Lessons - Why I Left $140M Corporate Job | Thomas Vozzo - Former ARAMARK CEO

In this lessons episode, explore how mission-driven leadership and discipline business strategy combine to create lasting impact. Discover how non-profits apply for profit fundamentals to build sustainable revenue, understand how social enterprises balance financial discipline with human centered purpose, and uncover why principled leadership decisions drive culture, growth, and long-term results. You know there's a there's a lesson there too and I'm not sure I can't remember the exact framework but when you when you're giving somebody an opportunity a good leader knows how to put that opportunity just right outside their comfort zone of their skill sets that they can level up an upskill to that to that to that job or that that the responsibility that seems like that's basically like the management ethos that you've implemented across the whole organization and that seems to be like it's working it is working it is working now there's other things that you've done what I think are interesting with homeboy so speak to me about you you have three revenue streams you also have done acquisitions of for profit to to subsidize or to add onto those revenue streams and I want this is more just of a creative business lesson for maybe founders or entrepreneurs or CEOs or executives that are in non-profits that have not thought of all the different ways that you thought of to bring in revenue into the company so you have your donations you have your direct revenue and then you have government subsidies but you've done other stuff so walk me through that yeah one good example is we have homeboy electronic recycling in the state of California there's all sorts of rules around how do you dispose of electronic equipment in a proper way and there was this business that started up called visitor electronics a number of years ago and it was you know any oftentimes small businesses struggle to take that first step up they need a capital infusion the woman who started up is it or electronics had wanted to set it up as a for-profit social enterprise in which similar value she won the higher incarcerated people she wanted to sort of lean into and give them the job well what we do at homeboying still did and still do is not only do we have a business where we have jobs and we provide a lot of wraparound services to help that person thrive in their life right at that time that business is needed not just money capital but also wraparound services so we acquire that business first you know acquire that business about $400,000 in top line revenue but we're now at past three million dollars in top line revenue along the way and we still believe it can it can keep on growing so but we kept that a little bit set aside and we kept the management team in place and we wanted to run it with all the hallmarks of any of a for-profit business all the things you got to work on on the on the income statement the cost of goods the efficiency of labor or all that and but we believe that has enough growth and enough margins in it that we can provide level of pay the market-based wages that we want and have it keep keep growing and it's a good business for folks who graduate from our program we call them graduates and we land them into that business as a very for-profit oriented business right and so oftentimes we at homeboy we have a lot of visitors come come to us they ask us how we do the work we do a lot of other organizations come through and you know they always stop in my office and ask about the business side of what we do and one of the first things I say is that think about the the business model you want make sure you're not you know how to do that business model in a for-profit way and then be really clear about what of that then makes it a social enterprise organization so for some companies it's because they're in the green economy and they're recycling product other organizations like homeboy it's about we're going to have more jobs than a for-profit business would have and so the way I think about our businesses is while they break even don't make money the difference between our the profit the profit margin that we don't have is we spend that profit margin extra labor right but every other part of the income statement we we are as good as a for-profit business are cost of goods sold or shrinkage or are are are we buying all that it's just as good but we have more people employ and as we think about growing businesses it's about how many jobs can we produce and how many quality jobs are there and can people have two people upward mobility in that business model I'm curious what your opinion is on on nonprofits as an entity being extremely focused on their mission but less focused on on the business fundamentals and it seems like that was almost even the case before you stepped in there was there was a there's a stress on the business I think that I'm sure some some nonprofits have definitely figured it out but if you think about the traditional nonprofit I've never heard of a strategy like you've deployed and and even the nuances of what you're focused on in terms of like sound business fundamentals and core business fundamentals it's not like you're ignoring the mission obviously actually if anything you're creating a healthier environment to fulfill the mission but do you find that the average nonprofit needs to focus on the mission but also look at some of these other strategies that you've deployed is that an issue with nonprofits whether they can't have a bigger impact or yes it's definitely an issue with nonprofits and also one more issue that gets into that mix is that many nonprofits in the human service space helping people have a majority of their funding coming from government contracts which sort of has the tail wag and the dog at that point and it's you get pushed into doing things that sometimes doesn't make sense it becomes very inefficient so it's this combination of you know being in contract compliance and then I mean do you have a skill to run businesses and do contracts it's kind of hard to do both at the same time and then all of a sudden you've kind of you're lost you have mission creeping you've lost like the true essence of what you're about and and so what it's important is sort of again to have a good board in place that kind of keeps you true to your mission and we have luckily have a good board and a founder who's put it so clear everybody homeboy is so clear if we know what our mission is and there's just the ways of how we implement it is what varies and and if you were going to give advice to somebody who actually wanted to start a nonprofit and they were they they had some business acumen but not to the level that you had and they were very mission driven what would be the steps that you you'd recommend so that they don't get trapped in this loop yeah if you want to start a nonprofit that's a social enterprise is yeah goal find somebody who's run that business in the for-profit world and there are pending folks out there and so many folks kind of like myself who's realized yet you yeah at some point you've made it in business you've made the money you wanted to make but how do you kind of shift this to help other people out and so maybe it's like an older person who sort of wants to help the next generation has one one way of thinking about it could be younger people who've made it and want to help the next generation but it's I'm so clear you have to get somebody who's run it in a for-profit way and just clearly know for us it's the labor line that is different yeah and that is how we treat our employees that is different that we have the labor line means we have more people on in place to do the work because we know we have to give time off for the guy who goes into jail for three days that reduces that we know we got to give time off for the woman who has to go see the probation officer along the way and that's how you have to broad that's up a support service to an understanding around it um one thing that I want to I want to speak about some lessons that you've learned over your career and you said you've had many pivotal moments in your life um because of homeboy and what you but also some of the leadership lessons that you deploy as well so let's just focus on on you a little bit just to sort of tie this up um one of the things that you don't do is you don't take a salary I thought that was very interesting uh speak to me about why you don't and maybe just commentary on if that's a if it's a good strategy if it's more of a marketing gimmick is it something like we see we talk we see billionaires that don't take salary as well so what is the benefit of of not taking a salary um to the organization to the company to even the executive team when they when they look at you do they want to model you in some aspect speak to me about that decision yeah um and let me just get out of the way it's not a marketing gimmick because I kept it acquired for nine of my 10 years I never told I didn't need to insinuate you it was a marketing gimmick but that was in my brain right because yeah yeah all the way back to Leo liiah cocoa and they'll get paid one dollar to produce k-bars right yeah right um I'm told how old I am I'm in the last story you think you dated yourself right I read all good I read books right but listen so let me tell you how I got to that point right so I come to homeboy look I feel blessed my but the work I proud of the work we did at air market was it very six very interesting success story whereas 93% owned by employees and so there was a liquidity event when public then we're in private and then we got cash anyway made a lot of money and so I didn't come to homeboy make money and this is actually if I can talk more about around this question because it's illustrative of why I think homeboy successful it's just I was there who worked for the right time for me and for the home for this organization I just wanted to come help people right and that's a lot of people want I think this could help other people and so I didn't come to homeboy with any ego to say I got I got to I got to brandish myself and make myself into a nonprofit warrior my job was I was going to go make for I want to make father Greg job easier I saw the stress I saw I knew how to run an organization I saw all the stress he was under and yet I see the magic of when he's ministering through the homies and how that changes their life around and so I wouldn't think okay I'll just I'll just do this and so the board said okay they wanted to hire me I said fine we had to put a salary in place thinking that's that's what you do right three weeks into me taking on the role well me being the smart CEO I didn't ask the question before I said yes there's how much money do you have in the bank can you can you make payroll three weeks into me taking the role we have a cash crunch and we won't not going to make payroll and so and this is like that now this is like beginning in January I'm thinking oh my gosh how this anything longs are how it happened but what do you do so you're in scramble mode from that moment on so I did a workforce reduction we trim back expenses didn't take in as many clients I stopped taking a salary and so it was like and then also we had a borrow money to make payroll which is I don't boy any any business that has to start borrowing money make payroll you know you're in big trouble right yeah but I thought we had the right plan in place I knew how to move this forward it was sort of like betting on ourselves that we're going to make this happen and so we made it through the year we you know finally made it through the end of the year fun raising is big in the in the Christmas time area so finally 11 months later where you get enough money paid off the loan and then have a little bit of money in the bank and so from there though I realized I fell in love with the organization and so I could have taken a salary but I was like why not I'm fast saying money I knew we could help three or four more people and I that may not be the right way thinking about it you know I think you know my organizations like doctors without borders you know they go often and help people in other countries and they do they take money they don't take money but and you sort of get into this there's this whole concept of being guilty and having this you have resources they don't have resources type of thing a little bit it was in that place but it was to me my wife and I just made a decision we don't need that thankfully we don't need the money the more people who need more the people need more money more all right so that's our personal decision that we made but the interesting thing is foundation world looked at us and say oh wait a minute you can't afford to pay your CEO but what's wrong with you that's an organization so it it was actually interpreted as a negative it was interpreted as a negative right right yeah along the way and so then you know one thing leads to another and but but where I stand on this the other thing that but where help though is um and this is it's a very unusual situation I can't imagine it's going to be many people in this situation but as I'm kind of working hard trying to make change happen in the organization from a not changing the mission the mission was always strong it was like but are we organized correctly are we spending too much money doing all those things as I'm trying to make change happen internally kind of gave a credibility hey I think Tom's not here to sort of this casher paycheck and making these nutty things he's here to try to repart of this team we're all in this together to to get the organization to a thriving perspective and that's I think that's kind of a long way helping me sort of get the team to move along and get there faster and so you know you get used to it and then it's like well then why start taking a salary at that point after we got more successful and and so I we made it more knowledgeable because you know I wrote this book the homeboy way and I guess I wanted to put it out there because listen I'm not just again it's not just some guy sort of caching in on homeboy it's like no no no no all the royalties go to homeboy all the everything we get helps the organization out it's like here's a message I really believe in in a way of helping poor people our society with more organizations and more people get there the better off thanks for tuning in if you found this valuable don't forget to hit that subscribe button so you never miss an episode and if you want to dive deeper into this conversation check out the links in the description to watch the full episode see you in the next one