Only rarely does Richard Branson find his business activities under scrutiny against his will – and almost never does the public see this most public of entrepreneurs doing what he spends most of his time doing. But there should be no mistake: like most people who run companies of comparable size, Branson devotes most of his waking hours to his businesses – hiring staff, negotiating deals with other companies, conferring with lawyers and accountants, telephoning scores of his managers all over the world, answering letters from behind his desk. Few questions are asked about this side of his life; fewer still are answered.
This may be paradoxical, but it is not accidental. There are two Richard Bransons, one behind the other. The public man is informal, friendly, idealistic, happy-go-lucky, attached to his family, guided by strong principles, concerned to improve the society he lives in. The private man is a ruthlessly ambitious workaholic; a hard bargainer, an accountant with an instinctive feel for minimizing the losses on each new venture; a gambler who prefers to put his assets at risk every day rather than retire to a life of luxury on what he has already made. He is an empire-builder who keeps the inner workings of his businesses secret, and requires senior employees to sign binding confidentiality agreements before they come to work for him; a figure of great wealth and political influence who would not dream of breaking the law, but is equally determined not to pay a penny more in tax than he has to; an important customer for a number of top legal and accountancy firms, who knows the value of highly paid advice; and a business partner who may be informal and positive when he is being fairly treated, but will go to the High Court for a writ without a moment’s hesitation when he believes he is not.
Most public figures would be hard put to maintain such a distance between their outer and inner selves. Yet there is nothing fraudulent about the way Richard Branson behaves. The key to understanding him is that his warm public persona is not a façade. It is every bit as real as the commercial steel underneath. But Branson has realized, instinctively if not consciously, that his business interests dictate which Richard Branson he should put first, and which the public should believe in. His motto ought to be ars est celare artem – art lies in concealing the art.
In many ways, Richard Branson is a model of what the socially responsible company chairman ought to be. A visit to his office provides the first clues. It is not an office at all, in fact, but a large white stucco house in Holland Park, a few miles to the west of Marble Arch in central London. The house could hardly be described as modest – it is worth at least £5m – but less than a dozen people work inside, an astonishingly small number for the centre of a group of companies whose value is approaching £Ibn. Branson himself keeps a desk in a sparsely decorated room on the first floor, but prefers to conduct his business from an apricot-coloured sofa in the sitting room that occupies the left half of the entire ground floor. To the right of the entrance hall, there is a large dining room for business lunches and dinners, with twenty or more chairs around its table. Branson’s diary and his correspondence are dealt with by a personal assistant and two other secretaries; his press chief works in another room, with an assistant of his own. All the different Virgin Group businesses have their own headquarters, mostly in modest buildings scattered within a mile or two of the house. The nearest thing that the company has to a headquarters, apart from Holland Park, is in a three-storey building of brown brick around the corner in Campden Hill Road. That is where Trevor Abbott, the group’s chief executive, keeps tabs on the money; that is the registered office of many of the hundred or so companies that make up Branson’s empire.
‘Small is beautiful’ is evidently the guiding principle. Branson believes firmly that people work better in teams that are too compact to be impersonal. But separating the companies that make up the group into lots of small suburban houses and offices is not only more human than installing them in a single tower block in London’s financial centre; it is also cheaper and more flexible. There have only ever been two exceptions to the rule: Branson’s airline, Virgin Atlantic, which employs several hundred people in a couple of offices in the town of Crawley near Gatwick Airport; and the Virgin Music Group, which occupies a vast mansion set back from the Harrow Road. The reception area at Harrow Road boasts a stunning combination of Victorian cornices and minimalist art and furniture which was installed by a fashionable architect, and reputed to have cost £80,000. But this was not Branson’s initiative; the man responsible for this act of corporate patronage was Simon Draper, who ran the Virgin Music Group until Branson sold it to Thorn-EMI in 1992.
While others make money from buying big companies that have lost their way, cutting out the dead wood and returning them to profitability, Branson has made only a handful of acquisitions in his life, none of them costing more than £10m. Instead, his speciality is to build from scratch. In a business career spanning twenty-five years, he has used this approach to build an international retail chain, an airline, and a music business that includes records, music publishing and studios. The principle of starting from nothing applies to people as well as to businesses. Rather than hire in specialists from outside who will be expensive and may not be loyal, Branson prefers to offer big jobs to people who already work for him. This is by no means a rule: Trevor Abbott, the Virgin Group chief executive and Branson’s most senior adviser, joined him when he had already been in business fifteen years; and one of the two managing directors of the airline was brought in only in 1990. Yet most of the leading players in the Virgin story are people who joined straight from school or university. One, Barbara Jeffries, first worked for Branson as a housekeeper at Shipton Manor in Oxfordshire; by 1992, she was managing director of all his studio businesses.
Since inexperienced staff necessarily make a few mistakes before acquiring expertise, it helps in such circumstances to take a long-term view. Luckily, Richard Branson has never evaluated his businesses on the basis of how much profit they make each year. When he signed musicians to the Virgin record label, he was often willing to pay advances that his competitors considered ruinously high – but in return, he would demand rights over a larger number of albums, and would want to keep control of the copyright over those albums for longer than other record companies. The record shops under the banner of Virgin Retail grew steadily in number for more than a decade, without ever making a proper return. But Branson ignored the advisers who told him time and again to close them down or sell them – and was proven right in 1988, when WH Smith, one of Britain’s leading stationery chains, paid over £23m for the smaller and less successful stores, leaving him with a more closely focused chain of Virgin megastores. Branson has weathered equally stormy days at the airline, which took four years from its creation to turn in a reasonable profit. He kept his nerve during the 1991–2 recession in the air transport industry, emerging triumphantly at the beginning of 1994 with a daring deal that replaced his fleet of ageing Boeing 747s with more economical Airbus A340S.
This patience extends to his negotiating style, too. During the same recession, Branson was under huge pressure from his bankers to sell parts of the Virgin empire in order to reduce the mountain of debt he took on at the end of the 1980s. Yet he took more than a year to sell Virgin Music Group – and succeeded, like a carpet dealer in an Oriental bazaar, in persuading potential buyers that he neither needed nor especially wanted to sell. This strategy was rewarded in the astounding price that Thorn-EMI eventually paid in cash and assumed debt for the company: £560m, or almost $1bn at the prevailing exchange rate.
In the speeches that he is increasingly often asked to give, Branson is fond of pointing out that while conventional business analysis puts the interests of a company’s shareholders first, followed by those of its customers and then its employees, he takes the opposite approach. For him, it is Virgin’s employees who take top priority, particularly those who deal face to face with members of the public. If they are