In our latest podcast, Ray Cao spoke with Steve Sadove, former CEO of Saks Fifth Avenue and Board Member, Colgate-Palmolive. Sadove started his career at General Foods, became the CEO of Clairol (which he helped sell to P&G), and then took over as CEO of Saks Fifth Avenue which was sold to HBC just a few years later.
Here are our top three favorite highlights:
“That was one of the great lessons I learned… if you’re a baseball player and you hit 333, you’re in the Hall of Fame. So you can’t hit 100%, and part of the cultural lessons that I learned and I still teach people is… ‘It’s better to try and fail than not try at all.’ And that you can’t have a culture where people get shot if they stick their head up… We want our people who are trying things all the time and learning and saying, ‘Ah that worked and that one didn’t work.’ And that you have a culture that you support that where people feel that they can do it.”
“I firmly believe that the role of a leader, that there are two things that they do. One is making sure that everyone’s around, aligned around the strategic direction of a company. And the other is around building and establishing and reinforcing a culture that you want. And if you do the two of those things, well, then you can drive some real results.”
On the changing career path.
“Careers are so different today. If you think about it, I spent 40 some years and worked in three companies. My kids, my son’s probably been in as many companies in five years as I was in 47 years, and that’s what’s true with most millennials… Don’t think [that] the job that you’re getting [as] your first job is going to be your career. It’s going to be one of many. And so you want to be doing things that you enjoy doing, working with people you enjoy, doing things where you’re going to learn a lot because as early stages it’s about learning and formation.”
Daniel: [00:00:00] Today, on Connections.
Steve: [00:00:03] To play down at this place called St. Albans down in Washington DC and most of the people we were playing with were the senior government officials at the time in the Johnson administration and so you were playing tennis with the Secretary of Defense or the Secretary of the Navy or Robert McNamara, people like that. So I was the guy there every weekend, the young kid playing tennis with all these people who, at the time, were just at the middle of the Vietnam War and they’re coming to play tennis with the big walkie-talkies, didn’t have cell phones then. And so you’d get a sense of the gravitas of what they were doing though, and this was their break, but they always wanted me to be playing tennis with them.
Daniel: [00:00:45] My name is Daniel Rodic, and I’m your host at Connections, brought to you by Exact Media. We created this podcast as we realized that a lot of people we spend time with in our day to day work, brand managers, marketers, those who are trying to rise quickly in their careers could benefit from hearing the stories of the leaders they look up to in their industry. In every episode, we cover the stories that you’ve never heard of. Where did they grow up? How did they get their first job? What were their successes and failures in their career and how did they recover from them? My hope is that you will take away some interesting tidbits and tactics that will help you accelerate your careers. I don’t want to spend too much time talking about us, but so you have context of how we’re involved in the industry, at Exact Media, we work specifically with marketers to help them sample their products through the parcels of online retailers. For example, if you bought running shoes online we might give you a sample of a healthy granola bar in that parcel, if that interests you at all, visit us at www.exactmedia.io
Now on to our guest. Today’s guest is Steve Sedove, the former CEO of Saks Fifth Avenue and a true legend of the retail industry. Steve’s story is quite unique. He grew up playing tennis with world leaders and after graduating from Harvard and a long stint with U.S. Foods, he became the CEO of Clairol where he helped sell to P&G, then took over as CEO of Saks Fifth Avenue which was sold to HBC just a few years later. Steve’s focus on people and relationships as keys to his success stood out most to me as an unexpected point of emphasis throughout the interview. Here it is Exact Media CEO Ray Cao interviewing Steve Sedove.
Ray: [00:02:36] Steve, really appreciate you spending the time with us. Many people know you for the role that you played at Saks 5th Avenue and of course at Clairol as well. But what have you been doing since then?
Steve: [00:02:50] Oh, gosh, I’ve been so busy. I feel like I’m flunking retirement. I’ve been involved, subsequent to selling Saks, I’ve been involved in a number of things. I’d describe it has having my life in buckets. The one bucket is boards and I’m sitting on a number of public company boards. I’m lead director at Colgate Palmolive, I’m on the Board of Arrowmark [SP], I’m now chairman of Ruby Tuesday and I’m looking at joining another board. So that’s one bucket. I have another bucket where I’m doing some charitable work. I chair the board of Hamilton College, I’m on the board of Americares and I’m involved with a couple of other smaller charities. I have a third bucket where I’m doing some advisory work, I have a retainer with Master Card where I’m advising them on working with retailers. And then my bucket that’s taking up quite a bit of time is I’ve started a private equity firm with three other partners, where we’re involved with what I call under managed, looking at under managed retail and consumer properties and we’re getting close to closing our first deal. So that’s quite interesting. So in some ways reinventing myself into another career following one in consumer goods, then retailing, and now a little bit of private equity.
Ray: [00:04:09] Does your family see you less now than they did when you were going fulltime CEO?
Steve: [00:04:13] Yeah that’s why my wife says I’m flunking retirement. You know it’s different, you know in the past you had maybe 15,000 people at Saks and now I have me, and so everything was revolving around reacting to people’s needs where you were solving their problem, your backed up schedule was minute by minute. Now everything’s much more proactive where you’re managing your own time and you do what you want to do and if you don’t wanna be involved in something, you just don’t do it. So it’s a totally different way of thinking about it.
Ray: [00:04:55] Most people know you as one of the most respected leaders in the country, but I want to dial it back a bit to childhood. What was childhood like for you? Where did you grow up? What was it like growing up in the Sedove family?
Steve: [00:05:12] Oh it was great. I grew up outside of Washington DC. My dad was one of the early founders of the World Bank, and that meant we lived in a truly international environment where most of our friends came from all over the world and many of the underdeveloped or developing countries at the time. And so you really grew up in a world of diversity and different kinds of thinking. And I was a tennis player, my great love for much of my life was tennis until my knee went bad. So I was a very avid tennis player and that played as a theme throughout my career. But when I was…during that period growing up in Washington I was the…I played high school tennis things like that and I was the filler for all of my dad’s tennis games. And people who were… We used to play down at this place called St. Albans, down in Washington DC, and the most of the people that we were playing with were the senior government officials at the time in the Johnson administration, and so you were playing tennis with the Secretary of Defense or the Secretary of the Navy or Robert McNamara, people like that. So I was the guy every weekend, the young kid playing tennis with all these people who at the time would…this is in the middle of the Vietnam War. And they’re coming to play tennis with their big walkie talkies, they didn’t have cell phones then, and so you’d get a sense of the gravitas of what they were doing and this was their break but they always wanted me to be playing tennis with them. So I did that, and it was a great environment growing up.
Ray: [00:06:56] Did you have…do you remember any memorable conversations you had, back in the day, when you’re playing tennis with those people?
Steve: [00:07:01] I don’t know about memorable conversations, I certainly remember them. You know that was the war and this you know they were always being pulled away or something happening. I don’t remember specific conversations. I just remember the presence of those guys being there and sort of being in awe of the whole thing. So it was it was pretty interesting as a young kid.
Ray: [00:07:26] What were you part of?
Steve: [00:07:28] I was very involved with government and that was my great love at the time.
Ray: [00:07:33] What were your parents like? Were they pretty strict or pretty much let you do what you wanted to do?
Steve: [00:07:38] No, we did much of what we wanted to do. We had…there were four kids, three younger sisters and my dad who, as I said, was World Bank, he was on the road all the time traveling to places like India or sub-Saharan Africa. And so a lot of the raising of the kids was left to my mom, so…and she wasn’t a real disciplinarian but she was sort of always there. And then I think the kids got along well together, there were probably three years separating me from the next one, and another three years, and then the youngest was…I guess I’m thirteen years older than my youngest sister. But it was a typical suburban upbringing that we had. Public schools, went to the public school. Was very much tied between the athletics because I was a tennis player, I played a little golf then. I wasn’t the football, baseball player type. But I was also torn between the worlds of the academic nerds and the athletes, playing on both ends of it so more or less was able to bridge both of those worlds and did very well in high school, graduating near the top of my class.
Ray: [00:09:00] How did you decide where to go to college, in where to set in?
Steve: [00:09:03] That was a tough one there, that was a really interesting process. I knew I wanted to go to a smaller liberal arts college, my high school class was about 700 people and I wanted to play tennis in college. And I knew I wouldn’t be able to do it in a Division one type of school so I was looking at different liberal arts schools. We had a number of…my dad was pushing me to…first he wanted me to go to Harvard because he had gone there. I didn’t have an interest at the time for that but he was pushing me to go to Williams because we had a number of friends on the faculty there. And I went up and looked at it. Great school but I didn’t really want to go to school where we had a lot of family, family friends. And it turned out that someone who had been the dean of Williams College had recently become president of Hamilton College, and they said, “Why don’t you go take a look at the place?” And I went over to Hamilton College. It was just in the middle of nowhere, in upstate New York, fell in love with the place and decided to apply there and it really was pretty straightforward, simple as that. So I decided to go to Hamilton College just small school had about 800, 900 men, and they had a sister school called Kirkland it had about 600 women. And so I did that, I just sort of made the decision to do it. Everyone was shaking their head because at the time that was more of a Northeast New York focus school. Very few people from Washington DC would go there and I decided…made the decision to do that. And you know loved every minute of it while I was there for four years.
Ray: [00:10:44] And you picked political science that you went into, was that a pretty natural decision or…?
Steve: [00:10:57] Yeah, I was mostly political. I grew up in that world of Washington and politics. I had spent time… Much of my internships and work, other than teaching tennis or playing tennis was involved in some form of government. I did some work in the state government of Maryland, I did some stuff on the Hill. And during the course of the time I was at Hamilton I was very involved in those worlds, and in fact I was sure that was the direction I was gonna be heading. And you know during the time I was at Hamilton, very active on campus, but it was a lot of what I call political science and economics where the history, political science, economics were the fields that I got very involved in. If I in hindsight I probably didn’t do as good a job of the arts and English, that I would have, in hindsight, like to have taken more of…but I did that, I did very well in college. I was kept in the tennis team which I never would have done at a big school. And as I said got very involved in extracurricular types of activities, and the coming out of college, I was involved in a fraternity house, and again I was playing the bridging the academic with the…the athletics played in both worlds.
Coming out of school senior year, I thought I was going to go to law school. I applied to a number of law schools, got into them. You’re very naive but I didn’t say really wanted to be a lawyer, I didn’t know whether I want to go to business school, law school. I applied to a number of the joint JDMBA programs, got into some of them. Schools like Cornell and Wharton and got into Harvard Business School and didn’t get into Harvard Law School and made a decision that Business School was gonna be two years, and law school is gonna be three, and JDMBA would be four. And so I decided two years sounded good and went to Harvard Business School. And with the mindset that all of my work had been in the political sector, public sector and I was thinking I was going to do it going into non-profits. And it was pretty unusual. Only less than 5% of the class at the time went straight from undergraduate school to get their MBA. So I was the young guy in the business school class and everybody…I treated it very much as an academic exercise, more so than the people that had several years of work experience. But I went there thinking I was going to go into the public sector and in fact even halfway through, when I was in between the two years of business school I worked on a book on management of nonprofit organizations with one of the professors at the business school.
But I was sort of one of the young kids that did very well at Harvard. In fact graduated with distinction which was the top 10% class at Harvard. But somewhere along the way I fell in love with marketing and I just intuitively enjoyed it. I thought it was great understanding consumers better and coming out of business school, had to make a choice. I had offers in the government with the Congressional Budget Office which was just being created, EPA. And then I had offers in marketing and at the time, this was now back in the mid ’70s. If you were a consumer marketer there were two companies that you went to, either Procter and Gamble or General Foods. And General Foods was in New York, Procter was in Cincinnati and I ended up deciding to go to work at General Foods. And those were tough decisions, not to go to the public sector and go into business. Other friends of mine were at the time doing consulting or banking. But I went to…decided to do it and ended up becoming a consumer marketer and spent 17 years there. I think out of my Harvard class, 13 of us went to General Foods and I guess I was the last one standing. I stayed there longer than anyone, but it was a wonderful experience but that was, sort of you fall into things along the way.
Ray: [00:15:02] Was your father surprised that you didn’t decide to go into more of the non-profit politics side?
Steve: [00:15:09] No I don’t think he ever…I never heard him complain too much about that he was actually happy I ended up going to Harvard. So although he never had the same respect for business school as either probably Law School. But business school at the time was great because there were too many lawyers and nobody really wanted to go to business school at the time. The world’s certainly changed over the last 40 years. But it was…I hate to say the word “enjoy”. I didn’t enjoy business school. This was…there’s a book called “The Gospel According to the Harvard Business School” and it was really a tough experience that, very competitive. But you know I sort of strived in the environment, and I was able to get along with lots of different kinds of people. And you know between Hamilton Harvard they were a very important shaping experience for me.
Ray: [00:16:00] What were the first few years like at General Foods? What is the memory that lasted in your head?
Steve: [00:16:08] It’s…I guess the word that comes to mind is “people”. Had some enormously talented people. It had a wonderful culture, it was very collaborative. It was a little different then. It wasn’t this cut throat environment. It was people working together, helping each other, very social in a sense. That back then you’d have volleyball, tennis teams, you know sort of what I call the extra-curricular activities. Your friends became the…the social life revolved around all the people who were there and you were in an environment of the best and the brightest in marketing. And it was a remarkable learning experience. In some ways I view it as a post-postgraduate education. You were learning the fundamentals of marketing, and how to think about consumer behavior, branding, and positioning. So I really enjoyed it. There were a couple of times when I thought about whether I was gonna leave and I learned a lot about people management, culture development. What kind of a culture did I like, what kind of culture did I want to create in organizations I was involved with, how to mentor people, how to recruit people, all of that was during…that gestation period was during the early years of General Foods. And the relationships that I built there, many of them I still have, and some of my great mentors in my career came out of General Foods and then ultimately when General Foods got bought by Philip Morris in the mid-’80s. Some of the people out of Philip Morris as well so it was a very important foundational period in my career.
Ray: [00:18:00] Did you know, starting at General Foods, that you wanted to eventually just get to the top and end up running the organizations that you were part of?
Steve: [00:18:05] Absolutely not. I think I came out of business school making what I thought of at the time was a pretty good salary. I was making $17,500 a year. And so that was my…and I said, “Boy I’m feeling like I’m gonna be stat…I think my starting rent was maybe $350 a month. But my thinking was that I’m gonna be a…I was always good as a contigualary to people, a sounding board. And I never thought about it as being my aspiration was to run companies. My aspiration was always to have an impact, be a part of the senior team. Be able to contribute but never really thought of myself that I was going to be the…I was always a go-to person, leader in terms of on a team and a study group or things like that and people always would look to me. But I never thought of myself as that I was the one it was my goal was, “I’m gonna make it to the top.” Didn’t even dream of it.
Ray: [00:19:10] When you talk about some of the friends…you’ve now built Morrison and have gone through, or were there with you since the very beginning. What would you say about that original class people who’ve seen it a ton of people whether it’s at Saks, General Foods, Clairol etc. The successful ones from the others, what would you say separated them and created sort of a class of their own?
Steve: [00:19:40] You know there are a lot of bright people. You don’t go to some of these schools or you don’t get into some of these companies unless you have the intellectual wherewithal to do it. But I found the ones that really made a difference, were able to motivate people, they were able to work well with others, they were able to be good listeners, people wanted to be around them. And so you know whether it was emulating them or learning from them, I found that the best people were people. That’s horrible language but that’s what I…you know they were the ones who really understood about culture building, understood the role of mentoring others, and not doing it with the intent that there’s some payback. There’s so many stories I could tell you about people who you touched during their career and people who touched you during your career. That is what I saw most of during that period. The ones that made it to the…ended up making it to the top or went on and lead other companies tended to be the ones who people gravitated to.
Ray: [00:20:59] You guys are mentors. Is there a mentor or two that really stuck out for you and made a big difference?
Steve: [00:21:05] Oh absolutely there were. Oh sure, there was one guy who…when I started there I was in the desserts division of General Foods there was of an individual who was essentially the division president, namely Irve Shane [SP]. Early on in my career he took me under his wing, he spent time with me. You really learning from him one of the brightest and best people of people persons. And he really knew that you were being watched over by others. He was one of several but you know in fact I had an opportunity, oh a few years ago I was…we were and I stayed in touch and that’s now what 45 years later and I still stay in touch with him. And had an opportunity to tell him how important he was early in my career and you oftentimes don’t have the opportunity to say that to people.
Ray: [00:22:06] Did it come naturally to you or did you look for mentorship?
Steve: [00:22:11] It’s…part of it’s natural. But I think it’s something that you…if you pay attention to it it’s something you can train yourself to do. I actually gave a speech last night to a group where we were, I was talking about culture development and mentoring and leading people, and I think it’s something that just gets ignored. And it takes just as focusing on strategy development or focusing on the numbers is important, focusing on the people and the organization, and truly caring about it. And people will know whether it’s lip service and you’re just…you know sort of doing it to check the box but truly caring about people and asking them about them and understanding what’s motivating them, how they’re feeling. Those are the kinds of things that make a difference and I think has been the most important part of my career. I mean it’s very rare that people jump from a food industry to a beauty industry and then I had Me Johnson and then I had retail and I could count on one hand the number of people have moved from consumer goods to retail successfully. And I think the reason I was able to do it was largely because my focus was not so much on being the best marketer but it was on being best leader and culture developer and people person.
Ray: [00:23:35] Thinking back to General Foods were there…I mean I’m just listening to your career up until this point, it doesn’t sound like you really messed up on anything. But were there moments during General Foods where something just didn’t work out, maybe your fire project went downhill?
Steve: [00:23:55] Oh, sure absolutely. We had test markets, there were failures, we had businesses that weren’t doing well. You know it’s always two steps forward one step back. That was one of the great lessons I learned which was you’re never going to…you know, think about, if you’re a baseball player and you hit 333 you’re in the Hall of Fame. So you can’t hit 100% and part of the cultural lessons that I learned and I still teach people is, you know, “It’s better to try and fail than not try at all.” And that you can’t have a culture where people get shot if they stick their head up. And that’s what I found when I went into Clairol for example. So you need an environment where people feel like they can try things and I certainly found during my General Foods days that there were lots of failures that we had, in terms of little initiatives, or could have been a marketing program, could have been a new test market product and you learn from them. Now it bothers me if you do the same mistake three times in a row and don’t learn from it. But if you don’t experiment and try… Think about a retail company when you have hundreds of stores. Every store has the potential to be a test market, and you can try different things but you’ve got to be willing to try things, experiment. I get very frustrated when I have people that are ready, ready, ready, ready, aim, aim, aim, aim, aim and maybe they fire one bullet. We want our people who are trying things all the time and learning and saying, “Ah that worked and that one didn’t work.” And that you have a culture that you support that where people feel that they can do it.
Ray: [00:25:29] So why did you end up switching and leaving General Foods or discontinuing with that and jumping into a whole different industry almost?
Steve: [00:25:30] That’s probably one of the hardest things in my career. I spent 17 years at General Foods was one of the three or four senior people in the company. We’d just merged with Craft. My career probably would have moved me to Chicago at some point as the companies were merging between Kraft and GF. But I had to make a decision. Did I want to be a career or Philip Morris General Foods person, did I want to be a career food person? And I got approached. One of my friends had gone from General Foods to Bristol-Myers which owned Clairol and he had gone to another part of Bristol-Myers and the role of CEO of Clairol was open. And they asked if I’d be interested in it, and I talked to them and you know thought hard. It was a company that had been under-performing. They had turned three or four CEO’s in previous five years, the company wasn’t doing well. And they were making a very lucrative if, if it were to work out. And I asked myself was, did I really want to stay forever in one company? Or did I want to venture out and try something sort of out of the mother of General Foods? Because at that point, I always taught people, you have to think about stages of your career. And one stage is you’re in the post-post-graduate education, you’re in the learning phase, and then you’re into the accomplishment phase. And you know, as you were in this accomplishment phase, did you wanna, to try to see if you could deal with a different environment? So I decided that I was gonna try it. And probably the toughest day of my career was when the then CEO of Philip Morris, which was the parent company of General Foods, called me up. I was in White Plains, they were in New York and he asked me, “Steve I’d like to come up and visit with you.” And I had to…you know, tried to talk me out of leaving the company. And you know, I ended up holding firm. This as an aside. Again you go back to what are the themes that go through your career.
Because I was a tennis player and we did all those kinds of activities as I described, Philip Morris General Foods did a lot of outings, a lot of… Remember they sponsored the Virginia Slims Tour. We used to do a lot with the players, and I was the tennis guy that the chairman of Philip Morris they used to, you know… I used to play a lot of tennis with these guys. And I got to know all the senior executives and that probably along the way helped my career enormously. Because when General Foods got bought by Philip Morris there was a lot of resistance among the general food senior management about Philip Morris and the tobacco company. And what ended up happening was a lot of the senior people at General Foods were sort of moved aside, and they took about three or four of us that were probably the next layers down and accelerated our careers dramatically. And so I got to spend a lot…part of that because they knew me and what I had done. So I was pretty friendly with these senior Philip Morris people and they tried, you know they came and visited. Ultimately I decided I was gonna leave and go to Bristol Myers to be the CEO of Clairol. And that was probably the toughest decision that I made along the way in my career.
Ray: [00:29:04] How old were you at the time?
Steve: [00:29:08] Oh gosh. Probably early forty’s. I would have said fortyish, probably almost exactly 40.
Ray: [00:29:16] Pretty young age to…
Steve: [00:29:19] Yeah, it was a tough…you know, senior guy at General Foods Kraft, fortyish. And here’s a chance to go off into a highly risky environment because they had not been doing well, and didn’t know what it was going to be like. And it turned out, some of the themes that we were talking about before. It was a very dysfunctional company. Highly siloed, everything went up to the top of every function, to the decision making. There wasn’t a lot of cross-functional cooperation. A lot of people were scared, they were afraid to take risks. It had been a company that had been highly successful. This is Clairol, not Bristol, for many years. But then had…but was afraid of change, yet then you needed to change because… And they were viewing little change as being big change. And you know it started, it had been deteriorating in terms of sales.
And so we went in and really focused on culture development. I was given free rein to change the people if we needed to. And what I found was that you had a lot of talent there but they weren’t working together. Some were playing baseball, and some were playing football. And so much of what we spent was rebuilding a culture, making sure there’s clarity of strategy and getting people to work together. And you know, I’m fast forwarding now but this thing over a period of you know… I stayed there 10 years. And over that 10 year period it became the number one hair company in the United States. We created a billion dollar brand called Herbal Essence shampoo, that you know from nothing and we ended up in the end, when Bristol decided to become a pharma only company, we sold Clairol to Procter and Gamble for five billion dollars. And I picked up another company called Me Johnson a baby nutrition company which we spun off as a public company that’s done very well. And we had a beauty salon business we sold to L’Oreal.
But it was you know, the lessons from General Foods played so much into the culture development of Clairol. And you know, it’s sort of been part of what I did at Saks too. But it’s you know in the end I found it’s always been about the people. It’s about building the culture, communicating with people, clearly talking and listening. And I was telling somebody my favorite award in 40 some odd years in my career, was an award I got once. I thought it was the General Foods but it was called Miles of Aisles. And it was basically going around and whether it’s at a factory or in, on the floors of the offices walking around purposefully talking to people, listening to them and making sure you’re asking questions. But you know, I use word purposefully, because, you know everyone’s always looking to see what’s the CEO thinking or what’s on their mind. So if I ask you, “What are the new innovations you’re thinking about?” You’re gonna react one way versus, “What are the cost reductions you’re thinking about?” So if you want the organization to be thinking about a certain way, wandering around, talking to people about their new ideas helps foster the culture that you want. So that was part of what…I was doing it at Clairol.
And I firmly believe that the role of a leader, that there are two things that they do. One is making sure that everyone’s around, aligned around the strategic direction of a company. And the other is around building and establishing and reinforcing a culture that you want. And if you do the two of those things, well, then you can drive some real results.
Ray: [00:32:54] What was it like spending almost 10 years, basically rebuilding the company at Clairol and then eventually having to tell the team that you probably almost built yourself directly that they were selling to P&G?
Steve: [00:33:11] Hard, you know, I mean it’s your baby. And as I said, at one point gone from being a terrible performing business to being one of the best performing businesses within Bristol-Myers. And we had a high performing team and you had a high performing company. But I think people understood that Bristol had made a decision that it was gonna become pharma and not focus on the consumer business. But it was an emotional period, some people accepted it easily, other people had a harder time with it. I think people held up very well during the period. I mean Procter when they ended up getting the company fundamentally changed it. It didn’t, you know and it was… but it was, it was an interesting period. The team I think worked together very well, but it’s hard, you know change is not easy. Now I would say the same thing about when we sold Saks, it was, you know there was obviously mixed emotions when you when you do sell a company. But you know, that I think that, you also have to state what’s the best interest of the shareholders. And I think that by any measure that you could look at, Clairol being sold for five billion dollars was an enormous win for Bristol-Myers.
Ray: [00:34:33] When the news was shared with you that the company wanted to focus on pharma, what was going through your head? Were you thinking, “I’ve got to figure out where I’m gonna go to next.” Or, I’m gonna see this thing through.” How were you going through that whole decision-making process?
Steve: [00:34:34] Well, it wasn’t that difficult. You know I was a member of the executive team of Bristol-Myers. So I knew what the thinking was going on, and the guy who was the CEO and chairman were buddies of mine you know, I knew them very well. I understood it, I certainly could have stayed at Bristol-Myers, that was one of the alternatives that I had in some you know, some kind of a staff role. But I figured you know, I had it, that it was probably a good time for me to think about other alternatives. A lot of things just coincidentally happen in life. In the mid ’90s while I was running Clairol, Saks became a public company, and it was owned by a private equity firm called Invest Corp. And I happened to be the outside director when they went public, and one thing led to another, I became one of the senior directors at the, you know Saks and the company that acquired alternately Saks, and they asked me to come and be a partner to the chairman and CEO and run the company. So the idea of leaving Bristol-Myers and going into retail insists a whole different world and recreating yourself, kind of appealed to me. And I knew the company, even though I wasn’t a retailer
Ray: [00.36:03] I just have a question. Were you the creative inspiration behind the commercials at Herbal Essences?
Steve: [00:36:07] Yeah, that was me. They had a creative agency that we, that worked with me on it. And that was one of the things that I told Procter when we sold the company was you know, it was a little bit of what I call “naughty and nice” and the whole organic experience. But sure, that was what created the hundreds of millions of dollars of business, but you were willing to take some risk. Then, I mean you can imagine what it was like going and showing that to the chairman of Bristol-Myers, and telling him, “We’re going to create this brand. Here’s the advertising that we’re gonna be running, and you’ve gotta accept that you’re going to get some very, very critical…” I mean, that at the time that was pretty on the edge. And this was advertising that took, if you have any of you ever saw that movie When Harry Met Sally and she had the organic experience, it was a takeoff on that, and but you know we’re talking hundreds of millions of dollars and it became global, and allowed us to have the infrastructure to support the infrastructure to take the company, the brands globally.
Ray: [00:37:09] When you jumped into the role at Saks…I mean going from General Foods to Clairol is still sort of consumer packaged goods. But going to Sacks retail did, did you get push-back? Did people question your ability to run a retail company? What was that like?
Steve: [00:37:30] Oh sure. First of all the track record has been horrible, of consumer guys going into retail. So that wasn’t an easy one, but basically I had learned a lot about the company because I had been on the board for many years. And so one of the lessons I learned was that retail is a totally different thing to consumer. People are wired differently, they’re trained differently, the rules of the road are different and if I had tried to go in and play the same game that I played when I was at General Foods or Clairol, I would have fallen on my face. And so you’ve got, again got to use your people skills, you’ve gotta listen, you’ve gotta learn, you’ve got to be willing to get in that to the…and spend the time whether it’s in stores or with the merchants and recognize what you’re good at and what others are good at. And I knew that if I was going to run a company, I needed to have great partners who had the functional expertise that I didn’t have. And I could play the strategy, I could play the leadership, the culture development but I needed people like a merchant who could complement me. So and I didn’t go in as the CEO, I went in as the vice chair, and we divested some of the non-Saks 5th Avenue assets. I got very intimately involved in the strategy of the company, worked as a partner to the then chairman CEO. And as we sold off the other assets, then they asked me did I want to be the CEO of Saks and take it over. But so I had, there was a, what I would call, a mentoring development process that went on at Saks, where I really was able to bring what I brought to the party and complement it with the retail aspects of the thing that I learned and got a lot of coaching from others.
Ray: [00:39:14] What were the challenges are were going on at Saks at the time and when you took over?
Steve: [00:39:03] For many of it, that when I actually took over Saks Fifth Avenue and you know, we had divested the other assets and it became Saks Fifth Avenue as the company. Some of the same issues that we faced with, at a Clairol where, highly functional, you didn’t have cooperation among, some of the functions, you had people not willing to take risks, very conservative. And it was a bit of a dysfunctional organization and you had people who weren’t being clearly communicated with about their…in terms of their role or their value to the organization. There were some compensation issues in terms of bonus structure, so people felt they weren’t being rewarded well. So it was a whole lot of things of in terms of culture development and people development as well as clarity of strategy about who we wanted to be that, that had to be really focused on it. Now this is pre, this was pre the Great Recession, so think about it, think in terms of the ’05, ’06 type of timeframe. And we underwent a period of very rapid growth but just before the recession hit. We were seeing well into the double digit topline growth. But it was a very exciting period, where you were starting to see the Internet coming about, you were starting to see, you know the consumer was healthy, international business, tourism was good. So you know, it was a pretty exciting time until it hit a wall in the recession. But it was a time where the company felt like was starting to win.
Ray: [00:40:49] I’m just gonna switch to the…a bit more to the personal side. I mean to be able to accomplish all the things that you’ve accomplished. What was it like managing your personal life with your kids, your wife? I imagine you are traveling, and constantly turned, you know, trying to turn off, I imagine. What was that like and how were you able to manage that? Or how were you not able to manage it?
Steve: [00:41:03] Well, probably wasn’t able to manage it well, I mean that was, I wasn’t as good as I should have been. I ended up having a divorce from my first wife, my kids came out great. And I was very focused on work and probably didn’t spend as much time as I should have with my wife, and so that was you know, that was not easy. There were years where I didn’t take vacation and man I should have and it took a toll. I don’t think I had nearly as good a balance as I should have, I think I’m probably much better, better balanced. I wouldn’t say well balanced but I’m better balanced than I was at that time. You know there are some elements that are always good there perks on all these things when I was it at Bristol-Myers or Clairol, I for years would present the winner’s check at the U.S. Open and we had access to everything from tennis to others. But then, you know and even it Saks you’re always in the front row of the Fashion Week and things like that. But it’s hard to balance it because these jobs are 24/7 and you’re the face of the company, you’re the daddy figure and you have to accept that it comes with the role. One of the reasons I’m not you know, after I had sold Saks one of the reasons I’m not doing it again is because I’d rather have a little bit more balance in my life.
Ray: [00:42:36] And knowing what you know now, what advice would you give to your 25, 30, 35 year-old self about how to manage your life and your career ambitions?
Steve: [00:42:45] You know, the difficulty is that, the trick is to find a way to do what needs to be done with one hand tied behind your back. So you can free up time for thinking, for bigger new life, for ideas, for innovation, and for your personal life. Then I don’t have a simple answer in terms of, because you’ve got to learn how to say no to some things or sift through and figure out what’s really important, from what’s not important. And when you’re in the fray and you’re doing it, and you’re building a business and building a career, those tradeoffs and understanding which ones you ought to make, it’s not easy. You know, if I’m talking to a 25-year-old. My kids, I have a 25 year-old, a 28 and a 31 year-old and they’re all at that stage where they’re building their careers. And you know I watch them. They’re working evenings, and they’re working you know, doing exactly what I was doing at that time and you got to finding the right balance. I think they actually do a little bit better job of balancing than I did at the time. But I would tell people they got to find a way of carving out the time for themselves and their families.
Ray: [00:43:54] Did you have a rhythm, through the week and how you started your day, did you meditate, did you play tennis before games. What sort of rituals and routines you follow?
Steve: [00:44:06] I’m an early morning person. So I’m always up early, I have the papers read by seven or seven thirty. So I fall asleep early at night, so my rhythm was always try to get up early, get some things done before my own time was, you know from that people in my office and almost every company I was with people started showing up around eight o’clock. And I would use that seven to eight time for my own set time, set the day, figuring out what I really wanted to do, studying my own agenda. So that early morning was my time. Exercise or tennis or whatever it might be was always later in the day, in the afternoon, if I could break away at lunch that would be fun, that would be nice, but it rarely happened. Now I find I have you know, now I do have some rules to try to get a little bit of balance in my life where you know, in the summer I don’t go into New York or I don’t work on Fridays. I’ll take telephone calls things like that but I try to have a little bit of balance in your time. But my rhythm was always the morning, first thing in the morning was my own time.
Ray: [00:45:13] Do you now sleep in or do you still…?
Steve: [00:45:16] Never. I still get my papers read, although I don’t get papers anymore, I do it all digitally.
Ray: [00:45:24] Do you shut off during the week at all? Or are you on every seven days, all seven days?
Steve: [00:45:31] Not always seven days. I was almost always on five days through Friday. Saturday, weekends was always my tennis or my golf. I would you know early on it was, I would probably have late night or late evening tennis groups, things like that I might have a bubble or one of these you know in the winter games in a winter time. I would have something in the evenings one or two days a week to get yourself away from everything. But rarely eve throughout my career, I…other than the, what I call the business entertaining, which was rampant throughout my career, that was an important part of what I did. That was where I would spend most of the time on the weekends, less so you know, going into the office and writing a paper or something like that.
Ray: [00:46:26] Who do you play tennis with now? I mean, if you were playing without the people that you were playing with?
Steve: [00:46:29] Yeah I don’t really, the problem is I could hit with a pro but with no meniscus in my knee. It’s awful hard and you get very frustrated because you used to be pretty good. And so now I can just stand and rally. I can’t hit a full serve or anything so now I’ve really play golf and I try to play as much golf as I can. So I play most days, you know on a Saturday or Sunday, on the weekends. If it’s summer time, I try to sometimes play on a Friday afternoon. Rarely do I get away during the week, but it you know, now I’ve had a trying to get a little bit of balance and so I will, and I have great, I mean it’s a great networking tool. But it’s a lot of fun and you know lots of CEO’s I play with, a lot of senior people in the financial community and you know you, you learn a lot about people playing golf or tennis. And it’s where you build some really good friends, and those are where I have my a lot of my friends that that are not just and some of these go back people to go back 40 years to General Foods stores. One of the guys I play with all the times worked with me at General Foods. That’s why I talk about this career building relationships. My guess is in the last three weeks I’ve spent time with at least 10 people who go back either to the General Foods or the Clairol days.
Ray: [00:47:45] You’re one of the most connected people that I’ve ever met. I’m just curious what’s one or two names people who you feel are the most interesting that you’ve ever met?
Steve: [00:47:57] Oh my gosh, I don’t know. There are so many people, I don’t think…interesting people. I’ve been fortunate, I have so many people that I knew I had a lot of fun with. I went to graduate school with George Bush, at Harvard I did a fireside chat with him a year or two ago in front of about eight thousand people. We were just talking about that and he would talk about, I was front row guy and he was a back row guy. You know it’s, there’s no individual, some of the most interesting people are not necessarily the names that everybody would all know. You know, I’ve had just been very fortunate to know and meet a lot of people that you know. I don’t want to get into political things but you know people like Trump or Hillary or you know, had opportunities to meet a lot of the, you know whether dinner with Bill Clinton or playing golf with Donald Trump, you know these are, they’re all interesting people and you learn from all of them.
Ray: [00:49:00] What do you still have left on your bucket list when you’ve achieved more than most people would achieve in many lifetimes? What do you still want to do?
Steve: [00:49:12] What I’ve done a very bad job, is travel. And what I mean, I’ve probably been to many, many of the countries. But my version of travel is you fly and you go to a meeting, give a speech and then you leave. So I haven’t really experienced much in the way of travel, I mean I’m going to Budapest next week to give a speech. I think I’m there for 24 hours or 36 hours that’s not really traveling and so you know, I’d love to do a little bit more traveling with my wife. I’d like to. So I’d like to spend some time with them, you know I now have one grandkid and I’d love to be able to spend some time doing that. I have a wonderful lake house up in the Adirondack Mountains, I have a place down in Miami. And just those kinds of things I don’t, I don’t have any great desire to have to go have a position or role in Washington, or I want to do something. I give back. I chair the board of Hamilton College, So that’s a giveback, very involved with an organization called Americares which is one of the largest providers of medicines and health care around the world in disasters. So to me what’s important is just giving back and teaching, mentoring, helping you know, I do a lot of that and to me that’s, that’s plenty. I don’t need, I’d certainly don’t want to feel like I need to accomplish in terms of building another company or anything like that.
Ray: [00:50:40] Talking about mentorship. I don’t have kids yet but, but certainly I’m thinking about it. Give me any advice for people who are thinking about having kids or what the first year or two should be like and how it might have changed you?
Steve: [00:50:53] I don’t know. You know, it’s hard for me to remember when my kids were babies. That’s what happens when you start getting old. But I think that I didn’t…they would probably tell you I didn’t spend as much time with them as I could have or should have. You know again because I was in that building a career phase and most of you who are younger and just having kids are in the middle of building your careers. And that’s that trade-off issue that we were talking about. So it’s not easy, you know. My advice though, I do have a lot of advice for people just getting going in their careers, which is especially because I do a lot of coaching, for you know talking to kids just coming out of college. Adults now, but coming out of college getting and involved and doing something that you love. And that you know careers are so different today. If you think about it, I spent 40 some years and worked in three companies. My kids, my son’s probably been in as many companies in five years as I was in 47 years and that’s what’s true with most millennials. So don’t think about, is the job that you’re getting your first job is going to be your career. It’s going to be one of many. And so you want to be doing things that you enjoy doing, working with people, you enjoy doing things where you’re going to learn a lot because as early stages it’s about learning and formation. And I learned about culture development, I learned about people and that’s what I find the most important in those early stages. I do worry when people go off into the, you know I make a lot of investments in let’s call in tech startups or venture, that’s fine. I can spread my investments and you know one may hit and nine may be dogs, but you know you talking about your career a little bit more worried about that. Though I really encourage people to go into environments where they’re you know, they can learn and where they can work with people they enjoy it. But especially in the earliest stages, I want to make sure they have a good foundation just like they go to college and get a good foundation of learning. I want them to get a good foundation in business development too.
Ray: [00:53:06] So final question for you. Is there a book that that you look at as essential reading for people who are building their careers and trying to learn as they grow and develop?
Steve: [00:53:17] You know, I don’t have one book, I remember reading “What color is my parachute?” and books like that. I don’t have one book, I’m a voracious reader, love reading, I love history, I love unwinding. You say what do I do, I fall asleep reading novels and things like that. But I just, this one of the great traits is having an intellectual curiosity and you know, that’s what really makes you know great executives are well rounded. That’s why I say, I wish I had done more arts and English when I was in college because I really love people to read a lot. I’m sitting in my study right now, I’m looking at a bookshelf that has such a wide variety of books. So I don’t have one book, it’s more the concept of what are other people saying and you know sort of listen learning from whether it’s the Jack Welsh’s of the world to the great novelists. I think that it’s you know listen, you know the ability to communicate clearly is such an important characteristic. And you know, I think that early on in my career, one of the executives at General Foods pulled me aside and said,” you know what differentiates you is you speak, you’re able to communicate well, speak written as well as verbal.” And you know so look reading a lot and learning what’s good writing and then learning how to write is such an important characteristic. I think I give Hamilton a lot of credit for that. But I give Harvard a lot of credit for weeding through a lot of crap in these cases and learning how to distil what’s the essence of important issues. And continuing to read even whether it’s editorials in the papers. I would look at that as opposed to saying, “I have to read that one book.”
Ray: [00.55:06] Steve, thank you, thank you very much. I know you are busy, so thank you for taking your time to do this.
Steve: [00:55:10] Okay, thank you very much.
Ray: [00:55:12] All right. Thanks dude.
Steve: [00:55:13] Good luck.
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