How Sodexo’s CEO Manages Global Strategy Across 50 Countries

Welcome to HBR on Strategy, case studies and conversations with the world's top business and management experts, hand-selected to help you unlock new ways of doing business. As the chair and CEO of Sodexo, the France-based food services and facilities management company, Sophie Bolland leads one of the largest employers in the world, with so-called frontline workers in nearly 50 countries. Managing that workforce and the supply chains that enable them to do their jobs is a complex undertaking that involves balancing both global strategy with local execution. In this episode, Harvard Business Review executive editor Alison Beard sits down with Bellon to discuss her approaches to talent management, environmental sustainability, and supply chain resilience, all while driving future growth. This conversation was originally part of HBR's Future of Business virtual conference in November 2023. Here it is.

Sophie, thank you so much for joining me.

Hi. Hello, Allison. Thank you. No, thank you for having me.

Yeah, and I know it's very late where you are, so we really are grateful. We are focusing on transformation in this session, Sophie, and I know that sustainability and food systems is probably your biggest area of focus. What shifts have you made in terms of sourcing, supply chain, and resource use that you think other organizations might be able to emulate to reduce their own waste or carbon footprint?

So first, I think sustainability and food are very closely linked. You know, we are, I think, in a global food system that is out of steam. And there are some paradoxes, like 800 million people suffer from hunger. And at the same time, we waste from farm to fork, a third of the food is wasted. And also, by 2050, the agricultural production will have to increase by 50%, more than 50%, to feed 100 billion people. And also, the food system is already responsible for a third of the greenhouse gas emissions for human activity. On top of that, food inflation has peaked in recent months, and a lot of people now rely on food banks, because they can't eat properly. So that number of 800 million people suffering from hunger is increasing. But still, the food is not valued enough because we continue to throw it away. So I really think that to fix our food system, first, it must be a priority. And And much of the future will be also played out on our plates. And I don't think it's something that we talk about enough, you know, and I think we definitely need to accelerate the transformation of our food services. And it's critical. And as we touch 100 million people every day, you know, for us, we have a lever And, uh, and our, our ambition, uh, as a company is, uh, to be a market maker in sustainability. I think we have always the, uh, the— as you said, the company was created by my father, and, and he always— since the beginning, he gave a mission, a, a double mission to the company. So I think we have been pioneers in that area, and, uh But we want to continue to make an impact and deploy this commitment globally and at scale. So for example, today we are designing a new recipe so that 70% of our dishes can be labeled low carbon by 2030. Or we are also developing local sourcing and short circuit chains for with SMEs, to be spent with SMEs. And now we're already at about $2.2 billion. So I think also to do that, you know, you need to never forget that you need common sense and humility.

Your business is so complex. You're operating in so many different geographies, some of which are further along than others in sustainability practices. So how do you make sure that you're progressing in each of those different areas of the world, collaborating with local partners and governments and really making progress? How do you balance sort of having global standards with the local realities on the ground?

Well, I think first, for example, in terms of food waste, because food waste is not acceptable, it's a scandal, but it's largely invisible. So for example, we want to develop that globally. Globally. And to do it, we want to measure it. And so we are setting targets, setting goals and achieving them. We are tracking them. And for example, we have our program is called WasteWatch, the WasteWatch program. So we measure every day the waste produced on our sites. And it's a game changer. You know, it raises awareness among our teams, our clients. Our consumers. So simply by implementing and by measuring, we have an objective to reduce by 40% on average the food waste. So the first takeaway, you know, especially when you're in large organization like ours, is what gets measured gets done. And that's very important. Second example, you know, in reducing our carbon emission, it's urgent to need to limit the excessive consumption of certain food. And for example, we all know that animal protein is not good, especially with the red meat. But, you know, in some countries, because we have— we see different situations across the world— in some countries, you know, the In some countries, the red meat is not consumed, like in India, for example. We operate in India, and in India, 90% of the meals we serve are already vegetarian, vegetarian, and vegetarian option. But the challenge in India is that the energy used to cook those meals is not, is not green. So we have a challenge, you know, on, on on transforming that. If you take another country, for example, Brazil, much of the energy used in Brazil is hydroelectric, so it's good. But then it's one of the countries where you have the highest level of consumption of meat. So there, you know, we need to, to push people to have more a vegetarian diet. So I think the second takeaway is that we need to have an approach with the cultural and the economic issues that is very local and take into account, you know, the culture of the country, the habits. And so for a global company, it's not that obvious, and it's not obvious to have a unique solution. You need to adapt.

And I imagine part of that is gathering intelligence from the people that you have on the ground. So how are you thinking about staffing those operations in terms of people from headquarters versus people who are local?

Yeah.

So, yeah, I think it's, it's, it's, it's very important. It's very important to empower, as you said, people on the ground. You know, we are a people business. We have more than 440,000 people around the world. And we really saw that during the COVID period, it's those people who took the decision to adapt. You know, what was happening in China has nothing to do with what was happening in Europe and what was happening in, in, in North America, for example. So post-COVID, we decided to make our organization simpler and more agile. And we had an organization by big market segment globally. And we decided to put the responsibility back in the countries to have that agility. And we realized, you know, that it was, it helped us to have faster decision-making, more mutualization, And so that's, I think, is very important. At the same time, you know, we are, we are a business, you know, we're operating in corporations, we are operating in universities, we are operating in hospitals, senior homes. So we also benefit, you know, within a country from the segmentation, because the environment of students at school or university or patients in hospitals or employees at work are not the same. They might have some different needs. And this way we develop a strong expertise in this environment. And that is very important. And we have, for example, a growth officer for healthcare at the global level so they can— so we can gather all those expertise and diffuse them in other parts of the world. And I think also between the global and the local, of course, in our service business, the local dimension is very important. Important. But I think also globally, you know, we have very strong fundamental fundamentals that we can build on. As I said, you know, when the company was created in 1966 by my father, there was a mission to, to improve the quality of life of our people but also of the people we serve, and to contribute to the economic, social, and environmental progress of the community where we operate. So that's a very, very strong mission, you know, that was given to the organization more than 50 years ago. With that, we have some values: team spirit, service spirit, spirit of progress. And I can tell you that every time I go across the globe, you know, visiting the team, whether it's in Bangalore, whether it's in Milan, whether it's in Los Angeles or San Diego, where I was not a long time ago, I'm so impressed how our employees carry those values. And how does that happen? Well, I think our managers and our top leaders and then the rest of the cascading to the rest of the managers have a key role to play to keep those fundamentals. And I think it's also, you know, I strongly believe that those fundamentals, that's what takes us to become a world leader. And also, I think that's what's going to help us, you know, continue to differentiate ourselves from our competition, from our competitor. And also, you know, in big organizations like us, you know, global, local, I think you— and the bigger you are, you have to challenge yourself on a permanent basis. Okay, what do we need to do at the global level? I mean, do we need to continue to do that? It's very important, as I said, to keep the vision the ambition, have a strategic plan. But at the same time, you also need to adapt and adapt your organization so that the local— and empower the team at the local level so they can make the best decision.

Yeah. And even within geographic regions, I was surprised by sort of the breadth of your clients. You know, you have everything from local school systems that are trying to serve children healthily and affordably to you know, Salesforce and other corporate headquarters that are trying to draw people back to the office with gourmet meals. So how are you able to meet all of those very different needs across your client base?

Well, you know, as I said, you know, within, within a country or within a region, we are also organized by segment. We have, you know, the team in charge of the universities, we have the team in charge of schools, a team in charge of a corporation, a senior home. So I think that's, you know, by having that expertise within a business in a country, that's, you know, how we continue to adapt at the same time to the client, our client needs, because as you said in the beginning, we are in a B2B2C, so we have to take into account as well, you know, the dean campus or the client with the university, but also to take into account the consumers who are the students. And for every segment where we operate, you know, when we operate a stadium, same thing, or conference center, we have a client who manages that conference center, but then we have people attending show events. And so, and by being organized by segment, and we have been doing that for many, many years. You know, we started being organized like that. It's really helping us in addressing those very different needs.

Terrific. I do want to transition to technology because I know that you're interested in digital transformation as well. But you're a company with so many frontline human workers in so many parts of the world. So what does digital transformation mean for you at Sodexo, and what lessons are you learning?

So I think the first, we are in a people business, so digital is very, very important. But, and I think, as I said, we touch 100 million people every day. So, of course, you know, we have women and men taking care of other women and men, but now With digital, what's great is now we have the opportunity to have a direct contact with those millions of consumers that we touch every day. And by having that contact, you know, it helps us serve them better, understand, you know, if they are on a diet, you know, understand if— what do they like. And help us propose them what they want to understand, you know, give them multi-options through an application if they want to eat in that restaurant or if they want to go to that corner retail or they want to go outside, for example, when they are in a company. So I think the link to the consumer is really helping us and that the digital tool that we have today really help us addressing that, and it was not possible before. It's also helping us in terms of operation with AI. For example, some time now, because of the hybrid work, it's very difficult to evaluate how many people are going to be in a restaurant or how many people will operate lounges, for example, in airports. Now, With all the AI and, and the algorithm, you know, we can anticipate and, and we can, we can evaluate and anticipate much better what are going to be the needs of all those consumers.

Yeah, I imagine that's also helping in terms of supply chain management. How are you thinking, particularly in a post-pandemic world, about sort of of local supply systems versus global ones?

Well, I think, you know, as I said, you know, we had to adapt. We already have some commitment. And I said we have some commitment to small and medium business. And we have already, you know, we are already buying more than $2 billion from those businesses. And I think also global and local in terms of supply. Post-COVID, we have seen a lot of trends that we had anticipated that are accelerating. And in terms of local product, organic product, it is something, you know, that has been accelerating. So it's also a pushing us to buy more local, more organic, to work with suppliers that are more sustainable, you know, to support them and to support them to make transition when sometimes they need to do that. And I think it is very, something very important. And when we say that we want to be a market maker in sustainability, It will happen through an ecosystem, and our suppliers are going to be a very important pillar, you know, to, to move forward in that direction.

We have a lot of audience questions coming in, but I want to ask one question about Sodexo being a family business before I turn to them. So how did you approach your career and your leadership at Sodexo, given that your father was its founder? And do you think that being a family business is a strength, you know, in terms of in terms of recruitment and in terms of the purpose that you were talking about earlier?

So first, yeah, I think it's a strength, but I'll answer that after. So for me, you know, I did a business school in France, in the north of France. And then I decided when I was 23 to go to New York. And my father asked me to work for the company, but I said no. And when he said, why not? I said, well, you told me for during 20 years that you cannot mix the family tree and organization chart. So now I'm going to, you know, live my own life. So I started, I went to working in New York for a bank and I worked in the fashion business. I even took a lot of acting class. So, you know, I, I, I, I started my career away from the organization. Then in the '90s, I decided to join Sodexo. And then I had a career in Sodexo. And for, you know, as my father has said, you know, I had a boss and he said, okay, you can start working in the business. But if you do well, you know, you'll be promoted. If not, well, you won't stay. And I'm not going to take care of you. You'll have a boss like any other employee. So I think that's what how it worked for me. And, uh, but I started in 1994, I think, and well, here I am, I'm still there. And, uh, and I've become the chairwoman in 2016, and, uh, and 2 years ago also took the role of a CEO. So you asked me, uh, is the family business a strength? Yes, definitely. I think it is a strength, and I think for us, you know, um, As I said, we are a company that has been built on strong fundamentals. We've had values, we had a company mission since the first day. It has been a commitment. And as I said, you know, when I visit the country and I visit the team, I'm so impressed because I can feel that those values are a backbone, you know, are a part of the DNA or backbone of the organization. It's DNA. And also, I think what is very important when you're in a family business, at least in our family business, is that we are not in a short-term vision. You know, we are, uh, we, we have a— we are in a long-term vision. And, uh, and, uh, and, uh, and when you— we change, uh, at some point, you know, you change managers, but, but they are in that long-term vision. And I think for For our team, it is very, very important. And especially in a period where you need to transform and you need to transform at pace, I think it's quite reassuring to know that there are some things that are not going to change.

Yeah, absolutely. I'm glad we touched on that because we know that our HBR audience particularly outside the US, many of them run or work in family businesses. So we have a lot of audience questions coming in. Trung asks, how can small to medium-sized enterprises start their businesses and instead of competing, collaborate with big enterprises like Sodexo?

Well, I think, you know, it's a question of, as I said, you know, it's a question of willingness to go in that direction. And as a big organization, you know, we really feel that we have a lot to learn from a smaller business and we want to commit and to do that and go in that direction. And it's exactly what we are doing. So I think for small business, they should not be afraid to approach or to propose to work with a bigger organization.

Great. So we have a couple of questions on measurements, which you mentioned were very key to ensure that you're meeting your targets. Michael asks, how do you measure, track, and guarantee sustainability, whether that's ingredient origin, handling, etc., for your end products? And then Max is asking if you use or have plans to have blockchain tracking of food from farm to fork?

Well, I will answer the second question. In terms of blockchain, it's something we're exploring, but not yet, you know, we're not yet committed to that. And in terms of tracking, we have a tool, actually, it's a tool called SEA. And it's a tool that that is on our sites. And with these two, we are able to track exactly what you are talking about, you know, to track what products we're using. And as I said, you know, it's very important that when you take a commitment, you track it. So that's why, you know, we have a number of KPIs that we track And also, you know, the more you improve on a topic, the more, you know, you need to find new KPIs to continue to improve. It's not something that is static.

All right. So Landon is asking, he comes from the agriculture industry, and he says a major issue we faced was not in growing enough food, but getting perishable and nutritious food into food deserts and keeping it stored efficiently. So how are you thinking about solving this challenge? Do you think the challenge is distribution or production?

Well, first, you know, I think that we are not an industry, you know, we are not an industrial manufacturing products. We are We are cooks, you know, we are using products and we are— we have cooks on site who are transforming those products in meals. So I think it is very important because we cook, we adapt, we adapt to our consumers, to what they want, to what they like, and we build an experience. And so I think that's very important. And because it's a little different, you know, when you deliver a service than when you are in a manufacturing industry and you sell a product. You know, what we do every day is different. So for example, if we want to work on food waste, well, we have the possibility with the rest of the day before to make new recipes the following days to not to throw away the food. So I think it is We are in a service business, and we have cooks on site who prepare food every day. And that's why, you know, our model is a little different from, from the, the industry.

Yeah, I mean, at the same time, you're such a large player in the food industry. And in many areas of the world, we have obesity problems, issues with poor diets. So, you know, as someone who is playing this outsized role, how are you navigating the balance between affordability, maintaining margins, but then also improving the quality and the healthfulness of your offerings?

Yeah, I think it's, it's interesting because I think post-COVID people have been more and more aware of the importance of the health. So it is something now that, you know, as I said, we propose In certain instances, you know, we want to propose by 2030, 70% of vegetarian— in our menus, 70% of vegetarian options. And I think it is very interesting because, of course, you know, the balance between health and And, and, and the price is very important. But it's very interesting because when you propose something that's good for the health and that is tasty, people do choose it. So, so that's where, you know, we have a role. We have a role to play because we can give the option to people. And, and I think The taste is very important. And I don't think we are going to transform the food industry by forcing people. We are going to transform the food industry with a great taste and a great savor. And people wanted to, to enjoy their food, even if it's different. That's, that's what I believe.

Terrific. Well, Sophie, thank you so much. I wish we had more time, but we really, really appreciate you joining us, especially because I know it's after nighttime. So—

OK. Thank you.

That was Sophie Bellon, CEO and chair of Sodexo, the France-based food services company, in conversation with Alison Beard at HBR's Future of Business virtual conference in November 2023. We'll be back next Wednesday. With another handpicked conversation about business strategy from Harvard Business Review. If you found this episode helpful, share it with your friends and colleagues and follow our show on Apple Podcasts, Spotify, or wherever you get your podcasts. While you're there, be sure to leave us a review. And when you're ready for more podcasts, articles, case studies, books, and videos with the world's top business and management experts, find it all at hbr.org. This episode was produced by Anne Saini and me, Hannah Bates. Ian Fox is our editor. Special thanks to Dave DiIulio, Maureen Hoak, Erica Truxler, Ramsey Kebaz, Nicole Smith, Anne Bartholomew, and you, our listener. See you next week.