INDIVIDUAL LEADERSHIP AND

IMPLEMENTATION OF STRATEGIC CHANCE –

UNILEVER CASE STUDY
 Historical About Company
background of Unilever is a British-Dutch
Unilever transnational consumer goods
  company.
 1930 - the date of establishment and Unilever is organized into four main
starting a cooperation between Margarine divisions:
Unie and Lever Brothers
 The two companies remained independent
 Personal Care
for a long time  Foods
 After singing agreements they became a
single entity  Refreshment
 Home Care
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Unilever - General information about its strategy before 2009

 Efforts to develope and improve products to

 Efforts to enhance innovation
meet consumers’ aspirations and needs
and competitiveness

 Efforts to lower costs and  Strategy based on having leading

ensure the possible highest positions and being in high growth
quality of products (2007 markets
annual report)

 High degree of decentralization  International scope

.

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 Types of Change
(four types model)
According to J. Balogun and V. Hope Hailey
(2008: 20) the following paths of change may be
 cultural change is  can be accommodated
required but this can with the existing culture
distinguished:
be accomplished and can occur •Adaptation
over time. incrementally.
•Evolution
•Reconstruction
.
•Revolution
As far as Unilever’s change is concerned, it can b
described as reconstruction where change is
implemented gradually but much faster than in the
 fundamental changes  rapid change but adaptation mode
in both strategy and without fundamentally
culture. changing the culture

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Change Kaleidoscope before 2009
According to Johnson et al. (2017: 471) „…change kaleidoscope… provides a framework by which to
identify contextual features to take into account in designing change programme”.

Power
 Anthony Burgmans
Diversity (Head of Unilever
 Poor organizational and NY) (poor
management structure (suggestions company’s Capability
to split up the company) performance)  A company with high revenues and
resources,
 The efforts towards lowering costs with
Scope Design ensuring the high quality of products
offered
 High: Change the company’s way of working
 Changes in management structure choices Capacity
 Cash: high
 People: high

Preservation Readiness Time

 Keep existing product brand names  High: International scope, high degree of  A long term change
 Keep the human resources, decentralization,
 Keep international scope  Efforts towards being more innovative and
 Having leading position on market competitive 5
 Lewin’s Force Field Analysis
Lewin’s Force-field analysis is used to
show forces driving a change and forces The most enabling aspects
resisting it (for and against the change)
(Johnson et al. 2017: 475)
of the change context
The most enabling and helpful aspects included:
The most inhibiting aspects of the  Great brands,
change context  Leading global positions,
 Strong innovative capabilities
Usatisfactory company pperformance
 Great values on which Unilever had been built
 In the years between 2004-2008 turnover grew was far less than Unilever’s net profit
 A depth of organizational quality
 The differences in sales growth could be observed depending on categories and
regions  Polman’s long history in the business of fast
 The low ranking in Total Shareholder Return and Fortune Magazine moving consumer goods

 Unrealistic strategy

 A lack of rational strategy and synergies between personal care and food products
provoked suggestions to split up the company were considered
 In view of the criticism, the board of directors decided in 2008 to choose the new
CEO – Paul Polman – a highly experienced manager in the segment of fast-moving
consumer goods (the former Nestle and Procter&Gamble’s CFO).
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Johnson’s cultural web model
As Johnson et al. (2017: 155) rigthly
points out „The cultural web shows
behavioural, physical and symbolic
manifestation of a culture that inform
and are informed by the taken-for-
granted assumptions, or paradigm, of
an organisation.

Source: Johnson et. al. (2017) Exploring

Strategy, 11th Edition, Pearson
Education, p. 156

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Culture of Unilever pre-2009 Symbols
Culture of Unilever post-2009

 International scope
 International scope  Great brands
 Great brands  Leading global position
 Leading global position
 Strong innovative capabilities
 Strong innovative capabilities
 Great company’s values  Great company’s values
 High quality of organizational quality  High quality of organizational quality
 Presence in high growth markets  Presence in high growth markets

+
 New elements introduced after 2009:
 The “Unilever Sustainable Living Plan”
 Passion for winning
 More customer orientation
 Company which is increasingly and externally
focused
 Implementing a more responsible business model

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Culture of Unilever pre-2009 Culture of Unilever post-2009
Power Structure

 The CEO and senior executives  The CEO and senior executives with
with relatively less power much greater power
 Regional manager with a high  Strengthening of CEO’s position
level of decision-making power  Introducing changes aimed at making
 Less coordination the company a more category-driven
 The existence of two separate when a decision-making process is
entities more centralized
 A highly decentralized structures  Better coordination
 The existence of a single entity
 A multi-country company with 22
regional centres operating in 11
categories

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Culture of Unilever pre-2009 Culture of Unilever post-2009
Organization Structure
 Far-reaching changes (formal and
informal)
 A lack of structural changes
 Structural changes focused on
 A highly decentralized structure
collaboration (self-development
 Small budgets for employee
opportunities)
development  A centralized structure of a multi-country
 Just one Unilever’s training
organization
centre  Focus on four distinct groups: Personal
Care, Foods, Refreshments and Home
Care
 Focus on eight geographical clusters
 A more category-driven company
 Decision-making more centralised
 New modern learning centers
 Implementing several important projects
such as: Project Sunsent or Project Half
for Growth

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 Culture of Unilever post-2009
Culture of Unilever pre-2009
Control System
 The new remuneration system arranged
to support Unilever’s business vision
and strategy. Its major includes
 The lack of an effective  Paying for performance,
remuneration system  Ling performance measures with
 Little differentiation between top strategy
and mediocre performers.  Delivering sustainable performance,
 Managers were not provided  Alignment with shareholder interest,
with an opportunity to increase  Paying competitively,
their income through bonuses.  Preventing inappropriate risk-taking
 Low employee morale  Changes aimed at improving speed,
focus and efficiency to make
performance targets more aligned,
clearer and differentiated.
 A high level of morale

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 Culture of Unilever post-2009
Culture of Unilever pre-2009
Rituals and routines
Rituals and routines are now focused on:
Rituals and routines were now focused
on:  Core operating profit through
introducing more discipline and rigour,
 Changes in performance target improving prioritization of resources and
setting competitiveness between projects and
 Remaining quiet constant for years investments,
(with very few changes only)  Long-term behaviours
 Major approach: underlying  Focus on “winning the consumer”
operating profit  More active and long-term shareholders
 Short term behaviours orientation aligned with Unilever’s
 Shareholders orientation business purpose and model
 being more competitive
 short-term performance indicators
(including cost levels, cash flow, and
market share)

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 Culture of Unilever post-2009
Culture of Unilever pre-2009
Stories
 Focus on quality
 Focus on efficiency
 More emphasis on performance
 Continuous development of products
 Focus on quality
 Development of brands and
 Focus on efficiency
innovations
 More emphasis on performance
 Lowering the costs without
 Continuous development of products
compromising quality
 Development of brands and
 A higher level of morale through
innovations
introducing the theme of “Wining in
 Lowering the costs without
the market place”
compromising quality
 Winning with brands
 Faster, bigger and better innovation
 Offer superior product,
 Focus on being more competitive
 Focus on short-term performance
indicators (including cost levels, cash
flow, and market share)

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 Kotter’s 8 Change Step Model
According to Kotter (2012) “... major change efforts
have helped some organizations adapt significantly to
shifting conditions, have improved the competitive
standings of others, and have positioned a few for a far
better future”.

This model consists of the following 8-steps:

1. Establish a sense of urgency
2. Form a powerful Guiding Coalition
3. Create a vision
4. Communicate the vision
5. Empower others to act on the vision
6. Plan for and create short-term wins
7. Consolidate improvements and strives for more
change
Source: Kotter, 8-step process, www.kotterinc.com
8. Institutionalize new approaches (Gilley 2005: 35)

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 Kotter’s 8 Change Step Model
Work well Establish a sense of urgency Work not so well
 Low employee morale
 A good sense of urgency on the shareholders’ level  2004-2008 turnover grew far less than Unilever’s net
 Readiness to make changes in the company’s culture profit
 The focus on overcoming barriers  The differences in sales growth
 The readiness to address consumer aspirations  Total Shareholder Return low-ranking in peer group
 Innovation readiness  A lack of the rational strategy and synergies between
 Lowering cost readiness different categories of products could be observed
 Criticisim about Burgmans’ policy

Form of powerful guiding coalition

 Strengthening of CEO’s position and appointing Paul  Problems with adaptation of the
Polman as the new CEO managerial staff to the new strategy
 Putting much power to the senior executives  Problems affected the changes in the
 A “management shuffle” –the need for recruting new composition of the leadership
managerial staff for introducing excellent management  The risk of less coordination
development programm
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 Kotter’s 8 Change Step Model
Work well Create a vision Work not so well
 Implementation of the vision required:
 The new CEO was able to create a new,
 Focus on improving product formulation
comprehensive and consistent vision.  More investments in advertising and promotion
 According to the 2014 Annual Unilever’s Report the
 More investments in research and development
vision was: “… to double the size of Unilever, while  Innovation programme focused on bigger, better and
reducing our environment footprint and increasing our
fewer projects
positive social impact through a focus on our brands,  Start to invest in chain capabilities and capital
our operations and our people and the Unilever
investment
Sustainable Living Plan (USLP)”.  A highly efficient, more centralized and consumer
oriented global supply chain.

Communicate the vision

 Management team has been able to model the expected  In order to improve communication effectiveness
behaviors of Unilever’s staff and to develop its’ „passion there has been a need for:
for winning”  Introducing a centralized structure
 Through different channels of communication between  Introducing structural changes focused on
the top level managers and managers of major locations collaboration and self-development
and divisions the understanding for innovative,  Establishing modern learning centers
customer-, and marketing-oriented policy was developed.  Focusing on selected categories of products

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 Kotter’s 8 Change Step Model
Work well Work not so well
Empower others to act on the vision

The new approach assumed: The new approach required:

 More discipline and rigor  Changes in culture
 Prioritization of resources  changes for implementing long-term behaviors
 competitiveness between projects, investments, etc  Changes for promoting shareholders’
 More active and long-term behaviors orientation
 Long-term shareholders’ orientation in a line with
Unilever’s business strategy and vision

Plan for and Create short term wins

Focus on: It required changes in the following spheres:

 “winning the consumer” and „Passion for  Structural changes
winning”  performance target setting
 Making the company more competitive  Implementing a more responsible business
 Examining short-term performance indicators model
(including cost levels, cash flow, and market
share)
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Kotter’s 8 Change Step Model
Work well Work not so well

Consolidate improvement strive for more change

 It is crucial to continue changes in the long

run and implement new projects with time.  Before Polman’s arrival
 The structural change was supported by a there was a problem
number of new projects and the with differentiation
competitvenes between them between top and
 Cross-department collaboration was mediocre performers
organized  Managers were also not
 European Marketing and Innovation Hub encouraged by the
supported towards speed-up decision effective remuneration
making and it enabled managers to share system
best practices
 The change was supported by the new
renumeration system.

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 Kotter’s 8 Change Step Model
Work well Work not so well

Institutionalise new approaches

 The new approaches now may be found

 The investment community appears
in Unilever’s collective identity and
to have mixed feeling about the new
culture.
approach
 It include the key communication
 It is signalised by Goldman Sach’s
channels, values , orientation, and
„structurally lower growth rate” in
competency model.
developing markets
 New investition in education and
 According to the Financial Times the
training improves learning environment,
company can be described as
efficiency, and leadership giving it
socially responsible but „falls short
positive momentum on the long term.
on growth”

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Crossan’s Transcendent
Leadership Model
According to Crossan at al.
(2015: IX):
“Good leadership is a function of
competencies, character, and the
commitment to doing the hard
work of leadership”. Accordingly,
all these elements should be
taken into account while
analysing the effectiveness of an
individual leaders

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Polman’s leadership of Unilever
The style of change leadership
Polman’s style of change leadership may be described as a
“social entrepreneur”. Accordingly, his style is characterized by
the following elements:

Knowledge Financial Human capabilities Challenge Social

 Deep knowledge and  Focus on  Optimistic view  Openness to  Focus on social,

experience in the serving all of human experience new environmental issues and
business of fast-moving stakeholders capabilities and challenges and sustainability (by
consumer goods nature activities introducing Unilever
Sustainable Living Plan)

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Performance target setting
Polman decided to cascade targets throughout the organisation and
make them clearer, more differentiated and more aligned

 All key performance indicators

remained quite constant over
recent years  In order to restructuring
spending more rigour and Unilever’s CEO aimed
 The shift from “underlying operating at creating more
profit” to “core operating profit” could discipline was introduced.
 Polman introduced centralised, efficient and
be also observed more consumer and
changes in innovation globally oriented global
 By making targets more long-term, programme through supply chain
Polman was able to put focus on long- investing in bigger, fewer
term behaviours and short-term and better projects
performance indicators measuring cost
level, cash flow and market share

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The need to create greater economic value and
improved organisational capability
To improve Unilever’s organisational
capability several important changes were
According to Polman’s vision and strategy introduced too. The key ones include:
three elements should be recognized as the  A single entity was created
driving forces to create greater economic  CEO and senior executive position was
value of Unilever. They include: strengthened
 Organisational structure was
 Efforts to continual development of transformed from a highly decentralised
products satisfying consumers’ needs and to a multi-country organisation
expectations  Four major product categories and eight
 Openness to innovative solutions and new geographical clusters were differentiated
brand concepts on the international scale  Decision-making process became more
 Lowering the costs of three key elements – centralized and better coordinated which
sourcing, manufacturing and product contributed to make Unilever a more
distribution without a risk of product category-,consumer-, and innovative-
quality decreasing driven company.
 New marketing and innovation centres
were established

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 CONCLUSION
The main purpose of this presentation was to present and
examine the key aspects of changes initiated by Unilever’s
CEO - Pual Polman. Based on the gathered information it can
be said that the change process should be considered
successful because it enabled the company to improve its
efficiency, competitiveness ,organizational structure as well as
to produce new strategy positively affecting its performance,
culture, values and leadership style.
Polman was able to implement the key changes through
reconstruction of Unilever’s current resources. The process of
introducing changes was managed effectively, and Polman’s
style of leadership allowed to increase the company’s potential
to a large extent. The usefulness of the diagnostic models used
for examining the key data should be evaluated positively.
Their great strength lies in their flexibility allowing
concentrating on the most important aspects of the examined
change. However, it should be emphasized that due to the
limited volume of the presentation not all aspects could be
analyzed in detail.
 REFERENCES
Balogun J. and V. H. Hope (2009), Exploring Strategic
Change. London: Prentice Hall.
Bhattacharyya, S. and Jha, S. (2018) Strategic
Leadership Models and Theories. Indian Perspectives.
Bingley: Emerald Publishing Limited.
THANK YOU Crossan, M., Seijts, G., Gandz, J. (2015) Developing
Leadership Character. New York/London: Routledge.
FOR Gilley, M. (2005) The Manager as Change Leader.
Westports/Connecticut, London: Praeger
WATCHING Johnson G, Whittington R, Scholes K, Angwin D &
Regner P (2014), Exploring Strategy,
.
Harlow/London/New York et. al.: Pearson.
Kotter, J. (2012) Leading Change.
Boston/Massachusetts: Harvard Business Review
Press.
Kotter. 8-step process,
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g-change/
, accessed on 03-26-2009.
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