Advertisements
 

Why Unilever’s Chrysalis was no butterfly

July 5, 2010

“Odd” was how one highly placed Unilever source described the food, toiletries and detergent giant’s decision to scrap its innovative Chrysalis unit after only two years. Odd indeed: its disappearance is as enigmatic as its existence in the first place.

Chrysalis was a kind of wholly-owned incubator, in which Unilever stored some of its most treasured “local jewels”, such as Marmite, Pot Noodles, Peperami, Slim-Fast and Bovril. Altogether, there were 14 of them, stretching across 3 markets: Germany, France and Britain. These brands had one thing in common. Their quirky, national character possessed almost no transborder appeal. On the other hand, put together, they added up to a £500m business – no small change.

Unilever never made the rationale of Chrysalis entirely clear, leaving journalists and City analysts to fill the vacuum with speculation. Unilever’s one categorical utterance on the subject was that the brands were not for sale. Which the City boys (such as Citigroup) took to mean the exact opposite.

Look at the company’s strategy, One Unilever, they said. It’s all about multinational power brands such as Axe/Lynx, Persil, Dove and Wall’s. What possible role could tiddly, if charismatic, brands like Marmite have in this? By way of justification, they pointed to various strategic disposals the company had been making around the world: Boursin in France, a Brazilian margarine company here and an American detergent company there. Second, they pointed to an inherent contradiction in running these highly localised brands out of a central organisation based in Rotterdam; meaning Chrysalis must be a short-term expedient. And third – the clincher – Unilever had deliberately segregated its minor brands into two categories. There were those – like Colman’s mustard and PG Tips – that remained in the main Unilever fold and then the rest – the black sheep so to speak – which had been hived off into Chrysalis.

So much for that theory: all the black sheep have now been herded back into the main fold  – under the name of Incs (Incorporated Businesses) – leading Investec analyst Martin Deboo (for one) to conclude ruefully that rumours of a sell-off were overcooked.

I’m not so sure. The obsession with a brands sale seems to have arisen from a partial misunderstanding of Chrysalis’ purpose in the first place. By the same token, its dissolution cannot be regarded as a guarantee the brands will remain in the long-term ownership of Unilever.

First, the creation and purpose of Chrysalis. Admittedly, in the past, these brands might have ended up in the hands of private equity companies. But by 2008, the date of Chrysalis’ origin, such funding was already becoming very tight. At one level, the unit was clearly intended to keep them financially afloat. It was equally apparent, however, that – put in the hands of semi-detached entrepreneurial managers – Chrysalis would serve as a nifty brand laboratory whose lessons could be imported into mainstream Unilever culture.

The man chosen to lead this alternative operating model was James Hill, who had a considerable track record behind him as first chairman and md of Lever UK, the Unilever detergent arm, and subsequently senior vice-president marketing operations Unilever Europe.

Whether under Hill’s leadership these 14 brands actually made significantly more money for Unilever I have no idea (but some doubts). More evidently, his brands did succeed in making a lot of positive media noise for big, boring Unilever and embarked on some interesting experiments.

Marmite is a good case in point. During Hill’s stewardship, the brand name has finally passed into the English language as a metaphor of sharply contrasted appeal. Marmite led the way (well, co-led it with HMV) in pioneering temporary “pop-shops”. These exploited high-profile retail premises left fallow by the recession to merchandise 100 Marmite-branded products, including food, clothes, art and even Christmas boxes.

I seem to remember Marmite also made skilful use of its brand personality to keep itself front of mind during the late, long-drawn-out, election with a “Love Party versus “Hate Party” campaign featured on a specially devised website, http://www.marmitenewsnetwork.com.

The Marmite campaign soon amassed some valuable political capital when Nick Griffin, leader of the BNP, decided to do some passing off of the “Hate Party” – complete with hijacked Marmite logo – in his own political broadcast. Threat of legal action by Unilever not only forced a humiliating climbdown by Griffin, but caused him to lose his irreplaceable webmeister in the media furore that followed.

Enough of Marmite. Let’s also consider Peperami. The sado-masochistic salami brand created a bit of a sensation last year when its group marketing manager, Noam Buchalter, fired Lowe – its agency of 16 years – and solicited members of the public to come up with ideas for the next ad campaign. Crowdsourcing, as it is called, is increasingly trendy these days – a kind of marketing analogue of social media. Walkers used it to some effect recently when coming up with a new crisp flavour. What’s far less usual is to fire one’s ad agency in the process. This heinous act sparked an explosive debate in creative agency circles, the gist of it being that Unilever is a cheapskate, seeking to circumvent agency fees with inexpensive ideas sourced through the internet which achieve, at best, tepid success. We have yet to judge, in Peperami’s case. More importantly, however, the Peperami crowdsourcing episode was a first for Unilever which succeeded in capturing the attention of new chief marketing officer Keith Weed. One of Weed’s first initiatives on taking over from Simon Clift earlier this year was to approve a crowdsourcing drive for 13 of Unilever’s biggest brands, including Wall’s, Lynx and Dove involving the same $10,000 “bounty” for the lucky winner.

Weed has subsequently felt the need to back-pedal, and reassure agencies, on the issue of crowdsourcing. In an interesting and wide-ranging debate with WPP ceo Sir Martin Sorrell at Cannes (where Unilever was declared Advertiser of the Year) he had this to say:

“In general, I’m not going to use crowdsourcing as a substitute, with the exception of Peperami.” Consumer-generated ideas, he added, are merely a way of allowing Unilever to “pilot and test things”.

Which brings me to why Chrysalis was eventually ditched. At the beginning of this year, James Hill moved to another Unilever job, that of chairman of Italy. Buchalter has also quit, to become a consultant. It would be easy to surmise ‘writing on the wall’ here. I doubt that is the case, however. There is an exactness about Hill’s two-year term that suggests this was a valued Unilever “lifer” taking up a new turn of duty. More likely the closure has come about because the new top management team, led by ex-Procter & Gamble executive Paul Polman, couldn’t see Chrysalis’ long-term relevance. Indeed, Weed specifically referred during the Cannes debate to Polman’s decisive influence in making lines of communication with the consumer simpler and more direct. A complex hybrid operating system, and a business culture licensed to be irreverent, may have had no place in his thinking.

Does the dissolution of Chrysalis matter? In the short term, no. Matt Burgess, formerly managing director of Chrysalis UK, remains in charge of the Marmite, Bovril, Pot Noodle and Slim Fast brands as md of the new “integrated” unit Incs. I suspect, however, that some of the fizz has come out of the laboratory idea, that the future of the brands will be more pedestrian, and their value more meticulously cost-accounted.

Advertisements

The truth about Simon Clift’s exit from Unilever

March 23, 2010

We all know that Simon Clift, chief marketing officer of many years’ standing at Unilever, is stepping down. What’s less apparent is whether the imaginative, regenerative campaigns associated with his tenure are also on the way out. Clift inspired or was responsible for, among others, Dove Real Women, the award-winning Axe/Lynx campaigns and Persil’s Dirt is Good.

There are some reasons for supposing campaigns such as these may be casualties as new Unilever chief executive Paul Polman tightens his grip on the organisation and cements in place a new top team. Polman, in a move unprecedented in Unilever’s history, was parachuted in over stiff internal competition to fill the role somewhat over a year ago. Immediately he came from Nestlé, but the important thing to remember is his 27 years of experience at arch Unilever rival Procter & Gamble. He’s a marketer, Jim, but not as Unilever knows it.

Some commentators see the hidden hand of P&G training in accelerated product extensions and more emphasis on “moment of truth” style promotional advertising since Polman’s arrival. They surmise that action-oriented Polman – who has had a fair degree of success so far – was unsympathetic to Clift’s subtler, slow-burn approach. They detect a more dictatorial, metrics-driven attitude to agencies, which bodes ill for “open source” creativity.

But that view is by no means universal. One former Unilever employee (who will remain nameless, but spent 15 years at the company) sees Polman as a breath of fresh air, sweeping away the cobwebs of “nepotism and empire building”. “The fact was,” the source tells me, “Unilever never was a meritocracy and every move had to be ‘sponsored’ by a corporate elder. Clift epitomised this culture more than anybody.”

So two very different perspectives on the Clift era. Further insights (on a strictly confidential basis) very welcome. In the meantime, there’s more on Polman cracking the whip and changing the guard in this week’s magazine column.


Polman picks Weed as Clift successor with turbo-charged communications role

March 5, 2010

Congratulations to Keith Weed, who has just been appointed Simon Clift’s successor as global CMO at Unilever.

In fact, there’s a little more to it than that. Weed’s actual title is chief marketing and communications officer. Which means that in addition to Clift’s former responsibilities, ranging from strategy down to marketing communications appointments, Weed will also have PR under his belt.

Paul Polman, the Procter & Gamble-bred chief executive of Unilever, has made no bones about this representing an elevation of the marketing function at the company: “This is the first time Unilever has had a CMO at the top table and is a key step to having a sharper consumer focus in the company.” All of which might seem a little hurtful to Clift, whom many of us had supposed was pretty near the top table himself. One thing he did not have, it seems, was the ear of the chief executive – or not this one at least.

Weed, 48, is – like Clift – a Unilever lifer. An engineering graduate, he joined Unilever in 1983 as a trainee and is currently executive vice president of home care, oral care and water. He’s well known and liked in the industry and was president of the Marketing Society for three years from 2003-06. In his spare time he’s also a non-executive director of Sun Products Corporation and Duchy Originals.

The fact that Polman has picked an insider would seem further proof that the rift between Clift and Polman was personality-driven rather than something precipitated by differences of opinion over “strategy”.


Wheldon on the way out at Vodafone?

February 9, 2010

All change in the world of chief marketing officers, it seems. Another CMO-type who appears to be heading for the exit is David Wheldon, global brand director at Vodafone.

Certainly, the headhunters have been alerted.  Cause of imminent departure? It would be guesswork, but guesswork along the same lines as Simon Clift’s situation at Unilever. New brooms do like to sweep clean.

In Wheldon’s case, the new boss is Wendy Becker, group chief marketing office and a member of the Vodafone executive committee. Becker joined last September from TalkTalk – a subsidiary of Charles Dunstone’s Carphone Warehouse – where she was managing director.


CMO Simon Clift to quit Unilever

February 9, 2010

Word reaches me in Austria that Simon Clift, chief marketing officer of Unilever, has quit.

The reason for his departure remains unclear,  but may stem from an uneasy relationship with Unilever chief executive, and ex-P&G and Nestle man, Paul Polman, to whom Clift reports directly.

Cambridge graduate Clift has spent his entire career at Unilever, which he joined as a management trainee in 1982. He has held senior positions right across the world and covering all Unilever’s categories.

He was Unilever’s first global chief marketing officer, responsible for how Unilever develops and executes marketing across all categories – including worldwide advertising agency policy, market research, media buying, marketing capability, recruitment, training and career development.

He is also a non-executive director of BBC Worldwide.

The news of Clift’s departure broke as Unilever appointed MindShare to about $1.7bn media planning and buying, after a lengthy consolidation review.

UPDATE: Unilever has now confirmed Clift’s departure. Officially he is retiring from the company, in several months’ time.


%d bloggers like this: