Polman reshuffles Unilever’s cabinet

High-profile exits often follow the arrival of an outsider at the top – and Unilever is proving no exception to the trend

The imminent delisting of two household names (household, at least, within the marketing community) from Unilever’s senior management is a forceful reminder that the multinational’s new chief executive, Paul Polman, is no respecter of tradition, however hallowed.

The widely revered chief marketing officer, Simon Clift, is leaving next month. And only last week it was announced that even more highly placed Vindi Banga, global president of food, home and personal care – and one of the group’s nine-strong executive board to boot – will be following in Clift’s footsteps.

Whatever is going on? Any hypothesis that Polman is sidelining anyone on the home team who doesn’t agree with him and his policies should be treated with care. The departures of Clift and Banga may be more of a coincidence than their close timing suggests. Or are they?
Banga, who has been a Unilever executive for 33 years, was one of four credible internal candidates lined up to replace Patrick Cescau,

Unilever’s most dynamic chief executive in recent years, in mid-2008. The others were Jim Laurence, chief financial officer, Mike Polk, president of the Americas division, and Harish Manwani, president of Asia (and Africa/Eastern Europe as well). Then an extraordinary and unprecedented thing happened. The board went for an outsider instead.

And what an outsider. The then 52-year-old Dutchman Paul Polman hailed most recently from Nesté, where he had been chief financial officer and latterly head of operations in the Americas, but more chillingly for those inside Unilever he had spent the vast majority of his career at arch-rival Procter & Gamble where, to say the least, they do things differently. For all that Unilever chairman Michael Treschow emphasised the “one-off” nature of the appointment and played down suggestions that Polman would “revolutionise” or “change the direction” of Unilever after nearly a decade of turmoil culminating in the successful implementation of the One Unilever agenda, no one really believed him. Not the City, which read boardroom level dissatisfaction and the need for accelerated change into the move, and not the people who had been snubbed at Unilever either.

In such circumstances, it is not unusual for overlooked candidates to head rapidly for the corporate exit. Polman himself was a prime example of the genre, having narrowly lost out to Paul Bulcke in the contest for the group chief executive role at Nestlé. Jim Laurence – one of the aforementioned four internal candidates – has already run true to form and quit. And even before Polman’s installation at Unilever in January 2009,

Banga himself was said to be looking for a chief executive opening in his native India. So it would be no great surprise if he has now found one to his liking (all will be revealed in the next month or so, apparently).

The case of Clift is more enigmatic. He was no contender for the throne, but had done rather well out of the One Unilever restructure with a global CMO role, just sub-board level, that encompassed innovation, research, recruitment, training and responsibility for marketing services. Polman – not unexpectedly given his 27-year P&G background – has proved an enthusiastic advocate of marketing. He has moved the company from a bottom-line strategy, primarily targeting improved margins, to a top-line one involving volume growth. In the process, he’s speeded up product innovation – for example, by taking Dove into deodorants and men’s shower gels and launching Lipton pyramid bags into 56 markets. And, despite the recession, he’s also underwritten an increased marketing spend, especially on digital media.

For all that Unilever chairman Michael Treschow played down suggestions that chief executive Paul Polman would “change the direction” of Unilever, no one really believed him.

What’s more, the strategy is perceived to be working. Annual financial results out last month revealed a company that had moved from contraction in the first quarter to a 5% increase in sales volume by the end of the period.

The question vexing City analysts – and some Unilever insiders, one of whom may well have been Clift – is how sustainable this strategy is in the longer run. Price-cutting and accelerated product development have their place in the P&G-bred recession rulebook, but how applicable are they to the core problem affecting Unilever’s future development? I mean its continuing poor performance in the European heartland – which has been masked by slightly easier wins in developing markets.

Clift’s tenure has been associated with clever conceptual campaigns – such as those behind Dove, Axe/Lynx and Persil (Dirt is Good) – which have proved remarkably effective at capturing the consumer’s imagination. But there is no doubt that they are high-risk and quite different in their nature to “the moment of truth” promotional accent of typical P&G marketing.

This is hardly to suggest that Polman is trying to recreate P&G from the top downwards at Unilever. Indeed, the evidence is to the contrary. The people in Polman’s new top team are all Unilever insiders. Mike Polk – one of the unsuccessful contenders for the throne – is to assume Banga’s responsibilities; Dave Lewis, executive vice-president for the UK and Ireland, is taking over where Polk leaves off in the Americas; Keith Weed, who once served in Lewis’ position, has been awarded Clift’s old role – but one enhanced with board-level responsibility and an added communications dimension; and Amanda Sourry, at Unilever for 25 years, will take over Lewis’ current duties.

Clearly, Polman does not want to rock the boat too much. With Clift, it may have been a case of too many cooks spoiling the broth – marketing being one area of expertise which Polman felt he absolutely had to stamp with his personal authority. Certainly, agencies have noticed a change of tone in the client dialogue since his arrival. It is less open and more action-oriented.

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