Multi-local, the future of multinationals? – EconomyMorning

The health crisis has finished destabilizing the organizational models of very large companies, forced to reinvent themselves in order to survive. At the cost of a difficult reorganization, the French Danone has thus begun its transformation towards a “multi-local” company, betting on the new expectations of consumers.

How to reinvent yourself in the post-Covid world? If the pandemic is far from over and the various crises – economic, social, political, psychological and even moral – which result from it are, no doubt, only at their beginnings, the question is on the lips of all companies. A fortiori the largest of them, whose models have been and continue to be deeply challenged by the health crisis and its consequences. At a time when, for political or health reasons, borders are closing, and while consumers have never expressed such an ardent desire for meaning and locality in their purchasing acts, what future is emerging for consumers. multinationals, these behemoths without roots or ties, inherited from a race for gigantism whose meaning has long been lost?

Faber: “Danone is not a multinational, but a multi-local”

Without any guarantee of results, each company tailors its own answers to these quasi-existential questions. Some, undoubtedly more aware than others, by their field of activity, of the upheavals at work, have taken a step ahead in this strategic reflection. This is the case with Danone in France: the world leader in the food industry is thus posing as an actor, rather than a victim, of the changes underway. This is how the CEO of the French group, Emmanuel Faber, was able to recently affirm than ” Danone is not a multinational company, but a multi-local company “. A clever formula, undoubtedly “brainstormed” at length and sold by talented communicators; but behind the neologism, a (r) evolution which, at the cost of certain sacrifices, shapes the big business, food and territories of tomorrow.

The simple recipe: local productions, global research. The milk is collected within a radius of 50 kilometers around the production sites, the spring water is 99% sold in the countries where it is taken … but the R&D benefits all the subsidiaries : ” our brands, explains the boss of Danone, are, for the most part, local. But they are part of a family which has a global vision of things “. Emmanuel Faber, who says he is convinced to attend ” a tidal wave (or) rather a rising tide of societal and environmental issues, which affects all business leaders “, Observes that” models are changing a lot at the moment “. ” And with the crisis they will change even more “, In particular from the agricultural point of view:” when we practice a monoculture which degrades the soil and requires that we put more and more fertilizers, pesticides, at the end of the day we destroy the very value of what will make the agriculture of tomorrow », Warns the CEO.

Reconciling profits and sustainability, short circuits and stock market prices, local production and international leadership: for Danone, this in-depth geographic reorganization, on a multi-local model and no longer by branches of activity, is not without risk, and will not happen without breakage – nor without criticism. Going from a global organization by categories to a local organization by geographical areas – six areas reflected by as many new members of the executive council – will come at the cost of considerable efforts at simplification, efforts which in turn will result in unmistakable staff reductions. The group, which expects savings of one billion euros by 2023, should thus cut from 1,500 to 2,000 jobs in its global and local headquarters. Job cuts against which unions, and even politicians, will undoubtedly step up to the plate.

Virtuous circle

Despite the efforts that its implementation will require, this new model, if it sees the light of day at Danone as it does in other multinationals, could well be a driver of growth, while proving to be more responsible from a point of view. environmental – what consumers now expect and even demand. Fashion is no longer, in fact, for the huge industrial conglomerates producing on the other side of the world, and in social and ecological conditions that would be refused in the West, which can be produced next to points of sale: “The relocation of productions or the primacy of short circuits are perceived as obligatory commitments”, warns Frédéric Dabi, from the Ifop polling institute.

“Business leaders are more than ever expected to reinvest in the territories, a strategic level for the economic, social and environmental resolution of the crisis. The challenge, especially for large groups, is to know how to integrate fully into the territories, in order to create value for all local ecosystems. “, Confirms in a forum the founder of the consulting agency Societer, Mathilde Oliveau, who says she is convinced” that beyond the local, the future will be multi-local. (…) It is up to business leaders to show that (…) a way that reconciles local approaches and internationalization is possible. It is urgent to create a virtuous partnership circle to federate energies (…) to enter a new world of networks, open, resolutely collaborative “.

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