On a beautiful Thursday evening in late June, 72 of the rising stars of the Estée Lauder Cos. Inc. are seated at two long banquet tables in Bryn Mawr College’s baronial Great Hall, celebrating the successful completion of the company’s Semper Novus executive-development program. The wine is flowing and the mood is celebratory, the wrought-iron chandeliers above casting a warm glow on the scene. In the center sits Fabrizio Freda, president and chief executive officer of the company, chatting animatedly with his dinner companions who include a handful of strategic “outside partners” invited to participate in the week-long program, including this year executives from Isetan in Japan, Sephora Latin America and Ulta.
Suddenly, the Gothic majesty of the room is shattered with the sounds of pop diva Christina Aguilera singing “Feel This Moment.”
Everyone jumps up for an impromptu dance party to what has become the program’s anthem, led by Freda who bops energetically up and down, fists pumping, arms waving in the air.
The crowd goes crazy.
Without a doubt, Freda’s got moves. In fact, since assuming his current position in July of 2009, Freda has demonstrated an exceptional agility to connect with employees, analysts, consumers and most importantly, the Lauder family, well beyond the dance floor.
By bringing a strategic focus and discipline to Lauder’s creative core, Freda has driven the company to record sales and profitability. Among the financial figures he likes to cite: The company has added $3 billion in sales in the last four years to reach almost $10 billion for fiscal year 2013. Operating profit has tripled, operating margin has increased from 7 to about 15 percent, the dividend has increased 162 percent and Lauder’s market capitalization has risen from $6 billion in June of 2009 to almost $26 billion four years later.
That performance makes Freda one of the most effective chief executives in business today.
One company insider—a newcomer—who spoke not for attribution because he didn’t have clearance to talk for this story, explains Freda’s impact thusly: “Fabrizio has effectively distilled the essence and strength of the organization and then built capability around it. If you think about it as a human body, he found the spine and then he built muscles around it without touching the spine.”
On this evening, Freda is in his element, firmly planted in the center of the action, connecting with the people charged with making his vision a reality, firing them up, explaining, teaching, explicating the future he has envisioned for the company—and how they’re going to get there.
“The most important concept is being open to change,” Freda says. “Progress and growth depend on agility, on innovation, on adaptability. In nature, the animals that live the longest, that survive, are not the strongest, they are the most adaptable.”
Freda is on stage now, delivering his graduation remarks, and he quickly comes to a key theme of his corporate transformation. “The best definition of change is a prayer from St. Francis of Assisi that says, God help me to change the things I have to change and help me accept the things you want me to accept, but most importantly, give me the ability to distinguish between the first and the second.
“That is the key,” Freda continues. “The art of leadership is distinguishing what you want to protect and what you need to change.”