Years ago I started learning the importance of “doing what matters” when my mother called me to the phone saying:“It’s the foreman at the plant. There are no more cartons. They’re shutting down the line. I think you’re going to get fired.” At the time, I held an entry-level position at the General Foods’ Kool-Aid plant in Chicago to put myself through the graduate business school at the University of Chicago.I was responsible for ordering supplies and simply forgot to order cartons for one of the beverage lines.I called the salesman from the box company at home that evening and pleaded with him for cartons. That same night, I helped load a truck, brought the cartons to the plant and, fortunately, kept my job. That simple lesson about doing what matters – what you must do to be successful in business, and, as importantly, the things you should ignore - has been central for me as I moved from plant assistant eventually to CEO.
What Happens In The Real World?
Whether ordering cartons for the production line or managing big businesses, as I have for the past 20 years, the simplicity of the Doing What Matters approach works. That was certainly the case when, as the CEO of Kraft Foods, I was in charge of a $25 billion plus company that had operations all around the world.The same was true at Nabisco whose brands were global icons -- Oreo, Ritz, Chips Ahoy, Planters Nuts, LifeSavers Confections and many others.And most recently (2001 through 2005), the Doing What Matters approach was put to the test as I headed one of the best-known and most profitable consumer product companies in the world, The Gillette Company. But while I have a lot of business experience, the idea for Doing What Matters didn’t start to gel until I spent the time between leaving Kraft and joining Nabisco as a visiting lecturer and executive in residence at my alma mater, the University of Chicago’s Graduate School of Business.Working with the students was a thrill, both in the classroom and in informal get-togethers. They are among the best and the brightest, and they absorb vast amounts of management theory, principles and applications.However, a recurring question throughout the year was: “What happens when school is out and I enter the real world of business?With so many options and so much data available to me, how do I, as a manager, decide and do what really matters?” That’s when I started to think that while knowing a lot is great, knowing how to use that knowledge is what matters in business.Maybe I could help translate knowledge into the basis for useful action.Perhaps my work experience could link the school learning – the principles and theories about business – with the old-fashioned, tried and true, practical applications of what really matters in business. 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 nose-dives 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.
Reconciling ‘Revolutionary’ with ‘Old School’
For example,the seemingly contradictory subtitle for this book – the “revolutionary” “old school approach” to business success – came from those experiences.Old school means the fundamentals, and the importance of always having them front and center. Are the cartons ordered? If not, then the line shuts down. Or, when you inherit a sales force that’s gone through a $50 million reorganization, but is still on a trajectory to crash and burn, as was the case at Nabisco.You must take radical action quickly -- before the moment of impact.So the fundamentals alone aren’t enough, unless they’re applied to the warp speed environment you operate in today. You not only have to sort out what you should pay attention to and what you should ignore, you must do so with revolutionary speed and decisiveness. Yet, even with disaster staring them in the face, people from the lowest to highest levels in many organizations often prefer to ‘re-arrange the deck chairs.’They’ll give lip service to stepping up performance, but in practice go about business-as-usual. That was certainly the case at Gillette. Its position as the number-one maker of blades and razors was virtually unchallenged in all regions of the world.Its manufacturing capabilities were unparalleled, and its engineering, research and new product development were unmatched within all consumer products. Not only had Gillette invented the safety razor and double-edged blade, it had also commercialized every major advance in wet shaving for over 100 years. And in recent years the Gillette development machine seemed to be working better than ever.The Mach3 shaving system that was introduced 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.
Billions of Dollars of Sales, But No Growth
So what was the problem?
Start with net sales, net profit and net earnings stalled at zero growth, with Wall Street and the Gillette board of directors convinced that the worst was yet to come.Yet in 2001, as the new Gillette CEO, the first outsider to run the company in more than 70 years, I was told by Gillette’s vice president of human resources that 65 percent of the managers had received performance ratings of exceeds expectations or outstanding.And Gillette was not just in a tailspin.It was caught deep in a circle of doom. My job was to turn things around, and do it without having the luxury of time. Yes, we had to preserve what was important – world-class brands of the highest quality, great traditions of unmatched innovation and technology, integrity and respect for people. But I also was there to lead the revolution by using the past as a starting point.Old-school approaches would be built upon, adapted and, at times, totally transformed and overturned so Gillette would return to its glory days and its managers would be among the most prized in business. Let’s take the performance measurement system as an example of what had to be done.Like many companies, Gillette used the five grade system of Does Not Meet Expectations, Needs Improvement, Meets Expectations, Exceeds Expectations and Outstanding.Perversely, the worse a company does, the more likely it is that more people will be graded higher.Managers don’t want to de-motivate people in bad times so they move them up the scale. That’s why two-thirds of Gillette’s managers were at the top of the performance scale despite the company’s ongoing decline in performance. Over time, the system has little meaning and actually hurts performance. Doing What Matters uses a numeric system that goes from 1-to-100 percent. Yes, it’s back-to-school. You can get a score of 53% or 99% … and everything in between. Every single percentage point becomes meaningful, not just because of personal pride, but also because scores are shared with all peers! The Doing What Matters system grabs people at an emotional level, let’s them know exactly where they stand, and gives them a desire to exceland change – now! The revolutionary old-school approach was never more needed than with innovation and product development, even though Gillette excelled at big bang innovation.The successes included the twin-bladed Atra system , which was replaced in 1989 by the first independently spring-mounted, twin-bladed Sensor for Men, followed a year later by Sensor for Women. Less than a decade later came Mach3, the three-bladed cartridge with a two-to-one performance preference over Sensor.
Cracking the Code for New Product Development
This type of game-changing product development – big bang innovation – is the Holy Grail for all consumer product companies. It provides a competitive advantage that almost always leads to accelerated growth and profitability. Gillette seemed to have cracked the code. On the surface, Gillette’s well-established approach to making the highest performance products and offering them globally at a premium price to shavers whose brand loyalty was unwavering seemed to be working flawlessly.Unfortunately, the opposite was true. Big bang at Gillette was the province of a small priesthood of big brains.Revolutionary change required everyone to be concerned and involved with innovation.But how do you create revolutionary change, yet not make the mistake of throwing the baby out with the bathwater?Part of the answer is the three-tiered process of Total Innovation (TI). You don’t eliminate big bang innovation, which is essential. You add two more layers - continuous improvement and incremental innovation - and make a pyramid.And you expand the base of innovators from a small group of researchers, developers and engineers to everyone in the company from top-to-bottom, regardless of rank, function, and expertise – or lack of it.Everyone participates in Total Innovation. Cost-cutting provides another example of how Doing What Matters is both revolutionary and old-school.Cost-cutting is common place, but it’s usually employed during a time of crisis, as an effort of last resort.But the globalization of business means you are competing with low-cost providers from every nook and cranny of the world.The Doing What Matters approach calls for ZOG – Zero Overhead Growth.It makes eliminating unnecessary costs a way of life – a strategic imperative – not something that’s just short-term, first aid.
New Mindset Simplifies Problems
Let’s look at some other transformations of the old-school approach: oBreaking down barriers and getting people from different units and divisions to communicate with each other is usually an elusive quest. The Doing What Matters’ Quarterly Offsites have people lining up to share plans and exchange information. oMany hard working, well-intentioned managers slide into cycles of dismal underperformance.The Doing What Matters approach can help people and companies avoid entry into – or facilitate quick escape from -- The Circle of Doom. oFormulas abound for choosing good people.The Doing What Matters’ practices not only gave my companies great bench-strength, they also groomed CEOs and senior leaders for several other Fortune companies. oMany experts focus on the importance of your first 100 days in a new position.In Doing What Matters, we’ll tell you how you can use day one – the first day on the job – to set the stage for your future success. oStrategic plans take great effort and resources to prepare, but often wind up gathering dust.The double “A” version in Doing What Matters makes your strategic plan an essential, everyday guide to business. Doing What Matters is not just techniques, but an entire mindset for taking complicated problems and making them simple. Using illustrations and anecdotes from my experience with Gillette, Nabisco and Kraft, Doing What Matters sets the foundation for moving forward in an uncertain world where maintaining the status quo is a recipe for failure. It reignites ways of becoming excited about the fundamentals so you can beat the competition and create value for shareholders by getting people to change and advance together.
The Right Team for the Task
Now let me tell you a little about my co-authors – John Manfredi and Bob Lorber.They’re not your typical co-authors.In other words, they’re not people whom I’ve just teamed with to write this book.They have been part of the process that led to the thinking in this book – John as one of my executive staff members for more than eight years and Bob as an outside consultant and advisor. My relationship with John actually goes back more than 30 years when I was in product management and he was in product publicity at the General Foods Corporation.While I was developing and introducing Country Time Lemonade and Crystal Light drink mixes, John and his team were working on the public relations programs that helped launch those great brands that are alive and vibrant today.And in recent years, he has worked with me day-in and day-out as we have developed and implemented the plans that turned around Nabisco and then Gillette.His skillful handling of the communications and investor relations functions at both companies was an important factor in our successes. Bob Lorber has worked with me and members of my executive teams from my days at Kraft and again at Gillette.In addition to being a great teacher and coach, Bob and Ken Blanchard wrote the best-selling book Putting the OneMinute Manager To Work.Bob has a simple, straightforward approach that helps managers improve their performance. So we are the authors.It’s been challenging to distill the lessons of 30 years of business experience into something that will help people in all business sectors and at all levels of their organizations.I know from talking with a number of peers that this book has things that will help CEOs.And as importantly, it contains those easy to grasp, old-fashioned, tried and true materials that can be used by young and middle managers on their way up.
How It All Comes Together
Before we start, let me discuss how we’ve organized the book.It has five sections. The first section deals with the Fundamental 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 provides 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.
What Matters for Leaders
Personal attributes gets you right into what matters for leaders.Based on the knowledge gained from years of hiring, training, developing, promoting and, of course, sometimes terminating people, I identify four attributes that are predictive of successful leaders: Intellectual Integrity Emotional Engagement - Enthusiasm Action Orientation Solid Understanding We devote a chapter to each of these attributes, explaining how they influence the performance, culture and ultimate success of business activities.
Avoiding A Plunge into the Death Spiral
The second section deals with the process and procedures that make all the difference in leading and managing an organization.Selecting the right team and then gaining their understanding of the leadership process that guides the company is critical.Not all people in business have to be students of business.But you must have a good grasp of how to run an organization, or it’s just not possible to lead one.To highlight the importance of all this, we’ll see how what we call entering The Circle of Doom can plunge a company into a death spiral.
Point Counterpoint – Long-Term vs. Immediate Needs
The third section shifts to one of the most difficult areas in business, especially in today’s environment.It’s the vision and long-term planning that are essential for all organizations.How do you balance the need for short-term performance yet at the same time define a vision and long-term strategy that lets everybody know where you’re headed?It’s something that often creates a lot of uncertainty and tension within organizations.And it’s absolutely imperative to get it right.
Face-to-Face with the Media & Politicians
The fourth and final section covers two areas:one tends to be the least familiar and, in many ways, scariest for people in business -- politicians and the media; the other looks at a number of the lessons that I’ve learned throughout my career.Though different, these areas are bound together by their underlying theme, which is the importance of doing the right things. Now let’s get started with Doing What Matters. Jim Kilts