Tarang Amin has taken brands from $50 million to $2billion. As Chairman and CEO of e.l.f. Cosmetics, and former President, CEO and Director of Schiff Nutrition, he has a phenomenal career that spans different companies. When he visited his alma mater, Duke University’s Fuqua School of Business, we sat down to discuss his formative years, important mentors, teambuilding strategies, and the role of failure plays in success.
Sanyin: Tell us about your journey before you became the CEO of e.l.f. Cosmetics.
Sanyin: Building diversity and inclusion is a strategic imperative for you at e.l.f. Cosmetics. Tell us how this factors into the success of the company.
Tarang: e.l.f. was founded 15 years ago as an e-commerce company selling cosmetics over the Internet for just $1. We’ve since migrated to other price points and other channels, but the core remains the same: We make prestige quality cosmetics and skin care at an extraordinary value. Our average prices are around $3.50, a fraction of most of the category.
But the most important thing we do is engage young diverse beauty enthusiasts. These are the women who are driving the entire category. So, we make sure that our company reflects the consumers we serve. I take great pride that our company is comprised of 85% women, 75% millennials, and over 60% are ethnically diverse. I believe that having a company full of the same beauty enthusiasts that we aim to serve gives us a huge advantage.
Sanyin: You’re known for co-creating products with your customers at e.l.f., in a sense. Can you talk about that?
Tarang: We have the #1 e-commerce site in mass color cosmetics and have received over 130,000 product reviews. For perspective that’s 20 times the next highest brand and shows that our consumers are incredibly engaged with the brand. We respond to every single review, because that’s how we get better. We take our enthusiasts feedback into account when we make new products and improve old ones – and especially like the negative reviews. There’s a strong sense that it’s not our brand. It’s the community’s brand, and they have the ability to shape and drive it.
Sanyin: Can you tell us a story that illustrates a defining moment in your life?
Tarang: In December of 1979, I was 14 years old. As I mentioned, I come from an immigrant family and, as many immigrants do, we rose as entrepreneurs. We sold our house, took every penny we had, and bought a small motel on Route 1 in Alexandria, Virginia. We moved into the manager’s apartment, and my dad and I ran the motel. It was stressful because at the time interest rates were above 18%. Every penny we had was in this property.
It was tough to make that adjustment. But I look back fondly at that memory for two reasons. First, every major door that’s ever been opened for me goes back to that initial motel experience. It made me appreciate my education at Duke so much more. I remember applying to business school when I was an undergrad. The dean at the time said, “You don’t have business experience.” But I was able to share my business experience that started at 14, and that’s what opened that door.
In my first year at Duke University’s Fuqua School of Business, my name showed up on an interview list for marketing internships at Procter and Gamble. I didn’t think I knew anything about marketing. Yet, when I started talking about what we did at our motel - - how we priced, how we differentiated each room, how we knew who our customers were – these were all rich marketing experiences. Years later, when I made the switch from large CPG companies to private equity backed mid-market growth companies, being able to go back and talk about those entrepreneurial roots at our motels helped get my first CEO position.
And second, it was such a rich learning experience because I learned how to operate a business at an early age. P&G was a great training ground, but everything that I know about cash flow, economic profit, and how you treat people came from those early days in our motels. I’ve been able to take many of those entrepreneurial skills to scale much larger businesses and have them operate more effectively because of that. So, while it seemed like a rough experience at the time, I cherish it to this day.
Sanyin: Did you expect your 14-year-old self, or even your 18-year-old self, to do what you’re doing today?
Tarang: No, I had no idea. When I came out of Duke undergrad, I thought I was going to go into international development. In fact, during business school, I concentrated more on finance, thinking I was going to go work at the World Bank. I didn’t even know what P&G was when I was put on the interview list I mentioned. But during that internship at P&G, I enjoyed my experience on a brand and decided to go back. Since then, for 25 years, I’ve worked on building brands in every major sector, and I absolutely love it.
Sanyin: In my experience as a CEO Coach, the best leaders are also good mentors. You yourself are well known for your mentorship of others. Who have been some of your mentors?
There was also A.G. Lafley, who was P&G’s CEO. I’ll never forget that he took time out of his busy schedule during a tumultuous time for P&G to walk stores together. We were able to share perspectives on different products and categories by seeing their placement and organization on shelves. I learned more in that one afternoon than I did through months of sales training most brand people went through.
Tarang: We look for people who fit well with our culture. We find that there are many qualified people with great credentials who are interested in joining our team. But we really look for people who have demonstrated an ability to move at a faster pace, where they can fit into our culture, and where they’re willing to change and grow with us. The glue that holds us together is our shared value system, which includes diversity.
Sanyin: Diversity is so important. How do you make sure everyone feels connected?
Tarang: We try to make sure everyone feels connected through a number of rituals. First and foremost, we have a high-performance team framework which focuses on building passionate relationships, promoting healthy conflict and mutual accountability. And we take it seriously. We make sure everyone understands this framework, gives candid feedback to their peers, and holds each other accountable.
Second, we get all of our employees together every couple of weeks in a town hall and we share stories about what worked and what didn’t work. This creates a common narrative, promotes transparency, and increases candor.
And third, we have an incentive system to promote teamwork. We focus on the individual development, but the goal is always to make sure the entire team is working well together.
Sanyin: I think we can learn from failures as well as successes. Can you tell us about a moment of failure and how you learned from it?
Tarang: When I was at P&G, I was running the Bounty paper towel business. I was brought in when the business was struggling. P&G was also going through a CEO transition – from Durk Jager to A.G. Lafley. BusinessWeek wanted to do a story on P&G, but P&G didn’t want to put Lafley up for an interview at that time. I had done some media before, so they asked me if I would do the interview.
The BusinessWeek P&G story was featured on the front cover when it was released. And the inside flap said, “If you want to know what’s wrong with P&G, look no further than the Bounty business.” Remember, that was the business I was running. I felt sick. I went to Lafley’s office and started apologizing: “I’m sorry it was such a bad interview. It was such a negative piece.” But he reassured me, “Don’t worry about it. Nobody reads BusinessWeek. Just stay focused. You have the right plan. Focus on that plan.”
In that moment, I felt a lot better, but then I got home, and my neighbor was by my fence and said, “That was a bad article.” And I thought, oh my God, people do read BusinessWeek.
Human instinct is to curl up and go quiet or fight and write BusinessWeek what was wrong about what they published. Then I took a step back and thought of my team. There were a few thousand people on the Bounty team at that time. I did not want them to get discouraged because I knew how hard everyone was working. So I wrote a letter to every single member of our team and explained both my disappointment and that some of the points in the article were right. We had let our prices get too high. We didn’t innovate fast enough. We forgot what the brand was about. It was a great opportunity for me to refocus our mission, strategy, and culture. I tried to use the article as a rallying cry for the organization. So instead of feeling sorry for ourselves, we redirected and reinforced our values and plan.
Tarang: Practice giving pinpointed, candid feedback with the intent of helping the team succeed. This is one of the core attributes of every high performance team I’ve had as it promotes building passionate relationships, healthy conflict resolution and mutual accountability. Yet, at 21 years, regularly giving such feedback took a back-seat to acquiring other skills.