How Angela Ahrendts Went From Burberry CEO to Apple Retail Queen
Pattie Sellers sits down with Apple Retail SVP Angela Ahrendts at Fortune's Most Powerful Women conference in Laguna Niguel, CA.
one of the things that I particularly love about having Angela Aaron as tonight star interviewing is that, um, Angela comes from a town called New Palestinian Indiana, which is, verily over 2000 people still to this day. And she is now a senior vice president of retail for the most valuable company in the world. Apple. And there is a way to get from there to here. Welcome, Angela. Yeah, So this is also very special because this is Onley Angela's since Tim Cook came calling in 2014 when Angela was the CEO of Burberry. This is all this is ingeles, seconds on stage interview since she took the job at Apple. And it's the first time she's going to be talking publicly about the new Apple store design. And we're going to even be talking about that concept of Apple stores, which you're completely rethinking. But let's start. I want to start in new Palestinian Deanna and you know, we have these fantastic three dozen of you high school girls with us, and I'd like to know, first of all, Angela, what did you want to do when you were 16 years old? A long time ago. But, uh, you know, it's funny. I grew up in a really in a large family. So I'm one of six kids and I have for Sister and there's six of us in seven years, so we're really, really close. And my dad used to joke they didn't have a TV, but and like you said, we're from this very small rural town, So sports were a huge part of our life. Team sports were a huge part of our life. Um, you know, in a very small neighborhood community was a big part of our life. So, you know, it's funny back then, and I love the work. I always loved the work. I mean, I did every tour that was known to man, and I would log them all down so my mom would pay me the right amount of the end of the week and and I know it sounds odd, but between sports between and what Howard did you play in high school? Um, tennis, gymnastics, swimming, You name it when you have six kids, you kind of put him in everything. And so that keeps him really busy. And where's amount? So so those were Those were the three. And then I play tennis in college for a couple of years. And what was your first job when I play golf, too? Um, my first thought was actually waiting tables. And I know, I know you worked at the music land in the months of all I did, You did. And now you're didn't now your head of apple retail, which is, like, kind of amazing selling LPs to, um So, Angela, you went from New Palestinian Indiana to ball State University. You got to not filling in every dot in your career. But you became the head of Donna Karan International. And then you went toe Liz Claiborne, and you were one of the top people there. And then in 2006 lessons that you went to Burberry and he became CEO of Barbary. And for those of you who are not familiar with what Angela did, a Burberry. Um, Angela, how would you describe the transformation? And it was a transformation of a 200 plus year old company. Correct. Um, it was pretty stodgy. And what did you set about to do there and what did you do there in three minutes are left. Um, you know, we So I had met Christopher. We hired him as Christopher Bailey was the chief. Well, he was actually the designer at Burberry. When I started, we knew each other because we had Hi. Donna had actually hired him right out of school. He won one of the contest in New York, and so he had come to work and Donna. So we knew each other and and we actually set out too funny. Oddly enough, not just be tops and luxury. I remember sitting and having a three hour lunch before I ever decided to do it. Because packing up, you know, at that point in time, three kids and two dogs and moving from New York City, where we've been for 25 years to London was a huge, huge decision. And and, uh, But Christopher and I sat there at lunch for three hours, and, um and we decided it's the end of the lunch that, you know, I had never done if he had never done it, and maybe together we could actually create the kind of company that we both always dreamed of working for. So it was company first, and I said it was a business, a publicly traded business. And they happen to be in the business of fashion. And so and that was the lens we took and we were in the people business. So happened to be in the business of fashion, meaning that you wanted to create a a new kind of lifestyle brand. An incredible company ran over you hot where you know, the best talent. And so we know. And we decided the strategy for the company over lunch that day before ever started. We didn't. I just that strategy that that we absolutely wanted to retail led growth strategy 25% of their business was retail. At that point, we knew that that's what we had, that we knew we were gonna target Target a younger customer, because none of the none of the piers were the millennials, if you will. We knew everything we did had to be British because that was our differentiator compared to our big Italian and French counterparts. And we just literally there, you know, and went line by line. And and I think most importantly, I trusted him and he trusted me and I think it goes back to the family and values and and that's that's always and you're you're leaving out one thing here. You made Burberry a digital leader in the luxury states in the fashion space. Angela posed on the cover of Fortune when she was the CEO of Berber. A little ditty? No. Then when she posed with an iPad in her hand where she would end up Tim Cook ended up noticing that. But you gave ipads to all Barbary sales people. And, um so Tim Cook comes calling in 2014. And have you ever met Steve Jobs? Had you ever met Tim Cook? Was this totally out of the blue? Tell us about? No. I had never had the honor of meeting job. I had followed him. I was fangirl. Um, and I, in interviews, would say that returns the company around because of Apple because of all that their technology enabled us to do all over the world. And when Tim called the first time, I told him, Thank you very much. I'm incredibly honored. But I have the greatest job in the world. So you know. No, thank you. You know, because I'm loyal and if you come from where I come from, you always put people first. And I had an amazing team and, you know, we want amazing run and just acquired the beauty business back. It said it said etcetera. So I couldn't even fathom, you know, leading my kids who are now in university and and, uh but they were They were, you know, patients in persistent. So my kids to great attributes tohave. So we did the first big on the record story about Angela last year. In the most powerful women issue, Jennifer Reingold, who is hosting tonight, did a wonderful story, interviewed Angela for the first time on the record. And you explain that when you told Tim Cook specifically, what did you say to him? I'm not a go like the very first time we chatted. I finally was holding for the holidays. I was living in London for almost nine years, and so we were home to Indiana for the holidays, and I think they knew we were gonna be home. And so they said, Would you please please fly out and meet him? And and again, it was an honor to meet him. I mean, I against admired everything. He was doing it apple. So I did, and I But my mission was to talk him out of me. And so I said, Don't believe everything you read. I am not a techie. Honestly, as my daughter, I'm absolutely not a techie. And and he was so calm. He just shook his head and he said, You know, I think we have 10,000 of those. I think we're covered there. And then I said, But But you don't understand. I'm actually not even a great retailer. I said, You know, you know, I said, I you know, we do so much more than that. And yes, we have retail stores and he just very calmly he said them. You know, last time I looked, we have the most productive stores in the world. So I think they've got some really good operators to like Oh, okay, so it seemed like, um, you know, at one point he even at one point he said he just looked at me and he said, You know, you're supposed to be here. Wow. Wow. And I you know, And I said, How do you know that. And he said, because I watched her Ted talk and trust me, you're supposed to be here, and that was You know, I think that any you know, you have a lot of crossroads in your life, and I think that it, you know, people will say one thing that sticks with you and that that actually haunted me. It, you know, So I have. It's interesting you say that I had no idea that I would be so prepared, but I have a key. I really didn't. I didn't know that Angela would even mention the ted talk, but I knew that was meaningful. And I have a key line from your Ted talk. But before I read the key line what what was the essence of your Ted talk? It was on energy on human energy, because I think as you get older and you leave big groups of people, you realize the the gift, the power that you know that unity and and clarity of vision and and most importantly, you know, what I had discovered was, you know, no different than my childhood was that when you have this incredible foundation built on trust, that you that what it empowers and what it enables and the hope and the belief and, you know, it just trust takes all the barriers away. And I I think it's the same in a personal relationship or in a small business over the huge business. And that's that's really what I had just had always focused on. So so Apple, though Angela has a it's the most valuable company in the world, so something is working there in terms of the culture. But it has a controversial culture. It has a famously secretive culture. It is a hard place, toe work. And what could you bring in terms of the culture that wasn't already there? And again, I speak on behalf of retail, which is about half of the company's employees. Give or take 60 to 65,000. Incredible, incredible people that you guys all face when you go into the stores around the world in the contact centers that you know, whatever, you have a problem. If there's someone you need to call, they're always there for you. It's amazing group with incredible 10 year I mean incredible 10 year typically retail averages about a 20 20% retention. Aly, we have about an 80 7% retention rate in retail numbers are unheard of, so the culture in retail may or may not have been slightly different than the rest of the company. It's harder to speak because I'm not in the engineering department there in the product departments, but the culture in the retail organization and there their mission or vision is not to sell you their. Their whole values, if you will, is to enrich people's lives like that, how they talk about it. And they're hired for those right brain of those prefrontal cortex values. They're hired for empathy and compassion and very different than and so that's, I think, when Tim for the Ted talk and then he knew this retail culture, I think that's why he was so, Angela said. In this 2011 Ted talk called The Power of Human Energy, she said, The more technologically advanced our society becomes, the more we need to go back to the basic fundamentals of human communication. Okay, I agree. We agree. So what are you doing now? Let me back up. What did you think then? About what the opportunity Waas in 2014 when Tim Cook was luring you. What did you tell him? The opportunity Waas Thio increase the value of these most productive stores on earth And again he had one. He had one goal in mind. He had a retail store position open And, uh, you know, when it's hard, you know, it's hard once you are running the entire thing, So then to go that narrow if you will. And so you know what again Realize I'm trying to talk him out of it because I So why, you know, in one of them, in one of the e mails, I kind of proposed something that I thought might delay him a couple. So I had a very nice, gracious, humble email, and I just thank you so much, etcetera. And if you ever would consider the retail stores and integrating those with the online business because that's the lens that I see the world through a bourbon. We did everything digital first, So I said if you ever wanted to integrate those and then I wanted to, I wanted to make sure that they did something even greater. You know, everywhere that they played, you know, played a more important role in the community. If you if you really ever considered doing that, then of course I would have to consider and good. About five minutes later, I get an email back. Well, I hadn't thought of it, but I love it like, Oh, okay. And then I think, But then I think it's when it goes. It does. You know, I'm I'm not young. I've been in business a long time, and I think that, you know, we were trying to do some really wonderful things that Burberry we have. The board agreed about 1% of the profits into the Burberry Foundation so we could help unlock creative thinking and kids all around education and and the arts that had been taken out of school. So all of a sudden, you know, there's this incredible the greatest platform in the world, and then it's not as much about a job. It's almost more of a calling, because if you know if and really there's 500 of these incredible incredible stores places, if you will in all of these people that that wants to do wouldn't give Maurin there in the round enriching lives. So Okay, then how do you take that? And then it's, you know, and then you expect him. So basically, Angela is up for this job, and she's redefining the job to the CEO before she even accept it. Did you expect him to accept your vision of the job? Nothing. I No, no, no. Well, good for you. And that is true power. And now tell us, Angela. Serious for you. So, Angela, how does that vision that you had in 2014 translate into what we're going to see now? You, Angela, just came back from London on Friday night. The Regent Street store, which is Apple's first store in Europe. Um, got the redesign. And at this point, Union Square in New York. Regent Street. How many other stores have the new design? Uh, by the end of the year, will be at 95 95 but you're not really doing your big launch. And you actually described it to May. The launch will be at which, at the point that the new the new source would have turned on the app store. Right? They turn on service, explain that. Explain what you're doing so again. If in fact, this was a if, in fact, that I miss the stage in life where I think that companies have a huge obligation and I think that the bigger the company, the bigger the obligation. And so so our whole vision for the new store design concept was what is what is the community need? Where how do we make it so that the best of Apple can come together in one place? You mentioned the APP store. Apple music is huge. Apple pay Health and Fitness Home kit. You know, it's the moment Number one camera in the world, times of multiple of like 10. So therefore, how do we help you become a better photographer? So how did we kind of mapped out everything people do on their devices and said, How do we make sure that we create an experience where the best of Apple comes together? One. But to how do we make sure that the bigger that apple gets, we put something there that so wow, but also that is so incredibly locally relevant And and And we said, How do we you mentioned Steve and Tim has followed on. Tim says that education is a pillar for the company. The company gives 100 million to connect dead to the poor schools in America. IPads, etcetera. I've visited one of the Bronx when I was in New York a couple of weeks ago, and so that is a pillar. So, therefore, what's our role in education and maybe for students to teach them something They're not being taught in school. So one of the things will turn on next year as we turn on these stores is a swift curriculum. We will teach kids to code three times a day free of charge whenever their parents could bring them in. So there's programming for Children under the educate. There is programming for parents, and there's programming for teachers. So there's just been piloting in Union Square, something we called teachers Tuesdays, where teachers are allowed to come in every Tuesday and the team will do nothing that spend their time helping them. And last Tuesday, 78 teachers showed up from in and around San Francisco. So, and musicians, photographers are people in the art. Yeah, how to what extent do you see? This is, you know, kind of your You're creating a gathering space for them. Yeah, but we call it a town square, and I think it'll having three teens and you go to Washington Square Park in New York or you go to Covent Garden or you've been square. And on the weekends you'll see a unharnessed over here sketching something or a guy playing in the guitar over here. And kids love that right there. It's a human experience because they're so used to living in their digital world. So So our whole concept was, How does the store become like more like a town square again? Where the best of Apple comes together, everybody's invited and it becomes almost a community hub. Does this change the way you hire people for the stores it changes? We did actually change the structure to go along with the new store design. We talk about the store being the biggest product that we produce now, and we launched five new features in that in that product and the accessories. Now we're called the avenues because there's typically little shop that go around the town square. There's a huge hi res digital screen that we call the forum That you conceit 75 in front of the vision was I love the street sign that Steve used to put up the keynote that Apple was the intersection between liberal arts and technology. It's just always resonated being a 50 50 right brain left brain kind of person. And so so you know, our geniuses have been so revered for repairing your products. Um, but how did we needed to counterbalance that liberal arts? So in order to now service music and gaming on the APP store, it's art and creativity. We've actually created a whole nother group, and it's called creative, and we have a creative pro position that will now rival that genius position, but that create a pro will teach you how to be a better photographer. So you know, you come in, they will demo that product for you, signed you up for a photo walk, tell you when Visco is coming in to the Forum, you know, to show what's new on their app will create a probe that handles photography will do all they can. If that's your passion to make you the best you can be it it Are you trying to What do you think about the term store? Are you calling them that? No. What do you calling them? It's Apple Union Square Region. Larry. It's Apple, Apple, Keystone and Indianapolis. Is it again? The next generation doesn't they Don't think of going to the store. No, Angela. Very quietly. A couple of weeks ago, like the press did not pick up on this, you changed your title from, uh, senior vice president of, uh, Apple Retail and online to Apple Retail, which is a statement in itself and who will? One more question and this is a This is a tip of our hats to the young girls out there. What would you tell your 16 year old self Looking back, if you could today, you know, be your best self. I know who you are. I know what you know would know what you don't know. And you know, everybody has a gift that they've been given. And I think that it's so easy along the way to become incredibly insecure about everything you don't know or you know. And I think along the way people will tell you to and they'll try and convince you to become something that you're not. Early in my days, I had a man in human resources come up to me and tell me that, you know, I was doing a good job, but I really wasn't CEO material. And that I needed I needed a coach and I was young. And so I said, Okay. And you know what? I was supposed to be in Minneapolis for a week so they could teach me howto present better. I guess Andi was funny because the very first day they did these videos, and then they played it back and I liked it. I liked it. I felt the energy. It felt really positive. And and then they spent the next five hours critiquing every single thing I did. Don't move your hands. You talk too fast, you know. And at the end of the day, I was going to be there all week long. I was so upset, and I just looked at them and I said, I like me and I'm This is who I am, and I don't care if I become a studio. And little did you know back then how important in the age of social media authenticity has become. So Angela is an authentic leader. Thank you for that. Thank you. And