Influencers Transcript: Mindy Grossman, May 30, 2019

ANDY SERWER: Influencers learn from the best, then try to build something better. Mindy Grossman strives to do just that. In her '20s, Grossman joined the fashion industry and worked her way up to a job under Ralph Lauren. She then led global apparel at Nike under Phil Knight and revamped the Home Shopping Network with Barry Diller.

She now leads WW International, formerly known as Weight Watchers, where she is renewing an iconic brand. Oprah Winfrey is a large shareholder. Grossman is here to talk about how to take big risks and transform companies that might otherwise get left behind.

Hello, everyone. I'm Andy Serwer, welcome to Influencers. And welcome to our guest, Mindy Grossman, the chief executive of WW International, the company formerly known as Weight Watchers. Mindy, great to see you--

MINDY GROSSMAN: Great to be here with you, Andy.

ANDY SERWER: So you've done a tremendous amount of things in your career. A lot of different exciting companies want to talk all about that in your biography, generally. But let's start off with WW because you came in a little more than a year ago, and subscriptions peaked around 4.2 million. They've dropped back down. The stock took a hit. What's gone wrong? I'm going to ask you what you're doing to fix it. But what-- what happened to the business sort of over the past year or so?

MINDY GROSSMAN: Well, let me reframe the question with what are we trying to accomplish? And what has the experience been over the past about 18 months? This is a brand that has been transforming people's lives. We're about to have our 56th anniversary in the next days.

ANDY SERWER: Right.

MINDY GROSSMAN: Um and it was really built on the best of nutrition and the power of community. So now fast forward to, you know, a few years ago. And the brand had not just the permission but the responsibility to be so much more than that.

So how did we take this tremendous equity that had been built? But what people need today is different. They need more than a one-stop solution that's time phase. It's not about a diet. It's about being people's partners and supporting their efforts to lead their healthier lives. Um and that's what we've been building and transforming, truly transforming the business into a 360 degree ecosystem for people to achieve what they want to achieve.

So phase one was redefine our purpose and what we wanted to deliver. So we inspire healthy habits for real life, people, families, communities, the world, for everyone. Last February 7, we came out with our impact manifesto and what we wanted to build and the impact we want to have in the world. In one year, in one year, starting in January 2018, we relaunched our most successful program in the company's history, WW freestyle around nutrition.

We took the science that we knew from nutrition and we relaunched FitPoints 2.0 around activity. We integrated audio fitness. We established a whole new pillar of mindset and mindfulness with our content and a partnership with Headspace. We launched our first rewards and loyalty program, WellnessWins, which rewards you for the efforts you take on your health. We enhanced Connect, which is our community digital platform as well as our physical platforms, elevated 24/7, chat with a coach, reformulated all our products to represent a healthy living brand. So the value that we provided to our members was night and day.

ANDY SERWER: It sounds like--

MINDY GROSSMAN: When we came, oh, I'm sorry.

ANDY SERWER: No, I was just going to say, it sounds like, I'm sorry to interrupt, but that you're sort of refreshing the entire brand and experience. Something you did I think at HSN, right? I mean it really needed that whole evolution.

MINDY GROSSMAN: Correct, that-- that was a very big part of it. So it wasn't just creating the ecosystem but making the brand relevant for today, to be able to attract a significantly more diverse and broader audience around the world. So we relaunched in January of this year. And we had, what we call, the speed bump, right, in January. And it was a number, a couple of things, but I want to caveat that with what I'll now say where we are and why the brand is in the best place it's been.

So we were anniversary-ing freestyle, which I had mentioned, which truly was a phenomenon. We did relaunch the brand. And we came out with a campaign that while it really drove relevancy and brand, did not recruit at the levels that we wanted it to. And we came out with a new branding and needed a bit of a more overt bridge between WW and the new Weight Watchers. We immediately identified what the issues were.

And I have to really credit the power of our talent and our organization to quickly respond, course correct, stabilize the business. And as we recently reported, we ended the quarter at over 4.6 million subscribers, which is the highest in our history, not where we wanted to be, but still significant if you look at how our subscriber base works. We also ended with the highest retention in, you know, our history as well as the highest brand relevancy.

So our goals right now is it's obvious that the consumers we have, and the members we have are embracing everything that we're providing them. Now, it's aggressively being able to attract, communicate, more people who want what we have to value. And ultimately, there's-- everybody asked me, you know, who our customer is--

ANDY SERWER: Yeah, I was just about to ask you, who is it, a male, female, old, young?

MINDY GROSSMAN: Yes.

ANDY SERWER: Rural, poor, urban, rich.

MINDY GROSSMAN: You know, our biggest customer, our biggest competition, excuse me, are people thinking they can get healthy themselves, number one. Number two, we really want to be the brand that can democratize wellness because one of the reasons we've been so powerful for so many years, and it comes down to two words and why our tagline with WW is wellness that works, it works.

And it's ultimately the most livable program on the planet. You are not restricted. You can eat anything you want. And what we're trying to give people is sustainable, livable, ongoing behavior change that's going to allow them to live their healthier lives. But for many, many years, we marketed to a very narrow subset of women.

And so when we look at diversity today and who we can serve, that is age, gender, race, ethnicity, geography, and very important life stage, so young moms or college. As a matter of fact, within our connect platform, what we recently launched, which is having immediate adoption of what we call Connect Groups.

So people, like-minded people, who want to be informed by others like them. So the young moms group, the brides group, that's certainly time phase, and men. And we are seeing, overall, our member base become more diverse. You know, we know with our invite a friend program, you know, 20% of who came in were men.

ANDY SERWER: Right.

MINDY GROSSMAN: So we're definitely seeing that resonate. And I think a big part of it is what the program is, the livability, and it works.

ANDY SERWER: So your total addressable market to use a current phrase--

MINDY GROSSMAN: Is pretty significant.

ANDY SERWER: --hundreds of millions of people.

MINDY GROSSMAN: Correct.

ANDY SERWER: One of your most famous constituents is a big shareholder, Oprah Winfrey. Do you talk to her? What does she tell you? What do you talk to her about? She sold some stock. What is the status of your relationship with her?

MINDY GROSSMAN: Sure, you know, before I joined the company, and I was doing my own diligence going through the experience itself and-- I flew out to the West Coast, and I spent a day with Oprah. And what I really wanted to know is, why? Why did you want to be part of this brand? And what is it that you feel is so powerful?

And, you know, if you know Oprah, she is very diligent in what she decides to do and not to do. And she really, just like myself, believes that, you know, if she wants to empower, to give people the ability to live their best life. We can be that partner to help them do that. And that's why she became part of the company.

What I've also appreciated is 100% accessibility and engagement from her and whether that's as a board member or whether that's as a strategic advisor. You know, if I text and said, do you have a few minutes, want to run something by you, she's there. She's been very engaged and, you know, on a number of levels. You know, for the spring season she's, you know, part of the face of the campaign along with our members, you know, surprising and FaceTime.

And we also, you know, announce that later in the year we're going to activate a number of experiences and-- and other things that she'll be part of. So, you know, who would not want Oprah Winfrey as a very engaged board member and advisor?

ANDY SERWER: She still all in then?

MINDY GROSSMAN: Totally all in.

ANDY SERWER: Great, let's talk a little bit about your upbringing and your background when you were younger. You grew up in the New York City area, Long Island, right, and then went to school in the area and then went down to GW, dropped out, got in the fashion business. What were those early days like for you? What were you thinking?

MINDY GROSSMAN: You know, the-- you know, my upbringing was very different. You know, I was an adopted kid. My father worked nights. They were very fortunate that somebody gave them a gift to give them the financial wherewithal to adopt a child. And I was very serious from a very young age, actually planned to be a lawyer, graduated high school at 16, started college.

And then when I got to, you know, the end of my, you know, last year in school, I kind of had the epiphany that, you know, I needed to take a different approach. And I decided to move to New York to kind of figure it out. And to your point, ended up going into the menswear industry, which there weren't a lot of women at the time. But--

ANDY SERWER: What drew you to that business?

MINDY GROSSMAN: You know, I knew I wanted to be in a more creative industry even though I might not be the creator. I wanted to be in the business of making creativity successful. And, you know, I had a great interview with the president of an international division of a menswear portfolio and hired me and took me under his wing. And I ended up only staying there for a year because I felt it was not an environment that was going to foster the career of women.

And I talked to women all the time about that. You have to decide, you know, if you're on a path. Is that path blocking you or is that path facilitating you? And you have to make those decisions. And I've been very fortunate for the balance of my career to work and be with some amazing people. So I spent the first 18 years of my career in the menswear industry, rising up the ranks, then men's and women's when I started Polo Jeans company. I was CEO.

ANDY SERWER: Yeah, I want to stop you right there because I want to pause and just sort of make this point that you worked for at least three incredibly, famous, prolific, accomplished, individual CEOs in retailing business and beyond. Who are very high profile. Who mentored you to a degree, right? I mean Ralph Lauren, Phil Knight, and Barry Diller, pretty amazing.

MINDY GROSSMAN: It's a great trifecta.

ANDY SERWER: it really is. I mean that's incredible. So why don't we talk a little bit about each one of your experiences there. And what was it like working for Ralph Lauren? And what was he like? What did you learn from him?

MINDY GROSSMAN: Sure, you know, I've been very fortunate that I've worked for entrepreneurs my entire career because even before Ralph, I worked for Willie Smith. I worked for Tommy Hilfiger.

ANDY SERWER: Right, that was two.

MINDY GROSSMAN: And, you know, working for Ralph, he is the soul of brand purity. And there's a consistency with me as far as that's concerned as well. And, you know, one of the greatest things Ralph said to me over the course of my time with him and I ran three different businesses. I was president and did the turnaround of Chaps, Ralph Lauren, then I headed up new business development and did the business plan, and then took over and did the start up Polo Jeans Company before it got sold to Jones New York.

And, you know, Ralph would look at you and say, Mindy, it's more important what you learn to say no to as a brand even more than what you say yes to. And it's that definitive understanding of brand purity and the quality of decision making. And making sure that you really have the focal point and the understanding of what differentiates you as a brand. And what you should and shouldn't do.

He also understood the power of the uniqueness of what you're developing. So he would say something like, Mindy, tell me why it's a Ralph Lauren product before you put the logo on it. And so really understanding the brand and it's so relevant to our business today.

ANDY SERWER: Right.

MINDY GROSSMAN: I mean, the WW brand and what we stand for and what we mean to people, what we say no to is just as important as what we say yes to, which is why we got out of almost all the food products we sell because they didn't live up. And so having that opportunity for 10 years was incredible. And then, as you mentioned, going to work for Phil Knight--

ANDY SERWER: Well, let me ask you about Ralph a little bit. So it sounds like you really learned branding from him. And I'm curious with that jeans endeavor, Polo, did he-- was he resistant to that idea at first?

MINDY GROSSMAN: Actually, no, you know, but it was very interesting. It was an interesting time because they had just come off of double R, double RL, which had not been successful.

ANDY SERWER: Right.

MINDY GROSSMAN: And so now here I was starting an entire jeans company again or a lifestyle company, men's and women's lifestyle company. But we partnered from the very beginning and created something that was very distinct, and that could truly have a unique platform. You know, at the time when Calvin was hot or Tommy was hot and but we-- we felt it was very Ralph and what we did. And we went from zero to 450 million in 3 and 1/2 or 4 years until it was acquired. So we struck a chord. And it really resonated, which was incredibly exciting.

ANDY SERWER: All right, let's talk about Phil Knight. I mean, another genius entrepreneur but you sort of took over the apparel business, in particular, the women's apparel business there.

MINDY GROSSMAN: Actually, it was the whole apparel business.

ANDY SERWER: Right, the whole thing but in particular, you drove the women's apparel business.

MINDY GROSSMAN: So, you know, it's interesting when I was approached to go to Nike, I was incredibly excited. You know, as I mentioned, our business had been acquired. And I felt that my next step was to go to a much more global company, much more diverse, marketing driven, different products. And they had never had somebody run their global apparel business who came out of apparel. Most people had come out of the footwear business. And they'd never have-- had a woman, especially from the fashion industry. So Phil had just come back into the company in 1999. He'd come out, and then starting in 1997, the company had-- had some issues. And so he came back and built a whole new executive team. And I was very fortunate to be part of that team, to take over the totality of the global apparel business from T-shirts to Olympics.

ANDY SERWER: Yeah.

MINDY GROSSMAN: But to your point, one of the big opportunities was to truly become a women's brand within that. So I had a big focus on that as well as-- but, you know, it was an interesting transition coming in from the outside. And I always tell the funny story when Women's Wear Daily announced that I was going to Nike. They were a little snarkier at the time, and the quoke was the Grande Doyenne of fashion is going to the testosterone-fueled Pacific Northwest. How long do you think she'll be there?

And six years later, it was incredible. We dramatically grew the business. We put our stake in the ground, not only as a women's apparel company, but as a brand for women. And as a company for women, I started their first global Women's Leadership Council, and it was an incredible experience. But working for Phil was a gift. He was definitely a mentor. And if you've read his book, which we were talking about earlier, the combination of culture, humanity, purpose, and clarity of vision, was very much what Phil is. And he is who he is.

ANDY SERWER: And another super strong brand, of course, by the way, right? Also, you had to oversee issues, global issues, with supply chain and sweatshops. That was an issue that was that you had to look into.

MINDY GROSSMAN: Sustainability and supply chain was also part of my responsibility. And I have to say that was a massive commitment from the company, across the company. And now they are the global leader in all of those areas and whether that be sustainability or whether that be in the work that they've done within the factory base. And how they treat, you know, their suppliers was pretty, very, very forward for its time. But they've really set the standard.

ANDY SERWER: Right, there was an op-ed piece in the New York Times the other day by a female athlete who said she wasn't supported when she was pregnant by Nike. Do you think they're still wrestling with those issues?

MINDY GROSSMAN: You know, I wouldn't say wrestling. I think some of the issues when they come to the forefront, they're very proactive in addressing them today. You know, it's very interesting. When I got to the company, one of our athletes had actually gotten pregnant. And we didn't have maternity. And I ended up doing a collaboration with Liz Lange who is the number one maternity designer at the time. And we were the first company to actually do maternity active.

So I think that, you know, everything that you have to look at is, is there a positive intent? And certainly, Phil, and certainly, Mark, there's positive intent. And you have to admit when you're not where you want to be and address it positively. And I think that they have done that.

ANDY SERWER: You had to tell Phil that you wanted to leave at a certain point and go work for Barry Diller. What was that like?

MINDY GROSSMAN: So I remember being very nervous coming in because we had an incredible relationship. But, you know, I'd been commuting for six years between New York. I had a place in Oregon, and I was out of the country 30% of the time. And my daughter was going into her later years of high school. And my parents weren't well.

And as much as I would have been, loved to have been there for a long time, but I also knew that I wasn't going to leave for something traditional. I want-- I love transformation. And I really wanted to do something that could transform a business based on not only where consumer behavior was going but where technology was going because one of the benefits of being at Nike during that time was seeing the explosion of mobile in Japan and using technology in different ways.

And so I was making a fairly unconventional move. So I went in to talk to Phil. And, you know, first I thanked him. And I told him what I was doing and going to work for Barry and looking to transform a media company with no experience in TV, no experience and a lot of these other areas of the business.

ANDY SERWER: Direct to consumer, right?

MINDY GROSSMAN: But I saw a vision for it, and Phil was amazing. He said, look, I'm sorry you're leaving. You know, I know you're going to be successful. But if for any reason you want to ever have a conversation again, I'm here. But I want to tell you one thing. If you told me you were leaving for something predictable, I'd be very disappointed in you.

ANDY SERWER: That's great.

MINDY GROSSMAN: But the amazing thing was after that I found out that he called Barry to tell him, you know, that this was going to be a great move and what he thought of me. And that's Phil Knight. That is the essence of Phil Knight.

ANDY SERWER: That's a class act, I guess, right there. So you got to HSN, and it kind of needed an overhaul to your mind, right?

MINDY GROSSMAN: Oh, wow, you know, it needed-- I was the eighth CEO in 10 years. And what happens in a company when you go through that kind of volatile change, it freezes. I always say it's like Ms. Havisham in Great Expectations.

ANDY SERWER: Right, OK.

MINDY GROSSMAN: Right, there's conflict. And so the first thing I knew I needed to do was ignite the culture, create a new vision and strategy for the brand, and then execute against that strategy. But the strategy was to completely transform the business from a linear selling platform to an editorial, programmed, commerce, series of platforms, fueled by content, fueled by technology, and fueled by editorial storytelling.

And that was a far cry from where it was. So the first thing I had to do was galvanize people who wanted to take the journey with me because we didn't have a business. We didn't have product, and we didn't have brands. And, you know, the learning for me on that is, you know, I've spent my whole career really focused on trying to make other people successful and building a network of relationships and trust. And that was pivotal for me to be successful there.

So I could, you know, bring Sephora on and have 40 beauty brands overnight, or Stephanie Greenfield, from the chain of stores, Scoop, doing scoop style shows, or bringing on designers, or chefs, et cetera. And so I started in May 2006. We relaunched the brand internally, Halloween of that year, I remember, and then we relaunched the summer of 2007. I had to get out of about $150 to $200 million worth of products that either didn't fit the quality or the brand.

But you-- it goes back to Ralph. You have to know what to say no to. And the minute we relaunched the business, took off, and then in-- I'll make an interesting segue-- November 2007, it's a Sunday night. I was at home, and my phone rang. And my husband answered the phone and said, Barry Diller is on the phone. I said, well, it's a Sunday night at 9 o'clock. That's either really good or really bad. And Barry got on the phone and said, I've got great news. We're going to spin off. And, you know, you'll take the company public, and chart your own course. And, you know, you'll be able to really accelerate the growth of the business. So I was incredibly excited.

But we were on the roadshow the summer of 2008. And we were one of the last IPOs in August 2008. And talk about a moment and talk about, you know, really the test of-- of leadership and resilience when you're doing a transformation also in the face of a hurricane. And, you know, one of the things that I really learned from Barry, and he exemplifies this more than anyone else, is that risk taking and boldness is the essence of transformation. If we had not relaunched the brand and made the changes and change the culture, we would not-- have not only survived, but thrived tremendously post 2008.

ANDY SERWER: I want to switch back, Mindy, a little bit to Weight Watchers, WW, and ask you about that name change. Why did you change the name? And some people have said, oh, that's distancing yourself from this notion of losing weight. And maybe that's something they shouldn't have done. What's your take on that?

MINDY GROSSMAN: So number one, we will never, ever abdicate our leading position informed by science of the best healthy weight-loss program on the planet. So I just want to set table stakes there. However, in today's world, and we have done such massive consumer research globally on what people want in terms of living a healthy life today. And it's not just about a diet. It's not just about a time phase scenario. It's much more than that.

And the name, of course, we respect legacy. And I respect legacy more than anything else. But the name really needed to evolve to this incredible mark of wellness, hence wellness that works, as I mentioned before, because it really became a blessing and a curse because people want to think about what healthy means to them, not just about weight.

However, what we also recognize if-- and we have. You ask 100,000 people, do you want to get healthy? They're going to say, yes. If you ask them, what's the first thing you need to do? 75 percent are going to say lose weight or eat healthier. So we know that has to be part of it. So we're trying to give people the best, healthiest program, certainly, with weight loss as a fundamental part of it if that is what you want. But we need it to evolve to really keep up with where consumer's perspectives were. And that's an evolution. That is not neglecting our legacy in any way, shape or form.

ANDY SERWER: Got it, let me ask you about women in the C-suite and why there aren't more of them, seems like progress has been slower than many would have anticipated, right?

MINDY GROSSMAN: It's very disappointing. You know, and as much as I think that there has been progress nowhere near to the level that I think there should have been. It's very interesting, Andy. I have been speaking about the business imperative for diversity for-- for 20 years, 20 years. I remember presenting a white paper even to the board at Nike working with catalyst on the power of diversity and inclusion, and then the fact that not only is it subjective. It is pure empirical evidence that companies that are more diverse have longer term sustainable success. So ostensibly, if you don't want to be diverse, you're saying that you don't want to be as successful.

But things have to change. And, you know, I think it's incredible that Sheryl Sandberg came out with a lean in for women. But the reality is that if men do not embrace the fundamental belief and understanding that this is a true business imperative, and the right decisions have to be made, it's not going to change. So changes like not filling an open position unless 50% of the qualified candidate pool are diverse, then making a decision. I think there has to be actionable, measurable things that companies have to report on in order for this to evolve.

You know, if you look at our board today, we recently added three new board members. We have five women and six men on the board. We have ethnic diversity. We have more important diversity of background, diversity of thought. I look at my leadership team, it's the same. You need to get in a room. And you need to listen to voices. You need to listen to diverse voices. And that creates an innovative environment where people are invested in each other for success. And I think it is so critical.

And, you know, I've gotten to a point in my career that, you know, I'm honored and I'm thrilled to be in a place where I am that I have a platform to be able to talk about things that aren't not just important for my own business but important for all our businesses plus, our culture and, you know, our planet. So if I can talk about diversity, if I could talk about the importance of changing the trajectory of health and wellness, not only will we deliver a financial return on equity, we will deliver a human return on equity.

ANDY SERWER: Mindy, what is your business telling you about the economy right now?

MINDY GROSSMAN: So, you know, our-- our business and, you know, the reason why we have been working so hard to add more and more value for what we're providing people is, you know, people are being discreet what they're spending their dollars on. And I think brands have to be very focused today on how they're leveraging technology plus meaning to support people to leave better connected lives and be purpose oriented, et cetera.

But I think consumers are smart. And they're smart with their spending. The other thing that I think exists in our world today is uncertainty is an anathema to any kind of business. And I think we're in an environment of somewhat, more than somewhat, uncertainty. And people are looking for clarification.

ANDY SERWER: And last question, this show is called Influencers. How do you see you using your influence on the world?

MINDY GROSSMAN: Well, as I was saying before, if I can use my voice, if I can use my experience to add value to younger people, I spend a lot of time with entrepreneurs and founders and kind of giving hopefully the benefit of my experience on leadership. You know, I recently taught a module at Yale executive education on the CEOs perspective on business transformation. I speak on diversity. And what's very, very passionate not just to me but our entire company is how do we change the health trajectory of the world in an environment where there is no indication that it's improving. So how can we along with partners have a role in that?

ANDY SERWER: It sounds like a pretty good objective to me. Mindy Grossman, chief executive of WW international. Thanks so much for coming by.

MINDY GROSSMAN: Thank you, we had a great conversation.

ANDY SERWER: You've been watching Influencers. I'm Andy Serwer, we'll see you next time.