Unilever CFO Srinivas Phatak is leading one of the most ambitious and focused agendas in the consumer goods industry. Srinivas sat down with BCG managing director and senior partner Mai-Britt Poulsen to explore a challenge that sits at the heart of every executive agenda: How to connect bold strategy with disciplined execution in a world that’s moving faster than ever.
Srinivas shared his views on how Unilever is performing and transforming at the same time:
- Unlocking growth with discipline, pace, and accountability across the organization
- Redefining leadership in AI (where to lead, where to follow)
- Balancing a microscopic view of today’s delivery with a telescopic look at the horizon
The interview has been edited for length and clarity.
Unlocking Growth
You have been at Unilever for over 26 years, and yet the company looks different today than it did even 18 months ago.From your vantage point as CFO, what are you most excited about in terms of where Unilever is headed?
There’s a lot of energy in the way we are thinking about the business. The CPG industry in the past few years has seen a fundamental transformation. So in this context, Unilever is different, and it’s coming through in everything that we do. If you see from a portfolio perspective, we clearly made choices and today we are anchoring ourselves towards more an HPC pure play company. You've seen us demerge our ice cream business. You've seen us now anchor on combining our foods business with McCormick, and we are continuing to do bolt-on acquisitions. So the combination of all of this means that we are making our resource allocation choices where there is growth, where there is outperformance.
What's exciting for me is the strategy and the financial goals are absolutely aligned. And I have to say this: For me, it's never been more exciting than it is today.
From Ambition to Impact
So, the plan is clear and it's a very ambitious agenda. How do you think about execution with discipline, pace, and accountability?
There are four things that we are doing differently here. We are ruthlessly focusing on outcomes. And the three outcomes are: volume-led growth model, a gross margin-led profit expansion plan, and cash. So, it's growth, it's profit, it's cash.
Second is really driving accountability. Ninety-two percent of our P&L is within the business groups. So end-to-end responsibility, we are managing it as comprehensive commercial units. The accountability sits there, the decision making sits there.
The third thing that we have really done is in terms of really aligning performance to delivery, which is again back to top-line, bottom-line, and cash.
The other element for us is to reward and compensate people for the performance they deliver. It's not a reward conversation. It's actually a performance culture conversation.
And the last change is a big cultural shift. We focus on what matters. There's no shying away from taking accountability and responsibility. Execution is not about relaying it once, execution is about breathing it day in, day out. We articulate execution for us inch by inch, store by store, SKU by SKU, and day by day. If we do this, quarter and quarter of results follow.
Where to Lead with AI, Where to Follow
From your point of view, how do you think about AI spend, AI investment, and how do you know, as the CFO, whether it's working or not?
The only decision that we have to make when it comes to AI is where do we want to lead and where do we want to follow. Where we want to lead is in demand creation. We want to create and we want to spend in terms of product innovation. We want to invest in R&D. We want to find a way to get our messaging on digital faster.
There are other areas when it comes to efficiency, when it comes to operations. Call it planning, call it finances, call it controlling. I don't want to lead here because, to me, these are a commodity. The industry will shift, new standardized models will come into being, costs will drop. And there, I'm very happy for us to be a fast follower.
So, I'll end with where I started. For me, it is a resource allocation choice, not a technology choice. We'll lead in the areas which matter. We'll follow in the others.
The CFO’s Dual Lens
It's really about having a microscope and it's about having a telescope. Microscope for me is all about managing here and now—winning for today. This is where I would say, me as a CFO, we actually put out clear KPIs, clear markers of what we want to drive.
The other element is about a telescope. This is where we need to really see around the edges. We need to think about horizons as to how is the industry changing, where is disruption—whether it is brands, whether it's segments, whether it is channels—where the profit pools are, and therefore how we are aligning this organization and shaping this organization to lead for the future.
I think if we do this well, we'll continue to drive a better Unilever. We will drive a Unilever which is driving value for the shareholders, while absolutely doing what is right as a responsible business and therefore also doing right for the multiple stakeholders.
Thanks for taking time to speak with us today. It's great to see where Unilever is headed.
Thank you, Mai-Britt. My pleasure.
