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Beauty Inc issue 08/10/2012

Jane Lauder is an avid reader, and The Pillars of the Earth, by Ken Follett, is one of her all-time favorite books. The historical novel weaves an epic tale around the construction of England’s first Gothic cathedral. And just as its main character, Jack Builder, methodically builds the fictional Kingsbridge Cathedral stone by stone, so is Lauder herself me- ticulously laying the foundation for a leadership position in her family’s beauty em- pire, The Estée Lauder Cos. Inc.

This story first appeared in the August 10, 2012 issue of WWD.  Subscribe Today.

The 38-year-old—who is the granddaughter of Estée and the daughter of Ronald and Jo Carole Lauder—has steadily worked her way up through the company’s ranks, starting as an account executive in sales at Clinique in 1996 and rising to her current position of global president and general manager of Origins and Ojon. While neither brand ranks among Lauder’s largest, both are critically important on multiple levels.

Corporately, Origins is Lauder’s play in the naturals category, while Ojon represents its beachhead in the nascent prestige hair-care category. For Jane Lauder personally, the challenge of building both brands is a key marker in her professional development, important achievements for an executive who represents a third-generation family member in a firm that firmly eschews nepotism and prides itself on being a meritocracy.

“She is the ultimate professional—super committed and dedicated, a woman with a mission,” says Rose Marie Bravo, the former chief executive of Burberry who has served on the Estée Lauder Cos. board for the last 10 years. “She is determined to make her mark. Her mission has been to turn around an underperforming brand, Origins, and to make Ojon a serious player in the hair care world.”

Tough assignments, to be sure, but like another favorite character from literature—Mr. Darcy in Jane Austen’s Pride and Prejudice—Lauder thrives on the unexpected, eager to carve out her own identity in a family filled with larger-than-life personalities.

“She doesn’t live off of her last name,” says Jane Hertzmark Hudis, global brand president of Estée Lauder, who was Lauder’s boss during her time at BeautyBank. “She’s driven by a desire to prove herself and she also has the ability to think independently from her family…I’ve seen family members recommend doing one thing or another, and she has the ability and confidence and independence to stand away from it and make her own decision.

“That’s a big thing,” Hudis continues. “Knowing these players as I do, that’s a big thing.”

Dick Parsons, a senior advisor of Providence Equity and current board member of the Estée Lauder Cos. Inc., has known Lauder since she was a child. He says that her independent streak was apparent early on, citing as an example Lauder’s decision to spend a semester at sea while a student at Stanford University. “Not everyone was enthusiastic about this adventure,” he laughs, “but she did it anyway. She is smart, independent-minded and tenacious.”

Parsons says he now sees Lauder applying those same traits to her career. “She is doing all of the things you want someone to do to take on levels of leadership,” he says. “She is committed to the family. She and her sister are major shareholders and they are holding on to their shares because they want to be part of the future of the company.

“She is not a kid,” he continues. “This is not playing house. She has been with the company for a good number of years, she knows what it’s like and this is the path she has chosen for herself.”


Thus far, Lauder has proven herself equal to the latest challenges given her. She took control of a languishing Origins in 2008, and has since increased sales by 8 percent and profit growth by 115 percent, according to industry sources. Sources estimate the brand currently rings up about $240 million in global retail sales. Lauder declined to comment on the figures, but did note that skin care has grown from 60 to 77 percent of the brand’s business in the past three years, a key goal and major focal point for Origins. The brand is profitable.


“When Origins launched, it was primarily skin care,” says Lauder. “Over the years, bath and body became bigger, but if you go back to the core of the brand, the reason that people loved us was for our skin care. We needed to make sure that we were meeting the needs of the customers who had loved us but were not using us religiously or were lapsed.”

“Origins had lost a lot of the sharpness of its focus,” says chairman emeritus Leonard Lauder, whose son William launched the brand in 1990. “It was early to the market, and had a dominant share of a tiny market. As the market grew, the sharpness was not as great as we would have loved to have seen it.”

Moreover, the dynamics of the naturals category had changed. “When Origins launched, the thought process around naturals was more political than performance based,” says William Lauder. “As technology evolved and the consumer became more sophisticated, the market had changed.”


Jane Lauder, who is a keen student of consumer behavior and loves to pepper her conversation with insights gleaned from her time spent in stores, and monitoring focus groups and online conversations, had an epiphany: While the brand’s devotees had aged 20 years since its launch, the product offerings and messaging hadn’t kept pace. “In 1990, [the customer] was probably 20. Now, she’s 40 and worried about lines and wrinkles,” says Lauder. “I don’t think it’s about natural. It’s about performance. The secondary is natural ingredients.


“Consumers don’t come in and ask to buy a natural moisturizer,” she continues. “They come in wanting to get rid of lines and wrinkles or to hydrate their skin, then they see the products available to them, and then it’s, ‘I really love the fact that you’re using natural ingredients.’ It’s talking to consumers in the way that is most important to them.”


During a sales meeting with Macy’s, Lauder hit upon a phrase that crystallized the brand’s message: “Powered by Nature. Proven by Science.” Today, the phrase is Origins’ tagline, and widely quoted by executives when they talk about its turnaround.



Reinforcing the positioning was the March, 2011 launch of Plantscription Anti-aging Serum, claiming a visible decrease of lines and wrinkles in four weeks and trumpeting in its ads results that “rival that of a leading antiwrinkle prescription.” Fabrizio Freda, chief executive officer of the Estée Lauder Cos., says that the repositioning of Origins as a high-performance natural skin care line, along with Lauder’s orchestration of the brand’s launch in China, have been key to the future growth of the company. “China is key for any brand which has strong ambitions in the area of skin care in the long term, and the segment of naturals is one of the fastest growing segments in the country,” he says. “Jane has been the one deciding that the time was right to launch Origins in China and she was able to manage the P and L of the business globally in order to make space for the launch.



“Jane is a person who you can trust,” he continues. “You know that when she decides to do something, she will deliver.  I would say trust in delivering is one of her key characteristics.” Lauder’s even-handed stewardship of Origins demonstrates what those who are closest to her describe as her most defining characteristics: focus and determination. “Of all the people in the family, I believe she is the most driven,” says her father, Ronald. “Everyone is driven, but she is unbelievably driven to make a success.”

“She is very driven, totally dedicated and loves what she does,” says her sister, Aerin Lauder. “She’s always thinking about it, even when she isn’t at the office.”   


“If I were a Marine general and Jane were reporting to me and I commanded her, ‘Take that hill!’ Jane would!” chuckles  Leonard Lauder. “She is a very determined woman and has been since she was a baby.”  


Bravo has seen that resolve firsthand at board meetings. “She is someone who  says what she thinks,” says Bravo. “You know what is on her mind. If she doesn’t agree, she is going to speak her mind. Mrs. Estée Lauder was a woman who never took no for an answer and who set very high standards. Jane shares that determination and professionalism and conviction.    


“I see Jane as a risk taker,” Bravo continues. “To take an underperforming brand that is under the microscope and be charged with turning it around is a risk. [She has] the ability to take on a big challenge and has the courage to go for it.”


That propensity for thinking big begs the question: Is Lauder being groomed to one day become ceo? William Lauder was the last family member to hold the position; he was elevated to executive chairman in 2009 and Freda was named chief executive, the second nonfamily member in the company’s history to hold the role. Currently, the Lauder family owns about 40 percent of the company’s total common stock and 87 percent of the voting power. As of June 28, 2012, Jane Lauder owns 4,358 shares of Class A stock and holds options to purchase many more. Additionally, she holds 17,161,020 shares of Class B common stock held in trusts for her benefit. Her shares equate to a voting power of 9.8 percent, according to the company.


Lauder herself deftly deflects the ceo question. “What I would say about this com- pany is that some of the people who have made the biggest contributions haven’t necessarily been ceo. Even my grandmother wasn’t ceo. My father has been one of the greatest contributors to the growth of Clinique and he was not ceo. And Carol Phillips, who really created Clinique, wasn’t ceo. All of these people have made lasting contributions. There is a lot of opportunity,” she concludes. “It would be short-sighted to think that that would be the only way you could contribute.”


Others are less reticent. While Parsons, the former ceo of Time Warner, is loathe to tarnish Lauder with what he calls “the Sports Illustrated kiss of death” (in which highly promising rookies would appear on the cover of the magazine, only to see their careers subsequently languish), he did say, “Jane is smart and serious. She is purposeful. People know that when she comes to play, she comes to play.


“She is doing all the right things to lead to the bigger leadership challenges down lthe road,” he says. “She is not starting at the top and dabbling. She is learning from the bottom up, in the field, sleeves rolled up.”


Margarita Arriagada, senior vice president of merchandising at Sephora, agrees.

She worked closely with Lauder on the launch of Origins at the retailer in March. “What sets her apart is how comprehensive and thoughtful she is on how she approaches brand development in every single aspect, from assortment to brand positioning to execution. Jane is definitely hands-on and a strong listener,” she says. “She is very thoughtful on balancing what is an important point of view in terms of leadership positioning within the brand and at the same time, sensitive to understanding what the consumer is thinking and what works in your environment.”

Lauder is going to need those skills as she embarks on her latest assignment: Transforming Ojon from a niche player in the hair care business into a powerhouse.

The challenge is threefold, says Lynne Greene, the global brand president of Clinique, Origins and Ojon and the executive to whom Lauder reports. “We not only have a brand that we need to create a succinct and clear position for,” says Greene, “but we are also pioneering a new channel and a new way to sell hair care.”


The numbers are daunting: As Lauder points out, 88 percent of hair products in America are sold in the mass channel; the majority of the rest is sold in salons. Prestige retail comprises a tiny amount of sales. Lauder hopes to change that. After determining that damage is the number-one consumer concern when it comes to hair care, she has been repositioning Ojon as a hair-repair brand. Still, challenges remain. “When you buy skin care or makeup, you bring it home and it sits in your medicine cabinet,” says Lauder. “When you buy hair care, you put it in the shower, and all of a sudden your kids are using it, your husband is using it. So people are like, ‘I don’t want to buy the expensive stuff if everyone is going to use it.’”

Conveying a product’s benefits at point of sale has also proved challenging. “With makeup or skin care or fragrance, you get the immediate gratification of, ‘Do I like this product or not?’” says Lauder. “But you’re not going to test shampoo or conditioner on your hands, so you need something that will show immediate results to consumers.”


To that end, Lauder conceived of and fast-tracked the launch of Rare Blend Total Hair Therapy this May. A tri-phase oil with eye-catching shades of canary yellow and bright orange, it was designed to impart instant shine and control frizz. Lauder conceived of the idea when brainstorming how to translate the BB cream phenomenon from skin care into the hair category.


A genuine product junkie (“My friends say they’re worried about sagging, and I say, ‘You don’t use an eye cream? It takes 10 seconds,’” she says incredulously), Lauder relishes the complexity inherent in the research and development side of the business. “It’s what makes us tick,” she says. “People don’t realize how much goes into every product that we make. There are so many different aspects that go into it that make it fascinating—it’s like no other industry.

“I’m always thankful my family is in a business I love,” Lauder continues. “It could be steel grommets or something,” she laughs. “That would be a little less fascinating.” She’s also engrossed by the changes wrought in the beauty business by the advent of digital. “You can get information in so many different ways that you couldn’t in the past,” says Lauder. “How do we address that around the world? In the past, there was only certain media that she would consume. Now, there’s so much and it’s multifaceted and you’re doing several things at once. For brands like Origins and Ojon, that is one of our biggest challenges.”


Her modus operandi for solving such challenges is to take a collaborative approach and to focus her team on its key missions. “She’s very easy to work with,” says Dr. Andrew Weil, who has a co-branded skin care range with Origins. “She is very unpretentious, unassuming, natural, real. I find that refreshing in an executive.”

Says Lauder of her management style, “I’m not one of those people who wants to have small meetings. I’m always encouraging people to come and listen. You learn the most from listening to what’s going on around you and hearing how people react in meetings, how they present.”

Of course, in her immediate family, Lauder herself has had some of the best teachers in the business. She describes the influence of each: “My father’s approach is pretty direct. He is incredibly intuitive and forward thinking,” she says. “What’s fascinating is that he is always ahead of his time. He’s been talking about getting into using TV as a way to attract more consumers for 10 years and now it is one of our biggest focuses as a corporation. He can really look to the future and have big ideas.”

Of her uncle, Leonard, she says: “My uncle is very hands on. He knows all of the markets and all of the retailers. I would say my father is a big visionary thinker and my uncle is a visionary and very much into understanding every nuance and detail.”

Of her grandmother Estée’s approach to business, Lauder says, “She was so intuitive. She knew what women wanted.” Lauder goes on to tell a story of how Estée Lauder always instructed fragrance spritzers to spray a woman’s right hand, since that is the hand that most will touch their faces with throughout the day. “I would never have thought of that,” she says. “She was a naturally intuitive person.”

And of her own approach, Jane Lauder describes it thusly: “I’m probably methodical. I’m direct but methodical. I think about things. I plot out where I want to be and where I want to get to.”

When asked the path she has plotted for Origins, Lauder shows herself to be a true descendant of one of beauty’s most storied—and ambitious—families.

“Huge,” she says. “The next billion-dollar brand.

“We’ve got a little ways to go,” she admits, “but you’ve got to think big. Look at some of these brands—MAC, Crème de la Mer—they were tiny. If you don’t dream big, you’re never going to get there.”

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