Tom Gores: The Platinum Effect
Tom Gores is best known as the new owner of Palace Sports and Entertainment and the Detroit Pistons, but his investments in Michigan don’t stop there.
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DB: The Platinum philosophy has always been to give the managers of your assets time to turn them around and grow them. But do you have that luxury with the Pistons, who are under daily scrutiny from their fans and the media?
TG: I think there is more pressure and I think it requires hard discipline to just keep doing the right thing to build the franchise and the team properly. We know that problems don’t get solved easily, whether in business or in life, and you’ve got to work at it. So for us, it’s to make sure we keep our discipline and build the business in a way that’s healthy and isn’t just for one day, to keep somebody happy. But there is more pressure here to succeed fast, to win fast. We just have to maintain our discipline. We’ve been very successful in pretty much every business we’ve taken over, and we just have to stay the course in building a very successful business here.
DB: How has Platinum’s mandate changed from 1995, when you first founded it, to now? Is its portfolio more varied than you foresaw or planned?
TG: For sure. The industries have changed and some of the business approach has changed. But really, the philosophy is the same: We want to get involved in situations where we can make a difference. In the Pistons case and The Palace, it’s no different. We’re very operationally focused. There hasn’t been a change in focus or philosophy; just different industries. Steel companies, auto parts distributors — really, we look at the end user in every company that we buy. Is that an end user that will be around forever?
In the old days we looked at the customer and said, “OK, do we provide a product for the customer that they might not be able to get anywhere else, that’s unique, that’s differentiated? Do we provide that kind of product?” Because when you do, then it’s up to you to execute it as a businessperson and give the customer what they want — whether it’s Ryerson Steel or a technology company that we own. You know, the Pistons fans are our customers, and they love a great basketball team. And on our end, we have to provide for our customers. It’s very basic for us: We always look at who the end user is. If you’re replaceable, then for us we’d have a hard time investing. But if it’s really a unique, more captive, proprietary product that we can offer, then it’s up to us to execute and keep the customer happy. And if you keep the customer happy, they will stay with you.
DB: You frequently refer to a “Michigan ethic” that your company and approach to business seems to embody. Could we sum it up as very blue collar, with a manic focus on execution?
TG: When you grow up in Michigan, it’s cold and stormy and you’re just working away. Mostly it’s a lot about appreciation and gratitude — including growing up in Michigan with the very basic values. And the people in Michigan, and how human they are, how real they are, is something I’m really grateful for. So I think it has affected the Platinum philosophy. It is very much block and tackle.
I was telling my nephew the other day: “I’ve been at this a long time, but don’t be confused that it’s just about going in and impressing someone with your personality or getting them to like you. That’s a part of it, sure. But a very big part of business is systems and process, execution, that kind of blue-collar mentality. Business and process are so important.” If you meet our folks, you’ll see that they’re very basic in their approach, and don’t try and be too fancy. I put so much value on execution, hard work, and being in the details to understand how to be successful in life, not just business. It’s definitely influenced me as a kid and as a businessman, and it’s very much a part of Platinum because, at the end of the day, you have to be in the details of what you do. You have to be able to execute; you can’t just talk about it. And we really respect that approach.