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The Observer: New hand at Unilever tries to pull it together

Heather Connon on Patrick Cescau, the chief executive fighting to unite a divided company
Sunday February 12, 2006
Unilever may grow its own bosses but that does not mean they all look the same. In the 1980s, there was Michael Angus, ever-ready with a joke; then there was straight-laced Michael Perry, who fitted Unilever's image of being bureaucratic and boring.
Next came Niall FitzGerald, the ebullient Irishman who breezed in, full of grand visions about ending African poverty and enrolling Britain in the euro. He also had a grand vision for Unilever, called Path to Growth but, by the time he stood down, it was looking as 'blue sky' as the other two ambitions as the group lurched from profit warning to profit warning, missing all of FitzGerald's targets along the way.
Patrick Cescau, the man left to pick up the pieces, has been at the helm less than than 18 months but it is already clear that he has a rather different style. He is, say observers, a detail man, a hands-on operator involved in everything from marketing the brands – Dove's advertisements featuring real women is, he says, 'a signal of what Unilever is all about' – to customer relationships.
'What stands out is that he is involved in day-to-day management decisions – he is not a chairman-like figure,' says Morgan Stanley analyst Michael Steib. 'That is exactly what Unilever needed at this point in time, given that there were so many issues in the business.'
Cescau has earned his place in Unilever's history for becoming its first chief executive. Until last April, the dual-listed group operated with joint chairmen – one for the Dutch arm and one for the UK, and no chief executive. A strategic review following the debacle at Royal Dutch/Shell, which has a similar dual nationality, called for a unified structure. Cescau, the driving force behind the review, took over as chief executive while Antony Burgmans, his counterpart at the Dutch arm, became chairman.
It was a 'profound change', says one insider, giving a clearer distinction between various roles within the company. It also helped Cescau push through the changes needed to get the group back on track much more quickly than in the old two-head-office structure. And, while some investors were disappointed that it did not go the whole hog and move to a single stock market listing, Cescau believes the current structure gives him all the autonomy he needs.
He has wasted no time in stamping his mark on the group. While his slogan 'One Unilever' sounds calm and unifying, it has involved considerable upheaval. The divisional fiefdoms under which the three businesses – health and personal products, food, and frozen foods – were run separately by separate management teams in each country have been merged. That has cost almost a fifth of senior management and many of those who remain have gone through restructuring as Cescau has concentrated on getting closer to retailers, the group's core customers. The changes have been felt right to the very top, where the three old executive teams have been disbanded and replaced with one covering all nationalities and divisions.
And the focus has switched from Path to Growth's fixation with profit margins to boosting market share. 'We can have a better relationship with the [retail] trade who are our customers,' says Cescau. 'We were going to market with two or three different companies, one of which had outstanding sales procedures, while the other one or two were weaker. Now, we are trying to be as good as the best everywhere. Always. So we are being more disciplined in the way we work.'
That has meant a trial project in the Netherlands and in the US of working more closely with supermarkets to ensure it is giving them what they want. It has been so successful that it is being rolled out across the rest of the group. While FitzGerald's reign was all about reducing the variety of products across the group, Cescau has actually started to introduce some new ones 'for example, cheaper ice cream ranges to complement its Magnum range' to ensure it has something to offer in each category.
There are signs that his strategy is succeeding. While the six months or so after he took over as joint chairman in September 2004 were dogged by profit warnings and disappointments, last week's full-year results showed signs of improvements, with profits up by more than a quarter and sales growth accelerating through the year.
But Cescau says this is just the start of a long slog: 'A year ago, we were losing market share; in 2005, we were starting to compete; now we want to try to be winners again.'
He retains the gentle French accent of his Paris birthplace, although he has not worked in France for 20 years. Like all senior Unilever executives, he has spent his 33 years with the group globe-trotting – from Germany to the Philippines, Portugal to Indonesia, and the US to the Netherlands. He has a German wife and two children working in the US, and it is hardly surprising that he does not know how to describe his nationality. Nor has he decided where he will retire in four years or so.
His new billet in London does, however, seem to suit him. 'The excitement and the buzz is extraordinary,' he says. And he goes to his local gym as often as he can to help maintain the focus and energy the job demands.
His first months have been energetic. Accompanying last week's full-year results announcement was the news that he plans to sell off the frozen food business, apart from the 'strategically important' Italian company. That comes hot on the heels of the disposal of the perfume business and the sale of its Dutch food business.
But he earned his Unilever spurs with acquisitions. As director of its food division, he was responsible for integrating the Bestfoods business, owner of the Hellmanns brand, with Unilever's own Liptons business, as well as the rather less successful Slim Fast business, whose sales have been plummeting more or less since it was acquired.
But mistakes like that have never been much of an impediment to progress at Unilever – FitzGerald was running the household products business when it launched a new formulation of Persil washing powder that was found to rot clothes.
The CV
Name Patrick Cescau
Born 1948, Paris
Education ESSEC business school and INSEAD: MBA 'with distinction'
Career Joined Unilever in 1973 in France. He has worked as chairman of its Indonesian business; president of its Lipton business in the US; and group financial director. He was parachuted into the US business to head the integration of Bestfoods in 2000. He is also a non-executive director of media group Pearson. In January 2005 he was awarded the Légion d'Honneur
Interests He and his German wife Imogen moved to London after Cescau took over at the helm in autumn 2004. A regular gym-goer, he also describes himself as a 'voracious reader, a passable golfer and a good photographer'

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