Promoting Cross-Divisional Mobility for Succession Planning

Brief: 

LVMH significantly improved the succession planning of key positions in the LVMH Group through promoting internal mobility among LVMH’s divisions and brands (“Maisons”).

The problem addressed by the campaign: 

There was a lack of successors identified to fill the key positions of the LVMH Group – only 47% of critical positions had a successor identified in 2007.

Solution: 
  • LVMH implemented cross-divisional talent exchange meetings at the global and regional levels.
  • During these meetings, Human Resource Directors from different brands and businesses within the Group shared information regarding senior executive talent profiles to mutually enrich the succession planning for key positions in the Group.
  • Every month, members of the Executive Committee spend one hour discussing the talent mobility of senior executives regarding their career development and for succession planning agreed during the annual people and organization review.
  • The Group HR development team facilitated this practice.
  • The Group Executive Committee, Presidents of LVMH’s brands and their HR Directors are involved in this process.
  • It is an annual process well implemented through the HR function, covering all the LVMH brands and affiliates worldwide, in mature markets as well as in emerging markets.
  • LVMH has chosen a set of key indicators to measure the effectiveness of the practice.
  • Challenges include:
    • Reluctance to share talent profiles
    • Timing to accomplish a succession plan
Impact: 

The practice was extremely successful and was measured through:

  • The succession planning rate improved from from 47% successors identified in 2007 to 79% successors identified in 2011.
  • The ratio of cross-business mobility for senior executives is almost twice higher than other category of employees.
  • There has been a good impact on retention. The turnover rate of senior executives is very low, even if the labour market is competitive.
Why has it worked?: 
  • There has been constant dialogue between stakeholders and the support of the top management.
  • Improvements were made by combining the global approach with regional focus.
Conclusions and Recommendations: 

In today's talent war, only collaboration can win. This is particularly true for the LVMH Ecosystem.

Foundational Issues: 
Public and private constraints on mobility
Level of Collaboration: 
Level 1: Collaboration within the organization
Region: 
Global (all of the above)
Economic and political context: 

As of 2010, LVMH had revenues of €20.3 billion with a net income of just over €3 billion. The Group currently employs more than 83,000 people, with 30% of LVMH's staff working in France. LVMH operates over 2,400 stores worldwide.

About the Author(s): 

LVMH is a French multinational luxury goods conglomerate headquartered in Paris, France. The company was formed after the 1987 merger of fashion house Louis Vuitton with Moët Hennessy. It controls around 60 subsidiaries that each manage a small number of prestigious brands.

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