Mindy Grossman, CEO of HSN, Inc. on Culture Trumps Strategy at Stanford GSB View From The Top Talk – Transcript
Interviewer: In preparing for this interview one of the things that I learned about you is that you make a point to eat lunch with most of your employees at HSN, particularly for their first, fifth, 10th and 20th anniversaries. And I’ve heard you’re known for sitting down and asking, why are you at HSN and what keeps you here? So Mindy, to get us started, would you mind if I ask you why are you at HSN, and what keeps you there?
Mindy Grossman: That’s a great question, and to your point, I learn more from those breakfasts and those lunches than you can by reading any report, or doing anything. You’ve got to have the pulse of your company, what people are thinking, what they’re feeling and I believe that culture trumps strategy, and I know people have written about that. But I think that you can’t have a long-term, successful, sustainable company unless you have an incredibly engaged culture, and I’ve been fortunate to work for many of those, and it certainly helped me in the transformation of HSN.
But I think where I want to start, to kind of get to the point of how I ended up making the decision to go to HSN which at the time was a pretty big risk according to many people. And I’m known as somewhat of an unconventional risk taker and it really started
Interviewer: Pop ahead to the next —
Mindy Grossman: Yeah.
Interviewer: She’s just driving the interview for me.
Mindy Grossman: You know, my career, and the fact that I’m even in this business was definitely not my original path so. Just quick story. I was – I finished high school at 16 in my junior year, went into college I was in English literature and Philosophy major and there I was in my last semester at GW. I was engaged to be married to my high school sweetheart who was going to become a doctor and, I was graduating and I was going to go to law school.
So if any of you can relate it’s every stereotype of a Jewish mother’s dream. And I was an adopted kid. First one to ever go the college. So everything was in the stars. And I literally — and I’m sure, you know, I say that I woke up. But I’m sure it was on my mind but I did wake up one morning and said, I can’t do this. I’m living someone else’s life and I have to live my life. And with that, I called my folks and I said, I have something to tell you: I’m not getting married. I’m not going to law school. And I’m leaving school right now and I’m moving to New York because I’m going to figure it out. And that’s what I did.
And I moved to Manhattan in 1997, and said I know that I want to be in a creative field. I may not be the creator. And I don’t know how I said it in my head at the time, but I said I want to be in the business of making creative people successful. And it’s the first time that I realized that, having the power to do that was, it really gave me the feeling of if you believe in yourself and you really, to the point that Jennifer made, passion, purpose, and impact and the quote that you see up there.
Risk-taking and boldness is the essence of transformation.
That moment that I picked up the phone, I made that decision that transformed my entire life. It wasn’t picking up the phone and going, I’m going to be the CEO of a public company, I was picking up the phone and I’m going to do what I’m passionate about and I’m going to be able to take chances. And so throughout the course of my career, I think people now have made it kind of a joke, okay, what is she going to do next, because it’s going to be something different. But, it was leaving Tommy Hilfiger to go run Chaps Ralph Lauren when that was the hottest company. But I knew that there were going to be very few opportunities for a woman president in the men’s wear industry or deciding to leave a company when I didn’t feel the values of the CEO of that company lined up with me and I quit without having another job, which made Ralph Lauren come and hire me because I’d been running another business. It was making a decision to start up Polo Jeans. It was making a decision to leave Polo Jeans and go to Nike which was also very unconventional because I was one of the first outsiders to really come in to the company, especially the fashion doyenne from New York.
And then fast forward to how I made the decision to go to HSN. I’d been at Nike for six years, and it was a spectacular experience. I worship at the altar of Phil Knight, he’s an amazing man. And I had great opportunities at that company, I was the most senior woman, in the organization. I ran their global apparel business, but I also had the opportunity to spearhead kind of their transformation to really be more emotionally connected to women. Some of the work on the Nike foundation and the girl effect.
But I was at a pivotal point in my career. I was in my late 40s and they had just announced a new CEO, a new president, both of whom were about 50 and had been at the company a long time and, most importantly they were in very good health. So as that succession plan wasn’t looking like it was happening, so fast but it was truly like, what was life after Nike going to be like? Where was I going to go? And I think, too many people were like she’s going to go run the Gap or she’s going to go run this, and I just knew that wasn’t the case. And I had the opportunity to travel the world and really see how technology was changing the landscape, much more so yet than it had in the United States. So really the explosion of mobile in Japan and what was happening around all the marketing efforts, whether it be the Olympics or World Cup. And I just said if I’m going to do anything I want to be in a direct-to-consumer business. Because I’d worked with all these great story telling brands and we would create the narrative around the product and we would create the technology, for example at Nike. And we’d have all these stories.
And then I would see my dreams dashed by going onto a selling floor and nobody was telling the story the right way to the customer. So I said I wanted direct-to-consumer business. I want a business that’s going to be able to take advantage of what’s happening in technology and what’s happening in changes in consumer behavior because the way consumers were consuming, right? Media, information how people were changing their habits of shopping. How could I take advantage of that?
And so when I got this call from Barry Diller, to say I got a call from a recruiter that, that Barry Diller wants to talk to you about going to take over IAC Retail. And I said that’s great, but what the hell is IAC Retail? I never even heard of it. And they said well, it’s HSN and this portfolio of these catalog and e-commerce brands. Some of those I had heard.
And I said, well, not really sure but you wouldn’t want to have lunch with Barry Diller, but if I’m going to have lunch with him, I better have a point of view. So give me two weeks, let me do all my due diligence, let me see if this is something really interesting. So, I completely immersed myself in the business and the brand and the competition, and the marketplace and I’ll never forget. I was — I’m watching and I’m glued, and I wasn’t even familiar with it before, I’m glued to this channel, like constantly. And my husband’s like, oh my God, are we watching this again?
And I also was a big Food Network freak, right? I love Food Network, so this was eight years ago. And I’m going, what would I do with this, what would I do with this? How could I make it more engaging and interesting? And all of a sudden, I was watching Food Network and I clicked over to HSN and Wolfgang Puck, who was the only person in this video, that was on HSN at that time eight years ago. None of those other people had been launched. And the light bulb went off, and I said, we have to stop thinking of this as a selling channel. And we have to start thinking of it as a network that’s going to inspire people to want things. I started getting really excited. Well we could be like HGTV and Food Network and Style and DIY and we can transport people through experiences. And that’s when I had lunch with Barry and I said, okay, here’s the big idea. If you are willing to buy into this idea, I am willing to take this plunge and do this. And if you are not, it’s not really interesting and in great Barry fashion, because he epitomizes that, he said go for it.
Now, little did I know, yes I was the eightieth CEO in 10 years. The business has stalled. It was broken. But, I think that sometimes the biggest challenges actually transport you to the greatest places.
Interviewer: So you decided to join HSN as CEO In the first 90 days, what was your top priority when you walked into the business?
Mindy Grossman: So I knew that, when you have eight CEOs in 10 years, that’s so disruptive to any culture. And, what happens is, the culture freezes. I always use the expression, it’s like Miss Havisham in Great Expectations. You know, there’s cobwebs. Because people are just waiting for the next person to go. So, no strategy has been implemented. The business wasn’t performing, so people were really feeling downtrodden. What were their opportunities going to be for success? They were trailing number two against the competition.
And so I knew that I was going to have to make people feel that something was very, very different. So, my head of HR actually called me and said — and I had not visited the campus before I took the job, because they were making all these changes before I came in. And she said, “Well, how do you want me arrange your first day?”
And I said let me ask you a question, “What does any other employee do on their first day?”
And she said, “Well, they go to employee orientation”.
And I said, “Well, I am going to go to employee orientation”.
And she said, “Really?”
I said, “Absolutely”, because it’s going to give me an insight, and I think it’s going to make people feel that it is different.
So there I am, my first day, I go into this room and there’s like, 25 people, and everybody goes around the table and introduces themselves. And somebody goes, well, I’m a merchandising assistant, I’m in backstage television, I’m in call center, and they get to me and I say I’m the new CEO. And you could see.
Well, that whole day I went to orientation. I was in the call center, I was in backstage television, I was going through creative, I was understanding the shows. I actually answered calls. Well what happened, it went viral. It went viral throughout the entire organization.
So by the next day when I got up and did my first townhall, A) it humanized me. B), it gave me context of how to articulate what it was we needed to do. And it made people feel that I was going to be accessible and authentic.
And so when I got up the next morning, and I said, here’s why I joined the company, and we were talking earlier about story telling. I knew the first story I had to tell was why was I there, why was I passionate about the future of this company, and I had to make it personal. But because I had that experience I was able to make it personal.
So all of a sudden people felt, that it is different. We do have a future. And we’re going to go with her on this path. And I think that really igniting the culture and being believable and then setting a vision is what changed the entire business dynamic.
Interviewer: You’ve talked a lot about the importance of culture, and resetting the culture at HSN. A lot of leaders talk about the importance of culture. I’m wondering if you can pull back the curtain a bit for us and tactically, apart from townhalls and telling your personal narrative, how did you build the culture at HSN to what it is today?
Mindy Grossman: So the way I think about culture is I have 6,000 employees, every one of them go home at night, every one of them has neighbors, every one of them visit and somebody or they meet a new person and somebody goes who do you work for? You want that person to be your greatest evangelist. You want them to be proud of what they’re doing. And they’re embedding themselves in the culture. And very often when people come to visit at HSN, they say: oh, my God, it’s almost like a cult. I think that’s a good thing by the way, in a good way, not a bad way. So is Nike, so is Ralph.
So what I had to do was make employee engagement the number one priority of the company as while I was working on the brand and the business strategy. So with my executive leadership team, I said we’re going to make employee engagement our number one strategy. The second thing I did, was I was made it very clear to the organization what my expectations were. And there were three sort of people. There were the evangelists, that were like, woo-hoo, we finally have someone here who is going to like take us somewhere. The second group of people were like, sounds interesting, but let’s see. You know, they needed to give it time to get through the period. And then the third people were the blockers. They were the toxins, right?
I believe that you have to get rid of toxicity in any company that you have. I don’t care how smart, I don’t care how talented. I don’t care how long they’ve been there. If somebody is going to create a toxic environment you have to make a change. Well, I made it very clear to people. Here are my expectations.
I think the other thing that’s important, I think too many CEOs who go into companies that are not performing make the incorrect assumption that everyone in the company is probably not talented. It’s usually because the leadership was not inspired and it wasn’t great leadership.
So what I had to do was do a talent assessment. And I had a lot of talented people, that were actually keeping the company together throughout this time. So I have the same, my CFO, who is now CFO and COO, Judy Schmeling has been there for 19 years. She’s been my partner throughout this whole thing. I’ve had the same head of HR, I’ve had the same operational people. But I did have to bring new people in to the front of the business who were going to have to understand what a lifestyle brand was and understand kind of what we were trying to accomplish. So I had to bring in a new head of television, I had to bring in a new head of creative. I had to make the company become a digital company et cetera.
But the number one thing I had to do was inspire people around a vision, and I think when I’m always asked about what are qualities of leadership, that ability to set that vision, and bring people along with you and inspire them to get there is critical.
So, what I did six months after I was there, I set a giant tent up. We have a 70 acre campus in Florida. So we have seven television studios, and, it’s huge. And so I erected this giant tent, and I had 2500 people, and then I broadcasted to our other facilities outside of Florida. And we did a multimedia presentation, and we rolled out the new vision. The mission, the strategy, we wrote a Manifesto to our customer, and we basically told the story of what our brand was going to be in the future and how we were going to get there.
And at the time, when we showed the video at that event, we had none of these personalities, so we had to use other people’s creative to get us there. But that was what launched all our new creative, our mission which was to bring the joy and excitement of new discoveries every day to our customer, and our vision for being a disruptive force and changing the landscape of retail. And they were very bold statements at the time considering where the business was, but if you know, I think too many people marginalize things. My husband who’s an economist and a physicist, he uses this expression. Too many people are guilty of infinitesimal incrementalism, right? You do have to set both goals, but then you have to give people the path to get them. You just can’t put them out there without the strategy.
So I think it was a combination of making everybody feel, they didn’t have a job, they had a mission. And if they embraced that mission and became evangelical in a way that we were going to create something that didn’t exist, and we were going to change the face of the business. And that’s what excites people to this day.
When I have those lunches, and I go why are you here and why do you stay? The people, the culture and that we are connected to our customer. We’re doing something different everyday. The company has an intellectual curiosity, and we’re innovating and we want to be a company of firsts. That’s what they say.
Interviewer: This past year you’ve had a pretty big innovation in your brand. So you’ve re-concepted from, there’s no place like HSN, to it’s fun here. Tell us, we know that brand is a lot more than a tag line. How do you reinvent a brand?
Mindy Grossman: Yeah, you know, it’s interesting. I think that there are different iterations you kind of go through. So when I first came into the company, it truly was transformation. I literally had to change the way everyone, employees, the marketplace, our customer, when we went public, the shareholders, how they thought of us as a company, that we were a content company versus a selling or shopping company, that we were an innovation company, all of those things. So, that was transformational, and we built on the brand strategy, and the business strategy.
Well, about a year, year and a half ago, we were like, okay, we now need to unlock that next level of growth. And we’re going to have to be a little disruptive. And I’m a big believer if you do not disrupt yourself, you’re going to be disrupted by somebody else. And I said, we need to disrupt our business a little. We have to reorganize how we’re structured. We have to re-deploy assets against the things that are going to be more important. It’s not just watching a live show on TV, we’re going to have to change how we create content for digital, and how we think of ourselves. We’re going to have to change how we innovate, and we’re going to have to look for strategic partners and how we’re going to get there. And we’re going to have to make some massive bets on capital expenditures around systems and supply chain, et cetera.
But on the brand side, what I said was, you know, we’ve articulated there’s no place like. But now we have to answer the question why. Now we have to tell her why. We told her this is unique, now we have to tell her why. And so we did a lot of consumer work. We met with a lot of our customers. We do all the time. We work with two different companies. We work with an insights company and then we work with Doetsch to both say, what are the things that she’s feeling? But what are the things that we have to do to be able to bring a new generation of customers in without alienating our core customer, how are we going to surprise and delight?
So, we took all that work and we just, we came up with, the answer to that question is it’s fun here. It’s spontaneous. You never know what’s going to happen next, as I said our store changes everyday. At least once a day, one of our team is saying, you can’t make this stuff up, because you got to remember, it’s live 24 hours a day, it’s like Vegas. Right, you are there at 2 o’clock in the morning, we are pumping the oxygen in and you don’t know what time — and that’s really where, what we are about, and one of the things that had really meaning to me, and why I really believed in this tag line. You know, everybody remembers 2008, 2009 were pretty tenuous times and we went public in August 2008, probably one of the last IPOs that happened. And I’ll never forget I spent the summer of — it seemed like a good idea in November 2007 by the way. But Judy and I spent the summer raising the bank financing or raising the debt. So, imagine two women going into all these financial institutions explaining to them why they needed to invest in a company that at that time was all about shopping.
But we were determined and we raised every penny and more, and we did go public. Our stock came out at about $10 and in December 2008 it was $1.43 at our market cap, was smaller than our receivable balance and had nothing to do with the fundamentals of the business. It had to do with the fact that the world was falling apart. And I needed to keep the organization forward, moving forward. It’s probably one of the toughest leadership times I ever had, because I knew I had the fate of 6,000 people and their families at stake. I also knew our strategy was working. So we really had to go out and focus on the sell side.
But I also had to focus on my customer. Because what I was feeling, and what my employees were feeling, she was feeling. The world was falling apart right around her, and I remember saying to our organization, she may not be able to buy anything right now, but there is never going to be any bad news on HSN. We’re going to not acknowledge what’s happening, but you know what? Instead of selling high end jewelry, we’re going to tell her how to save money and how to cook at home for her family. We’re going to tell her why this heater is going to save her a fuel bill. Oh, we’re just going to make her feel great, if she wants to buy a mascara. And we’re really going to respect her and make her feel great, if she can’t buy anything. This is a place that she can come and be a respite for the storm, because it is fun here, and a lot of people weren’t having fun then.
And I think that our approach, both in our employees — the second thing about that time, I think the companies who have really not just survived but have thrived post that period, are the companies that decided to take it as an opportunity to be offensive, and not defensive, and invest appropriately and redeploy appropriately, and galvanize against something. I’m a big believer that, how we managed that period was a big part of our success and is what our customer responded to. And she continues to respond. And that’s why we measure not just employee engagement but customer engagement. And that idea of giving her experiences every single day are so important.
Interviewer: And since you’ve weathered that storm, HSN has seen phenomenal growth. And one thing I am curious about is as a business leader, how do you balance initiating things to drive revenue and spend per customer, with ensuring that you’re keeping the customers best interest in mind and they’re not spending beyond their means? So you can disagree with the premise, but I think if you get, if you get really good at what you’re doing.
Mindy Grossman: No, no, no I think. No, let’s talk about trust, right? So, trust is across all your constituencies, right? So if you fast forward today, we have a $3 billion market cap, and a stock price of $56. We’re a public company. So, my belief is that the best companies, yes they have to execute quarterly. But you run your business for the long term, number one, that’s really critical.
So, you talk about trust, your employees have to have trust, your customers have to have trust, your shareholders have to have trust. And it’s a combination of trust and respect. And I’m asked the question, how can — I was asked the question earlier, well you talk about trust all the time. But, you’re kind of really selling something to someone. And my answer to that is, yes, because we’re hsn.com, not hsn.org. And we have to have revenue, and we have to have profits. But we have to do it the right way. So, I have to have trust and respect for my customers, so when I got to the company they were selling products that weren’t of the quality that they should be. They had moved 30% of our calls offshore, so she wasn’t getting the service and the respect when she called in that she needed to be. And we weren’t respecting her as an individual.
So we completely changed the dynamics and said that we are going to invest and I’m willing to lose profits in the short term to create an experience that was going to retain my customers in the long term. So, we actually spent more even when we weren’t performing as a business. We brought all those calls back, we created a work at home program, we added a thousand jobs in our local communities. We were — that enabled us to get a higher level individual that works for us and that program is now six years old, and has expanded and we’ve written a white paper. Now other companies use it. We now have some of the highest, not just employee engagement scores, but customer engagement scores. So that was one.
Number two, we were very — we used a very strong filter in the products, the stories, and the storytellers we were going to have. And we made quality our number one priority, because we actually have to excite the customer twice. Once when she feels this is a product that she wants, and the second, when she gets it home. And the last thing we want to do is disappoint someone. We want her to get even more excited.
The third thing that we did was we eradicated the word selling in our vernacular. And we changed it to we need to inspire people to want to engage with the product. So, if we are exciting her and mink size on the air, and he is creating an incredible demo, and showing you how you can cook your dinner more quickly, because you are going to have the slow cooker. And you think that’s great for your family? Our job is to give ideas, give information, give education, and hopefully entertain. So, our customer can make an informed decision. An informed decision of what she can afford. An informed decision of is this product right for her. And an informed decision, so she can then communicate that to other people.
We also made it very clear that — and we communicate that if you watch any of our shows, you can return anything. You can return anything. Because if it doesn’t make you happy, if it’s not what you thought you wanted, we care more about you than anything else. That was a huge paradigm shift for a company. And I get letters from our customers all the time, and I think that they feel like they’re more family than they are customers, and I think that’s really important.
Interviewer: Speaking of family, I’m wondering if we could switch gears a bit and talk a bit about your personal life. Who are the people in your life that have inspired your sense of self and confidence?
Mindy Grossman: You know, I’m fortunate to have really had a few. So, it’s interesting. My mom, got married when she was 18. She couldn’t finish high school because her mother got very sick. My dad was 22, when they got married and he didn’t – he was in the armed services. And she tried for ten, 12 years, couldn’t have children. And finally, when she was 30, my dad worked nights in the produce business. And his boss, who he worked for, gave my parents some money, so they could adopt me. And so, from the time I was like little, I always remember my mom saying, you were special. You could do anything you want, and I felt part responsibility. I was kind of a little serious, I guess when I was younger to prove that I could do.
But, there was one thing my mother always said to me that has stayed with me my whole life. And it probably annoyed me sometimes at the time which it probably does my daughter now. But, when something would happen, whether it was good, or whether it was bad, if a boyfriend broke up with me, or something good happen. And I was complaining, or I was excited, she said Mindy, everything in life is [bechert], means it’s meant to be. And what it’s made me do is, I never look backwards. I only look forward. Because it’s like that movie, Sliding Doors, who knows what could happen if that bad thing didn’t happen, you know, what, what else could’ve been behind that door? Which is why I believe I’m an optimist. I have been quoted as I only hire takers, I don’t hire [eures]. I’m not very good at negative energy. But it’s said everything in life is meant to be, and I really embraced that. So that’s probably from a personal perspective.
And then I think from a business perspective, there’s definitely been a few things. Working for Ralph Lauren, you’re really — you’re at the altar of brand, right? And I’ll never forget when I was launching a number of our brands, he used to come and walk through the show room, and he would show up, it would be like — and he would go up to something, it could be a fixture. Or it could be a shirt and you know, Mindy, tell me why it’s Ralph Lauren before I put the label on it. Where did it come from, what was it inspired by, what’s the integrity behind that product, and why should it be part of my brand?
Second thing he taught me was, it’s more important what you learn to say no to in your brand. Because if you make that one mistake you will violate the trust of what that brand is, and there have been quite a number of, whether they be brands or celebrities, or personalities that have been an opportunity to come to HSN, and I probably could have done a lot of business. But I knew they weren’t right for our brand. I knew they weren’t right for our culture. I knew they weren’t the right kind of people. And sometimes you have to let business go if it’s not the right thing for your brand.
And then you know, Phil Knight who is one of the most inspirational, amazing people in what he believes in, in terms of inspiration and innovation and culture and humanity is so important. But the one I really remember, I was having this conversation with him and I must have been frustrated that one of the people on my team, I’m like, I can’t get them to evolve, or move up. And I was trying to fix people, right. And, he said — he finally said to me, Mindy, you will be a lot more successful, a company will be a lot more successful. And you will be a lot less frustrated if you stop trying to make ordinary people extraordinary and surround yourself with extraordinary people. And, I always learned that, there’s an extraordinary in everyone. And it doesn’t matter how many degrees you have. It doesn’t matter what your background is. It doesn’t matter what your providence is. You need to look for extraordinary people with soul. People who have the humanistic characteristics, as well as the talent.
And then lastly, working for Barry, even though it was only a couple of years, it’s like, idea, and I was always a risk taker, but really to understand what that means in today’s environment that you’ve got to be able to block out the external noise, and do what you think is, is right, even if it goes against the grain.
Interviewer: I want to make sure we leave some time for questions from the audience. But before we do that, you have done a lot of these interviews. And I have a lot of questions but we’re not going to have time to get to today. I’m curious when you are done with an interview, if you’re ever left thinking, I wonder why they’re not asking me X. What should we be asking you that we’re not asking you?
Mindy Grossman: I have found that there’s a lot of smart young people who really know what questions to ask. I wish some of you were at some of our investor conferences. Because you ask much better questions. I think too many people ask the business questions. I think what we talked about today is really important. I think you have to ask the soul questions. What drives people, what motivates people, whether it’s an employee or a customer? And when I look at the leaders that I respect, and I go to all these conferences, what I want to hear is the why. I want to hear the why behind. When I go and meet with investors, I know that they’re investing in the company, but they’re also investing in me and they’re investing in my leadership team. And I actually ask them to ask the tougher questions, ask the questions of, why do you believe this? Not just the numbers. Not just the things. What are they telling you? How do you look at your competition? Why do you think you’re going to be successful? It’s the whys. It’s the whys.
And you have to keep digging deeper, particularly as you’re deciding, what businesses you want to be in. And I talk to people a lot and I’ll say, what are you looking for? What are you looking for in a company? And I get the business side of it and I’m like no, no, no what are you looking for in a company that you think aligns with who you are and what your values are and is it a company poised for growth? Is it a company poised for success? And I think too many people get entrenched by big. They get entrenched by size. They got to get entrenched by opportunity, and what you think you can bring to the table. And that’s why that conversation about impact is so important to me because what impact was when I was 20 and what I could do, and I tried to have impact, and I tried to make other people successful that was my impact. What I think of impact today and creating value, what I think of impact today from me personally in philanthropy is a very different thing. If I’ve been privileged to be able to get to this point, I have a responsibility now to have impact beyond myself. So whether it’s my work at UNICEF or going into the field, or HSN cares those are the things that are the most rewarding. So again, it goes back to the why.
Interviewer:I have lots of questions, I’d love to ask you but, I want to give you guys a chance. So, we’re going to open it up for about five minutes of questions for Mindy, and then we’ll close it out of here.
Audience: First question from the audience here. Twitter was — Mindy, when you first arrived at HSN, how did you identify the people who you could trust and rely upon for your transformation?
Mindy Grossman: It’s a great question, and it was the first thing I needed to do. As I said before, I brought my leadership team together, as well as articulated to the company what my personal philosophy was, what was acceptable in behavior, and the people and the character that I was looking for, and what wasn’t acceptable. We very quickly defined what the elements of our culture were, and what people had to do and the type of people that were going to be successful in that culture. And then I really had to put that through a filter and determine who was not going to be successful and determine who was and make some hard decisions. And there were hard decisions.
There were some people who, I will tell you right now, have gone on to other companies, but I knew that they didn’t fit the future. And they wouldn’t fit with me. And they weren’t going to be a positive element of this transformation. And they were going to make it harder. And the key was is to get in my head. I needed people who could inspire people. I needed people who understood what a transition was to a lifestyle brand. I needed people that were going to be evangelists and worked to engage the culture that had positivity, that certainly they had to have the brains and the intellect and the capability, but it wasn’t about a resume, it was about who those human beings are and more important were they going to make an ambition and were they going to commit.
And fortunately, as I mentioned before, I had some very talented people, but what I really appreciate is the first people I hired, Bill Brand is now our CMO and head of business development for the corporation. Andy Sheldon is now opening our entertainment offices in LA. So all the people that came in, in the beginning, are still there because they still think it’s a mission. And I think that’s really important.
Dorothy Walter: Hi, I’m Dorothy Walter. I’m MBA 1. Thank you so much for coming in to speak with us today. I have a question about how you view HSN’s role in launching new brands. What are some of the success factors and also risks, and how do you wrap your head around that? Thank you.
Mindy Grossman: That’s a great question. I actually think of it as a privilege to work with new brands. And I think in today’s world, a lot of brands it gets, it’s harder and harder to tell their stories, right? Brands are distribution captive. There are less stores. There are less vehicles. The places you can’t tell your story, they’re very crowded. So, to be able to help a new brand or a younger brand, being able to give voice to their story is really exciting to me. So, I get as excited about the entrepreneur who created this product in her garage so her kids could learn how to flip and fold as I am, you know, Keith Urban and his guitar. They’re all rock stars, so what we do is spend a lot of time trying to understand what the brand wants to articulate and what the DNA of that brand is.
And the way I look at it, I have a competitor two and a half times my size. So if it’s just about how many of these you can sell in the first five minutes, I’m not going to be very compelling. But if my value proposition is that I’m going to be able to tell your story and I’m going to invest in understanding your story. And I’m going to invest in articulating that whether it’s through a set, whether it’s through an environment, whether it’s through a creative or whatever that is, and I’m going to bring your story to life. That to me is a relationship. And we will do everything possible to make that successful.
Now that is not to say that everything works, it doesn’t. I can do anything for a brand, but I can’t personally make the product sell if for some reason it’s not resonating with the customer. But we will do everything in our power, and we will never end a relationship disrespectfully or abruptly. We will be very clear throughout that process. And we’ve actually had some people that we didn’t have immediate success with, but a year later they’d honed their business or their product or their brand and we decided to relaunch them and have success.
So what do our teams do? Our teams are scouring the world for great products, and great stories, and great brands. We also have ideas, and we create them. What we’re doing with Disney for example, at the end of this month. We saw Oz the Great and Powerful. So we’re Disney’s partner for Maleficent, which is launching going into theaters at the end of March with Angelina Jolie. So we went out to 50 different brands from small to big and we had people create products inspired by the inspiration of the story. And we’re creating a 24-hour event on air. So, you have a little entrepreneurial brand next to a big brand. But what they’re all doing is just creating inspiring stories. And that’s what’s exciting for us, is to be able to do that.
Interviewer: One last question. No pressure.
Audience: Hi, my name is [Gillian Hill], I’m an MBA 2. My question is around how do you see your role and objective as a CEO today, and I’m wondering how that’s changed since you took the role on initially?
Mindy Grossman: So, I look at the CEO role as on multiple levels, right? I am responsible for making sure I’m creating sustainable value for my company, which is going to ultimately then create value for all the constituencies we have, whether it’s our customers, our employees or our shareholders. But I’m also responsible for being the shepherd of my brands and for my company. And I’m also responsible for creating sustainable opportunities and success for people. And I take all of that very, very seriously.
And I say all of that because sometimes, to your earlier point, they can be conflicting priorities. There are times where I have to make a decision, and I’ve not made the decision to make money in that quarter, because I’m not going to make the wrong decision for the long term of the business. But I’m very clear about why I decided to do something, and my shareholders understand because I’ve been consistent with our strategy and our story. For six years I’ve never deviated, so they trust the decisions that I’m making, even though it might have a short term disruption, are right for the long term value of the business. Which is why I think we have long term shareholders and great institutions because that really is my job, is to understand the choices and to make the right and educated choices for the long term success of the company.
The second thing is my job as a CEO to really lead and be a role model for what I do and what I say, both internally and externally. And it’s to set an example. And I take that really seriously, because the worst thing that I could do is sit up here and say, we do all of this. And then all of a sudden, I act differently. Or I say something different. It’s not real and it’s not authentic. So I have to kind of live, and walk the walk. And whether it be about why we launched the HSN Cares? Or what we have to invest in, or if I do have to consolidate a business, and maybe I do have to lay-off some people, because if I don’t, I can’t deploy the resources that will take the company forward. But anyone that knows me, knows that if I do that, I’m going to do it respectfully. And people are going to understand the reasons why. So I look at that role in very broad terms.
Interviewer: Mindy, most of us here today are thinking about what to do next now that school is wrapping up and charting career paths of our own with some uncertainty. And this is a quote that you said last year in New York, and this is something that I know you tell your daughter. I’m wondering if you could expand on it in closing for us as MBAs and how you might encourage us to leap into it.
Mindy Grossman: I think it’s really important that people not be afraid of risk. Now, there is a big difference between risk and suicide, okay. I just want to be clear. And what I mean by that is, don’t only look at what’s in front of you today. Don’t only look at what’s out there today. Find, take the insights of everything that you’ve learned. Take the insights and intellectual curiosity you have to look what’s out there. And say what do I want to be part of? What do I want — what do I want to get that experience, right? What do I see as growing? What do I see as, that next thing? It’s kind of like we’re looking at a lot of acquisitions right now and I’m looking for those things that are going to have the big growth opportunities, right?
And you have to decide what level of risk you’re going to take at any given point in your career. But the time when you can really do it and have the different experiences is early, right? I had a number of friends who I said to them, you are miserable, right? Why are you still doing this? Because they felt trapped. Never be in a position to feel trapped. Believe in yourself enough that you need to find those things that are – because if you are inspired, and you are excited, and you are a part of something, you are probably going to be successful because you’re doing what you love.
And you know, it’s interesting, my husband went to school, got his undergraduate, his masters and his post graduate in applied mathematics and physics. He’s like a real geek, he said he was Steven Hawkins, right? And he goes I don’t think I want to do it, then he went to law school. And then he went, and he practiced law for five years, and he was miserable. And, this is kind of when I met him, and he said you know what, I can’t do this. And he just decided to give up law and made a segue and said, I want to figure out maybe how to go into banking which he did, and he went and he said I’m going to make my segue from, into derivatives and swap documentation and went into finance.
Interviewer: He had some backup options.
Mindy Grossman: But, he’s always been one of those people that at his true heart and soul I think he’s an academic, but he’s got this incredible intellectual curiosity and the most important thing for him is, I need to fill my intellectual curiosity. So that was always his guiding post. Mine was I got to be inspired and I have to be creative, and I have to have an outlet for my creativity. The most important thing you can do, and the most empowering thing you will ever do throughout your entire life, is know yourself. Know yourself. I think self-awareness is the key to everything.
Interviewer: We spend a lot of time on that here at Stanford Business School.
Mindy Grossman: Yeah. Know the good, the bad, and the ugly. Right?
Interviewer: You’re on the right path.
Mindy Grossman: Trust me. I know what my derailers are, right? But it’s empowering if you know what you’re made of, because then you can put those things through the filter of what’s real and what’s important. And when people work for you, if you’re really honest, and you’re willing to tell people what your strengths are, and you’re willing to tell them what your weaknesses are, they’re going to trust you a lot more, because you’re willing to share that.
And we have a joke, we all know what our derailers are. Mine, I’m not very patient sometimes. One of the other guys is mischievous, so he’ll try and you know? When you’re under stress, you have to know what it is. So we can be in a meeting, and we’ll be able to call each other out. And go, you’re derailing, right? And I just think it’s, self-awareness is empowering. So know everything you can about yourself, know what gets you excited, and then find that path.
Interviewer: Mindy, thank you so much for being here with us today.
Mindy Grossman: Thank you for having me.
Interviewer: We really appreciate it. Thank you.