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Harish Manwani: Profit’s not always the point

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You might not expect the chief operating officer of a major global corporation to look too far beyond either the balance sheet or the bottom line. But Harish Manwani, COO of Unilever, makes a passionate argument that doing so to include value, purpose and sustainability in top-level decision-making is not just savvy, it's the only way to run a 21st century business responsibly.

- COO, Unilever
Harish Manwani joined Unilever as a management trainee in 1976; he is now the company's chief operating officer. Full bio

The entire model of capitalism
00:12
and the economic model that you and I
00:15
did business in,
00:18
and, in fact, continue to do business in,
00:19
was built around what probably Milton Friedman
00:21
put more succinctly.
00:25
And Adam Smith, of course,
the father of modern economics
00:26
actually said many, many years ago,
00:29
the invisible hand,
00:31
which is, "If you continue to operate
00:33
in your own self-interest
00:35
you will do the best good for society."
00:37
Now, capitalism has done a lot of good things
00:39
and I've talked about a lot of good
things that have happened,
00:44
but equally, it has not been able to meet up
00:47
with some of the challenges that we've seen
00:50
in society.
00:52
The model that at least I was brought up in
00:54
and a lot of us doing
business were brought up in
00:56
was one which talked about
00:58
what I call the three G's of growth:
01:00
growth that is consistent,
01:03
quarter on quarter;
01:04
growth that is competitive,
01:06
better than the other person;
01:07
and growth that is profitable,
01:08
so you continue to make
01:10
more and more shareholder value.
01:12
And I'm afraid this is not going to be good enough
01:14
and we have to move from this 3G model
01:17
to a model of what I call
01:20
the fourth G:
01:22
the G of growth that is responsible.
01:24
And it is this that has to become
01:28
a very important part
01:31
of creating value.
01:33
Of not just creating economic value
01:35
but creating social value.
01:38
And companies that will thrive are those
01:40
that will actually embrace the fourth G.
01:43
And the model of 4G is quite simple:
01:47
Companies cannot afford
to be just innocent bystanders
01:50
in what's happening around in society.
01:53
They have to begin to play their role
01:56
in terms of serving the communities
01:59
which actually sustain them.
02:01
And we have to move to a model
02:03
of an and/and model which is
02:05
how do we make money and do good?
02:07
How do we make sure
02:11
that we have a great business
02:13
but we also have a great environment around us?
02:14
And that model
02:17
is all about doing well and doing good.
02:18
But the question is easier said than done.
02:21
But how do we actually get that done?
02:24
And I do believe
02:26
that the answer to that is going to be leadership.
02:27
It is going to be to redefine
02:30
the new business models
02:32
which understand
02:33
that the only license to operate
02:35
is to combine these things.
02:37
And for that you need businesses
02:39
that can actually define their role
02:41
in society
02:44
in terms of a much larger purpose
02:46
than the products and brands that they sell.
02:47
And companies that actually define a true north,
02:50
things that are nonnegotiable
02:53
whether times are good, bad, ugly --
02:55
doesn't matter.
02:58
There are things that you stand for.
02:59
Values and purpose are going to be the two
03:01
drivers of software
03:06
that are going to create
03:08
the companies of tomorrow.
03:09
And I'm going to now shift
03:12
to talking a little bit about my own experiences.
03:13
I joined Unilever in 1976
03:17
as a management trainee in India.
03:20
And on my first day of work
03:23
I walked in and my boss tells me,
03:25
"Do you know why you're here?"
03:28
I said, "I'm here to sell a lot of soap."
03:30
And he said,
"No, you're here to change lives."
03:33
You're here to change lives.
03:36
You know, I thought it was rather facetious.
03:38
We are a company that sells soap and soup.
03:40
What are we doing about changing lives?
03:43
And it's then I realized
03:46
that simple acts
03:50
like selling a bar of soap
03:52
can save more lives
03:55
than pharmaceutical companies.
03:56
I don't know how many of you know
03:57
that five million children don't reach the age of five
03:59
because of simple infections that can be prevented
04:02
by an act of washing their hands with soap.
04:05
We run the largest
04:08
hand-washing program
04:10
in the world.
04:11
We are running a program on hygiene and health
04:12
that now touches half a billion people.
04:14
It's not about selling soap,
04:16
there is a larger purpose out there.
04:18
And brands indeed can be
04:20
at the forefront of social change.
04:22
And the reason for that is,
04:24
when two billion people use your brands
04:26
that's the amplifier.
04:28
Small actions can make a big difference.
04:30
Take another example,
04:33
I was walking around in
one of our villages in India.
04:35
Now those of you who have done this
04:38
will realize that this is no walk in the park.
04:40
And we had this lady
04:45
who was one of our small distributors --
04:47
beautiful, very, very modest, her home --
04:52
and she was out there,
04:55
dressed nicely,
04:58
her husband in the back, her mother-in-law behind
04:59
and her sister-in-law behind her.
05:01
The social order was changing
05:04
because this lady
05:06
is part of our Project Shakti
05:07
that is actually teaching women
05:09
how to do small business
05:12
and how to carry the message
05:14
of nutrition and hygiene.
05:15
We have 60,000 such women
05:17
now in India.
05:20
It's not about selling soap,
05:22
it's about making sure
05:24
that in the process of doing so
05:25
you can change people's lives.
05:27
Small actions, big difference.
05:30
Our R&D folks
05:33
are not only working to give us
some fantastic detergents,
05:35
but they're working to make sure we use less water.
05:38
A product that we've just launched recently,
05:41
One Rinse product that allows you to save water
05:43
every time you wash your clothes.
05:47
And if we can convert all our users to using this,
05:49
that's 500 billion liters of water.
05:52
By the way, that's equivalent to one month of water
05:54
for a whole huge continent.
05:56
So just think about it.
06:00
There are small actions that
can make a big difference.
06:01
And I can go on and on.
06:05
Our food chain, our brilliant products --
06:06
and I'm sorry I'm giving you
a word from the sponsors --
06:09
Knorr, Hellman's and all those wonderful products.
06:11
We are committed to making sure that
06:15
all our agricultural raw materials
06:17
are sourced from sustainable sources,
06:19
100-percent sustainable sources.
06:21
We were the first
06:24
to say we are going to buy all of our palm oil
06:25
from sustainable sources.
06:27
I don't know how many of you know that palm oil,
06:29
and not buying it from sustainable sources,
06:33
can create deforestation that is responsible
06:36
for 20 percent of the greenhouse gasses in the world.
06:38
We were the first to embrace that,
06:41
and it's all because we market soap and soup.
06:43
And the point I'm making here
06:48
is that companies like yours, companies like mine
06:50
have to define a purpose
06:53
which embraces responsibility
06:56
and understands that we have to play our part
06:58
in the communities in which we operate.
07:00
We introduced something called
07:03
The Unilever Sustainable Living Plan, which said,
07:05
"Our purpose is to make
sustainable living commonplace,
07:08
and we are gong to change the lives
07:11
of one billion people over 2020."
07:13
Now the question here is,
07:15
where do we go from here?
07:17
And the answer to that is very simple:
07:19
We're not going to change the world alone.
07:21
There are plenty of you and plenty of us
07:23
who understand this.
07:25
The question is,
07:27
we need partnerships, we need coalitions
07:28
and importantly, we need that leadership
07:31
that will allow us to take this from here
07:33
and to be the change
07:36
that we want to see around us.
07:37
Thank you very much.
07:39
(Applause)
07:40

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About the speaker:

Harish Manwani - COO, Unilever
Harish Manwani joined Unilever as a management trainee in 1976; he is now the company's chief operating officer.

Why you should listen

Harish Manwani is a Unilever man through and through. Having joined the company in 1976, he imagined that his time would be taken up with selling soap and soup. Not so, his then-boss told him. "You're here to change lives." It sounded far-fetched, but as the years went on and as he moved through the ranks of the corporation, Manwani began to understand his mentor's wisdom. Those words remain close to his heart even in his current role as the company's chief operating officer.

Now based in Singapore, Manwani graduated from Mumbai University and has a master's degree in management studies; he also attended the advanced management program at the Harvard Business School. He is the non-executive chairman of Hindustan Lever and a member of the executive board of the Indian School of Business.

More profile about the speaker
Harish Manwani | Speaker | TED.com