Jean-Paul Agon faces a beauty of a challenge as CEO of Paris-based cosmetics giant L'Oréal SA. As CEO for just over a year, he has a hard act to follow, having succeeded the formidable Sir Lindsay Owen-Jones, who in 22 years had made L'Oréal into a global brand leader. (Mr. Owen-Jones remains chairman.) Now, there will be fallout from last week's French court decision, which found a L'Oreal division guilty of racist hiring practices in a 2000 promotion campaign. In a recent visit to L'Oréal Canada's Montreal offices, Mr. Agon talked about how his own leadership style was formed.
A French executive once said: 'While Owen-Jones smiles, Agon laughs.' What does that mean?
Maybe you should ask him. I am very direct. Also, we have a great atmosphere in the company and we try to do our business in a good spirit. I don't believe that to be successful you have to be stressed and tough and rough. The better the atmosphere, the better the results.
You enjoyed a fast-rising career, starting with becoming L'Oréal's Greek country manager at just 24.
It is typical of the L'Oréal spirit to bet on individuals. There are two kinds of companies. Some really believe in the importance of organizations, processes and structures and the people are a bit interchangeable.
L'Oréal is exactly the opposite. We believe fundamentally in individual talent. We want to be able to make bets on people and I think that is what they did with me.
How did that Greek posting happen?
It was an extremely small unit and in very bad shape. The reality is that five other people before me had declined the offer. They said 'this guy is so young, there is nothing to lose.'
It was the deciding moment in my life because I discovered the excitement of the entrepreneurial attitude, when you are really in charge, you have a team and you mobilize your team.
The big question now is how do you replace a legend?
That is a big question, but I am not thinking that way - thank God. If whenever I wake up every morning, I am thinking 'How can I succeed someone like Mr. Owen-Jones', it would be really scary.
We have a great team. Most of the people have been in this company forever. There are 14 people on the executive committee, and I have known most of them for 20 years. We are all friends, we have the same vision, and each has a clear responsibility. So far, so good.
But you are planning to put your own stamp on the company?
I have to make it successful. I'm not thinking that much of my own stamp.
After Jeffrey Immelt replaced the legendary Jack Welch at General Electric, he took the company in new directions. Will that happen with you?
Absolutely and that's simply because the world is changing. As the world changes, new opportunities come and the company has to evolve.
The beauty market is extending its global reach. For example, there are the BRIC countries - Brazil, Russia, India, and China, as well as Mexico. As they get to be better economies, new classes of population will gain access to levels of income that allow them to buy our products.
We found that 60 million to 70 million people a year on the planet get access to that income level. It's like adding a Germany every year. It is a big historic opportunity for L'Oréal.
After being run by a British-born manager of Welsh extraction, L'Oréal is now reverting to French leadership.
But I am not the usual Frenchman. I left France when I was 22, and I have spent 90 per cent of my life outside France or working in international markets. I am proud to be French but I have been extremely excited by the discovery of the world.
Yet there must be a challenge in producing and selling cosmetic products, which absolutely nobody needs.
I strongly but respectfully disagree. I'm sure that is just a nice provocation on your part. Beauty products and cosmetics have been used since the Egyptians and the Greeks or before. Beauty has always been part of civilization. Beauty products make people happier. When people look good, they feel better. Their relationship with others is better.
If I drive a BMW convertible, I might feel better but I don't need it.
The best way to prove you wrong is to go to countries where beauty products were not offered before and the market is just opening, I had this experience twice, in Eastern Europe and Russia and then in China.
In Russia, when beauty products began to be available, they were among the first products people wanted to buy.
You know, people aren't stupid. Women wanted to buy beauty products because they knew they were a very important part of a happy and nice life. We had the same experience in China when the economic system changed.
But L'Oréal is a marketing machine, which proves that these products must be sold very aggressively.
Fundamentally, we are not a marketing machine - we are an R&D machine. This company was created by a scientist. The real philosophy is that everything starts from science.
Charles Revson [the founder of Revlon]once said that beauty is hope in a jar. We believe the exact opposite, that beauty is science in a jar, technology in a jar. Everything starts at L'Oréal with R&D, formulation and technology. In fact, marketing is more a way to dress up science than the other way around.
How much is spent each year on marketing?
It is, of course, much bigger if you include everything. You have to deliver products to the stores; you must have pictures in the stores so that people can see them. To make people aware of the product you have to spend money, but that doesn't prove it is artificial.
How much R&D spending do you do?
We spend 3.4 per cent of sales which is €500-million [$715-million] by far the largest investment in this industry.
Compared with a marketing budget of how much?
All in all, it would be about 30 per cent. That includes everything, such as sampling and making people discover your products. You need to make your products accessible to everybody.
But aren't you just preying on vanity and illusion?
It is not only about beauty. People want to take care of themselves, their skin and their hair, and to look as young as possible. When they look great, they feel happier.
We have a program called "Look Good, Feel Better." We are giving cosmetic products to people who are treated for cancer. We give the products and an aesthetician goes to the hospital to help patients apply them.
Doctors tell you that the patients who take care of themselves have a much better attitude. They are better in their minds, and sometimes their bodies, than those who do not.
Title: President and CEO,
L'Oréal SA, Paris
Born: July 6, 1956, in Paris
Education: 1978, business degree from elite HEC Paris
1978: Joins L'Oréal as sales rep in the south of France.
1980: At 24, named manager of the company's Greek operations.
1980s-1990s: Keeps getting progressively challenging assignments.
2001: Appointed president and CEO of L'Oreal USA (including Canada)
April, 2006: Named president and CEO of global company