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NAPOLEON COMPLEX NAPOLEON COMPLEX
Richard Delevan



FOR Pierre Danon, his period of unanticipated unemployment last autumn must have seemed like Napoleon's exile on Elba, after losing his job as chief operating officer at French-based IT services group Capgemini for being caught interviewing for another position.

He was led astray by Brigitte Lemercier, a top Paris head-hunter who pushed him for a job at hotel group Accor. Not just any job, but the chief executive, a role for which he has been chafing at the bit for as long as any of his former colleagues can remember. Not for the first time, his ambition may have caused a row.

When the shortlist of candidates was leaked to the media, his employers at Capgemini took what some regarded as the extreme step of sacking him for merely allowing himself to be considered. It was particularly extreme for a company that had profited so much from his skills . . . his ability to remotivate 60,000 staff resulted in a massive growth in the company's performance and share price . . . and for which he was heralded as the next logical chief executive.

When it all came apart, however, Danon struck a pose worthy of Bonaparte himself, calling the Accor leak that led to his ignominious departure, "not good for France".

Napoleon languished for nearly 10 months on Elba before his ambition drew him back to the fray. Danon took just a tenth of that time before being snapped up by JP Morgan in London, returning to the city that made his international reputation, and eventually presenting him with the opportunity to lead Eircom.

Assuming, as expected, the 2.4bn takeover by Babcock & Brown . . . on which Danon was originally an adviser to the Australian investment house . . .passes regulatory muster, he will serve as executive chairman of Eircom beginning in September, but using just 50% of his time. He's searching at the moment for an apartment in Dublin. The other half of his professional life will be at JP Morgan in London, plus time spent seeing his family in Paris.

"Eircom is not a task that will fulfil him. It won't be enough, " predicted an ex-colleague.

'Enough' or 'suffire' may not be in Danon's DNA, much less his vocabulary. While gaining a bewildering array of qualifications in multiple disciplines . . . engineering, law, an MBA . . . Danon married relatively young to a woman named Laurence, forming France's top business power couple. The two rose in parallel careers, she in chemicals, he through the ranks at Xerox.

She is arguably now better known than he is, serving as chief executive of famed French department stores L'Printemps, being named one of Europe's top 25 women in business by the Financial Times and recently appointed to the board of Diageo as a non-executive director.

They managed to stay together, though farther apart. Danon rose in Xerox in France through Belgium and then to the US. He was recruited to take over BT's ailing retail division in 2000, which was haemorrhaging out too many of its 23 million customers for phone and internet services, losing money like mad and under assault from competitors on all sides.

Against all odds, he was credited with turning around BT's fortunes. He drove the company back to success with simpler pricing that brought back former customers, pushing forward with broadband, and even relaunching BT into the mobile market after previous managers had spun off BT's mobile business into O2, itself recently acquired by Spanish group Telefonica.

This last was truly bold, casting off inhibitions about the company's heritage and spurning its former mobile unit in favour of making BT a virtual mobile network operator, reselling instead former competitor Vodafone's services to business and consumers under a BT brand.

Despite all this, Danon was still pressed to do something about the core problem that afflicted BT . . . the longterm decline of revenues from traditional landline voice calls. High-speed broadband wasn't growing quickly enough.

His big idea, launched in July 2004, was a video-on-demand service over broadband. The technology was relatively simple. The hard part would have been to negotiate the deals with content providers . . . film and TV studios and sports leagues . . . to offer things people would want to watch. Danon wasn't there to realise his prediction that, by this year, 50% of BT's consumer customers would have video on demand.

But it was an idea that re-emerged last week as a cornerstone project for Danon's tenure at Eircom.

Danon's success and constant charm offensive with the media, contrasting with the self-deprecating BT group CEO, Dutch-born Ben Verwaayen, led to Danon, rather than his boss, being the most frequent public face of the company.

This was either benign . . . "the best communicator I've ever come across; every word is considered and thought through, delivered with extreme charm" . . . said one ex-colleague. Or something else.

"He was a fantastic manipulator, especially of the media, " recalled another.

"He'd brief against the CEO, through his own outside PR agency, and win favour with the reporters.

But inside the conference room he'd be imperial. He's so forceful that his ideas become religion. People who disagreed with his decisions would never speak up at the time. They waited until he 'd gone ."

Ultimately a company story demands a single hero, whether for media or investors, despite the reality that it is teams that deliver results. And eventually rumours began of friction between Verwaayen . . . known simply as 'Ben' to BT people . . . and Danon.

He wanted the top job, but he didn't want to wait, was the word in the City, Danon's strenuous and public denials notwithstanding.

In the end, it may have been a strategic disagreement with his bosses about an issue that might seem relevant to his new post that led to his move to Capgemini. Danon wanted to split BT Retail from the rest of BT's business.

He also underwent a massive cost-cutting exercise, slashing more than 1.2bn from the business. One area ripe for restructuring was the company's 150 call centres, spread out in areas around Britain and each employing anywhere from 20 to 1,000 people. He eventually cut it down to 31.

That he accomplished this without sparking industrial action from the Communication Workers Union was no mean feat. Though that union's deputy general secretary Jeannie sent out a grumpy 2004 press release bashing Danon for speculating that there might be even more rationalisation on the horizon, Danon claims . . . without contradiction from the CWU in Britain . . .

that his partnership approach with the union was central to his success.

It's an experience that will be the making of his success or otherwise at Eircom, where he will face the unprecedented challenge of sharing power in the most real way possible with former and (some, but not all) current employees in the form of the ESOT, which will own 35% of the new company, have two of the six seats on the board, and is promised a 'veto' over major company decisions.

What that veto actually means is still being worked out in fine print . . . and more likely at the boardroom table on a decision by decision basis.

But at the press conference announcing the formal bid of Babcock & Brown for Eircom last week, Danon was confident that a threeway partnership between management, the ESOT and the unions would be a stable platform from which to transform Eircom from a defensive former monopolist fighting a decade-old rear-guard action to a Grand Armee of growth.

Sitting down with Tribune Business one to one after the press conference, it was clear the charming Danon shares something else with his hero, Napoleon.

A sweet tooth. Napoleon went into battle with chocolate. The paradoxically trim Danon has two glasses of fizzy cola in front of him while munching on sweet pastries.

At the press conference he has impressed the assembled reporters for being so smooth and unflappable, even when a photographer decided to complain about his lack of broadband from Eircom. It's only later it dawns how ambitious it is to try and rethink Eircom . . . even after all the financial engineering behind the deal . . . as a growth story.

But for the moment, we allude to his fearsome boardroom reputation, a stark contrast from the appealing, sincere media performer. Which is the real Danon?

He gives a hint of Gallic shrug, says his style is to "be respectful" of everyone, but ultimately when something needs doing, "I just do it".

The key Eircom challenge everyone wants to know about is how he'll tackle is broadband. Whatever the reality of the current situation . . . Danon calls criticisms of Eircom's broadband rollout "unfair" and compares the situation to what he faced at BT . . . Danon is pretty convincing when he talks about his desire to see the issue dealt with.

"As long as it's not 100% available, I'll not be satisfied. It's a mindset of total commitment and openness, " he says, mentioning the BT experience in Northern Ireland, where it achieved 100% availability.

He also says he recognises the need to be pragmatic. "There are specificities [sic] that make it a challenge. The way the exchanges are configured in rural Ireland poses a challenge."

But he mentions an approach he used in Britain that may interest broadband activists like Damien Mulley of Ireland Offline, whom Danon invited to meet with him on Today FM's The Last Word later that evening.

"People who wanted broadband in [rural] Britain came to me and asked what they had to do to get us to put broadband into their area. They asked, 'how many customers would it take?'

Then they went away for three months and came back with a list of people ready to sign up. There's appetite for it and when it's a community subject things can happen."

His other main area of opportunity is mobile. Noting that while Meteor, which Eircom acquired last autumn in its own return to the mobile space, is at present a short-term play for the company, he clearly has his eye on finding a way back to a play in high-speed 3G mobile.

"There's a court case at the momentf a licence could become available, " he says, raising an eyebrow.

"There might also be people who have a licence who might be interested to share."

If this might include acquiring the licence and business of Hutchison's 3, which has had little success signing up customers to its 3G services, Danon isn't letting on. He does mention that the route of the virtual mobile operator, duplicating the strategy at BT, might be a possibility.

On whether management changes might be in the offing, he is cautiously diplomatic. "We are only starting discussions with the chief executive [Philip Nolan], " he says. "You can't negotiate a job with someone you're dealing with on due diligence." The next three to four months will be the period in which decisions are taken.

Former colleagues, however, believe Danon will quickly move Nolan out. "If he starts on 29 October, Nolan will be gone on 30 October, " said one.

The prospect of taking on his former colleagues doesn't bother him. Danny McLaughlin, head of BT Ireland, worked directly to Danon for more than four years. "We're friends, " says Danon. "He worked for me. Now we're competitors."

He smiles.

On the issue of splitting up the company between wholesale and retail, a proposal mooted at one point by Babcock & Brown that makes more sense in light of Danon's previous ambitions at BT, we get a taste, perhaps of things to come. Media reports after the press conference diverged sharply depending on which side of the Irish Sea you were on.

Irish media generally reported that a split was "off the table", quoting Danon's assertion during the press conference that "for the time being, there will be no break-up. It is a vertically integrated base plan".

Most failed to note his next sentences, "Across Europe, separation makes sense. We will respond if government approaches us."

The Financial Times reported that markets considered the split likely. The Daily Telegraph, however, reported an even more starkly different line from Danon: "'A lot of governments are now thinking about it and minds are maturing around the idea, ' he said [of a split, saying it made sense in a country of Ireland's size]. 'We will talk to the government and the regulator to gauge if there is an appetite. We want to see whether value can be created.'" Danon and B&B's Robert Topfer told the press conference that the business had been well-run over the last four years, despite the multiple changes in ownership. But the Telegraph had a different line:

"The company has been managed for a quick exit and a little bit starved of innovation so we also have an opportunity to invest in broadband, " it quoted Danon as saying, "which is less developed in Ireland."

It is worthwhile, we may find with Danon, to study each of his words as carefully as he chooses them. He has no intention of following his hero's example by overextending on his return to the arena.

CURRICULUM VITAE

PIERRE DANON
Job: Executive chairman designate, Eircom
Age: 50 Education: Civil engineering degree from Ponts et Chaussees, a law degree from Faculte de Droit Paris II Assas, an MBA from international business school HEC.
Career: Xerox; Head of BT Retail (20002004); chief operations officer, Capgemini (2004-2005); senior adviser, telecoms, JP Morgan (2005-present) Family: Married at 24 to Laurence Danon, now CEO of legendary French department store chain L'Printemps based in its famed Baron Haussman flagship location. Laurence was appointed this year as a non-executive director on the board of Diageo. They have two children, David, 24, and Felix, 16. They have a holiday home in Corsica, birthplace of Napoleon.
Hobbies: 'Too busy' for much except work commuting to see his family, but he enjoys reading histories of the 18th century.




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