Introduction
Changing a company is a complex endeavor requiring a strong and confident leader. The case of the British company Unilever presents Paul Polman – a CEO who set out to radically transform the company’s vision. At the time of his appearance, Unilever was suffering from the loss of demand in developing markets and falling revenues. Polman decided to renew the company and double the business size and potential by committing to environmental sustainability and social responsibility. Although there were many obstacles on this journey towards the resolution of financial issues, Polman’s unique leadership style ensured his success in overcoming all difficulties.
Decision Evaluation
The benefits of Polman’s decision were evident in the proclaimed goals of the new USLP strategy – care for customers, concern for the environment, and investing in employees. The first advantage was that the new strategy would clearly prioritize consumers over shareholders, which is a big selling point. The second benefit was that the company would now take a more environmentally friendly approach to its production process, thus becoming more attractive to green investors. The third positive aspect was that the CEO was committing to the well-being of the people in Unilever’s supply chain, which is a substantial boost of motivation for employees. Although these characteristics showcase Polman as a responsible leader, his decisions also carry heavy risks.
The risks of Polman’s decision were the apparent dismissal of shareholders, the potential lack of resources, and the overly optimistic promise. The first issue was that the prioritization of consumers would inevitably alienate shareholders, which would result in them lifting their support. The second risk was that the declared goals demanded large investments, which would hamper the company’s performance in the short term, thus possibly betraying investor trust. The third disadvantage was that the promise of doubling revenue in the future created anxieties that it was not backed by any substantial abilities to do so, which also compromised the CEO’s credibility. In essence, it is surprising that Polman achieved success despite these substantial red flags.
Leadership Efficiency
Four aspects made Polman’s leadership styles effective – delegation, positive publicity, connectivity, and perseverance. First, Polman empowered the people responsible for corporate social responsibility, such as Keith Weed, by giving them more decision-making influence. Second, Polman was proactive in clarifying and informing the audience of his vision via interviews, talks, and meetings. Third, Polman was willing to engage with other like-minded people and communities, such as the UN Global Compact, which supported his decisions. Fourth, Polman was consistent in his initiatives in that he persevered despite obstacles, objections, and market downturns. As a result, Polman’s leadership style was generally effective in the implementation of the strategy.
There are three problems that could have offset Polman’s implementation of his strategy – disregard for stakeholders, shifting blame on external factors, and dismissal of criticism. First, while openly prioritizing consumers, Polman alienated many executives by cutting their salaries and limiting overseas travel, which is inconsiderate towards people who were already invested in the company. Second, Polman publicly blamed other factors, such as the greediness of hedge funds, instead of taking responsibility for shortfalls, such as falling share prices. Third, Polman exhibited stubbornness when faced with criticism regarding how realistic his expectations were. As a result, Polman valued success and personal convictions more than honesty, integrity, and openness.
Implementation Recommendations
Personally, I would assume a less optimistic but more honest approach to implementing the needed changes. First, I would not dismiss the people who have been with the company for a long time in such a blunt manner – I would explain the need for change and try to convince them. Second, I would be open about shortcomings when performance plummets – I would address investor concerns, take responsibility and not shift the blame. Third, I would actively encourage criticism and feedback, listen to it and acknowledge it. Combined together, these steps would make the implementation more honest, respectful and less manipulative.
I would use three leadership tactics that would allow me to ensure mutual understanding and nurture cooperation. First, I would use emotional intelligence to understand what shareholders feel when they think that the CEO intends to blindside their opinion and communicate with them in an empathetic manner. Second, I would use a cooperative leadership approach, which would involve all parties in discussion and participation. Third, if I had to cut the benefits or salaries of other people, I would first cut my own, thus showcasing that I care for their loss and can relate to them. Ultimately, the goal of all leadership tactics is to ensure that people believe in the leader instead of simply following his orders.
Conclusion
Altogether, it should be evident that Polman was a controversial leader who succeeded despite many red flags that indicated serious issues with his leadership style. He did manage to reinvent Unilever and enhance its corporate capabilities. Yet, his leadership style lacked true honesty and integrity and involved using manipulation to avoid blame. Nevertheless, the consistency, positive publicity, connectivity, and, surprisingly, stubbornness ensured success in the long-term perspective. Despite the ultimate payoff, there were numerous issues that could have offset Polman’s efforts. He could have accomplished the same results using a more honest and, respectful and accountable approach to corporate management.