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Podcast: Creating Your Shot, Business Insights from Earvin "Magic" Johnson

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Earvin “Magic” Johnson, the NBA Hall of Famer turned business icon, understands the everyday challenges that small and medium-sized business owners face.

Like virtually every entrepreneur, Mr. Johnson has had to learn how to solve tough problems, meet the changing needs of consumers and pivot in the face of adversity.

In this episode of Longitudes Radio, Mr. Johnson speaks with Gerard Gibbons, President of SMB and U.S. Marketing for UPS, about applying the same skills he used in the NBA to succeed in business.

Among those skills are leadership, agility and the commitment to over prepare and over deliver for stakeholders.

Bonus: Mr. Johnson also reveals who he’d bet on — and why — in a dream seven-game series between the 1987 Los Angeles Lakers and the 1998 Chicago Bulls.

Mr. Johnson has always focused on leading with purpose and putting people first. His investment firm, Magic Johnson Enterprises (MJE), centers on businesses that provide products and services to urban and underserved communities. MJE fosters economic empowerment, employing a diverse workforce and contracting with diverse suppliers.

That model has guided its strategy during the pandemic, which includes prioritizing the needs of its employees and the communities it serves.

For example, Mr. Johnson has refocused his food services company, which caters to businesses, to double down on feeding hospital workers on the front lines and children in school districts who would otherwise miss school lunch programs while distance learning.

That’s not surprising. As a Laker, Mr. Johnson was an all-time leader in assists, seeing opportunity from all angles. He’s still at it, passing the ball to empower others around him to take the shot.

Mr. Johnson explains: “It’s not about whether you become successful. It’s how many people you can help to become successful.”

Podcast: Creating Your Shot, Business Insights from Earvin "Magic" Johnson

Show open [00:00:04] Show open

James Rowe [00:00:42] So, Brian, you won't believe who's joining us on the show today. This one is amazing. We've had a lot of greats over the years on Longitudes Radio. But this one's like right at the top. I'm talking about the number one point guard of all time. And that's just not my opinion alone right.

Brian Hughes [00:00:57] No that's established fact at this point. If anyone says otherwise, they're just flat out wrong.

James Rowe [00:01:02] Yeah. And who are we talking about? We're talking about Earvin Magic Johnson. CEO and chairman of Magic Johnson Enterprises and NBA legend. He's on the show today.

Brian Hughes [00:01:13] So, James, why don't you tell us a little bit about who's joining Magic today?

James Rowe [00:01:16] Well, that's our very own Gerard Gibbons. He's UPS's president of Small and Medium Sized Businesses and U.S. Marketing.

Brian Hughes [00:01:24] And yeah, James, it's a really outstanding conversation. I love how Magic talks about this idea that when they first went into the world of business, he thought to himself, hey, I'm Magic Johnson, I can get by on my name alone. In reality, he had to go back to a lesson he learned on the hardwood: that to be successful, he actually had to create his own shot.

James Rowe [00:01:45] Yeah. And that translated into some tangible examples that small businesses, entrepreneurs can use, especially during the pandemic times. I'm going to tease out just two of those: Starbucks franchises, movie theater launches. He faced headwinds all throughout that process and he came out a winner.

Brian Hughes [00:02:04] Whether you're an aspiring entrepreneur or perhaps struggling during these tough times. Magic has some lessons that can really help you be unstoppable in your journey as an entrepreneur.

Gerard Gibbons [00:02:19] So thank you, Magic. And again, it's an honor to have you here today. You know, I grew up just 10 minutes from The Forum in Inglewood, California, and I watched a lot of Laker basketball. I'm a huge fan of yours and the Lakers, but I'm an even greater fan of how you pivoted from NBA All Star to all-star in business. And I'd like to ask if you could share some of your, you know, the winning qualities that carried over from basketball to business.

Earvin "Magic" Johnson [00:02:50] I think, first of all, just a winning attitude, right. I'm a competitive person, so not just on the court, but also in the boardroom. I would say my focus, so you have to be focused as a basketball player, just like I'm focused as a CEO today. I would say the discipline you know, I was a disciplined basketball player, always making sure that I tried to do everything the right way and also making sure that my teammates also was doing things the right way, and then preparation. I think that, you know, I prepared for every opponent, not only as a team, but also individually, because you always have to know who you're going up against. And I overprepare for everything as a CEO. So (laughter) and then I would say that strategy, because we had to have great strategy to win five championships in the NBA. And I have to have great strategy now as a CEO. So, I think those are the things that, really, I carried over from basketball that has helped me become a successful businessman. And last but not least, you know, we all have to understand that in this environment, you really have to be a good decision maker, right, a good leader, so I will say leadership is also the probably the most important thing that I brought to from basketball to the boardroom.

Gerard Gibbons [00:04:26] And, you know, I'm sure we have a lot of folks in the audience here that are wondering what do Magic and UPS have in common. So, you know, we're both committed to the communities. We're both committed to the success of small and medium sized businesses we're, we're both committed to diversity and inclusion. And, you know, you're a leading voice, leading voice on how to invest in urban communities. What tools and support do small businesses need, especially right now during these times?

Earvin "Magic" Johnson [00:04:55] Well, I think, first of all, you know, making sure that they have the right the right technology. It's very important because if you don't have the right technology in today's world, you're going to probably miss out on your profits. You're going to, can't keep up with, you know, the deliveries or just keep up with what's going on in your business and not only your business, but what you have to do with your client's business as well. And so, I would say, number one is the right technology. Second, the right employees, making sure you've got the right people in place, because just like, you know, Gerard, you know we run a company, but there's other people who execute the vision and the strategy and they manage the clients. And so, we must have the right people in place to do all those things, right. And so, I would say those are the two most important things. And then last but not least, make sure that your brand speaks to something. What is the value of your brand? What will your brand stand for? Because that's going to be very important. Because I know for me, my brand is always about touching and giving back to the minority community, right. And so, I've always been about that. And so, make sure that your brand speaks to who you are as a leader and as the CEO of your business.

Gerard Gibbons [00:06:29] I want to come back to talent in a minute, but I want to ask a question about your early days in business. I know a number of banks were reluctant to give you financing to support your, invest in your or your business ventures, can you talk about your persistence and how you overcame some of those challenges?

Earvin "Magic" Johnson [00:06:50] Yes. You know, I thought being Magic Johnson was going to give me a leg up, but actually it hurt me (laughter). You know the bank said come on in we gonna take the meeting and we want the picture and the autograph, but we're not going to give you no money. We don't believe in your business thesis, we don't believe in your business plan. And last but not least, they didn't believe in urban America. And so that that really set me back. So, I had to go for three years straight, you know, I was denied, I was turned down. And so finally, after nine banks, ten banks said no, finally they said yes, one did. And that's when I took off. I believed in my business idea and my business plan. And when that one bank said, yes, I was able to grow and now I have the growth and the sustainability that I was looking for. But let me just tell those out there, hey, you going to get turned down, no question about it. But keep going because somebody will say yes. And then when somebody says yes, you got to make sure you overdeliver to that bank or to that financial institution. And then last but not least, let me just tell you, institutional capital was not ready either not just the banks, but institutional capital. So, I went to the CalPERS, CalSTRS, those type of, and they all turned me down, too. But, I kept going so much, Gerard, that they finally said, OK, we're going to give you 50 million dollars. If you overdeliver with the 50 million, you can come back and get one hundred more million. So, I bought a shopping center. It was only 40 percent occupied. I took that center to one hundred percent occupied. Resold that center from paying twenty-two million. I resold it for forty-eight million, took the twenty-six million up to CalPERS and see I know business and there's money to be made in urban America. And that's when they open the floodgates for me to get as much money as I wanted.

Gerard Gibbons [00:09:03] And I want to, I want to pivot a little bit and talk about reinvention. You obviously reinvented yourself from basketball legend to an all-star in business. And Covid is forcing a lot of small businesses to reinvent themselves. And you had to reinvent one of your real estate ventures during the financial crisis. Can you can you share that story?

Earvin "Magic" Johnson [00:09:27] Well, I think first let me just say don't be afraid of change. That's number one. And don't be afraid to think outside the box. That's number two. So, I had a real estate fund and we were we were very successful, but, the market crashed, so we were building these high-end condos and in the first couple of years it was going very well. But, when the market crashed and we were in a recession, this was a few years ago, we had these condos still built. And so, we had to look and say, uh oh, we can't sell them. So now we have to reinvent ourselves. So, let's go to a renter's model. So, we went right from a seller to a renter's model and it took off for us. So, we were still able to make money. Yes, we didn't make as much, but we were still able to make money just by pivoting from selling them to renting them. And so those are the things you have to look at now during these tough times. How can I still survive? How can I still have a successful business? Do I have to tweak it? Do I have to go in another direction? I'm in the same situation, so I don't want to pretend like I'm not in the same situation that most of you are in. Because my business, Sodexo Magic, we supply food as well as we're a facilities management company. Now, the facility side, we're OK. But, on the food service side, we have to make decisions now because corporations are not, you know, employees are not in the buildings anymore. So, we had to look at those contracts and say, OK, wow, we're not going to make money from these corporate from these corporate partners that we've had. But now the school districts, though, we can make money because no matter what kids, whether they're in school or not, we're still feeding them two times a day because most of these are poor neighborhoods and these kids are poor. And if we don't feed them that breakfast and lunch, they will go hungry. And so, we're still feeding the kids and then we've taken care of people in hospitals. So, I'm glad that my workers are still on the front line doing Covid, taking care of cleaning hospitals, feeding the patients that are in those hospitals. So, we're losing money, too. And I had to take a look at my own business and say, hey, how can we stop the bleeding, though, that we won't lose everything and we can still stand here and be a successful company. And that's what I've been able to do.

Gerard Gibbons [00:12:14] You've talked about customer experience, doing your research, over delivering, and selling an experience. Can you can you share how you go about developing a game plan that's really focused on, you know, customer experience?

Earvin "Magic" Johnson [00:12:30] Well, let's just take my Starbucks when thank God that, you know, I'm a guy who is not bashful. I don't think you can be as a business owner. So I went up to Seattle knocked on Howard Schultz door CEO, Chairman of Starbucks and said, hey, look, Latinos and African-Americans, we like coffee, too, and we're some of your best customers, too. But, we have to drive outside our community to go get a cup of Starbucks coffee. And I showed him, Gerard, how he could grow his business, but it would have to be through urban America, right. And I showed him how we were making a lot of money from the movie theaters, Magic Johnson Theaters. And I showed him that, hey, we got a 1.5 Trillion-dollar spending power, African-Americans. Latino with another 1.5 Trillion-dollar spending power. So that's three trillion dollars that he could go after. So, I told Howard a couple of things, though, Gerard have to change to make sure that people of color can have a great Starbucks experience. Number one, we got to take that elevator music out of my Starbucks cause that will never work in the inner cities. So, I got to put Michael Jackson, Prince, Lionel Richie, Beyonce in my Starbucks. Second, I said if we want to make a lot of money and be successful, we got to take the scones out of my Starbucks 'cause black folk and Latino folks don't know what scones are. So, we like peach cobbler, sweet potato pie, sock-it-to-me cake. We put that in, now, my per-caps were $5.59 his per-caps were $4.59, so we were beating his suburban stores. That's how we changed the customer experience. Why. Because now if I'm in there and I'm having my cup of coffee and I hear the music that I like, you're going to sit there and say, wow, this is my place. The dessert that you like is sitting right there. You're going to say, man, this is my place. Because what you want your customer to say, this is my place, because I'm having a great customer experience right here at this Starbucks and I'm gonna come to this Starbucks or this place all the time. And so, I opened up a whole new market for Howard Schultz and Starbucks. So, we built a hundred and twenty-five together. Now they got thousands of stores in the inner city all across America.

Gerard Gibbons [00:15:00] A great story about knowing your customer and your audience and then over delivering to to the consumer.

Earvin "Magic" Johnson [00:15:07] That's right. And when you do that, then you get everything that you want, right. They become your brand ambassadors. So, they'll go out and speak about your business to their friends, their friends when they at church on and on and on, and tell so many people how what a great experience they had at your business. And so that's what you want. When you over deliver, you get that they become your brand ambassadors.

Gerard Gibbons [00:15:31] I want to come back to the point on talent. And you played on some great basketball teams with some incredibly talented athletes, can you talk about how you build your team in business and the importance of building diverse teams?

Earvin "Magic" Johnson [00:15:46] I love playing with the best. I know a guy asked me, he said Magic do you think you're the best basketball player? I said, yes. Then you should always run with the best people. And he was exactly right. So, when I think about the talent, you know, I just try to get the best people who are experts at their jobs, who also love completing the project. And I hire people who are smarter than myself. If I say, hey, I think we should do it this way and they have a better way of doing things, I want them to say it. So, I think that for me, I let them innovate. I let them, I don't micromanage my people. I just go out and get the best people. Because diversity of opinion is really good in companies. And that's how those companies win. If you just got if you don't have even minority people working in your company, it's hard for you to win. I think it is always good for everybody. And the data shows this too. The more diverse opinion and thought and ideals that you have at the table. Those companies win.

Gerard Gibbons [00:16:54] I want to just ask you a quick question on mentorship. I know Dr. Buss was a huge mentor for you in business. How important was it to have a mentor like Dr. Buss and how are you paying it forward for those that aspire to be like you on the business side?

Earvin "Magic" Johnson [00:17:10] When I was young, 15, 16 years old, only thing I wanted to do was play in the NBA. I ran into two gentlemen where I grew up in Lansing, Michigan, Greg Eaton and Joel Ferguson, who look like me. And I didn't think that we could own car dealerships and buildings and businesses until I ran into these two African-American men. They changed my whole thought process. I went from saying, I want to play in the NBA to saying I want to play in the NBA and I want to become a businessman. And I asked them, Gerard, for a job. So, on Friday when I got out of school, I would run over to that office after six o'clock and start cleaning the offices. So, Gerard, I believe in this. If you don't dream it, you can't become it. So, I would get to the CEO's office and I would bust in and start dreaming like I was the CEO at 16 years old. I would recline the seat and put my feet up on his table and pretend like I had an assistant out front hit the intercom button to say, hey, Sally, can you bring me some coffee and donuts in the day's paper? I will sit there for two or three hours dreaming that I was the CEO. Well, here it is over 40 years. I am the CEO. So first, I would say dreams are important as well as mentors. Those two guys became my first mentors. Dr. Buss took me to a whole 'nother level because he said, hey, I know you want to be a businessman, so I'ma show you the Laker, open up the Laker books to you, show you how we make money. So, he showed me what season tickets meant, sponsorships meant, the radio deal meant, TV deal meant. And I was like, wow, I was blown away. This is the real Laker business right here. So, he gave me, man my best business lesson. And then I just took off from there. And then I did something very unique as an athlete, Gerard, I called him up probably a month or two later and said, hey, can you give me the phone numbers of the season ticket holders, especially the CEOs and Presidents of companies? I want to ask them to go to lunch with me and so I could pick their brain. He gave me the phone numbers, I call it about 20 to 50 people, and they all say yes (laughter) and we went lunch and I picked their brain. And so, seven of those guys I'm in business with right now, they became my mentors over 30 years ago. And so, again, I'm constantly learning. I love knowledge. I love the fact that I don't care who it is, whether it's my junior employee, the receptionist, I'm open to change. I'm open to learning, I'm open to adapting and adjusting. I've done that. And I want everybody to be able to do the same thing. You're quick, nimble enough to change right now. So, if you have to make a change, be able to pivot quick and make sure your business is still up and running.

Gerard Gibbons [00:20:15] So I know the you know, that mentorship is important. You talked about, you know, your approach to learning. What have you learned that that no one else taught you just from, you know, working in business?

Earvin "Magic" Johnson [00:20:28] Wow. You know, I think it's just really how do you add value? Right. You got to think. How you can add value to companies like UPS or if you're trying to get a contract with anybody, Coke, Pepsi, it doesn't matter. You know, how are you going to add value to that company. If you're chasing that RFP how can you add value? That's what you have to figure out. Because what I figured out is once you figure that piece out, you got a good chance to really win the RFP, or win that contract. So, I think that's the thing that for me became a really a piece of the secret sauce for Magic Johnson Enterprises is every time I go into a company or go after a potential client, I'm a lay out how I could add value to that company or to that client and or to that investor. That's always the game plan for me, is to add value and show them and spell it out to them how I can do that.

Gerard Gibbons [00:21:30] You know, one of the things that I really loved about watching you play basketball was how you made everybody on the court much better. I mean, you made average guys look great, great guys excel. And I saw a quote from you that that's very similar to a quote from our founder, Jim Casey. He said he said it in the 1940s. But your quote is "it's not whether you can become successful is how many people you can help become successful." And our founder, Jim Casey, said "one measure of your success will be the degree to which you build up others." So, can you tell me a little bit about your philosophy of bringing others along with you in your success?

Earvin "Magic" Johnson [00:22:14] Well, you know, again, whether it was Starbucks, we gave a lot of contracts to minority suppliers and vendors. Whether it's Sodexo Magic right now, we make sure that we give contracts to minority suppliers and vendors so that we can bring them up, so we can write them a check and also try to teach them if they need to learn something we want to teach them. So, I don't care if they're cleaning the windows or if they have a dessert, some people sell cupcakes. So, we say, hey, you've got to package them right. We got to have it like this. Not like the way you're packaging them already. Or we may say, hey, we need a thousand cupcakes or we need a five thousand donuts. We can't we can't do it like you give me 20. So, we try to teach them, too, that if you're going to do business in big business, then we need it like this and then we help them. OK, if you don't have the right equipment, let us help you get the right equipment so you can now have a contract not just with us, but with other companies as well. So, we try to give back and teach small mom and pop business owners how they can take their business, not just to this level, but then take it to this level, right. With both knowledge and if we have to give capital, if we find really good companies, and we've done this over and over again, we would also give them capital so they can go to the next level. So again, that's how you pay it forward. That's how you really help our community grow. Small business owners grow. And again, it's not whether I can be successful. How many people can you help become successful? That's what it's all about. And it's the same thing away from business, too. That's why we give scholarship, 125 scholarships to young people of color. So again, paying for giving it back, reach back, help somebody else so that they can accomplish their goals and dreams. That's what I feel good about Gerard and I'm gonna continue to do it. That's why I put up $325 million dollars to grow small business owners business to make sure that they keep their business and their doors open at the same time. And I'm always continue to do this, you know. That's why UPS and Magic Johnson Enterprises have a great relationship, you know, because you guys are about the same thing.

Gerard Gibbons [00:24:45] What's next for you, Magic? What are you thinking about as we as we come out of this pandemic on the other side? What's Magic Johnson Enterprises thinking about?

Earvin "Magic" Johnson [00:24:54] Well, I think for us, we launched our infrastructure company. I know there's going to be so many different opportunities for us. We're the first minority owned infrastructure company in America and we've already won the Denver airport. We won LaGuardia. Well, that that project is already done. And what was so unique is we brought along hundreds of minority-owned firms to participate. That was almost a $4 billion deal. And then we won the Kennedy Airport as well. So, again, we're bringing along firms with us. So, what we do, Gerard, is really we have a community meeting. So, everybody that wants a contract with us or with the airport, once we win that contract, we then vet them and say, hey, these are all the contractors that's going to be available, you know, tell us what you can do. And then we give contract to those minority firms.

Gerard Gibbons [00:25:48] That that is so awesome Magic. Congratulations on those three big projects. I can't I can't let you get out of here without asking you a couple of questions about basketball. My coworkers, they wouldn't let me come back into the office if I didn't ask you a couple.

Earvin "Magic" Johnson [00:26:05] Ok.

Gerard Gibbons [00:26:05] My first question, my first question, who's your basketball Mount Rushmore? Let me give you my real quick.

Earvin "Magic" Johnson [00:26:13] Ok.

Gerard Gibbons [00:26:13] So on mine I got you first. And this order I got you, I got Michael Jordan, Kareem, Larry Bird and Kobe Bryant.

Earvin "Magic" Johnson [00:26:23] Yeah. I mean, you just name them. I would take myself off and just put LeBron because, you know, you can't pick yourself, so.

Gerard Gibbons [00:26:31] Yeah.

Earvin "Magic" Johnson [00:26:31] What you do is usually pick another guy. So, I would pick everybody that you said and then I would just add LeBron.

Gerard Gibbons [00:26:39] OK, that's a that's a good pick.

Earvin "Magic" Johnson [00:26:42] Unbelievable team right there.

Gerard Gibbons [00:26:44] Yeah. And then, you know, a lot of people watched The Last Dance with the Chicago Bulls and their last season, and it was kind of the thing to do during the pandemic. So. So who would win a seven-game series, your 1987 Lakers or Michael Jordan's 1998 Bulls?

Earvin "Magic" Johnson [00:27:05] Well, Gerard, I already told them that we would kill his Bulls. You know Michael, Michael, hey Michael, Gerard, would get his, and Scottie'd be OK. But, listen, there's nobody on the Chicago team that could handle Kareem Abdul Jabbar. There's nobody on the Chicago Bulls team that could handle James Worthy. And that team, that Laker team was one of the greatest of all time. Now, the Bulls, they were great. My hat's off to Michael, you know, winning six NBA championships. And so, but, at the end of the day, when you come up against my Lakers with the firepower that we had, with the defense that we had, and then last but not least, the coach that we had in Pat Riley, Showtime was just amazing. It was nothing like coming down the fast break and know I got James Worthy on my right, Byron Scott on my left. Oh, man. Kareem trailing, A.C. Green or Kurt Rambis trailing, Bob McAdoo, Jamaal Wilkes, Norm Nixon. I mean, I had, Michael Cooper. We had too many guys, man, that know how to win that want to win. And so, I told Michael, I said you guys were great, but we would have took you guys out. And I tell you another thing too, the Boston Celtics, Larry Bird, Robert Parrish, and Kevin McHale, that front line, they would’ve probably beat the Bulls too (laughter). Hey, hey, Gerard, everybody goin' crazy, now, what did Magic say?

Gerard Gibbons [00:28:40] We got we got to edit this part and send it to Michael Jordan.

Earvin "Magic" Johnson [00:28:52] And send it in a UPS box.

Gerard Gibbons [00:28:52] Magic, you know, I can't thank you enough. It's been so valuable to get your insights. I want to thank you for your time. And I really want to thank you for your leadership in the community. A lot of great work that you're doing, providing opportunity. Before we close out any final thoughts you want to share with our audience?

Earvin "Magic" Johnson [00:29:09] You know, I think that, you know, keep up with what's going on in the in the world. Keep up with the trends. Keep up with making sure you understand that we will get back. We just don't know how soon things will get back. Now, will it be all the way normal? I don't think so. Not all the way. But it'll get close to it. So, make sure you monitor, you know, the sector that you're in. Because that's very important. OK, what's happening in the business arena that your business is focused in? So, I'm looking at all the sectors that I'm in and I watch all the trends, right. I'm in the sports business. So, my Dodgers, we've lost a lot of revenue because the fans are not in the stands. So that means parking, concession stands, tee shirts and hats, all those things. We, we're not getting those revenues, but we know that next year will probably be back. So, it's those type of things that you got to keep up with. But also, during these tough times, this is what I did, Gerard, this is very important. I picked up the phone and I called over a hundred clients in one business. Hey, are you OK? What you're doing? Everything's OK? What can we do to help you and your company? Then I picked up the phone and called hundreds of more clients and other businesses that I have, right. So, I just picked up the phone. During this time, please reach out to your clients, reach out to your customers, still engage them, even if it's over Zoom or whatever, just check on them, just say hello and that will go a long way. And so, my advice to you, make sure you just reach out and say hello and it's going to come back to you. Keep your head up, keep praying. And I think everything going be OK and we'll close out the fourth quarter and get ready for the first quarter of 2021. And I think everything's going to be great. Thank you for having me on.

Brian Hughes [00:31:11] If you like what you heard today, check us out and leave us a review on iTunes, Spotify and Stitcher.

James Rowe [00:31:16] You can also read our blog at UPS.com/longitudes, where we post new content every weekday.

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