The Leadership Structure behind Winning Brands

Let’s qualify that headline right away, to avoid being accused of ‘click-baiting’: The leadership structure we researched was specifically that behind iconic, mission-driven brands that have seen sustained sales growth while being able to demand a premium price versus the category average.  We call the best of these brands ‘Ueber-Brands.’  Some Ueber-Brands have been around for many decades and become multi-billion dollar businesses.  Some have even survived the acquisition by a much larger group or outright been created by such a group and thrive (we talk more about how they do that here). 

What many of these brands have in common is that they have been founded by a visionary entrepreneur and they sooner or later run into one or two issues:   The first being how to grow beyond the founder’s leadership abilities.  A good example is TOMS, the now-famous one-for-one shoe* company founded by Blake Mycoskie. (* By now they also sell eyewear, coffee, bags, etc. as well) .  Mycoskie’s decision to sell a 50% stake to Bain Capital in 2014, was made to raise money to further boost the business, but also to boost the leadership capacity and capabilities.  As Mycoskie puts it in a Forbes interview: “I never wanted to step up to being CEO … I was forced to because someone had to do it, but it was never my skill set.”  Or, as Allie Tsavdarides, in charge of TOMS EMEA told us “Blake’s natural role is that of a founder and ‘Chief Shoe Giver'” which is the role Mycoskie went back to after a ‘professional CEO’ was brought on board in 2015.

The other issue is that – at some point – successors must be found that stay true to the founder’s vision, preserve the brand’s mission and myth or faithfully evolve them.  Not an easy task – just ask Tim Cook at Apple or Daniel Lamarre at Cirque Du Soleil, both hand-picked by the respective founders to take on the CEO role and ultimately replace them with their team 

The Artist and Operator

Apple – Steve Jobs – There are strong Renaissance men or women who can envision a brand and then take it to the highest level as well, who know how to dream but also deal with all the nitty-gritty details of reality in running a growing enterprise. Of Guy Laliberté, co-founder and longtime owner of Cirque Du Soleil his PR manager RC Menard told us: ‘(He) is a hands-on owner, artist and operator. You can almost see him split into the child-like observer role looking at a new show and then switch, judging it, evaluating its long-term potential etc.’.  We heard about a similar talent in Dietrich Mateschitz, founder of Red Bull, or Yvon Chouinard of Patagonia.  But these kind of all-around balanced-brained founder-leaders are far and few in between. And even in these cases one could argue that they don’t really do both – drive their companies creatively as well as commercially. Chouinard and Laliberté, for example have recruited strong financial- and organizational partners decades ago.

And that’s the point. It’s almost impossible to find a person equally entrepreneurially imaginative as he or she is managerially strong, someone who excels in both creative inspiration and cunning implementation. More often you’ll find a congenial duo, and ‘Artist’ and an ‘Operator’ – call them a ‘dream team’ – running the show together. One of the best-known examples of recent years is probably Tom Ford and Domenico De Sole, who took Gucci from a ’70s has-been to the fashion Ueber-Brand we all know today. In fact, their partnership has been so successful and strong that they are still working together, almost 20 years later, now in their latest venture Tom Ford International. Other and earlier famous pairings include Max Braun and Dieter Rams, who made Braun the ultimate reference for design in electronics, to this very day, with Apple’s Jonathan Ive explicitly and obviously taking a lot of inspiration from Rams. Yves Saint Laurent and Pierre Berger, have been celebrated partners in the fashion world, as have been Christopher Bailey and Angela Ahrendts, the Designer and CEO associated with turning around Burberry’s.  The couple split up in 2014, just like Steve Jobs and Steve Wozniak or Coco Chanel and Pierre Wertheimer did before them.  Which shows that these intense professional relationships are no less prone to the potential tensions and turmoil of private ones.  By and large, however, it’s easier to find and pair a couple of different strengths than to find one person able to both continuously inspire creatively and steer the ship commercially.

This is particularly true when the brand has reached a certain size or must deal with the additional complexities of becoming part of a larger organization. In those cases, a lot of Ueber-Brands that we looked at chose wisely to keep the original visionary on board, but buffering or coupling him or her with a complementary partner. One company that has managed to show how this works is L’Occitane, where investor Reinold Geiger made it a prerequisite that the brand’s founder and creative visionary Olivier Baussan re-join before he purchased the company. Now the two are leading together.  It’s the same with many Estée Lauder brands like Aveda, Bobby Brown or, more recently, Olio Lusso, where the founders were incentivized to stay on for a some time – Bobby Brown stayed on for over two decades – to, at least, smooth out the transition.

The Protective Mentor

Talking about Ueber-Brands growing within or becoming part of a larger company, they usually need a third person to protect and guide the couple, a kind of mentor. Example: Lindsay Owen-Jones, ex-CEO of L’Oréal. He successfully protected Kiehl’s from being swallowed or dissected by its new parent in search of savings or synergies. In the case of Nespresso it was then-CEO Peter Brabeck-Letmathe and SVP Camillo Pagano who held their hand over the experimental venture, which was for the longest time anything but a sure-fire success. The visionaries here were Eric Favre in the R&D department and Jean-Paul Gaillard the marketer (more on the Nespresso set-up and story here). Both were considered ‘nuts’ and outsiders by the majority of the mother organization and mostly survived because of the support of Brabeck-Letmathe and Pagano, who were frequently challenged by the rest of the organization as well as the board for sponsoring and holding on to such an incompatible but expensive innovation. Fortunately, though, they had the power and the conviction to withstand the pressures and gave the project the 10-plus years it needed to grow until it became successful.

In summary:  Like most brands, certainly Ueber-Brands need both unrelenting creative imagination as well as well-oiled and profitable operations and execution. And as great as it is to find both in one person, it is highly unlikely. That’s why most successful Ueber-Brands have opted to share responsibilities between a creative ‘god’ and a commercial ‘master’. In case of being part of a supra-organization they often also establish a high-powered ‘mentor’ to give those two sufficient room and leniency to grow. Because nothing can be more damaging and suffocating than an overly ‘loving’ and ‘embracing’ parent – in life as in work.

 FURTHER READING:

For a more holistic analysis of what drives the success of TOMS, the Cirque, Burberry’s and many other Ueber-Brands, read our book “Rethinking Prestige Branding – Secrets of the Ueber-Brands” and other articles and case studies on this blog.

To learn more about the concept of ‘Ring-Fencing’ certain aspects of a niche brand to successfully grow it within a larger organization, read this post.

Read in this Fortune interview by Jeremy Qittner how TOMS founder Blake Mykoskie experienced the difference between the ‘founder’ and then CEO roles. These eventually get parsed out into the parallel roles of ‘Artist’ and ‘Operator’ in most of the successful brands we reserached.

In this Fortune interview by Michal Lev Ram, Daniel Lamarre, CEO of Cirque Du Soleil talks about how to be a CEO of a company with a strong founder before and after the latter was actively involved in the business.

 

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About JP Kuehlwein

JP Kuehlwein is Co-Founder and Partner at ‘Ueber-Brands’ a New York consulting firm that helps elevate brands in the minds of people and above competition to warrant premium pricing and profits. He previously was Executive Vice President at Frédéric Fekkai & Co, a prestige salon operator and hair care brand and worked at multinational Procter & Gamble as Brand Director and Director of Strategy. JP is a recognized global business leader and brand builder with a 25+ year track record of translating consumer and brand insights into transformational propositions that win in market. His experience spans from developing a global communication strategy for the world’s leading detergent to introducing a new-to-the-world food wrap, disposable diapers as a category in India and a premium skin care brand in China to turning around a luxury lifestyle brand in the US. JP’s latest book is the bestselling “Rethinking Prestige Branding – Secrets of the Ueber-Brands” which he co-authored with Wolfgang Schaefer.
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