The world just welcomed its third person with a $100 billion net worth. Bloomberg reported that chairman and CEO of the world’s largest luxury company LVMH, Bernard Arnault, age 70, just broke the $100 billion mark, joining Jeff Bezos and Bill Gates in the ultra-exclusive club.
In doing so, Arnault became the world’s third richest person, surpassing Warren Buffett. LVMH (Louis Vuitton and Moët Hennessy) includes its namesake brands as well as many other luxury brands like Dom Pérignon, Sephora, Christian Dior, Fendi, and TAG Heuer. Arnault’s net worth now equals more than three percent of France’s economy.
CNBC reported that Arnault’s net worth jumped $32 billion just this past year due to a 43 percent increase in LVMH’s share from heavy demand from Chinese consumers for Louis Vuitton handbags and Hennessy cognac.
Such astounding success must be born from a complex weave of personal attributes, circumstances, and choices, right?
Steve Jobs (someone Arnault greatly admired) provided the first clue to Arnault’s stunning success when he said, “You know Bernard, I don’t know if in 50 years my iPhone will still be a success but I can tell you, I’m sure everybody will still drink your Dom Pérignon.”
Arnault himself elaborated when he said,
“In today’s business, since the ’80s when I bought Christian Dior, it’s the same combination that explains success. You have to work with some of the best inventors, creators, designers and be able to market their products and create with their products, desire in the world.”
Hire the best. Encourage their creativity. Create desire for their products.
Arnault’s “formula” is something you can apply too.
Arnault’s business, luxury goods, is the definition of a market where demand must be created. No doubt, each of the products in the massive LVMH portfolio is a quality product. But that’s not what people are paying for. They’re paying for an associated lifestyle, an image, a feeling. Prestige. A sense of success and that they’ve made it. That’s all emotional. Emotions created that create demand.
To create such demand requires great products created from great minds whose creativity has been unleashed and who’s output is brilliantly marketed.
Your business might not be in the field of luxury and “manufactured demand,” but you can surely learn from Arnault’s approach. Job number one is to hire the absolute best. Find those with the best, most relevant talent and then round it out with one important question, a dead simple rule I use, “Would I want my child working for this person?”
Then unleash their creativity. Present your employees with a pressing problem or opportunity, freedom to create solutions, a limited amount of process to rapidly progress the idea, and the resources to carry it all out. Be sure to turn off your self-monitoring brain as you’re considering different creative solutions, too.
Armed with ideas for enticing products, you can now verify their relevance and stoke demand by connecting with those who buy and use what you sell. This is the most important step. People pay exorbitant amounts for premium brands because of something the brand makes them feel. What does your product make your customer feel and how can you capitalize on that to charge higher prices?
This line of thinking applies even if you’re in a discount goods business. Successfully offering slightly less of a discount can still add up to handsome incremental profits.
I’m not saying by doing all of the above you’ll join a $100-billion-dollar club. But I can 100 percent guarantee you that you’ll have a much better chance at greater success.