Tom Peters’ X25*Tom Peters’ X25*

EXCELLENCEXCELLENCE. ALWAYS.E. ALWAYS.

MASTER/Part THREEMASTER/Part THREE

**In Search of ExcellenceIn Search of Excellence 1982-2007 1982-2007

part part threethree

Slides at …

tompeters.comtompeters.com

Welcome to Tom Peters “PowerPoint World”!Welcome to Tom Peters “PowerPoint World”! Beyond the set of slides Beyond the set of slides here, you will find at here, you will find at tompeters.comtompeters.com the last eight years of the last eight years of presentations, a basketful of “Special Presentations,” and, above all, presentations, a basketful of “Special Presentations,” and, above all, Tom’s Tom’s constantly updatedconstantly updated Master PresentationMaster Presentation—from which most of the —from which most of the slides in this presentation are drawn. There are about 3,500 slides in slides in this presentation are drawn. There are about 3,500 slides in the 7-part “Master Presentation.” The first five “chapters” constitute the 7-part “Master Presentation.” The first five “chapters” constitute the main argument: the main argument: Part IPart I is context. is context. Part IIPart II is devoted entirely to innovation—the sine qua is devoted entirely to innovation—the sine qua non, as perhaps never before, of survival. In earlier incarnations of the non, as perhaps never before, of survival. In earlier incarnations of the “master,” “innovation” “stuff” was scattered throughout the “master,” “innovation” “stuff” was scattered throughout the presentation—now it is front and center and a stand-alone. presentation—now it is front and center and a stand-alone. Part IIIPart III is a is a variation on the innovation theme—but it is organized to examine the variation on the innovation theme—but it is organized to examine the imperative (for most everyone in the developed-emerging world) of an imperative (for most everyone in the developed-emerging world) of an ultra high value-added strategy. A “value-added ladder” (the “ladder” ultra high value-added strategy. A “value-added ladder” (the “ladder” configuration lifted with gratitude from Joe Pine and Jim Gilmore’s configuration lifted with gratitude from Joe Pine and Jim Gilmore’s Experience EconomyExperience Economy) lays out a specific logic for necessarily leaving ) lays out a specific logic for necessarily leaving commodity-like goods and services in the dust. commodity-like goods and services in the dust. Part IVPart IV argues that in argues that in this age of “micro-marketing” there are two this age of “micro-marketing” there are two macromacro-markets of -markets of astounding size that are dramatically under-attended by all but a few; astounding size that are dramatically under-attended by all but a few; namely women and boomers-geezers. namely women and boomers-geezers. Part VPart V underpins the overall underpins the overall argument with the necessary bedrock—Talent, with brief consideration argument with the necessary bedrock—Talent, with brief consideration of Education & Healthcare. of Education & Healthcare. Part VI Part VI examines Leadership for turbulent examines Leadership for turbulent times from several angles.times from several angles. Part VII Part VII is a collection of a dozen Lists— is a collection of a dozen Lists—such as Tom’s “Irreducible 209,” 209 “things I’ve learned along the such as Tom’s “Irreducible 209,” 209 “things I’ve learned along the way.”way.”

Enjoy! Download! “Steal”—that’s the whole point!Enjoy! Download! “Steal”—that’s the whole point!

Up, Up, Up,

Up

the Value-added Ladder.

As China and India,As China and India, among others, surge, among others, surge, “the rest of us” “the rest of us” [incl. the [incl. the

likes of Romania]likes of Romania] must must scramble to scramble to “Add Value”“Add Value”

[mostly, “back[mostly, “back to the future”] to the future”]

LEAVE ITLEAVE IT

TO TO BEAVER.BEAVER.

Trapper:

<$20<$20 per beaver pelt.

Source: WSJ

wdcp/“Wildlife wdcp/“Wildlife Damage-control Damage-control

Professional”:Professional”: $$150150 to “remove” “problem to “remove” “problem

beaver”; beaver”; $$750750-$-$1,0001,000 for flood-control piping … for flood-control piping … so that beavers can stay.so that beavers can stay.

Source: Source: WSJWSJ

Trapper = Trapper = RedneckRedneck

WDCP = WDCP = PSF/ PSF/ Professional Professional

Services ProviderServices Provider

7X7X toto 40X40Xfor for

“Solution”“Solution” [rather than “service transaction”][rather than “service transaction”]

EXCELLENCE. EXCELLENCE.

VALUE ADDED.VALUE ADDED.UP THE LADDER.UP THE LADDER.

EXCELLENCE.EXCELLENCE.

VALUE-ADDED LADDER I.VALUE-ADDED LADDER I. SOLVE IT. SOLVE IT.

$55$55BB

And the “M” Stands for … ?

Gerstner’s IBM: “Systems Integrator of choice.”/BW

(“Lou, help us turn ‘all this’ into that long-promised ‘revolution.’ ” )

IBM Global ServicesIBM Global Services* (*Integrated Systems

Services Corp.): $$55B55B

Planetary Rainmaker-in-Chief!

“Palmisano’s strategy is “Palmisano’s strategy is to expand tech’s borders to expand tech’s borders by pushing users—and by pushing users—and

entire industries—entire industries—toward toward radicallradicallyy different different

business modelsbusiness models.. The payoff for IBM

would be access to an ocean of revenue—Palmisano estimates it at $500 billion a year$500 billion a year —that technology

companies have never been able to touch.” —Fortune

“By making the Global Delivery Model both legitimate and mainstream, we have brought the battle to our territory. That is, after all, the purpose of strategy. We have become the leaders, and incumbents [IBM, Accenture]

are followers, forever playing catch-up. … However, creating a new business innovation is not enough for rules to be changed. The

innovation must impact clients, competitors, investors, and society. We have seen all this in spades. Clients have embraced the model and are

demanding it in even greater measure. The acuteness of their circumstance, coupled with the capability and value of our solution, has made the choice not a choice. Competitors have been dragged kicking

and screaming to replicate what we do. They face trauma and disruption,

but the game has changed forever. Investors have Investors have ggrasraspped that this is not a ed that this is not a ppassinassingg

fancfancyy, but a , but a ppotential otential restructurinrestructuringg of the wa of the wayy the world the world

oopperates and how value will be erates and how value will be created in the futurecreated in the future.”.” —Narayana Murthy,

chairman’s letter, Infosys Annual Report

““Big Brown’s New Bag: UPSBig Brown’s New Bag: UPS

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

AmericaAmerica”” —Headline/BW/2004

““UPS wants to take over UPS wants to take over the sweet spot in the the sweet spot in the

endless loop of goods, endless loop of goods, information and capital information and capital that all the packages [it that all the packages [it

moves] represent.”moves] represent.”Source: ecompany.com (E.g., Source: ecompany.com (E.g., UPS LogisticsUPS Logistics manages manages the logistics of 4.5M Ford vehicles, from 21 mfg. sites the logistics of 4.5M Ford vehicles, from 21 mfg. sites

to 6,000 NA dealers)to 6,000 NA dealers)

MasterCard MasterCard AdvisorsAdvisors

“ ‘“ ‘Architecture’ is Architecture’ is becoming a becoming a

commodity. Winners commodity. Winners will be will be ‘Turnkey ‘Turnkey

Facilities Facilities Management’ Management’ providers.”providers.”

SMPS ExecSMPS Exec

E.g. …E.g. …

UTC/Otis + UTC/Otis + Carrier:Carrier: boxes to boxes to

“integrated “integrated building systems”building systems”

““We want to be We want to be the air traffic the air traffic controllers of controllers of

electrons.”electrons.”Bob Nardelli, Bob Nardelli, GE Power SystemsGE Power Systems

California Closets:California Closets: “a “a whole-life upgrade, not whole-life upgrade, not just a tidy bedroom.”just a tidy bedroom.” —WSJ/0329.07, —WSJ/0329.07, “Why the Container-“Why the Container-

Store Guy Wants to Be Your Therapist”Store Guy Wants to Be Your Therapist”

HuHuggee:: Customer

SatisfactionSatisfaction versus Customer

SuccessSuccess

““Customer Satisfaction” to “Customer Customer Satisfaction” to “Customer Success”Success”

“We’re getting better at [Six Sigma] “We’re getting better at [Six Sigma] every day. But we really need to think every day. But we really need to think

about the customer’s profitability. about the customer’s profitability.

Are customers’ bottom Are customers’ bottom lines really benefiting from lines really benefiting from

what we provide them?”what we provide them?”Bob Nardelli, GE Power SystemsBob Nardelli, GE Power Systems

Gamechangging “Solutions”: Bet-the-Company

IBMIBMUPSUPS

XeroxXeroxMasterCardMasterCard

GEGE

BestBuyBestBuy

I. LAN Installation Co. (3%)

II. Geek Squad. (30%.)

III. Acquired by BestBuy.

IV. Flagship of BestBuyFlagship of BestBuy Wholesale “Solutions” Wholesale “Solutions” Strategy Makeover. Strategy Makeover.

Up,Up, Up,Up, Up, Up,

UpUp

the Value-added Ladder.

The Value-added Ladder/ STUFF ‘N’ THINGSSTUFF ‘N’ THINGS

GoodsGoods Raw Materials Raw Materials

The Value-added Ladder/Stuff & TRANSACTIONSTRANSACTIONS

ServicesServicesGoods

Raw Materials

The Value-added Ladder/ OPPORTUNITY-SEEKINGOPPORTUNITY-SEEKING

Customer Success/ Customer Success/ Gamechanging Gamechanging

SolutionsSolutionsServicesGoods

Raw Materials

“ ‘“ ‘Results’ are Results’ are measured by the measured by the

successsuccess of all those of all those who have purchased who have purchased

your product or your product or service”service” —Jan Gunnarsson & Olle Blohm, The —Jan Gunnarsson & Olle Blohm, The

Welcoming LeaderWelcoming Leader

““He had done nothing to sell me on his He had done nothing to sell me on his business, yet he had given me the most business, yet he had given me the most

powerful sales pitch of my life.powerful sales pitch of my life. Because Because his his sole sole concern had concern had been been mymy welfare and welfare and

the success of the success of mymy business.”business.”

—Jim Penman, on learning how to sell (—Jim Penman, on learning how to sell (What WillWhat Will They Franchise Next? The Story of Jim’s Group They Franchise Next? The Story of Jim’s Group))

Era #1/Obvious ValueEra #1/Obvious Value: “Our ‘it’ works, is : “Our ‘it’ works, is delivered on time” (“Close”)delivered on time” (“Close”)

Era #2/Augmented ValueEra #2/Augmented Value: : “How our ‘it’ “How our ‘it’ can add value—a ‘useful it’ ” (“Solve”)can add value—a ‘useful it’ ” (“Solve”)

Era #3/Complex Value NetworksEra #3/Complex Value Networks: : “How “How our ‘system’ can change you and deliver our ‘system’ can change you and deliver

‘business advantage‘business advantage’’ ” (“Culture- ” (“Culture-Strategic change”)Strategic change”)

Source: Jeff Thull, The Prime Solution: Close the Value Gap, Increase Margins, and Win the Complex Sale

““The business of selling is not just about matching viable The business of selling is not just about matching viable

solutions to the customers that require them. solutions to the customers that require them. It’s It’s equally about managing the equally about managing the

change process the customer change process the customer will need to go through to will need to go through to

implement the solution and implement the solution and achieve the value promised achieve the value promised

by the solutionby the solution.. One of the key One of the key

differentiators of our position in the market is our attention to differentiators of our position in the market is our attention to managing change and making change stick in our customers’ managing change and making change stick in our customers’

organization.”organization.”* (*E.g.: CRM failure rate/Gartner: * (*E.g.: CRM failure rate/Gartner: 7070%)%) —Jeff Thull, —Jeff Thull, The Prime Solution: Close the Value Gap, The Prime Solution: Close the Value Gap,

Increase Margins, and Win the Complex SaleIncrease Margins, and Win the Complex Sale

The Value-added Ladder/ OPPORTUNITY-SEEKINGOPPORTUNITY-SEEKING

ImImpplementedlemented Gamechanging Gamechanging

SolutionsSolutionsServicesGoods

Raw Materials

EXCELLENCE.EXCELLENCE.

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

““Don’t own Don’t own nothin’ if you nothin’ if you can help it. If can help it. If you can, rent you can, rent your shoes.”your shoes.”

—Forrest Gump—Forrest Gump

“Organizations will Organizations will still be critically still be critically important in the important in the

world, but as world, but as ‘organizers,’ not ‘organizers,’ not

‘employers’!”‘employers’!” — Charles — Charles

HandyHandy

“ ‘Disintermediation’ is overrated. Those who fear disintermediation-outsourcing should in fact be

afraid of irrelevance; ‘outsourcing’ is just another

way of saying that …

yyou’ve ou’ve become become

irrelevant irrelevant toto y your our

customerscustomers.”.”

—John Battelle/Point/Advertising Age/07.05

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

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

ResearchResearch))

““[Former Fed Vice-chairman Alan] [Former Fed Vice-chairman Alan] Blinder … Blinder … remains an implacable opponent of tariffs and remains an implacable opponent of tariffs and

trade barriers. But now he is saying loudly that a trade barriers. But now he is saying loudly that a new industrial revolution—communication new industrial revolution—communication

technology that allows services to be delivered technology that allows services to be delivered

from afar—will put as many as from afar—will put as many as 40 40 million Americanmillion American jobsjobs at risk of being shipped out of the at risk of being shipped out of the

country in the next decade or two.”*country in the next decade or two.”* —Wall Street —Wall Street Journal Journal /0328/0328

*Blinder: 40 million = *Blinder: 40 million = “only the tip“only the tip of a very big iceberg.”of a very big iceberg.”

Chicago:

HRMACHRMAC

Sarah: “ Mom, what do you do?”

Mom: “I’m ‘overhead.’‘overhead.’””

““support function” / support function” / “cost center”/ “cost center”/ “overhead”“overhead”

oror … …

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

AAgge of Talente of Talent””

Department Head

to …

ManaginManaging g

PartnerPartner, , ISIS [HR, R&D, etc.] IncInc..

Answer:

PSFPSF

““Typically in a mortgage company or Typically in a mortgage company or financial services company, ‘risk financial services company, ‘risk

management’ is an overhead, not a management’ is an overhead, not a revenue center. We’ve become more revenue center. We’ve become more

than that.than that. We pay for We pay for ourselves, and we ourselves, and we

actually make money actually make money for the companyfor the company.”.” ——Frank Frank

Eichorn, Director of Credit Risk Data Management Group, Eichorn, Director of Credit Risk Data Management Group, Wells Fargo Home MortgageWells Fargo Home Mortgage (Source: sas.com) ( (Source: sas.com) (Who Owns Who Owns

the Data? Using Internal Customer Relationship the Data? Using Internal Customer Relationship Management to Improve Business and IT Integration Management to Improve Business and IT Integration —Frank —Frank

Eichorn)Eichorn)

Mantra:

“Eichorn it!”“Eichorn it!”

Every job done Every job done in W.C.W. in W.C.W. [White Collar World][White Collar World]

is also done is also done “outside” …“outside” …for profit!for profit!

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)

Series/Reinventing WorkSeries/Reinventing Work

The ProThe Projject 50ect 50:: Fifty Ways To Transform Fifty Ways To Transform Every “Task” Into A Project That MattersEvery “Task” Into A Project That Matters

The Professional Service Firm 50The Professional Service Firm 50:: Fifty Fifty Ways To Transform Your “Department” Ways To Transform Your “Department” Into A Professional Service Firm Whose Into A Professional Service Firm Whose Trademarks Are Passion And InnovationTrademarks Are Passion And Innovation

The Brand You 50The Brand You 50:: Fifty Ways To Fifty Ways To Transform Yourself From An “Employee” Transform Yourself From An “Employee” Into A Brand That Shouts Distinction, Into A Brand That Shouts Distinction, Commitment And PassionCommitment And Passion

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?

Agriculture Age (farmers)

Industrial Age (factory workers)

Information Age (knowledge workers)

Conceptual Age*Conceptual Age* (creators)

*Murakami Teruyasu: “Age of Creation Intensification”

Source: Dan Pink, A Whole New Mind

TheThe ““PSF35PSF35””:: Thirty-Five Thirty-Five

Professional Service Firm Professional Service Firm Marks of ExcellenceMarks of Excellence

The PSF35: The Work & The Legacy

1.1. CRYSTAL CLEAR POINT OF VIEWCRYSTAL CLEAR POINT OF VIEW

(E very Practice Group: “If you can’t explain your position in eight(E very Practice Group: “If you can’t explain your position in eight words or less, you don’t have a position”—Seth Godin)words or less, you don’t have a position”—Seth Godin)2. 2. DRAMATIC DIFFERENCEDRAMATIC DIFFERENCE (“We are the only ones who do what (“We are the only ones who do what we do”—Jerry Garcia)we do”—Jerry Garcia)3. Stretch Is Routine (“Never bite off less than you can chew”—anon.)3. Stretch Is Routine (“Never bite off less than you can chew”—anon.)4. Eye-Appetite for Game-changer Projects (Excellence at Assembling4. Eye-Appetite for Game-changer Projects (Excellence at Assembling “ “Best Team”—Fast) Best Team”—Fast) 5. “Playful” Clients (Adventurous folks who unfailingly Aim to Change5. “Playful” Clients (Adventurous folks who unfailingly Aim to Change the World)the World)6. Small “Uneconomic” Clients with Big Aims6. Small “Uneconomic” Clients with Big Aims7. Life Is Too Short to Work with Jerks (Fire lousy clients)7. Life Is Too Short to Work with Jerks (Fire lousy clients)8. 8. OBSESSED WITH LEGACYOBSESSED WITH LEGACY (Practice Group and Individual: “Dent the (Practice Group and Individual: “Dent the Universe”—Steve Jobs)Universe”—Steve Jobs)9. Fire-on-the-spot Anyone Who Says, “Law/Architecture/Consulting/9. Fire-on-the-spot Anyone Who Says, “Law/Architecture/Consulting/ I-banking/ Accounting/PR/Etc. has become a ‘commodity’ ”I-banking/ Accounting/PR/Etc. has become a ‘commodity’ ”10. Consistent with #9 above … 10. Consistent with #9 above … DO NOT SHY AWAY FROM THEDO NOT SHY AWAY FROM THE WORD (IDEA) “RADICAL”WORD (IDEA) “RADICAL”

Richard Sennett: Richard Sennett: “Craftsmanship,” “Craftsmanship,” “a sustaining life “a sustaining life

narrative”narrative”Source: Stefan Stern on Management, FT, 0710.07

Pointed Pointed Point of Point of View!View!

R.POV8R.POV8**Remarkable Point Of View/8 Words or less/“If you can’t state your

position in eight words or less you don’t have a position.”—SG

“If you can’t write your movie idea on

the back of a back of a business cardbusiness card,,

you ain’t got a movie.” —Samuel Goldwyn

The PSF35: The Client Experience11. Always team with client: “full partners in 11. Always team with client: “full partners in achieving memorable results” achieving memorable results” (Wanted: “Chimeras(Wanted: “Chimeras of Moonstruck Minds”!) of Moonstruck Minds”!)12. We will seek assistance Anywhere to assemble the Best-in-12. We will seek assistance Anywhere to assemble the Best-in- Planet Team for the Project Planet Team for the Project13. Client Team Members routinely declare that working with us13. Client Team Members routinely declare that working with us was “the Peak Experience of my Career” was “the Peak Experience of my Career”14. The job’s not done until implementation is14. The job’s not done until implementation is “100.00% complete” (Those who don’t “get it” must go) “100.00% complete” (Those who don’t “get it” must go)

15.15. IMPLEMENTATION IS IMPLEMENTATION IS NOTNOT COMPLETECOMPLETE UNTIL UNTIL THE CLIENT HAS EXPERIENCED “CULTURE THE CLIENT HAS EXPERIENCED “CULTURE CHANGE” CHANGE”16.16. IMPLEMENTATION IS IMPLEMENTATION IS NOTNOT COMPLETECOMPLETE UNTIL UNTIL SIGNIFICANT “TECHNOLOGY TRANSFER HAS SIGNIFICANT “TECHNOLOGY TRANSFER HAS TAKEN PLACE-ROOT TAKEN PLACE-ROOT (“Teach a man to fish …”)(“Teach a man to fish …”)

17.17. The Final Exam: The Final Exam: DID WE MAKE A DRAMATIC,DID WE MAKE A DRAMATIC, LASTING, GAME-CHANGING DIFFERENCE? LASTING, GAME-CHANGING DIFFERENCE?

“The business of selling is not just about matching viable solutions to the customers that require

them. It’s eIt’s eqqualluallyy about mana about managginingg the chanthe changge e pprocess the customer rocess the customer

will need to will need to ggo through to o through to imimpplement the solution and lement the solution and

achieve the value achieve the value ppromised byromised by the solutionthe solution.”*

(*E.g.: CRM failure rate/Gartner: 70%) —Jeff Thull, The Prime Solution: Close the Value Gap,

Increase Margins, and Win the Complex Sale

UniCredit Group/UniCredit Group/ UniCredito Italiano* ** UniCredito Italiano* **

—3—3rdrd party measurement party measurement—Customer-initiated—Customer-initiated measurement measurement—Primary $$$$ incentives—Primary $$$$ incentives—“Factories”—“Factories”—Primary Corporate Initiative—Primary Corporate Initiative—Etc—Etc*#13*#13**TP/#1**TP/#1

The PSF35: The People & The Leadership

18. 18. TALENT FANATICSTALENT FANATICS (“Best-Coolest place to work”) (PERIOD) (“Best-Coolest place to work”) (PERIOD)19. 19. EYE FOR THE PECULIAREYE FOR THE PECULIAR (Hiring: Go beyond “same old, (Hiring: Go beyond “same old, same old”) same old”) 20. Early Opportunities (vs. “Wait your turn”) 20. Early Opportunities (vs. “Wait your turn”) 21. Up or Out (Based on “Legacy”/Mentoring as much as21. Up or Out (Based on “Legacy”/Mentoring as much as “ “Billings”/“Rainmaking”)Billings”/“Rainmaking”)22. Slide the Old Aside/Make Room for Youth (Find oldsters22. Slide the Old Aside/Make Room for Youth (Find oldsters new roles?)new roles?)23. 23. TALENT IS OBSESSED WITH RENEWAL FROM DAY #1 TO TALENT IS OBSESSED WITH RENEWAL FROM DAY #1 TO DAY #“R” DAY #“R” [R = Retirement][R = Retirement]24. Office/Practice Leaders Evaluated Primarily on 24. Office/Practice Leaders Evaluated Primarily on Mentoring-Team Building SkillsMentoring-Team Building Skills25. 25. A “PROPRIETARY” TALENT DEVELOPMENT PROCESS (GE)A “PROPRIETARY” TALENT DEVELOPMENT PROCESS (GE)26. Team Leadership Skills Valued Early26. Team Leadership Skills Valued Early27. Partner with B.I.W. [Best In World] Outsiders as Needed27. Partner with B.I.W. [Best In World] Outsiders as Needed and to Infuse Different Viewsand to Infuse Different Views

The PSF35: The Firm & The Brand

28. 28. EAT-SLEEP-BREATHE-OOZE INTEGRITYEAT-SLEEP-BREATHE-OOZE INTEGRITY (“My life (“My life is my message”—Gandhi)is my message”—Gandhi)

29. Excellence+ in 29. Excellence+ in EXECUTIONEXECUTION … 100.00% of the Time… 100.00% of the Time30. “Drop everything”/“Swarm” to Support a Harried-On30. “Drop everything”/“Swarm” to Support a Harried-On The Verge TeamThe Verge Team

31. 31. SPEND ON R&D LIKE A TECH FIRM.SPEND ON R&D LIKE A TECH FIRM.32. 32. A PROPRIETARY METHODOLOGYA PROPRIETARY METHODOLOGY (FBR, McKinsey, (FBR, McKinsey, Chiat Day, IDEO, old EDS)Chiat Day, IDEO, old EDS)

33. 33. BRAND MANIACSBRAND MANIACS (Organize Around a Point of View Worth(Organize Around a Point of View Worth BROADCASTING)BROADCASTING)

3434. . PASSION! ENTHUSIASM!PASSION! ENTHUSIASM!

35.35. EXCELLENCE. ALWAYS.EXCELLENCE. ALWAYS.

““P.S.F.”: SummaryP.S.F.”: Summary

H.V.A. Projects (100%)H.V.A. Projects (100%)Pioneer ClientsPioneer Clients

WOW Work (see below)WOW Work (see below)Hot “Talent” (see below)Hot “Talent” (see below)“Adventurous” “culture”“Adventurous” “culture”Proprietary Point of View Proprietary Point of View

(Methodology)(Methodology)W.W.P.F./Work Worth Paying For W.W.P.F./Work Worth Paying For (100%)/Outside Clients (25%+) (100%)/Outside Clients (25%+)

When: Now!When: Now!

(1) Translate ALL departmental(1) Translate ALL departmental activities into activities into discretediscrete W.W.P.F. “Products.” W.W.P.F. “Products.”(2) (2) 100% go on the Web.100% go on the Web.

(3)(3) Non-awesome areNon-awesome are outsourced outsourced (75%??). (75%??).

(4)(4) Remaining Remaining “Centers of “Centers of Excellence” are retained & Excellence” are retained & leveraged to the hilt! leveraged to the hilt!

BMW’s BMW’s Designworks/USA: Designworks/USA:

>50%>50% from from

outside workoutside work

Static/Imitative

Integrity.Integrity.Quality.Quality.

Continuous Improvement.Continuous Improvement.Superior Service Superior Service (Exceeds Expectations.)(Exceeds Expectations.)

Completely Satisfactory Transaction.Completely Satisfactory Transaction.Smooth Evolution.Smooth Evolution.

Market Share.Market Share.

Dynamic/Different

Dramatic Difference!Dramatic Difference!Disruptive!Disruptive!

Insanely Great! Insanely Great! (Quality++++)(Quality++++)

Life-(Industry-)changing Experience!Life-(Industry-)changing Experience!Game-changing!Game-changing!

WOW!WOW!Surprise!Surprise!Delight!Delight!

Breathtaking!Breathtaking!Punctuated Equilibrium!Punctuated Equilibrium!

Market Creation!Market Creation!

G.M.G.M. = The Recruitment and = The Recruitment and Development of Top Talent. Development of Top Talent.

[Period!][Period!]

V.C.V.C. = Bets on “Talent.” Bets = Bets on “Talent.” Bets on Projects. [Period!]on Projects. [Period!]

Dept. Head I = Dept. Head I = Sports G.M.Sports G.M.

Dept. Head II = Dept. Head II = V.C.V.C.

EXCELLENCEEXCELLENCE = =

Flawless Flawless EXECUTIONEXECUTION + Continuous + Continuous IMPROVEMENTIMPROVEMENT

+ Brilliantly Trained + Brilliantly Trained PEOPLEPEOPLE

+Gamechanging Gamechanging QUESTSQUESTS + +

WEIRD WEIRD Rosters +Rosters + GASPWORTHYGASPWORTHY Results Results

EXCELLENCEEXCELLENCE = =

Flawless Flawless EXECUTIONEXECUTION + Continuous + Continuous IMPROVEMENTIMPROVEMENT

+ Brilliantly Trained + Brilliantly Trained PEOPLEPEOPLE

+Gamechanging Gamechanging QUESTSQUESTS + +

WEIRD WEIRD Rosters +Rosters + GASPWORTHYGASPWORTHY Results Results

Psf.Psf.Bedrock.Bedrock.

PSFPSF/Professional Service Firm/Beliefs/Professional Service Firm/Beliefs

ProfessionProfession: : Calling/Passion to make aCalling/Passion to make a difference/Excellence difference/Excellence (always)(always)

point of viewpoint of view: : know exactly what weknow exactly what we stand for/ stand for/ “Dramatic “Dramatic Difference”Difference”

ClientClient: : enduring, test-the-limits enduring, test-the-limits relationship/Trusted advisor relationship/Trusted advisor

SolutionSolution: : Rock His-her World/ Rock His-her World/ “wow”“wow”// implemented “Culture implemented “Culture change”/change”/ >>>>>> “satisfaction” >>>>>> “satisfaction”

“Purchasing Officer” Thrust #1: Cost (at All Costs*) Minimization

Professional? Or/to: FullFull Partner-Partner-Leader in Lifetime Leader in Lifetime

Value-added Value-added MaximizationMaximization?

(*Lopez: “Arguably ‘Villain #1’ in GM tragedy”/Anon VSE-Spain)

Fleet Manager

Rolling Stock Cost Minimization Officer

vs/or

Chief of Fleet LifetimeChief of Fleet Lifetime Value Value MaximizationMaximization

StrategicStrategic Supply-chain Executive Supply-chain Executive

Customer Customer ExperienceExperience Director Director (via drivers)

22mm3838ss

HCare CIO: “Technology Executive” (workin’ in a hospital)

Or/to: Full-scale, Full-scale, AccountableAccountable (life or death)

Member-Partner of XYZ Member-Partner of XYZ Hospital’s Hospital’s Senior Senior HealinHealingg-Services -Services TeamTeam (who happens to be a techie)

PSF Transformation: Credit Department/Trek

Was Is

Credit Dept Financial ServicesFinancial Services

Hammer on dealers until Make dealers successful so theyMake dealers successful so theythey pay CAN payCAN pay

AR sold to 3rd party Trek is the commercial financialTrek is the commercial financialcommercial co. CompanyCompany

23 employees 12 employees12 employees

Oversee peak AR of $70M Oversee peak AR of $160MOversee peak AR of $160M

Identify risky dealers Identify opportunitiesIdentify opportunities

Cost Center Profit CenterProfit Center

No products Products: Consulting, MC/Visa,Products: Consulting, MC/Visa, Stored value of gift cards, Gift cardStored value of gift cards, Gift card peripherals, Online paymentsperipherals, Online payments

Source: John Burke/0330.06

Photographer: Louise Roach

Big Idea:

“Corporation” as “Corporation” as

Mega-“PSFMega-“PSF”” (Professional (Professional Service Firm*)Service Firm*)

* “Virtual” Collection of Entrepreneurially-minded Professionals (“Talent”/“Roster”)

Creating/Applying Intellectual Capital (“Work Product”)

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?

Core Mechanism:“Game-changing Solutions”

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

+

Wow! Project(s)Wow! Project(s) (“Different” vs “Better”/The Work)

==

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

=

“Corporation” as“Corporation” as

“Mega-“Mega-PSF”PSF”

Photographer: Mike Brake

The FEVP/Fundamental EnterThe FEVP/Fundamental Enterpprise Value-Added rise Value-Added Proposition-EProposition-Eqquation/Mark2007uation/Mark2007

(1) 100% (1) 100% “WOW PROJECTS”“WOW PROJECTS” (New Org “DNA”/“The Work”)(New Org “DNA”/“The Work”)

++ (2) Incredible (2) Incredible “TALENT”“TALENT” Transformed intoTransformed into (3) Entrepreneurial (3) Entrepreneurial “BRAND YOUs”“BRAND YOUs” and and

(4) Given Room-to-Roam & Launched on(4) Given Room-to-Roam & Launched on Awesome Awesome “QUESTS”“QUESTS”

== (5) Internal (5) Internal ““Rockin’ PSFs”Rockin’ PSFs” (Staff Depts. Morphed into (Staff Depts. Morphed into

Wildly Innovative Wildly Innovative PProfessional rofessional SService ervice FFirms) … irms) … (6) Which Coalesce to Transform the FEVP/Fundamental Enterprise (6) Which Coalesce to Transform the FEVP/Fundamental Enterprise

Value Proposition from “Superior Products & Services” to Value Proposition from “Superior Products & Services” to “ENCOMPASSING SOLUTIONS” “ENCOMPASSING SOLUTIONS” &&

“GAME-CHANGING CLIENT“GAME-CHANGING CLIENT SUCCESS” SUCCESS”

Big Idea/“Meta”-Idea/Premier “Engine of Value Added”

(1) (1) The TalentThe Talent: “Best Roster” of Entrepreneurial-: “Best Roster” of Entrepreneurial-minded minded Brand Yous.Brand Yous.

(2) (2) The (Virtual) OrganizationThe (Virtual) Organization: Internal or : Internal or External External “PSF”/Professional Service Firm“PSF”/Professional Service Firm

working with “Best Anywhere” = Engine of working with “Best Anywhere” = Engine of Value Added through the Application of Creative Value Added through the Application of Creative

“Intellectual Capital”“Intellectual Capital”

(3) (3) The Work ProductThe Work Product: “Game Changer”/ : “Game Changer”/ “Gaspworthy” “Gaspworthy” WOW ProjectsWOW Projects

“… “… but I'm having a hard timebut I'm having a hard time imagining 300 million Brand Yous.”imagining 300 million Brand Yous.”

““Would you call a clerk in a purchasing Would you call a clerk in a purchasing department at a big insurance company department at a big insurance company

"brand you"? Probably not. But what "brand you"? Probably not. But what about a single Hispanic Mom, age 32, about a single Hispanic Mom, age 32,

raising 3 kids in the LA area and holding raising 3 kids in the LA area and holding 2.5 jobs to do so? I'd call her a hero, self-2.5 jobs to do so? I'd call her a hero, self-

reliant, resilient--and a Brand You!”reliant, resilient--and a Brand You!”

Posted by tom peters at November 20, 2006 10:16 PM

The WOWWOW!! Project.

Core Mechanism:“Game-changing Solutions”

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

+

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

+

Wow! Wow! ProjectsProjects

(“Different” vs “Better”/The Work)

““Let’s make Let’s make a dent in the a dent in the universe!”universe!” —Steve

Jobs

Your Current Project?

1. Another day’s work/Pays the rent.4. Of value.7. Pretty Damn Cool/Definitely subversive.10. WE AIM TO CHANGE THEWE AIM TO CHANGE THE WORLD. WORLD. (Insane!/Insanely(Insane!/Insanely Great!/WOW!) Great!/WOW!)

““Astonish me!”Astonish me!” (S.D).

“Build something great!”“Build something great!” (H.Y.).

“Make it immortal!”“Make it immortal!” (D.O.)

If you are not If you are not prepared to be prepared to be fired over your fired over your

beliefs … you are beliefs … you are working on the working on the

wrong project.wrong project. —TP

You! =You! = Your Project Your Project

Portfolio!Portfolio!

A “position” is A “position” is

notnot an an

“accomplishment.”“accomplishment.” —TP

Will you actually Will you actually remember it as remember it as worthwhile worthwhile 10 10

yearsyears from now?” from now?” —S.H.

WOWWOW!! Projects:

Nuts & Bolts (a few)

““Every project we undertake starts with Every project we undertake starts with

the same question:the same question: ‘‘How can How can we do what has we do what has never been done never been done beforebefore?’”?’” —Stuart Hornery, Lend Lease—Stuart Hornery, Lend Lease

Playmate!*Playmate!*Playpen!Playpen!

Prototype!Prototype!

*Can be Client, supplier … as well as Insider

Where to look for “Playmates”:

F.F.F.F.F.F.F.F. (Find a Fellow Freak Faraway)

F2FF2F!/!/f2fKf2fK!/!/1@T1@T//R.F!A.R.F!A.***Freak-to-Freak/Freak-to-Freaky Kustomer/ One at a Time/ Ready.Fire!Aim.*Freak-to-Freak/Freak-to-Freaky Kustomer/ One at a Time/ Ready.Fire!Aim.

Forward, march: : The The “Sri Lanka “Sri Lanka Stratagem”Stratagem”

Where NOT to look for “Playmates”: BIGBIG Division, BIGBIG Customer, BIGBIG Vendor,

UPUP

Culture of Prototyping

“Effective prototyping may be

the most valuable core the most valuable core competencecompetence an innovative

organization can hope

to have.” —Michael Schrage

Starting a WOWWOW!! Projects Projects

Epidemic:Epidemic:

Demos, Heroes, Demos, Heroes, Stories!Stories!

Premise:

““Ordering” Ordering” Systemic Systemic

Change is a Change is a Waste of Waste of

Time!Time!

“Somewhere in your organization, groups of

people are already doing things differently and

better. To create lastinTo create lastingg chanchangge, find these areas of e, find these areas of ppositive deviance and fan ositive deviance and fan

the flamesthe flames.”.” —Richard Tanner Pascale & Jerry Sternin, “Your Company’s Secret Change Agents,” HBR

JKCJKC

JKC

1. Scour for renegades; wine & dine.

2. Go outside for funds.

Demo = Story“A key – perhaps the key –

to leadership is thethe effective communication effective communication

of a storof a story.”y.”—Howard Gardner, Leading Minds:

An Anatomy of Leadership

Best Best story story wins!wins!

REAL Org Change: Demos & ModelsDemos & Models (“Model (“Model

Installations,” “ReGo Labs”)/ Installations,” “ReGo Labs”)/ HeroesHeroes (mostly extant: “burned to (mostly extant: “burned to

reinvent gov’t”)/ reinvent gov’t”)/ StoriesStories && StorytellersStorytellers (Props!)/ (Props!)/

ChroniclersChroniclers (Writers, Videographers, Pamphleteers, Etc.)/ (Writers, Videographers, Pamphleteers, Etc.)/

CheerleadersCheerleaders && RecognitionRecognition (Pos>>Neg, Volume)/ (Pos>>Neg, Volume)/

New LanguageNew Language (Hot/Emotional/WOW)/ (Hot/Emotional/WOW)/ SeekersSeekers

(networking mania)/ (networking mania)/ ProtectorsProtectors/ / Support GroupsSupport Groups/ /

End Runs—“Pull Strategy”End Runs—“Pull Strategy” (weird alliances, weird (weird alliances, weird

customers, weird suppliers, weird alumnae-JKC)/ customers, weird suppliers, weird alumnae-JKC)/ Field “Real Field “Real People” FocusPeople” Focus (3 COs) (long way away)/(3 COs) (long way away)/

SpeedSpeed (O.O.D.A. Loops—act before the “bad guys” can react) (O.O.D.A. Loops—act before the “bad guys” can react)

C.f., Bob Stone, C.f., Bob Stone, Lessons from an Uncivil ServantLessons from an Uncivil Servant

“Some people look for things that went wrong

and try to fix them. II look for thin look for thinggs that s that

went riwent rigght, and trht, and tryy to to build off thembuild off them.”.” —Bob Stone

(Mr ReGo)

Demos!Demos! Heroes! Heroes! Stories!Stories!

““Make your ownMake your own McKinsey”McKinsey” (AP)

Build a “School on top of a school”/Continuing-Exec

Ed (The Parallel (The Parallel Universe Strategy)Universe Strategy)

Stories … Stories … Paint me a Paint me a picturepicture … Story … Story

“infrastructure” … “infrastructure” … Demos Demos … Quick … Quick prototypes … prototypes …

ExperimentsExperiments … Heroes … … Heroes … Renegades Renegades … …

Skunkworks … Demo Skunkworks … Demo Funds … Funds … V.C.V.C. … G.M. … … G.M. … RosterRoster … Portfolio … … Portfolio … Stone’s Rules … Stone’s Rules … JKC’s JKC’s

RulesRules

Tempo:Tempo: He who He who has the has the quickest quickest

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

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

Subversive Change

Be(very)ware “genetic constraints” (history’s looong Be(very)ware “genetic constraints” (history’s looong arm)arm)

You must “do” GandhiYou must “do” Gandhi

Hire weird (fulltime or temp)Hire weird (fulltime or temp)

Find the extant crazies (troll for them via offers to join Find the extant crazies (troll for them via offers to join weird project teams)weird project teams)

Create a (quiet) “Crazies Club”/Keep extendin’ the WebCreate a (quiet) “Crazies Club”/Keep extendin’ the Web

Create “boondocks projects” by the truckload (with Create “boondocks projects” by the truckload (with partners of every flavor)partners of every flavor)

Understand: Yours is a “protection racket”Understand: Yours is a “protection racket”Sky High Standards!! (There’s a deadly serious reason Sky High Standards!! (There’s a deadly serious reason

for “all this”—life or death)for “all this”—life or death)

TP Heroes: Allan Puckett; Bob Stone; Jill Ker Conway; TP Heroes: Allan Puckett; Bob Stone; Jill Ker Conway; Kelly Johnson; John BoydKelly Johnson; John Boyd

SP: “But can you turn a ‘defensive player’ into an ‘offensive player’?”

TP: ““YesYes! Work with him/her to re-frame ! Work with him/her to re-frame their principal project to the point that their principal project to the point that their their eeggoo is fully engaged and it becomes is fully engaged and it becomes something of a ‘life compulsion.’something of a ‘life compulsion.’ ” *

* “If you and I had $150K in the bank and on the line and the day before the opening the Fire Inspector …”

EXEXCELLE CELLE ALWALWAYSAYS..

EXEXCELLENC CELLENC

ALWALWAYSAYS..End.End.

PART PART THREETHREE..