How a French building giant tackled fragmentation

**Peter Thal Larsen** (0:03)
Over the past decade or so, the world has received an urgent reminder of the physical limits of prosperity. All the promise of online activity and artificial intelligence is very exciting, but none of this works without some very basic inputs, physical commodities, building materials, energy, water, semiconductors, and so on. And as we have learned once again in the past few months, the system rests on an intricate network of supply chains that can be very easily disrupted. So today on The Big View, we're going to talk about the literal building blocks of our world, the construction materials that create the environment we inhabit. So what we do at Reuters Breakingviews, we tap our best sources around the world for fresh insights into the biggest questions in business, finance, and economics. I'm your host, Peter Thal Larsen.
I'm thrilled today to be joined by Benoît Bazin. Benoît is the chairman and CEO of Compagnie Saint-Gobain, a French multinational which is a worldwide leader in materials and services used in housing, non-residential construction and infrastructure. The company has more than 160,000 employees in 80 countries and a current stock market value of just over $40 billion.
It traces its origins back to 1665 during the reign of Louis XIV, the Sun King's minister, Jean-Baptiste Colbert, wanted to break the Venetian grip on the supply of mirrored glass. So he set up the company that became Saint-Gobain. So you could say Saint-Gobain owes its origins to good old fashioned industrial policy.
Benoit joined Saint-Gobain in 1999 and has held a number of roles, including chief financial officer, chief operating officer. He's been CEO since July, 2021, adding the chairman title three years later. And he joins me in the studio in London. Benoit Bazin, welcome to The Big View.

**Benoît Bazin** (2:00)
Nice to be here, Peter.

**Peter Thal Larsen** (2:02)
So I talk to a lot of CEOs, and I think it's fair to say that the last five years or so, which is almost exactly the period in which, since you became CEO of Saint-Gobain, has been incredibly turbulent. I mean, you took over just after COVID.
Then we had all these supply chain issues. We've had trade wars. We had Russia invading Ukraine. Inflation, interest rates going up. And then most recently, obviously, Iran. I just wonder, how do you manage through this? And has it made you change the way you think about the company, about how the company is run?

**Benoît Bazin** (2:44)
I think so. I would say, as a background, geopolitics has always been there. But it was more long trends, like going into Eastern Europe after the fall of the Berlin Wall, going into Asia. This time was much more brutal. So geopolitics was higher on the agenda. And second, and it's more maybe a culture of the organization, manage the uncertainty. So try to help all the organization to be agile.
Try to not run fixed budget, but multiple scenarios. And say to your teams, it's okay if the real life is a mix of Scenario B and C.
You cannot predict everything, but you have to be agile. So I think a lot of work has been done on the shape of the organization. And we turn, for instance, the organization of Saint-Gobain by country with native CEOs of their country. So much more local and close to the customers and intimacy to the teams versus worldwide product line. So be close to the customers, be agile. And again, accept that the only certainty you have to some extent is uncertainty will happen. So both strategic thinking and also culture, organization thinking and how to reshape the way you manage and you ask your people to manage.

**Peter Thal Larsen** (4:12)
I've always seen this company with hundreds of years of history. And I guess you could argue sort of was originated from an act of industrial policy, right?
By the Minister Colbert to try and make glass in France rather than import it from Venice.

**Benoît Bazin** (4:32)
Absolutely, and make the first iconic realization was the Hall of Mirror in the Palace of Versailles. To some extent, it was a bit of geopolitics at that time. It was a bit avoiding the trade barrier between Italy and France on mirrors. But it's interesting that you relate to the history of Sangaba, because I think the reason why we have been around for 361 years this year, it's because Sangaba has been able to reinvent itself regularly. And for instance, if I take the last five years, when we turn 90 degrees, the organization from worldwide product line, managed at the top by French people, to country organization with Mr. N. Guyen, our Vietnamese CEO in Vietnam, Marco Corleis in Mexico. It makes a lot of sense.