Paul Pol­man: A ‘tem­pered rad­i­cal’ bows out

He wanted to usher in Unilever Sus­tain­able Liv­ing Plan, as a com­mer­cially vi­able propo­si­tion

The Hindu Business Line - - THINK - JAGDISH RATTANANI

Ear­lier this year, the Saïd Busi­ness School at Ox­ford asked its MBA stu­dents to pick a busi­ness that would best de­scribe their in­sti­tu­tion: “Are we the Mi­crosoft of Busi­ness Schools, are we the Gold­man Sachs or the Uber?”

The stu­dents con­cluded that their as­pi­ra­tion was to be the Unilever of Busi­ness Schools. The Saïd Dean re­counted that con­ver­sa­tion in the pres­ence of Paul Pol­man, an in­di­ca­tion of the kind of in­flu­ence the CEO of Unilever has had as the cham­pion of the triple bot­tom­line ap­proach that he pushed at his com­pany.

This year-end, Pol­man’s decade­long jour­ney at Unilever comes to an end amid cir­cum­stances that have pit­ted share­hold­ers against his at­tempt to sim­plify the cor­po­rate struc­ture and shift the head­quar­ters of the com­pany from Lon­don to Rot­ter­dam. A shift would have made it near-im­pos­si­ble for a hos­tile takeover at­tempt of the kind mounted last year by Kraft Heinz.

The move to shift failed and Pol­man de­cided to re­tire, a less-thanhappy exit for a leader who has stood out as one of the most im­por­tant voices on sus­tain­abil­ity in the thick of a highly com­pet­i­tive busi­ness. But how sus­tain­able is Pol­man’s way, which he ex­e­cuted through what he called the Unilever Sus­tain­able Liv­ing Plan that promised to cut the Unilever foot­print by half and grow the busi­ness at the same time.

He achieved this rather obliquely by de-em­pha­sis­ing the share price and re­fus­ing to give out quar­terly num­bers, build­ing on it with a sharp fo­cus on sus­tain­able ac­tions and none of the ruth­less cut­backs and ag­gres­sive takeovers that the Kraft Heinz Com­pany is known for.

Profit fo­cus

Yet, fund man­agers and share­hold­ers work with a dif­fer­ent agenda gov­erned more by higher prof­its and ris­ing stock prices in the near term, not nec­es­sar­ily the long-term view that Pol­man brought into fash­ion at Unilever.

De­spite grow­ing aware­ness of sus­tain­abil­ity, con­sump­tion pat­terns re­main un­sus­tain­able es­pe­cially in de­vel­oped mar­kets. Sus­tain­able vi­sion

Unilever re­ports that over half of all con­sumers al­ready buy or want to buy sus­tain­ably. Unilever’s sus­tain­able brands have out­per­formed the av­er­age growth rate over the last four years and in 2017 they de­liv­ered 70 per cent of turnover growth.

A lot of that turnover is in­creas­ingly com­ing from the emerg­ing mar­kets that are a mag­net for MNCs look­ing for the next wave of growth. As these mar­kets (in­clud­ing In­dia) push GDP growth, they of­fer op­por­tu­ni­ties un­avail­able in de­vel­oped economies. Unilever says 58 per cent of its busi­ness is in emerg­ing mar­kets. But com­pe­ti­tion is fierce. The op­por­tu­ni­ties and pres­sures have stretched the mean­ing of the term in­no­va­tion, lead­ing to some very un­sus­tain­able ideas.

For ex­am­ple, Unilever once mar­keted food prod­ucts in In­dia called “Amaze”, pro­mot­ing it as “brain food” for the “mental and phys­i­cal de­vel­op­ment of chil­dren” un­til the reg­u­la­tor stepped in. Fair & Lovely builds on the very un­sus­tain­able idea of sell­ing fair skin as de­sir­able.

One way to look at Pol­man’s work is to say there is only so much a large com­pany can do. It was bold for its time but not bold enough to fire up the mar­kets about a new set of con­sumers who de­mand from com­pa­nies a new or­der and new re­spect for the planet and her re­sources.

Pol­man pro­moted sus­tain­abil­ity and in re­turn took home a pack­age that re­port­edly amounted to £10.3 mil­lion, one of the rea­sons cited by the in­vestors un­happy with his per­for­mance. Such high pack­ages are among the rea­son that in­vestors have lost trust in big busi­ness. In that sense, Pol­man played with the new but was en­sconced in the old — a “tem­pered rad­i­cal” who, as the term goes, “iden­ti­fies with and is com­mit­ted to the or­gan­i­sa­tion, and is also com­mit­ted to a cause, com­mu­nity, or ide­ol­ogy that is fun­da­men­tally dif­fer­ent from, and pos­si­bly at odds with the dom­i­nant cul­ture of the or­gan­i­sa­tion.”

The next level of sus­tain­able busi­nesses will de­mand fun­da­men­tally dif­fer­ent mod­els that can work with and echo the de­mands of deep ecol­ogy, which in the words of authors Fritjof Capra and Pier Luisi “asks pro­found ques­tions about the very foun­da­tions of our mod­ern, sci­en­tific, in­dus­trial, growth-ori­ented, ma­te­ri­al­is­tic world­view and way of life.

The busi­ness model that cap­tures this spirit is a long way off. But when­ever it emerges, it will have Pol­man to thank as one of its early pi­o­neers, a leader who was bold enough to act and go on record: “We are at a turn­ing point. Only busi­nesses that help peo­ple and planet thrive will suc­ceed. We have to scale our im­pact through part­ner­ship, col­lab­o­ra­tion and trust.”

The writer is a jour­nal­ist and fac­ulty mem­ber at SPJIMR. Views are per­sonal. (Through The Bil­lion Press)


Paul Pol­man

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