Growth with Entrepreneurial Employees with Sean at Affordable Luxury Group

Developing entrepreneurial employees may scare you. This is more than just embracing intrapreneurs. Entrepreneurial employees have the ability to create massive value for the organization. Today’s guest is Sean Elan, President of Affordable Luxury Group. This company was #55 out of 5,000 on the 2018 Inc List. They had a growth rate of 4,797 percent in the previous three years. Sean and I talk about getting employees to shift to being proactive. Entrepreneurial employees are also able to contribute more to the bottom line and product innovation. Join us to discuss the power of entrepreneurial employees.

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Sean Elan: The Transcript

Target Audience: Sean is the President of Affordable Luxury Group. Affordable Luxury Group was honored to be ranked No. 55 on 2018’s Inc. 5000 Fastest-Growing Private Companies in America, and the No. 5 Fastest-Growing Private Company in New York.

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Disclaimer: This transcript was created using YouTube’s translator tool and that may mean that some of the words, grammar, and typos come from a misinterpretation of the video.

Gene Hammett: [00:01]

Hi Sean. How are you?

Sean Elan: [00:02]

Doing well, how are you doing?

Gene Hammett: [00:04]

I’m fantastic. I’m excited to talk to you about developing employees and growing a fast-growing company. I’d love for you to kind of let our audience, know a little bit about you and who you serve.

I found that affordable luxury group about five years ago and we’re really a fashion company that just owns brands but also operates them. So we designed, we manufactured, we just showed you all over the world. And you can see we ranked number 55 and the 2018 list, which we’re really proud of and you know, continuing to grow and grow. But I’m at the end of the day, it really comes down to our team because as one of the founders, there are two others as well. We can only do so much. So our success and our future are really built on whether or not our team’s going to be able to execute and overachieve because we try to say is that our competitors are gunning for us. They’re trying to figure out what we’re doing. And the second you get lazy and you let up, you’re going to take that market share. So you have to always realize that you’re the underdog backed up and you have to fight every single day. And that’s something we always try.

Gene Hammett: [01:10]

Your sound’s cutting in just a little bit.

Sean Elan: [01:14]

Let me see if…

Gene Hammett: [01:14]

I can hear you. So it’s intermittent. We’ll try it again. Are you Ready?

Sean Elan: [01:20]

Yeah.

Gene Hammett: [01:21]

We can clean up a little bit of stuff in post, but I’m going to dive right back in.

Sean Elan: [01:27]

Sure.

Gene Hammett: [01:27]

You mentioned team. How many employees do you have, Sean?

Sean Elan: [01:30]

We have just under 30 people right now.

Gene Hammett: [01:32]

So it’s a small team, but you’ve got some massive growth. What do you think is one of the core factors of being able to do so much with so few people?

Sean Elan: [01:44]

Yeah, it’s funny to me, 30 people is a massive amount of people. Now I look at our competitors that have a hundred people and I can’t understand what they’re doing all day. I mean, so I think 30 is a huge amount of people. Um, but I think it comes down to hiring a mindset of being the underdog. And you need to find the chip on somebody, on everybody’s shoulder, in the company. And it’s really important. When I interviewed people, I say, what is the chip on your shoulder? What do you have to prove? Who is your doubter? I need you to think of them every single day. Who’s the person that doesn’t believe that you can pull this off that toy? I want you to think. So we’ve really tried to get inside and have those honest conversations because I have a chip on my shoulder on behalf of the age of people that I’m competing against. I have something to prove and everybody has a story in some way or another, and we really want to get that out. We want to embrace it. I don’t want people to hide that. I want you to bring it to the table and use that as your fuel. I want you to think of every hater in the entire world, and I want you to use that as fuel. So to me, I think 30 people is an enormous amount of people. But clearly not, I mean, clearly we’re at that point today,

Gene Hammett: [02:52]

It’s all relative. I grew up in, my dad worked at Delta Airlines and I never, you know, I knew they had thousands, thousands of employees and I still wonder why they have so many.

Sean Elan: [03:03]

But it’s true.

Gene Hammett: [03:06]

Well, I know when we were talking last week kind of deciding what to talk about today and what really drives growth, you have this core idea that’s alignment with what I believe too, which is you think like an entrepreneur, your founders think like entrepreneurs, but you encourage your employees to think like entrepreneurs too. Why is that important to you?

I think there’s nothing worse than thinking inside of a box. And it’s like one of those things that people say and you know, I don’t want to just be a sound bite and just say the same line everybody talks about. But the idea that there’s always a solution, you just have to figure it out. There’s always a way to solve a problem. And it’s kind of, you know, I have a family of lawyers. I think lawyers are like the worst thinkers on the planet because to them the law says x and therefore tech, right? It’s like ample conversation with them. And it couldn’t be farther than that with an entrepreneur. So what we try to push for our people is to find the solutions. There’s always a solution, no matter how bad a problem, whether it’s tariffs today, maybe it’s 40% tomorrow, whatever it is, we’ll always find a way around. So it’s really pushing people to think outside the box and realize that there’s always a solution. That being proactive and not reactive is really the name of the game. So if you’re already reacting to a problem, you’re too late. The question is, why didn’t you think that this problem was going to happen? So the proactive piece is really important.

Gene Hammett: [04:29]

Well, I’m an entrepreneur. I’m not gonna apologize for it because I think it really does serve me because I, one of the things I believe as an entrepreneur is that I don’t deserve anything. I have to create my way in this world. I’ve never, I mean I’ve gotten a paycheck before, but I can’t remember. It’s probably been 20 plus years. When you have employees that believe that they have to create their value, I would imagine that has really served you well in the growth of the company.

Sean Elan:  [05:01]

Yeah, I think it’s, it’s an interesting conversation because, you know, we’re wildly transparent here, but I think that explaining value, explaining that your salary when you’re hired just to simply do the job you’re doing. So if you just knock it out of the park and do it your knowing you earned your salary, but that’s not how you grow, right? That’s how you just keep your job. So the question is how do you grow? So you have to nail what you’re doing everyday and then go over the chief and say, look, I need more. I have more time. You know? So to us the poison is somebody that stretches their day out and takes all their responsibilities instructors did from their nine to five, whatever the hours are. But really the winner, the home run is the person that says, look at three o’clock, I’m done.

Sean Elan: [05:46]

I need more to do. I love my time. And that’s always the difference. I remember when I was an employee back in the day for the first they, I remember I went to the owner and I said, look, I need you to give me more work to do, or I need a pink cup. He said, what the hell? I’m not worth what you’re paying me. So you either need to give me a pay cut or you need to give me a lot more responsibility. It’s only one of the two. And because I was really young when I was really trying to say it was really just, I needed more to do. I’m really passionate, I’m nailing everything. Give me just give me more. It came out wrong. Thank God he realized what I was trying to say. But it’s really that hunger that you’re looking for in people that are saying, look, I’m going to walk in at whatever time.

Sean Elan: [06:28]

I’m going to get my job and then when I’m done, I’m going to walk in your office and say, look, I need more things. So that’s where you really create value as an employee and then it comes back to you and you’ll get the raises and the promotions and the bonuses. And then…

Gene Hammett: [06:42]

Some of the people that don’t really understand entrepreneur spirit would go to, um, this whole concept of, well, people that think like entrepreneurs are very me focused instead of company focused. And, and you know, another way to say that is they just don’t collaborate the way a few, you know, the work is required. What do you say about that to people that are hesitant to encourage this entrepreneur spirit?

Sean Elan:  [07:06]

I just don’t think it’s understood. I think there’s always going to be like, just don’t understand what it’s like to be like this. And I hear about it in the news and when you hear about politicians talking about whatever it is, I can’t believe it. CEO is making x, but they don’t understand the pressure that’s on the entrepreneur now. And that that’s something that in some sense we brought on ourselves, right? I mean all the pressure of making sure people are taking care of on our shoulders. And it’s something that’s on my mind all the time, making sure my people are growing, making sure they’re happy, I want to know you know, what’s going on in their personal lives and them in relation to breaking up and they met at their boyfriend whenever it is. We try to encourage those conversations but it’s really in my eyes a bigger thing. It’s more about just getting to know exactly who’s in your office, getting to know them on a personal level and having complete transparency both on the professional side but also on the personal side, getting to know who they are.

Sean Elan: [08:01]

I feel like back in the day it was something that you really wouldn’t want to go there. He personally at home and keep a professional in the office. I think that especially with the newer generation, it really blended in like you can tell the people that walk in and have a terrible day because of a fight with their significant other the night before. Those are the conversations we want to have. Let’s work through it. Let’s solve that problem too because I know the second we solve that problem, you’re then gonna have the weight off your shoulders, then refocus on work. We try to encourage the full transparency, both professional and personal, which I think is, it really is part of the entrepreneurial spirit in some weird way, but the people like you and I, the average person doesn’t understand our mind. They don’t understand that we walk into a restaurant that we started looking around and saying, what would we do differently if we own this restaurant? The second you walk in, you’re walking into a coffee shop and without trying to figure out 10,000 ways, I would change it if I owned it. And that’s kind of like a weird burden, but also the fun of it. So I think our mindset’s just very, very different. But it’s fun for us.

Gene Hammett:  [09:01]

Sean. I was pretty excited. We’ve been doing this thing with my son who’s 12 and we do a picture at the beginning of school in the picture at the end of school and he’s been selecting what he wants to grow up too. And he’s always picked something like an lete or, or something else. He picks scientists last year and I’m just like, okay, that’s interesting. Right? With that goes, and then this year he picked entrepreneur and I was kind of beaming, but I said, you know, why do you wanna be an entrepreneur? And he’s like, cause I don’t want a boss. When you think about employees that had this entrepreneur thinking, you know, one thing that goes to mind is they might leave you. So when you think about investing in them and really developing them as people and really connecting with them, and they could leave you someday, but they stay instead to work on the mission and drive the company forward. How do you actually, how do you wrestle with those two?

That’s a good question. You know, when it’s happened, we’ve had good people leave that haven’t gone to competitors. They’ve left the industry and gone to a non for profit for example. And I always feel like I let them down somehow. You know? I think it’s one of those things where you say, you know, you try not to take it personally. But it’s great to say, but you know, when you’re building a company and you’re, you’re putting money from your pocket to somebody else’s and trying to build them and giving them opportunities to grow, um, it’s certainly heartbreaking when it happens, but to be totally honest, I, it’s one of those things where if it happens, I just press on and I just, it’s just a new day. It doesn’t matter. So it’s heartbreaking in one sense, especially the people you really care about. But they also have to make their own decisions and if they believe that they have a better chance elsewhere and you have to be supportive in some sense, you know, I still text with the people that left and it’s heartbreaking, but honestly the next day I walk in, it just never happened. I just push up.

Gene Hammett: [11:04]

Is it better to continuously invest in them and them with the risks are present or not investing?

Sean Elan: [11:12]

You know, it’s kind of like relationships who are just cause you get broken up with a couple of times doesn’t mean you stop trying to go find somebody, you know your friend. Right. You have to be able to take the punches. So yeah, you keep investing in them. Absolutely. You go forward, you put your heart and soul into it. You do everything you can to build them up and make them stronger if they want to take that somewhere else. And that’s just, that’s part of the game and that’s okay. But 1000%, you keep investing in them. Absolutely.

Gene Hammett: [11:37]

When you think about this entrepreneur spirit, you know, one of the ways to look at the opposite side of that is a kind of people are leaders who are micro managing employees. I’m sure that you don’t want to be micromanaged. You don’t want to micromanage other people. Because it just has such a negative impact. I think. Overall, how do you catch yourself to let them really make their own decisions and let them kind of move forward and fail if necessary? If it comes to that?

Sean Elan: [12:06]

I think our company is probably has the opposite problem. We probably don’t manage as much as we should. So we are the furthest thing from micromanaging because we’re short on time and you’re like you said, we only have 30 people. To me it’s like, oh my God, we have all these 30 people, but they have the opposite problem. We probably don’t manage enough. If you’re being micromanaged at your first sign, you’re probably heading out there. It’s a red flag. If you’re being micromanaged, that means the company or management doesn’t believe in you enough. You’re able to do your job on your own.

So for me, we’ve never had that problem. We don’t micromanage. If anything, we’ve run into issues where we’ve hired people who are really senior level, really experienced, and we’ve left them alone with the expectation that they’re going to make things happen and make it organized and built structure. There’s no structure and things like that. And we’ve been caught in that situation where it hasn’t worked out well. Even just recently. So we, we are the furthest thing from, I can’t talk to micromanaging at any part of that because we are the, or not that company. I’ve been at an employee in that situation, I’ve seen it around me. But I would say that it’s much more of putting the person in the deep end and saying, let’s see if you can swim, you know, we need you to sort of, so it’s,

Gene Hammett: [13:22]

I think that’s one of the big differences between people and I wasn’t suggesting that you micromanage, but I had a conversation with someone the other day that said, they’re in a situation where they’re being micromanaged. And I just, I shake my head going, I wish I could get ahold of that, that founder or leader and go, you know, what are you thinking? Because that’s no way to build a company and you realize that you need to let them think for themselves and fail forward. When you think about them, you know, making a decision without weighing in on you and whatnot, does that kind of light you up knowing that they took the chance to do it or does it scare you continuously?

Gene Hammett: [14:01]

I think probably a combination of both. You know, when I see, um, entrepreneurs who have, who are really micromanaging the people around them, um, I think that those are the people that go to and attend. You have to hire people that are smarter than you. So we always try to do, what I try to do is really build people around me that are smarter than me.

Sean Elan: [14:22]

You know, look, I’m the first one and a meeting to say, look, you tell me. I mean you’re the marketing person who telling me if we’re doing this the right way, you telling me what we should be doing. So, I think that that’s where the situation changes where those are the entrepreneurs that don’t believe they should be hiring someone smarter and you should only hire people you believe should know a bit more than you do in those situations. Now, as the owner, you know, I’m always going to have the final say, I’m going to know certain things outside of that room that they may not understand that will change our decision on certain things. Or for the most part you know, I really rely on people to be able to bring your expertise to the table. So, you know, it breaks my heart to hear about people that are being micromanaged. But I’m like your friend, like you said you were talking about, um, to me it’s about managers or founders that are either in secure don’t understand yet, in order for you to be better, you have to hire people.

Gene Hammett: [15:13]

What you’ve mentioned hiring quite a few times through this. And I know the whole adage of shit coming in and leaves you shit coming out. And if you think about from a company standpoint, you want to hire great people so that they, when they’re great. What have you learned in your journey about hiring that you can share with us about this entrepreneur spirit?

Sean Elan: [15:34]

I’ve learned it is very hard and there’s no way, there’s no right way to do it. I mean, you can have everyone in the company meet them. You can have 15 interviews. Um, there’s just no right way to go about it, you know, and there are people who we’ve hired who we thought, you know, we’re not so sure and they’ve ended up being all stars. It’s something that was hard and thought all this as an all star ups not work out. So what I’ve learned is that there’s no way to know for sure. And you can try to line up things like culture and their background and um, and their passion and their level of excitement. And you can try to align all those things up. It is very challenging. So we’ve gotten to a point now where we’re moving now to almost like a almost like a temp hire in some sense or come work with us for a couple of weeks. Okay, let’s make sure we’re both comfortable. It’s like are both happy and then if we are, let’s go to full time. That saves you the time on the energy, even getting them up to payroll to just to take them off of payroll, giving them benefits, just to get them off of them.

Gene Hammett: [16:32]

Yeah.

Sean Elan: [16:33]

So we’ve changed that, but it’s very challenging. And maybe different industries are better if you’re in tech. I don’t know anything about that world, but it’s easier for users, money, all where they’re similar talent. But in our role as students to be very careful.

Gene Hammett: [16:47]

When you think about this entrepreneur spirit, it really is about developing them once they’re there. So what mistakes have you made in this journey that you could share with us to help maybe put a light on it so that we don’t make those mistakes? If we encourage this entrepreneur spirit.

Sean Elan:  [17:03]

I think we probably needed to be more hands-on. I think that part of our challenge was, like I said before, how we kind of just threw people into the deep end and it shouldn’t, that their experience and back on vehicle, we probably should have held their hands a little bit more. We probably should have had meetings. You know, it’s weird when you’re a company that’s very small and you start growing and all of a sudden you realize, oh my God, we need to actually have any. And we’re kind of going through that now. The last few weeks we’re actually, we just never had meetings. We were always a smaller company. And now we realized that we actually need to start having meetings. And it sounds so obvious, but these are the things when you’re so busy in a day to day. So I think with new hires, but I would say is hold their hand more than you probably would want to at the beginning. Have more meetings once a week, twice a week as checkins. How are you doing? What are your challenges? Are Your wins? What are you going through? What can I help with? That’s something that I think we could’ve done better with in the past that we’re now working. But that’s definitely the biggest thing for us. Our handle a little bit more.

Gene Hammett: [18:01]

So you mentioned how also transparency and brutal honesty play an important part of the company. How far do you like really push that? Because I know the lot of companies are going fast. Like you really value transparency at many levels. How far do you guys push it?

Sean Elan: [18:20]

We put it pretty far. You know, I mean, I’m a fan of Jack Welsh and all of his books and how we ran GE, you know, he was really, one of the first time CEO is really transparency and just brutal brutally candidates. So that’s something we take it pretty far. I mean, we’ll sit people down and say, look like we have a very real problem, wants you to grow. We want things to work here. You’re not going to be here if you don’t change these three things. And really just address it head on. Or if someone does an eyeroll, somebody else rests right away. We’re going to get both people into the room and we’re going to have them hash it out on the spot. Because what I always say at the end of it is now we can all forget about this.

Sean Elan:  [19:03]

When we walk out of the room, it’s over. We have the conversation, it was addressed. Everyone got off their chest, how they felt, and that once we walk out, we move on and we forget it even happened. So I think that’s really important. We’ve definitely found that the communication piece from employee to owner is very challenging. And I don’t know if they’re having the same challenges, you know, in their personal lives with communication. But communication seems to be the biggest thing. We need to focus on staff. We’re hearing from them to us, right? It’s easy for me to pull someone aside and hey, you have to fix this. What’s hardest for them to walk into my office and say, this is how I feel, and we try to stress in the people. You have to have the courage to walk in and I’m not going bite you. Walk in and tell me what, what do you not like about what you’re doing? What can I do to make it easier? But is it that you didn’t think was gonna happen, but we hired you. That happened. And we need employees to be able to have the courage to come to us directly and push it back on. Not just as much as we go to them and say, Hey, this is what I want change. This is what I’m happy with. This is what I’m not happy with. So transparency really goes both ways.

Gene Hammett: [20:09]

Yeah. And I totally see that, but most people are too afraid to do it. So I really, hopefully they’ll take this because I want to leave you with this. You guys have grown so fast and you’ve done something that maybe your competitors are looking at how you’re doing it. What is the biggest impact that your company’s had overall with letting people think are encouraging them to think like entrepreneurs?

Sean Elan: [20:36]

You know, I don’t know. I think for me, I don’t know why, but that underdog story, it’s always what it resonates with me or that small company in a big industry did you against companies that have a hundred, 200, 500 employees that have raised money or sell funded, we’ve been cashflow positive since we started. And we’re just thriving because we all feel like we have our backs up against the wall and we all have that chip on and no matter what happens, it doesn’t matter if tariffs are 100% doesn’t matter of every store closes, we’re going to be that last company standing at the end of the day. That’s, that’s our message here. So, you know, that’s all I can really say about that. I just loved the underdog narrative. I think it’s so important we’re showing.

Gene Hammett: [21:19]

I appreciate you being here. Affordable luxury group is really an impressive company that’s grown fast. So thanks for sharing your insights here on the podcast.

Sean Elan: [21:28]

Thanks to you. I appreciate it.

 

Disclaimer: This transcript was created using YouTube’s translator tool and that may mean that some of the words, grammar, and typos come from a misinterpretation of the video.

 

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