A View from the Top: Josh Bayliss, CEO of Virgin Group

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Josh Bayliss flies overnight on Virgin Atlantic’s red-eye from New York and looks as fresh as a daisy. A good seat – or rather one of the beds – in the Upper Class cabin means he’s slept most of the way. “Luckily I’m a good flier – I had a very good sleep,” he says. You’ve got to believe him. This is not some spin for Virgin. Bayliss spends half his life flying around the world checking on the 80 or so Virgin companies in 34 countries of which he is the boss.

In the last month alone he has been to Australia, the UAE, the Caribbean, around Europe and the to the US. Twice. Most years he travels around the globe up to eight times – that’s about 200,000 miles a year.

Phew. At least he doesn't have to worry about upgrades. And he’s ready to go up into space too, when Richard Branson’s Virgin Galactic starts taking passengers.

Earlier this month Virgin began feathered flight-testing for VSS Unity – its second SpaceShipTwo craft. The company expects to be ready to set the date for its first commercial service soon.

Will he be on the first flight? “I won’t be on the first trip as Richard and his family will be,” says Bayliss. “But I’ll certainly go, although my wife is not so keen on my going. She doesn’t like flying at all.”

Not content with conquering the skies, Virgin is also taking to the oceans with Virgin Voyages which promises to “Make Ship Happen” and where passengers are “sailors” en route for “audacious and romantic travel”. Or as Bayliss puts it, cruises are booming around the world and Virgin sees a huge chance to reinvent the experience away from the image of tacky casinos and the blue-jacket brigade to “serve the customer better”.

It’s also one of Virgin’s biggest investments to date: a nine-figure sum which is going towards building three new cruise ships which will cost a whopping $2.5bn or so. These are being built at the Fincantieri shipyard in Genoa. The first cruises, from Port Miami to the Caribbean, are due in 2020. Potential “sailors” are being assessed on what they would like to see on board, and where they would like to go, to help Virgin design the ships and plan new routes.

Like Voyages, Bayliss says Virgin Hotels is another example of how it is scaling up new businesses quickly, using their own capital as well as outside partners. And it seems to be working. “Virgin has already won awards for the Chicago hotel opened recently and another in San Francisco opens this year,” he says. “Then it’s going to be Palm Springs and Nashville and another six or so across the US. The US is big for us right now.”

“Our playbook is to build out of big platforms. We like to take the long-term view and want to achieve scale which is why we partner with investors like pension funds, sovereign wealth funds and family offices. For example, Brait is now majority owner of Virgin Active and Bain Capital is a big investor in Voyages.”

If only the journey to the Virgin mothership were as smooth.

I catch up with Bayliss in the upstairs foyer of the Virgin HQ which is buried away inside the Battleship Building, built in the 1960s as a British Rail depot. It’s a good name. Not only does it look like a Battleship but it is a battle to find, hidden away in the crutch of the flyover and at the back of Paddington station in west London. Even taxi drivers don’t have a clue how to get there. Although the Battleship is undoubtedly dramatic, I can’t see any reason for choosing it as a global HQ other than price. Was it cheap? Bayliss laughs and says he chose the place because it’s so handy to get to Heathrow. “It takes 15 minutes to the airport. Apparently they used to hold raves here when it was unused for a while.” And the building overlooks Regent’s Canal where Sir Richard had his barge and from where Virgin set out some 40 years ago.

Bayliss looks ridiculously young and incredibly fit and he is of course both those things. He’s just turned 44 and has been running Virgin for six years in which time he has refocused and tidied up the web of companies. When on the ground he spends as much time with his family in Geneva – his wife Sophie, daughter Maya and son Tom – as he can. He runs, cycles and cross-country skis, and also enjoys randonee – that’s the uphill stuff.

The Kiwi-trained lawyer came to London en route from New Zealand heading for a new job in Barcelona – he studied Spanish as well as law. “I came to London and met a woman and stayed. That was the end of my Spanish odyssey. She’s now my wife.” Lady Luck appeared again when Bayliss was on the tube and met by chance a fellow Kiwi lawyer who was working as a legal recruiter. She helped find him a job at city law firm Slaughter and May, which is where he was working when he found out about the job as a general counsel at Virgin.

You can see why Sir Richard chose him. He’s someone who can keep up with the bearded one’s energy levels. Bayliss has a new beard too – the result of holiday skiing. His children gave the thumbs up. “My 12-year-old daughter is the boss. I do what she says.”

He’s clearly incredibly smart, not only because he listens to his daughter: running a business so closely identified with one man’s personality can’t be easy. It’s a big empire. Last year the Virgin Group had globally branded revenue of £16.6bn, employed 70,000 people around the world (including 50,000 in the UK) had 60 million customers and was worth about £5bn. One of the biggest chunks of the business is Virgin’s 34 per cent stake in Virgin Money, the highly successful listed banking operation run by Jayne-Anne Gadhia.

There are now 80 Virgin branded businesses in Sir Richard’s portfolio. Some are wholly owned by him. In some, Virgin has a stake while others have been sold but still pay a royalty for using the name – like Virgin Media. Those that use the Virgin name pay a fee, between 0.5 per cent and 5 per cent in royalties, of revenue for using the brand. There are another 50 companies in which Virgin invests, ranging from concert organiser Sofar Sounds to 3-D robotics.

So how does he sleep at night? Bayliss smiles but doesn’t blink. “We have fantastic CEOs. That’s the secret. Appoint fantastic people like Jayne-Anne at Virgin Money who is incredible or Tom McAlpin at Voyages. It helps that we run a very open transparent business, quarterly updates for staff and weekly emails so everyone knows what is happening.”

And what about Brexit? Both Bayliss and Sir Richard were big Remainers, arguing the economic case for staying in the EU was a no-brainer. “There is still uncertainty around and business doesn’t like uncertainty. But we are leaving and we need to get the best deal possible.”

More pertinently, perhaps, what about Virgin’s succession planning? “Richard says he will be around forever. And I believe him. He’s still very involved but not in the day-to-day detail,” he says. “But it works well. He’s a non-executive of Virgin.” And both Branson children, Holly and Sam, are closely involved in the business: Holly is chair of the board of the Virgin Unite foundation while Sam, who runs his own production company, is also involved in many of the philanthropic ventures.

“The model works well for the family. I think they are quite happy with the way it is run.”