Many companies focus on short-term results. The CEO of consumer-products giant Unilever, Paul Polman, says long-term strategic planning builds better businesses.
After taking the helm, Polman immediately got to work developing a better, more sustainable culture around the office. That included putting an end to quarterly reporting and changing the company’s compensation system accordingly.
“We had to create the right environment so that people would start to think about the longer term,” he says. “What we have seen is that discussions with our financial community have become a little bit more strategic. The decisions in the company are a little bit more long-term.”
“We know it’s very easy to optimize — short-term — the share price,” he admits. “But lives of businesses are getting shorter and shorter, and yet society needs them more and more. Nine out of ten people in this world depend on businesses, and I think it’s in all of our interests to create healthy institutions… You cannot get a successful, healthy business model if you also don’t create a healthy environment. Business has a hard time succeeding in societies that fail.”
“What we’ve created here is an enormous force to lift people out of poverty,” Polman points out. “But at the same time, we haven’t figured out how to do that without incurring these enormous levels of government or private debt; overconsumption; and frankly, leaving too many people behind. You cannot say that the system properly works if there are over a billion people going to bed hungry.”
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