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HATTIE: Hi, I'm Hattie Bryant. This is the place to be if you want to understand how to start, run and grow a business. Each week, we bring you our Master Class. Men and women, who have taken their ideas and turned them into companies that create new products and put people to work, tell you their secrets.

Our teacher today is Pam McNair, a little woman with big ideas and an even bigger heart.

You may not think you have time to take care of yourself, but now you do. Pam told me the best way for us to understand her business is to experience what she and the Gadabout family do every day for hundreds of people.

You're going to spend the day here with us at the spa.

HATTIE: (Voiceover) I arrive at one of the five locations of Gadabout Salon and Spas in Tucson. Founded by Pam McNair in 1980, Gadabout provides a full range of hair, nail and skin care and spa treatments.

JENNIFER: Hattie? Hi. I'm Jennifer.

HATTIE: (Voiceover) Jennifer Manns, the director of spas, gets me started.

JENNIFER: Good. I'm going to take you upstairs for your spa services.

HATTIE: (Voiceover) They plan a full day for me, which included microdermabrasion with Gloria, muscle toning and oxygen vitamin treatment with Georgia.

GEORGIA: ...feel the muscles...

HATTIE: (Voiceover) ...a seaweed mask with Pamela, stone therapy with Terry, a goat-butter soft pack with Alan, a pedicure with Dawn and Candy and a haircut with Laurie. Unlike the noisy salon, the spa is quiet and dimly lit. So the candles and the ancient water pitcher and the brocade couch, it's all about...

PAM McNAIR: Ambiance and feeling.

(Voiceover) Gadabout is a day spa, the type of spa which is seeing the fastest growth.

PAM: When we started, we had just a full-service salon. HATTIE: All right. PAM: And over the years, we've moved into what you now refer to as a day spa, which tries to mimic itself by what the destination spas do.

HATTIE: Oh, it's what you call those destination spas. I couldn't think of what to call those. OK.

PAM: I think what's really restrictive is time because people don't have a whole lot of time and it's very hard for someone who has several children or is trying to hold down a job for them to find the time to go away to take care of themselves. And when they do that, when they come home, they don't continue necessarily to take care of themselves. That's one of the advantages of a facility like ours, is we can not only provide you with services in one day, but we are close at hand. So if you would like to continue the change of your lifestyle then you can connect with the therapists and the location and the people here so that you can continue it on a daily basis.

GLORIA: OK. So we're going to start right up here.

HATTIE: So when did you decide, `I want to be a hairdresser'?

PAM: Many years ago I was a single mother. And I needed to have a vocation, and I was given the opportunity to go to beauty school or nursing school. And nursing school took way too long and I had always messed with hair all of my life. So I took the advantage of going to beauty school.

HATTIE: So you had to make a living. That's what you're saying.

PAM: Yes. Absolutely. I was working for a woman who sold her salon, and the employees at that salon were very disenchanted. So, at that time, I had an accident; someone ran into the back of my car. The person didn't want me to turn it into the insurance company. So they gave me $500, and I put it down on my first salon. And I had people who wanted to work, and so I had a decision to make: Did I wait until I had the money to open up a salon and then hire people, or did I take the people that were available and try to find the financial wherewithal to have the salon be successful.

HATTIE: Wow. That is such a great situation because most people start a company, and they don't know where to get the people.

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PAMELA: I've been with Gadabout for 14 years.

HATTIE: So what do you like about being here?

PAMELA: Oh, gosh, a lot. Gadabout is like a family. You know, it's like it's nice that we're all very connected and, you know, bonded to each other. And we all help each other out.

HATTIE: (Voiceover) Pam is a new American hero: 225 jobs, $11 million in sales. How did she do it? She's your neighbor next door who mastered the art of team building.

JENNIFER: Pam builds things as a team. This whole company is probably a team, so the office naturally falls into that everybody's always bouncing everything off of everybody. Our marketing ideas come up probably through excitement. And I think that we're all really encouraged to have ideas.

PAM: If you feel good about where you work, you feel good about what you do, you feel good about who you are, you can be successful at anything you do because then you have the ability to be an excellent service provider. You really care about the client because someone cares about you. We have a number of programs in place that we've worked on over the years to create a culture by which anyone who works with Gadabout, hopefully, feels safe and calm and confident in not only what they do, but who they are because every individual is of great importance to this company.

HATTIE: Tell me why you think working here is unique.

Team member: There's many benefits: Pam, number one, of course; all your other co-workers. They're trained, they're knowledgeable.

HATTIE: So you feel you're working with the best of breed.

Team member: Yes, absolutely.

HATTIE: And that makes you probably feel proud.

Team member: Yes.

HATTIE: So many people feel their lives are different. I mean, that's just, like, something huge to say about a workplace.

Team member: Oh, definitely.

Another team member: Well, it's one place you can count on in your life.

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PAM: One of the things that runs rampant in our profession is low self-esteem. Now the first person I need to work on is me because I can't teach you, train you, lead you, care about you if I don't care about myself. So the answer to your question isn't easy because, as all cultural changes are necessary in a company, if the leadership is not willing to change, if simply it's just agreeing to disagree, if it is admitting that you've made a mistake--do you realize how hard that is for most people who run companies and how leveling that is if you have the ability to say, `You know what? I messed up.' `What should we do about that?' That gives confidence to the people who work with you to know that you're honest, to know that they can trust you.

HATTIE: Because they saw you make the mistake.

PAM: And they can make a mistake.

HATTIE: And they know you made it. And so if you don't admit it, they're going, `Oh, boy, there she goes again trying to cover up.'

PAM: And so it gives all the people you work with the ability to practice. This is all a practice because we never get it perfect. We never get it right. And so, therefore, if they have that opportunity to practice and have some progress, then it gives them a safe place to be. So I really believe that there's no quick shortcut to having a trustful environment that you can work in.

HATTIE: What is your definition of `feel safe'? You know, people go to work at the grocery store, they're the checker and they feel safe.

PAM: They're not safe -- because of the things that are said and done, the assessments that are made of them, the decisions that are made without them having a voice... People don't feel safe in an environment where their voice isn't heard.

GLORIA: We're a family, actually, and I think that makes a big difference.

HATTIE: What is it about her that makes people love to work here?

GLORIA: Oh, I think she's a great person. She stands behind us. We do a lot of education.

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HATTIE: (Voiceover) Rather than leasing space from Pam, everyone at Gadabout is on the payroll, and everyone earns above industry-standard dollars. New hires have completed courses to be licensed professionals, but are considered to be interns at Gadabout for about 18 months. But, Pam, they already went to school, they got taught how to cut hair already.

PAM: Well, that's true.

HATTIE: There's a Gadabout way to do it?

PAM: Yes. We have our own program. We have our own designs.

HATTIE: But this isn't the way most salons work. Don't they just go to work right away?

PAM: A lot of them do, but we want to provide our employees with as much information so they can be as successful as possible.

LAURIE: She's always educating us. You know, we've learned conflict management. We've learned communications skills.

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PAM: We've come up with a conflict-resolution package, which is four steps that you take if you work with us to resolve conflicts.

HATTIE: So everyone goes through a class?

PAM: They went through training, and now we have the four steps written in our policy so that when someone has a problem, this is the way we deal with it.

HATTIE: OK, let's role play. I've got a problem with you, Pam.

PAM: Yes.

HATTIE: What are the steps we go through?

PAM: The first thing you do is you feel it. You see how it feels, how you feel about it. You don't want to respond to somebody when you're highly emotional. So you need to calm yourself. The second thing, after you've felt it, is you need to deal with it. You need to go to the individual and say, `Do you have a moment? I'd like to speak to you when you're free.' So that you take yourself away from the situation where there aren't clients or other co-workers who can hear the conflict.

Then what you do is you speak about it; you listen and you talk. When you're finished, you learn from that experience. And then the hardest part of it is to let it go so that it doesn't affect us tomorrow or the next day, or next time we have a disagreement we're still bringing up the old things that bothered me three months ago.

HATTIE: OK. So it's kind of formal venting.

LAURIE: There's no reason why I have to go home with a knot in my gut.

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PAM: We have a culture here, and you can't just walk into it and be hired and be part of that culture. You have to grow into it. So everyone who comes to work for us knows up front what our expectations are. What this allows them to do is, over the long run of their profession, is it allows them to be in the profession longer. It also allows them to make more money so that they're better prepared, not just--technically, anyone can learn how to cut hair. But it's the people skills that aren't necessarily there when you get out of school because you haven't had the experience. So there's a number of things we have to learn.

We have training in our skin care and nail care departments as well now. So it allows people to be the best that they can be. In school, they teach them what they need to know to pass the state board. Unfortunately, the state board regulations are not necessarily consistent with what the needs of a client are, as they come in and out of the facility.

GLORIA: I'm going to start out doing a muscle-toning treatment. You can feel the muscles twitching. You can actually see them moving, and that is the muscle being stimulated and tightened. We believe in the theory of walking your talk. If you're telling your client to do it, you have to be doing it.

PAM: I read constantly. I'm a member of three or four national organizations, from spa to hairdressers, with other business owners so that it's my job not to be behind. It's my job to stay on the forefront. That's why the people work with me, because they want to work in a salon-spa situation where we are at the forefront of the industry.

ALAN: What you're laying in is our soft-pack system. So what this does is helps to hydrate the skin and to calm the skin down.

HATTIE: Do most spas have this machine? I've never seen it.

ALAN: No. Gadabout actually was first in the country to have this piece of equipment.

HATTIE: Talk about a cocoon.

ALAN: Isn't it amazing?

HATTIE: Oh, my gosh, I feel like I'm in a cloud.

Team member: Spas really helps one to collect their energy. Energetically, it pulls people back into their core.

PAM: (Voiceover) We have 14 trainers that work within our company. They work behind the chair during the day. And then they train the assistants. We have advanced trainers in hair, in skin and in nails so that we're constantly educating ourselves, bringing people in from across the country, sometimes from Europe to do classes.

Team member: Long, sweeping motions, circles and crisscrosses around her heels. This is where, in most women, we retain water.

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PAM: If you don't know how to do something, you hire somebody smarter than you are in that area. One of the things in our mission vision is that we are committed to excellence in customer service and creative solutions. And I think creative solutions have to come from everywhere, not just from me.

HATTIE: OK. (Voiceover) Pam, like most small-business owners, has always played by the rules. She knows there are no shortcuts, no easy way, just the right way.

PAM: We match their FICA. We declare all of their income. We buy all of their products. We provide their education. In return, they receive paychecks every two weeks, and they have security of knowing that everything we do is open. And, actually, that idea, that concept has really had a lot to do with the state of our industry, and I really believe that, in the next five years, we're going to see a big change in booth rental.

HATTIE: That's going to go away.

PAM: It's going to have to go away because it's a underground society.

HATTIE: Right. It's a cash thing.

PAM: Yes, it is. There are different agencies looking at our whole industry, and that's one part of our industry that they're really looking at.

HATTIE: So you think the feds may regulate you.

PAM: They will.

HATTIE: OK, that's happening. So, again, you're ahead of the curve. Again, you're the one teaching the world how to do this.

PAM: Well, or I listen well.

R.J. DUFFY: She's like a bird who has this wide wingspan, and she sweeps people with her, you know?

HATTIE: (Voiceover) R.J. Duffy is the CFO and joined Gadabout in 1984.

R.J.: She is not a person that sits up here and just, `Let's do this, this and this, and you have to do this so I can do this.' She's not that type of employer. She empowers us and enables us and educates us to be and do what we need to be and do what we need to do.

HATTIE: OK, you're the CFO.

R.J.: Yes.

HATTIE: Do you ever look at the costs of all this education and say, `We can't afford to send Jennifer to that meeting'?

R.J.: Yes, I do.

HATTIE: `Yes, I do.'

R.J.: Yes, I do, and we've had these conversations, and invariably the end cost justifies the front-end cost.

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PAM: Sometimes we open up the salon in the evening and allow the people to trade services. Or, if you can work something out on your off time with a technician in another department, that's find.

HATTIE: Well, to me, that's a great benefit. And one of the hard things about getting and keeping people is nurturing them, and that's what I've heard you're so good at. And I want to talk about that.

PAM: If you don't keep the people who are service providers healthy, they can't help the client become healthy. So one of the premises we have in our company is we have to do for the internal clients what we do for the external clients.

Team member: This is where we get our perks, in many ways. Even though we're nurturing other people, we also nurture each other. So we get nurturing at the same time.

PAM: When people work with you, you have to be willing to take care of them first before your clients, if you want your clients to be satisfied. I really believe that the community takes care of all of us, and in order for us to be taken care of, we need to give back to the community that gives to us. And it's very cyclical. If I don't give it, I'm not going to get it. Anyone who's worked for us for 10 years or more--and we started this about five years ago--we have formed committees within that group; there's almost 50 of us now.

HATTIE: Wow.

PAM: And so you can be on the Environment Committee, the Community Service. A simple thing like--we use latex gloves to do a lot of our treatments. They came up with a concept of using reusable gloves. So we saved 15,000 pairs of gloves that we didn't use in a quarter and kept them out of the environment, as well as didn't have to purchase them. So they work on things like that. And then at the end of the year, they're judged on a point system, and we share up to 20 percent of our net profits with them.

HATTIE: Now, I agree, I've been around all day and she is amazing, but I want to know, from spending eight years with her, why do you continue to--are you going to cry now?

JENNIFER: (Nods yes)

HATTIE: It's OK. I do it all the time. Why is it that that feeling comes to you when someone says, `What is it that's so great about her?' I mean, why does it make you feel that way?

JENNIFER: She's totally invested in the people who work for her. She works for the people who work for her. And I'm among a large number of people who've had the opportunity to completely transform their lives working here.

HATTIE: What do you mean? Like the way you see the world?

JENNIFER: Are you going to cry?

HATTIE: Yes. Has she opened up a bigger window for you?

JENNIFER: What exactly is it? It's probably that she doesn't do things with ego. I've learned how to communicate with people and to do my job in a way that reflects the greatness of the people who I work with. And that's something that Pam teaches; that we reflect each other.

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HATTIE: At Gadabout, employees told me over and over, `Pam saved my life. Pam changed my life. If I hadn't met Pam, I don't know what shape my life would be in today.' And these people are not talking about a beauty makeover. Can the owner of a company have the same effect on people as a minister or a priest or a surgeon or a therapist? These employees have been profoundly affected by Pam, and I conclude that the answer is yes. We've learned in business that the customer is king, but if you grow past the point where you, the owner, are no longer delivering all the customer service, how do you guarantee that every employee learns that the customer's king? Just as Herb Kelleher of Southwest Airlines teaches, Pam treats the employees like kings and queens. The leadership theory is employees will treat customers the way employees are treated by you. Rather than pouring all of your energy into customer service, if you want to grow, start pouring all of your energy into employee service. You'll be rewarded with loyalty because people don't leave where they're loved.

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PAM: If all I do is take from the company, then that's all I'm going to get. I have to be able to be liquid enough that I can do the things necessary when the time is right. I also have to pay attention to the long term. My passion was never short term. So it's not like I'm going to do this for a little while, and then I'm going to stop and do something else. I think that the more energy and effort you put into a company, your energy needs to be equal to your pay. I mean, I remember 10 years ago I looked at my salary and thought – I had hairdressers working for me who were making more than I was – so I really had to look at that and adjust it and say, `This isn't equitable.'

But at the same time, there has to be money left in your company; it's a question of flexibility.... ff I'm not flexible to move when I need to move or do what I need to do....

HATTIE: And money makes you flexible.

PAM: Yes, it does.

HATTIE: (Voiceover) The theme here is nurture. Pam nurtures the Gadabout family, and they nurture their clients. What you don't see so easily, but you would if you became a regular client, is this place is about the inside of people more than the outside.

Team member: It really opens people up inside. It's actually a sacred Indian ritual. It's been done for probably 6,000 years.

PAM: Well, I think you have to look at the all-over picture, check and see if your mission and your vision is there, and then you need to get out of the way. You need to be able to delegate with a design so that other people can duplicate what you do or do it better. I'm not the star; I build stars. So it allows other people to be in the forefront, and it allows me to have the time to do what I need to do to make them look better and to be better.

HATTIE: What keeps you jazzed?

PAM: Oh, all my family and all my friends and my husband and just life. I think living on purpose is what keeps me jazzed.

HATTIE: (Voiceover) Yes, clients leave looking good, but more than that, clients leave feeling good. A sense of calm and well-being is discovered in that deep, soulful place we each have. The Gadabout visit reminds us that real beauty comes from the inside.

HATTIE: (Voiceover) Jennifer manages the Web site. Visitors to the site find locations, services, products, gift ideas and prices on the Web. It's appealing and easy to use. Good job.

JENNIFER: We launched a website in '96, and we really revamped it and reintroduced it in '99. We spent about $15,000 for the initial setup. Our upkeep is about $40 a month.

HATTIE: That's all?

JENNIFER: That's all. We're e-commerce, so we are fully prepared to sell all of our products, but our big focus on the Web site was selling gift certificates.

HATTIE: And it still is true today that...

JENNIFER: It's still true today. (Voiceover) I think, for us, it was an area that we could see the most immediate return. It was an area we were focusing a lot of energy on in the salons and through the phone. So it became a very natural link to work on it with. We try to have a very spa-oriented Web site that, as you travel through it, you get the essence of what spa services are about and the uniqueness of a spa gift.

HATTIE: (Voiceover) To attract and keep great people, try Pam's method. Meet the needs of employees holistically. Be part minister, social worker, teacher and therapist. You'll be rewarded with loyalty because people don't leave where they're loved.

We'll see you next time.

THE CLOSING OF THE SHOW

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