Latest / Success Story with Scott Clary / Lessons - Why I Left $140M Corporate Job | Thomas Vozzo - Former ARAMARK CEO

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Lessons - Why I Left $140M Corporate Job | Thomas Vozzo - Former ARAMARK CEO · Success Story with Scott Clary

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  In this lessons episode, explore how mission-driven leadership and discipline business strategy
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  combine to create lasting impact. Discover how non-profits apply for profit fundamentals to build
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  sustainable revenue, understand how social enterprises balance financial discipline with human
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  centered purpose, and uncover why principled leadership decisions drive culture, growth, and long-term
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  results. You know there's a there's a lesson there too and I'm not sure I can't remember the
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  exact framework but when you when you're giving somebody an opportunity a good leader knows how
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  to put that opportunity just right outside their comfort zone of their skill sets that they can
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  level up an upskill to that to that to that job or that that the responsibility that seems like
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  that's basically like the management ethos that you've implemented across the whole organization
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  and that seems to be like it's working it is working it is working now there's other things
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  that you've done what I think are interesting with homeboy so speak to me about you you have
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  three revenue streams you also have done acquisitions of for profit to to subsidize or to add
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  onto those revenue streams and I want this is more just of a creative business lesson for maybe
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  founders or entrepreneurs or CEOs or executives that are in non-profits that have not thought of
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  all the different ways that you thought of to bring in revenue into the company so you have your
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  donations you have your direct revenue and then you have government subsidies but you've done
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  other stuff so walk me through that yeah one good example is we have homeboy electronic recycling
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  in the state of California there's all sorts of rules around how do you dispose of electronic
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  equipment in a proper way and there was this business that started up called visitor electronics
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  a number of years ago and it was you know any oftentimes small businesses struggle to take that
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  first step up they need a capital infusion the woman who started up is it or electronics
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  had wanted to set it up as a for-profit social enterprise in which similar value she won the higher
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  incarcerated people she wanted to sort of lean into and give them the job well what we do at
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  homeboying still did and still do is not only do we have a business where we have jobs and we
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  provide a lot of wraparound services to help that person thrive in their life right at that time
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  that business is needed not just money capital but also wraparound services so we acquire that
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  business first you know acquire that business about $400,000 in top line revenue but we're now at
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  past three million dollars in top line revenue along the way and we still believe it can
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  it can keep on growing so but we kept that a little bit set aside and we kept the management team
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  in place and we wanted to run it with all the hallmarks of any of a for-profit business all the
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  things you got to work on on the on the income statement the cost of goods the efficiency of labor
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  or all that and but we believe that has enough growth and enough margins in it that we can provide
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  level of pay the market-based wages that we want and have it keep keep growing and it's a good
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  business for folks who graduate from our program we call them graduates and we land them into
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  that business as a very for-profit oriented business right and so oftentimes we at homeboy we have
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  a lot of visitors come come to us they ask us how we do the work we do a lot of other organizations
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  come through and you know they always stop in my office and ask about the business side of what we
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  do and one of the first things I say is that think about the the business model you want
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  make sure you're not you know how to do that business model in a for-profit way and then be
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  really clear about what of that then makes it a social enterprise organization so for some
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  companies it's because they're in the green economy and they're recycling product other
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  organizations like homeboy it's about we're going to have more jobs than a for-profit business
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  would have and so the way I think about our businesses is while they break even don't make money
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  the difference between our the profit the profit margin that we don't have is we spend that
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  profit margin extra labor right but every other part of the income statement we we are as good as
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  a for-profit business are cost of goods sold or shrinkage or are are are we buying all that it's
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  just as good but we have more people employ and as we think about growing businesses it's about
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  how many jobs can we produce and how many quality jobs are there and can people have two people
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  upward mobility in that business model I'm curious what your opinion is on on nonprofits as an entity
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  being extremely focused on their mission but less focused on on the business fundamentals and
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  it seems like that was almost even the case before you stepped in there was there was a there's
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  a stress on the business I think that I'm sure some some nonprofits have definitely figured it out
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  but if you think about the traditional nonprofit I've never heard of a strategy like you've
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  deployed and and even the nuances of what you're focused on in terms of like sound business
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  fundamentals and core business fundamentals it's not like you're ignoring the mission obviously
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  actually if anything you're creating a healthier environment to fulfill the mission but do you
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  find that the average nonprofit needs to focus on the mission but also look at some of these other
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  strategies that you've deployed is that an issue with nonprofits whether they can't have a bigger
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  impact or yes it's definitely an issue with nonprofits and also one more issue that gets into that
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  mix is that many nonprofits in the human service space helping people have a majority of their
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  funding coming from government contracts which sort of has the tail wag and the dog at that point
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  and it's you get pushed into doing things that sometimes doesn't make sense it becomes very inefficient
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  so it's this combination of you know being in contract compliance and then I mean do you have a
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  skill to run businesses and do contracts it's kind of hard to do both at the same time
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  and then all of a sudden you've kind of you're lost you have mission creeping you've lost like the
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  true essence of what you're about and and so what it's important is sort of again to have a good
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  board in place that kind of keeps you true to your mission and we have luckily have a good board
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  and a founder who's put it so clear everybody homeboy is so clear if we know what our mission is
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  and there's just the ways of how we implement it is what varies and and if you were going to give
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  advice to somebody who actually wanted to start a nonprofit and they were they they had some
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  business acumen but not to the level that you had and they were very mission driven what would be
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  the steps that you you'd recommend so that they don't get trapped in this loop yeah if you want to
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  start a nonprofit that's a social enterprise is yeah goal find somebody who's run that business
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  in the for-profit world and there are pending folks out there and so many folks kind of like
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  myself who's realized yet you yeah at some point you've made it in business you've made the money
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  you wanted to make but how do you kind of shift this to help other people out and so maybe it's
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  like an older person who sort of wants to help the next generation has one one way of thinking about
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  it could be younger people who've made it and want to help the next generation but it's I'm so
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  clear you have to get somebody who's run it in a for-profit way and just clearly know for us it's
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  the labor line that is different yeah and that is how we treat our employees that is different
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  that we have the labor line means we have more people on in place to do the work because we know
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  we have to give time off for the guy who goes into jail for three days that reduces that we know
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  we got to give time off for the woman who has to go see the probation officer along the way
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  and that's how you have to broad that's up a support service to an understanding around it
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  um one thing that I want to I want to speak about some lessons that you've learned over your
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  career and you said you've had many pivotal moments in your life um because of homeboy and what you
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  but also some of the leadership lessons that you deploy as well so let's just focus on on you
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  a little bit just to sort of tie this up um one of the things that you don't do is you don't take
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  a salary I thought that was very interesting uh speak to me about why you don't and maybe just
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  commentary on if that's a if it's a good strategy if it's more of a marketing gimmick is it something
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  like we see we talk we see billionaires that don't take salary as well so what is the benefit of
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  of not taking a salary um to the organization to the company to even the executive team when they
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  when they look at you do they want to model you in some aspect speak to me about that decision
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  yeah um and let me just get out of the way it's not a marketing gimmick because I kept it
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  acquired for nine of my 10 years I never told I didn't need to insinuate you it was a marketing
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  gimmick but that was in my brain right because yeah yeah all the way back to Leo liiah cocoa
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  and they'll get paid one dollar to produce k-bars right yeah right um I'm told how old I am
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  I'm in the last story you think you dated yourself right I read all good I read books right
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  but listen so let me tell you how I got to that point right so I come to homeboy look I
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  feel blessed my but the work I proud of the work we did at air market was it very six very
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  interesting success story whereas 93% owned by employees and so there was a liquidity event
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  when public then we're in private and then we got cash anyway made a lot of money and so
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  I didn't come to homeboy make money and this is actually if I can talk more about around this
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  question because it's illustrative of why I think homeboy successful it's just I was there
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  who worked for the right time for me and for the home for this organization
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  I just wanted to come help people right and that's a lot of people want I think this could help other
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  people and so I didn't come to homeboy with any ego to say I got I got to I got to
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  brandish myself and make myself into a nonprofit warrior my job was I was going to go make for
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  I want to make father Greg job easier I saw the stress I saw I knew how to run an organization
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  I saw all the stress he was under and yet I see the magic of when he's ministering through the
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  homies and how that changes their life around and so I wouldn't think okay I'll just I'll just do
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  this and so the board said okay they wanted to hire me I said fine we had to put a salary in place
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  thinking that's that's what you do right three weeks into me taking on the role
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  well me being the smart CEO I didn't ask the question before I said yes there's how much
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  money do you have in the bank can you can you make payroll three weeks into me taking the role
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  we have a cash crunch and we won't not going to make payroll and so and this is like that now
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  this is like beginning in January I'm thinking oh my gosh how this anything longs are how it happened
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  but what do you do so you're in scramble mode from that moment on so I did a workforce
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  reduction we trim back expenses didn't take in as many clients I stopped taking a salary
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  and so it was like and then also we had a borrow money to make payroll which is I don't
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  boy any any business that has to start borrowing money make payroll you know you're in big trouble
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  right yeah but I thought we had the right plan in place I knew how to move this forward it was
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  sort of like betting on ourselves that we're going to make this happen and so we made it through
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  the year we you know finally made it through the end of the year fun raising is big in the in the
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  Christmas time area so finally 11 months later where you get enough money paid off the loan
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  and then have a little bit of money in the bank and so from there though I realized I fell in
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  love with the organization and so I could have taken a salary but I was like why not I'm fast
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  saying money I knew we could help three or four more people and I that may not be the right way
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  thinking about it you know I think you know my organizations like doctors without borders you
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  know they go often and help people in other countries and they do they take money they don't
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  take money but and you sort of get into this there's this whole concept of being guilty and having
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  this you have resources they don't have resources type of thing a little bit it was in that place
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  but it was to me my wife and I just made a decision we don't need that thankfully we don't need the
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  money the more people who need more the people need more money more all right so that's our personal
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  decision that we made but the interesting thing is foundation world looked at us and say oh
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  wait a minute you can't afford to pay your CEO but what's wrong with you that's an organization so
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  it it was actually interpreted as a negative it was interpreted as a negative right right yeah
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  along the way and so then you know one thing leads to another and but but where I stand on this
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  the other thing that but where help though is um and this is it's a very unusual situation I
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  can't imagine it's going to be many people in this situation but as I'm kind of working hard trying
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  to make change happen in the organization from a not changing the mission the mission was always
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  strong it was like but are we organized correctly are we spending too much money doing all those
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  things as I'm trying to make change happen internally kind of gave a credibility hey I think
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  Tom's not here to sort of this casher paycheck and making these nutty things he's here to try to
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  repart of this team we're all in this together to to get the organization to a thriving perspective
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  and that's I think that's kind of a long way helping me sort of get the team to move along and
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  get there faster and so you know you get used to it and then it's like well then why start taking
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  a salary at that point after we got more successful and and so I we made it more knowledgeable because
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  you know I wrote this book the homeboy way and I guess I wanted to put it out there because
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  listen I'm not just again it's not just some guy sort of caching in on homeboy it's like no
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  no no no all the royalties go to homeboy all the everything we get helps the organization out it's
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  like here's a message I really believe in in a way of helping poor people our society with more
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  organizations and more people get there the better off thanks for tuning in if you found this
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  to dive deeper into this conversation check out the links in the description to watch the full
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  episode see you in the next one