Tom Peters Re-Imagine Business Excellence in a Disruptive

Tom Peters’ Re-Imagine! Business Excellence in a Disruptive Age Sybase/NYC/10. 08. 2003

Slides at … tompeters. com

1. All Bets Are Off.

“Uncertainty is the only thing to be sure of. –Anthony Muh, head of investment in Asia, Citigroup Asset Management “If you don’t like change, you’re going to like irrelevance even less. ” —General Eric Shinseki, Chief of Staff, U. S. Army

“Dawn Meyerreicks, CTO of the Defense Information Systems Agency, made one of the most fateful military calls of the 21 st century. After 9/11 … her office quickly leased all the available transponders covering Central Asia. The implications should change everything about U. S. military thinking in the years ahead. “The U. S. Air Force had kicked off its fight against the Taliban with an ineffective bombing campaign, and Washington was anguishing over whether to send in a few Army divisions. Donald Rumsfeld told Gen. Tommy Franks to give the initiative to 250 Special Forces already on the ground. They used satellite phones, Predator surveillance drones, and GPS- and laser-based targeting systems to make the air strikes brutally effective. “In effect, they ‘Napsterized’ the battlefield by cutting out the middlemen (much of the military’s command control) and working directly with the real players. … The data came in so fast that HQ revised operating procedures to allow intelligence analysts and attack planners to work directly together. Their favorite tool, incidentally, was instant messaging over a secure network. ”—Ned Desmond/“Broadband’s New Killer App”/Business 2. 0/ OCT 2002

“The deadliest strength of America’s new adversaries is their very fluidity, Defense Secretary Donald Rumsfeld believes. Terrorist networks, unburdened by fixed borders, headquarters or conventional forces, are free to study the way this nation responds to threats and adapt themselves to prepare for what Mr. Rumsfeld is certain will be another attack. … “ ‘Business as usual won’t do it, ’ he said. His answer is to develop swifter, more lethal ways to fight. ‘Big institutions aren’t swift on their feet in adapting but rather ponderous and clumsy and slow. ’ ”—The New York Times/09. 04. 2002

From: To: Weapon v. Weapon Org structure v. Org structure

“Our military structure today is essentially one developed and designed by Napoleon. ” Admiral Bill Owens, former Vice Chairman, Joint Chiefs of Staff

“The organizations we created have become tyrants. They have taken control, holding us fettered, creating barriers that hinder rather than help our businesses. The lines that we drew on our neat organizational diagrams have turned into walls that no one can scale or penetrate or even peer over. ” —Frank Lekanne Deprez & René Tissen, Zero Space: Moving Beyond Organizational Limits.

“The mechanical speed of combat vehicles has not increased since Rommel’s day, so the difference is all in the operational speed, faster communications and faster decisions. ” —Edward Luttwak, on the unprecedented pace of the move toward Baghdad

“Our entire facility is digital. No paper, no film, no medical records. Nothing. And it’s all integrated—from the lab to X-ray to records to physician order entry. Patients don’t have to wait for anything. The information from the physician’s office is in registration and vice versa. The referring physician is immediately sent an email telling him his patient has shown up. … It’s wireless in-house. We have 800 notebook computers that are wireless. Physicians can walk around with a computer that’s pre-programmed. If the physician wants, we’ll go out and wire their house so they can sit on the couch and connect to the network. They can review a chart from 100 miles away. ”—David Veillette, CEO, Indiana Heart Hospital (Health. Leaders/12. 2002)

Eric’s Army Flat. Fast. Agile. Adaptable. Light … But Lethal. Talent/ “I Am an Army of One. ” Info-intense. Network-centric.

“Float like a butterfly. Sting like a bee. ” —Ali

It is the foremost task— and responsibility— of our generation to re-imagine our enterprises, private and public. —from the Foreword, Re-imagine

2. The Destruction Imperative.

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

“Good management was the most powerful reason [leading firms] failed to stay atop their industries. Precisely because these firms listened to their customers, invested aggressively in technologies that would provide their customers more and better products of the sort they wanted, and because they carefully studied market trends and systematically allocated investment capital to innovations that promised the best returns, they lost their positions of leadership. ” Clayton Christensen, The Innovator’s Dilemma

Forget>“Learn” “The problem is never how to get new, innovative thoughts into your mind, but how to get the old ones out. ” Dee Hock

The [New] Ge Way DYB. com

No Wiggle Room! “Incrementalism is innovation’s worst enemy. ” Nicholas Negroponte

Just Say No … “I don’t intend to be known as the ‘King of the Tinkerers. ’ ” CEO, large financial services company

Jim & Tom. Joined at the hip. Not.

Huh? “Quiet, workmanlike, stoic leaders bring about the big transformations. ”--JC

Pastels? T. Paine/P. Henry/A. Hamilton/T. Jefferson/B. Franklin A. Lincoln/U. S. Grant/W. T. Sherman TR/FDR/LBJ/RR/JFK M. L. King C. de Gaulle M. Gandhi W. Churchill M. Thatcher Picasso Mozart Copernicus/Newton/Einstein J. Welch/L. Gerstner/L. Ellison/B. Gates/S. Ballmer/S. Jobs/ S. Mc. Nealy A. Carnegie/J. P. Morgan/H. Ford/J. D. Rockefeller/T. A. Edison

Herman Melville on JPJ: “intrepid, unprincipled, reckless, predatory, with boundless ambition, civilized in externals but a savage at heart. ” —from Evan Thomas, John Paul Jones: Sailor, Hero, Father of the American Navy

Audie Murphy was the most decorated soldier in WW 2. He won every medal we had to offer, plus 5 presented by Belgium and France. There was one common medal he never won …

… the Good Conduct medal.

“The corporation as we know it, which is now 120 years old, is not likely to survive the next 25 years. Legally and financially, yes, but not structurally and economically. ” Peter Drucker, Business 2. 0

“The difficulties … arise from the inherent conflict between the need to control existing operations and the need to create the kind of environment that will permit new ideas to flourish—and old ones to die a timely death. … We believe that most corporations will find it impossible to match or outperform the market without abandoning the assumption of continuity. … The current apocalypse—the transition from a state of continuity to state of discontinuity—Has the same suddenness [as the trauma that beset civilization in 1000 A. D. ]” Richard Foster & Sarah Kaplan, “Creative Destruction” (The Mc. Kinsey Quarterly)

The Three Levels of Innovation Transformational Substantial Incremental Source: Dick Foster, Business 2. 0 (05. 01) Note: Each level requires totally different processes!

3. The White Collar Revolution & the Death of Bureaucracy.

108 X 5 vs. 8 X 1 = 540 vs. 8 (-98. 5%)

E. g. … Jeff Immelt: 75% of “admin, back room, finance” “digitalized” in 3 years. Source: BW (01. 28. 02)

BW Cover/02. 2003 “IS YOUR JOB NEXT? A New Round of GLOBALIZATION Is Sending Upscale Jobs Offshore. They Include Chip Design, Basic Research—even Financial Analysis. Can America Lose These Jobs and Still Prosper? ”

“Unless mankind redesigns itself by changing our DNA through altering our genetic makeup, computergenerated robots will take over the world. ” – Stephen Hawking, in the German magazine Focus

4. IS/ IT/ Web … “On the Bus” or “Off the Bus. ”

“E-commerce is happening the way all the hype said it would. Internet deployment is happening. Broadband is happening. Everything we ever said about the Internet is happening. And it is very, very early. We can’t even glimpse IT’s potential in changing the way people work and live. ” —Andy Grove (Business. Week/August 2003)

100 square feet

The Real “News”: X 1, 000 Tow. Truck. Net. com

e. Revolution 40, 000 Americans (1 of 2 singles/40% of American adults) went to an online matchmaking site last month (USN&WR/09. 29. 03)

“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

“There’s no use trying, ” said Alice. “One can’t believe impossible things. ” “I daresay you haven’t had much practice, ” said the Queen. “When I was your age, I always did it for half an hour a day. Why, sometimes I’ve believed as many as six impossible things before breakfast. ” Lewis Carroll

I’net … allows you to dreams you could never have dreamed before! …

Case: CRM

“CRM has, almost universally, failed to live up to expectations. ” Butler Group (UK)

FT: “The aim [of CRM] is to make customers feel as they did in the preelectronic age when service was more personal. ” No! No!

CGE&Y (Paul Cole): “Pleasant “Systemic Opportunity. ” “Better job of what we do today” vs. “Rethink overall enterprise strategy. ” Transaction” vs.

Here We Go Again: Except It’s Real This Time! Bank online: 24. 3 M (10. 2002); 2 X Y 2000. Wells Fargo: 1/3 rd; 3. 3 M; 50% lower attrition rate; 50% higher growth in balances than off-line; more likely to cross-purchase; “happier and stay with the bank much longer. ” Source: The Wall Street Journal/10. 21. 2002

5. The “PSF Solution”: The Professional Service Firm Model.

“ Daddy, what do you do? ” Sarah: “I’m a ‘cost center. ’ ” Daddy:

TP to HRMAC: You are the … Rock Stars of the Age of Talent!

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

DD$21 M

6. The Heart of the Value PSFs Unbound/ The “Solutions Imperative. ” Added Revolution:

“While everything may it is also increasingly the same. ” be better, Paul Goldberger on retail, “The Sameness of Things, ” The New York Times

“The ‘surplus society’ has a surplus of similar companies, employing similar people, with similar educational backgrounds, coming up with similar ideas, producing similar things, with similar prices and similar quality. ” Kjell Nordström and Jonas Ridderstråle, Funky Business

“Companies have defined so much ‘best practice’ that they are now more or less identical. ” Jesper Kunde, Unique now. . . or never

The Big Day!

09. 11. 2000: HP bids $18, 000, 000 for Pricewaterhouse. Coopers consulting business!

“These days, building the best server isn’t enough. That’s the price of entry. ” Ann Livermore, Hewlett-Packard

Systems Integrator of choice. Global Services: Gerstner’s IBM: $35 B. Pledge/’ 99: Business Partner Charter. 72 strategic partners, aim for 200. Drop many in-house programs/products. (BW/12. 01).

“UPS wants to take over the sweet spot in the endless loop of goods, information and capital that all the packages [it moves] represent. ” ecompany. com/06. 01 (E. g. , UPS Logistics manages the logistics of 4. 5 M Ford vehicles, from 21 mfg. sites to 6, 000 NA dealers)

7. A World of Scintillating/ Awesome/ WOW “Experiences. ”

“Experiences are as distinct from services as services are from goods. ” Joseph Pine & James Gilmore, The Experience Economy: Work Is Theatre & Every Business a Stage

“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

“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

Experience: “Rebel Lifestyle!” “What we sell is the ability for a 43 -year-old accountant to dress in black leather, ride through small towns and have people be afraid of him. ” Harley exec, quoted in Results-Based Leadership

WHAT CAN BROWN DO FOR YOU?

The “Experience Ladder” Experiences Services Goods Raw Materials

It’s All About EXPERIENCES: “Trapper” to “Wildlife Damage-control Professional” Trapper: <$20 per beaver pelt. WDCP: $150/“problem beaver”; $750 -$1, 000 for flood-control piping … so that beavers can stay. Source: WSJ/05. 21. 2002

8. Boss Job One: The Talent Obsession.

“When land was the productive asset, nations battled over it. The same is happening now for talented people. ” Stan Davis & Christopher Meyer, future. WEALTH

Age of Agriculture Industrial Age of Information Intensification Age of Creation Intensification Source: Murikami Teruyasu, Nomura Research Institute

Brand = Talent.

Model 25/8/53 Sports Franchise GM* *48 = $500 M

“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

From “ 1, 2 or you’re out” [JW] to … “Best Talent in each industry segment to build best proprietary intangibles” [EM] Source: Ed Michaels, War for Talent

“We believe companies can increase their market cap 50 percent in 3 years. Steve changed 20 of his 40 box plant managers to put more talented, higher paid managers in charge. He increased Macadam at Georgia-Pacific profitability from $25 million to $80 million in 2 years. ” Ed Michaels, War for Talent

Message: Some people are better than other people. Some people are a helluva lot better than other people.

The Cracked Ones Let in the Light “Our business needs a massive transfusion of talent, and talent, I believe, is most likely to be found among non-conformists, dissenters and rebels. ” David Ogilvy

9. THINK WEIRD … the HVA/ High Value Added Bedrock.

The High Standard Deviation Enterprise. THINK WEIRD:

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

CUSTOMERS: “Futuredefining customers may account for only 2% to 3% of your total, but they represent a crucial window on the future. ” Adrian Slywotzky, Mercer Consultants

COMPETITORS: “The best swordsman in the world doesn’t need to fear the second best swordsman in the world; no, the person for him to be afraid of is some ignorant antagonist who has never had a sword in his hand before; he doesn’t do the thing he ought to do, and so the expert isn’t prepared for him; he does the thing he ought not to do and often it catches the expert out and ends him on the spot. ” Mark Twain

Employees: “Are there enough weird people in the lab these days? ” V. Chmn. , pharmaceutical house, to a lab director (06. 01)

Suppliers: “There is an ominous downside to strategic supplier relationships. An SSR supplier is not likely to function as any more than a mirror to your organization. Fringe suppliers that offer innovative business practices need not apply. ” Wayne Burkan, Wide Angle Vision: Beat the Competition by Focusing on Fringe Competitors, Lost Customers, and Rogue Employees

WEIRD IDEAS THAT WORK: (1) Hire slow learners (of the organizational code). (1. 5) Hire people who make you uncomfortable, even those you dislike. (2) Hire people you (probably) don’t need. (3) Use job interviews to get ideas, not to screen candidates. (4) Encourage people to ignore and defy superiors and peers. (5) Find some happy people and get them to fight. (6) Reward success and failure, punish inaction. (7) Decide to do something that will probably fail, then convince yourself and everyone else that success is certain. (8) Think of some ridiculous, impractical things to do, then do them. (9) Avoid, distract, and bore customers, critics, and anyone who just wants to talk about money. (10) Don’t try to learn anything from people who seem to have solved the problems you face. (11) Forget the past, particularly your company’s success. Bob Sutton, Weird Ideas That Work: 11½ Ideas for Promoting, Managing, and Sustaining Innovation

10. Leading in Tough Times: The Passion Imperative

“I don’t know. ”

Quests!

“Ninety percent of what we call ‘management’ consists of making it difficult for people to get things done. ” – P. D.

“A leader is a dealer in hope. ” Napoleon (+TP’s writing room pics)

The Kotler Doctrine: 1965 -1980: R. A. F. (Ready. Aim. Fire. ) 1980 -1995: R. F. A. (Ready. Fire!Aim. ) 1995 -? ? : F. F. F. (Fire!Fire!)

“If Microsoft is good at anything, it’s avoiding the trap of worrying about criticism. Microsoft fails constantly. They’re eviscerated in public for lousy products. Yet they persist, through version after version, until they get something good enough. Then they leverage the power they’ve gained in other markets to enforce their standard. ” Seth Godin, Zooming

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

DG to TP: “Sam is not afraid to fail. ” * *NASA failing #1, from the shuttle disaster report (July 2003): “fear of retribution by lower-level employees. ”

“Fail faster. Succeed sooner. ” David Kelley/IDEO

“Create a ‘cause, ’ not a ‘business. ’ ” G. H. :

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

BZ: “I am a … Dispenser of Enthusiasm!”

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

T. J. Peters 1942 – 2 --HE WOULDA DONE SOME REALLY COOL STUFF BUT … HIS BOSS WOULDN’T LET HIM!

T. J. Peters 1942 – 2 --- HE WAS A PLAYER!

It is the foremost task— and responsibility— of our generation to re-imagine our enterprises, private and public. —from the Foreword, Re-imagine: Business Excellence in a Disruptive Age