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With a career that spans more than 30 years, Philip Shearer, an avid competitor, thrives on big moments, making big decisions. Utterly comfortable with taking risks, he’s reaped the rewards throughout his career, whether it was betting the farm (and winning) on the launch of Giorgio Armani’s Acqua di Gio while at L’Oréal or being a pioneer in introducing Western beauty brands into the Chinese market. Today, as head of the $1.38 billion Groupe Clarins, Shearer oversees an equally iconoclastic group of brands, including its eponymous skin care powerhouse and Parfums Thierry Mugler.
How was it coming into a company that is so family oriented? You’re one of only two outsiders to have ever headed Clarins.
I’ve actually been involved with family companies my whole career, from the Lauder family to L’Oréal. Even my first job, at Eli Lilly, had a family side to it. And I’m on the board of a privately owned spirits company, Bacardi, which is family-run. The culture of family businesses doesn’t surprise me. The twist at Clarins is that it’s French, which makes it more special.
It’s good and bad. It’s very different from working in the U.S. But the business is the same. The business is the business.
Where is the business going in the next two-to-five years?
On the consumer side, there will be an erosion of the fragrance business. In countries like the U.S., there may be a cultural change, toward wearing less fragrance. Skin care will be booming, though. We have an aging population. People know more about beauty than they ever have. There are geographical changes in the market, with a changing weight of different ethnic groups. The Chinese consumer is evolving rapidly, becoming more sophisticated, and that helps skin care. Then you have Latin America, especially Brazil, whose population is so diverse it’s a market in itself. Plus, there is the growing Latino population in the U.S.
All of these groups are reacting to different things. Some are more focused on skin care, some on makeup. In Asia the first step into beauty is often hair; in Brazil, the body. Of course you can’t write off Europe or America. I’m a strong believer of the everlasting power of the U.S. All the transformational inventions of the last 40 years are coming from there. Google, Microsoft, Apple.
So you have to play a whole new game today.
Exactly. For people like me who have done business for a long, long time, it opens up a fantastic number of opportunities we didn’t have 30 years ago. But even if you have deep pockets you have to allocate your resources to meet the best opportunity. In our case, [it’s] skin care.
It feels like we’re ripe for the next killer skin care innovation. What research most excites you now?
We’re more scientific than ever, but for skin care, we look first to efficiency and safety. Research is evolving at an incredible rate. That means there are extraordinary opportunities ahead of us, but we have to have huge humility. The more you discover, the more you have to admit what you didn’t know before. For instance, we just launched a product for firming, an idea that’s very important for us. We’ve discovered that it’s not just the cells that are important but the links between them too, via enzymes and proteins. So our products will become more sophisticated. In 2010, we launched Vital Light based on research we did on a peptide combined with plant extracts, making a new molecule. But with discoveries just ahead of us, we still have to choose which ones we want to go with. We play to our strengths. For us, that often means firmness and slimming, and also protection. Back to humility, we’re also going to start working more closely with outside research institutions, universities and suppliers. We have French institutions and hospitals that we’ve been working with for years, but now we’re going to try some new associations. Back to geography, there are other cultures that have been dealing with plants for thousands of years, and we may want to think more about them too.
So you’re getting more global in your research as well as your sales arm?
We’ve accelerated that in the last couple of years, attracting employees from different cultures too. We have a more international profile to our workforce now. But people make so much of globalization! It’s been going on forever. Everyone forgets the potato was once a New World product. Chocolate too. Google did not exist in 1997. Now it’s the only word that exists in all languages.
Have you ever launched a serious clunker of a product?
Of course! Though at Clarins, under my watch, not yet.
What about your greatest Clarins success so far?
So far, that’s the Asian relaunch of a product called Shaping Facial Lift. It was designed by our founder after he went to Asia and realized that many Asian women felt they had too round a face. His research led him to the little fatty deposits we all have under the face. He created a product to remove the fat from those little deposits. We’ve had that product for about 10 years in Asia and a year ago decided to relaunch it, with stronger brand coding and very simple language. It’s been a huge success. We actually rejiggered all our advertising campaigns in the same way about nine months ago.
You spend a significant amount working to improve existing products.
We call it permanent innovation. A product we’re relaunching next year called Beauty Regenerant is a good example. It’s been within our range for about 30 years, but we’re now at the fifth generation because we keep discovering new firming elements. How would you describe your management style? I’m too nice! Really? Yes! I’m famously a very, very nice person. So far, I’ve been really lucky I love what I’m doing and I love people. However, I’m very demanding. Not more of others than I am of myself, but it’s true that when people don’t play the game I’m not easy. How do you motivate them? The best motivation is success, like scoring goals. In the U.S., in the past three years we’ve focused our efforts on a couple of specific doors, like Bloomingdale’s on 59th Street. If we can show success in one place, we can create a recipe for success and spread it around. Once the team knows how to do it, they can do it in many places, and it becomes a spiral of winning.
You sound like the sportsman you are.
I’m extremely competitive.
Since you were a small child?
Always. I’m the youngest of four children, and when you’re at breakfast and you want cornflakes you have to fight for them. In sports, either you win or you don’t. You’re either a hero or a zero. You make it to the podium to collect your medal or you don’t and the difference can be a hundredth of a second. I’ve just gotten back into racing cars, Euro GT, and I’ve hit a few walls. Literally.
What’s the hardest business decision you’ve ever made?
It’s very hard to change something fundamental in a company when you can’t prove to people that it will work yet. When I arrived at my first job in Mexico, I had to cut 30 percent of the sales force. It had to be
done, but there’s a moment when you are the only one who trusts your choice. I’ve faced that many times, even in buying a company in one of my previous lives.
When was this?
I was working, shall we say, at one of the largest French companies buying a smaller company in the U.S. with a very different profile.
Shall we say this was L’Oréal and Kiehl’s?
Yes, you can assume that. At the time, people didn’t understand. It was so different from what it’s become. My bosses said, okay, it’s your head, it’s your decision. You knew it would be over for you if it didn’t work out. Pretty much. At another company where I once worked, people didn’t believe China was important. Sometimes you are the only one, but that’s what you’re paid for. Financing decisions can be hard too, because they’re often too sophisticated for most people to understand, and you see the results over a long period of time.
You face some extraordinary challenges now. How do you deal with market chaos today?
The first thing is to be a realist. In 2008, when Bear Stearns fell apart, I came back to France and said, “Something is going to happen. I don’t know what but something big is coming.” So in April of 2008, we froze the head count. When you see a lot of clouds, you buy an umbrella. Or at least you don’t plan for a big party outside. We were ready for the clouds.
You’ve talked about the evolving sales landscape. Where is the future of retail?
I’m going to say something surprising. I love department stores. You can showcase your brand without having to create all the traffic. Great stores like John Lewis, Nordstrom, Bloomingdale’s, they’ll be there forever. Within that equation, all of us have to perform a function. At Clarins, we’re best at manufacturing products. We’re great at spas. But I’m not such a good retailer. Promotions for Halloween are not what I’m best at. When all the participants do what they’re best at, you move forward. With mature markets, my fear is when you get crazy discussions about margins or payment terms or they think they’re stronger than you.
Do you believe in mentors?
I’m wondering if I ever really had one myself! I’m too much of an independent person. A family mentor makes sense but in business, it’s different. Every time a mentor wanted me to do one thing, I did something else, so I’m my own mentor in that way. That said, one of my biggest satisfactions is when someone you’ve helped calls to thank you or ask for advice. The danger is that some people have huge potential but between what you can see and what they’re prepared to do, there is often a huge gap. It can be disappointing, but maybe you’re not being a good manager or haven’t given the right advice. There are millions of potential Napoleons in this world, but there’s only actually been one.
IN BRIEF: Born in Morocco to Franco-British parents, Philip Shearer has lived on nearly every continent in the world. After earning an MBA at Cornell University, he was hired by Eli Lilly, the pharmaceutical giant that owned Elizabeth Arden. In 1988, he joined L’Oréal, where he oversaw businesses in the U.K. and Japan, and returned to the U.S. in 1994 to head up Lancôme; in 1998, he created the luxury division at L’Oréal U.S. and became its president. In 2001, Shearer joined the Estée Lauder Cos. Inc. to head up its international division; one year later, he was appointed group president in charge of Clinique, Origins and online activities. He joined Clarins as ceo in 2008, becoming only the second nonfamily member to head the company since its creation by the Courtin family.