Unilever has moved away from a matrixed organization.
Unilever will have 95% of its business operations in the cloud by the end of this year, according to CEO Alan Jope, who pointed to the accomplishment as an example of early progress within its new organizational structure.
The acceleration of moving its data, applications, and network technologies to the cloud are expected to unlock myriad digital and innovation opportunities, he noted, including real-time IoT performance data from its factory digital twins and deploying artificial intelligence to support geospatial deforestation tracking.
Moving its ERP ecosystem to the cloud occurred with “near zero disruption,” according to the exec in an earnings call with investors.
“The changes have been largely invisible to the rest of the business, and very few companies of our size and legacy can claim this level of cloud implementation,” said Jope. “These and many other examples that I could share, give us confidence that we're set on the right course, and the new organization will deliver the step change in speed and accountability that we have committed.”
New Organizational Benefits
Unilever first announced its new structure at the start of the year, moving from a matrixed organization to five business units that are each accountable for their own global strategy, growth, and profit delivery. The program, which went live in July, is intended to increase agility and the ability to react to consumer trends.
Jope, who will retire at the end of next year, said the new business groups are already acting on decisions and allocating resources more quickly. He pointed to the personal care supply chain team as an example, noting they’ve quickened execution through SKU rationalization.
Related: Unilever shared details earlier this year about its use of advanced analytics within rationalization for a more granular assessment of its portfolio. The technology is expected to optimize both in-store and e-commerce on-shelf availability.
“Previous initiatives had frankly gained limited traction since so much energy was required to align multiple country organizations to remove products from their portfolio,” Jope said. “The new personal care leadership team prioritized the initiative, and the combination of strategic clarity and clear accountability meant that progress was made in weeks. We're tracking well versus the reduction target, and we'll complete the work early next year, respecting customer planning windows and shelf space considerations.”
This “drive to simplify” is occurring across the enterprise, said Jope, with the North America nutrition unit similarly quickly acting to invest in new cross-border sourcing capacity.
“The full transformation is ongoing. There's still more to be done to become even more agile in responding to opportunities in these fast-changing markets and to fully exploit the clarity of accountability that the new organization brings,” he said. “Our business groups are taking decisions more quickly and driving sharper strategic action and related resource allocation to drive growth.”