ALLESANDRO MAKES IT HAPPEN AT A (181) YEAR OLD FIRM!! – #29
When Allesandro Bogliolo became CEO in 2017 and replaced his predecessor who was in the job for only 22 months and simply could not meet activist investors time schedule of modernizing more quickly, a need made urgent by a streak of disappointing sales results that ended last year.
You won’t find any innovative strategies, just very basic block and tackle Management techniques that could be implemented quickly and be measured in terms of increased revenues and profitability – in other words – Allessandro held himself and the Managers accountable for results. One can only imagine what the previous group of Managers used as an excuse for missing vital factor measurements. One thing is very obvious, Allesandro changed the culture and reawakened Tiffany’s a company that had been in business for 181 years and had caution set into its culture. This made them outdated, and had them holding on to their heritage for dear life in a rapidly changing world. Tiffany’s revenues come from decades old collections by Elsa Peretti ( which alone generate 9% of revenues) and Paloma Picasso. The very Customers who were buying these older collections were dying off, and the more recent generations don’ know or care about Elsa and Paloma.
Yet Tiffany’s just kept on marketing “their best seller” its classic name-sake “engagement ring” with a six-prong setting, introduced in 1886. The signals indicating the need for change had been there, but as in most cases of cautionary planning and “The Old is Forever New”, the brand was strong enough to carry the business and the incompetency of Management for years. For Tiffany’s the strong brand finally started to fade which was translated to disappointing and declining revenues/ profits. This condition changed when Allesandro joined Tiffany’s and brought a new outlook honed at firms such as Diesel, Sepharo and Bulgari. These companies accepted and reacted to change as a way of life. What did he do?
He looked at Tiffany’s product lines and compared them to present and future Customer demographics, tastes, economic impacts, styles and identified those factors that allows Tiffany’s to retain them. Once this information was established, he then proceeded to develop ideas and develop new products that would meet and exceed competitor’s strength’s and clearly aim at areas where weaknesses are evident. The sales of “engagement rings” are on the rise again after three years of decline. The idea for a new line – “Tiffany True” was born and represented the first new engagement products in a decade.
The ring features a new cut diamond, and its setting is designed so that the four link sides create a basket for the ring, allowing it to sit lower on the finger for a more modern feel. You don’t instantly notice the “T” due to the subtle not in your face design. In addition to the engagement ring, the “Tiffany True” collection has evolved into a total line consisting of items like a bracelet made of interwoven gold “T’s. Tiffany’s currently gets 21% of its revenues from “engagement rings”, and at a time when demographics are indicating declining marriage rates, it’s easy to see why Tiffany’s can’t afford to let this business stagnate.
Once Allesandro had the first meeting, he increased the tempo of the process – fast was the acceptable method to everyone – and the following were the steps put in place:
- He redesigned the “engagement rings” and capitalized on the well recognized “brand” – Tiffany’s as the anchor for the first new line in a decade – which gave present and future Customers a reason to visit Tffany’s.
- Allessandro know the need to surround yourself with “Eagles” inorder to soar. Such an “Eagle” was Reed Krakoff who came aboard as Chief Artistic Director – the man who helped turn Coach into an upscale handbag behemoth. Reed’s first collection was built on the foundation of the “T” collection – which now contains 130 new items – and has been a big success. The collection consists of flower petals made from diamonds and tanzanite held togetherwith a platinum pin. This man is a promoter and used a big party to launch and promote the line. He even designed a $1000 can and a $165 pizza cutter that caused people to view and laugh. Both items – while not jewelry – had specific reasons to be featured. The can was associated with Andy Warhol and was a strong indicator of craftsmanship, but most importantly it got people to talk about Tiffany’s again – the free publicity was overwhelming.
- How about the popularity of the new Blue Box Café on the 4th floor of Tiffany’s flagship store (which is getting a $250MM facelift –that will take three years). The Café represents one of Manhattan’s hardest bookings to land in a city with no shortage of high-end dining options. You can see why Allesandro knows how to follow and study successful people like Ralph Lauren and Jeff Bezos in seeking out innovations in other non-core activities and adopting them to gain maximum PR exposure of Tiffany’s activities.
- He ordered the Managers to never address subjects like – Tiffany’s being a dusty and uninventive company. He wants Managers to constantly mention that Tiffany’s was, is and will be daring as a key feature of its soul. To get an idea of daring, you only have to look at the founder Charles Lewis Tiffany who made his mark by buying a big chunk of France’s crown jewels and making baubles out of them for the Vanderbilts. He wants today’s managers to tap that spirit.
- Allesandro also embraced technology and increased the tempo of the culture while bringing inventiveness to the forefront. He closed. He consolidated design and engineering into one 17,000 sq.ft. space located down the street from Headquarters – this allows Allesandro to visit facilities often, which he does at least once a week. This facility features five 3-D printers that allow for faster prototyping and play a large role in the accelerated development process of the “True” collection.
Many solid Management concepts were covered in this Blog with Allesandro actually applying them to real-life situations. How many of these concepts can You be incorporating in Your growthas a Manager?