A transformation born from the failure of a cost-cutting strategy
Carlos Verkaeren took over as head of the Poult group in 2001. He started the group’s transformation project in 2006. “It took me 5 years to understand a number of things”, he says.
In 2003, Poult launched a social plan to resolve major operational difficulties. The company’s results improved rapidly thanks to the economies of scale achieved during the restructuring, only to deteriorate again. Realizing that budget cuts are not a long-term solution, Carlos thinks about other ways of doing things.
“I asked myself how to make the company much more innovative. The biscuit market is fairly flat, with little growth and a lot of competition. Was it really possible to get back to growth?”, explains Poult’s former CEO.
A progressive intellectual path
As he delves deeper into the subject, Carlos realises that what makes the difference in the success of a company is the way people collaborate and engage. He then begins to read books on collaborative approaches and to meet business leaders who have taken the plunge.
He wanted to understand how they managed to maintain double-digit growth and profitability for years, regardless of market effects, marketing actions or product launches.
Creating a ripple effect: the Montauban experience
The project really got off to a good start when the Montauban factory in the south-west of France closed. We’re not talking about a definitive closure, but a two-day closure to attend, on a voluntary basis, a seminar organised by the group’s management. The Montauban factory is Poult’s main production site, 500 people work there, 65% of whom are workers.
All the employees of this factory were invited to go to a theatre, rented on occasion, to discover the potential new vision of the company. They then defined together a new organisational model, more collaborative, more sustainable and more efficient.
“For the first time, we let 500 employees organize themselves while providing coaching as needed. The Montauban experience was a test, a sort of Maginot line that we drew between this factory and the rest of the group to see how the project would evolve. Giving this pilot site the necessary time and supervised freedom to move forward would allow better integration in the other factories and at headquarters”, says Poult’s former CEO.
A profound questioning of managerial role and power
In 2006, while Carlos was looking for inspiration on organisational transformation, he discovered Ricardo Semler and Gary Hamel. Ricardo is a Brazilian entrepreneur who has transformed Semco, the company formerly owned by his father, into a company that, thanks to the implementation of collaborative governance, has grown at 25% per year for 20 years (Semco’s turnover grew from $4 million in 1982 to over $200 million in 2003). Gary Hamel is an American expert in innovative management practices and co-creator of the core competency concept.
Reading their books, Carlos reflects on how he wants or should exercise power in his company. He evokes Abraham Lincoln who said that almost all men can cope with adversity, but that if you want to test someone’s ability, you have to give them power. He then begins a work of introspection, questioning himself and getting to know himself better.
“To be able to question oneself, one’s background, studies, work and experience requires humility. We are not all equal in the capacity to let go, to trust and to delegate”, Carlos shares.
He talks about one of the fundamental responsibilities of managers: detaching themselves from form to focus on substance in order to work today on what the company will be like in a few years’ time. He invites managers to get out of the company to detect weak market signals, identify the challenges that the company will face in 5 to 10 years and imagine the answers to bring internally to meet these challenges.
More freedom yes, but framed
Giving more freedom to the members of an organisation means finding the right balance. According to Carlos, it is not a question of setting up anarchy because, whatever happens, a company must perform in order to invest, grow and recruit. The framework that the leader is going to give to the transformation process is very important.
“Inevitably, when you give more freedom, you very quickly identify deviant behaviour. There are always some. The challenge is to identify them, denounce them and even sanction them. An employee who confuses autonomy with carelessness can become a demotivating factor for employees who are fully committed”, Carlos points out.
In order to ensure that the Poult Group’s employees respected the established framework, the manager used to practice walking management. He invited himself to meetings or seminars to listen and observe. He also made sure that the framework that was defined by all the employees was included in an official charter: the “Poult constitution”.
A process that involves making difficult decisions
In order to give everyone, employees and managers, the means to fully integrate into its new organisational model, Poult has tripled its training budgets, both in the development of certain collaborative skills and in the company’s business environment itself. However, despite the efforts invested, some people sometimes fail to make the transition.
“I remember one HR director who, despite all the explanations and guidance he received, did not fit into the new model. This raises an important question: where does everyone fit in? When employees no longer identify with the company’s culture and values, they find themselves at a disadvantage and struggle to reinvent themselves. This involves making difficult decisions that mean having to part ways with some team members”, admits Carlos.
Following this statement, Yannick Bollati asked him about relations with the trade union organisations. How have they reacted to the organisational transformation and the possible collateral redundancies that have resulted?
The former CEO of Poult retorts that at the beginning of the project, the unions were rather inclined to slow down the transformation for fear of losing their power. Then, as time went by and in the face of the group dynamic that was set up, these fears disappeared because tensions were addressed and dealt with directly on the ground.
“When you run a company that employs 2,000 people, you can’t communicate with everyone. You need credible, representative and responsible interlocutors. In this context, the role of trade unions is also changing: they are now just as much involved as managers in the decisions to be taken in good and bad times in the company. They then develop a role of anticipation, more strategic, more global, on interesting subjects”, he says.
Working together for better innovation
Before his organisational transformation, Poult was unknown to the general public, and even more so to industrial players. The success of his collaborative model attracted the attention of major groups such as Decathlon, Michelin, Orange and Lu. Carlos explains that the French market has given great recognition to the company, which has received awards for managerial innovation, which is invited as a textbook case in major universities and whose workers were going to make presentations at Hermès or LVMH!
However, the beginnings of the transition to collaborative governance were not easy for Carlos and his teams to manage. “It took us six months to implement the new organisational model. During the first three months of activity that followed, all the indicators were in the red… A lot of people wondered if we had gone too far, there was a feeling of emptiness. The key is to hold on, to persevere. What I see today is that between 2001 and 2016, Poult’s turnover increased fourfold, his profitability increased tenfold and his market share increased by 7 points”, he announces with some pride.
Poult’s new way of working has encouraged each employee to show inventiveness, creativity and entrepreneurial spirit. Carlos believes that innovation should not only come from the R&D and marketing departments, it is everyone’s business. This is why the group has decided to set up a programme of partnerships with start-ups to develop promising business lines over the next 5 to 10 years. It has also created an in-house incubator to develop new products.
“All employees were invited to come up with new ideas for product development. They were given the time and resources they needed. The only condition was that each project leader had to mobilise a team of four people, including a salesperson to help get the product to market”, explains Carlos.
At the end of this exchange, Carlos Verkaeren described these 15 years of collaborative experience as an extraordinary human adventure that you only experience once in your life. A collective journey, with its ups and downs, but which, if you believe in it, keeps its promises for the future.
Watch the video (in french)