Many of us fondly remember the launch of Virgin Atlantic, the fledgling challenger brand that was going to take the battle to the established big-boys of the airline industry. But now the business touches everything from media to banking, you could be forgiven for thinking Virgin has become part for the very establishment it set out to challenge, and therefore somehow lost its edge. However, the recent West Coast rail debacle reminded us of what the brand is about – being the people’s champion. As such, although Virgin’s corporate structure doesn’t lend itself to being disruptive, Sir Richard Branson’s ability to vocalise this brand makes up the difference. I don’t for one moment believe that Branson’s high profile role in outing the failures of the West Coast bidding process was designed to do anything other than remind consumers of Virgin’s core values. After a period of silence, the Virgin brand is back on track.
Andrew Mulholland is executive client director at The Gild.
Beginning as a record shop, the Virgin Group is now an airline, a mobile phone operator, and space tourism sits on the horizon. It’s an exception to the rule that large organisations tend to be plodding giants. Why has Virgin retained its entrepreneurial spirit? It’s easy to point to its ebullient founder, Sir Richard Branson, but more critical is Virgin’s organisational structure. First, it avoids behaving like a large organisation because it isn’t one. Instead, Virgin maintains a loose coupling that structures new initiatives as separate subsidiaries, giving each the autonomy to optimise for its own market. Second, whereas most large organisations become burdened by expectations of success, Virgin embraces failure. It is both willing to lend its brand to risky new ideas (Virgin Galactic), and is also willing to ruthlessly cut initiatives that fail to find ground (Virgin Brides).
Benjamin Hallen is associate professor for strategy and entrepreneurship at London Business School.