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Debbie Penzone:
Welcome to From the Outside In. I’m your host, Debbie Penzone. A special episode featuring a case study reading from the “Chief Reinvention Officer Handbook: How to Thrive in Chaos” was recorded at the PENZONE Innovation Office. Today’s episode features four-time TEDx speaker, scientist and entrepreneur Nadya Zhexembayeva. Nadya has joined me on one of my first podcast, and I’m so happy to feature Nadya again now that her workbook is published.

Debbie Penzone:
Nadya and her Global Chief Reinvention Officer community understands the struggles and has helped countless companies and leaders deal with changing by reinventing their products, processes and leadership practices. I’m honored that PENZONE Salon + Spas’ rebranding is featured in this workbook. Take a listen and learn bold, new methods for business resilience during disruptive times.

Debbie Penzone:
Reinvention: A Deep Dive. Now that we’ve covered the essential nature of reinvention, the creative act of balancing the needs of the present and the hopes of the future, it’s time to take a deep dive into making all of this theory work for you. To do that, we’ll look at three different stories of reinvention – a manufacturing company in Slovenia, a cosmetic company in the United Kingdom, and a service business in the United States.

Debbie Penzone:
Like the first reinvention case, we’ll start with part one. These two will end with a particular exercise to warm up your transformation muscles. Then, we’ll provide you with a map or even better, a radar to find out your next direction and your reinvention, and offer a powerful tool of reinventing your business model. After that, it’s all about doing the work. Reinvention is not a spectator sport. The task in front of you is simple but not easy. Simple and easy are two very different things. Instead of desperately trying to stay in business by all means possible, it is time for you to get out of that business and into a new one.

Debbie Penzone:
To get you going, we are building a collection of cases with fresh ideas and hands-on exercises that will help you answer the key question, “What should I reinvent in my business?” These cases will give you insights into a wide variety you have to choose from. And later, we’ll offer even more examples to inspire you.

Debbie Penzone:
In this Deep Dive, PENZONE was case number four. Reinvention case number four, PENZONE. The coffee is fresh and robust, with the rich foam that rivals any brew from Starbucks. Yet, I’m not in a coffee shop. The makeup counters are crowded with customers testing the latest eyebrow trends. Yet I’m miles from the nearest Sephora. A staffer hurries by me with a pot of warm Ayurveda oil. Yet I’m not in an alternative medicine clinic. Where am I? At one of the many locations of PENZONE Salons + Spas.

Debbie Penzone:
It is February 2019, and a week ago this salon brought home the coveted title of “Salon of the Year” at the North American Hairstyling Awards, held in California. Yet it is snowing outside and Dublin, Ohio is a far cry from the limelight of Hollywood. What is even more remarkable is that PENZONE isn’t a newcomer, unburdened by the weight of the past. This innovative, award-winning homegrown brand is 50 years old.

Debbie Penzone:
At the time of its founding in 1969, PENZONE was a contemporary to some of the corporate America’s most powerful Titans. Take, for example, RCA. In the year of PENZONE’s incorporation, RCA appeared on the Fortune 500 list as #20. A giant in electronics, radio equipment, marine and international communications and broadcasting. When General Electric acquired RCA in 1986, most of its assets were liquidated.

Debbie Penzone:
The year 1969 was also great at Pan America World Airways, known to most as Pan Am. Advertised with the slogan “The World’s Most Experienced Airline,” Pan Am had 150 jets flying 86 countries on every continent except Antarctica. It made enough profit to stock up cash reserves of $1 billion.

Debbie Penzone:
By the late 1980s, however, the company was hit by a series of external disruptions, including rising fuel prices caused by the Gulf War. By January 1991, Pan Am filed bankruptcy and it closed up shop in December that year. PENZONE, though, is still here.

Debbie Penzone:
How did a small hair salon from a sparsely-populated Mid-Ohio survive and thrive while the giants disappeared? And how does the same brand continue to grow and grab awards as a disruptor and an innovator today? Created as a single salon by Charles A. Penzone, the company was built on the ideas of constant disruption. Debbie Penzone, the company’s current CEO, says “Reinvention has been in our DNA since the beginning. Charles Penzone, our founder, loves change and he loves inspiring others to be bold. He doesn’t want to be that old leather chair that’s so worn nobody sits in.”

Debbie Penzone:
As far back as the early 1970s, the company did the unusual. For instance, Charles brought a, then, unheard-of styling technique of Vidal Sassoon to Columbus neighborhoods, which allowed the company to grow to 9 salons and 150 employees. The year 1991 marked the company’s new reinvention cycle. At that time, the country-wide average size for salons was 3,000 square feet. PENZONE went in a different direction. It built its first “Grand Salon” – a whopping 18,000 square foot – as a three-floor structure, consisting of hairstyling stations, manicure room, treatment rooms, an employee training area and a private garden. A significant boost to revenue and national press followed: Think, The Today Show, Inside Edition, Redbook, InStyle and People Magazine.

Debbie Penzone:
During the following decades, PENZONE opened two additional Grands, while branching into new businesses and concepts. In 1996, the company introduced an urban hair salon concept under the brand of MAX The Salon , growing it into a healthy chain into the early 2000s. Then, it added the Royal Rhino Club Barbershop & Lounge and LIT Life + Yoga studio, adding diversity to the services and the guests PENZONE served.

Debbie Penzone:
Debbie Penzone illustrates, “We tried many things. We owned a distribution company for the beauty industry, which we later sold. We even had a landscaping business! It is scary. Yes, absolutely. But you must continue to do it afraid. You’re always going to be afraid. Do it anyways.” In 2018, the company started yet another massive reinvention cycle, rethinking its main stake business. Everything from core services to processes to branding was rethought, renewed and reimagined.

Debbie Penzone:
Now, in the book, there’s some amazing before and after pictures. I’ll start reading now with the before pictures. Before. Designed as a standalone building, the original Grand Salon projected a sense of classic beauty, high price, and exclusivity. Most appointments were booked by phone. Upon arrival, check-in counters and the waiting room took center stage. The message to customers, who the company sees as guests, was crystal clear. The only service you can be done right now is what you booked previously. Any other services are by appointment only. The space is designed for an individual customer having an individual experience. The waiting room seating is isolated and spaced out to keep each customer to him or herself. The waiting room is for waiting. The center of the brand is the founder’s name, Charles Penzone, a Grand Salon.

Debbie Penzone:
And now, she has an amazing area full of after pictures. After. The salon concept is built with a sense of modern lines, freshness, and openness. Appointments can be booked by phone, on the website, or even through their new minted app. Check-in counters are surrounded by product shelves – where guests are testing new products and exchanging advice. A bar welcomes you with teasing aromas – a centerpiece of the Social Room, which features coffee, tea, organic juices, wine, plant-based foods, and a community programming. The message to guests is clear: you’re here to explore, discover, connect and share. This is a salon, a beauty store, a coffee shop, and a community space all wrapped in one. A world of possibilities awaits.

Debbie Penzone:
The space is designed to foster community and connection. The seats are arranged around tables – fostering an easy exchange of conversation and ideas. A coffee bar serving high-end coffee allows for a relaxed and approachable atmosphere. This room is for connecting and conversations. The founder, Charles Penzone, accepted the team’s daring proposal to rebrand by dropping his first name. Now, it still honors this amazing person – but at the same time, it celebrates the entire PENZONE community and the experience that unites them.

Debbie Penzone:
As the first two locations were re-imagined with the new PENZONE concept, the company courageously grew with a traditional hair salon to a full-service spa, a beauty store, a coffee shop and a community space all wrapped in one. Today , it no longer offers isolated customer isolated beauty services – but rather builds a well-rounded wellness experience rooted in a supportive community. The results? Newsworthy!

Debbie Penzone:
Since the reinvention of Short North and the Dublin locations, product sales went up between 35% and 65%. Service sales were up 10% to 44%, while “door swings” – a critical metric measuring customer presence on premise – are up 8% to 36%. No wonder why the North American Hairstyling Awards chose PENZONE as its 2019 Salon of the Year – beating hundreds of innovating brands at dozens of hot and glittery locations.

Debbie Penzone:
The story of PENZONE Salons + Spas is one of remarkable bravery. When you look at a story like this one, it is easy to assume that change comes easily to some. But just because someone reinvented successfully does not mean it was easy. It is difficult and you will still get it done. When your company has existed for half a century, the ‘old ways’ run deep. “But we’ve always done it this way.” becomes the mantra of some of the old-timers.

Debbie Penzone:
Resistance to change becomes palpable, says Debbie Penzone, “Some of our more tenured artists preferred Charles Penzone brand name because it’s all they knew. They were proud of it, proud to be connected to the founder. But Charles Penzone himself connected with many of them, assuring them that he endorsed this move for the Company’s future. That helped relieve uncertainty and tension. Instead of private spaces for nail and hair services, our new concept literally took down the walls to foster more community.

Debbie Penzone:
Our artists resisted it – hard. “They were afraid that it would be a detriment to their personal connection with their guests. What they didn’t realize is that while open, our new spaces were designed with the human connection in mind. Instead of 45 salon chairs in a single room, they were spaced throughout five salons spaces – making the evolution much more manageable for both artists and guests.”

Debbie Penzone:
So, what can a company do when dealing with resistance to change? In the case of PENZONE, the answer was communication. Whether it’s talking to guests or talking to team members, it is relentless and it is consistent communication that becomes the cornerstone of the company’s reinvention strategy.

Debbie Penzone:
Debbie illustrates, “It was really hard. So, we really went out and talked. We got groups of people to talk together. We heard them. We listened to them. And then, we shared our bigger vision. ‘Seriously, who are we right now? Because that person sitting in the glass house judging everybody – that is not me. Who am I to say who is beautiful?’ We started challenging the idea of who are we at our core and what do we want to stand for? What do we want to be known for? I don’t want to have a fashion show, which is all skinny people. Or I don’t want to have only the models that the society perceives as ‘perfect.’ So, we have to talk and we have to find a way to change, to stay relevant.”

Debbie Penzone:
“We’re so much more than just the outside beauty. With a new concept, we wanted to challenge the idea of beauty of who we are and what we wanted to be known for in our future. The foundation of our business is a more holistic approach with a mindfulness and a self-care at the core. Daily, we strive to improve lives from the inside out. Not many in our industry have adopted this approach, but they will, as it’s most certainly the future for beauty.”

Debbie Penzone:
This courage to change, to stay relevant despite all the objections, is what makes PENZONE’s team and its remarkable leader a benchmark in reinvention. Now it’s your turn.

Debbie Penzone:
Thank you for listening to From the Outside In. Please subscribe to the show on Apple Podcast, Spotify or wherever you listen to podcasts. For more information, you can follow me on Instagram, @debbiepenzone. I’m Debbie Penzone. You are exactly who you need to be.

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