Richard Branson as a Global Leader - Case Study Example

Running Head: Globalization and Leadership Globalization and Leadership Name Course Lecture Date Introduction Globalization is a force that is changing many facets of life. According to Ireland and Hitt (1999) globalization is inevitable, and any organization that does not change to adapt to the force will perish. Globalization is so dominant in today’s society that a closer look at your local store will reveal numerous commodities that are manufactured overseas. For organizations that operate in the global marketplace, they have to deal with a number of contemporary challenges arising from globalization. The previous generation of organizational leaders strived to ensure stability in their organizations. As an organizational goal stability was informed by a closed and underdeveloped market environment, where prices were not in flux. On the contrast, globalization in the form of global capital inflows, labor mobility, market transparency and real-time communication means the business environment is constantly changing. According to Carpenter and Fredrickson (2001), intense competition in the global marketplace has led to increased focus on change management. This paper uses the Gill (2003) integrative model of leadership for change to explore how Sir Richard Branson; a famous global business leader has successfully managed change in one of the largest conglomerate of companies in the world. Richard Branson as a Global Leader Sir Richard Branson is one of the richest people in the world. Branson is the owner of the Virgin brand of companies that operate in multiple countries across a wide range of industrial sectors (Kets de Vries, 1999). The virgin group has interests in retail operations, hotels, publication, radio and television and Air travel. The flagship company, Virgin Atlantic is one of the major airlines on the transatlantic route, formerly dominated by British Airways (De Vries and Florent-Treacy, 1999). Recently, Branson has launched Virgin cola and Virgin Galactic. Virgin Galactic is a company that is engaged in space tourism. The virgin group consists of over 350 highly successful companies. Branson has the ability to build great companies from scratch and make them dominant in the industry sector he targets. Branson’s companies have also succeeded in industry sectors shaken up by the forces of Globalization. For example, Virgin Atlantic and its subsidiaries continue to flourish while other airlines are succumbing to increased global competition in the airline industry. This paper explores how Branson has been able to lead his group of company in a constantly changing business environment. Dimensions and requirements of Leadership Gill (2002) identifies four separate tracks of leadership theory that enable effective change management. These tracks are: cognitive intelligence, spiritual intelligence and emotional intelligence, and behavioral skills. Cognitive intelligence To be an effective leader in a business environment that is constantly in flux, a leader needs the superior ability to see the emergence of a novel situation. In the views of Gil et al (2005), a leader who is intellectually intelligent will perceive change, understand information, reason with it, imagine possibilities, use intuitions, and make judgements and decisions. Richard Branson exhibits cognitive intelligence as he has the ability to see where change is needed. For example, Richard Branson was able to see the need for improved quality in the airline industry and make the change accordingly (Mutzabaugh, October 2012). When asked about the changes they would make to American Airlines, Richard imagines an American airline cabin with the best interior design and the best uniforms. According to Branson, most American airlines that used to compete with Virgin Atlantic failed to notice the need to up the quality of their travellers experienced have since perished. Branson cited the cases of Pan Am, People express and TWA whose leaders failed to move with change. According to Branson, the leadership at British airways recognized the need for change and “upped their game”, a good why British Airways has survived and continues flourishing (Mutzabaugh, October 2012). Spiritual Intelligence According to Gill (2002) people are searching for meaning in their lives. By being part of a shared meaning and value employee improve their sense of worth. People would accept a company’s mission and commit to fulfilling when they find meaning and purpose in their work. In the view of Gill (2002) leadership is about making meaning not money. Branson’s spiritual intelligence is reflected by many aspects of his leadership style. Five years ago, at the Clinton Global Initiative, Richard Branson promised 100 per cent of his airline business profits will be dedicated to developing alternative fuel to power Virgin’s fleet (Crush, July 2010). This move means every employee working with Virgin airlines feels part of the initiative to combat Greenhouse emissions. According to Branson, the largest challenge to global leadership is the bigger social challenge. He argues that business leaders must strive to make a difference in the world. Branson tells business leaders to ask themselves the pertinent question: “how can I be a force for good?” (Crush, July 2010). Emotional Intelligence An effective global leader requires emotional intelligence. This is defined as the ability to “understand oneself and other people, display self-control and self-confidence” (Alon and Higgins, 2005). A leader who is emotionally intelligent knows how to respond to people in appropriate ways. The use of personal power is more dominant in emotionally intelligent leaders rather than positional or authority used by other leaders. According to Kavanagh and Ashkanasy (2006), emotional intelligence helps a leaders overcome resistance to strategic change as it is an intrinsic emotional reaction to change. According to Richard Branson, great CEOs are concerned about what their employees are thinking and feeling. In the view of Voola, Carlson and West (2004), the success of Virgin Blue in the Australian domestic airline market can be owed to Richard Branson’s emotional intelligence. The launch of Virgin Blue came in the backdrop of the failure of Ansett and compass airline in the highly volatile and competitive Australian airline industry. During this period airline workers were highly disillusioned with their employers. On the contrary Branson has been able to establish good relationship with the staff, motivate and unify them to make Virgin Blue operations in Australia successful. Behavioral dimension and intelligence Global leaders also have to behave in ways that they guide the behavior of their staff (Kavanagh and Ashkanasy, 2006). Richard Branson communicates to his employees and customers in diverse ways when he launched Virgin Cola, sir Branson drove into Times Square in a tank. This is a clear message to his employees that they were at war against Pepsi and coca cola. Branson has demonstrated himself as a true role model for his employees. He is strongly focused on customer satisfaction, a factor that underlies the success of his businesses where others fail. Integrative Model of Leadership Gill (2003) proposes an integrative model of leadership that explains how an effective leader in a changing world can use skills in managing change within their organization. According to Gill (2003), the elements of effective leadership practice are: vision, values, strategy, empowerment, motivation and inspiration. Strategic thinking and vision are important factors in ensuring leaders that are emotionally and behavioral intelligence succeed in a constantly changing business environment. Vision Any organization that lacks a vision will eventually perish. Gill (2003) argues that effective leadership for change is founded on the definition and communication of an appealing vision for the future. Gill (2003) defines vision as a desired future state that is the basis for directing change effort in the organization. According to Gill (2003) and Drath et al (2008), an effective leader for change is an organizational architect. According to Kets de Vries (1999), a leader for change is able to construct a solid vision of the future. Leaders who lead their employee through change must be dissatisfied with the status quo. Effective leaders make the big picture within grasp of those people they lead. Branson’s visionary attributes are found throughout his adult life as an entrepreneur. At the age of 16, Branson quit school to pursue his vision of establishing a magazine (Kets de Vries, 1999). The Branson vision of an Airline company that could effectively compete with the dominant British Airways on the transatlantic route saw him establish Virgin Atlantic. Branson vision was to establish an airline that could offer affordable and enjoyable flights, a customer requirement the big airlines was not fulfilling (McLimore, 2013). Branson’s belief in Virgin Atlantic’s vision is illustrated when he sold Virgin Music Group in 1992 to finance Virgin Atlantic (McLimore, 2013). Such a bold moves galvanized support among the employees of Virgin Atlantic as Branson as the owner had shown intense commitment to the organization’s mission. Branson’s ability in establishing and staying true to the vision of both the magazine he founded and Virgin Atlantic underline a leader who constructs a vision of the future and goes against conventional wisdom to achieve that vision. But just having a vision for the future and challenging the status quo is not enough to guarantee success in the global environment. According to Gill (2003), the leader’s vision for a company has to be the same as that of his followers. According to McLimore (2013), a shared vision changes the perception the company is “theirs’ and makes it “our company”. Branson’s approach to ensuring his followers share his vision is based on properly and regularly recognizing them for their initiative. According to Branson this makes the business an extension of the employee’s personality (Kets De Vries, 1996). Branson asserts that he tries as much as possible to cultivate the perception that among employee “Virgin is mine to keep and look after” (Crash, July 2010). According to Branson listening to employees is critical in establishing a shared vision of the organization. Branson says that he believes giving individuals what they need, and outlining parameters to work within; a clear reference to a vision. Finally Branson says that once employees share the vision he lets them “get on and do their stuff’ (Crash, July 2010). Through having a shared vision with his employees Branson is able to (Drath et al, 2008): Direct change at virgin so that activities such as acquisitions, recruitment, staff retraining are aligned to the change. Motivate people overcome their initial skepticism about change and take action to support the change. Helps individual to be aligned and the actions coordinated efficiently. Values and Culture Organizational leaders believe that shared values can unite people in a fragmented world. For a leader to be able to unite his followers towards achievement of his visions he has to earn their trust. In the views of Gill (2003) shared values are critical in ensuring that employees trust their leader. According to corporate leaders must practice the values they espouse in theory. Leaders must set examples for their employee by being role models of integrity. Gregersen and Morrison (1998) call for leaders appeal to their followers through such higher values like excellence, liberty, justice and equality. An effective leader must identify and promote shared values in his organizations. Shared vision is one of the most distinct factors that identify an organization’s culture. Through a shared vision an organization is able to support and commit to a common purpose. Shared values contribute to competitive advantage and create a sense of belonging among employees. According to Gregersen and Morrison (1998) through shared values, companies are now more customers and stakeholder focused. Branson epitomizes value based leadership in many ways. According to Branson businesses should not focus on profitability alone, but must also be more responsible to society. Having been jailed for tax evasion, Branson swore never to engage in conduct that may compromise his good reputation (De Vries and Florent-Treacy, 1999). Branson emphasizes the value of sustainable business as a corporate ideal his followers have to achieve to follow; Branson has shown his commitment to tackling climate change by promising the profits of his airline and rail operation to fund efforts to protect the environment. Strategy The strategy outlines how a company’s vision and mission can be pursued. According to Gill (2003) a company’s vision remains a dream without strategy. In the views of Ireland and Hitt (1999) the role of leaders is to develop, secure commitment to and implement rational business strategies. However, companies must always ensure their strategies are aligned with their company vision and values. According to McLimore (2013), Branson is deeply involved in the strategy formulation of his new businesses. He spends a lot of time developing strategies with his executives. Recently, Branson set up Virgin Management Ltd which assists the other companies in his businesses formulate effective strategies. Empowerment Empowerment refers to enabling other people do what needs to be done. According to Ugboro and Obeng (2000) empowerment involves equipping employee with the knowledge and skills, availing opportunity and resources for them to be able to independently manage their work. According to Trompenaars and Hampden-Turner (2002), empowerment involves the process of removing obstacles to change in an organization. These obstacles may be systems or structures that negatively affect those striving to achieve the company’s vision. Empowerment calls for the top-down leadership approach to be abandoned. Indeed real change can only be achieved by empowering teams in organizations. Branson has recognized that his businesses need to respond and adapt rapidly and he encourages an entrepreneurship culture at Virgin. Branson says that a company that used the creative potential of its employees easily gets through hard times (Crush, July 2010). Branson organizational design is one of the ways he uses to motivate his people. Branson organized his record company into small independent organizational units of about 50 people (Kets de Vries, 1999). These companies would be headed by managing directors, sales managers and marketing managers. Everytime a company would have more than 50 employees Branson would split it up into a smaller company. This way, Branson provided career advancement opportunities for many people. The emphasis of on speedy implementation of new ideas means that Branson’s employees are empowered. Branson alleges that he does not hold board or committee meetings to discuss ideas (Crush, July 2010). Instead, he asks his staff to call him directly if they have any ideas. On the other hand, Branson allows his employee to implement new ideas without even consulting him. Another empowering factor in Branson’s leadership style is letting his employees learn from mistakes. It is inevitable that employees will make mistakes, especially when they are being pushed to deliver excellent performance. Branson argues that there cannot be risk without mistakes. In the word of Branson “ a person who makes no mistakes makes nothing” (Crush, July 2010). To this end, Branson rarely fires people, and he offers a second chance for them to prove themselves. Motivation and Inspiring Effective leaders need to be motivated and inspire people to undertake activities that ensure companies survive in the constantly changing business environment. To inspire followers, leaders must be credible to the followers. Honesty and competency are some of the qualities that ensure leaders perceived as credible by their followers. According to Kouzes and Posner (2002), employees are motivated when their “individual needs, wants, values and interests are aligned with that of the organization. Branson is an inspiration to his employee as he is a competent leader who places his employees first. Branson says his business maxim is- staff first, customers second, and shareholders third. This shows that Branson gives top priority to his employees who in turn deliver better customer service, and in turn enhance shareholder value (Eisenbach, Watson and Pillai, 1999). Conclusion Branson as a global leader has succeeded in ensuring that his group of companies keeps up with change in a globalized business environment. As a leader Branson is able to recognize the need for change when it arises. Through emotional and spiritual intelligence, Branson is able to inspire and get his followers to support the constant change initiatives within his organizations. Furthermore, Branson exhibits behavior that makes him a role model for his employees. Branson strongest point is found in his ability to come up with solid visions for the future of his businesses. He also makes a point to pursue his vision and convince his employee that the vision is worth striving for. By creating a shared vision, Branson ensures his employee feel that they own and maintain the Virgin brand. By having shared values with his followers, Branson does not have a hard time convincing them to do what is needed to adapt to changes. 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