The Company I Keep: How Leonard Lauder Built Estée Lauder

ESTÉE LAUDER founded what would become the Estée Lauder Corporation in 1933 on the conviction that “every woman can be beautiful.” Her ambition was to have a life filled with beautiful things, and that “rested entirely on her ability to sell her skincare products.”

The first five chapters of The Company I Keep: My Life in Beauty are a must-read for any entrepreneur. Her son, Leonard, details the tenacity, business acumen, salesmanship, and mindset of a superstar businesswoman. Her Uncle John developed a face cream, and she began demonstrating it in high school. She wrote, “Deep inside, I knew I had found something that mattered much more than popularity. My future was being written in a jar of cream. My moment had come and I was not about to miss seizing it.”

She pioneered the “sales technique of the century:” the free sample. No woman would ever leave empty-handed. Estée Lauder was built on the free sample.

She also personally trained the saleswomen at the counter.

My mother didn’t realize it at the time, but her insistence on personally training saleswomen would be a key differentiator when she eventually opened counters in department stores. Other brands used saleswomen to merely sell products; thanks to my mother’s training program, her salespeople taught customers how to use her products to look their best.

Her hands-on approach—what her father had dismissed as “fiddling with other people’s faces” —was a charm. “Touch your customer and you’re halfway there,” she would preach.

And she was a tenacious saleswoman even following New Yorkers who headed south to winter in Miami—staying for months.

My mother stopped at nothing in order to inform every woman about her products so that she would tell more women. No one escaped. She stopped strangers on the street and on trains to give them beauty tips. She famously interrupted a Salvation Army sister’s bell-ringing to explain how she could make her skin look and feel fresher. “There’s no excuse for looking untidy,” she admonished. An acquaintance from those years remembered how my mother would approach someone she had never met before, evaluate her makeup, and proceed to tell her how to correct it. “She would end up selling her $40 worth of Cosmetics.”

Leonard learned many lessons watching his mother, and his quest for excellence served him well during his time in the Navy. One of the greatest lessons he learned there was, “No matter how smart you think you are, there’s always someone who’s smarter. No matter how good you are, there’s always someone better. I would search out and hire exactly those people.” This belief, he says, would help play an enormous role in the growth Estée Lauder. And if he had to fire someone, he took responsibility. “Everyone has worth. The fact that we have no been able to take advantage of your skills is not your fault. It’s our fault.”

He wanted to build Estée Lauder into the General Motors of the beauty business, “with multiple brands, multiple product lines, and multidimensional distribution.”

The book is full of great lessons and the stories behind them. Here are some I pulled out.

Positioning is the product.

Launch at the top and stay at the top. If you launch into the heart of the market, there’s always someone who will sell a similar product cheaper than you, and you have no way to go but down in what becomes a race to the bottom.

Having everyone know that they had to be good at their job and a good person to succeed made all the difference in the world.

Every brand president needs the opposite skill set in their number two. That’s what makes a great team.

Don’t fall into the trap of “How do we compare to others?” as opposed to “This is who we are.”

When you criticize, do it verbally. Never put it in writing. If you put criticism in writing, the person will read it again and again and again and get angry and stay angry. Conversely, if you put praise in writing, they will read it again and again and again and feel good about you.

Don’t hire your best friends, and don’t hire your former classmates. Friendship is friendship, but business is business.

It is very easy for established companies to get stuck in the trap of “this is who we are,” rather than follow the path opened by “this is who we must be.”

Act like an owner to get people to think like an owner. Ownership doesn’t come from the shares of stock that you have. It comes from the responsibility you feel for your company and your colleagues.

Our director of creative services, June Leaman, often said, “One idea is a great idea. Two ideas are less effective. Three ideas are ineffective.” I never relied on a committee for a final decision. Committees are the death of creativity and productivity.

Make tactical mistakes, not strategic ones. A tactical mistake is one that, if you make it today, will only cost you today. A strategic mistake is one that, if you make it today, will cost you tomorrow—and tomorrow and tomorrow.

Listening for, summarizing, and articulating a shared perspective was the first step in making progress. It’s easier to get things done if you start with a “yes” than if you start with a “no.”

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Posted by Michael McKinney at 02:12 PM
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