Former LVMH CEO on Why the Apple Watch Is a Failure and ‘The Business of Aesthetics’

The roster of media mavens, moguls and boldface names spotted today at Michael's.

DianeClehaneLunch_FeaturedWhere else but Michael’s could you expect to find the patron saint of the St. Tropez suntan George Hamilton, Patty Hearst-Shaw and Lady Gaga’s mother, Cynthia Germanotta dining and dishing among the media mob? It’s a good thing that my date, Pauline Brown, the former CEO of LVMH North America, who exchanged the board room for a classroom at Harvard Business School, was so interesting. Our far-ranging conversation ran the gamut from the lessons she learned in her first semester as an HBS professor to her take on why the Apple Watch was a marketing misfire. “Unlike prior Apple launches, it offered no element of surprise” she told me. “They spent a fortune building anticipation but [it] failed to live up to expectations. Instead of  being delighted [about the watch], customers were embarrassed.”

Dorinda Medley and Diane Clehane
Pauline Brown and Diane Clehane
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When LAK PR CEO Lisa Linden suggested we get together, I knew we’d have plenty to talk about. Pauline’s CV reads like a ‘How to Succeed in Business’ primer. Prior to joining HBS this year, she had a very successful track record in the luxury market, most recently at LVMH, (comprised of Moët, Hennessy and Louis Vuitton), where she was responsible for 70 brands including fashion, fragrance, cosmetics, watches and jewelry, as well as wines and spirits and selective retailing. She also sat on the board of L Capital, a private equity fund backed by LVMH, was a managing director at the private equity firm The Carlyle Group, and held senior positions at Avon and The Estée Lauder Companies.

Pauline arrived at noon on the dot looking every inch the luxury maven. She was, of course, impeccably dressed, enveloped in a camel Rochas coat and carrying a similarly hued Marc Jacobs handbag. My mother always told me you can tell a lot about a woman by the way she accessorizes — and Pauline’s carefully curated accouterments from Hermès, Dior, Urban Zen and a dazzling Fred ring with a huge removable stone — spoke volumes.  This is a woman who knows about the power of aesthetics.

Clearly Pauline could have scored another top spot within the fashion industry, which has been engaged in an accelerated game of C-Suite musical chairs in recent years. Why swap corporate life for academia? “At this stage of my life, it’s more desirable to be a thought leader than an operational leader. I don’t know too many corporate chieftains who are genuinely happy,” she told me. “People think the more powerful you are, the more empowered you are. I found the higher up you go, the more imprisoned you become. It’s hard to be on top in big companies.” And then there’s the gender bias. “The [corporate] structure is not kind to women. Women’s identities and possibilities have evolved dramatically in the last two generations, whereas corporate structures are still stuck in the 1950s model of operation.”

The idea for the Aesthetics course was “spontaneous,” said Pauline. When she and HBS’ Frances Frei first began talking about the kind of course Pauline could teach, Ms. Frei encouraged Pauline to “go deep” in designing the type of class that would best leverage her experience.

“I wanted to find a way to redefine marketing practices for a new generation of consumers and an entirely new marketplace.”

As a professor at HBS, Pauline commutes between Boston and Manhasset, N.Y., where she and her husband, Marshall Brown live with their two children. Fresh off her last class of her first semester, she has already committed to teaching The Business of Aesthetics “into 2017 and possibly beyond.” Due to high demand, the school has added a second section of the course for next year’s MBA students.

Using materials from a wide variety of resources, including an article from Wired about Disney’s Imagineering labs, which served as basis of exploring “the happiness halo” (More on that later) as well chapters from two books, The Substance of Style and The Experience Economy, Pauline was thrilled by her students’ level of “engagement and openness to a new curriculum.” Students also studied “iconic leadership models” including Steve Jobs, Ben Cohen of Ben & Jerry’s and Starbucks’ CEO Howard Schultz (“He went away for eight years and the business was tanking. Now he’s back and the business is back on track.”) Pauline also required student to watch the online TED talk, Designing for Trust, which explored how the visual elements of a brand, most notably a logo, is essential in developing consumer confidence.

I thought it might be interesting to have Pauline give me a crash course in millennial marketing, so I asked her to weigh in on what she thought about a random array of high-profile brands. We already know her thoughts on the Apple Watch. But Pauline thinks Google Glass has also been a dismal failure, which even the geekiest techs have abandoned. “There was a lack of aesthetic empathy.” Why has such a utilitarian product like Fitbit garnered cache among such a crowded field? “They’ve never pretended to be more than a fitness device.” What about upstart Nespresso, whose commercials with Sofia Vergara grate on the nerves? “They can’t sustain [interest.] They’re owned by Nestle which is not an experiential company.”

The companies that earn top marks from Pauline for experiential excellence: Ritz Carlton (“They do it well”) and Disney, which is “gifted in creating happiness” which, noted Pauline is achieved by the consumer in equal parts by the actual experience and the anticipation and memory of it. Makes sense.

Inevitably, the conversation turned to millennials. Pauline had a front row seat thanks to her students, who shared their very high aspirations. “There’s a lot more individualism. Nobody wants to work for Goldman Sachs,” she told me between bites of roast chicken. “The idealization of starting their own thing is off the charts.” We all agreed that despite Gen Y’s tech savvy, the proliferation of startups, blogs and lower salaries have made it much more difficult to break through — let alone rise to the top — than it was 10 years ago. “They’re confident but they have a lot of anxiety.” Exactly what are they afraid of? “The future and being able to stay on top of everything,” said Pauline as we said our goodbyes. “The quest for perfection is killing them.”

Here’s the rundown on today’s crowd:

1.  Felicia Taylor with a table full of gal pals we didn’t get to meet

2.  Music man Lyor Cohen

3. Producer Terry Allen Kramer and actor-turned-reality star George Hamilton

4. Mitch Kanner

5. William Lauder

6.  Fashionista Fern Mallis celebrating her belated birthday with her manager Heidi Kim, Paula Friedman and designer-turned-cake couturier Charlotte Neuville, who is now baking custom creations for her brand, The Fashion Chef.  If her chocolate cake for Fern tasted as good as it looked.

7. The Wall Street Journal’s Anthony Cenname

8. New York Social Diary’s David Patrick Columbia and Sandra Lee and Lisa Fuld, co-president, East End Chapter/Jeanne Kaye League of City of Hope. The ladies were chatting with David about the upcoming City of Hope luncheon on May 9th. See you there!

9. Estee Lauder’s Alexandra Trower

10. HollywoodLife.com’s and former Chanel’s former chairman Arie Kopelman. Just asking but could Arie’s son, Will Kopelman, have come up in conversation with clever Bonnie, since he’s just spilt from Drew Barrymore? Probably not but ….

11. Deborah Norville and producer Meryl Poster

12. Oh to have a seat at this table: Sharon Bush (mother of Lauren Bush Lauren), Patty Hearst and her sister Anne Hearst (who, I must add, is the first person I’ve ever seen at Michael’s drinking a beer) and — wait for it — Cynthia Germanotta, mother of Lady Gaga. On the way out, Pauline introduced me to Cynthia who seemed to be channeling her daughter with her platinum hair extensions. She was absolutely lovely and dressed impeccably. Just thought you’d like to know.

14. Maureen Reidy

15. Jonathan Wald and Michael Braun

16. 48 Hours Mystery’s Erin Moriarty

17. The Daily Beast Lloyd Grove and Rose Hartman

18. Randy Jones

20. Frederica Friedman

21. Patrick Murphy and Diane Soloway

23. Gerry Byrne (Happy Birthday!) and his daughter Megan Byrne 

27. Pauline Brown, Lisa Linden and yours truly

Faces in the crowd: Jay McInerney chatting with proprietor Michael McCarty, producer Beverly Camhe in the lounge and  the ‘Bar-ettes’ Kira Semler and Vi Huse toasting spring at the bar.

Diane Clehane is a FishbowlNY contributor. Follow her on Twitter @DianeClehane. Send comments and corrections on this column to LUNCH at MEDIABISTRO dot COM.

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