In our previous article, we discussed why it was important for organizations to have clear portfolio guidance. To ensure clear alignment between strategy and innovation projects. Here, we try to unpack Unilever’s Portfolio Guidance to see how it has shaped the makeup of Unilever’s portfolio. 

By the 2000s, Unilever was struggling to overcome rising commodity prices and the financial crisis of 2008. In 2010 Paul Polman joins Unilever as their newly appointed CEO and repositions Unilever to become a purpose-driven company. He believes most consumers are willing to switch their purchase to a brand that supports sustainable living—and he believes that, as a company, Unilever is able to improve profitability while reducing its environmental impact. 

Paul Polman believed in focusing on the long term and set ambitious sustainability goals for Unilever. He believed that a company’s growth can decouple from its environmental impact; products with a purpose can create higher consumer demand and better-constructed supply chains will be more sustainable long term.

Under Polman’s guidance Unilever set 3 ambitious portfolio guidance through its Sustainable Living Plan all the while growing their business:

1. Improving health and well-being for more than 1 billion people
2. Reduce its environmental impact by half
3. Enhance livelihoods for millions of people 

Unilever's Strategic Guidance Framework

The result of the sustainability portfolio guidance is Unilever’s Sustainable Living Brands. These brands are those that communicate a strong environmental or social purpose, with products that contribute to achieving the company’s ambition of halving its environmental footprint and increasing its positive social impact. Unilever now has a total of 28 Sustainable Living Brands, where seven of Unilever’s top ten brands – Dove, Knorr, Omo/Persil, Rexona/Sure, Lipton, Hellmann’s and Wall’s ice cream – are all Sustainable Living Brands. 

Strategic direction: make sustainable living commonplace 

Overtime, Unilever will make all 400+ of its brands’ purpose-led by reducing their environmental footprint, while increasing positive social impact. In 2018, Unilever’s purpose-led, Sustainable Living Brands grew 69% faster than the rest of the business, delivering 75% of the company’s growth.  

Questions to guide your organization: 

1. What do you aspire your organization to be?
2. What arenas do you want to play in the long term? (e.g. markets, geographies, technologies, etc.
3. What kind of financial performance do you hope to achieve?

Organizational culture: purposeful and principled

At Unilever, success is defined as having "the highest standards of corporate behavior towards everyone we work with, the communities we touch, and the environment on which we have an impact."  

All of Unilever’s Sustainable Living Brands have a higher purpose. Whether it is having a better environmental impact, like developing fabric conditioners that use 20% less water. Or a positive social impact, through Dove’s Self-Esteem Project, helping over 35million young people to grow up feeling confident about the way they look. 

Questions to guide your organization: 

1. What kind of key behaviors do the people in your organisation need to exhibit?
2. What enablers do you need to put in place to facilitate the culture you want?
   

Brand image: purpose-driven not profit-driven

“Over 90% of millennials say they would switch brands for one which champions a cause.” 

Unilever has indicated it will drop brands that do not “contribute meaningfully to the world,” even if it affects their bottom line. These include much-loved brands like Marmite, Magnum, and Pot Noodle.

Questions to guide your organization: 

1. How do you want the outside world to perceive you? (e.g. customers, stakeholders, shareholders, media, etc.)
2. What does your brand stand for?

In 2018, Unilever’s purpose-led, Sustainable Living Brands grew 69% faster than the rest of the business and delivered 75% of the company’s growth. “In the future, every Unilever brand will be a brand with purpose.”

Alan Jope

CEO Unilever 2019 

Download the Strategic Guidance Framework to align your organisation's strategic and innovation projects. 

You can find this example and many others in our latest book The Invincible Company.