Kelly Cutrone, star of Bravo's Kell on Earth and founder of People's Revolution, talked to Inc.com about training the Gen Y workforce, learning the power of “no”, and dealing with coddled clients.
Viewers tune in to Kell on Earth, the Bravo TV series chronicling the inner workings of Manhattan PR firm People's Revolution, for the celebrity clientele, the backstage look at Fashion Week, and the workplace melodrama. We watch for Kelly Cutrone.
The company's founder, whose book If You Have to Cry, Go Outside is currently on the New York Times Best Sellers list, grabs headlines for her uber-demanding management style and brutally honest take on the fashion industry. Underpinning Bravo's depiction of the power dynamics between a boss and her underlings (played out in the open floor plan of a cramped SoHo loft), are the very real problems of a working business: What to do if your client doesn't pay, how to deliver on a tight budget, and even what if your assistant ordered more printer paper than toilet paper. Cutrone talked to Inc.com about training the Gen Y workforce, learning the power of 'no', and dealing with coddled clients.
Inc.: What does it take to be a great publicist?
KC: I think one of the greatest gifts for me professionally and for my clients was to learn the word 'no.' This is a service industry and after a while becomes very demanding. Learn the word 'no' and then really have the energy and the experience and the knowledge to sit your client down like a good trekker going through Nepal. You want somebody who's gone to the top of that mountain. You need somebody who's going to say don't drink all your water because you're not going to have any here. Around this corner, you might find a man-eating lion. I like clients who take responsibility for themselves and where they're really at. I spend a lot of time explaining to them the timeline because people think that press is like this instantaneous thing. But, like everything, you have to build the image.
Inc.: How would you characterize yourself as a leader?
KC: It's not for everybody. I think that my office is a research and development laboratory for the ultimate power chicks. It's tribal and individual. I don't treat any of my employees the same. Each come with a different skill set and they each come with character defects. We're talking all day long about our lives, our fears, what's happening, our clients, it's a very creative place. There's a lot of room for expression of everybody's ideas, but sometimes people forget about the almighty dollar. Like my assistant, Andrew, says, 'You're so nice today, you've been so mean the last three days.' I tell him, 'I want you to understand that there's more to life than Twitter and I need you to support me.'
Inc.: Often on the show, it seems like the younger employees are unequal to their tasks.
KC: Those kids you see me yelling at on the show all the time, are not really my employees. They're interns. They come for a learning experience. These kids are in school, they're spending all this money studying communications. It's terrifying. Do I think it's good to go to school to get a communications degree? If you want me to answer honestly, not really. It's a craft and it's something you have to learn by watching other people do. When you own an agency like this, you become a role model, a teacher, a coach. We start with how to take a phone message, how to answer a phone. Then we move up to things like shopping bags and sharpies and all those things. I should really just be a professor at this point because I spend all my time training these kids.
Inc.: How has the recession cut into your own margins?
KC: I lose probably $150,000 a year or more on un-recouped receivables on actual labor and or money we've put out. You can talk to any person who owns a PR company and this is standard. The founder of a well-known PR company once told me his payables are, on average, 43 days late. And this was before the recession. So I got real. I read last October that numbers in the fashion industry were at an all time low and were comparable to those numbers of the Great Depression. And I told myself I'm not going to lose People's Revolution. I had run into a friend who said, 'My company's growing and I need more room.' I was like, 'Well, do you want to take one of our floors?' So we dropped a floor. And then we got rid people of clients that were going to go down. We could tell by their payment history and we started to get rid of them before we had to take on their own debt. And we didn't grow. And we asked our other offices in Paris and L.A., we really put a lot of pressure on the Paris office to become full self-supporting, which they did. There were also some little tricks. We cut out our car services. We cut out our catering. We turned our corporate Amex because five women—can you imagine? Five women with platinum Amex in their hand every month. Oh God—given what we all consider a justifiable business expense.
Inc.: You're very vocal about how the fashion industry needs to adapt to market conditions.
KC: The old model doesn't work anymore. It used to go like this: you're a designer. You make the clothes. You make them really, really expensive and super precocious and really naughty and very aspirational. And you get your story and you only sell to the right stores. Barneys, maybe Saks. The problem is that it's going to cost you around $500,000 to make that collection and you can probably sell $150,000 the first season out and then you're going to do an exclusive in Vogue magazine so it's going to take two months to pitch it and get it approved and then you have to wait for it to be shot and then come out. So you're basically looking at a six-month model. So you're not profitable in the model for at least three to five years, and then what you would hope is that you can start doing licenses for shoes, bags, things like that and make your money. Or that a great headhunter would fly over and find you and bring you into a house like Nina Ricci and you would come with all your cool press contacts. What they would find is that after three seasons is that you couldn't run a team of 165 people as a 28-year-old kid who's a fashion designer in New York. The old model was all like don't let anyone in, don't let anyone see, all very exclusive, blah blah blah.
Inc.: What should they do instead?
KC: Get 65,000 Facebook fans. Make a one minute short film and pop it up on Facebook and just talk to 65,000 people. Get it on the internet, then the Wall Street Journal and 700 bloggers pick it up and cut and paste it, you have a global message for very little money.
Inc.: Do you have any advice for other companies who don't understand what it takes to build a brand?
KC: Right now, everyone and everything is the brand. Your diary is now your Facebook page. That's great. But it's like, what do you have to say? What's your news? If you're a fashion designer and you have a new collection, well, so does everybody. It's like you're making little rick-rack t-shirts. You're not going to be in Vogue. You need to change your expectations or change your products.
Inc.: How does your growth strategy work?
KC: Well, our business model is a really strange business model because we only do what we like. I'm not sitting there every year going I've got to grow this business. I mean, we have a very strong work ethic but we're also picky about who we work with. If I were to allow for an acquisition, the first things that would happen is they would get rid of me—because everybody knows nobody needs a wacky entrepreneur around. Secondly, they wouldn't like the company because we say no to about 90 percent of the business that we're offered. We even stayed true in the recession. Because I don't want to talk about or represent things that I do not believe in.
Inc.: What's the biggest mistake you see your clients making when it comes to marketing or branding their company?
KC: I think they overestimate themselves and their talents and they underestimate the power of their competition.
Inc.: So what do you tell your clients when you see that they're doing that?
KC: Exactly that.