Alan Jope talks with IRG founder Marc de Swaan Arons about personal purpose, what the pandemic taught Unilever, brand purpose, brands in politics, and the business case for sustainability.
The argument he returns to throughout is that credibility is built by action. Marketers mistake brand-say for brand-do, and you build credibility by what you do, not what you say.
Key findings
- Purpose is measured internally against a single survey question, and the people who score it highest are markedly higher on job satisfaction, advocacy, engagement, and likelihood to stay.
- Purposeful brands are about half the portfolio, and the growth gap between them and the rest widens year by year.
- The stakeholder model has seven parts, and employees are placed first without apology, on the business case that people who are looked after look after the business.
- The sustainability business case is stated in four parts: purposeful brands outgrow the rest, sustainable sourcing has taken about a billion euros of cost out of the company, it reduces risk, and it is a magnet for talent.
- Talent is where he puts the strongest number. A few years earlier the company was employer of choice in its sector in 17 of 54 countries where it runs graduate recruitment. Last year it topped its sector in 52 of them.
A purpose that took two years to correct
Unilever has run 45,000 people through full-day find your purpose workshops. Jope did his, came away with an articulation of his purpose, and took two years to realize it was wrong.
The version he arrived at on his own is to lead the adventure. He says it shows up in his personal life and his career, that he does not enjoy the routine side of business, and that the social contact of leading people is the most rewarding part of the job.
He traces the pattern backwards through his career: joining the company for a paycheck, asking to be sent to Southeast Asia, and at every move taking the unexpected choice, often crappy jobs in wonderful places.
The company’s position on the workshop is unusual. If someone realizes they cannot live their purpose at Unilever, both sides are better off parting, because the company does not want to be a prison.
What the pandemic proved
The first lesson is speed. A factory could be fired up in two days that would previously have taken two months to commission, and one brand went into 50 new countries in 100 days.
Seventy thousand people started working from home on two days’ notice without missing a beat, and factories ran through shutdowns, testing, and protective equipment.
The second lesson is about hierarchy. Everyone gets the same size box on a video call, and his view is that the traditional pyramid is doomed and that history will record the pandemic as a contributor to its death.
Growth patterns inverted by category, geography, and channel. Hygiene categories that normally grew 2 to 4 percent were growing 30 to 40 percent, while out-of-home food consumption struggled and e-commerce exploded.
He is careful about attributing that to skill. A lot of people are celebrating being geniuses and a lot are being ridiculed, when luck has a great role, and being naturally hedged was a discovery rather than a grand design.
What stakeholders now expect
On consumers he points to the digital lifestyle, growth in anything to do with health, wellbeing, and hygiene, and a rise in conscious consumption that every study now shows, driven mainly by young people.
His test for what sticks is historical. Consumer behavior changes that followed swine flu in China in 2010 are being replicated worldwide ten years later, which he uses to separate the permanent from the transitory.
With investors the change is stark. Two years earlier, ESG would be raised by a junior team member after the serious business had been discussed. Now he spends more time in every investor meeting on sustainability than on top line, bottom line, and cash.
With colleagues the commitment was made in the first week: jobs and incomes secure, including contractors, cafeteria workers, guards, and cleaners who do not directly work for the company.
The mechanism he invented was a weekly global town hall drawing 7,000 to 14,000 people, with 400 to 500 questions, publicly up-voted, so that ducking the top question is visible to everyone.
Brand purpose, earned
He treats purpose as an evolved version of clarity on the brand’s proposition, and says the proposition is by far the most important element of the mix because every other decision follows from it.
The right to campaign is earned by what the brand has done. A bleach brand can campaign on toilets because the company put 18 million toilets into homes. A soap brand can campaign on child mortality because it taught a billion people how to wash their hands.
The same logic covers Dove, which he says can talk with authority about girls’ self-esteem because it has taught 50 million girls one to one about unrealistic beauty stereotypes.
During the pandemic that credibility showed. A soap brand ran public service advertising telling people to use any brand of soap and named competitors, which he says was done with integrity and still looked good on the brand.
The failure he describes is a brand jumping on a bandwagon. Ben and Jerry’s had campaigned for years on climate, LGBTQI rights, and racial justice, but naming a British cabinet member over immigration provoked a backlash because the brand had not built the license to speak on that issue.
The consistency point follows. It takes decades to establish a thought, marketers get bored of their own messages and change them far too soon, and the reason Volvo means safety is that it talked about nothing else for 40 years.
Political issues, not party politics
His framing is that the two big issues are climate change and inequality, and that most other issues derive from them, so tackling them inevitably means entering political territory.
The line he draws is between political issues and party politics. Brands must take a view on political issues, but politics should be left to the politicians.
His example of it going right is a deodorant brand responding to a photograph of one of its cans left in the Capitol, which the brand team turned into a tweet calling for an orderly transition of power. It generated positive sentiment and coverage.
The reason he thinks it worked is that the brand did not originate it. Had it jumped in proactively, he says, they would have deserved to be pilloried.
The business case, and how it is embedded
Sustainability now runs through the brands rather than beside them. All of the major commitments are being driven by brands, and every brand needs a proposition, a purpose, and a product and packaging philosophy.
Each division carries its own platform, including people and planet-positive beauty, a more sustainable and plant-based food system, and a home care platform to replace fossil-derived chemicals with renewable or recycled carbon.
The cost curve is described as a leap of faith with an initial on-cost that disappears. The commitment to run all electricity from renewable sources was at a premium when made and is now a cost saving.
Climate risk is described as present rather than future. Sales in November were lower because of typhoons in Southeast Asia and the Philippines, and every month climate change reduces sales somewhere.
The conclusion he insists on is that none of this is driven by altruism or the moral high ground. It is driven by a hard business case, and the brands are starting to understand that.
The commitment is written into his own pay. A quarter of his reward has nothing to do with top or bottom line and comes from performance on the sustainability journey, and there is no longer a separate sustainability strategy.
Advice to marketers making the case
His first answer is that there is no point starting unless you believe sustainable, purposeful, multi-stakeholder business is better business, and he refuses the tradeoff question outright.
A CMO cannot carry it alone. There is no point championing the case unless the top team, including the chief executive, buys in, and that requires constructing a business case with a theory of change.
The link he insists on is to growth rather than margin. Company value creation comes from growth, and his summary is that growth is infinite and margin is not.
His counter-example to anyone saying it is easy for a consumer goods company is BP, whose chief executive committed to transitioning from fossil fuel extraction to integrated energy with disproportionate investment in renewables.
He traces the company’s own belief back to its founder, who in 1870 defined the mission as making cleanliness commonplace and lessening the load for women.
What he wants from a CMO
Some of it has not changed. Good marketers are curious about the world and genuinely interested in people, combine left and right brain skills, and focus ruthlessly on consumers rather than competitors.
What has changed is complexity. Marketers now have to be systems thinkers across the economic power shift east and south, the bio economy, and technology from AI to robotics.
He also expects the shape of business to change: networks of value exchange rather than standalone companies, agile teams rather than rigid hierarchies, collaborative networks of invention rather than standalone labs, and hybrid rather than fixed offices.
Linking any brand to societal expectations and to the expectations of young people is what he calls purpose, and he expects it to be a core marketing skill regardless of category.
The structural choice that follows is combining the chief digital transformation and chief marketing roles, because the company sees them as very related change agendas.
The person specification is about range rather than function: a proven business leader who has driven change at scale, a global citizen, someone who has repeatedly reinvented herself. He adds that there is no one size fits all.
Source
This page summarises Humanizing Growth Series: Alan Jope & Marc de Swaan Arons in conversation, by Alan Jope, Marc de Swaan Arons, 2020.