Inventing the Beauty of the Future: L’Oréal’s Stéphane Lannuzel
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Today, we're airing an episode produced by our friends at the Modern CTO Podcast, who were kind enough to have me on recently as a guest. We talked about the rise of generative AI, what it means to be successful with technology, and some considerations for leaders to think about as they shepherd technology implementation efforts. Find the Modern CTO Podcast on Apple Podcast, Spotify, or wherever you get your podcast. How is AI helping one beauty company spot key trends?

Find out on today's episode. I'm Stefan Lenniesel from L'Oréal and you're listening to Me, Myself and AI. Welcome to Me, Myself and AI, a podcast on artificial intelligence and business. Each episode, we introduce you to someone innovating with AI. I'm Sam Ransbotham, professor of analytics at Boston College. I'm also the AI and business strategy guest editor at MIT Sloan Management Review.

And I'm Sherwin Kodabande, senior partner with BCG, and I co-lead BCG's AI practice in North America. Together, MIT SMR and BCG have been researching and publishing on AI for six years, interviewing hundreds of practitioners and surveying thousands of companies on what it takes to build and to deploy and scale AI capabilities and really transform the way organizations operate.

Today, Shervin and I are talking with Stéphane Lanouzel, Beauty Tech Program Director at L'Oréal. Stéphane, thanks for joining us. Welcome. Hi, Stéphane. Hello. I'm really happy to be talking with you today. Let's get started. Stéphane, you're at L'Oréal. Can you tell us about your current role? What does a Beauty Tech Program Director do? I'm in charge of the Beauty Tech Transformation, which is a global transformation of all functions and in all geographies.

And that adventure, BeautyTech, for me, started in 2019. It was the vision of our CEO at that time, that was Jean-Paul Agon, that was a visionary in the fact that tech will disrupt the beauty industry. And he really listened and talked with all the CEOs of the big tech companies, asking them the question on what tech will do to beauty, how tech will impact beauty.

And that's how we've started on that journey, saying that we want to be the champion, the leader of beauty tech, to be the number one. And because in L'Oréal, we are the leader of the beauty industry, so we decided that we wanted to be the leader of the beauty tech. And I started with that mission, being the beauty tech program director with only these two words, beauty and tech.

And basically, the simple motto of BeautyTech is to invent the beauty of the future while transforming into a company of the future. So what I'm doing every day is inventing the beauty of the future and transforming L'Oreal into a company of the future. What did you learn? How will technology affect beauty? What's going to be the big change?

They are two big impacts. They are the development of services for our consumers, but they are also how can we leverage technology to make the life of our employees easier and make them faster and more creative and more nimble.

Let's start first with consumers. L'Oréal has been around for more than 110 years and we produce 7 billion physical cosmetic products every year. But we are more and more into services and basically tech is playing a huge part in developing beauty services. We have been working a lot on helping consumers through services and through technology to be able to find the right product for them.

I take some example, we have developed some solution using AI and computer vision and augmented reality to be able to do virtual trial of makeup. Another example is a skin diagnostic to make some recommendation in terms of what are your top concerns and what are the products that you should apply in your daily routine. So this is how technology is really transforming beauty.

Because we want to develop a beauty that is more and more inclusive, a beauty that is more and more personalized. So you've got a varied background in banking and consulting and luxury and consumer goods. Can you tell us a little bit more about what got you to your current role and in particular, what got you interested in artificial intelligence and applying these technologies in your current role?

I've been in the beauty industry for 15 years now. After consulting, I've worked for many luxury or cosmetic goods companies. I decided to really be part of that industry and I joined the cosmetic industry first in Shiseido and then in L'Oréal. Technology was not that prominent when I graduated a long time ago. But what I've done throughout my career is really looking at how we can

make the organization evolve to be able to cope with new trends. And obviously, people play a major part into that, the way you add new skills in your organization, the way you structure the organization, and more and more technologies are also playing a key role. And I've always been very curious in looking at how technology was evolving and trying to see in my industry, in the beauty industry,

What could be the impact? What can I leverage? And I think that's why I'm the head of beauty tech, because I'm really into being curious at technology, being a strong believer on transformation and being a strong believer that organization and people change.

can adapt and can be even better if you give them the incentive and you upskill them in the use of technology. So I'm a very optimistic person and I've always seen tech as a force of good for the people, good for the planet and really very curious at embracing new technology. You mentioned upskilling. Do people at L'Oréal need to know anything about artificial intelligence?

Yes, they need to know. And not only the data scientists of the few people that are really a practitioner of artificial intelligence, but everybody. And we've created the Tech and Data University for L'Oréal that is targeting the 88,000 employees. Obviously, we have different programs, some programs more on acculturation and some programs that are really hardcore, I can say. And we do get that request from general management, you know,

Tell me about artificial intelligence and what I need to know. What I'm saying is that we don't need everybody at L'Oréal to know how to code in pythons or to select the right hyperparameters of models. But what they need to understand is

What we can do with artificial intelligence, what we can't do, what we can expect, what we can't expect, and how to deal with these solutions that are making some recommendations. We should use them and what are the limitations. And I think every manager needs to develop some knowledge on that. And I'll give you one example. We are developing some solutions to help the people in the labs to do the formulation of our products more precisely and

help them to predict the performance of the formula when you change one or a few ingredients. So that they don't have to formulate in the real world, make the test and get the results. They can do that digitally using the algorithms. And the type of reaction that you get when you start working on that

There are people that are saying that I'm not going to help you train or validate the models on a solution that is probably impact my job in the future. And there are people that are also saying that this is not working. I found one case where it's wrong, even if it's right in 99% of the case. So I'm not going to use it because I don't trust the system.

And these obviously are two extreme cases, but that's where the middle management and the general management has a strong role to play to help the democratization and to help people have the right interaction with the solutions that are powered by artificial intelligence that we develop.

In some of the research that Shervin and I are currently working on, this idea and what you're describing is how you would work with a coworker, not really how you'd work with a technology. I think a theme that's starting to emerge is that

Just like it's true that I've made a mistake or two in my past. I know that's hard for everyone to believe, but I'm glad that my colleagues didn't immediately throw me out and say, oh, you're useless. You're pointless. Why would I ever work with you again? And what you just said there was that same sort of perspective that we have. We have an expectation of a technology that we don't necessarily have of people. But it seems like people are shifting more to think about a team being composed of humans and of machines.

I fully agree. And I can tell you that in all the different solutions that we have developed with AI in them, I've always underestimated that aspect. But people really still see that as a technology and not as a help to achieve some tasks. And it takes a lot of convincing, a lot of explanation. Do you have any examples of AI projects or products that are being well received at L'Oreal?

We are developing a solution to detect beauty trends. It's called TrendSpotter. When you look at what is happening in the academic world, the research world, the macro influencer worlds, we are reading the different posts that they make on social media, reading some papers.

getting some ideas and seeing some trends emerging on ingredients and on the routine. So that's the initial seeds of a new trend that is emerging. And then you are looking at how these trends are then being amplified by, let's say, the general population.

So without revealing all the secret, is listening on these different groups across different geographies in Asia, in the U.S., in Europe, that you see some trends emerging? Sign me up. I mean, where do I, can I get access to it? I certainly need all the help I can get in that department. I like the idea there, though, because obviously that can help.

aggregate a ton of information from lots of different sources and let you pick up on things early. Cause I'm guessing you face a time crunch too, because to go from a idea for a product to a product isn't an instantaneous thing. And so the more lead time that you can get on when those products are coming, the greater you're likely to have them on the shelves when someone comes in. How does that process work? How do all those pieces come together?

Yeah, when we were working on that transponder solution, we were really not starting from the technology and the idea, but starting from what you said, which is what is the usage? You know, what is the usage of knowing a trend?

And basically, what we realized, there was one use, the one you mentioned, which is, okay, how can we identify a trend that will then translate into a product that will be launched, as you rightly say, in 12 to 18 months? So basically, there are these needs where we need early on to be able to detect some early stage, like I said, trends. But there was another use that we discovered. You can also use a new trend,

to be able to activate part of your existing portfolio, meaning that you see a trend popping and we do have a quite wide range of products.

So there are probably products that are corresponding to that trend. So then you will work on, okay, what can I do in terms of media activation to these products to be able to answer the trend? So what you can see is trends, they have different horizons. And depending on the horizon, then you can choose what you do. And that's what you discover when you do a proper user research.

to understand their need. And that was a new expertise for us that we have acquired to make sure that in all the solutions and services that we develop, UX is really at the center of it. And that's some skills that we have developed and internalized

Basically, we were doing consumer research. We were doing some research on the design of the packaging. But we are doing exactly the same work with different specialists on the digital services or solutions that we develop. And it's really key to develop services that make an impact for the consumers. That's fantastic. Sam, do you want to move to five questions?

We have a segment where we ask you a series of rapid fire questions. So just say the first thing that comes to the top of your mind. What's been your proudest moment with AI so far?

It's always difficult to pick one. But top of my mind, I think it's when we've launched a solution that is helping to do a quick analysis of reviews and ratings and really to see how people can now leverage what consumers are saying on our products and really leveraging that information at scale throughout the world, throughout the category. So it's really...

For them, it was mind-blowing to get access to that information at that scale. What worries you about artificial intelligence? Always the same subject, which is about bias. Bias that we don't see, that creeps in. So what's your favorite activity that does not involve technology, that has no technology? Science.

On the personal side or the professional side? Sure, personal side, yeah. So I would say running because this is my favorite activity, but it doesn't qualify to not involving technology because I use a watch and then I track my performance using technology. I think that's a common trend that everyone finds that whatever they're doing that involves no technology actually does involve technology. In the end, yes. So what was the first career that you wanted as a child? What did you want to be when you grow up?

I graduated as a civil engineer and I wanted to build bridges. So that's what I started to do at the very beginning of my career, but I quickly moved away from it and work in, as you mentioned earlier, in the banking industry doing project finance for infrastructure projects. What's your greatest wish for AI in the future? I think it's really helping us

to improve the world in which we live and to help solve the climate issue that we face. And I think, you know, I'm a strong believer that only technology will help us find solutions to face this difficult situation in which we are. Sounds good. Stefan, thanks for a great discussion. We really enjoyed talking with you. Thanks. Join us next time when Sherv and I speak with Teddy Bukele, Chief Technology Officer of Land O'Lakes.

Thanks for listening to Me, Myself, and AI. We believe, like you, that the conversation about AI implementation doesn't start and stop with this podcast. That's why we've created a group on LinkedIn specifically for listeners like you. It's called AI for Leaders. And if you join us, you can chat with show creators and hosts, ask your own questions, share your insights,

and gain access to valuable resources about AI implementation from MIT SMR and BCG, you can access it by visiting mitsmr.com forward slash AI for Leaders. We'll put that link in the show notes and we hope to see you there.