Moving From Stakes to Action: Florent Menegaux on Purposeful Transformation at Michelin
Florent Menegaux, CEO of Michelin, explains how a focus on personal development and people-profit-planet informs everything from company strategy to cross-company leadership.
In 2006, [after the death of Edouard Michelin, the last family member to head Michelin] we were kind of lost. So we asked several thousand people around the world the simple question: why do you wake up every morning working for Michelin? And we came up with this very strong idea that resonates in Michelin: “we care about giving people a better way forward”.
If you take the simple version, it says: we are interested in mobility, moving stuff or people from A to B. But if you think more about it, it's also: we are interested in people development. We see Michelin as a giant people development platform: we do tyres, we do generative tissues to repair the human body, we do the next generation of glue that will use different types of molecules. But the aim is to develop people. We want people when they join Michelin to grow, to develop, and become [as François Michelin used to say] who you are. And that's why it resonates with me, because I have transformed with Michelin. I thought I would stay for one year, maybe two: 28 years [later] and I believe that purpose every day in everything we do.
Michelin also aims to engage and meet stakeholder expectations while respecting their own values and beliefs. Does stating and executing purpose around sustainable movement generate or appease dissent?
It depends whether you define your purpose just to put on the walls, and then do something else, or you use this purpose to arbitrate at critical moments what you do – that's what we do at Michelin. Often we put too many things in the purpose. The key issue in a corporation is how do you move from stakes to action. The world is moving very fast. When you are across 175 countries, different cultures, 132,000 people, how do you make sure that this movement between stakes and action makes sense?
The strategy is how do you allocate your means to be able to fulfil your dream? And the dream is just the translation of your purpose at a defined moment in the future.
You need many things other than the purpose. You need to define ambitions. You need to translate your purpose into action. That's what we call our “dream”. You also need a strategy, but the strategy is not the mission. The strategy is how do you allocate your means to be able to fulfil your dream? And the dream is just the translation of your purpose at a defined moment in the future. But then if you do only that, you've done nothing. A corporation is just made by people, for people, and through people. Without people, corporations do not exist. We tend to forget that. We tend to think of corporations as a set of machines, a set of processes. You may have ambitions, you may have a strategy, and you may execute nothing, because you need to have in parallel people that agree to do it.
In order to have that, you need to have a set of values, you need to be very explicit, and you also need a leadership model. At Michelin we don't define leadership just for the managers: we want everyone to behave as leaders. And then we've said there is a subset of this leadership just for managers. And if you summarise at Michelin, we say: because we care. The leadership model is: I care, meaning I do things for myself, and for others. For the managers, we say to them, take care. That's very simple, but very efficient, and that's what drives us. And if you don't have that informed strategy, you achieve nothing.
Michelin aims to generate 20 to 30% of revenue from non-tyre activities by 2030, from less than 5% in 2020. So what role has "Michelin in motion" played in advancing the company's commitment to sustainable mobility and reducing environmental impact?
We have built cars, trains, aeroplanes, many things. You cannot summarise Michelin as a tyremaker. So we said, what is a tyre? And, actually, a tyre is the ultimate life-changing composite, a very smart assembly of 200 materials. And we've defined ourselves as: the world leader in life-changing composites. Tyres is included in that, but we do many things that takes us into the medical, aerospace, many other areas. The same technical know-how will apply. And it fulfils our dream because we will have redefined what Michelin is and changed the market, because the life-changing composite does not exist as a sector today. So we are defining this sector for the benefit of the world.
How does Michelin address the tension between financial performance, ensuring its fair wage commitment, being competitive, and plant shutdowns?
Actually, a corporation is a living body. You need to accept the fact that things that were true 50 years ago may not be true today.
In France we tend to think that corporations are like a museum. They should stay forever the way they are. Actually, a corporation is a living body. You need to accept the fact that things that were true 50 years ago may not be true today. But as we care about giving people a better way forward, we want that everyone from the lowest salary to the highest salary can live properly from the work that they do.
However, it doesn't say that we can keep every activity in the same place. The market has moved, has changed. if we had to rebuild a new plant, we would not build it in those locations. In the same social responsibility that says everyone is paid at a decent salary that enables a family of four just to envisage, living, scholar, pay, [education], when we drive a restructuring, we do it in a certain manner. When we close down those activities, we do it with two commitments: the first one is, we will find a new professional future for everyone. And that commitment takes several years. The second commitment is: we, as part of a local ecosystem, are committed through a subsidiary called Mission Development to regenerate as many jobs as the ones we have suppressed.
Research on work meaningfulness suggests that workers more and more seek work that's viewed as purposeful, that they desire more balance and flexibility, and that they want to feel positive about their company's social commitments. How does Michelin's human and social model address the meaningfulness of work?
Nobody is forced to work at Michelin. You have other choices. So that's the first element. And then of course, when you work, it is not a transactional relationship with your corporations. It is not just performing task. You need to understand that you're developing yourself through the work, and by this nice exchange of you developing yourself, executing some task and performing your job, you are going to develop Michelin. and then in return, Michelin will allow you to develop and therefore to grow. That exchange works nicely provided that people understand why they're performing the task. And we measure: every year we have a survey for every employee around the world a set of 80 questions: are you happy to perform the job you're performing? Are you happy with your manager? Are you happy with the company? Do you understand the strategy? Do you understand what the management is telling you? So we take care of the mental health of everyone, and it is very important. If you do something that does not mean anything to you, it creates anxiety. I'm convinced it is one of the main challenges we face as corporations.
Economic performance and people development are in sync. If you care about developing people, in return they perform. Economic performance is indispensable to invest, to develop, to be able to generate the means that will allow people to develop. The thing is not to manage people, profit, planet separately. That is the magic: how do you perform in three dimensions?
We have said from the beginning, every business would be measured against three realities: economic performance, people development and the planet stakes. Making sure that Michelin has a positive impact on the planet is absolutely crucial, so that people understand that the resources they use are not harming them outside of Michelin. And then economic performance and people development are in sync. If you care about developing people, in return they perform. Economic performance is indispensable to invest, to develop, to be able to generate the means that will allow people to develop. The thing is not to manage people, profit, planet separately. That is the magic: how do you perform in three dimensions? So when I go into a plant, see a commercial team, I always review them under three parameters: people, profit, planet. And that gives a lot of meaning in the work people perform.
How do you organise the conversation with the supervisory board, around the incentives for the top managers so that this is material and considered as being fairly achieved?
It's a journey. It's never exactly the way we would like it to be, but whether I measure the performance on a month, year, five year or 10 year, it's always those three items: people, profit, planet. So for example we have developed electric curing, consuming seven times less energy with the same way of curing. It's better for the planet, for people - because when you steam-cure tyres, it's very hot – and far less expensive. And the best way [for] the purpose is whether it's aligned: is the strategy aligned with what we want to do? Are we contributing to our dream or are we moving, outside of it? And so we look constantly at the alignment between the ambitions: one month, one year, three years, five years… 20 years, 30 years. We have milestones and we look at them on those three dimensions all the time.
Florent Menegaux was in conversation with HEC Paris Professors Rodolphe Durand (Academic Director of the HEC Sustainability and Organizations Institute Purpose Center), and Lisa Baudot at the 3rd edition of the Purpose Day, which was organized by S&O Purpose Center in partnership with The Oxford University Centre for Corporate Reputation, at the Hôtel de l'Industrie, Saint-Germain-des-Prés in Paris on February 11th, 2025.