08 Mar 2017
Interview with Dr Marijn Dekkers, Chairman of Unilever
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In a wide-ranging discussion, Dr Marijn Dekkers, recently appointed Chair at Unilever, talks to Virginia Bottomley about boards, globalisation, diversity, Jack Welch and much more
Virginia Bottomley: Dr Dekkers, you have become Chairman of one of the most prestigious global businesses, contacting the majority of households worldwide. What do you see as the real challenges that lie ahead?
Dr Marijn Dekkers: Well, Unilever is a wonderful company reaching two billion people around the world every day with their products, an amazing range of influence on making people’s lives better.
I think the challenge is to continue to innovate and continue to be very meaningful to consumers.
And from a competitive point of view to stay current in the context of industry trends; such as the trends for more local products, for either more premium or more affordable products, for more ‘natural’ products, or for new business models based on digitisation… the landscape keeps changing and you have to continue to adjust by having an innovative portfolio and by exploring alternative ways to reach consumers.
So that’s what we spend a lot of time on at board level from a strategy point of view.
VB: Do you think that the surprising electoral results of last year – Brexit in the UK and Trump in the US – is going to be a threat to global business?
MD: I think it is obvious there will be more protectionism in the world. It had already started before these two events. It has also to do with the fact that not everybody believes that they came out winning from globalisation. I remember in my time in the US, globalisation was the key word and we would close factories in upstate New York and open factories in Mexico and in China. That was terrific for the companies and shareholders but not always for the people who lost their jobs as a result of it. I think that erosion over the last 15, 20, 25 years has perhaps gone unnoticed to a lot of people in politics and in corporations and we are now paying the price for that to some extent.
VB: In those and other elections there was a suspicion of global business which must be hard when you’re the chairman of Unilever which is almost the poster child for corporate social responsibility and global development values.
MD: My general belief is that many corporations can do a better job on social responsibility than they are doing currently. I have just started at Unilever but that is a part of Unilever that I admire very much. Yes, it is of course about shareholder value but not just that, it is also about the value for the other stakeholders through the Unilever Sustainable Living Plan. I think there is an opportunity for more corporations to think and act that way, and it will help the reputation and credibility of large corporations which is indeed something that is under some pressure at the moment.
My general belief is that many corporations can do a better job on social responsibility than they are doing currently.
VB: As you know, there’s been a growing focus on boards – board culture, board behaviour, appointments. Do you feel that it’s with the board - with the Chair - that the integrity and values of the business lie?
MD: Yes, with the board of course, and also with management. I also think it differs from country to country. I spent the past seven years as CEO of Bayer in Germany and there the balance of the stakeholders is very strongly developed. I mean it’s almost frowned upon to use the words ‘shareholder value’ in Germany. Whereas in the US shareholder value was all that mattered, particularly in the 1990s. There is much more of a balance of stakeholders in Germany.
VB: Across Europe, there have been changes in board composition, structure and purpose. We have the Higgs report in the UK, Tabaksblat in the Netherlands which has just been revised and so on. Essentially there is common ground about the separation of the Chief Executive and the Chair. Yet in the US, which we all think of as the heart of capitalism, board structures are really very different with the combined CEO/Chair role in most cases and very large boards. How do you understand the difference and the relative benefits?
MD: I like the system here in the UK where the CEO and Chairman roles are split, and the Chairman is independent. I think that is the more balanced and responsible way to do governance. The CEO runs the company and should not also be the Chairman of the group of people that oversees him or her. In the US it is indeed often the case that Chairman and CEO roles are combined, but I must say that it feels unnatural to me. I didn’t have it in the US company I worked for as CEO, Thermo Fisher Scientific, where I had three different Chairmen in 10 years. I have read that currently, about 50 percent of the S&P500 companies have a separate Chairman and that half of those Chairmen are independent.
VB: A growing number; I’m told of new appointments they’re appointing either independent Chairmen or enhancing the authority of the lead independents.
MD: I do not think lead independent is a real and well-defined role. If you want a Lead Independent Director to play a meaningful role, make him or her Chairman, particularly if otherwise the job of CEO and Chairman is still combined in the same person.
VB: For you, who has been an extraordinarily successful CEO - very powerful, driving performance - to re-invent yourself as a Non-Executive/ Independent Chair, has this been difficult or is this part of your personality, the scientist in you?!
MD: I stopped being CEO by my own choice. So for me being CEO is not something that I continued to want to do but for whatever reason didn’t have the chance to do, and therefore the next best thing was to become Chairman. That’s not how it should work. I think it’s very important for a good Chairman to have nothing to prove anymore. Which gives you a tremendous peacefulness inside, to say ‘I’m here to be helpful but I’m not here to make a name for myself’ and that will also help the CEO who might say ‘OK, this person is useful and there is a governance aspect to it but there is not a competition’.
VB: And what’s the right relationship between the Chair and CEO do you think?
MD: Transparency and openness – and usually people who know how to get along. We talk a lot about governance structures, but of course, the structure is only a part of it, more important is that you have the right people in the roles. The right people will demonstrate the right behaviour and work in the appropriate way; it’s true for board members and it’s true in life.
Transparency and openness – and usually people who know how to get along.
VB: I believe you say that the Chair needs enough time for reflection, for tranquillity, for thought. Quite a lot of CEOs will pay lip service to that but it’s hard to understand how it works in practice. So how do you find space to reflect and re-establish your bearings?
MD: I think it’s what I’ve always done in my life. I have looked at a lot of people I admire or admired pieces of what they did, maybe not everything but certain pieces, almost like benchmarking certain capabilities of certain people and then trying to combine that into something that would work for me.
I am a global citizen, the ‘Flying Dutchman’ as they sometimes call me, and what is interesting is that it helps you reflect on why things are the way they are, particularly when you see them being different in different countries and cultures.
VB: What has changed, I imagine, during your corporate career is that there was a time when boards were very much full of people from the same background – people who knew each other. Increasingly, boards are like an orchestra of different people with different backgrounds.
MD: Yes, definitely. I think in the US what really gave everybody a wake-up call was the excesses we saw with companies like Enron and Tyco where at the beginning of the last decade we needed to take a hard look at how things could go so wrong. I think it made everyone much more aware that boards have a role to be truly independent and watch what is really going on in the company.
VB: Where did you learn your leadership style? You started with GE, the great Jack Welch with his ‘4 Es’ of leadership and so on. Did that experience shape your personality and leadership style?
MD: I think to a large extent, yes. I thought that 90 per cent of what GE was under Welch was fantastic, and 10 percent I hated.
VB: What was the 10 percent? MD: The disproportionate obsession with short-term shareholder value. Really, when you promise your shareholders ‘double-digit earnings growth every year’ you are admired for that but you then put so much pressure on the organisation. That simply doesn’t come naturally every year and the more and longer that went on, the stronger you felt the pressure in the short term. I don’t care what people say, but the long term will suffer as a result of it. If you have a wonderful child that’s multitalented and you constantly say ‘I want you to get an A for every test’, well you need to give the child space to get a B once in a while, and that was a situation we did not have.
VB: And the 90 percent?
MD: Incredible people development. I mean off the scale. I’ve never seen it anywhere else like that. And an enormous sense of being big and utilising it as an advantage. So, mask the disadvantages of being big by really leveraging size, by moving talent around, expanding an enormous global reach, cross fertilising R&D between different businesses, investing in bigger bets for instance by going very strongly into services or by doing a big acquisition, all things you can only do when you really use the critical mass that you have. I thought Welch a superstar in leveraging the size of GE. I am now an independent director at GE and I think GE continues to be very good at that. I do see a lot of large companies that have size but don’t really know how to leverage it and then it becomes more of a disadvantage. Big is less nimble and it tends to be expensive, so it has disadvantages to it as well.
VB: Jack Welch said, “my main job is developing talent, I am a gardener providing water and nourishment to our top 750 people, of course, I had to pull out a few weeds as well”.
MD: And he did and it was amazing. I was lucky enough to benefit from that early in my career. However, the story about ‘I fire 10 per cent every year’ is absolutely untrue. Welch is quoted on that a lot because he liked to have that reputation but it definitely didn’t happen, I can guarantee you that. It would not have made sense either.
VB: What are the key leadership values you look for in yourself and others?
MD: I actually only have one criterion when I interview people for jobs: would I want to work for this person myself? And if it’s yes, then...
VB: And the people you like to work for?
MD: Very open-minded, intelligent, coaching type of individuals.
I actually only have one criterion when I interview people for jobs: would I want to work for this person myself?
I have always needed a very long leash, I have nothing against having the leash but it needed to be long and I didn’t want it to be jerked every day. I will do my own motivation myself, thank you very much. So I was OK with living in a situation where there was a certain level of control but I didn’t want to feel the leash tightly around my neck every day.
My good bosses understood that about me and the few bad ones I had, it didn’t work out!
DR MARIJN DEKKERS’ CV
- Before becoming Chairman of Unilever in 2016, Dekkers was CEO of Bayer AG in Germany (2010- 2016) and CEO of Thermo Fisher Scientific Inc. in the USA (2002-2009).
- Having received a degree in chemistry from Radboud University in Nijmegen, the Netherlands, and a PhD in chemical engineering from the University of Eindhoven, Dekkers began his career in 1985 as a Research Scientist at General Electric in the US, gaining experience in various units of the company before joining AlliedSignal (subsequently Honeywell International) in 1995.
- In 2000, he became CEO at Boston-based Thermo Electron Corporation, a world leader in the manufacture of laboratory instruments (later renamed Thermo Fisher Scientific Inc.). In 2002 he became this company’s President and CEO.
- In 2010 Dekkers joined Bayer AG in Leverkusen, Germany, as CEO until his retirement in 2016. Bayer is a Life Sciences company active in the areas of human, animal and plant health.
- Dekkers also serves on the Board of Directors of General Electric.
- He holds both US and Dutch citizenship.
Watch the full interview.