With Path to Growth visibly running into the sand, a radical overhaul of Unilever’s rambling structure could not be delayed much longer. But reform has got off to a shaky start, and whether it will be enough to put the multinational brands giant back on track is a reasonable question.
Let’s look at the positives first. Getting rid of the dual-power system at Unilever is pretty much an unalloyed good. Duarchy may find favour in certain capital markets, but it is no friend of global marketing (or for that matter organisational efficiency). Its card was marked from the moment Sir Crispin Davis abandoned the system at Reed Elsevier; Shell, another brand-conscious multinational corporation, will soon follow Unilever’s suit, leaving the archaic management practice the preserve of a few mining companies.
Good too that clandestine infighting between the two former Unilever co-chairmen has resulted in a clear, rather than fudged, result. Making Antony Burgmans an executive (as opposed to non-executive) chairman would have surreptitiously undercut the authority of the new role of chief executive. As it is, we have an unambiguous leader in Patrick Cescau. Theoretically, therefore, Cescau holds a very much stronger hand than his predecessor Niall FitzGerald. But FitzGerald, for all the criticism now heaped upon him, was a highly effective industry spokesman and figurehead. He may have been an accountant by training, but he assumed the mantle of marketing with ease. It remains to be seen whether Cescau (also an accountant) can fulfil the same role. Certainly the initial signs are not that good. For all his Gallic urbanity, Cescau’s enthronement was a cold, carefully stage-managed affair which shed little light on his personality or, for that matter, the detail of reform.
‘Early days yet’ might be the retort. But he shouldn’t let a lost opportunity turn into a public relations disaster by holding back too long. Other packaged goods leaders – those who are seen to be bucking the adverse trends affecting their sector – have adopted a more open and transparent demeanour, and are seen to be leading from the front. Step forward, in particular, P&G’s Alan Lafley (MW February 3). Even the chief executive of traditionally secretive NestlÃ©, Peter Brabeck, seems ready to engage in a public debate on brands and where they are going. Brabeck, unlike many CEOs, is a marketer by profession and currently combines the duties of his chief marketing officer with his own. So, when he talks about the trade-off between the efficiency and effectiveness of global brands, and the need for a careful balance between central command and local autonomy, his words carry particular weight.
There’s a message here, for Cescau. Unilever is reacting, perhaps belatedly, to too much fragmentation. Unlike P&G (Wella, Gillette and so on) and NestlÃ© (which – as yet – has only a minority stake in L’OrÃ©al) it does not have easy recourse to higher-margin organic growth, being heavily biased to food and home products. The temptation, therefore, may be to let the pendulum swing too far towards autocratic central control, not least to placate increasingly restive investors. Cescau, leading from the front of what is still one of the great brand owners, can play an important role in disabusing us of any such fears.
Stuart Smith, Editor