Badge Culture as Control System

“Can you give us an outline of what the meltdown meetings were and why they differentiated a vertical company from a wholesale company? To be a truly design-led company, I knew we had to do things much differently than they were done in wholesale. The vertical retail model works on a nine-month calendar, which let us be a year or even two years ahead of our wholesalers since we didn’t have to make samples and show them to middlemen or fashion magazines. This led to developing something we called ‘the quarterly meltdown meeting,’ which became the single most important meeting at lululemon because it set the direction for every other department. In descending order, our line plan was built based on a series of rankings from the sales of the last quarter. Each new ranking was built onto the ones listed before it: • Inside each category (i.e. pants), we ranked styles in percentages sold from best to worst. • We readjusted rankings by what could have sold if we had perfect inventory, delivered at the perfect time. • We readjusted again based on what could have sold if we had perfect styles (i.e. the right number of styles in the perfect length, width, or fit). • Then we’d readjust the rankings again, using new or old styles to use up any excess liability fabrics or trims. All excess fabric must be used up in the next season’s line plan. • From there, we’d readjust to show how a future-focused design team would rearrange the ranking based on their knowledge from working in the stores, leading design meetings, forecasting books, and competitor’s designs. What styles go or remain in the line plan is determined by the head of design and not the buyer. This is a control system. Before the era of lululemon, a buyer was incentivized to order what worked the previous season (buyers are naturally risk-adverse and beholden to finance who wants what is best for accurate financial reporting but not what is best long-term demand). A design-led team might eliminate a good-selling item because the style negatively affects long-term brand value • Finally, we’d readjust to show, “What the production manager would change given fabric, factory bottlenecks, import duties, or opportunities.” What if there is only enough fabric for four styles but the line plan asks for fifteen? What factories are easy to work with? What mills can guarantee fabric delivery? We looked for bottlenecks…”

“Do you have any new manifesto sayings for the side of the lululemon shoppers? • Brains are designed for human survival. For the most part, the brain isn’t concerned with living a phenomenal life. The human being must consciously choose to override a life of mediocrity. • The brain is not necessarily correct about 80 percent of what we think and sense. We give the brain a bit of an idea, and it fills in the blanks. The brain is often not right. The brain connects immediate perception with all past experiences. • If I wasn’t concerned for my survival, with what would I be concerned and dedicate my life? • I know what is going to happen because I start in the future and work backwards. • Integrity is not right or wrong. It just gives workability and performance • The game of life is not looking good for others; the game is making life work. • The individual is a drop of water, and the family is the whole ocean. • Everyone learns differently, and I must find out what is important to other people. It is the key to having people want to work with me. 19. What was so different about lululemon’s design strategy? Lululemon was never about “enhancement” of women’s bodies. We never wanted to fool anyone. We were not a Spanx-like product that could to remould bodies, and we didn’t pad bras to create an illusion. Lululemon was all about being real a human being. We were comfortable with all bodies. This core belief came from a life of competitive swimming, Olympic clothing, and triathlon, where functional tight stretch apparel is a necessity for competition. The mission statement of “providing people with the components to live a longer, healthier, more fun life” dictated that lululemon was in the longevity business. The mission statement provided designers with a guiding light towards: • Athletic performance • Function before fashion (or more to the point, function is the fashion) As lululemon grew exponentially through the second half of the 2000s, finding the right designers became an interesting process. Big businesses and other large organizations – say, sports franchises – seem to always have three people on top who produce more than the five thousand people below them. This equation is a weird version of Pareto’s Principle where, instead of 20 percent delivering 80 percent, it’s more like 3 percent delivering 97 percent. With designers, I found there was usually one designer who could create consistently more than twenty others. To me, that one super-talented designer brought more value to lululemon than a CFO or head of HR. With financial, administrative, and managerial people, systems are in place where specific roles are quantifiable. It’s the opposite for designers, even those who’ve gone to design schools. Taking it a step further, designers must re-create four to eight times a year and the best can do it effortlessly. We would find the best designers by setting up labs. In these labs, the idea was to observe multiple designers and see who could…”

“Emilio Azcárraga Milmo, the most powerful businessman Mexico has seen, was very picky about badges. These credentials, without which no employee was admitted into Televisa’s facilities, had to be worn not only as identification but as a symbol of pride”

““Is that what I pay you so much for?” —Azcárraga complained—. “So you can wear the badge on your balls?” A terrifying silence fell. El Tigre had roared. But the employee managed to mumble a reply. Bringing his hand to his throat, he exclaimed: “No, sir, I keep those here.” Azcárraga burst into a tremendous laugh, one of those broad and sonorous guffaws of his that were characteristic of him. Nervous, his employees began to chuckle under their breath. When the elevator reached his floor, Azcárraga took off his Rolex and gave it to the worker. “You deserve it, you bastard,” he said, and walked out through the doors.”