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Proven Podcast
Prison Into Profits
00:38:35
In this compelling episode, Charles explores the transformative journey of Tom, a seasoned business leader turned advocate for social impact. Transitioning from managing billion-dollar enterprises to leading Homeboy Industries, a nonprofit dedicated...
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- [00:00]
A
Welcome to the I am Charles Schwartz show. Today we're diving into the extraordinary journey of Tom Vaso, a corporate titan who walked away from a $2 billion business empire to revolutionize how we think about leadership, hiring, and human potential. In this episode, Tom shatters every preconception about who makes a good employee, revealing how he transformed homeboy industries by hiring the very people most businesses reject, former gang members and felons. He exposes the raw truth about the impossible choices faced by the working poor and how traditional business practices often perpetuate cycles of poverty and recidivism. Get ready to discover how Tom proved that seeing potential where others see only past mistakes isn't just good for society, it's good for business, as evidenced by the fact that 2/3 of homeboy's management team are former clients who've risen through the ranks. If you're ready to learn how one leader's wake up call during the 2008 recession led to a complete reimagining of what business success looks like. This episode is your blueprint. Tom shows us how questioning the status quo and focusing on people over profits can create sustainable growth and meaningful impact, transforming not just individual lives, but entire communities. The show starts now. Welcome to the I am Charles Schwartz.
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B
Show where we don't just discuss success.
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A
We show you how to create it. On every episode, we uncover the strategies and tactics that turn everyday entrepreneurs into unstoppable powerhouses in their businesses and their lives. Whether your goal is to transform your life or hit that elusive seven, eight, or nine figure mark, we've got the blueprint to get you there. The show starts now.
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B
All right, welcome back to the show. Today we're talking to Tom. We're going to talk about diversity and his history and how you can really change how it works in the workforce. Welcome to the show. I appreciate you being here.
- [01:42]
C
Thanks, Charles. Good to be with you.
- [01:43]
B
So let's the audience get caught up on who you are and what you've done. You know, off camera, we were talking a little bit about getting your history. You've done some really impressive stuff. Let's get the audience caught up.
- [01:53]
C
Yeah, sure. I grew up a middle class kid. My brothers and I are first generation college graduates. I go right into graduate school from my undergraduate and then I land in a small company up in Boston, family run business. And you know, we at that time, it was about a $50 million business. In my time there, we scaled to $300 million run by the family. Had all the attributes of a family run business. A lot of other family members in there, but also bring in professional managers. They sold to a bigger corporation which then launched me into my corporate career. Ended over 26 years. My last eight years I ran a $2 billion set of businesses for the corporation. And now what I do is I do a nonprofit and I run Homeboy Industries which were nonprofit in Los Angeles helping gang members and felons leave gang life behind and life a crime behind and he own and mainstream back out to society.
- [02:46]
B
There's that's a huge change from first off Boston to LA is a completely different change. I'm from Florida and I don't know, you might be able to explain this to me. There's this white cold stuff that falls out of the sky in Boston. I'm not really sure what that is. It's a huge change when you go from Boston over to la. More so going from what you used to do, you know, going to multi million dollar or billion dollar industries into this not for profit. That is homeboy. What was the drive for that? Why did you decide to pivot over into that?
- [03:14]
C
Yeah, you know, I, I sort of say it this way. I had my, my epiphany moment back. And if I can give you a little longer story to this, back in 2008, which is now a while back was the Great Recession of 2008 and our corporation, we were a private corporation for a number of years, then we went public and then and then public for five years and back to being private again. So I had the fortunate to be there for those transactions and did well for myself and my family. But now this is the first couple years of being a private organization. Private equity owned us and so we had to deliver upon our numbers. So the big 2008 recession comes along, employment levels drop by 10%, which means the businesses we're in, revenue dropped by 10%. And all of us as executive leaders, our executive officer of the corporation have to do all we can to get our businesses right sized for the recession. And so at that time my set of businesses again, $2 billion on the top line, about $150 million of operating profit on the bottom line. That was the budget. I thought we did a good job. We were kind of come in at 140 million, only missed by $10 million in the middle of the quote unquote great recession. And I still remember two days before Christmas being on the phone with the chairman of the corporation. He was essentially berating me and yelling at me. It wasn't good enough. I needed to get that next $10 million I needed to get back on plan. And I'm thinking to myself, we've been at this a long time. I know that get that next $10 million, how many people have to, how many more people I have to lay off? And I also smart enough know about the business that it once coming out of the recession, I'm going to need all those people back. And so it got me thinking, what's the long term commitment we have to our employees? If we're an employee based organization, how's that all play out? And so something said to me, shoot, in this capitalist society we're in where shareholder value dominates the caring for the employees, that's not so good because well run companies have three things it does well in the marketplace of shareholder value. Customers want to give you money for the products or services and you have a great place to work for your employee base. And I felt like that all of a sudden things were out of whack. Now listen, I'm a committed capitalist. Even today when I do speeches on behalf of Homeboy, which is a nonprofit, I'm in the audience, I say I'm a committed capitalist. A murmur goes across the audience about, oh, he's one of them. But again, well run companies are good for people. But something clicked in me saying, look, there's got to be a better way. And so listen, I wasn't the final decision maker, you know, so I did what I needed to do. But I knew that. So thereby a couple years later when my golden handcuffs on cuffed, I wanted to do something different. Something in my mind says, how can we run businesses where employees are just as important in the long term value as the shareholders and do that in balance? All right, so that's what was behind me. So I left the corporate world. A friend of mine invited me to come down to have lunch at the Homegirl Cafe. We're here in Los Angeles. If he's my friend, we were on the board of Salvation army of Los Angeles. We've always thought, give back, be on boards, be part of charities, right? So I'm having lunch at Homegirl Cafe and I'm thinking, and I'm looking around and I'm looking at the employees and employees are working hard, they're smiling, they're engaging with the customers. And by the way, my background, my last eight years I bought 40 companies and sold four in my for profit world. And so you get a sense of employee base. And so I'm having lunch, I'm looking around and I'm realizing I would have not hired one of those folks in my prior job because of the tattoo on their face, because of the felony, because they were gang members. And yet here's this workforce that's actually working hard and doing good. And so it challenged my notion that I'm a hot shot business guy. I think businesses are good for society. But here at Homeboy, in the context of a business, we're helping people change their life in the most dramatic way. And so when my friend asked me to get involved, I had time on my hands. I want to know, can my business skills be used in a different way? And so I signed on as a volunteer and I thought I would be there for five, six months and help them out and move on. Now here, 12 years later and still helping out and still six months. Right.
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B
I think there was this idea that you have to serve your shareholders, but that means you cannot serve your employees. And that notion is just fundamentally wrong. It has been wrong for an exceptionally long time. I'm similar to you. You know, you buy businesses, you scale businesses, it's all about systems and you know, you do all that, but you also have to build a core, you have to build a culture. And people will automatically dismiss based on either their history or their mental capabilities or anything else. They dismiss that immediately. It is a bit of a jump for people to say, hey, yeah, I'm going to hire this individual based off their criminal background. How do most businesses, when they look at that, how do you make peace with that? Because where it makes logical sense like, hey, they sell phenomenal value. These are still amazing human beings. Not everybody had a straight path, not everything gift. And you know, there's a lot of people who don't have, as you were saying, the tattoos on their face where I would like, no, I'm not letting that person in my house. So just because you don't have tattoos or you do have tattoos, you know, there is this judgment thing. How do you help business owners get past that? So, hey, you know what? Yeah, you're right. There is value in these individuals at Homeboy. How do you get them through that? How do you walk owners through that?
- [08:44]
C
Yeah, I mean, it's a multi part answer to your good question. First of all, just sort of set the context. Businesses need people, right? They need people who are good, they need people who are loyal. People are going to work hard. Absolutely right. And the way the work world is out there, it's hard to find enough good people along the way. And so there's this sort of on tap amount of Folks out there. So at homeboy. Let me, let me take a long answer to your question. At home, the folks we work with, they're all victims of complex trauma at a young age. That's why they join a gang. They think, you know, because they didn't have a family, their parents told them not to go to school, the parents told them be on the corner for the drug lookout. They're second, third generation gang members. They join a gang thinking that's their true family, false hope. They do something bad, they go to prison, they come out of prison and they don't want to go back to that situation. They want to be better. Just that society has a lot of these sort of challenges for them that it's hard to get a job. If you can't get a job, you can't pay for rent. So you're back into this cycle of going with the gangs because you can't survive on your own. And so fundamentally to your, then to your question. So owners, managers, supervisors need to recognize that the working poor of America have these challenges, that they're good workers. Not that they don't want to do the work, just that they, they either got to go see the parole officer, they have to sort of go back and sort of do something different to get rent paid. They're dealing with their, with their kids doing all sorts of things. And so it's about hiring people, leaning in and investing with resources. Not a lot of resources, but resources that if someone needs to go take care of their business, that they, that they're allowed that day off. And so it's a, let me back up. It's to summarize, if you're looking for this workforce, it's a good workforce, but you recognize you got to do a little bit differently. You got to then that they have their challenges. Let me give you this one quick story. So at Homeboy, we have all sorts of jobs filled with our population that we serve, right? And so there was, you know, I've had a number of executive assistants now over the years here and teaching them to be executive assistant in the for profit world. So one of them, young woman in and out of youth camp, youth jail here in LA county, mother at age 17, hardcore gang member, just sort of hated her life and very mad at the world. But through Homeboy, she's able to find herself and be a good mother. But she was my executive assistant with a young child living in a shelter. But she still showed up every day on time, did her work. Well, we're a homeboy We're a non profit, so we have a board of a director. And so quarterly we have board meetings that start at 7:30 in the morning. And so she would get here at 6:30 in the morning making sure the tables were set up, papers are in place, the water was out. So I remember this one day, the night before one of our board meetings, her parole officer calls her up and says that she needs to report in to his office next day at 8am and she's saying, Can I come at 10 because I need to be here for the homeboy board meeting. I have a job. And essentially says, no, if you're not here by 8am I'm going to violate your parole. Which means she will go back into prison now. Knuckleheads. Right, but so of course we're homeboy, we're saying, you know, go take care of your business, we'll be here, we'll get by. Right, but how many other businesses would sort of let her, maybe they would let her off that morning if they knew the situation. But would she have so much change she couldn't tell the situation? Because so my point is the people we work with, they want to do it the right way. There's a lot of hurdles in place that us as employers need to recognize that we got to treat people not the same, but individually and give them the chance to do their job well. And if given that chance, they'll do their job really well.
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B
It's interesting because we always talk about if you're going to hire someone, hire the hungriest person you can. So normally if there's a job between a job opening, between one person who is a single mom and has kids versus someone who's married, they have the same skill set, the same character, and even across the board, hire their single mom with the kids because she's going to hunt and be there for work she needs, she wants the job and she's going to run this to me. Kind of takes that to an even higher level. They're trying to break out of what you know and now know and you've explained is generational issues. This, these are, this isn't just breaking out from, hey, I had been this one situation. This is generational traumas that they go through. What do employers need to know? Because obviously a lot of people don't have this way of thinking. A lot of people are just like, no, I want the person with the college degree and so on and so forth. How does someone go in as a business owner and say, hey, okay, I've got two people in front of me. I've got Bob and I've got Mike. And one of them is not a homeboy candidate. One of them is a homeboy candidate. What would make you if you were a business owner on the outside because you've been on the other side, say okay, I've been on both sides. Why would I choose a homeboy candidate versus a non homeboy kind of thing?
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C
Yeah, I understand your question. Let me kind of like little bit flip a little bit. I would say you as a business owner hire the person you think is going to do a great job. So just as in your story, the, the single mom who has to hustle, you have a sense that that person going to work hard.
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B
Yeah.
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C
Pick the person who's going to work hard for you. But also recognize that, that you're going to just like my story, you're going to have to give them time off in different ways. You're going to have to sort of support them in different ways for them to do the job well. And, and that's it. So it's a mindset shift is, is what do you got to do to help somebody succeed in their job. And what I'm saying is what you got to do to help somebody who's been the working poor to see in their job is different from the college educated blah blah blah blah person who are more self sufficient, have more of a safety net, have more resources, resources around totally different. And if I can say a second lesson is that when you hire those folks it's very hard. Us as humans always judge. Let me if you have time for another story.
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B
Absolutely.
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C
So we at homeboy, we're a nonprofit organization mostly funded by two thirds of donations and foundations but 25% of our social enterprise businesses and measly amount of government money. Social enterprise businesses. We have a bakery, we have a cafe. One of our. We have a bakery, artisan made bread. Listen, there's nothing better to break down barriers of two rival gang members standing at the bread table rolling dough shoulder, shoulder, knowing how much bread they got to get done breaking that breaking. You can't demonize somebody in relationship with. And that's why we have. We don't deal with gangs, we deal with gang members. Right. That's why we have rival gangs working among themselves. One of the businesses is we go to farmers markets, we sell bread at the farmers markets and they're interacting with customers and all. So early on in my time I'm trying to do management by walking around and getting to know People. And so I walked through the bakery and I heard one of our best farmers market guys, George, asked for his bakery manager for the, for the weekend off. Now, as you can imagine, weekends are busy for farmers markets and he's one of our best guys. Every, no matter how much bread he takes out, he always sells it. He's got a good gift for gab and interacts with customers, right? And people come to see George and talk about him. So, and so we, so the manager gave him time off and I come up to him, I'm really a newbie at this point. Hey, you know what's going on? I'm like, in a glib way, hey, what are you going to do this weekend? Right? And he says, I'm reporting in. And I said, reporting in? What's that mean? He said, oh, I'm reporting to county jail. And I take a step back. What do you mean reporting at the county jail? Well, he owed money. And so back in LA county at that time, when you come look on a sidebar. Nutty thing about society is we release tens of thousands of prisoners a year and they come out with debt. Not just restitution costs, but parole costs, court costs, fines and fees. And so how do we think a prisoner in prison is making money? But how do we think once they get out of prison, they, they're going to be able to get enough of a job to live and to pay their debt? Nutty, nutty, nutty. But George wanted to do it the right way. He didn't want to go ask his homies and his gang for money because then he was going to be indebted to the gang. He didn't go to a loan shark at the time. You can report in for three days of county jail, which is not the safest spot, and earn money off your debt. All right, so I'm talking to him, amazed. I walk away really amazed by him that he's doing it the right way, that all these societal challenges are stopping him, but he's going to still do it the right way. Well, so all week and I'm long, I'm thinking about it, I'm thinking, should I have given him money? Should I have loaned him money? Should I have done some other thing? I make a beeline in the next Tuesday, see how it went. And I go right to George and I see the stress on his face asking how it went. I said, what happened? He said, well, now George has custody of his 10 year old and 8 year old, which is pretty unusual for a male to get Custody as soon as they leave the prison system. And the caregiver who was supposed to show up for wash his kids didn't show up and he still had a report into county jail. Yeah. And so imagine leaving your 10 year old, eight in the apartment by themselves for a week, three and a half days a year in jail. Now the kids end up being fine, so nothing went wrong with the kids. But imagine the stress as a parent. So I'm telling the story for a couple reasons. One is we, the rest of us society can't imagine the challenges that the poor in our society face every day. The choices they gotta make. Whether it's George trying to choose to go to having to go to jail to pay off debt and leave his kids alone, or the homegirl who comes in, doesn't one of our employees doesn't eat for the breakfast and lunch so she can save money for diapers. Impossible choices. And so we have to recognize that our folks chase impossible, have to make impossible choices and we have to resist the urge to judge. Just the urge to think what would I have done? Would I have done something differently? So I tell the story in relation to your question is as you hire these folks, don't judge, just. Just lean in and help and know that they're working as hard as they can and they're trying to get through it. But lean in and help and don't sort of judge them by their actions in their private life in that sense.
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B
No. And I think something you said earlier really resonated with me as well. Understanding that each one of your employees, either if they're coming from homeboy or they're coming from the other side of the tracks in this situation, you've got to treat each one individually. And this is part of decent leadership. You have to be able to identify what people's basic needs are. There's human needs and there's a different scale on how it goes and there's mavslow hierarchy of needs. And you have all of that. Being able to understand that you're building a culture and how you interact with Susie from accounting is going to be very different than how you interact with Mike from marketing. And being able to do that and balance that and have decentralized command as you go through that. One of the things that you know, I love implementing because I have a background with the military, is so much towards decentralized command that you empower the people beneath you. But in order to do that takes an immense amount of trust. You're talking about not judging and you said it's very hard not to judge individuals who have certain backgrounds. You know, we do background checks and we do drug tests. We do that for all the organizations that are underneath my command. How do you get past that saying, okay, I know they're not going to pass a background check that we normally do.
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C
Right.
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B
I'm hoping they're going to pass the drug test that we do. If we're in a drug free environment. How do you get a business owner, you know, again, you've been on both sides. How do you get the business owners, okay, I'm going to give this a shot. I'm going to risk the ability to feed because I always tell this people all the time, whenever you're in a situation where you're firing someone, I'm not firing that person. I'm making sure the employees that still work for me can still feed their kids.
- [20:32]
C
Yeah.
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B
Individuals hurting the process. I'm sorry, I got my duty to these children. How do you take a business owner be able to walk in and say, okay, I'm going to risk these other employees ability to feed their kids and take this risk off all this judgment that I have, which is my problem, not the potential employee's problem. How do you get them through that? How do you get them through that hurdle and take that risk?
- [20:55]
C
Yeah. Yeah, good question. Let me. I want to come and come at it at two ways, right? And I just want to be clear to the folks listening. Like, I've been in the business world 26 years. I've been doing nonprofit for 12 years. And I can, I know when I tell these stories, people are saying, well, that's true in the nonprofit sense, but I'm running a for profit company. And you know, you guys, what you guys do is nice, but I gotta still do the bottom line, right? And so I recognize that. And so what I want to say is like even the way you framed it up, like if someone's not doing their job, that's, that's going to impact the whole organization. And we have to feed the whole organization. They have people got to put food on the table, right? And so even at homeboy, look, ours about a mission, it's a people oriented business. It's a mission of helping people leave gang life behind. So if someone's coming in every day now we have, we have 500 people on payroll who we pay to work on themselves. In addition, we have another 150 staff, right? But if someone's coming in and they're still running with the gang, they're not programming. We're saying come back when you're ready. So we have our limits too. But part of the other part I want to say is to your question and it's funny, I've never really said it this way but listen, there's no exact science to this right now if you're a good leader and you're running and your company's successful and you're growing all that, you have a sense for people. You have a sense whether they can do the job or not. And so when you're interviewing just focus on what you think they can do the job. Forget everything in their background. Just forget it. It's no impact. Now you sent with a new job since do they are they know stable enough to show up and get there and obviously you're going to have their challenge. You're going to lean in and help but just it's about can they do the job today and don't worry about what was in the past.
- [22:46]
B
So my question is there takes different leadership skills and it all talks starts with empowerment. You know leadership is about empowering the people with how do you is there a different way of empowering these people in a for profit environment versus a non for profit environment with the extra spice that comes with it in this one is there a difference? Because you've done both. You've been able to, you've been able to power and lead under both environments. And you know when you had, you were talking to this when we first started, when you had the individual who said I wanted the extra $10 million during an economic collapse, it hits you, you're this is, this isn't home. This is, this doesn't resonate. I'm not, this isn't where I'm going to be much longer. So you, you have this, you know core being that aligns with very specific morals. How do you find the balance to empowerly lead in this environment? Is it different for for profit versus non for profit with the extra spice that this, this comes in with?
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C
Yeah. Well, you ask good questions. I try, I try right question you got to think about, you know, let me see if I can get the words to it.
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B
If you want why you're thinking, I'll give you an example. We had an I was, I was working with an organization that brought me in to help them scale and the owner of the business goes I am never going to hire anybody that's a murderer. I refuse to do that. That is absolutely acceptable. That violates my moral code. I'm like cool this is, I'm going to make up a name. This is David. He has killed an immense amount of people. You're never going to hire him. Like, yeah, I go, he's a Harvard grad and he's a former Navy seal. You're still not going to hire them. And they're, oh, no, that's a, that's, that's, that's, that's a different, that's a. And I'm like, okay, so there's different nuances to this conversation. And people get married to this one idea and they become, it becomes this hill they're going to die on. I'm like, you need to look at things differently. You need to look at the individual. You need to have conversations about can, to your point, can they do the job? And then I get in the face of the senior command and I'm like, can you lead them? Because that's very different conversation. Can you empower these individuals? Because if you're going to come in, you're going to bark orders at individuals. It's not going to work. If you can meet their needs, understand their pains, empower them and then help them do through decentralized command, you're going to do a lot better. So when you're coming into these and you have these two different worlds, because I, I, you know, I worked at a hospice for a really long time. They were not for profit. And I remember, I'm like, well, it doesn't matter if we make money. And I remember the CEO, she's no longer with us, an individual named Trudy Webb. She's like, that's adorable. We still have to pay the bills. I was like, oh, great.
- [25:14]
C
I love it.
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B
That's very cute little one. And I was like, oh, we have to make money. She goes, yeah, we're not going out of business. And I was like, oh, so the bottom line still matters. In a not for profit or a non profit, you still got to pay the damn bills.
- [25:25]
C
Yeah, right.
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B
And there's completely different leadership styles based on the individual. What I have found, based on the individual versus based on the organization. So the again, when you come in, you're building a culture and people lead in different ways. There's different type of leaders out there and some are really good in some cases, some are very good in other cases. Going back to where we were. Is there a different way in leadership and empowerment when you run into these two different environments with the spice, soul spice that homeboy comes with?
- [25:55]
C
Yeah. So, boy, another add on to your good question. I want to actually dive in the middle there and talk about your example that you used about the murder type of thing. Right. And I want to be careful the words I choose. It comes down again, not to be judging. Like, we don't know what people have carried in their life. We don't know situations of where they've been at and the trauma they've been under and what caused them to do certain things. Right. And so we're not ever, when we don't condone violence, we never accept that, you know, but let me jump a little bit. People leave the prison system. They've. They've done the time for the things they did, Right. They serve their time. So we always sort of judge them for the rest of their life.
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B
Right.
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C
And so. So that at the. On. On the intellectual side, no, we're giving people chance. We're not judging them from their past. Now, to your question of the management style and how that comes about. Right. You know, this is where I've actually, you know, interesting. Lately I've been on my own faith journey by being here at Homeboy and learning about. About how faith in God and God loves us all, how that affects how I think now I think as a leader. Right. And so I've. I've kind of through Homeboy and to Greg, our founder and all, that kind of comes to this point of understanding that I'm finding joy through others. My. My being, I. My moral being is not about these hard, firm rules. My moral being is about being in relationship with others and leaning into. To help others. And so, like all of us in society, we have these sort of rules we have in place. I'm not hiring this type of. No, let that go. Look at the person in front of you as a person. This may not sit well with everybody. Says God loves that person too. I learned this home. But God loves all of us, no matter what we've done. He's too busy loving us to be judging us. Right? And once you sort of. It's the obvious thing, but it's my session. Once you know that God loves that person across me as much as God loves me, it's way easier. It's way easier, but it's on two planes. Like. Like I'm saying all that full throttle. But I'm also saying, hey, you're running a business. People have to meet the caliber of the job. They still got to do their job, do the job. Right. Yeah, you're clear. You got to be clear about expectations and all those things, but just let all the other stuff that may cloud your vision about a person. Go, just treat them for the person they are today. And they're doing the job how they're doing the job.
- [28:31]
B
You're talking about, you know, finding faith. And I think one of the great gifts of this, because I haven't. I'm not blessed with the gifts of the gift of faith at this point. And it might happen one day, it might not. I've made peace with that. It's one way or the other. So as you go into these environments, I remember sitting with, ironically, a rabbi, and we were talking about this, and he's like, you don't question enough for your things. I'm like, I'm sorry, what? Because again, when you're working in a hospice, you're around multiple religious leaders and you're having this conversation like, why do these things happen? Why. Why does. Why does a child get born with inoperable cancer? And I've only six months. Explain this to me. And he goes, you know, you're. You're pushing so hard on questioning all of these things, but you don't question yourself. And I was like, okay. He goes, and to use the example. Use an extreme example that we used earlier, he goes, would you kill someone? And I was like, absolutely not. He's like, okay, would you kill to save a life? And I was like, yeah, because.
- [29:21]
C
A little harder, right?
- [29:23]
B
And he was like. I was like, all right. And I did the avoidance, which we all do. I'm like, what do you mean? That's avoidance? And he says, okay, if some. Who is the person you love the most in the world? If I was going to shoot them in the face, would you kill me? I'm like, yeah. He goes, would you kill 10 of me? I was like, yes. He was, okay, now we're just arguing about the number. So he made you challenge your belief system. And I think a lot of what homeboy does is it allows people to get away from the judgment and allow them to go in and say, hey, can the person do the job? Stop judging them. Don't judge them. What they did. Can they do the job? Are they effective to do that? Are you giving that person a chance to really get into this? You know, Tom, as someone who has scaled multiple businesses and done some numbers that most people will never see, most people will never get becoming the billionaire environment ever. As far as working in organizations or being part of a billionaire organization, they just won't. You know, most of my clients are at the seven figures. They're trying to get to the eight Figures getting beyond that, they're like God. So when you get to somebody, people, we call them hard bees. Hard bees are a very different planet than someone who's an M. It just, it's just the nature of the beast. What are the biggest lessons you learn in those kind of those huge environments where again it's this hard shift when you go from hey, this is a multi billion dollar company all the way into hey, we oh, not for shit. How can you keep the lights on? So having that hard pivot where as a leader, because you've done this and you've been on both sides, you've on both sides of this battlefield, where do you see the commonalities and where do you see the challenges that you could, you know, the audience who are listening right now going, crap. Not only do I need to look at people differently, I need to hire differently, but where else can they take lessons from you and learn differently?
- [30:52]
C
Yeah, I've been very fortunate to be part of a lot different type of size organizations. Right. And without a doubt the big corporations have a lot of resources and bandwidth. And look, the businesses we were in, it was uniform businesses, food businesses, facility cleaning. So no special technologies or patents. It was just how well you led your team is how you got future business. Right. And so I was sort of taught very early on about a lot of managerial skills, leadership skills, you know, executive coaches, really, really the overemphasis on the making me a better leader. Because if I was a better leader, my teams were going to do better. Corporation does better. Right. And so what I've tried to do is bring that aspect to Homeboy. And I view Homeboy as a small business, as a small family run business. It's, it has that dynamic. It's a sort of grassroots based founder, I took over for the founder, that, that type of thing. And so, you know, and then at different levels, as you go from, as we went from $10 million to $20 million and $30 million, you got to bring more skill sets in and you got to grow the team. Very proud of the fact that this is a summary of how to do this. The key lesson is, I think great insight is hiring the people, getting the right people in place and developing the people. Two thirds of our management team now are former clients. Think about that. They were in our program, coming in out of prison, no clothes, no food, no anything. And we've helped them heal, help them become resilient and then they just blossom in terms of their ability to be the next generation of mentors, to be the next generation of business leaders, you know, the, you know, people who run our cafe and our bakery, they're all former former gang members. Right. And they, they're all. They all lived in that lifestyle. So they have this natural leadership skills, but they didn't have the managerial skills. So then it's bringing a lot of trainings to teach them the managerial side of this. And so to me, it's always been about to scale an organization. You need two things. You need funding and you need people. Will people scale with you? And yet, and a lot of times when I see other organizations that don't succeed is because they didn't put enough time on the people side that the entrepreneur, the leader, did almost everything themselves, didn't spend the time to teach the next generation and to move the next generation along and not really, and then thereby not having a shared vision. So it's really about developing people and bringing in outside trainers to make that happen as well.
- [33:27]
B
Yeah, I think that speaks to your leadership skills about, you know, you built a culture. If two thirds of your org is people that used to be clients and you had it in there, that's a culture you built. You built something where they're dived into it and they have a vested interest.
- [33:38]
C
That's right.
- [33:39]
B
If there are certain things when it comes to leadership, if someone comes up, says, hey, listen, I don't have the experience. I'm not. I'm not in this flavor. But I have these other things. Are there certain things that you've learned over your career for leadership skills that you're like, hey, go do this. These are the leadership skills that you need to do in order to not only hire individuals who you have to look past your own judgment, but also lead individuals from all walks of life. Because again, you were in Boston, where that cold white stuff fell out of the sky. Very different individuals in that environment because been to Boston many, many times, go socks. And you come over here into la, which is a different group of individuals. How do the leadership. What are the leadership skills that you're like, hey, this works in both environments. And maybe these are some of the tools or books or things that you've come across. You're like, hey, if I could go back and I'm trying to make myself a better leader, and I'm trying to scale my organization and I'm trying to level it up. This is what I would either read or these are the lessons I would start working on immediately.
- [34:32]
C
Yeah, I would. Two, One I'll do quickly, and the other I'll spend more time on. I had a mentor early on in my life, in my business career. And he said, tom, show, show the organization. You know how to make money, right? And you just under. So my point is understand the finances. Take a finance course. You don't have to be a financial expert. You don't have to be an accountant. Just understand the numbers of a business. I mean, that's sort of, that's, that's the entry fee. All right? And then the other. If to be a great leader is listen, just listen. You know, you don't always have to have the answer. You don't always have to rule the room. You don't always have to sort of do it. If you want to build a culture and have people kind of take the responsibility and run with it. Listen. And it's, and it's, I'm older now. It's easy for me to say, but, but also the dynamic, like convoy is a very diverse population, right? It's, it's, it's a gang population, right? And so for me, I didn't, when, when homeboy, when I took on the homeboy role, it was different. Like Father Greg, our founder, Jesuit priest. I mean the mission was strong, but the organization was failing because people management didn't know the strategy, didn't know people. Right. Positions, all that stuff. So I come in and listen. I'm not coming in to improve how to get gang members out of gangs. I'm coming in to actually see how the organization goes along with. So it's a part about listening and piecing it all together and same thing in the for profit world. All the great leaders I've, I've worked on, they've listened. They, they, they don't come in and start telling. It's sort of listening and thinking, listening and thinking and, and probing.
- [36:10]
B
If people want to get involved and they want to help out homeboy, either by hiring people that work for you or donating or being a part of this and helping the calls along to give these people a second or as you were saying earlier, even just a first chance that somebody's never had because they're generational into this. How do people find you? How do they track you down? What is the best way to help out and be a part of this.
- [36:29]
C
Yeah, thank you for giving me that pitch. So Homeboy Industries, we have a Facebook page, we have a website, homeboy industries.org. we have a lot of content on there. What's amazing is how our folks have changed our life. The transformation. And they tell their story in the first person. And, and look, we are blessed with donors. We need more donors, so please donate. But we don't. People donate to us because they see. Because every one of us, and I think in our world have some type of brokenness in us. And if our folks who have massive amount of brokenness can kind of get through that and not transmit that pain, but transform that pain, move that forward, it is sort of something to learn by and to sort of invest in. So do all that on the business side. I wrote a book, the Homeboy Way, where I kind of take the things I've learned at Homeboy and apply that back to the business world. So please buy the book along the way. But, and then we have social enterprise businesses, you know, buy some cake and, and if you're in Los Angeles, come for a Visit. We have 8,000 people visit us each, each and every year.
- [37:30]
B
Love it. Thank you so much for being on and sharing this in a completely different perspective, you know, going from one to the other. I really appreciate it, Tom.
- [37:36]
C
Great. All right, thank you.
- [37:37]
A
Thank you for tuning in to today's show with Tom. We hope you're as inspired by the possibilities of combining business acumen with social impact as we are. A massive thank you to Tom for pulling back the curtain on his remarkable journey from corporate leadership to non profit innovation. His transformation from a profit focused executive to the leader of homeboy industries proves that the most valuable asset in any organization isn't found on a balance sheet. It's the untapped potential in people others have written off. Want to implement Tom's strategies for building a more inclusive and impactful organization? Head over to podcast.imcharleschwartz.com to download our free companion guide. Inside you'll find Tom's complete framework for creating second chances and building a culture of empowerment and growth. Remember, sometimes the greatest potential lies in the most unexpected places. From challenging our own judgments to creating support structures that enable success, Tom shows us that doing well and doing good aren't mutually exclusive.