Like a Virgin: Secrets They Won't Teach You at Business School

IF YOU NEVER MAKE MISTAKES

There is no better way to learn how to succeed in business than to learn from mistakes – yours or someone else’s. I often come across case studies looking into how and why certain companies smashed records, busted budgets and succeeded beyond all imagination. Those studies have their uses, of course, but it’s the stories of businesses that didn’t turn out so well that especially interest me. I learn much more from them.

One of the reasons Virgin’s enterprises have been successful over the years is that we empower our staff to make mistakes – and then learn from them. Since our management structure is totally decentralised, our teams are challenged to run the businesses as if they were the owners. I have found that this creates a high level of loyalty, devotion and innovation. When things do go wrong, the team members feel such ownership of the enterprise that they usually roll up their sleeves and turn it around.

This ability to bounce back after a setback is probably the single most important trait an entrepreneurial venture can possess. If innovation is at the heart of your business, obstacles come with the territory. How you react to and navigate those hurdles will make the difference between failure and success.

I’ve been lucky enough to be at the helm of many successful companies, but I’m the first to admit that I’ve also directed a few that failed. You may have heard of Virgin Cola, a company we formed in the 1990s to take on the world’s most iconic brands, Coca-Cola and Pepsi. We attempted to shake up the market in true Virgin fashion, but it didn’t quite work. Its initial success was so overwhelming that we woke up the two giants of the industry and they did everything they could to squash us.

We certainly didn’t lack for enthusiasm, but unlike our battle with BA, we did not have a product that was massively better than theirs. Taking on two such Goliaths, both of which proved to be anything but complacent, was a tremendous lesson for all of us. But still, one of my fondest memories is of our publicising Virgin Cola’s attack on Coke by driving into Times Square in a huge army tank with smoke billowing from it and taking aim at the Coca-Cola billboard!

A more recent example involves Virgin Money (our financial services arm) in Australia, where we introduced our first Virgin-branded credit card in 2003. The Australian banking industry is monopolised by four major concerns: ANZ Bank, Commonwealth Bank of Australia, National Australia Bank and Westpac Banking Corporation. Altogether, they handle 80 per cent of all the country’s banking transactions. Though we entered the market for the right reasons, had a terrific product, and were a great success with the public, we had entered into a bad deal with the partner bank that issued our card, which eventually led to the business’s demise.

Many customers were sad to lose the brand on their card. As a matter of fact, when I’m in Australia I still meet people who carry their old Virgin cards in their wallets!

Which brings me to the next stage: bouncing back. Nearly three years after the failure of the original Virgin credit card, we returned to Sydney to relaunch a range of card products and to start the Virgin Saver online savings account. The difference this time: we have the right people and the right partner (Citibank) for achieving long-term success.

I suppose the secret to bouncing back is not only to be unafraid of failures but to use them as motivational and learning tools. Setbacks are discouraging, but you should always try to channel that feeling into positive action. The key to Virgin’s continuing success has been this simple idea: when we get something wrong, we try to understand why and quickly make a change. Then we focus on what works and take it to the next country or industry or sector.

There’s nothing wrong with making mistakes as long as you don’t make the same ones over and over again. Conduct a thorough postmortem and use the findings to your advantage to make sure you get it right the next time around.