| ![]() |
Michael B. Polk is well schooled in his mission.
The president of Unilever Americas is charged with executing the global consumer packaged goods company’s brand-building strategies in about 25 countries. The region, valued at about $18 billion, represents about a third of Unilever’s $60 billion in annual sales.
The goal, as Polk explained it to SN, is to find the balance between “smart global scale and local intimacy.” Take Unilever’s $5 billion Knorr brand, for example. The global brand falls into the soup and meal-makers categories and is delivered worldwide as one brand with one voice and managed through Unilever’s brand development organization.
When the brand is sold into a market like Brazil, however, it is deployed with innovations relevant to the tastes and behaviors of the local market.
Employing efficient scale to penetrate local markets would not have been achieved easily prior to Unilever’s reengineering under the One Unilever organization.
“You disable your ability to move great ideas across borders very quickly and run the risk of not leveraging the scale of your R&D capabilities,” said Polk, in explaining the obstacles of operating under Unilever’s old decentralized model, where the Americas had 15 separate operating units. Two years after streamlining, Unilever is now one fully integrated company, with headquarters of the Americas region based in Englewood, N.J.
The unification process has paid off in accelerated growth. Unilever’s underlying sales were up 7.2% in the first quarter of 2008. Profitability rose 30 basis points during the period, despite significant increases in commodity costs.
On top of this, Unilever is returning value to its shareholders through a $2.2 billion share buyback. This momentum unlocked value in the Americas as well, where firstquarter underlying sales were up 6.4%, with sales up 4.3% in North America and 9.6% in Latin America.
As Polk charts his routes to market, he said an underlying goal is to execute in a way that will have a positive impact on society in areas of nutrition, hygiene for health, eco-innovation and sustainable packaging. “It’s really an important part of the company’s culture, and a critical enabler to actually make the kind of progress we’ve made in developing and emerging markets over the years,” he said.
Unilever’s D&E footprint is big and growing, now representing 44% of business.
“Given the shift in consumer purchasing power from the developed world to the developing world, Unilever is in a unique position with a more streamlined organization and its focused strategy to leverage two core assets: its geographical footprint and D&E, and a powerful portfolio of brands with leading category positions. This creates a real formula for growth in returns.”
Polk says his leadership challenge is to uphold the organization’s competitive sharpness to win in a changing world. He noted the emergence of aggressive local competition in markets like China, Russia and parts of Latin America. “It [competition] requires us to never be complacent with our position and to be constructively dissatisfied,” Polk said.
Unilever’s winning formula requires that the company continue to carefully align its business agenda with its retailers’ agenda.
“We have to make sure we find points of connection that work for us and also allow our customers to achieve their business goals. It will require a total enterprise approach to value creation,” said Polk.
Polk, who has nearly 25 years of experience in food distribution, said growing the business really excites him.
Growth will come with improved operating margins, Polk added. The goal is to move margins over 15% by 2010 — a challenge, given cost inflation.
“Aside from the personal growth that comes from meeting all kinds of people and being exposed to new cultures, the thing that makes me excited and think about the next challenge is building an organization that will be lasting and populated with people you have helped grow.”
Polk is a board member of the Retail Industry Leaders Association. RILA President Sandra Kennedy said Polk’s broadbased knowledge and experience in the industry have proved valuable to her board members.
“He is just so intelligent. He has a keen strategic view of the entire industry, and can bring clarity to certain issues, and sometimes a different point of view because of his global experience,” she said.
— CHRISTINA VEIDERS