Reborn through corporate culture - Interview with Nathalie Balla

At the age of 25, she turned around a Swiss subsidiary of the "Quelle" group within 18 months. A few years later, she took over the helm of La Redoute, the flagship of the mail order industry, and sailed to new heights of growth and profitability. Nathalie Balla looks back on her career and explains the role that culture played in the rebirth of La Redoute.

On the program:

• What role does culture play in the success of a company and how to define and change that culture

• How to find the right balance between listening and "leading

• How often to look at key metrics in an e-commerce business

• How to launch strategic projects with limited financial resources and availability

• What posture to adopt to make the most of your Board

• How and why to set up a co-direction

• How to manage a departure from a management position

Jean-Charles Samuelian: Hello Nathalie! Could you come back on your career and your beginnings?

Nathalie Balla: Hello Jean-Charles. I was born to a German mother and a Hungarian father. My parents had to rebuild their lives in Paris in a very modest way. They dreamed of freedom, and access to education was the key to that. They instilled in me strong values: freedom comes first and it is first a question of education. I applied this principle to the letter: I was a studious student. I did a preparatory class before entering the ESCP. Then I went on an exchange with the University of St. Gallen in Switzerland. I did a doctorate and an apprenticeship in a family-owned distance selling company based in Germany with a great culture: Quelle.

J.C.S: Isn't the strength of the German model an industrial family business and an apprenticeship program?

N.B.: Absolutely! I discovered great values and an advanced social dialogue. This allowed me to lead several cross-functional projects in order to position myself in the company before being assigned to Quelle Italy, with the objective of closing the loss-making subsidiary.

J.C.S: How old were you at the time?

N.B.: I was 25 years old. Witnessing the "mess" generated by the approximate management of a company marked me and made me grow. I was soon asked to close a loss-making Swiss subsidiary. I replied that it was possible to turn things around and return to profitable growth. So I was asked to set an example. I accepted the challenge and within 18 months the subsidiary was back in the black. That's how I came to take the reins of the international management for three years. I started with a blank page: writing the strategy, recruiting the team, everything had to be done. Then, La Redoute came looking for me, at first I was clearly reluctant!

J.C.S: Why?

N.B.: I imagined my next challenge to be the digitalization of physical retail. I thought that the playing field would be wider, then I met Jean-Michel Noir and Éric Courteille, with whom I later took over La Redoute. I was seduced by the entrepreneurial adventure they proposed to me: extracting the Redcats sales group to carry out a Management-Buy-Out (MBO) or a Leverage-Buy-Out (LBO). To conclude, my career has been punctuated by numerous repositionings and restructurings. Very early on, I took on managerial functions, despite a lack of maturity, and I was lucky enough to be well surrounded: I was trusted, I was able to learn alongside caring people and I am grateful for that.

J.C.S.: It's interesting, did benevolence remain a criterion that you pursued in your career?  

N.B.: Trust is the way I operate. When I delegate, I need to know if the person concerned shares my values or if he or she is going to make decisions that I could believe in or assume. When it comes to recruitment, I prefer to focus on people skills rather than know-how. Of course, skills remain essential. However, if I compare the two situations I have experienced in my career - i.e., companies that are driven by soft skills and those that swear by performance - I would say that I have grown the most in those companies that have trusted me and where I have been able to let go of failure. When I arrived at La Redoute, I destabilized certain teams who did not perceive me as a "real boss". In fact, I put myself at the service of the company, of the mission and therefore at the service of the teams. I didn't stay in my ivory tower and consider myself to be the CEO.

J.C.S: How did you build this paradigm shift in the minds of your employees? The absence of centralization sometimes leads to the belief that there is no Leadership...

N.B.: My management style could be summarized as: "I listen, I decide, I say what we are going to do and we do what we say". My teams appreciated my approach of dialogue and felt heard. However, I remain a determined person: just because I put myself at the service of the company does not mean that I do not have a vision and a will. They quickly understood that behind the openness and the collaborative aspect there were objectives.

J.C.S: How did you build the corporate culture of La Redoute?

N.B.: When we wrote the project to take over La Redoute, we had a well thought-out project, as much on the commercial and industrial side as on the human side. We decided to open the company's capital to all employees. In our eyes, associating our employees with the future success we hoped for was both unifying and differentiating. However, we had not considered the subject of corporate culture. After a year, we realized that in order to get the teams on board, we had to define our culture because it determines the way we work together, it is the cement that holds the alignment together. At this stage, it was based on the unspoken, which left room for too many different interpretations by the teams. So we called on a talented firm in Lille. A sociologist and a psychologist helped us draw up a cultural portrait . We interviewed 150 employees, at all levels, to define a common understanding of our culture. Then we started to establish the direction we needed to give to our culture to support the necessary transformation of La Redoute. Hand in hand with our teams, we defined the shared attitudes we wanted to move towards . Then we worked on the company' s mission with the management committee. To do this, we organized monthly discussions with a "Sparing Board" made up of employees under the age of 35 in order to get a different and refreshing vision on the subject.  

J.C.S: And what happened when you presented the vision?

N.B.: Our vision was simply not understood. To our great surprise, no one was dreaming about it - even though we were convinced it was great! (laughs) So we rolled up our sleeves with the Sparing Board and our leadership, composed of 70 top managers. By simplifying our vision statement, we were able to get everyone on board. Our vision has evolved from "becoming the preferred lifestyle platform for families" to "beautifying the lives of families." Easier to understand, more powerful. To get to that level of simplicity, we focused on a horizontal collaborative approach rather than a "top down" one. What I remember is that initially we put too much emphasis on numbers and metrics, we had too much of a "financial" approach and wanted to rely on "hard facts". I learned the hard way that "soft facts" are just as important, without them, you can't get teams on board and transform the company.

J.C.S: How long did it take you to define the corporate culture?

N.B.: It took a year to define the corporate culture and six months to formulate the mission. It must be said that the group is composed of 2000 employees, with various profiles: from logistics to data-science, aligning everyone was not an easy task.

J.C.S: A well-defined corporate culture makes recruiting easier. Where did you look for your talent to ensure a good fit with the company values?

N.B : At the beginning, it was not easy because La Redoute was in a bad position. So we relied on word of mouth by surrounding ourselves with a handful of internal talents. Starting in 2014, we went public to spread our vision and share our successes. The lines started to move little by little. The biggest step was taken when we joined the Galerie Lafayette group: it was reassuring for everyone. For example, we recruited a talent from Amazon for our marketplace - I think it would have been difficult to recruit if we had not been part of the group.

J.C.S: That's interesting. And how have you approached developing your talents internally?

N.B: I would say that my main function is to take care of my teams. As soon as I arrived at La Redoute, I spent time with them: lunches, workshops or informal meetings. I was able to identify the more curious and open-minded talents because I remember that La Redoute was, at that time, an ecosystem in a vacuum and most of the employees had the impression that everything had already been done to turn things around, in vain. I leaned on these talents whose energy and optimism suggested that they were ready to question themselves and see things differently. One thing leading to another, I allowed them to progress within the company. At the same time, I exchanged with several renowned companies to help us evolve our approach to recruitment. Google, Criteo, Facebook or the French Federation of Distance Selling. These meetings allowed me to make contacts while identifying the discrepancies in our process in the face of more digitalized companies. To a larger extent, these discussions enlightened me on the way we address skills at La Redoute or internal progression and mobility.

J.C.S: Presenting your company culture is a good way to reassure external candidates. What was your speech to them?

N.B.: I played the transparency card. I explained the potential of this iconic brand that had to be saved, while at the same time highlighting the qualities that would have to be demonstrated: openness or the ability to embrace change. My speech focused on our rescue mission - in a way, I was telling the story of the "last crusade".

J.C.S: If you had to establish a new strategy from scratch, at La Redoute or elsewhere, what would be your method?

N.B.: If I had to do it all over again, I would ask myself more questions from the start about the culture, attitudes and shared values. This is a powerful filter for radiating and recruiting and we certainly made mistakes in recruiting because we didn't look through this prism...

J.C.S: So if tomorrow you joined a new company where you had to redo everything, you would start by looking at the notion of culture?

N.B.: Absolutely. Our takeover plan had four pillars, one of which was focused on the human aspect: the social plan and the opening of the capital to all employees. The desire to get everyone on board was there, but it remained, at first, at the "instrument" stage, without any reflection on the substance. We realised this afterwards, and if we had to do it again, I would start there.

J.C.S: Can you tell me about the frequency and type of metrics you were tracking? And how were you conducting the dialogue when the lights were red?

N.B.: I don't think I'm a role model, I was looking at the numbers every hour, 7 days a week, 24/7! (laughs) I mainly followed the customer recruitment metric because we had a small hemorrhage and we had to reverse the curve. Of course, revenue , NPS and margin were on my radar to track a potential turnaround in results.

J.C.S: When you talk about "margin", is it more like gross margin or something else?

N.B.: The commercial margin, i.e. the cost of the product minus the commercial investments. I looked at the demand every hour, the margin every morning and the costs every week. We set up a weekly profit and loss statement - when I arrived, it was monthly. Tracking the number, hour by hour, completely changed the rhythm of the business.

J.CS: After analyzing your indicators, how can you positively influence the margin?

N.B.: There are two levers of action: the evolution of the product message and markdowns. For us, the challenge was to reduce the level of discounting and to increase the power of the product and brand message.

J.C.S: Did you have a point of contact per KPI? Who did you decide to call?

N.B.: As a rule, these were the members of the management committee. Every morning at 9:00 a.m., we took stock. At the same time, I tried, without any real success, to change the e-mail culture that prevailed in the company. We kept telling the teams that they had to talk to each other. To reach a solution, e-mail allows us to move forward ten times more slowly than a discussion. In spite of this, we did not manage to eliminate it.  

J.C.S: You've launched some great strategic initiatives, the AMPM brand is one of them. How do you spend time on new products while tracking metrics, hour by hour?

N.B.: There was a monthly "strategic" management committee, otherwise it was operational. When I arrived at La Redoute, the brand had a turnover of €20 million and we set ourselves a target of €100 million, i.e. a x5 in four years. We worked by forming taskforces to work on specific topics. In an iterative way, we went from €20 million to €120 million in sales between 2014 and 2021 .

J.C.S: Very interesting. On a project like AMPM, how often did you talk to your taskforces?

N.B.: Once we were aligned on the issues, the objectives and the action plan, the teams had the freedom to move forward. There was a strategic review every year. And, monthly performance monitoring - if there was a problem, we wouldn't wait a year to come forward. In the meantime, they were trusted to move forward independently.

J.C.S: Very clear. And how did you lead the discussion of capital allocation internally?

N.B.: Tackling this type of transformation means making choices. For our part, we prioritized La Redoute France because it was the heart of the reactor. Logically, the majority of our resources were allocated to this. Ancillary projects, such as AMPM, only had a tiny part of the budget, they had to finance themselves. Internationally, we told them that they had to grow, and profitably.

J.C.S: What was the most formative failure for you?

N.B.: The closure of the Italian subsidiary of Quelle. On a personal note, witnessing the human and financial consequences was particularly touching for me - even though the situation of failure was not my responsibility. I have kept this image in my mind, it has helped me to keep my feet on the ground in my decision making, so that one day I will not have to relive the closure of a subsidiary or a company. The good news is that this failure did not prevent me from remaining a daredevil and dreamer.

J.C.S: What would you have done differently?

N.B: I would have rethought my recruiting philosophy. I've sometimes wondered if the turn of events would have been different if I had cut the cord earlier and recruited talent with the right skills on time. The problem is that in reality things are not that simple: were the right goals set? Have the right resources been allocated? Has the subject been properly framed from the start?  

J.C.S: How do you ensure that a talent grows at the speed of the company?

N.B.: We set up a "process communication model" with all the managers, which proved to be very useful. The idea was to enable managers to create an environment that would maximize the potential and motivation of each person by understanding how to communicate positively and how to better manage tense situations.

J.C.S: Very clear. Has your relationship with your Board ever been a problem?

N.B.: We have always had particularly benevolent boards: with Éric (Courteille NDLR), we brought in a variety of personalities with a common mission: to accompany our transformation. We adopted the credo of transparency and listening by giving visibility on what we were going to do and where we wanted to go. In concrete terms, things went well because we were able to put our egos aside, and what came first was the success of the company .

J.C.S: What subjects were you paying attention to?

N.B.: We listened carefully to what they had to tell us about the financial part mainly, but not only. Everything was based on the "cash burn" which forced us to have a very strong focus. The board was made up of a financier, a logistician and experts in branding, social and tech: it was invaluable for our strategy to receive their feedback on the ramp-up of a new logistics site or on the opening of the capital, for example. In concrete terms, we asked them for feedback after presenting our strategy or our questions: we were very afraid of missing out on certain important subjects by being "nose to the grindstone".  

J.C.S: What habits do you think have the most impact on your success?

N.B.: To tell you the truth, I am not a good example. I'm a hard worker and I have the "good student" syndrome. I need to work in order to take ownership of the subjects - which has long had an impact on my lifestyle. The lockdown has significantly improved my routine: today I allow myself to arrive at the office at 8:30 a.m. after dropping my son off at school and I have realized that it is possible not to be in the office every day. I must say that I come from a generation where exemplarity was demonstrated by presence: I was always the first to arrive at 7:30 in the morning and the last to leave at 8:30. I admit that this was not the healthiest routine: I was exhausted on weekends and it is not a model to be reproduced.  

J.C.S: Did you approach your personal development through mentors or reading?

N.B: When I arrived at La Redoute, the first thing I did was to take my executive committee to Silicon Valley to understand the workings and rituals that have allowed cutting-edge companies such as Google or Criteo to progress so quickly. Apart from that, I read a lot and try to interact with leaders in different industries to get inspiration from how they operate. I ask myself: what would this process mean for us? How could I apply it?

J.C.S: How do you deal with the stress and isolation of the CEO?

N.B.: As a duo! I had the advantage of not being alone, Eric and I were very complementary. We did not want to form "clans" by dividing up the tasks, we collaborated in good understanding from the start.