How to build an empire (Transcript)

Please note the following transcript may not exactly match the final audio, as minor edits or adjustments could be made during production.

Anne Morriss: Hello everyone. Welcome back to Fixable. So Frances, in this conversation we're about to have, we are engaging with a company that is big and getting bigger. They're wrestling with maintaining cohesion and alignment, culture, operations. The premise of this whole thing is that bigger is better. Period. Is that an assumption that we feel good about?

Frances Frei: Yes, because if you are not growing, you're dying. I. So if you are not growing, you cannot help your employees develop. They have nowhere to go. Mm. The only way we can provide development opportunities is if there are further opportunities. So yes, we are 100% behind growth.

Anne Morriss: Yeah, and, and I think there are other stakeholders where I think this shows up in justifying growth.

It's also the impact you're having on your customers if you are building a healthy Ecosystem, then growth allows you to expand that impact to everyone who interacts with it. I think a lot of people are gonna win when this organization grows, so let's help 'em get it right. I'm Anne Morriss. I'm a company builder and leadership coach.

I'm Frances Frei. I'm a professor at the Harvard Business School and I'm Anne's wife. And this is Fixable from the TED Audio Collective. On this show, we believe that meaningful change happens fast. Anything is fixable and good solutions are often just a single brave conversation away.

Frances Frei: I'm totally excited for our caller today.

His name is Orlando Ashford. He's the Chief People Officer at Fanatics, which is a major digital sports platform that does a whole lot of different things, and he is an incredibly charismatic human.

Anne Morriss: Yeah, let's hear what he's calling about.

Orlando Ashford: Hello everyone. I've been in people leadership roles for nearly three decades.

At Fanatics, I'm tasked with creating the ultimate employee experience for our more than 18,000 employees across the globe. While we are all one fanatics, we do operate as three distinct businesses. We have fanatics, commerce, fanatics, collectibles, and fanatics betting, and gaming. We also continue to expand with promises of new things to come.

One of the biggest challenges we face as a growing organization is getting the balance right between when we engage and enact enterprise wide HR initiatives, and when we let our individual operating companies take the lead. How do we give our businesses the autonomy that they need to make decisions and grow while also practicing our one fanatics mindset?

Anne and Frances, I look forward to hearing your thoughts and having a big discussion on some of these topics.

Anne Morriss: Well, Orlando, so do I. Frances, what do you think?

Frances Frei: Well, it's a classic problem. As you grow, what do you customize and what do you keep the same? So I'm gonna have disparate businesses under the same roof.

Why not just invest in disparate businesses? Like why bring them together? Why bother? Why bother? And what's gonna happen is if I'm in charge of the connectivity, I'm gonna want you to do some things the same. And if you're in charge of your. Piece of the pie, you're gonna wanna do everything uniquely. And so this is a beautiful, common conversation and so I look forward to us getting rigorous about it.

Anne Morriss: Yeah, I think it's a, it's a great context between is that there's not a lot of overlap on the surface between bedding and memorabilia and uniforms and this huge range in the portfolio. Just the, the basic underlying. You know, function and mission of these companies seems quite different. So it's a great context to wrestle with these questions.

Frances Frei: And you know, I always go back to, you could have just invested in them as a separate company. Why are you bringing 'em together? And there's always a compelling reason. And so let's get together for one fanatics. I look forward to it.

Anne Morriss: Let's do it. Orlando Ashford, welcome to Fixable.

Orlando Ashford: Thank you. Thanks for having me. Excited to be here.

Anne Morriss: We're thrilled you're here. So here's the plan. We're gonna spend a minute getting to know you and your dilemma a little better. And then the three of us will work together to come up with solution and hopefully we'll send you back into the office with a plan and some optimism around the problem.

Orlando Ashford: Sounds good. I'm I, I, I like that. Looking forward to it.

Anne Morriss: Okay, well, let's get into it. So here's, here's our first question. Why did you decide to take this job at Fanatics? What, what caught your attention?

Orlando Ashford: Yeah, that's a great question. Uh, I get asked that question all the time 'cause I was retired.

Anne Morriss: It got you out of retirement.

Orlando Ashford: It got me outta retirement and I was in that mode for about two years and then I got a call Orlando. We have this very special chief people officer role that we think you should consider. And I literally. I laughed. Why would I do that? I haven't done HR in 10 years. Two, I'm retired and I play golf two, three days a week.

It's a good life. It's a good life. And so they said, Orlando, would you at least come and talk to Michael Rubin, founder and CEO of fanatics and uh, very successful entrepreneur.

Anne Morriss: So you took the call?

Orlando Ashford: I took the call. I met with him to tell him, flattered really interested in meeting you. 'cause he's done some really

Pool philanthropic things that I was interested in, but also would tell him, I don't think I'm interested in this job because I'm retired and I'm living a pretty good life. He said, Orlando, I need you for this job, and let me tell you why, and we get engaged in this conversation, so I'll do this quickly.

There were four things that were really exciting about this. So one, just the business. Fanatics is about sports. It's pre IPO. It's fast growth. Uh, when I joined this company a year and a half ago, we were like 10,000 employees. We're now closer to 20,000 employees. A lot of that's through acquisition, so hiring, so we're moving really fast.

The second thing is Michael Rubin. It's very much into people. people, talent, culture. He believes that those are the levers that differentiate your company and make your company better than others. And for somebody that's gonna lead the people agenda, a, CEO, that is into talent, people culture, that's important.

He spends 25% of his time personally interviewing and assessing people and talent. The third thing that he said, we talked about how fanatics is built on sports, and sports is the most diverse industry in the world. Women, people of color, nationalities, backgrounds, all play sports, and sports is the closest thing to a true meritocracy.

The fastest person wins the team that scores the most points wins. And so Michael's comment to me was, I want to build a company that reflects the diversity of sport. And is as close to a meritocracy as possible.

Frances Frei: Oh, you had no choice. You had no choice. I had choice to take the job.

Orlando Ashford: You see what I'm saying?

You see where I'm going? I totally see. Yeah. He was killing me. He was killing me in this interview. Like, oh my gosh. That's amazing. And then the last thing. Was he talked about how this business was built on athletes. Without professional athletes, we wouldn't have things to watch. We wouldn't have these things to be fanatics about.

And so while everybody loves a professional athlete while they're an athlete, we wanna be the company that loves professional athletes when they're not. And so that's where this athlete Immersion program was born. Where we take a mini, it's a kind of a mini NBA for some of our professional athletes to get them prepared for life after sports, which was born in the interview process.

So you put all that together? I had to do it. I'm back to work. You can't say no. Been here a year and a half.

Anne Morriss: What has surprised you the most about the ride so far?

Orlando Ashford: Honestly, the people here have been great. I was expecting a little bit more sports ego. Chest bumping in the halls and some of that kind of stuff.

It's, it's, it has not, people here are great. The asshole factor is very low here.

Hmm. Nice.

Orlando Ashford: So we work really hard, but generally people here are nice and are, are, and we're focused on the mission, which is trying to build a great company that delivers experience for the fan.

Anne Morriss: What a lovely surprise. So in your voicemail, you described a company that's that's big and getting bigger and has some complexity to its operating structure as we understand it.

Fines is the umbrella brand and it's the shared digital platform for three fairly distinct business lines, commerce, collectibles, gaming, and even more complexities in the pipeline, including live events. Is that a fair summary? That is a fair

Orlando Ashford: summary.

Anne Morriss: And then you, you essentially said that the challenge of doing your job leading HR across all of these business lines is a balancing act.

Between the needs of Fanatics Central and then the autonomy of these distinct business units?

Orlando Ashford: Absolutely, because we say things like, culture is critical, we wanna have a great culture. Well, what does that mean? Depending on the executive, they literally have different personal points of view. But we're all one company, so do we make one decision for the entire company?

Because in contrast, we also say we want to build these three independent, distinct businesses that are different. So how do we then say, one fanatics?

Anne Morriss: Is there any place where this tension is showing up and it it's unresolved for you right now?

Orlando Ashford: I. So when you, when you say, you know, at the, at the highest level, we want to be aligned as a company, and then you start playing that out across a number of things like how we handle compensation.

So the concept of Yep, we should, we should all I. Align around our systems, and then the minute you start trying to make decisions around which systems you want to engage in or employ around, well, I, I agreed as long as you picked the one I liked you. You wanna have pay fair, fair pay practices, but you also want to allow yourself the freedom to be able to attract the type of talent that you need is, you can imagine with our business, there are a lot of unicorns, very unique people.

We try to hire ex-athletes.

Anne Morriss: We’re all unicorns. Orlando.

Orlando Ashford: Yeah, we all think of ourselves that way, but when you're in HR and you're trying to build compensation policies and processes, you have to group and bucket people. That is a tension. You can't have 20,000 individual pay practices, but there are times when it feels like that's what some of my colleagues want to try to do.

Orlando, there's no other person that can do this in the world. They're the only ex NFL player that did this and did this. They're a unicorn, therefore, all those rules that you've tried to apply around pay practices don't apply here. So allow us to pay them. I won't even say any fake numbers, 'cause it, it'll get used against me.

But you get my point.

Anne Morriss: Yeah. Yeah. I really feel that. So we like to be helpful. How can we be most helpful today?

Orlando Ashford: So we need to drive culture around the enterprise fanatics, the 20,000 employees. And I also need to leave room for there to be cultural nuance at the operating company level because those businesses are different.

I'd love to get some of your take on, on how we might think about some of that.

Anne Morriss: Yeah, sure. Frances, you wanna summarize where we are? Yeah.

Frances Frei: So this is a classic situation for very successful companies, which is you've done one thing and now you wanna do other things. And then how much consistency do you have across them?

What we know is that the, the thicker the shared anything. The better from an operating perspective, but we have to allow for some customization. So the default should be everything is shared. And now where are the exceptions that we're gonna make? As opposed to if this were a private equity shop, you were just investing in a lot of different companies.

The default is nothing is shared. Then we have exceptions for commonality. So when we're doing it all in a holding company, we wanna share as much as possible, and culture is really a shared service. So that's the first thing I would say is let's start from the default of sharing, and then we'll have

Well-reasoned exceptions to it, but does that resonate Orlando?

Orlando Ashford: Yeah. I, I personally like that now. Now let me acknowledge my bias upfront. I sit in corporate and, and so my natural instinct will be, yes, we should share as much as possible. I was an operator and so when I was in that operator role, I wanted to.

Frances Frei: No. You wanted your own, you wanted your own systems.

Orlando Ashford: Yes.

Anne Morriss: Just to establish the stakes here, why do we wanna share everything in whose best interest is the sharing part here? Because I'm with Orlando, like I'm already, my freedom fetish is getting provoked here. Like, why are you taking all this power from me?

Frances Frei: And to what end? What a private equity shop would be is like, look, I'm just gonna invest in four different companies. You guys go all do your things and then we'll just pool the profits at the end. The reason to share is if the presence of A can make B better and the presence of B can make a better, that's through sharing.

So I want you to be independent unless if we joined up in some ways, can we both be better off? That's the reason to share, then we are much better off by doing it. I'm really good at data processing over in company A. Well, what if I could lend that experience and expertise to company C and company C is really good at something else.

Do I just let them be it in their cells or do we share it across and you know, if we all buy toilet paper together, it'll be cheaper. There's those things too.

Anne Morriss: That's the economies of scale. Yeah. Okay, so I can get cheaper toilet paper and I can get a piece of Orlando who's like world class at this people thing.

And probably there's other things on this list. If I Give up some of my power and agency. That's the exchange here.

Frances Frei: But to, to be clear. When you give up your power and agency, it's so that you will perform better, right? So the center has no desire for you to be suboptimal. And if we leave you to your devices.

You will have your, which I would prefer you will have your freedom fetish, but you will perform at maybe 60% as well as you would if you gave up some of your freedom. All

Anne Morriss: right. So that's the exchange. Yeah. And so if this system works well and we look at it from a stakeholder perspective, does it performance skyrocket?

Everybody win?

Frances Frei: Everybody wins except for the freedom fetish. Right? Right, right.

Orlando Ashford: I I, I like, I like the freedom fetish concept. And then I think to add to that, is. Your natural instinct as a human is to want to be free to make your own decisions. Yes. Right. So when you start to exercise that freedom fetish, the question is, well, why?

And is your yeah. Desire to run over here and do C when everyone else has agreed on A and B? Is it because you just want to be different because you just like it? Or can you demonstrate that it is still better? And that tension we work through now because you've got Operating companies. I like this system.

This is what we used before. We're better at this. And the answer is, if you are better, great. I'll steal it from you and share it with the rest of the organization. But sometimes it's not that it's better, it's just I liked, I just like this. And that's the tension that we end up muscling our way through as we try to.

Bring these entities together and get the right balance.

Anne Morriss: There's a whole category here that's about communications and being really clear and making it discussable what the holding company, the individual business unit is getting from the, the mothership.

Frances Frei: Let's say that we have four companies, and if you adopt my portfolio of 10 shared services, all four of those companies will be better off.

Alright, so that's my starting point. If all of them adopt these 10, they will all have higher performance. And so we would think, well, let's all adopt 10, but here's what's gonna be true. In those 10 shared services, you will be better off with seven and worse off with three, but net you're better off with 10.

It's gonna be a different seven and three for the second company and a different seven three and a different seven three. So the solution is everybody adopt all 10. So we can't let people argue out. Of the individuals. It only works if the portfolio makes everyone better off.

Anne Morriss: Okay, so Orlando's having this convers, he's on the front lines of having this conversation with essentially the charismatic CEOs running these business lines.

So, Orlando's run a very thoughtful process to Pick the best HR software on the B and is now presenting this as the solution. Yeah. And

Frances Frei: he wants to use that HR system and you wanna use your HR system. We have four companies right now. Let's say we're wildly successful and we're gonna have 40, are you gonna have 40 HR systems if

Orlando Ashford: you, if you see me cringing over here, because that's literally what we're dealing with real time.

That exact thing is happening.

Anne Morriss: So let's role play this. So I am the charismatic CEO of the new live events business. You recruited me from a very sexy job. This is the future of the company. The IPO success is like resting on this. And I've come in and I've said, no, I love, you know, my, like, I've been, I've been operating with this HR software forever.

I'm, I'm gonna do my own thing and you paid a lot of money for me, so. It's already awkward that I have to report up to this holding company. So I'd like to just go ahead and do my own thing. Thanks. We'll talk again in a few months. What is Orlando supposed to say to that? Well, let's see. I, I, Orlando you can go or I can go whatever you want.

Uh, so

Orlando Ashford: I'll start by saying, well, so luckily Michael has hired a very charismatic chief people Officer

So, and you're credible, you're like an operator. I was an operator once I get the pain. Yeah.

Anne Morriss: Okay. That helps.

Orlando Ashford: And I need you to win. This is not me just doing this to be difficult, but I want to take this off your plate. This isn't the thing for you to worry about. Your best value is in building up that live business.

Your best value is taking your special skills into those markets that you're that unicorn for. That's the reason why I paid you so much, and because you're the only one that's uniquely positioned to go and attack that for us, these common things. The talent system, the comp system, the pay system, some of the finance systems.

Let us take that off your plate so that you can do what you do best that's gonna deliver that differentiated value for the company. I've done that speech about 22 times, so, so that's what, that's literally the kind of the conversation we're having.

Frances Frei: And the audience can't see, but this is working with Anne's Freedom finish.

The, your our bringing your live events in here. The reason you would do it is because it's gonna be worth more as part of this company than it's gonna be as separate from this company. We are hoping to make it worth orders of. Magnitude more. In order to do that, we have to receive value from you and you have to receive value from us.

That's what makes the whole system better, and so when we wanna do A plus, B plus C is gonna be greater. We gotta get really good at doing things across. Companies. So if we have a different system, hr, finance, purchasing, we are gonna be burdened by all of that complexity and we won't be able to optimize.

So we're gonna need commonalities. In order to scale it. 'cause you are not the last business that we're bringing in. We're bringing in so many more businesses and we need commonalities in order to do that.

Anne Morriss: Orlando, what's your reaction to that coaching?

Orlando Ashford: Part of the way we frame it is, look, we want you to run a independent, strong, great business.

But the theory of the case here is that one Plus one, plus one is going to equal five, six, or seven. And when we get into that discussion, I tend to get, start getting head nods.

Anne Morriss: Where are you getting stuck in those conversations?

Orlando Ashford: Well, it's differentiating between it's way better and what I used before. If it's better and I, I'm happy to learn something and say, oh, that's better, then let's just take it and then we will, we'll build it across the entire system.

But that's different than, well, I just like it. And this is what I used before.

Frances Frei: Oh, Orlando, I think you're gonna have to let them not do things that are better. Let, let me make the case for that. There are some things that would be better for them, but worse for others. I'm gonna take the financial system.

So we have to have one financial system. Well, I bet one of your businesses could make the case that there's a different financial system that might be better for them and you can't let them go off and do it, even if they would make the case that it would be a little bit more curated for them. So I actually think we wanna make the positive case for when we do these things in common, we can become bigger and bigger and bigger.

So you're gonna occasionally have to sacrifice. And not get each specific thing, but here's what we're not gonna ask you to sacrifice when it's core to what you do.

Orlando Ashford: I agree with that common statement. We wanna get the best talent, but there are clearly, there are some differences in the investment that some of my different operating companies have made relative to going and getting the best talent.

So that, that tension is, is real.

Frances Frei: My thought is it's why you have to sell the portfolio, not the individual line across the 10. You're better off. So every once in a while when it's a little worse for you, I'm gonna have to say that's for portfolio reasons. And then I love what you're doing on the end, and you know what?

You might use a little less automation and a little more human resources on top of it to make it feel better. Yeah. Here are my notes from the role play

Anne Morriss: or Orlando. My advice was for you to be a little bit more of an asshole in this conversation. And that there may be this kind of culture of kindness and people centricity that is getting in the way of this really important.

Campaign for progress. I think bringing some specificity to the why here of like you protesting the HR software., to me signals that you are in an incremental game. The world we're creating, the HR software that you're gonna be using is so immaterial that laughable. Like we are building an empire here.

And oh, by the way, here's your portion of that empire. And oh, by the way, if we're gonna build, I need a hundred percent of you doing these things. So bringing like some theater and drama and specificity to the upside, and also being crystal clear about what parts of the business you are not gonna touch now and never gonna touch.

Like the, the list of you will have total agency. Over these things. I'm never coming for 'em. And oh, by the way, when you do what I ask you, this is what you get. But to me, part of the solution here that is about like your emotional frequency in the conversation, which is I am not here to accommodate you in this conversation.

When I was pitching you this job, this was like the nice Orlando like, but you're now meeting operator Orlando, which is, I'm not here to make everybody happy. I'm here to build a fucking empire. And then here are the terms that I need you to accept for us to be in the Empire building business.

Orlando Ashford: All right? I like this.

You know, I'll make a hat. I'll have a hat so people will know when I'm shifting. 'cause I, I'm a pretty nice guy, so I'll have my hat and when I get into that mode, I'm gonna put on the hat.

Anne Morriss: That's the energy. And I don't know if you're playing with the hat thing, but I almost think that brings some lightness to this of like, like literally like this is Orlando with his empire building hat on.

Yeah.

Anne Morriss: Okay. And it's gonna be, this is gonna hurt a little bit, but, but what I want you to focus on is what happens on the other side compared to the world that you and I are co-creating.

Orlando Ashford: Yeah. I like it.

Frances Frei: There's so many wonderful things about it, and one of them is if you tell people to anticipate this. As opposed to get shocked by it.

I can imagine your conversations. We are gonna occasionally be having this conversation where I will be a fierce advocate for the collective and this is what that's gonna feel like and this is why I am gonna get my way in. Those moments like that can just be part of your beautiful sales pitch. 'cause people are gonna be like, oh my gosh.

Wow. The collective. Yeah. Collective's gonna add a zero. I need the collective, I want somebody to be fiercely protecting the collective.

Orlando Ashford: Yeah. Yeah. I'm kind of ha half joking, but I I do think creating some character around it, so it's not just me being a jerk, there's corporate being difficult, but I do love the language, fiercely protecting the collective.

And then the other words that you use, you know, immaterial discomfort. That's beautiful. I, I really like that too, putting language to it so that people understand it so that when I'm saying no, they, they will understand the rationale as to where the no is coming from. It's not just being difficult. I.

Anne Morriss: First of all, I love the character idea for you too, because it, it'll give you permission to play this role. Yeah,

Orlando Ashford: I like it. And the funny thing is, I literally have a meeting with my HR leadership team right after this. They're not gonna know what hit 'em.

Frances Frei: I love it. I love it. The thing, what I love, when people get into this fierce protector mode, they get to speak with a certain calmness because when we're protecting, we know we are doing the right thing.

And so we're not in advocacy mode. We're just like, this is how it has to be. So you get to say it with this like strength and calmness that comes off. So I, um, I think it's gonna go really well. I think it's gonna go really well. Yeah, there's, there's like a deep moral clarity, a deep moral clarity. That's what it is.

Anne Morriss: Well, Orlando. Did we meet our objective?

Orlando Ashford: You guys are good at what you do. 'cause I'm a tough customer.

Anne Morriss: You're an even tougher customer now.

Frances Frei: I pity the I immaterial discomforts coming your way. I pity them So many. Immaterial discomforts.

Anne Morriss: So Frances, even if I'm not a big complex organization with multiple business lines that are quite distinct, what's the insight from this conversation that I can take away and use? So we

Frances Frei: covered what's a really fundamental part of growth. I. So if you want to get bigger, the first principle is economies of scale, which is I want it to cost less to do the next one than we've done for the previous one.

So I want there to be benefits from being The size a thousand, then being the size a hundred. To take advantage of economies of scale, I have to have some operational consistency to do it. If everyone does it differently every time, there are no economies of scale. So in general, when you want to grow, you wanna do as many things in common as possible, never taking away from the uniqueness of what needs to be distinct.

We overestimate what needs to be distinct. Now we need the inconsistency when it's actually value added, but we don't want inconsistency, say when it's value. Detracting, The center can see clearly where they want consistency, and when we're out in the operating companies, it's hard for us to tell the difference.

We just know we want it our way, and we won't necessarily think about adding the distinctive value. That's where you need someone like Orlando. He's got a beautifully rigorous mind, and he is a beautifully human, charismatic guy, so he is central casting of who's gonna be able to deliver this message. I watched you give him permission that I think he's gonna take of here's where the bright lines are and here's why.

And now here's all the beautiful things you can do within the bright lines. And I think you picked up on that they have a very low asshole index. And so

Anne Morriss: No, that's, that's the language he used. Yeah. But

Frances Frei: I think that that low index, we start thinking, so then we don't ever want to behave sharply. That's not true.

Assholes are like. Inconsistent and angry for no reasons, the sharpness, the clarity, we actually need that.

Anne Morriss: Yeah and I think the part of the way through that is Communication. I think it's the operating transparency of here's the why. This is gonna be uncomfortable. This message may land in a difficult way for you, but here's why.

Here's what's in it for you. Here's what's gonna happen next. All that stuff is really valuable. And then creating a context where this kind of momentum can continue to move the business forward. Yeah, I love it.

Frances Frei: Thanks for listening everyone. If you wanna figure out your workplace problem together, please send us a message.

We would love to have you on the show. Email fixable@ted.com or call 2 3 4 fixable. That's 2 3 4 3 4 9 2 2 5 3. You can also text us.

Anne Morriss: Yes, you can text us a voice memo too. Honestly, any way you wanna communicate. We are delighted to hear from you. We're so grateful to everyone who has written call texted.

We literally could not make this show without you, so we look forward to hearing from you. Fixable is brought to you by the TED Audio Collective. It's hosted by me, Anne Morriss and me Frances Frei. This episode was produced by Isabelle Carter from Pushkin Industries. Our team includes Constanza Gallardo, Banban Chang, Alejandra Salazar and Roxanne Hai Lash.

Frances Frei: This episode was mixed by Louis at Story Yard. If you're enjoying the show, make sure to subscribe wherever you get your podcasts and tell a friend to check us out.

Anne Morriss: And one more thing, if you can please take a second to leave us a review. It really helps us make a great show.