Thirty Minute Mentors Podcast Transcript: Former Unilever CEO Paul Polman

I recently interviewed Paul Polman on my podcast, Thirty Minute Mentors. Here is a transcript of our interview:

Adam: Our guest today was the leader of one of the world's largest companies for decades. Paul Polman was the CEO of the global conglomerate Nestlé and is the author of the new book Net Positive: How Courageous Companies Thrive by Giving More than they Take. Paul, thank you for joining us.

Paul: Well, thank you, I'm looking forward to it.

Adam: You ran a company that was worth more than $175 billion. But growing up in the Netherlands, your career aspiration was to become a doctor, which didn't happen because medical school slots were determined by a lottery and your number wasn't called. You also consider joining the priesthood. What led you to pursue a corporate career and what were the key experiences and best lessons from your early days that shaped your worldview and your success?

Paul: You know, in the Netherlands, education is paid for by the government, which I'm very grateful for, otherwise, I probably wouldn't be talking to you right now. But the counterpart of that is that the government also decides how many dentists or how many doctors or, you know how many of these professions where they only need a few people, they actually will sponsor, which means that you really have to be lucky to get in. And unfortunately, that didn't happen to me. I grew up after World War Two, I thought it was a long time after World War Two, in 1956, when I was born, but the older I get more, I realize how close that wasn't, my parents were entirely focused on ensuring that there was peace in Europe that their communities worked and that their children could go to school, which was deprived from them in these crucial years. And really, you know, I'm very grateful that I got those values. So not surprising in a family of six as my brothers and sisters, and that's one of the things that I was privileged to have is if you did well, in school, in elementary school, you could be an altar boy. And that meant you could get out of school during the week if there were weddings or funerals. And I was often there as a result, and actually could see the pre students work and, and helping people there. And that was appealing to me. But unfortunately, the profession was a little bit of a dying profession and the school closed, then I decided to be a doctor was very appealing to me, I actually studied for that I even have thought if I would retire one day, I might become a doctor again. But clearly, I'm lacking the willpower and the courage to do that now. But then my father made it very clear to me, you know, I can't maintain you for the rest of your life, you have to find a living. And in the Netherlands and probably in the US as well either you study law or you study, in those days, economics. An MBA didn't exist. So I ended up studying economics. I did that, got my Bachelor's in three years time and wasn't really very motivated. And my father, you know, said why don't you go to the US. At that time, his company was bought up by Goodrich, a tire company in Akron, Ohio. And he had arranged for me to do an internship in Akron, Ohio. So he said, why don't, since you're not so motivated, why don't you go there and improve your English and work in the factory and see what it is and hopefully you see the light one day. And so I said, okay. I called but when I came to Cincinnati, where I had to fly in, I didn't really feel like working in a tire factory in Akron, Ohio. Not really, these were impulse decisions in those days. And it was very easy still to just get to the US and, and not no work permits needed or any of the other things. So I went around the universities there. I ended up at the University of Cincinnati and there was a very grateful professor or dean of the economics department. He said, you know, I know you don't have any money, you can show me your grades, you know, and yet you want to enroll. He said you need to do your TOEFL test; test of English as a foreign language and you need to start teaching Paul Samuelsson 101 and get straight A's in your first semester. And if you do all those things, I will pay your tuition and give you an assistantship. So that's what I did. And I ended up having an assistantship during my course. I was there. A few months later I met a finance professor, Professor Melnick, he asked me to work for him. So then I ended up doing my MA and MBA and met my wife at the university. So I had an extra incentive to stay. But it was basically by accident. And then if you're in Cincinnati, frankly, no, P&G is a stone's throw because I had to work on the weekends to earn my living. I worked in a building as a maintenance man that was occupied by P&G. Because I did the two degrees, I had night courses. And there were a lot of P&G are people that were in these night courses. So it was like a natural extension. And I was just incredibly lucky that when I walked into their building in downtown Cincinnati, that, you know, they put a premium on us MBAs, there was a low confidence in European students in those days. And I came in when someone was just asked to go back to Europe and recruit hungry young MBAs. And here I was, so they offered me a job on the spot. And I moved back to Europe and started my career at P&G. So I call it accidental, in that sense.

Adam: After that accident, you spent the next 27 years working for and climbing the corporate ladder at P&G, and another three as CFO of Nestlé before becoming the CEO of Unilever. What were the keys to rising within P&G and rising within your career? And what are your best tips for listeners on how they can rise within their careers?

Paul: Well, I've been very fortunate to work for three great companies, which were built to last. P&G started in 1837. Nestlé as a coincidence in 1857. And Unilever started his company at the end of the 19th century. And these companies are still around, and they're still in, you know, the Fortune 500 or better if you want to rank. So they're built to last. And I think lesson number one from that, and this is a little bit hindsight and post rationalization, so I don't want to be smarter, or look smarter than I am- but these companies have great values. And if you can work for a company that has great values that are aligned with your values, and you feel at home, you know, you can be yourself, you don't have to put a mask on. Many people now feel stressed, dissatisfied, or you know, but because they have to be someone else, when they go to work, then as if they've done if they would be at home with their families. And now you can only fake it so long. Being an actor or wearing a mask that doesn't work. So if you can marry that, that's you're very fortunate, if you can then find the sweet spot of what you're good at, what you like to do, and what the world needs is even more fortunate. I've always been lucky there and the doors were always open. I could always make my opinions be heard, I’ve always been accepted and can be myself and, you know, have an influence. So I always felt valued, I always knew that there were better things and if I will do my job and to some extent, sometimes keep my head down. And in those days, probably loyalty was a little bit more important as well as a factor in. But then in reality, if I look back, I never asked for a job, I never asked for a salary. And I've never been disappointed. I've just delivered and kept working on the things that I felt I could make a difference or influence people around me and, and make them better. So I don't know if there is other advice and do what you'd like to do. You know, there's a difference between passion, which is really satisfying your own needs, if you want to, and purpose, which is really putting yourself to the service of others. And over the years, I discovered that the more I put myself to the service of others and try to make them successful, that actually is the best strategy also for yourself to be successful. So just be yourself. I think the best leaders are first and foremost good human beings and are real people that care. So we have often these criteria and these companies that are based on numbers and performances that are narrowly defined, usually linked to the bottom line of a company or the success of the growth of the top line. At the end of the day, we need to celebrate these human values and know to be empathetic, have compassion, show emotions and care about other people. I've always felt over the years that if you're true to those and true to your values and who you are, you have a higher chance of being successful. But that's been my experience.

Adam: Paul, I love it. You shared so much there that I try to impart to the audiences that I speak to starting with when you're trying to figure out what to do with your life, you want to try to check three boxes; you want to do something that you love, you want to do something that you're good at, and you want to do something that helps make a positive difference in the lives of others, and you framed it, in almost those words, do something that you like to do, do something that you're good at, and do something that the world needs. You shared some of the most important characteristics of what makes great leaders great authenticity, being comfortable in your own skin, being in touch with yourself, being in touch with others. And along those lines, I wanted to ask you, if you could elaborate on that, in your view, and in your experience, what do you believe are the key characteristics of a great leader? And what can anyone do to become a better leader?

Paul: Well, that's a good question. And by the way, there is no level. There is not one level of leadership, I just want to put some boundaries around this, you know, if people ask me, who are the greatest leaders you admire the most and often people tend to gravitate with that question towards Nelson Mandela, or Martin Luther King or Mother Teresa, or, you know, some of the other great leaders that we've had in this world. But over the years, I've actually gravitated to other people, the more I traveled around, and obviously Unilever, over 60% of their business in the developing markets and the more I saw the people on the ground, you know, the doctors that went to West Africa, when there was ebola risking their own lives in the medical community. Now, when COVID started and the vaccines weren't available; my wife and I run a foundation for blind people in East Africa, called the Kilimanjaro Blind. We trust them, the people there that unselfishly work for the deaf or blind, deaf or blind kids, you know, those are the real heroes. And yes, it's heavily skewed towards women that are under-recognized. So actually, I get my strengths from those people and it is probably what we talked about, it's people that put themselves to the service of others. They're great listeners, they understand what's going on in the world or in their communities. And they put themselves entirely to the service of others in terms of addressing what needs to be addressed to make it better for everybody. So what does that boil down to? To get to your question, and just thinking about it a little bit is it, you know, they probably are leaders that have a high sense of purpose or duty or service. They take that responsibility themselves. And because of that strong sense of purpose, they don't kick the can down the road, they, you know, they say, okay, For example, governments aren't quite working, multilateralism isn't working. We can all blame the government and say, you know, we have a bunch of idiots there. And we're not moving forward on these major issues like climate change, or inequality. Or we can say, hey, I'm in a position to do something about it. I'm a CEO of a big company, or I run an institution like this, I'm fortunate enough for whatever reasons, unexplained to me to be in this position of influence. And I'm going to 100% use that. So that stronger sense of duty and purpose. I also think that COVID made that even more so. Let's put a magnifying glass on what good and bad leadership is, to be honest. And what you have seen is that people that showed this higher level of empathy or compassion or humanity or humility just have been better leaders and not surprising. It is a trust issue and a confidence issue that creates followers. You know, we've seen the countries that were run by women do better at dealing with COVID. In countries that were run by the populace, science actually became increasingly, you know, isolated and caused a lot of damage in that sense. I also think that because of that stronger sense of purpose, that stronger sense of duty, the real leaders have that courage, you know, to do things that probably go beyond even what they thought was possible. In business times, it means thinking, yep. You know, most businesses know that there is an issue of climate change, or that we are destroying the planetary boundaries, but they still set minimum targets to get away with, or only the things that are under their control, so at least they don't get attacked. So they play not to lose instead of playing to win knowing, knowing frankly, that by doing so, it will be grossly insufficient for us as what humanity needs. Real leaders have that, even if they don't know how to get there, they'll set the right targets, they'll ask for help, they go into partnerships, and, you know, show their own finer abilities. So these are the types of traits, I think, of the leaders, perhaps in a broader sense of what we need, now more so than what we might have been in need for in the past. And then some other basic traits will always exist, you know, it helps to be hardworking, it still does work, or have a certain level of intelligence or, you know, be a good communicator, and you know, these types of, you know, think strategically. These are the basic skills that I don't think will go away. But it's human skills, we are in great need of, you know? We need to move away from this Milton Friedman spreadsheet competitiveness and win/lose attitude and then distilling everything down to a few numbers on paper, to bringing humanity back to business. And that's probably the biggest need we have.

Adam: Paul, I agree with literally every word you said. And to reiterate some of these key characteristics that are so essential to great leadership, living in a world of facts, not being afraid to display vulnerability, having courage, not being afraid to make mistakes, being able to build trust, which stems from living and breathing, honesty and integrity, competence, effective communication skills, a word you used over and over and over again, purpose. And that ties to the answer you gave me when I asked you about your own journey to the top, which centered around working for companies that, in your view, had such strong values. And you recently wrote a book Net Positive, which talks about your philosophy as a leader, which, in some ways is grounded in a pretty contrarian view that it is in the best interest of businesses, not only in the best interest of society, but in the best interest of businesses to take the lead on fighting climate change on protecting the environment, and on combating inequality. Why?

Paul: Well, Adam, it is just, if you would be purely rational, the wealth Overshoot Day. This year it was July 29, which is actually the day that we use up more resources than the planet can replenish. So if you put it in different words, that means that after that date, we're actually stealing from future generations. That data has come forward every year, we are our consumption- this system of thinking that we can have infinite growth on a finite planet simply isn't possible. And anything you can’t do forever is by definition unsustainable. And it has led us now with another warning sign of, for example, the destruction of biodiversity, which has been enormous over the last five decades. We've lost 68% of mammals, reptiles, and birds, etc. A million species are at the point of being extinct as I talk to you right now. And I think we saw a lot of diseases that we are seeing SARS, Ebola, Zika, Asian flu, you know, and now obviously, a particularly nasty one, COVID, is a direct result of the way that we treat our planet Earth and our respect for it in terms of living in harmony with it, which we must. So business is starting to discover that we're at the point now, that the cost of not acting is significantly higher than the cost of acting. If you look at COVID. We've spent $18 trillion just in Europe and the US to save lives and livelihoods. The IMF estimates that we've lost $27 trillion in GDP over this decade. That's infinitely more or what it would cost us to attack some of these issues. So people are increasingly seeing that things like climate change, or that the destruction of our natural resources and habitats is directly affecting them, that we all depend on that. We are part of nature. And the cost that businesses now are incurring into their business models are becoming significantly higher than the money we have to spent to avoid it. So if we overshoot these planetary boundaries, Adam, then CSR corporate social responsibility, which is basically being less bad, is not good enough anymore. It's like saying, I used to murder 10 people. Now I only murder five people. Am I a better murderer? It just doesn't work anymore. So you have to start thinking about regenerative risk. That's the whole idea of net positive and rapidly moving from risk mitigation to opportunity, the financial market is waking up, the citizens of this world are waking up and putting their purchasing power there. Politicians in many countries are waking up making climate commitments and other ones. But more importantly, it's actually your employees and your own children that are telling you to change this. This change to move to these longer-term, more sustainable business models, to put purpose at the core, to optimize the return of all stakeholders is increasingly also associated, not surprisingly, with better longer-term returns for the shareholders. But it's a result of these models. It's not this pure objective of mindlessly chasing shareholder return. Now we can show that a company that has a more diverse board or has a better representation of the population inside of their company, or more actively try to mitigate these negative externalities, fight climate change, have better social protection for its workers, etc, that these companies are actually better performing.

Adam: Paul, I want to dive more deeply into the topic of building a winning organizational culture which you touched on. You lead a $175 billion company. What did you look for in the people who you hired and what advice do you have for listeners on how to build a winning organizational culture?

Paul: Well, you cannot have a sustainable business if the people themselves are not sustainable. You cannot have a purposeful business if the people themselves are not purposeful. And these businesses are built by people. Products come and go and strategies develop themselves over time or multiple times. But, at the end of the day, it's the people that make the difference. So one of the first things we did was take a page out of the Jim Collins book, From Good to Great. I came in as the first CEO from the outside, which made it a little bit more difficult. And I quickly discovered that it was not really right for me to demand respect, by the nature of my position I held but really I had to earn my respect. So I took this page from Jim Collins where he said no to the core before you stimulate progress, and we went back to the history of the company, and why people like that created these companies. In Unilever’s case, he already was talking about shared prosperity. He had as a mission making hygiene commonplace when one out of two babies in Victorian Britain wouldn't make it past year one. He built housing for his workers before the factories were up. He was the first one in the UK who guaranteed pensions. When World War One came, he actually guaranteed pay. We had the highest number of volunteers going to the war in those days. They were volunteers of any company in the UK. So this guy lived under a concept that he called shared prosperity, even in religion. He was a Unitarian, which was quite interesting. So he was a unique character. And unlike the Rockefellers, or the Melons or the Carnegie's who were his contemporaries, he actually never had money, he was always spending it before he got it, in terms of trying to do the right thing. And that was the culture that created this great company. Then over time when strategies became, you know, we're not performing as well, when the business was under pressure. When turnover was going down, people started to get into the wrong cycle, you know, they thought they could, you know, save their way to prosperity, they could sell brands if it didn't work and return the money to the shareholders. They started chasing short-term targets, and the company became, frankly, a little bit dysfunctional. The first thing we did was spend a year with Bill George, who had written this great book to north to train all of our people, including the top team, myself included and finding their own purpose, their crucibles, and then created a business model that first and foremost, you know, was a business model that was based on what was needed. Taking responsibility for the total impact of our company in this world, all consequences intended or not, in our case, by not going quarterly reporting anymore. Our communication became more strategic and we started attracting other shareholders. The people in the company could make longer-term decisions and support brands and investments to build these brands that they otherwise could not do. Our innovations became bigger and better. So it gets you into this virtuous circle that moves you upwards versus the ones that drag you downward. So these might be some of the things that other companies could look at.

Adam: You oversaw many of the largest, most prominent, most recognizable brands in the world. We were talking off the air about one of those brands, which is the soap that I've used my entire life. What are your best tips on the topics of marketing and branding?

Paul: So you know, a brand is really your main link with your consumers or the citizens. So you communicate through your brands. Whilst it is important to have the overall consistency of the company brand, first and foremost, we put the Unilever brand on everything. And again, we started advertising the Unilever brand. We put all of our corporate targets out there, which is absolutely key for consistency. We said, for example, all of our products need to be sustainable. We want to decouple our growth from environmental impact, we want to create 5 million jobs. For women, we want to be gender equal, not only in our own workforce in our offices but in our total value chain. When we said to 5 million farmers that we wanted to create jobs, for it, there were two and a half million women, that type of thing. So we have these corporate targets that you don't want to compromise on. But then your relationship with the citizens of this world is more through your brands. And what we found very clearly was to put in the core of the brand key, as we call it, what the brand stands for, we put purpose in there. And the brands that had that stronger purpose were actually the brands that were also growing fast and being more profitable. It took us a few years to show that. But once that became clear, we also started to unlock the value creation story with our shareholders, and it became much easier to get their support. So what does that mean in practice? That means if you work on a brand like Domestos, which is the biggest toilet bowl cleaner, not a very attractive and appetizing discussion during dinner time, and you're over apprentice, but you see, if you all of a sudden set an objective to build 100 million toilets in a world where still 1.3 billion people have opened application with all the issues of sexual harassment, of contamination of the soil have affecting your food and sickness and disease, then you all of a sudden have a higher purpose, you're working on something bigger than yourself. So that became the goal of Domestos because it had that goal of building these toilets. It was much closer to society and its innovation started to accelerate. A brand like Dove stands for women's self-esteem. Only 5-6% of women feel happy in the skins they're in because any woman you see in a magazine has been 10 times altered by a computer. So already at a very early age, women feel timid not to draw attention to themselves and are not participating in certain sports. So we started this whole program to reach over 100 million girls. It was the women's self-esteem in schools, and started to communicate around that in our media tools as well. And if I take another one, a brand like Live Boy, which is the global leading bar soap for handwashing, its mission becomes very simple; to help a child reach the age of five. You know, 4 million children die every year of infectious diseases like pneumonia, diarrhea, and they're not our children, but they are our children to a great extent, in tripe, humanity. And that can be avoided for a great part by just the act of handwashing. So we started setting a goal of reaching a billion people with handwashing. And we actually achieved 1.3 billion people. But think about the energy that unlocks in a company. And this is really the answer to your question on purpose. Where food waste is a terrible thing. 30-40% of food in this world is getting wasted. How can you waste food, when 826 million people still go back to bed hungry every night, not even knowing if they will wake up the next day? So in most companies, when you talk about food waste, it's a cost-cutting program. Now let's cut 20% of the waste. Let's get a little bit more profit. Let's then give a little bit more share buybacks or special dividends and give it to the shareholders and our share price goes up. In Unilever cutting the waste was a very simple thing. How could we even afford to waste food when 826 million people still go to bed hungry? It became a question of survival, of dignity and respect for everybody. And as a result, I think we got more waste out of the system and our competitors. We probably saved more lives by working on the food equation side then on the other side. And we changed the whole modus operandi in terms of working for the billions of people we serve. They're not the few billionaires that enrich them on these types of institutions that we run. That's a very important thing. And the brands are the main vehicles for that, obviously, in terms of that relationship, as I said.

Adam: You moved here from the Netherlands. You spent most of your career working for one of America's largest companies. You were the CFO of the second largest company in Switzerland and CEO of Unilever, headquartered in the UK. What advice do you have for listeners on how to best navigate the global landscape and most effectively conduct business internationally?

Paul: Well, yes, I have been fortunate there and to be at the board level in all three companies, I don't think that will be easily repeated in the future. But it was entirely serendipity. And it was not my plan. But sometimes life unfolds itself, I've always believed in creating options, which is more important than anything. And then once you have the opportunities, you pick one that you feel best about, ideally, talking with your family as well to have their support. And then you don't look back. And I've been very fortunate with these options, although they were totally lateral. In a lot of the ways, you know, I'd never been a CFO of a major company, and after running P&G’s, international business, and having always run countries and brands and all these things, to become a CFO of Nestlé at a time when you had the permanence was a little scary. That was one of the nights that my wife did not sleep at all, she thought I was heading for jail. But I thought it was such a great opportunity to learn and stretch and, and grow as an individual and take on the challenge that was probably bigger than I rationally would have taken. But these are just great opportunities to grow. So, you know, my best advice is, create the opportunities, be yourselves, you know, go for the things that stretch, you don't find the easy way out. You know, you learn from your failings. If I remember my 40-year career, the best thing I remember is not what I did well, it is really what I did wrong. And when I say to people, I ended up being a CEO of Unilever, because I probably made more mistakes than you did. And they start to laugh. But there is a truth to that. And then you obviously have to learn from these mistakes. But what you find there is, and I'm to come to your question here, as well as that, having run all these global companies, it boils down to these basic human values of dignity and respect, of equity, of compassion, that permeate any culture, that it starts and ends with people and cannot sit in big offices in Washington or at the UN in New York or in any other headquarter to talk about how we're going to solve the issues of food security if we don't involve the farmers, we cannot talk about how we deal with access to save social safety net and decent employment and human rights if we don't talk to the people that often are in the refugee camps for 20 years, and not even have a chance to get out. Or for the two the four and a half billion people in this world that still live on less than $5 a day. You know, this goal that we have of creating a more sustainable and equitable and more inclusive world has to start by a firm belief that we cannot leave anybody behind. And the best thing that we all can do is realize how lucky we are to be in positions that are far more fortunate in terms of having our jobs or financial security and other things. And that really requires us, in whatever job we do, whatever company we work for, to put ourselves to the surface of these less fortunate people. And that's the thing that is probably the biggest lesson in all of this. And it's not by simply pursuing your own interests or the interests of the shareholders, it's actually trying to ensure that all your stakeholders benefit from your being around. And if you do that, well if you do that over a longer period of time, I think you will see that your companies are more resilient, they're more robust, but actually also more profitable.

Adam: Paul, thank you for all the great advice and thank you for being a part of Thirty Minute Mentors.

Paul: No, thank you for the opportunity.


Adam Mendler is the CEO of The Veloz Group, where he co-founded and oversees ventures across a wide variety of industries. Adam is also the creator and host of the business and leadership podcast Thirty Minute Mentors, where he goes one on one with America's most successful people - Fortune 500 CEOs, founders of household name companies, Hall of Fame and Olympic gold medal winning athletes, political and military leaders - for intimate half-hour conversations each week. Adam has written extensively on leadership, management, entrepreneurship, marketing and sales, having authored over 70 articles published in major media outlets including Forbes, Inc. and HuffPost, and has conducted more than 500 one on one interviews with America’s top leaders through his collective media projects. A top leadership speaker, Adam draws upon his insights building and leading businesses and interviewing hundreds of America's top leaders as a top keynote speaker to businesses, universities and non-profit organizations.

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