Entrepreneurs in Action: Sir Richard Branson - Essay Example

Entrepreneurs in Action: A Case Study of Sir Richard Branson Richard Branson is a British entrepreneur and CEO and founder of Virgin Group of Companies. He has business interests in diverse industries ranging from music, railway travel, air travel, wireless communication, beverage industry, alcohol production, and even space tourism among other ventures. His autobiography, Losing My Virginity, has been a bestseller since its release in 1998. This paper seeks to study his business methods with special emphasis on entrepreneurial sources in finance, supporting structures and entrepreneurial innovation. Entrepreneurial Resources Entrepreneurial resources include financial resources, infrastructure, people resources, physical assets, individual resources, organizational resources, knowledge and imagination. Sir Branson’s first business venture was The Student Magazine whose first issue was published on 26th January 1968 (Branson, 2011). His first business branded with the Virgin name was a mail order delivery firm in 1969. In 1984, Sir Branson founded Virgin Atlantic Airways which was soon thereafter listed on the London Stock Exchange. Aside from these, Sir Branson has invested in the soft drink industry, retail chains, bio-fuel industry, and financial services among other business endeavors. Financial Resources As a self-made billionaire, Sir Richard Branson had very little to start his first venture. However, the sustained successes of his business ventures have enabled him to find financial resources for expansion. The first edition of The Student Magazine had 50,000 copies disseminated free of charge. This was made possible because of the sales made in advertising that amounted to more than $8,000 (Gordon, 2009:175-198). The mail order company was initially set up to fund the magazine. However, the returns made it possible for Richard Branson to open a record shop on Oxford Street in London. The record shop became a success and led to the building of a recording studio in Oxfordshire in 1972. The Virgin Records’ first signing, Mike Oldfield, recorded a hit single, “Tubular Bells” that stayed on the UK charts for 247 weeks. This led to other famous signings that included The Rolling Stones and Sex Pistols and Virgin becoming one of the top recording labels in the world. Profits from the recording business soared and Richard Branson expanded to Air travel with the Voyager Group in 1980 and Virgin Atlantic in 1984. He also founded other recording firms; V2, Megastores, and Virgin Radio. The Virgin Group of Companies currently has over 200 companies spread in all the continents covering over 30 countries. Individual Resources Richard Branson has shown many individual resources that have benefitted him and the whole Virgin Group in entrepreneurship and business. These individual resources include charismatic and instrumental roles (Wustenhagen, 2008:221-248). In charismatic roles, he has been proficient in envisioning the group’s future, empowering those he works with, and energizing employees. In his instrumental role, he has set structures and systems that encourage innovation, high productivity, and employee and customer satisfaction. In his structuring of the group, he has a policy of splitting up any company if the employee numbers exceed 100. As a charismatic leader, he gives autonomy to all companies and empowers all directors to make critical decisions. He encourages new ideas and innovation in all levels of staff. His charisma is most visible during publicity campaigns and advertising where he fully involves himself and features in them. His charismatic leadership encourages informal communication channels that set everyone at ease. Human Resources and Support Sir Richard Branson did not make it as far as he has by himself. The Virgin Group currently has a working capital of billions of dollars. This was not always the case. As a self-made billionaire, Richard Branson started from very humble beginnings. His first venture, The Student Magazine, was a joint venture with other students who contributed financially and worked hard towards the success of the magazine. When Virgin Records first started selling through mail order, the company became subject to litigation due to their discount offers. His parents paid the fine imposed by the courts and this enabled Richard to have another chance to continue with his business ventures and expansion. Such support structures from close people, like family and friends, help in the growth of an entrepreneur. Organizational Resources Richard Branson is known for writing ideas on the palm of his hand, to be acted upon later. As the empire grew, he found a need to have a team of people who take these ideas, research and brainstorm on them, and plan viable ventures that meet his approval. His organizational structure tends to be more horizontal than hierarchical, thus allowing more transitional space necessary for more creativity and innovation (Sahay, Mohan and Maini, 2004:209-226). His companies rely on self-managed teams rather than the traditional or classic command and control structures. Such organizational designs create a feeling of ownership, and enhance transparency and accountability. The group’s companies are small, each with less than 100 members of staff. This ensures that the companies are customer-centered and maximizes customer and supplier contact. The small numbers also encourage a learning culture that is highly adaptive to change with high value for good corporate leadership and corporate citizenship. Innovation in Entrepreneurship The Virgin Group is known for its hiring of mavericks. Innovators who think outside the box form the majority of staff members. The company values employees who are passionate about their work, are creative, talented, and dedicated (Fuglsang, 2008:91-118). Richard Branson himself is an innovator. He prides himself as having entered business not for huge profits but to focus on satisfying the customer. This was as a result of his personal experiences as a customer to the firms of the day that did not treat their customers well. He therefore opened up businesses that challenged existing, established businesses in the way they treated their clients. The Virgin group under the stewardship of Sir Richard has been a leader of innovation in every industry they engage in (Drucker, 2009:182-220). From the first days of The Student Magazine, he came up with innovative strategies for advertising, which paid for the publication of the magazine. He found the airline services of the time to be lacking and so when he started Virgin airlines, he introduced innovative services that enhanced customer experience. These include standing bars, better seats, more efficient baggage handling, and other services that set apart his airline from the rest. The advent of space travel has led to the Virgin Group investing in space tourism through their company, Virgin Galactic. This promises to open up new areas of creativity and innovation in technology and customer service. The Virgin Group’s Virgin Limobikes Company was an answer to the needs of business people and executives for fast yet comfortable commuter transit within London. The heavy traffic jams that result in delays and missing of crucial meetings, events and even scheduled flights was a source of inconvenience for many people. The company offers luxury motorcycle commuter transport services. Apart from the innovations on the bikes, customer satisfaction is further enhanced by provision of comfort rides with precautions taken for enhanced safety and against adverse weather. Virgin Digital is one of the leaders in innovation. The company solves problems associated with digital products like PC’s and laptops, Printers, cameras, smartphones, and WiFi networks. Virgin Limited Edition brings class and luxury to holiday makers throughout the world. They show innovation in their level of customer service and product quality. Their destinations include a private island, mountain chalet, Kasbah, submarine, game reserve, and a private members’ club. All across the Virgin Group, constituent companies strive to constantly embrace innovation. And their recent partnership with the Strauss Group to start Virgin Strauss Water Company (Virgin Pure) holds the promise of more innovations to come in terms of knowledge innovations, technological innovations, and expertise and service innovations. The group operates on the credo of providing customers with a better deal, therefore, to remain relevant and competitive, they find new ways to better fulfill these goals. Conclusion Sir Richard Branson is a charismatic leader with great personal resources that can be attributed to his personality. This has enabled him amass great financial resources despite his humble beginnings. His bad experiences as a consumer led him to believe customers can get better deals, and that became the root of his innovations in every Virgin Company. Innovation in technology and customer service are the mainstay of the Virgin Group’s business ventures and that’s what makes them market leader in every industry they engage in. Innovation gives them the competitive edge that is renown of Virgin products and services. The organizational structure that Sir Richard Branson prefers makes it easier for employees at every level to feel encouraged to bring in new ideas. It also makes it easy for all members of staff to be directly in touch with customers and their needs. References Branson, R. (2011) Losing my virginity, Ebury Publishing. Drucker, P.F. (2009) Innovation and entrepreneurship, Harper Collins, pp. 182-220. Fuglsang, L. (2008) Innovation and the creative process: Towards innovation with care, Edward Elgar publishing, pp. 91-118. Gordon, M.E. (2009) Trump University entrepreneurship 101: How to turn your idea into a money machine, John Wiley & Sons, pp. 175-198. Sahay, B.S., Mohan, R., & Maini, A. (2004) ‘Strategies for building a sustainable competitive edge’, International Journal of Innovation and Learning, Inderscience Publishers, pp. 209-226. Wustenhagen, R. (2008) Sustainable innovation and entrepreneurship, Edward Elgar publishing, pp. 221-248. Read More