When Josephine Esther Lauder first began selling her cosmetics in New York in 1946, she carried only four products: Crème Pack, Cleansing Oil, Super-Rich All Purpose Crème and Skin Lotion. Fast-forward almost 70 years and the company that still bears her name (well, a variant on her nickname Esty) has grown that number more than she ever could have imagined. The cosmetics giant is now home to 30 brands, sold in over 150 countries. With record 2013 sales of more than $10 billion, things are certainly looking good for Estée Lauder.
There’s definitely a buzz about the British headquarters when HR magazine visits. The reception of the chic Georgian townhouse is full to bursting with immaculately made-up and coiffed sales reps, excitedly waiting for one of the several training sessions they receive every year.
With 8,500 staff, the UK and Ireland is one of Estée Lauder’s largest and most mature markets. And responsible for those 8,500 people is group HR director Martin Brook.
From diversity to inclusion
Brook is in the minority among Estée Lauder’s executives, as 60% of the UK leadership team are female (although he still assures me he makes good use of the company’s products). While it might be easier for a beauty company to attract women than, say, an organisation in the oil and gas industry, Brook is still proud of the fact women dominate senior positions. But for him, and the company, diversity is much wider than gender.
“Everyone thinks diversity is only gender, age, or ethnicity, but it’s so much more than that,” he says. “Diversity is like an iceberg – you have all that stuff you can see on top, but there’s all this other stuff underneath, like background, learning styles or your approach to working with people.”
To maximise “all this other stuff”, which Brook is clear gives Estée Lauder a competitive advantage and drives creativity and innovation, the organisation takes a strengths-based approach to HR. Recruitment is strengths-based rather than competency-based, with managers given training in how to avoid recruiting in their own image.
Performance management is also based on the strengths of the individual, with the idea that everyone is a leader –employees are told they can “lead from every chair”. When setting up project teams or thinking about secondments and other career opportunities (Estée Lauder UK has a 68% internal promotion rate), the HR team is sure to calibrate the different strengths of candidates to put together the perfect, diverse team.
“If you focus on people’s strengths, you can make them great,” believes Brook. That could explain why 20% of the executive leadership team have worked their way up from the counter, improving social diversity. “If you show the passion, drive and enthusiasm, we will equip you with the skills and move you across the organisation,” he adds. “After all, if you’re going to drive the best creativity and innovation, you have to have the most diverse workforce.”
Ideas from everywhere
A couple of years ago, the company set up 28 task forces, each deliberately made up of people from different brands, functions and levels, with different learning styles and strengths. Each group was given an area of the business to focus on. “We made the brief very wide, gave them an objective and let them go,” recalls Brook. “Some absolutely amazing ideas came through, around counter technology and how to appeal to consumers – the best business ideas come from the people on the shop floor. The ideas really helped us form our UK strategy and it was an inclusive, bottom-up approach.”
Other ways to foster an inclusive environment include the roll-out of reverse mentoring schemes, which can often help to give younger employees more of a say, as well as upskilling experienced leaders. Brook himself is being mentored by a Millennial employee, who is teaching him the finer points of social media. “It’s great for helping me form a strategy around using social media tools to recruit, retain and engage,” he says.
While more traditional creativity is important, there’s a huge amount of science behind innovation in the beauty industry – just look at the list of ingredients in every new ‘wonder product’. So it’s only appropriate that Brook approaches HR with the same rigour.
Take recruitment, for example. Every year, the careers website receives over 3 million hits. To make sure the company is hiring the right talent for each brand, Estée Lauder has worked with psychologists to discover what makes its current top performers stand out. It can then look for these characteristics in new hires, using situational judgement assessment and psychometric testing. However, Brook is also keen to emphasise that “Estée Lauder is all about high touch”, with personality and passion for the brands remaining absolutely critical.
With nearly half a billion customers around the world, it’s not surprising the organisation also has plenty of expertise in consumer insights. Taking advantage of this, Brook’s HR function partners closely with marketing and consumer intelligence to make smarter use of analytics. “We look at things like: does our workforce on the counter correspond with the consumer who shops in that area?” he explains. “We look at the recruitment journey: if people are looking at the site but not applying, why is that? We also go into a lot of detail about why people leave; that helps us to make better business decisions.”
As such, Brook has had to upskill his 29-strong HR team to really understand how to get the most from data, and with new recruits, he’s looking for the numerically savvy. “HR has to get a lot better at mining data to make more informed business decisions. It’s critically important going forward,” he says.
“However, we shouldn’t lose sight of the more traditional HR, where employees can come to us and feel they are being listened to,” he continues. “That goes a massively long way in terms of engagement and retention. In future, I think we’ll see more merging of IT, finance and HR, using science to drive the performance of people – but it’s about getting the right balance.”
He does hope that improved data will help the HR function provide “proactive and pragmatic” solutions for business leaders. “You’ve got to be at the front helping with decision-making, understanding the business and being proactive, rather than ‘sweeping up’ and being reactive,” he says.
Brook’s career history has given him a clear commercial nous. After leaving university, he set up his own business with a friend, giving HR and employment law advice to SMEs, after spotting a gap in the market. He has since worked in HR roles across retail, manufacturing and supply chain.
“We in HR have to get better at selling the benefits [of a career in HR] to talent,” he believes. “We should try and bring in more people from outside. But it should also go the other way: there’s no reason why HR people can’t go out into a different business function and come back. I’ve done that, and I’ve learned a lot.”
Learning is evidently a big deal at Estée Lauder. When it moves head offices next year, two floors will be dedicated to state-of-the-art training academies. To encourage a culture of continuous learning, a proportion of staff bonuses is based on taking up development opportunities and meeting development goals.
Brook is very clear where both he and the wider organisation stand on investing in people: “Leonard Lauder [chairman emeritus and former CEO], said: ‘You can judge the wealth of a company by the quality of its people.” And it appears Estée Lauder is determined to be very wealthy indeed.