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Attending to the “Last 98%”: The New “Management Science, ” or “Hard” Is “Soft, Attending to the “Last 98%”: The New “Management Science, ” or “Hard” Is “Soft, ” “Soft” Is “Hard” Tom Peters/17 April 2008

Alternate title … Alternate title …

Attending to the “Last 98%”: flower power! Tom Peters/17 April 2008 Attending to the “Last 98%”: flower power! Tom Peters/17 April 2008

F LO W E R POWER P F LO W E R POWER P

Hold in your mind the idea of “flower power” —more to come! Hold in your mind the idea of “flower power” —more to come!

S = ƒ ( ___ ) Success Is a Function of … S = ƒ ( ___ ) Success Is a Function of …

SF 50: Success Is a Function of*. . . *What follows are not in SF 50: Success Is a Function of*. . . *What follows are not in fact true mathematical formulae— obviously. Nonetheless, in tribute to my own scientific background, and, more important, that of many seminar participants, I have chosen this format—which seems to work for those of “my ilk” to whom it has been exposed

SF 50: 50 “Equations” on achieving success … at pretty much anything SF 50: 50 “Equations” on achieving success … at pretty much anything

S = ƒ(#&DR; -2 L, -3 L, 4 L, I&E) Success is a function S = ƒ(#&DR; -2 L, -3 L, 4 L, I&E) Success is a function of: Number and depth of relationships 2, 3, and 4 levels down inside and outside the organization S = ƒ(SD>SU) Sucking down is more important than sucking up—the idea is to have the [your] entire organization working for you. S = ƒ(#non-FF, #non-FL) Number of friends not in my function S = ƒ(#XFL/m) Number of lunches with colleagues in other functions per month S = ƒ(#FF) Number of friends in the finance organization

Loser: “He’s such a suck-up!” Winner: “He’s such a suck-down. ” Loser: “He’s such a suck-up!” Winner: “He’s such a suck-down. ”

Never* waste a lunch! *More or less Never* waste a lunch! *More or less

S =ƒ(#PK“W”P) S = ƒ(#PK“L”P) # of people you know in the “wrong” places S =ƒ(#PK“W”P) S = ƒ(#PK“L”P) # of people you know in the “wrong” places # people you know in “low” places

? ? ? ? “Success doesn’t depend on the number of people you know; ? ? ? ? “Success doesn’t depend on the number of people you know; it depends on the number of people you know in high places!” or “Success doesn’t depend on the number of people you know; it depends on the number of people you know in low places!”

It helps to know people in … high places!” It helps to know people in … high places!”

It helps more to know people in … low places!” It helps more to know people in … low places!”

Gust Avrakotos’ “boiler room” CIA pals Walter’s “enabler” P. M. Thank You notes Flexirent’s Gust Avrakotos’ “boiler room” CIA pals Walter’s “enabler” P. M. Thank You notes Flexirent’s XSec’s Customer PA lunches Anybody’s XSec Anybody’s PA All customer Purchasing Dept receptionists Secy Chaffee’s letter writer Mc. Kinsey report prep staff Mc. Kinsey research staff Admiral’s Aide Congressional Committee staff drafter Congressman’s appropriate LA Anybody in Finance

The previous entries are shorthand for stories about “low level” relationships determining “high level” The previous entries are shorthand for stories about “low level” relationships determining “high level” decisions—or at least having surprising impact. Flexirent is an Australian consumer financial services company. Its offerings are mostly made through retailers —and following the “ 80 -20 rule, ” a small # of retailers control a large share of Flexirent’s business. The Executive Secretary-“PA” (Personal Assistant) to Flexirent’s CEO is a bright, energetic, outgoing person. Along the way, and not accidentally, she has developed very close relationships to the Pas of most of the CEOs of Flexirent’s major customers. Among other things, she more or less regularly (quarterly, roughly) takes her PA pals out for lunch. The goal on both sides is clear, understood and shameless—to enhance unvarnished communications among these true “power players. ” One can only imagine the number of times, over, say, five years, that this “back channel” (“front Channel, ” in reality) has paved the way for success and staved off disasters. The rest of the entries on the slide are of the same ilk.

S = ƒ(OF) Number of oddball friends S = ƒ(PDL) Purposeful, deep listening—this is S = ƒ(OF) Number of oddball friends S = ƒ(PDL) Purposeful, deep listening—this is very hard S = ƒ(“DSTM, ” EH, TTAGFG) Don’t shoot the messenger—embrace him! Truth-tellers are gifts from God! S + ƒ(#EODD 3 MC) Number of end-of-the-day difficult (you’d rather avoid) “ 3 minutecalls” that sooth raw feelings, mend fences, etc. S = ƒ(UFP, UFK, OAPS) Unsolicited favors performed, UFs involving co-workers’ kids, overt acts politeness-solicitude toward co-workers’ spouses, parents, etc.

18’ Source: How Doctors Think, Jerome Groopman 18’ Source: How Doctors Think, Jerome Groopman

Relationships (of all varieties) : THERE ONCE WAS A TIME WHEN A THREE-MINUTE PHONE Relationships (of all varieties) : THERE ONCE WAS A TIME WHEN A THREE-MINUTE PHONE CALL WOULD HAVE AVOIDED SETTING OFF THE DOWNWARD SPIRAL THAT RESULTED IN A COMPLETE RUPTURE.

S= ƒ(TSHRO) Time spent. . . Hurdle Removing for Others S= ƒ(TSHRO) Time spent. . . Hurdle Removing for Others

Peter Drucker once famously said, “Ninety-percent of what we call ‘management’ consists of making Peter Drucker once famously said, “Ninety-percent of what we call ‘management’ consists of making it difficult for people to get things done. ” There is more than a grain of truth to that. On the other side, and there can be an “other side, ” I see the manager’s principal role as identifying things that get in people’s way (by asking them!) and meticulously getting those things out of their way. Thence, you could cal the boss the CIRO, or Chief Impedance Reduction Officer, or my choice, CHR, Chief Hurdle Remover. In any event the idea is that this is a/the primary task the boss performs—and that it is a systematic, pro-active affair (e. g. , on the daily agenda).

S = ƒ(A#C, PTS/“OLC”, SAPA) Absolute # of consultations, perception of being taken seriously S = ƒ(A#C, PTS/“OLC”, SAPA) Absolute # of consultations, perception of being taken seriously (Responsible for “one line of code”), small acts of public appreciation S = ƒ(1 D) Seeking the assignment of writing first drafts, minutes, etc. (1787) S = ƒ(#SEAs) Number of solid relationships with Executive Assistants S = ƒ(%UL/w-m) % useful lunches per week, month S = ƒ(FG, FOC-BOF, CMO) Favors given, favors owed collectively, balance of favors, conscious management thereof

“Buy in”“Ownership”Authorial bragging rights-“Born again” Champion = One Line of Code! “Buy in”“Ownership”Authorial bragging rights-“Born again” Champion = One Line of Code!

“It works this way, Tom. You’re talking to a guy who’s important to implementation “It works this way, Tom. You’re talking to a guy who’s important to implementation down where the rubber meets the road. He’s skeptical—he either really is, or it’s the act he chooses to play. You go over the thing with him and he has a thousand objections. You nod your head a lot, and take copious notes. Then you go back to your guys, and you find a few places where you can very specifically accommodate him. You make the changes, even if they are pretty ugly. Then you go back to him, and show him exactly what you’ve done. You have a ‘born again’ supporter. You took him seriously—and through the changes, he’s now your co-inventor, your savior. Now he’s doing the selling for you. Hey, the whole damn thing wouldn’t have worked were it not for his interjections—that’s the way he frames it to his folks. I tell you, it never fails. ” Source: Australian IS-IT chief, mid-sized company in financial services

S = ƒ(SU) Showing up (Woody Allen, Delaware’s ridiculous influence on the Constitution of S = ƒ(SU) Showing up (Woody Allen, Delaware’s ridiculous influence on the Constitution of the USA) S = ƒ(KSU, R) Keep showing up; relentlessness (U. S. Grant!!) S = ƒ(DW, TMSTTOG) Drill wells, try more stuff than the other guy (John Masters, Mike Bloomberg)

“eighty percent of success is showing up. ” —Woody Allen “eighty percent of success is showing up. ” —Woody Allen

“This is so simple it sounds stupid, but it is amazing how few oil “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 made mistakes, of course. Most of them were omissions we didn’t think of “We made mistakes, of course. Most of them were omissions we didn’t think of when we initially wrote the software. We fixed them by doing it over and over, again and again. We do the same today. While our competitors are still sucking their thumbs trying to make the design perfect, we’re already on prototype version #5. By the time our rivals are ready with wires and screws, we #10. It gets back to planning versus acting: We act from day one; others plan how to plan— for months. ” —Bloomberg by Bloomberg are on version

S= ƒ(CM) Conscious calendar management (the calendar never lies) S= ƒ(CM) Conscious calendar management (the calendar never lies)

You = Your calendar* *Calendars never lie! You = Your calendar* *Calendars never lie!

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

S = ƒ(CPRM, TS) Conscious-planned Relationship management, time spent thereon S = ƒ(CPRM, TS) Conscious-planned Relationship management, time spent thereon

R. O. I. R. R. O. I. R.

Far more important than “ROI”! Far more important than “ROI”!

Return On Investment In Relationships Return On Investment In Relationships

FYI: “Relationship power” = “Monopoly power” FYI: “Relationship power” = “Monopoly power”

The goal is clear—an “unfair” share of attention from an internal staffer, a vendor, The goal is clear—an “unfair” share of attention from an internal staffer, a vendor, a customer. We unabashedly pursue through good-betterbest relationships de facto monopoly—the monopolization of other important folks’ love and affection, as it were.

“Sustainable competitive advantage” = “Relationship-based advantage” (period. ) FYI: “Sustainable competitive advantage” = “Relationship-based advantage” (period. ) FYI:

Some Resources: Relationships The Manager’s Book of Decencies: How Small Gestures Build Great Companies—Steve Some Resources: Relationships The Manager’s Book of Decencies: How Small Gestures Build Great Companies—Steve Harrison Respect—Sara Lawrence-Lightfoot Hostmanship: The Art of Making People Feel Welcome— Jan Gunnarsson & Olle Blohm (leader as host to hisher employees) The SPEED of Trust: The One Thing that Changes Everything—Stephen M. R. Covey The Dream Manager —Matthew Kelly The Customer Comes Second: Put Your People First and Watch ’Em Kick Butt—Hal Rosenbluth and Diane Mc. Ferrin Peters (no relation—be delighted if she was) Crucial Conversations—Kerry Patterson, Joseph Grenny, Ron Mc. Millan, Al Switzler Crucial Confrontations —Kerry Patterson, Joseph Grenny, Ron Mc. Millan, Al Switzler Influence: Science and Practice—Robert Cialdini Emotional Intelligence: Why It Can Matter More Than IQ—Daniel Goleman

A few of my favorite “reads” on this topic— especially #1. The idea of A few of my favorite “reads” on this topic— especially #1. The idea of “competitiveadvantage-through-decency” is extraordinary. Of course, “we know this”—but to see it spelled out this way may change the course of your professional life.

S = ƒ(TN/d, FG/m, AA/d) Thank you notes per Day, flowers given per Month, S = ƒ(TN/d, FG/m, AA/d) Thank you notes per Day, flowers given per Month, Acts of Appreciation per Day S = ƒ(WLHAO) Willingness to laugh heartily at oneself S = ƒ(PTA 100%A“T”S, E“NMF, TTT) Proactive, timely, 100% apologies for “tiny” screw-ups, even if not my fault (it always takes two to tango) S = ƒ(AMR, NBS-SG) Acceptance of mutual responsibilities for all affairs, no blameshifting, scape-goating S = ƒ(RP, PRP>>P) Never forget, and act accordingly: Response to the screwupproblem and perception thereof is (far, far) more important than the problem itself! S = ƒ(APLSLFCT) Awareness, perception of little snubs—and lightening fast correction thereof

S= ƒ(RCV) Reduced customer visits (& more time on internal “customer” relationships—that allow us S= ƒ(RCV) Reduced customer visits (& more time on internal “customer” relationships—that allow us to deliver on customer promises) S= ƒ(U“PIATI”) Understanding … “Perception is all there is!” S= ƒ(“EM”/NSTLT; “F”ITU, -80%) “Everything matters”/No such thing as a “little thing”—etching of fly in the urinal in Amsterdam airport reduces “spillage” by 80% S= ƒ(A“L”IOE) Attention to “little” Indicators Of Excellence—e. g. , fresh flowers at the reception desk S= ƒ(“GGT”) “Give good tea”—Ben Franklin in Paris in 1777, Norm Schwarzkopf with the Saudi Crown Prince during Gulf War I; effectiveness at socializing with the “power behind the throne”

Give good tea!* *Norm S, Ben F Give good tea!* *Norm S, Ben F

S = ƒ(TN/d, FG/m, AA/d) Thank you notes per Day, flowers given per Month, S = ƒ(TN/d, FG/m, AA/d) Thank you notes per Day, flowers given per Month, Acts of Appreciation per Day S = ƒ(WLHAO) Willingness to laugh heartily at oneself S = ƒ(RP, PRP>>P) Never forget, and act accordingly: Response to the screwupproblem and perception thereof is (far, far) more important than the problem itself! S = ƒ(APLSLFCT) Awareness, perception of little snubs—and lightening fast correction thereof

S= ƒ(3 X“O”C) “Over”-communicate (status, problems) by a factor of three S= ƒ(3 X“O”C) “Over”-communicate (status, problems) by a factor of three

THE PROBLEM IS RARELY/ THE RESPONSE TO THE PROBLEM INVARIABLY ENDS UP BEING THE THE PROBLEM IS RARELY/ THE RESPONSE TO THE PROBLEM INVARIABLY ENDS UP BEING THE REAL PROBLEM NEVER THE PROBLEM.

F LO W E R POWER S = ƒ(Thank you notes per Day, flowers F LO W E R POWER S = ƒ(Thank you notes per Day, flowers given per Month, Acts of Appreciation per Week)

“The deepest human need is the need to be appreciated. ” William James “The deepest human need is the need to be appreciated. ” William James

“Courtesies of a small and trivial character are the ones which strike deepest in “Courtesies of a small and trivial character are the ones which strike deepest in the grateful and appreciating heart. ” —Henry Clay

S = ƒ(PTA 100%A“T”S, E“NMF, TTT) Proactive, timely, 100% apologies for “tiny” screw-ups, even S = ƒ(PTA 100%A“T”S, E“NMF, TTT) Proactive, timely, 100% apologies for “tiny” screw-ups, even if not my fault (it always takes two to tango) S = ƒ(AMR, NBS-SG) Acceptance of mutual responsibilities for all affairs, no blameshifting, scape-goating

“I’m really sorry. ” Power phrase: “I’m really sorry. ” Power phrase:

Amazing how rare this is—which of course is why it’s so powerful. Amazing how rare this is—which of course is why it’s so powerful.

“I screwed up. ” Power phrase: “I screwed up. ” Power phrase:

S = ƒ(G) Grace S = ƒ(GA) Grace toward adversary S = ƒ(GW) Grace S = ƒ(G) Grace S = ƒ(GA) Grace toward adversary S = ƒ(GW) Grace toward the wounded in bureaucratic firefights S = ƒ(PD) Purposeful decency S = ƒ(MB“TSS”MR) Purposeful management of this Soft Stuff by people reporting to me S = ƒ(EC, MMO) Emotional connection, mgt & maintenance of S = ƒ(IMDOP) Investment in Mastery of detailed organizational processes

“What I learned from my years as a hostage negotiator is that we do “What I learned from my years as a hostage negotiator is that we do not have to feel powerless—and that bonding is the antidote to the hostage situation. ” —George Kohlrieser, Hostage at the Table (GK’s negotiation success rate is >95%)

S = ƒ(H-TS) Time spent on Hiring S = ƒ(TSPD, TSP-L 1) Time spent S = ƒ(H-TS) Time spent on Hiring S = ƒ(TSPD, TSP-L 1) Time spent on promotion decisions, especially for 1 st level managers S = ƒ(%“SS, ” H-PD) % soft stuff involved in Hiring, Promotion decisions S = ƒ(%WLP) % women in leadership positions S = ƒ(TWA, P, NP) Time wandering around, purposeful, non-planned S = ƒ(SBS) Slack built into Schedule

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

Women’s Negotiating Strengths *Ability to put themselves in their counterparties’ shoes *Comprehensive, attentive and Women’s Negotiating Strengths *Ability to put themselves in their counterparties’ 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”

This “relationship stuff” comes naturally to women (for starters, from the genes); and is This “relationship stuff” comes naturally to women (for starters, from the genes); and is painfully difficult for many-most men.

“TAKE THIS QUICK QUIZ: Who manages more things QUIZ at once? Who puts more “TAKE THIS QUICK QUIZ: Who manages more things QUIZ at once? Who puts more effort into their appearance? Who usually takes care of the details? Who finds it easier to meet new people? Who asks more questions in a conversation? Who is a better listener? Who has more interest in communication skills? Who is more inclined to get involved? Who encourages harmony and agreement? Who has better intuition? Who works with a longer ‘to do’ list? Who enjoys a recap to the day’s events? Who is better at keeping in touch with others? ” Source: Selling Is a Woman’s Game: 15 Powerful Reasons Why Women Can Outsell Men, Nicki Joy & Susan Kane-Benson

S = ƒ (%TM“TSS, ” PM“TSS, ” D“TD”“TSS”) % of time, measured, on This S = ƒ (%TM“TSS, ” PM“TSS, ” D“TD”“TSS”) % of time, measured, on This Soft Stuff, purposeful management of this Soft Stuff, daily “to do” concerning “this Soft Stuff”

Q: But where’s the beef? A: This is the beef! Q: But where’s the beef? A: This is the beef!

“The terms ‘hard facts, ’ and ‘the soft stuff’ used in business imply that “The terms ‘hard facts, ’ and ‘the soft stuff’ used in business imply that data are somehow real and strong while emotions are weak and less important. ” —George Kohlrieser, Hostage at the Table

O(B) = ƒ(XX) O(B), the “blueness” of one’s “ocean” [think Blue Ocean Strategy, the O(B) = ƒ(XX) O(B), the “blueness” of one’s “ocean” [think Blue Ocean Strategy, the popular book], is directly proportional to one’s e. Xcellence in e. Xecution/XX, per me. [If one finds a “strategic” “blue ocean, ” one will, especially in today’s world, copied immediately; the only “defense”— possibility of sustaining success—is XX/e. Xcellence in e. Xecution. Think EXXON MOBIL; they and their rivals know where the hydrocarbons are—but EXXON MOBIL handily out -executes the competition. ]

“Equations” #48, #49 and #50 are more about organizational effectiveness than individual effectiveness—and thus “Equations” #48, #49 and #50 are more about organizational effectiveness than individual effectiveness—and thus round out this brief presentation.

S(O) = ƒ(XXFX) The single most important cause of failure to execute effectively is S(O) = ƒ(XXFX) The single most important cause of failure to execute effectively is the lack of effective cross-functional communication-execution. Hence, Organizational Success is a e. Xcellence (X) in crossfunctional (XF) e. Xecution (X). Attached function of as Appendix II is my: The “XF-50”: 50 Ways to Enhance Cross. Functional Effectiveness and Deliver Speed, “Service Excellence” and “Value-added Customer ‘Solutions. ’”

S(O) = ƒ(X“SIT”) In 1982 in In Search of Excellence, Bob Waterman and I S(O) = ƒ(X“SIT”) In 1982 in In Search of Excellence, Bob Waterman and I wrote about the idea of “MBWA, ” or Managing By Wandering Around; we came across “MBWA” at Hewlett-Packard, then a much smaller company, and it was love at first sight! For reasons described in Appendix III, I recently returned to the centrality of that notion—and created a list of 50 “Have Yous. ” That is, instead of worrying ceaselessly about “strategy” and “blue oceans, ” how good a job have you done at Staying In Touch with your extended internal and external “organizational family”? That is: S(O), Organizational X “SIT, ” e. Xcellence at Staying In Touch. Success, is a function of

Hard Is Soft Is Hard Hard Is Soft Is Hard

Hard Is Soft (Plans, #s) Soft Is Hard (people, customers, values, relationships)) Hard Is Soft (Plans, #s) Soft Is Hard (people, customers, values, relationships))

“If I could have chosen not to tackle the IBM culture head-on, I probably “If I could have chosen not to tackle the IBM culture head-on, I probably wouldn’t have. My bias coming in was toward strategy, analysis and measurement. In comparison, changing the attitude and behaviors of hundreds of thousands of people is very, very [Yet] I came to see in my time at IBM that culture isn’t just one aspect of the hard. game —it is the game. ” —Lou Gerstner, Who Says Elephants Can’t Dance

The tough-minded Mr Gerstner became a reluctant convert to the power of this “soft The tough-minded Mr Gerstner became a reluctant convert to the power of this “soft stuff. ”

F LO W E R POWER P F LO W E R POWER P