74 APPEARANCES CAN BE DECEPTIVE

Having served his country in World War II, Darwin Eatna Smith returned to the United States, quietly determined to make something of himself. He put himself through night school at Indiana University but had to work the day shift at International Harvester to help pay his fees. During one shift, there was an accident and he lost a finger. Smith made little or no fuss: he still went to class that evening and, indeed, returned to work the very next day.

In 1958 he joined Kimberly-Clark’s legal department and was named General Attorney one year later. He joined the Board of Directors in 1967, and took over as Chairman of the Board and Chief Executive Officer in 1971.

By the time he retired 20 years later, Kimberley-Clark had been transformed into the leading consumer paper products company in the world. Over his tenure, it delivered cumulative stock returns that were more than four times greater than those of the general market: better than Hewlett-Packard, 3M, Coca-Cola and General Electric, to name a few.

Along the way, he made a number of tough decisions, as when he concluded that the company’s historical core business of coated paper had become too commoditized. Its economics were poor. Smith reasoned that the way forward was to put much greater emphasis on branded consumer goods, trading off more competition against higher margins.

To fund the new strategy, Smith announced the unthinkable: Kimberly-Clark would sell its mills, even its namesake in Kimberly, Wisconsin. The proceeds went into the fledgling consumer business, invested in brands such as Kleenex. At the same time, Smith pushed the company into new brands, one of which was a disposable diaper brand renamed Huggies.

So you might expect Smith to fit the stereotype of a successful CEO: a dynamic, big personality like Lee Iacocca or Jack Welch. But Darwin Smith wasn’t like that at all. He was shy, socially awkward and mild-mannered.

In one of the few interviews he gave, a journalist asked him to describe his management style. Dressed as ever in his very ordinary and plain J.C. Penney suit, Smith paused for consideration, before at last replying, “Eccentric”.

In retirement, Smith summed up the approach responsible for his exceptional performance: “I never stopped trying to become qualified for the job.”

And the moral is that appearances can be deceptive. Are you guilty of basing your truths on a surface trawl of your brand, category or consumer?