Business Stripped Bare (35 page)

When people think of 'Richard Branson', they tend to think first of all about Virgin's involvement in the music industry. It's a piece of our heritage we're extremely proud of. When I cast my mind back to what shaped me most as a businessman, however, I find myself remembering an even earlier phase of my career; and I recall my brief, fortunate and illuminating adventures in journalism.

What, after all, could be better for a young man searching for answers in life, than to go around interviewing people? I was never going to be a great journalist, but one skill I did have was being able to keep my mouth shut. I let the people I was interviewing do the talking. I was also quite unembarrassed when it came to asking what, in hindsight, seem naive and obvious questions. Both are skills I've carried into business, and they have served me incredibly well. The ability to listen, and the willingness to stick your neck out and ask the obvious question, are criminally underrated business essentials.

I was brought up in the mid-1960s and this was generally a caring and compassionate time, when a lot of young people became socially aware and began to understand how the world treated minorities, what their rights should be, and how a fairer deal might change things. From the other side of the Atlantic, I followed with fascination the struggles of black Americans against racism, discrimination and economic inequality.

In March 1968, I was proud to be marching to the US embassy in Grosvenor Square in London in protest at US involvement in the Vietnam War. I strode side by side with left-wing firebrand Tariq Ali and actress Vanessa Redgrave, and I remember the fear when the police on horseback charged us with truncheons and tear gas. I was also invigorated by the thought that young people were doing something direct and positive. And through the prism of
Student
magazine, I – a privileged English public schoolboy – heard for the first time about the horror of Africa. I learned a little about oppression, and disease, and famine.
Student
campaigned against the horrific Biafran War in Nigeria, and we used harrowing photographs by Don McCullin, the celebrated photojournalist whose
Sunday Times
images would go on to define the conflict in Vietnam and Cambodia. We helped bring to the public's attention the plight of millions of children dying of starvation who were caught up in the civil war.

The autumn issue of
Student
in 1968 was awash with anger: the black American ghettos were exploding with violence; rioting students were throwing cobblestones at the police on the streets of Paris; Russian tanks had crushed the Prague Spring in Czechoslovakia; Vietnam was withering under a rain of bombs. There was so much to cover. I remember we had Gyles Brandreth writing on America, and a report from Vietnam by a fresh-faced seventeen-year-old Julian Manyon – now a veteran ITN foreign correspondent – in which he interviewed a North Vietnamese doctor about the death of Vietcong soldiers through dysentery. But it was the interview I conducted with the American black militant writer James Baldwin which shocked me to the core. If you are harbouring any doubt in your mind about the value of naive questions, read this. Look what he made of my stumbling questionnaire. I would never have elicited such fire had I been less direct.

What kind of education did James Baldwin have?

'At school I was trained in Bible techniques. I received my education in the street.'

Were there good schools in America?

'How can there be? They are built by the white state, run by white powers and designed to keep the nigger in his place.'

Can the white man give you freedom or must the black man take it for himself?

'The white man can't even give it to himself. Your record has not been very encouraging. I DON'T EXPECT YOU TO GIVE ME ANYTHING. I am going to take what I need – not necessarily from you, this is your myth – but I intend to live my life. I am not interested in what white people do. White people are not that important. What one is fighting against is not white people, but the power standing between a person and his life. It is as simple as that. It is not a race war, it is a war between poverty and privilege, freedom and imprisonment.'

I was transfixed by what Baldwin was saying to me – his vitriolic yet restrained anger at what he saw as the inequality of life.

In
The Fire Next Time
, written in 1963, he had predicted that in ten years' time we would see the end of white supremacy. I asked him if he still believed this.

Baldwin replied: 'I didn't say it in quite that way. I said that this was a prophecy – and the prophet may well be right. I am telling you that Western societies are visibly in trouble and are visibly crumbling.'

'Under pressure from the black man?'

'Under the weight of their own lies.'

This was strong, urgent stuff for a white, teenage editor. It was an anger that I could not understand, because I had nothing to measure it against. I wanted to help change the world, but what did I know about the world?

Fred Dube, a black African, born in Johannesburg, a social worker married with two children, joined the African National Congress in 1955. From 1964 to 1967 he served four prison sentences for sabotage, in Ladysmith in Natal, Leeuwkop in Transvaal, on Robben Island and in Groenpunt in the Orange Free State. He left for England in July 1968, and became a bank clerk in London. He told
Student
that the poverty, homelessness and malnutrition in his homeland all stemmed from one problem: South Africa's vicious and unjust apartheid society. Some time later I heard about the black activist Steve Biko, and then I encountered the name of Nelson Mandela. His parents called him Nelson because it sounded 'white', and they thought he would get on better in a whites-only society. He was viewed as a dangerous extremist by some in Britain but I began to know the truth about this incredible man.

When I first got to know Madiba – as he is affectionately known in Africa – I was always in awe and slightly nervous meeting him. Then when he smiled, his warmth and impish humour simply radiated into your heart: 'Richard, it is a great honour to meet you.' I soon learned that he says that to everyone on first meeting them! Here is a man who has suffered so much because of his colour and what he believes in. He was a victim of apartheid injustice, handed a life sentence at forty-six. His prison number was 466/64, which stood for the 466th prisoner admitted to the dreadful Robben Island jail in 1964. His cell was six feet square, the walls two feet thick. When he lay down his head touched one end and his feet the other. His first months in jail were spent with fellow political prisoners crushing rocks into gravel using a four-pound hammer. It was achingly strenuous and constantly painful. I have seen his cell – it must have been hell on Earth.

He says in his autobiography,
Long Walk to Freedom
, that 'Robben Island was without question the hardest, most iron-fisted outpost of the South African penal system. It was a hardship station not only for the prisoners but for the prison staff. The warders, white and overwhelmingly Afrikaans-speaking, demanded a master–servant relationship. They ordered us to call them baas, which we refused to do. The racial divide on Robben Island was absolute: there were no black warders, and no white prisoners.'

Yet I have never witnessed one scintilla of anger or indignation from the man.

His spirit is best captured, I think, in the address he gave, not long after being elected president, at the unveiling of a statue of Steve Biko. 'While Steve Biko espoused, inspired and promoted black pride, he never made blackness a fetish . . . accepting one's blackness is a critical starting point: an important foundation for engaging in struggle. Today, it must be a foundation for reconstruction and development, for a common human effort to end war, poverty, ignorance and disease.'

Here are the characteristics of great leadership, contained in a handful of sentences. The concern for people is here; so too the easy intelligence Mandela brings to the judging of individual merits. There's authority in these words, but they're not hectoring or bombastic: they create for us a clear, simple vision of what has to be achieved.

The unveiling of Biko's statue, sculpted in bronze by Naomi Jacobson, took place on 12 September 1997. Peter Gabriel and I were on hand – the only white faces in a crowd of around 100,000. I urged Peter to sing the song that had done so much to keep Biko's name alive. That rendition of 'Biko', backed by Nelson Mandela and a crowd of 100,000, is something I will treasure to my grave. From the moment Mandela came up to shake my hand and thank me for my support, I wanted to do something meaningful for South Africa, to help it recover from its terrible wounds. I wasn't a songwriter – and I didn't have to wait long for the call.

There is one characteristic of Mandela's leadership that isn't apparent from his speech, but it is typical of most of the great leaders I've met: they are all inveterate salesmen! Mandela is an entrepreneur through and through. He absolutely will not stop. Whenever we were together, Madiba seldom missed an opportunity to pull a few strings for his country. He was in London one time, having lunch with Joan, Holly, Sam and me and a few close friends, and afterwards I wrote in my notebook. '
No lunch or dinner ever goes by without him asking a favour for someone in need: He came to my house with his new wife, Graca Machel, and his daughter, "That was a delightful lunch, Richard, Now last week I saw Bill Gates and he gave £50 million in dollars." Gulp!
'

I am proud to say that Nelson Mandela has become a close friend. As we pass his ninetieth birthday, he has remained an inspiration to me as a human being and I have many cherished memories of time spent in his company. I think it's worth explaining how the former South African president's astonishing acumen for business, coupled with his sense of duty, helped his country. For Madiba knew that the 'long walk to freedom' for his black brothers and sisters meant embracing a positive economic future. While he recognised it would take many years – even a generation – to reverse the inequalities of racial discrimination, he had few qualms about seeking my involvement – and that of other business leaders – if he believed it would bring jobs and wealth to South Africa.

One occasion was in September 2001, just days after the World Trade Center atrocities in New York. Tourism and business travel had dried up overnight, the whole airline industry was in meltdown, and I was sitting in the bath thinking how the Virgin Group could deal with the immense disruption to Virgin Atlantic when he phoned. Madiba's voice was like an anaesthetic balm: calm and reassuring.

'Richard, you said that you wanted to help South Africa,' he said.

'Yes, Madiba. You know I'm willing to help,' I replied.

'Well, we have a problem . . .'

One of South Africa's biggest health clubs, the Health and Racquet chain, had collapsed. It meant the loss of 5,000 jobs. 'Do you think you could do something with it? Do you think you can save the people?'

I didn't really know if this was a viable business, but I went with my gut instinct, and my desire to support a man I revered. Also, I trusted Madiba: in another life he would have made an astute corporate financier!

I rang Frank Reed, the Virgin Active chief executive, and Matthew Bucknall, his finance director, who ran just three large clubs in the UK. Would they be prepared to take on an ailing South African business nearly eight times their size? There was a palpable gulp from Matthew – but he then said they'd jump at the chance. Brilliant! Within hours we were able to put a rescue package together – rebranding the whole business Virgin Active. I called Madiba back to say we were definitely on board.

But money was tight for us and we needed to raise funding, so we approached the UK private equity company Bridgepoint Capital who agreed to take a 55 per cent stake in a deal worth £110 million, leaving Virgin with 36 per cent, and Frank, Matthew and the team around 8 per cent. When Gordon McCallum heard about the speed of the transaction he said: 'At this pace, we should rename the company Virgin Hyperactive.'

Our strategy involved keeping on as many people as we could, and retaining Health and Racquet's 900,000 customers, although we had to change the arrangements for many health-club users. They had been given free lifetime membership, in return for signing up with a big upfront fee – fine until the new memberships dried up! We judged, correctly as it turned out, that nearly all of the members would agree to start paying a monthly subscription provided we gave them a first-class health-club experience and fixed the dilapidated gyms that had been starved of investment.

The rescue gave us a fantastic footprint in South Africa from which we have continued to expand. By October 2005, Virgin Active was in a better financial position – having doubled in size and expanded into Italy and Spain – and we were able to buy back Bridgepoint Capital's 55 per cent share for £134.5 million.

*

When Nelson Mandela was president of South Africa he knew his diplomatic position. South Africa's re-emergence as a nation was reliant on China's increasing strength and its investment as an economic superpower. He didn't want to offend China. And he never ever did.

Once free from the burden of presidency, of course, Madiba was his own man again.

In November 2004, I was in Johannesburg at the CIDA City Campus, the first free campus for black students from townships and rural areas who cannot afford education. I was with Kelly Holmes, the double gold-medal Olympic runner, the singer Estelle, and the team from Virgin Unite for the launch of an initiative called Women on the Move, which focuses on empowering young women across South Africa. After the ceremony I stayed on to listen to the Dalai Lama, the exiled Tibetan leader, who had been invited to speak at CIDA. It was his third time in South Africa and he spoke with verve, compassion and gentle humour. He smiled as he welcomed people from all religions, the non-religious, and black, white and brown alike. I was enthralled listening to this deeply spiritual man appealing for peace and justice.