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Provide Unilever with the platform to deliver sustainable growth

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Presentation on theme: "Provide Unilever with the platform to deliver sustainable growth"— Presentation transcript:


2 Provide Unilever with the platform to deliver sustainable growth
Path to Growth identifies what we will do to deliver on our promises to shareholders: Increase revenue growth to 5% per annum Increase operating margin from 10% to 15% by 2004 Deliver an incremental €2.7billion in operating profit by 2004 Provide Unilever with the platform to deliver sustainable growth Note: Figures do not include Bestfoods

3 Why do we need the Path to Growth?
Unilever Share Price Performance v Peer Group “Shadow” Unilever Share Price Performance v Peer Group “Shadow” Unilever Peer Group: Beiersdorf,Avon, Cadbury, Clorox, Coca Cola, Colgate, Danone, Eridania, Gillette, Heinz, Kao, Lion, L’Oreal, Nestle, P&G, Philip Morris, Reckitt Benckiser, Sara Lee, Shiseido, Pepsico Peer Group (Based on Quarterly Average Share prices) The Market is concerned about our ability to execute our strategy

4 Path to Growth -- 6 primary strategic thrusts

5 What is our strategy for the Path to Growth?

6 World Class Supply Chain
We aim to: Close the gap to world class in supply chain within three years By: Establishing a Global Buying programme Establishing a world class manufacturing programme Resulting in (approximately): 100 fewer manufacturing sites €€1.6 billion buying savings by end 2002 €€0.5 billion manufacturing savings per annum

7 “The only way to safeguard our position is to perform, to deliver, and to grow our business.”

8 Supply Chain - What does it take to succeed?
Depth and breadth of the Supply Chain Professional Skills An excellent overall understanding of the business, it’s processes and their linkages Business behaviours Outstanding performance Slide 15. What does it take to succeed in the Supply Chain? Secondly, in addition to the Competencies, it takes depth and breadth of the SC Professional skills acquired over time by working in a range of SC jobs (more on that in a few moments). However it takes more than just competencies and skills. It takes an overall understanding of the business and its processes and an ability to act not just as a SC professional, but also as a businessman. Business awareness gives insight to break existing paradigms and create growth opportunities. This is essential to progress to more senior levels in the SC. Lastly, but by no means least, to succeed in the SC takes a track record of outstanding performance at each level.

9 The Supply Chain Process Model
Plan Source Make Deliver Supply Chain Mission & Strategy Brand Development Customer Development Suppliers Consumers & Customers Information Management Human Resource Management Quality & Business Excellence Finance Management Safety, Health & Environment Technology Management

10 Supply Chain - the Heart of Operations
Plan/Source Plan/Make Plan/Deliver Planning links the processes together Slide 11. The Heart of operations Each SC sub-process requires planning. Planning also links the sub-processes together. It is therefore critical to optimisation of SC performance. Because It guides our everyday life working in the SC requires a thorough knowledge of the planning process.

11 Driving Value Creation in the Supply Chain
‘Beating the Fade’: continuous innovation and cost savings Growth through: making new products available improved distribution better customer service Increased margins through: cost savings along the supply chain overhead cost reduction reducing complexity Capital efficiency improvements: minimising investment in plant & equipment and inventories These elements together contribute more than 50% of Unilever’s total Value Creation

12 Organisational Development
Business has moved, and continues to move, towards process management Emergence of Supply Chain process roles A career in the Supply Chain requires development of breadth and depth of skills, Leadership competencies, and experience Slide 5. Organisational Developments Before we focus on career management, it is worth while spending a few minutes to review the organisational developments against which any discussion about careers has to take place. The move towards process management, the emergence of single integrated supply chain structures, regional sourcing and e-commerce have changed and enhanced the role of the Supply Chain. To equip ourselves for this new role we must build our professionalism to higher levels.

13 What do Supply Chain people in Unilever do?
Roles in different parts of the organisation factories regional supply chains business groups corporate centre Roles: with strategic focus in a more operational environment, Roles in various parts of the supply chain: Plan–Source–Make–Deliver Roles which focus on the multi-local aspects of the business at a national or regional level the multinational aspects Roles in related professions, e.g. R&D, Customer Management Roles in QA, SHE and Technical Management Slide 13. What do Supply Chain people in Unilever do? SC managers work in a wide variety of roles. They cover both operational and strategic activities. They can be in one of the main sub-processes (Plan, Source, Make or Deliver) or in enabling processes such as QA, Technology and SHE. The trend in is toward integrated management of the SC in which SC managers deliver value by leveraging their professional capabilities and business understanding. The content and focus of SC roles vary according to specific organisational and business environments. SC managers can expect to (and should) undertake a number of different types of role during their career.

14 Building Successful Careers Focuses On:
Processes and tools used in career development Key career building blocks Career phases The need for breadth and depth of skills and experience The impact of each individual’s potential The importance of tactical and strategic career planning The need for a global perspective Planning life and career Slide 7. Building successful careers The general booklet “Building Successful Careers” focuses on the eight major components of career management. Some of these are processes and tools; some are guidance about the general requirements the business has set down; and some are personal to each individual.

15 Building Careers - Key Principles
Professional Skills Experience Performance Leadership Competencies Successful careers are based on outstanding performance founded on skills, competencies and experience

16 Building Careers - Key Principles
Professional Skills Experience Performance Leadership Competencies Successful careers are based on outstanding performance founded on skills, competencies and experience

17 The Leadership Growth Competencies

18 Focus on Growth (in every sense)

19 What is the Leadership Growth Profile?
It is : A leading edge competency model that focuses on driving growth throughout the business A tool for development and assessment of performance By helping our leaders grow, we will grow our business Applicable to everyone at WL2 and above

20 Why we need to develop Competencies?
SUPERIOR JOB PERFORMANCE Competencies Knowledge & Skills Personal characteristics (values, traits, motives) shaping HOW the job is undertaken Measured by clearly observable behaviour Transferable knowledge and abilities (professional and general) to do WHAT is required by the job Measured by demonstrated capability

21 What are Competencies? “ … underlying characteristics that are directly related to superior performance in a given role” skills - what you know how to do e.g. make an effective presentation knowledge - what you know e.g. theories of effective presentation self image - how you see yourself e.g. public speaker values - what you think is important e.g. achieving excellence traits - relatively enduring characteristics e.g. self-control ‘big picture’ thinking motives - the unconscious factors that drive behaviour; they are intrinsically satisfying and rewarding e.g. achievement

22 The Iceberg Model A competency: any characteristic of a person that differentiates outstanding from more typical performance in a given job, role, organization or culture. } Skill Knowledge Values Self-Image Traits Motives } Acquired capability Necessary but not sufficient Distinguish effective performance Deeper seated traits and motives

23 Competencies are: observable and measurable
behavioural characteristics that can be developed based on the business needs of today and tomorrow factors which drive superior performance in a given job

24 How was the LGP developed?
Step 1: Was developed by a rigorous research process: Assessment of Unilever’s business context, the challenges facing leaders and the capabilities needed to achieve growth In-depth research of 39 Unilever ‘growth’ leaders Interviews and feedback from colleagues Comparison of the Unilever ‘growth’ leadership characteristics to a world-class benchmark sample Large international organisations Achieved substantial growth in own sectors Result: LGP was rolled out to WL6 and 5 in 2000

25 How was the LGP developed?
Step 2: Focus groups and interviews with WL2, 3 and 4 in 14 countries around the world Tested relevance and made relevant adjustments Result: Now rolling out to all WL2+ managers across Unilever

26 How were the Criteria Established?
Original Research Compared and Contrasted Two Groups Current Superior Leaders Current Outstanding Leaders “Baseline” Competencies Both groups show “Distinguishing” Competencies Only outstanding show

27 How were the External Benchmarks used?
Compared both groups to competencies required to meet the future strategy and against the external benchmark population Current Superior Leaders Current Outstanding Leaders External benchmark of ‘world class’ leaders “Baseline” Competencies “Distinguishing” Competencies Potential Vulnerabilities Even the best need to show more

28 What makes a world-class leader of growth?
World-class leaders of growth: Driven by bigger ambition and drive for step change Generate and encourage ‘big’ thinking Are highly ‘street smart’ and savvy Think and act over a longer term perspective Energise others for significant change Demonstrate a greater focus on individuals - developing, empowering and holding them accountable Use highly effective influencing strategies to gain support: they know how to orchestrate the organisation - colleagues, bosses, their teams How does Unilever measure up? Although the best of the Unilever sample demonstrates these behaviours and creates growth orientated climates, we are often still more ‘controllers’ than ‘enablers’ in our leadership style. We are good, but we know we can be better

29 How is the LGP different?
Directly related to our current business agenda - Growth Externally benchmarked against the best One set of competencies for all levels Creates a focus on development of outstanding leaders at every level It is easily modified to support future new business goals As a result, LGP will replace the ‘Effective Unilever Manager’ competencies

30 Leadership Growth Competencies
Supply Chain - What does it take to succeed? Leadership Growth Competencies Builds Commitment to Growth Strategic Influencing Team Commitment Team Leadership Possesses the intellectual power to determine direction Ensures that direction is market driven Drives for Growth Seizing the Future Change Catalyst Developing Self & Others Holding People -Accountable Empowering Others Clarity of Purpose Practical Creativity Objective Analytical Power Market Orientation Achieves through integrity, teamwork and learning Self Confident Integrity Team Commitment Learning from Experience Delivers through people Acts decisively to improve performance Creates a Growth Vision Passion for Growth Breakthrough Thinking Organisational Awareness Leading Others Developing Others Influencing Others Entrepreneurial Drive

31 LGP - The Levels Four levels: Example: Passion for Growth Foundational
Developing Growth World Class Example: Passion for Growth Foundation Level Developing Level Growth Level World Class Level Are highly motivated to achieve their personal targets in order to contribute to the sustainable profitable growth of the business Are ambitious for excellence and constantly search for opportunities to improve the business Set challenging growth goals for themselves and others and put into place plans to achieve these Take significant entrepreneurial action and ask “what is possible?” to ensure growth opportunities are realised

32 LGP - The Levels (continued…)
Behaviours needed to demonstrate World Class are very stretching This reflects our business targets We can’t have significant growth without an incremental shift in behaviour But….. These behaviours are not beyond our capabilities We need to make our people development a higher priority To help people assess their performance against the profile, target criteria have been established for each work level

33 Passion for Growth Does this person DEMONSTRATE DRIVE BEYOND EXPECTATION TO DELIVER outstanding results? Outstanding individuals radiate a Passion for Growth, the personal drive that enables individuals to go the extra mile in delivering excellent performance. They recognise that everyone has a contribution to make to ensure that Unilever achieves its growth objectives. Outstanding individuals constantly push the boundaries of excellent business, ask big questions about what is possible and then take significant entrepreneurial action over time to expand the horizons of the business. Success is the delivery of sustainable profitable growth. . Foundation Level Developing Level Growth Level World Class Level Are highly motivated to achieve their personal targets in order to contribute to the sustainable profitable growth of the business Focus on business improvement and are ambitious for excellence, constantly search for opportunities to improve the business Set challenging growth goals for themselves and others and put into place plans to achieve these Take significant entrepreneurial action, and ask “what is possible?” to ensure growth opportunities are realised Ambitious to hit set targets and standards Deliver on commitments made to others Persist in overcoming obstacles to success Take full responsibility for delivering their contribution to the business Measure performance against internal and external benchmarks Make specific changes to improve performance (e.g. re-engineer processes to be faster, more efficient) Focus on raising quality and customer and consumer satisfaction Stimulate and encourage others to bring about performance improvement for the business Create stretching but achievable goals to align own activities with growth initiatives Aim to find and realise new growth opportunities Align own activities and goals with growth initiatives Aim for performance excellence through own efforts Stimulate growth by bringing about step change improvements Aim to make the impossible possible Entrepreneurially commit significant investments to reap major rewards Defy conventional wisdom and internal opposition to achieve major growth Create new markets by exploiting growth opportunities Obsess with growth and focus on delivering new ways to gain competitive advantage Negative Indicators: Too busy dealing with immediate, urgent issues to look for new growth opportunities Settle for the status quo - take no action to improve mediocre performance Easily side-tracked from important growth goals Unconcerned about missing deadlines or failing to meet business objectives Do not take responsibility for contributing to growth objectives Links with: Organisational Awareness

34 No negative indicators
LGP Guideline criteria for work levels WL3 WL4 WL5 WL6 WL2 Two in each cluster at Growth including one of Seizing the Future and Change Catalyst and one other from the same cluster No negative indicators Most competencies at Developing level. At least one competency in each cluster at Growth level Meets WL4 target and has one World Class competency in each of two clusters Meets WL4 target and has at least one World Class competency in each cluster More competencies at Developing level than at Foundation

35 Using the LGP and Competencies
Coaching & Mentoring PDP/ Development Talent Management Leadership Growth Profile Ranking Reward for Growth Listing

36 Where has LGP been used so far?
Already used for: Assessment of all WL5 and WL6 Personal development planning for WL5/6 Executive selection One element of WL4 assessment in Unilever/Bestfoods merger

37 Going Forward - Future Uses of LGP
The LGP will be used in: PDP - in all organisations for WL2 and above by 2002/2003 PDP cycle Individual performance and capability will be assessed against the LGP competencies based on previous years’ data Self-assessment and personal development planning Listing Ranking for WL4 (others may follow) Assessment, selection and recruitment of all posts at Graduate level and above

38 Next Steps for you Access the ‘How good can I be?’ document on the HR website [address] to understand the model, the competencies within it and how to use the model Study the target criteria for your role and work level in the document Consider your strengths and development needs against the model Work with your manager and your employees (either in the PDP process or independently) to identify critical gaps to close - and build and implement an action plan

39 Building Careers - Key Principles
Professional Skills Experience Performance Leadership Competencies Successful careers are based on outstanding performance founded on skills, competencies and experience

40 Supply Chain Professional Skills
Job Skills Profile Abilities to do the job well now + future. Person Skills Profile My current abilities. GAP ANALYSIS Personal Development Plan Difference

41 The New Skills Framework for Supply Chain
Supply Intelligence & Strategy Development Contract Agreement/Arrangement & Management Integrating Supplier Value into the Business Driving Production Performance Improvement Influencing & Implementing Product & Process Innovation Maintenance & Project Engineering Core 2. Integrated Supply Chain Modelling and Design 1. Extended Supply Chain Strategy Development & Deployment Make Source 3. Supplier (& Contractor) Relationship 4. Developing & Implementing /Economic Management Supply Chain Innovation 6. Managing Quality, Safety (& Environment) 5. Formulation, Process & Packaging Knowledge Plan 7. Optimising Supply Chain Operations Performance Customer Service Development & Management Warehousing and Distribution Management Channel Logistics Development Integrated/Collaborative Supply Chain Planning Operational Planning & Forecasting Materials Management Key General Business Economics Negotiation & Influencing Supporting Sustainable Development Using Information Technology People Management Project Management (HR) Employee Relations R & D Development Skills Deliver

42 Building a Supply Chain career Learn the Trade
Career Building Blocks Experience - WL2 at least 2 of the 4 Supply Chain sub-processes (Plan, Source, Make, Deliver). (especially those with Finance/Business backgrounds): Technology as a Supply Chain enabler.

43 Building a Supply Chain career Act as a Businessman
Career Building Blocks Experience - WL3 As a Supply Chain leader at WL3 you will need to gain experience in: managing in an integrated SC leading a SC sub-process at regional level

44 Building a Supply Chain career Strategy into Action
Career Building Blocks Experience - WL4 As a Supply Chain Director at WL4 you will need to gain experience in: operational management of integrated supply chains leading strategic development of Supply Chain or sub- processes at regional/international level (BG/ Corporate/Category)

45 The Supply Chain Career Platform: My Professional Development
There are Supply Chain jobs at every level in Unilever Progress to senior levels by moving through challenging jobs. Unique experience of working in positions of different types Work alongside other business processes, including: Financial Management Customer Development Brand Development. Slide 20. Your Professional development There are SC jobs at every level in Unilever and therefore there is every opportunity to progress to senior levels by moving through challenging jobs. The SC also offers the opportunity to work in many different types of environments and increasingly with other business processes such as Customer Management and Brand Development. And some managers, given their breadth of experience in the SC and General skills, will use their background as a basis for moving into “unit general management”, e.g. a company chairman type of role.

46 The bottom line: Unilever is a Meritocracy
Whatever the career route, Supply Chain managers can be assured that: Unilever’s focus on performance, and the use of objective means by which to assess skills, experience, competencies and potential, will lead the best managers to reach the most senior levels in the business.

47 Slide 22. What do you do next.
Use PDP to develop skills and competencies Use each career step as a learning experience Be realistic about your own potential Deliver outstanding performance Slide 22. What do you do next. These are the four guiding principles which you should keep in mind to give you the best chance of maximising your own potential. * use PDP to develop skills and competencies * use each career step as a learning experience * be realistic about your own potential, and * deliver outstanding performance. Finally: If you deliver your targets you will always get noticed. And if you consistently meet tough targets you can be assured that your career will prosper.

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