CSR is No Indulgence

I find it disturbing when business leaders choose to use CSR to compensate for ethically questionable business.

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Guillermo Gutierrez

Conversation with Chanel Japan CEO Guillermo Gutierrez

On Friday, October 23rd I conducted an onstage conversation with Chanel Japan CEO Guillermo Gutierrez for the French Chamber of Commerce in Japan. In case you were unable to attend, below are some of my key takeaways from the discussion.

  1. There is a nearly doubling of growth opportunity for large Japanese retail stores in luxury cosmetics if they do things right. Overseas retailers intelligently cluster similar brands together in high traffic areas. Shopping malls and to some degree department stores tend to act merely as renters of space, with different brands and products placed haphazardly.
  2. In luxury cosmetics, the greatest growth potential is in e-commerce, but only if the human interaction experience of physical retail can be matched. AI will not help with that, but rather innovative ways a human consultant work with a customer remotely in real time. Existing e-commerce platforms are poorly suited for this. Most brands will likely need to build their own with the help of technology experts.
  3. The failure of online selling platforms like Rakuten and Amazon when it comes to premium and luxury is the focus on lower price of products, and in some cases a deliberate predatory strategy of killing targeted product categories.
  4. COVID has forced innovation in how cosmetic brands reach and sell to customers remotely. COVID has also changed what customers buy. Working from home has not eliminated the need or the desire to look good, but rather created the need to look one’s best online. Masks have accentuated the importance of cosmetics around the eyes.
  5. For those who lead brands in Japan, the opportunity is in trying new methods, channels and approaches aggressively and frequently. Keep what works. Drop what does not. The brands that will succeed in Japan are the one’s whose leaders who prioritize innovation fearlessly and whose global head office executive allow the latitude to do so.

If you find these takeaways provocative, keep a lookout for future onstage conversation events with me. Check the French Chamber’s events regularly, or better yet, join the French Chamber (https://www.ccifj.or.jp). Also, keep abreast of American Chamber events as well (https://www.accj.or.jp). Join the American Chamber’s Independent Business Committee, which I co-chair, and you will receive announcements of all the committee’s events, include those that I run.

Principles Reign Supreme Over Values

A company I know has a stated value of innovation that it parades out in front employees on a regular basis, but rarely, if ever, do any staff or managers innovate anything—including staff in research and development!

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leader and decision

Benevolent Dictatorship

Understanding the rationale for change alone when accountability is lacking is never enough. As leader, you will find yourself having to do the work of your staff in their stead.

By accountability, I mean a leader ensures there are rewards for the right behaviors and good results, and penalties if there are not.

Accountability is never a staff issue. It is always one of leadership. A CEO I know is changing his company’s business model from selling products the company manufactures through distributors to selling directly to customers. It is a good idea that makes sense, and is highly likely to succeed. The new model is not just one of disintermediation. The company will also offer high-value services along with the products, flexible and rapid customization capability, and unparalleled, proprietary, competitive technology.

Despite the CEO’s efforts to reason, persuade, and convince his leadership team of the merits of the new strategy, they remain skeptical. They listen. They critique. They catastrophize. They express agreement in principle begrudgingly, but then drag their feet in action citing all sorts of excuses as to why they cannot change the way they do business.

The CEO tries to reason with his leadership team members again. The cycle of tepid agreement, inaction, and excuses repeats. No progress is made. Yet there are no consequences.

The decisions that your staff might make if they were CEO are not necessarily the same ones you make now, and that is just fine. There is nothing wrong with considering the perspectives of your staff, but you decide the direction of the business. It is reasonable to expect your staff to support your decisions, even when they might disagree. When they are CEO, they can decide.

Accountability is no ersatz for support. You should help with understanding the rationale for any change. You should provide education and other support when needed. You should provide additional resources, whether money, time, additional staff, equipment, or something else as appropriate. You should clarify ambiguity in authority and responsibility when these are ambiguous. You should resolve internal processes in conflict.

Yet even the best support is rarely enough to effect change in behavior. Only you can hold your staff to account. Without accountability, all bets are off.

Only you can hold your staff to account. Without accountability, all bets are off. Click To Tweet