Reading experience:
James. Kilts called the world's most amazing CEO, he served three giant multinational consumer goods companies: Kraft, Nabisco, Gillette. In the three companies on the brink of danger, he is Threatened mandate, succeeded in climbing on top of them from the bottom.
30 years in his career, Kilts designed a rescue it is a meticulous and step by step process in place. He did not dream of the grand vision of Gillette, but the evening late into the night to consider selling the battery should be used 6 or 8 packages; he did not build all the staff speak about how to change Gillette the world, but let it slide, and the level of cost competitors. This is not fascinating, but he grabbed the key, it is indeed worked.
Kilts of Gillette before taking office: zero growth, 15 consecutive profitable quarters did not expect a sharp decline in market share, the stock fell in the two years by 62%, the market value has shrunk nearly 40 billion U.S. dollars.
Kilts of Gillette after he took office: to achieve 13 consecutive quarters growth in sales compound annual growth rate of 9%, a record high market share, the share price almost doubled, to create 260 billion dollars in shareholder value. In his tenure, Kilts of Gillette and Procter & Gamble contributed to the success of merger.
Kilts personally by the author of the book, tell you a true CEO in the face of numerous and complex management problems, whether the thinking mind, how to seize the key. This book has a strong practice style of the body not only to demonstrate how application of management principles, but also in leadership, strategy, human resources, performance, marketing, inventory, public relations and other management fields have unique perspectives. the core of the book emphasizes a number of key enterprises should seize and implement in daily, so as to maintain the vitality and growth. can be said that this br> all other than to sell shaving business, focusing on Gillette's most powerful and most profitable franchise
text / James. Kilts (James Kilts, Gillette CEO)
John. Man Freddie (John Manfredi)
Robert. Robert (Robert Lorber)
to an endangered enterprise pulled from the mud on the fast track of growth is not an easy thing. faced with a deluge of information and intricate program, how to clarify the key issues? in endless analysis and the status of paralysis before, when it should take action? saw the complacency has become a habit, how to promote the plight of the change? time when everyone is a model, how to break the ;, seize the key to the 20%; emphasis on action and implementation; let enthusiasm shine into every corner of the organization and operations of every minute; import performance culture, the introduction of good catfish action, activation of stagnant water like a team; concern overall brand value
2001 years, I became the new CEO of Gillette, Gillette became the first foreign company 70 years at the helm. At this point, Gillette is not just out of control, and is caught up in the the doom loop m zero growth for 15 consecutive profitable quarters did not expect a sharp decline in market share, stock prices fell in two years by 62%, value shrank by nearly 400 billion dollars. My mission is to reverse the situation, but left me time is not abundant. I will take over leadership of a revolution as a starting point. When the media broke the key
I became CEO of Gillette's news, a number of well-meaning professionals, including consultants, bankers, sales incentive compensation specialists and experts, have give me solutions or suggestions, all of them Gillette said that if I want to be successful, they should put their programs or proposed in the first place. Here is the Gillette people care about some of the recommendations, many of which will lead to companies having a big sale:
peel ailing Duracell battery business. This was worth 20 billion dollar business, is 4 years ago, Gillette has spent about 80 billion acquisition of the past, and post-acquisition performance has been very bad. Duracell has not then the performance of the field of consumer goods brands in the most eye-catching, but become a thing hopeless. Its market share fell by about 15%; in the United States, and its alkaline battery market share dropped from 46% to 40%. In addition, the competition has become more and more. So the face of it, to sell Duracell battery business in order to avoid greater losses, which seems to be a very good proposal.
reserved Duracell batteries business, but to greatly reduce product prices. In other words, we should acknowledge that spend so much money to acquire Duracell is a huge mistake. to recognize the battery is a common commodity, but not a cutting-edge stuff. to press Duracell to recover our investment, rather than trying to revival of the business. because in the same imaginary enemy or threat of war has never been a good choice, so this proposal seems reasonable.
stripping Braun electric shavers and household appliances business. Braun brand acquired in 1967 to Gillette's. Unfortunately, very long time, Braun's performance has been disappointing than the Duracell. Braun, the last annual budget is already very distant past , the current senior managers do not even remember which one year. There is no doubt, Braun unstable performance and a large investment is a heavy burden for Gillette.
stripping personal care business. include Rui particularly good, required supplies. these products, most of the market are in decline, profits are declining, operating margins are far inferior to its competitors.
retaining only high-margin razor and blades business, sell all other assets. Let Gillette only focus on one area. sales will be lower, but the margin is very high, this will make our stock price straight up.
admitted Gillette has become the past, and then work out a new development strategy. into the analysis Teachers are called , and strive to have a best how do you know what is the real key? In my career, especially when I need a lot of conflicting proposals through the formation of heavy fog, I always through the key issues, eliminate most or even all of the other recommendations in order to find the right direction. We take a look at this Overlord To peel Duracell, it must be someone willing to buy it. Therefore, Duracell to make potential buyers feel worthy acquisition. However, such a buyer does not exist. battery field has become fanatical, and competition intense, and none of the companies can afford Duracell willing to drip the Tang Hunshui. even if they are willing, Gillette's earnings also far higher than any potential buyer of the price-earnings ratio (PE ratio means the stock price and earnings per share was The ratio of net income). Thus, relative to any other business, Gillette Duracell is more valuable. using the which does not need to consider that option a go.
press Duracell second option is to significantly reduce the price of Duracell products, recognizing that they are no difference of the general merchandise, and from the meager profit squeeze. In the consumer It seems, Duracell batteries and other batteries in OEM safety and durability, and many other aspects have a significant difference. In addition, Duracell alkaline batteries and general performance differences between zinc battery is great. So, just because Duracell struggled in the last three years, we'd give up this brand? to know that in the past two decades, Duracell has accumulated a tremendous brand equity, has a near-perfect high growth and high profitability track record. In this way, rapid screening once again we quickly found the right answer, rather than spinning in the details of the mire.
rapid screening tells us, Duracell is the leader in alkaline batteries are, and This means that should Duracell other non-leader does not follow the rules when and how to learn how to set the rules when the boss. these two Duracell did not do it. The leader in the field of consumer products have increased marketing investment, to promote growth and increase brand awareness and consumer preferences. but the reality is substantially reduced Duracell their advertising investment.
an industry leader must prove they will not let competitors steal win their market share. Duracell Quedui small competitors ignore this behavior, allowing them to become more reckless, insatiable. the industry leader must be avoided for short-term results of crazy, out of control of the promotion, which is caught Duracell frequent large-scale promotions, unable to extricate themselves.
conclusions of these observations do not require in-depth, time-consuming analysis. They are based on facts, it can verify. you need to know where to focus on.
for consumer products, in addition to sales and operating revenues, you should first look at the market share. market share is growing or declining? advertising spending to sales ratio is higher or lower? marketing and channels of expenditure upward trend in sales is the ratio of the signal of trouble. industry is different, the key measure will be different. However, this standard has always existed, they let you on the whole industry is a quick understanding of the way forward for you to open .
sell all sell the business apart from shaving, Gillette to focus on the most powerful and most profitable franchise. on the scale of the total assets, Gillette is a medium-sized consumer goods company. Gillette annual sales of 100 billion U.S. dollars, while Unilever and Nestle are 48 billion and 700 billion. if only to retain the blade and razor business, then sales of Gillette will be reduced to 40 billion U.S. dollars. as the first Gillette customers, Wal-Mart's annual sales is 3000 billion; become so We do not like to hang out at the door, 80% off the choice, which means that the remaining 20% is the key. In fact, it seems difficult to start with numerous options, and now has been reduced to a manageable level.
grasp the key and use the shortcut through the screening We soon made the decision to Gillette, set the direction. If we honestly, the trouble coming to all the recommendations one by one, then the time spent if not a year, but also good for several months. not all of our decisions are correct, we made some amendments to the middle. But our major decisions are successful. We believe there will be strong growth Duracell, the results after three years, sales of Duracell Meng growth, profit growth has tripled its market share has increased dramatically. We value the personal care business, results of this new business unit to profit from the industry's last name first elevated to the head. We insist on keeping the Braun business, the It is from a financial black hole into a powerful innovation machine, not only promoted the growth of its own business, but also to promote oral care as well as our blade and razor business growth.
first right choice for the later growth pointed out the direction, however, no reason this process does not achieve. our passion, our actions, our team and I lead the process, all in the interpretation of the growth of Gillette.
as an organization does not break the inertia < br> There is often an enterprise award not as inertia. unless there is a strong indication of strength and resolute action to encourage and requirements, or organizations tend not to take action. The question is, how do you know that now is the time for action ?
Let us look at three cases must take action: In order to overcome the endless analysis; to break the inertia; the first to market advantage in order to ensure.
into a dead loop when discussing
First of all, When the evaluation and discussion into a deadlock or infinite loop, we immediately take action on, such as Gillette is the case of inventory reduction.
Gillette only five core product areas and a lot of strong global brand, but our stock has more than 20,000, and is growing every year. Unfortunately, the actual number of the same stocks, compared with the related problems and even grow faster. more inventory means higher inventory also means that tracking and identification system required for each product and related pricing data will be more complicated. Moreover, with the increasing number of stocks, on concerns tend to decrease. an employee, when He knew that stock in the next few months will be to increase 100, he was also necessary to take the time to consider the stock to do anything about a?
When I was at a meeting of the executives When asked about the inventory problems, their response was a long silence. all you look at me, I look at you. Finally, Gillette has been done in twenty years of global distribution head Michael. test Higgs openings . Mike explained that the former CEO has requested an inventory of the problems of the management team, and they in the past 18 months is to do it. Mike said, he led the inventory reduction committee, whose members are more than a dozen The most senior management position. They held numerous meetings to discuss the reduction of inventory standards, also developed a plan of action to implement cuts. But when they were about to take action, the organization is always someone out against.
For example, if you cancel the quarter of the budget. Mike said, in that case, the Commission had to give way.
detailed description of listening to Mike, I asked him in the past 18 months, how much stock they actually eliminated. I know that number must to be low, but I definitely did not think it would be zero. I rarely lose my cool, but this time I almost flipped out. I told them: can be implemented within the next three months, 50% of the inventory reduction, and give me the results this weekend, or to the I am here to do it for you. completed. in 9 months, Gillette's stock fell from more than 20,000 pieces to 7000 pieces, to reduce by two thirds. in the next 5 years, Mike. test Higgs promoted several times and eventually was promoted to Gillette, president of global technology and manufacturing.
depth when the lack of action when the bone marrow
Secondly, when the lack of action is becoming a permanent and corrosive situation, we should also take immediate action. This seems to be self-evident. But those who established the status quo are often reluctant to take the necessary action to change the status quo.
Nabisco year there are many problems: excessive capital expenditure, general and administrative costs out of control, reducing marketing investment , new product development is almost depleted, the market share fall. But the most pressing problem is improper for two years due to reorganization of the sales team in deep trouble. Nabisco sales and distribution system used to be its independence in the field of cookies and biscuits some competitive advantage, but now it has become a years of record profit growth. in order to pay KKR acquisition transactions in the huge debt owed, 40% of Nabisco to maintain earnings growth. In this process, Nabisco themselves into a vicious cycle.
When trying to keep the exaggerated Nabisco earnings growth, the company's management efforts to find areas where costs can be drastically reduced. Unfortunately, the sales department became their primary goal. In the two years prior to my arrival, Nabisco fitted with a bullet, carefully pointing out and pointing, but it has shot hit his foot: restructuring the sales force.
in the food industry, Nabisco's sales and distribution system was the envy of colleagues. with Kraft and other food manufacturers most different Nabisco uses a direct store delivery system. In addition to Coca-Cola and Pepsi, and other food manufacturers are using warehouse or wholesaler system. products first from food manufacturers shipped to the customer's storage facility, temporary storage, in combination with other products, after packaging and then shipped by the customer to the retail outlets. in the shop, products are often first brought into the backyard of the warehouse, until the clerk shelves.
in Nabisco, cookies and crackers shipped directly from the factory to the customer's shop shelves by the Nabisco employees, and delay period no intermediate links. the sale of Nabisco staff where the customer has a unique position. Other business sales representative or even not allowed to enter the retail outlets. Nabisco sales staff free access to shop and stay there all day. where they shop and the shopping preferences of consumers with accurate understanding. Nabisco sales force thousands of employees, they have years of experience and extensive product knowledge, and almost every supermarket and domestic managers have maintained a strong personal relationship. most of the enterprises in the introduction of new products When it all for the retail distribution plan developed over several months, while Nabisco is able to be completed in two weeks 90% of retail distribution. Nabisco marketers confidently know when to start a new product release listing of ads to ensure that consumers will not go to shops to buy outsmarted.
direct store delivery has many advantages, but the high cost of this system: distribution team formation, management and maintenance cost a lot of money; the product shelves spend a lot of time; as the system's core knowledge and relationships, the old salary sales staff qualifications is very high. To cut costs, Nabisco reduced the number of delivery trucks, cutting delivery times, fired a long-term sales. instead of a group of newcomers who are often just graduated high school or college students. Their starting salary is very low, so that the staff turnover rate of sales reached the level of fast-food restaurants. customers complain again and again, their long-term partner and friend was laid off Nabisco, and their shop has a huge backlog of consumers do not like to buy the products, and sell a good product was often out of stock.
When I was chief Nabisco executives, the sales force through the restructuring had been running for about two years. During that time, stagnant sales, market share down all the time. customers are becoming more and more angry. a lot of sales staff to be laid off competition opponents where they are further erosion of our business.
Worse, when the Nabisco Biscuit Company's management is convinced that with some minor repairs, the situation will be better. perhaps, slightly tacky salary increase The turnover rate for employees will be able to come down. Perhaps, a few managers will be able to send more new sales representatives on a more stringent regulation. perhaps, reduce new product can reduce the workload. And so on, constantly chipping away . In fact, management's position and attitude is tantamount to omission. they are too dependent on restructuring and savings, that they really believe that maintaining the status quo is the best choice, and ultimately everything will be back to normal yourself.
I became satisfied that the Bei Sike's CEO, I did not like them illusions. the original management must go. I formed a new team, by Rick. Lenny responsible. I worked with Rick in the Kraft for many years, Rick has a wealth of sales and general management experience, previously responsible for the company's North American operations to send Sibo Rui. Rick immediately started on a major reform of the sales department. We must scrap the previous re-start from scratch. < br> Our new plan requires such a system: it can recover the most valuable part of the old system, combined with some streamlining measures for restructuring system; the most important is that it can reproduce the unique old sales team morale and prestige. The Board reluctantly approved the plan of our new.
Creek. He ought to proceed expeditiously to resolve this problem, implemented a massive restructuring to restore the sales representative and one to one contact between the shops. Although up to Nabisco year of change for 70% of the sales staff for new jobs, and let the 5000's sales force to attract more than 2 000 new, but the effect was immediate. until the sales began in the fall growth. Within a year, Nabisco's sales force to restore its former glory, once again become food industry one of the most powerful sales team.
when the velocity is related to the lifeblood of action should be higher than when the
all other considerations of the third case, the time is crucial in terms of speed. sometimes, we should be meticulous, be careful to follow each step of business process. All of the tests can not be left out, all the plans should be carefully developed and reviewed all the possibilities before taking action should be taken into account. when the action comes to huge capital expenditures even more so. For example, the introduction of a new manufacturing facility needs new products or equipment if the product fails, then it is likely that all of the investment might be for naught.
However, if the speed is the key market factors will affect the likelihood of product success, then some planning and processes may to be sacrificed. I ran into this situation Kraft, when we are committed to the field of frozen pizza, an important new product.
responsible for Kraft's North American in my business, we acquired a Wisconsin regional enterprises m Tombstone pizza company. Within a year, we Tombstone brand extends to the country, we reached the frozen pizza business for about $ 440,000,000, more than the entire frozen pizza market (1.6 billion dollars) in one quarter.
However, our goal is to double sales in 5 years, so we know we have a difficult task to accomplish. At that time, pizza marketing team is headed by Betsy Young . Holden. Betsy recognize that, in order to achieve our goals, the best way is to expand the competitive pizza business frame of reference. frozen pizza business less than 20 billion U.S. dollars, but the takeout and delivery pizza business was close to $ 15,000,000,000.
Betsy recalled: pizza. Fortunately, we can use the new technology deliver high-quality frozen dough pizza. we have introduced a spontaneous bread, consumers can buy their own home baked, and baked with fresh bread taste the same. If we can locate to replace this pizza delivery pizza, then returns will be very great. So try to use its Tombstone brand, it is better to create a new brand. consumers like Tombstone, but they see it as a Snow > However, the approval of the enormous amount of capital expenditure usually go through a series of inspection and testing, and let the season to catch up pizza consumption, it must be achieved in the commercialization of 6 months. However, additional test marketing will require more than 3 months time. If So in the meantime, our competitors probably get the same fresh bread technology.
for me, decision-making is very simple. We have to take risks, as soon as possible to to the market. We do not drastic, do not stay retreat. We have plans B, if the put, to an increase of 30% or more, we achieved a year ahead of revenue targets of over 10 billion dollars.
lead to an innovative product to market, does not necessarily guarantee success, but it has always been an amazing advantage. There are many books of the first public listing of the importance of speed. While some of the books are exaggerated, but they all stressed to take action to avoid analysis paralysis, and the importance of other enterprises syndrome.
passion spilled into every corner of every commercial
people want a warm and subordinates and employees, however, instill passion for leadership responsibilities to employees are often neglected. The real leaders must take instil enthusiasm responsibilities. In explaining why enterprises must develop and change, you have passion and let everyone see you. You have to make members understand your goals and make them believe you have the success of the various methods and means necessary . In a large organization, enthusiasm also means that the inspection staff in batches, and they maintain extensive and regular contacts.
if compared with competitors, a company's cost structure is too high, then want to win in the competition almost impossible. If you eliminate unnecessary costs, and use the money to strengthen the development of new products, increase marketing efforts, and improving the capacity, then you win is a foregone conclusion. However, the elimination of the total cost is the means through attrition and layoffs to reduce the head, not a single organization is willing to abide by a long-term cost-cutting creed. Therefore, in order to be successful, cost reduction must become a way of life.
for me, cost reduction throughout the organization excited passion, and they really believe that the importance of cost reduction, this is my first priority; of course, the difficulty can imagine. This is not a one-shot deal, but every day to do with my two predecessors, was compared. a result, I come into contact with the total number of members is three times the two former. Among these contacts, more than half the cost is to eliminate unnecessary central theme, and almost Every speech, reports, round tables, weekly meetings, letters to shareholders, Chairman and exchange of video or audio mention the cost. In order to achieve the desired result, all the carriers and the media have to spend. I want to focus on how the organization from deny the extra cost, to the end willing to I asked each direct subordinate must do three things:
First, each sector of self-evaluation.
Second, departments and other officers to make the same criteria to evaluate the department's performance.
Third, to the best competitor as a reference to evaluate their own department. If they feel hard done by this part of their practice, they can ask in this regard an experienced external consultants.
When the ZOG start in the senior management team, we have the start of this initiative throughout the company to understand. In the March 28, 2001, that is, just after my arrival Gillette month, I gave each of the company a person sent a notice telling them during the next five years, ZOG will be their everyday language and way of life. To get everyone to accept layoffs and cost cutting efforts, I also have to make them understand the two Points:
first, everyone will be affected. Unless otherwise indicated, without exception. Gillette does have one exception, that is, domestic sales department. They have just gone through major restructuring and layoffs, are we The first line of customer contact industry.
Second, everyone is equal. no department or officers will be given preferential treatment. everyone must actively committed to , our three-pronged approach has been the cost and capacity assessment results, some figures for all of us are surprised. Compared with competitors, Gillette's every department at a cost disadvantage. in the financial, human resources and information technology and other areas of the largest and most important, this cost gap is largest.
all managers deny the high cost of their departments, but surprisingly, their overall evaluation of their own departments and enterprises also different from other people. In the end, even though we asked the consultant is mainly to provide data and verify the validity of comparison, but they provided a general assessment, clear that we have a serious and common problems to solve.
With these data and materials, to accept the initial stage of the process to begin. My task is to call the company's 200 top leaders to meet, evaluate results, impacts, and a detailed action plan, and then to the company from top to bottom and around the world to lobby. in the next 6 months, I and Gillette in the United States, Germany, Britain and Singapore, each of the major business meetings were held. In addition, I also separately with the operations, finance, human resources, information technology and procurement The key functions such talks. I also use a global distribution of video, introduced the implementation of the method and ZOG early success, in order to inspire our confidence. ZOG implementation in the first months of Gillette , I like a presidential candidate to win the nomination of party politicians everywhere, and I have been in the whole organization into a high degree of tension.
cafeteria at lunch Gillette, I will heard through the staff side, said: activities. In Gillette, ZOG is everywhere. Obviously, we have understood the ZOG is everyone's responsibility, several senior administrative assistant and even formed a team to explore that they can do something for the implementation of ZOG.
ZOG is worked out? of course. Generally speaking, the end of five years, we have removed about 8 billion dollars in unnecessary costs, making the general and administrative expenses a percentage of sales decreased from 31% to 23%.
Although Gillette into a performance culture
lack of effective leadership and strict discipline, ...
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