Estée Lauder Executive Chairman Says Good Leaders Have ‘Big Ears and a Little Mouth’

William P. Lauder might be a familiar name. His grandmother, Estée Lauder, founded her namesake brand in 1946 and grew it into one of the largest beauty companies today. Currently, the Estée Lauder Cos. have more than 45,000 employees worldwide and own over 20 brands, including Clinique, Tom Ford Beauty, La Mer, and Jo Malone.

Lauder, 64, is now the company’s executive chairman and chairman of the board of directors. He got his start in 1986 as the regional marketing director of Clinique U.S.A. in the New York metro area, helped launch the natural ingredients brand Origins, and eventually rose all the way to serve a stint as CEO of Estée Lauder in the late aughts. (It was recently announced his successor, longtime CEO Fabrizio Freda , will retire next summer amid slumping sales.)

In addition to his current position, Lauder teaches a class that he designed, “Decision-Making in the Leadership Chair,” at the Wharton School of the University of Pennsylvania for second-year MBA students.

Penta recently spoke to Lauder about his most memorable career moments, consumer preferences in the beauty industry, and his thoughts on leadership.

Penta : What is your role at Estée Lauder?

William P. Lauder: We have two great assets: brands and people, and my primary focus is to build great brands and to engage with our people. I travel and visit a lot of our markets and see how we can grow in that market. We have a presence in London, Paris, Korea, and many other international destinations. I host a town hall for Estée Lauder Cos. employees in many of our markets and talk to them about what makes us special and what our values are.

I also visit our factories and research and development facilities to do the same thing.

Can you share a career highlight since you joined 38 years ago?

I was one of the people who created and launched the Origins brand in 1990. The idea was to create a line that was backed by science but made with natural ingredients. We had a product called Peace of Mind to put on your temples and wrists to help relieve stress. We let people sample it in stores, and they loved it so much that they immediately came back to buy it. From there, the brand exploded, and we opened Origins stores. This was innovative at the time because single-brand stores didn’t exist.

Since I’ve moved into corporate management, my highlight is to be able to travel and show the Estée Lauder Cos. flag, as I like to call it, to our employees.

Have are consumer preferences with respect to luxury fragrances and beauty products changing?

post-Covid, there has been an explosion in interest in luxury fragrances, which is reflected in our brands like Jo Malone London, Le Labo, Editions de Parfums Frédéric Malle, Tom Ford, and Kilian Paris.

Also, we have new, much younger consumers in their late teens to early 20s who are very into makeup and buy our brands like Too Faced. They are getting into skin care by buying products from our brands, including Clinique and the Ordinary. Teenage boys are very interested in fragrances and buy Kilian Paris and Tom Ford. Our hope is that this younger generation continues their loyalty to us, especially as they get older and have more disposable income.

You teach a leadership class at Wharton. In your opinion, what are the attributes of a successful leader?

First and foremost, the most effective leaders must be effective communicators. I believe in short, quick, and concise comments and statements that you repeat, like mantras. These mantras should be able to be passed down to the people they lead.

Also, you have to be a great teacher to be a great leader. You need to make time for an in-depth conversation with the people you lead to get your message across.

And it’s important to have big ears and a little mouth. Listen more and talk less.

Breast cancer research is a priority for Estée Lauder. Can you tell us more about this?

The Breast Cancer Research Foundation (BCRF) is a nonprofit that my mother, Evelyn, started more than 30 years ago. We, as a family, chose breast cancer because it’s the most common cancer that women are diagnosed with. One in eight women in the U.S. will be diagnosed with breast cancer, and 80% of our employees are women, so the statistic resonates.

The Estée Lauder Cos. Breast Cancer Campaign, our initiative that funds BCRF, is key to our company culture and a cause that brings us together meaningfully. In October, for Breast Cancer Awareness Month, we launch products across some of our brands, and proceeds from sales go toward the foundation. The campaign and the Estée Lauder Cos. Charitable Foundation have raised more than US$131 million to date for BCRF.

This interview has been edited for length and clarity.

The rate of inflation has fallen to its lowest levels since August 2021, the Australian Bureau of Statistics revealed today. The news comes just a day after the Reserve Bank of Australia announced it would be keeping interest rates on hold at 4.35 percent.

The drop in the rate of inflation to 2.7 percent has been largely attributed to moderating prices of petrol and diesel, with automotive fuel 7.6 percent lower than a year ago, and electricity, which fell 17.9 percent over the same period.

Michelle Marquardt, head of Prices Statistics at Australian Bureau of Statistics, said the decrease in electricity prices was largely due to Commonwealth and State Government energy rebates in Queensland, Western Australia and Tasmania.

“Electricity fell 17.9 percent in the 12 months to August, which is the largest annual fall since the electricity series started in the early 1980s,” Ms Marquardt said. “Commonwealth Government and State Government rebates led to a 14.6 percent fall in electricity prices in the month of August, which followed a 6.4 percent fall in July.

“Excluding the rebates, electricity prices would have risen 0.1 percent in August and 0.9 per cent in July.”

The news was less positive for renters and those seeking to build or renovate, with rents up 6.8 percent over the past year and new dwelling prices also up by 5.1 percent.

Following a meeting of the RBA board yesterday, governor Michele Bullock announced that the cash rate would remain unchanged, citing persistently high inflation and economic uncertainties as major influences on the decision.

“Inflation has fallen substantially since the peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance,” Ms Bullock said in a statement. “But inflation is still some way above the midpoint of the 2–3 per cent target range.

“Headline inflation is expected to fall further temporarily, as a result of federal and state cost of living relief. However, our current forecasts do not see inflation returning sustainably to target until 2026. In year-ended terms, underlying inflation has been above the midpoint of the target for 11 consecutive quarters and has fallen very little over the past year.”

While the decision to keep rates on hold was widely anticipated, it has raised eyebrows in some quarters given the US Federal Reserve announced last week it was dropping the official cash rate by 50 basis points. However, research director at CoreLogic Asia Pacific, Tim Lawless, says there was good reason for keeping rates on hold in Australia for now.

“Importantly, Australia hasn’t gone ‘as hard’ on monetary policy as most other Western nations, increasing the cash rate by 425 basis points compared with a 525 basis point increase in the US and NZ, and a 515 basis point rise in the UK,” he said.

“Also, our tightening cycle has lagged most other nations, with the cash rate increasing from May 2022 compared with the US where the hiking cycle commenced in March 2022 or the UK where interest rates started rising in December 2021, or NZ and the EU which commenced rate hikes even earlier, in October and July 2021 respectively.”

Ms Bullock said the RBA board would be keeping a close on labour markets both here and overseas as it navigates a path to sustained lower inflation at the target rate of between 2 and 3 percent.

“Sustainably returning inflation to target within a reasonable timeframe remains the board’s highest priority,” she said. “This is consistent with the RBA’s mandate for price stability and full employment. To date, longer term inflation expectations have been consistent with the inflation target and it is important that this remain the case.

“While headline inflation will decline for a time, underlying inflation is more indicative of inflation momentum, and it remains too high.”

Estée Lauder Executive Chairman Says Good Leaders Have ‘Big Ears and a Little Mouth’

Decreasing automotive fuel and energy prices have been major contributors to a falling inflation rate, but the RBA is advising caution