business

ORGANIZATIONAL BEHAVIOR MIDTERM – SPRING 2018

CASE: The Youngest Billionaire

Picture this: the billionaire owner and founder stands in the conference room trying on bras while the

CEO stands behind her, adjusting the straps. The floor is littered with underwear. The owner takes off

one bra and puts on another. Five executives in the conference room barely blink.

Welcome to Sara Blakely’s company, Spanx. In just a few years, Spanx has become to slimming

underwear what Jello is to gelatin and Kleenex is to facial tissue – so dominant is the brand that its name

is synonymous with the category.

At 42, Blakely is not the youngest billionaire in the world. However, she is the youngest female self-

made billionaire. Like many stories of entrepreneurial success, hers is part gritty determination, part

inspiration, and part circumstance. The grit was easy to see early on. As a child growing up in Clearwater

Beach, Florida, she lured friends into doing her chores by setting up a competition. At 16, Blakely was so

intent on success that she listened to self-help guru Wayne Dyer’s recordings incessantly. Friends

refused to ride in her car. “No! She’s going to make us listen to that motivational crap!” Blakely recalls

they said.

After twice failing to get into law school, Blakely started her first business in 1990, running a kids’ club at

the Clearwater Beach Hilton. It worked until the Hilton’s general manager found out. Later, while

working full-time in sales, Blakely began learning how to start a business. Her inspiration for Spanx came

while she was cold-calling customers as a sales manager for an office supply company. She hated

pantyhose. “It’s Florida, it’s hot, I’m carrying copy machines,” she noted.

At the Georgia Tech library, Blakely researched every pantyhose patent ever filed. She wrote her patent

application by following a textbook she read in Barnes & Noble. Then she worked on marketing,

manufacturing, and financing, treating each as its own project. After numerous rejections, she finally

found mill owners in North Carolina willing to finance the manufacturing. "At the end of the day, the guy

ended up just wanting to help me," Blakely said. "He didn't even believe in the idea."

For a time, Blakely relied on stores like Neiman Marcus to set up her table and on word-of-mouth to get

the news out to the public. Her big break came when she sent samples to Oprah Winfrey’s stylist. Harpo

Productions called to say that Winfrey would name Spanx her favorite product of the year and warned

Blakely to get her website ready. She didn’t have a website.

Billions of dollars in sales later, Blakely has no plans to slow down. Spanx is sold in 54 countries, and Blakely wants to double international sales in three years. She says: "The biggest risk in life is not risking. Every risk you take in life is in direct proportion to the reward. If I'm afraid of something, it's the next thing I have to go do. That's just the way I've been."

QUESTIONS:

1. How much of Blakely’s success is due to her personality and effort and how much to serendipity (being in the right place at the right time)? Does attribution theory help you answer this question? Why or why not?

2. Does hindsight bias affect the factors to which you might attribute Blakely’s success? Why or why not?

3. Use the three-stage model of creativity to analyze Blakely’s decision making. What can you learn from her story that might help you be more creative in the future?