How are the following brands connected: Unilever, Siemens and Patagonia? They all have managers who do not submit to Short-termism. With this new open space, these personalities develop and realise responsible and meaningful strategies. They take the lead, give orientation and act with professional consequence; as a result, all stakeholders win – consumers, clients, co-workers, shareholders and in addition: society.
In one of his first interviews with The Financial Times in 2010, Paul Polman, who was the newly appointed managing executive of Unilever at the time, gave a brave and, for a lot of people, provoking statement: “I’m not driven and I don’t drive this business model by driving shareholder value. I drive this business model by focusing on the consumer and the customer in a responsible way and I know that shareholder value can come.” Since then, he has been holding on to this promise and has been acting upon it consistently. First, he eliminated all quarterly statements and most analyst reports. Then he spoke about goals like the end of hunger or sustainable environmental protection. What might sound messianic, Polman is conducting with logic and consequence in his daily manager life and was consequently able to change the perception of his company in a very positive way – even Greenpeace showed respect for this.
Managers who give purpose
Polman could give his customers and the 160,000 employees at Unilever a sustainable and human vision of the future. He could clarify that a company like Unilever has to act and take over the lead in terms of social responsibility. Since then, Unilever’s stock price has doubled.
Siemens-boss Joe Kaeser has also put his company in the position of a purpose-giver. “A company which cannot bring value to society is not worth existing.”
The same tone is coming from the management board of Patagonia, a leading producer of outdoor-equipment. Their VP of Environmental Affairs, Rick Ridgeway, spoke about “The Limits of Growth” relating to the waste of resources, pollution and climate change. He even warned their customers in TV-commercials about buying Patagonia’s products without thinking about it first and has nevertheless – or because of this – been realising sustainable growth for years.
The statements of Patagonia could be a source for cynicism, but this company has been able to be measured by their actions for years. Patagonia focused on sustainably produced cotton and Fairtrade certifications very early on. They did this because they believed, that responsible customers would spend more money for this kind of products. Unilever-boss Polman is also not afraid of confronting politicians, when he called them incapable and weak, because they would not address the significant challenges of our society.
A few weeks after the release of the Polman-interview, I asked one of the Austrian top managers of a listed company about his opinion as regards eliminating quarterly statements and stopping to answer to analysts, but to rather invest these management capacities for the customers. His answer was very responsible and reflected, but also somewhat exposing: For a company the size of his organization, this would be impossible. Affected persons – powerful protagonists – would just chase him off his seat. Can only the CEO of a powerful global corporation or an independent family-owned company allow themselves to focus on sustainability and purpose? Will managers of other companies only stay in their seats when they serve short-term primary financial interests? Is Paul Polman a privileged idealist, a stubborn bank-rebel and a seductive demagogue? Or is this a fundamental miscalculation and it is, in fact, time for new strategies?
A lot indicates towards this path where the future belongs to the companies who can define both – their role on the market and their purpose for society – at the same time. Those who bring additional value to society and are led by real personalities. Who have employees backing them who choose to work for them – because it is worth it and seems justified. If we look at it this way, Paul Polman would be a charismatic and considerate leading personality with a long-term focus on profit.
Motivational research shows very convincing arguments for the time of “stick and carrot” being over. Financial motivations are not enough anymore. People are looking for autonomy in their work environment, for development – they want to excel in their own field. Corporate cultures with a purpose, who give their employees and customers a feeling of intellectual and real belonging, are becoming a competitive factor. Honesty and sustainable actions become pillars of corporate success, hollow words are insufficient. For example, climate change and the scarcity of resources have been, for some companies, only phrases in the economic discussion or fillers for PR texts. For a CEO like Polman or the management team of Patagonia, these are realities and a strong signal to act with an economic background.
In order to safe the availability of central resources for the company and their customers, it requires, according to these companies, to integrate the effects of climate change into the long-term strategy of the company.
Executives take responsibility
Managers who are entitled to sustainability redefine their leading role and set a new focus. They see themselves as mediators among the stakeholders and create an environment, which encourages sustainable innovation and meaningful renovation. In the climate of this understanding of leadership, hierarchic barriers are dismantled; they promote diversity and fairness, question norms and routines and foster connectivity to and inside the company and, also external, transparency.
Executives with this attitude will try everything to reinstall the trust in the management-caste, which society has been losing over the past years. Their actions are stirred by meaningful orientation, their employees and customers know exactly what the company stands for and what kind of decision-making-basis they can rely on.
What this attitude and the measures based on it need first and foremost is: courage. This courage does not spring from a certain nonchalance or recklessness, a willingness to take risks or mere self-advantage, but from the deep conviction to take responsibility for the society we live and economise in.
Picture by Stefan Schäfer, Lich