The big idea: If change is “the only constant,” as Francois de La Rochefoucauld put it, why is it that change efforts cause such uproar and often fail? And what happens when the change leader is an outsider, the changes are not readily connected to profitability and the organization has its own strong and highly successful culture?
The scenario: SNCF is a 32 billion-euro state-owned rail company in France running on more than 19,000 miles of train tracks, managing 246,000 people operating in 120 countries. A railway culture predominates, run by proud railroaders, engineers and operators. Safety is king.
Purchasing is a huge part of SNCF’s operating budget; it spends more than $16 billion annually buying trains, energy, rails, stations, tables, desks, cleaning supplies, catering services and more — indeed, it has 98 areas with 1,000 employees dedicated to purchasing.
Five years ago, the railway made a commitment to ramp up its sustainable procurement practices and hired Pierre Pelouzet, a former Exxon Mobil executive, to lead the change. Pelouzet recruited Olivier Menuet, a former GE executive.
Railway organizations tend to consider themselves good stewards of the environment. Trains move many people and goods more efficiently, leaving a smaller footprint than cars and trucks. Some employees scoffed at the idea of changing a good thing. Another hurdle was that buyers knew their suppliers, had good relationships, and deliveries were always on time — if they started over with new suppliers, would they get the same quality and price? Finally, top leadership expected financial metrics to evaluate changes Pelouzet and Menuet implemented.
The resolution: Menuet and Pelouzet agreed that their mission required numbers, charts and financial language that described and measured what they were trying to achieve. One tool they created was a dashboard that tracked key data and could easily allow for a single-page report for top management to review monthly. They worked with auditing firm PricewaterhouseCoopers to shape metrics so everything could be certified. The information could also be used for bonuses and positive reinforcement.
The dashboard embedded the concept in the organization. Menuet sought out employees with a long history on the railroad who supported the concept. They would report on dashboard items, so their managers would have to know more about sustainable development to review the dashboards submitted to Menuet. In addition, Menuet used the dashboard reports to develop relationships with senior executives.
Menuet likened his approach to impressionist painting — a dab of color here and a dab of light there. This metaphor suggests that there are many points of influence, and Menuet worked to spread sustainable procurement throughout SNCF. Last year, the French government recognized SNCF for its sustainable procurement efforts.
The lesson: Menuet recognized that transformation requires more than a top-down directive and rewriting a firm’s purchasing process handbook — something that would sit in desk drawers while everyone went right back to whatever they were doing before. Instead, he turned the focus inside to look at how SNCF was purchasing, identified employees he needed to fill roles in the change process and engaged them at all levels in the organization. With clearly defined goals of top management, his true accomplishment derived from his ability to empower others.
Yemen is a senior researcher at the University of Virginia Darden School of Business. Kamin and Delchet-Cochet are professors at ISC Paris School of Management.