Purposeful Luxury

DR. STÉPHANE J G GIROD is a Professor of Strategy at IMD where he leads the Luxury 2050 Initiative and directs the Reinventing Luxury Lab open program. As a scholar and strategic advisor, his work focuses on how luxury brands can stay future ready in more turbulent times. He has extensively advised luxury brands and designed and delivered learning journeys to help them integrate purpose-driven strategies into their business models while preserving brand equity and delivering long-term value. Girod brings deep expertise in guiding luxury industry leaders through the evolving demands of more virtuous business practices.

Preface ix
Why This Book ix
The Book's Structure xi
About the Research xii
My Gratitude to. . . xii
PART I Luxury Brands Cannot Take Their Social License for Granted 1
Chapter 1 Why Luxury Needs a Purpose 3
Luxury's License to Operate 4
Luxury Has a 20-Year Window. The Clock Is Ticking 8
How Can Luxury Retain Its License to Operate? 12
Chapter 2 Luxury's Sustainability Dilemma 13
The Path to Sustainability Is Fraught with Trade-offs 14
Can Stakeholders Show The Way? 14
Starting This Journey from a Position of Secrecy and Competitive Rivalry 18
Why Contemporary Luxury and Sustainability Clash 18
The Other Costs of Luxury, Beyond Carbon 24
Good Intentions Fall Short 24
Can't We Just Ride the ESG Train? 28
Where Do Luxury Brands Stand: The Focus of This Book 30
PART II What Luxury Can Learn From Sustainability Leaders 33
Chapter 3 Strategy: Setting a Direction 35
The Stakeholders You Don't See 37
Materiality Assessment: Mapping What Matters 38
Understanding Your Biggest Impacts 40
Building a Strategy Around Purpose 42
Balancing Short-term Impact Reduction and Long-term Strategic Renewal 44
The End Goal: When Sustainability is The Strategy 48
Chapter 4 Leveraging Purpose for Courageous Execution 51
ACTIVATE: The Value Chain 52
MOTIVATE: The Organization 61
COLLABORATE: Across Ecosystems 67
Chapter 5 Leading Sustainability Transformation in an Agile Way 69
Schneider Electric's 20-year Transformation Journey 71
Why Sustainability Requires Agility 74
Lessons for Leaders 77
In Summary 80
PART III A Snapshot of Today: How Luxury Brands Perform 81
Chapter 6 Luxury Brands' Strategic Choices: Strong on ESG, Weaker on Reinvention 85
Cutting Emissions, But Not Fast and Deep Enough 86
The Next Frontier: Nature Targets 93
Many "S" Targets, but Are They Focused and Ambitious Enough? 97
Sustainability Is Not Yet a Strategic Opportunity 107
Without Purpose, It's Business As Usual 116
Conclusions: The Focus Remains Short Term 118
Chapter 7 Executing Sustainability: Early Successes, Missing Links 123
ACTIVATE: The Missing Link Between Governance and Strategy 124
ACTIVATE: Governance Can Drive Change 135
ACTIVATE: Customer Engagement Lags Behind the Supply Chain 140
MOTIVATE: Employees: Progress but Accountability Needs to Reach Deeper in Organizations 147
COLLABORATE: Tackling the Root Causes of Harm 154
Conclusions: Four Gaps Still Need Closing 160
Chapter 8 Transformation Journeys: Press on with Agility, Cut the Hesitation 163
Building Change Upon Strong Foundations Is a Must 165
Transformation Cannot Be Linear 173
Breaking Silos Without Oversimplifying 174
Purposeful Leadership Is Indispensable Yet a Rare Commodity 176
No Sustainability Without Financial Strength 178
Conclusions: How Luxury Compares with Sustainability Leaders 188
Conclusions of Part III: The Journey Toward Purposeful Luxury Is Only Starting 196
PART IV Securing Luxury's License to Operate: Accelerate on Transformation 199
Chapter 9 The Promise-and Limits-of Circularity 203
Circularity Is Not a New Concept 204
Circularity Comes with a Stack of Hurdles 206
Innovation in Circularity 210Penetrating Circular Spaces Calls for New Capabilities 216
The Circularity Reckoning 219
Recognizing the Limits of Circularity 225
Chapter 10 What If Luxury Is No Longer Called Luxury? 229
A Preamble 230
How to Win: REDUCE 231
How to Win: REINVENT 236
Where to Play: REDISTRIBUTE and REANCHOR around New Forms of Rarity 241
Conclusion: Purposeful Luxury 244
Appendix A: Content Analysis Methodology 249
Appendix B: Results of the Content Analysis of the Big 18 Luxury Brands 255
Notes 267
About the Author 305
Index 307