Clearly, this means Branson's got to pick people who can handle the responsibility. "His ability to hire the right people to take him to the next stage of development has been nothing short of extraordinary," says Peter Hilliar, leisure stock analyst with Barclays de Zoete Wedd, in London.
He relies heavily on a core group of senior executives -- his "generals" -- whom he considers close friends. Some have been with the company almost from the start. Simon Draper, a group director and chairman of the music division, is a distant relative who joined Virgin in 1971 after emigrating from South Africa. Ken Berry, managing director of the music division, joined two years later. "We can trust each other," Branson says. "They know I won't let them down, and vice versa. It's almost like a marriage." In fact, Virgin Vision's Robert Devereux, who joined the company in 1981, is married to one of Branson's sisters.
Branson further binds the ties with shares in the company or its units. When the company recently hired two senior American record executives to run its newly founded Virgin Records America, in Beverly Hills, Calif., each was given a 10% stake in that unit. Simon Draper, who once held 20% of Virgin Records, swapped that for a 15% stake of the Virgin Group. "Now he's one of the 50 richest people in Britain," says Branson. "Quite a few people should become millionaires working within the Virgin structure."
Branson keeps in touch with the doings of the company largely through informal meetings and phone calls -- none of his generals can recall getting a formal memo. Before coming to the barge this morning, Branson says, he spent two hours on the phone with Devereux. He'd had dinner the night before with Draper. He planned to have a session with Trevor Abbott, the Virgin Group's finance director, the next day. "It's an almost unending stream of calls," says Abbott. "He's very impulsive. If he thinks of something, he wants to do it right then."
For a few years Branson worked in the music division's main office alongside Simon Draper, but as the top man in the place, Branson drew all the daily flak. That's when he returned to the barge for good -- "and found things worked fine without me."
Not so. Things improved.
Branson's early involvement made work exciting, says Draper, "but it also made it too haphazard. What he fed off was the day-to-day instant buzz. Once he let go of the company a little bit, it found a more even keel, and he could take a longer-term view. It worked better. And I think he learned from that." He cites the example of Virgin Atlantic Airways: "Once he started the airline, he didn't interfere."
Branson, who'd always admired Sir Freddie Laker, launched Virgin Atlantic to provide discount flights between Newark and London's Gatwick airports. (It now has flights to Miami as well, and is studying expansion to Boston, Los Angeles, and New York City.)
The airline bears Branson's stamp. First, he protected the downside. He worked out a deal with Boeing under which Virgin, should the airline fail, could sell back its first 747 within three years -- at a price set out in the initial agreement. That protected the group from major losses.
Second, Branson shunned many of the usual approaches to airline operation and came up with his own innovations. On its daytime flights, for example, the airline sometimes barters seats for entertainment -- a cellist may perform one day, a mime the next, mimes being just about perfect because they don't make a lot of noise. And the airline offers only two classes -- economy and business -- the most notable perk of the latter class being limousine rides to and from the airports.
Finally, once the line was airborne, Branson backed off. He contends that his role as chairman is to get the company into new ventures and take full responsibility for all associated risks, while leaving his established operations in the hands of experienced managers. Branson, in a British mangement journal, wrote: "Don't depend on others to do the diversification and to take the risk. But do depend on others to do the job they know."
Branson immersed himself in the airline for nearly three months, from late March until the first flight took off in mid-June. "Richard knew nothing about airlines, the same way he knew nothing about records," says David Tait. "He's sometimes like a little child. He's always asking why. We'd say, 'Well, Richard, we've got to do such and such in this particular way.' He'd say, 'Why?" Now, Branson's the "invisible man," Tait says. "This week he might spend an hour thinking about the airline, next week he might spend two days on it, then you might not seek him again for three weeks."
Branson hopes to succeed with his airline, where Freddie Laker failed, by keeping the airline small. Currently it has two 747s flying the transatlantic routes and two old propeller-powered Viscounts for a secondary route to Maastricht, Holland. Laker's airline got too big, he contends. Expansion, Branson says, "is extremely dangerous in the airline business," especially when the airline is your only business.
Which for him is decidedly not the case.
Branson counts about 100 companies in his empire, all of them small -- and kept that way deliberately. "When a company gets to a certain size, instead of letting it grow bigger and bigger and putting it into bigger and bigger offices, I will take, say, the assistant marketing manager, the assistant managing director, the assistant sales manager, and I'll say, 'Right -- you're now the marketing manager, the managing director, the sales manager of a new company."
