Chapter 4
Seeing Through Others' Eyes: The Customer Perspective
How do you look to your customers? Scottish poet Robert Burns wrote: "O would some power the giftie gie us, to see oursels as others see us." For anyone in leadership, this should be essential-always try to look at what we're doing from the customer's perspective.
Perception is reality in the eyes of customers and employees. The ability to see one's actions through others' eyes takes practice and should be applied before making public statements or policy decisions. Branson is constantly amazed how many business people operate in blinkered cocoons instead of objectively examining their own products and services.
We're all surrounded by ready-made focus groups-family, friends, employees-who provide objective feedback without the expense of formal research. Some of the harshest and most valuable sounding boards can be found around the family dinner table.
Branson learned this lesson during the HIV/AIDS epidemic in the late eighties when Virgin decided to manufacture affordable condoms to help tackle the disease. Nobody considered the branding implications until he proudly announced "Virgin Condoms" at dinner. His wife Joan immediately exclaimed, "Condoms! Virgin Condoms? Oh come on, Richard, pleeeease tell me you're joking. Cos if you're not, you're soon going to be the butt-end of a hell of a lot of jokes."
She was absolutely right! They'd been so focused on the noble cause that they'd missed the obvious contradiction. They quickly rebranded as "MATES" with an inverted Virgin "V" as the M in the logo-a much more appropriate name.
Not everyone utilizes the pragmatic market experts in their lives. Netflix CEO Reed Hastings clearly didn't ask friends how they'd feel about "the same service for twice the price and double the complexity" before making a disastrous business decision in 2011. By splitting their DVD rental and streaming services into separate companies, they shocked customers who reacted with fury-nearly a million subscribers canceled within a month, and the stock plummeted from $300 to around $100.
While Netflix's blunder was significant, it pales compared to Coca-Cola's monumental mistake with "New Coke" in 1985. This became a textbook case of flawed strategy, placing too much faith in customer taste tests conducted in a vacuum. While blind tests showed acceptance of the sweeter formulation, no one asked, "How would you feel about this replacing the Coca-Cola you've loved all your life?"
Rather than sitting in a gilded cage trusting financials and surveys, effective leaders must regularly "kick the tires" themselves. Branson is probably Virgin's biggest constructive critic, always noticing small details that combine to create memorable customer experiences-like questioning why they serve hot towels to passengers boarding in boiling Las Vegas when cold ones would make more sense.
Having senior people who care about customer-focused details encourages everyone to see the business from the outside in. At Virgin Hotels, he encourages managers to spend unannounced nights in random rooms-just inspecting during the day doesn't reveal what guests experience overnight.
Chapter 5
Communication Clarity: The Power of Simplicity
Great leaders must communicate effectively when people need to hear from them. The KISS principle ("Keep it simple stupid") originated in the US Navy, recognizing that battle systems work better when kept simple, while complexity introduces problems. Unfortunately, many business leaders fail to embrace this principle.
Having grown up with dyslexia, simplicity in communications has always been a necessity for Branson. Bill Clinton exemplifies someone with "the gift of the gab"-delivering intelligent, concise messages. The best approach is to "say what you mean and mean what you say" in as few well-chosen words as possible.
Many business leaders mistakenly feel they must comment on everything being discussed, when often they'd appear smarter by saying nothing. Brevity requires practice and time-as Blaise Pascal noted, "I am sorry this letter is so long, I didn't have time to make it shorter." Twitter's 140-character limit has become the champion of word economy. Even reducing messages to a couple hundred characters makes them far more effective than if they were ten times longer.
Despite doing many speeches, Branson has never enjoyed public speaking. Glossophobia (fear of public speaking) is among the most common human fears, yet the higher one climbs in business, the more speaking is required. Gavin Maxwell gave him valuable advice: imagine you're in your dining room telling stories to friends rather than on stage before hundreds.
Branson's preferred approach now is avoiding formal speeches altogether, instead requesting Q&A formats. This makes him more relaxed and benefits the audience, who become participants rather than just listeners. With well-orchestrated Q&A sessions, he covers a wider range of topics than could fit in a prepared address, while still addressing key points through pre-planted questions when necessary.
One of the most powerful sentences a business leader can utter is "I'm not sure-what do you think?" Rather than appearing weak, this displays self-confidence and tells employees their opinions are valued. Frequently asking "what do you think?" or "are we missing anything?" yields positive rewards, keeping people engaged and attentive.
The simple words "please" and "thank you" are grossly underused, particularly by those in leadership positions, yet they demonstrate respect and recognition. While fair compensation matters, experts agree that appreciation often motivates employees more effectively than money. A handwritten thank-you note stands out remarkably in today's digital age.
Chapter 6
Beyond Mission Statements: Creating Authentic Purpose
Branson has never been a fan of corporate mission statements, which are often blah truisms rather than inspirational guides. Most statements have no real influence on employees and can become laughingstocks. Does anyone at XYZ Widget Company really need to be told their mission is "to make the world's best widgets while delivering excellent customer service"?
More importantly, a company must actually be committed and able to live up to whatever mission it claims. Putting out highfalutin statements that employees greet with "Yeah right!" wastes time better spent fixing underlying problems. Enron's mission of "Respect, Integrity, Communication and Excellence" while defrauding stakeholders demonstrates this disconnect perfectly.
Brevity is essential for effective mission statements. While Hemingway's six-word story "For sale, baby shoes, never used" demonstrates the power of concision, many organizations produce rambling statements that fail to inspire. One UK police chief discovered this when their outsourced 1,200-word mission statement won a "Golden Bull Award" for gobbledygook-notably missing any mention of "crime."
Most mission statements suffer from being utterly interchangeable between competitors. Bristol-Myers' statement about developing medicines to help patients overcome diseases could apply to virtually any pharmaceutical company. At the other extreme, Yahoo's flowery waffle about "powering and delighting communities" tries too hard yet says nothing concrete.
Virgin Active exemplifies how a mission statement should function-as a living, breathing commitment to customer service excellence. Rather than crafting clever words to lock away, Virgin Active created "The Guide," a working document that inspires employees to immerse themselves in the brand. It includes practical "Thou Shalt" directives (be genuine, give full attention, have fun) and "Thou Shalt Not" prohibitions (don't fob people off, act unnaturally, or be elitist).
Given the scarcity of good mission statements, perhaps it's time for companies to adopt manifestos instead. Virgin Mega's manifesto exemplifies this approach with its emotive, action-oriented language: "These days, too much is for sale... Convenience has no soul. It's time to take retail back." The manifesto positions Virgin Mega not as a shopping destination but as a place for "hunting and coveting" where "true fans wait in line" because "what you go through to get the things that rock is just as rewarding as what you get."
Chapter 7
Redefining Leadership for Modern Business
Leadership, according to sixth-century Chinese philosopher Lao Tzu, is "the ability to hide your panic from others." In Virgin's early days, Branson might have modified this to "hiding panic from your bank manager"-something he failed at when Coutts Bank pulled their funding after Virgin Atlantic's launch.
While Tony Blair claimed "the art of leadership is saying no," Branson earned the nickname "Dr Yes" for his eagerness to try new ideas. Modern leadership is evolving from power vested in one person to collective processes with shared authority, exemplified by groups like the Elders. True leadership isn't about titles or organizational charts-we're all leaders in our own orbits, whether in families, communities, or workplaces.
Branson was shocked when invited to an executive dining room at a London company with private chefs, numerous waiters, and a lengthy wine list. When management considers itself too precious to share dining space with employees, it's not somewhere he'd want to work. Breaking bread together has ancient symbolic value that healthy families maintain. At Virgin Atlantic's headquarters, they spent considerable time designing a central dining hall where all employees, regardless of rank, eat together daily.
While good managers supervise others and follow company guidelines, true leaders require vision, creativity and the ability to influence others through uncharted territory. Good leadership drives evolution and finds new avenues for business growth; poor leadership protects the status quo. Today, standing still means going backward quickly.
Kodak exemplifies catastrophic leadership failure. Despite inventing the first digital camera in 1975, they abandoned it to protect their profitable film business. While they buried their heads in the sand, companies like Sony captured the digital market. By 2011, Kodak's share price dropped 80%, leading to bankruptcy in 2012.
Branson made a similar mistake with Virgin Megastores, which began as their only business in 1971 and expanded globally. When digital technology and iTunes transformed music retail, they tried compensating with other products and belatedly launched Virgin Digital in 2005, but it was incompatible with iPod. He was guilty of ignoring warnings, costing them significantly.
Another leadership myth suggests entrepreneurs should run with their ideas when they become the nucleus of a new business. While Peter Drucker defines entrepreneurs as those who search for change and convert sources into resources, Branson believes entrepreneurs can add more value by not trying to manage-something he didn't realize early enough with Megastores. Though he's spent hands-on time with businesses like Virgin Atlantic, he consciously avoids day-to-day decision-making, allowing senior people ownership while maintaining an entrepreneurial eye that recognizes gaps and opportunities.
Chapter 8
Engineering Your Own Luck: Preparation Meets Opportunity
Luck is one of life's most misunderstood factors. Those considered fortunate are usually the ones taking the greatest risks-and occasionally failing spectacularly. Unlike the majority who view luck as random as lightning strikes, Branson is convinced anyone can improve their luck through effort.
One example of fortuitous timing came with Mike Oldfield's "Tubular Bells," Virgin Records' first album release. Despite European success, Branson couldn't convince Atlantic Records' Ahmet Ertegun that an instrumental album would sell in America. Then movie director William Friedkin happened to hear it playing in Ertegun's office and instantly wanted it for his film. That film was "The Exorcist," which became a massive hit and introduced Tubular Bells globally. You might call it luck, but Branson's persistent efforts ensured the album was playing at that critical moment.
Sometimes serendipity presents once-in-a-lifetime opportunities that require recognition and action. Branson's friend "Antonio" from Chile was standing outside a sold-out movie theater at Stanford when he struck up a conversation with another disappointed student. Over coffee, this student mentioned working on a search engine project and gave Antonio his research paper. Though the technical details were beyond him, Antonio recognized the market potential. When they met again, Antonio invested his $10,000 car fund for a 1% stake in what would become Google. His new acquaintance? Sergey Brin, whose partner was Larry Page.
When Virgin launched Virgin Blue in Australia in 2000, they anticipated competing with Qantas and Ansett Australia. After Ansett was partially grounded for maintenance issues over Christmas 2000, they briefly recovered and even attempted to buy out Virgin in April 2001. By September, however, Ansett ceased operations entirely, stranding thousands and laying off 16,000 staff. This suddenly made Virgin Australia's second-largest carrier and opened terminal space they'd been struggling to secure.
Smart leaders engineer their luck through risk-taking, just as Brett Godfrey did by positioning Virgin in Australia at precisely the right time. As Seneca said two thousand years ago, "Luck is what happens when preparation meets opportunity."
Chapter 9
Breaking the Mold: The Competitive Advantage of Being Different
Branson has an aversion to the average, to the "one size fits all" mentality that permeates so many businesses. This blinkered approach creates opportunities for entrepreneurs willing to challenge conventional wisdom. When Virgin entered aviation and rail transport, both industries desperately needed fresh approaches. As a newcomer, Branson asked seemingly naive questions that often revealed opportunities to improve.
As a newcomer to both the airline and rail industries, he constantly questioned how things worked, seeking opportunities for improvement. Sometimes his questions confirmed existing practices made sense; other times they revealed flawed assumptions. When launching Virgin Atlantic, he discovered they could provide electronic headsets instead of the standard rubber tube ones-and giving them away after each flight was actually cheaper than recycling the old ones.
Branson has always refused to rank anything as a perfect ten because there's always room for improvement. As his father would say, there are "horses for courses"-few products work equally well across all markets. Even global giants like McDonald's must adapt, as he discovered in India where they serve the "Chicken Maharaja Mac" or vegetarian "McAloo Tikki Mac" instead of beef burgers.
Apple exemplifies the atypical approach in everything from product design to retail experience. Their stores generate an astounding $6,050 per square foot-nearly double Tiffany's $3,017 and eighteen times the mall average of $341. This translates to $57.60 per visitor with $12 profit. The secret? Exceptional staffing. Apple stores swarm with helpful employees wearing distinctive blue or red polo shirts, representing diverse ages to match their customer demographics.
True customer loyalty can't be bought with frequent flier miles or discount coupons. It comes from engagement that transcends transactional relationships. When a young entrepreneur missed his Virgin America flight to an important investor pitch in San Francisco, their team got him on a flight to Los Angeles with an "technically impossible" connection. The pilots arrived early, ground staff rushed him to his connecting gate, and he made his pitch with minutes to spare. The 'typical' airline response would have been "Sorry, it's your problem," but Virgin's approach-"You've got a problem, let's see how we can fix it"-earns loyal customers for life and generates invaluable word-of-mouth.
Chapter 10
People Power: The Heart of Virgin's Success
Unlike Shakespeare's Richard III proclaiming "off with his head" or Donald Trump's gleeful "You're fired," Branson finds letting people go deeply saddening, seeing it more as the company's failure than the employee's. Conversely, saying "You're hired!" brings him great pleasure.
Whether starting up, relaunching, or expanding, hiring is the one area where leaders should remain personally involved. These are the people you'll delegate crucial decisions to, so they must be ones you completely trust. Despite running a massive organization, Branson has always insisted on participating in senior-level hiring decisions, sometimes flying candidates to Necker Island. Even Google's Larry Page, leading a $400 billion company hiring 4,000 people annually, remains the final arbiter for leadership positions.
Launching Virgin Atlantic with zero airline industry experience taught Branson the critical importance of delegation. They assembled aviation experts like Roy Gardner and David Tait (both from Laker Airways) to blend with Virgin business managers. This created an interesting chemistry experiment-mixing Virgin's laid-back "rules are made to be broken" attitude with the rigid disciplines of aviation. Despite these cultural differences, the team successfully launched a transatlantic airline in just five months, creating the exceptional service Branson had envisioned.
Although character is higher than intellect, uncovering a candidate's true nature during interviews can be challenging. Branson involves team members in interviews to observe interactions and looks for humor, friendliness and caring attitudes that indicate good teamwork. Breaking tension with joke-telling helps reveal personalities.
While a good CV matters, Branson has always valued capability over expertise. Look closely at people who've thrived across different industries-they're usually versatile with transferable skills and tackle problems creatively. The "expert" stuck in one groove tends to replicate past approaches, while smart, curious outsiders often deliver fresher solutions.
Branson compares Virgin's workplace to an open zoo-no cages, unlike traditional corporate environments where bigger cages signify higher rank. When interviewing candidates from rigid corporate backgrounds, they'll predictably find Virgin's free-ranging environment appealing. But beware: "You can take the person out of the cage, but can you take the cage out of the person?" Some executives, stripped of familiar structure, begin quietly building cages in their new workplace.
Google's "Project Oxygen" revealed three main reasons people quit: not feeling connected to the company mission, poor relationships with colleagues, and terrible bosses. Surprisingly, pay wasn't a top factor. Real engagement comes from strong leadership that makes employees feel valued, empowered and trusted. The payoff is substantial: Towers Watson found companies with highest engagement levels averaged 27% operating margins versus under 10% for disengaged companies.
Netflix revolutionized vacation policy by eliminating it entirely. Salaried staff can take off whenever they want, for as long as they want, without approval or tracking. The assumption is they'll only do so when their work is covered and their absence won't damage the business. Virgin has implemented this at their parent companies in the UK and US, with plans to expand it throughout their subsidiaries.
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