|Captain Planet: an interview with Unilever CEO Paul Polman|
|Thursday, 31 May 2012|
Paul Polman isn’t afraid to shake things up. Since taking over as CEO of Unilever, in 2009, he has transformed the Anglo-Dutch multinational into one of the world’s most innovative corporations. He did away with earnings guidance and quarterly reporting, and tells hedge funds they aren’t welcome as investors. And last year he launched an ambitious plan to double revenue by 2020 while halving the company’s environmental impact.
If he succeeds, he could be a model for other CEOs. But if Unilever falters, he knows, the critics will call for his head. In this edited interview with Harvard Business Review's editor-in-chief, Adi Ignatius, Polman discusses the challenges of leading a socially driven mission while protecting his company’s core.
HBR: What motivated you to launch such an aggressive long-term plan?
We thought about some of the megatrends in the world, like the shift east in terms of population growth and the growing demand for the world’s resources. And we said, “Why don’t we develop a business model aimed at contributing to society and the environment instead of taking from them?”
How far up and down the supply chain are you willing to look?
We look at the entire life cycle — from field consumption to disposal — and we have about 50 measurable goals throughout our supply chain. We want to reduce our overall environmental footprint, to source our agricultural resources sustainably, and to help one billion people get access to nutrition and achieve well-being.
Is it really business’s role to take on these issues?
There are clear signs of stress around the world, coming from the “other 99%.” A billion people still go to bed hungry. A child dies of starvation every six seconds. Our form of capitalism has brought us far, but it hasn’t solved everything. We think that businesses that are responsible and actually make contributing to society a part of their business model will be successful.
But aren’t you putting your core business at risk by pursuing these commitments?
They are audacious objectives. Nobody has ever made such a public commitment, and nobody has ever achieved anything like this. Otherwise the world wouldn’t be facing these challenges. So, yes, they make us a bit uncomfortable. But we think we can get there, or close to it.
Isn’t this a big departure for Unilever?
As a company, we have a long history of doing the right thing. When William Lever [later Lord Leverhulme] started the company, in the 19th century, Britain had big hygiene problems. So he invented bar soap — not to make more money, but because in Victorian England one out of two babies didn’t make it past year one. That established the company’s values, and we need to build on them. Before we launched our plan, only 10% of our materials were sourced sustainably. Now, after just one year with new stretch targets, we’re sourcing 24% sustainably.
This all sounds fine. But how do you make a concrete case that sustainability benefits business?
I always turn that question around: How would you make the case that not doing this could help society and mankind? For proper long-term planning, you’ve got to take your externalities into account, in order to be closer to society. It’s clear that if companies build this thinking into their business models and plan carefully, it will accelerate growth......
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