How YSL’s Peter Fahey Developed a “Nose” for Managing

“I have no tertiary qualifications in business at all. The last thing I studied after I left school was pilot’s licence. But every day [in management] you learn something,” says Peter Fahey, 20 years chief executive of Yves Saint Laurent NZ and now the company’s Austral-asian managing director.
The sweet smell of his personal management success emanates from his deep understanding of the fragrance industry, his affinity with people and his on the job experiences.
Management is about putting people first, according to Fahey. His challenge has been to build teams of people who respect each other and take the business forward.
Fahey considers his most critical management lessons came from first hand experiences of observing how not to manage. That first managerial master class was delivered by chocolate maker Cadburys in England. “It was rat race,” he says reflectively, “and I hated the concept of being [treated like] number in company.”
His second lesson came courtesy of Shiseido when he returned to New Zealand. Fahey took temporary sabbatical to undertake his military service. He was, he says, promised great future with the company on his return. “In the morning I’m on the bus heading for Waiouru and I open up the newspaper and there’s my job advertised. I couldn’t believe it. Another example of how not to do things.”
As often happens, his time with the army turned out to be “the single most important thing I’ve done in my life”. And it gave him his first taste of managing others.
In charge of small platoon he soon learned the importance of winning respect. “It doesn’t matter what you are called, how much braid you wear or how many pips and stars you have on your shoulder, if you haven’t got the respect of your men, you’ve got nothing.”
His time with the army over, Fahey spent four and half years with BDM Grange, the company that managed the Christian Dior brand in New Zealand. It was his first experience of the French fragrance industry.
“I learnt lot from that. The boss there gave me lot of leeway and said ‘use your initiative, use your loaf, make it happen’.”
Those were, recalls Fahey, easier days. “You spent most of your time telling people they couldn’t have stock rather than telling them they could.”
Then, in the early ’80s, YSL started looking for someone to manage its New Zealand operation. Within month Fahey had the job. “I started with desk, phone, company car and an order book. Actually, we didn’t even have the order book. First I had to create that.”
Selling product, was the easiest part of the job – back in the early ’80s YSL’s Opium fragrance was top of the perfume pops.
But life at the top of fledgling local operation wasn’t all one beautifully scented bed of roses. Five years into the job, Fahey was invited to become general manager of the company’s Australian division. The appointment turned out to be his third lesson in “what-not-to-do management”.
The managing director of the Australian operation was also YSL’s regional vice president. With hindsight Fahey believes he was “set up to take the fall” for anything that went wrong with the company.
“It was where I learnt my lesson about being the boss. Any initiatives I tried to implement were shot down in flames.” So, when Gucci, YSL’s new owner, asked Fahey to head up the brand’s Australian and New Zealand offices he agreed on the condition he was ‘the boss’. For Fahey, being ‘the boss’ meant having the leadership mandate to make decisions that needed to be made.
In summarising his beliefs about how management should operate, Fahey draws diagram of the six-sided Jewish star which can be drawn using two triangles. “In the classic organisational structure you’ve got the boss leading the staff [boss at the top of the star, staff on the baseline]. I think there is another structure as well, and that’s the boss under the staff [the other triangle with roles in reverse].”
Fahey believes understanding the interdependence between staff and leader is important to management relationship. Another key to success is to have very clearly defined roles.
Fahey chooses each staff member personally. It is his way of ensuring synergies between people. “If I like so and so, then there’s fair chance other staff will. I think that is very important, you must have harmony in company… people who enjoy working with each other.”
Fahey puts his staff selection success rate at 90 percent. His 10 percent “abject failure rate” encourages him to “clearly define the role. In the past I sometimes picked the right person for the wrong job.” It’s out with formality too. Fahey says if anyone called him Mr Fahey, as an old boss of his used to demand, they’d get short shrift.
Is managing the Australian team different to managing New Zealand? No! Fahey is surprised how similar the two environments are, the main difference being the “extra layer of management fat” in the Australian company when he first took over the job. “The business rolls in [in Australia] so there’s lot of profit and with that extra profit there you get this [management] excess.”
Based in Auckland, Fahey spends week about in Sydney and Auckland. To keep teams on track he holds management meeting the week he is in town. “As much as anything it’s an information thing. It keeps everyone up to speed with what’s going on… there’s nothing terribly scientific about it.”
Asked to distil or define the essence of management in two sentences or less. Fahey draws deep breath before answering. “People are the most important asset you have. You must work with and respect the people who are part of your organisation. If you don’t respect them then you are not going to get on with them. You define the role and let them get on with it. You don’t do the job for them, you employ people that you trust and they do the job and you let them get on with it.”
As connoisseur of fine fragrance might observe: you must have nose for quality in this business.