Power magnate: Brand masters, Niall FitzGerald - Jane Bainbridge asks Niall FitzGerald about power, South Africa and, of course, Persil

Niall FitzGerald’s eighth-floor office in the art deco splendour of

Unilever House oozes power, with its huge desk, designer sofas and river

view. You’d expect nothing less for the man who was recently named as

the most powerful marketer in the UK in Marketing’s Power 100.

I ask FitzGerald - an ’accountant by background, marketer by instinct’ -

if it boosts his ego to be voted the number one marketer. ’Not at all,’

he replies. ’I don’t particularly regard those sort of titles - with

respect to your magazine - as terribly important. They’re transient;

it’s fine to get excited about being number one this year, but you might

be 101 next year.

’These things are not about me, Niall FitzGerald, being a hugely

powerful individual, it’s because of the job I’m doing, which I’m

keeping on trust for the next person who does it.’

The job he is doing is a challenge by anyone’s standards. Unilever

employs 255,000 people around the globe, and has a turnover of over

pounds 29bn.

Running it has been likened to being the leader of a small country -

although it’s not that small.

And FitzGerald made it his mission to re-energise Unilever when he took

over as joint chairman and chief executive officer in 1996.

He’s a Unilever man through and through, and has been with the business

through some difficult times. But despite over 30 years at the company,

his appointment still raised eyebrows.

There’s been much debate in the business pages about his front-line

management style, his status as the first non-Brit to head the UK side,

and his eagerness to communicate with the media.Then there was Persil

Power - the biggest marketing cock-up in recent history, with which

FitzGerald was closely associated.

Cool head

At the height of the ’rotting undies’ disaster, it was suggested that

the debacle might cost him the prize of Unilever’s chief executive

role.

But for many observers it was FitzGerald’s coolness under fire - and

willingness to see the problem through - which showed he had the mettle

needed to head the company.

He cuts an impressive figure. Self-assured, charismatic and with a soft

Irish accent, he is a man who enjoys telling stories, and talking about

a business which clearly fascinates him. He is even relaxed about

discussing Persil Power and the management lessons it taught him. I

assume he hates talking about it. I am wrong. ’I don’t hate it because

it’s very important.

The fact is, Persil Power was a disaster. We had a great product which

had a flaw which we didn’t recognise for a long time. We learned a lot

about the business, and I learned a lot about myself, and about

leadership.

’I learned that the leader has to face up to taking unpopular

decisions.

I always thought that I respected the consumer greatly, but I think it

led to that respect growing.

’The moment the penny really dropped was in one of the many meetings we

were having to discuss the problem. There were 31 people around this big

table, all of our top detergent, technical, and marketing brains in one

room. You couldn’t have got more knowledge about detergents anywhere in

the world.

’It must have been after about six hours of discussion, and I was

leaning back, just sitting and reflecting, and I said ’stop the

discussion, for a moment, I want to ask a question. There are 31 of us

in this room, could anyone who has washed their own clothes in the past

three months, put their hand up.’ Not one hand went up. So here we were

talking about a consumer who we actually didn’t know, because we were

not doing it ourselves.

’That was the moment I realised we’d got something badly wrong, not just

technically, but generally, in the way we were dealing with it.’

That decision saw FitzGerald and Unilever admit the flaw in the product,

and take a massive hit in terms of consumer confidence, share price and

sales. But it also meant that the company could begin rebuilding that

trust in the brand, which has allowed Persil to recover.

One of the biggest and toughest decisions Unilever has taken in recent

years is to cull a large number of its brands, to put resources and

investment behind fewer, bigger brands.

You can tell this is a difficult task because FitzGerald is sensitive

about the word cull. It is focusing on key brands - not culling, as he

tells me in no uncertain terms - that Unilever’s growth strategy is

about.

However you describe it, Unilever is reducing 1600 brands down to about

400. Brands that will survive will be strong internationally,

regionally, or what Unilever calls its ’local jewels’ - brands such as

Marmite, that are strong in one market.

’We’ll take resource away from other brands and one of three things will

happen to them. Some we’ll sell, some we will converge into our leading

brands - for example, we’re pulling out Radion and converging its

consumers behind Surf in the UK at the moment - and the rest will

continue to be strong cash generators for quite some time, despite

lacking resource,’ he says.

This is all well and good in principle, but how do you ensure consumers

shift to a Unilever brand, not a rival’s? ’It’s something you do a lot

of thinking about. You look at the profile of the consumers of the brand

you’re going to take out. You look at where the best match is with

another brand in your portfolio and you see how you can extend, very

slowly, the reach of that brand in terms of the positioning.

’Sometimes it works well, sometimes it doesn’t. It’s an art more than a

science,’ he concedes. ’Everyone has their favourite brand, so you have

to part with some old friends.’

While cutting back with one hand, FitzGerald has been acquiring with

another. At the moment, the Bestfoods merger is at the front of his

mind.

Last minute hiccups aside, the deal should be completed by October.

FitzGerald says it fulfils a number of criteria for Unilever.

It gives the company some very strong brands - Knorr and Hellmann’s in

particular; it ensures Unilever is ahead in the consolidation game;

Bestfoods has a better food service infrastructure than Unilever; and

it’s stronger in Latin America. The latter two points are both crucial

areas of growth for the company.

Consolidation and Unilever’s future, especially where brand

concentration is concerned, are intrinsically linked, and the crux of

the change culture FitzGerald is trying to instill.

’Consolidation is going to take place and it’s better to lead than

follow.

If you lead, you have the best opportunity to gain the best

partners.

As the retail trade consolidates, it will look more and more at big,

fresh brands that are constantly innovating, that are traffic drivers.

That’s why we’re focusing on a much smaller number of key brands and

will only look at big and clear brands for acquisition, as we did with

Slimfast and Ben & Jerry,’ he says.

Dealing buzz

If this is the difficult part of his job, then surely the

wheeler-dealing of closing the Bestfoods deal is the fun part. ’The

important thing is not to get too excited about closing the deal,

because then it becomes an end in itself, rather than a means to

something. I’ve done many deals over the years. I do get a buzz from it.

But what you have to do in the middle of a deal is stand back and say

’now let’s just check again, is this the right deal, will it add value

to our business, or are we getting carried away?’ One of the most

important attributes of anybody involved in a deal is having the ability

and guts to walk away if need be.’

Taking time to stand back and think is an important part of FitzGerald’s

modus operandi. He enjoys running - an experienced marathon runner, he

often jogs to the office from his home in Chelsea about five miles away

- because it clears his mind.

FitzGerald has seen his fair share of excitement in his long tenure at

Unilever, and says he’s never got bored: ’I’ve never been allowed to

stay somewhere long enough to. One of the fun things about Unilever is

that it operates in 100 countries, so there’s a great variety and a huge

amount of interesting people of different races. Quite frankly, if you

got bored of a business like this, there’s something wrong with

you.’

One experience of a different culture came in the early-1980s during his

stint as chief executive of the food business in South Africa. Fiercely

against apartheid, FitzGerald at first resisted the move. But under his

guidance, Unilever, unlike Barclays, managed to avoid boycotts by the

anti-apartheid movement.

’We weren’t targeted because we made absolutely clear-long before it

became fashionable - that we would stay in South Africa for as long as

we were able to run our business in our way, by our standards and our

values, and that we would actively work to change society.I don’t mean

politically, but in the way we did things.

’When I was asked to go to South Africa in 1980, I said to my

then-chairman, ’You have to be joking, this has to be a bad joke, how

could you possibly think of me for South Africa? You know my views on

apartheid.’ He told me that was exactly why he wanted to send me, as

more of that view needed to be articulated within the business.

’I made a deal with him that I would go, provided that if I wanted to

leave in the first six months, there would be no question of my

leaving.

And then five years later, when he rang me, I said ’Why now?’’

The experience became a defining moment for FitzGerald. ’I realised that

if you want to change something, nine times out of ten you can change it

more effectively from within. The things we did in South Africa were

immensely important. We showed that you could run a business by our

standards, which paid no attention to colour, which paid everyone

equally, depending on the job they did, which actually ignored many of

the laws of the land, and be successful.’

FitzGerald tells how he insisted that a new factory being built had no

segregated toilets. Instead, it was built with just male and female

toilets, all to the very highest standards.

’The factory was opened with much pomp and ceremony by the head of the

Ministry of Industry who thought it was fantastic. About six months

later, a man from the Ministry of the Interior came to see me and said

’It’s about your ablution facilities. They’re against the law. You need

to have black, white, Indian etc. You’ve got a problem Mr FitzGerald.’ I

told him he had it the wrong way round. ’I don’t have any problem, you

have a problem - you now have to decide what to do about it, because I’m

not going to do anything.’ That was the end of the affair. It’s a small

example, but I could give you hundreds. You progressively push it out

and eventually you facilitate significant change.’

Responsible politics

FitzGerald still has strong links to South Africa. He sits as a member

of President Mbeki’s international advisory council and has been back to

the country several times since the democratic elections.

After a brief dalliance with Communism in his college days - ’I had

strong convictions about my duty to change society, as any 20-year-old

should have. And it was where the prettiest girls were’ - he now

considers himself a Social Democrat. ’I believe in the market and the

power of the market to generate wealth. But you have to deal with wealth

in a responsible way, and ensure everyone in your society has an even

chance to participate.

It’s not Socialism, it’s being socially responsible.’

THE CV

BORN: September 13, 1945

EDUCATION: Degree in commerce from University College, Dublin.

CAREER: Joined Unilever as an accountant in 1968, before becoming

personal assistant to the financial director in 1975. He was then

promoted to overseas commercial officer in 1976. In 1980, he went to

South Africa and became chief executive of food business. In 1987, he

joined the board of Unilever plc and Unilever NV, and became group

detergent co-ordinator in 1991.

In 1996, he took on his current post as chairman and chief executive of

the firm. Outside of Unilever, he is also a non-executive director of

Merck and Ericsson, chairman of the CBI Europe Committee, a council

member of Co-operation Ireland, a member of the Council of World

Economic Forum and a Fellow of the Royal Society of the Arts.

FAMILY: Three children - a girl and two boys.

HOBBIES: Sports, running, has supported Manchester United and the Irish

Rugby team since childhood. Opera and jazz.

This article was first published on Marketing