Transcript
Burberry & Apple’s Angela Ahrendts — How to unite a team
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I realise that I had to do it my way. and they brought me in to do it my way. I was told very early on we don't do videos. Like excuse me, it's like a YouTube world.
No videos. Period. That's Angela Ernest. And she's telling a story from her first months. As Apple's head of retail.
It'd been a couple of months and somebody came up to me and said We think you should send an email out to, you know, all seventy thousand employees, and if you give it to us by Friday, we'll translate it into thirty six l I'm like I like picture my three teens in these stores and they don't read email. And No, that's not gonna work. I said I'm gonna do a video.
We don't do videos. I'm going to do a video. We don't do videos. I said I'm going to do a video and I don't want a studio and I don't want hair and makeup. We have a phone. I'm gonna do it like my kids do YouTube videos. It's gonna be three thoughts.
In three minutes or less No editing. Nothing. So Angela recorded her first video memo to Apple employees from her desk. Using an iPhone.
I just said Hi. And I'm sorry I haven't reached out before. But we're gonna do these videos. I'm gonna talk to you once a week, three thoughts in three minutes or less.
Because I want you to be aware of what our plan is, where we're going. I want us to connect. I want you to trust me. I just was very open and honest. As Angela was speaking. Something happened. One minute in my phone rings. I look down and it's it's my baby, it's my my daughter.
And I said, Don't stop. I said, Excuse me, I picked it up and I said, Angelina, mommy, I'll call you back and like Two minutes. Laid it down and just kept going. And so of course they want to edit it. Apple's gotta be perfect. And I said, Not in this world. It does not have to be perfect.
They have to see that I am autent. They also have to see that I put my kids first. And the next day I must have gotten Five hundred emails. people thanking me for taking my daughter's call.
Angela taking a quick phone call from her daughter. That set the stage for what you really Wanted to communicate. I'm not a king or a queen or a dictator. I'm here to do my life's greatest work. Will you help me? Can we do it together?
Angela knew she needed to connect with every employee in every store. At a human level in order. To transform the business. Even at an iconic company like Apple. The icon alone.
Won't do the work for you. Whether your staff is seventy thousand. Or only seven. A leader. Has to get everyone pulling.
In the same direction. That's why I believe it takes more than a logo. To rally the troops. You need an elevated mission.
And Everyday human contact. To unite a team. You gotta have incredible talent at every position. Huge push. There are fires burning when you're going out. Such an idiot. And then you go back to this is totally gonna be amazing. There are so many easy ways. I have no idea what to do. Sorry, we made a mistake. But you have to time it right. Oops.
Not all ten years later and be like, well that's just how you do it. We haven't made it just how you do it. This is masters of scale. I'm Reed Hoffman, co founder of LinkedIn, partner at Graylock. And your host.
And I believe it takes more than a logo. To rally the troops. You need an elevated mission. And Everyday human contact.
To unite a team. Quick. What do you think of when I say the words? Red, white, and blue. A lot of you.
Statistically speaking, probably said the United States. But we have a global audience here at Masters of Scale, and forty five percent of you may have named The United Kingdom. Australia. The Netherlands.
twenty three countries with red, white, and blu flags. A few of you may have even said Cartive City. Football club. They're red, white, and blue too.
The colors themselves are meaningless without two things. The elevated messaging around what the flag represents and the people who stand beneath it. It's true of countries And companies too. Which makes me think. of the Apple store. The walls are glass, of course.
So you can see the gleaming products inside. And so you can see the team members. But iconic uniform. A Pacific Blue shirt.
Recently updated. From Navy Blue. Apple store employee shirts often change with the season. Prompting obsessive blog post. And sub discussions about what the change simbolizes.
Once a year. The entire store logo turns red for World AIDS Day. Every time the color changes. It delivers a single elegant message. to the team.
Something's different today. And we're all in it together. But rallying a team. takes more than just a logo or a color. It takes real work.
A lot of it. To imbue that color. And that logo. With meaning. I wanted to speak.
to Angela Ernest about this, because few executives have shown a greater talent for uniting global teams. As CEO of the British luxury brand Burberry She led an astounding turnaround. After years of flat sales and brand delusion. Before that, as an executive vice president at Liz Claiborne.
She handled dozens of successful acquisitions. But you may know her. For work with a different company. Of course, we're talking about Apple. as head of retail and online sales and
Angela reimagined the Apple store. From its inception, the Apple store had almost mythic status, and As a Mecca. For Apple super fans. But as Apple grew more and more popular,
Apple customers had grown too. The challenge. Maintain the iconic magic of Apple. While managing crowds that now include Just as many technological late bloomers as
As obsessive early adopters. To pull that off would require a new vision. Пронов суперіш. Of all time. But it also required
Every day. Hands on coordination. Among retail teams separated by languages. Time zones and geography. In the special
Two part episode. We'll be talking with Angela about what it takes to turn a far flung team into a mission driven family. And our story starts in her family's hometown. A town.
With a population One tenth. The number of daily visitors To a single Apple flagship store.
I uh grew up in a tiny, tiny town, New Palestine, Indiana. One of six kids and I'm in the middle if you can be in the middle of six. couple of miles away was the largest orphanage in the state and the school bus would go by it and it hurt me. you know, looking out the window at holidays or going to ball games. My imagination would go crazy and I felt so sad. I had such an amazing tight knit loving family, and I was felt so sorry for all the individuals who had nobody.
As Angela watched the orphanage from the window of her school bus. An idea struck her. Her tight knit family Wasn't the norm. It was the exception.
And she started to notice all the things her parents did. To unite the family. I learned from my parents. Celebrate. Just celebrate. My parents celebrated everything. You know, my dad was an only child. My mom grew up in an orphanage, ironically. And so they celebrated every holiday. So I learned the power of celebrating. What Angela came to realize was that celebrating every holiday as a family is
Is a choice. One that united her family. In a family of eight, It's easy to let the little wind get lost in the shuffle. Every birthday party, every special dinner.
In honor of someone straight A's. Those are deliberate choices that commemorate success and reinforce. This is who we are as a family. This is what we value.
It's a principle. That would stay with Angela. Achievements deserve celebrating. And not just the big ones. but also the little wind along the way.
Angela followed her older sister. to Ball State University. She was drawn to fashion. and thought she'd become a designer. Until she encountered a teacher.
Who changed the course of our life. Very early on, I had a teacher That told me point blank that I actually wasn't that creative, but I had a very strong opinion on what everybody else was doing. So she said, We call you a merchant And and that actually was great for me year one because it helped guide me. And it was interesting because merchandising uses my right brain and marketing uses my left brain. But again, I didn't know all of this. I didn't understand who I was. I didn't understand back then that I was half right brain and half left brain. I didn't even know what it meant. This notion.
Of being Half left brain. and half right brain is something Angela talks about a lot. This ability to toggle between the analytic and the creative is a guiding force in her professional career. But it took time to balance her logical and intuitive sides into a unified identity as a leader.
That would only come after finding a series of role models with very different leadership styles. who rally their teams in different ways. There was Linda Walkner. CO The clothing manufacturer.
Warnaco. She kinda took me under her wings, and at a really, really young age, I'm in big meetings with CEOs, and she was about as left brain. She was a finance wizard. And I really felt Like an idiot around her half the time. I would pull all nighters to prepare for meetings so that I could understand what she was saying and keep up. Then there was Donna Caron.
Angela spent half a decade as president of her firm. Donna Karen. is the epitome of right brain. We're going to Corsicomo to the fabric shows with Donna, you had to be on your product and your merchant game and and with Linda, you had to be on your business and strategic game. Each of these strong COs taught Angela. How to lead with an elevated mission and to know our own strengths.
Another leader. Paul Sharon. gave Angela the final piece of her leadership puzzle. Oh. was chairman and CO of the multi billion dollar clothing label
Liz Claiborne. When Angela was executive vice president. I would watch him Address huge groups and his charisma, and that was actually almost icing on the cake. More than anyone she'd worked for.
Paul had the ability to connect. And not just from the stage. Paul would stop by my office seven, eight o'clock at night sometimes, and he'd lean in and he'd say I have no idea what you do. But keep on doing it.
It sounds like an offhand comment. But it's stuck. In Angela's mind because it captures Paul's gift. For connecting human to human. I actually see something else in that story.
I see a leader who knows how to appreciate people. who are different from him. And this. is essential. For example.
One thing I've learned about myself as a leader is that my strength is creative problem solving. I'm far less good at making the proverbial trains run on time. So as a leader The best thing I can do is to elevate someone to leadership who compliments my skills.
With theirs. Angela and Paul made a great team at Liz Claiborne. What we started to do is acquire businesses. So we would buy juicy couture and take it from, you know, fifty million and write a billion dollar business plan. And I related to those creative founders. The finance guys would look at the numbers. but I believed in their vision and their products and what they were doing.
I think Paul and even myself had this natural connection with these creatives. I think it was all of those acquisitions at Liz that really helped that corporation understand. The brilliance of a founder, right? So many private equity, so many companies go in and they buy these companies and they think the founders are stupid because they don't talk the same language. They don't understand who they are. My job was to keep those founders in situ and protect them and let them dream and Right.
Angela is right, and I want to spend a moment on why. Angela looks at acquisitions as an exercise in team building. Acquisitions aren't always treated this way, but they should be. It's like making a hire. The point of an acquisition is to say
We love what you do. We think it's important. Your mission will add to ours. It's really self defeating. To take on a new team. Only to tell them.
Forget what made you special. Do it our way. It's on you to see how the acquisition contributes to your elevated mission, and then unite this new team. Under it. And that turns out to be one of Angela's superpowers.
And was there anything in particular you learned about how to do this kinda acquisition? Well This might sound odd, but probably the foundation or the basis of any great relationship, be it business or personal. Is
Looking somebody in the eyes. And truly hearing them. Mm. Right? Not thinking of the next question, not truly hearing them, feeling them, like human to human, connecting with them. And building this incredible trust.
Angela understood the value in this human to human connection. And leveraged it to build trust. With trust. Came smoother acquisitions. and a more united team.
It was this ability. that caught the eye. Of the London legacy brand. Burberry. After seven years at Liz Claiborne.
She got the call. So then the Call. From Burberry comes in. Yeah, kind of.
Stayed. quiet, maybe even decaying. You know, kind of British brand that calls you and says, Hey, uh we think you might be the right one for us. One I was almost taken aback because I had had a conversation about a week earlier with there was another woman we were both EVPs of the company, and she said, You know, you've been here for a while now and I fear that you're gonna go someday. Like, you know, why would you ever leave here? Like what would it take Just off the top of my head, just
Very spontaneously I said I love luxury. It would be so intuitive to be in luxury someday. I would love to be in more of a direct to consumer business, and I would love to be so much more global because my businesses were very domestic. And I just Throw that out there.
And the cosmos works in really weird ways, so a week later I get this phone call. And my immediate instincts are like No thank you. But as I thought about it, I thought It is exactly what I had said.
It was a serendipitous offer. But Angela turned it down. So I am Loyal. And I refuse to break anybody's trust.
We have a really great meeting, but they call up later and like, I can't. Like, no, thank you. I just can't, right? Now I feel like I've cheated on my husband. Like I can't. But the more calls Angela fielded about the position, the The more intriguing it started to sound. Burberry. as a brand had gone through a decade of oversaturation in the public eye.
And that was a challenge. Angela thought she could tackle. She talked it through with Burberry's lead designer. Christopher Bailey.
A colleague from years past. I met with Christopher and we had not reconnected since our Donna Karen days. There's about a tenure age difference, but I had always admired and respected him and he had been brought in about a year or so earlier. And so we really reconnected and we actually put the strategy together on the back of a napkin. I mean, we ve we our minds were going a hundred miles an hour. So that was an incredible sign that I've never done this before. He had never done what we were dreaming of doing, but wow to have a partner like that. Did either of you keep the napkin?
Yeah. We didn't. And I wish we would have. Angela didn't keep the napkin. But she did take the job as CEO of Burberry. When you've built substantial wealth through your business, it's often tied up in a single equity position.
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When we last left her. Angela was joyfully mapping Burberry's new mission on a napkin with designer Christopher Bailey. But when she first arrived at Burberry as CO, she found herself in charge of eleven thousand people. who are not necessarily on board. The company was in turnaround.
Trying to reclaim and elevate a brand name. that had gone plebeian. She and Christopher agreed. They needed to rescue. Burberry signature pattern.
A bay Scottish tartan. Run through with black and white intersecting stripes and a filament of red. Angela calls it. The check. One of the first things we said was um the Czech had been hijacked in England.
Mm. And had almost become ubiquitous. Even for the fashion challenged among you, It's very probable you've already encountered the Berberry check. The pattern itself dates back to the late nineteen tens.
When Burberry would use it to line. It's overcoats. I even recall Having one of these coats myself when I was a student at Oxford. But in recent years it had spread to the masses.
Not just through counterfeits. But through over licensing of the pattern. The Burberry Check. Was drifting. From the luxury brands.
One hundred and fifty year old roots. We had decided then that we really needed to Clean it up. Elevated. make it more innovative. We had also decided that we would do everything in our power to reinforce the Britishness of the company. Um we felt that had been lost as it had gotten global over the years. And we sat there and he was like, you know, British models, British music, you know, the greet at the store. We decided then on the trench coat how we were gonna just
drive that and and innovate that Part of establishing an elevated mission is determining the one factor. From which all other factors flow. A bit like an eigenvalue in math and engineering. In this case.
The eigenvalue is Britishness. So Angela's job would be to tie every subsequent decision Back to this one.
From the models. To the music playing in their stores. This kind of laser focus is key in a turnaround. But Angela knew they also needed something. Aspirational.
Something that elevates. The work of each employee. From the transactional To the purposeful. She added a critical new element.
To Burberry's brand. Social impact. But the most important thing we said was We decided then we were gonna create the Burberry Foundation because it was nothing like that. And we said we will have known that we did a really great job.
If in the future when someone bought check they knew that it was more important than just what they bought, that it had a deeper meaning. The Burberry Foundation took proceeds from every sale. To support social causes. And with that.
Angela found a guiding mission that could inspire the entire team. Invigorate the brand. And Invite the customer. To buy in as well.
Forget red, white, and blue. Unite Under the beige in black. But once again. It's not enough to fly a Berber Tartan flag.
You also need human Face to face engagement with your team. And if the team building mantras so far have felt a little warm and fuzzy. For your taste. Get ready.
That's about to change. Because Angela still faced a tricky turnaround. She needed to get. Every employee. On board with a new company vision.
And that's would take some face to face conversations. Maybe six months in. We had a huge offsite and we had two hundred of the top executives from around the world be flew in. And I'm a pretty good read of people. My right brain kicks in and I'm just watching and this is two or three days, and at the very end I got up.
And I said, look, this is the strategy. This is what we're doing. And I know some of you are skeptical, and I know you've been here for a long time. And I know the way you think you're doing it in Hong Kong or Korea is the best. But it's not. We won't win. We're not winning now. And you're not right. And I said, So I am happy to meet with you. After this meeting and give you the greatest retirement package. Right. I'm not looking to hurt anybody, but you need to walk out of here one hundred percent believing in everything we're doing, or I don't want you on the team and I will take care of you, right? But we can't afford it. We have no time. Yes.
And did anyone take you up on that? Um Yeah. They did. Uhhuh. And if they didn't, I could tell by the body language in the room and I went back to them. Yes, and said wait. And said, Look, I this is you know, I know you're not on board. This isn't gonna work. Angela's approach here.
It's tough. And it's exactly right. Too many leaders avoid difficult conversations, and this puts their work In danger. Especially in a turnaround.
People want. The vibrancy and clarity. People want to be clear on who you are as a company and what you've been put here to do. If you don't get
All your employees united and all in on the mission. The turnaround. won't achieve lift off. I tell everybody now that when you go into a new and especially a turnaround, you have to have a such a clear, bold vision. Yeah, and you can't have I I called it cancer. You cannot have cancer eating away at different parts of the organization. You need everybody. You need that body just you know, every part of it functioning if you want high performance. And literally six months after that meeting.
We started comping up double digits from that September onward. And then that gives them more confidence. We talked a lot about quick wins and Exactly. That's a classic turnaround thing is. Get some wins as soon as you can. So people go, Okay, we're on path. This could work. Yeah. Let's dedicate ourselves. Let's really make it happen. We want to be part of the heroes. Yes. Making this work. Quick wins.
They're great for morale. And great. For uniting your team. behind the goals that serve the mission. Every employee
knows the difference between big bold ideas And big fat results. And when Burberry Stores started Double digit growth. And their same store sales.
They knew. That Angela's vision wasn't just talk. Once she got those wins on the board, she did what her parents taught her to do and She celebrated. We had Icon awards, we had service awards, and that actually forced Christopher and I around the world for all those different awards where we could get hundreds together and celebrate and photograph and share.
Angela shared the story of one particularly memorable awards night. We had a huge theater area at at Burbury that we'd created and we celebrated a lot in there. And one day Christopher and I had been on stage. And hundreds, hundreds, standing room only of and I don't even remember exactly what we were there for, but we were celebrating something and it went so great. We're high fiving and hugging and we go off the stage and we both go down the side corridor to go into the elevator bank. So he opens the door and I walk in.
And we're in the closet. We are in the closet. And he looks at me and I look at him and it's like, oh my God, now what do we do? Did we actually just stand here for an hour until everybody leaves? So we walked out and we laughed like hell and we, you know, then got into the elevator. I mean we laughed about that for years. These awards were a big driver of the culture of celebration and unity.
Especially When the bosses end up making a really human mistake. It's hard to overstate. How much more familial a company can seem Hard work, сексе.
and the occasional gaff. Or acknowledged. On a day to day. human level. My job, and I have felt this way as I've been put into very responsible leadership positions, is to make sure that it's a family.
A community, everybody belongs, everybody is welcome and loved. And I I use words a lot of leaders maybe don't use, but I would argue at Burberry, everybody felt loved. Eleven thousand, and that's why we achieved the results that we did. They also celebrated Honoring. Departmental achievements.
the kind Angela mentioned at the top of the show. The kind of She would one day push an apple. The videos themselves were a project. The employees collaborated on together.
But as much as making those videos fostered cohesion And a sense of pride. Angela also wanted the footage for another reason. As I would meet with analyst and investors. I'd make'em watch the video.
First, because I knew they weren't going out to the stores. I knew they weren't following all of the other stuff we were doing. All they cared about was the numbers. And it's like, no. I'm here, you're gonna watch this video, you're gonna feel what we're doing because it is a feeling when you're leading and you're Uniting people behind this vision, et cetera. And It gets so lost, I think, sometimes. Yes it does.
And Angela was right to get the analysts and investors. Well Invested in the whole Of what Berberry stood for. Angel remembered this. When once again she was wooed away from the Berbery check.
Two A different iconic logo. So then you get a call from Apple. Mm. And that must have been very tricky, even though Apple is obviously
Mm-hmm. Uh Iconic, magical. Yeah. Yeah, no, and of course it always comes from the search firm and so it's so easy to say no.
And I said I'm honored Absolutely honored to be considered, but I have the greatest job in the world and we just bought our beauty business back. We just told the board we're gonna double the business again in the next five years and I'm on a mission and I'm you know, we're gonna be number one in the luxury sector. So so No thank you. Angela's bid to lead the luxury sector was already well underway.
In the eight years since Angela joined Burberry, the stock price had risen two hundred percent. Revenues and operating income had both Doubled. The change was so dramatic, Angela herself became by some estimations the highest paid executive in Britain. She turned Apple down.
The first time. So of course then I get the phone call again and and I said, Look, it's like only been six months and I'm nothing has changed. If I had a senior team, I mean we just could do no wrong. And it's magical. And go back to what I said at the very beginning, I'm loyal to a fault. There is no reason for me to have a conversation. And oh, by the way, I have two kids in university in London, right? And a husband who thinks we're living there the rest of our life. So
Leave me alone. Yes. Again, lovely meeting with him. Thank you, but no thank you. It was quite easy. It was easy for Angela to say no to Even to Apple. Until
Of course. It wasn't. Why is it when your life is perfect that somebody wants to flip it upside down? Well, because they see that perfect and they go, That's awesome. And then I don't know, it was like one Christmas or something, and then I I get a phone call. So you're gonna be back in the States. Would you just have a cup of coffee with Tim? I'm like Really? I thought you don't want to be disrespectful. And you don't want to be arrogant. You don't want to you know, he's
Like the biggest CEO in the world. And so so I said, Fine, I'll have a cup of coffee. What Angela would find in Apple CEO, Tim Cook, was the exact quality we've been talking about in a leader. Someone with the ability. To project a grand vision. While making you feel like you're the only person in the room.
But as persuasive as Tim Cook was face to face, she turned him down. A bunch of times. I told him, I said, I I'm trust me, I'm not the right person. You don't know me. I'm instinctive, I'm creative, I you know. I'm not a store operator. You know, he's so calm. He said, You know
We run the most productive stores in the world. I I think we've got a lot of good operators and you know. I said, but I'm not a techie either. I I don't code. I don't I know enough questions to ask to be dangerous and I know enough to get the teams to go where I want'em to go, but I'm not, you know. Very calmly. We'll we have enough of those and And so only after a while did I realize that it was really leadership that he was looking for. He wanted the teams to be very united again.
In this moment. Tim Cook knew incredibly well the importance of uniting his retail team under a leader who knew how to do just that. And he also knew how to play to Angela's sense of mission. He had a great precedent to follow. Legendarily, when Steve Jobs
first recruited Pepsi president John Scully to become CO of Apple He posed a question. Do you want to sell sugar water for the rest of your life? Or come with me and change the world. But this wasn't a typical CEO pitch.
Angela wasn't even interviewing to be CEO. Not everyone. Is willing to take what might seem like a step backwards in title. So Tim. appealed to her sense of the larger mission.
What happened next? Apple is in many ways a Amazing company, inventive, uh, soulful, caring. What was those first few months Like for you. I hated it. Yes.
Yes. We'll pick that story up in part two of our interview with Angela Erends. I'm Reed Hoffman. Thanks for listening. Hey listeners, Bob here. If you listen to Rapid Response on Masters of Scale, you may be missing half the show.
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