The Virgin Way: Everything I Know About Leadership (24 page)

Tearing down the silo walls has a multitude of upsides. Not only do the different co-workers learn more about the needs and priorities of other divisions and create relationships there, but it also builds buy-in to innovative ideas and pride of ownership when the final product goes live. When a company embraces the benefits of collaboration, the old cynical silo-dweller’s classic moan of ‘I wish they’d asked for our opinion on this’ will be replaced with, ‘We developed that together and we can all be proud of it.’ This is truly a win-win-win for the company, the staff and – lest we forget – for the customer as well.

The fun part of a post-silo renaissance is learning how to have a good time together. As I discussed in an earlier chapter, I am still a firm believer in the power of the party. This is not a political statement – I am talking about a good old-fashioned let-your-hair-down-and-have-a-good-time-with-your-colleagues company celebration, and we don’t have to wait for Christmas to do it. Getting the troops to have some fun together is the surest way to make sure the silo walls don’t get rebuilt. If there are opportunities for company sports teams then that’s another great area to explore – and twist your controller’s arm to spring some cash to supply the company logoed football shirts or softball jerseys.

PAYING IT BACK PAYS OFF

Another great way to reunite your people is to encourage them to team up and get involved in community or other charitable events. We have seen countless examples of our people doing good together whether it’s running as a team (raising money for their favourite charities) in the London or New York Marathons or black-bagging it and clearing up the fields around a local children’s playground. Doing good things for our communities is an integral part of working at any Virgin company and we know that it’s incredibly important to our staff.

At Virgin Media UK, for example, each employee is given a day off every year to give back to their local communities. The tricky bit about these kind of things is figuring out the best way to assist your people in optimising their precious time and in ways that don’t require a financial commitment – an important factor in these tough times. To this end Media came up with five ingenious themes for five different days; three of them – ‘Give Time’, ‘Give Stuff’, ‘Give Life’ – are all ways to use time and existing possessions to make a difference; while ‘Give a Shout’ and ‘Give a Pat on the Back’ are ways to recognise what people are already doing and to encourage them to keep up the good work.

‘Give Time’ is about volunteering and, to plan the most productive use of their day off, we encouraged people to spend ten minutes looking at what they could volunteer for and telling their manager about it. ‘Give Stuff’ is based on the old saying that ‘One man’s junk is another man’s treasure’ and we ask people to do a quick raid of their old clothes, linens, furniture – anything they no longer use – and bring it all in for central collection. ‘Give Life’ encourages people to go and sign up for blood donations, the organ donor register and (in the UK) the Anthony Nolan stem cell and bone marrow register. Virgin Media also introduced a policy that gives anyone called up for stem cell or bone marrow donations one week’s paid leave to recuperate. The internal (tongue in cheek named) ‘Give a Shout’ programme allows people to recognise the efforts of their peers with a message on their personal homepage – also entering them into a draw to win one of many £50 vouchers each month. ‘Give a Pat on the Back’ also allows colleagues to recognise each other (even bosses!) for their outstanding contributions to the programme and, as with everything else, serves to build the team spirit in a fun, rewarding and (by way of the funds raised, pints of blood donated etc.) quantifiable way – the Virgin way.

The expression ‘
The sum of the parts is greater than the whole
’ encapsulates the critical difference in the upside that accrues from truly collaborating with each other versus simply working with one another.

TEEMING TEAMS

To use the analogy of a marathon, running one as part of a team is a much more exhilarating and rewarding experience than slogging around on your own. The task at hand is essentially the same but having teammates to urge you along and set the pace while enjoying every minute of it together makes for an altogether more uplifting experience and almost certainly improves your time. When I ran the London Marathon in 2010 – in a highly undistinguished tad over five hours – I had my kids to drag me along, which made all the difference in the world.

In the workplace, exactly the same team dynamics apply even if, like running 26.2 miles, the task at hand may still be a rigorous one. Working as a truly collaborative member of a group of like-minded colleagues means everyone – no matter what their job title – has to be prepared to check their ego at the door and be willing to freely share their knowledge and expertise. Above all else, every team member has to trust the people as well as the process – something that has to be carefully choreographed and conducted by a strong leader.

As part of the process, assigning team members with clearly defined roles and objectives would seem to be a natural thing to do, although one interesting idiosyncrasy uncovered by Harvard Business Review research into the subject showed that teams actually work better when group members are clear on their own responsibilities but uncertain on how they can achieve the team’s goals. They found that rather than too much spoon-feeding, a healthy degree of uncertainty forces participants to think more creatively about how to accomplish the group’s objectives. On the optimum size of teams, the same research concluded that while groups by necessity frequently must run into much larger numbers, the level of effective collaboration starts to tail off quite markedly when the number of team members exceeds twenty. Just as ‘small is beautiful’ has always been the Virgin way in terms of company scale, so too we tend to favour keeping the size of project teams to a minimum whenever possible.

Mike Rutherford, who with my good friend Peter Gabriel was a founding member of Genesis, one of my all-time favourite bands (on the Virgin label, of course), very succinctly summed up the power of collaboration when he said, ‘
Being in a band is always a compromise. But provided the balance is good, what you lose in compromise, you gain by collaboration
.’ And it goes way beyond the old notion that ‘a problem shared is a problem halved’. I prefer to see it from the perspective that a challenge not shared will often equate to a missed opportunity. Everyone knows there’s nothing quite like the early days of a start-up when everyone is hyped up and energetically pitching in with their ideas and visions of the future. It falls to management at every level in the pyramid to foster an on-going, openly collaborative culture that sustains and facilitates that same ‘early-stage’ kind of energy and freedom of expression. This means as few walls as possible – real and imaginary. It also calls for leaders that are out there getting their hands dirty every day. Steve Jobs put it perfectly when he said to his biographer Walter Isaacson, ‘
Creativity comes from spontaneous meetings, from random discussions. You run into someone, you ask what they’re doing, you say “Wow” and soon you’re cooking up all sorts of ideas.’

MEET ME IN THE PIAZZA

Collaboration should have been Steve Jobs’ middle name as he was forever going to amazing ends to foster it – and not just at Apple. When he created Pixar, home to
Toy Story
,
Monsters Inc.
and many other animated classics, he went to great lengths to make unplanned collaboration part of the company’s foundations – literally! At Jobs’ behest the company’s Emeryville, California headquarters campus was designed around a large open-space atrium – a kind of latter-day version of the great Roman piazzas, which were and still are the centre of social activity in most Italian cities. For me, Venice’s wonderful Piazza San Marco is without equal. According to his authorised biography, Jobs even wanted the only toilet facilities on campus to be around the atrium but modern building codes squashed that idea! Steve explained the concept behind the Pixar piazza saying, ‘
If a building doesn’t encourage collaboration you’ll lose a lot of innovation and the magic that’s sparked by serendipity. So we designed the building to make people get out of their offices and mingle in the central atrium with people they might not otherwise
see.’

Now I’m not necessarily suggesting that withholding toilet facilities should be used as leverage for driving collaboration but there is no question that any combination of silos, walls and hierarchies makes for serious literal and figurative obstacles to working together. Conversely, their absence greatly facilitates the ability of leaders to work arm-in-arm with their teams and vice versa. The next generation of senior leaders will come from the ranks of the so-called ‘millennial generation’ (aka ‘Generation Y’) – those born between 1980 and the early 2000s. As anyone who has parented a teenager in recent years will attest, this is a generation that likes to do things their own way. They are less inclined to take orders and more into problem solving through collaborative interaction – live and online – with their peer groups. So get with the movement – don’t try to fence them in and control them with the old, broken, ‘divide and conquer’ model. Instead we should all work to foster physically and emotionally unfettered corporate cultures and working environments that supports this natural proclivity for collaborative progress – aka entrepreneurialism.

So, if like Apple, Google and others you are one of the more enlightened leaders that have already gone into ‘piazza mode’, take a step back and enjoy the amazing energy that’s being generated there. If, however, you are still living in a world of silos and little boxes, then let me paraphrase President Ronald Reagan’s historic Brandenburg Gate speech in 1987 and say it’s time to ‘tear down these walls’ and think outside the silo. You’ll never look back.

Putting the pro in procrastination

In manufacturing circles, ‘Just in Time’ (JIT) inventory control has become an accepted standard with most major companies. This is the supply chain logistics model that eliminates a huge percentage of the capital costs and administrative headaches associated with the traditional approach of stockpiling giant warehouses full of parts to feed into the future production process. In extremely over-simplified terms, the strategy is to let the car headlight maker or whatever bear the cost of inventorying their product and deliver it to the automaker ‘just in time’ for it to be installed in the vehicle and driven off the assembly line to be shipped off to a dealership.

When I first learned about JIT I remember thinking, ‘Wow, wouldn’t it be great if the process of executive decision-making could somehow be as well synchronised with the needs of a business as the supply chain.’ In other words, neither jumping into something with a knee-jerk decision way before it needs to be made nor procrastinating for so long that the opportunity may have evaporated by the time the nod comes down from on high. Certainly it makes for an appealing dream even if the human factor makes it a lot tougher to put into practice given decision-making’s dependence on the personality traits of the would-be decision-maker. In my experience there are essentially three different types of personality that show through when confronted with the need to make a business decision.

‘SCREW IT – DO I REALLY HAVE TO DECIDE?’

First and possibly foremost there is the serial procrastinator. I am sure everyone knows several members of this frustrating human subspecies. This is the one with a perennial approach of ‘Why make any decision today when I can put it off until tomorrow?’ – and as we all know ‘tomorrow’ never comes! I am not talking here about someone who takes as much time as possible to conduct due diligence on a project, I am referring to those individuals that seem mentally and physically incapable of ever making an on-the-spot decision no matter how obvious or straightforward the matter at hand may be.

So why exactly do people behave like that? One reason is almost certainly the fear that if they are pushed into making a quick decision, there is always a chance that it could turn out to be the wrong one. So it is much safer to delay as long as possible and maybe in the process someone else will step up and put their seal of approval on the initiative. That way if it goes wrong the procrastinator can always say, ‘Hey, that wasn’t my idea. In fact I always thought it was a very risky play.’ Alternatively if the thing turns out to be a raging success, having never gone on record as saying it wouldn’t work, the procrastinator will usually be the first one to jump on the bandwagon and grab their share of the glory with phrases like, ‘I always said it was a great idea.’ Sound familiar?

But it’s not just the big decisions that professional procrastinators struggle with, it’s often all the little day-to-day ones too. For a business to run smoothly the process can’t be held hostage to one person’s unwillingness to sign off on a lot of relatively mundane items that, when taken collectively, can suffocate progress.

‘SCREW IT – WE’LL DO IT – TODAY’

The second personality type is the one into which, by reputation at least, I am most likely to fall. As lots of Virgin colleagues past and present would likely tell you, my notorious ‘Screw it, Let’s Do It’ approach to decision-making can have its pros and cons. As the antithesis of the procrastinator, I have over the years made snap decisions to jump into some pretty big businesses. For instance, we got into commercial aviation with Virgin Atlantic and Virgin Blue very much on the basis of my gut feeling rather than on any huge files of carefully researched market data and financial projections: on these two I played the odds and won. On other occasions, such as our foray into fizzy drinks with Virgin Cola and a few other less high-profile ones like Virgin Bride, my instincts haven’t served us quite as well and we didn’t always emerge a winner.

Of course, a company’s size and ownership structure has a lot of influence on the ease and spontaneity of expedient executive decision-making. Making quick, instinct-based judgement calls of any importance is a heck of a lot easier when you own the company outright and it’s still sufficiently small and nimble enough to facilitate sudden changes in direction. Or as someone once put it, ‘It’s a lot easier to bet the farm when you own the farm.’ The minute you go public or get too big, it becomes much harder to take the ‘Screw it’ approach. That’s not to say that I don’t still try my hand at it on a fairly regular basis, but without the impetuousness of youth, aka the wisdom that comes with age as well as from learning by your mistakes, I like to think that I now have at least a couple of toes – not yet a whole foot – in the third category of decision-makers. And that would be . . .

‘SCREW IT – LET’S THINK SOME MORE ABOUT IT’

The third and probably smartest all-round approach is what I like to call ‘the art of orchestrated procrastination’. This is an acquired discipline whereby the first thing to be addressed as part of the decision-making function is timing. Is it a ‘carpe diem’ situation or not? If you don’t seize the day might the window of opportunity close or might it be filled by a start-up or existing competitor? If, however, you know that you have the luxury of some time to play with, then make it work for you and use it to understand the deal’s full potential – or not – as with a deal we looked at a few years ago with Goldman Sachs.

Some of our Virgin Money people wanted to jump on the deal but, never having previously heard of the commodity in which they wanted us to invest a sizable sum of money, I urged that we drag our feet for a while. Sometimes ignorance can be bliss. The more we looked at the deal the more questions arose, so in the end we decided we’d say ‘thanks but no thanks’ to the Goldman people who by this stage were becoming quite agitated about our foot dragging. Not long thereafter we felt very glad that we’d passed on the deal. At the time no one outside of financial circles had ever heard of the term ‘subprime mortgages’ but that all changed with a vengeance in 2007 when everything fell apart. Suddenly ‘subprime mortgages’ were on the tip of everyone’s tongue as one of the alleged primary causes of the disastrous real estate lending crash. As things turned out, Goldman Sachs was left wishing they too had never heard of subprime mortgages. In 2010 the US Securities and Exchange Commission (SEC) fined them $550 million (the second largest penalty ever paid by a Wall Street firm) for ‘having misled investors in a subprime mortgage product just as the US housing market was starting to collapse.’ Goldman also acknowledged that its marketing materials for their subprime product contained incomplete information. Guess who was one of those misled investors that had been looking at those very materials? On this occasion our orchestrated procrastination had saved us a lot of money – and probably a chunk of our good reputation as well!

THE ART OF THE DECISION

‘To do or not to do, that is the decision’ – and making smart informed decisions is why leaders get paid the big bucks. There is really no science to getting it right every time which is why (unfortunately) decision-making is not a process that can be programmed to come in ‘just in time’ across the board. Making a good informed decision is not that different to sitting on a jury – all reasonable doubt has to be removed before you can pass a verdict one way or the other. Thankfully, though, corporate decisions are seldom a matter of life or death!

Here are a few general rules that I have found help me to get to the point of taking the plunge (or not) within the appropriate time frames:

• Like me you may be someone who’s big on first impressions when you meet people but you can’t let the same thought process influence your decision-making. If on first hearing an idea strikes you as a really good one, you may well be correct, but you mustn’t allow that first reaction to influence your ability to objectively weigh the cons as well as all the pros when they are presented.

• Just because no significant cons are presented it doesn’t mean they don’t exist, so get someone on to digging them up and evaluating them while you still have the time – discovering them after you’ve launched the deal doesn’t do you any favours. Insisting that this kind of archaeology is conducted becomes doubly important if and when everyone is unanimously in favour of going ahead with the project. Nothing is perfect, so work hard at uncovering whatever hidden warts the thing might have and by removing them you’ll only make it better still.

• Avoid making decisions in isolation. Every decision has some degree of impact on your ability to adopt other future opportunities in what the experts call ‘the decision stream’. This one may be a ‘too good to miss’ opportunity but how will it affect other projects or priorities and, if now is not the best time to do it, what risks if any are there in putting the thing on hold for an agreed period of time? If you cannot manage this project in addition to another that’s waiting in the wings, which one gets the nod and why?

• Do everything you can to protect the downside. All wise investors go to great lengths to do this with their stock portfolios and when setting up a new business you should try to employ the same strategies. For example, when we started Virgin Atlantic, the only way I got my business partners in Virgin Records to begrudgingly accept the risks involved was by getting Boeing to agree to take back our one 747 after a year if things weren’t working out as we hoped. To this day, with giant, capital-intensive ventures like Virgin Galactic and our newly announced Virgin Cruises, we always spend a lot of time in finding inventive ways to mitigate the downside.

If you have the time to use the ‘orchestrated procrastination’ approach then do so. Without getting into the ‘paralysis by analysis’ mode, doing more rather than less homework on a project is seldom a bad thing. While looking at it more deeply you may find better alternatives or the marketplace may change – think of our Goldman Sachs example where the whole world changed!

‘SORRY, BUT THIS IS THE WAY I WANT TO DO IT’

I think it was Plato who said, ‘
A good decision is based on knowledge and not on numbers
.’ Try telling that to your CFO if you dare! If you are confident in your depth of knowledge on a given concept, however, there will most likely come a time (or times) in every major decision-maker’s career when you will pull rank and say, ‘Sorry, I don’t care what the numbers say, but we’re going to do it my way.’ Think Virgin Atlantic! You will have gone through all the right steps and every litmus test will have come back positively against doing the thing, but your intuition will still be blaring at you not to be confused by the facts and just go with your instincts. Call it ‘executive privilege’ or just plain pigheadedness (if it fails it will certainly be called ‘utter stupidity’) but it will happen some day and one way or the other your entire legacy may be hanging on the outcome. What fun!

TRAIN SET TROUBLES

In the summer of 2012 I had just such a situation come out of nowhere when the British government shocked us with the news that Virgin Trains had lost out to a rival bidder, FirstGroup, in our effort to retain the operating rights to the £7 billion West Coast rail franchise.

We had run the franchise for fifteen years and in that time had grown our annual passenger numbers from thirteen million to thirty million, introduced new high-speed tilting trains and been voted the best-loved rail company several times. We had been quietly confident that our excellent bid and track record would carry the day. When we first got the shocking news, I was both stunned and baffled. I did a lot of listening and reading between the lines (no pun intended) as our lawyers and advisors outlined our position, which frankly didn’t seem very positive.

The lawyers told us there was no more than a ten per cent chance of winning an appeal, but listening to my own instincts, which have served me pretty well over the decades, I knew we had to fight the decision. It may have looked like sour grapes to many, but as much as I despise being on the losing end of anything, I always know when I’ve been beaten fairly and squarely by a superior opponent (except perhaps on the tennis court) and this decision qualified on neither count.

With nothing really concrete to back up this feeling, I stayed quiet for quite a while and did a lot more listening than talking while the people whose job it is to know about such things discussed our options.  Everyone had a slightly different view on just how our very well formulated and extremely competitive bid could have lost out to FirstGroup but if even I could see that the bid they’d presented quite literally didn’t add up, then there was clearly something terribly wrong with the government’s decision.

It seemed to our team that the civil servants in charge of the process had either got their maths terribly wrong or simply hadn’t done enough of it. They had clearly just looked at the highest bid without enough due diligence into FirstGroup’s ability to deliver it. After fifteen years’ experience running the route, we felt we knew better than anyone what was realistically achievable in terms of passenger numbers, fare levels and service expectations. We also believed the measure of our success was not just by the numbers but also by the quality of the customer service we were offering our passengers every day. This was borne out by the 180,000 signatures that were collected within a couple of weeks of FirstGroup’s selection hitting the headlines. The petition was organised by our loyal passengers and sent to the government demanding that they reverse the FirstGroup decision and leave the service in our hands.

We tried to explain our concerns to the government but to no avail – all we got back was a wall of silence.  But the clock was running and it was fast getting to the time for us to – as they say in the US – ‘put up or shut up’. For the second time in my career I was going to take Freddie Laker’s wise counsel and ‘sue the bastards’.  Last time we’d taken on British Airways and won, but this time it would be the British government!