Burberry CEO Angela Ahrendts Visits HBS

Apr-26-2012 by

The Retail and Luxury Goods Club (RLGC) was excited to welcome Burberry Chief Executive Officer Angela Ahrendts to campus Wednesday, November 28, 2012.  Since joining Burberry in 2006, Angela has led the company to nearly tripling its revenues through a digitally driven brand strategy.

“We call ourselves a digital media company,” Ahrendts said..  “More people go to Burberry.com than all stores combined around the world, so is Burberry.com not the most important storefront in the world? If 70% of luxury shoppers shop online and buy in-store, then how do you get 500 point-of-sales around the world to be exactly the same as the online experience?”

Transforming the 156-year-old British luxury goods company into a global digital “storyteller of the brand” has required a solid set of strategic initiatives, including centralized supply chain operations to improve product and content distribution agility, reorganization to break down barriers of communication between key executives, and new departments and governance councils to facilitate innovative creative thinking.  Yet, according to Ahrendts, intuition is at the core of the transformation success.

“Human instinct will always be more right,” Ahrendts said.

This fast-changing digital age, Ahrendts argued, combined with the generally undefined direction of where and how social media will redefine consumer purchasing behavior, requires instinct-driven decision-making that may or may not be supported by traditional analytic metrics, such as ROI.

“I always ask ‘What do you feel?’ and then, ‘Confuse me with the facts,’” Ahrendts said.

The undefined space provides an opportunity to be an innovator, and it is this concious awareness of combining right- and left-brain thinking that has driven the core strategies to position Burberry as one of the most innovative companies in the world.

Layer on top Ahrendts’ firm belief that “people work for people,” and the results speak for themselves.  Digital screens and store windows globally replicate Burberry.com’s landing page – changing thematically each month.  The Regent Street flagship store in London is adorned with over 100 screens and 500 speakers to create an immersive brand experience that share emotive brand content such as virtual rainshowers,  display the construction story of a RFID-embedded trenchcoat worn by a nearby customer, or simply act as mirrors.

Burberry’s retail business is up double digits in an arguably challenging environment.  And, Burberry has the lowest employee turnover rates in the industry.

Professor of Marketing Anita Elberse, who RGLC would like to thank for moderating the discussion, started off the conversation by asking if Angela felt her background (mid-west upbringing, state-school education) was non-traditional for a CEO.

“[My upbringing could be perceived as] abnormal for a traditional CEO,” said Ahrendts, “but more than normal for future CEOs of a creative brand.”

Ahrendts attributes her success as a “merchant marketer” in part to her innate “not so creative” but “not so analytical” personality.

“Right is not just creative, it is also emotive,” Ahrendts said.

And emotions are, in their own unique way, universally understood.  So for a company looking to reinvent itself in a global environment on a focused digital platform – it appears she is a spectacular fit.

In light of WSA’s 50th year celebration of women leaders, it is also worth noting that despite the demands of running Burberry, Ahrendts is always home by Saturday morning to make breakfast for her kids.

“I did not want this life without my husband,” Ahrendts said.  “ [Burberry’s success over the last six years] will not be my legacy.  As a CEO, I will be forgotten in five years time, but my husband and my children will never forget me.”

Her key pointers in maintaining her work-life balance?  “Sleep is a luxury” and “keep your priorities straight.”  Sound familiar?

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