Austinist Interviews Roy Spence, CEO of GSD&M Idea City

by Roy M. Spence Jr. (Author), Haley Rushing (Contributor)

I think now is actually a good time to be evaluating that. A lot people I know have been laid off - [large] companies, a lot of small businesses in town, are folding. These are dark times. But, at the same time, this is also the chance when you’re forced to innovate, when you’re forced to do something different. What advice would you give for people who are open to exploring new ideas?

It’s a great point, and a great time (for innovation). My son just enrolled in Tulane, and the president of Tulane had a great quote after Katrina:

He said, “When a tsunami hits your life, you get three things you can do: do nothing, rebuild what you had, or use this opportunity to build what you should’ve been building all along.”

[Like] I tell my kids, there’s an opportunity in a downturn, if you have access to capital, to create something that you’ve always wanted to create. It’s a perfect time to open a business. That sounds crazy, but it’s the perfect time, because if you get the right rent, it will be lower. If you have the right cost structure, it will be lower than the established competitor.

The advice that I would have to people in Austin is: the thrill of life, at least in my experience, is to create something that was not there before. An article that has never been written, a painting that’s never been painted, a business that’s never been done. You have to be different first, when you’re starting something. You’ve gotta be different. In the process, you’ll end up being better.

But, I would say, two characteristics that we need to have [are] optimism and determination. You’ve gotta be optimistic, but if you’re not determined, you’ll just be a happy, go-lucky guy (laughs). You’ve gotta have [both]. You have a chance to build something that wasn’t there before - don’t give up, don’t give in, and get on with it.

Would you say that now is a good time for people to take that leap of faith?

I would. Again, though, we’ve got to get access to capital. The banks aren’t lending the money.

(from earlier in the interview) I was going to write an op-ed piece—and you’ll be the first to hear about it, because I’m not sending it out yet—but I look at the stimulus package, and I see what’s in it and what’s not in it. I’m not a policy guy, but I also see that over the last decade, up to 80% of all the new jobs in America were created by small businesses, companies of 500 or less [employees]. There’s nothing in this bill that gives capital, access to loans, or credit - nothing in this bill! We ought to be funding the economic engine, and to me, it’s what you’re building, and what we built.

So, how does this equate on an individual level? How does a guy like me, if I’ve this brilliant idea to sell, [say], cupcakes on South Congress. Where do I take that idea?

I think the first thing you’ve gotta do is [ask] how you would build it if you had no money? If you have a cupcake, something that you want, and you have no money, how would you sell it? What a great question!

Ok, you have a great cupcake [recipe] that your mother had passed on from her grandmother, and you have cupcakes that you think will just knock people out. The question you’ve gotta ask yourself is, are you passionate about paying the price to do this cupcake thing? Are you really? I mean not kinda, but are you really? Secondly, can you be the best in the world at the cupcake thing?

Do you have to be the best in the world?

You’ve gotta try to be, or why do it? You’ve gotta believe that you can be the best in the world at cupcakes. And then you’ve gotta think, OK, I’m passionate at it, I think I can be the best in the world at it, then, how can I make money at it?

Jim Collins talks about in Good to Great - a great book - he said that the successful organizations [are] the ones that have moved from good to great, that articulate what they’re most passionate about and believe it. [The ones who] seek to be the best in the world at it, and then figure out how to make money at it.

So I guess, in a way, the money comes last?

It’s about purpose. During good times, you can sell stuff to anybody.

A friend of mine told me this - and I think he’s right - about two years ago. He said, "You know what the collapse of the world economy is going to be?"

I went, "Uh, no."

He said, "Here it is. The whole world economy is dependent upon American consumers spending more than they have on things they don’t need made someplace else.”

Think about it.

That’s why I think that the organizations that actually improve people’s lives are the only ones that are going to be left standing. I mean, if you’re building a computer and it has no other reason to exist than just to make it and sell it, you’re through. Does anybody miss Linens ‘N Things? (knocks on wood) Really, Sharper Image? Do you miss it? That’s the greatest question in the world of purpose - if your organization ceased to exist, would anybody miss it?

You’ve always gotta ask yourself that.

Yeah, or else you’re not delivering a purpose or improving people’s lives. That’s a long way of saying that I think the people who are going to be left standing that are the ones who actually produce goods and services that improve people’s lives.

I really think, at the core, if people are running companies that don’t fundamentally improve people’s lives, they’re not going to exist. I don’t know if people are going to miss Circuit City. That’s kind of the purpose of the book—it’s [about] what you stand for.

Here’s a harsher question—

That’s good!

A lot of this is ancient history now, but let’s go back to early 2008, when we’re in the middle of this very heated political race. Everybody knows that you’d been a very strong supporter of the Clintons, over [much of your] lifetime—

Absolutely.

That’s right, you guys have a very close friendship. And I know that you were doing some work, some consulting work with them. Around February 2008, the ad comes out - the very famous red phone ad. You weren’t actually directly involved with this; you were involved with the 1984 one—

Yeah, the one against Gary Hart, (laughs) which really was the stimulus for the one that Mark Penn did (in 2008). It was the same idea.

Now, going back to [your] book, the message is purpose-based decision making. It’s [about] identifying what you stand for, and I wonder, with the benefit of hindsight - there was a lot of criticism when this ad came out that it took an unnecessarily harsh tone, that it was fearmongering some people said - do you, in terms of the campaign that Hillary ran, regret that they decided to pursue that route? Do you think that it was unnecessarily divisive?

That's a great question. (pauses to think) I don’t regret doing [the] red phone ad against Gary Hart. At all. And I did it because, at that moment in time, Reagan was the President of the United States, and we were doing a lot of really weird stuff on arms control. I believed that Walter Mondale, at that moment in time, could walk into the White House and absolutely understand what was at stake. I did not believe Gary Hart [could]—and he actually proved [it] to be correct.

I don’t know that the Clinton campaign regrets it. I know that it was a statement about experience, and I know that (Obama's campaign) were running ads against her and the former president, saying that everything that the Clintons did was wrong. That everything that the Clintons did was bad, [that] with everything that we did, you’ve gotta turn the page, start anew, begin again. And that the 21 million jobs that [they] created weren’t really important, and the welfare work wasn’t really that important, that the medical leave act wasn’t really important, that the 400,000 cops on the street - the lowest crime rate [in our history] - and the biggest economy boom was not relevant. So, if you look at it on both sides, both were going at each other’s weakness.

Obama was, “We’ve had that, we don’t want it anymore.” Hers was, “We [have] huge problems. Is someone capable on Day One to run the business?”

Strategically, I thought both campaigns had a right to do what they were doing. On an individual ad, I really can’t comment because I didn’t do it - but I do know that it … froze the race. It froze the race for just a moment. In the [end], turning the page was more important than experience.

Obviously it all worked out, but do you wish that maybe, at the time, that you’d been able to sit both parties down and say, "Look guys, we have to bring this back to what we, as a party, are thinking?"

I think that, in the end, politics is the business of freedom. And political races are contact sports.

I do believe that they get out of control sometimes, on both sides. If you were sitting in on the Clinton phone calls and hearing what was going against them, you’d have a different perspective than sitting on Obama’s side and hearing [theirs].

I think that there are some out of bounds stuff. What the Bush campaign did against McCain in South Carolina (in 2000) - out of bounds. But I don’t know whether the "3 a.m." spot was out of bounds or not. It obviously didn’t win the campaign (laughs).

People were ready for “different”, they really were, and I think that’s what the president’s doing right now, and I admire both of them for actually, now, realizing that the world can be helped by both of them. I respect both of them. Him for offering, her for taking.

I did notice that you donated to Obama’s campaign.

Yeah. The day after - September 2008.

I think that sends a signal.

(Nods) "It’s done, and now we gotta come together as a party, and next as a country. We gotta go onto the next business."

One of our Twitter friends, @kristenkouk, wants to know: were there any low points in your career, and how did you overcome them?

Yeah, there were. I think the main low part was when you go through a situation where you’ve been with Wal-Mart for 17 years and then you get axed. And then the person who axed you gets axed. And that’s always sort of … interesting.

I think the low points are always in people’s lives - I don’t know anybody who’s gone through life living, as I say, "jumping off a building and building the wings on the way down." I don’t think I’ve ever hit the concrete - [but] I’ve come real close (laughs) and I could feel like I got scraped.

I think anybody who’s out there to improve lives or dream new dreams is going to hit some low points. I think the thing that always got me through was the belief that, in some moment, I never had a job. I always had work to do. I know that sounds a little bit trite, but not to me. I think you go get a job to make money, I think you go to work to make a difference. And, in the process, you make money, and sometimes you make big mistakes.

But I think what got me through was the idea that, "I’m just going to get up and go to work tomorrow." And try to make some kind of difference, on some level.

The low point was falling from a high point. You get back up to the high point by going back to work and trying to make a difference.

(pauses)

And tequila.

(laughs)

When all’s said and done, what is it that you’re hoping that your legacy is going to be? What is the message that you want to leave behind from this body of work?

I think, and I haven’t really thought about it, but I think the most important thing is that we, as a partnership/group, built a culture based on upon some pretty sound things.

This Golden Rule on my neck (pulls out a necklace upon which dangle several small religious charms) - every religion has some version of the Golden rule. I think that we tried to build a company where we tried to treat people like we wanted to be treated.

We had fun doing it, even in the low points, where we had to lay off some people. We worked night and day to find everyone a job. We did it with dignity and respect.

The difference we tried to make in all that we did, especially with our people and our clients - the byproduct of all that was that we created sea-changing ideas that changed behaviors. We reduced litter. We got former President Bush and Bill Clinton on the same set together to raise money for the tsunami relief, to raise money for Katrina, to raise money for Ike. And these are people who ran against each other, [who] fought against each other, who became great friends. We were sort of the catalyst.

I think the main thing was that we built a culture of respect, of caring for one another. And we built a family - that’s probably the biggest legacy I could say. The other stuff was the work we did - and I think that it’s pretty cool - but that will come and go. Cultures hopefully live forever, and that’s what we’re trying to do.

Like the culture of Austin - that’s gotta live forever.