CONRAD S COMMANDMENT CONRAD HILTON at a gala

CONRAD’S COMMANDMENT

CONRAD HILTON, at a gala celebrating his career, was called to the podium and asked, “What were the most important lessons you learned in your long and distinguished career? ” His answer …

“Remember to tuck the shower curtain inside the bathtub. ”

Tom Peters’ ! RE-IMAGINE EXCELLENCE/2017 Washington Federal CEO Forum 09 December 2016 (This presentation/10+ years of presentation slides at tompeters. com; also see our annotated 23 -part Monster-Master at excellencenow. com)

BE THE BEST: IT’S THE ONLY MARKET THAT’S NOT CROWDED

AND THE WINNERS AREN’T/ARE

“I am often asked by would-be entrepreneurs seeking escape from life within huge corporate structures, ‘How do I build a small firm Buy a very large one and just wait. ” for myself? ’ The answer seems obvious: —Paul Ormerod, Why Most Things Fail “Mr. Foster and his Mc. Kinsey colleagues collected detailed performance data stretching back 40 years for NONE 1, 000 U. S. companies. They found that of the longterm survivors managed to outperform the market. Worse, the longer companies had been in the database, the worse they did. ” —Financial Times

AND THE WINNERS AREN’T/ARE

Retail Superstars: Inside the 25 Best Independent Stores in America —by George Whalin

JUNGLE JIM’S INTERNATIONAL MARKET, FAIRFIELD, OHIO: “An adventure in ‘shoppertainment’ [shopping + entertainment] begins in the parking lot and goes on to cheeses and 1, 400 from varieties of hot sauce—not to mention $8 -$8, 000 priced 1, 600 12, 000 /bottle; all this is brought to you by wines 4, 000 vendors. Customers from every corner of the globe. ” Award: “AMERICA’S BEST RESTROOM. ” Retail Superstars: Inside the 25 Best Independent Stores in America Source: George Whalin,

* MITTELSTAND *“agile creatures darting between the legs of the multinational

Hidden Champions* of the 21 st Century: Success Secrets of Unknown World Market Leaders/ Hermann Simon (*1, 2, or 3 in world market; <$4 B; low public awareness) Baader (Iceland/80% fishprocessing systems) Gallagher (NZ/electric fences) W. E. T. (heated car seat tech) Gerriets (theater curtains and stage equipment) Electro-Nite (sensors for the steel industry) Essel Propack (India/tooth paste tubes) SGS (product auditing and certification) DELO (speciality adhesives) Amorim (Portugal/cork products) EOS (laser sintering) Beluga (heavy-lift shipping) Omicron (tunnel-grid microscopy) Universo (wristwatch hands) Dickson Constant (technical textiles) O. C. Tanner (employee recognition/$400 M) Hoeganaes (powder metallurgy supplies)

Michael Raynor and Mumtaz Ahmed: THE THREE RULES: How Exceptional Companies Think*: BETTER before cheaper. 2. REVENUE before cost. 3. There are no other rules. 1. (*FIVE-YEAR PROJECT: From a database of over 25, 000 companies from hundreds of industries covering 45 years, they uncovered 344 companies that qualified as statistically “exceptional”—then a final 27) Jeff Colvin, Fortune: “The Economy Is Scary … But Smart Companies Can Dominate”: They manage for VALUE—not for EPS. They get radically CUSTOMER-CENTRIC. They keep DEVELOPING HUMAN CAPITAL.

The Metro Bank Model “Are you going to COST CUT your way to prosperity? ” (“Cost-cutting is a death spiral. ”) Or … “Are you going to SPEND* your way to prosperity? ” (“Our whole story is growing revenue. ”) ( Source: Vernon Hill, Fans! Not Customers. How to Create Growth Companies in a No Growth World *Including 2, 000+ dog biscuits/year

The local plumber or electrician does not provide a “commodity service” … if if he knows his job he is learning new tricks all the time he has a good disposition he shows up on time he is neatly dressed he has s spiffy truck he cleans up so that the client could “eat off the floor” after he leaves if he volunteers to do a few tiny tasks outside the one at hand— gratis If he even goes so far as to create a blog with occasional posts featuring practical tips for his clientele—e. g. , a tiny Virginia swimming pool company became a literal worldbeater adopting this social-media strategy

Going “Social”: Location and Size Independent “Today, despite the fact that we’re just a little swimming pool company in Virginia, we have the most trafficked swimming pool website in the world. Five years ago, if you’d asked me and my business partners what we do, the answer would have been simple, ‘We build in-ground ‘We are the best teachers … in the world … on the fiberglass swimming pools. ’ Now we say, subject of fiberglass swimming pools, and we also happen to build them. ’” —Jay Baer, Youtility: Why Smart Marketing Is About Help, Not Hype outility:

“BE THE BEST. IT’S THE ONLY MARKET THAT’S NOT CROWDED. ”* *From: Retail Superstars: Inside the 25 Best Independent Stores in America, George Whalin

SEVEN VALUE-ADDED STRATEGIES

D-Day: ! 10 August 2011

! Design RULES APPLE market cap > Exxon Mobil* *10 August 2011

DESIGN IS THE FUNDAMENTAL SOUL OF A MAN-MADE CREATION. ” —Steve Jobs “He said for him the craft of building a boat was like a religion. It wasn’t enough to master the technical details of it. You had to give yourself up to it spiritually; you had to surrender yourself absolutely to it. When you were done and walked away, you had to feel that you had left a piece of yourself behind in you forever, a bit of your heart. ” —On the world’s premier racing shell builder, George Yeoman Pocock, in Daniel Brown, THE BOYS IN THE BOAT: Nine Americans and Their Epic Quest for Gold at the 1936 Berlin Olympics

Hypothesis: Men cannot design for women’s !!? ? needs

Women Buy [Everything]

Women Buy [Everything] !

W > 2 X (C + I) = $28 TRILLION “Forget CHINA, INDIA and the INTERNET: Economic Growth Is Driven by WOMEN. ” Source: Headline, Economist

Women as Decision Makers/Various sources Home Furnishings … 94% Vacations … 92% (Adventure Travel … 70%/ $55 B travel equipment) Houses … 91% D. I. Y. (major “home projects”) … 80% Consumer Electronics … 51% (66% home computers) Cars … 68% (influence 90%) All consumer purchases … 83% * Bank Account … 89% 67% Small business loans/biz starts … 70% Health Care … 80% Household investment decisions … *In the USA women hold >50% managerial positions including >50% purchasing officer positions; hence women also make the majority of commercial purchasing decisions.

“Women are THE majority market” —Fara Warner/The Power of the Purse What needs to change to take advantage of this? EVERYTHING: Product design, distribution, marketing, culture (Take the … “squint test. ” )

We [old folks] Have the [all] $$$$$$

We [old folks] Have [all] $$$$$$ ] the

109 M > 50: 1 BOOMER for the next 20 YEARS 50@50: turns AGE 65 every 8 SECONDS “PEOPLE TURNING MORE THAN HALF OF THEIR 50 TODAY HAVE ADULT LIFE AHEAD OF THEM. ”* Source; Bill Novelli, 50+: IGNITING A REVOLUTION TO REINVENT AMERICA (*The >50 7/13 Rule. )

“In 2009, households headed by adults ages 65 and older. . . had 47 times as much net wealth as the typical household headed by someone under 35 years of age. In 1984, this had been a less lopsided 10 -to-1 ratio. ” Source: Pew Research/10. 11

>50: 50% spending/10% marketing budgets 44 -65: “NEW CUSTOMER MAJORITY” Source: Ageless Marketing, David Wolfe & Robert Snyder

Value-Added on Steroids: The [ENORMOUS] [UBIQUITOUS] “Services Added” Opportunity

“Rolls-Royce now earns MORE from tasks such as managing clients’ overall procurement strategies and maintaining aerospace engines it sells than it does from making them. ” —Economist

UPS to UPS: UPS = United Problem Solvers* ** *Service Mark **Parcels to Services/Turnkey supply-chain management

Distributor/“Middleman” to Systems Maestros* Systemic value-added strategists for total Client operations Integrated Systems Operators/Managers Systemic productivity and technology improvement strategy and management Systemic quality management Client employee training High value-added subcontractors/Full-scale partners for a myriad of Client needs—i. e. , a de facto General Store, ready to do any damn thing the Client would like to have done And/or: WE’LL HELP YOU TAKE OUT THE GARBAGE IF YOU WISH! *Requisite: MEGA-Culture Change/ Professional Service Firm “model”

Social Business/ Customer Engagement/ Customer Control/

Welcome to the Age of Social Media “The customer is in complete control of communication. ” “What used to be “word of mouth” is now “word of mouse. ” You are either creating brand ambassadors or brand terrorists doing brand assassination. ” “IT TAKES 20 YEARS TO BUILD A REPUTATION AND 5 MINUTES TO RUIN

DO YOU TWEET? “I would rather engage in a Twitter conversation with a single customer than see our company attempt to attract the attention of millions in a coveted Super Bowl commercial. Why? Because having people discuss your brand directly with you, actually connecting one-to-one, is far more valuable—not to mention far cheaper!. … “Consumers want to discuss what they like, the companies they support, and the organizations and leaders they resent. They want a community. They want to be heard. “[I]f we engage employees, customers, and prospective Customers n meaningful dialogue about their lives, challenges, interests, and concerns, we can build a community of trust, loyalty, and—possibly over time —help them become advocates and champions for the brand. ” —Peter Aceto, CEO, Tangerine (from the Foreword to A World Gone Social, by Ted Coine & Mark Babbit) (FYI: Also see Peter Aceto’s book Weology. )

[BIG] Data = ! [BIG] $$$

“Caesars’ Entertainment have bet their future on harvesting personal data rather than developing the fanciest properties. ” —Adam Tanner, What Stays in Vegas: The World of Personal Data—Lifeblood of Big Business—and the End of Privacy as We Know it

Io. T/ Io. E Internet of Things Internet of Everything

2016: GE goes ! to Boston

2025: 100, 000, 000

TWO INNOVATION STRATEGIES

50: INNOVATION I/Lesson WTTMSW

WHOEVER TRIES THE MOST STUFF WINS

READY. FIRE! AIM. H. Ross Perot (vs “Aim!”/EDS vs GM/1985)

“What really matters is that companies that don’t continue to COMPANIES THAT DON’T experiment— EMBRACE FAILURE — eventually get in a desperate position, where the only thing they can do is make a ‘Hail Mary’ bet at the end. ” —Jeff Bezos

WTTMSASTMSUTFW

WHOEVER TRIES THE MOST STUFF AND SCREWS THE MOST STUFF UP THE FASTEST WINS

REQUISITE: A “TRY IT” “CULTURE” “You can’t be a serious innovator unless and until you are ready, willing and able to seriously play. ‘Serious play’ is not an oxymoron; it is the essence of innovation. ” —Michael Schrage, Serious Play

Major Innovations Cost Major $$. NOT. Big[ger] carts = 1. 5 X = $$$$ Source: Walmart

“EXPERIMENT FEARLESSLY” Source: Business. Week, “Type A Organization Strategies: How to Hit a Moving Target”— TACTIC #1 “RELENTLESS TRIAL AND ERROR”* (*Even BACH) Source: Wall Street Journal, cornerstone of effective approach to “rebalancing” company portfolios in the face of changing and uncertain global economic conditions

We Are What We Eat. We Are Who We Spend Time With.

“You will become like the five people you associate with the most—this can be either a blessing or a curse. ” —Billy Cox

The “We are what we eat”/ “We are who we hang out with” every !!! Axiom: At its core, ( ) relationship-partnership decision (employee, vendor, customer, etc. , strategic etc. ) is a decision about: “Innovate, ‘Yes’ or ‘No’ ”

“The Bottleneck is at the … “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 … Top of the Bottle” — Gary Hamel/Harvard Business Review

10 -Person BOARD OF DIRECTORS/Fit for the 2017 **AT LEAST TWO MEMBERS UNDER AGE 30. (Youth must be served/guide us at-the-top circa 2017—this is rare!!) **AT LEAST THREE WOMEN. (Boards with F-M balance lead to very high relative performance. ) **ONE IT/DATA ANALYTICS/SOCIAL MEDIA SUPERSTAR. (Not an “IT representative, ” but a Certified “Waterwalker” from, say, Google. ) **ONE OR TWO ENTREPRENEURS—AND PERHAPS A VC. (The entrepreneurial bent must directly infiltrate the board. ) **ONE PERSON OF STATURE WITH A “WEIRD” BACKGROUND— ARTIST, MUSICIAN, SHAMAN, ETC. (We need regular uncomfortable oddball challenges. ) **A CERTIFIED “DESIGN GURU. ” (Design presence at Board level is simply a must in my scheme of things. ) **NO MORE THAN ONE-TWO OVER 60. (Too many Oldie Boards! Stop. NOW. ) **NO MORE THAN THREE WITH MBAs. (Why? The necessity of moving beyond the emphases of the MBA-standard-predictable-linearanalytic-certified-vanilla model. ) (Partial inspiration for this: Cybernetics pioneer W. ROSS ASHBY’S “LAW OF REQUISITE VARIETY. ” The diversity of the Board should more or less match [be consistent with] the diversity [madness/2017] of the context/environment. )

PEOPLE [R-E-A-L-L-Y] FIRST

Putting People [REALLY] First

“PEOPLE BEFORE STRATEGY” —title, Harvard Business Review July 2015, by Mc. Kinsey MD Dominic Barton et al. “YOU HAVE TO TREAT YOUR EMPLOYEES LIKE CUSTOMERS. ” —Herb Kelleher “What employees experience, Customers will. The best YOUR CUSTOMERS WILL NEVER BE ANY HAPPIER THAN YOUR EMPLOYEES. ” marketing is happy, engaged employees. —John Di. Julius, The Customer Service Revolution:

Rocket Science. NOT. “If you want staff to give great service, give great service to staff. ” —Ari Weinzweig, Zingerman’s Source: Small Giants: Companies That Choose to Be Great Instead of Big, Bo Burlingham

EXCELLENT customer experience depends … entirely … on EXCELLENT employee experience! If you want to WOW your customers, FIRST you must WOW those who WOW the customers!

! 7/12 ( ) 1996 -2014/Twelve companies have been among the “ 100 best to work for” in the USA every year, for all 18 years of the list’s existence; along the way, they’ve added 341, 567 new jobs, or job growth of +172%: Publix Whole Foods Wegmans Nordstrom Cisco Systems Marriott REI Goldman Sachs Four Seasons SAS Institute W. L. Gore TDIndustries Source: Fortune/ “The 100 Best Companies to Work For”/0315. 15

Profit Through Putting People First Business Book Club Nice Companies Finish First: Why Cutthroat Management Is Over—and Collaboration Is In, by Peter Shankman with Karen Kelly Uncontainable: How Passion, Commitment, and Conscious Capitalism Built a Business Where Everyone Thrives, by Kip Tindell, CEO Container Store Conscious Capitalism: Liberating the Heroic Spirit of Business, by John Mackey, CEO Whole Foods, and Raj Sisodia Firms of Endearment: How World-Class Companies Profit from Passion and Purpose, by Raj Sisodia, Jag Sheth, and David Wolfe The Good Jobs Strategy: How the Smartest Companies Invest in Employees to Lower Costs and Boost Profits, by Zeynep Ton, MIT Joy, Inc. : How We Built a Workplace People Love, by Richard Sheridan, CEO Menlo Innovations Employees First, Customers Second: Turning Conventional Management Upside Down, by Vineet Nayar, CEO, HCL Technologies Patients Come Second: Leading Change By Changing the Way You Lead by Paul Spiegelman & Britt Berrett The Customer Comes Second: Put Your People First and Watch ’ Em Kick Butt, by Hal Rosenbluth, former CEO, Rosenbluth International It’s Your Ship: Management Techniques from the Best Damn Ship in the Navy, by Mike Abrashoff, former commander, USS Benfold Turn This Ship Around; How to Create Leadership at Every Level, by L. David Marquet, former commander, SSN Santa Fe Small Giants: Companies That Choose to Be Great Instead of Big, by Bo Burlingham Hidden Champions: Success Strategies of Unknown World Market Leaders , by Hermann Simon Retail Superstars: Inside the 25 Best Independent Stores in America , by George Whalin Joy at Work: A Revolutionary Approach to Fun on the Job, by Dennis Bakke, former CEO, AES Corporation The Dream Manager, by Matthew Kelly The Soft Edge: Where Great Companies Find Lasting Success, by Rich Karlgaard, publisher, Forbes Delivering Happiness: A Path to Profits , by Tony Hseih, Zappos Camellia: A Very Different Company Fans, Not Customers: How to Create Growth Companies in a No Growth World , by Vernon Hill Like a Virgin: Secrets They Won’t Teach You at Business School , by Richard Branson

Hiring

“We look for. . . listening, caring, smiling, saying ‘Thank you, ’ being warm. ” — Colleen Barrett, former President, Southwest Airlines

“The ultimate filter we use [in the hiring process] is that we only hire nice people. … When we finish assessing skills, we do something called ‘running the gauntlet. ’ We have them interact with 15 or 20 people, and everyone of them have what I call a ‘blackball vote, ’ which means they can say if we should not hire that person. I believe in culture so strongly and that one bad apple can spoil the bunch. There are enough really talented people out there who are nice, you don’t really need to put up with people who act like jerks. ” —Peter Miller, CEO Optinose/pharmaceuticals

“It’s simple, really, Tom. Hire for s, and, above all, promote for s. ” —Starbucks regional manager, on why so many smiles at Starbucks shops

“I can’t tell you how many times we passed up hots for guys we thought were better people … and watched our guys do a lot better than the big names, not just in the classroom, but on the field—and, naturally, after they graduated, too. Again and again, the blue chips faded out, and our little up-andcomers clawed their way to all-conference and All-America teams. ” —Bo Schembechler & John Bacon, “Recruit for Character, ” from the book Bo’s Lasting Lessons

LISTENING. CARING. SMILING. SAYING “THANK YOU. ” BEING WARM. NICE. “BETTER PEOPLE. ”

“It may sound radical, unconventional, and bordering on being a crazy business idea. However— as ridiculous as it sounds—joy is the core belief of our workplace. Joy is the reason my company, Menlo Innovations, a customer software design and development firm in Ann Arbor, exists. It defines what we do and how we do it. It is the single shared belief of our entire team. ” Joy, Inc. : How We Built a Workplace People Love —Richard Sheridan,

Training = Investment 1! #

In the Army, 3 -star generals worry about training. In most businesses, it's a “hohum” mid-level staff function.

>> 8 of 10 CEOs, in 45 -min “tour d’horizon” of their biz, would NOT mention training. Bet #4:

st-Line 1 Leaders (Capital Asset #1 ? )

If the regimental commander lost most of his 2 nd lieutenants and 1 st lieutenants and captains and IF HE LOST HIS SERGEANTS IT WOULD BE A CATASTROPHE. The Army and majors, it would be a tragedy. the Navy are fully aware that success on the battlefield is dependent to an extraordinary degree on its Sergeants and Chief Petty Officers. Does industry have the same awareness?

! Women Rule

For One [BIG] Thing … “Mc. Kinsey & Company found that the international companies with more women on their corporate boards far outperformed the average company in return on equity and other measures. Operating profit was … 56% higher. ” Source: Nicholas Kristof, “Twitter, Women, and Power, ” NYTimes, 1024. 13

“Women are rated higher in fully 12 of the 16 competencies that go into outstanding leadership. And two of the traits where women outscored men to the highest degree — taking initiative and driving for results — have long been thought of as particularly male strengths. ” —Harvard Business Review/2014

“Research suggests that to succeed, start by promoting women. ” [by Mc. Kinsey & Co. ] —Nicholas Kristof, NYTimes

Women’s Negotiating Strengths *Ability to put themselves in their counterparts’ shoes *Comprehensive, attentive and detailed communication style *Empathy that facilitates trust-building *Curious and attentive listening *Less competitive attitude *Strong sense of fairness and ability to persuade *Proactive risk manager *Collaborative decision-making Source: Horacio Falcao, Cover story/May 2006, World Business, “Say It Like a Woman: Why the 21 st-century negotiator will need the female touch”

“TAKE THIS QUICK QUIZ: Who manages more QUIZ 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? ” Selling Is a Woman’s Game: 15 Powerful Reasons Why Women Can Outsell Men, Nicki Joy & Susan Kane-Benson Source/from the back cover:

Portrait of a Female Investor 1. Trade less than men do 2. Exhibit less overconfidence—more likely to know what they don’t know 3. Shun risk more than male investors do 4. Less optimistic, more realistic than their male counterparts 5. Put in more time and effort researching possible investments—consider details and alternate points of view 6. More immune to peer pressure—tend to make decisions the same way regardless of who’s watching 7. Learn from their mistakes 8. Have less testosterone than men do, making them less willing to take extreme risks, which, in turn, could lead to less extreme market cycles Warren Buffett Invests Like a Girl: And Why You Should Too, Louann Lofton, Chapter 2, “The Science Behind the Girl” Source:

THE MORAL IMPERATIVE: PEOPLE DEVELOPMENT

“Almost half of U. S. jobs are at high risk of computerization over the next 20 years, according to Oxford academics Carl Benedikt Frey and Michael A. Osborne. ” —Harriet Taylor/CNBC/9 March 2016

“The median worker is losing the race against the machine. ” * —Erik Brynjolfsson and Andrew Mc. Afee, Race AGAINST the Machine (*“Occupations intensive in tasks that can easily be computerized are usually in the middle class. ”/MIT’s David Autor) “If you think being a ‘professional’ makes your job safe, think again. ”

Your principal moral obligation as a leader is to develop the skillset, “soft” and “hard, ” of every one of the people in your charge (temporary as well as semi-permanent) to the maximum extent of your abilities. The bonus: This is also the #1 mid- to long-term … profit maximization strategy! CORPORATE MANDATE #1 2016:

1/4, 096: excellencenow. com “Business has to give people enriching, or it's simply not worth doing. ” rewarding lives … —Richard Branson

FOUR LEADERSHIP TACTICS

MBWA 25 (Managing By Wandering Around)

“I’m always stopping by our at least a week. stores— 25 I’m also in other places: Home Depot, Whole Foods, Crate & Barrel. I try to be a sponge to pick up as much as I can. ” —Howard Schultz Source: Fortune, “Secrets of Greatness”

“If I had to #1 pick the failing of CEOs, it’s that …

“If I had to pick one failing of they don’t read enough. ” CEOs, it’s that …

“I ‘DO’ PEOPLE”

Les Wexner: FROM FASHION TRENDS GURU TO JOY FROM PICKING/ DEVELOPING PEOPLE!* *Limited Brands founder Les Wexner queried on astounding (>>Welch) longterm growth & profitability: It happened, he said, “I got as excited about developing people” because as he had been about predicting fashion trends in his early years.

1 Mouth, 2 Ears

“The doctor interrupts after …* *Source: Jerome Groopman, How Doctors Think

… 18 seconds!

Suggested Core Value #1: “We are Effective Listeners—we treat Listening EXCELLENCE as the Centerpiece of our Commitment to Respect and Engagement and Community and Growth. ”

Part ONE: LISTEN* (pp 11 -116, of 364) *“The key to every one of our [eight] leadership attributes was the vital importance of a leader’s ability to listen. ” (One of Branson’s personal keys to listening is notetaking—he has hundreds of notebooks. ) Source: Richard Branson, The Virgin Way: How to Listen, Learn, Laugh, and Lead

“Never miss a good chance to shut up. ” —Will Rogers