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Unilever CEO Sees Purpose-Led Businesses Only Gaining Relevance

Unilever CEO Sees Purpose-Led Businesses Only Gaining Relevance

Unilever CEO Sees Purpose-Led Businesses Only Gaining Relevance
Signage is displayed outside the Unilever Plc ice cream facility in Covington, Tennessee, U.S.. (Photographer: Luke Sharrett/Bloomberg)

(Bloomberg Businessweek) -- In an interview with Bloomberg Businessweek’s Carol Massar, the good-business champion behind consumer brands from Dove to Ben & Jerry’s shares how the pandemic is strengthening his resolve.
 
Carol Massar: Which stakeholders should corporations be prioritizing right now: employees, communities, shareholders, or customers?
 
Alan Jope: We’ve been operating a multistakeholder model for about 10 years. We believe that if we look after our employees and our customers, if we worry about society and the planet, if we take care of our supplier partners, then our shareholders will be well rewarded.

Ultimately you have to look after all these stakeholders. But it for sure begins with your employees. You know, without showing authentic care for your employees, I don’t do anything as the chief executive of this company. It’s our front-line people who are making the goods, who are serving our customers. So that, for me, is where it starts.
 
Does business get harder the longer this goes on?
Yes, it does. We’ve got about 150,000 employees on payroll; about 70,000 of us are office-based and working from home, while an additional 50,000 are in factories. We’re very conscious that for some people working at home is liberating and for others it’s absolute torture.
 
Millions of people are now unemployed. How do we teach new skills to workers whose jobs may never come back?
Retraining is something that we’ve been busy with for a long time. We are actually stepping up our digital-learning activities, and people understand that if you have a moment where you’re not at full capacity, use it to sharpen your skills.

I think what you’re getting at is an important question, and I’m actually involved in some work with the United Nations on creating job markets, particularly for young people, to reskill and find new jobs. You know, we’re all very focused on the virus right now, as we should be. But the other big problems in the world, things like climate change and inequality, are not going away. And I truly hope that, as we start to rebuild, that we don’t take our eye off that important work. Those problems will haunt us unless we deal with them—and deal with them quickly.

Multilateralism and global trade have lifted hundreds of millions of people out of poverty. So we fear a retreat to nationalism. It’s not good for trade. It’s not good for economies. And it’s certainly not good for solving big transnational problems like climate change that require collaboration.

How do you navigate the balance between profits and doing the right thing, especially in this changed world?
I think if you frame the recovery as economy vs. health, it’s a false framing. We’ve got to manage a return to health and a return to economic activity. In the same way, we shouldn’t talk about purpose over profits. We truly believe that by positioning our brands on doing real good, by running our supply chain in a sustainable way, by being a responsible employer and creating great opportunities for people, a byproduct will be better financial performance. And I really hate to set up some trade-off on purpose vs. profits.
 
Unilever has put equality center stage. Can it stay there?
[Classics professor] Walter Scheidel at Stanford has written that the only steep changes in economic inequality tend to happen after wars or crises. One inequality we’re focused on is gender inequality. Our nonexecutive board and management team is 50/50. But now we have to start thinking about our role in society, creating opportunities for women through our extended operations and also through our brands. Income inequality is also going to become very apparent. I think the capitalism that’s evolved over the last 20 years is going to have to change into a more equal, distributive model.
 
So many companies are withdrawing guidance. What’s your economic outlook? And what are you seeing in consumers?
We withdrew our guidance because it gets used to a false level of precision. The world is too uncertain for that right now. However, there are some things that are known. We are going into a recessionary environment. And companies, ourselves included, should be thinking about value propositions and making sure that cash-starved consumers are able to access high-quality products at the lower-cost end of the pricing spectrum. And we’re busy with that.

Secondly, people are fearful. And so hygiene, cocooning, the distance economy, staying at home—those are all going to be big trends. And there’s going to be a secular shift from out-of-home consumption back into in-home consumption. How we shop, consume media, pay for things, and live our lives is only becoming more digital. This is going to be an accelerator. The macro trends are very clear.
 
Which of your brands have proven to be the most resilient and which have lagged?
It’s not so much at a brand level, it’s more at a category level. It won’t surprise you that we’ve got a big business that supplies restaurants with food-service products; that’s not doing well right now. But then there’s hand hygiene, surface hygiene, and particularly in-home eating. This is a time when people need trusted brands. And so actually our biggest, oldest brands are doing very well right now. In crises, big brands, trusted brands tend to do quite well.
 
What’s a lesson from this you can share with other leaders?
We’re actually moving away from scenario planning and trying to focus on building agility and responsiveness into the company. And I don’t know that we should all be spending too much time locking in particular views or scenarios for the future, but rather unleashing the trapped capacity that most big organizations have by letting go and letting people close to the markets, close to the front line, exercise their judgment and their decision-making. We’ve discovered a new responsiveness in Unilever that I wish we had unlocked years ago, but it’s taken this crisis to do that.
 
Does the crisis pressure you to change your ways at all?
Our company is guided by three deeply held beliefs: that brands with purpose grow, companies with purpose last, and people with purpose thrive. And we think that refrain is going to be even more relevant in a post-coronavirus world than in a pre-coronavirus world. So we will not waver one iota in our commitment to purpose-led business.
 
Edited for space and clarity.

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