Leading Leaders … a conversation with Pablo Isla, CEO of Inditex from 2005 to 2022, the Spanish fashion retailer with brands like Zara and Massimo Dutti … on leadership and innovation, lawyers and movies … and why he was ranked as the world’s best CEO

May 10, 2024

“I am a humble guy, I like to get things done, but I’m also very proud to have been ranked the world’s best CEO for two consecutive years”.

Pablo Isla is best known for his 17 year role as the Chairman and CEO of Inditex, the Spanish multinational clothing company that owns Zara, Pull & Bear, Massimo Dutti, Bershka, and many other brands. During that time he increased the market value of the business from around $15 to $85 billion.

This week at IE Business School in Madrid, where I lead their flagship executive program for business leaders stepping up to shape the future, I talked to him about his career, and in particular his approach to leadership, change and innovation.

Isla has just turned 60, and is a native of Madrid. He began his career in the legal sector, working as a corporate lawyer for various firms in Spain and the United States. He joined Inditex in 2000 as the Director of Legal Services. His deep understanding of corporate law and business strategy quickly propelled him through the ranks.

In 2005, he was asked to become the new CEO of the fast fashion company which was now one of the biggest in the world. “As a in-house lawyer I learnt a lot about the business very quickly. This meant that I could take on more operational roles because of I had a joined-up view of the business”.

5 years later, Inditex founder Amancio Ortega decided to step down as chairman, and asked Isla to step up to combine the chairman and CEO roles. “This was a huge honour” he told me. “To follow in the footsteps of a legend like Ortega was incredible. I immediately seized the opportunity to take on the responsibility of leading the business into the future”.

He is widely praised for his strategic vision and leadership style. Under his leadership, Inditex has become one of the world’s largest and most successful fashion retailers.
His strategy emphasizes a fast-fashion business model, which involves quickly responding to changing fashion trends and maintaining a high turnover of inventory.
He is known for his hands-on approach and attention to detail. He is closely involved in all aspects of the company’s operations, from design and production to distribution and retail.
During his 17-year tenure at Inditex, the group’s market cap rose sixfold. In 2021, his last full year leading the retailer, Inditex generated a net profit of €3.24bn on a turnover of €27.72bn.

In 2017, Harvard Business Review recognized Pablo Isla as the world’s best-performing CEO, by Harvard Business Review. And again in 2018. HBR said that what stands out is the single word description employees use to convey Isla’s management style. Humble. It’s how his employees talk about him and how he talks of his approach that’s the most telling. He is known for rejecting a meeting culture and the use of hierarchy to command, control, and ego-feed, instead favouring making decisions informally in partnership with his people as he “manages by walking around”.

In fact Isla is so notoriously shy of being in the spotlight that he doesn’t go to his own store openings. Isla described his approach to HBR: “What we want to be relevant is the company or the store opening, and everything always is the result of the work of a team of people. The strength of our company is the combination of everybody, much more than of any single person. And I can tell you that as a company, we try to be a low-profile company, being humble, of course being very ambitious, but being humble. And if we have a big store opening, we want the store to be the relevant thing, and not any particular person.”

Humble, but also very proud to have been ranked the world’s best CEO, I can tell. “When I was ranked world’s best CEO for two consecutive years, what pleased me most was that the metrics were not just financial. They also included the contribution to the environment and society”.

We talk about the current world, and the dramatic changes we are now seeing through technology, as well as through geopolitical shifts, and much more. “I don’t worry too much about everything happening around me – the markets, the competitors, the analysts” he says. Echoing the single-minded attitude of many sports people “I focus 100% on what I am trying to achieve. Not the strategies or agendas of others. The secret of leading a business is focus, focus, focus”.

I asked him what he thought of the rapid growth of Chinese “ultra-fast fashion” online retailers, Shein and Temu. Despite reaching more people than brands like Zara, he says “I am not interested in these companies, I have not looked at them in detail”.

Where he does focus, is putting the spotlight on what is most relevant to the consumer. The core shopper lusting for a $50 pair of affordable but high-fashion high heels from Zara wants to hear about the new store in her neighbourhood, not about how in control some privileged executive is. And he puts the spotlight on the most relevant employees – the front line store managers who are empowered to make product selections and whom he supports via a robust promote from within policy.

During his tenure as CEO, Inditex experienced significant growth and expansion. The company’s revenue and profits have consistently increased, and it has expanded its presence to over 7,000 stores in more than 90 countries.

Inditex’s success can be attributed to its innovative business model, efficient supply chain management, and focus on customer preferences. Under Isla’s leadership, Inditex has also prioritizsd sustainability and corporate social responsibility, implementing various initiatives to reduce its environmental footprint and promote ethical sourcing and labour practices.

His hands-on role as leader is very much about facilitated and inspiring teamwork. “The secret to getting things done is to give teams stretch and safety – plus confidence and courage”. He gave the example of launching Zara’s digital strategy. “The important thing was to make the right decision at the right time. It was crucial that we found somebody respected within the business to lead the project, and not to rush into a new idea which could alienate existing people or projects. We needed to ensure that digital added value to the existing business”.

And his view on leading in a world of relentless change? “Keep your eyes and ears open. Learn from everyone, not just in formal ways, but mostly informally. Read interesting articles, books. Meet new people, learn from other sectors”.

In 2022 he stepped down from Inditex, and reflected “After almost 20 years at the company I wanted to have more flexibility beyond always looking to the next quarterly report. It was time to hand over the business to the next generation, while also time for me to enjoy life more”. He has taken on a number of roles, including senior non-executive director of Nestle, an advisory role with private equity firm Cinvin, and chair of Italian clean energy company AmaraNZero.

“I have also started a film business, which I set up with two partners, and in which I love creative process”. Fonte Films is a production company seeking to revitalise the Spanish film-making sector. He talked about his deep passion for movies, and immediately started to share some of his favourites. I asked him whether he should have made this jump years ago, to combine his career with what he loves.

And then he pauses. “You know, what I really love is management” he said with all seriousness, and I believed him. “I love bringing teams of people together to solve problems, and to drive progress”.

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