VIDEO: Richard Branson – give people the freedom to make mistakes

Richard Branson and Nik Powell founded Virgin in 1970, the name they gave to their small record outlet. The name representing how they saw themselves in business, as being first-timers. Since then the group has grown into into a multi-national conglomerate with its core areas of business being travel, entertainment and lifestyle. The group also manages more than 400 ventures worldwide. Branson, who famously sold Virgin Records for $1 billion, is ranked 330 on the Forbes Rich List and valued at $5 billion. He says there is a very thin dividing line between success and failure, and most people who set up in business, without financial backing, fail at some time in their lives. He however, only just, stayed on the right side of that dividing line. He offers this and more entrepreneurial insight in the video below. – Stuart Lowman

Richard Branson is founder of the Virgin Group

I think the most important thing about running a company is to remember, all the time, what a company is. A company is simply a group of people and, as a leader of people. You have to be a great listener. You have to be a great motivator. You have to be very good at praising and looking for the best in people. People are no different from flowers. If you water flowers, they flourish. If you praise people, they flourish, and that is a critical attribute of a leader.

There is a very thin, dividing line between success and failure. Most people who set up in business, without financial backing, they fail at some time in their lives. I’ve only just stayed at the right side of that dividing line. For instance, just after – we had a record company. I was fed-up flying on other peoples’ airlines. I felt that the experience of flying on other peoples’ airlines was an unpleasant one, and I decided to setup an airline.

Well, our bank went into a complete panic attack, and when I came back from doing the inaugural flight of Virgin Atlantic’s very-very first flight, (from London to New York). I came back to find the bank manager sitting on my doorstep, and informing me that they were going to close Virgin down on the Monday, and this was the Friday. That I had two days to, effectively, pay them off the monies that they’d loaned us. I remember pushing the bank manager out of my house, telling him he wasn’t welcome, which is a dangerous thing to do to your bank manager, and then spending the weekend ringing around the world to all of the distributors of our music. Asking if they could give us a temporary loan to get us through the following week, which they were good enough to do, and by the end of the week, we had changed banks.

We had actually managed to find a bank that was willing to lend us 30 times the overdraft facility that our bank had lent us, and we managed, just managed to survive. I think the moral of that story is actually don’t think of your bank as somebody that you are beholden too. People just don’t move from one bank to another. Sometimes you need to be willing to step-up and move your banks, in the same way that you should step-up and move your doctor, on occasions. Anyway, I learnt from that lesson.

Virgin does work very well without me. I use myself to build the brand – to build the 300 to 400 companies around the world but I also learnt the art of delegation. I have a fantastic team of people who run the Virgin companies. I give them a lot of freedom to run the companies, as if they were their own companies. I give them the freedom to make mistakes, and the Virgin brand is now, maybe one of the top 20 brands in the world. Well respected and when my balloon bursts Virgin will continue to flourish, and maybe I had the icing on the cake, on occasions. Maybe they’ll have to spend a bit more money on marketing but, fortunately, Virgin is in a state where it can live on, healthily, without me.

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