Unilever: Purpose-Led, Future-Fit

Unilever CEO Alan Jope has often said he wants the global consumer products giant to be known for three things: being home to a stable of purpose-led brands, proving once and for all that running a business responsibly generates better financial outcomes, and being a beacon of diversity and inclusion. Ambitious? Yes. Impossible? Not if history is any indication. Unilever has been making steady progress in each of these areas for years through the Unilever Sustainable Living Plan (USLP)—a 10-year strategy for growth that will also decrease its environmental footprint and increase its positive social impact. Today, Unilever Sustainable Living Brands (such as Dove, Domestos, and Lifebuoy) consistently outperform the average growth rate of the rest of Unilever’s portfolio. In 2019, Unilever also pledged that it will reduce its use of plastic packaging by more than 100,000 metric tons, and that it will collect and process more packaging than it sells by 2025. And Unilever has made remarkable headway in the area of gender balance—in 2019 the company achieved a long-standing goal of having women hold half of all manager positions worldwide, up from 38% in 2010 and one year ahead of target.

While this is certainly a milestone to celebrate, Jope and the rest of Unilever’s leadership team have no illusions about how much work is left to do, nor the amount of time, dedication, or resources that will be required to move the needle. In the words of Jope:

Having a gender-balanced workforce should be a given, not something we aspire to. We’re very proud to have reached our goal of equal representation of women and men among our 14,000 managers, but our work doesn’t stop here. We haven’t yet made the progress we want at the most senior levels of the company, where women are still underrepresented. This is very much a job half-done therefore, and something I intend to make a personal priority in 2020.

Unilever is well positioned to finish the job. The processes the organization has put in place to achieve such progress on gender balance globally in a relatively short period of time, and the company’s strategy for addressing the remaining gender gaps with the same urgency, could fill a book. From mandatory standards for balanced slates (i.e., having an equal mix of men and women candidates for new hires and promotions), to truly flexible work arrangements (including job-sharing), to childcare and nutrition programs in developing regions, to some of the best maternity and paternity leave packages in the world—there is little ground Unilever has not covered. But there are a couple of recurring elements that are foundational to the success of all its programs.

First, active senior leadership involvement is crucial. As explained by Aline Santos, Unilever’s Global Executive VP of Marketing and Chief Diversity and Inclusion Officer:

I am often asked by peers from other businesses how they can drive gender balance up the agenda when it isn’t always prioritized by senior leaders. The answer is simple: you can’t. This topic requires true commitment from the top—both in words and in actions. Our Global Diversity Board is chaired by our CEO…and across the world our senior leaders drive the agenda for change…holding themselves and others accountable.

And second, companies must “measure what they treasure,” approaching diversity efforts with a data-first mindset. Says Santos:

Using data analysis to identify our business’ hot spots, in the case of gender-balanced management, allowed us to focus on areas where we could drive meaningful change, and saved us from simply driving up numbers in areas of the business where women were already well represented. It also helped us identify the areas where we needed to look outside our company for a recruitment pipeline.

Unilever developed this “Hot Spot” approach in 2017, recognizing that a one-size-fits-all strategy won’t work because different regions and functions face different cultural norms and challenges. The company identified five functions and regions which were historically male-dominated and required extra measures to increase gender balance: Supply Chain, Finance, UniOps (Unilever’s operations and technology engine), North Africa and Middle East (NAME), and Africa. In 2018, Unilever took this approach one step further with the introduction of “Hot Cells,” an initiative that identifies at a more granular level the individual business units that need work, even within gender-balanced markets. This enabled the company to pinpoint the major hurdles specific to each hot spot/cell and design customized strategies to increase women’s representation within that business unit.

Another novel tactic Unilever employed was to apply behavioral science principles to its diversity challenges. In 2018, Unilever’s D&I team began working with Professor Iris Bohnet of Harvard University and author of What Works: Gender Equality by Design, to implement measurable, scalable approaches the company could test within hot spot areas. Professor Bohnet’s research has shown that unconscious bias tends to crop up and have the most detrimental impact during key decision-making moments—in this case, when leaders are determining whom to hire or promote. Because of this, at companies everywhere, a great job-performance rating does not necessarily translate to promotion for women employees.

With Bohnet’s guidance, Unilever launched a metric called the Gender Appointment Ratio (GAR). GAR is calculated as the total number of women appointed divided by the total number of men appointed, and a GAR score of one represents an equitable track record. Line managers were presented with their appointment track records and corresponding GAR scores over a five-year period. Per Bohnet’s research, just making leaders aware of their record over time is enough to influence their future behavior and help them make unbiased choices the next time the opportunity arises. This was certainly the case at Unilever.

According to Esther Marshall, Global Gender Diversity and Inclusion Lead, who led the program, one-on-one discussions with leaders about their track records resulted in quite a few “light-bulb moments.” Says Marshall:

These discussions had a tremendous impact. Seeing the big picture immediately sparked a change. The result of which wasn’t, “I have to hire more women,” but “I have an opportunity to look for more diverse talent. Maybe I can change my recruiter to get a more balanced slate for review … Maybe I can wait a bit longer to fill this position in order to see a more diverse candidate pool.” It prompted discussions with HR VPs and recruiting teams to ask if there were other candidates potentially ready for promotion who hadn’t been considered. They even started to think differently about succession planning. This was the behavioral change we were after.

According to Bohnet, changes of this nature kick off a virtuous cycle. As women successfully fill leadership roles, unconscious biases about whether they make good leaders begin to fade.

A good example of the layered effect of Unilever’s diversity-focused efforts is the change that has taken place within the Supply Chain function, which is a behemoth with more than 100,000 employees in 190 countries—Supply Chain covers everything from sourcing raw materials to ensuring products make it to store shelves. However, women have been historically underrepresented in the function, particularly in management. In 2016, when Marc Engel was brought on as Chief Supply Chain Officer, he prioritized diversity and adapted Unilever’s global D&I strategy to accelerate progress within the function. While this task was especially difficult in Hot Spots where women face significant cultural barriers in the workplace, positively influencing cultural norms was part of the larger goal. Says Engel:

In many of the geographies that we source from, traditional views of women as homemakers and caregivers dominate. Actively identifying and engaging with women as producers and entrepreneurs can help break down these views to reshape the roles women play in society.

With a particular focus on getting more women into factory management and engineering roles, Engel and team enacted a data- and leadership-driven approach in order to systematically address the issue on multiple fronts. Efforts included:

• A historical diagnostic of hiring, promotion, and attrition trends for women in the function.
• Surveys and exit interviews to better understand challenges facing those employees.
• Creation of a monthly scorecard for leaders to provide a regular check-in on their progress against gender-balance targets.
• Partnerships with external recruiting firms to jumpstart hiring of women Supply Chain directors and VPs.
• Collaboration with NGOs like WomenEng to help build the pipeline of future women engineers.
• A transparent appointment process for VP Supply Chain roles with the aid of an external partner that assessed candidates for readiness.
• The introduction of the GAR metric among Supply Chain VPs.
• The development of community- and inclusivity-building groups for leaders, new hires, and long-term employees, coupled with follow-up surveys to measure their effectiveness.

In the end, all of these efforts—particularly key drivers such as balanced internal promotions, external hiring, and unbiased assessments for senior leadership roles—paid off in an increase in the representation of women at every level within the organization, including a management team comprising 40% women as of 2019 (up from 31.9% in 2015). In 2018 six women were appointed into factory leadership roles, helping move the proportion of women factory leaders from 11% in 2015 to 20% in 2018. Representation in Unilever’s tea estates has also shifted substantially. In 2016, only 12% of its estates were run by women; now that number is 30%.

Despite the fact that 2020 has presented a slew of new challenges—the most life-changing being the Covid-19 pandemic—Unilever continues to stay focused on its gender-balancing, purpose-building, and sustainability-cultivating efforts, even setting new challenges for itself. In September of 2020, the organization announced Clean Future, an effort to eliminate all fossil fuels used in the formulation of its cleaning products by 2030, among many other equally lofty goals. This might seem like a lot to manage for a global organization with more than 400 brands that serve 2.5 billion customers each day, but as CEO Alan Jope says, “It is not about putting purpose ahead of profits, it is purpose that drives profits.” Here’s to proving that once and for all.