netrashetty
Netra Shetty
Leadership Style at American Apparel : American Apparel (AMEX: APP) is a clothing manufacturer in the United States.[3] It is a vertically integrated clothing manufacturer, wholesaler, and retailer that also performs its own design, advertising, and marketing. It is best-known for making basic cotton knitwear such as T-shirts and underwear, but in recent years it has expanded—to include leggings, leotards, tank tops, vintage clothing, dresses, pants, denim, nail polish, bedding and accessories for men, women, children, babies and dogs.
Charney is known for his success as an entrepreneur and passion for simple clothing. [1][2][3] His "contrarian" leadership style, which he feels promotes creativity, has drawn extensive praise and criticism.[1][4][5] Charney has earned recognition in the media for management decisions to pay a fair wage and refusing to outsource manufacturing.[6][7] The Los Angeles Times named him as one of the Top 100 powerful people in Southern California and in 2009, he was nominated as a Time 100 finalist by Time magazine.[8][9]
American Apparel finds itself once again in a familiar place — sued again for sexual harassment and creating a hostile work environment, because of the vulnerability its CEO’s philosophy of sexual freedom in the workplace creates for the publicly held company.
In discussing a 2006 sexual harassment suit, founder, chairman and CEO Dov Charney expressed the belief that consensual sexual relationships in the workplace were appropriate: “I think it’s a First Amendment right to pursue one’s affection for another human being.”
Recently, Irene Morales, 20, sued Charney, 42, American Apparel, and its directors for about $250 million, alleging Charney forced her into sex acts when she was 18 and an employee. The company has accused Morales of extortion. A lawyer for the company dismissed the allegations, saying when Morales left the company and accepted severance, she signed a statement saying she had no claims against the company and agreed that any future claims would be addressed by confidential arbitration. A judge has halted Morales’ suit until March 25, pending a decision on whether it should go to arbitration or trial.
Notwithstanding the distinction of being dubbed “American Apparel’s chief lawsuit officer,” Charney is a complex figure. His website, filled with photos of him and provocative shots he took of the company’s young models, tells the story of his immigrant family, religion, creating the company as a teenager, philosophy on sexual freedom, and politics. Passionate about immigration reform, proud his clothing is “made in America,” he pays his 10,000 workers – well above garment industry rate.
Charney owns 51.8 percent of the company and the board has thus far apparently gone along with his philosophy of sexual freedom. However, the company is no longer on solid financial footing. Blame the recession or other factors, but it appears that sexy marketing isn’t selling American Apparel the way it did several years ago; stock prices have been dropping.
Dov Charney
Among the questions Dov Charney’s philosophy raises is whether there really can be consensual sex in a workplace if both parties aren’t equal in status, salary and intention?
Is the term a delusion if one of the parties is the CEO? For example, how can both parties freely accept responsibility for the consequences of a relationship when one party has power over the other’s salary, promotion, or keeping the job?
If tone at the top encourages workplace sexual expression, what are the constraints to protect employees? American Apparels’ ethics policy talks about “promoting ethical conduct, including the handling of actual or apparent conflicts of interest between personal and professional relationships.”
So who decides if a conflict of interest has occurred between personal and professional relationships and if harm was done in a fleeting or more sustained expression of sexual interest? What about harm to bystanders who just want to do their job and are made uncomfortable by sexual innuendo and graphic language?
If you were doing a cost/benefit analysis of sexual drama (which is an inevitable byproduct of a sexually charged workplace) would the benefits come out ahead if everyone affected got to weigh in?
In interviews, Charney has tied the importance of sexual energy to creative energy on which he says the fashion industry depends. No argument about the value of released endorphins.
Interesting to note that many leaders have championed endorphin highs to stimulate creativity. Among dozens of examples, they set aside areas for ping pong, volleyball, or fitness equipment, or hold events recognizing employee achievements – few, if any of which, have resulted in litigation and loss of company and CEO reputation.
Every leader gets to figure out if what she or he is doing is working and what to change (before a board answers that question for them). Charney enjoyed the reputation as a wunderkind. Now the company is in a different phase facing financial and strategic challenges, as well as another lawsuit about its culture.
The irony of sexual freedom in the workplace is that it is about power, not romance. It often ends up exploiting those most vulnerable – the way, for example, immigrants have often been treated in some workplaces; it also gives ammunition to those who, seeing where a company has made itself most vulnerable, move in for their own kill.
Strolling up the Bowery, Charney checks out every woman who walks by. Spotting a beguiling, bosomy girl in a tight American Apparel T-shirt, he smirks. "See--I'm keeping America beautiful!" In rare moments of weakness, he appears to be sensitive to some of the jabs he's taken in the media, but he is unashamed of his ongoing pursuit of models and, importantly, salespeople. He's recently come to the realization that one reason his stores--which, it should be noted, break their own records regularly--are not as successful as he'd like is that the makeup of the floor staff is just a bit off. "Our cast isn't quite right yet," he explains. "You know how Ian Schrager hires his staff at the hotels? He uses a casting company. Because that's what it is--casting! You can't have all Mary Anns on Gilligan's Island--you need Ginger!"
The makeup of AA's staff is a mad science that is hard to teach--or even explain. Right now, Charney feels there's no one here he can trust to do it, and so he's interviewing staff himself--hundreds of prospective workers a week. "I made a mistake with these stores," he says. "I didn't do it myself and it's wrong. So I've had to let people go and there's nothing I hate more than having to get rid of kids. It breaks their hearts. But you know what? It affects sales. Should garment workers at my factory suffer because we f-- up the casting?
"What I'm looking for is style--that's not something you can teach a person. You have it or you don't. Let's say one girl has an acne problem but good style, while another one is beautiful but has no style. I'm picking acne!"
The nexus of Dov Charney's T-shirt revolution is a trio of monolithic pink buildings just off Alameda Boulevard, in an industrial section of downtown Los Angeles that would cause your average tourist to roll up the windows and lock the doors. Over seven floors of the main building, Marty Bailey, Charney's VP of operations, monitors a frantic but efficient vertically integrated production that starts with massive rolls of fabric and ends with finished garments in the course of a few hours. Arriving on the scene in 2002, Bailey found a small company that didn't know how to be big. Sales were booming and Charney--who has a 50% partner (whom he declines to discuss at length) but manages American Apparel exactly as he sees fit--was running out of fingers to stick into a dike on the verge of collapse.
Charney admits he was in trouble. "I called up a guy I trust and asked, 'Who's the best out there at organizing a factory?' He said Marty. So I called him on a Saturday and said, 'Dude, my name's Dov and I need help.' He started Monday; that's the way I operate."
Bailey turned the American Apparel factory into the finely tuned machine it is today: 2,000 workers churning out a million garments a week, flexible enough to turn a late-night sketch into an actual garment for sale in stores within five days. How? Most prominently, Bailey organized the sewers into teams that can be adapted to create any of the garments in AA's line. They are self-policing and are paid based on their speed of production--hourly wages never dip below $8 and can go as high as $18 during particularly fecund periods. Within months, the factory went from 30,000 garments a day to 90,000. Where once there were 1,000 SKUs, today there are 10,000. "I don't think you'll find another shop in the world that does 10,000 SKUs on one floor," Bailey says.
Charney's designers will sketch on a napkin and fax it to L.A. "If we decide to have a new design in stores by the weekend, I can be shipping by Friday," says the VP of operations.
"I think if you're going to be a successful manufacturer in the U.S. you have to have quality, which we do, a focused market, which we do, and you have to turn product quickly--which we do," Bailey continues. "If we decide to have an entirely new design in stores by the weekend"--and Charney's roving designers have been known to sketch on a napkin and fax the drawing to Bailey--"if I have fabric in-house, I can be shipping by Friday."
Walking past his teams of sewers, most of them Mexican and nearly all wearing masks to avoid the inhalation of tiny cotton fibers, Bailey says that he can do $400 million in sales and 200 stores without expanding at all. He knows that Charney is a runaway freight train and that he has no choice but to hang on.
Charney is known for his success as an entrepreneur and passion for simple clothing. [1][2][3] His "contrarian" leadership style, which he feels promotes creativity, has drawn extensive praise and criticism.[1][4][5] Charney has earned recognition in the media for management decisions to pay a fair wage and refusing to outsource manufacturing.[6][7] The Los Angeles Times named him as one of the Top 100 powerful people in Southern California and in 2009, he was nominated as a Time 100 finalist by Time magazine.[8][9]
American Apparel finds itself once again in a familiar place — sued again for sexual harassment and creating a hostile work environment, because of the vulnerability its CEO’s philosophy of sexual freedom in the workplace creates for the publicly held company.
In discussing a 2006 sexual harassment suit, founder, chairman and CEO Dov Charney expressed the belief that consensual sexual relationships in the workplace were appropriate: “I think it’s a First Amendment right to pursue one’s affection for another human being.”
Recently, Irene Morales, 20, sued Charney, 42, American Apparel, and its directors for about $250 million, alleging Charney forced her into sex acts when she was 18 and an employee. The company has accused Morales of extortion. A lawyer for the company dismissed the allegations, saying when Morales left the company and accepted severance, she signed a statement saying she had no claims against the company and agreed that any future claims would be addressed by confidential arbitration. A judge has halted Morales’ suit until March 25, pending a decision on whether it should go to arbitration or trial.
Notwithstanding the distinction of being dubbed “American Apparel’s chief lawsuit officer,” Charney is a complex figure. His website, filled with photos of him and provocative shots he took of the company’s young models, tells the story of his immigrant family, religion, creating the company as a teenager, philosophy on sexual freedom, and politics. Passionate about immigration reform, proud his clothing is “made in America,” he pays his 10,000 workers – well above garment industry rate.
Charney owns 51.8 percent of the company and the board has thus far apparently gone along with his philosophy of sexual freedom. However, the company is no longer on solid financial footing. Blame the recession or other factors, but it appears that sexy marketing isn’t selling American Apparel the way it did several years ago; stock prices have been dropping.
Dov Charney
Among the questions Dov Charney’s philosophy raises is whether there really can be consensual sex in a workplace if both parties aren’t equal in status, salary and intention?
Is the term a delusion if one of the parties is the CEO? For example, how can both parties freely accept responsibility for the consequences of a relationship when one party has power over the other’s salary, promotion, or keeping the job?
If tone at the top encourages workplace sexual expression, what are the constraints to protect employees? American Apparels’ ethics policy talks about “promoting ethical conduct, including the handling of actual or apparent conflicts of interest between personal and professional relationships.”
So who decides if a conflict of interest has occurred between personal and professional relationships and if harm was done in a fleeting or more sustained expression of sexual interest? What about harm to bystanders who just want to do their job and are made uncomfortable by sexual innuendo and graphic language?
If you were doing a cost/benefit analysis of sexual drama (which is an inevitable byproduct of a sexually charged workplace) would the benefits come out ahead if everyone affected got to weigh in?
In interviews, Charney has tied the importance of sexual energy to creative energy on which he says the fashion industry depends. No argument about the value of released endorphins.
Interesting to note that many leaders have championed endorphin highs to stimulate creativity. Among dozens of examples, they set aside areas for ping pong, volleyball, or fitness equipment, or hold events recognizing employee achievements – few, if any of which, have resulted in litigation and loss of company and CEO reputation.
Every leader gets to figure out if what she or he is doing is working and what to change (before a board answers that question for them). Charney enjoyed the reputation as a wunderkind. Now the company is in a different phase facing financial and strategic challenges, as well as another lawsuit about its culture.
The irony of sexual freedom in the workplace is that it is about power, not romance. It often ends up exploiting those most vulnerable – the way, for example, immigrants have often been treated in some workplaces; it also gives ammunition to those who, seeing where a company has made itself most vulnerable, move in for their own kill.
Strolling up the Bowery, Charney checks out every woman who walks by. Spotting a beguiling, bosomy girl in a tight American Apparel T-shirt, he smirks. "See--I'm keeping America beautiful!" In rare moments of weakness, he appears to be sensitive to some of the jabs he's taken in the media, but he is unashamed of his ongoing pursuit of models and, importantly, salespeople. He's recently come to the realization that one reason his stores--which, it should be noted, break their own records regularly--are not as successful as he'd like is that the makeup of the floor staff is just a bit off. "Our cast isn't quite right yet," he explains. "You know how Ian Schrager hires his staff at the hotels? He uses a casting company. Because that's what it is--casting! You can't have all Mary Anns on Gilligan's Island--you need Ginger!"
The makeup of AA's staff is a mad science that is hard to teach--or even explain. Right now, Charney feels there's no one here he can trust to do it, and so he's interviewing staff himself--hundreds of prospective workers a week. "I made a mistake with these stores," he says. "I didn't do it myself and it's wrong. So I've had to let people go and there's nothing I hate more than having to get rid of kids. It breaks their hearts. But you know what? It affects sales. Should garment workers at my factory suffer because we f-- up the casting?
"What I'm looking for is style--that's not something you can teach a person. You have it or you don't. Let's say one girl has an acne problem but good style, while another one is beautiful but has no style. I'm picking acne!"
The nexus of Dov Charney's T-shirt revolution is a trio of monolithic pink buildings just off Alameda Boulevard, in an industrial section of downtown Los Angeles that would cause your average tourist to roll up the windows and lock the doors. Over seven floors of the main building, Marty Bailey, Charney's VP of operations, monitors a frantic but efficient vertically integrated production that starts with massive rolls of fabric and ends with finished garments in the course of a few hours. Arriving on the scene in 2002, Bailey found a small company that didn't know how to be big. Sales were booming and Charney--who has a 50% partner (whom he declines to discuss at length) but manages American Apparel exactly as he sees fit--was running out of fingers to stick into a dike on the verge of collapse.
Charney admits he was in trouble. "I called up a guy I trust and asked, 'Who's the best out there at organizing a factory?' He said Marty. So I called him on a Saturday and said, 'Dude, my name's Dov and I need help.' He started Monday; that's the way I operate."
Bailey turned the American Apparel factory into the finely tuned machine it is today: 2,000 workers churning out a million garments a week, flexible enough to turn a late-night sketch into an actual garment for sale in stores within five days. How? Most prominently, Bailey organized the sewers into teams that can be adapted to create any of the garments in AA's line. They are self-policing and are paid based on their speed of production--hourly wages never dip below $8 and can go as high as $18 during particularly fecund periods. Within months, the factory went from 30,000 garments a day to 90,000. Where once there were 1,000 SKUs, today there are 10,000. "I don't think you'll find another shop in the world that does 10,000 SKUs on one floor," Bailey says.
Charney's designers will sketch on a napkin and fax it to L.A. "If we decide to have a new design in stores by the weekend, I can be shipping by Friday," says the VP of operations.
"I think if you're going to be a successful manufacturer in the U.S. you have to have quality, which we do, a focused market, which we do, and you have to turn product quickly--which we do," Bailey continues. "If we decide to have an entirely new design in stores by the weekend"--and Charney's roving designers have been known to sketch on a napkin and fax the drawing to Bailey--"if I have fabric in-house, I can be shipping by Friday."
Walking past his teams of sewers, most of them Mexican and nearly all wearing masks to avoid the inhalation of tiny cotton fibers, Bailey says that he can do $400 million in sales and 200 stores without expanding at all. He knows that Charney is a runaway freight train and that he has no choice but to hang on.
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