“CHANEL’s Next-Generation Algorithm”—A Management Model for Luxury Companies Integrating Humans, Craft, Customers, History, Creation, and the Environment (Part 5) (Chapter 4: Organization and Algorithms)

Chapter 4: Organization and Algorithms

Section 1: Human Capital

CHANEL’s corporate value cannot be explained by products, brand, boutiques, and capital alone.

There are people who design jackets.

There are people who embroider.

There are people who assemble watches.

There are people who create fragrances.

There are people who face customers in boutiques.

There are people who perform repairs.

And there are people who move these different specialized capabilities as one Maison.

It is humans who actually drive the company called CHANEL.

Therefore, for the next-generation CHANEL, human capital is neither the number of employees nor labor costs.

It is human ability, experience, judgment, relationships, and learning accumulated into corporate capability over time.

—

Humans are both Cost and Capital

In accounting, labor costs are treated as expenses.

Cost management is necessary for corporate management.

However, if you view humans at CHANEL only as a cost, you lose the essence.

Skilled artisans.

Creative Team.

Client Advisors.

Perfumers.

Watch technicians.

Researchers.

Executives.

The knowledge and judgment they possess create future value.

In other words, humans have an aspect of

Current Cost

while simultaneously being

Future Capability

Human capital management means looking at these two things simultaneously.

—

Looking at ability, not headcount

Increasing the number of employees does not mean increasing human capital.

What is important is:

What are people capable of doing?

What capabilities are accumulated within the company?

Can that be passed on to the next generation?

That is what matters.

At CHANEL, brand-specific knowledge is particularly important.

The ability to see materials.

The ability to understand products.

The ability to relate to customers.

The ability to judge what is CHANEL-like.

These capabilities cannot necessarily be purchased directly from the general labor market.

—

General Skills and Maison-specific Skills

There are two types of human ability.

General skills that can be used at any company.

And Maison-specific skills accumulated within CHANEL.

For example, even if someone with excellent sales ability joins the company, it takes time to understand CHANEL’s products, history, customers, and service culture.

The same applies to artisans.

In addition to the technique itself, they must understand the quality required by the Maison with their own bodies.

Therefore, there are parts of human capital that can only be formed within the company.

—

Time turns into capital

Human ability is not formed instantly.

Work for one year.

Experience.

Fail.

Learn.

Work for 10 years.

Teach juniors.

That is where time is converted into skill.

In other words, at the foundation of human capital is the conversion of

Human Time → Experience → Judgment → Capability

The longer a company has existed, like CHANEL, the greater the accumulation of this time capital.

—

Skill is not the amount of knowledge

Memorizing manuals.

Knowing product information.

If that were all, it would be easy to digitize.

However, skilled experts have tacit knowledge such as:

Feeling subtle differences.

Responding to exceptions.

Judging how much quality to tolerate.

Understanding the unspoken needs of customers.

This tacit knowledge is an important part of human capital.

—

From Knowledge to Judgment

In the AI era, access to knowledge becomes easy.

Product information.

Past cases.

Translation.

Anyone can acquire these in a short time.

Then, the difference between humans shifts from

what they know

to

how they judge that information.

In the next-generation CHANEL’s human capital, Judgment Capital will become more important than Knowledge Capital.

—

Abilities that AI lowers in value, and abilities it raises

Routine information retrieval.

Document creation.

Basic analysis.

There are jobs whose value is relatively lowered by AI.

On the other hand, the value of

Creative Judgment,

Craft Skill,

Human Relationship,

Responsibility,

and Contextual Decision

may relatively increase.

Therefore, introducing AI is not just simple labor saving, but also a redesign of the human capital portfolio.

—

From Automation to Reallocation

Work that took an hour now takes 10 minutes with AI.

Companies have two directions here.

Reduce people.

Or, shift the remaining 50 minutes to higher-value work.

In a Luxury Maison like CHANEL, the latter is important.

Dialogue with customers.

Product understanding.

Creation.

Skill inheritance.

Return human time to these tasks.

—

Returning Saved Time to Human Capital

Convert productivity improvements from AI into

Saved Time → Human Development.

If this can be done, AI investment and human capital investment do not conflict.

Rather, AI accelerates Human Capital formation.

It is not about reducing humans through technology, but increasing high-value human time.

—

Development over recruitment

There is a limit to trying to obtain all necessary capabilities through external recruitment.

In particular, Craft, Luxury Service, and Brand Knowledge require long development times.

Therefore, in CHANEL’s human capital strategy, not only Recruitment but also Development becomes central.

—

Hiring people is different from hiring capabilities

Even if you hire someone, they do not possess CHANEL-specific capabilities from the first day.

Capabilities are only accumulated after the company provides Training, Mentoring, and Experience.

Not just the recruitment budget, but the development architecture becomes important.

—

Learning Time

One of the most important investments in human capital is giving time to learn.

Stopping work to train.

In the short term, productivity drops.

But in the long term, capability increases.

Therefore, do not treat Learning Time as mere non-working time.

Learning Time is Investment Time.

—

Skill inheritance

At CHANEL, skill inheritance from experts to the young is particularly important.

However, the goal is not to copy skills one-to-one.

The young learn the basics, understand them, and apply them to new materials and techniques.

As a result, the skill itself evolves.

—

Regeneration, not Preservation

Just preserving human capital is insufficient.

Repeating the same technique forever.

That cannot respond to environmental changes.

What is needed is Inheritance → Learning → Innovation.

Updating while inheriting skills.

This can be thought of as Human Capital Regeneration.

—

Redefining the role of veterans

Do not evaluate experts only as people who work the fastest and most.

They also train the young.

They judge difficult cases.

They preserve the company’s tacit knowledge.

These roles are also significant.

In other words, the value of Senior Talent includes Production Value + Transmission Value.

—

Evaluating those who teach

In many companies, those who produce results themselves are more easily evaluated.

However, in companies where skill inheritance is necessary, the ability to develop others must also be evaluated.

If one Master trains 10 people, corporate capability expands.

—

Compound interest of Human Capital

Train one person.

That person grows.

They train the next person.

Then, compound accumulation occurs in human capital.

Learn → Perform → Teach → Multiply.

The longer the management, the greater this Compounding Effect becomes.

—

Capital outflow called turnover

On the other hand, if people leave, some knowledge and relationships are lost from the company.

Therefore, Retention is also important.

However, it does not mean the turnover rate should be zero.

New knowledge is also born when new talent enters.

What is important is that necessary capabilities do not suddenly disappear from the company.

—

Continuity over Retention

Place the goal of human capital strategy not on keeping everyone forever, but on continuing Critical Capability.

Even if people move, appropriately inherit skills, knowledge, and relationships.

—

Key-person Risk

Only one person can do it.

Only one person knows it.

This is a major corporate risk.

Specific artisans.

Specific advisors.

Specific technicians.

An architecture that does not rely entirely on individuals for important capabilities is necessary.

—

Do not erase individuality

However, if you standardize too much, even the individuality of excellent humans will be lost.

What is needed is to separate the basics that should be reproduced from the creation and judgment that should be left to the individual.

Standardize what must continue.

Preserve what should remain human.

—

Institutional Memory

Ensure the company does not lose learning even if people change.

Archive.

Training.

Knowledge Base.

Repair Data.

AI.

Convert some knowledge into Institutional Memory through these.

—

AI and Institutional Memory

AI has great value as a memory aid rather than a substitute for human capital.

Past products.

Techniques.

Repair cases.

Customer service.

Reach necessary information immediately.

Then, humans can shift the time they used for memory retrieval to Judgment.

—

Tacit Knowledge remains

However, do not think that everything can be saved to AI.

Tactile sensation.

Intuition.

Relationships.

Context of the field.

There are parts of Tacit Knowledge that can only be inherited through practice.

Therefore, Digital Memory × Human Apprenticeship is necessary.

—

Client Advisors are also human capital

Craft is not the only special skill.

There is also expertise in Luxury Clienteling.

When to speak.
When to be silent.

What to propose.

What not to recommend.

Long-term customer relationships require high-level Human Judgment.

—

Connecting Relationship Capital to the company

An excellent advisor has a relationship with a customer for 20 years.

This is an important asset.

However, if the relationship is closed only to the individual, it is lost upon retirement.

Therefore, connect Personal Relationship and Institutional Continuity.

—

Do not over-digitize human relationships

On the other hand, it does not mean you should write everything about customer relationships into CRM.

Privacy.

Discretion.

There is a human margin.

Inherit only the information necessary as a company.

Moderation is required for both human capital and customer data.

—

Creative Human Capital

At CHANEL, the human capital of the Creative Team is also special.

Creativity does not increase linearly just through training.

However, you can enhance Creative Potential through environments such as:

Access to the Archive.

High-quality materials.

Collaboration with excellent artisans.

Time for trial and error.

—

Creativity belongs to individuals, capability belongs to the system

Creativity itself resides in individuals.

However, whether that creativity can be converted into a high-level product is determined by the corporate system.

Therefore, human capital strategy handles not only Talent Acquisition but also Talent × Environment × Collaboration.

—

Connecting humans to each other

Even if you gather many excellent people, if the organization is divided, value will not be fully realized.

Creative.

Craft.

Retail.

Technology.

A relationship where they can learn from each other is necessary.

Human capital is not the sum of individual abilities.

—

Human Network Capital

Rather, corporate capability is formed by Individual Capability × Relationship Quality.

Different experts connect.

Knowledge moves.

Solve problems jointly.

This Human Network itself is capital.

—

Silos trap human capital

There is excellent talent.

But information does not move between departments.

Then the company as a whole cannot use the capability.

Organization Design is essential for human capital management.

—

Collaboration without committee dilution

However, it is not necessary for everyone to decide everything.

Excessive consensus dilutes Creative Decision.

What is needed is to clarify who decides and who to learn from.

Separate Collaboration and Decision Rights.

—

Psychological Safety

For humans to learn, an environment where they can say

“I don’t know,”

“I failed,”

or “I have a different opinion”

is necessary.

Precisely because the culture of seeking perfection is strong in Luxury, a structure where one can learn from failure internally is important.

—

Behind perfection is trial and error

Products presented to customers require a high degree of perfection.

However, in the preliminary stages, we test, fail, and correct.

Secure this Trial Space within the organization.

Innovation requires Failure Tolerance.

—

Human Capital and Diversity

Innovation does not automatically arise just because there are different people.

However, with only homogeneous people, oversights and homogenization are likely.

Body.

Culture.

Generation.

Work history.

Different experiences enter organizational learning.

The diversity handled in Section 4 relates to this breadth of human capital.

—

Representation is not enough

The composition of numbers is diverse.

But they cannot influence decision-making.

Then Human Capital is not being fully utilized.

What is important is to advance from

Diversity of Presence → Diversity of Voice → Diversity of Influence.

—

Human Capital and Leadership

Even if people have capabilities, if Leadership does not let them use them, it will not become corporate capability.

Who to train.

Where to place them.

Which work to hand over to AI.

What to have them spend time on.

Human capital strategy is management itself.

—

Talent placement is Capital Allocation

Just like where to invest funds, where to place human time is also Capital Allocation.

Using excellent people for routine tasks.

This is low-efficiency use of human capital.

—

Best use of human time

In the next-generation CHANEL, the question

“What should humans spend time on?”

becomes important.

Place this question before what AI can do.

—

Work that should be returned to humans

Creative Judgment.

Craft.

Deep dialogue with customers.

Talent development.

Leadership.

Complex exception judgment.

Concentrate Human Time in these areas.

—

Human Capital and Well-being

Using human ability to the maximum is different from using it up.

Long working hours.

Chronic fatigue.

Excessive emotional labor.

Even if output increases in the short term, it consumes long-term Human Capital.

—

Human Capital can depreciate

Humans also have depreciation.

Exhaustion.

Burnout.

Obsolescence of skills.

Lack of learning.

Companies need to not only use human capital but also maintain and update it.

—

Regenerative Human Capital

Not “Work → Ability decreases,” but

“Experience increases by working, ability increases by learning, and the organization as a whole increases by inheriting to others.”

Aim for Human Capital Regeneration.

—
Rest is also Capability Maintenance
Machines also need maintenance.

Humans also need it.

If you view rest only as non-productive time, you impair long-term capability.

In a Human-Centered Company, think about Sustainable Performance.

—

Do not make Client-centered and Employee-centered conflict

Provide the best service to customers.

Exhausting employees without limit for that purpose.

This is not sustainable.

Excellent Employee Experience supports excellent Client Experience.

—

Employee → Client

Employees learn.

They are respected.

There is necessary technology.

There is appropriate discretion.

As a result, they can provide high value to customers.

In other words, Employee Capability → Client Value.

—

From customer value to reinvestment

Customers purchase products.

Profit is born.

Return that profit to Human Capital.

Development.

Work environment.

Technology.

Then Client Value increases further.

A cycle is also formed in human capital.

—

Human Capital Loop

Minimized, it becomes

Hire → Develop → Empower → Create Value → Learn → Teach → Reinvest → Develop Further.

It is not a straight line of hiring once and using.

—

Do not own human capital

There is the most important boundary here.

Even if you use the word “human capital,” humans themselves are not corporate assets.

People can leave the company.

They have will.

They have lives.

What a company can own is not humans, but the environment and relationships where humans want to demonstrate their abilities.

—

From Human Capital to Human Relationship Capital

Therefore, deep in human capital management, there is not only salary and training, but also Trust, Respect, and Culture.

Without these, even if you have people with ability, they will not be fully demonstrated.

—

Do not manipulate Engagement

Make employees like the company more.

If you design Employee Engagement with only that as the goal, you again make humans an object of optimization.

What is important is to prepare conditions where working people can rationally demonstrate their abilities.

—

Agency

Just as customers needed Agency, employees also need Agency.

Can judge for themselves.

Can speak their opinions.

Can use expertise.

Can override AI Recommendation.

Humans do not become mere Execution Layers.

—

Employee surveillance by AI

AI can also analyze employee behavior in detail.

Processing time.

Conversation.

Customer service.

However, if you monitor everything, you may lose Trust.

Human-Centered AI also needs to protect Employee Privacy.

—

Capability Support, not Productivity Surveillance

Place the purpose of AI introduction not on managing employees by the second, but on enabling employees to do better work.

It is the same principle as Customer AI.

—

Measure output, preserve humanity

Evaluate results.

But do not measure every move of a human.

Especially Creative and Relationship Work are incompatible with detailed surveillance.

—

Human capital indicators

There are indicators that should be looked at as management.

Skill retention.

Development.

Turnover.

Leadership Pipeline.

Artisan inheritance.

Employee Experience.

However, do not compress them excessively into one Human Capital Score.

—

Numbers inform, people decide

Grasp the human state through Data.

However, do not fix

“This person is Low Potential”

with only an Algorithm.

Humans have growth and change.

As with customers, Past Performance ≠ Future Potential.

—
Potential
The essence of Human Capital is not just current ability.
What can they learn from now on?
Can they move to a new role?
Can they train others?
Look at future ability as well.
—

Do not over-predict Potential

Choose High Potential Employees with AI.

It is convenient.

However, there is a possibility of fixing the bias of past evaluations into the future.

It is necessary to leave development opportunities themselves wide open.

—

Talent Discovery

There are unused abilities within the company.

Retail experience holders are strong in Technology.

Artisans have educational ability.

AI can be a help in discovering Skill Inventory.

This can be used for Opportunity Matching, not surveillance.

—

Internal Mobility

Do not trap human ability in fixed job types.

Learn.

Transfer.

Challenge new work.

Through this, Employee Potential can be reused within the company.

—

Career Architecture

If you work at CHANEL for a long time, it is important to see what capabilities you can acquire next and what paths exist.

Human Capital Investment also includes Career Path.

—

Path of specialists

Not everyone needs to become a Manager.

Excellent artisans.

Technicians.

Experts.

Have a path to be evaluated while deepening expertise.

This is especially important for Luxury companies.

—

Do not measure value only by Managerial Promotion

Make the best artisan a Manager.

As a result, they leave Craft.

It is not necessarily optimal.

Evaluate specialists highly as specialists.

Multi-line the Human Capital Architecture.

—

Specialist Capital

Recognize extremely high-level expertise itself as a corporate asset.

Creative.

Craft.

Science.

Technology.

Clienteling.

Each has different Career Excellence.

—

Human Capital after 2026

In an era where AI is rapidly advancing, Job Description itself changes.

The skills needed today are not necessarily the same 10 years from now.

Therefore, do not design talent strategy only by “number of job types currently needed.”

—

Learning Capability becomes core capital

One of the most important abilities will be “being able to relearn.”

AI Tool.

New materials.

New customer behavior.

Environmental regulations.

The Learning Velocity of the entire company turns into competitiveness.

—

Learning Organization

Not only individuals but also the organization learns.

Insights from a certain boutique.

Improvements in a certain workshop.

Failure of a certain AI introduction.

Share with the whole company.

Turn human capital into Organization Intelligence.

—

Humans learn, and the company learns

Here, human capital expands one step from individual ability.

Human Learning → Shared Knowledge → Organizational Capability.

Connect one person’s experience to the learning of the entire company.

—

The greatest human capital for CHANEL

Ultimately, the most important thing for CHANEL is not “how many excellent people we have.”

Even if generations change, can we continue to make CHANEL-like judgments while training excellent talent, connecting them to each other, inheriting capabilities, and incorporating new technology?

That is the regenerative ability.

—

Human Capital as Regenerative System

View human capital not just as Stock but as a System.

Current Skill Stock.

New talent.

Learning.

Knowledge Transfer.

AI Support.

Leadership.

These circulate.

There, corporate capability continues to be updated.

—

Conclusion of Section 1

CHANEL’s human capital is neither the number of employees nor labor costs.

Ability to create.

Ability to make.

Ability to understand customers.

Ability to judge.

Ability to teach.

Ability to relearn.

And the ability to connect different humans to each other.

These are capabilities accumulated within the company over time.

When the next-generation CHANEL introduces AI, what is important is not how many humans can be reduced.

Where to reinvest the time freed by AI as humans.

Place the center of human capital strategy there.

Automate routine processing.

But do not hollow out human judgment.

Save knowledge to AI.

But do not reduce physical knowledge and human relationships to a database.

Utilize experts.

But do not use them up; have them train the next generation.

Think of talent as a corporate asset.

But do not treat humans themselves as possessions.

By protecting this boundary, a long-term cycle of

Human Time → Learning → Capability → Client / Product Value → Profit → Reinvestment → Greater Human Capability

is established.

CHANEL’s next-generation competitiveness will not be born from becoming the company with the most AI.

Becoming a Maison that can convert human time, skills, judgment, and relationships into the longest, deepest, and most regenerative corporate capability.

That is the next-generation algorithm for human capital.

And to convert this Human Capital into actual organizational management, it is important what kind of leader who views it this way stands at the top of the company.

In the next section, we will think about the connection between humans, organization, and long-term management from the position of CHANEL’s Global CEO.

Section 2: Leena Nair

The meaning of deciphering a manager named Leena Nair is not to heroize one person. It is to see how far human capital, corporate culture, and long-term value can be implemented into the management core of a Luxury Maison.

Section 2: Leena Nair

When thinking about CHANEL’s next-generation management, the existence of Leena Nair is important.

She assumed the position of Global CEO in January 2022. CHANEL itself positions the 2022 Global CEO appointment as an important personnel decision in management.

What should be noted is not simply that a female CEO was born.

It is that the center of her previous career was not in product development or Luxury Brand Management, but in people and organization.

If you read this personnel decision as a corporate structure, you can see that in the 2020s, CHANEL has advanced to a stage where it treats not only creation, products, and finance, but also Human Capital itself as a variable at the core of management.

—

From HR to CEO

For a long time in companies, the HR department has been perceived as a Support Function.

Make products.

Sell.

Generate profit.

HR supports those activities.

However, when AI, human capital, gender, skill inheritance, work styles, and organizational culture become competitiveness itself, this relationship changes.

HR does not just support the business.

It becomes a function that designs what kind of human organization can generate future corporate value.

Nair’s appointment as CEO symbolically shows this change.

—

Human Capital at the center of management

CHANEL currently positions itself as an “independent company that believes in the freedom of creation and nurtures human potential,” and regarding the working environment, it upholds ideas of time for long-term growth, achievement of both individuals and groups, and humanity and diversity.

The structure of human capital seen in the previous section appears here as it is.

It is not a straight line of hiring humans, making them work, and evaluating them.

It is a cycle of Potential → Development → Contribution → Collaboration → Learning → Greater Potential.

View humans not only from “what they can do now” but from “what they can generate in the future.”

This is compatible with Luxury companies.

This is because Craft, Clienteling, and Leadership cannot be formed in a short period.

—

“Human-centered” is not just kindness

The term Human-Centered Management is sometimes reduced to talk of welfare and employee satisfaction.

But as management, it is more rigorous.

Create conditions where humans can demonstrate high ability over a long period.

Learn.

Judge.

Collaborate.

Create.

Train the next humans.

These are ultimately converted into Product, Client Experience, Brand, and Profit.

Therefore, it is necessary to design the connection of Human Value → Enterprise Value.

—

Even if you place humans at the center, do not deny results

Human-Centered does not mean not evaluating Performance.

In CHANEL’s recruitment and career information, the idea of aiming for fair and competitive compensation while considering the impact of both individuals and groups is shown.
What is important is not to make it an either-or choice of “humans or results.”
Connect Human Development × Performance.

Results are born because you nurture ability.

Reinvest resources obtained from results into humans.

This cycle makes long-term companies strong.

—

CHANEL, a special organization

What Nair leads is not a simple single-business company.

Fashion.

Fragrance & Beauty.

Watches & Fine Jewellery.

Boutiques.

Craft.

Maisons d’art.

Supply Chain.

Technology.

Sustainability.

Each has different time, expertise, and culture.

It is not necessary to unify these into one management method.

Rather, what is needed is to connect them as one Maison while maintaining differences.

—

The CEO does not create everything

The CEO does not need to substitute CHANEL’s Creative Direction.

The CEO does not need to decide Craft.

There are experts in specialized fields.

The CEO’s important role is to share the long-term direction as a whole company while preparing conditions where each can demonstrate their ability.

Here, Leadership approaches Architecture rather than Control.

—

Relationship with Matthieu Blazy

This structure is also expressed in Matthieu Blazy’s appointment as Fashion Artistic Director.

CHANEL positions Blazy as a person who develops the Maison’s codes and Heritage in a new direction through continuous dialogue with the Studio, Ateliers, and Maisons d’art. Nair and Global Executive Chairman Alain Wertheimer also state that his creativity will form CHANEL’s next chapter.

What is important here is not a simple top-down relationship where the CEO manages the Creative Director.

It is connecting different authority systems of Management × Creation × Craft.

—

Freedom of creation and corporate management

In a Luxury Maison, if you only pursue management efficiency, creation may weaken.

Conversely, if you only prioritize creation, you cannot operate a huge company sustainably.

Therefore, the CEO has the difficult role of not managing creation too much, while simultaneously creating a corporate foundation where creation can continue.

The “freedom of creation” that CHANEL upholds is not laissez-faire.

It is only established by having the capital, talent, workshops, and organization that can maintain freedom for a long time.

—

From 2022 to 2026

Looking at after Nair’s appointment, CHANEL has not just focused on human capital.

Creative Investment.

Boutique Network.

Craftsmanship.

Supply Chain.

Sustainability.

Technology.
It continues long-term investment in multiple areas.
In 2025, while recording sales of 19.3 billion dollars and operating profit of 4.712 billion dollars, it implemented brand-related investment of 2.395 billion dollars and capital investment of 1.449 billion dollars. Furthermore, it continues to invest in the Creative Ecosystem, such as the acquisition of long-time suppliers.
What can be seen from this is not a CEO who only looks at People.
It is management that invests in the physical, financial, and creative infrastructure for those humans to demonstrate their abilities while placing humans at the center.
—
People × Savoir-faire

Regarding the 2025 performance, Nair herself positions a long-term approach, investment in Savoir-faire, Creative Momentum, Client Experience, and continuous investment in People as the foundation for the future.

This combination is important.

It does not become a Maison with just people.

It does not become a Maison with just workshops.

Only when People × Skill × Place × Material × Capital × Time are connected does it become CHANEL’s unique corporate capability.

—

Meaning of a female CEO

Explaining Nair’s existence only by gender is also insufficient.
However, there is no need to ignore its meaning.

CHANEL announces that women account for the majority of employees worldwide, and women hold more than 60% of Leadership and Management Positions, including CEO.

What is important is not to read this number as “completed because the female ratio is high.”

What should be asked is:

Who is making decisions?

Are different experiences entering management?

Is next-generation Leadership growing?

This issue will be handled again in Section 4.

—

Common term called Autonomy

One of the important concepts CHANEL upholds regarding women is Autonomy.

Founder Gabrielle Chanel herself is positioned as a person who carved out her own destiny, and the current CHANEL also emphasizes that women can choose for themselves.

This can be connected to both employees and customers.

Do not manipulate customers.

Do not manage employees excessively.

Give discretion to experts.

Create conditions where humans can judge for themselves.

In other words, Human Agency is at the center of Human-Centered Management.

—

The CEO’s role also changes

In 20th-century large companies, the CEO was easily depicted as an existence that commands from the top.

However, in a Maison composed of high-level experts, one CEO cannot have the best answer.

Artisans for Craft.

Creative Leadership for Creation.

The field for customers.

Experts for Technology.

What is necessary for the CEO is to connect those intelligences to the decision-making of the entire company.

—
CEO as Intelligence Integrator
Therefore, the next-generation CEO can be viewed not as a Chief Answer Officer, but as an Intelligence Integrator.
Listen to different specialized knowledge.
Recognize conflict.
Show long-term direction.

Take final responsibility.

This is a role that turns Collective Intelligence into corporate capability.

—

Listening becomes a management ability

In this model, Listening is not a Soft Skill.

It is a management function to acquire information from the field.

Customers.

Artisans.

Creative Team.

Employees.

Suppliers.

Deliver different Realities to the management core.

The CEO cannot see everything.

Therefore, make the organization itself a Listening System.

—

Leena Nair in the AI era

After 2026, this management philosophy will become even more important.

AI can support many Management Works such as:

Analysis.

Search.

Prediction.

Documents.

Translation.

Then, the value of human Leadership, including the CEO, will shift not from information processing volume, but to deciding what to cherish.

AI can optimize.

But human judgment is necessary for the purpose itself of what should be optimized.

—

Do not adapt humans to AI

Introduced AI.

Therefore, change the organization to a form that AI can easily handle.

This becomes Technology-Centered Management.

Conversely, make the order:

“What is the Human Capability that CHANEL should protect?”

“Where to place AI to enhance that ability?”

Human Purpose → Organizational Design → AI.

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Rigorousness of human-centered management

Management that places humans at the center is by no means easy.

Humans are unpredictable.

Opinions differ.

There are ability differences.

They fail.

Conflict also occurs in the organization.

Therefore, Human-Centered does not mean accepting everything gently.

High expectations.

Clear responsibility.

Fair evaluation.

Learning opportunities.

Dignity.

It is to establish these simultaneously.

—

Humans as long-term investment

CHANEL is a private company.

This capital structure will be handled in detail in Chapter 8 later, but it is also important in relation to human capital.

It takes time to train people.

It takes time to inherit Craft.

It takes time to form organizational culture.

Being able to continue investments that are difficult to rationalize with only short-term profit supports long-term Human Capital formation.

—

From humans to Supply Chain

Do not limit the term human-centered only to headquarters employees.

CHANEL currently positions artisans, people involved in raw materials, the Supply Chain, and people who create customer experiences in Boutiques as the scope of responsibility regarding humans.

In 2026, it also indicates a policy to strengthen the ESG Due Diligence Framework and advance Capacity Building including Suppliers.

In other words, the boundary of a Human-Centered Company extends outside the legal entity.

—

From People Strategy to Human Ecosystem

Here, the concept of human capital is also expanded.

Not just Employees.

Artisans.

Suppliers.

Partners.

Communities.

Look at all humans participating in the Maison’s value formation.

Expansion to Company Workforce → Human Value Network.

—

Even so, a company is a company

Even if it upholds human-centered, CHANEL is not a charitable organization.

Compete.

Generate profit.

Invest.

Create excellent products.

What is important is not to make Human Value and Enterprise Value conflict.

Train people.

Ability increases.

Products and Service improve.

Customer value increases.

Corporate value increases.

Can invest in people further.

A cycle is established here.

—

Leena Nair Algorithm

If you minimize the next-generation management model that can be extracted from the existence of Leena Nair, it becomes

Human Potential → Capability → Collaboration → Creation / Service → Client Value → Enterprise Value → Long-Term Investment → Greater Human Potential.

What is important is that Human Potential is placed at the beginning and the end.

—

Conclusion of Section 2

It is difficult to grasp the structural meaning of Leena Nair’s appointment as CHANEL CEO just by seeing it as a mere change of management.

A manager who has handled people and organizations for a long time becomes the Global CEO of a world-class Luxury Maison with over 100 years of history.

There, you can see the transition to an era where the center of corporate competitiveness exists not only in Capital, Product, and Technology, but also in Human Capability.

However, human-centered management does not mean looking only at humans.

Creation.

Craft.

Customers.

Capital.

Technology.

Environment.

It is to connect them as an Architecture where humans can demonstrate their abilities over the long term.

From 2025 to 2026, CHANEL continues large-scale long-term investment not only in People but also in Savoir-faire, Creative Ecosystem, Boutiques, and Client Experience.

In that sense, Nair’s role is not enough with the single word “CEO from HR.”

More essentially, it can be read as an experiment in management that translates human potential into the Maison’s long-term corporate value.

And that management must not be made to depend only on the personality of one CEO.

It must be an organization that can connect humans, creation, craft, customers, and long-term value even if the CEO changes.

Therefore, what is asked next is not Leena Nair as an individual, but what kind of Leadership CHANEL itself should have.

Section 3: Leadership

The Leadership of the next-generation CHANEL is not the ability for one person at the top to decide everything. It is the ability to give freedom to different expertise and creativity while connecting them to the long-term direction as one Maison.

Section 3: Leadership

In a company like CHANEL, what is leadership?

The power to lead a huge organization.

The power to increase performance.

The power to decide excellent strategies.

Of course, all are necessary.

However, CHANEL has a specialty that cannot be handled by that alone.

Fashion has the logic of creation.

Craft has the logic of skill.

Boutique has relationships with customers.

Finance has capital discipline.

Environment has responsibility on a scale of decades.

If you dominate the whole with one logic, somewhere will break.

Therefore, the leadership of the next-generation CHANEL is not the ability to homogenize different expertise into one, but the ability to make it function as one Maison while maintaining differences.

—

From command to design

Conventional leadership has often been depicted as a vertical structure.

Superiors gather information.

Judge.

Command.

Subordinate organizations execute.

This model functions in environments where work is standardized and superiors have sufficient information.

However, it is difficult at the modern CHANEL.

The CEO does not need to understand Fashion Creation better than the Creative Director.

Management does not need to understand Craft better than skilled artisans.

The CEO does not need to be well-versed in AI technology better than AI Engineers.

What is important is to create an organization where the most knowledgeable person can judge in the appropriate place.

Leadership changes from a job of monopolizing answers to a job of designing Decision Architecture.

—

Do not manage creation too much

The most dangerous thing in a Luxury Maison is management rationality dominating creation itself.

Products that sold in the past.

Current customer data.

High profit margins.

Demand prediction by AI.

If you decide the Collection based only on these, it looks rational in the short term.

However, Creation is also an act of presenting something that does not yet exist in the market.

Things customers are not searching for.

Things that do not exist in Data.

Things that cannot be predicted by the extension of the past.

There is a possibility that the next CHANEL will be born from there.

Therefore, Leadership has the responsibility to protect the unmeasurable creative space from the measurable present.

—

Freedom requires Infrastructure

However, freedom of creation does not mean unconstrained.

Excellent materials.

Skilled Atelier.

Maisons d’art.

Sufficient development time.

Capital.

Logistics.

Stores.

Only with these does creation realize as a Product.

In other words, Creative Freedom × Organizational Capability is necessary.

Leadership’s role is not to substitute Creation itself, but to prepare conditions where Creation can transition to Reality at a high level.

—

Disperse authority, do not erase responsibility

When giving discretion to experts, another problem arises.

The danger that no one will take responsibility for the whole.

“Left it to the experts”

is not Leadership.

While dispersing Decision to the field, it is necessary to clarify:

What to protect as a brand.

How much risk to take.
What not to do.
Who takes final responsibility.

Distributed Intelligence × Clear Accountability.

—

Do not command CHANEL-ness

In brand companies, the word “CHANEL-like” has strong power.

However, if you convert its meaning too much into a detailed Rule Book, creation becomes reproduction of the past.

What is needed is not a fixed answer, but judgment criteria.

Not just what Gabrielle Chanel made, but

Why did she break existing customs?

Why did she liberate the body?

Why was she able to present a new image of women to the era?

Understand that Operation.

Use Heritage not as an object of imitation, but as a Source that enables the next judgment.

This is history inheritance by Leadership.

—

Doing “protect” and “change” simultaneously

Leadership of a 100-year company has two responsibilities.

Continuity and Renewal.

If only Continuity, it becomes a Museum.

If only Renewal, it becomes a different brand.

Update to the current body, culture, and society while continuing to be CHANEL.

It is important not to erase this tension.

Excellent Leadership is not the ability to resolve contradictions to one side, but the ability to create a structure where both are established.

—

Listening and Decision

Connecting to the management of Leena Nair seen in the previous section, Listening becomes an important ability of modern Leadership.

Artisans’ voices.

Customers’ voices.

Creative Team.

Boutique.

Young employees.

Suppliers.

Technology Specialist.

However, Listening does not mean adopting everyone’s opinion as is.

Judge after listening.

Decide even if opposed in some cases.

Therefore, a two-stage process of “Listen broadly. Decide clearly.” is necessary.

—

Collective Intelligence, not Consensus

If you seek unanimous agreement, decision-making will be slow.

Conversely, if you decide by yourself, you lose the intelligence existing in the organization.

What is in the middle is Collective Intelligence.

Input multiple specialized knowledge into Decision.

However, clarify Decision Rights.

Here, it is not “deciding together,” but learning from everyone, and the responsibility holder decides.

This becomes Leadership suitable for highly specialized organizations.

—

Will Leadership become unnecessary due to AI?

AI also enters Leadership.

Market analysis.

Demand prediction.

Financial Simulation.

Talent placement.

Supply Chain Risk.

Environmental Data.

The amount of information managers can handle will increase greatly.

However, the more excellent AI becomes, the clearer one boundary becomes.

AI can show

“It is highly likely that profit will be maximized if this choice is made.”

But the question

“Is maximizing profit the most important thing for CHANEL in this situation?”
is different.
—
Optimization and Purpose
What AI is good at is Optimization.
What Leadership bears is the Purpose before that.
What to protect.
What to change.

Which Risk to accept.

How much short-term profit to sacrifice to invest in the future.

There is value judgment here.

Therefore, Leadership in the AI era will not become weak.

Rather, the location of final human responsibility becomes more important.

—

Do not make AI a “third authority”

Do not avoid Decision Responsibility with the words

“Because AI judged so.”

AI is Decision Support.

Humans finally adopt.

Override.

Explain.

Take responsibility.

This is a principle common to Customer Algorithm and human capital.

AI recommends. Humans remain accountable.

—

Leadership Pipeline

And it is also important not to depend Leadership on the ability of one CEO.

Boutique Manager.

Atelier Leader.

Regional Leader.

Technology Leader.

Young Manager.

Leadership occurs in many places within the company.

For the next-generation CHANEL to continue to be a long-term company, finding one excellent CEO is not enough.

It needs to be a company that can continuously generate Leadership.

—

Leaders who train the next generation

Excellent Leaders leave great results.

But successors are not growing.
This cannot be called success for a long-term company.

What is truly important is to leave a state where

“The organization moves even without me.”

“The next person can update it further.”

Therefore, Leadership results must include Current Performance + Future Leadership Capacity.

—

Leadership also has inheritance and renewal

It is the same as Craft.
Learn from seniors.
But do not become a completely identical Leader.
Change Leadership Style to match the new era while inheriting the company’s Principle.
Here too, CHANEL’s common algorithm of Inheritance → Interpretation → Renewal exists.

—

Meaning of increasing female leaders

Considering Leadership Pipeline, the issue of gender and diversity also becomes more than just a headcount ratio.

Even if people with different backgrounds exist in the organization, if the decision-making layer is homogeneous, the perspectives the company can use are limited.

Therefore, what is important is not just Representation.

Who can speak.
Who can make decisions.
Who is trained as the next Leadership candidate.
It is necessary to look up to there.

Connect from here to the theme of the next section.

—

Leadership Capital

Companies have Financial Capital.

Brand Capital.

Human Capital.

And it is thought that Leadership Capital also exists in long-term companies.

People who can judge in difficult situations.

People who can connect experts.

People who can train the next generation.

People who can maintain long-term direction even under short-term pressure.

The more this ability exists within the organization, the stronger the company becomes.

—

Compound interest of Leadership Capital

Leaders train people.

Trained people become new Leaders.

Train the next generation further.

Then Leadership also compounds like human capital.

Lead → Develop → Delegate → Learn → Next Leader → Lead Again.

The longer the company life, the more important the quality of this cycle becomes.

—

Final goal of leadership

The goal of Leadership is not to make the Leader themselves indispensable.

Rather, it is the opposite.

Increase judgment ability within the organization.

Experts can demonstrate ability.

Different opinions rise.

Necessary information flows.

Next generation grows.

As a result, the company can survive beyond specific individuals.

Great leadership produces more agency, not more dependency.

—

Conclusion of Section 3

CHANEL’s next-generation leadership cannot be described only by a centralized model by one strong manager.

Creative Director needs freedom of creation.

Artisans need specialized judgment.

Client Advisors need discretion in human relationships.

Technology Specialists need technical judgment.

On the other hand, if they are completely separated, one Maison called CHANEL will not be established.

Therefore, the role of Leadership shifts to

Connection, not Control.

Coherence, not Uniformity.

Architecture, not Answer.

Gather different intelligences.

Pass authority to necessary places.

But do not make responsibility ambiguous.

Learn from AI.

But do not move responsibility to AI.

Protect history.

But do not let history constrain the future.

Create current results.

Simultaneously train the next Leader.

As a result, a cycle of

Human Potential → Distributed Intelligence → Responsible Decision → Creation → Enterprise Value → Learning → Next Leadership

is formed.

What is necessary for CHANEL to continue to be CHANEL for over 100 years is not the same Leader forever.

Even if the Leader changes, being able to continue connecting the intelligence of different humans to one Maison.

That is the algorithm of leadership in the next-generation CHANEL.

And if you really incorporate the intelligence of different humans into the company, what you must ask next is not just “who exists in the organization.”

Whose experience is heard, who participates in decisions, and who can become the next Leader.

From there, the issue of gender and diversity begins.

Section 4: Gender and Diversity

Section 4: Gender and Diversity

For CHANEL, gender is not a peripheral theme.

This is because what Gabrielle Chanel did in the early 20th century was itself an intervention into existing norms regarding women’s bodies and social roles.

Liberate the body from corsets.

Incorporate elements of men’s clothing into women’s clothing.

Connect ease of movement and Elegance.

Create a company herself and acquire economic independence.

In CHANEL’s history, Fashion and women’s Autonomy overlap from the beginning.

However, what is necessary for corporate management in 2026 is not just to praise that history.

Has the Maison that liberated women in the past been able to liberate human potential within the current organization as well?

This becomes the question of the next-generation CHANEL.

—

From numbers to decision-making

The easiest way to measure diversity is headcount ratio.

Female ratio.

Management ratio.

Nationality.

Age.

Such indicators are necessary.

However, Representation alone cannot sufficiently explain the reality of the organization.

Even if there are many women, if important decision-making is concentrated in a limited homogeneous group, diversity is not converted into corporate capability.

Therefore, the structure to look at is Representation → Participation → Influence → Decision.

Who is there.

Who can speak.

Whose opinion is reflected.

Who finally decides.

Diversity becomes management capability only after passing through these four stages.

—

Do not make female ratio a goal

It is important that there are many women at CHANEL.

However, if you make the female ratio itself the final result, it is shallow as Human-Centered Management.

Even among women, generation, nationality, culture, social environment, job type, expertise, and life experience differ.

You cannot represent diversity with only one category called “women.”

Gender is an important axis.

But it is not the only axis.

—

Diversity of Perspective

The reason diversity has value for a company is not to adjust numbers.

It is because different Realities enter the organization.

Look at the same product.

Look at the same customer.

Look at the same social change.

Even so, if experience is different, what is seen is different.

Convert this difference into the company’s learning ability.

In other words, next-generation Diversity Management has a structure of Human Difference → Different Observation → Better Learning.

—

Diverse does not automatically mean stronger

Caution is necessary here.

Innovation does not naturally arise just by gathering different people.

Rather, conflicts of opinion may increase.

Decision-making may become difficult.

Therefore, Diversity requires Inclusion.

Different people exist.

And they can work together without erasing those differences.

Think of these two separately.

Diversity = Difference exists.

Inclusion = Difference can participate.

—

From Inclusion to Influence

Furthermore, Inclusion alone is not enough.

Can participate in meetings.

Can speak.

But does not influence decision-making.

This remains formal participation.

In next-generation organizations, it is necessary to look up to Presence → Voice → Influence.

Can diverse humans change management judgment itself?

Only here does Diversity become Organization Intelligence.

—

Luxury and diversity of the body

At CHANEL, there is another important aspect.

Fashion relates directly to the body.

Beauty also touches the body.

Fragrance also connects to the body and memory.

Therefore, what kind of body is used as the standard to design products and customer experiences is important.

Age.

Physique.

Skin.

Physical characteristics.

Perception of beauty by culture.

Human bodies are not of one type.

—

From one ideal image to multiple self-expressions

20th-century Fashion sometimes presented limited ideal body images to society.

However, in next-generation Luxury, the brand does not push one completed human image, but can advance in a direction of providing possibilities for humans to express themselves.

This also connects to the Agency handled in Chapter 3.

The Maison does not decide “You should be like this.”

Customers express their own bodies and Identity.

CHANEL provides Creation for that.

—

Diversity of Global Company

CHANEL conducts business all over the world.

Even if it is a brand established in Paris, customers exist in the world.

Tokyo.

Seoul.

Shanghai.

New York.

Dubai.

Singapore.

Society, body sensation, culture, and the meaning of Luxury differ for each.

What is necessary for a Global Company is not to make all markets the same.

—

Global Consistency × Local Intelligence

Brand codes are common.

But customer understanding is Local.

Therefore, a structure of Global Maison × Local Human Intelligence is necessary.

Do not think that headquarters knows everything.

Learn from local employees and customers.

On the other hand, prevent the brand itself from splitting due to Local Adaptation.

Here too, connection is important, not unification.

—

Diversity of age

Diversity also includes generations.

CHANEL has a long corporate Memory.

Those who have worked for a long time hold that value.

On the other hand, the new generation brings

AI.

Digital Culture.

New work styles.

Environmental awareness.

New sense of Beauty and Gender.

There is no need to choose either.

—

Intergenerational Intelligence

Experts teach the young.

The young also return new perspectives to experts.

Not just one-way Mentoring, but create two-way learning of Experience ⇄ New Perspective.

This can be thought of as Intergenerational Intelligence.

It is extremely important diversity for a 100-year company.

—

Diversity and Craft

It is the same in the world of Craft.

Protect traditional techniques.

But do not fix the bearers.

Young people with different backgrounds learn skills.

Connect with new materials and Technology.
Then tradition is not just preserved, but regenerated.
Diversity is not the enemy of Heritage.
If connected appropriately, it becomes a force to carry Heritage to the future.
—
It will not change just by recruitment

When a company advances Diversity, it is easy to concentrate only on recruitment numbers.

But what is truly important is after recruitment.

Who is entrusted with important Projects.

Who can get a Mentor.

Who becomes a promotion candidate.

Who can re-challenge from failure.

It is necessary to look at Opportunity Distribution.

—

Opportunity Equity

It is not to guarantee the same result for everyone.

But reduce unreasonable barriers to opportunities to demonstrate ability.

This is Equity as Human Capital Management.

Companies do not artificially unify results, but prepare conditions where Potential can be manifested.

—

AI and Diversity

AI enters here.

Recruitment.

Evaluation.

Promotion.

Talent placement.

AI can analyze large amounts of information.

However, if it learns past organizational Data, there is a possibility of learning past biases as well.
There were many Leaders of a specific attribute in the past.
AI misidentifies that feature as “Leadership Potential.”

Then the past structure is automatically reproduced into the future.

—

Historical Bias → Algorithmic Bias

AI does not need to invent prejudice from scratch.

It is enough to learn the biases that existed in human society from Data.

Therefore, when using AI for Human Resources, the boundary of Past Pattern ≠ Future Ideal is important.

Do not make the goal only the reproduction of people who succeeded in the past.

—

AI can also be used to discover Bias

Conversely, AI can also discover structural biases that humans overlooked.

Promotion speed is different despite similar Performance.

Turnover rate is high only in a specific group.
Important Assignments are biased.
Discover such Patterns.
Use AI not as a human classification device, but for Organization Diagnosis.
—
Leave Human Review
Recruitment candidates.

Performance.

Promotion.

AI may output Recommendations.

But do not decide human Careers only with Algorithms.

Confirm reasons.

Can file objections.

Can correct.

Humans take final responsibility.
This is the organizational version of Human-Centered AI.

—

Diversity and Psychological Safety

Even if there are people with different opinions, if they receive disadvantages when speaking, diversity will not function.

Therefore, Psychological Safety is necessary.

However, it does not mean an environment where you are not criticized no matter what you say.

Can express different opinions.

Can ask questions.

Can admit mistakes.

Maintain high standards on top of that.

High Standards × Psychological Safety.

—

Integration that does not erase Difference

If you strengthen organizational culture, there is also a danger that everyone will approach the same way of thinking.

Understanding “CHANEL Culture” is different from everyone becoming the same human.

What is shared is Principle.

Do not unify even individual perspectives.

Shared Principles, Diverse Perspectives.

This becomes the organizational culture of a strong Maison.

—

Do not over-brand Diversity

If you use Diversity only for external Communication, a discrepancy with internal Reality will occur.

Ads are diverse.
But Leadership is homogeneous.
Talk about social issues in Campaigns.
But employees cannot speak.

This gap damages Brand Trust in the long term.

What is important is implementation over expression.

—

Match internal and external

Freedom that products speak of.

Autonomy of women that ads speak of.

Human Potential that the company speaks of.

Are they established in internal Organization as well?

Correspondence of Brand Promise ⇄ Organizational Reality is necessary here.

The stronger the story a company like CHANEL has, the more important this match becomes.

—

From gender to Human Diversity

Gender is important.

But the organization design of the next-generation CHANEL advances beyond that.

Gender.

Generation.

Culture.

Expertise.

Body.

Work history.

Thinking style.

Connect the Reality held by different humans to the company.

The final goal is not to increase the number of categories.

It is to expand the world the company can observe.

—

Diversity as Observational Capacity

Homogeneous organizations easily overlook the same things.

Diverse organizations have different observation points.

Therefore, Diversity can be viewed not only as social responsibility but as Organizational Observational Capacity.

Diversity increases.

Observation points increase.

Can discover problems quickly.

Can understand new customers.

Can see new creative possibilities.

—

However, finally integrate

The company will not move just by increasing observation points infinitely.

After gathering different opinions,

Judge.

Make products.

Invest.

Execute.

Therefore, the flow of Diversity → Observation → Dialogue → Decision → Creation is necessary.

Diversity is not a substitute for Decision.

It is an input for better Decision.
—

Conclusion of Section 4

Gender and diversity at CHANEL cannot be evaluated only by female ratio.

What is important is:

Who exists.

Who can speak.

Whose experience reaches the company.

Who can influence decision-making.

Who can become the next-generation Leader.

Precisely because it has a history where Gabrielle Chanel updated women’s bodies and Autonomy through Fashion, modern CHANEL has the meaning of questioning that philosophy back to the organization itself.

Do not end diversity with numbers.

Do not end it with Branding either.

Do not fix past biases with AI.

Convert the experience of different humans into the company’s learning, judgment, and creation.

Its minimum structure becomes Human Difference → Multiple Perspectives → Organizational Learning → Better Decision → New Creation → Greater Human Potential.

Diversity in the next-generation CHANEL is not just gathering different humans.

It is creating an Architecture where different humans can participate in the Maison’s value formation while remaining different.

And to not end this discussion with just philosophy, we must return the perspective to the humans who are creating CHANEL’s products and customer experiences daily.

In the next section, we handle the two subjects—artisans and employees—who bear the Maison’s value formation in the most concrete places.

Section 5: Artisans and Employees

Section 5: Artisans and Employees

When you look at a company called CHANEL from the outside, what you see first is the product.

Jackets, bags, dresses, perfume, watches, jewelry.

However, behind that, there is a vast amount of human work.

People who design. People who choose materials. People who sew. People who embroider. People who assemble watches. People who check quality. People who move logistics. People who face customers in boutiques. People who repair. And many employees who support them.

Therefore, CHANEL’s product value is not established by Brand → Product alone.

Between them, Human Work must exist.

In the organization design of the next-generation CHANEL, it is necessary to view this human work not as mere Labor Cost, but as the value generation of the Maison itself.

—

Artisans are not means of production

When talking about Craftsmanship as a management resource, there is something that must be careful.

What the company wants is “skill.”

However, skill does not exist separated from humans.

Hands.

Eyes.

Body.

Experience.

Judgment.

Years of repetition.

Craft is established when these become one.

In other words, you cannot treat artisans merely as Skill Holders.

Craft is corporate capability accumulated in the human body.

—

Physical knowledge

In high-level Craft, there is knowledge that can be verbalized and knowledge that is difficult to verbalize.

Parts that can be written in procedure manuals.

Parts that can be recorded in videos.

Parts that can be quantified.

And there is Tacit Knowledge such as:

Tactile sensation.

Subtle changes in materials.

How to apply force.

Discomfort with the finish.

Even in the AI era, this distinction is important.
It does not mean all Knowledge can be moved to a Database.

—

From artisan to artisan

Therefore, human-to-human time is necessary for skill inheritance.

Watch.

Imitate.

Fail.

Corrected.

Repeat.

Eventually, they can judge for themselves.

Skill inheritance is not information transfer.

It is a long conversion of Knowledge → Practice → Embodiment → Judgment.

There is the time value of Luxury Craft here.

—

Not just preserving tradition

However, do not limit the work of artisans only to “protecting old techniques.”

New Collections are born.

New materials enter.

Requests never seen before arrive from the Creative Director.

Artisans do not just use existing techniques, they respond to them.

In other words, Craft has Inheritance × Experimentation.

Inheritance and creation do not conflict.

Excellent Craft can translate inherited skills into new Creation.

—

Creative Director and artisans

Fashion Creation is not completed with just design drawings.

Ideas move to materials.

Materials become structures that wrap the body.

Decoration is added.

Details are adjusted.

There, Creative Vision and Craft Intelligence go back and forth.

Creation ⇄ Craft.

It is not just the Creative Director commanding unilaterally and artisans executing as is.

Discover feasibility and new possibilities from the dialogue between both.

—

Meaning of le19M

The existence that symbolizes this structure is le19M, which CHANEL supports.

What is important is not just gathering multiple Métiers d’art in one place.

It is increasing the connection density of knowledge, humans, creation, education, and culture by bringing different specialized skills close together.

Investment in workshops is investment in buildings, and at the same time, investment in Human Knowledge Infrastructure.

—

Artisans alone do not create CHANEL

On the other hand, it is not accurate to over-specialize Craft.

It is a wider range of employees that keeps CHANEL established daily.

Boutique.

Logistics.

Digital.

Technology.

Finance.

Legal.

Human Resources.

Sustainability.

Security.

Unless many functions are connected, you cannot deliver products made by artisans to customers around the world.

—

Visible Craft and Invisible Work

There is work visible to customers.

There is also invisible work.

Behind beautiful boutiques, there is logistics.

Behind Personalized Service, there is Technology.

Behind environmental goals, there is Data Collection and Supply Chain Management.

In other words, the Maison’s value is established by Visible Excellence × Invisible Infrastructure.

—

Intelligence of the Frontline

What is particularly important is employees who directly contact customers.

Client Advisors do not just sell products.

What customers are looking for.

Where they get lost.

Which products are loved for a long time.

Which Service has complaints.

They are observing a large amount of Reality daily.

This is important Intelligence for the company.

—

Make the field a Sensor

It is not that only headquarters understands customers.

Rather, it is often the field that feels changes the fastest.

Therefore, the organization needs a path of Frontline Observation → Organizational Learning.

Information rises from the field.

Analyzed.

Returns to improvement of products, Service, Training, and Technology.

Through this, employees are not just an Execution Layer, but become the company’s Observation Layer.

—

Employees with Voice

Diversity from the previous section connects to this structure.

Even if there are diverse people in the field, it is meaningless if that voice does not reach management.

Can report problems.

Can propose improvements.

Can say different opinions.

And the management side can learn that.

A Human-Centered Organization is not an organization that declares it cherishes humans, but an organization where human intelligence can actually change the company.

—

Standardization and discretion

Luxury Service requires a certain Standard.

Quality.

Courtesy.

Privacy.

Brand Presentation.

However, if you script all customer responses, human Service will be lost.

Therefore, a design of Standardized Principle × Human Judgment is necessary.

Unify the standards to protect.

Leave human discretion for concrete responses.

—

Do not make employees too much of a “brand performer”

In Luxury companies, employees themselves become part of the brand Experience.

Therefore, gestures, words, and service quality are emphasized.

However, if you demand acting excessively, emotional labor increases.

Always being perfect.

Always smiling.

Always matching the customer.

If you demand that without limit, it consumes humans.

Luxury Service also requires sustainability.

—

Employee Experience and Client Experience

Employees are exhausted.

No discretion.

No necessary information.

Chased by excessive goals.

In that state, it is difficult to maintain excellent customer experience in the long term.

Therefore, it is necessary to look at the connection of Employee Experience → Service Quality → Client Experience.

Customer-centered management and employee-centered management do not conflict originally.

—

Where does AI enter?

AI also enters the work of artisans and employees.

Inventory search.

Product information.

Translation.

Demand prediction.

Training.

Knowledge Retrieval.

Repair History.

Administrative work.

It can support many areas.

What is important is not to decide where to introduce AI from “places where people can be reduced.”

Calculate backward from “Where do I want to return human time?”

—

Regain human time with AI

If Client Advisors are using long time for terminal operation, shorten it with AI.

If artisans spend long time searching for past materials, support the search.

If Managers are using time for routine Report creation, automate it.

Return the time born there to

Dialogue with customers.

Skills.

Education.

Judgment.

Creation.

AI’s value can also be measured by Recovered Human Time, not reduced headcount.

—

Replace artisans with AI?

Technically, areas where manufacturing automation advances will increase.

However, in Luxury Craft, it is necessary to change the question.

Think not only “Can machines do it?” but “Where is the value of human involvement itself?”

Sometimes subtle differences by handwork have meaning rather than complete uniformity.

Sometimes the fact that it was made over time is included in product value.

—

Technology × Craft

Therefore, do not make Craft and Technology conflict.

Cutting.

Measurement.

Material research.

Digital Design.

Quality control.

AI.

There are many areas where artisans’ abilities can be expanded by Technology.

However, it is also possible to leave final sensation, judgment, and finishing to humans.

Technology supports Craft.

Craft gives Technology meaning.

This relationship becomes important.

—

Safety and Well-being

Artisans and employees also have bodies.

Long hours of detailed work.

Standing work.

Repetitive motion.

Mental load.

To maintain Human Capital in the long term, companies need to protect physical and psychological safety.

Protecting skills and protecting humans who hold skills are not the same.

If the latter does not exist, the former will not continue.

—

Sustainable Human Performance

Not drawing out maximum output temporarily, but creating an environment where ability can be demonstrated for 10, 20 years.

Rest.

Safety.

Education.

Career.

Appropriate Technology.

These are not just welfare, but investment in long-term corporate capability.

—

Look at humans of Suppliers too

Humans who make CHANEL products are not just in-house employees.

Raw materials.
Processing.
Logistics.
External workshops.
Many people are involved in the Supply Chain.
Therefore, you cannot place the boundary of Human-Centered Management only within the corporation.

It is necessary to look at human dignity, safety, skill inheritance, and responsible procurement across the entire Network where the company obtains value.

—

Human Value Chain

The word Supply Chain makes one imagine the flow of Material.

However, there are humans at each point.

Therefore, look at Material Value Chain and Human Value Chain simultaneously.
Make not only where products came from, but whose work they are established by, a management target.

This also connects to the environment/capital Algorithm later.

—

Do not reduce humans to Efficiency

Companies measure productivity.

How many per hour.

Sales per person.

Number of cases processed.

Necessary indicators.

However, in Luxury, you cannot measure human value with only that.

Artisans spend time on one finish.

Advisors respond politely to customers who do not lead to purchase.

Seniors use production time to teach juniors.

Short-term Efficiency may drop, but long-term Value may increase.

—

Separate Productivity and Value Creation

Processing more in less time is Productivity.

However, what the company needs is Value Creation.

Both sometimes match, but are not always the same.

Especially in Luxury, there are areas where Efficiency ≠ Excellence.

—

Protect time to train people

During busy seasons, you want to cut training time.

However, if you repeat that, next-generation skills will not grow.

You will be consuming Future Capability to protect short-term Output.

Therefore, protect Training Time as management.

This is long-term Capital Allocation.

—

Do not divide artisans and employees

Artisans are Creative.

Employees are Corporate.

This dichotomy is also too simple.

Both are in one Value System.

Craft makes Products.

Technology supports.

Logistics transports.

Boutique connects to customers.

Repair extends time.

Everything participates in the Maison’s value formation.

—

One Maison, Many Professions

Within one company called CHANEL, many Professions exist.

What is important is not to change them into the same work.

It is that each maintains different expertise and is connected to one value generation cycle.

—

Cycle of Human Contribution

If you minimize that structure, it becomes

Skill → Work → Product / Service → Client Value → Enterprise Value → Investment → Training / Environment → Greater Skill.

If corporate profit is reinvested into humans, Human Capability is regenerated.

—

Difference from Extraction

There is also the opposite structure.

Use human skills.

Gain profit.

Do not educate.

Do not invest in the workplace.

People are exhausted.

Skills are lost.

This is Human Capital Extraction.

It is incompatible with long-term Luxury.

—

Regenerative Workforce

What the next-generation CHANEL should aim for is not an organization where human ability is depleted as they work.

Work.

Experience accumulates.

Learn.

Teach the next generation.

Ability is expanded by Technology.

And return to new Creation.

Work → Learn → Grow → Teach → Renew.

It is a regenerative cycle.

—

Conclusion of Section 5

Human time is embedded in CHANEL’s products.

Artisans’ bodies.

Creative Team’s trial and error.

Client Advisor’s judgment.

Invisible work of logistics, Technology, and management departments.

They are connected and become one product and customer experience.

Therefore, it is not enough to just preserve artisans as “tradition” or just make employees efficient as “human resources.”

What is important is to create a corporate structure where human ability is not consumed by being used, but regenerated through experience, learning, and inheritance.

Technology supports that regeneration.

AI takes on information retrieval and routine work, and regains human time.

However, do not take judgment, physical knowledge, relationships, creation, and responsibility away from humans.

At that time, CHANEL can have a long-term cycle of Human Skill → Creation → Client Value → Enterprise Value → Reinvestment → Human Skill.

It is not just an abstraction called brand that is creating Luxury value.

Each human being demonstrating their ability and being able to pass that ability to the next human.

That is the deepest production foundation of a Maison that exceeds 100 years.

And in the AI era, this question becomes even clearer.

Is it enough to just protect work that only humans can do?

Or can we further expand the ability of humans themselves through AI?

In the next section, we design without making both conflict.

Section 6: Humans and AI

Section 6: Humans and AI

How much will AI change CHANEL?

Demand prediction, inventory, logistics, customer understanding, translation, search, product information, repair history, design support, material research, management analysis. If generative AI and AI Agents advance, AI can be introduced to almost all departments of Luxury companies.

However, being technically possible and what should be executed as a company are not the same.

For CHANEL, the essential question is not what AI can do, but what humans should bear even if using AI.

—

Reverse the purpose of AI introduction

In normal companies, AI introduction tends to start from productivity.

How many people can be automated.

How many hours can be reduced.

How far can Cost be lowered.

These are important. However, at CHANEL, if you make that the only goal, there is a possibility of damaging the Maison’s value generation structure.

This is because human time itself, which is difficult to make efficient, is included in Luxury’s competitiveness.

Time for artisans to look at materials.

Time for Creative Team to try and error.

Time for Client Advisors to talk with customers.

Time to train the young.

Therefore, shift the purpose of AI from Labor Reduction to Human Capability Expansion.

—

Regain human time with AI

What AI should take on first is work that does not have to be human.

Information search.

Routine documents.

Translation.

Inventory confirmation.

Organization of large amounts of data.

Initial analysis.

Access to in-house Knowledge.

Speed these up.

What is important is the time born as a result.

If one hour of work becomes ten minutes, do not use the remaining time for more administrative processing, but return it to value that is difficult for anyone but humans to generate.

AI Efficiency → Recovered Human Time → Higher Human Value.

—

Areas left to humans

There is no need to divide all work into “can/cannot be done by AI.”

Rather, clarify areas where humans should be the final subject.

Creation.

Craft Judgment.

Important customer relationships.

Leadership.

Talent development.

Ethical judgment.

Exception handling.

Final responsibility.

AI can support these.

However, humans judge including whether to adopt AI output.

—

Creative AI

AI can also be used in Creation.

Explore past Archive.

Organize large amounts of Visual Reference.

Consider combinations of materials.

Simulate.

However, if CHANEL continues to learn past works to AI and generate the most “CHANEL-like” designs, creation approaches self-imitation.

Giving the most probable answer from the past is different from creating the next era.

Heritage is input, not destination.

AI opens the Archive.

Humans create a CHANEL that does not yet exist from there.

—

Craft and AI

It is the same in Craft.

AI can search skill records.

Compare past processes.

Detect quality abnormalities.

Analyze material characteristics.

It can also support young education.

However, it is not necessarily the case that tactile sensation, physical movement, subtle discomfort, and final judgment based on experience can be completely reduced to Data.

Therefore, create a combination of AI Memory × Human Embodiment.

AI supports knowledge inheritance and does not replace human-to-human Apprenticeship.

—

Client Advisors and AI

In customer contact, AI’s effect is even greater.

Confirm past purchases and repair history within the range permitted by the customer.

Find product inventory.

Translate languages.

Present related information.

Advisors are freed from terminal operation and can concentrate on conversation with customers.

What is ideal here is AI behind the human.

Do not place AI in front of the customer, but support the human’s Service ability from behind.

—

AI does not manipulate customers

On the other hand, AI can also predict customer purchase probability.

Who to contact when to buy with high probability.

Up to what price they seem to accept.

Which product to present to maximize purchase amount.

Technically, it will advance.

However, in Human-Centered Luxury, a boundary is necessary.

Recommendation is good.

Do not advance to Manipulation.

Understand the client, but do not engineer the client.

Leave the customer’s Agency.

—

Employee AI

It is the same for employees.

AI Skill Matching.

Learning Recommendation.

Career Support.

Knowledge Retrieval.

Work support.

There is great possibility.

However, if it advances to constant surveillance, emotion estimation, and detailed Productivity Tracking, it conflicts with human-centered management.

Use AI not to manage employees to the end, but to make it easier to demonstrate ability.

—

Danger of AI fixing the past

There is another problem with HR AI.

People who were promoted in the past.

People who were highly evaluated in the past.

Products that succeeded in the past.

AI discovers Patterns from large amounts of past Data.

However, Past Success ≠ Future Potential.

The Algorithm that most accurately reproduces the past CHANEL may not be able to create the future CHANEL.

—

AI has three roles

AI at CHANEL can be organized into three.

First is Automation.

Automate routine work.

Second is Augmentation.

Expand human search, analysis, judgment, and creation.

Third is Discovery.

Present Patterns and possibilities that were difficult to discover by humans alone.

What becomes most important in next-generation Luxury are the second and third.

—

Corporate value is not maximized by Automation alone

If you only pursue Automation, the company becomes efficient.

However, if many companies use the same AI, efficiency itself is difficult to be a differentiation factor.

CHANEL’s unique competitiveness is born not from AI itself, but from CHANEL’s unique Human Capability × AI.

Even if you use the same Foundation Model, output value changes by connection with the Maison’s Archive, Craft, customer understanding, and Creative Judgment.

—

AI and Institutional Memory

CHANEL has over 100 years of history.

Collection.

Archive.

Materials.
Techniques.

Campaign.

Repair.

Stores.

Corporate judgment.

Vast Knowledge is accumulated.

Through AI, you can convert them into searchable Institutional Memory.

Young employees can reach past knowledge in a short time.

It also becomes a help for experts to leave years of experience to the next generation.

This is a very large possibility for CHANEL.

—

But the ability to forget is also necessary

Being able to search all pasts at any time also has the opposite Risk.

Past success examples are always displayed.

Past judgments dominate the present.

If corporate Memory becomes too strong by AI, there is a possibility that creation will be constrained by history.

Therefore, next-generation companies need both Memory × Forgetting.

Return to history when necessary.

Leave history when necessary.

—

AI Governance

The more widely you use AI, the more important Governance becomes.

Customer Data.

Employee Data.

Intellectual Property.

Creative Archive.

Supplier Information.

Unannounced products.

CHANEL has many extremely Sensitive information.

“Input to external AI because it is convenient” does not end it.

Data Classification.

Access Control.

Model Governance.

Audit.

Human Approval.

Security.

It is necessary to prepare these as corporate Architecture.

—

Creative Intellectual Property

Especially in Luxury companies, the relationship between AI and intellectual property is important.

What was used for learning.

How to handle the rights of generated products.

How the work of artisans and Creators is used.

How to handle third-party copyrighted works.

There are areas that should be prioritized to protect Trust in Creation over the speed of AI introduction.

—

Human Approval

Place Human Approval Points for important AI use.

Recruitment.

Promotion.

Important proposals to high-end customers.

Creative Decision.

Serious quality judgment.

Security Incident.

Even if AI generates Recommendations, final judgment is made by responsible humans.

This is not to make AI weak.

It is not to erase the location of responsibility.

—

Meaning of Explainability

It is not necessary to be able to explain all AI internal calculations completely.

However, this Governance must be explainable:

Why use this AI.

What Data to use.

Who confirms the results.

Who can stop it if there is a problem.

Luxury Brand AI needs Institutional Trust, not just Technical Performance.

—

Assume AI Failure

AI makes mistakes.

Hallucinate.

Have Bias.

Misunderstand Context.

Therefore, do not design corporate Process assuming “AI is correct.”

What is needed is AI Output → Verification → Human Decision.

In the AI era, Verification ability itself becomes human capital.

—

AI Literacy

Therefore, not all employees need to be AI Engineers, but AI Literacy will be widely necessary.

What can be done.

What cannot be done.

Which Data can be input.

Where to verify.

When to Escalate to humans.

Do not close AI only to the Technology Team.

—

AI Literacy for Artisans and Advisors too

AI Literacy is not an ability only for Corporate Staff.

AI suitable for Craft for artisans.

AI suitable for Client Service for Advisors.

Decision Support AI for Managers.

Design to match each work.

Not One AI for everyone, but AI adapted to human work.
—
Humans do not adapt to AI
This becomes the center of Human-Centered AI.
Introduced a new System.
Employees forcibly match to that Workflow.
Instead, observe human work.
See where there is friction.

Place Technology there.

The order is Human Work → Need → AI Design.

—

Standardization by AI and Luxury

AI is good at deploying Best Practice to all stores.

This is useful for quality improvement.

However, if all Advisors make the same proposal and all customer experiences become the same, Luxury’s humanity will thin out.

It is necessary to balance Consistency by AI and Individuality by humans.

—

Standardize Infrastructure, personalize Humanity

What to standardize is

Information quality.

Security.

Basic Process.

Product Knowledge.

On top of that, leave human individuality for

Conversation.

Proposal.

Relationship.

Creation.

This becomes the beautiful boundary of Luxury AI.

—

AI Agent era

From now on, AI will advance to Agents that not only answer questions but execute work across multiple Systems.

Inventory confirmation.

Reservation.

In-house application.

Analysis.

Logistics adjustment.

Can process various tasks continuously.

Here, even clearer Authority design is necessary.

What AI can read.

What it can propose.

What it can execute.

What needs human approval.

Separate these.

—

Design Human Authority

The more advanced AI Agents become, the more the principle of Capability ≠ Authority becomes important.

What AI can technically do and giving execution authority are different.

This becomes an important Governance principle for next-generation companies.
—
Not competition between AI and humans
The question “AI or humans” is not very suitable for CHANEL.
What is more important is what combination can create value that cannot be created by humans alone or AI alone.
Think of Human × AI as a new Organization Unit.

—

Augmented Artisan

Artisan + AI.

High-speed access to past techniques.

Acquire material information.

Receive quality analysis.

But hands and judgment remain with humans.

—

Augmented Advisor
Advisor + AI.

Instantly acquire inventory, history, and product information.

But relationships with customers are borne by humans.

—

Augmented Leader

Leader + AI.

Simulate multiple Scenarios.

Analyze large amounts of corporate information.

But Purpose, Trade-off, and Responsibility are held by humans.

—

Augmented Creator

Creator + AI.

Expand exploration space.

Try different possibilities at high speed.

But humans decide what to put out to the world as CHANEL.

These four can become the basic forms of next-generation CHANEL’s Human-AI Organization.

—

Human value is not “what AI cannot do”

There is the most important shift here.

Do not define human value as “work AI cannot do.”

Because human value shrinks every time AI evolves.

Humans have value before comparison with AI.

Have a body.

Experience.

Create relationships.

Take responsibility.

Give meaning.

Choose the future.

Human-Centered Company designs Technology from this principle.

—

Human-AI Algorithm

If you minimize CHANEL’s next-generation Human-AI Algorithm, it becomes

Human Purpose → AI Assistance → Expanded Possibility → Human Judgment → Human Approval → Action → Verification → Learning.

Do not place AI at the center.

Place humans at the beginning and end.

—

Return value born from AI to humans

Cost drops by AI.

Productivity rises.

Profit is born.

Return a part of it to

Training.

Craft.

Creative Time.

Employee Well-being.

Client Experience.

Then AI can be a device that regenerates Human Capital, not a device that reduces it.

—

Human-AI Regeneration

The cycle becomes Human Capability → AI Augmentation → Greater Value → Enterprise Return → Human Investment → Greater Human Capability.

The more AI introduction advances, the deeper the investment in humans becomes.

If this structure exists, Technology and Human-Centered Management do not conflict.

—

Conclusion of Section 6

For CHANEL, the most important possibility of AI is not to make humans unnecessary.

It is to regain the time and ability for humans to generate value as humans.

Information search to AI.

Large-scale analysis also to AI.

Routine processing also to AI.

However, redesign Creation, Craft, Relationship, Leadership, and Responsibility around humans.

AI remembers the past.

Humans leave the past and create the future.

AI discovers Patterns.

Humans judge meaning.

AI issues Recommendations.

Humans choose and take responsibility.

Therefore, what the next-generation CHANEL should aim for is not to become an AI company.

A Maison that does not thin out humanity despite deeply implementing AI.

Its minimum principle becomes Human Purpose → AI → Human Judgment → Human Value.

The more advanced AI becomes, what CHANEL is asked is not just Technology performance.

What not to automate.

Where to leave humans.

Which time to return to humans.

And to whom to return the corporate value born by AI again.

That choice itself expresses CHANEL’s values.

And when you connect humans, AI, Leadership, Diversity, Craft, and employees this far, you reach the final question of Chapter 4.

How to establish all of them as one Organization Architecture.

In the next section, we integrate the entire chapter.

Section 7: Human-centered organization

Section 7: Human-centered organization

So far in this chapter, we have looked at human capital, Leena Nair, leadership, gender and diversity, artisans and employees, and humans and AI.

These are not separate themes.

Everything is penetrated by one question.

As what kind of existence does the company place humans at the center of design?

You can view humans as Cost.

You can place them as Resource.

You can analyze them as Data.

You can substitute some work with AI.

However, that alone cannot explain the value generation of a Maison called CHANEL.

This is because at CHANEL, humans are not just Input to corporate activities, but subjects that generate value itself.

—

What is Human-Centered

The term “human-centered” easily becomes ambiguous.

Be kind to employees.

Enhance welfare.

Create an easy-to-work environment.

Of course, it is important.

However, Human-Centered Organization is deeper than that.

Humans

Observe.

Judge.

Create.

Make.

Relate.

Learn.

Teach.

Take responsibility.

It is to place these abilities at the center of corporate Architecture.

In other words, Human-Centered ≠ Employee Benefit, and Human-Centered = Human Agency at the Core of Value Creation.

—

Humans are not execution devices

In 20th-century large-scale companies, high productivity was realized by subdividing work, standardizing, and placing humans in Process.

This method has great rationality.

However, in an era where AI can execute standard processing in large quantities, the meaning of leaving humans as a mere Execution Layer becomes thin.

Rather, work remains for humans such as:

See exceptions.

Judge meaning.

Think of new possibilities.

Create relationships with others.

Take responsibility.

A human-centered organization is not an organization that places humans at the end of an Algorithm, but an organization that re-places humans as judgment subjects.

—

One Maison, Many Intelligences

Diverse intelligences exist at CHANEL.

Creative Intelligence.

Craft Intelligence.

Client Intelligence.

Managerial Intelligence.

Scientific Intelligence.

Technological Intelligence.

It is not that you should place any one of these at the center.

The company does not move with only Creative.

Maison cannot create with only Finance.

It does not become CHANEL with only AI.

What is important is the connection of Many Intelligences → One Maison.

—

Integration, not unification

Here, making the organization one is not changing everyone to the same thinking.

Artisans have the logic of artisans.

Creators have the logic of Creators.

Technology has the logic of Technology.

Boutique has the Reality of customer contact.

Do not erase those differences.

Connect by common Purpose, Principle, and Responsibility.

Difference + Connection = Coherence.

—

Hierarchy does not disappear

Just because it is a Human-Centered Organization, there is no need to completely eliminate Hierarchy.

There is a CEO.

There is a Creative Director.

There is a Manager.

There is a person in charge.

What is important is that Hierarchy does not stop Knowledge Flow.

Cannot speak because it is a lower position.

Not heard because it is not headquarters.

Cannot propose because it is young.

In this state, you lose the Human Intelligence existing in the organization.

—

Separate Authority and Voice

There is no need to give everyone the same decision-making power.

But you can make it an organization where everyone can provide Observation.

Therefore, create a structure of “Voice is distributed. Authority is explicit.”

Listen widely.

Decide clearly.

And do not make ambiguous who decided.

This is a principle that connects Leadership and Diversity up to the previous section.

—

Make the organization a Sensor Network

Customer changes are visible in Boutiques.

Material and technical changes are visible in Ateliers.

Procurement Risk is visible in Supply Chain.

New culture is visible to young employees.

AI possibilities and Risks are visible to Technology Team.

Flow these to the corporate core.

Then the entire organization becomes one Sensor Network.

Human Observation → Shared Intelligence → Decision.

—

Listening Organization

Do not depend Listening only on the CEO’s individual personality.

Feedback.

Dialogue.

Cross-functional Team.

Internal Mobility.

Knowledge System.

Enable information to move as an organization Architecture.

Important Signals should not disappear in the middle of the hierarchy.

This becomes the condition for a learning Maison.

—

Learning Organization

Just gathering information is not enough.

Need to learn.

Succeeded.

Why did it succeed?

Failed.

Why did it fail?

A new method functioned in a certain Boutique.

Can it be used in other regions?

New technology was born in Craft.

How to pass it to the next generation?

Convert experience into Organization Capability.

—

From Individual Experience to Institutional Learning

That conversion becomes Experience → Reflection → Knowledge → Sharing → New Practice.

Here, human experience changes into the intelligence of the entire company.

AI can greatly support this Knowledge Flow.

However, the subject that decides what to learn remains with humans.

—

Do not place AI at the center of the organization

In next-generation companies, AI enters all departments.

That is why the position on Architecture is important.

Do not place AI at the center and arrange humans around it.

Place human Purpose, Work, and Relationship first.

Place AI according to that need.

Keep the order of Human → Purpose → Organization → AI.

—

Beyond Human-in-the-loop

In AI Governance, the expression Human-in-the-loop is often used.

However, in Human-Centered Organization, humans are not just approvers placed in the middle of AI Process.

In the first place,

For what purpose to use AI.

What to automate.

How far to give authority.

What not to hand over to AI.

Humans decide.

Humans are not part of the Loop, but the subject that designs the Loop.

—

Protect Agency as AI increases

AI recommends.

Humans follow.

If you repeat this, even if humans remain in form, judgment ability will weaken.

Therefore, being able to Override becomes important.

It is okay to judge differently from AI.

Think of reasons.

Verify results.

From there, both AI and humans learn.

Protecting Human Agency also protects future Human Capability.

—

Redesign Human Time

One of the most important Resources in organization design in the AI era is time.

10 hours of work became 2 hours by AI.

If you just fill the 8 hours with more work, it is hard to call it human-centered.

Re-place a part to

Creation.

Client Relationship.

Learning.

Mentoring.

Craft.

Reflection.

In other words, reinvest time born by AI into Human Value.

—

Recovered Human Time

You can also think of this as a management indicator.

Not how many hours reduced by AI.

But how many hours were returned to more human and high-value work.

Advance Productivity Measurement one step to Human Capability Measurement.

—

Make Craft and Corporate one

At CHANEL, it is easy to think of Craft as cultural assets and Corporate Function as management functions separately.

However, from long-term corporate value, both are circulating.

Finance invests.

Workshops maintain skills.

Creative Team issues new requests.

Artisans convert to Reality.

Boutique delivers to customers.

Profit is born.

Invest again.

In other words, there is a cycle of Capital → Human → Creation → Client → Capital.

—

Profit is not the end point

Profit is indispensable even in Human-Centered Company.

Without profit, talent development, investment in Craft, and environmental investment will not continue.

However, there is no need to treat profit only as the final goal.

Return profit to the next capability formation.

If you make it Profit → Reinvestment → Capability → Future Value, profit becomes a circulation medium for company continuation.

—

Do not divide Employee and Client

There is no need to make customer-centered management and employee-centered management conflict.

Employees can learn.

Have discretion.

Have necessary Technology.

Can rest appropriately.

As a result, they can provide high value to customers.

Invest revenue obtained from customers into employees and Craft again.

Form a cycle of Employee Value ⇄ Client Value.

—

Suppliers are not outside the organization

Even if they are external companies on the legal side, there are Suppliers who deeply participate in CHANEL’s product value formation.

Therefore, the principle of Human-Centered cannot suddenly end at the corporate boundary.

Safety.

Human rights.

Skills.

Long-term relationship.

Responsible procurement.

Spread these to the entire Value Chain.

View the organization not as a single Company, but as a Human Ecosystem.

—

Turn Diversity into intelligence

Just hiring different people is not enough.

That difference needs to enter Organization Learning.

Different bodies.

Culture.

Generation.

Expertise.

Each observes different Reality.

Do not exclude that Difference, connect to decision-making.

When it becomes Diversity → Observation → Dialogue → Decision, diversity becomes management capability.

—

Psychological Safety and Excellence

Human-centered organization is not an organization that lowers requirement levels.

CHANEL needs high Quality Standard.

However, high standards and fear are not the same.

Do not hide mistakes.

Report problems quickly.

Can say I don’t know.

Can say different opinions.

Seek Excellent results on top of that.

Establish Psychological Safety × High Standards simultaneously.

—

Human-Centered is not sweet management

Rather, it is difficult.

Evaluate ability.

Seek responsibility.

Perform strict Decision in some cases.

However, do not reduce humans only to numbers.

Do not fix Potential only with short-term Performance.

Do not equate failure and incompetence.

Have the premise that humans have learning potential.

—

Potential-Based Organization

Conventional organizations place

“What can this person do now”

at the center.

In next-generation organizations, also look at

“What can this person learn and grow into.”

Handle both Current Capability and Future Potential.

This is Human Capital Strategy possible only because it is a long-term company.

—

Do not make Career a straight line

Not promotion unless you become a Manager.

With this way of thinking, you lose high expertise.

Craftsperson.

Technologist.

Client Expert.

Creative Specialist.

Have multiple Career Paths that can contribute to the company while deepening expertise.

Implement Human Diversity into Organization Architecture.

—

Train the next generation

The results of an organization in a 100-year company are not just current performance.

Did the next artisan grow?

Did the next Leader grow?

Did the next Creative Talent grow?

Did people who can understand new Technology grow?

In other words, companies need to produce both Current Performance + Future Capability.

—

Regenerative Organization
If you integrate up to here, the final form of a human-centered organization becomes not an “organization that consumes humans,” but an “organization that regenerates human ability.”
Work.
Experience.
Learn.
Ability increases.
Teach others.
Organization learns.

Ability is expanded by Technology.

Generate higher value.

Repeat this.

—

Human Regeneration Loop

Minimized, it becomes

Human Potential → Learning → Capability → Creation / Service → Client Value → Enterprise Value → Reinvestment → Greater Human Potential.

This is not just a Human Resources Cycle.

It is the long-term value generation Cycle of the company called CHANEL itself.

—

Do not complete the organization

And there is no end point to this Algorithm.

The organization Architecture optimal in 2026 is not necessarily optimal in 2036.

AI changes.

Customers change.

Society changes.

Work styles change.

Creative Leadership also changes generations.

Therefore, Learning and Renewal are also necessary for the Organization itself.

—
Organization as Living System
Even if the organization chart is fixed, the Reality of the organization always changes.
People enter.
People grow.
People leave.

Knowledge moves.

Technology enters.

New relationships are born.

Therefore, view the next-generation CHANEL not as a fixed Architecture, but as a Human System that continuously updates itself.

—

Conclusion of Section 7

A human-centered organization is not just an organization that protects humans from Technology.

It is an organization that connects human potential with Technology, Capital, Craft, Leadership, Diversity, customers, and corporate culture, and converts it into a larger value generation capability.

There,

Humans are subjects, not Resources.

AI expands the subject, not replaces it.

Leadership connects, not dominates.

Diversity becomes observation capability, not numbers.

Craft is regenerated to the next generation, not preservation of the past.

Profit returns to reinvestment, not an end point.

And the company is designed in a direction where ability is further accumulated by working, not consuming human ability.

Its minimum structure is Human → Craft / Creation / Relationship → Client Value → Enterprise Value → Reinvestment → Human.

As long as this cycle continues, CHANEL’s Human Capital becomes not a fixed Stock, but corporate capability that regenerates across generations.

And here, Part II “Human” closes.

Change perspective next.

The human ability, Craft, customer relationship, and brand value seen so far have all been formed in time.

In normal economy, if time passes, products become old and value decreases.

However, at CHANEL, is that really so?

Attachment born by being used.

Lifespan extended by repair.

Skills passed from artisan to artisan.

Products owned across generations.

And the Maison’s history accumulated for over 100 years.

There exists value formation that cannot be explained only by time passage = depreciation.

Part III Time

—Does time only reduce value?

In the next part, we re-read CHANEL’s value from the axis called “time.”

With love and respect, mandala