The Learning Leader Show With Ryan Hawk - 042: Rob DeMartini – CEO of New Balance: The Leader Behind Their Explosive Growth

Starting point is 00:00:00 You know, I've always believed that, you know, with very few exceptions, over 30 years of working, everybody gets up in the morning and comes to work and wants to make a difference. And, you know, some do and some don't, but they don't come to work not wanting to contribute. And if you could figure out what each of them was really good at and where their experience base and where their confidence was and put them in those seats, that was the first step. You know, before you start throwing people off the bus, figure out. if you got them in the right seats and are they fired up about the seat they were in. Are leaders born or are they made?

Starting point is 00:00:36 Our host, Ryan Hawk, believes that leaders can be made through determined, focused work on learning the art and science behind the makeup of other successful leaders. Now it's time to inhale knowledge and exhale success. You're listening to The Learning Leader Show with Ryan Hawk. And welcome to the Learning Leader Show. I am Ryan Hawk and I'm extremely excited about tonight's featured leader. Rob DeMartini. Rob is the CEO of New Balance. He took over as their leader in the year 2007. At that time, they were doing $1.5 billion in revenue. Fast forward to 2015, and they're now a

Starting point is 00:01:27 $4 billion business. Just incredible growth with Rob at the helm. Also, in 2011, Rob was named the country's most playful CEO in a nationwide search for inventive leaders who incorporate play and innovation into the work environment to a encourage collaboration and teamwork. In our conversation tonight, we got into a number of topics, another jam-packed episode. A couple of them were. How we discusses the specific reason for New Balance's explosive growth. Anyone who's working in a leadership role, you'll want to hear the actual reasons behind

Starting point is 00:02:01 their growth. Also, the importance of being committed to the long view. And sometimes that hurts short-term goals, but Rob is committed to the long view and it's worked. as well as specific habits he's formed that all of us can put into our lives to help us better professionally and personally. There's so much more of this episode. I know you guys are going to love it.

Starting point is 00:02:23 Without further ado, it's Rob DeMartini. All right, Rob, again, very, very excited to have you here on the Learning Leader Show. And I got a question to get us kicked off when it comes to success. And you've had a lot of success personally in your life. and you've also been surrounded by successful people, and you've personally made decisions to be surrounded by those people. And when you look at others who have had success, what are some of the common characteristics that they all share?

Starting point is 00:03:06 Ryan, great question, and thanks for letting me talk with you today about this. I have been blessed by just being lucky and in the right place at the right time and been around people that have and continue to have significant, levels of success in all walks of life, not just business or work or financial, but, you know, I think to measure somebody's success, you've got to look at more aspects of their life. But a number of years ago, I started to try to think about, you know, to try to commit to paper, what was I seeing that were the consistent and common themes across these people of significant success? And my list really has four things on it. The first I always see,

Starting point is 00:03:51 is people who are naturally curious. Do they want to understand how things are working? How did that happen? Could it have happened differently? All that kind of stuff. I mean, if you're curious, it opens up questions and leads you towards answers and learnings that otherwise you don't see. Real quick, Rob, I want to get to the other three for sure,

Starting point is 00:04:14 but I absolutely love that aspect, and I even love it so much that on the front page of my website, learningleadershow.com, it says, are you massively curious? Because the friends of this show, the listeners, are probably the curious type, because that's definitely how I am. And so that's how I like to live. So it's really cool to hear you.

Starting point is 00:04:34 I'm researching your show, but I agree with you full of. Oh, perfect. Okay, go ahead. Sorry. The other three, energy, you know, energy and optimism. You always see that in people that are successful. And then the one that really stands out for me the most, maybe because it takes the most to work, is a really high sense of personal awareness. Do you know how you're coming across to others?

Starting point is 00:05:01 Do you have a good read for how they're receiving your message? I like that. And so let's take it back to what you're doing now. You're leading a company that I think a lot of people admire, new balance. and I'd love to learn a little bit about how you've gotten to this point as well as. So the journey, so to speak, I love learning about the journey of others so we can have it possibly affect our own, as well as, you know, what your current initiatives and things you're working on at New Balance.

Starting point is 00:05:35 Okay, well, just kind of personally the journey is I, you know, I went to school in California. My wife and I are both from California and didn't think I'd ever live anywhere else. and then started with Procter & Gamble directly out of school and sales and ended up moving 11 or 12 times in my 20 years with them. And just, as I said in the opening, was really up against just some fantastic leadership where, you know, maybe the styles didn't fit me. But every time I've worked for a great leader, I've been able to take away so much. And that got me to the East Coast and got me the chance to be the first outside CEO to come in and run New Balance. I work for the owners who have run it, who have owned it since 1972 and bought it when it was doing $100,000. And when I took over in the middle of 2007, we were about $1.5 billion and had a long history of success and very much uniqueness in the marketplace.

Starting point is 00:06:32 And building on that, we've had a nice run. We're now going to be $4 billion this year. Wow. And expanded globally and doing business in about 70 countries. and it's an industry that's a lot of fun. And good competitors, really capable people above us and Nike and Adidas and people that are about our size, we're a little bit bigger than Under Armour.

Starting point is 00:06:54 But, you know, there's a lot of good competition in the space. And, you know, it's a place where the widgets matter because you're talking about athletic performance, and that's important to matter what your sport is. Okay, so you grow the business from $1.5 billion, and that was in 2007. And now just, you know, it's only been eight years and it's a $4 billion business. Now, this is probably a broad question, but if you had to distill it down to the few reasons for that success, for that immense growth, what would those reasons be?

Starting point is 00:07:33 The first is crystal clear to me. It was here when I got here, but a culture committed to winning and getting better. And, you know, there were parts of it that needed to be kind of re-energized, but the culture was here. the current owners that have owned it since 72 built an amazing culture in the company. And while it had been a little flat in 2007 when I got here, the bone structure, if you will, was there and ready to be exercised. And so we gathered around a clear mission and let people do their best work, and their best work has added up into some really outstanding results.

Starting point is 00:08:13 That's incredible. I mean, obviously, to that level of growth. And now, when there's growth goals set, obviously, and you're part of the group setting those goals. How much have you guys overperformed in relation to those goals? We're about, we set a very aggressive plan in place back in 2009. 2008 was a little bit of a lost year, if you remember, the economy was coming apart. and everybody was kind of covering their own and just riding through it.

Starting point is 00:08:49 But in 2009, we put a growth agenda in place through 2020, and we're running about two to three years ahead of that. So we originally said we wanted to get to be $5 billion. We're going to probably be closer to six and a half seven by 2019. The great thing is that the next three years, we can see growth faster than we've been growing so far. What are the keys to that? I mean, I know you've, you've gotten into a couple different areas.

Starting point is 00:09:19 I think athletics, you're obviously now affiliated with professional athletes, even more so, and multiple sports. What do you think, though, are the keys to that success, that growth? I think the keys, there's really four of them. First of all, we're very interested in not only the business results we get, but how we get them. in today's world, and particularly with millennial consumers, you know, I wouldn't say we did it because that's why, because we didn't see it coming, but they value how companies operate as much as what it is they produce. Second, big one is we started saying that what we could do differently, or at least what we could do well, is put athletes first and truly work in their service to make them better. and if we could do that, that the business would follow. And as a private company committed to American manufacturing,

Starting point is 00:10:19 committed to the things we hold dear, we said, all right, we're going to do it. And I think you mentioned baseball. That's a great example. Four years ago, we had zero baseball players. Today, one third of major leaguers wear our product, and they do it because our product is better. Yeah, that's interesting.

Starting point is 00:10:40 So you mentioned being a private company. So in today's activist environment where CEOs of publicly traded companies are getting so much pressure from activist investors, Rob, what advantages do you have as a CEO of a privately held company? Ryan, I think it is a great advantage. And I think the advantage manifests itself in a couple of ways. The first is we can take the long view. You know, our commitment to domestic manufacturing clearly is the long view. I was on CNBC's power lunch last week, and they asked about that.

Starting point is 00:11:17 There's no question being private has helped us there. It helps us in balancing the results we get and how we get them. And it also helps us in investing in ways that we're confident will pay off, but may not be the obvious or the most popular direction. You know, manufacturing innovation, again, driven by that. So being private is an advantage. There's no question about it. So why do you think, so let's say a public company sees that.

Starting point is 00:11:46 And there's obviously investors, there's pressure. There's things that I think, as you mentioned, it can be more of a short-sighted viewpoint. Why can't that something be done about that for public companies? Why can't they take the longer view? Why can't the CEO of a public company convince the decision makers to say, listen, we have a plan. The plan is a longer term. It's not necessarily going to be quick. I know it's, you know, what have you done for me lately? But why can't they take that viewpoint? Well, I think they can, and to a great degree, the best companies in this country do. But at the same time,

Starting point is 00:12:26 you mentioned it, the activist investor who wants that return right now, many times the best way and the shortest way or not the same. And, you know, we tell our people all the time that the high road is the high road because it's harder and slower. So, you know, I don't want to make it just private versus public, but I think in our case it has given us some advantages that we have fully optimized. And there are plenty of excellent leaders leading public companies that do a fantastic job of taking the long view, but they do have somebody chirping at them every 12 weeks to ask why the results aren't better. Yeah, I've studied that a lot amongst different industries because I'm really fascinated and curious about the difference.

Starting point is 00:13:12 And obviously there's pros and cons to both, but it's cool to see the viewpoint that you have and the way that you guys operate. Because obviously it's built for success long term. And you've even seen the growth speed up based on that on your guys' philosophy, which is really neat. Now, do you guys, what's your philosophy at New Balance when it comes to hiring leaders? Are you one to promote from within or hire from outside? And if you do hire from outside, what are the key characteristics or traits you look for and other leaders to work with you? Ryan, that's a great question. I had a real opportunity in the first 20 years of my career.

Starting point is 00:13:53 I was with Procker and Gamble, and they have long been a promote from within company. And by and large, through my time there, they were 100% promote from within. The only exceptions were when they bought companies. They would bring people in through that way. But at New Balance, we're not big enough to be able to do that. There's some real strengths that it gives you as it relates to culture and language. But, you know, we do try to promote from within whenever we can. It's the first place that we look.

Starting point is 00:14:23 But we also go outside. And when we go outside, we look for, I look for those things I said, at the beginning of the podcast. Are they naturally curious? Do they have a burning desire to win? Are they highly self-aware? And, you know, we find that those characteristics create people that want to win and want to win as a team.

Starting point is 00:14:45 And winning as a team is incredibly important at New Balance. And so they got to also be team players instead of individual players. How many employees do you guys have there now? We have a little more than 5,000, about 5,500 right now. And are they located all over the world? All over the world. And about 900, a little less than 1,000 of them are in our headquarters, our two headquarters facilities in Massachusetts and the rest are all over the world.

Starting point is 00:15:13 What was the biggest challenge for you as you took the role? You know, like you said, you came from PNG and you made the move. And sometimes it's hard being an outside leader coming into a company. It's oftentimes very hard. and to understand the culture, understand how, because some leaders want to put their stamp on it immediately. I've always found those leaders seem to have a little bit of insecurities, but the better ones seem to be in a learning mode.

Starting point is 00:15:37 They're willing to listen, and I already get that sense from you from our conversations prior to this, that that's your take. But what were the biggest challenges in making that transition? Well, I think I was, I came into a leadership team that had a lot of experience. I don't remember the exact number, but I remember sitting in my first leadership team, and there was about 190 years of footwear and athletic footwear apparel experience in the room,

Starting point is 00:16:03 and I had about a week. So I wasn't carrying my fair share of the weight there. And it was a mix, right? There certainly was a lot of experience. Some were fired up and ready for the next chapter, and others were reaching a point where they weren't as fired up. And so you try to listen to everybody and realize that, that, you know, I've always believed that, you know, with very few exceptions, over 30 years of

Starting point is 00:16:28 working, everybody gets up in the morning and comes to work and wants to make a difference. And, you know, some do and some don't, but they don't come to work not wanting to contribute. And if you could figure out what each of them was really good at and where their experience base and where their confidence was and put them in those seats, that was the first step. you know, before you start throwing people off the bus, figure out if you got them in the right seats and are they fired up about the seat they're in? And then figure out, all right, sometimes you do have some people that are in the wrong seat and it turns out that there's not a right seat on the bus where you're taking it. And so those, you've got to move them out and do it in a way

Starting point is 00:17:08 that's respectful, that values their input because they were there before you and they obviously made a contribution, but makes them feel, you know, good and confident about that. what they had given, but also let them understand that you don't see them fitting on it going forward. And that balancing act, you know, in hindsight, you never do it fast enough. But I think when you're sitting in that position, you also have to have respect for what was done before you got there. Did you have a lot of turnover at the start? We did in the first two years, you know, but none of it in the first two months. I think there's a bit of a division there that I wanted to know what they had. I wanted

Starting point is 00:17:45 to know whether what I was asking for was right. And really, I wanted to know was the fire still there. And if the fire was there and the experience was there, then it was a matter of getting them in the right seat. And in some cases, that's what it was. And in other cases, you know, they, just different stages of the career, the fire wasn't there. And so we said, okay, we got to, we've got to find the right place for your next chapter. And in some cases, it wasn't going to be with us. Interesting. And I'm also really curious from a, from your leadership team. perspective. How do you guys conduct strategic planning for your business? What type of, what's the timeframe there and how do you balance, you know, long-term goals versus short-term goals?

Starting point is 00:18:31 Well, really, that was the whole first 18 months while I was new as a new CEO and new to the industry. Honestly, all I could bring, because I didn't know the industry. I didn't know the customers. I didn't know how to make shoes. I didn't know any of that. Some would argue I might still not. But what I did know how to do is put a strategic plan in place. And I even knew how to do it in an industry that I didn't understand because I knew the right questions to ask. So I spent a lot of time with the team, both the new members and the people that had been there for a while and even the people that were leaving trying to get aligned on what were we trying to accomplish. And we were able to boil it down onto a one-page plan with five clear choices. And

Starting point is 00:19:13 And then we spent time asking ourselves where the things we were working on leading us to that place. And in many cases, we had a lot more things we were working on, and we didn't exactly know why. That's just the way we had done it. So we put a five-year plan in place, and I think I told you earlier in the podcast in 2009. And it was 2009 through 2013. And then every year we add a year onto that. Because, you know, the fourth and fifth year in those plans. you don't really know what's going to happen. It really becomes a bit of a North Star. And each year,

Starting point is 00:19:49 you try to calibrate a little bit and say, are you getting, or you're moving in the right direction, do the choices still make sense? Are they still relevant? And are consumers responding? You know, and over this time, even from 2007 to today, just you as a consumer, think how much more important your phone is to you today than it was five years ago. Yeah. You know, so consumerism is changing, at, I think, the most exciting and most hectic pace that it has been in my 30 years of being in consumer businesses. And that's exciting. That fires me up. I don't know how it's going to be next year. You know, Uber, a $40 billion market cap. They're a five-year-old company that has no inventory and no product. That's outstanding. It didn't even exist in 2010. So it's exciting times,

Starting point is 00:20:38 and that strategic plan gets sharpened every year. We take about two months. every spring to kind of sharpen up that next year. We just added 2020 onto our plan, and we feel good about where it's going. You mentioned earlier that you knew how and you know how to strategically plan, and that's, I'm assuming, part of the reason why you got hired. But take me back to that moment where you are chosen to be the guy. What are the specific reasons that they chose you to be the, leader? That's a great question. I'm not sure I can articulate it, but, you know, as I reflect,

Starting point is 00:21:24 I had been successful in different businesses, and I had been successful in both big and small, and I think that was very important ownership because they didn't want, you know, a corporate guy with corporate baggage and all the big teams and lots of people were a pretty lean organization, but I had had a really great chance when I was at Prokering Gamble to run a very small small $65 million acquisition, and boy, I had more fun doing that than I had running, you know, half a billion dollar divisions because it was just you, your team, and the small amount of resources you had. And it reinforced for me that having resources is great, but that's not the key to success. It's an input and certainly is helpful. But there's a lot of small companies out there

Starting point is 00:22:13 and a lot of lean organizations that have just as much success and quite frankly a bit more fun in the process. And I think that came out to ownership and that convinced them to give me the shot. Well, and you could operate quicker. You make decisions faster. You're more agile. I think it seems when you study bigger companies that might struggle or aren't growing as fast as they need to, they can't make those decisions and things just are going at such a slow pace to get anything done that that's when businesses struggle. You're right, Ryan. And even at our growth, we've now kind of doubled ourselves one and a half times.

Starting point is 00:22:56 And I'm worried about that. I don't want to see us get caught up in decision making. You've got to manage risk and you've got to be responsible, but you also can't get caught flat-footed. I'd rather be wrong in small ways three or four times and then get it right than study something until it's no longer relevant and then make the right choice that was the right choice six months ago. Yeah, I'm fascinated by all this. I could go deep when it comes to how the business grows, the size, the scope, the right people, which I think is the most important part.

Starting point is 00:23:33 And getting in the right position on the bus, it just made me think to good to great and Jim Collins and all of that great work that he's done that probably helped and continues to help leaders in business for years. No question. I mean, that is a great book, and he's a very insightful guy. And yet, I think he's recently, I'm going to forget the title, but he's got a new one out. Great by choice. Great by choice about the companies that are growing so much faster. Yeah.

Starting point is 00:24:02 You know, the 10xers, yeah. We are at a very interesting time in consumer. and the way businesses are popping up out of really thin air in very young companies. I think Fitbit just went public recently, and their market cap is stunning for a company that I don't know how old they are, three years. Can't be much more than that. Yeah, it's relatively young. It's incredible.

Starting point is 00:24:28 Speaking of that, so what do you think about wearable technology? How does that impact new balance? It's a really interesting space and one that I only begin to understand. But for us, we are going to be in that space. We're not there yet. We recognize that parts of it are significantly out of our area of expertise. So we'll more than likely be looking at partnerships, and we're a lot more interested in the community power of it than we are of the hardware.

Starting point is 00:25:02 I do believe there's going to be a shakeup. If you went to CES, the electronic show in Vegas this year, there were literally hundreds of people coming into this business. And you got Apple at one end of it and their dominance. There will be a big shakeup. But I think the key to me is that brands won't advertise and the old days of kind of spray and prey for advertising. they're over.

Starting point is 00:25:33 And consumers are going to pick brands. It's not the other way around. That makes sense. So is that something you would look at to potentially acquire one of those smaller companies who are building it, a product maybe for some of their technology, some of their hardware, and then you can play into the culture, teeming, social aspect of it on your end? Yeah, I want to be careful. I don't want to talk about what we're going to do in the future.

Starting point is 00:25:58 But I will say we're very interested in fast. fascinated by the companies out there like Uber, like Strava. I was given a speech a month ago, and you can hire a bodyguard for the night through a website called Banner Man. Now, I don't know how you roll, but I don't need a bodyguard that often, but it's good to know it's there if I need it. So they're just, they're popping up everywhere. Yeah, that's cool.

Starting point is 00:26:27 I haven't had not heard of that. I have not rolled out with one of those, but I've seen others who do. have more power to them. I don't know. Maybe you do, depending on where you go. You would. The other thing, getting back, I had one more question that was just popped in my mind. I haven't got a chance to ask it.

Starting point is 00:26:42 And you don't have to answer this. But I'm always fascinated by the process that people get, how they get hired and how decisions are made when people are hired. What was the process for you? I mean, even down to the details of being interviewed, of being chosen. I know we talked about why you were chosen, but what was it like leading up to that point? I read this whole huge article on how Yahoo got their most recent CEO, Mercer Mayor. And so I was like, wow, I don't know why that fascinated me because they had this huge search firm, spent a ton of money, it was all private.

Starting point is 00:27:19 It was pretty crazy. And so I'm curious about that from your perspective. You know, I think what strikes me as I look back on it is how important fit with culture was when I started because I was taking over for a husband and wife leadership team that had led the company for 40 years that still owns it and that were more proud of the culture they had built way more than the commercial success that they've had. I mean, that's still the case today. They are much more proud of what our associates have done and what our company means to consumers, to customers, and to the communities in which we do business. And I happen to know, I'm not sure whether they knew at the time, but I happened to know one of the other people they were talking to.

Starting point is 00:28:14 And, you know, as talent as a leader as that person was, I think they got the culture question right in that it's as very very. valuable to me, even though I didn't build it as it is to them. And, you know, I think every night when I go to sleep and just about every day when I get up and go to work, that my job is to build on the shoulders of those that came before me. And it's great to be part of that culture. It's great to have a very small impact on continuing it. And that fit could have been wrong. It easily could have been wrong. And so it took, it was a long process. It took almost a year. A lot of discussions. you know, I'm just lucky that I got enough of the answers right to get a shot at it. A year? What happened during that year?

Starting point is 00:28:56 I was at another company. We were talking, and, you know, the conversation was hot and heavy for points. At other points, it cooled down a little bit for reasons that I'm not sure. You know, they were bringing in the first outside leader that ever run the company. Yeah, that makes sense. So, you know, I think was, were they ready, regardless of whether I was right or not, were they ready? Yeah. And it was important that we got there on whatever natural pace. And I'm relatively impatient.

Starting point is 00:29:24 So I will tell you that was hard for me. But in hindsight, it was so important to get that right. And, you know, right's not forever. But it's eight years in. I'm still as happy with a job as the day before I started, if you will. And they're happy enough with me to let me keep doing it for a while. Yeah. So, like, you know, we mentioned you spent your time.

Starting point is 00:29:47 some time at P&G. What is one habit that you formed working there that you think has contributed to your success? Well, I know one that I value a lot is, and we talked about it earlier, that one of the greatest things about P&G, a lot of good things. It's a fantastic company. But one of the greatest was in the sales culture at the time when I started, it was well-known, not written down anywhere, but well-known, that you simply were not going to get promoted and moved ahead unless you had prepared somebody to take over for you. So you had to be

Starting point is 00:30:26 good enough to be able to handle more. You had to, you know, demonstrate all the upward capability. But you also had to leave where you were a better place and somebody had to be ready. And just that mentality, even though it didn't always come out of your own business unit, that mentality that if I haven't prepared somebody to backfill me, that I'm not going anywhere. What a great way for companies to think. Wow, I love that. I have never heard of that before. I love that. Yeah, it was very, very cool. And it was it was kind of unspoken culture in the sales world at P and G that, you know, you had to clear the hurdle yourself, but boy, you better have somebody ready to take your seat or your manager just had no incentive to move you ahead. Do you implement something like that similar

Starting point is 00:31:10 at New Balance? You know, no, we're not at the scale to do it, but the thinking we do. Yeah. You know, the idea that what are you doing to make sure that your people are ready, we do it that way. We don't quite have that same depth of bench, but I just still love the idea. As a manager, you're just as responsible for what you're leaving behind as what you're stepping into. Yeah, so, you know, we mentioned earlier, New Balance is a $4 billion business. Do you view yourselves as a whole as a niche player or as an industry? street leader. I want to make sure this sounds right, but we've always said we don't need to be the

Starting point is 00:31:53 biggest to be the best. We certainly do not view ourselves as a niche player. We think there are places where we are the best. There are certainly places where we need to be a heck of a lot better. But we're not intimidated by size. Yeah, I was thinking of your size. I'm like, I don't know how you could be a niche player being $4 billion business, but I just thought it was interesting because there's,

Starting point is 00:32:19 I feel like I've experienced this growth over time as well because you see new balance everywhere now, especially I'm looking at professional athletes, just going to the gym every day, the number of people who wore them to who's wearing those shoes now. And there's all different types of new balances that I'm, that's what kind of fascinates me to see the growth. That's why I originally reached out to you because I kind of just sensed the growth without fully understanding the numbers behind it. No, I think that's fair. And your question is totally fair because we've got, you know, this category is led by a company that's six times bigger than us. And they're very capable, very competitive. They put out great product, great marketers.

Starting point is 00:33:00 I mean, they do a lot of things right. But we've learned, if you look at the Major League Baseball, we have learned we can hold our own with anybody. And five years ago, we had no pros wearing our product. and today almost a third major leaguers wear it and it's because the product's better. So from an endorsement perspective, you'll see Kevin Durant getting $300 million, LeBron James, Tiger Woods, Rory McElroy, I'm sure Jordan Speath's getting a ton of money now. Is that even a space that you want to compete when it comes to like the guys getting hundreds of millions of dollars to sponsor or to wear your gear and to do the commercials and things?

Starting point is 00:33:44 like that. A couple comments. First of all, UA couldn't have time Jordan Spieth any better. I know. It was perfect. He seems like such, I don't know him,

Starting point is 00:33:53 but he seems like such a great young man too. So hats off to them and they're getting their money's worth out of him no matter what they're paying him. But, you know, no, we don't want to get an arms race with Nike and Under Armour, nor do we think we're well equipped to do that.

Starting point is 00:34:06 So, you know, they are good judges of talent, good judges of value, and we don't want to do that. We want to win, I think I'd said it to you earlier, we believe that the modest success that we've had comes from putting athletes first. And we believe that if we can make product that lets them perform better, we will get our fair share kind of the old-fashioned way by earning it. And so far it's working.

Starting point is 00:34:35 You know, we're doing some pretty cool things. We've got a track athlete and an EPL European football soccer athlete. wearing 3D printed product. That means we made it one pair at a time with no mold. And that kind of innovation we believe will allow us to make product that fits the individual better. And we think that better fit means better performance. That spurs a question. So do you feel like you said you think putting athletes first, the athletes, especially in the major league baseball arena, are choosing your product because it's simply better?

Starting point is 00:35:11 Has there been dramatic improvement? in new balance since you've been there. And I'm talking about the product itself since you've been there, you feel. Well, you know, we're always trying to get better. So we've always put manufacturing first. It's why we're still making product here and in the UK. So innovation is not new. I did not bring that.

Starting point is 00:35:32 I think right now we have it kind of dialed in that in a number of sports, whether it's European football, whether it's cricket, whether it's track and field or whether it's baseball, we are resonating. We got very capable competitors, and they have their fair share. So I don't want to paint a picture that we get our way every time. But we're winning our fair share and putting the right athletes in a position to win, and that's really been helping us.

Starting point is 00:35:59 That's very cool. I really, really appreciate this. I want to switch gears a little bit. I've got a couple more questions for you, Rob, and I really appreciate this. So you know, you're obviously in a small fraternity of people, who are CEOs of a billion dollar companies in America. And I'm curious, though, you know, we hear about some of the big names and they're publicized, but who would you say is the most underrated CEO in American business today?

Starting point is 00:36:31 Huh. That's a great question. I don't know if you have like a friend or a colleague that you admire from afar. Maybe you've spoken with them. Maybe you've read about them. And they don't really get a lot of love from the. media or they don't, they're not really noticed. Maybe they don't seek that out, but you're like, this guy's incredible. I have to think about that a little bit, Ryan. I'm not sure what's

Starting point is 00:36:57 coming to my head. But I will tell you this, that my impression of, and I do get to meet a lot of people and see different approaches, you know, it's left me with two clear takeaways. One is there are a lot of different types of excellent leadership out there. It's not formulaic and you got to do it within. As we started the interview, I talked about self-awareness, and I've seen real reclusive leaders that get fantastic results, and I've seen huge personalities and pretty much everything in between. And nobody's going to provide any sympathy for CEOs, but I certainly have walked away with being impressed by many of them and their commitment to their organizations, their commitment to their shareholders and their constituents, and their

Starting point is 00:37:51 commitment to try to do the right thing. Certainly there's plenty of examples that hit headlines that aren't, but quite frankly, those are the ones that are fun to talk about or point at it. There are, for every one of those, there's 10 or 15 that are out there trying to get the best out of their people and the best out of their businesses, and I'm regularly reminded that there are a lot of ways to do it. Are there some of you study? Have you read about, you know, like Steve Jobs, Elon Musk, some of the guys that are wildly out there in the public?

Starting point is 00:38:21 Like, what are your thoughts on those types of leaders? Yeah, I certainly read the same business books that everybody else reads and, you know, more for interest and just seeing different ways. But I really have been blessed in my life to work for three very different but incredibly successful leaders. And, you know, A.G. Lafley at P&G, the CEO that was there while I was at the higher levels of management was very influential and still is on my career. His ability to take complicated messages and boil them down into really crisp words. So big organizations knew what play had been called, if you will, very insightful. You know, I then worked for Jim

Starting point is 00:39:06 kilts of Gillette and just a hard-nosed, tough-minded, crystal-clear leader that you knew exactly what he wanted from you. And it made it easy to work for him because you knew what he was asking you and your organization to do. And then it knew balance to work for Jim Davis and a guy who's just iconic in the industry and so concerned about our company's relationship and reputation. and how we did business. I mean, for three, you know, for me to have the opportunity to work for three different

Starting point is 00:39:42 people like that, I couldn't have asked, that's better than I would have designed it had I been given all that choice. Yeah, that's incredible. I appreciate that. I have just a couple more questions. I meant to ask this earlier because I don't want to, like, bump around here, but I really wanted to know when it comes to the shoes themselves, how do you balance, no pun intended, How do you balance the fine line between athletic performance as well as looking good, being fashionable?

Starting point is 00:40:16 Well, it's a good question. You asked me earlier in the interview what I learned when I came here. And, you know, I came from a fairly scientific consumer product background where you could go out and test which colors were better. What, you know, in consumable, fast-moving consumables, it's pretty formula. No easier, no harder, but formulaic. In our business, in both apparel and footwear, product has to perform, and we always put that first, but the style has to be right as well. Kids today want it to work well and feel good, but they also want it to look good.

Starting point is 00:40:58 And I didn't have a great understanding of how important design was. And one of the things that has changed over the last few years is we have put a much heavier emphasis not only on technical performance, but on fashionable position and color and material. And it's clearly why you're seeing more of our product out there. So in our business, there is equal amounts of science and art. And my background was much more just the science side of it. So it become, it was, you know, it's still something I'm learning. I definitely don't have it mastered, but I certainly respected more because I understand how important it is. I've always wondered, you know, about that because you look at any, any company, all shoes.

Starting point is 00:41:46 And it's, and it's like, it's got to be a tough balance there between both because, like you said, people won both. They want it all. They want them to look great, but they also want them to feel great. They've got to perform. If you're going to run a marathon, not only do you want the shoe to feel, feel great, you want to look good while you're doing it. So I think that seems to be the way it is today, more so than even probably in the past. So I'm thinking about your career, and obviously it's been, you've had a great career amongst a number of leadership positions at more than one company.

Starting point is 00:42:19 When you think back or when you look at younger talented managers or younger leaders as they're progressing in their career, what do you think is the biggest mistake talented younger managers or leaders make in their careers. As far as managing them, how they're trying to grow, like similar to you did? You know, I think one of the things that I know the lesson that I wished I'd learned much earlier was the unbelievable importance of networking and then relying on that network to help you with what you don't know. you know, as a younger manager, I talked about the opportunity I had to run an acquisition

Starting point is 00:43:02 small company when I was, you know, 15 years ago. I honestly, I thought I knew it all. And I thought if I didn't know what I could figure it out on the run. And, you know, I knew enough to survive it. But boy, when I look back and think all of the experience that was around me and I didn't know or I didn't reach out to it. And then even more importantly, all of the network I could. could have had had I just invested a little bit more time in it.

Starting point is 00:43:30 I'm not a natural networker, and so it's something I've tried to encourage my young adult children to do, and I look back to my career and thought, boy, I could have taken a lot of the bumps of the road out had I just asked for help. Great advice. I think I feel like I hear that amongst, when I ask others about success, that's another common answer is those people are are really well networked but the but the best way they're networked is because they're looking to help others and then they're they're receiving help as well so this is you know rob this has been been really really great i've one more question and it's it's in

Starting point is 00:44:09 relation to what my show is all about as as i said earlier i'm a very very curious person that's why my show is called the learning leader show because i feel like great leaders are always learning They're always striving to acquire more information to ask the right questions, to ask a lot of questions. And so when you hear the phrase learning leader, I'm curious as to what comes to your mind. Well, I love the term. And, you know, we try to be a learning organization. And there's, you know, all kinds of examples that, you know, you stop learning, you start losing energy. You start, you know, you're just not getting better every day.

Starting point is 00:44:52 I love the idea of the learning leader, and I had a guy worked for me once that said he was a lifetime learner, and I thought, what a great way to frame yourself. And we all get busy with the pressures of life and work and family, and it's easy to just go back and do it the way you did it because it worked well enough to get through it. But there's not much fun in that. I completely agree. That's great. I love the lifetime learner phrase as well.

Starting point is 00:45:20 I think that's – there's the types of things. people that you want to be around. Yeah, it's energizing, right? You see it and it gets the best out of you and people, you know, the people you're interacting with are making it very clear that they want to get smarter, get better, get whatever the est is thereafter, they're after it. And you walk away thinking, well, I can do that. Exactly right, man.

Starting point is 00:45:44 I love it. Well, Rob, seriously, thank you so much. This has been an enlightening conversation. I really, really appreciate it. I know our listener is going to get a lot out of it. Is there anywhere you would like to send them to go to learn more about what you guys, the great things you're doing at New Balance? Companies, we're putting a lot of investment into our storytelling capability,

Starting point is 00:46:08 and New Balance.com is where that is. We've got a new message or a refresh message that's out there right now, and certainly if anybody wants to know more, whether it's how we got here, what our product is, or how to work. with us. It's all there on new balance.com. Perfect. Love it. All right, Rob. Thank you again so much. And I look forward to continuing this conversation in the future because I've loved getting to learn from you and your journey as well as the explosive growth you've had at New Balance. It's really, really neat. So thank you very much for being here. Ryan, thanks for having me. And good luck

Starting point is 00:46:47 with the learning leader. It's a great idea. Thank you so much. All right, Rob. This episode of The Learning Leader Show is over, but we have plenty more to keep you locked in until next time. Head over to Learningleadershow.com for more information and to request your favorite entrepreneur, CEO, world-class athlete, or anyone else that inspires you. You can also talk to Ryan directly by reaching out to him on Twitter at Ryan Hawk 12. Thanks again, and we'll see you next time on The Learning Leader Show.

The Learning Leader Show With Ryan Hawk - 042: Rob DeMartini – CEO of New Balance: The Leader Behind Their Explosive Growth

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