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[Music]
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[Music]
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so uh William welcome to knowledge of
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warden uh you've been with Estee Lauder
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for 27 years for 5 years you served as
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chief executive for three years now
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you've been executive chair looking back
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on your career of the company you've
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made hundreds of decisions took dozens
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of big actions which of those decisions
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or actions uh at the moment looking back
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make you most proud you know I wish I
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could say there's any one decision that
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makes me most proud there's a series in
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cumulative decisions and you can build
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from one to the other
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um going back almost 20 years now we
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made a decision to We Were always in the
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business of building our own Brands and
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we felt that if we couldn't invent it if
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it wasn't invented by us it wasn't a
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good idea and we saw this brand called
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Mac and Mac was a brand created by uh
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two people in Canada and they came up
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with an idea that was really good and um
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we said you know what maybe we're going
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to buy instead of build and that really
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opened our eyes to a whole another way
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way of how we managed our business and
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our portfolio of Brands and we shifted
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from being solely and invented and
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create and Market it to we are a network
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company which this extensive network of
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distribution and expertise in
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aspirational Beauty and now we become
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agnostic about whether we're the authors
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of the brand or the acquirers of the
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brand we had to go through the
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discipline of it's a very different
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discipline building has High relatively
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low cost to entry relatively higher
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risks to success buying much higher cost
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of Entry lower risk to success so
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balancing that in our portfolio in our
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mind was very transformative for our
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company really ever since that was a big
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major change in our decision making as a
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corollary to that we started doing
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licensing and fragrances for first was
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Tommy Hilfiger then Don Karen and now
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many others too and that also changed
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our philosophy of what kind of company
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we were and what we were going to become
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as a company the upshot of that was is
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it really changed us even though today
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90% of our revenues come from efforts
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that we've made most of our Acquisitions
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represent 30% of our Global sales but
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90% of the revenues of those
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Acquisitions come from while those
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Brands were part of our portfolio so
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we've added a great deal of value um to
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or for our shareholders to and
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productivity for these companies but
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it's changed the way we think about our
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company how we manage our company
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strategically how we allocate our
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resources and how we think about what
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we're going to be in the next 20 years
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great and William we'd love to dive a
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little bit into your decision-making
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process could you tell us a bit about
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maybe the toughest decision you've ever
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faced as a leader what were the options
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how you thought it through and and then
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how it played out well you know sort of
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Adam this sort of follows on to the Mac
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question which is we had a brand which
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was created in the late 1970s called
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prescriptives
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and prescripts was forward for its time
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and it was sort of the emotional
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intellectual underpinning of what has
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now become the makeup artist Brands and
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their position was exact skincare exact
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makeup and um prescriptives was doing
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extremely
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well and at one point we had an option
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to invest in Mac at a much earlier stage
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in its development and we were looking
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at prescriptives growing rapidly and we
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said no M that money invested in
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prescriptives give us a better return
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than mac haha 20 years later that
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wouldn't have been the case at all
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because essentially we euthanized our
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own brand first we bought Mac then we
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bought Bobby Brown and over a period of
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time the prescriptives brand lost its
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Mojo it lost its upward momentum for any
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number of reasons and we were holding on
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to the brand from a competitive strategy
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standpoint because our Retail Partners
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had supported the brand for many years
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it occupied good real estate was doing a
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decent business wasn't losing money
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wasn't making money so there's a capital
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cost involved of preserving the space
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for the next big idea we might
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have so we could afford the rent the
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effective rent of less
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productivity because it cost more to
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close it than it did to keep it going
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the recession of
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20089 came along and that changed the
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Dynamics dramatically and all of a
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sudden the rent tripled the rent for
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occupying the space tripled and the
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Brand's productivity was went down
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dramatically and there was a lot of
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downward pressure and sales in a lot of
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places and we could no longer
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tolerate a loss maker to for a future
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opportunity and so we had to make the
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decision whether we were going to
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continue to invest in supporting this
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brand and paying the rent or whether we
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said no we're not going to do it so we
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had to close the brand and that's very
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emotional it's like hiving off an arm or
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a leg um as a percent of sales it wasn't
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really really meaningful we could afford
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it but the real issue was is you're
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saying okay something we created
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something we've enjoyed for over 30
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years it's time for it to
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go so we had loyal consumers we had to
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look after how are we going to transfer
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them to with the products that they love
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to another brand in tell them you're
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going to love them just as much how we
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going to take care of the employees
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who've been dedicated and loyal to this
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brand how are we going to deal with our
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trade with our Retail Partners who've
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been supporting this brand because of
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their trust in us what were we going to
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offer them for our saying look we're no
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longer going to be in this
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business since we had to continue to be
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in business with these retailers we
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couldn't just turn around and say sorry
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guys we're out so that was a very
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difficult long somewhat painful process
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and today the brand exists only online
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it's a fraction of itself but it exists
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and has the core key skus that has have
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a loyal following which they can only
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find
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online um maybe waiting someday to come
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back again in a in a brick and morar
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world but for the moment that's all
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that's left of it and uh the impact on
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the people the impact on our trade the
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impact on our strategically was not easy
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um but we don't look back with regret
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saying gee we could have done it
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differently William we're going to turn
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a little bit more personal now and as we
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think about leadership your leadership
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style shares many um attributes or
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capacities or you're on a platform
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that's not all that different from
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people who lead other
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companies but every leader also brings a
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unique blend of the way you approach
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problems or think about the business
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could you give us an illustration that
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somehow brings out your more unique
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approach to Leading at Estee Lauder you
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know
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um I'm much more
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comfortable allowing others in our
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organization to take the credit for
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Success my enthusiasm comes from seeing
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them succeed and achieve their
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objectives and my goal has always been
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to motivate them encourage them and
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actively push them to their success um
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um I sort of use an
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analogy there are times in the nature of
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our business where sometimes the people
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in our organization felt they needed
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permission to be as good as they could
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be and one of the things I did as I said
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you don't ever need permission to be
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your best and do your best and compete
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at your best you actually need the
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opposite you need permission to not try
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hard and you're expected to try hard
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every day so when I had the um Clinique
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brand I took over the leadership of the
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Clinique brand Clinique had always
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perceived itself to be the
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younger sibling of the SD laer brand but
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they were on a roll they were really in
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a Zone from a product positioning
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standpoint from a pricing positioning
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standpoint on a sweet spot of a
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demographic and they were doing very
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well and one of the things they saw was
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is that they were rapidly
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overtaking their sister brand SD Lauder
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and a number of other competitors
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and the woman who was in charge of the
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sales organization in North America a
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very energetic enthusiastic organization
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led by a very very capable
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leader she came in she said look this is
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what we see this is how we're going to
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work but she said I need your permission
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that it's
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okay not only for us to overpay overtake
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our sister in share and sales but to
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celebrate
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and I said why do you ask of course you
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do you must I
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insist and I said well why would you
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think she goes well you know everyone's
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very reluctant and there I said no go
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and she said well your name is Lauder I
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said I don't care what My Lan is I only
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care that you're doing the very best
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that you possibly can go for it guys and
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so one of the things I started doing is
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my office at the time was right outside
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where the main conference rooms were so
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there's a lot of action around my office
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all the time so I started talking using
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symbols
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for the way I felt about the way we look
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and I get up in front of the group the
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whole group you know 200 people and say
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guys I want you to imagine there's only
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one place we're going to look at our
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competition it's going to be in the
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rearview mirror and I want those
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headlights getting smaller and smaller
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every single day said that's the only
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place you can see your competition and I
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said you know why everyone says no
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I said because if you're not the lead
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dog The View never
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changes so I put up on the sort of the
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counter in front of where my assistant
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sits put a oversized rearview mirror
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that had Clinique on it and with two
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little pin holes so so simple hey I keep
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saying you want to the only place you're
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going to see that there it was for
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everyone to see when they're going into
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the meetings and the conference room and
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I couldn't find an appropriate poster or
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sign about a lead dog that wasn't going
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to have the the behind of a husky or
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something and I didn't think that would
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be appropriate um but I have found over
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time but by using analogies and
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encouraging success and celebrating the
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success of our teams that everyone seems
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motivated and
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hungry good William continuing on the
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personal note as you look back on your
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career is there an experience or a
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mentor who has most shaped your view of
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what effective leadership involves the
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treasury I believe to become Chief of
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Staff uh to the
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president and he was a very
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straightforward matter of fact smart
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accomplished um uh
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executive and one of the first things he
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said to me was if you're not in control
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of your calendar you're not in control
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and I've used that as a mantra to
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constantly look at what I'm doing where
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I'm going and how I'm doing it to try my
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level best to be in control to try to
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say I will allocate this time for these
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meetings and I know now and the and from
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a leadership
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standpoint a lot of my Effectiveness is
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my
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presence physically being there
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encouraging supportive and adding input
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it's not just the contribution you
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make by participating in an email Trail
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or reading and analyzing it's about the
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leadership presence of being in front so
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I know there are times when I'm I gotta
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be there and you have to multiply
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yourself and be in many places
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simultaneously or it may mean you're
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going around the world for a two- day
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meeting for two days because you got to
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be there to both respect somebody who
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would who's honored by your time and
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presence and motivate them for the time
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you've given them
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and I've learned that from politicians
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I've learned that from effective
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executives I've learned from my father
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was a wonderful executive who taught me
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a lot when I worked at Macy's I learned
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from some Executives who were very
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effective and I learned some from
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Executives who weren't so effective
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oftentimes I learned about saying oh gez
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when I get to a position of leadership
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I'll never do that and this is something
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I'll I'll make sure I avoid I've learned
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from people who have I have worked for
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me in ways that are innumerable because
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of the way way they've
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responded sometimes they respond very
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well to certain ways that I've tried to
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lead them and say aha this works what
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makes this work sometimes I've learned
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it because I've tried stuff that hasn't
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worked that wasn't me or wasn't the way
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I get the most out of somebody I
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remember once I was a midlevel executive
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at Macy's and um one of my sales
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managers was you know I just was
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frustrated they weren't getting stuff
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done the way I wanted to get done and
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for whatever reason I sort of tried to
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do it now what you know sort of a hard
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approach and she had this look on her
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face like what are you
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doing I went
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away I turned around and came back about
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three minutes later took her aside and I
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said look I'm really sorry for speaking
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you that way that's not me I know I
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upset you I did the wrong thing period
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end the story I'm sorry I said that
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being said what do we what can I do to
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help you get this done because we still
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got to make sure it's done she said
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thank you for saying that I really
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appreciate it it'll get done
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now
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and I don't think I've ever yelled again
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at
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work because I didn't feel good about it
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didn't get great result didn't motivate
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anybody did the wrong thing period end
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of story I'm sorry I said that's being
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said what do we what can I do to help
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you get this done because we still got
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to make sure it's done she said thank
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you for saying that I really appreciate
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it it'll get done
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now
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and I don't think I've ever yelled again
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at
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work because I didn't feel good about it
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didn't get great result didn't motivate
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anybody I'm going to pick up on that
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it's often said that learning leadership
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is a it's a lifelong process two-part
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question here looking back on your
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career what do you know now that you
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didn't know about leadership when you
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were in in a more Junior position and
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then as part of that as you thought
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about leadership that you now exercise
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and see around you compared to what you
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thought was critical for leadership
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let's say 15 or 20 years ago what turns
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out to be wrong that you thought might
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have been true about leadership back
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then but with experience turns out to be
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not
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correct I've learned to better
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meter how and where you push and
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communicate and
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don't and also how to really set
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priorities that are
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important I think when I was a young
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executive whatever the task in front of
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me was the most important task and and I
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almost wasn't thinking of items two
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three or four number one or whether or
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not there were eggs or egos broken along
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the way to get that task
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done I've now feel more confident in a
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little bit of patience one two everybody
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has the priority list but everyone not
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everyone's priority list lines up with
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mine so first job is to line them up
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with my priority list or understand why
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we're not aligned how we're going to get
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into alignment it's not my alignment
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it's not your alignment it's our
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alignment because if I'm pushing my
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items 1 to three but oh by the way my
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item three is your item five and your
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item one is not even on my top 10 we got
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a
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problem I don't think it's my problem I
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don't think it's your problem we have a
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problem so I first learned all about
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communication and Alignment get everyone
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in the same order of priorities and now
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let's figure out how we can accomplish
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it that I sort of learned the wi wisdom
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of time has taught me that you just got
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to get it done got to get it done you
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can't think of how it's going to take to
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get done and that the how you get it
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done how long it's going to take them
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but the how you get it done is important
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so that the next time you go back it's
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easier still and it's easier still just
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a quick followup looking back was there
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something a few years back you thought
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should characterize how you're going to
00:17:54
lead which with experience turns out to
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be a false
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proposition you know there was a time
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and I there was a time
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when extraordinary knowledge of data in
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and of itself seemed to be the be all
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and end all and I would spend hours
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pouring
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through pages and pages and pages of
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data running my finger across running it
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down looking for the anomalies and then
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trying to prob
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the wise and the were
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force and I learned over a fairly
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significant period of time
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that it's the most of the wise and the
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wfor is are about people most of that
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those people were about motivating and
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focusing
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and being really really persistent in
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and of itself to the point of not
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letting it letting go
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can be debilitating for an organization
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because that's all they're going to
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focus on and occasionally you need to be
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that way occasionally for really key
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important things but not the only thing
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and I used to spend a lot I used to
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spend a lot more time than I do now
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visiting stores throughout the world and
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throughout the United States and I used
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to love it love it I still enjoy it I
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just don't do it as much as I used to
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and you know I'd get into the car and
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whoever the regional executive was would
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be driving the car and she'd have a book
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there and I'd be sitting in the driver's
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seat in the in the passenger seat of the
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car car going through the book going
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down going through so tell me about this
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tell me about this why is this business
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good why isn't this business good what
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can we do to make it better while she's
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driving and uh my sales manager says to
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me one
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day you know how nervous you make these
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people as they're driving and you're
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going to talk about the business and
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there you are pouring through their
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business door by door by door and
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they've got to pay attention to get off
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an Exit 12 simultaneously they've got to
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give you an intelligent answer and make
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sure they don't get into an accident
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with you in the passenger seat I said
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yeah I get it that's a good point and
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she goes I'm not telling you not to do
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it but just she said lay off a little
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bit let them drive and talk about their
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business and you've got time to quiz
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them later and so I you know I learned
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this sort
00:20:19
of that hard driving you know detail
00:20:22
oriented manager's approach may work for
00:20:25
some or may work for some in certain
00:20:27
roles but as you move on in leadership
00:20:31
that skill set in and of itself isn't
00:20:34
enough if you aren't also sensitive and
00:20:37
don't have that high emotional IQ
00:20:39
that'll get people motivated to really
00:20:41
do the right
00:20:42
thing final question for today if you
00:20:45
think about offering advice to new
00:20:46
leaders what are the two or three most
00:20:48
important things you'd want them to know
00:20:50
need in your support to do a really good
00:20:53
job what is it that you need to do to
00:20:58
get them from being really good to
00:21:01
excellent and what is the thoughts what
00:21:04
are the motivations when do you know
00:21:08
when it's time for you to be in the lead
00:21:10
breaking Trail when it's time to allow
00:21:12
them to break Trail and by all means you
00:21:15
got to know when is it time to step
00:21:17
aside and let them take the
00:21:19
praise that they need in your support to
00:21:24
do a really good job what is it that you
00:21:27
need to do
00:21:29
to get them from being really good to
00:21:33
excellent and what is the thoughts what
00:21:35
are the motivations when do you know
00:21:39
when it's time for you to be in the lead
00:21:41
breaking Trail when it's time to allow
00:21:43
them to break Trail and by all means you
00:21:47
got to know when is it time to step
00:21:48
aside and let them take the
00:21:51
praise great thank you for joining us
00:21:53
today thank you
00:21:58
[Music]
