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Business is an unlikely hero: a force for good working to solve society's most pressing challenges, while boosting bottom line. This is social purpose at work. And it's a dynamic journey. Purpose 360 is a masterclass in unlocking the power of social purpose to ignite business and social impact. Host Carol Cone brings decades of social impact expertise and a 360-degree view of integrating social purpose into an organization into unfiltered conversations that illuminate today's big challenges and bigger ideas.
Carol Cone:
Welcome to Purpose 360, the podcast that explores the power of purpose to drive business success and societal and environmental impact. I'm your host, Carol Cone. And today, we're bringing you an edited encore of one of my all-time favorite episodes, an inspiring and deeply insightful conversation with Paul Polman, recorded shortly after the release of his groundbreaking book, Net Positive: How Courageous Companies Thrive by Giving More Than They Take. If you're not familiar with Paul, he's the OG of purpose. He's a globally-recognized business leader, co-author, climate and equality advocate, and one of the most visionary CEOs of our time. As the former CEO of Unilever, Paul famously broke with short-term Wall Street pressures to champion long-term thinking, stakeholder capitalism and a bold environmental and social agenda. Under his leadership, Unilever didn't just talk purpose, it embedded it throughout the business. Their purpose was making sustainable living commonplace. And that drove a 300% shareholder return over 10 years while leading the charge on sustainability and equity.
In Net Positive, co-authored with the delightful and a good friend Andrew Winston, Paul offers a bold manifesto for a new kind of leadership, one that meets the moment of our global challenges by asking not how can we do less harm, but instead, is the world better off because your business is in it? That simple, provocative question is at the heart of his book and at the center of our conversation.
As the book says, being net positive means improving well-being for everyone we impact, and at all scales, every product, every operation, every region and country, for every stakeholder, including employees, the engine of all of our companies. They're at the heart of what we do. Suppliers, communities, customers, and, let's not forget, future generations and our planet. This episode is a must-listen for any leader seeking to drive growth while leading with values, integrity, and a clear sense of responsibility. So, let's begin.
Welcome, Paul.
Paul Polman:
Thank you, Carol. I'm honored to be on the show.
Carol Cone:
On LinkedIn, you say the best advice you were given is that you either make dust or you eat it. You've been making dust throughout your career by mobilizing businesses to better serve humanity. So why? What is your purpose that drives this work?
Paul Polman:
Oh, thanks, Carol. I've always believed that it's important to do the harder rights than the easier wrongs, and that you should fight for some of the basic values that make humanity function, values like dignity and respect, equity, compassion, and anytime these values get violated or attacked, you really have to speak up because you're talking about the future of humanity.
We should actually have not have to write this book in the first place. That would have been better for us, but we're finding ourselves at a crucial junction for humanity. We're actually stealing from future generations. We've lost 68% of our mammals and reptiles over the last four decades. We've cut half of the world's rainforest. The issues of climate change are incredibly increasingly transparent, and the system, frankly, where we leave too many people behind. I've often said that any system where too many people feel that they don't participate fully or are left behind will ultimately rebel against itself. We are at this crucial juncture where we really have to decide if we're going to live together in harmony and in sync with planet earth or if we become one of the statistics of extinguished species. I know which side of the history I want to be on.
Unfortunately, we've waited long. We've waited way too long for this. People are now broadly convinced of what needs to be done in terms of the direction, but what is missing is the speed and scale, and this is what the book is trying to address. Many people struggle with that. In essence, I believe in the goodness of human beings, of CEOs, et cetera, but it's the how that needs to be answered now, not anymore the what.
Carol Cone:
So let's start with at a high level. What does it mean to be a net positive company?
Paul Polman:
We describe it as actually a company that gives more that it takes. It's not good enough anymore to be CSR or corporate social responsibility, which is basically dealing with the less bet. We really have to move to responsible social corporations and make that shift. It means actually moving first and foremost to having no negative impacts, which many people call net zero, but as we are passing these planetary boundaries, we actually need to think about restorative, reparative, regenerative, and this is what we call net positive, how you can actually show that you have a positive impact in this world by being around. If you can't really show that, why should the citizens of this world keep you around in the first place?
Carol Cone:
You spend a tremendous amount of your time about leadership. Can you talk about the traits of a net positive leader?
Paul Polman:
You cannot get a systems transformation or a business change transformation if you don't have the leadership transformation. So that's why we put in this book is first and foremost that it starts with yourself to become this courageous, purpose-driven leader before you can actually drive the broader changes in your company and the broader system.
It takes courage to set targets that you know that are needed, but that you don't know quite how to achieve. It takes courage to play how to win versus not to lose. It takes courage to work in partnership while you expose yourself, while you have to listen to other ideas, where you might not have the power that you're used to as being a CEO. It takes courage, really, to go out of your comfort zone.
So we like the word courage because it comes from the French word cor, which is heart, and we need to bring humanity back to business. We cannot just distill it into spreadsheets and simple numbers as Milton Friedman was trying to do.
The reality is we're short of leaders. The average tenure of CEO is now less than four and a half years for the little companies. The average lifetime of a company itself is 17 years. It was 67 when I was born. The number of publicly traded companies are going down. This is not a crisis of biodiversity loss or climate change or food security or inequality. This is a crisis of apathy, of greed, of selfishness that needs to be addressed. It starts first and foremost therefore with your own journey and your own leadership.
Carol Cone:
So I'm glad you said that because I want to talk about how you really created the culture and the direction to follow you for the USLP, Unilever Sustainable Living Plan, was to start with the personal purpose of your leadership team. What does that mean? How do you do that with the senior leadership team and then cascade it down into the organization?
Paul Polman:
I think the first requirement is not only your own self-awareness but about awareness, what is going on in this world. Purpose is defined by Colin Mayer as to profitably address the issues of people and planet, but you all need to understand these issue of people and planet.
So it really starts with taking responsibility of your total impact. It starts with listening very carefully to all of your stakeholders, your communities, your suppliers, your trusted peers, the people you serve, and all of these things.
Now, you cannot have a good relationship with your partners in the value chain or in society at large if you don't have employees that feel good about the company they work for. I always say you have to pass the dinner table test. When I'm at a dinner at someone's house and, "Oh, you're such a big plastic polluter, you're irresponsible in the way you do human right or you're more of a problem for today's world than frankly a solution," you don't feel comfortable or if you can't defend yourself and explain, you can never be an engaged or motivated employee.
Carol Cone:
I want to talk about other how's, which is why it's important to have transformative partnerships. I want you to talk specifically about partner to win, how you make suppliers partners because I think that a lot of our listeners are going to go, "What?"
Paul Polman:
So the bigger things you need to do is first to get your value chain impact under control. What we did is partner to win and said, "Since we carry the responsibility of the ultimate product that we sell to the final citizens of this world and we have this contract of trust, of transparency, we need to be sure that all of the elements that go in to producing these products live up to the highest standards, be it no child labor, be it no slave labor, be it no corruption, be it not linked to deforestation, be it ensuring that people have fair wages in their value chains."
Unilever had 90,000 to 120,0000 suppliers when we started, but we took the top 1,000, which was about 75% of all what we were buying, and we put level in place. We helped them. We put training in place and development and we said to these suppliers, "Why don't you live up to the same commitments and standards that we set? You become stronger partners with us."
The result of that for Unilever was that most of the major suppliers would bring the innovations first to us instead of others, that we saw companies like Seventh Generation or Dermalogica or other wonderful B corps in the system, Pukka, that they said, "We want to work with you guys because you aspire or you can scale what we aspire to with the values that you live."
Carol Cone:
I think that's amazing. I have not heard you talk a lot about that in other podcasts, and I don't think people unless they really study Unilever get that. So I hope our listeners heard that really well and begin to practice that. Of course, I read the book. I want to question the question about measurement because you were very transparent about what you achieved but what you didn't. So why is that so important to a net positive company?
Paul Polman:
It is important for various perspectives. After you set your purpose, we talked about bring the purpose to yourself and your people. You have to set net positive goals and clear targets. First of all, these goals have to be stretching. You have to set targets that might make you feel uncomfortable because you just don't have all the answers yet, but these are targets that you know are needed.
For Unilever, these were targets of all our products sustainably sourced, zero carbon emission in our value chain, 100% living wages, at least 50% women including people with disabilities at its fair share, et cetera. These were targets that we thought over the 10 year period we should achieve.
Why is it important? For two different reasons. The first one, Carol, is that by setting these targets, you assume responsibility. You can be held accountable. By making these targets public, in Unilever's case, three overarching targets, but 50 total targets and, yes, we have lots of debates of why so many targets, but you create trust.
The driver of trust is transparency. Transparency drives trust and trust drives prosperity. So we found that making this transparent, reporting all that every year, and finding all of our stakeholders to come with us on that journey lifted up the level of trust that was bestowed on Unilever. That got translated into becoming the employer of preference in all of the countries that we operated and employee engagement in these relationships we talked about.
The second reason for this is that as we set these targets and they were so audacious. No company, frankly, had set them that we did something by coincidence that made this human. We said we don't have all the answers, which is very rare to hear from a CEO, and we don't know how to get there alone.
So we actually opened the door for partnership, for saying to people we know that where we are is not good enough. Don't just attack us for that or advocate endpoints because we actually agree with you, but become part of this journey because it's overly tough. The how to do this is where the most difficult thing is, not in the why we should be doing that. So setting these goals and these clear targets where we call it, obviously, blow up your boundaries. It's what we talk about in our book.
Carol Cone:
Absolutely. I totally agree to that. You're talking about humility, having the humility to say, "I do not know the way forward but I'm inviting others in." What does it feel like to be an employee in a net positive company?
Paul Polman:
The most important thing is really the cultural change. Culture is really a function of the values that you put out there, but more important the behavior. It's the value and behavior that decide the culture. So many companies, the Boeings, the Enrons, the GEs, the [inaudible 00:34:39] the Wells Fargos, and I could go on, they probably have wonderful value statements that made you cry, but to make it come alive is where they fell short and then it creates a rotten culture.
So think about this enormous loss of opportunity. So what does engagement feel like in a company itself when you get there? It's an environment where each and everybody can develop to their fullest potential, where each and everybody is respected to their fullest irrespective of race or gender or culture, where decision making is delegated down to the levels of where the decisions are, not where the hierarchy sentence its powers, where people are aligned around a common goal.
People said often to me in Unilever, "How come that anywhere I go any of your countries, we were in 190 countries, people say the same thing, especially about the Unilever Sustainable Living Plan and feel nearly like missionaries in terms of changing the world?" I said it's because that purpose is so strong and so aligned.
Carol Cone:
Can you just mention what your return equity was for your 10 years at Unilever versus the footsie?
Paul Polman:
First of all, on top and bottom line, we grew every year and we outgrew our competitive set over 10 years. We had 300% shareholder return over that period, which was well-ahead of the market by a factor of three. We operated despite 64 acquisitions I talked about at 1 19% return on invested capital.
You do have to have business results and you do need to take your shareholders along and increasingly, you should be able to translate your sustainable strategy, your focus on your purpose into a value creation story. I think companies are becoming better at it, but very few CEOs are still skilled at it. Ultimately, you need to produce those results. There's no question about it.
I think the main argument you might say there is the moral argument, but, unfortunately, we don't have the luxury of time to just wait for the moral argument to prevail, but I think increasingly, the reason that you see the financial market and may I say in many areas ahead of the rest of the business community is really the increasing evidence of the financial effectiveness of this different business model.
Carol Cone:
I wanted you to talk about that because I've always had people patting me and then, "Oh, you're such a do gooder. You want businesses to do good, but this is business as well." You talk about the USLP as an enterprise purpose, but why is it important to have brands building off of that and any insights about brand managers who truly want to embed purpose, real purpose into their brands?
Paul Polman:
Well, ultimately, you need to be sure that as a company, you have minimal standards that you consistently apply across the company. That consistency is very important in terms of getting your credibility or being seen as genuine. That's why we started to reintroduce the Unilever brand also. I found that people are more curious to know who the companies are behind these brands and the companies they deal with.
On sustainable sourcing, on livable wages, on gender equality, these are things you can't pick and choose, you have to do across the organization. Then increasingly, your contract, at least for consumer-facing companies like Unilever, your interactions with the citizens of this world is through your brands. Citizens increasingly want to associate themselves with brands that stand for what believe in.
What we found was brands that have internalize in their brand key a purpose and make that come alive stronger than others are brands that have a real connection because people want to be part of a movement.
It's interesting. You might say eventually I cannot make a difference. People feel a little bit disempowered at an individual level when these problems are so overwhelming, but collectively, you have millions of people, hundreds of millions using Dove, hundreds of millions buying our tea. So the small act of buying sustainable tea, of fighting for the right laborers attendance on the tea plantations, of standing for women equality with your purchases next to other things that consumers do like voting and all the other thing, but it's your purchases is a tremendously powerful tool.
Carol Cone:
Again, numbers, they grew. Your purpose brands at Unilever grew what? 69% faster than your other brands and they provided 75% of the total turnover?
Paul Polman:
Yeah, at least twice as fast in growth and significantly more profitable is definitely the case. That's not surprising. They are better connected to society, better understand the needs out there, and probably people running it that are a little bit more responsible. So add all of that up, it has to translate into better results.
Carol Cone:
That's superb. So we have only a few more minutes, but I want to ask you if you meet, and you meet lots of CEOs who are beginning to read, they're beginning to pivot, what are the three most important things you would say to them to really get them on the journey in an authentic way?
Paul Polman:
Well, that is an easy one in a sense because the first thing I would tell these CEOs is this is an enormous economic opportunity, don't miss it. The train has left the station if you want to and you're either on it or you're already on the way to the graveyard of dinosaurs. So that's the most important thing.
The second thing I would say to the CEOs, it starts with your personal journey. The fish rots from the head. If the CEO is not fully behind it, if you don't believe in it, then frankly, step down from your job because it's too much of a responsibility given to you. Viktor Frankl said as well in his book Search for Meaning when they built the Statue of Liberty on the East Coast of the United States, they also built the Statue of Responsibility.
Carol Cone:
I love that. I love that comment, yes.
Paul Polman:
Absolutely a key thing. So that is the second thing that it is your own transformation. Then thirdly is the incredible power of partnerships. You don't have to take all the problems of the world on your own shoulders, but forge these broader partnerships to drive these more disruptive changes that the world needs right now. Help derisk your own processes by doing so and help derisk a very difficult and gridlock political process as well. So it's about opportunity, it's about your own leadership, and it's about transformative partnerships.
Carol Cone:
In closing, how would you like to talk about net positive? So what would you like to just share as a parting comment with them since this has been a wonderful conversation?
Paul Polman:
Perhaps two messages, Carol, if I may. The first one is that the people that probably listen to this are very fortunate like I've been. I had food so I wasn't stunted. I had a toilet at home. I didn't have to do it with open defecation. I had a piece of bar soap so I didn't die before the age of five like four million children in the world. I was fortunate enough to be born in the Netherlands where I got free education. My father worked in a factory. We had six children at home. I frankly wouldn't have had a chance.
At the end of the day and the older I get I realized that I won the lottery ticket of life. I didn't do anything for that. There's only about 5% of the people mainly [inaudible 00:54:47] listeners that won the lottery ticket of life, that are independent, that are financially safe, that can do what they want.
So if you won the lottery ticket of life, I would say it's your duty, it's your obligation to put yourself to the service of others. We cannot live in an increasingly on smaller and smaller islands of prosperity when we literally have a growing ocean of poverty.
The second message I have is that is one of hope. People often ask, "Are you optimistic or pessimistic?" My best answer is I'm a prisoner of hope. We always underestimate technology and how fast it goes. We can solve 90% of the problems for the next decade already know. After all, we also know how to build houses, toilets or how to produce a piece of bar soap. So many of these issues we have the solutions. So technology always is underestimated.
The second thing is the cost of action and inaction I talked about. This is really an enormous opportunity.
The third one, there's an enormous grand swell of young people. They want to be part of this solution to create this better, more inclusive wealth. They want to be invited at the table. My point is increasingly give them the table.
So moment is now to join the net positive movement. It is a challenge to do that's why we need these courageous leaders. Hopefully, the book helps you to some extent not only get that courage but very practical because that's how we are very practically, gives you some ideas on how to implement that into your company.
Carol Cone:
I think it's a wonderful conclusion to an amazing conversation with Paul Polman. Net positive is a movement. Your contribution to that movement is extraordinary. I know that all of our listeners will be so thankful. I want to thank you, Paul, for joining the show.
Paul Polman:
Well, you're too kind. Likewise.
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