Richard Branson offers staff autonomy over vacation times and duration. Simples?

October 3, 2014


Richard Branson has announced a revolutionary self-managed policy for his personal staff. At first sight it seems a step towards the idealistic dream of worker autonomy and self-managed work groups. So let’s look a little more closely at the emerging story

This week [september 24th, 2014], Richard Branson was reported as announcing a new policy for his 170 personal staff. They are to have full rights to setting vacations [‘holidays’ or ‘leave periods’ in British vernacular].

Empowerment

‘Empowerment’ of workers has been a theme in OB courses and popular leadership writing for a few decades. This seems to be a further example, with the added weight provided by the authority of Richard Branson.

The basic principle is easy to grasp. The notion has libertarian and emancipatory aspects to it. So what’s not to like about it? And why have such initiatives been the target of Critical Theorists who have tended to dismiss it as a managerial fad?

Behind the headlines

Branson hopes the plan will be rolled out to subsidiary divisions. He has been reported as being influenced by his daughter who told him of a similar scheme at Netflix. The back story begins to take shape.

As one admiring report put it, Billionaire Richard Branson may be the coolest boss ever.

Two ‘maps’ of the story

One perspective is to interpret the story as an example of subtle exercise of power masquerading as enlightened leadership. The scheme is at present on offer to the 170 personal staff of Richard Branson. In his own words, the workers have obligations to act in the corporate interest so as not to damage the company or theirs own careers. The benevolence conceals the power structure on organizational life. The majority of employees are not directly influenced.

Another perspective is to consider Branson to be an authentic leader whose moral compass is towards a happy and autonomous work force. He avoids the dilemma of enforcing democracy by inviting change rather ordering it. He shares a generally non-coercive style with some of the most successful modern entrepreneurs such as Facebook’s Mark Zuckerberg who have built creative organizations

Oh, and one more thing …

The story breaks as the engaging fun-loving Branson is launching his new book. The Virgin Way: Everything I know about leadership.

Simples?


First Group plans derailed by shareholder activists

May 25, 2013

First GroupThe First Group transport company has run into difficulties compounded by the loss of a Government contract after a battle with Richard Branson, and board room resignations influenced by shareholder activists

LWD subscribers were alerted to a leadership story at First Group the bus and rail transport outfit last year [Oct 2012] . The post noted that

Richard Branson called foul when his company Virgin Trains lost the franchise recently for the West Coast Main Line services from Scotland to London. His reaction was justified when the Department of Transport was forced to admit there had been flaws in the bidding process.

Virgin Trains has run the West Coast Main Line since 1997. When it recently lost its bid to renew the contract to rival operator FirstGroup, it claimed the evaluation was flawed, called for a review, and started court proceedings over the government’s decision.

On 3rd October 2012, Government ministers announced that there were “significant technical flaws” in the way the risks for each bid were calculated, justified the legal case that Branson had brought against the decision.

The fun fighter

Richard Branson, for all his business is fun image is not a stranger to fighting his case through the courts. His success contributed to problems building up for First Group.

Difficulties pile up for First Group

This week [May 2013] First Group is shown to have encountered further difficulties after the hole in its financial plans resulting from the loss of the contract. The Guardian reports

FirstGroup, the train and bus operator, has turned to shareholders for £615m, scrapped a final dividend and parted company with its chairman in an effort to reduce its debts and avoid a credit rating downgrade.

The shares fell 30% after the cash call was announced alongside a sharp fall in full-year profits at the company which employs 120,000 people. It is struggling with almost £2bn of debt largely as a result of its acquisition of the US bus company Laidlaw in 2007. The company came under further pressure last year when the government announced in August that it had won a lucrative contract to run the west coast main line rail franchise between London and Scotland, only to scrap the decision in October citing flaws in the bidding process.

Shareholder activists

Other reports suggest that shareholders have played an important part in “encouraging ” the company to take major actions to deal with its problems.

FirstGroup’s problems finally caught up with it [on Monday 13th May 2013] . Its CEO, Tim O’Toole, had repeatedly denied that FirstGroup needed to raise capital. But, with the credit rating agencies threatening to downgrade the company’s debt to junk, it launched a humiliating three-for-two rights issue to raise £615m. It was priced at a 62 per cent discount to the prevailing share price. Shareholders were also introduced to a “new progressive dividend policy”, otherwise known as no final dividend this year and a slashed pay out from next. The shares fell 68.2 to 155.6p.
For this, someone had to pay the price. And, after 27 years at the wheel, it was Chairman Martin Gilbert, ushered off the clattering train by shareholders keen to make a clean break with the past. It was either him or O’Toole – and at least the American-born former London Underground boss had the excuse of only having been at the controls since April 2011.

A similar shareholder spring-cleaning is underway at J P Morgan.


On the week of the School Massacre in Connecticut we ask “where have all the leaders gone”

December 21, 2012

Last week ended with news of the Sandy Hook School massacre in Newtown Connecticut and President Obama’s public agony at failures in America to protect the nation’s childrenSandy Hook School Sign

Before the dreadful week-end news, I had been scanning the net to see what leadership stories I could find. These notes are in chronological order.

Leadership training

The first item I came across was a promotional ebook from a successful experiential leadership programme at the Said Business School, Oxford . The approach offers an imaginative mix of experiences involving drama, moral philosophy, music and poetry. The book [53 pages] is worth browsing by leadership trainers.

HSBC money laundering

The next item that caught my eye was the settlement of the money-laundering charges at HSBC. The bank has agreed a $1.9 billion fine with the US Department of Justice over anti-compliance regulations.

“We accept responsibility for our past mistakes. We have said we are profoundly sorry for them, and we do so again,” said Chief Executive Stuart Gulliver in a statement.

Branson Brand Bashing

The next story had a familiar feel, with cult business hero Richard Branson defending his Virgin Atlantic business from a bit of turbulence (Sorry. That cliché is almost compulsory). And alongside Sir Richard we have the egregious Willie Walsh, now fighting his corner from chief executive International Airlines Group (IAG) which now incorporates British Airways.

Sir Richard Branson pledged to keep control of his airline after his arch-rival, BA chief Willie Walsh, said that Singapore Airlines’ sale of its [49%] stake in Virgin Atlantic would lead to the demise of the brand.

From China with Love

Now that’s more like it. A full-on profile of China’s new leader as Xi Jinping, the new head of the Communist Party, made a visit over the weekend to the special economic zone of Shenzhen. The south China province has stood as a symbol of the nation’s embrace of a state-led form of capitalism since its growth over three decades from a fishing enclave to an industrial metropolis.

After Mandela

One of the all-time great leaders, Nelson Mandela, is hospitalized [later he was successfully operated on for Gall Stones]. The news comes at a time when the ruling ANC party in South Africa is engaged in further leadership struggles.

The Glass Ceiling in Oz

The Glass Ceiling has not yet been shattered in Australia, despite the influence of the mighty Rupert Murdoch and residual members of his dynasty.

Starbucks

The tax row in the UK continues to hit at Starbucks image, and perhaps its profits

Japan’s shift of leader

The Liberal Party [LPD]’s massive victory in Japan will re-elect former Prime Minister Shinzo Abe who has called for major monetary easing, an increase in the inflation target and big spending on public works to rescue the economy.

Sandy Hook School Massacre

The Sandy Hook massacre in Connecticut http://uk.reuters.com/article/2012/12/15/uk-usa-shooting-connecticut-idUKBRE8BD0Z220121215 contributed to the sense that political leaders have to deal with forces beyond their powers to deal with. There are calls in America for tighter gun control legislation, but few commentators believe that President Obama will be able to introduce meaningful change.

Reflection

Before the New Town Massacre, I was impressed by the number of encouraging stories in the news about leaders and leadership challenges. There are still positive leadership stories around, and the leader vilification count was rather lower than I expected. Indeed there were quite a few stories offering accounts of positive leadership. However, the end-of-week news takes us back to a more nuanced views of distributed power and leadership’s struggles, rather than stories of heroic leaders with the skills to deliver transformation through a compelling vision of change.


Richard Branson Beats Government Bungling over the West Coast Rail Contract

October 3, 2012

220px-richardbranson.jpgRichard Branson called foul when his company Virgin Trains lost the franchise recently for the West Coast Main Line services from Scotland to London. His reaction was justified when the Department of Transport was forced to admit there had been flaws in the bidding process

Virgin Trains has run the West Coast Main Line since 1997. When it recently lost its bid to renew the contract to rival operator FirstGroup, it claimed the evaluation was flawed, called for a review, and started court proceedings over the government’s decision.

Flaws in the risk assessment

On 3rd October 2012, Government ministers announced that there were “significant technical flaws” in the way the risks for each bid were calculated, justified the legal case that Branson had brought against the decision.

Charismatic leadership is not quite dead

LWD has been cataloguing examples of the dark side of leadership and the retreat of the status of charismatic leaders. Richard Branson continues to stand as a contrary example through inspirational and dynamic efforts. When tested after a rare rail accident in February 2007 which left one passenger dead and several dozen injured, he acted decisively, effectively and with empathy for those affected.

To be continued

Acknowledgement

To Susan Moger for her rapid response in reporting this breaking news to LWD.


Does Simon Cowell lack the X Factor? Seven Questions for Students of Leadership

December 29, 2011

Simon Cowell

Here’s a test which may be fun to try out on your under-graduate business students. Even if the challenge is too easy for discerning subscribers to Leaders We Deserve, you may like to pose it to a family member or friend

At very least it could add to one of those discussions around the TV beginning ‘That Simon Cowell might think he’s smart but…’

A Management Today article

Management Today helped themselves to this piece of marketing from a news agency.

IFF Research, which has sent the following over to us. According to the findings of its SME [Small Medium enterprize] Omnibus, just 5% of small business owners would choose Simon Cowell to be a consultant to their business.

Beard enthusiast Richard Branson raised few eyebrows by topping the list of the most desirable celebrity business consultant, with 34% opting for him – while 30% said they’d prefer the no-nonsense ministrations of professional finger pointer Lord Alan Sugar. Below them came Mary ‘Queen of Shops’ Portas, whose recent attempts to save the high street don’t seem to have garnered much love from business owners (she only got 5% of the vote), and Karren Brady who with another 5% of votes, is clearly getting into her role as Sugar’s sidekick on the Apprentice. Bringing up the rear were Cowell, who obviously doesn’t have the X Factor when it comes to popularity contests, and ‘city superwoman’ Nicola Horlick, with just 1%.

What’s slightly depressing is that just 20% of business owners picked women – even though Brady (for example) became the youngest-ever managing director of a UK plc at the age of just 23, while, having juggled six children and the running of an investment fund, Horlick could certainly show Branson a thing or two when it comes to multi-tasking. Sugar, on the other hand, has managed to build a reputation on crushing the hopes of young business wannabes. Which suggests, as IFF MD Mark Speed points out, that ‘there is more to be done if women are to be on an equal footing with men’.

The Leadership Challenge

The piece got me thinking about why the survey was carried out, and whether the results have much credibility. The best use for it I could think of was a way of encouraging ‘map-testing’ for students. So here’s my undergraduate test based on the news item.

Test the credibility of the survey along the following lines:

[1] What choices do you think were offered to the respondents to the survey?
[2] What proportion of respondents do you think were women?
[3] How might the answer to [2] influence the survey results?
[4] What proportions of respondents might have heard of each of the various candidates evaluated?
[5] How might the answer to [4] influence the survey results?
[6] What might explain Richard Branson’s popularity?
[7] Why might IFF Research have carried out this survey


“Pat Riley and Sir Alex Ferguson couldn’t make it, but we are fortunate to have with us tonight instead…”

July 24, 2011

It is every speaker’s nightmare. To be introduced to a disappointed audience as a substitute for an advertised celebrity. Worse, to step in for two advertised celebrities…

It had been a piece of accidental viral advertising. The plan had been to advertise a low-key event for Miami business people to learn about the Manchester Business School’s new programs there. To make the event more interesting, it had been suggested that the presentation should look at local hero Pat Riley, legendary coach of the Basketball team Miami Heat.

My counter-suggestion was that I would be better able to talk about Sir Alex Ferguson of Manchester United, a leader about whom I knew rather more. Eventually a creative compromise was reached, and the topic would be announced around the leader styles of both of the two great sporting figures.

Enquiries flood in

Somehow, the media picked up on the event as publicizing Manchester United’s summer tour to America rather than Manchester Business School’s tour of Miami. The MBS Miami center office started getting enquiries which turned into a flood.

Great marketing?

Maybe. Although an audience of disappointed basketball and soccer fans was not quite what the organizers were hoping for.

Here comes the substitute, to boos from the crowd

You couldn’t say that I saw what had happened as my great opportunity to come off the substitute’s bench and win over the crowd. It sounded too close to an earlier event I had been involved in. I can still picture the scene. It is of an after-dinner audience expecting to listen to Richard Branson’s thoughts about leadership. The chairman broke the news of a change of speaker:
“Ladies and gentlemen, Richard Branson could not be here this evening. But I’m sure you agree that we are fortunate instead to be able to listen to (consults notes) to our speaker (couldn’t find my name) who has agreed to step in at this late moment…” The audience did not seem to agree with the chairman. They looked palpably unenthused with the proposed substitute for Sir Richard. It was looking as if the chairman and myself were rated public enemies Nos 1 and 2.

I would like to say I won over that audience some years ago with a brilliant display of knowledge, wit and charm. But some merciful defense mechanism has blotted much of what happened from my memory banks. I can only recall the final flutter of applause, perhaps because I delivered on one promise, to be brief.

Time to fess up

Meanwhile back in Miami, the organizers had been frantically battling to deal with expectations, without wiping out the audience entirely. Maybe, I thought gloomily, I could fess up and tell the story about the time I stepped in for Richard Branson…

And remember what Pat Riley said: “You have no choices about how you lose, but you do have a choice about how you come back and prepare to win again.”

What happened next?

Maybe, just maybe, I will report what happened next in a future post.


How weird are entrepreneurs?

November 17, 2008
Richard Branson

Richard Branson

The heroic entrepreneur has been the subject of much managerial myth-making. A recent study seems to be perpetrating the myth. But how weird are entrepreneurs? How much confidence should be placed in the research results?

An article in Nature this month examined the nerological differences between smallish samples of entepreneurs and general managers. I am looking more carefully at the article, which was by a team of scientists from the University of Cambridge. But already, the story has grabbed the popular headlines. Here is a synopsis of it:

The article, published in the journal Nature, asserts that entrepreneurs are riskier decision-makers than their managerial counterparts. Additionally, the type of decision-making essential to the entrepreneurial process may be possible to teach or enhanced in the future by pharmaceuticals.

Psychological and biomedical research has traditionally considered risk-taking as an abnormal expression of behaviour, as exemplified by its association with substance abuse and bipolar disorder. However, the Cambridge research, which was funded by the Wellcome Trust and the Medical Research Council, found that entrepreneurs represent an example of highly adaptive risk-taking behaviour which can result in positive outcomes during stressful economic circumstances. This ‘functional impulsivity’, the ability to make quick decisions under stress, may have evolutionary value as a means of seizing opportunities in a rapidly-changing environment.

So far so good

The results may pass down into the folklore of social psychology for one very powerful reason. They appear to confiem what many researchers already believed or suspected. That entrepreneurs are different, and that the difference has ‘something to do with’ the sort of risks that entrepreneurs take. Also, work going back many years indentified stronger N-ach (need for achievement) among groups of entrepreneurs.

But let’s not get too excited

The textbooks already tell us that entrepreneurs are risk-takers. If I remember the basic literature, they turn out to be moderately risk inclined, with more than average inclination to take risks, but in general, this is mediated with a grasp of reality. They ‘back the house’ in a way that is not utterly reckless (hardly surprising. The Cambridge study discusses the survival benefits of such behaviors, which is also not particularly surprising).

My own take on the research is that the entrepreneurial process requires a broader modelling than anything which can be detected ‘in the brain waves’.

More important are the implications of the research. There is already discussion around whether a pill could be invented to ‘help’ more people become entrepreneurial. I’ll leave that to another time. But remember that the entrepreneurial spirit, like the creative spirit, is a mischievous critter. Perhaps a pill to damp down the irrational exuberance of financial entrepreneurs might also be considered.