Leadership Under the Big Top

During the summer of 2009, Daniel Lamarre, the chief executive of Cirque du Soleil, attended a seminar at which Warren Buffet was a guest speaker.

During the summer of 2009, Daniel Lamarre, the chief executive of Cirque du Soleil, attended a seminar at which Warren Buffet was a guest speaker. Long an admirer of Buffet, Lamarre made his way over to the celebrated financier and introduced himself. When Buffet heard that Lamarre was in charge of the popular and innovative Montreal-based entertainment enterprise, he said, “Daniel, I don’t know you, but I want to tell you something.” Lamarre was intrigued. He was about to get a personal insight from perhaps the most influential investment genius of the past half century.

“What is it, Mr. Buffet?” Lamarre said.

“I’ve probably seen most of your shows and you have never, ever disappointed me,” Buffet replied.

Buffet’s imprimatur was obviously welcome but it reinforced a fact of Lamarre’s daily life. “I was blown away,” Lamarre recalled. “Because it summarized so well the situation we are in. We have a lot of pressure not to disappoint people, because you’re only as good as your last show.”

Given that Cirque du Soleil has been cheered by nearly 100 million people in 300 cities on five continents for more than a quarter century, it would seem that worries about disappointing audiences would be unnecessary. The privately held company, with a reported $800 million in revenues (nearly double that of the New York Yankees), 5,000 employees (including more than 1,200 performers representing 50 countries), has grown to unimagined proportions since its humble beginnings on the streets of Quebec City in 1984. Nearly 15 million people saw a Cirque show in 2010.

But for Lamarre, the task of running this massive avant-garde entertainment entity is both exhilarating and daunting. His leadership skills are tested at every turn because Cirque is not only privately held and still under the control of its iconoclastic billionaire founder Guy Laliberté, but it is unlike most other business organizations. At Cirque, sound business decisions are essential, but here, in this dynamic world of magical and awe-inspiring live productions, creativity is the oxygen for the company’s success. After 26 years, hundreds of thousands of performances and billions of dollars in ticket sales, Cirque must never, ever disappoint its audience. It learned that costly lesson when “Banana Shpeel,” its initial attempt at a Broadway show, closed in the summer of 2010 after just six weeks in New York due to disastrous reviews and a disillusioned audience. According to The New York Times, “Banana Shpeel” was a $25 million debacle.

Given the harsh economy and the shrinking entertainment dollar, the pressure is on Lamarre to continue to persuade show-goers to put their derrières in Cirque seats. Although its touring shows showed a 7 percent increase during the recession, in Las Vegas, where Cirque has seven permanent shows, revenues were down 7 percent, as fewer visitors came to Sin City. And in a world of instant gratification, an ever-decreasing attention span, and ceaseless, eye-popping technological advances in entertainment offerings, keeping Cirque du Soleil fresh, exciting and desirable is a colossal challenge.

“My biggest kick in life is to catch people by surprise,” Lamarre said. “When we opened “OVO,” our latest show, in Montreal in 2009, at the premiere people kept coming up to me saying, `This is amazing. You caught us by surprise again!’ And that’s what I have to nurture here.”

Entertainment executives are a different breed, said Peter Guber, a veteran, award-winning Hollywood producer (“Rain Man,” “Batman,” “The Deep”), former CEO of Sony Pictures and currently CEO of Mandalay Entertainment. It requires a willingness to regularly push beyond the business comfort zone. Fear of failure is also not an option. “Failing to fail sometimes tells you that you are not taking enough chances,” said Guber. “If you are risk averse in a creative enterprise, your statistical probability for failure is much higher. If you don’t take chances, you won’t get real victories. You’ll get remakes, rehash and revivals.”

As a case study in leadership, Lamarre offers a unique set of parameters. The 57-year old former hockey player, journalist, public relations executive and network television chief must walk along a leadership tightrope that is as intimidating as the real tightropes that his cast of talented acrobats must cross in the many Cirque productions. Like them, he is working without a net, and any misstep for this vaunted brand can result in a disastrous fall.

Lamarre does have some advantages over most corporate chieftains. Because Cirque is privately held, Lamarre has no shareholders or board of directors to whom he has to answer. Instead, he must work in the very long and intimidating shadow of Guy Laliberté, the former stilt walker, accordionist and fire eater who originally founded Cirque in 1984. Laliberté retains a reported 80 percent of the company, and Forbes magazine estimated his net worth at $2.7 billion in 2010. Laliberté is a noted philanthropist and free spirit who moonlights as a professional poker player. He spent an estimated $25 million to take a space flight on a Russian Soyuz rocket and visit the International Space Station for 12 days in 2009 (where he brought each crew member a clown nose). He is also the creative genius behind Cirque du Soleil and its wildly imaginative version of the circus.

Laliberté recruited Lamarre to Cirque in 2001 and named him CEO in 2006. Lamarre insisted that he is not daunted by trying to fill Laliberté’s impressively large shoes because “Guy, unlike a lot of entrepreneurs, has always had the facility to delegate,” Lamarre said. “He knows what he wants to do and what he doesn’t want to do, and he doesn’t want to manage the company on a day-to-day basis.” What interests Laliberté is traveling the world seeking new concepts, new performers and new trends that can coalesce into a Cirque production.

Lamarre makes the business decisions and has established a firm leadership position within the organization. It was Lamarre, for example, who spent three years negotiating with Apple Corps Ltd. and MGM Resorts to pave the way for the highly successful Las Vegas show, “LOVE,” which celebrates the music of The Beatles. In 2008, Lamarre also spearheaded the sale of a 20 percent stake in Cirque for $600 million to Istithmar World, an investment company, and Nakheel, a real estate developer, which are both subsidiaries of Dubai World. He and Laliberté long ago established a symbiotic relationship with a single goal: to make Cirque du Soleil bigger, better and sustainable.

The media-shy Laliberté, who declined to be interviewed for this article, spoke about Lamarre in a “Biographies” documentary made in 2009 by Canal D in Quebec. “Daniel has a great quality: he is patient,” Laliberté said. “Even if he is eager for things to get done, when his mind is set, he will take the time and be as patient as he possibly can be to close a deal.”

What makes Laliberté most comfortable is Lamarre’s leadership acumen, established over a long and varied career — much of which has been in privately held, family-run organizations. In addition, he can feel Lamarre’s deep, empathetic relationship with the artists who are the lifeblood of Cirque. Lamarre has unabashed affection for these performers, undoubtedly feeling that lure of the circus that tempts just about every boy who has visited the Big Top.

Without animal acts, three rings and sawdust, Cirque is nearly impossible to describe. One thing it is decidedly not is a Ringling Brothers & Barnum and Bailey clone. It encompasses some circus-like acts such as jugglers, tightrope walkers, contortionists, acrobats and clowns, but each of its 21 shows is a captivating amalgamation of jaw-dropping sights and sounds. Citing Cirque as its key case study, the best-selling business book, “Blue Ocean Strategy,” by W. Chan Kim and Renée Mauborgne (Harvard Business School Press, 2005), pointed out that in less than 20 years, Cirque had attained a revenue level that took Ringling Brothers more than 100 years to reach. What was more remarkable, the authors pointed out, was that the growth was attained in a declining industry in which traditional strategic analysis pointed to limited potential for growth.

Most impressive was the fact that Cirque did not achieve its success by drawing customers from competitors. “Instead,” wrote Kim and Mauborgne, “it created uncontested new market space that made the competition irrelevant. It appealed to a whole new group of customers — adults and corporate clients prepared to pay a price that is several times as expensive as traditional circuses for their unprecedented entertainment experience.”

For example, in 2010, Cirque launched “Viva Elvis,” a tribute to Elvis Presley, which became its seventh resident show in Las Vegas, joining two giant hits, the aquatic sensation “O” and the equally popular “LOVE.” Yet another new show featuring the music and choreography of Michael Jackson is slated to debut in 2011. At its touring shows, under its signature blue and yellow big top, audiences are transfixed by the dazzling skills of its performers — former gymnasts, dancers, swimmers, tumblers and divers — who create tightly choreographed fantasy. Most patrons, adults and children alike, spend the evening in rapt wonder repeating to themselves, “That’s amazing!”

To create a steady stream of hit shows, Cirque has to offer significant levels of freedom to the creators of these dream-like productions. With 1,200 performers from 50 countries speaking 25 different languages, the production capabilities alone are staggering in both cost and staff time. Shows must be conceived, scripts written, music composed, sets designed, costumes handmade, performers hired, trained and rehearsed, and the logistics of complex tours calculated and executed. And the difference between success and failure rests in the hands of an engaged and effective leadership.

A Road Less Traveled

At Cirque’s massive international headquarters in a nondescript neighborhood in northeast Montreal, Daniel Lamarre is remarkably calm, given the pulsing, energized organization that surrounds him. The Montreal campus is where everything is conceived, designed and produced for all Cirque shows. A tour of the vast complex reveals troops of acrobats flying off trampolines and teeter-totters, perfecting techniques and practicing for new and existing productions. Staffs of artisans work on hats, shoes and colorfully extravagant costumes, while set designers construct various stages for a newly conceived arena show that will tour heretofore untried venues.

In his corner office, Lamarre serves as über-maestro of the ingenious, hyperactive organization. Just 5’7”, Lamarre’s diminutive stature belies his athletic achievements, along with his large organizational presence. A native of Grand Mère, a tiny hamlet halfway between Quebec City and Montreal, Lamarre speaks fluent English with a marked French-Canadian accent. He was a good enough hockey player to reach Juniors, the tough Canadian minor leagues that are a regular breeding ground for NHL stars. But unlike most jocks, Lamarre was also an esthete and a theater lover. He took roles in productions of Molière at school, trying to juggle rehearsals with hockey or football practice. He recalls being immersed “in the world of artists and dreamers” one night and the next night being in the middle of a fist-pounding melee on the ice with his hockey teammates.

He became a journalist at age 16, writing for the local daily, and throughout college at Ottawa University, he envisioned a long journalism career. In fact, after college, he never worked as a journalist again. Lamarre’s résumé is marked by a string of impressive positions that found him when he was not looking. He joined a Montreal public relations (PR) firm after graduation and was just gaining career traction when a headhunter called with an opportunity. In the early 1980s, Burson-Marstel-ler, the giant New York-based PR firm, wanted to start a Montreal office and requested an interview with Lamarre.

He politely declined. He was just 28 years old, and the open position required a 40-something PR veteran with 15 years’ experience under his belt. The headhunter persisted and despite the discrepancy in qualifications, Burson offered him the position. Opening Montreal’s Burson office, Lamarre immediately snagged two or three new clients and caught the attention of the firm’s legendary founder and CEO, Harold Burson.

Now 90, Harold Burson has vivid memories of Lamarre. “The first time I met him I was very impressed,” Burson said. “He was smart. He engaged people very well and came across as someone very secure, yet nonthreatening, nonaggressive. He showed an ability to motivate people at an early age and when he left us, I was very unhappy.” Indeed, Burson expected Lamarre’s career to take off. “I knew he would be successful in some part of the business, and honestly, I thought he might possibly succeed me.”

Recruited away to National Public Relations, an emerging Canadian PR agency founded by Luc Beauregard, Lamarre helped build the firm into Canada’s largest PR operation with clients such as Molson Beer, Coca-Cola and McDonald’s. In an ironic twist, National ended up acquiring the very Burson-Marsteller office in Montreal that Lamarre had created. During his tenure at National, Lamarre signed the then-obscure Cirque du Soleil as a client and helped guide Laliberté’s early efforts at building an audience. At one troubled juncture, Laliberté called Lamarre and said he could not pay the agency’s fee. Lamarre graciously forgave the payment and wished Laliberté luck. It was a gesture Laliberté would not forget.

Lamarre stayed at National until 1997, believing he had found his professional home. But once again, a call from out of the blue made Lamarre pack up his office. André Chagnon, Quebec’s powerful media magnate and owner of the TVA Group, Quebec’s largest private television network, recruited Lamarre to run his vast media empire. It was the proverbial offer too good to refuse. National’s Beauregard, like Burson, had viewed Lamarre as his eventual successor and rued his loss.

“I knew he could not refuse that opportunity. He’s a good leader,” Beauregard said. “He has the ability to make people feel comfortable working with him, and he is always thinking big. He has a knack for surrounding himself with people who are enthusiastic about working for him.”

Being a lover of the media and the arts, TVA was a dream job. Lamarre calls André Chagnon “my spiritual dad.” A highly successful entrepreneur, Chagnon admired Lamarre’s ambition and his ability to see the enterprise as his own, charging forward in unconventional directions and thinking outside the box. If anything, Chagnon had to rein in Lamarre’s enthusiasm. “He taught me how to focus,” Lamarre said. “He told me, ‘I will support you, but you cannot do 10 things at the same time. So which do you really believe is going to change your life?’ ” Lamarre learned that a leader in an entertainment organization can pursue unicorns but at some point, he or she must build a case for a good idea by going through the process of understanding whether the idea can live or not.

Among Lamarre’s notable deals was landing Cirque du Soleil’s now-valuable global broadcast television rights. He called Cirque seeking the rights and was told that a deal had already been struck with another media outlet. When Laliberté got wind of the situation, he ordered his television executive to pull out of the other deal and award it to Lamarre. “This guy helped me out 12 years ago and he wants our television rights,” Laliberté said. “Do what you have to.” Lamarre has made career-long habit of helping out ambitious newcomers, and he is constantly rewarded with unexpected paybacks.

Less than four years later, Chagnon decided to sell TVA to an outside group, which made it clear they wanted Lamarre to remain as president and CEO. But once again, the phone rang. It was the unmistakable voice of Laliberté, who said, “I hear your spiritual father is leaving. Why don’t you join the circus?”

Lamarre was floored by the offer. He loved the TV business and had every intention of staying on with the new owners. But Cirque offered not just glitz and glamour but the chance to experience a truly international organization. Lamarre, who views himself as a rational thinker, grappled with the decision for three agonizing weeks.

“It was the toughest and most emotional decision of my life,” Lamarre said. “There was nothing rational about it.” He consulted with his closest advisor, his father. “My dad was so happy that I was at the TV network,” Lamarre recalled. “I was a celebrity to him, and he was excited about that. So when I said I’m going to join the circus, he said, ‘What are you doing?’ The only concept he had of a circus was of the grand chapiteau — the Big Top — and he envisioned me working in a trailer.”

Throwing caution to the wind, Lamarre accepted Laliberté’s offer and in 2001 joined Cirque du Soleil as part of Laliberté’s brain trust. Though there had been no formal talk about Lamarre’s eventually succeeding Laliberté as CEO, it was “implied,” according to Lamarre. “It was not a given,” he said. “I had to earn it.”

Immersing himself in Cirque’s distinctive culture and business model, Lamarre struggled. “The first year was miserable,” he said. “It is such a unique entity that there is no benchmark to study.” Laliberté counseled patience and urged Lamarre to take his time learning the new environment. Within 10 months, he asked Lamarre to take over the core business and eventually stepped aside and made him chief executive in 2006. His decade at Cirque has been marked by stunning growth, increased profitability and impressive expansion of the brand. More than anything, it has continuously tested Lamarre’s leadership skills.

The Art of Leadership

On an early October Saturday night, a new Cirque du Soleil show named, “Corteo” was set to open in Moscow. George Cohon, founder of McDonald’s in Canada and Russia, accompanied Lamarre to the gala opening. Cohon and his son Craig had agreed to Lamarre’s request a year earlier to create a partnership to bring Cirque to the Russian and Ukrainian markets. “It was a magical night,” Cohon said about the “Corteo” opening. “The crowds loved it.”

A couple of hours before showtime, amid the VIPs decked out in all their finery, Lamarre turned to Cohon and said, “Let’s go into the kitchen.” There, the Cirque performers were enjoying a meal prior to the show, and Lamarre wanted to greet them and chat. “He knows them and they know him,” Cohon said. “It’s not like some CEO in a dark suit wanting to shake hands. He is more like family. He is like the patriarch running the family.” Cohon, who has worked closely with Lamarre since Lamarre handled the McDonald’s Canada account at National Public Relations, noted that Lamarre makes a point of visiting every Cirque show at least once a year to meet with the artists.

“Sitting with the artists, having coffee and talking, he can learn more about what’s going on at the ground level of the company and with the brand than anything else he could be doing,” Cohon said. “That’s what a good leader should be doing.”

For Lamarre, the connection to his artists and performers is crucial to his vision and strategy. “I love artists,” he declared. “My mission is to find work for artists.” That admiration and comfort among the creative visionaries of Cirque, from Laliberté on down throughout the organization, has fueled Lamarre’s success. He is convinced that most traditional business leaders would fail at Cirque because it requires a vastly different point of reference from the B-School mind-set.

“In the term, ‘show business,’ show comes first for a reason,” Lamarre stated. “If you have a great show, you’ll have a great business. It’s as simple as that. My job is putting together the right financial conditions to permit Guy and his creative team and our artists to live their dreams.”

Leading an entertainment enterprise is rife with atypical challenges, experts say.

“One thing we’ve seen pretty conclusively is that an effective leader in an entertainment organization has to be bilingual, in the sense that they have to talk creative and they have to be able to talk business,” added David Logan, a professor at the University of Southern California’s Marshall School of Business who teaches courses for executives in the entertainment industry.

Indeed, Lamarre sees himself as Cirque’s chief facilitator and consensus-builder. He describes his leadership style as consultative more than command-and-control.

“I like to consult people,” he said. “I have to let my senior people breathe. If I appreciate that Guy delegates to me, I have to have the same generosity with others.”

Like all strong leaders, Lamarre won’t hesitate to make a decision if consensus isn’t available. But he prefers a team effort. “I like to say to people, `Don’t make me make a decision. If you are in charge, just do it. If you have to come back to me, maybe that’s a bad sign.’” That said, he allows debate to continue for just so long before decisions get made.

Above one of the stairwells inside Cirque’s headquarters hangs a giant mechanical horse replete with bells and whistles and movable parts. It was an expensive prop that never found its way into a show, and Lamarre had it hung in a visible location to remind people that you can throw money at things, “but when it’s a bad idea, it’s a bad idea.”

And inherent in the mechanical horse is the thin line Lamarre must tread. Leading an entertainment organization requires a certain psychological makeup.

“As a leader in the entertainment industry, you are in the experience-rendering business,” said Guber. “Entertainment is aimed at the heart, while most other businesses are aimed at the head or the wallet. The secret is to understand the artist and the audience. The experience has to be emotional so that it can be memorable and ultimately actionable, which means the audience can tell somebody else about their experience. To lead such a business, it takes somebody who understands that he is not the original artist and what he must do is connect the artist with the audience.”

And artists inevitably depend on taking risks, testing their creative passions, finding new outlets for their ideas. For that reason, Lamarre is unfazed by the “Banana Shpeel” closing in New York. He doesn’t consider the effort a failure, but a learning experience. Cirque is determined to have a permanent presence in New York City, the world’s entertainment capital, and a Broadway setting seemed ideal. Marrying a bit of vaudeville with slices of Cirque’s traditional fare just didn’t work. Cirque’s brand is so strong now that audiences come in with specific expectations. Undaunted, Cirque will be opening an annual show at Radio City Music Hall in 2011, and Lamarre continues to look for other opportunities.

“You have to understand the limits of your brand,” Lamarre said. “But my main concern is not about diluting the brand. My main concern is remaining a relevant brand because what scares me is that one day, a kid somewhere wakes up with a great idea that will make us look like une chose du passé (a thing of the past). That’s why we are investing a lot of money in research and development so that we remain on the leading edge all the time.”

Sustainability is, at the end of the day, a leader’s greatest challenge. Lamarre has a visceral understanding of Cirque’s DNA: its roots, its values, its goals. He has driven Cirque into new business initiatives and revenue streams, such as creating original content for television and DVD; organizing private functions for corporate clients; creating a merchandizing division to sell Cirque products and licensing its brand to hospitality outlets such as restaurants and hotels.

Lamarre believes his ultimate mandate is profitably perpetuating the Cirque brand well into the future. “A lot of companies have been successful for 25 years,” he said. “But there are not that many companies that have been successful for 50 years or more. And my job is to put in place the people who will ensure Cirque’s success over the next 25 years.”

Glenn Rifkin has written for The New York Times, Fast Company, Strategy + Business, and many other publications.