How to shift economies of transactions to relationships? Stéphane LOIRET – WikiStage ESCP Europe

“The major shift in economy… …is the shift from “transaction”… to relationship-based economy” – Stéphane Loiret Do you have any idea… of how sexy can be the life of a CFO in a large company? This very day of March 2011 My CFO, Jean-Jacques, knocked at my door and said : “Stephane, we have a situation here… We need 30 Million Euros just to cover up the budget for next year… And I don’t have the beginning of one idea to get this done… “We already made a lot of effort in terms of processes.” “We have the best engineers in our company to reinvent how to work more efficiently in the company…” “And we still need 30 million to recover this year.” “So, the only idea I have… is to cut in our General Expenses.” How sexy is this question ? Right ? “Do you want to take that on board ?” I said “Waou… hem…” OK But, if I do that Jean-Jacques, let me try something different ! Because if we continue to act the same way… we cannot expect different results ! So, “No Rules !” “No obligation !” Nothing “new” to impose to people ! “What do you think about it ?” “You’re crazy…” he said. “Find somebody else then…” He had no other choice, said “Ok, go on, I will see…” So I said “First of all… I need volunteers.” I don’t to appoint people that have no choice… Just to join this project… And I said, “I will not tell them about the 30 million.” This is not the question…” My intent was to gather people about the resources. And how to keep these resources at the best level to employ them for the benefit of the company. And making some sense for them !>From one to one some people came Young ones, 30 years old… and said : “For me, I would like to work about “Energy Saving in the Company”. I think there are some deals that we can… …or that can be found there…” Another one came and said : “We already experienced somewhere that in Engineering, “Working Different” can bring a lot of money just by planning differently…” And one by one, the “five” came ! With new ideas that we never thought about before !… So, I started to do my “European Tour”, to factories… And always I did the same… “There will be a meeting with me, tomorrow, but you are NOT obliged to come… You are NOT OBLIGED to come… But if you come, BE present… I will be only 60 minutes but if these 60 minutes change something in the life of the factory that’s good for me. And you will not be also obliged to apply what I will share with you Because these ideas come from other people, other employees like you, and me. We don’t care about their executive’s position or their employee’s position or their worker’s position. We think it’s “good ideas” that can save resources that are scarce for the company. What do you think about that ? Believe me, 80% of the people came and showed up ! For these 60 minutes ! And, added new ideas, to improve what was already shared And the five first volunteers started like that about 15 different thematics around them. People worked together and started to implement new things. After one month, one of the VP of Finance came to me and said : “Stephane, it’s not going to work ! It’s a failure ! We just have 1 million saving after a month ! And we need 30 !” I said : “What did you say ? ONE MILLION ! That’s GREAT !” “We did not expect anything and we get ONE MILLION !…” “Let’s celebrate !” …So I started to make a celebration about this ! She said “You are crazy !” But, out of that, then we said we will start a challenge ! So, we’ll offer 4 IPads… And at the beginning, in 2011, IPads were new ! So, getting an IPad at home was something sexy ! Much more sexy than “30 Million”. And remember, I never told about the 30 Million from the beginning. We even put, on the back of the IPad, “This is a personal THANK YOU from the company for your own contribution!” And the IPad, … attribution question shortly came through… What will be the criteria to get the IPad ? Of course, they thought about the BIGGEST “idea”… “An idea of 1 million €, is more, and has more value than the one of 10.000 € !” I said “No…” “The jury will judge by : – how sexy is the idea ?” “Sexy ? how do you measure that ?” -how collaborative is it ? -how can we share it ? Easily to the rest of the company ? and so on… And people get double advantage of that ! Well, they wanted to play… …and they delivered a lot of good ideas. And at the end, they were very proud of getting… well, an IPad is not so big value… …but they felt very recognized about something that was new. And afterall, in twelve months, we delivered with this project, more than 67 million € savings ! In the year ! Not for the next future. Just in the year. So it was really a performance ! But we never expected it. So it was out-beating any expectation… …without expecting it ! This short story made me learn, two big lessons for me, and the management, and the way we deal with people inside a company… The first one is that, SMALL, is BIG now. You can have 5 volunteers at the beginning, and it changed a whole spirit inside the company. They wanted to share, they wanted to create, they wanted to add things on top of value inside the company… Second, at the end of the story, only 870 people, did participate, to this project. And the company was, roughly, 25.000 people. So you don’t need to convince all the World, to change it ! You just need a fraction of it to make it better… And this is the same for our own life… …and in the life of enterprise. The third one is that, you don’t need big numbers, to make a substantial change. I had the exercise, when I entered an industrial site, or a factory, I always took with me 20 € notes, and I have shown that, asking, “Do you know what is this ?” And they said, “yeah, it’s 20 minutes, of the time of a worker, it’s worth 20 €…” “OK…” “And what about an idea, that can save 20 €, in a day ?” “You are not going to save the company with 20 €…” They said… “OK. Here around the table, we are 20, and let’s do it. And if we do it, each employee, day after day, do you have an idea, how much it comes after the year ? It’s 100 Million € !” 20 € can be BIG as well 🙂 ! The second lesson I learned, and we will conclude with this one, is that, “First Connect, then Correct !” At the beginning, if my intent, was to save 30 Million €, I would not inspire anybody, to join me… It’s not sexy in your life, just to promote a 30 Million € project, it doesn’t change anything in you… But, participating to a project, that, takes more responsibility about the resources in the company, that makes sense ! People, made their own proposal, about the streams they could launch, and in which area they wanted to participate and contribute… and “The INTENT”… WE are responsible for… Nobody’s dictating that ! What it learned also for me, is that, after a year, they continued to work, as they changed. Because it was their change… it was not mine ! Neither the company’s change… And on top of that, everybody is an actor ! It’s the same in economy today. The customers are no longer people that are following… You don’t need leadership of followers… You need leadership of leaders… that lead leaders as well… And people took the responsibility to say : “Hey, I want to be part of that…” “I want to act !” “I want to change something in the way, we do the Engineering”, “and in the way we do the energy saving,” and so on… So, connect BEFORE correct ! and share ! Don’t let the ideas kept inside yourself… Once you share, then you get the power… That was what we experienced there… Thank you ! Stéphane Loiret – DeciderAgir>From Transactions to Relationships © Stephane Loiret – DeciderAgir – 2015

3 comments on “How to shift economies of transactions to relationships? Stéphane LOIRET – WikiStage ESCP Europe

  1. A l'heure où la relation, l'expérience que nous en faisons, devient le vecteur principal du succès durable dans notre nouvelle économie, il est temps de repenser nos modes de management et de coordination dans les entreprises. 
    Au-delà des savoirs traditionnels enseignés dans les meilleures écoles et universités, le développement personnel des dirigeants est un enjeu majeur de performance durable pour comprendre l'humain et travailler "avec" plutôt que "contre".

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