Stephane Michel

Hello everyone, my mother is crazy? I am very happy to be with you this afternoon. I learned last week that there is a competition in France for presenting university theses in less than 3 minutes. Go check it out on YouTube, it's interesting. So with 10 minutes, I am super comfortable; I realized that it actually made me less self-conscious, I had plenty of time to expand on my topic. We will talk this afternoon about what makes a company last. There is a key date in French history that you might have in mind: June 5, 1983. I don't know if you place that date in history. It is an extremely important date: it is the date of Yannick Noah's victory at Roland Garros. So it is a historic date because we have been waiting 33 years for something to happen on that side. There are also some key dates in Spanish history: 2005, 2006, 2007, 2008, 2010, 2011, 2012, 2013, and 2014 – that's the nine victories of Rafael Nadal at Roland Garros. And in fact, that's what brings me before you, because it's the only thing I've been interested in understanding for 23 years that I've been accompanying companies: trying to understand why there are people who achieve feats that I call 'comets' in sports, like Yannick Noah, and why there are people who achieve performance over time, whom I call 'champions'. And for companies, it's exactly the same: companies that start, that are beautiful jewels, beautiful startups with a great innovation idea, but that don't necessarily last through the years and decline quite quickly. And my obsession is to try to understand that and to modestly accompany companies towards longevity, to become more champions than comets.

So to try to understand where this notion of longevity comes from, we will go back to the genesis of the system. When a company is created, there is a founder or several founders together, and there is a kind of crucible in which several things mix: an innovative idea of products or services, the values of the leader who puts his own value system inside the system. If I talk about values, it might seem infinite and unfathomable, but if I ask you what three values you would like to leave to your clients or your children, you will quickly tell me: this one, this one, this one. So ultimately there aren't dozens of values, there are two or three that make a system live. And then the third important point, and what interests me the most, is the mission. That is, generally a company founder has added value to bring to the market; there is something they want to bring in addition, and it's not always clear or formalized, but in any case they intuit that there is added value linked to their service or product. I go jogging with my neighbor who wants to set up as a pool builder. He comes from a big pool company, so I try to get him to dig into his mission. I say, 'What are your pools?' He says, 'Well, big holes with water.' Okay, I imagined that, but what are you going to bring to the market? And he answers, as often the leader who creates by business plan, 'I think in the first year I will sell at least 10, I am certain of that.' But what is the added value you will bring? What will you explain to your clients when they ask why you and not them? So after a few questions, he says, 'Actually, I'm fed up with these pools that clash in the garden, these vulgar big turquoise squares. I want to make pools that blend into the landscape, that are barely seen, that have their place in the garden.' So his mission, his reason for being, his added value is to make pools that blend into the landscape. Today, there is not a high-end pool in Lyon that is made without him.

When Dominique Mandonnaud created Sephora, he created Sephora to be a different company. He created a company where beauty governs; everything we do must be beautiful and different. That's the added value we will bring. We want free access to all perfumes, so we will put testers everywhere, sample bottles everywhere, which was extremely revolutionary at the time. And above all, we will let the customer wander and choose their perfumes alphabetically. It was a total revolution at the time to say to Chanel, 'You will be in such and such a place, not where you want.' This even pre-existed strategic choices to do that because they reasoned about the store and then said, 'Well, what would be super beautiful? If we want to make something beautiful and different, if our mission is to bring something beautiful and different, then we need to make a black store because it would be magnificent, because all the products would stand out against a black background.' And everyone said, 'Yeah, great!' except the person in charge of maintenance who said, 'That's very nice, it's surely very beautiful, but it's not cleanable.' So they forgot that idea. But after much deliberation, Dominique Mandonnaud decided: 'No, black is beautiful, it will be black.' And it is one of the rare networks that has a cleaning team that cleans the entire store, empties everything every morning to put everything back so that it is nice and aesthetic. Then Decathlon was created wanting to make accessible to the greatest number the benefits and pleasures of sport. So all these companies, it's not always formalized at the start, but there is effectively a trace of an DNA.

The difficulty is that this DNA endures beyond creation. I accompany Le Bon Coin, for example, since their creation. They were 15 two years ago, they have grown to 400, they are hiring 100 people this year. They have a mission: to facilitate all daily exchanges. You see that the mission is extremely broad, far beyond the commercial side, since today on the Le Bon Coin site you have many shows referenced, people posting belote tournaments, there are many ads that go far beyond concrete goods. And the difficulty is to keep that alive over time. The difficulty is to continue to perpetuate the mission and values with the effect of size. Because when you are in a startup of 10-15 in a garage, making the values and reason for being live is easy; you have them all at hand, you can reframe things. When you are 400, it becomes extremely complicated. And companies that last through time, observation shows that they are not smarter, they are not richer than others; they are just more coherent and more aligned. Because in fact, between these two pieces of DNA, the rest of the story that will happen is that you embed in the DNA the vision, the different projects of the company, and then the strategy that defines how to get there. And the one that goes through cycles, because a company goes through cycles, well, they keep a constant course on what they are made for, and they don't go elsewhere, they don't let themselves be scattered to something else.

I work with the Krug house. The DNA of Krug was written in a small notebook by Joseph Krug in 1840. And Maggie Henriquez, who took over Krug a few years ago, went to the company safe to take out Joseph Krug's notebook and try to understand what he had written at the time when he said, 'I want to make a champagne that goes beyond the vintage. I no longer want to be dependent on great years.' And for those who know the Grande Cuvée, it is a champagne that is far beyond the vintage. But for years they had thought that they were completely mistaken in terms of positioning because they had completely deviated from the original DNA, and it was not at all the universe of Krug. So the difficulty is that: to write it down. It's not formalized in the early years, and writing it down allows you to go through cycles. Because if you listen carefully to Yannick Noah, the whole drama of this guy is that the project of his life was to win Roland Garros, and the whole drama is that he starts his life by achieving his project, and he says, 'I hit a wall at 300 km/h, I had a terrible nervous breakdown afterwards, and I understood that the record, the title, or the medal cannot be the project of the champion.' Why? Because it is attainable. And his teaching is that the only thing the champion can pursue to last is the masterpiece. It's Donovan Bailey in Los Angeles who becomes the fastest man in the sprint, and the journalist says, 'Congratulations, you are first!' He says, 'Yeah, but I didn't run the perfect race.' And all the athletes who last, and all the companies that last, are not companies that run after such and such placement, such and such revenue. Often when you listen to a CEO and you say, 'What is your project?' He answers, 'My project is +10%.' But +10% is not a project, it's a budget. You will do it or I stop. So the mission, running after this mission, allows you to chain projects one after another. And you understand that the sooner you start the next one, the less you fall, and the shorter the fall. The mission is what keeps the course. And Noah also tells us that for an athlete, if the project is the masterpiece, then the titles are only milestones on his path. I believe Rafael Nadal has not yet said he has played the perfect match, so we still have a little time ahead. Thank you very much.