If you were on a long road trip in a Ferrari and you noticed the handbrake was up, would you push it down?
This has become my favorite response to the common rebuttal to change: “we’ve always done it that way.”
Change management is hard. Familiarity breeds comfort and that’s hard to shake. But I’ve learned that it’s better to ask questions than challenge.
In private equity there’s always a transaction date, and on that date new leadership teams are frequently formed. Before suggesting change, you have to study the company’s history to understand what’s untouchable. One of my favorite examples of this comes from Hermes.
Hermès Hires (and Fires) Consultants
In the late 1970s, Hermès’ business was struggling. They had every ingredient of the brand we know today, but the world had turned away from what it represented. The counterculture rejected old-world elegance, and rivals like Dior and Saint Laurent were setting the new luxury standard.
As Robert Dumas neared the end of his tenure as CEO, Hermès brought in consultants. Their advice mirrored the era’s accepted wisdom: do what Gucci was doing. Close the atelier, outsource production, increase your number of products, lower your price points, and make your products more accessible.
The Acquired Podcast summarized it as follows: “The recommendation was to come in and destroy everything that makes you special and follow the playbook that everyone else is running.”
Hermès ignored it. Even under the added pressure of a leadership transition, they had the discipline to place long-term vision over trend. Today, Hermès has a corporate policy of no consultants.
For a moment in 2025, that discipline was worth more than an empire built on acquisitions: Hermès’ market cap briefly surpassed LVMH’s. A single, one-brand house edging out a conglomerate of 75 maisons, including Louis Vuitton, Dior, Tiffany & Co., Moët & Chandon, and Bulgari. LVMH has since regained the lead. But that moment says a lot about the value of knowing precisely why a company’s history made it successful.
Growth Requires Change
Hand craftsmanship, scarcity, and family control stayed untouchable. But as the company’s history demonstrates, everything else was fair game. Here are some select examples of the changes that scaled the company to what it is today.
Under Jean-Louis Dumas (1978-2006), revenue grew ~40x to $2B:
- Created the Birkin (1984), now the single most valuable product in luxury retail
- Launched e-commerce in the early 2000s years before most luxury houses would even consider selling online (industry consensus was that the internet cheapened exclusivity)
- Diversified into ready-to-wear, watchmaking, and adjacent craft houses
- Took the company public in 1993, funding growth without ceding control
When Jean-Louis retired in 2006, Patrick Thomas became the first non-family CEO in the company’s history. The fascinating part of this chapter is that in 2010, LVMH revealed it had secretly built a 17% stake in Hermès. The family responded by locking up roughly half the company’s shares for 20 years, and Thomas fought the battle publicly. By 2013, LVMH agreed to abandon the effort, and Axel Dumas stepped in as CEO.
Under Axel Dumas (2013-present), revenue grew from €4B to €16B+:
- Built a formal training center (2021) that graduates ~400 new leather artisans a year, scaling craftsmanship itself rather than outsourcing it
- Launched beauty as a new category
- Partnered with Apple to design the Apple Watch Hermès band, bringing the brand into wearable tech
The last bullet demonstrates that there can be exceptions. A Birkin takes roughly 20 hours of hand craftsmanship and is deliberately kept scarce. The Apple Watch Hermès band is a mass-produced product attached to hardware with a built-in expiration date. It’s a bet that the Hermès name is strong enough to survive a low price point and someone else’s manufacturing process without being cheapened.
Handbrake Revisited
It comes down to the old saw: no one cares what you know until they know that you care. Study the company. Communicate what you’re learning. Meet opposition with questions, not answers. Only once an organization agrees on what makes it great can you earn the credibility to influence what comes next.
Outside perspective lands more effectively this way. You will find handbrakes that can be addressed, but not without first gaining trust that only comes with insight.