Virgin Atlantic: Virgin's peacock plumes

The Swedish business expert Kjell A Nordstrom offers Pippa Considine his analysis of Virgin Atlantic's distinctive brand.

Kjell A Nordstrom is one of the world's most happening business gurus. An assistant professor at the Institute of International Business at the Stockholm School of Economics, he is ranked in the top echelons of business brains, alongside Nicholas Negroponte and Tom Peters. Just five years ago, Nordstrom was named Sweden's outstanding young academic of the year. Now he commands the attention of top executives across the world as an author, speaker and revolutionary.

Together with his co-author, Jonas Ridderstrale, Nordstrom has written two of the most colourful books to be found on the business shelves. The first, Funky Business, was a manifesto for new business. It called on executives to forget the old order and embrace a new business world, driven by talent.

Their new book, Karaoke Capitalism, rewrites the rules for revolutionaries.

Nordstrom counts Virgin Atlantic among those revolutionary companies that are successfully breaking with the old order.

Q: What is Nordstrom's take on Virgin Atlantic?

A: I have worked with airline companies before but Virgin Atlantic, in particular, has been trying to do something rather different. I firmly believe that it is on the right track. Virgin Atlantic has delivered so far and, hopefully, it will continue to deliver.

Q: You talk about the need to be a "fit" or "sexy" company. What sort of company is Virgin Atlantic?

A: I would say that Virgin Atlantic does not take a "survival of the fittest" kind of approach. To me, survival of the fittest in the airline industry means being extremely fit. I mean an easyJet or Ryanair, where you cut everything out down to the bone and marrow of what an airline company is and you fly from London to Rome for maybe £50.

Virgin tries to build its success on attraction, on being perceived as sexy, as being fun and colourful - taking care of you and me or any other passenger in a particular way, such as an experience of flying Disneyland or flying the St Martin's Lane hotel.

Q: If you were to compare Virgin to something, what would it be?

A: I would compare it to BMW, which is definitely not the cheapest car. Many perceive BMW to be an extremely attractive or sexy car and they are willing to pay a bit extra for that feeling, for the smell of a BMW, for the sound of a BMW's door when you close it - these are small things that create that feeling.

Some of us would feel that this is really not for me and would choose a Skoda instead. That's a part of the gig - you present yourself in such a distinct way that you enable potential clients to say "yes" or "no". And some of us say not only "yes" but "wow!"

Q: As well as the survival of the fittest, Darwin also identified the cumbersome peacock's tail as a crucial advantage when it came to the game of attraction. Is Richard Branson a peacock and Virgin Atlantic a peacock airline?

A: Definitely it is a peacock airline and he, as a person, is peacockish.

This is a huge peacock project in the airline industry so it fits very well with the entrepreneur.

Q: How is Virgin Atlantic helping to revolutionise the airline business?

A: The airline industry has seen a limited amount of originality. It has not been exposed to competition - particularly in Europe. That's because it is based on companies such as British Airways, Air France or Alitalia, which were granted a kind of local monopoly.

They have not had to focus on their competitive advantage. Just recently, two more announced they were entering Chapter 11.

If you take the telecoms business, which started to deregulate somewhat earlier than the airline industry, it is the newcomers such as Vodafone, not BT, that have been able to do something in that industry.

The others did not have the ambition, the insight or the drive. The same kind of thing is happening in the airline industry. A number of companies, including Virgin Atlantic, that did not even exist until 20 years ago are out-competing some of those giants of the industry.

Q: Is Virgin Atlantic making the rules?

A: The airline industry has been in a significant downturn where it has been necessary to focus on survival rather than anything else. You have had to be innovative in order to survive. Now is the time to put a lot of effort into launching whatever frill you can come up with, to build this nimbus around Virgin. I think the time is now - today - and Virgin definitely has the ambition.

Q: Is Virgin Atlantic breaking some rules?

A: It has to communicate two things at the same time. On the one hand, it is innovative, fun, dramatic and rule-breaking; on the other, it is safe, reliable and sound. Virgin wants to be one of the safest airlines in the world. And, of course, it is not a prime target for terrorists for the simple reason that national carriers are prime targets for terrorists.

Q: You identify global tribes of people. Does the Virgin Atlantic brand tap into the psyche of global tribes?

A: There's an enormous opportunity for companies such as Virgin to break out of this nation-state thing. British Airways, Air France, Turkish Airways and other airlines are based around the concept of a nation. Virgin Atlantic is not an airline for the British people primarily. You need to start thinking in terms of what your customers have in common so you can offer them your product and the service no matter whether they are Spanish, French, Italian or Finnish.

Virgin is introducing this logic - together with a number of other companies in this industry - and I think it is the way to go. I firmly believe this approach will be a success.

Q: In the world of karaoke capitalism and copycat companies, do you think other airlines will try to copy Virgin Atlantic?

A: Yes, definitely. If it is successful, definitely. Although some of the national carriers have witnessed all the changes in the airline industry, they have not been able to follow because they have traditions, procedures, reward systems, organisational structures and people that are focused on something else.

Q: Massages, manicures, recruiting cabin crew to fit in with the brand, ice-cream cones for passengers - these have all helped the airline to stand out. What next?

A: There is more to be done on turning the seats, particularly for business travellers, into a combination of a mobile office and a hotel. Even if Virgin's Upper Class is very, very good, it's not a cosy hotel yet.

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