Implementation Program: 2001-2003



  • Jim Kilts was appointed Chief Executive of Gillette following over four years of flat revenues and a 40% decrease in shareholder value
  • Kilts began implementing the strategic, operating and organizational improve program that had previously led to the successful turnaround of Nabisco under his leadership


  • Refocused the corporation on long-term economic profit growth and stopped quarterly earnings management practices
  • Conducted an in-depth strategic review of each business unit, with particular focus on the Blade and Razor business, which comprised over 80% of the Gillette’s total shareholder value
  • Conducted a comprehensive assessment of organizational practices and capabilities
  • Over the next 24 months, Kilts and his direct reports:
    • Significantly increased the new product pipeline, launching several new global products
    • Dramatically increased advertising investment
    • Refocused its marketing strategy with increased focus on sample and trial
    • Focused on strengthening the mutual economics of its core customer relationships
    • Dramatically reduced costs and improved asset turns through product and facility rationalization

Results: (subsequent 5 year performance)

  • Net sales increased from $8.1 billion in 2001 to $11.4 billion in 2005, a 9 percent compounded annual growth rate
  • Earnings before interest, taxes, depreciation, and amortization increased from $2.2 billion to $3.7 billion
  • Operating margins increased from 21 percent in 2001 to 26 percent in 2005, reflecting profitable top-line growth and better cost management, somewhat offset by higher marketing spending.
  • Market shares increased in businesses representing 90 percent of 2005 sales compared to only 30 percent of sales in 2001
  • Economic profit grew from $700 million to over $1.6 billion
  • Gillette’s stock price rose from its low of $25.62 in April 2001 to $53.94 in January 2005 creating $26 billion of incremental shareholder value