As part of the IFERA series on “Family Businesses in Times of Crisis”, we are pleased to share with you insights from Association Familiale Mulliez (AFM) by Rania Labaki, Associate Professor and Director of the EDHEC Family Business Centre, based on a public speech (*) of the AFM president Barthélémy Ghislain and an interview of the family shareholder Camille Poutiers.
The Association Familiale Mulliez is a federation of autonomous enterprises, such as Auchan, Decathlon and Leroy Merlin, operating in different sectors and controlled by nearly 1000 family members between the 4th and 6th generation. The family inspires meaning in its enterprises with a long-term perspective through its motto “We are useful in undertaking by and for Man” (**) and its 2035 vision “Creating for people”.
The COVID-19 pandemic had a ripple effect on the world economies and societies. How have the family and the business been particularly impacted?
Our businesses represent a good panorama of commerce around the world. They are plural, spread over many domains and are present in global territories. Our activity was penalized to different degrees by the crisis, depending on the type of business. The catering business was, for example, stopped during the lockdown, whereas the food or more specialized businesses continued to operate in compliance with safety conditions. The family retirement homes for the elderly were the hardest hit given the raise of absenteeism and residents’ health concerns.
Our family was able to show solidarity in these difficult times. We have experienced difficult times in the past which have become times of prosperity. With several generations represented, our family has combined almost 50 years of history which have taught us how to weather crises. We also all believe in “the project of meaning” that we have.
How did these changes translate into initiatives (or strategies)?
We have relied on our modes of governance by adapting our operating methods. We have created mixed groups among companies to reflect on the different daily problems and create synergy while inspiring each other. Regarding family members, internal communication has also been strengthened, by setting milestones and regularly sharing key elements to reassure and inform in complete transparency.
At the start of the confinement, the next generation members have volunteered to help by providing support to our businesses, in particular the food drives, helping to relieve the important flow in the preparation of orders.
There have also been incredible outbursts of solidarity within our companies which have been largely initiated by the collaborators themselves rather than upon the request of the family shareholders. It is somehow a manifestation of the relationship we have with them and the values that the family has conveyed in these businesses.
For instance, Decathlon adapted its entire production of snorkeling diving masks to equip hospitals around the world with a low-cost lifesaving respirator. Boulanger donated electronic tablets to the “residential accommodations for dependent elderly” (EHPAD, for its French acronym) so that the elderly residents can see and interact with their families. Our catering companies, such as Salad & co and Bistrot Madame, distributed meals in hospitals while Kiabi distributed clothing kits for the newborns. Auchan adapted its circuits in the stores to facilitate access to nursies. The hundreds of local, non-centralized initiatives, initiated by the employees and the businesses, demonstrate a truly fraternal spirit.
Family businesses are known for their values of social responsibility, acting as ambassadors of the territories in which they are rooted. How did these manifest themselves in your country?
Our activity supports thousands of suppliers, service providers, and local artisans. Beyond the donations of masks for the traders in Lille (Northern France), the bonuses for cashier hostesses, the aids to those who were in more difficulty than us, we are participating in the efforts for the recovery and relaunch of the economy. We work so that the AFM ecosystem opens up to the fabric of local entrepreneurs, small businesses and local artisans, to learn from them and to reach out to them to support them in building success internationally.
The current trend for relocation, which is taking place in the face of the crisis, has already been initiated by us before the crisis. The Decathlon model is an ultra-virtuous example. It consists of producing in the same areas where we distribute, leading to an adaptation between the manufacturing cost and the product price for the consumers. So, it’s about reinventing the circuits to be able to have the lowest price when reference values have changed.
How are you preparing for the post-crisis phase, in line with medium or long-term challenges the family business will be facing?
While the crisis is likely to be lasting in France as in Europe, the consumer is looking for other means of consumption. If we refer to our experience with China where our 600 hypermarkets have reopened at the end of the lockdown, we realized that we have more “pick-in-store” orders, nearly 1000 of which are prepared in each hypermarket per day, while in other sectors of activity the pace of orders was very slow. We listened to our employees to adapt towards the recovery, because they are the ones who know the customers best and come up with the right ideas. For instance, we launched the “drive in our stores”, which allows us to maintain the relationship with the customer even if it does not generate a lot of turnover in the start.
We have prepared the basics before the crisis very carefully to ensure the maximum health and financial security of the businesses. Preparing for the recovery also consists in managing the social crisis by initiating a dialogue with the unions to get the social partners aware of the reality of the situation.
In the past weeks we had a good opportunity to stop and listen to ourselves. With a positive attitude, is it possible to see this crisis as an opportunity to improve our personal lives and businesses? If yes, how?
The crisis is an accelerator of trends that were already present in the economy: digitalization, organization of the supply chain, environment. This leads us to find the most suitable forms of trade for the post-crisis period. It also highlights the spirit of solidarity of the family and the collaborators. The strength of businesses that rely on their relationship with people, rather than money, was revealed in this crisis. Finally, family businesses are currently more resilient and their role in these times of crisis is to act as inspirers of good and long-term planning.
(*) In « Cafés de l’Après » by Comité Grand Lille.
(**) Translated from French : “On est utile à entreprendre par et pour l’homme”.