UK: The Davidson Interview - Niall FitzGerald.

UK: The Davidson Interview - Niall FitzGerald. - New objectives, a new management structure, successful businesses sold off - nothing is sacred, the Unilever boss tells Andrew Davidson, not even Lever Bros, the cornerstone of the business.

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Last Updated: 31 Aug 2010

New objectives, a new management structure, successful businesses sold off - nothing is sacred, the Unilever boss tells Andrew Davidson, not even Lever Bros, the cornerstone of the business.

The Irish are coming. Gerry Robinson at Granada. Terry Leahy at Tesco. Peter Sutherland at BP. Terry Neill at Andersen's. Sir Christopher Bland at the BBC. 'And me,' says Niall FitzGerald, with a little tortoise-smile and a twinkle in his dark, hooded eyes. Earlier this year, he reminds me, barely months after he had started as chairman of Unilever, he was being told to push off 'back over the Irish Sea' by Sir Norman Tebbit because of his views on Europe. Now, well, things are changing quite fast.

But hang on - I've met Sir Christopher Bland, and he is about as Irish as I am (that is, not very). FitzGerald is stretching it a bit, isn't he? His Guinness-black brows beetle for a millisecond then he lets out a long, infectious guffaw. 'Well, you know what I mean,' he says finally, with a little Limerick laugh. 'I could name a lot more and seriously, it's a great tribute to this country.'

I suspect you have to be careful with FitzGerald. He is such an engaging talker that you could happily find yourself agreeing with all sorts of garrulous nonsense. Beneath the loquacious charm, however, there is a drive and ambition that has terrified some of his colleagues and swept all before him in his march up Britain's biggest consumer goods company.

Now he is in the process of overseeing some of the largest changes Unilever has ever witnessed: new objectives, new incentives, new management structure.

That he has managed it as an Irishman (Unilever chairmen have only ever been British or Dutch), a non-marketer and as the executive most personally linked to Unilever's biggest sales disaster, the £57-million write-off of Persil Power in the early '90s, makes it all the more remarkable.

He has been boss - co-chairman as they put it in Unilever, an Anglo-Dutch company run jointly out of London and Rotterdam - since 1996, sharing the title with his Dutch counterpart Morris Tabaksblat. Three years ago he led the internal working party that recommended reorganising the structure of the group, which has long been admired for the rigorous marketing of its washing powders, cosmetics and food, but was fast losing sales growth.

Last year he took charge of pushing the changes through and began the long process of explaining the new Unilever, current turnover £33 billion, to staff, press and City.

His aims, he says, are simple: to encourage the group to concentrate on squeezing more value out of its investments, to perform with more entrepreneurial gumption at the local level, and to exhibit more strategic vision. He has also championed a radical reorganisation of senior executive responsibilities, sweeping away a system of worldwide business coordinators and regional directors and replacing them with a single team of 14 business presidents.

He has listed those businesses which are not performing acceptably and announced that they have until September 1998 to come up to scratch or be sold. And he has insisted that the company's focus will move away from mature markets in the West towards the greater possibilities for long-term growth in the developing world. In case anyone didn't believe him, he then pushed through the sale of one of the group's most successful arms, speciality chemicals (£443 million operating profit on £2.9 billion turnover), saying it required too much investment to generate significant long-term returns and Unilever now needed to concentrate on getting more out of less. In other words, it needed to emphasise value management and focus, those two fashionable touchstones of City sentiment.

For a group that now employs more than 290,000 staff working in 200 subsidiaries operating in over 90 countries, and which made a respectable £2.7 billion pre-tax profit last year, it is a brave programme, to say the least.

So, quite some first year. FitzGerald, clearly a man who enjoys a challenge, smiles tightly at the compliment. Dark-haired, medium-height, with those extraordinary, reptilian eyes, one senses a tough reasonableness under the breezy chattiness. A jazz and opera buff who loves the media glare - advising Tony Blair, making public speeches - he is as different to his predecessor, Sir Michael Perry, as a bottle of Domestos is to a pot of Elizabeth Arden (both good Unilever brands, of course). Where the jowly, donnish Perry, now 63, evinced straight-backed caution and avoided publicity, frequently resorting to smoothly bland corporatespeak when meeting the press, FitzGerald, just 52, is all caustic warmth and scouring purpose, happy to clear up any misconceptions and scattering his speech with muscular metaphors: his bad brands are weeds, his subsidiaries are a flotilla of ships, his place is not with the front-line troops but up on the hill ... He clearly aims to be the best communicator and the highest-profile leader Unilever has had in years.

Whether that will work to his advantage internally in an organisation where the British and Dutch sides watch each other carefully is a delicate question.

He has been in the company nearly 30 years, joining an Irish subsidiary as an accountant in 1968 after a brief stint in a Dublin shipping company.

He worked his way up through Unilever's financial operation, getting a key post as personal assistant to the finance director, Cob Stenham, early on in his career, and gaining a host of contacts worldwide that would have been impossible for anyone of his age and experience to get elsewhere in the group. Those early years, he says, left a lasting impression on him and certainly affected his views on how the company should continue to evolve as it nears the next century.

'I think my early years had three influences,' he says, sitting in shirt-sleeves under the far window of his eighth-floor office at Unilever House in Blackfriars. 'First, I could see how strong our cadre of management was in the developing countries, and how those countries were really going to grow very rapidly. Secondly, I got to know a lot of company chairmen, the bosses of the subsidiaries, very well, and I could see just how dependent different companies were on the quality of individual leadership. And thirdly, I saw that the unique strength of Unilever should be to send a clear set of objectives from the centre and then give maximum freedom within that framework for people to operate in.'

But wasn't that how the company was already working? FitzGerald, who spends much of the interview speaking through the cup of his palm as it supports his chin, shakes his head. 'The organisation to facilitate that wasn't in place,' he says. 'The thing we didn't realise was that we had a management style which indeed purported to be like that, but then we interfered a great deal.' In short, senior executives spent too much time sorting out other people's decisions, local managers had too many bosses to report to and bureaucratic sloth was leaching any dynamism out of the organisation. 'Whereas what we needed to do', he adds, 'was say very clearly what were the principles by which you do things, reinforce the priorities, apply them consistently, and then say "you go and do it, we won't interfere unless you move outside that framework or you are not meeting your plans".'

Yet surely he is not the first Unilever chairman to espouse 'think global, act local'? No, he agrees, but this time they really must get it right.

'It is a very big business now. The centre of gravity is changing away from being Eurocentric towards the developing and emerging markets. Natural forces are changing and we are changing the focus of attention and the allocation of resources to accelerate that process.'

Consequently, Unilever's presence in Europe in proportion to elsewhere will shrink as it slims down its interests here and re-invests the proceeds elsewhere, starting with the £4.7 billion it received from ICI for its speciality chemicals arm. That shift is inevitable as sales growth in the highly competitive European markets becomes increasingly difficult to achieve (average sales growth across the whole of Unilever for the first half of 1997 was just 2.5%). He has already said that the company has too fuzzy a definition of what its business is, and that 'up to 20%', most of it in Europe, doesn't belong.

So why did Unilever acquire that business in the first place? Quite often it just came with other businesses, he says. Look at the language. Unilever had three food groups: edible fats and dairy, ice-cream and frozen foods, and sundry food. 'Now,' he pauses for effect, 'when you have a group called "sundry food", it is difficult to have a sharp definition of what you are in. We have said we are in food, but we are not in food, we are in certain categories of food, and the very fact that we have a group called "sundry food" gave legitimacy to build a food business. It's like, "Oh, well, if you can't fit it in the other two, we'll put it in there".' Now, he says, if something cannot justify itself in terms of consistent above-average performance, it won't be in the business.

But haven't Unilever bosses always said this? FitzGerald looks momentarily uncomfortable, but counters that, this time, nothing is sacred. Even Lever Brothers, the soap powder business, once the cornerstone of the group, could go up for sale. Really? His eyes momentarily take on a cold look.

'If we were convinced that in the future it wasn't capable of building value then we wouldn't be in it. No business can justify itself on history.' He recounts an anecdote about taking on the job of detergents coordinator in 1991, and being told by Lever's American chief that there should be no let-up in the profit-sapping battle with Procter & Gamble for market share. 'You can't stop halfway up the face of the Eiger,' said the executive, to which FitzGerald replied, 'Maybe you can't, unless you feel you are going to fall off, and then you have to decide if you are going to go sideways or find a different route ...' Subsequently FitzGerald pulled Lever out of a number of product categories, concentrating on where the company had real strength. Now, he says proudly, although market share initially dipped, the American arm produces a significant return on capital of a kind that insiders would not have thought possible three years ago.

Those who have worked with FitzGerald say there should be no doubt that he is quite capable of doing the unthinkable, even if it enrages the traditionalists.

'Don't be fooled by the charm,' warns one friend, 'there is real steel underneath. You don't get to where he has got without being very hard.' Cob Stenham, once FitzGerald's boss and now chairman of Arjo Wiggins Appleton, says that his former protege is a genuine iconoclast and that real change is on the agenda for Unilever. The problem, he adds, is that the company is just so large now that, short of dramatic moves like the sale of speciality chemicals, change may be a lot more difficult to drive through than observers think. 'If part of change is pushing bright young people up the ladder then you may not see a lot of the benefit for five years.'

Just what instilled FitzGerald's iconoclastic streak is uncertain. Born in Sligo, raised in Limerick, he was educated at a traditional Catholic seminary where brutal beatings were commonplace, a factor which instilled a sense of discipline and may also, judging from the distaste with which he talks about the teachers there, have prompted a natural desire to question the established order of things. Otherwise, he says, he had a straightforward childhood. His father was a customs officer, his mother, to whom he was close, had been a journalist. He was always naturally gregarious because, with 10 years between him and his elder brother and sister, he had to find his own friends. Then, when he was 11, his brother died of cancer, nursed by his mother at home, an event which may have engendered a sense of urgency in the young FitzGerald.

Certainly, after he graduated from University College, Dublin with a degree in commerce, he was determined to find a job that had some international scope. The story of how he accompanied a friend to a Unilever interview and got roped in himself is now rather tired in the telling but true, he says. 'They were in the middle of panel interviews and were short of one interviewee.' Anyone who has ever attended one of Unilever's meticulous graduate interviews would find this very hard to believe but FitzGerald winks and says, 'This is Ireland, remember. We have our own way of applying the same rules and regulations.' Others caution that Fitzgerald is a notorious myth-maker. 'He's got such an eye for publicity - he should have been on the stage,' laughs one friend.

FitzGerald says he has played his Irishness rather well inside Unilever - he has certainly never found it an impediment. After a brief stint as accountant in an animal feeds firm he moved around other Irish subsidiaries before pestering the boss of Unilever Ireland to put him forward for a job in London. Once in Unilever's financial hub, he door-stepped Stenham until he got the coveted post of personal assistant to the financial director.

Stenham remembers him as an 'extremely ambitious young man who didn't neglect the fun side of life'. His ability to mix an impressive head for figures with a larger-than-life personality got him noticed - a vital factor, says FitzGerald, in a company the size of Unilever. Most of his peer group wouldn't have got away with it. 'I could be outspoken and people would just say, "He's Irish, they're like that".'

Did he exaggerate it? He smiles. 'Well, I think I overplayed some eccentricities.' And anyway, he says, the character and personality traits which the Irish bring with them are very useful in business. 'We tend to be better communicators, more articulate, more international in outlook, more creative, more adventurous, less phased by hierarchy, less-class conscious ...' By this time his grin is so wide that I am beginning to think he is taking the mickey. Howard Kilroy, governor of the Bank of Ireland, where FitzGerald is a non-executive director, says the Unilever boss is probably one of the leading change managers in the world now, but that doesn't stop him having a wicked sense of humour. He is already something of a folk hero in his homeland, where he is closely associated with the cross-border, cross-denominational charity Co-operation Ireland. 'He could walk into any job he wanted to here,' laughs Kilroy, 'but I don't think there is one big enough.'

Yet his very exuberance has been a double-edged sword within Unilever.

Despite a glittering career, which included successfully running Unilever's South African food operation in the pre-Mandela days - a highly sensitive posting - FitzGerald is known to make some people uneasy inside the group.

Certainly, there was a degree of schadenfreude over his involvement in the Persil Power affair, where the company had to ditch a new brand after a bitter battle with Procter & Gamble over its alleged clothes-shredding properties. Many expected FitzGerald, as detergents coordinator, to resign.

Did he consider it?

Yes, he says, but it would have sent the wrong message. 'If I had come to the view that the affair had mortally wounded me, and that I couldn't have gone on to do what I was capable of doing, then I would have taken the decision to leave. But there was a quite a strong view that we were at a point in our history where we were making great efforts to make the business less risk-averse, and if the moment a risk was taken which went wrong, that person had to leave, then in a sense that would have been more damaging.' The whole affair taught him and the company a lot of lessons, he says, not least that the general must not get too close to the battle.

'I lost sight that what mattered was not the facts but the consumer perception, and I didn't see that that had changed.'

Others suggest that FitzGerald was also lucky. He was so far up the ladder that the Unilever top brass couldn't really turn to anyone else. 'Charles Miller-Smith had gone to ICI, Mike Heron had gone to the Post Office.

There was no obvious alternative,' says one associate. If that sounds harsh, he adds, it is not meant to, as no one doubts FitzGerald's abilities.

The only worry is that he may have the wrong style of leadership for Unilever's unusual structure. 'I think if Niall has to watch anything,' says one friend, 'it's arrogance. He does try and do too much, too quickly, and he's likely to upset the Dutch. There's already been a degree of self-aggrandisement, too much dabbling in politics, photos in the Wall Street Journal and Le Temps, and no mention of Morris Tabaksblat ...'

FitzGerald himself dismisses any whisper of friction between British and Dutch arms. 'Morris and I work as a duo,' he says sharply. 'The most important relationship in this business is the one between the two of us, and any attempt to put a wedge between us will be quickly dealt with.' Yet the fact remains that FitzGerald does already have an unusually high profile for a Unilever boss. His determination, as chairman of the CBI's Europe Committee, to argue the case for Britain's entry into the ERM has brought him further column inches. His blunt admission that Unilever would disinvest over here if Britain got left behind earned him an 'On Yer Bike' citation from Sir Norman Tebbit in his tabloid newspaper column.

FitzGerald loved it. He runs through the other critics, Norman Lamont, John Redwood ...'The thing I find extraordinary about the Tories', he says, shaking his head, 'is just how out of touch with the business community they have become in the last few years.'

He has a point, but many within Unilever are still not used to seeing their top executive pilloried in the Sun. While he is not an extravagant man - he has a flat in Kensington and a house in Weybridge, and says he doesn't really spend his £700,000-plus salary package on anything much except holidays and his three children, now nearly all grown up - he does have an urge to lead from the front that unnerves quite a few. He even runs the London Marathon (for Save The Children). But perhaps Unilever needs a colourful leader because, to some, it is simply not a leading-edge company any more. It is too bland and cumbersome. FitzGerald acknowledges that there is a problem of perception. His fear, he says, is that graduates - the firm's lifeblood - may take one look at the company and say, 'Boring old Unilever, why would I want to work for them?' And he knows to his cost how important perceptions are, regardless of reality.

The interview over, he shows me the new conservatory he has built on the roof for entertaining clients. He has cleared the walls of the dining suite and told another director to find the right kind of art to fill them. Unilever has a famous collection of rather docile, contemporary paintings. 'I told him,' says FitzGerald, 'I don't want the usual stuff.

I want something very modern, very up-to-the-minute, very ...', he pauses, rubbing his fingers under his nose, looking for the right word, 'in-yer-face'.

No more boring old Unilever, then. It is certainly hard not to admire FitzGerald's heretical gusto, but you wonder just what some of the company's old hands are making of it.

Biographical Notes

1945: Born 13 September, Sligo, Ireland

Educated at St Munchins College, Limerick and University College, Dublin

1968: Accountant, Paul&Vincent, Unilever Ireland

1972: Transferred to Unilever's head office in London 1974

Personal assistant to the financial director, Unilever

1976: Overseas commercial officer, Unilever

1980: Financial director, Unilever South Africa

1982: Managing director, Van den Bergh & Jurgens, South Africa

1985: Group treasurer, Unilever

1986: Financial director, Unilever

1989: Edible fats and dairy coordinator and member of the foods executive, Unilever

1991: Group detergent coordinator, Unilever

1994: Vice-chairman, Unilever

1996: Chairman, Unilever

What People Say

'When he knows what he thinks is right he will go for it - with arms, fists and rabbit punches. I like him enormously but I wouldn't want to share a desert island with him.' A colleague 'Niall is a genuine iconoclast. Nothing is sacred. Nothing is unthinkable.'

Cob Stenham, former financial director of Unilever, now chairman of Arjo Wiggins Appleton

'I have known Niall for 20 years. He is very intelligent, amazingly numerate, charmingly articulate and extremely action-oriented. He also likes a fight and hates to lose - he is fearless.'

Dr Iain Anderson, strategy and technology director, Unilever

'Niall is an outstanding manager. He is multi-disciplined and has got that ability to see round corners. He sees where the business is going to and where it is coming from. He must be one of the leading change managers in the world right now.' Howard Kilroy, governor of the Bank of Ireland

'I think if Niall has to watch anything, it is arrogance. He does try and do too much, too quickly, and he's likely to upset the Dutch. There's already been a degree of self-aggrandisement ... too much dabbling in politics, photos in the Wall Street Journal and Le Temps, and no mention of Morris Tabaksblat ...'

A friend.

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