e.l.f’s $1Bn Rhode deal, 25 quarters of growth & the ‘So Many Dicks’ campaign - Kory Marchisotto

0:07Ladies and gentlemen, welcome to the Uncensored CMO. So now in this special series, we are partnering with our very good friends at NBCUniversal to do a special series focusing on CMOs that have used the game-changing power of sport to transform their brand. Now, first up in this special series, we have none other than the inspirational Corey Marchisoto, the CMO of Elf. She always delivers and never holds back. I know you're going to love this one. Here it is. Corey, welcome back to the show. Thank you for having me. one year later. Exactly one year. So what's happening that year? I hear rumors.

0:44I hear rumors that, you know, there might be some awards in the making. Yeah, Elf time is a very serious, well, time is a construct. At Elf, one year is about a decade. So the amount of things that have happened in the last year is definitely 10 years anywhere else. So just maybe a couple of key highlights. We've completed our 25th consecutive quarter of net sales growth and market share gain. We have entered into a definitive agreement to buy Rode, the brand created by Hayley Bieber. And we are here in Cannes shortlisted for the Titanium and the Glass Lions, which is the first time both in my career and for Elf.

1:28So lots has happened. Well, congratulations. So you have been quite busy since we last met them, haven't you? Now, I hear that the titanium and glass entry has made waves. It's quite a thing. And I'm a virgin at this game of titanium and glass. So I'm learning a lot of things, including we have to present live to a jury, which I will be doing tomorrow morning. 9.15am is glass, 10.45 is titanium. It is a very tight spot with very specific instructions on what can be done within the time that you have. So we have prepared a case presentation for the jury that has to bring some sort of new information to the table versus the presentation that actually won us a spot on the stage.

2:18So what we're focused on is two things in particular with our So Many Dicks campaign. The first one is degree of difficulty to really helped the judges understand that we took something that was impossible and made it possible. And the second one is continuity. A lot of the campaign work that comes in for Lions, they're a moment in time. We dropped a campaign for the Super Bowl. It made waves. We moved on. Our So Many Dicks campaign is a minimum three-year commitment from our company about truly changing the board game. So we're going to focus on both degree of difficulty as well as continuity.

3:01Now, for anyone who hasn't yet seen so many dicks, he says, tell us a little bit about where the idea came from and how you brought it to life in such a, you know, unmissable fashion. Well, if you go on the journey of Elf, we're known to move at Elf speed. We defy gravity, We defy this time-space continuum. Everybody looks at us and wonders, how do you do these things so fast? This is actually the opposite. This is the one campaign that took us the most amount of time that, in fact, even when it was finished, we held it until we felt like lightning could strike. So to take you on the genesis of the campaign, I was, after a couple of board meetings, sitting looking at our board of directors, and I'm like, this can't be normal.

3:51It was majority female, incredibly diverse. And I was like, this can't be normal. Can somebody run the numbers and tell us of the 4 ,100 publicly traded companies, how many have boards of directors that look like this? And the answer came back as one. Wow. We were the only board of directors of 4 ,100 publicly traded companies in the United States of America to have a board that was majority female and over 40 % diverse. So when you have that information, you don't really know what to do with it. So you do what people like you and I do, and you take it on the spin and see what happens. Do people respond?

4:31Do they react? So we would take it on our speaking engagements, to press interviews, to media interviews, and every single time we would say it, it was met with unprompted round of applause. So we knew something in that was generating or eliciting an emotional response from folks. So we said, OK, well, what if we actually put a marketing wrapper around this and try to actually make change? Because in the U.S., 70 percent of the economy is driven by consumption. Well, who are the consumers? They're very diverse, increasingly so. And fun fact, women are over 50 percent of the population, but they influence 85 percent of all purchase decisions.

5:16So if women and diversity are driving the economy through consumerism, then they're also represented in the boardrooms, right? Yeah. No. Boardrooms are 78, 88 % white and 73 % male. So we said, OK, well, we have the receipts to prove that it works because we've got 25 consecutive quarters of growth, top line, bottom line, really healthy. so if anybody could be a beacon of change to put more women and diversity in the highest seats of power it would be elf so we decided to create a campaign that would jolt people into awareness because first and foremost what is a board of directors and why should i care so we had to shine a light on why this matters if corporations are running the economy then who's sitting in the highest decision seats really matters for how the entire U.S.

6:08landscape is going to operate. So we came up with a campaign called So Many Dicks, So Few of Everyone Else. And the genesis of that was we entered 35 ,350 names into a database, first time it had ever been created, of all sitting board members on both the NASDAQ and the New York Stock Exchange. Once we entered those numbers into the database and did all the crunching, we found out that there are more men named Richard, Rich or Dick than entire groups of underrepresented people. That's incredible. And that's how So Many Dicks was born. Amazing. And what's the response to the campaign been like?

6:52It's outrageous. It's very hard to miss, isn't it? He says. Well, first, it's really hard to put to market, which we didn't anticipate. We were like Sisyphus always pushing the boulder uphill, like, first, can I sell this to my C-suite? How many CMOs would take a campaign called So Many Dicks and go sell it up the chain of command? The C-suite, the board of directors. So being able to push that path tells you a lot about Elf and our ability to disrupt norms and shape culture and do the hard things, what I call the path of resistance. But the path was way more resistant than I anticipated. First, a lot of newscasters, broadcasters won't even say the name dick.

7:33Second, we had cities like Las Vegas that wouldn't even run the campaign. AI tools will tell you, no, sorry, that's outside of our parameters. So we realized that we were getting blocked in so many places. So once we were able to push everything through and at least the places that would accept for it to go, we blanketed Wall Street and took on the New York Stock Exchange. We covered the buildings, we covered the Oculus. 200 ,000 people passed by there every single day. And the campaign really caused a stir. The most important part of which is young folks were talking to their parents about it for the first time.

8:15People on our board of directors said, you know, this is the first time my daughter ever asked me what it meant to be on Elf's board of directors and told me she was proud of me. So it started to carry, conversations are happening everywhere, and a problem that was in the United States all of a sudden was being covered by media outlets in 70 different countries. So it took on a life all of its own around the world that we didn't even anticipate. The goalpost for us knowing that you have this provocative campaign called So Many Dicks was just hit a majority positive sentiment. Because we were bracing for impact.

8:54You don't know how this is going to go. We knew we had an ironclad case, but you still, you know, it's a fine line between being coveted and canceled, if you will. So we were aiming for 51 percent. Just like, let's get to just a majority of positive sentiment. Ninety nine percent positive sentiment. Ninety nine percent. Amazing. It just shows how you uncover a real truth like that and how the majority of people are, you know, on your side. And we had so many people that were like, I'm a dick and I approve of this message. Well, I was wondering, any CEOs called dick get in touch with you after the campaign?

9:31Yes, quite a few. And they were all very positive and very engaged. So many people thanked us for what we were doing. The outreach to us, how do I get involved? How do I rally behind the cause with you? How do we make real change? So in fact, the place we're standing today, which is about a year and a half since campaign went to market, we've built a coalition of over 45 companies who want to help us make real change in the boardroom. That's incredible. Now, you mentioned turning up in Wall Street, and of course, you're a publicly listed company. You referred earlier to your 25 consecutive quarters of growth.

10:08Congratulations, by the way, that is an amazing achievement by any stretch of the imagination. What's the secret to continually growing because you're getting to some scale now in terms of billion dollar organization, but still only 700 people. So we forget how few people there are really per dollar of turnover. What's the secret to continually getting that growth? Because it must get harder and harder the more success you have. I used to think that. So I started Elf six and a half years ago and we had some incredible wave makers the first year. And I remember after that first year being petrified.

10:47How am I going to overcome that next year? And we would sit around the table with the teams and be like, we have to, we did record breaking work. If you go back to that year, it was the year we did the TikTok campaign with an original music track. And it was the most successful campaign in TikTok history. And the virality was outrageous. And we had a couple of other record-breaking work that we had done. And you sit there and you're like, how are we going to come up with a plan that's going to be even better? And after year two, I never asked myself that question again. Year two was even better than year one.

11:22And each year it gets better and better and better. And the reason for that is because it's kind of like an algorithm. The more you feed it, the smarter it gets, the more courage you have, the more bravery you have to move at the speed of consumer and to move at the speed of community. And as long as you have the people you serve at the center of everything, if they are the heart that pumps the blood and the oxygen to all the vital organs, there is no elfing limit. And that is the most important part, is to make sure that everyone in the organization never lose sight of who are we serving. What is raison d 'être.

12:01Why are we here? That's who we're here for. The connection that we have made with our community, the way that we have this direct dialogue with what I call zero distance. And when I say zero distance, I mean zero distance between me personally and our community, between our CEO and our community, between our entire C-suite and our community. We go on TikTok Lives. We go on our Twitch live streams. Our CFO, for example, Mandy Fields, went on our Twitch live stream to promote our new game, Fortune Island, that we created in Roblox, which is all about earn, learn, flex, financial advice. 100 ,000 people showed up to listen to financial advice from our CFO.

12:46That's amazing. Has anyone had that kind of audience before? I don't believe so. And so it makes you realize that Elf is not really just someone's beauty brand. They're not just coming to us for a transaction. Sure, they're coming in to get the best of beauty at an accessible price. They also are coming to a place they want to be a part of, a sense of belonging, a place that they could learn and grow with people who are giving them pathways, people who see them and listen to them. So to go back to your question, how do you keep this going? By doing that, by making sure that you create a world that people want to be a part of, that they can belong to.

13:28And most importantly, that respects their most precious asset of all, which is their time. It sounds easy, but I'm sure it's not. In terms of when you say it's an algorithm, we just repeat it. None of this is easy. But I know it doesn't come easy. None of this is easy. So what is it about the culture and the way you work in the organization that allows you to create the conditions for that way of working to succeed? So we create the cultural conditions necessary for innovation to thrive. Innovation in all types. And in order for innovation to thrive, in order for people to thrive, people have to be lifting each other up, not tearing each other down, which is what gets in the way of a lot of other companies.

14:11So we operate at ELF in what we call HPT, which is high performance teamwork. And high performance teamwork has three core pillars. And those three are all equally important. And they have to work in tandem. The first one is passionate relationships. And what that really means is I need to know you more than your title and my title. I want to know about you. I want to know about your kids. I want to know what's important to you. I want to know what gets you out of bed in the morning. I want to know what's on your warning label. So this stuff really matters because if you and I actually know each other on a deeper level, then we can actually get to a better place together through our work.

14:52It's going to come from a deeper, richer, more meaningful place. The second part is healthy conflict. And this is really important because a lot of people engage in other companies in unhealthy conflict. And unhealthy conflict is when people go at each other. I tear you down, you tear me down, we throw sticks and stones, we insult each other. What healthy conflict is, there's me, there's you, and there's a problem. And me and you are going to attack the issue that sits between us. And the only way you can do that is if you have this passionate relationship that you've built. Because now we can be really honest.

15:30And let's say you and I were in a meeting together and it went a little sideways. right after the meeting, not next week, three months, six months, or a year from now after it's been under the rug and I'm carrying and harboring aggression, right after the meeting, I'd be like, hey, John, something didn't go well in that meeting. And it made me feel really uncomfortable. Could we talk about that for a minute? If we care about each other, we're going to get this out of the way right now. And then the third core pillar of high performance teamwork is mutual accountability. And that really, really matters.

16:05Both of us are invested in the success of the project, of the company, and this bigger thing that we're trying to do. And at Elf, the underpinning of all of that is we're all shareholders. So every single employee at Elf is granted meaningful equity every year, everywhere in the world. So what that means is when you're in a room together, we're not just colleagues. we're invested in this thing. And if it pays off, it pays off for every elf. So it actually has this different dynamic among everybody where we're passionate owners of the thing that we're doing. And that really changes how you approach projects.

16:47So that HPT framework allows us to be one team, one dream, all in the same boat, rowing in the same direction, driving toward the same goal. And as soon as something gets in our way, We step up and we get it out of our way. Yeah. The ownership thing is powerful, isn't it? And you referenced in your introduction as well, you've just done a really big deal to acquire Roe. So congratulations on that. Thank you. What was the thinking behind that? Because that's a big decision to make, isn't it? To become a portfolio company rather than a single brand company. Yeah. So in the first 15 years of Elf's life, it was single brand, single category, and predominantly single geography being the U.S.

17:30And that 15 years is about when I came in. And part of the reason that I was brought in is because I had a multi-portfolio background. So our C-suite set on a path to say, we've built this incredible chassis. What else could we build upon it? And have a portfolio of distinct yet complementary brands as we scale further. So the first brand that we brought into the portfolio was through an acquisition. And that brand is called Well People. And the Well People founders are two incredible women that are still with us today. And they are Dr. Renee Snyder, who is our in-house dermatologist. So all of our skincare products are created and blessed by a dermatologist.

18:13And then Shirley Pinkson, who is on our education team, making sure that we are always properly communicating the features and benefits of our products. So two incredible women, and the brand is still growing today. We also created a brand from scratch with Alicia Keys. That was our third brand after the Elf Mothership, which has been an extraordinary journey because she has a very unique perspective on what beauty is, which is much more about the soul. And if you care for the inner, then it's going to reflect on your outer appearance. And that was really important for us to establish different conversations than you can have in beauty.

18:55So Elf is this unbelievable value proposition. Well People was plant-powered pioneer before anybody was even talking about using plants in beauty. And Keys was all about soul care. Then we bought Notorium. Notorium is a biocompatible skincare brand created by Susan Yara, another female founder. You see, we're on a, we might be having a trend here. And Susan is an exceptional human being who is a brand founder, an influencer, and also just an exceptional human being who's not afraid to put life out on display, the good, the bad, and the ugly. So now that we have this portfolio of brands, we start to become a magnet.

19:40Because what founders are seeing is that they actually have another option than the big strategics. because typically the only place they could go is to these big strategics. And while that may sound really sexy and you could get a big payout and all those great things, what happens when they get inside those machines is their brand starts to lose its soul. It goes into the cookie cutter. And three years later, they're wondering, what the heck did I do with my brand? And where did it go? And they lose their passion. And there are so many examples of brands that are still in the strategic, but the founder has long left the building.

20:20So Haley spoke to a lot of beauty founders and heard all the horror stories about what happens when you go into these big strategics. And what she knew is she didn't want to end up with the suits. She didn't want to end up just another number on a page or another brand on a spreadsheet around a bunch of people who weren't going to allow her to express road to its truest sense. So she got introduced to us, and one of our first encounters was a dinner. And we went to dinner together in L.A. And before we even put numbers on paper, the kindred spiritism was the magnetic attraction. We had such a great time together as humans, building those passionate relationships.

21:09We talked about all the things that were important to her. And what she found is people who believed in the same things that she did. There was a value alignment. There was a love and a desire to make road be the thing that road needed to be, not us turn it into something we thought it could be. so once you really get that frequency alignment i believe we're all antennas her antenna was going off and our frequencies were totally aligned and she said these are my people and then we engaged in the negotiations it's the point you make is so critical generally i think in business that who you work with is a lot more important really than what you do because the people you surround yourself in terms of energy and talent and are you pushing in the same direction?

21:59I think when people are often applying for jobs or looking to sell their business, they don't think enough about who am I going to be spending all this time with? And, you know, do we share the same values and vision? And that is so fundamental. For me, before I took the elf job, I had my list of non-negotiables. And the first one is you have to have a firm belief in the thing that you're going to be doing. Do you actually, in your gut, believe that there is potential that can be unlocked, that there is growth that could be had? So do I believe in the thing, which is value alignment and all that stuff?

22:33Then do I believe in the people who are here to do the thing with? And that's, to your point, a critical step that's often overlooked. And the reality is you're going to spend more time with the people at work than you do with anybody else in your life. and it will drain your system and take your energy away if these are not people that you are kindred spirits with. That doesn't mean carbon copy. It means that our frequencies are aligned. And that was absolutely key. So I think it's just really important that people, because people talk to me a lot about burnout. Do people talk to you about burnout?

23:14And burnout for me is a funny thing because burnout is true and it's real, but I actually don't think the cause is where most people find it. Burnout happens with misalignment. When you and your values are misaligned with the company that you're working for or the people that you're working with, that's how burnout happens. at elf i've been in a constant state of peak performance for six and a half years because it is in perfect harmony where i am what we're up to who i work with never for me has it been a day of work i can so relate to that i mean one question i get a lot is is it hard having to do a podcast every single week and i've never ever once in my life thought that's a hardship i look forward to every week you know i'm energized by the people i meet and the fact we're going to go live and waiting for the reaction.

24:06I mean, it's a small example, but it's true. If you're doing the right thing as it values align, energy aligns, then it doesn't feel as hard as it may look. Yeah. Now that doesn't mean neither you nor I do hard work. Yeah, exactly. It's not, yeah, true. But it's work that we truly enjoy doing and that we want to do. It pays back and it helps you work even harder, doesn't it? Because it pays back. You mentioned when you're talking about the other brands you've invested in and partnered with, A lot of creators and celebrities in that mix. How important are they, I guess, creators and celebrities in terms of building beauty brands?

24:39Enormously important. And again, it comes back to when you codify your ethos, which is really step one. You have to tune in. I call it tune the elfin to who your brand is, what you stand for and codify it in a common language that everybody can speak. and then you send out the bat signal. And that's really key because what comes back is again gonna be a kindred spirit, not a carbon copy, a kindred spirit. So at Elf, we're trying to create a different kind of company. That already says a lot. We don't wanna do things the way others have done them before. Well, how does that come to life? Three key ways, by disrupting norms, which inherently is the path of most resistance.

25:26We do the hard shit. right? The second thing is shaping culture. And those words are really important because notice I didn't say lead culture. We are not arrogant enough to believe that we know better than you and we're going to be out here and you're going to follow us. I also didn't say follow. We're not behind you either. We're actually shaping it together with you. We're in it together now in real time. And the third is connecting communities. And when you think about the power of connecting communities. Let's take Liquid Death for a second. I know how much you love Mike Cesario, and I idolize him as well.

26:04When our communities connected over our collaboration, it was incredible. My favorite water brand and my favorite makeup brand are coming together. We connected communities who didn't realize that they actually had a shared passion for these two brands. So when you send out that bat signal, what comes back are people who are bold, who want to do things differently, who are shaking up their industries, who want to push the status quo and really conquest new frontiers. Now, talking of challenging status quo, as your can agenda has been released over the last week, there was one that's really stood out for me, which is Billie Jean King.

26:47I mean, wow. That is quite something, your collaboration with her. What has that been like and what has she taught you? She's an extraordinary human being. So nobody calls her the goat for no reason. She really is the goat. And I'll just start with the fact that one conversation with that woman is life changing. She speaks in golden nuggets of wisdom that you could pick up and use it to make yourself a better person, your job increasingly impactful. And the starting point was actually around skincare. So when Billie Jean King was on the court playing tennis outside in the burning heat and sun, they didn't have SPF.

27:32So we started this work together to just do a quick little campaign. She loved our funny names like Holy Hydration and Sun Touchables, and she just had such a great time with it. And as we were chatting through that moment, we were working on the So Many Dicks campaign and the broader Change the Board Game initiative. And so we get into a conversation about it, and Billie starts giving me all these stats I didn't know. And she said 94 % of all women who make it to the C-suite are former athletes. Oh, wow. 94%. 94%. Wow. Isn't that incredible? That's very interesting. So they had this well of research, and I didn't realize the connection between sports and business.