One K-C Behaviors - 6 LEADERSHIP VALUES AT KIMBERLY-CLARK via Thomas Falk

So social responsibility is something that you also hear the best companies doing. It's one of the ways you win awards as companies get caught doing things right. And we find that the workforce of the future, the next generation, they want to work for companies that are doing things right. They care a lot about the values of the company. So I'm here to tell you that we were involved in those types of things before social responsibility and sustainability was cool. Kimberly-Clark was founded in 1872 on three principles: quality, service, and fair dealing. So they talked about making a quality product, about providing great service to customers, and dealing fairly with suppliers in the communities where our employees lived and worked. Pretty simple stuff. We've always been able to give back where we operated. We've tried to be responsible, good corporate citizens wherever we were around the planet. Even more importantly, we looked at sustainability in a different way. We were cutting down trees in Canada to make newsprint. Well, in Canada, it takes about a hundred years to grow a tree to cutting height. So somewhere back 140 years ago, our four founders said if we cut a tree down, we're going to plant two more, so we'll never run out of trees. Well, fast forward five or six years ago, we spun those forest lands off. We don't operate up there anymore. The operator of that forest land just won an award for sustainable forestry because someone in Kimberly-Clark 100 years ago planted trees to make sure that forest was going to be evergreen and was going to continue to produce. So that's the kind of sustainability that we're talking about: doing the right thing today so that we'll continue to have resources to run the business into the future.

I became CEO in 2002, and in 2003 we started to look at our strategy and our portfolio. We made some decisions to exit some businesses. We were the world leader in fine writing paper, and not many people use that anymore. We're also in the emails, you know, the handwritten note is a beautiful thing now, you'll appreciate that, but in those days it was a big deal to be the world leader in that. We also were the world leader in annual report paper. Well, those are mostly done electronically now. So we made the decision to spin some of those businesses off. So one of the things that I've been working on is trying to understand where the growth is going to come from. And emerging markets for us has been a big part of what I've spent a lot of time on. So if we look today, we serve essentially 1.6 billion people every day out of the 7 billion people that are on the planet. But in the next 10 years, another billion consumers are going to enter the middle class and be able to afford our products in just four key markets: Brazil, Russia, India, and China. So we can almost double the size of the consumer base that we're going to go after in the next 10 years as those markets industrialize. Today we have 43,000 employees. I do not know all of their names. I know a lot of them. I've been around for a long time. And that, for me, is the very best part of the job. Getting to spend time with great people that are trying to win in the marketplace, and they inspire me every time I get a chance to spend some time with them. So we have a bunch of our employees here in the front row. They had to sit in front because they're with me. But just being with them and finding out what they're working on and what they care about is the best part of what I do every day.

So 43,000 employees, yeah. We're almost 19 billion in net sales. We've got the number one or two position in about 80 countries. I get to travel to different countries. I did a speaking engagement to a group somewhat like this in Kazakhstan earlier this year. It was my first trip to Kazakhstan. There's a small university there that we recruit at, and so I went and talked to them about Kimberly-Clark and what we're doing and how to think about business and their careers. And about a quarter of the world's population uses our products every day. That's great news, right? Because three-quarters of the population don't use them yet, so we have a huge opportunity to grow. So you have to constantly be thinking about how do you turn your business into something that can continue to grow. So Kimberly-Clark was founded in 1872. That's 144 years ago. So let's just put that in perspective. In 1872, there were no iPhones, you know, there were no telephones, there were no electric light bulbs, there were no automobiles. So that was a very different company than it is today, wouldn't you say? Our first product was newsprint. How many of you read a daily newspaper? Whew, let's have the free Wall Street Journal subscription here somewhere that gets you started on that. But not many people do. And so the company had to evolve and change over the last 144 years to be in the businesses that we're in. And so that's another story for you: you start out your career, and over the course of your career things change. You have to adapt, you have to learn new things, you have to develop new skills and capabilities. So even though you're going to get a very fine degree here from Georgia Tech, you have to exit with the attitude of 'I am never going to stop learning.' And I've got to continue to learn new things to be relevant, to develop new capabilities so that I can compete wherever our business is moving to, because it's moving somewhere. You can't always predict how that's going to turn out.

You know, I think getting people to work together is the most frustrating and most rewarding part of most of these jobs. And even though there's something called the star model, have you ever heard of that? The guy named Jay Galbraith who invented the star model, and I did a consulting project with him on our design. The star model starts with your strategy, whatever it is you want to do, at the top, and then the other points of the star are org design, process, people, and rewards. Execution of any successful strategy is a combination of all those things. So you've got to think about it: do you have the right organization structure? Do you have the right processes in place, the right decision rights, the right tools and systems? Do you have the right people? You need different capability to do what you want to go do. If you don't have that in your organization, then you know you have the right incentives aligned. So when I created the new marketing role, it was because we wanted to get better at marketing everywhere. We needed to build our capability. So we had a strategy that we wanted to get better at marketing. So the org structure was to create a CML, a central marketing capability. We also had to build a lot of marketing processes and tools and begin to train more of our team on what it means to be a good marketer and recalibrate on where the bar was. I had to go recruit some great marketing talent from outside so that our team could see, 'All right, if you thought the bar was here, and I think the bar is really here, I need to bring in some marketers at that level so that you can raise your game.' And then some people said, 'You know what, I don't think I can get there, so I'm going to go work somewhere else.' But a lot of people said, 'You know what, I can get there. I didn't know that was where I had to go, but I can definitely get there.' And they raised their game. And then you align your incentives with that. So I think that is the most important part of leadership: getting people to collaborate and work better together. And we all operate in these matrix organizations where we have the P&L owned in a geography and the functions all have global purview to look across companies in finance or HR or supply chain or marketing and try to add value to the local businesses. It's a very tricky, challenging operating environment, but it's also very rewarding. And it can be a huge competitive advantage when it works well. Good leaders figure that out and create an environment where people make the right decisions. But it's exciting, the most exciting part of the job in many ways.