Luxury’s talent conundrum

A version of this essay appeared on Hudson Walker International’s Opinion section published on November the 4th, 2016.

The Luxury sector is facing headwinds. Single digit growth seems here to stay. The behaviour and the expectations of the elusive but coveted millennial consumer remain somewhat a mystery with conflicting trends emerging. For instance, millennials seem disinterested in owning houses and cars, but are nonetheless happy dropping $25 Bn on diamond jewellery. The luxury consumer is globally mobile and digitally savvy, thus requiring brands to think of narratives that remain relevant and accessible in the many contexts in which the consumer might encounter the brand. The traditional luxury maison with its aura of exclusivity is also under challenge from the small, nimble luxury brand that not only knows where to find the new consumer but also to serve her well with messages and products that appeal to her, and do so in an agile manner. The emergence of these new brands is not unrelated to the technological developments challenging and reshaping the entire luxury value chain.

Like many other industries being redefined by technology and the warp speed of the web, the luxury sector too is facing a talent shaped challenge. The sector however remains quite conservative in where it sources talent, privileging industry embeddedness over attracting outsiders. These outsiders may come in and ask uncomfortable questions but they also have the ability and aptitude to shape the future of the industry. The need for luxury sector leadership to shake up their thinking on talent is apparent.

But how can they do it? Well, here are some ways to examine the existing thinking critically.

Consider whom you are attracting. While seeking to fill a position, if the hiring manager in the luxury maison sees applications from only those already working within industry, there is a problem. Pretty much every other industry has had to learn, some grudgingly, others more willingly, ways to reach out to active and passive talent where the talent hangs out and to make their brands more relevant to those professionals who would not otherwise consider them as possible employers.

Ask whether you are hiring for what they can do for the maison, or for what they have already done in their careers. This is trickier than it looks at first pass. Research suggests men are often hired for potential while women have to have proven it before. The luxury sector overwhelmingly sells to women, who have increasing economic power as well as alertness to governance issues in companies they buy from. The hiring-for-potential-or-proof challenge is exacerbated when companies are hiring for a future that is not fully spelt out and is unfurling as we watch. If you are seeking to acquire skills that are themselves nascent, consider that those skills may well have been acquired and demonstrated outside formal employment. As the boundaries between work and non-work areas of life dissolve, it is worth remembering that we bring our whole selves to wherever we go. Hiring conversations need to evolve from the curriculum vitae to exploring the passions of the individuals in their life. This will have to become normal as people pursue and build many careers within their professional lives, which brings me to the next point.

Before even seeking new talent, think deeply about how you will retain them, once they are hired. The adage that “employees do not leave companies, they leave their managers” needs modification. Employees leave in pursuit of fresh challenges knowing well that having multiple careers is now not a novelty but the default, and that only they themselves are responsible for shaping their work life. This challenge is multiplied manifold when the talent freshly hired is a a star and aware of her star power. Monetary and non-monetary incentives are the hygiene factors. Retention is about giving them something to believe in, something that lifts the game daily from mundane transactions to an opportunity to make a meaningful difference.

Lest this monograph should make these challenges sound insurmountable, I should add that this is where a seasoned and well-networked headhunter comes in. A good headhunter serves as the consigliere or consigliera to the maison. He or she understands the essence of the luxury brand, and can communicate it faithfully to a prospective candidate in a manner that bridges elegantly the gap between the narrative of the brand and its salience to a candidate’s aspirations. This is a crucial skill as a luxury mason’s success in attracting, hiring and retaining talent now depends on how well the leadership articulates their vision of the future and demonstrates that it is in line with the future emerging before our eyes.

The industry whose mainstay is heritage and craftsmanship is up against rapid technological and socio-political change. Something’s got to give for the industry to remain relevant and thrive. Talent is where the solution to that conundrum lies.

On fancy job titles

This article is the fourth in the Startup Series on FirstPost’s Tech2 section and first appeared on Oct the 19th, 2016.

In one of my corporate venturing roles with a large Indian conglomerate, I served as the country manager of a European country. That was also the job title on my card and in my email signature file. The important sounding title was not just about sitting in a fancy office overlooking Zurich lake. I made a lot of calls and set up my meetings with prospective clients for business development purposes. I also went daily to the post office to collect our mail, printed and sent and filed my own faxes, made coffee and washed my own coffee cup, took out our recycling, and did a whole bunch of administrative work that people in large companies do not even think about or farm out to secretaries and assistants.

It was, after all, a new and small operation albeit with a BigCo parent company.

Startups are no different. In the early days of a startup, founders do everything from washing cups to taking and making calls to filing papers to paying bills. They do VAT returns, meet account filing deadlines, minute board meetings, keep an eye on the cash in the bank and so on. They pack products and take those packages to the post office for mailing. They also go out and represent the company to customers, partners, vendors, media and financiers. There is nobody else to talk about the brand, the company, the product but the founders who created the business. In other words, early days are when the startup founders are always selling, trying to sell or fulfilling orders.

Is there a need for startup founders have important sounding titles? Some even argue over them!

Titles serve a purpose.

Titles are useful in signalling to customers, partners, vendors and other third parties about the roles of the individuals they are dealing with. Giving such comfort and confidence is an outward facing utility of titles. Yo can go the ego-boosting heavy title route, or take a leaf from Craig Newmark’s book. He is the founder of Craigslist and calls himself “customer service rep”.

Inside the startup, roles and titles can help start a useful and essential conversation about allocation of responsibilities as the early rapid growth forces functional specialisation within the founding team. The CEO should ensure there is enough cash, that the company is heading in the right direction, and that there are enough people on the team — or from vendors and partners — to do what is necessary. The COO’s role may be defined by the context often spanning revenue ownership, supply chain, operations and other processes. The CMO takes charge of all marketing and communications with an aim to establish the brand as well as drive inbound inquiries and sales.

Then there are the future employees. As founders, you sell the vision to future employees so they consider working with you. Some of these employees then actually want big corporate-sounding titles e.g. VP. In an early stage and relatively flat organisation, a title such as VP may mean little. But what it can do is catalyse the thought process required to develop an organisational structure that will support future growth including growing numbers of employees, their roles and their career trajectories.

I am no fan of hierarchical organisations but equally the evidence from holacracy as implemented by Zappos and others following their lead, and from self management structures as implemented by Buffer is mixed. So, for now, even for startups, organisation design for growth remains an active challenge on the table. Titles are not essential but they could bring much needed clarity as jobs evolve away from the traditional functional bases of design to other philosophies including customer at the centre of the organisation.

During my country manager stint, I had several meetings with big-cheese type persons in prospective client organisations. It was not uncommon, when I turned up, to be asked by the gatekeeper to the said big-cheese, “Wo ist der Geschaeftsfuehrer?” (Where is the boss?).

I was, after all, a petite and young Indian woman, turning up to meet an important man in their company!

Handing over my card with a smile, I would reply, “Ich bin die Geschaeftsfuehrerin, bitte.” (I am the boss, please!).

The big title? It always worked.

Autonomous cars and luxury marques

Aston Martin, James Bond’s car of choice (except when he went through a BMW phase), showcased a powerboat at Monaco Yacht Show this year. Writing in the Financial Times, Philip Delves Broughton laments that Bond’s legacy is being junked by this luxury marque and outlines the dangers of brands diversifying into unrelated categories, especially those far away from the brand’s core, while also acknowledging the financial pressures that may have brought about the powerboat.

Those are great arguments; indeed they are in line with the “we have heritage” argument that keeps many a luxury brand in that strange place where they are simultaneously desirable and at the risk of going out of business very fast. Those are also arguments that arise from a steady state style of thinking applied to the stark challenges faced by luxury businesses.

The challenge is altogether different. Existential, in fact.

As autonomous vehicles get on roads outside the Bay Area, indeed here in the UK not far from the Aston Martin Headquarters, the existential crisis facing luxury marques in cars is too urgent to ignore. They overwhelmingly pitch their cars as being about the pleasure of owning and driving a car as beautiful such as the Vanquish (I have my preferences but please feel free to imagine the marque that makes you go weak at the knees here!). There is a primal connection between the man and the (stunning) machine that is at the heart of the purchases of such cars.

With autonomous cars around the corner, the makers of such luxury cars may go out of business altogether.

What will be their offering, their raison d’être?

What deepest desires in our hearts will they be appealing to, with their beautiful — but self driving — cars?

Yes, I hear you cycling through Kübler-Ross. I am doing it too so you are not alone.

Meanwhile, let’s not pretend that the Aston Martin AM37 powerboat is only about the financial bottomline. There are existential choppy waters ahead. Aston Martin has found one way to navigate them. Unlike Bond, makers and purveyors of such luxury vehicles may not live to die another day. They have to think fast to remain relevant and in business at all. More previously unthinkable business models may be forthcoming from luxury car makers.

Mr Broughton meanwhile can perhaps take solace in the possibility of the next boat chase on the Thames featuring an Aston Martin! Bond’s heritage may be alive and well. For the time being.

Authenticity and Vedic wisdom for luxury brands

Alicia Keys, the talented musician and singer, was in the news recently for having chosen decidedly to eschew makeup. In a monograph in a newsletter, she said she feels no need to cover up any more. She talked about her journey to self discovery and finding her authentic self which did not need to be hidden under layers of makeup.

On cue, and missing all the irony of Keys’s commentary, Harper’s Bazaar featured 74 models in selfies with the faces they were born with. Hashtag #nomakeup.

Ladies & Gentlemen, authenticity is now on trend, and branded.

In a related development, one of my favourite web friends, Jackie Danicki, has started writing Burned Out Beauty, a beauty blog which is my new not-so-secret indulgence. She was the original beauty blogger in 2004 on the world’s first beauty blog Jack & Hill.

Jackie is not being a contrarian. She took a break, so to speak, and she is back doing something that she loves, enjoys and is knowledgeable about. Jackie is authentic.

The good thing about being authentic is there is no need to be contrarian.

But how can brands find where their authenticity lies? Indeed what is authentic and what are the sources of authenticity?

Eagle-eyed readers will remember my agonising over the “authenticity” of the Porsche symposer some time ago. I ruminated on it a while. After all the car is man-made, as is the symposer, and it is humans that manifested the Porsche vroom in the car’s engine as well as the symposer. It is not about the engine, it is about the sound. Once I had reached that essentialist unifying thread, I was at peace.

Where a sensory signal is not the only or the main signature of the brand, a brand may have to work a tad harder to define what it stands for, what its authentic self is.

A beautiful and effective tool is to be found in a Vedic method of inquiry.

What the essence of something is is often arrived at by answering what it is not.

Neti-Neti. Not this, not this.

Unlike other fixed signals of authenticity, the process of Neti-Neti also accommodates indeed nurtures growth and reinvention. If we are no longer something, if we no longer stand for something, we are one step closer to being our authentic and whole self.

So with brands.

When luxury brands with deep heritage struggle to reinvent themselves and their relevance in a world with modern technology and newness, they can choose to look inward and answer what they are not.

What are you not, any longer?

Authentic & still relevant

Motivation as a design assumption

Holacracy. MOOCs. Food labels.

Holacracy isn’t working. MOOCs have low completion rates, and an estimated 90% drop-out rate. Food labels to help consumers make informed choices show mixed effectiveness and decidedly no downward impact on public health concerns re obesity.

Other than not working as well as optimistically assumed in their wake, they have one more thing in common.

Their design assumes that people have self-motivation in heaps, and when faced with choices, they draw upon that self-motivation to make the best decisions for themselves.

From organisations, to education, to nutrition and health, the assumption of the “highly motivated and self-interested individual” does not stack up.

The reality is different from the design assumptions made.

As Buffer found out from its year-long no-managers experiment, people were expected to direct and motivate themselves, the lack of managers soon became overwhelming, and an implicit hierarchy emerged nonetheless.

Similarly MOOCs assume that a highly motivated and self-driven student is the only kind around. A self-motivated student will benefit from auto-didactic methods disproportionately more than a peer who isn’t so driven. As a teacher, I can attest to these phenomena too: students have variable levels of motivation, cognition and learning capacity; they may or may not understand the sequentiality of learning certain modules i.e. prior art in a field, which, of course, is more essential in some fields than in others; they may not understand some content and that can be demotivating in itself; they may not have the time or dedication to complete assigned readings; and last but not the least, they will always have have questions and if not, a facilitator teacher can make them question their tightly-held beliefs in a setting that makes them think.

In other words, willpower depletion, by the many demands made on us by life, is a real phenomenon.

The design problem that technology entrepreneurs keep dreaming of does not have to bring about “disruption”. It is more complicated than that.

The design problem is to keep people with varying motivations involved, and progressing.

If at all we achieve step change or “disruption”, the design challenge is to do so the existing tools of facilitation and enabling, along with new tools of technology and emergent social contexts, to address the same problems of variable motivation, cognition, and commitment to learning.

A designer assuming a bottomless pit of self-motivation in its audience sooner than later discovers the ordinariness of the human condition.