Bonobos, the men's fit-focused e-retailer now known for its growing physical presence of Guideshop stores, has been scaling fast.
Cofounder and CEO Andy Dunn says Bonobos, once known mostly for its pants, is selling so many button-down shirts and tailored items that for the first time ever, pants contributed to less than half of overall sales this year. In the past three years, Bonobos has multiplied its shirt sales by seven. Its tailored category, including suits, blazers, and dress shirts, grew 10 times in the past three years, now accounting for about a quarter of total business. (Unbreakable Kimmy Schmidt star Titus Burgess turned up at the Emmys in a green Bonobos tuxedo on Sunday.)
Next month, Bonobos will open its 20th Guideshop in its sixteenth U.S. city (Houston), doubling its door count within the past 10 months.
And just as its business grows at a national scale, Dunn says applications to work at Bonobos have also increased in the last year, even with fewer job openings. The company currently has 320 employees and growing.
In the throes of that momentum, Dunn had transitioned to executive chairman of Bonobos and its sister brands this spring, hiring Coach executive Francine Della Badia as his CEO replacement. But three months later, Dunn found himself transitioning back into the CEO role (Dunn says it was a "bad fit").
Dunn and Bonobos were in need of a company-culture reset. Growing quickly means needing to scale company culture quickly. Luckily, Dunn and his team had already been looking for a "people person" to add to the Bonobos ecosystem before Della Badia ever came onboard.
He found her in Sara Patterson—an HR veteran of Condé Nast, Coach, and more—who started as Bonobos's first-ever CPO this week.
For the eight years since founding Bonobos in 2007, Dunn has helped create a youthful, energetic culture inside the company, he says.
Bonobos hired people on the basis of five values: self-awareness, empathy, positive energy, judgment, and intellectual honesty. All culture strategy went through Dunn and one other employee, who ran human resources and legal. But one day, Bonobos seemed to get too big for two people to handle.
"We started to realize that there was a lot to scaling that kind of a culture, preserving it as you pass 120 to 150 people. You can no longer hold it together through the force of personal relationships and basic systems. You've got to start actually thinking, How do we scale this?" Dunn says. "It would have been great to have had somebody like Sara at that point. But it took us learning what we need to go and find it."
Bonobos hit the 150 mark two years ago. By 2015, with more than 300 employees and a brand-new CEO, it started to become clear that the company's weakness wasn't in hiring good people. It was building good teams. Once they were in the door, Dunn's team struggled to develop their talent and leadership.
When Dunn returned from a summer sabbatical after making the jump to executive chairman, then-CEO Della Badia suggested Bonobos was still in need of its founder at the helm if he was going to stick with the team he hired.
"We agreed that this is a moment where we still need to be founder-led. She said, 'Look, you've got more to do here, and this team that you've built—we've got to take it to the next level with the hires that we're looking for. So I think it would be better for you to lead us from here,'" Dunn says. " There's a reason that you see a lot of turnover when new CEOs come in. Our business is doing really well. It's not like we need to reboot. It wasn't as seamless or as easy as I thought it would be to say, 'Hey, here's someone who's got a ton of experience. She's going to be your CEO going forward—go follow her.'"
So Dunn stepped back into the day-to-day role while continuing the search for a chief people officer.
"The team that we've built right now, we're kind of halfway there. We've brought on a bunch of people from the retail industry. We've also brought on people from the technology side of the house. We've built this customer-service culture," Dunn says.
Now it's Patterson's turn to try to make all those engines run together.
To do that, Patterson is going to focus her energy early on four major initiatives.
The first is to help Bonobos establish systems for scaling. Since it launched the Guideshops in 2011, the growth of the shops has come in more than doubles, going from eight in 2014 to 20 this year, to 30 by end of 2016. And while the Guideshop sales staff tends to be Bonobos’s most engaged, Dunn says Patterson will help cement systems for further growth.
The next task is to establish a protocol for training when new staff is onboarded. Bonobos has a full-time staff of 30 who run customer service for its e-commerce efforts. Their training is a two-week-long immersive training where they learn customer service. But other parts of the company, like marketing and merchandising, just hit the ground running and figure it out on the job.
Another pain point is Bonobos’s process of reviews and promotions, Dunn says. "That's an area where we've done our best, but as we get bigger, there's kind of a mixture of science and art and experience you bring to it. So we're trying to get better at that," he says. "The most important thing that you can offer someone in their career is decision-making ability. So giving people the autonomy to grow and to learn in the roles: We do that in a somewhat unstructured way, and now we want to move to a more structured way. I think it's a logical step at year eight."
To that end, Dunn says leadership development is another focus. He insists he’s hired well for Bonobos’s first phase, but now it’s time to develop his young, enthusiastic staff for the senior, director, and VP levels. "There's more to it than having good people and hitting the numbers," he says.
"Knowing that a company is investing in your growth and development as an employee results in a more positive perspective and better outcomes," Patterson told Fast Company. "We want employees to feel they are evolving as the company evolves, and will do so by preparing them for the next phase of business."
Since she was brought on, Patterson has already started work on a team offsite with a possible third-party facilitator—something Dunn says he never would have considered but credits to her objective outsider eye. "At some stage, no matter how enthusiastic you are about that enterprise as a CEO, you don't actually have the capability set. You've got to go, and you've got to bring it in," Dunn says.
We've recently explored what it means to make company culture stick. For fast-growing home improvement network Porch, fostering an internal company culture is tangential to its approach to customer service.
Dunn says Bonobos is lucky to have a strong customer-service arm and a happy customer base. The web side has a Net Promoter Score of 75 (up five points from this spring), and the Guideshops have a score of 78 (up three points from earlier this year).
And for digitally native companies, company culture is particularly important.
"[Digitally native] brands are so much more conversational and social in nature. And in both the online and the offline pieces, you've got such a direct touchpoint. That's where Sara's work becomes so critical," Dunn says. "We've talked for a few years about this mission of 'being the most-loved clothing company of all time—no, seriously,' and we add the 'no, seriously' as a little bit of a nod to a sense of humor. But we're actually trying to see if we can build that on both sides—both on the customer side and the employee side."
Just as it gauges customer satisfaction with software like Delighted, Bonobos gauges employee feedback with Culture Amp.
"If you want to build this most-loved clothing company of all time, the affinity has to be on both sides. And when it's working, it's like a virtuous cycle. If your team loves the brand, there's a good chance that your customers will love the brand, because people don't want to work on something that they're not proud of. That's where that culture becomes really precious."
Editor's note: Due to copy editing errors, an earlier version of this story spelled Patterson's name Sarah Patterson. The correct spelling is Sara Patterson.