Tom Peters’

EXCELLENCE. ALWAYS.

X.Always/First Data Corporation Omaha/20 September 2006

Slides at …

tompeters.com

EXCELLENCE.

THE MANDATE.

THE [SAD] FACTS.

THREE BILLION NEW CAPITALISTS

—Clyde Prestowitz

“

If you don’t like change, you’re going to like irrelevance even less.”

—General Eric Shinseki, Chief of Staff. U. S. Army

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

—Charles Darwin

“Forbes100” from 1917 to 1987 : 39 members of the Class of ’17 were alive in ’87; 18 in ’87 F100; 18 F100 “survivors” significantly underperformed the market; just 2 (2%), GE & Kodak , outperformed the market from 1917 to 1987.

S&P 500 from 1957 to 1997 : ’97; 12 74 members of the Class of ’57 were alive in (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

“I am often asked by would-be entrepreneurs seeking escape from life within huge corporate structures, ‘How do I build a small firm for myself?’ The answer seems obvious :

Buy a very large one and just wait

.” —Paul Ormerod, Why Most Things Fail: Evolution, Extinction and Economics

“It is generally much easier to

kill an organization

than change it substantially.”

—Kevin Kelly, Out of Control

Message/Implication:

go for it!

C.E.O.

to

C.D.O.

EXCELLENCE. THE WORD.

Synonyms Purity Transcendence Virtue Elegance Majesty Antonyms

Mediocrity

“Why in the world did you go to Siberia?”

Business* (*at its “excellent” best):

An emotional, vital, audacious, innovative, joyful, frightening, risky, creative, entrepreneurial endeavor that breathes life & fire into our work & elicits maximum concerted human potential in the wholehearted effort to help others ** reach places they’d never dreamed they could go.

**Employees, Customers, Suppliers, Communities, Owners, Temporary partners

“The role of the Director is to create a space where the actors and actresses can

become more than they’ve ever been before, more than they’ve dreamed of being.”

—Robert Altman, Oscar acceptance speech

“Astonish me!”

(SD) .

“Build something great!”

(HY) .

“Make it immortal!”

(DO)

“Insanely great”

(SJ)

“ In-sane ly-great”

EXCELLENCE. VALUE ADDED.

UP THE LADDER.

EXCELLENCE I. SOLVE IT.

Up, Up, Up, Up

the Value-added Ladder.

The Value-added Ladder/ OPPORTUNITY-SEEKING Gamechanging Solutions Services Goods Raw Materials

EXCELLENCE.

NECESSITY.

OPPORTUNITY.

“ ‘Disintermediation’ is overrated. Those who fear disintermediation-outsourcing should in fact be afraid of irrelevance; ‘outsourcing’ is just another way of saying that …

you’ve become irrelevant to your customers.”

—John Battelle/ Point/Advertising Age /07.05

Chicago:

HRMAC

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

or …

Are you …

“

Rock Stars of the Age of Talent”

Department Head to …

Managing Partner, IS Inc.

[HR, R&D, etc.]

Core Mechanism : “Game-changing Solutions”

PSF

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

Brand You

(“Distinct” or “Extinct”/The Talent ) +

Wow! Projects

(“Different” vs “Better”/The Work )

Core Mechanism : “Game-changing Solutions”

PSF

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

Brand You

(“Distinct” or “Extinct”/The Talent ) +

Wow! Projects

(“Different” vs “Better”/The Work )

“Astonish me!”

(SD) .

“Build something great!”

(HY) .

“Make it immortal!”

(DO)

“Insanely great”

(SJ)

Big Idea:

“Corporation” as

Mega-“PSF”

(Professional Service Firm*)

* “Virtual” Collection of Entrepreneurially-minded Professionals (“Talent”/“Roster”) Creating/Applying Intellectual Capital (“Work Product”)

Agriculture Age (farmers) Industrial Age (factory workers) Information Age (knowledge workers)

Conceptual Age*

(creators) *Murakami Teruyasu: “Age of Creation Intensification” Source: Dan Pink, A Whole New Mind

EXCELLENCE. ATTITUDE.

TRANSFORMATION.

PSF.

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

EXCELLENCE II. EXPERIENCE IT.

“ 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

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

Up, Up, Up, Up

the Value-added Ladder.

The Value-added Ladder/ MEMORABLE CONNECTION

Spellbinding Experiences

Gamechanging Solutions Services Goods Raw Materials

EXCELLENCE III.

DREAM IT.

Furniture vs. Dreams “We do not sell ‘furniture’ at Domain.

We sell dreams

.

This is accomplished by addressing the half-formed needs in our customers’ heads. By uncovering these needs, we, in essence, fill in the blanks.

convert ‘needs’ into ‘dreams.’ Sales are the inevitable result.” We — Judy George, Domain Home Fashions

Up, Up, Up, Up

the Value-added Ladder.

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

Big Blue

The (NEW) Value-added Ladder

Dreams Come True Spellbinding Experiences Gamechanging Solutions

Services Goods Raw Materials

EXCELLENCE.

NEW MARKETS.

ENORMOUS. OPPORTUNITIES.

“Women are

the

majority market”

—Fara Warner/ The Power of the Purse

“

She

knows more about the [Volvo] than the sales

man

her at the door. But how is she treated? As if she has a slightly has time

hard of hearing no right speaking to him

.” who greets

low IQ

to Women , Jeffery Tobias Halter

, is , and really to be buying a luxury car; and if she brought a male friend with her, odds are 10:1 that the clueless salesperson spent most of his

—Selling to Men, Selling

Selling to men:

The TRANSACTION Model

Selling to Women:

RELATIONAL The Model

Source:

Selling to Men, Selling to Women , Jeffery Tobias Halter

“Women don’t buy brands.

They join them.”

EVEolution

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.

“Goldman Sachs in Tokyo has developed an

index of 115 companies poised to benefit from women’s increased purchasing power

; over the past decade the value of shares in Goldman’s basket has

risen by 96% , against the Tokyo stockmarket’s rise of 13% .”

—Economist , 15 April 2006

EXCELLENCE. OPPORTUNITY.

2000-2010 Stats

18-44:

-1%

55+:

+21% (55-64: +47% )

44-65:

“New Customer Majority”

* *45% larger than 18-43; 60% larger by 2010 Source: Ageless Marketing , David Wolfe & Robert Snyder

“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

EXCELLENCE. INNOVATE. OR. DIE.

“A focus on cost-cutting and efficiency has helped many organizations weather the downturn, but this approach will ultimately render them obsolete.

Only the constant pursuit of innovation can ensure long-term success.” —Daniel Muzyka, Dean, Sauder School of Business, Univ of British Columbia ( FT /2004)

More Than $$$$ R&D spending, last 25 years/USA?

EXCELLENCE.

INNOVATION. TACTICS.

We become who we hang out with!

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

try it. Try it. Try it. Try it.

Try it.

Try it. Try it. Try it. Try it.

Try it. Try it. Try it. Try it. Try it. Try it. Try it. try it. Try it. Try it. try it.

Try it.

Try it.

Try it. Try it. Try it.

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

— Herb Kelleher

READY.

FIRE!

AIM.

Ross Perot (vs “ Aim! Aim! Aim!” /EDS vs GM/1985)

“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

No. 5

.

By the time our rivals are ready with wires and screws, we are on version

No. 10

. It gets back to planning versus acting: We act from day one; others plan how to plan—for months.”

—Bloomberg by Bloomberg

“Experiment fearlessly”

Source: BW 0821.06, Type A Organization Strategies/ “How to Hit a Moving Target”—

Tactic #1

S.A.V.

“ 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

Excellence1982: The Bedrock “Eight Basics” 1.

A Bias for Action

2. Close to the Customer 3. Autonomy and Entrepreneurship 4. Productivity Through People 5. Hands On, Value-Driven 6. Stick to the Knitting 7. Simple Form, Lean Staff 8. Simultaneous Loose-Tight Properties”

tolerate [encourage?] failure

“Fail . Forward. Fast.”

High Tech CEO, Pennsylvania

“Fail faster. Succeed Sooner.”

David Kelley/IDEO

Sam’s Secret

#1!

“Reward

excellent failures.

Punish

mediocre successes.” Phil Daniels, Sydney exec

TP#1*:

Netscape!

* Where would you rather have worked for those 5 years , Netscape or IBM-HP-Microsoft-Oracle? (Where, 25 years from now, would you rather to be able to tell someone—e.g., grandchild—that you worked?)

EXCELLENCE. 4/40.

De-cent ral-iz a-tion!

Ex-e cu-tion!

“ Execution the job business leader.”

Execution: The Discipline of Getting Things Done

is of the

—Larry Bossidy & Ram Charan/

Ac-count a-bil-ity!

“GE has set a standard of candor. … There is no puffery. … place.” There isn’t an ounce of denial in the —Kevin Sharer, CEO Amgen, on the “GE mystique” (Fortune)

6:15A.M.

EXCELLENCE. BEDROCK.

TALENT.

Hire very good people!

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

INVITE THEM TO JOIN US IN A JOURNEY TO EXCELLENCE!

“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

PUT HR AT THE HEAD OF THE HEAD TABLE. BEST PEOPLE. NOBLEST MISSION.

DD $21M

A review of Jack and Suzy Welch’s

Winning

claims there are but two key differentiators that set GE “culture” apart from the herd:

First:

Separating financial forecasting and performance measurement.

Performance measurement based, as it usually is, on budgeting leads to an epidemic of gaming the system. GE’s performance measurement is divorced from budgeting —and instead reflects how you do relative to your past performance and relative to competitors’ performance; i.e., it’s about how you actually do in the context of what happened in the real world, not as compared to a gamed-abstract plan developed last year.

Second: Putting HR a par with finance and marketing.

on

LIVE FOR TALENT!

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

Brand = Talent.

EXCELLENCE. WOMEN.

RULE.

“AS LEADERS, WOMEN RULE:

New Studies find that female managers outshine their male counterparts in almost every measure” Title , Special Report/ BusinessWeek

WOMEN DOMINATE ECONOMIC GROWTH.

“Forget China, India and the Internet: Economic Growth Is Driven by Women .” —Headline, Economist , April 15, 2006, Leader, page 14

Impact! Add It Up!

Primary markets/Everything (“Men buy things that other men will buy for women. I buy things that women want.”— successful jeweler/F. “Women are the majority market” —Fara Warner/The Power of the Purse. Women as Purchasing Officers, CIOs, etc.) Greater global workforce participation rate Higher wages (“bigger contributor to GDP growth than technology, China, India”—Economist) (more seniority, promotions —even if not to CEO; greater pay equity —even if not equal) Business “decision makers” seniority, promotions —even if not to CEO) Women-owned businesses (more (answer to the Glass Ceiling —10.6M in USA; recipients of “micro-lending”—developing world)

EXCELLENCE. BEDROCK.

LEADERSHIP.

EXCELLENCE.

ENTHUSIASM.

ENERGY. PASSION.

“

Nothing is so contagious as enthusiasm.”

—Samuel Taylor Coleridge

“Most important, he

upped the energy level

Motorola.”

— Fortune on Ed Zander/08.05

at

EXCELLENCE. SHOWING UP.

“

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

Gandhi

“

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

—RG

EXCELLENCE. STRETCH.

The greatest danger for most of us is not that our aim is too high and we miss it, but that it is too low and we reach it.

Michelangelo

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!

EXCELLENCE. OFFENSE.

On NELSON:

“[other] admirals more frightened of losing than anxious to win”

"Life is not a journey to the grave with the intention of arriving safely in one pretty and well preserved piece, but to skid across the line broadside, thoroughly used up, worn out, leaking oil, shouting

‘GERONIMO!’

”

—Bill McKenna, professional motorcycle racer ( Cycle magazine)

You only find oil if you drill wells .

—The

Hunters , by John Masters, Canadian O & G wildcatter

“Insanely great”