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    Online Exclusives

    Remain Relevant

    In a world full of distractions, L’Oréal CEO Jean-Paul Agon shares insights on how to stay top-of-mind with beauty consumers.

    Remain Relevant
    Jill Scalamandre, president, Bare Escentuals, and Global Makeup Center of Excellence, Shiseido, with Jean-Paul Agon, chairman and CEO of L’Oréal, at CEW Newsmaker Forum.
    Remain Relevant
    Carlotta Jacobson, president, CEW, Jean-Paul Agon, chairman and CEO, L’Oréal and Jill Scalamandre, president, Bare Escentuals and Global Makeup Center of Excellence, Shiseido at CEW Newsmaker Forum.
    Remain Relevant
    It was a full house at New York City’s Harmonie Club, site of Newsmaker Forum featuring Jean-Paul Agon.
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    Nancy Jeffries, Contributing Editor10.29.18
    His company is more than a century old and he’s been one its employee for his entire 40+ year career. And yet, cosmetic executives flocked to New York City last week to listen to words of advice from L’Oréal Chairman and CEO Jean-Paul Agon. Attendees at the Cosmetic Executive Women event weren’t disappointed. CEW President Carlotta Jacobson characterized Agon as one of the easiest executives CEW had ever worked with, and applauded his 40+ years of leadership at L’Oréal.
     
     
    In introducing the theme of the evening, which was Remaining Relevant in the Evolving World of Beauty, Jacobson shared a quote from Agon that captured his philosophy on how companies can stay nimble and adapt in today’s rapidly changing marketplace.
     
     
    “L’Oréal is a 100-year old company with the spirit of a start-up,” she said, noting Agon’s characteristic voice and his personal penchant for “the undertaking of a lifetime.”
     
     
    Agon has referred to L’Oréal as his “soulmate,” and along the way has implemented strategies that have transformed the brand and positioned it for future success. Jacobson highlighted some of his contributions to the company’s remarkable success, including diversity and sustainability initiatives. She thanked all the event sponsors, and cited the particular contributions of principal sponsors, Conde Nast and IFF, noting the long-standing relationship IFF and L’Oréal have enjoyed, resulting in the creation of such successes as Drakkar Noir and La Vie est Belle.

     
    Transparency and Innovation

     
    Nicolas Mirzayantz, group president, fragrances, IFF, provided an introduction highlighting the shared values of L’Oréal and IFF, including the championing of diversity, equal opportunity, and women in executive roles in the workplace. Agon, noted Mirzayantz, has made great strides in sustainability, improving the company’s social profile, and framing the company as one with a global purpose. He quoted Agon as saying, “My obsession is really to make the company ready for tomorrow.”

     
    He emphasized such initiatives as beauty for all, high standards of ethics, and concentrated efforts in digitalization, contributing to L’Oréal’s success, including its current ranking as number one in China. He noted his inspiring overall vision and focused attention, relating how in Agon’s 11 years as CEO, he doubled the group’s market value, spearheaded its makeover, and created research and marketing hubs in every strategic market.

     
    A 40-Year Love Affair

     
    The evening’s moderator, Jill Scalamandre, who is president of Bare Escentuals, and Global Makeup Center of Excellence, Shiseido, open the event by discussing that 40-year love affair.

     
    “As a nearly $30 billion company, with 83,000 people working for L’Oréal, the company is celebrating its 100+ year history; and, Jean-Paul Agon is only the fifth Chairman in the company’s history,” she said.

     
    Agon said he never thought he would stay for 40 years—he began in sales and then transitioned to marketing. He was appointed head of L’Oréal Greece at age 24; later, he led L’Oréal Germany, and eventually created the L’Oréal Asia Zone. Through these international experiences, Agon came to understand the beauty desires of consumers throughout the world; and in 2001 he was named president of L’Oréal USA.

     
    Agon said he found everything at L’Oréal exciting and that every time he was given a new responsibility it was like running his own business.
     

    “I’m not the owner of L’Oréal, but I’ve always felt it was my company. L’Oréal is an adventure. It’s a team adventure; and at the same time, it’s very human, and there is always a quest for excellence, to do better. The culture is very strong. It’s entrepreneurial. It has always been a strong culture,” he said.
     

    Affirming the value of maintaining an entrepreneurial spirit, he said, “We want to keep that entrepreneurial spirit. We want people to know they can take risks and do everything they can to achieve their goals. When you have a small brand, you take some risks, but as a big business, we have the same attitude.”

     
    Scalamandre noted that there are 34 international brands within L’Oréal, and Agon has steered many of them to their current success.

     
    “In some cases, we have taken some brands and we have multiplied their value by 100. I always thought it was smarter to buy brands that have proven they can survive for ten years. We can then buy them and scale them. When we acquire a brand, we try to understand how they can become big. Little brands that stay little, we are not really interested in,” he said.
     

    Agon explained the importance of realizing the potential of brands before acquisition.

     
    “When we bought Kiehl’s in 2000, it was a $20 million business. We had the conviction that we could make it a $1 billion brand, which we did; and now we want to make it a $2 billion brand,” he said.

        
    Beauty Industry Revolution
     

    In response to the question of whether the change in the past 40 years to the beauty business has been evolutionary or revolutionary, Agon didn’t skip a beat.
     

    “For me, it is a total revolution. Between 1970 and 2010, we were working more or less, the same way. Suddenly, in five years, everything changed. The digital revolution is really just beginning, but now, it’s a completely new world,” said Agon.
     

    He explained that while L’Oréal did see it coming in 2010, and declared it the digital year for L’Oréal, there was uncertainty around what it all would mean.
     

    “We were sure something was coming in 2010, but to be honest we didn’t know what it really meant. But, we kept this first mover advantage. It was very chaotic. We hired a digital leader to help lead this change, and hired 2,000 people to lead with digital and upscale the workforce,” he explained.
        
     
    “The way digital has informed our industry is fantastic. It was never a threat. We always thought that digital has to be at the heart of the company. We spread the 2,000 digital experts around the world. We now have a digital test, which we created like a GMAT, and every candidate must pass the test,” he said.
     

    When asked what he believed were the key changes at L’Oréal that have impacted the brands, he said, “Everything has been turned upside down, and for the better. Digital has put the consumer at the heart of everything we do. Each interaction and the personalization we can do is amazing. I find it fascinating and I find our job more interesting than it used to be 10 years ago.”

     
    He explained that he sees many changes, including e-commerce, but it is much broader and deeper than that.
     

    “We don’t see e-commerce as a threat. It’s another opportunity to share our brands. Anything that serves the consumer is great,” said Agon.
     

    Scalamandre queried his take on Amazon today, to which he replied, “It’s a fantastic invention. It serves some purposes and not others.”
     

    Technology and Sustainability as Enablers
     

    “Technology is the enabler of the digital revolution. If we want to be the champion in beauty technology, we must keep acquiring brands that will help us compete with our competitors across all our brands,” Agon explained. “We are very decentralized. We are strategically concentrated, but operationally decentralized,” he said, citing such brands as Lancôme and Skinceuticals.
     

    Agon explained that when every brand in every division has a different strategy, that is best. “We can test and use digital to amplify our strategy and use it differently for each brand,” he said. “Digital strategies are critical for each division, and within each there is a different strategy. For example, Lancôme and Kiehl’s are very different, and the players are also different. You have to have the appropriate strategy for each market,” he said.
        

    Agon responded to a question regarding the need for sustainability initiatives in business in terms of L’Oréal’s mandate for environmental sustainability.

     
    “We really wanted to embark on the sustainability venture because we thought it would be vital for the 21st century. Our impact on the environment is not as big as some other businesses, but we thought, let’s be exemplary, and that’s what we did. Our teams were really motivated. It’s a great commitment and we want 100% of our catalogue, that is 7 billion products, to be environmentally sustainable. Every brand participates. Our labs are centralized. Our factories are centralized by division, and every one has its own sustainability strategy,” said Agon.

     
    When Scalamandre asked how we all could work together in beauty to that end, Agon replied, “I believe more in competition and exemplarity. I believe we can lead and others will follow. It makes everyone better. We are all competitive. I’m the first to say I really like competition. More competition creates better innovation; the more the better.”
     

    Competition, Healthy Paranoia and the Future
     

    In response to how he viewed smaller brand successes, like Kylie Cosmetics, Agon replied, “Yes, of course, it’s very interesting; and digital makes it easier to start and rise quickly, but it also makes it easier to fall quickly. So, we will see who will remain,” he said.
     

    “People say that it is small brands that are leading the way, but it’s exactly the contrary. As long as brands are relevant and know how to play the digital game, they will win,” he said.
     
     
    Not being distracted by smaller brands is key, Agon explained. “Each brand needs to find its own recipe. We have healthy concern, or healthy paranoia, and are always looking at every small brand. At the same time, it should not distract you from what you have to do,” said Agon.
        
     
    When asked what brands he admired, Agon demurred, noting that Nike was a good example; however, “There are many players playing well,” he said. “We follow and analyze many brands. I think it is a great time for this industry, there’s never been a better time. I believe it is a fantastic and very exciting moment to be in this industry,” said Agon.
        
     
    His outlook for the future is unabashedly positive and his formula for the next f40 years includes an emphasis on reinvention.

     
    “We are obsessed with really making sure that we reinvent ourselves completely. We are always ready to challenge ourselves, do things better, and adapt to a changing world. We always challenge the status quo,” said Agon.

     
    Replying to a question about weaknesses, he was precise.

     
    “The flip side of obsession is complacence and we absolutely don’t tolerate that at L’Oréal. We’re always looking at how we should change. For example, to do, undo, in order to re-do. It’s like high-level sports. If you want to go to the Olympics, you have to train every day. It’s exhausting,” said Agon.
        

    His reply to whether he is ever satisfied, was a resounding, NO.
     

    “We are rarely satisfied because we always see that we could do better. It’s stimulating,” he said.

     
    In handling any possible regrets, Agon said, “I have a good nature, and I forget the difficulties.”


    On the question of the legacy he would leave for those who follow, Agon was philosophical. “I hope people will say I did my job of making sure that the company was fit for the future. As you said, there have been only five CEOs of L’Oréal and there have always been some moments of great change, for example, the fall of the Berlin Wall; the opening of China, and more; but the transformation has always occurred. I would want my legacy to show that I did the best to transform the company for the future. If you are the most diverse, ethical, and sustainable, I think you’re pretty fit for the future.”
     
     
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