Leadership and Organisational Success with the Example of Richard Branson - Research Paper Example

Leadership and organisational success Organizational leaders are the individuals who can take an organization on the path of optimal success or allowthe organization to ‘wander’ into the depths of failures. Only if the organizational leaders exhibit effective leadership traits, he/she can chart a successful path for the organizations and thereby garner benefits to the employees, other stakeholders and importantly themselves. An organizational leader should exhibit optimum leadership traits right from the moment he/she launches an organization or takes over the leadership of an organization, and should continue to exhibit those traits in each and every organizational process. As mentioned above, leaders by acting as entrepreneurs can found or establish organization, and then manage, while other set of leaders will take over an already existing organization and manage it. Among these two types of leaders, entrepreneurs have more opportunities to exhibit or even develop their leadership skills, as they have to start their entrepreneurship from the scratch. Boshoff and Wyk (2001, p. 215) defines entrepreneurship as “A planned, long-term process of independently creating something, associated with a specific individual or individuals... as a novel combination and recombination of resources to utilize achievement opportunities, while accepting the financial, social and psychic risks involved”. Baumol (2007, p.23) adds to this perspective by defining “entrepreneurship as the practice of revitalizing organizations or starting new organizations in response to new opportunities”. This being the case, entrepreneurs will have to exhibit far extensive and deeper leadership traits to start an organization from beginning and make it a huge success. These leadership traits were exhibited and still being exhibited by Richard Branson, who is widely regarded as one of the greatest entrepreneur and a leader. Richard Branson is one of the successful English business magnate, who is widely known for his Virgin Group of companies, which numbers more than 400. Right from the moment, he launched his enterprise, till now he exhibits and is exhibiting optimum leadership traits. Branson was born in 1950 in Blackheath, London as the eldest son of Edward James Branson and Eve Huntley Branson. The common view regarding leaders is that they will exhibit their leadership or entrepreneurial skills at the young age itself. That is, if the future leader or entrepreneur has a good and stimulating experience in his/her childhood and built on that experience by gaining more knowledge, skill and experience in the adulthood, he/she would be a success. Thus, successful leaders will exhibit leadership traits, particularly when the odds are stacked against them. This is particularly relevant in the case of Branson because although he suffered from dyslexia and faired poorly in the academics, he exhibited entrepreneurial or leadership skills even at the age of 16. That is, Branson went to the Scaitcliffe School and Stowe School until the age of sixteen, and in both the schools his academic performance was below average. With school life being a nightmare for Branson, he started focusing on student activism in the late 1960s. In that direction, at the young age of 16, he initiated his first entrepreneurial project by establishing a student newspaper, simply called Student. It was not a school newspaper, but a newspaper focusing on students by covering the students of many schools in the locality. For the newspaper, he interviewed local politicians, rock stars and even movie celebrities. Now, 40 years later Sir Richard recalls, “I remember when I was asking Vanessa Redgrave or James Baldwin for an interview, and the fact that they took the time to respond meant an enormous amount to me. It inspired me. So its extremely important to respond to people, and to give them encouragement if youre a leader.” (Sukhiy 2007). Due to the initial good response, he even started selling advertising spots on the newspaper to major commercial entities. “He’d started the project in his spare time at school, trying to secure political interviews and advertising using an old phone box in the Egyptian entrance.” (Stowe School). This first venture of Branson turned out to be major commercial success, and considering he was still at school he evoked varied reactions from the people around him. Although, many were appreciative of his exploits at a school going age, his headmaster at the school, Bob Drayson had an interesting message to him, which said, “Congratulations, Branson. I predict you will either go to prison or become a millionaire.” (Stowe School). On the back of that small success, Branson was able achieve its first major success and thereby founding of the Virgin group, when he was just 20. That is, in 1970, Branson saw an opportunity through his newspaper of offering popular music records at a very cheap price by running its advertisements for mail order delivery. He understood that the readers of Student were willing to “spent a great deal of money on records even at full price, but considerably lesser than the “High Street” outlets and “it turned out that the orders flooded in and that they were more lucrative than magazine subscriptions.” (Free Enterprise Land). Due to this opportunity, Branson had the vision to establish a record music business. He started that business of selling music records from the crypt of a church under the name “Virgin”. That particular name arose during Branson interaction with his early employees as they were all new to this business. “One night some friends and I were chatting over a few drinks and decided to call our group Virgin, as we were all new to business. The name stuck and had a certain ring to it.” (Branson 2010). He went on to open a retail record shop. “In 1970 I founded Virgin as a mail order record retailer, and shortly afterwards I opened a record shop in Oxford Street, London.” (Branson). These early ventures of his garnered good financial returns, and gave him a platform to develop further. Among the good leadership traits, perception and vision are the foremost ones, and Branson as mentioned above showed it in his childhood and teenage itself. The perception and vision that arises in the mind of the leaders can only initiate all the process inside an organization, and can set the organization on the path of success. In that direction, Branson had a great vision even in his school days, and although he was ‘handicapped’ by the lack of formal education due to his medical condition, he did not view it has an issue. Richard Branson was able to intelligently scheme is success against all odds at such a young age. By publishing a students magazine and expressing his ideas, he exhibited his confident personality and as mentioned above even earned a kind of dubious appreciation from his headmaster. When a leader has such a strong vision and perception, it will spread to the employees as well and will make contribute optimally for the achievement of that vision or objective. This is in line with the Organizational support theory. This theory focuses on how employees will share the leaders’ vision and extend their fullest support. This was pointed out by Hyatt (2011) who opined when there the leader exhibits clear and optimal vision, the perceived organizational support will be high, and thereby the employees will “feel obligated to be committed and engage in behaviors that further the goals of the organization”. From those beginnings, Virgin has grown to major conglomerate having more than 400 business or companies in wide variety of fields. It can be said there are not many business sectors, in which the Virgin missed its ‘footprint’, thus evolving into one of the world’s best known brands. “Conceived in 1970 by Sir Richard Branson, the Virgin Group has gone on to grow successful businesses in sectors ranging from mobile telephony, travel, financial services, leisure, music, holidays and health & wellness.” (Virgin). In addition, “Virgin employs approximately 50,000 people, in 34 countries and global branded revenues in 2011 were around £13bn ($21bn).” (Virgin). Despite, this massive nature of the company, it is on the success path, and one of the key factors is the leadership skills of Richard Branson. Branson decided to move into many sectors, and thereby achieve successes in various sectors. That is, instead of focusing on a single or few sectors, Branson leadership strategy was to focus many sectors, particularly the smallest segments in those varied business sectors. After cornering on those smallest sections, he launched products and services, and with no major competitors, those businesses succeeded even capturing majority of the market share. “His business plan is to focus on very small segments of a particular market and doing a high quality job at providing the product or service. This concept is able to gain small monopolies on a market share and often creates very high profit margins” (UPX Success). Because of this strategy, Branson exhibited transformational style of leadership and actualized a decentralized, non-hierarchical organizational structure. “Transformational leadership comes from the top managers and executives within the company. Richard Branson along with other company executives has set many common goals for the company to achieve as a whole.” (UPX Success). The concept and theories behind Transformational leadership was developed by James MacGregor Burns in late 1970s. Transformational leaders have the ability to make the followers pursue the organizational goals, as if their own goals. According to Barbuto, “Followers of transformational leaders are empowered to pursue organizational goals.” (Barbuto 1997). That is, after formulating the organizational goals or objectives, with the aid of employees as well, the leader will positively ‘transform’ the employees in the organization to become more focused, co-operative and productive towards those goals. They will be able to ‘seduce’ the employees to follow those goals with his/her charismatic and effective skills. Transformational leaders are often charismatic and possess a collection of virtues and competences, including strong self-belief. (Avolio and Yammarino, 2002). Even while making them focusing the long-term goals, the leaders will give the employees maximum responsibility and autonomy to carry out various organizational processes within the organization. That is, by adopting decentralization, the transformational leaders will allow the employees to oversee and manage various processes, projects, modules, even sister concerns, subsidiaries, etc., with the leaders and upper management only acting as the guiding authorities. Thus, with more powers, flexible deadlines, responsibilities, etc, the employees will exhibit optimum motivation and they will start to view the organizational goals as their own personal goals and contribute maximally. “The highest level of management encourages employees to use their skills in a way that will best compliment the company. The idea behind this is to promote the philosophy that the overall benefit of the company will lead to individual benefits for each person involved.” (UPX Success). This transformational leadership trait is being exhibited by Richard Branson optimally. As pointed out above, he started many companies and as it is humanely not possible to manage all those companies by him, he exhibited transformational leadership and adopted decentralized organizational structure. Under this strategy, he gave a lot of opportunities to the employees to develop and by bestowing the potential ones with more autonomy and responsibility, he developed leaders to manage those businesses. The process that works in Virgin is, when an idea for a new enterprise comes up, Branson will develop it into a company. He develops it by maintaining a controlling interest in all the enterprise he starts, and then importantly in majority of those ventures, he will just oversee and manage that venture in the initial phase. After that, as part of the transformational leadership approach, he will delegate to other capable second-rung of leaders and moves on to other interests. This was summed by Branson himself, when stated, “I come up with the original idea, spend the first three months immersed in the business so I know the ins and outs and then give chief executives a stake in the company and ask them to run it as if it’s their own,” (Sukhiy 2007). However, there are exceptions, as he remains the CEO of Virgin Airlines and the travel businesses by directly overseeing them. However, the bottom line is, he facilitates the development and evolution of new leaders and at the same time runs its wide business empire effectively. Leader is not a single individual, he/she will be part of a team of skilled professionals, and it is the duty of the entrepreneur to develop them also. That is, if the restriction in the working environment is removed, the worker will feel comfortable and work in productive manner. This productive manner can quickly develop the individual worker as well as the enterprise. So, the duty of the leader is to break the shackles and provide a good working environment. Richard Branson did this, by first abolishing the hierarchical structures in his enterprise. His anti-hierarchical philosophy and allowing everyone to have access to him developed the workers in a big way. This anti-hierarchical nature of the organizational structure can be understood from the words retrieved from Virgin’s website. “Virgin Group companies are part of one big family rather than a hierarchy. They are empowered to run their own affairs, yet the companies actively help one another, and solutions to problems are often sourced from within the Group. In a sense they form a commonwealth, with shared ideas, values, interest and goals.” (Virgin). Importantly, this transformational leadership skills and the decentralized non-hierarchical organisational structure followed by Richard Branson created an optimal environment for the employees to come up with various innovative thoughts. Leaders should act more like managers and invite others to discuss the organizations various strategies, thereby making them innovative and importantly on how to successfully implement those strategies, so there is high level co-ordination. He/she should have the leadership trait to ask "what are your thoughts on this?" This productive trait can quickly develop the individual workers as well as the enterprise. So, the duty of the leader is to remove any barriers for the employees to communicate his/her ideas and suggestions to the top management. As mentioned above, Richard Branson did this, by first abolishing the hierarchical structures in his enterprise. “The organisational structure of the Virgin Group is flat as it has little of hierarchical levels, short lines of communication among employees and senior managers. Due to a great deal of responsibility and freedom, employees are encouraged to take initiative, commitment and to come up innovative thoughts.” (Musiz Maniacs 2012). Due to this open type of communication channels, formal meetings are conducted minimally inside Virgin, with Richard Branson most of the times working from his home. In that direction, the employees are provided with Branson’s phone number and residential address, so they can contact with any ideas and suggestions. Branson encourages this communication channel by stating, “With Virgin, we make decisions on the phone. If youve got a good idea and I like it, you can get on with it.” (Sukhiy 2007). This way he optimally encourages good suggestions from the employees and more than that good innovation from them. It is normally viewed that employees could leave the organizations, among other reasons, if their suggestions and innovative thoughts are not heard and appreciated by the management. Understanding this mindset of the employees, Branson provides barrier free communication channels and encourages the employees to give their valuable ideas and innovations to him directly. With this leadership trait, Branson hopes that it will work as a catalyst for more innovation from the employees. “The key to encouraging innovation and recognizing talent at any level within the Virgin ranks, asserts Branson, is to listen to any ideas and to give feedback.” (Sukhiy 2007). Due to this optimal work environment created by Branson, employees in Virgin can pitch their ideas for a new project directly to him. This exactly happened in late 1990s, when a flight attendant working in the Virgin Airlines, Ailsa Petchey after facing various impediments in planning her wedding pitched to Branson the idea of opening a wedding planning boutique. “Thats how in 1996 a Virgin Airlines flight attendant turned her difficulties in planning her own wedding into an idea of the wedding planning boutique and was promoted by Branson to run a new venture - Virgin Bride, now the largest bridal shop in Europe.” (Sukhiy 2007). Thus, from this success, it is clear that Branson provided good opportunities for the employees to come up with innovative ideas and constructive suggestions. The strong leadership trait of Branson was also visible during the times of failure. Normally in any organization or an enterprise, the incidence of failure will there. When the leader himself/herself is found guilty of a failure, it should be advisable for the leader to learn from the failure and take the corrective measures. These measures will bear fruit in the long run, providing the organization with strong success. Branson is no stranger to failures; his various initiatives and ideas have many times faced failures and the secret to his success has been his ability to make a strong recovery. “He understood that an integral part of being an entrepreneur meant being willing to not only accept failure but to also be able to rise up and start again.” (Evan carmichael). Because of which only even after the failure of Virgin Cola, Virgin Vodka, Virgin Cosmetics, etc., Branson continued on with his diversification of business, wishing to achieve even more success. Branson imbibed this leadership trait of accepting the failure and making a strong recovery among his employees as well. That is, when the employees make any mistakes and caused any failures, Branson was there to support him/her and help him/her to make a strong recovery. Branson is of the opinion that in those situations, avoiding any harsh actions against those employees, the leaders should be available to support them and importantly equip or prepare them to correct those failures. “As a leader you’ve also got to be extremely good at praising people. Never openly criticize people; never lose your temper, and always lavish praise on your colleagues for a job well done. People flourish if they’re praised.” (Branson 2010). He was also of the opinion that employees should not be always criticised for their failures, because “usually they don’t need to be told when they’ve done wrong because most of the time they know it.” (Branson 2010). Instead those employees should be given the opportunity to correct those wrongs. This same thing happened in the Virgin Atlantic Airways Ltd. Joe Ferry, Virgins head of design was entrusted with the task to create a new sleeper seats that reclined at an angle. But after the trials, they found out that the seat did not work successfully, with passengers complaining about sliding and discomfort. At the same time, Virgin’s chief competitor, British airways came up with the hugely successful flat bed. And ferry acknowledged this fact that his design is inferior. But Ferry didnt get the axe from Branson. In fact, Virgin entrusted him to take on another extraordinary risk, committing a huge $127 million and in that task, Ferry showed success. (Branson 2005). This, shows how the successful leader, Richard Branson followed the important trait of supporting the staff during the failures. At the same time, Branson is exhibited tough leadership, when the company goes through troubles. That is, if the companys survival and success is negatively impacted by financial difficulties, the tough decision of downsizing will only be the viable option. Richard Branson also agrees with this view, "if a companys got into financial difficulties or something then — then they may, in order to save, you know, thousands of jobs have to take tough decisions" (Branson 2005). In this world each and every thing moves because of energy. That is, any individual particularly leader exhibits invisible positive energy through his/her actions and communications, it will positively impact organizational success. This exhibition of positive energy is an important leadership trait and is more important to different organisations at different times. This trait can surely channelise the positive energy for the betterment of the organization. This type of positive energy is quite visible in Richard Branson as he handles different organizations, which needs different positive actions in different times. He is a high octane adventure seeker, who undertook expeditions like non-stop hot air balloon voyage around the world. "HES a part-time adventure seeker and full-time billionaire" (Ligerakis, 2001). Branson exhibited this positive energy particularly during the launch of the inaugural Virgin Atlantic flights to India. That is, after the first flight landed at the New Delhi airport, Branson came out fully dressed in Indian costumes, dancing to the local Bangra dance accompanied by number musicians playing drums. (Ligerakis, 2001). This not only created a positive energy about the company, but by adopting local customs, it enticed the target customers as well. A successful leader is the one who could inspire other individuals, with whom he/she has no connection at all. That is, the leader could be at some place, while the person, whose confidence level gets heightened by the specific leader, could be at some other place. Branson did that in the case of a group of Indian graduates, inspiring them to become an entrepreneur on their own “Phanindra, Sudhakar and Charan are all 25, from the BITS-Pilani class of 2002. They had always wanted to start their own business… They found their inspiration from a quote in (Sir) Richard Branson’s autobiography, “look around your life. If there is any process that can be improved, it could be the next big business idea”. Thus redBus was born.”(Chatterjee). Another key trait is setting achievable goals. An organization can function and succeed only if there is a predetermined goal. That goal will only spur the workers to work hard and give their best. But, if the goals were extremely difficult to achieve, it would demotivate the workers very much. So, it is always advisable to set achievable goals and the leader is the one who should take the lead. Richard Branson did exactly this with Virgin Galactic. Even though the concept of space tourism was considered a difficult proposition, Branson thought it is possible to achieve it and make a success out of it. So, this setting of achievable goal is one of the important traits, which placed Branson in the position of a top leader. From this above analysis of leadership traits of Richard Branson it is clear that he exhibited and still exhibiting many optimal leadership traits from his first venture to all the current ventures, thereby placing his organization on the path of success. References Avolio, BJ and Yammarino, FJ., 2002. Transformational and Charismatic leadership: The Road Ahead. Elsevier Science. Oxford, UK. Barbuto, J., 1997. Taking the Charisma Out of Transformational Leadership. Journal of Social Behavior & Personality, vol.12, no. 3. Baumol, WJ., 2007. Good Capitalism, Bad Capitalism, Yale University Press Boshoff, A B and Wyk, RV., 2001. Socio-political and Psychological Perspectives on South Africa, Ed. Christopher R. Stones. Nova Publishers. Branson, R., 2010. Richard Branson: Five Secrets to Business Success, [Online] Available at http://www.entrepreneur.com/article/217284(Accessed on April 19, 2012) Branson, R. Autobiography, [Online] Available at http://www.virgin.com/richard-branson/autobiography(Accessed on April 19, 2012) Branson, R 2005, Transcript of Jane Pauley’s Interview with Sir Richard Branson, [Online] Available at http://www.business-opportunities.biz/2005/10/19/transcript-of-jane- pauleys-interview-with-sir-richard-branson/(Accessed on April 19, 2012) Chatterjee, S, BITSian Entrepreneur Showcase, [Online] Available at http://sandpaper.bitsaa.org/13_entrepreneurs/showcase.html(Accessed on April 19, 2012) Evan Carmichael. Lesson #3: Keep Flying, [Online] Available at http://www.evancarmichael.com/Famous-Entrepreneurs/592/Keep- Flying-High.html(Accessed on April 19, 2012) Free Enterprise Land. Six Billion Dollar Home based Business, [Online] Available at http://www.freeenterpriseland.com/BOOK/BRANSON.html(Accessed on April 19, 2012) Hyatt, K., 2011. “The Influence of Vision on Perceived Organizational Support,” Kravis Leadership Institute, Leadership Review, vol. 11, pp. 157-170. Ligerakis, M. (2001). The Challenger: Richard Branson, [Online] Available at http://www.bandt.com.au/news/64/0c009764.asp(Accessed on April 19, 2012) Musiz Maniacs., 2012. The Critical Analysis of Virgin Group, [Online] Available at http://musizmaniacs.blogspot.in/2012/03/critical-analysis-of-virgin- group.html(Accessed on April 19, 2012) Sukhiy, I., 2007. Richard Branson, the Founder of Virgin Group, [Online] Available at http://www.good2work.com/article/34(Accessed on April 19, 2012) Stowe School. Sir Richard Branson Returns to Stowe, [Online] Available at www.stowe.co.uk/news-and-events/news-archive/151/sir-richard-branson-returns-to- stowe(Accessed on April 19, 2012) UPX Success. Management and Leadership of Richard Branson at Virgin Group Ltd, [Online] Available at http://www.upxsuccess.com/leadership_richard_branson.html (Accessed on April 19, 2012) Virgin. About Us, [Online] Available at http://www.virgin.com/about-us(Accessed on April 19, 2012) a Read More