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WHAT
MATTERS
How to Get Results That Make a Difference—
The Revolutionary Old-School Approach
J A M E S M . K I LT S
Former Chairman and CEO
of the Gillette Company
Kilts, James M.
Doing what matters : how to get results that make a difference—
the revolutionary old-school approach / James M. Kilts,
with John F. Manfredi and Robert L. Lorber
Includes index.
1. Management. 2. Organizational effectiveness. 3. Success in business.
4. Executives—Biography. I. Manfredi, John F. (John Frederick).
II. Lorber, Robert L. III. Title.
HD31.K4674 2007
658.4'09—dc22
2007010065
ISBN 978-0-307-45178-1
10 9 8 7 6 5 4 3 2 1
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Doing What Matters
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Also available as an Audiobook
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CONTENTS
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ACKNOWLEDGMENTS 303
INDEX 307
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Over the next eight years, my mind and energy shifted from
the halls of academia to the more white-knuckled experiences
of helping to lead Nabisco and Gillette out of serious business
nosedives that threatened their very existence. However, during
those years, the question of deciding on, and then doing, what
matters was an ongoing consideration for me.
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Not only had Gillette invented the safety razor and the
double-edged blade, it had also commercialized every major
advance in wet shaving for over a hundred years. And in recent
years, the Gillette development machine seemed to be working
better than ever. The Mach3 shaving system that was intro-
duced in 1998 was a runaway success that generated more than
$2.5 billion in sales during its first three years—a premium-
priced, exceptionally high-profit product that men all around
the world loved.
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• Formulas abound for choosing good people. The Doing What Mat-
ters practices not only gave my companies great bench strength,
they also groomed CEOs and senior leaders for several other For-
tune companies.
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What Matters for Leaders The first section deals with the fun-
damental analysis that is the basis for managing a business and
the personal attributes that are critical for leading one.
Fundamental analysis helps you work your way through a
lot of myths and misconceptions about management. It pro-
vides you with a rock-solid foundation for setting your targets
and establishing your objectives. In brief, it gets you on the
right road for doing what matters.
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Jim Kilts
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ATTITUDES,
AND
PEOPLE MATTER
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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.
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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.
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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.
Divest Duracell In order to divest
Duracell, there had to be someone will- Quick screen took me
ing to buy Duracell. So Duracell had to to the right answer
be worth more to someone else than to
without having to slog
Gillette. But, there wasn’t anyone. The
through a swamp of
battery category was so irrational and
details.
competitive no company that could af-
ford to buy Duracell wanted to get into
the fray. And even if they did, Gillette’s price-earnings (p/e)
ratio, which is the price investors will pay for a stock expressed
as a multiple of its net earnings, was far higher than the (p/e) of
any possible buyer. So Duracell was worth more to Gillette
than anyone else. By utilizing the fast-track quick-screen elimi-
nation 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 Dura-
cell, 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,
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variant of the 80/20 rule works here. You almost always can
screen out four-fifths of the choices, which means that what
matters is the remaining 20 percent. In
Your assessment must effect, something that seemed larger
be well thought than life is now scaled down to man-
through and ageable proportions. You will find spe-
fact based. cific steps for applying this approach at
the end of the chapter.
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then it’s time for a change. And that was the situation when we
started at Gillette.
Peter Klein, my longtime associate, first worked on the
Gillette Personal Care business in the 1970s. He became part of
the new Gillette management team and pointed out that de-
odorants and antiperspirants required great attention to detail
and a constant flow of new fragrances, forms, and other con-
sumer benefits to stay ahead of competition. But as part of the
much larger and more profitable Blades & Razors Business
Unit, Personal Care became an afterthought. It was a training
ground for young managers, and not a place with a lot of insti-
tutional knowledge about the ins and outs of toiletries.
Those were the insights we used in the fast-track quick-
screen process that resulted in my setting up Personal Care as a
separate business unit. Rather than focusing primarily on utiliz-
ing scale and limiting the personnel expenses associated with
running Personal Care, we paid attention to the vitality of the
brands and increased cost control that a dedicated management
would bring to these products. Within three years of splitting
off the Personal Care division, market shares were rising, prof-
its had returned to competitive levels, and the new-product
pipeline was bursting with innovation.
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The Little Red Razor that Could Reenter the red razor. Not re-
ally convinced of the old-truth validity of the cut-and-blood
basis for eliminating red as a razor color, I went back to our
Blades & Razors Business Unit and asked them to put the test-
ing of a red razor on a fast track.
The results, backed by an excellent marketing program,
were staggering. The red razor became our Mach3 Turbo
Champion. The concept that powered the marketing initiative
was racecar-driver champions behind the wheels of red super-
charged cars. High-powered men in high-performance cars tak-
ing on the gutsy challenge of high-speed racing.
The imagery, symbolism, and attributes were an exact fit
with the brand concept we wanted for Mach3 Turbo Cham-
pion. It became not only the most successful product extension
ever introduced at Gillette, it also stopped Quattro dead in its
tracks. A year after its introduction, Quattro’s share in the
United States was 4 percent. Mach3’s share stood at 34 per-
cent. And when I met the chairman of Schick’s parent company
at a business function, he said that he couldn’t believe we did
all that damage with “that little red razor.” So much for the va-
lidity of supposedly fact-based old truths.
By doing what matters and using the quick-screen approach,
we made decisions and set directions for Gillette that might
have taken many months, if not a year, had we moved
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Doing What Matters
visit one of these online retailers:
Also available as an Audiobook
Read by L. J. Ganser
www.ThreeRiversPress.com