In this seminal book, former Unilever CEO Paul Polman and sustainability expert Andrew Winston explore how corporations might fix world environmental issues, instead of adding to these problems. Companies must become net positive they argue, i.e., “giving more to the world than they take”. They advocate five key principles for a company to become net positive:
Take responsibility for one’s company’s full impacts
Work for the long-term benefit of society
Create positive outcomes for all stakeholders
Improve shareholders’ return (as a result of the above)
Embrace transformation partnerships
Before delving into a specific review of the book to cover how the authors “add meat to” these five challenges, allow me to briefly introduce the authors, and then to make these comments.
Paul Polman was CEO of Unilever. Before this assignment he was CFO and then Head of North America at Nestlé. He is/has been very active in a number of organizations focusing on the environment and sustainability.
Andrew Winston is a leading thinker on sustainable business and author of several books on this topic, including Green to Gold as well as many articles on sustainability.
Now to my general comments. First, this book focusses on how Unilever managed to become closer to net positive under Mr. Polman’s tenure. This is an impressive chronology! And it is rare to get so much of what may seemingly be the truths regarding a leading corporation’s “journey” to becoming more sustainable, and thus also more successful. But is the book perhaps a little bit biased on reporting the virtues of Unilever, as the authors see it? Why, for instance, are key competitors such as Nestlé and P&G basically not discussed?
Also, while it can be no doubt that Mr. Polman deserves the reputation of being “a standout CEO of the past decade” (Financial Times), one might nonetheless, and perhaps appropriately ask whether his focus on environmental/sustainability issues might simply have been too much. As the authors themselves acknowledge (p. 249), did he perhaps “take his eyes off the ball”, to perform the full plethora of CEO duties? He must indeed have spent a lot of his time and energy on sustainability orientated meetings, being a member of a variety of environmental initiatives and “championing broader societal causes” (p. 249). Whatever the “answer” might be, my conclusion is that what Mr. Polman has done is highly laudable. Few leaders, if any, can point to such impressive successes!
Third, why so many abbreviations? While the bulk of these may be familiar to the person closely following the environmental/sustainability movement, it makes it relatively hard for more “normal” readers to follow many of the arguments set forth in the book, however. There is a plethora of initiatives as well as concepts, all with their own abbreviations!
Now to a brief review of the book’s content, as presented in the introduction and in the 10 chapters that follow.
The introduction gives us a backdrop to Mr. Polman’s efforts at Unilever. For a number of years, he seems to have been busy setting in motion an impressive array of environmentally friendly, sustainability-enhancing strategic initiatives, only to experience the threat of a hostile joint takeover bid from 3GC, the majority owners being Jorge P. Lehmann (Brazilian/Swiss entrepreneur) and Berkshire-Hathaway (Warren Buffet, CEO). This seasoned team were obviously impressed with what had been achieved at Unilever. Ultimately this takeover attempt failed, however. The urgency is maintained though, through a review of our precarious worldwide position when it comes to sustainability issues, including excessive pollution and global warming. And the short-term focus that seems to dominate corporate and government lives does not give us much room for optimism.
The short-term focus is driven by many factors. Corporations’ strategies are driven by top management’s renumeration and bonuses, as well as stock options. Expectations of short-term gains in stock markets add to this. Societies are similarly increasingly being driven by “short-termness”, through reporting on quarterly GNP growth, as well as with impact coming from legislature, political election concerns and lobbying efforts. Even corruption may be at play to enhance societal short-termness.
But the authors convincingly argue that long-term focus often pays off. An example here might be Unilever, with its 10 years of improvements in both top line and bottom line during Mr. Polman’s tenure. Shareholder values came about as a result of such long-termness!
We have already referred to the five core principles for a net positive corporate model. Culture is of course also key here, as discussed throughout the book. Employee’s attitudes need to be in line with a long-term value-set.
A net positive corporation, one that gives more than it takes, does indeed seem to be more attractive, for both employees who choose their workplaces and investors who decide where commit their funds. In this reviewer’s experience he has made a rather similar argument when it comes to people to gravitate towards and also which organizations to build on. For instance, when I was leading IMD this was a major principle.
The authors do of course stress that an effective leader might typically be net positive too. Key words here are “purpose driven”, decency, and self-confidence (relying on others who may be smarter than the leader itself). It is important for a leader to be courageous enough to act in a long-term way. And inspirational leadership is part of this!
Let us mention two critical procedural elements here, followed at Unilever:
The Compass – a short document for how to come up with a winning long-term strategy, sustainable and all!
The Unilever Sustainable Living Plan (USLP) – This brings Unilever’ strategies and the company’s sustainability targets together. Net positivity is a key word to describe the USLP’s!
It seems to have been critical to send consistent signals to all parts of Unilever’s global organization, so as to get broad buy-in from employees as well as from major shareholders. Unilever also developed a corporate specific leadership development program to enhance a strong implantation target for its USLP’s, ULDP (sic).
All large companies are faced with sets of boundaries. These may partly have to do with the way a firm is organized. Unilever attempted to centralize its formal organization, to make things simpler, as well as to weaken silos. Importantly, to break down boundaries might also add to bolder, more flexible thinking!
To be transparent and totally open seems to be paramount. This is a crucial condition for building effective trust. Data-driven transparency plays a key role here. On p. 130 the authors state that “when in doubt, do the right thing”. This term might, however, have been coined by General Norman Schwarzkopf, the commander of the US forces in the successful first Iranian campaign.
Partnership seems critical, so also to achieve relatively easy synergies (1 + 1 = 11)! The authors distinguish between two forms of synergistic partnerships, namely on the one hand those that might focus on bringing together stakeholders within one’s current terrain of operation versus, on the other hand, those where stakeholders may have to work together to change a system itself. The former might entail enhanced partnering within one’s value chain, within one’s industry, across sectors, with various societal realities as well as with government.
Partnering with various groupings of multi stakeholders might lead us into the other archetypes of synergistic realities, namely for creating entirely new contexts, new systems, as the authors say. Also, central here are line-ups to limit corruption, even bribery.
The authors are, of course, keenly aware of the fact that there shall typically be a strong focus in place that might jeopardize progress towards an environmentally unfriendly way for firms to operate, in addition to overcoming the short-term bias that is so often at play. The authors identify nine such factors, and state both what might be the essential problem with each, as well as what may be “solutions”. I shall not review each of these, but only “flag” a few: the tax regime, corruption (again!), executives (over-)pay, and unprepared boards.
The end of the journey to present effective sustainability that the authors have taken us through, often drawing on examples from how these issues were approached at Unilever, is a discussion of corporate culture. It all comes together here, where the authors try to elaborate on actions for how the various proposed approaches might be delineated, in given cultural contexts. And culture is always changing of course. This seems to be quite analogous to the famous example from quantum physics, set forward by the Nobel Prize recipient Werner Heissenberg: “Matter changes form when you attempt to observe these matters!”. The so-called infrastructure of culture changes continuously too, when it comes to finance and budgets, R&D as well as M&A. Brands change. So-called purpose-driven brands evolve. (They also tend to be more profitable than other brands, hence, also the need to utilize brands!).
The final chapter delineates six additional key dilemmas in a net positive world, as the authors see it. I shall not go further into these. Was this chapter perhaps added with a relatively strong element of afterthought?
All in all, I find this book to be truly great. It is an eye-opener as well! Sir Richard Branson says it well in his praise for the book: “a wonderful rallying call to business leaders…. To step up to the greatest opportunity of our time”.
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