Paul Polman has been one of the most exceptional CEOs of his time. The man who has been leading Unilever from 2009 until 2019 is the protagonist of an excellent new book by Dutch publicist Jeroen Smit, who earlier wrote corporate biographies about Ahold and ABN AMRO, in which he showed that the fate of a large company is largely determined by the personal make-up of its top leaders.
Paul Polman clearly is a man on a mission, the book demonstrates. He even feels that he is chosen, that he is on earth to make a difference, Smit writes. Polman wants to show that a large company like Unilever can be a force for good in the world, that it is possible to do well by doing good. Under his leadership Unilever has put sustainability at the core of its primary process. Unilever wants to serve its consumers and the society in which it operates in a sustainable way, beneficial for all stakeholders and also for future generations. Polman considered Unilever the largest NGO in the world; he was proud when people assumed that he was an activist and found it hard to believe that he was a CEO.
Polman strongly believed and believes in a stakeholder approach. Shareholder value is a result in his perception and cannot be a goal. He even thinks that companies which focus on making money don’t have a right to exist. Soon after his appointment as CEO Unilever announced to stop publishing quarterly results, this to the dismay of financial analysts and even to at least one of its non-executives, Smit writes.
According to the author Polman is right. Companies should act now to keep at bay the dramatic costs for society of climate catastrophies and human suffering; they cannot wait because they cannot be successful in a world that fails. Polman has made brave choices by putting great efforts in setting one of the largest companies in the world on a more sustainable path.
Polman’s influence extended even beyond Unilever. He was appointed to the Secretary General’s High-Level Panel of Eminent Persons of the UN, being one of the few business people amongst a group of presidents and prime ministers. This position at the UN took Polman twenty hours a week, which he spent with great satisfaction and dedication. There is an estimate in the book that 75 per cent of the 1,800 companies that were represented in Paris to negotiate the climate treaty attended because Unilever nudged them to be there.
There is another side. Polman’s righteousness also made him lonely, the book shows. He spent more time at the UN amongst like-minded individuals than he spent at Unilever, which is hard to bellieve for the CEO of such a large company. The non-executives in Unilever’s board worried about his disappearance into another world. He used board meetings to lecture his peers about poverty, deforestation and climate change. They were impressed but also irritated: was he still paying enough attention to business outcomes? Feike Sijbesma – the CEO of DSM, a non-executive at Unilever and a fighter for sustainability himself – believed that Polman got lost, the book says. Sijbesma thinks that Polman went too far by judging the way of working of entire industries and fighting against the system. You cannot play checkers if the rest of the world is playing chess, Sijbesma is quoted in the book.
Polman’s righteousness also makes him a bad listener. He is like a pastor on the pulpit, always broadcasting, rarely interested in the opinions of others. It doesn’t matter if the person at the other side of the table is the candidate for a top job who has travelled half the world or if it is Larry Fink, the CEO of BlackRock, the largest investor in the world. In every situation Polman explains and doesn’t listen, the book says.
A grave mistake in my view is that Polman failed to forge Unilever’s top executives into a team, as he acknowledges himself in the book. As a consequence of his impatience, his outbursts of anger, his poor listening skills and his absence at headquarters top executives were left to their own, lacking the glue of a CEO committed to the business.
In 2017 Kraft Heinz tried to acquire Unilever in one of the largest bids ever but failed. 3G Capital, the investment fund behind Kraft Heinz, and Warren Buffett, one of most successful investors in the world, were convinced that they could extract more value from Unilever than Unilever managed to. Polman was horrified. He put all his force against the bid, summoning his extensive network to convince Buffett that this wasn’t a good idea. But after the failed bid Unilever was forced to do things it hadn’t done for years to pacify shareholders: buy back shares, apply zero-cost budgetting and sell assets. The best defence against unwanted courtiers is a high share price.
The 1 mln dollar question is if Polman has changed Unilever for good. Has sustainability really become part of its core process? Can the company serve its customers, improve the environment, fight against poverty, reduce waste, support small farmers, reduce water usage and satisfy shareholders, all at the same time? How will the new CEO, Alan Jope, and the new chairman, Nils Andersen, handle Polman’s legacy? The book leaves these questions open. Only time will tell.
Jeroen Smit. Het grote gevecht. & het eenzame gelijk van Paul Polman. Prometheus, 2019 (in Dutch)