Paul Polman
Former CEO, Unilever; Co-Chair, IMAGINE
You cannot have the system's transformation without the leadership’s transformation.
Summary
In this episode of “Leadership Matters,” Alan is joined by a brilliant business leader, campaigner, and author, Paul Polman. The former CEO of the international consumer goods company Unilever, Paul is renowned for his visionary work to make Unilever more sustainable and responsive to the needs of its stakeholders around the globe. His decade of leadership at the company matched impressive financial performance with transformational changes in company practices to reduce waste, source sustainable materials, and build value for the long term. Paul’s expertise led him to serve as a member of the UN Secretary General’s High-Level Panel to develop the organization’s 2030 Sustainable Development Goals.
In his interview with Alan, Paul discussed a variety of topics, including his upbringing, career at Unilever, and his more recent work at IMAGINE — a social venture dedicated which works to achieve systems transformation in the private sector by securing industry-level agreements to promote better environmental, social, and corporate governance practices. He also shares some of the insights from his recent book Net Positive: How Courageous Companies Thrive by Giving More Than They Make. In Paul’s view, “we should never compete on the future of humanity” — by working collaboratively, companies across industries can create value for their shareholders while implementing the practices that will keep our planet healthy and habitable for future generations.
Mentions & Resources in this Episode
Net Positive: How Courageous Companies Thrive by Giving More Than They Take
Good to Great: Why Some Companies Make the Leap and Others Don't, by Jim Collins
The King of Sunlight: How William Lever Cleaned Up the World, by Adam Macqueen
Guest Bio
Paul Polman works to accelerate action by business to tackle climate change and inequality. A leading proponent that business should be a force for good, Paul has been described by the Financial Times as “a standout CEO of the past decade”.
As CEO of Unilever (2009-2019), he demonstrated that a long-term, multi-stakeholder model goes hand-in-hand with excellent financial performance. Paul was a member of the UN Secretary General’s High-Level Panel which developed the Sustainable Development Goals and which he continues to champion, working with global organizations and across industry to advance the 2030 development agenda.
Paul’s new book, “Net Positive”, is a call to arms to courageous business leaders, setting out how to build net positive companies which profit by fixing the world’s problems rather than creating them. He Chairs IMAGINE, a social venture dedicated to systems change, and Saïd Business School, and he is Vice-Chair of the UN Global Compact as well as a B Team Leader. Paul is Honorary Chair of the International Chamber of Commerce, which he led for two years.
Clips from This Episode
Episode Transcription
Alan Fleischmann
You're listening to “Leadership Matters” on SiriusXM, I'm your host Alan Fleischmann. Listen to us on SiriusXM and on leadershipmattersshow.com. I'm here today with a guest who is a visionary leader, someone who has been working to help corporations deliver both value and values in their stakeholders around the world.
Paul Polman is an amazing campaigner, and I say that in the sense of initiative building, an author, and a longtime CEO who is working to accelerate business efforts to tackle climate change and inequality around the world. As CEO of the global consumer goods company Unilever for over a decade, he matched impressive financial performance with transformational sustainability practices that helped to reinvigorate the company and partners around the world. He's a globally recognized voice on sustainability, and served as a member of the UN Secretary General's High Level Panel to develop the organization's 2030 sustainable development goals, the SDGs.
Today Paul serves as the founder and co-chair of IMAGINE, a social venture dedicated to creating systemic change around the world through industry partnerships. He is also the author of Net Positive: How Courageous Companies Thrive by Giving More Than They Take. It was published last year and the book lays out a blueprint for building sustainable businesses that effectively serve the needs of their employees, customers, and the communities they serve.
Paul has been an advocate of stakeholder capitalism since before it became a widespread concept, and I'm thrilled to have him join us today to discuss his life, his career, and to give his advice to business leaders and civil society leaders who are looking to make meaningful, impactful change. There are few leaders who work at the intersection of public, private, and civil society sectors, and I'm so grateful that Paul's joining us on “Leadership Matters” today.
Paul, it is such a pleasure to have you with us.
Paul Polman
Well likewise, Alan, I was looking forward to it. Has been way too long so glad we have the opportunity to connect again.
Alan Fleischmann
Me too, I've enjoyed our times together in the past and I'm looking forward to many in the future, and the opportunity for our wonderful listeners to get to know you today is an opportunity in between.
Let's talk a little bit, because I am struck by the fact that I think of you as a value inspired leader, but also more importantly perhaps a values inspired leader. And I got to think that comes from where you're from. You were born and raised in the Netherlands, your father was a factory administrator, your mother was a school teacher. What was life growing up in the 1960s for you in the Netherlands?
Paul Polman
Well I think your value and values have, I've always believed that the best long term value is created by having strong values. And I think that is increasingly being realized by a broader group of people. And I think I was very fortunate to be born in the Netherlands, it wasn't my choice but as I remind people always, we had enough food at home to not be stunted. We had a toilet at home so I didn't have to deal with the issues of proper defecation. We had free education from the Dutch government. We had six children, my parents certainly didn't have the means to send me to university but the Dutch government did, so I always feel that I won the lottery ticket of life in that respect and that's why I'm probably talking to you.
But I was also, the family was six children as I said. I describe it as good Catholics, my parents met in Boy Scouts and Girl Scouts, my mother was leading that part and my father the Boy Scout part. And they clearly fell in love and that became a very strong marriage. And this was the time, the older I get the more I realize how close it was after World War II, I was born in 1956. But all that my parents really wanted was ensuring that there was peace in Europe, that we got the education that they were deprived of, that the communities in which they worked were functioning. And they were very active in a lot of things from the school, to the sports club, to the church, to helping the community. Despite living in a very small house with six children I don't think we were ever alone as a family, there was always someone else to take care of as well. And it wasn't an animal and they were the people that needed it.
So they really lived the principle of what I would call putting the interest of orders ahead of their own, and knowing that by doing so they were better off themselves as well. My mother unfortunately pass on last year at the tender eight of 92, and my father died way too young already in the early '90s, literally working himself to death with two jobs to make his family function. And my mother was actually the teacher in the family and we could never escape our house without passing her and passing the test of homework and all the other things. And although we missed out tremendously, we think back about on many of the things that they instilled in us and celebrate the fact that they were our parents.
Alan Fleischmann
What number were you in position?
Paul Polman
I was number two so it was easy. I didn't learn to fight, my brother took all the hits and I could walk through the open door. So it's a very comfortable position to be in. And then we have four boys and two girls, so that's a reasonably balanced family. But yeah, it was small. I learned the theory of relativity, that the length of a minute depended on which side of the bathroom door you were on. That was the one place of hiding in the house, but you would close the door and someone was in between that's. But we had fun, we had fun.
Alan Fleischmann
Am I right that you planned at one point to be a Catholic priest and that you even studied at the seminary as well?
Paul Polman
Well it was interesting because in a lot of Catholic families in those days it was the second one that actually would go into the priesthood. The first one would inherit the family treasure, which in our case wasn’t much, but the second one would go into the priesthood. I had some people related to the family that would face this quite often. And when I was in elementary school if you were a good student you were the one that was always picked to be at the funerals or the weddings, which was quite an attractive thing because you didn't have to go to school. But I would hang out a lot in church and I actually enjoyed that, I saw what the priests were doing in those days. So it was a profession that attracted me because if it's done well, I have to be careful what I say, but if it's done well it's there to serve others and it was attractive to me.
Paul Polman
So I went to the seminary to study for priest, but at that time already there were very few people. And then it closed and I ended up going back to my hometown, and then I set my sight on becoming a doctor. I think both of them really related to the need to serve others. But again, in Holland there's a lottery system, the government limits the number of places that they open up for the medical profession in line with their needs. And unfortunately I didn't get into that lottery so I had to do something else. And again, with certain level of serendipity I ended up studying economics because my father made very clear to me that one day I had to earn my own living.
Alan Fleischmann
Yeah. And you went to the University of Groningen?
Paul Polman
Correct.
Alan Fleischmann
And then you went to the US to study. What drew you to do that, to actually go to the US?
Paul Polman
Well if I may be honest it's probably not the right thing to say on the resume, but I wasn't very motivated studying business it was more of an escape. I still wanted to be a doctor. I often think, I thought for a long time if I would retire would I start again studying to be a doctor? It still is appealing to me. And somehow it's in the back of my mind but I'm not sure I can action it. But anyway, as I was studying economics I had a great time in the Netherlands, but most of the books are in English anyway, the MBA program started in the US. But the reality was I wasn't very motivated, my father's company was at tire company he worked for, and that was brought by Goodrich, that actually had the headquarters in Akron, Ohio. And he had befriended some of these Americans that have come over to run the business in the Netherlands. And he had asked him very simply if I could go to Akron, Ohio to do an internship in the factory improving my English, but also getting a broader experience.
So friends of my parents lived in Cincinnati and at a young age of 21 years old or barely 21, 20 actually when I came down the ladder of the plane in Cincinnati I thought, I'm not going to Akron, Ohio and work in a tire factory. So I went around the universities and at that time I didn't have any visa, I didn't have my grades with me, I certainly didn't have any money. And it was very expensive in the US these days so it was a difficult sell. And most of these universities taught me to go around the block. But when I came in at the University of Cincinnati, first I went to the department of home economics which shows you how much I knew. But when I finally arrived at the economics department was a professor Craig Craft, which I'm eternally grateful to because he just listened to me. And this was for the masters program. So then he just frankly told me after I told my story or tried to tell my story, he said, well if you pass tough all the test of English as a foreign language, you start teaching somewhere else in one on one, you get straight As in your semester, then I'll give you a scholarship. And he honored that, I never worked so much but he honored that.
And then soon I got to know a professor in finance who was working on these utility rate increase cases, and as you know the economics and finance are close together, the pricing theories of Miller and others. So I started doing an internship for him as well, so that's how I ended up with my MA in economics and my MBA and finance. And since I had to earn money I had to do some maintenance jobs on the weekends. And since I did my double degree I had to take some night courses, so that's where I met the P&G people, which is not difficult when you're in Cincinnati. In fact, my wife and I were back there last week, which was a very kind event from the university. I met my wife there already after the second semester, she was in the college conservatory of music and we actually met in a class called collective bargaining. We're still working at it, but she was there for the actors equity, I was there for the AFL-CIO. So we both went back and got honored by the university, which was kind of nice and caught up with friends that we hadn't seen for a long time.
Alan Fleischmann
But Cincinnati was your home base then for a long time when you were at P&G, Proctor and Gamble?
Paul Polman
Not really because I've never been hired by P&G, but my life has been full of good luck and gratefulness because the moment I walked in, this is not necessarily a school they hire from, but there was this belief that you needed to have an MBA from the US to be a good corporate citizen, and that wasn't available in Europe yet. So when I walked in Frank Weis, who was the guy who hired me, unfortunately he passed on he was a great mentor to me, but he had been asked to become the chief financial officer of the Belgian company. And he was looking for new people, and I walked into the door that same moment and we had a great discussion. There were some other people on the panel I'm still friends with and they offered me a job on the spot. So my first job actually was in Belgium in cost accounting in the factory. Not the most aspirational job. I also got fooled by the salary because I thought it was in dollars, it turned out to be in Belgian Franks so I learned my lessons there. But it was a very good job because by learning the basics and these basic accounting skills, et cetera at that time they have come in useful in many other times during the rest of my career.
Alan Fleischmann
And you went on, did you go right from there to Nestle? Was that direct?
Paul Polman
Well I was in P&G and traveled all around the world. And again, we were in Cincinnati a while, we had a wonderful time there with our kids who went to school there for three years. I was at that time doing the global laundry business, which was the biggest division from P&G at that time running that. And then the company sent me to Europe to run the international business from Geneva, which brought me back to Europe and to Geneva. So I did that for four or five years and didn't really fancy going back to Cincinnati at that point in time. Actually wanted to retire, I sort of was done to be honest with corporate life. And it might have been hitting my 50th anniversary and having sort of a midlife crisis I wouldn't deny that.
But I thought, I had started the foundation with my wife and there was a real need for it, serving blind people in Africa. And we still have that foundation but I wanted to spend more time on it and grow it. But then Nestle started calling, I had gotten to know Peter Brabeck during my time in Switzerland and he wanted to see if I could be enticed to be part of Nestle. And finally he offered me a crazy job to be their CFO. And this was at the time of Parmalat, Enron, and all of the other CFOs going to jail, so it was the one night I really saw my wife truly worried that I would go to jail. But I thought it sets an opportunity and it sets a stretch.
And I'm glad I did it because it was an incredible journey, not only to work for Peter Brabeck who is a very interesting person and a great mentor and friend, but also to see a different operating model from P&G and work Nestle. So being in the boards of both P&G and Nestle, it prepared me very well for Unilever, which was some people would say the logical next step. But again, it was pure serendipity that that job became available. So I left Nestle after three years and moved to London at the end of 2008 to take on this tremendous honor to be the CEO of Unilever.
Alan Fleischmann
And you, if I recall I remember you telling me years ago you created a double capital for the company, right? You had like two headquarters not one, you kept one in London for Unilever and the other one was, was the other one in the Netherlands?
Paul Polman
Well Unilever has always been a dually listed company, and in fact they always had two CEOs, and that worked at some points in time when the world was very decentralized and it was basically divided amongst the former Dutch colonial empires would go to the Dutch CEO and the British colonial empires would go to the British CEO. And that worked more or less until they couldn't agree with each other, and the company had gone through a rough ride and was in the process of transforming its corporate governance and moving to one CEO. And as a Dutchman, it served them well because there was a tremendous element of our Dutch business that had crept into our culture, but it also allowed me to be in the UK so I satisfied both sides in that sense and built the headquarters in the UK and created a more diverse company.
At that time our board was very diverse with six white Dutch people, men, and six white British men, and amazingly able to disagree. But one of the conditions I had for coming into the company together with the chairman who had just arrived from the outside was to really change the board. And we moved right away to a gender balanced board and we had two people from Africa, two people from the far east, we had the first black African woman that went to Harvard [inaudible 00:16:44] on the board, so we really had a cool board and a very diversified board from the start. Which I think helped me tremendously on this journey because I'd never been CEO and I didn't know what I had gotten into. And this was the height of the financial crisis at the same time, so not an easy moment to start in-
Alan Fleischmann
Yeah, you came in 2009, and you almost immediately started to work to transform the company around sustainability practices, to reinvigorate the company. I often think about the fact that you, that's a big company and a global one with an amazing amount of supply chains at a time when people were [inaudible 00:17:25], you had to really kind of rebuild a culture, if not reinvigorate a new one. Amazing actually the timing, and the things you were talking about were not spoken about so much then.
Paul Polman
No, they were fairly novel, but we were lucky in a sense because it was the height of the financial crisis and I'd satisfied myself that I wasn't the cause of it so there was a need for change already there. And then the company itself had poorly performed the previous decade, so the reason they brought in for the first time a CEO from the outside was probably also there was a reason for change. And frankly, I was lucky in that sense because someone told me once very early in my career the best thing that can happen to you when you get a new job is a low base and a lot of reserves, and I felt that I inherited that sort of. So we started to work off that and there was a burning platform, and it helped actually in hindsight that I came in with an outside vision of what was needed to succeed.
I think the company had become terribly internally focused and had lost its mojo, despite not building shareholder value over the previous 10 years when the markets were really going up. They felt that they had exceeded their own targets, and I found about 75% of the people found themselves in the top right box of exceeding leadership and exceeding business results. So there was a perception and a reward system that were misaligned versus the realities of the business. And it made it easier coming in from the outside too I think to draw some attention to that. It's more difficult to change, many of the companies during the financial crisis went into cost cutting and short term behavior and all that, we simply didn't have that luxury, we had to grow and we had to start get going again. So I took a page out of the book of Jim Collins from Good to Great where he talks about nurturing the core before stimulating progress. And one of the reasons I joined Unilever was because of its enormous brand and it's historical value that had made the company what it was, even though it went through a rough patch.
And we went back actually in the first meeting to Port Sunlight where Horton Manor, was the house that Lord Lever lived in. Unfortunately recently burned down, but that's where we had our first meeting. And it was symbolic, people didn't understand why I did that but it was really to go back to these values. I'd spent the previous months studying the company a little bit because I realized that I wouldn't get the respect because of my position, I had to earn the respect with my behavior. And I thought the best way to do it is to know the company better than others, and it's history and start there and celebrate these incredibly strong points that were there. Lord Lever already in the end of the 19th century was talking about a concept of shared prosperity. His purpose at that time was already making hygiene commonplace in Victorian Britain where one out of two babies didn't make it past year one either.
He was a man that introduced pensions in the UK to guaranteed six day work week, or guaranteed wages and the jobs back when volunteers went into World War I, and not surprisingly we had the highest number of volunteers coming from Unilever. So he was an exceptional person. In fact, when he went to the House of Lords he took the name of his wife, even until today nobody else has done that which is kind of surprising. So anyway, I just went back to these values and said, this is what we're going to bring back to the company. And for them I had to make clear that it was again a multi-stakeholder model, not just a shareholder primacy model that we had also slipped into, that it was a long term business building model which I needed some space. And that purpose was at the core and we brought that purpose back, his purpose of making hygiene commonplace became making sustainable living commonplace and off we went with that.
Alan Fleischmann
That's amazing. Now I want to read about him actually as well. That's, I mean it sounds like he was an amazing visionary, Lord Lever.
Paul Polman
Yeah. If you want a book it's the King of Sunlight. In fact, I'll send you a copy.
Alan Fleischmann
I would love that, I would love that. I definitely want to read it, King of Sunlight. But you were such a global company and you had to unify a company around a common vision around the, I guess your values, your founder's values as well, at a time when people weren't paying attention to ESG anymore. I mean I always think of ESG as a term that was out there and a concept that was out there, and then it kind of waned away and then got resurrected again. And the issues of diversity being a big part of ESG are more recent, but you were doing them already back almost day one, as you said. It must have been unusual to have conversations globally around what is now called stakeholder capitalism ESG when people were not talking about it then?
Paul Polman
Yeah, it was. And there were some things, the company had been run very decentralized so portfolios were not aligned between countries, positionings of brands were not aligned, strategies frankly were not aligned. And we were not using the combined strengths despite being in 190 countries at that time, having a turnover of about €38 billion. So the first year I really spent with the team on needless to say getting the right people in the right place. When you want to grow again you need to have leaders with a growth mindset. So we changed about 70% of the top 100 leaders, or put them into different positions where possible. We put the right structure in place of more global interdependence. We started showing with very simple things that doing like working capital together, or customer service together, our product quality together we could achieve much more than doing that at individual country levels. And that created a certain level of interdependence with some structural changes we put behind that.
And then we started sewing in that first year the core of the Unilever sustainable living plan. My friend Bill George, who I had met when he was still the CEO of Medtronics, and they had a wonderful company in a role that I visited once when I was in Geneva where I saw his leadership style and purpose into action. He had written a great book, which is called True North, which I also valued very much. So I asked Bill, I said, I don't know how to be a CEO, I'm probably a lousy one. I certainly don't know where to start but I think you can't be a purpose driven company if we are not purposeful ourselves, just like you can't be a sustainable company if you're not sustainable yourself.
So we spent the first year on developing a wonderful course, the Unilever Leadership Development Program, which focused entirely on discovering your own purpose, your crucibles, what make you tick, translating that into influencing others and ultimately into getting results. And that course by the way, is still the most important one and I think over 80,000 or 90,000 people have gone through that. So we made that, after this one year we had some confidence of interdependence, we had more of the people in the right positions, collectively we could have discussions on what the company purpose was. So we made that the cornerstone of the company strategy, we allowed all the employees to be part of that story, and then it's just a matter of creating the right environment to unleash all this enormous potential that comes with being strongly purpose driven.
So for us, it meant for creating the right environment for example, it meant stopping quarterly reporting and stop giving guidance, and moving compensation systems to the long term so people could think longer term. It meant taking responsibility of our total impact in the world, not just in scope one and two what's under your control. It meant thinking about optimizing the return of all stakeholders and what that meant. So we started with the stronger purpose that we had was the leadership that we put in place. We started to think bigger and to set more aggressive goals meant after rigorously measuring our value chains we made these goals public. And here I think the thing that we did well by serendipity once more is we set the goals that the world needed, which made us also feel uncomfortable. We made it also very clear that we didn't know how to get there and that we couldn't do that alone. And I think it brought a certain level of humanity back to business, which I think has been lost in most of the businesses.
And we started to regain trust, we started to become more attractive for people to work because of that stronger purpose, we started to create these broader partnerships, and bit by bit the business then responded and started to grow. And we sold it in 10 years off top and bottom line growth, a 300% shareholder returns so ultimately the shareholders were satisfied as well broadly. But yeah, in the beginning it wasn't easy to convince the shareholders because the company had not delivered for 10 years, then someone comes in and tells them that he's going to stop quarterly reporting and that he's going to focus on all the stakeholders, that he only sees shareholder returns as a result of what he does now as a myopic objective. So it created a little bit of angst and anxiety in the financial market, and with the ease with which the share price had shot up 8% when I was announced, it came down again 8% when I told them I wouldn't report anymore on a quarterly basis and I would move to this different model.
So here again, Stephen Covey in his book 7 Habits says it very well when he says, you cannot talk yourself out of things you have behaved yourself into. So I knew very well that I had to behave myself out of it and show them that this was not going to be a big restructuring announcement or a write down, I was very respectful to my predecessors. This was going to build the business by investing in the pillars that ultimately give you that long term growth. Yeah, that took a little bit to explain. I certainly discovered it was easier to get rid of shareholders than to attract new ones, but bit by bit we regained that confidence with the results that we were putting out there.
Alan Fleischmann
Were you able to do, the non-reporting on a quarterly basis is pretty amazing actually. And you were able to actually do that and consistently do that. I mean you certainly proved to them over time that you could have a purpose and have profits at the same time and do well by them, but I imagine when you first said no quarterly announcements, no quarterly earnings announcements must have been really controversial?
Paul Polman
Yeah, I would argue that if you want to have long term guaranteed profits also for your shareholders, most of them are interested in this longer term return because they're related to pensions and all that stuff. You can only have these profits if you have a strong purpose, and in today's volatile and uncertain market it is increasingly visible to people that if you don't have that and you myopically optically focus on the shareholder you're actually killing the goose with the golden eggs in the first place. In the US we've seen over the last five decades the number of publicly traded companies dropped by half from 4,800 to 2,500. We've seen the lengths of a publicly traded company go from 67 years when I was born to 17 years now. We see the average length of a fortune 500 CEO dropping well below five years. So this short termism has not really served us well to be honest, and it was masked by globalization, by lower commodity prices and other things so that the results were there but they weren't really driven in a sustainable way next to the tragedies of using consumption and production process that uses the world’s scarce resources, which is another story.
So people understand now that for most companies value creation happens three to five years out, sometimes 10 years out, sometimes 15 years out, and it doesn't happen on a quarterly basis. So marrying, convincing the shareholders of that model was certainly new because we missed the data to support that. Now we're in a totally different position, if I may be honest there's no excuse anymore. We can now show that more diverse organizations better perform organizations that internalize the challenges of climate changes, better perform, or organizations that have more resilience in its total value chain and strive for living wages, invest in their people and training and development, et cetera, they perform better. So ESG funds have performed better, the financial market is now getting interested, legislation is starting to move. So all these things were missing at that time.
So it was an act of faith and it was very clear that many in the financial market didn't have that thinking and that faith, now it's a little bit better. So on top of that the incentive systems were wrong, many people including CEOs are incentivized on the short term. The average long term compensation in the US, Alan, is 1.8 years, I mean give me a break. Pressures from the board is often on the short term, fund managers are often on the quarterly performance incentivized. So slowly but surely that is moving in a better direction, but you're up against a lot of different drivers that need to change. And so I focused on moving these boundaries and then allowing people to do the right thing. And if you do the right thing I think everybody will be happy in the end.
Alan Fleischmann
Wow, that's amazing. When you stepped down, left Unilever in 2018, I think of you by the way as being confident but very humble. So I'm asking a question that's not easy to ask, but what would you say were your greatest accomplishment looking back? I mean I got to think it's because you made ESG, and you made diversity, and you made sustainability in itself, and then what you just described long-termism around capitalism, your greatest of legacies that you're still living and leading now? Are there other things that you would say that you actually look at and say, I'm very proud of the team and what we accomplished in this way or that way?
Paul Polman
Well it's uncomfortable to answer that because I don't believe in working towards my own legacy, because I've seen too many people trying to create a legacy for themselves and then doing the wrong things for society. I've always said that even if Unilever achieves all these objectives and scoops up all the prices, but the world is not moving at the speed and scale that is needed I've still failed my children. I still can't look them in the eyes today and tell them yeah, Unilever did all these things, we're still heading to a two and a half, three degrees global warming, or we're still wiping out 1 million species as we talk, we're still cutting down the forest as if we don't care. So the success of Unilever, perhaps partially we've shown that there are alternative ways of doing business, that these longer term, multi-stakeholder business models could be very responsible, that business can play a different role in society. I think we've brought more confidence to others to follow us, and we're seeing indeed more companies now stepping up to that plate. But we cannot be satisfied, I think the most important thing I think that I focused on is to be sure that Unilever had better people when I left.
And it was very important to me to be the number one employer in most countries that we operated. We were the third most looked up company on LinkedIn after Google and Apple, we got over 2 million people applying to us every year. So we didn't have a talent shortages and we could really drive that further and harder in the organization, and give people that pride back. To show that if you set these audacious goals that people rise to the challenge, that we're always able to do much more than what we thought. And nothing is more satisfying than doing something with purpose, but also getting the results behind that. And I think that combination was very stimulating for a lot of people. So I'm glad about that, and if we influence someone who then went off to other companies to do the same thing, or if we influence other companies by looking at our successes that's obviously important, but we cannot sit still until we in essence have solved these biggest issues that made us make these changes in the first place, Alan.
Alan Fleischmann
You know what I love about you and your leadership and how you spend your time is you understand, and you articulate so well that these are urgent issues. These aren't issues that you're prioritizing because they're important only, but they're urgent. And you created the IMAGINE Foundation and you've written this book, but even when you wrote your book which I want to talk about and I want to talk about the IMAGINE Foundation, your book wasn't really a memoir. It surely told the story of what you did and why, but it also had in their real principles, actionable things in which one could put into practice. And you embrace the fact that we need to harness the power of the public sector, private sector, and civil society to come together if we're going to deal with those urgent issues.
So tell us a little bit about both, the IMAGINE which is really a movement, but the IMAGINE Foundation which is what you're doing with corporate leaders and leaders across civil societies, as well as private sector, and then also some of those best practices that you would want people to read. I want people to read your book first of all, Net Positive, but when they do read it to really look at it as an actionable book as well as a reflection of what needs to be done.
Paul Polman
Yeah, so there's a lot in it what you are saying.
Alan Fleischmann
I know, sorry.
Paul Polman
So you know what was very clear to me, I spent 10 years at Unilever and the first five years is really getting Unilever on the right track and making the company work and our value chain, et cetera at industry level. But I also discovered that if we wanted to really tackle the bigger societal issues, climate change and inequality being the most important ones, optimizing within a current system that isn't designed to deliver just doesn't work anymore. Last year July 29th was the date of World Overshoot Day, which is the day that we use up more resources than the world can replenish. Frankly, any day after we're stealing from future generations. This wonderful world is 4.6 billion years old, if I put it at the scale of 46 years we've only been around as human beings for four hours. The industrial revolution started one minute ago and we've cut down half the world's forests, we've lost 70% of the worlds species, mammals, birds, reptiles over the last five decades alone.
So I think we're starting to now finally all discover that we can't have infinite growths on the finite planet, and anything we can't do forever is by definition unsustainable. So optimizing within a current system, Alan, that is designed to not deliver only brings you so far. And this is why we find most companies doing tremendous things, being very heroic in efforts they've never done before. But if that system isn't changing it's the bigger level of frustration. I think it was Einstein who said the definition of insanity is to do the same thing over and over again and expect different results. So what I've tried to do in my second five years, basically helped by being part of the high level panel developing the sustainable development goals, which for me was one of my most transformative experiences in life, is to form these broader partnerships with civil society and with governments ultimately to drive these broader systems changes.
People, if you look at Rutger Bregman’s Humankind, his book that he wrote, he's a fellow Dutchman. The essence of his book is that you believe in human mankind, and I do also, I think everybody has a little diamond inside of themselves that we need to make shine. But so there are no CEOs who want more unemployment, more air pollution, or more children going to bed hungry, but collectively we act that way. And the reason we act that way is because of the boundaries that are put around us. So how do we move these boundaries? Not only have returns in the capital market but also more on labor, move the financial markets to the longer term and make it subservient again to the real economy, putting a value on social and environmental capital so that we also take care of that in our system of capitalism, these are major boundary changes that drive behavioral changes.
So as all CEOs are held to a much higher standard now than frankly what they can deliver on themselves, think about things like plastics in the oceans, or deforestation, or even climate changes. We need to create these platforms of this broader partnership. So I never wanted to write a book. Ali Igna convinced me. I always felt that every CEO who retires and writes a book is either to stroke his ego or to rechange history, and both of them were not appealing to me. But he said, you need to share what you've done because people need to get that understanding of how to start a journey like that. So it is the start of a movement of redefining what good looks like, and I'll get into that in a second.
And then I created IMAGINE, which is basically a neutral platform where our theory of change is very easy. You bring together by industry sector a critical mass of CEOs along the value chain, and a critical mass is 15%, 20%, sometimes 25%. Then because they come together collectively they become more courageous. And once you have 20% let's say of a value chain, you can then work with civil society and governments and actually drive tipping points. 70 companies in fashion are now moving to regenerative cotton, getting out of single use plastics, internalizing science based targets for nature. 30 companies in food are now getting together to a coordinate crisis response to the Ukraine, a tragedy unfolding close to us, but also to move to regenerative agriculture for example. Redefining our menus and habits of healthy diets, that needs to be done collectively. So increasingly that space, which I call pre-competitive space, has to be increased. And I remind every CEO that we should never compete on the future of humanity. So any of these areas that affects that future we should actually operate, and that's what we're trying to with the IMAGINE platform.
Now the book is very simple mindset change that most companies are in the CSR mode, corporate social responsibility, nothing bad with that but it is actually about being less bad. And a world that has overshot its planetary boundaries by such magnitude already where we're close to negative feedback loops in many areas, less bad simply isn't good enough anymore. I used to kill 10 people, now I kill five people, am I a better murderer? It just doesn't work. So then people say okay, I need to be sustainable. But sustainable is neither good nor bad, that's sort a neural precision that again is admirable to be at. And this is where a lot of these net zero targets come from that you're reading about. But at the end of the day we need to be regenerative, restorative, reparative, and that is what we call net positive.
It's a very simple question that every company should ask in my opinion, is how can you profit from solving the world's problems not creating the world's problems? And frankly, is your company better off because your business is in it, yes or no? And I'm not so sure, Alan, that many can answer these two questions very affirmatively. Not Unilever either, so we need to help these companies. And the book is about that, the personal journey which is obviously at the roots of everything, the company transformation itself, and then the broader partnerships that we're covering in the book in two chapters, one plus one is 11 and it takes two to tango.
And then we go on to the need to be consistent in everything you do, and also tackling the tougher issues of money and politics as we've seen in the US, or human rights issues, corruption, CEO salaries, trade associations, often lobbying for different things than what companies publicly program. These are tough challenges, but this is a moment of truth for the ones that are in a position to do something about it, to put ourselves to that service of humanity. At the end of the day, I think we've discovered that this is not a crisis of climate changes, or income inequality, or food security, this is a crisis of greed, of empathy, of selfishness. And hopefully this book brings that humanity back to business and gives you the tools to work as much on our own leadership style that we all need to do, as well as on the broader systems transformations.
Alan Fleischmann
Yeah, and I love what you're talking about, what you're leading, what you're saying is that at the end of the day it's about making capitalism work but work for all. That takes into account our planet, our humanity, and addresses society in a way that makes people feel that they're part of it.
Paul Polman
Yeah, absolutely.
Alan Fleischmann
And it has not been working, it has not been the case. And because of that we've got all these great divides.
Paul Polman
Yeah, we're at a point now, Alan, that we're paying a higher price for not acting than acting. Which also makes it such an enormous business opportunity. You look at COVID, we've spent $17 trillion to save lives and livelihoods in Europe and the US alone, and we're nowhere out of the woods. That's infinitely more than what it would cost us to prevent these issues in the first place. And by the way, it shouldn't have been a surprise. We had SARS, Zika, Ebola, Asian flu, it's a direct result of destruction of our biodiversity, these zoonotic diseases. So why not protect it? Why not restore our degraded land? Why not provide livelihoods to smallholder farmers?
So all these things are related so that we have a world where we can live in harmony with the planet, where we preserve it for future generations, and where we also live in harmony with fellow human beings and not have increasingly fewer and fewer people on these islands of prosperity with bigger walls and this increasingly growing ocean of poverty. And the water is running by the way, literally to drown these people in poverty, it just doesn't work anymore. Any system where too many people feel they're not participating or are excluded will ultimately rebel against itself, and we're very close to that. And CEOs I think would be well served to take notes.
Alan Fleischmann
And that's your target, right? Your target is to get leaders to lead, which is a big focus of my work, this show, and your impact is that how do we actually give the tools, the opportunity for leaders to do the right thing and then do it collectively? And that's kind of what the IMAGINE platform's doing, right? You're identifying leaders, corporate leaders in particular, but leaders from private sector and civil society, and then come up with scalable efforts together?
Paul Polman
Yeah, correct. The beauty of the platform of IMAGINE where we think we are unique is that unlike trade associations that drift to the lowest common denominator or the consultants who often have their own interest there are conflicted as we've seen as many of the scandals unfolding, this is a neutral platform where we both work on leadership transformation as well as systems transformation. You cannot have the systems transformation without the leadership transformation. Because these things take courage, that's why we use the word courage in our title, courageous companies thrive by giving more than they take. It takes courage to take responsibility for the total impact that you have in this world. Unlike, many companies think they can outsource their value chain and outsource their responsibility, doesn't work anymore. Few companies take responsibility of their total impact. It takes courage to set the targets that the world needs even if you don't have all the answers. Many set targets they can get away with. It takes courage to work together with others.
I've worked with governments and NGOs and heard some of the inconvenient truths, but I'm glad we did. Our food plans in Unilever were so much stronger because Oxfam fought for land rights for women, and getting biofuel out of the food system, and whatever, it made us so much better but it takes courage to do all these things. And that courage obviously can only come from a strong sense of purpose, but it can also come from working collectively with the CEOs. And we were talking the Ukraine crisis two weeks ago outside of London here with about 20 CEOs in the food sector from the biggest companies in the world, and we deliberately met on a farm. We called a farmer and they opened the door, didn't want to get paid for it either. And we were literally sitting in the farm on the floor. But I can tell you the dynamics are different. It just reminds us all what this is all about instead of being in an office floor.
I remember the Japanese when they said, why are the Europeans struggling or the US compared to the Japanese when the Japanese were so successful? And it was because of the genba. The genba is when there's a problem in Europe or in the US, we all go to the conference room and talk about it. When the Japanese had a problem they went to the factory floor and looked at it, and the factory floors go genba. So I think this leadership development that we need to do is bring people back, especially CEOs who are often in a tower and shielded and protected, bring them back to the genba. And that is probably the first leadership skill that we need to listen, to be aware, to understand what is going on in the world.
Alan Fleischmann
You're listening to “Leadership Matters” on SiriusXM and at leadershipmattersshow.com, I'm your host Alan Fleischmann. I'm here with an extraordinarily impactful leader who has done much and still continues to do much across private, public, and civil society sectors. Paul Polman, the former CEO of Unilever and the founder of the IMAGINE Foundation platform, as well as the author of Net Positive, a book that really does not only tell the story of what private sector leaders should do but what they can do, especially when they do it together. This idea of actually harnessing that power, Paul, and giving them the courage or letting them be the courageous leaders that they are destined to be is what we need now more than ever. I mean I see you as a great catalyst of these ideas, but I also see you as a great convener. Is a lot of this about bringing them together so that they can combine their efforts together, or is it more one by one let's get them to do right by their shareholders and their stakeholders by thinking long term?
Paul Polman
No, Alan, first and foremost it's obviously earning a seat at the table, which is getting your own house in order. There's no question about it. I was just talking today to the fragrances and flavor industry and looking at all their plans, and industry after industry if we would just take best practices of the leading companies we would probably solve already 65% of the emission issues that we have if we would just attack waste and move to a circular economy that we can, we would also attack one of the biggest issues of the planetary boundary stress on the finite resources that we have. So we have the tools. We've never been so forewarned, we've never been so forearmed, but we need to work together because ultimately we need to get rid of the free riders. We need to create this level playing field. We need to be sure that government policies don't go in the wrong direction.
Even today on energy and on food, we have probably $1.8 trillion of peverse subsidies that push you into deforestation or that push you into more carbon emission. So this can only be solved ultimately after you've earned your seat at the table, and there's a certain level of trust which is probably the most important currency, then to form these broader partnerships to drive these bigger breakthroughs. And if you look at the COP26 in Glasgow, or if you now look at some of the things we're working on for the COP27 or in the efforts that are going on in for example the G20 or G7 that we're preparing for now, it's increasingly these broader partnerships that give us that hope that we can address these more structural issues.
Alan Fleischmann
And it is urgent, I mean that's the point is it's not like these are experiments to play with, this is about getting these things in order moving quickly, moving collectively in order to deal with these urgent issues, as you said, because time is running out. These are not theoretical data points of yours. And what I love about your book is that you talk in Net Positive about these data points that show that you've actually done the research, it's not just trying to convince you based on theory, you're basing it on fact.
Paul Polman
Yeah, and it's a big opportunity, that's the whole thing. This is a positive story for companies that embrace it. The ones that don't are heading to the graveyard of dinosaurs. But even today we have millions of people going to bed hungry not knowing if they will wake up the next day. I don't want to be responsible for food waste. We have 8 million people dying prematurely of air pollution, I don't want to be responsible for that. We have an increasing number of refugees, we've pushed refugees up by probably 50 million in the last few years alone by not addressing some of these planetary issues. I don't want to be part of them. At the end of the day we have to first and foremost realize that we are citizens of planet earth, that we could have been some of those people that didn't have the education, or that were suffering from climate changes, or didn't have access to food security as a result, or are in a conflict zone.
So if we are in a position like CEOs or senior management in companies, we are already very fortunate in the first place. But it is also then our obligation, our duty to put ourselves to the service of the other 95% now, nearly. And anything short of that will make us complicit to the crime in the first place that we're needing to solve here. These are becoming crimes against humanity. It might sound dramatic, but we have the science to back that up, we have the evidence. And what makes it now so attractive to push for it once more is that the interest of the longer term shareholders and the multiple stakeholders are converting in the sense that the best way to satisfy the needs of the longer term shareholders and give them decent returns is actually to increasingly take care of your multiple stakeholders.
We've again seen in COVID that companies that were better taking care of their employees, or had better relationships with suppliers and their value chains, or had a better resilience built into their business models in terms of mental health or employee safety nets, these companies were also performing better. We see that this greener economy that we need to create is not only more resilient, but it actually also creates more jobs. We see that it is significantly cheaper now to restore biodiversity than to deal with the consequences of the destruction of biodiversity. So all these factors are now coming together. It is confusing, there's a lot of things to do. Many of the CEOs have a hard time in this enormous environment of change to keep their heads above the water and keep their companies afloat, but it's in that collective power now that we can muster, that we can handle these tough challenges and we would all be so much more better for it.
Alan Fleischmann
And employees want it as well, I mean I think the other thing is one of the greatest allies for a CEO is when the employees believe that the DNA of the company in which they work has the values that they want a company to have to do good and not only do great, but to do real impactful work in the community at large. Are there traits, leadership traits that you think are critically important in creating a net positive business? I'm thinking leadership traits at the C-suite level that you have seen work and that need to be almost adopted if we're going to make this work?
Paul Polman
Yeah, what we have seen clearly during COVID as we have seen the bifurcation between companies that have been primarily focused on the shareholder and the ones that have been focused on the multiple stakeholder longer term, we've also seen bifurcation in leadership. This is a period of incredible angst as we talked and insecurity, it's not easy for most of the people out there. But again, leaders that have shown a high degree of humanity and humility, compassion, and empathy, that have a strong sense of purpose, that see the power of partnerships, that think multi-generational, those are the leaders that instill a higher level of trust in employees, that in fact bring that certain level of confidence that people are looking for. And these are the people that will be followed.
We've seen also awful leadership behavior that I wouldn't want to describe here, but that are good lessons of how not to do it. So that bifurcation is clear, so we need to bring humanity back. We have distilled everything in business to spreadsheets, to win lose, to short term day trading, to numbers. It is time to just start and end with people, the people we need to serve, the people that make up the success of our companies, and that starts with bringing humanity back. And that's what the leaders, the real leaders of today and tomorrow understand. We talk about five critical traits of a net positive leader in our book that goes into it a little bit more in detail, but that is more or less the essence of it what we're talking here.
That's why it's more so important that we invest in leaders. I'm the chairman of the Saïd Business School and on the board of PRIME, which is the Principles for Responsible Management Education. But it's absolutely important that we change business education, which is the most followed education in the world actually, hundreds of thousands of people graduate from that every year. But the current way that we teach them in the MBA programs is really making them little Milton Friedman's on steroids. The Aspen Institute did a study once a few years ago where they interviewed students before they went into their business programs and after they came out, and when they went in they wanted to change the world and they wanted to be part of these bigger improvements that humanity was looking for. And as soon as they finished their programs they wanted to earn money and they wanted to work for Goldman Sachs or for one of the banks. So really if we don't start with the education program itself and the leadership development we will not get there. This world is short of leaders and trees.
Alan Fleischmann
Yeah, we need to have a second hour of a show with you. And I mean it, I'd love to come back with you, Paul, and kind of nail down some of these things, maybe even bring one or two people on the show with us if you thought it was worthwhile. But this idea of unearthing and what you put out as principles, but also real prescriptives in your book, the work that you're doing in IMAGINE, count me in, I want to work with you. And for those who are listening just for the last second, if they want to be involved with your efforts too or be supportive is there somehow that they can be in touch with IMAGINE or just show their support? I mean part of it is just living the life that you're trying to get people to live, but is there any other way in which they could be supportive?
Paul Polman
Yeah, we have the Net Positive website, so that's also a sort of a course you can do and some questions you can answer to see where you are with your company. There is also a letter that we're now putting out that, I think it's over 250,000 people subscribing already in a relatively short period of time, where we take some issues that might be of help. And then obviously as we put these collectives in place, increasingly if you are in some of these industries that we're looking at, tourists and travel, fashion, food, now actually private equity because we can hit a lot of companies, half the world is now in private hands in terms of business community. So if you are in any of these sectors, join our movement as you rightfully described it and be part of that transformative change by becoming part of that critical mass of change agents. And it would certainly, anybody that does sees the benefits for their companies, anybody that doesn't I think is already starting to be the price for it.
Alan Fleischmann
No, I think this is, I mean the urgency in which you speak and the way with you're laying out the roadmap, I want to urge people to be part of it. We don't have time and we need people like you who can be that great catalyst of both the right way, the right ideas, but also the convener of bringing people together. You've been listening to “Leadership Matters” on SiriusXM and at leadershipmattersshow.com, I'm your host, Alan Fleischmann. We've been here with Paul Polman talking about his work, talking about his journey, and talking about the urgent work ahead with IMAGINE, with Net Positive, and grateful that you're on. And Paul, I hope you'll come back on and we'll do more, and we'll turn to more actionable things to meet the urgent needs that we have.
Paul Polman
No, thank you, Alan I enjoyed it and thanks for all you're doing. And also, you undoubtedly have a self-selected group of listeners, so I want to thank them as well for all the contributions they make to make this wealth a better place for everybody every day a little bit more.