Why leaders make or break companies

Richard Branson happily speaking through a microphone to a group of people
Image by Virgin Unite
Virgin Galactic
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Published on 2 April 2019

A good leader can make or break a company. If they are a good leader, who treats people well and develops a great culture, then the business will thrive. If they are a selfish leader, who doesn’t understand people, the company will crumble.

Richard Branson speaking into a microphone
Image by Virgin Unite

Back when Virgin Records was growing into the biggest independent record label in the world, I got a lot of first-hand experience of this. As we expanded so quickly, we created lots of spin-off labels and promoted people into leadership positions at the new labels. Generally, I’m a huge believe in giving people a chance and letting them grow into their roles. If you put your trust in somebody and give them a big responsibility, they will give it their all.

Black and white photo of Richard Branson in the recording studio at The Manor
Image by Virgin.com

But sometimes this didn’t work, and the wrong leader would send a label down the wrong path. A lot of this comes down to how you communicate with people. As Kip Tindell, co-founder & chairman of The Container Store, said at our recent Igniting Change gathering: “Communication and leadership are the same thing.”

Kip Tindell speaking into a microphone, presenting at Virgin Unite's Igniting Change talk
Image by Virgin Unite

My friend Radek Sali, a serial entrepreneur and B Team member, also shared a story that really made this hit home. He explained how his old boss approached leadership: “If you want loyalty, you better get a dog.” If that’s the way you treat your people, you will get no loyalty, an unhappy team and an unsuccessful, purposeless business.

Radek Sali speaking at Virgin Unite's Igniting Change talk
Image by Virgin Unite

This same individual took to firing people by saying “zap!” and thanked his employees for working over their holidays by saying “bad luck!”

Forget running an effective company, this is simply no way to treat other human beings.

The way you communicate can have a profound impact – you have to talk the talk and walk the walk. But most importantly, you have to create a culture where people can be their whole selves, can be creative, can grow and can have fun. Then you can start with a business and end up with a family.