Ep. 33 | Jay Schottenstein: American Eagle - Building a Global Retail Empire

Hey teammates, welcome to another episode of It's All About the Team. We're so fortunate today to have a dear, dear friend of mine, Mr. Jay Schottenstein. You're remembered in life for what you do. The greatest victory you have is the joy that you bring others. The only thing a person can take with them is the good deeds they do in life. They don't care how much you know until they know how much you care. It's the most historic find in archaeology in the world, but it was like Indiana Jones. We used to tell our teams all the time, of course we're going to make mistakes, we just can't repeat them. I came from a generation where you had to put the hard knocks in to really appreciate it.

I appreciate it. You know, we're having a lot of fun with this podcast because when you get a little bit later in life and you're not the coach anymore or the president anymore, you've got to think about where else can I add value. So we decided, in conjunction with the Youngstown Business Journal, to create a podcast, It's All About the Team. We want to give people the chance to meet some people who have built teams and to maybe just pick a nugget here, a nugget there, learn from some great people. As I was thinking about it, I was calling you for about the last six months saying, 'Hey, when can we get you on our podcast?' The real reason is because from the day I came to Ohio State, I don't know when the first time I had a chance to meet you and Jeanie, but I could tell that you cared. You cared about it. It didn't matter who the coach was at Ohio State, you cared about him. It didn't matter who you were involved with in business or community-wise, civic engagement. It was so obvious that you cared. One of the things I learned from my dad, he used to always say, 'They don't care how much you know until they know how much you care.' It was so obvious to me how much you cared, and I appreciated your friendship throughout. We were both busy doing our things, but I always knew when we did have a chance to cross paths that you were caring and you were supportive. You always seemed to have a warm feeling. I thought there's nothing more important in building a team than having people that care about one another and that are willing to care about people maybe that they're not with every day, but they're part of the overall team. So one of the first things I wanted to chat with you about was we talked constantly with our guys about when you realize it's bigger than you, it's about the team, it's about the community, it's about civilization. I remember when you were working on projects that had nothing to do with your business but had everything to do with what you and Jeanie and the whole family could do to make a difference with the team. I jotted a couple of them down that struck me while I was coaching here. One was when you were working on the Schottenstein Edition of the Babylonian Talmud. For our viewers, it's the English translation of the Talmud. I thought the number of hours and the amount of people that had to come together and the willingness for you to do that, could you talk about that team effort?

That's what being a part of the team was. It had nothing to do with your business, it was bigger than you. I was so impressed because I remember you sharing with me that you were involved with it. I thought, here's a person who's running multiple companies, got 9,000 nonprofits that you're on boards of, and you step out and say, 'Hey, this is bigger than me.' You can run all the companies you want, you're remembered in life for what you do. The only thing a person could take with them is the good deeds they do in life. I'm going to tell you the other one. I remember probably six years after we left Ohio State, I was the president of Youngstown State. We were going with a group of educators and businessmen to visit companies and universities in Israel. I remember calling you up and saying, 'Hey, I need a little guidance. We're going to be very busy visiting these universities and trying to attract these businesses back to Northeast Ohio. Is there anything that you think we have to make sure we see?' So when we were by the Wailing Wall and then went down into the dig tunnels, the farthest one down, you got us access to go in that. The appreciation everyone had for that archaeological dig and your willingness to be a part of it and back it, tell our viewers a little bit about how did something like that, so historic, so extraordinary, so unusual, how did you join that team?

What was cool, as I recall, all the technology that you could only go so far down as a visitor, and then all the technology that showed where they were digging, it was amazing.

So we're seated here in your office in your conference room, and right above your head is a picture of your dad. You and I talked a little bit earlier about the fact that when you're blessed to have a great role model, and almost all of our guests that we've had on, when we talk to them about who was really a difference maker for you, inevitably it was the dad, the mom, someone in the family, some difference maker. The name Jerome Schottenstein in our community here in Columbus and the state of Ohio and all over the country is well known. What are the lessons of team and team building that you learned from your dad?

Two of the common denominators of all of our guests, or most of our guests, have been the modeling of someone like your father and the expectations for excellence. I'm going to add number three now: knowing that we're all going to have times where we weren't perfect, owning up to them, learning from them, and then making sure we used to tell our teams all the time, 'Of course we're going to make mistakes, we just can't repeat them.' If we repeat them, we've got a problem. We had successes, we had adversities, we have to learn from them both, and those mistakes we can't repeat them. I also recall, I don't remember what year it was, when I saw an example of team when you had me down to visit with at the Best Practices, and you had a bunch of your different companies. I just came in to be a guest and give my two cents and leave, but here's what I saw: I saw a group of people who were working together, wanting to learn from each other, wanting to give each other some tips. I know you and your family have had a lot of various companies over the course of time. What I'd like to do is have you go through the evolution of some of those companies and how you built them, specifically how you built the people into teams so that the company succeeded.

It's funny you bring up that there's different generations and maybe speak a different language. People asked me a lot over the course of time, 'Did the players change from the time you started and then 40 years later?' I've often thought about that question, and my response has always been, 'I don't think the players changed as much as the parents did in some ways.' But what I thought the players continued to be was they wanted to know clear direction and expectations. You talked about that report card. I also felt that regardless of what decade it was, they wanted to be evaluated. They wanted to know how they were doing because you gave them expectations. If they were really good ones, they didn't want it sugarcoated. They didn't want you to say, 'Oh well, you did fine,' because they had big goals. So when you talk about report cards, let's just take American Eagle. As you were building American Eagle, which started when did you start American Eagle?

When you turned those stores around, I think about team football teams. Some people come in and the team hadn't been doing well, and then all of a sudden they turned it around. What do you think were the keys to turning those stores around, because those were just teams you turned around?

You brought up that you needed to bring in some people to help that turnaround. What were you looking for? Everyone always wants to talk about how do I build my team, what do I look for when I hire, what's key to getting the right teammates?

What were those qualities that you thought the two of them had that made you want to bet on them?

Is there a big marketing difference than there was when you started as to how you reach the consumer?

Let's talk for a minute about DSW. Think back of how that was created and what were the things that you dealt with to build that team.

It's funny you talk about that because I was in higher ed for 48 years, and one thing I'm not sure we did as good a job of was understanding the way to reach the customer, what the customer wants and needs. I don't know if we were as agile in education. Nowadays, the thought of a student sitting in a chair for four years and taking all these different courses, I'm not sure that's a winning formula. Even in high school, I watch these kids today. I see my grandchildren and their friends, a lot of them are doing businesses, a lot of them are doing investing hands-on, they all have crypto wallets. It's amazing what these kids do. The stories are unbelievable. My grandson has one friend, he dropped out of school, borrowed $10,000 from his parents, paying them back, and in six months he turned it into a fortune. So what other companies that you've been a part of that you think our viewers would learn some lessons of building that team, because I know you've been a lot of them?

Was that the family's first business?

So you went from Schottenstein's and then Value City was...

Nothing like the magnitude of that, but it just dawned on me when you're telling the story. I was working for Earl Bruce here in '83. I was the quarterback and receiver coach. Then we lost our running back coach, and Earl came into my office and said, 'Hey, you're going to coach the running backs.' I said, 'Well, coach, I kind of feel like I know more about the quarterbacks and the receivers.' He said, 'Oh no, you're still going to have the quarterbacks and receivers, but you're going to take the running backs too.' I said, 'That seems like a lot of guys, but whatever you want, coach.' I asked why, and he said, 'We've got a great running back coming along who's a sophomore, and I don't want a new personality. He knows you already, he's going to be fine. Sometimes you bring in a new person and that personality affects performance.' That running back was Keith Byars, who in 1984 had one of the greatest years in history, should have won the Heisman with the shoe coming off and the whole thing. What I found out after doing that in '84 and '85, there's no way I would have been ready to be a head coach if I hadn't spent some time worrying about the intricacies of the run game. When you're the quarterback and receiver coach, you're just throwing them, you're worried about coverages, you're not worried about anything else. You become the running back coach, Keith Byars after every play in practice would come in and say, 'Hey, if they play this, how are we going to block this? If they do this blitz, how are we going to pick it up?' It forced me, kind of like you got forced to learn marketing. It changed my readiness to go be a head coach. Sometimes when you get thrust into things, you sink or swim, you learn fast or you're in trouble.

Let me switch gears on you a little bit. As I said at the outset, what marveled me about you and Jeanie, I'm not going to pretend with the viewers I spent lots of time with Mr. Schottenstein, but the few times it was just impactful. I started watching from afar all the things that you were involved in. What was mind-boggling to me with all of the things that you were doing for the good of the cause back in Israel, along with all of this business which is lots of paying attention, then just seeing that every great cause in central Ohio, you and Jeanie seemed to be a part of. At times I would think as a head coach, 'Man, I'm getting spread thin, I'm having to do a lot of things.' Then I kind of see what you guys were doing, I'm thinking, 'Well, I'm not doing half of the number of things that you guys are doing.' I jotted down a couple of the things that I used to watch and have watched even since I no longer live here. To me, there's part of being a teammate, there's part of building teams, but there's also part of supporting teams. That's my wife, but you both seem to be. Genie, Jeanie, is a great partner. She's always supported me, she's always been involved, and she has her opinions about things and she has great vision. With that, our children have grown up and they're all involved with us too with all this as a family.

Hey teammates, I want to tell you about a project we're working on with Youngstown State University. One of the ways Ellen and I have decided to give back is through the Trestle Institute for Leadership and Teamwork. We've collected a set of successful business and nonprofit leaders to serve as guest servant leaders in partnership with the Sokolov Honors College to teach university students teamwork, leadership, and personal skills. We teach from a foundation built on gratitude, excellence, hope, love, and selflessness. If you're a young person or parent helping to search for a unique college experience, you can learn more at trestleinstitute.ysu.edu or ysu.edu. Links will be provided in the show notes. So let's talk about a couple of these, because to me they're so cool. I think for our viewers, when you're building teams, yes you're building your team, but you're also helping others build their teams. These aren't in any chronological order, but the mental health moment we seem to be discussing a lot in today's world, you created that program for resilience, the Jeffrey Schottenstein Resilience Program.

That's why I'm so proud of Ryan and Nada. They've been very involved in the mental health resilience conversation there at Ohio State. If you think about your team, if you're not there to help your team, then you really don't care, and it goes back to the first conversation we had, or maybe you don't understand.

We used to always say to our staff as a reminder to how they worked with their players, we used to say, 'Treat every player like they're hurting, because you just don't know who is.' So treat everyone as if they're hurting. It's so critical. That was my second one I had on there, the Institute for Behavioral Health down at Mount Sinai, same focus, same realities. How about the work you've done with Nationwide Children's? I know it seemed like you were always very supportive with that group.

I also remember that while I was here, whether it was our players going and moving boxes for the Mid-Ohio Food Bank or things with the American Red Cross, it just seemed like it was a great message to your teams, your employees, and they got involved with it.

I had great examples. My parents, my dad, my uncles, they were all very community involved. They believed in the community, they believed in making a better place, and they love Columbus, Ohio. Even though we don't spend as much time here in Columbus, it's still home. It's still a special place.

1888. So it's been a few years. Watching the city grow the way it's grown, I remember Columbus when it only had one big building downtown before they had all the buildings. I remember the university when it was a little smaller. I remember when the stadium only had 75,000 seats. You bring up Columbus, one of my questions was going to be, Columbus has done an amazing job of growing, taking advantage of opportunities, making a difference for so many people. What do you think has been the key to Columbus blossoming like it has?

We used to always say when we were recruiting and in our staff meetings that one of the advantages we had at Ohio State was there weren't two big R1 research universities in our state, there was only one. In Iowa, you might like Iowa or Iowa State. Michigan, Michigan State. Oklahoma, Oklahoma State. Florida, Florida State. But in Ohio, you might like your regional campus, Youngstown State, but everyone loves Ohio State. You could go to Cincinnati, Bowling Green, Miami of Ohio, everyone's still a Buckeye fan. I grew up, my family's had season tickets since 1948. As a little boy, I remember my dad would take me to the games. Now I take my children, my grandchildren. There's nothing like Buckeye pride. It's something that when you get it, it never leaves you. So rapid fire, since I know you've been following our teams for decades, give me three or four of our teams that you really recall and why you think they were such great teams.

It's interesting. I was in high school during the '68 team, living in Cleveland, Ohio, following every single thing you could about the Buckeyes. Back then, you couldn't be on TV very often, so we only knew what we read in the newspaper. Remember when Woody used to have that show late at night? I watched that show every Saturday night. That's the only thing we knew about, but we just idolized those guys. I was a high school quarterback at the time, and Rex Kern was like a magician with the ball. We all tried to pretend we were Rex Kern. They had great talent, but there had to be something more about them that made them a great team. I do know about that 2002 team. I'll tell you one thing that I think was very similar about the 2002 and the 2014 teams, and it's a little bit like what can happen in life as well. The 2002 team, when they were younger, had some tough years. That's not why they came to Ohio State. They just weren't satisfied with how things were going. They were humble enough to study the 1942 National Championship team because they kept telling me they wanted to be national champions. I thought, 'We were just 7-5 last year, I hope I keep my job, I'm not thinking about a national championship.' So I thought, 'Okay, let's go study that '42 team.' We brought players in from that '42 team. Like you and I were talking about at the outset, they realized that it's bigger than them. That '42 team, if you recall from reading about them, that was Paul Brown. 36 of the 43 players enlisted to go to war right after winning that championship. Some of them were All-Americans, but it was bigger than that. Life was bigger than just what they could gain from football. Our kids in '02 really did a great job of humbling themselves and understanding that this is bigger than us. All we kept hearing about was we haven't had a national championship since '68. I would get letters, 'Dear Coach, I hope I don't die before we have another one.' Our guys in '02 had suffered enough, really grasped on to learning about the kind of men you need to be to reach your potential. Then there was an influx of good talent: Chris Gamble was new, Santonio Holmes was new, Maurice Clarett was new, AJ Hawk was new, Bobby Carpenter, we had a lot of young talent, Antonio Pittman, Nick Mangold. You took the old who had suffered, and Troy was running scout team, and here he later goes on to be the Heisman Trophy winner. There was a magical mesh of competitiveness, of humility, of 'Hey, I've suffered enough.' We won those games that you scratch your head how we won them. The defense never quit. They were Will Smith and those relentless guys, Kenny Peterson, Tim Anderson, Cie Grant, you could go on and on. The '14 team had a similar path. They had suffered. There was a coaching change. They couldn't play in a ball game. All of a sudden, first quarterback gets hurt, second quarterback gets hurt. Cardale Jones, I always tell people, in some ways fate was with us because I don't think anyone could have done what Cardale did in that two or three game stretch. It was mind-boggling. When you think about how great teams become great teams, there is a suffering that has to occur to learn lessons sometimes, humility, and realizing it's not about me. Then you have to execute at the right moment. I'm sure the same thing is true in business.

You never see more excitement than when a group of people do something special. That's why people love sports, because it's a group of people, a team, that does something special that's bigger than them. We used to always tell our guys, 'The greatest victory you have is the joy that you bring others through your performance.' To me, that's what being a part of a team is all about.

I got in a little bit of trouble at the end of the national championship game. We were there, and they handed me the microphone. I don't know what to say, I'm on national TV, we just had an overtime victory against the Hurricanes in triple overtime. All I could see was the fans and the band up there. I said, 'We've always had the best damn band in the land, and now we have the best damn team in the land.' I don't know what else to say, I just said something. I got all these emails, 'I can't believe you said damn on TV.' Take a good thing into a bad thing. But the joy that you can bring others is what the team is all about. That night we were in Tempe, I can just tell you, you brought us a lot of joy. If you see our photos, we even had our face painted with a little Buckeye on it. It was something we waited for a long, long time.

Thank you, coach. Thank you very much. Until the next time, remember, it's all about the team.