Five months after he took over as the youngest chief executive in Schneider Electric’s 174-year history, Jean-Pascal Tricoire announced a $6.1 billion bid for American Power Conversion (APC), a Rhode Island company that supplies electrical gear to computer data centres. Investors in what had been considered the General Electric of France responded by driving down Schneider’s stock by nearly 8 percent over two days of heavy trading.
“I was the new guy, and I was buying this new business I didn’t know anything about,” says Tricoire, now 49, of the reaction he got from his more conservative shareholders. “I lost a lot of sleep over that one.”
He shouldn’t have. Since Tricoire took over in May 2006, sales at the French conglomerate have risen 90 percent and earnings have more than doubled, to $2.5 billion in 2011. Tricoire has shaken up the internal culture at Schneider, a 130,000-employee company founded in 1838. It prospered with the rise of the global electrical industry.
With operations in more than 100 countries and a history of running its many product lines as separate busi- nesses, Schneider seemed practically impervious to change. The Paris- based company owns a profusion of brands, including Square D circuit breakers in the US, and sells thou- sands of items for industrial automa- tion and building management.
Many of its managers had built prosperous careers selling electrical equipment to outside distributors who had cozy relationships with their customers. There was little incentive for them to work closely with other Schneider divisions on marketing or to develop new prod- ucts designed to capitalise on the trend toward centrally controlled and monitored networks.
Luckily Tricoire had a mandate. The man who promoted him, former CEO and current chairman Henri Lachmann, “wanted to change things”, and was willing to look beyond France’s incestuous business culture. Instead of graduating from one of Paris’ top business schools, Tricoire earned a degree in electronic engineering from a college in Angers. He wasn’t a Schneider lifer, having joined it in a corporate acquisition in 1986. He’d spent most of his career on the ﬁeld, including Italy, China and South Africa. “I loved operations, and I loved operations far from the headquarters,” says Tricoire. “I had no passion for corporate.”
One of Tricoire’s ﬁrst moves after buying APC was to tell 20 Schneider division chiefs that their products would have to provide integrated electronic monitoring in the way APC controls the vast electrical demands at data centres. “Ten of them said no way, not with their product lines,” recalls Tricoire. “Those 10 weren’t with the company much longer.”
(This article is excerpted from the latest Forbes India 23 November, 2012 issue which is now available at news stands and book stores. You can buy our tablet version from Magzter.com)