One thing can drive your business to success and it’s not three letters at the end of your name.
Beyond his amazing business success after dropping out of school when he was 15, Richard Branson is unusual. He is unafraid of controversy while managing to live without regrets, as his mother taught him. And in a new interview on Freakonomics Radio released today, he ups the ante.
Forget the M.B.A., and even basic business basic savvy like knowing the difference between net and gross if you want to be a successful entrepreneur. There’s something far more important to understand: people. If you can trust, inspire, promote, and work with people, you can do amazing things. Here are some of Branson’s points.
1. Put yourself out of business.
Some people are meant to be entrepreneurs and others are far better suited to other roles. “I actually believe that people should delegate early on in their businesses, so they can start thinking about the bigger picture,” Branson said, advising that entrepreneurs should find people as good or better than themselves. “Put yourself out of business, and let them get on and run your business day to day.” When you do, you free yourself to focus on bigger issues and even start other businesses. Plus, many of the people you find will be much better at particular jobs than you would ever be.
2. Business terminology is not the most important thing.
Branson said that he was 50 before he understood the terms net and gross, and it took someone drawing a picture with crayons of an ocean, fish, and a net to get it across. “But the bizarre thing is that by then we had the biggest group of private companies in Europe,” he said. Knowing terminology isn’t so important. “What matters is, you know, have you created the best company, the best airline, or the best record company? And if you have created the best, your figures will add up at the end of the year, and you’ll have more money coming in than going out, and you can employ some accountants to work out the difference between net and gross.”
3. Business professionalism is fine for MBAs.
There’s nothing wrong with professional management in companies. But entrepreneurs are different. “They need a passion, absolute passion for what they’re doing,” Branson said. “They need an absolute belief in what they’re doing. They need to be wonderful motivators of people.” He also said, “If you’ve got a happy, motivated group of people you’re working with, you can achieve anything.”
4. Treat employees like family.
Companies get nowhere through fear and intimidation. “If you treat your people badly, they’re not going to go that extra mile when things get tough,” Branson said. Instead, treat them like family. “I mean a lot of our time we spend at work, and work should be fun. It should be enjoyable. And you should also have policies that follow through with that.” Let employees work from home, take time off, and otherwise have flexibility to make adult decisions so they can do their work and live their lives. Branson has found that people don’t take advantage of the attitude because they feel trusted, and so treat the company well in return.
5. Give people a chance.
Branson has been unusual in his support of former convicts by given them jobs and opportunities. “Because we give them that trust, not one of them have ever re-offended,” he said. “And somebody who will do everything they can for the company because the company has given them that second chance.”
6. Promote from within.
Branson’s preference to promote from within, including CEOs, is actually solid management theory these days. “I think there’s nothing more discouraging for, say, a thousand people who work in a company for a so-called expert to be brought in from outside,” he said. “And generally, if you can’t find a good CEO within a thousand people in a company, there’s something wrong in the first place. You should have deputies who are quite capable of stepping into the CEO’s position.”
7. Put women in charge.
Not that Branson places women as CEOs just because they’re women. But he recognizes talent and uses it. “I mean, you know, women are a breath of fresh air actually, in most areas,” he said. “So I think we need to kick start it, it needs to be forced on companies. … I think there’s a danger that men will continue to appoint men.”
Read more at Inc.