Sir Richard’s mastery of opportunism

Sir Richard Branson, the billionaire entrepreneur, certainly knows how to throw a good party. Last week he was in New York to celebrate the 25th birthday of his airline, Virgin Atlantic, with friends, celebrities, customers and the media. Samuel L Jackson (actor) rubbed shoulders with Vivienne Westwood (fashion designer), Buzz Aldrin (spaceman) and Ian Botham (cricketer) in one of the more unusual VIP gatherings seen this year. But as Sir Richard was thanking the passengers and crew that have made his airline a success, he could not help but take a dig at his arch rival – British Airways. He stated at a press conference in London, shortly before taking the birthday flight to New York, that the government should not bail out a beleaguered BA. The transport minister, who was in attendance, duly confirmed that BA would receive no bailout. In one brilliant sideswipe, Sir Richard managed to imply that BA was in such trouble that it was seeking a government bailout. It isn’t. And it hasn’t. But now everybody thinks it has. You have to admire Sir Richard’s opportunism – unless you are BA of course, in which case you are probably cursing his name. Opportunism is something that Sir Richard is clearly a master of. Indeed, I’m beginning to wonder whether it is his defining attribute. Take, for example, his foray into Formula 1 earlier this year. He struck a bargain sponsorship agreement with the Brawn F1 team at a time when many people were wondering whether Brawn would even make it to the starting grid. They did and now they are leading both the drivers’ and team championship and Sir Richard’s opportunistic sponsorship has paid off handsomely. I have heard some businessmen bemoan this opportunism, implying that Sir Richard is just lucky. That smacks of jealousy to me. The golden opportunity missed will always rankle more than a brilliant invention or market-changing product because it is something that we could all have done, if only we had spotted it. But that does not make opportunistic success any less worthy. Rather, it should be celebrated as one of the most important business skills, not demeaned as a form of cheating. Another great piece of opportunism was revealed last week when Xstrata, the mining company, proposed a £45 billion (Dh265bn) merger with Anglo American. The timing was perfect because Anglo’s shareholders would normally have dismissed a straight merger of these two companies out of hand. They may have roughly the same market capitalisation but on an asset-by-asset basis, Anglo is clearly the better bet and shareholders know it. Unfortunately, Anglo has been beset by problems recently and a number of major institutional investors have lost patience particularly with the chief executive, Cynthia Carroll – one of the most powerful businesswomen in the world. Carroll paid about $5.5bn for MMX, a Brazilian iron ore company, at the top of the market and analysts now believe that the operations are worth half as much. Of course, the Anglo boss is not alone in making a decision in the boom years that has come back to haunt her during the recession but the problems with MMX extend well beyond just timing. I happened to meet one of Carroll’s rival CEOs on the day that Anglo announced the MMX deal and he laughed until there were tears in his eyes when he heard what she had paid. If Sir Richard has opportunism in his blood, Carroll may have the opposite. Keep up with the latest business news from the region with the daily Emirates Business 24|7 newsletter. To subscribe to the newsletter, please click here .