Sir Richard Branson: Microsoft 2011 Worldwide Partner Conference

JON ROSKILL: Okay. We’re at an exciting point of WPC 2011. You’re about to hear from one of the greatest business people of our time, Sir Richard Branson. Richard clearly has a very passionate view on business, and the importance of the customer in that vision. Let’s have a look.

(Video segment.)

Ladies and gentlemen, please join me in welcoming Sir Richard Branson. (Applause.)

Good morning. Welcome to WPC 2011. Have a seat.

SIR RICHARD BRANSON: Hello, everybody. (Cheers and applause.)

JON ROSKILL: It’s great to have you here. The partners are super-excited about getting your entrepreneurial perspective on business, some of the things you’ve done. I thought it might be good to start with one of the things you mentioned at the end of the video. You said, screw it, let’s do it. Obviously, that’s got something to do with deciding whether or not you’re going into a business. Tell us a little bit about that.

SIR RICHARD BRANSON: Well, I think that people can analyze things to death, and end up not doing things, whereas if they’d just given it a try, it often doesn’t cost that much money to give it a go; even if they fail, they would have learned something by trying, but sometimes they’ll succeed. And in my life I’ve, I don’t know, maybe started about 400 companies, and most of them, the accountants would have given me lots of good reasons why not to do it. But by just saying, screw it, let’s do it, you know we’ve managed to succeed with more than the ones that we’ve failed.

JON ROSKILL: So, let’s go to the other end of the business life cycle, then. I mean, one of the things that we’ve wrestled with at Microsoft, and I’m sure many partners here have wrestled with as well, is how to make that decision on when to stop investing in a business? How do you know it’s not if I had just stuck with it another six months that it wouldn’t come around?

SIR RICHARD BRANSON: Yes. It’s a very good question. We definitely hang on in there too long on occasions. I think if you do take an approach of trying things, you’ve also got to be quite strict with yourself about cutting your losses when you realize that it’s not working out. And be ready to be quite strict when something isn’t working out, and save the money for the next venture.

JON ROSKILL: Okay. Is there an opportunity to perhaps focus what you’re trying on so that you sort of have it contained enough so that it’s easier to make that decision, do you think about things like that whether you go into a country?

SIR RICHARD BRANSON: I’m a great believer that small is beautiful. So, when we have 100 people running in a company, I will move into the company and say, I want to see the deputy managing director, the deputy sales manager, the marketing manager of that company, and I will then say, all right, you’re now the managing director, the marketing manager, the sales manager of a new company, and we’ll split the company in two.

And so, when we had our record company division, we actually had 20 separate record companies, and 20 separate buildings with 20 different brand names. The people who are running those companies could feel if they were doing well, they could feel that it was their success; and if they were doing badly, okay, they had to do a bit better. I think you can become a big corporation, but you ought to be made up of lots of small corporations, and that’s the best way of getting there.

I think the second thing is that if you’re a managing director, which I think a lot of people around this room are, of the full corporation is, don’t try to cling on and do everything yourself too long. The sooner you can try to find somebody who is better than you to run it on a day-to-day basis, and then step back and start thinking about the next venture, or the next entrepreneurial thing you can do, the better. It will free you up for better family life, but it will also just mean that you’ll free yourself up to think about the bigger picture. And the delegation, being willing to let go is very important.

JON ROSKILL: Okay. You talked about being a champion of the customer as well in the video. Maybe you can give us some advice on how you think about that, and what we should all be thinking about. I know it’s one of the things at Microsoft we try to challenge ourselves on, and we don’t always do as well we would like.

SIR RICHARD BRANSON: Well, first of all, to be champion of the customer, you’ve got to be champion of your own people. And you’ve got to be a great motivator of people, a great leader of people, you’ve got to be looking for the best in your team, never criticizing, and I think that’s essential. I think a well-run company is run by people who feel secure in themselves to be great motivators of people.

And so, once you’ve got a team that is well motivated, then getting every little detail right is critical. I mean, with Virgin Atlantic we started with one aeroplane 25 years ago. We were competing with British Airways with 400 planes, and American Airlines with 600 planes. But the reason that we survived and thrived was, if I was on a plane, I would have a notebook in my pocket, and I would talk to all the passengers, talk to all the staff, take notes. And when we land at the other end, I would go out with the staff for the evening to get drunk with them, but because I was getting drunk with them, I was making sure that anything they said to me that evening, I would write the notes down so the next morning I could remember what they had to say.

And then, the important thing is making sure you pick those things, you get them sorted, so that they don’t fester. And even a big company, I think, I can run themselves like a little company, as long as you get all those little details right.

JON ROSKILL: Okay. Clearly going out and hanging out with the team a bit is the key motivator. And so, I’m sure that that works very well.

SIR RICHARD BRANSON: I think having  I think, again, a lot of the companies here, I think it’s very important that your staff  90 percent of your time you spend at work, and it should be fun. And it’s up to the people running companies to make sure it is fun. And it doesn’t cost much to throw a barbecue, and supply some drinks occasionally, and make sure that your staff has a good time. And going out of your way to make sure that your staff is genuinely enjoying what they’re doing, and it’s not just a chore, is very important.

I think a lot of us need to be a lot more flexible in how we treat our staff. I mean, should somebody wants to go on unpaid leave for a while, welcome it, don’t sort of frown on it. If somebody wants to work from home on Fridays or Mondays, let them work from home Fridays and Mondays. (Applause.) If people want to job share, don’t think of them as being lazy, or if they want to go part-time, don’t think of them as being lazy. The great thing about job sharing or going part-time is that will create more jobs, which will actually help the economy. And actually it’s very good for the company, because people are then doing the things they want to do.

JON ROSKILL: I never thought about it from creating additional jobs, but it’s actually doing that. And clearly, I think people usually make that choice due to some life priority decision. They’re looking at where things are, their priorities in life aligned up with work.

SIR RICHARD BRANSON: Yes, I mean if you just take the women workforce, I mean they’ve got children to bring up and they want to work, but they would like to spend some time with their kids. So, maybe 20 percent of the workforce would love to job share. And they’ll work incredibly hard in the six months they’re working, but they also will be there to bring up their children. So, the next generation hopefully will be that much more balanced, because they’re spending a bit more time with their family.

JON ROSKILL: Sure. So, we’ve got 12,000 partners-plus joining us here. This question came in from a partner in France. Quite broad and general, but what has been one of your biggest life lessons? So, you can go a lot of directions with that.

SIR RICHARD BRANSON: I think it’s going to sound simplistic, but to forgive your enemies. I think life is quite short and the world that we live in is actually quite small. And if you fall out with somebody it will come back and bite you if you don’t try to make up and befriend your enemies. We had a big court case with British Airways where they had launched a dirty tricks campaign to drive us out of business, and we won the court case. And because I had that philosophy, I rang up the chairman of British Airways and invited him over for lunch and we became friends, despite it.

It’s much better in life to befriend your enemies than leave them out there as enemies. And I think the same applies in your personal life. If you have a divorce, or you’ve had a bad fallout with somebody, they might find it quite strange, but ring them up, have them over for lunch or dinner and befriend them. And it will good for you, it will good for them, and it will definitely be good for the children. (Applause.)

JON ROSKILL: All right. So, this one is from a partner in India. Describe how you’ve seen the business environment change over the last 10 to 15 years, and what do you think is in store for us for the next 15 years and how should we prepare?

SIR RICHARD BRANSON: I think the most exciting thing that’s happened on a global basis is places like India growing at 10 percent a year, China growing at 10 percent a year. Africa has fantastic growth, 5-6 percent, South America, some of the countries, 10-12 percent growth, so tremendously exciting times. And for those of us who lived in America and Europe, we got to work harder and we got to go and trade in those countries.

We’ve also are going to have to watch for very high energy prices over the next decade, and I think the more people who can get involved in trying to develop clean energy, it’s incredibly important for the world, because otherwise we could see $200 a barrel. Obviously global warming is a major concern, as well. So, more investment into clean energy for many reasons is going to be very important.

JON ROSKILL: Good. I think we’re probably all supportive of that. I look forward to the day where we’re self-sufficient. (Applause.)

So, this question is from a partner in the Netherlands. Are you planning to use interactive, innovative interactive media in your new Virgin Money Branches, and if so can I give you my business card?

SIR RICHARD BRANSON: I’d be happy to have his business card and the answer is yes, I’m sure we will be.

JON ROSKILL: Okay. Well, that’s Jasper. So, Jasper has put his business card on there. (Cheers and applause.) Make Jasper happy.

All right. So, WPC this year it’s about companies and they’re making big bets as we go through this industry transformation, thinking about going to the cloud. And what we’d like to ask you is, can you share an example of risks you’ve taken making big bets, perhaps different than the airline industry, which we’ve talked about a bit, specifically going out ahead of the industry. The industry seemed like it was going somewhere and you made a bet and went out ahead of it. Who did you seek for advice, where did you look for guidance, anything in that sort of area?

SIR RICHARD BRANSON: Look, I think the important thing, since a lot of the people in this room have got companies, which maybe turn over $15-20 million. The important thing is that yes, you should take bold moves and take bold risks. But, protecting the downside is key. So, try not to make any one move that’s going to destroy the company that you’ve built up.

We went from owning a very successful independent record company into starting an airline, and my fellow directors at the record company thought I needed to see a shrink. And I think my bank manager thought I needed to see a shrink. But, what I did was a deal with Boeing where we could buy one secondhand 747 off of them, but hand it back at the end of the first 12 months if the business didn’t work out. And that meant if I knew that the downside risk was about half the profits of the Virgin record label, and therefore it was acceptable. And since once it started working we ordered a second plane and we let it grow. So, just make sure you protect the downside and don’t mortgage your house too often, which to be perfectly honest I did do on a few occasions.

JON ROSKILL: I’m sure many of you folks here have heard stories of people mortgaging their houses, running the business on credit cards through some of the startup phases. So, you’re talking to the right audience.

SIR RICHARD BRANSON: Somebody like myself, you can lay down the rules, but most rules are there to be broken, and I’ve broken my own rules many times.

JON ROSKILL: Sure, okay. So, Microsoft’s whole business model is about partnering, and that’s at the core of what this conference is about. So this is from a partner in Japan. Describe one of your partnering efforts. What was the secret to that partnership’s success? And what advice would you give this audience to working, to partnering and to winning together, win-win.

SIR RICHARD BRANSON: Well, the Japanese are very good at partnering, I think it’s called a keiretsu in Japan. And for many years, I think, it really helped build Japan as an economy. At Virgin, we have a lot of or most of our ventures we actually have partners. And like a marriage, you’ve got to do your best to try to  in fact, it needs to be more successful than most marriages, actually. But you need to be sure that you’re going to get on with the people, and that you can trust each other, that there’s going to be give and take, and that you both bring something to the party. You’re not going to have one side resenting the fact that the other side is making lots of money, but not bringing anything to the party. But the right kinds of partners, you know, can be invaluable, and it certainly strengthened Virgin as a group of companies.

JON ROSKILL: Very interesting. Actually, specifically as you look at China, and I look at some of the things that I’ve seen partners struggling with partnering in China, what we’ve been struggling with. I don’t know if you have any specific view on or advice on China, you know, as the government is starting to loosen hold on various elements there?

SIR RICHARD BRANSON: Yes. I mean, we haven’t found China that easy. We fly into China with our airline, but we’ve tried to set up partnerships there, and we’ve found it quite tough. I suspect we may well have been at fault in that.

JON ROSKILL: Okay. Well, let’s talk about where the airlines business may be going, and the future holds, and what you’re doing with space travel? Do you want to tell us a little bit about that?

SIR RICHARD BRANSON: Well, it’s one of the most exciting things that we’ve ever done. I mean, that’s sort of getting  the governments are not going to be running, I think, the future of space travel. I think private enterprise is. And I think Virgin Galactic is at the forefront of that. And, a year from now, I’ll be going up with my children into space.

JON ROSKILL: I didn’t realize you were that close.

SIR RICHARD BRANSON: Yes, we’re very, very close. And, I think we can bring the price down over the next decade or two to levels where most people in this room ought to be able to become astronauts. I mean, it’s going to be tremendously exciting. (Cheers and applause.)

And we have got, I don’t know if we’ll show it.

JON ROSKILL: We have a video.

SIR RICHARD BRANSON: We have a video.

JON ROSKILL: That’s a video cue, guys.

SIR RICHARD BRANSON: It’ll give you a taste of where you’re going.

(Video segment.)

JON ROSKILL: I think you got your first 12,000 people ready to sign up here.

SIR RICHARD BRANSON: It’s very exciting. And I think from space travel, you know, I think we’ll be able to put satellite into space at about one-twentieth the price it currently takes to put them into space. And then, obviously, the most exciting thing, I suspect, will be intercontinental travel. I came from Australia this morning, and it took me 18 hours. And hopefully we’ll be able to do that in about three hours within 20 years or so. (Cheers and applause.)

JON ROSKILL: Yes, it’s amazing. A lot of partners came from a long way away. I was talking to a partner from the South African and the Ghana partners, and it was two days to get here.

SIR RICHARD BRANSON: Well, I’m off to South Africa tomorrow, and I just love Africa. (Cheers and applause.)

JON ROSKILL: There you go.

SIR RICHARD BRANSON: We’ve got a few Africans.

JON ROSKILL: That’s a good segue to shift gears. Let’s talk a little bit about some of the philanthropic and charitable work that you’re involved with. Tell us a little bit about how you got started, and what suggestions you might give you members in the audience who want to get involved in that kind of effort.

SIR RICHARD BRANSON: Well, I think when you start a business the only thing that really matters is survival. You shouldn’t have to worry about trying to rescue and sort out other people’s lives, just make sure that you can make your business survive. Once you’ve gotten past the survival stage, then I think we can’t  in the past people left it up to politicians, and social workers to sort out the problems of the world, and businesses just created jobs and the wealth. I think now, what a lot of good business leaders have realized is that all businesses must become a force for good. And small businesses can be a force for good in their local area, bigger businesses nationally, and even bigger businesses internationally, because enormous wealth can come with being a successful business leader. And, therefore, enormous responsibility goes with that wealth.

At Virgin, you know, we use our entrepreneurial skills to look at some of the seemingly intractable problems in the world, and see if we can tackle them differently than they’ve been tackled. So, conflicts in the world, and there haven’t really been really good conflict organizations going in to resolve conflicts.

JON ROSKILL: I know you’re involved in this area, tell us a little about some of the things you’re doing.

SIR RICHARD BRANSON: We set up an organization called The Elders, which is headed up by Nelson Mandela, Archbishop Tutu and Kofi Annan, and they will go into conflict areas, and try to knock heads together. There’s 12 wonderful men and women, and they’ve had some considerable successes over the last couple of years. And we run it just like we’d run a company, so we find a chief executive to run it. We set up the organization. We make sure it’s properly funded. And then we leave them to get on and run it.

In Africa, we’re setting up a Center for Disease Control. Bizarrely, Africa doesn’t actually have a Center for Disease Control. And so, again, using our entrepreneurial skills to look at how it can be run better than it’s been run to date.

JON ROSKILL: So, Africa, there’s an incredible future for the continents and the countries there.

Seriously, this one came in from a partner in Italy. If you could meet and have dinner with any three people living or dead, who would they be?

SIR RICHARD BRANSON: Right. Let’s see. A serious one, well, I’m an explorer, I love an adventure, so I would love to meet somebody like Sir Francis Drake from the past. I would love to meet Jesus Christ, or one of the  (applause)  and some of the religious leaders of the past, and try to get them to explain to some people who run governments today that they didn’t mean certain things that governments are saying they meant. (Cheers and applause.) And then, I think, Cleopatra would be quite nice as well. (Applause.)

JON ROSKILL: All right. Well, this one follows that one pretty well. This is from a partner down in Latin America and Costa Rica. Share with us three hobbies that you have that most people don’t know about.

SIR RICHARD BRANSON: Well, I love kite surfing. (Applause.) I’ve spent quite a lot of time trying to protect animal species that are endangered, and in fact I’m flying from here to Mexico to swim with the whale sharks. And sharks through shark finning is  by the way, please, nobody should eat shark fin soup, because the sharks are being decimated at the moment. (Applause.) And what other hobbies, I love playing tennis and things like that, that’s not a  I just love keeping fit and healthy.

JON ROSKILL: Okay. So, let’s rewind a little bit. Let’s go back to more of the start of your career. Let’s talk a little bit about the music business, and how you got into that, and tell us a funny story about Johnny Rotten and Sid Vicious. I loved the Sex Pistols growing up.

SIR RICHARD BRANSON: Well, we put out an album called “Never Mind the Bollocks, Here are the Sex Pistols,” which is their first album. (Applause.) And since you wanted a funny story, the police decided to arrest us because they said the word “bollocks” was rude. And so, my barrister, or solicitor said, you know, ring up the local university where we were bring prosecuted, and talk to the linguistics professor and say what he says the word “bollocks” means. And so, I rang up and was put through to the professor of linguistics, and he said, you know, what a load of rubbish. He said, the word bollocks was a nickname given to priests in the 18th century. And, the album doesn’t mean never mind the balls, here are the Sex Pistols. It means, never mind the priests, or never mind the rubbish the priest talk, here are the Sex Pistols. So, I asked him if he could come to court and say it, and he said yes. And then he said, I happen to be a priest myself, would you like me to wear my dog collar? (Laughter.) So, I think the judge reluctantly found us not guilty.

JON ROSKILL: Okay. Well, good, that’s a great story. So, as you started and then sort of built up, were there logical kind of tiers or steps that happened through the music business, and early in that part of your life?

SIR RICHARD BRANSON: I never thought of myself as being a business person, and I think most successful people in life do not set out to become business people. They set out to create things. So, the first venture I set up was a magazine to campaign against the Vietnamese War. And the business aspect was there to make sure my magazine survived. The reason I went into the record business was because I came across a musician called Mike Oldfield who nobody else would put out his music. So, we put out his music, and people liked it. And we continued to sign artists that we liked.

But in the business, I think the most successful people in this room will be people who think, how can I make a real difference in other people’s lives, and we’ll worry about whether the bills add up at the end of the year. And that’s really what I’ve been doing throughout my life is creating and seeing situations where I feel people are not  here in America, for instance, flying domestic airlines in the States has been diabolical for the last 30 years.

JON ROSKILL: It’s gotten worse. (Applause.)

SIR RICHARD BRANSON: And so we started a little airline to try to make a difference, and those are generally the most successful businesses.

JON ROSKILL: All right. Well, let me wrap up with one area that I bet you have some interesting insight on, I think it’s very core to how you operate, which is about brand and branding, and the protection of that, and the treatment of that is, I know, something that these folks think a lot about, any insight into that.

SIR RICHARD BRANSON: Well, your reputation is all you have in life. So, your personal reputation, and the reputation of your brand. And, you know, if you do anything, anything that damages that reputation, you can destroy your company. I mean, in the UK right now 

JON ROSKILL: Yes, world news.

SIR RICHARD BRANSON: — News International are on their knees, and you could argue they should have been on their knees years ago, because they’ve lived, quite, the way they run some of their newspapers and so on has been quite questionable for a long time. But, they are certainly getting their comeuppance now, and it’s going to be very difficult for that brand to ever recover. And the knock-on effects on their other  even their other unbranded product, like Sky, or some of their other interests around the world will be considerable. So, the important thing is, make sure you wake up every morning knowing that you’ve behaved in an ethical manner, and that whatever story you read in the newspaper the next day, you’re never going to feel uncomfortable about it.

JON ROSKILL: Okay. Well, Richard, fantastic. We appreciate it. I know you have to take off and fly to South Africa, so thank you very much for sharing. (Cheers and applause.)