Tarang Amin on Reinventing Leadership

Sure. So, well thanks again for having me. I'm a big believer in making sure your teams reflect the communities you serve. And so I'm very proud of the fact that our workforce is 76% women, 74% Gen Z and millennial, 44% diverse. They absolutely represent the community we serve. I'm also a big believer in ownership makes a difference. Growing up our family had a motel business. I saw firsthand the power of ownership, yet I found myself in many corporate environments as great as the companies were where the vast majority of equity was disproportionate to the people on top. So when I had my first CEO role at Schiff Nutrition, I insisted that everyone get equity. It was the only battle I had with my private equity backers. They said, no, you don't understand there's a management pool, it only goes to the people at the top. I said, great, make mine performance based and let's distribute my equity to all the employees. And I saw the power that created. E.l.f. Beauty is one of the very few companies that grants equity to every single employee every year all around the world. And I'm actually quite explicit about I want to have meaningful wealth creation for the people that are driving our results. And so if you exclude the named executive officers since our IPO, I think we've granted over $220 million of equity in a stock that's gone up sixfold. And so it's something that absolutely ties a lot to our culture in terms of having this passionate team of owners in a high performance team culture. And we've seen the difference it's made.

Well, my origin story is one of an immigrant, I'm of Indian ethnicity. Both my parents were born and raised in India. As you said, I was born in East Africa, I was born in Nairobi, Kenya, spent part of my childhood in Kenya and Uganda. And our family immigrated to the US when I was a child. Now, like many immigrants, the way we rose were as entrepreneurs. So when I was 14 years old, we sold our house. We took every penny we had and we bought our first motel on Route 1 in Alexandria, Virginia. We moved right into the manager's apartment and our business model as a family was we'd find these distressed properties, we'd fix 'em up with good operators and we kept building that out. Now the motel experience was quite formative for me 'cause I found myself after graduate school at Procter and Gamble and their brand management program. And it's great a training ground as that was, I tell people everything I know about cash flow, economic profit, how you treat people really came from those early days building up our family business with my dad and then being able to take those same entrepreneurial skills to be able to scale much larger businesses. Now I think you, you had a second question of?

Well, you know, I'd point back to the motels and just to give a little bit more context or color on that, I was 14 years old. It was 1979. Interest rates in the US were around 18% and every penny we had was leveraged into this property. So you develop this intuitive sense of cashflow. Every dollar coming out, every dollar going out. You know, I've always loved that Billie Jean King quote of 'Pressure is a privilege.' And you know, I hadn't seen the quote until many years after I was on the motels, but I love this aspect of feeling pressure indicates you're in a situation with high stakes and the potential for great achievement. And I very much felt that way in the motels and it really was formative from a leadership standpoint 'cause not only had the pressure of we need these to work, our entire family wellbeing is based on it, but how do you motivate others, many of whom were hourly workers to be able to give discretionary effort, to be able to meet what we wanted to go do. So I'd say that was my first time I really felt a leader. I mean, I subsequently was like president of my high school class, you know, the leadership roles when I was at Duke and other things. But I really go back to those early pressure points where you had two alternatives. You could either fail or if you were going to succeed, you're going to succeed through others. And that very much I think has stayed with me for, gosh, over 30 years.

No, you know, I think it was an incredible experience, but my parents had a high premium on education and making sure I did something different than the motels. As much as I still love hospitality, I'm still probably one of the best tippers there is 'cause I know how hard it is to make up rooms and do hospitality work. But I'd say my interest probably took me elsewhere.

Well, you know, I think the unifier for me is finding a way of leveraging strengths. So I've always had the ability of leveraging strengths in people as well as in businesses and really being able to really hone in on that. And that I found was a great unifier. If you can actually paint people a picture of this is what we're trying to achieve. And then more importantly to help them reveal what their personal strengths are. And you know, I've always believed in the power of diverse teams. And if you have a diverse team, if everyone's leveraging their strengths, the entire team gets stronger.

Well, you know, I think one of the first lessons is when superpowers are absent. I remember I was brought in to do a turnaround at Clorox and as part of my getting to know each person, I met this woman and she was in customer marketing and absolutely miserable. And I said, 'Why are you in this role?' And the assessment was, well, because they don't think I'm very good with retailers, so they put me in this. And I'm like that's ridiculous. Like that doesn't make any sense. And she ended up being a terrific consumer marketer so I changed her role. I put her in a consumer role where she could shine. And so I get back to this theme of leveraging strengths, being able to uncover what someone's really good at and really being able to hone that. I would say the second thing for at least my personal superpowers is being able to create the cultural conditions for innovation to thrive. What are those barriers that get into people's way that you can basically free an organization to be able to really achieve well beyond what they thought they were able.

Well that was well honed based on some of my other leadership experiences. So the way I describe the e.l.f. culture is we're a passionate team of owners operating in a high performance team culture. And there's a few concepts that are really important from the beginning, that ownership, making sure the community represented the community we serve, but also not being assumptive that people know what the norms and behaviors are that we expect and that we thrive. So we actually train everyone in the company on this high performance team model where it's about developing passionate relationships and then being able to give pinpointed specific feedback real time in the spirit of helping the team succeed. We call that healthy conflict, which then in turn leads to very strong mutual accountability. And if you look at any objective measure, we just got back our Culture Amp survey. 97% of our employees participated, 98% would recommend e.l.f. as a place to work. The level of engagement, particularly on the high performance is a key tenet of our culture, of one team, one dream. We rise and fall together and making sure that's that shared belief system of this is what we're trying to do, this is what we believe in. And I put it all the way back to probably two things. Our mission as a company is making the best of beauty accessible to every eye, lip and face, and every is very important. So that ability, that aspect of inclusivity and making sure each person is leveraging their strength and is free, is really important. And that ties to our vision of being a different kind of beauty company. We do that by building brands that disrupt norms, shape culture, and connect communities through positivity, inclusivity, and accessibility. And so the culture is absolutely essential to our ability to be able to meet that vision and mission.

It's, but that's why we don't, we're not assumptive. We actually train, we have a high performance team coach on retainer who's available to anyone in the company. Even as a senior team, many people on my senior team I've worked with for 15 years, we still will do the ritual of pinpointing two specific behaviors we admire about each other. One specific behavior that might be limiting their effectiveness. Everyone goes around, gives feedback, and we make commitments to each other of let's accentuate the things that we really admire and let's minimize the things that might be getting in the way. And so being able to practice that pinpointed behavior where it becomes natural in an organization, we do it with every one of our teams and it's a base expectation of how we do work, which is different than a lot of organizations. I found particularly a lot of big organizations. Feedback often wasn't given until the annual performance review. And so we actually don't do performance reviews. 'Cause I didn't want the crutch of an excuse of why you weren't giving feedback throughout the year as you went through. We do development plans, but it really is a culture that thrives on feedback and on getting better.

Well, rituals is something that I long believed in. I have my own personal rituals of working out in the morning, how I lead the company in terms of our executive team. And you know, beyond the agenda topics, the most valuable time of our enterprise wide meeting is the first hour and a half, which we call What's Hot. What's hot in your life? What's hot in the business? That's where we'll agree, disagree, commit, and keep moving. And so what I found is by using these rituals, it actually frees up a lot of time to be able to directly connect with each of our leaders one-on-one and being able to really understand what's important to them, what do they value, what motivates them, but more importantly, what are the barriers that we have to remove from an organizational standpoint? And so the rituals end up becoming a really important practice of really making sure that we're being disciplined and organized in terms of the things we need to do. So we actually have that time to think, to lead, to connect.

No, that's right, that's right. I remember many years ago seeing Professor Sumantra Ghoshal's talk at the World Economic Forum where, you know, you talk about the smell of the place and he contrasted, you know, spending the summers with his kids in Calcutta and the stifling heat and the smells and everything else. And contrasting that with he was on faculty at a university near the forest of Fontainebleau and he described organizationally the many organizations put in a set of controls, compliance, contracts that really end up making an organization feel like Calcutta in the summer versus those who actually unleash their people through stretch and ability to unleash their powers and support and trust. And that stayed with me, which was probably like three decades ago when I saw that. And it really is, what is the smell of the place that you're trying to create and what are the conditions around it? It's interesting, we're doing some strategy work right now and working with Roger Martin, who I had done strategy work with over the years, over the decades on different businesses. And as we went through our business and we contrasted with one of the leading global beauty players, you know, he went through their list and he's like, oh, that they look like, that's like a P&G of beauty. I'm like, yes they are. And as he went through the set of conditions they have, and these are through their public documents, he was like, you know, they kind of want to control everything. And the way he deemed our culture is he went through, he is like, oh, you actually don't want to control that much. In fact, I would view your organization as minimal viable control, similar to a minimal viable product. He goes, you know, your approach on innovation is you listen to your community, what do they want? What's the best products in prestige? You put your twist on, introduce an incredible value versus this other company wanted to actually invent the molecules and decide what consumers ended up getting. Same in our marketing approach. They wanted a very strict brand strategy, this is what one will comply to. Whereas ours, half the time I'm seeing the things that we do at the same time, consumers are, I'll be texting my CMO, did we just drop some guy in the middle of the Pacific Ocean a care package? And she's like, oh yeah, our team, someone on our integrated marketing team saw this guy was fed up with his job, quit his job, and sailing around the world with his cat. We thought it'd be a great idea. And my point was it's not even branded. She's like, you know that that's not the point. It comes from the team. The word will get out. Certainly the word got out. And so I think this concept, going back to culture of what is it you're really trying to control and what are the conditions you want people to be empowered to thrive and have those ideas, like nobody had to go approve, seek approval from anyone to drop this care package. But it's one of those things that's actually made us the number one brand amongst Gen Z, Gen Alpha and millennials is, first of all we have a team that reflects that community, but more importantly we create an environment and a set of conditions where they have the freedom to be able to take those insights and put 'em into action.

Yeah, no, they absolutely have. I was at P&G 11 years, again, it was another formative experience for me. I definitely learned the passion of how do you delight your consumers, the discipline about understanding how do you take insights into action, leadership, the leadership model at P&G very much has been with me. And I'd say those connections I may still have. I mean I left P&G more than 20, 25 years ago, yet as soon as I connect with other leaders there or former, it's an instant connection. And so, and I, I would say that set of values that you picked up is definitely very much with me today.

Yeah, well as you know, as you said, we're big believers of your team reflecting the community you serve. And but we didn't want to just stop with our employees. We also believe there's power in diversity on a board. And so as you mentioned, we're one of only a few companies out of over 4,000 in the US that have a board that's two thirds women, one third diverse. But the fact is we don't want to be the only few companies that have that. And we're big believers business has a role for societal good. So we created this campaign as part of an initiative. We partnered with Billie Jean King on serving up basic facts of just how homogenous most US public company boards are. We then took it to a pretty provocative campaign called So Many Dicks, So Few Of Everyone Else. And the basic insight were there are more men named Richard, Rick or Dick on America's corporate boards than entire populations, underrepresented people, I mean more than Hispanic women, almost as many as black women, you name it. And by the way, our, our point is there's nothing wrong with being a Richard, Rick or Dick, let's just make room for some of these others. And so it was a way of breaking through. We partnered with NACD sponsoring now 40 people through their accelerate program, 40 women and minorities to be able to qualify them for board service. So we're using our platform things that we believe in to encourage other companies 'cause I, you know, I always tell other CEOs when they ask me, I said, you know, I wish I could tell you it was hard to have a board that's two thirds of women and one third diverse but it wasn't. It took intentionality and just putting that intention to action. And so the extent we can shine a light and actually partner with other companies that also believe that we feel we can help increase the rate of women and minorities in America's corporate boards.

Yeah, no, and, and the context obviously is important. I think we're at a time just given the polarization in the country and you know, many of these things kind of under attack right now. And we always take a lens of, I think we look at three things on what are we taking a stance on. First, does it tie to our ethos, our vision, mission and values? Second, do we have any authority to talk on the subject? And third, what would our community think? So certainly on this board initiative, it absolutely ties to making the best of beauty accessible for every eye, lip and face and our views on inclusivity. In terms of our authority, yes, we're one of the few companies that actually have those stats, but we also have, I think our stock has appreciated 500% over the last five years. So we absolutely have authority of being able to do the proof points of how these connect. And then in terms of community, we, you know, one of my board members said, okay, this is good. We understand your stance. How does your community think? I'm like, you know, that's a great point. Let's run it, run it across all of our social channels. We got 98% extreme positive sentiment. The many of our consumers are like, this is why I buy e.l.f., e.l.f. stands for everyone, e.l.f. cares about. Yeah, we have the 2% that we're like, hey, there's nothing wrong with being a Richard, Rick, Dick or a man on a board. But the vast majority absolutely approve of the stances we take. And that's one of the lens we use to kind of say, as we talk about being purpose led and results driven, how you make that connection that leads to go hand in hand.

Well I think that's one of the great advantages I have of leading a company that's full of young, diverse employees. I'm constantly learning, particularly, I'd say my social game is woefully inadequate relative to most of our employees. And so, you know, I've always taken the stance that the longer I'm in business, the more curious I get, the more questions I ask, the more I want to learn and be open to and have those forums. And so that's something that personally motivates me, but it motivates our entire company and organization. One of the things I do, I actually started it when to your learning question, when the pandemic started, we knew it was going to be important to communicate more. So I started doing a weekly email. We had made commitments early in the pandemic when many of our competitors were laying off people, stopping product innovation, stopping their marketing because we knew it was not going to be good for the beauty category if people aren't going out. We made a commitment, we're not going to lay anyone off, it's one team, one dream, we're going to get through this together. And so I started writing a weekly email just to make sure that communication flow was great. You know, I think the first one was kids, pets and videos. First time being on Zoom. Like, it's okay, we all have, we're all dealing with a new reality. If your kid comes into frame, just introduce them, introduce your pet. I think the second one, 'cause we did make that commitment of not laying anyone off was cash is king. And then it kept going and you know, at the beginning they started very business oriented and over time I always have things, personal reflections, things on my family, what was on my mind. This week, I think we'll mark the 284th consecutive weekly email and I never thought I'd be writing 'em this long. But the reason why I do is every week, I'll get dozens of responses. It's not always the same people, it's always somebody different depending what topic connected with someone. And it's been a great forum for me to directly connect with employees I otherwise wouldn't, perhaps a little bit later to later in their career. And so, and I learn with every time, even though I'm maybe imparting some thoughts, I actually learn a lot about the team, about individuals, about some of these themes and people's different takes on them. And so I'd say creating those, again using the word again, those rituals, those rituals that are all about learning and setting context and being able to interact is key to our culture. Since even our town halls every two weeks when we do 'em, we're celebrate, we're introducing new people, we're celebrating, but we're also highly transparent. I think that's an important part of this culture is transparency of, hey, let me tell you what we didn't get exactly right. Let me tell you what I personally went wrong and here's what we're doing about it. It's really important from a standpoint of not being in an ivory tower, not being inaccessible, but that accessibility and that ability of like, anyone can reach out to me anytime and it's welcome.

Yeah, so I mean, again, it's not being assumptive. We start with our ethos. This is our mission, vision, values. We train high performance teamwork everywhere around the world. We have this theme that we developed when we did our China transformation a number of years ago of, one team one dream. Every single e.l.f. member is an equal card carrying member of the e.l.f. team. And so we make sure that those same core norms and values are the same. And you know, the other thing I would say is as different as cultures are, I've over my career found greater commonality than differences in people and core cultural behaviors. In fact, we see it in our business. I remember, you know, as you mentioned, only about 20% of our business outside the US, we're starting to expand the business internationally. And remember in Douglas Italy, it's a prestige retailer in Italy, we said, look, we don't have one Italian consumer. We don't know this market. How much do we customize this brand for the Italian consumer? They said, 'Oh, not much, Italians like American brands.' Sure enough, the day we launched there were lines all the way down the block and e.l.f. quickly became their number one brand. In fact, the e.l.f. gondolas right next to Chanel and it looks like it belongs there. In fact, the only argument we had with Douglas is they said, 'You know, I know you, we have 20 segments in the US where we have the number one or two position.' I go, and I know you're particularly strong in this category called primers, which is the first thing someone will put on. It helps the rest of makeup adhere, smooths out their pores, et cetera. You know, primers isn't a category in Italy. And our approach is, look, we're a digitally native brand. We inherently test and learn. Power grip primer is actually the number one SKU in all of mass and prestige color cosmetics in the US. Why don't we put it in? If it doesn't work, we have plenty of other things we can sub it up. And not only are we the number one brand in Douglas Italy, but Power Grip Primer is their number one item. So apparently Italians didn't need primer and they didn't know it. The point of this story being we've seen the same play out country after country that we've expanded. The main franchise in the US are the same franchises in those countries. One of the reasons why we start with such high rankings in these countries is there's pent up consumer demand for the brand 'cause of our strength in social in the US. Didn't need primers. The consumers we appeal to absolutely did because they saw that feed. And so I would say for me, as much as people sometimes focus on the cultural differences, we focus on the cultural commonalities and particularly in our value system of, you know, I've never met someone who didn't want to succeed. I've never met someone particularly in e.l.f., given our values, didn't want to do the right thing, who didn't want to be empowered, who didn't want to actually have that seamless connection with their colleagues in different locations. And so we, similar to the US we stay focused on that and then because we're hiring in these different countries, you naturally get that. Our India team is very different than our China team, which is different than our team in London. But you'd see more commonality in terms of the core values of the company and how we work.

Well, it certainly helped. I mean, I think being of Indian ethnicity, you know, one of my passions, my wife and I, we love to travel, we love to explore different cultures in different countries. Having been in global organizations, so as part of the team at P&G that took Pantene from a $50 million US Western European brand to a $2 billion market leader globally. So certainly having a long career, both personally as well as professionally being able to have empathy and understanding and most importantly curiosity, what drives. And you know, when we do our engagement survey, it's done globally all around the world and we look for what are those areas of strength, what are the areas down to an individual work group level that we need to reinforce.