CHAPTER 16
Elevating the Designer
Long before the launch of Anne Klein II, Donna, the head designer at Anne Klein, desired to individuate and start her own brand. At first, she wanted a new line under the Anne Klein umbrella. She was the only one who thought starting a new line with her name within Anne Klein was a good idea. Frank and I believed the Anne Klein Collection as well as the new bridge line had a distinctive look. Donna wanted to do something unique. Any innovation within the Anne Klein brand image, we believed, would clash. Keeping any new project differentiated from the parent was critical. So, Donna and I started talking about forming a new company.
Donna, however, was apprehensive. Starting a new line with her own design risked creating a new brand and business. Also, the fear of failure after such a long run at the Anne Klein Company haunted her dreams. Understandably, Donna had never made a name for herself since she had been working under the protection of an established brand. Donna noted her fears. I stepped back and let her continue working as she had in the Anne Klein design room. Anne Klein was doing so well, I didn’t want to lose the conceptual strength behind the name.
However, after 10 years, I feared Donna was talking too much with other members in the company about her future dreams. Her ambivalence marked a weakness in the design room that neither I nor other key executives could continue to tolerate. I knew that if Donna were to blow hot and cold for much longer, the morale at the Anne Klein Company could dwindle. I believed her good friend and co-designer at the Anne Klein Company, Louis Dell’Olio, was strong enough to handle the challenges of a collection alone.
After launching Anne Klein II, I knew our arrangement with Donna would have to be short-lived. If I didn’t do something, I could lose her to someone else willing to take the necessary risks. One Friday afternoon, Frank and I called Donna into my office. At the time, my office was on a different floor from the designers in the same building. We met in the conference room, and I asked her how she was doing. She still showed the same apprehension and ambiv-alence as in prior encounters. Donna didn’t want to leave Anne Klein because she had reached a level of comfort. I, however, thought there was much potential waiting to be unleashed. Frank and I knew she wouldn’t make a decision on her own. We didn’t want her to have any choice in the matter. I fired her and directed her to report Monday morning to the conference room on the fourth floor of 205 West 39th Street.
Firing Donna and starting a new partnership between Takihyo Inc. and her would require a lot of capital, patience, and ingenuity. We knew we had mountains to climb. Before I acquired the Anne Klein Company, Gunther Oppenheim and Anne Klein had done most of the heavy lifting. They had done a good job of launching the line and activating public attention. Although the company wasn’t growing as quickly as it had under Takihyo’s watch, the hard part was done. Anne’s name was gaining recognition and respect within the industry.
Donna, on the other hand, was not a household name. All of the Anne Klein ads had Donna’s and Louis’s name, so some branding existed, but the “Anne Klein” name was on an entirely different plane. However, we had to start from scratch. I had to recruit the right people to help with the new venture. In the first days working together on the branding, Donna and I browsed through a number of different magazines to brainstorm how to establish our new image. We found a number of great ads, but one caught our eye. The credit read Peter Arnell. He would have to be the one to brand our company for the public eye. Peter’s creativity and ingenuity outmatched most of the other ads. I called him and set up a first meeting.
In our first meeting, I asked Peter to create some images for the company that could work. I wanted three images: corporate, brand name, and product. Each needed a distinctive feeling and message. In the corporate image, I did not want faces, styles, garments, or the color of the seasons. Donna and I wanted to make a point that we were an American company and, more specifically, a company berthed in New York. We named the new company Donna Karan New York, and our corporate image would need to fit with our name. When incorporating seasonality into a company’s image, a brand can be frozen in time; I wanted the corporate image to be beyond time.
The brand image centered on our products. We could not limit ourselves to garments, as we would at some point get into accessories as well as menswear and other lines. Our product at the beginning had been a classic, chic, and sophisticated line for international jet-setting women, but we wanted to keep the door open for other opportunities. The image would have to be all-inclusive for whatever avenue our future growth would take.
Lastly, the product image would express the flavor of the season with individual items ranging from shoes and belts to garments and more. This is the most ephemeral type of branding for us. We wanted to send a message about a particular product to the public. These images were meant for advertisements and banners, and they were produced on a schedule in line with the development of each new line.
In truth, I was somewhat unfair to Peter. Since the Donna Karan Collection had no collection as of yet, we had nothing to show. We were starting from scratch, so Peter had no idea what direction he should follow: he was on his own for this one. However, I trusted his aesthetic. The only other hints I gave him were the following: The consumers for this line have a sophisticated and chic yet classic air. Our brand should fit with jet-setters, international businesswomen with a high level of taste. They are conservative but fashion conscious. Before Peter’s creation of the image of Donna Karan New York, no one had ever used photographs without models to brand a fashion house.
Although Peter has caught some flak in the press for being difficult to his employees, his brilliance has remained unmatched. I knew Peter could come up with a design that would fit our needs. Peter returned to us with a black-and-white, blurred photo of the Brooklyn Bridge. When Donna and I saw this image, we were speechless. Peter’s photo was so strong, Donna had tears in her eyes.
We called the first line the Donna Karan New York Collection. Peter’s design was perfect. The typeface was thin, in a contemporary-looking matte gold on the black-and-white photograph—timelessly New York, yet bold and provocative. The design fit seamlessly, building a directed sense of emotional value into the brand.
Other than our work with Peter, we focused on hiring a full-time staff. I let Donna handle the design team and I would fill the business side. At first, we wanted to find people in the business whom we knew would be interested. Though I have relied on headhunters many other times to bring the right candidates, I had few people whom I could trust to do the job right. Because this project was so new, it was more fragile and needed careful hands to make our dream a reality. We had a hard time finding the right production manager. A few other people came in to do the job, but no one made sense. Steve Weiss, Donna’s husband, had pitched in his time alongside of other production staff to fill the void. It was difficult to find the right person to be our production manager, so we did our best with the staff we had and Steve’s help for some time.
At first, however, revenues did not compare to initial capital contributions. Frank, who was the first against creating Donna Karan New York, argued that taking money away from Takihyo meant losing some of the asset basis available for the two of us. A week before firing Donna to have her in the design room as Takihyo’s partner in the Donna Karan New York office, Frank and I had dinner at the Le Parker Meridien Hotel in midtown Manhattan. Frank was nearly in tears fearing the death of all of his hard work. He wanted nothing to do with it. Being the majority equity holder of the company, however, I had final vote and veto power. I told Frank this was how I wanted to run the business. This was how I saw an increase in our bottom line. Moreover, since he held a small stake in Takihyo Inc., I did not assign him any responsibility but offered 10 percent equity since he was my partner.
I understood his concern, but I believed in Donna’s ability. She had brought the Anne Klein Company from a small revenue producer to the first sportswear company offering clothing to the masses. As an intangible asset, I knew this new venture could materialize profits far greater than what we could amass at the Anne Klein Company. I continued, however, to face considerable resistance. Everyone from accountants and lawyers to those closest to me advised Donna Karan New York was chasing bad money with good. When we made an original agreement with Donna Karan New York, Takihyo was only committed to contribute $3 million. However, within the first three years, we spent roughly $16 million to create the brand and have enough working capital. Despite their cries that I would go broke and take Anne Klein down with me, I stuck to my conviction.
The company’s future rested on Donna’s first solo collection. As mentioned previously, collection lines tend to be expensive and only the wealthiest demographics show interest; that is, consumers who spend hundreds or even thousands on a dress without batting an eye. Arnell’s creative genius teed up the collection as a line to be had, using attractive advertisements to heighten Donna’s name and to create a strong, bold image for the brand. I learned early on that without brand creation, a terrific collection line will fail. Without a terrific line, branding only takes the lines so far. Some designers might gain momentary fame after releasing an effective advertising and marketing campaign, but when the product fails to meet expectations, so too does the company.
Arnell’s brilliant advertisements fit well with Donna’s fashion aesthetic, launching the first line into the stratosphere. Advertisements only go so far, but publicity goes much farther: Donna’s first solo collection line was a hit and was featured on the front page of nearly every major newspaper worldwide. Donna’s collection created a dramatically new, fresh look. Robert Lee Morris contributed to Donna’s new look with a complementary line of accessories they both designed. The first line debuted at our brand new showroom at 550 Seventh Avenue for the press and special guests. After the show, the guests of the vernissage gave a standing ovation.
Managing Creative People
What we have said about getting people interested applies to a great majority of those who report to you. These are the average, near-average, little-better-than-average performers who, let’s face it, constitute the backbone of most departments and most companies. No troupe is made up completely of stars. If you are able to “turn on” the people of reasonable competency who work for you, you will be accomplishing one of the fundamental tasks of management.
However, every operation contains, or should contain, exceptional performers (those creative people, often with oddball traits), such as Donna Karan in the previous chapter. These types tend to provide the most dramatic solutions to the biggest problems. Some managers are frightened of these types. They don’t understand them or they can’t handle them. Tomio recognized his fear that Donna might leave if a new opportunity were to arise, so he acted on this impulse. His judgment led him to an understanding of what I’d call the “creative exception.” For most operations to rise to great heights, these “creative exceptions” are crucial. You should want to rise to the heights, at least once in a while. It is exhilarating, and it is sometimes just plain necessary.
Sometimes, however, you have to tell these types to require what they want. Sometimes, people want (meaning, need) to be told what to do. “Free rein” for subordinates can be good but can be unrealistic at every juncture as Tomio pointed out in the previous chapter. Conventional management wisdom dictates that the boss should talk things out, listen to everybody’s ideas, and let people participate in working toward solutions to problems. But the gifted manager pays the price. The late, towering management thinker Abraham Maslow pointed out, “For one thing, the superior person is apt to get extremely restless in such a situation, and the strain upon his body is apt to be much greater because of the necessity for controlling himself and inhibiting his impulses. He may easily and quickly see the truth that all the others are struggling toward very slowly, and keeping his mouth shut can be physical torture.”
Phony egalitarianism makes it tough for subordinates as well. They know the boss is likely to reach the finish line before they are halfway around the track. So, what happens? “They are less apt to work hard because the work is useless and senseless. Why should they sweat for three days to work toward a solution of a particular problem when they know all the time that the superior one can see the solution in three minutes? The tendency, therefore, is for all the others to become passive. By contrast, they feel that they are less capable than they actually are, and more stupid, too.”
So don’t listen to those who say, “Don’t take yourself too seriously. You’re a peacock today and a feather-duster tomorrow.” You are a manager. Unless you are burdened with an extraordinarily weak ego, you must admit to yourself you are the superior. Tomio took control of the situation with Donna to create a company and brand that would far surpass his first endeavor with the Anne Klein Company because he was willing to take the opinions of others with a grain of salt when he saw more opportunity on the horizon.
Mortimer R. Feinberg, PhD