Beauty's Digital Transformation
An Interview with Steve Light, Executive Vice President of Category Development, Purchasing and Supplier Management + eCommerce at LNR Distributors
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1. What does innovation mean to you?
At the core of innovation, it's about curiosity -- and I think that often gets missed. We think of the technical aspects of innovation, but we forget we've got to have the right mindset and be very intentional about that. I look at it from more of an Eastern philosophy: it's about pursuing the right questions, not about getting the right answers.
Actually, here in Toronto where we are today, there's a great author by the name of Roger Martin who wrote a book a few years ago called Design Thinking, and he talks about this idea that in innovation, you chase great mysteries. That's what I like to do -- chase great mysteries to make the world a better place.
Innovation impacts every aspect of the human experience -- sociology, politics, economics, faith. We're incredibly talented and creative creatures. How do we come together and make the world a better place? That, at its core, is about being innovative.
2. How does your team generate new ideas?
It's really three things. First of all, it's read, read, read. I actually have three books that are go-to for me. The first one is what I just mentioned -- Roger Martin's Design Thinking. I call that a recipe for strategic innovative thinking. Then there's a great book by Matthew May called Elegant Solution, which highlights Toyota as a case study -- one of the leading innovative companies in the world -- and how they use systems thinking to help a team accelerate. I teach that to my team. And then the third one is a great book on managerial innovation called Traction by Gino Wickman. It's about what they call the EOS, or Entrepreneur Operating System -- a phenomenal book on innovative thinking from a leadership standpoint.
The other two things are time and breaking stuff. People have got to be intentional -- I call them micro sabbaticals. Make sure people are being intentional about making time to do innovation, to think about innovative things, to get out of the busyness of the day. And finally, you've got to break stuff. You've got to have the courage to go in, tackle things, get messy with it -- that's where creativity comes through.
3. Do you have any specific rituals for resetting your team to be creative?
When I got this question, I really thought about it, and I'm going to do the inverse of it. My team would laugh if they were here and say, "Look, rituals? Every day, full throttle -- we're always being challenged by you." I actually have to do the opposite. I have to have a self-ritual to really constrain myself and understand the capacity of the team, what they've got to get done day-to-day, and what their capacity is to push the boundaries of what we're doing.
For me, the ritual is that my team's already dialed in on curiosity and looking for the next generation of ideas. But I need to make sure we're balancing their day-to-day work and creating harmony on the team, because you can actually create an overly innovative environment where it creates too many capacity constraints in the system and people get burned out. Too many chefs in the kitchen.
Some of the most powerful teams from an innovation standpoint use a word that we often don't use in that setting, and that's "no." No, we don't have the time to do that. No, it's a great idea, but not now. You've got to have those healthy boundaries if you're going to create an innovative culture.
4. How are you leveraging AI in your innovation process? What are some unexpected benefits or challenges you've encountered with AI adoption?
Great question, and I'm so proud of my team. In the month of April, we had not only the number one beauty-selling item on TikTok in the world, but my team ran the largest-selling store in the world on TikTok for beauty. And AI played a big role in that.
We are a leader in taking brands to TikTok, and one of the things we've found is it's so important for your organization to understand what's called unstructured data. You're looking for patterns of information that aren't easy to capture. If you want somebody's birthday or eye color, that's easy to get. But when you watch their behavior, you'll see patterns that aren't easy to put into a database. But if you can grab it and do what's called attribution, the insights are amazing. Humans don't have the ability to crunch that much data -- AI engines can do it.
We've done two things. First, we're taking feedback and customer reviews, and it's amazing to crowdsource product development there because they're telling you, "I really like this product, but I wish it could..." or "This works really well, but it shouldn't do this." Product development teams are running that through AI engines and creating next-generation products. It's speeding up go-to-market time as well as really being customer-centric.
The other way we're using AI -- and this is my favorite -- is we're analyzing all the data from customer behavior and then back-flowing that against affiliates. If you don't work in the TikTok world, affiliates are basically influencers who have a motivation to pitch and sell products. We're looking at the engagement of consumers as well as conversion or sales, and we're examining things like what was the content, what was the timing, what were other creative characteristics of what and how that affiliate did it. We're isolating that through AI to create patterns, and then we're using that to cultivate the affiliate community. That's why we're seeing products go hyper-viral.
Here's the thing: two years ago on TikTok, products would go viral for a week or two. Now, products are going hyper-viral for months, and it's because these AI engines are capturing and seeing the patterns that we can reinforce in the selling process.
As far as unexpected challenges, I think the biggest one relates to generational impact. The Gen Xers and Baby Boomers are setting the pace strategically, but it's really the millennials and Gen Z who are going to enhance the application and implementation. So the biggest challenge for organizations is that Gen Xers and Boomers are going to have to have a really strong listening post and incorporate that younger generation's input. One of the risks is if your organization isn't adopting AI, you're going to lose talent. That talent's going to migrate somewhere where there's advancement.
That was a huge takeaway for us -- we've got to incorporate what was called an "AI strike team" and bring those voices in. It helps with adoption. And here's the thing: you don't even have to pay them extra. They'll be so encouraged and invigorated by participating.
5. How do you identify trends? What resources does your team use to spot trends and consumer insights?
There are a couple of things. Number one, being on TikTok, we're on the forefront in beauty and cosmetics. We're seeing things well in advance of the rest of the market, and we're feeding that back to our sales teams. It's really interesting -- in the U.S. retail market, when I walk stores with chief merchants, the first thing they ask me is, "Tell me about TikTok. Tell me how we can use it, what's going on with it." They're hungry for it, but it's an overwhelming space for them. So we're synthesizing that data really quickly to help our retail partners get on trend really fast.
The second thing is qualitative and quantitative reports. You've got industry experts out there like Mintel who report really good forward insights.
And third, we leverage our partners. We work with the best and biggest brands in the world—like e.l.f., L'Oréal, CoverGirl, Revlon, as well as emerging brands like Revolution Beauty out of Europe. They do so much consumer and panel data that we absorb that and then use it around our ecosystem to ask questions: What is she looking for, and how do we help her live a better life?
Just to give you some context on TikTok's impact: 62% of women in the United States actually begin their beauty journey on TikTok. One out of three Americans are already buying products on TikTok. Why? Because they're having a great experience. The algorithm is custom-tailoring content in a world of customization and personalization. It's amazing how dialed in it can get, and really, the rest of the retail industry has to fast-follow this or they're going to be left behind.
6. What is the biggest challenge you face when innovating?
Fear of failure. I often get asked to coach people on personal branding, and what I try to explain when I do my sessions is this: I have them close their eyes and remember when they were 9, 10, 11 years old and went to their first roller coaster with their best friend. She wanted to get in the front seat, and you were like, "Oh my gosh, we're gonna die!"
Fear came up through you—you felt it physically. And yet you got on that ride. You had the courage to do it. And 90 seconds later, when you pulled back in and the announcer said, "Welcome back, did you guys have a great time?" you're cheering. You turn to your best friend and what do you say? "This is amazing. Let's do it again."
That's life, whether it's business or personal. In this world of innovation, people have this fear: Will we fail? Will we get it wrong? Will we make mistakes? The best thing you can do, as I said earlier, is break stuff and make mistakes. You've got to be smart about it, though.
I teach my team this idea of micro-innovation. When you look at the book I referenced earlier, Matthew May's Elegant Solution, they talk about how great companies that innovate don't go for home runs—they hit base hits. That means they're micro-innovating. They're learning, they're adjusting. The IT world learned this a decade ago when they got into sprints. Instead of having these large, massive projects that would last two years with milestones every six to eight months, they started doing things in weeks and making slight adjustments to the budget, to the workflow, to the timing, to the programming. It started to not only make projects come in faster but also under budget, and really listen to the consumer, the end user.
It's the same thing here -- you've got to micro-innovate and overcome that fear of failure. That means you've got to give people clear authority to make decisions, and you've got to build trust. It's okay to go break it, just make it not a global killer. Learn from it and get better.
7. Has there ever been an instance where another industry has influenced an innovation at LNR Distributors?
All the time. In the broad sense, we're watching the CPG companies and the product development companies all the time, looking for models they're using and ways they're thinking. We also want the right attitude, and I look at Steve Jobs and Apple. One of the things Steve Jobs talked about is that companies have the wrong direction in the conversation with the consumer -- they're talking at the consumer, not with the consumer. He would say you've got to work from the inside out, see it through the eyes of the consumer, and then that will help you start to see the world differently. Product development, particularly in the tech space, has been really strong for that.
We also look at adjacent industries like the fashion industry for colorways and different types of technology. But I'll give you a practical example. Our CFO was at Future Festival yesterday, and you don't tend to think of finance people as overly innovative, but we have a very talented CFO. I asked her, "What did you learn from today?" She said it was really interesting -- they were listening to an example of unintended consequences and the amount of power that AI requires just for simple things like "thank you" and "please." They used the example of the oil industry and unintended consequences.
I said, "How would you apply that to our world?" We're currently working on a strategy, and instantly both of us looked at each other and said, "Wow, there's a piece of impact on the company that we had not thought about." We were so focused on the benefits of this strategy that we didn't think about some of the ancillary impacts. Now it's going to help us game theory and plan out and be better prepared. So even hearing about the oil industry has application if you're listening with the right kind of active intention.
8. What makes an innovative culture? How do you create a culture of innovation?
I think it's three things, and I'm going to end with what I started with: You've got to breed curiosity. I will take somebody who's curious over somebody who's brilliant every day, because they want to learn.
Number two, you've got to enable an organization that is willing to make mistakes. You've got to view it as a strength of the organization to try. Look at physical workouts -- you don't build muscle unless you do what? Exhibit hard work and break the muscles down to rebuild them into something better. In design thinking, Roger Martin talks about how at the top of the funnel you have this great mystery, you begin to understand it, and you build what are called heuristics, which are models, and then you refine that into algorithms. AI companies can get lost in the algorithms, reports, and efficiency. You've got to do what he calls "creative destruction." You've got to step back, be curious, be willing to take risks, and break it all down.
And then third, you've got to know how people are wired. Some people are motivated by fame, some by experience, some by challenges, some by compensation. I think a lot of times people task teams to approach solutions without thinking about the organic design of the team and the motivations of each of the members.
I'll add this: When I was at Cardinal Health, I had a fantastic training on how men lead women. The research shows that the highest-performing teams across any industry are 50/50 gender-balanced because of what we bring naturally. So my advice if you're going to create an innovative culture: create a sense of curiosity, have a strong balance of men and women on the team, and build an environment where people have permission to make mistakes.
9. Looking to the future, how will LNR Distributors continue to be a leader in innovation?
Probably continue to go to Trend Hunter's Future Festivals. Seriously -- every time I come here, your speakers are amazing. Your futurists are thought-provoking, but it's practical. It's not like, "Oh, someday we're going to be able to teleport ourselves like Star Trek all over the planet." It's what's in front of us. This goes back to Elegant Solution -- don't try to solve things that are so far beyond that they're not adaptable. You guys bring a really strong focus on that.
I think continuing to read and listen to voices around the planet, and then continuing to have fun. In curiosity, there's a nature of fun. I have my day job as an executive of a $500 million company, but I'm almost done with my master's of divinity. I want to get my PhD and be a professor someday. I've traveled to over 40 countries in the world, and I have a black belt in martial arts. It's doing all these different things in life that just create this neural network that helps you see the world from different perspectives.
You've got to get your neural networks firing in different ways. We are very efficient creatures, so you've got to be disruptive. Here's my challenge: Find 10 different ways to go home over the next two weeks and be observant of what you see that you never saw before. And if you're right-handed, for the next two weeks, anytime you use a razor, use your left hand. Look for how you have to think differently, doing the same thing but from a different perspective. It's about being intentional about seeing the world from a different angle. Get out of that myopic approach to life.
References: lrdist
