Unilever’s workforce transformation: hard truths and help with change

Everybody has a hot take on the economy. And whether you're curious about inflation, trade wars, or the markets, what you need is reporting you can trust. Hi, I'm Kai, Rizdal, the host of Marketplace. Our award-winning reporters talk to everybody from CEOs to farmers to help you understand how the economy takes shape in the real world. You'll be smarter every time you listen. And these days, that's priceless. Listen to Marketplace on your favorite podcast app. It means starting to manage change by talking with people at a very early stage of that change process. And either preparing them for the change, who are upskilling, re-skilling them, or helping them be employable. And not waiting to even out something, and then cobbling together an old-fashioned out placement program. Nick Dockner's Unilever is executive vice-preserved HR business transformation. Nick has long rustled with the ever-changing nature of work and the consumer goods industry. Yet keeping pace with automation, artificial intelligence, and machine learning are requiring the central company to move faster than it ever has before. Dalton and his colleagues developed a comprehensive scheme to bring the multinationals 155,000 employees into the future of work. This vast program includes operation and cultural change across many divisions in more than 100 countries. The effort includes promoting lifelong learning, creating a hybrid staffing model, and working in new ways with governments, unions, and other external entities. Welcome to the Managing the Future of Work podcast from Harvard Business School. I'm your host, Bill Kirk. Nearly four years into its workforce transition, Unilever has a chance of substantial early success. But they also have a ways to go. The task is enormous and each of Unilever's locations and businesses has its own particular conditions. Can innovations like internal talent marketplaces and individualized future work plans help Unilever compete profitably and in a sustained way? How close is Unilever to resolving the paradoxes of being a purpose-driven company in a modern technology edge? Let's find out. Welcome, Nick. Thank you, Bill. It's great to be on the podcast with you. So Nick, you've been with Unilever for a bunch of years. Can you give us a short career tweet? I've been with Unilever for 34 years and whenever I hear myself say that, I have to say it comes as a shock. So still think I'm 27 somewhere in my mind. But I've had the classic career you would expect in a multinational like Unilever. I've worked in three different countries. I've been in HR throughout the whole time and I've worked practically across all the disciplines in HR, even including implementing HR information systems, which I have to say wasn't my favorite role at the time. In 2016, one of your jobs apparently became connected to the future of work initiative, Unilever launched it. So tell us a bit about its origin. Yes. So in 2016, I was appointed to look after Europe and the global markets, which was a really operational role in looking after HR operations around the world. And in that role, we had to grapple with facing into what we saw as a mountain of change coming our way. Like a lot of consumer goods businesses, we had focused on the retailer, the big retailer, or what we call the traditional trade, which in the developing world was the smaller shops. But we saw the advent of digitalisation. We saw e-commerce. We saw the director consumer wave coming towards us. And we also saw the possibilities of automation go from the textbook from the article to reality. As we saw how our factories were increasingly automating with what we call co-bots and robots. And the applicability now of AI and machine learning to anyone who ran a spreadsheet really. So we had to face in and think about how we were going to manage this change, how to pace another rate that would ensure that we could be ahead of the curve in meeting our consumers needs. Yeah. And I think before we get into kind of what the initiative entailed, we should probably provide a little bit of background for the listeners about what purpose means at Unilever. Because it's very important for how you and your team approach these critical questions. Purpose is the heart of our strategy. As a business, go back 125 years. It was formed by William Heskut-Lever, who actually had a purpose of making cleanliness commonplace, which really does resonate today, I think. And our founder established one of the big model villages in the UK. He built this village in 1895 to the turn of the century, or sunlight village. The house is beautiful. But when he was building that village, just a few miles down the road, the biggest city Liverpool, was a running slum at the time. So the man's vision for the purpose of his business and for the people in the business has reverberated through us down the centuries. And today, we really do see ourselves as a purpose-led, purpose-driven business. We see the future of brands as being in purpose. We believe that the brands with purpose grow, that people with purpose thrive, and that companies with purpose last. As a consumer goods business, we really do believe the future of the FMCG world is in brands, is in goods that really do deliver that emotional connection around purpose. So now let's get back to the future of work. And one of the things you've been working deeply around is this tension between the future of work and purpose. Tell us how you define this struggle that's here or what could be the paradox. If we believe as a business, the large brands are going to have a positive social impact and a positive environmental impact. You can't be saying that and implementing that on the one hand whilst managing major, major redundancies, major, major dislocations in people's working life in a very traditional and if I may say old fashioned way. The paradox we have to face into is how do we make change in a way that is in line with our purpose, in line with our values, but it's also quick and is it effective and meets the changing marketplace? We say as we know now is changing very, very quickly. Yeah, and for you having also the strong middle class to be able to buy Unilever's brands and products is very important. So it's not just the PR issue or communications issue. There's also making sure you have a strong customer base for the future. Yeah, absolutely. I mean, it's a whole systemic issue because as a branded goods manufacturer, the people we employ and the people employed in our value chain need to have a living wage to buy our brands because otherwise if everything ends up being a race to the bottom in the consumer goods industry, a brand's die. Now we believe our brands not only a technically superior, but also actually address real social and environmental challenges in ensuring they're sustainable or ensuring they meet a social need like levers making cleanliness commonplace, which we do through our life boy brand and lots of the developing world and encouraging hand washing. Because I'm going to get lockers through the pillars of your program. There's three pillars. And so let's begin with change the way we change. That's the first pillar. Tell us what that entails. Yeah, so that talks to the very much centrally to the paradox we've just been discussing the old 20th century way of managing change was either very power driven or very process driven. In other words, you either told people change or move on gone work for someone else if you don't like it here often led to industrial conflict. Oh, it was a process driven. There were works council processes in you. For example, there were laws you had to follow and processes and steps you had to make and as long as you were dead to them, then you could effect the change. The issue today is that that process driven way, whilst there has an element of fairness and stability is too slow. And a power driven way is too brutal. We're talking about ways of leading change that are more about taking people with us and making sure that all our employees are able to thrive with change and not be a victim of change. And it means giving up some control because it means starting to manage change by talking with people at a very early stage of that change process in either preparing them for the change, who are upskilling, re-skilling them or helping them be employable and not waiting to even out something and then cobbling together an old-fashioned out placement program which actually can cost you as much money, but is far less enabling and far less empowering for the people who need then to get their lives together and work through that change. Yeah, I mean, there's the adult, the adult that happens with your employees but you're also going to be as a company working with work councils and unions and labor relations and so forth, particularly in the European context as well as some of the other markets that you're in. Tell us about how this change, the way we change has influenced those relationships. Yeah, so I mean, it was very clear when we work with trade unions in Europe, particularly with the European Works Council which we have. Actually, people know what's happening. Now, we have 155,000 people globally. We have lots and lots of factories. People see in the factories how automation is becoming a reality. People in the offices are seeing now how AI and machine learning is starting to really speed up some of the back office processes. And in the end, people know that these are realities. People can be empowered to, as I say, thrive on that change. And the business benefit is potentially we change much, much quicker because we don't have to have the big event process driven delays that might otherwise be there if we do it the old fashioned way. That's a great segue into the second pillar which is called Ignite Life Long Learning and Critical Skills. Tell us about the new capabilities Unilever is embedding into the organization to help this change process. We want every single one of our employees to have what we're calling a future fit plan. So far in Unilever, 60,000 of our people have been through purpose workshops where we've worked with them to help them identify what their purposes or how they want to realize their potential in life. And if it's about I just want to work to look after my family, then the plan is okay, how are we going to make you as employable as we can? If you're a factory worker, let's look at the job of Jason's that you have and maybe we can look at some of those job of Jason's and start to train you up for things you might want to do when your factory disappears or changes. If you want to change profession or change function, how can you do some work as part of our program of flexibility where you can go and temporarily work in a project somewhere else in the business to learn about that profession. And if you need to upskill because your current job is going to require some upskilling around the digital agenda or even the so-called soft skills agenda, how can we practically prepare you for that now? And how much of this kind of platform that's being developed is through working with external vendors versus Unilever creating its own IT capabilities and sort of more customized product. This agenda needs to be done with other people. It's almost like a consortia agenda. It's not an agenda I believe any company can do on its own. So we're working for example with Degree who we're using for as a learning platform where once people have identified a future fit plan, those who are able to can use their phones, digital devices in order to access programs quite easily. We have to address a language challenge there but we're doing that. We're working with other suppliers in terms of looking at how people can make themselves available for agile or flex roles within the company, gloat for example our platform we're using. And we're seeking to link those things together and we're exploring software that looks at job adjacences, we're exploring areas such as how can we bring access to coaches, how can we deploy well-being and mindfulness resources as well as purpose-led solutions so that people can access these wherever they work. So a lot of this works well where people have access to computers but one of the challenges we're bringing alive and why it's so important to do this actually with the trade unions and employee representatives is how do we bring this into a factory? Well there's not a computer there. How do we enable people working in a factory to have time to identify their purpose? How can we do it in a way that's contextualised and fits the individuals needs, the culture where they work? We're in 165 plus countries worldwide so this is quite complex and it can't just be top-down. We have to involve people in building that with us because otherwise it won't be fit for purpose in the context they've been. Yeah imagine now you've mentioned several challenging spots like factories where you have continuous operations and how you work some of this in. I'm sure there's differences across even individual managers at Unilever's to the degree they're ready to accept a program like this versus want to kind of maybe drag their feet a little bit and see if it's if the change is real. How much you letting local operations decide how quickly to adopt and implement these plans versus pushing for a consistent kind of progress across all of Unilever's operations? I think you put your finger on another paradox therefore it's built because for people like me of course there's always an instinct to say how we're measuring this, how do we make sure it's paying, how do we make sure people are doing it? But equally the realities are that each of our markets, each of our businesses are at different places in terms of change curves, in terms of world views, in terms of the markets they face. But there is a fundamental underpinning which is about how we lead and that can be common across all our geographies and we recently relaunched what we call our standards of leadership. In old fashioned terminology you call them management competencies but they're not, they're more than that. And in our standards of leadership now we're really focusing on what we call the in-game which is the about developing leaders who are able actually to lead through networks, leading non-hierarchical ways, lead by working and cooperating with and through others. I call them the Nelson Mandela's of the business world. They really are types of leaders who actually do things in a way that are about integration. It's not the old fashioned transformational leadership instinct that I was brought up with where you want to measure everything and you want to have dashboards. It's actually letting others now run with this and letting others bring it alive. Slight planting seeds actually rather than building a building. It's about planting seeds and watering them and then hoping they grow. It makes me nervous to be honest. Yeah and I'm sure sometimes you get positive surprises like you are some of the flowers that are growing or not ones that you anticipated but you love them when you see them and other times you're praying for the flowers to start blooming. Nick, let me take you to the third pillar which is redefine the unilever system of work which involves a lot more of external talent and new ways of connecting people to jobs. It's also about that third pillar. A lot of your traditional roles or roles we have in the business today are going to change but equally you see that there's a whole load of new roles when emerge and alongside those new roles will be a whole load of new ways of working because we will end up I think in a world that's far more flexible, far more agile that will involve people taking on tasks rather than having old fashioned jobs not everywhere but increasingly so and whilst we see if we move quick enough and change quick enough that we'll actually create far more roles, far more jobs if you like, than we will lose. They will look so much and be so much different from that classic 40/40/40 type career type job that I have now and I've had in my career. So what we need to do is to prepare for a new world of work where jobs are far more agile where people are far more flexible than historically has been in the case but do that in a way that is consistent with our values so we need flex with security for example not flex that gives people insecurity and we need agility that actually builds on what we've got not something that's an aside and just done in certain areas. So we've been looking at how we organise work we've been looking at different employment models that call upon what does a portfolio career look like? What does a flex career look like? What does the 100 year life career look like that people born in the 90s will have? Well they're going to go in and out of work and need different things at different times and so we're experimenting with employment models whereby we have people on retainers who are our employees but they can work for other people too. We're experimenting with employment models where people can flex between functions in a way they could never have done before and we're seeking to do that in a way that reassures our employees and they don't see there's a way of making them contingent but they see there's a way of us offering a menu of different ways they can work as they navigate their lives through a career that will probably be in unilever out a unilever back in again sometimes less hours sometimes more hours and it's very early days. I have to say lots of the employment law around the world doesn't help us because it's still very traditional and people look at what we're doing and say why are you encouraging flex? Well we think flex and agility is the future of a lot of work on a work but it's still quite small and we're experimenting now and we know we'll have to do this with others. I actually think there could be a world in the future where employers share employees a bit like star alliance the airline companies share assets. I think there may be a world where we share employees and we don't to create those sorts of world and that's our type of thinking with other like-minded employees who are doing this with a purpose driven agenda. Yeah it's also you can clearly sense a bit of the challenge where you've got to bring not only at this point work councils and unions on board but you also have to oftentimes get the employment protection laws or other kinds of legal frameworks to be aligned with the new type of work and that's a place where throughout the world companies and governments are trying to find the right new setting. Nick these pillars are setting up the framework and use the analogy of some of the flowers blooming and you're going to require the local leaders adapt this into this context. Can you give us just some tangible examples of this inaction? Like what are some of the places that when you look around Unilever's global operations you see the future of work program working? Yeah so one of the ones we're most proud of actually is in a plantation we have in Cariccio in Kenya. Believe it or not we have around 13,000 or so people are on that plantation and they live there with families so it's really like a little city is far more people than that dependent on the plantation and plantations it's a tea plantation they too have been mechanising so as we've been mechanising lots of the tea picking operations we've had to make about 2,000 people redundant on that plantation. Now in Cariccio we are Cariccio Unilever is Cariccio it's not as if there's another plant down the road they can go to and work out. So how do we do that in a way that's consistent with our purpose and values? Well what we've done there is we spent a lot of time and effort building an entrepreneurial environment and ecosystem where people are setting up companies where people are setting up their own operations and we're helping them do so which helps Cariccio actually become a more vibrant economic ecosystem and not just the place where we have a tea plantation. Equally in Italy we've been working there where we've had factories that would have otherwise closed and we've worked with the local ecosystem in order to find solutions for those factories. What we've done in Italy is we've been open with people about this is what's going to happen. Not happening next month or a month after but we're going to have to look now for other solutions for this factory, with other partners or with other options. And we've been tremendously successful there and indeed our Christ President HR in Italy has started to pull together consortia within the country involving the government in order to get that consortia, get that group to start working on these wider issues of how do we start doing this in a different way. And not all of its glamorous, some of it is old-fashioned stuff which is actually anticipating the jobs you're going to have coming up in the next year in a country and proactively then starting to train people for those jobs who are willing to go out and recruit for them. I mean we believe there's a hell of a lot of money in terms of savings we can make just by simply redeploying people in a more thoughtful way. I mean if every 700 employees that we can train and redeploy, we believe we make 6.6 million savings. Yeah, so Nick one thing that I've been very impressed about this program is we've got to learn about it through the case study is how much it's not just about resolving the paradox and being respectful to employees but you're also getting a positive return on investment here that allows you to then build out the platforms and other pieces that you've described. When you think about a workforce that is becoming redundant due to automation, what is your target in terms of the placement to like either inside Unilever or outside but at jobs and opportunities that are equally good. Yeah, so look, I mean we're being ambitious on this. We want a minimum of 80% of people placed in jobs of equivalent types of jobs in terms of wage or into training or into retirement and actually the 80% probably is the minimum because when we begin a project we really want to sort out as many people as we can towards the 100%. But 80% is if you like what we'd use as our initial benchmark and here we're looking at business cases really that go into three areas we want to increase the speed of change. People have already anticipated the change. If they sorted out to some degree about where they're going what they're doing for themselves you can move and implement far quicker than what otherwise be the case. I mentioned before the savings we can make from redeploying more effectively. And I think what we're also seeing which is really quite interesting is how our HR system comes together to integrate to provide the platform for this. So lots of companies like us will be using gloats. Lots of companies will be using degree. Lots of companies will do outplace work. Lots of companies will have systems where you can identify job adjacences to manage training and development. Many companies might have worked on purpose. But what we're doing now is we're bringing in all those investments that we've made over the last three or four years and we're integrating them bringing them together so that when you combine them you get the real integrated systemic benefit of a whole HR system in support of a change agenda in support of where we're going into the future and in support of our values our people and our purpose. Yeah, Nick one of the things that I'd like you to reflect upon with this is this future work program has some substantial benefits, maybe even some competitive benefits. And yet you've also been very open and transparent with us and now on this podcast we're talking about this to the public. Why the transparency, why the openness? Because we can't do it on our own bill I think. We're a review that says this agenda around the future of work, this agenda around getting at the workforce ready for the future. This agenda about ensuring each of our employees is job ready either upskilled or re-skilled or has an employability program is one that in the end you need to do within networks with other people. You see if we can really work with our employees on employability there's no reason why in that employability program for them they can't go and work in a different sector or in another company for a period of time in order to get them ready for a time when they might work there. I mean as we sit here today there's some great examples can emerge in terms of the voluntary sector where I suspect in the caring area moving forward and social care there will be a boom in employment and many of our employees can experiment with that so we can help them as long as we're partnering with other companies as I said before like my did companies who want to work with us of ensuring that really we have a system of change that's purpose driven that employees can thrive in and I believe in a lot of people believe actually there might be a shortage of jobs there will just be different types of jobs they might not be in factories in the same way as they were before but they might be in care homes a lot more as we move forward there might be in the health sector a lot more as they move forward. Certainly we see it in warehousing certainly we see it in logistics and we can get our people ready for those roles and we can work with employers who need people in those roles and by looking at this systemically looking at this through a partnership lens actually not looking at it in a silo of your own but looking at it in a way that wants to create networks wants to create star alliances I think we can really make a difference here and we can make a difference in a way that enables change brings the sort of abundance that actually AIM machine learning can bring us and brings it in a way that starts to empower and enable people and not put people out of work and regress us backwards to the sort of early days of the industrial revolution I think that's the price it's quite ambitious as you can see and that's why I think it's right when you started to call it a paradox because we don't know how to do it we genuinely don't know how to do it and we want to work with other people to explore different means different MVPs if you like different ways that we can start to let the thousand flowers bloom if I can say Nick let me ask you one final question we were supposed to record this in person we had some grand plans about you coming to Boston but then COVID-19 sort of turned the world upside down you know you've certainly kind of faced its challenges along with every other company in this tough environment any lessons you've taken away from COVID-19 so far? Yeah it's about people so what I believe actually is that COVID-19 will accelerate the types of changes we've just been speaking about Bill I think it will accelerate AIM machine learning I think it will accelerate digital change is already accelerating direct to consumer and e-commerce it will accelerate a lot of the changes in society that would otherwise take 10 20 or 30 years I actually from an HR perspective think it will accelerate the types of leaders we had as well you know we speak about I spoke before about Nelson Mandela's of the business world I mean I see our leaders now and in the last three weeks and in the next three months our leaders are going to get 30 years worth of experience because of everything that we're all going through in terms of managing this crisis so I think it will bring us into the paradox way or the paradox change where companies have to work together in a different way where governments and business work together in a different way it will see a rise in the care sector and the health sector I spoke about before which provide all sorts of opportunities it will allow us to think about how we can redeploy employees into those sectors where they will be needed and I think what it brings across is really how important changing the way we changes because we can't today call our factory workers and our retail workers and our care workers and our health care workers heroes and tomorrow subject them to the old style way of restructuring and reorganising that we used to do in the 20th century is just not on just what happened so in Unilever we're in a place that we provide food and we provide hygiene products and we're focusing on business continuity and what that really brings home to us is how important putting our arms around our people is at this moment in time ensuring their safety at work but also ensuring that we can as we come through this work and bring alive the concepts I've outlined and we've spoken about here around the future of work to ensure that we do enable and empower those people as we go into the changes and whatever we face and who knows what else we'll face post COVID-19 into the future thinking about how we equip our people for the future is now absolutely essential in urgent because what I thought would take 30 years is only going to take three months in terms of the change that we're facing. Well Nick thanks for sharing that perspective and also for this whole podcast and your description of Unilever's Future Work program and I want to highly recommend listeners also check out your thoughtful book Change the workplace, Change the world. I think that's also now more important than ever for people to take a look at. Thanks for joining us today Nick. Yeah thank you Bill and keep safe. We hope you enjoy the Managing the Future of Work podcast. If you haven't already please subscribe and rate the show wherever you get your podcasts. You can find out more about the Managing the Future of Work project at our website hbs.edu/managingthefutureofwork. While you're there, Sign up for our newsletter.