enewing Unilever: Transformation and Tradition
Geoffrey Jones, Oxford University Press, 2005, 447 pages, £30.00 (paper £14.99).
Unilever is a sprawling business, difficult to describe in 350 pages let alone interpret, and Professor Jones makes a good fist of dealing with the complexity, force-fitting reality into neat chapters without much distortion. But a more challenging framework might, rather, have considered why a top-ten company fifty years ago now languishes as Fortune’s Global 81st. True, the world economy has changed radically since the ‘50s, but managers and shareholders alike should surely be concerned that Unilever has been overtaken by direct competitors, like P & G and Nestlé, both on sales and, dramatically, on profits.
Where did Unilever go wrong? First, vertical integration, a smart idea in the early 1900s, had become an anachronism by the 1950s. Increasing industrial sophistication has made domination of disparate industries impossible. Second, diversification caused management skills to be too- thinly and too-widely spread. Third, industrial proliferation produced a wide range of candidates for the top jobs and experience in branded everyday products – Unilever’s core skill – was no longer a pre-requisite for highest office. These conclusions are in the text, but for understandable reasons, not underlined.
The book deals well with the convoluted organisation and the description of what has made Unilever a company of very individual character is admirable. But some reality check is needed, and for me the description of the development of Lever Europe provides this. ‘Coordination’ (a misleading label for executive authority) was introduced in the 1960s as a way of running Unilever on an industry basis rather than on geography. Lever Europe, twenty-five years later, replaced sixteen national companies with a single European company. It was not a much-mooted idea as Professor Jones suggests, nor a natural development of the earlier ‘Coordination’ organisations, all of which had extended executive responsibility across geographical areas. If Professor Jones can get this wrong, what else cannot be relied on?
Since the company’s formation, Unilever’s Chief Executive has been the three-man Special Committee, and their documented activity is the primary source for Professor Jones’ account: so the book is essentially their view of what happened between 1965 and 1990. It is sponsored history and Professor Jones’ principal task has been to satisfy the client, today’s senior Unilever management. Thus the book ends relatively happily, with the Epilogue pointing to a rosy new dawn, thanks to a narrowed focus and, of course, a politically-correct organisation. Has the baby been thrown out with the bathwater?
Michael Dowdall