"I intervene as little as possible. Give them that, and they will give everything back."
Concerning Richard Branson's relationships with his top managers, it is very strong. It's worth taking a look at how he does it, as it differs from the way Warren Buffett works and shows some contrast in styles.
With Buffett, he has no interest in putting in new managers or replacing management when Berkshire Hathaway (BRK-A) buys a company. He buys into existing ideas and companies that have great management. He simply finds out how good they are and if he likes what he sees he buys the company and makes sure the owner stays on to continue managing. Buffett won't interfere in any way.
With Branson, it's a little different. As he says: "I come up with the original idea, spend the first three months immersed in the business so I know the ins and outs and then give chief executives a stake in the company and ask them to run it as if its their own."
The basic difference between the two is really the origination part. The two otherwise are close in how they do it. It's different in that it's Branson that comes up with the ideas with Virgin, while Buffett will buy into existing ideas, not trying to be an originator.
Buffett will also have his CEOs keep a stake in the company for incentive also. He doesn't even have to ask them to run the company like it's theirs, because they're the ones who started it in the first place in most cases. They just continue on unhindered and not interfered with.
Branson has to do more work to give his leaders the feel of ownership; they work off of his ideas while Buffett's managers work off of their own.
Buffett has more success in the way that he does it, but that doesn't mean Branson's way is wrong. Branson has to be true to who he is and run things that way. I think the reason why the way Buffett does it is a little better though is because he isn't the one that came up with the idea; his managers did. I think that would give them a stronger buy-in than someone that works off of others ideas.
Still, overall the two ways of doing it are solid. I give the edge to Buffett's way because it has proven to be more consistantly successful over a long period of time. Branson's businesses, in a number of cases, have more inconsistencies and failures than Buffett's.
But with the way that Branson loves to create new, unique businesses, it works good. His very way of doing things ensures that he will encounter more failures than Buffett. But each style has its place.
Other Branson Sources:
Richard Branson conquered the world. Now he wants to fly you to space.
OPEN LETTER TO GEOFF DIXON FROM RICHARD BRANSON
Richard Branson's: Losing My Virginity
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