EUROPEAN CEO l SPECIAL REPORT
Is there a danger that this strategy will
undermine the strength of its popular brands, many
of them household names, by placing them in a
sterile corporate context? In an age of mistrust,
he argues, customers can place their trust in a
recognised name such as Unilever. “There’s a
massive need for the people to scrutinise the
provenance of where stuff comes from. People
say: ‘I want to understand the business behind
the brand, because in the past that trust has been
abused.” Besides, the consumer is only half of the
story: the new campaign serves as a rallying call for
those who work for the company. “I’m proud of my
people, I’m proud of our products. Why wouldn’t I
be proud of our brand?”
Moreover, there was a corporate culture
to address, something that the two buildings
symbolised, one home to the UK company, the
other a global head office.
Patrick Cescau, the former Chief Executive,
revamped the global company, once a sprawling
Anglo-Dutch conglomerate. He instigated the One
Unilever programme in 2005, and was the first chief
executive of the group after decades of parallel
management in Rotterdam and London.
But it was in Britain – Unilever’s second-largest
market, after the United States – where much of
the heavy lifting had to be done and it has fallen
upon Lewis, the 44-year-old Chairman of Unilever in
Britain and Ireland, to do it. When he was appointed
in 2007, he decided to restructure the British
business, starting from scratch.
“When I joined Unilever in the 1980s, we had
twenty-something businesses – nobody can tell
me exactly,” he said. By the time he became UK
Chairman, the business was broken into food, home
and personal care divisions and individual brands
had a great deal of autonomy. Lewis reeled off a list
of problems that the company faced.
“We weren’t cost-competitive. Our customers
– retailers – didn’t respect the way we engaged with
them. Staff talked about Unilever as ‘they’ – in the
third person. I didn’t get that. And they didn’t talk
about the shareholder. There wasn’t any respect for
the customer. The people, while great individuals,
weren’t engaging with the parent company they
were part of.”
He was spurred on by fear that, in the heady
days of the private equity buyout boom, when
everything, it seemed, was up for sale, money no
object, price no problem, Unilever UK could be
a target for venture capitalists. This became an
incentive to cut costs. “The painful bit was saying
we were too expensive,” he said. Every single cost
94 l Business and Management: Business Management
in the business was scrutinised. “We set out to be
the lowest-cost [consumer goods] player in the UK.
“We cut 40 percent of our costs in 12 months.
That whole exercise was done when we walked
through the doors here in November.” Forty percent
of head office staff were shed. The company’s new
mission statement appears to be Lewis distilled
to his competitive, marathon-running core. “We’re
Unilever and we win because we care,” he said.
This may seem combative language for a purveyor
of shampoos, spreads and snacks, but don’t be
fooled. As Lewis put it: “We want care with an
edge.”
Unilever UK is not cutting back its marketing
spending at the moment, despite the downturn, but
he said that it was too early to say how much will be
spent. At a group level, Unilever has lagged behind
Reckitt Benckiser, the makers of Vanish, which is
seen as a trail-blazer in the industry.
“The fact is, there’s media deflation,” Lewis
said. “The money that you do put in goes further, so
we’ve increased our share of voice. We increased
our marketing pressure as other people have
stepped back.”
Nor does he feel threatened by the own-label
drive of supermarkets such as Sainsbury’s. “There
is and will continue to be a tension between our
customers and branded suppliers, but it is healthy.
Did it put noses out of joint? Yes. Did it put ours out
of joint? No.”
In explaining the subtly shifting dynamics of
consumer spending habits, he darts off around
the mock supermarket aisles in his office for the
umpteenth time.
Among his biggest challenges will be whether
his staff, possibly worn-out by a decade of transition
at Unilever, feel able to keep up.
But with the appointment of Paul Polman as
Chief Executive of Unilever last year – whisper it, a
former arch-rival from Procter & Gamble (P&G) – it
seems likely that that there is more change to come.
The UK chairman describes Polman, now one of his
bosses, as a ‘powerful guy’. In addition, Polman,
a keen runner like Lewis, has engaged in plenty of
banter about their previous stints in Latin America.
“It’s a pretty well-published fact that P&G lost
their shirt in Latin America. They spent a lot of
money and lost share. He called me a not very nice
name and said: ‘Oh, you’re the guy who did that.’”
The signs are that Polman, a forceful character,
is unlikely to confine himself to the blueprint set by
his predecessor. It remains to be seen what plans
he has for the house that Dave built.
© The Times, London
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