As Fabrizio Freda readies to ascend to the chief executive post, the Estée Lauder Cos. Inc. is rejiggering its leadership ranks in a move to gather key decision makers around one table to draft the future direction of the 63-year-old beauty giant.
Freda’s new leadership structure and the other new appointments will become effective July 1.
Replacing Lauder’s current structure of an executive committee comprised of group presidents and a regional head will be the Executive Leadership Team of 27 senior executives from all the brands, regions and functions. “The idea behind the structure is to create a more integrated organization,” said Freda, who joined the company as president and chief operating officer in November 2007. “Together we will work in a more multifunctional way. Before, the company had little integration among the brands, affiliates of the brands and the regions.”
The incoming ceo and president also has established a subcommittee called Project Management Team, charged with implementing the strategies born out of the ELT. On this team, about a dozen members of the ELT will spearhead the firm’s roughly 10 key restructuring and cost-saving projects, a number of which have grown out of the previously revealed multiyear restructuring plan.
Freda will lead both the ELT and PMT, with William Lauder heading the newly established Investment Development Committee, in his upcoming role as executive chairman. This small group of about five senior executives will consider and decide on proposals for new business ideas and potential acquisitions, said Lauder, the company’s chief executive officer.
Referring to what will be his new post, Lauder said, “Fabrizio and I found a way to balance and take advantage of our strengths. This [position] allows me to focus on the things I enjoy the most.” He added the pair plans to work together without “duplicating efforts.” To foster that leadership style, Lauder noted their offices are about “10 steps from one another.”
“We are all pulling in the same direction, almost like a crew team on the water,” said Lauder.
To leverage the company’s scale, the upcoming leadership structure will organize brands into four categories, determined according to channel and consumer segmentation. The team will include John Demsey, group president of the Estée Lauder, MAC Cosmetics, Tom Ford and Prescriptives brands, who will add the Specialty Group of Bobbi Brown, La Mer and Jo Malone to his portfolio. Reporting to Demsey and taking on a new role will be: Jane Hertzmark Hudis, president of BeautyBank, Origins and Ojon, and will become global brand president of the Estée Lauder brand; Maureen Case, who will continue as the global brand president of the Specialty Group and oversee the Bobbi Brown, La Mer and Jo Malone brands, and Caroline Geerlings, who will continue in her role as senior vice president/general manager, Prescriptives.
Lynne Greene, global president of Clinique, will become the global brand president of the Clinique, Origins and Ojon brands. Reporting to Greene will be Jane Lauder, the senior vice president/general manager of Origins.
Veronique Gabai-Pinsky, who now oversees Aramis and Designer Fragrances, will become the global brand president, Aramis Designer Fragrances, BeautyBank and IdeaBank, Lauder’s entrepreneurial think tank. Dominique Conseil, president of Aveda, will become the global brand president of Aveda, salon and pharmacy channels. Peter Lichtenthal will continue in his role as president of Bumble and bumble, along with the Darphin brand, and will report to Conseil.
In keeping with Freda’s pledge to leverage the strengths across the markets internationally, the new structure is designed to build upon the company’s regional scale. “The creation of the regions and strong organizations have the intent of increasing local relevance at reduced costs,” Freda said, emphasizing the importance of the regional arm of the leadership structure. That said, Thia Breen, global president of the Estée Lauder brand, will become president of North America, a newly created position. Cedric Prouvé, group president of International, will continue to have the following direct reports: Fabrice Weber, president Asia Pacific Region; Ivan Fernandez, president Europe, Middle East and Africa; Olivier Bottrie, president Travel Retailing Worldwide; Per Neuman, general manager Estée Lauder UK, and the newly created region of Latin America led by Daniel Rachmanis, who will become senior vice president Latin America and Business Development. Both Breen and Prouvé will report directly to Freda.
On the functions side, reporting to the ceo will be Harvey Gedeon, executive vice president, research and development and product innovation; Gregory Polcer, executive vice president, global supply chain, and Dennis McEniry, president of ELC Online.
Amy DiGeso, executive vice president-global human resources, and Richard Kunes, executive vice president and chief financial officer, will have dual reporting to both Lauder and Freda.
Sara Moss, executive vice president and general counsel, Alexandra Trower, executive vice president-global communications and Deborah Krulewitch, senior vice president corporate administration, will continue to Lauder.
A number of executives who will lead PMT projects include, but are not limited to, Kunes, Breen, Prouvé, Demsey, DiGeso and Polcer, said Freda.
Save for Polcer, the newly determined leadership team reorganizes a cast of long-standing Lauder employees. Referring to his decision to promote from within, Freda said, “We have some great talent with a lot of expertise and continuity. The new structure is designed to better leverage that internal talent.”
Freda will join the board and will report to Lauder.
The collaborative structure, Freda said, reflects his management style. “I am very comfortable working in a team environment,” he said, adding that part of leading a team is making sure all the voices are heard. The second part, he asserted, is making the final decision on how to move forward and then moving the team toward that goal with “excellence.”