How Unilever Is Winning With Purpose
Yesterday I travelled to London with the President of my local branch of the Campaign To Protect Rural England. He was telling me about the CPRE’s response to the government’s review of national parks as well as their campaign to end the throwaway plastic culture. The conversation was apposite given the focus World Environment Day on Tuesday was plastic, the hottest environmental topic right now. Tackling the root cause of the plastics problem - the over-production of plastic, the environmentally damaging practices of many big businesses, and their lack of responsibility for the consequences – is a high priority for the CPRE.
One of the major criticisms of CPG (consumer packaged goods) companies is their overuse of plastic in their packaging. In recent years, consumer preferences and the retail environment have changed dramatically, and many companies have struggled to keep pace. Millennials in particular have asserted themselves with their rejection of traditional brands in favour on smaller new brands featuring healthy, sustainable and locally sourced ingredients.
One company that has managed to avoid these pitfalls is Unilever. Since Paul Polman assumed the helm as CEO in January 2009, Unilever has risen above the competition with a long-term vision and consistently strong performance.
This is in no small part due to Unilever’s strategy for sustainable living which is set out in detail on the company website. This got me wondering how and why this strategy came about?
A BUSINESS IN DECLINE
When Paul Polman took over as CEO in early 2009, he inherited a failing company with declining revenues and shrinking profits. At the time, Unilever was beset with internal politics. It managed an aging portfolio of brands and morale was low after endless reorganisations. Instead of focusing on its customers, Unilever had wasted its resources on internal fights between its British and Dutch leaders. Polman acted swiftly to globalise Unilever; setting bold goals to double revenue from 40 billion Euros to 80 billion by 2020 and increase its share of business from emerging markets to an astonishing 70%.
REDISCOVERING ITS TRUE NORTH
In his first year, Polman introduced ‘The Compass,’ Unilever’s strategy for sustainable growth. Polman shrewdly identified three global mega-trends:
The end of conventional capitalism and a shift to a more sustainable version of capitalism brought about by the recognition that there was, and is, a crisis of ethics, which is reflected in and probably the root cause of the financial crisis leading to the over-gearing of our economy and of our planet;
An increasing distrust of governments and large organisations on a scale such as Unilever;
Consumers demanding change much faster than large companies can deliver it.
Unilever calls this the ‘VUCA’ world, a phrase that comes from the American army. ‘VUCA’ means the world we live in is increasingly volatile, uncertain, complicated and ambiguous. Turmoil has become the new normal, such that we wouldn’t necessarily know what to do with stable economies and stable currencies anymore because we are so used to living with unrelenting instability.
This understanding of the 'VUCA world' gave Unilever a clear mission, vision and focus. The company’s response – the Unilever Sustainable Living Plan - became the unifying force for Unilever’s 175,000 employees spread across 150 countries. Doing well by doing good became what leadership expert Bill George calls the company’s ‘True North.’ And this relentless focus on the company’s sustainable living principles is what has enabled Polman and his executive team to lead the company authentically through a period of rapid change and growth.
WINNING WITH PURPOSE
This explains why, in figures recently released, Unilever revealed its fourth consecutive year of growth for its “sustainable living” brands, which grew 46% faster than the rest of the business and delivered 70% of its turnover growth. Over the last four years, sustainable living brands have outperformed the average rate of growth at Unilever. ‘Winning with purpose,’ as Polman calls it, is imprinted in the company’s DNA.
Those figures revealed that:
Unilever now has 26 sustainable living brands (up from 18 in 2016). New entrants include household names such as Vaseline, Sunlight, Sunsilk and Wall’s. (Sunlight was actually the world’s first packaged, branded laundry soap, and created to improve public health in Victorian England).
That list also includes Unilever’s top six brands – Dove, Lipton, Dirt is Good, Rexona, Hellmann’s and Knorr – and its B-Corp certified brands such as Ben and Jerry’s, Seventh Generation and Pukka Herbs.
Unilever is on track to meet around 80% of its commitments, which include improving health and wellbeing for 1billion people, reducing environmental impact by half and enhancing livelihoods for its millions of employees, suppliers and retailers.
The company is now looking beyond its ULSP targets by carrying out its largest ever listening exercise on the future of sustainable business. Over 40,000 employees responded to the ‘Have Your Say’ project - setting out their views on the priorities that they would like Unilever to focus on and defining what future success looks like. The results are being used to co-create Unilever’s future agenda.
Meanwhile Unilever has committed to ensuring that 100% of its plastic packaging will be designed to be fully reusable, recyclable or compostable by 2025. An achievement that will delight the Campaign For Rural England.
Question: How is your business winning with purpose? I love reading your feedback so please do take a moment to share let me know in the comments box below.
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