Bransons Implementation of Change - Assignment Example

?Sir Richard Branson Background Branson was born in 1950, and educated at Stowe school, where he started his entrepreneurial ideas, and was later to start Virgin as a mail order retailer in Oxford Street London (Bhide, 2000). Sir Richard Branson started his life as a middle class boy who was getting poor grades due to his dyslexia condition (Grant, 2005 & Nelson & Quick 2007). Upset by his performance rate, he started engaging in business venture through publication of a magazine, the student, in school at the age of sixteen. He managed to sell volumes of magazines enabling him to raise enough money to start a mail-order company (Branson, 2009). With the mail-order being a success, Branson used the money earned from this company to buy a record store and to leverage it into a chain (Branson, 2009). Over time, he has managed to add 360 acquisitions to Virgin Music Group including airlines, trains, books, healthcare, wines, comics, fitness clubs, financial services and space travel among others (Bowerman & Wart, 2011). One major reason behind the success of Virgin group of companies is Branson’s unique leadership, charisma and effective timing (Fox, 2004). These qualities have enabled him to anticipate, and manage change effectively in his business empire. Though he is remarkably reserved and shy in person (Fox, 2004), Branson has the ability to change failures to his advantage, which enables him to gain publicity (Fabrikant, 1997). This daring nature has being the motivation behind his successful empire. Implementation of change Branson’s effective implementation of change can be illustrated by Kotter’s eight steps change model. As the virgin empire started to expand in 1990s, Virgin megastores, and Virgin Records were doing well (Grant, 2005). However, Virgin Atlantic was not doing well, and it needed huge investments in order to break from being a small time operator to medium sized carrier (Branson, 2002); which is in accordance with Kotter’s model that requires establishment of a sense of contingence to affect change (Sabri, Gupta & Beitler, 2007). According to Grant (2005), Branson’s ingenious ideas to wade through these circumstances were to float the company, and raise the required expansion capital via the city and shareholders. However, immediately after this decision, it became apparent to Branson that this decision was at odds with the kinds of risks shareholders were prepared to stand (Grant, 2005). Surprisingly, in creating a guiding coalition in accordance with Kotter’s change model, Branson decided to sell Virgin records, and bought back Virgin Atlantic. It was through such strategic decisions that Virgin Atlantic has become a successful business empire today. Branson approach in his career is that of influence, and has the ability to create a common purpose among his followers; his approach is to make people achieve things that they did not know they had the ability to achieve (Daft, 2002). Therefore, Branson develops a vision and strategy to implement the specific changes, and communicates the same to his employees; these are among the steps in Kotter’s change model (Sabri, Gupta & Beitler, 2007). He establishes the change, creates the guiding principles, develops the vision and the strategies to lead to the required change, or to attain his goals. Usually, every organizational change has a range of consequences, and one of the consequences of floatation of Virgin Atlantic was change in internal environment, and an organizational culture in which employees have to thrive in (Cox, 2009). One of the remarkable cultural changes under Branson was making employees to have decentralized chains of commands, in ensuring that they are not answerable to one leader. Empowering employees for action is one of the steps in Kotter’s change model (Sabri, Gupta & Beitler, 2007). Branson in his organizational culture ensured employees were answerable to shareholders (Grant, 2005). Grant further noted that Richard Branson’s principles and approach to handling change enables transitions to take place effectively, and the changes are integrated in the organizational culture. Kotter’s change model emphasizes on such actions aimed at integrated change into organizational culture (Sabri, Gupta & Beitler, 2007). To make these changes effective and acceptable, Branson discusses the imminent changes with his employees, and ensures that every person in the organization makes a decision to implement the changes; as a way to communicate the changes in the organization (Grant, 2005). He expresses employees his vision, and the expected outcome of the transition; the employees have the autonomy to act as shareholders in the company to achieve these results; this amounts to empowering employees, in line with Kotter’s change model. According to Grant (2005) employees through such culture eventually embrace the changes, and contribute in defining the most effective and efficient path for accomplishing results. Branson in his strategies demonstrates that relationship dynamics, and thought processes are the fundamental requirements if change has to be successful. He understands that employees may fear change; they can embrace it, and build quality in their work as a matter of obtaining personal pride, when given freedom to do so. Branson in this case acts within the seventh step in Kotter’s change model, which requires consolidation of gained changes to lead to more changes in the organization (Sabri, Gupta & Beitler, 2007). The more inputs employees have to make in defining the change that will affect their work, the more they take ownership of the end results. Thus, generally, Branson focus on changing individuals first, with systems integrating automatically to correspond to the implemented changes (Grant, 2005). One of his approaches in such leadership approach is to offer incentives to the senior staff in terms of autonomy and trust in his established business, and offering them shareholding in the business venture to encourage them to contribute to the success of any new venture (Branson, 2002). Such incentives amount to generating short-term wins, in that they encourage employees to perform to their best form the benefit of the organization, which is emphasized under Kotter’s change model (Sabri, Gupta & Beitler, 2007). To ensure consistency and sustainability of change in the organization, Branson utilizes the last step in Kotter’s change model, in anchoring the culture of change, and innovation in the organization. This has been Branson’s competitive strategy in the competitive market, which has led to the rapid growth of his business empire. The virgin Atlantic Virgin Atlantic is a success story in business empires today that was initiated form a rather casual and unbelievable idea; characteristic of a business mogul who peeps at opportunities, and to exploits to his advantage. Having suffered immensely in the 1972-1982 recession, that saw Virgin struggling, and some of its top management selling off their stakes, Branson needed a quick and more appropriate solution to diverse his interests (Grant, 2004). The idea of starting an air carrier was initiated by Randolph Fields, a Californian lawyer who proposed to Branson the idea of initiating a transatlantic, low price airline. Though he was skeptical at first, Branson’s executive and manger sin Virgin records were surprised, and horrified by the seriousness in which Branson took the idea, and in 1984, June 24 “Branson appeared in a World War I flying outfit in celebrating the inaugural flight of Virgin Atlantic in a second hand Boeing 747, sourced from Aerolinas, Argentina” (Grant, 2004). Branson was at cross roads; unlike his other businesses, he ventured in a field that required completely different expertise and skills, and the need to be in close negotiations with governments, banks and aircraft manufacturers. These are the kind of thrilling ideas that excite Branson in his businesses (Branson, 2009). By 1985, cut throat price wars emerged in transatlantic airfares, and the huge investments in the new venture had created serious credit squeeze for Virgin (Grant, 2004). Branson only option in this was to expand the equity base of the group. This was an idea shared by his right hand, and trusted managing director, Don Cruikshank, a Scottish Accountant with an MBA from Manchester (Grant, 2004). His unique leadership style, and with the help of highly experienced staff concluded on offering the Virgin’s music retail business under the Virgin Group Inc for public offering, with 35% of stocks listed on NASDAQ and London stock markets (Grant, 2004). The stock listing resulted to conflicts between Branson as a manger of a public corporation, and Branson, an entrepreneur with unique business style. Branson therefore took advantage of the 1987 stock market crash to buy out external shareholders to ensure advancement of his entrepreneurial ideas in Virgin Atlantic airways. It is this private management of Virgin Airways that saw the company expands rapidly to acquire gates and slots at Heathrow Airport, including expanding to 20 new cities. Virgin Airways in order to wade through fierce competition especially in the transatlantic route; the aim of the air company was one: “To provide the highest quality innovative services, and excellent value for money for all classes of air travelers” (Virgin Atlantic, n.d). Branson analyzed why other similar ventures such as Freddie Laker’s Skytrain, which had competed with other major airlines by offering low prices at basic classes had failed in the route. To Branson, the answer behind the woes of other smaller companies in this route was when the major airlines reduced their prices; smaller companies were driven out of the market, as this was their only competitive advantage in this route. To avoid similar setbacks, Branson undertook to ensure Virgin Atlantic offered added value in superior services at very competitive prices, while concentrating on several lucrative routes (Thompson & Martin, 2010). This was the vision and requisite impulse behind Virgin Atlantic success story. To ensure the vision was attained, Branson leased several Boeing 747 jumbo jets to take on the competitive routes, and had more detailed planning in recruiting highly trained and experienced personnel in the air travel industry, and rewarding them handsomely. These strategies made Branson to take on large companies such as British Airways, and taking other leading airline companies by surprise (Thompson & Martin, 2010). The creation of superior and quality services that offer value to customers has been the strategy behind the current rapid growth of Virgin Atlantic. For example, in 2004 Branson licensed the Spaceshipone- which is a private manned spacecraft under the Virgin galactic, targeting super wealthy clients who would like to have a trip to space as tourists. It is the quality, value for money, innovation, and an element of fun aspects that have been behind Virgin Atlantic rapid growth under Branson (Thompson & Martin, 2010). Moreover, the company in 2007 ordered fifteen 787-9 Dreamliners, the most technologically advanced Boeing air carriers, with 26 others pending; in addition to six A380 aircrafts to be delivered in 2013. These exceptional fleets are aimed at offering value for money, in quality services as the leading strategy in Virgin Atlantic. For change to be effective in any organization, the ability to adapt, flexibility, and responsiveness are essential qualities that employees in such organizations have to embrace. The current global market environment demands vigilant leaders, and operational excellence in all areas. Branson is a perfect example of leaders who initiate changes that result to more profound changes, with great vision and inner power to succeed where others have never imagined. Branson demonstrates that change is what is in a manager’s mind, and has to be embraced and effected by all members in an organization. Branson provides rare leadership in the business world, resulting to instrumental changes, which act as benchmarks in the global market. Reference Bhide, A.V., 2000. The origin and evolution of new Businesses. London: Oxford University Press. Bowerman, K. D. & Wart, M. V., 2011. The Business of Leadership: An Introduction, M.E. Sharpe, New York New York Branson, R., 2002. Losing my virginity. Melbourne: Random House. Branson, R., 2009. Business stripped bare: Adventures of a global entrepreneur. London: Penguin. Cox-Hynd, P., 2009. Change by choice - The Art of managing change, Academy press'' Draft, R.L., 2002. The leadership experience 2nd ed. Harcout: Harcourt College Publishers. Fox, C., 2004. Richard Branson: The reluctant Guru. Australian Financial Review. (Boss), pp 20-24. Frabrikant, G., 1997, June 1. Of all that he sells, he sells himself best. New York Times. Available at http://www.nytimes.com/1997/06/01/business/of-all-that-he-sells-he-sells-himself-best.html [accessed 28th Feb. 2012]. Grant, M.R., 2004. Richard Branson and the Virgin group of companies in 2004. London: Blackwell Publishing. Grant, R. M., 2005. Richard Branson and the Virgin Group of companies in 2004, Available at http://www.blackwellpublishing.com/grant/docs/15Virgin.pdf, [accessed 28th Feb. 2012]. Nelson, D. L. & Quick, J. C., 2007. Understanding Organizational Behavior: MA: Cengage Learning EMEA, Mason Sabri, E.H., Gupta. A.P., Beitler, A., 2007. Purchase order management best practices: Process, technology, and change management. FL: J. Ross Thompson, J., & Martin F., 2010. Strategic management, 6th ed. Hampshire: Cengage Learning Virgin Atlantic Airways, n.d. Company Information. Available at http://www.virgin-atlantic.com/tridion/images/factsheetcompanyoverview_tcm4-426059.pdf [accessed 28th Feb. 2012]. Read More