Doing What Matters: How to Get Results That Make a Difference - The Revolutionary Old-School Approach

by Robert Lorber, John F. Manfredi, James M. Kilts, et al.

Book Overview

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,...

• Format: Hardcover
• Language: English
• ISBN: 0307351661
• ISBN13: 9780307351661
• Release Date: September 2007
• Publisher: Crown Business
• Length: 318 Pages
• Weight: 1.50 lbs.
• Dimensions: 1.2" x 6.4" x 9.5"

Customer Reviews

What goes on in a successful CEO's head

Many years ago, Patrick Rivett described his efforts to teach problem solving model building to his students as showing them "what goes on in an analyst's head when he is taken round a soap factory." You can describe Jim Kilts' Doing What Matters as "what goes on in an experienced CEO's head when he takes over a company that needs to turn around." Hardly anyone has better credentials to write a book like this one. Kilts had an exemplary career in packaged goods. He was a successful CEO at Kraft and led turnarounds at Nabisco and Gillette. When he took over at Gillette, the company had missed estimates for years. The stock had tanked, shedding 60 percent of its value. Even so, 65 percent of the executives received "exceeds expectations" evaluations. Every one of them thought their department or division was performing above average. What would you do in a situation like that? This book is about what Jim Kilts did. The subtitle is really better than the title: "How to get results that make a difference--the revolutionary old-school approach." The book is divided into four sections. The first is "Fundamentals, Attitudes, and People Matter." It's worth the price of the book all by itself. Kilts starts, appropriately enough, with advice to focus on fundamentals. Unlike most management writers, though, he tells you what he thinks fundamentals are and how he focused on them when he approached the challenge at Gillette. Throughout this section and the book there are dozens of bits of wisdom. Here are some. "Key metrics will vary, but they always exist." "The time that really matters is the work I do before the clock starts ticking on the first one hundred days." "Most companies get into trouble not because they make world-class blunders, but due to a succession of well-intentioned yet flawed decisions that build on one another." "If a company's cost structure is high, winning is almost impossible." There are also valuable insights into concepts like cost-cutting. In most companies, cost cutting is something you do when you're in trouble, after which it's back to business as usual. For Kilts, Zero Overhead Growth (ZOG) is a way of life. Throughout the other sections of the book, on Leadership, the Future, and doing the Right Thing, Kilts pounds away on certain critical principles. Get the facts. Figure out what matters and concentrate on it. Face the truth. Maintain momentum. Enthusiasm is for every day. Act with discipline. Execute strategy. Control costs. Only performance matters. Do not reward effort, only results. There's wisdom and good advice all the way through this book, but, fortunately for you if you don't read books from cover to cover, most of the really good stuff is front-loaded. The first section is excellent. The second and third are OK. But by the time you're wheeling into the chapter on "The Right Road Map," you'll find yourself getting weary of "strat plans" and "FE" and other klunky jargon. I found myself startin

Benchmark, Set the Right Improvement Targets, Follow Up, Coordinate, and Reward Accordingly

This book could have been titled "Going from Stuck in a No-Win Rut to Profitable Growth." Jim Kilts, a successful veteran of General Foods, Kraft, Nabisco, and Gillette, describes the key principles involved in improving a consumer products business or company from poor performance to good or excellent results. You'll also a lot about being a change leader. Unlike most success cases, this one has enough detail and examples to give you a flavor for what such a turnaround is like. The focus is on Gillette from the time Kilts took over until the company was sold to Procter & Gamble. But there are also extensive examples from the successful turnaround of Nabisco that Kilts led while CEO, plus some earlier examples from Kraft and General Foods days. The essence of his approach is to focus on the key things that lead to significant improvement and be sure those things get done. In this method, there's no magic potion . . . just clear thinking and concentrated leadership based on metrics that make sense. The essence of the approach is to set realistic profit growth goals. Then start achieving those goals by freeing up some money to expand advertising and superior new products by cutting out huge sources of waste such as excess overhead, paying too much for supplies, inefficiencies in operations, low-performing products, and large trade discounts to retail customers. From there, you develop excellence in operations, focus on the best opportunities, and improve your understanding of the innovation choices that remain. By tracking performance compared to competitors, you move from rewarding effort to rewarding performance. This is the same formula that's been working in consumer packaged goods for decades. So don't expect anything new. But I think the thought process is better described here than in other books I've read. The book's main drawbacks are two: 1. There's no description of how to move from improved to superb . . . such as by innovating with new kinds of highly profitable products and services that the company has never developed and marketed before. 2. The material is not structured very well. A lot of material is endlessly repeated. A better editor was needed, or different examples should have been included rather than referring to the same people and examples so many times.

"Vision without execution is hallucination" (Thomas Edison)

As I began to read this book, I was reminded of an observation by Peter Drucker in 1963: "There is surely nothing quite so useless as doing with great efficiency what should not be done at all." That observation should be kept in mind by those who assign work as well as those who are then expected to do it ("to do more and better work in less time and at a lower cost," etc.) With the assistance of John Manfredi and Robert Lorber, James Kilts has written a book in which he shares what he has learned from his business career thus far, especially from his years as CEO of Kraft, Nabisco, and Gillette. The book's title would even more accurately indicate his core business principles if it were "Do Well What Really Matters" or "Do Well What Matters Most" but the subtitle is just fine: "How to Get Results That Make a Difference - The Revolutionary Old School Approach." The inclusion of the word "revolutionary" is intentional and its appropriateness best revealed within Kilts's narrative. In the city where I live, we have a number of outdoor markets at which slices of fresh fruit are offered as samples of the produce available. In that same spirit, I frequently include brief excerpts from a book to help those who red my review to get a "taste." Here is a representative selection of Kilts's insights from his years as a CEO: "You not only have to sort out what you should pay attention to and what you should ignore, you must do so with [begin italics] revolutionary [end italics] speed and decisiveness. Yet, even with disaster staring them in the face, people from the lowest to the highest levels in many organizations often prefer to `rearrange the deck chairs.' They'll give lip service to stepping up performance, but in practice they go about business as usual." (Page 3) "During my tenure at Kraft, we developed something called IMI - Integrated Marketing Intelligence - which gave us state-of-the-art insights into our brands, their categories, and consumer dynamics; how responsive they were to different forms of advertising and promotion; how much spending was optimal; and much more that will be explored later [in this book]. When we spent marketing dollars at Kraft, we were truly [begin italics] investing [end italics] in brand building." (Page 94) "A company must function like a finely tuned engine of a racecar. It must not only have all the right components - injectors, valves, pistons, and the like - but each element must also be connected with all the others, and the timing and movement of all components must be absolutely in synch. Even the slightest miss in timing will result in poor performance." (Page 149) "Many managers fail because they have a punch list of all the individual elements and when they see check marks against them, they assume the heavy lifting is over. Actually, the opposite is true. The heaviest lifting comes when all of the individual pieces are in place and you must make them work together to drive the company toward its obje

A Jump Start on Your MBA!

"Doing What Matters" is no substitute for a Harvard MBA; however, at only $16.50 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 Kilt

There are a few things you MUST do. Everything else you can ignore. This book will teach you how to

If Warren Buffett and Jack Welch both recommend a book, I don't need any additional incentives to buy it. Doing What Matters is a well written book by James M. Kilts, the former CEO of Gillette and prior to that the CEO of Nabisco & Kraft. The book is divided into four sections: Section I Fundamentals, attitudes, and people matter Section II Leadership matters Section III The future matters Section IV Doing the right things matter In the first section he talks about his arrival at Gillette, after having been given the blessing by Warren Buffett, who at that time owned 10% of the Gillette stock. He talks about the tough decisions that had to be made right from the start. Gillette had been missing the earnings estimates for FIFTEEN consecutive quarters and had taken a beating with Wall Street. What should they do with Duracell, which had been bought at a premium just four years ago and had been loosing market share ever since? There were three options on the table and he goes through the process of decision making. He also immediately halted the statements of short term estimates and forecasting to analysts and investors. Kilts warns about the Yo-Yo effect that plagues companies that uncompromisingly set out to be number one in their market. He writes that "Setting the objective of being number one year in and year out virtually assures the opposite." He also covers, on this section, a focus on the fundamentals and on keeping it simple. "Articulate three to five concepts that will drive your performance; the fewer the better, but definitely don't exceed five." He goes on to advice that one should always stick to these fundamentals and be as consistent as possible. He also covers the need to see things as they are, echoing, what Jack Welch calls "Facing Reality". Kilts writes, "It is the ability to hold a mirror to your organization - whether that's just a few people in a small office or thousands of workers in hundreds of global locations - and the willingness to view the reflection with total honesty." He continues with the importance of enthusiasm as something that has to be sustained over time. "Why wouldn't a company want to approach any important external audience with all the excitement of Billy Graham on a crusade?" Good point! The action section is very informative; I specially liked the snake killer metaphor. Section II is the one that deals more with leadership issues. He sees the role of a leader as a facilitator and considers "one of the most important responsibilities of a leader is to create the right environment and then give the employees development opportunities that enable them to realize their full potential." He later discusses strategic planning and one of the common themes of his tenure at Gillette had to be his dogged determination to ZOG (Zero Overhead Growth). Another thing that he immediately corrected after becoming CEO of Gillette was their performance grading. It turned out that, although, the company wa