excellence. always. long tom peters’ excellence. always. xalways/austin/07 september 2006

LONG

Tom Peters’

EXCELLENCEXCELLENCE. ALWAYS.E. ALWAYS.XAlways/Austin/07 September 2006

tompeters.comtompeters.com

EXCELLENCE.

ALL YOU NEED TO KNOW.

ExecutionExecution. (Discipline.)Accountability.Accountability.

Action, a Bias for.Action, a Bias for. (S.A.V./R.F.A.)Relentless.Relentless.

Experimentation.Experimentation. (“Innovate or Die.” “He who makes …”)Adaptability.Adaptability. (Plan B; “We eat …”)

“In the moment.”“In the moment.” (Bertolucci.)Senility.Senility.

Exuberance.Exuberance.Fun.Fun.

Technicolor. Wow!Wow! (Extreme Language.)Quest-Adventure.Quest-Adventure.

By Invitation.By Invitation.Talent. Roster.Talent. Roster. ($21M.)

Weird.Weird. (Hangin’ Out + Bottlenecks.)D-squared/“Dramatic Difference.”Dramatic Difference.”

Up-Up-Up the “VA Ladder.”Up-Up-Up the “VA Ladder.” Trifecta: Wow Projects-Brand You-PSF.Trifecta: Wow Projects-Brand You-PSF. (No Option.)

Design.Design.Women.Women.

4-404-40/D.E.A.615. (60TIBs; IRR209.)EXCELLENCE.EXCELLENCE.

That’s a

BigBig Number

….

THREE THREE BILLIONBILLION NEW NEW CAPITALISTSCAPITALISTS

—Clyde Prestowitz

“There is no job that

is America’s God-given

right anymore.”

—Carly Fiorina/HP/January2004

“Deutsche Bank Moves Half of Its Back-office Jobs to India”/

headline/FT/0327 (500 (500 of 900 of 900

Research)Research)

EXCELLENCE.

MANDATE.

““If you don’t If you don’t like change, like change,

you’re going to you’re going to like like irrelevanceirrelevance even less.”even less.” —General Eric

Shinseki, Chief of Staff. U. S. Army

“It is not the strongest of the

species that survives, nor the most intelligent, but the one most

responsive to change.” —Charles Darwin

“Forbes100” from 1917 to 1987: 39 members of the Class of ’17 were alive

in ’87; 18 in ’87 F100; 18 F100 “survivors” significantly

underperformed the market;

just 2 (2%), GE & Kodak, outperformed the market from

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

“It is generally much easier to kill an kill an

organizationorganization than change it

substantially.” —Kevin Kelly, Out of Control

(Practical) ImplicationImplication?

“Go for it!”“Go for it!” (Why not—

alternative is slow death, at best)

C.E.O. to

C.D.O.

Joe J. Jones Joe J. Jones 1942 – 2006 1942 – 2006

HE WOULDA DONE SOME HE WOULDA DONE SOME

REALLY COOL STUFF REALLY COOL STUFF

BUT …BUT …

HIS BOSS WOULDN’T LET HIM! HIS BOSS WOULDN’T LET HIM!

““We are in a We are in a brawl with no brawl with no

rules.”rules.” —Paul Allaire

S.A.V.S.A.V.

“The Silicon Valley of today is built less atop

the spires of earlier triumphs than upon the

rubble of earlier debacles.” —Newsweek/Paul Saffo

TP#1*:

NetscapeNetscape!!

*Where would you rather have worked for those 5 years, Netscape or IBM-HP-Microsoft-Oracle? (Where, 25 years from now, would you

rather to be able to tell someone—e.g., grandchild—that you worked?)

““Wealth in this new regime Wealth in this new regime flows directly from innovation, flows directly from innovation,

not optimization. That is, not optimization. That is, wealth is not gained by wealth is not gained by

perfecting the known, perfecting the known, but by but by imperfectly seizing the imperfectly seizing the unknown.”unknown.” —Kevin Kelly, New Rules for

the New Economy

New Economy?!

Sergey + Sergey + Larry Larry > >

Harvard/Harvard/370370

EXCELLENCE. STARTERS.HORRORS.

Franchise Lost!

TP: “How many of you [600] really

cravecrave a new Chevy?”

“Ford, GM and Chrysler do not just make cars expensively … they make bad

cars expensively.” —

Investec analyst, International Herald, 0805.06

Sluggish + Obese + Unimaginative + More

Sluggish + More Obese + More Unimaginative + Even More Sluggish + Even More

Obese + Even More

Unimaginative = NISSAN + RENAULT + GM = Innovative Challenger for

Toyota????

Oh, Great …

Ford: Airplane

guy.GM: CFO.

Small cars HQ: LA. Big cars HQ: Dallas. Corporate HQ: Atlanta.

CEO: Roger Enrico or Lou Gerstner or Meg Whitman. COO: Bob Nardelli.

Chairman: George Steinbrenner or Jack Welch or Ross Perot. Vice-chairman

& CFO: Warren Buffett.

Chief Marketing Officer: Brenda Barnes. Chief Branding Officer: Phil Knight

(or Howard Schultz). Chief Innovation Officer: Steve Jobs or Jeff Immelt. Chief/Supply Chain: Raid Wal*Mart or CostCo or Dell. Chief/Dealer

Relations: Carl Sewell.

EXCELLENCE. STARTERS.

BASICS.

Did one of ’em ever turn to the other and say: “Wow, “Wow,

I wonder what I wonder what unimaginable new unimaginable new

tools, tools, otherwise not otherwise not ppossibleossible, will be , will be

brought forth brought forth for mfor myy daudaugghter Alice, ahter Alice, agge e

1717, because, because of this deal?” of this deal?”

People.Product.Clients.

Execution.Enthusiasm. Excellence.



Relentlessness.



Relentlessness. Senility

Wanted* ** : Corporate Corporate Senility!Senility!

*Desperately!** “The problem is never how to get new, innovative thoughts into your mind, but how to get the old ones out.” —Dee Hock

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

People.Product.

Customers. Execution.Enthusiasm. Excellence.

Relentlessness. Senility

EXCELLENCE. THE WORD.

Synonyms

PurityTranscendence

VirtueEleganceMajesty

Antonyms

Mediocrity

EXCELLENCE.

GAMECHANGER.

Excellence1982: The Bedrock “Eight Basics”

1. A Bias for Action1. A Bias for Action2. Close to the Customer2. Close to the Customer3. Autonomy and 3. Autonomy and EntrepreneurshipEntrepreneurship4. Productivity Through People4. Productivity Through People5. Hands On, Value-Driven5. Hands On, Value-Driven6. Stick to the Knitting6. Stick to the Knitting7. Simple Form, Lean Staff7. Simple Form, Lean Staff8. Simultaneous Loose-Tight8. Simultaneous Loose-Tight Properties” Properties”

ExIn*: 1982-2002/Forbes.com

DJIA: $10,000 yields $85,000 EI: $10,000 yields $140,050

*Forbes/Excellence Index /Basket of 32 publicly traded stocks

EXCELLENCE.

ALWAYS.

““Why in the Why in the world did world did you go to you go to SSiberiaiberia?”?”

The Peters Principles: Enthusiasm.

Emotion. Excellence. Energy. Excitement. Service. Growth.

Creativity. Imagination. Vitality. Joy. Surprise. Independence. Spirit. Community. Limitless human potential. Diversity. Profit. Innovation. Design.

Quality. Entrepreneurialism. Wow.

Business* ** (*at its best): An emotional, vital, innovative, joyful,

creative, entrepreneurial endeavor that elicits

maximum concerted human potential in the

wholehearted service of others.***

**Excellence. Always.***Employees, Customers, Suppliers, Communities, Owners, Temporary partners

EXCELLENCE.

DEFINED.

Great Companies … SETSET THETHE

AGENDAAGENDA.*

(PERIOD.)

* “disturb the sleep of …

AGENDA SETTERS: “Set the Table”/ Pioneers/ Questors/ Adventurers

US Steel … Ford … Toyota … Sears … GM … ITT … The Gap … Limited …

Wal*Mart … Tesco … P&G … 3M … Intel … IBM … Apple … Nokia …

Cisco … Dell … MCI … Sun … Microsoft … Google … Enron …

Schwab … GE … Laker … Southwest … People Express … Ogilvy … Virgin

… eBay … Amazon … Sony … Amgen … BMW … CNN … Nike

Built to Last vs Built for Impact

“But what if [former head of strategic planning 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

EXCELLENCE.

VALUE ADDED.UP THE LADDER.

EXCELLENCE I.

SOLVE IT.

$55$55BB

“Big Brown’s New Bag: UPS

Aims to Be theAims to Be the Traffic Traffic Manager for Manager for CorCorpporate orate

AmericaAmerica”” —Headline/BW/2004

EXCELLENCE.NECESSITY.

OPPORTUNITY.

EXCELLENCE.

SOLVE IT. NO OPTION.PSF. (PSF++)

“ ‘Disintermediation’ is overrated. Those who fear disintermediation should in fact be afraid of

irrelevance—disintermediation is just another way

of saying that … you’ve become

irrelevant to your

customers.”

—John Battelle/Point/Advertising Age/07.05

Chicago:

HRMAC

“support function” / “cost

center”/ “overhead”

or …

Are you … ““Rock Rock Stars of the Stars of the

AAgge of Talente of Talent””

Department Head

to …

Managing

Partner, IS [HR, R&D, etc.] Inc.

Core Mechanism:“Game-changing Solutions”

PSFPSF (Professional Service Firm “model”/The Organizing Principle)

+

Brand YouBrand You(“Distinct” or “Extinct”/The Talent)

+

Wow! ProjectsWow! Projects (“Different” vs “Better”/The Work)

Are you the …

““PrinciPrincippal al EnEnggineine of of

Value Added”Value Added”*E.g.: Your R&D budget as robust as the New Products team?

Up, Up, Up,

Up

the Value-added Ladder.

The Value-added Ladder/Stuff ‘n’ Things

Goods Raw Materials

The Value-added Ladder/Stuff & Transactions

ServicesGoods

Raw Materials

The Value-added Ladder/Opportunity-seeking

Gamechanging Gamechanging SolutionsSolutions

ServicesGoods

Raw Materials

EXCELLENCE.

EXPERIENCE IT.

“Experiences are as distinct

from services as services are from

goods.” —Joe Pine & Jim Gilmore, The Experience Economy:

Work Is Theatre & Every Business a Stage

“The [Starbucks] Fix” Is on …

“We have identified a

‘third place.’ And I

really believe that sets us apart. The third place is that place that’s not work or home. It’s the place our customers

come for refuge.”

Nancy Orsolini, District Manager

The Value-added Ladder/Memorable Connection

Spellbinding Spellbinding ExperiencesExperiences

Gamechanging SolutionsServicesGoods

Raw Materials

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

CCXXOO**Chief eXperience Officer

$79$7988

$415/SqFt/Wal*Mart$798/SqFt/Whole

Foods

Summary:

WallopWal*Mart16*

*Or: Why it’s so absurdly easy to beat a GIANT Company

The “Small Guys” Guide: Wallop Wal*Mart16

*Niche-aimed. (Never, ever “all things for all people,” a “mini-Wal*Mart.)

*Never attack the monsters head on! (Instead steal niche business and lukewarm customers.)

*“Dramatically Different” (La Difference ... within our community,

our industry regionally, etc … is as obvious as the end of one’s nose!) (THIS IS WHERE MOST MIDGETS COME UP SHORT.)

*Compete on value/experience/intimacy, not price. (You ain’t gonna beat the behemoths on cost-price in 9.99 out of 10 cases.)

*Emotional bond with Clients, Vendors. (BEAT THE BIGGIES ON EMOTION/CONNECTION!!)

The Small*Mart Revolution: How Local Businesses Are Beating Local

Competition —Michael Shuman

EXCELLENCE.

DREAM IT.

Furniture vs. Dreams

“We do not sell ‘furniture’ at

Domain. We sell dreams. This is

accomplished by addressing the half-formed needs in our

customers’ heads. By uncovering these needs, we, in essence, fill in the blanks. We

convert ‘needs’ into ‘dreams.’ Sales are the

inevitable result.” — Judy George,

Domain Home Fashions

The Value-added Ladder/Emotion

Dreams Come Dreams Come TrueTrue

Spellbinding Experiences Gamechanging Solutions

ServicesGoods

Raw Materials

CCDMDM*

*Chief Dream Merchant

Big Blue

EXCELLENCE.

LOVE IT.

Kevin Roberts:

LovemarLovemar

ksks!!

Top 10 “Tattoo Brands”*

Harley .… 18.9%Harley .… 18.9%Disney .... 14.8Disney .... 14.8

Coke …. 7.7Coke …. 7.7Google .... 6.6Google .... 6.6Pepsi .... 6.1Pepsi .... 6.1Rolex …. 5.6Rolex …. 5.6Nike …. 4.6Nike …. 4.6

Adidas …. 3.1Adidas …. 3.1Absolut …. 2.6Absolut …. 2.6

Nintendo …. 1.5Nintendo …. 1.5

*BRANDsense: Build Powerful Brands through Touch, Taste, Smell, Sight, and Sound, Martin Lindstrom

LovemarkLovemark Dreams Come True

Spellbinding ExperiencesGamechanging Solutions

ServicesGoods

Raw Materials

Ladder2006: 4 of 7!

Lovemark Lovemark Dreams Come TrueDreams Come True

Spellbinding Experiences Spellbinding ExperiencesGamechanging SolutionsGamechanging Solutions

ServicesGoods

Raw Materials

EXCELLENCE.

SOUL.DESIGN.

All Equal Except …

“At Sony we assume that all products of our competitors

have basically the same technology, price, performance

and features. DesiDesiggn is the n is the onlonlyy thin thingg that that

differentiates one differentiates one pproduct from another roduct from another in the marketin the marketpplacelace.”.” —

Norio Ohga

“We don’t have a good language to talk about this kind of thing. In

most people’s vocabularies, design means veneer. … But to me, nothing could be further from the meaning

of design. Design is the Design is the fundamentalfundamental soulsoul

of a man-made of a man-made creation.”creation.” —Steve Jobs

Kevin Roberts:

LovemarLovemar

ksks!!

CCDDOO**Chief Design Officer

EXCELLENCE.NEW VALUE EQUATION. NEW “C-levels”.

CRO*

*Chief Revenue Officer

CCXXOO**Chief eXperience Officer

CCFFOO*

*Chief Festivals Officer

CCCCOO*

*Chief Conversations Officer

CCPIPI**Chief Portal Impresario

CCDMDM*

*Chief Dream Merchant

CCLL OO*

*Chief Lovemark Officer

CCSSOO*

*Chief Seduction Officer

CCSTSTOO*

*Chief Storytelling Officer

CCDDOO**Chief Design Officer

CCfafaOO*

*Chief freaks acquisition Officer

CCQQOO*

*Chief quest-meister

CCTTOO**Chief Thrills Officer

CCWWOO**Chief WOW Officer

CC!!OO**Chief ! Officer

EXCELLENCE. EVERYWHERE.

New ZealandSpain

PortugalItaly

IrelandSingapore

TaiwanThailandMalaysia

SINGAPORE Philippines

UAEOmanChile

Romania

Better By Design: A National Strategy

NZ = NZ = Design Design

ExcellenceExcellence

EXCELLENCE.CENTURY 21.

EMPIRES OF THE MIND.RICHARD FLORIDA.

JUAN ENRIQUEZ.

““HumanHuman creativity is the creativity is the

ultimate ultimate economic economic

resource.”resource.” —Richard Florida, The Rise of the Creative Class

““THE FUTURE BELONGS THE FUTURE BELONGS TO … SMALL TO … SMALL

POPULATIONS … WHO POPULATIONS … WHO BUILD BUILD EMPIRESEMPIRES OF THEOF THE

MINDMIND … AND WHO IGNORE THE TEMPTATION OF—OR DO NOT HAVE THE

OPTION OF—EXPLOITING NATURAL RESOURCES.”

Source: Juan Enriquez/As the Future Catches You

Creativity Index:

The 3 T’sThe 3 T’sTTechnologyechnology (HT Index/firms & $$$,

Innovation Index/patent growth)

TTalentalent (% with bachelors degrees+)

TToleranceolerance (Melting Pot Index/foreigners,

Bohemian Index/artists et al., Gay Index/rel. #s)

Source: Richard Florida, The Rise of the Creative Class

U.S. Historical Strength: Invest in Creativity

*Foster new industries*Foster new industries

*Free & open society*Free & open society

*Investment higher ed,*Investment higher ed, R & D, culture R & D, culture

*Immigrants*Immigrants


Models Of Economic Development

*Firm-drivenFirm-driven (attract firms)

*Social CapitalSocial Capital (trust & community-connectedness)

*Human CapitalHuman Capital (# educated people)

*CreativeCreative CaCappitalital (Florida)


CI/Top10 Metro*: Austin, SF, Austin, SF, Seattle, Boston, Raleigh-Seattle, Boston, Raleigh-

Durham, Portland, Durham, Portland, Minneapolis, Washington-Minneapolis, Washington-Baltimore, Sacramento, Baltimore, Sacramento,

DenverDenver

CI/Bottom10: Detroit, Norfolk, Cleveland, Milwaukee, Grand Rapids, Memphis, Jacksonville, Greensboro, New Orleans, Buffalo, Louisville

*> 1M/49 totalSource: Richard Florida, The Rise of the Creative Class

““The extraordinary Tech Revolution …The extraordinary Tech Revolution …

Is fed by a very few ZIP codesIs fed by a very few ZIP codes … …Generating New Empires …Generating New Empires …(and new Ghettoes).”(and new Ghettoes).”

Source: Juan Enriquez/As the Future Catches You

“The global talent pool and the high-end, high margin creative industries that used to be the sole province of the U.S., and a critical source of its

prosperity, have begun to disperse around the globe. A host of countries—Ireland, Finland, Canada, Australia, New Zealand, among them—are investing

in higher education, cultivating creative people, and churning out stellar products, from Nokia phones to the Lord of the Rings movies.. Many of these countries have learned from past U.S. success and are shoring up efforts to

attract foreign talent—including Americans. … The United States may well be the Goliath of the twentieth century global economy, but it will take just half a

dozen twenty-first-century Davids to begin to wear it down. To stay To stay innovative, America must continue to attract the innovative, America must continue to attract the world’s sharpest minds. And to do that, it needs world’s sharpest minds. And to do that, it needs

to invest in the further development of its to invest in the further development of its creative sector. Because wherever creativity creative sector. Because wherever creativity

goes—and, by extension, wherever talent goes—goes—and, by extension, wherever talent goes—innovation and economic growth are sure to innovation and economic growth are sure to followfollow.”.” —“America’s Looming Creativity Crisis”/Richard

Florida/HBR/10.04

The Memphis Manifesto*: Building a Community of Ideas

1. Cultivate & reward creativity.1. Cultivate & reward creativity.2. Invest in the creative ecosystem.2. Invest in the creative ecosystem.3. Embrace diversity.3. Embrace diversity.4. Nurture the creatives.4. Nurture the creatives.5. Value risk-taking.5. Value risk-taking.6. Be authentic (emphasize uniqueness)6. Be authentic (emphasize uniqueness)7. Invest in and build on quality of place.7. Invest in and build on quality of place.8. Remove barriers to creativity.8. Remove barriers to creativity.9. Take responsibility for change. Development as D.I.Y.9. Take responsibility for change. Development as D.I.Y.10. Ensure that every person, especially children, has10. Ensure that every person, especially children, has the right to creativity. Become a “Steward of the right to creativity. Become a “Steward of creativity.” creativity.”

*2003/The Creative 100/MemphisSource: Richard Florida, The Rise of the Creative Class

“The Creative Age is a wide-open game.”

—Richard Florida, The Rise of the Creative Class

EXCELLENCE.

INNOVATE. OR. DIE.

“A focus on cost-cutting and efficiency has helped many organizations weather the

downturn, but this approach will ultimately

render them obsolete. Only the constant pursuit of

innovation can ensure long-term

success.” —Daniel Muzyka, Dean, Sauder School of Business,

Univ of British Columbia (FT/09.17.04)

“Acquisitions are about buying market share.

Our challenge is to create

markets. There is a big difference.” —Peter Job, CEO, Reuters

Pathetic!

“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

“I am often asked by would-be entrepreneurs seeking escape from life within huge corporate structures, ‘How do I build a small firm for myself?’ The

answer seems obvious: BuBuyy a a ververyy lar largge one e one and and jjust waitust wait.”.”

—Paul Ormerod, Why Most Things Fail: Evolution, Extinction and Economics

Sluggish + Obese + Unimaginative + More

Sluggish + More Obese + More Unimaginative + Even More Sluggish + Even More

Obese + Even More

Unimaginative = NISSAN + RENAULT + GM = Innovative Challenger for

Toyota????

??????????????

Crappy Management (GM) + Arrogant-Overstretched

Management (Carlos G) = Great Management

More than $$$$

#1#1 R&D

spending, last 25 years?

“I don’t believe in

economies of scale. You don’t get better by being bigger. You get worse.” —

Dick Kovacevich/Wells Fargo/Forbes/08.04 (ROA: Wells, 1.7%; Citi, 1.5%; BofA, 1.3%;

J.P. Morgan Chase, 0.9%)

Scale?

“Microsoft’s Struggle With

Scale” —Headline, FT, 09.2005

“Troubling Exits at Microsoft” —Cover Story, BW, 09.2005

“Too Big to Move Fast?” —Headline, BW, 09.2005

Wal*Mart + Home Depot + Walt Disney +

Intel + Microsoft + Pfizer = Flat

Source: “Blue Chip Blues”, Cover, BW, 0417.06

“Almost every personal friend I have in the world works on Wall Street. You can buy and sell the same company six times and everybody makes

money, but I’m not sure we’re actually

innovating. … Our challenge is

to take nanotechnology into the future, to do

personalized medicine …” —Jeff Immelt/2005

What “We” Know “For Sure” About Innovation

Big mergers [by & large] don’t workScale is over-rated

Strategic planning is the last refuge of scoundrelsFocus groups are counter-productive“Built to last” is a chimera (stupid)

Success kills“Forgetting” is impossible

Re-imagine is a charming idea“Orderly innovation process” is an oxymoronic phrase

(= Believed only by morons with ox-like brains)“Tipping points” are easy to identify … long after they will do you any good

“Facts” aren’tAll information making it to the top is filtered

to the point of danger and hilarity“Success stories” are the illusions of egomaniacs (and “gurus”)

If you believe the memoirs of CEOs you should be institutionalized“Herd behavior” (XYZ is “hot”) is ubiquitous

… and amusing“Top teams” are “Dittoheads”

CEOs have little effect on performance“Expert” prediction is rarely better than rolling the dice

““Recently I asked three corporate Recently I asked three corporate executives what decisions they had made executives what decisions they had made in the last year that would not have been in the last year that would not have been

made were it not for their corporate made were it not for their corporate plans. All had difficulty identifying one plans. All had difficulty identifying one such decision. Since all of the plans are such decision. Since all of the plans are marked ‘secret’ or ‘confidential,’ I asked marked ‘secret’ or ‘confidential,’ I asked

them how their competitors might benefit them how their competitors might benefit from possession of their plans. Each from possession of their plans. Each

answered with embarrassment that theiranswered with embarrassment that their competitors would not benefit.”

—Russell Ackoff (from Henry Mintzberg, The Rise and Fall of Strategic Planning)

“ ‘“ ‘GoodGood management’ was management’ was the most powerful reason the most powerful reason [leading firms] failed to [leading firms] failed to

stay atop their industries.stay atop their industries. Precisely because these firms listened to Precisely because these firms listened to their customers, invested aggressively in their customers, invested aggressively in

technologies that would provide their technologies that would provide their customers more and better products of the customers more and better products of the

sort they wanted, and because they sort they wanted, and because they carefully studied market trends and carefully studied market trends and

systematically allocated investment capital systematically allocated investment capital to innovations that promised the best to innovations that promised the best

returns, they lost their positions of returns, they lost their positions of leadership.”leadership.”

—Clayton Christensen, The Innovator’s Dilemma

Inno64: Innovation Strategies & Tactics

Parallel universe /Exec Ed v res MBAEnd run regnant powers/JKCFind done deals-practicing mavericks/Stone-ReGoBell curves2016 in 2006Non-industry benchmarkingEverything = PortfolioV.C.s all!Hot language/Wow-Astonish me-Insanely great-immortal-Make something greatLead customers/PW-EmbraerLead suppliers /Top decile R&DWeird alliancesMottos/Paul Arden (“Whatever You Think Think the Opposite”)Hire freaks/Enough weird people?Weird Boards!!!

InnoTacs

We We becomebecome who we hang who we hang

out with!out with!

Measure “Strangeness”/Portfolio Quality

StaffConsultants

VendorsOut-sourcing Partners (#, Quality)

Innovation Alliance PartnersCustomers

Competitors (who we “benchmark” against)

Strategic Initiatives Product Portfolio (LineEx v. Leap)

IS/IT ProjectsHQ LocationLunch Mates

LanguageBoard

“The Bottleneck

Is at the Top of the

Bottle”“Where are you likely to find people with the least diversity of

experience, the largest investment in the past, and the greatest reverence for industry dogma:

At the top!”

— Gary Hamel/Harvard Business Review

try ittry it

““Experiment Experiment fearlessly”fearlessly”

Source: BW0821.06, Type A Organization Strategies/ “How to Hit a Moving Target”—Tactic #1

““Do it. Do it. Fix it. Fix it. Try it.”Try it.”

Tom Peters/Business Week/07.1978 (Principal #1/first anticipation of “Excellence”)

tolerate tolerate [encourage?] [encourage?]

failurefailure

““Fail . Forward. Fail . Forward. Fast.”Fast.”

High Tech CEO, Pennsylvania

“Fail faster. “Fail faster. Succeed Succeed Sooner.”Sooner.”

David Kelley/IDEO

Sam’s Sam’s Secret Secret

#1!#1!

““RewardReward excellent failures.

PunishPunish mediocre

successes.”Phil Daniels, Sydney exec

raison raison d’etred’etre

“[Immelt] is now identifying technologies with which GE

will … ssyystematicallstematicallyy set out to build set out to build

entirelentirelyy new new industriesindustries”” —Strategy+Business, Fall

2005

EXCELLENCE. INNOVATION. REVOLUTION.

ORGANIZATION.

Excellence: The SE22:

“Origins of Sustainable

Entrepreneurship”

SE22/Origins of Sustainable Entrepreneurship1. Genetically disposed to Innovations that upset apple carts 1. Genetically disposed to Innovations that upset apple carts (3M, Apple, (3M, Apple,

FedEx, Virgin, BMW, Sony, Nike, Schwab, Starbucks, Oracle, Sun,FedEx, Virgin, BMW, Sony, Nike, Schwab, Starbucks, Oracle, Sun, Fox, Stanford University, MIT)Fox, Stanford University, MIT)

2. Perpetually determined to outdo oneself, even to 2. Perpetually determined to outdo oneself, even to the detriment of today’s $$$ winners the detriment of today’s $$$ winners (Apple, Cirque du Soleil, Nokia, FedEx)(Apple, Cirque du Soleil, Nokia, FedEx)

3. Treat History as the Enemy 3. Treat History as the Enemy (GE)(GE)

4. Love the Great Leap/Enjoy the Hunt 4. Love the Great Leap/Enjoy the Hunt (Apple, Oracle, Intel, Nokia, Sony)(Apple, Oracle, Intel, Nokia, Sony)

5. Use “Strategic Thrust Overlays” to Attack Monster Problems 5. Use “Strategic Thrust Overlays” to Attack Monster Problems (Sysco, (Sysco, GSK, GE, Microsoft)GSK, GE, Microsoft)

6. Establish a “Be on the COOL Team” Ethos. 6. Establish a “Be on the COOL Team” Ethos. (Most PSFs, Microsoft)(Most PSFs, Microsoft)

7. Encourage Vigorous Dissent/Genetically “Noisy” 7. Encourage Vigorous Dissent/Genetically “Noisy” (Intel, Apple, (Intel, Apple, Microsoft, CitiGroup, PepsiCo)Microsoft, CitiGroup, PepsiCo)

8. 8. ““CulturallCulturallyy” as well as ” as well as ororgganizationallanizationallyy Decentralized Decentralized

(GE, J&J, Omnicom)(GE, J&J, Omnicom)

9. Multi-entrepreneurship/Many Independent-minded Stars 9. Multi-entrepreneurship/Many Independent-minded Stars (GE,(GE, PepsiCo)PepsiCo)

SE22/Origins of Sustainable Entrepreneurship

10. Keep decentralizing—tireless in pursuit of wiping 10. Keep decentralizing—tireless in pursuit of wiping outout Centralizing Tendencies Centralizing Tendencies (J&J, Virgin)(J&J, Virgin)

11. Scour the world for Ingenious Alliance Partners— 11. Scour the world for Ingenious Alliance Partners— especially exciting start-ups especially exciting start-ups (Pfizer)(Pfizer)

12. Acquire for Innovation, not Market Share 12. Acquire for Innovation, not Market Share (Cisco, GE)(Cisco, GE)

13. Don’t overdo “pursuit of synergy” 13. Don’t overdo “pursuit of synergy” (GE, J&J, Time Warner)(GE, J&J, Time Warner)

14. Execution/Action Bias: Just do it … don’t obsess on14. Execution/Action Bias: Just do it … don’t obsess on how it “fits the business model.”how it “fits the business model.” (3M, J & J) (3M, J & J)

15. Find and Encourage and Promote Strong-willed/15. Find and Encourage and Promote Strong-willed/ Hyper-smart/Independent people Hyper-smart/Independent people (GE, PepsiCo, Microsoft)(GE, PepsiCo, Microsoft)

16. Support Internal Entrepreneurs16. Support Internal Entrepreneurs (3M, Microsoft) (3M, Microsoft)

17. Ferret out Talent anywhere/“No limits” approach to17. Ferret out Talent anywhere/“No limits” approach to retaining top talent retaining top talent (Virgin, GE, PepsiCo(Virgin, GE, PepsiCo))

SE22/Origins of Sustainable Entrepreneurship

18. Unmistakable Results & Accountability focus from18. Unmistakable Results & Accountability focus from the get-go to the grave the get-go to the grave (GE, New York Yankees, PepsiCo)(GE, New York Yankees, PepsiCo)

19. 19. Up or OutUp or Out (GE, McKinsey, big consultancies and law (GE, McKinsey, big consultancies and law

firms and ad agencies and movie studios in general)firms and ad agencies and movie studios in general)

20. Competitive to a fault! 20. Competitive to a fault! (GE, New York Yankees, News(GE, New York Yankees, News Corp/Fox, PepsiCo)Corp/Fox, PepsiCo)

21. “Bi-polar” Top Team, with “Unglued” Innovator #1,21. “Bi-polar” Top Team, with “Unglued” Innovator #1, powerful Control Freak #2 powerful Control Freak #2 (Oracle, Virgin) (Watch out when(Oracle, Virgin) (Watch out when #2 is missing: Enron)#2 is missing: Enron)

22. Masters of Loose-Tight/Hard-nosed about a very few22. Masters of Loose-Tight/Hard-nosed about a very few Core Values, Open-minded about everything elseCore Values, Open-minded about everything else (Virgin)(Virgin)

“ORGANIZATION” = STRATEGY: THE

GUERRILLA ADVANTAGETom Peters/04August2006

Small units … agile … lethal … invisible … guerrilla …

network warfare … distributed … dispersed … mobile .. Flat [hierarchy] …

improvisational … etc.

““Crazy Times Crazy Times Call for Crazy Call for Crazy

Organizations”Organizations” —Subtitle, The Tom Peters Seminar (1993)

EXCELLENCE.

4/40.

4/404/40

De-cent-De-cent-ral-iz-ral-iz-a-tion!a-tion!

Ex-e-Ex-e-cu-cu-

tion!tion!

Ac-count-Ac-count-a-bil-ity!a-bil-ity!

“GE has set a standard of candor.

… There is no puffery. … There isn’t an ounce of

denial in the place.” —

Kevin Sharer, CEO Amgen, on the “GE mystique” (Fortune)

6:15A.M6:15A.M..

????????

Work Hard > Work Smart

DECENTRALIZATION.EXECUTION.

ACCOUTABILITY.6:15A.M.

EXCELLENCE.

ACTION.ROOTS.

“The only way to whip an army is to go out and fight it.” —Grant

Source: John Mosier, Grant

“One of my superstitions had always been when I

started to go anywhere or

to do anything, not to not to turn backturn back, or stop, until

the thing intended was accomplished.” —Grant

NELSON

On NELSON: “[other] “[other] admirals more admirals more frightened of frightened of losing than losing than

anxious to win”anxious to win”

He who has the He who has the quickest quickest

“O.O.D.A. “O.O.D.A. Loops”* wins!Loops”* wins!

*Observe. Orient. Decide. Act. /Col. John Boyd

BOSSIDY

““ExecutionExecution is is thethe j jobob of the of the

business business leaderleader.”.” —Larry Bossidy—Larry Bossidy & Ram

Charan/ Execution: The Discipline of Getting Things Done

“Execution is a

ssyystematic stematic pprocessrocess of rigorously

discussing hows and whats, tenaciously following through, and

ensuring accountability.” —Larry Bossidy & Ram Charan/ Execution: The Discipline of Getting Things Done

READY.READY.FIRE!FIRE!AIM.AIM.

Ross Perot (vs “Aim! Aim! Aim!” /EDS vs GM/1985)

MASTERS

“This is so simple it sounds stupid, but it is amazing how few oil people really

understand that you only find oil if you drill wells. You may

think you’re finding it when you’re drawing maps and

studying logs, but you have to drill.”

Source: The Hunters, by John Masters, Canadian O & G wildcatter

““We have a We have a ‘strategic plan.’ ‘strategic plan.’ It’s called It’s called doing doing thingsthings.”.” — Herb Kelleher

TOM & BOB

In Search of Excellence/1982/The Bedrock “Eight Basics”

1. A Bias for Action

2. Close to the Customer3. Autonomy and Entrepreneurship4. Productivity Through People5. Hands On, Value-Driven6. Stick to the Knitting7. Simple Form, Lean Staff8. Simultaneous Loose-Tight Properties”

“This is so simple it sounds stupid, but it is amazing how few oil people really

understand that you only find oil if you drill wells. You may

think you’re finding it when you’re drawing maps and

studying logs, but you have to drill.”

Source: The Hunters, by John Masters, Canadian O & G wildcatter

EXCELLENCE.

BEDROCK.TALENT.

Brand Brand = =

Talent.Talent.

“We believe companies can increase their market cap 50 percent in 3 years. Steve Macadam at Georgia-

Pacific changed 20 of his 40 box plant managers to

put more talented, higher paid managers in charge. He increased profitability from

$25 million to $80 million in 2 years.” —Ed Michaels, War for Talent

DDDD$21M$21M

A review of Jack and Suzy Welch’s Winning claims there are but two key differentiators that set GE “culture” apart from the herd:

First: Separating financial forecasting and performance measurement. Performance measurement based, as it usually is, on budgeting leads to an epidemic of gaming the system. GE’s performance measurement is divorced from budgeting—and instead reflects how you do relative to your past performance and relative to competitors’ performance; i.e., it’s about how you actually do in the context of what happened in the real world, not as compared to a gamed-abstract plan developed last year.

Second: Putting Putting HRHR on on a par with finance a par with finance and marketing.and marketing.

Our Mission

To develop and manage To develop and manage talent;talent;

to apply that talent,to apply that talent,throughout the world, throughout the world,

for the benefit of clients;for the benefit of clients;to do so in partnership; to do so in partnership;

to do so with profit.to do so with profit.

WPP

Organizing Genius / Warren Bennis and Patricia Ward Biederman

“Groups become great only when everyone in them, leaders and

members alike, is free to do his or her absolute best.”

“The best thing a leader can do for a

Great Group is to allow its members to discover their

greatness.”

Leadership’s Mt Everest/Mt Excellence

“free to do his or her “free to do his or her absolute best” …absolute best” …

“allow its members “allow its members to discover their to discover their

greatness.”greatness.”

“The role of the Director is to create a

space where the actor or actress can become more than become more than thetheyy’ve ever been ’ve ever been beforebefore, , more than more than

thetheyy’ve dreamed of ’ve dreamed of beinbeing.”g.” —Robert Altman, Oscar

acceptance

CCQQOO*

*Chief quest-meister

““We are a We are a ‘Life ‘Life

Success’ Success’ Company.”Company.”

Dave Liniger, founder, RE/MAX

EXCELLENCE. INDIVIDUAL.BRAND YOU.

““If there is nothing If there is nothing very special about very special about

your work,your work, no matter how no matter how hard you apply yourself you hard you apply yourself you won’t get noticed, and that won’t get noticed, and that

increasingly means you won’t increasingly means you won’t

get paid much either.”get paid much either.” —Michael Goldhaber, Wired

New Work SurvivalKit.2006

1. Mastery!Mastery! (Best/Absurdly Good at Something!)2. “Manage” to Legacy“Manage” to Legacy (All Work = “Memorable”/“Braggable” WOW Projects!)3. A “USP”/Unique Selling PropositionA “USP”/Unique Selling Proposition (R.POV8: Remarkable Point of View … captured in 8 or less words) 4. Rolodex ObsessionRolodex Obsession (From vertical/hierarchy/“suck up” loyalty to horizontal/“colleague”/“mate” loyalty)5. Entrepreneurial InstinctEntrepreneurial Instinct (A sleepless … Eye for Opportunity! E.g.: Small Opp for Independent Action beats faceless part of Monster Project)6. CEO/Leader/Businessperson/CloserCEO/Leader/Businessperson/Closer (CEO, Me Inc. Period! 24/7!)7. Master of ImprovMaster of Improv (Play a dozen parts simultaneously, from Chief Strategist to Chief Toilet Scrubber)8. Sense of HumorSense of Humor (A willingness to Screw Up & Move On)9. Comfortable with Your SkinComfortable with Your Skin (Bring “interesting you” to work!)10. Intense Appetite for TechnologyIntense Appetite for Technology (E.g.: How Cool-Active is your Web site? Do you Blog?)11. Embrace “Marketing”Embrace “Marketing” (Your own CSO/Chief Storytelling Officer)12. Passion for RenewalPassion for Renewal (Your own CLO/Chief Learning Officer) 13. Execution Excellence!Execution Excellence! (Show up on time! Leave last!)

DistinctDistinct … or

… ExtinctExtinct

““It’s It’s alwaysalways

showtime.”showtime.” —David D’Alessandro, Career Warfare

EXCELLENCE AWOL: THE SCHOOLS FIASCO

“My wife and I went to a [kindergarten] parent-teacher conference and were informed that our budding

refrigerator artist, Christopher, would be receiving a grade of Unsatisfactory in art. We were shocked. How

could any child—let alone our child—receive a poor grade

in art at such a young age? His teacher His teacher informed us that he had informed us that he had

refused to color within the refused to color within the lines, which was a state lines, which was a state

rereqquirement for uirement for demonstratindemonstratingg ‘ ‘ggrade-rade-level motor skillslevel motor skills.’ ”

—Jordan Ayan, AHA!

“How many artists are there in the room? Would you please raise your hands. FIRST GRADE: En mass the children leapt from their seats, arms waving. Every child was an artist. SECOND GRADE:

About half the kids raised their hands, shoulder high, no higher. The hands were still. THIRD GRADE: At best, 10 kids out of 30 would raise a hand, tentatively, self-consciously. By the time I reached

SIXTH GRADE, no more than one or two kids raised their hands, and then ever so slightly, betraying a fear of being identified by the

group as a ‘closet artist.’ The point is:

EverEveryy school I visited school I visited was was pparticiarticippating inating in

the sthe syystematic sustematic suppppressionression of creative of creative ggeniusenius.”

Source: Gordon MacKenzie, Orbiting the Giant Hairball

Ye gads: “Thomas Stanley has Thomas Stanley has not only found no correlation not only found no correlation

between success in school between success in school and an ability to accumulate and an ability to accumulate wealth, he’s actually found a wealth, he’s actually found a negative correlation.negative correlation. ‘It seems that

school-related evaluations are poor predictors of economic success,’ Stanley concluded. What did predict success was a willingness to take risks. Yet the success-failure standards of most schools penalized risk takers.

Most educational systems reward those who play it safe. As a result, those who do well in school find it hard to

take risks later on.” —Richard Farson & Ralph Keyes, Whoever Makes the Most

Mistakes Wins

15 “Leading” Biz Schools

Design/Core: 0Design/Elective: 1

Creativity/Core: 0Creativity/Elective: 4

Innovation/Core: 0Innovation/Elective: 6

Source: DMI/Summer 2002/Research by Thomas Lockwood

M.I.A.*: Talk. (Present.) Listen. (Interview.) Sell. (Life = Sales.) Do. (Execution-

Implementation.) Talent. (Recruit-Develop-Retain.) Project Management. (Create. Solicit

support. Execution. Adoption-Client “Culture Change.”) Product. (“It.”) Innovation. (Design.

Creativity. “Buzz-building.” Politics.) Leadership. (USMA, etc.) E.Q. (Connect.) “Culture”

Change. (Lasting impact.) Diversity. (Cross-

cultural Effectiveness.) Career Creation. (Brand You life-lifestyle.) Wellness. (Life.)

*B.Schools (“M.I.A.” or at most “B.I.A.”—barely in action)

New Economy Biz Degree Programs

MBA (Master of Business Administration)

MMM1 (Master of Metaphysical Management)

MMM2 (Master of Metabolic Management)

MGLF (Master of Great Leaps Forward)

MTD (Master of Talent Development)

W/MwGTDw/oC (Guy/Gal Who Gets Things Done without Certificate)

DE (Doctor of Enthusiasm)

EXCELLENCE.

LEADING.

EXCELLENCE.

BEDROCK.PURPOSE.

“I never, ever thought of myself as a

businessman. I was interested in creating

things I would be proud of.”

—Richard Branson

“Management has a lot to do with answers. Leadership is a function of questions. And the

first question for a leader always

is: ‘‘WhoWho dodo wewe iintendntend toto bebe?’?’ Not ‘What are we going to do?’

but ‘Who do we intend to be?’” —Max De Pree, Herman Miller

“People want to be part of something larger

than themselves. They want to be part of

something they’re really proud of, that they’ll

fight for, sacrifice for , trust.” —Howard Schultz, Starbucks

EXCELLENCE.ENTHUSIASM.

ENERGY. PASSION.

DETERMINATION.

““Nothing is so Nothing is so contagious as contagious as enthusiasm.”enthusiasm.”

—Samuel Taylor Coleridge

BLOOD-Y-MIND-ED-

NESS

“It is no use saying ‘We are doing our best.’ You have got to succeed in doing

what is necessary.” —WSC

EnthusiasmEnthusiasmEnergyEnergy

ExuberanceExuberanceVoracious CuriosityVoracious Curiosity

Irritability/Dis-satisfactionIrritability/Dis-satisfactionRelentlessnessRelentlessnessSelf-relianceSelf-reliance

“Closer” (Execution)“Closer” (Execution)excellenceexcellence

EXCELLENCE.

AGILITY.

““The most The most successful successful

people are those people are those who who

are good at plan are good at plan B.”B.”

—James Yorke, mathematician, on chaos theory in The New Scientist

EXCELLENCE. SHOWING UP.

MBWAMBWA

“You must bebe the change you

wish to see in the world.”

Gandhi

“The First step in a ‘dramatic’

‘organizational change program’ is obvious—

dramatic personal change!” —RG

EXCELLENCE.

MESSAGE CLARITY.

Message clarity = CALENDAR + MBWA + Language + Perceived

INTENSITY/ENTHUSIASM/ ENERGY + Concrete-Visible

support + Prototypes + Tolerance for Failure/“Good

losses” + Promotions + Tempo + Resilience + Celebration +

Perceived RELENTLESSNESS + Training

Leadership23

Leadership23/ML

1. Enthusiasm. Energy. Exuberance.1. Enthusiasm. Energy. Exuberance.2. Action. Execution.2. Action. Execution.3. Tempo. Metabolism.3. Tempo. Metabolism.4. Relentless.4. Relentless.5. Master of Plan B.5. Master of Plan B.6. Accountability.6. Accountability.7. Meritocracy.7. Meritocracy.8. Leaders “do” people. Mentor. (“Success8. Leaders “do” people. Mentor. (“Success creation business.”)creation business.”)9. Women. Diversity.9. Women. Diversity.10. Integrity. Credibility. Humanity. Grace.10. Integrity. Credibility. Humanity. Grace.11. Realism.11. Realism.12. Cause. Adventures. Quests.12. Cause. Adventures. Quests.

Leadership23/ML

13. Legacy.13. Legacy.14. Best story wins.14. Best story wins.15. On the edge. (“Wildest chimera of a15. On the edge. (“Wildest chimera of a moonstruck mind.”)moonstruck mind.”)16. “Reward excellent failures. Punish 16. “Reward excellent failures. Punish mediocre successes.”mediocre successes.”17. Different > Better. (“Only ones who do17. Different > Better. (“Only ones who do what we do.”)what we do.”)18. MBWA. Customer MBWA.18. MBWA. Customer MBWA.19. Laughs.19. Laughs.20. Repot. Curiosity. Why?20. Repot. Curiosity. Why?21. You = Calendar. “To Don’t.” Two.21. You = Calendar. “To Don’t.” Two.22. Excellence. Always.22. Excellence. Always.23. Nelsonian! (“Other admirals more afraid23. Nelsonian! (“Other admirals more afraid of losing than anxious to win.”)of losing than anxious to win.”)

““AS AS LEADERS, LEADERS, WOMEN WOMEN

RULERULE:: New Studies find that

female managers outshine their male counterparts in almost every measure”

Title, Special Report/BusinessWeek

10 UNASSAILABLE REASONS WOMEN RULE10 UNASSAILABLE REASONS WOMEN RULE

WomenWomen make [all] the financial decisions. make [all] the financial decisions.WomenWomen control [all] the wealth. control [all] the wealth.WomenWomen [substantially] outlive men. [substantially] outlive men.WomenWomen start most of the new businesses. start most of the new businesses.Women’sWomen’s work force participation rates have work force participation rates have soared worldwide.soared worldwide.WomenWomen are closing in on “same pay for same are closing in on “same pay for same job.”job.”WomenWomen are penetrating senior ranks rapidly are penetrating senior ranks rapidly [even if the pace is slow for the corner [even if the pace is slow for the corner office per se].office per se].Women’s Women’s leadership strengths are exceptionally wellleadership strengths are exceptionally well aligned with new organizational effectivenessaligned with new organizational effectiveness imperatives.imperatives.WomenWomen are better salespersons than men. are better salespersons than men.WomenWomen buy [almost] everything—commercial buy [almost] everything—commercial as well as consumer goods.as well as consumer goods.

So what exactly is the economic point of men?So what exactly is the economic point of men?

“Forget China, India and the

Internet: Economic Growth Is Driven

by WomenWomen.” —Headline, Economist,

April 15, 2006, Leader, page 14

EXCELLENCE.

STRETCH.

The greatest dangerThe greatest dangerfor most of usfor most of us

is not that our aim isis not that our aim istoo hightoo high

and we miss it,and we miss it,but that it isbut that it is

too lowtoo lowand we reach it.and we reach it.

Michelangelo

Kevin Roberts’ Credo

1. Ready. Fire! Aim.2. If it ain’t broke ... Break it!3. Hire crazies.4. Ask dumb questions.5. Pursue failure.6. Lead, follow ... or get out of the way!7. Spread confusion.8. Ditch your office.9. Read odd stuff.

10. Avoid Avoid moderationmoderation!!

EXCELLENCE.

OFFENSE.

Nelson’s secret:

“[Other] “[Other] admirals more admirals more frightened of frightened of losing than losing than

anxiousanxious to win”

You only You only find oil if find oil if you drill you drill

wellswells.. —T he Hunters, by John Masters,

Canadian O & G wildcatter

EXEXCELLE CELLE ALWALWAYSAYS..

excellence. always. long tom peters’ excellence. always. xalways/austin/07 september 2006

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