How do you ensure your employees and shareholders value environmental and social impact over short-term profits? If you ask Unilever CEO Paul Polman, the answer is to stop paying high bonuses, to stop reporting on your company’s stock value in quarterly reports, and to start chasing environmental and social goals in your company’s written objectives.
If you would ask any other CEO how that sounds for a strategy, they may tell you it sounds like the equivalent of writing your own termination letter. A CEO lives by the sword and dies by the sword – he or she is as good as the last quarterly results. But for Paul Polman, leader of the company that makes products like Axe deodorant, Lipton tea, or Magnum ice cream, it has turned out to be a winning recipe, and one for which he has won many accolades.
Oxfam International, for example, recently declared Unilever the best-in-class in terms of its agricultural sourcing policies. The Dow Jones Sustainability index named Unilever the world’s leading food and beverage company in sustainability performance. And Polman himself is a board member at the UN Global Compact and the chair of the World Business Council on Sustainable Development, a function in which I welcomed him at a World Economic Forum press conference.
How did he do it? As The Guardian recently noted, Unilever’s recent commitments include launching “a sustainable living plan that includes a commitment to cut calories in its ice-cream products” and a pledge “to eliminate coal from its energy usage within five years, and derive all of its energy solely from renewable sources by 2030.” But the list goes on and on.
Interestingly, it pays off financially as well. Since Polman took the helm of Unilever in 2009, the stock price of the Dutch-British company has doubled, its revenues stand at some $60 billion, and its profits at $6 billion. It makes the Rotterdam-based firm the third largest consumer goods company in the world, behind only Nestle and Proctor & Gamble. Surprised? Polman isn’t. “Businesses are discovering that the costs of not doing things are becoming higher than doing things,” he told The Guardian.
Yet it didn’t always look like Polman would become a celebrated business leader. As a matter of fact, he had almost not become a business man at all. As he explained in a recent interview in Dutch financial daily FD, he initially wanted to become a priest and even visited a seminary. After dismissing that idea, he tried and failed three times to get into medical school, which in the Netherlands is based on a lottery. It was only when his father nudged him to give another study a go, that he started his economics studies, which led to his business career.
He was also not supposed the CEO of Unilever. He started his career at that other consumer goods giant, Cincinnati-based Procter & Gamble, and stayed there for 27 years (almost unimaginable for many of us Millennial professionals today, who switch jobs on average four times by the time we’re 32). Then, in 2006, he became CFO at Nestle, which put him in pole position to become CEO one day there. But in a surprise move, he left that company and ultimately became CEO of Unilever.
No, Paul Polman is far from a typical CEO. He is mostly traveling and rarely in the office, he says, and that should be fine. People shouldn’t depend on him to take decisions because he will be long gone by the time other employees retire. With 8 years at the top he is already past the median expiration date of a Fortune 500 CEO, which is less than 5 years. But that doesn’t mean that at age 60, he is about to slow down. A day has only 24 hours, but, he says, he usually has commitments for 48.
The reason for his overly ambitious schedule may be the same as the one he had for considering seminary: his strong-held internal belief that you should live your life in the service of others, not yourself. It may also be why he politely declined to be interviewed for this article:
“Thanks for the opportunity which is highly appreciated,” he wrote me. “However rather bring attention to the cause than to individual. Thanks for understanding. Warm regards. Paul”
Peter Vanham is a Global Leadership Fellow at the World Economic Forum. He wrote this contribution in his own name. It is based in large part on an interview Paul Polman gave to Jeroen Smit for the Dutch financial daily Financieel Dagblad.
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