As Jean-Paul Agon prepared to step down as chief executive of L’Oréal after 15 years, he knew he wanted the search for his successor to be “exemplary, transparent, and rigorous”.
However, the decision in October to appoint Nicolas Hieronimus, the deputy chief executive, to the top slot has disappointed some observers, who ask why the world’s biggest cosmetics company — one that caters to women in more than 150 countries — will not have a woman as CEO.
Mr Agon, 64, is eager to explain the thinking behind the selection process. It is simplistic, he says, to think that just because L’Oréal’s brands such as Lancôme, Maybelline, and Garnier make women’s products that women are better at marketing them. He then comes to his real argument: L’Oréal’s board was guided in its choice of successor by “the principle of meritocracy”.
“Today, a man was chosen. It is totally possible that next time it will be a woman,” he says. “But it will not be a woman just for the sake of it. It will be a woman because she is the best person and the most deserving of the role at that time.”
Not only were there women on the shortlist this time around, he points out, but they have been steadily rising up the corporation’s ranks. For the first time in the group’s 111-year history, L’Oréal named a woman, Barbara Lavernos, as deputy chief executive, a post that has groomed past CEOs.
“Today, women make up half of our board, more than one-third of top management, and more than half of the heads of brands,” says Mr Agon. “Their rise is irresistible. One day or another, a woman will run L’Oréal.”
Mr Agon’s approach to leadership is patient yet demanding. Under his tenure the company nearly doubled its global revenue to nearly €30bn driven largely by expanding in Asia. These qualities underpin L’Oréal’s corporate culture.
Behind the chic image of brands represented by celebrities such as Penélope Cruz and Beyoncé, L’Oréal is known for having a tough workplace culture. In the company’s internal jargon, managers should cultivate saine inquietude, or “healthy disquiet”, among their teams, so as to see who rises to the occasion — and who sinks. The approach can lead some to burnout and exits — the company has earned the sobriquet “L’Orehell” — but others flourish under the competition.
While breeding “disquiet” may seem out of step with the softer, more inclusive management styles at many other big corporations, Mr Agon defends his methods.
“We have a saying at L’Oréal that people either stay three months, three years or 30 years,” he says. “L’Oreal has a very distinctive culture that is not to everyone’s liking, but those who do like it will really invest and thrive here.”
L’Oréal’s culture has helped it cope with the shock of the pandemic. Although sales and profits are forecast to contract this year for the first time since the 2008 financial crisis, the group has limited the damage with its strong ecommerce operation. Its shares are up 16 per cent this year, lagging a 19 per cent rise for rival Estée Lauder.
Mr Agon certainly took to L’Oréal’s ways. Growing up in Paris, his father worked in pharmaceuticals while his mother was an architect. But the young Mr Agon wanted to travel, and that partly drove his decision to join L’Oréal as a salesman in 1978 straight out of HEC, one of France’s top business schools. The other factor was his affinity for marketing.
“I thought beauty marketing was very interesting and rich since it is not only analytical and strategic, but also sensitive, creative, and very attuned to emotion, image and culture,” he says. “It is the supreme art of marketing.”
Two years after he joined L’Oréal, the company sent him to run its operation in Greece, which then had about 50 employees. This taught the 24-year-old executive how to manage people of different cultures and adapt to new environments — and also how to grow a business in a healthy, steady way.
At one of their first team meetings, he promised his new staff that he would learn Greek within a year. “They thought it was funny, but I was serious about it, and put a lot of pressure on myself to learn,” he says. “When you’re the only French person leading a team of Greeks who didn’t speak English that well, learning the language was indispensable.”
Mr Agon’s biggest mistakes as a manager in Greece turned out to be formative. His second year there was the best year ever for the Greek business. But then the third was the worst. “I had been over enthusiastic and aggressive, pushing the sales team too hard which led to a build-up of stocks in the channel,” he says.
But he kept his promise on learning the language, and came to speak Greek fluently. “I love the country, and still visit often,” he says.
From Greece, Mr Agon was on the fast-track at L’Oréal, switching jobs every five years or so, including stints to build a presence in China in the late-1990s and running North America. Paintings and memorabilia from his different postings — visible in a video call — decorate his office on the northern edge of Paris.
Living and working in different countries meant Mr Agon never got bored despite spending more than 40 years at the same company. Before Covid-19, he spent one-third of the year travelling.
Aggressive promotion of the most promising employees is a key part of the company’s culture. “Unlike many companies, L’Oréal does not give people jobs based on their past experience but rather with a view to helping them uncover and express new talents,” he says. “It can be risky but for me it was a great way to keep my enthusiasm going.”
Mr Agon sees employees as part of a “tribe” who share specific customs and codes regardless of where they are located in the world. They are “l’Oréalien” — a term that is not overtly defined but rather picked up on the job through talking and working with managers and teams.
“When you visit teams in China, Argentina, Finland, the US or Russia, you can recognise a similar energy,” he says. “The culture of L’Oréal has been transposed in every country.”
Mr Agon’s final big assignment at the company is letting go of power — though he will stay on as chairman after Mr Hieronimus steps up. Mr Agon has vowed not to micromanage his successor, explaining that when he took over he followed the company’s handover governance model and so has experience. “I’m actually quite happy about passing the baton to someone who I respect and who will do this job very, very well,” he says.
Asked whether he was looking forward to retirement, he smiles. “I don’t consider this to be an ending. It’s a transition to a new mission that I have to invent myself — as I did all the ones in the past.”
Three questions for Jean-Paul Agon
Who is your leadership hero?
Definitely Winston Churchill for the many things he did and said. I have a lot of admiration for leaders who never give up in a battle. My favourite phrase from him is: “Where there is a will there’s a way.” I use it very often, especially at difficult moments in my career and life.
If you were not a CEO/leader, what would you be?
I would have been an entrepreneur. When I was young, I hesitated between joining a big company or starting my own business. In the end, working at L’Oréal turned out to be quite entrepreneurial, quite paradoxically even though it is a big company. We’ll see, maybe in the future!
What was the first leadership lesson you learnt?
After my first overseas posting in Greece, I came back to Paris at age 29 to run L’Oréal France, which was a very big business. It was difficult at first to earn the recognition and respect of my colleagues and employees. Some of them thought I was too green. But I learnt to let my actions speak for themselves. There is a proverb I like that goes: Les chiens aboient, la caravane passe, which translates roughly to “dogs bark but the caravan keeps traversing the desert”. It basically means that when an individual is sure of himself even the loudest of protestations will not stop him. I’m sure Churchill would have loved this one.