Commercial Voice:
Presented by Levi's, 150 years of the 501 jean.

Ranjay Gulati:
It is one of the world's most iconic clothing brands. It dates back to the mid-1800s and the California Gold Rush. Back when men and women on the Western frontier needed tough, affordable workloads with its faded blue denim, red tag, and riveted pockets. A pair of Levi's jeans is a staple of the American wardrobe. Levi Strauss and Company is one of the world's largest brand name apparel manufacturers. But keeping Levi's on top of the stack hasn't been easy. As fashion trends shifted in recent decades, more people got their casual clothing from stores like Gap and Abercrombie & Fitch. More people pulled on jeans made by brands like Calvin Klein, Lee, and Wrangler. Then, about a dozen years ago, Levi Strauss and Company began a major overhaul of how it did business. And my guest this time is the company's Chief Financial and growth officer, Harmit Singh.

Hi everyone. This is Deep Purpose, a podcast about courage and commitment in turbulent times. I'm Ranjay Gulati, a professor of business administration at the Harvard Business School. Before he signed on with Levi Strauss, Harmit Singh worked at the consulting firm, Price Waterhouse. After that, he spent 14 years at Yum Brands, which operates familiar eateries like Taco Bell and Pizza Hut. And he was an executive vice president and CFO at Hyatt Hotels. Harmit Singh grew up in India. His grandfather was a politician. His father was an engineer, whose jobs took the family from one place to the next. As they moved, Harmit learned to adapt, and he learned to focus.

Harmit Singh:
In India, when we were growing up, you have to decide on a lane fairly quickly. In grade 10, you go and do the science engineering or you do commerce and accounting. When we had to decide, I asked my Dad, "What do you think?" And he says, "What would you like to do?" And I had a love for numbers and so I said, "I'd like to get into commerce and finance and accounting." And I was the first in the family. He never told me what to do. A year after I decided, I asked him, "If you had a choice, what would you like me to do?" And he said, "I'd love you to you to become a doctor." We didn't have a doctor in the family. And so it was a lot about giving us choices, which has allowed me to grow. I moved cities.

I moved school in the ninth grade, which is when you have grade exams in the 10th, it's not a right time to move, but he was moving from a smaller town in India to Mumbai and I had six months to catch up in that school and just trying to get used to that. And then in grade 10, he moved to Delhi, and it's a very difficult year to move, but I did move in grade 10, made new friends. And I remember one situation when... I'm a sportsman background, played a lot of basketball and I went to my new school in Delhi. They had this wonderful basketball court, which no one knew [about]. There was no basketball team. And so I went and solicited some people who were good sportsmen, and we created a basketball team. And I think it was the first or second year in the tournament, we reached the top four in the state. And so it was good. It was just good to take your passion and try and aspire for something better. And so I think those are the things that really helped shape my life.

Ranjay Gulati:
Were there any big setbacks from which you had to learn very early?

Harmit Singh:
Yeah, I mean-

Ranjay Gulati:
You see them too?

Harmit Singh:
My Dad, when I was in grade nine, lost a job, and we had to move. But the man he was, because he was a value-based and a principled person, he never agreed with why he was fired. And he actually fought against it. And two years later, they restored his job with honors. And I think what it taught me was, as long as you believe and you stick to your principles and values, you can argue against the system. And it taught me a very important principle, which is - sometimes in life, doing the hard right thing is better than doing the easy wrong thing. And I think that's what's characterized my professional life, it's characterized my personal life. If there are setbacks... everybody will have setbacks: learn from it, deal with it, but stick to your core principles and values.

Ranjay Gulati:
Give us an example where you had to do a hard right thing versus the easy, wrong thing.

Harmit Singh:
Levi's is a great example. When I joined the company and we were looking at turning around the company, the balance sheet was a constraint, and we had to reduce debt. We could have ignored it for a while. The company would not go bankrupt. We have enough money to run it, but we said, "Okay, the more important thing right now is to cut costs." It did mean we had to let go of 10% of our workforce. We did that. It was the right thing to do that enable us to pay down debt and start investing and accelerate growth. And it's always hard to let people go.

The same thing happened during the pandemic. Our stores were shut for 90 days, and we lost a billion like that and became a smaller company. And the question was, what is the right thing to do? We let go of people, but we also made sure that we struck a good balance among all our stakeholders. So we cut dividends, but to ensure that people were treated well - and that was a time where health benefits were important -, we extended health benefits for people who were being let go so that they could land on their feet. I think doing things like that, I think just help us sleep better at night. There are hard decisions but important and need to be done quickly.

Ranjay Gulati:
The most successful business leaders exude a strong sense of purpose, and that comes from having clear personal values and principles. Many of the executives I've met over the years speak in vivid terms about the core beliefs that guide their decision-making. I asked Harmit Singh what personal maxims guide and shape him?

Harmit Singh:
Treat people fairly. I always like to raise the bar because one needs to shoot for a higher goal, but if people don't meet the bar but have tried, I make sure they're treated fairly. The next is [when] thinking about growing or growth and development, balance short-term in the long term. You can't ignore one for the other. And making sure that you're able to relate to both is important. One of our values most companies have is courage. And so sometimes is important to take calls that you believe help you in the long term that may hurt you in the short term. And the one thing that I've learned, and I think during the pandemic has made a big difference, is being a lot more empathetic. As CFOs, sometimes we are criticized for not being empathetic, but I think, over the last couple of years, I've learned to listen a lot more understand people's issues and the balance, what needs to be done with personal needs.

Ranjay Gulati:
So let me ask you this. You said the word "courage." What does the word "courage" mean?

Harmit Singh:
It means taking risk. One of the things that has worked for me is taking risk. I grew up in India. I've now been in the US [for] 22 years. We moved three countries, five or six cities, and each change took a bit of risk. I say jokingly, other than this job, because I was CFO at Hyatt, I've never done a job that I did before. I moved four or five industries, locations. So each has come with a bit of risk, but the calculator risk, and I think you bring humility in the workplace, understand and build the relationships before you unleash a playbook is very critical.

When I first moved from Yum [Brands], after 14 years into a different industry, it's very natural to take a playbook you've grown up with or experiences and replicate it. And I realized that till you are able to understand the different nuances of the business, build relationships with the people, it is difficult for people to trust you. And so that's the first thing you need to do is build a relationship, understand the business, build the trust, and then start doing things that you've learned, but making it relevant for that particular situation or business.

Ranjay Gulati:
So let me start with the word "courage." Courage is some would say taking action in the face of fear. Tell me a moment in your life, personal life even then where you actually felt fear and you still took action.

Harmit Singh:
Yeah, I talked about the time in grade 9 or 10 when [my] Dad lost his job and we had to move cities, because he moved jobs. That was a tough time. But in terms of the... I think professionally, there are a couple of instances I started, I did my chartered accountancy, largely because I wanted to run my own company. And then I fell in love with my wife, and Indian tradition said, "Okay, you have to be settled." So Dad picked up the newspaper one day and he saw this ad by American Express where they were hiring financial analysts and it was the top paying job at that level in the country. In today's dollars, $600 a year. So not a lot of sum of money, but very high for a country like India. And he says, "Son, you want to get settled? Why don't you start working?"

And I said, "I don't want to work in a corporation." But he says, "Why don't you go and talk to them?" So I actually, to humor him, went into American Express office to give my CV, expecting to walk out, but the receptionist said, "Meet the assistant HR person." Nine hours later, I was walking out with a job, and I had a choice to make to I pursue my passion or start a corporate life and it was a tough call. So that was one situation. There's another situation. I was working for American Express. I was with them for about eight years, doing really well. And this old boss of mine, who just joined PepsiCo, said to me, "Why don't you join me?" PepsiCo restaurants are setting up operations in India. India was opening up.

My wife was pregnant with our first child. And so the question was, do you move across to PepsiCo where the company was not yet formed? I was going to be the second employee. The business vision was not established. Or with a child around the corner, do you stay course and lead a more complacent and comfortable life? I decided to shift to PepsiCo, and it was the right call, because I learned a lot. We set up the business, it was very successful. PepsiCo took me to Asia and then brought me to the US. Sometimes you got to take these decisions.

Ranjay Gulati:
How do you... As a finance person, you understand risk, right? You even know how to quantify risk. If you can, you can measure it, you can put some expected value around it. How do you take risk? How do you then.... Eventually, somebody's got to take that leap of faith. You do the math, you quantify and de-risk it. You look at the beta, you look at whatever, but in the end you call it take that leap of faith? How does one do that in business and in life?

Harmit Singh:
I think a couple of things. One, the risk that you're taking, is it aligned with the values that you have as a person? Will it enhance? Will it be in sync with the character that you feel comfortable [with]? That's one. Second is look at the upside and the downside. I believe that taking a risk allows you to make a bigger impact if successful. So believe in yourself and the fact that if you take the risk, you will succeed. But it's important to call if about the downside and the upside. And the third is talk to people. Because what I've learned over life that there are experiences that I may not have gone through but others have. And so I do reach out to close friends, mentors and say, "Okay, I'm going through this decision. Am I missing something? What do I need to look for?" And then take the call. Don't procrastinate too much. Sometimes you tend to, because you're a little worried about the fact that the risk may not work out, and that's a problem. So just think through that.

Ranjay Gulati:
Give us an example. At Levi Strauss, you've made a number of key decisions in the last 10 years. Pick one where you felt this was really risky. I mean, "we genuinely didn't know how it's going to pan out. We probably thought it might even fail. Here's how we thought about it. Here's how we analyzed it. But even after all the analysis, there were still a residual doubt that we had to take a leap of faith."

Harmit Singh:
Yeah, so I think the pandemic is a good example, where our stores were shut. We didn't know if the stores would open in two months, three months, four months, six months. The playbook one had was... Again, a playbook is learned over life as you face different recessions... The first piece is "Manage through the crisis." And the second is "Think about how you emerge stronger." And as I was working with the executive team, everybody's worried about the next day or the next 30 days. And so that was managing through the crisis, which is preserving cash, protecting your profits, connecting with the consumer. Nobody was thinking about what happens in a year or two from now? So I said to my team, a very small team, I called the project Bonsai One. It's about in the Bonsai plant you have to nurture it, and it's a beautiful plant at the end of the day.

And I said, "Why don't a few of us start thinking about how do you emerge stronger in a year or two from now? Let's just create that positive energy, because we can share that with the team." And that's what we did. We said, here are the few things we could do if you have to think about this differently while you're worried about tomorrow and making sure employees are healthy, making sure we have enough cash, the stores are closed. So we came up with this project called Bonsai One, and that became the foundation of where we spent our energy and invested on things.

And so in '21, we emerged as a stronger company, because we took some risks. We invested in digital, we continued to open stores where others were pulling back. We did unfortunately lay off people. So we were working with fewer people were working harder, and that was tough. But we emerged stronger and we grew market share. And so it was a bit of a risk. And then when we delivered Bonsai One, I said, "Let's do Bonsai Two," which is, "Okay, where do you take this company within the next five years?" And that was the basis of our investor day and our five-year plan. So sometimes even in the face of adversity, you have to immediately face the crisis, but you also have to start thinking about what happens when the adversity is behind you?

Ranjay Gulati:
How do you just have to think about that? Because a lot of people go into the freeze mentality, survival instinct kicks in. How do you get people to go find the courage to go beyond that? Is it simply rational communication and say, this too shall pass?

Harmit Singh:
I think it comes from experiences. At that time, the pandemic, I call my sixth recession. I had been through five, and it's showing a bit of optimism when everybody else is pessimistic. You have to be a bit of an optimist. You have to be contrarian in thinking. And my life, one has gone through different adverse circumstances but emerged out of those adverse circumstances stronger [and] wiser. And I've learned through it. And so I use that as a way of motivating people. And people need to be inspired. And the way they're inspired is looking at the glass half full, not half empty. You have to understand that the glass is half empty, but you have to start thinking about how do you fill the total glass when you come out of a tough situation.

Ranjay Gulati:
I'm always fascinated to discover who successful leaders look to for inspiration. Some will name renowned religious, historical, or cultural figures. Others find that inspiration closer to home.

Harmit Singh:
Personally, my Dad and my father-in-law. My father-in-law is a retired general. So he works discipline, but delivers against his commitment. My Dad was very hardworking, was more of a person who engaged and listened as against someone who told you what to do. I think think good role models. In terms of the other folks, I love folks who are creative and who've redefined things. So Steve Jobs comes to mind. He was creative. He was a stickler to detail, but he was always thinking ahead. And I think those are the folks that one looks up to. I think I've had many bosses. The bosses that I learn from the most I look up to the most are people that you can trust, people who watch your back, who give you advice and make sure that they're accelerating your growth and development.

Ranjay Gulati:
Last question for you. We talk about the word purpose. What do you see as the purpose of business going forward more broadly? And then I want to ask you about your own personal purpose in your life as not only as a leader.

Harmit Singh:
Yeah. Levi Strauss himself, from the first profit he made, donated it to charity to drive education and do things that were right. So we inherited that. So I think this is a principle you follow in the company with his profit through principles, which is make money but ensure you do it the right way and do the right thing from a sustainability perspective, et cetera. So I think as a person, I think what I've learned is ensuring that the brand not only makes money but does it in a way that we're doing the right for the planet. We are driving sustainability, we're driving diverse thinking. We have diversity and inclusion as part of our makeup. And taking stands on social issues that, in today's world, corporations need to, because no one else is doing it, because employees demand it.

In terms of my own purpose in life, I'm a family-first person, and the jobs have done the best in are jobs where my values are aligned to the organization. And I'm a big believer that it's important to make an impact. People remember you not for what you did, but for the person you are. And so I spent time developing my team, my talent, and ensuring that we do the right thing, even if it's hard. And so making money with... making it in a way that is sustainable and is done in the right strategies is I think critical.

Ranjay Gulati:
That was Harmit Singh, chief financial and growth officer at Levi Strauss and Company.

For more of my conversations with leaders in the business world, navigating the 21st century business environment, visit my deeppurpose.net website. While you're there, you can also find out about my book titled Deep Purpose. Companies that are serious about establishing and working towards a deep purpose, find that it delivers game-changing results for the workers, shareholders, and the larger society. So visit with me at deeppurpose.net. This podcast is produced by David Shin and Stephen Smith with help from Jen Daniels and Craig McDonald. The theme music is by Gary Meister. I'm Ranjay Gulati. Thanks for listening.