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Fabrizio Freda has no use for conventional wisdom.
That was clear Wednesday morning when the president and chief executive officer of the Estée Lauder Cos. Inc. was interviewed by Rose Marie Bravo in front of 142 people attending the Fashion Group International’s latest Tastemakers Series of talks.
Exuding his trademark charm, Freda also is adept at handling crowds. For more than an hour, the conversation at Manhattan’s 21 Club between him and Bravo, who is a Lauder board member and former Burberry ceo, ran the gamut from what surprised him when he joined his present company in the midst of the 2008 financial meltdown to how he envisions the future. His answers to Bravo’s questions were analytical and contemplated, sharpened with insight and leavened with flashes of wit.
At one point Bravo shifted gears by asking what he gained from their mutual Italian heritage.
“Italy trains you to be able to achieve difficult things in different environments because making things happen in Italy is very difficult,” he answered to loud laughter. Freda then sharpened the point. “There is a beautiful song [that says]: If you can make it in New York, you can make it anywhere. If you can make it in Napoli, you can make it anywhere. New York is a walk in the park.”
He struck an unusual chord by talking about the value of diversity and the power of individuals working together. Freda said he always wondered why bosses seemed obsessed with strengthening their workers’ weak points. “The principle is not the principle of making people improve themselves every day,” he said. “It’s about leveraging strengths. Why do we spend so much time speaking about what I have to improve rather than leveraging my strengths that will pay out much better? We are a group of individuals that work together, and each one of us has very unique strengths, very different one from another. Because we work in teams and because we collaborate in different ways, you create winning teams, rather than winning individuals.”
Much of the talk centered on his last five years at Lauder, and he came across as a leader who was intent on effecting change while preserving the vital essence. He joined Lauder a few days before the death of Lehman Brothers and the collapse of the financial market. “There is nothing better than a big crisis to make you look at a business in a different way,” he observed. “This really accelerated all the changes that William [Lauder, executive chairman] and I wanted to do. We were able to do that much faster and much deeper, frankly, thanks to the crisis.”
He explained that the challenge he faced was to take the talent-rich Lauder, which was loaded with unique brands, and add scale, while preserving the differentiation of the brands. The answer was in creating a leadership team that gave rise to a common strategy, a heightened level of collaboration, including a more egalitarian attitude on individual compensation. While preserving the distinctive brand identities, these dynamics changed attitudes and behavior, he said, adding “If you don’t change the behaviors, nothing changes in any company.”
He noted that past experience can provide knowledge but it also can act as an anchor, holding a business back. “The role of leaders is to remove the anchors and project the company into the future,” Freda said, making clear that he prizes a certain kind of wisdom. He said, “This wisdom to distinguish what we need to change and what we need to preserve and protect is actually the wisdom of leadership.” One tool that can be used to enhance this ability is he called “the power to listen.”
Freda gave the crowd a sneak peak at a piece of a presentation he was scheduled to roll out before the Lauder board the next day. The centerpiece is what he calls the compass. Predicting the future by crunching number is mostly guesswork, he indicated. The important thing is to know in what direction the market is moving. So instead of trying to map out the next three years, the trick is to look ahead and envision how the business will look in 10 years. Then working backwards towards a present course of action, like investing in China. “It’s all about determining the future and reverse engineering,” he said. “That is what the compass is.” He noted that an executive needs two kinds of creativity —blue-sky ideation and clear-eyed analysis.
Of course, the best engineering can go haywire, and Freda was quick to say that failure is a good teacher. But its value has limits. As if talking to his fellow Lauder executives in the room, he said, “Please fail fast and fail cheap.”