Pauline Brown

Supported by Greenhaven Road Capital, finding value off the beaten path.

Pauline Brown was on the Hidden Forces podcast to talk about her work at LVMH and her book, Aesthetic Intelligence. Brown’s framework requires two guidelines.

First, everything is a want. Short of tragedy, modernity has only wants. People need minimum shelter, food, and safety but we’ve blown past minimum, adequate, and ‘enough’.  In the context of needs and wants we’re in the ‘gorge’ range. Brown said, “There’s no reason to buy any of them (luxury goods) for utility.”

Second, everything matters. The utility of something like food is the calories and nutrients but we go beyond that because of the other dimensions of something matter. A birthday dinner at Waffle House is different than a surf ‘n turf downtown, though both are just a meal.

Taken together, these ideas form the guardrails for aesthetic intelligence. As we noted during AI Week, there is no silver bullet solution to problems. Big data isn’t a magic wand, it’s a hammer. Aesthetic intelligence is a flashlight. It’s a latticework of tools that makes situations solvable. Let’s look at some examples from the podcast.

Air travel has gone from good to bad to bearable. Using ideas that Rory Sutherland evangelizes, we need to keep in mind what metrics matter. During the phase from good to bad, airlines looked at the economic number. Flights got fuller, seats got smaller, perks disappeared. In the bad to bearable transition, organizations realized that the easy to measure things aren’t the only things that matter.

For example, being able to work while traveling is quite nice. Sitting while traveling is nice. So too is when companies remove the ambiguity around waiting.

Screen Shot 2019-11-05 at 10.34.20 AM

Working, sitting, and understanding are difficult to measure. It’s only by being there that organizations find this thick data.

Not talking to customers, said Brown, is a problem that’s “ubiquitous and a real disadvantage. The reason entrepreneurs are gaining so much share is that they are connected to the marketplace.” Brown doesn’t have this problem. “I love going to stores, not even to shop. For me, it’s like an anthropological experience. I get more joy than kids do at zoos.”

Brown said that the top bosses at the best brands all spend oodles of time in their aisles. This was something Carl Turner Jr. did too, noting, “As CEO I’m told all kinds of things about our stores but until I get out to hear from the frontline employees and from the customers, I don’t get the real truth.”

The problem as Brown, Turner, and Wang note, is that while spreadsheets, models, and data can help, they’re not perfect. They’re maps, not the territory. When Kenneth Jeffery Marshall talked with Jake Taylor, he said that he doesn’t have a Bloomberg terminal because he wants even better data:

“I love to read, I love to think, and I love to talk to people who are in the thick of an industry. Not equity analysts that cover the industry, but the people that drive the trucks, repair the units, make the products – those kinds of people.”

Once executives get out and see what’s happening they’ll see how to fix retail. “It’s not that traditional retail stores are dying,” Brown explained, “but that they’re formulaic and forgettable. They’ve lost their way.”

We believe that retail needs to shift hard to either a buying focus or shopping focus. The buying stores will optimize for convenience. Grocery stores offer this with pre-packaging ready-to-bake meals, milk near the front, and ’10 items or less’ queues.

The flip side to that is to offers shopping. This is Brown’s wheelhouse. Customers are looking to look at makeup. Customers want to feel the cream, the lotion, the product.

Businesses must figure out all the jobs their customers hire for. Champagne is booze but with panache. Brown has an eye doctor friend who told her that one of his busiest days is after New Year’s Eve. The logical solution to this is to better barricade the bubbly. But that wouldn’t work at all. The corking, Brown said, “is part of the aesthetic experience of having champagne, it’s part of the ritual.”

Screw-top beverages might store just as well but it’s not part of what people want.

The entire episode is good but the part at the end, about Disney, is top-shelf. Thanks for reading.

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