Saturday, September 21, 2013

Richard Branson on Managing Change

Restructuring can be a difficult process. Even if you've done everything right, sometimes the company needs a new direction because circumstances and opportunities have changed. It is well known that over the years we have closed down or sold a number of the 400 or so Virgin companies we have created. Companies are tools designed to fulfill a particular purpose. If they are superseded or no longer needed, our group will sell or shut them down. We try our best not to lose people or know-how, but we do not allow ourselves to get nostalgic about the concepts of the companies. When Virgin renews itself, the critics who tut-tut about all the leaves falling to the ground have failed to spot the tree.

To lead your company through a restructuring, you need to take a cold, hard look at the business. Will you be able to empower your staff to do what needs to be done? It can be superhumanly difficult to change a company's existing culture. This is also something you should consider if you're leading a team that's contemplating a business acquisition -- so many of which end up being disasters because the executives fail to understand the real challenges of getting different types of employees to work together and share the same goals.

We found ourselves grappling with a challenging situation in February 2007, when we relaunched the combined company of NTL, Telewest and Virgin Mobile as Virgin Media, creating the largest Virgin company in the world, with 10 million customers and 13,000 employees across the U.K. Until then I'd always followed a "small is beautiful" business plan. In Virgin's early days, whenever one of our companies topped 100 employees, I would ask to see the deputy managing director, the deputy sales manager and the deputy marketing director.