Former CEO of Burberry and SVP of Retail at Apple shares insights about her approach to brand storytelling.
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Charlie Melcher: Welcome, Angela.
Angela Ahrendts: Thank you. Thank you, Charlie. What an incredible honor to be here. The first in what's going to be a great series, I think.
Charlie Melcher: The honor is all ours. So Angela, you were the CEO of Burberry from, what was that? 2005 until 2000...
Angela Ahrendts: 2006 until about 2000... yikes... 2014.
Charlie Melcher: Nine years, right?
Angela Ahrendts: Yeah. Almost nine.
Charlie Melcher: I recall that when you joined that company, the valuation was about 2 billion pounds, and I think it was in the first five years that you about doubled that to 4 billion. Then by the time you left, it had almost doubled again to over 7 billion. That's pretty remarkable results. Because of those incredible results, you were written up all over the place as literally one of the most important and successful female business executives in the world. I wanted to ask you, I've always wanted to ask you, does that make you proud or annoyed as hell to be referred to as a female business executive when you were literally one of the most successful, period?
Angela Ahrendts: Wow. Great, big first question. It's funny, Charlie. I don't get mad, because I don't read most of it. People will send me things and I'll read the headline and then I file it. But luckily, I didn't let it impact me back then. I just stayed focused on what I needed to do, doing the best job that I could.
Charlie Melcher: Then you went on to Apple and you became the Senior Vice President of Retail and Online Stores. You were there for about five years. You just recently left. I'd love to ask you, what are you most proud of that you did while you were at Apple?
Angela Ahrendts: I went into Apple with a very strong mission and purpose. It's funny, people would ask about the job and I'd say, "I don't really think it's a job. I think it's a calling." When I started at Apple, I didn't speak the language at all. So I very quickly realized I'd have to kind of tweak the way I talked about things so that everyone else would kind of understand. And so we went on very early on, talking about that maybe the store is the largest product that Apple makes, right? The watch is the smallest, then the phone and et cetera. But if you recall about six years ago, you would walk into the store and it was all about hardware or getting something fixed at the Genius Bar, et cetera. But no one talked to you about Apple Music. There were no classes to teach you how to write lyrics, or—Apple owns GarageBand—how to create music, if you will. There were no coding classes teaching you how to develop an app or how to just reskill, if you will.
So all we tried to do was connect the dots. This is what you're doing on your product. If we're the largest product, then what's our take on how we should be using those same assets, if you will? And there was a tremendous amount that went into developing that. Yes, connecting, but there was a lot of outside research that went in too.
Charlie Melcher: So tell me about that. Did you engage some consultants or other sources to get data?
Angela Ahrendts: Yeah, we did. As we were doing all of the internal crowdsourcing, we also reached out to a couple of big consulting firms and we asked them, what were going to be the most important or the largest things impacting society over the course of the next 10 years? So they pulled a lot of data coming out of Davos, coming out of different research, et cetera. Both of them were saying that the number one challenge in the world today is isolation. All the data coming from the smart consultants said that it's worse than obesity, it's worse than smoking, it can take years off of your life, et cetera.
Charlie Melcher: Can you just explain that for a second, so that people understand it? This was one of the largest health challenges that we face, is isolation, loneliness?
Angela Ahrendts: Yeah, yeah, and the first thing people will say, “It's technology.” It has nothing to do with technology. If anything, technology has helped offset it a bit by having people feel connected. It has to do with, we've become a real smart society, so we're having fewer children. Those children were born in suburbia. They're now moving into the Nashvilles, the Austins, right? They want to go into where the energy is. And the divorce rates of people over 50 are the highest they've ever been. I can keep going, but you have all these different factors. So that was one thing, and we said, “How could we help? How could we encourage connection,” if you will? “How could we introduce people to one another when they were coming in to attend a Today at Apple session?”
Charlie Melcher: I know another one of those factors that leads to a sense of isolation and loneliness is the disintegration of certain kinds of community activities; the old “we're bowling alone, no more church picnics,” those kinds of things. Even the town center doesn't gather people in the way it used to. Was that all part of your thinking when it comes to the stores?
Angela Ahrendts: Absolutely. Absolutely. Yeah. Like you said, no community hub.
Charlie Melcher: Right.
Angela Ahrendts: There's the high school, the ball games in rural America, but absolutely. There were the local infrastructure for gathering places and we quickly came up with the tagline, "encourage connection." Our job was to introduce people to one another. So it's not a coincidence: if you attend any Today at Apple session, the first thing they do is they introduce themselves, they make everyone around introduce themselves, and it's funny because there'll be people who follow each other on Instagram or didn't even realize they live down the street from one another. It's a very soft, but it's a very intentional thing that we were doing to just help.
Charlie Melcher: I've heard you describe the redesign of the stores as community centers or town squares.
Angela Ahrendts: Yeah.
Charlie Melcher: Can you talk just a little more about how you thought about the redesign of the stores?
Angela Ahrendts: Yeah, absolutely. Because again, once you have all of this data, then you say, “We have a purpose. We're a big company and we can play a role in helping, however little it is, and no one company can solve every problem, but maybe there's a way we can partner with local government officials and the program that we create.” And the way we always look at it—because Apple is for everyone—so we always said, “We're a gathering place where everyone is welcome.” That meant young kids coming in to take classes maybe they couldn't get in school, or all ages. Then how do you make that experience come to life? And we said, “Once we re-imagined the experience, we then redesigned the store to support the experience.”
Charlie Melcher: So what I love about this is that you're suggesting that the role was not just to sell things to your customers, but actually to empower them, to enable them on their own journey of creativity and expression.
Angela Ahrendts: I never had the honor of meeting Steve Jobs, but the team members just were carrying on his legacy and they would always say that "Steve told us when we opened the store that our job was to enrich lives," and they were always to do it through the lens of education by sharing with the customer something they didn't know.
Charlie Melcher: I think it's really a brilliant approach. For one, you're using the physical bricks and mortar in a way that you can't replicate easily in the digital space, right? You're building community, you're teaching classes, you're filling in certain needs that society has. We all know how much the funding for arts education's been cut, for example. And the fact that it's sort of a democratized space. Anybody can come into that store and take those classes. What was your hope as people took classes at Today at Apple and there were sort of levels that they could advance through? What is your understanding about the goals of people who are taking those classes?
Angela Ahrendts: Yeah. And let me back up a second because there were three huge factors that we learned again, from the crowdsourcing exercise as well as from the really smart consultants. The second thing they said was going to impact society over the course of the next 10 years was automation, and the number of blue collar jobs that would be impacted, people that would need to be reskilled. The third most important thing they said was that the role that artificial intelligence and the impact it would have on what they called white collar jobs: lawyers, doctors, et cetera. Their estimations were that a third of both of those jobs could be disrupted in the next five years. So the whole, again, genesis of Today at Apple was, ”if we know this is coming, then in some little way can we come up with something?” And we said, “We can't totally reskill, but can we inspire them to learn something new?”
Charlie Melcher: What do you really think the role of a company is today?
Angela Ahrendts: I think as an executive, everyone has a responsibility. What role can you play? What role can your company play? I think that you can do it in partnership with local governments. That's what we tried to do at Apple. We're going to make an investment. Where should we do this, where we can actually help you? We did that in the top cities around the world, so that we knew, wherever we were going to invest, it would make the impact. It would help, and be better for the greater good of the whole.
Charlie Melcher: This idea of authentic relationship with customers. I know you, we've had the pleasure of becoming friends for some years now. One of the things that I'm always so struck by when you and I sit down to speak is how emotionally available, how honest, how authentic as a human being you are. That's authentic. That's really who you are, and that comes through in your approach to business. I'm curious, when you think about how companies traditionally talk with their customers, speak with their customers, how have you done that differently because of this desire to be authentic?
Angela Ahrendts: You don't overthink these things. You are who you are, and you're wired like you are, and I'm from a large family. I'm one of six, and there's six of us in seven years, and there's five girls, and it's funny because they would call you out if you or anything but authentic, right? My parents were always the same way. So I think you also learn at a young age as you're entering business, et cetera, you're exposed to so many people and you learn why you respond to certain people in a certain way and why certain people inspire you. It's probably my father sitting here ringing in my mind as well, but my father was incredibly well-read, and very philosophical, and he would quote Aristotle and different people and he would always say, "To thine own self be true. Be the best version of yourself."
Angela Ahrendts: So I didn't try to be anything that I wasn't. I connected with people who were true, who I innately trusted, who had high integrity, were very honest. I didn't want to become something else. I wanted to become the best version of me. I've learned that if I look you in the eyes, the more quickly we connect and the more quickly we trust one another, the greater the things we can achieve together. I think trust will become the greatest global currency. I think we're going to have to go back to looking people in the eyes. Voices, everything else with AI, you won't know if it's real or it's not.
Charlie Melcher: We do what we measure, right? So if we don't have any way to track the contributions that companies can make, the investing in the people in their communities, then we won't do it. Then we don't have any way to know whether we're doing a good job, or even to care.
Angela Ahrendts: Which becomes a box, Charlie. It becomes a box you tick instead of making it a part of the daily operating model of every company.
Charlie Melcher: It reminds me a little bit of Bhutan the country, that instead of having gross domestic product as an indicator, has a gross happiness metric.
Angela Ahrendts: Yes.
Charlie Melcher: And where's that? Why don't we have that as our goal for our country?
Angela Ahrendts: Everybody remembers the road sign that Steve put up at the keynote, right? “Technology and liberal arts.” It was so brilliant, but it was really his quote that has just lived on underneath that. It's funny to me that he got it so many years ago because he said, “Technology alone is not enough.” It's technology when married with the liberal arts, married with humanity, is what will impact lives and make our hearts sing. His quote was quite profound, and I remember reading it very early on coming into Apple, and when we talk about balance, we were all about technology, but he told us, he told the world, there was this whole other side and it needed to become one. I think his products were doing that, maybe just not the largest product.
Charlie Melcher: Yeah, he's a huge inspiration for so many of us. Certainly at the Future of StoryTelling, we think a lot about this, about the role that human-centric experience, and the power of stories to move us and to change us, and just getting that balance between left and right brain. I know that you're somebody who considers herself a 50/50, can analyze the spreadsheet, but also can really be an empathetic storyteller or connector. How do you think that companies can get more in balance? So much of them are either driven by engineering or driven by analytics, MBA sort of thinking, and they need to celebrate this human component. How do we re-adjust that in the corporate world?
Angela Ahrendts: It's a really great question. I think the timing of asking it, Charlie, especially with everything that we know is coming, because if you are too off balance, if you are purely operationally run and financially driven, et cetera, you will not have the creative teams with the instinctive gifts to look around corners, and I'm talking three, five years out, and to know what's coming. Again, every human is born with tremendous instincts, and some can see further out than others, et cetera, but I think for companies to get back on balance, having people who can feel and see and they just know where things are inevitably going, you won't win this next race that's about to happen without that, and that will be the only way I think that humans will be able to compete against the intelligence that we're so smartly creating. I think we're going to have to go back to it. I think even more importantly, you have to trust it.
Charlie Melcher: You're concerned about AI and the way it's going to enable amazing things, but it's also going to really shift things. What I hear you saying is that the counterbalance to artificial intelligence is emotional intelligence. It's that ability to interact with people, to have feelings, to have a high, what they call, EQ, to sort of be able to read the interaction with people and have honest connections and sincere connections and trust. So maybe we have to lean more into our EQ education.
Angela Ahrendts: Yeah, maybe we have to help create a curriculum on it.
Charlie Melcher: I love how when you went out there to think about what you should do at Apple, you started by coming from the bottom up instead of trying to go from the top down. Can you tell us a little more how you did that and why?
Angela Ahrendts: I've never been a great top down executive. I think I'm just too curious, or it's my big family and my tight knit community, but I love to listen and I love to hear. I work better when it's just uniting everyone around something so much bigger than themselves, and it's so much more fulfilling for me personally.
Charlie Melcher: If only we had more people like you running our government. Sorry. We need to get back to thinking about things that are bigger than us individually. We need to get back to thinking about our collective challenges. Tell me what you think is happening with retail today. The whole idea of retail, I mean we see these big boxes sort of empty, we see malls not having the traffic they used to have. Do you have any thoughts about where retail is heading today?
Angela Ahrendts: Physical retail?
Charlie Melcher: Physical retail, sorry.
Angela Ahrendts: I think there is still a role for physical retail. As humans, as people, we want to be with other people. I still think that you're going to need a place for experiences, whether it's just a meal, and it won't be everywhere. We are over-stored in America, but I think the big centers that have evolved where they're doing a third of their business in food and beverage today, and entertainment, they will absolutely survive. I think that the great streets and the great cities... walk Nashville, walk Austin, go to Portland. There are some exciting things happening in some of the smaller cities. There's a real resurgence, but I think the big cities need to step it up a bit.
Charlie Melcher: I remember going to one of your key stores in London, Burberry stores, and I went in and all of a sudden there were screens all over the store and it started to rain. I had this sensation of literally being in a rain storm as I watched water drops come down and pick up and go faster and faster. If I remember correctly, the sound was actually people clapping? Snapping. Right. There was an amazing immersive experience in the middle of this beautiful store driven by technology, but also driven by something so naturally human, like people snapping their fingers.
It just made me think. It was one of those early examples for me, of seeing retail transform into immersive theater, almost into experiential play. And since then, I've been seeing a lot of people doing this, a lot of different examples, whether it's something like Meow Wolf, which is not retail, but it's taking over old empty spaces and turning them into entertainment, or something like what Starbucks is doing with its roasteries, which are these incredible places to go and feel like you're at the factory, at the coffee factory.
Angela Ahrendts: Yeah, brands have such opportunities. It's funny; if more brands thought of themselves as a great story... When we started at Burberry we said, “We're not writing another novel. We're going to write some new exciting chapters of this incredible brand story that's already been told.” Everything we did at Burberry, everything that the creative media team came up with, it was all to reinforce that brand story. I used to say, “It's not a coincidence that no matter where you were in the world, the first person who greeted you at the door had a British accent,” because subliminally, that reinforced that you are now in a British brand. Why the snapping in the rain? Because Burberry started as a raincoat company, right? So it's not doing something just to do something. It's doing something that helps your story go deeper.