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00:00They said you're now in charge of Greece. The people that's why as proposed the jobs to almost everyone and that no one wanted to take it. People are happier when they use your products by creating beauty products you make you make people more happy . And you tell the difference in the brands that's from far away but you take four week vacation is that requirement and be French number three. What would you say is the secret to being a good business leader. The most important thing is to love what you do. Where do you put your time please. People wouldn't recognize me if my tie was fixed but it just seemed to sweet. All right . I don't consider myself a journalist. Nobody else would consider myself a journalist. I began to take on the life of being an interviewer even though I have a day job running a private equity firm. How do you define leadership. What is it that makes somebody tick as archaeologists have discovered over the years. If you go back several thousand years there was cosmetics and other beauty products in Egypt and other places in the Middle East. What are we doing to make people more beautiful today than they did thousands of years ago. You know didn't exist many many thousand years ago but maybe you don't know that. In fact the first beauty product that we had discovered were discovered five hundred thousand years ago. So a hundred thousand years ago men and women started to use new kind of make a kind of beauty treatments. So it's it's a long long story where they sold at department stores or where did people buy those. You don't know . So what kind of Flintstone department store. So what I assume was mostly for women in those days. One hundred thousand years ago or 5000 I wasn't there. So but OK I'm not I'm not sure by the way. I'm not sure. I'm not sure that maybe the country at that time maybe both men and women were using colors. I'm not an expert in cosmetics. It may be hard for people to believe but I went yesterday to a store to buy some of these cosmetics. Thank you very much. And the first thing I happens when I go to department stores I hear I smell the fragrance of perfumes and so forth and everything and cosmetics is always on the first floor apartments or why is that but first because the you know beauty products bring traffic so department stores or other stores you know for them it's a great opportunity to bring people to their store. And when they enter the store they are at the beauty space and it's a great business opportunity. And similarly why it smells fragrance because people are testing people out testing new products and of course it smells great. So we go more often to departments. Hi. My favorite place too right after this I'll probably go back to another one. What about online. Is that a big big part of your business. Yeah it's growing very very fast. You know it was almost nothing five six years ago and now depending on the country it can be between 5 10 even 20 or 30 percent. Are there certain countries where I'd say cosmetics perfumes hair dye skin lotions are sold more frequently than in other countries as the United States where people as a percentage use more of it than they do in Europe or Asia. In fact it depends every part of the world as as a difference. For example in the U.S. the people use a lot. Women use a lot of makeup in in Europe. They use a lot of fragrances. And in Indonesia they use a lot of skin care. So there are some specialties across the world. Let's talk about L'Oreal itself. The company is based in France but they're your biggest market is that the United States. Yes France in fact they do business in France is still very small. ISE now very small it's 7 percent of the total. The U.S. is the number one market. It's 25 percent . And now Asia is becoming very strong to Asia. China will suddenly become bigger and bigger. Of course there are billions of consumers there. Let's go through how you came to L'Oreal . You grew up in Paris Paris. And did you say when you were a young boy. I want to run L'Oreal nuts really. In fact when I was really young and 15 years old I was trying to understand what type of job I would look like to do. And I had three ideas. One was to be a sec psychologist psychiatrist. And you said it's psychiatrist a psychiatrist . Yes I think it's difficult for a friend didn't miss anything or a movie day. OK. All business. And at the end I chose business. And but the funny thing is that in my job every day I do a little bit to the three because because marketing is about you know understanding really the desires and dreams and wishes of the people. It's a lot about movie direction too because you create images and everything. So it's I'm pretty happy in fact that I was able to put it all together. When you went to school I think you took a finance class I read and the professor said in effect you're very good at marketing not finance. That's not right. Yes yes yes I know that you a finance expert with me . Me and I have to admit that I'm very bad in finance so. So I chose the finance major because it was trendy at the time. And but every business case we had about finance I always recommend it to change the advertising so. So the guy said at the end you know John Paul you're you're really gifted but not for finance . Do marketing. Right. So how did you come to L'Oreal. You graduated from college. Yes. So I went to a business school and and at the end of the business school in fact when once I knew that I was made for marketing I really look for the most interesting marketing knife I found and I still think that beauty is what they call the supreme art of marketing because it's really about of course understanding all the technicalities . But it's also about intuition perception creation. It's it's the most interesting marketing. After a brief period time they said you're now in charge of Greece. I didn't arrive like that you know it's I think it's a bit a bit more shaky than that to those first I started as a salesman because that's why you always stopped you know as a salesman to for one year when a healthier then I did some marketing finally. And that was a bit turbulent you know. And once I was cooled by the big head of H.R. at lawyer at that time. So I was a bit afraid because I thought that maybe they were going to fire me or something and the guy said the strike all we want you to go to Greece and take over a subsidiary as general manager. So I was extremely proud happy surprise 24 years old 24 year olds. I went there and then I realized number one that the business was extremely tiny number two in a terrible state. But number three more importantly that in fact the people that I have proposed a job to almost everyone and that no one wanted to take it because they were not crazy. I was the only one bit. So you did the job. Yes I loved it. And you must done well have because you you got promoted. What did you do next. After that I came back from I spent five years in Greece. I loved it. And really what's interesting is that I really learn everything in Greece . I learned I learned marketing sales human resources finance . That's right. By the way my finance and I'm good. And then I came back and and I became a general manager of the L'Oreal Paris brand in France and later you were put in charge of Asia and went to Asia started all the subsidiaries in Asia in China Korea China for example. People were using cosmetics and other kinds of beauty products that just weren't using L'Oreal. Right at that time no because we had no new and no subsidiary no team no nothing. And by the way it was a bit late because we started everything in 97 which was a bit late. Many competitors was already there and so we started with a team of 10 people in an apartment. And I'm very happy to say that now we are number one in China. And China is a major part of our growth and business . And then after China and Asia you came to United States you were put in charge United States. Yes. And was your English perfect then as it is now. Thank you for the first SEC. For example SEC it is still difficult for me. I have a few words that are still difficult. It's pretty good. But I'm working on it. How long did you live in New York. Five years. Yes. In fact I had just arrived there. I just arrived two days before September 11 and they said you know I told my wife before I came here you know we'll go to New York it's fantastic you love it it's safe it's quiet it's easy. And in fact we arrived the weekend before and the kids started at school the day before . It was a Monday and September 11 happened on Tuesday. So you later moved back to France and you became the CEO in 2006. Yeah . And the chairman and CEO in 2011. Yes. And since you've been the CEO the stock is up 200 percent more or sorry. OK. 400 percent 400 percent. OK. Wow. That's pretty good. And it's not finished OK. And the market value of your company today is about 140 billion dollars. Yeah. What was it when you took over four times this. Okay good. People are happier when they use your products. Absolutely. And the happiness quotient is very very important because we also are very convinced fly out that it's great. It's a great industry . You know it's it's a great job. You make by creating beauty products you make you make people more happy you make people have a better self-confidence self-esteem. It's a very positive thing . Let's talk about some of the things you did. Now one of the things that you've been very focused on is gender equality. Yes . And today you know two thirds of the employees at L'Oreal are women and it's 50 percent of the board. It's one third of the executive committee it's 50 percent of old management companies . And so we we are really doing everything we take some of your other major competitors. I know a few women to mention them but other very good companies like EV They water or Unilever. I heard about them. Yes. I'm putting the products that the CEOs are often men and they people in charge of the beauty products are often men even though they don't use the products. Does that strike you as somewhat unusual or is that going to change in the future you think. Yeah it's going to change. Of course it's going to change. You know I'd say it was at beginning the more more men and definitely know in the next few years women will take over. I mean that certainly made maybe not the very next future but certainly women would become a CEO of L'Oreal unsustainability. That has been another major push yet. What are you trying to do in sustainability and what are you trying to do in terms of your carbon footprint. The Carbon Disclosure Project the CDC which is really the authority in terms of environment as well as L'Oreal for the third year in a row the triple A recognition a for Forest for water for carbon impact. We are also on this matter recognize that the number one company in terms of sustainability one of your other pushes has been for strong ethics why is ethics so important to you . When I took over as CEO I understood that ethics would be something very important full for the future. And again you know I decided with the team that that lawyer should be could be number one in ethics. If I may say two words here is that of course you know if you think of lawyer. It's not that difficult for us to be a great company in Denver sustainability ethics he's not really a problem in our industry and gender equity also . But we could have said OK it's not difficult for us so let's forget it and do something else in the country. What we said it's not that difficult so let's be exemplary and let's be the number one and do well. OK so let's talk about some of your products your brand names. Yeah. Do you have the L'Oreal brand name is that what you sell a lot of products under that name . It's 25 percent of all sales. You know we have 30 more brands 35 international brands and. And loyalty is just one of them . And in fact it's the only brand that we didn't buy. It was the brand that we started with. And all the other brands that we have to put for you well both at the time. So for example this is land com you bought that. Yes. And is that your upscale or not upscale. Of course. It's beautiful. Look it's it's very upscale and it's extremely successful. It's the number one luxury beauty brand in the world now. So very successful whatever that was another brand here. Urban decay. Yes. Now that doesn't sound like a name for somebody that's going to say this is a great product. It's I can't say it's not usually a word that means something like it's a white house urban Nikkei a good name. It's I agree it's a bit surprising. But clearly it's not for the same consumers and the consumers who love local whom they don't usually indicate. But you know it's pretty edgy . Pretty surprising. It's pretty disruptive. So there is a segment of consumers who love that. And now Maybelline you own Maybelline. Yes. And where does that sold. Does that sold in department stores. No it this is sold in in drugstores mass stores Walmart Target. So like if some a woman is in front of you and she's wearing Maybelline lipstick could you tell it's not L'Oreal mint lipstick on then which can you tell the difference in the brands not from far away but I guess that's the point though. OK. You know I can have access to the bag . So all you have all these products and you're a man is you don't use a lot of these products. Presumably your wife maybe uses some of these buckles. You don't use all these products. How do you make a judgment about whether it's a good product not who actually makes these judgments for you. The president of the brands you know we are we are pretty decentralized. We have an organization that lie out of where we are strategically concentrated but operationally very decentralized. So there is for each brand a team what we call international marketing team and there is a president for the for each brand. So they don't have to come to you to get each product approved or no. No . And is your wife sample any of them for you or she couldn't try you to the thousands of product that we are launching every year no matter how old a woman might be she could be over 100. She's still using cosmetics and makeup and so forth. Absolutely you observe that as well. Yeah. Yeah. Yeah. And by the way it's a great opportunity because with the aging of the population for the beauty industry and for Laura particularly it's fantastic because not only of course the longer you live the longer you will use beauty products but also the older you are the more you need great quality products. So people are happier when they use your products. Absolutely. And the happiness quotient is very high but it's it's very important because we also are very convinced that lie on that that it's a great it's a great industry. You know it's it's a great job. I mean you you make by creating beauty products you make you make people more happy you make people have a better self-confidence self-esteem. It's it's a very positive thing. So do you think anybody can spend too much money on cosmetics. No. You know it's not expensive. No. You know that's the sort of good thing is that the budget that is allocated to a beauty product is very limited. It's between two or three percent of your of your income. So it's it's OK it's fun and it makes your life more beautiful. I think it contributes a lot to your quality of life . It's I think it's a cheap way to improve really your quality of life. So what products do you have for people who are men who are in like in their 60s who don't want to look like they're in their 60s what do you want them killed. Oh we're like kids it's fantastic. And kids is an American brand you know we we both it should do for you. Sorry. What does it do you mean for me personally for me. OK. So what about everything. What's the best way to get a job with L'Oreal. Call me huh. That might be tough to get a hold of you but I don't know. Very easy. You know you can e-mail me and I look at my e-mails every day and I answer them every day directly . So let's just talk about France for a moment because Americans are always interested in France. We talked earlier and like all French people you take four week vacation. Is that a requirement and b French to take four weeks cause when you want to get somebody in the office in August in Paris you can ever get them in the office. So what do you do. How is that is that a customer or something and then is mandatory weeks off. No but it's it's a habit. But you know when I was here I used to take two weeks vacation and that was it when I was in Asia. I think I didn't take any vacation and when I came back to France I thought that this French were crazy to take four weeks vacation and I have to say that after a while I like it. You know President Macron. Yep. So like when you're with President Macron and his wife does she ever say no. Larry our product . Good one for me or just a good product. Have any she never asked for any beauty tips or I can say that. Brigitte my whole loves the L'Oreal products. OK. I'm serious. I was there in fact the last a week and she had all already had that. So I wanted to ask you today how do you think the U.S. French relations are. I think the relations between between French and American are excellent at the political level. They may be a bit different but I think it's not the most important the most important is the quality of the rich changing relationship between the people. I had the experience when I was here in in 2004 there was a time in 2004 when there was this you know this French bashing story with the freedom fries today. And and even at that time when the relationship in terms of political agenda was tough. The relationship that the people level were always great. So for a lot of business people in France and other places you're a role model. You've done a terrific job with L'Oreal. What would you say is the secret to being a good business leader if I know that for me the most important thing is to love what you do. You know I was very lucky because when I joined L'Oreal when I was twenty one after a few weeks a few months I knew that this company was made for me. You know it was obvious. And when you when you when you feel like that when you love what you do when you so happy to wake up every morning and do what you have to do. I mean I think that after that it's it's an easy easy Johnny. So do people always try to get free products from you. I mean another way you know lots of people say I'm having a show or having some charity thing and we'd like some free products you have a division that just decides whether you give free products other things or not. You know what . When they want free products from us it means that they like them. So it's OK. We encourage that. All right. Here's some questions if we could. How is L'Oreal approaching e-commerce especially with products that are difficult to market digitally for example color match Foundation's perfume and how do you compete with nimble digitally native brands that are building engage communities online. How about we compete very well you know for for example in China we e-commerce is representing for example for file mass products almost 50 percent of the business globally speaking our e-commerce has grown by 40 percent last year which is fast moving much faster than the new market itself . And it represents now more than 10 percent of all sales so in fact we are competing very well. What's the best way to get a job with L'Oreal. Call me ha ha. That might be tough to get a hold of you but I've got no. Very easy. You know you can e-mail me and I look at my e-mails every day and I answer them everyday directly. So it's very easy a job well done. I go a lawyer that come. Somebody somebody wants. Not an entry level job. They want a senior Navy whatever job. OK. So can you tell if a woman comes close to you and she's got perfume. Can you tell if it's a L'Oreal brand perfume perfume. Yeah. Nobody else nobody is not always but normally is. And if she's wearing you know cosmetics you can pretty much tell if she's wearing a L'Oreal. It's a bit more difficult. You have to get very close which sometimes is a bit tricky. Is there anything that makes you nervous at night you can't sleep because the world has a troubled in certain areas within your company. I think that my number one strength is that I sleep very well. I sleep eight hours a night and every night and nothing wakes me up. Really . Yes. Maybe maybe to not say this but the truth. Well you're very fortunate get to sleep that long. OK I so that I saw that the jet business. Yes. I interview him he said I see hours ise what he needs a night. But yeah he's still younger when he gets in his late 60s I doubt he'll be able to make it through the night sleeping without waking up but OK. You never know. So I want to thank you very much for giving us an insight to what it's like to run a major beauty products company. And I want to thank you for all the advice you've given me about things I could do to better. Thank you for having me. Great. Thank you . Academic .

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The David Rubenstein Show: L'Oreal CEO Jean-Paul Agon

David Rubenstein sits down with Jean-Paul Agon, chief executive officer of L'Oreal SA, for a wide-ranging conversation about the beauty industry. The interview took place on Feb. 20, 2019. (Source: Bloomberg)

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