“What CEOs Say,” webcast feat. Paul Polman, CEO of Unilever (2009-2018)

“What CEOs Say,” webcast feat. Paul Polman, CEO of Unilever (2009-2018)


HOWARD KOH: Welcome, everybody. I’m Dr. Howard Koh. I’m very pleased to
welcome you to a new video series entitled What CEOs Say– co-sponsored by
the Harvard TH Chan School of Public Health and
the Harvard Business School, with support from the Robert
Wood Johnson Foundation. Our overall goal is to explore
how the private sector can leverage its resources
to promote health and well-being for society. And in particular, we want
to meet business leaders who have committed to promoting
a culture that advances health for employees,
consumers, communities, and/or the environment. We want to hear from
leaders about how they made that
commitment, what changes they’ve made, the
challenges they faced, and how they overcame
them, and the lessons learned that they want
to share with others. Thank you for joining us. AMY EDMONDSON: It
is such a pleasure to be here with
you this afternoon. Now, for many, you
symbolize far more than a very successful
business leader and CEO, but a movement– a movement
that tried to influence, and has influenced the world
beyond Unilever, and including, and perhaps,
especially other CEOs. What influenced you to think
about your role as a CEO differently? What influenced you to
see the potential role you could have on a broader stage? PAUL POLMAN: Thanks,
Amy, for the opportunity and for being here. I was just looking
at what leaders say. I think we should change the
title, especially nowadays, what leaders do– is
actually more important. This world is long on
words and short on actions. Actually, the say/do cap, as we
call it, is quite significant. And that’s probably
one of the challenges. You’re saying you’re
part of a movement. You’re creating a movement. That is definitely what
we’re trying to do. But if you see where we are
right now in the score count of the state of the world,
I think we cannot really congratulate ourselves, not
individually, not as a company. The situation that
we find ourselves in is an economic system that
we increasingly discover leaves too many people behind– a place without planetary
boundaries drives inequality. And the system will not function
if we don’t change that. So what drives us
is really business having to take a responsibility
in a system that gives them life in the first place. And I firmly believe, and I’ve
always believed that business cannot be a bystander in
a system that gives them permission to be. We are living in a very
difficult period right now, be it what it is, where
we have some challenges that need to be addressed, but
it happens at the same time as global governance
doesn’t seem to function as well as we
really had envisioned it for different reasons. But it’s a moment for
business to step up. And what drives me personally
is really the human development agenda. I think that, for
a long time, I’ve realized how lucky we are to be
in the positions that we are. But that’s not the
case for the majority of the people in the world. So it’s our duty to
put ourselves then to their service. And the more we do that,
we find that the better we are for ourselves as well. So perhaps it’s very selfish. AMY EDMONDSON: I didn’t
hear selfish in there. You know what I do
hear a little bit? Is old fashioned. When I think this does hearken
to another era in which people had more responsibility–
business leaders had a sense of
responsibility, largely because they operated in
tangible local communities. And then as companies
got more global and more, sort of, disconnected from
the lives of communities, they took on a
different movement. PAUL POLMAN: Yeah. What we’ve definitely
seen, and it’s not to pinpoint in one point of
time in the history or not, but I would say when the
famous Milton Friedman shareholder primacy
started to take over, we became servants of
the financial market and forgot that the financial
market should be really servants of the real economy. We became shorter and
shorter term focused. And shareholder
primacy took over. I’ve never believed in
that business is not here to serve your
shareholders, business is here to serve society,
and do that in a good way. And by doing so, hopefully,
your shareholders will be better off. And that’s a model we’ve
put out at Unilever. That’s a model that I
always will be fighting for. But it requires
quite some systems change right now in the
situation that we find ourselves, and in the world. And that’s what I’m focused
on, on how do you create these right tipping points. AMY EDMONDSON: So how
did you help Unilever overcome the inherent
short-termism that’s created by shareholders? PAUL POLMAN: So I happened
to be the first CEO coming in from the outside
in a long history. This company started
in the 19th century. But we had a little bit of
a challenge in the 10 years preceding my tenure. And they decided to go outside. They picked me. They couldn’t have
picked a better person, but that’s what
they did in the end. And what I went– I had come from other companies. I had worked in two
other companies. And it was very clear
to me that because of being a CEO of this
great institution, they were not just automatically
going to accept me, and that I really had
to earn that respect. So the first thing
I really did was try to go back to the
roots of that company. Reading Jim Collins’s
book a long time ago– you know how you get some
of these sentences stuck in your mind. And one of the sentences
that stuck in my mind was, nurture a core before
you stimulate progress. So this company needed
to make a lot of changes. It had actually become
short-term as well. And actually had become a victim
of that short-termism in terms of under investing in
people, in factories, and brand support for a
consumer goods company. And going back to the roots
of the company, I thought– I was actually more
driven at that time by wanting to be
accepted in the company, and knowing very well that
the owners of that was on me, not on them, you
had to spend a lot of time trying to understand
the history of the company. And what I found was
that in over time, we probably had forgotten
some of the things. And Lever, who created
this company in the 1800s, was a man with a
profile, but actually, he understood very well what
role of business was. He called it shared prosperity. And he built housing
and Port Sunlight at that time for the workers
that are very desirable, even today. But he built them before
the factories were there because he– they wanted
first the housing. He fought for
pensions in the UK. He ensured when World War I came
that the women were paid when the men were gone
and that the jobs were guaranteed when they would
come back, that type of thing. Port Sunlight soon
became a study ground where people lived longer
and healthier lives, so there was an aspect
of alcohol and smoking that wasn’t allowed
for him either. So he had his balance right. But he created this
very, very good concept of what he called
shared prosperity. Even when he went into the
House of Lords, interestingly, he took the name of his
wife, even until today that this is not done by
anybody else, which is kind of amazing still where we are. So this man was special. I went back to that. And I went back to the roots
of some of these brands, brands that we were abandoning,
or under investing in, or even saying, let’s stop them,
because they were so old brands, like Lifebuoy– were called Lifebuoy–
simple bar soaps to help children reach
to the age of five, or brands like
Domestos to attack the issues of open defecation. So we started to looking again
and bringing that purpose back into the company– very much resonated. I also figured that if we wanted
to build this company back up again, you cannot do that
in the rat race of quarterly reporting. I had to create some space. So when I became CEO, I figured
the first day they hired me, they’re not going to fire me. So– AMY EDMONDSON:
Not the first day. PAUL POLMAN: Not the first day. It turned out,
unfortunately, for my wife to be true for 10 years. But we stopped
quarterly reporting. We stopped giving guidance. We moved our compensation
systems to the long term. At that time, the
share price actually negatively reacted by 8% because
the company wasn’t doing well. They thought there must
be some bad news coming. But I just wanted
to create that space and send a signal to
the people that we were going to rebuild this company. We put audacious objectives
behind that as well, obviously, but that was the first sign. And obviously, you don’t change
a culture by saying things. You don’t change a culture
by your first day there. But it sent a message. And we were going to
grow the business. I was very fortunate to buy the
Sara Lee business in Europe. The company hadn’t made any
acquisition for 10 years, and that was the first
acquisition again. Then we bought the
Alberto-Culver brands here in the US, brands like
TRESemmé and other things. So it started to
give a sign that we were in business to grow. And then the second stage that
I had to get the company through was really make it
externally focused. Most of these big
companies, they fall in love with themselves. We all have that problem. So then we write
emails to each other, and we think we’re
very productive. So I wanted to be sure
that we were there to serve the people
that we needed to serve, which are very much
the people for us at the bottom of the pyramid,
the ones that are left behind. And one of the
things I had to do was make the company outside
in instead of inside out. So we created this
Unilever sustainable living plan where the
objectives really were to ensure that every
of these brands was addressing a
real life issue. I had the benefit of being a
member of the high level panel to develop the sustainable
development goals that then Secretary General Ban
Ki-moon was courageous enough, within a UN system, to ask
some of them to private sector, to be there amongst
the 27 people. The first meeting,
they all looked at me as if the problems
were all in business. I think where we came
out was the SDGs, the sustainable development
goals was a little bit more balanced. But you had to get the private
sector involved to address these societal issues. Governments are just not able
to do that by themselves, for funding reasons, for
capacity reasons, innovation reasons, and all
the other things. So I’ve always believed
that if business is 60% of the global
GDP, 80% of the finance and flow, 90% of
the job creation, we have to play an active role. And that’s what we were
trying to do in Unilever. We tried to link
that to our brands– a corporate strategy that
obviously was more responsible, and frankly, it was
an audacious plan when we launched it, lots of
cynic skeptics, such as you would expect. AMY EDMONDSON: Internally
and externally? PAUL POLMAN: Yeah, broadly,
because it was a different way, and I was really disenfighting
some of our shareholders. I was making it clear what
type of shareholders we wanted. Most of the CEOs will
have such a short tenure that they dance to the pipes
of their current shareholders. But, as I was really
saying, if you don’t like what we were doing,
put your money somewhere else. And I discovered
naively it was easier to get rid of shareholders
than to attract new ones. But it had to be done. It had to be done. And slowly but surely,
we built up the company. And I was very blessed that
we had very good people. We brought very good people in. And the results came in– and at the end of the
day, it’s probably the results that carried
even the skeptics that had enough of a critical mass to
keep accelerating our program. If I regret anything is that in
the crisis when I came in 2007, 2008, the situation globally
was probably quite difficult. It was quite difficult.
Many companies were hunkering down
and cutting cost, and we were coming in
with a growth strategy. But probably this Unilever
sustainable living plan that we put out
there in hindsight wasn’t even aggressive enough. Although it made us feel
uncomfortable at that time, I still would have said, if I
looked back in these 10 years, we could have done more. AMY EDMONDSON: And
even more aggressive. How long did you focus on
Unilever and revitalizing its growth and its sense of
purpose before going outward? PAUL POLMAN: Well, I
would be a great study case for your school because
I definitely have an attention deficit syndrome. So when I– in Unilever, when
we rolled out the sustainable development plan,
and the company– after a few years we
got the company back into a good strategy
and in growth, and we then added some
elements, especially the elements of human rights
in our value chain, as well, which came really after the
collapse of the Rana Plaza factory. 1,050 women unnecessarily
lost their life. So I think we hired someone– worked with John Ruggie
and others and really– so that was a very important
moment to strengthen, not only the economic and
the environmental part of our program but
also the social part. We were probably a
little bit ahead. We still are the
only company that have issued twice a human rights
report, which is a little bit regretful that we didn’t
get more companies to follow us on that. But then I discovered–
or collectively we discovered, obviously–
that in order to really have the changes that
impact, we needed to move from, not only getting our
own house in order, not only working
our own value chain, not only doing a certain
amount of advocacy, but that we really needed
to focus on the more transformative changes. And Viktor Frankl, when he
wrote his book Man’s Search for Meaning, he
said very well, when they built the Statue of Liberty
on the East Coast of the United States, they forgot to build
the statue of responsibility on the West Coast. So I feel very much that we have
had enormous liberty that we got to be in 190 countries, to
serve 2.5 billion people a day with our products,
that there is also an immense level
of responsibility. So we started to look
more at how could we use the size and
scale of Unilever to drive this
transformative change. We created a global
consumer goods forum. It was all of the major consumer
goods companies in there. We had to make commitments to
stop deforestation by 2020. We created the human
rights standards at the whole industry. We put simple things
together, let’s say the Cokes, the Pepsis, the
Nestles, and us, and Chainster, the Cabinets, to
natural refrigerants. That’s 3% of global warming. So we created these
alliances that allowed us to drive more
of these step changes. And that became
more interesting, because I then discovered,
after five years or so, that I could use the size
and scale of Unilever to drive these more
transformative changes. But then after 10
years, sort of, I came to the conclusion– first
of all, 10 years is great, and we were very blessed
that we have a great leader that we developed
internally, Alan Jope. And he was ready to take over. And then you have
to step aside– that’s the institution
that comes first. But also, I felt the
shackles of Unilever would prevent me from doing
some of the things that need to be done to drive more
of these transformative changes now at a global level. So we created a broad
network in Unilever, certainly in the
last five years, working with many
people in partnerships. But now that needs
to be stepped up, so that’s what I will
be focusing on next. AMY EDMONDSON: And
that’s terrific. So let’s go back to coming on
board Unilever and deciding– I think you’ve referred to
this as a culture of purpose, and using those
words and deciding– so I love the emphasis on
actions, not just words, but words matter too. Words are one of the tools
you have for influence. So after that, after
sort of coming on board and announcing this
new way of working, how did you figure
out priorities? How did you establish
your priorities? PAUL POLMAN: We didn’t, really. I’m not going to
rewrite history and try to get a hero and
the smartest CEO that you’ve ever interviewed,
because you’d be disappointed. We really– we
started something that made us feel uncomfortable. And for me, the threshold was,
could I get the leadership team to a point where they
would be uncomfortable, where they would
have the courage to move forward at a
bigger and faster scale than they otherwise would? They’re smart enough,
and also in our system, to figure out how to
do it and to fine-tune, and that’s obviously happened. We made mistakes. We learned some things. And that’s what you get anyway
when you charter a new path that nobody has tried to– it’s also full of
skeptics and cynics. So for that reason,
you need to be driven by a stronger sense of
purpose and a bigger picture. And that purpose
very much resonated. Half of our people
are millennials, and they’re very
much purpose driven. They want to join
companies where they can make a difference in life. They want to leave this world
in a little bit better place than they found it. And I found it relatively easy
to communicate our purpose. But for us was really
making hygiene commonplace, if you want to. And we translated that
into growing our business, but decoupling our growth
from an environmental impact and increasing the overall
social impact, which for us was actually reaching
a billion people, improving their
health and well-being. We had Reeds at that
time as a company, probably was the best
of our efforts over 100 plus year period,
about 30 million people that we had on hand washing. And so when we put this
billion target out there, it’s a little bit audacious,
because no government can do it. But looking back
into now 10 years, we’ve reached about
750 million people. And I’m convinced
that some people would say that’s a big failure
of 25%, or whatever you want to calculate it. But coming from 30
million after 100 years, and doing it in 10 years
the other 750 million, it has created an
aspirational mindset, and that’s with things
like oral hygiene, or hand washing,
nutritional programs. And they’re very much
embedded into our brands. And they’re very much into
the footprint where we are, which is about 60%
of our business is in the emerging markets. We like that. AMY EDMONDSON: Wonderful
to hear you keep saying we. You have not left. PAUL POLMAN: Well, the
we comes from that nobody can do it alone. My job is the easiest. AMY EDMONDSON: Well,
that’s true too. PAUL POLMAN: So
it’s a different we. My job is the easiest
job in the company. I very quickly discovered that. I knew the least in the company. I didn’t tell it
to too many people, that would’ve frightened them. But my finance manager knew
more about finance than I did. The people that run our regions
knew more about these regions. The people that run brands like
Dove, Knorr, or any other ones, know more about these brands. So quickly you discover
that you don’t know much. And so your task is really to
ensure that the system works, that you put yourself to the
service of the organization. And the more you
actually do that, the better results you get. And I was very blessed
that we, indeed, had 170,000 wonderful people
that made that possible. These businesses cannot be run
by rules, laws, or regulations. If you do that, you
stifle innovation, you’ll kill the company. But if you run it on
principles and purpose, and if that purpose captures
the hearts of people, you can get amazing results. Leadership is– people would
use the word courage, perhaps, when you talk about leadership. But they forgot to go back
to the origins, perhaps, of the word courage, which comes
from the French word “coeur.” So it’s as much the
brain and the heart. So what we were
trying to do was that. The first thing we
did when I came in– I was very blessed
in my previous life to have met Bill George. And Bill was at that time
still the CEO, chairman, of Medtronic. And they made pacemakers. And they had a factory in Rome. At that time, I was
working in Geneva and chairing the
Chamber of Commerce. And I said– every quarter
or so, I invited people in that impressed me to
talk to our employees and get a little
piece of knowledge. And Bill came in,
and then he said, come to my factory in Rome. I went there with a
different mindset, because it’s pacemakers
total quality control. You cannot get a hair to
come in, because the– but what really impressed
me, and what they left to us was– every quarter
they had someone come in that had gotten
one of their pacemakers. At that time when
I was there, it was a woman, a
wonderful woman, and she talked about how it saved her
life, how it connected her with her family again
and all the other things. So he succeeded in
bringing purpose right in the middle of the company. And then he wrote his
wonderful book True North. And so I said to Bill,
you need to help me because we need to create
a cadre of leaders. And the first thing to
do to create good leaders is to know yourself. I don’t think you
can be a good leader if you’re not a good human being
and you don’t know yourself. So we spent– with our top
team, the first year with Bill and others creating this– finding your own crucibles
and all the other things. We saw that in some people
changing their careers, some even leaving the company. But it’s important that
you find out who you are and what makes you motivated. And then the second
year it was about, how do you use that
to influence others? And in the third year,
how do you get results? So we were very patiently
building this up. And our thrive programs
and purpose programs, that we still have currently,
are the highest score programs. So at the end of the
day, it’s about you finding what makes you tick. And if you then can
collectively get that energy behind a common purpose
that is strong enough, you can move mountains. And that’s what we were trying
to do with Unilever, thanks to so many people that
bought into that– Not always easy. And obviously, you’re very
demanding in the results as well. But it’s surprising to me
how much that unlocks– our engagement scores have– I should go back. We got 2 million people applying
to us every year to work. And we are the third most
looked up company after Google and Apple on LinkedIn. AMY EDMONDSON: Wow. PAUL POLMAN: And we are
not a company brand, like Google or Apple. And we get 2 million
people applying to us. Obviously, we cannot
hire 2 million people, but that’s an enormous
movement itself for people. And they apply because of the
Unilever sustainable living plan. And then, within the company– in most countries, we would
be preferred employers. And an engagement score of 96%. We’re always 100 on Glassdoor. So with the changes
that are there, with the pressures
that people have, if you want an organization
to function, you need to– since we are in the
health sector here now, you need to have your
physical well-being. You have to have your
emotional well-being. You probably have to have
your mental well-being. But you also need to have
your spiritual, or purpose, well-being. If you miss that
pyramid, I don’t think you can perform
to the maximum level. And that’s what we were trying
to create in the company. And by achieving some
of that, at least, we unlocked these results that
people think is impossible. AMY EDMONDSON: I
love the combination of starting with purpose
and the sense of purpose. And you had this natural
ability to connect Unilever to a sense of purpose by
virtue of its history. And then the audacious– PAUL POLMAN: Yeah,
but if a company doesn’t have a purpose, what’s
the purpose of the company? AMY EDMONDSON: There you go. PAUL POLMAN: Why do we have
come around in the first place, you see? If it’s only to make
some people richer, you shouldn’t buy from them. If it’s to make this planet
worse than what we inherited, you shouldn’t buy from them. We’ve done more damage to this
planet in the last 20 years than in its 5 billion
years of existence. So if we think it’s cool
to buy a $1 t-shirt, then someone else
dies in Bangladesh. That’s your decision, but
then you’re a murderer. So we should be very
careful what we do and which companies
we should let be around and use our
purchasing power as one of the most important things. We’ve seen the market of
ethical products move very fast. We’ve seen people
finding out more of what companies are doing. We’re seeing the investment
community getting interested. So broadly, people are starting
to realize what we need to do. You won’t meet many CEOs
who want more air pollution, or more people
unemployed, or more people going to bed hungry. But collectively, we’re not
able to solve the issues at the scale and
speed that is needed. So we should not give ourselves
too high a scorecard, Unilever. I’ve often said
during my tenure, if Unilever does
all these things and scoops up all the
prices, but nobody else does, I still can’t go home and
look my children in the eye. We failed. We failed. AMY EDMONDSON: We
will have failed. Is the audaciousness
of the goals– of the goals in terms of
the numbers of customers you would influence–
is part of it? And then you have written in
the past that the problems we face– and I think you mean
society, humanity as a whole– are so big, so
challenging, there’s a certain humility in
recognizing you just can’t go after them alone. And that would be
alone as an individual, but also alone as a company,
even an enormous company like Unilever. PAUL POLMAN: For sure. When we launched the
Sustainable Living plan, which had 50
targets, because I also believed at that
time that we needed to be more transparent because
it’s that transparency that builds trust that is that
basis for prosperity. So the more transparent
you operate, actually the better you
will be able to function. But what we said– we said
two things at that time, which actually have
surprised me, we said, we don’t have all the
answers, which was apparently the first time they
heard a CEO say they don’t have all the answers. But it’s a separate
interview by itself. And the second thing is
that we can’t do it alone. These issues are just
of such magnitude. Einstein said it well of,
the definition of insanity is to do the same things over
and over again and expect a different result–
is not going to work. So we have to come
together as adults. And we have to start
working at different levels than what we did before– forge these broader partnerships
and have more audacious goals behind that. And the more you
bring people together from the public sector,
from the private sector, from civil society, the more
you can actually achieve. In Africa, they have a
wonderful proverb that says, if you want to go
fast, you go alone, but if you want to go
far, you go together. And we have certainly seen
that happening in our case. AMY EDMONDSON: How did you think
about forging partnerships? How do you go about picking
partners with whom to work and then building
that relationship? PAUL POLMAN: Well,
firstly, there’s a collective level of
modesty and humility, because the challenge
with these big companies is that you think that you
might have the answers, or that you think you
have the dollars to spend, so that gives you then
also the share of voice. We have to be very careful. It starts with
defining the problems and linking these
problems to some of our brands to solve them. And then if 1 and 1/2
billion people in this world know access to clean
drinking water or sanitation would be a problem. 4 billion children
dying before the age of 5 of infectious
diseases, like pneumonia, diarrhea, would be a problem. 90% of the people
that are subsistent are living in situations
of food security, stress– would be subsistent farmers. So the world has
enough to go by– you need to pick which is
relevant for your company. And then you see
that these enormous– what you might call
problems are actually enormous opportunities. And in order to get to
those opportunities, especially the bottom 2
and 1/2 billion people on the pyramid, if you want to–
you need to work in partnership and find people that
have the common goal. So fairly quickly, we
identified 5 great organizations that we thought had
the skill globally– UNICEF, Save the Children. We did some in water. We had Oxfam. And so we took these partners
and put programs behind it– with them, and
they became better because these people were
closer to the reality of the situation. AMY EDMONDSON: And that’s
cross-sector as well? PAUL POLMAN: Cross-sector. And then we worked with
the development agencies– a very big partnerships–
was different. We created a
transform partnership that is trying to
beat and improve the lives of 100 million people. We worked at that time– Mr. Clinton Foundation. We were one of the biggest
partners when Russia was running US Aid and programs
on hand washing and sanitation, for example. So we forged these
partnerships to go at scale. Miriam, who was here, we were
running in South Africa– partnerships with all the public
schools was the government. But you need to work
with the government. Otherwise, how can you get
into the public schools? You need to work with
these NGOs that can do the training and so forth. And when you form
these partnerships, they become better. They also become more embedded. They don’t depend on
the flavor of the week, or whatever the CEO thinks
it’s cool this time, and then tomorrow
something else. So you create societies. You create societies. And that is what you want. And the more you create that
and lift people out of poverty, the better you’re off
yourselves as well. We’re building now a tea
plantation in Rwanda, that I agreed with
Sir Paul Kagame that the youth unemployment
in Africa is a big issue. It will have half of the
world’s youth in 30 years time. You see the problems
already coming in right now. So working on
agriculture and thinking about creating smallholder
farmer jobs is very important. The reason I wanted Unilever
to stay in the tea business and expand it was not
actually to sell more tea, that’s for other
people to figure out, and we have a lot of
good people to do that, but this tea is ideal to create
jobs for smallholder farmers. You can give them
two acres, and you do soil management, pesticide
management, drought resistant bushes and all the things
that we know how to do, and you can create livelihoods. So for me it’s a
question of livelihoods. I measure success in the
billions of people we touch. AMY EDMONDSON: Wow. And going forward. And going forward. PAUL POLMAN: Yeah. Unfortunately, too many
people measure success in the billions of
dollars they make. So as long as you
measure self-worth by net-worth, so to speak,
I think as a society, we have a chance. AMY EDMONDSON: The metrics
really matter, clearly. How do you think
about getting people to adopt to different metrics? Because we seem to
be absolutely wedded to the financial metrics. PAUL POLMAN: Yeah, we
define that narrowly– success. There’s no question about it. When GDP was invented around
the World War– actually, it was invented in the US– it was meant as a measure
of industrial output. But the guy who invented it–
his name escapes me now– was very clear
that you shouldn’t use that to measure the
health of an economy. We don’t measure clear air. We don’t measure
quality of education. In fact, the more wars we make,
the better it is for our GDP. The oil spill of BP in the Gulf
added 2.5 percentage points to the GDP growth of the US. But if we take care of our
forests and protect them, it doesn’t get into their GDP. So we have a weird
definition of success. And that is why many
people are looking at a concept of GDP plus. At that time, Bhutan, with
its National Happiness Index, was being laughed about,
but it has a lot of sense. So capitalism can function if
we move the definition, not only from maximizing return
on financial capital but if we also move it to social
and environmental capital, then capitalism can function. Right now in the US, even,
a country by accidents and capitalism– at least that’s
the label you give yourself– only 15% of the people
believe that capitalism is working for them. And you see the stress,
the stress in the system, in the political system, and
everything coming out of it. So if we say to capitalists,
optimize, not only financial capital but
also economic and social, we can solve it. So one of the things we,
for example, need to do is in just redefining
value as, for example, putting a price on carbon. The main issue that
we’re currently struggling with in terms of
priorities is climate change. It’s a tremendous
pressure on society. And that if we don’t
come to grips with that and stay below the
1 and 1/2 degrees, all the other things
that we’re working on doesn’t mean anything. That’s why Greta Thunberg, the
Swedish girl from 16 years old, said, why do we go to school? She has a very good point. It doesn’t make any
sense to go to school if you know that you
can’t live in this world 30 years from now. You might as well
then do other things and enjoy the few moments
you still have to live. But this is the seriousness
of what we have collectively created. So climate change is probably
one of our major issues that need to be tackled first. We are aware on the trajectory
of well above 3 degrees, which is insurable and unlivable. The WWF, World Wildlife
Fund, put a report out called The Living Planet
in September, October, and we are losing
species at 1,000 times the normal rate already today. And at one point
in time you might have to ask yourself the
question, when is it our time? It’s not a battle
between men and nature. It’s a battle for our survival,
and nature will be there. Hubert Reeves, who was a
philosopher in Canada– he put it very well– he said, a
man is the most insane species, he worships an invisible God
and destroys a visible nature, not realizing that the
visible nature he destroys is the invisible God he
worships in the first place. So that’s what we
need to correct. As long as a dead
tree is valued higher than a tree that’s
alive, we’re in trouble. AMY EDMONDSON:
That’s absolutely– and that’s the truth. That’s the fact. PAUL POLMAN: So we have
to start valuing it. We have to put it
into our accounting. And efforts are
starting to happen– SASB, Accounting
for Sustainability, just price theory, The
World Benchmarking Alliance. And so many efforts
are popping up because people know
what needs to happen. But now we need to aggregate
that same thing again for scale and impact. AMY EDMONDSON: Yes. So how do you see the
sustainable development groups, sort of, developing over
the next 5 or 10 years? PAUL POLMAN: So in the
absence of governments not functioning
very well globally, we have a unique opportunity
that in September, 2015, 193 countries were at the
UN, including the pope, and they signed what was called
the Sustainable Development Goals. I have the pin here on my
lapel, which is 17 goals. And the goals– overall
objective of the goals is to irreversibly eradicate
poverty and do that in a more sustainable and equitable way. So in other words, not
to leave anybody behind. These are 17 goals. So at a time that the
world doesn’t function, that we have a hard
time to deal with issues at a global governance
level, we at least have these goals, this
moral framework to go by. And the more companies,
obviously, they have to play an active
role, and governments, we get interested, aware
of these calls, also to understand the potential
that is behind these calls. Then, hopefully, we can unlock
it increasingly at scale, as you’re asking for. We are now at the
point, sadly enough, that to implement these
sustainable goals would cost about $3 to $5 trillion a year. And we have a hard time
now getting agreements to move that forward
as, you know. And climate change, this country
would be an example of that. Although there’s a lot
of good things happening, your government is not
exactly cooperating. And but on each
of these 17 goals, we are willing
already today to incur costs that are higher
than the implementation of the total of those. So whilst you might not
have enough people that might have their moral
compass, like Bill George would be talking about, or their
true north is very straight. There are enough, then,
that might become more aware of the economic case. As I said, it costs
$3 to $5 trillion. This world currently
spends $9 to $11 trillion on conflict prevention and
wars, and the numbers go up. That’s 9% to 11%
of the global GDP that we are willing to spend
on consequences without really taking the time to go on
the underlying causes. And this is a challenge, because
the political environment has become shorter
and shorter term. If you find a politician that
can think beyond three months, you’re lucky. So it is a moment,
that politics being difficult, that we need to
put other people together, including the private
sector, to start to de-risk this
political process, and to be able to still
have people focus, not only on the symptoms and
panic with short-term actions, wrong legislations, but
that we really take time to look at these
underlying causes and try to address those. AMY EDMONDSON: Do you
have recommendations for other CEOs today who would
like to follow along this path and create a culture
of sustainability? PAUL POLMAN: Well, there’s
a lot of good CEOs, and that’s obviously– they might not all get
their share of voice, but we’re very
blessed with a lot of good people in this world. And many of them are
actively involved, usually, in one part of the
Sustainable Development Goals, or things that are relevant
for their businesses. And that’s the
right thing to do– driving it into
their value chains. And so there’s a lot of
good things happening. We need more CEOs that actually
will go beyond their companies to drive this broader
transformative change. That’s one of the reasons
I took the shackles off, because we need more people. That’s one of the reasons we
created the B team globally, where we take about
20 of the most courageous CEOs, the Richard
Bransons, Marc Benioff here, Mo Ibrahims, Ratan Tatas,
myself and others to be a little bit more
courageous– courageous on things that count. The first things that
count is basic protection of human rights and
dignity and standing up when countries like– we now see countries
reintroducing the Sharia laws, for example. Or there are still countries
that have the death penalty for LGBT communities. Or people deprived
from the basic dignity of having food when
they go to bed at night. So we have to fight for them
and create space and deal with these governments,
corruption, transparency. So we have a group of courageous
leaders that goes beyond, but it’s no question
in this world right now that we are
short of leaders and trees, and that’s why we
need to invest in it. And your series that
you’re doing here and our ability to talk to
the younger student community is also partly an effort
to create these broader purpose driven, longer
term, intergenerationally focused leaders. AMY EDMONDSON: That’s
quite a category. I think we could have
a course on that. PAUL POLMAN: Yes, yes. I’d take it. AMY EDMONDSON:
What’s on your mind? As we finish this
conversation, we get close to
running out of time, what should people
really take away? PAUL POLMAN: Well, it’s
too late to be a pessimist. But what is on my
mind is really is, how can we create these
tipping points around things that count? And how can we use some of
the moments that we now have? The G7 coming up,
the climate summit of the secretary general,
the fact that countries need to resubmit their SDGs,
and actually Paris plans at the same time in 2020– an important year. How can we ratchet that
up and rise to the level of what humanity expects us to? If we do, we will also
have a better situation where, by including more
of our fellow citizens, I think we’ll also stabilize
and make the political system stronger again. And we, hopefully, then also
protect this wonderful planet Earth for future generations. So what we need is more
purpose driven leaders. We need people that
really stand up and go beyond their own
circle of influence and actually enlarge that. And that’s what I
remind everybody of. My father worked in a factory. We had six children at home. I wouldn’t have
been sitting here if I wasn’t born
in the Netherlands where education was free, where
we had a piece of bar soap, where we worked hard for
peace, because I was born just after the Second World War. My parents didn’t
have the education because they were deprived
of that from the war, so they invested heavily in
us to be sure that we got it. And so they put the common goods
ahead of their own interest, and they’re better off for it. And we need now to go
back a little bit more to getting these leaders
that understand truly that not only you need
to be a human being, but you also need to put the
interests of others ahead. Dalai Lama said it
well when he said that if you seek
enlightenment just to enhance yourself or your own– for your own benefit,
you miss purpose, but if you seek enlightenment
to help others reach their goals and objectives, then
you are with purpose. And I think that’s
what we need to do. We need to create more
people with a stronger sense of purpose. AMY EDMONDSON:
Leadership is the act of harnessing others’ efforts
to achieve something important, I think. And that’s what you’ve
done within the company and beyond the company, which
is just such a powerful model. PAUL POLMAN: Yeah. It goes beyond giving
energy to others. It is actually unleashing
energy in others. So this a different– AMY EDMONDSON: And
then harnessing it in the direction
that is going to– PAUL POLMAN: But very much
starting from the individual. The three basic drivers
that we need to keep in mind is that we fight for dignity
and respect for everybody. Wherever we are,
wherever we are born, there are some basics that
we should give everybody– that we fight for equity. Men and women,
same rights, would be a good example of that. And that we operate with
a high level of compassion where we can put ourselves
into the shoes of others. And we are the very fortunate
ones, so life is good for us. But we need to
spend our time then being sure that it is
also good for others. And during at least my
10-year tenure in Unilever, which has had difficult times,
easier times, and challenges and all that, at
least I’ve always tried to keep in mind that
we are there for a bigger issue than what I sometimes
felt– was I feel sorry for myself, or these are
the biggest challenges, why do I get them? My wife and I have a foundation. Miriam is actually on
our board for blind. We now have 25,000 children
that are officially impaired in Africa in schools. But if you see blind and
deaf-blind and you see people working with them at pittance of
salaries and you see these kids wanting to be
teachers and educate– ministers of education. The other day one wanted to
be a doctor or a veterinarian, et cetera, then you just
know what life is all about. And if you keep that
in mind, you keep– as we see in our part of the
country, where I come from, you keep both feet
on the ground. And that’s what we
should be doing. AMY EDMONDSON: That’s where
true joy comes from as well. PAUL POLMAN: Ultimately,
it’s very selfish. Going back to selfish. AMY EDMONDSON: Did
you find you had to convince people that what
you were saying made sense? Or was it– PAUL POLMAN: Well, probably
some people were probably a little bit more
uncomfortable, so you have to deal with that
level of discomfort. You have to give timelines. You have to give capabilities. It’s not that people disagree
in essence what you try to do. It’s just that you
need to then also be sure that people have the tools
and the structures to do it. Hence, not doing quarterly
reporting removes, for example, a boundary, or compensation
systems that are different, could affect
different behaviors. So you need to internalize
those challenges yourselves and put yourselves also
in the shoes of others. If you’re a procurement
person, then they get enormous pressure to get
the lowest cost ingredients all the time, because there’s
profit pressure on the quarter, or that needs to be maximized. It’s difficult to invest in some
of these transitional programs that some of them undoubtedly
will cost more money. You might be better off
at the end of the tunnel, but some work has to be
done in the beginning. So you need to put
capabilities in place. You need to put funds in
place– flexibilities. But I’ve always asked myself
a very simple question, we are willing to
invest in factories that pay out in three, five
years, if you’re lucky. We’re unwilling to invest in
IT systems that might be– less long now, but 10 years. We’re unwilling to invest
in training for people that might be 25 years
before you really reap all these full benefits. But for some reason, we
have a hard time investing in the future of humanity. It just doesn’t make sense. AMY EDMONDSON: It doesn’t
make sense, does it? PAUL POLMAN: It doesn’t. AMY EDMONDSON: But with– I hope and I actually believe
that more and more people are, as you’ve said
earlier, waking up to this opportunity,
and this message, and this responsibility. PAUL POLMAN: Yeah. I think it’s happening. It’s happening. And now we need to harness all
of that and drive it at speed. And this is where my
energy will be going. AMY EDMONDSON: How wonderful. Well, I have only time
left to say thank you. PAUL POLMAN: No, thank you. AMY EDMONDSON: It’s a
privilege and a pleasure. PAUL POLMAN: Thank you. I enjoyed it. AMY EDMONDSON: Yeah. Thank you. PAUL POLMAN: Thanks
for your time. [APPLAUSE]

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