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Managing the Business of Fashion Corporate Transition
How fashion and luxury brands and employees can weather the seas of corporate change
Maybe even more than other types of organization, fashion and luxury brands need to invest in change management to ensure a seamless corporate change to take teams, customers, partners, and investors with you from point A to point B in your brand evolution.
Create a change-management-focused brand vision and goals and a strong communications strategy yoked to a holistic content strategy to keep an open but controlled conversation for internal and external communications surrounding your corporate change.
Take an employee-centric approach and consider building a modern, intuitive intranet when creating your change management plan. Plans do not happen without people.
Like in any type of organization, in fashion and luxury, corporate change is inevitable but the past few months have been unusually volatile, particularly at the world’s second largest luxury conglomerate and in the fashion publishing sector.
Last month, Kering announced the acquisition of heritage beauty brand Creed in support of the luxury group’s move into the beauty sector. Then, this past week, Kering broke the news that Marco Bizzarri is stepping down as CEO of Gucci and that Francesca Belletini, who is largely credited for Saint Laurent’s recent growth, is taking on responsibilities as deputy CEO of brand development with all Kering brand CEOs reporting to her. All of this news comes a scant two months before Gucci’s newly-appointed creative director Sabato de Sarno showcases his first collection for the brand in September at Milan Fashion Week, after Alessandro Michele left in late 2022. There also is talk that investor Bluebell Capital Partners is exploring a possible merger with Richemont to take on LVMH.
On the media side of things, fashion and luxury publishing continues to struggle to keep up with the impact of social media and the creator economy. Just this week, Hearst Magazines announced another round of layoffs, letting go of over 40 editorial staff from Cosmopolitan, Seventeen, Elle, Harper’s Bazaar, and other titles. And last month, Condé Nast announced that celebrated British Vogue editor-in-chief Edward Enningful was out after six years at the helm, reportedly due to differences with Anna Wintour.
While Kering sorts itself out, speculation continues about who will fill Bizzari’s shoes at Gucci (Imran Amed at The Business of Fashion has outlined his picks). But, at FSW, we keep wondering about the current state of internal corporate culture and employee motivation at Gucci and the wider Kering group, given the uncertain situation with their leadership and the organization as a whole.
Corporate transition can be a rocky journey, especially in fashion and luxury where everyone has a strong personality and their own set of priorities. Keeping customers loyal, employees engaged, and investors happy does not have to be a choice. Brands win when they take an employee-centric approach and make the time to build a plan and roadmap for organizational change that prioritizes both business vision and focused, goal-driven outcomes.
Invest in Change Management
According to Gartner, approximately 50% of organizational change initiatives are unsuccessful. This is due to many factors, including poor planning, an ill-defined strategic vision and goals, a lack of a definitive roadmap and strategic oversight for implementation, and low employee engagement, particularly when it comes to manager-employee communications.
Whether your brand is adjusting to C-suite changes or undergoing a complex organizational shift, such as an M&A process, investing in change management is critical. As a field, change management is “the process of guiding organizational change to fruition, from the earliest stages of conception and preparation, through implementation and, finally, to resolution. An effective management strategy is crucial to ensure businesses successfully transition and adapt to any changes that may occur.”
In practice, change management is flexible and depends on the situation and needs of the brand(s) involved. Building a strategic plan and roadmap to manage your brand’s transition is essential to take your teams, customers, partners, and investors with you successfully from point A to point B in your brand evolution.
For the case of Gucci, the future depends on their brand strategy and how they implement it, with all eyes on Sabato de Sarno’s creative debut this fall and the question of how he will mesh with the unknown new CEO. As Imran Amed notes, “Taking Gucci from €10 billion to €15 billion in annual revenue will require a more stable brand platform that deftly balances Gucci’s heritage with its fashion-forward DNA, something akin to the strategy that Vuitton and Chanel have used to sustain their growth.”
Focus on Brand Vision and Communications
Of course, plans don’t happen without people. Your brand’s corporate transition depends on not just strong leadership from C-suite execs, the board, and senior business decision makers but also evangelized stakeholders at all levels of the organization who buy into the corporate mission and can clearly communicate the reasons and benefits for change.
People skills are arguably the most underrated factor in business. For a fashion or luxury brand managing a corporate transition, you want your employees not only to feel invested, excited, and engaged with your plans for change; but also you want them to feel empowered to advocate for and communicate the value of change as part of your wider brand mission and the future growth of your organization.
Brand vision and goals as well as a strong communications strategy yoked to a holistic content strategy should form main tenets of your brand’s change management plan. These are important to keeping an open but controlled conversation for internal and external communications surrounding your corporate change. Creating change-specific brand vision and goals forces you to:
Define your brand’s reasons for change
How it connects to your core mission
What benefits it will bring to your brand, your teams, and your consumers
Articulating your “why” for corporate transition and acknowledging how these changes will impact your employees builds a sense of shared mission and purposeful, rather than random, vision-centered change.
By corollary, a strong communications strategy, preferably with a phased approach and a detailed brand messaging matrix, allows your brand to better manage the flow of information and dialogue surrounding your plan for change, both internally and externally. This plan should also connect to your brand’s wider content strategy to ensure a consistent, authentic voice and a predictable cadence across channels. A change-management-focused communications strategy should be holistic, focused on internal and external communications equally, and should also:
Set clear parameters for brand messaging surrounding your corporate change
Define a roll-out plan for brand communications about the change, including where, when, and by whom information is communicated
Prepare for the unexpected, which is inevitable with corporate change, through tools such as crisis communications, media coverage tracking, and press and social media coverage
To go back to our Gucci example, Imran Amed in his recent BoF article articulated this perfectly,
“Internally, Gucci employees need a vision to buy into — something that Bizzarri excelled at when he took over in 2015, but which has been missing more recently. Back then, you could walk into any Gucci store, and the sales associates’ excitement about the brand was palpable. Now, the momentum has slowed and everyone is waiting for the creative direction to be revealed.”
Take an Employee-Centric Approach
Finally, the most often overlooked element in any brand transformation is its employees. The same goes for digital transformation. Most brands undergoing any sort of transformation—whether corporate or digital—take an organization-focused approach, rather than an employee-centric one. This means that whatever end-result is produced may meet the needs of the brand and its business leaders but not those of the employees who do the day-to-day work.
How does a brand prioritize employees as a part of corporate transition? Two easy ways include:
Adopt a needs-based approach to your change management strategy, attenuating your plan-specific brand vision and goals to the differing needs and priorities of your main stakeholder groups
Incorporate a modern, optimized intranet focused on employee experience into your internal change management strategy
Want to build sales, save costs, improve employee retention, and keep your board and investors happy, all while creatively building your elusive story as a fashion or luxury brand? Don’t just focus on your external brand. Build your internal brand first. Create a corporate culture in which people want to be involved. Invest in your employees for the longer term, giving them employee-focused incentives, training and professional development opportunities, and good working conditions and fair pay.
One critical tool in any internal brand is a modern, intuitive intranet. Look, for a fashion or luxury brand, a functional intranet might not seem the sexiest thing, particularly when undergoing a corporate transition. Yet in the case of a merger or major corporate restructuring, your brand’s intranet is a key tool to building your internal brand, addressing employee needs, and creating an atmosphere of open communication that encourages employee feedback and involvement.
Change is never easy, even in fashion and luxury. But, taking a strategic, purposeful approach to your corporate change can help your brand weather the seas of transition and build a fashion or luxury brand that will continue to resonate, evolve, and grow.
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