Five lessons from François Michelin

Porsche likes Michelin tires - photo: Curt Smith

Porsche likes Michelin tires - photo: Curt Smith

The former head of the French tire business that bears his family name, François Michelin, recently died aged 88. He left a considerable legacy of managerial acumen and family business savviness. Here’s five lessons family businesses, and indeed any business, can learn from him.

Entrepreneurship

François Michelin was the third generation of the Michelin family to run the business. Contrary to the popular myth that this generation wastes the family fortune, François went on to be one of the greatest entrepreneurs of his lifetime. Through innovation, the development of the radical tire, and audacious deal making and the acquisition of Uniroyal Goodrich, François turned Michelin into at one time the world’s biggest tire manufacture. Today, it’s the second biggest, just behind Bridgestone Corporation, but Michelin’s success was built on François’ entrepreneurship.

Localism

Many of the best family businesses are often very much connected economically and socially to the city, town or region where the business started. Michelin is no exception to this. Founded in 1889 in the city of Clermont-Ferrand in central France, François made sure Michelin stayed intrinsically connected to the city. He rarely travelled to Paris and always made sure bankers came and saw him in Clermont-Ferrand rather than the other way around. That link also was also strong in terms of employment, where at one time Michelin employed around 30,000 of the city’s inhabitants. Although the employment links were eroded with restructuring and production moving abroad, Michelin is still part of the city’s fabric. That is testament to François’ commitment to stay true to the company’s origins.

Education

François had a mathematics degree, but reckoned the best education was on the factory floor. He went to work at the company in 1951, initially under an assumed name as a fitter in Michelin’s main factory. He also worked as a factory driver and then in sales and marketing, before taking the job of co-managing partner in 1955, and then the chief executive four years later. Starting at the bottom helped to foster François’ paternalism towards the work force, which in turn helped to build loyalty. Interestingly, the technique appears to work, with many emulating the shop floor experience, such as John Elkann, the chairman of Fiat and scion of the Agnelli family, who worked anonymously at a Fiat factory before eventually becoming the head the family business.

Succession

Knowing the importance of designating a successor before he was too old, François groomed his fourth child and son Edouard to take over while he was still in his 60s. Between 1999 and 2002, Edouard jointly managed the business with François until his son assumed sole responsibility as CEO. Edouard tragically died in 2006, but not before he left his mark on the business, which must be partly due to the efforts of François to ensure a smooth succession at the family business.

Listen

François rarely spoke to the media, but in an interview to his home-town newspaper in 2002, he was asked what were the key characteristics of a boss. He replied that it was the ability to use his ears - to listen. “You have to listen from the right and the left to really grasp any situation and to learn for yourself. It’s a joy to listen to everyone, whatever their level in the hierarchy or social status, so as to take away what you need to act,” he said.