Ratan tata ethical leadership

P A R T 4 : Comprehensive Cases

oil company with vast global operations. He transferred to the London office as a business analyst, then worked in strategy for three years, and one year in the Netherlands. Over an 18-year career at the company, he had held several top-level management positions in different business units in six countries, including heading the company’s Spanish operations in the late 1990s.

Chalon was fluent in four languages, including English, and had lived for six years in the UK. He had enjoyed working with colleagues from different countries and considered him- self to have had a very multicultural professional experience. But he had grown weary of moving every few years: “I had re- located a number of times over the years and I wanted to move back, so I started to look for opportunities that would allow me to settle down in France.”

In 2002, he joined an international automotive spare parts company headquartered in Paris, where he headed a large globally-positioned business unit and helped set up a number of global subsidiaries. By 2004, he was ready for new oppor- tunities. He was interested when Michelin approached him to lead a large division in North America. Although the position would be based out of their North American headquarters in Greenville, South Carolina, it was an exciting new challenge and Chalon jumped at the chance to work for the group. He expected the transition to be smooth: “I felt I knew the US well and figured the move to be easy. My sister-in-law is American, and with my fluent English, I felt prepared to work in an American environment.”

The Michelin Group Founded in the 1800s in Clermont-Ferrand, France, the Companie Générale des Etablissements Michelin was the lead- ing tyre manufacturer in the world with 19.2% market share for tyres in 2004 and was a global powerhouse with sales in 170 countries. Famous the world over for its road atlases, restaurant and hotel guides, and its iconic mascot, the Michelin Man, the company’s reputation was built on technical innovation and a focus on long-term growth. It employed over 120,000 people, including over 20,000 in North America.1 Within the industry it had a long-held reputation for excellence and for nurturing the careers of its employees.

“I had managed teams in six countries for large companies and had worked in a multicultural environment my entire career. I looked forward to moving to the US and working with Americans. With my fluent English and my six years’ experience in

the UK, I assumed that it would be an easy transition and I would fit right in.”

Olivier Chalon, President of a large business unit, Michelin North America

Case 9 Leading Across Cultures at Michelin

Greenville, South Carolina, 2004 How did it come to this? Olivier Chalon leant back in his chair and let out a frustrated sigh. For the first time in years he was starting to question his leadership style. Jeff Armstrong, the head of human resources for Michelin’s North American operations and whom Chalon knew personally, had just left his office. He had mentioned to Chalon that several of his colleagues and subordinates had bit- terly complained about Chalon’s management approach. Some individuals thought they were going to be fired or were seeking other positions within the company.

Chalon was shocked by the complaints people had made to Armstrong. Was it really true that people felt his leader- ship style was demoralising? That he lacked people skills? That he was an arrogant manager? Chalon was dumbfounded. Throughout his career he had been known for his ability to mo- tivate teams to accomplish great things and attain outstanding results. In his previous position he had successfully motivated a workforce of over 1,500 European employees to restructure a €1.2 billion business, leading to a profit increase of over 50% on a quarterly basis. The outstanding career success he had enjoyed over the last decade was largely built on his strong interpersonal skills and his ability to mobilise large groups of employees. Where could this criticism be coming from? Chalon knew he had to better understand this situation and to make some changes. “I need to address this before things get out of control and really damage the business,” he thought. He was concerned that his new position might be in jeopardy just six months after moving to Michelin. The stakes were high at Michelin and he was in charge of an important division that was in the midst of a turnaround.

Chalon’s Background Up until now, Chalon had had a long and very successful track record in the corporate world as a talented leader who consis- tently delivered top results. Trained as an engineer at one of France’s highly selective and prestigious Grandes Ecoles, he had started out in sales with the Paris office of a European integrated

1In 2007, Michelin had over 121,000 employees, operated 69 production sites in 19 countries, and had sales operations in 170 countries. The company held 17.2% of the world’s market share for tyres in 2008. (Source: Michelin 2007 Annual Report and Michelin Worldwide 2008 Factsheet.)

PC4-1

Winner of the 2010 European Case Clearing House Award in the category “Human Resource Management/Organisational Behaviour” This case was prepared by Erin Meyer, Adjunct Professor of Organisational Behaviour at INSEAD and case writer Sapna Gupta. It is intended to be used as a basis for class discussion rather than to illustrate either effective or ineffective handling of personal or professional circumstances. Copyright © 2009 INSEAD

PC4-2 PART 4 COMPREHENSIVE CASES

considered himself close and open to his staff’s issues. Lacking the ability to motivate teams? Never! Of all the things Chalon could be accused of, this was certainly the most surprising. Given all that he had accomplished in his career, the accusation was ludicrous.