Kilts, James M. 1948–
James M. Kilts
Chairman and chief executive officer, Gillette Company
Education: Knox College, BA, 1970; University of Chicago, MBA, 1974.
Family: Married Sandra.
Career: General Foods Corporation, 1970–1984, various positions; Oscar Mayer Foods, 1984–1985, vice president and division manager, consumer products; Kraft Limited Canada, 1985–1987, president; Kraft General Foods, 1987–1989, senior vice president, strategy and development; Kraft USA and Oscar Mayer Foods, 1989–1994, president; Philip Morris Companies Food Operations, 1994–1997, executive vice president; Nabisco Holding Corporation, 1998–2000, president and chief executive officer; Gillette Company, 2001–, chairman and chief executive officer.
Awards: Distinguished Corporate Alumnus, University of Chicago Graduate School of Business, 2001.
Address: The Gillette Company, Prudential Tower Building, Boston, Massachusetts 02199; http://www.gillette.com.
■ James Kilts earned a reputation as one of the top executives in the consumer products sector by leading turnarounds at Nabisco Holding Corporation and the Gillette Company. He held a variety of positions with General Foods during the 1970s and 1980s before ascending to a leadership position as president of Kraft Limited Canada in 1985. After overseeing the integration of Kraft and General Foods as executive vice president with the Philip Morris Companies between 1994 and 1997, he was elected president of Nabisco. Four years later he accepted the position of chairman and chief executive officer at Gillette. Kilts was known for a decisive management style and a keen focus on essentials.
EARLY EXPERIENCE IN THE FOOD INDUSTRY
Kilts gained his first exposure to the food industry in high school, when he began working during the summers for General Foods in his hometown of Chicago. After graduating from high school, Kilts enrolled at Knox College in nearby Galesburg, Illinois. He received a BA in history from the school in 1970. He earned a position with General Foods after receiving his undergraduate degree. Kilts later enrolled at the University of Chicago Graduate School of Business, where he completed a master of business administration degree in marketing in 1974.
Kilts remained with General Foods after he received his graduate degree. He held a series of lower-level executive positions for the next 10 years. He was promoted in 1984 to the position of vice president and division manager of consumer products for Oscar Mayer Foods, a division of General Foods. During the following year he was named president of Kraft Limited Canada, a position that he held from 1985 through 1987. He returned to Kraft General Foods in 1987, serving as senior vice president for strategy and development. Kilts was appointed president of Kraft USA and Oscar Mayer in 1989.
CONTINUING ASCENT AT PHILIP MORRIS
Kilts's standing in the corporate world grew during the 1990s. He served as president of Kraft USA and Oscar Mayer Foods from 1989 through 1994. In 1994 he was appointed senior vice president for food operations at the Philip Morris Companies, which had acquired Kraft and General Foods during the 1980s. Kilts was responsible for running the $27 billion divisions of Philip Morris, and he made his mark by successfully integrating these divisions.
Kilts earned a reputation for efficiency and cost cutting. He required managers to justify virtually every expense, which measurably lowered costs within his divisions. Other companies attempted to recruit Kilts, including the Nabisco Holding Corporation. Nabisco had averaged nearly $450 million in capital expenditures during the mid- to late-1990s, yet the company did not experience significant growth during that period.
SUCCESS AT NABISCO
Nabisco hired Kilts as its president and chief executive officer in 1998. Kilts spent little time in his new position before he began making significant changes within the company. He announced in June 1998 that the company would lay off 3,500 employees throughout its work force. Nabisco, known for its cookie and cracker products, had seen many of its products lose market share. After cutting costs, Kilts used the savings to increase Nabisco's advertising by 20 percent per year.
Kilts' strategies worked. He was credited with having revitalized such products as Grey Poupon Dijon mustard, Planters peanuts, and A1 steak sauce. New products were also successfully introduced, such as Cream Savers, an extension of the company's Life Savers candy line. Philip Morris purchased Nabisco in 2000 for $14.9 billion after nearly all Nabisco's major product lines had gained market share under Kilts' leadership.
Analysts marveled at Kilts' "relentless focus" in his management style (Symonds and Forster, January 26, 2001). "He's thinking about business seven days a week," said Douglas R. Conant, president and chief executive officer of Campbell Soup (January 26, 2001). In Kilts's speeches, he identified four major factors he considered critical in turning a business around: integrity, enthusiasm, action, and understanding. He said that companies must make honest assessments of their specific situations. "Most companies get into trouble not because they make a world-class blunder, although that happens sometimes," Kilts said in 2001. "Most often they get into trouble through a succession of well-intentioned, but flawed, decisions that build on each other until it becomes very difficult to unravel the problem." (Chicago Business Online, November 5, 2001).
Effective communication was also a key to Kilts's success. When he took over at Nabisco, he immediately told employees what he expected of them and what they should expect from him. He also noted that the leader of a turnaround must be a "head cheerleader," instilling confidence in those involved (Chicago Business Online, November 5, 2001). Although data studies may be necessary in business, Kilts said that they should not be conducted over a prolonged period of time without executive action.
Kilts became a prized commodity on the basis of his performance at Nabisco. The Gillette Company, which had experienced four years of underproduction, looked outside its own ranks for the first time in nearly 70 years to choose a new leader. The company hired Kilts in 2001 based on his decisive management style. "Jim Kilts has one of the best track records in the entire consumer products sector," said Richard R. Pivirotto, the non-executive chairman of Gillette's board. "His broad-based consumer marketing background and decisive management style make him uniquely qualified to lead The Gillette Company into an era of sustained, profitable growth" (Business Wire, January 22, 2001).
MORE SUCCESS AT GILLETTE
Kilts performed the same type of turnaround at Gillette as he had at Nabisco. He was critical of mistakes made by the company prior to his arrival and was "brutally honest" in discussions with analysts about the company's past performances (New York Times, June 7, 2001). Kilts put into motion plans to increase spending on advertising, to adjust prices on products, to reduce shipments to retailers, and to eliminate poor-selling products.
Sales rose 5 percent during Kilts's first year with the company to $8.45 billion. During the following year, sales rose even further to $9.25 billion. Gillette's stock price increased 20 percent between 2001 and 2004. Based on this success, Kilts solidified his position as one of the top executives in the consumer products sector. Kilts was considered for the top position at the Coca-Cola Company in 2004 but withdrew his name from consideration, as he planned to remain with Gillette.
Kilts contributed heavily to his alma maters, Knox College and the University of Chicago Graduate School of Business. In 1999, when he was still the head of Nabisco, he established the James M. Kilts Center for Marketing at the University of Chicago, which sponsors an array of marketing research projects. He also donated $11 million in 2001 to Knox College to increase the school's endowment. Kilts served on the Knox College board of trustees as well as the Advisory Council for the University of Chicago Graduate School of Business.
sources for further information
Barnes, Julian E., "Gillette's Chief is Critical of the Company's Missteps," New York Times, June 7, 2001.
Gatlin, Greg, "Kilts to Wear Mantle of New Gillette CEO," Boston Herald, January 23, 2001.
"Gillette Elects James M. Kilts Chairman and Chief Executive Officer," Business Wire, January 22, 2001.
McGlothlin, Ryan, "Escaping the Circle of Doom," Chicago Business Online, November 5, 2001, http://www.chibus.com/global_user_elements/printpage.cfm?storyid=139722.
Reidy, Chris, "Gillette Appoints Kilts Chairman," Boston Globe, January 23, 2001.
Symonds, William C., and Julie Forster, "Can James Kilts Put a New Edge on Gillette?" BusinessWeek Online, January 26, 2001, http://www.businessweek.com/bwdaily/dnflash/jan2001/nf20010126_543.htm.
—Matthew C. Cordon