director profile
‘If I am not projecting a sense of optimism and a sense of calm, a sense of ambition and a sense of pride in the organisation, things aren’t going to work’
context, what we were going to be in a world where sugar was gone,” says Coveney. “The business that we are today is reflective of the decisions we made then.” That business is strongly focused on convenience food,
particularly in the UK, which last year accounted for over 80pc of worldwide sales of some €1bn. The cornerstone of the company’s strategy is to continue to build its business in the UK, but America is also an important target mar- ket and is expected to account for around US$100m of Greencore’s sales this year. Over the last five years or so, the company has also had
to transition the business away fromthe ingredients area. Itmade seven acquisitions since 2006, two in America and five in the UK, and completed a total of 10 disposals.
Merger debacle In March of this year, Greencore came out of a nine- month process whereby it hoped firstly to complete a merger with – and then a takeover of – Northern Foods, with which Coveney says there were great synergies. Greencore and Northern Foods originally agreed a nil premiummerger, which would have seen Coveney become chief executive of the combined business, Essenta Foods – an entity that would have had over €2bn in annual sales. “Just before the merger completed a bidder emerged
from left field and made a bid for Northern Foods, which led their board to change their recommendation away from the merger,” he says. Greencore spent a number of weeks trying to construct an alternative bid but was ulti- mately unsuccessful. “It’s certainly disappointing that we were unable to do
that, but I genuinely think there’s not much more we could have done,” he says. “In the end, had we tried to go ahead and execute that, we would have created a very dangerous deal for our business.” The company is now looking at alternative ways of
developing its UK and US businesses. “I think it would be difficult to find and execute a deal of that scale,” admits Coveney. “There’s not a set of obvious alternatives. But I think there are probably a series of discrete and smaller individual things that we can do. We’re not going to be rushed into doing something for the sake of it, but there certainly are opportunities out there for us that, at the right price, would be worth pursuing.”
28 Irish Director Summer 2011
Catalyst for change The failed merger was by no means Coveney’s first obsta- cle. Just three months into his tenure as chief executive, Greencore unearthed a significant level of deliberate financial misstatement in one of its smaller businesses, a mineral water company in Scotland. The total value of the fraud over a number of years amounted to nearly €20m and the group was required to make a public announce- ment and restate its accounts. “We had to do a rigorous assessment of all other parts
of the group to demonstrate to ourselves and to everybody else that it was a one-off item,” he says. “We used that as a catalytic event to make a lot of the changes that we’d been considering making anyway, around how we man- aged the business in terms of delayering and simplifying the reporting structures and the accountability of the business. “Undoubtedly, while I wouldn’t have wished that partic-
ular experience on anyone, the business and I were much the better for having been through that. “All of these were Greencore-specific issues, but we
would also have experienced the general industry chal- lenges of the last three years – credit crunch, significant recession, huge ingredient inflation, reputational issues in relation to Ireland and so forth. So, like everyone else, we had to manage through those things.”
Leadership That Coveney’s skills as a leader have been tested over the past three years is something of an understatement. He maintains his leadership style is heavily influenced by a combination of his family, education, sporting and direct work experiences. “My nine years in McKinsey would have been very important in shaping how I think and approach a lot of problems,” he says. “I’m quite informal. I’m very facts-driven in terms of
trying to get to answers. I hugely enjoy, and place a lot of premium on, being out in the business and meeting peo- ple. I am good at strategy and setting the direction for the business. Hopefully I now combine the visioning and big picture stuff, which I would have learnt a lot of dur- ing my time inMcKinsey, with the more day-to-day per- formance management approach you get from being CFO.
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