It is never easy following a long-standing, successful chief executive. But when his nickname is “the Pope”, and he has already excommunicated one heir apparent, the potential for trouble is obvious.
So it helps that Pierre-André de Chalendar, the fast-talking energetic chief operating officer of the French industrial group Saint-Gobain, knows how to be diplomatic. Thursday, the 49-year-old graduate of France’s elite Ecole Nationale d’Administration steps up to become chief executive of a €41.6bn ($56bn) a year group that has been a feature of France’s industrial landscape since the seventeenth century.
Chosen after the abrupt departure of the previous annointee, Christian Strieff, Mr Chalendar assumes executive duties that for 20 years have been closely guarded by “Pope” Jean-Louis Beffa, the grand old man of French industry who becomes non-executive chairman.
The fact that the formidable Mr Beffa will still be keeping a watchful eye on Saint-Gobain does not bother Mr Chalendar. Indeed, it is a positive factor, he argues. “It is clear that I am succeeding a very strong personality,” he says. “But I don’t see why it is a bad thing to take advice from the chairman, if he has been in the business for 20 years. Why is it better to take advice from someone who is completely new?”
But it also helps that Mr Chalendar does not believe in a revolutionary change in strategy for a group that does everything from making glass and plasterboard to ceramic coatings for furnaces and satellites, insulation and iron pipes.
“We have the same vision for the group and the strategy is quite clear,” says the executive who has spent 18 years at Saint-Gobain running businesses in the US, UK and France. “If I think at some point that significant changes are needed I will propose them . . . and they will be considered by the board.”
Yet he admits that some things will change: how to sell the vision of what Saint-Gobain is trying to do, for example. “Don’t think of Saint-Gobain as bricks, blocks and cement. We will provide solutions with functional materials that will bring innovation into housing and construction.” The big opportunity, he believes, is in helping cut energy costs in buildings, which account for 40 per cent of power consumption in Europe.
The portfolio of businesses will evolve, while remaining diverse – in spite of frequent market criticism of the conglomerate structure. But the aim will be to keep a logical evolution from the existing expertise.
This is how Mr Chalendar justifies the group’s interest in developing ceramics-based fuel cells or its development of solar panels using intelligent glass rather than silicon to regulate energy use.
Mr Chalendar is aware, however, that he will have to deliver more than a clear strategy to make his mark as the new chief executive. The market has agitated for a review of capital investment, to shift the balance away from maintenance to growth and this is indeed planned, Mr Chalendar says. Cash flow will also be improved by squeezing administrative costs and he admits the group can do more to generate operational synergies from its various businesses than in the past.
But cutting costs is not the Holy Grail, he argues. “Additional sales are more important for me,” he says, pledging annual organic growth of 5 per cent against the 10-year average of 3 per cent under Mr Beffa. And the model is BPB, the British plasterboard company acquired in 2005 where, in the first year of integration, organic sales rose 12 per cent after it was brought into the same stable as Saint-Gobain’s insulation business. “That’s the kind of synergy I am interested in.”