Unilever is one of the world's largest companies, with 150 million customers in 150 countries. But when Patrick Cescau became group CEO in 2005, it was clear Unilever was not a healthy animal. A slimming-down exercise had already removed £4bn in costs and reduced 1,600 brands to 400, yet growth had stalled and market share in some key sectors was falling.
But the organisation's federal set-up made introducing change across Unilever almost impossible. Take the Indonesia leadership team: running a £600m business with 5,000 employees and managing dozens of brands across a bewildering portfolio of categories, it reported into a complex matrix of regions, categories and functions. Complexity had led to ambiguity, duplication and wasted effort.
In a four-week global survey of stakeholders, Quest found no common approach or terminology. Much disconnected work went into separate planning processes and numerous reports. The consulting firm proposed a 'Strategy Into Action' programme to rally staff around one process and terminology, one timetable, one mission and plan per leadership team, with one set of leadership standards and 'must-win battles' for each one.
Quest ran a workshop for the Unilever executive board to help it write a one-page plan. Each member then took their own leadership teams through a workshop process in which they devised their own 'Strategy Into Action' plan. Each plan was brought back to the executive to be critiqued.
As the project involved hundreds of leadership teams and tens of thousands of managers, Quest trained and coached a team of process leaders and champions. Within six months, all the leadership teams had committed to 'One Unilever' and to one mission, one strategy, one set of goals and metrics and one process for deploying the strategy.
The new Unilever strategy has had an early impact. Sales growth, targeted for 3%-5% by 2010, had hit 3.9% by the middle of 2006, compared to 0.4% in 2004. Operating margin at 14.4% is already close to the target of 15% set for 2010. Net profit has increased by 22% since 2004 and loss of market share has been halted. 'For the first time ever,' Patrick Cescau recently told MT, 'Unilever's fleet is at last coming under central control.'
Quest cut through the confusion of Unilever's diffuse global management structure to bring unity of purpose. Profits are up 22% since '04 and margins near to the 15% target for 2010.
- Form a rapid understanding of the current state and devise an overall plan.
- Define one mission, one strategy, one set of 'must-win battles' and metrics, and one process to deploy the strategy.
- Use the plan as the agenda for all meetings, reviews, webcasts, newsletters and so on.
- Encourage early transfer of capability to enable line managers and internal champions to deploy the strategy without further consultant input.
Sponsored by: Atos Consulting.