June 01, 2013
Leadership Award: Worldwide Leadership from the Heart
by Barbara Seale
Alessandro Carlucci, (left) CEO of Natura and Chairman of WFDSA, accepts the Bravo Leadership Award from DSN Publisher and Editor in Chief John Fleming at the DSN Global 100 Celebration held in April.
IN THIS ISSUE:
True worldwide influence is rare for a direct selling executive. Even the CEOs of multinational companies can usually shape only their own organizations. Not so with Alessandro Carlucci. He leads the world’s fifth-largest direct selling company, Natura. And as Chairman of the World Federation of Direct Selling Associations (WFDSA), he also sways public opinion and the actions of industry companies around the globe.
For those exceptional achievements, Carlucci accepted the Direct Selling News Bravo Leadership Award. The prestigious prize is presented to an individual who personifies leadership, who guides and directs, and who leads those around him toward greater good, progress and achievement, all while earning the respect and admiration of those he leads.
Carlucci could have been considered for the award based on his impact on Natura alone. The cosmetics, fragrances and personal-care company has long been one of the industry’s stars, admired for its consistent growth and strong management, but also for its dedication to social progress and environmental sustainability. Headquartered in Greater São Paulo, Brazil, and with operations in Argentina, Mexico, Chile, Peru, Colombia and France, the $3.2 billion company has a 1.5 million member salesforce. In 2011 Forbes magazine named it one of the 10 most innovative companies in the world.
The Bravo Leadership Award is presented to an individual who personifies leadership, who guides and directs, and who leads those around him toward greater good, progress and achievement.
Carlucci’s WFDSA leadership elevates his considerable accomplishments to the next level. The organization’s key long-range objectives include promoting ethics and bolstering the industry’s image—both Natura strengths. Carlucci believes that the industry is succeeding in both areas. He says that building a strong industry reputation is the WFDSA’s most important project.
“Around the world, the direct selling industry’s image is totally correlated with results,” he notes. “When you have good results, you have a good image. Even when the industry is under attack, it’s because of a financial issue. It isn’t customers complaining. The reputation of our industry with customers is a good one. But the financial community doesn’t know us well.”
Do the Right Thing
| 2013 Bravo Leadership Award:
Alessandro Carlucci, Natura
Carlucci points out that 90 million people around the world are connected with direct selling, either as customers or entrepreneurs. When they have good experiences, he says, they tell their friends, and that builds reputation.
“To me the most powerful way to build the industry’s reputation is with public relations,” Carlucci says. “The press doesn’t usually know us very well, but they’re interested to learn more. Each company has a good opportunity to have a PR program. It typically doesn’t cost much, and it brings a lot of good results.”
Achieving a good reputation is like an ongoing journey. At no point will the industry reach a destination, Carlucci observes. Instead, opportunities always exist to enhance and improve the image of the industry and the individual companies within it.
“All the companies need to do things right, behave right, be very transparent and open with their salespeople and customers,” he says. “That’s the beginning of the story. Do that and people will say nice things about the company and its products. It’s the best advertising ever.”
Carlucci also believes that direct selling can play a role in boosting the global economy, especially as people live longer and companies shrink. As always, he views the opportunity from both economic and social perspectives.
Part of the Solution
As life expectancies increase, people need to earn money for longer periods, he says. At the same time, recent college graduates are having difficulties finding traditional jobs. Direct selling offers opportunities for careers and earning prospects to millions of people around the world. Those people encompass every age range and, from a larger perspective, entire economies that are either thriving or in crisis.
In addition, the training that direct sellers offer elevates the industry’s reputation, as it creates more competent, successful distributors.
Especially in countries such as Brazil, Carlucci points out that becoming a direct selling distributor offers educational opportunities that citizens may not have in their day-to-day lives. To sell their company’s high-quality products and services and to present the opportunity in a transparent way, they must learn new skills. The process even creates higher self-esteem, as it improves economic results—for society as well as for individuals.
“We have two sides of the same equation,” Carlucci says. “The opportunities in our industry are part of the solution for the society. With new technology available and most direct selling companies using these technologies to engage the millennials, we have a huge way to modernize our industry and be totally connected with the needs and behavior of new generations and new customers that are emerging.”
He notes that millennials are both an opportunity and a challenge for the industry. Carlucci says that direct sellers must speak the language of this new generation—a demographic that expects to have full access to information and maintains relationships through social networks, the Internet, mobile phones and tablets. Every industry already leans more heavily on technology to transform their sales and customer-acquisition processes. Direct selling, which Carlucci calls the original social network, has to do the same.
“We have two sides of the same equation. The opportunities in our industry are part of the solution for the society.”
—Alessandro Carlucci, CEO of Natura and Chairman of WFDSA
“Today we know that customers rely more on product recommendations from friends or the number of stars a product or service has on the Internet than on advertising on TV,” he notes. “One of the main principles of our industry is recommendation. There is nothing more contemporary than what direct selling does. If we can leverage this recommendation—the trust between direct seller and customer—then we are in a very good position compared with other channels. Retail or Internet sellers don’t have the opportunity to do that.”
Walk the Talk
All of Carlucci’s comments are more than philosophies. They’re also action items at Natura, the company he has embraced since he finished business school in 1989. He became its CEO in 2005—the company’s first top executive from outside its three controlling stockholders. At that time, the company’s founder, Luiz Seabra, along with Guilherme Peirao Leal and Pedro Luiz Passos, moved out of day-to-day operations but remained co-chairmen of the board of directors. After running the company for 30 years, and just a year after the company went public, they signaled their trust in Carlucci by passing the torch to him—a man whose name has become virtually synonymous with Natura. When he accepted the Bravo Leadership Award in April during a special ceremony, a unique mini-movie introduced him and his company. When he spoke recently with Direct Selling News, his descriptions of the video and of Natura were clearly heartfelt.
|Carlucci (center) and other team members are presented with an award in honor of Natura’s ranking at No. 5 on the DSN Global 100.
“It’s about the pleasure, honor and responsibility of taking care of ourselves, of others and of the planet,” Carlucci says. “The belief that all of us have a unique and irreplaceable role in this world drives Natura and its value proposition to find innovative ways of doing business. We want to be a profitable enterprise that generates positive impact in people’s lives and in the environment. And we want to do that with joy, always seeking beauty and sharing the dream of a better world. What can be more universal than those themes?”
Those themes are captured in Natura’s motto: well-being/being well. The company describes well-being as the harmonious and pleasant relationship of a person with one’s body. Being well is the empathetic, successful and gratifying relationship of a person with others, with nature and with the whole.
Those beliefs are thoroughly integrated into Natura’s business practices. For example, six years ago Natura committed to reduce CO2 (carbon dioxide) emissions by 33 percent by 2013. It has made consistent progress, and last year the company was able to decrease its emissions by 4 percent over 2011 levels. Since 2006, it has reduced CO2 levels by 28.4 percent. By the end of 2013 it will have reached its goal of a 33 percent reduction by investing in reforestation, energy efficiency and fossil-fuel-substitution programs. It fights for efficiency in its distribution network, and it also selects its suppliers based on social and environmental criteria, as well as technical and economic criteria. In 2012, Natura reached a reduction of 7.4 percent of absolute greenhouse gases, compared to the amount in 2008. Carlucci emphasizes that its environmental results are as important as economic results to Natura.
“We want to be a profitable enterprise that generates positive impact in people’s lives and in the environment. And we want to do that with joy, always seeking beauty and sharing the dream of a better world.”
High Tech, High Touch
That distribution network is not only environmentally efficient, but it also delivers continuously improving service to Natura’s consultants. Carlucci says that the logistic footprint is designed to deliver any order in Brazil—the company’s largest market—within 48 hours, 93 percent of the time. And in keeping with the company’s emphasis on transparency, he acknowledges that, as good as it is, the system isn’t quite meeting its goals yet because costs are still a little too high. But the system has reduced out-of-stock products while it provides better information to the company’s consultants. That translates to better service to customers.
The salesforce and its customers are major focuses at Natura, and the company is investing in a project it calls the Natura Network to better understand its customers. Natura has launched a pilot project in the city of Campinas near São Paulo. In the city of almost 2 million people, Natura is using analytics to better understand the buying behavior of customers. The goal: to promote a significant evolution in the purchase experience of consumers, while increasing the capacity for consultants to generate business.
“Using analytics, we can give our consultants very good information about customers, which lets them offer very good service to customers,” Carlucci explains. “They will be able to offer customers what they really need and want without bothering them with offers they don’t want. We will be able to understand individual preferences and help our distributors offer the right thing to the right customer.”
Since in Carlucci’s view Natura is already a social network, analytics help the company and its consultants leverage those relationships, creating a winning scenario for everyone. Information gained in the Campinas pilot project will enable Natura to refine tools it can roll out soon to the rest of its salesforce. Carlucci notes that the consultants are partners in the project.
Other big plans include greater international expansion. Most of Natura’s business is in Latin America, especially Brazil. But with its universal principles, high-quality product line and appealing opportunity, Carlucci believes Natura would be well received in other parts of the world, including in the United States—the world’s largest market for direct selling and for cosmetics. But Natura executives believe that understanding culture in new markets is key, so they take a methodical approach and consider a variety of options for expansion.
“When you learn about different cultures, you don’t learn it from a book. You need to live it to understand it,” Carlucci says. “The best way to export good initiatives from one country to another is to do business in that place and really try to understand the local culture. Otherwise, you will have stereotypes that don’t explain how people behave and why people buy.”
He believes the key is hiring experienced people who already live in the new markets. For example, he points out that the companies that are being successful in China are doing well because they understand the way of life there. He compares Chinese culture to Latin American culture.
“China is a big country. What’s happening in one part of the country is different than in another,” he explains. “In Natura, Argentina and Chile are geographically close, but very different in values. It’s important for companies to have local people. Distributors can accelerate the international growth process, but it’s very important to be connected locally.”
With all that in mind, Natura hopes to accelerate the expansion process. It has been looking for new opportunities or even partnerships with other companies outside Latin America.
“We believe our brand and value proposition would be well accepted in the United States, but only by knowing the culture can we do good business,” he says. “We want to expand with some kind of partnership with someone who already knows how to do business there. If we try to do it alone, it will take a long time.”
Natura’s use of technology, its cultural and environmental sensitivity, as well as its creative expansion methods predict continued growth for the company. Carlucci reflects proudly on the opportunities his company has already created and looks forward to the future.
“We have a sales network of 1.5 million people in Latin America,” he observes. “We’ve been growing a lot, especially in new markets in Latin America. That’s an important sign that our value proposition is accepted. I believe we can still grow more, but this is a landmark for us. Direct selling is an amazing way to offer an opportunity for people to sell products and services.”