Delivering on the Promise of Digital Transformation is part of Unlocked: A Virtual Summit by Syniti. This session features Rahul Welde, Executive Vice President of Digital Transformation at Unilever.
Rahul Welde (0:1:45)
Thank you for inviting me to share my experience and perspectives on digital transformation. Before, I jump in there. Most of you will be familiar with Unilever, you will know us through many of our brands, many famous brands like Ben and Jerry's, Lipton, Dove and many, many more.
Now, as you can imagine, as a global company, our landscape is very diverse. Firstly, with the global footprint and equally in terms of the brands and the categories that we are present in. Now for over 120 years, we have served people to our products. So there's a very rich legacy, a lot of strength, a very widespread presence.
And in many ways we have been over these years, pioneers innovators and futuremakers in the area of CPG or fast moving consumer goods. Over two and a half billion people use our products every day across the 400 plus brands and more than 190 countries. Now, the reason I say this is just to give you a sense of the diversity and the complexity which we're talking about over here.
Now, we've got a purpose as a company and our purpose is to make sustainable living commonplace. We sell everyday products to everyday people to help them to live well within the limits of the planet. And fundamentally, we operate with a multi-stakeholder model thinking about all our stakeholders, whether it is our suppliers, whether it's our employees, whether it's our partners, whether it's our shareholders. And of course this multi-stakeholder model is really at the core of what steals our decisions and shapes our actions.
Now, in this context and with what's happening in the world, particularly in the world of technology and how technology is changing lives, digital transformation is a very key imperative. And we see that as a key imperative to winning in what we call the connected world.
Now, we all know that technology is changing very rapidly. It is evolving very fast and as an organization, we need to keep pace and in doing so, we have to consistently assess how do we raise all the boats together? Where do we see maximum benefits and leverage? How do we create value through technology and data?
Before I jump into this, just a common question that gets asked very often, how are we as Unilever responding to the COVID crisis? What are some of the priorities? How does technology data distill fit into that context? And I like to think of five areas of focus that we have as a company and each of these, there is some impact on the... Of technology, digital and data.
So the five areas of focus are our people, supply, demand, community and of course, making sure that we are resilient and we are managing the business in a manner which is sustainable from the perspective of ongoing operations.
Just as an example, if I think of people, of course, safeguarding people and their wellbeing is our number one priority. No question. But equally making sure that we're able to allocate and reallocate resources flexibly. This is something that has been powered largely through technology.
Similarly if you think of demand and the fact that, we sell everyday products in everyday stores, a big change that has taken place during the course of the crisis is the virtual boom of e-commerce and the change in demand patterns, whether you see it in the context of channels or categories.
Again, your data digital and technology plays a very important role. No surprises then that when we think of supply, it's the same situation where on an agile basis, we have to manage our entire operation so that we are able to fulfill the demand that is taking place. Like I said, in some cases going much higher, extremely vibrant categories in certain cases, very vibrant channels as well.
And lastly, when we think of communities right from the early days of COVID, we've been guided by our multi-stakeholder model that I mentioned earlier, and that includes our commitment to use our scale as a force for good, and to ensure that we have supporting communities, both in countries, as well as on a global basis to support different aspects of the communities during the course of this crisis.
Now, in each of these areas, we are using technology, digital tools and data. Just, again, as an example, we use internally a tool called Flex Resourcing and Agile Working, is basically a digital internal talent marketplace that matches employees who have some capacity with the opportunities to do something interesting and new types of work, where there is a higher demand.
So this kind of adaptability by redeploying teams, from areas of low demand to areas that are seeing high demand, we've been able to unlock practically within a period of a few weeks and already over close to about 3000 odd people have been redeployed in this kind of manner approaching Flex as the digital tool.
Similarly in supply chain, analytics and different ways of operation planning, procurement. And we've been able to develop new sources for thousands of materials. A lot of that has been enabled by data and technology. And the same way in the case of e-commerce basically creating new content and making sure that we are able to identify demand, right? And service them through superior conversion marketing.
Now, many of the trends that we have talked about, or I mentioned now are going to accelerate and many of them are going to too stay. One of them, for example, is clearly online shopping and online media consumption. And many of the others, we have some change. Some of them will have lasting impact.
So we can take a step back even to the pre-crisis days and what is likely to be post-crisis, clearly data and technology will play a very important role in the transformation of an organization. Certainly for you and equally, I would say for any company.
What are then the three most critical aspects of digital transformation?
And I get this question very often, and I think it's fair to say that firstly, we have to see all of this from the constructing of powering growth on one side and therefore having a group behind it and similarly using it to save costs or drive efficiencies. And through growth, as well as driving efficiencies of costs, we can see that these are two fundamental ways to create value using technology and data.
Now, any transformation and particularly digital transformation will have three and nodal points. First of which is technology, quite obviously in this case, we are discussing technology and digital transformation and therefore that's absolutely important in lifting the table, adapting, adopting, embracing new technologies, bringing them to the business, absolutely critical.
However, it's really important, especially for organizations which have strong heritage, big legacy, a lot of history to re-engineer the processes to match up with the new technology. So this re-engineering of processes to keep insync with technology is very important.
And lastly, it is about people because there is a large number of people who are operating these processes operating in the real world, and therefore, to ensure that the people are transformed and that they are able to lift the table, whether it is in the form of cultural skills, is very important.
Generally speaking, transforming along all of these three vectors technology, process, as well as people and ideally in a very good balance. This is very, very critical and more often than not, you will see that something goes off balance and the whole transformation slows down. So technology races too fast ahead, processes don't keep up. There's a problem processes change where technology doesn't back it up, it is a problem. And technology and process are very advanced, but the culture of the organization, the culture of the people, the skills don't keep pace. Again, there is a problem.
So striking a balance on this triangle and lifting the entire triangle in its entirety becomes a very important aspect. Now beyond doubt. And this is not just a cliche, but consumers and customers have to be at the heart of change and have to be the heart of any business. And the context of digital transformation is not just the external consumer or the customer, but also our internal customers. Especially when it comes to process re-engineering driving cost and efficiencies out and making sure that we actually fit in terms of the operations.
Very often a common question that is asked is, are you now a mobile first organization or a design first organization? And the consistent response which I have and certainly any of my colleagues, we all advocate is about being consumer first.
Now this is really important, particularly in a consumer goods organization so that we don't get swayed by all the tool tech and the digital technologies, but stay focused on the fact that at the end of the day, our role is to make sure that we're serving up the customers very well. Now this is true for us as a consumer good business, but I would argue that this is true for all businesses.
The second aspect is about data and this is potentially a great fuel for relationships for superior decision making and clearly the game changer in recent times. Now I wouldn't use the cliche of data as a new eye simply because of what the markets have been in recent weeks.
There is absolutely no doubt that data is powering a whole lot of transformation that's taking place.
Whether it is on the side of driving growth and understanding demand and serving consumers better, or it is on the side of driving efficiencies in a better manner.
And of course we discussed briefly about culture and arguably this is the most difficult, consumes the most time and attention. And in my experience, it requires maximum attention, especially from leaders. Now very clearly the one other important stakeholder where this student technology is making a big difference is in the area of employees and people, right? We have over a 150,000 employees, like I said, spread across hundreds of countries that we present in.
And this is a great interest because like I mentioned at the beginning, when we think of the triangle of technology process and people, culture of people, skills and therefore, when you think of employees, you can think of leadership on one side and culture change, up-skilling current employees on the other. And the third dimension I would say is about injecting new talent and new energy into the system.
Just if you look at our recruitment process, an example of where we've been able to deploy technology and data, we are now screening applications and running the processes very, very differently. We have over a million people applying each year in several countries we are the employer of choice. Absolutely number one and we rank alongside the very best when it comes to that.
We are using new tech, AI, various specialists and partners, basically an online platform is not supported to bring the screening. So think of it like there's some kind of gamification, so selection of tasks is game, which tests the aptitude, logic and reasoning of the applicants.
We use algorithms to assess the suitability and move them into the next phase of the process, which is typically a video interview, which again, looks at data and key points to determine whether the candidate is a likely or a good fit. And several thousands of hours of manual interviewing time. And assessing candidates has been saved thanks to automation analytics of this new screening system.
Now more importantly, this enhances the quality, it removes the human bias and it enables a superior recruitment. Another huge benefit is that we have been able to... Because of the fact that we've been able to do it this way, we've democratized and made it far more even, and enabled us to reach out to many more candidates, to widen the pool or on pool from then, we hire.
So there are many benefits which we've been able to bring to bear, if I just think of the recruitment process and what we've done. In the same fashion when I think of upskilling, this is again very important, especially for a company like us, which has a very diverse workforce, very spread out and it's multi-generational in some ways.
I think most organizations are multi-generational where we have some people who are entering as digital natives and quite a few who have been there for some time and are actually not digitally native. So for us who run a massive scale digital learning program to proprietary platforms like Connected World, as well as some of those with multiple partners, we're talking over two million sessions, ensuring that again, we are lifting the entire table of the organization.
Without digital and learning platforms, we will not be able to provide a smart and a fast way to develop and measure team skills.
And I say, develop and measure because now thanks to technology and data we also have a very good view of where the skill sets lie. What are the skills have gaps, sort of a heat map, which actually shows, where we need to actually spend time, make some intervention so that we are able to change the profile of skills of our people.
Another big transformational shift on the people's side that directly relates to digital transformation is on the way we work in the organizing all across many parts of our operation we have now adopted agile ways of working, forming scores, focused on few goals, working in Sprints. This has become not common lexicon wheRE most organizations or estimate that capacity and all of us as leaders, as organizations believe that culture change we have the capacity to impact. We over estimate in many ways, our capability and equally for the most part, we underestimate the challenge.
So this overestimation, underestimation paradoxes, it applies definitely to culture change and arguably it applies to many other transformation areas as well. But for the most part, I think that culture to change is very important. For us, as you can imagine, it's a foster and endeavor to make our culture will open, more adoptive, more resilient, more fast paced and more consumer centric.
And if I were to call out three behaviors, which are very important for winning in the connected world, we call them the connected for group behaviors. These are about collaboration, empowerment and experimentation. And for obvious reasons, collaboration, because that is much more skill capability and potential out there when we begin to collaborate, especially with the external world equally ensuring that internally there is a high level of collaboration.
I think the new world and the tech world requires us to move fast and therefore, to be able to empower people down the line. A greater degree of empowerment is not possible with sophisticated analytics, more data and measurement.
And even as we are doing collaboration and empowerment, the one area which is super important, especially when it comes to transforming the culture is the area of experimentation. Ability to move fast, ability to experiment, take greater risk. So these are some of the three areas. Actually, there are many more dimensions of culture with three call-outs, which I would say are important when we think of digital transformation.
One of the ambition that we've set is for us to develop more direct relationships with over a billion consumers. I remember I mentioned earlier that every day we touch about two and a half billion people one way or another through our products. And what if we converted a billion of these relationships or a billion of these contact points into more direct relationships?
We run a data driven marketing program, a relationship marketing program, and a building, a fundamental capability. We call it the Unilever Cloud Capability. It's now active in all major markets, over 30 countries.
Similarly, people data centers, which we now got implemented over the last few years. These are again, operational in 30 countries, spread across the world. And effectively what they've been is a great source for insights for tools, really our ears the ground on what is happening and high quality analytics.
And no surprises then that in a crisis like the current situation, these have been extremely useful in detecting patterns and trends in enabling dynamic responses. This is really the hub or the core capability with powers, analytics and engagement center of excellence.
Now these insight data capabilities that I spoke about to, whether it is data driven marketing or are people data centers, are insights and communication and engagement. But also innovation as we begin to co-create products with consumers.
So think of some of the fun Ben and Jerry's flavors that you might've come across. Many of them are actually designed with consumer participation and consumer participation, in the nature of a much more extended involvement and engagement from consumers beyond just social listening or beyond commenting or giving inputs.
And similarly, when we think of the front end and how we reach our consumers now, whether it is programmatic trading, whether it is our own proprietary trading desk, which we call Ultra, these are all capabilities, which are fundamentally technology and data linked. I'm just using these as few examples to bring to life some of the things that we are doing when we say technology and digital transformation.
Now, naturally we can do all of this, but in our business. And for that matter in most businesses, it's important that we have rich engaging content. Stuff that looks beautiful and that we can bring to life for our consumers. And yet we've set up a capability which we call U-studios, which actually enables us to produce high quality content at very agile, fast speeds, snackable content, and bring it to life for our consumers.
When you think of all these, these are basically digital hubs. These are not just our internal employees, but in many cases, also our partners. And in fact, in the connected world, partnership plays a very important role, much more than it has ever been. For greater speed and collaboration we're most critically also so that we can leverage and harness the expertise that lives outside the organization.
Now, I want to reiterate the point of consumers at the center, and this is usually just a mother of phrase or something that we strive to bring to all decisions and experiences and more recently using data rather than just our intuition and our past experiences.
So do we understand the consumer journeys well? Are we delivering great experiences across key touch points? Are we measuring and optimizing? Is there continuous improvement? And data and tech are enabling more targeted marketing, deeper engagement and strong connections with our consumers.
This is really about how we work with our retailers, how we work with our distribution partners. And this new technology is data is relevant over here as well just as much as it is for consumers. In our case, there are many distributors, wholesalers, concessionaires, retail outlets. We're talking millions of customer partners, who we deal with on a daily basis.
So we not only dealing with a new digital media out of consumer landscape, but we're also dealing with the new retail landscape. You have e-commerce gears pure-play as well as groceries, which are extending their presence into e-commerce, whether it's through walmart.com and many other partners.
Now this of course is a big change in the retail landscape. And as you can imagine, especially as more and more retail goes digital in one way or another, digital data technology is playing a very big role in how we working with them. Now, we talking of 25 million outlets or different partners that we touch. And with the retail world changing very fast. We have to recognize that the consumers no longer just shop in one place, they're using a variety of channels, both online and offline.
So it's not only the activation of e-commerce. If you think of the current crisis, it is also the resurgence of proximity channels. Neighborhood stores. And therefore adopting a multi-channel approach, which understands the entire channel interface becomes very important in our kind of contexts. And more or less, I think all businesses now experience that when it comes to sales channels of business channel, now there is a multi-channel approach. And no longer is it about just servicing a particular type of channel.
Now what digital technologies enabled us to do is to enhance the level of service.
So superior service at lower costs, and indeed better relationships with our customers. Again, this is not something which is only on the customer end of the operation, but across the operation and supply chain with those factories, logistics, digital wiring enables efficiencies, costs, benefits, and faster response times. And no surprises [inaudible 00:23:03] analysis the level of service and the quality of what we do.
So there are plenty of examples in this, across our factories, [inaudible 00:23:14] supply chain, planning efficiencies. Most importantly, this enables us to take a different view of the entire operation and shift... Decision making shifts analysis, which becomes far more data driven and specific in terms of enhancing the quality of the entire operation.
So in many ways, this digital rewilding is a crucial part of changing the operational interface when it comes to transformation. Perhaps the most frequently asked question and something that all of us are tackling when it comes to transformation, whether you're at the C level executive or whether you're operating manager, these are some of the challenges which we always confront.
I think the number one challenge relates to prioritization and dynamic resource allocation. Particularly when it comes to the world of digital and technology. There are so many possibilities, especially when you think of a large enterprise. Practically speaking, every day that has changed everything that is new stuff happening, all of them with very compelling narratives and how they benefit business.
And what we have to do is we have to constantly ensure that we remain grounded by the objectives, imperatives and practicalities of running business, but anchored towards a vision, which is about the future and where we want to go. Ensuring that we don't get carried away by the toolness because there's lots of it. And let, in some ways the focus get derailed. But at the same time being innovative, experimented being agile and improvising and pivoting. Now this is easier said than done because in many ways you are managing these paradoxes.
What is the biggest challenge in driving a transformational agenda?
It is this idea of prioritization and managing the complexity, managing the competing asks. You wish everything can be done can be resourced, but it can be. How then do you decide? What is the North star? What's actually the guiding principles. How do you bring this to take the organization with you? These are some of the important dimensions when you think of prioritization and this area of dynamic resource allocation.
The second challenge or issue relates to speed and stamina. And for sure, when we think of transmission, one of the words that we talk about always, and I mentioned it very often as well, that speed is the new currency, being fast is very important. We talk about agility at length. Sprints have become very common lexicon when we talk of companies and what they're doing, and we always talk about being fast. So there's one thing that you ask anybody, whether they're leaders or otherwise, they will always say that, "Look, they wished they had been faster. They wished they had been faster."
I think we need to be fast for sure, in what we deliver and how we deliver. However, it's also important to be very methodical in how we run the entire race. And particularly for an organization, which is large sized, this needs to be well thought through given the number of stakeholders and considerations. Sometimes a diverse footprint is an important one. Sometimes it's just a vast variety of categories that you're present in can be another.
So consistency facing, keeping up, being resolute. All of these are very critical. And I would suggest that stamina, is just as important as speed. Very rarely do we talk enough about stamina, if you think of most places, most of the stuff gets talked about is about speed and sprints, but equally I think it's important to keep stamina.
The third, and this gets interesting depending on the footprint of how the company operates, where most big companies, global organizations always face this. And that is really the idea of global, local or glocal. Now the dynamics between global and local diversity of the landscape, the consumer habits, cultural nuance, is difficult to make sure that everyone is getting what they want.
Now, this is a cold reality where the world is diverse and while it has become flat, that the reality is that there are local nuances, which are taken into account. So at times it is about a global intervention or a capability or an approach which gives leverage of scale, which really makes sure that the entire organization is benefiting. And at times it is about very locally relevant solutions.
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In the end, it is about winning in the connected world and therefore to have an open mindset of global for global, local for local, or as we call it internally glocal, a high impact and relevance rather than being either mindlessly global or hopelessly local.
I think it's really important that... Especially for those engaged in global transformation and global aspects, keep this in mind. Now there's no doubt that when you think of what's happening, changes are constant. You've heard that all the time, we all experience it every day. More so than ever, things become more uncertain and get more volatile.
So this is true in all its aspect, especially when it comes to tech. It is happening fast. And in some ways I think about it, just as one agenda item is delivered and you kind of feel that an objective is achieved, that a milestone is crossed. There is new advancement within the space, and you have to start all over again. Even if you don't start all over again, you certainly look at the next horizon and say, "You've got to start."
So you feel like you've conquered a mountain before you've taken a restful breath or a celebratory moment you look up and see another large mountain head. And this journey continues now. Absolutely important that the mindset, therefore, when it comes to digital transformation, certainly I try to embrace it. And I encourage all my teams to embrace it all the time is through get great confidence from the mountain that we've conquered and at the same time, see with excitement, the journey and the new phase that lies ahead.
So in summary, really, I think digital transformation using technology data and all the tools that the tech world presents us is a very, very exciting opportunity for change. A great opportunity for businesses who serve consumers better, to serve customers better and to impact organization wide change so that we can benefit for the larger, good of our consumers customers. And especially in a Unilever like context, really the benefit of auto multiple stakeholders.
So that's it from me really. Thank you very much for your attention and time. And wish you a safe and restful time in the next few weeks, months of what is likely to be an uncertain period to come. And more importantly, a great transformation journey for whether it's yourself or your families that lies ahead. Thank you very much.
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