An interview with Leonard A. Lauder, W’54, Chairman Emeritus, The Estée Lauder Companies.
Leonard Lauder is larger than life. He continues to serve, chair, and contribute his thoughtful discourse to, multiple trademark organizations throughout America. He gives, and gives again, because he believes in it. He has led a lifetime of achievement. His interview is compelling, and his speech at the Joseph Wharton Awards Dinner drew a standing ovation from his peers.
What did you learn from your mother and father that helped you?
Quality of products wins the day. When faced with competition, fight! Be gracious to people, and always say, “Thank you.”
Has family ownership and management been a competitive advantage for Estée Lauder to grow and endure?
It’s been a competitive advantage for us. We could invest money in launching new brands and never have to worry
about Wall Street. It helped us enormously. We would never have been able to launch Clinique, which is a huge business today, if we had been a public company.
After you became CEO of the firm in the 1980s and 1990s, what did you not delegate? What meetings did you feel you had to attend?
I did not delegate the final decision regarding the hiring of key executives. Anything that had to do with the long-term strategy of the company.
What were your strengths as you grew the firm? Did you recognize them as such?
Picking great people, and recognizing them as such, because it takes great people to run a great company.
How would you build your brands differently today?
I have very few regrets about what I did.
It seems that you (and other leaders like Ralph Roberts, J. D. Power, Peter Lynch and Jay Fishman) have reconciled an intense focus on the one hand, with humility and generosity on the other. How do you do that?
This is tough. You can’t have either intense focus or humility or generosity, if it is not inside of you. You can’t fake it. It is one thing you’ve got to have. If you don’t have it, try something else, or try another business.
What compels you to give so much?
So many people gave me so much to help me to get started. And this nation has been good to me, so my responsibility is to give back.
Has the Lauder Institute at Wharton turned out the way you imagined it would?
Yes. It sets a standard for all of the business schools in the nation, if not the world, to follow. I don’t like competition, but on the other hand, I love the fact that we have created a new educational model.
In the final words of your acceptance speech at the Joseph Wharton Dinner, you challenged us to be not only great business people and alumni, but also great Americans. Can you speak more to that?
Do not embrace any one political party as being right in all cases. Embrace the idea that we are all Americans. In some cases, we need to pay taxes to keep the nation strong. In other cases, we have to be socially sympathetic. In some cases, we need to all buckle up and tighten our belts to get through. I lived through World War II — I was a little kid, but then, the nation was one. The nation today is not one, and today it is not being unified together. That is a danger.
What makes you proud of The Estée Lauder Companies?
We built a great business with great people, with a great reputation. And we are all very proud to be here. To be part of Estée Lauder and American.
Here is an excerpt from Leonard Lauder’s speech at the Joseph Wharton Dinner, following his introduction by Peter Lynch, WG’68 , Vice Chairman of Fidelity Management Research Company.
When I went to Wharton, I took a course in salesmanship. They taught me to never give someone the opportunity to say “no.” Fast forward to 1995, as part of our IPO, as part of our road show, there’s something called a “one–on-one.” Guess who had to do the one-on-one with Fidelity Fund? They could eat you for breakfast, lunch and dinner and spit you out. I was terrified. As luck would have it, the Fidelity person was a Wharton graduate.
Talking about the Penn family, we have a great Penn family — my sons William Lauder, W’83, and Gary Lauder, W’84; my brother Ronald Lauder, Class of ‘65; and my granddaughter is at Wharton now, Class of ‘13. When I was at Wharton, there were some subjects I didn’t understand. But the school taught me how to think, how to do things right and, most important, how to do the right thing. I came out of there with self-confidence that I knew how to do things. After a three-year stint in the U.S. Navy, I arrived at Estée Lauder, a tiny company. And, Brian, you shared an office with your father — I shared an office with my mother. There’s a difference!
My grandmother was Hungarian, and my mother learned one Hungarian word from her. When I would have meetings with a client, she would sit there at her desk with a big smile on her face and say to me, “Legyen nyugodt!” —“Be quiet!”
But I want to say one word not about Wharton but about our responsibility. Remember this. Our education was largely paid for not by our parents or grandparents, but largely by people who didn’t know us at all! The Whartons, the Dietrichs, the Steinbrenners, the Logans, the Huntsmans — they put the money in so they could give us an education. So, it becomes our responsibility if you have the money, to put the money in, so that future generations of this great nation can be well-educated. I’m proud to be a graduate of Wharton, a graduate of Penn, but more than anything, proud to be an American. Let’s make this a great nation. Let’s educate the next generation and generations to come. Thank you for this great honor!
Leonard A. Lauder, W’54, is Chairman Emeritus of The Estée Lauder Companies Inc. and is currently the senior member of its Board of Directors. Founded in 1946, the Company is one of the world’s leading manufacturers and marketers of quality skin care, makeup, fragrance and hair care products, with annual sales of $9.7 billion. Its products are sold in over 150 countries and territories across more than 25 well-recognized brand names.
A 1954 graduate of the University of Pennsylvania’s Wharton School, Mr. Lauder also studied at Columbia University’s Graduate School of Business and served as a lieutenant in the U.S. Navy. He formally joined Estée Lauder in 1958 when it had annual sales of $800,000. Mr. Lauder consistently developed and implemented innovative sales and marketing programs and increased the Company’s sales and profits. He created its first research and development laboratory and brought in professional management at every level. He also initiated The Estée Lauder Companies’ international expansion, which began in 1960 with the opening of the Estée Lauder account at Harrods in London.
Mr. Lauder served as President of The Estée Lauder Companies from 1972 to 1995 and as Chief Executive Officer from 1982 to 1999. He added the title of Chairman in 1995 and served in that role through June 2009. Under his leadership, the Company launched many brands, including Aramis, Clinique, Lab Series Skin Care for Men and Origins. Beginning in the mid-1990s, the company also began expanding through acquisitions, including Aveda, Bobbi Brown, Jo Malone, La Mer and M•A•C.
Mr. Lauder has maintained a strong connection with the University of Pennsylvania and the Wharton School. He is a long-term Trustee of the University and currently holds the position of Emeritus Trustee. He and his brother, Ronald (W’65), founded the Joseph H. Lauder Institute of Management and International Studies in 1983. Both have served as members of the Lauder Institute’s Board of Governors since its founding. In 1996, Mr. Lauder received the University’s Alumni Award of Merit.
On the 20th anniversary of the Lauder Institute’s first graduating class, in 2006, Mr. Lauder delivered the commencement address at the MBA graduation and was honored with the Dean’s Medal in recognition of his commitment to global business.
In addition, Mr. Lauder is extremely involved in the worlds of art, politics and philanthropy. He became a Trustee of the Whitney Museum of American Art in New York City in 1977 and currently serves as its Chairman Emeritus. He is also Co-Founder and Co-Chairman of the Alzheimer’s Drug Discovery Foundation, a member of the Council on Foreign Relations, a Trustee of the Aspen Institute, Chairman of the Aspen Institute International Committee, and a member of the President’s Council of Memorial Sloan-Kettering Hospital. Mr. Lauder served on the Advisory Committee for Trade Negotiations under President Ronald Reagan. Included among his honors, he was presented with the National Order of Merit by the French government, named an Officier de la Légion d’Honneur by France and recognized by the United States Navy Supply Corps Foundation with its Distinguished Alumni Award.
Most recently, the Lauder family received the esteemed 2011 Carnegie Medal of Philanthropy in recognition of their long-standing commitment to philanthropy and public service. Mr. Lauder has two sons, William, Executive Chairman of The Estée Lauder Companies, and Gary, Managing Director of Lauder Partners, LLC, and five grandchildren.