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>> >> >> >> [Clapping] >> Andrea will be interviewed this evening by Ronak Desai who -- many of you know -- is a second year student, and member of the "View From The Top" committee.
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Before coming to the GSB, Ronak worked for J. P.
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Morgan and GE on the East Coast, and then worked in India for Genpact, a subsidiary of GE, where he was vice president for corporate development.
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Let's welcome Ronak to the GSB stage as well.
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>> [Applause] Andrea Jung: Well, first of all, good evening everybody.
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It's a privilege to be here, and thank you all for coming and joining.
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I grew up in a family where all we knew about business school was Stanford.
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My little brother here -- one of my favorite people in the world -- has always been the biggest fan and spokesperson for the school.
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So it was a no brainer on one hand to come and speak to the school, but more importantly, just to have the opportunity to kind of share some of my thoughts.
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And I also -- I did not realize I was going to be seeing one of my other favorite people in life, Henry Groswhite, behind my brother, who was -- he actually recruited me from Princeton for my very first job -- was my very first boss.
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So I think, through the evening, you could ask him some Q and A about what I was like.
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>> [Laughter] >> I don't know if you want to hear that answer.
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But, I owe a tremendous amount -- the whole reason I think I'm probably here.
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I started from the very early days.
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But, before we get into some Q and A, I just thought I would give you just a quick snapshot of who I am.
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And I think, as you heard before -- thank you for that wonderful introduction.
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And I won't go that much into Avon.
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It is an interesting company. 140 something countries.
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Well over ten billion dollars today with six million Avon representatives.
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So I think we have more Avon representatives than the army, the air force, and the navy combined in Brazil.
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>> [Laughter] >> And over a million-one in China.
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So, the numbers are huge.
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But, let me just tell you one thing about myself, which I think will start this.
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And that is that, I think I'm in this job ten years as of last Wednesday.
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Ten years as the CEO, which my father -- he sent me an article -- he usually doesn't do this -- that had on the cover of Business Week that the average tenure was at that time 3. 2 years.
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And he sent it to me with this bit question mark like, "Are you coming home after this??
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>> [Laughter] >> "What are you doing after this??
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And I would say to you, first and foremost, that you know, I have a love affair with my work and my company.
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I have not loved this job every single day, which we can talk about.
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The CEO's job, after 40 public quarters, and particularly in the last couple of years, is not exactly what I would say is "fun", but I have had a huge passion for it.
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And I guess I would just express this by telling you that, in 1997, I was on a short list of -- I guess -- potential CEOs for the company.
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And there was a lot of visibility on it, for those of you who are women in the audience, because I think at that time there was only one woman -- maybe two -- Carly Fiorina and Marianne Sandler were the only two public company CEOs at that time.
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And so, I was in line to become the CEO of the company.
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Company hit a sort of tough spot, and the board decided, even though they had kind of given me the nod that I would get the job, that they were going to go with one of our directors, a gentleman who had been a CEO and was 52 years old.
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So they told me that I was not going to get the job, and that I could be the number two.
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And the papers, the New York Times kind of really were all over that, because there was this whole overwhelming "Woman Passed Over: There is a Glass Ceiling" reaction to it, at which point, I got actually two other pretty big CEO job offers.
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So, I was at this inflection point, because there I was, the boss that I was going to work for was 52, so it wasn't like he was 62 or they could tell me, "Just do this for a couple of years and you can get the job.?
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They were basically saying, "He's here.
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You're here to support him.?
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And I was being offered the money, the title, the corner office that came with some pretty interesting benefits.
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And a mentor of mine said, "Follow your compass, not your clock.? And I say that again.
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She said, "Follow your compass, not your clock.?
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Make this decision not from your head, but from your heart.
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And that was the biggest inflection point of my career.
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I made the decision that I loved the company.
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I loved its mission, its purpose. We were in a tough time. I loved the people.
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And I decided that I loved that more than I loved the idea of being a CEO or anything else that came with that.
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That I would rather be with the company and work I loved than just do it for the sake of the title and, quote, "the path that you were supposed to be achieving.?
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And in that decision, I think that changed my life.
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It changed my life careerwise.
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I will tell you it didn't work out for him, so I got the job in 21 months, and the rest is history.
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>> [Laughter] >> But I just am starting -- I'm starting to tell you, because I don't know who else would be here on View From The Top, because I would make that decision again even if I were still number two today.
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Even if he were still the CEO, and I were the number two person, I'm so passionate about the work that I do and the contribution that I think that the work is making, and I have a piece in that, that I would make that decision all over again even if it hadn't turned out this way and somebody else would be sitting here on View From The Top.
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That's the most important thing that -- before we even get into this -- that I want to share with you, that if you don' t love the work -- and you all are about to go out and do some pretty extraordinary things.
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I have had plenty of business school friends -- as you can imagine -- after I graduated from Princeton, whether it was from here or places on the East Coast.
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And if the work and the company was a job, or even a career, but not a passion, you're still not doing it. And I am. Are you with me?
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They're not doing that anymore.
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Other things, children -- I have them.
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Other things take precedence when it's not deep passion for the work.
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So I just, that's the first thing I wanted to tell you is that luckily, life turned out for me, and I get to be here and do this.
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But it wouldn't have mattered if it didn't, because I've actually found a company that I loved.
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And that's my most important thing I wanted to share with you before we even started. Okay.
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>> Once again, thank you so much for joining us.
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It's a privilege to have you here.
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Just picking up on that theme of passion a little bit.
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I've read that your parents believed in well-rounded topnotch education.
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They provided access to piano lessons, Mandarin lessons, you went to Princeton for your undergrad education.
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And when you first started your career by taking up retail jobs -- from what I've read at least -- there were a little bit of gasps and said, "Hey, you know, this doesn't sound like a great career move.?
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Sort of reminds me of my parents reaction when I told them I wasn't going to be a doctor.
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>> [Laughter] >> So starting back then, how did you imagine to stay true to your passions and your dreams?
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Andrea Jung: Well, it was interesting, because I mean, mom and dad came from China, came here to give us educations and hopefully, you know, Ivy League educations, and then going into -- not different than your parents -- doctor, lawyer -- just something they thought more intellectual than retail.
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So I decided when after Henry here recruited me to go and work in the retail business, I think their first reaction was, "That really wasn't what we had in mind.?
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>> [Laughter] Andrea Jung: But, then the family values set in, which were "No matter what it is you do, then you better go and be your best.
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You better go and you better work hard.?
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And I remember -- oh gosh, it was just by Thanksgiving of that first year in that training program.
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And I was changing hangers in a stockroom.
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And all I was doing was taking the vendor hangers -- why are you laughing?
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>> [Laughter] Andrea Jung: It was worse than -- I'm being very nice about this.
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>> [Laughter] Andrea Jung: I was taking the vendor hangers and putting the store hangers on this thinking to myself, "I got a Princeton education to do this??
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>> [Laughter] Andrea Jung: And I remember one day saying to my mom, "Um. I don't know.
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I mean, it could be really interesting, but I really feel like I'm doing some menial work here, and I don't know.
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Maybe, maybe I should quit.?
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And she said to me -- it took less than a heartbeat. She said to me, "Quit?
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We don't quit in this family. Are you kidding?
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You start at the bottom, and you work your way up.
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What is it that you are learning from that? You are not quitting.
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I don't care who else is in that training program that's putting -- we don't quit on anything in this family.?
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And that perseverance, even though when they quickly got over it, now they think it was great. They tell the story.
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They have all the scrapbooks about it.
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But it wasn't like that in the beginning.
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>> [Laughter] Andrea Jung: But that thought really was resident in I think, you know, our family's culture.
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So it was, "Just whatever you decide to do, stick with it.?
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It's not going to be easy.
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No path to success comes without stones in it.
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So you're going to have to take some tough days.
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You're not going to like it a lot of the time, but that's just part of it. Stick with it. Don't quit. So.
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>> It sounds like your parents did a great job of sort of combining, you know -- you often get immigrant values when you immigrate to the U.
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S -- with sort of the American culture blending into that.
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Can you talk a little bit more about that?
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About how -- what kind of values you grew up with, and how do those translate into the values you want to leave for your children? Andrea Jung: Sure.
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You know, I feel really proud that I haven't had to change who I am to be successful in this world.
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Dan Rather was doing the series of interviews -- when I first became the CEO -- of a couple of women executives.
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And he actually went and interviewed families, parents.
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And so, he went up and interviewed my parents.
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My mom cleaned the house.
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They were trying to serve him Chinese food.
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>> [Laughter] Andrea Jung: They do this huge thing for like hours and hours.
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And you know how -- well, those of you who know media -- they trunk it down to a 20-second sound bite after interviewing for hours and hours and hours.
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All of this they take it down to one sound bite on television where he's asking my father, "So, did you always know that your daughter was going to be a successful CEO??
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And he says, on public television, "As a matter of fact, quite the opposite.
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We raised our kids as pretty traditional Chinese, family values, and my perception of CEOs -- really hard core, cut throat.
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I -- I really can't imagine that she's going to be that successful.?
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>> [Laughter] Andrea Jung: I'm thinking, "This is public TV!"
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So, but the truth is, in that thought was the fear, I think, that my family values system had that the concept of being kind, about caring about people, about being respectful -- would go get washed out of the window of a very, very -- in his mind -- typical behaviors required in the corner office.
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And, have I had to change some things? Yes.
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I mean, I think I am much more assertive.
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I mean, you know, kind of growing up in an Asian background sort of avoid conflict around the dinner table is the thought, Don't argue about things.
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I have had to become more assertive and have to understand the roll of constructive conflict.
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I don't think I'm aggressive.
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I don't think I've had to change my personality or who I am or my value system.
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And you know, so I think the best thing my parents would say about me -- I hope -- they say it now, and it makes me happy, is to say, "Well, she's really still the same person.
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Even though, you know, she's on some list some place.?
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And that's what I hope my children realize is that those values are more important than anything else.
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>> How does that translate?
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I mean you got five-and-a-half million sales representatives around the world.
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How does that play into how you motivate them, how you get them inspired, and how you lead the organization?
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Andrea Jung: Well, it's interesting, because they are independent representatives.
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So I underline that word.
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I mean -- different than, I guess, other CEOs -- they're not my employees.
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They don't have to work for me every day.
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So I can't tell them what to do.
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You know, you learn, and the skill is an interesting one.
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And it applies anywhere whether, I guess, it's politics or anything else.
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I mean, influence is a very different thing.
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Motivation, inspiration, and influence are very different things than leadership requirements and mandates.
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And so, you know, this skill of communicating is the skill of influencing and inspiring.
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And mission and values and purpose have been the way that we've effectively kept that sales force going.
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This year -- you and I had a little conversation on the way over, but -- you know, no different than any other company, 2009.
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You go into the buzzsaw of the global economic crisis a year ago, and everybody's like, "Okay. We're going to cut.
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We've got to freeze salaries. We're not going to hire. We're going to do.?
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You know, whatever all of the things that just come flying at you as CEO.
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And we just -- besides that we needed to keep our people motivated.
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But more importantly, go back to the original purpose of the company in order to find the answer for the way we were going to get through this year.
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And that was that, you know, the company was is 123 years old, and the founder actually was a man who believed that women should be economically empowered.
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I mean, I actually love the story.
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He was an encyclopedia salesman, and all of the direct sellers were men at the time.
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And somebody gave him a vile of perfume one Christmas, and he realized everybody who was home were the women, and they were basically saying to him, "We don't want the books.
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Can you just buy the perfume that you were supposed to give as a gift with it??
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So he realized there was something there.
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>> [Laughter] Andrea Jung: But the most important thing he did, because it was 1886, was decide that the seller wouldn't be men.
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That he was going to actually employ a woman, which was heretical at the time, because women weren't even allowed to vote, never mind make money outside of the home.
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And so, it was not popular in the beginning, but he actually went out and created the first woman salesforce, and became the economic solution for women here in the United States.
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And that has transferred to 140 countries now.
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And you can imagine its power in India and all of the emerging economies.
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But we decided in 2009, unemployment predicted, and now we see over ten percent here and rampant everywhere else but, you know, we're going to be a solution -- that the company's not just going to be about earnings per share and everything else.
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That we're actually going to have the business purpose to be a solution to governments and unemployment right now.
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And we were going to go out and be very aggressive about telling women that they could earn if they got laid off, or their husbands got laid off, or they wanted extra income.
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And it's been extremely motivating, and it's almost no language necessary when you have mission and purpose.
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We did a very bold thing.
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You know, a lot of people were cutting back on advertising.
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We decided, We're going to advertise.
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I remember the day I said, "We're going to advertise on the Superbowl this year.?
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And people were like, "The Superbowl? A, it's expensive.
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B, you know, it's Buddweiser..? >> [Laughter].
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Andrea Jung: Those were the kind of products.
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So Andrea, we're going to advertise skincare or lipstick? And I said, "Neither.?
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We're going to create an ad, a testimonial ad of people who joined us since they got laid off, and they're going to tell their story.
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Everybody just looked at us, and we said -- we went out and we created a very compelling ad where the message was authentic and genuine and people really said, "I can't get laid off.
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I'm running my own business. They're my own hours. It's my own business. It's my job.? And we ran it.
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And the phone was off the hook before halftime -- as you can imagine -- for all the women watching at the same time from the pregame on.
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And this began what has become probably more people who've joined than certainly in the United States since the 70's.
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It's been an amazing thing, but it was this proactive message that entrepreneurship is "in," and it's important, and it's part of the economy solution.
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>> Based on everything you said as we walked over and now.
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It seems like you've got, you know, your finger on the pulse of your organization.
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Oftentimes, CEOs say "It's lonely at the top.?
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And I was wondering how you sort of combat that, and how you get beyond sort of the walls of the executive suite? Andrea Jung: Yeah. I think it's important.
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It's actually interesting and difficult -- not difficult -- but, you know, it's a vertical company, which I love.
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I mean, so we do everything from product development all the way out to the end consumer.
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So we are completely vertical, which is wonderful, but it's also insular.
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You know, and you can get isolated, because you're not trying to get the end cap at Wal-Mart or you know, trying to get the order vs.
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Loreal or anybody else in the department store.
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So we own the chain but worry that our people just get too myopic.
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So for me, it's a couple things, I guess.
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One is very selectively making sure that I had an outside-in perspective. So I'm on two boards.
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As you heard, I'm on General Electric's board, and Apple -- completely different.
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I can talk about that in a minute.
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But, they've really helped me stay current, and forced me to kind of reassess my own skills.
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I'm out in the field a lot.
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I mean, I was an Avon representative when I joined and every other year, I sign up and become an Avon representative -- hope nobody recognizes me, and go out and try and sell, which is extraordinarily -- it's very, very humbling.
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And I try and really get people to tell me the good, bad, and the ugly -- particularly the latter. It is isolated.
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I don't know that the word is "lonely.?
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But, you know, people aren't going to come and say, "You know what, Andrea?
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In this meeting, this is what you did wrong. You shut people down. You didn't listen.?
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I mean that kind of feedback sounds good on paper, but it just doesn't happen.
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So trying to have the ability to have your top team feel the informal and formal way to give you feedback, to tell you what you're not doing wrong, so that you can reinvent yourself. It's pretty important.
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>> Picking up on your two boards.
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I'm sure we'd all love to know kind of how you view your leadership style as being different from Steve Jobs' or Jeff Immelt's.
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In particular, what you think Jeff and Jack before -- Andrea Jung: I was going to wear my jeans and my black coat.
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>> [Laughter] Andrea Jung: But Mark told me I needed to wear a suit. Very different. Fascinating experiences.
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So I was, you know, I mean, in this day and age tough to find the time, because I think boards take time.
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I mean, I think this is a world and -- speaking for a second just being a director, the responsibility of being a public company director obviously is huge these days.
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And the commitment really is time-consuming, but I was on GE's board since actually before I became a CEO at Avon, so I've been on that board eleven years now.
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And was pretty much exclusively on one board until I joined Apple in 2008.
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So, it was ten years before I joined a second board.
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And I did that -- I mean -- GE has been extraordinary.
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I didn't go to business school -- my secret. I wish I had come here. But since I didn't.
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I didn't go to business school and, in a way, it has been my business school from everything of process point of view on one hand you would say "aircraft engines", "power systems," "medical systems," "lipstick and skin care" -- completely different businesses.
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On the other hand, the processes, globalization, quality programs, how they do things across the world -- as you know -- are hugely beneficial to any business leader.
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So that has been enormous.
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The talent process at GE is second to none.
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I mean, from the training to the succession planning and the depth, I have brought so much back.
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I am that much better a leader.
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And we were -- when I started the company, we were what -- $3 billion, and I think four and change when I became the CEO, and it'll be $11 billion.
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So, you know, to run a ten billion dollar plus company versus five.
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I mean, you would think -- it's completely different, and the process that's necessary.
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Because we were a very entrepreneurial company, but you need the systems and the processes.
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And you want to keep the combination of instinct and facts, but we needed them, and I learned a tremendous amount of that.
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We would not be the company that I think that we are today if I hadn't learned what I did from being at GE.
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The succession planning process at GE, you know, the decision how Jack made the decision, you know, just how he thought about that was beyond fascinating. I was on that committee.
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That was enormously fascinating.
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So then, fast forward to, you know, I had known Steve -- always a huge admirer of the company.
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And one day, I got a phone call and he just said he was in New York and he came up showed me the new Nano and we had a great conversation and asked me to be on the board and the rest has been history.
23:19
It's been -- it's so different on the other hand.
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I mean, but I don't leave that meeting -- and I have it tomorrow -- without thinking, "God, I need to be a better CEO when I walk out.?
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I like to think that I am, you know, in touch with the consumer, have passion for product, the user experience, but it just pales.
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I mean, the whole company, not just Steve.
23:48
But, the company is -- I'm sure you all know -- just maniacal and fanatical about excellence whether we're going to go into the retail business, whether we're going to go into the gaming business, whether we're going to go into the phone business. It's just a laser focus.
24:08
I think what they say "no" to is as important as what they say "yes" to.
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And that discipline is something that I have definitely learned from when I come back and try and run the company.
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But, just as a consumer marketer, I always leave there going, "Oh gosh, I've got to be better when I go back tomorrow.
24:26
Better look at that bottle one more time.
24:28
The curvature is not too perfect.?
24:30
>> [Laughter] >> Given that you're here for the board meeting, I'm sure we'd love to know when the Apple Tablet's coming out?
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>> [Laughter] Andrea Jung: I'm sure you would.
24:42
>> [Laughter] >> One more question before we open it up to the audience.
24:47
Based on, you know, a lot of what you've spoken about has been reinventing yourself as either the environment's changed, or Avon business has change.
24:54
I was just wondering about how you reinvent yourself as a CEO and how you take a step back, re-examine, and do something different? Andrea Jung: Sure.
25:03
Well, I think you know, the company we like to say is "123 years young.?
25:09
And the only way to do that, I mean, you can't reinvent a company without reinventing yourself first.
25:13
So, reinvention of a brand or reinvention of a company is only as good as the reinvention of the leader and the leaders.
25:21
And it is interesting being in the job ten years and yet, it's a huge privilege on one hand.
25:29
I actually don't know how people are kind of coming into this job in this environment and having to kind of put all truths other here and start afresh.
25:37
Having had a decade to go through cycles and reinvent myself and learn from my own mistakes, I think, has clearly been an enabler to getting through this environment.
25:46
But, I'll tell you one story.
25:48
So the first five years, I was a growth CEO.
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I mean, we were booming into emerging markets, we had double-digit, top-line growth, 25-percent earnings growth for five years running.
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I mean, I never did a layoff.
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I had no idea what the word "turn-around" meant, and we hit the wall, you know, as all businesses do.
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And if you're in any job long enough, I can promise you, there is a cycle.
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Businesses are cyclical, whether it's pharma, you name it. There's always cycles.
26:17
I'd gone probably longer than not without hitting the wall, but we hit the wall in 2005.
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And we, at that time, gave earnings guidance.
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And we missed guidance twice in -- I don't know -- four months.
26:29
And I don't know if some of you know Rahm Sheran, who's sort of a coach to CEOs and has been a friend of mine for a long time, but, he came up into my office on a Friday night, and he said to me, "You want some tough love?? And I said, "Sure.?
26:42
And he said to me, "The board loves you.
26:46
People in this company love you.
26:49
But, in about 120 days, they're going to have to fire you.?
26:53
I just looked at him, and he said, "You do understand that, right?
26:56
I mean, unfortunately, when you're in this job, you got shareholders.
27:01
I mean, if you can't turn this around -- if you can't look at this thing with new eyes, it's going to kill them.
27:10
They're not going to have a choice.?
27:11
I said, "Well, that was pretty tough love.? And he was right.
27:18
Earlier that week, one of the people that worked for me said, "You know what?
27:23
I've got these people that want to come in, because when I was at AT&T, they had 15 layers of management.
27:28
And they had this exercise, which then became really very strategic, where they took out 30 percent of management and seven or eight layers, because people were too far from the consumer and too far from, you know, the business.
27:44
And they had built -- as all businesses do -- a bureaucracy.
27:48
And so, I think we should look at this.?
27:52
And I said, "Tell me a little bit more.?
27:55
And she said, "Well, probably one out of three middle to senior managers are going to have to go.?
28:01
And I said, "Look, we have all these initiatives, but we're really a people-based business.
28:05
We're not capital-intensive. We're people-intensive.
28:08
We have so many countries.
28:09
The operating model is not mature enough yet, or matrixed enough for us to take out the people.
28:17
I understand the concept, but I just don't -- I don't think we can do that.
28:21
I think it would take away -- I don't think we have the capacity.
28:24
I don't think we can do that.? That was Monday.
28:27
So Friday night he says to me, "If you think about this.
28:30
This is what's going to happen, Andrea.
28:31
So you're going to get fired if you don't turn this around.
28:34
But then, because you've got, you know, the history and the track record, Hydrix is going to call you, and they're going to put you into another company, and then you're going to be the turn-around CEO who gets to look at everything fresh.
28:45
You won't know any of the people.
28:47
You won't have any, you know, allegiance to the strategies, and you're going to go in and be able to just cut, do, and change, because you'll be objective.
28:57
So you have to make a choice. Go home. It's Friday night.
28:59
If you can't come in on Monday morning and reinvent yourself and pretend you just got hired here and you're going to look at everything, your team, your strategies, your organizational structure.
29:13
And if you can't do the things that a turn-around person would do if they came in here Monday morning, I wouldn't put big bets on it.
29:24
If you can, you will be far better than anybody else could, because you know where every rock is, you know every single thing about it, and you've got the latent goodwill and equity that you've built up. So you make the choice.? So that's what I did.
29:39
I went home, and I thought about it, and I came in Monday morning.
29:43
We took out eight layers.
29:44
We went forward and reshaped.
29:49
I had a very hard look at some people who were terrific friends and got us from, you know, three billion to six billion, but weren't going to get us to eleven.
30:00
And then, made all the hard calls, with the right values, and the rest has been the last few years.
30:07
But, you know, I had to become a definer of my own second chapter and start it afresh.
30:15
So it's been like a new job.
30:16
>> Well, Thank you for your candor.
30:18
With that, we'd love to open it up to the audience for questions.
30:22
And there are mics around the sides.
30:24
>> Thanks for joining us, Andrea.
30:35
I believe you developed a passion for playing the piano at a very early age.
30:40
Could you talk a little bit about how that influenced you through your life?
30:43
And also a little bit about how your passions and interests, that are outside of work, at this stage in your life?
30:49
Andrea Jung: Well, I have very little time anymore to play, and I actually had a piano teacher a few years ago who dropped me, because he said to me, "You keep going on trips, and you keep canceling on me, so I'm not going to take you until you get a little bit of calmness in your life.?
31:05
Interestingly -- and Mark can probably say the same thing.
31:08
We used to have to -- we had not only a metronome on the piano, but also a timer.
31:13
And this was our first example of discipline.
31:16
When it was an hour, I mean, if it was like 50 minutes and we wanted to go play tennis, or -- there was no getting up.
31:23
It was one hour of that discipline.
31:26
And besides sort of passion for classical music, one of the first things that I recall in terms of self-discipline in my life was remembering that, you know what?
31:36
It's 59 minutes, and it's not till it's sixty -- that you keep working at something.
31:41
So you know, that is one of the things that I think that it' s given that's extraordinarily important to have an appreciation -- I was an English major, but just, for the arts -- you sit there in business and some people say to me, "You were an English major, and, you know, you're writing in shorthand e-mail at this point.
32:02
That's the extent of your writing??
32:06
And it's really not, because I think just the critical thinking and the ability to communicate and to have people understand where we're going and what the vision is.
32:21
I think much of that I can kind of go back to my education and remember. It's had application.
32:32
>> You mentioned how you're able to motivate and inspire your own employees.
32:36
You also mentioned how the lessons that you've learned from the other boards that you serve on.
32:41
I'm wondering how you've been able to adjust your leadership style to motivate and inspire these more technology-based companies and these most bigger-than-life personalities, these male leaders at those companies.
32:55
Andrea Jung: I think that, you know, the experiences that I' ve had at the company, as well as my own vantage point has been a different and interesting addition to the boards that I've been on.
33:14
The global experience, you know, our business in China for example, you know, where we have right, direct-touch consumer insights in understanding, in our case, of million one sellers who have millions of consumers in all the small towns and villages.
33:33
One of the things, just so I'll use that example -- I spend a lot of time talking about that with Jeff Immelt or Steve, but we decided at Avon not to focus on the Eastern seaboard cities, the large cities.
33:46
We decided to penetrate the small towns and villages and have a supply chain, an infrastructured strategy where the women were.
33:54
Because we knew that the government would like the fact that we were offering opportunities for people not to have to bus themselves to work into large cities, that we could create work for them right in the towns and villages where they were.
34:09
And those insights and the behavior and the opportunity to understand the consumers and what they will do and what they will pay in those countries.
34:19
Those are some of the insights I think I've been able to bring.
34:22
Very different personalities, so they make two very different men and two very different corporate cultures, and ours is completely different too.
34:30
And it is interesting to weigh and balance that.
34:35
So again, even though Avon is different from either of those two, those two couldn't be more different either, but both with enormous strengths.
34:43
[pause] >> You spoke earlier about it being tough to get critical feedback sometimes.
34:54
I was just curious about, over the years, ways you've figured out to solicit difficult feedback from your own staff on how you guys can improve? Andrea Jung: Yeah.
35:05
From a formal point of view, we do -- and I do -- a mandatory, "Anonymous 360" with all of my reports every year.
35:16
I make them fill out a pretty tough thing about you know, their either toughest moment with me or where they really didn't think I lead well, what they would think I need to do, again, not attributed.
35:26
And we have a discussion about that with all of them there and somebody from the outside who co-leads that every single year.
35:34
And that's extremely helpful.
35:37
I also encourage them, and I guess I've been in the role long enough, so there's amount of trust there.
35:44
For them -- I'm a big believer in immediate feedback.
35:48
You know, I fundamentally believe that if the first time you're hearing something negative about yourself is in your performance appraisal, then your boss is doing the wrong job.
35:57
I mean, I'm a real believer -- right in that meeting -- if I think you didn't handle something well, I don't do it in front of everybody -- I don't believe that's the right thing to do, but I will call you in afterwards and just say, " Look, by the way.
36:09
In that meeting, this was handled like.
36:12
I expected you to do X, Y, and Z.?
36:14
And you won't anywhere near have to wait until a midyear or full-year review.
36:19
But they know that I do that, and I expect them to do the same thing for me.
36:24
They know from this formal feedback what I think my derailers or the things that I tend to do wrong are, and I ask them to help me with that.
36:32
So, if they notice it or they see it under stress coming out more that they'll just catch me on it.
36:38
Just say, "By the way, today, you seem like you really are kind of doing X, Y, or Z.?
36:44
It catches me on that, so it's helpful. [pause] >> Hi, Andrea.
36:51
Thank you for joining us.
36:53
Andrea Jung: You're welcome.
36:54
>> Out of curiosity, do you feel there still is a glass ceiling, and if so, what do you think the next generation of leaders can do to change that?
37:01
Andrea Jung: It's a great question.
37:02
You know, I think the numbers by themselves would say there' s still somewhat of a glass ceiling.
37:07
I mean like 15 out of 500 I guess women in fortune five hundred would say there's room to go.
37:14
But having said that, I am a real believer that the playing field is changing.
37:20
And what do I mean by that?
37:22
When I go back even five years -- never mind when I became a CEO -- most women in, not the CEO job, but in the level underneath were in what I would call the "Staff jobs," corporate communications, H R.
37:37
They were not in the CFO roles or the leading operating unit roles.
37:42
If you look today, while the number may be small, the level below of women ready to take on the number one job or in the important C jobs -- the C suite jobs -- it's so dimensional that, I think, the next five years is going to be huge in terms of women in top leadership roles in business.
38:06
So I think we are in very, very different moment.
38:10
Also in parts of me, I mean you know, I keep saying there's these lists which I believe when the lists go away of top whatever, women will really have made it.
38:18
But right now, while there are still lists -- you know, I'm hoping that I keep going down. What do I mean by that?
38:25
I mean, my company is big, but there are people in much bigger jobs right now.
38:29
In the fortune 50 companies.
38:31
And so, women are not only breaking through, but they're breaking through with some pretty big roles, which I think, hopefully it's true in politics, as in business.
38:42
So I think it's the jobs and the companies they're leading as well as the number of them who are ready to take on pretty large roles very, very different than even five years ago.
38:51
So I think the glass is very half full, more than half full on that front.
38:55
So it's a different time.
38:58
If women want it, I mean, I think it's there to be had. >> Hi.
39:08
My question is, How do you stay innovative in the consumer product space over the last ten years?
39:13
And especially kind of where the challenge is A in best practices and leading and guiding that innovation, and space?
39:18
Andrea Jung: That's a great question, how do I stay innovative or how does one stay innovative.
39:22
I mean, I think, you know, you guys are probably learning this more than anyone.
39:27
That is, that innovation is so key.
39:30
I think this is more important than ever.
39:33
I think that the worst thing that can happen in this company is for people to cut back or de-spend.
39:38
I mean if you kind of look at.
39:42
I have studied that the actual market share gains and losses in normal or healthy economies -- it's pretty hard, when you're large to kind of get half a point of market share or point. It takes a long time.
39:59
And so, in normal times it's hard.
40:01
But, in the worst economies, they say that that's when disruptive shares gains or losses -- when industries go out -- and companies can go from bottom quartile to completely top, if they are on top of innovation.
40:14
So really, I'm a huge believer this is actually a seminal moment for companies to invest.
40:19
And I think it's a combination of things.
40:21
One thing -- and I believe this is -- that there's a deal of instinct that's important in innovation.
40:30
I think you can't always find it going back or in facts or analytics.
40:33
I mean if you really -- you have to have some kind of art of it and the instinct of it, as well as the science and facts but, you know, the consumer herself or himself will tell you a good amount of the answer.
40:47
I mean, you can be searching out there, but if you really listen and have the constant tentacles into -- I find some of the biggest answers in the customer complaint area.
40:59
You go into your call center or your customer complaint area about your products and/or the services -- right in there, from what they don't like, is the answer to what you can do.
41:10
So it is just like, go in there, sit there, and listen to the phone. Pick it up.
41:14
I've done that for a couple hours every once in awhile, and you can get a tremendous amount there. There's great partners.
41:21
I think innovation is -- it's got to be outside-in not just inside-out. R and D.
41:28
Lots of big companies -- P and G is a great example, who used to be more insular in terms of their innovation -- are doing partnering with universities, partnering with individuals, just trying to get more outside-in innovation.
41:40
And so, for a company like ours where we maybe had our R and D did 85 percent of our innovation, I'm hoping it'll be 50 percent in the next couple of years.
41:52
Really trying to seek, because we have an entrepreneurship culture.
41:56
One of the things we did in this brand that we have called " Mark," which really was not named after Mark, but.
42:02
>> [Laughter] Andrea Jung: Got a lot of brownie points at home, but the point of the brand was, you know, women making their own mark on the world.
42:11
>> [Laughter] Andrea Jung: But one of the things that we did was open innovation from consumers.
42:19
So if you -- we call it a participative brand.
42:24
So if you are in Australia, and I mean, everybody -- there's so many people who have a great idea for a makeup product.
42:32
And if you've got a great idea in Australia, you can send that in to us.
42:37
And it can be part of the brand.
42:39
And so, and it can even, on the inside of our packaging on the carton it would say, "Suzy Smith, Australia. Avon Representative.?
42:46
And so, what we're trying to do is have people virally, who have great ideas -- because we're an entrepreneur company -- say, "You can give us a product and maybe if you keep selling enough of this, we can help seed-fund you to help start your own makeup business. Why not??
43:04
And we've got some enormously interesting ideas right from our own consumer and/or our seller base.
43:14
>> I'm a firm believer in a professional mom.
43:17
I wonder if you could give us information on how you divide your time and make sure you get these disciplines across to your children and do the bang-up job at home as you do at work. Andrea Jung: Okay.
43:31
Well, my answer for this -- which has evolved -- is the following: I don't know.
43:37
I'm sure there are some people who can get it all done in one day. I am not one of them.
43:42
But, I really believe two things: One is, it's all about prioritization.
43:50
There are days that my children absolutely win and the company does not.
43:56
There are also days where the company has to win and they don't.
44:00
And I think I've made the right choice with the right priorities.
44:05
So the days Avon loses, I don't feel guilty if I'm not at a meeting.
44:10
Years ago, I would not go to an Avon meeting, and I would feel guilty about it the whole time. I don't do that anymore.
44:16
My probably best example is this time it was this -- couple of administrations ago, so it was George W Bush.
44:23
And they were inviting eight CEOs to the White House.
44:26
I'm the only woman invited on a specific topic.
44:29
And it was also the first day that my daughter was going away to a camp that mothers were going to take their kids to the bus.
44:37
And, you know, it was one of those things where it was like a split second.
44:42
I mean, I really thought, "George W is never going to remember if I am at that luncheon.?
44:48
>> [Laughter] Andrea Jung: But my daughter's going to remember one way or another, for probably the rest of her life.
44:57
So I didn't go to the White House.
44:59
I got a chance to go at another time.
45:02
And, you know, that decision was an easy one. Have I missed a game? Yes.
45:08
Have I missed the most important one? No.
45:11
Have I missed a meeting at work? Yes. The most important one? No.
45:15
So for me, it's just making a decision like that and living with it.
45:21
You know, I think you also have to have a sense of humor.
45:24
I remember this was in the Jack Welsh succession moment, and we had a Saturday morning call.
45:33
And we were all opining on who we felt Jack had a point of view should be in the succession for GE.
45:42
And it was the day of my son's third birthday party and I was at a Jodi's gym, and -- don't ask why, but I could not figure out how to use the mute button on the cell phone, so.
45:54
>> [Laughter] Andrea Jung: I was in an electrical closet taking this call.
45:58
And so, there'd be like, "Okay.
45:59
So Senator Nunn, what do you think??
46:01
And he's opining, and the closet bursts open and my son's like, "It's the wrong Scooby Doo! It's the wrong brown.?
46:09
>> [Laughter] Andrea Jung: And I am like this: [half-whispering] "I will buy you ten more presents -- >> [Laughter] Andrea Jung: -- if you leave this electrical closet.?
46:21
And of course he wouldn't. So, "It's the wrong one!
46:23
Damon had the other one; you have the wrong one!"
46:28
So, the whole GE board -- those who are still on the board are like, "Wrong color Scooby Doo, Andrea?? So.
46:34
>> [Laughter] Andrea Jung: But you have to have a sense of humor about it.
46:38
And it's real, and it's life.
46:45
>> In addition to having a social mission, is there a core to the corporate mission?
46:49
Avon's very involved in some philanthropic efforts.
46:53
I was wondering if you could speak a little bit more about those?
46:56
And also, as a public company, if you receive any resistance from some of the stakeholders that might be concerned that it's unrelated or detrimental to the bottom line?
47:05
Andrea Jung: Well, let me just start by saying I read a lot of business books -- as I'm sure you have.
47:13
I mean, so, I pretty much read them all, but one of my favorites is "Good To Great," by Jim Collins.
47:18
And the last paragraph of Jim Collin's book has always struck me.
47:21
If you go back and read it, it basically says that, "It is impossible to have a meaningful life without meaningful work.?
47:29
And that, in order to have meaningful work, it really is about the purpose.
47:33
And that, if you can find work where it actually matters -- not about shareholding -- but the work actually matters in life, you can then have a great life -- and I'm a huge personal believer in that. So we have a foundation.
47:46
We've raised $725 million.
47:48
So that's the largest kind of women's foundation, mostly towards women's health and "violence and oppression against women" issues.
47:57
And it's -- men and women alike in the company are equally passionate about the fact that, you know, we do "good" as well as do "well.?
48:07
And, it is really part of the corporate culture.
48:11
It's not about check writing.
48:13
I mean, our people participate.
48:15
They walk; they are deeply, deeply involved in it.
48:22
And I think it continues to make a difference.
48:25
From a "public company" point of view, we do get at the shareholder meeting, you know, in the old adage that "No good deed goes unpunished", we do have some activists who come in -- not so much that it's, you know, it goes against public company profits, because, in fact, I can argue that it's helped the brand equity.
48:45
And it has helped revenues and associations with company that do well.
48:49
I think there's enough of companies like us that can prove that it is an enhancement to brand equity, but you know, we' ll have our share of activists who kind of want to pick on certain things.
48:59
But in general I think there's a pretty direct correlation to -- when it's not just over here, when the work of a company -- whether it's sustainability you know, Wal-Mart -- lots of companies have really proven that when you are doing the right thing for community, for society, it trumps and really adds to corporate revenues and profitability.
49:31
So I'm a big believer in that.
49:33
>> So you're in a 140 countries.
49:35
So some democracies, some dictatorships.
49:36
How do you see your company interacting with different forms of government, and what do you foresee you got to do in the United States as the government becomes more activist?
49:44
Andrea Jung: Well, I think that, you know, certainly in the United States, but in general -- as we like to say in business.
49:52
I mean, the regulators and the government is taking a larger and larger role.
49:58
They've moved in next door, and they're not moving out. Everywhere.
50:03
And so, I think the role of government relations for a company, you know, we're not highly regulated, but even for us, the role of government relations in Washington contingent or your industry groups that are representing you are much more critically important.
50:22
And I think it's important to have the opportunity to talk with some of the staff and make sure that, in Washington, that companies are being heard.
50:36
I think, the first few months was so primarily focused on the financial sector, and then auto.
50:46
That, really being able to hear the voice of consumer companies and other industry companies and understanding tax legislation implications -- health care implications -- is critical.
50:58
For consumer companies, I mean, the number one issue in my mind is unemployment and the stimulus money getting back into the economy to the create jobs.
51:05
Because, in a consumption-based economy where unemployment is over ten percent, that is tough for a structural recovery of consumer spending.
51:14
And so that I certainly think for developed markets remains a challenge.
51:19
But it's a new world order for companies with government quote "intervention and/or regulation" and having the ability to work with governments, partner, and be heard, is important -- much more so than it was when I took over ten years ago.
51:39
This is a whole another ball game.
51:42
But, you know, I think the vehicles, the forums, are expanding.
51:49
So I'm encouraged on that front.
51:51
There's a lot of time being spent now listening, which I think.
51:56
>> Last question, all yours.
51:59
>> So as business school students who are obviously pretty early still in our careers, and I was wondering if you could talk about kind of how you shape the trajectory of your career and what sort of criteria you use to base, and the initial steps and positions that you had when you were younger?
52:18
Andrea Jung: Well, one I've mentioned probably the most important inflection point for me to make a decision which was to "Really choose what you love" as opposed to what necessarily "you think you should be doing" and/or "tying it to income" and/or "title.?
52:36
I think the other thing that I would say is, I had spent most of my early career in retail and then higher end retail, and, from a non-emotional point of view on the Avon front, but on sort of -- I really took, I think, a risk when I left high-end retail and went to Avon.
52:56
You know, people were like, "Why are you doing that??
52:59
I mean "Ding Dong, the Avon lady.
53:01
I never even seen an Avon representative.
53:03
That's a really dated brand.?
53:07
And I felt that it would be a real change.
53:11
I thought it was different, alternative distribution.
53:15
I think distribution is key.
53:18
A lot of people talk about branding, but I think, "he who wins the distribution game" -- look at Amazon -- that's all I would say.
53:24
Just if you are in the consumer space -- he or she who can nail and reinvent the distribution game, will win. Branding is critical.
53:33
That's the cost of entry now.
53:34
Distribution is the final trump.
53:39
But it was an alternative distribution channel and it was global.
53:42
And I would say to you, you can take 2009, you can have an economic recovery projected in 2010 and 11.
53:49
GDPs in the developing emerging world is where the growth is in the world.
53:54
I mean, you can't run from the fact that, economically, it is global companies who truly have presence.
54:01
And I know, whether it's programs here that involve, really just getting out there and understanding those economies.
54:07
Being able to work in a company and work in those environments culturally, as well as understand the business levers for growth.
54:14
The lion share of the growth.
54:17
I mean, in our industry -- shave it -- 88 percent of the growth between 2008 and 2013 in the category is going to come from the developing and emerging markets in 2013.
54:30
So going to be something like that in every place, and being able to operate there I think is important.
54:37
But choosing a global company, one with an alternative distribution system, and one that really needed a turn around were a big bet. And that was important.
54:49
The other thing in my career I would say I have always done is, Try to do something outside my job.
54:56
In other words, example would be, I was in charge of domestic marketing, you know, for the domestic division.
55:04
And they needed somebody to kind of take on globalization, which was very unpopular in our company at the time.
55:11
It was sort of the "Not-Invented-Here Syndrome" was alive and well.
55:15
Everyone wanted to do their own marketing when I came to the company.
55:18
The first day I came, we put on a table one fragrance. It was 83 versions.
55:23
This country didn't like the color.
55:25
This country didn't like the name.
55:26
This country didn't like the smell.
55:27
I mean, it was just as decentralized as it can be, and someone had to take on the ugly job, if you would, of really trying to centralize.
55:35
And that was a really tough word.
55:38
And so, I did it in addition to my day job.
55:41
I took it on, and it was unpopular.
55:44
But I got visibility obviously to the top, because they wanted to understand if we could go left or right on this.
55:52
And that probably was pretty a big deal from a career point of view too.
55:57
>> Thank you so much for coming.
56:01
Andrea Jung: Thank you everybody. >> [Applause]