Ho Chi Minh, Vietnam, July 2016
Visiting Decathlon in India was very interesting, it was one of our favourite companies so far. This visit in Vietnam confirmed it: Decathlon has a very inspiring culture and model in Asia and around the world !
So before we get into details, we’d like to thank Alexandre Roux and Ha for their time and their warm welcome. They are very inspiring people, who worked in different departments in Decathlon (sales, production, happiness officer) and who constantly inquire into new management practices.
Once again, we arrived during a transition. Not just for Decatlhon Vietnam but for Decathlon worldwide. According to the philosophy of the CEO Michel Aballea (who we mentioned in our previous article as he’s the one who started Decatlhon in India), they want the decisions to be taken by the ones who are impacted by them. It’s called the principle of subsidiarity. Therefore, the foreign branches of Decathlon tend to be more and more autonomous. Not independent but autonomous.
Historically, Decatlhon is divided into 3 main activities: production / “passion brands” like Tribord, Quechua etc / and retail.
Now, they are trying to break down those barriers. Indeed, they would prefer a local production for local stores. For instance, Vietnam has been a big production center, for several years. It is still now, but as the 3 main activities are decentralised, the Vietnamese team was able to formulate the project to open stores here. Stores were also opened in Thailand, and will probably open in the Philippines and Cambodia in the future.
Another example, that this autonomy and decentralised structure enable, was to design products according to the local demand: in India, Decathlon is working on equipment used by adults to learn how to swim. They’re also working on cricket equipment, the national sport. In China and Vietnam, they now sell Jianzi, also referred as “shuttlecock” or “featherball”, with which people juggle in the streets, keeping it in the air with different parts of their body.
So Decathlon Vietnam is well organised, they work in teams which all have a leader and all manage a P&L (profit & loss). They do their recruitment, they don’t check hours etc.
Many companies tried to implement those practices, which are considered a bit extreme sometimes, and many failed. So why did it work at Decathlon?
Because of the strong values which they took the time to set up in everyone’s mind.
Such measures don’t work without a strong base, a strong culture, and it doesn’t work unless you make sure everyone understands why they are implemented.
So they took the time to write down the common values of the whole group, back in France “Sports together” “sports for all” “dare” “right to make mistakes” celebrate wins” “man is good”.
For example, they don’t check bills of expense any more. They took the time to explain the employees why. The latter are happy to be free and not the be watched. The result was actually that they now spend less than before.
Another example, which shows that they truly take time to educated collaborators on their new ways of managing, is the fact that they often organise workshops and conferences with the global inspirers. In India, they invited Vineet Nayar for a talk (the ex-CEO of HCL who wrote Employees First, Customers Second). In China, they welcomed Jean-François Zobrist the CEO of FAVI. In France, even Frederic Laloux came to inspire the employees and coach some directors!
By the way, for those who read F. Laloux’s book, Decathlon is considered as multicolour by the CEO, as each foreign branch is at a different stage of development and is free to evolve as it wishes. Concerning the Vietnamese branch, we’d say it is green.
It is also important for Decathlon to recruit people who match with the values. Therefore, they pay more attention to the personalities, the social skills, the teamwork abilities, than to the technical skills or the qualifications (to a certain extent of course).
They will ask questions about the candidates’ hobbies, their passions. They take time to explain them Decathlon’s values and culture. They also take time to do some sports or activities to see how they behave (football, ultimate frisbee).
Another very positive thing about Decathlon is the way they transform their management and make decisions. For instance, concerning transparency: they didn’t decide from one day to the other that everyone’s salary was going to be public, they wondered whether is was coherent with the Vietnamese culture. Concerning the pay rises: they organised several workshops to discuss the way it should be decided. The employees finally decided that it was better to let the leader choose, even though they are all encouraged to express themselves on this point.
Finally, two last interesting points: Decathlon’s employees can all invest their bonuses in the company, as shares, and are encouraged to do so.
What’s more, intrapreneurship is supported. It is not a strong value yet, but there are no barriers to intrapreneurship. An example of a recent project which was created by an employee was an internal platform, similar to AirBnb, used by all employees is their business travels.
FOCUS 1 : Relations with stakeholders
We were also impressed by the relationship that Decathlon has built with his supliers. First of all, for most of its products, Decathlon is the one that go look for the raw materials. The suppliers then only have to transform the raw materials into the product. That enables Décathlon to manage the cost, and the quality of their product. For instance, Décathlon is in contact with some farmers that possess cotton field. It is the best way to make sure that all quality and security conditions are respected by all of those that take part in the value chain. As Décathlon knows the cost of the raw materials, there are no more negotiations with the supplier, the price is fixed in function of the supplier’s need in terms of margin. Building such relationships have shown its advantages: Sometimes, the supplier knows a better way to manufacture the product, which will save time and resources for Decathlon… We could see it with the 2.95€ backpack, where neither the quality nor the work’s condition of the suppliers had to pay for such a low price.
FOCUS 2 : The project HOPE
It’s an example of a project that shows how much Decathlon wants their people to understand the culture and the DNA of the company and to broadcast and instil it.
So the project consists in welcoming a few employees from each country to Campus, in Villeuneuve d’Ascq, for 4 months. They spend those 4 months together, working on projects and exchanging about their culture, their ways of doing things, and the values of Decathlon.
So there are about 30 employees that go to France for each cession. It is obviously very costly and only few people from each country can take part in it.
Therefore, it was almost stopped, but the countries wanted it to continue. So they decided to subsidise this project altogether, and the Direction agreed, following this need that the team expressed.
How do each foreign branch decide who will go?
Well, in Vietnam, they wanted the selection to be as fair as possible. So they asked the employees to choose the way of selection. They came up with this method: among the candidates, 3 people are selected by a committee (composed of the local directors and the ones who have been previously selected), and the 3 others (a total of 6 Vietnamese take part in the project each time) are selected by the employees themselves: they vote.