In his four years at France’s Solocal Group SA (formerly PagesJaunes), Julien Billot helped boost digital revenue from 35% to 58%, while stabilizing the company’s print audience. Yellow Media Ltd., which came dangerously close to filing for bankruptcy protection in 2012, hopes its new CEO can do it again. Over the years, Yellow Media’s small- and medium-size business customers, along with consumers, have been tossing out the company’s bulky print directories in favour of online listings, causing Yellow’s revenues to plummet and its debt to spike. But a financial restructuring has given Yellow Media a little breathing room, and Billot, who joined the company in January, has put in place a four-year plan to turn a profit again by focusing on digital business services, such as building websites and Facebook pages, and rolling out mobile apps. Investors have praised the strategy, which should give Yellow Media a chance to grow its digital revenues even as the traditional print business declines.
Canadian Business: You left Solocal Group, France’s version of the Yellow Pages, to take this job in Montreal. What interested you about this position?
Julien Billot: There were plenty of different reasons to take this job. One is the industry. I like the Yellow Pages industry. I worked in it. And working to reshape this business in Canada is a very interesting challenge. This company was a print company, and it has to transition to digital. It’s really resetting the company while keeping the same mission, the same brand and the same relationship with customers. For me, it’s an exciting challenge.
The position was announced last October and you officially started in January. What did you do during the time in between?
When you take a job like this, you want to grab the maximum level of information before arriving. So I came two times to Montreal. In November, it was for my personal life—find a house, find a school for my child. We had to take care of our affairs. And I began to spend some time with the board and management. In December, I spent one full week just with the management team. My first priority was to listen: How do they feel about the company? How do they feel about the challenge? I took those weeks to really think about my plan so at the beginning of January I could really begin my work.
You say your first priority was to listen. What are you listening for?
Two things are important: what they say and what they don’t say. The company needs to transform, and you need to understand what the starting point is. What are the strengths and the weaknesses? What’s also important is to see what they are never talking about. There was very little information on media products like apps and websites, because the company was not really focused on building media. Almost nobody was talking about print. People were not talking a lot about human resources. That doesn’t mean people didn’t care about these things. It meant they were very focused on products and very focused on digital, and that was killing everything else. You need to focus on digital, but culture is important. People are important. Media is very important. So that helped me to really rebalance my priorities.
What were your first few days as CEO like in January?
When I arrived, I did two things. First, I worked on the plan. But I also decided to spend the maximum amount of time meeting with people in the company. I think I physically met with 90% of the staff, meaning more than 2,000 people. I did different things. I had breakfasts with all my direct reports and those another level down. I did these one to one, to get to know them—not talking about business, but to know them personally. I also did breakfasts with 20 people at a time. These were two-hour roundtables, with everybody speaking, presenting themselves, just to let people get to know each other and talk about the company. I took the opportunity to meet all of the sales force, and to have breakfast or lunch with all the managers of the sales force. And I visited all of our physical locations across the country. People were not used to that here. Some of them told me, “You know, I’ve been at this company for 25 years, and this is the first time I’ve seen the CEO.” But I’ve always done that. That’s my way of working.
It sounds like you had a plan in mind when you arrived at Yellow Media. Did it evolve during those meetings?
I had ideas. I felt we needed to be more customer-focused, and that was for sure confirmed by all the interviews I had. A lot of people told me we could improve the way we were treating customers. So it allowed me to make a very fast decision and create a new job of vice-president of customer experience. That was as a direct consequence of me listening. We also promoted somebody internally to vice-president in charge of media, because in the breakfast I did one to one, I identified the guy and saw he was very good. That’s why I did all these breakfasts, to identify some talent within the organization.
Is your strategy at Yellow similar to your strategy at Solocal? You managed to boost digital revenue there.
The basics of this industry are the same everywhere in the world. If you want to grow your business, you want to grow the customer base first. Today, we’re declining in the number of customers. But if we grow our customer base, we can grow our revenues, then we can grow our profitability. So the plan is to put everything in the right sequence. Our websites, apps and other products are what drive customers to buy from and trust the company. So the more we invest in media and the brand, the easier it is for the sales force to sell. When you’re talking to the owner of a small company, and the owner says, “I look at your advertising, it’s very nice,” or, “I use your media, it’s very good,” it’s much easier to sell. My job is to get everyone to understand that everything is linked together.
What about everyday consumers? How do you convince people like me to use your products?
First, better products. Of course we want people to discover our products and we want them to be satisfied. We’re investing a lot of money in content and in improving the user experience. The second part is advertising. Perhaps people will see our products featured and want to try us. If you’re satisfied, then you’ll keep us. We did a TV campaign in May, and the number of weekly downloads of our app have tripled.
What did you learn about Yellow’s culture during the first few weeks?
We saw some fear in the organization. People were afraid to say the truth. I was surprised at that, because shaking hands with people, I didn’t feel that. We had conducted an internal survey to try to assess the reality—a completely anonymous survey—and it said in some parts of the organization, people were afraid to say the truth because that was not the way it was done in the past. We’re really trying to change that. That’s why we re-conducted the survey and said to people, “We want the truth.” We had 86% of employees answer, giving us information about how they feel. I don’t have the results yet, but it’s very important that 86% of our employees said, “I want to tell you what’s really happening in our company.”
Did you sense a morale problem at all? Only a couple of years ago, Yellow’s debt level was so high that creditor protection seemed like the only option.
I don’t think so. This company suffered a big financial crisis and that affected some people. People were afraid, people lost interest in the company. But as it recovered financially, I think people feel much better. That doesn’t mean everybody. Because if they work on print, they are going to say, “What’s going to happen to me?”
So what do you say to those people? Clearly the future of Yellow Media is not in print.
It’s a bit schizophrenic, but you have to manage it. The external communication of the company will be 95% about digital. Internally, you need to ahve a high livel of motivation for print, because it’s still 50% of our business. So how do you do it? You talk to them. You say to them “You’re doing a great job. Of course the print business is declining, but that’s not because of you. That’s just the industry.” We’ll still fight in print. If we do minus 25% today and do minus 20% next year, that’s a huge achievement. We’ll fight to do 5% better than last year. And we’ll invest in the business. We’re going to change all of our print systems, and we are going to revamp both our rural and urban directories. We’ll also take some of our people working on print advertising and train them in web design to build websites: Give the ability to the best people to transition to digital. People really appreciate the truth, because in the past, nobody talked to print. It was as if print did not exist in the company. It exists. It’s declining, but people who work on print are very important.
You can work to slow the decline, sure, but print is ultimately still diminishing. What future do you see for Yellow Media’s print business?
We’ll still have print in 10 or 15 years at this company. In rural areas, you need print books. People like print books in rural areas. The future of this company is digital, but that doesn’t mean 100% digital. It can be 80% or 90% digital. As management, our role is to keep the people working on our print products very motivated while transitioning some of the print-only resources to digital which will allow us to go faster.
Where are you now in terms of your strategy?
After the first few months, my current role is to accelerate the movement in the company. When something is moving—a rock down a slope—you’re not pushing the rock. You’re just removing everything that can slow the rock. So it’s identifying the critical roadblocks to transformation and trying to avoid them: providing the right level of resources and money, having the right level of prioritization, working on culture. If people are afraid and don’t want to move, that’s slowing the system. You have to work on all the different aspects of the company.
But how do you manage so many moving parts?
When you’re a CEO, there are two extremes. One is being too high and one is being too close to people. You have to maintain the high-level vision of things because you are the pilot. You have to know where to go, but you don’t want to decide every movement. One of my former bosses said a CEO is like a helicopter. You’re flying overtop, but sometimes you need to go down and see.
Is there anything about how you’re trying to transition this company that can be applied to other industries?
When you want to transition an industry, you have to do two things in parallel. One is fighting for the existing business. You need this business to finance the transformation. But at the same time, you need to dedicate all your energy to the new business. That’s difficult. You need to motivate people in the old business. You need to extract most of the money from your old business to finance your new business. But at one point, if you don’t say to your organization, “Now we are going to organize for our new business,” then you’ll never do it. That means doing everything by the rules of the new business. Here, we want to reinvent everything inside the organization. So every time we have a deliberation about whether we should do something to feed our digital needs despite the impact on the print, we need to make this decision in favour of digital. If you want to be here a long time, it’s your market share in your new business that matters. You can die with 100% market share in your old business.