Jean-Pascal Tricoire: outsider leaving Schneider as a global force
Some board members protested when Jean-Pascal Tricoire was promoted to CEO of French industrial giant Schneider Electric.
Raised in the western French village of Beaupréau, the engineer, who had spent most of his tailoring career in overseas posts from China to South Africa, was an outsider in the cozy French business world.
Without the trappings of elite Parisian schools, political connections and ministerial consultant jobs to his name, his promotion to head of the automation and software group in 2006 was met with disapproval.
This week, after nearly 20 years at the helm, the 59-year-old, who is sometimes dubbed “Napoleon running Schneider” among investors because of his reputation for wanting to control every decision, announced that after a term which has outlasted many, rival CEOs resign.
Schneider has grown into one of France’s most valuable listed companies, having grown in value to nearly €90 billion over the past two decades.
His appointment was largely thanks to Henri Lachmann, Schneider’s former boss, who pulled Tricoire out of the gloom after meeting with him during a tour of the company in Beijing.
“One board member said, ‘We don’t know him, he’s not one of us,'” Lachmann said. “But someone else, with an even more brilliant qualification, said, ‘That’s his forte.'”
Tricoire will hand over part of his operational responsibilities to Peter Herweck, former head of industrial automation at Schneider, who will become chief executive in May while retaining the chairmanship.
Since his appointment in 2006, after three years as Executive Vice President, the group has expanded exponentially overseas, broadening its range of complex industrial systems through acquisitions in the US, China and India, and generating three quarters of its sales outside Western Europe.
Founded nearly 190 years ago by two brothers who brought with them a French iron foundry, it has now also quietly built a specialization in technologies, arming it to make the most of a sudden megatrend: energy efficiency.
Systems used by businesses to automate their lighting usage and save energy have never been more sought after, especially after an energy supply crisis in Europe following the Russian invasion of Ukraine.
In doing so, Tricoire has maintained its status as something of an “alien” among French CEOs, as one banker put it. For some, while praising the group’s performance, he pushed France’s postponement too far.
Tricoire is fluent in Mandarin, having spent time in China early in his tailoring career. In 2011 he moved to Hong Kong and has remained there ever since – an unusual move that caused a stir in the Parisian establishment. The company’s board of directors is now majority non-French and executives are spread around the world.
His Asia expertise has helped Schneider over the years to establish and quickly adjust its presence in China, moving away from the construction sector when the housing market began to overheat, said Jefferies analyst Simon Toennessen.
“[Tricoire] took risks in Asia that many conventional people would not have taken,” said Henri de Castries, former head of French insurer Axa, who has known Tricoire since he was the head. “Relations with China may be more complicated and strained now, but this kind of deep knowledge of an important market is very important.”
But that’s an aspect of Tricoire’s legacy, given that China accounts for about 13 percent of Schneider’s revenue, behind the US, that may be becoming more controversial.
Some Western companies are reconsidering their ties with China after Russia’s war in Ukraine raised fears of more geopolitical unrest, while trade disputes between Washington and Beijing brew.
In an interview, Tricoire defended a commitment now offset by investments elsewhere in Asia and a model based on a local, China-led company that caters to the very specific technology needs of the market.
“We have to recognize that the world is still very connected and especially with China,” Tricoire said.
Under Tricoire’s tenure, Schneider became known for management practices that are widely followed today, with an emphasis on “the planet and society” that it has sought to measure in its performance, including by linking bonuses to emissions targets.
Tricoire said growing up on farms in France’s Vendée region gave him an appreciation for nature and the fragility of ecosystems – as did his favorite hobby, kayaking down rapids. After leaving France for the first time at 23, Tricoire’s stint in emerging markets crystallized his focus on the role the world of energy needed to play, he added.
“I realized that energy is the key to a decent life. . . When there were constant power cuts in China, there were days when you couldn’t do much,” he said. “I also realized that I live in this megalopolis [very large cities]that our model of energy consumption was unsustainable as pollution was felt.”
Tricoire rid Schneider of companies that didn’t fit his energy focus and invested in areas such as software, including the recent £10.6 billion acquisition of British company Aveva, which makes data centers or factories more efficient.
“He’s pragmatic – he doesn’t want to be an evangelist or beat up people [over the environment]said Cécile Cabanis, deputy managing director of French alternative wealth manager Tikehau Capital and a board member of Schneider. “[Schneider] progressed silently, which is quite rare.”
But one challenge will be to give his successor room to lead as he retains the presidency until 2025 at the latest – a formula not uncommon in France but less common by governance standards in Britain, for example.
Though quiet and affable, colleagues and analysts said Tricoire was also known for staying on top of every decision made across the company and making sure his teams knew their approach.
“When he became boss, he was boss through and through – he has authority and doesn’t particularly like confrontation,” said Lachmann.
“The value he has created is just extraordinary,” said a person in Paris business circles who knows Tricoire. “[But] I just hope he really steps down, his tenure as chairman has been very long.”
https://www.ft.com/content/1336ccec-3b98-4dd4-a6e5-60dbaf6130de Jean-Pascal Tricoire: outsider leaving Schneider as a global force