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Thu December 1, 2011
Branson: It's Time To Re-Think 'Business As Usual'
Richard Branson built a global business empire with the philosophy "have fun and the money will come."
As the founder of Virgin Group, he built a mail-order record company into a major record label and a chain of record stores, started an airline, created a space tourism company, and has been actively involved in humanitarian efforts.
Now, Branson argues that it's time to rethink the way businesses function. You can make money, he says, by doing good. In a new book, he says that businesses can make a profit and also care about people, communities, and the planet at the same time.
NPR's Neal Conan talks with Branson about his new book, Screw Business As Usual.
NEAL CONAN, HOST:
This is TALK OF THE NATION. I'm Neal Conan in Washington. Richard Branson built a global business empire with the philosophy: have fun, and the money will come. The founder of Virgin Group started with a mail-order record company that he built into a chain of record stores and a major label. He started an airline, sells trips into space and did his daredevil best to break a few world records in balloons and high-speed boats. He got a few of them, too.
In a new book, Richard Branson argues that businesses must change their ways and make money by doing good. We want to hear from the entrepreneurs in our audience: Can you do well by doing good? Give us a call, 800-989-8255. Email email@example.com. You can also join the conversation on our website. That's at npr.org. Click on TALK OF THE NATION.
Later in the program, on the 40th anniversary of "American Pie," Don McLean settles the origin issue once and for all. But first, Richard Branson joins us from our bureau in New York. His latest book is "Screw Business As Usual." And it's nice to have you on TALK OF THE NATION today.
RICHARD BRANSON: Good to be here, thank you.
CONAN: And these are dreary economic times, in Britain as well as the United States. Why are you so relentlessly optimistic?
BRANSON: Well, I've always been an optimist. It's much more fun being an optimist than a pessimist. And I think, you know, if you are an optimist, you can, you know, trade your way out of problems, and I think if we can just try to get as many people as possible to be optimistic, I think we can get on top of the problems that we've all been through the last two or three years.
CONAN: When you talk about doing well by doing good, a lot of people would say wait a minute, you run an airline, a lot of planes in the air spewing a lot of smoke into the air, and yet you've come up with, well, an idea that ameliorate that.
BRANSON: Yes, I mean, I think it's quite a good example. I mean, we have a business that some people feel pollutes, and I happen to agree with them, the amount of carbon that an airline puts out into the air. And so on the basis of trying to do good and, you know, hopefully turn a profit, what we did was we pledged that we'd put all the profits from our airline business into trying to develop clean fuels.
And in the process, we have come up with fuels, algae-based fuels, isobutanol-based fuels and other fuels that we think will power the planes in the future so that, you know, by 2020, I hope that our planes will be powered on fuels that are clean fuels and are not polluting the environment so that we'll have a green airline and an airline that actually has fuels that will be hopefully cheaper than the dirty fuels of the past, so doing good and also turning a profit at the same time.
CONAN: And selling those green fuels to other airlines, presumably.
BRANSON: And very much, hopefully selling the fuels that - the clean fuels to other airlines. I mean, the exciting thing about the breakthrough with clean fuels for the airline industry is there's only 1,700 pumps in the world that fill up the airlines. So unlike having to convert, you know, all the cars' or all the lorries' petrol stations, once you've actually got the clean fuels, it's relatively easy to, you know, get it to the airplanes.
And, you know, we already - well, we've definitely cracked the technology. Now we're just trying to be able to produce the amount of fuels that we need to satisfy our own needs and then other people's needs.
I think it takes a certain idea of scale to say only 1,700 gas stations.
Yes, well, you've got to think big. I mean, the problem of - if you're a believer in global warming, which, you know, I'm not a scientist, but the vast majority of scientists tell us we have a problem, then, you know, then you've got to think big to overcome that problem.
So if we can tick off the airline industry, that pollute about, you know, three percent of the carbon in the Earth's atmosphere, that's certainly a first step in the right direction. We set up other not-for-profit organizations like the Carbon War Room, which is an organization we set up to try to work with the other 24 principle industries that pollute - the shipping industry, the IT industry, you know, the buildings industry, et cetera - to see if we can get a gigaton of carbon out of each of those industries and to come up with entrepreneurial ways to do that.
And it's great fun, very challenging. We've got a great team of people working there, and they've come up with some good ideas.
CONAN: I've read that you used to be, well, not exactly embraced the idea of climate change and that pollution was the cause of climate change and changed your mind once you'd listened what Vice President, former Vice President Al Gore had to say. And it's one of the key lessons that you draw in the book, "Screw Business and Usual": Listen to people.
BRANSON: Yeah, I think listening to people, if you're a good leader, it's absolutely critical to listen to people, and actually that really applies to everybody in life, you know, be a good listener. And yeah, Al Gore banged on my door one day and gave me an "Inconvenient Truth" lecture, which was before he'd actually released his film.
And as a result of listening to him, I contacted other scientists I knew, like James Lovelock and Tim Flannery and got confirmation of what he'd told me. You know, I also listened to skeptics, as well, but, you know, summing it all up felt that, you know, that it looked very likely that we did have a problem and, you know, and even an insurance policy, I thought, you know, it made sense to go out and try and do something about it.
So, you know, one of the first things we did was to put up a $25 million prize to see if anybody could come up with a way of extracting carbon out of the Earth's atmosphere. We found that prizes worked fantastically in the past, the longitude prize many years ago to try to, you know, discover, you know, how to measure longitude, and that saved many ships from sinking.
You know, you had the X Prize, which enabled commercial spaceship travel to come about, which I'm sure we'll talk about, and Virgin Galactic to be born. And so we were hoping that if we could come up with somebody who could extract carbon out of the Earth's atmosphere, then we could actually, you know, balance the Earth's temperature, and, you know, it was worth giving it a shot.
CONAN: Of course, the prize also that inspired Charles Lindbergh to fly across the Atlantic and many others. But as you looked at your career, was there a point where you said I have to make this change? Or was this something that you did all along? Was there a moment when you thought, you know, I need to make more of a difference?
BRANSON: Well, I'd like to think that, you know, ever since I was - you know, I'm a '60s lad, and, you know, I set up an advisory center for kids when I was, you know, 17 years old. You know, I'd like to think that it's happened, you know, since I was quite a young man.
I think being a lad of the '60s, we were out there campaigning against the Vietnamese War, campaigning against injustices. I think that the '60s was a much more understanding group of people. You know, the gay community was something that became accepted in the '60s and minority groups I think generally became much better accepted.
So, you know, I was born into an era, I think, of better understanding that had existed before. And, you know, I suppose that as I've got older, you know, I've got - you know, wealth comes with success. And therefore great responsibility comes with that wealth. You know, I think it's a disproportionate wealth that goes with being a successful businessperson, and therefore a disproportionate responsibility goes with it, as well.
CONAN: We want to hear from the entrepreneurs in our audience, a chance to pick the brains of Richard Branson. Can you do well by doing good? 800-989-8255. Email firstname.lastname@example.org. We'll start with Herb(ph), and Herb's on the line from Toledo.
HERB: How are you doing, sir?
CONAN: Good, thanks.
BRANSON: Nice to talk to you, Herb.
HERB: Well, I've been a truck driver now for almost 20 years. I own my own truck. And if I don't do good, I'm out of business. And I have to constantly evaluate when I roll into a supplier.
Maybe Mr. Branson's ordered me to haul his airplane parts for him. Or anybody, has house parts, you know, construction equipment. If I'm not constantly doing good, I'm out of business. I have to be on time. I have to have my freight damage free. I can't roll up there with a bad attitude or look like I'm three days worth of bad road.
BRANSON: No, that's great. I mean, I've, you know, just come back from Australia. There's a company called Toll that is the biggest truck company in Australia. They've tried to make a difference by taking on 600 ex-convicts to work driving their trucks.
And it's been fascinating. Not one of them have re-offended, which obviously is great news for society, because they're not, you know, breaking and entering into people's houses. And by giving them a second chance, you know, they seem to have really excelled. So, you know, it's all the time trying to think, you know, how can companies make a difference. And I wish you all the best with what you're doing. It sounds great.
HERB: Your customer service is definitely, you know, number one in making a difference. Like you said, if you've got a piss poor attitude when you roll up to a receiver or shipper, you're not coming back to pick up freight. And you're not going to get more customers back.
BRANSON: And Mr. Branson would be a customer of mine, so I have to treat him as a customer. And, you know, while he may not always be right, he's still a customer and I have to treat him with respect. And I have to do that.
CONAN: Some people might say government regulations. That's the kind of thing, Herb, cutting corners is the only way you can squeeze out a profit.
HERB: No, I don't believe that at all. people cutting corners you end up - you end up cutting corners and then you end up cutting your profit margin too thin or you end up with - cutting corners to me would be putting a cheaper brand tire on, you know, letting my service go on my truck or my truck go into disrepair by cutting corners. And then I'm on the side of the road. And then, you know, I end up with late freight. Again, you end up with upset customers.
BRANSON: Well, you sound like you've got a great personality. And that's half the battle, how you deal with people. And, you know, doing your job with a smile. And it must be quite a lonely job, I suspect. So it sounds like when you actually meet people, you're very welcoming, which is, I'm sure, half the battle, isn't it?
HERB: Well, yeah, thank you. It's a pleasure to talk to you, sir. I think I've got great respect for anybody who can get up in a balloon and go so many thousands of feet up into the air has got my respect. I jumped out of airplanes for four years.
BRANSON: All right. Well, maybe one day see you up in one of our spaceships. Look forward to it.
(SOUNDBITE OF LAUGHTER)
HERB: Take care, sir.
BRANSON: Thanks a lot.
CONAN: Herb, good luck to you. Thanks for the call. We're talking with Richard Branson about his life and his career and his new book, "Screw Business As Usual." Entrepreneurs, we'd like to hear from you. Can you do well by doing good? Give us a call: 800-989-8255. E-mail us: Talk@NPR.org. Stay with us. We're going to take a short break. I'm Neal Conan. It's the TALK OF THE NATION from NPR News.
(SOUNDBITE OF MUSIC)
CONAN: This is TALK OF THE NATION from NPR News. I'm Neal Conan. In 1970, Richard Branson founded a small company to sell records by mail and called it Virgin. These days, some 200 companies carry that name. And Richard Branson made a lot of money along the way.
In a new book, he makes the case for a more caring approach to business and says businesses can make money by doing good. The book is titled, "Screw Business As Usual." You can read more about why he wrote it in an excerpt at our website. Go to NPR.org, click on TALK OF THE NATION.
We want to hear from the entrepreneurs in our audience. Can you do well by doing good? Give us a call: 800-989-8255. E-mail us: Talk@NPR.org.
And, Richard Branson, I wanted to ask you. We happened to be talking on what is World AIDS Day. And it's one of the subjects you write about in the book. AIDS, not World AIDS Day specifically. But there's a trip you took to South Africa in 2004. I was wondering if you could tell us a little bit more about it.
BRANSON: Yes. I mean, it was very eye opening. I went to a hospital. All the way along the street to the hospital there were massive adverts for funeral parlors. That's all you could see. Went into the hospital and the waiting room was just full of dying people waiting for somebody to die in the bed the night before, so they could actually climb into bed, you know, for the last two or three days of their life. And in the wards themselves, there were obviously horribly emasculated people on death's door.
And yet, you know, this was at a time when antiretroviral drugs had been discovered. And, you know, it was a time when these people could've been taking antiretroviral drugs and they could've walked out of the hospital and lived a full life like people do here in America.
And so, you know, I pledged to do something about it. We pledged that, you know, none of our staff would die of AIDS. We would, you know, get out and make sure that they all had antiretroviral drugs. And then we also set up a hospital in the area where, you know, it had a community of about 100,000 people. And we gave them all free antiretroviral drugs and free malaria tablets and free TB tablets. And, you know, became, hopefully, a good citizen of the area.
And then also, you know, started campaigning with the president of South Africa and trying to get him to change his approach.
CONAN: Well, trying to get him to change his approach. You made a speech in which you described his participation in genocide for policies that failed to recognize AIDS for what it actually was.
BRANSON: Yes. I mean, he did not believe that AIDS and HIV were connected. So I thought the only way to try to shake him was to say something pretty powerful. And that was that, you know, that he was overseeing the genocide of millions of his own people. And as a result, you know, he contacted me. We had some good discussions. And we agreed to set up a Center for Disease Control in Africa so that something positive could come out of, you know, out of the negative of, you know, what I'd said publicly. And we are in the process of setting up a Center for Disease Control in Africa, which hopefully will help get on top of these problems.
CONAN: Let's get another caller in on the conversation. Danielle. Danielle joins us from Houston.
DANIELLE: Hi, thank you very much for taking my call. I appreciate it. I am a jeweler and a ceramic artist. And I handcraft everything I make. And I buy fair trade fine silver from Thailand. I buy natural gemstone beads and things like that. And I try and ethically source everything that I can as much as possible.
And I find that a lot of shows that I do, even at farmer's markets and stuff in this area and in Austin, a lot of the booths are imports from China or other places. And the prices are so low that it's really hard for me to make sales, because in a poor economy, people may want to buy, you know, ethically sourced products from the artist, but they go where they can afford something to buy.
So how do you work with your morals and your ethics, because I personally wouldn't buy something that was Chinese slave labor or something like that, and try and sell it to other people? Even though the profits are of such greater possibility, I don't want to sell my soul to make some money.
CONAN: I think we hear you, Danielle. But, Richard Branson.
BRANSON: Wow. That's a difficult question. I mean, you know, for you to be able to do good ultimately, you've got to survive. And therefore, you know, if you're literally being driven to the wall by, you know, by being undercut by, you know, people importing goods from China, yeah, you have a real dilemma.
And it could be that - and this is completely against the - contrary to my book - but it could be that you have to compromise and offer both products and give people a choice. You know, you either buy fair trade or you buy these goods I've imported from China. And then once you've made a bit of money, you know, then, you know, and you've actually survived as a business, you can then try to, you know, try to, you know, do good in other ways.
You know, whatever happens, I don't think you should, you know, go to the wall if other people are undercutting you. Obviously, if they're undercutting you by selling, you know, products from people who are using childhood labor or something like that, then you should definitely not join. But if they're undercutting you just because they're using, you know, the billion and a half people in China to make their goods, you know, then I think maybe you have to join, if life is as difficult as it sounds like it is from you. What do you think?
DANIELLE: (Unintelligible) the CCP anyway. So I'm not going to buy Chinese products. But I...
CONAN: Well, maybe from Vietnam then. Some other place.
DANIELLE: I have a lot of friends, not really friends, but acquaintances, that have, you know, designed something and then they'll go overseas and go to Indonesia or Thailand and they'll have those products made. And they'll try and find, you know, families that can work for them and stuff. But in the end, they come back and try and sell those products as handcrafted by them as an artist. But it's really they had this design concept and then they go and get somebody else to make it.
So I don't really feel - like I want to craft the piece. I sign all my ceramic pieces. So I want it to be, you know, from me to this person and a representation of my artistic...
BRANSON: Well, I have enormous respect for you. And if you feel that strongly, you know, hopefully you'll be able to, you know, get enough goods sold and enough people to believe in what you're trying to do to make a living.
DANIELLE: So where did you get your initial - or where did you find like the money to promote your products? Because I think if people - there's a market for things, but where do you find people to help you promote your product? Like where do you find the capital and things like that for promotion?
BRANSON: Well, look, obviously, if you can come up with an idea that can get some traction in the press. I mean, if you take say TOMS Shoes, which is an example that Blake came up with. I mean, he gives away one pair of, you know, shoes to Africa for every pair of shoes that he sells. And he's had enormous amounts of publicity and promotion because of that. Which I suspect, you know, way pays for the fact that he gives away some shoes.
So, you know, if you can come up with an edge like that where you can get, you know, some marketing traction maybe to try to get on the front page of the papers rather than a little, you know, byline in the back. You know, free publicity's definitely the best way. And the fact that you called into this program. Hopefully you're going to give us the name of your company. So, I...
DANIELLE: It's Fireflower Jewelry. I'm actually driving to Austin right now to do an art walk on South Congress. It's all handcrafted artwork and things like that.
CONAN: Well, Danielle, we wish you...
BRANSON: Well done. You've done great. And I wish you all the best with your company.
CONAN: Thanks very much for your call.
DANIELLE: Thank you so much. I think you're brilliant, sir.
CONAN: Thank you.
BRANSON: Thank you.
CONAN: Thanks very much for the call.
You mentioned earlier. How do you make money selling spaceflights when nobody's taking off yet?
BRANSON: Well, I think it goes back to the beginning. I mean, I've never thought, you know, how can I make lots of money. I've just thought I want to create things that make a difference.
So, you know, my very first venture was a national student magazine to try to campaign against the Vietnamese War. And so I wanted to be an editor. I wanted to bring the magazine out. And in order for the magazine to survive I had to worry about the printing and the paper manufacturing and the distribution. And, you know, I had to try to, at the end of the year, have more money coming in than going out.
And ever since then, you know, have set up businesses basically out of frustration. You know, I mean, I set up Virgin Atlantic with one second-hand 747 because, you know, I hated the experience of flying on other people's airlines. And I thought, you know, I could try to create the kind of airline that I'd like to fly on. And people liked it. And, you know, we've moved on to another one.
With space travel, no different. You know, in 1990 I read the name Virgin Galactic Airways. Loved the name. And set out to try to find an engineer or rocket scientist in the world who could build a safe, reusable rocket that could take people to and from space and we could start a whole new era of commercial space travel.
And I was fortunate enough, after many visits to many wonderful weird people to come across Burt Rutan, who is a genius in the Mojave Desert. And SpaceShipOne was born and had three flights into space that one something called the X Prize. And from there, we're building SpaceShipTwo, which is, you know, what a beautiful spaceship that is very, very, very nearly completed and will be ready from about next Christmas onwards to start taking people into space. And so, you know, it's, you know, we haven't, you know, done our figures and, you know, we just thought let's see if we - if you can create a company that takes people into space and brings them safely back out again, there will be a market for it. And we've had 500 people who've spent a couple hundred thousand dollars for the tickets to go up. They're the pioneers. And they will help us bring the price down so that, hopefully, many people who are listening to this program one day will have the chance to become astronauts and go to space.
CONAN: I can't help but think of the book "The Man Who Sold the Moon." Did you read a lot of science fiction when you were a kid?
BRANSON: I read a fair amount, and, you know, it was certainly inspirational. And it's - I have to pinch myself to think that, you know, we might be able to make some of that come true. And from, you know, small ideas, bigger ideas emerge. So, you know, we're starting with suborbital space flights and, you know, we'll then go into orbital space flights and, you know, maybe one day we'll send people on a one-way voyage into the depths of space as per the science fiction trips. And actually, we did a fun April Fool's thing with Google a couple of years ago, where - which we called it Virgle.
(SOUNDBITE OF LAUGHTER)
BRANSON: And we looked for volunteers to go on a one-way trip to Mars. And surprisingly, a large number of people who fell out with their partners contacted us, saying that they would love to fly on a Virgle spaceship. But out of April Fool's jokes come real things, and I wouldn't be surprised within the next 50 years that there are one-way trips heading out into space with people on it. Very, you know, it would be very exciting.
CONAN: Katrina(ph) in Tucson sent this email: My husband and three partners run a small medical practice. Every employee is provided with medical insurance, retirement savings and a Christmas bonus every year. Because of this, another small gesture is there's virtually no turnover in staff, thereby saving the company money in hiring and retraining. Each of the partners shows they value their employees. And according to the accountant, they're one of the few medical offices in the city that's making money. They firmly believe that that's due to the good they do for their employees, resulting in hard-working, dedicated staff.
And, again, that's one of the principles you talk about in "Screw Business As Usual." Treat your staff right and they'll treat the customers right.
BRANSON: A hundred percent. I think, you know, they sound like they got it absolutely right. And I think not enough companies think that way. So, you know, and, you know, I think if you - I mean, you sometimes feel that, you know, when a nation goes into the kind of crisis that it - that America and Europe have gone into in the last, you know, couple of years, you know, rather than having, you know, say 10 percent of people out of work and 90 percent of people in work, you know, people should be asking for volunteerism amongst the 90 percent who are in work, you know, who would like to, say, take six months off or take a year off in unpaid leave in order to make room for those people who are out of work.
And I, you know, we've done a bit of market research, and we found like something like 20 percent of people working fulltime in companies would be very happy to job share or would be very happy to go part-time, but they're frightened of saying that because, you know, they're away that the companies will frown on it. But if they were allowed to do that, if they were encouraged to do that and if the government help them do that, then I think we could get back to virtual, you know, full employment. And, you know, even if it meant that, you know, some people just working slightly, less hours than they would like to, full employment, I think, would be good.
CONAN: We're talking with Richard Branson. His book is "Screw Business As Usual." You're listening to TALK OF THE NATION from NPR News. Let's get down on the line. Dal(ph) with us from Nashville.
DAL: Hi. Mr. Branson, it's an honor to speak with you.
BRANSON: Lovely to talk to you too.
DAL: I'm from Alamogordo, New Mexico, which, of course, you know is where a lot of the activities going on as far as getting regular ticket-buying people to get to space, and that's very exciting. I have a small business called Revive Vinyl, and it's funny that one of your first businesses was in the record business. I take those old vinyl records that are scratched up and won't play anymore and turn them into art and jewelry, and so keep them out of the landfills. But still now in this day of MP3, can put vinyl in people's hands. So it's an exciting thing for me. And like I said, I'm a huge fan of yours.
BRANSON: Well, it's a great idea. It shows capitalism at its best. And if you've got any Sex Pistols records that you've turned into art, I'd like to buy one off of you, sir.
DAL: That's great. That's great. Revive Vinyl...
BRANSON: I like - well, I'm sure you got an...
DAL: ...I'll make you a custom piece.
BRANSON: Thank you very much. I look forward to that.
DAL: Thank you.
CONAN: Dal, thanks very much. Good luck.
DAL: Thank you.
CONAN: Here's an email from Kevin(ph) in Portland: Kudos to Richard Branson for all the great works. Doing better is great and essential, but as one small green entrepreneur to a giant, what would it take to scale up environmental entrepreneurism to the level we really need today? A paradigm shift to get 50 percent reduction in our environmental footprint in the next 20 years that the world needs.
BRANSON: Well, I mentioned earlier that we have the Carbon War Room. The Carbon War Room is looking at the 25 sectors that need to get a gigaton of carbon out of each sector. One sector, which is the - which is buildings, if we could actually get on top of that, we could maybe get six or seven gigatons of carbon out. And what the Carbon War Room have done is they've got the mayors of a lot of cities around the world together with finances and said, you know, why are we not greening cities? And the financiers said, we're worried about security. So, in Miami, they've created a scheme whereby the financiers can lend the money to enable buildings and houses and office blocks to completely green the buildings, and they have the security of it going on the rates. I'm not quite sure what you call it in America, but the taxes on the property itself rather than the individuals.
CONAN: Property taxes, yes.
BRANSON: So they - property taxes. So they know they are going to get the money back. Doesn't matter who lives there. And so it's a win-win situation, and that's immediately created 30,000 jobs in Miami, and, you know, and a billion dollars has been lent. And I think that could be - if that could be ratcheted up on a global basis throughout all the cities, you know, that, I think, could make a massive difference. And so people like your caller could maybe step in.
CONAN: Richard Branson, thanks very much for your time, and good luck to you.
BRANSON: Thank you very much.
CONAN: Richard Branson's new book "Screw Business As Usual." He joined us from our bureau in New York. Coming up: Last month, Don McLean put to rest a long-running legend about his anthem "American Pie." He'll join us to explain right after this. It's the TALK OF THE NATION from NPR News. Transcript provided by NPR, Copyright National Public Radio.