The parallels between Angela Ahrendts tenure at Burberry and Steve Jobs' return to Apple
The more I read about Angela Ahrendts, Apple's new retail hire, the more it becomes clear that she will be a valued and effective addition to Apple's executive team. What's more, Ahrendts views on retail and the consumer experience seem to align quite well with Apple's unique culture. This is not a point to be overlooked given that executives who don't mesh well with Apple's culture don't typically last long; the departures of Mark Papermaster of IBM and John Browett of Dixons come to mind.
Coming from Burberry, Ahrendts understand the world of retail luxury, a niche Apple operates and owns with unparalleled efficiency. On a broader level, Ahrendts shares Apple's view that to create a truly compelling products and a profoundly satisfying user experience, control is paramount.
ObamaPacman last Thursday tipped us off to a worthwhile article penned by Ahrendts in an early 2013 issue of the Harvard Business Review. The article details Ahrendts early days at Burberry and how she was able to turn an "aging British icon into a global luxury brand."
Overall, the way Ahrendts was able to turn around a then slumping Burberry parallels in many ways Steve Jobs resurrection of Apple following his return. Further, the business philosophy underlying many of her decisions also aligns rather nicely with Apple's own.
A few excerpts in particular stand out.
When I became the CEO of Burberry, in July 2006, luxury was one of the fastest-growing sectors in the world. With its rich history, centered on trench coats that were recognized around the world, the Burberry brand should have had many advantages. But as I watched my top managers arrive for our first strategic planning meeting, something struck me right away. They had flown in from around the world to classic British weather, gray and damp, but not one of these more than 60 people was wearing a Burberry trench coat. I doubt that many of them even owned one. If our top people weren't buying our products, despite the great discount they could get, how could we expect customers to pay full price for them?
Sound familiar? Recall that Apple executives, and Steve Jobs in particular, stated on numerous occasions that Apple only creates products that they themselves would want to use.
It was a sign of the challenges we faced. Even in a burgeoning global market, Burberry was growing at only 2% a year. The company had an excellent foundation, but it had lost its focus in the process of global expansion. We had 23 licensees around the world, each doing something different. We were selling products such as dog cover-ups and leashes. One of our highest-profile stores, on Bond Street in London, had a whole section of kilts. There's nothing wrong with any of those products individually, but together they added up to just a lot of stuff-something for everybody, but not much of it exclusive or compelling.
Again, we see a parallel to Steve Jobs' return to Apple and the epic company transformation that followed. Recall that Jobs, upon returning to Apple, was dumbfounded by Apple's extensive and somewhat confusing product lineup. Jobs even remarked once that if he couldn't figure out the difference between the myriad of products Apple was selling, how could he expect consumers to?
Driving the point home, take a look at this timeline of released Apple products from 1995 and 1996.
So without missing a beat, Jobs proceeded to simplify Apple's product lineup, declaring that Apple just needed to focus on four areas; desktops for either professionals or consumers, and laptops for either professionals or consumers.
Like Ahrendts at Burberry, Jobs recognized that spreading yourself too thin resulted in products that were neither "exclusive or compelling."
In describing one of the challenges Burberry faced in 1996, Ahrendts explains that she was up against some stiff competition from the likes of companies like Louis Vuitton.
We wanted a share of the disposable income of the world's most elite buyers-and to win it, we'd have to fight for prime real estate in the world's most rapidly growing consumer markets. In many ways, it felt like a David-and-Goliath battle.
In a similar vein, Apple has never been blindly motivated by marketshare. On the contrary, Apple attracts the premium end of the markets it enters, one of the reasons Apple controls the lion's share of the profits in the smartphone industry.
The parallels don't end there.
Upon assuming the helm at Burberry, Ahrendts immediately set her sights on gauging the state of the Burberry brand. What she found was was a disjointed operation, with licensees across the globe making the same products with varying levels of quality.
Her solution? A design superstar capable of re-establishing the unique luxury of Burberry's product line.
Great global brands don't have people all over the world designing and producing all kinds of stuff. It became quite clear that if Burberry was going to be a great, pure, global luxury brand, we had to have one global design director. We had an incredible young designer named Christopher Bailey, with whom I'd worked at Donna Karan and who I knew was a sensational talent. So I introduced him early on as the "brand czar." I told the team, "Anything that the consumer sees-anywhere in the world-will go through his office. No exceptions."
At this point, the parallel game might be getting old, but note the similarity to Jobs bestowing similar responsibility upon a then relatively unknown designer named Jony Ive.
At Apple, Ahrendts will not be tasked with turning Apple around. On the contrary, Apple is a well oiled machine that doesn't need any saving. Instead, she will be tasked with expanding and enhancing.
To that end, Ahrendts piece in the Harvard Business Review illustrates a retail philosophy that, once again, mimics Apple's own.
To strengthen our retail operation, we decided to focus on markets where our competitors already had a presence, signaling the right kind of consumers to support a luxury brand. As our first blueprint for expansion, we identified every market in the world where two of our peers had stores and we had none. In the past six years we've opened 132 new stores, and we've refocused our retailing staff on outerwear....
We established strong sales and service programs to put product education front and center. We created videos to demonstrate Burberry craftsmanship: All the collars are hand-rolled and hand-stitched. We equipped our sales associates with iPads and our stores with audiovisual technology to show these videos to best effect.
Ahrendts entire article almost reads like a case study on Apple, albeit with the company name changed to Burberry.
Ahrendts has a lot of experience in advertising to and attracting luxury customers. She understands the importance of digital marketing and the impact that media such as music and "storytelling" can have on the consumer. She understands what it takes to successfully market expensive items when cheap alternatives are plentiful. From Ahrendts point of view, it's not just about the product, it's about the entire experience. It's about what the consumer sees and feels upon walking into a retail store. It's about the quality of the craftsmanship that goes into the products. It's about hiring passionate people who are knowledgeable about the products they're selling.
Furthermore, Ahrendts, like Apple, appreciates the importance of controlling the entire widget so to speak. In a profile on her in the Guardian, Ahrendts explained that "if you can't control everything, you can't control anything, not really."
Taken together, Ahrendts seems like the perfect fit for Apple. When John Browett was initially hired by Apple, the move was greeted with skepticism from those who were familiar with Dixons, a retail store that many pointed out sold cheap electronics in storefronts that were often disorganized. To that end, Browett himself noted that he never quite "fit" in at Apple.
All of the information that's come to light about Ahrendts seems to indicate that she will not have that problem. Again, Apple retail stores don't need saving. Rather, they need someone capable of enhancing them, expanding them, pushing into new markets and keeping them fun, hip, and educational places for consumers to come visit and shop.
Her history at Burberry strongly she suggests that she is just the person for the job.
The more I read about Angela Ahrendts, Apple's new retail hire, the more it becomes clear that she will be a valued and effective...
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