International -- Intl' Business: EUROPE
UNILEVER: IF AT FIRST YOU FAIL MISERABLY... (int'l edition)
Niall W.A. FitzGerald, a rugby-loving Irishman, was worldwide detergents coordinator at Unilever PLC during one of the company's most spectacular flops--1994's costly Persil Power fiasco. So it was a surprise when the Anglo-Dutch company named FitzGerald to its three-person executive committee and announced that he soon would become one of two co-chairmen.
But company insiders weren't so surprised. Yes, FitzGerald was ultimately responsible for the Power failure, but Unilever's board thinks he learned valuable management lessons that he now can evangelize to the rest of the company. After investing $400 million in new plants and a Europewide marketing campaign, Unilever had to withdraw the product because its chemical whitener reacted badly with color dyes to weaken fabrics.
FitzGerald, 50, joins the executive committee at yearend. In August of next year, he becomes chairman of the British half of Unilever, in partnership with Morris Tabaksblat, current chairman of the Rotterdam-based half.
This is no easy time to be heading up Unilever, whose mix of consumer products generates annual sales of $45 billion. It's still fighting to regain lost detergent market share, spending heavily on advertising and marketing to catch up. And the company has been underperforming internal growth targets of 8% to 9% in a competitive market. Some analysts believe Unilever will be lucky to reach 5% earnings growth this year.
Unilever's consensus-driven matrix structure also needs streamlining. Responsibility for profit and loss rests with some 90 country managers charged with coordinating regional, product, and financial managers. Decision-making tends to be cumbersome, and as the detergent escapade shows, the system can breed a sense of infallibility.
"AGGRESSIVE." The days of management by committee may be over. With lessons from the Power episode still fresh in his mind, FitzGerald will review Unilever's organization over the next eight months before taking over from Co-Chairman Sir Michael S. Perry. A shakeup is expected to follow.
Trimming Unilever is a big assignment. But David P. Lang, analyst at London brokerage Henderson Crosthwaite, believes FitzGerald is up to it. "He makes things happen. He always has. He is a very bright, intelligent, and aggressive individual." And presumably, after the Persil Power disaster, a wiser one.By Paula Dwyer in London