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June 22, 2006

FRANCE: CEO eyes human cost of Unilever overhaul

Unilever CEO Patrick Cescau today spoke in frank terms about the human cost of the company’s strategic restructuring programme.

Unilever CEO Patrick Cescau today (22 June) spoke in frank terms about the human cost of the company’s strategic restructuring programme.

Outsourcing parts of the world’s third-largest CPG company’s human resources, IT and accounting functions led to predictable job losses. But changes to its corporate work ethos and management structure also drove an unprecedented exodus at senior management level, Cescau told delegates at the 50th World Food Business Summit in Paris.

Unilever’s international operations were traditionally headed up by intensely independent regional managers who had a high level of autonomy over their individual operation. Against the backdrop of a radical and ongoing restructuring initiative, the company has developed a more tightly integrated structure, which did not suit all managers, Cescau said.
“We needed people to be more accountable for delivery [and] to work in greater interdependence with central management,” he explained. “Changing behaviour is never easy but it was critical to our business. General managers used to working in a fiercely independent way cannot change their mindset overnight. Some have needed help to change their management style, and we revised our incentive system to encourage this.”

“We have acted with a combination of pace and sensitivity,” Cescau said, adding that nevertheless: “Almost half of our most senior regional managers have left the company in the last year.”

Cescau went on to express optimism that Unilever will see growth of 4-5%, up from the current growth rate of just under 3%, although he did not specify a time frame for this improvement.

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