#094 : Harvey Kanter @ DXL Group

Well, thanks Jenny. Thanks for inviting me. It's great to be here today. I am a career retailer. I run DXL.com and DXL stores, which is certainly the largest pure-play big and tall retailer in the United States and perhaps the world. We are an exclusive retailer of an underserved community for big and tall men, and it's a very exciting opportunity. But I've been in retail for 30-plus years. I've been in almost every category of retail and seem to have gotten involved in specialty retail, which is very exciting, really cutting edge where people really want to be involved and develop a relationship with a brand. That's really exciting for me. Most importantly, DXL has a great purpose, and purposeful retail is really important and much different than distribution of goods and services. So I am excited to be here today to talk about my retail background, talk about some of the experiences I've had both in terms of digitally transforming businesses, creating consumer engagement, and really just the dynamic that we've all lived through unfortunately through the pandemic and are still living through, and how to navigate that from both a leadership perspective and a business perspective.

Yeah, it's a great conversation, and it is for me one of the elements that is really important. I think the reality is you win or lose by the people you work with, the ability to build teams, the ability to bring the best out in people, and really understand that it's not about your results. Your results are actually the outcome of great work being done by the people you work with. I was at a company called BlueNile.com, which was the largest online engagement retailer in the world, and I spent the better part of six years there. We were sold to a private equity company, and I stayed on as chairman, but I took a couple of years off and tried to say, what do I really want to do? During that time, I was challenged by both a friend and a colleague who had watched me over the last couple of years of my tenure there as a CEO, and they provided feedback that I should write a book because it's remarkable the way you engage your team and the way you think about leadership. I never really thought about it in that context, but when you take two years off, my first year was wonderful. I went on a vacation, and along the way back, I was like, what am I going to do next? I was challenged by this individual to write a book. I tried to pencil out a table of contents, and it was much easier than I anticipated. So through my own experiences, what I thought I could relate to people was not necessarily a one-two-three about how to lead, not an autobiography, but just life experiences in leadership in challenging, agile businesses that require a different kind of leadership. There are certain elements of leadership that are very consistent, but one of the things I love about retail is the incredible dynamics. I use those experiences to hopefully relate to others, maybe opportunities where they can think about the way experiences happened to me and how I addressed that, and through that process, provide some perspective for people to think about. And I jokingly say that if no one bought the book, I wanted to leave my grandmother an ancestor something about the book. There is an element of how I got where I was, my family life, things that have been really important to me in terms of core values. So there is an element that will be a legacy for my children and my children's children.

It's a great question because you have to answer it contextually. One of the things that I share in the work I've done in writing the book or thinking in a reflective way is that when I was younger, defined probably until my mid-30s, I was a typical retailer, a typical Type A leader, very oriented around accomplishment. I might characterize myself as an accomplishment junkie. It was always, what did I do last year? I used the word 'I' more than I cared to, but it was really about accomplishment of metrics measuring against yourself. At some point, the light went off, and I recognized that my outcomes, my success, are really embedded in the work I do, the way I lead people, and the way I interact with people. The success of those I work with and my own capabilities to build a team, inspire people, bring the best out in people, and help them find what's most important for them in terms of accomplishment. If I successfully build that relationship and help them navigate to be the best they can be, ultimately I am successful in leading a company. So that element is about empathy, listening, communication, role modeling what it means to be caring, serious, a learner, and humble. It's not about me. If you really believe you want to do the best you can, it's about the group and how they accomplish the work. There's no silver bullet, and it's really about getting to know the people you work with, inspiring them through your ability to listen, be empathetic, and help support them in ways that are important to them.

A chapter of my book is about diversity. I always say diversity of thought is incredibly important. One of my favorite sayings is, 'I have a point of view, and I know it's right, actually both right, but I know it's right for me.' Your point of view is right for you, and the best music we can make is to explore different points of view and ultimately come to some level of what, with all the experience and input, is the best decision. Maybe not consensus, but it's important. I also often say that if there was a room full of me's, with my high level of energy and drive, it would be a disaster. Great organizations find the ability to bring people with different skills and assets together and leverage everyone's individual superpower in unique ways. The other way to think about it is if everyone thought the same way and you were right, you'd win, but if everyone thought the same way and you were wrong, you'd absolutely lose. Diversity of thought, skill, extroversion versus introversion—all those variables are much more critical to success than people might imagine.

I approach it personally three different ways. Sometimes I take myself for a liar and try to create an out-of-body experience to play a contrarian role or be quiet and listen. Sometimes I'm much more extroverted in my point of view. Some people are thoughtful and pragmatic. You can ask a question in a very different way, like if there were no limits and it wasn't conservative, you can get a different outcome. Sometimes you can prompt people and say, 'Hey, I really need you here today, and I want you to present a point of view that might not even be what you believe,' just to stir the conversation and create innovative thought and creativity.

It's a really good question. When we talk about DNA, people are sometimes naturally introverts and don't want to put themselves out there. The title of my book is Choosing to Lead, but the subtitle is Being Comfortable Being Uncomfortable. True leadership is being comfortable when you are uncomfortable because you have to push yourself in ways you probably aren't comfortable. It's about vision, power of purpose, aspiration for what we're trying to accomplish. The team can get pretty motivated around that. Success creates greater success and greater expectations. DXL is a perfect example. We lived through the worst of the pandemic, and it was quite challenging. I wasn't really clear what the outcomes would be, but we held onto our vision. As soon as we could pivot back, we started creating success, and that success created a new profound level of aspiration for all of us. Even those who were more quiet, when they really believed what we could accomplish, in 2021 DXL had a record year, the greatest year in the history of our company, which is rather remarkable coming out of the pandemic.

The North Star was surviving, literally surviving. Whether you're an airline, cruise ship, or retailer, you were faced with no customers. In retail, the only people who bought clothes were those who needed them, not wanted them. You were fighting for your very survival. The core tenets of leadership were no different during COVID than at any other point; maybe the magnitude and context were different. It starts with communication. At DXL, we believe transparent, open, honest communication is critically important. During the worst of the pandemic, we were sharing that we were fighting for our very survival. We were making decisions that were very difficult. You have to act, and you don't always know if the actions you're going to take are right, but if you don't act, you're going to end up nowhere. You have to be agile enough to look back, reflect, understand whether the decision worked, and what to do about it. Through that decisive communication and transparency, people believed there was a path to live and survive. As we made it through the worst and started to pivot from 'are we going to be here' to 'how do we grow the business,' the element of inspiration for what's possible came back. Communication, optimism, transparency, making decisions, taking action, recognizing not every decision is going to work, being comfortable with risk, failing fast but adjusting—these are all decisions that even today, 24 months past the worst of COVID, you still have to do.

I absolutely think they can be taught. Natural DNA means not everyone is comfortable being as open and honest and transparent. When I was younger, I didn't think being as direct and open and frank with people was going to be comfortable, and it really wasn't. But frank, critical feedback, when it's given with positive intent, builds bonds and trust. Communication can be taught, but there's an element of DNA where at some level you might not inherently want to communicate at the level I'm suggesting.

I wish I would have gotten to some of the elements that I today profess to be really critically important faster. In my mid-30s, I worked for a great company that saw something in me. I was sent to a graduate leadership program, even though I already had my MBA. It was incredibly eye-opening and life-changing. I wish I had learned that five or ten years earlier. But part of the challenge is that it comes with experience. You have to cut your teeth, make mistakes, learn the value of these elements. The confidence to do those things doesn't come when you're younger because you don't have the wins. Another thing I'm very public about is that I had cancer with an 80% mortality rate when I was 46. I was incredibly healthy, and it was a huge wake-up call. It's a forcing mechanism. When you have a cancer with an 80% mortality rate, you don't know if you're going to make it a year, two, or five years. It's been 15, so I'm in a good place, but it made me think about what I really believe and value. If I only had a year left, what would I look back and say I had to do? I wish I had made those decisions way earlier because I found great value in the outcomes I decided were important.

I worked full time, and it was about eight months. It was one-third of a full graduate degree, a graduate certificate in leadership.

Absolutely. The biggest single shift was from thinking about how I accomplish results, using the word 'I,' to thinking about how the team accomplishes results. My success is embedded in their own success. That was incredibly pivotal. When you're a president or CEO, you can't touch everything. You are so dependent on teams of people that you have no ability to affect and control everything directly. Through people, communication, and strategy, you really appreciate how important that team is.

It's losing the people that are part of this family called DXL. We jokingly refer to it as a family, but the reality is the level of empowerment and trust in the people, the ownership and accountability that the teams I work with have, and my belief in them—if we lose these people, it's years in the making. When I join a company, I always say that culture needs to evolve, and at DXL, it's been a three-to-five-year journey. I'm in my fourth year. If you lose people, you lose culture, and it takes that long to build. Culture eats strategy for lunch. It's every bit as important as strategy and the people. That's probably what keeps me up most at night. We have a great strategy, but we don't control the macros in the world today. It's the people's ability to navigate, be agile, tenacious, resilient, and communicate successfully.

When I joined the company, I proclaimed that I wanted to see a different kind of company. We spent a lot of time saying, 'This is the kind of company I want to be a part of.' I typically say if a company's culture isn't great, it's broken. We collectively believe in the same core values. If these values aren't relevant for you, I literally say the door is over there, and you should leave. We want people that rally around the same elements. We have tangible ways we do business, like leadership, empowerment, accountability, and ownership. And intangible ways: we give surprise Fridays off, we send care packages to every employee, we have a partnership with a university to help people go to school, we changed our benefits program. We do a lot of things. During the worst of COVID, everyone was on Zoom. It forced a decentralized management structure. You can hold people accountable, but you have to empower them. That empowerment was a critical element of people feeling greater levels of trust. The outcomes we've created are because of those people who are empowered. Our company is headquartered in Boston, but I've been back to Boston only twice in two and a half years, and the company successfully navigated its greatest success in 2021 because of these variables.

We have leadership programs and a formal mentorship program. There's also an element of role modeling what leadership looks like and encouraging people to take risks. If you make a mistake, what does management do? Is there punishment, or is it a learning experience? You empower people to take more risk if they know there are no repercussions other than learning. That builds levels of trust and confidence. It's somewhat self-fulfilling, but it's part culture, part how you lead, and part how you mentor.

I have an incredible group of people I work with. They are functionally experts and they write singles around me. I value their perspective greatly. I've done a lot of different things, but I'm not an expert. I probably couldn't be a CFO or a CMO, but I know a lot about those things because of my experience. They are amazing. You want to be able to help them navigate, knock down roadblocks, and be supportive. I'm not their boss; I'm really just one of the people at the table.

We've done a lot as a senior leadership team, facilitated by a person I have a long-standing relationship with. We've done the Hogan assessment, off-sites, and we try to force-feed open, direct conversation. Initially, it was not the way we operated. The prior CEO did many things well but maybe not in the way I talk about. So I role model the things we're talking about, which brings out the ability for people to evolve, test the waters, explore, and build confidence. I have a responsibility to help them have confidence in their actions.

It's about engaging people. If you're sitting around a table in a VP meeting and there's not a lot of dialogue, I ask people directly, 'Bob, how do you feel about this? Debbie, can you share a perspective? You look puzzled; can you help me understand?' It's important how you do that. If you're making someone uncomfortable, they won't want to do it. But if you're earnest about caring what they think, and when they say something, even if you disagree, how you respond builds a knowledge that you really want to know. The best debates are the ones where we don't agree, and we navigate that disagreement well.

I want to comment that it's not a Pollyanna. I'm not a Pollyanna. It's not about consensus. There are places where I have my own accountability to decide what needs to happen, and sometimes it's my decision. We don't run DXL by consensus or democracy, but everyone has to have a voice to create input. At times, I am accountable for things; at other times, other people are accountable. It's important to highlight that.

Success creates expectations for greater success. Our team is very motivated and committed. They recognize that the size of the addressable market for our big and tall customers is far greater than we are, and yet we're the biggest. They have an incredible sense of purpose and joy in helping the big and tall underserved community find clothes that fit. Our mission, vision, and purpose are unique. That creates an expectation for greater outcomes. I continue to push us to have the fortitude to live through what we're trying to do and hold onto our vision. Not every day works, and not every quarter is as you would hope. The macros might push us, but if we want to consistently be what we talk about, we have to know our North Star and navigate around our vision, mission, and strategy, and find ways to reinvent and innovate when something isn't working.

Everything you've shared in the last 40 minutes is amazing. DXL sounds like an amazing place to work. How many employees are there?

It's interesting that you're understaffed but still saw growth.