Pk associates - intro + bi os-jan 28 2013


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  • Pk associates - intro + bi os-jan 28 2013

    1. 1. Introduction to PK ASSOCIATES (Includes BIO’s of Project Dream Team Members – Starting on Page 17)7575 Pelican Bay Blvd, - Suite 1403 800 Westchester Avenue, Suite 641-NNaples, FL 34108 January 28, 2013 Rye Brook, New York 10573239-597-8365 914-697-4909Fax: 239594-9354 Fax: 914-697-4910
    2. 2. Summary: Growth Management ResultsStrategy and planning, marketing and execution including social media, innovation and new products, growth opportunity identification,acquisition strategy/process/assessment, board & operating governance Average 25-40+ years experience in premier brand/marketing/sales and institutional management consultancies plus senior management, line Experience experience in N.A. and Global-based consumer products companies… and functional expertise across strategy, planning, marketing, direct marketing, new product development, innovation, sales and customer marketing/development, social media/networking, corporate and general management, including board and operating governance We combine strategic business management and marketing/sales/ Insight-Driven POV business development expertise with rigorous fact-based analytics and disciplined consumer work when appropriate… generating proprietary insights to drive more consistent and predictable growth Action-Oriented We turn insights into actionable implications and recommendations While we have proven processes, tools and techniques that can be Tailored Approach applied, we do not believe in cookie-cutter solutions or processes… each client and their situation, issues are unique By working closely with clients, we build support, avoid surprises, and Collaborative gain momentum plus buy-in/ownership throughout the organization We are independent with no vested interest in downstream services… Objective we are objective in all our recommendations and outputs Work for a broad range of clients… Full-Picture Thinkers bring cross-industry insights and best practices to the table2 Material cannot be copied and is is not for publication or use without written permission from PK ASSOCIATES LLC : 914-886-3771
    3. 3. PKA is well qualified to help in many types ofgrowth management projects, because of… Results • Delivers actionable strategies, plans, processes (if needed) and how to’s that clients own PKA Core Competency • Growth management, including strategic planning, market-driven innovation/new products, marketing and acquisitions/divestitures, is our core competency Best Practices Leverage • We are able to leverage to a client’s advantage a Dream Team of proven seniors who have been there and done it on the client side and in consulting… content + chemistry • We know growth management Ownership Approach/Process • Retainers and/or dream team approach on project work ensures that client’s key senior leaders and managers champion and embrace project outputs – Carefully collaborate with and leverage key operating and staff managers to assure ownership and buy-in… and avoid wheel-spinning – Use relevant processes (when needed), not ones that may be relevant and proprietary to a consultancy but not to the client!3 Material cannot be copied and is is not for publication or use without written permission from PK ASSOCIATES LLC : 914-886-3771
    4. 4. Our principles and beliefs guide the way we work• Over-delivering on content (agreed-upon value-added outputs/deliverables) versus client’s expectations… use just enough process to deliver data/facts and judgment/experience-based solutions that address client’s key issues and opportunities• Successful strategies and plans begin and end with the consumer and customer (market and consumer demand-driven solutions to profitably grow the business)• The value of segmentation, targeting and focus on heavy users• Push beyond the what’s to discover the why’s, so-what’s and to do’s• Clients must understand their consumers/customers benefit hierarchies and brand preference drivers• Successful brands tap both product and emotional benefits• Systematic, disciplined approach best integrates analysis, strategy and creativity• Power of teams… across PKA, client’s internal team & valued external partners• Make challenging work enjoyable• Aggressive in delivering a point of view• Bias for action… passion for results making a difference We’re committed to4 Material cannot be copied and is is not for publication or use without written permission from PK ASSOCIATES LLC : 914-886-3771
    5. 5. PKA provides retainer and project consultingservices across Growth Management• Vision-Based Strategic Growth Strategy… delivering a Strategic Action Plan• Strategic Planning Process, including Development Plan• Total Innovation… what is it, why important; process for achieving across/down the entire organization via continuous improvement, incremental & big bang ideas• Marketing: Planning, Brand Revitalization, Brand Equity• Strategic Growth Opportunity Area (SGOA) Identification and Qualification• Internal New Product Development and/or Process• Acquisition and Divestiture… strategic and financial value, manageability and/or transition/integration planning (attractiveness, affordability, availability)• Sales & Account Management Organization, Roles• Category & Customer Management ad Development• Organizational Alignment, Structure… and Annual/Quarterly Governance• Social Media; linked to Gary Vaynerchuk (social media icon) and VaynerMedia• Recruiting; linked to AK AssociatesPeter Klein directs and is involved in all retainer and project work, and chooses theDream Team of proven senior professionals customized to each client…PKA Dream Team project members are proven seniors only and sign clientconfidentiality/non-compete agreements5 Material cannot be copied and is is not for publication or use without written permission from PK ASSOCIATES LLC : 914-886-3771
    6. 6. What makes PKA different Quality of senior, knowledgeable people Cost effective solutionsfrom premier consulting & client firms• We worked many years for premier consulting • Lower overhead and infrastructure costs firms versus institutional consultancies – e.g. Marketing Corp of America, Booz Allen, – Resources (consultants, admin support) come McKinsey, The Cambridge Group, etc. together as needed for each project, keeping• Only senior, experienced people work with you PKA’s overhead low – Work comes from clients who have known us from start to finish… no juniors allowed in the past and who we want to work with… – They scope out the project and are responsible no business development & marketing costs for project delivery along with Peter Klein (Peter directs all project work) NET / NET• We leverage a large network of proven, Cost-effective way to solve clients’ strategic results-driven external experts… and operational growth issues, challenges pulling them into project teams as required6 Material cannot be copied and is is not for publication or use without written permission from PK ASSOCIATES LLC : 914-886-3771
    7. 7. 3 reasons why we believe PKA is a superior resource for Growth Management projects Client: “We Made the Best Choice” Relevant & Differentiated Team on Content + Chemistry • Proven seniors-only across consumer products, consulting and other industries • Client-based + consulting experience in executive/senior positions… Board-level profiles • Growth management across strategy, planning and implementation • Large and medium size company experience • Collaborative process and people to assure client buy-in, ownership of outputs Relevant Industry, Channels & Functional Experience • Consumer Products and other industries plus multiple categories • Multiple channels • Client-based corporate and general management, marketing, sales, finance, HR, new product development, operations, internal & external business development… and consulting experience Principles, Processes and Tools If/When Needed for Time Saving and Value-Added Content Delivery • Across growth management7 Material cannot be copied and is is not for publication or use without written permission from PK ASSOCIATES LLC : 914-886-3771
    8. 8. Important things to know about our project Dream Team people • We’re successful, proven, senior consultants with diverse, practical line management and consulting backgrounds • We have a passion for helping clients build profitable business, deliver RESULTSSenior, proven PKA ‘dream team’ people, working against an agreed-uponwork plan, will over-deliver against deliverables and client expectations PK Associates • Experienced, proven, senior consultants Good People • Line, staff & consulting industry experience • Team support… work collaboratively… + we ‘wear’ well (people chemistry-wise) with the clients who have to approve and implement the deliverables Working a Plan Reverence for facts and discipline with Diligent approach and work plan Management Ready to re-plan project if conditions warrant = Results Unique implementable solutions Owned by senior and middle management8 Material cannot be copied and is is not for publication or use without written permission from PK ASSOCIATES LLC : 914-886-3771
    9. 9. Our relevant, proven and ‘seniors’ PKA Dream Teamsprovide the ideal combination of expertise and experiencefor client growth needs • All are successful, proven veterans with diverse senior line and staff management plus consulting experience… who work collaboratively and have outstanding people chemistry skills – Extensive experience across:  Growth management (opportunity identification, planning and implementation)  Organic growth and new product development (organic and external: licensing, JV’s)  External business development… acquisitions & divestitures, including assessing and developing strategic value, financial value, manageability and integration plans/implementation  Integrating multiple SBU businesses post-acquisition  Analytics, fact-based analysis… e.g., situation assessment, financial valuation, etc. • Our PKA dream teams have the right values and people chemistry for critically important projects – Team players, focused on the client winning over time… mature, objective, with no political axes to grind – Hands-on, roll-up-the-sleeves, collaborative, yet experienced leaders… attending (and leading when appropriate) informal and formal worksessions (led by Cavas Gobhai or Bob Taraschi, BIOs in Appendix) – Diligence, persistence, reverence for facts, analytics/analyses… balanced by innovative thinking, creativity and operationally sound business judgment • References provided on request9 Material cannot be copied and is is not for publication or use without written permission from PK ASSOCIATES LLC : 914-886-3771
    10. 10. Additional PKA Dream Teams’ qualifications• Because any project-related effort PKA works on is critical to your long-term success, you need a partnering firm that will commit a significant amount of senior resources as well as the active involvement of its senior consultants on a day-to-day basis (on-premise whenever needed for informal and formal meetings, discussions, fact gathering, etc.) – Our approach always includes active senior involvement, not just to attend presentation output meetings, but to be fully involved in the development and delivery of that work… PKA teams have no juniors on your projects!• Because this effort must help you broaden your thinking about new ways to profitably grow, you need an external resource that specializes in understanding the marketplace and helping clients profitably grow – All of our work is focused on addressing growth strategy/implementation and assuring a client organization that supports the Plan… since they must implement it• Clients need a resource that is experienced and comfortable working with senior management in architecting a growth strategy and an operational/execution plan… and working through the growth management planning issues and process if needed – We do this for a living… we focus on growth management… and we have senior management client-based and Board level experience• Tight project timing requires the quick understanding of external market forces and the experience to enable timely expertise and insights – PKA dream teams are recognized as consumer products industry experts, with significant experience across an array of relevant industries and business issues… we also draw on our wide net of external ‘experts’ on an in/out basis• Because project success demands the involvement and ownership of key senior managers, you need a resource experienced in working collaboratively with your teams and in being effective operating in the background – PKA’s dream team approach/philosophy is that a project is never “a PKA project” per se… rather, we support our client team members in taking ownership of, and receiving recognition for, the effort10 Material cannot be copied and is is not for publication or use without written permission from PK ASSOCIATES LLC : 914-886-3771
    11. 11. Additional PKA qualificationsPKA has a strategic alliance with Gary Vaynerchuk* and his VaynerMediaAgency (founded 3 years ago, 210 employees)…Gary is a leading social media/networking industry icon…his 2009 CRUSH IT book and 2011 book, The Thank You Economy, both were #2on the NY Times, WSJ and Amazon business books’ best seller lists • Gary has 956k followers on Twitter, appears on many TV and radio shows, and is the featured speaker at many global conferences on social media and the internet (where he usually wins best speaker of the conference); he has owned equity in Facebook + Twitter (pre-2012 IPO) and knows the founders well, to the benefit of VaynerMedia’s clients • Gary and/or VaynerMedia participate as PKA project team members on appropriate projects that make sense (i.e., when social media / networking strategy and execution is an important consideration) • Gary and VaynerMedia are also available on their own for project work; clients include PepsiCo, Green Mountain Coffee, GE, National Football League, American Idol TV Show, NY Jets, Brooklyn Nets, USA Today, FOX Network, Hess Oil, Del Monte Foods, Oprah Winfrey (personal and her cable channel), Hasbro, others • He is also the largest New Jersey wine retailer (WineLibrary, 39k square foot store in Springfield, NJ) and #1 or #2 in U.S. internet wine sales: • Gary is represented by CAA in Los Angeles for his paid global speaking engagements * See: & NOTE: In the spirit of transparency, Gary is Peter Kleins son-in-law11 Material cannot be copied and is is not for publication or use without written permission from PK ASSOCIATES LLC : 914-886-3771
    12. 12. Additional PKA qualificationsPKA also has a strategic alliance with AK Associates*, a recruiter focusedin the NY, NJ and CT area providing recruitment services for entry-levelcandidates through senior executives • Their search process consistently provides clients with superior candidates – a proven track record of delivering candidates who are productive from the get go • AKA operates as an extension of your company – paying attention to the nuances so they discover candidates that best fit your openings and job specifications • Through years of successful searches AKA has developed an innovative, intensive approach to interviewing and screening potential hires so every AKA recommended candidate carries AKA’s full confidence * See: NOTE: In the spirit of transparency, Alex is Peter Kleins son12 Material cannot be copied and is is not for publication or use without written permission from PK ASSOCIATES LLC : 914-886-3771
    13. 13. Additional PKA qualifications Retainers for Peter Klein exclusively … i.e., 2 per diems per month PKA ‘Dream Team’ Projects… usually 2-6+ Months Peter Klein directs all project teams and has an active role, with no more than 2-3 projects running concurrently; consulting fees for a PKA seniors-only Dream Team project are about 50-80+% below institutional consultancy monthly fees and with no juniors on PKA project teams… project fees and expenses are detailed in a Project Proposal, that usually includes: • Key Messages • Client’s Current Situation and Key Questions/Issues to Address • Project Objectives and Benefits Company Will Receive • Project Outputs / ‘Deliverables’ • Project Approach and Scope… Including Workplan, Key Timing/Dates and Milestone Meetings, Outputs • Methods to Achieve the Project Objectives • For Each Phase/Step: Major Objective(s), Key Activities/Timing, Output / ‘Deliverables’ • Project Team: Including Individual Titles, Qualifications, Project Role • PKA Qualifications and References • Project Costs & Invoicing … Consulting and Admin* fees plus estimated expenses if any (i.e., travel at coach airfare + direct costs if needed for any primary market/consumer/customer ) … Timing of invoicing of fees and expenses, and payment terms* Includes all costs for phone, fax, courier, secondary business research, administrative team support, etc. 13 Material cannot be copied and is is not for publication or use without written permission from PK ASSOCIATES LLC : 914-886-3771
    14. 14. As you might expect, we sometimes struggle a bit initially with a consulting task/project… We always want to be very clear and careful with how we phrase things, since we really don’t know upfront a client’s real culture and real business issues & opportunities … however, we ultimately always come up with a great thinking and need-to-do analysis plus solutions that work, are executable and manageable!14 Material cannot be copied and is is not for publication or use without written permission from PK ASSOCIATES LLC : 914-886-3771
    15. 15. Our deliverables, outputs work!15 Material cannot be copied and is is not for publication or use without written permission from PK ASSOCIATES LLC : 914-886-3771
    16. 16. Now the hard part: Ask us to rehearse for a role and write a Proposal for a key growth management issue you have16 Material cannot be copied and is is not for publication or use without written permission from PK ASSOCIATES LLC : 914-886-3771
    17. 17. PK ASSOCIATES Summary See website for detail: www.pkassoc.comOverviewGrowth Management Consultancy• Senior management and corporate officer proven experience across consulting project or advisory/of counsel services• Proven track record in blue chip companies and management consultancies on growth management and execution: strategy, planning, new business opportunity identification, marketing strategy & execution, organizational design/motivation/ teaming, new product development, innovation, acquisition/divestitures… plus growth and new business development process• A strong client orientation, delivering improved results across business, financial and shareholder value• Philosophy of consulting: bring fact-based, analytic skills with seasoned experience and judgment• Full process leadership from insight to ideation to strategy to implementable action plan• Collaboratively partner with CEOs and senior leaders• Believe in assignments that are clearly important to the organizationMissionPK Associates is an informed, insightful and results-driven management consultancy, providing advisoryretainers/per diems as well as project dream teams to CEOs and senior management…and holds itself to higher standards of added-value and client satisfaction for delivering client results• The consumer and/or customer comes first in our demand-driven economy… economy… we help companies look externally, and internally, at their business relative to more predictable and profitable growth• PKA focuses on optimizing consumer, market, customer and competitor facts and insights, and how they contribute to building brand and company value… recognizing a companys core skills and asset base plus capital and people resources• We believe in articulating clear, focused strategy and executional how tos to senior and middle level executives with ownership and buy-in by the managers who must execute… we have developed several Best Practice growth processes for ensuring that recommended strategies, growth solutions, and tactics are practical, make sense and have economic rationale• We deliver solutions, big ideas and implementable management processes if/when needed• Depending on a client’s need, Peter Klein provides per diem or retainer services for advisory/of counsel work… client’s and on a formal project basis, with a customized Dream Team of proven senior consultants with significant client-based experience (20-35+ years), grounded in left brain driven fact-based and need-to-do analytics plus right brain-driven creativity, experience and good business judgment… no juniors on any PKA project teams… PKA’s Dream Teams are proven senior professionals customized to each client and their project need PKA’s 17 Material cannot be copied and is is not for publication or use without written permission from PK ASSOCIATES LLC : 914-886-3771
    18. 18. APPENDIX PKA Project Dream Team Member Bio’s (Not An All-Inclusive List)18 Material cannot be copied and is is not for publication or use without written permission from PK ASSOCIATES LLC : 914-886-3771
    19. 19. Strategy & Innovation/ Sales/ Compet . Peter Klein (NY & FL-Based) Planning Mktg/New Prdts Retail M&A HR Assm’t Assm’t X X X X X XPK Associates is an informed, insightful and results-driven firm that holds itself tohigher standards of added-value and client satisfaction for meaningfully improvedclient results... because, at the end of the day, thats what it is all about, RESULTSPeter Klein - Founder• I am a balanced brain and live at the intersection of fact-based, information-driven insights, disciplined learning, and proven, experience-driven sound judgment… to deliver solutions, big ideas and implementable management process(es), across: growth management strategy and planning, including new product development and M&A (assessment, valuation and integration planning), strategic planning, including a process that works, marketing strategy and solutions, and organizational structure and motivation• I work seamlessly providing direction, guidance and input from insight to ideation to strategy to Monday morning action plans... with facts and good seasoned judgment guiding creativity at every step• I have a fierce client ROI orientation... I live by metrics and measurably improved results• I will not accept an engagement role unless I am certain I/we can add meaningful value• I will not accept an engagement unless it is clearly important to the client• If my counsel, advice and content (deliverables) don’t yield significant added-value and client satisfaction, we have not done our job!• Humor is not an elective course!19 Material cannot be copied and is is not for publication or use without written permission from PK ASSOCIATES LLC : 914-886-3771
    20. 20. Peter Klein – cont’dFrom March, 2001 through September, 2005, Peter Klein was Senior Vice President and Corporate Officer of The Gillette Company,responsible for Strategy and Business Development and reporting to the Chairman/CEO. Mr. Klein was asked to stay for up to a one yeartransition period, but decided to leave Gillette following change-in-control to P&G on October 1, 2005; and returned to operate from hisWestchester, NY and Naples, FL offices. Previously he was Executive Vice President and Corporate Officer of Corporate Strategy, BusinessDevelopment, Marketing Services and Global e-Business at Nabisco Holdings Corp. from January 1998 through December, 2000, departingNabisco along with other senior executives following Nabisco’s acquisition by Phillip Morris/Kraft Foods in late December, 2000Peter directed Nabisco’s long-term strategy, assured the alignment of corporate strategies with operating unit and functional group plans,developed and implemented cross-company internal and external business development (acquisitions, divestitures, licensing, JV’s), anddirected integrated marketing intelligence, marketing services (i.e. market research, consumer promotions, media buying) and global e-Business. He also directed the Nabisco acquisition of United Biscuit (voted European deal of the year in 2000) and the auction of Nabisco(largest auction of a U.S.-based public company and voted U.S. deal of the year in 2000)Peter joined Nabisco from The Cambridge Group, where he was a Partner / Managing Director of its east coast office, which he opened in1991. Mr. Klein came to Nabisco with 17 years of management consulting experience. Prior to joining The Cambridge Group, he was asenior partner at Marketing Corporation of America, where he led the Consumer Products management consulting practice… over hisconsulting career Peter has worked with over 40 major Consumer Product companies and in almost every category across Food andBeverages (including alcoholic beverages), OTC Drugs, Household Products, Toiletries & Personal/Beauty Care Products, etc.Before consulting, Peter worked in line sales, marketing and business development at Sterling Drug (Vice President, BusinessDevelopment), The Gillette Company (Director of Marketing & Sales for Braun North America and Group Marketing Manager in PersonalCare), Johnson & Johnson (Consumer Trade Promotion and Marketing), and Richardson-Merrell (Field & Headquarter Sales); and he hassignificant experience in line marketing and innovation/new products (e.g., Oscar Mayer Lunchables, many others)Peter was educated at Syracuse University (B.S. in Marketing & Finance, 1968) and Harvard Business School (MBA 1971), holds two U.S.patents, and has published articles and given speeches on: growth, innovation, cross-functional business teams, acquisition, new productdevelopment, private label, business success factors, etc. He is on Syracuse University’s Whitman School of Management academicadvisory board, was an outside Director on North Carolina A&T’s Business School advisory board and was a Director on the Braun Board,and is now also a private investor in start-up new ventures (e.g., Culinary Health Innovations; Suavecito Tequilla Importers, others)He currently provides ‘of counsel, advisory’ consultative services to CEO’s and senior executives, and speaks/presents across a number ofbusiness management and process topics based on his strategic and hands-on experience working for blue chip public companies as wellas management consultancies. Advertising Age recognized Peter as one of 10 Innovators (2 page article) and THE DEAL.COM did a 4page article on Peter on their online website and in their magazine (articles available on the website under… see Page 103 for one article on Peter PK ASSOCIATES has offices in Rye Brook, NY and Naples, Florida 20 Material cannot be copied and is is not for publication or use without written permission from PK ASSOCIATES LLC : 914-886-3771
    21. 21. Peter Klein – cont’d Acquisitions & Divestitures ExperienceNot All-Inclusive List Strategic Financial Transition Organization Value Value Plan Dev. Companies/Divisions Del Monte Foods X X InBev / Anheuser-Busch **** X X X Gillette Company* (Sale to Procter & Gamble) X X X X Nabisco** (2000 Auction/Sale to Phillip Morris/Kraft Foods) X X X X Rembrandt X X X X Nanfu (Battery Company in China) X X X X Zooth (Children’s Toothbrush Company X X Spectrum Brands X X X X Favorite Brands (Nabisco Acquisition from Bankruptcy X X X X Canale (Argentina; Nabisco Acquisition) X X X X United Biscuits*** (2000 Acquisition by Nabisco) X X X X Nabisco Canada Grocery Products (Divestiture) X X Richardson-Vicks (Acquisition X X X X Life Savers Company (Squibb Divestiture to Nabisco Brands X X X X Kraft Foods (Phillip Morris Acquisition) X X X Kraft Foods + General Foods (Merger within Phillip Morris) X X Tropicana (Acquisition) X X Ocean Spray (Acquisition; JV) X X Tree Top (Acquisition) X X Austin Foods (Acquisition X X Hunt-Wesson (Acquisition) X X Mennen (Acquisition) X X X Neutrogena (Acquisition X X X Spice Island (Acquisition) X X X Stokley-Van Camp (Acquisition; Gatorade, etc.) X X X Progresso (Ogden Corp Divestiture to Pet Foods) X X X X Lender’s Bagels (Kraft Foods Divestiture) X X X Delimex Frozen Foods (Acquisition by Fenway Partners) X X Brands/Lines Breath Savers/Ice Breakers Mints + Ice Breakers/Carefree/Bubble Yum Gums + Royal Gelatin (Nabisco Divestitures to Hershey & other firm) X X Fleischmanns/Parkay Margarine (Nabisco Divestiture) X X College Inn (Regional Broth; Nabisco Divestiture) X X Best Foods’ Bakery Business (Entenmanns, etc.; Divestiture) X X Mitchum (Anti-Perspirant; Acquisition) X X Choco-Milk (Milk Additive/Mexico; Acquisition) X X Chun King (Chinese Foods; Acquisition) X X X Pine Sol & Combat (Household Products; Acquisitions) X X Gatorade & Snapple (Quaker Oats Divestiture) X X X Black Diamond (Cheese/Canada; Acquisition) X X Ortega (Mexican Foods; Acquisition) X X Saffola (Margarine, Oils; Acquisition) X X Sunny Delight (Doric Foods) X X Maalox (Antacid; Acquisition) X OTC Drugs + HH Products + Rx-To-OTC Switch (Miles Labs) X X OTC Drugs + Rx-To-OTC Switch (Marion-Dow) X X * Largest global CP Industry deal in 2005; voted deal of the Year in the U.S. and Europe ** Voted Deal of the Year in U.S. in 2000; largest auction ever at that time of a U.S.-based public company *** Voted Deal of the Year in Europe in 2000 **** Largest global CP Industry Deal of 200821 Material cannot be copied and is is not for publication or use without written permission from PK ASSOCIATES LLC : 914-886-3771
    22. 22. Example references for Peter Klein follow… kindly inform Peter in advance of contacting anyone so he can call and assure folks respond quickly• Jim Kilts (Sr Partner & Managing Director, Centerview Capital; Chairman of Del Monte Foods and NIELSEN; Director at MetLife, Pfizer, Westvaco; ex-Chairman & CEO: Gillette and Nabisco Foods; ex-Global CEO, Kraft Foods)• Sandra Peterson (Group Worldwide Chairwoman and CEO, Johnson & Johnson IT, Supply Chain and Consumer Healthcare Sector; ex- President, Bayer Global Agriculture Group; ex-President, Bayer Diabetes Care + Devices GBUs; ex-McKinsey)• Gary Rodkin (CEO, ConAgra; ex-President, PepsiCo Beverages)• Robert Sharpe (ex-General Counsel, ConAgra Foods; ex-General Counsel, PepsiCo and RJR-Nabisco)• Irene Rosenfeld (CEO, Mondelez; ex-CEO, Kraft Foods; ex-CEO, Frito-Lay)• Ian Cook (CEO, Colgate-Palmolive)• Gary Cohen (CEO, Timex USA; ex-GM Playtex and ex-SVP Marketing, Gillette Oral-B)• Roger Deromedi (Chairman, Pinnacle Foods; ex-CEO, Kraft Foods)• Carlos Brito (CEO, Anheuser-Busch InBev)• Bridgette Heller (President, Merck Global Consumer Healthcare: ex-J&J and Kraft Foods Senior Executive)• David Peacock (ex-President, Anheuser-Busch InBev – US)• David West (CEO, Del Monte Foods; Ex-CEO & CFO, Hershey Foods; ex-Nabisco Biscuit VP Finance & VP Corporate Planning)• Ed Lonergan (CEO, Chiquita Brands; Ex-CEO, Diversey; ex-President, Gillette Europe; ex-VP, P&G)• Rick Lenny (Ex-CEO, Hershey Foods; Director, ConAgra & McDonalds; ex-President, Nabisco Biscuit-US; ex-Kraft Foods SVP)• Doug Conant (Ex-CEO, Campbell Soup Company; ex-President Nabisco US Foods; ex-VP, Kraft Foods)• Denise Morrison (CEO, Campbell Soup; ex-Nabisco US Foods SVP Sales, ex-Nestle Executive)• Ed Shirley (CEO, Bacardi; Ex-Vice-Chairman & President, P&G Beauty/Personal Care GBU; ex-Gillette Intn’l President)• Claudio Garcia (SVP Human Resources, Anheuser-Busch InBev)• Bob Gamgort (CEO, Pinnacle Foods; ex-Mars President NA; ex-MLB Executive; ex-Kraft Foods President of Lenders Bagels)• Bridgette Heller (President, Merck Global Consumer Care; ex-J&J and Kraft Foods Senior Executive)• Jim Holbrook (EVP/CMO, Post Foods; ex-CEO EMAK Marketing Services)• Lou Gentine (Owner and CEO, Sargento Foods)• John Bowlin (ex-Chairman, Spectrum Brands; ex-President, Oscar Mayer, Miller Beer and Kraft NA)• Neil DeFeo (Chairman and ex-CEO, Sun Products Corp; ex-CEO at Playtex Products and Remington Products; ex-P&G, Clorox)• Carl Johnson (EVP Brands, Del Monte Foods; Non-Executive Chairman, Nautilus Equipment; Ex-SVP Strategy/Planning, Business Development, Quality and R&D, Campbell Soup Company; ex-EVP Kraft Foods U.S. Meals & Enhancers Division)• Cavan Redmond (Ex-Group President, Pfizer Animal Health, Consumer Healthcare, Capsugel and Corporate Strategy)• Paul Sturman (President, Pfizer Global Consumer Health Care; ex-SVP, Johnson & Johnson; ex-Warner-Lambert Mktg)• Jeff Ansell (CEO, Sun Products; ex-CEO, Pinnacle Foods; ex-President, P&G’s Iams SBU)• James White (CEO, Jamba Juice; ex-President, Safeway’s Consumer Division; ex-Gillette and Ralston-Purina executive)• Jim Cataldi (SVP Strategy & Planning, GsK)• David Rickard (ex-CFO at CVS; RJR-Nabisco; ex-SVP Finance at GrandMet/Pillsbury & Kraft Foods) ADDITIONAL References Available 22 Material cannot be copied and is is not for publication or use without written permission from PK ASSOCIATES LLC : 914-886-3771
    23. 23. Peter Klein - Article THEDEAL.COM May 11, 2007 On-Line Article & July 2007 The Deal Magazine The Tonto Files Peter Klein "I began my career," says Peter Klein, "selling drugs on the corner of Haight and Ashbury in the 1960s." True enough: The drugs in question were over-the-counter medications like Vicks and Nyquil, and Klein was selling them to pharmacies (including one at that famous location) as a management trainee for Richardson-Merrell Inc. It was a good beginning for an ambitious young man with no flowers in his hair, though not for the reasons he thought. For just as the Age of Aquarius was dawning, the sun was setting on the last great period of growth for the consumer-products industry. Industry leaders would take time to react, but by the early 1980s, they were battling for market share — and Wall Streets approval — with countless turnaround plans, re-engineering schemes, adjacent expansion strategies and, above all, acquisitions. The wave of transactions, which continues to this day, involved many of the biggest and best-known companies in the world. Richardson-Merrell, for example, became Richardson-Vicks Inc. and then a part of Procter & Gamble Co., which won it in 1985 after Unilever put it in play with a hostile bid. Separate article on Peter Klein from Advertising Age available on request: 1 of Top 10 Innovators23 Material cannot be copied and is is not for publication or use without written permission from PK ASSOCIATES LLC : 914-886-3771
    24. 24. Peter Klein - Article, Cont’dKlein had long since moved on by then, preferring to climb the ranks at Johnson & Johnson, Gillette and Sterling Drug Inc.before becoming a consultant in the early 1980s. But throughout his long career — and especially in the last decade, when heheld the top strategy and business development jobs at Nabisco and then Gillette — he has been involved in one way oranother in much of the action as this huge, mature sector has tried to reconfigure itself in a changing world. Kleins role hasnever been a highly public one; thats for CEOs. Instead he has stayed in the background, in that vital spot where strategymeets execution. "So," he says, beginning an interview with typical humor, "this is Tonto, coming out of the tent.“If Klein is Tonto, the Lone Ranger would have to be Jim Kilts, the disciplined, analytical consumer-products executive creditedwith turning around dozens of brands over the years, from Kool-Aid to Post Cereal. The relationship dates back to 1982, whenKilts was at General Foods Corp. and hired Klein as a consultant. Kilts went on to work at Kraft Inc., ultimatelybecoming executive vice president of worldwide food operations at Krafts then-parent, Philip Morris Co’s. But what he (and, byextension, Klein) is best known for are two consecutive home runs: fixing up Nabisco and selling it to Philip Morris for $14.9billion in 2000, and then fixing up Gillette and selling it to P&G for $54 billion in 2005.Gillettes sale to P&G was the largest-ever consumer-products transaction, making P&G the worlds biggest consumer-productscompany, with combined annual revenue of more than $63 billion. Its also a giant test case of the ability of an acquirer tocombine seemingly complementary businesses, take advantage of diverse geographic strengths and make huge scale pay off.The Nabisco sale was a coda to the over-reaching $31 billion leveraged buyout of RJR Nabisco Inc. by Kohlberg, KravisRoberts & Co. in 1989. Because Nabisco was combined with Kraft, recently spun out of Altria Group Inc. (as Philip Morris is nowknown), it was also a big step in the unwinding of the 20-year strategic tie-up between food and tobacco.At both Gillette and Nabisco, Kilts was hired as the chief executive officer and quickly brought in Klein as one of his key recruits.Kleins job was nearly identical at both companies: He was in charge of drawing up the strategic plan, which defined thecompanys goals and documented how to achieve them. Dealmaking for him has always been part of a bigger picture. Now aconsultant again (his Rye, N.Y., firm is called PK Associates LLC) he regularly tells his clients to be wary of the "zeal to deal."By that he means making key M&A decisions in the heat of the moment, instead of taking a longer-term approach and seeingdeals as an extension of a plan.Its the kind of common sense that executives in an industry under pressure often manage to forget — and Kleins industryoffers many a case in point. Take, for example, Kellogg’s acquisition of Lenders Bagels for $455 million in November 1996.Three years later, the attempt to move into the broader breakfast market was deemed a failure. Kellogg sold Lenders to AuroraFoods Inc. for $275 million, 60% of its original price, and the company took a $170 million hit to its earnings. 24 Material cannot be copied and is is not for publication or use without written permission from PK ASSOCIATES LLC : 914-886-3771
    25. 25. Peter Klein - Article, Cont’dThe desperation to deal comes from the simple fact that the industry is not growing. For the past 25 years consumer-productscompanies have struggled to keep pace with the overall economy and have grown at less than 1%, simply tracking populationgrowth in developed countries.As a consultant at Marketing Corp. of America in the early 1980s, Klein saw the transition unfold. Companies shifted attentionaway from product development and focused on grabbing market share, usually through more advertising and moreacquisitions. Consolidation, Klein believes, exacerbated this shift and created a vicious circle. Senior managers departed astheir companies were acquired, leaving fewer executives with experience in product development. Meanwhile, companieswere having trouble recruiting young talent; many of the best and brightest went into the roaring financial services sector.And the best-known brands in the supermarket werent getting any younger. Saltines date back to 1876, Coca-Cola to 1886,Juicy Fruit gum to 1893, Kelloggs Corn Flakes to 1906, Hellmanns mayonnaise to 1912, Land OLakes butter to 1921, BirdsEye frozen foods to 1930, Ragu pasta sauce to 1946, Häagen-Dazs ice cream to 1959 and Gatorade to 1965.To be sure, consumer-products companies in the 1980s were trying to innovate, just as they are today. In 1984 Klein washired by Oscar Mayer Foods Corp., where Kilts had recently become a general manager, to evaluate one of its new products— stuffed frozen hamburgers. Klein suggested scrapping the frozen burger idea since Oscar Mayer was spending money tolearn things about the frozen-food business that industry leaders had known for decades. Instead, he suggested extendingOscar Mayers brands of deli meats and cheeses. The result was "Lunchables," packaged school lunches consisting ofcrackers, cheese, deli meats and desserts, which soon became a billion-dollar business.But Lunchables was an exception — the more so, since most innovations come from outside the big companies. "More than80% of new products fail," says Klein, who studied marketing and finance at Syracuse University, earned an M.B.A. atHarvard and has no doubt that stuffed frozen burgers would have failed too.Klein continued his consulting career at the Cambridge Group, which he joined in 1991. And he continued to work on thebuying and selling of several supermarket aisles worth of brands, divisions and companies, including Pine Sol, Gatorade,Tropicana and Mennen. Jim Kilts was a big client, but not his only one.That changed in 1998, when Kilts was hired as the CEO of Nabisco. It was almost 10 years after the "Barbarians at the Gate"buyout. KKR had exited in 1994, but the separation of Nabisco from RJR, one of the original objectives of the deal, was stillhung up in the world of tobacco litigation. Nabisco itself was struggling. A heavy debt load limited financial flexibility, itsdistribution system had been damaged by cost cuts and it lacked an international division, which KKR had divested to pay offdebt. "This put the company at a major disadvantage because it was operating in a global market," says Klein.25 Material cannot be copied and is is not for publication or use without written permission from PK ASSOCIATES LLC : 914-886-3771
    26. 26. Peter Klein - Article, Cont’d Kilts hired Klein as vice president of strategy, corporate planning, e-business and marketing services. Klein drew up a strategic plan and then got to work on item No. 1: turning around the biscuit division, whose profits were falling fast, despite popular brands like Ritz crackers, Wheat Thins, Fig Newtons and Oreo cookies. Seeking to increase productivity, the previous executives had restructured the biscuit division sales force. Originally, one sales person drove the trucks, stocked the shelves, set up displays and maintained a relationship with the store manager. Under the new system, a different person was assigned each function. The system was rolled out nationally before it was tested on a much smaller scale. Many senior people in the sales force responded to the change by quitting. "They changed their distribution system and got it all wrong," says Klein. After studying what went wrong, Klein and Kilts brought back the original structure and rehired some of the senior sales people who had quit. The marketing plan also suffered from mismanagement and neglect. In the five years before Klein joined Nabisco, the units advertising budget had fallen to historical lows. Klein discovered that several viable brands, including Snackwells, Ritz crackers and Fig Newtons, had been all but ignored. Nabisco then decided to invest $50 million in marketing, increasing the advertising-to-sales ratio by 50%. Shrewd acquisitions played a big role in the turnaround plan. Kleins team identified gaps in the product line, and in September 1999, Nabisco bought Favorite Brands International Inc. out of bankruptcy for $475 million — a deal that was within the companys limited means. Favorite brands had been a hodgepodge of companies thrown together, but never fully integrated. Its brands included Jet-Puffed marshmallows, Trolli Gummi candies and the Sathers & Farleys candies. "We saw hidden value in Favorite Brands," says Klein, explaining that the brands, especially Trolli, complemented Nabiscos Life Savers unit. Previously undermarketed, the brands could be sold through the stronger Life Savers distribution system. The deal also made possible the introduction of Gummi Savers, now a significant product in the $700 million chewy-candy sector. Nabisco was also eyeing United Biscuits, but here it lacked the financial firepower to proceed alone. After initially competing against a team consisting of French food company Groupe Dannone and financial partners Paribas Affaires Industrielles, or PAI, Cinven Ltd. and DB Capital Partners, it teamed up with them and bought United Biscuits in a joint venture. Along with a stake in the JV, Nabisco was able to buy outright some of United Biscuits holdings in China, Hong Kong and Taiwan. (Danone, meanwhile, bought its operations in Malaysia, Singapore, Scandinavia, Finland, Poland and Hungary.) The deal turned out to be a cost-effective way to restore some of Nabiscos international reach, since most of United Biscuits operations were in Europe.26 Material cannot be copied and is is not for publication or use without written permission from PK ASSOCIATES LLC : 914-886-3771
    27. 27. Peter Klein - Article, Cont’d The turnaround was progressing, but Nabiscos stock remained depressed because of its relationship to parent RJ Reynolds (still its majority owner), which was facing billions of dollars in potential tobacco liabilities. Raider Carl Icahn had already made several attempts to buy Nabisco before Kilts and Klein joined the company. In 2000 he made another, offering a hefty 40% premium to the companys stock price. The board of directors put Nabisco on the auction block. Klein became immersed in the process, facilitating the development of the prospectus, working closely with the investment bankers on the deal and working on the management presentations to prospective buyers. In June 2000, Nabisco was sold in a complex deal. Philip Morris bought Nabisco Holdings, the food unit, for $14.9 billion. Nabiscos parent company RJ Reynolds, meanwhile, assumed any tobacco liabilities associated with the deal along with $11.8 billion in cash that was on Nabiscos balance sheet. Philip Morris wanted Nabisco to combine with its Kraft unit, which it had captured in a hostile deal in 1988 as a bulwark against its tobacco liabilities. For Kilts and Klein, this was familiar territory. As senior vice president of strategy and development at Kraft in the late 1980s, Kilts was in charge of defending Kraft from Philip Morris original tender offer, helping to get the price up from $90 a share to the $106 a share Kraft eventually fetched. After the deal was done Kilts was in charge of integrating Kraft with Philip Morris existing food business — his former company, General Foods, which Philip Morris had captured in 1985. Klein worked on that integration as well, helping to combine the two North American sales forces. In 2000 the task would be to integrate Nabisco with Kraft. Klein stayed on to help, working with Irene Rosenfeld, then a rising star at Kraft and now chairman and chief executive officer of the company. Klein oversaw a Nabisco steering committee, which suggested ideas for integration, but Kraft was responsible for the ultimate plan. The hardest part for Klein was watching Life Savers, a unit he helped build, be dismantled. To get regulatory approval for the Nabisco deal, either Altoids or Life Savers breath mints unit needed to be divested. Philip Morris decided to sell the Life Savers unit. "It was a difficult decision, hard to comprehend," says Klein, who recalls being told that Altoids was a global brand with significant growth opportunities. Klein disagreed. Less than 10% of its sales were outside the U.S., he says. And while Klein was unsure whether Altoids had any new products it its pipeline, he knew that Life Savers sure did. Also by selling almost half of the Life Savers unit, which had been bigger than Altoids to begin with, it would become smaller and lose some of the benefits of scale. After Nabisco, Klein planned to get back into consulting. But Kilts, who had been hired in 2001 as CEO of Gillette, once again knocked on his door.27 Material cannot be copied and is is not for publication or use without written permission from PK ASSOCIATES LLC : 914-886-3771
    28. 28. Peter Klein - Article, Cont’d Gillette, like Nabisco, was a major turnaround play. The company had missed analysts forecasts for 14 straight quarters. The way Klein saw it, the biggest problem was that the company had become very insular and inefficient. It would pay bills in 15 days but take 120 days to collect debt. Sales meetings were held 10 to 15 days after the books closed each month, not daily. There were few staff meetings or quarterly reviews. Managers were not held accountable and didnt strive to meet performance objectives; few even knew what exactly was expected of them. The board of directors only paid out between 20% and 40% of its bonus pool each year. As vice president of strategy and business development, Klein once again developed a three-year strategic plan for the entire company. Gillette hadnt created such a plan since 1992. "No one was planning for more than one year in advance," says Klein. The problem, he says, "was more or less self-inflicted.“ Klein and Kilts began by redefining the companys organizational structure, laying out clearly defined rules and responsibilities. They didnt replace most executives, though there were some musical chairs. Weekly staff meetings created a venue where managers could be held accountable to each other, not just to Kilts and Klein. Reorganizing made a big difference. By 2005 the board of directors doled out about 95% of the bonus pool to employees. With the organization functioning, Kilts and Klein turned their attention to revamping the business. A major challenge was recovering from a badly bungled acquisition. Gillette had paid KKR close to $8 billion, including assumed debt, for battery maker Duracell International Inc. in September, 1996. But according to Klein, key people from Duracell were lost after the acquisition, and Gillette focused on selling its high-end Ultra brand to the exclusion of some of its better-known, more mid- market brands, like CopperTop and Duracell Plus. Under the new plan, Duracell would focus on all three brands and look to grow the business margin faster than the battery business as a whole. To do this, executives were given quarterly and annual goals, which Klein and Kilts ensured were met. The other objectives outlined under Kleins three-year plan included: to expand the companys market share in the razor business, to grow Oral- Bs manual toothbrush business and to improve its electric razor business. Across the board, Klein and Kilts found that Gillette executives had focused on high-end products to the exclusion of its bread-and-butter businesses. The three-year plan helped improve the companys business and its stock performance. Nevertheless, Gillette was still overly dependent on razors and blades. And with about $10.5 billion in 2004 sales, it was dwarfed by consumer-products giants such as Unilever and Procter and Gamble.28 Material cannot be copied and is is not for publication or use without written permission from PK ASSOCIATES LLC : 914-886-3771
    29. 29. Peter Klein - Article, Cont’d Klein believes that larger companies have many competitive advantages. They have more power when it comes to procurement and research and development. They also can invest in areas that are out of reach for smaller competitors. Frito-Lays extensive distribution system and Anheuser-Buschs advertising campaigns are examples. Larger companies can also exert more pressure against retailers, especially behemoths like Wal-Mart Stores Inc., for shelf space but can also work with them as a global partner. In one of the many presentations Klein uses in his consulting work, he puts the advantages of scale this way: "Its the ability to invest in building capabilities which are distinguishable from competitors, like: assessing and integrating acquisitions, managing investor relations and specific areas of technical expertise." Big firms can make investments, adds Klein, "while smaller firms go broke with one idea.“ When Gillette decided to look for a big merger, Kleins role once again was to advise the board of directors and work with management and investment bankers. This was not the first time the company had considered a merger. Two years earlier, Kilts approached his counterpart at Colgate-Palmolive Co., Reuben Mark, to discuss a possible "merger of equals," but the sides couldnt agree on a valuation and who would run the combined company. In 2004, Gillette approached Colgate again and the results were pretty much the same. But four months later, Gillette began talks with Procter & Gamble, which bought the company in February 2006 for $54 billion. For Gillette, selling to P&G would reward shareholders and solve the size problem. For P&G, committed by chairman A.G. Lafley to look outside the company for growth, the deal was an attempt to build out its portfolio. One area that P&G was particularly interested in was Gillettes toothbrush business. P&Gs toothpaste brand, Crest, has been trying to gain market share from the industry leader, Colgate, for years, and P&G hoped the deal would help it gain a competitive edge in the dental isle. The idea is to pair Gillettes number one toothbrush, Oral-B, with Crest toothpaste, similar to the way shampoo and conditioner are packaged as an extension of a single product. According to a recent Wall Street Journal article, the idea has yet to pay off. One hurdle: getting Oral-B staff to move from Boston to P&G headquarters in Cincinnati, where a Gillette manager decided the operation needed to be. Another big driver for the deal was that the two companies could help each other expand internationally. Over the years, P&G has developed top-notch distribution systems in such fast-growing markets as China, Russia, Poland and the Philippines, and the chance to move Gillettes products through them was an important reason for the deal. Gillette has its own strengths in such countries as India and Brazil and could help P&G in those markets.29 Material cannot be copied and is is not for publication or use without written permission from PK ASSOCIATES LLC : 914-886-3771
    30. 30. Peter Klein - Article, Cont’d On the international fronts, things seem to be going well. P&G cited strong growth in developing markets when it announced earlier this month that net income was up 14% (to $2.51 billion) in its fiscal third quarter. Overall, P&Gs businesses and stock have performed well since the deal, though in a bond prospectus filed in May, it noted that the integration of Gillette continues. While Klein believes that P&Gs scale will help it compete in the years ahead, he sees three key challenges for all the consumer-products companies. The first is intensifying competition. Retailers are growing steadily more powerful, and their growing lineups of private-label products pose a serious threat to manufacturers. The next challenge for consumer-products companies will be figuring out how to become more efficient. "A lot of the low- hanging fruit has already been picked off," he says, adding that companies would be well advised to rethink what their core businesses are and what functions, beyond the back office, can be outsourced. The last challenge may be the toughest of all: Its the shortage of good people going into product development and marketing in this now-mature industry. Yes, Kilts has earned spectacular rewards for his work in the field: a total payout of $77 million after the sale of Nabisco and as much as $165 million from the sale of Gillette. Klein, too, has presumably done well in these deals, though he declines to say how well. But those prizes were years in the making, and they wont be easily duplicated. These days, the young Peter Kleins of the world are much less likely to go into consumer products. As they make their way, though, theyll still do well to consider the lessons Klein and his colleagues have learned over the years. Visit Peter Klein’s website for additional background and his consulting/counsel services offered: Separate article on Peter Klein from Advertising Age available on request: 1 of Top 10 Innovators30 Material cannot be copied and is is not for publication or use without written permission from PK ASSOCIATES LLC : 914-886-3771