Niall FitzGerald will miss the responsibility of running a $50bn company, writes John McManus.
On September 1st this year, Niall FitzGerald's 30-year career at Unilever will come to an end. The problems of the $50 billion (€41 billion) washing-powder-to-ice-cream-giant and its 250,000 employees will no longer be his day-to-day concern.
Will he miss running a business which, according to its website, makes products that are chosen by 150 million people a day to feed their families and clean their homes?
"I will of course. You can't do the job I do with the passion I do without missing it," he says.
Running Unilever is an "awesome responsibility" but it has to be put in context, says the 58-year-old Sligo man.
It also clearly has its rewards; ensconced in the penthouse of the Berkeley Court on the eve of the Ireland-Scotland Triple Crown decider, FitzGerald recalls meeting Jiang Zemin, the president of China: "I thought to myself... sometimes I worry about running a company of 250,000 people - this guy has 1.3 billion people to worry about."
It is tempting to dismiss the reference to the Chinese leader as name dropping, but a flick through FitzGerald's curriculum vitae shows that, whatever else he did during his seven years as joint chairman and chief executive of one of the world's largest companies, he put himself at the crossroads where international politics, business and economics converge and behind-the-scenes influence is exerted.
As a member of the Council of the World Economic Forum and the International Advisory Board of the Council on Foreign Relations, he rubs shoulders with businessman, statesmen, Nobel prize-winning economists and the odd Third World dictator on a regular basis.
He also serves as a member of the influential but somewhat secretive Trilateral Commission of business leaders, the US Business Council and the EU-China Committee. He is a member of various advisory bodies, including the president of South Africa's International Investment Advisory Council and the Shanghai Mayor's International Business Leaders' Council.
FitzGerald says he made a conscious decision to take on these sorts of roles as part of his job. "I think it is necessary. One of the things I have done is to give us more profile. It helps us to have influence."
But there is a price to be paid for such influence and part of it is paid on the international conference circuit. Later this month, FitzGerald will be on his feet in Dublin speaking at IBEC's EU Presidency Conference* which is tackling the topic of "is regulation killing business?"
"I have a very strong view on regulation. We have strangled ourselves in Europe." he says.
"Regulation has to be seen at a micro and macro level. The cost benefit of any piece of legislation has to be examined at the micro level while bearing in mind that at the macro level any economy can only cope with a finite amount of regulation."
FitzGerald will also be wearing his hat as co-chairman of the Transatlantic Business Dialogue which is seeking to create a barrier-free transatlantic market.
His multiplicity of roles, together with the chairmanship of Reuters will no doubt keep him busy when he hands over the reins to his successor, Patrick Cescau at the end of October.
The announcement last February of his departure took the market by surprise. And while he may not be leaving Unilever under a cloud, FitzGerald is not departing under a blazing blue sky either. His decision to leave coincided with the company failing to meet targets set out under Path to Growth, an ambitious five year plan to refocus Unilever set out by Fitzgerald in 2000 which is now somewhat tarnished.
The main problem with Path to Growth was its name, according to FitzGerald. "We were hung on the title of the strategy," he says.
The plan involved much more than just boosting top line growth, but it was the failure of Unilever to hit its 6 per cent growth target last year that undermined the plan's credibility with investors.
Such criticism is unfounded, but not surprising, according to Fitzgerald. The plan had "too many moving parts" and in the company's anxiety to be as transparent as possible it gave people too much information leading to confusion.
"We set out explicitly our targets because shareholders had to sign up to the plan. We set out too many targets and made them too specific," he says.
Barring the dip in growth in 2003 the plan has achieved or exceeded expectations, he said. The brand portfolio has been transformed, with some 95 per cent of revenue now coming from leading brands. Even the growth issue was overdone.
"We achieved top line growth of 5 to 6 per cent in 2001 and 2002, although we missed it in 2003."
His departure may have surprised some, but it was something that he had been planing for two years. He wanted to have his chosen successor involved from the outset in the formulating of the successor of Path to Growth.
Unlike its predecessor the new strategy will not give hard top line growth targets. It will focus instead on generating €30 billion in free cash flow and increase the return on invested capital from 12.5 per cent to at least 17 per cent by 2010.
"It will give him \ much more flexibility. He will not have the danger of having to respond to short-term pressures," according to FitzGerald.
Path to Growth may have had something of the curate's egg about it, but FitzGerald does not see it as his real legacy.
"What we have been trying to do is change the culture, make it less risk adverse," he says.
This involved "empowering people to deliver against strategy and developing a greater sense of accountability". In turn, this involved a lot of changes at the top, with some 80 per cent of of senior executives trading places. Around half of these left the company or to use the people-friendly language beloved of Unilever executives "had their careers redirected out of the business".
In total some 55,000 people had their careers redirected out of Unilever under Path to Growth, without a single industrial relations-related stoppage, he adds. This statistic would give cause for thought to those who are tempted to poke fun at the company's touchy-feely ethos and almost obsessive approach to consultation that also marked FitzGerald's years.
But is was his belief that Unilever should be taking more risks that lay behind FitzGerald's biggest mistake during his 30-year career - the launch and recall of Persil Power in 1995. The new soap powder was so effective it could actually damage clothes, a fact that was seized upon by rival Proctor and Gamble in an aggressive marketing campaign.
FitzGerald was head of detergents at the time and admits he handled the crisis badly.
"It was not a mistake to launch it [Persil Power]. The mistake was not recognising early enough that for a marketing company perception is reality," he explains.
Part of the blame for this rested with his own leadership approach. "I wanted to be in the front line; it was the wrong thing to do. If I had stepped back I would have taken the decision [to withdraw the product] earlier."
There were a number of "key learnings" (another well-worn phrase from the Unilever lexicon) in all this for FitzGerald, the most significant of which was that "if you try to encourage risk taking you have to accept that people will make mistakes".
The debacle - which knocked a £57 million hole in the company's profits - was not without some benefits. "It did convince people we were really serious when we said we wanted to be a risk-taking company. If I - or too many others - had been a casualty the company would have gone back into its shell," he says.
FitzGerald will not talk about his new job as chairman of Reuters until he takes up the position in October. But he is clear as to what his role will be and what skills he can bring.
"I will be running the board not the business. I am complementary to the chief executive. I do understand something about branding and Reuters is one of the world's greatest brands. There is more that can be done. My focus is on people and the development of people. I hope to inject some of that," he says.
Reuters might have been deprived of FitzGerald's wisdom for the most unlikely of reasons. His daughter Tara was until recently a journalist with its news service and FitzGerald was reluctant to take up the job for that reason when he was first approached. She has now moved on to concentrate on writing.
FitzGerald will earn around £500,000 (€746,000) a year at Reuters on top of a Unilever pension reported to be worth over £700,000 a year. It will give him the scope to devote around a third of his time to what he calls "pro-bono" work. He says he is "very committed to Ireland" and does not rule out some sort of non-political role here, but his preference would be for something in Africa where he has spent a lot of time during his years at Unilever.
"I will make no decisions until I have moved on from Unilever and taken on Reuters," he says. The third pillar of his life post Unilever will be his family - he has three other children, the youngest of which, Gabriella, is three . "They have been deprived of me for many years."
