Darrell Lester of Publishers Clearing House On Five Things You Need To Be A Highly Effective Leader During Uncertain & Turbulent Times
Look around you. You can’t schedule inspiration, but you can take it from others. Figure out what your competition is doing and take cues from their success. The sweepstakes at PCH was initially tested when our founder saw Readers Digest do a sweepstakes in the mid ‘60s.
As part of our series about the “Five Things You Need To Be A Highly Effective Leader During Turbulent Times”, we had the pleasure of interviewing Darrell Lester.
Darrell Lester worked at Publishers Clearing House for 30 years, starting as an entry level marketing analyst when it was just a small mom-and-pop company, and he rose through the ranks to eventually become Vice President of Marketing during its peak. He retired as Senior Vice President in 2003. He’s the only person alive to have worked closely with all seven original VPs hired by the founder and the new management team when the old guard retired. He miraculously survived asking for a raise on his first day of employment.
Darrell introduced the company to statistical regression modeling, which dramatically improved the company’s mailing results, and he oversaw the results of the company’s extensive testing program. Most controversially, he was put in charge of recommending what to do with the most apocryphal test result PCH ever realized: a simple eight-letter word that led to an unbelievable 100% increase in sales. He was a key player in the bloody management battle that ensued.
After results crashed and after several rounds of downsizing still weren’t enough to save Publishers Clearing House from extinction, he was appointed to spearhead the once-great company’s final round of downsizing, which enabled the company to survive.
After retiring from his illustrious career, Darrell penned the only book ever written about the inside story of Publishers Clearing House: Downfall of an Icon.
Thank you so much for your time! I know that you are a very busy person. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
I had just graduated from college in the early ’70s and with zero knowledge or understanding of the business world I was looking for my first real job. As I was taking a breather from pounding the pavement in the Big Apple, I happened across an ad for a job at Publishers Clearing House, a company in the New York City suburb of Port Washington, my hometown. I applied, got the job, and started pretty quickly. Given the small size of the company at the time, the organization was pretty flat and I wound up being an entry-level employee working directly for a vice president.
I was so confident in my performance on day one that I went to see my boss at the end of the day, thanked him for hiring me… and asked for a raise. On day one! This is probably the dumbest thing anyone could do, and it demonstrated my total lack of awareness about how business worked. Although he would have been fully justified to fire me on the spot, he didn’t. I wound up staying for 30 years.
It has been said that our mistakes can be our greatest teachers. Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
The funniest in retrospect would be showing my rookie hand on the first day. However, there’s another example that isn’t necessarily funny, but hugely impactful. I had been working at my new entry-level job for about a year when I made an error in some calculations on a 40-page spreadsheet with dozens of numbers on each page. This was in the ’70s, so the spreadsheet was paper and the calculations were done by hand, with the help of my trusty new calculator. This spreadsheet was shared with one of the VPs, who called me to task the next day. He screamed and cursed at me because errors ran rampant throughout the spreadsheet. I was so mortified that I went home that night and pulled an all-nighter to correct my mistakes. I went to his office first thing the next morning, handed him the corrected spreadsheet, and apologized for my mistake. The VP spot-checked that everything was correct and he looked at me with total amazement about how I made corrections that should have taken a week in a single day. Again, this was all done longhand. The next day, he was meeting with the senior team at the company and he told them all about my miraculous corrections. I believe that fixing it all so quickly got me noticed by all the VPs and is the defining reason why my career took off the way it did. The moral of this story: own up to your mistakes and correct them as quickly as possible.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
I owe my career to my first boss, who became a mentor and friend. When Publishers Clearing House started to expand, it became necessary to add a layer of middle management to manage the bigger staff. I wound up working for another manager after building such a solid relationship with my original boss. After about a year, a colleague and I came to the realization that our new boss seemed to be ineffective and not working as hard as everyone else. We both went to our old boss and arranged to meet and discuss the issues offsite at a restaurant. My fellow employee and I loosened up with two drinks each before the VP arrived, preparing ourselves for what we anticipated being a very difficult conversation. When our old boss arrived, he ordered a drink — and so did we, our third in under an hour. Now we were two inebriated employees having a conversation about issues we recognized with our new manager. Our old boss listened intently, thanked us, and left. Left tipsy at a fancy steakhouse, my colleague and I decided to get dinner. Midway through the meal, my partner-in-crime lost control of the Bowie-style knife and flung it onto the next table where two people were sitting. Fortunately no one got hurt, unless you count our egos. Two days later, the ineffective new manager was gone.
Extensive research suggests that “purpose-driven businesses” are more successful in many areas. When your organization started, what was its vision, what was its purpose?
Harold Mertz was in his 50s when he founded Publishers Clearing House, pretty late in life to start a business. He had extensive experience in the magazine industry and he saw a better way to sell magazine subscriptions. It’s hard to imagine, but he introduced choice to the magazine subscription process, letting the US Postal Service do the heavy lifting.
Ultimately, PCH’s purpose was to make money but its vision was to do right by its customers, its employees, who they treated like family, and to those in need. PCH did the little things right (you would find fresh-cut flowers on every employee’s desk every Monday morning), and it did the big things even better. The company was generous beyond compare, as evidenced by the approximately one billion dollars it gave away to philanthropic causes.
Notably, Publishers Clearing House provided pro bono creative support to the fundraising efforts of a local mom-and-pop animal shelter in its hometown of Port Washington, NY. The support went on for more than 20 years, and ultimately helped the North Shore Animal League to become the world’s largest no-kill animal shelter and adoption organization.
Thank you for all that. Let’s now turn to the main focus of our discussion. Can you share with our readers a story from your own experience about how you lead your team during uncertain or difficult times?
Times were great at PCH, until they weren’t. And when times got tough, they got really tough. The only way I knew how to lead was with empathy and honesty. As an example, after several rounds of layoffs, more cuts needed to be done. In this subsequent round, I was directed to let a long-time veteran of the company go. After 40 years, this leader was in charge of a ten-person group of print buyers. And as the world’s biggest direct mail company, print buying was a hugely consequential part of the business. This leader was around so long that he worked directly with PCH founder Harold Mertz.
I took the news hard, but I dug deep and approached the situation with equal parts empathy and business acumen and came up with an alternative proposal. I suggested to my boss that we let this veteran stay and lay off two less-tenured and less-experienced workers since he would be capable of doing the work of the two inexperienced workers. Thankfully, management approved my proposal. Then something amazing happened: I explained the situation to my long-tenured and valued employee and he chose to “retire” early and salvage the two other jobs. I feel confident that I did the right thing for him. He left with honor and on his own terms. In spite of this otherwise fraught exchange, he and I remain friends to this day. We regularly have lunch together and we keep in close touch.
Did you ever consider giving up? Where did you get the motivation to continue through your challenges? What sustains your drive?
After several years of battling for the company’s survival, I did think about giving up. It was absolute ”professional hell,” akin to going to the dentist every single day to have a tooth drilled without the benefit of Novocaine. It was a daily minefield, with new lawsuits and public trust eroding. We were laying off trusted, hard working employees, and we were routinely battling over everything from legal woes to bad publicity.
Imagine being on a roller coaster that clicks upward for 25 straight years, with nothing but fun and anticipation, but when it crests the hill and heads straight down, it doesn’t stop. The fear and disappointment were endless.
The only thing that kept me motivated was the unprecedented camaraderie I had with my staff, my executive colleagues, and our partners. That was enough to stay, and they’re the reason I wanted to help the company survive. For a company whose future was unstable at best, the walls echoed with the fun that happened over the years: An executive gave a speech to the entire company in his underwear; when one of the company’s VPs took a vacation, another VP cleaned out his entire office, floor to ceiling. This, of course, launched a fun but unpredictable war that didn’t end for years. Heck, it still may not be fully over.
Ultimately, there was a mutual respect among all our colleagues that reinforced the trust we had among one another.
I’m an author and I believe that books have the power to change lives. Do you have a book in your life that impacted you and inspired you to be an effective leader? Can you share a story?
While I read quite a few books during my tenure at PCH, I launched the Direct Mail Profit Improvement Team after my departure. My time at PCH was buoyed by being surrounded by amazing leaders I learned from on a daily basis. But when I was on my own, with my own consulting firm, I took great inspiration from reading about the mistakes other companies made. The one that stands out the most is “Enron: The Smartest Guys in the Room,” the book that chronicles Enron’s collapse. There were so many lessons in their story that made it both irresistible and terrifying. And of course living through one of the biggest corporate collapses in history, I learned a lot there, too. That’s what actually drove me to write a book of my own, which gives me instant credibility and has helped me to maintain and grow a steady client base.
What would you say is the most critical role of a leader during challenging times?
This one is tough but simple: be honest, visible and accessible to your employees.
When the future seems so uncertain, what is the best way to boost morale? What can a leader do to inspire, motivate and engage their team?
During the bad times at PCH, I had informal weekly meetings with a randomly selected group of my staff, which was about half the company at the time. These were like “fireside chats” where I listened to their concerns and answered all their questions. I believe this demonstrated both an acknowledgement that the team was being heard, and an entry point for me to bring their concerns back to the rest of the management team. In many ways, just knowing you’re being heard is a morale booster. But I also spent a lot of time acknowledging the continued great work they were producing and reminding them that they had high value for me and for the company.
In tough times a lot of so-called leaders hide away and that’s 100% the wrong approach. Visibility, vulnerability and honesty all build trust and integrity, and when teams feel like they’re working for someone with integrity, there is automatic trust and a drive to do the best job possible.
What is the best way to communicate difficult news to one’s team and customers?
There’s no way around it: with caring and honesty. Sometimes honesty is really tough, but it’s an essential quality that too many people in leadership positions lack. It’s brave to be honest, especially in the toughest times.
How can a leader make plans when the future is so unpredictable?
Always have several options at the ready. For example, I knew I had a few options when things were really going south at Publishers Clearing House. I could have retired early and left the woes in my former colleagues’ hands, but I chose to stay the course and see it through. Over the course of several years, the company lost tens of millions of dollars per year. Things were really, really rough.
I finally decided to resign when the team and I managed to lift the dismal results back to breakeven. While that might be a good result for any company suffering through a terrible slide, at PCH it represented a profound sea change. This was the company that couldn’t lose, and it was losing. I did everything I could, and when we talk about an unpredictable future, that’s what these results represented. I couldn’t imagine staying aboard to watch the incredible company I helped to build collapse before my eyes.
Is there a “number one principle” that can help guide a company through the ups and downs of turbulent times?
Treat employees with respect.
Can you share 3 or 4 of the most common mistakes you have seen other businesses make during difficult times? What should one keep in mind to avoid that?
There’s really just one that’s so critical that it’s worth calling out: treating your employees, collaborators, clients, vendors, customers and partners with the utmost respect. Each of those stakeholders has to believe in what you’re doing, and when the chips are down it’s harder to maintain that belief. It’s essential to maintain a position as a shining beacon of trust that makes people want to work with you in the first place.
This example is not about another business but about PCH. We once “owned” our marketplace as the only direct mail sweepstakes company offering magazine subscriptions. Many tried to copy what we did and failed, and our senior management made the fatal flaw of treating the magazine publishers with disrespect. PCH thought it could get away with this because the magazine publishers needed the subscriptions we gave them, but when our biggest client requested a higher fee for their magazines, and PCH’s senior team laughed at the request, it prompted Time Inc. to partner with Meredith, McCalls Magazine, and the Pritzker family (one of the richest families in America) to start up a major competitor, American Family Publishers.
Here is the primary question of our discussion. Based on your experience and success, what are the five most important things a business leader should do to lead effectively during uncertain and turbulent times? Please share a story or an example for each.
Listen to your employees and watch what companies in your industry are doing. Good ideas can come from anywhere. A couple of examples follow.
- Look around you. You can’t schedule inspiration, but you can take it from others. Figure out what your competition is doing and take cues from their success. The sweepstakes at PCH was initially tested when our founder saw Readers Digest do a sweepstakes in the mid ‘60s.
- Get creative, always think outside the box, and listen to ALL voices in the room. The iconic Prize Patrol, which made PCH a household name, was an idea from a young employee who had been at the company for only a couple of years in a lower level job. His idea, which many leaders at other companies might have cast aside given his level, completely changed the trajectory of the company and definitively inserted PCH into the zeitgeist. It was an undeniable pop culture revolution.
- Recognize when it’s time to evolve, but test everything and do only what works. The lick-em and stick-em magazine stamps were successfully used by Doubleday in the late ’60s. PCH copied the idea and it was effectively used for many decades. As familiar a device as those stamp sheets became, it seemed like they ran their course. When we tested sticker-style stamps, the results just didn’t work. As old as the original stamps seemed, people liked them, so we kept them.
- Anyone can look like a great leader when things are good, but leading through turbulent times takes true leadership. Never, ever run away when the heat gets turned up. The 25 incredible years I spent at PCH were punctuated by five of the most painful I could imagine. Those 25 great years set the stage and prepared me for the test I would face and I marched our team into the unknown. It wasn’t easy, but it was rewarding in its own way knowing that I was there to support my team and my team showed up to support me.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
I had a wooden plaque on my desk which said “ATTITUDE.” No matter what the situation, always have a positive and healthy attitude.
How can our readers further follow your work?
I encourage everyone reading to learn more about Publishers Clearing House by getting a copy of my book, “Downfall of an Icon.” Not only is it a fascinating business story but the tales of contest winners and laugh-out-loud comedy from a mischievous management team are pure entertainment.
Thank you so much for sharing these important insights. We wish you continued success and good health!
Thank you.
Darrell Lester of Publishers Clearing House On Five Things You Need To Be A Highly Effective Leader… was originally published in Authority Magazine on Medium, where people are continuing the conversation by highlighting and responding to this story.