LVMH is one of the world’s leading luxury goods conglomerates. With brands that include such names as Christian Dior, TAG Heuer, Sephora, and Louis Vuitton, its 2016 revenues reached over €46 billion.
Ian Rogers is the Chief Digital Officer at LVMH. He joined the company from Apple, where he was Senior Director of Apple Music. Prior to that, he was the CEO of Beats Music, which was acquired by Apple.
The LVMH Model – leveraging the entrepreneurial spirit of each company
What are your core responsibilities as Chief Digital Officer at LVMH?
LVMH is a holding company with 70 different companies under the same umbrella. These 70 companies come under four broad segments -fashion leather goods, perfumes and cosmetics, wine and spirits, watches and jewelry. The key word here is “holding”. LVMH is not centrally managed and the companies in the LVMH group are quite independent.
My role as Chief Digital Officer is about trying to find the ways that each of the companies can take advantage of the collective scale of the entire group, while helping to manage the individual digital transformation of each. We are not about building centralized platforms. It’s more about making sure that each of the companies has the resources they need to be successful individually, while taking advantage of the collective scale whenever possible.
From a digital perspective, what are the advantages of having a portfolio of companies?
You have a true entrepreneurial spirit in all LVMH companies and this creates natural competition between them. And when there is natural competition and success, it’s really contagious. If an individual or a team sees success, then everybody else wants to know what’s going on. They want to know why their approach is working, and how they are making it happen, so they can apply this new approach to their own part of the business. We have a lot of diversity in the group and we all learn from each other. We certainly do not want to take away the entrepreneurial experience from any of the brands.
Do not put “digital” in a corner – integrate it in everything you do
Why do you think many traditional companies often struggle with their digital transformation?
Digital is a capability that should exist across the organization and across every single team. Some companies tend to view “digital” as something different, separated from the rest of the organization. And this is the biggest mistake you can make, saying “let’s call it digital and put it in the corner”. At Apple, talking about “digital” is like talking about oxygen. It is so pervasive that you don’t talk about it anymore. The big moment for a company is actually when they get rid of that top-level digital role and integrate it into the core of their organization. There is also a governance challenge. Technology should have a much more important role in companies and this should be reflected in the organizational structure. A CTO, for example, should be reporting to the CEO, not the CFO.
“At Apple, talking about “digital” is like talking about oxygen.”
How do you percolate learning across the organization?
Communication is the key. It is a big part of my job. You need to find a consistent rhythm to your communications: make people buy the vision of the company and your expertise. And most importantly, you need to go out and talk to people – this is my favorite part of the role.
Digital transformation: a cultural change – not a technical issue
What is the key tipping point in a digital transformation?
The big moment for an organization is when they have embraced the fact that digital transformation isn’t a technical issue, but a cultural change. Organizations need to accept that digital culture is something that they really need to invest in.
How do you make sure that digital is actually embedded in the whole organization?
There are multiple ways to tackle this but one thing will definitely help: the leadership team needs to realize that there is no such thing as a “digital” P&L. Offline marketing leads to online sales. And vice versa. You need to look at the whole picture. In other words, look into digital and physical metrics side-by-side. And at this point, very few businesses are doing that.
How do you think organizations should go about driving a digital culture?
At LVMH, we allow each brand to take its own direction and evolve over time. There are two broad strands to it – one is the people side and the other is the technology side.
We have an entrepreneurship initiative that’s happening from the HR department. The objective is to see how we can upgrade the culture, becoming more entrepreneurial from the inside-out.
The other side of it, which I am responsible for, involves building the craft of software development inside the company. It is about trying to bring some of the innovation that would have been previously outsourced to agencies or partners and getting it all in-house.
One of the other advantages of being a very diverse organization is that we have a lot of homegrown projects that are almost like startups. If you couple that with the fact that we have multiple investment arms, we have the flexibility to experience a lot of innovation first-hand without having to go outside.
Do you think organizations need roles such as a Chief Digital Officer in order to drive the culture change that is required in digital transformation?
I predict that in ten years’ time, the Chief Digital Officer title will go away. It is a transitionary role. It is the role of a change agent. You need it right now because you need people who understand the levers of innovation that large organizations have, but which they don’t utilize. But over time, these “digital” titles should be fully eliminated. The bottom line is that you need a strong technology person who reports to the CEO and whose job is to move at Internet speed and enable the rest of the company. Technology is behind the scenes and touches the consumer everywhere. What this means is that organizations are increasingly interfacing with their customers via software.