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Richard Branson, the British entrepreneur, corporate titan, and death-defying balloonist, touched down at HBS last fall to share his wit and wisdom with a large Burden Hall audience.
Branson, founder and chairman of the Virgin Group, a London-based global empire of some two hundred disparate companies with estimated annual revenues of $4 billion, is one of the world's most colorful business leaders. His oft-repeated message: "If your business isn't fun, it's ultimately going to be worthless to you."
From its airline to financial services to bridal shops, the Virgin Group seemingly does it all. But Branson, whose career began in the late 1960s when he launched a student magazine and then a record company, told the audience that his enterprises all fit the company's brand. He defined the Virgin brand as representing service and value for the customer, backed by an organizational culture and approach to business that stresses employee satisfaction, creativity, irreverence, and fun. In implementing that philosophy, Branson has been named England's best business leader for the last two years by his business peers.
Branson noted that he shuns acquisitions in favor of starting enterprises - "We start from scratch each time as a way of making sure it's really ours" - in industries where he believes customers are being ill-served or have few choices. Growth is financed by revenues, and companies are kept deliberately small and decentralized. "We split our ventures into smaller units when they get too big, so that each will become the swiftest at what it does best," Branson explained. "That's the core of our organic business strategy."
Branson's global vision is underscored by his high-profile ballooning adventures. Although such expeditions, including the latest one in December, boost the Virgin name, they also risk one of the company's chief assets, Branson himself, who nearly died at sea during a 1987 attempt. "If I go," Branson observed, "as long as our core team doesn't let the brand down, the company should continue to flourish."
In 1984, in his dorm room at the University of Texas, freshman Michael Dell founded the Dell Computer Corporation. Today, the company is a $15 billion enterprise with 20,000 employees in 42 countries, serving some 8 market segments, including education, small business, global corporations, and government. Perhaps even more significantly, the firm is a cutting-edge organization that has achieved enormous success using what may well be the business model of the future.
In a presentation last fall in Burden Hall, the 33-year-old entrepreneur, the youngest-ever CEO to lead a Fortune 500 company, described his company's innovative and increasingly imitated "direct-access" business model. Designed to deal directly with the customer via phone or the Internet, Dell shuns intermediaries such as retailers and distributors and builds computers according to the customer's order. The company relies on vendor-supplied components and maintains minimal inventory, delivering finished units in a matter of days.
Dell's direct-access model makes extensive use of computer linkups and information shared among customers, suppliers, and the company itself in order to facilitate and monitor all facets of production and transaction. "We're a great example of substituting information for physical assets," Dell told his HBS audience.
Increasingly, the company conducts its business online and is recognized as the industry's pathbreaker and leader in this area. At the beginning of 1998, Dell said, about 80 percent of the company's online commerce came from consumers and small businesses; nine months later, 80 percent of that business was from large to midsized companies and from the federal government. "We now have about 100 million visitors a year to our Web site and we do about $10 million per day in online transactions," Dell noted.
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