The luxury market has seen a mixed performance, with economic uncertainty and geopolitical challenges affecting business around the world. Brands like LVMH and Kering recently reported third-quarter revenue declines. However, Hermès did not follow suit, as they posted higher than expected earningswith total sales of just under $4 billion and 11.4% revenue growth in the first nine months of 2024.

Hermès, led by Axel Dumas, a sixth-generation descendant of the brand’s founder, Thierry Hermès, began in 1837. Hermès, who happened to create Napoleon III’s saddles, built an unmistakable brand and a company that continues its upward trajectory while other brands appear to be slowing down. This is not just luck or coincidence; Hermès follows the principles that set it apart. These principles also translate well to organizational leadership, especially for CEOs and other business leaders who want to increase well-being and performance in the workplace. Here are four core lessons from Hermès that can help boost organizational health and performance in any kind of recession.

1. Deeply understand and serve your audience

Hermès’ main focus is clear: it caters to very wealthy customers. Every product and campaign message is created with this audience in mind. While it is true that Hermès’ target clientele is less sensitive to economic fluctuations, the brand’s strength lies in its understanding of the psychology and emotional needs of its customers. This understanding and non-violence allows Hermès to cultivate a rich and lasting customer brand experience.

Also, general managers can improve team engagement by cultivating a ‘listening culture’. As the workplace evolves and new generations fill its ranks, employee priorities shift from salary-focused incentives to quality of life and work-life integration. Leaders can teach their “audience” (i.e., their employees) by investing in one-on-one mentoring, creating safe feedback channels, and most importantly, truly acting on feedback. While this requires an initial investment, the results have positive long-term ramifications: improved recruitment, engagement and performance, as employees feel truly seen and valued.

2. Stay true to your core values

Many luxury brands rely on trendy collaborations or endorsements to stay visible and build their customer base, which can dilute their identity in the long run. Hermès, however, remains true to its heritage. Its commitment to originality, quality and craftsmanship is vital to its brand loyalty. A prime example is Hermès’ controlled supply: limiting production of the most coveted items increases demand, preserves exclusivity, and increases brand value by increasing scarcity and the aspiration factor.

For CEOs, creating an environment that reflects their organization’s core values ​​is crucial to building trust and a high-performance culture. Leaders can ensure that their decisions and messages consistently reflect the company’s unique identity and avoid trendy changes that compromise the essence of their brand by considering: “Are we creating an environment that reflects our company’s values ​​and heritage?

3. Prioritize quality over speed and quantity

Hermès is synonymous with meticulous craftsmanship. Their products are designed to last and the brand avoids mass production. Rather than chasing volume, Hermès focuses on artisanal quality and timelessness, which reinforces its exclusivity. This focus on quality provides an essential lesson in organizational well-being: quality must come before speed and quantity.

In a management context, this might mean fewer but more meaningful check-ins with employees or minimizing meetings in favor of deep work and productivity. Instead of implementing superficial perks, organizations can develop some high-impact initiatives that address true employee well-being priorities, such as financial healthmental well-being or career development opportunities. Focusing on quality over quantity builds a more caring and efficient workplace culture.

4. Operate with a legacy mindset

Hermès plays the long game as a heritage brand, viewing every decision as an investment in its heritage. As Martin Roll, a global business strategist and senior advisor at McKinsey, said Business Insider“You don’t buy a bag or a scarf for the Hermès season. You can justify it because it’s almost like a long-term asset in your household.” Most companies will chase short-term growth to look good around earnings, mortgaging some of their long-term success. The Hermès strategy, however, “sacrifices short-term growth,” Roll explains, “because they don’t pursue growth.”

Leadersit can also benefit from a long-term legacy perspective. Instead of fixating on immediate or short-term gains, consider building a lasting legacy through thoughtful decisions that prioritize employee well-being, leadership development, and a strong internal culture where team members can easily envision growth in within the company. This legacy approach can improve talent retention and establish a stable, high-performing organization that benefits everyone.

By deeply understanding and serving their employees, staying true to their values, prioritizing quality customer interactions, and operating with a legacy mindset, leaders can help their organizations withstand (and thrive despite) market volatility and global uncertainty, so as Hermès did.