tom peters’ seminar2002 we are in a brawl with no rules! bnp paribas/05.30.2002
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Tom Peters’ Seminar2002
We Are In A Brawl With No
Rules!BNP Paribas/05.30.2002
All Slides Available at …
tompeters.com
Note: Lavender text in this file is a link.
CONTEXT
Confusion Reigns.
“There will be more
confusion in the business world in the next decade than in any decade in history. And the current pace of
change will only accelerate.”Steve Case
Way to Go, Jerry et al.: 2002 write
downs from recent acquisitions …
$1,000,000,000,
000**$1 trillion (Source: Harper’s Index 04.2002)
“When asked to name just one big merger that had lived up to expectations, Leon
Cooperman, former cochairman of Goldman Sachs’ Investment Policy
Committee, answered: I’m sure there are success stories
out there, but at this moment I draw a blank.”
Mark Sirower, The Synergy Trap
Business …
On The Ropes: ($5T)
… Dot-Com Mania … Enron … Andersen … Merrill Lynch …
AOL Time Warner … Bernie E.
Wall Street Credibility: 0
The Destruction Imperative.
Forget>“Learn”
“The problem is never how to get new, innovative
thoughts into your mind,
but how to get the old ones out.”
Dee Hock
Forbes100 from 1917 to 1987: 39 members of the Class of ’17 were alive
in ’87; 18 in ’87 F100; 18 F100 “survivors” underperformed the market
by 20%; just 2 (2%), GE & Kodak, outperformed the market 1917 to 1987.
S&P 500 from 1957 to 1997: 74 members of the Class of ’57 were
alive in ’97; 12 (2.4%) of 500 outperformed the market from 1957 to 1997.
Source: Dick Foster & Sarah Kaplan, Creative Destruction: Why Companies That Are Built to Last Underperform the Market
“Good management was the most powerful reason [leading firms] failed to stay atop their industries. Precisely because these firms
listened to their customers, invested aggressively in technologies that would provide their customers more
and better products of the sort they wanted, and because they carefully studied market trends and
systematically allocated investment capital to innovations that promised the best returns, they lost
their positions of leadership.”
Clayton Christensen, The Innovator’s Dilemma
W.I.W.?
20 of 26(7 of top 10*)
*P&G: Declining domestic sales in 20 of 26 categories; 7 of top 10
categories. (The “billion-dollar” problem.)
Source: Advertising Age 01.21.2002/BofA Securities
Primary Obstacles to “Marketing-driven Change”
1. Fear of “cannibalism.”2. “Excessive cult of the consumer”/ “customer driven”/ “slavery to demographics, market research and focus groups.”3.Creating “sustainable advantage.” Source: John-Marie Dru, Disruption
“Chivalry is dead. The new code of conduct is an active strategy of disrupting the status quo
to create an unsustainable series of competitive advantages. This is not an age of defensive
castles, moats and armor. It is rather an age of cunning, speed and surprise. It may be hard for some to hang up the chain mail of ‘sustainable
advantage’ after so many battles. But hypercompetition, a state in which sustainable advantages are no longer possible, is now the
only level of competition.”
Rich D’Aveni, Hypercompetition: Managing the Dynamics of Strategic Maneuvering
“They [consumer goods company] have acquired a bunch of products, which is what everyone is doing. But what’s the point, the
message, the story line, the Big Idea that makes ‘it’ all hang together?”—Exec,
major consumer goods company
“Acquisitions are about buying market share.
Our challenge is to create markets. There is a big difference.”
Peter Job, CEO, Reuters
“Active mutators in placid times tend to die off. They
are selected against. Reluctant mutators in
quickly changing times are also selected against.”
Carl Sagan & Ann Druyan, Shadows of Forgotten Ancestors
The Gales of Creative Destruction
+29M = -44M + 73M
+4M = +4M - 0M
Jim & Tom. Joined at the
hip. Not.
Built to Last v. Built to Flip
“The problem with Built to Last is that it’s a romantic notion. Large companies are
incapable of ongoing innovation, of ongoing flexibility.”
“Increasingly, successful businesses will be ephemeral. They will be built to yield
something of value – and once that value has been exhausted, they will vanish.”
Fast Company (03-00)
“But what if [former head of strategic planner at Royal Dutch Shell] Arie de Geus is wrong in
suggesting, in The Living Company, that firms should aspire to live forever? Greatness is
fleeting and, for corporations, it will become ever more fleeting. The ultimate aim of a
business organization, an artist, an athlete or a stockbroker may be to explode in a dramatic
frenzy of value creation during a short space of time, rather than to live forever.”
Kjell Nordström and Jonas Ridderstråle, Funky Business
“The difficulties … arise from the inherent conflict between the need to control existing operations and the need to create the kind of environment that will permit new ideas to flourish—and old ones to die a
timely death. … We believe that most corporations will find it impossible to
match or outperform the market without abandoning the assumption of continuity. … The current apocalypse—the transition from a state of continuity to state of discontinuity—has the same suddenness [as the trauma that beset civilization in
1000 A.D.]”
Richard Foster & Sarah Kaplan, “Creative Destruction” (The McKinsey Quarterly)
IS/IT/Web … “On the Bus” or “Off the Bus.”
E.g. …
Jeff Immelt: 75% of “admin, back room, finance” “digitalized” in
3 years.
Source: BW (01.28.02)
IBM’s Project
eLiza!** “Self-bootstrapping”/ “Artilects”
“Unless mankind redesigns itself by changing our DNA through altering our genetic
makeup, computer-generated robots will take
over the world.” —Stephen
Hawking, in the German magazine Focus
100 square feet
Autobytel: $400.
Wal*Mart: 13%.Source: BW(05.13.2002)
“Ebusiness is about rebuilding the organization from the
ground up. Most companies today are not built to exploit the Internet.
Their business processes, their approvals, their hierarchies, the
number of people they employ … all of that is wrong for running an
ebusiness.”
Ray Lane, Kleiner Perkins
RESPONSE
The Heart of the Value Added Revolution:
The “Solutions Imperative.”
Base Case: The Sameness Trap
“While everything may
be better, it is also increasingly the same.”
Paul Goldberger on retail, “The Sameness of Things,” The New York Times
“We make over three new product announcements a
day. Can you remember
them? Our customers can’t!”Carly Fiorina
“The ‘surplus society’ has a surplus of
similar companies, employing
similar people, with similar educational backgrounds, working in
similar jobs, coming up with similar
ideas, producing similar things, with
similar prices and similar quality.”
Kjell Nordström and Jonas Ridderstråle, Funky Business
“Customers will try ‘low cost
providers’ … because the Majors have not
given them any clear reason not to.”
Leading Insurance Industry Analyst
SWA > American +
Continental + Delta + Northwest + United + USAirways.
Source: Boston Globe (12.22.2001)
Getting Beyond Lip Service!
“No longer are we only an insurance provider. Today, we also offer our customers the products and services that help them achieve their dreams, whether it’s financial
security, buying a car, paying for home repairs, or even taking a dream
vacation.”—Martin Feinstein, CEO, Farmers Group
The Big Day!
09.11.2000: HP bids
$18,000,000,000for
PricewaterhouseCoopersconsulting business!
“These days, building the best server isn’t enough. That’s the
price of entry.”Ann Livermore, Hewlett-Packard
Gerstner’s IBM: Systems Integrator of
choice. Global Services:
$35B. Pledge/’99: Business Partner Charter. 72 strategic partners,
aim for 200. Drop many in-house
programs/products. (BW/12.01).
“We want to be the air traffic
controllers of electrons.”
Bob Nardelli, GE Power Systems
Was: Bunch of Guys Who Make Circuit Breakers Division.
Is: GE Industrial Systems.
“UPS wants to take over the sweet spot in the endless loop
of goods, information and capital that all the packages
[it moves] represent.”ecompany.com/06.01 (E.g., UPS Logistics
manages the logistics of 4.5M Ford vehicles, from 21 mfg. sites to 6,000 NA dealers)
Omnicom: 57% (of
$6B) from marketing services
The …
Solutions25.
1. It’s the (OUR!) organization, stupid!2. Friction free! 3. No STOVEPIPES!4. “Stovepiping” is a F.O.—Firing Offense.5. ALL on the web! (ALL = ALL.)6. Open access!6. Project Managers rule! (E.g.: Control the purse strings and evals.)7. VALUE-ADDED RULES! (Services Rule.) (Experiences Rule.) (Brand Rules.)8. SOLUTIONS RULE! (We sell SOLUTIONS. Period. We sell PRODUCTIVITY & PROFITABILITY. Period.)9. Solutions = “Our ‘culture.’ ”10. Partner with B.I.C. (Best-In-Class). Period.
12. All functions contribute equally—IS, HR, Finance, Purchasing, Engineering, Logistics, Sales, Etc.13. Project Management can come from any function.14. WE ARE ALL IN SALES. PERIOD.15. We all invest in “wiring” the customer organization.16. WE ALL “LIVE THE BRAND.” (Brand = Solutions. That MAKE MONEY FOR OUR CUSTOMER- PARTNER.)17. We use the word “PARTNER” until we all want to barf!18. We NEVER BLAME other parts of our organization for screw-ups.19. WE AIM TO REINVENT THIS INDUSTRY!20. We hate the word-idea “COMMODITY.”
21. We believe in “High tech, High touch.”22. We are DREAMERS.23. We deliver . (PROFITS.) (CUSTOMER SUCCESS.)24. If we play the “SOLUTIONS GAME” brilliantly, no one can touch us!25. Our TEAM needs 100% I.C.s (Imaginative Contributors). This is the ULTIMATE “All Hands” affair!
“In an era when terrorists use satellite phones and encrypted email, US gatekeepers stand
armed against them with pencils and paperwork, and archaic computer systems that don’t
talk to each other.”Boston Globe (09.30.2001)
“Once devised in Riyadh, the tasking order took hours to get to the Navy’s six aircraft carriers—because the
Navy had failed years earlier to procure the proper communications gear that would have connected the
Navy with its Air Force counterparts. … To compensate for the lack of communications capability, the Navy was forced to fly a daily cargo mission from
the Persian Gulf and Red Sea to Riyadh in order to pick up a computer printout of the air mission tasking
order, then fly back to the carriers, run photocopy machines at full tilt, and distribute the documents to the air wing squadrons that were planning the next
strike.” –Bill Owens, Lifting the Fog of War
Innovation & Speed’s “New Basics”*
1. XFTs are the “culture.”2. Project-centric. 3. Open “talent market.”4. “Cause-based” projects. 5. Ubiquitous “open systems” IS—at home & throughout supply chain. Web based.6. F-L-A-T.
*Innovation, Speed, CRM, “Experience”/ “Solution” demand this
PSF Unbound+: It’s the
EXPERIENCE.
“Experiences are as distinct from services as services are from
goods.”Joseph Pine & James Gilmore, The Experience Economy:
Work Is Theatre & Every Business a Stage
Experience: “Rebel Lifestyle!”
“What we sell is the ability for a 43-year-old accountant to dress in black leather, ride
through small towns and have people be afraid of him.”
Harley exec, quoted in Results-Based Leadership
“Club Med is more than just a ‘resort’; it’s a means of rediscovering oneself, of inventing an
entirely new ‘me.’ ”
Source: Jean-Marie Dru, Disruption
“Guinness as a brand is all about community.
It’s about bringing people together and sharing
stories.”—Ralph Ardill, Imagination, in re Guinness Storehouse
The “Experience Ladder”
Experiences Services
Goods Raw Materials
1940: Cake from flour, sugar (raw materials economy): $1.00
1955: Cake from Cake mix (goods economy): $2.00
1970: Bakery-made cake (service economy): $10.00
1990: Party @ Chuck E. Cheese (experience economy) $100.00
Message:
“Experience” is the
“Last 80%”
P.S.: “Experience” applies to all work!
1940: Cake from flour, sugar (raw materials economy): $1.00
1955: Cake from Cake mix (goods economy): $2.00
1970: Bakery-made cake (service
economy): $10.001990: Party @ Chuck E. Cheese
(experience economy) $100.00
Bob Lutz: “I see us as being in the art business. Art,
entertainment and mobile sculpture, which,
coincidentally, also happens to provide transportation.”
Source: NYT 10.19.01
It’s All About EXPERIENCES: “Trapper” to “Wildlife Damage-control Professional”
Trapper: <$20 per beaver pelt.
WDCP: $150/“problem beaver”; $750-$1,000 for flood-control
piping … so that beavers can stay.
Source: WSJ/05.21.2002
It all adds up to …
THE BRAND.
The Heart of Branding …
“WHO ARE WE?”
“We are in the twilight of a society based on data. As information and intelligence become the domain of computers, society will place more value on the one human ability that cannot be automated: emotion.
Imagination, myth, ritual—the language of emotion—will affect everything from our purchasing decisions
to how we work with others. Companies will thrive on the basis of their stories and myths. Companies will need to understand
that their products are less important than their stories.”
Rolf Jensen, Copenhagen Institute for Future Studies
“WHAT’S OUR
STORY?”
“Most companies tend to equate branding with the company’s marketing. Design a new marketing
campaign and, voilà, you’re on course. They are wrong. The task is much bigger. It is about fulfilling our potential … not about a new logo, no matter how
clever. WHAT IS MY MISSION IN LIFE? WHAT DO I WANT TO CONVEY TO PEOPLE? HOW DO
I MAKE SURE THAT WHAT I HAVE TO OFFER THE WORLD IS ACTUALLY UNIQUE? The brand has to give of itself, the company has to give of itself, the management has to give of itself. To
put it bluntly, it is a matter of whether – or not – you want to be … UNIQUE … NOW.”
Jesper Kunde, A Unique Moment
“Apple opposes, IBM solves, Nike exhorts,
Virgin enlightens, Sony dreams, Benetton
protests. … Brands are not nouns but verbs.”
Source: Jean-Marie Dru, Disruption
“EXACTLY HOW ARE WE
DRAMATICALLY DIFFERENT?”
1st Law Mktg Physics: OVERT BENEFIT (Focus: 1 or 2 > 3 or 4/“One Great Thing.” Source #1: Personal Passion)
2ND Law: REAL REASON TO BELIEVE (Stand & Deliver!)
3RD Law: DRAMATIC DIFFERENCE (Execs Don’t Get It.)
Source: Jump Start Your Business Brain, Doug Hall
“You do not merely want to be the best of the best. You
want to be considered the only ones who do
what you do.”
Jerry Garcia
“A great company is defined by the
fact that it is not compared
to its peers.”Phil Purcell, Morgan Stanley
“EXACTLY HOW DO I PASSIONATELY CONVEY THAT
DRAMATIC DIFFERENCE TO THE
CLIENT ?”
THE WORK
Redefining the Work Itself I:
The WOW Project.
“Reward excellent failures. Punish
mediocre successes.”
Phil Daniels, Sydney exec
The greatest dangerfor most of us
is not that our aim istoo high
and we miss it,but that it is
too lowand we reach it.
Michelangelo
THE TALENT
Brand = Talent.*
*Duh.
“The leaders of Great Groups love talent and know where to find it. They revel in
the talent of others.”Warren Bennis & Patricia Ward Biederman,
Organizing Genius
Model 25/8/53
Sports Franchise GM
From “1, 2 or you’re out” [JW] to …
“Best Talent in each industry segment to build
best proprietary intangibles” [EM]
Source: Ed Michaels, War for Talent
Message: Some people are better than other
people. Some people are a helluva lot better than other
people.
“AS LEADERS, WOMEN RULE: New Studies find that female managers
outshine their male counterparts in almost
every measure”Title, Special Report, Business Week, 11.20.00
“TAKE THIS QUICK QUIZ: Who manages more things at once? Who puts more effort into their appearance? Who usually takes care of the details? Who finds it
easier to meet new people? Who asks more questions in a conversation? Who is a better
listener? Who has more interest in communication skills? Who is more inclined to get involved?
Who encourages harmony and agreement? Who has better intuition? Who works with a longer ‘to do’ list? Who enjoys a recap to the day’s events? Who is
better at keeping in touch with others?”
Source: Selling Is a Woman’s Game: 15 Powerful Reasons Why Women Can Outsell Men, Nicki Joy & Susan Kane-Benson
“Investors are looking more and more for a relationship with their financial
advisers. They want someone they can trust, someone who listens. In my experience, in general,
women may be better at these relationship-building skills than are
men.”
Hardwick Simmons, CEO, Prudential Securities
The Cracked Ones Let in the Light
“Our business needs a massive transfusion of talent, and talent, I believe, is most likely to be found
among non-conformists, dissenters and rebels.”
David Ogilvy
“Are there enough weird people in
the lab these days?”V. Chmn., pharmaceutical house, to a lab director (06.01)
“The A students work
for the B students. The
C students run the
business. The D students dedicate the buildings.” —Assertion to Kinko’s founder
Paul Orfalea from his Mom (Fortune/05.13.02)
BOTTOM LINE: LEADING IN
TOTALLY SCREWED- UP TIMES
The Basic Premise.
1. Leadership Is a …
Mutual Discovery Process.
“I don’t know.”
2. Leaders Try … Not to Screw Things
Up
“Ninety percent of what we call ‘management’ consists of making it
difficult for people to get things done.” —P.D.
The Leadership
Types.
3. Great Leaders on Snorting
Steeds Are Important – but
Great Talent Developers (Type I
Leadership) are the Bedrock of Organizations that Perform Over
the Long Haul.
Whoops: Jack didn’t have a vision!
4. But Then Again, There Are Times When This “Cult of Personality”
(Type II Leadership) Stuff Actually Works!
“A leader is a dealer in hope.”
Napoleon
(+TP’s writing room pics)
5. The Leader Is Rarely/Never the Best Performer.
33 Division Titles. 26 League Pennants. 14
World Series: Earl Weaver—0. Tom Kelly—0. Jim Leyland—0.
Walter Alston—1AB. Tony LaRussa—132 games, 6 seasons. Tommy Lasorda—P, 26 games. Sparky
Anderson—1 season.
The Leadership
Dance.
6. Leaders …
SHOW UP!
Rudy!
7. Leaders … LOVE the
MESS!
“I’m not comfortable unless
I’m uncomfortable.”—Jay Chiat
8. Leaders
DO!
The Kotler Doctrine:
1965-1980: R.A.F.(Ready.Aim.Fire.)
1980-1995: R.F.A.(Ready.Fire!Aim.)
1995-????: F.F.F.(Fire!Fire!Fire!)
9. Leaders
Re-do.
“If Microsoft is good at anything, it’s avoiding the trap of worrying about criticism. Microsoft fails constantly.
They’re eviscerated in public for lousy
products. Yet they persist, through version after version, until they get
something good enough. Then they leverage the power they’ve gained in
other markets to enforce their standard.”Seth Godin, Zooming
“If it works, it’s
obsolete.”
—Marshall McLuhan
10. BUT … Leaders
Know When to Wait.
Tex Schramm: The
“too hard” box!
11. Leaders
KNOW They Can Make a Difference!
“It is no use saying ‘We are doing our best.’ You have got to succeed in doing
what is necessary.” —WSC
12. Leaders
FOCUS!
“To Don’t ” List
Danger: S.I.O. (Strategic
Initiative Overload)
JackWorld/1@T: (1) Neutron Jack. (Banish bureaucracy.) (2) “1, 2 or out” Jack. (Lead or leave.) (3)
“Workout” Jack. (Empowerment,
GE style.) (4) 6-Sigma Jack. (5)
Internet Jack. (Throughout)
TALENT JACK!
If It Ain’t Broke … Break It.
13. Leaders …FORGET!/
Leaders … DESTROY!
Cortez!
Leaders “dump the ones who brung ’em” —Nokia, HP, 3M, PerkinElmer, Corning, etc.
14. BUT … Leaders
Have to Deliver, So They Worry About “Throwing the Baby Out with the
Bathwater.”
“Damned If You Do, Damned If You Don’t, Just Plain
Damned.”Subtitle in the chapter, “Own Up to the Great Paradox: Success
Is the Product of Deep Grooves/ Deep Grooves Destroy Adaptivity,” Liberation Management (1992)
“Organize” for … performance & customer satisfaction.
“Disorganize” for … renewal & innovation.
15. Leaders Make [Lotsa] Mistakes
– and MAKE NO BONES ABOUT IT!
Sam’s
Secret #1!
Talent.
16. When It Comes to
TALENT … Leaders Always Swing
for the Fences!
From “1, 2 or you’re out” [JW] to …
“Best Talent in each industry segment to build
best proprietary intangibles” [EM]
Source: Ed Michaels, War for Talent (05.17.00)
Passion.
17. Leaders …
Out Their
PASSION!
G.H.: “Create a ‘cause,’ not a ‘business.’ ”
The “Job” of Leading.
18. Leadership Is a …
Performance.
“It is necessary for the President to be the
nation’s No. 1 actor.”
FDR
19. Leaders …
Have a GREAT STORY!
“A key – perhaps the key – to leadership is the effective
communication of a story.”
Howard Gardner Leading Minds: An Anatomy of Leadership
Leaders don’t just make products and make decisions.
Leaders make meaning. – John Seeley Brown
Introspection.
20. Leaders …
Enjoy Leading.
“Warren, I know you want to ‘be’
president. But do you want to ‘do’
president?”
21. Leaders … Take Breaks.
Zombie!Zombie!Zombie!Zombie!
The End Game.
22. Leaders ???
:
“Leadership is the PROCESS of
ENGAGING PEOPLE in CREATING a LEGACY
of EXCELLENCE.”
“Hire smart – go bonkers – have grace – make mistakes – love technology – start all
over again.”
“LEADERS NEED TO BE THE ROCK OF
GIBRALTAR ON ROLLER BLADES”
Thank You!
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