You’re the CEO of a thriving, 1,000-person company poised for rapid growth. It’s your job to keep it even keel, but the market is demanding more and you have a labour force to accommodate. Those 1,000 workers are soon to be 2,000, which will require a new facility. Someone has to maintain the corporate kitchen. Someone is going to have to landscape. Someone else will have to keep it clean. But you have three meetings this afternoon and no time to consider any of it. Take a deep breath. It’s time to call Sodexo.
Sodexo is known internationally as a food-services giant. The company serves 10 million customers in 80 countries and has annual global revenues of USD$21.9 billion. Sodexo Canada, incorporated in 1993, has played its part in this success story, shoring up the company’s market-leading position with shrewd leadership and a quality offering in its four client-facing markets: corporate services, remote sites, healthcare, and education.
“When we rebid for contracts, we saw that those contracts were now coming out bundled, with clients wanting to work with fewer service providers that could provide a very broad range of services over a broad and diverse geography,” explains Sodexo Canada president Dean Johnson. “They wanted to combine food services, custodial services, preventative maintenance, security, reception, meeting-room bookings, and lease administration in one RFP.”
The corporation was faced with a choice: continue to focus on the culinary offering, and risk losing clients to companies that could offer a breadth of services; or transform Sodexo into a full-service organization. The corporation chose the latter path and began the operational overhaul that such a profound shift in culture and direction required.
“We wanted to grow and develop with our clients, and with their expectations and demands on the market,” Johnson says, “so we began to develop our own multiservice offering.”
The speed of this development was also important, and between the beginning of 2008 and the end of 2009, Sodexo underwent its transformation. As an experienced facility management (FM) executive, Johnson was a key part of this process (he was previously president of Compass Group Canada, FM Services, and Trammell Crow Company Canada). He was brought in at the beginning of the planning phase as senior vice president in January 2008, and became president in November of the same year.
Advantage sat down with Dean Johnson to get his take on the leadership that transformed Sodexo from a food-service provider into a full-service solution provider
What has been your biggest challenge since joining Sodexo?
Changing the culture. I knew from my market experience a number of things, such as the type of services that clients find attractive and how to integrate and bundle those services. What I hadn’t known was how we go through a cultural shift with the people from a food-services company to an integrated, multiservice-solution company. It was a huge change.
What was the key to success?
Communication. Also key was building confidence in our employees that we would be able to execute the new services, that they could offer them to their clients. It was a leap of faith for them, and they needed to know that real and concrete things were happening to turn us into an integrated-services company. There’s a lot of pride among the people in this organization about what they’ve built here.
How do you respond to the idea that integrating several services means you are ignoring the food-services aspect of your business?
I hear that sometimes. Some may say we’re no longer focused on food, but that’s far from the truth. We can now maintain the culinary piece and invest in our food business more than ever. We risked losing it if we weren’t able to respond to the additional services that our clients are looking for in the marketplace. It’s our ability to leverage the synergies derived from providing the additional services that allow us the opportunity to augment and enhance our food-service offerings.
What’s your next big goal?
We want people to think of Sodexo first when they want to partner with an integrated-services company.
“One of the assets that I bring is my background and experience, which is in FM, real estate, project management, and development,” Johnson says. “That’s where I’ve spent my entire career, and it’s a good background for the type of transformation that we’re going through—certainly from a credibility standpoint.”
First for Sodexo was the matter of updating the skill set of its 12,000-strong workforce. A training program was launched with IFMA—an FM-industry association. The training covered nine core competencies; however, it didn’t provide Sodexo with guidelines for managing the dramatic culture shift that the corporation and its employees were going through.
“That’s been one of my biggest challenges,” Johnson says. “You can imagine: here is a great company with fantastic people rooted in the food business—that’s how they’ve built their career paths, that’s their level of comfort with their clients—and now I’m saying, ‘We’re going to do a whole bunch of different things now.’”
Johnson and his team did consider the possibility of dividing the food business from the new additions and making them separate, with new people and infrastructure. However, they decided that such a move would have a negative impact on those employees sequestered off in the culinary arm, confuse clients and the market, and mean that Sodexo was neglecting to capitalize on the management already in the field as well as the relationships it had built up over time.
“I think the decision not to divide was the right decision, but harder in terms of implementation,” Johnson says. “We had to focus on communication within the organization so that our employees wouldn’t become anxious about what was required in the new role. It’s tough—with many of our outsourced staff in groups of 10–400 on 750 client sites throughout the country—to make them feel engaged and like a part of what is going on.”
The focus on internal communications continued throughout the entire two-year process, and still continues today, ensuring operational transparency for the company’s employees. The final piece of the conversion was marked with the hiring of experts in the various fields that the company was moving into. Johnson explains that this new talent was an essential part of the process, ensuring that the company had the depth and breadth in capability to back up its new service offering.
Today, Sodexo’s offering includes FM services divided into two areas: soft services (reception, switchboard, custodial) and technical (security, maintenance, plant engineering). These include the provision of real-estate solutions for its clients, project-management services, and clinical-technology management, as well as infrastructure development and operation-and-maintenance services for the P3 market, especially in healthcare.
Uptake of the new offerings has been good. In 2005, 90 percent of the company’s revenue was coming from the food business. That’s now down to 75 percent, and projected to be at 60 percent by 2015 (with the remainder coming from new services). The swing is marked by an upsurge in revenues for Sodexo’s nonfood services. Major accounts for the company have reacted positively by drawing on the newly diverse offering, including such notable clients as Campbell’s, Manitoba Hydro, York Central Hospital, Hydro Québec, Suncor, and the Ron Joyce Centre in Burlington, Ontario.
“In 2008, we couldn’t say we had the ability to provide all of these services,” Johnson says. “Today, we can confidently say that we have the level of expertise, the platform, and the processes in place to show that we can perform these services effectively. Marketing is important: some understand we can do this, while others still think we’re a food company. The market hasn’t fully realized what we can offer in terms of a fully integrated, comprehensive-service solution. But we’re getting there.”