I recently went one-on-one with Steve Abrams. Steve is the former CEO of Magnolia Bakery and the co-founder of TiCK MiTT.
Adam: Thanks again for taking the time to share your advice. First things first, though, I am sure readers would love to learn more about you. How did you get here?
Steve: The biggest challenge I had happened the year after I bought Magnolia Bakery. At the time, I owned a construction company building luxury homes with many high-profile clients such as Bruce Willis, Samuel L. Jackson, Eli Caloway, and Jeff Gordon.
At the time, I had an acquaintance who owned Magnolia Bakery and was given the opportunity to buy it, which of course, I couldn’t turn down and took it over on January 2, 2007. I immediately brought in an incredibly competent friend of mine who was a baker with an accounting background to be the COO. It turned out to be a smart move as a year later, on February 8, 2008, I contracted a deadly bacterial infection that no one could figure out, and it was five years before they found a cure. My daughter Olivia, who I’m now in business with, was nine years old at the time and watched as I was slowly dying going from 160 pounds to 120 pounds, creating physical exhaustion and loss of mental capacity.
Now, I had two businesses, Magnolia Bakery and Fountainhead Construction. I had made two employees in the construction company junior partners to run the day-to-day as I started to scale Magnolia, and I eventually made a deal with them to buy the company from me. While under contract, they tanked the business, walked away, and left me with a few million in debt and lawsuits just as I became too incapacitated to come back in to save it.
During this time, I had also just opened up the second Magnolia Bakery on Columbus Ave and had put a deposit on another store in Rockefeller Center, draining my bank account, not knowing that I would soon be too sick to work. But I had also made the COO at Magnolia a junior partner, too, and it was a very different experience as she was able to take on the responsibilities of running the business seamlessly. So I had one business that was under assault from clients, vendors, and banks, and another one that needed money to finish the third store, which I didn’t have, and ended up borrowing over $700k from friends and family to complete the Rockefeller Center store.
So I went from spending 12 years building one of the premier construction companies in New York City to fending off lawsuits I didn’t create while Magnolia was thriving in good hands, all while I was quickly sliding down a bad rabbit hole with my health and no cure in sight.
Adam: In your experience, what are the key steps to growing and scaling your business?
Steve: You must recognize that no one does this alone. It’s all about a good team and leadership. I’m very good at putting together high-performance teams, recognizing talent, and getting out of the way.
I have a healthy ego, but don’t have any jealousy regarding other people’s talents, which allows me to hire incredibly competent people. I figured that out a long time ago.
The interesting thing about scaling Magnolia was that my business background was in construction, real estate, and hospitality. These were three disparate industries that had no real relationship to each other, but when I acquired Magnolia, it became apparent that those were the three things I needed to scale the business. I needed to find great locations with good leases, get them built quickly and not over budget, all while setting up the food operations. I was able to do all three things because of my background, and that is what I needed to really take the company global.
Adam: What do you believe are the defining qualities of an effective leader?
Steve: I have never really given this question much thought in the abstract. I think the first thing that comes to mind is that you have to have a clear vision you can articulate and lead with integrity, empathy, and understanding. You have to bring your own passion to the table about the business’s goals and path that is infectious and inspires others to follow with the same enthusiasm.
I understand that everyone who works for me has a life outside of work, and I’ve never wanted anyone to ever miss their kid’s school play, graduation, or any other significant life events. You have to recognize that sometimes people have needs that are greater than the needs of your business, and I always strive to allow people to achieve a healthy work/life balance. If you stifle that, you only create resentment. However, by allowing it, you create a bond that is meaningful, which helps get the best from them.
It is also important as a leader to be careful when you’re building your team to recognize quickly who is not a good cultural fit or causing problems, as one person can create instability in the whole office. As a leader, you’re not always on the ground, so you need people who trust they can come to you with honest feedback, even if you yourself are the problem.
Adam: How can leaders and aspiring leaders take their leadership skills to the next level?
Steve: For leaders to take their leadership skills to the next level, they need to recognize that everything in business and life is a lesson, and I’ll use my daughter Olivia as an example. Good or bad, you can hate what you’re doing, but there is a lesson in there somewhere. Olivia went to work for a financial publication and had two bosses at the time who treated her terribly. They had her doing tasks that she felt didn’t advance her skill set, were demeaning, and she hated it. She wanted to quit, but I explained to her that she will run into people like this her whole career, whether they were intercompany, clients, or vendors, and she needed to figure out how to navigate it.
Aspiring leaders should look at ways to give back, as it is incredibly rewarding, and I’ve always found valuable lessons for myself in doing so. Most leaders have had someone in their career either guide them or inspire them by how they run their business or how they carry themselves in general, and those lessons are important to pass along.
Adam: What are your three tips applicable to entrepreneurs, executives, and civic leaders?
Steve: My three tips in a nutshell are simple. They are:
- Understand the nuances of your business, that is where time and money get lost.
- You need to have a great team around you, as I’ve explained above.
- Entrepreneurship starts and ends with tenacity. You need to have it in order to be successful, whether as an entrepreneur, executive or civic leader.
Adam: What is your best advice on building, leading, and managing teams?
Steve:
- Be consistent. It’s key for the brand, the vision, and for scaling.
- Have a vision and articulate it properly. This is intertwined with being consistent.
- Hire adult professionals who know what they are doing and get out of the way. Let them do their job, as the worst thing you can do is micromanage them. Give them direction and let them work their magic.
Adam: What are your best tips on the topics of sales, marketing, and branding?
Steve: Branding is quite simple, but hard. It’s the consistency of the messaging. Once you start to get traction, you see a lot of opportunities, and of course, you want to grab onto them all, but it’s easy to lose focus. Everything has to work towards the greater goal, big or small, and has to represent the way you want the brand to be seen. Sometimes opportunities look good in the short term, especially for financial reasons, but the key is keeping brand consistency through the good and tough times. For example, we are building a brand right now with TiCK MiTT, and price parity is important, especially when you’re building trust in the community with retailers and consumers. We recently were approached by someone who wanted to buy 40,000 mitts which would have been our biggest order to date and would certainly help our cash flow but they wanted to discount the mitt to $15.99 which is not consistent with the current retail of $19.99 and it would have undone all of the trust we’ve built with our current retailers who play an integral part in building the brand.
On sales, I have personally done the sales in every business I’ve started and am quite good at it because I realized early on that there is no such thing as a good sale without the fulfillment of the promises. These two things have to go hand in glove.
On marketing, I’ve been lucky because with most of the businesses I’ve been in, the marketing was fairly straightforward and part of an old-school continuum that was tested and successful. But now social media has changed the landscape and being the boomer that I am, I leave that gamet to people who understand it best, although I am always watching for brand consistency.
Adam: What is the single best piece of advice you have ever received?
Steve: Wow. This is a tough question for me. Having taken some time to really think about it I think the best advice I have ever received was to treat your employees like your customers. If you foster a healthy work/life balance for your employees and let them see their kid’s graduation or celebrate an anniversary, it will come back to you in myriad ways, and that’s the type of work environment you want.
