In search of "Common Sense"

Feb 9, 2009

Business Stripped Bare – A Book Review

Business Stripped Bare – Richard Branson

This is an inspiring personal account by Sir Richard Branson about his 'Business' journey which, I believe, should be a recommended reading to all the people who have done their MBAs, have tried and failed getting into a MBA institute and even those who have not tried this route to learn art and science of entrepreneurship.

The book is very easy to read and peppered with interesting anecdotes that the author brings to demonstrate his points and principles. The tone of the entire book is very engaging and not at all intimidating. If one were to go through the mind boggling accomplishments of the author in his career spanning 40 years, it would be natural to consider it almost impossible what he has achieved in his lifetime setting up 200 companies in over 30 countries in the Virgin Group. We might be tempted to treat this phenomenon as an exception, which ordinary mortals cannot aspire to achieve. This book is his attempt at demystifying the track record and distilling the principles that he has naturally followed.

Through this book, he has actually laid bare the principles of success and gives hope and inspiration to all the current and aspiring entrepreneurs that whatever situation one is in, one can entertain dreams of achieving feats unimaginable now in terms of scale and impact. The generation of personal wealth and celebrity status could be interesting side-effects but not the real purpose of the enterprising individuals.

One basic theme that he has lived is that if one shifts focus to the concerns and issues of a larger set of stakeholders and genuinely try to come up with ideas, drum up collaboration and cooperation amongst the stakeholders and work towards resolving these issues diligently, then the current personal and lower level concerns and issues get resolved on their own. He has recounted how in his lifetime he has reached a stage where he can now play a key and exciting role as an acknowledged leader in addressing global and seemingly intractable issues like climate change and struggle against HIV/AIDS without anyway jeopardizing his commercial interests. This did not happen overnight but as he moved from founding one Virgin business to another, doors kept on opening through his contacts. Although, he is humble and acknowledges the role of luck, but one can easily realize that, had he been selfish and petty, none of these strokes of luck would have occurred in the first place and they would not have propelled him to these dizzy heights. By the way, he is fond on dizzy heights literally also through his interests in ballooning, aviation and space tourism.

The other two prominent themes are having fun while being serious about business and being inspired by great individuals like Nelson Mandela.

All the markets in which Virgin operates tend to have features in common: they are typically markets where the customer has been ripped off or under-served, where there is confusion and/or where the competition is complacent.

Contrary to what some people may think, this constantly expanding and eclectic empire is neither random nor reckless. Each successive venture demonstrates their skill in picking the right market and the right opportunity.

The book is divided into chapters related to – People, Brand, Delivery, Learning from Mistakes and Setbacks, Innovation, Entrepreneurship and Leadership, and Social Responsibility. Below is a compilation of things that I consider highlights in these chapters

  1. People – Find good people, set them free
  • Business has to give people enriching, rewarding lives, or it's simply not worth doing
  • Find energetic and enthusiastic people with the right attitude who can learn and grow into their work.
  • Put people together in a way that will have them bouncing ideas off each other, befriending each other, and taking care of each other, and suddenly they are coming to you, not with gripes and problems, but with solutions and great ideas.
  • Keep businesses small, spin-off when any business grows beyond a certain size, say strength of 100 people, promote from within
  • Enjoyment at work begins where all other enjoyments begin; in good health
  • A manager should be a considerate person who is as interested in the switchboard operator and the person who cleans the lavatories as he or she is in the fellow managers.
  • Encourage people to take ownership of the issues that they confront in their working lives.
  • A self disciplined employee will have the patience to conduct the routing business routinely, the talent to respond exceptionally to exceptional circumstances, and the wisdom to know the difference between the two.
  • The more you free your people to think for themselves, the more they can help you. You don't have to do this all alone.
  1. Brand – Flying the flag
  • Virgin is an exception. Being in the top 20 global brands, unlike other 19, it does not ply a well-defined trade. It is the only brand that is diversified into a range of business activities, including airlines, trains, holidays, mobile phones, media – including television, radio, cable – the Internet, financial services and healthcare.
  • We offer our customers a Virgin experience, and we make sure that this Virgin experience is a substantial and consistent one across all sectors of our business.
  • We move into a sector to fulfill our key role as consumer's champion only when we feel that we can potentially turn an industry on its head
  • Brands exist as a means of communicating what to expect from a product or service. A brand should reflect what you can do. You have to deliver, faultlessly and for all time, whatever your brand promises. So it's better to make your offering sound witty and innovative than to pretend you're more than you are.
  • Customer is the only common factor to all the range of things we are involved in.
  • The idea is to find newer ways to give customer a good time, have fun, a 'Way of life'.
  • This has evolved over a period of time by simply following our appetites and the things we were curious about.
  • I've always and continuously been interested in learning new things and, equally important, I've always wanted to share wanted to share what I learned with other people.
  • Irreverent humour is one of Virgin's brand values.
  • Befriending one's enemy is a good rule for business – and life.
  • Get the brand right from the start, by being honest with yourself about what it is you're offering.
  • Remember, a brand always means something, and ultimately, you can control the meaning of your brand only through what you deliver to the customer.
  • Publicity is absolutely critical
  • Virgin Brand is a flag
    • Virgin group is managed under branded venture capital governance model
    • Its bonding power gives many entrepreneurs an opportunity to run their businesses provided they pay due respect and agree to protect the integrity of the brand while doing business under the Virgin Umbrella
    • We've never let a Virgin company go bankrupt
  1. Delivery – Special Delivery
  • We thrive on ideas but our day-to-day business is about delivery
  • Two most important elements of good delivery are – good communication and attention to detail
  • Letter writing is an important way of communication
  • Keep talking, keep explaining
  • It's attention to detail that really defines great business delivery
  • Keep a notebook and jot down things that need doing.
  • The main reason why staff become frustrated is that the same problems and complaints keeping cropping up and never seem to get properly sorted.
  • I think company owners and chairmen should get out from behind their desks and go and sample their own products as often as possible.
  • Every change ushers in unforeseen consequences
  • Success one day does not give you a free lunch everyday thereafter.
  • Delivery is not just hard work: it's endless.
  • Keep a cool head. You're in business to deliver change, and if you succeed, the chances that no one will get hurt are virtually zero.
  • Engage your emotions at work.
  • Plans acquire detail as you test them against questions that on the face of it are really quite simple – and more to do with emotions than figures.
  1. Learning from Mistakes and Setbacks
  • One thing is certain in business. You and everyone around you will make mistakes
  • Face the facts – however unpalatable they might be. Failures usually occur when leasers avoid the reality of business
  • Trust the people around you to learn from their mistakes. Blame and recriminations are pointless.
  • Protect your reputation. Don't be afraid of making mistakes.
  • The first thing we do when we're faced with a problem at Virgin is to promptly look for the answer to a single question: "Is there a way out?". And then we do right to the endgame and ask:"What is the ideal way out of this problem for everyone?" Get 100% focused on finding that way out
  • If you're hurt, lick your wounds and get up again. If you've given it your absolute best, it's time to move forward.
  1. Innovation – A Driver for Business
  • The best, most solid way out of a crisis in a changing market is through experiment and adaptation.
  • If your operations are smaller, the distinction between innovation and day-to-day delivery is barely noticeable.
  • Larger complex businesses have higher chances of getting bogged down by normal activity related to delivery and innovating is seen as something extra, something special separated from routine activity.
  • Innovation can occur when the most elementary questions are asked and employees are given the resources and power to achieve the answers. E.g.
    • Virgin America (an airline) asked "What does a great travel experience look and feel like? How would it be different from anything else US travelers have experienced? What would it take to knock their socks off?" The result of letting lose people's imagination – Customers are generating a huge word-of-mouth advertisement through their blogs, photos uploaded on Flikr etc.
  • Government and powerful philanthropists have understood the power of direct research and development and harness innovation to their own long-term purposes by instituting prizes.
    • In 1714, British government created a prize (UKP 20000) for inventing a device capable of measuring longitude within half a degree of accuracy
    • In 1912, a French industrialist offered a trophy for seaplane race. To win a prize of 75000 francs a pilot needed to win three races in five years
    • In 1919, Raymond Orteig offered $25000 for the first non-stop transatlantic flight between New York and Paris.
    • In 1997, Ansari X prize offered $ 10 Million to carry three people 100 Km above the Earth's surface
    • In 2007, Richard Branson instituted $ 25 Million worth The Virgin Earth Challenge to demonstrate to the judges' satisfaction a commercially viable design which results in the removal of anthropogenic, atmospheric greenhouse gases so as to contribute materially to the stability of Earth's climate
  • Business has a duty to continue to push the boundaries to help resolve future challenges
  • Local solutions and small initiatives punch well above their weight while broad-brush initiatives get horribly bogged down in their own complexity.
  1. Entrepreneurs and Leadership – Holding on and Letting Go
  • You shouldn't blindly accept a leader's advice. You've got to questions leaders on occasions
  • True leadership must include the ability to distinguish between real and apparent danger. Beware of overreaction.
  • There is something that should – no, must –be written into every business plan: This company will have lots and lots of parties and social get-togethers. Parties are a way of galvanizing teams and allowing people to let their hair down.
  • There is a fundamental difference between an entrepreneur and a manager. Don't try to be both.
  • Entrepreneurs have the dynamism to get something started. They create opportunity that others don't necessarily see and have the guts to give it a go. Yet an entrepreneur is not necessarily good at the nuts and bolts of running a business.
  • The entrepreneur's job is effectively to put themselves out of a job each time the new company is up and running.
  • I don't think there have even a letter from my office which criticizes the staff or an individual. Virgin Group has always tried to look for the best in people. That way, you get the best back.
  • On firing people – "Decent leadership is about explaining clearly and unemotionally why a decision has been taken."
  • I think there is such thing as natural leadership. It takes a certain generosity of spirit to trust people, and to judge their merits and limitations fairly. It takes not a little bravery to bear bad news to people. Optimism, openness to possibilities and sheer self-confidence – some people have more of these qualities than others.
  1. Social Responsibility – Just Business
  • There is such a thing as enlightened self-interest, and we should encourage it. It is possible to turn a profit while making the world a better place.
  • Inasmuch as there can ever be answers to the problems of the world, capitalism – generously and humanely defined and humbly working with others who understand the issues and solutions – can create some of those answers.
  • It's more important to do what you believe to be right in life, and if this contradicts your business interests, so be it. Business can't be allowed to float above ordinary morality.
  • No one is asking you to save the planet. Just dream up and work on a couple of good ideas. No one expects you to find a global solution to everything. Just make a difference where you can. Local solutions have value in themselves, and some can be scaled up, so it doesn't matter how modest your budget, you can and will make a difference.

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