After mentoring more than 1,000 individuals over the course of his career as an entrepreneur and investor, Gary Kusin decided to write a book. In April, the GameStop co-founder published Always Learning: Lessons on Leveling Up from GameStop to Laura Mercier, an autobiographical collection of career and life lessons he’d learned and wanted to share with the world. “I’d been thinking about what could be a way to mentor more broadly because I’ve run out of time, if you will, for the number of people who are calling and asking for my time,” Kusin, 73, told Observer.
Kusin co-founded the video game retailer Babbage’s, today known as GameStop, in 1984 and Laura Mercier Cosmetics a decade later. He also served as CEO and President of Kinko’s, a chain of copy and print shops, from 2001 and 2006 and oversaw the company’s $2.4 billion sale to FedEx in 2004.
Aside from running businesses, Kusin has maintained a rigorous schedule of mentoring for more than two decades, with his mentees ranging from Fortune 100 CEOs to high school students seeking advice on college applications. Kusin describes his mentoring style as “the Socratic approach,” one that focuses more on asking the right questions than giving answers.
In a wide-ranging interview with Observer, the entrepreneur discussed top lessons in his book, the fallacy of “finding your passion,” switching between two seemingly irrelevant industries, and the inexact science of hiring and firing key employees.
The following conversation has been edited for length and clarity.
Observer: This is your first book. What prompted you to write a book about career lessons, and who did you envision it for?
Gary Kusin: There was a confluence of two things. The first is that since I left active management, I’ve been sharing more and more of my career stories. I think a lot of people would be interested and could maybe learn from them. The other thing was that I have mentored more than 1,000 people over the last 20 years, and I’d been thinking about what could be a way to mentor more broadly because I’ve run out of time, if you will, for the number of people who are calling and asking for my time.
I mentor in a different way than most people, so perhaps writing a book would be a way for me to extend my mentoring into other areas and to people I might not know or see.
Of the more than 1,000 people you’ve mentored, who are they? Are they primarily founders and senior executives at large companies?
I have had three who are Fortune 100 CEOs, and many are high school students trying to figure out where they should go to college and college students trying to figure out what to do after school.
How would you describe your mentoring style? How is it different than most people?
I call it the Socratic approach. I ask questions, and I keep asking questions. Each time I ask a question, the person I’m asking questions to unpacks their issue a bit more than they had with my prior question. Through questions, I can flush out what the real problems are and what the real levers might be. That’s when I start thinking: What do I have to offer? What have I seen that might be analogous and informative to this person? And that’s when I flipped from Socratic questioning into something like, “I don’t know if this is going to help you or not, but let me tell you what happened to me once upon a time. It feels right for the situation you’re describing.”
Every hair on my neck stands up when I hear someone tell someone their way is the right way to do things. I think everyone in the world walks around with baggage, and inside those bags are every good and bad thing that has ever happened to them in their lives. The sum of those experiences creates a prism through which they view the world. If someone has had a particularly tough life, their prisms can be pretty dark. And if someone has experienced a lot of terrific things, theirs is probably pretty light. But I don’t believe anyone can look through anyone else’s prism because I think prisms are as individual as fingerprints. So the whole notion that I might tell you what I think you should do feels completely wrong.
In your book, at the end of each part, there is a list of “key lessons.” Two that stood out to me were “Recognize the bearable minimum” and “Know when to walk away from something that’s not working.” I found these particularly interesting because they sound counterintuitive. I could imagine it’s very difficult for founders, who typically tend to be ambitious and perhaps a bit of a perfectionist, to practice those rules. Can you speak a little about how you learned those lessons and how you apply them in life?
First of all, for perfectionists, I have a saying: Let’s not let perfect get in the way of good enough. Perfectionists tend to obsess over whatever the issue is, and so it’s never perfect, and so they keep working at it. Meanwhile, deadlines pass, and opportunities pass.
Recognizing the bearable minimum depends on the situation. I had a friend who had invested north of $30 million in a startup. He asked me if I would take a look and perhaps come in and join their board. And I did. However, I soon came to realize that they had not really worked through an economic model of the business. They had not worked through the details of producing the product.
Then, all of a sudden, out of the blue, my good friend, the board chairman and the largest investor in this company, had a heart attack and had to go through an open-heart surgery. So he called me and asked me to step in as chairman. I said, “Okay, but I just have to share with you that I’ll likely fire the CEO.” And he said, “That’s great. That’s what we need to do. We need to quit raising so much money, and we need to get this thing on track to profitability.”
Six months later, my assessment was that there was no path to glory there. I sat down with my investor friend and said, “I’ve got some really bad news for you. I don’t believe that this company, as it is structured today, can compete. But the good news is, we have enough cash on hand right now to make a righteous effort to go out of business so that we can pay severance to everyone and pay all of our suppliers. We can do everything except for the investors, but we won’t have to file for bankruptcy.” Sure, it took some convincing, but he ultimately agreed with me. And we wound the company down, and at the end of it—I can’t make this up— there was $80 left in the bank.
You have several chapters dedicated to working with partners and employees and what it was like to have to fire people. You mentioned the importance of emotional intelligence. Can you share a few lessons in that regard?
What I’m going to tell you is what Jack Welch told me when we were taking a walk one day. He was an operating partner at Clayton, Dubilier & Rice, the firm that took Kinko’s private. Before I stepped in as CEO of Kinko’s, there were 15 people reporting to the prior CEO. I kept only one person and hired eight new senior officers to help with the turnaround. A year later, I fired four of them.
One day, Jack and I were walking around—he loves walking and talking. I told him how I hired eight people straight out. When you hire someone at a C-suite kind of position, you’re taking them out of another company, perhaps moving them across the country, and you are upsetting their sense of order, whatever that was before. I take that risk and that responsibility to heart. I don’t want to find myself firing someone who’s moved their family across the country in the last 12 months.
I said, “So I had to fire four of them. Is that good? Is that bad? How would you judge my performance?” He said, “I would judge it as exactly average. Not good. Not bad.” But he added, “But everyone thinks you just fire people and that you’re a mean son of a bitch.”
Then, he said, “Let me tell you the single most important thing that you need to remember about firing people: If you fire someone, and they are surprised, you have failed, and you have failed miserably. You can’t run a company where people are surprised when their performance gets to the point where they get walked out.”
The best way to not surprise someone is to start by saying, “I’m about to have a difficult conversation with you.” When you say that to anyone, you get their 100 percent rapt attention, and that’s what you need when you’re going to have a difficult conversation.
You also emphasized the importance of respect. Aside from measurable performance, have you ever had to fire someone because they just don’t care about the job?
It’s very different if you don’t respect the job versus don’t respect the person. I have zero tolerance for people who talk down to their direct reports, who belittle, who berate, who dress down in a room full of people. If I see that in a meeting, I’ll simply stand up and say, “Let’s push that one off, and let’s move on to something else.” And then, after the meeting, I’ll say to the person, “You need to come to my office. We need to have a conversation.”
Respect for others is key. So is honesty and integrity. Those are three of my six leadership principles. They rise to the level of being guiding principles in any company that I’m involved in.
In the book, you touched a little on how you switched from Gamestop to Laura Mercier. Can you talk a bit more about that unlikely transition between two unrelated industries?
When I worked in department stores, among the areas I had primary responsibility for was cosmetics. Over a 3.5-year period, I learned the history of the cosmetics industry, and I realized it had gone through three completely different phases: The first phase was the makeup artist phase. If you go to the dawn of the cosmetics industry and look at who founded it, they were makeup artists like Estee Lauder, Marcella Borghese and the Revson brothers (who started Revlon). They appealed to consumers because they were essentially saying, “I put the makeup on the movie stars and runway models, and I am now going to bring my products to you.” That was how the industry started.
Then it went into a technology phase. All of a sudden, a line called Clinique came out, and it was developed by scientists who really got into the details of how cosmetics work on the face: What are the formulas, and how do they bond? How do you develop powder that stays on all day or lipsticks that don’t come off?
And then, phase three—because we live in such a marketing world that started 20 to 25 years ago—was all about fashion. Chanel would come out and say red is the number one color for this fall, and they would promote cosmetics based on fashion.
When I was at GameStop, I was still friends with the CEO of Neiman Marcus and we would have lunch every few months. I would always ask him what’s new. Most of the time, he said nothing. But one time, which coincided with when we were trying to figure out what to do next with Babbage’s GameStop, he said, “You wouldn’t believe there is this makeup line called MAC cosmetics, which stands for ‘makeup artists cosmetics.’ There’s this person named Trish McEvoy, and there’s another one named Bobbi Brown, and they are starting to bring out makeup artists’ lines of cosmetics, and the revenues they’re generating are unreal.”
All I could think was, wow, everything old is new again! I saw this opportunity to start a cosmetics company. But I wanted to do it very professionally since most makeup artists are focused more on products than on finances and all the back-of-the-house stuff.
What kind of thought process did you go through when switching industries? Was it an intuitive and quick decision or a well-deliberated one?
I did a lot of analysis before I jumped into the cosmetics business. This is something that I talk about with entrepreneurs all the time. I think entrepreneurs have been done a terrible disservice by hearing people tell them to “find your passion.” I always use the example of Waste Management: Do you really think the founder of Waste Management woke up one day and went, “I’ve got a passion for waste?” Of course not. And yet it’s a global business now.
You don’t go and start companies based on where you have passion; you find a problem that you think you can solve. You do all the analysis and all the work. There are easy checklists that you can go down when you’re trying to develop a concept. I think it’s sometimes missed because people get this romantic notion that, “Oh, all we have to do is go into our garage, and we’ll come up with something.” No, that’s not how it works.
You had a couple of pages about your days at Harvard Business School. There have been a lot of talks about the declining value of MBAs because of how expensive these programs have gotten and how saturated the job market is for MBA degree holders. What do you think of this argument?
I haven’t heard that, but it’s not like I don’t believe you. Look at every large global company and the personality types of its founders: Did they get a classical MBA from a place like Harvard Business School? Or did they already have it in them?
I asked the director of admissions at Harvard Business School when I was up there, trying to get myself in right away instead of working for two years. And I said, “What do you guys look for in admissions? I’d like to understand that.” And he said, “It’s very easy. We look for people who are going to be successful, whether or not they come to Harvard Business School. We then bring them in and we try to keep their attention for two years, and then we take all the credit for it.” I agree with you, and it’s quite funny. But it also rings completely true.
