Richard Branson's decision making rules
- By Jack Preston -
- Jul 05, 2012
Richard Branson recently wrote a piece for entrepreneur.com about the art of decision making, with the Virgin Group founder stating that there are four key principles to keep close to you when making your mind up.
“Most good chief executives or entrepreneurs only make three or four key decisions every year. Running your business's day-to-day operations and managing your team can take much of your time, so there are usually only a few that stand out - the game-changing decisions that can make or sometimes break a business,” explained Branson.
"There are some guiding principles that can help make a decision easier; these are the things I would have liked to have known when I was just starting out:
1.Trust your instincts
There have been many occasions when I have led our team into markets that industry experts told us to avoid because the competition was too fierce or the cost of entry too high.
This was the case when we launched our airlines Virgin Atlantic and Virgin Blue (recently rebranded Virgin Australia), in 1984 and 2000, respectively. On both occasions, my fellow directors were nervous about our chances for survival, given the strengths of our competitors - namely their market share and fleet sizes and experienced personnel. But I felt that our competitors had become complacent; that passengers wanted something different. With the right energy, focus and flair, we could make our mark.
2. Focus on your customers, not your critics
It wasn't just our team that occasionally worried about our stepping into tough markets. Over the years, our critics fretted about Virgin's expansion into airlines, financial services and mobile phone services. What did our company know about these industries and how would we manage the complex issues?
I rarely paid attention (which also drew criticism from some analysts). My answer was always to focus on the customer experience, ensuring that we offered the best service, most innovative products and best value.
3. Always support your team
Day-to-day management has never been my forte, and my early decision to step back from operations gave me the freedom to focus on our main challenges and opportunities.
This meant that I had to learn to trust the management teams, and to support them when they saw an opportunity. When Matthew Bucknall and Frank Reed came to us in 1999 with the concept of a family friendly health club, we decided to invest. Very quickly, they impressed all of us with their innovative approach to customer service and team building.
4. Know when to say goodbye
It can be very difficult to know when to sell, since as a founder and entrepreneur you become very attached to your business and your team. Look into whether selling will be good for the overall health of your company, or if you need objectivity, ask trusted advisers to do this. But brace yourself - the answer might be yes.
We have sold a number of Virgin companies over the years. Probably the most notable occasion was in 1992, when we sold Virgin Records to EMI and used the cash to expand Virgin Atlantic and other companies in the group. It was a very emotional day for me - at one point, I broke down in tears. Looking back, it's clear that we sold at the right time and the decision made sense for Virgin as a whole. That secured our group's future and gave us a war chest for investing in new businesses."
Do you agree with Richard’s principles? Or would you like to add any to the list? Let us know below…