Episode 186: Leadership at Scale with Dan Pantano, alphabroder

Welcome to Skucast, the podcast for entrepreneurs in the promotional products industry. Skucast shines a light on our industry's best work, features maverick personalities, and discusses what's really involved in running a modern promotional products business. Skucast is the official podcast of Common Skew.

You got to play in whatever role you're in as a leader. You got to play to win and not out of fear of failure.

They ship 50,000 boxes a day. That's 1.2 to 1.3 million units of product a day with over 2,000 employees, 10 facilities in the US and Canada. That's some astounding complexity when you're shipping 13 million boxes a year, moving over 300 million units of product annually. But what I love about Dan and his team at AlphaBroader is how their success, their size, and their scale hasn't changed how approachable and helpful they are. In fact, it's a passion Dan is fixated on in his new role as AlphaBroader's President and CEO. Though Dan Pantano is the recently appointed President and CEO, he has been with AlphaBroader for 8 years and he's no stranger to leadership. He's the former president of Thermo Fisher Scientific, a $32 billion company who worked in the healthcare industry And he's the former president of McKesson. Today, Dan joins me to chat about several topics, including the current challenges and opportunities that supply and demand have placed on our supply chain, the impact of private equity on the shape of AlphaBroader, and we talk a lot about leadership. In fact, you'll love Dan's last piece of advice. It's helpful for everyone, regardless of whether you run a billion-dollar company or a million-dollar company. We talk about all of this and more, but before we get to Dan, have you heard about the new conference we launched called Product Summit sustainability. The goal of Product Summit is to elevate how we think about sustainability in our industry, how we sell sustainability. Plus, we're combining real-world learning with on-trend product ideas that are solely focused on sustainable solutions. It's led by leaders in the field such as Brandon Konowitz and Sarah Miltenberger with Twelve NYC, Denise Tashra with Fair Wear, Kathy Chang with Redwood Classics Apparel, John Borg with Eco Imprints, Michelle Sheldon with Eco Promotional Products, Tracy Tarquinio with Hit, Emily Gigo with Sandmar, and breakouts led by 24 supplier leaders. You know, I know I say this all the time, but it is the one event that you should bring your entire team to because it's a highly concentrated experience solely focused on conscientious selling. Register at commonscue.com/productsummit. This episode is brought to you by Commonsku, the work from anywhere platform that powers your connected workflow, enabling you to process more orders and dramatically grow your sales. To learn more or to begin your free trial now, visit commonskew.com. Now here's my chat with Dan Pantano.

Dan, Fred Wilson, the venture capitalist, said that CEOs basically do 3 things: set the vision, communicate and communicate that broadly, recruit and hire the best talent, and then make sure there's enough cash in the bank.

Would you expand that list of priorities?

Yeah, well, I think those are pretty good, but I think from my perspective, with my team, my priorities are to make sure that we set the vision for the company. So who do we wanna be, and the mission, how are we gonna get there, and then obviously the strategy to support it. So I mean, that would definitely be my first priority, and we're somewhat doing that process as we speak. And as you can imagine, you know, with just transitioning to the new role, we've had a strategy in place, we've had a mission in place, we've had a vision in place, and now it's just refreshing that, making sure that that's what we want to continue to do. So, you know, that's the first priority, and I think part of that process is communication, you know, across the organization to make sure everyone in the organization understands it. The second, you know, priority for me is is ensuring that we are building a winning culture across the company. And I believe that culture really creates the fabric of who we are as a company. We've got 2,000 employees, and it's really what weaves us together as an organization. And I believe culture drives behavior and behavior drives performance. So for me, it's always has been, and every leadership role that I've had has always been a big priority for me. Then the third priority is just creating alignment with the vision in place, the mission in place, the strategy in place across the organization. We're a big company, and a lot of what we do is cross-functionally dependent. Departments have to work together, so making sure that we have alignment across the company on the vision, the mission, and strategy is critical. Then we're going to course correct as we go. Things will change in the market. Environmental change, when we have challenges that we've got to deal with, but making sure that everyone is aligned to where we're headed. And I like to envision a crew team, right? Everyone's rowing in the same direction and the same cadence.

I know that leadership is such a big topic that you're passionate about. It's also a broad topic. I'm curious if you've— what have you picked up from a previous mentor that has meant the most to you in your journey running businesses?

Yeah, it's, it's funny. I've worked, uh, prior to coming out for Broader, three great companies: Baxter Healthcare, Medical Surgical Distribution, McKesson, uh, Incorporated, which is pharmaceutical, primarily pharmaceutical, uh, distribution, and Thermo Fisher Scientific, which is basically, uh, distribution into the research and laboratory market. All three leaders, uh, in the industries that they, that they were in. All three big public publicly held companies. And I was fortunate, I had several great leaders in that process. And as I think about them, you know, the one thing that was common for me is I never wanted to disappoint them. I respected them, I admired them so much, and so I never wanted to let them down. And the flip side of that is I always felt like they never wanted to let their teams down, and they led that way. And I would say that, you know, the common trait that I would use to describe them would be they were player coaches. So they set direction, they set the vision, they set the strategy, they provided feedback, but they were on the field with the team and you felt like they were on the field with the team. It wasn't our problem, my problem, it was our problem as a team. And so you always felt like they were in the trenches with you. So having that player coach style, I mean, from my early days, working for a guy named Gary Minsterman, one of my first bosses. That was his style, and I was fortunate to have several leaders that were a lot like that.

With 2,000 employees, you obviously have a limited scope in terms of what you can do and who you can impact directly, and developing an executive team is probably a key priority for you, and you have been a part of Alfred Broder's history for a long time. You've been a part of this. You've taken on this new role. What's most important to you as you're hiring and recruiting new executive team members? And, and give us a glimpse into what that— what your world looks like when you're running a company of that size.

Yeah, well, you know, the people element of what any leader does, but especially as I think about it, my new role is the most important thing, right? Building the right team, developing the right team, retaining the Retaining your talent is really job one. And then for me, from a hiring perspective, as I interview people for roles, it's somewhat of a given, you know, they're going to get to that kind of final stage of the interview process. They've got the competencies, they've probably got a great track record. And for me, it's all about, you know, kind of their style and their approach, their teamwork, their attitude, their passion. Their excitement for what they're going to do and the chemistry of how they're going to fit in the team. And I believe passionate people perform. So you look for that, that drive and that energy, but that ability to work collaboratively in a team environment is really, really important. So it's probably more of the softer things that I'm looking for as I hire people, but also as I think about who's going to get promoted, who's going to move to that next level, it's their leadership skills. Their teamwork skills that are really, really important as I kind of measure their ability to take the next step.

Is there a trait unique to AlphaBroader that you look for? You've got businesses you've been a part of and led in the past, so you have that framework. You understand how those businesses were distinct from AlphaBroader. You understand how AlphaBroader's distinct from other companies in the industry. Is there something unique to AlphaBroader that you look for in that leadership team?

It's fitting into the culture, right? It's having, you know, I believe in being a glass half full person, having positive attitude. We like to say attitude determines altitude, and having people that espouse that are going to be in leadership roles that are going to drive that through their teams and through their organizations, for me, is really important. And I would say that's been pretty consistent wherever I've been, right? I mean, we're not— this isn't rocket science what we're doing here. I mean, it's not that technical. So it does come down to relationships, it comes down to trust. We have, you know, 5 core values at AlphaBroader: integrity, customer focus, accountability, respect, and excellence. And those are non-negotiable, right? So whoever we hire, whoever we promote is going to have to, you know, consistently demonstrate those core values. And if we do that consistently across the organization as we're promoting As we're hiring, we're going to build the right culture across the company.

I'm really curious about this from your Midwestern background. A lot of the core elements you grew up with in terms of what, what has turned you into a disciplined leader, but what do you wish someone would have told you about leadership that you picked up along the way, maybe the hard way?

I don't know if someone can tell you this, or I've just learned it over time, but You got to play in whatever role you're in as a leader, you got to play to win and not out of fear of failure. Your motivation should be, you know, you're playing to win, you're not motivated because you're afraid to lose or afraid to fail. Because I think for me, I've always been pretty conservative by nature. And so I've always kind of battled that and making sure that, you know, you've got to be willing to take risk to make big strides forward. And that doesn't mean you don't think it through and you do the right planning. And assessing that risk. But for me, it's, you know, not being too conservative, but being willing to kind of go out and take a risk, because that is, I think, how you take the bigger steps forward as a company, and also, I think, as an individual. So that's something that somebody could explain that to me, but I think over time I've learned that. I've learned to get— I don't say aggressive is the right word, but to be, you know, more willing to kind of take some risk in the decisions that I make.

I remember reading the Starbucks founder's autobiography or biography, and he talked about these decisions. You talk about risk, that as the companies get more successful and as they get bigger, you would think that you have exercised that risk muscle a lot and it would get easier, but he actually said it gets a lot harder.

Yeah, the bigger, I think, the company gets, the more complex the company gets, I think the harder it is, right? The less nimble. I mean, I think it's just a fact. Typically smaller companies are more nimble. You have less layers to work with, less complexity to work with, less conflict that can fall out from some of the decisions that you make. So they're easier to make. I think the bigger you get, it does kind of, I would say, drive complacency, but it definitely creates complexity in the decisions that you make.

Speaking of that, when you look at an organization and an industry that is complex as ours, and then you look at just what's happened in apparel, Name your challenges. I'm sure it's offshoring challenges, importing, margin pressures, hiring talent. What's got your attention the most these days?

Right now, two things. I think this is not just for our industry, but, you know, probably for most every industry, and you can read about it or hear about it every day, and that's staffing and supply chain. You know, supply chain is really inventory, getting inventory into our distribution centers and into our network. So those are the two biggest priorities that we have. That's our entire company is focused on that and trying to mitigate those from a staffing perspective, and also working really closely with our supplier partners to do creative things to get product in here faster, to cut lead times. We're working also closely with our manufacturing partners where we're sourcing our own product to try to get that in here as quickly as we can. And we're seeing demand, you know, go through the roof. And obviously, when you're challenged on both the staffing front on an inventory front, it can impede your ability to kind of grow and take advantage of the demand that's out there and support our customers, which is, you know, at the end of the day, what we're all about. So those are the two biggest things. And, you know, I think those challenges are going to persist. Yeah. So things kind of get more normal over the next couple of months. But that's definitely what we're focused on.

You've got an interesting macroeconomic view. Have you seen that demand spike just here recently in big numbers?

Yeah, I would say since really the beginning of the year, actually, we saw the end of the year last year be much stronger than we anticipated. And that momentum has really kind of carried itself through and I would say accelerated over the last several months. And we haven't even started really seeing events happen yet.

Yeah, right.

So you start thinking 3 or 4 months from now when events are starting to show up on the calendar, when they really start happening, I think demand's gonna take another spike up. So, you know, trying to prepare ourselves for that so we can support our customers through that period is gonna be really important.

We've seen supply chain issues in the past. We've seen stockout issues, inventory challenges in the past. What's unique to this particular time period that you've not noticed before? Does it just happen to do with that demand that spikes?

Well, it goes back to what happened a year ago with a lot of the manufacturers, right? They shut down production. They pivoted their production to mask or other products. And then as they tried to ramp back up, they had all the different challenges of ramping back up and dealing with COVID still, their own staffing challenges and getting back to capacity from a production perspective. And many of them aren't there yet. They're not at full capacity. So you've got that challenge and then obviously the freight challenge. Transportation, with the boom in the e-commerce world, transportation is very, very difficult to get either long-haul drivers supporting a lot of these e-com companies or just the typical UPS and FedEx. And we all saw the challenges that they all felt at the end of last year getting into the retail season, the holiday season. So between staffing up the production facilities, getting them at capacity, and then dealing with the freight challenges, those are all on top of the fact that demand, I think, accelerated faster than people thought it would. Yeah.

Can you give us an idea of the scale that AlphaBroar handles? I read somewhere that you handle over 40,000 orders a day.

Did I get that right?

Yeah, yeah. We have over 40,000, close to 45,000 orders a day. You know, every day kind of fluctuates. And we do ship about 50,000 boxes a day as well. We handle about 1.2 to 1.3 million units on average a day. A unit would be a t-shirt or a coffee mug or something like that. And we have, you know, we have a big network. We've got 10 facilities in the US. We've got one facility in Canada that supports, you know, not only our apparel business, but also our production business from a hard goods perspective. And then in Canada, it's just apparel up in our Toronto or Richmond Hill facility.

Yeah.

Alphabrother has evolved into this behemoth of an organization. It's a brand that's hard for us to get our arms around, and yet every time I meet someone like you, Dan, or anyone on your team, I just, I realize that this is just a company run by some really good people, and we may, maybe we just need to get to know Alphabrother a little more. Why do you think we've had a hard time defining Alphabrother? Is it because of the changes, private equity, this, maybe this, the largeness of who Alphabrother is?

Well, it's a great question. You know, one, if you're having a hard time defining who we are, then we've got to do a better job defining ourselves for you. So, and I think that's an opportunity for us. But when I think about our company, we are an incredible fulfillment services provider. So if you're a promotional products distributor, you think about what we have, and obviously this has evolved over time, but we're the only one that can provide apparel or hard goods, decorated or blank, to any customer. So truly a one-stop shop solution for our customers. That is who we are. So our, as you know, our customers are out selling every day, right? And they're creating demand. We're fulfilling that demand. We're supplying that product. And we think we can do it in a more efficient way because we offer this one-stop shop solution. And we're focused every day on enhancing that, that solution for our customers and making it as seamless for our customers as possible, really being that easy button. And so that's part of our core strategy is making sure that we do that over time. But we also spend a lot of time with our sales organization and our marketing team helping our customers create that demand. We provide a lot of tools and solutions. I mean, Common Security is a great example, right? That's what you all are doing for your customers is providing tools and solutions that help them sell and help them grow our business. Our mission is to enable our customers to be successful, right? We do that by not only fulfilling their orders, but also by helping them go out and create demand. Part of what, yeah, I think part of your question was, has acquisitions, you know, changed kind of who we are? And I would say absolutely, by design. I mean, if you go back and look at who we were 8 and a half years ago when I first started, I mean, we basically sold t-shirts and hoodies. I mean, that was primarily our, that was our business for the most part. We had a few retail brands, but not much, and not much in the way of a private brand offering. And so we've made a number of acquisitions centered around the strategy that we developed back then to, you know, I'll give you one example was Ash City, right? We acquired Ash City, I think it was 2014, I can't remember the years anymore, but, and that gave us a great private brand offering, great product, gave us decoration capabilities, embroidery, heat seal, other capabilities that they had. So That was kind of the first big acquisition that we made. We obviously made the Bodick Rhodes acquisition, which was really more about driving scale and efficiencies, but we picked up some great brands with that acquisition like Next Level, Ultraclub, a private brand. Then lastly, 3.5 years ago now, I guess, we acquired Primeline, which gave us the hard goods business and the decoration capabilities that come with that. So those were transformational acquisitions, I think, for the company, and I think it also kind of changed how people perceived us or maybe created, to your point, Bobby, some of the confusion around who are we. But we are a fulfillment services provider, hard goods, apparel, decorated or blank.

That's a good point that you talk about this evolution of the identity has to do with these acquisitions because things changed. I mean, AlphaBroader was known as a blank supplier. I remember when the Ash City acquisition came about, because suddenly the big news was Alphabrothers getting in the decoration business and sort of creating quite a—

quite a little bit of conflict.

Yeah, a little conflict there.

Um, and the hard—

getting in the hard goods. So the evolution, it makes perfect sense that we could have a hard time getting our hands around the brand also because it's so large. But I was fortunate to sit by Southwest Airlines CEO Gary Kelly once, and I asked him, I said, you know, Southwest Airlines has this reputation for being this quirky enjoyable experience, affordable fares. But I asked him, what is it that Southwest gets recognized for that we all take for granted every day? And he said, Southwest Airlines gets more people to their destination on time than any other airline. And I was blown away by that because here I was running a small fulfillment company, a tiny, tiny fraction of what you are doing on a daily basis, we were doing like annually. And I understood the pain and heartache it was to try and get that many products to its destination on time. I thought that was an interesting parallel to what you're doing with 40,000 orders a day. So it's things we take for granted, I think, the complexity of our supply chain and what it takes to get those orders to their destination accurately every day.

And we do that with 98% accuracy, and we strive, as many times we're at 99, 99.5% accuracy. We're doing literally millions of orders a year. It adds up, right? I think we take for granted all the orders we get right because we do focus a lot of time and energy around solving problems that we create because we got something wrong, right? Making sure that we make it right for our customers, and that's really part of what makes us who we are from a customer service perspective.

How would you describe Alpha Broader from the inside out with your team and going outward? Is that different than what we perceive from the outside in?

Yeah, well, I think if you, if you're not part of the AlphaBroader team, I don't think you realize just how close-knit we are as a team. You know, I know we've got, you know, there's family-run businesses that are out there. We're very much a family in this company. I mean, the tenure across our organization is incredible. We've got people that have been here a long, long time. We've worked together for a long, long time. And so it is a really, really fun place to work, and it's a place where I think people feel supported. Supported and feel very comfortable being in their own skin and really seeking help and advice from peers across the company. You know, having the tenure that we have and the experience that we have, I think we have a really good understanding of our customer and what it takes to help our customers be successful. And, you know, we rely on that experience across our people to do that, but we take a lot of pride in that. I think, as I said before, we do make mistakes. There's no question about that, but it's how we respond to those mistakes, how we fix those quickly for our customers so we can turn, you know, lemons into lemonade, right? I think when customers know you're going to make a mistake and it's how you deal with that, I think is where it's really important to the customer.

We have a lot of entrepreneurs and I think supplier partners that are listening to this that might— that would be curious about this question. How has private equity influenced the growth of AlphaBroader? How have you seen that change?

Changed the company? Yeah, I mean, private equity has been the enabler, right? They're, they're the capital behind what we do. So we talked about, you know, the acquisitions that we've made over the years. I think we've made 6 acquisitions since I started 8 years ago. I think about the millions that we've invested in IT technology, the millions we've invested in our distribution centers and technology and expanding our DC network. That was all enabled by our private equity company, and they buy into our strategy. And so, you know, I think the one thing that I sometimes pick up on is there's a negative perception when you're private equity owned, and people think private equity companies are short-term focused or not focused on the long term. And my experience with Littlejohn, our private equity sponsor, has been the exact opposite. We've been with Littlejohn for 8+ years, So a long time, they buy into the long-term strategy. So when we're talking about strategy, it's not for next year, it's 5 years out. And if you're doing the right things for the long-term, you're going to create value for the company and you're going to create value for your shareholders, your private equity firms. So for me, private equity has been a godsend for our company because it's enabled us to grow and do the things that we needed to do.

Are acquisitions still high on your list?

Yeah, the right acquisitions, you know, that fit into our core strategy. I think that's, that's going to be part of what, you know, we evaluate as we go forward. But absolutely.

You address the fact that obviously private equity is a catalyst for growth. What are the challenges inherent with private equity for those that are trying to learn and thinking of navigating or leaning toward that option?

Yeah, I mean, I No different than, I mean, I've worked for publicly held companies. I don't think the challenges are any different, right? The expectation with a private equity company is that you're going to create enterprise value. And with our private equity sponsor, they know we can't create enterprise value if we're not creating a great customer experience. So, you know, the things that we're doing to improve the customer experience and support our customers, support our mission around this one-stop-shop solution drives value for the company. And so, you know, our PE firm, just like a board would in a publicly held company, you know, they're holding us accountable to creating enterprise value and doing that over an extended period of time. It's really no different than any for-profit company. Yes, we're here to make a profit, but we're also here to create enterprise value.

Yeah, most of us can't even fathom the role you have, Dan. I mean, it encompasses so much. Can you give us an idea what an average day in your life is like, or an average week? I really want to sort of get a—

I used to—

I like to ask this question particularly of CEOs, the larger the organization too, I love to ask, but really no matter the size, like, what's on your desk right now? What's captured your attention?

Yeah, yeah, um, and it does, it varies from week to week. Uh, and if I step back and think about how do I spend my time And maybe I'd break it up into thirds, and I think about first would be on people, right? Whether that's communicating across our organization, that's doing developmental things with our team, it's building employee engagement, solving problems, but it's really around the people side of the business. And it always starts with that. You can't drive a great customer experience if you don't have a fully engaged team, right? So making sure that we have complete alignment, as I talked about earlier, across the organization on what we're trying to get accomplished in tackling issues. It starts with our people. I would say a third is on our customers and doing things better from an execution perspective that impact the customer experience, that help our customers, whether that's just doing things, fulfilling their orders better. And we talked about a couple of the challenges that were faced around staffing and inventory, you know, customer-related issues, customer experience-related issues probably take up a third of my time. And right now that's a real important priority because of some of the challenges that we talked about earlier. And I would say a third ideally is spent on the future, whether that's, you know, we're talking about M&A opportunities, evaluating those things, evaluating new technology, new products, new solutions, but making sure that we're continually moving the ball forward. And driving our strategy would be a third of the time. If I could ideally spend my week that way, it'd be those thirds. And things obviously fluctuate depending on kind of the needs of the day.

I've really enjoyed getting to know you, Dan. What do you enjoy doing with— so that other folks can get to know Dan a little bit more, what do you enjoy doing when you're not leading AlphaLab?

What do I enjoy doing? I have a lot of interests. I would say my one thing that I'm most passionate about is fishing. So I think you and I were just talking about in Southwest Florida. So this time of year is a great, a great time to fish. I'm actually going to do some fishing over Memorial weekend with my kids.

So we're talking deep sea fishing, is that what you're doing?

No, it's all back bay. So fish— okay, I don't know if you've even heard of these fish, but tarpon, snook, and redfish. Yeah, yeah. Fly fish for reds? No, I don't fly fish.

No.

Okay.

All right.

I wish I did, but there's a lot of guys that fly fish for actually tarpon. This time of year. So I would say that's, that's probably number one. As crazy as this sounds, I don't know why I did it, but I started to try and learn the banjo. Started last August. I love music. I have zero, I mean absolutely zero musical ability, no talent.

And great, I love that, by the way.

I love, I love it. I've always, always loved the banjo, and it's hard.

It seems like a really hard instrument. Steve Martin obviously is known for, for his— he's a virtuoso, right?

And he's like one of I'm in the top 5 in the country.

Yeah, believe it or not, the Banjo Museum is down here, Dan, so you gotta come here sometime. Yeah, so we can hang out.

Yeah, so I literally, I try to play every night, but that's great. Yeah, I interrupted you, so we got fishing and banjo, and I would, you know, I just, I love working out, love running. Um, I just got into the Peloton, uh, about a month or two ago, so I do that whenever I can. And then I've got a Yellow Lab, Bubba, baby Bubba, who's my baby. He's gonna turn 2 in June. So I love spending time with him. So I would say that's, yeah, that's what I like to do outside of work.

Love it. So last question, you're sitting across from a young Dan Pantano. He's about to take on the role of the CEO at a very large corporation. You share with him one piece of advice that will contribute to his, not the business development, but his personal wellbeing. What is that piece of advice?

I would say just be yourself. You didn't get to where you are trying to be somebody else. So you don't need to be different. You've been successful. If you're gonna obviously step into that role, you've been successful being who you are. So stay true to your roots.

I love that. All right, Dan, thanks, man.

It's been great talking to you. Thanks, Bobby. Yeah, I enjoy it. I'll get down there and see you soon, I hope. Do it, do it.

Come on.

All right, man.

Thanks, Dan.

See you, buddy.

Thanks so much for tuning in to this episode of SKUcast. Be sure to keep up with our latest content by subscribing to SKUcast on iTunes or to our blog at community.commsku.com. Until next time, friends, thanks so much for listening.

Mm-hmm.