Business Stripped Bare

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Over the years, the Virgin Group has made it its business to run railways, build a spaceship, launch a new airline in Africa, and help fight Aids and HIV. These are our concerns. Not all of them are ‘businesses’ in the usual sense — and the journalists who have accused the Virgin Group of making no business sense are right, but in the wrong way. The greatest and most unusual achievement of the Virgin Group is that, unlike most businesses, it remembers what it’s for.

Business is creative. It’s like painting. You start with a blank canvas. You can paint anything — anything — and there, right there, is your first problem. For every good painting you might turn out, there are a zillion bad paintings just aching to drip off your brush. Scared? You should be. You start. You pick a colour. The next colour you choose has to work with the first colour. The third colour has to work with the first colour and the second. The fourth colour… You get the idea. You’re committed now. You absolutely cannot stop. You’ve invested. There is no reverse gear on this thing. People who bad-mouth businessmen and women in general are missing the point. People in business who succeed have swallowed their fear and have set out to create something special, something to make a difference to people’s lives. Are the colours just right? Are the planes polished? Do the crew look good? Are they comfortable? Are the seats OK? What’s the food like? It costs how much…?

And whether you’re a surrealist or a CEO, there are always bills to pay and money always arrives later than you ever dreamed possible. In the teeth of a downturn, petty financial hassles can turn into major, life-changing crises, and tough decisions often have to be made. This is the side of business that journalists like to write about — but it’s the least exciting, least distinctive part of business. It’s secondary. It’s dull. What really matters is what you create. Does it work or not? Does it make you proud?

When I meet people around the world they often say to me I must have a wonderful life. They’re not wrong. I am a very fortunate person. I have my own island in paradise, a wonderful wife and family, loyal and entertaining friends who would walk over hot embers for me, and I for them. I travel a great deal and I’ve had many life- affirming adventures and experiences. Even George Clooney once let slip that he’d swap his life for mine — much to the excitement of my wife!

Success has made much of this possible. Would I have been happy without my successes in business? I’d like to think so. But again, it depends on what you mean by business. Would I have been happy had I not found concerns to absorb me and fascinate me and engage me every minute of my life? No, absolutely not, I’d be as miserable as sin.

Today the Virgin Group spans the world. It is truly an internationally recognised brand name, trusted and enjoyed by many hundreds of millions of people across the continents of the world. Could it collapse overnight? Almost certainly not: we’ve built it to contain any amount of damage, by organising it into around 300 limited companies. I think we’ve proved that a branded group of separate businesses, each with limited liability for its own financial affairs, makes sense. We’re never going to have a Barings Bank situation where a rogue trader is able to bring down the whole Virgin Group. One disaster isn’t going to cause 50,000 job losses worldwide. Forty years’ worth of work isn’t going to be flushed down the toilet overnight. And although the combined Virgin Group is the largest group of private companies in Europe, each individual company is generally relatively small in its sector. And so we have the advantage of being the nimble ‘underdog’ player in most markets.

At the time of writing, we are sailing straight into a brute of a storm. More than a year ago now, tens of thousands of poorly advised families in America ran out of money to pay their mortgages. They lost their homes. Their misfortune is now being visited upon the rest of us on a global scale, as the sub-prime mortgage crisis convinces bank after bank to reduce its lending. One major UK bank has already collapsed. Some global financial institutions have needed massive government refinancing. It’s not a disaster — yet. But the price of oil is going through the roof, and consumers throughout the world are noticing the difference to their fuel and heating bills. Their response is perfectly sensible: they’re not buying things. But this in turn could spell real trouble for the consumer businesses on which many national economies depend.

Like any business, the Virgin Group has to steer around all these obstacles. In Business Stripped Bare I’ll be looking at the key elements that have brought success to our companies, despite poor economic conditions and changing markets.

In business, as in so many other creative endeavours, the idiots’ guides are for idiots. Like you, I’ve scanned the airport bookshelves. Like you, I’ve browsed the business books. Like you, I’ve felt my heart sinking. There are exceptions — I’ll mention the ones I’ve enjoyed as I go — but in general these business writers are a dreary bunch. Most of them seem to be writing about what business is like from the outside — not about what it’s like to actually do.

They’re writing, in some abstract way, a prescription for how to paint a picture. They’ve got nothing to say about painting a bad picture, or about how to tell a good picture from a dozen bad pictures, or how to let go when a good picture turns out to be bad, or how to live with yourself when you realise you’ve thrown a good picture away, or…

You get the idea. Every business, like every painting, operates according to its own rules. There are many ways to run a successful company. What works once may never work again. What everyone tells you never to do may just work, once. There are no rules. You don’t learn to walk by following rules. You learn by doing, and by falling over, and it’s because you fall over that you learn to save yourself from falling over. It’s the greatest thrill in the world and it runs away screaming at the first sight of bullet points.

Most of what I have done with the Virgin Group is about my own gut instinct. I’ve never analysed what I do in any formal way. What would be the point? In business, as in life, you never step into the same river twice.

So all I can do for you now (and I firmly believe that this is all anyone can honestly do) is map the territory I’ve seen. The good news is, I’ve covered a lot of territory.

On 11 November 1999, surrounded by near-naked women, I announced Virgin Mobile from inside a giant see- through mobile phone in Trafalgar Square, London. Three years later, in Times Square in July 2002, I paid homage to the hit British film The Full Monty; wearing only a cellphone to cover my shame, I unveiled Virgin Mobile’s partnership with MTV. The point of these hugely enjoyable stunts was that, with Virgin, what you see is what you get.

Well, there are no stunts here (the editor tells me we can’t afford a pop-up section), so I’ll just have to rely on the title to get this book’s message across. I’ve stripped Virgin’s businesses bare. Rather than banging on about how successful they are, I’ve written about what my companies are actually about. What were our intentions? How well, or how badly, did we realise our early hopes? I’ve gone through my notebooks and diaries, hunting for common themes and ideas, and I’ve divided what I’ve found into seven sections. I’ll be looking at:

People

The brand

Why delivery is vital

What we learn from our mistakes and setbacks

Innovation as a driver for business

The value of entrepreneurship and leadership

The wider responsibility of business

I think of our brand as one of the premier ‘way of life’ brands in the world. Whether you’re in the United States, Australia and New Zealand, Japan, South Africa, India, Europe, Russia, South America or China, the Virgin brand means something. The Virgin brand is about enjoying life to the full. By offering customers excellent value for money in so many areas of their lives, we aim to make them happier.

These values do not come cheap. These values must be paid for. Our Virgin Mobile business in America still holds the record as the fastest company to generate revenues of over a billion dollars. That’s faster than Microsoft, Google and Amazon. We’ve created more business multimillionaires than any other private company in Europe — and we’re among the top twenty in the United States. Business requires astute decision-making and leadership. It requires discipline and innovation. It also needs attitude, a good sense of humour and, dare I say it, luck.

We turn entrepreneurial ideas into outstanding businesses. We receive hundreds of business ideas every month, often directly via our website. We employ a gatekeeper — a corporate development assistant — whose job it is to record, log and classify all ideas as they arrive. She then passes them on to our experts. They read through and research the best of them. A tiny number are passed to our investment professionals — whole teams of them,