Case - Unilever Philippines

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Unilever Philippines:

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Making the Philippines Great Again

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11/2017-6240
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This case was written by Jean-Francois Manzoni, Shell Chaired Professor of Human Resources and Organizational
Development at INSEAD, and P.C. Abraham, Research Associate. It is intended to be used as a basis for class
discussion rather than to illustrate either effective or ineffective handling of an administrative situation.
The authors would like to thank Unilever executives for their partnership in making this case possible.
Additional material about INSEAD case studies (e.g., videos, spreadsheets, links) can be accessed at
cases.insead.edu.
Copyright © 2016 INSEAD
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This document is authorized for educator review use only by Virgilio Pernito, Other (University not listed) until Jul 2021. Copying or posting is an infringement of copyright.
[email protected] or 617.783.7860
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Introduction
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20 April 2016. Rohit Jawa, Chairman and Managing Director of Unilever Philippines, was
getting ready for the semi-annual two-day off-site gathering of the top 30 managers of the
company – the extended Philippines Leadership Team. One of his goals was to celebrate the
successes of the past three years during which the company had improved profitability and
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turbo-charged growth, in the process exceeding one billion euros in turnover in 2015. As a
result of these successes, the company had received Unilever’s coveted Global Compass
Award.
Rohit also wanted to ensure that the organization would remain successful for years to come,
which led him to select two key questions for the retreat: First, how can the company sustain
its growth performance and achieve two billion euros in turnover by 2020? Second, how can
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the company institutionalize the changes in behaviour that had contributed to its success over
the last three years? The latter question was becoming urgent since the top management team
that had led the change effort and had started to shift the company’s culture over the last three
years was beginning to rotate out to bigger roles within Unilever.
Initial Impressions, 2013

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Rohit had joined Unilever Philippines in September 2013. He had spent seven years in
Singapore in regional and global roles prior to this, and his impression during those years was
that it was just a good Unilever operating company.
I had known the Philippines a little in my regional and global roles. I knew it as a
company with a long history with a few highlights to it – a couple of big
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activations and some special features such as the strong deodorants business. It
was a good company, a competent company. It was important but not important
enough. It was just a nice business with a long history.
Looking at the company from the outside before he joined, he felt that a lot of the issues that
the company faced were due to rapid changes in its leadership and a lack of rigour. It was also
apparent that the mood within the company was not good, with people not feeling like
winners any more. Gina Lorenzana, Vice-President Personal Care, had left Manila in 2006 to
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return in 2012, and she found a striking difference in atmosphere:
There was low morale. It wasn’t the company I grew up in. It was a place where
people felt like they were losing versus all of the competitors. Nothing we did was
working. We were afraid of P&G. We felt that the customers were strong and we
could not push our agenda. The local marketing teams felt disempowered because
they felt that the consumer and marketing agenda was led by the global teams and
not by them on the ground. They felt like mailmen, getting global mixes and
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passing them on to sales.
On the positive side, Rohit felt that the company had strengths that only needed to be
rediscovered and built upon. It had a strong sales system and deep relationships with its
customers. It also had a history of building brands like Closeup, Cream Silk hair conditioner
and Knorr with local recipes. He also felt that there were significant opportunities because (a)
the Philippines economy and currency were doing well (see Exhibit 2), and (b) the company
Copyright © INSEAD 1
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was under-represented in a number of categories and market segments. Last, but maybe not
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least, there seemed to be a growing sense of urgency within the organization. 2012 had been a
very challenging year for the organisation, which strongly suggested that things could not
continue this way.
The Boom & Bust Phenomenon
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Unilever Philippines had a reputation for being a boom and bust company. Gina explained
this phenomenon:
Unilever Philippines would come up with great things and great growth one year
and then the next year would be an absolute disaster where everything would be a
shambles and growth would die down. This continued in three year cycles where
it was literally a boom and bust.
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The primary reason for this was that the company relied heavily on new products and brand
extensions for growth, but found it difficult to sustain the growth momentum for these
products after the initial period. Dorothy Dee Ching, the Marketing Director for the Hair
category, illustrated this with two examples:
We launched Vaseline shampoo in 2000 and were celebrated globally, but sales
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declined year on year after that. When we launched Clear shampoo in 2008, we
were the darlings of the Unilever world, but sales for this also declined year on
year.
A New Philippine Leadership Team (PhLT)

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A new top management team came in over the second half of 2012 and 2013. Two members
of this team – Gina Lorenzana and Benjie Yap, Vice President for Home Care and Foods,
were Filipinos returning to Unilever Philippines from international assignments. When Rohit
joined the company, he decided not to make any changes to the PhLT because he felt that the
right team was already in place.
In addition to having the right skill sets and experience (see Exhibit 1 for short profiles on the
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members of the team), Rohit felt that the leadership team also had the right attitude and
motivation.
I felt that they were all keen to make a mark and ready to place the larger good of
the company ahead of their own personal interests. They wanted to build a great
business!
Rohit’s Brief from the COO

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Unilever Philippines had been growing at 4% a year, while the Philippines economy grew at a
faster 6% a year. Harish Manwani, Unilever’s COO at the time, felt that the company had the
potential to perform better and had sent Rohit in to make this happen:
I had a brief from the COO of Unilever. He told me that it was a full portfolio
company but had a chequered history and a boom and bust reputation. He asked
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me to turn it into a company that performed consistently, build the next Indonesia,
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and unlock the potential so that the company was growing at least as fast as GDP.
The Big Picture – Executing the Turnaround

How It Happened
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According to Rohit, turning around Unilever Philippines required building the team,
establishing the vision, and establishing what the “jobs to do” were:
Our first action was to build a team and to understand the human factors at play.
The second action nearly at the same time was to establish where we are going,
what is the larger vision – and the vision was to make the company great again.
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And how do we do that? I captured that with three big thoughts.
The first was consistent growth higher than the 4-5% seen in the past – I called it
10-10-10. Let’s at least get 10% growth every year. We are in the third year of
that now.
The second was to become a disciplined execution machine because we needed

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that to ensure that we had reliability, so that we could generate consistent results
again and again.
The third, which was very important, was about being Filipino – our brands had
to connect to the hearts and minds of the consumers. We had to make sure that all
our brands related at a very local level, achieved the sweet spot of being glocal.
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Once the team had identified the three big “jobs to do”, it developed plans and programmes to
operationalise these three thrusts and then proceeded to execute on them in a disciplined
manner (see Exhibit 3 for an overview of the firm’s strategy).
Determining the Way Forward
Rohit explained that it took months of hard work for the team to come together and determine
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the way forward:
It took 9 months of hard work and effort on everyone’s part to start feeling that we
were “clicking”. The first 3 months was a lot of fact-finding, analysis, meetings,
and deep dives. We went through the process of meeting people, travelling in the
market – a lot of discovery and data. Then the next 6 months were about finding
the agenda and people adjusting to me, to each other, and to the new approach. In
particular, I created a lot of work when I came in. I was asking a lot of questions
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and the company was raising its level of rigour to match with my style and the
change that I had brought. A lot of energy was consumed in these first 9-10
months, after which people got used to each other and the results started
coming in.
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Rediscovering Greatness
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Rohit felt that Unilever Philippines could go from being an average performer to being one of
the top performers among Unilever’s operating companies worldwide. He used this vision of
the company’s future to inspire the leadership team and the wider organization:
I felt that the company had the potential to be a great company again. All we had
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to do was to tap into the pride of the Filipinos, to say that there is an opportunity
to go back and rediscover what made us great and bring back the magic that
made us a great company in the past. I labelled it “rediscovering greatness”.
This framing helped motivate the management team to try and take the company to the next
level.
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Building a Shared Understanding of the Filipino Consumer
The leadership wanted the company to connect at a deeper level with the Filipinos it served.
There was a feeling that this connection had been lost and that this external disconnect was
leading to an internal lack of alignment between the different functions of the organisation.
Although there was a lot of data, people were finding it difficult to draw insights from it.
Different functions were interpreting the same data differently which was leading to conflict.
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To remedy this problem, the company started a Stuff We All Get (SWAG) series that ran
every year from 2012 to 2015. These four iterations each focused on a different target:
Consumer-SWAG (2012) to understand consumers as people; Shopper-SWAG (2013) to
understand consumers as shoppers; Media-SWAG (2014) to understand consumers as media
consumers; and Product-SWAG (2015) to help the staff within the company to understand
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their products better.
As Gina explained, this was designed to put managers and staff in close contact with the
people they served:
This was an initiative to start understanding the people we served as people, not
as categories or body parts but as human beings. People were actually going out
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and talking to consumers, which makes that reality so much more tangible. For
example, you had someone running a factory talking to an 18-year-old shampoo
user who also buys our skin products and our ice cream.
On average, each leg of the SWAG had about 150 participants from marketing, sales, supply
chain, finance and human resources. The time investment required was significant, with each
participant putting in about ten days over a six month period. Apart from the interactions with
the consumers, there were other activities such as expert talks and “insight to action
workshops” to crystallize the learnings from each SWAG. At the end of the process,
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participants codified their learnings in an easily accessible way. For example, the Shopper-
SWAG resulted in the “Promo Golden Rules”, the Media-SWAG in the “10 tenets of digital
advertising”, and the Product-SWAG in the “Philippine Product Truths”.
The SWAG series helped to build a shared understanding across Unilever Philippines of the
people that it was serving, which was transformational because it contributed to a move away
from working in operational silos and to greater understanding and collaboration between
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functions such as marketing, sales and supply chain. The SWAG series also helped bridge the
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gap between the global and local marketing teams, which Gina felt made it easier for the two
groups to work together to grow the business:
Brand development is global, and brand building is responsible for locally

activating the brands and hence is local. The SWAG series allowed us to create a
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shared understanding with the global category teams. This helped enormously
because it is so much easier to drive the business forward when you come from
the same starting point.
Development of the PhLT

One of the factors that had helped the turnaround was the fact that the PhLT was much more
cohesive than the typical board of a Unilever operating company. This meant, as Benjie
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explained, that problems got resolved quickly and the focus was on external competitors
rather than internal enemies:
When I was a much younger manager, I would often spend days – at the request of
my bosses - making PowerPoint presentations to defend why we were not wrong
and why someone else was wrong. Now I don’t want anyone to waste time with
that. If we have a problem with someone, we call them on the phone and discuss it
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with them.
As Gina explained, the collaborative behaviour displayed by the PhLT percolated down to the
rest of the company, leading to less conflict and more collaboration between the different
functions:
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The collaborative nature of the PhLT percolated down to the extended leadership
and then to the majority of the company. It was the first time that they saw a
leadership team working with each other rather than against each other. Prior to
that, many of the functions were at odds, whether it was sales and supply chain,
sales and marketing, or finance and marketing. Now, people saw that the
leadership was collaborating towards a certain goal rather than just looking after
their function or category.
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Fixing the Sales and Operations Planning (S&OP) Process
An important outcome of the more collaborative behaviour of the PhLT was a more effective
S&OP process, which was used to determine the sales targets for the next month, quarter and
year on a rolling basis. The S&OP meeting – in which all members of the PhLT participated –
set these targets and decided on the actions required across the company to achieve the
targets. A well-functioning S&OP process would result in one set of numbers used by all
across the company. That was not always the case, as Ronny Krisnanto, Vice-President
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Supply Chain, explained:
Whenever we had S&OP meetings, we (across the different functions) often had
small separate meetings afterwards to discuss the numbers. Ajay (Ajay Gandhi,
Vice-President Finance) noticed this and asked why, after the S&OP meeting, our
teams always had another meeting. Could we not talk about everything in the
S&OP meeting itself?
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Once the issue was raised, the PhLT agreed that all discussions regarding the targets would be
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carried out during the S&OP meeting, and that all the functions would then use the targets
that resulted. This was a massive improvement from an alignment point of view.
How the PhLT’s Cohesiveness was Achieved
The PhLT benefited from positive circumstances. All of the members of the team had come in
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at around the same time, in the second half of 2012 and the first three quarters of 2013, and
this seemed to have helped. They were all very strong in their respective functional area, so
there was a degree of mutual respect, and they shared a philosophy of putting the company
first.
Turning these positive conditions into an exceptional team still required work. Apart from
Ronny and Ajay, who had worked together in Indonesia, the members of the team did not
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know each other well before they joined Unilever Philippines. They had to make an effort to
get to know and understand each other.
A two day top team workshop, held towards the end of 2013 helped to bring the team
together. This included team bonding exercises as well as 360 degree feedback to give the
team members insights into each other as human beings, and into their strengths and
weaknesses. Looking back, Rohit felt that the team’s relationship changed over time - from a
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working relationship, to a cooperative relationship, to ultimately a collaborative one:
Cooperating means working well with each other and I think we got to that place
within 12-18 months. Our challenge was to move on to collaboration, which is
about constructively challenging each other and not always agreeing with each
other, but not turning that into a negative dynamic. The culture that we have
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cautiously developed is not about being sugary nice to each other but challenging
constructively, but then accepting each other and working well with each other
after that.
Enablers of Collaborative Behaviour
There were some key enablers that enabled people to work together collaboratively. First,
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there was an effort to ensure that everyone’s voice was taken into account while making
decisions and deciding on strategy. The management team worked hard at giving people the
psychological space to speak up. Second, there was agreement among the PHLT that there
would no politics or silo thinking focused on optimising one function’s performance. What
mattered was what happened out in the market – are we winning or losing as a collective?
Third, as Rohit explained, there was a focus on learning from and fixing problems rather than
on assigning blame:
I keep saying that bad news that is given early is good news. Let us know early
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enough and that, for me, is good news. Otherwise, you don’t really know what is
going on. There is no blame for anything because that leads to a lot of
defensiveness. What has happened has happened, let’s learn from it. How can we
make the system better?
Fourth, there was a focus on fact-based analysis (which was termed factualization), which
made it possible for difficult discussions to take place without emotions getting in the way.
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Benjie illustrated how this worked by talking about how it had changed the way that
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marketing and sales interacted:
Marketing and Sales used to fight a lot about whether the pull of the brand is
weak or the push of the sales guys is not strong enough. Now we factualize these
discussions. What is the health of the brand? What is the brand equity score?
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What is the distribution? What is the placement? There are numbers that can
replace emotional blaming. Things are now more data determined than
emotionally determined.
Fifth, as Rohit explained, there was a strong focus on doing the right thing for the long term
rather than the short term:
There is the drive for consistency, the long term over the short term, doing the
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right thing. I want everyone to know that we are not doing this for this month or
this year. We want to build a company that stays great for the long term so we are
really taking a long-term view on most decisions. Just do what is right and the
rest will follow.
Rohit’s Characteristics and Contribution

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Rohit had made a major contribution to bringing the leadership team together and to leading
the transformation of the company. Gina felt that some of his personal characteristics had
enabled this contribution:
Rohit is a smart, structured leader. He is very left-brained. Being a very logical

person, he already has a point of view. He needs to have all the facts in place to
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make a decision but, equally, he listens to people and he has the humility to listen
before he creates an informed point of view. That was a real enabler for us as a
leadership team to operate and do what we do best. While he is very clear about
setting an ambition and putting rigor back, he also gave us the space to run our
businesses.
Suresh Rai, the Human Resources Vice President, felt Rohit’s ability to think through
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complex problems had been important, as was his experience in country-level, regional and
global roles within Unilever.
He is very strategic and data-driven, which really helps. In a complex

environment when things are not working out or battles are intense, it is always
good to see what the data is saying. That brings some level of rationality.
Whatever the complexity of the situation, he can see through it, distil it down to
two or three issues, and then look at what can be done.
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He has experience with local, regional and global roles. He started in sales, he
has strong marketing experience, he has been in multi-country roles, and just
before coming here he was a strong partner to the COO of Unilever. That is very
important. Many times, it is not just the country context that is important but also
the organizational context – your ability to get resources, negotiate, and make
people see things as you see them.
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Empowering the Extended PhLT
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Building the “Platinum Bench”
Until 2006, the chairman of Unilever Philippines had been a senior vice president and
members of the board were vice presidents. From 2006, onwards, the company was treated as
a “small company” with a senior vice president as chairman and directors as board members.
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This had resulted in a lack of growth opportunities within the organization, leading many
talented executives to continue their Unilever career outside of the Philippines. As a result, by
2013 the company had a relatively weak middle management group
An early priority of the PhLT was to improve the quality of middle management (See Exhibit
4 for an overview of the firm’s talent strategy). The company had been “upgraded” again so
there were more roles for people to come in at the Director level. As Rohit explained, a key
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means for upgrading middle management was bringing back Filipinos who were working
internationally with Unilever:
The idea was, how do we get back really good people, the Filipinos outside who
had seen the rest of the world, bring them back into jobs here so they can actually
add value. There were some very good people working internationally, especially
in marketing. How do we get the right people back?
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Over time, as Suresh explained, the company worked to improve the quality of middle
management as opportunities arose to do so.
We have consciously and gradually brought in great people. At present, 60-70%

of our directors are people we have brought back who have strong regional
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experience or expertise both within Unilever and outside. This has made a big
difference. If you get a heavy hitter, someone who has dealt with multiple
countries and complex situations, we find that they are able to have a huge impact
when they come back and have to deal with the issues of just one country.
Empowering Middle Managers

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Once stronger middle managers were in place, the focus shifted to empowering them. One of
the key ways in which the PhLT did this was to engage more with the top 30 managers and
role model the right behaviours. There was an effort to bring the extended PhLT closer, not
just intellectually but also socially, so people found it easier to work together across
boundaries.
The PhLT also created several frameworks and guidelines that middle managers could use in
making decisions, and to take away the fear of failure. Having frameworks within which
middle managers were empowered to make decisions significantly increased the decision-
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making speed and quality, while also reducing the load on the PhLT.
For example, category business meetings in Personal Care used to be full-day meetings, at the
end of which decisions were not always reached. Gina had to chair the meetings to ensure
sufficient alignment. To change this situation, a meeting brief was created describing the
purpose of the meeting, who participated in it, what decisions needed to be made, and with
whom the teams had to interface. Two-page category scorecards were developed, the first
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page documenting business objectives, and the second page the input KPIs for media,
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distribution, promotion and the supply chain. The brief and the scorecards created a frame
within which the category directors and the teams could be empowered to make decisions on
their own and held accountable for their scorecard objectives. The meetings also became
shorter (2-3 hours) and Gina stopped participating in them.
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Becoming the Lowest Cost Business
Unilever Philippines had a high cost base in 2013. The PhLT decided to attack that cost base
energetically, explaining that “becoming the lowest cost business would provide the fuel for
growth.” (See Exhibit 5 for an overview of results). One of the PhLT’s key decisions was to
position the cost reduction initiatives in a way that was positive rather than negative, as Gina
explained:
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Usually when you do things like this, people think it is about reducing costs and it
is not very empowering. One thing we did as a leadership team was to say that all
these initiatives (to reduce costs) were enablers to allow us to grow faster. If you
reframe it that way, it allows people to embrace the change and own it rather than
be scared of it.
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The initial cuts were easy to make because they were obvious. There was a lot of business
waste so the initial focus was to get rid of this. Later on the company began to make more
structural changes to achieve greater efficiencies. For example, it used a low-cost business
model review to bring costs down in ice cream and laundry, two businesses which were more
margin-challenged. The company used zero-based budgeting to address the remaining areas
where there was still potential to reduce costs.
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Manufacturing was a key area for cost reduction because costs were high relative to the rest of
Southeast Asia. The supply chain team had been able to reduce manufacturing costs by
proactively managing weekly leading indicators, which allowed them to act quickly when
costs were increasing. They went on to implement similar actions in logistics and other areas
within the supply chain function.
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There were some cases where efficiency improvement measures resulted in headcount
reductions. In these situations the company did its best to ensure that the affected workers
found other jobs by holding job fairs to help them find new jobs with business partners, and
by providing them with training to equip them for new jobs such as motorcycle servicing.
Focus on the Core

The Rationale
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The initial seed for focusing on the core was planted in 2012 by the then chairman of Unilever
Philippines, Peter Cowan, who had joined Unilever in September 2011 when it acquired
Alberto Culver. The company had just, as Gina put it, “done a clean-up of failed innovations
from the previous year”, morale was low, and the leadership was questioning its strategy of
focusing on innovations. It was then that Cowan pointed out that the company had a lot of
great brands that it was neglecting. He suggested that the company focus on building these up
rather than focusing on innovations.
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When Rohit joined Unilever Philippines, he also felt that focusing on the top brands made a
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lot of sense given that they accounted for most of the company’s turnover. However, he took
his analysis a step further:
80% of our business was 8 brands. As long as those 8 brands were healthy, we
would be fine. I focused all our resources and efforts on these 8 brands. That was
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the “turbo-charge the core” thought. This wasn’t a new thought, but it was really
about not just saying it but actually doing it in a cautious fashion. Within these 8
brands, there were 105 SKUs delivering 50% of our business. So how could we
focus on this “core of the core”?
Project Half
The first element of the drive to focus on the core was a 2013 initiative called Project Half,
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aimed at reducing the number of SKUs significantly (See Exhibit 6 for an overview of Project
Half). The management team decided to allow the businesses to drive the SKU reduction
rather than run this as a separate exercise. This would allow the business unit owners to drive
the initiative while also driving their P&Ls, would embed the process change in the business,
and would reduce resistance.
The team built an approach for SKU rationalisation – after getting input from all the
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stakeholders – which considered the revenue contribution of the SKUs as well as the role they
played in category and channel strategic agendas. Once the team had developed the approach
to be used, it shared it with the category heads and left it to them to manage the SKU
reduction exercise for their categories (including deciding which SKUs would be eliminated
and when).
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The number of SKUs went from over 2,000 (including promotional items) to about 1,200
after the rationalisation exercise had been completed. The company achieved double-digit
growth in the year that this exercise was completed, giving the PhLT confidence that they
were on the right track.
Core Of The Core (COTC)

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The Core Of The Core initiative, which began in 2014, consisted of two parts. First, the
company identified the 105 most important SKUs, the “core of the core”. Second, it focused
the bulk of its resources on making these successful (see Exhibit 7 for an overview of the
COTC strategy).
Identifying the COTC SKUs
The COTC team used the same principle-based approach to identifying the core SKUs which
had been used successfully in Project Half. There were two criteria for SKUs to be part of the
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COTC. (a) It had to be a major source of business, and (b) there had to be a long-term plan for
the brand, showing how brand equity would be built over time. The team also used (c) the
customer lens to ensure that COTC SKUs supported all the major channels, and (d) the
competitor lens to ensure that key segments were covered within the COTC.
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The team also ensured that managers of brands that were not part of the COTC understood
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that they still had a role to play and knew what it was. Dorothy (Marketing Director for Hair
Care and one of the leaders of this initiative) gave an example:
In hair, three brands – Sunsilk, Cream Silk and Dove – were part of the COTC.
TRESemme had a role to play in department stores and drug stores because they
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catered to a premium market while Toni & Guy was more into very high-end
stores because the price point was very high. As long as it was clear to them that
their brands had a clear role to play, people were willing to accept that they were
not part of the COTC.
The COTC idea was most important in the traditional trade. As Ed Sunico, Director of
Distributive Trade (focused on selling to small ‘sari-sari’ or mom and pop stores through
distributors) explained, the number of COTC SKUs was even smaller in this important
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segment of the market:
If you look at the number of sari-sari stores, there are more than a million of
them. The idea of 7-14-21 is to sell the right SKUs to the right stores. Small stores
were stocking only 3-4 of our SKUs and our ambition was to increase this to the
most critical 7 SKUs. Mid-size stores were carrying 5 SKUs and we felt that we
could push this to 14. We felt that we could increase the number of SKUs we sold
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to the larger stores to 21. When we described this scenario to our distributors, it
made sense to them. In the past, we tried to push all new products out to all the
sari-sari stores but this did not work.
Prioritizing the COTC

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Once the COTC SKUs had been identified, the focus shifted to ensuring that they were
successful. Gina, who was one of the leaders of this initiative, used the example of Sunsilk to
demonstrate how this worked in practice:
Sunsilk had been a market leader in the Philippines but was down to 12% market
share. We found that more than half the brand’s volume was the pink variant and
that had a winning formulation and perfume against its eyeball competitors. We
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capitalised on this superiority in order to drive penetration and brand growth for
Sunsilk by leveraging this strong leg of the brand. We made half the shelves pink
in the stores so that customers could find it easily. Rather than running five or six
campaigns a year, we ran one or two, mostly for the pink variant As a result,
Sunsilk has gone from negative growth to double-digit growth.
Making this happen required the support of many of the functions of the company, so they
were represented on the COTC team, as Dorothy explained:
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We needed Sales because we needed to know how to execute in stores to have the
best availability, visibility and activation for COTC. We needed Supply Chain so
that they could prioritise the COTC for production and dispatch. We needed R&D
support to make the COTC competitive because, when we started, a lot of the
products did not have winning product tests. It was imperative that each function
was involved and contributed to making the COTC successful.
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The team met bi-monthly. Each member was responsible for defining how COTC would be
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implemented in their function and for ensuring that it actually happened. The team provided a
quarterly update to the PhLT when issues that could not be resolved within the team were
brought up for resolution.
The team maintained a monthly scorecard for the COTC SKUs. Any SKU that was behind
target was flagged and action was taken to address the issues identified. There was also a
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review process to ensure that the list of COTC SKUs remained relevant.
There was also a lot of communication about COTC, with the leadership team talking about
this in the leadership forum, at sales conferences and others.
Embedding COTC
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The team had worked on embedding COTC within the organization. One way was to set
special KPIs for the COTC. Supply chain had to ensure a 99.5% dispatch rate for COTC
SKUs. R&D had to ensure that 70% of COTC SKUs had winning product tests, and had to
have a roadmap to get the rest there as well. Marketing had to ensure that at least 50% of
brand marketing investment (advertising spending) was on COTC SKUs. Promotions were
also focused on COTC SKUs.
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COTC had also been embedded into existing programmes and processes. JP Bernardo, the
head of retail solutions, gave some examples of how this had been done in sales:
The sales team has embedded these changes in our systems. For example,
distributor sales teams have hand-held devices which guide them on which SKUs
to book for different store types. We have the Perfect Store principle, which talks
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about what assortment and what merchandising standards you should have in a
store. COTC is now embedded in this.
Being Consistent
The COTC initiative resulted in a greater focus on consistency. The focus was on “being
freshly consistent and not changing just for the sake of change”. The increased rigor and
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discipline expressed itself in a number of ways – fewer new product launches, fewer
campaigns but with greater investments, an emphasis on consistent brand messages and less
willingness to react tactically to competitor moves. This resulted in situations where, as Rohit
explained, it was necessary to say no to global marketing:
We have become very demanding about the changes we impose on the system
because we believe it takes us away from fundamentals like the core of the core.
Too many changes weaken the core and lead consumers to review their choices
again. So we started pushing back on new stuff (including launches and
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relaunches) unless we believed it was really critical. And on several occasions our
pushback was successful.
Two things helped the local marketing team push back successfully. First, many of the
category directors had spent time in Singapore and elsewhere in global marketing roles and
had the credibility, knowledge and experience to deal with their peers there. Second, Paul
Polman, Unilever’s CEO, had been very taken with the COTC concept when Dorothy
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presented it to him on his visit to the Philippines in 2015, and had subsequently asked Rohit to
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present it at a forum for Unilever vice presidents and senior vice presidents. This had raised
the visibility and acceptance of the initiative within Unilever.
Results
Dorothy felt that the company’s success in the last two years had been largely because of the
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focus on the COTC:
The double-digit growth that we have experienced in the last two years has, to a
large extent, been because of COTC. And what’s great is that if you look at our
penetration, distribution and brand equity, they are also growing. This proves that
COTC doesn’t just help us to grow the business but also helps us have stronger
business fundamentals and stronger brands, making us a business built on rock,
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not on sand.
Expanding in the White Spaces

Rohit felt that the core could deliver an annual growth rate of 6-7%. If the company wanted to
grow at 10% a year, the remaining 3 to 4 percentage points of growth needed to come from
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white spaces – untapped or underpenetrated market segments. Part of this came from launches
of new products or brand extensions, which the company had been doing cautiously while
ensuring that the core brands were supported. Dorothy illustrated this using Dove as an
example:
When we launched Dove, we resisted the temptation to launch new innovations.

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We wanted to let the Dove brand establish itself first in terms of scale and brand
equity so that people were clear about what the brand stood for. It was only when
we were confident that people knew that Dove was about damage, real care and
real beauty that we started extending into white spaces. We launched Dove Men
last year while continuing to support the Dove core at the same time.
Another major initiative was to increase market penetration in the Visayas and Mindanao
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region. As Ed Sunico explained, there seemed to be an opportunity to increase sales in certain

categories:
40% of our business came from Visayas and Mindanao, which is about their share
of the population. When we looked at this in a more granular way, we found that
we were under-indexed (that is, selling less per consumer than in other regions) in
some large categories such as hair and food.
Increasing market penetration in this region required a strategy that was supported by all of
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the different functions.
Marketing had to localise their advertising because the language and culture is
different. HR reviewed how many people were required in the region and found
that we needed to add five FTEs. Supply chain saw that there was a need for new
depots in Cebu and Cagayan de Oro. Customer Development started to look at
Distributive Trade as separate regions, one for Visayas and Mindanao, and one
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for the rest of the country. The strategy was all about localisation, strong market
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development and putting the right structures in place. We got the full support of
all the functions and had strong PHLT backing.
Sustainability
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Sustainability was important to Unilever in the Philippines, as it was in the rest of the world
(see Exhibit 8 for an overview of the firm’s sustainability strategy). Suresh felt that it was
important as a way for the company to engage with society and to energize its employees:
If you think in the morning when you get up that you are going to make soap, this
is not as energizing as if you believe that I will make something which will prevent
hundreds of children from dying. It provides a higher purpose. Many times you
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become very insular. Sustainability helps to bring the outside world in. The key
thought is that no organisation is a world of its own. Organizations exist in a
larger societal context. The more we can meet the needs of the society, the
stronger the chances of the organisation doing well in the long term.
The company’s sustainability initiatives had been most effective when they were connected to
the business, since this made it possible to scale them up. Benjie illustrated this using the
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example of the Knorr feeding programme, where the company fed children for six months and
showed their mothers how to cook nutritious dishes using Knorr products:
To date, we have been able to help around 550,000 kids go through the
programme, with a 99% success rate of getting kids who were under their ideal
weight to the correct weight for their age after the programme. We measure how
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many of them convert to use Knorr after the programme and do we get a good
ROI out of the initiative. It is both helping society and helping the brand at scale.
However, there were other issues that were proving more difficult to address. As Ed Sunico,
who had moved on to become the Vice President for Sustainable Business and
Communications explained, sachet recovery was one of them:
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In the Philippines, 70% of our business is in plastic single-use sachets so, as part
of the Unilever Sustainable Living Plan, we have a very strong sachet recovery
agenda. This has been a very big challenge for the company. Despite big efforts,
recovery and recycling is less than one percent of what we produce. We are
considering focusing our efforts on proper waste disposal rather than having the
audacious ambition of recovering all the sachets. We want to look at recovering a
larger share of the sachets that are not being disposed of properly. For example,
there is a sachet recovery programme focused on cleaning up the Pasig River (the
main river flowing through Manila).
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The Challenges Ahead
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Reflecting on the last three years, Rohit felt that the company had achieved a lot and was now
a much more confident organisation than it had been:
From a position earlier, where we had almost become afraid of growth, we have
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been able to reintroduce growth everywhere. We have also changed from a
culture of being the number two challenger company (we try hard but everyone is
better than us) to being a leader. We lead the game, we do not follow. That has
been a big shift in the organizational mindset. We are now a billion euro company
and we will take the fight to the battlefield.
He was also conscious that this success would need to be nurtured in years to come, and
“what got the company here may not get it there”. In particular, the company needed to
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become more comfortable with taking calculated risks:
The company took a lot of poorly thought through risks that did not pay off. We
have dramatically reduced these kinds of risks and have created a culture of
successful execution. But we may have been so successful on this front that I sense
a growing fear of failure. And yet we cannot operate in a growth market without
taking some risks. We need to continue doing what we are doing which is the core,
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but we also need to create the future core, and we also need to create some
disruption and innovation around business models that can look out even further.
He was also beginning to think about how to ensure that the changes he and the rest of the
PhLT had made in the organization would outlast them, as they were all likely to move on to
other jobs within Unilever in the not-too-distant future:
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We are beginning to change leadership and three of our top team members have
moved on because they have got bigger jobs. We need to ensure that a change in
our leadership or in our context, either internal or external, does not change us
and bring us back to where we were.
Rohit was looking forward to the two-day off-site with the extended PhLT to make progress
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on these fronts.
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Exhibit 1
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Key Members of the Philippines Leadership Team
Rohit Jawa, Chairman and CEO
Rohit joined Unilever in India in June 1988 as a management trainee after completing an MBA. He
spent 16 years with Hindustan Unilever in marketing and sales roles. In May 2004, he joined Unilever
Vietnam as Vice President – Marketing. In November 2006, he moved to Singapore as Vice President
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– Laundry Category and Global Brand VP. In November 2010, he joined Unilever COO Harish
Manwani’s team as Senior Vice President – Global Marketing Operations. He joined Unilever
Philippines as Chairman and Managing Director in September 2013.
Gina Lorenzana, Vice President – Personal Care

Gina joined Unilever in the Philippines in 1992 as a management trainee. She spent five years with
Unilever Philippines in marketing roles, and then moved to Unilever China in June 1997. She returned
to the Philippines in January 2000 as Marketing Director – Home Care. She then moved to Unilever
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Indonesia as Marketing Director – Hair Care in October 2001. She moved back to Manila in June 2004
as Regional Brand Vice President for Deodorants for Asia. She became Regional Category Vice
President for Deodorants for Asia, Africa and the Middle East based in Singapore in January 2006.
She returned to Manila as Vice President – Personal Care for Unilever Philippines in June 2012.
Benjie Yap – Vice President – Home Care and Foods

Benjie joined Unilever Philippines as a management trainee in 1994. He spent his first seven years
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with Unilever in R&D roles, then became Managing Director – Foods for Unilever Philippines in
January 2006. He moved to Unilever Thailand as Vice President – Home Care in October 2009. He
returned to Unilever Philippines as Vice President – Home Care and Foods in January 2013.
Suresh Rai, Vice President – Human Resources

An MBA graduate, Suresh did an initial stint with P&G in the Supply Chain function. He joined
Unilever in India in 1998 where he was an HR Business Partner for a factory, an R&D Centre and at
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the corporate head office. He then moved to Singapore as the Asia Learning Director in 2006.
Thereafter he moved to Shanghai as Leadership Development Director for Greater China and
Northeast Asia in September 2008. He returned to Singapore as Leadership Development Director –
Global Markets in June 2011. He joined Unilever Philippines as Vice President – Human Resources in
July 2013.
Ajay Gandhi, Vice President – Finance

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Initially trained as a Chartered Accountant, Ajay joined Unilever in India in July 1997. In March 2007,
he moved to London as Planning and Performance Management Director for Unilever Global. He then
moved to Unilever Indonesia in August 2009 as Finance Director for the Home and Personal Care
Division. He joined Unilever Philippines as Vice President – Finance in October 2012.
Ronny Krisnanto, Vice President – Supply Chain

Ronny joined Unilever in Indonesia in August 2008 as Customer Service Director, and then became
Planning Director in June 2011. He joined Unilever Philippines as Supply Chain Director in June
2012.
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Ed Sunico, Vice President – Sustainable Business and Communications

Ed joined Unilever Philippines in 1991. He moved to Unilever Vietnam as Communications Channel
Director in February 2007. He returned to Unilever Philippines as Media Director in September 2010.
He became Media Director for South East Asia and Australia based in Singapore in January 2012. He
returned to Unilever Philippines as Customer Development Director for Distributive Trade in April
2014 and took on his current role as Vice President – Sustainable Business and Communications in
April 2016.
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17
os
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Philippines: Strong Consumption Story
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Exhibit 2
Source: Presentation by Rohit Jawa at Unilever Investor Event, Manila, 20 November 2015
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No
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Copyright © INSEAD
t 18
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rP
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Unilever Philippines Strategy Overview
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Exhibit 3
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No
Do
Copyright © INSEAD
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19
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rP
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Unilever Philippines Talent Strategy
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Exhibit 4
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No
Do
Copyright © INSEAD
t
20
os
rP
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Doing More with Less
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Exhibit 5
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No
Do
Copyright © INSEAD
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21
os
rP
yo
Simplify with Project Half
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Exhibit 6
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No
Do
Copyright © INSEAD
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22
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rP
yo
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Core of the Core
Exhibit 7
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No
Do
Copyright © INSEAD
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23
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rP
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Sustainable Growth – Doing Well and Doing Good
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Exhibit 8
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No
Do
Copyright © INSEAD

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IN1411

Initial Impressions, 2013

return in 2012, and she found a striking difference in atmosphere:

passing them on to sales.

The Boom & Bust Phenomenon

A New Philippine Leadership Team (PhLT)

Rohit’s Brief from the COO

The Big Picture – Executing the Turnaround

The second was to become a disciplined execution machine because we needed

Determining the Way Forward

the way forward:

their products better.

Brand development is global, and brand building is responsible for locally

Development of the PhLT

Fixing the Sales and Operations Planning (S&OP) Process

Supply Chain, explained:

How the PhLT’s Cohesiveness was Achieved

Enablers of Collaborative Behaviour

Rohit’s Characteristics and Contribution

Rohit is a smart, structured leader. He is very left-brained. Being a very logical

He is very strategic and data-driven, which really helps. In a complex

We have consciously and gradually brought in great people. At present, 60-70%

Empowering Middle Managers

Focus on the Core

Core Of The Core (COTC)

Identifying the COTC SKUs

Prioritizing the COTC

Expanding in the White Spaces

When we launched Dove, we resisted the temptation to launch new innovations.

region. As Ed Sunico explained, there seemed to be an opportunity to increase sales in certain

the different functions.

Gina Lorenzana, Vice President – Personal Care

Benjie Yap – Vice President – Home Care and Foods

Suresh Rai, Vice President – Human Resources

Ajay Gandhi, Vice President – Finance

Ronny Krisnanto, Vice President – Supply Chain

Ed Sunico, Vice President – Sustainable Business and Communications

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