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September 16, 2012 10:16 pm
The aristocratic Henri de La Croix de Castries, to give him his full name, is as establishment as you can get in France. Looking much younger than his 58 years, he is chairman and chief executive of Axa, one of the world’s largest insurance groups, and is among the country’s best known captains of industry.
He was a frequent visitor to the Elysée palace, where former French president Nicolas Sarkozy regularly solicited his views and once even offered him the job of finance minister.
De Castries’ name has also been associated with France’s new socialist president, François Hollande. Both attended HEC, the leading business school, and the Ecole Nationale d’Administration (ENA), one of the country’s elite-producing grandes écoles.
“HEC has its first president of the republic,” ran a story on the front page of Le Monde, four days after Hollande’s election victory in May. It was illustrated with headshots of other notable graduates, including Pascal Lamy, the head of the World Trade Organisation; the chief executives of cosmetics company L’Oréal, luxury goods group PPR, France Telecom and EDF, the utility company; and Dominique Strauss-Kahn, the controversial former head of the International Monetary Fund.
The business school has been consistently near the top of the FT rankings in recent years. De Castries ascribes this to a welcome trend in recent years among most French business schools and Sciences Po, another grande école, of becoming more international.
“When I was a student, the number of non-French students was limited. Today, the teaching is much deeper and broader – very similar to what you have in many of the best worldwide business schools,” he says.
De Castries, whose family has included a naval minister under Louis XVI and General Charles de Gaulle’s wartime ambassador to the US, says he chose the schools because he wanted to go into business or the civil service.
He attended HEC in the early 1970s for three years while also studying for a law degree. The business school gave him a “basic education in business, including finance, accounting, marketing, a general understanding of business as well as some economics”.
But the most valuable lesson for de Castries was teamwork. “At the time, the French education system judged people on their individual performance. Now, of course, it has changed, but then it was unusual to learn how to work in a team. It was probably my first experience of real teamwork.” He identifies the ability to work with others as a key ingredient of business success in addition to drive and open-mindedness. Drive cannot be taught – “you either have it or you don’t” – but he believes the best business schools should be able to inculcate the other qualities.
“One of the achievements of these schools is to try to extract the best from people – to make them self-confident but not arrogant. What will define your success or your failure [as a manager] is your ability to interact with people and work with others.”
It is a quality de Castries looks for when recruiting. “When it comes to selecting senior executives, the limitation in most people’s credentials is not their IQ – it’s their emotional quotient. There are a lot of people who are extremely bright, who have all the academic credentials but cannot manage teams properly and be effective, because they don’t listen or don’t know how to motivate people.”
Does he also look for business school experience? “First, we look at the individuals. Do they fit or don’t they? It’s always good to see that they’ve had a good education, because it makes things easier. But above all we look at what we think they can achieve whatever their background.”
After HEC, de Castries formed part of a stellar intake at ENA where fellow students included Ségolène Royal, the former socialist presidential candidate and Hollande’s former partner, and Dominique de Villepin, former prime minister, as well as Hollande himself.
Despite the prestige of attending ENA, which has churned out innumerable French prime ministers and three presidents, de Castries says that if he were starting out today, he would not go there – though he would still go to HEC. Entering the civil service used to be the best career trajectory, but he believes today the globalisation of business offers even better opportunities.
“Young, hyper-competitive French students now either go abroad or they do one of these French elite schools and then work – and then they go abroad. For my generation, ENA was a way to accelerate your professional life. I don’t think that’s the case any more.”
De Castries believes HEC was, even at the time he was there, the most open-minded French business school. He cites a two-month business study trip to Montreal in Canada as invaluable, as well as a trip to China.
“A small group of us went to China in March 1975. In the middle of the cultural revolution, I spent nearly a month there. It was phenomenal, because there were very few foreign students at the time going to China.”
Asked about France’s difficulties in adapting to globalisation, de Castries draws a distinction between the outlook of French business and that of the country’s government. “We have a very large number of successful, large corporations. Most of the companies in the CAC 40 are leaders in their [sector]. This did not exist 30-40 years ago,” he says in reference to companies such as L’Oréal in cosmetics, Total in oil, GDF Suez in power generation, EADS, the Franco-German aerospace group, and LVMH and PPR in luxury goods.
Government, on the other hand, has found it tougher adapting to globalisation, manifested in the inability of many French politicians and civil servants to speak English, says de Castries (who speaks fluent German and English, and understands Spanish and Italian).
“The tendency of the political and administrative world is not to be very international, so they have trouble dealing with globalisation. It’s not their priority. They have many other qualities, but not this one.” HEC’s success, he believes, derives partly from being dependent not on the state for funding but on a chambre de commerce – “which is closer to business and more pro-business”.
De Castries continued the high-flyer’s route into the Treasury fast-track from ENA, as an inspecteur des finances. He was spotted by Claude Bébéar, one of France’s most senior businessmen and then head of Axa, who lured him to the insurer in 1989. Jean-Claude Trichet, the former president of the European Central Bank who was then head of the Treasury, advised de Castries against taking the job, however. “He told me I was making the mistake of my life,” recalls de Castries.
He has spent the rest of his professional life at Axa, joking that this “shows how lazy I am”. But having started as finance director and moving on internally, “I was considered to be a candidate for succeeding Claude Bébéar. I had no reason to leave.”
He became chief executive in 2000, adding the role of chairman in 2010. The past four years have been spent navigating the financial crises that have engulfed the financial services industry in particular. The recent eurozone crisis has felled many of its leaders and heads of state, including Sarkozy and his government.
De Castries made a “small” donation to Hollande’s primary election campaign. “I’ve always helped my friends, whatever [their] ideas, because it’s a way to promote democracy. You can help people who don’t share your ideas.”
Asked whether France is becoming less business-friendly under Hollande, who has singled out the finance industry as his “adversary”, de Castries replies: “Has it ever been a business-friendly place?” He traces France’s distinctive uneasiness with wealth back to the 14th century and the Templars.
He says the current trend of higher taxes predates Hollande. “The risk we run now is that it becomes so business-unfriendly that it becomes unbearable.”
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