Digger the Dermatophyte Lamisil Novartis 4 110 M 3 X in 10

Digger the Dermatophyte* *Lamisil/Novartis/#4/$110 M/3 X in 10 to 100, 000 1

Tom Peters’ Re-Imagine! Leading Change! Developing Talent! Driving Innovation! Adding Value! Achieving Excellence! Epsilon/Quail Lodge/0502. 2006

Unglued. 3

Chicagoland’s Mystery Disappearances … 4

“Deutsche Bank Moves Half of Its Back-office Jobs to India”/ headline/FT/0327. 06; 500 900 Research; of JPMorgan Chase— 30% backoffice by 12. 31. 07 5

New Economy? Sergey, Larry > Harvard/370 6

New Economy? Sergey, Larry > Harvard/370 7

New Economy? Genentech 09, Amgen 09 > Merck 09 (70 K-3/394 B-5) 8

One Answer. 9

“A focus on cost-cutting and efficiency has helped many organizations weather the downturn, but this approach will ultimately Only the constant pursuit of innovation can ensure long-term success. ” render them obsolete. —Daniel Muzyka, Dean, Sauder School of Business, Univ of British Columbia (FT/09. 17. 04) 10

The General’s Story. (And Darwin’s) 11

“If you don’t like change, you’re going to like irrelevance even less. ” —General Eric Shinseki, Chief of Staff. U. S. Army 12

“It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change. ” —Charles Darwin 13

My Story. 14

“In Tom’s world, it’s always better to try a swan dive and deliver a colossal belly flop than to step timidly off the board while holding your nose. ” —Fast Company /October 2003 15

1. Re-imagine Permanence: The Naked Emperor Problem! 16

Pathetic! 17

“Forbes 100” from 1917 to 1987: 39 members of the Class of ’ 17 were alive in ’ 87; 18 in ’ 87 F 100; 18 F 100 “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 18

“I am often asked by would-be entrepreneurs seeking escape from life within huge corporate structures, ‘How do I build a small firm for Buy a very large one and just wait. ” myself? ’ The answer seems obvious: —Paul Ormerod, Why Most Things Fail: Evolution, Extinction and Economics 19

Lessons Learned. GE. Me.

4/40

De-central-iza-tion!

Ex-ecu-tion!

Ac-counta-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: 15 A. M.

2. Re-imagine: Innovate or Die!! 27

Resist! 28

“Not a single company that qualified as having made a sustained transformation ignited its leap with a big acquisition or merger. Moreover, comparison companies—those that failed to make a leap or, if they did, failed to sustain it— often tried to make themselves great with a big acquisition or merger. They failed to grasp the simple truth that while you can buy your way to growth, you cannot buy your way to greatness. ” —Jim Collins/Time/2004 29

There’s “A” and then there’s “A. ” 30

Scale? 31

“I don’t believe in economies of You don’t get better by being bigger. You get worse. ” scale. —Dick Kovacevich/Wells Fargo/Forbes/08. 04 (ROA: Wells, 1. 7%; Citi, 1. 5%; Bof. A, 1. 3%; J. P. Morgan Chase, 0. 9%) 32

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 33

Spinoffs perform better than IPOs … track record, profits … “freed from the confines of the parent … more entrepreneurial, more nimble” —Jerry Knight/Washington Post/08. 05 34

Market Share, Anyone? 240 industries: Market-share leader is ROA leader 29% of the time Source: Donald V. Potter, Wall Street Journal 35

Market Share, Anyone? — 240 industries; market-share leader is ROA leader 29% of the time — Profit / ROA leaders: “aggressively weed out customers who generate low returns” Source: Donald V. Potter, Wall Street Journal 36

Different!* *“Dramatic Difference” (DH), “Remarkable Point of view” (SG) 37

Franchise Lost! TP: “How many of you really [600] crave a new Chevy? ” NYC/IIR/061205 38

This is not a “mature category. ” 39

This is an “undistinguished category. ” 40

$798 41

7 X. 730 A 800 P. F 12 A. * *’ 93 -’ 03/10 yr annual return: CB: 29%; WM: 17%; HD: 16%. Mkt Cap: 48% p. a. 42

43

“It’s simple, really, Tom. Hire for s, and, above all, promote for s. ” —Starbucks middle manager/field 44

Cirque du Soleil! 45

Donnelly’s Weatherstrip Service Weymouth MA 46

Easy! 47

Innovation’s Saviors-in-Waiting Disgruntled Customers Off-the-Scope Competitors Rogue Employees Fringe Suppliers Wayne Burkan, Wide Angle Vision: Beat the Competition by Focusing on Fringe Competitors, Lost Customers, and Rogue Employees 48

We become who we hang out with! 49

Measure “Strangeness”/Portfolio Quality Staff Consultants Vendors Out-sourcing Partners (#, Quality) Innovation Alliance Partners Customers Competitors (who we “benchmark” against) Strategic Initiatives Product Portfolio (Line. Ex v. Leap) IS/IT Projects HQ Location Lunch Mates Language Board 50

Hard! 51

“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 52

More than $$$$ #1 R&D spending, last 25 years? 53

More than $$$$ GM Source: Michael Schrage, FT, 11. 05 54

BOLD! 55

“Beware of the tyranny of making Small Changes to Small Things. Rather, make Big Changes to Big Things. ” —Roger Enrico, former Chairman, Pepsi. Co 56

Five MYTHS About Changing Behavior *Crisis is a powerful impetus for change *Change is motivated by fear *The facts will set us free *Small, gradual changes are always easier to make and sustain *We can’t change because our brains become “hardwired” early in life Source: Fast Company/05. 2005 57

“Reward excellent failures. Punish mediocre successes. ” Phil Daniels, Sydney exec 58

Speed/ Tempo! 59

He who has the quickest O. O. D. A. Loops* wins! *Observe. Orient. Decide. Act. / Col. John Boyd 60

Action ! 61

“Execution is the job of the business leader. ” —Larry Bossidy & Ram Charan/ Execution: The Discipline of Getting Things Done 62

“Execution is a systematic process of rigorously discussing hows and whats, tenaciously following through, and ensuring accountability. ” —Larry Bossidy & Ram Charan/ Execution: The Discipline of Getting Things Done 63

“We have a ‘strategic plan. ’ It’s called doing things. ” — Herb Kelleher 64

Measurable! 65

Innovation Index: How many of your Top 5 Strategic Initiatives/Key Projects score 8 or higher (out of 10) on a “Weird”/ “Profound”/ “Wow”/“Game- changer” Scale? 66

Immelt on “Innovation breakthroughs”: Pull out and fund ideas in each business that will generate >$100 M in revenue; find best people to lead (80 throughout GE) Source: Fast Company/07. 05 67

Personal! 68

Buy a Mirror! Step #1: 69

“The First step in a ‘dramatic’ ‘organizational change program’ is obvious —dramatic personal change!” —RG 70

3. Re-imagine Organizing I: IS/IT as Disruptive Tool! 71

We all live in Dell-Wal*Marte. Bay-Google World! 72

Wal*Mart (!) & Katrina 73

“Ebusiness is about rebuilding the organization from the ground up. Most companies today are not built to exploit the Internet. Their business processes, their approvals, their hierarchies, the number of people they employ … all of that is wrong for running an ebusiness. ” —Ray Lane, Kleiner Perkins 74

“Between the local people and the top [of FEMA] seem to be about seven or eight layers of people who need to get a life. ” —Mayor Bill White, Houston 75

“Sod all in the middle. ” —Kevin Roberts on tomorrow’s flat organizations (Fast Company/03. 06) 76

Power Tools for Power Solutions/ Strategies! —TP 77

5% F 500 have CIO on Board: “While some of the world’s most admired companies—Tesco, Wal*Mart —are transforming the business landscape by including technology experts on their boards, the vast majority are missing out on ways to boost productivity, competitiveness and shareholder value. ” Source: Burson-Marsteller 78

4. Re-imagine Organizing II: What Organization? 79

“Organizations will still be critically important in the world, but as ‘organizers, ’ not ‘employers’!” — Charles Handy 80

TP In Nagano … Revenue: $10 B FTE: 1* *Maybe 81

Not “out sourcing” Not “off shoring” Not “near shoring” Not “in sourcing” but … “Best Sourcing” 82

“global innovation networks” vs “research in large monolithic companies” Source: George Colony/Forrester Research 83

5. Re-imagine Organizing III: The Power of “We” 84

“THE POWER OF US: Mass Collaboration on THE INTERNET Is Shaking Up Business” —Cover/Business. Week/06. 20. 05 85

“There’s a fundamental shift in power happening. Everywhere, people are getting together and, using the Internet, disrupting whatever activities they’re involved in. ” —Pierre Omidyar, founder, e. Bay 86

“The architecture of participation” —Tim O’Reilly/Tech-book publisher 87

6. Re-imagine Business’s Fundamental Value Proposition: The “Gamechanging Solutions” Imperative. 88

Up, Up the Value-added Ladder. 89

$55 B 90

“Big Brown’s New Bag: UPS Traffic Manager for Corporate America” Aims to Be the —Headline/BW/2004 91

And … Master. Card Advisors 92

The Value-added Ladder/Stuff ‘n’ Things Goods Raw Materials 93

The Value-added Ladder/Stuff & Transactions Services Goods Raw Materials 94

The Value-added Ladder/Opportunity-seeking Gamechanging Solutions/ Business Advantage Services Goods Raw Materials 95

Cost (at All Costs*) Minimization Professional? Or/to: Full Partner. Leader in Lifetime Value-added Maximization? “Purchasing Officer” Thrust #1: (*Lopez: “Arguably ‘Villain #1’ in GM tragedy”/Anon. VSE-Spain) 96

“Technology Executive” (workin’ in a hospital) HCare CIO: Full-scale, Accountable (life or death) Member-Partner of XYZ Hospital’s Senior Or/to: Healing-Services Team (who happens to be a techie) 97

7. Re-imagine Organizing IV: The Professional Service Firm (“PSF”) Imperative. 98

“ ‘Disintermediation’ is overrated. Those who fear disintermediation should in fact be afraid of irrelevance—disintermediation is just another way you’ve become irrelevant to your customers. ” of saying that … —John Battelle/Point/Advertising Age/07. 05 99

Chicago: HRMAC 100

“support function” / “cost center”/ “overhead” or … 101

Are you … “Rock Stars of the Age of Talent” 102

Answer: Professional Service Firm/PSF! Department Head to … Managing Partner, IS [HR, R&D, etc. ] Inc. 103

“Typically in a mortgage company or financial services company, ‘risk management’ is an overhead, not a revenue center. We’ve We pay for ourselves, and we actually make money for the company. ” become more than that. —Frank Eichorn, Director of Credit Risk Data Management Group, Wells Fargo Home Mortgage (Source: sas. com) 104

Mantra: “Eichorn it!” 105

Big Idea: “Corporation” as “Mega-PSF”* * “Virtual” Collection of Entrepreneurially-minded Professionals (“Talent”/“Roster”) Creating/ Applying Intellectual Capital (“Work Product”) 106

The “PSF 35”: Thirty-Five Professional Service Firm Marks of Excellence 107

The PSF 35: The Work & The Legacy 1. CRYSTAL CLEAR POINT OF VIEW (Every Practice Group: “If you can’t explain your position in eight words or less, you don’t have a position”—Seth Godin) 2. DRAMATIC DIFFERENCE (“We are the only ones who do what we do”—Jerry Garcia) 3. Stretch Is Routine (“Never bite off less than you can chew”—anon. ) 4. Eye-Appetite for Game-changer Projects (Excellence at Assembling “Best Team”—Fast) 5. “Playful” Clients (Adventurous folks who unfailingly Aim to Change the World) 6. Small “Uneconomic” Clients with Big Aims 7. Life Is Too Short to Work with Jerks (Fire lousy clients) 8. OBSESSED WITH LEGACY (Practice Group and Individual: “Dent the Universe”—Steve Jobs) 9. Fire-on-the-spot Anyone Who Says, “Law/Architecture/Consulting/ I-banking/ Accounting/PR/Etc. has become a ‘commodity’ ” 10. Consistent with #9 above … DO NOT SHY AWAY FROM THE WORD (IDEA) “RADICAL” 108

Point of View! 109

8. Re-imagine Enterprise as Theater I: A World of Scintillating “Experiences. ” 110

“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 111

“Club Med is more than just a ‘resort’; it’s a means of rediscovering oneself, of inventing an entirely new ‘me. ’ ” Source: Jean-Marie Dru, Disruption 112

“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 113

The Value-added Ladder/Memorable Connection Spellbinding Experiences Gamechanging Solutions Services Goods Raw Materials 114

9. Re-imagine Enterprise as Theater II: Embracing the “Dream Business. ” 115

DREAM: “A dream is a complete moment in the life of a client. Important experiences that tempt the client to commit substantial resources. The essence of the desires of the consumer. The opportunity to help clients become what they want to be. ” —Gian Luigi Longinotti-Buitoni 116

The Value-added Ladder/Emotion Dreams Come True Spellbinding Experiences Gamechanging Solutions Services Goods Raw Materials 117

10. Re-imagine the Fundamental Selling Proposition: “It” all adds up to … (THE BRAND. ) (THE STORY. ) (THE DREAM. ) The Love. 118

“Got there first” (branding/ Coins, Post Offices logo/spin): 119

“Brands have run out of juice. They’re dead. ” —Kevin Roberts/Saatchi & Saatchi 120

Kevin Roberts: Lovemarks! 121

Tattoo Brand: What % of users would tattoo the brand name on their body? 122

Top 10 “Tattoo Brands”* Harley. … 18. 9% Disney. . 14. 8 Coke …. 7. 7 Google. . 6. 6 Pepsi. . 6. 1 Rolex …. 5. 6 Nike …. 4. 6 Adidas …. 3. 1 Absolut …. 2. 6 Nintendo …. 1. 5 *BRANDsense: Build Powerful Brands through Touch, Taste, Smell, Sight, and Sound, Martin Lindstrom 123

Up, Up the Value-added Ladder. 124

Lovemark Dreams Come True Spellbinding Experiences Gamechanging Solutions Services Goods Raw Materials 125

Lead It: New “C-Levels” 126

CXO* *Chief e Xperience Officer 127

C F O* *Chief Festivals Officer 128

C C O* *Chief Conversations Officer 129

C S O* *Chief Seduction Officer 130

C L O* *Chief Lovemark Officer 131

C DM* *Chief Dream Merchant 132

C PI* *Chief Portal Impresario 133

C W *Chief WOW Officer O* 134

C ST O* *Chief Storytelling Officer 135

C R *Chief Revenue O* Officer 136

11. Re-imagine the Customer : Trends Worth Trillion$$$ … Women Roar. 137

“Women are the majority market” —Fara Warner/The Power of the Purse 138

The Perfect Answer Jill and Jack buy slacks in black…

1. Men and women are different. 2. Very different. 3. VERY, VERY DIFFERENT. 4. Women & Men have a-b-s-o-l-u-t-e-l-y nothing in common. 5. Women buy lotsa stuff. 6. WOMEN BUY A-L-L THE STUFF. 7. Women’s Market = Opportunity No. 1. 8. Men are (STILL) in charge. 9. MEN ARE … TOTALLY, HOPELESSLY CLUELESS ABOUT WOMEN. 10. Women’s Market = Opportunity No. 1. 141

10. Women’s Market = Opportunity No. 1. 142

“Women don’t buy They join them. ” brands. EVEolution 143

2005 144

Good Thinking, Guys! “Kodak Sharpens Digital Focus On Its Best Customers: Women” —Page 1 Headline/WSJ/0705 145

10. 6 146

12. Re-imagine Customer : the Trends Worth Trillion$$$ … Boomer Bonanza/ Godzilla Geezer. 147

2000 -2010 Stats 18 -44: -1% 55+: +21% (55 -64: +47% ) 148

44 -65: “New Customer Majority” * *45% larger than 18 -43; 60% larger by 2010 Source: Ageless Marketing, David Wolfe & Robert Snyder 149

“The New Customer Majority is the only adult market with realistic prospects for significant sales growth in dozens of product lines for thousands of companies. ” —David Wolfe & Robert Snyder, Ageless Marketing 150

“Baby-boomer Women: The Sweetest of Sweet Spots for Marketers” —David Wolfe and Robert Snyder, Ageless Marketing 151

“WOMAN of the Year: She’s the most powerful consumer in America. And as she starts to turn sixty this month, the affluent baby boomer is doing what she’s always done—redefining herself. ” —Joan Hamilton, Town & Country, JAN 06 152

“Sixty Is the New Thirty” —Cover/AARP/11. 03 153

Women business owners. Boomers-Geezers. Single-adults (Urban) 154

Fastest growing demographic: Single-person Households (>50% in London, Stockholm, etc) Source: Richard Scase 155

% of homes purchased by single women: 1981, 10%; 2005, 20% % of homes purchased by single men: 1981, 10%; 2005, 9% Source: USA Today/02. 15. 06 156

Women business owners. Boomers-Geezers. Single-adults (Urban) 157

13. Re-imagine Excellence : The Talent Obsession. 158

“The Creative Age is a wide-open game. ” —Richard Florida, The Rise of the Creative Class 159

Brand = Talent. 160

“The leaders of Great Groups love talent and know where to find it. They revel in the talent of others. ” —Warren Bennis & Patricia Ward Biederman, Organizing Genius 161

Les Wexner: From sweaters to … people! 162

Hire very good people! 163

“We believe companies can increase their market cap 50 percent in 3 years. Steve Macadam at Georgia- 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 Pacific 164

Our Mission To develop and manage talent; to apply that talent, throughout the world, for the benefit of clients; to do so in partnership; to do so with profit. WPP 165

14. Re-imagine Excellence II: Meet the New Boss … Women Rule! 166

“AS LEADERS, WOMEN RULE: New Studies find that female managers outshine their male counterparts in almost every measure” Title, Special Report/Business. Week 167

? ? ? ? 6/44 168

P&G 169

“To be a leader in consumer products, it’s critical to have leaders who represent the population we serve. ” —Steve Reinemund/Pepsi. Co 170

15. Re-imagine Leadership: The Passion Imperative. 171

Create a Cause! 172

“Management has a lot to do with answers. Leadership is a function of questions. And the first question for a ‘Who do we intend to be? ’ leader always is: Not ‘What are we going to do? ’ but ‘Who do we intend to be? ’” —Max De Pree, Herman Miller 173

“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 (IBD/09. 05) 174

Make It a Grand Adventure! 175

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. ” 176

Yes!!!!!!!!! “free to do his or her absolute best” … “allow its members to discover their greatness. ” 177

“The role of the Director is to create a space where the actor or actress can become more than they’ve ever been before, more than they’ve dreamed of being. ” —Robert Altman, Oscar acceptance 178

“We are a ‘life Success Company”’ founder, RE/MAX 179

Trumpet an Exhilarating Story! 180

Best Story Wins! “A key – perhaps the key – to leadership is the effective communication of a story. ” —Howard Gardner/Leading Minds: An Anatomy of Leadership 181

Live Your Story! 182

“You must be the change you wish to see in the world. ” Gandhi 183

25+ 184

Try It! 185

Sam’s Secret #1! 186

Dispense Enthusiasm! 187

“Nothing is so contagious as enthusiasm. ” —Samuel Taylor Coleridge 188

“Most important, upped the energy level at he Motorola. ” —Fortune on Ed Zander/08. 05 189

“A man without a smiling face must not open a shop. ” —Chinese Proverb* *Courtesy Tom Morris, The Art of Achievement 190

Avoid … Moderation! 191

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 moderation! 192

Free the Lunatic Within! 193

“You can’t behave in a calm, rational manner. You’ve got to be out there on the lunatic fringe. ” — Jack Welch 194

! 195