The Sweet Smell of Success


As a globetrotting exec with an interest in foreign cultures and a knack for picking up languages, German-born Bernd Beetz is always sniffing around for a new challenge, no matter the location. His latest has brought him to New York-based Coty, the global fragrance and cosmetics company. Beetz (pronounced Betts) signed on as chief executive on May 1 and allowed his predecessor, Peter Harf, to take on the chairman role at Coty, a unit of German concern Joh. A. Benckiser.

Coty is the name behind 4 of the 10 best-selling mass-market fragrances (for men and women combined) in the U.S., with brands including Stetson, Adidas, Vanilla Fields, and The Healing Garden. One of Beetz's goals is to increase the number of people who spritz themselves with Coty's more exclusive fragrances, names like Davidoff, JOOP!, Jil Sander, and Isabella Rossellini's Manifesto. The "prestige" biz represents only 31% of Coty's worldwide sales, vs. 69% for the mass scents.

Beetz is hoping to turn big-sellers in one region or another into hits worldwide. He's also looking to further expand Coty's reach outside of Europe, which accounted for 56% of its revenues in 2000 (the U.S. made up 30%).

Bottom line? The 50-year-old Beetz, whose trim, suave looks could probably land him an audition for a James Bond role, is seeking double-digit sales growth over the next two years for the privately held group, which last year had $1.7 billion in sales. Based on his recent track record, he has a shot at accomplishing the mission. At LVMH's Parfums Christian Dior (France) in Paris, where Beetz served as president and CEO prior to joining Coty, business rose 40% and profits doubled during his 2 1/2-year tenure.

After graduating from the University of Manheim in 1974 with the equivalent of an MBA, Beetz went to work for Procter & Gamble at the age of 23. He hopscotched across Europe during his 20 years at the consumer-products giant, with stints in Paris, Frankfurt, London, Istanbul, and Geneva. Beetz rose to division manager for P&G's European paper and towel business, as well as for its European health-and-beauty business, before Chairman Bernard Arnault lured him to LVMH.

Beetz recently talked with BusinessWeek Online's Eric Wahlgren about what it takes to be a global manager, and how to smell nice while you're at it. Here are edited excerpts from their conversation:

Q: You have some 8,000 employees in 28 countries. What's your way of communicating Coty's goals or vision to employees all over the world?

A: For me, it's very important to establish a clear vision -- a vision for the company and a program for how to realize that vision. I've put in place an internal communication program, in video form.

Basically, I'm putting a message on video quarterly. This is delivered by managers in the subsidiaries and the units. They prepare a question-and-answer period to deal with the material and the message. The feedback out of this discussion gets back to me so that I have a good understanding about how my message arrives, what kind of questions arise, and what clarification I have to put in the next one.

Q: What are some of the other challenges associated with managing a company that has such a wide breadth of operations?

A: Well, there are a lot of country holidays to keep in mind. No, seriously, you have to develop a very strong business plan and to be really able to drive these messages down the organization very effectively. In our case, one of the challenges is really an advantage. We have great cultural diversity here. We are a truly cosmopolitan management group.

Q: Do cultural differences ever get in the way?

A: The CFO is American, the HR director is American, the operations manager is Indian, the executive vice-president for ideas and image is American, the head of Coty Beauty, based in the U.S., is French, and the Lancaster Group president is Danish. So, I think it's a healthy mix. I was educated and raised in Germany, but I worked for a long time in an Anglo-Saxon business culture with P&G. Then I left to work in a very French organization.

As I work with my teams, I find many more similarities than differences. I think what's very important to people is to have a very fast and clear understanding of what the vision is for the company. Where do you want to go? And then, you have to have a very fast and clear understanding of the divisions. Who has to do what? And what are our responsibilities and what are our accountabilities?

And then, you have to have a clear list of priorities and projects. If you leave too much room for speculation, too much room for infighting, you don't get moving. You very fast get in a situation where things are not very predictable.

Q: Coty has been trying to foster an entrepreneurial culture. How does one go about engendering a startup-like culture at a larger organization?

A: To start with, we have a less-entrenched culture than any of the other big players, so we have more room for people to carry out their tasks. And we encourage lots of people to take risks. We don't punish people for taking risks. Our [partnership to develop fragrance and cosmetic lines with Spanish lollipop maker Chupa Chups] is a perfect example of this. The idea sprang from the group-manager level. They came forward and said, "We're clear about your mission. You want to have a lifestyle orientation for your products. Here's an example."

Q: What was your first reaction? What do lollipops have to do with beauty?

A: Yes, it's not straightforward. But it leads to a kind of interpretation of something fun, which is a lifestyle. I think we have the kind of company that can see the positives of that.

Q: While we're on the subject of unusual products, Coty is apparently developing fragrance and cosmetic lines for NASA for use in space. Why would someone want to wear make-up or smell nice in space?

A: To look more beautiful, to enhance your quality of life. It's important for a person. We are testing with NASA our products in extreme conditions. Ultimately, they will be used in space.

Q: Back on earth, I imagine that many global managers must decide whether to manage their businesses by product line or by geography. What works best in your opinion?

A: I think managing by projects. Projects can be overlapping. You have to have a clear strategy and vision for the company. And then, you have a marketing program and a product program. My personal opinion is to have and to manage key projects. Each project team has to see what kind of contribution they have made to advance the vision and progress of the company.

Q: I'm curious about the sacrifices you have had to make to have a global career.

A: Well, let's talk about the positives first. I started in Frankfurt. I lived in Paris. I lived in Geneva. I lived in Rome. I lived in Milan. I lived in Istanbul, London, a stint in Cincinnati, and then in New York. So you get a lot of feel for different cultures. You pick up languages. You enjoy the cultures. This is a very enjoyable thing. So, for me, it is invaluable as a cultural experience. You enjoy Paris much better because you speak the language. You enjoy Rome much better because you speak the language.

The downside is that you start to live like a gypsy. I live here and there. You see your family much less than you would otherwise. You see your parents much less than you would otherwise. There are sacrifices. I live in New York with my wife because I'm lucky enough that she always follows me wherever I go. And my children are grown up. They live in Germany to pursue their studies. But they had to change schools a lot when they were younger.

Q: What advice would you give to someone who had just graduated from a business program like you did -- in the U.S., Germany, or elsewhere -- and wanted to become either a CEO or a senior manager with a global career?

A: Be clear on what you want to get out of life. And it's a very conscious decision to make. If you want to be a marketer, like I did, you might want to be in a position where you can really create products. Then you have to start with a company that provides enough training opportunities and growth opportunities to form you in the first 10 years.

After that, it's up to you to decide. Do you really go for big jobs? In today's world, you have to be prepared to change countries and to get international experience. Because I cannot see any top manager in today's world who doesn't have multicultural experience on different continents, in different countries, and in different categories. I think there's no way around it. It's an absolute must. And you should plan for that, and your own company should support that opportunity.

I wanted to be in marketing all my life. That's what I enjoy. At P&G, I worked, basically, in all consumer categories that P&G has. And there are a lot: detergents, paper, and what have you. But I like the beauty industry because it is all about people and working with teams. The marketing portion in cosmetics is much greater than Bounty. And it's so lively. It is driven by people. It is conceptually driven, and it is marketing driven.

Q: Well, speaking of marketing, here's a chance for a plug. Do you wear a Coty fragrance?

A: Yes, I do. JOOP! It's a fantastic fragrance.


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