Great Entrepreneurs Build Strong International Brand Names - Their Successors Often Lose Focus And Greatly Damage These Franchises
by: Geoff Ficke
If you are of a certain age you will vividly recollect the following names: Helena Rubenstein, Faberge, Germain Monteil, Trigere, Revlon, Elizabeth Arden, Max Factor, Schwinn, W. T. Grant, Montgomery Ward and Chuck Taylor. Each name represented a hugely successful customer product brand.
Each of these brands was grown from the entrepreneurial seed of a visionary. Unfortunately, all was subsequently abused, in numerous cases terminally, by non-visionary corporate bean counters.
A classic example is Revlon. Revlon is instructional because it persists in the news, mostly for being a tortured shell of it’s former glorious self. Founded by Charles Revson in the 1930’s, Revlon was the largest cosmetic company in the world until the 1980’s. Ultima, Norell, Charlie, Bill Blass and Eterna 27 were subsidiary divisions under the Revlon corporate umbrella. The finest department and specialty stores in the world fought to carry these upscale, elegant products. Revlon was widely respected as the arbiter of taste for fashion conscious women. Fire and Ice, Lips and Tips and That Man are only a few examples of product marketing campaigns that were ubiquitous in customer culture of the time.
Charles Revson was 1 of the most famous businessmen of his time. Books were written about his life, business strategy and the legendary brutal bullying of his management personnel. He paid his people exceedingly well and expected total commitment to his company. The drive to stay ahead of the competition by constant innovation and creativity was all consuming for Mr. Revson. Nothing was granted to impede his constant pursuit of staying number one. His famous department store mantra, “success needs space, location and demonstration” is a given followed by successful merchants to this day. He once was asked how he could justify charging $5 for a $. 40 cent lipstick? His famous retort: “I don’t sell lipstick, I sell hope” is an accurate reflection of an entrepreneur who knew his customer and how to please them.
As Mr. Revson aged, he could see the require to address his succession as crucial to his legacy and Revlon’s future. After conducting a famous, thoroughly documented executive search, he hired Michel Bergerac from IBM. Mr. Bergerac was a brilliant executive. He inherited a billion-dollar business with worldwide operations. Revlon dominated the male and female fragrance, color cosmetic and skin care markets.
Sadly, the business culture of the 1980’s and 1990’s did not value creativity and innovation as much as asset deployment. Mr. Bergerac was excellent at deployment of assets. For a number of yrs Revlon held on as king of the category. However, the inevitable slow started to happen. Product launches started to stall. The Company started to follow competitor’s successes with me-too look-alike products. Lancome, L’Oreal and Estee Lauder, under the lead of entrepreneurial owners, became industry innovators and assumed leadership in the space historically dominated by Revlon.
It has been 20 yrs since Revlon left the department store business. Mr. Bergerac was awarded a lucrative “golden parachute” when financier Ronald Pearlman took control of Revlon in a hostile corporate takeover. Under Mr. Pearlman’s ownership Revlon has been a continual money loser. Product innovation is non-existent. Revlon’s products are sold in drug chains and mass merchandisers and are regularly promoted with off cost coupons. Charles Revson would be livid. But he would not be alone as a founding entrepreneur, nurturer of a great make and yet, unfortunately, a life’s work diminished or extinguished by successors lacking the innovative gene.
Great entrepreneurs like W. T. Grant, Montgomery Ward and Pauline Trigere are rare. The capability to create, innovate, manage and grow a business is rarely found in a single package. Calvin Klein is a creative entrepreneurial genius in the fashion world. His partner, Barry Schwartz is the unseen business/management half of the Klein success. They compliment and balance all other. Whether their successors can retain to provide clothing designs that the customer will want is an open question.
It was easier for Germain Monteil to build her skin care line from scratch than it was for The Squibb Drug Company, after purchasing this growing brand, to maintain it. Germain Monteil products are no longer sold. There are far too numerous such examples.
In my work with entrepreneurs I am constantly confronted with examples of ambition not paralleling reality. As Clint Eastwood famously quipped in a Dirty Harry movie, “a man has to know his limitations”. It is a rare person that has the range of capabilities to both launch and successfully build a product. Limits of capability or experience, however, do not close the door to potential success. The right partner, team or alliance can spell the difference between success and failure. Charles Revson was the entire package. His successors have proven themselves to be not of his caliber.
I love to discuss particular opportunities with potential entrepreneurs. Please call me at any time to review your dreams. Geoff Ficke 859-567-1609.
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Tags: Brand, Build, Damage, Entrepreneurs, Focus, Franchises, Great, Greatly, International, Lose, Names, Often, Strong, Successors, Their, These
