Richard Branson’s recent article in entrepreneur.com shows some fascinating insights into how this charismatic business giant chooses to manage his employees. Branson — a business magnate and founder and chairman of the Virgin Group — is known for his unconventional methods and his philosophy on employee management is no exception. His self-confessed independent style hails from his own desire to “play by his own rules,” and that is how he has always done it. Whatever his critics say, his methods have paid off with success after success in a myriad of industries.
Lesson Number One: Employee Freedom
We can learn three main lessons from Branson’s cues on employee management. The first is liberating employees from management constraints and allowing them the freedom to make their own decisions. Freedom breeds creativity and innovation, and for the Virgin Group, it has proven to be more adaptable than the usual top down hierarchical approach.
Branson uses Virgin mobile’s expansion into Chile and Poland as an example of this technique. In these countries, teams used the customers’ needs and requirements as the foundation for their market approach and company structure. Rather than coming in with a preset model of expansion, they adapted to suit the market under the direction of teams whose knowledge of the market was more familiar than that of an outsider.
At ClearFit, we also believe in empowering employees with freedom and accountability for their own choices. It starts with recruiting the right kind of employees — those who will have qualities that are suited to the organization, which will allow them to step up to the responsibilities and make the right choices. We are able to support business owners’ ability to predict the success of a potential candidate long before that applicant is hired. In this way, an employer can have the confidence and trust to give their employees freedom, while safe in the knowledge that their employees are capable.
Lesson Number Two: Looking beyond Short-Term Profit
Branson’s second key lesson is to push short-term profit down the priority list. He says, “We focus less on this metric than most companies do.” For many businesses short-term profit is the driving force; it’s the main goal into which they put all their effort. Not so for the Virgin Group. The Branson philosophy sets out to create long-term business, while upholding the Virgin Group’s values such as: raising brand awareness, maintaining and creating happy and loyal customers, and making a positive impact on the community.
Since short-term profits are not so scrutinized, Virgin employees are free to take positive risks without being judged on the profit margin. This approach is not for all companies, but it means that they can also take on projects which other brands wouldn’t be able to.
At ClearFit we have tailored our products to the needs of business owners, and those needs are our priority. The ClearFit story is one of innovation and reinvention, a constant process to ensure that our services continue to meet the needs of our customers. As co-founder Ben Baldwin recalls, “The technology doesn’t matter if the patient doesn’t desire the medicine.” By focusing on customer needs and managing finances appropriately, ClearFit has been able to grow considerably in the last few years, from three hundred customers in 2009 to over five thousand in 2012 — a growth trajectory that has been possible because of a strong focus on maintaining and creating happy customers.
Branson’s parting words of advice are, ”Don’t just play the game — change it for good.”
The Virgin Group has a strong culture of rewriting the rules of traditional business for better or for worse. If you are in an industry with many competitors, this concept might just be the boost your business needs. Thinking outside the box and differentiating yourself from the crowd will attract interest and help you win over new contracts, as long as you keep the customers’ needs at the core of your business strategy.
But too much rewriting of traditional business rules has not always favoured Richard Branson and it has certainly not been a smooth road for The Virgin Group, which has made some serious mistakes in the past. There was Virgin Cola, which was supposed to rival and surpass Coca Cola — as you may know, Virgin Cola failed miserably and it is nowhere to be seen nowadays. A long list of failed Virgin ventures followed Virgin Cola: Virgin Vie, Virgin Vodka, Virgin Vision, Virgin Wine, Virgin Brides, Virgin Jeans, Virgin Cars, and Virgin Cosmetics. So despite all his success, take note that Branson’s ambitions have unfortunately yielded many failures as well.
Lesson Number Three: Hiring Employees That Love What They Do
At ClearFit, we believe that for businesses to succeed they need employees who will support and develop the organization. We understand that small businesses cannot afford to hire the wrong person and with our methods we strive to fill positions with the right people.
Branson regards employee management as a key to the Virgin Groups success, “Our employees love what they do and throw themselves into the work, so they achieve much more than anyone would expect.” Organizations should ideally equip themselves with employees that love what they do — then the results will pay off. ClearFit’s patented job fit solution has proven to be five times more predictive than traditional hiring methods, and this is one of the primary reasons that’s the case. We want businesses to find the right people in the times when they need them most.
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