Patrice Louvet, chief executive officer of Ralph Lauren Corp., imparted several lessons about his leadership style at the WWD Apparel and Retail CEO Summit.
The winner of the WWD Edward Nardoza CEO Creative Leadership Award, Louvet sat down with Evan Clark, deputy managing editor of WWD, to discuss how he runs the $7.1 billion company and his leadership philosophy, which centers on clarity, consistency and staying true to who they are as a company.
With a 30-year background at Procter & Gamble and his current eight-year tenure at Ralph Lauren, Louvet has had plenty of time to learn and experiment with different leadership styles across different countries and has learned a few key principles.
“The first one is, the most effective leaders are purpose-led leaders. They have a clear vision and a clear set of values that drive their choices, their behaviors and how they engage,” said the 61-year-old Louvet. “The second one is, I’m a big believer in servant leadership, which is that it’s my job to create the conditions for my team to be successful, and if I do that well, I’ll be fine.”
Louvet said he often contrasts 20th- and 21st-century leadership styles. He characterized 20th-century leadership as having a leader at the top who has all the answers and sends the orders down the chain, and expects people to just execute. “Which you know has been effective in some context, but I would argue that in today’s world with the Gen Z” they don’t respond to that kind of management.
The third leadership style, which he picked up at P&G, is the five E-model: envision, enable, empower, energize and execute.
“The best leaders have this ability to have a vision, enable their teams, trust them and delegate, and give them energy,” he said. He said he often likes to say that the CEO is actually the chief energy officer. “And our responsibility is to make sure we bring energy to an organization, to a challenge, to an opportunity and then you have to execute.”
Louvet was asked what is it about P&G and that experience, because there have been so many fashion and industry leaders who come out of P&G, such as Chip Bergh and Michelle Gass.
According to Louvet, “P&G is just a great leadership school because you get thrown into leadership positions very early. I grew up in marketing, and very quickly, I had a team to manage. I had a sizable business to manage, and the leadership development philosophy is, ‘We’ll throw you in the pool.’ We know you don’t exactly know how to swim yet, so we’ll be there with a pole on the side, but that’s how you’re going to learn how to swim.”
He said there’s a lot of formal training that’s put in place to help one develop leadership skills. And then there’s on-the-job reinforcement, providing people with new opportunities to grow and stretching and challenging them. Since the company only recruits from within, the next CEO of P&G is today a brand manager. “If the company does not do a great job developing that brand manager, the company will not have a great CEO 25 years down the road,” Louvet said.
After running the beauty division at P&G and joining Lauren as CEO, Louvet was asked how Ralph Lauren challenged him.
“Many different ways,” Louvet said. “And actually, a lot of people thought I was crazy, jumping from Gillette, Head & Shoulders and Walmart, to the Ralph Lauren world.” He said the opportunity to work with Lauren has been “absolutely incredible.”
One of the most important things was building his ability to dream more. “We believe at Ralph Lauren that we’re not in the fashion business. We’re not in the apparel business. We’re in the dreams business. That’s ultimately a proposition for consumers. I’ve learned to dream more. I come from a very rational, very logical, very disciplined world with Procter & Gamble, and also I think the way I was built over time.”
Second, he said, there’s not much data in this industry. “When I started this job, I felt like a pilot in a cockpit and the windows of the cockpit were covered up with cardboard. So we’re not going to get a lot of data in terms of where we’re headed, so we’re going to have to trust our intuition. We’re going to have to trust our experience. So that’s helped me get more comfortable balancing the need for logic and data and quantitative, and the inspiration, aspiration and dreaming parts of the business.”
Overall, Louvet said, “I think success in this industry requires clarity of direction, clarity of vision, connected with a clear understanding of the consumer you want to serve, and a clear understanding of the business dynamic. When those two come together nicely, then you have success. When you only have one of the two, it’s much more challenging just to get to scale,” Louvet said.
In order to make sure he’s executing on the vision, Louvet said it begins with the clarity of the vision “and the choicefulness of the plan.” Because they are faced with so many opportunities, they need to have precision, clarity and choicefulness.
For example, he had a meeting with Ralph Lauren three months ago and they were drinking water in his office, and Louvet said, “I think we could probably launch a Ralph Lauren water…and I think we could do a pretty good job.” And Lauren said to him, “You know, it’s not a joke. We’ve actually looked into that. This is a brand that has been built as a lifestyle brand, which you can really stretch across restaurants, coffee shops, home, etc.” So he said one needs discipline in terms of what they focus on.
Louvet said “it’s not rocket science.” He said you have to understand who is that customer, what makes them tick, what are the choices that he or she has? And then how do you make sure that what you offer is distinctive and connects with what they’re interested in,” he said.
Right now, things are going well. Lauren’s market cap is $20 billion and it’s one of the most highly valued fashion companies in the market.
Clark noted that Wall Street rewards not necessarily just a good quarter, but the promise that it is a stable brand. The company has 33 straight quarters of increasing average unit retail prices, and is marching higher. Clark asked, “What is the secret sauce?”
“Consistency is a big part of it.…We do aspire to be a blue chip investment in this industry. This industry is known for volatility. It is known for brands having great runs for three or four years, and then having challenging times for 10. Ralph has this wonderful quote, which is, ‘I don’t want to be too hot and I don’t want to be too cold.’”
“And that’s what really drives our mindset,” Louvet said. He said they want the company to be healthy and thriving 10 years from now, 15 years from now. “What are the implications in terms of choices, and then we balance the different time periods, so consistency of delivery, as opposed to being really hot and then really cold, is critical to us,” he said.
He said the brands that are most successful are the ones “who know very clearly who they are. They don’t try to be someone else. They don’t try to jump on a trend. They don’t try to be the hot thing of the moment. They consistently deliver exciting and inspiring propositions that have great value for consumers, and consumers see the value and they [the brand] become trusted.”
Overall, Louvet said, “We believe we have to have a clear purpose to inspire the dream of a better life through authenticity and timely style. Our job is to bring it to life, day in and day out around the world, in our top 30 cities that we’ve called out. As we do that well, providing the consumer with value, where they say ‘this is worth it,’ then the expectation, everything will follow.”
Louvet was asked about the leadership challenges around AI, where people have no idea where it will be in five years, and how does he manage that? Lauren relaunched “Ask Ralph” last September as an artificially intelligent shopping experience on the brand’s app.
Louvet said he was just in a meeting that morning where they spent 45 minutes on where they are on AI, and how do they organize themselves to take advantage of it and empower the organization to lean into it. He said they look at it through the lens of creativity and productivity. “We’re actually finding it to be an exciting enabler of creativity and one of the first organizations actually leaning into AI were counterintuitively the designers.” They use a platform called Midjourney.
“When we sketch a dress for our next collection show or next collection, it generally takes a person three to four hours to sketch one dress. So we can sketch three or four dresses a day. With AI, we can now sketch 10,000 dresses a day. So it opens up the aperture in terms of creativity.”
He said the company has a partnership with the Australian Open where it dresses the ball boys and ball girls. The team used AI to do mood boarding as a story. “And then, of course, human creativity takes over.
“So we’re leaning into the creative side, staying true to who we are. I reassured Ralph he will not be obsolete by AI, the risk of that happening, but also helping expand how we think about creativity. I like the terminology copilot because that’s a good way to think about it,” he said. He said the focus is not how many jobs will be reduced, but how do they get more efficient.
Finally, Louvet was asked how he and Lauren work together, and what is the designer’s role right now. Louvet said Lauren has two roles. He’s still the chairman of the company, and he’s the chief creative officer with an incredible team below him. “I connect with him at least once a week. We have a two- to three-hour lunch. We talk everything and anything, ranging from the preparations for the next fashion show to the earnings call coming, to how we feel about our teams, politics, what’s happening with the mayoral elections here.
“We’ve developed a partnership that has not been codified, and what we are clear on is where we each should respectively play, and we’re both committed to each other’s success,” Louvet said.
