-culturally generalizable implicit leadership theories: Are attributes of charismatic/transformational leadership universally endorsed? Leadership Quarterly, 10(1), 219-256.

Dyck, B. & Neubert, M. (2008). Management: Current Practices and New Directions. Boston: Cengage Learning.

Katsioloudes, M.I. & Hadjidakis, S. (2007) International business: a global perspective, NY: Butterworth-Heinemann.

Kets de Vries, M. F. R. (1998). Charisma in action: The transformational abilities of Virgin’s Richard Branson and AAB’s Percy Barnevik. Organizational Dynamics, 26 (2), 6-21.

Kunstler, B. (2008). Leadership in the Era of the Human Singularity: New Demands, New Skills, New Response. The Proteus Monograph Series, 2(4), 1-93.

London, M. (2002). Leadership Development: Paths to Self-Insight and Professional Growth. NY: Routledge.

Shavinina, L. V. (2006). Micro-social factors in the development of entrepreneurial giftedness: the case of Richard Branson, High Ability Studies, 17 (2), 225–235.

Sosik, J.J. & Dinger, S.L. (2007). Relationships between leadership style and vision content: The moderating role of need for social approval, self-monitoring, and need for social power. The Leadership Quarterly, 18(1), 134–153.

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