Sunday, July 31, 2016

CEO Michel Landel on Sodexo’s growth prospects in India

In an interview, Sodexo CEO Michel Landel speaks about the changing nature of consumers and the importance of innovations to remain relevant.

Michel Landel.

Consumers in India aren’t vastly different from their counterparts in Paris, New York or Shanghai. These are citizens of the world and their expectations are very high, said Michel Landel, chief executive officer of Sodexo SA, the €20 billion French catering, facilities management and vouchers group.
Michel Landel, 64Michel Landel was born in Morocco to a Russian mother and French father. He graduated from the European Business School in Paris and began his career as a financial analyst at Chase Manhattan Bank. He subsequently joined construction company Piolet, now part of Saint-Gobain. Landel joined Sodexo in 1984 and in 1999, he became the CEO for North America. In 2005, Landel was appointed CEO of Sodexo Group. He figures in Harvard Business Review’s 2015 ranking of The Best-Performing CEOs in the World.
Globalization has led to uniformity in service requirements, Landel said in an interview. At the same time, consumers have also become more demanding. Landel also spoke of the changing nature of consumers and the importance of innovations to remain relevant. Edited excerpts:
How are the consumers you serve in India compared to those in other markets?
When we serve customers at Infosys in Bangalore, the expectations of these people are not different from people in Paris, New York or even Shanghai. These people are citizens of the world; their expectations are very high. The urban Indian customer is very sophisticated. So, when you serve global clients, you have to be consistent wherever you go. Whether it is Unilever London, or India, the expectations of the global executives are the same. The urban Indian consumer is very sophisticated.
What are the other similarities between India and your global operations?
One of the challenges of India, which is not different from the rest of the world, is attracting talent, retaining talent and the quality of life—balance between professional lives and personal lives, that is a global trend. Everywhere you go in the world, now the generation Y and the millennials—they expect to have a good quality of life and that is not different in this country. This will increase because the millennials will represent 70% of the worldwide workforce by 2025; so the world is changing.
How are you changing to keep up with the millennials?
We have recently reorganized the company from being geography-based to now being segment-based. So, we have global segments for hospital, hospitality, education and other sectors. This will help us to grow. The customer in the hospital or education sector has similar demand across the world and the workforce is becoming international. So, we have to continuously adapt and that is what we do. We are bringing in more flexibility, being more inclusive and bringing in new technologies, tools and innovations.
What innovations are you doing here?
Innovation for us is a part of our life. We started from zero 50 years ago and now we are here, it didn’t happen by accident. We have to constantly innovate; service innovation is easy to imitate, so you constantly have to innovate. We see India as a sophisticated market. In western countries, people’s habits are difficult to change; they are well-established, mature markets. Here, there are fewer barriers for growth as people are eager to learn.
Are you looking at acquisitions?
We have made acquisitions here in 2009; we acquired Radhakrishna Hospitality Services and then we acquired MacLellan India over three years ago. We will do acquisitions if we find the right target. A company like ours is always looking. But we have to find the right strategic fit and cultural fit. In our business, we don’t acquire machines, we acquire people and that needs to be integrated and there has to be a cultural fit. The acquisitions would be small as there are no big targets here for us. The market is still fragmented and not organized. It’s a growing market.
How important is India for you?
We have been here 20 years and employ 40,000 people here, which represents 10% of our entire global workforce. We serve four million people every day in India. It is one of our top markets, but in terms of size, is still small. Our sales here is a little over €200 million. The same business would be worth €1.5 billion in New York. This is because the same service will get us $10 in New York and $1 in India. However, we see India becoming a top market in next 5-10 years. As the economy grows and the middle class grows, it will become a bigger market for us.
How does India compare to other emerging economies?
It is the fastest growing emerging economy in the world, by far. We have a lot of business in China, Brazil, South-East Asia and in South American countries; clearly, India is the most dynamic country among these emerging economies. We have global clients here and we also have leading Indian companies that we work with here and serve them when they expand internationally in the world.
What are the challenges here?
One of our challenges is to find the right people to grow our business. We hire people who generally have low or no education. We train them and increase their employability. In a country like India, we are building the foundation for future growth. We are working with the government for skills development.
What excites you about India?
In the next decade, India will be an engine of growth for Sodexo. Each time I come to India and this part of the world, it is very refreshing because our workforce here are very eager to grow and learn. It is a young population, so you can learn from them. These are the customers of the future.

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