Building A Global Brand

What can credit unions learn about talent management from the appointment of Burberry’s new CEO?

Earlier this week, CreditUnions.com published a piece about Burberry’s efforts under former CEO Angela Ahrendts to reaffirm the company’s brand and inspire greater loyalty. According to an article published in the Harvard Business Review, when Ahrendts took over Burberry in 2006, it was losing market share to larger luxury brands. For example, Louis Vuitton Mo’t Hennessy was earning almost 12 times Burberry’s revenue; for Pinault-Printemps-Redoute, it was more than 16 times.

As Alix Patterson outlines in When The Going Gets Good, Dare To Change, Ahrendts centralized Burberry’s business processes with an eye toward creating the same quality products and uniform retail experience across its global footprint. When the American CEO stepped down in October 2013 to join Apple as its senior vice president of retail and online stores, Burberry again found itself in transition. But with the naming of Christopher Bailey, 42, as CEO designate, Burberry’s strategy for the future has become clearer.

A few words about Bailey: He’s not your typical CEO. He has led Burberry’s design team since 2001 before that he designed for Gucci and Donna Karan and became the chief creative officer in 2007. Together, Ahrendts and Baileytripled Burberry’s revenue within seven years, taking it from approximately $1.1 billion in 2006 to $3.1 billion in 2013. According to a January 2014 Fast Company profile, Bailey is not the first designer to head a major fashion brand; however, the fact he was not involved in the founding of the company makes his rise to CEO a wholly unique appointment in the luxury clothing industry.

But why should the rise of this fashion designer resonate with credit unions?

For credit unions, the appointment of Bailey provides two main lessons. First, it’s an example of an unconventional path to the CEO position. As a lead designer and chief creative officer, Bailey’s ascension is not just unusual, it’s unprecedented. But it’s not crazy (or bonkers as he likes to say). Bailey clearly has vision and an intimate understanding of the company. He didn’t hold a board position, nor did he come from operations or finance, but Burberry unequivocally feels he is right for the job in fact, the board considered no other candidates. As we should see more often, CEOs can come from any place on an organizational flow chart. Limiting the search to a few select positions is a disservice to any organization. All institutions, including credit unions, should be looking for a person, not a resume.

Second, as has been widely discussed within the industry, credit unions are facing talent attrition and retirements. For a variety of reasons, some of the industry’s best employees and executives are leaving credit unions for banks. In-house talent, unfortunately, is running away from home. Couple this with the onslaught of expected retirements over the next decade, and the industry is looking at a potential brain drain.

Burberry, understanding the value on the open market of a designer of Bailey’s caliber and business savvy, locked him into the company for the foreseeable future. He has a history with Burberry, just as credit union employees have a history with the credit union. Creating and maintaining strong relationships with talented employees gives them an incentive to stay.

To paraphrase Bailey, people are interested in how a product is created and the values that surround it. What sentiment is more quintessentially credit union than that?

So maybe you haven’t been paying attention to the change in leadership at Burberry. But you should be.

January 17, 2014

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