Net Positive AND Thriving
AND is the Future podcast - Episode 9
Building and Net Positive company, finding your purpose, and empathetic leadership
Is the world better off because your business is in it? Paul Polman, one of the top leaders advocating for sustainable businesses, speaks with Ilham about what it takes to build a Net Positive company; how leaders can unlock a company’s soul; why empathetic leadership is the key to success; the power of partnerships; the importance of diversity, equity and inclusion, and so much more.
1:22 - Background and passion for sustainable business
5:10 - How to be a Net Positive company
8:42 - Purpose: unlocking a company’s soul
13:36 - Power of partnerships
19:07 - Empathetic leadership
25:30 - Leaving a better world for the next generation
27:32 - What can business learn from the arts?
Meet Paul Polman
Paul Polman is the former CEO of Unilever and one of the foremost leaders in the effort to create sustainable and profitable businesses. While at Unilever he increased his shareholders' returns by 300% while ensuring the company ranked #1 in the world for sustainability for eleven years running. He now runs an organization called Imagine, which advocates for businesses becoming a true force for good. Paul is also the author of Net Positive How Courageous Companies Thrive by Giving More Than They Take.
Ilham Kadri: Hello everyone. Today I’m thrilled. I’m thrilled. I’m happy. I’m excited to be speaking with my good friend, Paul Polman.
He has been, all along my career, a role model, and you will understand why. So Paul is the former CEO of Unilever, and one of the foremost leaders in the effort to create sustainable and profitable businesses. He now runs an organization called Imagine - what a beautiful name - which advocates for businesses becoming a true force for good.
Paul is also the author of Net Positive. It’s fabulous and explains how courageous companies thrive by giving more than they take. So, Paul, thank you so much for joining us today.
Paul Polman: Thank you, Ilham and great to see you.
Background and passion for sustainable business
Ilham Kadri: You have such an incredible leadership story, and I’m sure many people in the audience know it already. So, born in the Netherlands, not far from here from Belgium, to a Catholic family. You once thought you would become a priest, but you changed course and went on to have an amazing career. Eventually becoming what you call an “accidental CEO” through it all. You’ve been one of the top voices, inspiring voices for many of the younger generation of CEOs like me in the business world, calling for board leadership and sustainability. Tell me Paul, what was there a specific moment in your life that truly made you passionate about this new kind of leadership? And do you think that your youthful desire to be a Catholic priest shapes the kind of leader you would later become.
Paul Polman: Well, I don’t regret not pursuing that direction, but I was born not long after World War II and my parents both were deprived of education. And I always thought it was a long time ago since World War II when I was born. But the older I get, the more I realize how close it was. So you know, all that counted for them was to give us the education that they were deprived of to have peace in Europe to make their communities work. So I think we grew up with some values of dignity and respect for everybody, equity, a certain level of compassion that have served me well throughout my career.
But really the issues of the environmental and social side, what you call in the ESG really came to the foreground more or less in the nineties when we had the first Rio conference in 1992. And then I participated in Rio plus 20, which was in 2012. And in Rio plus 20, we actually decided to continue the sequel of the Millennium development goals.
If you remember, we started in the year 2000 Millennium development goals, half the number of people in poverty in the world at that time defined as $1 25 a day, we achieved that. Then people said we need to finish the job And out of that came the sustainable development goals. And I was very lucky in a sense to be asked by then secretary general Ban Ki-moon to be part of the high level panel representing the private sector to develop these sustainable development goals.
So we worked on it for two years with business, civil society, governments. I saw the power of these partnerships. And out of that came these sustainable development goals to irreversibly eradicate poverty and do that in a more sustainable and equitable way. Or as some people simply call it to not leave anybody behind.
And this is the moment that I really started to implement that in Unilever’s business model, because I simply saw it as a great opportunity. It was very clear to me that the planet has planetary boundaries. We can’t have infinite growth on the finite planet. We were hitting already at that time some of these planetary boundaries, the issues of climate change were fairly obvious even then, but we hadn’t really succeeded in translating that into a good business plan. Most people, if I do something good, it must cost me more. Or if I tackle climate change, it must go at the expense of the success or the growth of my company. And bit by bit, I think we’ve overcome that with technology, with examples, with this creativity, with innovation and, and now it’s probably the growth story of the century that we’re sitting on. Most businesses understand the direction we need to take, but we’re simply not going at the speed and scale that is needed. So that’s what I’m entirely focused on.
How to be a Net Positive company
Ilham Kadri: Yeah. And, and I do remember Paul watching you, you know, as, as an executive and, an employee in other lives, right. That you really hold the torch of that sustainability inside Unilever, right. And, you are always advocating what I, you know, really push you today as: Sustainability is not against profitability. And you recently published an excellent book here, which I have right here with me called Net Positive. In the book, you and your co-author, Andrew Winston, talk about how companies can thrive by giving more than they take. And, and I found it’s a really interesting concept because it’s very easy to. It put the things in a simple manner, how to give more than what you take from mother nature, from our planet. Can you explain more about the book for our listeners? What exactly does it mean to be a Net Positive company?
Paul Polman: Yeahit’s proving to be very useful and. We’re in the third print already, but I never was intending to write a book. I always felt that the CEOs, when they retire writing books and they’re mainly, he’s still, unfortunately, more to strike their ego or change history. And you know, that was not appealing to me. But the more I thought about it, I said, well, as I did it, it’s probably good to change the mindset or create a movement to reframe what good looks like.
And so I asked Andrew Winston, who I admired and, and I wanted a US perspective. But the essence it’s really this, Ilham. If you take the world as 4.6 billion years old, and you put it on the scale of 46 years, human beings have only been around for four hours. The industrial revolution started one minute ago. And in that one minute, we’ve cut down half the world’s forests. World Overshoot Day, which is the day that we use more resources than the planet can replenish this year is July 28th. I would argue that after the day, each day after we’re actually stealing from future generations, we’re living well above the planetary boundaries limits and our linear extractive production model just doesn’t work anymore. It’s designed for perhaps 3 billion people on this planet, but 8 billion people being four times wealthier if you want to, since World War II than before is just putting too much pressure. And that is what we’re seeing now in things like climate change. But also in things like equity or a broken food system, there are many more symptoms that are coming to life now. So the book is very simple. Most companies are in the CSR mode. You saw that in Glasgow, at the COP 26, you saw it in most of their sustainability reports. There’s nothing wrong with that, but in essence CSR is about less plastics in the ocean, less carbon emission, less deforestation in the supply. A little bit better human rights, but it is all about being less bad.
But what we’re trying to say is this book is less bad is simply not good enough. If I used to murder 10 people and now I only murder five people. I’m not a better murderer. So people say I get this, so I want to be net zero. So all of them, we see net zero commitments, which is basically a no harm principle, being sustainable, but sustain means maintain. The change we need is in the mindset is to think regenerative restorative reparative. And that is what we call net positive. It’s a very simple follow up question. Is the world better off, yes or no?
Purpose: unlocking a company’s soul
Ilham Kadri: So we are so happy Paul, that you decided to write a book and, and one of my favorite chapters in the book is the one on unlocking a company’s soul. I think we think a lot with our mind. But bringing the heart and the soul and discovering the company’s purpose. I think I’ve stolen a lot from you as a new CEO. And in the book you write and I’m reading it, “there is nothing more powerful for an organization than getting into the heart of why it exists and then making that purpose come alive.” And it’s so important that that’s exactly why we immediately engage in our own purpose exercise. When I joined Solvay even for a company who, who is 160 years old, we did that. So can you tell us more about the journey you took in your career to find Unilever’s purpose? Did you run into challenges, skepticism, and if so, how did you deal with this and what companies out there do you think are really living such a purpose and how you can link it to the net positive?
Paul Polman: Yeah, I’m glad you’re asking this because that’s probably the most important, you know, thing is to have a strong purpose, but not only having that purpose, but the difficult thing is actually making it come alive, which is a question of having the right values and the right behaviors. So you get it embedded in your culture and that’s probably the most difficult thing. I personally think that you cannot be a sustainable company if you’re not sustainable yourself and you cannot be a purpose driven company if you’re not purposeful yourself. So it starts with yourself, So you are embedding it as a driver of your business, and this is really what purpose should be doing when times are so uncertain, and volatile environments, when people have so much anxiety about what is going to happen, purpose provides that true north. I like to Bill George’s book, which was called True North, which talks about that beacon, that strong inner core.
If you have that strong inner core, you actually become more courageous. The road to change is full of skeptics and cynics, but if you have that strong purpose, it keeps you going. And it’s tremendously powerful as I’ll tell you in a minute at Unilever, what we did is probably not different when you did, when you went back to Ernest Solvay is to really look at the history of the company when Lord Lever started Unilever at the end of the 19th century, his purpose was to make hygiene commonplace. One out of two babies in Victorian Britain didn’t make it past year one either because of the issues of hygiene. So he invented the bar soap. He built the housing for his workers before the factories were up and running, guaranteeing six day work weeks before anybody else introduced pensions in a sense, the man was ahead of his time. In fact, when he even went to the house of Lords, he took the name of his wife. That hasn’t happened since, we’re living in 2022. Jim Collins, when he wrote the book From Good to Great, he had something in there that said the core before you stimulate progress, though, out of that came our purpose, which was making sustainable living commonplace. We actually spent a whole year with our top 500 executives discovering their purpose and how to use their purpose to positively influence others and ultimately how to get results that training has now been extended to nearly all employees in Unilever and still gets the highest scores. And out of that, I think at the end of the day came courage; courage to take responsibility of our total impact in the world. Not only scope one and two. There’s still too many companies that think they can outsource their value chain and also outsource their responsibilities. It just doesn’t work anymore.
And frankly, where you cannot achieve them alone, where you don’t have the answers on how to do this, then it requires partnership. And that is courage as well. Because when you work with other people, you are not totally in charge. You might hear the inconvenient truths. You have to understand what real needs are of others to get plans out there that really deal with the interest of all of your stakeholders. So purpose unlocks that and what we found in Unilever, that when we made this purpose come alive, not only did we see the trust go up in the company, More people willing to work with us in partnerships with opened opportunities. But more importantly, we saw our employee engagement go through the roof and we became in most of the markets we operated in, if not all, the preferred employer. We started to be the third, most looked up company on LinkedIn, 2 million people applying every year. So this whole notion of purpose, I think, is incredibly powerful. Companies that are more purpose driven that are operating under these longer term multi-stakeholder formats put sustainability right at the core of their strategy. So it really pays. And in the case of Unilever, that certainly was the case.
Power of partnerships
Ilham Kadri: Absolutely. And I think you became an icon for all of us and Twain used to say the most important days in your life is the day you are born and, and the day, you know why, and I think you are getting us at the individual level leadership level company level to really rethink that purpose. And frankly, again, you’ve been inspiring me throughout my career. So you talk about courage, having a vision, embarking your employees, and you said also Paul, that we can’t do it alone. And you have a lot of interesting things to say about partnerships in your book and what are the best kind of partnership. Can you explain more? How would you say partnership drive the changes we need to do?
Paul Polman: So we have two chapters in the book. That’s how important we think it is. One plus one is 11, which is basically partnerships in your own value chain or at industry level. And then we have another one that says it takes three, to tango, which is really partnerships with civil society and governments to drive the broader systems changes.
What is currently happening is that most companies, most CEOs, try to do the right thing. There are no CEOs who want more unemployment or air pollution or people going to bed hungry, but collectively we don’t seem to achieve these objectives and it is because we are optimizing within a system that isn’t designed to deliver anymore.
So without any doubt, you need to work in your partnership to get your suppliers and your customers aligned on your purpose, on your vision. Most companies make carbon commitments on not only scope one and two, but increasingly on scope three, well, scope three for some is scope one or two for others.
So this broader partnership in the value chain is important. And we see increasingly companies moving in that direction very clearly during COVID. Companies that had better relationships with their suppliers or their customers were more resilient. They did better during the crisis. When there were supply chain problems, the people worked harder together to solve them where the relationships were very transactional and only cost driven, there was no emotional love if you want or good will in the bank account to really go the extra mile. So it really works in that sense. In Unilever, we put programs in place like partner to win or with Solvay was obviously a big partner. We put capabilities in place for our small and medium size enterprises. And we had the responsible sourcing code as we called it where we helped suppliers get through three levels, ultimate level being really deep partnerships aligned on the values and it served them well, all the suppliers actually were happy to be part of that, but you can only do, as I said so much. With the global consumer goods industry, which we created as major retailers and manufacturers, we made some commitments on, on plastics in the oceans or on deforestation or on human rights in the value chain. But ultimately you need the broader partnerships with governments and civil society to truly put the right frameworks or policies in place to ensure that everybody moves, to ensure that there’s a level playing field, and to ensure that you go at scale so that the economics don’t start to work against you. So the first five years was Unilever, bring our own housing order, gain trust, get a seat at the table. But the second five years I used the size and scale of the organization to drive more transformative partnerships. That’s the typical partnership of one plus one is 11. Nobody can do it alone, but together you are actually doing a miracle.
I actually created Imagine after I left Unilever very briefly for that same reason, because I understood that all the CEOs are very busy. There’s a lot of challenges that you have on your plates and it’s difficult to create these coalitions, because sometimes there’s competitive pressure, their lack of resources or knowledge and it’s even more difficult to work with governments. So what we now do is as Imagine: we look at industries that have the most devastating effects on the sustainable development goals, which is obviously the energy transition, food, tourist and travel. And how can we get a critical mass of CEOs together across the value chain to work together on things that no company can do alone. So we’re moving to get out of single use plastics, joint buying of green energy, moving to regenerative agriculture. So we find that if these CEOs come together, they become more courageous, but then we can also solve across the value chain, some of these bottlenecks and what BCG Boston consulting has actually showed in some of the work that you have seen at the IBC, the international business council at the wealth economic forum that if you actually are able to transform all of these value chains to sustainable value chains, it’s probably nine to 16% cheaper than if you continue to work on these unsustainable value chains that cause a lot of disruptions and frankly create the issues that come back to us directly or indirectly in our business models.
Ilham Kadri: It’s about mindset change. It’s about leadership. And I also really loved your chapter on leadership and your discussion of how important empathy and vulnerability and humility are in great leaders, right. While in the old days, IQ power, experience and vision were good enough. So can you elaborate on what it takes to be that leader for the future? Are you seeing more and more of these empathic leaders emerging? Uh, who do you particularly admire as a leader, Paul.
Paul Polman: You are a great example of that. And I think the company should be proud to have you and we’re certainly proud to have you as part of the B team. And that is proving to be very productive. And we can talk about that later, but there is no doubt that I want to start with that ultimately companies need to make a profit. I always say profit is like white blood cells in your body. You need white blood cells to live, but you don’t live for white blood cells alone.So in fact, nobody lives for white blood cells. It’s the same with profit. You need profits to exist, but you don’t live for profit in itself it doesn’t mean anything. So that’s where purpose comes in. And leaders understand that. But I want to start with the performance part, and this is also what gets to your AND part. If there is no performance in a company, then ultimately you won’t succeed. We’ve seen some companies being very progressive on sustainability, trying to be number one on anything to win, but then if the performance isn’t there, you actually do more damage to the changes that we need.
So the first thing I always say that you need is definitely the same skills that every leader has had: high level of ethics, hard work intelligence you know, know how to run a business by investing with discipline in the things that matter. If you make the wrong acquisitions or you don’t invest in innovation and anything we talk will not matter.
I actually have a very broad definition of leadership, which is anybody who touches someone else positively. So we are all leaders, all of us listening. And the first thing we need to do is take care of ourselves. We cannot be sustainable leaders. If we're not sustainable ourselves, I am guided a little bit by a very simple pyramid, which starts with physical fitness. It's important that we are physically fit a bigger lung capacity gets you more oxygen. Your brain uses 25% of your oxygen. It just works better. You're less tired. You're more alert. And that's one of the things I think that increases your chances of success. For that reason. In Unilever, we said if we have a hundred people or more in the company, we have a gym, we had these lamplighter programs as we called it on changing dietary habits, nutritional habits, et cetera.
Then next to the physical fitness, you get the emotional fitness. If you go to bed and sleep enough, which is very important, you'll be less irritated. I've had many times overnight flights. I slept badly. And then you go right away into meetings. You really have to watch your temper or not give the wrong signals.
Emotional fitness is very important. Then you get to the mental fitness, your ability to take time out, to pause, to get new oxygen in, to read books, to meet friends. When some people say I'm working day and night for Unilever or for Solvay, it's not healthy, you do need to do other things to get other ideas in.
And then last one, not least the last part of the pyramid is spiritual, or some people might call it purpose. I was always very fortunate to have a strong values driven and purpose driven organization. So that's the ultimate part of the pyramid. So take care of that health at all these dimensions, and you'll be a much more resilient leader. You'll also be a better friend or family member, and that's important to all of us.
So, but on top of that, your chances of success are so much higher if you are a long term, multi-stakeholder purpose driven company. There’s no question about it. It just opens so many more doors of possibilities and the same bi vocation that we’ve seen in business where the shorter term shareholder focus, business models are not doing so well. And the longer term multi-stakeholder business are doing better. During COVID the leaders that excelled where in fact, the leaders that showed this high level of humanity, humility, compassion, if you want to, or empathy that had a strong purpose, understood the power of partnership, were willing to think intergenerational were systemic thinkers to be able to take that complexity that is out there and distill it to some simple steps and move forward.
Why? Because these leaders instilled in a very uncertain time with many pressures on everybody, instilled the level of trust. The reality is as we’ve seen with COVID the countries that did better during COVID had leaders also that had a higher level of trust: Iceland, Norway, Finland, Denmark, New Zealand, and interestingly, they were all run by women. So not to flatter you, but I think that many of these skills that are needed is more given to the female race than the male race. And we have to work harder to get there.
One of the things I did when I came to Unilever, I came in from the outside, like you did, but to sometimes an advantage, but also a little bit more of a challenge. I had a very diverse board of six white Dutch males and six white British males. Could they disagree? But to me, the definition of diversity was quite different. So I insisted when I came that we would get a fully gender diverse board. We had three black Afro-America, two from Africa, one from the US, we had two Chinese, we had wonderful people. And I think it is that board that we put together that helped us, I think, give us confidence in what we were doing or strengths in our responsible business models. And it very much gave me probably myself, also a different style of leadership than I might have otherwise had.
Leaving a better world for the next generation
Ilham Kadri: Absolutely. And I think you, you say it frankly, when I looked back at my career like you, Paul, I’m obviously very proud and, you know, happy to look at many legacies, but at the same time, I’m always, dissatisfied and unhappy with the DEI I’m leaving behind because it’s complicated, right to really run in a mandate and drive it. And here at Solvay and, I think this is the first time I’m doing it in my career this way, is we are positioning it, not around the stats of the diversity, but rather bringing inclusion and, and equality in the heart of, of what we do. That’s what we do. And diversity is what you see. So being a net positive company to come back to the book is about being environmentally sustainable, of course. But as you say, it’s also about addressing equity and inequality is something very close to my heart and your heart and, I know, or indeed equity, inclusion, and diversity with the same level of urgency. I know your children and grandchildren are very important to you. What kind of world do you hope we will leave behind for them? And what type of grandpa are you, Paul?
Paul Polman: Well, I don’t know if I’m definitely a grandpa that spoils them and my children now are mad at me because I can hand them over again to them after I spoil them but I’m tremendously proud. I have three boys and they’re happily married, one to someone from Spain, one to someone from Singapore and one to someone from New Jersey. So my house is the United Nations. I have wonderful grandchildren, three boys and three girls. And we’re obviously mighty proud of them.
And I fortunately have a farm outside of London. So every weekend, if I can and I’m here, we get together and we like the outdoors. We ensure that they don’t get drug to their computers or strange things and talk to other people that you don’t have the control on. It's fun to have them. And it’s also fun to hand them back to their parents when you want some time for yourself.
What can business learn from the arts?
Ilham Kadri: And this is universal by the way. So talking about going back to nature and getting back to the human side. I know that your life includes a lot of music as your wife is an accomplished cello player. I know my son is a violinist. Are you a great music lover too, do you play? Do you listen to music only? Do you do both?
Paul Polman: You know, I never confess that, but when I was dating her at university, I didn’t have any money and so we were ushering at music hall. And to get free to the concerts. And I just went because I loved her, but I hated classical music. I was one of these really you know, wild young people in the sixties and seventies. And so I had to pretend that I liked classical music and the more I -we’ve been married for 44 years now, and she has two trios and, and plays in the symphony - and over the years I’ve actually come to love classical music. Yeah. And she plays the cello, which is a beautiful instrument. It’s beautiful. I’m very blessed but she has a broader perspective. I think she brings me to other forms of art. Yesterday, we were in a theater. She brings me to different people already early on in my career that gave me a wider vision and better understanding of diversity. And, and now we both run some of our foundations and one of ours is still in the arts because a lot of the liberal arts has been cut out, music has been cut out and many of these things that we really need to produce the right leaders if anything, in this world, the arts and music plays in a very important role. To create, I think, holistic leaders that we need for the future.
Ilham Kadri: Absolutely. And we should be inspired by other, you know, spaces like art and music. Well, thank you so much for joining me, Paul. I think I enjoy it personally because I know a lot about you. I followed you. You were an inspiration. Your leadership is such an inspiration for us all as we strive to achieve the power of the AND the A-N-D, which is our future. And we can do both and make our businesses both sustainable and profitable, bold and empathic. So thank you for a fascinating discussion
Paul Polman: Likewise.