Always Learning, with Gary Kusin – Episode 457 of The Action Catalyst Podcast

Gary Kusin co-founder of GameStop, Laura Mercier Cosmetics, and former President and CEO of Kinko’s, unveils his new book Always Learning: Lessons on Leveling Up from GameStop to Laura Mercier and Beyond, and shares insights on alignment and accountability, respect, honesty, and integrity, continuous change, tackling toxicity, good reasons vs real reasons, only getting paid for the stuff you DON’T like, launching what would become GameStop, the delicate and sometimes dark nature of mentorship, the 4 most mission-critical things to look for when hiring, and not necessarily being driven to win, but refusing to lose.

About Gary:

Gary Kusin is a mentor, investor, entrepreneur and business advisor. He today advises an array of public and private companies, large and small, on strategy, management and growth issues. In addition, Gary continues his full schedule of mentoring and has mentored well over 500 individuals during the course of his career.  Mr. Kusin co-founded two companies, Babbage’s, operating as GameStop (NYSE: GME), and Laura Mercier Cosmetics, both of which today are well-known global brands. Gary spent 13 years as a senior advisor to the global private equity firm TPG, including a large amount of his time mentoring CEOs of TPG portfolio companies. He served from 2001-2006 as president and chief executive officer of Kinko’s, today operating as FedEx Office. Mr. Kusin was responsible for the turnaround, strategic growth and transformation of Kinko’s and oversaw the ultimate sale to FedEx, directly reporting to Fred Smith, founder of FedEx, for the 2 years required to integrate Kinko’s into FedEx and be renamed FedEx Office. 

An Inc. magazine “Entrepreneur of Year” award winner, he has served on many public and private firms both in America and abroad including names such as Electronic Arts, Petco, Sabre, and Myer Department Stores in Australia.

Mr. Kusin has been very involved in Dallas community activities throughout his career. A representative sample of organizations and positions include the St. Mark’s School of Texas Board of Trustees, Dallas Young Presidents’ Organization (YPO) chairman, Dallas Citizens Council board of directors and the Southwestern Medical School Foundation.

A member of the University of Texas McCombs School of Business Hall of Fame, Mr. Kusin earned a BA from the University of Texas at Austin and a MBA from the Harvard Business School. A native of Texarkana, Texas, Gary lives in Dallas with his wife Karleen. Their four children, spouses and 11 grandchildren live from coast to coast with most pursuing their own entrepreneurial journeys.

Learn more at GaryKusin.com.

The Action Catalyst is presented by the Southwestern Family of Companies. With each episode, the podcast features some of the nation’s top thought leaders and experts, sharing meaningful tips and advice. Learn more at TheActionCatalyst.com, subscribe below or wherever you listen to podcasts, and be sure to leave a rating and review!

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(Transcribed using A.I. / May include errors):

Stephanie Maas
Well, hey, Gary, it’s super nice to meet you.

Gary Kusin
Nice to meet you also, I’m at your mercy.

Stephanie Maas
Well, thank you, you may come to regret that. But in the meantime, thank you. So I’m super curious. I’m gonna just jump right in out of the gates in your book always learning. You know, I think that’s such an interesting perspective. Because folks often would look at your background and go, What does he possibly have left to learn? Tell me a little bit about where the idea behind the book came from. Walk me through some of that.

Gary Kusin
Be glad to. So after I sold Kinkos, to FedEx, and after the two years that I integrated it into FedEx reporting to Fred Smith, the founder of FedEx, I was trying to decide what I wanted to do next. And I started getting a lot of pressure because of the way that Kinkos turnaround happened and a lot of things about that from a lot of interesting quarters saying you have to write a book, this would be a very big book. And I said, you know, I’m not I have never been good about talking about myself. But I’m a big introvert. And I would just assume, not be in the limelight. And so it really kind of pushed back, but they were really pushing pretty hard. I told everyone, no, thank you, I am looking forward to my anonymity. And that’s it, and I let it go. Fast forward to the last year, we had our 11th grandchild. And our view of the world is quite different. Both my wife and me, we decided while we while we still could, we wanted to write a memoir, that’s where I started. And through a lot of friends who are authors and a lot of people, I ended up meeting with some publishers, I mean, I went through the whole drill, and I found a spectacular editor that I really wanted to work with. And I started pounding away on a memoir, gave it to Maria, and she came back to me and she’s a highly experienced person in the book industry real Book Pro, and part of my belief and my talk track about my life is essentially I’m the luckiest sob in the history world. I’ve fallen up everything that’s ever happened to me good, pure luck. Well, Maria pushed back, I read intention on every page. And I have a hard time reconciling the intention that I see that you have written in your own words about your own life, with your thought that you have just been lucky. And following up. She said, I don’t believe that. And I would like you to rethink how you have thought about your life. Luck is what happens when opportunity meets preparedness that stuck with me. And my book took on a very different, intentional look, and frankly, morphed into more about my business. I’m a mentor. That’s the one thing that came out of my whole career that I love the most. And there are reasons and I tracked through all of those in the book. But I’ve had over 1000 mentoring sessions last 20 years. And so this book is a way for me to mentor more broadly, let my my podcast the same thing. All I’m trying to do is level people’s playing fields who might not have had the advantages I’ve had my career, because that is my joy. It’s my love out. I spoke a month ago, and I wrote about this recently on LinkedIn. But I spent I spent an hour with the eighth grade of a charter school in St. Paul, Minnesota, who were all Somali refugees. And one little boy had his hand up. And I said yes, because I was asking for questions. And he said, When did things get better for you? Now think about that question. It stopped me dead in my tracks. And I was able to just talk to this young man about things that I did at his age, what I learned and what I felt was a way forward for anybody who is trying to figure out how to better themselves. It filled me up that interaction with that young man was what I’m that’s what I live for.

Stephanie Maas
There is so much I want to unpack. So let me circle back to these leadership principles. And respect alignment, accountability. What else?

Gary Kusin
Well, I actually do alignment and accountability is one and two. For me. It’s critically important in any company, for everyone to understand, what are we trying to do hear, hear and to understand, here’s the mission, there’s the flag on a distant hill. That’s the flag we need to take. We’re going to take it and then why they’re so linked is you can’t give responsibility without authority. And so many companies do that. They they tell they tell someone, you’ve got to get this done. And then when you start to do it, someone else tells you can’t do that. That’s a misalignment, it’ll destroy everything. So alignment and then have a culture that does too. distributed authority, then you can move into respect for others. And that means that and it TPG were US did a nice stint as a senior adviser, they had a sign in their lobby that said, No, it’s allowed. That’s, you know, I think that’s pretty straightforward. And you can figure out what that is, in the honest honesty and integrity is a requirement. But there are a lot of people out there who like to cut corners. And I’m never a part of that. And the last one is continuous improvement, but my co founder at GameStop, and I’ve been talking about the book, obviously, and he really thinks I should rethink that. And I am to make a continuous change. Because we could have been accused at GameStop. being excellent, with continuous improvement because we work but we should have been thinking change. Because we came in at the dawn of a new industry, we were the first software store in the world, when our first store open, and the things we did to start, were right at the start. But 10 years later, every one of our kind of pillars of our business needed to be reevaluated every single one of them. And all we were trying to do would be better, smarter, faster, and what we were doing and continued to succeed, but we were missing the very large and important aspects of change.

Stephanie Maas
Next thing I want to touch on is this idea of toxicity. How and when do you recognize it? How do you change it? Just talk me through some of that.

Gary Kusin
The key question you’re asking there is, how do you change it, and I will get to that in a minute, it is pretty obvious to see when there is a culture that people talk down to people in an organization or they yell or they scream, or they belittle people, there is no reward and recognition, there is an expectation that people might work all hours be available all hours in those kinds of things, and not then not want to pay people keep all the money for themselves, you know, all that kind of stuff. How do I change that, in one case I left in life, there are good reasons. And there are real reasons, I ended up having a good reason. And I’m not gonna get into it any more than that. And one particular company I was involved with had a good reason for leaving, but it wasn’t the real reason. And the real reason was, I couldn’t stand the tone at the top. And unfortunately, I’m at the top also. So that was getting guilt by association. And I decided I didn’t want to go into hand to hand combat with the other top leadership. So it was easier for me because I wasn’t at all concerned about being able to find something to do, because it’s never been a problem for me. And I decided I can create a new situation for myself. And I had a good reason everybody believed it. And that’s great. But it’s tough. That’s one thing people know about me. And when I was at TPG, again, as a Senior Advisor for 13 years in that meantime, helped assess companies to see whether we should buy him or not those that we bought, if I wanted to join the board, I could I could be lead director, I could be exec Chairman, I could be whatever I want it to be. But no situations, I was very clear very quickly. If I saw toxicity at the top, I had very difficult conversations with CEOs, presidents, and other BNI I have no problem doing that. I just close the door and I sit down and I say I’m about to have a very difficult conversation with you. And when you say I’m about to have a difficult conversation with you to someone, they kind of sit up, go up, something’s come in, I need to in a focus and you get a very different kind of focus when you start a conversation like that. And I would tell him, not on my watch, not on TP G’s investment. We’re not going to do things that way. And you need to understand that. And if you have an issue with that, let’s talk about how to gracefully get you out of here. And I had no problem having those difficult conversations, because I’m having with people who are inherently difficult, who have been part of the toxicity who seem to not understand what their presence is like how they’re being received by other people. So I’ve had those times I had much those conversations.

Stephanie Maas
Again, the wisdom that just comes from that so many people from a leadership perspective, talk about the difficulty of difficult conversations, and you just gave beautiful language. Hey, we’re just going to have a difficult conversation.

Gary Kusin
And I’ll give you another lesson I learned along the way that helped me with that. Actually, that lesson came from Jack Welch. And I asked him, I was having quarterly business reviews with him. And I asked him, I was very curious. I had assembled an entirely new management team and 12 months later, I’d replaced half of them. And I said, I feel very guilty about that, Jack. And so give me give me something to think about, as I think about am I a failure at recognizing talent? What did I do wrong? Or what did I do right? And I learned from him. First of all, he said 50% is completely average. He said, I’m not gonna tell you good job, but I’m not gonna tell you a bad job either. Because when you’re rebuilding a senior team from the ground up in a turnaround situation, you won’t know if you lose half of them. That’s, that’s average. He said, Now, the second time around, since you now understand the business much more closely and the replacement kind of people, they should have different characteristics. I learned about that. But the best one I ever got was first time I ever fired anybody. It was one of those things that has stuck with me forever. So I started a new job in Sacramento for a different department store that I had started in a department store in San Francisco, they and another division in Sacramento, they offered me a big promotion to go there. My boss in the new situation, when I sat down, he said, Look, I’ve been here for three months longer than you and I’ve identified the areas that are weak, we need to make changes. And I think these few people as needed, we probably need to change them out. Figure out what you think. And let me know so one of them. I came to him said, You are right. I need to fire her. She’s clearly not going to be the person to get us the next level. He said, Great. I couldn’t bring myself to fire. She, you know, I was 26. She was much older. She had a family. I just couldn’t I didn’t know how to do it. I mean, I just didn’t know how to do it. And every week at my weekly meeting, he would say, Hey, Gary, have you fired her yet? No, I haven’t. Finally, six weeks later, after asking me half a dozen times. He said, You know what? I’ve done this for a long time. I’m obviously more experienced than you. This is not my first rodeo. I’m the one that identified or would you like me to go ahead and do that for you? And now I know I’ll do it. I promise you, Marvin, I’ll do it. He said, Well, I have no problem doing it. So I said, Well, gee, you know, if you have no problem doing it, maybe yeah, if you do that, that’d be great. He said, super. I’ll do it. He spins around in his desk. He picks up an old desk phone a dials HR. He said, Would you please send me Gary’s next paycheck? Thanks, but and he turned around, I said, What? He said, Gary, we do the stuff we like, for free, we get paid to do this stuff we don’t like. And he said, that’s something you don’t like, I’m not gonna like it, but I won’t get paid for it. If you’re not going to do it. I want your pay for doing that. I said, I’ll do it right away. And and that served me well then. And it served me well in conversations. Since then, when I’ve had those same issues, because nobody liked your first time you terminate someone, it’s a nightmare. Yet, you’re up all night, throwing up it just horrible. And so sometimes you need a little pep talk. And that was the one I got. And it stood me in good stead ever since.

Stephanie Maas
And I think to one of the things I appreciate that I heard from you, it’s just the humanity of it. If there wasn’t that human element, firing people wouldn’t be easy. But to your point, she was older, she had a family older than you, you know how to family. And here you are up at night, and but not forgetting the humanity side of it. It’s super important. Okay, so if I’m hearing correct, so you start out kind of on one path in your career, when did you know you really had this entrepreneurial bug?

Gary Kusin
I didn’t know. I think it’s safe to say I had no idea. I’m not sure I could spell entrepreneur. But what I’m sure of is when I graduated business school, my first desire was to figure out how to make sure my now wife would marry me if asked her to marry me. And I had mentioned to her if you could live anywhere in the she’s in law school down in Texas, if you could live anywhere you wanted to live in the US, where would that be? And she didn’t take long to say San Francisco. So I went back to graduate school and I wandered into the placement officer. I said, Well, what do we have in San Francisco? And it was two big department store chains. And since I’ve grown up my family in the retail furniture business, I said, Yeah, okay, I’ll do that. And that’s what I did. But once I got into the department store business, and I started to understand it in I started to go into our stores and malls. I was realizing that specialty stores were popping up in the malls that were stealing our lunch in department stores, you know, stores like the gap. All of a sudden they went our denim business, you know, Lane Bryant there when our large size business, I could run right jewelry there, Zales there when our jewelry business. And I started developing a point of view about department stores that were so fragmented with different names on in each city go to the major department stores had a different name, even though they were owned by the same large company. So I started lobbying. I started with two things. One, we’re getting our lunch taken. And if you can’t see it, here’s the data. And there was data that just we were growing at 10%. Well, that was great. But the specialty stores were going 40 50% A year and it was crazy. It was just very obvious what was going on. And I developed a point of view that said in any category of consumer goods that reaches measurable size, measurable size being a billion dollars back at that time. I said a specialty channel will emerge that will end up being an important if not dominant channel and distribution inside that segment. And I could prove it with data. So I went on this big tear inside of Federated Department Stores, telling anyone who’d Listen, guys, we’re a dinosaur heading into the swamp. And we don’t have to be, if we had a national name, we could compete with the limited by being called Macy’s coast to coast or picking name. But everywhere we could develop the programs, we could do everything to compete. Well, when my business school buddy, we play poker every week, and we were on the same little section there. He had just been moved to the Silicon Valley to start working with video game publishers. And he was coming through Dallas and some business. And we were dear friends. So he came over for dinner. And we sat at the kitchen table. And he showed me all the data about the coming video game, and computers in the home, all the penetration curves going back to the first record players to the first black and white TVs to the first alarm clocks, the penetration curves were the same. And he said there is no way video game machines, and the software that goes on is not going to become an enormous sector, there was not a single video game store in the world. So he’s pushing on an open door with me because I have been preaching to anyone who had listened. But in any category of consumer products that reaches measurable size, the specialty store channel will be an important if not dominant channel of distribution. And I told him all that I explained, Jim, this is really interesting. Let me tell you why. And by the time we were through, it’s like, Well, Jim, you got to quit your job at banking, I have to quit my job at Federated Department Stores. And we got to do this. And he’s like, really, and I’m like, I go home. My wife said what I said, Hey, wait, if Jim does it because Jim was talking to the class and our business school, if Jim thinks it’s a good idea, that’s our insurance policy. Jim was, of course go in and tell if his buddies have kids. And being a retailer, he thinks it’s a good thing. So we both quit our jobs. And the rest is history. And so we opened when we opened our first stores, the first software store in the history of the world. We had so much fun for the next 12 years until I jumped to start the cosmetics company. And we had gone public and we just bought our biggest competitor and it felt like the right time and somewhere in there. Towards the end of Babbage’s I realized I could do something else. And I just enjoyed the intellectual stimulation of coming up with what is the what’s the hypothesis? Or what’s the investment thesis if you’re in private equity coming at something very rationally, and I had been meeting because I still had a little bit of department store blood in my veins had been meeting quarterly with the CEO of Neiman Marcus back then who was here in Dallas, he lived down the street from me. And I’d ask him anything new. And he would always say nope, nothing new, nothing new. But all of a sudden, one one time at lunch, he said, Let me tell you about this company called MAC Cosmetics. And I had cosmetic responsibility. And when he’s talking to me, my brain started working. Oh my gosh, and I and I had a whole idea about what it might mean. And that’s when I figured out I’m probably more of an entrepreneur than I give myself credit for being and that’s where we went from there.

Stephanie Maas
That is awesome. That is one of the coolest stories. Oh my gosh, we shift gears ever so slightly. You talk about you know, 1000 hours in mentorship conversation. And that’s you mentoring others, correct?

Gary Kusin
Yes, I probably needed it for myself. But I was too dumb to know better.

Stephanie Maas
You’re doing just fine. I think so. Talk me through both sides of that. When do you recommend that somebody starts looking at a mentor? What do you look for in a mentor? How do you know they’re the right person? What are the expectations to get out of that? And then we’ll go to the flip side about where you focus, etc.

Gary Kusin
Well, I think it’s important to know that and I will tell you as I got into mentoring, it was very organic, is people I had worked with, who was family members, it was a it was people who knew me, who called me and said I’ve got this thing going on and I need some I need some advice. And that’s how it’s kind of started as opposed to I never have mentored someone that’s we’re going to meet once a quarter we’re gonna go to Starbucks, we’re going to that’s not me. But the last few years is the pace of this has picked up and I’ve started realizing actually the dangers of some mentoring. I am becoming more of a student of mentoring. And they all just tell you I have some real issues with the use of the word mentoring and corporations who as part of their leadership and development, organizationally, set up mentoring relationships now I’m in favor We’ve all heard because it sounds good. And it should be part of any leadership development. But there is a very large risk. I know from the other side of the table as a CEO of companies that had 25,000 or more employees, I have seen what bad things can happen if you use the word mentor. And let me just, these are not exact numbers. But I’m going to say somewhere between a third and 40% of the times that I have gotten a call from someone in a corporate setting, who really needed to talk with something about me, at least a third to 40% of them had to do with hostile environment had to do with the legal goings on. And so let me tell you why I immediately get very upset about that. Now imagine if you are a mentor, and I am your mentee. And I tell you, I don’t know what to do with this. But my friend and my peer is having an affair with my boss. Now, let’s just say in that situation, you are dear friends with that boss, and you can’t believe what you just heard. Now you are in trouble because you have a duty as a senior officer of a big corporation to report to HR if there’s malfeasance hostile environment, anything like that? Well, if it’s a third to 40% of every mentoring situation, it’s my belief that companies should not use the word mentor mentee, it suggests a confidentiality it suggests, which is not true. It can’t be true in a corporate environment. But it suggests things that can’t be delivered. And especially if my heart goes out to young people in a career trying to build a career for themselves, who maybe they stumbled into relationship with someone higher up in the company, or who knows, I’ve seen every permutation of this you can do. But so I’m an advocate of using the word coach. And and this isn’t just semantics, because if you asked 100 people what it means to be a mentor and 100 people what it means to be a coach, you’re going to get a very narrowed scope for a coach. There’s something very specific, they’ve got a very specific skill set. And they can teach that. So maybe there’s a workgroup in an in an area in the IT area that’s coding, and doesn’t quite, you know, they got to work through things. Well, their coach should have been there before. So they can sit down and tell people, okay, in this situation, here’s what you did. And you can multiply that by every functional area of a company because the coach has a very narrow purview. And as a potential mentee, I don’t have to tell you, if you’re my coach, about something about there, someone just got a kickback in my work group, and they’re gonna, and they’re gonna open a restaurant with it. I mean, I’ve seen that one too. So I worry a lot. A lot of the people that in the corporate environments who have ended up on my doorstep wasn’t their first doorstep. They realized in their mentoring session, oh, you know, red flag goes up, and I can’t, I can’t have this conversation. But I need to have it because I don’t know what to do. And that’s where they end up on my doorstep. And that’s why I have this thing about mentoring is not so wonderful. If it’s not really thought out upfront. And what could go wrong. All those issues, Jelena who’s my co host on INR. Our podcast is about mentoring. And in fact, it’s eavesdropping on mentoring sessions we’re having with people so the listener can hear honest God real mentoring sessions, we are talking about having CEO and we both know a bunch of them CEOs of really interesting companies on to talk with them about leadership and development on their watch. How do they think about it, throw out this hot sports opinion I have about mentoring being risky, and get feedback, because maybe I’m wrong. You know, maybe they’re maybe there ways that they do it. That is safer. But I’d never paid attention. Because I wasn’t out there advertising myself as a mentor. I was just getting inbound. And the more inbounds I got, the more I got and it grew. And then next thing I know the people that I talked to three years ago call and say, Hey, you helped me three years ago, I got a bigger situation now. And next thing you know, I’ve been mentoring some people for 15 years, but only episodic and only if it’s something that they didn’t see coming and they really it’s an issue.

Stephanie Maas
This has been super cool. I so appreciate your time as we kind of start thinking about wrapping up anything else we haven’t touched on that you want to make sure that we do?

Gary Kusin
No, I read your website. And I’ve listened in to some of the things you put up on YouTube. And it’s, I’m so glad you guys do this. I mean, I think this is I think what y’all are doing is awesome. There is something that I feel close to when I hire people, you talk about helping people get better and intensity and all that. And how do you get the energy up to do what needs to be done? We put a big accent on this. When I’ve, in companies I’m involved in on hiring, what do you look for? And because I think so much of this can be if you are interviewing against that as a skill set, you stand a better chance of having people come into the company that are emotionally set up for what you want to do. And for instance, in a in a turnaround situation, like like we had at Kinkos, we interviewed for kind of four things as mission critical and that we have to have a point of view after you spend an hour with a potential new person in the company, you got to have a point of view about these things. One is energy level. Did they feel like they had energy that I feel like they’re gonna bring it every day to work? intellectual curiosity? Okay, did I? Did I ask interesting questions? Do they wonder about things three, and this is really important, I’ll tell you why this is my most high aspiration. If I’m interviewing someone, and I say, what is your, what’s your end of the rainbow job. And they, if they say something like your job, I want your job. It’s like, boom, you’re hired, because I need someone with really high aspirations. And then the fourth, which sounds a little weird, but I found it to really be true. If I talk to someone, and I don’t feel like they’re driven to win, that’s fine. As long as I do feel that they will refuse to lose. And those are two very different thoughts. Because sometimes people who are hyper competitive and they got a win, win, win, win win, well, maybe they’re too much, maybe too much glass is gonna get broken. But if someone refuses to lose, that’s a different thing. That’s when they’re, when they’re in the middle of the night, and they’re thinking about something they are no, I’m not gonna let this happen. And when I mentioned the highest aspiration, the most probably the most proud thing, and I’ll leave it at this that I’ve had in my business career. 13 people on my turnaround team at Kinkos are CEOs. And that, to me is a incredible tribute to them. Because they were all of these they refuse to lose at a minimum. They had high aspirations. They were intellectually curious and they made stuff happen. High energy, it works.

Stephanie Maas
That’s incredible. And thank you so much for sharing that and I really appreciate your time and availability today. This has been for lack of a better word energizing, but also very insightful. So thank you, Gary.

Gary Kusin
You bet. Thanks for having me.