Richard Branson on the Power of Your People

The people factor appears over and over on my list of top five tips. It is the basis of many entrepreneurial successes and, because many business leaders discount it, innumerable failures. While the current thinking in business schools holds that all someone with an idea needs to succeed are focus, clarity and a good business plan, I have found that bringing together a great team that's united by strong motivation, determination and bravery is much more important. Here's how to get started.

No. 1: Find good people.

The successes of Virgin businesses such as Active, Atlantic, Money and Mobile were all based on our assembling a great management team that had a vision, passion and a real sense of ownership. We look for leaders with the ability to listen to feedback from employees and customers -- this is crucial to keeping a service or product fresh and innovative. Often, when things start going wrong, you'll notice the staff members feel ignored and good ideas are not bubbling to the top. Leaders should have the character to make tough decisions and the passion and ability to inspire their staff and carry them through difficult times. Our best CEOs tend to be unconcerned about the size of their office or the thickness of the carpet.

No. 2: Realize that the employees are the business.

A successful business isn't the product or service it sells, its supply chain or its corporate culture: It is a group of people bound together by a common purpose and vision. In Virgin's case, we fly the same planes as our competitors and our gyms offer much of the same equipment as other gyms. What separates our businesses from the competition? Our employees. The best designed business plan will come to nothing if it is not carried out by an enthusiastic and passionate staff. This is especially true when things go slightly wrong; a friendly and proactive team can often win people round, averting a potential disaster or even turning it to your benefit.

No. 3: Always look for the best in your people. Lavish praise, never criticize.

Rather than focusing on mistakes, a leader needs to catch someone doing something right every day. If this culture of fostering employee development through praise and recognition starts at the top, it will go far toward stamping out the employee fear of failure that can stunt a business, particularly in its early days. When mistakes happen -- which is inevitable -- I always take the position that you have to learn from them, not dwell on what went wrong. It's almost always better not to go over the obvious with the people involved. They know exactly what happened.

No. 4: Don't take yourself too seriously.

We at Virgin pride ourselves on finding the fun in our businesses. We try to ensure our staff and customers feel a sense of warmth and affection. I have led from the front on this -- dressing up in costumes, trying all manner of stunts (not all going 100 percent right!), and generally showing that I do not take myself too seriously. My approach will not work for all businesses, but keeping a sense of perspective and not allowing management to be seen as aloof will help keep your staff onside. To foster a personal interest in clients' needs, it's crucial to ensure employees enjoy what they're doing. Everyone must be proud of the company. This is vital to building lasting success and ensuring an edge over the competition. To find employees who will take such an interest in our customers, we look for people who show genuine enthusiasm and character.

No. 5: Just do it.

Finally, you must have the bravery to give it a go. Starting a business is a big risk; an entrepreneur needs resolve and conviction to overcome the early hurdles. Most start-ups fail in the first few years, so a key ingredient of success is the ability to pick yourself up and try again.

If it starts to look like your business is not going to make it, some on your team might start to lose courage. At that crucial time, your knowledge of the people factor may make or break your company.