Sense and sensibility: Maria Eugenia Giron applies the latest Harvard MBA thinking to classic Spanish jewelry maker Carrera y Carrera - Regional Report: Europe

Chief Executive, The, April, 2002 by Joshua Levine

Manuel Carrera proudly shows off a stingray he has sculpted in silver, encrusted with a natural geode that seems to grow out of it to form its wings. It's a bit on the florid side, but it's an impressive piece of workmanship. Carrera y Carrera has been doing this kind of thing in Madrid for 117 years, and it has made the Carrera family name renowned in Spain for intricately crafted jewelry and objects.

Manolo, the 63-year-old grandson of the founder, beams--at me but particularly at Maria Eugenia Giron (pronounced CHIron), who is standing next to me. She is a crisply elegant young woman with an engaging gap-toothed smile, and she looks oddly like a proud parent, which, in a way, she is. As chief executive of Carrera y Carrera, Giron has been Manuel Carrera's boss for the past three years--a move he willingly engineered. It was the smartest move he ever made, and he quite obviously adores her.

As well he should. When Giron and a group of investors took over Carrera y Carrera in a friendly management "buy-in," the company was stuck in its past. Its craftsmanship was exquisite but its design sensibility was more than a little old-fashioned. Carrera's traditional buyers loved the ornate, sculptural quality of its jewelry--a hallmark of the house and something that sets it apart from its competitors. But that market was getting smaller all the time. The company needed a makeover if its artisan tradition was to live on.

Enter Giron, a 37-year-old Madrid native with training as an industrial engineer and a Harvard MBA. Despite her technocrat background, Giron discovered she loved beautiful objects and had a tremendous respect for the artists who make them, even if she isn't one of them. "Harvard opened my mind to the fact that creativity could be organized and managed--that, in fact, creativity was a growth industry, and it needed all the talent it could get," she says.

That insight led Giron to Loewe SA, the luxury Spanish leather maker bought by LVMH in 1998. Loewe is where she learned that a well-managed brand could reconcile an apparent paradox: It could have a single, identifiable personality throughout the world and still manage to satisfy the widely disparate needs of different customers in different markets. Loewe is also where she met the colleague who would help her implement her ideas about how to manage them as chief executive.

British VC helps revamp Spanish tradition

In early 1999, Giron and Louis Urvois, her former boss and mentor at Loewe, approached 3i, a British venture capital partnership, to help them buy out most of the Carrera family's interest. Giron and Urvois took a 57 percent stake in Carrera y Carrera, to be financed partially by future profits, while 3i took around 30 percent. The Carrera family retained the remainder.

"When Maria Eugenia proposed the investment to us, it was obvious the job needed somebody young with a lot of energy," says Ignacio Cruz, a 3i partner. "It was not an easy job--everything had to be changed, from marketing to information systems to administration."

Since Giron took over, sales have doubled. Last year, retail sales climbed 31 percent to around $42 million, despite a distinct post-September 11 drop in the U.S. market--70 percent of all sales come from outside Spain. More important, more than half of Carrera's current volume comes from products introduced in the past two-and-a-half years.

"I love being CEO --you have the pleasure of solving these problems yourself," says Giron. "But you must be successful: That's what the people who work for you expect of you. You are achieving through others, and they have to have something to show for it."

What Giron has pulled off is a tricky balancing act that's actually a lot harder to do than it is to describe. Like other small European family concerns with deep artisan roots, Carrera y Carrera's value as a company and as a brand clearly lies in its heritage. But an incoming CEO can neither worship that past nor toss it away--particularly when that CEO comes from outside the company.

Moreover, any changes--even much-needed ones--that overturn hallowed traditions risk alienating the artisans who are the historical memory of the house. If they leave, with cause or without, the noble brand is little more than an empty shell. When Giron arrived, for instance, all of Carrera's employees worked from 7:30 in the morning to 3:30 in the afternoon--manufacturers' hours in Spain. That's the culture Carrera believed it belonged to. Unfortunately, that meant that when U.S. stores opened for business in the morning, all of Carrera was about to close for the day. Giron immediately moved 30 employees to later shifts, and some of them still resent it. "It sounds stupid, perhaps, but it's a key factor in changing the culture from manufacturing to marketing and making everybody think in terms of customer service," says Giron.

Giron imagined a revamped company from top to bottom, but always in conjunction with Carrera's executives and artisans. Changes were never mandated by fiat but always bubbled up from consensus. "Listening is not a weakness--it's the best thing you can do," she says. "Anyone can convince me that my idea is not the right one. When you become frightened and defensive, you become very rigid, and that never works."