Few business leaders get the opportunity to rescue a national icon during their careers. Thierry Breton is only 49, and he has already done it twice. In 1997, he was tapped to save ailing French consumer-electronics and appliances maker Thomson; a year later it was back in the black. He then took on a far greater challenge in October, 2002, when shareholders and the French government handed Breton the top job at stricken communications giant France Télécom (FTE ). Within weeks, the company's battered stock had doubled on the hope that Breton could work his magic again.
The hope was well placed: Eighteen months into the job, Breton has France Télécom ringing up success. Despite brutal price pressure in the telecom sector, he increased revenues 3.4% last year, to $58 billion, on strong gains in wireless and broadband Internet services. Creative cost-cutting and tighter financial controls let Breton boost 2003 operating income by 45%, to nearly $12 billion. And share sales and stronger cash flow helped slash France Télécom's awesome $76 billion debt -- racked up by predecessor Michael Bon through overpriced acquisitions and wireless licenses -- to $53 billion. "It was a very bad situation when I got here," concedes Breton. "But the most difficult hill is always ahead of me."
Translation: He isn't resting on his laurels. To continue France Télécom's revival, Breton is remaking the company from top to bottom. His strategy is to weave the company's networks -- voice, wireless, data, and so on -- into a unified service that lets people communicate without regard to the medium they're using. Such an overhaul would blur the lines between traditional phone service and the Net, and eliminate the need for different phones and numbers for wired and mobile services. "Customers don't care about the network,"Breton says. "They just want services."
Breton is moving fast. He is folding the separately traded Orange wireless and Wanadoo Internet units back into the parent company to reduce overhead and knock down barriers. He's raising research and development spending by 25% in 2004 to feed innovation. And he's beefing up France Télécom's infrastructure to support a multimedia future, starting with speedy 3G wireless in France and Britain by yearend. He'll accelerate the rollout of DSL to 95% of France by the end of 2005. "The key to our future is innovation," Breton says.
The new corporate culture at France Télécom reflects Breton's energetic personality. Gone is the paternalism that left workers feeling more comfortable than challenged. Breton also did away with weekly executive lunches. "We're too tense for that," says the CEO, who favors sandwiches at his desk. After hours, he relaxes a bit by spending time with his wife and three children in Paris. But the stresses of work don't leave Breton much time for old hobbies such as writing science fiction. Building a future for France Télécom is a higher duty.