I enclosed a mock-up picture of Geoff’s head on top of a Virgin stewardess’s shapely body.
Geoff’s reply was curt. ‘We’re running an airline — not a circus.’
Qantas shares promptly dropped 3 per cent.
Virgin Atlantic began flying into Australia in December 2004. And Geoff never did wear the outfit!
Brett is fastidious about his baby. A few weeks before Virgin Blue was floated on the Australian stock exchange, a group of financial journalists were waiting to interview him about the numbers. He was due off the flight from Brisbane to Sydney but there was no show as the last stragglers came down the exit ramp. An airport staffer was sent to collect him. He was on the flight, but he was helping attendants vacuum the aisles, remove the dirty drinks cups and recross the seat belts to ensure a faster turnaround. He knew that punctuality was the key to successful business — and flotation.
On Thursday 13 November 2003, Brett and I were partying hard with a crowd of Virgin Blue people at the Loft cocktail bar in Darling Harbour. We staggered out at 4 a.m. Three hours later, and under the harsh lights of a television crew that had followed us throughout the process, we set off for meetings with bankers and investors.
My meeting with Goldman Sachs a few days later was one of the most encouraging I have ever had in business. The Virgin Blue flotation was eleven times oversubscribed. Two hundred and fifty institutional investors were demanding 3.8 billion shares! Impishly, I wondered if I should call for Geoff Dixon to raise the white flag on his own business.
On 8 December 2003, the day we floated Virgin Blue on ASX, we had a market capitalisation of A$2.3 billion. Virgin’s return on its investment was staggering. But what was even more satisfying for me was seeing Brett, the founding partner, and his team also reaping the rewards of Virgin Blue’s success.
Brett’s share was A$80 million. Today, he is one of the richest Australians under the age of forty-five, thanks to the millions he made from the flotation. Ask him why he doesn’t want to go and retire to a Queensland beach, and he just shakes his head. He can see the opportunities ahead, when Virgin starts flying from Australia to the United States. And besides, he still loves running Virgin Blue.
Maintaining a consistent tone in the face of rapid growth was a key requirement — and here, brand values helped enormously. I think Brett’s naturally a Virgin sort of person. Had he never worked with us, his thinking would not be radically different today. But I believe thinking about the Virgin brand enabled him to focus, and to convey values quickly and efficiently to his colleagues and his staff.
The business now employs over 4,200 people — and it is difficult to get around to everybody — but Brett insists on speaking at every induction course to new recruits. At these sessions he is refreshingly honest. He says that a cabin crew member’s job can be tiring. If a person has the temperament to smile, stick with it and enjoy it, then that’s fine; but he won’t throw money at people because they’re miserable. He believes it’s ludicrous to pay people inflated salaries in order for them to have a bad time in a service job they hate. Look, he says, give it three years or so, then decide. If you like it, stay on — but if you don’t then life’s too short.
Brett recently recalled to me, ‘I was adamant when we started this airline that we would do it from scratch. There was an airline in New Zealand for sale and we didn’t want to go near it. I felt we had to start with our own. Our airline wouldn’t have been ours if we bought someone else’s baggage.’ (It’s a point discussed earlier: you can’t restructure culture. If you’ve burnt people, if you’ve killed their enthusiasm or commitment, then changing office spaces or putting a few more dollars in their pocket will not unduly affect the culture that exists.)
At the time of writing this book, the aviation industry is facing global issues that are more challenging than at any time I have known. Virgin Blue and Qantas share prices have fallen and both are having to reduce capacity and look to cut costs to meet our soaring fuel bills. This is the time when a management team really have to prove how strong they are, and show calm leadership and good judgement. I think Virgin Blue was Qantas’s wake-up call, and in Geoff they had a talented and capable CEO who has done the job that needed doing. On the other hand, the story of Virgin Blue has been one of bold expansion and great delivery; now, in order to weather these storms, Brett and his team will have to show other qualities, such as protecting your downside and assessing risk.
Now, Virgin Blue is its own, unique proposition. The understanding of the Virgin brand is very strong, and they’ve taken it and run with it. They’ve hybridised the Virgin brand with their own national culture to produce something exciting and different — though I have to say success has not made Brett any less cheeky.
On Saturday 29 March 2008, we held a ball for 3,000 people in our massive hangar in Brisbane, a twenty- minute ride from the city centre. Before the big event, I was invited to Brett’s home for a VIP reception in the garden. I was a bit precoccupied that afternoon. I had just returned from Makepeace Island, which is being developed as a holiday destination for Virgin Blue staff, family and friends. It’s a wonderful tropical island, teeming with wildlife. I had just been given a briefing about a campaign that was hotting up on the island. I was told that Makepeace was the indigenous home of the Queensland tree frog and that this was a protected species. Our plans for the island were endangering the frog and this was causing upset in the local community. I’d been told that there might well be a protest at Brett’s VIP party, but that I didn’t have to worry because the police would cordon it off. I presumed it was all under control, but the idea that we might have slipped up so badly over a hot ecological matter was concerning. Was I really so out of touch? I’d never even heard of the Queensland tree frog. Neither had anyone around me. Was I getting sound advice?
So there we all were, in Brett’s garden, with several major politicians, including Australia’s Federal Treasurer Wayne Swan, when, at 4.40 p.m. exactly, Brett took a call on his mobile.
He turned to me and said: ‘Do you know anything about this, Richard? There are some protesters heading towards the house with placards and banners.’
I told Brett about the frogs on Makepeace. ‘They’re Queensland tree frogs,’ I said.
Brett whistled through his teeth.
‘What?’ I said.
‘Did you say
‘Yes. What?’
Just at that moment there was a commotion outside on the street and a security guard came bursting through to say that the protesters were heading for the garden. Within minutes, there was a band waving banners and shouting: ‘Makepeace not war on the tree frog’ and ‘Sir Richard — shame on you.’
Brett said: ‘Richard, we’ve got to deal with these protesters and talk to them.’
I just froze.
‘Richard, you have to talk to them. It’s the
I couldn’t think how to respond. But Brett stepped forward and I realised, with a sinking heart, that I had to give him moral support. I strode up beside him. Locking eyes with me, the protesters turned their protest signs around.
The placards read: ‘
In 1973 the economist Ernest Friedrich Schumacher penned a collection of essays under the title ‘Small is Beautiful’. It became a credo that was adopted by many as an antidote to the large conglomerates that ruled the business world. E F Schumacher was a great thinker, who made some exact predictions. He pointed to the end of fossil fuels and wrote that the West was consuming too large a proportion of the world’s precious natural resources. He believed multinational corporations and heavy industrial conglomerates used up a vast amount of the world’s resources yet accomplished little. He was one of the first people to point us in the direction of a sustainable world.
When I read his work again in 1999 I wanted to find a positive direction for the Virgin Group. And I came to the conclusion that there was little purpose in us trying to become the biggest brand in the world. It was much more valuable to become the most respected.
Once I would take a look at any business opportunity where the customer was being poorly served. Now the Virgin Group has more of a geographical focus. Today’s priorities for the Virgin Group are transport and tourism, communications and media, financial services, leisure, entertainment and music, health and well-being, and renewable energy and the environment. Not every Virgin business has been a soaraway success. But we’ve learned along the way. We’ve learned to improve what was already on offer and to look for areas where the consumer deserved better. We’ve learned to ride our luck.
