METZINGEN, Germany — Hugo Boss, the world-famous German fashion company which reported an annual revenue of €2.7 billion in 2017, is recalibrating its business model and evolving its brands — Boss and Hugo — to reflect shifting consumer preferences and better tap digital opportunities. At the heart of this strategy is the leadership’s belief in the importance of innovation — and the company’s commitment to encouraging it across every field in the business through agile execution.
In addition to hiring new talent to drive its expanding digital platforms and its evolution from a primarily wholesale business into an organisation with significant B2C operational capabilities, the company has invested heavily into its headquarters to incite collaboration and innovation. A flexible working environment with individual spaces has been created in a sports-oriented campus, which boasts a gym, a soccer field and a beach volleyball field.
With an engaged workforce of over 14,000 employees who are passionate about fashion, regardless of department and function, the company is laser-focused on its core business of upper premium apparel, with the intention of “owning that part of the industry,” says chief executive Mark Langer.
Now, BoF sits down with Langer to hear how he has transformed Hugo Boss into a canvas for his employees entrepreneurial and altruistic ambitions, and why he believes that those instincts will drive the business forward.
How would you describe the DNA of Hugo Boss?
The world around us is evolving at a rapid speed. This obviously has implications on what makes up the DNA of the company today. But at its crux, every day at Hugo Boss I see something that makes me confident we have what it takes to be successful in the new world. There is a deep-rooted love for fashion at Hugo Boss, and we have an incredibly diverse workforce, who are passionate about what we do.
When we hire young professionals, if you’re working in merchandising, buying, retail, product design, or even in HR or IT, you need to have a strong identification with the product and a love of fashion. But we also look for an interest in making a difference, changing things — challenging the status quo. We really value people who bring an entrepreneurial spirit to their roles. This is not just a job but basically a canvas for you to create your own Hugo Boss in whatever function you are. And to a degree, if you prove yourself to be capable and willing, we would like to give you as much entrepreneurial freedom as we can.
How is Hugo Boss transforming itself to become agile at scale?
We want to make agility an integral part of everything we do as a business and a team. It’s not an additional layer on top of our existing strategies and initiatives — it needs to be fully integrated because that’s how you change attitudes and behaviour in the organisation.
One example where we’re very excited about the new opportunities is what we are doing in terms of sustainability with new product developments. This is where new materials and technology — new ideas in general — are evolving very quickly. It’s one of our key priorities, to make this company more sustainable, and the corporation is already being recognised for the progress being made.
For the second year, we are in the Dow Jones Sustainability Index, and when I talk to our employees, they tell me, “We need to do much more when it comes to our product. That’s where we can make the difference.” We have been very successful with sneakers that are made from a fully sustainable material called Piñatex, consisting of pineapple leaves. Agile thinking and encouraging autonomy were the driving forces behind this initial success.
This is not just a job but basically a canvas for you to create your own Hugo Boss in whatever function.
We are now taking this thinking further. Currently only few substitutes are available for synthetic fibres that meet our demands for quality and functionality. Since our Fall/Winter 2016 collection, all padding used in Hugo Boss apparel and accessories consists of at least 60 percent recycled materials, such as PET bottles. Selected styles also use high-quality recycled fibres to reduce the consumption of non-renewable resources.
How much freedom do employees have to explore new ideas and opportunities?
We really stand behind giving individuals and teams the budgets and autonomy to drive change with agility and efficiency. We were able to roll out our global digital concept for the collection of samples for our brand Hugo in less than 12 months. We are now in the fourth generation of a completely digitally developed Hugo collection — it’s not a capsule collection anymore. The first physical product that we create is the product that we actually sell in our stores. I just visited one of our sales subsidiaries in Europe, and we received extremely positive feedback from not only all of our own sales teams now but also from the buying teams of our wholesale partners.
What about initiatives that are not successful?
To create an autonomous and innovative organisation, I believe we have to become comfortable with failure. One year ago, we had a similarly autonomous approach to set up a new Boss app for transactional services. There were some hiccups to it and people naturally watch you carefully to see how you deal with failure. It’s very high on my agenda — to create an environment that is inviting to take more risks, to challenge the status quo, and to learn quickly, but also to discontinue these parts which are a dead-end route. My role, and other management roles, need to identify winning ideas early, support them, but also be rigorous on the approaches which have proven to be less successful.
How does Hugo Boss develop its employees?
A couple of years back, we created a way to progress your career, not just in the traditional way in which you become a manager in a leadership position, but by creating specialist roles. So if you are a data scientist at Hugo Boss or you are extremely good in certain fabric development and you’d rather work on topics, instead of being driven by leading large teams, you can also progress in terms of compensation and benefits. It goes up to two levels below the board level. It’s proven extremely successful and it has been highly appreciated.
I expect, especially from our younger talents and young professionals, that they challenge us. They need to bring with them new ideas on how we succeed in a rapidly changing world. We are looking for people who are willing to shape our industry from the inside. If you want to run your own label, then you will probably leave Hugo Boss eventually. But if you are looking for something with great resources and want to tap into an infrastructure, we have one that is second to none in our industry. We believe we can change the world from within and I would like to give people the opportunity to do so. I didn’t join this company as the chief executive and I’ve had different roles, and what I’m trying to do now with my increased influence and responsibility is to take whatever I’ve learnt and what’s best, to give it back to the next generation.