Frederic-Michelland-CEO-Poclain

Oct 7, 2021

FEELING THE HEAT.

Frederic-Michelland-Poclain-CEO

What is your company project?

Engage the company in a transformation (ShiftUp Engage 2025) aimed at realigning the immediate operational challenges of the company (short term) with a new strategic ambition (long term) with a dual objective:

  • grow the asset value of the company
  • pass on to the family’s next generation a strengthened company that is Ready for the next era : that is to say, having taken the right turns over the next 5 years in order to be able to approach successfully the following 10 to 15 years.

To do so, that necessitates launching the company into a renewed dynamic: increasing external openness (partnerships, etc.), stronger digitalization of processes / different working methods, offering adapted responses to our customers in the face of new challenges posed by societal and environmental dynamics….

Launching the company into the « After »; this the luxury of family owned companies. 

 What are the key success factors?

 There are 2.

  • Respond consistently to the requirements of these different time horizons and those of the many stakeholders in our ecosystem: employees, current and prospective customers, shareholders, partners, suppliers, etc
  • Align the whole company and also the priorities of each of our employees around these challenges.

A plan with the goal of making the Group:

1) more industrial where excellence in execution finds its place with the emphasis on Q / C / D and the refocusing of our factories on production. Production needs to be adapted to answer the increased demands for efficiency and constant search for productivity gains.

2) more innovative with an approach based more on experimentation, whether this innovation is incremental or breakthrough.

Talking about Open innovation and not the more traditional, linear approach often marked by the desire to avoid errors and the desire to converge quickly towards a ready-to-be-industrialized product or a solution .

Never forget that Know-how is built through a multitude of small bets won but also lost, which allow us to learn something essential and improve our judgement.

Innovation is not the preserve of technical, R&T or D teams. This spirit of Innovation that made Poclain so successful, needs to be infused throughout the company.

Even at general management level, we need to keep in mind that Managing a company no longer consists in anticipating or managing risks in terms of probability but it is about experimenting and thriving with an acceptable level of discomfort.

3) more intra-preneurial, freeing up energies while being able to fit into the company’s sometimes complicated internal eco-system. Ultimately, this should make it possible to reduce the chains of control. But conversely, this implies being strict about respecting certain principles which are the only way to guarantee that the whole company is working in the same direction. You have to be able to rely on judgement and have confidence in the ability of everyone to exercise it in the best interest of the company. For this, you need managers who take the time to explain and give their employees the environment and what is at stake. Managers should never take their teams by surprise with the direction given.

 The goal of this plan is to strengthen our fundamentals as an industrial company, to better manage our growth, and at the same time, to gradually shift our business model towards more transmission solutions rather than just supplying components, the basic parts of the transmission. 

Generational renewal and the rapid entry of working from home require us to rethink the fundamentals of classic management.

 What is your experience of COVID crisis?

 The year 2020 and the way we weathered the COVID crisis has demonstrated our resilience. Employees, through their unwavering commitment, have once again demonstrated their ability to mobilize in the face of large-scale crises. Like many industrial teams, we are never better than when we are in "fire-fighting" situations.

Our various sites have faced the crisis each in their own way: the key role of site managers and their N-1s (Production, HSE, HR) present in the field ... but in close coordination with the other sites and group-level direction. It also clearly highlighted the key role played by production support functions (demand management, supply management, etc.)

 Our success comes from the fact that we reacted very quickly. We have taken all the necessary measures to protect the health of our employees and to protect the group. This then allowed us to act much more calmly and to be less in the grip of immediacy, even if during the first two weeks of the crisis in March 2020, every evening when leaving the office, I went out exhausted feeling like I had spent my day spinning in the drum of a washing machine.

 Nevertheless, because we got down to the basics very quickly, we were then able to approach the following waves of Covid more calmly and project ourselves more confidently in the aftermath.

 Overall, 2020 was a good year for us. Despite an almost 15% drop in sales, this crisis has enabled us to emerge stronger from 2020.

However, it also made us clearly aware of the need to go faster in the initiation of certain reforms, the re-questioning of certain industrial, logistical, sourcing and even management choices of the group. This is the reason why, counterintuitively, we decided to accelerate the deployment of our transformation plan.

 What do you expect for the next 12-18 months?

 The challenges we have faced since the end of last year are quite different.

We are facing a literal explosion in demand even as the effects of the pandemic are still being felt. The situation is overheating and consequently creating a difficulty in absorbing this change of pace never known by its brutality.

At the same time, we are experiencing difficulties in recruiting to compensate for absenteeism linked to COVID, a supply chain that continues to suffer the scissors effect between the COVID-19 crisis still underway in certain areas and the exceptional upturn in activity overall, impacting both leadtimes and costs.

 The current, exceptional demand is leading to numerous capacity limitations among suppliers with the reduction in the availability of materials (eg: steels, plastics, scraps), the increase in leadtimes observed and the surge in prices that goes with them.

 Faced with this situation, there is only one solution: to be flexible and introduce more options into our operational, tactical and strategic choices, even if this comes at a cost.

 What are your values at Poclain?

 People, international, innovation and independence. These values are probably not very different from other companies, but we strive to express them on a daily basis in our choices and our actions. Make it a daily practice. That makes a difference!

 What does that mean ?

One example: we are not managing human resources but are responsible for human capital. That capital must be grown and enriched if we want to increase the value of our company. In a family business, this concern finds a particular echo.

We benefit from the strong individual attachment of our employees to our company, an almost "familial" bond, very personal.

 Understanding how employees live the values of the company and translating these values differently so that they are always coherent with the changes in our environment and the adaptations necessary to make our company more efficient and more agile, that is the challenge!

Frédéric Michelland, CEO of Poclain