Right across our business we have a philosophy of encouragement. Our people are very rarely criticised. If someone makes a howling mistake, usually they don't need to be told. They know.
One of my weaknesses is that I find it very hard to tell someone that their services are no longer required in the business. It's an unpleasant obligation, and one you absolutely must not shirk. If you're a small company, it is vital to do it personally. You really have to see the person face to face rather than get someone else to do it. I think, generally, a personal explanation of the situation is appreciated, and it helps the individual you're letting go to move on.
Of course, if you actually enjoyed firing people, there'd be something wrong with you. Jack Welch made a point of continually weeding out the people at the bottom. Alan Sugar and Donald Trump aren't afraid to fire people either, though I doubt they go about it quite the way The Apprentice would have us believe. There's a machismo about the way some managers talk about hiring and firing that I find downright repugnant. A senior person at Apple rather proudly says in his speeches about firing people that 'I'd rather have a hole than an asshole.' My philosophy is very different. I think that you should only fire somebody as an act of last resort.
If someone has broken a serious rule and damaged the brand, part company. Otherwise, stop and think. Indeed, these days you have to. There are a lot of legal and employment issues to take into consideration before you even go down that route. This can be frustrating, but to be honest I don't think it's the nightmare that some managers make it out to be. People respond to their surroundings. If someone is messing things up royally, offer them a role that might be more suitable, or a job in another area of the business. You'd be amazed how quickly people change for the better, given the right circumstances, and how willing they are to learn from costly mistakes when offered a second chance. If you've over-promoted someone and it hasn't worked out – which happens – then offer them their old job back rather than firing them. It's your fault for over-promoting them. Not theirs.
A lot of companies these days call themselves 'families'. Usually, this is just an embarrassing bit of public relations flannel. I think companies can be like families, that it's a good approach to business, and that Virgin's created better corporate families than most. We've done it by accepting the fact that we have to think beyond the bottom line. Families forgive each other. Families work around problems. Families require effort, and patience. You have to be prepared to take the rough with the smooth. You have to put up with your troublesome siblings. They're your family: you can't just throw them out on the street.
The higher up you go in a company, the more perilous your job position is if you don't perform. In football, dropping out of the Premiership – or failing to get into the Champions League – can be disastrous. The board of directors, or the club chairman, must hit upon a formula for success, and the buck has to stop with the coach. Sacking the coach is easy. The hard part is making sure you're getting someone better than the person you're dropping. In football, that doesn't always seem to be the case.
I often read about chief executives, managing directors and large company bosses who are told to resign from their high-profile companies by investors because they have made a hash due to poor business decisions. In the United States, for example, we've had Angelo Mozilo, the CEO of Countrywide Financial, Citigroup's boss Chuck Prince and Merrill Lynch's Stan O'Neal all departing with $100-million-plus compensation packages despite their businesses being caught in the sub-prime mortgage meltdown.
Too many top executives are given massive payouts and allowed to walk away, leaving others to sort things out. I think the opposite should happen. In most cases, leaders should stay on until any problems are sorted out – or a solution found – and then they can go and with a fraction of the money they would earn if successful.
Decent leadership is about explaining clearly and unemotionally why a decision has been taken. This applies just as much to a large company when there are lots of jobs at stake. For a business to survive under extreme pressure it must take decisive action. And when there are a lot of redundancies, that can hurt the pride and self-esteem of a lot of hard-working individuals.
After the terrorist attacks on New York City, Washington and United Flight 93 on September 11, 2001, our 'Council of War' met each day to look at the unfolding situation. I see from my notebooks that my first phone calls – of many hundreds made within those vital hours – were to our bankers, to let them know of the cash position; and to the UK government, seeking their support and encouraging a common approach. We also had to talk candidly to other airlines to get a proper picture of events, so we needed temporary anti-trust immunity – we didn't want to be accused of working in consort. I called the New York mayor, to pass on my condolences.
Transatlantic air travel stopped and I pleaded with Stephen Byers, the Transport Secretary, not to let the position of Britain's airlines be weakened when the US government was supporting its own national carriers. We didn't get the same cushion of support as the American airlines – and we couldn't and didn't hide in Chapter 11 administration. If Virgin Atlantic hadn't responded decisively to the Twin Towers attack, then we would certainly have gone out of business. We began renegotiating our bank lending and our aeroplane contracts and we did everything necessary to cut our costs. We had to reduce our US capacity by a third, and so we began looking at other international routes instead, such as launching into Nigeria, China and India. Then we had to relay the bad news: reluctantly, we were letting 1,200 Virgin Atlantic people go. It was the first mass redundancy in Virgin's history. We offered our people part-time work, job sharing and unpaid leave. We also tried to find them work in other parts of the business. Our managers made tough decisions that hurt many people, but we promised to get them back on board as soon as conditions improved – and, thankfully, most returned.
Dealing with Virgin Atlantic's flight engineers was particularly difficult for us. A breed of aviators with a passion for flying, they had considerable skill, and were tremendously loyal and committed to our company. And here we were, putting them out of a job.
If your rival airlines introduce planes that require only two people in the cockpit – that's the captain and first officer – rather than three, as was still the case with Virgin Atlantic when we had the flight engineer on board, then you're faced with a serious business issue.
The reliability of a new generation of planes and the increasing sophistication of fly-by-wire systems meant that airlines could reduce the number of flight crew in each cockpit and, in the process, save a great deal of cash. Unfortunately, the flight engineers were the victims of progress and obsolescence in the airline industry. There was no longer any need for them, and we had to tell many of our engineers that they had to go. It happens sometimes. It's horrible. And there is no way around it. If we hadn't done this, we wouldn't have been competitive.
Over the years in the Virgin Group our diversification has been a bonus. We've been able to move people around our various companies, offering different jobs until things improved again. But this wasn't easy with our flight engineers. They had extremely specialised skills and we didn't think that converting them to commercial pilots would work for us. Our captains and first officers were normally highly experienced pilots who had spent up to ten years on short-haul flying.
Since we were saving cash by laying these people off, they deserved the lion's share of the savings in their redundancy pay. It was far more than the legal minimum and I think most of them appreciated the gesture. It was a decent package. The engineers thought it fair and – just as important – so too did their colleagues who were staying on with the company.
Many elements of leadership can be prepared in advance, planned and rehearsed. You don't have to be Winston Churchill to be a good leader.
That said, I think there is such a thing as natural leadership. It takes a certain generosity of spirit to trust people, and to judge their merits and limitations fa
irly. 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.
So, in addition to the practical steps you can take, I think there is a huge amount to be gained in following the examples of great natural leaders. You can certainly read about them; but you should also be asking who among your circle is a leader you can learn from. I am hugely privileged to have met some great natural leaders in my time. Some are internationally famous; many are not. To describe all the help, influence and mentorship I've been sustained by over the years would make another book, so for now, let me just tell you about one important figure in my life: Nelson Mandela.
When people think of 'Richard Branson', they tend to think first of all about Virgin's involvement in the music industry. It's a piece of our heritage we're extremely proud of. When I cast my mind back to what shaped me most as a businessman, however, I find myself remembering an even earlier phase of my career; and I recall my brief, fortunate and illuminating adventures in journalism.
What, after all, could be better for a young man searching for answers in life, than to go around interviewing people? I was never going to be a great journalist, but one skill I did have was being able to keep my mouth shut. I let the people I was interviewing do the talking. I was also quite unembarrassed when it came to asking what, in hindsight, seem naive and obvious questions. Both are skills I've carried into business, and they have served me incredibly well. The ability to listen, and the willingness to stick your neck out and ask the obvious question, are criminally underrated business essentials.
I was brought up in the mid-1960s and this was generally a caring and compassionate time, when a lot of young people became socially aware and began to understand how the world treated minorities, what their rights should be, and how a fairer deal might change things. From the other side of the Atlantic, I followed with fascination the struggles of black Americans against racism, discrimination and economic inequality.
In March 1968, I was proud to be marching to the US embassy in Grosvenor Square in London in protest at US involvement in the Vietnam War. I strode side by side with left-wing firebrand Tariq Ali and actress Vanessa Redgrave, and I remember the fear when the police on horseback charged us with truncheons and tear gas. I was also invigorated by the thought that young people were doing something direct and positive. And through the prism of Student magazine, I – a privileged English public schoolboy – heard for the first time about the horror of Africa. I learned a little about oppression, and disease, and famine. Student campaigned against the horrific Biafran War in Nigeria, and we used harrowing photographs by Don McCullin, the celebrated photojournalist whose Sunday Times images would go on to define the conflict in Vietnam and Cambodia. We helped bring to the public's attention the plight of millions of children dying of starvation who were caught up in the civil war.
The autumn issue of Student in 1968 was awash with anger: the black American ghettos were exploding with violence; rioting students were throwing cobblestones at the police on the streets of Paris; Russian tanks had crushed the Prague Spring in Czechoslovakia; Vietnam was withering under a rain of bombs. There was so much to cover. I remember we had Gyles Brandreth writing on America, and a report from Vietnam by a fresh-faced seventeen-year-old Julian Manyon – now a veteran ITN foreign correspondent – in which he interviewed a North Vietnamese doctor about the death of Vietcong soldiers through dysentery. But it was the interview I conducted with the American black militant writer James Baldwin which shocked me to the core. If you are harbouring any doubt in your mind about the value of naive questions, read this. Look what he made of my stumbling questionnaire. I would never have elicited such fire had I been less direct.
What kind of education did James Baldwin have?
'At school I was trained in Bible techniques. I received my education in the street.'
Were there good schools in America?
'How can there be? They are built by the white state, run by white powers and designed to keep the nigger in his place.'
Can the white man give you freedom or must the black man take it for himself?
'The white man can't even give it to himself. Your record has not been very encouraging. I DON'T EXPECT YOU TO GIVE ME ANYTHING. I am going to take what I need – not necessarily from you, this is your myth – but I intend to live my life. I am not interested in what white people do. White people are not that important. What one is fighting against is not white people, but the power standing between a person and his life. It is as simple as that. It is not a race war, it is a war between poverty and privilege, freedom and imprisonment.'
I was transfixed by what Baldwin was saying to me – his vitriolic yet restrained anger at what he saw as the inequality of life.
In The Fire Next Time, written in 1963, he had predicted that in ten years' time we would see the end of white supremacy. I asked him if he still believed this.
Baldwin replied: 'I didn't say it in quite that way. I said that this was a prophecy – and the prophet may well be right. I am telling you that Western societies are visibly in trouble and are visibly crumbling.'
'Under pressure from the black man?'
'Under the weight of their own lies.'
This was strong, urgent stuff for a white, teenage editor. It was an anger that I could not understand, because I had nothing to measure it against. I wanted to help change the world, but what did I know about the world?
Fred Dube, a black African, born in Johannesburg, a social worker married with two children, joined the African National Congress in 1955. From 1964 to 1967 he served four prison sentences for sabotage, in Ladysmith in Natal, Leeuwkop in Transvaal, on Robben Island and in Groenpunt in the Orange Free State. He left for England in July 1968, and became a bank clerk in London. He told Student that the poverty, homelessness and malnutrition in his homeland all stemmed from one problem: South Africa's vicious and unjust apartheid society. Some time later I heard about the black activist Steve Biko, and then I encountered the name of Nelson Mandela. His parents called him Nelson because it sounded 'white', and they thought he would get on better in a whites-only society. He was viewed as a dangerous extremist by some in Britain but I began to know the truth about this incredible man.
When I first got to know Madiba – as he is affectionately known in Africa – I was always in awe and slightly nervous meeting him. Then when he smiled, his warmth and impish humour simply radiated into your heart: 'Richard, it is a great honour to meet you.' I soon learned that he says that to everyone on first meeting them! Here is a man who has suffered so much because of his colour and what he believes in. He was a victim of apartheid injustice, handed a life sentence at forty-six. His prison number was 466/64, which stood for the 466th prisoner admitted to the dreadful Robben Island jail in 1964. His cell was six feet square, the walls two feet thick. When he lay down his head touched one end and his feet the other. His first months in jail were spent with fellow political prisoners crushing rocks into gravel using a four-pound hammer. It was achingly strenuous and constantly painful. I have seen his cell – it must have been hell on Earth.
He says in his autobiography, Long Walk to Freedom, that 'Robben Island was without question the hardest, most iron-fisted outpost of the South African penal system. It was a hardship station not only for the prisoners but for the prison staff. The warders, white and overwhelmingly Afrikaans-speaking, demanded a master–servant relationship. They ordered us to call them baas, which we refused to do. The racial divide on Robben Island was absolute: there were no black warders, and no white prisoners.'
Yet I have never witnessed one scintilla of anger or indignation from the man.
His spirit is best captured, I think, in the address he gave, not long after being elected president, at the unveiling of a statue of Steve Biko. 'While Steve Biko espoused, inspired and promoted black pride, he never made blackness a fetish . . . accepting one's blacknes
s is a critical starting point: an important foundation for engaging in struggle. Today, it must be a foundation for reconstruction and development, for a common human effort to end war, poverty, ignorance and disease.'
Here are the characteristics of great leadership, contained in a handful of sentences. The concern for people is here; so too the easy intelligence Mandela brings to the judging of individual merits. There's authority in these words, but they're not hectoring or bombastic: they create for us a clear, simple vision of what has to be achieved.
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