Louis Carter and Amy Errett, CEO Madison Reed on Creating a Culture of Love

Great to be here today with Amy Arrett from Madison Reed. She's the CEO and founder, phenomenal entrepreneur, and just wonderful to have her here today. Amy, welcome to the Most Loved Leaders Show on Newsweek.

Thank you so much, Louis. I'm very excited to be here.

Well, congratulations on becoming a Most Loved Workplace. You know, it's, it shows just your commitment to your employees. To your community, to the way that you connect to people and to your consumers. Really, this way that you've become part of just this overarching movement to love your customers and your employees, it's really very inspiring. And I can't wait to hear more of a bit of it today and for all of us here, uh, to learn more about it.

Thank you.

So Amy, let's start out. Tell me more. You've talked a lot about community before and how you develop and create community. What kinds of things do you do at Madison Reed to develop and create community?

Yeah. So first of all, you know, for some companies, community is this word that you bounce around and I don't know, you know, beer pong or something like that, I guess. But for us, it really means letting people bring their whole self to work and then celebrating that. And, you know, we have so many rituals in the company that we had prior to COVID. And now have accelerated those during COVID And I think it's around what I would call the traditions. And so a couple of examples of them. I have lunch with the entire company every Wednesday, every Wednesday, no matter where I am, you know, unless there's a crisis, I'm there. And, you know, Zoom has helped us, right? So there's a lunch. It's at either 12 or 12:15, depending on the week. There are rituals. Every new person gets announced. Their background has balloons and it's people go crazy. We do two truths and a lie. So you kind of get to know people. I announce what's going on in the company, you know, in full transparency, like here's what's happening, here's what you can expect. Here's what, here's what we did in the board meeting. Here's what we talked about. And then at the end, there are these very heartwarming shoutouts that people put in. Sort of a central system every week. And it's usually a shout-out from a person to another person, many times not even in their same work group. And it's about one of the values that we have and what did they do to demonstrate that. And I read them out and people go crazy. So, you know, that's one little thing. Friday mornings, 9 o'clock, no matter where I am in the world, I have it. It's an optional coffee where I pose a question has nothing to do with work, has to do with life. And I get 30, 40, 50, 60 people on it. And, you know, we all go around and answer, and it's more getting to know you. There's often tears. That's not, uh, that, that is not engineered that way. It's because people are revealing something, um, you know. And there can be times where it's just hysterically funny. We've made playlists, you know, all sorts of stuff. Um, you know, the company is very focused on these traditions, one-on-ones with people that are happening every single week, listening circles. So we have monthly listening circles. We have a whole diversity, equity, inclusion, and belonging cohort, a group that by themselves gets organized for a 6-month period of time, of which we actually pay people for it. We've come to realize that asking people to do DEIB work on their spare time doesn't seem fair. So we compensate people for that time. And the stuff that they've come up with has just been amazing for the company to celebrate diversity, equity, inclusion, and belonging. So there's a lot at Madison Reed. I just gave you sort of highlights of that.

Wow. So listening circles.

Yes.

You know, you host events, DEI programs. I want to hear about these 3 things even more. The listening circle you said brought to tears and crack up. So tell me more, like, what does— how does that manifest? Tell me.

Yeah, um, well, that, you know, what I talked about then was in my Friday morning coffees, I pose a question, and the questions are typically like, what's the best job you ever had? What's the worst job you've ever had? Who's been a mentor in your life that when you look back, there was somebody that made a difference, and why? What did you learn from mistake you made in your life? And it's just extraordinary you know, uh, things even, you know, up to if you're a baseball player and you're coming up to bat, what song do you want them to play? Like, it's funny things like that. So people just get to reveal their joy, um, their humanity, who they are. And this is my basic premise, like, we spend so much time in work, like, it's, you know, for me it's disproportionate to anything else. Why would I not want to set up an environment where people feel like they're fully seen for their contributions. They are known for— if it's quirkiness, whatever that is. And they start to realize that when you're— you realize this person— when you're seen and when you're valued, it is an automatic, you know, valve that gets released about your genius coming out. And our job is to create this container where people have the ability to be the best of themselves. If we do that, We're unleashing, you know, the, the, you know, the greatest asset a company has is their team, is their people, full stop. Always will be, always has been. And so for us, these are vehicles for people to feel comfortable, to get to know each other. You know, there are Slack channels that you can, you know, Slack channel dogs, Slack channel young parents, Slack channel bakers, and people bake together and And so our job in community is to set what I call the petri dish for the growing of this thing that is extraordinary, that is greater than work. It's a sense of belonging to something that has a mission and a purpose.

You had said belonging in DEI and B, which I thought was terrific. And I think that B, the belonging, inclusion and belonging, that's so important. And you had mentioned also sort of this petri dish and and how when the genius bell goes off, that's recognized. You know, I love that too. Is there, is there something where you, you'd say, you know, you remember when something like that happened, or somebody who does stand out? Uh, is there a description of that, sort of, in when you kind of, uh, think back or reflect when something that was special to you or to others?

Yeah, yeah, yeah. So this is an odd story.. But it's a story that people can sort of, you know, relate to, you know. So I have, I have a gazillion. But, you know, we had a woman that joined us in our call center who was a certified licensed colorist because everyone we hire that either works in our hair color bars that applies our color on a customer's head is a certified licensed colorist. In the state, meaning they had to go to cosmetology, cosmetology school. And our call center is the same because we're doing video consultations and helping people. And we had a young woman that joined us and we've built a very sophisticated algorithm. So when you go on our site, you answer 18 questions in what looks like just a kind of, you know, fun little quiz. And what we're doing is we're emulating what a stylist would look at in your hair to get you to the desired result. So what would be the questions that somebody would look at? And this woman was involved in the early process of how to set up that quiz. And then if you answered this way, what color would that be? If you answered that way, what color would it be? And she worked with us for about 18 months. And then she came to me. We were a smaller company one day. And she said, 'I know this is crazy. But I've worked so closely with the engineers. I want to go into dev and engineering.' So I've decided to leave the company and I'm going to go get my degree in computer science. Now, you know, most companies would be like, oh my God, you can't leave. This company was celebrating the fact that we turned something on in someone who completely made a career shift. And what a delight. What, what a wonderful thing to have done in the world. We have that same crew of people that have become recruiters. For other cosmetologists who are now going to Italy and making our product as R&D people. Right. Our job, you know, we've done a good job at Madison Reed if we have opened the possibility for people to believe that their greatness. And once you figure that out, I mean, that's life's journey, right? Once you figure that out and if your workplace can help you, that's why I say this sounds really weird. I don't get freaked out when people leave because it's really saying that it's time to move on to the next adventure. And hopefully along the way we had some— so we left a mark on somebody's life in a positive way.

I like, I like how you describe that because you're saying you've stimulated someone's interest and you've nurtured them and them moving on is a celebration because typically they come back to the family.

Yeah. And in fact, in my lunches, not only do I introduce new people, but if people are leaving, I say, 'So-and-so has decided to move on.' And 10 out of 10, that person says to me on Slack or the chat, 'Amy, can I say something?' And what you're doing is you're normalizing, you're creating the possibility that people can tell the truth rather than sweeping it under the carpet and making it awful and everyone getting freaked out. You're actually saying, please join me in, in telling this person about the contributions they've made and wishing them the best. Because just like life, I have this saying that we stand on each other's shoulders. We, you know, change does not happen for human beings because they're isolated and all by themselves. It happens because they're taking cues of life and they're looking at what works for them, and then they're moving in a positive direction. And I know in my life there have been so many mentors that on the surface didn't look like they would be people that touched me in certain ways, but they did. And they changed my trajectory. And I want to do that. And I want the company to do that for every, every team member.

I think that's wonderful. And I think about your over 60 locations now. Is that right, Amy?

Yes. In 62, I think.

62 locations.

Yeah.

They're all throughout the United States. Is that right?

Yeah, they're in, you know, if you're, if you're a sports fan, and I am, they're kind of in NFL cities. I think that's the best way to put it, but not, not Green Bay. We're really sorry about the one, or Minneapolis, but most of the others. And, you know, we've, we've clustered them in hubs where we also have a significant amount of online business, and that has been a very successful strategy.

That's very cool. So you've, you've mixed the online business with the real-time retail stores as a business strategy. And a brilliant one at that, because more people can see, of course, of what's happening. Now, one of the things I'm also curious about is what is it like in the stores? What's the culture like? And what do customers expect? What do employees expect? You know, what is that? What does it feel like to be an employee at one of your stores?

Yeah, thank you for asking that question, because this is a this is where I think we can win and where we're making a big difference. So the average stylist in the US, as I mentioned, they go to cosmetology school. Typically they're leaving about $22,000 to $23,000 in debt. So I want people to just anchor on that fact, right? And then they get out of cosmetology school and for the most part, most people are making $20 to $22 an hour. So for just to set the stage, 50% of women, actually 52% of women do their hair at home and 48% go to salons. So if we just anchor on that, when people ask me about why we have locations, it's because 50% of the market has no intention of doing their own hair. So that has created a very big business opportunity. So when I started studying this business, I became as interested in changing the career paths of the stylists who have $22,000 in debt and are making $22 an hour. If you— I— you don't have to be a finance major to be able to know that those numbers are very challenging. That's a lifetime of student debt, right? So we entered into the business paying a much higher both hourly rate and wage, and we pay people benefits either, even if they're part-time, their medical benefits, because we felt as if we needed to stand above everyone else in the industry to recruit great people and give them career opportunities. So that was to set the stage. So what's it like to work there? First of all, these don't look like classic salons. They are very empowering. They have a manifesto of what we stand for. In many of them, when you're you're getting your hair washed and you're looking up, it says things like, you're a badass, go get it. You know, it's all about personal empowerment for our people. And this is important. And our customers, because the deep belief I have is you're— this isn't about just— it is pleasing your customers, but your customers know whether your team loves it or not. Like, it's abundantly clear. This is what most companies don't figure out. They talk about great values and happiness, but the people aren't so happy. So what, what we entered into the saying, if we can surprise and delight our team members, the rest is— they know how to apply hair color. They know how to blow someone's hair dry. They know how to make the magic. Because what people don't understand is most stylists go into the industry because they're really about making somebody else feel beautiful. That's what they're— they are as much therapists, relationship builders as they are artists. And so what's it like to work there? The biggest startling factor when somebody starts is they've typically never been part of a team. They've been individual independent contractors, you know, renting a chair. So this team environment, this we're going to get it, we're in it together, we have each other's back. That is a, you know, and for some people that's not what they want. And so it's very important for us to create a recruiting mechanism, which we're getting back. You know, we, we're, we have close to 700 people, high sixes, and we'll hire another 850 this year. So recruiting becomes this thing that's not just, you know, a sidebar, it's everything. And how do you recruit people in what I call the Madison Reed way? What is it about us that separates that thing, which is you want to be part of a team and you want to be part of this growing company and you have your teammates' backs and you're part of a community. That's the differentiation. And we have found just extraordinary people. I go into stores and the first thing that happens is every team member runs up and hugs me and You know, we do apologize if they're in the middle of doing someone's hair. We say, we're really sorry. And then I sit down and actually talk to every customer that wants to talk and every customer wants to talk. So there is a feeling here that is some magic that is about the fact that our ingredients are amazing. So that's the other thing that goes on. They are not standing behind the chair inhaling toxic fumes for 10 hours. Our ingredients are amazing. I mean, people don't understand that what you do in a salon is you don't feel well at the end of the day in your classic salon. For us, it smells great. There's, you know, we've taken out the harsh chemicals. People's hair look amazing. Women are just on top of the world. So it's a very empowering, fun place to work. It's hard work. And, you know, sure, there are always what— there are problems, right? There are things that happen and you have to learn how to work through that and have empathy for your team members and customers. But I think we're pretty good at it. We're getting better.

This whole concept of all of us have been so sort of solopreneurs, right? We've all been independent and we haven't really done much with people or had a community for 2 years or so. And even before then, we, we we're on this race to be independent. And now, so I think it's safe to assume now people do really want community. They want to come back together, help each other. They know how important it is. We know how important it is to work with each other rather than against each other.

Absolutely. You know, one thing I'll, you know, human, the greatest healing, the greatest healing factor in the world is this thing called love. And we all, no matter who you are, we are all more the same than different. We all desire to love people. We also desire to be loved and validated. So I think when you sprinkle that in the workplace, it's one of our values. I think when you lead from love, from your real heart, from fairness, not just dollars, but fairness, human beings know it. Human beings can sense it and they want to be part of it.

So true. Obviously, we're a Most Loved Workplace, right? Love is one of your values. And it's true. It's, it's the most, it's the most pure way to lead and to speak with others. People can, can sense it. They know that fairness is, is there when it happens. And I love what you're saying, too. You're growing. So you're getting even more— you said 600 more employees? Are you getting even bigger? So these 600 new employees, you know, I'm sure there are a lot of people who want to do this. You know, what is it that, you know, kind of we're to tell them? What should we tell them? Is it, you know, because think about this, I'm having in my mind, uh, you were mentioning a customer looking up and saying, "I'm a badass!" You know, and this, you know, cool thing on the top, and it's kind of this, you know, chic, awesome boutique environment that's lots of fun to go to, natural products, organic products.

Great music.

Great music. You know, a lot of fun, friends, you know.

Exactly.

You know, this is the sense I'm getting. I've never even been in one, and yet I still sense it, talk, just talking to you. So you, I would think when you founded it, you had this in mind.

I had in mind that, um, uh, so I'll go into what I think is happening, which is I think women in particular, from a gender standpoint, at a certain point in life, and maybe all of life, but certainly the majority of our customers are 30-plus, let's say. And as you— one gets more gray hair, it tends to be in the late 30s. So let's just anchor on that. And most people at this point are like, they got a family and they're running around and they're managing and they are working and they have friendships and they have aging parents and all the things in the trajectory of what happens in most people's lives. And so imagine a situation where a company can provide you a respite for what I just said, a place where you're welcomed, a place where you leave in your hair— which, by the way, is incredibly emotional. Hair is an identity. What do, what do most women say when you don't— we're meeting them somewhere? I'm going to be the redhead standing at blank, right? I'm the blonde, right? So hair is a great identifier. It's a great equalizer. So we create this environment where we want you to feel awesome and we want you to be awesome. And, you know, thank goodness some things are happening where masks are optional now and that lets us see people's faces and you could see some of our faces. And also, you know, we cut out water, espresso, these little tiny winks, as I call them. So when I started this, I thought to myself, well, what is the environment that I'd want to go to? Many women walk into a new salon intimidated, and that is not this. So when we designed these and I worked with our store design people, I said, I want people to walk in and I want it to be modern, hip, and welcoming. I want it to feel like it's not— it is not so elitist. It is for everyone. And so they look that way. We've added lots of natural elements. Most of them have walls of moss that's, that's live, right? Like there's cool things and we're getting smarter about what I call the winks. There's more to come. But what we want is for you to leave feeling on top of the world and unstoppable. What we understand is if you do that, you're going to tell your friends, you're going to come back, you're going to— it's, it's, it is there. It is only upside for us.

Absolutely. It's all upside. I, I, what I was imagining as you were saying it was that you walk in and you're fully appreciated for all that you are.

Exactly.

That's such a, that's, that's a true commodity. You, that, that's amazing. You, it's hard to come by. It's kind of like you walk into this room of love.

Well, we've trained our people. We got to get better at a consistency. But you know, when you see it, those stores overperform. When the team is in that zone, it's not even close. It's— it is actually startling. And it always comes down to people. People say, well, maybe it's the location. I'm like, no, no, it's not. I mean, maybe the parking's a little hard. Maybe it's a little bit the location. But when you get the right team and it's primarily the right general manager, the right leader, the rest just follows. And so there is a Madison Reed way. We are learning how to translate that. Like, we can teach anybody how to color. A cosmetologist, they can use our product. Like, that's not the issue, right? The issue— they can color match, they can use our technology. They each have an iPad, right? There's a lot of technology that we have built to help people. But the secret sauce is in the intent of the heart, right? The secret sauce is, are— can we find people who trust? Because the number one thing that happens is people come in and they're hearing these words, Louis, like they're hearing the words and they're thinking, what is happening here? Like, can I really lean into this? Right? This is so weird that I'm wondering, like, is this real? And that happens for HQ people too. Because most people have worked in environments where you're supposed to be a different person at work than you are in the rest of your life. And that creates a, a sense of a plexiglass, what I call the plexiglass sort of boundary, right? There's just a shield that's up. And that shield just gets put in its place. And frankly, there are many people who want it that way, and that's awesome. Then they shouldn't work for us. They shouldn't work with us. And here's the other thing about culture. Culture is guardrails. What I try to explain to people is when you develop your culture, you're really saying, this is what we're vetting for. Do what we have speak to you? And is it— it's a— it's an equal partnership. This notion of the power base is all within the company. It's just a crazy notion in this day and age, right? Like the power of this is a 50/50 deal where we're both sharing in responsibility. And upside, right? So you got to get people to trust. You have to have systems. You have to be able to reward people. You have to have feedback loops. You, you know, and you have to be able to do this one thing that I've had to learn over my life because I'm hard driving is you have to stop and breathe and celebrate.

Oh yeah, that's a, that's a big one.

Well, joy is also one of our values. And so, you can— when is enough enough? When can we stop in life, look around and say, wow, look where we've come? You know, good on us. So, you know, we're, we're— it's very interesting as you run a company, you know, we'll be 8 years old in terms of in market. We founded in '13, but it took us a year to get to market. So, we'll be 8 years this summer in July. And It feels like it's a long time, but in the history of iconic brands, you know, we're just getting started.

You are just getting started. There's so many wonderful things about your company. And when you were saying the stop and breathe, I thought to myself, and celebrate and have joy, I thought to myself, how difficult is that for most people? And I say for even myself, I was brought up, my culture is one that you never stop to celebrate. You always constantly keep going, keep going. And, you know, I've had to break that cycle. It's not been easy. And what you're doing for Madison Reed is you're saying, we're going to break the cycle with you.

Yes.

And with each other in our community. And you're right, that's right what you said. You said this is going to be a very extraordinary experience so that it's, it's so palpable, right?

Yes.

That people can't believe it, that it's actually happening. And, and that lead, that manager has to believe in it truly and take responsibility for coaching everyone to ensure that culture is part of it.

And it starts from staffing, right? It starts from who do you choose to be on your squad, as I call it, right? Like in the lifeboat, you know, you know, I, when I worked at big companies, I used to think this through all the time. And this is something to do with how you're vetting beloved places to work. Many companies are run by allowing the culture to be mandated through what I call the water cooler effect, right? The discourse, which then becomes the piece of this that is hypocritical, right? That cultures can really go— I've seen it. They can go downhill really quickly. If the company doesn't have the ability to teach people that it's okay to talk about conflict, that it's okay to work stuff out. Because everything I've told you is, you know, sunshine and roses. Well, what I'm also telling you is these things are hard. So how do we respect each other and get to know each other? So I've had people in the company who have come up to me or Slacked me, "Hey, do you have a minute?" and told me that something I said really offended them. 'Awesome! Awesome! Please.' And I learned. And I opened my eyes and I apologized. And I was like, 'Whoa, okay.' That's when the culture is working, right? The culture is working when it is honest and authentic and real. So, that's hard because we all come with our steamer trunk of stuff from our life. And so, the trust factor is the biggest piece initially.

Because typically we think to ourselves, well, I, I go to the boss and I tell them how I feel and that's it. Yeah, I get kicked out. I'm all over. In this case, it's the very opposite. You welcome it and you found it to be really a triumph when something like that occurs.

The, the great leadership, it possesses, uh, two things: self-awareness, right? Being able to understand that you as a leader are part of the dynamic and you own your things and you're human, right? And then, the other part of this is empathy. And so, once you can have empathy for the other person's experience and be self-aware enough to own your stuff, the magic can work. Because then, it also mirrors for the other— Geez, if the CEO could apologize to me, I have the capacity that I got to be seen and now maybe I can spread that to somebody else. Right. So, you know, look, these are lifelong situations, you know, culture, you know, growing companies. And, you know, it's easy when there's 4 of you and then 8 of you and then 23 of you. It gets a little harder at 50 and then 100 is a classic sort of breaking point. And then you get to 200 and then most people, lots of people I know are like, well, horses are out of the barn, let it go. Right? If you let the hor— you as the leader let the horses get out of the barn, you won't be able to get it back. And it is the X factor. I am going to make this statement to you. You know, this is a hard business we run. Um, I hope and believe that the brand has crossed a certain recognition point, but our success will live or not or fail because of how we manage our culture and growth. And if we pay attention to that one, the rest will follow.

Well, I'm certain that you have this culture category taken care of and you are a wonderful leader of culture. You could tell in your— you're a genuine, authentic person and that just flows through you. And I certainly know what it's like to be a CEO who says, "I'm sorry" on a daily basis and let go and realize my faults. And I can tell you really do understand that. And I talk to a lot of CEOs, I could tell you. And I know that they don't all understand that truly. And I, I'm confident that you, you're really running and fostering, sustaining a most loved workplace.

That means a lot to me because I know how many CEOs, and you're a great author and just an expert on this. So that means a lot to me. This is a journey of self-awareness. I have an executive coach. I practice presence every day. You know, I, I do a lot. I try to do as much work on myself because, you know, we go around the whole whiny circle, Louis, and here's what it comes down to. Life is an inside job. And once we, once we figure that out, then we have the capacity to be curious. And once you have curiosity capacity rather than being right capacity, things, you know, the sky looks bluer, right? The grass looks greener.

Beautiful. That's beautiful. I love it. Amy Arrett, Madison Reed CEO and founder, extraordinary leader of culture and an incredible creator of an enduring brand that will be sustainable for many lifetimes to come. Thanks for joining us, Amy.

Louis, it's been my pleasure. Thank you.