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C A S E T E A C H I N G N O T E S
Paul Polman and the revitalisation of Unilever
D. Jan Eppink
1. Introduction
This case study describes the changes that Paul Polman initiated to improve Unilevers
performance. Their performance was lagging behind that of its most important competitors for
2. Position of the case
This case study is concerned with revitalising a major conglomerate that for many years had not
3. Learning objectives
The case is primarily to help students understand that:
History and values influence strategy
Some situations require a company to hire an outsider
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4. Teaching scheme
The case can be used as a basis for plenary discussion. It is useful to ask students to collect
recent information on the companys sales and financial performance to supplement and update
5. Questions for discussion
1. What is the influence of history and values on Unilevers strategy?
2. How can we judge Unilevers performance before 2009?
3. Why do you think Unilever decided to hire an outsider?
Depending on the length of time available to discuss the case, tutors might want to select
questions from those above which are most relevant to the learning objectives for the session.
6. Case analysis
1. What is the influence of history and values on Unilevers strategy?
This question relates to material in Section 5.2 (Illustration 5.1 is about Unilevers history and
its legacy) in Exploring Strategy. Unilevers growth had been realised by geographic expansion
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2. How can we judge Unilevers performance before 2009?
Appendix 1 (Financial data) shows that in the years 2004 to 2008 turnover did rise, but at a very
low annual average growth rate of slightly over 2%. This would hardly be enough to
3. Why do you think Unilever decided to hire an outsider?
Paul Polman was the first CEO who was hired from outside the company. For a company that
had a reputation for its management development programmes this must have been a hard
decision to make.
Some reasons that might be an explanation are:
The directors became aware that the lagging performance had to be turned around. External
4. What elements of Unilevers strategy did Polman change?
In some ways the fundamental strategy did not change much over the years. Emphasis was still
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5. With reference to Figure 14.4 what is the type of change within Unilever?
This question relates to material in Section 14.5 in Exploring Strategy. In terms of Figure 14.4,
the change required is one of the Big Bang type. An incremental change would not suffice.
Although Unilever had seen changes in the years before Polman became CEO, the results had
not improved sufficiently. The criticisms of analysts, shareholders and journalists had made that
6. How can we characterise Polmans leadership?
This question relates to material in Section 14.2.2 in Exploring Strategy. He stressed the need
for creating more economic value, but also stressed the importance of organisational capability.
He leveraged capabilites, for instance in the case of the quick geographical expansion of the
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7. What is the influence of setting stricter performance targets?
The effect of setting stricter performance targets for individual managers has made them more
aware of the contribution each must make to the company. Before, it was not always a problem
if a manager did not reach their targets. In the past, average bonus was well above the target
bonus. This indicates that targets were not set very high. Now they are and average bonus is
8. How would you assess the structural changes at Unilever?
Unilevers organisation structure can be described as a matrix (see Section 13.2.3 in Exploring
Strategy). It combines categories (product groups) with regions. In this structure the regions
have profit responsibility for the local operations, whereas categories are responsible for
medium-term value creation, considering items such as market share, category growth, brand
health and innovation (Annual report 2009, p. 27).
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9. Is Unilever ready for the future?
It is always difficult to say that a company is ready for the future. Evidence from the past has
shown that excellent companies in a few years can become mediocre. A lesson learned from In
Search of Excellence by T.J. Peters and R.H. Waterman, published in 1982.