Alan (Jope) the 56 year old CEO of Unilever (eur 52 Bln in sales, 155k workforce and 2.5 billion Clients in 190 countries) works remote from his home for 3 weeks now.
CEO’s remote working guide - study case Unilever:
(reading time less then 1 minute):
Alan believes that NOW, he needs to look after 1) people, 2) production/supply, 3) demand and 4) cash
People:
CEO tries to safeguard their 155k workforce.
60k office workers work remote,
Sales team contact customers virtually.
Factories are operating with extraordinary measures to prevent infections.
Unilever will maintain pay levels up to 3 months to those hired but also to contractors (cleaning, catering)
Production:
They used China and Italy infection waves as laboratories into dealing with lockdowns and deep cleaning of factories.
The firm is not exposed to cross border imports. Almost all products are using ingredients sourced in country
Biggest bottleneck is truck drivers, who are deemed as critical
Demand:
Panic buying forced Unilever to switch from monthly forecasts into weekly ones.
Sales are done through supermarkets (in developed world) or from neighborhood shops (in poorer countries).
Online is currently the new normal in both type of countries, but is “totally overwhelmed”
Cash:
Unilever is in moderate shape with cash = 2 times EBITDA. Is the free cashflow* that is important now.
After 2007-2008 crises, they increased cash by asking for shorter payment terms from Clients and longer payment terms to suppliers.
Now they are giving some of the cash back: up to EUR 500 Million cashflow relief us used for:
- speeding up payment to medium sized vendors and
- offering credit to small retailers)
Is Business self-isolating a solution?
Alan understands that while sales of some products sales may boost from panic, overall Unilever will lose if self isolating.
On balance, in the end consumer will spend less.
Strategy versus “here and now”:
During COVID 19, right now strategy is the main priority.
One day strategic opportunities will resurface. But right now is not the time for distractions.
The guide list was compiled by myself, based on the following article from The Economist:
Comments