Become a Business Disruptor with CEO of Broad Horizon, Jean-Yves Charlier #26

After all, all art is experience.

Hello and welcome to The Company Doctor. This episode, we cover the art of becoming a business disruptor, why upsetting the apple cart can be crucial to progress, and why today's market is in need of regular disruption. Discussing the topic with Gary, we're very fortunate to have Jean-Yves Charlier, CEO of Broad Horizon, veteran of the tech and telecoms world, and serial pioneer and business disruptor in his own right. Jonyve, Gary, over to you.

So hi, Jonyve, thank you so much for joining this episode about being a business disruptor.

Welcome. Hey, Gary, thank you for having me today.

Well, listen, it's great to have you. I think the best place to start is a quick intro. I mean, I know you really well, but a quick intro to you and probably your mission at Broad Horizon at a high level would be really great.

So Broad Horizon, we're basically consolidating the Microsoft Cloud Marketplace in Northern Europe. This is a company that is very, very specialized in Microsoft Cloud infrastructure, in business applications, all the way to data science. We today have about 1,000+ consultants and engineers. The business is growing at over 50% per annum. We do about 4 to 6 transactions per annum to consolidate the marketplace, and we're building one of the leading, if not the leading, Microsoft Cloud integrators in Northern Europe. So very exciting growth prospects for this business, both organically and obviously through our buy and build strategy.

That's amazing. I know there's a number of companies under the umbrella, so we're going to dig in a little bit later. I think, you know, because the topic is about being a business disruptor. My first question really is, what's a business disruptor and how do you know if you are one?

I think a business disruptor starts by doing things differently and thinking differently, um, fundamentally from mainstream. I think it's really, Gary, where it all starts, and finding a strategy that can fundamentally add significant shareholder value. And that can be in a growth dimension, but it can be also in a consolidation transformation dimension. So I see it not just as a growth story, but also as a transformation story, depending on, you know, the opportunities, you know, for, for a business.

Yeah, brilliant. And those are some of the things I wanted to get to understand. I mean, you've got an amazing career. I followed your career. You're a veteran, but it makes you sound like you're a young veteran in technology.

Thank you.

Thank you. Bless you. So my question is really, if you look through your career, because you've had such an interesting career, and think about the things you've been involved in, you know, you've done a lot of business turnarounds in the, in the past. What was the turning point for you where you realized that the key to change was a step change? Because I know before it was more incremental, but now you're talking about, you know, more of a step change. What was the key?

Well, I think, look, I mean, you know, it goes back— how do you create shareholder value ultimately? And how do you, in transformation, uh, how do you get businesses back into growth mode? I think those are fundamentally key questions. And when you look at what I've done, for example, in the telecoms industry, and given that these are businesses that are operating in highly regulated marketplaces and frameworks, you know, one of the strategies that I've often deployed is one of consolidation as a means of transformation. And, you know, in telecoms very well that the number one player makes a lot more money generally than the number two player, than the number three player. And if you're number four, number five in the mobile market,, it's really difficult unless, you know, you've got a digital new entrant type of strategy, very difficult to move up the ranks organically. And so in the telecom spaces, you've seen, you know, some of the real value creation stories are all around, you know, the consolidation plays and how you make those happen. And consolidation is complex in the telecoms marketplace because Many telecom companies are owned by entrepreneurs that might not want to dispose of their assets. And if you've crossed that hurdle, then you've got, you know, fundamentally the regulatory hurdle to cross. So a good example, I think, of, you know, value creation is ultimately when I was the CEO of VEON, we had a portfolio that was a mixed portfolio, some number one positions, great. And those positions you want to consolidate or continue with what you're doing really well. But some part of the portfolio was in countries where we were number 3 or number 4 at the time. And Italy was a good example. We were the number 3 player with Wind. Hutchison was the number 4 player with Tre. And the only way of value creation in that marketplace, both for Vian at the time and Hutchison, was to consolidate the marketplace and create the number 1 mobile operator. And it's something that, you know, I was able to pull off. In companies that, you know, are both owned by entrepreneurs. So we created a 50/50 joint venture, something quite innovative, and we made it work. And we got over the regulatory process in Brussels, which was complex because at the time it was dealing with Vestager, and she had basically refused any form of telecoms consolidation back in 2015, '16, '17 in most of the major European marketplaces. That created substantial shareholder value. Now, That's one part of the equation. Then you've got to do the integration, obviously, and pull it off, which is, you know, equally as complex. But, you know, that's a step change. I think if you're just thinking in those markets where you might be number 3 or number 4, you know, the step change, you're not going to do it organically. So you got to think out of the box in a marketplace where everyone said at the time consolidation was never going to happen. And, you know, I found a way to pull it off.

Well, it sounds like it's not for the faint-hearted, that's for sure. You know, I've spoken to you about this in the past. The question is, is it haircut or surgery? It sounds like it's more surgery than a haircut in what you're saying.

Yeah, I think when you're in transformation models, things you do incrementally never fundamentally create substantial shareholder value over time. Right. So I think you've got to think out of the box and you've got to make big, bold moves. But in many ways, that also applies, Gary, to, you know, markets that are in growth mode. I don't think anybody would think that the success story today at Tesla is anything else but a big bold move in an industry that was doing things incrementally from an electrical point of view. And Musk comes along and does things very differently in a big bold move and creates substantial value.

And yeah, but you know, it sounds exciting to be in that space. So when you're doing consolidation, I presume there's, as you say, the integration part it revolves around people. How do you, you know, as a disruptor, as someone who's doing surgery, how do you get people on board, or does it not matter?

I think it matters completely. Look, in the case of M&A, what I've learned, and when you're doing big consolidation plays, Gary, as CEO, you've got to do it yourself, right? And, you know, this is not about investment bankers coming into a room and, you know, presenting deal structures and things like that. You've got to be at the forefront of the transaction and dealing with the CEO and shareholders on the other side to pull off these type of things. I had exactly the same example in the Pakistani marketplace, and the asset was owned by one of the Emirates royal members of the family. It took a lot of visits, personal visits to Abu Dhabi to convince him of the value of, you know, a merger in the Pakistan marketplace to create the number one player. But that created substantial value at the end of the day. But it wasn't done by a bunch of investment bankers. I was the one going out there. Sure. And meeting regularly with him because ultimately at the end of the day, you know, certainly what I've learned, you've got to establish trust, you've got to have a vision and a game plan, and that's done face to face.

And how do you know when you think about inside the organization? So I get that, you know, that's your more your own sponsor side. How do you get people to be on board to be part of that journey and not slow you down?

I think you've got to be able to, you know, one, create the supporting teams on the transaction side, but you've got to go and sell the vision of this whole thing. You know, I sold SFR when I was the CEO and chairman of SFR in France to Altice and Patrick Drahi. It was a complex merger at the time in France, putting together the number 2 mobile operator with the number 1 cable operator. We were sellers at Vivendi at the time of that asset. And, you know, as soon as the transaction was announced, I went on the road. I went to every SFR office across France in a 2-week marathon to meet with the 10,000 or so employees in auditoriums to tell them of the industrial logic and to answer their various questions. That allowed me to get that transaction through with the unions. In less than 9 months, when it generally takes in France 12 to 18 months to get a transaction through and get an opinion from the unions. So look, I think you've got to lead from the front when you're doing these type of things, and you've got to do things again differently. You can very well sit back, you know, and send an email to your teams announcing that, you know, you're conducting a merger or consolidation play and hope that your middle management is going to relay the messages appropriately. You could do that in one big Zoom, I suppose, or you can do it differently. Took 2 weeks out of my time, but ultimately it was worthwhile.

But can you, can you think of a situation, Jean-Yves? I mean, you've got a great playbook and I know you've done it multiple times, but can you think of an example where you did have these clear aspirations, but it was hard to get the organization to transform?

Yeah, it's always— look, on the consolidation side, it's easier because you're doing it with a small team of people. Yeah. When you're fundamentally changing an organization also in transformation, it takes time. And, you know, there was a great study done years back at Wharton that basically determined that it takes 1 year by management layer to fundamentally get people to understand strategy. And at the time, the study at Wharton had determined that companies like Ford would never be successful in major business transformation because with 12 layers of management— and this was in the '80s or '90s versus the Japanese— the Americans were were losing out because the Japanese had 6 layers of management. Ford had 12 layers of management. So did General Motors. So look, I think that you've got to simplify the organization. You've got to rally the teams around a few simple messages, but that are very, very meaningful. And you've got to be ruthless about execution. And it starts from the top. You can't delegate transformation. Just an anecdote. Back at SFR at the time was a highly competitive marketplace, maybe the most competitive in Europe. Something that profoundly changed the organization that I did as we were losing market share there against the new entrant, Iliad, in mobile at the time. And SFR had probably some of the best retail footprint in France, but it wasn't performing well. I went and worked in stores for 6 months every Saturday. I didn't visit the stores, Gary. I went to work in the stores. This was all over the press. And the reason I did that is I needed to understand what was working, what was not working. I needed to hear it from customers, from our employees. You know, I had a hotline back to group, a couple of people supporting me, you know, on what needed to change fundamentally in your organization. We had an SMT every Monday morning where I would relay what I had seen, what was working, what was not working in these stores. That made a big impression in your organization. So I think you've got to find those moments in a big transformation. That you can imprint on the company for real change.

I really like the attention to detail. I think it's great. It's interesting, actually. I was reading a great book by Mark McCormack, which is What You Don't Learn at Harvard Business School. And I know that you went to Wharton Business School to get an MBA. My question to you is, what did you learn at Wharton Business School that you've applied in, in this work? Because you're— you've got a playbook. You clearly got a playbook for these things. What did you learn there that you kind of put into practice in real life after doing that?

Not a lot. Not a lot. So what do you learn in business school? I think I learned a couple of things, though. You know, one, Wharton being sort of, you know, the school of finance. Yeah, I learned, you know, everything about finance inside out. And I think that's been helpful in my career. I think secondly, look, you know, you learn how to dissect problems and to find solutions. So the analytical capabilities are really good. And I think thirdly, you learn how to work because, you know, 2 years is not for the faint-hearted. It's not like a 9-to-5 sort of average college degree. These are the 3 things. The rest you've got to learn, you know, from mistakes and your successes. And you've got to learn it with, you know, mentors that you learn and you meet along the way. And you've got to try things. You know, I think fundamentally at the end of the day, Success is about making more good calls than bad calls, but you're ultimately going to make a number of bad calls and learn from those.

Yeah, no, absolutely. I mean, it's interesting, uh, being a disruptor is not the end of the story really, is it? I mean, some disruptors have been disrupted. A good example for me would be someone like an Uber being disrupted, certainly in London at the moment. What do you think needs to be done? What's the secret to avoiding that complacency because you think you've made it because you've, you've disrupted? How do you stop it being yesterday's news?

It's really, I think, a really key question of how do you keep on top of your game. And, you know, you just look at the Fortune 500 in the United States, and I don't know what exactly the stats is today, but, you know, it's like 20 or 30, uh, percent of the companies over a 10 to 20 year period drop out of the Fortune 500 and new companies, uh, you know, come in, right? And so fundamentally, I think we're near where disruption is absolutely key and it's accelerated, it's globalized versus what it was perhaps 20, 30, or 40 years ago. I think a big thing is, you know, battling against complacency and bureaucracy, management layers in the organization. And I think, you know, companies that can really battle against bureaucracy are those companies that are going to fundamentally succeed. So I think you've got to keep the thinking fresh. You've got to battle and think differently. I mean, this is what I do every day at Broad Horizon. What I think, you know, of our, you know, what I say to our 1,000 consultants, engineers, I tell them, break the rules every day.

Yeah.

Right.

And but just not with you, right?

Oh, with me even, right, Gary? They've got to break the rules. And we're very, very focused on the people agenda. And I'll come back to that because I think that is absolutely crucial in what keeps companies great. These are companies that are super, super focused on culture. But when I talk about breaking rules, you know, one of our businesses, a bunch of, you know, really top-end techies in the hosting space, I don't even know if any one of them owns a shirt. They're all in hoodies, t-shirts, shorts, um, etc. They've got a full-functioning bar in the office with alcohol, with disco lights, with flat screens. You'd never have that in a corporate setting. You know, that's something that we allow our people to do because if that's, you know, one of the perks that they want to have, and that's a way for them to wind down at the end of a busy day, that's what they should do. And somebody was asking me last week, I was in a finance summit of our organization, I was asking me, you know, why isn't that bar on the top floor of the building versus the ground floor of the building? And I said to them, why are you asking me the question? If you think it should be on the top floor, go and put it on top floor. Don't ask me, right? Now, I think you've got to keep an organization super fresh, super innovative, breaking rules at all time. And if you need layers and layers of signatures to do everything— I remember in the mobile business I talked about in Pakistan, they had 7 or 8 signatures for an expense form. It was all done on paper, and the expense form was on average $5. And this was, you know, this was over a billion-dollar business. And you're trying to create the number one player in the marketplace, and you've got 5, 6, 7 people signing off, you know, a $5 expense bill. Well, we changed that. We said, you know, one person signs it off. That's all. It's all electronic, and it's done in 90 days. So I think that's what you've got to keep in an organization. I think the other thing, you know, is all about down to the people. In the culture that you're promoting. Right. And so, for example, at Broad Horizon, I would say we spend 25% of our time as a management team on the people agenda. Right. And on attracting the best talent and retaining the best talent. Now, you could say you're doing it because you're in this super cloud space and it's all important. But I think that's what keeps companies innovative. And, you know, we've just won, for example, Best Place to Work in Denmark. Across the whole IT sector. We've just won in Denmark the best place to work for women in all sectors. So that's Gary Gamp, that's 25% of my time right today in a growth model.

To probably people listening, it sounds like a lot.

It is a lot. We don't do surveys of our employees every 3 months, every 6 months. We do surveys of our employees every week.

Wow.

Okay. To really understand what's working, what's not working in the organization., and we go and fix the things that they tell us that, you know, need attention across the organization. All of that can be done today. It's digital, it's on apps, it's a couple of clicks, etc. But that's the importance that we attach to creating a very, very vibrant employee agenda.

So I really like it. Can I, can I just interrupt you a little bit? Just, I'd just like to go back a bit because there's a lot of learning in how you got there, uh, because a lot of, I guess, organizations that you've taken over have got lots of silos and they're not working the way you want them to work. How do you move from one point to the other where you've got those silos and you, you're being more agile? How do you do it?

I think a big thing ultimately is empowering management once again, right? And I've come to believing ultimately that at the end of the day, you need super slim headquarters and you need to empower business leaders ultimately, right? And so I think that's very, very important. Um, It's also very, very important to find the right model that suits your sector. So for example, at Broad Horizon, our CEOs, and we operate a very, very decentralized operating model in the business. So the business CEOs, you know, basically have all remit to run their businesses. We've determined that there are only a few value levers that we are going to do collectively because that creates ultimately more shareholder value. But that's it. And every month we go back and we question whether or not we're adding layers of bureaucracy to complex decision-making and whether those value levers are still very, very appropriate. So, you know, I think that's, that's something to think through. Now, that might not always be applicable, but it's in my playbook today to have hyper-decentralized operating models. Now, the other dimension in all of this, and it certainly applies to what I'm doing today at Broad Horizon. We acquire businesses in this buy and build strategy. And part of our playbook, for example, is we will never buy a business where the CEO and the entrepreneur, the founder, wants to leave. We only want to basically accelerate these businesses. And it's a milestone transaction for these entrepreneurs. And our proposition is pretty simple, is how do we help them take the business to the next level? But in the transactions that we do, we ask these entrepreneurs to roll over 40% of their proceeds in the group. So they are super aligned as CEOs of their businesses with my main financial shareholders from that perspective. So, you know, I think the way that you're creating long-term incentives and alignment with your shareholders and how you retain, you know, incredible talent for that talent not to walk is, you know, things that businesses should be be asking much more of themselves rather than, you know, the traditional way of, of doing things.

Which is normally the opposite, right? I mean, normally, uh, you don't want to get involved in an earnout and the founders disappear. So it's the opposite.

We do exactly the opposite, right? And in fact, I, I, I, you know, when you think about it, I've banned the term integration. We don't integrate businesses, we accelerate businesses. And that's a completely different mindset. I've banned completely. We onboard and we accelerate. And that model is working really well for us. So, you know, I think going back to being a disruptor, you've got to think differently in these things and create a playbook that works for your segments, your business, your industry.

It's certainly coming out. And Johnny, from a kind of a too much and too little point of view, so I get the being a disruptor means doing things differently, but how do you make sure you're not doing too little process versus too much? How do you get it right?

It's a difficult question to answer, Gary. How do you get it right? Look, I think at the end of the day, you know, even if you're in high-growth models like we are, I spend a lot of my time on the finance function and consistent systems across the organization because you don't grow a business 50% per annum with loose processes, loose controls, etc. So our controls from a financial point of view are super rigorous today. We've in fact already, for the size of company we are, have appointed one of the larger auditor firms. Worldwide, because that gives us again the rigor, the structure. So there are things in my mind where you've got to be different, you've got to be anti-corporate, anti-bureaucratic. But there are the things where you've got to be ruthless about the foundations that matter when you're scaling up so fast a business.

Great advice. So I've got— just to switch gears a little bit, but connected to what you've just said, you know, looking back in your career, and you've had an amazing career, and if you thread together all your learnings that you've had and you had the chance to do it again, what would you do differently that would make the biggest difference to you being a disruptor?

I, I wouldn't do things differently, but there are learnings. And for me, I've done big transformations and I've done, you know, high-growth businesses. I think at the end of the day, you've got to find the type of business in the segment in which you are going to enjoy yourself more than anything else, right? And I've come to learn that, you know, having done both, I just like high growth much more than transformation, right? And that's what I'm doing today. I've come to learn that, you know, medium-sized organizations are much more fun. I've come to learn that you want to work, at least in my case, for businesses that have real purpose. That's why, you know, I decided to step down from all my roles in the telecom industry because you know, fundamentally you're selling a dumb pipe at the end of the day, or you're marketing a dumb pipe. Here we're, you know, fundamentally helping companies on their digital journeys. Serves a much greater purpose, right? And so I think, you know, there's no regrets to have in careers or to think what would I have done differently. I think it's much more about finding the path that you're going to enjoy most and you can excel at.

Yeah, and you've certainly done that. I've got one more question for you, and then we want to dip into your music taste. So here's my final question, and it's kind of similar to what I've asked you but with a different take. Our audience are business to business are listening to this. If you could give 3 takeaways for being a business disruptor, and there were just 3 things, what would they be? 3 tips for being a business disruptor.

Look, I think the first thing Think big, you know, think different. I think that's the first one, particularly in the B2B space. You know, have a super simple business model with a few key things that you're really, really going to do well. I've seen so many businesses in the B2B space try to do so many things and fail so miserably. What I tell our businesses today, it comes down to focus, focus, focus. Do 2, 3 things and do it super well for your customers. You know, I was having, it was interesting, lunch the other day with the CIO of LEGO, right? And, you know, LEGO's got phenomenal business model and, you know, they've got a phenomenal organization. He could probably recruit any IT people he wants around the world, right? And our business serves LEGO in a very, very focused manner. And he says, you know, during lunch he said to me, look, you know, the reason we employ you is You've got skills I probably can't get or keep, and you're so super focused. And you know what? The people that come into my office with this positioning, with their slides that we can provide you with end-to-end services, he basically says, you know, I'll interrupt the meeting, I'll open the door, and I'll kick them out. You know, so do what you do best, do a few things. And then in the B2B space, I think, you know, we all talk about customers and products. I think we just don't talk enough about the people that provide the service. You know, go back to basics, build great culture, great organizations. That's why people buy services in the B2B space. And if you've got the best culture and the best people, you're going to do pretty well with focus.

Fantastic, Johnny. What a great advice, and very inspirational, if I may say. Great. So one last question for you, it's about your music taste, and then we're done for this session. We've got a playlist going for all of our guests on music that either inspires you or something that's on your mind. I know you've got an interesting one coming up. What is your one or two tracks that we're going to add to the playlist?

So I'm not going to give you my musical taste, Gary, at this point in time. I think that the events that we're witnessing around the world right now are very grave for our democracies. So I think if there's one thing that I would recommend your listeners to listen to right now is the Ukrainian national anthem. Because I think that is absolutely apropos. And I think in the West, if our democracies are to survive, we cannot allow what is happening in Ukraine right now. I'm very, very passionate about it. Our businesses are helping Ukrainian families as we speak. And the first line of the Ukrainian national anthem reads, the glory and freedom of Ukraine has not yet perished. And I think we should all reflect on that. And I don't know if you're going to add the Ukrainian national anthem to the playlist because it's maybe not something that you want to hear, you know, 5 times during your run, but I would encourage to simply read the national anthem and to understand a little bit more what that country is going through and how we can support Ukrainians in need today.

That's amazing, Jean-Yves, thank you so much for that. And I think we will add it. I think it's a great idea, and I really appreciate your words. We all feel the same. So thank you so much for joining us on this episode. We've had an amazing opportunity to hear from the master and seeing you in action. Your passion comes across amazingly well. So thanks so much, Yaniv, and look forward to seeing you again soon.

Thank you, Gary. It's been a pleasure debating these points with you.

Cheers.

If you enjoyed this episode of The Company Doctor, why not head over to the companydoctor.com to explore all our previous episodes and bonus content, and to receive notifications alerting you to our all-important next episodes. A huge thanks once again to Jean-Yves for joining us, and thanks to you all for listening.