Thirty Minute Mentors Podcast Transcript: Interview with Interview with Tom Ripley

I recently interviewed Tom Ripley on my podcast, Thirty Minute Mentors. Here is a transcript of our interview:

Adam: Our guest today is the leader of the largest licensed sports retailer in the country. Tom Ripley is the CEO of Lids, and the co-founder of the private equity firm that owns it. Tom, thank you for joining us.

Tom: Thrilled to be here, Adam. Thanks for having me.

Adam: You're the CEO of a company that did over a billion dollars in sales last year, but you started your career as an infantry and Special Operations Officer in the Marine Corps. Can you take listeners back to the early innings of your career, and what were the best lessons you learn, from your time in the military that have helped you succeed in the world of business?

Tom: It's a great chat, probably more than about any school or experience, you know, I tap into my time as a young marine officer, frankly, on a daily basis. And it starts with some of those foundational principles that you learn as a Marine, specifically, disciplined; disciplined, focus on the tasks ahead, discipline to wake up early in the morning, get your workout in, get your mind and body in a place where you can act on all the things that have to happen in a day. Those are kind of foundational principles of being the United States Marine. And frankly, you know, that discipline and that daily rigor, gives my day structure. This past year has been nothing short of remarkable from a change perspective for everyone, frankly. And so, every day, we get thrown curveballs. Lids is no different than, frankly, people's households, or, you know, homeschooling or all those things. And that discipline just gives me kind of a baseline. And so, you know, the Marine Corps- I kind of expanded a little bit on the question, but the Marine Corps is very much like business crisis management, you go from one small crisis to another, there are no perfect answers, you'll never have all the information, you'll never have all of the resources. And so they teach you in that environment, to make decisions, use all the information, all the resources. And so that's what we do in business every day. There's no risk-free experiences in business, and the Marine Corps trained me perfectly for that.

Adam: To go a little bit deeper on that topic. You and your team took over the ledge, not at a high point, but at a point when the company was in need of a turnaround. And I wanted to know what advice you have for listeners on how to lead a successful turnaround.

Tom: Yeah, so Ames really specializes in turnaround stories and turnaround businesses and leads as you suggested. It was very much that when we acquired it. And the first and most important step when conducting a turnaround is to focus on absolutely essential items. And so use the analogy of triage on a patient- what are the things that we'd have to do to go from today to tomorrow. And so in the case of Lids, you know, it was focusing on the in-store experience, making sure that our associates in those stores had all the resources they needed to to provide the best in store experience we could. And so it's prioritizing and really focusing on the things that are absolutely essential to make it to tomorrow. And so in every turnaround, that's really two items, it's one of the things we have to do be an inventory or resources or people and then to who are the people that are going to do it? Now, in the case of Lids, and frankly, everyone turns- I've been a part of the people who drove it into the ditch- they are not going to be the people who are going to drive it out of the ditch, you typically need change in management and change is not necessarily better management. It's just different management, different thinking. And so my partner, Lawrence, and I take great pride in reaching down into the organization and grabbing, particularly some maybe some younger managers or some a couple of layers below the senior managers because those people are the ones doing the work anyway. And so we take great pride in grabbing those people and empowering them and freeing them to drive the business. Invariably, they know they know where it needs to go. They don't need a lot of directions. They are living day to day, they're probably just like many of us sitting in their jobs frustrated that the upper echelons can't make the decisions that need to be made. And so they're excited and thrilled with that empowerment and just run with it.

Adam: What do you look for when you are seeking the individuals within your organization, or from outside of your organization, to bring on into management roles? And what are your best tips for listeners on the topic of hiring?

Tom: Okay, so what do I look for? Well, the first thing is, you have to have the great analogy when opportunity knocks. You have to be willing to work hard, there is no easy path, no shortcut for turning a business around or for advancing. And so one of the most important ingredients I look for is a person who is willing to jump in with both feet with a level of eagerness, but also with a healthy dose of reality, this is going to be hard work, I'm prepared to work hard to take the next step. And so, to me, my team and my teammates can help give a person daily direction to what they need to do. It's that honest reflection of, are you willing to do it? And so when I look across the organization, I always look for, who are the people who want to jump on that positive attitude, excited and willing to work hard. That's number one, and then what do I look for- for people that are for new hires, people that we want to kind of promote in advance. One of the challenges in taking over established businesses is the model of well, we've always done it this way. And so the counter, the antidote for that type of thinking, is professional curiosity. Why this way? Well, I don't know why we've always done it that way. Or maybe we could do it a different way. Or I'm willing to listen to the way we want to do it. When I show up and my team shows up, what we show up with is change. There will absolutely be change that comes with us. Because we're buying a business that's distressed. If we don't change, it's going to go out of business. And so we come with change, a person who is receptive and excited about that opportunity and that change of pace or direction. That's a person that's going to be really successful with us.

Adam: And I think that those tips are applicable, even if you're leading a business that doesn't need a turnaround. I think that it's incredibly important for leaders of all organizations to try to find people who are intellectually curious, who are willing, and eager to challenge the status quo, because if you're not, you're hiring someone who is an order taker. And if there's one theme that I think any listener of this podcast has heard, over and over and over again, a great leader wants to surround him or herself with people who will question and will challenge and will be honest and open and aren't going to be yes men and yes women. And Tom, that very much falls in line with what you and your team are looking for by trying to find people who are going to help take these companies to the next level.

Tom: There's two trends I just like to pull on there. One is the great Steve Jobs, quote, “You don't hire smart people and tell them what to do. You hire smart people that’ll help tell you what to do.” That that is that is absolutely essential, and people that I call my teammates, but I'll take it once one step further, which is, I mean, people who are professionally courageous, who have the courage to tell me, the owner, or one of my teammates, that they're wrong, that I don't believe in this direction. Oh, you know, I think we're making a mistake. The worst thing I can do is surround myself with people who are just going to say, yes. I need teammates who are going to challenge and push because through that conflict, through that challenge, comes the very best of ideas. And so if we have people on our team who are courageous enough to raise their hand and say, no. I can convince myself all of my ideas are great, right? That's a really big risk for us. We've got to make sure that we've constantly pushed each other.

Adam: I love that. And it actually brings me to an interview I did recently on my leadership blog, where I interviewed a thought leader who wrote a new book, which was really interesting. And one of the things that he told me in our interview was when I asked him, what is the best piece of advice you've ever received over the course of your career? He went back to a marketing director at a major company that he did consulting work for, and this guy was the head of marketing for this Fortune 500 company. And he said that my job is to hire people who are smarter than me to fill every single position around me. And the guy thought to himself, well, won't that make you obsolete? Won't that make you threatened if all you're doing is filling these different seats with people who are better than you? And as he became more senior in his career, he came to realize the exact opposite; that that is precisely why this senior marketing leader was so successful was because he had the wisdom to understand that to be successful, you need to have the humility to recognize that if you're the smartest person in the room, you're in the wrong room, and your job is to fill the room with people smarter than you.

Tom: That's so true. The Marine Corps- I’m biased of course, but I think the Marine Corps is the greatest Leadership Development Lab on the planet, and one of the things the Marine Corps has the ability to do is boil down leadership to the brutal truth of it all. And in the Marine Corps the definition of leadership is your platoon operates when you're no longer there, for whatever reason, you become split up in an operation, you know, God forbid, something happens to you. But if your platoon has the ability to operate in your absence, that's leadership, that means you have trained your team and provided them the guidance and commander's intent for them to be able to execute on plan, when you're no longer there, next man up type of mindset and mentality. So, but we don't, we don't have that same austere, brutal stakes at Lids. But what we do have is a wonderful and extremely talented group of leaders who are eager to accept responsibility for good and bad, who are looking to help shape the organization. It has created an incredibly positive environment, and frankly, an environment that I'm very, very proud to be a part of, because I'm surrounded by people that are challenging me, pushing me, pushing each other, to really create what we believe is the best retail experience in the country.

Adam: Tom, you're not gonna find any argument for me. And I've never served in the military, but I've had the privilege of interviewing many of America's top military leaders, including a couple of incredible retired Marine Corps generals on this podcast, as well as a number of other marine corps generals through my other media work. And what I can tell you is, the core principles of leadership are universal. The lessons that I've heard from America's top generals have been pretty similar to the lessons that I've learned from Fortune 500 CEOs, from leaders like you. And when you think about the lessons you learn from sports, when your top player goes down, you have to replace him. When your starting center gets injured, you bring in your backup center- and your business revolves around sports. A big part of your strategy and success has centered around developing strategic partnerships with athletes, as well as other celebrities and influencers. Meek Mill, Jerry Lorenzo, to name a couple, Trevor Bauer, well known athlete who you have a partnership with. You also work directly with the major sports leagues, Major League Baseball, the NBA, NFL, NHL. What are your best tips on cultivating and managing strategic partnerships and relationships?

Tom: So, as my wife reminds me, the toughest thing two people can do is communicate. It's a purposeful and active contact sport, something that you have to work very hard at. And so the best strategic relationships that we have led, and frankly, the best I've had, with my partner, Lawrence and Ames are ones that are rooted in heavy, heavy, frequent, honest communication. So, partnerships are great when there's an alignment of goals. We're the largest retailer on the planet for the NFL, the MLB, the NHL, NBA, and we have a very clear alignment with us and each of those major sports leagues. We also run the team stores for the Dodgers, we have a perfect alignment with the Dodgers, the current world championship MLB. And so that alignment is kind of that's the first ingredient but I would argue that that's not the most important ingredient. The most important ingredient is communication. It's constantly checking in with your partner and asking them honest questions. How am I doing? What can I do better? We use a term in the Marine Corps, talking about giving effort and taking strain. If I want to be someone's partner, and I want to be in a partnership that I'm proud of, I don't want to give effort being something is easy. I want to take strain, take strain, you can you can feel strain, you can envision what that looks like. And so when I think about my partnership with the Dodgers, I want to work so hard for them, that they view me as their best partner. And so that's through communicating with the Dodgers or the NFL or whomever might be working in that relationship, making sure that the channels are open, but also finding ways to advance their mass message and their cost. And then what we find and the reciprocal that is true. They do the same for Lids- when they need to deploy something, or they have a message that they want to give to their customer or product, they come to lunch, because they know that we're in, you know, 1,100 locations across North America. So they know that we have a very, very high touch with the customer base. And that's something we get excited about so that communication, that partnership is really, I think, the most important ingredient.

Adam: E-commerce has been on fire and the conventional wisdom has been that brick and mortar is a thing of the past. But Lids has been heavily invested in brick and mortar and e-commerce. First question is why? And the second question is, what are your best sales and marketing tips for retailers?

Tom: Yeah, so we are, I think, very unique in our approach, with e-commerce and brick and mortar retail. Lids is singularly focused on the in-store experience. And I use those words purposely because I think what we're going to find coming out of out of COVID in the past year, one of the lessons that I think people have learned at home is that we all are starving for interaction with our fellow man, right? Or just this, this opportunity to be a part of a community. And unbeknownst, I think, to all of us, the retail environment is an opportunity to do that. It is an experience, it is going out and interacting with people. It is something that we've heard customers are thrilled with. We've seen an increase in in-store traffic for the first time in many years. And I'm not talking about this year compared to last year I'm talking about this year compared to several years ago, people are excited to be out, they are excited to be interacting with our associates or with each other. And so I think the hallmark of a successful brick and mortar store in the future is going to be a great in-store experience; wonderful product selection, exciting, releases, limited draw- hat drops, we call them at Lids. Those are the things that are going to continue to add excitement for customers and have them come back. The e-commerce landscape, frankly, is a transactional landscape. It's, I needed a gallon of milk, I need a box of bubbly soda water, I just go on to, you know, any number of a dozen places to get it, it's at my door the next day, there's nothing experiencial about that. It's fulfilling an immediate need as seamlessly and easily as possible. People don't think about hats like that, or jerseys like that. And let me give you one last important data point on the hat that I wear- it is not the hat that my son wears, or that my wife wears or probably that you wear. Everyone's head is shaped a little bit differently. There's a style component to it. And so a hat is a fundamentally in-person transaction. It's not something that you can buy online. You can replace it online, but it's not really something you're going to buy out for the first time. And frankly, it's not a relatively high dollar experience to purchase. And so you probably were going to do it in the store or at the venue on game day anyway. And so it is just an experience that we found plays very well in stores and it's coupled with the fact that people want to get out, we think that is perfectly positioned for the brick and mortar experience. And that's really what we focus on.

Adam: So for listeners of this podcast who are either running or working for retailers, what would you tell them? What advice do you have, based on your experience that they could bring back to their companies, whether they're on the retail side or on the e-retail side?

Tom: Okay, so on the retail side, my advice would be, continue to spend as much time as you can, making sure the customer has as good or better experience in the store than they would anywhere else. That means knowledgeable associates, wonderful visual sightlines and cues, lighting, product selection, clear communication and message, a seamless transaction experience. All of those things are absolutely not suggestions, they are essential there, because the e-commerce landscape has trained customers to think that way and expect that level of experience. And so it's something that we obviously are focused on. And I think that if they're going to be successful in the future, all retailers need to have that kind of mindset, there has to be a wonderful front to back experience for the customer.

Adam: Do you have any advice for e-retailers? I know that you guys have a solid ecommerce presence. And you mentioned that you have a partnership with a Dodgers and I'm an Angels fan. So while I'm not a Dodger fan, by any means, I was looking on your website, and I saw you had some Trout gear and some Otani gear. So I would imagine that you at least have some brain power in your company thinking through optimizing e-commerce. Do you have any advice for listeners on that?

Tom: Yeah, so two things on the e-commerce front. One is, we're not trying to be everything to everybody. And so it is, the e-commerce space, for us, is an opportunity to make sure that customers have the highest demand product with great frequency. The unique part about our experience on e-commerce is we have fanatics as our partner. Our e-commerce experience, size matters when you're playing the e-commerce space. Customers expect the correct size and the correct color tomorrow at their doors. And for most retailers, brick and mortar retailers, that's an impossible hurdle. Right. And because it would mean that you would have to have every conceivable size and color and stock to match that customer. And, by the way, you'd have to have a chip from a regional facility. And so not a lot of people can afford- not a lot of brick and mortar retailers can afford to do that. Lids can because Lids is a global retailer, but also because Lids feels like we need the horsepower in partnership with a company like Fanatics to help make sure that we can deliver those goods to our customers. And so it's a partnership that, frankly, is the best in breed in both verticals, Lids on the brick and mortar side, and Fanatics on the e-commerce side. That's a piece to it. But another piece to it is a highly communicative relationship. We're constantly engaging with each other to make sure that we have a great offering and a great product selection. And they had been a wonderful partner on that front.

Adam: Tom, one deal that you guys have done through your private equity firm. You mentioned to me off the air that it's a very significant part of what you do: your time, your energy, your focus. But your background is doing deals and I would love to get your advice for listeners on the topic of deal making. What can you share on the topic of negotiations, risk management, evaluating potential acquisition opportunities? What advice do you have?

Tom: So I'll give you a couple of thoughts. So my first thought is, every deal comes with risk. This is a topic that's at the top of mine because of no other experience. But every deal- there's no such thing as a risk free deal. And so when people look back at, wow, that was really successful. What they weren't party to were the early days. So you know writing the check in buying Lids, those are risky days, those are days that you sleep a couple hours a night and you toil back and forth and so they just see the results at the end and the truth is that you know Lids had challenges early on and all deals have that. The second kind of deal advice I would give you is have a great partner. Even at my level, we have to have people in the room that are questioning your assumptions, your decisions, your thought process. My partner Lawrence is the very best of teammates. He and I make our decisions together, we do that not because we're not competent to make a decision, but we do it because we love the experience of challenging each other's thinking. And so if you're looking at a deal, make sure you have somebody in your room that is questioning you and pushing you to make sure that your thoughts are fully developed and that you're not blind to a certain risk or a certain issue. And then my last kind of deal point that I would suggest is, you have to do two things to walk into a new opportunity. The first is you have to question everything. And the only reason why I say that is not because I believe that the person on the opposite side of the table is untruthful. It's because through that questioning experience, that's the only way you get to really understand how a business works. Oftentimes, and my experience has been over almost 30 different transactions. Oftentimes, they don't know the right questions to ask, oftentimes, they don't know the root of the issue. And so you have to question everything as you go through this process. And then the last piece is, test everything. Some of the most successful things that we've done in our lives this past year, are we have tested any number of things. So I'll give you two really good examples. Lids had been in business for 20 plus years, the day I showed up. And within a week of buying the company, we changed our incentive compensation plans for all of our store associates, which is 8,000 people. And the result was an unparalleled success. The associates were paid more, they were paid for the things that really mattered to them. And it was a meaningful change on a number of levels for the business. And frankly, I think it's one of the very major early wins in our turnaround of Lids. And so you only uncover that if you do the first two principles, question everything. And test, try it out, see how it works. In that case, we tested it in the Pacific Northwest market where we have a pretty good concentration of about 40 stores. We tested it in that market. And we found it immediately turned both traffic, conversion and customer satisfaction. And so we knew we had the tenets of a great decision. And once we proved it, we rolled it out nationwide. And it's been a wonderful addition to the Lids business. But that only happens if you question and test.

Adam: Tom, before we go, we spoke a little bit early on in the conversation about leadership, clearly a top topical. What do you believe are the key components of a great leader and how can anyone listening to our conversation become a better leader?

Tom: Well, I was blessed to have a wonderful father, who was a remarkably successful marine and marine officer, my mentor. And I'll give you a couple of thoughts that he shared with me. The first is there's no monopoly on great ideas. No one has all the answers. And so the way to make sure that you hear as many ideas as you can, is to read and be curious. Constantly look at who the other great leaders are. What are some of the great business books, what are some of the great mentors in your life and ask them. Listen, the podcast, it's an opportunity, we are all developing and growing. And so you have to be curious, you have to constantly be trying to evolve and develop. And so, for me, you know, I was blessed to be in one of the premier units in the Marine Corps. And when I showed up on that unit, I was proud of the fact that I had made it into the unit. What I didn't realize the day I showed up was I was also the least qualified guy there. And so you come from this background of being selected and assessed to be qualified to be a leader in that unit. You go over there, you immediately need to check your ego and become a voracious learner, and try to learn from the people around because even though you passed all the tests to get over there, you're now the least qualified person. And so you need a hunger to get better and to learn. You spend that time trying to develop and so for me it has been reading, listening, trying to be a student, trying to constantly be curious and listen to other people around you. That's probably your most important tool.

Adam: Tom, thank you for all the great advice and thank you for joining us.

Tom: Thank you very much. It's a pleasure to be on.


Adam Mendler is the CEO of The Veloz Group, where he co-founded and oversees ventures across a wide variety of industries. Adam is also the creator and host of the business and leadership podcast Thirty Minute Mentors, where he goes one on one with America's most successful people - Fortune 500 CEOs, founders of household name companies, Hall of Fame and Olympic gold medal winning athletes, political and military leaders - for intimate half-hour conversations each week. Adam has written extensively on leadership, management, entrepreneurship, marketing and sales, having authored over 70 articles published in major media outlets including Forbes, Inc. and HuffPost, and has conducted more than 500 one on one interviews with America’s top leaders through his collective media projects. A top leadership speaker, Adam draws upon his insights building and leading businesses and interviewing hundreds of America's top leaders as a top keynote speaker to businesses, universities and non-profit organizations.

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