#247: Sharon Price John, CEO of Build-A-Bear – Meaning is your brand’s superpower

0:00Building a brand that lasts is not that much different from building a company that lasts. It's understanding the underlying promise. And it needs to be something bigger than the utility of the brand or the idea. There are lots of teddy bear companies. But for us to kind of hold and evoke this emotion, that's because we stand for something. And it's to add a little more heart to life. In human terms, it's how does the brand make you feel?

0:39Some brands sell products, but your favorite ones and the most successful ones are selling something else entirely. Welcome to How Leaders Lead. I'm David Novak, and every week I have conversations with the very best leaders in the world to help you become the best leader that you can be. Today, I'm talking with Sharon Price-John, the CEO of Build-A-Bear. Now, Build-A-Bear made a name for itself as a mall-based retailer for kids. But as malls struggled, so did Build-A-Bear. Then Sharon took over. In her very first year as CEO, she brought Build-A-Bear back to profitability after a$49 million loss the year before.

1:16And the growth hasn't stopped since. With her at the helm, this brand has done something incredible. They've expanded into new digital channels, new demographics, and new experiences for all ages. At the heart of it all is Sharon's belief that meaning, not merchandise, is what makes a brand powerful. Because people don't fall in love with what you make. They fall in love with what it makes them feel. So if you want to build a brand that connects, and I mean really connects, this is the episode for you. Plus, we're going to talk about what's really happening in the adults-only bear cave. So here's my conversation with my good friend, and soon to be yours, Sharon Price-John.

2:05You obviously love the toy business. You've worked at Mattel, Hasbro, and you're now at Build-A-Bear. Looking back, what's your favorite toy of all time? Oh, see, that's so loaded. because I've worked on so many brands. But I honestly, I loved stuffed animals. I collected stuffed animals as a little girl. So being here at Build-A-Bear makes a ton of sense. And one of my favorite toys was Barbie. And I was that I think that that was what drew me in in the beginning. I wanted to do something fun after I'd gotten my MBA. And I know that's probably not a lot of people's objective is what's the funnest thing you can do.

2:50But that was sort of it. And that was really part of my filter. And when I thought about Mattel as a big, really a branded intellectual property company that was focused on kids because I had been in the confections business as an advertising executive, I thought I could get my head wrapped around kids and kids stuff. But when I got the opportunity to work on the Barbie business, that really pushed me over the edge. Fantastic. And now you're at Build-A-Bear, which is one of the very first experiential retail brands in the country. You know, explain what makes your retail experience so unique. Well, first of all, I have to give so much credit to Maxine Clark, the founder of Build-A-Bear, who envisioned this and launched it back in 1997.

3:43and it was really based in the most sincere construct of just her individual love for her teddy bear as a child and the belief that if a child can make their own teddy bear, that brings it to life in a way that's even more special and meaningful. And so that was her driver to do that. And when you come into a Build-A-Bear, if I wanted to break it down in a more sort of functional way, which isn't half as much fun, but more functional way. It's a very empowering, open-ended, but kind of guided creativity process. But you go through then the stuffing process with a bear builder, which is what we call them.

4:32And then they come to life in the mind of a child or even the mind of a child at heart. When you put that heart ceremony together with them. It's very unique, extremely personal. And they place that inside the teddy bear or whichever animal they're creating. And they put attributes and wishes inside of that teddy bear and sew it up and then give it a hug test. The magic that goes on at that moment, the light that just shines from their eyes on just this process, it's truly magical. And I don't think that even Maxine envisioned that it would be as memorable and special, that it ends up like marking moments in time.

5:16In fact, when we did some ethnographic studies after I got here, I wanted to find out sort of where the value was, how stretchable the brand was, all those kinds of things. The specificity with which now adults and teens could speak about that first experience at Build-A-Bear was indelible. You could see how emotional it was. And you're like, wow, how much equity do we have packed in this brand that we don't even know that's monetizable? That was like the big quest for me then. But great question, because it is that experience that makes this extraordinary. And now you're not just into bears that your customers can buy.

5:55You have all kinds of animals that you can build these days. And, you know, how have you really expanded the line over the years and what drove you to do it? Well, there were always other critters. So even though it's called Build-A-Bear, there always have been, you know, bunnies and puppy dogs and things like that. But we, over the years, leaned into licensing with key characters from other best-in-class intellectual property and entertainment companies. and that, you know, that's a very special experience as well. And those best-in-class partners, whether it's Warner or Disney or Sanrio or Pokemon, they see this unique value that we bring to their brand as well.

6:44And we're really good partners over time. Like we have a Sanrio exclusive store in LA. I mean, we do some really fun stuff with all of these guys because there's such an intersection with our consumers. But then we started getting into things where we stretched the brand as we became multi-generational around our 20th year into different kinds of licensing, not just the big kids animated films, but things that were a little unexpected. And that's what caused us to build out our whole bear cave online age gated area. We're now 40 percent of our sales are now to teens and adults. People don't expect that usually when I share that information, but with the whole rise of conducting, we were right on the precipice of that trend.

7:33And people recall us with such fondness that it's so much fun to get a Deadpool bear or their Darth Vader bear. You know, let's just think about that. And then, you know, we also have something we call trend animals where we do something a little bit edgy like an oxalotl or a frog or a, you know, crazy stuff. Like we have Mothman. I don't even think that's not real. But we have one. I love the term kidulting. Who came up with that one? Oh, gee, I don't know. But they should have trademarked it. You know, I used to be the CEO of Yum Brands. And, you know, I went online and I was happy to see that you have KFC branded outfits that people wear.

8:17You bet. You can put a bucket on your bear. Yeah, I love that. And what would be the most creative, unique Build-A-Bear that you've ever created? Well, I don't do much of that. I make a lot of suggestions, but the team is very involved. But I get a lot of suggestions from my own now 20-something girls. and I will say that both of them were just adamant that we make a strawberry Highland cow and my team did make a strawberry Highland cow. Now listen, it could have come from anywhere and they were just right on the trend as well. And that's been a very good seller for us. We love our strawberry Highland cow and I like to give the credit to my daughters.

9:08That's great. Like any good mom. And, you know, I want to really get into how you lead, but I want to take you back for just a second here. And I'd love for you to tell me a story from your upbringing that really still influences the way how you lead today. Oh, geez. You know, just like with you, any of us that have taken this most of the time circuitous root that has been, you know, laced with some luck and a little bit of talent, you're going to have those stories. And I actually wrote a whole book about it, you know, called Stories in Heart. And there's a lot of, my dad was full of wisdom. My mom taught me a lot of great lessons.

9:55But I use, actually, there's a few that I use on a fairly regular basis. But one of them is a story about climbing a tree. And it's actually the first chapter of the book and it's called Life's a Beach. And by beach, I mean, it's a beach tree in that I stumbled upon this really big tree the year my grandmother died when I was about 11. And it was way too big for me to climb, but I focused on it, tried to find a way to get it done. And finally, after many weeks of the summertime and many tries, I got up to this big limb. And I was so proud of myself. And there was like, you know, people had scratched their names up there.

10:35And I was like, oh, yeah, you know, small town. I'm like, I'm the only girl just going on, just going on the like the initials and probably the youngest kid to do this. I'm super proud. And I'm up there and I realized I don't know how to get down. And so the first lesson in that is, wow, if you plan hard enough and think hard enough and keep trying, you can do that like the impossible. And for a kid, climbing a tree like that was impossible. But you also have to know your exit strategy. So I didn't have an exit strategy and I needed to get home. And I thought, well, you know, if you're smart enough to get up here, you're smart enough to get down.

11:14And so I figured out a way to wiggle out to the very end of the limb where it got really, you know, like, you know, bouncy, swung down and bounced hard and fell into, you know, like some pine needles and stuff and rolled down a hill and, you know, no worse for wear. And then that, that, all of that is all life lessons in there, right? You know, if you just stay focused, ingenuity, but the biggest life lesson out of that, it wasn't the first two things of try hard planning, tenacity gets you to the goal. Oops, better know how to get out of it. But if you just keep focused, you'll still figure out a way to do it.

11:52It was the way I translated this experience. There are a lot of people in life that would translate that experience as, oh, I should try something risky, you know, all but I might fail. I might get in trouble. It might be scary. I translated that as, oh, if I try something risky, it might turn out to be a blast. And the bouncing out of that tree, the swinging on that that limb was the most fun thing. I went back many times that summer and climbed the tree just to bounce up and down on that limb to fall into the pine needles and roll down the hill. So sometimes the things that you think are going to, are the bad part or the unexpected part.

12:31And so just that translation of life and challenges and what I could have like labeled or stamped as a failure of don't try crazy things because you might get hurt. I was like, try crazy things because that's how you have a good time. And just think how that impacts every decision that you make where you're like, well, I've never done that before and it looks totally impossible. Let's go. I love that. You know, you and I have a little bit in common with our backgrounds. You know, I have a copper beech tree, which I happen to love at my house. It's my favorite tree of my life. They're the best.

13:08They're so big. Oh, it's huge. It's huge. And I also grew up in small towns and you grew up in a small town in southern Tennessee. And we both were in advertising and you made your way to New York and you got into the advertising business. I felt like a duck out of water when I was in New York. So I didn't go to New York. I went to another city. I went to Dallas and built my advertising marketing career there. But you went to New York and you succeeded extremely well. How did you go into that new environment and succeed? Well, thank you for that layup. Because it's just another beech tree, right?

13:50I looked at that and said, well, that's ridiculous and impossible. Let's go. So I, no kidding, set a goal that I wanted to go to New York and get a job in a top 10 agency in one week. Cold call. I cold called people out of a Red Book. I went down through the names and said, that person looks nice. That person looks nice. And I would just call until somebody picked up. And I'm like, hey, I'm going to be in New York such and such week. Can I just come by and have a cup of coffee? I really want to break into the industry. How hard can this be? And I got 15 interviews set up in one week. 15. 15. And, you know, three a day.

14:31I'm like, no problem. You know, how big is that? I mean, it's a tiny little island. And how hard can that be? Right? Anyway, long story short, I got a job at DDB Needham in the training program on that Friday. And this is that thing still. It don't ever really, it's so good to never really know your odds. Or at least don't believe them. Somebody's going to get that job. Right? Somebody's going to get that job. Why not you? So I kind of pushed the envelope on that. Even that last day, she's like, well, we'll just we'll get back in touch with you. I'm like, what else do you need to know? Let's just do this now.

15:14And and she did it. She genuinely gave me that offer right then. Wow. You asked for the order. That's that's great. And, you know, you mentioned earlier you worked at Mattel and you had the Barbie business and you spent several years at Hazel. row and you've worked on many iconic brands. What advice can you give leaders on how to really build a brand that lasts? Well, I think that building a brand that lasts is not that much different from building a company that lasts. It's understanding the underlying promise. And it needs to be something bigger than the utility of the brand or the idea. And people believe in and work for and make sacrifices for ideas, not things.

16:09So when we could be a teddy bear, there's lots of teddy bear companies. But for us to kind of hold and evoke this emotion, that's because we stand for something. And it's to add a little more heart to life. It's a mission statement for us. And that's not just to our guests inside the store. It's the way we run this company. So I think that that elevation of the construct of brand equity, which is hard for people to understand when you're talking about it in business terms, like, but in human terms, it's how does the brand make you feel? How does that company make you feel? Like, you know, the shirt you have on right now, there's that shirt, I could probably get something just like it in numerous colors for a wide variety of prices from 15 bucks to 250 bucks, depending on what might be printed on the front of it.

17:08Why? The utility of the shirt is still the same, but it's because of the way it makes you feel. What is it saying about you? I use Coca-Cola, one of the best branders in the world. We have our chief brand officer is actually a Coca-Cola veteran. And, you know, so you like what's the difference between that liquid inside of that aluminum can versus every other liquid inside of another aluminum can to the point that you will choose to hang a miniature version of it on a Christmas tree? Like it's the way it makes you feel. That equity is, when you get back down to business now, is extremely monetizable.

17:52And you have to understand what your brand truly means. Keep elevating, keep elevating, keep elevating. Do we mean a teddy bear? Do we mean a retail store? Or do we mean something else? Why don't you throw our bears away? It's because we mean something else. Even after, why do you take your bear to college? It's because we mean something else. People are placing value on this item in a way that makes it not an item anymore. And that's actually the pivot of the whole company. So when I was at Hasbro, what we needed to do and we did under Brian Goldner's leadership was to understand that the big idea is that not that Hasbro is a toy company that can be the most efficient importer of plastic and stuff.

18:38We needed to understand that we were an intellectual property company that just happened to make toys. And that was when everything started to happen that took Hasbro to an entirely different realm, inclusive of when I was on, I ran the boys' business, the guy with the whole U.S. toy division. But when we launched the first Transformers film, and just that alone was an extraordinary experience. And the irony of it is that it truly transformed the company. You know, we were a car and became a robot, like right before our own eyes. Just a fantastic journey of brand expertise, corporate evolution, leadership through change, how to monetize and spread and kind of like to brands into different categories and consumers.

19:28Just fabulous, fabulous experience. And I saw that same potential here in Build-A-Bear. I mean, we really needed to not be like we were like a mall-based retail company for kids that accidentally built the brand One Heart Ceremony at a time. They needed to become an intellectual property company that just happened to have vertical retail. Hey, everyone. It's Kula from How Leaders Lead. And if you've watched our podcast for any number of episodes, you probably know that a common theme from all of the great leaders we interview is that they are active learners. They have this commitment to continuing to learn and grow so that they don't say stagnant and so that they continue to see success in their leadership and in their life.

20:10This theme of active learning is so important. And it's what David's latest book, How Leaders Learn, is all about. It's all about helping you develop that skill of active learning so that you too can continue to see success in your leadership and in your life. The book is really entertaining. It pulls stories from some of our greatest podcast guests and pairs those stories with insights that you can incorporate into your leadership and into your life right away. Grab How Leaders Learn on Amazon or wherever books are sold. And I think you're really going to love it. You feel David's personality through the pages and through his storytelling.

20:44And it's a really powerful way to level up your leadership. You know, you go to Build-A-Bear and the business is really struggling. Talk about the business situation when you first came in. So I said that we started in 1997 and then we went public. And then there was the recession, I guess, that started in 2008, somewhere around there. So this was, you know, 8, 9, 10, really rough years in there. But then Bill de Baird really not stabilized all the way to 2013 and continued to contract. I mean, some of it is just bad luck. I would say the timing of the recession was when Build-A-Bear was kind of like on its upswing.

21:31And when companies are really expanding rapidly, you're really not that focused on the best deal you can get, the most efficient process. That's usually the second phase of growth, right? You kind of get this revenue momentum. And then your next phase of growth from the investor community is just make yourself more profitable for every dollar that comes through. You focus on the bottom line for a minute there. And then you've got to like reinvent yourself somehow. But they didn't get that luxury before the recession came. And then they didn't really know how to reinvent. Some of it was just the continuing focus on returning to what was in an environment that didn't exist anymore.

22:10The traffic had changed. Mall shopping patterns had changed. It was the rise of e-com. And we just weren't not participating in the digital economy in any way and really didn't see another way than just to grow with malls. And look, that had been a really valuable model for a lot of different companies for a very long time. But we had to think differently. And so, you know, we were just the store base was unprofitable. From my time at StrideRite, I really knew how to clean up a lot of profit. I mean, I'm not bad at making money. I know how to make money. So we brought in my CFO from my previous company.

22:52And we had a playbook that we had already created from the StrideRite days. We returned that to profitability in three years and had a 12 comp. And, you know, so there were a lot of leverage we knew how to pull. But that whole insight that I just shared with you about pivoting the company to an intellectual property company that happens to have vertical retail, that doesn't. And then you're going to build out new rev streams, right? You can't do that until your vertical retail is making money. So that was our first order of business. And we returned to profitability in the first year after losing$49 million the previous year.

23:28Wow. And your company's been on a heck of a run, no question about that. But I also understand you have a pretty interesting formula for a turnaround. It's called SDSS. Tell us about it. Yeah, look, the two things, I promise it's this easy in business and life, is there's two buckets of stuff, right? It's stupid stuff and smart stuff. That's all there is. There's two buckets of stuff. And if you want to do a turnaround quickly, get the stuff in the buckets. the stupid stuff and the smart stuff. The first thing that you do is stop doing stupid stuff. And everybody knows what the stupid stuff is.

24:11I know you've seen this. Absolutely. You've seen, and some of it is a little gray, but most of it's just not. Like, okay, like, let's, you know, run the cost all the way through that. How much is it really costing you to do that? Oh, you're losing money on this endeavor. Why are you doing that? Like, just stop doing that. Let's start there. Everything that is losing money, not on brand, not consumer-centric, not data-driven, not money-making, not hurtling, stop it. Do you know how hard it is to get people to stop doing stupid stuff? Well, pretty hard if they've been doing it a long time. Right.

24:58It's really hard, even though they know it's too. So that, and it's not a comment on the people. Most of the people that are doing this stuff, we're told to do it by somebody like you, somebody like me, right? It's process. Like it's part of the process. Like it, you know, that report comes off. I'm going to do this. 17 reports should get printed out every day. You're going to read them. You don't even know what you're doing with them. Maybe nothing. But here's the reason why you have to start with the stopping part. It's about a discipline of asking why. You're learning a discipline about everything that you do needs to be of value.

25:37And I'm not telling you to work harder and longer and more and do that. I'm starting with a, I want you to do less. Right? Let's do that. If you don't start there, if you start with the start doing smart stuff, then they will do both. And then you're going to end up blowing your SG &A because you have to hire a whole bunch of people to do smart stuff while all these other people are doing the stupid stuff that's keeping you from being profitable. I mean, it's not really that hard. I know you're tracking with me. I got you. I got you. I love it. I want you to think about it in your life too. People don't, people need to do this in life.

26:22Just, you know what you do and let people, I wish I could do this. If I could do this, I could just get this much in my bank account or I want to lose five pounds. You know what the stuff is that's keeping you from losing five pounds. I know you do. Stop doing it. Then you start doing the, then you can start doing the smart stuff and really start making it's a big time money, you know? Free up some time. There you go. I love it. We'll return with the rest of my conversation with Sharon Price-John in just a moment. But first, I want to take you back to my conversation with Brian Nickel. I interviewed him when he was CEO of Chipotle before he made the move to Starbucks last year.

27:00Just like Sharon, this is someone who knows what it takes to power a successful turnaround. When I first got here, you know, I'd say the organization was a little bit on their back foot. You know, they had a couple of missteps, had a lot of ideas floating around in the organization on what could be better for the organization. But we weren't, I'd say, following through on those ideas. And we didn't pick a lane on one or two of the ideas to go really big and go after it. And so that was one of the things I wanted to do is make sure that we picked a critical few items. Once we picked the critical few items, it was like, do we have the structure to go make this happen?

27:36And so, I mean, this is classic things you used to talk to me about all the time. Strategy, structure, now execution, right? When you looked around the structure, I was like, man, we don't have some of the experts that we need in these areas to fulfill our ambition or our strategy. And so we had to make some changes. We need to get a great supply chain leader. We needed to get a great marketing leader. We needed to get some additional digital capability. We had a terrific digital leader, but he needed additional capability with him because we're going to grow this so much. So it was taking the time now to invest in having the right people in the right positions so that we could execute the strategy.

28:11And then, look, we held ourselves accountable. It's like now we're going to go execute against these things. And, you know, I'm happy to say, you know, you pointed out when I started, I think our market cap was right around like six or seven billion. And today we're over 50 billion. For the most part, my team is intact. You know, we've only really had one person transition. I think that's a testament to the strategy. It's a testament to the people believing in the strategy. And then I think hopefully it's a testament to the culture that I've created around this organization and the values that we have.