A personal loss helped redefine a hard-charging CEO’s approach to building companies and teams. But the core of his mission remains the same: putting a premium on people and passion.
Retail executive Joel Anderson has had some life-changing mentors, from his minister dad and exceedingly welcoming mom to former Walmart CEO Mike Duke. But the person with the biggest impact on his life, he says, was his daughter, Elli.
Elli was born with Rett syndrome, a rare genetic mutation affecting brain development in girls. She died in 2007, when she was 12. “I probably learned more from her, who never took a step in her life, never spoke a word, was always in a wheelchair,” Anderson says.
The president and CEO of Walmart.com when his daughter died, Anderson says he learned how to be a more empathic boss and leader though his and family’s experiences with Elli. He also learned resilience. “We are all going to face some adversity in life,” he says. “It’s what you do with it that makes a difference. “
Now CEO of Philadelphia-based tween and teen retailer Five Below, Anderson was the keynote speaker at a NextGen Speaker Series event held in a Naples studio Feb. 26. NextGen, founded by Naples-based insurance firm Benson Blackburn, is a speaker series that brings in A-list CEOs and business leaders to encourage leadership, mentorship, empowerment and philanthropy. Benson Blackburn President and CEO Michael Benson founded the series with a thought many others in the region have had: There’s so many highly accomplished business titans here there should be a central format and place to learn from them.
Prior to the pandemic, NextGen events were held in person, while the session with Anderson was a bit of a hybrid, with a limited number of in-person attendees. NextGen Managing Director Jennifer Trammell interviewed Anderson at a studio in front of a green screen that transformed into the background of WowTown — Five Below’s corporate headquarters.
The interview focused on what Anderson called his five top leadership lessons. The list includes:
Everyone needs a personal values poster
“For me it’s people, passion and performance,” Anderson says.
“The way you get there, you get influenced in life. I had awesome parents — my dad was a church minister,” he says, adding that his mom was the kind of outgoing caretaker always taking in kids and others from the neighborhood. “We probably didn’t have a holiday where there wasn’t a stranger in the house. It really taught you about taking care of people, looking out for others.”
Passion, Anderson says, is next. That’s something he learned from Duke at Walmart and from several other executives. The passion Anderson has for being in retail, for people and for Five Below, a publicly traded company that did $1.85 billion in revenue in 2020, is apparent in Trammell’s chat with him. Anderson talked excitedly, for example, about how the company is defying the e-commerce trend, opening stores while other retailers scale back. Five Below has 1,000 stores now, up from 300 in 2014.
The third value on Anderson’s values poster is performance. Being third, though, doesn’t mean an afterthought. Five Below shares for example, have increased nearly fourfold over the pandemic, while the firm’s annual revenue has grown more than 120% under Anderson’s leadership.
“If you do those three things in this order, the performance will come,” Anderson says. “Too many people, too many companies get so obsessed with performance first. I believe you have to do it the other way around.”
‘Values are your rocks. Do they move when you hit tough times?’ Joel Anderson, Five Below
Culture matters the most, and it’s driven by values.
Not only values, Anderson says, but also how employees live those values, their behaviors. “All the behaviors within the values [at Five Below] start with the letter I,” he says. “You have to make it personal. You have to make it something [the employee] is going to commit to. When we do reviews, when we talk about promoting someone, we always go back to, ‘Are we living the behaviors that coincide with our values?'”
Examples of I statements, Anderson says, are "I check my ego at the door" and "I respect all people."
“What I would call our secret sauce, what makes us different, is we wake up everyday saying: How do we improve the culture? How do we attract new talent, so we can continue to scale this business? I believe if you want to be an employer of choice, you have to do that.”
The difference between active participation and passive partnership
A passive partnership, he says, is doomed to have problems. “People fail when you’re not willing to be an active participant,” he says.
“At Five Below, at any growth company I’ve been a part of, I need people to participate,” Anderson adds. “I need people who want get on the field and make a difference. I don’t need spectators who are going to sit in the back.”
Growth leaders play offense.
Playing defense, Anderson stresses, is important in a growing company — but in context: Five Below, for example, is one of many companies that conserved cash amid the pandemic, Anderson says. The company also canceled orders and, when states shut down, furloughed employees.
“But we also played offense,” Anderson says, citing two examples.
“The single best thing we did — it was pretty controversial at the time. I don’t think the board was totally on line with this — we decided not to furlough our store managers,” Anderson says. “That was a pretty expensive decision to make. We looked at it like we are in for the long haul. [And] I translated that to we have to play offense. We have to be ready to go when this all over, when we get the green light.”
Anderson says the payoff came in employee loyalty, with managers “who went through walls for us.”
Another example of going on offense? When tariffs led to huge price increases for goods two years ago, Five Below was forced to break its five dollar price point for the first time ever, Anderson says. “It didn’t go over well. We were playing defense. We went to $5.55, $5.75 and were playing of the fives, and the customer was just screaming at us.”
In 2019 Five Below continued playing defense and created a section of the story called 10 below, to sell items $10 or less. “We were just trying to save our P&L,” Anderson says. “And it worked. We hit our numbers.”
But the move from an optics and branding standpoint was a flop. With more downtime in the pandemic, senior leaders at Five Below took another look at solutions, Anderson says. “We ultimately started playing offense and landed on five beyond,” he says. “Now it’s a separate section in the store that’s all about value. It’s probably one of best successes we have going forward.”
Make a difference with your presence versus being present
This is the newest lesson Anderson has learned, stemming from the pandemic. Like many chief executives, he says a full-on work from home (for nonstore employees) was something he never thought could work before the pandemic.
Now that he’s seen it can work in some cases, Anderson is eager to find a middle ground between WFH and in the office. The key, he says, is to find the right blend of things that can be done remote and things that need more touch, feel and collaboration. “When will your presence add value versus just being present and saying, ‘I was in the office, and I saw my boss’?” Anderson asks.
This one is a work in progress. “We, as a company that want[s] to be an employer of choice, are spending time trying to understand what are the activities we do where presence makes a difference and stop requiring people to be there just so they are present.”