Mindy Grossman: Risking the unconventional
Mindy Grossman:
Risking the unconventional
indy Grossman never sought a conventional career route. When she was about to go to law school, she changed her mind at the last minute and went into retail. And after a six-year stint running apparel at Nike, she turned down a role at a luxury fashion brand to revamp the Home Shopping Network (HSN).
And when she was ready to move on from HSN, she got calls from headhunters about “giant” retail jobs. They would tell her: “Go run this $30 billion company. Go take on this role. And I said ‘Look, it’s not what I want to do. I’ve done it. And I really feel that my next role is going to be something different,” Grossman told CNBC’s “The Brave Ones.”
In 2016, she saw that Weight Watchers CEO James Chambers had left the business and rebuked a recruitment consultant for not suggesting the vacant role as an option for her. “I said, ‘Why haven’t you called me about that?’ And she said, ‘Well, Mindy, it’s much smaller than you’re doing, and the company’s gone through, you know, a lot of difficulties. And it’s in a different business (sector),’” Grossman said.
But she was curious about Weight Watchers (now known as WW), because of the opportunity to turn it from a dieting company based on weekly meetings to a health and wellness brand that championed body positivity — and one that could retain customers instead of losing them after they met their diet goals.
Again, people who knew her as the CEO who had transformed HSN didn’t understand why she would go to WW. “When it was announced that I was leaving this brand and this business that I transformed for so many years to become the CEO of Weight Watchers, it was the sound I’ve heard before, (of people) going, ‘What?’”
But Grossman assesses each career move on three criteria, she explained. “Number one, am I passionate about what I do? Do I wake up in the morning and am I excited for what the possibilities are? The second: is it purposeful? Is it going to lead me, is it going to take me somewhere? And then the third is, will it have impact? And this idea of positive impact, whether it be on people’s lives, whether it be on the business, whether it be for your family, it was really important to me.”
Mindy Grossman has made manifesto-writing a habit. Whether it’s for a personal project or a business plan, she likes to get her vision on paper, according to former HSN colleague Bill Brand (pictured). “One of the most fascinating parts of Mindy is how serious she takes on a project. And it could be designing a house, or it could be transforming a business. And I can tell you that she starts with what I would call a manifesto. And it’s the idea of just this longform written-out by hand plan of what she’s going to do,” Brand told “The Brave Ones.” Grossman would write lists of who she wanted to persuade to appear on HSN, at a time when shopping channels were not cool.
“I would literally have meetings with Mindy, and she’d be rattling off designers’ names, and I would just be writing it down … (and I would) go back to my office and Google afterwards. Like, ‘Who’s Badgley Mischka?’ I’ve never met a Badgley … She literally would keep lists of who should we go after.” The two would travel the country, presenting Grossman’s new vision for HSN. “Five years in, we were saying no to people who wanted to be a part of it. And it really was this transformational moment … that manifesto had come to life.”
rossman’s seemingly unusual career path could have been mapped out from birth. As a baby, she was adopted by a produce-dealer father and a homemaker mother and raised in New York City, first in Queens and then in Long Island from the age of four.
“I remember from the very, very beginning when I was young, always knowing that I was adopted, but that it was defined as how special I was, and how they chose me, and I took that even as a young person very seriously, and said, ‘If I’ve been given this gift, I better do something with it,’” Grossman said. As a child, her ambition was to go to college and have an impact on the world.
“And my goal is to be the person that didn’t need to receive the gift but that could give the gifts. And I think (being adopted has) really defined, you know, my whole life,” she added.
Aged five, she remembers being in court as her adoption was finalized. “And I remember the judge in the long black robes … And at one point I walked over, and she said, ‘Come here.’ And I was sitting in her lap, and they finalized everything. And I remember going home that night and said, ‘That’s what I want to be when I grow up.’ And starting at the age of five, I was obsessed with being a lawyer and then a judge, because of that moment,” Grossman said.
From there, her focus was on going to law school. At 19, she got engaged to her boyfriend while studying at George Washington University. But then she had an epiphany. “I called my parents and I said, ‘I have something to tell you. I'm breaking my engagement. I'm not getting married. And I've decided I don't want to go to law school in the fall, and I'm leaving school right now. I'm moving to New York City, and I'm going to figure it out.’”
She left school and headed to New York to stay with relatives while she looked for a job. Grossman wanted to take a more creative path and started to focus on the media and fashion industries, interviewing for an executive assistant role at menswear holding company Manhattan Industries.
“The last question at the interview was, ‘Well, do you take shorthand?’ And in my head, I knew that if I said no, I might not get the job. So, I quickly said, ‘No, but I take fast longhand.’ And I got the job. And this is when I tell everyone, you know, instead of just saying ‘no’, think of what your attributes might be that would solve the problem at hand,” Grossman said.
Her salary was $15,600 a year and she moved to a 300-square foot studio on Manhattan’s Upper East Side, delighting in the building having an elevator but sometimes needing to walk to work to save the 50-cent bus ride. She took night classes in textile technology to understand the fashion business better. But after about a year at Manhattan Industries, she realized it wasn’t a company where a woman could make it on the commercial side.
During a stint as a receptionist at menswear company Enro, she was spotted by fashion designer Jeffrey Banks, one of the first African-American men who went into the menswear fashion business. He put her on his sales team, where she would pack up trunks of clothes to sell into stores, having “no idea” what she was doing. But she was a good salesperson.
“The reason that I was really so good in sales was that I never sold anything to anyone. What I really became adept at was really listening and understanding people's needs and trying to serve those needs as best as possible,” Grossman said.
By the age of 26, she was vice-president of sales at apparel company Merona Sport, in charge of the Jeffrey Banks brand, which was being launched as a standalone division. “I think that was the time my parents finally stopped asking me when I was going back to college.”
In 1985, Grossman moved on to work for WilliWear by Willi Smith, a successful African-American designer who collaborated with artists such as Keith Haring and Barbara Kruger and focused on streetwear. “Willi was one of the first designers that really understood and believed that fashion came from the street up, not necessarily couture down,” she explained. She worked there until Smith tragically passed away from an AIDS-related illness.
Grossman joined Tommy Hilfiger in 1988, around the time that Hong Kong billionaire Silas Chou invested in the company. “It was on a path and a trajectory for dynamic growth. Another rocket ship … I think it’s why I tend to go (for) high growth or transformative companies, because I love that feeling,” Grossman said.
Her daughter Elysabeth was born soon after. “I went from the showroom, from a meeting with Nordstrom, to the hospital to have the baby. And then I was back in four weeks. Insanity, I know, but I loved it,” she said. When Elysabeth was about 18 months old, a recruiter called Grossman to ask if she would be interested in interviewing to be president of Chaps, the mid-range label of Ralph Lauren.
“I said, ‘Are you crazy? I’m with the hottest company in the menswear industry today. It’s on fire. I have this incredible position. You know, I have a young child. I’m not making a move.’” But she agreed to meet Lauren and his business partner Peter Strom.
She took the Chaps job, but again it was an unconventional move. “Everybody thought I was insane because I was leaving this incredible company to go to a very small company that had really never been successful,” Grossman said. But she knew she could make it work. “I really believed that not taking a risk is sometimes riskier than believing in yourself and taking that risk in the first place … and (people) tell me I’m brave, and I said: ‘I’m not brave, I’m just willing to bet on myself.’”
It worked. “When I took over the (Chaps) business, it was doing about $26 million unprofitably. And in three years, we built the company to a $250 million (turnover), one of the most profitable divisions of the company.”
But Grossman wasn’t happy. She didn’t like the culture of the business, which was licensed to apparel company Warnaco at the time. The Warnaco CEO had humiliated a co-worker in a meeting, and Grossman said that if she stayed at a business that didn’t treat people in the right way, she felt complicit.
“And I went in and resigned to the CEO. And at one point she looked (at) me and said, ‘Are you resigning?’ And I said, ‘Yes, I am.’ And she said, ‘Well, you're either independently wealthy, you have another job, or you're stupid.’ I said, ‘Or D, none of those above.’ And I was escorted out by security that afternoon.”
A couple of days later, Lauren and Strom called to offer her a role as vice president of new business development, and she developed denim line Polo Jeans Company, a brand licensed to clothing company Sun Apparel. When clothing group Jones bought Sun Apparel in 1998, Grossman decided it was time to move on.
ne day, Grossman recalled, her phone rang. “And a gentleman named Phil Knight (Nike’s co-founder) was interested in meeting with me … And he was talking to me about coming in to run (Nike’s) global apparel business. Anyone who’d run the apparel business prior had come out of footwear, and they’d all been men. And so here I was, you know, out of the fashion business, female, no sport experience … And after a number of conversations, they called and offered me my dream role,” Grossman said.
Nike was under scrutiny for labor practices and had run a controversial billboard campaign at the Atlanta Olympic Games in 1996 entitled “You don’t win silver, you lose gold.” “It had alienated everything they stood for in athletes. And Phil decided … to build an entirely new executive team,” she said.
For six years, she commuted from New York to Portland to help transform Nike from a footwear business that also made clothes to making it “truly an apparel brand and company.” While she was there, Nike introduced its mission: to bring inspiration and innovation to every athlete in the world, which was qualified with: “If you have a body, you are an athlete.”
“That’s a very powerful statement and I believe it’s why the company is the most powerful brand in that entire category, if not one of … the most powerful brands in the world. It was because of that statement. It was because of that culture. And it was because of Phil’s philosophy of leadership,” Grossman stated.
She also brought a crucial fashion sense into the sports brand, working with Serena Williams on her eye-catching tennis outfits, and as well as building the apparel business, she founded a women’s leadership council at Nike. “Phil had a conversation with me and said, ‘You know, we’ve recently had some regrettable losses and they were women … I need to understand why they were leaving the company.’”
Grossman left Nike after six years in part because of her long years of commuting, but also due to the fact that she was unlikely to become CEO any time soon. “Mark Parker had just become CEO and Charlie Denson was president. So, I knew I wasn’t sitting in one of those chairs in the near future,” she said.
She had been offered a role running a large luxury business but had cold feet. “I’m not a luxury girl. I might like to wear it, but it’s not what I want to do. I like brands that can touch a lot of people. I like democratization. And I can’t do it,” she told her husband Neil Grossman.
She made a list of everything she wanted in a new role. “I said, ‘I want a business that is going to take advantage of the changes that are happening in consumer behavior and technology,’ … I wanted something entrepreneurial, but with scale … I wanted to be back in New York. I wanted something creative that could take advantage of my knowledge … and I wanted to be a CEO,” she said.
A recruiter contacted her about running the retail arm of IAC/InterActiveCorp, the media group chaired by Barry Diller that included the Home Shopping Network (HSN). To prepare for her meeting with Diller, she watched shopping channels as much as she could. She flicked on to the Food Network, where she saw a show being presented by chef Wolfgang Puck. “And he wasn’t selling anything. He was cooking, and he was being funny, and he was passionate about whatever the product was he was using. And he was entertaining. And I had this epiphany, because of what I was watching, saying, ‘I’ve got it. The network should not be about selling, it should be around editorializing.’”
Over lunch with Diller, she sold her idea. “(Lunch) was at the Four Seasons Restaurant at the time (and) I’ll never forget, because all people were coming over and saying hello to him, like (the then) Mayor (Michael) Bloomberg. And I literally pitched him on this exciting idea of what it could be, which it certainly wasn’t at the time, other than Wolfgang. And he just looked at me and he said, ‘Huh, go forth.’ And offered me the role.”
As with her other job switches, her friends were shocked.
“They thought I’d lost my mind. I was moving from one of the world’s most aspirational brands to a company many people associated with selling ThighMasters. But if I was ever going to take a big risk, this was the time to do it,” she wrote in the Harvard Business Review in 2011.
But it was part of her purposely unusual path. “What you realize when you take the unconventional road, or the road that people don’t think is cool — because when you work for Nike, you are the cool kid. Everybody wants to be your friend — and you really learn who your friends are. Because there really were people who were dismissive,” she recalled.
She was switching from a $4 billion apparel business at Nike to one that was struggling. “I was the eighth CEO in 10 years. The culture was stalled and frozen. The business was in decline and it wasn’t a very aspirational business,” she said.
Her vision? Persuade celebrities and higher-end brands to sell on the channel to help make it a desirable shopping destination. But the first thing she did was go to an employee induction with other new recruits. “Everybody had to introduce themselves. They get to me and I said, ‘Hi, I’m Mindy Grossman, the new CEO.’ And everybody was quite taken aback. But I spent the day (at the) call center, backstage TV, understanding the different areas of the business, and interfacing with all these other new employees who joined the company.”
She also revamped the office buildings to encourage people to be proud of where they worked. “I remember growing up, and we didn’t have money. My mother said, ‘You may not have money, but you can make your bed every day and you can keep your environment clean and you can be proud of what you have.’ And I always remembered that.” Grossman didn’t have enough budget for a complete renovation, but she had the campus power washed, gave everyone a day to clean their desks and provided new chairs for the network’s 2,600 people.
Grossman removed the brands that no longer felt right for HSN and cultivated relationships with people running those that she wanted to feature. “I built my own credibility. And I built my own relationships. So, people were somewhat more inclined to take a risk,” she said. Scoop, a hip New York fashion store was one of the first to sign up, selling goods from the likes of J. Crew and Havaianas to Kors by Michael Kors and eyewear from Oliver Peoples. These labels gave the network fashion credibility, and Grossman also brought in high-end beauty brand Sephora and chefs such as Wolfgang Puck and Todd English.
She also relaunched the shopping network’s website so people could buy online as well as via their TV screens, and introduced a new tagline, “There’s no place like HSN.” The relaunch happened in August 2007, and one Sunday night, three months later, she got a call from Diller. “And he got on the phone and said, ‘Mindy, I’m really excited for you because … we’re going to spin a number of the businesses out, and you’re going (to) take the company public.’”
Grossman took the business to potential investors in the summer of 2008, just as the global recession hit. “And actually, my CFO (chief financial officer), who was also a woman, she and I were on the road show. And I kept telling her we were like Thelma and Louise, until she reminded me they died at the end.”
“So I said, ‘Okay, we're not Thelma and Louise, we're just two crazy women trying to take this company public,’ and walking into rooms almost exclusively filled with men who just didn't understand why (people) would shop this way versus just (shopping) on Amazon.” But they got the necessary funding, and in August 2008 HSN went public.
It was just weeks before Lehman Brothers filed for bankruptcy protection during the height of the financial crisis and the initial public offering (IPO) did not go well. “Our stock came out at about $10 something. And by December of that year, it was less than $1.30, and our market cap was smaller than our receivable balance … And it was the scariest time for me. But it wasn't because I was scared about me, I felt that I had this massive responsibility to 6,000 people who worked for HSNi, which was the public company name.”
But Grossman grew the business in 2008 and 2009, and she communicated “incessantly” with staff. “I said: ‘We're going to come out of this a stronger company. We're going to prove the resiliency of our business model.’ And that's what we did. And I think it was 2014 or so that I think the stock hit a high of $75.’”
In 2017, QVC parent company Liberty Interactive bought HSN in an all-stock deal valued at $2.1 billion.
hen Oprah Winfrey was searching for a new CEO for WW, her reaction on meeting Grossman was “Ah-hah. Done, done, done. We are done. She is the one,” she told “The Brave Ones.”
In 2015, Winfrey bought 6.4 million shares in WW, worth $43.5 million at the time, and became a board member. Grossman saw the news of Winfrey’s investment and was intrigued that the company wanted to go beyond diets to become a business that helped people live healthier lifestyles.
“I remember running into my husband’s office, who was a trader at the time. And I said, ‘Neil, I think we should buy some of this stock,’ never thinking I was going to be at the company … And he kind of looked at me like, you know, ‘What are you talking about?’” They bought stock and Grossman started following the business while considering her next career move.
Grossman had been at HSN for almost a decade and she and the company were discussing succession plans. “I knew I wasn’t ready to retire. And I knew I wanted to do one more thing. But I didn’t want to be in retail, and I didn’t want to be in fashion. I really wanted to do something that was going to have more meaning,” she said.
She took on the role of vice chair at Unicef USA in October 2015 but didn’t want to become the full-time CEO of a non-profit. “I like running a business, and a for-profit business, and I like generating returns and creating financial return on equity,” she said.
It was early 2017 when Grossman met Winfrey. Grossman was impressed with the new vision for WW, to sell wellness instead of just weight loss, but wanted to make sure its grand plans could be realized. “I was very diligent in looking at the company’s balance sheet to make sure that there was investment, because the company had gone through what I call a near-death experience in January 2015. And how did that happen? And why wouldn’t it happen again? And could this business really transition?” she said.
Winfrey was impressed. “The feeling I had when I first met Mindy Grossman was of someone who was speaking her truth. Who was authentic. Who wasn’t a bull s——r,” she said.
In July 2017, Grossman became WW’s CEO and president. “This was an opportunity for me at a point in my life where I felt it was of ultimate importance to not just deliver a financial return on equity but deliver a human return on equity,” she said. She hired consultancy SY Partners to help the business transform, wrote a manifesto for the company and created a new purpose: “We inspire healthy habits for real life, for people, for families, for communities, the world, for everyone,” Grossman explained.
In September 2018, the company announced its name change from Weight Watchers to WW. It launched a partnership with meditation app Headspace, reformulated its food products to remove artificial ingredients and expanded its app to appeal to those who wanted to be healthier but not necessarily lose weight. It also launched a social networking element to its app so members could find people with similar goals or hobbies, and in December 2018, the brand launched its “For Every Body” campaign, featuring new members Kate Hudson and Robbie Williams.
But in February 2019, shares of WW fell 30% after it posted disappointing fourth-quarter results and lower-than-expected revenue.
“I think that one of the things that we missed in transitioning to WW is reminding people, ‘Yes, we still are about weight loss, but weight loss in the bigger picture of your whole life and what that means to your wellness and wellbeing,’” Winfrey told “The Brave Ones.”
Grossman recognized the need to swiftly make improvements. “The first thing you need to do is move quickly. The other thing you need to do is have complete transparency and own it. I think too many people own what they do well a lot better than owning what they don’t do well … One of the most valuable assets for me is acute self-awareness. And be able to be really comfortable with difficulty,” she said.
In December, WW shares rose 3.1% on the news that it had extended its partnership with Winfrey until 2025, and the stock has increased 450% since she joined its board in October 2015.
Full-year results published on February 25 showed improvements: paid subscribers had increased 8% year-over-year to 4.2 million, representing an all-time year-end high, and WW earned 42 cents per share for the fourth quarter, 4 cents a share above estimates. The company attributed its performance to a tour it sponsored featuring Winfrey, plus marketing efforts.
“We have a journey ahead of us, a journey of really wanting to help change the health trajectory of the world, which sounds like a bold statement, but it’s critical if we’re going to, you know, live the lives we want to live, and if we want our society to not keep going backwards in terms of health trajectory,” Grossman said.
Design and code: Marlon Lindo, Bryn Bache
Editor: Matt Clinch
Executive producer, The Brave Ones: Betsy Alexander
Producer, The Brave Ones: Mary Hanan
Images: CNBC, and Getty Images