|
|
Doing What Matters: How to Get Results That Make a Difference - The Revolutionary Old-School Approach (Hardcover)
by Jim Kilts , John F. Manfredi , Robert Lorber
| Category:
Leadership, Management, Change management, Business turnaround |
| Market price: ¥ 298.00
MSL price:
¥ 278.00
[ Shop incentives ]
|
| Stock:
Pre-order item, lead time 3-7 weeks upon payment [ COD term does not apply to pre-order items ] |
MSL rating:
 Good for Gifts |
| MSL Pointer Review:
James Kilts is one of the most successful CEOs of the last quarter-century. In this book, Kilts walks the reader through what successful CEOs focus on to build their companies and which time drains to avoid to keep from feeling unproductive. |
| If you want us to help you with the right titles you're looking for, or to make reading recommendations based on your needs, please contact our consultants. |
Detail |
Author |
Description |
Excerpt |
Reviews |
|
|
|
Author: Jim Kilts , John F. Manfredi , Robert Lorber
Publisher: Crown Business
Pub. in: September, 2007
ISBN: 0307351661
Pages: 336
Measurements: 9.3 x 6 x 1.4 inches
Origin of product: USA
Order code: BA00992
Other information: ISBN-13: 978-0307351661
|
|
Rate this product:
|
|
- Awards & Credential -
The author had run such well-known companies as Gillette, Nabisco and Kraft. This newly released book has been a business bestseller on Amazon.com ranking #25 in books out of millions as of October 14, 2007. |
|
- MSL Picks -
Doing What Matters is no substitute for a Harvard MBA; however, it probably offers a better return on investment. Readers learn much about Kilts' thinking as he went about turning Gillette around; careful readers will also gain insight into the fact that not all turnarounds are created equal.
Kilts begins by relating how "quick screen" thinking helped him initially assess what to do with Duracell, a premium battery product line that only marginally fit into Gillette's other wares. Selling Duracell was one possibility - Kilts could have spent a lot of time and effort researching the possibility, distracting from other important issues. Instead, he simply observed that Gillette's relatively high P/E ratio meant Duracell was worth more to Gillette than anyone else. Another alternative was to simply "milk" Duracell - cut prices, and work it like a commodity. This didn't make sense either because consumers had a strong preference for Duracell and its formulation worked much better than regular zinc batteries. Thus, Kilts was quickly led to conclude that since Duracell was a category leader, Gillette needed to increase advertising (had been cut) and stop the rampant promotions and discounting.
Another major option reviewed through Kilts' quick screen was to strip everything down to shaving products - Gillette's core and most profitable business. This would reduce sales from $10 billion to $4, vs. the $48 billion at competitor Unilever and $70 at Nestle, and relegate the firm to minor player status vs. eg. $400 billion Wal-Mart.
Moving on, Kilts decided to take the Personal Care product line (shaving preparations, deodorants) out of Blades and Razors management because the Personal Care products required greater attention to detail and new product development.
Setting reasonable, but challenging and sustainable, goals is a major Kilts' concern. It's easy to temporarily boost profit and stock price through raising prices on brand leader products - however, this is not sustainable. Similarly, it is also easy to temporarily boost the stock price by declaring multiple-year double-digit revenue growth goals. This, however, is the path to what Kilts calls the "Circle of Doom," since only about 15% of companies that have done such succeeded doing such for five years. The more likely outcome involves building overhead and capital investment, followed by sales shortfalls, discounting (in an attempt to build volume - G.M., are your reading this?), then price increases (to recover revenue), cuts in marketing, and channel-stuffing (builds inventories throughout the system, end-of-month games, and drives production people nuts due to heightened peaks and troughs.
Three major (and early) decisions were to 1)severely reduce the number of products (SKUs), 2)set benchmarks throughout the company based on performance at leading competitors, and 3)commit to zero overhead growth (ZOG). Gillette recognized the need to cut SKUs prior to Kilts - a committee had been working on it for 18 months, but accomplished nothing (there were always counter-arguments). Kilts re-energized the group by telling them to come up with a 50% reduction list in one week, to be implemented within 3 months. (They actually cut 2/3 of Gillette's products, representing all of 2% of sales and a much greater proportion of headaches, in 9 months.) As for #2, everyone recognized the need to cut costs, but saw the problem as existing in other peoples' areas; Kilts' approach got things moving. (Kilts, however, did not tell us much about this benchmarking information was obtained, other than using a consulting firm to review IT, and instituting real-time reverse-bidding for suppliers on eg. PCs.) Area #3 included not only the obvious, but focusing on improved equipment utilization to eliminate the need for more.
Finally, Kilts offers one additional important tip - hit the ground running on Day One. Kilts did so via analyses of the firm's strengths and weaknesses prior to walking in the door; these findings were immediately and honestly (eg. the potential for layoffs) communicated at all levels, and the progress began.
A pretty good education for $16.50!
(From quoting Loyd Eskildson, USA)
Target readers:
Executives, managers, leaders in governments and nonprofits, academics and MBAs, all the other Jack Welch readers.
|
|
- Better with -
Better with
My Years with General Motors
:
|
|
Customers who bought this product also bought:
|
|
JAMES M. KILTS, a founding partner of the private equity firm Centerview Partners, previously was chairman and CEO of the Gillette Company and prior to that CEO of Nabisco and Kraft. He has been a visiting lecturer and executive-in-residence at the University of Chicago, where he established the James M. Kilts Center for Marketing at the Graduate School of Business.
JOHN F. MANFREDI, managing partner of Manloy Associates, formerly was senior vice president of investor relations and corporate affairs at the Gillette Company and prior to that executive vice president at Nabisco.
ROBERT L. LORBER is president and CEO of the Lorber Kamai Consulting Group and associate professor at the University of California at Davis.
|
|
From Publisher
When Warren Buffett was asked why the Gillette board of directors chose Jim Kilts to be CEO, he said, “Jim made as much sense in terms of talking about business as anybody I’ve ever talked to. If you listen to Jim analyze a business situation you get absolutely no baloney. And, frankly, finding someone like that is a rarity.”
There is only one CEO in recent times who has faced - and succeeded at - the extraordinary challenges of leading three major companies - Gillette, Nabisco, and Kraft - into prosperous futures by doing what matters on the fundamentals.
That CEO is Jim Kilts. In this vivid first-person account he reveals his system for success that is both cutting-edge and back-to-basics. Doing What Matters - the action plan for identifying and tackling what’s important and ignoring the rest - is the key to winning in a warp-speed world where the need for revolutionary speed and decisiveness increases by the day.
Kilts illustrates his ideas with colorful stories, such as “that little red razor.” A new product idea he proposed early on at Gillette, it was initially shelved because “everyone knew you couldn’t sell a red razor,” but went on to become one of Gillette’s biggest marketing successes ever.
Jim Kilts’s focus on both business fundamentals and personal attributes provides the “complete package,” showing how to get results that make a difference through:
- Intellectual integrity: The ability to face the unvarnished truth about yourself and your business and using what you see as the basis for action.
- Generating emotional engagement and enthusiasm: Using the force of your personality and ideas to infuse people and an entire organization with a sense of purpose and mission.
- Action: Gillette, with just five product lines, had over 20,000 SKUs. After studying the issue for over two years, there were still 20,000. How Kilts got Gillette off the dime to pare down the number to 7,000 almost overnight is an astonishing example of getting the rubber to meet the road - with enormous benefits to the business.
- Understanding the right things through an overarching concept to frame and filter issues: For Jim Kilts it was Total Brand Value, the framework he used in the consumer products industry for achieving better, faster, and more complete results than the competition.
Whether you’re CEO of a multibillion-dollar global company, the brand manager for a product, an entrepreneur starting a small business, or just beginning a career, Doing What Matters provides the practical ideas that get results - ranging from a day one action plan for starting a new job to a chorus of cheers and support to a program of total innovation that involves everyone in changes from small to “big bang.”
|
Chapter 1
How Do You Know What Really Matters?
One of the first phone calls I received when news broke about my becoming Gillette’s new CEO was from a Boston-based business associate. “Jim, I know a lot of Gillette executives, and my advice is go slow.” Gillette people don’t like outsiders, he said, which is why the company last had an outside CEO seventy years ago, and he failed miserably. “Give people time to get to know you before you start changing things,” my friend said. “It’s the best approach you can take.”
That call was followed by many more, along with dozens of proposals from professionals, including consultants, bankers, compensation specialists, and sales motivation experts. Each had a plan or recommendation that should receive my top priority if I wanted to succeed at Gillette.
With all that advice, how do you decide what matters?
One of the biggest impediments to success in business - for individuals and companies - is the failure to achieve that understanding.
Whether you’re the CEO of a multibillion-dollar company, the brand manager for a struggling product, a director of human resources, or an entrepreneur starting your own business, you’re always confronted with an insurmountable amount of information and a number of options, conflicting opinions, and management theories that are as endless as they are confusing.
Making these decisions isn’t a job for the timid or weak of heart. It takes guts to say these are the things that really matter; I’ll pay absolutely no attention to the rest. That’s the challenge everyone faces. This book helps you meet that challenge.
You’re always confronted with an insurmountable amount of information and possible options.
$40 Billion of LosT Value With No End In Sight
For example, I faced no bigger challenge than the decisions we made during my first months at Gillette. Early in 2001, the company had missed its earnings estimates for fifteen straight quarters. Sales and earnings had been flat for the prior four years. Market shares were declining sharply. Advertising spending, the lifeline of consumer products, had been slashed year after year. Overhead costs were high and growing. And competition was intensifying.
Wall Street had lost patience with this chronic under- performance. And Gillette’s share price reflected the disappointment. It had fallen from an all-time high of $64.25 in March of 1999 to $24.50 in 2001. That’s a 62 percent drop in two years - a loss in market capitalization of close to $40 billion, and there was no end in sight.
So it’s no surprise that analysts and investors had plenty of ideas for what had to be done. The problem was that no two suggestions were the same, and many were conflicting. It was up to me to decide which ones really mattered. Or whether it was better to put aside the advice and chart a different course.
Multiple Options, No Simple Answers
These wouldn’t be simple decisions. And they would make the difference between whether Gillette would survive and prosper, or continue its unrelenting decline. Here are some of the suggestions that were being offered. Many would result in a corporate yard sale.
- Divest the ailing Duracell business. This was a $2 billion business that Gillette had spent around $8 billion dollars to purchase just four years before. The post-acquisition performance had been miserable. Duracell had gone from one of the best-performing brands in the consumer products sector to a true basket case. Its market share had slipped by almost 15 percent - from 46 to 40 percent of the alkaline-battery market in the United States. And the competitive pressure was mounting. So on the face of it, selling the Duracell business and cutting any further losses seemed like a pretty good idea.
- Hold on to the Duracell business, but slash prices drastically. In other words, we should acknowledge that Gillette’s high-priced acquisition of Duracell was a big mistake. Admit that batteries were a commodity business, not an advantaged category. And milk our investment, not try to restore it. Since it’s never good to tilt at windmills, this was another seemingly plausible approach.
- Divest the Braun electric shaver and household appliance business. Braun represented an early acquisition by Gillette, dating back to 1967. Unfortunately, Braun’s performance had been bleaker than Duracell’s for a far longer time. The last time Braun had made an annual budget was such a distant memory that no present senior manager could even remember it. There was no question that Braun’s inconsistent performance and costly investments were a major drag on Gillette.
- Divest the Personal Care business, which included such brands as Right Guard, Dry Idea, and Soft & Dri antiperspirants and deodorants as well as Gillette Foamy and the Gillette Series shaving preparations. Not only were the market shares for most of these products falling, their profits also were deteriorating, with operating margins that were much lower than competitors’.
- Strip the company by selling all assets except the highly profitable blade and razor business; operate Gillette as a pure play in one sector only. The sales would be lower, but the profit margins would be so high that the share price would rocket.
- Acknowledge that Gillette was yesterday’s news and invent a whole new growth strategy. Enter new product sectors that analysts said were “burgeoning with growth.” Multiple acquisitions would redefine Gillette and jump-start the stock performance.
- Or, acknowledge that Gillette was yesterday’s news and throw in the towel. Call in the investment bankers and work on the best possible “endgame.”
These were a broad and opposing group of options, and that wasn’t all of them. There were dozens of others, dealing with everything from business and operating strategies to where Gillette’s headquarters should be located (it was in the high-rent Prudential Tower in Boston’s Back Bay district). I could have filled my days just sorting through the endless opinions that were being offered up on how to manage Gillette. In the end, I worked with my team to set our own course that would restore Gillette to its number one position in the consumer products arena.
Deciding What Really Matters
But how do you make such decisions? How do you know what really matters? Is there an approach that can work regardless of the circumstances? Something that can put you on the right course more often than not? There is. It’s what I call the fast-track quick-screen elimination process. Many times in my career - especially when working through the fog of conflicting opinions - I’ve found the right direction by answering a few critical questions that allow me to eliminate most, if not all, other options.
Let’s go back to the advice on Gillette to see how it works.
Quick-screen took me to the right answer without having to slog through a swamp of details. Divest Duracell In order to divest Duracell, there had to be someone willing to buy Duracell. So Duracell had to be worth more to someone else than to Gillette. But, there wasn’t anyone. The battery category was so irrational and competitive no company that could afford to buy Duracell wanted to get into the fray. And even if they did, Gillette’s price-earnings ratio, which is the price investors will pay for a stock expressed as a multiple of its net earnings, was far higher than any possible buyer. So Duracell was worth more to Gillette than anyone else. By utilizing the fast-track quick-screen elimination process, I could eliminate the “sell Duracell” option. No need to give it a second thought.
Milk Duracell A second option was slash the prices on Duracell, admit it’s an undifferentiated commodity, and milk the business. This time I applied my past experience in the quick-screen process. Was a Duracell battery more or less of a commodity than Kraft Singles - the cheese slices that carried, on average, a 25 percent higher price than private-label products when I managed the Kraft business? (Literally, in blind taste tests, consumers could detect only a slight difference between Kraft and private-label.)
The differences between Duracell batteries and the private-label and price-brand batteries were perceived by consumers to be significant on a number of factors, including reliability and durability. In addition, the performance difference between alkaline Duracell and general-purpose zinc batteries was enormous. So why give up on Duracell, a branded product with great equity and an impeccable twenty-year record of high growth and profitability, simply because it had stumbled for the last three years? Again, the quick screen took us to the right answer without having to slog through a swamp of detail. (Don’t get me wrong; we later did an exhaustive study of the battery business. Our new management team had to assess the category’s potential and determine the best way to get it. And that required detailed analysis.)
The quick screen told us that Duracell was the leader in the alkaline battery category, which meant it should be disciplined in how it led the category and in how it imposed discipline when the nonleaders got out of line. Duracell had done neither.
The leader in a consumer products category must invest in marketing to drive growth and increase the consumer equity and preference for the brand. Instead, Duracell had cut its advertising substantially...
|
|
| View all 5 comments |
Warren E. Buffett (MSL quote), USA
<2007-10-14 00:00>
Jim Kilts transformed Gillette. Before his arrival, the company was a study in self-deception. Great brands were being mishandled, operational and financial discipline was non-existent and fanciful promises to investors were standard practice. In record time, Jim excised these business pathogens. I've learned much from Jim. So, too, will readers of this book.
|
Jack Welch (Jack Welch, LLC, MSL quote), USA
<2007-10-14 00:00>
Doing What Matters is an insightful and practical approach to business by a transformative leader with a great track record of success. |
Publishers Weekly (MSL quote), USA
<2007-10-14 00:00>
In a business book that reads like a case study, turnaround artist and brand-builder Kilts walks managers and CEOs through the lessons he learned while resuscitating shaving-company Gillette. Having revived Nabisco, Kilts was planning to retire until famed investor Warren Buffett persuaded him to upgrade Gillette. With an analytical tone, Kilts describes how he moved the company off the ledge and paved the way for a bidding war. The book is likely to resonate with CEOs accustomed to dense discussions of corporate successes, businessy acronyms (like ZOG, or zero overhead growth) and sorting through heaps of advice. On rare occasions, Kilts gets folksy, as when describing the loss of perspective that comes with immersion in an organization's culture: If you put a frog into boiling water, it jumps out, Kilts writes. If you put a frog into cool water and slowly raise the temperature, the frog gets cooked before it knows what's happening. The slow boil is bad for business, he reasons. But overall, it works as an approach for this book. |
The Wall Street Journal (MSL quote), USA
<2007-10-14 00:00>
Jim Kilts is a proven wizard at making companies run. |
View all 5 comments |
|
|
|
|
