During the lattest edition of Vivatech I had the opportunity to spend a long time with Olivier Delabroy, VP Digital Transformation at Air Liquide.
Bertrand Duperrin : Everybody knows the name Air Liquide but very few can tell exactly what you do. So let’s start with a short presentation of Air Liquide.
Olivier Delabroy : Our product consists of a very small numbers of molecules that make life, matter and energy concrete. We are in every industrial chain. In the food-processing industry we are in the plastic bag to keep a salad fresh, in the Coca Cola bubbles, in the automobile industry we are in surface treatment and steel production, we are in the ship in your cellphone, in the health industry.
Today our turnover is 20 billions euros and we have 68 000 employees. We have 3 millions clients and patients.
Our distinctive characteristics is to be in nearly every industry and to be always at the middle of the supply chain. Being at the middle is fascinating because we are at the front row of any transformation but it forces us to be very vigilant because it comes with the risk of being disrupted.
BD : And what has been your career path so far ?
OD :I’m a pure Air Liquide “product”. I’m an engineer, I made a thesis about combustion, I was the head of R&D before being in charge of digital transformation.
BD : You are very close to the core business and operations. What does digital transformation mean to Air Liquide ?
OD :Â Energy transformation, health transformation, digital transformation : it’s all about our clients transformation so we don’t have the choice.
What is key in digital transformation to onboard employees is sensemaking and, given our business, our transformation makes sense to everybody.
BD : How did it all start ?
OD :Â When I was head of R&D we were very efficient and technology centric, we used to do incremental R&D. I had the intuition that we were missing something because we lacked the ability to understand our clients and their uses.
“Transformation requires a clear mandate from the management and autonomy”
So I created i-lab, an internal structure to explore new territories and we put together various profiles like historians or anthropologists. We understood that in order to innovate and create value, we needed to start with the uses, not the technology. It may look obvious but for a business like us it was a revolution.
BD : Many businesses are aware of that but in many cases it does no further than statements of purposes
OD : Another thing we understood is that to manage such a move in a large business there was two requirements : a clear mandate from the management and autonomy.
We had an explicit mandate from the CEO and we were like in a protective bubble. Rather than being disrupted from the outside, by competitors, we did a benevolent disruption from the inside.
One example. We decided to invest on matters related to air quality. And here’s is how we decided to do so. Is it a societal stake ? Yes. Are we legitimate ? Of course because we’re working in the health industry and on reducing pollution. Did we make business in air quality ? No. So we decided to address this business. And we started with the uses by doing ethnological researches on people sensitive to pollution.
BD : But being in a protective bubble may make it hard to impact the business…
OD : You’re right. So after some time I came to my management and say we needed a digital transformation position to address the business.
BD : Digital transformation ? But there’s not a lot of digital in all the things we mentioned so far ….
OD : On the contrary, there’s data and experience everywhere ! And, through that, I claiming to transform the core business.
“The digital transformation mainstays : Assets, Customers and Ecosystems”
The idea is to redefine the promise made to clients and employees by leveraging what we call ACE : Â Assets, Customers, Ecosystems.
Assets : 400 plants, 6000 tanks, 150 000 connected objects in the health industry in France. We have an incredible amount of assets to leverage to make the supply chain more efficient. For example we launched a project called “Connect” that is about managing and monitoring all our plants from a single place. We rely on 15 years of data to propose the most optimal settings to operators in plants. And we worked hard on the operator interface because that’s a service we designed for them, it must be as easy to use as possible.
We also worked on predictive maintenance and the ability to anticipate machine failure. In eight months it made us save a significant amount of money.
Customers : of course we’re still going to compete on products and prices but the next battlefield is client experience to win an retain clients. We benefited from an awesome accelerator when we bought Airgas.com in the US. They have an exemplary culture and a great B2B website that’s been working for a couple our ours. They are fiercely omnichannel : phone, stores, online…the client decides one the channel. Clients can go online to order to do self-care and the experience is fully customized based on the client profile. Boeing and a SMB will have two different experiences that fit their specific needs and constraints.
Then Ecosystems. First, internal ones. The vision is to provide everybody, from the CEO, to the operator, the right information at the right time. We have the information but finding it and making it available is a challenge. We need to find it, set it free, break the silos. We also favored P2P know-how sharing with a video sharing platform made byÂ Speach Me. Operators record their best practices, the way they set, use or repair a machine and share it with their peers.
We also created a “FAB” (multidisciplinary elite team) on “New Ways or Working”. But we’re not starting from scratch. We rolled out the Google Suite 2 years ago and there’s a lot of traction on these new ways of working : I make my reports for the executive committee on Google Docs, share it with them, we annotate and work on the document live, online. We have the culture of a networked organization and leveraged it, what explains this fast adoption.
Then there are external ecosystems. The idea is to leverage startups to find innovation at the fringe. The traditional linear approach to supply chain is not possible anymore, we must shift to a distributed world. And we’re at the center of this world !
BD : From my point of you digital transformation is mainly about simplification. Is it something you’re working on ?
OD : A few month ago we started a “voice of the customer” program. Now we’re making it visible and making employees and managers accountable. If we don’t react to simplify we’re building a gap between the employee facing the customer and the manager who does not change anything.
It’s impossible to have a gap between the employee facing the customer and the manager who does not change things.
Implementing digital tools does not work it does not come with change in operations. For the “Connect” project we worked on job evolutions, simplified maintenance programs, observed the irritants. We saw obvious things, easy to change.
Regarding multichannel, we gave clients access to everything without having to call the back-office staff. So we had to explain the back-office staff we were removing tedious tasks to give them time to work on added-value tasks.
BD : So you pay a lot of attention to humans in your transformation journey…
OD :Â Humans are a key asset, they must be at the heart of the approach. This is a bug opportunity for us. For example we have nurses visiting people ! This is a great lever to do things !
Legacy businesses have a responsibility towards people and that’s a great opportunity
We met with Jeff Immelt (GE’s former CEO) and he told us :Â “The guys from the valley, they have no respect for assets and people“. We, legacy businesses, consider we have a responsibility in this regard and that can help us to make a difference.
Tomorrow’s leader will put people at the heart of their governance at every level. Investment decisions will require the adoption of an MPV by both clients and employees.
BD : What should one remain alert to when driving such transformation projects ?
OD : Digital usually fails for three reasons
- no transformation to stand by employees.
- no intimacy between digital and IT, it’s crippling many large businesses.
- no intimacy between digital and operations
I mentioned our FABs earlier. They are small 10 people teams that work on a transformation stream (client experience in one industry, operations in a plant..) : there are people from the business, from the operations, from marketing, IT, digital skills (data scientists, designers). They are agile teams with, sometimes, a “mirror team” in Houston or Singapore. It ensures that we leave nobody aside and that we’re pragmatic.
BD :We often mentioned the fact you were at the middle of supply chains. Most businesses in this situation are trying to get directly in touch with the end customer, partly because they want to capture precious data or don’t want their experience handled by intermediaries….
OD : There is one thing we must learn from GAFAs : they don’t manage technologies or product but clients. If we don’t manage our clients someone else will. We’re working on it. It also implies a new state of mind, from client ownership to client management.
BD : Imagine we meet again in three years. What would you like to tell me then.
OD : If I’m still here in three years it would mean that I succeeded. So I’ll still be in the company but in another position since my current job would have no reason to exist anymore. But still in digital.
In three years I would like to say that we redefined value-chains beyond operations and that our employees satisfaction score is insanely high.
Thanks a lot to Olivier Delabroy for the time he gave me for this meeting.