The coming leadership crisis luxury isn’t ready for

I just had the pleasure and privilege of welcoming the next cohort of top executives at Pepperdine’s President and Key Executive Program and concluded the introduction module on extreme value creation. The experience reinforced how critical leadership has become for the future of luxury. Spending time in an environment where seasoned executives openly explore what it takes to create extreme value sharpened my own reflections on the state of leadership across the luxury industry. Luxury has always demanded exceptional leaders. The stakes are higher now than ever. Economic headwinds are testing profitability. New generations of clients are rewriting the rules of engagement. Technology is reshaping how stories are told and how service is delivered. Yet, many of the world’s most iconic brands still operate with leadership models designed for a slower, more predictable era. The troubling pattern in leadership promotion In my global work I see a troubling pattern. Many organizations continue to promote leaders primarily for operational excellence, or financial discipline. These skills remain essential, but they are no longer sufficient. Today’s luxury leaders must master something far more demanding. They must create extreme value for clients, employees, and shareholders at the same time. They must inspire creativity while maintaining strategic rigor. They must transform heritage into a living story that resonates with the next generation. To make matters worse, too often, leadership pipelines are thin. Succession plans are vague, or nonexistent. Boards assume that heritage and pricing power will carry a brand forward. But heritage is powerful only when it is continually kept relevant through action. Pricing power is fragile when client trust is eroding. Without visionary leadership, both can vanish quickly. My 4E luxury framework offers a blueprint. Emotion, engagement, experience, and exclusivity are not only client-facing principles. They must define how leaders think and act. A leader who cannot ignite emotion within the organization will struggle to create it for clients. Engagement starts with employees. Teams must feel a sense of purpose and belonging before they can create meaningful engagement externally. Experience must be reimagined not only for clients, but also for employees. Company cultures that celebrate innovation and reward curiosity will be the ones that consistently surprise and delight. Exclusivity in leadership means shaping a unique vision that cannot be replicated. It is the rare ability to set a brand apart in a market that often drifts into sameness. This kind of leadership requires more than charisma. It demands empathy and the courage to challenge conventions. It requires the discipline to invest in talent development and the humility to learn continuously. It is not about managing for the next quarter but about building an organization that will remain relevant for decades. The fragile landscape of client expectations Consider how fragile the current landscape has become. Luxury clients are younger, more diverse, and more informed than ever. They compare every experience not only with competitors in the same category, but also with the most seamless digital and physical interactions in their daily lives. If leadership teams fail to anticipate these expectations, the brand story will fall behind. Innovation is no longer a department. It is a mindset that must start at the top. Leaders who delegate innovation to a single team, or rely on consultants to spark creativity will not keep pace. Businesses must also anticipate the needs of the next generation of clients. At Équité, we invested significantly in generating proprietary insights and data on Gen Z almost a decade ago and started advising some of the top brands early on how to be relevant for the next generation. Yet even today, many leaders have still not made their organizations future-ready. In a time when speed is everything, faster and more decisive action is critical. This is why the next crisis in luxury will not be about product, or even about market cycles. It will be about leadership. Brands can invest in new collections, open flagship stores, or launch digital campaigns, but without leaders who can orchestrate extreme value creation across the entire ecosystem these efforts will not deliver lasting impact. Managers and boards must act now. Identify and nurture leaders and board members who can inspire through my 4E framework. Build succession plans focus on developing the capabilities that tomorrow demands. Invest in training throughout the organization that cultivates emotional intelligence, cultural agility, and the ability to create extraordinary client experiences. Encourage a mindset of relentless curiosity and the courage to challenge established norms. Luxury is defined by scarcity. Today, the scarcest resource is not craftsmanship or capital. It is the kind of leadership that can unlock extreme value and keep a brand ahead of cultural shifts. The brands that recognize this truth and develop their next generation of leaders will also lead the change. Are you ready?

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The coming leadership crisis luxury isn’t ready for