talent acquisition case study at unilever

JOSH BERSIN

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The Company As A Talent Marketplace: Unilever and Schneider Electric Show The Way

by joshbersin · Published July 17, 2019 · Updated August 30, 2019

Over the last ten years, we’ve seen a lot of digital business disruption. Amazon disrupted Wal-Mart. PayPal disrupted Visa. Tesla disrupted GM and Ford. And Facebook and Google disrupted just about everyone.

And this disruption was not just caused by good ideas: it is driven by speed. These disruptive companies have new ideas, they test them, and they execute faster than their entrenched competitors.

Why do existing companies take so long to react? Well as Clay Christensen describes in the Innovator’s Dilemma , large companies have lots of vested interests. It’s very hard for well-run, execution-focused companies to stop, think about something new, and start something different.

Many believe the problem is leadership: we need bold innovative leaders to drive change in older companies. But my research shows it’s actually something different. The entire management system is what gets in the way.m

Existing companies have business units, leaders, reward systems, and job roles that institutionalize the way they are now. This is all good for growth and scale, but they get in the way of new ideas. When you want to spin up a new idea, create a new product, and go after a new market, you have to break down all these silos. So this whole model of management has to change.

(This is the focus of a book I’ll be publishing with Harvard Publishing later this year.)

The New Idea:  Company As A Talent Network

In the old model of work, everyone had a job and a level, and each job reported to another. Managers were put in place to take responsibility for these hierarchies, and the managers are paid to make things happen. 

As an employee, you have a job in this hierarchy – and over time you progress through execution, growth, and relationships. You may work on cross-functional teams, but often these are “side jobs” and it’s your success in your main role that drives your promotion.

In a highly innovative company, however, we need things to happen faster. Google, for example, told everyone to take “20% time” so people could invent, create, and team on new ideas. So ten years ago or so we started the idea that companies are not really hierarchies, they’re networks . You do the job you have, but you also help other teams succeed as you go.

I wrote about this in 2017, and we found back then that around 6% of companies defined themselves as the picture on the right. Today it’s almost 35% of companies, and nearly everywhere I go people talk about “team-centric leadership,” “empowerment,” “network-based leadership,” and the need to build followership, agility, and project-based teams. (This will be the focus of my book coming out early next year by the way.)

In this new world, when the market demands a new product or service, we spin up a new team (we called it a “sprint” at Deloitte), assign people to work on it, and they go off and start something new. Sounds easy, right?

Network-Based Organizations Are Harder Than They Look

Despite many companys’ efforts to do this, it’s harder than it looks. Today Agile has become a popular new management practice (nearly every company is experimenting with it now), and companies often think “doing agile” means “becoming agile.”

It turns out this isn’t true.

Paul Cobban, the chief innovation and data officer at DBS in Singapore (the “ best digital bank in the world “), has led the company’s agile transformation. He explained how they created hundreds of small teams that did two-week sprints to simplify practices and make the business more efficient. Now, several years into this journey, he told me that ultimately it’s all about trust . People have to feel safe that taking time to work on new projects and speaking up about problems won’t hurt them.

And this means making it easy for people to take on new roles . In a company that has spent decades building job levels, rewards, and talent models the old way, that’s hard to change.

I talked with the CHRO of HPE in May of this year and she told me it was becoming nearly impossible to get people to take new assignments because everyone always wanted a promotion. “I’ll take that job if it’s a level up.” or “Is that a Director level job?” She told me they eventually decided to do away with the job titles (VP, Director, etc.) and reduced the number of levels dramatically.

But even that isn’t enough. We need tools that help people find the job they want (and the job that’s right for them), look for projects in their career interest, and give people development and rewards to help them work in an agile way.

Suppose you need a team to market a new global toothpaste? Can you just “borrow” the experts from other consumer products groups to help you get this done? Will their managers let them go?

Unilever sells hundreds of products in thousands of locations and is constantly looking for creative people, marketing managers, channel managers, and designers to build new things. And their employees thrive on such change: they want to learn and grow. How do we make these projects and jobs available and help people find the right ones to take?

Schneider Electric, a leader in energy management and automation products and services, has precisely the same problem. While the company’s products are well established in many markets, the senior leaders realized they needed far different strategies and skills in different markets. With the company originally headquartered in Paris, how could they find people to move to different markets, take on new jobs / projects, and motivate them to move fast when all these middle managers were in the way?

I’d argue that you all have this problem. Digital business models have forced us all to be more agile and team-oriented, yet our management practices and job roles get in the way.

HR and Management Tools Have Been Behind

I’ve had this conversation with leaders at Cisco many times. Cisco, a company that has grown and adapted through hundreds of acquisitions, prides itself on talent mobility. One of the leaders told me that at Cisco you can take any job you want in the company, as long as you’ve spent two years at the one you’re in. Your manager can’t stop you from taking another job, and internal mobility is highly valued. 

So Cisco went out to find management tools that would make this easy. Did they find any? No, not really. All the traditional HR management and work management systems are built around the hierarchy, so Cisco found they had thousands of teams which were not recorded in any system at all. (Cisco has now implemented a new team-based solution to try to fix this).

Can you just post these opportunities in the internal job board? Of course, you can – companies do this all the time. But do you know how hard it is to find a job in the company website? And would the hiring manager even hire you if you applied?

In the latest study I did with Deloitte, we found that almost 65% of companies told us “it’s easier to find a job outside the company than to find one inside,” so this problem has definitely not been solved.

And how do you find the “right” job or project for you? Just like we have AI tools to help candidates find jobs, we need algorithms that help me find the “best project” for my needs, so I can make sure I”m working on something I want, in the career path I desire.  ( Read more about career management here .)

This kind of software was never imagined ten years ago when talent management tools were built. But today, I”m excited to say, they’re starting to arrive. Workday has an effort underway to build its own Talent Marketplace solution, and vendors like Instructure, Fuel50, Phenom People, AllyO, and Beamery are working on this.

But right now the leader in the market is Gloat, an Israeli-headquartered company that recently launched a product called InnerMobility . Let me show you how it works.

Unilever: A Company Built For Purpose

Unilever is one of the most interesting companies in the world. As a consumer products company, you know it for Dove Soap or Lipton Tea. But in reality, this is a purpose-driven company, focused heavily on bringing purposeful and sustainable products into our lives.

I won’t take you through the history ( it’s fascinating to read ), but suffice it to say the company acts “locally” in every geography, working hard to build a management structure which is inclusive, diverse, purposeful, and growth-oriented.

Consumer product companies are among the most dynamic businesses in the world, and they attract ambitious, hard-working people. So as they grow, acquire, and adapt they need to constantly give people new opportunities, making mobility and project work an imperative. 

Jeroen Wels, the head of Talent at Unilever, has been pioneering a new management system to do this – and it’s now public for all to see. They call it FLEX , and it’s a whole new way to work, develop people, and grow.

The way it works is simple. Employees are asked to build “purpose statements,” and share their skills and desired skills online. Using Gloat and other tools connected to Workday, every employee becomes part of Unilever’s talent network, and the system finds great projects to work on.

The goal of this system is not just to help people find good work, it’s to “democratize” the entire workplace, using AI to help people find the best possible work for the skills they have and the skills they want. Unilever already has 30,000 employees using the system, and Jeroen gave me examples of people in marketing, HR, and finance now doing project work. One marketing professional in the US took time to help a global innovation group build a go to market plan, a use-case common in many companies.

I asked Jeroen how managers feel about this, and he told me they’ve already built management practices that work. You as an employee can work on multiple projects at a time, and your manager knows what you’re doing. At the end of a period or end of a year, projects are reviewed.

Unilever calls it a talent marketplace because it lets any manager or team “shop for skills” inside the company. While I think this is an important element to the solution, I think it actually goes further. It’s “the new world of work,” and it unleashes energy, productivity, and growth. Already Unilever has unlocked 60,000+ hours of work that people want to do, and 95% of employees endorse the system.

Schneider Electric:  Global Mobility Explodes

The second company I want to highlight is Schneider Electric, another pioneer in their space. I  wrote about Schneider Electric’s  innovative diversity program late last year, and since then the company has moved fast. Olivier Blum, the CHRO, is one of the savviest business leaders I’ve met, and he also sees internal work management as a key to the company’s future.  (Olivier was awarded  CHRO of the Year in France  this year.)

Andrew Saidy, the head of talent digitization at Schneider, told me they found that 47% of people who leave exit because they couldn’t find an opportunity they wanted. With 140,000 global employees, the company needed a high-powered internal mobility program. 

They also started using Gloat, and are not only sharing jobs and projects but have also set up mentoring in their Open Talent Market system. They started with the 2,300 people in HR (where we are also working with Gloat on the Josh Bersin Academy, by the way), and then moved to UK, Ireland and Singapore with more than 5,500 employees. 

Their system is connected to Oracle Fusion, Taleo, and Cornerstone, and also serves as the employee’s primary system to find projects, assess skills, and look for mentors.

Here’s how it looks.

As you can see, Schneider also focuses on employee self-assessment, and encourages people to share their purpose and goals.

And as a talent network, it lets employees promote their skills to hiring managers..

And as a talent network, it lets employees promote their skills to hiring managers.

Andrew told me the platform has exploded with growth. More than 75% of employees already registered on the system, and like Unilever the company rewards people for project work and encourages people to loan their skills to others.

This Is The New World of Work: And It Is Here At Last

While internal mobility and project work has been around for decades, it is now central to success. In fact, the more “digital” your company becomes the more “project-based” it needs to be. So we need tools and systems to facilitate this new world of work, and I”m excited to see them here at last.

In conclusion, let me mention three important things driving this strategy forward.

• Engagement and Retention: in a tight labor market like we have today, developmental assignments and exciting projects are one of the most valuable opportunities you can provide. Creating a “talent network” in your company will greatly improve your retention.
• Development and Growth: yes everyone needs skills, but training alone is not enough. It’s the experiences and projects that help people learn, so these kinds of networks create expertise, a new breed of leaders , and depth in your organization.
• Business Agility and Innovation: when your people feel safe to try new things, contribute to other projects, and share their expertise they can innovate and solve problems faster than ever. This new network model of management will become essential in the future, and today it’s a way to grow.

As Paul Cobban told me last week, once the “digital mindset” started to grow at DBS, everyone wanted to work this way.

I want to thank Unilever and Schneider and Gloat for showing us the way. There’s still a lot to learn about running your company as a network, so stay tuned for more on this critical new model of management.

(The Bersin Academy program People as Competitive Advantage dives into this in detail – join us!)

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How Unilever Attracts Millennial Talent

From soap bars to food spreads, Unilever’s products are used by a third of the world’s population every day. They provide employment for 169,000 people worldwide - and its leaders estimate 60% of those employees will be Millennials in three years.

Most organizations still haven’t nailed Millennial hiring. Prior to adopting a more digital-friendly hiring process, Unilever’s Future Leaders Programme was one of these.

The Future Leaders Programme at Unilever recruits recent university graduates for seven core functions: marketing, customer development / sales, finance, HR, supply chain, research and development, and IT.

Every year Unilever receives over 250,000 applications for this prestigious program. From the quarter million-strong applicant pool, it selects only 800 for employment.

Let’s look at this hiring process, pre-transformation:

Over 50,000 candidates were interviewed over the phone annually. With each phone interview lasting an hour on average, it’s not hard to see how the hiring process could take half a year.

As you might imagine, transforming a hiring process at one of the world’s largest multinational companies is a huge undertaking. We’ve looked at how difficult process change and change management are before - so for HR departments struggling to get buy-in for their initiatives, there’s a lot to learn from Unilever.

In this case study from Bersin by Deloitte, you’ll discover:

• Unilever’s new hiring process: a system that saves $1 million/year, decreases hiring time by 83%, and appeals to a new generation of employees.
• How role-playing and localized meetings were used to drive global adoption and rollout.
• How HR leaders gained buy-in from key stakeholders and executives.
• Why Indonesia was used to pilot the new process , not the UK.

“We wanted to make sure that we would truly be selecting the best candidates from these interviews and to take any unconscious bias out the process. Video interviews were the core component here, and this was a big hurdle for some of our internal stakeholders to get over. We had to ensure we had a digital process, but one that that felt very human, not robotic, and it had to be better and more efficient at selecting candidates than an in-person interview. ” - Unilever’s Director of HR Services

Who should download this Bersin case study:

• Talent acquisition professionals having difficulty attracting Millennial talent.
• HR leaders struggling to get buy-in for their talent acquisition initiatives.
• Talent acquisition leaders looking for guidance on how to cut costs while increasing new hire quality and decreasing time to fill.
• Recruiters looking for examples of what the hiring process will look like in the future.
• Any organization facing roadblocks to the global rollout of new technology.

Download the full Bersin case study below.

Recruiting Millennials: How Unilever Transformed its Graduate Hiring

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Talent management as a business discipline: A conversation with Unilever CHRO Leena Nair

With 161,000 employees in more than 150 countries, Unilever operates globally and at scale. The consumer-goods group’s brands range from Lipton tea and Magnum ice cream to Surf laundry detergent and Dove skin care. Under the leadership of Paul Polman, chief executive since 2009, the Anglo-Dutch group has sought to drive growth though innovation and by actively reshaping its portfolio while reducing operational complexity and focusing on sustainability as a key theme.

Leena Nair, chief human resources officer (CHRO), joined Unilever in 1992 as a management trainee. Prior to taking on her current role, she was the group’s global head of diversity and inclusion. She says, “If you look at a competitive advantage that a company truly has, it is really only the ideas, the ingenuity, the passion of its people. Because everything else can be matched.”

In January 2018, Nair sat down with McKinsey Publishing’s Rik Kirkland to share her views on how HR leaders can play a key role in driving value creation by leveraging data analytics, focusing on the most important value-creating roles, and developing a close partnership with finance teams. The interview took place on the sidelines of the annual meeting of the World Economic Forum in Davos, Switzerland.

Interview transcript

McKinsey:  How do you view the relationship between the HR function and the finance function?

Leena Nair: I believe that the CFO and the CHRO have to be very close. Their agendas have to be intertwined. Graeme [Pitkethly, Unilever CFO] and I have ensured that a key finance person from his leadership team sits on my HR-leadership team and that key person from my HR-leadership team sits on his finance-leadership team. We also make sure that we have regular catch-ups, both with each other and with the CEO, to ensure that we’re looking at business strategy in totality.

We’re discussing how we want to deploy investment into certain countries, markets, and categories but at the same time seeing if there’s organizational readiness. Because if you invest but the people are not ready—if there’s not enough talent and capability there—we will never see the investments being turned into reality. So, making the strategic investments in financial capital and human capital at the same time is really important.

McKinsey: Can you give some examples of how this works in practice?

Leena Nair: When we have defined our key strategic levers for the year, we ask ourselves, “Which are the five or ten or 15 roles where the biggest impact of value creation in the business could be seen?” Then we use analytics to see whether we’re putting the right people into those roles.

For example, we look at what we call “stubborn cells”—parts of the company where we haven’t seen the traction and performance we would like to see. And we look at the talent that we’re putting into those roles, the teams we’re getting ready to take on these challenges. How equipped are they? What’s their level of readiness? What’s their level of capability? What’s their level of experience? What’s their level of passion and perseverance?

So, we look at these human dimensions through the data analysis we have and also look at the business challenges. Then we’re able to say that, for example, “This team created value equivalent to €100 million.” We’re able to link the appointments and placements of talent to the actual value creation that’s happening in the business.

McKinsey: Are you focusing mainly on key leadership roles in the organizational structure?

Leena Nair: Increasingly I find that we need to be far less hierarchy-conscious in the way we think about value creation. Often the value is being created in roles that are probably two or three clicks below the CEO.

In Unilever, we are creating multifunctional, empowered teams, which are actually the front-facing teams looking after a particular category in a particular country. In many cases, you find that the person in the country handling the P&L [profit and loss] might not be very senior in terms of hierarchy but is in the most important role to create value as part of one of our key strategic thrusts.

An agenda for the talent-first CEO

McKinsey: What role does analytics play in these conversations and decisions related to value creation?

Leena Nair: Most of the measures that you see HR teams looking at are very internal measures. What bench strength do we have? How many people do we have on a talent slate? These are very internal measures that don’t tell you what difference it’s making to the business. At Unilever, we are using people analytics to change this.

We are, for example, the number one employer of choice in 44 of the 52 markets we recruit in. This is great. It’s also a number I like because it’s externally measured, based on Nielsen Universal. But with the power of data and analytics, I’m able to connect the dots and show that in markets where we are more attractive, we are attracting the right kind of people, our costs of recruitment have fallen, our conversion rates have gone up, our recruitment yield is better. So, suddenly, I’m able to show the business that we’re saving €15 million because of the sheer strength of our employer brand in some of our key markets.

These are the kind of conversations that HR leaders must hold themselves and their teams accountable for.

McKinsey: The Unilever Sustainable Living Plan has been one of Paul Polman’s signature initiatives. What does the data tell you about the business impact?

Leena Nair: I passionately believe that the future is about meaningful work and purposeful work. Because the pace of change is so fast, people do tend to be overwhelmed and threatened. One of the things that can give them anchor is a sense of meaning and purpose in their role. It is a key part of our talent strategy to help people discover their own purpose and therefore deploy them into the roles where they can live their purpose.

And I see the results in our employee surveys. Ninety-two percent of people say that they’re proud to work for Unilever, they want to work for Unilever. Employee-engagement scores are higher than any of our peer and benchmark companies. I see that in the retention numbers—our talent attrition is far lower than the market in almost every market we operate in.

So, I see the impact of what a meaningful purpose does to employee engagement, motivation, attrition. And I passionately believe that companies with purpose last, brands with purpose grow, and people with purpose thrive in uncertain times.

Stay current on your favorite topics

Leena Nair is the chief human resources officer of Unilever. Rik Kirkland, a partner in McKinsey’s New York office , conducted this interview.

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Reimagining the employee experience

Understanding the challenges.

Unilever asked us for a vision for its employees globally – a world-class experience which would be dynamic and personalized.

Unilever saw an opportunity to simplify the way employees found information through its many processes, systems and content resources. They realized that such a change would also free up support agents’ time to focus on higher value human interactions.

To understand how the employees felt, we asked them directly. We conducted a qualitative study of one-to-one interviews with employees of all levels, across different markets.

Co-designing the vision

Using this valuable insight, Accenture worked collaboratively with Unilever to co-design their vision, including a Rumble™ that generated ideas to explore and develop. Our long-standing relationship with Unilever brought a deep understanding of their business, which, coupled with our service design approach, enabled the co-creation of a groundbreaking, real vision built on what mattered most to Unilever’s employees.

Unilever had articulated three core pillars that would inspire their new employee experience: human experiences, simple interactions, meaningful impact.

The “Employee Universe” was created to enable the vision, which comprised a matrix of interconnected components, fronted by a chatbot named Una. We created Una’s personality, and designed her human-like conversation to reinforce Unilever’s brand and values. Una becomes a personal assistant, guiding the employee to what they need in that moment. Her conversations were contextually relevant, and continuously improved through a built-in learning loop.

Test, learn and iterate

We ran a “Living Lab”, whereby we would rapidly test, assess and fine-tune throughout to ensure we maximized Una’s impact. We delivered a Proof of Value to demonstrate how new hires would feel about using AI chatbot technology to answer day-to-day queries and test and iterate the underpinning technology.

Employees who tested the pilot enjoyed their initial experience of using Una, giving her a rating of 4.6/5, and 85% employee satisfaction. Our vision and chatbot, plus Living Lab, became the foundation for a broader program of transforming the employee experience at Unilever.

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How Unilever Is Preparing for the Future of Work

How should the consumer goods company upscale its global workforce for the future?

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Launched in 2016, Unilever’s Future of Work initiative aimed to accelerate the speed of change throughout the organization and prepare its workforce for a digitalized and highly automated era. But despite its success over the last three years, the program still faces significant challenges in its implementation. How should Unilever, one of the world’s largest consumer goods companies, best prepare and upscale its workforce for the future? How should Unilever adapt and accelerate the speed of change throughout the organization? Is it even possible to lead a systematic, agile workforce transformation across several geographies while accounting for local context?

Harvard Business School professor and faculty co-chair of the Managing the Future of Work Project William Kerr and Patrick Hull , Unilever’s vice president of global learning and future of work, discuss how rapid advances in artificial intelligence, machine learning, and automation are changing the nature of work in the case, “ Unilever’s Response to the Future of Work .”

BRIAN KENNY: On November 30, 2022, OpenAI launched the latest version of ChatGPT, the largest and most powerful AI chatbot to date. Within a few days, more than a million people tested its ability to do the mundane things we really don’t like to do, such as writing emails, coding software, and scheduling meetings. Others upped the intelligence challenge by asking for sonnets and song lyrics, and even instructions on how to remove a peanut butter sandwich from a VCR in the style of King James. But once the novelty wore off, the reality set in. ChatGPT is a game changer, and yet another example of the potential for AI to change the way we live and work. And while we often view AI as improving how we live, we tend to think of it as destroying how we work, fears that are fueled by dire predictions of job eliminations in the tens of millions and the eradication of entire industries. And while it’s true that AI will continue to evolve and improve, eventually taking over many jobs that are currently performed by people, it will also create many work opportunities that don’t yet exist. Today on Cold Call , we welcome Professor William Kerr, joined by Patrick Hull of Unilever, to discuss the case, “Unilever’s Response to the Future of Work.” I’m your host, Brian Kenny, and you’re listening to Cold Call on the HBR Podcast Network. Professor Bill Kerr is the co-director of Harvard Business School’s Managing the Future of Work initiative. His research centers on how companies and economies explore new opportunities and generate growth, and he is a fellow podcaster. He hosts a show called Managing the Future of Work . Bill, thanks for being here.

Bill Kerr: Thanks for having us.

BRIAN KENNY: And Patrick Hull is Unilever’s VP of Global Learning and Future of Work. He goes by Paddy. Paddy, thanks for joining us.

PATRICK HULL: Thank you very much for having me.

BRIAN KENNY: It’s great to have you both here today. I think people will really be interested in hearing this case and how Unilever is thinking about the future of work. So why don’t we just dive right in. And, Bill, I’m going to ask you to start by telling us what the central issue is in the case, and what your cold call is to start the discussion in class.

Bill Kerr: Well, Brian, I think your introduction clearly outlined the central issue, which is technology is really transforming the world of work. And that means, companies must learn how to do things different than what they’ve done over 50 or a hundred year history. And it also means they must transform the skill base in how they’re approaching employees and talent. I think we can simply say: that ain’t easy, and it’s also going to introduce significant challenges and tensions for organizations. A big company like Unilever is going to really want to appeal to employees, put the purpose of the company in front of employees, embrace that, but it’s also going to have to make challenging decisions regarding employees and their transition of skills and what’s the future workforce going to look like. So the most common cold call is a really simple question, which is: has Unilever, through its Future of Work Program, resolved the paradox of profit and purpose? And pretty quickly, the answer to that is, “no.” It hasn’t fully resolved that. I will occasionally get maybe one person that goes all the way there. So then we’ve got to start unpacking, okay, how close is it to resolving that? And are we very near the end point or are we farther away?

BRIAN KENNY: Yeah. Simple question to you maybe, but probably not to others who are listening. That sounds like a pretty complex question. I mentioned your involvement with the Managing the Future of Work initiative here. So I know you think a lot about this. This is on your mind all the time. How did you hear about what Unilever was doing, and why was it important to you to write this case?

Bill Kerr: Well, it’s interesting. The history of the connection came through another case that we wrote. Very early in our project on Managing the Future of Work , we’re always very deliberate about putting the “managing” in front of the future of work, and that we want to think about how leading companies are reacting to the forces that are shaping the future, like digitization and demographic changes and so forth. So, we’ve written a case about Vodafone, which we did a Cold Call a while back. With Vittorio Colao. And Vittorio was on Unilever’s board and said, “You have got to go and meet this organization and see what they’re doing,” because they have one of the most comprehensive, well thought out programs for the future of work that he had come across. And in fact, that was the connection that then followed on. And yes, for a sector that Unilever’s working in that has end-to-end change going on from the manufacturers, all the way down through the consumers or the products, to be able to have an organization that’s thought very deeply about what pillars do we need to put into place to make the change occur is great. The other thing that was delightful about Unilever and writing this case study is that, a lot of times, companies want to talk about their programs, only after they know that it was a success. They would prefer to wait until they’ve… They’re like, wait another two years and then we’ll write the case study about this transformation. But Unilever’s been very upfront in saying, “The future of work’s a big challenge. We have to get in front of that. Here’s what we’re doing. We haven’t necessarily figured it all out yet, and some of this will prove wildly successful. Others may be challenging, but this is where we’re going.” And that’s been a great thing to really spark a lot of executives and students a conversation about, what will the future of work require, and how can we get there?

BRIAN KENNY: Yeah. So, Patty, I have to ask, I have to start by asking you, what’s your job? Because your title’s very lofty. It basically calls you a visionary. You are the VP of Global Learning and Future of Work. So what do you do?

PATRICK HULL: I’ve got a funny answer to that question. Since the pandemic, and obviously, been working a lot from home, and I work in a slightly open area, so my wife gets to hear a little bit of what I’m talking about. She seems to think that what I do is laugh a lot and chat a lot to people. So that’s what-

BRIAN KENNY: Kind of like we’re doing today. So, she’s listening in…

PATRICK HULL: She says, “When do you do some real work?” But yes, I guess what I do is work with a really passionate, dedicated team of people who are looking at how are we preparing our organization, and our people in particular, for a future that is very different to what we’ve been experiencing in our traditional work models up to this point. You mentioned ChatGPT as well. I mean, that really is the talk of the town at the moment. And I guess we’ve been thinking for a bit of time, as Bill mentioned, about the impact of things like that on our business, and trying to get on the forefront of what’s our response to that. So I wouldn’t quite say visionary. I think, at this stage in business and what’s going on, it’s quite hard to be truly visionary, but trying to stay one or two steps slightly ahead of what’s going on in the world of work, that’s, I guess, what my job’s all about.

BRIAN KENNY: Yeah. That’s great. For our listeners who… I think most people have heard of Unilever, but for people who aren’t really aware of the scope and scale of Unilever, can you describe the business for us a little bit?

PATRICK HULL: Yes. So we’re a fast moving consumer goods business. So most of you will probably interact with one of our brands or products every day. In fact, we say that we serve 3.4 billion people every day. That’s how often someone buys one of our products or uses one of our products. We’ve got about 400 brands in 190 countries across the world, ranging from global brands like Dove, Sunsilk, Hellmann’s, Rexona, all the way through to what we call local jewels like Marmite in the UK, which is one of those brands that you either love it or hate it.

BRIAN KENNY: How big is the workforce at Unilever?

PATRICK HULL: The workforce is about 149,000 people who are directly employed by us. But we always often speak about how we have an extended workforce of around 3 to 5 million people, who if you ask them who they work for, they would say Unilever, even though they’re actually employed by someone else.

BRIAN KENNY: Yeah. So we know Unilever well at Harvard Business School. We’ve had lots of cases written on over the years by our faculty, and we’ve actually talked about it on Cold Call before, particularly, the focus on sustainability. Unilever really stands out in this regard. And I wonder if you could talk a little bit about how important this is to the culture at Unilever.

PATRICK HULL: It is. I can’t tell you how important it is. In fact, when Paul Polman, previous CEO, came into the organization in 2009, he launched the Unilever Sustainable Living Plan in 2010. And he did this beautiful job when he launched it of reminding us that sustainability has been part of Unilever since day one. When Lord Leverhulme started selling Sunlight soap, his mission was to make cleanliness commonplace. That was back in the late 1800s. And what Paul did beautifully is he then simply shifted that a little bit and said, “We are now here to make sustainable living commonplace, because now we impact so many more people and so many more homes. If we can help every consumer out there make more sustainable choices with how they eat, how they clean, how they use plastic, how they use water, then we can have a massive impact, positive impact, on the planet and society, and that’s good for business.” That was the business model that we’ve ascribed to. So we hire on it. We are tracked on it. We develop on it. It’s definitely part of the way things get done here.

BRIAN KENNY: Bill, let me turn back to you for a second. The FMCG sector is fast moving, as it indicates. What are some of the forces that are putting pressure on that particular sector these days?

Bill Kerr: Yeah. The case outlines three forces, and let me walk through those and also say a little bit of, before I do that, why we think this sector’s amazing to watch. If you want to have a kind of front row seat as to how the future of work may play out in other sectors, I often direct them towards the fast moving consumer good sector because the technology forces, the demographic forces, the gig workplace force that we’ll talk about are all happening already. They’re deep into this sector, so we can learn a lot from it. So, the first one is clearly technology that links through all the way to our opening conversation. There’s many ways in which the touch points between consumers and the outlets and last mile delivery and drones possibly dropping off future packages reverberates all the way up through the supply chain to Unilever and its suppliers above. A simple kind of easy metric is, think about the speed that we now demand or expect of our package delivery. It’s no longer that we’re going to go to the store and pick this up and the store can replenish itself over a week-long horizon. It’s going to be, I just pressed the button in the app and I’m expecting it in the next five minutes to be handed to me. That puts a lot of demands on how an organization needs to function, and also increase the expectation about the customization and the personalized products that consumers will require. So, the technology requires Unilever to think differently. The second is a broader force, but equally as impactful, and even more predictable for the future, which is the role of aging populations and demographic change in the workplace that is quite different than the workplace of the 20th century, where many of the large companies today kind of got their grounding. One of the early kind of points that it makes is that, in the UK, about a third of the workforce currently is over the age of 50, and that’s true in most every advanced economy, as well as also, increasingly across East Asia and elsewhere, that we have older populations. We have workforces that are going to span many more generations in the workplace. And then the third one, which in our project, Managing the Future of Work , we think of as kind of an outcome of tech and demographics coming together is the gig workplace. Paddy talked about the extended workforce beyond Unilever, and the case tries to unpack some of the ways they’re approaching bringing people to work that aren’t the traditional full-time jobs that most companies got built up around. And the gig workplace is activated by that technology that lets us schedule and involve people in gig works. And also, as we think about low unemployment rates and older populations and tacked out and so forth, the degree that we can, as a company, attract in people that are currently not working or at the edge of working and tempt them to come work for us on projects is a very valuable labor supply to these organizations.

BRIAN KENNY: Paddy, you’re in it, literally. So what are you seeing as some of the things that have shifted over time?

PATRICK HULL: So, when I started, I’m going to give my age away here a little bit, but back in the 1990s, I remember us talking a lot about, how could we get direct to the consumer? Back in those days, we sold everything through big box retail, and it was all about maintaining those relationships, making sure you had great store shelf positioning and great relationships with those buyers. One of the most massive shifts is that direct to consumer is the channel now. Bill spoke about how we all just order stuff off Amazon directly. We don’t have any advantage anymore in terms of getting to consumers. You and I, any little startup, can throw some ads on Instagram, speak to a few influencers and start sending their products out. So the whole game has changed in terms of how are we reaching people.

BRIAN KENNY: And I can already imagine, just based on the examples you’ve both given, I’m already seeing areas where there would be churn in the workforce around some of these developments. So let’s talk a little bit about Unilever’s Future of Work plans. And there’s a framework that goes along with it. I wonder if you could describe that and talk about the three pillars that support that framework.

PATRICK HULL: Yes, our three pillars are: change the way we change, ignite lifelong learning, and redefining the Unilever system of work. And I’ll explain a little bit about each of those. So changing the way we change. The first one is, what we’ve realized is that change is continuous. Disruption is continuous in our organization. It’s not about standalone moments where we see that, oh, we need to shut down a factory or change something because of a dramatic shift. Change is happening all the time. All of our factories are rapidly automating all of our office processes, so we can’t stick to the old traditional model of change, which was a very slow moving consultative approach, and also, where management held its cards close to its chest until sort of the last moment and then announced, “This is happening.” We’ve realized that, really, to be true to our purpose around making sustainable living commonplace, we need to enter into a far more open, early, proactive dialogue with our people around the change that’s affecting our organization, and how to help start preparing them well in advance of any actual impact on them in terms of how they can prepare for that change. So that’s the first one, changing the way we change. The second one around igniting lifelong learning is about engaging with our people to make sure that they’re all equipped to thrive, both now and into the future, and that we are showing them a bit of what that future looks like and where they need to be focusing their attention. And then the third, redefining the whole system of work is a bit of what Bill was mentioning earlier. Here, we really want to embrace this notion of accessing talent rather than owning talent. We’ve felt that if we just keep on trying to hold onto all our FTEs and compete against everyone else with talent, we are never going to have the people and the skills in our organization that we need to take us forward into the future. So we really want to redefine new models of working, so it’s not just you’re either fixed or you’re a gig worker, but how can we find some flex in the middle that helps people transition out of this traditional life cycle of work, the kind of 40-hour, 40-week, 40-year traditional employment pattern, and help get them future fit for a hundred year life, where they may want to slowly move into retirement, where they may want to spend some time looking after their kids, where they may want to set up their side hustle. How do we create that sort of flexibility?

BRIAN KENNY: There’s definitely, and understandably, a lot of emotion involved with some of these things. And I’m wondering if maybe you could give our listeners a sense, based on all the research you’ve done in the initiative, about what kinds of jobs are going to go away, and what kinds of skills you think are going to be most important for people to think about in the future?

Bill Kerr: Well, Brian, I come back with, that we don’t think of jobs really going away. And I think it’s important to instead think of jobs as a collection of tasks. And certain tasks will be taken over by the machine and require less human input, as the technology gets more advanced. And that could be in a very manual kind of sense. It could also be with ChatGPT in a more cognitive relationship. And perhaps, the thing that we’re experiencing right now that’s very front and center in the world of work is, lots of ways that technology is coming in towards more cognitive tasks that are complex, they’re non-routine. They were not able to be done by the computer before, but artificial intelligence machine learning and so forth are able to take those off. So if you think about how supply chain forecasting will happen at Unilever, that’s going to be done in a fundamentally different way than it would’ve been even 10 years ago.

BRIAN KENNY: Sure.

Bill Kerr: But we always think about new tasks emerging, and it’s hard to predict exactly what those tasks will involve. When you think about the skills, we know that having digital fluency and also social skills are the two biggest things that you can put money on, bank on, those being important enough for the future. But there’s also going to be judgment, and there’s going to need to be innovativeness. So even if the computer starts to do a really good job at predicting about how salespeople should arrange the shelves or how they should approach consumers, you still have to think about, as an organization, what data are we feeding into the system? And where could Unilever develop a proprietary data advantage? And how would we collect those data streams and put them into it? So the technology will be there, it’s going to take over evermore parts of work as it has been for 150 years at this point, but there’ll also be places where humans will be complementing and helping to achieve the goals of the company.

BRIAN KENNY: So that’s an optimistic viewpoint, Paddy. And I’m wondering what the response is from people when you start to talk about these ideas with them. And how do you move them beyond just their own insecurity and concern for themselves, to really embrace learning new skills and thinking about a different way of working in the future?

PATRICK HULL: This is a fundamental dilemma facing us, Brian. I’m so glad you asked me that question. And whilst I don’t know if we’ve cracked it, I think we’ve got a really good hypothesis around what helps this. One of the things we know is, the way not to motivate people to learn new skills is to tell them, “You better re-skill or the robots are going to take your job away.” So we’ve taken the view that if we can help people to discover their purpose, what makes them unique, how do they approach work in their own way, and then start from that point and say, “Okay, when you are at your best, you are doing these things. How do we make sure that you are developing the skills in line with that, that are going to keep you future fit in an environment that is changing around you in terms of the nature of your job and how you work?” And we’ve found that when people come from that place of purpose, they do feel far more agency over it. They are far more motivated to learn new skills, to continue to be relevant, but it’s coming from a much more positive place. It’s not coming from that fight or flight or freeze sort of mode. It’s coming from a place of agency. And in fact, we partnered with some academic institutions to measure the impact of starting people thinking about purpose and then creating future fit plans from there. And we’ve found that it does lead to people being 25% more engaged in thinking about the future, in going the extra mile, in having this intrinsic motivation to take it on. And they’re 22% more productive, which is another great benefit to us.

BRIAN KENNY: Yeah. So, Bill, we’ve been through situations like this before. If you look back over the long arc of history, we’ve had movement from an agrarian society to an industrial society. We’ve had manufacturing sector turned on its head when a lot of manufacturing jobs have gone overseas. And I think each time we’ve done that, there’s been a portion of the workforce that’s just not been able to make the leap to the new mode of doing things. Unilever is talking about ensuring that 80% to 100% of their workforce can be transitioned in the right way. Is that too big of a promise to make?

Well, to their credit, I believe they stayed at the pretty top end of that range so far. And I think the workshops and so forth that Paddy just outlined are best in class for trying to stay up there. I do think, Brian, you see organizations, and I’m spanning out from Unilever at this point, that are trying to set a new contract with workers, both explicitly and implicitly, that says, “Our part of the bargain is, we’re going to give you great clarity as to what roles we see the company needing in the future, and help you kind of think about where you are today and what you would need to acquire skill-wise to get to that future point. And we’re going to give you the platform to acquire those skills. But your part of the bargain has to be to put the time and the investment in to be having those skills when that time comes.” And so I think we’re seeing a shift in a bit of the, we want to be a great place for you to have worked and developed your career, but we’re not going to be guaranteeing a lifelong employment. We’re going to focus on the skills that are needed and help you make the investments and choices that should be made.

BRIAN KENNY: Yeah. And what does that start to look like at Unilever, Paddy? What are some of the ways that you’re sort of redefining the systems of work there?

PATRICK HULL: So, one of the big initiatives that we’ve undertaken was this whole idea of, how do we help people create more flexibility in their roles, so that they can discover new ways of working, discover new skills, grow in new and different ways? And I mentioned to you earlier that we thought there’s this sort of gridlock that, on the one hand, you’ve got full-time employees, you’ve got lots of security, but no flexibility in terms of how and where they work. And on the other hand, you’ve got gig workers, freelancers, lots of flexibility, but not much security in terms of guaranteed income. And we’ve set ourselves a challenge of, how do we create this responsible alternative to the gig economy? And our idea was something called U-Work. U-Workers no longer have a job title. They work on gigs and projects in Unilever, but they are still 100% Unilever employees. They are not gig workers, so they’re not contractors or anything. In fact, they’re an internal pool of contractors, if you like, but they remain Unilever employees. They get a guaranteed retainer. They get a package of social care, pension benefits, healthcare benefits. And they get a learning stipend. But in return for that, they then only need to work on projects. They can set up their own business on the side. They can look after their kids or aging parents, or they can gradually move into retirement. And I think it’s this kind of thing that we need to continue to explore, as we see in the impact of automation and digitization, and also this trend or this desire for people to have more flexibility to choose how and when they work.

BRIAN KENNY: Yeah. It actually sounds kind of appealing. So you also get variety that goes along with that. You get to move from one project to another, and you’re not sort of locked in on the same kinds of things, all the time.

PATRICK HULL: And, Brian, the one thing, just to emphasize on that, people get very locked into the thing of, ah, does someone have the skill I need for the job? In fact, what we found is, one of the most important skills is knowing the organization. So U-Work is great because they are Unilever employees. They know the organization. They know how to get things done in Unilever. And we must never underestimate the power of that skill

BRIAN KENNY: Bill, it seems like anytime that we enter into one of these huge labor market transitions, manufacturing jobs, take it on the nose. And so I’m wondering, as you think about the implications for jobs in the future, what are the implications for manufacturing specifically?

Bill Kerr: Well, I think, Brian, we’re already been seeing that in motion for a while. Manufacturing has been at the forefront of technology adoption for decades. I think time will tell how it will continue to evolve. I would anticipate more skilled, more advanced, more technology enabled, but there could also be some interesting twists. It’s not the current case study that we’re talking about, but there’s another case study at Harvard Business School, done by Raj Choudhury, our colleague, with Unilever that’s about remote manufacturing. So how can the remote workforce be connected into the manufacturing sector? So we’ll see a lot of innovation towards the future.

BRIAN KENNY: And how is Unilever thinking about that, Paddy?

PATRICK HULL: So actually, the whole genesis of this future of work framework was done together, well, co-created together with our European Works Council actually, so our manufacturing representatives coming together with management to think about, how is the future of work impacting the manufacturing environment? So actually, our whole framework came from them. So, we very much see this as a critical way of addressing the impact of digitization and automation in the manufacturing environment. We’ve found some fantastic examples where we’ve started people thinking about their roles in future. And what we’ve found is, there’s quite a strong correlation between some of the skills our manufacturing workers have and lab assistants in our R&D labs. And funnily enough, we tend to have quite big R&D centers right next to our factories. So we’ve seen quite a bit of movement of people being able to re-skill from manufacturing environment into R&D labs in a way, a more sustainable future environment, all because they’ve identified, what’s the work that they really enjoy doing, what are they really good at, and then what are the skills required to go into the future?

BRIAN KENNY: Yeah. That’s a huge win-win, right? For the worker and for the firm.

PATRICK HULL: Correct.

BRIAN KENNY: This has been a great conversation. I’ve really enjoyed it. I’m wondering if… I’ve got time for one question for each of you left here. So, I’m going to start with you, Paddy. How is Unilever going to know if they’re succeeding in this? Is there a sort of an end game in mind here?

PATRICK HULL: The big goal is obviously that we are proving that our sustainable business model is more effective than others in terms of driving superior performance. So the big number is still, how are we doing as an organization? I would say the key input metrics are things like, how well are we able to re-skill our people for the future? We really believe that re-skilling is the way forward. We know it’s cheaper than recruiting from outside. It’s better for our people. It’s a way of getting people who know our business to continue to do good things. So we do measure that. How many people are we helping to transition? And then it’s about, how attractive do we continue to be as an employer for new recruits and for the people within our organization? So we’ll track the traditional input metrics like engagement, attrition, our employer brand, how well people are collaborating going forward.

BRIAN KENNY: Yeah. It sounds like you’re off to a fantastic start. Bill, I’ll give you the last words, since you wrote the case. If there’s one thing you’d like people to remember about this case, what is it?

Bill Kerr: Well, let me go back. We started with the cold call, so let me tell you how I end the class. There’s a video of one of Paddy’s colleagues, Nick Dalton, who is quoting President Kennedy, who was in turn quoting an Irish writer named Frank O’Connor. And Kennedy was speaking about the space mission, and Frank O’Connor was describing, as a kid, when they would come to this orchard wall that was too high for them to climb over. They had no idea how they were going to do it. They would take their hats and they would throw them over the orchard wall, so that they just committed themselves to figuring it out. And Nick basically thought of the Unilever program as a bit of, “We’re throwing our hat over the wall. We don’t know exactly how we’re going to climb over this future of work wall, but we know we must do it. And this is our public commitment to making that happen.” And the thing I’d come back to listeners around this is, the future of work is scary. And we talked about job transitions and how quickly the new technologies are coming. This time last year, we had no thought of ChatGPT as being part of this Cold Call podcast, but now, it’s what we lead with. And so, hopefully, people can unfreeze a little bit and can start thinking about, regardless of what the twists and turns may lie ahead, they need to begin a journey with their employees. And Unilever is showing, here’s how we’re approaching that. Now, let’s all work on it together.

BRIAN KENNY: Yeah. Well, I suspect I’m not alone when I say we’re rooting for you. We hope that you get this right. There’s a lot at stake.

PATRICK HULL: Thanks, Brian.

BRIAN KENNY: Thank you both for joining me.

Bill Kerr: Thanks.

BRIAN KENNY: If you enjoy Cold Call , you might like our other podcasts, After Hours , Climate Rising , Deep Purpose, IdeaCast , Managing the Future of Work , Sk ydeck , and Women at Work . Find them on Apple, Spotify, or wherever you listen, and if you could take a minute to rate and review us, we’d be grateful. If you have any suggestions or just want to say hello, we want to hear from you. Email us at [email protected] . Thanks again for joining us. I’m your host, Brian Kenny, and you’ve been listening to Cold Call , an official podcast of Harvard Business School and part of the HBR Podcast Network.

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Case Study: How Unilever is recruiting their future leaders

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Check out this two-page case study from Unileve r – The FMCG company swapped resumes for AI and the results have been amazing, with their recruitment team reducing time to hire by 75 percent and recruiting costs by 25 percent!

Click here to download!

About Bo Kai Low (BK)

BK was part of the ATC team for 5 wonderful years. He writes about meaningful topics including food security, Talent Acquisition and Aged Care.

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Künstliche Intelligenz in Unternehmen: Innovative Anwendungen in 50 erfolgreichen Firmen

Der Bestsellerautor und Geschäfts renommierter KI-Experte Bernard zeigt, wie sterben Technologie des maschinellen Lernens das von Unternehmen verändert. Das Buch bietet einen Überblick über einzelne Unternehmen, beschreibt das spezifische Problem und erklärt, wie KI die Lösung erleichtert. Jede Fallstudie bietet einen umfassenden Einblick, der einige technische Details wichtige Lernzusammenfassungen enthält. Marrs Buch ist eine aufschlussreiche und informative Untersuchung der transformativen Kraft der Technologie in der Wirtschaft des 21. Jahrhunderts.

Bernard Marr

Bernard Marr is a world-renowned futurist, influencer and thought leader in the fields of business and technology, with a passion for using technology for the good of humanity. He is a best-selling author of over 20 books, writes a regular column for Forbes and advises and coaches many of the world’s best-known organisations. He has a combined following of 4 million people across his social media channels and newsletters and was ranked by LinkedIn as one of the top 5 business influencers in the world.

Bernard’s latest books are ‘Future Skills’, ‘The Future Internet’, ‘Business Trends in Practice’ and ‘ Generative AI in Practice ’.

Bernard Marr ist ein weltbekannter Futurist, Influencer und Vordenker in den Bereichen Wirtschaft und Technologie mit einer Leidenschaft für den Einsatz von Technologie zum Wohle der Menschheit. Er ist Bestsellerautor von 20 Büchern, schreibt eine regelmäßige Kolumne für Forbes und berät und coacht viele der weltweit bekanntesten Organisationen. Er hat über 2 Millionen Social-Media-Follower, 1 Million Newsletter-Abonnenten und wurde von LinkedIn als einer der Top-5-Business-Influencer der Welt und von Xing als Top Mind 2021 ausgezeichnet.

Bernards neueste Bücher sind ‘Künstliche Intelligenz im Unternehmen: Innovative Anwendungen in 50 Erfolgreichen Unternehmen’

The Amazing Ways How Unilever Uses Artificial Intelligence To Recruit & Train Thousands Of Employees

2 July 2021

It’s hard to live a day in the developed world without using a Unilever product. The multinational manufactures and distributes over 400 consumer goods brands covering food and beverages, domestic cleaning products and personal hygiene.

With so many processes to coordinate and manage, artificial intelligence is quickly becoming essential for organizations of its scale. This applies to both research and development as well as the huge support infrastructure needed for a business with 170,000 employees.

Recently it announced that it had developed machine learning algorithms capable of   sniffing your armpit   and telling you whether you are suffering from body odors. While this may seem like “using a sledgehammer to crack a walnut,” the technology which has been developed could well go on to be used to monitor food for freshness, helping to solve the problem of food overproduction and waste   endemic in society .

As well as these smart, public-facing initiatives, though,   artificial intelligence   is being put to use behind the scenes to help screen and assess the more than one million people per year who apply for jobs with Unilever. If they make the grade and become one of the thousands who are offered a job, they have AI-powered tools to help them adjust to their new role and hit the ground running.

AI-enhanced recruiting

Unilever recruits more than 30,000 people a year and processes around 1.8 million job applications.

This takes a tremendous amount of time and resources. As a multinational brand operating in 190 countries, applicants are based all around the world. Finding the right people is an essential ingredient for success, and Unilever can’t afford to overlook talent just because it is buried at the bottom of a pile of CVs.

To tackle this problem, Unilever partnered with Pymetrics, a specialist in AI recruitment, to create an online platform, which means candidates can be initially assessed from their own homes, in front of a computer or mobile phone screen.

First, they are asked to play a selection of games that test their aptitude, logic, and reasoning, and appetite for risk. Machine learning algorithms are then used to assess their suitability for whatever role they have applied for, by matching their profiles against those of previously successful employees.

The second stage of the process involves submitting a video interview. Again, the assessor is not a human being but a machine learning algorithm. The algorithm examines the videos of candidates who answering questions for around 30 minutes, and through a mixture of natural language processing and body language analysis, determines who is likely to be a good fit.

Unilever’s chief of HR, Leena Nair, told me that around 70,000 person-hours of interviewing and assessing candidates had been cut, thanks to the automated screening system.

She said, “We look for people with a sense of purpose – systemic thinking, resilience, business acumen. Based on that profile, the games and the video interview are all programmed to look for cues in their behavior that will help us understand who will fit in at Unilever.”

Referring to the video interview analytics for their future leaders program, she tells me: “Every screenshot gives us many data points about the person, so we work with a number of partners and use a lot of proprietary technology with those partners, and then we select 3,500 or so people to go through to our discovery center.” After spending a day with real leaders and recruiters, Unilever selects about 800 people who will be offered a job.

The system is also designed to give feedback to all applicants, even those who aren’t successful.

“What I like about the process is that each and every person who applies to us gets some feedback,” Nair says.

“Normally when people send an application to a large company it can go into a ‘black hole’ – thank you very much for your CV, we’ll get back to you – and you never hear from them again.

“All of our applicants get a couple of pages of feedback, how they did in the game, how they did in the video interviews, what characteristics they have that fit, and if they don’t fit, the reason why they didn’t, and what we think they should do to be successful in a future application.

“It’s an example of artificial intelligence allowing us to be more human.”

So while Unilever isn’t quite ready to hand the entire recruitment process over to machines just yet, it has shown that it can assist with the initial “sift” when it comes to preliminary screening of applicants.

Robots to help you settle into the job

After making the grade, another machine-learning-driven initiative is helping new employees get started in their new roles – adapting to the day-to-day routines as well as the corporate culture at the business.

Unabot is a natural language processing (NLP) bot built on Microsoft’s Bot framework, designed to understand what employees need to know and fetch information for them when it is asked.

“We joke about the fact we don’t know whether it’s a man or a woman – it’s Unabot,” Nair tells me.

“Unabot doesn’t only answer HR questions, questions about anything that affects employees should be answered by Unabot, and it is now the front face for any employee question – they might ask it about IT systems, or about their allowances – so we are learning about what matters to employees in real time.”

Through interacting with employees, Unabot has learned to answer questions such as where parking is available, the timing of shuttle buses, and when annual salary reviews are due to take place.

Unlike, for example, Alexa or consumer-facing, customer-service corporate chatbots, Unabot must also be able to filter and apply information based on who it is speaking to. It is capable of differentiating the information it passes on based on both the user’s geographical location and their level of seniority within the company.

Unabot was first rolled out for employees based in the Philippines and is now operating in 36 countries. It has been selected as the next AI initiative that will be rolled out globally in all of Unilever’s 190 markets.

“It’s a new way of working,” Nair tells me, “We never go in and say it’s perfect so let’s roll it out in all countries,’ we learn what we can in one country and roll it out in the next one.”

Currently, all of its data comes from internal sources, such as company guidelines, schedules, policy documents and questions asked by the employees themselves. In the future, this could be expanded to include external data such as learning materials.

And although it’s early days, the initial analysis seems to show that the initiative is popular with staff – with 36% of those in areas where it is deployed having used it at least once, and around 80% going on to use it again.

One lesson learned early on was that the importance of providing a frictionless experience.

“So we’ve learned that you have to make anything that interacts with employees or consumers effortless,” Nair says.

“People interact in different ways – a policy document is written in a particular way, its three or four pages of what an employee shouldn’t do. But an employee tends to ask questions in very simplistic ways – how does this impact my life, where will I find this, what can I do?”

Machine learning – particularly NLP – can overcome this due to its ability to detect which questions are repeatedly asked, even if they are asked in different ways, and present the right information.

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Bernard Marr is a world-renowned futurist, influencer and thought leader in the fields of business and technology, with a passion for using technology for the good of humanity.

He is a best-selling author of over 20 books, writes a regular column for Forbes and advises and coaches many of the world’s best-known organisations.

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Future of Work and Agility

Blog: The Future at Work: A Unilever Case Study

• June 28, 2022

What lessons can be learned from their change in strategy?

Nick Dalton, former Executive Vice President of HR at Unilever, attended a CRF Talent, Leadership and Learning Community event and shared several insights into their Future of Work projects.

Unilever found itself facing a paradox: how could it be a purpose-driven organisation, speaking out about sustainability and purpose to investors on a Tuesday, but then on Thursday potentially making thousands of redundancies as the company adapted to technology-driven changes?

They wanted to address this, and thinking eventually aligned around three themes:

• Changing the way they change – the company moved from a more paternalistic to a more adult-to-adult approach, with a focus on involving employees earlier.
• Future-fit planning/lifelong learning – the company sought to align learning, development opportunities and future skills. Key questions included: what are the changes and how do we prepare the workforce well in advance? How do we become more anticipatory and strategic?
• New models of employment – the company asked what new employment contracts would look like. Unilever was clear that it did not want to move into a gig economy model that was fundamentally exploitative; instead, they sought ways to have flexibility with security.

More broadly, Nick shared his thinking on how change management has evolved over time: “we used to have a paternalistic strategy – ‘don’t worry, we’ll look after you’. Then we moved to a power strategy – ‘do as you’re told’. There was then a shift to a process strategy, wherein the emphasis was on following procedures to manage change. This shifted to a transformational strategy – ‘I will share my vision and you will follow me’ – but this strategy inspires little trust when ‘change’ means losing one’s job.”

Putting people in the spotlight

Nick argues that companies are now moving toward a people-centred strategy – starting with the individual rather than the organisation in order to build trust.

Unilever realised this approach by helping its people develop individualised future-fit plans. The step beyond this is more systemic – asking, “how we can work with others in our ecosystem to potentially guarantee people future opportunities. How can we enhance the skills of the community more generally?”

This more systemic approach to change is slowly emerging, but it is proving challenging as it asks leaders to give up control, works councils to adapt, and requires trust in organisations to vastly increase.

Unilever took a two-pronged approach to this dilemma of how to make systems more dynamic than static. The company took a top-down approach of merging future skills with workforce planning and big restructuring projects, looking at job design, and involving employees as early as possible. At the same time, the company took a bottom-up approach.

As Unilever’s Future of Work vision is centred on purpose at all levels, the company put 65,000 of its people through purpose workshops that enabled them to develop personal future-fit plans. The programme gave the company a much better understanding of the motivations and capabilities of its workforce. This approach recognises that the skilling agenda goes beyond Unilever.

It asks: how can you be prepared for jobs anywhere with your skillset?

Aligning with HR

Nick closed the session by highlighting that the future of work agenda has the potential to integrate things in HR.

After all, this is not merely a rebranding of lifelong learning or workforce planning; rather, the reality is that the agenda is about integrating leadership, skills, change management, learning and development, and employee relations. Understanding this as integration is the key to success; without integration, the skills agenda risks ending up as old wine in new bottles.

To find out more about CRF’s research on reskilling, check out our report: Building a Future-Fit Workforce .

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Peter Crush

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International case study: Unilever's internal project platform

Unilever realised it could benefit from making use of employees’ untapped skills, so it rolled out a technology solution to help it better match people with tasks

The company

There probably aren’t many homes in the UK (or indeed globally) that don’t contain at least one product from British-Dutch multinational Unilever.

As a manufacturer of cleaning and personal care products – including Dove, Surf and Lynx – as well as food including Hellmann’s, Knorr and Magnum, the firm is now the seventh-largest in Europe.

The inside view :

The FA on HR in the public eye

The wonderful everyday: HR at Ikea

Smoothie does it: HR at Innocent Drinks

It was created from humble beginnings in the 1870s, when Dutch merchant and industrialist Antoon Jurgens founded the world’s first margarine factory, Margarine Unie.

The firm then grew and acquired British soap-maker Lever Brothers in 1925, with the combined Unilever name created in 1929.

Today the global behemoth has annual revenues of more than $50 billion, employs more than 155,000 staff, and – with product innovation critical to its ongoing success – has several dedicated research and development facilities in the UK, as well as in the Netherlands, China, India and the US. It is consistently ranked one of the world’s top graduate employers.

The challenge

With more than 150,000 employees, working across 400-plus brands in 190 countries, Unilever recently realised it was becoming almost impossible to know how the skills of its staff could be best deployed – or even know that specific skills even existed . Driving this observation was its corporate mantra of growth through innovation.

“We realised that key to our long-term success was being better at knowing what untapped skills we already had in our employee base – skillsets that we could then redeploy as new projects presented themselves,” explains Yanpi Oliveros-Pascual, Unilever global HR partner.

“We realised too that the future of work was likely to become more project-based anyway, so a solution was needed that recognised our need to be able to move people in and out of projects – at speed ­– and in a more agile way .”

In anticipation of this, three years ago Unilever started a global search for a technology solution that would enable staff to update details of their skills, and then match them to projects as they came up using AI. It eventually found AI and machine learning company Gloat, working with it to create its own bespoke solution, called FLEX Experiences.

The strategy

“The basic aim is quite simple: to have a platform (accessible via desktop, mobile device or smartphone) where people can see the full range of projects that come up, and then have employees suggested as possible matches to internal hiring managers,” says Oliveros-Pascual.

A soft launch took place last year, as part of Unilever’s pre-existing ‘be resourceful’ agenda of trying harder to identify the right internal people at the right time.

Crucially, because the platform allows employees to input their ambitions as well as their hard skills (for instance, they might have a yearning to learn more marketing skills), the AI won’t just suggest potential matches based on a specific skills match, but will also match people who have a strong desire to expand their learning in a certain area.

“The system integrates with Workday, as well as LinkedIn, so lots of people’s existing skills will have already copied over. But staff are encouraged to add their skills that aren’t already known about,” says Oliveros-Pascual.

Importantly, the matching algorithm is location, department and function agnostic, ensuring matches seek the best possible people, not just the nearest or easiest to get.

“We’ll cover any international relocation costs if someone needs it,” says Oliveros-Pascual. “It’s about recognising that maximising shared experiences and having different [from expected] people coming together best fosters innovation .”

L&D systems are also linked, so that as learning is done by staff, their profiles are automatically updated. “The aim is also for the AI to learn,” says Oliveros-Pascual. “So as project opportunities are presented, staff can either give it a thumbs-up [they are interested], or thumbs-down [they’re not interested]. The technology will in time learn what types of roles people aren’t interested in, so the matching becomes ever more accurate.”

The firm started rolling out the technology in June 2019. So far it has been launched in a mix of 18 countries, functions and divisions, as project needs materialise. These include in the functions of HR and tax, in the food and refreshments divisions, and in Israel, Germany, Eastern Europe and Singapore. In November 2019 it was rolled out to the Benelux countries, and from January it will launch in Latin America and Africa.

“So far the results have been very encouraging,” says Oliveros-Pascual. “Currently there are nearly 11,000 active users [i.e. those that have created a new skills profile]; there are 1,000 active roles, and already there are around 900 people currently on projects.”

Each user typically completes around 67% of their profile, demonstrating high engagement with wanting to showcase their skills in new areas and with being matched to new projects.

Such has been the ‘discovery’ of new skills hitherto unknown about, some staff have completed projects they have enjoyed so much they’ve decided to completely switch careers internally, says Oliveros-Pascual. She also reports a side benefit of ‘unlocking’ more than 112,000 hours of capacity, through employees adding this many hours’ worth of project work to their existing responsibilities. These are hours that might otherwise have had to go to external contractors or freelancers .

This will not completely replace external recruitment, however. “We value bringing in outside skills – but what this project does is showcases what we can already glean from our existing, internal marketplace,” she says.

That said, a pilot is currently being tested within Unilever’s HR function that will test using the platform to hire for permanent rather than time-limited project roles.

This piece appears in the December 2019 print issue. Subscribe today to have all our latest articles delivered right to your desk

Further reading

International Case Study: GfK SE revamps learning platform

International case study: Youth employment at Webhelp

Case study: Learning and development at HLM Architects

Learning and Development Case Study: Heinz - A training scheme full of beans

International case study: Digitalising L&D at Faurecia

Global case study: Vodafone's comms strategy

Case study: Recruiting expertise for Brexit customs chaos

Case study: Creating a learning culture at Airbus

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The Case study “Opportunities and challenges in AI inclusion – lessons from Unilever” explores the manner and extent of AI adoption by the CPG giant, Unilever. It also outlines the results that were achieved by introducing this change.

By Editorial Team

• 28 Jun 2019
• 16 min read

96% of recruiters believe that AI can set the pace for the next big revolution in talent acquisition and its image as a collaborative tool is setting into prominence. We tried to find the validity of this belief through the CPG giant Unilever’s experience.

Unilever has paved the way for its fellow organizations by putting AI technologies into practice. It adopted AI to:

• Forge its expansion into foreign territories.
• Reduce its hiring cost.
• Eliminate discrimination.

Download the case study to know how it achieved its desired goals and what other benefits these inclusions brought!

Who should download this study:

HR leaders , Talent managers, and strategists will find this case study useful. The case study will be especially helpful for leaders contemplating AI inclusion in their talent management.

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Hr; technology & a remote workforce, the art of strategic hr, chro as a strategic partner: post pandemic guidance.

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Unilever—A Case Study

This article considers key issues relating to the organization and performance of large multinational firms in the post-Second World War period. Although foreign direct investment is defined by ownership and control, in practice the nature of that "control" is far from straightforward. The issue of control is examined, as is the related question of the "stickiness" of knowledge within large international firms. The discussion draws on a case study of the Anglo-Dutch consumer goods manufacturer Unilever, which has been one of the largest direct investors in the United States in the twentieth century. After 1945 Unilever's once successful business in the United States began to decline, yet the parent company maintained an arms-length relationship with its U.S. affiliates, refusing to intervene in their management. Although Unilever "owned" large U.S. businesses, the question of whether it "controlled" them was more debatable.

Some of the central issues related to the organization and performance of multinationals after the Second World War can be illustrated by studying the case of Unilever in the United States. Since Unilever's creation in 1929 by a merger of British and Dutch soap and margarine companies, 1 it has ranked as one of Europe's, and the world's, largest consumer-goods companies. Its sales of $45,679 million in 2000 ranked it fifty-fourth by revenues in the Fortune 500 list of largest companies for that year.

A Complex Organization

Unilever was an organizational curiosity in that, since 1929, it has been headed by two separate British and Dutch companies—Unilever Ltd. (PLC after 1981), and Unilever N.V.—with different sets of shareholders but identical boards of directors. An "Equalization Agreement" provided that the two companies should at all times pay dividends of equivalent value in sterling and guilders. There were two head offices—in London and Rotterdam—and two chairmen. Until 1996 the "chief executive" role was performed by a three-person Special Committee consisting of the two chairmen and one other director.

Beneath the two parent companies a large number of operating companies were active in individual countries. They had many names, often reflecting predecessor firms or companies that had been acquired. Among them were Lever; Van den Bergh & Jurgens; Gibbs; Batchelors; Langnese; and Sunlicht. The name "Unilever" was not used in operating companies or in brand names. Lever Brothers and T. J. Lipton were the two postwar U.S. affiliates. These national operating companies were allocated to either Ltd./PLC or N.V. for historical or other reasons. Lever Brothers was transferred to N.V. in 1937, and until 1987 (when PLC was given a 25 percent shareholding) Unilever's business in the United States was wholly owned by N.V. Unilever's business, and, as a result, counted as part of Dutch foreign direct investment (FDI) in the country. Unilever and its Anglo-Dutch twin Royal Dutch Shell formed major elements in the historically large Dutch FDI in the United States. 2 However, the fact that all dividends were remitted to N.V. in the Netherlands did not mean that the head office in Rotterdam exclusively managed the U.S. affiliates. The Special Committee had both Dutch and British members, and directors and functional departments were based in both countries and had managerial responsibilities without regard for the formality of N.V. or Ltd./PLC ownership. Thus, while ownership lay in the Netherlands, managerial control was Anglo-Dutch.

The organizational complexity was compounded by Unilever's wide portfolio of products and by the changes in these products over time. Edible fats, such as margarine, and soap and detergents were the historical origins of Unilever's business, but decades of diversification resulted in other activities. By the 1950s, Unilever manufactured convenience foods, such as frozen foods and soup, ice cream, meat products, and tea and other drinks. It manufactured personal care products, including toothpaste, shampoo, hairsprays, and deodorants. The oils and fats business also led Unilever into specialty chemicals and animal feeds. In Europe, its food business spanned all stages of the industry, from fishing fleets to retail shops. Among its range of ancillary services were shipping, paper, packaging, plastics, and advertising and market research. Unilever also owned a trading company, called the United Africa Company, which began by importing and exporting into West Africa but, beginning in the 1950s, turned to investing heavily in local manufacturing, especially brewing and textiles. The United Africa Company employed around 70,000 people in the 1970s and was the largest modern business enterprise in West Africa. 3 Unilever's total employment was over 350,000 in the mid-1970s, or around seven times larger than that of Procter & Gamble (hereafter P&G), its main rival in the U.S. detergent and toothpaste markets.

A World-wide Investor

An early multinational investor, by the postwar decades Unilever possessed extensive manufacturing and trading businesses throughout Europe, North and South America, Africa, Asia, and Australia. Unilever was one of the oldest and largest foreign multinationals in the United States. William Lever, founder of the British predecessor of Unilever, first visited the United States in 1888 and by the turn of the century had three manufacturing plants in Cambridge, Massachusetts, Philadelphia, and Vicksburg, Mississippi. 4 The subsequent growth of the business, which was by no means linear, will be reviewed below, but it was always one of the largest foreign investors in the United States. In 1981, a ranking by sales revenues in Forbes put it in twelfth place. 5

Unilever's longevity as an inward investor provides an opportunity to explore in depth a puzzle about inward FDI in the United States. For a number of reasons, including its size, resources, free-market economy, and proclivity toward trade protectionism, the United States has always been a major host economy for foreign firms. It has certainly been the world's largest host since the 1970s, and probably was before 1914 also. 6 Given that most theories of the multinational enterprise suggest that foreign firms possess an "advantage" when they invest in a foreign market, it might be expected that they would earn higher returns than their domestic competitors. 7 This seems to be the general case, but perhaps not for the United States. Considerable anecdotal evidence exists that many foreign firms have experienced significant and sustained problems in the United States, though it is also possible to counter such reports with case studies of sustained success. 8

During the 1990s a series of aggregate studies using tax and other data pointed toward foreign firms earning lower financial returns than their domestic equivalents in the United States. 9 One explanation for this phenomenon might be transfer pricing, but this has proved hard to verify empirically. The industry mix is another possibility, but recent studies have suggested this is not a major factor. More significant influences appear to be market share position—in general, as a foreign owned firm's market share rose, the gap between its return on assets and those for United States—owned companies decreased—and age of the affiliate, with the return on assets of foreign firms rising with their degree of newness. 10 Related to the age effect, there is also the strong, but difficult to quantify, possibility that foreign firms experienced management problems because of idiosyncratic features of the U.S. economy, including not only its size but also the regulatory system and "business culture." The case of Unilever is instructive in investigating these matters, including the issue of whether managing in the United States was particularly hard, even for a company with experience in managing large-scale businesses in some of the world's more challenging political, economic, and financial locations, like Brazil, India, Nigeria, and Turkey.

The story of Unilever in the United States provides rich new empirical evidence on critical issues relating to the functioning of multinationals and their impact. — Geoffrey Jones

Finally, the story of Unilever in the United States provides rich new empirical evidence on critical issues relating to the functioning of multinationals and their impact. It raises the issue of what is meant by "control" within multinationals. Management and control are at the heart of definitions of multinationals and foreign direct investment (as opposed to portfolio investment), yet these are by no means straightforward concepts. A great deal of the theory of multinationals relates to the benefits—or otherwise—of controlling transactions within a firm rather than using market arrangements. In turn, transaction-cost theory postulates that intangibles like knowledge and information can often be transferred more efficiently and effectively within a firm than between independent firms. There are several reasons for this, including the fact that much knowledge is tacit. Indeed, it is well established that sharing technology and communicating knowledge within a firm are neither easy nor costless, though there have not been many empirical studies of such intrafirm transfers. 11 Orjan Sövell and Udo Zander have recently gone so far as to claim that multinationals are "not particularly well equipped to continuously transfer technological knowledge across national borders" and that their "contribution to the international diffusion of knowledge transfers has been overestimated. 12 This study of Unilever in the United States provides compelling new evidence on this issue.

Lever Brothers In The United States: Building And Losing Competitive Advantage

Lever Brothers, Unilever's first and major affiliate, was remarkably successful in interwar America. After a slow start, especially because of "the obstinate refusal of the American housewife to appreciate Sunlight Soap," Lever's main soap brand in the United Kingdom, the Lever Brothers business in the United States began to grow rapidly under a new president, Francis A. Countway, an American appointed in 1912. 13 Sales rose from $843,466 in 1913, to $12.5 million in 1920, to $18.9 million in 1925. Lever was the first to alert American consumers to the menace of "BO," "Undie Odor," and "Dishpan Hands," and to market the cures in the form of Lifebuoy and Lux Flakes. By the end of the 1930s sales exceeded $90 million, and in 1946 they reached $150 million.

By the interwar years soap had a firmly oligopolistic market structure in the United States. It formed part of the consumer chemicals industry, which sold branded and packaged goods supported by heavy advertising expenditure. In soap, there were also substantial throughput economies, which encouraged concentration. P&G was, to apply Alfred D. Chandler's terminology, "the first mover"; among the main followers were Colgate and Palmolive-Peet, which merged in 1928. Neither P&G nor Colgate Palmolive diversified greatly beyond soap, though P&G's research took it into cooking oils before 1914 and into shampoos in the 1930s. Lever made up the third member of the oligopoly. The three firms together controlled about 80 percent of the U.S. soap market in the 1930s. 14 By the interwar years, this oligopolistic rivalry was extended overseas. Colgate was an active foreign investor, while in 1930 P&G—previously confined to the United States and Canada—acquired a British soap business, which it proceeded to expand, seriously eroding Unilever's market share. 15

The soap and related markets in the United States had a number of characteristics. Although P&G had established a preponderant market share, shares were strongly contested. Entry, other than by acquisition, was already not really an option by the interwar years, so competition took the form of fierce rivalry between incumbent firms with a long experience of one another. During the 1920s and the first half of the 1930s, Lever made substantial progress against P&G. Lever's sales in the United States as a percentage of P&G's sales rose from 14.8 percent between 1924 and 1926 to reach almost 50 percent in 1933. In 1930 P&G suggested purchasing Lever in the United States as part of a world division of markets, but the offer was declined. 16 Lever's success peaked in the early 1930s. Using published figures, Lever estimated its profit as a percentage of capital employed at 26 percent between 1930 and 1932, compared with P&G's 12 percent.

Countway's greatest contribution was in marketing. During the war, Countway put Lever's resources behind Lux soapflakes, promoted as a fine soap that would not damage delicate fabrics just at a time when women's wear was shifting from cotton and lisle to silk and fine fabrics. The campaign featured a variety of tactics, including washing demonstrations at department stores. In 1919 Countway launched Rinso soap powder, coinciding with the advent of the washing machine. In the same year, Lever's agreement with a New York agent to sell its soap everywhere beyond New England was abandoned and a new sales organization was established. Finally, in the mid-1920s, Countway launched, against the advice of the British parent company, a white soap, called "Lux Toilet Soap." J. Walter Thompson was hired to develop a marketing and advertising campaign stressing the glamour of the new product, with very successful results. 17 Lever's share of the U.S. soap market rose from around 2 percent in the early 1920s to 8.5 percent in 1932. 18 Brands were built up by spending heavily on advertising. As a percentage of sales, advertising averaged 25 percent between 1921 and 1933, thereby funding a series of noteworthy campaigns conceived by J. Walter Thompson. This rate of spending was made possible by the low price of oils and fats in the decade and by plowing back profits rather than remitting great dividends. By 1929 Unilever had received $12.2 million from its U.S. business since the time of its start, but thereafter the company reaped benefits, for between 1930 and 1950 cumulative dividends were $50 million. 19

Many foreign firms have experienced significant and sustained problems in the United States. — Geoffrey Jones

After 1933 Lever encountered tougher competition in soap from P&G, though Lever's share of the total U.S. soap market grew to 11 percent in 1938. P&G launched a line of synthetic detergents, including Dreft, in 1933, and came out with Drene, a liquid shampoo, in 1934 both were more effective than solid soap in areas of hard water. However, such products had "teething problems," and their impact on the U.S. market was limited until the war. Countway challenged P&G in another area by entering branded shortening in 1936 with Spry. This also was launched with a massive marketing campaign to attack P&G's Crisco shortening, which had been on sale since 1912. 20 The attack began with a nationwide giveaway of one-pound cans, and the result was "impressive." 21 By 1939 Spry's sales had reached 75 percent of Crisco's, but the resulting price war meant that Lever made no profit on the product until 1941. Lever's sales in general reached as high as 43 percent of P&G's during the early 1940s, and the company further diversified with the purchase of the toothpaste company Pepsodent in 1944. Expansion into margarine followed with the purchase of a Chicago firm in 1948.

The postwar years proved very disappointing for Lever Brothers, for a number of partly related reasons. Countway, on his retirement in 1946, was replaced by the president of Pepsodent, the thirty-four-year-old Charles Luckman, who was credited with the "discovery" of Bob Hope in 1937 when the comedian was used for an advertisement. Countway was a classic "one man band," whose skills in marketing were not matched by much interest in organization building. He never gave much thought to succession, but he liked Luckman. 22 This proved a misjudgment. With his appointment by President Truman to head a food program in Europe at the same time, Luckman became preoccupied with matters outside Lever for a significant portion of his term, though perhaps not to a sufficient degree. Convinced that Lever's management was too old and inbred, he dismissed about 15 percent of the work force soon after taking office, and he completed the transformation by moving the head office from Boston to New York, taking only around one-tenth of the existing executives with him. 23 The head office, constructed in Cambridge by Lever in 1938, was subsequently acquired by MIT and became the Sloan Building.

Luckman's move, which was supported by a firm of management consultants, the Fry Organization of Business Management Experts, was justified on the grounds that the building in Cambridge was not large enough, that it would be easier to find the right personnel in New York, and that Lever would benefit by being closer to the large advertising agencies in the city. 24 There were also rumors that Luckman, who was Jewish, was uncomfortable with what he perceived as widespread anti-Semitism in Boston at that time. The cost of building the New York Park Avenue headquarters, which became established as a "classic" of the new postwar skyscraper, rose steadily from $3.5 million to $6 million. Luckman had trained as an architect at the University of Illinois, and he was very involved in the design of the pioneering New York office.

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Gabriela Salinas and Jeeva Somasundaram

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

In April this year, Hein Schumacher, chief executive of Unilever, announced that the company was entering a “new era for sustainability leadership”, and signalled a shift from the central priority promoted under his predecessor , Alan Jope.

While Jope saw lack of social purpose or environmental sustainability as the way to prune brands from the portfolio, Schumacher has adopted a more balanced approach between purpose and profit. He stresses that Unilever should deliver on both sustainability commitments and financial goals. This approach, which we dub “realistic sustainability”, aims to balance long- and short-term environmental goals, ambition, and delivery.

As a result, Unilever’s refreshed sustainability agenda focuses harder on fewer commitments that the company says remain “very stretching”. In practice, this entails extending deadlines for taking action as well as reducing the scale of its targets for environmental, social and governance measures.

Such backpedalling is becoming widespread — with many companies retracting their commitments to climate targets , for example. According to FactSet, a US financial data and software provider, the number of US companies in the S&P 500 index mentioning “ESG” on their earnings calls has declined sharply : from a peak of 155 in the fourth quarter 2021 to just 29 two years later. This trend towards playing down a company’s ESG efforts, from fear of greater scrutiny or of accusations of empty claims, even has a name: “greenhushing”.

Test yourself

This is the fourth in a series of monthly business school-style teaching case studies devoted to the responsible business dilemmas faced by organisations. Read the piece and FT articles suggested at the end before considering the questions raised.

About the authors: Gabriela Salinas is an adjunct professor of marketing at IE University; Jeeva Somasundaram is an assistant professor of decision sciences in operations and technology at IE University.

The series forms part of a wider collection of FT ‘instant teaching case studies ’, featured across our Business Education publications, that explore management challenges.

The change in approach is not limited to regulatory compliance and corporate reporting; it also affects consumer communications. While Jope believed that brands sold more when “guided by a purpose”, Schumacher argues that “we don’t want to force fit [purpose] on brands unnecessarily”.

His more nuanced view aligns with evidence that consumers’ responses to the sustainability and purpose communication attached to brand names depend on two key variables: the type of industry in which the brand operates; and the specific aspect of sustainability being communicated.

In terms of the sustainability message, research in the Journal of Business Ethics found consumers can be less interested when product functionality is key. Furthermore, a UK survey in 2022 found that about 15 per cent of consumers believed brands should support social causes, but nearly 60 per cent said they would rather see brand owners pay taxes and treat people fairly.

Among investors, too, “anti-purpose” and “anti-ESG” sentiment is growing. One (unnamed) leading bond fund manager even suggested to the FT that “ESG will be dead in five years”.

Media reports on the adverse impact of ESG controversies on investment are certainly now more frequent. For example, while Jope was still at the helm, the FT reported criticism of Unilever by influential fund manager Terry Smith for displaying sustainability credentials at the expense of managing the business.

Yet some executives feel under pressure to take a stand on environmental and social issues — in many cases believing they are morally obliged to do so or through a desire to improve their own reputations. This pressure may lead to a conflict with shareholders if sustainability becomes a promotional tool for managers, or for their personal social responsibility agenda, rather than creating business value .

Such opportunistic behaviours may lead to a perception that corporate sustainability policies are pursued only because of public image concerns.

Alison Taylor, at NYU Stern School of Business, recently described Unilever’s old materiality map — a visual representation of how companies assess which social and environmental factors matter most to them — to Sustainability magazine. She depicted it as an example of “baggy, vague, overambitious goals and self-aggrandising commitments that make little sense and falsely suggest a mayonnaise and soap company can solve intractable societal problems”.

In contrast, the “realism” approach of Schumacher is being promulgated as both more honest and more feasible. Former investment banker Alex Edmans, at London Business School, has coined the term “rational sustainability” to describe an approach that integrates financial principles into decision-making, and avoids using sustainability primarily for enhancing social image and reputation.

Such “rational sustainability” encompasses any business activity that creates long-term value — including product innovation, productivity enhancements, or corporate culture initiatives, regardless of whether they fall under the traditional ESG framework.

Similarly, Schumacher’s approach aims for fewer targets with greater impact, all while keeping financial objectives in sight.

Complex objectives, such as having a positive impact on the world, may be best achieved indirectly, as expounded by economist John Kay in his book, Obliquity . Schumacher’s “realistic sustainability” approach means focusing on long-term value creation, placing customers and investors to the fore. Saving the planet begins with meaningfully helping a company’s consumers and investors. Without their support, broader sustainability efforts risk failure.

Questions for discussion

Read: Unilever has ‘lost the plot’ by fixating on sustainability, says Terry Smith

Companies take step back from making climate target promises

The real impact of the ESG backlash

Unilever’s new chief says corporate purpose can be ‘unwelcome distraction ’

Unilever says new laxer environmental targets aim for ‘realism’

How should business executives incorporate ESG criteria in their commercial, investor, internal, and external communications? How can they strike a balance between purpose and profits?

How does purpose affect business and brand value? Under what circumstances or conditions can the impact of purpose be positive, neutral, or negative?

Are brands vehicles by which to drive social or environmental change? Is this the primary role of brands in the 21st century or do profits and clients’ needs come first?

Which categories or sectors might benefit most from strongly articulating and communicating a corporate purpose? Are there instances in which it might backfire?

In your opinion, is it necessary for brands to take a stance on social issues? Why or why not, and when?

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Are you curious about the FT’s environmental sustainability commitments? Find out more about our science-based targets here

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