October 19, 2022 • 54 mins
Unilever, better known as the 100-year-old company whose products you’ve grown up using: Dove Soap, Lipton Tea, and Ben & Jerry's to name a few.
Join us for a candid conversation with Unilever CEO Alan Jope where we discuss the challenges and opportunities of modernizing a purpose-led company with 3.4 billion customers in more than 100 countries.
If you love the show, rate and review us on Apple Podcasts. Find out more at https://callingbullshitpodcast.com/. This episode features additional music from Joseph Stevens.
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Episode Transcript
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Speaker 1 (00:00):
Hey, folks, Tie here just a note before we get started.
The conversation in this episode was recorded before Uni Lever's
recent announcement that Alan Job will be retiring from UNI
Lever at the end of Okay, here's the show. Unless
(00:22):
you're a crystal clear in your mind why it makes
you a better business, how it will drive stronger performance,
don't start the journey because this is not CSR. This
is not some offset where you can buy a clean
conscience by donating to a charity or having a park
(00:42):
made next to your headquarters. Unless it sits at the
heart of your business model, driving revenue growth, taking out cost,
improving your employee proposition, don't do it. Welcome to calling Bullshit.
The podcast about Purpose, a swashing the gap between what
companies say they stand for and what they actually do,
(01:06):
and what they would need to change to practice what
they preach. I'm your host, Tie Ontogue, and I've spent
over a decade helping companies define what they stand for,
their purpose and then help them to use that purpose
to drive transformation throughout their business. In this special episode
a positive case study, we're doing a deep dive into
(01:28):
Unilever with their CEO, Alan job to find out how
a global company of such vast scale, with such a
complex history keeps purpose front and center. You may not
even have heard of Unilever, but I bet you've grown
(01:50):
up using a bunch of their products. Dove Soap, Lipped
and Ta Basiline, Ben and Jerry's, to name just a few.
Many of these brands are purpose led in their own right.
But what if the company that owns all of these
household brands committed to operating under a single purpose to
make sustainable living commonplace. What if they committed to net
(02:15):
zero carbon and regenerative farming practices, cut their use of
virgin plastics, and ensured fair wages for everyone up and
down their supply chains. Imagine the profound impact that could
have on the future of the planet. Unilever has imagined
that impact, and as the parent company to these famous
(02:37):
brands and hundreds of others, they're in the unique position
to bring that dream to life. But how do they
pull this off? It is such an ambitious project. They
have hundreds of thousands of employees, three point four billion
customers around the globe, and over a century of complex
(02:57):
history to grapple with. I had the opportunity to sit
down with their CEO, Alan Joke, for an honest conversation
about the opportunities and challenges that Unilever faces and how
he plans to help you. Leaver continue the journey into
a purpose driven and ever brighter future. But first let's
(03:23):
delve into Unilever's history. The story begins in nine century Holland,
when two butter making families, the Jurgen's and the Vandenburgh's,
turned their efforts toward a new product, Marjarine. Meanwhile, over
in England, William Lever was also making changes at his
(03:45):
family business, Leaver Brothers. The resulting product, Sunlight Soap, was
so popular that soon they were making four dred and
fifty tons of it every week. Consider progressive for his time,
William Lever saw his company as more than just a
profit engine. His mission was to make cleanliness commonplace and
(04:08):
bring hygiene and thereby help to the masses. He wanted
to do well by doing good, to grow his company
and simultaneously, where's the standard of living for both his
customers and his employees. With prosperity sharing as his guiding principle,
(04:28):
he built a village called Ports Sunlight, where he offered
affordable housing and other amenities to factory workers. It was here,
at a time when benefits were practically unheard of, that
he introduced innovations like sick leave, paid time off, and pensions.
After years of common interests and even some collaboration behind
(04:52):
the scenes, the Yurgans and the Vandenburg's officially combined their
businesses in nineteen twenty seven to create Margarine UNI. Two
years later, Lever Brothers joined the fold in what The
Economist called one of the biggest industrial amalgamations in European history.
In simpler terms, Unilever was born. Over the next half century,
(05:19):
Unilever grew a lot. They continued to acquire and launch
new companies and brands, and by the nineteen eighties they'd
become the world's twenty six largest corporation. But through the
eyes of someone looking back from the company engaged in
some fairly questionable activities During this period of rapid expansion.
(05:43):
There were some controversial marketing campaigns for skin lightning products
in the global South, and human rights violations like child labor.
Over the years, parts of Unilever had definitely lost touch
with ports. Sunlight's founding principle of doing well by doing good.
In the late ninety nineties, with their ideals off track
(06:06):
and growth stalled, the business was in decline and in
they took dramatic action and cut three quarters of their
nearly six hundred brands. But even after shifting focus to
their most successful brands, the next decade really only saw
(06:28):
some modest returns. By the time uni Lever was hit
by the two thousand and eight recession, it was clear
that the only way forward was to get a truly
fresh perspective. The most important thing is that you pursue
your your purpose, whatever you feel strong about. Figure out
(06:49):
where you want to make the difference. That's the first
thing you need to do. That's Paul Pullman. He had
steered Unilever's rival Nestle through this financial storm as their
cf OH. This caught the attention of the head haunchos
at Unilever, and instead of hiring from within, they decided
to poach Paul Pullman in two thousand and nine. He
(07:11):
became Unilever's new CEO. First order of business get everybody
on board with his ambitious vision. Because I came in
from the outside. Some people felt that the Troy and
Horse was let into the company. And I discovered very
early on that it was for me to prove that
I could be part of the team, instead of them
(07:32):
to prove that they could be part of my team.
To do this, he knew he needed a better understanding
of Unilever's history, so he turned his attention to the
company archives and started digging. And we came to some
enormous values, and one of them is certainly doing well
by doing good. He had unearthed those same principles upon
(07:52):
which William Lever built Ports Sunlight. We took all that
strength and said, can we not turn that into a
business model? That is that's what they needed right now.
Palman implemented what he called the Sustainable Living Plan, which
aligned their global business strategy with the well being of employees, customers,
and the environment. They also started acquiring purpose led businesses
(08:17):
like Seventh Generation and Ben and Jerry's, and Paul brought
a new approach to Unilever's finances as well, signaling to
investors that if they weren't interested in sustainable, long term
value creation, that they should take their money elsewhere. If
you want to solve all these issues like climate chance
(08:38):
or food security, or poverty alleviation, or access to clean
drinking water or education. You cannot be victim to the
quarterly reporting. So you need different business models. And you know,
even when I became CEO, we stopped doing quarterly reporting,
We stopped giving guidance. We moved our compensation systems to
the long term. And make no mistake, Palman said ambitious
(08:59):
financials for the company as well. He declared that he
expected the company to double revenue while cutting its environmental
impact in half. To put that in perspective, Unilever had
three hundred factories across the world, four hundred brands, and
two point five billion customers, no small task. When Pullman
(09:23):
stepped down in January, he generated a two hundred and
nine percent shareholder return. He had expanded Unilever's global market share,
and he had become a purpose driven business legend. And
the story continues with our guests today. Paul Pullman's handpicked
(09:45):
successor and current Unilever CEO, Alan Joe. As you'll hear,
Alan is a warm, engaging leader who has worked in
almost every part of Unilever's business around the world. I
was fortunate enough to work with him as a client
when he was a senior marketer at UNI Lever and
I was an advertising creative director. We sat down to
(10:07):
discuss his approach to sustainability and how he keeps purpose
front and center while he runs a global corporation with
real integrity. That conversation right after the break, I am
(10:27):
extremely excited to introduce the CEO of UNI Leaver, Alan
Job Alan, welcome to calling bullshit. Hi Tai, thanks for
having me. It's great to be here, Nice to see
you after a while. Great to see you too. And
to start out with, I thought it would be great
to just have you tell us a little bit about
yourself and your background. Sure you can maybe tell from
(10:50):
my accent that I'm Scottish by birth, grew up in Glasgow,
went to University in Edinburgh and then joined Unilever Streets.
After university um and the first five years in London,
then fourteen years in the United States and thirteen years
in Asia. My family and wife and I have lived
for four years in Bangkok, five years in Shanghai and
(11:10):
four years in Singapore. Came back to the UK just
four years ago. So after twenty seven years away, I'm
a cultural stranger in my own country. A lot of
my a lot of my time in marketing UM, but
then progressed into general management and plenty of interests outside
of work. I certainly don't live to work. But when
you became CEO, you took over from Paul Paulman, who
(11:35):
is the person who put Unilever on the path to
really being a purpose led organization. What has that transition
been like for you taking the range yourself and also
taking over for Paul. Well, in terms of the continuity
of our sort of sustainability journey, it was relatively straightforward
for a couple of reasons. First of all, it's not
(11:57):
a ten year old thing. It's a hundred and ten
year old thing. Our various founders and Uni Leaver are
believed in running the business on a sustainable or purposeful way.
This guy, William Lever, who found our Leaver Brothers, one
of our antecedent companies, did all kinds of cool things.
He built a model village to house his workers when
(12:17):
his workers went off to fight in the First World War.
Not only did he hold their jobs open for them,
he paid their families their wages while they were all fighting. Um.
He kind of invented pensions. He had an elaborate system
to create libraries for those workers children, and he back
in the eighties to find the mission of the firm
as to make cleanliness commonplace and lessen the load for women.
(12:40):
So he was a very early on to social issues
and public health issues. Now, over the history of the company,
we have generally tried to do the right thing as
a business, often after exploring every other possible alternative, and
sort of Paul snift out this DNA and did an
utterly brilliant job putting it back in the center of
our business strategy and our culture. So it's something that
(13:03):
was very easy to carry forward. Also, frankly, I believe
strongly in in this mission as well, and maybe that's
partly why he was an enthusiastic supporter of me coming
into the role. But it's not been a difficult thing
to pick it up and run with it. Yeah, And
so it's fascinating that William Lever is kind of an
O G conscious capitalist. I would say it sounds like
(13:24):
in some ways he is. There is dark sides to
his history as well. So we had we had palmwell
plantations in the Congo where we suspect strongly that there
was a form of forced labor um. In fact, we've
commissioned an academic study with the University of Liverpool to
get to the bottom of that. We don't want that
(13:44):
to be a secret. If something bad went on back there,
then we want to know all about it. But the
vast majority of Leavers activities were holy positive. In fact,
I found a brochure recently where for the first football
match between Lever brother there's Port Sunlight football team versus
Everton FC. Every Everton one one I have to admit. Okay,
(14:08):
So pivoting to Unilever today, how do you articulate Unilever's purpose. Yeah,
we do articulate the purpose of the company as being
to make sustainable living commonplace. We want to be a
force for good as a company that, through our operations
and through our brands, we help people to live more
sustainable lives. And so I think if you ask most
(14:30):
people in Unilever they would be able to see, Yeah,
the purpose of the company is to make sustainable living commonplace.
It's accompanied by a very clear vision which is we
want to be the global leader and sustainable business and
we want to prove that it drives better financial outcomes. Yeah,
and I'm sure we'll get into this in a second,
but that sits right alongside our purpose, absolutely, And and
(14:51):
how would you characterize the dominant system that Unilever is
trying to improve upon with that purpose? Yeah, I think
this comes back to shareholder capitalism versus stakeholder capitalism. And
I would love to go to my grave having proven
two things. I'd first of all, like to prove that
there is no trade off between responsible, purposeful, sustainable business
(15:17):
and strong financial performance. Any time we get into discussion
of well, how do you trade off between the financial
performance of the company and the sustainability mission that you're on,
then we're doomed because ultimately the need to deliver returns
as a business will prevail. And so I want to
prove that sustainable business is a pathway to better financial performance.
(15:39):
And the second thing I'd love to prove is that
we have multiple stakeholders. They're all important, but I think
there's a priority of sequence. If we look after our people,
the employees of Unilever, they'll look after the business. They
will be the people who will make sure that the
actions we take don't have an adverse effect on the
planet or society. And in doing so they will ensure
(16:01):
that our shareholders are are better rewarded. So those are
the two dominant systems I'd love to have an impact on.
One is this stakeholder model which ends up rewarding shareholders better.
And the other is scorching this notion that there's a
trade off between sustainable business and financial performance. Yeah, I
love that, And I wonder if you could talk a
little bit about the compass, which is the name for
(16:23):
your business strategy. Can you explain what the compass is
and how it works. Sure. Look, four years ago, we
had two documents in the company. We had our business
strategy and we had our sustainability strategy, and we felt
that didn't make a lot of sense, and so we
rewrote our business strategy and as five pretty simple elements
(16:46):
to it, which is some choices that we've made around
high growth spaces we want to take our portfolio into,
like hygiene and skincare and prestige beauty. We've called out
the US, China and India as particularly important markets to
win in. We've called out e commerce as a must
win channel, and we've talked about the organization and culture
(17:07):
that we want to build. But the first of the
first choice is win with our brands as a force
for good, powered by purpose and innovation. And then dropping
immediately below that are three areas where we think we
can bring our commitment to sustainable living to life. One
is improving the health of the planet and others improving
(17:29):
people's health and well being. And the third is contributing
to a fair or more socially inclusive world. And again
underneath that, there are thirty eight specific commitments that we've
made so that the two sides of the coin, our
sustainability strategy and our business strategy are fully fully integrated.
And are all of Unilever's brands. Do all of them
(17:51):
have a defined purpose? Or are you somewhere along the
journey of defining all of those We're on the journey.
We're on a journey. Let me first will see how
we define it? Yeah, please, you'll be familiar with the
idea of continuous tracking, looking at our brands and the
competitor brands and the attributes and how we score on
those attributes in the eyes of consumers. Well, we now
(18:13):
have a standard question and for all categories in all countries,
where we ask, does this brand make a positive contribution
to society or the planet. And when in that country
a consumer scores our brands as well above average on
an index, then we say, okay, that brand in that
(18:35):
country is a purposeful brand. And at the moment, to
be precise, our turnover now comes from brands that the
consumer sets are doing something a little bit more for
society of the planet. Some of our brands are almost
entirely seen that way, like Dove or Ben and Jerry's
and others are are finding their way. You can't really
(18:58):
superimpose a purpose. Most of our brand's purposes we find
by excavating archaeology of their DNA and where they've come from.
It's very hard to sort of suddenly force fit in
terms of the journey that you're on. Is the goal
to be a hundred percent at some point? Yeah, I
suppose it's an ambition. It happens a little bit organically.
And the reason I say that is our brands that
(19:23):
score highly on purpose are growing twice as fast access
a little as close to three times as fast now
as the rest of the portfolio, and so there's a
very natural migration of our portfolio into that space. So, yeah,
there will be some brands that never quite get there.
But so long as you know, six of our brands
are are scoring highly on purpose and are growing three
(19:45):
times faster than the rest of the portfolio. Organically, the
vast majority of our portfolio will soon be seen as
more purposeful by the consumer. Right. I was listening to
an interview of you at a recent Goldman Sachs conference
where you said that we found that setting audacious goals
goals were not sure how we're going to meet is
(20:07):
a very effective way of driving change in our company,
and I just wondered if you could talk a little
bit about that, For instance, how do you set those goals? Yeah,
probably the easiest way to answer this is not in
the abstract, but with a specific challenge, which was we
were looking at our decarbonization of the company, and let
(20:28):
me maybe just set it up by saying, we're not
an n G O TI, We're a business. We're not
doing this because of the moral imperative. We're doing because
we think it makes us a stronger business with it
will have a more successful long term future. UM and
there are dimensions of the business case around growth. I've
touched on. Some of our brands are growing faster when
(20:50):
they embrace sustainability. There's a dimension around cost. We actually
think it should take cost out the organization. Um it
lures risk. A planet underwater or on fire is not
a place to be a consumer products company. But on
this point of cost, there will be a price on carbon.
So today carbon is treated as a free good and
there's very few places where there's attacks or a price
(21:11):
on carbon of any sort. There absolutely will be so
both because we care about climate change, but also because
it makes good economic sense to reduce the carbon footprint
of Unilever. We wanted to lay out our plan to
decarbonized Unilever, and I suggested to our board that we
put it to shareholder vote. And this caused a few
(21:31):
sweaty moments in in our board meeting because we were
worried that some of our shareholders might say, what, you're
going far too far, and others might say, well, you're
not going far enough. But we wrote this carbon Transition
Action Plan and we put it to a shareholder vote
last May at our a g M. And now, coming
to actually answer your question, it has some big hairy
(21:52):
goals in there, one of which is to be net
zero as a company by twenty nine. Now we've got
milestones along the way. So for instance, we want reduction
and scope one and two carbon by we want a
seventy percent reduction in all emissions by but that endpoint
(22:13):
target and net zero by nine, we have no clue
how we're going to get there, and it will require innovation.
It will probably require reshaping of our portfolio. It will
require us to take as much carbon as we can
out of our operations. It will require us to advocate
for a decarbonization of electrical grids around the world, because
(22:34):
the biggest carbon footprint that you on ever has is
the energy that's used in heating the water that's used
to wash your skin, wash your hair, wash your clothes,
cook your food. That's our single biggest footprints. So and
only when we've done all that, we will probably need
to do a little bit of offsetting at the end.
So that would be an example of where we've set
(22:55):
a goal with no idea how we're going to get there.
But I can tell you most people in the company
of a feeling that it's the right thing to do,
and that by setting the goog will start taking the
actions that we need to take. I love that the
thing that I think that's really interesting about that is
that in traditional shareholder capitalism, companies have been conditioned to
(23:15):
externalize cost. It would be rare of a company, i think,
to actually think about the carbon footprint of heating the
water that people use to bathe as a part of
your responsibility. It's really inspiring that you think about it
that way. Well, two footnotes. We were the first company
in the world to put our carbon transition plan, our
(23:36):
climate Transition Action Plan to shareholder vote. Many have now followed,
so we're delighted to see many people now writing their plans.
And the second footnote is that it squeaked through the
shareholder vote with six shareholder support. And actually that's a
great statistics to understand that the capital markets are starting
to care about these types of matters. Absolutely, that's really positive.
(24:02):
You've already made tremendous strides as a company over the
last decade, and as you look at the challenges that
lie ahead, the things that you want to take on.
What are those challenges. Well, there are lots of problems
in the world right now, but our view is that
(24:22):
there are three that are bigger than the rest. The
first is the climate emergency that the impact of climate
change on everything is hard to overstate. It's going to
be a major major problem for the world. Even if
we do the best possible job that we can and
managed to get to one and a half degrees above
(24:43):
pre industrial levels, it's still going to cause a major
failure of the world food system. It's going to cause
massive migration from hard hit areas, so we better be
dealing with that. The second, and it's related as a
degradation and loss of nature combination of climate change and
us chopping down large swathes of for us putting in
monocrop agriculture, smashing by diversity. And then the third is
(25:07):
the dramatic increases in inequality that we're seeing country by country. Interestingly,
because China has lifted hundreds of millions of people out
of poverty, net inequality in the world is not going up,
but if you look at it on a country by
country level, the tremendous situation inequality and it's getting worse.
And those are three of the things that we hope
(25:31):
our business can play a role in addressing. A lot
of what Unilever uses as input materials are agricultural raw materials,
not just in our foods business, but much of what
we use in our personal care products like soap uses
agricultural raw materials. And what what we've said is that
by twenty thirty we want a hundred percent of our
(25:53):
agricultural raw materials to come from regenerative agriculture, where the
farming practices leave the land in better place. Let me
give you a really simple example. We buy soybean oil
that's grown in the US and uh, a soy field
generates abouts of carbon par acre. If you plant cover crops,
(26:16):
so low rise plants that can be harvested in amongst
the soy that's being farmed, that reduces the carbon output
of that acre by five kilograms, So it goes from
three of carbon emissions to a hundred and fifty ms
of carbon sequestration. That would be an example of regenerative
(26:40):
agricultural practices. We can maybe have a chat about palm oils,
material we use a lot of and it's a demonized material,
but actually I'd like to make the case for palm
oil at some point. Yeah, well, let's let's talk about
that now. I no palm oil was mentioned in the
context of the history of Unilever in the Congo, so
(27:00):
it's long been an ingredient in many of your products.
Where does UNI ever stand with palm oil today? Yeah,
there have been horrible things done to nature and the
animals that live in virgin forests through the clearing of
forests to grow palma. It's shocking. Actually, if you fly
over parts of Malaysia, you can see these huge parts
(27:22):
of the country that have just been cleared and replaced
by palm plantations. However, palm is an exceptionally productive material,
and if you were to try and replace the palm
oil that is used to make actually some very healthy
foods and a lot of things like soap and other
types of surfactants with rape seed or soy, it would
(27:44):
require eight times the acreage. So here's our view, where
are we to shift away from palm? We would end
up destroying large parts of the world with crops that
need more acreage. And there is perfectly sustainable ways of
growing palm right now where you use much less fertilizer,
where you don't clear virgin land. Instead of using pesticides,
(28:07):
we introduced owls onto the palm plantations, and the owls
keep the rodent population down, which is a sort of
romantic notion. But what Interestingly, what it requires is technology.
It needs real time geo mapping coupled with cell phone
tracking of truck drivers, coupled with some advanced AI technology.
(28:31):
And we are very confident now that something like of
our palm comes from certifiably sustainable planting. That last two
or that last one or two percent is we're working hard,
spending a lot of money on figuring out how do
we get that out of our supply chain. So I
touched a bit there on um the climate crisis and
(28:54):
some of the things we're doing, some of things we're
doing on nature and the degradation of nature. And we've
got a lot of programs running. But I think one
that we're very proud of is there's a concept of
a fair living wage. It's more than a minimum wage.
It's enough money that a family of four could feed, clothes, house,
educate and transport themselves. And Unilever, of course pays a
(29:18):
fair living wage already to anyone working in our business.
But that's only a hundred and fifty thou people. There's
about five million people in our supply chain. And what
we've said is that by t anyone who's not able
to prove they're paying a fair living wage to their
employees will not be a supplier to Unilever, and that
(29:40):
we think is the single biggest redistributive action that we
can take to try and address inequality through our own operations.
I love that once again, just most businesses don't think
about the world that way. And obviously I agree with you.
Like the fact that you're getting ahead of it is great,
but you're getting ahead of it because it's better business
(30:00):
that are ultimately operating in an unsustainable manner. Put the
time horizon on your survival essentially as a company. Yeah,
you know, we've got a pretty good feel for what
that time horizon is and it's because of different attitudes
amongst different age cohorts in society. Yes, so baby boomers
(30:21):
at least are honest. They don't really claim that they
change their brand choices according to sustainability considerations. I I
just creep into gen X and we're worse. We say
that we care about sustainability, but don't actually modify our
purchasing behavior, So we're dishonest. Gen Y millennials to make
gross simplifications, Millennials care about sustainability but are not prepared
(30:46):
to pay more and won't accept it if the product
performs more poorly as a consequence, jensennials the kind of
next generation consummate cup coming into the consumption classes. Practically
the only thing driving and choice is the values of
the brand and the values of the company behind the brand.
And so this is simply about relevance for the future.
(31:08):
And if you want to be a brand that's still
a company, that's still a healthy, successful, thriving company ten
twenty thirty years from now, you better be modifying your
business practices in a way that are acceptable to the
gen's annials that are coming through the population right now.
It's so important. In fact, we're called calling bullshit because
(31:30):
such a huge number of young people in particular are
just calling BS on shareholder capitalism. Um. The entire generation
of consumers is calling BS. And it's a clarion call.
Right If you want to run a business, if you
want to sell a product in the future, you had
better pay attention to this. So I could not agree more.
And and when I get challenged about, hey, why are
(31:51):
you so obsessed to putting purpose in your brands? You
know you some sort of woke capitalist, the answer is hell, no,
I just want to make sure that our brands remain
real event for the generations that are coming through into
society today. Yeah, exactly. Okay, So I'd love to pivot
again and talk a little bit about your leadership and
(32:12):
purpose led business. One of the things that I really
believe is that no company is is perfect, That being
purpose led is a journey, right, and and every company
is somewhere along that timeline. First of all, do you
agree with that? You know, I mentioned earlier that we've
we've got these thirty eight specific targets and commitments that
(32:35):
sit in our compass. Our executive team looks at progress
on those every quarter, and in the last review, which
was a couple of weeks ago, all of those thirty
eight six were green, most of the rest were read.
And so so we are a massively a work in progress.
And yeah, I guess it goes with setting somewhat stretching ambitions.
(32:58):
But we've got so much hard work ahead of is
it's a little daunting that last two of palm oil
that we're not sure is sustainable. It's going to take
tons of heart. We're gonna have to co invent technology
with Microsoft to fix that. I'll tell you one that's
really haunting me at the moment is our plastics commitment.
We've said that by which is just around the corner,
(33:20):
we will have reduced our use of virgin plastic by
by using recycled material and sums through an absolute reduction
or replacement with other materials like aluminium or would even
can you believe wouldn't there you go? So I'm kind
of trembling knees about this plastic commitment because there's a
(33:43):
worldwide shortage of recycled plastic. The premium for recycled plastic
over virgin material, perversely is rising. And so that's an
example where tie we've got our work cut out. I'm
not exactly sure how we'll get there, but we're very
much a work in progress. So that that leads to
another question, which is do you think that leading a
(34:05):
purpose led business is harder? For instance, you have so
many more stakeholders to think about, then the CEO of
a traditional shareholder led business, is it is the job harder?
I don't think so. Really, No, tell me a business
leader who doesn't care about her employees, her customers, are consumers,
her business partners, societies that you're doing business and the
(34:28):
planet and I think I'll be able to show you
a business leader that's not getting good results, so it
doesn't deserve to get good results. So it's not unnatural
to care for those different stakeholders and make sure their
interests are being looked after. And if you do it
with deep conviction that the shareholder will be better rewarded
at the end of the day. Now, we're also working
(34:49):
progress on that. By the way, our financial performance needs
to step up to prove this model. But we've we've
got a little bit of momentum. We've just did our
fastest year of growth for nine years. Yeah, you've done
well in the US here, things are, things are coming along.
We have a theory of change, a model that we
use on pretty much all the big issues that we're
trying to address, whether that's climate or our gender or inequality.
(35:15):
Let me use gender as an example. Think of four
concentric rings, and that the innermost ring is our own operations.
So my job one is to make sure that there's
proper gender representation inside Unilever. And we've gone over the
last eight years from a position where thirty eight percent
of our managers were women to now of our managers
(35:37):
are women. That we've got nine non execs on our board,
five women, four men, so we're okay on that. Then
the next ring is what we call our value chain.
Are we making sure that there's good gender representation in
our suppliers, in our distributors, and in some of the
business models that we involve third parties in. That's the
next impact that we can have. Then we go to
(35:59):
the next level when we think about the impact that
our brands can have. We go from reaching millions of
people to tens of millions of people. When Dove gets
busy helping girls not carry unrealistic images of beauty, or
when sunset, it's creating opportunities for women to set up
their own hair salons. And then the outer most ring
(36:19):
is what we call advocacy, and that's where partnerships come
in and we work with civil society, government, academia to
try and change the system. And I think those first
three rings most business leaders have to deal with. We
have an unusually active advocacy program and that is a
(36:39):
little bit of extra work. In fact, I just came
from a board meeting of the World Business Council for
Sustainable Development. But you know what, it's very rewarding and
worthwhile work. So it's a little bit of extra work,
but not really, but you love it. Yeah, it's satisfying,
feeds the soul. So are there other leaders of purpose
(37:00):
had businesses that particularly inspire you? Oh? Lots, yes, lots
and lots. To me, the iconic one is Patagonia, and
you know of Asinar and everything that he has set
up there and which has been carried on by his successors.
And there's a survey comes out every year of opinion
leaders and their views on companies and whether sustainabilities at
(37:21):
the heart of their strategy. I'm embarrassed by the fact
that you don Leaver just for the last few years
scored number one in Patagonia number two, because I don't
think we deserve it at all compared with the deep
Remember if are discontinued his his metal petons, which was
the core product in his business, because he felt they
were damaging the very rock that he was so lovely.
(37:43):
We're leaving him stuck in the rock, and he exactly.
So I really admire almost everything that they keep reinventing themselves.
You're making fleeces out of PT bottles, encouraging people not
to buy a new jacket, come and get it repaired.
Their sourcing policies and they're just fantastic. Another one is, yes,
we're broadened. Who runs Ikea? Ikea have done such deep
(38:05):
work on understanding the climate and social footprint or so
the planetary and social footprint of their business, their supply chain,
their stores. And I'll give you one more um that
you may never have heard of. A food company that
grows fruit and vegetables around the world called Alam. They
were founded by a guy called Sonny Vergas. Sonny lives
(38:27):
in Singapore, and he has built one of the world's
leading agricultural production companies, and he's done it with extraordinary
attention to purpose and sustainability. So there's one, and then,
of course there's a whole lot of other lists, but
there's three that I particularly admire. Today there are so
(38:47):
many more purpose led businesses that actually started with a purpose.
So a lot of young companies begin that way, but
a lot of older companies sounds like unlike Unilever, didn't
begin that way and are now trying to figure out
how to make that transition. What advice would you have
for other CEOs who are beginning that purpose of the journey.
(39:11):
The first point I would make is entirely predictable, which is,
unless you're crystal clear in your mind why it makes
you a better business, how it will drive stronger performance,
don't start the journey because this is not CSR. This
is not some offset where you can buy a clean
(39:32):
conscience by donating to a charity or or having a
park made a part built next to your headquarters. Unless
it sits at the heart of your business model, driving
revenue growth, taking out cost, improving your employee proposition, don't
do it because then it's not sustainable. And the second
is you don't have to go from zero to perfect,
(39:54):
just get started with a few inistas. And it's so
rewarding economically and emotionally. It's such a strong thing to
build a company culture around that. I believe it will
snowball and catch momentum. And you know, it has to
be authentic, but it doesn't have to be perfect. Let's
use that as a pivot too, company culture, because it's
(40:15):
such a huge part of it. How would you describe
the Unilever company culture? We want our company to be human,
to be purposeful, and to be accountable. You don't even
does have a culture where we treat each other with respect.
If you get the job done, but you're an asshole
and you leave a kind of a trail of people
(40:36):
who would love to need afterwards, right exactly, then I
think our company would tissue reject you like a badly
matched Oregon quicker than the average company. So being human
and with that comes you know a lot of friendships.
Not too hierarchical. I mean every company is get some hierarchic.
We're not too hierarchical. Um, So that's the human The
(40:57):
second is purposeful. We believe that, Um, this is a
bit slogany, but we do believe that brands with purpose growth,
that companies with purpose last, and that people with purpose thrive.
And we've putting out fifty thou people through purpose workshops
to try and understand is the thing that makes them
take well aligned with the work that they're doing it
(41:19):
you'll leave. And when people find that alignment, my goodness,
it cements their commitment to the company that you can
see job satisfaction scores that are through the roof. And
so that's the purposeful part of our culture, more human,
more purposeful. And then the accountable bit is we want
people who are prepared to take risks. We want people
who are prepared to have a go for people who
(41:40):
understand that, you know, poor performance plus a good excuse
is still poor performance. And and those are the kind
of three ways we describe our culture. I think it's
one thing it doesn't capture, which is we are extraordinarily international.
There is no dominant nationality in our business. And I
love that. I'm sort of looking out my office here
and I can see a melting pot of different nationalities.
(42:03):
And typically a French company would be full of French people,
and American company full of Americans and so on. Truly global.
And are there certain things that you look for in
a new employee? Is there a Unilever type? Over the
years I've been trained on all these different competency frameworks
and what to look for a reference to that have
(42:23):
stuck with me. One is very simple. It's that people
are successful in our company tend to be strong masters
of their inner game, so that they're very self aware,
they control their emotions reasonably well, and they operate out
of a sense of service and purpose. And that is
a precursor to mastering your outer game, which is your
(42:45):
expressed leadership, your drive for business performance, your passion for
consumers and customers. I think it's an interesting concept that
you have an inner game in an outer game and
both need to be performing at a high level for
for someone to do well. The simple kind of Alan
Joke criteria after thirty odd years of kindiring people is
(43:06):
I want people who are are smart. Uh, got a
bit of EQ and a bit of i Q. Who
are quite driven. They've got they can show that they
get around obstacles. And the third is that they're nice,
kind people that other people want to be around. And
I could just think of my kind of leadership team.
They are all bright, they are all driven, and they
(43:27):
are all someone you'd want to appear with. Yeah. Yeah.
One of the criteria I use is if I were
stuck in an airport with this person for an unexpectedly
long period of time, would that be a good thing
or a bad thing? Exactly? Uh. One of the things
that you touched on that I'd love to just talk
about a little bit more is talent and the effect
(43:51):
that being purpose lad has on your ability to attract talent. Yeah.
We measure our attractive us as an employer for undergrads
coming out of university in h forty four countries around
the world. In forty two of them were the employer
of choice in our sector, and ten years ago that
(44:14):
was seventeen. So we have no problem attracting really high
quality graduates coming out of university. In fact, we get
two million job applications a year across the company. But
I think what's maybe more interesting is we've been able
to attract some really senior executives and indeed board members
(44:35):
who would have a pick of the places they could work.
And the universal reason is because they want to understand
or be part of a company um that is operating
in a responsible fashion. Whether you call it purposeful or
responsible or sustainable, it's the same threat that is acting
and to attract senior and junior folks, and we've got
(44:56):
really hard data on this guy. I was surprised to
hear that we're the third most followed company on the
world on LinkedIn, after Apple and Google. You know, a
sleepy old soap maker. Not bad, very cool. Okay, I
have a couple of questions that I want to ask
you to wrap up. I'm just curious about this. You've
acquired a number of certified B corps over the years,
(45:18):
I think seven or eight of them, and I just
wondered if there were any plans to become a B
corp at the group level. Yeah, we've studied this at
least twice that I know of, in in excruciatingly detail.
BE corps certification is not designed for enterprises the skill
of Unilever. We would need to create an entire industry
(45:40):
of certification around the company, every operation in a hundred
and ninety countries, multiple divisions, multiple brands, and it would
cost an absolute fortune. And it is It is doable.
It's just about doable. I would love for you Deliver
to be a B corp. But the bragging right, so
becoming a B carp are not commensurate with the cost
(46:04):
an effort that would be required to achieve that certification. Yeah,
now that completely resonate. Okay, so two questions to wrap up.
First of all, what have I not asked you about
that you think that our listeners should know about you
or about you know Leaver? You know I asked you know.
The share price has been languishing a little bit for
the last couple of years, and I I think, in
(46:27):
the spirit of the name of the podcast, all these
all these fine words that I've been saying about all
the wonderful things that we're doing in the world, Well,
why you know, shouldn't it be more visible in the
share price? That's the that's the really sting or tough question.
And the short answer is we've surprised the stock market
(46:48):
three times in the last three years. We under undergrew
what we said we would do in two thousand nineteen.
So in December two thousand nineteen we announced the sales
warning and that called the market off guard. In the
first year of COVID twenty are operating margin went backwards
by sixty basis points when the market wasn't expecting it.
And then the third one, I think is a little harsh.
(47:09):
We were the first company at the gate um to
call attention to inflationary pressures that were coming in mid
twenty and so we are well exactly, but the one
day dropping our share price on those three days explains
the entire discount to our sector and what it says.
It's great to be sustainable, what's great to a super
(47:31):
year of growth last year, but in our particular sector,
the sort of predictability and reliability of performance really matters
as well, and there's I make no excuse for that.
There's no reason why UNI leavers shouldn't deliver what we
call four G growth, which is consistent growth, competitive growth,
profitable growth, and responsible growth. And that's still in the
(47:53):
to do list. And just to follow up to that,
you discontinued quarterly reporting a while ago, a decade ago.
Does that help or or hurt? Yeah? When we say
we dis continued quarterly reporting, kind of so we still
report our top line and our growth every quarter, and
(48:13):
we report our fool p and now the bottom line
semi annually, so at the mid year. So really what
we stopped doing was reporting profits at the end of
Q one and the end of Q three. And I
would say it's materially helpful. It gives us flexibility to
invest in the business within a half rather than constrained
(48:35):
by the particular phasing that a quarter would demand. I
think it's a good thing, but it's not all the
way to you know, we abandoned quarterly reporting, I don't
think right. Okay, now, thank you for the clarification on that.
I appreciate it. Okay, Allen on calling bs UM, we
have a question that we ask every guest So we
(48:55):
define BS as the gap between word indeed in the organization,
and we have a tool that we call the BS
scale where we rate organizations on that gap, zero being
the best zero gap between word indeed and a hundred
being the worst total bullshit. So, taking into consideration that
(49:15):
everything is a journey, where would you rate Unilever on
that scale today? That's interesting. So if it was the
gap between ambition and where we are today, uh, then
it's a high number. It's a high numbers, you know, sixty.
If it's the gap between what we say and what
we're really doing in the company, then it's quite a
(49:36):
low number because we are very transparent. No, I think
it's the latter. I think it's gap between what you
say you stand for and where what your intention truly is.
Then I would say, I think we are quite transparent,
and we report a lot, and there's not a huge
gap between what we say we're doing and what we
really are doing. So I'd give us, but there's obviously
(49:57):
some so I'd say, I don't know, live and in
a in a company of your scale, I just have
to say, I think that's extraordinarily low. So I'm very
inspired by what you're doing, and I want to thank
you for being on the show today. This has been great.
Does that mean you're not going to wrap up by
saying you're fool of sh it? Nope, you're off the hook,
(50:21):
not full of ship not but not on our scale. Okay,
not on our scale. Well, it's uh been a while
since we saw each other. Thank you very much for
having me on, and uh maybe we can follow it
up sometime and me meanwhile, look forward to that beer together.
Thanks for having me. I'd like to end the show
today by giving you a lever our official BS score.
(50:43):
Our scale goes from zero to a hundred. A zero
means zero gap between word and deed, and a hundred
means the gap is huge. Total BS Alan gave you
a lever between a twenty and five. Based on what
I've heard today, I'm going to agree and give him
a twenty. I see all kinds of promising signs that
(51:04):
this company is really trying, starting with leadership. The sheer
size of this company makes it much harder to live
up to their purpose, but it also means that when
they do meet their ambitious goals, the impacts are huge.
Alan is clearly passionate about getting things right, and his
enthusiasm informs every aspect of the business, driving real change.
(51:29):
The company is also quick to admit when it falls short,
and they're willing to acknowledge the problematic areas of their history,
which is why as time passes, I expect their score
to actually go down. But Alan's retirement announcement comes at
a time when the company is under intense pressure to
focus on short term financial results rather than on the
(51:52):
long term goal of building a sustainable global company. While
he's still at the helm, Alan is using unili purpose
to steer the ship, but we'll be keeping a close
eye on what happens once leadership actually changes. To weigh
in with your thoughts, visit our website Calling Bullshit Podcast
dot com. You'll be able to see where you know
(52:14):
leave our ranks on BS compared to the other companies
and organizations we feature on the show. And if you're
starting a purpose led business or you're thinking about beginning
the journey of transformation to become one, here are three
things that you can take away from this episode. One
set ambitious goals. As Alan pointed out, it's by setting
(52:38):
goals that at first seemed unachievable that real change happens
in an organization. The goal keeping him awake right now
is cutting the use of plastics by in one of
the largest package goods companies in the world. So what's yours? Two?
Your business strategy and your purpose are not separate things.
(53:01):
There are two aspects of one thing. The problem in
the world that you exist to solve. Your purpose is why.
Your business strategy is how, and when you get it right,
profitability is a natural outcome. Three. There is a timer
taking on businesses that don't make the shift to being
(53:22):
purpose led, and it's going off in about ten years,
maybe even less than that. Why Gen's annuals, they're voting
with their wallets for companies that are trying to solve
some of the big problems in the world. They will
decide what businesses thrive and what businesses fail in the future.
(53:42):
Don't wait to establish a relationship with them. Start now.
And if you had fun on this trip across the universe,
subscribe to the Calling Bullshit podcast on the I Heart
radio app, Apple Podcasts, or wherever you listen to people
speaking to your ears. And thanks to our production team,
(54:06):
Hannah Beal, Amanda Ginsburg Andy kim D s Moss, Hayley Pascalites,
Parker Silzer, Basil Soaper and me Jean Zulu. Calling Bullshit
was created by co Collective and is hosted by Me
Time Monte You thanks for listening.
Hey, folks, Tie here just a note before we get started.
The conversation in this episode was recorded before Uni Lever's
recent announcement that Alan Job will be retiring from UNI
Lever at the end of Okay, here's the show. Unless
(00:22):
you're a crystal clear in your mind why it makes
you a better business, how it will drive stronger performance,
don't start the journey because this is not CSR. This
is not some offset where you can buy a clean
conscience by donating to a charity or having a park
(00:42):
made next to your headquarters. Unless it sits at the
heart of your business model, driving revenue growth, taking out cost,
improving your employee proposition, don't do it. Welcome to calling Bullshit.
The podcast about Purpose, a swashing the gap between what
companies say they stand for and what they actually do,
(01:06):
and what they would need to change to practice what
they preach. I'm your host, Tie Ontogue, and I've spent
over a decade helping companies define what they stand for,
their purpose and then help them to use that purpose
to drive transformation throughout their business. In this special episode
a positive case study, we're doing a deep dive into
(01:28):
Unilever with their CEO, Alan job to find out how
a global company of such vast scale, with such a
complex history keeps purpose front and center. You may not
even have heard of Unilever, but I bet you've grown
(01:50):
up using a bunch of their products. Dove Soap, Lipped
and Ta Basiline, Ben and Jerry's, to name just a few.
Many of these brands are purpose led in their own right.
But what if the company that owns all of these
household brands committed to operating under a single purpose to
make sustainable living commonplace. What if they committed to net
(02:15):
zero carbon and regenerative farming practices, cut their use of
virgin plastics, and ensured fair wages for everyone up and
down their supply chains. Imagine the profound impact that could
have on the future of the planet. Unilever has imagined
that impact, and as the parent company to these famous
(02:37):
brands and hundreds of others, they're in the unique position
to bring that dream to life. But how do they
pull this off? It is such an ambitious project. They
have hundreds of thousands of employees, three point four billion
customers around the globe, and over a century of complex
(02:57):
history to grapple with. I had the opportunity to sit
down with their CEO, Alan Joke, for an honest conversation
about the opportunities and challenges that Unilever faces and how
he plans to help you. Leaver continue the journey into
a purpose driven and ever brighter future. But first let's
(03:23):
delve into Unilever's history. The story begins in nine century Holland,
when two butter making families, the Jurgen's and the Vandenburgh's,
turned their efforts toward a new product, Marjarine. Meanwhile, over
in England, William Lever was also making changes at his
(03:45):
family business, Leaver Brothers. The resulting product, Sunlight Soap, was
so popular that soon they were making four dred and
fifty tons of it every week. Consider progressive for his time,
William Lever saw his company as more than just a
profit engine. His mission was to make cleanliness commonplace and
(04:08):
bring hygiene and thereby help to the masses. He wanted
to do well by doing good, to grow his company
and simultaneously, where's the standard of living for both his
customers and his employees. With prosperity sharing as his guiding principle,
(04:28):
he built a village called Ports Sunlight, where he offered
affordable housing and other amenities to factory workers. It was here,
at a time when benefits were practically unheard of, that
he introduced innovations like sick leave, paid time off, and pensions.
After years of common interests and even some collaboration behind
(04:52):
the scenes, the Yurgans and the Vandenburg's officially combined their
businesses in nineteen twenty seven to create Margarine UNI. Two
years later, Lever Brothers joined the fold in what The
Economist called one of the biggest industrial amalgamations in European history.
In simpler terms, Unilever was born. Over the next half century,
(05:19):
Unilever grew a lot. They continued to acquire and launch
new companies and brands, and by the nineteen eighties they'd
become the world's twenty six largest corporation. But through the
eyes of someone looking back from the company engaged in
some fairly questionable activities During this period of rapid expansion.
(05:43):
There were some controversial marketing campaigns for skin lightning products
in the global South, and human rights violations like child labor.
Over the years, parts of Unilever had definitely lost touch
with ports. Sunlight's founding principle of doing well by doing good.
In the late ninety nineties, with their ideals off track
(06:06):
and growth stalled, the business was in decline and in
they took dramatic action and cut three quarters of their
nearly six hundred brands. But even after shifting focus to
their most successful brands, the next decade really only saw
(06:28):
some modest returns. By the time uni Lever was hit
by the two thousand and eight recession, it was clear
that the only way forward was to get a truly
fresh perspective. The most important thing is that you pursue
your your purpose, whatever you feel strong about. Figure out
(06:49):
where you want to make the difference. That's the first
thing you need to do. That's Paul Pullman. He had
steered Unilever's rival Nestle through this financial storm as their
cf OH. This caught the attention of the head haunchos
at Unilever, and instead of hiring from within, they decided
to poach Paul Pullman in two thousand and nine. He
(07:11):
became Unilever's new CEO. First order of business get everybody
on board with his ambitious vision. Because I came in
from the outside. Some people felt that the Troy and
Horse was let into the company. And I discovered very
early on that it was for me to prove that
I could be part of the team, instead of them
(07:32):
to prove that they could be part of my team.
To do this, he knew he needed a better understanding
of Unilever's history, so he turned his attention to the
company archives and started digging. And we came to some
enormous values, and one of them is certainly doing well
by doing good. He had unearthed those same principles upon
(07:52):
which William Lever built Ports Sunlight. We took all that
strength and said, can we not turn that into a
business model? That is that's what they needed right now.
Palman implemented what he called the Sustainable Living Plan, which
aligned their global business strategy with the well being of employees, customers,
and the environment. They also started acquiring purpose led businesses
(08:17):
like Seventh Generation and Ben and Jerry's, and Paul brought
a new approach to Unilever's finances as well, signaling to
investors that if they weren't interested in sustainable, long term
value creation, that they should take their money elsewhere. If
you want to solve all these issues like climate chance
(08:38):
or food security, or poverty alleviation, or access to clean
drinking water or education. You cannot be victim to the
quarterly reporting. So you need different business models. And you know,
even when I became CEO, we stopped doing quarterly reporting,
We stopped giving guidance. We moved our compensation systems to
the long term. And make no mistake, Palman said ambitious
(08:59):
financials for the company as well. He declared that he
expected the company to double revenue while cutting its environmental
impact in half. To put that in perspective, Unilever had
three hundred factories across the world, four hundred brands, and
two point five billion customers, no small task. When Pullman
(09:23):
stepped down in January, he generated a two hundred and
nine percent shareholder return. He had expanded Unilever's global market share,
and he had become a purpose driven business legend. And
the story continues with our guests today. Paul Pullman's handpicked
(09:45):
successor and current Unilever CEO, Alan Joe. As you'll hear,
Alan is a warm, engaging leader who has worked in
almost every part of Unilever's business around the world. I
was fortunate enough to work with him as a client
when he was a senior marketer at UNI Lever and
I was an advertising creative director. We sat down to
(10:07):
discuss his approach to sustainability and how he keeps purpose
front and center while he runs a global corporation with
real integrity. That conversation right after the break, I am
(10:27):
extremely excited to introduce the CEO of UNI Leaver, Alan
Job Alan, welcome to calling bullshit. Hi Tai, thanks for
having me. It's great to be here, Nice to see
you after a while. Great to see you too. And
to start out with, I thought it would be great
to just have you tell us a little bit about
yourself and your background. Sure you can maybe tell from
(10:50):
my accent that I'm Scottish by birth, grew up in Glasgow,
went to University in Edinburgh and then joined Unilever Streets.
After university um and the first five years in London,
then fourteen years in the United States and thirteen years
in Asia. My family and wife and I have lived
for four years in Bangkok, five years in Shanghai and
(11:10):
four years in Singapore. Came back to the UK just
four years ago. So after twenty seven years away, I'm
a cultural stranger in my own country. A lot of
my a lot of my time in marketing UM, but
then progressed into general management and plenty of interests outside
of work. I certainly don't live to work. But when
you became CEO, you took over from Paul Paulman, who
(11:35):
is the person who put Unilever on the path to
really being a purpose led organization. What has that transition
been like for you taking the range yourself and also
taking over for Paul. Well, in terms of the continuity
of our sort of sustainability journey, it was relatively straightforward
for a couple of reasons. First of all, it's not
(11:57):
a ten year old thing. It's a hundred and ten
year old thing. Our various founders and Uni Leaver are
believed in running the business on a sustainable or purposeful way.
This guy, William Lever, who found our Leaver Brothers, one
of our antecedent companies, did all kinds of cool things.
He built a model village to house his workers when
(12:17):
his workers went off to fight in the First World War.
Not only did he hold their jobs open for them,
he paid their families their wages while they were all fighting. Um.
He kind of invented pensions. He had an elaborate system
to create libraries for those workers children, and he back
in the eighties to find the mission of the firm
as to make cleanliness commonplace and lessen the load for women.
(12:40):
So he was a very early on to social issues
and public health issues. Now, over the history of the company,
we have generally tried to do the right thing as
a business, often after exploring every other possible alternative, and
sort of Paul snift out this DNA and did an
utterly brilliant job putting it back in the center of
our business strategy and our culture. So it's something that
(13:03):
was very easy to carry forward. Also, frankly, I believe
strongly in in this mission as well, and maybe that's
partly why he was an enthusiastic supporter of me coming
into the role. But it's not been a difficult thing
to pick it up and run with it. Yeah, And
so it's fascinating that William Lever is kind of an
O G conscious capitalist. I would say it sounds like
(13:24):
in some ways he is. There is dark sides to
his history as well. So we had we had palmwell
plantations in the Congo where we suspect strongly that there
was a form of forced labor um. In fact, we've
commissioned an academic study with the University of Liverpool to
get to the bottom of that. We don't want that
(13:44):
to be a secret. If something bad went on back there,
then we want to know all about it. But the
vast majority of Leavers activities were holy positive. In fact,
I found a brochure recently where for the first football
match between Lever brother there's Port Sunlight football team versus
Everton FC. Every Everton one one I have to admit. Okay,
(14:08):
So pivoting to Unilever today, how do you articulate Unilever's purpose. Yeah,
we do articulate the purpose of the company as being
to make sustainable living commonplace. We want to be a
force for good as a company that, through our operations
and through our brands, we help people to live more
sustainable lives. And so I think if you ask most
(14:30):
people in Unilever they would be able to see, Yeah,
the purpose of the company is to make sustainable living commonplace.
It's accompanied by a very clear vision which is we
want to be the global leader and sustainable business and
we want to prove that it drives better financial outcomes. Yeah,
and I'm sure we'll get into this in a second,
but that sits right alongside our purpose, absolutely, And and
(14:51):
how would you characterize the dominant system that Unilever is
trying to improve upon with that purpose? Yeah, I think
this comes back to shareholder capitalism versus stakeholder capitalism. And
I would love to go to my grave having proven
two things. I'd first of all, like to prove that
there is no trade off between responsible, purposeful, sustainable business
(15:17):
and strong financial performance. Any time we get into discussion
of well, how do you trade off between the financial
performance of the company and the sustainability mission that you're on,
then we're doomed because ultimately the need to deliver returns
as a business will prevail. And so I want to
prove that sustainable business is a pathway to better financial performance.
(15:39):
And the second thing I'd love to prove is that
we have multiple stakeholders. They're all important, but I think
there's a priority of sequence. If we look after our people,
the employees of Unilever, they'll look after the business. They
will be the people who will make sure that the
actions we take don't have an adverse effect on the
planet or society. And in doing so they will ensure
(16:01):
that our shareholders are are better rewarded. So those are
the two dominant systems I'd love to have an impact on.
One is this stakeholder model which ends up rewarding shareholders better.
And the other is scorching this notion that there's a
trade off between sustainable business and financial performance. Yeah, I
love that, And I wonder if you could talk a
little bit about the compass, which is the name for
(16:23):
your business strategy. Can you explain what the compass is
and how it works. Sure. Look, four years ago, we
had two documents in the company. We had our business
strategy and we had our sustainability strategy, and we felt
that didn't make a lot of sense, and so we
rewrote our business strategy and as five pretty simple elements
(16:46):
to it, which is some choices that we've made around
high growth spaces we want to take our portfolio into,
like hygiene and skincare and prestige beauty. We've called out
the US, China and India as particularly important markets to
win in. We've called out e commerce as a must
win channel, and we've talked about the organization and culture
(17:07):
that we want to build. But the first of the
first choice is win with our brands as a force
for good, powered by purpose and innovation. And then dropping
immediately below that are three areas where we think we
can bring our commitment to sustainable living to life. One
is improving the health of the planet and others improving
(17:29):
people's health and well being. And the third is contributing
to a fair or more socially inclusive world. And again
underneath that, there are thirty eight specific commitments that we've
made so that the two sides of the coin, our
sustainability strategy and our business strategy are fully fully integrated.
And are all of Unilever's brands. Do all of them
(17:51):
have a defined purpose? Or are you somewhere along the
journey of defining all of those We're on the journey.
We're on a journey. Let me first will see how
we define it? Yeah, please, you'll be familiar with the
idea of continuous tracking, looking at our brands and the
competitor brands and the attributes and how we score on
those attributes in the eyes of consumers. Well, we now
(18:13):
have a standard question and for all categories in all countries,
where we ask, does this brand make a positive contribution
to society or the planet. And when in that country
a consumer scores our brands as well above average on
an index, then we say, okay, that brand in that
(18:35):
country is a purposeful brand. And at the moment, to
be precise, our turnover now comes from brands that the
consumer sets are doing something a little bit more for
society of the planet. Some of our brands are almost
entirely seen that way, like Dove or Ben and Jerry's
and others are are finding their way. You can't really
(18:58):
superimpose a purpose. Most of our brand's purposes we find
by excavating archaeology of their DNA and where they've come from.
It's very hard to sort of suddenly force fit in
terms of the journey that you're on. Is the goal
to be a hundred percent at some point? Yeah, I
suppose it's an ambition. It happens a little bit organically.
And the reason I say that is our brands that
(19:23):
score highly on purpose are growing twice as fast access
a little as close to three times as fast now
as the rest of the portfolio, and so there's a
very natural migration of our portfolio into that space. So, yeah,
there will be some brands that never quite get there.
But so long as you know, six of our brands
are are scoring highly on purpose and are growing three
(19:45):
times faster than the rest of the portfolio. Organically, the
vast majority of our portfolio will soon be seen as
more purposeful by the consumer. Right. I was listening to
an interview of you at a recent Goldman Sachs conference
where you said that we found that setting audacious goals
goals were not sure how we're going to meet is
(20:07):
a very effective way of driving change in our company,
and I just wondered if you could talk a little
bit about that, For instance, how do you set those goals? Yeah,
probably the easiest way to answer this is not in
the abstract, but with a specific challenge, which was we
were looking at our decarbonization of the company, and let
(20:28):
me maybe just set it up by saying, we're not
an n G O TI, We're a business. We're not
doing this because of the moral imperative. We're doing because
we think it makes us a stronger business with it
will have a more successful long term future. UM and
there are dimensions of the business case around growth. I've
touched on. Some of our brands are growing faster when
(20:50):
they embrace sustainability. There's a dimension around cost. We actually
think it should take cost out the organization. Um it
lures risk. A planet underwater or on fire is not
a place to be a consumer products company. But on
this point of cost, there will be a price on carbon.
So today carbon is treated as a free good and
there's very few places where there's attacks or a price
(21:11):
on carbon of any sort. There absolutely will be so
both because we care about climate change, but also because
it makes good economic sense to reduce the carbon footprint
of Unilever. We wanted to lay out our plan to
decarbonized Unilever, and I suggested to our board that we
put it to shareholder vote. And this caused a few
(21:31):
sweaty moments in in our board meeting because we were
worried that some of our shareholders might say, what, you're
going far too far, and others might say, well, you're
not going far enough. But we wrote this carbon Transition
Action Plan and we put it to a shareholder vote
last May at our a g M. And now, coming
to actually answer your question, it has some big hairy
(21:52):
goals in there, one of which is to be net
zero as a company by twenty nine. Now we've got
milestones along the way. So for instance, we want reduction
and scope one and two carbon by we want a
seventy percent reduction in all emissions by but that endpoint
(22:13):
target and net zero by nine, we have no clue
how we're going to get there, and it will require innovation.
It will probably require reshaping of our portfolio. It will
require us to take as much carbon as we can
out of our operations. It will require us to advocate
for a decarbonization of electrical grids around the world, because
(22:34):
the biggest carbon footprint that you on ever has is
the energy that's used in heating the water that's used
to wash your skin, wash your hair, wash your clothes,
cook your food. That's our single biggest footprints. So and
only when we've done all that, we will probably need
to do a little bit of offsetting at the end.
So that would be an example of where we've set
(22:55):
a goal with no idea how we're going to get there.
But I can tell you most people in the company
of a feeling that it's the right thing to do,
and that by setting the goog will start taking the
actions that we need to take. I love that the
thing that I think that's really interesting about that is
that in traditional shareholder capitalism, companies have been conditioned to
(23:15):
externalize cost. It would be rare of a company, i think,
to actually think about the carbon footprint of heating the
water that people use to bathe as a part of
your responsibility. It's really inspiring that you think about it
that way. Well, two footnotes. We were the first company
in the world to put our carbon transition plan, our
(23:36):
climate Transition Action Plan to shareholder vote. Many have now followed,
so we're delighted to see many people now writing their plans.
And the second footnote is that it squeaked through the
shareholder vote with six shareholder support. And actually that's a
great statistics to understand that the capital markets are starting
to care about these types of matters. Absolutely, that's really positive.
(24:02):
You've already made tremendous strides as a company over the
last decade, and as you look at the challenges that
lie ahead, the things that you want to take on.
What are those challenges. Well, there are lots of problems
in the world right now, but our view is that
(24:22):
there are three that are bigger than the rest. The
first is the climate emergency that the impact of climate
change on everything is hard to overstate. It's going to
be a major major problem for the world. Even if
we do the best possible job that we can and
managed to get to one and a half degrees above
(24:43):
pre industrial levels, it's still going to cause a major
failure of the world food system. It's going to cause
massive migration from hard hit areas, so we better be
dealing with that. The second, and it's related as a
degradation and loss of nature combination of climate change and
us chopping down large swathes of for us putting in
monocrop agriculture, smashing by diversity. And then the third is
(25:07):
the dramatic increases in inequality that we're seeing country by country. Interestingly,
because China has lifted hundreds of millions of people out
of poverty, net inequality in the world is not going up,
but if you look at it on a country by
country level, the tremendous situation inequality and it's getting worse.
And those are three of the things that we hope
(25:31):
our business can play a role in addressing. A lot
of what Unilever uses as input materials are agricultural raw materials,
not just in our foods business, but much of what
we use in our personal care products like soap uses
agricultural raw materials. And what what we've said is that
by twenty thirty we want a hundred percent of our
(25:53):
agricultural raw materials to come from regenerative agriculture, where the
farming practices leave the land in better place. Let me
give you a really simple example. We buy soybean oil
that's grown in the US and uh, a soy field
generates abouts of carbon par acre. If you plant cover crops,
(26:16):
so low rise plants that can be harvested in amongst
the soy that's being farmed, that reduces the carbon output
of that acre by five kilograms, So it goes from
three of carbon emissions to a hundred and fifty ms
of carbon sequestration. That would be an example of regenerative
(26:40):
agricultural practices. We can maybe have a chat about palm oils,
material we use a lot of and it's a demonized material,
but actually I'd like to make the case for palm
oil at some point. Yeah, well, let's let's talk about
that now. I no palm oil was mentioned in the
context of the history of Unilever in the Congo, so
(27:00):
it's long been an ingredient in many of your products.
Where does UNI ever stand with palm oil today? Yeah,
there have been horrible things done to nature and the
animals that live in virgin forests through the clearing of
forests to grow palma. It's shocking. Actually, if you fly
over parts of Malaysia, you can see these huge parts
(27:22):
of the country that have just been cleared and replaced
by palm plantations. However, palm is an exceptionally productive material,
and if you were to try and replace the palm
oil that is used to make actually some very healthy
foods and a lot of things like soap and other
types of surfactants with rape seed or soy, it would
(27:44):
require eight times the acreage. So here's our view, where
are we to shift away from palm? We would end
up destroying large parts of the world with crops that
need more acreage. And there is perfectly sustainable ways of
growing palm right now where you use much less fertilizer,
where you don't clear virgin land. Instead of using pesticides,
(28:07):
we introduced owls onto the palm plantations, and the owls
keep the rodent population down, which is a sort of
romantic notion. But what Interestingly, what it requires is technology.
It needs real time geo mapping coupled with cell phone
tracking of truck drivers, coupled with some advanced AI technology.
(28:31):
And we are very confident now that something like of
our palm comes from certifiably sustainable planting. That last two
or that last one or two percent is we're working hard,
spending a lot of money on figuring out how do
we get that out of our supply chain. So I
touched a bit there on um the climate crisis and
(28:54):
some of the things we're doing, some of things we're
doing on nature and the degradation of nature. And we've
got a lot of programs running. But I think one
that we're very proud of is there's a concept of
a fair living wage. It's more than a minimum wage.
It's enough money that a family of four could feed, clothes, house,
educate and transport themselves. And Unilever, of course pays a
(29:18):
fair living wage already to anyone working in our business.
But that's only a hundred and fifty thou people. There's
about five million people in our supply chain. And what
we've said is that by t anyone who's not able
to prove they're paying a fair living wage to their
employees will not be a supplier to Unilever, and that
(29:40):
we think is the single biggest redistributive action that we
can take to try and address inequality through our own operations.
I love that once again, just most businesses don't think
about the world that way. And obviously I agree with you.
Like the fact that you're getting ahead of it is great,
but you're getting ahead of it because it's better business
(30:00):
that are ultimately operating in an unsustainable manner. Put the
time horizon on your survival essentially as a company. Yeah,
you know, we've got a pretty good feel for what
that time horizon is and it's because of different attitudes
amongst different age cohorts in society. Yes, so baby boomers
(30:21):
at least are honest. They don't really claim that they
change their brand choices according to sustainability considerations. I I
just creep into gen X and we're worse. We say
that we care about sustainability, but don't actually modify our
purchasing behavior, So we're dishonest. Gen Y millennials to make
gross simplifications, Millennials care about sustainability but are not prepared
(30:46):
to pay more and won't accept it if the product
performs more poorly as a consequence, jensennials the kind of
next generation consummate cup coming into the consumption classes. Practically
the only thing driving and choice is the values of
the brand and the values of the company behind the brand.
And so this is simply about relevance for the future.
(31:08):
And if you want to be a brand that's still
a company, that's still a healthy, successful, thriving company ten
twenty thirty years from now, you better be modifying your
business practices in a way that are acceptable to the
gen's annials that are coming through the population right now.
It's so important. In fact, we're called calling bullshit because
(31:30):
such a huge number of young people in particular are
just calling BS on shareholder capitalism. Um. The entire generation
of consumers is calling BS. And it's a clarion call.
Right If you want to run a business, if you
want to sell a product in the future, you had
better pay attention to this. So I could not agree more.
And and when I get challenged about, hey, why are
(31:51):
you so obsessed to putting purpose in your brands? You
know you some sort of woke capitalist, the answer is hell, no,
I just want to make sure that our brands remain
real event for the generations that are coming through into
society today. Yeah, exactly. Okay, So I'd love to pivot
again and talk a little bit about your leadership and
(32:12):
purpose led business. One of the things that I really
believe is that no company is is perfect, That being
purpose led is a journey, right, and and every company
is somewhere along that timeline. First of all, do you
agree with that? You know, I mentioned earlier that we've
we've got these thirty eight specific targets and commitments that
(32:35):
sit in our compass. Our executive team looks at progress
on those every quarter, and in the last review, which
was a couple of weeks ago, all of those thirty
eight six were green, most of the rest were read.
And so so we are a massively a work in progress.
And yeah, I guess it goes with setting somewhat stretching ambitions.
(32:58):
But we've got so much hard work ahead of is
it's a little daunting that last two of palm oil
that we're not sure is sustainable. It's going to take
tons of heart. We're gonna have to co invent technology
with Microsoft to fix that. I'll tell you one that's
really haunting me at the moment is our plastics commitment.
We've said that by which is just around the corner,
(33:20):
we will have reduced our use of virgin plastic by
by using recycled material and sums through an absolute reduction
or replacement with other materials like aluminium or would even
can you believe wouldn't there you go? So I'm kind
of trembling knees about this plastic commitment because there's a
(33:43):
worldwide shortage of recycled plastic. The premium for recycled plastic
over virgin material, perversely is rising. And so that's an
example where tie we've got our work cut out. I'm
not exactly sure how we'll get there, but we're very
much a work in progress. So that that leads to
another question, which is do you think that leading a
(34:05):
purpose led business is harder? For instance, you have so
many more stakeholders to think about, then the CEO of
a traditional shareholder led business, is it is the job harder?
I don't think so. Really, No, tell me a business
leader who doesn't care about her employees, her customers, are consumers,
her business partners, societies that you're doing business and the
(34:28):
planet and I think I'll be able to show you
a business leader that's not getting good results, so it
doesn't deserve to get good results. So it's not unnatural
to care for those different stakeholders and make sure their
interests are being looked after. And if you do it
with deep conviction that the shareholder will be better rewarded
at the end of the day. Now, we're also working
(34:49):
progress on that. By the way, our financial performance needs
to step up to prove this model. But we've we've
got a little bit of momentum. We've just did our
fastest year of growth for nine years. Yeah, you've done
well in the US here, things are, things are coming along.
We have a theory of change, a model that we
use on pretty much all the big issues that we're
trying to address, whether that's climate or our gender or inequality.
(35:15):
Let me use gender as an example. Think of four
concentric rings, and that the innermost ring is our own operations.
So my job one is to make sure that there's
proper gender representation inside Unilever. And we've gone over the
last eight years from a position where thirty eight percent
of our managers were women to now of our managers
(35:37):
are women. That we've got nine non execs on our board,
five women, four men, so we're okay on that. Then
the next ring is what we call our value chain.
Are we making sure that there's good gender representation in
our suppliers, in our distributors, and in some of the
business models that we involve third parties in. That's the
next impact that we can have. Then we go to
(35:59):
the next level when we think about the impact that
our brands can have. We go from reaching millions of
people to tens of millions of people. When Dove gets
busy helping girls not carry unrealistic images of beauty, or
when sunset, it's creating opportunities for women to set up
their own hair salons. And then the outer most ring
(36:19):
is what we call advocacy, and that's where partnerships come
in and we work with civil society, government, academia to
try and change the system. And I think those first
three rings most business leaders have to deal with. We
have an unusually active advocacy program and that is a
(36:39):
little bit of extra work. In fact, I just came
from a board meeting of the World Business Council for
Sustainable Development. But you know what, it's very rewarding and
worthwhile work. So it's a little bit of extra work,
but not really, but you love it. Yeah, it's satisfying,
feeds the soul. So are there other leaders of purpose
(37:00):
had businesses that particularly inspire you? Oh? Lots, yes, lots
and lots. To me, the iconic one is Patagonia, and
you know of Asinar and everything that he has set
up there and which has been carried on by his successors.
And there's a survey comes out every year of opinion
leaders and their views on companies and whether sustainabilities at
(37:21):
the heart of their strategy. I'm embarrassed by the fact
that you don Leaver just for the last few years
scored number one in Patagonia number two, because I don't
think we deserve it at all compared with the deep
Remember if are discontinued his his metal petons, which was
the core product in his business, because he felt they
were damaging the very rock that he was so lovely.
(37:43):
We're leaving him stuck in the rock, and he exactly.
So I really admire almost everything that they keep reinventing themselves.
You're making fleeces out of PT bottles, encouraging people not
to buy a new jacket, come and get it repaired.
Their sourcing policies and they're just fantastic. Another one is, yes,
we're broadened. Who runs Ikea? Ikea have done such deep
(38:05):
work on understanding the climate and social footprint or so
the planetary and social footprint of their business, their supply chain,
their stores. And I'll give you one more um that
you may never have heard of. A food company that
grows fruit and vegetables around the world called Alam. They
were founded by a guy called Sonny Vergas. Sonny lives
(38:27):
in Singapore, and he has built one of the world's
leading agricultural production companies, and he's done it with extraordinary
attention to purpose and sustainability. So there's one, and then,
of course there's a whole lot of other lists, but
there's three that I particularly admire. Today there are so
(38:47):
many more purpose led businesses that actually started with a purpose.
So a lot of young companies begin that way, but
a lot of older companies sounds like unlike Unilever, didn't
begin that way and are now trying to figure out
how to make that transition. What advice would you have
for other CEOs who are beginning that purpose of the journey.
(39:11):
The first point I would make is entirely predictable, which is,
unless you're crystal clear in your mind why it makes
you a better business, how it will drive stronger performance,
don't start the journey because this is not CSR. This
is not some offset where you can buy a clean
(39:32):
conscience by donating to a charity or or having a
park made a part built next to your headquarters. Unless
it sits at the heart of your business model, driving
revenue growth, taking out cost, improving your employee proposition, don't
do it because then it's not sustainable. And the second
is you don't have to go from zero to perfect,
(39:54):
just get started with a few inistas. And it's so
rewarding economically and emotionally. It's such a strong thing to
build a company culture around that. I believe it will
snowball and catch momentum. And you know, it has to
be authentic, but it doesn't have to be perfect. Let's
use that as a pivot too, company culture, because it's
(40:15):
such a huge part of it. How would you describe
the Unilever company culture? We want our company to be human,
to be purposeful, and to be accountable. You don't even
does have a culture where we treat each other with respect.
If you get the job done, but you're an asshole
and you leave a kind of a trail of people
(40:36):
who would love to need afterwards, right exactly, then I
think our company would tissue reject you like a badly
matched Oregon quicker than the average company. So being human
and with that comes you know a lot of friendships.
Not too hierarchical. I mean every company is get some hierarchic.
We're not too hierarchical. Um, So that's the human The
(40:57):
second is purposeful. We believe that, Um, this is a
bit slogany, but we do believe that brands with purpose growth,
that companies with purpose last, and that people with purpose thrive.
And we've putting out fifty thou people through purpose workshops
to try and understand is the thing that makes them
take well aligned with the work that they're doing it
(41:19):
you'll leave. And when people find that alignment, my goodness,
it cements their commitment to the company that you can
see job satisfaction scores that are through the roof. And
so that's the purposeful part of our culture, more human,
more purposeful. And then the accountable bit is we want
people who are prepared to take risks. We want people
who are prepared to have a go for people who
(41:40):
understand that, you know, poor performance plus a good excuse
is still poor performance. And and those are the kind
of three ways we describe our culture. I think it's
one thing it doesn't capture, which is we are extraordinarily international.
There is no dominant nationality in our business. And I
love that. I'm sort of looking out my office here
and I can see a melting pot of different nationalities.
(42:03):
And typically a French company would be full of French people,
and American company full of Americans and so on. Truly global.
And are there certain things that you look for in
a new employee? Is there a Unilever type? Over the
years I've been trained on all these different competency frameworks
and what to look for a reference to that have
(42:23):
stuck with me. One is very simple. It's that people
are successful in our company tend to be strong masters
of their inner game, so that they're very self aware,
they control their emotions reasonably well, and they operate out
of a sense of service and purpose. And that is
a precursor to mastering your outer game, which is your
(42:45):
expressed leadership, your drive for business performance, your passion for
consumers and customers. I think it's an interesting concept that
you have an inner game in an outer game and
both need to be performing at a high level for
for someone to do well. The simple kind of Alan
Joke criteria after thirty odd years of kindiring people is
(43:06):
I want people who are are smart. Uh, got a
bit of EQ and a bit of i Q. Who
are quite driven. They've got they can show that they
get around obstacles. And the third is that they're nice,
kind people that other people want to be around. And
I could just think of my kind of leadership team.
They are all bright, they are all driven, and they
(43:27):
are all someone you'd want to appear with. Yeah. Yeah.
One of the criteria I use is if I were
stuck in an airport with this person for an unexpectedly
long period of time, would that be a good thing
or a bad thing? Exactly? Uh. One of the things
that you touched on that I'd love to just talk
about a little bit more is talent and the effect
(43:51):
that being purpose lad has on your ability to attract talent. Yeah.
We measure our attractive us as an employer for undergrads
coming out of university in h forty four countries around
the world. In forty two of them were the employer
of choice in our sector, and ten years ago that
(44:14):
was seventeen. So we have no problem attracting really high
quality graduates coming out of university. In fact, we get
two million job applications a year across the company. But
I think what's maybe more interesting is we've been able
to attract some really senior executives and indeed board members
(44:35):
who would have a pick of the places they could work.
And the universal reason is because they want to understand
or be part of a company um that is operating
in a responsible fashion. Whether you call it purposeful or
responsible or sustainable, it's the same threat that is acting
and to attract senior and junior folks, and we've got
(44:56):
really hard data on this guy. I was surprised to
hear that we're the third most followed company on the
world on LinkedIn, after Apple and Google. You know, a
sleepy old soap maker. Not bad, very cool. Okay, I
have a couple of questions that I want to ask
you to wrap up. I'm just curious about this. You've
acquired a number of certified B corps over the years,
(45:18):
I think seven or eight of them, and I just
wondered if there were any plans to become a B
corp at the group level. Yeah, we've studied this at
least twice that I know of, in in excruciatingly detail.
BE corps certification is not designed for enterprises the skill
of Unilever. We would need to create an entire industry
(45:40):
of certification around the company, every operation in a hundred
and ninety countries, multiple divisions, multiple brands, and it would
cost an absolute fortune. And it is It is doable.
It's just about doable. I would love for you Deliver
to be a B corp. But the bragging right, so
becoming a B carp are not commensurate with the cost
(46:04):
an effort that would be required to achieve that certification. Yeah,
now that completely resonate. Okay, so two questions to wrap up.
First of all, what have I not asked you about
that you think that our listeners should know about you
or about you know Leaver? You know I asked you know.
The share price has been languishing a little bit for
the last couple of years, and I I think, in
(46:27):
the spirit of the name of the podcast, all these
all these fine words that I've been saying about all
the wonderful things that we're doing in the world, Well,
why you know, shouldn't it be more visible in the
share price? That's the that's the really sting or tough question.
And the short answer is we've surprised the stock market
(46:48):
three times in the last three years. We under undergrew
what we said we would do in two thousand nineteen.
So in December two thousand nineteen we announced the sales
warning and that called the market off guard. In the
first year of COVID twenty are operating margin went backwards
by sixty basis points when the market wasn't expecting it.
And then the third one, I think is a little harsh.
(47:09):
We were the first company at the gate um to
call attention to inflationary pressures that were coming in mid
twenty and so we are well exactly, but the one
day dropping our share price on those three days explains
the entire discount to our sector and what it says.
It's great to be sustainable, what's great to a super
(47:31):
year of growth last year, but in our particular sector,
the sort of predictability and reliability of performance really matters
as well, and there's I make no excuse for that.
There's no reason why UNI leavers shouldn't deliver what we
call four G growth, which is consistent growth, competitive growth,
profitable growth, and responsible growth. And that's still in the
(47:53):
to do list. And just to follow up to that,
you discontinued quarterly reporting a while ago, a decade ago.
Does that help or or hurt? Yeah? When we say
we dis continued quarterly reporting, kind of so we still
report our top line and our growth every quarter, and
(48:13):
we report our fool p and now the bottom line
semi annually, so at the mid year. So really what
we stopped doing was reporting profits at the end of
Q one and the end of Q three. And I
would say it's materially helpful. It gives us flexibility to
invest in the business within a half rather than constrained
(48:35):
by the particular phasing that a quarter would demand. I
think it's a good thing, but it's not all the
way to you know, we abandoned quarterly reporting, I don't
think right. Okay, now, thank you for the clarification on that.
I appreciate it. Okay, Allen on calling bs UM, we
have a question that we ask every guest So we
(48:55):
define BS as the gap between word indeed in the organization,
and we have a tool that we call the BS
scale where we rate organizations on that gap, zero being
the best zero gap between word indeed and a hundred
being the worst total bullshit. So, taking into consideration that
(49:15):
everything is a journey, where would you rate Unilever on
that scale today? That's interesting. So if it was the
gap between ambition and where we are today, uh, then
it's a high number. It's a high numbers, you know, sixty.
If it's the gap between what we say and what
we're really doing in the company, then it's quite a
(49:36):
low number because we are very transparent. No, I think
it's the latter. I think it's gap between what you
say you stand for and where what your intention truly is.
Then I would say, I think we are quite transparent,
and we report a lot, and there's not a huge
gap between what we say we're doing and what we
really are doing. So I'd give us, but there's obviously
(49:57):
some so I'd say, I don't know, live and in
a in a company of your scale, I just have
to say, I think that's extraordinarily low. So I'm very
inspired by what you're doing, and I want to thank
you for being on the show today. This has been great.
Does that mean you're not going to wrap up by
saying you're fool of sh it? Nope, you're off the hook,
(50:21):
not full of ship not but not on our scale. Okay,
not on our scale. Well, it's uh been a while
since we saw each other. Thank you very much for
having me on, and uh maybe we can follow it
up sometime and me meanwhile, look forward to that beer together.
Thanks for having me. I'd like to end the show
today by giving you a lever our official BS score.
(50:43):
Our scale goes from zero to a hundred. A zero
means zero gap between word and deed, and a hundred
means the gap is huge. Total BS Alan gave you
a lever between a twenty and five. Based on what
I've heard today, I'm going to agree and give him
a twenty. I see all kinds of promising signs that
(51:04):
this company is really trying, starting with leadership. The sheer
size of this company makes it much harder to live
up to their purpose, but it also means that when
they do meet their ambitious goals, the impacts are huge.
Alan is clearly passionate about getting things right, and his
enthusiasm informs every aspect of the business, driving real change.
(51:29):
The company is also quick to admit when it falls short,
and they're willing to acknowledge the problematic areas of their history,
which is why as time passes, I expect their score
to actually go down. But Alan's retirement announcement comes at
a time when the company is under intense pressure to
focus on short term financial results rather than on the
(51:52):
long term goal of building a sustainable global company. While
he's still at the helm, Alan is using unili purpose
to steer the ship, but we'll be keeping a close
eye on what happens once leadership actually changes. To weigh
in with your thoughts, visit our website Calling Bullshit Podcast
dot com. You'll be able to see where you know
(52:14):
leave our ranks on BS compared to the other companies
and organizations we feature on the show. And if you're
starting a purpose led business or you're thinking about beginning
the journey of transformation to become one, here are three
things that you can take away from this episode. One
set ambitious goals. As Alan pointed out, it's by setting
(52:38):
goals that at first seemed unachievable that real change happens
in an organization. The goal keeping him awake right now
is cutting the use of plastics by in one of
the largest package goods companies in the world. So what's yours? Two?
Your business strategy and your purpose are not separate things.
(53:01):
There are two aspects of one thing. The problem in
the world that you exist to solve. Your purpose is why.
Your business strategy is how, and when you get it right,
profitability is a natural outcome. Three. There is a timer
taking on businesses that don't make the shift to being
(53:22):
purpose led, and it's going off in about ten years,
maybe even less than that. Why Gen's annuals, they're voting
with their wallets for companies that are trying to solve
some of the big problems in the world. They will
decide what businesses thrive and what businesses fail in the future.
(53:42):
Don't wait to establish a relationship with them. Start now.
And if you had fun on this trip across the universe,
subscribe to the Calling Bullshit podcast on the I Heart
radio app, Apple Podcasts, or wherever you listen to people
speaking to your ears. And thanks to our production team,
(54:06):
Hannah Beal, Amanda Ginsburg Andy kim D s Moss, Hayley Pascalites,
Parker Silzer, Basil Soaper and me Jean Zulu. Calling Bullshit
was created by co Collective and is hosted by Me
Time Monte You thanks for listening.
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