Emma Grede, Mellody Hobson & Angela Ahrendts on inclusive leadership

Note: Transcripts are automatically generated from episode audio, and are not fully corrected for spelling, grammar, and formatting.

EMMA GREDE: When you see a founder that’s able to build a business, create an infrastructure, employ people, and put their kids through school, that to me is what this is all about.

JEFF BERMAN: That’s Emma Grede, the co-founder of the Kardashian fashion brand Good American. Emma shares stellar lessons from her entrepreneurial successes with us in this episode.

And later on, we hear from Mellody Hobson, the president of Ariel Investments and former DreamWorks chair, who weighs in on DEI efforts, which — as you may have noticed—have been in the news of late.

MELLODY HOBSON: There’s this sense that it is a zero-sum game in this society, that if someone’s winning, someone else is losing. I do not prescribe to that. Our economy and our society have been built on the fact that the pie keeps getting bigger. The greatness of America is that you had this middle class and others who could share in that over time.

[THEME MUSIC]

BERMAN: I’m your host, Jeff Berman.

One of my favorite parts of our annual Masters of Scale Summit is when we get to witness incredible minds together on stage. This week, we’re sharing two of those conversations, both led by Angela Ahrendts.

Angela’s impressive career includes roles as CEO of Burberry and Senior Vice President of Apple.

In this first segment, she talks with Emma Grede. Emma is the CEO and co-founder of the inclusive apparel brand Good American. She’s also a founding partner in Skims and creator of the 15 Percent Pledge. Let’s head to the stage to hear Angela and Emma’s conversation.

Copy LinkEmma Grede’s journey to founding Good American

ANGELA AHRENDTS: I think what I love the most about Emma, which is why I agreed to do this, is because this is a founder, partner, investor, an incredible visionary. I won’t make her tell you how old she is because I think she’s about half my age, but still, it’s absolutely remarkable. So, let’s start with founder. In 2016, you revolutionized the fashion industry by coming up with Good American, an incredible, all-inclusive concept. Did you ever imagine that it would ignite such a powerful shift? It started so many things that happened. Did you think that would happen? And what surprised you the most after the fact?

GREDE: The short answer is no, I didn’t. And I have to be honest because my background was actually in having an agency. For a long time, I was a very frustrated consultant who worked in this first generation of talent and brand partnerships.

I ran this beautiful agency that I started and loved my job. I really crafted this company that sat at the intersection of entertainment and brand. It was that first generation stuff where, you know, you’d see Natalie Portman as the face of Dior or Tom Brady as the face of Hertz.

I was there for that. And as that business progressed, what happened is I became known as the go-to girl for start-ups when they were looking for talent to take some equity in their company, after doing a few deals very successfully, I was lucky enough to start Good American, and I’ve started some other businesses in that space. They’ve been incredibly successful, way beyond anything that I or my partners imagined. I think we’re just on the crest of a wave. In the next five years, we’re going to see hundreds of talent or influencers create billionaires.

I still look at it as an almost imperfect model. What I do, right? Because nobody follows The Rock to see him advertise tequila. You follow him because you love him. And he also can’t authentically speak to his audience if he is always talking about his brand projects.

So I’m really interested in the future of my business, how you start to see talent own their data and become the network. I’m always looking at the future. I’m always going forward, thinking about what’s interesting to me next more than anything.

Copy LinkThe importance of authentic partnerships

AHRENDTS: But I’m gonna stay on founder for a second because you also had to find investors. You’ve got a lot of founders in the room. Any advice on when you’re pitching a new concept that nobody’s ever done before, and you know it’s a big opportunity, but how do you approach that?

GREDE: Don’t listen too much to what others say. I came from a background where I wasn’t an apparel person. I wasn’t a founder for the audience that I went out to. When you have an agency, you’re not necessarily who people look to for millions to start a brand without experience. But I had very strong instincts about what was needed and where the industry and the business were going.

And that came from a personal need. I was very clear about that. I have a rule that I don’t take investors I wouldn’t want to have a drink with, because you end up in these complex relationships. They hopefully go on for years. I did it all wrong the first and second time around. I’d love to say I learned the first time, but I didn’t. Once you’ve had success, you can be choosier, but I keep that simple rule.

If you work with me or for me, if you’re coming into one of my companies, understand you’re along for the ride and the mission, and you need to believe in what I want to do.

AHRENDTS: So, it’s probably similar because you’re a partner. You’ve got a portfolio of businesses and a tremendous amount of partners. And I read somewhere where you assess a partner by authenticity. Not dissimilar to investors. Is there any other unique attribute you look for?

GREDE: Honestly, I think about people who want to go on a journey. What I’ve learned is that nothing I’ve done has had a quick result. It looks like that, and it may appear that way if you look at Instagram or whatever. But I choose my partners very carefully and also based on my weaknesses. That’s the same way I think about building teams. I’m very aware of my strengths, and I spend a lot of time hiring because I know that bringing the right people into the right culture is what building a business is all about. Nothing happens on your own. I get called self-made all the time, but I’m not self-made because of the hundreds of people who work around me every day. I think about investors, partners, and team building all the same way. I believe the most important part of my role, aside from product development and innovation, is honing in on who are the right people that I’m going to do this with. And who do I want to spend that amount of time with quite honestly, because you’ve got to be in it for the long run.

Copy LinkHow Emma Grede has approached investing

AHRENDTS: Yeah, absolutely. Well, and I think that’s why, in the press, they call you a savvy investor, and I love that. You’ve been a founder, you’ve got a tremendous amount of partners, and now you’re investing. You’ve always invested a little, but at your scale now, you’re making big bets.

So take us on the journey just a little bit from an investor standpoint on how you looked at it when you started out and now at this stage. How do you think of investing, and what’s important to you?

GREDE: When you start out, deal flow is bad. People would come to me, I’d have a little money, and I would just go on gut instinct. But the further I’ve gone in my career, my entrepreneurial journey, and as a Black woman in this country — I came here, I’m English, seven years ago — there is a sense of responsibility about leaving the door open, and about investing in people that might not get the opportunity. I left school at 15. On paper, I’m not someone worth betting hundreds of millions on. So, there’s a part of me with a sense of responsibility. It’s my responsibility to invest in people who make sense for me. But I’d be lying if I said I wasn’t as opportunistic as anyone. I try to do what I know, but sometimes I feel if not me, then who? And that is my guiding principle.

AHRENDTS: And you’re incredibly instinctual. Where does that come from? How do you hone that?

GREDE I think that comes from the streets. When you grow up in East London and how I did, you gain a sense of instinct just trying to keep yourself safe. It’s a part of you that’s always looking for opportunities and to take advantage of situations. I don’t think that’s different from how I think today. Maybe, I’ve molded it into solving problems and women-related issues. But at the end of the day, I get a hunch, I get a feeling, I catch a vibe, and I go for what I think is going to be right.

Copy LinkThe origins of the 15 Percent Pledge

AHRENDTS: Incredible. Is that how the 15 Percent Pledge came about?

GREDE: Well, I’d love to…

AHRENDTS: Tell them what it is.

GREDE: The 15 Percent Pledge is a social justice initiative. It was started by Aurora James, a dear friend of mine. We love Aurora. It started after the murder of George Floyd, when brands and individuals reached out to anyone in a position of power asking how to help. And Aurora’s point of view was you can help in a really meaningful way. You can actually put your money where your mouth is. Black people make up about 15 percent of the U.S. population. We ask brands and retailers to dedicate 15 percent of their annual spending towards Black-owned brands. At its root, it’s about demystifying who gets to be successful and have a business because often brands aren’t racist; they just know what they know. What do their buying and merchandise departments encounter? Who do they know? Where do their ideas come from? We say Black brands aren’t just for Black people. If you make an amazing lotion, anyone can use it. It’s about ushering in newness and creating businesses in places that are stale. Supporting small American businesses is at the heart of the pledge.

AHRENDTS: Amazing. You have incredible minds, founders, and visionaries here. How can they help?

GREDE: There are many ways you can help. At a time when DEI is treated like a dirty word, I think it’s really about thinking, what kind of world do we want to live in? What makes incredible companies we can be proud of? At this point in my career, I am obsessed with making amazing companies. Amazing companies are made of amazing profits but also doing things right. I’m obsessed with bringing people on this journey. We’ve created a $14 billion pipeline for Black-owned brands in the U.S., resulting in incredible potential profit and revenue streams. It’s just a great business proposition. How do you better serve your customer? This is about infiltrating customers and communities perhaps overlooked. It just makes sense. More and more Black brands should take the pledge.

And I’ve been so happy with the results and the impact because, you know, the pledge has been going for three and a half, like nearly four years now, and there are 750 brands on the shelves of Sephora and Nordstrom and Macy’s and Bloomingdale’s, and everywhere else that just weren’t there before.

So when you see that impact, when you see a founder that’s able to build a business, create an infrastructure, employ people, put their kids through school, you know, that to me is what this is all about. It’s about taking what you know and taking your power and taking something that you do uniquely well and being able to say, okay, let’s like, move forward. And if it’s a business proposition, it’s just a win. It’s a win win all round.

AHRENDTS: Absolutely. Well, and I think what you’re sharing with a lot of founders and people in businesses, I’ve always said the same thing, you know, the focus is always on the P& L. And why shouldn’t there be a P and I? Why shouldn’t we focus on the people and the impact they’re making first? Because that’s really what drives the P and L.

GREDE: Yes, it does.

AHRENDTS: And so, I think that the challenges as they’re running and starting businesses is there. I call her a social visionary because who comes up with that? And 14 billion later — no, but it’s absolutely incredible. So using your instincts and all of the things we just talked about. But I just think that in the future, it is a company’s responsibility.

GREDE: A hundred percent, as individuals too, right?

AHRENDTS: Absolutely. Since you’re such a savvy investor, are there any sectors or areas that excite you now?

GREDE: I’m obsessed with women’s sports. That’s all I can think about. I always think about there being a time and a moment in culture when customers are willing to accept. We’re at an incredible point for women’s sports. I’ve been watching women’s sports for years. I’ve ben in sports for years. I live near the UCLA campus and women’s basketball was big. I took my kids. But again, it’s about when what you do is ready to be accepted. I love the timing and culture aligning with what I am good at. That’s an area I’m interested in.

AHRENDTS: Amazing. Any others?

GREDE: I don’t do what I don’t know. I’m not in AI because it’s not my space. I’ll let others do it and catch on too late.

Copy LinkMarketing lessons from Emma Grede

AHRENDTS: Because you’re a founder, partner, investor, social visionary, and an incredible marketer, marketing plays a significant role in launching and scaling a business. How do you think of marketing in this day and age?

GREDE: Well, you know, I think I am a marketeer first and foremost, right? That’s what I know. That’s what I understand. That’s why I’ve built the businesses that I have. What I can tell you is what worked last year isn’t working now. There’s no social media arbitrage.

For a long time, I built these very digitally-native businesses that relied on, you know, whether it was Facebook in the beginning and then moving on to Instagram and then TikTok for like 25 seconds, like that time is over.

The only guarantee is meeting customers where they’re at, having a business that solves a real problem, and serves a purpose. That’s the only way to connect with customers.

And when I think about the things that have really shifted my business, it’s the initiatives, frankly, that I didn’t think about. Becoming B Corp certified was a turning point in Good, and honestly, I’d love to sit here and say, I thought it was a really important initiative. I didn’t, it was a cost nightmare and a time suck. I just thought, what a distraction for a business that’s two years old. However, my team really understood the importance of it, and it did two things. Number one, becoming B Corp certified taught me a lot, but for that group of team members that really spearheaded the movement, you know, they are probably the most loyal group of people that I’ve had in any company I’ve ever started, but they’re the ones that are the boundary pushes and they’re coming up with everything that is driving the company forward.

And then you look at the customers because that team. Those team members were smart enough to bring customers and the community along on the journey. What happened is that we created this like, cohort of customers. I mean, they literally have their own data segment in my business.

And it’s so crazy what happened within those two things that you ended up with this unbelievable team mentality and this group of customers that valued it. So beyond anything else that it became the reason to come into this brand and make that choice over that one. And so it’s not always the thing. And I think it’s really important to think about the things that you think that are really going to move the needle.

And from a marketing point of view, we never thought about B Corp in that way. It was like, how can we clean up what is otherwise a very dirty, pollution inducing business? But it was something that actually, I look at it now and it future-proofed our business in so many ways. And so it’s something I feel very proud about.

Copy LinkThe enduring value of physical retail

AHRENDTS: Absolutely incredible. Final question: You’ve started all these digital native businesses, but you have a pledge to get 15 percent on the shelves. How do you think about physical retail in the future?

GREDE: Oh, I am, I mean, I’m the most physical. I am opening about a store a month at the moment, and that is really doing so much for our businesses because people are craving in real life experience and craving community. Being in apparel, people want to touch and feel but also want in-person interaction. I’m glad we didn’t see retail as an afterthought. There’s so much value to traditional bricks and mortar. There’s so much value actually to partners in wholesale. Anyone starting a business feeling like they must focus on one lane gets stopped. Go into channels that make sense for your customers. Customers are everywhere. If you ignore anything, it will really stifle your growth. So I’m happy that I didn’t do that.

AHRENDTS: Listen to your customers, but it’s the key…

GREDE: Not all customers are online waiting to discover something amazing. Catch customers where they are. And if that happens to be because they’re in Nordstrom shopping for something else, and they happen across your brand, then be there, right? Don’t be a snob about it, because I don’t think that’s how customers think. And it’s not how they discover. And yeah, I mean, that is what it’s worth. That is what has given me the value and the valuations, quite frankly, that those companies have today.

AHRENDTS: You’re dynamic, agile, flexible, instinctual, and forward-looking. But any other advice for this incredible, brilliant group of people that you get?

GREDE: I often get asked for advice and leadership ethos. As a 16-year-old school leaver, giving advice feels like I missed that day at school. What I know to be true is: as someone with teams of hundreds, what do people want? And we’re in a time when it’s very difficult to tell the truth. It’s very difficult, like we talk about authenticity a lot, and I don’t know that that is where the world is at right now.

It certainly doesn’t feel that way to me. What I try to do is tell the truth. And what I try to do is be really honest about my expectations, what I need from people, where we’re going. And that seems so basic, but it’s really served me incredibly well. And that means that, you know, when people want to come to work three days a week, that’s cool, but that’s just not for me.

That’s not the business that I run. It means that when people need to see themselves in a certain way, like you’re going to get the truth and honesty for me, and it also means that, you know, we’re going on a journey together, and I’m going to be very open and sharing about what that means. And I think as a founder, just being who you are and being incredibly honest has just served me really well, and it isn’t really made for corporate America. It isn’t what my HR and people department liked the most about me, quite honestly. They’re like, shut up. Don’t say that. And I do think it’s what’s drawn people to me. I do think it’s what’s enabled me to hire the best in class people. It’s very straightforward. You get what you see and nobody is in the dark ever. And I think about, you know, companies, we talk about transparency, we talk about authenticity. It’s like, just tell the truth and you’ll never get in trouble.

AHRENDTS: Incredible. Thank you. Amazing. Thank you. Thank you. Thank you.

BERMAN: Coming up, a conversation between Angela and iconic investor Mellody Hobson. They discuss Mellody’s mission to improve financial literacy for young people, the importance of DEI efforts, and more.

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BERMAN: Welcome back to Masters of Scale. You can find these conversations — and all the incredible conversations from our summit in October — on our YouTube channel.

Next up, Angela Ahrendts sits down with Mellody Hobson.

Mellody is the co-CEO and president of Ariel Investments and has been a prominent presence on boards for companies like JP Morgan Chase and Starbucks. Her latest project is a children’s book titled “Priceless Facts About Money.”

Copy LinkMellody Hobson’s early lessons about money

AHRENDTS: Melody, your investment firm is called Ariel, and you co-founded the Ariel Community Academy on Chicago’s South Side. You’ve said your most important investment is empowering youth in underserved communities through financial education. You’ve been involved in financial literacy and curriculum for many years. Today we’re celebrating your new children’s book, “Priceless Facts About Money.” Huge congratulations! I know it’s for kids, but I learned a lot. It’s incredible. What are your earliest memories of money? What stories from your life did you draw from for “Priceless Facts About Money”?

HOBSON: The book’s goal is using children as a gateway to adults. I’m hoping adults read it to kids and learn what they don’t know. I spent four years researching it, starting during COVID as I was affected by our society’s lack of financial literacy. I wasn’t going to just admire the problem — that’s what we say at Ariel — I was going to do something.

What is my first memory of money? And I tell people this, money was a constant conversation in my family because we did not have any. And so it was a source of great anxiety and stress. And I remember my first check, which was seeing it on the wall at the grocery store where my mom had bounced a check and our name.

And everything was on the check. And I remember standing at the counter thinking, everyone in the store knows that that’s us. And I felt such shame and embarrassment. And in general, because we used to get evicted, our phone used to get disconnected, \we would hide our car to keep it from getting repossessed.

And so because of those things having happened to me, I felt all this shame. And as a child, my husband says this, you have no advanced reasoning skills as a child. You don’t know when something will be over. You cannot control any outcome. And so I became really burdened with this concept of money. So I don’t think it’s an accident. I work in the financial services industry because as a child, I was desperate to understand money, not have a lot of it.

And I said, if I have the knowledge, I can live a better life and not repeat the cycle that I find myself in and that my family finds itself in. So the real purpose of my life was anchored in the depravity that I often felt as a child, which ultimately, even though it didn’t feel like it at the time, became this amazing gift. And that is the reason why I’m so passionate about this idea of spreading the concepts because I think if they could take the burden off of children, young people, even adults, that they knew more, know more and can make better decisions that has that could be a real multiplier and quite powerful.

Copy LinkHow to teach children about financial literacy

AHRENDTS: You’re around a lot of young people. What do you see firsthand with them not understanding money, and how have you helped demystify it for your young daughter?

HOBSON: We are, as I said — I’m not saying this just to be critical, it’s just a fact — as a nation, we’re financially illiterate. Only 25 states in the United States actually mandate financial literacy in school, and often it’s not what you think of. I don’t think reading a utility bill is financially literate. Helpful, but I’d rather we be learning about the Dow, the Nasdaq, the S&P, the power of compounding. What is inflation? I could go on and on. And these concepts can be taught starting at a very young age. In my book, I have this idea of barter. You know, they say, how do you teach a three year old about money? A five year old? I said, teach them value. How do you teach them value? Say to a three or five year old, do you want a cupcake or Barbie? And they start to assess value, like which one is more valuable to me? Which one do I want in the moment?

Which one do I want to think about? I’ll have the Barbie forever, but I’ll eat the cupcake. You want that kind of thought process that’s happening with a small child. And so I would say to you that I’ve seen time and time again, the fact that we are not a financially literate society. We have tremendous anxiety about money.

77 percent of Americans say they feel anxious when it comes to money. We need that. That’s all people, that’s people of means, that’s people without means. This subject is incredibly important because all of our money habits are learned from our parents. So if you are not great on this subject, I can tell you, you are subconsciously passing it on to your child.

The other thing is the whole concept of money, especially for children, is quite mysterious in our current modern day. And what I mean by that is: Today’s children see money being spit out of a machine at an ATM, or they see a phone or a piece of plastic as a means of payment, versus when I grew up, my mother tended to use cash.

So because we don’t have that finality to something that’s in your wallet that runs out, children start to say things to their parents, and many of you maybe have even heard this, when the parent says, we can’t afford this, they say, put it on a credit card. So they don’t actually understand the cause and effect. 

I’ll give the last example. We’re at McDonald’s. We’re going through the drive thru. She got an order of french fries. And they said it’s whatever it is with tax. And my daughter looks at me and she says, what is tax? We do tax on the entire car ride home. First of all, she was appalled that we work three or four months a year without any income. And she’s like, literally, they don’t pay you? I said, no, they pay us. But if you added it all up, now we know some of us, it’s even more. But I said, you know, you work and you give this, what happens to the tax? Explaining all these things. 

Copy LinkHow we can help scale financial literacy

AHRENDTS: Amazing. Well, I’m going to pull us back. When you talk about scaling financial literacy and what’s at stake if we don’t, what can we do to help?

HOBSON: So let’s start off with the fact that every dollar of this is donated. This is not benefiting me personally in any way. So that’s not where my energy is coming from at all. I just want to make that clear. I just want kids to have the knowledge, and I actually want adults to have the knowledge too.

So my goal is that you will see this book and you will say to yourself, let me think about every niece, nephew, or young person that I know, friend, family, friends, et cetera, that I should give this to, that maybe it also will help the parent. Then I would hope that you would think about, we had one person in New York, they bought the book for every library in the city of New York. They gave two copies to every branch of New York Public Library, which is a great idea because libraries can’t just buy books on the budgets that they have right now. Then, I’ve had a lot of people talk about that they would buy the book for their child’s school. I can’t for some reason buy it for my own child’s school or give it to them because my child is too embarrassed. So, she’s kind of, I gave that to the library. I told her, like, we’re going to give the book to every kid. She was like, no. She’s like, you’re not doing that. So I get it. She’s 11. Her name’s in the book, the whole thing. She was like, no, but it’s in the library. So giving the book even to the school library, I think is very important. The other idea: the state of Maine bought the book for every elementary school student in the states, single elementary school. So just think in Maine, it’s 13,000 books. It’s actually doable.

Copy LinkWhy prioritizing diversity and inclusion is good business

AHRENDTS: Let’s step away for a second from like dollars and cents. And, you’ve also been incredibly committed to breaking down barriers by prioritizing diversity and inclusion as an investment strategy. And you’ve also been a staunch advocate of diversity on boards. So, thank you. But, we’ve all been reading that some corporations are rolling back or pulling out of their DEI commitments. And why do you think this is? And where do we go from here?

HOBSON: I think the black hats have been very effective. They’ve scared people legally. So it started with Harvard. I really do think that that had a chilling effect on diversity in the country. They went to an elite institution, and they argued a case that ultimately they won. We can all agree or disagree on what the merits of that case were, but I will tell you, I went to Princeton. And I do believe I was a beneficiary of affirmative action. And I think that is better for society that I am in the seat that I am today. I think if it hadn’t existed, I wouldn’t have had the same shot to go to that school. And going to that school opened a lot of doors for me after I left there. And that’s just the truth.

And so what I would say is right now, there’s this sense that it is a zero sum game in this society. That if someone’s winning, someone else is losing. I do not prescribe to that. Our economy and our society has been built on the fact that the pie keeps getting bigger. And the greatness of America is that you had this middle class and others who could share in that over time.

Though sometimes I do believe, and I’m not saying we are perfect in any way, I think there needs to be more opportunity for people of color and women. I am a hundred percent convinced of it because I am in the rooms where we are not. Although people think we’re though people think we’re taking over after you have one Black president, we’re not. There’s been this effort to roll back because the legal argument has gotten people nervous. You have general counsels and others saying we have to be careful, or you have people who actually agree and it’s just convenient for them. So I think those of us who are in roles where we can continue to push and explain every, every piece of data shows that diversity helps outcomes.

Every piece of data. If you have like minded people around you, you will not have barrier breaking ideas. You want innovation to come from different thought process, different backgrounds, different genders, sexual orientations, et cetera, in order to to be bold and and audacious. And unfortunately, um, some people do not agree with that.

AHRENDTS: But I also think that we all have a role to play, and I will tell you, best TED Talk I have ever watched or listened to in my life is hers from 10 years ago, and, and it’s called “Colorblind or Color Brave,” and I’m telling you, spread it to everybody you know, and maybe that’ll help.

HOBSON: Thank you.

AHRENDTS: You are absolutely priceless, and we are so grateful.

BERMAN: I’m so grateful to both Emma Grede and Mellody Hobson for sharing their wisdom with us at the Masters of Scale Summit, and to Angela Ahrendts for leading these conversations.
To find out how you can attend our 2025 Summit, go to mastersofscale.com/summit.