Richard Branson on the Value of Debate in Business Partnerships

OCTOBER 27, 2014

Editor's Note: Entrepreneur Richard Branson regularly shares his business experience and advice with readers. Ask him a question and your query might be the inspiration for a future column.

Q: I wonder if you can make suggestions about how to make business partnerships work when your partners don’t see eye-to-eye. -- Velma Ganassini

Velma, in business just as in life, you’re not going to get along with everyone all the time. Dealing with the differences as they arise, while remaining open to the viewpoints of others, is crucial to building long-lasting business relationships.

Over almost 50 years in business, I have learned that having a healthy debate about strategy and direction is vital if a business is to succeed, so I always encourage my colleagues to challenge me and speak up if they disagree with any of our group’s plans. The old saying that “a family that eats together, stays together” also applies to disagreements in business -- a team that challenges each other will be successful together. This may seem like bad advice to leaders who believe that senior management teams should always be harmonious, but I disagree. Of course, you cannot be at permanent loggerheads with your senior colleagues or fellow founders, but the occasional debate is good for everyone and will help to sharpen your team’s focus.

At Virgin’s senior management meetings, we have not always immediately agreed on which investments to make or which course of action to take. For example, in 1999 all of my senior colleagues were opposed to our launching Virgin Blue Airlines (now Virgin Australia Airlines). But I and other supporters of the venture fought hard to move forward, since we felt very strongly that the airline was going to become a very valuable business -- and that turned out to be right. (On the other hand, I kept our Virgin Megastores open a few years longer than my colleagues wanted to, and they were right.)

In the long run, disagreement and debate is healthy -- organizations run by a chief executive who lords over a team of “yes” men is unlikely to succeed. I have always surrounded myself with colleagues who think differently than I do and who bring different skills to our companies. As I have written in previous columns, my early businesses were founded with Nik Powell when we were teenagers. We complemented each other well -- Nik was very organized and cautious, while I was more of a free spirit. We learned a lot about how to work together as we established Student magazine, our mail-order record business and then a retail business together -- he was the perfect foil for me, since I constantly had ideas for new ventures. However, the relationship started to founder when we set up Virgin Records, our record label, and I brought in my cousin Simon Draper.

At that point, Virgin had three founders and everyone had a lot of work to do, so we had no reason to doubt that our partnership would continue. However, after some early success with Mike Oldfield and then the Sex Pistols, our record label found that newer acts were not selling as well. The recession of the early 1980s had taken its toll, and we were facing the prospect of losing 1 million pounds a year.

Virgin had two options. The first was to shrink our recording business and consolidate, a tactic that Nik favored. He wanted us to invest any extra cash we had into upgrading the retail chain. The second option, which Simon favored, took the opposite tack: Invest in new talent and grow the label out of its trouble. He had spotted The Human League and also wanted to sign Phil Collins, which he was certain would boost the Virgin Records roster.

I was genuinely conflicted about which route we should take. Ultimately, I decided that we were not going to be able to cut our way out of trouble and that we should look for new acts to boost record sales. This meant that I had to tell Nik he was out of a job, and that I would buy out his shares in Virgin. We spent a lot of time sorting out the agreement, but Nik and I are still good friends and he’s gone on to run the world-leading National Film and Television School.

Over the years since then, I have had fundamental disagreements with my management team on a few occasions, but each time we have moved on, accepted each other’s views and, hopefully, learned something in the process.

As you assess the issues that you and your partners don’t see eye-to-eye on, try to encourage real conversation so that you can get to the core of the problem. Avoid analysis by PowerPoint, since those presentations introduce an unnatural, almost robotic tone that’s no help when you’re having an argument. And remember that there is no better way of sorting out a difference of opinion than with a good-humored, strong debate -- and maybe a stiff drink or two together!