"I don't battle anymore! I uplift motherfuckers!" - GZA
Tuesday, December 02, 2008,9:23 PM
The Minority Report
Will the threat of a class-action lawsuit force advertising to finally solve its diversity problem?

Dec 1, 2008

-By Andrew Adam Newman

Black athletes, musicians and actors figure more prominently in ad campaigns than ever, but the chances that African Americans actually created those ads are pretty slim.

According to Bureau of Labor Statistics data from January 2008, the advertising field -- defined as advertising and PR agencies, as well as media, direct mail and other operations exclusively devoted to creating and delivering ads -- is just 5 percent African American, 3 percent Asian and 8 percent Hispanic or Latino. Those numbers are particularly stark considering that New York, the city with the highest concentration of ad agencies, is only 45 percent white, according to U.S. Census data. USA Today recently dubbed the ad industry "a poster child for a dearth of diversity."

For more than four decades, civil rights groups have accused the ad business of violating equal-opportunity hiring laws. In 2006, the New York City Commission on Human Rights (NYCCHR), acting on a complaint from Sanford Moore, an African American who had worked at agencies including BBDO, launched an investigation of 16 prominent New York firms, including BBDO, DDB, Ogilvy & Mather, Saatchi & Saatchi and Young & Rubicam. The agencies settled with the commission, committing to increase diversity over three years.

In the wake of that settlement, some agencies have increased the number of minorities working in their shops. And the industry as a whole is making progress, according to Nancy Hill, who became the American Association of Advertising Agencies' first female CEO this year, and whose commitment to diversity has been lauded by Moore and others. "I know the industry still has a long way to go," Hills says. "But a lot of things are starting to come together."

But the data suggest that some shops have merely donned a fig leaf -- offering bromides about how their hiring process is "colorblind," doing pro bono work for minority causes, but still hiring only those who look like them.

Soon, those shops could be in for a day of reckoning, as Cyrus Mehri, the civil rights lawyer behind several landmark racial discrimination suits -- including those against Coca-Cola (which settled for $193 million) and Texaco (which settled for $176 million) -- is now targeting the advertising business. The result could be the dropping of so many fig leaves that the industry will need a rake.

Mehri says he has been contacted by "people from inside the industry who have suffered discrimination" and that his firm will soon issue a report on African Americans in advertising. (Critics agree that the situation with African Americans is unique, since they have been confronting both racial stereotypes in advertising and the lack of professional opportunities for more than a half century.) Using Census and Equal Employment Opportunity Commission data, the report will benchmark advertising against 28 other "persuasion" industries.

Among the findings in a preliminary report obtained by Adweek: African Americans make up only 3.2 percent of advertising's upper management in the U.S., well under half of the average of 7.2 percent in similar professions.

Mehri won't say whether he's preparing a class-action suit against agencies, but even if he isn't, he will likely leave the industry more diverse than he found it. Based on the remedies he and the late Johnnie Cochran prescribed in a study about the lack of black head coaches in the NFL, for example, the league adopted new hiring policies and more than tripled their ranks within four years.

Luke Visconti, co-founder of the magazine DiversityInc, who describes the ad industry's diversity efforts as "laughable," says advertising pros should take note that Mehri "can use the legal system to grind you to bits," but that he is reasonable in crafting constructive solutions.

As Mehri turns over rocks, there's no telling what he'll find. It behooves industry insiders to know what to expect from his efforts, how some of his prior targets have responded, and how certain companies -- some of them the ad industry's biggest clients -- have embedded diversity deep in their hiring and management practices.

Mehri's track record

"I've yet to see an industry that has such a consistent record of indifference to minority involvement," Mehri says of the ad business on the phone from his Washington law firm, Mehri & Skalet. "It has a history of purposeful discrimination. They've been on notice a long time, but they just go through the motions and allow a discriminatory climate to continue. They're real laggards, and it's hard to understand why."

One of Mehri's best-known cases, originally launched in 1996 on behalf of two management-level employees against Texaco, and which expanded into a class-action colossus representing 1,400 aggrieved black Texaco employees, alleged that in hiring and promotion the company had regularly chosen less-experienced whites over African Americans. Texaco fought the suit for more than two years, but after testimony that claimed managers had referred to workers as "niggers" and "porch monkeys," and a recording emerged of an executive referring to African Americans as "black jelly beans," Texaco sat down in 1997 to settle.

Along with $115 million that Texaco agreed to pay employees, it promised $35 million to fund an Equality and Tolerance Task Force -- consisting of civil rights lawyers, scholars, retired judges and executives -- that would increase diversity at the company. It also set aside $26 million to administer salary raises over five years to black employees.

In 1999, Mehri's suit on behalf of 2,200 former and then-current employees against Coca-Cola claimed that blacks at the company were widely overlooked for promotions.

Coke's settlement of $193 million the following year was unprecedented in its heft. It was also noteworthy because Coke agreed to fund a task force, which would include a former secretary of labor and a former chair of the Equal Employment Opportunity Commission, to overhaul hiring practices. The company also agreed to tie executive compensation to diversity hiring goals and issue four yearly progress reports to the court.

Coke even asked the court to oversee its progress for a fifth year.

From 2000 to 2006, among senior executives -- the ranks which industries have struggled hardest to diversify -- Coke increased minority representation from 8 percent to 21 percent. For "pipeline" jobs a tier below, from 2002 to 2006, Coke increased the proportion of minorities from 21 percent to 27 percent.

"The work that we do and the decisions that we make all focus on inclusive and fair behavior," Steve Bucherati, chief diversity officer at Coca-Cola, wrote in response to questions from Adweek. Bucherati also noted that 29 percent of Coke's North America marketing and advertising division are minorities, as is the leader of the advertising team.

These settlements are emblematic of how vast class-action discrimination suits, by Mehri and others, gained popularity in the 1990s not just to recompense plaintiffs, but also to reshape hiring policies.

As Nancy Levit, a law professor at the University of Missouri's Kansas City School of Law, wrote recently in the Boston College Law Review, cases like Texaco's "have encouraged greater use of litigation to address deeply entrenched corporate practices." The goal often "is not damages but transformation of the company's treatment of employees" and the opportunity to "make a difference in workplace inclusivity."

Mehri's impact on the NFL was just as striking. In 2002, he and Cochran issued a report called "Black Coaches in the National Football League: Superior Performance, Inferior Opportunities." Though more than two-thirds of the players in the league are black, no team had hired a black head coach until 1989. When Mehri and Cochran issued their report, only two of the league's 32 teams had black head coaches.

The report recommended requiring team owners to conduct a face-to-face interview with at least one minority candidate when hiring in the future. The NFL agreed to adopt the rule, which became known as the Rooney Rule, after Dan Rooney, the Pittsburgh Steelers owner who chaired the league's Workplace Diversity Committee.

In 2003, Detroit Lions gm Matt Millen hired Steve Mariucci, who is white, as head coach without interviewing any candidates of color. The NFL slapped Millen with a $200,000 fine. Other team owners complied with the rule after that and while doing so might seem merely symbolic, the results were dramatic.

Four years after the Rooney Rule took effect, the NFL reached an all-time high of seven African-American head coaches. (Today, there are six.) Before 2007, no African-American head coach had reached the Super Bowl, but both coaches that year -- Lovie Smith of the Chicago Bears and Tony Dungy of the Indianapolis Colts -- were black.

"What is done in the NFL is really transferable to the business world, because at base the process ensures that those who are making decisions sit down with candidates and have a conversation about the position," says Jeremi Duru, a law professor at Temple University's James E. Beasley School of Law, who worked for Mehri's firm when it issued the NFL report. "If you sit down face to face and talk about issues of shared concern, racial biases tend to be diminished."

Where top marketers stand

One thing that often happens when Mehri gets involved in a case is that Weldon Latham's phone rings. Both Texaco and Coke hired Latham -- a partner in the Washington, D.C., law firm of Davis Wright Tremaine and chair of its Diversity Counseling Group -- to iron out a settlement with Mehri.

When it comes to the ad industry, though, Latham actually was on the scene before Mehri. Omnicom Group hired him when its agencies BBDO, DDB, Merkley + Partners and PHD were among the 16 shops named two years ago in the investigation by New York's human-rights commission.

Latham, who has worked with numerous Fortune 500 companies not just to defend them against suits, but to help proactively develop multicultural initiatives, says business-to-business industries like advertising have been slow to adapt to diversity.

"Consumer products companies that interact with the public directly are usually a lot better about recognizing the value of diversity than a business-to-business company," he says.

DiversityInc's Visconti says, "If you believe people are created equally, then talent is distributed equally. If it's all white men in your executive committee, something went wrong."

Visconti's magazine has been compiling a Top 50 Companies for Diversity list for eight years. This year, 352 firms were evaluated on factors including the racial makeup of their workforce, CEO diversity policies and the use of minority- and women-owned suppliers.

Iconic companies crowd the list: The top five this year, in order, were Verizon, Coca-Cola, Bank of America, Pricewaterhouse-Coopers and Procter & Gamble.

Conspicuously absent from the list is an advertising agency, and in eight years an agency has never appeared. (Full disclosure: Adweek currently does not employ a single person of color among the 16 members of its editorial and design staffs.)

Adweek cross-referenced the 2008 list with the top 100 U.S. ad spenders for the first seven months of 2008, and found that four of the top five diversity companies are also top ad spenders. In all, 22 of the top diversity companies -- nearly half -- were among this year's 100 top ad spenders.

P&G, the largest ad spender, has a unit within its so-called "talent supply" team that "solely focuses on diversity recruiting," according to Maxine Brown Davis, the company's chief diversity officer, who responded to questions from Adweek in an e-mail. The company, she wrote, attends professional conferences held by groups with "high-potential diverse candidates," like the National Society of Black Engineers.

Verizon, the fourth-biggest ad spender, provided a statement in response to Adweek's questions, saying the company is committed to looking like America because "customers and constituents are increasingly diverse and require diverse employee experiences." The company ties 5 percent of upper management's pay to diversity: half for promoting minorities and the other half for contracting with diverse suppliers.

How agencies are responding

Clients increasingly are inquiring about diversity on the agency side, according to Heide Gardner, chief diversity officer for Interpublic Group. "They're pushing their values along the supply chain and they are interested in our progress," she says. "More clients are including questions about workforce and supplier diversity in RFPs. I would guesstimate that at least a third of all RFPs include questions about supplier and workforce diversity."

Agencies, however, are not keeping up in certain areas.

As part of their settlement with New York's human-rights commission, the 15 agencies (down from 16, after Draft and FCB merged) reported their minority hiring numbers for 2007 to the commission, and the results appeared impressive: As a group, they committed to have 18 percent of new hires be minorities, and on average they actually hired 25 percent.

But according to data from the NYCCHR as reported in Advertising Age, the number of African Americans hired -- which had been the original issue -- were still paltry. Moore, who brought the complaint to the commission, said he was discouraged by the African-American numbers and unswayed by the bright spots elsewhere. "Blacks are not the minority of choice" for those doing the hiring, he says. And he adds that he's seen minority hiring spurts before, only to see people of color leave the industry after bumping up against glass ceilings.

The NYCCHR was not able to provide data about those agencies' 2007 hiring results to Adweek by press time.

"You don't let someone off the hook for decades of blatant discrimination because they hire a few people," Moore says. "Madison Avenue has been about supporting, subsidizing and propagating a value system that marginalizes blacks, black media institutions, black creativity and black culture."

And advertising, he says, requires neither special degrees nor a particularly keen intellect: "Madison Avenue is one of the last places where undereducated whites can still make big money." White executives for decades, he adds, have told him that diversity was "the moral issue of our time" and that their own shops had a "level playing field." To which he counters, "If it were a level playing field, black people wouldn't be rolling off the playing field."

This is not to say there haven't been concerted efforts to diversify. Over the last few years, a handful of ad agencies have hired diversity officers whose primary focus is to increase recruitment, and to structure mentoring programs and affinity groups within the agencies. The programs build a supportive culture within firms that, consciously or not, have not always supported people of color, and in so doing may be beginning to crack the glass ceiling.

Gardner was named director of diversity for IPG in 2003 and, in 2007, was promoted to svp and chief diversity officer, marking the first time a person of color has served as an officer in the company. (Last year, IPG appointed its sole African-American board member, Jocelyn Miller-Carter, who owns a Florida technology company.)

According to Gardner, a major challenge involves not just hiring minorities, but keeping them on board, since turnover with minorities is 30 percent higher than whites at IPG. "This really speaks to the issue of sustainability," Gardner says. "We have done a much better job of recruiting" for entry-level jobs, she says, "but now we have to focus on the mid- and senior levels."

Today, 20 percent of the company's junior staff are minorities, but of the nearly 100 agencies that Interpublic owns outright or partly, only two are headed by African Americans: Larry Harris in 2007 was named president of the newly formed Ansible, a mobile marketing agency that is a joint venture between IPG and mobile technology provider Velti; and Steve Stoute is founder of Translation Consultation + Brand Imaging.

Gardner says the company does not go so far as the NFL and require a diverse candidate slate, but it "recommends" it.

She also says that some, but not all, of IPG's companies tie bonuses to diversity goals, a practice some experts say is a key to achieving diversity. For a senior executive, it can account for 10 percent to 15 percent of a bonus, or $40,000-60,000, according to Gardner.

Tiffany Warren, vp and director of multicultural programs and community outreach at Arnold, says the company has achieved its level of 31 percent non-white employees without tying executive pay to diversity goals, since "what works for a Fortune 500 company doesn't necessarily work for us."

An old problem

In his recent book Madison Avenue and the Color Line, about African-Americans' role in advertising over the last century, professor and advertising consultant Jason Chambers links the historically negative depictions of black people in ads to their limited opportunities in the industry.

"If one looks at advertisements as documentaries, then the world for much of the 20th century was one in which whites enjoyed the fruits of consumption and blacks, if visible at all, contentedly served them from the margins," Chambers writes.

The book, among other things, details how civil rights groups and the NYCCHR have decried the lack of representation in the industry -- and how agencies have vowed to remedy the situation -- for more than four decades.

In 1963, the Urban League of New York released a study that found of the more than 20,000 employees in the city's largest ad agencies, only 25 African Americans were in "creative or executive positions." Five years later, a report from the NYCCHR said the scarcity of African Americans and Puerto Ricans employed at ad agencies was "a state of de facto segregation strongly suggesting discrimination."

In the wake of that report, writes Chambers, virtually every major agency instituted recruitment and mentoring programs and diversified, but the programs were expensive and disappeared because of the recession in the early 1970s.

Reached at his office at the University of Illinois at Urbana-Champaign, Chambers puzzles at why ad executives seem to see diversity as a do-gooder issue rather than a bottom-line one. The firms' leaders, he says, should be asking themselves these questions: "Why aren't we as mediators between manufacturers and consumers pushing hardest for diversity? What level of insight creativity are we not getting because of that insularity?"

Leading a horse to water

After the NYCCHR began its latest investigation of the industry, the 4A's assembled a task force that culminated in a handbook, "Principles & Best Practices for Diversity and Inclusion in Advertising Agencies." It recommends establishing diversity goals and timetables, tying executive compensation to those goals, focusing recruiting both on minority universities and minority executive recruiters, increasing retention of minority employees through mentoring programs, and hiring more minority businesses as vendors.

Adonis Hoffman, the staff lawyer for the 4A's who wrote the handbook, says the trade group can only lead horses to water. "We can provide guidance and leadership and give them all the resources," says Hoffman, "but it becomes a matter of individual corporate will."

As for the forthcoming report -- and possible legal action -- from Mehri, Hoffman says agencies should accept his recommendations. "I wouldn't advise the companies to hunker down," he says. "I'd advise them to face this head-on and see what they can do, because it's an issue that has been bouncing around this industry for a long, long time."

Hill, the 4A's CEO, says the association is doing what it can. This includes the continuation of its AAAA Foundation, which has created a number of scholarships for multicultural aspirants, including the Bill Bernbach Minority Scholarship, the John Mack Carter Scholarship and Operation JumpStart.

In January, the association announced a partnership with Howard University to place multicultural talent in management at ad agencies, help African Americans transition from other industries into advertising and work with traditional black colleges to highlight the industry.

Also, Hill serves on the board of Together Our Resources Can Help (TORCH), which provides underserved New York City public high school students with exposure to career training and opportunities in communications and the arts. (Adweek publisher and editorial director Alison Fahey serves on the same board.)

On another front, Arnold's Warren hires interns to help out with the AdColor Awards, an initiative she co-founded last year to recognize creative achievement in five categories for multicultural talent both within agencies and at marketing departments in general-market companies.

One of those interns, Andy Deaza, is now 20 and recently moved to South Beach to study at the Miami Ad School. But Deaza, who is Dominican and Puerto Rican, did not find the ad business so much as the ad business found him. When he was a sophomore at Washington Irving High School in Manhattan, "I wasn't the best student and was kind of getting into trouble," he says. Deaza, whose favorite subject was art, was introduced to TORCH by his art teacher.

He threw himself into the program, was chosen to host its annual talent program (twice), attended an expenses-paid conference in San Francisco, and interned with JWT director of trendspotting Ann Mack and then Warren. Along the way, he says, he improved his grades and stayed out of trouble.

"There were definitely people helping guide the way," says Deaza. "If it wasn't for Debi [Deutsch, executive director of TORCH] and Tiffany, I wouldn't know about the industry. For whatever reason, white people know about the industry, but we don't -- I don't know why."

Hill met Deaza not long ago.

"The night I met this kid and heard his story, the hair on my arms stood up," Hill says. "What it says to me is that you have to attack this problem from many different angles and when you see the programs come together in one individual like Andy, you know our efforts are worth it."

Asked if he had a dream client he'd like to work for one day, Deaza does not even have to think about it.

"Nike," he says. "I've been a Jordan fan all my life and I'm too young to have seen him play growing up. But those Spike Lee commercials -- man, things like that are the reason I love this industry. To be able now to be so close to making something like that is surreal -- that gives me the chills. If I ever got to put a swoosh on the end of something, I'd be a happy man."

Do clients that spend more care more?

Is there a correlation between a company's diversity achievements and its level of ad spending? Below are the top 25 firms on DiversityInc's current list of the Top 50 Companies for Diversity. If the company also ranks among the top 100 U.S. ad spenders through the first seven months of this year, that rank appears after the firm's name. As you can see, four of the top five companies on the list are also among the top ad spenders in the country.

1 Verizon Communications (4)

2 The Coca-Cola Co. (44)

3 Bank of America (59)

4 PricewaterhouseCoopers

5 Procter & Gamble (1)

6 Cox Communications

7 Merrill Lynch & Co.

8 Johnson & Johnson (5)


10 American Express (61)

11 Marriott International

12 Sodexo

13 JPMorgan Chase (71)

14 Wachovia (97)

15 Blue Cross and Blue Shield of Florida

16 Deloitte LLP

17 Ernst & Young

18 HSBC Bank USA, NA

19 Starwood Hotels & Resorts Worldwide

20 Cummins

21 Merck & Co. (74)

22 AT&T (3)

23 Turner Broadcasting System

24 Prudential

25 Monsanto Co.

Andrew Adam Newman is a frequent contributor to The New York Times whose work has appeared in New York magazine, Salon and on National Public Radio's "Studio 360 with Kurt Andersen."


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,2:52 PM
The It Factor - Interview with Marc Ecko
Marc Ecko sits down with NY Report Editor-in-Chief Rob Levin

December 1, 2008

By: Robert S. Levin

In 1984, Marc Milecofsky was a 12-year old boy airbrushing his sweatshirts and hats in the garage of his parents’ Lakewood, N.J., home. Fast forward 23 years, and that same kid, now called Marc Ecko, sits in a studio atop his global headquarters on 23rd Street in Manhattan, with artists on his payroll to do his painting for him. Marc Ecko Enterprises is a billion-dollar corporation that has survived highs and lows so drastic they would give a NASA pilot vertigo. Founded in 1993, the company produced the hip-hop-inspired designs that Gen Xers across the country had been clamoring for. Today the company consists of several apparel lines (including ecko unlimited, eckored, ecko kids, Cut & Sew, Zoo York and Avirex) and two media divisions (Complex magazine and Marc Ecko Entertainment, which develops video games). In addition to his wholesale business, Ecko has 70 retail locations and is aiming for a total of 150 by the end of 2010. The father of three (6, 4 and 2 years old) has also launched philanthropic initiatives to help underserved children in the U.S. and in the Ukraine.

While his parents’ garage in Lakewood is only 50 miles from his Chelsea headquarters, Ecko is in a whole different world. From close calls with bankruptcy and professional missteps to becoming a modern marketing innovator, Ecko is far from where he started. The success of his company, which now employs 2,000 people worldwide, does not rest solely on clever T-shirt designs. Ecko’s innate marketing savvy and relentless efforts to better understand his marketplace are the true drivers of his success.

Ecko, a Rutgers University School of Pharmacy dropout, takes pride in aligning himself with American pop culture. For example, in 2007, he bought the infamous Barry Bonds baseball — the one he hit out of the park to shatter Hank Aaron’s longstanding home-run record — for $750,000. Never one to shy from controversy, Ecko then held an online poll and allowed the public’s votes to decide the fate of the ball. More than 10 million people logged on to Ecko’s site, and the majority voted to put the ball in Cooperstown’s Baseball Hall of Fame with an asterisk symbolizing the widely held belief that Bonds achieved his record with the help of performance-enhancing drugs. Editor-in-chief Robert Levin spoke with Ecko, a direct and “illustrative” communicator, about rescuing his company from near ruin, marketing triumphs and Yoda.

RL: You started ecko unlimited at age 20. How did you get started in the fashion industry?

ME: I had a wide-eyed love for art and illustration, particularly graffiti, growing up. But I couldn’t go to write graffiti on trains since there really weren’t any trains running through Lakewood. The kissing cousin to the aerosol spray paint can was airbrush. So I tried to shine up my illustration chops.

When I got to high school, painting T-shirts was like a self-validation play among my peers because my peers would acknowledge me as “talented.” It all felt good, and it was something I did better than most, and I stood out. I excelled at art versus at academics or athletics.

After graduation, I went to Rutgers College of Pharmacy in 1990, and it really highlighted what I was good at, what I wasn’t good at, and what I was passionate about. In school, I was very average. After class, I would go paint T-shirts and sweatshirts and sell them. I had cash in my pocket all the time and I really fell in love with it. So, in the summer of 1992, I asked my dean [if I could] take a year off, and in 1993 I started my business. I went from painting one T-shirt at a time to screen printing them.

It was a typical do-it-yourself, sell-out-of-the-trunk-of-your-car kind of story. Nothing was really that unique, except for the fact that the line between my adolescent ambitions and my professional ambitions blurred together so completely that it kept a piece of my brain permanently between the ages of 16 and 22. Those years really shaped my point of view, and it’s pretty much been the core demographic that I’ve emphasized and grown my business on.

RL: How did you go from selling out of the trunk of a car to selling it to the stores?

ME: There were a lot of brands that existed when I was coming up that are no longer around or are still quite small. I remember there was this pressure — [the other young streetwear designers and I] all felt like we were presenting something that was unique. There was a lifestyle, sub- or counterculture fashion that emerged 20 years prior, and we were the second wave of that — the streetwear wave. I was fortunate to be there at a time in the market where we were all new and young, and we felt like we were part of a movement. But the difference between me and a lot of my peers was that I didn’t limit my ambitions to the group’s ambitions. I wasn’t a groupthink guy. I wanted to go for it all.

I remember my friends in the business were selling to Patricia Fields [a designer who had a store on Broadway in the Village] or Extra Large [the Beastie Boys’ store in the Lower East Side and L.A.]. I’d walk into these stores; they’d be as big as my desk, and all the T-shirts sold for $36 each. It didn’t make any sense to me. I wanted to have my T-shirts where people bought their sneakers. I remember going to Dr. J’s on Market Street in Newark, N.J., to pick up sneakers. I wanted to buy T-shirts at the same place I bought sneakers. But my peers at the time said, “Oh, my God, how can you sell there?” I’d say, “Because I want [my T-shirts] where real people are shopping and where people are going to see them. I don’t want it to be an inside joke.”

Maybe it was delusions of grandeur or maybe a little bit of a Napoleon complex, but I wanted to be the Ralph Lauren for my generation. I wouldn’t be about silk ties and peak lapels, but I aspired to what that meant in terms of the breadth and scope from a brand perspective. So I put my head down and I focused on that.

RL: So you were a designer and a marketer while your competitors were just designers.

ME: I didn’t know what the word “marketing” meant until I hired my third marketing executive. It was less about having marketing chops and more about having the common sense that the consumer was going to validate me. I was bold enough to not let anyone try to define my consumers so narrowly.

RL: You market to the 13 to 30 demographic and for a long time you were part of that demographic. As you get older, do you worry if you can still serve the 13- to 30-year-olds?

ME: My demographic is growing, but I don’t worry about getting older. Look at Bill Parcells, Tom Landry, Vince Lombardi or any great coach in history; especially coaches that were once players. How does a guy like Parcells manage to get guys a third of his age to break themselves for him? I’m going to get older. I can’t forever be in the sweet spot of my demographic, but I could compel my staff to heed some of my life experiences so that they could be more effective design leaders, marketing leaders and executives. Age and the fact that I’ve gotten to travel the world makes me more astute with the business and less emotional.

Growing Up on the Job

RL: How do you spend most of your time now? Are you providing leadership, or are you still getting involved in a lot of the details?

ME: You can’t micromanage your way to success and you can’t get overly caught up in all of the details. I micromanaged this company for the first six or seven years. I’d wonder why I couldn’t keep my really good designers. It was because I was micromanaging them and they would go work somewhere else. I didn’t have the tolerance to allow them to get some blood in their mouths. It’s no different than how I am with my two-year-old now. She bangs her lip on the stairs and I tell her, “Shake it off, put some ice on it. You’re OK.” But she’s my third child. With my first one, I was like, “Oh, my God, call the hospital. She’s bleeding!”

So, am in the weeds on everything? No. I’m more engaged with certain projects. For instance, right now we’re doing a lot of research for potential new licensing opportunities, and I will get very, very heavily engaged in the global, big idea there. Once the big idea is set, you have to let the ship ride its course. I am not going to be so arrogant to think that the first thing that comes out of my head is the absolute ideal thing for the market. No one person can do that, not even Steve Jobs.

RL: As a business owner, what do you think was the biggest mistake you made?

ME: Oh, goodness! I’m constantly making mistakes. I don’t know that there’s any one big one.

RL: In ’98, you had a big cash problem. Your business was nearly $7 million in debt. Was that one of your biggest mistakes?

ME: I almost went bankrupt, but that wasn’t my biggest mistake. They were dumb mistakes: not being aware of supply side, not knowing how to ship and receive, spending more than I had, not knowing how to keep a budget, and not knowing how to be unemotional about design.

When I think of those years of being $6.5, $7 million in debt, I don’t reflect on those as mistakes. I find them to be the most relevant parts of my learning experience, because I was forced to learn how to do more with less. When you don’t have [resources], it forces you to innovate. You have to compete with an idea rather than with the dollar, and that’s a discipline we always try to condition ourselves on. It’s still in the culture of this organization; even though now we are — from a gross sales point of view — quite large, we still find that the best ideas come out of this organization when people are really forced and reminded to innovate with less.

The biggest mistakes are those moments when you get a little drunk [on success] or when you think you can walk on water, and you fall into that [pattern] of repeating the same mistakes. That’s the biggest mistake that I’ve ever made — allowing myself to repeat my mistakes.

Creating Culture

RL: You mentioned earlier that you have to really focus on who your customers are. How do you instill that into your corporate culture?

ME: There are mechanisms in place that attempt to do that. We’ve got daily sales reports that go to all the key managers and give people daily updates on what’s selling and what’s not selling. This provokes conversation between designers and sales people. Then that discussion becomes part of the social context [at the company]. That’s a best practice of the industry — that’s not something we invented.

We’ve also created a culture within the marketing team that encourages them to always look for that next big crazy idea, of which probably 5% actually gets executed. But when that 5% actually happens, people get a tremendous sense of ownership, a tremendous sense of building something from nothing that wasn’t necessarily on a business plan. So there’s a 95% tolerance to do all this wild stuff that’s far out of the range or the scope of our plan or capacity or budget, but we allow it, we encourage it, we cultivate it.

RL: How do you cultivate that type of environment?

ME: Wild ambition is quite stimulating. My business partners and I are serial entrepreneurs and we’re not going to limit ourselves. When I brewed up the idea for Complex, I was way deep in debt. That idea could never have manifested its way to the top if this organization was publicly held or owned by a larger company. It probably would have been suffocated and stifled early.

RL: Given the culture of the company, are there specific qualities you look for in employees?

ME: We don’t have the most refined human resource process. Maybe the parent in me, the nurturer in me, wishes that we could be better at vetting, better at nurturing, but we don’t have that kind of a culture. We push people out of their comfort zones. People that don’t have the chops to deal with a little bit of anxiety aren’t going to be able to swim here. They’re going to sink.

We just try to let employees know coming in that it’s going to be disruptive, that things are fluid. The sands are going to shift, not because someone’s trying to undermine you or for some emotional reason, but because that’s the way the industry is. So people who aren’t adaptive don’t necessarily do well here. The multi-disciplinarians are the ones that are the most useful, for sure.

The Virtues of Retail

RL: What went into the decision to get into retail?

ME: Best practices of other brands tell me I have to do it. [Retail] was out of my comfort zone; therefore, I needed to make it my comfort zone. With retail, you control your own destiny — everything from controlling the marketing message at the point of sale to getting faster and more accurate feedback on the product. Having your own retail stores gives you an amazing aptitude to correct your product range. You could test something in real time in the market. Also, we can present our own brand in a more meaningful way than anyone else can present it for us. I only wish I did it sooner.

RL: Did your company have a lot of experience running retail?

ME: Zero.

RL: So how did you tackle that?

ME: You screw up. You have to have the tolerance for screwing up. There needs to be a line item in your budget that says, “Screwing up.” You might call it something prettier for the bank, like miscellaneous. But you’ve got to pad [the budget] and you have to have that tolerance.

I started the [retail] business in outlets to cut my teeth. If you look at Ralph Lauren’s numbers, his predominant retail business comes from his outlet business. [Outlets] are less cost per square foot and so I could take my time to figure out: Do I have the staff for this? Do we need to hire regional managers? What about computer systems, restocking from my warehouse as I react to the department store versus my own stores? Slowly, we kept tweaking, tweaking, tweaking, and finally we were ready for our first [full-price] store. Outlet and [full-price] are two different things, but you learn the basics, like working your way up to a black belt.

RL: How did your wholesale clients feel when they heard that you were going into retail?

ME: They’re fine with it. In fact, many of them were eager — especially the bigger box retailers — because it helps strengthen our brand equity. It helps put the flag in the ground that you’re not going anywhere.

Next Generation Marketer

RL: In addition to the fashion brands, you have Complex magazine and Marc Ecko Entertainment. Do you see those as tied into the brand?

ME: I see them as related. I don’t operate like an ambassador brand, like Nike. Nike owns all things sports — from Tiger to Jordan to Bo Jackson. That’s an ambassador brand. They came up during the ’70s and ’80s, when you could run a TV spot and actually make a dent. In those days, you could have a “revolution moment” like a Super Bowl ad. Those are best practices of another era, another time.

In this day, when media is so atomized and disparate, how do you communicate [to your market]? How do I make a dent? Some of the laws of authorship and branding have changed. It’s less about the heavy-handed branding and more about the authorship. I want to convince consumers that I can author other things and I get credit for being more than just a one-dimensional fashion designer.

RL: With Complex, for example, how do consumers identify it with Marc Ecko if doesn’t have “heavy-handed” branding?

ME: The core readers of the magazine know that it’s us. Besides, how can I be heavy-handed about my brand and expect Diesel to advertise inside there? The first six pages of ads in the magazine are competitors. So I needed to back away in order to make the advertisers comfortable. How do I transcend being just a designer? By doing something more than what a designer would do. That’s what Complex is about. It’s the same with Marc Ecko Entertainment. I’ve got the license for Dexter, the Showtime TV series, and we’re creating a [video] game that comes out in ’09. We’ll create an iPhone game also. But it’s not like players will be Dexter killing a guy wearing an Ecko T-shirt. We’ll have a small mention on the back of the box, but not in the game. Enough consumers will know it’s Ecko. It’s like a “Six Degrees of Marc Ecko” thing that I’m trying to create; I think it could be meaningful to the brand.

I could have just taken those resources and bought big outdoor billboards, but would it effectively create the same kind of emotional transaction as being a guy who could author a moment of pop culture? Who could author some new consumer product that’s kind of cool and sometimes very logically associated to the brand? It’ll make you scratch your head and think, “Wow! I didn’t expect that from him.”

RL: I imagine that people want to partner with you all the time. How do you decide which ones you’re going to go forward with?

ME: The most important thing [for] any designer, creator, business leader or anyone who is holding the pen to make the transaction to fund something is to decide what you don’t do. That’s the hardest thing.

RL: Marc Ecko Enterprises is a privately held company. Any plans to take it public or to exit?

ME: I don’t know. I can’t really see further than three or five years out. I don’t see any kind of exit in the short term.

RL: Why not?

ME: Because I think I’ve got a lot more to achieve. I think I’d be underselling myself. Maybe it’s a little ego or maybe it’s real. Also, I’m a little afraid to work for someone else and I’m a little afraid of not doing anything at all. Actually, I’m a lot afraid of that. Hey, I’m young.


RL: Can you tell us about your philanthropy initiatives?

ME: I’ve got one organization called SEE, Sweat Equity Enterprises. It is a design education curriculum program for underserved kids. We take in a new batch of ninth graders every year. It’s amazing to see that three or four weeks of Photoshop or Illustrator [design software] classes changes the kids’ perceptions of what they could do with their doodling.

The other organization we have is Tikva Children’s Home in Odessa, Ukraine. My partner, Seth [Gerszberg], found the orphanage on a trip to Russia about seven or eight years ago. This orphanage was being run so badly, and these kids were just all over the streets. We could see what it could become. Tikva means “hope” in Hebrew. I think it was probably the first hostile takeover of an orphanage in history. Now we’ve got almost 400 kids in the program. Being in the philanthropy business is messy, man. In business, there’s no room for emotions. In philanthropy, you got to tolerate emotions, so it’s heavy stuff.

Pop Culture Enthusiasm

RL: Why did you buy Barry Bonds’s recordbreaking baseball?

ME: I bought the baseball because it was a great pop culture moment. People have really strong opinions about that ball. During Barry’s race up to breaking Hank Aaron’s record, you just felt a feverish tone. It is a rich debate that is loaded with so much meaning. And just like America, baseball has a lot of ugly bits and pretty bits and bits that you begrudge and bits that you hold up on a pedestal. It’s not perfect. And I thought that that was something really kind of cool to engage in. It would be in the spirit of watching American Idol.

It’s not the first pop culture [object that I’ve purchased], although it was probably the larger scale in terms of the transaction. I own Yoda. A lot of people don’t know that, but I got the original Yoda sculpture and model that they built all the casts off of.

RL: What does that have to do with Marc Ecko?

ME: It shows people the way I think. Maybe it’s a little bit of the P.T. Barnum in me. Maybe it’s the populist in me. Maybe it’s the narcissist. Maybe it’s all those things.

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