10 Questions with Philippe Houzé

If there’s any place that encapsulates l’art de vivre in France, it’s Galeries Lafayette. The department store chain’s flagship location on Boulevard Haussmann features a majestic glass dome, art nouveau staircases and 10 floors of retail shopping, fine dining, and beauty and spa services. This breath-taking store, along with other Galeries Lafayette stores across the world, encapsulates the crème de la crème in fashion, architecture and gastronomy, much to the delight of its customers.

That’s all thanks to Philippe Houzé MBA’74, chairman of the executive board of the Galeries Lafayette Group. For more than four decades, Philippe has served as the creative genius behind the 120-year-old company, continually leading its evolution and growth while extending its brand across the globe. Guided by the mission of its founders, “making the good and the beautiful accessible to all,” Philippe now has his sights set on transforming the company into a multi-channel international speciality store in fashion, beauty and home ware.

Outside of his day job, however, Philippe has another project on his plate: Helping INSEAD transform and strengthen its brand. In addition to generously supporting a variety of branding initiatives at INSEAD — most notably, the school’s redesigned graduation ceremonies — Philippe has provided invaluable counsel to INSEAD as it looks to build a more powerful global brand.

Here, Philippe shares his insights about branding strategies in today’s environment, lessons learned from his storied career and fondest memories from his days at INSEAD.

Why is the strength of INSEAD’s brand so critical to its future?

Business education is becoming a very competitive business. INSEAD lives on its own resources, and we need to attract the best people to maintain its high quality. There are some people who wonder about the utility of the MBA programme when there are e-learning resources available, such as MOOCs. That’s why we have to make people aware of INSEAD’s mission to develop responsible, thoughtful leaders who accelerate growth, improve living standards and promote peace and prosperity globally.

How would you like to see INSEAD’s brand evolve?

Being a merchant, I distinguish between a banner and a brand. A banner sells products, a brand promotes its values. INSEAD has an excellent product: its no. 1 MBA programme. But in my view, INSEAD’s main value, “business is a force for good,” is far more outstanding.

Branding is about differentiating. We have to differentiate ourselves, not only through the one-year programme or the three-campus education, but through our business philosophy.  We must demonstrate that we are the only true “business school for the world.”

What inspired the redesign of INSEAD’s graduation ceremonies?

For INSEAD students, receiving their diploma is one of the most important moments of the year. So when [Chief Communications Officer] Anand Vengurlekar came to me to propose a very high-class ceremony, I decided to sponsor it. The event benefitted from some of INSEAD’s most symbolic elements: It was hosted at the Château de Fontainebleau, where the school originated. Professors and students wore their gowns and there was a dramatic moment with big screens. We had professional photographers onsite to capture the unique moment for participants and their families.

You’ve had incredible success in growing the global brand of the Galeries Lafayette. What can INSEAD learn from your experience?

Our founder’s vision has been always been global — even from the beginning, in the 1920s. He set up small stores in exotic cities like Lima, Fez, Alexandria and Casablanca to extend Galeries Lafayette’s brand and attraction. The following generations developed that strategy further, focusing on the “French Fashion” image and art de vivre à la Française. Customers from all over the world were invited to meet under the Byzantine cupola in the luxury souk Boulevard Haussmann. We have been constantly renewing this show, which we call “retail-tainment.” Entertaining our customers is one of the ways to compete with the internet, which is disrupting the retailing business.

One of my favourite mantras is “create value without betraying one’s values.” INSEAD, like many other businesses, has to stick to its values. At the same time, it has to reinvent itself.

As the number one retailer in France, Galeries Lafayette has already reached the pinnacle of its industry. What does it need to do to retain its competitive position?

You have to stay very humble when running a 120-year-old company. As the Romans said, “The Tarpeian rock is very close to the Capitola.” In other words, when you think you are at the top, you can be close to the fall.

Jack Welch said, “When the rate of change outside is faster than the one inside, the end is near.” We have to be humble, agile and adapt to our business competition. We have to cope with disruptive tsunamis and efforts to “uberise” all different kinds of businesses. Our main challenge is to develop an omni-channel approach to our customers — to promote our brand through different media, from the brick to the click. We have to conceptualise our offering as a new, multi-specialised lifestyle store, as the generalist department store is already dead.

What motivates you to invest in INSEAD?

INSEAD played a very important role in my professional life and private life, so I wanted to give back what I received from the school. Being close to the school keeps you close to the changing world and prevents you from complacency.

What are your favourite memories from your time at INSEAD?

Closing my eyes, I remember driving through the forest every day through different seasons with mixed colours and smells. I remember the friends I made on the first day — friends that I still enjoy today. I remember the fantastic cabaret nights when we could appreciate the smart differences in characters of nationalities. I remember also working hard but knowing that it was because I was ambitious and wanted to become a general manager.

How has your INSEAD education helped you thrive in your career?

The case method prepares you for real life in business. When faced with difficult situations, you need to quickly analyse the problem, make decisions and take action to find solutions. You have to align your committee members and use all of the knowledge and skills you have accumulated. The case method teaches you how to do this.

To thrive in your career, you have to use what you have learnt. But you also have to follow your intuition and take chances. As Winston Churchill said, success is “the capacity to go from failure to failure without losing one’s enthusiasm.”

How did your son, Nicolas, end up at INSEAD?

After Nicolas graduated from university, I wanted him to start as a trainee in a fast-moving, good global company. But he preferred to follow his father’s lane and start unloading lorries in our supermarket company. He then wondered if he needed to enter business school to expand his management horizons.

Having heard about all the nice moments and excellent souvenirs I had from our terrific ’74 class, Nicolas didn’t hesitate to apply to INSEAD and prepare for the GMAT test. He got his diploma in 2007 and does not hesitate to say that it was one of the best years of his life. After Nicolas underwent several years of training, I decided to give him the operational helm, like my father-in-law did for me when I was 35.

At the end of the day, what motivates you?

Growing up, my family had a biscuit-making company. The market became very competitive in the 1960s with the rise of game-changing companies in America and Britain. I was very disappointed when my father told me in 1968 that his company went broke. It was a real shock!

I promised then that I wouldn’t work for a family business. But, later, I didn’t hold my pledge. I am now running the fourth generation of a world-famous department store group. I am obsessed with transferring the company to the fifth generation and proving that a family company can survive.