The Virgin Way: Everything I Know About Leadership (26 page)

THERE IS A PLAN B

The old legacy business model – let’s call it Plan A – that got the planet into today’s perilous state, is clearly broken and needs to be rethought at every level. Plan A’s playbook sees business leaders being forced to race from quarterly report to quarterly report. As a result almost all their efforts are focused on coming up with products and services that will profitably appeal to the masses and keep the investors happy. Elected officials, meanwhile, always seem to have one eye trained on the next election cycle and yet their campaign promises and their post-election actions often have little or no long-term relationship.

Up against these established Plan A patterns, it is surprising we are making any progress at all. But attitudes are changing and a new generation of social entrepreneurs and leaders are using strategies from the commercial world and employing technology to tackle all nature of tough social and environmental issues, even areas that used to be the exclusive domain of government agencies and charitable organisations. In an effort to help social entrepreneurs to tackle these challenges head-on and find new solutions, we recently were one of the principal movers in setting up a new not-for-profit initiative called ‘The B Team’.

The B Team is a group of global business leaders in search of a ‘Plan B’ for business that balances the pursuit of enterprise with the needs of employees, societies and the environment. Our membership includes an amazing cross-section of global leaders such as Ratan Tata, chairman emeritus of the Tata Group, Arianna Huffington, chairman, president and editor in chief of the Huffington Post Media Group, Nobel Laureate Muhammad Yunus, Paul Polman, CEO of Unilever, Blake Mycoskie, founder and ‘Chief Shoe Giver’ at TOMS, Kathy Calvin, president and CEO of the UN Foundation and many, many more. At the risk of making this sound like an Oscar acceptance speech where I don’t have time to list all the people involved, let me just show you our very short and precise mission statement:

‘
Our mission is to deliver a
“
Plan B
”
that puts people and planet alongside profit. Plan A – where companies have been driven by the profit motive alone – is no longer acceptable.
’

Plan B is off to a good start, with plenty of great ideas and a growing community of like-minded colleagues, but we have a long road ahead us. The encouraging news is that so many of the young entrepreneurs we meet are already very much attuned to the B Team’s call for a new way of doing business. Social, value-driven and purpose-driven enterprises are emerging in greater numbers than ever before, offering an amazing array of market-based solutions to some of the world’s toughest challenges – from clean energy access to water scarcity and microfinance.

At a recent B Team meeting in New York, I joined Arianna Huffington, Blake Mycoskie and others to bring a group of founders and CEOs together who are focusing on ‘People Innovation’ as the core of their businesses. It was inspiring to be part of a group sharing innovative approaches to creating businesses that people love to be a part of. Some of the interesting ideas we heard about were the Netflix initiative of unlimited vacation days, meditation classes to combat stress, sleeping pods for afternoon naps and truly flexible working hours and locations. All of these innovations could and should be replicated by businesses all over the world and there’s good reason to do so – it’s good for business.

Today’s twenty-four-hour work culture means it’s more important than ever before to look after our people. Arianna Huffington has made ‘wellness’ integral to working life at the Huffington Post where she wants her team not just to succeed but also to thrive – so she’s introduced healthy snacks, mindfulness training and, with the introduction of the Virgin Pulse Wellness Programme, Huffington Post employees are now fitter and more productive than ever before.

Of course, work is not just about productivity and the bottom line – it’s about making a positive difference in our world. So it’s important that we enable our people to experience their impact. TOMS sends its employees on ‘shoe-giving trips’ and Bridgeway Capital Management allows every one of its people to set up their own foundations while giving away a staggering fifty per cent of their profits – these are companies that are really going to make a difference in the world!

More businesses should be following the lead of all these fantastic companies and the B Team is working hard to encourage a better way of doing business for the well-being of people and the planet and changing work for good is an integral part of this.

OPENING CELLULAR DOORS

No matter what the structure of the company – whether it is for-profit, non-profit or some creative melding of the two – entrepreneurial solutions are now offering engagement, jobs and, just as importantly, they are kindling hope in areas where there used to be none. A great example of social entrepreneurship at work is the story of Zimbabwean Strive Masiyiwa – with a name like ‘Strive’ he was clearly destined to do great things! Strive is the founder and chairman of Econet Wireless Group. He first came to international prominence when he fought a landmark legal battle in his native Zimbabwe for the dissolution of the state’s monopoly in telecommunications. After an arduous five-year battle, he won the day and this paved the way for opening the African telecommunications sector to private capital and a lot more. In the newly deregulated environment Econet was free to do things like distributing their patented ‘Home Power Station’, a solar charging station that supplies power for cell-phones, lights and other devices, transforming the lives of people living in rural African areas where the supply of electricity is either non existent or erratic at best.

By changing its business model to driving change for people and the planet, Econet also created all kinds of lucrative new revenue streams. This shift has opened up countless new avenues for the company, which is now using its charging stations to power everything from single light bulbs to refrigerators that can safely store vaccines for an entire community.

Business and government must encourage established entrepreneurs and young talent to focus on problem areas like health, education, climate change and social care. How can we speed up this process and make even more of an impact? There seem to be three key obstacles facing the next generation of business leaders who want to get social enterprises off the ground.

FUNDING – ‘SHOW ME THE MONEY’

In 2012 the British Cabinet Office estimated that in the UK alone there were some 70,000 social enterprises working at helping people, communities and the environment. They further stated that these businesses and organisations contributed a staggering £54.9 billion to the economy while employing almost a million people. Unfortunately, as impressive as these numbers might sound, the fact is that they hardly begin to scratch the surface of the problems they are doing their best to address.

Entrepreneurs often struggle to raise seed money for any venture so it is invariably far tougher to get funding for social enterprises than their commercial counterparts – this despite the fact that the financial returns can be just as big or bigger. In the UK alone, for instance, if a start-up team is proposing to launch a social enterprise with the potential to radically change the nation’s £87 billion social-care sector, they clearly should be deserving of a serious listen from those who are in a position to provide substantial funding, as opposed to just a little grant money.

We need to encourage more leadership initiatives and competitions such as Google’s 2013 Global Impact Challenge, which set out to find four non-profits in the UK that would be awarded £500,000 each to help them tackle some of the world’s toughest problems through technology. I was honoured to be one of the five judges and I have to say that the quality of the entrants was incredibly impressive. One winner was ‘CDI [Change through Digital Inclusion] Apps for Good’, which motivates schoolchildren to realise the potential of technology to empower them to change the world around them. CDI gives kids the tools to design, develop and even sell apps that deal with issues directly impacting their everyday lives. One such app that’s made it to the ‘Google Play Store’ is Stop and Search UK, an app that enables users to instantaneously check out their rights when it comes to police searches, look up stop and search occurrences in their neighbourhood and anonymously share their experiences. In the last two years, in London alone, there have been close to 100,000 new tech job openings and yet fewer than 4,000 students in all of England have taken computing as an advanced-level subject in each of these years. Apps for Good plans to change that and CDI projects almost 200,000 students will have access to the programme over the next three years.

Another, and very different, winner of the Google Challenge was the Zoological Society of London (ZSL), which uses tracking devices to monitor and protect endangered species of wildlife. Wildlife crime is one of the largest illegal trades in the world, devastating not only threatened species but also the communities that depend on them for their livelihoods. Between 2011 and 2012, it is estimated
that
rhino poaching alone increased by more than forty per cent
.
The ZSL plans to put the $750,000 Global Impact Award funding to work with new hi-tech ‘camera traps’ equipped with automated sensors to help protect threatened wildlife: the sensors will instantaneously transmit alerts of gunfire, vehicle movement and human presence.

Over just two years, ZSL projects that this technology can reduce poaching incidents in just one threatened Kenyan protected area by fifty per cent by providing vastly improved protection for endangered rhinos, elephant, and other poacher-favoured species of wildlife. As awareness grows of the new systems and more effective patrols, it will not only deter poachers but also reduce threats, and increase security for local communities and wildlife rangers.

Google has to be praised for taking the lead with this wonderful initiative – I personally gave Larry Page a high five when I heard about the two stories above. Following the success of Google’s social entrepreneurship awards, others are following suit. This is leadership in action – creating a force for good.

In yet another admirable UK initiative, ‘Founders Forum For Good’ started by Brent Hoberman and Jonnie Goodwin in partnership with social investor Nominet Trust has put up a £1 Million Challenge fund in order to inspire and encourage the brightest entrepreneurs to apply their technological talents to develop new ventures using digital solutions for social impact. Called Social Tech, Social Change, the programme will provide active investment and support to enable these social entrepreneurs to launch and develop their ideas. Within four months of its June 2013 launch, the programme had received 220 applications. Among the first ten ventures to each win a £50,000 share of the £1 million fund was MKS Solutions. Their set-top box is designed to combat the problem of isolation for the elderly by allowing video-calling via a TV set without the need to access the internet. Another was Specialisterne, whose technology creates a bridge between individuals with autism and organisations that have a need for their unique skills, thereby ensuring equal opportunity in the labour market. Two quite inspirational ventures that with some start-up capital and mentoring will now have a much greater chance of success.

In addition to helping social entrepreneurs directly, these kinds of initiatives also tend to attract significant amounts of media attention to the growing social enterprise sector that will hopefully encourage still more funding and in the process see even more great ideas spring to life. It has to be said, however, that to make an impact the awards don’t have to be in seven figures. While bigger sums inevitably make for more media noise, if you or your company can see your way clear to offering a few thousand pounds or dollars to help launch worthy local social entrepreneurs, there’s no telling what great oaks will grow from little acorns.

Now that’s leadership!

Designing designers

Not so long ago, I experienced one of those fortunate chance encounters that help keep life interesting. By coincidence, right around the time that Virgin Produced, our entertainment division, was about to release the movie
Jobs
, which tells the story of Steve Jobs and the early years of Apple, I had dinner with a fascinating group of business leaders that included Twitter CEO Dick Costolo, Nest’s Tony Fadell, Mike McCue of Flipboard and Dave Morin of the social network Path.

As someone who is a regular user of Flipboard and, for reasons I cannot begin to explain, has millions of followers on Twitter, this was a mindboggling group and they didn’t disappoint – they all had great stories to share. Then I learned that Messrs Fadell and Morin had both worked at Apple earlier in their careers, and so couldn’t resist the urge to cajole them into sharing a few insider impressions on Steve Jobs, who despite his well-documented character flaws – several of which are evident in the movie – is still one of the leaders I most admire. Jobs’ extraordinary vision, attention to detail and commitment to form as well as function helped change the way we all live, work and communicate. As I write this I just heard a news item that the latest iteration of the iPhone has sold nine million units in its first three days on the market: a quite amazing statistic by any measure. Selling nine million of something in a decade would be an achievement for most companies, but in three days!

AN APPLE A DAY

Tony Fadell, I learned, was one of the key players in the development of Apple’s revolutionary iPod. He told us how, early in his Apple career, he’d approached Jobs with the initial concept, then gone on to work on building and developing no fewer than eighteen generations of iPods and three generations of iPhones – gizmos that almost single-handedly turned the music and telecommunications industries on their heads. I had to laugh when Tony mentioned that, at Apple, any device that is over five years old is officially categorised as ‘vintage’. I didn’t want to say I’d been in the retail music business for almost forty years before I was rendered extinct by what they were brewing up at Apple. I mean, if five years is vintage, then forty must qualify me as what? Medieval or just plain ancient, I would guess.

I was, however, greatly intrigued to learn how Jobs’ famously tough, aggressive and ‘my way or the highway’ style of leadership had affected the employees and corporate culture as a whole. It is well known that Jobs pushed his employees to their limits – both technically and emotionally – to achieve stunning results. He demanded, expected and accepted nothing short of perfection. He was quick to criticise and pulled no punches when things did not go right, but when his people did rise to the challenge then a lot of things went spectacularly right for Apple.

Fadell told the group that no matter how brilliant a new product in development might have been, if it fell even a tad short of Steve’s vision of perfection, it was never quite good enough. As a by-product of this constant almost maniacal pursuit of perfection in function and design, Jobs could never bring himself to back down. According to Tony and Dave you could never hope to win an argument with Jobs unless you were able to back it up with cold, hard, irrefutable facts. If any argument boiled down to being a matter of opinion, there could be no possible winner other than Jobs. So if there were no mitigating facts to be found, and Tony and his team needed to win an opinion-based argument, they would always scheme together before conferring with Jobs, wait until the ideal moment presented itself during the meeting and when it did, one of them would proclaim ‘now’, at which point they’d all lean in and push back as a team. It sounded a bit like a lynching to me, but Tony said it usually worked and there were seldom any hard feelings from Steve – well, hardly ever!

An intrinsic abhorrence of the status quo and the belief that with a little or often a heck of a lot of thought everything in life can always be improved upon is what sets true entrepreneurs and great leaders apart. At the same time the skill set for the two is quite different. As the Steve Jobs’ story clearly illustrates, whenever he got too involved in the day-to-day side of Apple, his people skills were sadly lacking. When, however, the board ousted Jobs and replaced him with John Scully, formerly president at Pepsico, they also sucked all the creative vision out of the company. Creators are never fully satisfied; they believe they can always do better. At the same time they need to recognise that any business needs a clear direction and a steady hand at the helm. And as great as it may be to be able to zig when the competition zags, incessant zig-zagging can make it very difficult to stay on any kind of a course.

Jobs’ vision, drive and commitment to design perfection led the iPod team into the development of a huge range of variations on the theme before they felt they had attained their goal and were ready to launch it on an unsuspecting world. This is a long and lonely process at any company – as Morin said that evening, ‘In today’s euphoria, nobody remembers how at one stage we couldn’t sell iPods and had to resort to giving a free one to every student at Duke University to get it going. It can be a long and often painful process to build a company.’

When we got to the topic of what projects we are working on now, Tony Fadell discussed his wonderful new company, Nest. Their product is an ingenious hi-tech variation on the good old home heating thermostat. Rather than just obeying pre-set timings, however, the Nest unit assimilates people’s comings and goings from home and anticipates when to lower or raise the temperature. This better intelligence can lead to reductions in carbon output and energy bills by up to twenty per cent. While some might think the home heating business a tad mundane after all the high-profile sexy stuff that Tony was involved with at Apple, Google obviously didn’t agree with that assessment when in January 2014 (several months after my dinner with Tony), they paid a reported $3.2 billion in cash to acquire Nest. I suspect that what Google really wanted to get its hands on was not just a company that makes hi-tech thermostats but rather Tony and his entire team. The Nest team will remain within Google and become the core of a new focus on gadgets – as to what kind exactly, nobody is saying. Given Tony’s iPod and iPhone background, however, with the creative might of Google suddenly at his disposal, watch this space – anything is possible!

Like all good entrepreneurs Tony is someone who starts each day asking, ‘What’s trending out there and how can I best reinvent my business to take advantage of it?’ That’s the classic sign of a chronic entrepreneur and good leader – they are always itching to move on to ‘the next big thing’. I don’t know about Tony Fadell or anyone else around the table that evening, but I’ve often been told I exhibit all the classic symptoms of suffering from ADD (Attention Deficit Disorder). There may be distinct similarities to ADD but I have always believed I am more likely to be suffering from a bad case of SERS – Serial Entrepreneurial Restlessness Syndrome.

As the Apple story so capably demonstrates, a company’s culture is really the power behind the brand and feeds into everything it does. At Nest, using lessons learned from his time in Cupertino, Tony Fadell told us he has worked at deliberately developing a more collegial and less dictatorial culture than that which Jobs fostered at Apple. Tony’s style of leadership is to help everyone in the group to understand their vital role in its successes and to work towards realising those goals. It’s more about nurturing, encouragement and praise than publicly bawling people out and demanding more.

On the other hand, Nest does share Apple’s focus on brilliant design. Tony Fadell remarked that just like making practical, excellent products, ‘You must look cool and do cool.’ This gives customers both rational and irrational/emotional reasons to invest in a brand. ‘Technology should be about more than just newest, loudest, prettiest – it should make a real difference.’

Dave Morin who spent time at Facebook as well as Apple before creating the critically acclaimed social-networking app Path, commented that the impetus for great design has got to come from the top. And having worked with both Steve Jobs and Mark Zuckerberg, he should certainly know! Dave believes that everyone at a company should care about how a product looks, feels and works — not just the people with the word ‘design’ in their job titles. He added that modern companies need CEOs with a taste for good design every bit as much as they need accountants who are great with numbers. This is a philosophy we have rigorously employed over the years at Virgin – on both design and accountants! We have always tried hard to ensure every level of the team is included in the design process. After all, who has more meaningful input than a flight attendant as to what works and doesn’t work with an airline passenger, or a personal trainer on what members really want from a fitness club?

Good design is incredibly important. If the iPod or iPhone had functioned in exactly the same way but been clunky ugly ducklings, do you really think they would still have taken the planet by storm the way they have done? I seriously doubt it.

The Virgin way has always been to push sexy design to the forefront. Take our Galactic business, for instance: in essence it’s all about the unique opportunity to travel into space and experience weightlessness while looking down on our planet from an altitude a dozen times higher than commercial flight levels. Accustomed to TV visions of ruggedly industrial NASA space capsule and space station interiors, I doubt if anyone would have balked at the chance to blast off because they didn’t think the interior design of the Galactic cabin was quite right. Nevertheless we have spent vast amounts of time and effort getting the look and feel of everything from our Nevada New Mexico, Spaceport America to our astronaut uniforms and the cabin interiors in SpaceShipTwo to be every bit as sexy and cool as you’d expect to find in a new luxury sports car. Adam Wells who heads up the design team at Galactic is the person responsible for all the outstanding cabin innovations we have introduced on Virgin Atlantic and Virgin America in recent years and he has relished the design challenges of introducing the same but extremely disparate sizzle to an altogether different space – pun intended.

With Virgin Galactic, as with all our other businesses, one of my key roles has always been to continuously stir the pot by objectively listening to feedback and opinions from every possible source – or as someone once described me, ‘sort of a shit-disturber in chief’. It is essential that this kind of listening, pro-active culture permeates the entire company at every level. Everyone has to be a leader and a hundred per cent comfortable in their own right to express their opinions freely and openly. How many times when you’ve complained about something have you heard the sad retort, ‘Oh, I know! You’re not the first person to say that and we’ve been telling
them
for years.’ Employee and customer feedback has to have an unimpeded route to people who can act upon it or else nothing will ever get better. There is no room for the kind of departmental hubris that Dave Morin talks about. In short, you don’t have to be a designer to have designs on improving your company’s customer service, products and ultimately making everyone better off.

As our dinner wound to a close, we got around to discussing what would be the best advice we could take from our own varied experiences that might be useful for new entrepreneurs and leaders, whether with a new business or a new product. By the time we finished dessert we seemed to have a consensus that – to parody or perhaps mirror Nike’s ‘
Just Do It
’ slogan – our advice should be, ‘
Just Start It’
. In essence we agreed with the great advice I mentioned earlier that came from my mum: ‘You’re guaranteed to miss every shot you don’t take.’ So take that shot! Don’t brood over one idea or another for two or three years as many people do – give it a go! Don’t get lulled into the morass of perpetual paralysis by analysis: if your instinct is positive then go with it. You will learn so many more lessons by just doing than you ever will by mulling it over and over.

If music helps gets you going, then crank up the volume and let the Rolling Stones blast you into action with ‘Start Me Up’. Trust the process, trust your instincts and trust your team. Don’t start second-guessing yourself or worrying about a few mistakes along the way – you will only learn from them.

Just be sure that you don’t make the same mistakes over and over – then you should worry!