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Why Stitch Fix Is Developing a Company of Leaders

Generating more than $1 billion in revenue, the San Francisco-based fashion tech business is driving growth by developing the leadership skills of all of its employees.
Stich Fix employees | Source: Courtesy
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SAN FRANCISCO, United States — Founded by chief executive Katrina Lake in 2011, online styling service and fashion retailer Stitch Fix blends human styling with algorithms to create a personalised experience for its clients. Stitch Fix generates more than $1 billion in annual revenue, working towards creating "an entirely new shopping paradigm based on personalisation."

Through founding Stitch Fix, Lake sought to build a company she and her employees would want to work at forever, based on strong values and a culture of employee empowerment. Today, Stitch Fix has more than 6,000 employees in the United States. Its management team includes former chief executive Mike Smith as chief operating officer and Eric Colson — previously a data scientist at Netflix — as chief algorithms officer, who both joined the company in 2012.

Mike Smith, chief operating officer Stitch Fix | Source: Courtesy Mike Smith, chief operating officer Stitch Fix | Source: Courtesy

Mike Smith, chief operating officer Stitch Fix | Source: Courtesy

Today, the company’s continuing growth and performance is driven by clearly defined leadership values and the underlying belief that every individual — no matter where they sit within the organisation — has the power to exhibit those values and act as a leader in their work each day. A programme of consistent 360-degree feedback supports this, designed to encourage partnership, innovation, integrity, and personal responsibility.

BoF sits down with Mike Smith, chief operating officer, to hear more.

How would you describe the DNA of Stich Fix?

For me, it comes to life when I watch meetings between a data scientist, someone with a PhD in astrophysics who’s worked in a lab for most of his or her career and now works with Stitch Fix on our algorithms, sitting with someone who’s been in merchandising for 12 years who is getting exposed to data science for the first time. It’s awesome to watch the mutual respect that each group has for the other, and how that comes to life in solving business problems. It feels like this great partnership between two very distinct and different groups. They come from very different angles but they’re still both trying to solve a client problem.

The vision we all work towards is our belief that we are transforming the way people find what they love. We think it’s a bold vision, this idea that where there’s nuance in decision making, we can really help in discovery and decision-making. It’s intentionally meant to be more than just apparel and intentionally meant to be client-centric. I think we do an amazing job of combining humans and machines to create the best of both worlds, where your job is more creative because you can have machines do tasks that are better for machines to do. We did not try to just do e-commerce differently, or brick-and-mortar retail differently — we are restarting the whole experience based on what the client wants and where the client experience is going.

How does the company operate?

It’s a fairly flat organisation and very approachable in terms of the leadership team. We have the right people in the room in meetings and encourage dialogue, or what I call creative tension. We don’t have corner offices — looking outside the conference room right now, Katrina’s desk is open, in the middle of the office and it’s very intentionally there. We want to be open and approachable.

We’ve been innovative in the core of the business model, but we always think about how we can be more innovative in all parts of our business. That’s one of our core values: innovation in everything.

Feedback is also core to how we operate, both externally through client feedback and internally. We have a very robust “collect and reflect” process, which is where, a couple of times a year, people get feedback from their peers and their leaders on what they have done well, what they haven’t done well, and specifically how they are engaging with our “operating system” and our culture.

Our operating system is made up of our core values and leadership attributes, and framed by our vision. It lives in everything we do, from how we hire and develop employees, to how we work with one another, set our strategy and execute on projects. We try to make sure we’re calling out our OS when it shows up in our work. It keeps us true to ourselves.

How does Stitch Fix’s culture develop employees?

We’ve done a really good job of making sure that development is at the core of everyone’s experience here. First off, our new hire on-boarding process. It’s a pretty intensive, two-day process where everyone gets exposure to all functions of the company and their strategic pillars — what each function is responsible for. Most of the time, it’s the leaders of that function that are presenting to new hires. Katrina comes and speaks on how and why she founded the company and where the company is going, then there’s a senior executive panel at the end of the day. The next day, new hires go to the warehouse and really see how a “Fix” comes to life. I think the process really helps to start your cultural journey at Stitch Fix.

As you continue to work within the company, we have specific leadership training that everyone goes through. We believe everyone is a leader, or has the potential to become a leader, so we don’t limit that to just managers or directors and above. We take everyone through our leadership training. It does two things. One, I think people really feel that even if they're new to the company or even if they're not a manager, people are investing in their leadership style. Two, it holds people like me and the senior team accountable to our leadership attributes. We have five leadership attributes that we train people to use specifically and hold themselves accountable to, and those are: learn, develop, trust, inspire and act.

What kind of people thrive at Stitch Fix?

We hire based on this idea of being bright versus smart. You need to be smart to be bright, but bright means individuals are less risk-averse. It means they're more intellectually curious. We really look for people that are bright versus smart because what we’re doing is changing the face of retail and we need people that are intellectually curious and willing to be bold and take risks.

We don’t have a specific kind of person that thrives at Stitch Fix — we hire for cultural add versus cultural fit. Katrina talks specifically about cultural fit being too “people like me” — this idea of who you want to go travelling with or be stuck in an airport with. These are people who are more like you, not people who are going to challenge you and be different from you to make you better. We intentionally look for creative people and people who are going to add to the culture.

What are you looking for in your employees to drive the future growth of the company?

We’re currently at 2.7 million active clients and over $1 billion of revenue, and we’re looking for people that are excited about our future growth. There’s a lot of work that comes with growth. It requires an open mindset and the ability to think about how you can do your job differently. We in the senior leadership team and throughout the company also talk about rehiring ourselves every year — making sure we are the right people for the job as the job evolves. How do we need to develop ourselves to make sure that we’re growing along with the company?

We’re looking for people that are open to change and open to their own personal growth. Frankly, bold risk-takers. Trying to pick clothes for people is a big, bold vision; we need people who are big and bold in their thinking to match.

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