Tom Peters’ Re-Imagine! Business Excellence in a Disruptive Age Edinburgh/21April2004 “In Tom’s world, it’s always better to try a swan dive and deliver a colossal belly flop.
Download ReportTranscript Tom Peters’ Re-Imagine! Business Excellence in a Disruptive Age Edinburgh/21April2004 “In Tom’s world, it’s always better to try a swan dive and deliver a colossal belly flop.
Tom Peters’ Re-Imagine! Business Excellence in a Disruptive Age Edinburgh/21April2004 “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 /October2003 Slides at … tompeters.com I. NEW BUSINESS. NEW CONTEXT. “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 1. All Bets Are Off. Jobs Technology Globalization War, Warfighting & Security Jobs New Technology Globalization Security “14 MILLION service jobs are in danger of being shipped overseas” — The Dobbs Report/USN&WR/11.03/re new UCB study “Income Confers No Immunity as Jobs Migrate” —Headline/USA Today/02.04 “One Singaporean worker costs as much as … 3 … in Malaysia 8 … in Thailand 13 … in China 18 … in India.” Source: The Straits Times/08.18.03 “Thaksinomics” (after Taksin Shinawatra, PM)/ “Bangkok Fashion City”/ “managed asset reflation” (add to brand value of Thai textiles by demonstrating flair and design excellence) Source: The Straits Times/03.04.2004 “The proper role of a healthily functioning economy is to destroy jobs and to put labor to use elsewhere. Despite this truth, layoffs and firings will always sting, as if the invisible hand of free enterprise has slapped workers in the face.” —Joseph Schumpeter “There is no job that is America’s God-given right anymore.” —Carly Fiorina/ HP/ 01.08.2004 In Store: International Equality, Intranational Inequality “The new organization of society implied by the triumph of individual autonomy and the true equalization of opportunity based upon merit will lead to very great rewards for merit and great individual autonomy. This will leave individuals far more responsible for themselves than they have been accustomed to being during the industrial period. It will also reduce the unearned advantage in living standards that has been enjoyed by residents of advanced industrial societies throughout the 20th century.” James Davidson & William Rees-Mogg,The Sovereign Individual “WHAT ARE PEOPLE GOING TO DO WITH THEMSELVES?” —Headline/ Fortune/ 11.03 (“We should finally admit that we do not and cannot know, and regard that fact with serenity rather than anxiety.”) Jobs Technology Globalization Security <1000A.D.: paradigm shift: 1000s of years 1000: 100 years for paradigm shift 1800s: > prior 900 years 1900s: 1st 20 years > 1800s 2000: 10 years for paradigm shift 21st century: 1000X tech change than 20th century (“the ‘Singularity,’ a merger between humans and computers that is so rapid and profound it represents a rupture in the fabric of human history”) Ray Kurzweil “I genuinely believe we are living through the greatest intellectual moment in history.” Matt Ridley, Genome “A California biotechnology company has put the entire sequence of the human genome on a single chip, allowing researchers to conduct a single experiment on the complex relationships between the 30,000 genes that make up a human being.” —Page 3, Financial Times/10.03.2003 Sequenom/David Ewing Duncan/Wired11.02 “Sequenom has industrialized the SNP [single nucleotide polymorphisms] identification process. …This, I’m told, is the first time a healthy human has ever been screened for the full gamut of genetic-disease markers. … On the horizon: multi-disease gene kits, available at Wal*Mart, as easy to use as homepregnancy tests.” Jobs Technology Globalization Security “Asia’s rise is the economic event of our age. Should it proceed as it has over the last few decades, it will bring the two centuries of global domination by Europe and, subsequently, its giant North American offshoot to an end.” —Financial Times (09.22.2003) “The world has arrived at a rare strategic inflection point where nearly half its population—living in China, India and Russia—have been integrated into the global market economy, many of them highly educated workers, who can do just about any job in the world. We’re talking about three billion people.” —Craig Barrett/Intel/01.08.2004 China Roars! 1990-2003: Exports 8X ($380B); 6% global exports 2003 vs. 3.9% 2000; 16% of Total Global Growth in 2002. Source: “China Takes Off”, David Hale & Lyric Hughes Hale/Foreign Affairs/Nov-Dec2003 1998-2003: 45,000,000 layoffs in state sector; offset by $450B in foreign investment; foreign companies account for 50+% of exports vs. 31% in Mexico, 15% in Korea. Source: “China Takes Off”, David Hale & Lyric Hughes Hale/Foreign Affairs/Nov-Dec2003 50% of output from private firms, 37% from state-owned firms; 80% of workforce (incl. rural) now in private employ. Source: “China Takes Off”, David Hale & Lyric Hughes Hale/Foreign Affairs/Nov-Dec2003 Population growth = 1%; two-thirds of housing privately owned, 90% of urban Chinese own a home (vs. 61% in Japan) Source: “China Takes Off”, David Hale & Lyric Hughes Hale/Foreign Affairs/Nov-Dec2003 200 cities with >1,000,000 population. Source: “China Takes Off”, David Hale & Lyric Hughes Hale/Foreign Affairs/Nov-Dec2003 2003: China-Hong Kong leading producer in 8 of 12 key consumer electronic product areas (>50%: DVDs, digital cameras; >33.33%: DVD-ROM drives, personal desktop and notebook computers; >25% mobile phones, color TVs, PDAs, car stereos). Source: “China Takes Off”, David Hale & Lyric Hughes Hale/Foreign Affairs/Nov-Dec2003 “Going Global: Flush with billions in foreign reserves, China is embarking on a buying spree” —Cover/ Newsweek/ 03.01.04/ on China’s aggressive offshore acquisition activity (buying brands, technology, etc.) World economic output: U.S.A., 21%; EU, 16%; China, 13% (2X since1991) Source: New York Times/12.14.2003 “With a Small Car, India Takes Big Step Onto Global Stage” —Headline, p. 1, WSJ, 02.05.2004 Indian GDP/1990-2002: Ag, 34% to 21%; services, 40% to 56% Source: The Economist/02.04 Level 5 (top) ranking/Carnegie Mellon Software Engineering Institute: 35 of 70 companies in world are from India Source: Wired/02.04 “Forget India, Let’s Go to Bulgaria” —Headline, BW/03.04, re SAP, BMW, Siemens et al. “near-shoring” “CLONING COLLEGE: South Korea’s biomedical researchers, unhampered by politics, do world-class research on the cheap” —Headline, Newsweek/03.01.04 Jobs Technology Globalization Security “This is a dangerous world and it is going to become more dangerous.” “We may not be interested in chaos but chaos is interested in us.” Source: Robert Cooper, The Breaking of Nations: Order and Chaos in the Twenty-first Century “The world’s new dimension (computers, Internet, globalization, instantaneous communication, widely available instruments of mass destruction and so on) amounts to a new metaphysics that, by empowering individual zealots or agitated tribes with unappeasable grievances, makes the world unstable and dangerous in radically new ways.” —Lance Morrow/Evil All Bets Are Off! “There will be more confusion in the business world in the next decade than in any decade in history. And the current pace of change will only accelerate.” Steve Case “We are in a brawl with no rules.” Paul Allaire “Strategy meetings held once or twice a year” to “Strategy meetings needed several times a week” Source: New York Times on Meg Whitman/eBay “How we feel about the evolving future tells us who we are as individuals and as a civilization: Do we search for stasis—a regulated, engineered world? Or do we embrace dynamism—a world of constant creation, discovery and competition? Do we value stability and control? Or evolution and learning? Do we think that progress requires a central blueprint? Or do we see it as a decentralized, evolutionary process? Do we see mistakes as permanent disasters? Or the correctable byproducts of experimentation? Do we crave predictability? Or relish surprise? These two poles, stasis and dynamism, increasingly define our political, intellectual and cultural landscape.” —Virginia Postrel, The Future and Its Enemies Successful Businesses’ Dozen Truths: TP’s 30-Year Perspective 1. Insanely Great & Quirky Talent. 2. Disrespect for Tradition. 3. Totally Passionate (to the Point of Irrationality) Belief in What We Are Here to Do. 4. Utter Disbelief at the Bullshit that Marks “Normal Industry Behavior.” 5. A Maniacal Bias for Execution … and Utter Contempt for Those Who Don’t “Get It.” 6. Speed Demons. 7. Up or Out. (Meritocracy Is Thy Name. Sycophancy Is Thy Scourge.) 8. Passionate Hatred of Bureaucracy. 9. Willingness to Lead the Customer … and Take the Heat Associated Therewith. (Mantra: Satan Invented Focus Groups to Derail True Believers.) 10. “Reward Excellent Failures. Punish Mediocre Successes.” 11. Courage to Stand Alone on One’s Record of Accomplishment Against All the Forces of Conventional Wisdom. 12. A Crystal Clear Understanding of Brand Power. It is the foremost task— and responsibility— of our generation to re-imagine our enterprises, private and public. —from the Foreword, Re-imagine “Let’s compete—by training the best workers, investing in R & D, erecting the best infrastructure and building an education system that graduates students who rank with the worlds best. Our goal is to be competitive with the best so we both win and create jobs.” —Craig Barrett (Time/03.01.04) “In a global economy, the government cannot give anybody a guaranteed success story, but you can give people the tools to make the most of their own lives.” —WJC, from Philip Bobbitt, The Shield of Achilles: War, Peace, and the Course of History Age of Agriculture Industrial Age Age of Information Intensification Age of Creation Intensification Source: Murikami Teruyasu, Nomura Research Institute “The Creative Class derives its identity from its members’ roles as purveyors of creativity. Because creativity is the driving force of economic growth, in terms of influence the Creative Class has become the dominant class in society.” —Richard Florida, The Rise of the Creative Class (38M, 30%) The Winning Edge: Peters’ Big6 1. Research-Innovation 2. Entrepreneurial Attitude & Support (Especially from Capital Markets) 3. Creative (“Obstreperous”) Education 4. Free Trade-Open Markets 5. Individual Self-reliance (& Supports Therefore) 6. Cutting-edge Infrastructure How Nations Become Wealthy 1. Property rights 2. Scientific rationalism 3. Capital markets 4. Fast and efficient communications and transportation Source: The Birth of Plenty: How the Prosperity of the Modern World Was Created, William Bernstein 2. The Destruction Imperative. “Wealth in this new regime flows directly from innovation, not optimization. That is, wealth is not gained by perfecting the known, but by imperfectly seizing the unknown.” Kevin Kelly, New Rules for the New Economy “It is generally much easier to kill an organization than change it substantially.” Kevin Kelly, Out of Control C.E.O. to C.D.O. Forbes100 from 1917 to 1987: 39 members of the Class of ’17 were alive in ’87; 18 in ’87 F100; 18 F100 “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 “Mr. Foster and his McKinsey colleagues collected detailed performance data stretching back 40 years for 1,000 U.S. companies. They found that none of the long-term survivors managed to outperform the market. Worse, the longer companies had been in the database, the worse they did.”—Financial Times/11.28.2002 “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 Success Kills! “The more successful a company, the flatter its forgetting curve.” — Gary Hamel and C.K. Prahalad “Conglomerates don’t work.” —James Surowiecki, The New Yorker (07.01.2002) “MERGERS: Why Most Big Deals Don’t Pay Off. A BusinessWeek analysis shows that 61% of buyers destroyed shareholder wealth.” —BusinessWeek/10.14.2002 “When asked to name just one big merger that had lived up to expectations, Leon Cooperman, former cochairman of Goldman Sachs’ Investment Policy I’m sure there are success stories out there, but at this moment I draw a blank.” Committee, answered: Mark Sirower, The Synergy Trap “Acquisitions are about buying market share. Our challenge is to create markets. There is a big difference.” Peter Job, CEO, Reuters 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 “The $58B hostile bid by Sanofi-Synthelabo for Aventis has been greeted skeptically, as has the news that Novartis may counterbid. Few investors believe that Big Pharma can compensate for a deficit of new drugs by getting bigger. Some suspect the converse is true: that size has made them sluggish. … That has led to some thinking the unthinkable: that pharmaceutical companies should leave drug discovery to biotech companies and focus their efforts on development and marketing.” —Financial Times/03.2004 Winning the Merger Game Is Possible --Lots of deals --Little deals --Friendly deals --Stay close to core competence --Strategy is easy to understand Source: “The Mega-merger Mouse Trap”/Wall Street Journal/02.17.2004/David Harding & Sam Rovit, Bain & Co./re Comcast-Disney TP on Acquisitions 1. Big + Big = Disaster. (Statistically.) (There are exceptions; e.g., Citigroup.) 2. Big (GE, Cisco, Omnicom) acquires small/specialist = Good … if you can retain Top Talent. 3. Odds on achieving “projected synergies” among Mixed Big “cultures”: 10%. 4. Max Scale Advantages are achieved at a smaller size than imagined. 5. Attacked by Big, Mediocre Medium marries Mediocre Medium to “bulk up.” Result: Big Mediocrity … or worse. 6. Any size—if Great & Focused—can win, locally or globally. 7. Increasingly, Alliances deliver more value than mergers —and clearly abet flexibility. 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 “Beware of the tyranny of making Small Changes to Small Things. Rather, make Big Changes to Big Things.” —Roger Enrico, former Chairman, PepsiCo “Perfection is achieved only by institutions on the point of collapse.” — C. Northcote Parkinson 2A. Yo, Jim . Or: The Case for … Technicolor! “intrepid, unprincipled, reckless, predatory, with boundless ambition, civilized in externals but a savage at heart.” 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 Huh? “Humility: The Surprise Factor in Leadership … bosses with Gungho Qualities and Charisma May Be Out of Fashion” —Headline/FT/ re JCollins/10.03 Jim & Tom. Joined at the hip. Not. I. Good to Great II. Built to Last III. Quiet, Humble Leaders I. Good to Great II. Built to Last III. Quiet, Humble Leaders Good to Great: Fannie Mae … Kroger … Walgreens … Philip Morris … Pitney Bowes … Abbott … Kimberly-Clark … Wells Fargo SET THE AGENDA. Great Companies … (Period.) AGENDA SETTERS: “Set the Table”/ Pioneers/ Questors/ Adventurers US Steel … Ford … Macy’s … Sears … Litton Industries … ITT … The Gap … Limited … Wal*Mart … P&G … 3M … Intel … IBM … Apple … Nokia … Cisco … Dell … MCI … Sun … Oracle … Microsoft … Enron … Schwab … GE … Southwest … Laker …People Express … Ogilvy … Chiat/Day … Virgin … eBay … Amazon … Sony … BMW … CNN … I. Good to Great II. Built to Last III. Quiet, Humble Leaders Built to Last v. Built to Flip “The problem with Built to Last is that it’s a romantic notion. Large companies are incapable of ongoing innovation, of ongoing flexibility.” “Increasingly, successful businesses will be ephemeral. They will be built to yield something of value – and once that value has been exhausted, they will vanish.” Fast Company Warren Bennis & Patricia Ward Biederman/ Great Groups Don’t Last Very Long! Organizing Genius: “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 McKinsey Quarterly) “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 I. Good to Great II. Built to Last III. Quiet, Humble Leaders Huh? “Quiet, workmanlike, stoic leaders bring about the big transformations.”--JC Huh? “Humility: The Surprise Factor in Leadership … bosses with Gungho Qualities and Charisma May Be Out of Fashion” —Headline/FT/ re JCollins/10.03 (TP: scribble: “Nelson, Wellington, Montgomery, Disraeli, Churchill, Thatcher”) Wellington Nelson Disraeli Churchill Montgomery Thatcher “Humble” Pastels? T. Paine/P. Henry/A. Hamilton/T. Jefferson/B. Franklin A. Lincoln/U.S. Grant/W.T. Sherman TR/FDR/LBJ/RR/JFK Patton/Monty/Halsey M.L. King/C. de Gaulle/M. Gandhi/W. Churchill Picasso/Mozart/Copernicus/Newton/Einstein/Djarassi/Watson H. Clinton/G. Steinem/I. Gandhi/G. Meir/M. Thatcher E. Shockley/A. Grove/J. Welch/L. Gerstner/L. Ellison/B. Gates/ S. Jobs/S. McNealy/T. Turner/R. Murdoch/W. Wriston A. Carnegie/J.P. Morgan/H. Ford/S. Honda/J.D. Rockefeller/ T.A. Edison Rummy/Norm/Henry/Wolfie Elizabeth Cady Stanton/Susan B. Anthony/Martha Cary Thomas/Carrie Chapman Catt/Alice Paul/Anna Elizabeth Dickinson/Arabella Babb Mansfield/Margaret Sanger “You can’t behave in a calm, rational manner. You’ve got to be out there on the lunatic fringe.” — Jack Welch, on GE’s quality program “Roosevelt’s duplicity, Churchill’s self-absorption” … “We are all worms. But I do believe that I am a glow-worm.” (WSC) … “Imperial and bold” [WSC and TR] … “arrogance and instability” … “rough, sarcastic, bullying” Source: Jon Meacham, Franklin and Winston, et al. “a vainglorious selfpromoter spoiling for a fight” —Arthur Koestler on Galileo “In my experience, all successful commanders are prima donnas, and must be so treated.” —George S. Patton Audie Murphy was the most decorated soldier in WW2. 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. Jim Collins vs. Michael Maccoby “quiet, workmanlike, stoic” vs. “larger-than-life leaders”/ “egoists, charmers, risk-takers with big visions”: Carnegie, Rockefeller, Edison, Ford, Welch, Jobs, Gates “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 /October2003 The Re-imagineer’s Credo … or, Pity the Poor Brown* Technicolor Times demand … Technicolor Leaders and Boards who recruit … Technicolor People who are sent on … Technicolor Quests to execute … Technicolor (WOW!) Projects in partnership with … Technicolor Customers and … Technicolor Suppliers all of whom are in pursuit of … Technicolor Goals and Aspirations fit for … Technicolor Times. *WSC “When it comes to transformative technologies, overoptimistic investors are actually working for the common good—even if they don’t know it. We can be glad that investors financed the construction of thousands of miles of track in the middle of the nineteenth century, despite the fact that most of them dropped a bundle doing it. The same goes for overoptimistic investors who poured money into semiconductors thirty years ago, financed undersea fiber-optic cables in the late nineties, and now are poised to lose their shirts in the coming nanobubble. In the dreams of avarice lie the seeds of progress.”— james Surowiecki/New Yorker/03.2004 “In Italy for 30 years under the Borgias they had warfare, terror, murder, bloodshed—and produced Michelangelo, da Vinci and the Renaissance. In Switzerland they had brotherly love, 500 years of democracy and peace, and what did they produce—the cuckoo clock.” Orson Welles, as Harry Lime, in The Third Man II. NEW BUSINESS. NEW TECH. 3. IS/ IT/ Web: “On the Bus” or “Off the Bus.” square feet “Invisible Supplier Has Penney’s Shirts All Buttoned Up: From Hong Kong, It Tracks Sales, Restocks Shelves, Ships Right to the Store.” —Headline, Wall Street Journal (09.11.03) “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 (HealthLeaders/12.2002) “MIT Everywhere: EVERY LECTURE, EVERY QUIZ, ALL ONLINE, FOR FREE. MEET THE GLOBAL GEEKS GETTING AN MIT EDUCATION, OPEN SOURCESTYLE.” —Headline/Wired/09.03 “Dawn Meyerreicks, CTO of the Defense Information Systems Agency, made one of the most fateful military calls of the 21st 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 and 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/ OCT2002 “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 e-piphany epicurious.com “flash mobs” (!) “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 Case: CRM Amen! “The Age of the Never Satisfied Customer” Regis McKenna “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! 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: 24.3M (10.2002); 2X Y2000. Wells Fargo: 1/3rd; 3.3M; 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 IS/IT strategy! 5% F500 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 4. The White Collar Revolution. Steel: 75,000,000 tons in ’82 to 102,000,000 tons in ’02. 289,000 steelworkers in ’82 to 74,000 steelworkers in ’02. Source: Fortune/11.24.03 E.g. … Jeff Immelt: 75% of “admin, back room, finance” “digitalized” in years. Source: BW (01.28.02) “A bureaucrat is an expensive microchip.” Dan Sullivan, consultant and executive coach Deep Blue Redux*: 2,240 EKGs … 1,120 heart attacks. Hans Ohlin : 620. Lars Edenbrandt’s software: 738. (50 yr old chief of coronary care, Univ of Lund/SW) *Only this time it matters! “Organizations will still be critically important in the world, but as ‘organizers,’ not ‘employers’!” — Charles Handy “Don’t own nothin’ if you can help it. If you can, rent your shoes.” F.G. “P&G Hires Out Employee Services to IBM” —Burlington Free Press/09.10.03/ on IBM’s 10-year, $400M contract with P&G (P&G farmed out IT to HP in May, Facilities to Jones Lang LaSalle in June) Ford: “Vehicle brand owner” (“design, engineer, and market, but not actually make”) Source: The Company, John Micklethwait & Adrian Wooldridge III. NEW BUSINESS. NEW VALUE PROPOSITION. 5. The “PSF Solution”: The Professional Service Firm Model. “ Daddy, what do you do?” Sarah: “I’m a ‘cost center.’ ” Daddy: So what will be the Basic Building Block of the New Org? Every job done in W.C.W. is also done “outside” …for profit! Answer: PSF! [Professional Service Firm] Department Head to … Managing Partner, HR [IS, etc.] Inc. TP to HRMAC: You are the … Rock Stars of the Age of Talent! DD$21M Dept. Head I = Sports G.M. Dept. Head II = V.C. eHR*/PCC** *All HR on the Web **Productivity Consulting Center Source: E-HR: A Walk through a 21st Century HR Department, John Sullivan, IHRIM Model PSF … (1) Translate ALL departmental activities into discrete W.W.P.F. “Products.” (2) 100% go on the Web. (3) Non-awesome are outsourced (75%??). (4) Remaining “Centers of Excellence” are retained & leveraged to the hilt! “Typically in a mortgage company or financial services company, ‘risk management’ is an overhead, not a revenue center. We’ve become more than that. We pay for ourselves, and we actually make money for the company.” —Frank Eichorn, Director of Credit Risk Data Management Group, Wells Fargo Home Mortgage (Source: sas.com) 6. The Heart of the Value Added Revolution: PSFs Unbound/ The “Solutions Imperative.” Base Case: The Sameness Trap “While everything may it is also increasingly the same.” be better, Paul Goldberger on retail, “The Sameness of Things,” The New York Times “Customers will try ‘low cost providers’ … because the Majors have not given them any clear reason not to.” Leading Insurance Industry Analyst “When we did it ‘right’ it was still pretty ordinary.” Barry Gibbons on “Nightmare No. 1” Fight ’til Death! “I thought, ‘What a dreadful mission I have in life.’ I’d love to get six-thousand restaurants up to spec, but when I do it’s ‘Ho-hum.’ It’s bugged me ever since. It’s one of the great paradoxes of modern business. We all know distinction is key, and yet in the last twenty years we have created a plethora of ho-hum products and services. Just go fly in an airplane. It could be such an enlightening experience. Ho-hum. We swim in an ocean of ho-hum, and I’m going to fight it. I’m going to die fighting it.” — Barry Gibbons “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 “We make over three new product announcements a day. Can you remember them? Our customers can’t!” Carly Fiorina 09.11.2000: HP bids $18,000,000,000 for PricewaterhouseCoopers 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: $35B. Pledge/’99: Business Partner Charter. 72 strategic partners, aim for 200. Drop many in-house programs/products. (BW/12.01). “Customer Satisfaction” to “Customer Success” “We’re getting better at [Six Sigma] every day. But we really need to think about the customer’s profitability. Are customers’ bottom lines really benefiting from what we provide them?” Bob Nardelli, GE Power Systems Keep In Mind: Customer Satisfaction versus Customer Success E.g. … UTC/Otis + Carrier: boxes to “integrated building systems” Is There a There There: The Ericsson Case 1. 50+% Mfg to Solectron/Flextronics 2. Substantial R&D to India 3. Division for licensing technology 4. JV with Sony on “crown jewel” handsets 5. Net: “a wireless specialist that depends on services more than manufacturing, on knowledge more than metal” Source: BW/11.04.02 Flextronics --$14B; 100K employees; 60% p.a. growth (’93-’00) -- “contract mfg” to EMS/Electronics Manufacturing Services (design, mfg, logistics, repair); “total package of outsourcing solutions” (Pamela Gordon, Technology Forecasters) -- “The future of manufacturing isn’t just in making things but adding value” (3,500 design engineers) Source: Asia Inc./02.2004 “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 4.5M Ford vehicles, from 21 mfg. sites to 6,000 NA dealers) “SCS”/Supply Chain Solutions: 750 locations; $2.5B; fastest growing division; 19 acquisitions, including a bank Source: Fast Company/02.04 “No longer are we only an insurance provider. Today, we also offer our customers the products and services that help them achieve their dreams, whether it’s financial security, buying a car, paying for home repairs, or even taking a dream vacation.”—Martin Feinstein, CEO, Farmers Group “ ‘Architecture’ is becoming a commodity. Winners will be ‘Turnkey Facilities Management’ providers.” SMPS Exec Omnicom: 60% (of $7B) from marketing services And the Winners Are … Televisions –12% Cable TV service +5% Toys -10% Child care +5% Photo equipment -7% Photographer’s fees +3% Sports Equipment -2% Admission to sporting event +3% New car -2% Car repair +3% Dishes & flatware -1% Eating out +2% Gardening supplies -0.1% Gardening services +2% Source: WSJ/05.16.03 IBM/Q3/10.15.03/Rev: +5% Services/Consulting: +11% Software: +5% Hardware: -5% PCs: -2% Technology/Chips: -33% IV. NEW BUSINESS. NEW BRAND. 7. A World of Scintillating “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 “Guinness as a brand is all about community. It’s about bringing people together and sharing stories.”—Ralph Ardill, Imagination, in re Guinness Storehouse 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? “I see us as being in the art business. Art, entertainment and mobile sculpture, which, coincidentally, also happens to provide transportation.” Bob Lutz: Source: NYT 10.19.01 “Lexus sells its cars as containers for our sound systems. It’s marvelous.”—Sidney Harman/ Harman International Duet … Whirlpool … “washing machine” to “fabric care system” … white goods: “a sea of undifferentiated boxes” … $400 to $1,300 … “the Ferrari of washing machines” … consumer: “They are our little mechanical buddies. They have personality. When they are running efficiently, our lives are running efficiently. They are part of my family.” … “machine as aesthetic showpiece” … “laundry room” to “family studio” / “designer laundry room” (complements Sub-Zero refrigerator and home-theater center) Source: New York Times Magazine/01.11.2004 From “Service’ to “Cause” 7X. 730A800P. F12A.* *Plus: WOW Department’” “Kill a Stupid Rule” contests, etc. 2001R: 34%; P: 29%; ’90-’00: 2,048%. Commerce Bank/NJ ($10B). Source: FC05.02. “Car designers need to create a story. Every car provides an opportunity to create an adventure. … “The Prowler makes you smile. Why? Because it’s focused. It has a plot, a reason for being, a passion.” Freeman Thomas, co-designer VW Beetle; designer Audi TT Hmmmm(?): “Only” Words … Story Adventure Smile Focus Plot Passion Experience … Cirque du Soleil DO YOU MEASURE UP?* *If not, why not? “Most executives have no idea how to add value to a market in the metaphysical world. But that is what the market will cry out for in the future. There is no lack of ‘physical’ products to choose between.” Jesper Kunde, Unique Now ... or Never [on the excellence of Nokia, Nike, Lego, Virgin et al.] Extraction & Goods: Male dominance Services & Experiences: Female dominance “Women don’t buy They join them.” brands. EVEolution The “Experience Ladder” Experiences Services Goods Raw Materials <TGW vs. >TGR 8. Experiences+: Embracing the “Dream Business.” 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 The marketing of Dreams (Dreamketing) Dreamketing: Touching the clients’ dreams. Dreamketing: The art of telling stories and entertaining. Dreamketing: Promote the dream, not the product. Dreamketing: Build the brand around the main dream. Dreamketing: Build the “buzz,” the “hype,” the “cult.” Source: Gian Luigi Longinotti-Buitoni Common Products “Dream” Products Maxwell House BVD Payless Hyundai Suzuki Atlantic City New Jersey Carter Conners CNN Starbucks Victoria’s Secret Ferragamo Ferrari Harley-Davidson Acapulco California Kennedy Pele Millionaire Source: Gian Luigi Longinotti-Buitoni Building the Creative Organization Choose a creator: The cultural leader who gives the company an aesthetic point of view. Hire eclectically: Hire collaborators with different cultures and past histories in order to balance rigor with emotion. Prepare vertically: Develop a rigorous understanding of the product and the client. Develop horizontally: Promote curiosity in unrelated disciplines. Lead emotionally: Engender passionate dedication through vision and freedom. Build for the long haul: Creativity requires a lifetime commitment. Source: Gian Luigi Longinotti-Buitoni (Revised) Experience Ladder Dreams Come True Awesome Experiences Solutions Services Goods Raw Materials “The sun is setting on the Information Society—even before we have fully adjusted to its demands as individuals and as companies. We have lived as hunters and as farmers, we have worked in factories and now we live in an information-based society whose icon is the computer. We stand facing the fifth kind of society: the Dream Society. … The Dream Society is emerging this very instant—the shape of the future is visible today. Right now is the time for decisions—before the major portion of consumer purchases are made for emotional, nonmaterialistic reasons. Future products will have to appeal to our hearts, not to our heads. Now is the time to add emotional value to products and services.” —Rolf Jensen/The Dream Society:How the Coming Shift from Information to Imagination Will Transform Your Business “In Denmark, eggs from free-range hens have conquered over 50 percent of the market. Consumers do not want hens to live their lives in small, confining cages. They are willing to pay 15 percent to 20 percent more for the story about animal ethics. This is classic Dream Society logic. Both kind of eggs are similar in quality, but consumers prefer eggs with the better story. After we debated the issue and stockpiled 50 other examples, the conclusion became evident: Stories and tales speak directly to the heart rather than the brain. After a century where society was marked by science and rationalism, the stories and values are returning to the scene.” —Rolf Jensen/The Dream Society: How the Coming Shift from Information to Imagination Will Transform Your Business “Person 1 is the rational, planning being, and Person 2 is the emotional and story-buying entity. The last century disowned and repressed Person 2—a rejection that is not surprising in a technological era. Now Person 2 is back in town—in the shops, on the Internet, in the companies, in politics, in economics, even science.” —Rolf Jensen/The Dream Society: How the Coming Shift from Information to Imagination Will Transform Your Business Six Market Profiles 1. Adventures for Sale 2. The Market for Togetherness, Friendship and Love 3. The Market for Care 4. The Who-Am-I Market 5. The Market for Peace of Mind 6. The Market for Convictions Rolf Jensen/The Dream Society: How the Coming Shift from Information to Imagination Will Transform Your Business New Market Realities Selling Dreams: How to Make Any Product Irresistible, Gian Luigi Longinotti-Buitoni The Dream Society: How the Coming Shift from Information to Imagination Will Transform Your Business, Rolf Jensen Trading Up: The New American Luxury, Michael Silverstein & Neil Fiske 15 “Leading” Biz Schools Design/Core: 0 Design/Elective: 1 Creativity/Core: 0 Creativity/Elective: 4 Innovation/Core: 0 Innovation/Elective: 6 Source: DMI/Summer 2002 9. “It” all adds up to … THE BRAND. The Heart of Branding … “WHO ARE WE?” “WHAT’S OUR STORY?” “We are in the twilight of a society based on data. As information and intelligence become the domain of computers, society will place more value on the one human ability that cannot be automated: emotion. Imagination, myth, ritual - the language of emotion will affect everything from our purchasing decisions Companies will thrive on the basis of their stories and myths. Companies will need to understand to how we work with others. that their products are less important than their stories.” Rolf Jensen, Copenhagen Institute for Future Studies “Apple opposes, IBM solves, Nike exhorts, Virgin enlightens, Sony dreams, Benetton protests. … Brands are not nouns but verbs.” Source: Jean-Marie Dru, Disruption “EXACTLY HOW ARE WE DRAMATICALLY DIFFERENT?” “A great company is defined by the fact that it is not compared to its peers.” Phil Purcell, Morgan Stanley Brand = You Must Care! “Success means never letting the competition define you. Instead you have to define yourself based on a point of view you care deeply about.” Tom Chappell, Tom’s of Maine “WHY DOES IT MATTER TO THE CLIENT?” “EXACTLY HOW DO I PASSIONATELY CONVEY THAT DRAMATIC DIFFERENCE TO THE CLIENT ?” Branding: Is-Is Not “Table” TNT is not: TNT is: TNT is not: Juvenile Contemporary Mindless Meaningful Elitist Predictable Suspenseful Dull Frivolous Exciting Superficial Powerful Old-fashioned Slow Self-important Message … Is Not >> Is Rules of “Radical Marketing” Love + Respect Your Customers! Hire only Passionate Missionaries! Create a Community of Customers! Celebrate Craziness! Be insanely True to the Brand! Sam Hill & Glenn Rifkin, Radical Marketing (e.g., Harley, Virgin, The Dead, HBS, NBA) V. NEW BUSINESS. NEW MARKETS. 10. Trends Worth Trillion$$$ I: Women Roar. ????????? Home Furnishings … 94% Vacations … 92% (Adventure Travel … 70%/ $55B travel equipment) Houses … 91% D.I.Y. (major “home projects”) … 80% Consumer Electronics … 51% (66% home computers) Cars … 68% (90%) All consumer purchases … 83% Bank Account … 89% Household investment decisions … 67% Small business loans/biz starts … 70% Health Care … 80% ???? Riding Lawnmowers 2/3rds working women/ 50+% working wives > 50% 80% checks 61% bills 53% stock (mutual fund boom) 43% > $500K 95% financial decisions/ 29% single handed 1970-1998 Men’s median income: +0.6% Women’s median income: + 63% Source: Martha Barletta, Marketing to Women $5+T > Japan 10M/28M/$3.6T > Germany Business Purchasing Power Purchasing mgrs. & agents: 51% HR: >>50% Admin officers: >50% Source: Martha Barletta, Marketing to Women Women-owned Bus. U.S. employees > F500 employees worldwide Source: Martha Barletta, Marketing to Women 91% women: ADVERTISERS DON’T UNDERSTAND US. (58% “ANNOYED.”) Source: Greenfield Online for Arnold’s Women’s Insight Team (Martha Barletta, Marketing to Women) Carol Gilligan/ In a Different Voice Men: Get away from authority, family Women: Connect Men: Self-oriented Women: Other-oriented Men: Rights Women: Responsibilities FemaleThink/ Popcorn “Men and women don’t think the same way, don’t communicate the same way, don’t buy for the same reasons.” “He simply wants the transaction to take place. She’s interested in creating a relationship. Every place women go, they make connections.” “Men seem like loose cannons. Men always move faster through a store’s aisles. Men spend less time looking. They usually don’t like asking where things are. You’ll see a man move impatiently through a store to the section he wants, pick something up, and then, almost abruptly he’s ready to buy. For a man, ignoring the price tag is almost a sign of virility.” Paco Underhill, Why We Buy* (*Buy this book!) How Many Gigs You Got, Man? “Hard to believe … Different criteria” “Every research study we’ve done indicates that women really care about the relationship with their vendor.” Robin Sternbergh/ IBM Women's View of Male Salespeople Technically knowledgeable; assertive; get to the point; pushy; condescending; insensitive to women’s needs. Source: Judith Tingley, How to Sell to the Opposite Sex (Martha Barletta, Marketing to Women) Read This: Barbara & Allan Pease’s Why Men Don’t Listen & Women Can’t Read Maps “Resting” State: 30%, 90%: “A woman knows her children’s friends, hopes, dreams, romances, secret fears, what they are thinking, how they are feeling. Men are vaguely aware of some short people also living in the house.” Barbara & Allan Pease, Why Men Don’t Listen & Women Can’t Read Maps “As a hunter, a man needed vision that would allow him to zero in on targets in the distance … whereas a woman needed eyes to allow a wide arc of vision so that she could monitor any predators sneaking up on the nest. This is why modern men can find their way effortlessly to a distant pub, but can never find things in fridges, cupboards or drawers.” Barbara & Allan Pease, Why Men Don’t Listen & Women Can’t Read Maps “Female hearing advantage contributes significantly to what is called ‘women’s intuition’ and is one of the reasons why a woman can read between the lines of what people say. Men, however, shouldn’t despair. They are excellent at imitating animal sounds.” Barbara & Allan Pease, Why Men Don’t Listen & Women Can’t Read Maps Senses Vision: Men, focused; Women, peripheral. Hearing: Women’s discomfort level I/2 men’s. Smell: Women >> Men. Touch: Most sensitive man < Least sensitive women. Source: Martha Barletta, Marketing to Women Sensitivity to differences: Twice as many card stacks. More “contextual,” “holistic.” “People powered”: Age 3 days, baby girls 2X eye contact. Source: Martha Barletta, Marketing to Women “When a woman is upset, she talks emotionally to her friends; but an upset man rebuilds a motor or fixes a leaking tap.” Barbara & Allan Pease, Why Men Don’t Listen & Women Can’t Read Maps “Women speak and hear a language of connection and intimacy, and men speak and hear a language of status and independence. Men communicate to obtain information, establish their status, and show independence. Women communicate to create relationships, encourage interaction, and exchange feelings.” Judy Rosener, America’s Competitive Secret “The Hollywood scripts that men write tend to be direct and linear, while women’s compositions have many conflicts, many climaxes, and many endings.” Helen Fisher, The First Sex: The Natural Talents of Women and How They Are Changing the World “Women are more comfortable talking or thinking about people and relationships, while men prefer to contemplate things.” —research reported in the New York Times (08.10.2003) Editorial/Men: Tables, rankings.* Editorial/Women: Narratives that cohere.* *Redwood (UK) Initiate Purchase Men: Study “facts & features.” Women: Ask lots of people for input. Source: Martha Barletta, Marketing to Women Read This Book … EVEolution: The Eight Truths of Marketing to Women Faith Popcorn & Lys Marigold EVEolution: Truth No. 1 Connecting Your Female Consumers to Each Other Connects Them to Your Brand “The ‘Connection Proclivity’ in women starts early. When asked, ‘How was school today?’ a girl usually tells her mother every detail of what happened, while a boy might grunt, ‘Fine.’ ” EVEolution “Women don’t buy They join them.” brands. EVEolution Purchasing Patterns Women: Harder to convince; more loyal once convinced. Men: Snap decision; fickle. Source: Martha Barletta, Marketing to Women 2.6 vs. “War has broken out over your home-improvement dollar, and Lowe’s has superpower Home Depot on the defensive. It’s not-so- secret ploy: Lure women.” —Forbes.com “Volvo Teams Up to Build What Women Want: Concept Car Goes for Great Storage, Easy Maintenance” —headline/USA Today/12.16.2003/140-person team;80% women Not ! “Year of the Woman” Enterprise Reinvention! Recruiting Hiring/Rewarding/Promoting Structure Processes Measurement Strategy Culture Vision Leadership THE BRAND ITSELF! “Honey, are you sure you have the kind of money it takes to be looking at a car like this?” Psssst! Wanna see my “porn” collection? Ad from Furniture /Today (04.01): “MEET WITH THE EXPERTS!: How Retailing’s Most Successful Stay that Way” Presenting Experts: M = F= ?? 16; (94% = 272) “Customer is King”: 4,440 “Customer is Queen”: 29 Source: Steve Farber/Google search/04.2002 “Women Beat Men at Art of Investing” Source: Miami Herald, reporting on a study by Profs. Terrance Odean and Brad Barber, UC Davis (Cause: Guys are “in and out” of stocks more often; women choose carefully and hold on for the long term) Investment Club Returns Women-only clubs 1997 … 17.9% Mixed … 17.3% Men-only … 15.6% Source: National Assoc. Investors Value Line: Top State* Investment Clubs 2000 8 … All male 19 … Coed 22 … All FEMALE * VT & Maine not included; D.C. included 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. “And even if they manage to get the age thing right, [Marti] Barletta says companies still tend to screw up in fairly predictable ways when they add women to the equation. Too often, their first impulse is to paint the brand pink, lavishing their ads with flowers and bows, or, conversely, pandering with images of women warriors and other cheesy clichés. In other cases they use language intended to be empathetic that come across instead as borderline offensive. ‘One bank took out an ad saying, We recognize women’s special needs,’ says Barletta. ‘No offense, but doesn’t that sound like the Special Olympics?’ ” —Fast Company/03.04 11. Trends Worth Trillion$$$ II: Boomer Bonanza/ Godzilla Geezer. Subject: Marketers & Stupidity “It’s 18-44, stupid!” Subject: Marketers & Stupidity “18-44 is stupid, stupid!” Or is it: 2000-2010 Stats 18-44: -1% 55+: +21% (55-64: +47%) 44-65: “New Consumer Majority” * *45% larger than 18-43; 60% larger by 2010 Source: Ageless Marketing, David Wolfe & Robert Snyder “The New Consumer 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 “Baby-boomer Women: The Sweetest of Sweet Spots for Marketers” —David Wolfe and Robert Snyder, Ageless Marketing “It’s like a tsunami coming at you. You know the tidal wave is going to hit, and it’s a question of whether we’ll be ready.” Ed Schneider, Professor of — Gerontology, USC Aging/“Elderly” $$$$$$$$$$$$ “I’m in charge!” “NOT ACTING THEIR AGE: As Baby Boomers Zoom into Retirement, Will America Ever Be the Same?” USN&WR Cover/06.01 “Sixty Is the New Thirty” —Cover/AARP/11.03 50+ $7T wealth (70%)/$2T annual income 50% all discretionary spending 79% own homes/40M credit card users 41% new cars/48% luxury cars $610B healthcare spending/ 74% prescription drugs 5% of advertising targets Ken Dychtwald, Age Power: How the 21st Century Will Be Ruled by the New Old “Advertisers pay more to reach the kid because they think that once someone hits middle age he’s too set in his ways to be susceptible to advertising. … In fact, this notion of impressionable kids and hidebound geezers is little more than a fairy tale, a Madison Avenue gloss on Hollywood’s cult of youth.”—James Surowiecki (The New Yorker/04.01.2002) Read This! Carol Morgan & Doran Levy, Marketing to the Mindset of Boomers and Their Elders “Marketers attempts at reaching those over 50 have been miserably unsuccessful. No market’s motivations and needs are so poorly understood.”—Peter Francese, founding publisher, American Demographics “Focused on assessing the marketplace based on lifetime value (LTV), marketers may dismiss the mature market as headed to its grave. The reality is that at 60 a person in the U.S. may enjoy 20 or 30 years of life.” —Carol Morgan & Doran Levy, Marketing to the Mindset of Boomers and Their Elders “While the average American age 12 or older watched at least five movies per year in a theater, those 40 and older were the most frequent moviegoers, viewing 12 or more a year.”—Carol Morgan & Doran Levy, Marketing to the Mindset of Boomers and Their Elders “Women 65 and older spent $14.7 billion on apparel in 1999, almost as much as that spent by 25- to 34-yearolds. While spending by the older women increased by 12% from the previous year, that of the younger group increased by only 0.1%. But who in the fashion industry is currently pursuing this market?” —Carol Morgan & Doran Levy, Marketing to the Mindset of Boomers and Their Elders Possession Experiences /“Desires for things”/Young adulthood/to 38 Catered Experiences/ “Desires to be served by others”/Middle adulthood Being Experiences/“Desires for trancendary experiences”/Late adulthood Source: David Wolfe and Robert Snyder/Ageless Marketing “ ‘Age Power’ will st 21 rule the century, and we are woefully unprepared.” Ken Dychtwald, Age Power: How the 21st Century Will Be Ruled by the New Old No: “Target Marketing” Yes: “Target Innovation” & “Target Delivery Systems” Marketing to Women, Martha Barletta EVEolution: The Eight Truths of Marketing to Women, Faith Popcorn & Lys Marigold Ageless Marketing, David Wolfe & Robert Snyder Marketing to the Mindset of Boomers and Their Elders, Carol Morgan & Doran Levy Selling Dreams: How to Make Any Product Irresistible, Gian Luigi Longinotti-Buitoni The Dream Society: How the Coming Shift from Information to Imagination Will Transform Your Business, Rolf Jensen Trading Up: The New American Luxury, Michael Silverstein & Neil Fiske VII. NEW BUSINESS. NEW YOU. 12. Re-inventing the Individual: Welcome to a Brand You World “If there is nothing very special about your work, no matter how hard you apply yourself, you won’t get noticed, and that increasingly means you won’t get paid much either.” Michael Goldhaber, Wired TIM MONICH: “the man Hollywood turns to for the right accent” Source: Boston Globe/01.25.2004 Thriving in 24/7 (Sally Helgesen) START AT THE CORE. Nimbleness only possible if we “locate our inner voice,” take regular inventory of where we are. LEARN TO ZIGZAG. Think “gigs.” Think lifelong learning. Forget “old loyalty.” Work on optimism. CREATE OUR OWN WORK. Articulate your value. Integrate your passions. I.D. your market. Run your own business. WEAVE A STRONG WEB OF INCLUSION. Build your own support network. Master the art of “looking people up.” “You are the storyteller of your own life, and you can create your own legend or not.” Isabel Allende The Rule of Positioning “If you can’t describe your position in eight words or less, you don’t have a position.” — Jay Levinson and Seth Godin, Get What You Deserve! “My ancestors were printers in Amsterdam from 1510 or so until 1750, and during that entire time they didn’t have to learn anything new.” Peter Drucker, Business 2.0 (08.22.00) “Knowledge becomes obsolete incredibly fast. The continuing professional education of adults is the No. 1 industry in the next 30 years … mostly on line.” Peter Drucker, Business 2.0 (22August2000) 3 Weeks in May “Training” & Prep: 187 “Work”: 41 (“Other”: 17) 1% vs. 367% Divas do it. Violinists do it. Sprinters do it. Golfers do it. Pilots do it. Soldiers do it. Surgeons do it. Cops do it. Astronauts do it. Why don’t businesspeople do it? Prep: 1 hour per 1 minute (WSC) “Forget ‘practice makes perfect.’ Substitute ‘perfect practice makes perfect.’ ” (TT) “Major difference between ‘best’ and ‘average’? ‘Best’ get as much pleasure from practice as performance.” —Ben Zander Edward Jones’ Training Machine* 146 hours/employee/year New hires: 4X avg. 3.8% of payroll * #1, “The 100 Best Companies To Work For”/Fortune/01.2003 13. Boss Job One: The Talent Obsession. “When land was the scarce resource, nations battled over it. The same is happening now for talented people.” Stan Davis & Christopher Meyer, futureWEALTH Age of Agriculture Industrial Age Age of Information Intensification Age of Creation Intensification Source: Murikami Teruyasu, Nomura Research Institute Brand = Talent. Talent! Tina Brown: “The first thing to do is to hire enough talent that a critical mass of excitement starts to grow.” Source: Business2.0/12.2002-01.2003 The Talent Ten 1. Obsession P.O.T.* = All Consuming *Pursuit of Talent Model 25/8/53 Sports Franchise GM “In most companies, the Talent Review Process is a farce. At GE, Jack Welch and his two top HR people visit each division for a day. They review the top 20 to 50 people by name. They talk about Talent Pool strengthening issues. The Talent Review Process is a contact sport at GE; it has the intensity and the importance of the budget process at most companies.”—Ed Michaels “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 PARC’s Bob Taylor: “Connoisseur of Talent” Les Wexner: From sweaters to people! Talent (Not) on His Mind Norman Pearlstine, Editor-in-Chief, Time Inc., asked a magazine’s managing editor to name 10 people outside Time that the magazine should pursue: “He said, I can’t think of any.’ ” Source: New York Times/05.12.2003 2. Greatness Only The Best! 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 3. Performance Up or out! “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. 4. Pay Fork Over! “Top performing companies are two to four times more likely than the rest to pay what it takes to prevent losing top performers.” Ed Michaels, War for Talent (05.17.00) 5. Youth Grovel Before the Young! “Why focus on these late teens and twentysomethings? Because they are the first young who are both in a position to change the world, and are actually doing so. … For the first time in history, children are more comfortable, knowledgeable and literate than their parents about an innovation central to society. … The Internet has triggered the first industrial revolution in history to be led by the young.” The Economist [12/2000] 6. Diversity Mess Rules! “Where do good new ideas come from? That’s simple! From differences. Creativity comes from unlikely juxtapositions. The best way to maximize differences is to mix ages, cultures and disciplines.” Nicholas Negroponte “Diversity defines the health and wealth of nations in a new century. Mighty is the mongrel. The hybrid is hip. The impure, the mélange, the adulterated, the blemished, the rough, the black-and-blue, the mixand-match – these people are inheriting the earth. Mixing is the new norm. Mixing trumps isolation. It spawns creativity, nourishes the human spirit, spurs economic growth and empowers nations.” G. Pascal Zachary, The Global Me: New Cosmopolitans and the Competitive Edge CM Prof Richard Florida on “Creative Capital”: “You cannot get a technologically innovative place unless it’s open to weirdness, eccentricity and difference.” Source: New York Times/06.01.2002 7. Women Born to Lead! “AS LEADERS, WOMEN RULE: New Studies find that female managers outshine their male counterparts in almost every measure” Title, Special Report, BusinessWeek, 11.20.00 8. Weird The Cracked Ones Let in the Light! 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 “Deviance tells the story of every mass market ever created. What Deviants, Inc. starts out weird and dangerous becomes America’s next big corporate payday. So are you looking for the next mass market idea? It’s out there … way out there.” Source: Ryan Matthews & Watts Wacker, Fast Company (03.02) 9. Opportunity Make It an Adventure! “H.R.” to “H.E.D.” ??? Human Enablement Department “Firms will not ‘manage the careers’ of their employees. They will provide opportunities to enable the employee to develop identity and adaptability and thus be in charge of his or her own career.” Tim Hall et al., “The New Protean Career Contract” Talent Department People Department Center for Talent Excellence Seriously Cool People Who Recruit & Develop Seriously Cool People Etc. 10. Leading Genius We are all unique! Beware Lurking HR Types … One size NEVER fits all. One size fits one. Period. 100% IMAGINATION!* The Ritz Cookie Lady PPSI *Damn it. What’s your company’s … EVP? Employee Value Proposition, per Ed Michaels et al., The War for Talent; IBP/Internal Brand Promise per TP EVP = Challenge, professional growth, respect, satisfaction, opportunity, reward Source: Ed Michaels et al., The War 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 Talent’s “Big Two” Rules GREAT Finance Dept. = GREAT Football Team DIFFERENCES Among Cello Players = DIFFERENCES Among Hotel GMs 13A. Meet the New Women Rule! Boss: “AS LEADERS, WOMEN RULE: New Studies find that female managers outshine their male counterparts in almost every measure” Title, Special Report, BusinessWeek, 11.20.00 Lawrence A. Pfaff & Associates — 2 Years, 941 mgrs (672M, 269F); 360º feedback — Women: 20 of 20; 15 of 20 with statistical significance (incl. decisiveness, planning, setting stds.) — “Men are not rated significantly higher by any of the raters in any of the areas measured.” (LP) The New Economy … Shout goodbye to “command and control”! Shout goodbye to hierarchy! Shout goodbye to “knowing one’s place”! Women’s Strengths Match New Economy Imperatives: Link [rather than rank] workers; favor interactive-collaborative leadership style [empowerment beats top-down decision making]; sustain fruitful collaborations; comfortable with sharing information; see redistribution of power as victory, not surrender; favor multi-dimensional feedback; value technical & interpersonal skills, individual & group contributions equally; readily accept ambiguity; honor intuition as well as pure “rationality”; inherently flexible; appreciate cultural diversity. Source: Judy B. Rosener, America’s Competitive Secret: Women Managers “Society is based on male standards with women seen as anomalies deviating from the male norm.” — Bi Puvaneu, Institute for Future Studies (Stockholm) “On average, women and men possess a number of different innate skills. And current trends suggest that many sectors of the twentyfirst-century economic community are going to need the natural talents of women.” Helen Fisher, The First Sex: The Natural Talents of Women and How They Are Changing the World “TAKE THIS QUICK QUIZ: Who manages more 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?” Source: Selling Is a Woman’s Game: 15 Powerful Reasons Why Women Can Outsell Men, Nicki Joy & Susan Kane-Benson “Investors are looking more and more for a relationship with their financial advisers. They want someone they can trust, someone who listens. In my experience, in general, women may be better at these relationship-building skills than are men.” Hardwick Simmons, CEO, Prudential Securities Work’s Rewards F: Relationships, respect, self-realization. M: Title, salary, power. (“In all my research with men, I’ve never once heard a mention about the importance of relationships.”) Source: Susan Rice, former Director of Communications, BBDO Europe (from “A Dignified Woman”) Opportunity! U.S. M.Mgt. 41% T.Mgt. 4% Peak Partic. Age 45 % Coll. Stud. 52% G.B. E.U. Ja. 29% 18% 6% 3% 2% <1% 22 27 19 50% 48% 26% Source: Judy Rosener, America’s Competitive Secret +/The Boston Club: Corporate Salute (10.28.03) Degree Gap* Wom:Men/Bachelor’s … 2000: 133; 2010: 142 Wom:Men/Master’s … 2000: 138; 2010: 151 * Whites, Blacks, Hispanics, Asians, Native Americans Source: The New Gender Gap/BusWeek/05.26.2003 “THE NEW GENDER GAP: From kindergarten to grad school, boys are becoming the second sex”—Cover story, BusinessWeek/26 May 2003 “Are men obsolete?” —Headline, USN&WR/06.03.03 Read This! “Winning the Talent War for Women: Sometimes It Takes a Revolution” Douglas McCracken, HBR “Deloitte was doing a great job of hiring highperforming women; in fact, women often earned higher performance ratings than men in their first years with the firm. Yet the percentage of women decreased with step up the career ladder. … Most women weren’t leaving to raise families; they had weighed their options in Deloitte’s maledominated culture and found them wanting. Many, dissatisfied with a culture they perceived as endemic to professional service firms, switched professions.” Douglas McCracken, “Winning the Talent War for Women” [HBR] “The process of assigning plum accounts was largely unexamined. … Male partners made assumptions: ‘I wouldn’t put her on that kind of company because it’s a tough manufacturing environment.’ ‘That client is difficult to deal with.’ ‘Travel puts too much pressure on women.’ ” Douglas McCracken, “Winning the Talent War for Women” [HBR] !!!!!!!!!!!!!!! 14 to 168* *Leadership Positions/D&T/1992-2002/WIAR 14. Brand Talent+: Addressing the Education Fiasco. “My education was a prolonged and concerted attack on my individuality.” —Neil Crofts, Authentic Losing the War to Bismarck (and Rockefeller) J. D. Rockefeller’s General Education Board (1906): “In our dreams people yield themselves with perfect docility to our molding hands. … The task is simple. We will organize children and teach them in a perfect way the things their fathers and mothers are doing in an imperfect way.” John Taylor Gatto, A Different Kind of Teacher “My wife and I went to a [kindergarten] parent-teacher conference and were informed that our budding refrigerator artist, Christopher, would be receiving a grade of Unsatisfactory in art. We were shocked. How could any child—let alone our child—receive a poor His teacher informed us that he had refused to color within the lines, which was a state requirement for demonstrating ‘grade-level motor skills.’ ” grade in art at such a young age? Jordan Ayan, AHA! “How many artists are there in the room? Would you please raise your hands. FIRST GRADE: En masse the children leapt from their seats, arms waving. Every child was an artist. SECOND GRADE: About half the kids raised their hands, shoulder high, no higher. The hands were still. THIRD GRADE: At best, 10 kids out of 30 would raise a hand, tentatively, self-consciously. By the time I reached SIXTH GRADE, no more than one or two kids raised their hands, and then ever so slightly, betraying a fear of being identified by the group as a ‘closet artist.’ The point is: Every school I visited was participating in the suppression of creative genius.” Gordon MacKenzie, Orbiting the Giant Hairball: A Corporate Fool’s Guide to Surviving with Grace Ye gads: “Thomas Stanley has not only found no correlation between success in school and an ability to accumulate wealth, he’s actually found a negative correlation. ‘It seems that schoolrelated evaluations are poor predictors of economic success,’ Stanley concluded. What did predict success was a willingness to take risks. Yet the success-failure standards of most schools penalized risk takers. Most educational systems reward those who play it safe. As a result, those who do well in school find it hard to take risks later on.” Richard Farson & Ralph Keyes, Whoever Makes the Most Mistakes Wins The NAESP … Attributes of Those Who “Made” the 10th Grade History Book – Committed! – Determined to make a difference! – Focused! – Passionate! – Irrational about their life’s project! – Ahead of their time / Paradigm busters! – Impatient! / Action Obsessed Attributes of Those Who “Made” the 10th Grade History Book –Made lots of people mad! –Flouted the chain of command! –Creative / Quirky / Peculiar! / Rebels! / Irreverent! –Masters of improv / Thrive on chaos / Exploit chaos! Attributes of Those Who “Made” the 10th Grade History Book –Made lots of people mad! –Flouted the chain of command! –Creative / Quirky / Peculiar! / Rebels! / Irreverent! –Masters of improv / Thrive on chaos / Exploit chaos! Attributes of Those Who “Made” the 10th Grade History Book –Forgiveness > Permission –Bone honest! –Flawed as the dickens! – “In touch” with their followers’ aspirations –Damn good at what they do! VIII. NEW BUSINESS: (NEW) BRAND INSIDE RULES 2003 … Message BI > BO Brand Inside Rules! “I came to see in my time at IBM that culture isn’t just one aspect of the game—it is the game” —Lou Gerstner, Who Says Elephants Can’t Dance? Brand Inside Rules! “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 hard.” —Lou Gerstner, Who Says Elephants Can’t Dance? 15. THINK WEIRD … the HVA/ High Value Added Bedrock. 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 The High Standard Deviation Enterprise. THINK WEIRD: 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 “The future has already happened. It’s just not evenly distributed.” Adrian Slywotzky “If you worship at the throne of the voice of the customer, you’ll get only incremental advances.” Joseph Morone, President, Bentley College 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 “To grow, companies need to break out of a vicious cycle of competitive benchmarking, imitation and pursuit.” —W. Chan Kim & Renee Mauborgne, “”Think for Yourself —Stop Copying a Rival,” Financial Times/08.11.03 “The short road to ruin is to emulate the methods of your adversary.” — Winston Churchill “This is an essay about what it takes to create and sell something remarkable. It is a plea for originality, passion, guts and daring. You can’t be remarkable by following someone else who’s remarkable. One way to figure out a theory is to look at what’s working in the real world and determine what the successes have in common. But what could the Four Seasons and Motel 6 possibly have in common? Or Neiman-Marcus and Wal*Mart? Or Nokia (bringing out new hardware every 30 days or so) and Nintendo (marketing the same Gameboy 14 years in a row)? It’s like trying to drive looking in the rearview mirror. The thing that all these companies have in common is that they have nothing in common. They are outliers. They’re on the fringes. Superfast or superslow. Very exclusive or very cheap. Extremely big or extremely small. The reason its so hard to follow the leader is this: The leader is the leader precisely because he did something remarkable. And that remarkable thing is now taken—so it’s no longer remarkable when you decide to do it.” —Seth Godin, Fast Company/02.2003 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 Boards: “Extremely contentious boards that regard dissent as an obligation and that treat no subject as undiscussable” —Jeffrey Sonnenfeld, Yale School of Management “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, “Strategy or Revolution/ Harvard Business Review We become who we hang out with! 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 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! Big Idea/s V.C. GM Portfolio Roster Innovation Index: How many of your Top 5 Strategic Initiatives score 7 or higher (out of 10) on a “Weirdness/Profundity Scale”? IX. NEW BUSINESS. NEW LEADERSHIP. 20. The Passion Imperative: The Leadership 50 The Basic Premise. 1. Leadership Is a … Mutual Discovery Process. “Ninety percent of what we call ‘management’ consists of making it difficult for people to get things done.” – P.D. “I don’t know.” Quests! 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.” The Leadership Types. 2. Great Leaders on Snorting Steeds Are Important – but Great Talent Developers (Type I Leadership) are the Bedrock of Organizations that Perform Over the Long Haul. Whoops: Jack didn’t have a vision! 3. But Then Again, There Are Times When This “Cult of Personality” (Type II Leadership) Stuff Actually Works! “A leader is a dealer in hope.” Napoleon (+TP’s writing room pics) 4. Find the “Businesspeople”! (Type III Leadership) I.P.M. (Inspired Profit Mechanic) 5. All Organizations Need the Golden Leadership Triangle. The Golden Leadership Triangle: (1) CreatorVisionary … (2) Talent Fanatic-Mentor-V.C. … (3) Inspired Profit Mechanic. The Essential Tension — Keeper of the Flame of Creation (Brahma = Creator) — Keeper of the Flame of Preservation (Vishnu = Preserver) — Keeper of the Flame of Destruction (Shiva = Destroyer) 6. Leadership Mantra #1: IT ALL DEPENDS! Renaissance Men are … a snare, a myth, a delusion! 7. The Leader Is Rarely/Never the Best Performer. The Leadership Dance. 8. Leaders … SHOW UP! “A body can pretend to care, but they can’t pretend to be there.” — Texas Bix Bender 9. Leaders … LOVE the MESS! “If things seem under control, you’re just not going fast enough.” Mario Andretti “I’m not comfortable unless I’m uncomfortable.” —Jay Chiat 10. Leaders 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!Fire!) “We have a ‘strategic’ plan. It’s called doing things.” — Herb Kelleher 11. Leaders Re -do. “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 “If it works, it’s obsolete.” —Marshall McLuhan 12. BUT … Leaders Know When to Wait. Tex Schramm: The “too hard” box! 13. Leaders Are … Optimists. Hackneyed but none the less LEADERS SEE CUPS AS “HALF FULL.” true: “[Ronald Reagan] radiated an almost transcendent happiness.” Half-full Cups: Lou Cannon, George (08.2000) 14. Leaders … DELIVER! “Leaders don’t ‘want to’ win. Leaders ‘need to’ win.” #49 “It is no use saying ‘We are doing our best.’You have got to succeed in doing what is necessary.” —WSC 15. BUT … Leaders Are Realists/Leaders Win Through LOGISTICS! The “Gus Imperative”! 16. Leaders FOCUS! “To Don’t ” List It’s T-H-R-E-E, Stupid! “I used to have a rule for myself that at any point in time I wanted to have in mind — as it so happens, also in writing, on a little card I carried around with me — the three big things I was trying to get done. Three. Not two. Not four. Not five. Not ten. Three.” — Richard Haass, The Power to Persuade 17. Leaders … Set CLEAR DESIGN SPECS. Danger: S.I.O. (Strategic Initiative Overload) 1@T: (1) Neutron JackWorld/ Jack. (Banish bureaucracy.) (2) “1, 2 or out” Jack. (Lead or leave.) (3) “Workout” Jack. (Empowerment, GE style.) (4) 6-Sigma Jack. (5) Internet Jack. (Throughout) TALENT JACK! 18. Leaders … Send V-E-R-Y Clear Signals About Design Specs! Ridin’ with Roger: “What have you done to DRAMATICALLY IMPROVE quality in the last 90 days?” If It Ain’t Broke … Break It. 19. Leaders … FORGET!/ Leaders … DESTROY! 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 Cortez! 20. BUT … Leaders Have to Deliver, So They Worry About “Throwing the Baby Out with the Bathwater.” “Damned If You Do, Damned If You Don’t, Just Plain Damned.” Subtitle in the chapter, “Own Up to the Great Paradox: Success Is the Product of Deep Grooves/ Deep Grooves Destroy Adaptivity,” Liberation Management (1992) 21. Leaders … HONOR THE USURPERS. Saviors-in-Waiting Disgruntled Customers Upstart Competitors Rogue Employees Fringe Suppliers Wayne Burkan, Wide Angle Vision 22. Leaders Make [Lotsa] Mistakes – and MAKE NO BONES ABOUT IT! “Fail faster. Succeed sooner.” David Kelley/IDEO “No matter. Try again. Fail again. Fail better.” —Samuel Beckett “The Silicon Valley of today is built less atop the spires of earlier triumphs than upon the rubble of earlier debacles.”—Newsweek/ Paul Saffo (03.02) 23. Leaders Make … BIG MISTAKES! “Reward excellent failures. Punish mediocre successes.” Phil Daniels, Sydney exec (and, de facto, Jack) Silicon Valley Success [Failure?] Secrets “Pursuit of risk”: 4 of 20 in V.C. portfolio go bust; 6 lose money; 6 do okay; 3 do well; 1 hits the jackpot Source: The Economist Okay? 1 in 20 (4 in 20) Create. 24. Leaders Know that THERE’S MORE TO LIFE THAN “LINE EXTENSIONS.” Leaders Love to CREATE NEW MARKETS. No one ever made it into the Business Hall of Fame on a record of “line extensions.” “Acquisitions are about buying market share. Our challenge is to create markets. There is a big difference.” Peter Job, CEO, Reuters 25. Leaders … Make Their Mark / Leaders … Do Stuff That Matters “I never, ever thought of myself I was interested in creating things I would be proud of.” —Richard Branson as a businessman. “In 1933, Thomas J. Watson Sr. gave a speech at the World’s Fair, ‘World Peace through World Trade.’ We stood for something, right?” —Sam Palmisano Legacy! CEO Assignment2002 (Bermuda): “Please leap forward to 2007, 2012, or 2022, and write a business history of What will have been said about your company during your tenure?” Bermuda. Ah, kids: “What is your vision for the future?” “What have you accomplished since your first book?” “Close your eyes and imagine me immediately doing something about what you’ve just said. What would it be?” “Do you feel you have an obligation to ‘Make the world a better place’?” 26. Leaders Push Their W-a-y Up the Value-added/ Intellectual Capital Chain Organizations 09.11.2000: HP bids $18,000,000,000 for PricewaterhouseCoopers Consulting business! 27. Leaders LOVE the New Technology! square feet 28. Needed? Type IV Leadership: Technology Dreamer-True Believer The Golden Leadership Quadrangle: (1) CreatorVisionary … (2) Talent Fanatic-Mentor-V.C. … (3) Inspired Profit Mechanic. (4) Technology Dreamer-True Believer Talent. 29. When It Comes to TALENT … Leaders Always Swing for the Fences! Talent’s Rules 1. Talent = 25/8/53 2. Some people are better than other people. Some people are a helluva lot better than other people 3. Think “Roster” 4. Think “V.C.” 5. Talent = Brand 6. Talent is what leaders do. 30. Leaders Don’t Create “Followers”: THEY CREATE LEADERS! “I start with the premise that the function of leadership is to produce more leaders, not more followers.”—Ralph Nader 31. Leaders “Win Followers Over” WHAT AN IDIOT: “Instead of employees being in the driver’s seat, now we’re in the driver’s seat.” “Coaching is winning players over.” PJ: “I didn’t have a ‘mission statement’ at Burger King. I had a dream. Very simple. It was something like, ‘Burger King is 250,000 people, every one of whom gives a shit.’ Every one. Accounting. Systems. Not just the drive through. Everyone is ‘in the brand.’ That’s what we’re talking about, nothing less.” — Barry Gibbons “The Cold War armies were not great armies, because all the decisions were made by generals and politicians. In great armies, the job of generals is to back up their sergeants.” —COL Tom Wilhelm, from Robert Kaplan, “The Man Who Would Be Khan,” The Atlantic, 03.2004 Passion. 32. Leaders … Out Their PASSION! “Create a ‘cause,’ not a ‘business.’ ” G.H.: “Vision is a love affair with an idea.” —Boyd Clarke & Ron Crossland, The Leader’s Voice “Coca-Cola was Roberto Goizueta’s painting. It was never finished, and he was never totally satisfied with it. But he had the Sistine Chapel in his head, and he was always working on it.” — Warren Buffett 33. Leaders Know: ENTHUSIASM BEGETS ENTHUSIASM! BZ: “I am a … Dispenser of Enthusiasm!” “Until there is commitment there is hesitancy, the chance to draw back. Concerning all acts of initiative and creation, there is one elementary truth, the ignorance of which kills countless ideas and splendid plans: that the moment one definitely commits oneself, then providence moves too. All sorts of things occur to help one that would never otherwise have occurred. Whatever you can do or dream you can, begin it. Boldness has genius, power and magic in it. Begin it now!” —Johann Wolfgang von Goethe “You can’t behave in a calm, rational manner. You’ve got to be out there on the lunatic fringe.” — Jack Welch, on GE’s quality program “I’m looking for insane commitment.” —Twyla Tharp, The Creative Habit “… a powerful and madly exuberant work” —LA Times on Frank Gehry’s Walt Disney Concert Hall (10.03) 34. Leaders Are … in a Hurry The Urgency Factor: LEADERS … have a distorted sense of time. 35. Leaders Focus on the SOFT STUFF! “Soft” Is “Hard” - ISOE Message: Leadership is all about love! [Passion, Enthusiasms, Appetite for Life, Engagement, Commitment, Great Causes & Determination to Make a Damn Difference, Shared Adventures, Bizarre Failures, Growth, Insatiable Appetite for Change.] [Otherwise, why bother? Just read Dilbert. TP’s final words: CYNICISM SUCKS.] The “Job” of Leading. 36. Leaders Know It’s ALL SALES ALL THE TIME. “Everybody lives by selling something.” — Robert Louis Stevenson If you don’t LOVE SALES … find another life. (Don’t pretend TP: you’re a “leader.”) (See TP’s The Project50.) 37. Leaders LOVE “POLITICS.” If you don’t LOVE POLITICS … find another life. (Don’t pretend TP: you’re a “leader.”) 38. But … Leaders Also Break a Lot of China If you’re not pissing people off, you’re not making a difference! 39. Leaders Give … RESPECT! “It was much later that I realized Dad’s secret. He gained respect by giving it. He talked and listened to the fourth-grade kids in Spring Valley who shined shoes the same way he talked and listened to a bishop or a college president. He was seriously interested in who you were and what you had to say.” Sara Lawrence-Lightfoot, Respect Amen! “What creates trust, in the end, is the leader’s manifest respect for the followers.” — Jim O’Toole, Leading Change 40. Leaders Say “Thank You.” “The two most powerful things a kind word and a thoughtful gesture.” in existence: Ken Langone, CEO, Invemed Associates [from Ronna Lichtenberg, It’s Not Business, It’s Personal] 41. Leaders Are … Curious. The Three Most Important Letters … TP/08.2001: 42. Leadership Is a … Performance. “It is necessary for the President to be the No. 1 actor.” nation’s FDR “You can’t lead a cavalry charge if you think you look funny on a horse.” —John Peers, President, Logical Machine Corporation Seven Seconds to Make an Impression — Amp up your attitude [It’s energy, stupid!] — Recognize “face value” [no “poker face”] — Give your message a mission [don’t forget your agenda] Source: Roger Ailes, CEO, Fox News, Fast Company 43. Leaders … Are The Brand The BRAND lives (OR DIES) in the “minutiae” of the leader’s momentto-moment actions. “You must be the change you wish to see in the world.” Gandhi 44. Leaders … GREAT STORY! Have a “A key – perhaps the key – to leadership is the effective communication of a story.” Howard Gardner Leading Minds: An Anatomy of Leadership Leaders don’t just make products and make decisions. Leaders make meaning. – John Seely Brown Introspection. 45. Leaders … Enjoy Leading. “Warren, I know you want to ‘be’ president. But do you want to ‘do’ president?” 46. Leaders … KNOW THEMSELVES. Individuals (would-be leaders) cannot engage in a liberating mutual discovery process unless they are comfortable with their own skin. (“Leaders” who are not comfortable with themselves become petty control freaks.) 47. But … Leaders have MENTORS. Upon having the Leadership Mantle placed upon thine head, thou shalt never hear the unvarnished truth again!* The Gospel According to TP: (*Therefore, thy needs one faithful compatriot to lay it on with no jelly.) 48. Leaders … Take Breaks. Zombie! Zombie! Zombie! Zombie! The End Game. 49. Leaders ???: “Leadership is the PROCESS of ENGAGING PEOPLE in CREATING a LEGACY of EXCELLENCE.” “ ‘It’s only business, not personal’ … IT ALWAYS IS PERSONAL.” “LEADERS NEED TO BE THE ROCK OF GIBRALTAR ON ROLLER BLADES” 50. Leaders Know WHEN TO LEAVE! Bonus … “Sir Richard’s Rules: “Follow your passions. “Keep it simple. “Get the best people to help you. Re-create yourself. “Play.” Source: Fortune/10.03 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 “the wildest chimera of a moonstruck mind” —The Federalist on Jefferson’s Louisiana Purchase “It’s no longer enough to be a ‘change agent.’ You must be a change insurgent— provoking, prodding, warning everyone in sight that complacency is death.” —Bob Reich Thank You