BUS604: Innovation and Sustainability

When Paul Polman was appointed Chief Executive Officer of the multinational corporation Unilever in 2009, he was the first person from outside the company to hold the job. The Anglo-Dutch giant, which has joint headquarters in London and Rotterdam and owns many of the world's most famous consumer brands, had been underperforming. The board needed to do something. Polman had the right credentials: he had worked for Unilever's great rival Procter & Gamble for 27 years, rising to be Managing Director of its United Kingdom business from 1995 to 1998, and President of Global Fabric Care from 1998 to 2001, when he became group president Europe. In 2006 he moved to Nestlé as Chief Financial Officer and Head of the Americas.

When he took up his new post on 1 January 2009, Polman was determined to change the way Unilever went about its business in the most fundamental way. During his first two years, nearly half of the company's top 100 executives either changed roles or left the company. A key emphasis was also placed on taking Unilever back to its roots. Unilever was the result of a merger in 1929 between the British soap-making firm Lever Brothers and the Dutch margarine manufacturing company Margarine Unie. Lever Brothers was founded in 1884 by William and James Lever, but the rapid development of the firm was largely the work of William Lever, who was later elevated to the peerage as Lord Leverhulme. 

From the outset, Lever Brothers based its business on strong moral principles, like many set up in the Victorian era. It took good care of its employees, setting up a model village, Port Sunlight, next to its soap factory on the Wirral, near Liverpool. Here, employees lived in decent housing with many other facilities (both factory and village are still going strong, and the village is now a tourist attraction). The village was named after the product that was Lever Brothers' first breakthrough: Sunlight Soap, which was made from glycerin and vegetable oils, rather than tallow. It was a huge commercial success.

In an interview with The Owls team, Paul Polman took up the story: "It was a revolution then because for the first time you had individually wrapped and branded soap bars. The quality was guaranteed. Lever guaranteed your money back if you found a defect. But more importantly, it was driven by a firm belief from Lever that it could help to attack the issues of poor hygiene and sanitation. At that time, many babies wouldn't make it past year one. Lever saw toilet soap as a very cheap and good solution. 

The man was driven. So that spirit of innovation, helping consumers and doing well by doing good, was in the company from its origins. Lever was absolutely ahead of his time and ahead of his contemporaries by the way in which he approached business and the philosophy of business".

Lever's socially enlightened approach was a key factor in Lever Brothers becoming one of Britain's most successful companies. It also expanded abroad, to the United States and throughout Europe, devising new products that rapidly became household names, such as Lifebuoy soap and the Vim and Lux detergents. By the time it amalgamated with Margarine Unie it employed 250,000 people. The corporation that Polman took charge of in 2009 had morphed into a worldwide conglomerate active in over 190 countries and focusing on soap and detergents, food, refreshments, and personal hygiene and bodycare, owning iconic brands like Domestos, Hellman's, Knorr, Lipton, Dove, Lux, Marmite and many more.