The good fight

Paul Charron has never done things by halves. After 12 lucrative years at the helm of Liz Claiborne Incorporated, the American businessman is now revealing the secrets to his full-bodied success, as Assia Benmedjdoub discovered.

When Paul Charron briefly reflects on his experiences as a naval officer in the United States army, the enigma that is his business complex finally starts to make more sense.

How does a man who, prior to being appointed as the CEO of American apparel giant Liz Claiborne, have no industry experience and yet still manage to double a fashion company's sales to US$4.8 billion ($A6.1 billion) a year?
How does a self-confessed fashion frump manage to seamlessly stitch together 43 distinctly different brands under one company umbrella? Quite simply, this straight talking businessman approaches the fashion game in much the same way a military man approaches his - with every detail considered.

"Over the years, I have argued that the greatest virtue a manager can gave is the virtue of objectivity," Charron revealed at the recent L'Oreal Melbourne Fashion Festival business seminar. "That is, the ability to perceive things the way they really are and not how you would like them to be. What I found in 1994 when I joined Liz Claiborne was a company that was not evolving."

What Charron also found in 1994 - the year he was officially appointed as CEO of Liz Claiborne - was a company that had $2 billion in revenue spread over four brands. What he ended up with was an empire that ended the last financial year with 43 brands and $5 billion worth of annual revenue.

Although Charron attributed the company's success to several key factors (see Charron's seven commandments below) a point he continued to stress throughout his presentation was the importance of technology. Within his first five years at the helm of Liz Claiborne, Charron systematically overhauled the company's computer systems, reconfigured distribution processes and streamlined its supply chain management.

"Just as the central role of technology can not be overestimated, neither can the rate in which technology advances," Charron said. "Creating state of the art logistics and systems is not a once done and once over job. A leading fashion company needs the best of technologies at all times."

Conversely, Charron said he also placed great importance on "institutionalised collaboration"; where employees were not only encouraged to communicate ideas and strategies but were in fact obliged to. In 1994 Liz Claiborne began to stage regular, comprehensive quarterly reviews of each brand, each division and each department of the company. Alongside these regular meetings, heads of each division were also given greater responsibility to manage more elements of the business.

"In relatively short order, we changed the entire compensation program of the company to a pay-for-performance model. This was not only productive, this is the way all great companies operated. You don't pay for effort, you pay for results."
An interesting strategy given the fact Charron credits his corporate history at Procter & Gamble for this generalised, albeit successful, approach to business. In fact, throughout his 12 years at Liz Claiborne, Charron said he rarely played the fashion game and instead, preferred to focus on the corporate elements of the company.

"We spent a great deal of time studying companies like Johnson and Johnson, Proctor and Gamble and Estee Lauder. We actually learned a great deal more studying great companies like these than we did in analysing relatively good competitors closer to home."

The pay off was swift and considerable. Over the following 10-year period, the company had an uninterrupted run of 40 consecutive quarters of constant increase in sales and earnings per share. Today, the "The company's diverse portfolio allows it to appeal to all consumers regardless of their attitude, the size of their pocket books or where they choose to shop," Charron said. "The diversity of this approach allows tremendous flexibility for the company to adapt to fashion market changes."

Now boasting 43 brands across the womenswear, accessories, menswear, activewear and homeware market, it's probably safe to say Liz Claiborne has got her ground just about covered.


Charron's seven commandments

1. Product - "If [you] do product right and screw up every other category [you] can still have a future."
2. Understanding the consumer - "Great companies always have a superior understanding of their consumer target."
3. Value - "Value, whether real or perceived is increasingly important. Product has to be both well designed and well valued."
4. Focus - "I find that [companies] are trying to do too many things at once - focus on things that are critically important to get the entire organisation working."
5. Cost - "Cost reduction, on an ongoing basis, is always a hallmark of a great company."
6. Technology - "I have always been, and will continue to be, a firm believer in technology as an enabler and facilitator that takes the cost and complexity out of a business."
7. Creativity - "It is the people principle. People come up with good ideas - you don't find them on a computer, you don't find them in technology."