The question that saved my company from bankruptcy | Sharon Price John

0:00Sharon Price John: This episode is supported by Harvard Business School Executive Education. Their programs create powerful connections for leaders around the world, strengthening both organizations and individuals by deepening existing relationships and fostering new ones. Participants leave with lifelong friends, new potential business partners, and a powerful globe-spanning network of fellow changemakers. Learn more at hbs.me slash learn. That's hbs.me slash learn.

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2:24Modupe Akinola: Everyone has that stuffed animal they toted around everywhere with them when they were a kid. The one you'd freak out about if left at school. The one probably missing an ear. The one you'd secretly sneak into your suitcase way past when it was age appropriate. Mine was a panda named Panda. And I loved her. I loved her matching white shirt and tunic that I sewed myself, thank you very much. She kept me company when I was bored, scared, or just in need of a companion. She mattered to me. And in that way, she provided me with a sense of responsibility. I was there to take care of her, and I took that job serious.

3:09Modupe Akinola: I'm Madoopah Akinola. This is TED Business, a podcast from TED. We talk a lot about smart business strategies on this show. But one of the most important keys to success is understanding the heart of your work, the emotions and feelings and relationships that you're building with people. It's like my panda and how she was so much more than just a toy to me. Our speaker today, Sharon Price-John, knows a thing or two about heart and about stuffed animals too. She's the CEO of Build-A-Bear. And when she took charge, the company was in serious trouble. But the thing that saved her company wasn't just business savvy.

3:51Modupe Akinola: It was a guiding question that got to the heart of the company's purpose. Then after the talk, I'll share a tradition we have at our business school that helps get people in touch with what really matters. But first, a quick break. Support for today's episode comes from Square, the easy way for business owners to take payments, book appointments, manage staff, and keep everything running in one place. Whether you're selling lattes, cutting hair, or running a design studio, Square helps you run your business without running yourself into the ground. I always notice when a business uses Square. Checkout is quick, receipts hit my inbox instantly, and their loyalty program is so seamless it actually makes me come back.

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6:38Modupe Akinola: And now, Sharon Price-John takes the TED stage.

6:43Sharon Price John: Do you know your organization's true purpose? Many people say it's shareholder value, the products you make or the services you provide, but it's much, much more than that. It's like, what really makes your company's heartbeat? Well, in today's complex world, shouldn't we all be thinking about that? I know I had to when I became the CEO of Build-A-Bear Workshop. Back in 2013, I was asked to take the helm of this mall-based, make-your-own-stuffed-animal retail company for kids from the beloved founder. 2012 had been the worst year in the company's history, having lost$50 million. And 20 % of the stores were not turning a profit.

7:27Sharon Price John: The team had struggled for eight years in the wake of the recession, mall traffic declines, the rise of the digital economy. Well, bankruptcy was a real threat. So shortly after I got there, I brought the whole organization together to share my textbook turnaround plans that, of course, included cost-cutting, store closures, and maybe some layoffs. but I was met with skeptical stares and silence. Wow, don't they get it? I mean, the world had changed a lot since 1997 when Build-A-Bear was started but it was almost like they were afraid to change. But why? Frustrated, I turned to the crowd and I said, does it matter if Build-A-Bear exists?

8:20Sharon Price John: Now, before you answer that question, you might need to know just a little bit more. Build-A-Bear was a pioneer in experiential retail. So when you go to a store, you go through a process. Now, that process includes first picking out an unstuffed furry friend, but then with the help of a bear builder, you're able to go through a personalized stuffing experience. So that stuffing experience also includes a very special heart ceremony. Now with this heart, you bring your teddy bear to life. And you go through an informal but very fun experience of placing some attributes on your bear, like maybe making him stronger or making him smarter.

9:09Sharon Price John: Maybe always have your back or in your heart. But then there's a very emotional process that's very memorable. And you put a wish on the heart. That ends with a kiss. And it goes inside your heart, often along with a personalized recorded message. Then you get to dress it, name it, and get your birth certificate. Now, these experiences are woven into millions of childhood memories. And they're a part of multi-generational family lore. for everything from birthday celebrations to graduations to wedding proposals and birth announcements. So Build-A-Bear is a lot more than a place. In fact, Build-A-Bear is often used for the Red Cross to provide teddy bears to people who need comfort in natural disasters, for parents who are grieving the loss of a child, and even for children who are suffering from illness.

10:13Sharon Price John: So not only are we so much more than a place, we're a feeling. Build-A-Bear is a feeling based on memorable moments. And it's for people of all ages. So when I asked the team, does it matter if Build-A-Bear exists? Of course they said yes. But it wasn't because of my textbook turnaround plans. It was because they already understood deeply what I just shared with you. And what I was telling them made them fearful that I was going to rip the heart out of the company they had created. So that let me know that before they were going to go on this journey with me, they needed to know where my heart was.

11:00Sharon Price John: And I needed to share plans that were based on our true purpose. And we needed to find something that we could all believe in as much as people believed in the wishes on these hearts. Well, that led to a new and inspirational mission statement of we add a little more heart to life. And yes, missions should be big. and it created a strategy for us that was based in something that we had already organically become. Build-A-Bear was already more than its original vision. We just needed a business plan to profitably unlock that value. So with that, the team was then able to go through the tedious process of turnaround and return to some operational excellence because it was just a step in becoming something more, but with heart.

12:03Sharon Price John: So you're probably wondering, did it work? Well, we returned to profitability that very year. But more importantly, the more strategy, which it became, helped us recognize that we were not trapped in the mall-based retail that had created us. So we opened in more places. We understood where people were now going for fun and entertainment, like tourist locations, hospitality, everything from cruise ships to amusement parks to resorts. And now we're in over 30 countries around the world, with virtually all of our stores profitable. We embraced the digital economy by opening a brand new website that was focused on more categories, like gifting and collectibles.

12:51Sharon Price John: And that took our web business from less than 5 % of total sales to somewhere between 15 % to 20 % of total sales. And that led us to recognize that we could target more people. That multi-generational aspect that I was sharing, that helped us to understand that teens and adults were a real target market for us. And we happened to figure that out right at the beginning of a trend called kidulting. Yeah, that's a real thing. And so we doubled the teen and adult business that is now 40 % of our sales. I have to give the team a lot of credit because they gave this a lot of heart. And it was 10 years of near bankruptcy, the retail apocalypse, activist investors, Brexit, and a global pandemic where we had to shut down all of our stores around the globe in 48 hours and our stock price dropped to an all-time low.

13:53Sharon Price John: Now I'm happy to tell you, 250 million furry friends later, and a whole lot of heart ceremonies, we have had four years of record results. And recently, a stock price appreciation of over 2 ,000%. So yeah, a teddy bear company outpacing tech giants like NVIDIA, Microsoft. You gotta ask, how is that possible? Is there a strategy smart enough to make that happen? Well, actually, I have to believe that it all came down to getting in touch with our real purpose, who we really were. And that had to start with heart. Uh-oh. Am I seeing skeptical stares and maybe some silence? I know what you're thinking.

14:56Sharon Price John: You're thinking, oh, that heart stuff, that works for companies like Build-A-Bear. But there's no way starting with heart can be more important than just being smart when it comes to turnarounds in business. Okay, I'll give you that. But I'm going to submit a quote to you, widely attributed to Theodore Roosevelt, the 26th president of the United States. Nobody cares how much you know until they know how much you care. Really, no matter how brilliant you are, what your big ideas, your financial acumen, If nobody's going to put their heart into your concepts, it doesn't really matter, does it? I'll tell you something else.

15:47Sharon Price John: Your heart is the most consistent and the strongest organ in your body. It's also the first to develop, not your brain. So guess what? It really does all start with heart. I'll end with this. Not only can starting with heart change your organization, it can change your life. These days, even after I gather all the data and ask everybody and we figure it out, about what's the next big smart thing we can do, I always look in my heart before we make the final decision. I found personally that a heart-centric approach to life can unlock remarkable power, immense joy, and in fact provide clarity and resilience to focus on what is possible while others are petrified by what's probable.

16:55Sharon Price John: It provides journeys unfolding in amazing ways with extraordinary outcomes, including me being right here today on a TED stage sharing this story with you. Do you believe your organization can be more? Do you believe you can be more? Well, you're going to have to get to where your power lies. And that's going to require some courage, courage to look inside, maybe past the stuffing, past a few pre-recorded voices to find your true purpose. But that will only come when you're willing to find your own heart. Thank you.

18:16Modupe Akinola: We'll see you next time. HCM needs. Start now at paylocity.com slash one. With no fees or minimums on checking accounts,

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19:16Modupe Akinola: Go to Stamps.com and use code PODCAST to try Stamps.com risk-free for 60 days.

19:45Modupe Akinola: is often storytelling. I see this firsthand as a professor. Now, I've talked about this tradition before on the podcast, but I think it's an example that dovetails so beautifully with what Sharon is trying to express here. At Columbia Business School, we have a presentation series called CBS Matters. It was started by one of our students, and it's been going on for over a decade. It's a space where students volunteer to share a little bit about what matters most to them. These stories are often intimate, emotional, and vulnerable. Not your typical boardroom stuff, but they help both the students and the listener connect to their core values.

20:25Modupe Akinola: In turn, it helps them understand the pivotal moments that define them and shape where they'll head next. Over the years, CBS Matters has expanded to include faculty and administrators, and it's completely changed our community as a business school. It's something everyone highlights as being a memorable part of their experience there. Sharon made a point to ask her co-workers why their company mattered. Sometimes you need to create a platform where people feel free to share what matters to them too. So my question for you, is there a way you could implement a storytelling tradition in your workplace or organization?

21:04Modupe Akinola: A new way where you can show the people you work with where your heart is? You might be surprised how far it will take you. That's it for today. TED Business is part of the TED Audio Collective. This episode was produced by Hannah Kingsley-Mah, edited by Alejandra Salazar, and fact-checked by Julia Dickerson. Special thanks to Maria Ladias, Farrah DeGrange, Daniela Valerizo, Tansika Sangmanibang, and Roxanne Heilash. I'm Madupa Akinola. Thanks for listening.

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