by John Gallant

How IT Innovation and Mobility Empower Unilever

Aug 21, 201221 mins
CIOInnovationIT Leadership

Rod Hefford, CIO for Global Customer Development and Supply Chain at Unilever, discusses they key goals of their Compass strategy, how IT is organized to drive innovation globally. Hefford also explains how mobility is empowering Unilever to respond to changing market conditions and customer needs, and is fostering a virtuous cycle of improvement.

If you’re a CIO worried about enabling your company’s expansion and success in emerging markets or if you’re trying to capitalize on cloud and mobile technologies to improve speed to market and shorten cycle times, you’d do well to make the acquaintance of Rod Hefford. Hefford is CIO for Global Customer Development and Supply Chain at Unilever, the joint British-Dutch company whose 400-plus products are used daily by some 2 billion consumers in nearly 200 countries.

Unilever CIO Rod Hefford

In this installment of the IDG Enterprise CIO Interview Series, Hefford talked to Chief Content Officer John Gallant about how IT at Unilever is organized to drive innovation globally — leveraging tech talent around the world — and helping improve execution in local markets from Brazil and India to Europe and the U.S. He also explains how mobility is empowering ‘feet on the street’ everywhere to respond to changing market conditions and customer needs, and fostering a virtuous cycle of improvement.

Hefford is a member of the CIO Executive Council — IDG Enterprise’s peer-based global community of leading CIOs. For more information on the Council, click here.

Tech Titans Talk: The IDG Enterprise Interview Series

Q: Let’s start by talking about how Unilever is changing today? What are some of the big corporate initiatives and key goals for the company?

A: The strategy of the company, which is called “Compass”, was introduced in 2010 by our CEO, Paul Polman. The Compass is our guide to growth. But we need to grow while making the world a better place — in a sustainable way. With our portfolio of brands, presence in emerging markets and long-standing commitment to shared value creation that works for everybody – consumers, stakeholders, communities, the company — we believe we are well placed to deliver on this ambition. This strategy has Unilever doubling in size while reducing our environmental impact by 2020. It’s a significant undertaking, but one which seems to have really captured the imagination and has full support within Unilever. In addition, it has really resonated well with many of our key stakeholders. Certainly, I find it a very energizing vision.

Q: What are some of the key goals of the Compass strategy? What are some of the things that are wrapped up in that larger mission?

A: Our Compass strategy has four components: Winning with brands and innovation; winning in the marketplace; winning through continuous improvements; and Winning with People.

Unilever already has strong credentials in the corporate social responsibility area, whether it’s water management or food sustainability, among many others. We also have a history of being able to be relied on during a crisis — for example, during the Japanese earthquake and tsunami or the Thailand-Philippines floods; so we have a good track record of involvement in broader business issues.

Just over a year ago, we announced the Unilever Sustainable Living Plan as a core enabler to achieving our sustainability goals and growing our business. It is about developing new ways of doing business which will ensure that our growth does not come at the expense of the world’s diminishing natural resources.

Plans to halve the environmental footprint of our products, help 1 billion people improve their health and well-being and source 100 percent of our agricultural raw materials sustainably, are among over 50 social, economic and environmental targets we have set for both ourselves and for our suppliers and consumers.

The sustainability component of the Unilever strategy has, in some ways, the most unknown components, but it is a truly energizing piece of the vision that fits well with the culture of Unilever.

Q: Also, that’s a pretty aggressive growth goal, doubling in that time period.

A: In line with the strategy, the results are coming. If you look at recent quarters, we’ve shown quarter-on-quarter of improving results. In the first quarter of this year we had an underlying sales growth of over eight percent and strong performances in really key markets for us — India, Indonesia, Brazil and so on. We’re doing very well and a lot of it is about in-market execution. Even in very difficult markets like Europe, we’ve shown that we can grow. The past quarter in particular, Europe was back to growth, despite the fact that it’s a very challenging economic environment. It was picked up in a recent Economist article, where we were compared very favorably to a couple of our competitors. So the outside world is starting to notice our execution.

Q: What does that in-market execution mean? Can you define that?

A: It’s about having a strong direction around how we’re going to operate in the [local] market. We changed our operating model, moving from regional bases to eight clusters worldwide. The functions themselves are coming up with very clear strategies, very clear visions about how Unilever should approach certain markets. In particular, customer development and supply chain, my own area, have very strong visions around how they wanted to execute in the market.

Q: Rod, let’s shift into your IT organization. What are the key ways in which the IT organization that you lead is supporting Compass?

A: IT has a central role in supporting Compass. IT has two components in Unilever: IT Innovation, focusing on developing the technology enabled capabilities the business needs, and IT Services, part of Enterprise Support, our global Business Services organization, focused on the actual delivery of IT. They work hand in hand and we have a joint strategy, aimed at providing IT that supports Unilever in better serving our consumers and customers through improved speed, scale and quality.

IT innovation has four main themes. Digitize brands and the consumer relationship, digitize go-to-market, digitize the value chain and digitize how we work. As you can see, there’s a very heavy emphasis there on external-facing capability delivery, which is a very important thing if you consider that Unilever is in excess of 55 percent focused on developing in emerging markets and our products are used by 2 billion people every day. Entirely consistent with that is the constant challenge of providing capability and services to a business that has a focus on shoppers who rely on value from our products and they’re not willing to pay a cent, or for that matter, a rupee, more than is absolutely necessary. That forces us to look to new models for IT-enabled capability and to drive the ones we have to new levels of effectiveness.

Q: So let’s dig in a little bit deeper on that. I know that you’ve made some changes to support those business goals and the focus on innovation and expanding global capabilities. Talk about how the IT organization is changing to do all these things.

A: IT in Unilever has been on a journey to better leverage our scale for quite some time. Particularly in the infrastructure and application services area, we’ve been operating as a global function for many years. In capability provision — application development and delivery — we’ve been working on the deployment of regional ERPs, but that journey is coming to an end. By the end of 2013, we’ll be down to four major instances. So in line with the business focus of trying to drive more global ways of working, we’ve been moving to a more global IT innovation and services structure — hence two global organizations for IT Innovation and enterprise support of which IT services are part. Partnering for customer development and global supply chain, my role, is an example. And I have peers looking after marketing and R&D globally, as well as finance and HR globally. Supporting those business partnering and innovation roles, we have two global centers of expertise; One predominately SAP focused — the core ERP or the core business model capability — and another on information.

The journey has been exciting because we are genuinely starting to deliver global capabilities and to be able to structure a portfolio to meet the ambitions of the functions. At the same time we’ve had to change our internal ways of working to deliver and that has been a great challenge. The thing is we’ve had to move very fast and we’ve had to do it without disrupting [our] day-to-day service provision. Given the high business growth rates, we do not really have very much room for error.

Q: So let’s talk about innovation, because I know that’s such a key focus for you, and I want to explore the creation of your IT innovation group. What is that group? Why was it created? What are the goals?

A: The IT innovation group is very much about putting a focus on capability delivery into the business and we have an aligned enterprise support organization that is very much about continuous improvement in service and cost. Across enterprise support and IT innovation, we need to make sure that we’ve got the right people in the right places to exploit a number of the technical advances and new ways of working that the business wants to drive.

Q: Can you give me an example, Rod, of something that has come out of that group or something the group is working on?

A: There are a number of examples, but in the customer development space, we had a high focus on mobility. In the customer development area, we had more than 50,000 feet on the street. The mobility piece is about making sure that our people who are out there executing in the market, day in and day out, have the best possible tools at their disposal. It’s an exciting place from a technology point of view, as well, because if you look at the development of the devices — I mean Apple’s iPad being the most obvious example — and the capability to deliver on those and connectivity through to core ERP infrastructure, and also to things like external sources of information, they can make a fantastically powerful tool for people who need to execute in the market.

Q: That makes sense. So let’s talk about this global market and global capabilities. Can you go into a little bit more detail about what IT is focused on to help Unilever capture the growth opportunities in those fast growing and emerging markets?

A: I think it’s probably easiest if I talk about customer development, because they’re our interface into the market. And as I said, they have a strategy which is a very strong vision for what customer development’s role could be within the company. And route-to- market for Unilever is very diverse, so the strategy accommodates requirements of many countries and many sets of local conditions. It’s a pleasure to work with a function which is so clear about what it wants to achieve and is well aligned to execute.

Our portfolio contains a number of what we’ve called the “IT Big Bets.” We’re making substantial investments in capability to move the dial in execution. For example, we have a framework which is around ensuring Unilever products are presented in the right place at the right time with the right shopper proposition, and I think this is absolutely first class. If I go back to my mobility point, if we can equip the front line with technology to allow them to execute, if we can beef up our information infrastructure to allow us to analyze and learn and create a short cycle time and then feed those learnings back into the market, then I think we are going to have an extraordinarily powerful, repeatable model which can be replicated across geographies.

Q: Is this all part of your CD 2015 Customer Development Strategy?

A: CD 2015 is what Customer Development believes is their contribution to Compass. So for them, they recognize that with the number of people, whether they’re Unilever people or whether they’re third parties we have an extraordinary number, almost an army of people that can go out and help to grow Unilever’s business every day. CD 2015 is very much about giving them a vision of the future and helping them understand the areas where we should focus. Whether that’s around how we will segment the market into channels and geographies to focus on, or how we will execute in different market types, whether they’re modern trade or traditional trade, the CD 2015 vision gives us the focus to ensure that the people in the market are clear on what good execution looks like.

Q: That makes perfect sense. And I know within that initiative, the IT team is really helping lead the way with a couple of things that a lot of our CIOs are focused on — cloud and mobile capabilities. Can you talk a little bit more about how you’re using cloud, mobile, even social, to empower that initiative?

A: As I’ve said, mobility is an absolutely huge opportunity for us. We’ve got an army of people in the market every day, giving them the right tools to execute for customers and shoppers is a key component of the strategy. And for us, it’s not just about having devices in the market, it’s about making sure that we also have the information flows so that we can communicate efficiently and effectively with our people in the market, and they can communicate well with operations back in the center, so that we create a really strong feedback loop which allows us to execute and learn day in, day out.

For cloud, whether it’s cloud or Internet hosted, we have a number of areas where we’re working on trying to utilize the scalability and the flexibility of the cloud to be able to move very quickly. So in some circumstances we’ve used the cloud to do some very innovative things where if we’d done them internally, they may have taken some time to set up or they may have been too expensive for just a trial. Also we may host on the cloud because with interactions with our business partners it may not be appropriate for Unilever to host internally.

Q: You talked about moving away from a regionally focused application strategy to a global application portfolio, which seems like a very significant undertaking. Talk a little bit more about that and the goals behind that.

A: Yeah, it is a big undertaking. But as I said earlier, we have the advantage that we’re quite well along in our journey to get to a fairly limited number of underlying ERP systems. There are some very important enablers for us to go on that journey. One is that we’ve set up a global project and portfolio management office, and that allows us to really understand what’s going on. It helps us really understand which innovations are going to land in which geography in which sequence. It helps us to look at overlaps and potentially competing priorities, and helps us understand the portfolio of business benefits that we’re trying to deliver into individual countries. It allows us to really understand from an end-to-end perspective how we can best leverage Unilever’s investment into IT.

Q: So much of this is around driving the business and being a great business partner. That’s obviously critical for Unilever with all of the companies and organizations and people that you work with around the world. Talk specifically about how you are enabling that kind of partnering. How do you work with the business unit leaders and how do you make them understand the capabilities and the tools that you can bring to bear in enabling these changes?

A: Well, I’m not sure that there is anything new here really. I think the basics of transparency and accountability are the things that breed trust and promote a performance culture. I’m a strong believer in good governance and strong internal processes, and the governance that we’ve put in place contains all of the global functional leaders. The project and portfolio management office has been a huge step forward in allowing us to understand how IT can add value to what the business is trying to do. From a business partnering point of view, it really is about understanding what the business is trying to achieve. If you can develop that relationship, develop the transparency, develop the trust, then you actually begin to feel what it is that the business is trying to achieve. And if that’s clear, then I think building the IT portfolio behind it is relatively straightforward.

Q: Let’s take that up even one more level. I know we talked about innovation. Talk about your role specifically in innovation and how your role has changed to focus more on that. What does that mean for the way you work with business partners?

A: Well, my previous role was about running IT for Unilever’s biggest region, which is Asia, Africa and Central and Eastern Europe, and there we are about to finish implementing SAP across the whole of the region. In parallel, we developed a region-wide IT capability agenda for customer development. When we started to take a more global view on IT innovation and when the functions started to develop their own global strategies, it made sense to take an end-to-end view of the extended supply chain, everything from executing contracts or the purchase of packaging materials, through to the presentation of our products on the shelf.

When I was asked to take on the role to support both customer development and supply chain, it was a logical extension of the innovation journey that I had started in my previous role. There’s no question it’s a big role, but having clear strategies and good supporting processes makes a big difference. The differentiating factor is the relationships into the business and having a strong team working for me. One of the benefits I have is also that I have a background in working in both developed and developing and emerging markets, and that means that the way Unilever wants to develop its, for example, manufacturing strategy or its go-to-market strategy, I can contribute to how that could be put together.

Q: That makes sense. Now obviously all of this change and all of the new things that you’re focused on puts pressure on in terms of key talents and key capabilities within the IT department. What kinds of new roles are emerging within the organization and how are you trying to capture the value of talent that you have around the world?

A: Taking the first part of the question, I mean clearly, new roles in the organization come about as Unilever’s business evolves and indeed as the market evolves. For example, e-commerce is an absolute powerhouse development in the world at the moment, and it’s a huge opportunity for consumer goods companies. And whether e-commerce is business-to-business or business-to-shopper or consumer, it’s really important that we get people who understand how that kind of relationship between two entities can develop. There are an increasing number of roles in my group where we’re treating e-commerce as fundamental to the way of doing business with our customers and suppliers, and we see it as a route to market in its own right.

Outside of my area, there are huge opportunities in the marketing area, as Unilever starts to really understand how to exploit digital assets. Speaking about talent, I think my time in a variety markets has given me a real appreciation of the depth of talent available to Unilever. Our long heritage in many markets makes Unilever an employer of choice in many parts of the world. And if we align that to a strong graduate development program, it’s quite an attractive proposition for many people, in particularly developing and emerging markets, to join Unilever and to develop their careers. And after that, there’s such a variety of roles available inside the organization that we can genuinely offer fantastic careers for people. And what is nice actually, is I’ve seen people recruited in as graduate trainees or as young direct entries and seen them evolve as individuals and leaders over time. It’s very satisfying to be part of their personal journeys.

Q: What advice do you have for those folks who are coming up through the IT ranks who may ultimately want to have your job or whatever the CIO role evolves into?

A: I don’t think that my job as it is now will remain the same into the future. I think the rate at which technology is moving and the rate at which technology is being exploited, both internal and external to Unilever, a lot of jobs are going to evolve rapidly over time. The roles that I had when I was a junior IT person in Unilever, most of those don’t exist anymore. They’ve been replaced by new roles, which young people can cut their teeth on. But my advice for them is to be open-minded. There are fantastic opportunities to learn throughout big organizations and small organizations, so be proactive and be open to opportunities.

Q: Sticking on the advice theme, what advice do you have for other CIOs who are trying to move away from that day-to-day operational focus and really be a driver of change and innovation in their organization?

A: I think I’d go back to something that I said earlier. You must know and be aligned to what the business is trying to achieve. And it sounds easy, but it really isn’t. I mean businesses are constantly evolving and they’re reacting to changes in the market, customers and shopper habits. If you’re not part of that, you’re not part of what your business is going through, what your business partners are going through, it’s very hard to build the trust and the relationships with them to be able to then be effective, with them as part of the business. And added to that I would say it’s about teamwork and professional processes. If the business people and the IT people don’t feel they’re pursuing the same goals and have a clear understanding of how the goals are going to be achieved, then it’s next to impossible. I guess my summary point is — there’s nothing that gains credibility and trust like the ability to deliver. So track record and delivery are everything really.

Q: What keeps you up at night as a CIO? What do you worry about most? And the flip side of that, what excites you most as a CIO today?

A: Well, the excitement one is easy. There’s a fantastic opportunity to make a real difference, both internal to the company and in the broader world. Unilever IT can contribute at all levels on a major scale. There’s excitement that comes from seeing a vision and then from getting it done. Keeping me up at night? Well, it’s a big responsibility to be part of the Compass journey, and I kind of think at the end of some days — what could I have done today to have made something happen more quickly or more effectively? It’s a constant journey to ensure that we’re delivering absolutely the maximum that we can.

Q: What other advice do you have in terms of being successful in this day and age as a CIO?

A: We’ve talked a lot about the relationships into the business, so I won’t go back over that. I’ve also talked about professional processes and teamwork. But one other thing is to be clear in your own mind what you think is going to make a difference and make the case for it. I think it’s quite easy to be buffeted by what’s going on in the day to day, but a good clear strategy, a good clear sense of those things that are going to move the dial, backed up with some rigor in business case development and resourcing makes a difference. These are quite old-fashioned skills, but they’re as relevant today as they’ve ever been because there’s such a dynamic world around us. So if you can be clear and you can back it up with some good strong analysis, then I think that you’re going to deliver the majority of times.

Q: Looking out — let’s say we look out a year from now – how do you expect your IT organization to be different? How will another year along the road of the Compass strategy, another year of driving these innovations, how will your group look different?

A: I think knowing the functional strategies for customer development and supply chain and knowing that Unilever wants to put even more emphasis on in-market execution, I can only see my team getting busier! It’s a challenging and very exciting place to be.