BEING THERE
What single built-in service suppliers do finest
BY Jayashantha Jayawardhana
Sodexo is a French meals companies and services administration firm headquartered within the Paris suburb of Issy-les-Moulineaux. In response to its built-in report for fiscal 12 months 2025, it boasted 24.1 billion euros in consolidated income, 426,464 staff and 27,000 consumer websites unfold throughout 43 international locations on the finish of August that 12 months.
Based by French businessman Pierre Bellon as a humble ship chandlery enterprise in Marseille in 1966, Sodexo went on to serve 80 million shoppers day by day and can be the second largest France primarily based non-public employer worldwide.
A former chairman and CEO of Sodexo Michel Landel wrote within the Harvard Enterprise Assessment (HBR) that Sodexo is a chief instance of good diversification.
Bellon established Sodexo in 1966 as he noticed a promising enterprise alternative in offering meals and catering companies to native corporations, after which to varsities, hospitals and different establishments.
A 12 months later, French house company Centre Nationwide d’Études Spatiales (CNES), certainly one of Sodexo’s shoppers, wished it to organise cleansing and upkeep for its base in Guyana. This supplied a possibility to broaden into different companies.
When companies outsource so many capabilities to totally different suppliers and repair suppliers, managing and coordinating the work of many suppliers of various high quality turns into a formidable problem.
So some enterprises desire to work with a single built-in service supplier equivalent to Sodexo, which may deal with the whole lot from the worker cafeteria, and the heating, air flow and air-con (HVAC) system, to landscaping, incentive programmes and worker advantages.
Diversification actually has its limits; and behind Sodexo’s world footprint and its varied choices, there’s been intensive strategic eager about whether or not or to not diversify. Broadly talking, it follows 4 primary guidelines in diversifying: be true to the enterprise mannequin; make individuals comfortable and productive; assist shoppers execute their methods; and depend on staff as a substitute of subcontractors.
On the floor, these are no-brainers; however in Sodexo’s case, they’re the strategic cornerstones of its good diversification technique.
Being true to the enterprise mannequin: as a rule, Sodexo by no means enters an space that’s inconsistent with its current enterprise mannequin. With only some exceptions, its companies might be supplied by a person or a staff, and doesn’t require capital funding in property or costly equipment.
As an example, when it operates an entity’s eating places, it doesn’t personal the tools and the price of the meals is priced into the contract. It doesn’t provide companies carried out by nurses, plane pilots or accountants.
So Sodexo doesn’t need to put money into mounted property. It additionally advantages from standardisation as Sodexo has established loads of finest practices, which might be readily transferred from one consumer to the subsequent.
Making individuals comfortable and productive: Sodexo delivers solely the companies that instantly enhance the lives of people it considers shoppers – though it’s the consumer organisations equivalent to corporations, authorities ministries, colleges, hospitals and so forth that pay the payments.
It’s by making the people in these organisations comfortable and productive that Sodexo creates worth for its shoppers.
When offering companies, Sodexo ensures that it contributes not less than a number of of six key metrics, which it tracks – viz. bodily surroundings, social interplay, wellbeing and wellness, social recognition, effectivity and private growth.
For instance, if the staff of certainly one of its consumer organisations take fewer sick days, it might be as a result of Sodexo is doing an incredible job managing the HVAC system.
Serving to shoppers execute their very own methods: the third rule adopted by Sodexo is that the service packages it places collectively should assist shoppers execute their very own methods.
When certainly one of its main shoppers in China wished to maneuver its analysis centre from the center of Beijing to its outskirts, it discovered it troublesome to influence individuals to remain on. So the consumer turned to Sodexo to attract up a office worth proposition that may enchantment to its employees.
By way of a brand new workplace format, a transportation plan that made commuting simpler and a concierge service to cut back the non-public inconvenience of working removed from the place these individuals lived, Sodexo noticed worker satisfaction rise to 98 p.c after the transfer – from 84 p.c earlier than. Likewise, employees turnover dropped to eight p.c (from 12%).
Counting on staff as a substitute of subcontractors: Sodexo believes that to ship companies that materially enhance individuals’s lives, it must ship these companies itself and make use of comfortable, competent individuals who wish to develop. The corporate is severe about motivating and growing its staff, and enhancing the standard of their lives.
