For all of his European charm, Fabrizio Freda thrives on playing the outsider.

It’s a lesson he learned early in his career, as he moved from Procter & Gamble to Gucci SpA and back to P&G again.

“The experience outside [P&G] gave me a lot more authority in challenging the status quo,” says Freda, who on March 25 was named president and chief executive officer of the Estée Lauder Cos., effective July 1. “I stayed the challenger forever.”

That position has become his persona and expected role at the 63-year-old Lauder company, where Freda has been tasked with creating and selling his new world vision to both Wall Street and to long-standing company executives.

During a wide-ranging interview two weeks prior to his appointment, Freda outlined his ambitious strategy for the company, with the goal of transforming its diverse assets into a more sustainable business philosophy. He repeatedly makes the distinction between top-line gains and sustainable, profitable growth, and is clearly intent on achieving the latter.

Freda’s plan includes:
• Instilling and implementing one global vision that fosters collaboration as reflected by a novel new compensation code.
• Driving out inefficiencies.
• Dealing with underperforming brands.
• Restoring the corporate focus on putting the consumer first.
• Consolidating global infrastructure to operate on a more efficient basis.
• Growing the mature core brands while nurturing the smaller players.
• Looking for new growth from underexploited categories.

Named president and chief operating officer in March 2008, Freda has spent the last nine months drafting his restructuring plan. It’s a message Wall Street seems more than ready to hear. “He has to get Lauder to run itself the right way,” says Caris & Co. analyst Linda Bolton Weiser. “The problem is not the top line, it’s the costs. He has to get Lauder employees to live differently.”

But don’t call him a revolutionary: Freda has too much sensitivity and finesse for that, preferring the term evolution to define the changes he’s implementing.

Clearly, these are pivotal times for the company, which, like all luxury firms, must come to terms with the global economic crisis. Meanwhile, its primary distribution partners, department stores, continue to cede foot traffic to new retail formats, particularly specialty stores, Internet and TV, as consumers continue to cross shop channels on the hunt for value, innovation and affordable indulgences.

Freda has already passed one major test, earning a glowing report card from patriarch Leonard A. Lauder, who more than anyone has defined the modern era of the prestige beauty industry. “He has my endorsement and approval and the family loves him,” says the 76-year-old Lauder, who in July will move up to chairman emeritus when his 48-year-old son, William P. Lauder, assumes the new role of executive chairman, opening the way for Freda’s ascension. The elder Lauder will continue to teach his leadership classes within the company, travel to key markets, address industry groups and advise on acquisitions.