Behind every great luxury brand is great leadership. But what makes a leader effective? Balance, as Scott Stephenson points out, is certainly key. The CEO of Verisk Analytics believes that exceptional leaders are those who take a dual approach, giving vision and direction from afar while also leading by example and providing mentorship up close. He also notes their ability to anticipate short- and long-term consequences, with “one foot firmly planted in today and one foot firmly planted well into the future.”
Jim Collins also highlights the significance of balance in his renowned management book Good to Great. He describes the concept of Level 5 leadership as a “powerful mixture of personal humility and indomitable will.” Humble and modest, effective leaders have great ambitions for their organizations — not themselves.
Luxury values as guiding principles
Furthermore, in the luxury industry, it’s particularly important that leaders live by the values that make luxury so distinctive. Creativity, craftsmanship, authenticity, timelessness, heritage, human value — these are the characteristics that give a luxury brand value. It’s no coincidence that many luxury brands have traditionally been led by families, who are often seen as the face of their brand’s history, character and identity. Think of successful luxury brands like Hermès, Patek Philippe, Ferragamo and Ermenegildo Zegna, to name just a few.
The values that make a luxury brand distinctive are unique, and luxury leaders have a role to play in integrating and respecting those values. Not doing so comes at a cost — just look at Ford’s takeover of Jaguar. Ford applied its production standards, mass-market thinking and approach to the marketing of a niche marque. They didn’t understand or respect the intrinsic value of luxury, resulting in Jaguar losing its luster and its value. Ford eventually sold the marque to Tata in 2008 at a loss.
What luxury leaders can learn from family values
In my view, family values lay the foundation of good leadership in luxury. And, future leaders in luxury can learn lessons from family firms by understanding what has made them successful. Firstly, families take a long-term perspective — luxury takes time — and consider the long-term interests of the company and the brand, which often bears their name. They focus on longevity and continuity, creating quality, timeless products that can be used for many years or even passed down to future generations.
Secondly, family ownership enables the brand to preserve its symbolic value, which is the basis of differentiation in luxury. Families are in a unique position to build on the brand’s identity. They reflect the brand’s history and heritage, which is their own history and heritage. They respect provenance, often linked with a territory: the place and roots that are essential to the origins of the brand. In many ways, they are the brand.
Thirdly, good family leaders feel a strong sense of responsibility towards the brand and all the people who make up the brand’s “extended family.” They have a vested interest that goes beyond just making money. They create or maintain a business for the long term, making decisions not at the whim of shareholders and profit margins, but doing what is best for the brand in the long term. This is their livelihood and that of future generations as well. It’s also about maintaining a community and the livelihood of the local artisans and workers. Protecting the human value, the skills and craftsmanship: the heritage, authenticity and origins, without which luxury is nothing.
Respect for creativity
Luxury is a creative industry, so leaders also need the ability to manage creativity while growing the business. Nurturing creativity, appreciating it and respecting it is vital to the success of a luxury brand. In 2001, LVMH CEO Bernaud Arnault said, “If you think and act like a typical manager around creative people — with rules, policies, data on customer preferences and so forth — you will quickly kill their talent. Our whole business is based on giving our artists and designers complete freedom to invent without limits[1].”
Unsurprisingly, some of the best leadership in the industry has been based on the “infamous duo,” a strong partnership between the business leader (CEO, Managing Director) and the creative director, whether it be Yves Saint-Laurent and Pierre Bergé, Giorgio Armani and Sergio Galeotti or Tom Ford and Domenico de Sole. It’s the right and the left brain needed for a successful luxury business: one looking at the business perspective and needs, and the other ensuring the creativity and innovation that bring value to a luxury brand.
The human touch
Finally, great luxury leaders understand the importance of great service. After all, luxury relies on craftsmanship, the artisans who bring the creative vision to life. This is a people’s business, as is hospitality. The CEO of a luxury retailer once said to me, “It’s about being on the shop floor. I spend a large percentage of my time there. Knowing my clients. Being with the sales people. Seeing the team operate.” The same is true in luxury hospitality, where face-to-face interaction can make the difference between a personal or impersonal guest experience.
Why is the travel agent, declared some years back to be an outdated and soon to be extinct concept, still very much alive today? Because people now want personal assistance and human contact to tailor the unique holiday for them. It’s the personal touch: the knowledge and expertise, and someone who cares.
At Glion, we instill the values of service and professionalism into students from day one. Our Luxury Brand Management specialization brings together the key criteria of luxury and hospitality, which includes service excellence, emotional engagement and creating experiences while being true to the brand and who you are. We elevate the importance of service, human value, and personal engagement — elements which are at the heart of hospitality and luxury, and essential to managers and leaders in the industry today.
About the author: Dr Suzanne Godfrey is Head of Luxury Marketing and Brand Management in Hospitality at Glion Institute of Higher Education.
Interesting in learning more about the art of luxury leadership? Industry experts discussed this topic and more at the Glion Luxury Conference in Geneva on 20 September 2018. Follow the conversation with #GlionLuxury.
[1] Wetlaufer, S. (2001). The Perfect Paradox of Star Brands: An interview with Bernard Arnault of LVMH. Harvard Business Review. No. 9349
