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#262: Lew Frankfort, Chairman Emeritus and former CEO of Coach – Combine magic and logic
01:01:29
Listen to this leadership podcast with Lew Frankfort, Chairman Emeritus and former CEO of Coach, and discover the power of balancing execution and creativity.
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- [00:00]
Lou Frankfurt
There's no product that's more intimate to a consumer, to a woman, than a handbag. She opens it 60, 70 times a day. Her essentials are in there. She touches it, feels it.
- [00:18]
David
If someone had told 20 year old Lou that handbags would define his career, what would you have said back then?
- [00:26]
Lou Frankfurt
I would have said, that's absurd. There's no way I would be flabbergasted if someone said it. And I would think that it would be an out of body experience, like me going to the moon.
- [00:40]
David
Well, we're going to learn how you got there. And I want to start by taking you back and taking you way back. And you know, you grew up in the Bronx. As I understand it, your father was a policeman. What's a story from your childhood that shaped the kind of leader you are today? Lou?
- [00:57]
Lou Frankfurt
I think it had to do with going way back with my mother's and father's belief that I could be anything if I worked hard and I was relentless. And their belief in me unconditionally really helped me through tough periods.
- [01:16]
David
Do you remember a time when, or a story when you felt that belief from them that they gave you that sense that you could just make anything happen or.
- [01:25]
Lou Frankfurt
I do. I vividly remember a moment when I was in the ninth grade, sitting in a guidance counselor's office, Mr. Schmutter, with my mother next to me. And he looked at us and said, I think Lewis should go to a vocational school. I don't think college is for him. And my mother said, lewis is going to college, and stood up and left the room saying I should follow her. I was embarrassed because I thought maybe the guidance counselor was right, that perhaps college wasn't for me. But she was right. I followed a few minutes later. It turns out that I had speech impediments when I was a young kid, and I also was a late bloomer. If Mr. Schmutter could see me today, he might second guess some of the recommendations he made to other families back then.
- [02:30]
David
Yeah, well, it's amazing how some people will stunt your growth and other people just help you take off. You know when you see people stunning other people's growth within your company or within. When you see people shutting people down, how do you react to that today?
- [02:49]
Lou Frankfurt
I get distressed. I always do. First, I believe that you need to let people become the best versions of themselves and you need to create an environment that allows you to do that. And one of the things I took away from my childhood experience is you cannot let others define who you will be. Possibilities are really infinite.
- [03:18]
David
And, you know, so you, your mother encouraged you, your father encouraged you, you went on to college. And then, as I understand it, your background is very interesting to me. You spent nearly a decade in New York City in government. What did that teach you about leadership? Lou?
- [03:34]
Lou Frankfurt
It really actually helped prepare me for coach in a lot of different ways. I had a two terrific mentor for a very important five year period when I was in city government who really helped me learn how to strengthen my investigative skills, how to be incisive, concise, and the alike. And a mentor like Herb was a remarkable experience. That was one thing that I learned from my experience in government. Something else that I learned is that not everyone is looking out for the greater good. Of course, many people in companies and in government and nonprofit organizations, many of them are looking to get by to Friday to the next holiday. I was looking to improve the quality of life for the people that I served, and I needed to find the right environment within government to do that. I did find that actually an example of that significant development one was when I was asked to run Daycare and Head Start for the City of New York during 1976. I was considered a strong data oriented analyst with good social skills who cared for people. And this particular agency, Daycare and Head Start, was at the center of a fiscal scandal during the time New York City went bankrupt. And I was asked to come in and improve the quality of service and ensure that the agency was complying with federal and state regs for eligibility for kids.
- [05:36]
David
So, like, when you go into an environment like that where it's toxic, obviously, I mean, people weren't doing the right things, you know, how did you, how did you change the tone as a leader?
- [05:45]
Lou Frankfurt
One of the early things I learned is that you really need to have belief and purpose and that you needed to be able to articulate that consistently and concisely to your team. And my goal was to protect the children that were eligible who were in daycare and Head Start services. And I built around me a coalition team of strong leaders who shared my belief that these services are essential as gateway services to help children from lower income families close whatever educational or social gaps they might have so that they could live a better life. And I developed a very strong team that shared my belief and we went about it very systematically. City hall largely kept out of our way, and we made the cuts that we needed to do. We also made the improvements that allowed every eligible child to stay in care.
- [06:50]
David
Now, Lou, you had this job with the city in the 30s. So, you know, you got a massive challenge on your hands and you're really young. How did you handle that pressure at such an early stage to take on so much?
- [07:07]
Lou Frankfurt
I've always been driven by a drive for excellence and a fear of failure. So the fear of failure left me no choice but to be 24 7, singularly focused, determined, relentless, and at the same time, bring in, most importantly, the right team, who shared, as I said earlier, my beliefs, but also could get things done. Execution is a real big problem in organizations, particularly in government.
- [07:43]
David
You know, one of the things you said you picked up that I really loved was investigative skills. You know, I've done a lot of podcasts, talking to a lot of leaders, but they've never really described that as a skill in that specific word, investigative. Say more.
- [08:01]
Lou Frankfurt
Well, I think one of my strengths is my insatiable curiosity. And if I was to bridge to coach just for a moment, I believe going to coach with a fear of failure and a drive for excellence and not knowing anything about the industry, my immersive curiosity actually served as an advantage because I really had no predispositions about what it took to grow a handbag company or a brand. I didn't really understand the category or the industry, but I was able to apply what I learned over my prior life, particularly in my government years, to coach.
- [08:52]
David
And that investigative skill, what are the components of that in your mind?
- [08:58]
Lou Frankfurt
First, when I think about a situation, I think about what are the relevant parts. And in the case of a company like Coach that produces a physical product, there's the product, there's the brand, there's the consumer, and there's the marketplace. And I have always been very consumer focused in my life. So when I was in city government, I was at service to the families and children that receive care. So when I went to Coach, the first thing I wanted to understand was, who's buying Coach? Why are they buying Coach? So during a. In the preparation, as an example for an interview, I pretended to be a Business Week reporter freelance, and I was doing a story on emerging small brands. So I spoke to buyers and department store merchants, Bloomingdale's, Bonwettel, Macy's, and they all said to me, product is oversold, it has a strong following, and we always run out of product before Christmas because the founder limits production. And for my last conversation, I went into a handbag store on 72nd street on the west side of Manhattan. Back in the 70s and into the 80s, before department stores became dominant, there were lots of small family owned Individual accessory stores, luggage stores, handbag stores, dress stores, and the alike. And so I go into this store and it's a bag store, and I don't see a Coach bag. And I say, do you? And from underneath the counter, the shop owner takes out a Coach bag and says, I only have one bag, and it's reserved. I said, wow. She said, there's a cult following. People love their Coach. And I checked off that box, and it made me really curious to understand why people loved Coach. And with that background, I joined. I joined Coach.
- [11:25]
David
And so you basically started out as an investigative reporter on this company. So what made you really want to make that pivot into the handbag industry or accessory industry? You know, what drove you to that point?
- [11:42]
Lou Frankfurt
It was entirely serendipitous. The mayor of the City of New York at the time at Koch, actually had just passed me over for a promotion for a job that I felt, with the right leader, could really improve quality of service for New Yorkers. And he said to me at the time that I was too principled. I had known him from when he was a congressman, but that's another story. But the short of this is I was sharing a taxi ride with a Columbia professor after guest lecturing at a Columbia graduate class. The work that I had done and Coach had turned into a case study. So we shared a taxi, going downtown one evening, and he said to me, what do you do for an encore? And I smiled, said, I don't have the faintest idea, but I would like to go to the private sector, not as a consultant. I wanted to do something that would combine strategy and execution. I was about getting things done. And he said to me, I have a friend from my childhood who runs a small pocketbook company called Coach, and he's looking for a protege. He's 60 years old, and he wants someone with good values and would prefer someone from outside the industry. And I said, well, that fits me, I guess. And I went on my first interview.
- [13:17]
David
Yeah, and you said that you didn't get this job before for the city, because Mayor Coates said you were two principals. And then this guy says, hey, you've got great values. What did Mayor Coates mean by that? Dean 2 Principal, tell us that story.
- [13:35]
Lou Frankfurt
When I ran daycare and Head Start, I took the job during the city's fiscal crisis, as I mentioned, in 1976, and the city was in bankruptcy, and the poster child for excessive spending and waste was daycare and Head Start. So I knew I was going into a hornet's nest. And I said, I will only do this if I don't have political interference, because I need to call it by the merits. So we developed a set of metrics by which we would determine which centers would not be allowed to continue. And for those centers, of course, we had to find places for the children that were displaced who were eligible. At the bottom of the list of about 350 individual daycare centers, neighborhood run. There was a center in Brooklyn outside of Ed Koch, who was an Upper east side congressman outside of his district. And I got word that he insisted on seeing me. And he came to my office. I knew why he was coming since intermediaries told me. And he basically said, this program is very important to me, Lou. And I said, I understand that, Congressman. However, when I look at the facts against other programs, it just doesn't stand up. In fact, it's really in the bottom 10%. And he looked at me and said, I want you to keep this program open, Lou, and walked out. And unfortunately, I wasn't able to do that.
- [15:23]
David
You stuck to your guns.
- [15:25]
Lou Frankfurt
Well, he didn't have any authority over me. He was a congressman. But little did I understand that 18 months later, he would become my boss as mayor of the city of New York.
- [15:37]
David
Probably one of your biggest breaks, because it took you to Coach, where you end up becoming. You started out as a market manager, as I understand, and you become CEO of this company within six years. But what's the big lesson you got there in terms of how leaders can position themselves for bigger opportunities? Because you were in a small company, but you really rose quickly to the top.
- [16:02]
Lou Frankfurt
Well, it was a small company, so there wasn't many levels between me and the top. What I learned in my early days was what Coach could become. I always looked for a North Star, whether it was in government or now, of course, at Coach, and the North Star was that Coach could be a bigger and stronger business. And I started by listening to consumers and how they made decisions to buy things. And there's no product that's more intimate to a consumer, to a woman, than a handbag. She opens it 60, 70 times a day. Her essentials are in there. She touches it, feels it. And what became clear to me by looking at other models. So one thing I did, of course, was look at competition. And there were no American luxury brands. We don't have a history of luxury brands. We're a country of immigrants. And there were. And there were European brands, which had very limited distribution. In 1980, however, one of them I admired greatly, and that's Louis Vuitton. They had at the time, I believe, 20 of their company owned stores. They were able to control their destiny. And when I spoke with consumers, it became clear that we would be able to have much more control over the future of Coach if we reached consumers directly. So with the owner's encouragement, I learned the mail order business and started a catalog business. And shortly afterwards, we opened the first Coach store, actually in Madison Avenue in 1981. So two years after I arrived, we already were a multi channel business. It was large long before people use the term omnichannel.
- [18:10]
Kula
Hello, friends, it's Kula. Stay tuned to the very end of the episode. David and I are going to debrief some of the concepts that he and Lou talk about in their conversation. And I'll ask David how he applied some of those concepts to his leadership at Yum Brand. So the goal of the debrief is to really give you something that you can take away and apply to your work, to your leadership and to your life. So stay tuned to the very end so you don't miss the debrief.
- [18:35]
David
You transformed this company from $6 million to $5 billion and made it a global brand. And one of the things I was really interested in is, you know, how you, you broaden the definition of your business to this accessible luxury. What did you, what did you mean by that? And how did you get the conviction to go after it with the kind of passion that I know you poured into it?
- [19:00]
Lou Frankfurt
Well, by the time that we went public, we were already $500 million and we had been extremely successful in entering Japan and some other markets. And clearly we went from a US Brand to an international brand. What also became clear to me was that investors would not understand how to value a handbag business. When we went public, we needed to create a much more clear positioning so investors would understand. Hence, when we looked at bags purchased in the United States, there were mass brands and they dominated the department stores and specialty stores. And they were basically imitations of European brands or house labels that the department stores made. They were made with inexpensive materials in the lowest possible labor country. There was mass, and that accounted for probably 95% of units and 80% of dollars. The other 20% was a mixture of small American brands like Coach or Dooney and Bourke or Ann Klein or Calderon or Trafalgar. There were a bunch of small handbags and then there was European luxury. What became clear to us when we were in the conference room was that we were occupying a single lane between Mass and luxury. And with Americans more interested in brands than ever before, especially women, we saw an opportunity to create a term that would actually identify us. So I don't remember who created, who coined it. We had 15 or 20 words on the wall, and all of a sudden we circled accessible luxury. We left the conference room, and then I spent the following day defining what accessible luxury looks like. And when we went on our roadshow, we were able to help investors, particularly men, who at the time probably represented 85% of the people on the roadshow, understand that Coach was a brand that had an emotional attachment with its consumers, who were primarily women.
- [21:43]
David
Yeah, I love that idea of accessible luxury, that now you can have that luxury. And obviously you kind of found the sweet spot on value. How did you think about pricing?
- [21:55]
Lou Frankfurt
When I started the Coach, what became clear to me, and I now am getting back to my basic values, that we're a democracy. And I saw democratized luxury as something that would be accessible to many, many people. Not just the top 1 or 3% of the population, but perhaps the top 20% would be the target and another 20% would be aspirational consumers who would reach up, save to covet a product that would be durable, lasting, that they could develop a real relationship with. From my values perspective, recognizing America didn't have a history of luxury brands. From America, I saw the middle lane as an opportunity not just for Coach, but of course for other brands and other companies.
- [22:52]
David
You know, I've heard you say that brands are like people, you know, when you think about Coach, you know, people go through their, their life cycles and their, their growth. But what was the most immature thing about Coach that you had to help.
- [23:08]
Lou Frankfurt
It outgrow its own definition of itself was too self limiting. I spent a lot of time thinking about possibilities and thinking of. And that's where the magic and logic comes in. Bold imagination coupled with rigorous data analysis, consumer insights, logic, business metrics, and trying to blend the two to give consumers something that they would appreciate.
- [23:43]
David
You've also said that the time you should run the most scared is when you're the most successful. How'd you learn that lesson?
- [23:52]
Lou Frankfurt
I think it's innate to who I am. My drive for excellence and the fear of failure still exists through today. I still have failure dreams. As impossible as it might seem, at least now I don't wake up drenched in sweat like I did for 40 or 50 years before.
- [24:15]
David
When you would wake up drenched with that sweat, could you go back to sleep? What happened?
- [24:21]
Lou Frankfurt
I would generally have to change my t shirt because I did sleep with a T shirt. And very often I did not go back to sleep because I was already 4:30 or 5. And like you and most other CEOs, it's a 24, 7 job. So I already got my minimum sleep and I. And I went to work.
- [24:45]
David
And it's interesting, you've mentioned being relentless a few times in this conversation already. That's part of this relentless nature. When you, how did you, you know, how did you make sure that you hired people that had that same kind of relentless passion that you obviously had at the beginning?
- [25:02]
Lou Frankfurt
I started looking for. I began by having a screen that everyone had to meet. And that could be a part time sales associate or someone who was part of my senior leadership team. You needed a strong work ethic, belief in possibilities, you needed to be optimistic, you needed to be collaborative, you needed to be smart, and you needed to want to make a difference. So belief we built at Coach, which lasts through today, a culture of smart, dedicated, caring employees. And we provided an environment where we encourage people to become the best versions of themselves by providing classes, executive coaching, feedback in the moment, et cetera, et cetera.
- [25:59]
David
It's interesting, that belief that you got from your parents, you know, you really brought forward into what you look for in terms of how you wanted your people to believe in themselves and the possibilities for Coach.
- [26:13]
Lou Frankfurt
I tried, and I did try today, more than tried.
- [26:18]
David
You know, you mentioned a little bit earlier, and you, you write about this in your book, and I love your book, Bagman. You talk about magic plus logic, which is basically your leadership philosophy. Explain more about that. What do you mean by magic plus logic?
- [26:36]
Lou Frankfurt
It's the intersection of art and science or business and creativity. People use a lot of different terms. We coined that term in 1988. And I have a quick story to tell you that might illustrate that point very well. We recognized in the mid-1980s that Japanese tourists, both in the United States to the United States, as well as travelers internationally, really liked coach bags. And we also looked at the consumer in Japan and recognized that there was a societal shift occurring among young women. They were going after college. They weren't thinking about getting married right away. They were thinking of Korea. They were thinking of travel, they were thinking of being independent. In the case of Japan specifically, there were no local Japanese brands of any consequence. The market was $5 billion at the time and it was not growing. It was fully occupied by European luxury brands, which Japanese consumers coveted. Here we were going into Japan wanting to provide an alternative, getting back to magic and Logic. I prepared a presentation for the chairman of Mitra Koshi, who did not speak any English. And we had to translate the presentation of course into Japanese as well, even though they were translators. And I talked about a great product. And that coach was a product that was durable, functional, natural materials that developed a patina over time and that it was priced in a way that would be accessible to 60 to 80% of Japanese households, not the top 20. Because Japan even through today has a neck shaped economy. As you know, primarily middle class. Of course now there's a spike and there are many billionaires too, but it is a middle class country. So when we went into Mitsukoshi, one part was the product durable, well made and functional. The other which is the logic, the magic is the storytelling and the consumer following. And we had a cult like following that really grew. People were really loyal to their coach. We had very strong market share. So we coined the term magic and Logic. Blend of magic and logic. We never really got past the COVID of the presentation. The founder was so impressed with the term magic and logic and using them together, he called me Magic and Logic for the next 10 years. And we developed a very strong partnership with Mitsukoshi, which was the foundation of building a billion dollar business in Japan.
- [29:51]
David
You mentioned the fact that you need to blend the magic and logic. Is there ever a time where the magic overwhelmed the logic or the logic overwhelmed the magic? I mean, how did you keep that in sync? And can you talk about how you did that as a leader? Because you kind of had this formula now, magic plus logic. But I could see how one could outweigh the other every now and then. Did that ever happen?
- [30:18]
Lou Frankfurt
Frequently? Of course it happens when you don't keep track of of every aspect of the 360 degree experience of the company and product. When were you doing really well? Was not time for complacency. You're absolutely correct. And we were never complacent. However, there was a time when we were very dominant in the marketplace. Well after we went public, when we did not notice a major new competitor coming in, copying our playbook, opening beautiful shiny new stores right next to us. Our stores by this time felt a little dark and the alike and we didn't jump on that fast enough in terms of innovation.
- [31:15]
David
Who was that competitor?
- [31:18]
Lou Frankfurt
Michael Kors.
- [31:19]
David
Michael Kors. All right, that's a very good brand. It's right in that lane there. You mentioned copycats. I don't know if there's too many industries that have more copycats than you I mean, I've spent a lot of time in China. I mean, you would see copycat, everything. I mean, how did you deal with that?
- [31:40]
Lou Frankfurt
Well, when we talk about copies, there's imitations where they. What we call counterfeits. That's one type of copy where they actually use the Coach name and think they could get away with it. And the other copy is people who use our trademark dress to create bags that look strikingly similar to ours that could be confused in the marketplace place. So we invested heavily in ip. We also would relentless, again, the word relentless. In tracking down people who sold counterfeits or sold bags that were confusing in the marketplace. We did everything from lawsuits to work with local governments, law enforcement agencies to ensure that these bags would not be sold and where they were being sold. Of course, you're never perfect, but we made it really hard for these people so they would go after other brands.
- [32:52]
David
Now you're like, you're obviously someone who gets out in the marketplace, listens to customers, checks out competition. When you saw a really good competitive idea, you know, how did you bring that back to your company and what did you do with it? Did you ever blatantly copy an idea directly and just use the Coach name and just do your version of it? Or how did you think about competition and innovation and how you apply it?
- [33:25]
Lou Frankfurt
It's another excellent question. The first word is carefully. We think about interpretation carefully. And there were times when we thought that we were interpreting someone else's idea into something that was uniquely Coach. And we found by the marketplace, not purchasing it, that they didn't really see this as Coach. So over the years, what we decided we would do was be much more rigorous about using our brand codes fully. The type of detailing, stitching, materials, pockets, everything that made Coach Coach would have to be evident at first glance to a consumer when they picked up the product.
- [34:20]
David
You know, the other thing, Lou, which is amazing about your industry, is that, you know, fashion is, like, constantly changing. You know, you become hot, you become cold. You know, it's like there's so many ins and outs, and yet, you know, Coach is this enduring brand, you know, that you've been able to keep relevant. How do you stick to your core but then evolve enough to where you still stay on trend? Or do you just see yourself as timeless?
- [34:51]
Lou Frankfurt
We see ourselves as both timeless and on trend. So to step back, when you look at the marketplace, consumers have different things that motivate them. And in the case of clothing and accessories, there are people that are functional consumers. They just want A product that's going to do the job. And some consumers are classic, some consumers of fashion, some consumers, fashionistas. And understanding your addressable market, who you're targeting and how is very crucial so that you can develop the type of product, the type of distribution, marketing, storytelling, presentation, positioning. So Coach looks through today, of course, at consumers in every conceivable way, by demographics, psychographics. Gen Z is a different consumer than a baby boomer. And knowing where the baby boomers live and where on Gen Z shop, very helpful.
- [36:06]
David
You've had this enormous success. Know you keep topping yourself in your life, which is which I really admire. And at the same time, you mentioned that you used to wake up with, you know, these sweats where your T shirt would be ringing wet, you know, and were you type of guy that could ever celebrate success? I mean, you talk a lot about fear driving you, but could you ever, like, give yourself a pat on the back or how hard was it for you to give other people a pat on the back?
- [36:37]
Lou Frankfurt
Great, great, great question. Early on, as coach became a substantial business and I filled out a leadership team, I brought in a chief people officer who reminded me that when we reached a milestone, we needed to stop applaud ourselves, applaud others, and mark these as occasions as true milestones. And while it wasn't natural to me to begin with, it became part of our culture. And I will say today, I'm much more about moments than I was 50 years ago or 20 years ago or even 10.
- [37:29]
David
Yeah, well, we all grow. I mean, we're all constantly evolving and, and hopefully trying to get better. And you've said that you could be brutally honest and sometimes you actually would create fear just with your directness. Can you share a story of where maybe you took it a little bit too far and how you recovered after realizing it?
- [37:52]
Lou Frankfurt
I have very high standards for myself and very high standards for the people that I work with, work with, and develop the leadership team with similarly high standards. And a big challenge always for me is meeting with an executive who was not adequately prepared and who was trying to wing it, as opposed to saying to me, lou, I'm not ready for this. Earlier in my career, I would notice my blood pressure might go up and I might say, you're just not prepared. Let's end the meeting. Or I could even say worse. And now I'm much more aware of when my body talks to me. And if I'm feeling my heart starting to race or feeling impatient, I ask myself, why? And what do I want to do about it and what's the best way for the greater good for me to handle it. So I learned over the decades that you need to apply different leadership styles to different situations.
- [39:10]
David
Of course, that's a tough lesson for us all to learn, but it's so true. And, you know, everybody talks about culture, the importance of culture, the importance of the work environment, the behaviors that you drive. You know, when you think about coach, what was the single biggest behavior that you felt you had to make sure everybody in the company knew that you had to execute, and it became such a big part of your culture.
- [39:40]
Lou Frankfurt
When I joined coach, during that very first six years, I worked in a paternalistic culture. The founder was the boss. He was everything, and he treated people extremely kindly from a paternalistic perspective. When we became part of Sara Lee, I knew I was in a performance environment and everything would be based upon metrics and achievements. When I made that transition, I coined the term performance family to describe the type of culture that we wanted to create. Family meant we wanted people with shared good values, that we had a greater purpose than just a paycheck. We wanted to build something. We had belief, strong work ethic, and anyone who tried and was successful, boundless opportunities, someone who tried but wasn't successful, we needed to exit them in the way that we would like to be exited if it did not work. So over time, people understood that we had a collaborative environment. We were looking to help people perform at the very best levels, coaching them, training them. But if they did not perform, we needed to separate them and separate them in a way that we would like to be separated. If that was the case. Over time, we became a performance culture.
- [41:28]
David
The interesting thing that's going on, obviously, in the world today, Lou, is AI and, you know, artificial intelligence. And, you know, you're in such a creative environment, you know, you know, I think about your industry. How much do you see AI impacting your industry, or do you.
- [41:47]
Lou Frankfurt
It's going to permeate everything we do to the extent it doesn't even do so today. So when I think of some of the logic that we use for to, from a data collection perspective, consumer insights perspective, I believe that AI will really be able to accelerate our learning, simplify it, but at the same time, hopefully not homogenize us.
- [42:22]
David
And how do you, as a leader, how have you gotten yourself up to speed? You're curious, obviously, you've got this investigative mindset. How have you gotten yourself up to speed on AI and what it can mean?
- [42:34]
Lou Frankfurt
I will say insufficiently so far and I'm just blown away by what AI is doing today and will do tomorrow. I think it's unknown as to how much it will affect us beyond just the workplace.
- [42:55]
David
And how do you think about as a leader getting more up to speed? What do you see doing first?
- [43:05]
Lou Frankfurt
At this stage of my career I look to find people who are almost AI natives, people who are in their 20s and 30s who are actively in the learning curve and deploy them within the companies where we work, either as employees or freelance or agencies.
- [43:31]
David
That makes a lot of sense. And I love how you keep evolving as a leader. Do you have a process that you use yourself that ensures the self reflection you have to have to take your game to the next level?
- [43:47]
Lou Frankfurt
It's less a process than a habit or routine. Every day, virtually every day, I think about what I could have done differently and better. I live in a multi generational household where we're very active and I work with many private equity companies and I push people to help me understand how I could be more effective with them. And I'm always looking to learn.
- [44:21]
David
What's the, what's the biggest thing you're working on right now, Luke?
- [44:24]
Lou Frankfurt
I'm going to say my memoir actually. That's good.
- [44:29]
David
And you've got a lot to share. You know, this has been so much fun and I want to have some more with my lightning round of questions. So are you ready for this?
- [44:37]
Lou Frankfurt
Sure.
- [44:37]
David
The three words the best describe relentless.
- [44:42]
Lou Frankfurt
Curious marches to his own beat.
- [44:45]
David
If you could be one person for a day besides yourself, who would it be?
- [44:49]
Lou Frankfurt
Franklin Delano Roosevelt.
- [44:50]
David
Your biggest pet peeve?
- [44:53]
Lou Frankfurt
The lack of value driven leadership. And many of the people who are in very senior positions, both in companies and in government.
- [45:03]
David
Who would play you in a movie?
- [45:05]
Lou Frankfurt
Maybe you could play me in a movie.
- [45:07]
David
I'm not good looking enough. What's the most unlikely place you've ever spotted a coach bag?
- [45:13]
Lou Frankfurt
When I was in China visiting the Great Wall very early in our days, before coach really had any major business seeing a coach bag carried by a Chinese tourist visiting the Great Wall. And I of course approached her at the time and said, where did you get the bag? And I did have someone who spoke Mandarin with me.
- [45:36]
David
That's awesome. Something you'd only know about the Bronx if you were from the Bronx.
- [45:41]
Lou Frankfurt
The Bronx is a microcosm of the world and the diversity, the richness, how you can have a happy childhood without that much.
- [45:54]
David
What's the one thing you do just for you?
- [45:56]
Lou Frankfurt
I play speed chess.
- [45:58]
David
Besides your family, what's your most Prized possession.
- [46:01]
Lou Frankfurt
I actually don't have a most prized possession besides my family.
- [46:06]
David
The best leadership lesson you've learned from being a grandfather of eight grandchildren.
- [46:12]
Lou Frankfurt
Every child has to find his or her own path, and they develop in different ways at different rates.
- [46:20]
David
If I turned on the radio in your car, what would I hear?
- [46:23]
Lou Frankfurt
Probably news.
- [46:26]
David
What's something about you? Few people would know many of the.
- [46:29]
Lou Frankfurt
Things I discuss about me in Bagman, my book.
- [46:35]
David
What's one of your daily rituals?
- [46:37]
Lou Frankfurt
Something that you never miss achieving at least 8,000 steps.
- [46:42]
David
All right, that's great. All right, Lou, we're out of the lightning round, I guess. Got a few more questions here and we'll wrap this thing up. You and your wife, Bobby, you have three kids. What's something about leadership that you've taken from the office to how you lead at home?
- [46:57]
Lou Frankfurt
There's a variety of things. One example is understanding the whole idea of parking lots and compartmentalization. So one of the things, everyone has great ideas and everyone wants to implement these ideas now. And I developed the concept of a parking lot where you can park ideas. A short term parking lot, medium term or long term. With each parking. Whenever you put your car in the parking lot, you memorialize the date you're going to pick it up. This allows you the ability. Allows me the ability to forget about it for the most part, knowing I'm going to pick it up once it's memorialized. So I apply the parking lot theory at home, too. When someone comes up with a great idea, I might say it's a great idea, or why don't we get back to it some other time. A second idea is skirmishes, battles and wars. I'm very keenly aware, both at work and at home, that a skirmish can turn into an unexpected war like that with children, grandchildren, with employees and colleagues, and external relationships. When there's a conflict, you really need to be very conscious of how you want to resolve the conflict so that there isn't unintended consequences. With grandkids growing up, I encourage my kids to understand the movement towards independence is innate and it's going to happen no different than when I compare a brand to a person and you need to give kids room. So if they want to stay up an extra half an hour or they want to do something different, you have to decide whether this is the time to confront it or to let it go because you want to build up collateral to avoid bigger problems.
- [49:03]
David
There's some real wisdom there. When you think about your wife, Bobbi, what would be the Biggest leadership lesson she's taught you.
- [49:10]
Lou Frankfurt
Consistency. She's always been there as CEO of my family and CEO of her own business for 20 years. Plus doing many other things with purpose.
- [49:22]
David
All right, next question here. What do you see now as your unfinished business? You've done so much. What's next?
- [49:29]
Lou Frankfurt
Have more moments and enjoy my life. It's all about relationships and purpose. So a combination of doing good, as I define it, trying to help brands grow, businesses grow, build leadership teams, and they like and also enjoy living. I mean, it's all about the journey. It's not the destination. We all have the same destination.
- [49:58]
David
That's true.
- [50:00]
Lou Frankfurt
So as my son has been urging me for 20 plus years, it's all about moments. So more special times. Travel, trying different things, exploration.
- [50:15]
David
Last question. What's one piece of advice you'd give to anyone who wants to be a better leader?
- [50:20]
Lou Frankfurt
Be. Be vulnerable. Be open. Put your ego at bay. Really work hard to hold two antithetical views in your mind. Understand the world is not black and white. There's all shades of gray. And understand when you need to be decisive or when you need to step back. And the other thing I would say from a mental health perspective, listen to your body. If you're feeling down or you have backache or neck ache, you need to understand that your psychological mental stress manifests physically. And you need to have balance in your life, particularly when your body is telling you you're not getting it.
- [51:10]
David
Well, Lou, I have to tell you, this has been such a treat for me to have the opportunity to talk to you. You, you're an icon in the world of retail, the world of consumer goods, and it's easy to understand why. And I want to thank you for imparting the wisdom that you've provided today. It's been terrific.
- [51:31]
Lou Frankfurt
It's fun talking with a fellow traveler.
- [51:37]
David
You're right about.
- [51:45]
Kula
David. Lou Frankfurt is iconic. How did you get him on the show? I love that guy, the bag man.
- [51:54]
David
I get a lot of great people on this show. I'm glad you like him so much. But I. And I know he's got a great reputation. He's iconic. But, man, I. I gotta hear what really blew you away.
- [52:06]
Kula
I think it's partly his accent from being from the Bronx. Secondly, like the. The brand coach takes me back to when I was like 12 years old and I was allowed to finally get a purse.
- [52:19]
David
Oh, well, you could finally afford one because they had accessible luxury.
- [52:24]
Kula
Accessible luxury. That's right. And so I loved this brand, 12, when I was 12 years old. And they've had, honestly, quite the comeback recently. I mean, I feel like I see coach all over TikTok and Instagram. Uh, they just did a collab with the cast from the Summer I Turned Pretty, which, David, if you don't know what that is, your granddaughter certainly will. It's a big deal. The Coach had a collab with Belly from the Summer I Turned Pretty, and it's just all over the place. And. And Lou is the guy that we all get to thank for this.
- [52:54]
David
Yeah, well, you know, I. I might take issue with the word comeback, because I think, you know, they've been on a major role ever since he took over the brand. I mean, and he's grown into this huge, huge global business, and he's found the sweet spot in marketing. You know, he's found that point where when you buy a Coach bag, it says something very positive about you, and you can buy that bag at an affordable price. So, you know, when you can give people the sense that they're making an upgraded statement about what they're all about at an affordable price, that's. That's the. That's. That's magic.
- [53:33]
Kula
I mean, I think he took. When he took over as CEO, I think they were doing like, $6 million a year in revenue, and now they're at like 5 billion. So this is not just like a boom here or there. I mean, this is significant growth that he's been able to lead over the past 20 years. And I'm curious, David, like, when you hear that stat and after you interview a guy like Lou, like, what's. What strikes you about what he's been able to do at Coach and his leadership style?
- [54:01]
David
Well, first of all, I think he defined what the Coach brand is, you know, and in fashion, that's really, really important. You know, it's important for every brand. But in fashion, you really got to stand for something, and because once you stand for it, it's really hard to stand for something else. So you better pick something that people really want and they're going to want for a long time. And so what he did is he stayed true to the Coach brand throughout those 20 years, but he made it culturally relevant throughout, just like he's just doing with the collaboration with the movie you just talked about. That's how you keep an iconic brand culturally relevant, and that's what I think he's done over time.
- [54:50]
Kula
Yeah, it's so good. When he talked about first starting at Coach, he mentioned how important to him having an investigative skill set Is. And you ask him, you know, what. What is this investigative skill set? I've never heard another leader talk about it like that. And basically, he says he went undercover as a reporter asking all of these department stores and retail stores what they thought about Coach. And I just love that he kind of carried that same curiosity into everything he did at Coach. And, David, I'm curious, like, when you hear someone say, oh, I have great investigative skills, what do you like, what do you say to that?
- [55:30]
David
I love that phrase. It's a great way to really characterize what I think the best leaders in the world do. You know, they're very curious. And when they go in to talk to customers and their people, they're looking for the truth. So they ask questions. They ask questions that bring out the truth, that help them define the reality that the company really needs to face. It helps them really define the opportunities that are out there. And I think when you have an investigative mind, a curious mind, I gotta tell you, you're on your way to success because you want to find the truth, not nothing but the truth. And I love that. And, you know, by the way, I just went to Ken Langone's 90th birthday party. Ken Langone is the co founder of Home Depot. We did a fantastic podcast together a couple of times. The guy is great. You want to talk about an investigative curious mind, I mean, he's got this in spade. And, you know, that's what I always find in all the great leaders.
- [56:45]
Kula
What I thought was also really interesting about what Lou credits some of his own success to is he says he has a very intense fear of failure. So much so that, you know, he used to wake up, like, drenched in sweat and would wake up in the middle of the night and had to change his pajamas because he was so scared in his sleep that he would just sweat through his clothes. And, you know, we talk a lot about failure and how failure is information and you learn. Learn from it and all these things, but I've never really heard a leader talk about having a fear of failure in a way that was. That led to such success. So I'm curious, David, when you assess Lou and you hear him talk about how this fear of failure is what leads him to success. What's your take on that?
- [57:31]
David
That's really interesting, Kula, because I've had the good fortune to attend a meeting, number of CEO dinners and roundtables, and one of the questions we often get is, what drives you? The fear of failure or the joyous success? And as you go around the table. If you had 10 people at the table, I don't know, it might be five to five. Many people are driven by the fear of failure. They just can't stand the thought of, of failing and going through whatever humiliation that might bring your way. And then others are driven by this joy of success that they just love winning and they love competing and succeeding. Now, I have never lost a lot of sleep because of fear of failure. Never have. What really drives me is the joy of winning. I, I just, I, I love competing, and that's that, that, to me, is what makes business fun, is just the, the competitive aspect of it. Now, I hate to lose. I hate to lose, and I hate to lose so much. I'm driven by the joy of winning. So I don't know what comes first. I really don't. And that's why I think maybe it's five to five when I think about it. I, I, I don't know. I mean, I'm sure the people that have the fear of failure, they want to win too. It's just what drives you. I'm motivated by winning, not by having other people think I failed.
- [59:08]
Kula
It's interesting because when you think about the type of mindset that being afraid of failing would put you in versus the mindset that the joy of winning would put you in, I imagine that those are somewhat different. And I guess, I mean, to your point, they might lead to the same result.
- [59:23]
David
Oh, I think they do lead to the same result. And they're probably intertwined to a certain extent. You know, you can't really separate them. But I'm glad that I did not have Lou's problem. I'm glad I did not have a wet bed. Okay. Because from my sweat. Okay. I'm glad. And if I was with him right.
- [59:44]
Kula
Now, we'd be laughing about that on a podcast.
- [59:47]
David
And I guarantee he is one competitive guy, and he loves winning, too. So, you know, we would have a lot of fun laughing about that.
- [59:55]
Kula
Lou Frankfurt. What an icon. This is such a great episode, David. And not just because Lou's Bronx accent is incredible. You pull out incredible stories from him and Lou. I mean, he worked in local government in New York for a number of years. He helped a preschool get off the ground. I mean, this guy is just fascinating. And they took all that to a handbag company and blew it out of the water. So I just, I love this story. I love this episode.
- [60:22]
David
He's proof positive of what a curious mind can do. He had curiosity and then took that curiosity, took the learning that he had and put it into action. And he is the definition of what I would call an active learner.
- [60:38]
Kula
Well, as we end this episode, I really encourage you, if you're listening or watching this on YouTube, to think about one thing from Lou's episode that you really want to take with you into the next week. Whether it is into your personal life or into your leadership or into your work, there's so many great perspectives and points of view that Lou offers in this episode. So I really just challenge you to choose one and see what it does for you.
- [61:00]
David
So here's one thing I think everybody that's listening should do. Be curious this week. What can you learn more about? Where can you go do your own investigative skills? And let's see what you come up with and let's see how you can put it to use and make make it active in your business.
- [61:16]
Kula
Well, that does it for our episode of How Leaders Lead. Tune in next week and we'll see you soon.