Setting the right mood to boost the bottom line

Niall Fitzgerald has a particular management style, using 'emotional intelligence' to inspire his workforce in an effort to achieve the results he wants, writes John McManus

Leadership is a primal thing. It is much more about touch and feel than it is about thought, according to Mr Niall Fitzgerald, joint chairman and chief executive of Unilever.

"Quite often what a leader does by his or her own actions and the mood he or she sets, has much more effect than anything he or she might do specifically," he explains.

This is what psychologists call using emotional intelligence. But how does it translate into the day-to-day work of the £2 million sterling (€3.25 million) a year boss of a £16 billion food to household products group?

Mr Fitzgerald responds by giving two examples from his morning's activities of what he calls "primal management".

"I spent the first hour of this morning confronting one of my close colleagues with the fact that his own leadership style was leading to ineffective performance by his own team and that his behaviours were not leading to the optimal result," he says.

"That was really painful for him but in the end it will be very profitable for him. Sometimes you have to confront people with a reality that is unpalatable but they quite quickly understand it," he explains over the phone from his office in London.

"I also spent part of the morning with a group of younger people in the company - which I do fairly frequently - wishing to give them a visionary view of something we are trying to do," he adds.

The project is not something that makes logical sense but "which inspires them that there is more to business than simply the business of doing business."

It all sounds wonderful, but is such navel-gazing not a luxury that only the chief executive of a massive and successful corporation can afford. Most of his peers are probably too busy worrying about the bottom line.

"I don't think it's a luxury at all. If you don't have the right people inspired in the right way you won't get the top line, the middle line or the bottom line.

"You might get it in the short term by dint of sheer willpower but you won't in the long term. You won't sustain it unless you have people really committed to doing what you wish them to do because it is what they want to do," he explains.

The project that Mr Fitzgerald is currently trying to get his people to buy into is called "Path to Growth". It involves the culling of many under-performing brands and the loss of almost 50,000 jobs from the 300,000 strong global workforce.

When the process is complete - in around another three years - sales should be growing at a sustainable rate of 5 per cent, while margins will be up from 10 to 16 per cent.

So what does the market think of Mr Fitzgerald's leadership of this project?

Sales growth slowed in January and February compared to last year, this may be in keeping with the restructuring plan but it does little for the company's share price. Brokers are pretty evenly split between those recommending buying the stock and those who advocate holding it or selling it.

"We have met every key milestone. They \ should look at our relative market performance. We have out-performed the market by 30 per cent," according to Mr Fitzgerald.

Whether or not you agree with his views, it is clear that the question of what makes a good leader is something that Mr Fitzgerald has given a great deal of time and thought to. Perhaps it is not surprising for a man who lists "observing humanity", among his interests.

He says that he does not like leading for its own sake.

"I like people. The thing that turns me on is getting a group of people and getting them to believe in something they did not believe in before . . . and to go beyond what they thought was possible. I get an immense kick out of that," he says.

"Leadership is not about me in this particular role. In every thing we do we are in some way asked to lead - whether it's to lead ourselves, lead our family, lead one person or lead 300,000 people," he explains.

One area in which Mr Fitzgerald has taken leadership is in trying to persuade Britain to join the single currency. He is the unofficial spokesman for the pro-euro lobby among British business. He took on this role because it was something he believed in and for reasons that, not surprisingly, relate to leadership.

"Britain must - both for its own sake and for the sake of Europe - play a very strong leadership role within Europe but it can't do that if it absents itself from one of the major projects . . . the single currency," he explains.

"The currency is the essential underpinning of the market and the single market, and is what has given the greatest competitive boost to the European economy in the last 15 years. We have to move on to the next stage of underpinning the single market," he says.

An Irishman, Mr Fitzgerald is very positive about the quality of business leadership in the Republic. "If you look at how the Irish economy has done over the last few years it is in part as a consequence of strong and able leadership," he says.

"I think of the business leaders in Ireland I know. Most of those I have known are people who can stand up in any leadership arena and succeed," says Mr Fitzgerald.

He is less forthcoming when it comes to political leadership in the Republic. Although his involvement in the campaign for the euro is highly political, Mr Fitzgerald is adamant that politics does not interest him. However, he does not rule out some wider role - possibly in the Republic - once his job is done at Unilever.

That will not be for another three years, if not longer.

"If at a future stage I have more time, I will be very happy to look at ways I can contribute to the broader society and in particular the Irish society.

"I am very committed to Ireland. I carry an Irish passport as do my four children, although none of them were born in Ireland," he says.

Mr Fitzgerald makes it clear that his decision to accept an honorary knighthood in the New Year's honours list was something he did on behalf of Unilever rather than for himself.

As regards to what he might do on return to the Republic, he plays it very straight: "If there was a way that I can practically contribute and where I have the necessary skill to make a real contribution of course I would look at it."

Mr Niall Fitzgerald will deliver the second annual Royal College of Surgeons Lecture on Leadership next Thursday. His talk on primal leadership will be discussed by a panel including Mr Denis Brosnan of Kerry Group and Dr Chris Horn of Iona Technologies.