Technology Executive Council
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Opinion - Technology Executive Council

The Estée Lauder Companies: 4 lessons learned by an iconic brand about consumers in digital era

Michael Smith, chief information officer at the Estée Lauder Companies
Key Points
  • Estée Lauder's MAC Shanghai Store attempts to reach digitally-savvy Gen Z consumers through online experiences via WeChat technology and real-time influencer recommendations in-store via social media.
  • Its Long Island City Technology Hub was designed to create a new employee experience.
  • The cosmetics giant also hosts an annual ELC Hackathon as a way for its IT team to rethink problems.
A father and daughter play with a digital tablet at an Estée Lauder store in Shanghai.
SOPA Images | LightRocket | Getty Images

CNBC's Technology Executive Council is dedicated to the digital transformation of companies and organizations across sectors of the economy. Michael Smith, chief information officer at The Estée Lauder Companies, recently provided CNBC TEC with four lessons the eight-decades-old cosmetics company has learned as part of its own digital transformation.

1. Agility is key as consumer demands shift more quickly

Being agile enables organizations to quickly pivot in an ever-changing landscape. In the prestige beauty industry, agility allows us to rapidly respond to quick shifts in consumer demand and create new experiences for our consumers to better engage with our brands.

Given the growing trend of personalization and customization, we leverage many different technologies to customize our packaging, consumer experiences, retail offerings and more. For example, at our MAC Shanghai Store, our IT team used differentiated retail marketing to seamlessly communicate and converse with digitally-savvy Gen Z consumers, deliver extra in-store and online experiences via WeChat technology and provide real-time influencer recommendations in-store via social media. This mobile-first store uses a WeChat Mini Program for service booking, event reservation, ratings and review and self-service payments, features touch screens that integrates social platforms, provides interactive touch-tables to show products information, offers 3D customized printing and virtual try-ons with payments functionality.

In addition, it is essential to build an agile internal organization where employees are provided with the best amenities, tools and capabilities to enable easy collaboration and teaming to deliver the best technology solutions. Building an agile, digital workplace is crucial to allowing your team to develop and thrive, as well as making it easier to connect, collaborate and create with employees across the globe. Our Long Island City Technology Hub, for example, offers innovative and digital workspaces to enhance the employee experience. Every aspect of this space was designed and built with the purpose of amplifying productivity and promoting innovation, collaboration, creativity, agility — and fun.

2. Relationships with non-technology partners are essential to digital success

One of the most unique aspects of IT is the fact that it not only touches, but enhances, every part of a company. IT provides solutions to the business to increase productivity, enable better collaboration, enhance the retail experience for consumers, and much more.

At The Estée Lauder Companies, we have working relationships across our global IT organization, but also with other teams across our brands and regions especially because technology is so integral to every part of our business.

Effective working relationships expand past the company as well. It's important to understand there are times when transformation requires external support, so working with the right partners can be essential to your success. A fun, inspiring example of this is our annual ELC Hackathon, in which participants both internally and externally come together to solve a problem from scratch through hours of coding and project analysis. The ideas that are created during the Hackathon are then used to further our strategic vision within IT and bring in fresh, new ideas for our team. In addition, having the support of senior management who recognize the need for digital transformation is critical to creating a digital-first environment.

3. Anticipate change, but focus on and define the playing ground

I always encourage my team to take a broad view of our business, industry and consumer environment to anticipate and plan for the future. It's important to anticipate change, face reality, draw conclusions and swiftly mobilize to adapt to changing needs and demands. It is also important to have the ability to focus and define where to play, how to win, and what capabilities and management are pivotal to success.

4. Take the time to develop employees aligned with digital aims

Developing your employees, actively recruiting top, new talent, refining processes and investing in new technologies are fundamental to fully maximizing the potential of your team's inherit strengths and unlocking its full potential. Developing talent takes commitment and resources, and with tech being an industry that advances rapidly, it is important to offer teams support through internal and external resources.

To do this, we offer various stretch opportunities for our IT employees to take on projects outside of their scope to develop skills outside of tech/IT and broaden their perspective and experience. For example, employees are encouraged to take on short-term projects (such as planning our annual IT Day of Service) or longer-term assignments (such as planning the Hackathon mentioned above), in which they partner with various teams within the company (Legal, HR and Communications among others) to get a holistic picture of what it takes to run a large-scale and global initiative.

I also truly believe in the importance of recognizing and rewarding talent, for example, through our Estée Lauder Information Technology Excellence (ELITE) Awards, which celebrate and honor those in our IT organization who represent the best of IT. Each of our ELITE Award winners exemplifies The Estée Lauder Companies' heritage of high-performance, innovation and family values, and embodies the characteristics, behaviors, actions and spirit that reflect our unique IT organization. Employees who feel heard and know their work is valued are more likely to perform better than those who don't —inspiring others to do the same.

By Michael Smith, chief information officer at the Estée Lauder Companies and a member of the CNBC Technology Executive Council