Riccardo Stefanelli, Entering and Being in an Entrepreneurial Family

Beyond the marriage, we've been together since before that. I've spent more than half my life with her, so it's a long relationship. Yes, we have two daughters, so it's a long-lasting story, so to speak.

I entered the company in 2006, but I believe that beyond my professional path, the central theme is respect—strong respect for the family you join, for the values, for what that family represented, represents, and will represent. It's a very particular message that goes beyond the industry in which it operates, because beyond family ties and acquired family ties, the definition of a family business is given by what binds that family together. So whoever enters and is acquired into that family must respect what creates those bonds.

In a family like ours, I must say, from what I've heard so far, the core values, principles, and ultimate goals are quite common. So why on tiptoe? Because this bond can be very strong or very fragile, and the only positive contribution I've tried to make—and if I were to recommend something to anyone, I'd recommend the same posture—is to respect those bonds. They're not just the bonds between fathers and sons, mothers and siblings, nephews and nieces. They're the bonds everyone shares. So don't overturn—be conscious of not disrupting the path that a family or a family-run company has traveled, while bringing additional value.

Another aspect is recognizing your own role within both the family and the company. I entered, let's say, in an apprentice role, and over time I took on progressive responsibilities. It became clear that I could fill the role of co-CEO.

I'd heard about this formula before—which we really like—with another CEO who comes from outside, an external manager, who also respects the family's values and, above all, respects the final destination where the company and the family want to go. So, great respect.

Yes, so the entire organization, the whole structure that the founder Brunello Cucinelli wanted to give the enterprise, the group, is projected toward the future. Everything is organized—not just the product, procedures, or daily work—everything is organized so the company has the opportunity to live on through time. And keeping this long-term vision in mind, the mechanisms are necessarily put in place for this to happen.

So what are the mechanisms that allow a company to live or a journey to continue and perpetuate itself over time? Building reserves—putting in place compensation mechanisms in case a manager leaves or someone loses the compass that the founder defined. And so Brunello himself set the first example by creating a Trust for the benefit of his daughters and granddaughters, a Trust governed by the agreement of the two daughters, alongside whom are three wise men—three independent managers of the group who, in case of succession, in case of the founder's passing, will help the family holding company be managed and make decisions of any kind that will guide the affairs of the company and the group.

A Trust. But then, going deeper into the company's organization, it's based on co-leadership and teamwork. So Brunello is president and creative director, and there are two CEOs: myself and an external manager, with very clear roles and very clear division of responsibilities. But every single top function—from the head of production through to commercial, marketing, style—each has a team, a top-level co-leadership, and a team of people who adopt those mechanisms that, at least on paper, ensure the longevity of the company.

And apparently it's a small thing, but this top-level co-leadership is a significant economic commitment. But again—what's the objective? Is it the quarterly income statement to present to investors, or is it the long-term profit and solidity, the natural growth that Brunello often defines as 'graceful'—without stress, without aggression? And yet it's quite remarkable—ten years ago we were doing 200-some million, and now we're at 1.1 billion more or less.

The CAGR was 12.4%, so compared to the 10% Brunello promised when the company went public in 2012, we've kept our promises.

No, no, no. Well, I was describing the co-leadership structure we've put in place, and it works. Obviously, within the company, as with the role of each individual family member, it's extremely important—I heard it earlier from Professor Marchetti, and I fully agree—to find each person's role. Then everyone is bound by the destination. When I speak of destination or community of intent, these aren't empty phrases or stereotypes. Let me give a concrete example: no one in our natural or acquired family would ever think of doing anything that could betray the principle that has guided the company from the beginning—placing the centrality of the human being above all, on which the company is built. The human being is not a means but an end.

No one would ever think to betray that, and that's what we must not break. That's what people who enter a family business shouldn't break. Some time ago, I heard Andrea Guerra say, when describing his experience at Prada, that his role is to interpret and try to continue the founders' vision, the founding imprinting, the original destination defined by the founder. That's the role.

By definition, we must project ourselves toward the future. Family businesses that sell after three years—we won't remember them. So by definition, we must look forward. To look forward means to open up. I've heard it often today. It means accepting that you shouldn't limit the company's future, from a management perspective, solely to the family circle. Regardless of capabilities, even if one of my daughters might be the greatest CEO of the group's future, it won't be enough. You have to realize that the family alone is not enough, especially—as I heard earlier—when you understand that the company, especially after reaching certain dimensions, becomes a common good. It no longer belongs just to the family; it becomes something that must be protected.

And this means opening the company's doors culturally. We did it through the stock exchange listing—a listing we're very satisfied with, one that's often disparaged or poorly viewed by many Italian entrepreneurs. They think it's a burden of responsibility and documentation. In reality, from our experience, we've found a great method, a great discipline—not because Brunello didn't have it before, but the proper pressure of the stock market sets the pace of growth and also of innovation. Because if you're driven to grow, it's right to define the growth rate you consider correct, but growth is something you must talk about. A company that doesn't grow struggles, and struggles to innovate.

So that pace—which a private equity fund, the stock exchange, openness, and dialogue provide—is a positive pace that must be managed according to the objectives you set. But that pace stimulates innovation, along with the contribution of external managers. We have on our board Guido Barilla, who for several generations now has been running his company together with his brothers and cousins, and his expression is often: 'You need a well-educated family and a prepared management.' We embrace that mix: a family educated to welcome innovation brought by others, and management prepared to help the family run the company while respecting what the company represents.

Yes, exactly. This was introduced some years ago, if I'm not wrong. It's working very well. We call this a 'generational pact'—it requires all top executives to build their own successor. At 60, you lose the leadership of that function and are replaced. It's like an airplane: the person on the left is the captain, the person on the right is the co-pilot. There's an exchange, and the co-pilot becomes the captain—obviously if they have the capability. But it's the responsibility of whoever has been captain up to that point to grow their co-pilot into the future captain.

The captain becomes 'co-senior'—we invented this formula, which is a kind of hands-on mentorship. Naturally, you lose 30% of your salary moving to the right seat. It's reduced because that leadership should be rewarded, but new blood and new motivation must come in. And it's working well. It just happened with our CFO, who's been with the company for nearly 30 years. He was the person who accompanied Brunello and the group through all the growth, all the history. Last year, he was replaced by a younger financial director, 46 years old, who's been with us for 10 years and spent those 10 years alongside the previous CFO, who is now co-senior of the group.

Everyone is co-something, by the way. The next speaker's intervention will be very relevant because it's exactly on this topic—I won't spoil it.

Well, there are tools that allow you to see whether that training and transition process is truly underway or not. For instance, there are even attempts at overtaking by those behind you. So it's up to top management to recognize these possible frictions or lack of handover. So far, I must say it's worked. I won't hide the fact that when things go well, it's a bit easier. We've been fortunate in having excellent results, so all of this works much better.

It's going well, yes. I can share what's public—the first quarter results are very good. We see a year in line with expectations. But beyond that, we believe there's a very strong interest, an increasingly powerful desire for Italian products. This also seems like an obvious statement, because we say it at all entrepreneur gatherings. But in reality, I struggle—at least in our world—to find comparable excellence in other European countries in so many sectors, especially in the high-end segment.

We must not lose this characteristic, which is an extremely important factor of attraction. We must not betray it. We must not nurture companies that drag this perception downward. Just today I saw an unfortunately negative figure on wage and salary growth levels in our country. The responsibility for this lies with entrepreneurs. I don't believe any of us can blame tax breaks or the interventions of successive governments. That's not correct. What's correct is to pursue these paths, and the new managerial generations are doing it—at least those I know in our sector. They're recognizing that certain trades and activities must be paid adequately, because they're precisely what gives value and attractiveness to what the whole world seeks: Italian products, from furniture to luxury goods, from hospitality to food.

And again, I'm repeating myself, perhaps it sounds stereotypical, but the recommendation is exactly this: the responsibility lies with the entrepreneur. I don't believe it's right for an entrepreneur to expect or ask someone else—the state or various kinds of interventions—to change things regarding the remuneration of artisans, workers, and people in general. We must come to terms with the fact that our value lies there. The question we often ask ourselves in the company isn't 'who will we sell to?' but 'who will produce our products?'—knowing that, perhaps we're being myopic, but the people producing our products will hardly be replaced by artificial intelligence. Maybe, yes, but I wouldn't want to buy a jacket at a certain price and know it was made by a robot.

Thank you very much.