PARIS — As the business becomes more numbers-driven and bureaucratic, how do cosmetics companies hone the entrepreneurial edge that provides the mercurial magic?

Giving young professionals a chance to win big or fail miserably is a key ingredient of the cosmetics business in the mind of Lindsay Owen-Jones. “The industry faces many challenges,” he asserted. “The regulators would like to make it more and more difficult to innovate. There are people around the world obsessed with product safety, whereas in fact the industry’s record is remarkably good; it’s fantastic. Everything is regulated, but still, when push comes to shove, this industry is about risk-taking, creativity, speed, sensitivity, imagination.

“So the challenge is to encourage your own organizations to take those risks while somehow making sure that they stay within reasonable trend lines as to overall brand strategies because they cannot zigzag around too much because you need continuity.”

The difficult balance lies in handing over responsibility to younger and very creative people who are not necessarily very business-disciplined and yet keeping just enough control to make sure that it works financially, he said, adding, “That’s the magic and what makes this a difficult and exciting industry, and why the profile is so difficult to find.”

So how does a company keep that edge?

“You’ve got, right from the beginning, to go out and recruit the right people. And they’re not just all business school graduates. We have a name for them now, we call them poete et paysans. It means ‘half poet, half peasant.’ On the one hand, it’s all about guessing how people will react to the person looking this way rather than that way, up rather than down; what they will interpret from colors, flavors, odors, shapes. It’s closer to the interpretation of dreams than it is with the classic industry. And yet at the same time, this is a huge business with big numbers. And so the people have to be able to count. Also, they’ve got to be able to lead groups of people or learn how to do so.”

Recruitment is just the beginning, Owen-Jones added. Companies have to create a work environment where employees want to be. “The secret is that you try to split the fleet up into as many small pieces as you possibly can, rather than a few huge aircraft carriers — a fleet of thousands of little destroyers,” he said, noting that he always was inspired by a photograph of John F. Kennedy during World War II aboard the PT boat he commanded.

This story first appeared in the May 5, 2006 issue of WWD. Subscribe Today.

“He’s not number 1,022 on the deck of a huge aircraft carrier,” Owen-Jones said. “He’s the captain of a tiny torpedo boat. He’s already running something very small, but he’s running it.

“One of the secrets of the way we’ve done it is to try and constantly divide it up into small enough pieces for people very young to run, to try and give meaning in terms of empowerment to even junior jobs,” he continued.

“Thirdly, if you want people to take risks, you’ve got to create a culture in which errors are allowed. The right to be wrong is a very fundamental part of the L’Oréal constitution, and which I’ve made into a very personal thing between me and a lot of our managers,” he declared. “If everybody in this company who had screwed up a major campaign, product or launch had got fired, there would be nobody left of any value in the company — including myself.”

Owen-Jones added that most corporate cultures are based on accountability, responsibility and fire-ability, “but fire-ability doesn’t work in the cosmetics industry. You get good by making mistakes and then moving on. So there’s no magic formula. It’s profiles of people; how you organize them, but ultimately how you relate to them directly and humanly; how credible you are at forgiving people; moving the company forward and not doing witch hunts.”