Capitalism, But Kinder?

Context

Paul Polman is often hailed as a turnaround virtuoso celebrated for his transformative tenure at Unilever until 2019. However, the hallmark of his leadership was not merely his knack for financial wizardry but his integration of sustainability into Unilever’s DNA.  

Polman rewrote the CEO rulebook by prioritising sustainable growth over fleeting quarterly gains. His resolve was most famously tested in 2017 when he fended off a hostile takeover bid from Kraft Heinz, choosing principles over short-term profit. His leadership demonstrated how businesses could flourish while uplifting society and safeguarding the planet.  

Unlike his predecessor Patrick Cescau, who emphasised cost-cutting measures, Polman championed sustainable business practices with zeal. 

Meanwhile, his servant leadership approach placed employee wellbeing and purpose above profit—a philosophy that stood in stark contrast to the traditional profit-driven strategy. His journey wasn’t a stroll in the park—it was an uphill battle.

Real-Life Story

When Polman became CEO of Unilever in January 2009, the world was gripped by the global financial crisis. The company he inherited was teetering on the edge, struggling to recover lost market share. 

Consumer demand fluctuated while rising commodity prices and supply chain bottlenecks sent operational costs soaring. The road ahead was met with sceptical stakeholders, fierce competitors, and mounting pressure to perform in the short term. 

Polman’s decision to scrap quarterly earnings guidance—a vital piece of corporate strategy—sparked concerns and a plunge in share prices. Yet, the CEO stood firm. His commitment to long-term goals ultimately rewarded shareholders with a staggering 290% return over the course of his tenure.  

The most groundbreaking change Polman introduced was the launch of the Unilever Sustainable Living Plan (USLP)—a radical roadmap that sought to marry profit with purpose. 

The plan centred on three ambitious goals:  

1. Improving Health and Wellbeing: reaching over a billion people with health and hygiene improvements.  

2. Reducing Environmental Impact: cutting greenhouse gas emissions, water usage, and waste across the product life cycle.  

3. Enhancing Livelihoods: championing fairness in the workplace and creating opportunities for women within the supply chain.  

The results spoke volumes: Unilever doubled revenue while slashing its environmental footprint.  

Polman recognised the rising tide of consumer preference for sustainable brands. He expanded Unilever’s portfolio of eco-friendly products by acquiring companies like Seventh Generation and building customer loyalty around sustainability.  

Meanwhile, he turned the spotlight on Unilever’s supply chain, demanding sustainable practices from suppliers. This reduced environmental impact and trimmed inefficiencies—a win-win for the planet and the balance sheet.  

The Kraft Heinz Battle  

Polman’s mettle was tested again in February 2017, when Kraft Heinz launched a US$143bn hostile takeover bid, dangling an 18% premium over Unilever’s share price. But this wasn’t just a financial tug-of-war; it was a clash of ideologies.

Kraft Heinz’s cost-cutting philosophy was anathema to Unilever’s purpose-driven ethos. Polman, like a master strategist, outmanoeuvred the bid in just 55 hours.

Kraft Heinz withdrew, realising the public fallout wasn’t worth the gamble. The episode cemented Polman’s legacy as a champion of “kinder capitalism”—a model that blends profitability with responsibility.  

PostScript: Under Polman’s stewardship, Unilever doubled its revenue and cut its environmental impact by half, and shareholders enjoyed a threefold return on their investments. By nurturing a culture of collaboration and innovation and aligning his workforce around shared values, Polman cultivated a company that exemplified sustainability and purpose-driven profit.

Key Lessons

1) Prioritise Ruthlessly, With a Purpose

Polman showed how to focus on what truly matters, not just profits but people and the planet. WarTime CEOs committed to sustainability make every action count towards a triple bottom line. Financial success, social impact, and environmental responsibility go hand in hand.

2) Plan for the Long Game

Polman and Unilever resisted the allure of short-term fixes that compromise future viability. WarTime CEOs adopt strategies that ensure resilience and sustainability, even in a challenging environment.

3) Empower Your Team to Think Sustainably  

WarTime CEOs encourage employees to innovate solutions that solve crises and advance eco-friendly practices and equitable outcomes.

4) Monitor ESG Metrics Relentlessly 

WarTime CEOs go beyond traditional KPIs to track progress on environmental, social, and governance goals. Data-driven insights can help balance profitability and purpose.

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Until next week, may the force be with you.

Kevin

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