“We call it the ‘be nice culture,’ but that is just the language that we use,” said Claybaugh. “At any company over the past several hundred years, when the staff laughs and has fun together, creativity and profits skyrocket, and absenteeism goes down. There are a lot of companies have toxic environments, where the boss is a tyrant pig, and it’s just brutal to work there.”
Other companies can be plagued by bosses who are absent or fail to lead. “No matter what a company does, you want to provide a safe environment where people are happy,” Claybaugh said.
A new look in salons
Although the Paul Mitchell Schools company has more than 100 schools and recently topped the 10,000-enrolled-students-per-year mark, it isn’t resting on its laurels. Last year, the company invested well over $1 million in curriculum development, updates, and training; it also invested and hundreds of thousands of dollars into updating its Web site.
When companies stand still, they are primed for trouble, according to Claybaugh. “The six words of a failing company are ‘We’ve always done it this way,’” he said.
Perhaps the most exciting recent initiative the company has taken is the establishment of franchise opportunities for the Lunatic Fringe Salons. Lunatic Fringe currently has six locations open, with new locations scheduled for Dallas, Southern California, and Nashville.
“What’s happening with the salons is that we are trying to culturally bridge the gap between the school and the salon worlds,” said Shawn Trujillo, who is the Lunatic Fringe co-CEO along with his wife, Angie Katsanevas. Trujillo and Katsanevas have worked and been friends with Claybaugh for more than a decade.
“The number one frustration we have heard from our graduates over the years is that they don’t want to leave the culture of the schools when they go to work in salons,” said Claybaugh. “This is something we have been hearing for more than 10 years, so we knew that at some point we would take a look at entering into the salon world. We also knew that we needed to have a successful profit model, and that’s where Lunatic Fringe came in.”
Both Trujillo and Claybaugh said the salons are a bridge between school and work worlds, and the employees who work in the Lunatic Fringe Salons appreciate being part of a supportive culture. “We’re proud that all our policies, procedures, and career paths are written there in black and white,” said Trujillo.
So far, the model has been a great success, as graduates from the Paul Mitchell Schools, as well as employees who have come from other salons, have bought into the model for success. “Our turnover is very low at around 3%,” Trujillo said. “The employees really do notice the difference and that helps with retention.”
The importance of going green
The Paul Mitchell Schools company has made substantial progress in shifting the way it does business toward sustainability. Claybaugh said the company has built awareness among its employees on focusing on green practices, not because it is marketable, but because it is the right thing to do.
Some of the green initiatives the company has taken include collecting and reusing name badges, donating learning kits to underfunded schools, reducing the amount of paper used for note-taking at training sessions by creating note-taking space in the learning modules, using more PowerPoint presentations in place of creating paper posters, and offering more Webinars in place of off-site training to reduce its carbon footprint. Individual schools are also creating student-run Green Teams at the schools to get involved in community outreach and educate people about green practices.
The green initiatives undertaken in the schools are followed in the Lunatic Fringe Salons. “Everything Lunatic Fringe does is a mirror of what goes on in the schools,” Trujillo said.
Focusing on doing things well
As Claybaugh and Trujillo look to the future, continued growth of the schools and salons is the main focus. “We’re the largest school division in the US, and we’re also the one that everyone is trying to catch up with,” Claybaugh said. “I hear every other school using our terminology and trying to duplicate what we do; everyone else says it’s flattery, but it kind of ticks me off.”
With the salons, Trujillo said the plan is to open seven to 10 new locations this year, about 18 next year, and around 25 to 30 per year for the three to five years following that. “The reaction to the salons that are already open has been great,” he said. “It’s wonderful to see that the recipe is working.”
Claybaugh said the recipe that has lead to that success is not one his companies are looking to change. “We’re not trying to save the world,” he said. “You’re not going to see us opening yoga studios or coming out with Paul Mitchell candy bars. We’re clear and focused on what we do; there will be new schools opening, and there will definitely be new salons.”
Sticking to core values and competencies has served Paul Mitchell Schools well. “Companies start to get into trouble when they try to diversify too much,” Claybaugh said.