“I have a passion: chess. And messes are exactly what leadership is: the ability to analyze, synthesize, and then Fix and Fix
Let Dario Ferrari himself summarize the essence of his career in the most productive way possible. The founder and president of Intercos Group, which remains the world’s leading supplier of color cosmetics, is a guy who doesn’t want to be introduced. He has built his reputation as one of the top visionary marketing professionals in the industry for over a century thanks to his passion, instinct and wonderful bets on innovation, which is the true driving force of his business.
Founded in 1972 in Agrate Brianza, a 40-minute drive from Milan, the Italian power plant recorded a turnover in 2019 of 712.7 million euros, 3% more year-on-year; it has recently employed approximately 5,800 other people worldwide, with 11 study centers, 15 production plants and 15 sales offices on 3 continents.
Ferrari is a captivating blend of air of mystery and ruthless honesty, pragmatic attitude and a keen sense of humor that sets it apart. These qualities were never given up, even when the pandemic ended the company’s planned initial public offering for this year.
Here, Ferrari in the long term of the list, why delighting is no longer enough in the industry and is the only facet of the business that still surprises you.
What have been the most demanding situations this year, given the global pandemic and the resulting economic environment?
Dario Ferrari: It turns out to be fate, but before the storm, it’s quiet. In the first quarter of this year, we performed, at least in terms of order revenue, in a surely exceptional way and I thought, “Wow, this year will be fantastic.” Everything was fine. Orders were coming, the IPO was coming, everyone wanted to invest in Intercos and then we had this [punch in the face].
But we made a distinctive trait out of necessity and tried to react and paint one way or another … We have been mainly involved with the fitness of our employees, we have closed [offices] for a long time, most commonly challenges in the United States. Fortunately, we are part of an industry where production can continue, so at that level, the damage is not significant. The biggest challenge was the offer, so maybe we were open, but we didn’t have the raw fabrics or the packaging to produce as much as we would have liked.
In terms of personnel, we have now done a series of serological tests that have painted us, so from a human point of view, we believe that we have controlled the pandemic well. We are a company that makes innovation and new products and we have continued to do so. Obviously, running [in those conditions] is very difficult. We were in a position to open a fantastic showroom, many consumers had to come and make a stop at us and all this didn’t happen. So we had to start running in the formats we all know today, like smart boxes and live streaming with consumers… He taught us a new way of running and we figured out how to deal with the situation.
You talked about the IPO. Are you still at it and postponed it or is there a plan to replace it?
D.F.: This is the time when we are unable to move forward with the IPO due to market conditions and place of acceptance. Before re-fitting horny into the marketplaceplaceplace, the marketplaceplaceplace will have to [recover land] by itself… I don’t think we can communicate about an IPO for two years, so let’s wait. From this point of view, we are fatalists. Fortunately investors need us, they call us, they ask us, it means that we have done a smart task and that we only have to wait for the right moment. As in life, time is paramount.
What about long-term acquisitions? In early July, he took over his joint venture with Shinsegae International in South Korea. Do you have any other movements?
D.F.: It’s a moment of opportunity, which means that not everyone will succeed [through this situation] and that anything can also happen in that direction. South Korea was a really strategic necessity, because we believe a lot in South Korea and we seek to integrate it into the group … It will become an innovation center for Asia. We are now thinking of an imaginable operation for Japan, which we have been contemplating since before the pandemic, and for the moment we have been constantly contemplating it. There are other opportunities that would possibly be similar to the mass market, but taking action right now can also be dangerous. Since we are well, we are healthy in spite of everything, we think well before we act.
How do you see the evolution of the good-looking industry? What will be the maximum vital drivers? What will consumers and good-looking brands want?
D.F.: That’s the question of the century [laughs]. To be completely transparent, I’ve been doing this task for 48 years, so delighting me is the only thing I don’t miss. I must say that we have relied on delight for many years, but unfortunately today, delight is no longer obligatory because the world is becoming very fast. What we need to do is paint much faster, or check to anticipate replacement more quickly.
How can we do that? Today there is a lot of communication about great knowledge and all the formulas that can give us information, and that is what we are doing. We paint with an internal formula: we regularly partner with 450 to 500 consumers and each of them communicates us, tells us what it needs, where it needs to go. Therefore, we have an amazing source of information, which will have to be thought and developed. So, first of all, we seek to collect as much as imaginable the knowledge that we only have access to through the Intercos Intelligence formula that we have developed.
Then we communicate with the experts, but even they don’t know how to anticipate the long term either, so to do that, you have to perceive what other young people want. We’ve noticed how Generation Z has replaced the regulations of this game, and we see how the pandemic is also converting regulations. [We see] how, with the use of masks, makeup is notoriously less effective while skin care is doing better; how the mass market works best because pharmacies have remained open and prestige suffers more, while in the past it was quite the opposite.
There’s also something economic that plays a role. We have been running in this direction for some time; Three or four years ago, we already knew we had to replace the way we painted to anticipate the market, trends and what consumers wanted. In the next 4 to six years, we will have more than one billion new consumers, most of them from Asia, so the basic challenge for any company that needs it is to perceive what those billions of people will want.
But we will also have to sense the effect this pandemic will have on attitudes and consumption. Let’s not make today a facet that will be critical that is psychological. So-called cabin fever syndrome is a fact, other people are afraid, don’t need to pass out, and if they do, they’ve replaced the way they interact with each other. So there are many things to consider if we need to remain leaders. Of course, a lot will depend on how the market reacts and what our consumers and competition can do. We will not replace the way we work, we have not stopped our studies and inventions for a second, because I believe that only those who have controlled to keep running in the right way will have benefits in the future.
Innovation, technology, what else is helping you differentiate yourself from today’s competition?
D.F.: I respect all my competition. I’m checking the output to see what they’re doing and I’m checking the output to see how we can do better. With a little presumption and yet also going out to tell the truth, I think we have gotten ahead of what our competition has done, so it’s hard for me to think or compare or locate facets of differentiation. We have our own way of painting, we’re engaged. Today, a maximum of 1,000 people are based solely on innovation, which is a lot when you consider that we basically manufacture color and skin care cosmetics. Today, we can quietly say that we are the corporate that invests to the maximum in makeup, because no one puts the same energies that we put in the progression of new products. But today we do more than just formulate. Even the other people we’ve recently hired belong to brand positions. Then we’re uploading the culture we didn’t have. Before, we were, and remain, a product company, so the most important thing is the product we sell; However, now we have to position it, check that we are more market oriented. This allows us to talk to consumers by speaking a little bit about their own language. We do not avoid with a great formula, now we put it in a market context, in order to give ideas, recommendations and assistance from a market and trend point of view. And it’s an added price, we make the tables of the highest productive agencies for hire for our clients, and that’s how we’re investing more and more.
What is your ultimate vision for your business? Where can the company move forward in terms of length and scale?
D.F.: The sky is the limit. I think I’ve structured the company to make that vital leap that I think we can still make. If we want to grow, we also want to diversify. We are already global enough, but we want to diversify products; we still have a lot of spaces to fill. Our expansion can remain vital, if the market allows, but we have grown more than the market. And I think we will continue to do so because the strengths we can bring today in terms of innovation, creativity, market and global presence are starting to be really vital. Therefore, it is a mechanism that can take us longer because it took time to create it.
Innovation is not something you can buy. It’s a cultural challenge that comes from afar: it comes from raising other people the right way, motivating other people the right way, having other people right. It’s hard work. It took us all this time to have a pretty exclusive team. And, in fact, others seek to take away other people, but they are right to do so because my other people are the most productive and when they take them away, they also remove some of the knowledge of Intercs. But the basic fact is that we never stop. What they take with us today, tomorrow we will have more, so it is a way to succeed over the festival and be at the forefront.
What’s making a leader today?
D.F.: Each has its own leadership style, absolutely another and manages your business in another way. However, there are basic concepts that a smart entrepreneur never forgets. First, replace. In my opinion, you can only grow by replacing it. And replacing is a very complex thing in a company, yet, without it, corporations are blocked, they don’t move, they don’t grow, they don’t have a chance to look to the future. So there are many corporations that rot just because their managers are not able to replace them, they are not curious enough, they do not generate new sensations.
The other basic facet is the ability to make decisions. A leader makes a series of decisions a day and will have to make them quickly. Are all decisions good? No, I made a lot of bad decisions, but the vital thing was to do it at the time.
What unexpected maximum when you started your business?
D.F.: If I had to go back in time, I would probably never do this task again, although I owe you a lot because I like it and, in fact, I’ve been doing it for 48 years. What surprises me most every day is that I thank you. I take it into consideration as a confusing task … because makeup is the product of maximum complexity, the most complicated to design, produce, sell and distribute, we are actually in the greatest complexity. And then manage all this, you want a crazy little entrepreneur [laughs]. But I’m on the front line because in the end, I still like it.
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