Maureen Chiquet – Leadership Through Hard Conversations - [Invest Like the Best, EP.113]

I know firsthand how complex the tech stack is for asset managers, and seemingly every new tool and data source makes the problem even worse, adding more complexity, more headcount, and more risk. Ridgeline offers a better way forward, one unified platform that automates away all that complexity across portfolio accounting, reconciliation, reporting, trading, compliance, and more, all at scale. Ridgeline is revolutionizing investment management, helping ambitious firms scale faster, operate smarter, and stay ahead of the curve. See what Ridgeline can unlock for your firm. Schedule a demo at ridgelineapps.com. Hello and welcome, everyone. I'm Patrick O'Shaughnessy, and this is Invest Like the Best. This show is an open-ended exploration of markets, ideas, methods, stories, and of strategies that will help you better invest both your time and your money. You can learn more and stay up to date at investorfieldguide.com. Patrick O'Shaughnessy is the CEO of O'Shaughnessy Asset Management. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of O'Shaughnessy Asset Management. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of O'Shaughnessy Asset Management may maintain positions in the securities discussed in this podcast. My guest this week is Maureen Shakay, the former longtime CEO of Chanel. Maureen also spent much of her career at The Gap, growing Old Navy from scratch and serving as the president of Banana Republic. The topic of discussion is her experience running large businesses and of finding one's way in a career and as a leader of others. I hope you enjoy this conversation and that it encourages you to, among other things, travel somewhere new and interesting in the coming year. one of the most pervasive themes in the book, which is this ability to put yourself in other people's shoes. Maybe talk about that idea and how you came to that idea and why it's so important. Yeah, this is a really early lesson I had, but then it seemed to keep reinforcing itself throughout my career. So when I was at L'Oreal, the first thing they do at L'Oreal is you go on the road, they call it, and you become a sales rep basically with a little suitcase. Yeah, it was amazing. Now here I am, I'm an American, by the way, and I'm 22 years old.

And I'm sent to not any part of France. I'm thinking I'm going to go to the Côte d'Azur. I am sent to the north of France, the Chti, which is coal mining country. And I get a hypermarket as my account. Fabulous. I'm like, okay, I can do this. It's the mammoth. The mammoth really is the name of it. So, you know, I go in and I am, by the way, I... have studied the marketing material because I'm a good student. And we were launching StudioLine Hair Mousse. And I have studied this and I know what it does for your hair. And I know how you should apply it. All the facts. I am so good. I'm going to sell this to the same guy who sells frozen peas, who buys frozen peas and sanitary napkins. I'm like, I've got this one. And I walk in, I say hello to this guy. And I'm like... Getting out my marketing brochure and about to tell him how the moose, of course, he's got like shiny hair, brill cream hair, how the moose is going to give him further expansion and more volume to your hair. He's like, no, no, no. He's looking at me like, just cut to the chase. And I soon realized like we were not speaking the same language. He wanted to know what kind of discount he would get. And I wanted to tell him my beautiful marketing product. So I realized I had to actually speak his language. I mean, I actually had to put myself in his shoes. And that was the early lesson that helped me, I think, throughout my career. And realize that we look at it one way, but we actually have to look at it in the ways that our customers look at it, our colleagues, our different people who work for us. There's a guy I had on the podcast who started a company called Sir Kensington's, which is like a new ketchup company. Yeah, the mustard or ketchup. Ketchup, yeah. And he told a similar story where he would go into restaurants and they would try to sell chefs basically on using Sir Kensington's instead of Heinz. And he'd tell them all the nutritional facts and the sourcing facts and all this stuff. And it just wasn't working. Right over the head. And he realized that it was far more effective to sit and have a beer with them and understand their context and build a relationship that way. And basically let them.

give him the door through which he could walk versus trying to ram facts down someone's throat. That's exactly right. And know that I learned it even in a weird way when I was speaking French. The first time I went to France, you learn French out of a book. You have the grammar structure. You might know the words, but boy, go to a country and try to start speaking it every day. Things fall apart quickly and you quickly understand you can't translate. So I can't look at this thing sitting here called a table and say, table, what is table in French? It has to start to come from a different place. And in fact, you have to enter into the French language, the context of their language and their expression. And in fact, that became so important when I got to Chanel and I amused French is that I never spoke English to my French teams because I felt that if I spoke their language. which I did, and even if at times it was more awkward or more difficult for me to find the exact right expression, that we would have a different kind of conversation. that they would feel that I was on their side. And that ends up counting for a lot as a leader, for sure. Do you have any single, other than that one you mentioned, most memorable sale from the early days walking around with a suitcase? No, but I do remember that I got the whole tete de go null, which is the end cap, and I was like so psyched. But no, I actually think I ended up doing better than I thought, even though I really, I'm shy, so going out. especially in France, in French, in the north of France and all the conditions. But I think I kind of like adversity sometimes because it's a challenge. So it's like... I can do this. One of the things that obviously you wrote a lot about too is just the creative process. And there's a couple of juxtapositions in the book. So one being like creativity versus logic in decision-making, even like education, the humanities versus like the STEM type stuff. I would love to hear your thoughts on the interplay between, again, the kind of cold hard facts and the more emotional side of things. You know, it's interesting. I mean, granted, I was in an emotionally driven business, you can say, because particularly by the time I got to Chanel, nobody needs a $6,000 tweed jacket.

But that said, I think we discount the fact that we're emotional human beings in most decisions that we make, even ones we think. Almost all. Almost all. We think we're practical. We rationalize afterwards. Yeah. I mean, those are emotional decisions. And so what I learned, and it was really when I was a merchant that I learned this first. is that you can have all the numbers. You can study what's sold in the past. I'm sure you can look at algorithms to figure out, now even more than when I was a merchant, to figure out predictively what might sell in the future. But at the end of the day, a customer goes into a store and looks at a product and goes, I want this or looks at an ad and goes, I can connect to this. This feels like something important to me. And by the way, I think emotion is becoming more important, not less. And as much as when I look at my kids who are both quote unquote millennials, they don't buy products from companies that they don't believe in. They don't buy brands unless the company is environmentally. sound, their social justice systems are right. They really don't look at brands. So for me, emotion is equally, if not sometimes more important in the way that we have to think as business people, because we have to reflect where our customers are at the end of the day. If you had to break down the most important emotions, whether that's ones you need to manage or appeal to in customers, how would you think about that? I always think that empathy is one of the most important things that you can have as a, both as a leader, but as a business person is ultimately. If you're thinking about putting yourself in a customer's shoes, that requires letting go of your perspective for a second and sitting in theirs. So for me, that kind of sort of empathetic way of being ends up scoring high. And I've seen it. That, and I'd say the second thing I want to add is curiosity. And that's not really an emotion, maybe. That's kind of a way of being. But I've noticed that the best merchants are curious. Because they're not looking at something at face value. And then there becomes, of course, agility and the being able to sort of change and move with the really rapid changing environment that we're in. One of the things that I've found interesting reading about this stuff is...

The notion of somebody's identity, like appealing to points of their identity. And I can't remember the person's name in the book, but there was a section there about how models in an advertisement should be seen as aspirational tools. They allow people to project their own desires sort of onto this. Can you talk about that idea? Yeah, it was when I was at L'Oreal, I... The part of the business that I love talking about creativity was a part of creating images. I loved it, I think, more than all the marketing studies and things like that and charts and graphs that we were doing. I was just drawn to this idea of creating an image that could draw someone to your product. And I remember these... endless marketing meetings where you'd have the agency on one side of the table and you'd have the customer, which was L'Oreal on the other side of the table. L'Oreal with their marketing briefs and checking off the boxes of does the hair look this way? Are the eyes right? And at the end of the day, really what you're looking at is a picture of something that either you say, I identify with that or I want to look like that. or I don't. And so with these models, I got very close to the art director who explained to me because I thought, well, wait a minute, aren't you using women in a way that's sort of, you know, I had this sort of instinct about it feels kind of weird. You're using women for their beauty. He said, no, no, this is an aspirational thing. You know, you want to buy the products because they're so beautiful and there's something that they give to the camera. That's not just plastic physical beauty. It's an aura of beauty that helps a customer. draws a customer, I should say, to your product. So to me, it was really a fascinating shift of frame to say, no, no, it's not using someone. It's actually aspiring. It's inspiring someone so that they aspire to your product. I would love to hear the contrast between kind of thinking about these ideas at somewhere like Old Navy versus Chanel. So I read an amazing book, which I did not expect to like, but someone recommended called Luxury Strategy. And it talked about the... basically the difference between marketing and luxury and everywhere else. And if I had to summarize the book, it's like do the opposite of marketing. Completely. I'll never forget one of the funniest meetings we had. We had a new employee when we were at Chanel. And this person was from sort of like me, from a more mass market environment. And so we had to raise prices of our classic handbag because we actually hadn't raised prices in years. So it was time to kind of inch them up.

You know, he was quite afraid that if you raise prices, you sell less units. The opposite, yeah. Absolutely the opposite. And I'll never forget him like looking at it sort of wide-eyed and meaning like, you've got to be kidding. We sold more units, not less. So it really, less is more. I had to unlearn absolutely everything when I got to Chanel. Coming from Old Navy, it was all about exploit what you've got. Don't sell 10,000, sell a million flag cheese. Like more is better. At Chanel, the more you sell, the less exclusive you were. Handbags is a perfect example. You don't want to see Chanel handbags coming and going on a street. Otherwise, that means ultimately your brand will be less valuable. And what luxury companies, this may have been in your book, but what luxury companies really do is they care quite a bit about the image of their brand. So they're preserving that brand image in many ways. The trick is it's not just preservation. You also have to push it forward. So you have to figure out what that delicate balance is between kind of holding it into a very prestigious. or historical place and making it modern and appealing to a broader range of customers. Maybe say a little bit more about that last piece. In your book and also in the luxury strategy book, there's this notion of tradition being one end of the spectrum that's really important, non-changing aspects of the brand. But this need to evolve because the best marketing, it catches your eye because it's different and new and unique. So how did you strike that balance at somewhere like Chanel? It's almost a constant conversation when you're in that kind of company because you're constant. Like, for example, at Chanel, you've got Gabrielle Chanel, this woman, an iconoclast. I mean, she really changed the way women dress forever, took us out. of high necklines and corsets and long gowns and put us in jerseys and fluid products that allow us to move freely. That was her idea. So in a way she was very contemporary. And, you know, at one point that company, and it still does, but we wanted to tell her story. But you know that you can't tell it just as a history. Right. It's kind of cold. It's cold and it's boring. And also everybody, not everybody's heard of it, but a lot of people have. So we did this thing called Inside Chanel, which was kind of a cool retro take on her story. But once we finished, it was in chapters and it was really cool online.

But once we finished that, the idea was, okay, what can we do now that's really current to our consumers? So then we switched to something called Outside Chanel, which was basically looking at women who embody her spirit. and her character and these were people who were famous some women who are famous who are less famous who are artists who are dancers who are business people so it was a pretty cool way to say like how do you look at history you can't forget your history and you have to keep anchored in it but you also want to move that history forward and give people reason to believe today that your products are still as great as they are yeah one of the ideas from that book that is just so it really sticks with me is you almost want to make it as hard as possible to buy the product. Like make people go to weird places or go through weird processes. No, you know, it was fascinating when we were, when China was growing really fast, a lot of our... competitors decided that they were going to grow really, really quickly in China. And granted, Chanel had the advantage of being a privately held company, which means that whatever you read in the luxury book that you read is exaggerated because you actually don't, you really don't have to do anything. Your shareholders are a small group of people, right? As long as they want to do it, you're in good shape. So everybody was expanding, opening four, five, six stores a year in China, which for luxury is a lot, by the way. And we didn't. And my philosophy on it was, You've got to make it feel really special. Number one, you've got to make it feel really special and rare. But mostly you've also got to have the kind of service that you need in any country. And it's got to match, at least, the service that you might have in Paris or in New York. And that's not an easy thing to do when you're going in and you're working with a new culture. So I think rarity becomes a really key issue in any luxury brand is how do you maintain rarity? Also, how do you balance that with growth that is needed, not just in publicly held companies, but also in privately held companies? If you were to generically offer advice to a firm, a business, let's say, that is trying to build an effective brand, how would you frame that advice? What are the dimensions of that that you think people should think about? Everything's changed so much. I think the most important thing is, what is your purpose? Why are you here? Why are you doing what you're doing? And for me, that seems to be...

equally, if not more important than any other aspect of a brand that you can have. So I think about purpose brands as being, you know, I don't, Nike is a great example of a purpose brand. They're here to make everyone athletes in their mind. Everyone's an athlete and that's core to their being. So everything they do exudes that purpose. And the everyone isn't a random word either. It's really about, it doesn't matter who you are, your gender, your race, you too are an athlete. For me, Chanel was also to give women confidence. There was something about being able to really give women confidence. Once you have that, to me, you can hang so much else off of that. But if you're missing a purpose, and lots of brands are, I think the chances of success today where there are literally also hundreds of thousands of more brands than there were maybe, you know. 20, 30 years ago before the internet boom, I think is really important. We talked at dinner about this book I just finished about the founders of Banana Republic, where it was just like incredible. First of all, I didn't know. I don't know anything about any of this stuff. So I didn't realize that Banana Republic was this wildly different thing at its inception than one it is today with this like crazy safari, you know, secondhand stuff and Jeep Wranglers in the store. And I didn't know any of this. And I just thought it was so neat how organic the process was through which the husband and wife built this business. And you could see that purpose sort of develop naturally. So it wasn't something that was like decided in a conference room and dropped in. It seems like the organic nature is really important. I think that's a great point. Because a lot of times, I think we're seeing a lot right now. these great businesses being built by HBS graduates who have an idea. And sometimes they're great ideas and they really are purposeful. And other times it feels a little bit like- Mercenary-like. Yeah, yeah. And we've studied this, we've studied that. We've looked at it from 10 different angles. We think this is it. No, I think, for example, Chanel, when she started her business in the end of the 1800s, early 1900s, she wanted women to be free to move. That was really what she wanted. She wanted to be free to move. It came from such a pure instinct of just like, I hate wearing a-

freaking corset, you know? And I think women should be able to move too. To me, that's purpose. And if you can continue to capture, that gets back to our conversation a little bit on history versus modernity. To me, that's a modern idea. That's still a modern idea. You can take that idea and continue to. and contemporize it. And it is a purpose. We can kind of shrink that concept down from the company to the individual. And I'd love to hear maybe just as an example, like how you think about your own purpose through the years. And maybe that's something that's changed and evolves a lot. And I'd love to hear about that. But there was also a section in the book about, I think the way you phrased it was, for people to find their own trademark within a business, whether it's as an employee or starting a business. So I'd love to talk about what you've learned across your career there, sort of personal purpose and how that can be harnessed for good. Yeah, that's a great question. It's so interesting. I don't know that when I was 22 and graduating college, I had any clue of a purpose other than I want to live in France. But that's actually something because in that was a deep, deep love for beauty. I wouldn't have been able to call it that when I was 22 years old. You know, the first time we went to the south of France and I saw the way the sun set on these gorgeous limestone buildings and the sound of the cicadas and the smell of the lavender, I was hooked on something that felt really important to me. And I kept that within me and I kept that throughout my career, realizing that as it evolved, it was actually really about beauty in general, not just of things, not just of places, but beauty and people. And so I think that's kind of kept me going from job to job. It's certainly my story about going to the gap the first time. What did I see? I saw something that touched my heart because it was beautiful. When I went to Chanel, it was a very similar thing. There was something about the beauty that they were creating for women and also giving to women to a certain degree was something that touched me. So I've actually seen my purpose evolve a little bit, but really remain similar no matter what articulation it is. So right now,

For example, I'm trying to write a TV show. I'm fascinated by TV. It's become a bit of an obsession. It's so good right now. The stories that are being told are amazing. And I was a literature major, and the other thing that I've always loved other than France was stories. I think stories have the power to change the world in many ways. But I'm finding that what I'm writing about still is how do you begin to find beauty in yourself? How do you begin to find beauty in other people? So I'm still finding that that theme resonates throughout my life, just a different way of going about it or articulation of it. I want to come back to the TV series because I'm really interested in the whole process behind that. But before I lose the thread, just any thoughts on how people should think about one's own purpose? relates to like their job i guess like like how that can be harnessed i guess you know it's so it's funny i talked to a lot of students go to universities and do chats or the other actually this week i did a talk at black rock for the women in black rock in their lat m division so a lot of young women were there and there's always this question like how do you figure this out how do you find this and I always say to connect that to a job, there are three things that I always consider. I'm in this question, by the way. There are three questions, I should say. I'm in these questions all the time. The first is, what do you really care about? When you eliminate getting that promotion or making more money or having that great new house, underneath all that, what do you really care about? What makes your heart beat fast? What could you not live without? To me... That's the first thing you want to identify. The second thing is, what are you good at? I mean, what are you naturally gifted at? And everybody has something. And usually those two things are kind of connected. Feels good to be good. Exactly. And I'm pretty good at seeing things. I have a discerning eye, I think. Anyway, I hope. So it's natural that this love of beauty and a discerning eye kind of go together. And then the third thing is your circumstances. Sort of where are you in life? I mean, sometimes we have to take jobs that we don't want to take. Sometimes we have to do things because we can't relocate.

And I feel like that's equally important in all those things way on how you can kind of fashion your purpose. But what I say to people in those cases is within the job that you're doing, what can you find that really gets you excited? And how can you begin to tilt in that direction? So like I think about L'Oreal. I had a classic marketing job. I was a product manager. But what I so loved was the creative side of the job. I so loved being with the art director, going on photo shoots. And literally. Almost in a physical way, if we were at one of those tables, I would move closer to the creative folks. So I think there's almost a way of intending and putting yourself out towards that place that you really love, even if the job itself isn't quite that yet. So I want to come back to the writing aspect now. So how did you start to triangulate? This is a creative process question, really. How did you start to triangulate on like the style that you would have or what you wanted to write about? I'd be curious, like what kind of shows you think are excellent? Any of those ideas about how you even begin this process? So I think it started with, I saw this show called Transparent. I don't, have you seen that one? Yeah, it's the Amazon one, right? Yeah, it's Amazon Prime. I haven't seen it, but I'm aware of it. It's exceptional. A person named Jill Soloway did it and it's about their father. And their father became... well, I guess became a woman when they were like, when he was 70. So she now is a woman. And so really that's the idea of the show, but the way that it's shot, not only, so the subject matter is kind of one of those subjects you don't really expect a trans. woman at the age of 70 coming out. It's actually a true story somewhat, but it's a show that you don't expect. So it's an unexpected topic. But more than that, the way that it was shot was completely different than any other TV show I'd ever seen. It was almost, it felt very organic and it felt like you were entering into somebody's family and sort of dealing with all their family dynamics around identity, really around, you know, who am I? What is my gender or not? So it was, it was a really fascinating show for me. And I thought, God, I, that.

that something appeals to me about this kind of story where people are actually questioning their identity. You know, obviously my book is called Beyond the Label. So, you know, it's still kind of a thing that intrigues me. So I went from there and I started watching shows like Billions and Handmaid's Tale. And what are we watching now? We're watching Succession. Just the richness of storytelling. And oh, Orange is the New Black. I mean, it was like, I got to do something here. I've always loved film. I studied film when I was young. I've always loved stories. I have a lot of stories to tell because I have a sort of rich past, I think, with 13 years at one of the highest level luxury companies in the world. And while my story won't be in the way of transparent, it will probably touch on some things that happened in my life, but it will be fictional. It just felt like the right thing to do. I have no idea how to do this. I've signed up for a school in New York. I took lessons. I actually, through a really great number of sort of luck and really through this school, met somebody who I could co-write with. And that's really been it. But it's just kind of like almost like this weird pull that I get. It was like that Miles Davis poster. On the street, you see something. You go, wow, that... that feels really vibrant to me. Not to mention the fact that I ended up going where energy is. And I don't know, when I started, think about this, when I started at Gap, it was right before the huge growth that we had. So it was in 19, I was there in 1989, from 1989 to 2003. So 89 was right before the Gap got great. I went to Old Navy. Gap started to kind of go down, but I went to Old Navy and then we built that land. Rocket ship, yeah. Rocket ship. I go into luxury when it was 2003, right before the huge luxury boom. So I kind of feel like there's, for me, there's energy there too. You're like following, not unlike Boyd Varty and his tracking, you're following something that feels energetic to you because you connect to it. I love that. Since you mentioned Gap, it just makes me think about it. Maybe say a word or two about Mickey Drexler, a character that I'm sure people would love to hear about, sort of an iconic CEO in his time.

I'd love to hear your impression and maybe what you've learned from him above all else. I'm always fascinated by mentorship and kind of passing down lessons from one level to the next. Yeah, Mickey is incredible. He's an incredibly dynamic person to work with and for. But my favorite, one of my favorite Mickey stories is when I was a young merchant, turns out we were going to do a marketing campaign for denim and I was in charge of denim. Now, denim was not my favorite job only because there's... There were a lot more logistics than in other merchandising jobs. But my boss was on maternity leave and he was going to determine what jeans would be shot in the next campaign. And the head of advertising was in this meeting and they called me and I was seven months pregnant. And I am like running. By the way, Mickey, when Mickey calls, you go right away. There's like, there's no time to spare. So I'm waddling down with my... Huge belly down the hall of the gap. I've got my jeans on a rack. I've thrown them together. And I had decided that we were going to really go after this stovepipe jean. It was a brand new denim. I was really, I was pumped about it. And I was a young merchant. And I, you know, I don't think I was arrogant, but I think I thought I knew what I was doing. So he said, show us your jeans. I show him that jean. I said, this is going to be our number one jean. It's in this fancy new Japanese fabric. And he feels the fabric. He's all right. He's like, yeah, but. I don't get it. The fabric's fabulous. Why aren't you doing that? Your classic fit jean. This is the jean that we were selling the most of. I was like, oh, because the classic fit doesn't, it's like not cool. Like, you know, it doesn't fit well. It's high in the waist. And it looks like jeans that people are wearing right now, by the way, but high in the waist and pegged at the leg. And everyone's wearing wide leg jeans. He's like, how many of the classic fit are you selling? And I had to go look at my trend and 20,000. How many of, and he said, did you have a jean like this one, this new one that you want me to do? And I said,

yeah, it's the wide leg, but we're out of stock. And he said, yeah, but how many selling of it? It's like 3000. He goes, anyway, he started to get really angry at me because I kept, so I kept arguing. I was like, I know, but nobody, Mickey, this doesn't even fit. And the sales are declining. And he starts sort of almost foaming at the mouth. He was so angry. And finally he said, you know, they didn't hire me or put me in this position for you to tell me what was right or something. Anyway, he walked out of the room, stormed out. He was really angry because I was fighting with him on it. And I'm seven months pregnant. I'm like, I've just lost my job. I'm like, I have to call my husband. I don't know how we're going to make ends meet. I don't know what we're going to do. I go back to my desk. I'm crying. I get a call immediately, like a second later. Hey, Maureen, Mickey. Oh, shit. Oh, shit. Here it is. He goes, listen, you're a really great merchant, but you got to learn to listen. And I'm like, he goes, not just because I'm the boss. I just mean, listen, like open your ears to your customers, to the world outside of you. You got to listen. And it was one of the best lessons that I ever had. And it stuck with me because, you know, he was right. I was on my train, and I wanted to sell him something. And I wasn't taking in any of what he was saying, nor any of the reaction of anyone around the table. And from that moment on, I really learned that lesson from Mickey and watched him do this in meetings where Mickey always has a strong point of view. But I would watch him in meetings, and he would... He thinks something is great, but then he'd turn around and he'd ask like 10 people in the audience, what do you guys think? You know, and he really was open and porous to the way other people were looking at something. And to me, that was such a great lesson. And to be honest, he wasn't saying that because he was the boss. He really was saying that because he listens to people. It's a great excuse to talk about some of the things you wrote about leadership inside of the book, contrasting this command and control sort of top down.

order-based structure with a far more like, I guess, setting the table is how I would put it, creating the context for others to succeed, but not really direct, necessarily directing, creating the space, but not directing the activity. Is that like a fair summary of the lesson? Yeah, totally. And it was a really interesting time. So I took over Chanel, it was 2007. And as a CEO, I was 2003, joined the company. And you got to picture this because it was a crazy thing. I sit down at my executive table and there are around the table 10 men and me. Now, I'm about 43 years old. They're at least 10 years. I mean, some of them were 20 years older than I was. I am, you know, I'm American. I speak French, but I am American and they are literally all European with maybe the exception of one and mostly French. My claim to fame is I have sold millions of units of flag tees off the back of a Chevy truck in a strip mall in the USA. And these guys have all been in the luxury business. And I kid you not, 20 plus years, most of them at Chanel. So you can imagine that coming into that. And in a way, I was cooked. But coming into that, there was no way that they could trust that I was going to be their boss. Yet I was. And so I had to start to think about how am I going to be as a leader when they have more experience than I have and when probably they don't really trust anything that I'm going to say. So I can't go back to my leadership books and get a vision and have a strategy and go ahead and rally that team because they're not going to believe me. I've really got to. Think about a new way of doing things. Not to mention the fact that this was 2007, so three huge phenomena for us. The first was the internet. This is the beginning of the digital boom. And for a luxury company... it wasn't just an opportunity it looked like a tremendous risk because we just we talked earlier it's all about exclusivity and rarity and now you've got your message blasted everywhere all over the internet anyone can say anything about you it's about control in the luxury business so all that opposite stuff that you really want to do the internet is now sort of dispossessing right all right so you've got that phenomena then you have globalization which again looks great you know floods of people in your boutiques only

You have customers who want to spend two hours with their sales associate in their private dressing room. How are you going to handle hordes and hordes, busloads of customers from brick countries who don't speak the language, who you don't know their culture well? That ended up being a great thing and also very challenging. But you also had millennials who, again, this new generation for us, both as employees but also as our customers and what they care about, weren't typically the things that we were thinking about. So the environment, social justice, having a lot of responsibility right away, we weren't geared up to that. And we were having clashes between the old guard and the new guard. So I walked into a situation. Very unfamiliar, very unknown, 10 guys around the table in a time of history that was incredibly disrupted. We're going to have to change everything. Sounds like fun. Yeah. So I realized I can't go, like, you know, first of all, I can't go back and look at the Wall Street Journal and figure out how to be a leader because that's not going to work with these guys. But by the way, they can't go back to their history books either because anything that they were used to doing before. Is changing. So that's when I started realizing, you know, I need to engage in sort of a different way of being, but probably so do they. So maybe we could do this together. And it was then I started to shift my own leadership style into a much more listening, much more collaborative, you know, really getting their points of view, sitting at their side of the table, trying to figure out how to create teams in new ways where not everybody was siloed in his or her region or his or her business unit, but really getting us to work and breaking that up differently. All that led me to, and this is a little bit later on, thinking about having to transform our culture. Because what I realized is, despite all my efforts to do this and all the things that CEOs do, like roles and responsibilities and org charts and move people right and move people left, that this was actually something fundamentally cultural. Like we grew up in a culture where command and control leadership is the right kind of leadership. However, when you have countries all over the world and now... tens of thousands of new employees, but then lots of them new coming into countries in China, you can't command and control. You actually don't have the power to do that. So you've got to create a culture where people fundamentally understand your brand. And in order to do that, we all had to shift our leadership.

So that's when I started this immense leadership initiative, which we didn't call a program because I always feel programs are like start and stop. Whereas leadership is something that continues on. And that was when we started active and conscious leadership. Talk more about that because kind of like the whole idea of you can't airdrop in a purpose. It's going to kind of be organic. You can't airdrop in a culture either. And so if you're trying to shift a culture. What's the strategy for doing that? It seems like a daunting problem. Yeah, you have to be pretty patient, number one, because I consider it's like a five-year minimal process. But my thought was this. And here's the kind of funny thing. We were in a meeting, and we do these things like, you know, what do you think is good about our company, our brand? What does everybody think is right? What does everybody think changes? Everybody kept blaming this person called culture. I was like, so wait a minute. Who is this person culture? And they kind of all looked around. I said, guys, I think it's us. So at this point, by the way, there were 20 of us and there were women on the team, thankfully. I'd done part of my moving and integrating other pieces. So I decided to launch this initiative. But what was kind of interesting about that, because you're right, you can't just drop it in, is how I went about it. Which, by the way, is a story about the biggest flop of my entire career. We'll go down in history, I think. So I now have taken note that... listening and collaboration, flexibility, curiosity. All these things are leadership qualities we need to possess. And we're going to change our culture to integrate those qualities into it. And by the way, this is at the same time that there's all these sociologists coming up with this term, feminine leadership skills. And I'm like, right, score. I met Chanel. I'm a woman. We have lots of women who work here. We service women. And by the way, she was an iconoclastic woman. This is great. I am going to do this. And I'm going to launch. some feminine leadership skills within this group of still mostly men, but some women. So I had a coach at the time. I just, and I want to get it done right away. You know, you said you can't airdrop it. I wanted it airdropped right away. So it's, it's now July. I hire this team of consultants from California. Don't forget my team is still mostly European and I don't know what I was thinking, but I did that. And then it was a month of July. I decided I'm going to take my team off site in July and we're going to.

launched the beginning of this program. Now, July, have you ever worked with anyone in France? No. Okay, so July is the worst month of any time that you can pick. to launch a program like that. I mean, it's like... Going into August when everyone's gone. Right. And they're getting ready for their August vacation. So either they're cramming to get done or their head's already in Provence. I mean, so forget about it. You're not going to get anything done. But I decide I have to do it. This is the right timing. I haul them into a conference room. Actually, not even conference room. It was a ballroom somewhere in the west of Paris. It was spitting rain that day. That was not my fault. But then I decided that we needed to do some team building exercises. So I take my very French team out to the garden and it's now raining. And I asked them to hold hands and sing Kumbaya. And this one guy on my team goes, which is basically, this is kindergarten. It was a disaster. I then take them back in and I get up on my band set and said, we need more feminine leadership skills. We need to collaborate and listen and be agile. I was like, Obviously not walking the walk, right? I totally, I sort of totally missed it. Anyway, they literally nearly kicked me out of the room. Total tissue reject. And, you know, Chanel's a very, the culture is very defined there. So when things aren't going well, you know it. And I knew it right away. But in addition to feeling that things weren't going well, when people don't want to do something, traditionally, I guess this is true of France. I'm not sure about the States, but in France, this is true. They take out their calendar and they show you all the reasons why they can't do it because they're way too busy. So we're not going for this. Get back home. This is an utter disaster. What am I going to do? My coach calls me. The HR person calls me. The consultants call me. We're going back and forth. We had an off-site booked in September. It's now July, you know, whatever, 15th or 20th. And I really just sat there and thought, you know what? I realized what a mistake I'd made. I thought, I've got to push the reset button. I'm going to stop everything, cancel the off-site, and start over. I know that actually these qualities that I think that we need to have, not just because they're femininely, that's actually a label that I don't know that I even really believe.

But we need to have these qualities because they're 21st century qualities. These are things that we need in our world with our interconnectedness, with our globalization for millennials. These are things that we need to possess in a much greater quantity than we have them. But I didn't go about it right. So I wrote a note to my team and said, look, I'm canceling the offsite. I don't think we're ready. And I actually want to hear from you what you think is right about the culture, what you think needs to change. And what kind of role do you want to play? Who will you be in this? So I spent two hours with 20 people, basically, one by one and sort of collective, a lot of hours, 40 hours or so, collected everything, collated all their ideas into something that we called the froms and the twos. And we met again in October, sat around a much smaller, in a much smaller, more discreet room. And that... meeting went a lot better. And that was the birth of this leadership initiative, which we, by the way, I fired the consultants. We decided to create from scratch and we decided to do it collaboratively so that they could have a part in what we were going forward with. Looking back now, what do you think the best outcome from that initiative was or has been? I think really the lack, the collaboration that came from being able to be much more vulnerable with each other and much more real. So I have a little story about that. Our first speaker was a guy named David White. So David's a poet, but he's a poet who has an emphasis on leadership and especially on introspection, on self-reflection. So even though my team, by the way, is now on board, this is January, when they heard that for our leadership initiative, the first person was a poet, they looked at me like I had 10 heads. They're like, are you kidding us, a poet? So David, and it's worth looking up because he's got a beautiful voice and his poetry is amazing. David comes in. He's an English guy. He's got a brogue. And he's very masculine. And he stands there and talks for two and a half hours. And I'm thinking, oh, my God, this is going to be a disaster. Two and a half hours and no one moved. No one even went out to smoke a cigarette. It was incredible. But what he does is he talks about his own life stories. He tells about a time that his daughter and he got in a big fight.

and how that resolved. He talks about when he lost his best friend. He talks about leaving his job and going into his calling as a poet. And he's weaving everything with his poetry, but also with a notion called courageous conversations. And these are the conversations that we're supposed to be having, but that we're not having or that we're too afraid to have. It could be conversations with the world. It could be conversations of the future. It could be a conversation with your team or with your partner. conversation with yourself so what are these conversations that you're not having that you need to be having so he talks and again nobody moves it's incredibly sort of intense and then we designed part of this program was you you or initiative i should say is you you get speakers but you work with them on their material and how that applies to the company or not so the idea was we would break up into teams of two and talk about a courageous conversation that we weren't having possibly with our teams outside of this room so that people felt safe. They went ahead and started the exercise two by two. They picked a partner and I realized I didn't really have anyone to have a courageous conversation with. So it's kind of like, okay, well, what do I do? But I'll just, I guess I'll just sit here and write my courageous conversation. So I also started watching them and they were really into it. So I started writing, here's the courageous conversation I guess I'm not having with them. David decides to wrap up the day. He calls everyone back. And people, by the way, were really moved by the action. You could see sort of the intensity. And he calls everyone back in the room. He says, Maureen, do you have anything else to say? And I have to say, that whole time I was feeling so out of integrity because it was like I'm making them do work that I'm not doing. And I did something I never expected. It was like a last-minute crazy thing to do. But I got up, and my legs were literally like. shaking underneath me and my hands are trembling and sweaty. And I got up and I said, here's the courageous conversation that I'm not having with you. I said, sometimes I'm afraid. Sometimes I'm worried you don't trust my leadership or you want answers to questions that I just can't give you. But I can't and I shouldn't run this company without you. So I need your help. I'm now with my paper in my hand. My hands are, I can almost feel it. My hands right now are sweaty. And I look up.

And I'm thinking, I've just totally screwed myself. This is a disaster. And I see these empathetic eyes, and almost like people could see themselves in what I had said, and even tears in some people's eyes. But then the weirdest and craziest thing happened, which kind of gets to the point of the story, is a guy in the back row, who, by the way, was the same guy who said, Jardin d'enfant. He was a very skeptical guy. He was looking at his feet, and he raises his hand halfway, and he goes, I'm an imposter. He goes, I pretend to know things that I don't so I can impress my teams. A second guy raises his hand. I am not kidding. And these are guys, by the way, at this point in their 50s. Second guy raises his hand and he says, I don't really listen. I just try to validate my point of view. A third guy raises his hand and said, I'm terrified of the unknown, which is why I'm so slow to make decisions. So from that day forward, it was almost like something broke open. And we could be real with each other. We could be in a space of vulnerability. And what that did, and it's a long story, but what that did was that actually helped us be more innovative. Because when you can trust that your team members aren't going to shoot you down or that you're not going to be humiliated or embarrassed by an idea. come up with a hell of a lot more ideas and you listen a lot more because you know how somebody feels. So all of a sudden from that day forward, it was kind of the beginning and ideas began to germinate a lot more. So we could do things like one of the famous things that gets quoted in a lot of like articles about my time at Chanel, we harmonize our prices around the world. Nobody in luxury had ever thought to do that. So there was a time that our prices in China were 70% higher than in Europe. Part of it had to do with the appreciation of the yuan, but it was a really messy situation, mostly because there was a lot of gray market out there when that happened. But we made this decision that it wasn't fair for Chinese customers, and we were engendering a business that we didn't believe was a good business, which is selling goods for pretty much a black market, that we should harmonize this. And everybody else in the industry, when we did it, their jaws were dropping. Wait, what about margin? What about price?

It was the best decision we ever made. It completely changed the game for us. So that kind of idea came out of someone not being afraid to say it. And I think when you create an environment where people trust each other, you can do things that you've never expected to do before. This idea of courageous conversations is interesting. And I wonder if there are any hallmarks or signposts, I guess, to help people find what, because the difficult conversation or courageous conversation thing is something that's come up a couple of times. Are there markers of that? Is it just like something you know? needs changing, but you don't want to address? Like, is that it basically? Yeah, I think so. I think you kind of know you're supposed to be talking about this, but you just, for whatever, yeah, inertia, sometimes a lot of times just avoidance because it's painful and it's hard. Like when David White tells a story, he talks about his daughter stomping up the stairs and him coming, going into her bedroom with a cup of tea and saying, let's just talk about this. Because we asked him later, so how do you have a courageous conversation? And his first thing is, Change the conversation that you're in. Change the conversation that you're in. And it really makes a lot of sense whether it's a personal thing. I mean, people came back from, I had one guy on the team who came back from this session with David White, and it was a great decision because it was time for him. He decided that he was going to retire. because it was a conversation he had been avoiding having, and he sat down with his wife. And so it was touching. You say, is that good or bad? How does that help the business? Well, actually, it does, because that allows you to get new talent. More resources, yeah. Yeah, I mean, so I kind of look at that. And it's hard with cultural change, right? Because you can't, there's no ROI you can directly put on these kinds of things, except that you're changing the mindset of a company so that they're prepared to deal with a future that's way less certain, way less known than the past, right? And to me, that's sort of what CEOs should be doing. It seems like something that's true, not just in business, but like in any set of relationships, I guess business is a set of relationships too, that the more you let stuff build up.

It has weird downstream effects and blockages that you probably don't think about. So like sweeping something under the rug isn't just sweeping something under the rug. It's like creating a creative blockage elsewhere that is a huge impediment and just avoiding those like systems, whether it's conversation or otherwise systems for avoiding those kinds of blockages are key. Yeah, totally. I mean, I think that's it. And I think it's, it's, you're right. It's just kind of a, it's kind of a system and, you know, a technique to what I learned. With that, not just the courageous conversations in effect that you're having with someone else, but the ones that you're not having with yourself. That self-reflection and even getting the members of my team at Chanel to think about where they are was incredibly helpful. I had one guy, for example, who was in marketing, a really talented marketer, but his love and his strength was in the creative process. I think I could kind of see myself in him. And asking him, have you had this conversation with yourself? And then eventually him sort of revealing to me, yeah, I'd love to be creative and moving him. And he's now the creative director of the fragrance and beauty area and watches and fine jewelry. So I think. These conversations can apply to so many parts of our lives. Giving people that nudge seems like such a gift. How do you think about this introspective process now versus the rest of your career? I'm always interested by how that changes through time. We met through the Vardis, and Boyd and family are sort of my spirit animals when it comes to this topic. I'd love to spend a few minutes here on how you think about introspection. It's interesting for me. It's always been... I guess always since I had a coach at the Gap, so not always, always, but, and took note of the fact that when you actually sort of go deep within yourself, that there are resources that you never knew you had. There are ways, new ways of looking at problems that you think you can't solve. So I kind of feel like it's not just for a career, it's for a lifetime. You know, and now I'm finding my, and my partner Tess is a Zen student. We do meditation, but the more that I can sit.

with myself and with those thoughts, the more comes up. And what I find really interesting is introspection doesn't just have to be sort of an exercise. So it doesn't even have to be in meditation. It could be just spending some time considering where you are. who you are, or with your partner and doing the same thing. We spend lots of time talking about our lives, about our aspirations, about what we're feeling. And sometimes you don't even know what you're feeling until you kind of talk about it. So I think that that process gets you into places that are sort of much more interesting than if you're ignoring your life. I know for me, I don't think I would have started writing a TV show if I hadn't sort of been introspective and gone, wait, what does that tickle? Like, what is that? What's tickling me about this? Like, why do I find this so vibrant? And it's not like I was looking for something to do. I'd come off just writing a book and I couldn't wait to do this. So something was coming up, but that anyone, you might have that experience and ignore it because you've got a busy day. You've got kids at home. It's taking the time to do that. I think kind of leads you as Boyd would say to your next track. I mean, for me, it's been the case anyway. And now it's sort of almost a habit. But you also start, I think also with introspection, the other gift is that you start to see how other people see you in a way. Like you can step out of yourself more readily. Because you're more open to embracing someone else's point of view. Yeah, the thing that I've enjoyed most about that process is giving people like more benefit of the doubt maybe is the right way of putting it where or being more empathetic, I guess is the word more understanding that like everyone's got stuff they're dealing with and things are hard and don't give people too hard a time. Seems like a simple but powerful idea. Yeah, I was I mean, it's one of the things I used to teach young merchants. It's sort of like. I remember not even young merchants. I'm thinking about at Chanel. I had a conversation with a guy once. He was working with an outside vendor, and he was complaining about this vendor who was a creative guy and who was a little bit nutty. And he couldn't stand it because the creative guy could never hit the deadlines. And he's like, you know, and he does whatever he wants. He never hits the deadlines. And this creative guy is kind of a well-known guy, so I had to stop this person who was working for me and say,

why don't you sit there for a second and think about what it must feel like for him? Like, if you were him, how would this feel to you? And just that taking yourself even, because I think that's, in a weird way, that's introspective too. It's like pausing for a second to say, what must this be like on the other side? And all of a sudden, he had a much greater understanding both of... the other person but also of himself because he saw where he was hammering his ideas and sort of being stuck in his own way since it's something we share i'd love to talk about some places so the beginning of this whole story was you being drawn to france and i think we share a love for africa and common for sure just talk a little bit about what it is about some of these places that most appeals to you and maybe highlight a few of them that draw you back for me the french are interesting and france is interesting because i find there's an embrace of everything that is beautiful and sensorial. And the French also, particularly in the south of France, which is what first attracted me to France, kind of take time living life. Like there's a sense that things slow down a bit, you know. Before dinner you have l'aperitif and the sun is setting and you're taking time with your family or with yourself to slow down and just look at what's beautiful in front of you. So I've been attracted to France, I think, for that incredible sense that the French just appreciate, life. I mean, sometimes they can be, you know, in a hurry and ornery and all that, all the things and the reputation that Parisians have, but there really is a sense of enjoyment of something that tastes good, of something that looks good, of a beautiful smell. I think that's why they're so good at luxury, by the way. Africa is so interesting because I went for the first time probably 15 years ago, something like that, maybe not that long ago, but it's been a while. And I have never had a vacation where I've just forgotten about absolutely everything else. Part of it is, and I've also never been so tired after a day of riding around in a car. I mean, you're like, wait, what did you do today? I didn't exercise. I just rode around in a car and I'm exhausted. Again, for me, it's being filled, having your senses filled and sort of entering into this world.

where you do see that everything is connected and you watch, you know, when the leopard is out and is approaching and you hear the go-away bird or you hear the barking of an impala, that sort of energy of everything working together to me is completely sort of I am no longer myself. It's almost like the eye disappears and I'm part of this bigger landscape. called the world. And so for me, Africa has been, I don't know about you, but for me, Africa has been a lot about that kind of letting go of oneself and into this much bigger thing that is our universe. The only other place that is comparable for me is New Zealand. Oh, I've never been. So it's actually the same reason, but a different context. So like in Africa. And these are the two places I've come back from depressed, like sad that I had to leave. Totally, yeah. The deal in New Zealand is there's not really wild – I mean, there's wildlife, but it's not about the wildlife at all. It's about the landscape. And this is South Island specifically, which is glacial. So it's just – you just honestly can't believe what you're seeing. It doesn't seem real. And it's the same idea of like – making you feel very puny. And the beauty there is just so overwhelming that you just kind of lose track of, like you said, everything else. That to me, when I asked about spaces, and France has, I think, some of those qualities too, like places or settings that do that. seem really powerful i always think of it as a sense of awe and i have this for example i look out the window today and this tree right here is so red and it's getting redder every day and i every morning i wake up and look at it i get a sense of awe in my heart like that that that nature makes that happen like almost the absolute amazement of the natural world that we somehow get cut off from um and i think You can't help in a place like New Zealand where you're just, it is all around you. Or in Africa, we forget that this incredibly inherent life exists, beauty in life exists in our world. I think New Zealand sounds amazing. Africa, I'm addicted to it. It's almost like I'll go back whenever, you know, tell me when. I mean, the smallest things.

Also, I find that the reason we're so relaxed there is because we're engaging every part of our bodies and our senses. We're no longer using just that little thing called our mind to try to figure stuff out. And by the way, I come back with a million ideas. It's almost like a meditation to be there. If I had to sum up our conversation, I would say it's about... openness and immersion. You have to have both of those things. And maybe it's literally like physical spaces like Africa or somewhere else. Not everyone can get to Africa. It's hard to get so far. It's a long way away. It's burdensome. But go hiking. I mean, it's really a question of a state of mind. Surround yourself with something that's incredibly beautiful. Go to a play. Like a couple of weeks ago, I went to this play or this show in New York at Lincoln Center with the Shaolin monks. So it's this incredible, they're, you know, they practice this. beautiful sort of artistry, kind of dancing, martial art form. I went to it because a guy who choreographed it actually did something for my leadership work at Chanel. He choreographed some stuff for us in Morocco. I mean, I just got completely absorbed by the movements of these people on stage. So I don't think you have to go to Africa. You know what I think it is? It's like letting go for a second of where you are in your complicated, busy daily life and allowing yourself, you said it, the immersion into something that is greater than you. Well, you've given a lot of it already, which I appreciate. I wonder if there's any... closing thoughts or advice maybe specifically for younger people kind of starting on this uh starting on a career let's say um that we haven't covered any any any notes from being a leader from being a worker from your from your whole experience that you'd want to leave people with you know it's it's interesting i think because i have two girls who have recently finished college and are out in the world. One has just got a job. The other one's looking for it. One of the things I can say that I'm most proud of, but that I would encourage in both parents, but also in the younger set of people who are looking for what they want to do is really staying close. I mean, people call passion. I don't think it's passion. Like it's way deeper than that. It's really staying close to that thing that makes your heartbeat. And I know I said that earlier, but

One of my daughters is, both of them graduated from Yale, so they can really do a lot of things. Jobs aren't that easy even with that, but my oldest daughter has been dying to run an organic farm. So after Yale, she went off to work for, actually she joined a program for a year on an organic farm and would be off the coast of Seattle. So I think about that and I think like she's doing something because she feels passionately about the food that we eat and about the way we grow it. Like that's what she cares about in the world. And I love the fact, you know what, she's not looking to be CEO of anything. My younger daughter is now tutoring kids, inner city kids in Houston on how to write. And again, that's just something she cares a lot about. So when I look at, when I think about that, I just think life is short, you know, and you know, yes, we all want to make a lot of money. We all want to have beautiful things, but. And at the end of the day, you know, I feel like you are sort of the actions that you take in the world. And those have to be close to what you care about. And I don't know, that may sound a bit tripe. That's great. So the closing question that I have for everybody is for the kindest thing that anyone's ever done for you. People have done so many kind things for me. I wish I could come up with one. I mean, there's so many. It's funny. I can think of examples of my ex-husband who was very kind when we changed our relationship and became friends. I can think of my partner today who was so kind to be with me throughout that process of really figuring out who I was and separating from somebody I was with for 26 years. To me, I can think of my kids. I think of that part of my life because that was incredibly tough. It was incredibly tough after 26 years to change a relationship. space for me and who, while might've been upset and angry, like came back to me and trusted me. To me, that's bad. Another sheer kindness in that. Yeah. Wonderful. Yeah. Well, this has been an absolute blast. I appreciate all the time. Such a great perspective. It's so cool. Thanks. Thanks a lot. It was amazing. Hey everyone, Patrick here again. To find more episodes of invest like the best, go to investorfieldguide.com forward slash podcast.

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