Leading Across Cultures at Michelin

 Overview
Olivier Chalon was an outstanding business professional from France who had started his career in sales in
an integrated oil company in France and then later worked as a business analyst in London. In a career
spanning 18 years and different geographies he had been very successful in motivating and mobilising large
workforce and had handled complex business restructuring initiatives. He was very proud of his multicultural
experience and his ability to motivate people and deliver outstanding results. Prior to his shift to Michelin to
handle a large division in North America he was working with an automotive spare parts company in Paris.

He readily took the offer of Michelin to handle its North American business unit which was experiencing
decrease in sales and poor financial profits as he was looking for a new challenge and opportunity and found
this offer interesting. Based on his knowledge of 4 different languages, his fluency with English language and
his six years of work experience in UK he was pretty confident of handling this assignment.

 Unexpected turn of events

Chalon joined Michelin in 2004 and lead a division of several plants and 4000 employees. The North
American Business Unit that Chalon was handling was very important to Michelin as it accounted for 33% of
the overall sales revenue of the organisation, generating close to $2 Billion annually. A comprehensive
assessment of the Business Unit by Boston Consulting Group had recommended Michelin to alter its strategy
as it was putting the company in direct competition with its long-time customers.

He was aware of the challenges that this division was facing and had planned to regain lost market share and
implement a turnaround by motivating and restructuring the sales team. He was also planning to allay the
fears of existing clients who were starting to consider Michelin as a competitor and threat rather than
supplier. However few months down the line Chalon was facing an existential crisis: many of his colleagues
and subordinates had bitterly complained about his management style to Jeff Armstrong, the head of human
resources.

Many of the employees had complained about his leadership style and the way he interacted with
employees and had concerns that he lacked ability to motivate teams and appeared cold and distant. Many
of the employees had a feeling that he was arrogant and not putting effort to get to know people at work
and sometimes were taken aback by his direct way of making criticism and giving feedback. This came as a
shock to Chalon as he had confidence in his ability to motivate teams and believed that he was putting effort
to understand his colleagues and subordinates and make himself more approachable. He was introspecting
where he made mistakes and whether his managerial style came off as arrogant and authoritarian. He
became very concerned about this development and felt that he needed to understand this situation in
detail otherwise things would soon go out of control.

 Chalon’s Management Style vs prevalent culture

Chalon was a very demanding and tough manager, he expected results from the teams he handled and
demanded accountability from his employees. He was never unfair to anyone and believed in giving
feedback in an honest and direct manner. He knew he had to make tough decisions and turning around the
division was going to be a difficult task and that there will be resistance and discontent in the establishment
due to the changes that he will initiate. However, he was not able to understand that the complaints were
not related to the steps he took but were about his way of doing things and his behaviour.
 He was a very results driven and disciplined professional and deemed anything which he felt did not meet
the criteria 100% as unacceptable, sending the work back to the teams for rework and asking them to
present more structured, detailed presentations next time. While he was quick to disapprove any work that
he felt was substandard and gave blunt direct criticism to the teams for such work he was unable to
showcase his pleasure and appreciation when any good work was done by his team as he felt this would
make then complacent. Chalon used to make an effort to go around and talk to his colleagues and followed
an open door policy to make himself more accessible and hence he was surprised when people complained
that he was distant.

While Chalon was putting in a lot of efforts to get to know the people and the company culture more he was
insensitive to the differences in cultures between the American society and the French society. He was not
comfortable sharing information from his person life with others and was at time taken aback by the
intrusiveness of American culture. Many of the signals that he had been sending to his colleagues and
subordinates ended up having the reverse effect. He was using the same tactics that he had used previously
in Europe and was not able to realize that due to difference in geographies and societal and cultural norms
his actions were having detrimental effect.

 American vs French Cultural differences

America and France have very different cultures and significant differences exist between the two societies
with respect to Power Distance, Individualism and Uncertainty Avoidance. Differences between the
American and French value system, style of working and their cultures also have their manifestation in
business practices and etiquettes. In order to manage the businesses and people better it’s important to
understand the minor differences between cultures across different geographies. Well known differences in
the working cultures across the two countries are mentioned below:

French Culture American Culture

Quality of Life In France, quality of life is important.
People take long lunch breaks and it’s
perfectly normal to go to a restaurant and
even drink a glass of wine.
Interpersonal Building a relationship in France is
Sensitivity important but can take time. It is
uncommon to discuss your personal life
and family with a stranger in France.
Confrontation/ In France, confrontation and open debate
Feedback are seen as positives and perfectly
Mechanism normal. Giving harsh feedback was
considered acceptable.
Work Life French workers usually take long
Balance vacations and are more productive at
work because of the time they take to
disconnect and relax.
Job Security In France, people are more likely to aspire
to working for a large company or the
family business. Being an entrepreneur is
not seen as prestigious,
Identity French people do not talk about work
outside the office and like to keep
business and personal life separate.
In USA people eat more at their desk.
Eyebrows are raised when employees take
long lunch breaks, let alone drink wine
during the day.
In USA people often share more personal
information but the friendship will remain
superficial.
Americans tend to be non-confrontational
and tend to sugar-coat feedback to save an
individual’s feelings.
American workers make less use of vacation
days in in general devote more time to the
company they work for.
In the USA, there’s more of a focus on
instant profit and creativity in achieving this.
Mavericks and entrepreneurs are admired
Americans often define themselves by their
profession and often see people based on
their job and where they come from.
 Way Forward
The root cause of why Olivier Chalon’s efforts to mingle better with American culture and Michelin
Employees were falling flat and instead giving opposite results was a big disconnect between the value
system and attitude that he had and that which was considered acceptable in America. Some of his
initiatives which had adverse implications were:
 Having grown up and worked extensively in European culture he had a habit of giving blunt direct
feedback and doing criticism even at the cost of inviting a conflict as this was acceptable in Europe.
However this was not taken very positively by Americans as they usually avoided a confrontation
and tended to sugar-coat their feedbacks.
 He used to do criticism in public but failed to acknowledge and appreciate whenever good work was
done. This not only made his team demotivated but also added to their frustration. In a society like
America where people pay a lot of attention to their work and profession not getting recognition for
the hard work done and results achieved was disheartening to the employees.
 While he put in effort to meet and talk with people he felt hesitant to share his personal
information, as French people used to keep their personal and professional lives separate, but this
was considered normal in America. This made him look distant and arrogant.

Many of the decisions that Olivier Chalon had taken were beneficial to the organisation and taken in good
spirit but the meaning they conveyed to the work force was unintended. Going forward Chalon would need
to put in effort to understand the American way of doing things and unlearn the things he learned while
working in Europe. He needs to do introspection and decide how to do the things that he has been doing in a
different manner which doesn’t promote friction and disconnect between his employees and colleagues.

His way of interacting with others, how he appreciates or discredits work performance, handles meeting and
team discussion, sets goals and future targets with team members all need to be done keeping in mind the
context of American culture and its influence on the business and corporate practices. While switching
across geographies moulding ones attitude and way of working to the local customs and values is paramount
for the success of any business initiative.