Were we going to do this thing?
Bravely, Sam nodded. We got into the barrel. A large crane lowered us into the fast-flowing river, a few metres away from the drop. A two-minute countdown began. It seemed an eternity, Five. Four. Three. Two . . .
A split second before we were due to plummet, I shouted: 'Stop! Hold on just one moment, I want to show you something.'
So we got out. And I showed young Sam the bottom of the falls. I pointed at the rocks below.
'Sam,' I admonished him, 'you were ten seconds from certain death. You shouldn't blindly accept a leader's advice. You've got to question leaders on occasions.'
Fast forward three years. I'm in Las Vegas announcing the new route to San Francisco with Virgin America. Someone has had this idea for a publicity stunt: they're going to drop me on a wire, dressed in black tie, from the Fantasy Tower at the top of Palms Casino, into the midst of the cocktail party taking place on the ground below.
Now, I've abseiled many times before, so this stunt is actually something I should feel relatively comfortable with, even though I've never before been dropped off the side of a building at 100mph. But it's an October day, and it's windy. I'm looking at all the harnesses and wiring used in the Spider-Man movies . . . and there's something about all this that's making me feel uncomfortable. And as I stand there on top of the tower, minutes before the leap, I know what it is: I'm far too close to the building. So I say to the technical team: 'I'm sorry, I need to go to my room.'
Everyone thinks I'm chickening out. But I just need to think. Four hundred feet. A windy day. And I'm being dropped almost within touching distance of the building . . .
There's a knock on my hotel-room door. It's our Virgin America publicity people.
'Would you mind just coming up to the roof to do the press anyway, Richard?'
I know I'm being suckered, but I can't get the words out to refuse. My legs carry me upstairs and there is the stunt team boss, assuring me that the wind has died down a little. It doesn't feel like the wind has died down at all. Indeed, it feels a damned sight windier to me. But these people are professionals, right? And everybody is counting on me to do this thing, right? And I don't want to disappoint people, right? And suddenly I'm hurling myself off the top of the building. I hurtle down, and on the way down I hit the casino. Twice.
I reach the bottom, utterly dazed and very sore. Have I broken my back? I just hang there like a rag doll while free airline tickets – part of our stunt – rain down unnoticed on the appalled guests now crowded around me.
Sam, you can consider yourself fully paid back for that joke we had at your expense. My backside hurts. My trousers are ripped to shreds. The press get some pictures of me looking rather grey and dishevelled. I should have listened to my own advice.
True leadership must include the ability to distinguish between real and apparent danger.
This is as true in business as it is in ice climbing, ballooning, mountaineering or powerboat racing. You need to understand the challenges to your enterprise and face up to them. Equally, you have to resist the temptation to overreact at the first sign of trouble.
Since I've been littering this book with tales of our own successes, mistakes and lessons, I hope you'll forgive me if – for once – I illustrate this last point by giving you an account of someone else's mistake.
On 14 February 2007, the combined company of NTL, Telewest and Virgin Mobile relaunched as Virgin Media, creating the largest Virgin company in the world. For the first time consumers could get everything they needed from one company – we were the UK's only quad play of TV, broadband, phone and mobile, offering the most advanced TV-on-demand service available, V+, our high-spec personal video recorder and really fast broadband Internet access.
Overnight, Virgin Media had become the UK's most popular broadband provider, the largest mobile virtual network operator and the second largest provider of pay TV and home phone. We were taking on the Murdoch empire.
Rupert Murdoch has wielded more power over a longer period of time than any other businessman on the planet. The Australian, born in Melbourne, built a newspaper empire in his homeland, expanded into Britain in 1968, and snapped up Dow Jones in the USA in 2007. His satellite television empire straddles the globe, and his newspapers are hugely influential. Rupert Murdoch is someone to be feared and admired in equal measure.
Rupert is now in his late seventies, and while he still has immense energy, it is his two sons, Lachlan and James, who are poised to take his place at the helm. In November 2006 James, the chief executive of British Sky Broadcasting, heard that Virgin Media were planning to acquire a majority stake in ITV, Britain's first and largest commercial TV station.
Deeply worried that the combination of Virgin Media and ITV might give Sky a very serious run for its money he tried to stop us. How? He bought 17.9 per cent of ITV's shares – at a cost to Sky's shareholders of £940 million.
At the time, he was generally praised by the press for pulling off this deal – but it turned out to be perhaps the biggest mistake of his otherwise stellar career.
The media world – and the politicians – knew that his move was anti-competitive, and he had only done it to stop us getting ITV. To that extent, he may have succeeded. James Murdoch's intervention had, for the time being, frustrated our plans to take over ITV.
The intervention led to a war of words between us, legal action and a decision by Sky to withdraw content, such as Lost and 24, from our Virgin Media service, at significant cost to itself in terms of lost advertising income.
Soon after BSkyB bought the stake, Virgin Media complained to the Office of Fair Trading, arguing that competition in the UK TV market had been impacted. The Secretary of State referred the acquisition of a 17.9 per cent stake to the Competition Commission.
James Murdoch bought ITV's shares at £1.35 each, overpaying in the market to secure them from two large institutional investors, who promptly then went back into the market and repurchased positions at about £1.10!
On 29 January 2008, the Competition Commission ruled that Sky must cut its stake in ITV from 17.9 per cent to below 7.5 per cent. BSkyB, having paid 135p a share, could now be forced to sell below 50p. And ITV's share price continued to fall. In July 2008, the ITV shares were worth only 40p each.
So what's the cost to BSkyB of that share purchase? At a share price of 40p it would be in excess of $1.3 billion. James's mistake was to overreact to what Virgin was doing. He could see that Virgin Media was going to be a threat to the Murdoch media empire and that we would do well. Virgin Media's aim was to give Sky a run for their money. But I don't think it would have damaged Sky in any dramatic way – certainly not nearly as much as he's lost trying to stop us.
Once you've been able to assess the level of danger in any given situation, you must be able to honestly gauge your own strengths and weaknesses as leader. You need to be able to recognise what you can do as an individual – and how you inspire and motivate other individuals to cooperate willingly to get the job done.
How to achieve this? Well, for starters, this 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 galvanising teams and allowing people to let their hair down. They have to be inclusive and encouraging, and then they are an excellent way of bringing everyone together and forging a great business culture.
I used to invite everyone in the Virgin business to a party at my home in Oxfordshire – but unfortunately it became too big. At the last one we held – over three days – we had nearly 60,000 people. We put on fairground rides, sideshows, hamburgers and hot dogs, and rock bands – all paid for by the Virgin Group. I stood at the entrance and made sure I shook everyone's hand. My hand was swollen and rather painful after two days of this, but it was worthwhile. Today we have smaller gatherings, and I aim to get to as many of them as possible.
The Virgin Blue party, meanwhile, has become a
glittering, red-carpet event – raising thousands for charity in Australia. The event is organised, set up and served by Virgin Blue people. It's headed by Jane Tewson, who established Comic Relief in the UK and lots of other charity projects, and who has been working in Australia with Aboriginal people. I donate a week's holiday in Necker Island in the British Virgin Islands as a major auction prize, and one trick I use is to get the runner-up, who has bid perhaps A$80,000, and the winner, who's paid A$90,000, both to pay A$85,000 and both go to Necker together. It's forged some great friendships. We also raise A$100,000 by letting someone name one of our aircraft, and all that costs is the paint job. It's easy money for charity and fantastic for staff morale.
I think governments should make parties completely tax-deductible, with the proviso that every time there's a knees-up, shindig, disco or rave, the proceeds go to charity. That's the deal. It should be much more than just a fun night for everybody. A night when everybody gets merry is good, but it's even better if you can combine it with something that makes a difference to others. Music events, fashion shows, sports contests, anything that gets people together and is enjoyable can be rolled out across every business – just don't let anyone use the charity's money to pay for the drinks!
A poor leader can make life hell for so many people. Leadership is not about a person sitting at the top of the tree, making all the decisions and expecting everyone to do as they're told. That's hardly leadership: it's more like dictatorship.
I have huge admiration for the British version of the TV show The Apprentice, in which people compete for a single job with Alan Sugar. The camerawork is slick, the editing is clever, the music is great. The power of television is immense, and if it's capable of inspiring people to treat business with excitement and enthusiasm, that can only be a positive thing. Frankly, anything that can be done to inspire young people to give it a go has to be worthwhile.
But I have one issue, and that's with the way Alan has to say, with a frown, at the end of each episode: 'You're fired!' It's in his contract because it makes good television. And it's cobblers. The whole competition is structured around the fear of being fired. While this does make it interesting for the viewer, it is not, in my opinion, how businesses should be run.
Where The Apprentice is successful is in its wider portrayal of the modern business world. There are few jobs for life any more. As individuals we need to be positive and sell ourselves. Most of those taking part in the show will have a better grasp of this than is apparent on camera. They know that failure is not something to fear. They know there are other options, other places to work.
So here it is important to stress that there is a fundamental difference between an entrepreneur and a manager. They are often contrasting people and it's crucial to realise this. Although I'm sure there are entrepreneurs who could make good managers, my advice would be: don't try to do both.
Entrepreneurs have the dynamism to get something started. They view the world differently from other people. 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. I admit that this is not my true forte – and recognising this weakness is essential for the entrepreneur. The annals of business are littered with stories of the driving force trying to run the business on a day-to-day level – and failing dreadfully.
Good managers are worth their weight in gold. People with the acute psychological know-how to smoothly organise and handle the pressures of an ongoing business venture are the glue that binds the business world. My notebooks are full of contacts and names of people who have been recommended or whom we seek out to come and be Virgin business managers. Cherish them, and give them a proper stake in the business, because they deserve a big share of any success. Once the entrepreneur has the company up and running, they often need to pass the baton on to the manager. The creator's job is to find someone with expertise who understands the vision and is prepared to follow the path.
The entrepreneur's job is effectively to put themselves out of a job each time the new company is up and running. Then they can step aside and free themselves up to be entrepreneurial in a different business. It is generally asking for trouble for an entrepreneur to stick around for too long, trying to cover both roles.
In a small business, you can be both the entrepreneur and the manager while you are getting it going. But you need to know and understand everything about that business. And I really mean everything. An emerging entrepreneur should sign every cheque. Examine every invoice, and you'll soon appreciate where your money is going. Even in a big business like the Virgin Group, I sit down now and again and sign every single cheque that goes out, and I ask my managing directors to do the same. For a month. Sign everything for a month every six months and suddenly you're asking: 'What on earth is this for?' You'll be able to cut out unnecessary expenditure quite dramatically when you do that.
As a small-business person, you must immerse yourself 100 per cent in everything and learn about the ins and outs of every single department. As you get bigger, you will be able to delegate, and when people come to you with their problems, they'll be surprised how knowledgeable you are and how much practical advice you can offer. The reason you're knowledgeable is because in the early days of the business, you learned all about it. This is how business leadership is achieved. There are no short cuts. Remember my earlier description of Brett Godfrey at Virgin Blue who insists that all of their senior managers spend time doing the different manual jobs like luggage loading. (I needed a physical after my stint!)
And as the business gets bigger, you will have to decide if you're a manager or an entrepreneur. If you're a manager you can stay with that business and help it grow. If you're an entrepreneur, you need to find a manager. Then you should move on, enjoy yourself and then set up your next enterprise.
Nothing in business is quite like the early, frenetic days of an ambitious start-up project. There's always an amazing buzz about this kind of thing. It's high-octane and high-risk and it builds a tremendous spirit and camaraderie which takes everyone through some very trying times. I've seldom seen people work harder than in the initial stages of a new venture. Once a business matures and is established, it can become more challenging to retain that excitement. What we do at Virgin is not let businesses get too mature. If you can keep the businesses relatively small, people will know each other within the organisation and feel like part of a team.
It's then down to the leadership of that organisation to keep making sure that people are challenged and motivated. Jack Welch, a great business leader, who transformed GE into one of the world's leading corporate powerhouses, was constantly evolving tools and methods in search of continuing growth. He encouraged managers to start each day as if it was the first day in the job. He said that managers were often afraid of change – and they must embrace it. I agree with Jack on that.
We never let people sit on their laurels, and we keep on trying to improve things. The minute Virgin Atlantic was voted 'The airline with the best business-class seats in the world' in the UK Airline awards, our designer was already beginning to work on the next seats in order to beat our own expectations rather than our competitors'. You must either stay ahead of other people, or stay ahead of yourself, all the time. If you really put your mind to it you are normally going to find a better way. You have to keep on questioning the way people do things.
Looking back over the personal notebooks I have kept for more than thirty-five years, I don't think there has ever been a letter from my office which criticises the staff or an individual. Now and again I've disagreed with something and suggested changes in behaviour. But the Virgin Group has always tried to look for the best in people. That way, you get the best back.
A plant needs to be watered to flourish and people need encouragement so that they can flourish. If this sounds precious, so what? It's true. When someone says something nice about any of our Virgin ventur
es, I feel great. I'm flattered. When someone has a go, it knocks me back. We've developed a thicker skin over the years, but I hope we haven't lost the sensitivity to do things properly. If witless criticism can deflate me, after thirty-odd years of business success, then what a fool I'd be to go around ticking off other people. People say business is a cut-throat affair. Certainly it's a tough game – we talk about 'the competition' for a reason. And, yes, sometimes people play dirty. But nothing in my years with Virgin has eroded my habit of saying thank you to people or praising them. I was brought up in England by parents who praised and encouraged me a lot. Why would I behave differently to others?
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