Leadership in a Vertically Integrated Company

The world’s largest eyewear company, Luxottica, has many facets—from design and wholesale manufacturing to distribution and retail.

With a global wholesale network spanning 130 different countries; factories in Italy, China, Brazil, and the United States; ownership of premium brands such as Ray-Ban and Oakley; retail businesses such as Sunglass Hut and LensCrafters; a portfolio of licensed brands including Prada, Burberry, Giorgio Armani and Michael KORS; and the second-largest vision benefits provider, EyeMed, executive vice president and group general counsel Michael Boxer has a lot of areas to keep in focus. Located in New York, Boxer began at the Milan-based company as North American GC in 1993. In 2011, he took on global responsibility for Luxottica’s legal departments and has since pioneered several ways in which to navigate this multifaceted company. Here, Boxer discusses some of the unique challenges of a vertically integrated company and the strategies he and his team employ to tackle them.

Challenges

Responsiveness
Luxottica is an incredibly fast-moving company. One day we’re expanding a factory in China, the next day we’re signing a deal with Google or Intel in Silicon Valley to make smart eyewear. Because of the breadth and depth of the company, combined with our cultural diversity, we are constantly reevaluating projects and priorities to ensure we’re meeting global, divisional, and regional needs. Given the pace, we’ve found that responsiveness is the number one contributor to the department’s effectiveness. It’s something we strive for and evaluate ourselves on every day.

Managing legal complexity
The fact that we are vertically integrated with retail and health-care businesses makes our business far more complex. There are health-care regulations, antitrust, privacy issues, and more. Whether we are dealing with a US-managed vision care issue, a litigation matter in Brazil, or managing our contracts in Europe, decisions are being made in a lot of different places and at different levels of the organization. And we can’t possibly be in the room every time a decision that could have a legal risk is being made.

Meeting diverse stakeholder needs
Another big challenge is ensuring that legal concerns for all the different stakeholders in the company (and external stakeholders as well) are being addressed. It’s a tougher task in a vertically integrated company like ours. For example, an important project we’re managing for Sunglass Hut may have an impact on our wholesale sunglass business.

Strategies

Resource allocation
We’ve developed a consistent resource allocation model based on value and risk. Periodically, we take a step back and evaluate what quadrant work goes in: whether it’s of strategic significance to the company; work that isn’t strategic but still carries risk, such as a significant outsourcing project or material litigation; and lower value work, whether it’s a core function of the business, or non-core work that just has to be done.

Our model ensures that high-value work is done by the senior lawyers on the team and the low-value work is done by non-lawyers, automated, or transferred back to the business with the appropriate self-service tools and policies. It enables us to be responsive and it’s also great for attorney development and engagement. This is a model we use in our legal offices all over the world.

Legal decision-making
Resource allocation helps a great deal with managing complexity. But we can’t possibly deliver high-level service to all groups unless we help them make better legal and risk management decisions. We have set up processes in the form of training, awareness tools, and templates that enable businesspeople to make better decisions from a risk management standpoint. And we stay in front of them, engaging not just at a senior level, but at the midlevel because decisions that carry legal or compliance risk are more frequently made here.

Departmental organization
While Luxottica’s legal department is centralized, we have a significant presence in key regions around the world, giving our lawyers a better understanding of what’s important to our stakeholders. Organizational knowledge on a more refined level has made it easier for us to address everyone’s needs.

Knowledge management
We use the same technology system around the world that encompasses everything from document management to law firm billing. It’s a repository of everything we learn and know, and when your team is truly global, having access to all that knowledge at their fingertips is particularly valuable.

Hiring great people and building relationships
Finally, there’s the key to making sure all this works—our people. I’m involved with the recruiting of every lawyer we hire and making sure they’re happy. How do you know people are happy? One of the key measures is employee engagement, and we have some of the highest engagement scores in the company worldwide. And then it’s about building great relationships. We are privileged to work with an incredibly talented and diverse team of business people. We understand what’s important to them. That’s how we become the trusted advisor. It’s not just working hard and getting the contract done on time, but making sure you understand what they care about and integrate that into your legal approach.