back to the list send to a friend print


- 2 Aug 2010

Making digital human



Who can bring the luxury industry up to digital speed?


When asked to describe what the most important issue facing HR in the luxury industry is today, one word kept resurfacing over and over again — digital. In what was an otherwise diverse offering of feedback, many luxury professionals said they were struggling to keep pace with the latest digital developments, while others mentioned colleagues who were not yet sufficiently skilled in the digital environment. Another common concern expressed in our survey was whether the digital strategies being pursued by management are consistent with the company mission.

Considering all the changes that have been thrust upon people in sales and marketing since the digital revolution first swept across the corporate landscape, it is understandable that luxury companies have been focusing on their needs first. But while companies were in the vortex of hiring social media whiz kids and re-educating sales directors about the intricacies of e-commerce, some of them may have lost sight of the bigger picture.

Digital is no longer the hallowed preserve of these frontline departments. It is touching every job along the value chain and transforming the way that everyone works inside the organisational hierarchy. Even the architecture of the hierarchy itself is being redesigned. Now that digital prowess is such a crucial factor in keeping luxury companies competitive and profitable, knowing how and where to embed it has become the holy grail of human resources in 2010.


Do you need a chief digital officer ?

Although it may not be the first question that comes to mind, asking whether you need expertise at the very top can help companies to set their wider digital agenda. Many pioneering organisations outside the luxury sector have made it a priority at board level. Last year, for instance, Kodak hired a Chief Listening Officer and, more interestingly, this June the city of New York launched a recruitment drive for a Chief Digital Officer (CDO). The new position was advertised on the Facebook page and website of the city’s entrepreneurial mayor, Michael Bloomberg.

Firms needing to adapt most urgently to the digital environment were the first to appoint CDO executives, namely those in the media, advertising and marketing sectors. But consumer goods brands — including those in the luxury sector — have been slow to adopt this holistic approach, one where businesses are restructured from the top down.

“The CDO is now expected to oversee what once were multiple divisions of companies,” said Jonathan Sackett in an interview with OMMA magazine, shortly after he was appointed CDO of the global ad agency, Arnold. “To be a chief digital officer type of position, you can’t just specialise in web or mobile or creative or strategy. You really have to be fairly knowledgeable in each of those silos.”

According to HR expert members of Luxury Society, it is still too early to tell whether this model translates well for the multifaceted, multi-sector luxury industry, where digital means anything from search engine optimisation to hotel bookings via smartphone apps, to monitoring Twitter feedback on the timely delivery of handbags.

“I think a C-level digital person may be a bit of overkill,” says Shenan Reed, founder of Morpheus Media. “However, digital should be a very high role. Ideally you have one person in charge of your digital communications and someone else in charge of digital media strategies.”

Reed, whose interactive marketing agency serves luxury clients including LVMH, Bergdorf Goodman, Kerastase and Lebua Hotels & Resorts, does believe that companies with an “in-house digital advocate” close to the top of the pyramid are in a better position to reap the benefits of outside consultants. “As self-serving as it might sound, the ideal world for us is when a client already has a great digital person on board,” she says.

Burberry, for one, is often recognised as a digital luxury leader thanks in part to following this model. With two enthusiastic advocates steering the company, CEO Angela Ahrendts and chief creative officer Christopher Bailey, the firm has intertwined creativity, technology and management in a way that has helped generate consumer interest in Burberry’s products via its digital projects. Through their Art of the Trench crowdsourcing site, a 3D Livestream show, and, most recently, an interactive digital ad campaign, Ahrendts and Bailey have facilitated collaboration across several functional departments, making everyone work together in the name of digital innovation.

Maxine Martens, CEO of the executive search firm Martens & Heads says that, for now, instead of recruiting a single visionary to oversee everything related to digital, most luxury companies are relying on an organic up-flow of “wildly passionate individuals” within the various departments.

“What they are doing is taking people internally who have been the ones pushing for innovation and consumer interface and putting those people onto platforms where they can impact the company differently,” she says. “Much of digital is how much individuals personally adapt to it, embrace it and then devise a way to apply it to their business. So internal people don’t just have a formula, they see a pressing need and then they find the resources for digital innovation within the company.”


Inside, outside or outsource ?

Leaving it up to employees to take the initiative and upskill themselves, however, is a gradual process which has prompted many eager companies to look for an alternative quick fix by pursuing talent outside the luxury industry.

“Where else are you going to go but outside the luxury industry?” asks Moira Benigson, managing partner at MBS Group executive search. “Sure, there are a number of high profile digital luxury businesses which are thriving and nurturing specialists in their ranks. But let’s face it, they are still in short supply. You’d have thought that there would be a pool already out there considering that we’re nearly 15 years on from the era of Boo.com, but it’s not the case.”

“The challenge with recruiting outside the industry though is that you really do have to find digital people with an affinity for luxury. You can inspire people to find that affinity but you can’t instil it if it’s not intuitively there.”

Likewise, it is affinity in the other direction — the kind that luxury executives feel toward digital — which can be significant in determining how assertive or effective they are in recruiting the best people.

Karen Lombardo, EVP of Global Human Resources at Gucci Group, points to the CEO of Stella McCartney, Frederick Lukoff, as an example of a digitally-savvy executive who, because of his early career at Apple and Cisco Systems, knows where to go to find the right recruits.

 Of over 1000 members surveyed by Luxury Society, more than 75% feel very or extremely prepared in digital skills but less than 35% feel very or extremely satisfied with the formal digital training on offer. 

Outsourcing the digital function to external agencies is another option. But this approach poses at least two risks that need to be weighed against potential rewards. The luxury industry revolves around a unique consumer culture which not all agencies can translate into a fruitful partnership, leaving only a select number of them suitable for serving a luxury clientele. And furthermore, relying too heavily on outsourcing can also compromise competitive information.


How to improve overall digital capabilities?

However successful companies may be at cultivating digital experts internally or luring a ‘guru’ in from outside, one area where many are failing is in addressing the skills gap that exists among employees who are not specialists. Over a very short time span, the digital know-how needed by employees at every level and lateral of the luxury industry has increased dramatically.

Although many professionals in the luxury industry are increasingly confident with the digital aspect of their jobs, they are often unhappy with the relevant training provided by their companies. Of over 1000 members surveyed by Luxury Society, more than 75% feel very or extremely prepared in digital skills but less than 35% feel very or extremely satisfied with the formal digital training on offer.

“Luxury brands should take the time to allow digital to be trained throughout the entire organisation to bring everyone up to speed,” says Reed. “Bringing an agency or someone in can work wonders.”

Benigson agrees that luxury companies should be doing more. “I say educate your people properly in digital. Anything from giving everyone an iPad to doing job swap schemes with a digital company, be it eBookers or eBay or whatever, so that luxury professions can really learn how things are done,” she says, suggesting that one of the luxury groups could sponsor a specialist degree programme in digital luxury to improve the talent pool of the future.

A blinkered approach to digital — one of nurturing experts without sufficiently upskilling the rest of the company — has led to a situation where some employees are left to fend for themselves through ad hoc training and self learning to fill in the gaps.


The recruitment revolution

As if it weren’t challenging enough, the digital skills gap is often confounded by another gap — the generational gap between recruits and recruiters. And nowhere is this more apparent than when filling social media management positions.

“HR executives need digital and social media training to gain the knowledge to properly evaluate applicants’ skill set,” said one survey respondent. “In recent job interviews, I’ve had to inform the interviewer what mobile, digital and social marketing entails, and have often found that companies have no means of evaluating these success metrics.”

This view is echoed by others who say that many HR professionals haven’t fully come to terms with the fact that reading the ‘social media CV’ is an altogether different proposition to the way candidates are conventionally assessed.

“It’s no longer about the paper document,” explains Reed. “It’s about that person’s Facebook page, LinkedIn account, Twitter account and so on. They must practice what they preach and, unlike most business schools’ advice, you want this person to be as active as possible in the social space.”

According to Reed, the number one question asked by her clients about social media is how to staff for it. “Do I need a 22 year old kid? Or someone with editorial expertise who can be the voice of my brand? What are the skills I’m looking for in hiring someone to work on social media for my business?”

The answer to these questions, she says, lies in asking questions back to the client to find out what the company wishes to accomplish from its social media presence.

“Do you want to listen? Engage? Grow community? If you are looking for a Chief Listening Officer, then you want someone who understands the online tools that track social buzz and who is efficient and can multi-task.”

But to grow a brand’s online community, on the other hand, the right candidate might have more of a marketer’s profile.

“If you want someone to engage with your audience, then you should hire first for the ability to be passionate about your brand. This may come from the inside or you may find someone already passionate about your brand from the outside who you can bring on board.”

Recruiting for social media can sometimes be what Terry Kane calls a “self-selecting process.” The director of digital strategy at the Jumeirah Group recently revealed to the Hotel Marketing Strategies blog that much of his recruitment is done via queries made to the company’s social media pages and website. He also advised that, when it comes to social media, companies might be wise to consider hiring more based on a candidate’s personality and technical aptitude — rather than getting too bogged down with an exhaustive check-list of skills.

“Hire geeks,” Kane offered. “Hire the type of person that admires the entrepreneurs that have made it like Jeff Bezos, Steve Jobs or even Bill Gates — people that built companies from nothing.”

All these recommendations, however, without an intimate understanding of the brand and product, only go so far in prescribing digital recruitment criteria. Since it depends on company scale, sector, cachet and countless other factors, the reality is such that experimentation will play some part in finding the right HR strategy for virtually every firm.

Much of the uncertainty over how human resources should be organised for digital stems from the fact that the luxury industry is a late bloomer. Until the industry acquires greater dexterity and fluency in its use of the tools, channels and culture ushered in by the digital revolution — and indeed, until the dust begins to settle around the revolution itself — the HR mandate will remain somewhat ambiguous. In other words, luxury brands first need to define what digital means for them and for their customers before they can find the best people to serve them digitally.