Technological domination, a la Manx, has been the basis of Gillette's success over the last decade, but its value was a lesson hard learned. When Bic introduced disposable razors, in the late seventies, Gillette responded to the threat by entering the disposables market and swiftly establishing itself as the dominant player. But that wasn't a title the company was proud of. "It was commodity hell," says John Darman, whose official title is head of male shaving for the North Atlantic Group. Darman is a rotound, deeply tanned man with a mustache (a very well-groomed mustache you can be sure), who bounces happily from topic to topic as we sit at a conference table in the Gillette corporate offices high up in the Prudential Center in Boston's Back Bay. "When you're in the disposables market," he goes on, "you're competing on two things: convenience and price. And that does not play to the strength of a value added manufacturer. Disposables were those blue plastiv things you threw away. We were teaching our customers to focus on price and to forget about quality."

Darman knew what that was like from his own experience. A native of Cambridge, Massachusetts, who has spent his entire life within a twelve-mile radius, he came to Gillette in the mid nineteen seventies, and for his first fourteen years he tried to market the company's "personal care" line, inclusing such hair products as Toni perms, The Dry Look, and Silkience. That was a lesson in what it's like not to be technologically superior to your competitors. "We had no competitive edge, no technological advantage," Darman tells me. "As good a marketer as I am, and as my colleagues are, we were stuck in a positioning reliant, unpredictable business. It made it easy to understand whu you don't want to rely on marketing."

Commodity hell is exactly what American corporations fear most, because when your product is a commodity - essentially interchangeable with all its competitors - the only way to get market share is to cut the price. That means that your profit margin is continually dropping.

The way most corporations try to avoid commodity hell is through advertising. If you can create a strong enough brand name, the idea is, you can charge more for your product, because people will pay more for the brand. And certainly advertising was a crucial part of the turn around that Gillette embarked on in early 1989 when it abandoned all its advertising for disposables and introduced the "Best a Man Can Get" advertising campaign. But the turnaround ultimately succeeded because the campaign was followed by a productm Sensor, that was strong enough to transform the way people thought about shaving itself.

In the standard narrative of corporate renewal, this kind of turnaround happens when the board of directors goes outside to bring in a hard driving CEO, preferably with a background in soft drinks and telecommunications, who replaces the dead wood with a fresh corps of mavens from McKinsey. The fact is, though, that the turnaround was orchestrated entirely by Gillette lifers. Gillette's cadre of seasoned engineers has been able to make advances by building on a rich, if undocumented, history of trials and errors, when it became clear that the company had veered off course, its veteran managers knew what had worked. The "new" Gillette was the old Gillette.

One of the lifers who put the company back on course was a vaguely Pattonesque* man named John Symons, who, as the head of Gillette's North Atlantic Group in the late eighties, embarked on a crusade against the disposables and all they represented. In 1987, arriving at Gillette's Boston headquarters for a divisional review session, he listened patiently while the man in charge of refillables got up and gave a three hour presentation. THen the man in charge of disposables, Bill Flynn, rose and began to speak. In his hand, he held a bag of ten Good News disposable razors - those blue plastic things - for show and tell pirposes. He had barely started when Symons took the bag of disposables from him, threw it on the floor, and crushed it beneath his heel. "That is what I think about disposables," he said in his low, gravelly voice. "Your review is not required."

Darman explains, "We wanted to get men back to the way it was before the nineteen-seventies, when they thought of razors as fine instruments. That's why Sensor was so crucial. It was metal, which gave it the fine-instrument feel that we wanted. But it also gave you a much better shave."

Sensor's superior performance, in turn, was what allowed Gillette to charge more for it that for its predecessor. This gratifying experience was what inspired Al Zeien's decision that Mach 3 would inaugurate a new blade technology. That decision also fitted into a broader vision laid out by Zeien, a onetime engineer who took over as CEO in 1991 after twenty two years at Gillette. Zeien identified what he liked to call "growth drivers" - R & D., capital investment, and advertising - and he committed the company to increasing total spending on them at the same rate that the company's sales were growing. Moreover, Zeien saw to it that Gillette would make products only in categories where Gillette could be the world leader - today 1.2 billion people use Gillette products - and where the market would, in Darman''s words, "yield to technology." Under Zeien's tenure, Gillette's capitalization has risen from six billion dollars to nearly sixty billion dollars. And shaving has become perhaps the only business in the world where the most popular product is also the best: Gillette is simulataneously the Porsche and the General Motors of shaving**.

That curious circumstance has essentially given Gillette a license to print money. Last year, it sold 2.9 billion dollars' worth of razors and blades, earning 1.2 billion dollars in profit on them. Its razors are not just more popular than the competition's - Gillette has sixty-six per cent of the male shaving market, and seventy percent of the female market - but also more expensive.

The great virtue of making top of the line razors, as opposed to top of the line cars, is, after all, that a hefty profit hike for the company - Gillette will charge thirty five per ccent more for Mach 3 than for SensorExcel - doesn't much register with customers. Indeed, in the course of its massive consumer testing of Mach 3, Gillette found that people said, in effect, "Twenty five per cent, thirty five percent - what's the difference? Just give us the razor."

Darman mentions this, then levels his eyes at me as if he were about to divulge the seccrets of the temple. "Look, everybody else out there is lower - priced," he says. "We're not doing this out of the goodness of our hearts. We're saying we'll deliver performance and ask you to pay a higher price." As his pen races across a white notepad, he shows me that since Gillette's newest razor costs more than its predecessors, the company makes an additional profit for every Gillette customer that it can persuade to upgrade. Even more profitable, of course, are converts from disposables or from Gillette's competitors. He glances at the figures on his notepad, and his face opens into a grin. "You know," he says, as if only now making the happy discover, "this is a very profitable business."

*Dom's note: Patton was a great US General who fought in WW II. A great tactical mind, he led the US troups through enemy territory quicker than any other general in world history. His life is documented in the seven academy award winning film, PATTON. It's worth getting it out on video.

**Dom's note: Due to the New Yorker's US bias, it forgot to note that Baalbek Bakeries makes the statement about "most popular" and "best" apply not exclusively to Gillette.