How Michelin banished bureaucracy

The tyre maker recognised that you can’t impose autonomy from the top down.

by Gary Hamel and Michele Zanini
Last Updated: 20 Aug 2020
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Innovation

Anyone who’s passionate about cars —or haute cuisine — has heard of Michelin, whose plump tyre­ man is one of the world’s most recognised corporate icons. Headquartered in Clermont­ Ferrand, a university town in the heart of France, Michelin’s 70 plants, sprinkled across the world, churn out nearly 200 million tyres a year — from 27 ­inch bicycle tyres to 13ft  giants used on mining machines. These facilities employ roughly half of Michelin’s 117,000­-strong workforce.

Over the decades, Michelin has scored many firsts. In 1895, it fitted cars competing in the Paris­ Bordeaux road race with the first pneumatic tyres. It pioneered run­flats in 1934 and radials in 1946. In recent years, Michelin has been innovating in a wholly different realm. 

Under the banner of ‘responsibilisation’, the company has been working to dramatically increase the authority and accountability of those on the front lines, an initiative that in early 2020 was on course to deliver a half billion dollars’ worth of manufacturing improvements. Jean Dominique Senard, CEO from 2012 to 2019, proclaimed the transformation to be one of Michelin’s “proudest achievements.” 

Notwithstanding the backing the initiative received from Senard, responsibilisation was more bottom-­up than top­-down. It wasn’t overseen by a programme management office, and there were no weekly or monthly milestones. Instead, it was an off-the-radar project that got started in 2013 when Bertrand Ballarin, a former plant manager who had moved into industrial relations, talked a gaggle of frontline supervisors into running a bold experiment in decentralisation.

The idea of responsibilisation was born out of frustration. In the mid-2000s Michelin had launched the Michelin Manufacturing Way (MMW), a corporate-wide programme to improve productivity via standardised processes, tools, dashboards, and performance audits. 


In brief:

--- Michelin’s attempts to standardise its tyre manufacturing processes had stifled creativity, initiative and accountability 

--- In 2013, it launched a bottom-up experiment to decentralise, which it calls ‘responsibilisation’

--- The plant manager behind the project, Bertrand Ballarin, believed that if you wanted to unleash initiative, you needed to let people on the ground decide how to do it

--- Teams involved were given a year to complete the voluntary experiment, without management interference, but they still had to deliver on their operational commitments 

--- “The tipping point, says Ballarin, came when the teams figured out that no one was going to stop them”

--- The results in at least one case showed productivity increase 10 per cent, tyre defects decreasing from 7 per cent to 1.5 per cent and absenteeism reduce from 5 per cent to nearly zero


As the new methods were rolled out, factory leaders became concerned that the project was crowding out local initiative and creativity. It also seemed at odds with a famous dictum of the company’s co-founder Edouard Michelin: “One of our principles is to give responsibility to the person who carries out a given task because he knows a lot about it.” Jean­ Michel Guillon, then head of Michelin’s personnel department, worried that the pendulum had swung too far toward centralisation. “Are we,” he mused to a colleague, “at risk of losing our soul?” Other executives, including Senard, shared his concern.

By 2010, the efforts to standardise manufacturing practices were producing diminishing returns. At the same time, shorter product cycles, new competitors, and the growing importance of services were challenging Michelin to become more creative and flexible.

An experiment in autonomy

Looking for a way forward, Guillon and an executive from the corporate manufacturing department hosted a workshop in early 2012. While the 20 participants failed to come up with a new plan, they agreed that frontline teams needed greater autonomy to pursue their own goals and improve local operations.

One of the workshop’s most vocal participants was Ballarin, who was nearing the end of his tour as manager of Michelin’s Shanghai plant. In a company known for long tenures, Ballarin was an exception—he had spent three decades as an officer in the French Army before joining Michelin in 2003. Nevertheless, he soon developed a reputation for rescuing underperforming factories. Before turning around the Shanghai plant, a joint venture with a Chinese state­-owned enterprise that had been one of Michelin’s worst ­performing factories, he had averted the closure of a factory in central France by shifting its focus toward airplane tyres. 

In each case, by focusing on the “social dimension,” Ballarin had built a shared purpose, upgraded worker skills, and given production teams more freedom. Many of Ballarin’s hard nosed peers viewed his approach with skepticism. As Ballarin would later joke, they considered it “as useful as poetry”. 

A few weeks after the workshop, Guillon invited Ballarin to join the personnel department as head of industrial relations. Eager to “add collective intelligence and heart to our production system,” Ballarin quickly accepted.

Once in the new role, Ballarin immersed himself in social science research, delving into the sources of human motivation and engagement. Ballarin’s thinking crystallised: “We had been organising work with an exceedingly narrow view of human beings. We assumed that people would exert effort only if closely supervised or motivated by pay. As a result, people in our factories were using only a fraction of their capacities.”  

Behind this was an even deeper conviction: if people were inherently creative and inclined to be passionate about their work, they should take the lead in designing their own work environments. Ballarin believed that employees, not corporate staffers, should take the lead in “defining what autonomy and accountability mean for them”.

By summer 2012, Ballarin had sketched the outlines of a bottom-up initiative labeled MAPP— a French acronym for “autonomous management of performance and progress”. Seven tenets were key:

  1. Participation would be voluntary

  2. Frontline teams would take the lead in discovering new ways of operating autonomously 

  3. The demonstrator teams would be average performers drawn from different geographies and product groups 

  4. Teams would be encouraged to focus their efforts  

  5. Teams would be given a full year to run their experiments

  6. Demonstrators would be expected to deliver on their operational commitments even as they tested new approaches

  7. There’d be no management interference

Ballarin’s experimental approach ran  counter to Michelin’s top-­down engineering culture but appealed to Guillon, who  later told us: “I was familiar with other companies with autonomous workforces, like W.L. Gore — but the applicability of  these case studies was  limited by either their small size or the fact that they were born that way. It was clear to me we’d have to blaze our own trail.” Less enthusiastic executives were placated by the fact that the demonstrator teams would still be expected to “make plan”.

The results

Having sidestepped potential doubters, Ballarin reached out to plant managers for help in finding volunteers. Among the first to sign on was the assembly crew in Michelin’s Le Puy tractor tyre plant. Olivier Duplain, a team leader, explained his enthusiasm for MAPP: “When I started at the company in 2011 I quickly noticed that a lot of expertise on the shop floor was being wasted. I was convinced we could get much, much more from our people. I viewed the demonstrator project as a very interesting opportunity and when I suggested this to the team, everyone was interested.” 

By the end of September, Ballarin had recruited 38 teams from 17 plants. Together, they encompassed 1,500 people, or a little more than 1 per cent of Michelin’s total headcount. 

The next few months were hectic. Ballarin journeyed to each plant for kick-off meetings. He reminded plant managers that “the whole point of the exercise is for teams to discover the solution. The only help they need is for you to encourage them to be bolder and more creative”. 

Ballarin walked each demonstrator team through a short document explaining the mission of responsibilisation. The focus was on the what, not the how. Supervisors were encouraged to “let go” and shift their role from “deciding” to “enabling.” Each team was asked to document its progress via notes and videos that would be shared at the end of the yearlong journey. While some team members were skeptical about the sudden enthusiasm for empowerment, most welcomed the chance to be part of Ballarin’s “laboratory”. 

The demonstrators kicked off in January 2013, and by March, the flow of ideas and experiments was ramping up. The tipping point, says Ballarin, came when the teams figured out that no one was going to stop them.

As the year wound down, Ballarin ran a series of workshops that brought together representatives from each demonstrator, including the supervisor and three to five operators. The workshops were used to assess the impact of responsibilisation on productivity and engagement. The results on both counts were remarkable. 

By the end of the year, a demonstrator at the Michelin plant in Homburg had seen defects on some of its most popular tyres decline from 7 per cent of units produced to 1.5 per cent. In tandem, the team’s productivity increased by 10 per cent, while absenteeism dropped from 5 per cent to virtually zero. These changes, in a single unit, helped Homburg raise its output from 88 per cent to 92 per cent of rated capacity. 

Demonstrator projects in other plants reported similar gains. The Michelin plant in Olstzyn, Poland, saw its defect rate decline by 50 per cent, and in Zalau, Romania, the demonstrator team cut the time for new operators to reach their productivity targets from five days to three. 

Engagement also soared. A common sentiment among team members was that for the first time in their careers, they felt as if they were managing their own business. 

The change was perhaps best captured in a poster prepared by one of the demonstrator teams, which depicted two trains. The first train, pre-MAPP, was portrayed as a sputtering steam engine. The supervisor, sitting in the locomotive, was shouting orders at employees who were lounging in different wagons at the back. The second train, post­-MAPP, resembled France’s high speed TGV and had everyone sitting in the same carriage.

Like Michelin, every company must chart its own path to humanocracy. Nonetheless, it’s reassuring to know that you don’t need a legion of consultants, or a massive corporate change programme, to get started.

Reprinted by permission of Harvard Business Review Press. Excerpted from Humanocracy: Creating Organizations as Amazing as the People Inside Them. Copyright 2020 Gary Hamel and Michele Zanini. All rights reserved.

Image credit: Nicolas Liponne/Nurphoto via Getty Images

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