As H. Ross Perot once said, inventories can be managed but people must be led. Strong leadership is particularly critical now, as the beauty industry continues to grapple with the fallout of the global economic crisis and the shifting paradigm of consumer behavior in an age of uncertainty.
This story first appeared in the May 8, 2009 issue of WWD. Subscribe Today.
Along with the changing landscape has come a new era of leadership for two of beauty’s biggest players. The Estée Lauder Cos. recently elevated Fabrizio Freda to chief executive officer after 16 months as chief operating officer, while Ed Shirley has taken the reins of Procter & Gamble’s beauty and grooming business as vice chair of the division.
Each has a strong vision for strengthening the position of their respective companies during tumultuous times and beyond. Freda comes to his post as an outsider, joining Lauder from P&G where he oversaw the global snack division. His ambitious strategy for Lauder includes ideating and implementing a global vision for the company, driving out inefficiencies and growing the mature brands while looking to increase sales from underexploited categories. “The real long-term goal,” he tells WWD’s executive editor of beauty Pete Born and beauty financial editor Molly Prior, “is to become so global that the opportunity to grow will be enormous.” His plan for achieving it is in “The New Guard.”
Shirley, too, is a relative outsider to P&G, having come to the firm as part of its acquisition of Gillette in 2005. Though P&G’s beauty and grooming business is massive—reaching almost $28 billion—recently sales have slowed. Shirley is charged with reigniting growth. His plans call for creating a cultural change at the 172-year-old packaged goods behemoth, one that places a premium on agility and innovation, fostering cross-brand collaboration and focusing on the men’s grooming business, thus far an underleveraged aspect of P&G’s portfolio. “What I see as the big opportunity is to identify how we can play across brands and across categories,” he tells me in “Team Shirley Takes the Field.” He’s thinking big. P&G has promised Wall Street growth of between 4 to 6 percent, but says Shirley, “I’m a very competitive and driven leader and I look forward to finding a way to do better than that.”
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Though their businesses are considerably smaller, the five young CEOs featured in “5×5” — all of whom are under the age of 40 — are not only surviving but thriving. Their brands represent the future of the industry, and as such, we were curious about how they’re leading during times of crisis. “As niche brands, we can react more promptly and we can shape the future,” says Etienne de Swardt, ceo of Etat Libre d’Orange. We are six people, not 600 to transform, so we can take advantage of potential new opportunities.” And in times like these, no matter the size of the company, seizing opportunity is music to our ears.