Profit’s not always the point
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0:00 - 0:04The entire model of capitalism
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0:04 - 0:06and the economic model that you and I
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0:06 - 0:08did business in,
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0:08 - 0:10and, in fact, continue to do business in,
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0:10 - 0:13was built around what probably Milton Friedman
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0:13 - 0:15put more succinctly.
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0:15 - 0:18And Adam Smith, of course,
the father of modern economics -
0:18 - 0:20actually said many, many years ago,
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0:20 - 0:21the invisible hand,
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0:21 - 0:23which is, "If you continue to operate
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0:23 - 0:25in your own self-interest
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0:25 - 0:28you will do the best good for society."
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0:28 - 0:33Now, capitalism has done a lot of good things
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0:33 - 0:35and I've talked about a lot of good
things that have happened, -
0:35 - 0:39but equally, it has not been able to meet up
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0:39 - 0:41with some of the challenges that we've seen
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0:41 - 0:42in society.
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0:42 - 0:45The model that at least I was brought up in
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0:45 - 0:47and a lot of us doing
business were brought up in -
0:47 - 0:49was one which talked about
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0:49 - 0:51what I call the three G's of growth:
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0:51 - 0:53growth that is consistent,
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0:53 - 0:54quarter on quarter;
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0:54 - 0:56growth that is competitive,
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0:56 - 0:57better than the other person;
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0:57 - 0:59and growth that is profitable,
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0:59 - 1:00so you continue to make
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1:00 - 1:03more and more shareholder value.
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1:03 - 1:06And I'm afraid this is not going to be good enough
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1:06 - 1:08and we have to move from this 3G model
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1:08 - 1:11to a model of what I call
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1:11 - 1:12the fourth G:
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1:12 - 1:16the G of growth that is responsible.
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1:16 - 1:20And it is this that has to become
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1:20 - 1:22a very important part
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1:22 - 1:24of creating value.
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1:24 - 1:26Of not just creating economic value
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1:26 - 1:29but creating social value.
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1:29 - 1:32And companies that will thrive are those
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1:32 - 1:35that will actually embrace the fourth G.
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1:35 - 1:38And the model of 4G is quite simple:
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1:38 - 1:42Companies cannot afford
to be just innocent bystanders -
1:42 - 1:44in what's happening around in society.
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1:44 - 1:48They have to begin to play their role
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1:48 - 1:50in terms of serving the communities
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1:50 - 1:52which actually sustain them.
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1:52 - 1:54And we have to move to a model
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1:54 - 1:56of an and/and model which is
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1:56 - 1:59how do we make money and do good?
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1:59 - 2:01How do we make sure
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2:01 - 2:03that we have a great business
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2:03 - 2:06but we also have a great environment around us?
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2:06 - 2:07And that model
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2:07 - 2:10is all about doing well and doing good.
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2:10 - 2:12But the question is easier said than done.
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2:12 - 2:14But how do we actually get that done?
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2:14 - 2:16And I do believe
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2:16 - 2:19that the answer to that is going to be leadership.
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2:19 - 2:20It is going to be to redefine
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2:20 - 2:22the new business models
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2:22 - 2:23which understand
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2:23 - 2:25that the only license to operate
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2:25 - 2:27is to combine these things.
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2:27 - 2:29And for that you need businesses
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2:29 - 2:32that can actually define their role
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2:32 - 2:34in society
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2:34 - 2:36in terms of a much larger purpose
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2:36 - 2:39than the products and brands that they sell.
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2:39 - 2:42And companies that actually define a true north,
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2:42 - 2:44things that are nonnegotiable
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2:44 - 2:46whether times are good, bad, ugly --
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2:46 - 2:47doesn't matter.
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2:47 - 2:50There are things that you stand for.
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2:50 - 2:54Values and purpose are going to be the two
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2:54 - 2:56drivers of software
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2:56 - 2:58that are going to create
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2:58 - 3:00the companies of tomorrow.
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3:00 - 3:01And I'm going to now shift
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3:01 - 3:05to talking a little bit about my own experiences.
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3:05 - 3:08I joined Unilever in 1976
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3:08 - 3:11as a management trainee in India.
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3:11 - 3:14And on my first day of work
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3:14 - 3:16I walked in and my boss tells me,
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3:16 - 3:18"Do you know why you're here?"
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3:18 - 3:22I said, "I'm here to sell a lot of soap."
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3:22 - 3:25And he said,
"No, you're here to change lives." -
3:25 - 3:27You're here to change lives.
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3:27 - 3:29You know, I thought it was rather facetious.
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3:29 - 3:31We are a company that sells soap and soup.
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3:31 - 3:34What are we doing about changing lives?
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3:34 - 3:38And it's then I realized
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3:38 - 3:41that simple acts
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3:41 - 3:43like selling a bar of soap
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3:43 - 3:44can save more lives
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3:44 - 3:46than pharmaceutical companies.
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3:46 - 3:48I don't know how many of you know
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3:48 - 3:51that five million children don't reach the age of five
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3:51 - 3:54because of simple infections that can be prevented
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3:54 - 3:57by an act of washing their hands with soap.
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3:57 - 3:58We run the largest
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3:58 - 3:59hand-washing program
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3:59 - 4:00in the world.
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4:00 - 4:02We are running a program on hygiene and health
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4:02 - 4:05that now touches half a billion people.
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4:05 - 4:07It's not about selling soap,
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4:07 - 4:09there is a larger purpose out there.
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4:09 - 4:11And brands indeed can be
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4:11 - 4:13at the forefront of social change.
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4:13 - 4:14And the reason for that is,
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4:14 - 4:17when two billion people use your brands
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4:17 - 4:19that's the amplifier.
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4:19 - 4:22Small actions can make a big difference.
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4:22 - 4:23Take another example,
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4:23 - 4:27I was walking around in
one of our villages in India. -
4:27 - 4:28Now those of you who have done this
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4:28 - 4:33will realize that this is no walk in the park.
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4:33 - 4:36And we had this lady
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4:36 - 4:40who was one of our small distributors --
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4:40 - 4:44beautiful, very, very modest, her home --
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4:44 - 4:46and she was out there,
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4:46 - 4:48dressed nicely,
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4:48 - 4:50her husband in the back, her mother-in-law behind
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4:50 - 4:52and her sister-in-law behind her.
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4:52 - 4:54The social order was changing
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4:54 - 4:56because this lady
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4:56 - 4:58is part of our Project Shakti
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4:58 - 5:00that is actually teaching women
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5:00 - 5:02how to do small business
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5:02 - 5:03and how to carry the message
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5:03 - 5:06of nutrition and hygiene.
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5:06 - 5:08We have 60,000 such women
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5:08 - 5:10now in India.
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5:10 - 5:12It's not about selling soap,
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5:12 - 5:14it's about making sure
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5:14 - 5:16that in the process of doing so
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5:16 - 5:18you can change people's lives.
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5:18 - 5:21Small actions, big difference.
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5:21 - 5:23Our R&D folks
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5:23 - 5:27are not only working to give us
some fantastic detergents, -
5:27 - 5:29but they're working to make sure we use less water.
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5:29 - 5:32A product that we've just launched recently,
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5:32 - 5:35One Rinse product that allows you to save water
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5:35 - 5:37every time you wash your clothes.
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5:37 - 5:40And if we can convert all our users to using this,
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5:40 - 5:43that's 500 billion liters of water.
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5:43 - 5:45By the way, that's equivalent to one month of water
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5:45 - 5:48for a whole huge continent.
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5:48 - 5:50So just think about it.
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5:50 - 5:53There are small actions that
can make a big difference. -
5:53 - 5:55And I can go on and on.
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5:55 - 5:57Our food chain, our brilliant products --
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5:57 - 5:59and I'm sorry I'm giving you
a word from the sponsors -- -
5:59 - 6:03Knorr, Hellman's and all those wonderful products.
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6:03 - 6:05We are committed to making sure that
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6:05 - 6:07all our agricultural raw materials
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6:07 - 6:10are sourced from sustainable sources,
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6:10 - 6:12100-percent sustainable sources.
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6:12 - 6:14We were the first
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6:14 - 6:16to say we are going to buy all of our palm oil
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6:16 - 6:18from sustainable sources.
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6:18 - 6:22I don't know how many of you know that palm oil,
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6:22 - 6:24and not buying it from sustainable sources,
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6:24 - 6:27can create deforestation that is responsible
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6:27 - 6:29for 20 percent of the greenhouse gasses in the world.
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6:29 - 6:32We were the first to embrace that,
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6:32 - 6:36and it's all because we market soap and soup.
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6:36 - 6:38And the point I'm making here
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6:38 - 6:42is that companies like yours, companies like mine
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6:42 - 6:44have to define a purpose
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6:44 - 6:46which embraces responsibility
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6:46 - 6:49and understands that we have to play our part
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6:49 - 6:52in the communities in which we operate.
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6:52 - 6:54We introduced something called
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6:54 - 6:56The Unilever Sustainable Living Plan, which said,
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6:56 - 6:59"Our purpose is to make
sustainable living commonplace, -
6:59 - 7:01and we are gong to change the lives
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7:01 - 7:04of one billion people over 2020."
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7:04 - 7:06Now the question here is,
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7:06 - 7:07where do we go from here?
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7:07 - 7:09And the answer to that is very simple:
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7:09 - 7:11We're not going to change the world alone.
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7:11 - 7:14There are plenty of you and plenty of us
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7:14 - 7:15who understand this.
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7:15 - 7:17The question is,
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7:17 - 7:19we need partnerships, we need coalitions
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7:19 - 7:22and importantly, we need that leadership
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7:22 - 7:25that will allow us to take this from here
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7:25 - 7:26and to be the change
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7:26 - 7:27that we want to see around us.
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7:27 - 7:29Thank you very much.
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7:29 - 7:33(Applause)
- Title:
- Profit’s not always the point
- Speaker:
- Harish Manwani
- Description:
-
You might not expect the chief operating officer of a major global corporation to look too far beyond either the balance sheet or the bottom line. But Harish Manwani, COO of Unilever, makes a passionate argument that doing so to include value, purpose and sustainability in top-level decision-making is not just savvy, it's the only way to run a 21st century business responsibly.
- Video Language:
- English
- Team:
- closed TED
- Project:
- TEDTalks
- Duration:
- 13:58
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