• Michel is the CEO of French transport operator Keolis for 3i between 2004 and 2006.  During that time, Keolis streamlined its structure, won major new contracts in Scandinavia and the UK, and made several strategic acquisitions.  As a result, the company’s EBITDA rose 32% and 3i secured an exit turning €85m of original cost into €340m at an IRR of 110%.
• Before joining Keolis, Michel gained significant experience in managing relationships with French local authorities during his time at the water, energy and waste giant, SUEZ.
• During a long career at SUEZ and its constituent companies, Michel’s CEO roles included Elyo  and SUEZ Industrial Solutions.
• Before SUEZ, Michel had senior roles at Elf Aquitaine and the French Ministry of Equipment.

How did your previous roles prepare you for the leadership of Keolis?
Michel: The transport sector resembles the water, energy and waste sectors in several ways.  Firstly, it’s dominated by large, long-term contracts awarded by public bodies.  Secondly, there are clear parallels in the way performance is measured, with a focus on targets and outcomes rather than methods of delivery.  Thirdly, there are strong similarities in the way contracts are won.  Preparation for the tender process is intense and expensive, so you need be very careful in choosing which contracts you’re going to bid for.  You then need to start doing your homework a long time in advance – if you wait until the tender is actually underway, you stand no chance.

How did 3i help you to take Keolis forward?
Michel: They were extremely helpful in two main ways.  First of all, they were a great source of suggestions for more efficient management – establishing key performance indicators, making sure we had the right financial systems, putting in management processes to deliver a tightly-run ship.  Secondly, they played a vital part when it came to prioritising opportunities for international expansion.  Because tendering is such an expensive process and needs intense local knowledge, no company can afford to bid for contracts with a scattergun approach.  3i helped us think through our expansion plans in our largest international operations, the UK, Sweden and Germany, and also helped us select other territories we wanted to target, such as Belgium and Denmark.  They then introduced us to contacts in those locations who could help us get to know the local regulations and players better.  As a result, our international expansion is highly disciplined, and it’s happening quickly and profitably.

What were the key challenges you faced as CEO of Keolis?
Michel: Most importantly, we needed a more cost-effective structure to carry us forward as we went for international growth.  As a transport business, we have to form a new subsidiary for each franchise – in fact, Keolis had more than 200 subsidiaries when I joined: it was unmanageable.  Each company had its own set of corporate activities, which was very expensive.  A large part of the solution lay in regionalisation.  We identified that a good manager could run about 30 companies, so we created 14 regions of that size, within France and internationally.  We then restructured service provision across the company.  Some services, like HR, were aligned to a region and some, like IT, were delivered on a group-wide basis.  This resulted in a massive saving in administration costs and also provided great career opportunities to the new regional managers.  At the same time we have rejuvenated the “top” of the organization by recruiting about 20 new talents with the support and networks of 3i.

How did you engage people in the changes you were making?
Michel: Transport is a people business and the attitude of the employees can have a big impact on winning passengers.  In some ways, a transport franchise operator has an unusual relationship with the bulk of the workforce, because they know you might lose the franchise one day and they’d simply transfer to the new operator.  Therefore you have to work extra hard to harness their loyalty and energy.  One of the ways we motivated people was, of course, through reward.  Everybody from top to bottom had a bonus opportunity linked to key performance indicators.  The targets for a bus driver were different from the targets for a regional manager but everyone was clear on where we were going and how they would benefit if we achieved our goals.  Development opportunities are important too – together with a leading French MBA provider, we set up an academy that helped people step up to the new regional roles.