The beauty industry landscape continues to shift with acquisitions of independent startups by strategic and financial buyers reaching an all-time high in 2017. The indie brands have captured the attention and loyalty of a broad range of consumers whose interest shows no signs of waning. Whether due to digital savvy, or a clearly defined, aspirational positioning or passionate founder, these beauty brands are intimately connecting with consumers and are pushing across the prestige, mass and professional beauty channels.
Many indie brands have succeeded in authentically listening to and quickly adapting to consumer needs, which is especially appealing to millennials, who require speed, innovation, personalization and community. This brings new opportunities for brands to capitalize on the full potential of the global marketplace. To support and develop an indie brand to scale while protecting its heart & soul requires a unique set of skills and experiences in any incoming Chief Executive Officer. What does that mean in terms of identifying and recruiting the right leader?
Five Requirements for the Next Indie Beauty Brand Chief Executive Officer:
1. Brand Builder
Brand-building is critical to developing an image-oriented business, as is a commitment to preserving, adapting and enhancing the brand’s DNA and core values as the business scales. Emerging brands require a leader who can clearly define a vision and architect a broad-reaching plan to build the brand of the future on the national or global stage. The right leader will be a visible brand champion, clearly articulating its essence, strategy and priorities to all internal and external audiences and constituents. As the company continues to build its footprint, the Chief Executive Officer will drive the organization to new thinking around the go-to-market strategy, bringing process and operational discipline to ultimately ensure that the brand consistently delivers a seamless message and experience across consumers, categories, channels and markets.
2. Emotional Intelligence
Most small indie beauty brands have been successfully developed and led by a savvy founder who may be ready to turn over the reins to a new leader with the skills and experiences needed to take the business to the next level. Many founders remain as the face of the brand and/or transition to an active Board role. An incoming Chief Executive Officer must have the ability to navigate through the sensitivities and challenges that come with this. These new leaders must further understand how to assess talent and create a culture that respects and blends both inherited and new talent. Overall, outside leaders need to balance honoring the past with respectfully pushing towards the future.
Many emerging brands have outgrown existing infrastructure and have critical gaps in talent. The supply chain is often straining to keep up with the needs of the business. To ensure future success, the new Chief Executive Officer must have the ability to assess existing capabilities and define the necessary talent, structure, roles & responsibilities, infrastructure, and processes/procedures needed to elevate the company to a world class operating entity. Building a talent pipeline across functions is a challenge for many high-growth businesses, and data & analytics, consumer insights and digital capabilities remain at the forefront of recruitment needs.
4. Financially Astute
Indie brands are winning top-dollar bids from cosmetic giants seeking to quickly establish themselves within a new consumer base, category or channel and are the target of private equity investors given their resiliency and rate of growth not seen in many other industries. The 52 acquisitions in the beauty and personal-care industry last year were the most in a decade, and some of the hottest targets were private brands with massive social media fan bases. Financially-savvy leaders need to be able to envision and maximize all opportunities, driving growth in a fiscally responsible and profitable way. The Chief Executive Officer must ensure that all decisions are aligned with the company’s financial objectives. Ideal experience may include due diligence and acquisition/integration exposure within a corporate setting or experience within a private equity environment.
5. Culture-Creator and Leader
Growing an organization to scale and maintaining its performance and agility requires a strong culture stemming from the top; the brand is built from the inside-out. A Chief Executive Officer must respect and support the company’s history while leading transformation. An organization established for future success is one that fosters collaboration, transparency, innovation, data-driven decision making and collective success. An incoming Chief Executive Officer must have experience in building an “A” level consumer-centric culture and organization that is laser focused on understanding, developing and delighting the brand’s consumers.
Ultimately company objectives and the current state of your business and organization will drive the critical skills, experiences and competencies needed in a new leader. Regardless of your company’s priorities, in order to attract top talent Boards will need to consider that the demand for beauty leaders is at a premium. Expedited decision making throughout the process, creativity and flexibility in managing non-competes and an awareness of market compensation ranges will be critical to a successful search. The next indie beauty leader is someone who can build a brand with a strong culture, demonstrate operational and financial expertise, and stay true to the founding principles of what differentiates a niche brand - all while connecting with consumers and growing to scale.