Richard Branson on the Secret to Virgin's Sustained Success
Editor's Note: Entrepreneur Richard Branson regularly shares his business experience and advice with readers. Ask him a question and your query might be the inspiration for a future column.
Q: How have you sustained Virgin's success, the company's energy and what makes it different over 40 years? Does it all come down to creating a different corporate environment? -- Entrepreneur reader
A: In this column I often write about Virgin's early days, to help readers get a sense of how my friends and I laid the foundation for success more than 40 years ago as we launched our early ventures. Back when I was a teenager, I thought that with the right bunch of people anything was possible, and that turned out to be the case. It was the people I surrounded myself with who made the difference: If you treat your employees right, they will treat your customers right, and sustained profits will follow.
It is interesting that there are so many similarities between our first Virgin businesses and those we manage today, considering that we've created more than 400 since then. But those launches are in themselves an important factor: Our approach to creating a new business sets us apart and has helped us to sustain our momentum.
As an entrepreneur or small-business owner -- whether you're an MBA or a pastry chef or an architect -- one of the tried-and-true methods of building a business is by offering such useful products and terrific service that you disrupt the local market, winning customers away from your competitors. We at Virgin have done this with a particular focus on disruptive change. From our first ventures, like our music stores and record label, to some of our flagship businesses today, including our airlines and space tourism companies, we have approached business development proactively and opportunistically, looking for openings where we can surprise and delight customers by offering something truly different.
We have gradually refined this approach over the years, and we experienced our share of failures along the way. But by any measure, Virgin has been successful: Eight businesses that we've created, in eight completely different sectors, have an enterprise value of more than $1 billion.
Once we had that momentum going, success in one area tended to lead to success in other fields, and so it has been sustained. We built up an extensive network of relationships, and now entrepreneurs and companies often approach us with ideas for partnerships that will help them to start a new business, or to attract new customers. Other offers come from business leaders who are attracted by Virgin's profile, in hopes that their companies will benefit from our brand.
While we still rely on experience and our own reaction to a prospective product or service to decide whether or not to go ahead with the launch of a new company or partnership, these days our teams also use data about economic, consumer and population trends to evaluate the consumer experience and assess potential opportunities.
Right now we are looking at entering a number of sectors for potential expansion.
We see a chance to do things better in education, where there has been limited innovation since the Industrial Revolution. The health care industry -- which has been showing strain as increasing costs, aging populations and constrained government budgets take their toll -- may also offer significant opportunities for a brand like ours.
Critics used to worry that the Virgin Group's diverse portfolio would distract from our primary mission. But diversity actually provides us with competitive advantages: We stay current and sustain our momentum. There is a lot of crossover between sectors, in everything from technology and design to trends in customer preferences, and the lessons we learn from one business can often be applied to another.
Companies across the Virgin Group work together to achieve common goals; we encourage lots of cross-collaboration. We hold forums: sometimes by sector, like mobile phones, and sometimes by department, like public relations. Our employees are dedicated to staying on top of advances within their industries, and we provide them with various platforms where they can share their findings.
Perhaps in your career as a business leader or entrepreneur, you are building now with an eye to the day when you will have more resources and a stronger brand. If so, consider the importance of what seems to be the final magic ingredient: Since we started Virgin 43 years ago with such strong personal relationships, we have always also had close ties with our customers. So we're aware that these days, businesses must make a difference in people's lives and balance profit with the needs of their communities and to sustain the environment.
This is a powerful call to action for everyone at Virgin. Our marketing team has defined our brand purpose with this pithy one-liner: "Don't just play the game, change it for good." That challenge will help us to sustain our energy and focus for another 40 years.