2 November 2015Companies and Leaders Who Inspire: Brunello Cucinelli
When I founded my consulting firm and began writing this blog, my purpose was always to help people who want to change what is going on in the workplace– Leaders who want to get better and HR people who want to lead.
I have always been interested and excited by leaders and companies that ‘inspire’—where leaders are making a difference in the market and in peoples lives. It gives me hope for so many insipid organizations that lack soul and spirit.
Periodically, I will be writing about Inspiring Companies and their leaders. Inspiring is a subjective word, hard to put your finger on. It is one of those terms that ‘you know it when you see it,’ but can’t quite capture in words or practice. Inspiring, to me, means, different, creative and successful. It is derived from the Latin word, inspirare ‘to breathe or blow into’ and captures the divine or supernatural in the sense of imparting a truth or idea to someone. Inspiring also conveys a positive feeling and has a ‘wow’ effect. Leaders who inspire and the organizations they lead ‘lift spirits,’ excite others, and offer promise for what could be rather than what is.
Over time, in writing about companies and leaders who inspire, it will become clearer and more tangible to each of us.
There is a danger in writing about great companies and leaders. We all remember Enron as the McKinsey ‘poster child’ only to later learn it was a house of cards, based on massive fraud that sent its leaders to prison. And we know of benchmark companies praised on the outside, fueled by the corporate PR machine, but very different—and not so great– to insiders. Companies and times change too. Once great companies can change, often for the worse.
So my goal is to capture the essence of inspiring companies and their leaders—why are they inspiring? What do they do?—at a single point in time. I cannot promise they will be the way I describe for all time. No one can. Their values and culture will help them endure but you can never be sure. My hope is we can all learn from them– even by understanding them at a moment in time—about how to recreate better institutions than we typically see today.
My first inspiring company is Brunello Cucinelli, the Italian luxury retailer. I recently visited the Company’s headquarters in Solomeo, Italy. Here is what I learned.
Solomeo, Italy, June 2014.
Traveling west from Perugia, the Umbrian capital, the 14th century hamlet, Solomeo, is perched on a serene hilltop. There are few tourists in this part of Italy, but its medieval castle and the bell tower of the 13th century church of Saint Bartolomeo and the winding road up the hillside are a familiar sight to visitors of the Italian countryside. The same idyllic vistas—stately cypress trees and rows of olive trees, vegetable gardens fragrant with sage and rosemary, and rolling hills stretching out for as far as one can see—are ubiquitous.
This is where Brunello Cucinelli chose for his headquarters.
The hamlet of Solomeo, Italy, home of Brunello Cucinelli’s headquarters.
Founded in 1978, Brunello Cucinelli, the eponymous luxury clothing retailer, embodies sprezzatura, an Italian term for nonchalance or what Americans would call ‘studied casual’ or effortless dressing. Effortless but costly. A women’s cashmere sweater can run $2300.
From his first store in the resort town of Porto Vervo on the island of Sardinia, Cucinelli now has nearly 100 stores around the world and his products are sold in over 1000 department stores. Revenue growth is typically between 20 and 30 % per year. In 2011 revenue growth was an eye-popping 62%. It has made its founder a billionaire.
Like many entrepreneurs, Cucinelli was profoundly influenced by the experiences of his parents, particularly his father, Umberto. As a child and into Brunello’s teens, the Cucinelli’s worked on a farm. Their home had no electricity and no running water and 27 people lived in the divided house. The workday began at 5—tending to cows and the fields and it is here he fell in love with the land and the earth.
Like many Italian farmers in the 1960s hoping for higher and more stable wages, Brunello’s father moved the family to nearby Perugia to work in a cement factory. Brunello’s father and brothers did harsh, manual labor. Heartless managers and the poverty-stricken life of a factory worker dashed their hopes and dreams of a better life. His father frequently came home discouraged and bitter– with tears in eyes– having suffered humiliation at the hands of his bosses.
The experience left its mark on Brunello.
Brunello dropped out of engineering school at the age of twenty four and seemed to drift for a while, hanging out in the bars of Umbria. The village pub became his university, his ‘theatre’, as he recalled. He and friends would debate politics, religion and philosophy into the wee hours of the morning. He had always been interested in a spiritual life and, for a period of time, considered the priesthood. To this day, he has followed a self-imposed curriculum of study, reading from a pantheon of sages from Socrates to Seneca, St Francis of Assisi, Kant and Saint Benedict to more modern theories on business and marketing from the late Harvard Business school professor Ted Levitt.
Umbria is renowned for its knitwear and Brunello was exposed to the industry when his mother took a job making sweaters to supplement the family’s income. He occasionally helped her and he began to see business opportunities.
He wanted to make something special, a product that was not easily replicated and “something you would want to keep forever,” he said. 1
Borrowing money (about $325) to start his initial enterprise in 1978, he has since transformed the world of cashmere, and built a growing line of products for men and women in a rapidly expanding market. 2 He had the idea of dyeing cashmere—a la Benetton– and marketing it to women. At the time, this was a radical idea since cashmere was only available in muted colors. But he made about a half dozen sweaters in bright colors and got an order for 53 pieces from a northern Italian retailer, Albert Franz, who is a customer to this day.
The rest, as they say, is history.
Values: It is more than profit.
As with most inspiring leaders, everything begins with the values they hold.
“ I have always felt that profit alone was not enough,” Cucinelli said, “and a higher, collective aim was necessary I realized that economic wealth must be accompanied by human values, and the first means nothing if the second are missing.” 3
With his fathers’ experiences leaving an indelible impression on Brunello, he was driven to improve ‘human dignity’ both in the workplace and the community. Brunello says, “ Quality of life is essential. Work becomes more humane if man is placed at its center.’ 4And if you are going to make high quality products, you need to value people, he felt. You need to create conditions where they feel special.
“If I make something, if I set up a business, I do it with the aim of improving the quality of life. Man doesn’t own the earth, “ he says, “ he is only its caretaker. It doesn’t make sense to chase after enormous short- term profits. Because everything passes…, “ he said, “… the best things are those that one can savor over time.” 5
From the beginning, he said, “The fundamental principal [for the company] is the client comes before profit.” 6
Company Practices—Where the Values Come to life
‘Quality of life is essential’ does not mean progressive human resource practices, although the firm has them. For Cucinelli, it means buying and restoring an entire town to provide his employees with an inspiring lifestyle.
We had a tour of Solomeo, Cucinelli’s headquarters, and the men and women’s boutiques and our host explained the history.
The women’s boutique in Solomeo.
In the 1980’s, Cucinelli bought the medieval hamlet of Solomeo (which had largely been abandoned) and has restored the town into an artisanal factory village where employees live and work. The town has a 13th century castle, church, medieval farmhouse, farmhouse and villa where Cucinelli lives with his wife and two daughters. Old buildings have been transformed into workshops, warehouses, retail store, offices, town squares and an outdoor theatre.
Down the hill from the town center are three modern ‘factory’ buildings—architecturally stunning– surrounding a water courtyard much like an Italian Renaissance garden.
Cucinelli strongly believes in giving back to the community, but these acts are also based on his belief that being surrounded by beauty, people are able to work better, harder and develop a shared community with common values. “Because work is hard,” Cucinelli explains…” Artisanality is something nice to look at but isn’t fun everyday—it’s repetitive and boring.” 7
Students in one of four learning academies founded by Cucinelli.
Employees are offered cultural and social activities including lectures on art, architecture and concerts in the concert hall he built for the town. Talks and recitals are often given in the beautiful Neo-Humanistic library, housing hundreds of books on art, architecture and philosophy.
The Neo-Humanistic library.
The theatre built by Cucinelli in Solomeo.
Pay and rewards: The company pays its employees about 20% more than similar employers offer and …Incentives are distributed equally regardless of the seniority of employees—a decision reached by staff themselves. And in 2012, he divided half the company’s profits with all employees. 8
Autonomy and freedom. The business is run like a family and people treated as responsible adults. There is little hierarchy and no distinctions between management and others. All employees have a key to the factory to come and go as they please. They do not punch a clock.
There is a mandatory 90 minute lunch at one o’clock every afternoon where employees walk across the main square from the factory and gather at long tables in the modern, open dining hall for the subsidized three course lunch with food prepared from Solomeo’s own gardens. . It was there that my wife and I were offered wine for lunch, and drizzled fruity olive oil from Solomeo’s groves. We ate gnocchi, grilled eggplant and veal. Brunello sits along side his people to enjoy the meal—no executive dining for him or his leadership team. He will often follow his lunch with a short nap. How civilized.
Employees dining in the company’s restaurant quality dining facility.
Twenty percent of the company’s profits are set-aside for ‘humanity’; funds are often used to restore the village, Solomeo. Cucinelli has also contributed over a million dollars to restore a 4th century Etruscan arch in Perugia.
Cuchinelli has also begun four schools or academies—cutting and sewing, knitwear repair, and gardening. The classes are taught by Cucinelli’s top artisans in workshops housed in the restored castle. The 32 students are selected by an independent government organization in Umbria. But here’s the clincher: the students pay nothing for the year- long instruction. In fact, Cucinelli pays them 700 euros per month (nearly $1000) and he has no expectation they will come work for him after graduation.
Cucinelli’s humanistic enterprise is a direct reaction to the modern, global enterprise. “I think this moment is the economic, moral and civil result of how we’ve behaved in the past 25 years,” he said. “ So I’m quite happy about this major change in humanity. I think we’ve had 25 years of universal economy in which we have all too often only worried about profit. I think that now something new is coming.”
I hope he is right. How refreshing.
A cynic might say well of course he can do all of this—he sells his products at 11 times what it costs to make them. But lets be clear. He doesn’t have to do all of this. He doesn’t have to have his entire product made in Italy. He doesn’t have to share his profits with employees or restore ancient buildings. He doesn’t have to provide a restaurant quality meal to all employees. He doesn’t have to give everyone a key to the factory.
But he does. 9
- 1- http://www.ey.com/RU/en/Services/Strategic-Growth-Markets/Exceptional-CIS-August-December-2013—Brunello-Cucinelli ↩
- 2 – http://www.ey.com/RU/en/Services/Strategic-Growth-Markets/Exceptional-CIS-August-December-2013—Brunello-Cucinelli ↩
- 3 – http://www.girvin.com/blog/?p=4680 ↩
- 4 -http://www.enablingideas.com/how-did-they-do-it/2012/04/brunello-cucinelli-its-not-about-me-as-a-brand-its-about-humanity/ ↩
- 5 – http://kennisbank.hva.nl/document/220187 ↩
- 6 – http://www.enablingideas.com/how-did-they-do-it/2012/04/brunello-cucinelli-its-not-about-me-as-a-brand-its-about-huma ↩
- 7 -http://life.nationalpost.com/2011/09/11/brunello-cucinellis-cashmere-conscience ↩
- 8 – http://www.enablingideas.com/how-did-they-do-it/2012/04/brunello-cucinelli-its-not-about-me-as-a-brand-its-about-huma ↩
- 9 – Much of the background for this post came from the book, given to me by Cucinelli staff on my visit, Solomeo: Brunello Cucinelli, A Humanistic Enterprise in the World of Industry published by Fondazione Brunello Cucinelli in 2011 ↩