The Interview: Niall Fitzgerald: The brand plays on
In his first interview since taking control of Reuters, the former Unilever CEO tells Raymond Snoddy his views on brand protection, the changing face of news media, and the importance of a good stamp collection
Monday 07 February 2005
The slight difficulty was that Mandela was coming to London less than a month later to meet and thank the rich individuals who would by then have opened their chequebooks.
FitzGerald, the former joint chairman and chief executive of the food and consumer products multi-national Unilever, who had once run the company's operations in South Africa, worked his address book.
"We had 10 days to do it and we raised pounds 8m in the 10 days. My calls were not all that popular," admits FitzGerald with more than a trace of understatement as he sprawls in a chair in his seventh-floor office in Reuters' Fleet Street headquarters. It is a much bigger, more expansive office than that vacated by his predecessor, Sir Christopher Hogg, who chaired the financial information and news group for more than 18 years.
On Friday last week, Mandela went to meet FitzGerald at Reuters to discuss the progress of the Legacy Fund which will be used to pay for scholarships, and help orphans of the Aids epidemic as well as tackling other social issues in Africa. "I will carry on from there," promises Fitzgerald, who will be kept busy placing many more calls to rich friends and businessmen.
The executive, born and brought up in Limerick, who passionately retains his Irish citizenship, insists that he has never been involved in something he didn't believe in and that he didn't enjoy. And that is why he has become chairman of Reuters when, after a working life spent in Unilever, he was looking for something new to do, something new to learn.
"I was very intrigued with the very rigorous nature of the Reuters principle which insisted on the news being reported as it is without opinion. It has to be objective and it has to lack bias of any kind and those principles not only underpin the news they actually underpin the whole business," says FitzGerald.
In his first interview since taking over as chairman at the beginning of October, FitzGerald adds: "What it unique about Reuters is that it doesn't express an opinion. Every other organisation expresses an opinion. The Times has an opinion. The Guardian has an opinion. The Telegraph has an opinion and, yes, the BBC has an opinion."
The new chairman says he knew all about the news organisation's values long before he accepted the job. His daughter Tara is a former Reuters journalist who reported from Frankfurt, the Middle East and Moscow. She was one of three journalists who went with Russian special forces into the Moscow theatre at the end of the tragic siege and watched as unconscious terrorists were each shot in the head.
In one obvious way, Reuters is very different from his old job. At Unilever, FitzGerald was responsible for several thousand brands, though the number was eventually reduced to around 400. They range from Marmite and Persil to Flora, Magnum and Lynx. In what must have something to do with the luck of the Irish he still got the top job despite running the detergents division that produced a new brand of Persil that had to be withdrawn because it rotted clothes.
At Reuters, founded more than 150 years ago by Julius Reuter, he has only one brand to worry about and its characteristics intrigue him. "In fact the brand and what the brand represents is much bigger than the company," says FitzGerald. Last week he told young Reuters executives that their job and their opportunity "is to make the company as big as the brand". It is, he believes, a brand that says not just trust, lack of bias "and a genuine truth in the news" but also internationalism.
FitzGerald is now calling on his consumer-brand experience to launch an investigation into how Reuters the business can become as big as Reuters the brand.
"The first thing we are currently doing is to define what the brand is because it hasn't been the subject of what I would call a disciplined brand exercise. What exactly does Reuters represent and who are the people to whom it has meaning?" he says.
Once the power and meaning of the brand has been teased out, the information will be used to inform a new growth strategy for the company, which has suffered greatly from the deep recession in the global financial services industry. In the past couple of years Reuters has been hit by a number of body blows including the axing of more than 3,000 jobs - the worst loss in its history - and a share price that fell disastrously for a time below pounds 1.
Chief executive Tom Glocer has cut costs, stemmed the losses and stabilised the business. Analysts are now looking for full-year revenues of pounds 2.34bn and pre-tax profits of pounds 400m, and the company is expected to return to growth this year. The share price has even managed in recent weeks to breach the pounds 4 barrier.
"Now the task is to decide where the Reuters brand could go, realistically go, not just `I'd love to do that'. The one thing that kills a brand is if you allow it to stretch in an ill-disciplined way," says FitzGerald, the arch exponent of free trade and capitalism who was once for a short time a member of the Irish Communist Party. He laughs off the student allegiance now by saying that was where the prettiest girls were to be found.
"The new strategy will be a blend of: can we grow on our existing markets and are there adjacent markets where we are confident that we will grow, and are there new areas where we have either the brand or the technology or the products which we could extend into?" he says.
Whatever is decided, there are unlikely to be large lurches in new directions or commitment of huge new sums of money.
But FitzGerald is intrigued by how widely Reuters photographs of the tsunami disaster were used without being credited. Photographs of the wave taken by Reuters Indian staff photographer Arko Batto, he says, were published on the cover of The Economist, Time, Newsweek and more than a hundred other magazines. "They were Reuters pictures but there was no attribution," says FitzGerald, who clearly plans to ensure that there is a more of a link between the product and the brand in this respect in future.
And then again there is the trust factor. "In the very complex and troubled world in which we live the commodity that is in least supply is trust, and yet at the very heart of what Reuters is, is trust so it has to be capable of being bigger and extending further than it has so far," he insists.
There have already been suggestions that Reuters could launch television news channels in the Far East, although it is far more likely that the news agency will supply content rather than own and run new channels.
There could, however, be an expansion of the provision of Reuters television news via the internet.
In October, Reuters announced the launch, via Microsoft, of an interactive television news channel. To begin with the service will be mainly aimed at the US but the potential for international expansion is obvious.
In recent years Reuters has already been aiming information services at individual investors in addition to the expensive professional services for brokers and bankers and that could receive greater emphasis in future.
It is already clear that Reuters will in future concentrate more on areas where it has "real competence and real competitive advantage".
In recent weeks that has meant Reuters has decided to acquire Moneyline Telerate, which will give the business more "real-time" financial information. At the same time "strategic alternatives" are being considered for the future of Instinet, its online stock-broking business. In effect the business is being put up for sale.
"There has to be real competitive advantage," says FitzGerald. "Some of the things that Reuters collected in the past are currently being divested. In the past they strayed into areas that didn't have a genuine competitive advantage. The starting competitive advantage is the uniqueness of its content."
He is already convinced that the Reuters news-gathering operation, largely a cost rather than a profit centre if the numbers were separated out, is in fact inextricably linked to everything that Reuters does.
It would be impossible to provide the real-time information that clients want without the underpinning of a worldwide news operation.
Apart from his new role at Reuters, FitzGerald has been a major player in the media for years because his company is one of the world's largest advertisers. He has watched as the number of media outlets have multiplied and the television audience has fragmented and has been one of the loudest voices warning traditional media owners that they have to change.
"The traditional media will survive but they will survive in different forms and survive to different degrees. Fifteen years ago probably 98 per cent of Unilever's expenditure on brand communication was on TV advertising. I don't know what the figure is now but it might be less than 70 per cent and dropping," he says.
If young men spend more time on computer games than watching television, then advertising will obviously migrate in that direction. His advice - and he is president of the Advertising Association - to the traditional media players has been unambiguous.
"If you guys stick at the old model you will be dead. You have to take part of that model and adapt it to the technology that is available," he emphasises. But overall he is a fan of the media, although he feels it has often been over-personalised too obsessed with celebrity.
"I am not one of those people who likes to rail against the press and say how intrusive and nasty they are. It's not because I don't think they are at times, but I'm like Winston Churchill and democracy. It's a lousy system but it's the best we have," says FitzGerald.
"I think an open press which has the ability to really investigate and call people to account is what a healthy democracy needs," he adds.
It was the media which mobilised public opinion to do something about the victims of the tsunami, and he is optimistic that public opinion can now be mobilised to do something about the continuing disasters in many corners of the world.
"The one closest to my heart is Africa, where you have a tsunami which keeps 300 million to 400 million people living on a dollar a day. Try it for just one day and then live on a dollar every day of every year," says FitzGerald, a multi-millionaire who holds an honorary knighthood. He could have had a full knighthood as Irish citizens can, but only if they take dual nationality - clearly something that FitzGerald did not want to do.
Throughout his career, Fitzgerald has enjoyed the luxury of pursuing the cause of liberalising of trade and the opening up of markets which was at the same time in the interests of a multi-national company like Unilever and, he believes, the best way to combat poverty.
Doing something about world poverty - "the defence of prosperity must begin with an attack on poverty" - has been a leitmotiv throughout his career. It may have begun in his native Limerick where Frank McCourt's Angela's Ashes exposed poverty in the city in the Forties and Fifties, much to the anger of many of its present citizens.
FitzGerald, whose father was a customs officer and mother a journalist, believes that McCourt's account is entirely accurate, and says he himself saw children with bare feet picking up the tiny bits of coal that fell from coal lorries.
"I think in a subconscious sense that has clearly influenced me because I saw it close up from a relatively comfortable perspective and that made it all the more acute," he says.
In his new role at Reuters, he promises he will never attempt to influence editorial content, and last week Reuters carried a long piece critical of Unilever's current performance and of the difficulties caused by what was FitzGerald's five-year plan for the company.
But clearly Reuters' international approach to news fits effortlessly into his world vision - business and belief marching hand in hand.
Apart from trying to do something about world poverty, FitzGerald is clearly a man of many passionate, and sometimes surprising interests, and nearly always there is a story lying not far behind the bald facts.
He is a Manchester United fan but is he one who actually goes to the games? His next appointment after this interview was at Highbury, where Manchester United ended up beating Arsenal 4-2. Curiously, that also was the margin of victory when FitzGerald, now 59, was taken by his father to the FA Cup Final in 1948 when Manchester United beat Blackpool.
"My earliest memory is sitting on my father's lap at the game and when Manchester United scored their first goal he threw me in the air. History does not record how I landed," he says with a laugh.
Is it true that at the height of the apartheid era in South Africa he built de-segregated lavatories for the Unilever staff there?
FitzGerald tells how when he challenged why there were so many different lavatories in what was called "the ablution blocks" it was explained that there were different lavatories for whites, coloureds, blacks and Indians. It was the law.
"I don't give a shit about the law I'm not having them," replied FitzGerald, who said they could be the best lavatories ever built with marble floors and gold-plated taps if necessary just so long as the only categories were for men and women. He got away with it.
Is this marathon specialist - New York marathon two years ago - and rugby fan really also a stamp collector? Up to a point. He only collects Irish stamps, and for a very particular reason. When he was nine his father gave him his complete collection of Irish stamps from the beginning in 1921 of the independent state, when British stamps were for a period over- printed in Irish. A few weeks later the young FitzGerald swapped the valuable collection for some tin soldiers.
"That my father forgave me was a minor miracle but for years I have carried the guilt of what I had done. About 10 years ago I decided I am going to make up his collection and that is what I have been doing," he says.
FitzGerald now has an example of every Irish stamp ever printed save one - a 1921 over-printed 10 shilling stamp. When he finds an example it will probably cost him around pounds 10,000.
And is he really passionate about opera? "Anyone who doesn't get shivers down their back by the fourth bar of La Traviata isn't a member of the human race," says FitzGerald with an air of finality.
And now the Reuters organisation is being added to the long list of passions of Niall FitzGerald, who lists his interests in Who's Who as merely "observing humanity".
THE HISTORY OF REUTERS
1849 German-born Paul Julius Reuter cottons on to the idea of using pigeons to send news of stock market prices rapidly between Aachen and Brussels. Two years later he sets up an office in the City of London to take advantage of the new Calais-Dover cable and wire stock price quotations between investors in London and Paris.
1865 Now known as Reuters, the agency, which has expanded its service to supply the British press and publications on the Continent, is the first in Europe to bring news of President Lincoln's assassination in the United States. During the next decade, undersea cables and overland telegraphs establish links with the Far East and South America.
1925 The Press Association, the British agency, takes a majority holding in Reuters Ltd. Two years later Reuters introduces the teleprinter to supply copy to London newspapers.
1939 The company moves to its famous home at 85 Fleet Street. For the ensuing war years it is put under pressure by the British government to support the national interests of its host country. Reuters becomes a private company in 1941 to counteract this. Owned by the British national and provincial press (the Reuters Trust), the agency is committed to neutrality.
1984 Reuters becomes a public company, floating on the London Stock Exchange and the Nasdaq. The company expands its range of business products and in 2001 makes its largest acquisition, when it buys most of Bridge Information Systems. Modern scoops claimed by Reuters include the fall of the Berlin Wall, the Iraqi invasion of Kuwait and the Bali bombing.
2005 The agency has an editorial staff of 2,300 working in 197 bureaux. This makes it the world's largest international multimedia news agency. It claims to publish more than eight million words daily in 19 languages and to produce 1,000 pictures from its team of 600 photographers.
Today in the Premier League, Everton face Manchester United, and Arsenal take on Chelsea at the Emirates Stadium. A victory for Jose Mourinho's side, and they could win the Premier League title as soon as Wednesday with a win over Leicester.
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