Transformational Leadership at Virgin Group

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Introduction

Leadership is an important aspect of an organisation that will always have a direct impact on the success in achieving its objectives. The world is very competitive and for firms to manage this competition there is a need to have a leadership structure that is conscious of the dynamic factors of the environment. It is through proper leadership that a firm can embrace the changing environmental factors and is able to meet the changing market demands.

Firms that are successful in the market today owe their success to adequate leadership. Richard Branson is one of the leaders in the contemporary world that has come out strongly as a transformational leader with the capacity to inspire the employees to achieve the best results. The Virgin Group of companies under the Virgin Foundation is one of the largest companies in the world.

According to Fey (2012, p. 72), this company has grown from a small firm that was selling articles to a college, to a multinational company trading in various countries around the world. This firm has been able to venture into various industries with a lot of success. This is attributed to the leadership style of Richard Branson and his team of management. Sir Richard Branson has worked closely with his team of employees to ensure that this firm increases its scope of market and its profitability.

The Virgin Group is one of the best brands in the world. According to Cutcher (2007, p. 241), Virgin Group has been used in many case studies as a success story around the world. It is one of the firms that have experienced consistent rise, from a small firm that did not get attention of members of the society, to a large firm that plays a very important role in boosting the economy of the United Kingdom.

The success of this firm, as Budhwar (2006, p. 510) says, is attributed to the management style that the leader applies in managing operations of the business. This research will focus on how transformational leadership is used in Virgin Group and how it has helped the firm to become successful in the market.

Management Style Used by Richard Branson

Sir Richard Branson is a strong supporter of individualized attention to every employee. According to Baruch (2008, p. 430), transformational leadership encourages the approach of management where the manager gives direct attention to each employee within the firm. This means that the manager would avoid cases where a decision is made on a generalised term. Every employee has unique qualities that make him or her different from others.

This uniqueness of the individuals makes it necessary for the management to ensure that every employee is understood perfectly within the organisation. All the employees of this firm who are in the managerial positions have at one moment or another met Richard Branson in person (Guesa 2010, p. 510). In such meetings, he would engage the employee in a dialogue with the sole purpose of gathering any information that may be relevant in understanding that person.

He would then ensure that such an individual is given attention based on his or her unique characters. This is what he would insist should be transferred to all the junior employees whom he cannot reach directly. This is part of total quality management technique used by this management. The diagram below explains this.

Figure 1: Total Quality Management Used at Virgin Group

Source: Baruch (2008, p. 430)

Transformational Leadership in Organisations

Pielstick (2005, p. 75) defines leadership as a process where an individual (a leader) offers guidance to a group of individuals (followers) in an organisational structure. Leadership is one of the most important factors in any organisation. Leadership and management share a number of attributes, but they differ in various fronts. Transformational leadership is defined by Yukl (2010, p. 117) as a type of leadership that uses motivation to enhance the performance of employees.

Transformational leadership, as the name suggests, provides a completely new path to approaching various issues in an organisation. It provides the employees with an insight. One of the main aims of a transformational leader is to create a completely new approach in managing various issues within the organisation.

This is what the current world demands of a firm. Emerging technologies are changing various approaches of management. The emerging trends need new approaches that can be used to provide a way in which they can be managed differently. This is what the management of the Virgin Group has been practising.

Transformational leadership attempts to make employees discover themselves. According to Hacker and Tammy (2004, p. 46), a transformational leader will always make followers realise that they have untapped capacity which they can exploit to get better results in every activity they are doing. Unlike management, leadership takes the front line in bringing a change that is needed. It involves making the followers realise that they are a part of the change. It makes employees own the whole process.

They feel that some changes that are proposed are a part of them and are meant to make their work easier. This way, they develop the responsibility to ensure that these changes are accomplished successfully and within the specified time. Such leadership will evoke desires on the followers to see to it that specific desires are achieved within the specified time. It is an art of tying the objectives of a firm to those of employees.

Nature and Relevance of Transformational Leadership in Organisations

Transformational leadership has some characteristics that make it unique among other forms of leadership. Transformational leadership cherishes authenticity. It encourages followers to act as natural as possible. People who act naturally always tend to give their best. Passion is another major characteristic of transformational leadership. Transformational leaders must be passionate about every action they take.

This way, it becomes possible for the followers to take this characteristic from the leaders. Followers will develop passion when they realise that their leader has passion in his or her actions. Transformational leadership should also embrace creativity. Creativity is crucial in the contemporary world.

Leaders must be able to solve problems in a creative manner (Pardey 2007, p. 78). They have to encourage the culture of creativity in their employees. This way, their organisation will be able to be creative in the market. Richard Branson has always cherished these factors in his leadership.

Transformational leaders always have self-awareness. They understand what they stand for and are able to express this feeling to the followers. This way, it would be easy to avoid cases where a leader issues instruction which he or she can change abruptly without a clear explanation for the same.

Transformational leaders always have interpersonal intelligence. This is important to help bring people of different social backgrounds together. Organisation brings together individuals from different backgrounds. It would require interpersonal intelligence to make these people reason in the same line and work as a unit towards achieving specific objectives.

In managing organisations today, Conger (2006, p. 39) says that integrity is also of utmost importance. A transformational leader always has integrity. It is important to note that transformational leadership aims at bringing a completely new approach of doing various activities in a better way. Integrity will be one of the main ingredients in that leadership. It will be possible to tell others to maintain integrity only if the leaders show the same in their actions.

A transformational leader must also develop clarity of purpose. The leader must be sure of what he or she wants from the followers and from the leaders. According to Biswas (2011, p. 27), having a clear sense of purpose on what one does makes it possible to measure the level of success of an individual. This way, it becomes easy for such a leader to determine the rate at which objectives of the firm are being achieved.

Finally, such a leader always has global awareness of various factors in the environment. When the leader is managing a large multinational organisation, understanding factors in the immediate environment may not make one formulate policies that can benefit all the branches of the firm.

Such a leader must have global awareness of various environmental factors in order to transform employees and the firm in general towards desired direction. Besides the above characteristics, transformational leadership has four main elements that help in making it unique in the market. The four are discussed below.

Evaluation of the Behaviour of Leaders in the Selected Organisation

Richard Branson has demonstrated capacity of a leader in his Virgin Foundation. Being a brilliant entrepreneur, Branson has managed to grow the Virgin Empire to capture various industries around the world. He has demonstrated leadership capacity that is beyond reproach.

According to Bustin (2004, p. 67), Branson believes that the strength of the firm is bestowed in the employees. He has therefore maintained a cordial relationship with the employees, always making them feel that they are appreciated within the organisation. One of the most important cultures he has developed within the organisation is trust in peers.

Employees spend much of their time with fellow employees. They interact with their peers when doing different activities geared towards achieving specific goals for the firm. Employees should therefore develop positive attitude towards their peers in order to ensure that the internal working environment is peaceful. They should share innovative ideas amongst themselves and develop a working environment where each team member is a protector of others.

Trust in peers refers to the extent to which workers in similar job positions would be willing to cooperate amongst themselves to accomplish certain tasks. In the organisation, it is understood that peers interact with their workmates as far as accomplishment of tasks is concerned.

An employee would be tempted to work hard after realising that his colleague is committed to realising certain goals (Kouzes & Posner 2006, p. 56). For instance, peers choose certain models of performance once they notice that they have similar objectives. Trust in peers therefore refers to choosing appropriate models meant for achieving high results. This has helped Branson build a very strong Virgin Atlantic Empire.

Branson has also been keen on encouraging participation at work amongst all the employees. The workplace requires participation of all members of the organisation. Employees should develop an attitude of collective participation at work. Branson has ensured that all cases of individualism are eliminated, and its place is a team spirit (Northouse 2010, p. 67).

All the members of the organisation have been made to realise that they have a responsibility to participate in every activity that the organisation undertakes. To achieve this, Branson has ensured that there is clear separation of duties among various groups within the organisation. Division of labor is important because it creates a sense of responsibility (Pielstick 2005, p. 120).

Employees will feel that they have a role specifically meant for them. They will realise that their failure to achieve the goals set for them would lead to a loss for the entire firm. Employees would feel guilty of carrying the blame for a possible failure of the entire firm. They will make an effort to accomplish their tasks to avoid blame coming from their side.

Richard Branson has been keen on guiding the behaviour of individuals, groups and teams within this organisation. According to a report by Conger (2006, p. 59), Branson has been keen on determining the behaviour of every single employee and team within the organisation. This scholar says that there is always a need to shape the behaviour of employees in order to ensure that they act within the expectations of the leader.

To achieve this, Branson has created an organisational culture that is unique to this firm. Creating an organisational culture within the firm helps ensure that the behaviour of individuals or teams formed within the organisation can be predicted by the leader (Burns 2009, p. 113). A leader should be not be caught unaware by an action of an individual follower or a group of them because the leader is always expected to be on top of every situation within the organisation.

Being able to predict the behaviour of the employees or teams gives the manager an upper hand in control it as would be desirable. At Virgin Group, Branson has been very keen on ensuring that employees embrace change. According to Rollinson (2005, p. 89), Branson is one of the contemporary managers who cherish change within their organisation. He has been keen on influencing employees’ readiness for change by making change part of the organisational culture of this company.

The Impact of the Leadership Style on the Performance of the Firm

The impact of the leadership style used by Richard Branson in the Virgin Group is evident in the performance of this firm. According to Artur (2008, p. 680), the Virgin Group is one of the best performing firms globally. The group defied the massive economic recession that hit the United Kingdom and the rest of the world to register a growth (Jensen 2011, p.671). The firm is considered as one of the few firms with capacity to run in various industries with a considerable level of success.

This may be attributed to the transformational leadership approach that Branson has employed in managing his employees. In order to understand the impact of this leadership style, SWOT analysis will be necessary to analyse its strengths and weaknesses, the opportunities it poses and some of the threats.

According to Barney (2010 p. 99), transformational leadership is one of the best leadership theories that managers in the contemporary world should consider employing. One of the main strengths of this leadership structure is that it inspires employees to work beyond their current capacity. The business world is increasingly getting competitive.

There are various competitive forces in the market, which is always a threat to a firm that does not consider coming up with the strategies to manage them. Managing competitive forces would need a team of dedicated employees who have the capacity to meet the demands of the customers however dynamic they are (Marchington 2012, p. 285).

The Virgin Group is one of the success stories in the transport industry. The Virgin Air is one of the biggest airplane firms in the world, capturing the markets in Europe, in North and South America, Asia and Africa among other continents. In the financial sector, this firm has been performing well given the strategy that it has employed in dealing with the customers. All these are because of the leadership structure applied by the top management unit of this firm.

This leadership structure poses some opportunities for the prosperity of this firm in the market. In this firm, Biswas (2011, p. 105) says, Branson has created an environment where every employee feels aggressive and determined to achieve better results each time. Branson has created an organisational culture where employees feel obliged to work even for extra time in order to reach for a specific target.

Although the extra time worked would always be paid, the employees always have a stronger desire to see success in whatever they are doing, than to earn the extra income. They consider their work as of utmost importance, and thus would give it all the concentration that they possibly can (Pielstick 2005, p. 104).

The result of this concerted effort is clearly evident in the kind of growth this firm has achieved. Employees of this firm remain the stronghold that has seen it through to its current glorious position. With Richard Branson still at the head of this firm, Virgin Group is destined to greater heights as the future is very bright.

It is important to appreciate that this leadership theory has some weaknesses. One of the main weaknesses is that it assumes that every single employee would respond positively to the motivational factors directed to him or her. For this reason, this leadership strategy should be used alongside other theories as identified in the appendix shown below.

Employees must realise that they are responsible for their acts of omission or commission, and that they are expected to deliver on their assignments. Similarly, this leadership strategy is prone to some threats in the environment. The theory emphasises the need to give employees some form of freedom within the firm, and that the information should always flow smoothly from the top office to the junior employees.

However, some employees can be moles of competing firms. Giving them this freedom and allowing information to flow freely will be like allowing the competitors to have an easy way of accessing classified information about the firm. This may make it vulnerable to its competitors.

Conclusion and Recommendations

It is apparent from the above discussion that transformational leadership is very important in the current society in helping firms manage the market forces. The Virgin Group has been successful in the market because its management has embraced transformational leadership. This management has come to appreciate the power of having a team of motivated employees. For this reason, it has always focused on ensuring that employees remain motivated while working for this firm.

The management has ensured that these employees are made to feel that they own Virgin Group rather than being employees of this firm. It is only through this that firms in the current competitive market can be successful.

The management should be conscious of various forces in the environment which have a direct impact on the firm. These factors should be managed properly in order to ensure that they do not have negative consequences for the firm. In order to realise this, the following recommendations should be observed.

• The management should always ensure that its employees remain positively motivated within the firm.
• The leadership of the firm should always try to ensure that it embraces dynamism in line with the changing environmental factors.
• There should be a clear communication system within the organisation between the management and junior officers, among the employees and within the management.
• Every member of the organisation should understand his or her role within the firm and how this role is related to the role of other members of the firm.

Appendix

House’s Path Goal Theory

According to Rollinson (2005, p. 79), “This theory has its basis on the premise that employees’ perception of expectancies between his effort and performance is heavily influenced by leader’s behavior.”

According to this theory, four leadership styles are important in ensuring success within an organisation. The four include directive nature of the leader, supportive leadership, participative leadership and result-oriented leadership. These behavioural leadership characteristics will influence employee behavioor and manage environmental factors in order to achieve leadership effectiveness.

List of References

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Biswas, S 2011, Commitment, involvement, and satisfaction as predictors of employee performance, South Asian Journal of Management, vol. 18 no. 2, pp. 92-107.

Budhwar, P 2006, Rethinking comparative and cross-national human resource management research, The International Journal of Human Resource Management, vol. 12, no. 3, pp. 497-515.

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Conger, J 2006, The Practice of Leadership: Developing the Next Generation of Leaders, Wiley, New York.

Cutcher, G 2007, Impact on Economic Performance of a Transformation in Workplace Relations, Management Journal, vol. 44, no. 1, pp. 241.

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Guesa, E 2010, Human resource management and industrial relations, Journal of management Studies, vol. 24, no. 5, pp. 503-521.

Hacker, S & Tammy, R 2004, Transformational Leadership: Creating Organization of Meaning. Milwaukee, Quality Press, Wisconsin.

Jensen, T 2011, The impact of human resource management practices on turnover, productivity, and corporate financial performance, Academy of management journal, vol. 38, no. 3, pp. 635-672.

Kouzes, J & Posner, B 2006, The Leadership Challenge, Jossey-Bass, San Fransico.

Marchington, M 2012, Involvement and participation, Human Resource Management: A Critical Text, vol. 7, no. 67, pp. 280-305.

Northouse, P 2010, Leadership: Theory and Practice, Sage, New York.

Pardey, D 2007, Introducing leadership, Butterworth-Heinemann, New Jersey.

Pielstick, D 2005, The Transforming Leader, a Meta-Ethnographic Analysis, The Community College Review, vol. 4 no. 3, pp. 65-138.

Rollinson, D 2005, Organisational Behaviour and Analysis: An Integrated Approach, Pitman, London.

Yukl, G 2010, Leadership in Organisations, Prentice Hall, New Jersey.

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