Tom Peters’ How New Business Works: Rules for Re-invention 01.07.2003 “If you don’t like change, you’re going to like irrelevance even less.” —General Eric Shinseki, Chief of Staff, U.
Download ReportTranscript Tom Peters’ How New Business Works: Rules for Re-invention 01.07.2003 “If you don’t like change, you’re going to like irrelevance even less.” —General Eric Shinseki, Chief of Staff, U.
Tom Peters’ How New Business Works: Rules for Re-invention 01.07.2003 “If you don’t like change, you’re going to like irrelevance even less.” —General Eric Shinseki, Chief of Staff, U. S. Army 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 home-pregnancy tests.” “You can’t look at humanity separate from machines; we’re so intertwined we’re almost the same species, and the difference is getting smaller.” “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 “IT MAY SOMEDAY BE SAID THAT THE 21ST CENTURY BEGAN ON SEPTEMBER 11, 2001. … “Al-Qaeda represents a new and profoundly dangerous kind of organization—one that might be called a ‘virtual state.’ On September 11 a virtual state proved that modern societies are vulnerable as never before.”—Time/09.09.2002 “The deadliest strength of America’s new adversaries is their very fluidity, Defense Secretary Donald Rumsfeld believes. Terrorist networks, unburdened by fixed borders, headquarters or conventional forces, are free to study the way this nation responds to threats and adapt themselves to prepare for what Mr. Rumsfeld is certain will be another attack. … “ ‘Business as usual won’t do it,’ he said. His answer is to develop swifter, more lethal ways to fight. ‘Big institutions aren’t swift on their feet in adapting but rather ponderous and clumsy and slow.’ ”—The New York Times/09.04.2002 From: To: Weapon v. Weapon Org structure v. Org structure “Our military structure today is essentially one developed and designed by Napoleon.” Admiral Bill Owens, former Vice Chairman, Joint Chiefs of Staff “The organizations we created have become tyrants. They have taken control, holding us fettered, creating barriers that hinder rather than help our businesses. The lines that we drew on our neat organizational diagrams have turned into walls that no one can scale or penetrate or even peer over.” —Frank Lekanne Deprez & René Tissen, Zero Space: Moving Beyond Organizational Limits. “In an era when terrorists use satellite US gatekeepers stand armed against them with pencils and paperwork, and archaic computer systems that don’t talk to each other.” phones and encrypted email, Boston Globe (09.30.2001) “Dawn Meyerreicks, CTO of the Defense Intelligence 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 “If early soldiers idealized Napoleon or Patton, network-centric warriors admire Wal*Mart, where point-of-salescanners share information on a near realtime basis with suppliers and also produce data that is mined to help leaders develop new strategic or tactical plans. Wal*Mart is an example of translating information into competitive advantage.”—Tom Stewart, Business 2.0 The New Infantry Battalion/ New York Times/12.01.2002 “Pentagon’s Urgent Search for Speed.” 270 soldiers (1/3rd normal complement); 140 robotic off-road armored trucks. “Every soldier is a sensor.” “Revolutionary capabilities.” Find-to-hit: 45 minutes to 15 minutes … in just one year. Eric’s Army Flat. Fast. Agile. Adaptable. Light … But Lethal. Brand You/ Talent/ “I Am An ARMY Of One.” Info-intense. Network-centric. The New Infantry Battalion/ New York Times/12.01.2002 “Pentagon’s Urgent Search for Speed.” 270 soldiers (1/3rd normal complement); 140 robotic off-road armored trucks. “Every soldier is a sensor.” “Revolutionary capabilities.” Find-to-hit: 45 minutes to 15 minutes … in just one year. Uncertainty: We don’t know when things will get back to normal. We no longer know what “normal” means. Ambiguity: I Believe … 1. Change will accelerate. DRAMATICALLY. 2. We will RE-INVENT THE WORLD IN THE NEXT TWO GENERATIONS. (Business … Health Care … Politics … War … Education … Fundamentals of Human Interaction.) 3. OPPORTUNITIES are matchless. 4. You are either … ON THE BUS … or … OFF THE BUS. 5. I WANT TO PLAY! AND YOU? I. NEW BUSINESS. NEW CONTEXT. 1.All Bets Are Off. <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 Vernor Vinge/Mr. Singularity “The transition time from human history to post-human singularity time, Vinge thinks, will be astonishingly short—maybe one hundred hours from the first moment of computer selfawareness to computer world conquest.”—Esquire/12.2002 “We are at a pivotal point in history. … We are at one of a half dozen turning points that have fundamentally changed the way societies are organized for governance.” —Philip Bobbitt, The Shield of Achilles: War, Peace and the Course of History “There’s going to be a fundamental change in the global economy unlike anything we have had since the cavemen began bartering.” Arnold Baker, Chief Economist, Sandia National Laboratories NOW THAT’S B-I-G! “The period 2000-2002 will bring the single greatest change in worldwide economic and business conditions since we came down from the trees.” David Schneider & Grady Means, MetaCapitalism “In 25 years, you’ll probably be able to get the sum total of all human knowledge on a personal device.” Greg Blonder, VC [was Chief Technical Adviser for Corporate Strategy @ AT&T] [Barron’s 11.13.2000] “I genuinely believe we are living through the greatest intellectual moment in history.” Matt Ridley, Genome “Doctors are faced with the very real threat of irrelevance in ten years. You’ll go to a lab, have a blood sample drawn, and a readout of your genetic deficiencies will be produced—along with ‘Doctor’s Orders’ for appropriate treatment; only there won’t be any doctor.” —Leading Pediatric Cardiologist (11.2002) Yo, Bioinformatics! “Researchers say they have found a way to mate human cells with circuitry in a ‘bionic chip’ … The tiny device – smaller and thinner than a strand of hair – combines a healthy human cell with an electronic circuitry chip.” AP/AOL/02-00 “Help! There’s nobody in the cockpit. In the future, will the airlines no longer need pilots?” Grumman Global Hawk/ 24 hours/ Edwards to South Australia Source: The Economist/12.21.2002 “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 2. The Destruction Imperative. “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 “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 “Conglomerates don’t work” —James Surowiecki, The New Yorker (07.01,2002) “I believe large research organizations are less transparent, with less communication and more bureaucracy and it is more difficult and problematic to produce innovations in large institutions.”— Franz Humer, CEO, Roche Way to Go, Guys … 2002 write downs from recent acquisitions … $1,000, 000,000, 000* *$1 trillion (Source: Harper’s Index 04.2002) “Acquisitions are about buying market share. Our challenge is to create markets. There is a big difference.” Peter Job, CEO, Reuters “Active mutators in placid times tend to die off. They are selected against. Reluctant mutators in quickly changing times are also selected against.” Carl Sagan & Ann Druyan, Shadows of Forgotten Ancestors Lessons from the Bees! “Since merger mania is now the rage, what lessons can the bees teach us? A simple one: Merging is not in nature. [Nature’s] process is the exact opposite: one of growth, fragmentation and dispersal. There is no megalomania, no merging for merging’s sake. The point is that unlike corporations, which just get bigger, bee colonies know when the time has come to split up into smaller colonies which can grow value faster. What the bees are telling us is that the corporate world has got it all wrong.” David Lascelles, Co-director of The Centre for the Study of Financial Innovation [UK] TP on Acquisitions 1. Big + Big = Disaster. (Statistically.) (There are exceptions; e.g., Citigroup.) 2. Big (GE, Cisco, Omnicon) 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. CEOs appointed after 1985 are 3X more likely to be fired than CEOs appointed before 1985 Warren Bennis, MIT Sloan Management Review The [New] Ge Way DYB.com “Change the rules before somebody else does.” —Ralph Seferian, VP, Oracle “Most of our predictions are based on very linear thinking. That’s why they will most likely be wrong.” Vinod Khosla, in “GIGATRENDS,” Wired 04.01 The Gales of Creative Destruction +29M = -44M + 73M +4M = +4M - 0M “The secret of fast progress is inefficiency, fast and furious and numerous failures.” Kevin Kelly RM: “A lot of companies in the Valley fail.” RN: “Maybe not enough fail.” RM: “What do you mean by that?” RN: “Whenever you fail, it means you’re trying new things.” Source: Fast Company “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) 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 Axiom (Hypothesis): We have been screwed by Benchmarking … Best Practice … C.I./Kaizen. Axiom (Hypothesis): We need Masters of Discontinuity/ Masters of Ambiguity … in discontinuous/ambiguous times. “In the modern military, risk is anathema to rising stars, who cannot afford any slip-ups on their records. ‘Zero defects’ and ‘zero tolerance’ are common bywords.”—Newsweek/09.16.02 “Organize” for … performance & customer satisfaction. “Disorganize” for … renewal & innovation. “Rumsfeld values mavericks and tries to protect and promote them.” — Newsweek/ 09.16.02 “Rose gardeners face a choice every spring: how to prune our roses. The long-term fate of a rose garden depends on this decision. If you want to have the largest and most glorious roses of the neighborhood, you will prune hard. You will reduce each rose plant to a maximum of three stems. This represents a policy of low tolerance and tight control. You force the plant to make the maximum use of its available resources, by putting them into the the rose’s ‘core business.’ However, if this is an unlucky year [late frost, deer, green-fly invasion], you may lose the main stems or the whole plant! Pruning hard is a dangerous policy in an unpredictable environment. Thus, if you are in a spot where you know nature may play tricks on you, you may opt for a policy of high tolerance. You will leave more stems on the plant. You will never have the biggest roses, but you have a much-enhanced chance of having roses every year. You will achieve a gradual renewal of the plant. In short, tolerant pruning achieves two ends: (1) It makes it easier to cope with unexpected environmental changes. (2) It leads to a continuous restructuring of the plant. The policy of tolerance admittedly wastes resources—the extra buds drain away nutrients from the main stem. But in an unpredictable environment, this policy of tolerance makes the rose healthier. Tolerance of internal weakness, ironically, allows the rose to be stronger in the long run.”—Arie De Geus, The Living Company Japan’s Science Gap * Rice farming culture: uniqueness suppressed. Gov’t control of R & D. Promotion based on seniority. Consensus vs. debate. (U.S.: friends can be mortal enemies.) Bias for C.I. vs. “bold leaps.” Lack of competition and critical evaluation (peer review). Syukuro Manabe: “What we need to create is job insecurity rather than security to make people compete more.” *Hideki Shirakawa, Nobel laureate, chemistry December 2000: Swiss House for Advanced Research & Education. Cambridge, Massachusetts. Xavier Comtesse: “You never hear a Swiss say, ‘I want to change the world.’ We need to take more risks.” “The Word(s)” on Vitality: Gary Hamel “Sell By” [jettison old crap] Spin Out [support entrepreneurs] Spin In [buy young firms] 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 (New York, 5-99) Jim & Tom. Joined at the hip. Not. Huh? “Quiet, workmanlike, stoic leaders bring about the big transformations.”--JC Pastels? T. Paine/P. Henry/A. Hamilton/T. Jefferson/B. Franklin A. Lincoln/U. S. Grant/W. T. Sherman TR/FDR/LBJ/RR/JFK M.L. King C. de Gaulle M. Gandhi W. Churchill M. Thatcher Picasso Mozart Copernicus/Newton/Einstein J. Welch/L. Gerstner/L. Ellison/B. Gates/S.Ballmer/S. Jobs/S. McNealy A. Carnegie/J. P. Morgan/H. Ford/J.D. Rockefeller/T. A. Edison “But what if [former head of strategic planning at Royal Dutch Shell] Arie De Geus is wrong in suggesting, in The Living Company, that firms should aspire to live forever? Greatness is fleeting and, for corporations, it will become ever more fleeting. The ultimate aim of a business organization, an artist, an athlete or a stockbroker may be to explode in a dramatic frenzy of value creation during a short space of time, rather than to live forever.” Kjell Nordström and Jonas Ridderstråle, Funky Business 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 (03-00) “The Futility of Size … “Virtualization is the recognition that territorial size does not solve economic problems. … Economic access must become the substitute for increasing domain.” Richard Rosecrance, The Rise of the Virtual State “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” Warren Bennis & Patricia Ward Biederman/ Great Groups Don’t Last Very Long! Organizing Genius: W.A. Mozart 1756 – 1791 HE CHANGED THE WORLD AND ENRICHED HUMANITY “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 (08.00) “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 Three Levels of Innovation Transformational Substantial Incremental Source: Dick Foster, Business 2.0 (05.01) Note: Each level requires totally different processes! Jane Jacobs: Exuberant Variety vs. the Great Blight of Dullness. F.A. Hayek: Spontaneous Discovery Process. Joseph Schumpeter: the Gales of Creative Destruction. Eglin Flag: “100% AGAINST ZERO DEFECTS” “General, if you’re not having accidents, your training program is not what it should be. … You need to kill some pilots.” BOYD: The Fighter Pilot Who Changed the Art of War (Robert Coram) OODA Loop/Boyd Cycle “Unraveling the competition”/ Quick Transients/ Quick Tempo (NOT JUST SPEED!)/ Agility/ “So quick it is disconcerting” (adversary over-reacts or under-reacts)/ “Winners used tactics that caused the enemy to unravel before the fight” (NEVER HEAD TO HEAD) BOYD: The Fighter Pilot Who Changed the Art of War (Robert Coram) “Fast Transients” “Buttonhook turn” (YF16: “could flick from one maneuver to another faster than any aircraft”) BOYD: The Fighter Pilot Who Changed the Art of War (Robert Coram) “Blitzkrieg is far more than lightning thrusts that most people think of when they hear the term; rather it was all about high operational tempo and the rapid exploitation of opportunity.”/ “Arrange the mind of the enemy—T.E. Lawrence/ “Float like a butterfly, sting like a bee”—Ali BOYD: The Fighter Pilot Who Changed the Art of War (Robert Coram) F86 vs. MiG/Korea/10:1 Bubble canopy (360 degree view) Full hydraulic controls (“The F86 driver could go from one maneuver to another faster than the MiG driver”) MiG: “faster in raw acceleration and turning ability”; F86: “quicker in changing maneuvers” BOYD: The Fighter Pilot Who Changed the Art of War (Robert Coram) USMC COL Mike Wyly: “kept the enemy off-balance; they knew Delta Company [RVN] could show up anywhere, anytime” BOYD: The Fighter Pilot Who Changed the Art of War (Robert Coram) “Maneuverists” BOYD: The Fighter Pilot Who Changed the Art of War (Robert Coram) “The stuff has got to be implicit. If it is explicit, you can’t do it fast enough.” BOYD: The Fighter Pilot Who Changed the Art of War (Robert Coram) II. NEW BUSINESS. NEW TECH. 3. The White Collar Revolution & the Death of Bureaucracy. 108 X 5 vs. 8X1 = 540 vs. 8 (-98.5%) “The coefficient of friction associated with the grunge of business is amazing!” Michael Schrage “A bureaucrat is an expensive microchip.” Dan Sullivan, consultant and executive coach IBM’s Project eLiza!* * “Self-bootstrapping”/ “Artilects” There Is No Such Thing as the Tooth Fairy. IBM Self-healing eServers* *Approximate TV ad copy (11.2002) “We own all the intellectual property, we farm out all the direct labor.” Jim McDonnell, VP, IBM [“Don’t own nothin’ if you can help it. If you can, rent your shoes.” F.G.] “The virtual corporation is research, development, design, marketing, financing, legal, and other headquarters functions wth few or no manufacturing capabilities – a company with a head but no body.” Richard Rosecrance, The Rise of the Virtual State 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! “Most physicians believe that diagnosis can’t be reduced to a set of generalizations—to a ‘cookbook.’ … How often does my intuition lead me astray? The radical implication of the Swedish study is that the individualized, intuitive approach that lies at the center of modern medicine is flawed—it causes more mistakes than it prevents.” —Atul Gawande, Complications “Doctors are faced with the very real threat of irrelevance in ten years. You’ll go to a lab, have a blood sample drawn, and a readout of your genetic deficiencies will be produced—along with ‘Doctor’s Orders’ for appropriate treatment; only there won’t be any doctor.” —Leading Pediatric Cardiologist (11.2002) Probable parole violations: Simple model (age, # of previous offenses, type of crime) beats M.D. shrinks. 100 studies: Statistical formulas > Human “In virtually all cases, statistical thinking equaled or surpassed human judgment.”—Atul Gawande, judgment. Complications “Unless mankind redesigns itself by changing our DNA through altering our genetic makeup, computergenerated robots will take over the world.” – Stephen Hawking, in the German magazine Focus Vernor Vinge/Mr. Singularity “The transition time from human history to post-human singularity time, Vinge thinks, will be astonishingly short—maybe one hundred hours from the first moment of computer selfawareness to computer world conquest.”—Esquire/12.2002 N.W.O./Holy Moly: Unemployment up 2% … real wage growth highest since 60s … productivity soaring. Source: BW/02.11.2002 E.g. … Jeff Immelt: 75% of “admin, back room, finance” “digitalized” in years. Source: BW (01.28.02) 4. IS/ IT/ Web … “On the Bus” or “Off the Bus.” 2.5G, 3G, 4G Windows Symbian Java Bluetooth Wi-Fi PCs-PDAs-Cell“phones” E-business vs. M-business Etc. Outsider’s view: (1) Billions are being spent, even in a down market. (2) NOBODY HAS A CLUE AS TO WHO THE WINNERS—AND LOSERS— WILL BE. (3) Yet you must play. Now. Hard. Fast. square feet Dell’s OptiPlex Facility Big Job: 6 to 8 hours. (80,000 per day) Parts Inventory: square feet. The Real “News”: X1,000,000 TowTruckNet.com Impact No. 1/ Logistics & Wal*Mart … Dell … Amazon.com … Autobytel.com … FedEx … UPS … Ryder … Cisco … Etc. … Etc. … Ad Infinitum. Distribution: $400. Wal*Mart: 13%. Autobytel: Source: BW(05.13.2002) “If early soldiers idealized Napoleon or Patton, network-centric warriors admire Wal*Mart, where point-of-scalescanners share information on a near realtime basis with suppliers and also produce data that is mined to help leaders develop new strategic or tactical plans. Wal*Mart is an example of translating information into competitive advantage.”—Tom Stewart, Business 2.0 ?: Americans on the Web/03.2002 50,000,000 75,000,000 100,000,000 125,000,000 150,000,000 175,000,000 157,000,000* * +2M/mo. Source: Newsweek (03.25.2002) WebWorld = Everything Web as a way to run your business’s innards Web as connector for your entire supply-demand chain Web as “spider’s web” which re-conceives the industry Web/B2B as ultimate wake-up call to “commodity producers” Web as the scourge of slack, inefficiency, sloth, bureaucracy, poor customer data Web as an Encompassing Way of Life Web = Everything (P.D. to after-sales) Web forces you to focus on what you do best Web as entrée, at any size, to World’s Best at Everything as next door neighbor Jargon Bath! Bureaucracy free … Systemically integrated … Internet intense … Knowledge based … Time and location free … “Instantly” responsive … Customer centric … Mass customization enabled. Translation … Bureaucracy free = Flat org, no B.S. Systemically integrated = Whole supply chain tightly wired/ friction-free Internet intense = Do it all via the Web Knowledge based = Open access Time and location free = Whenever, wherever “Instantly” responsive = Speed demons Customer centric = Customer calls the shots Mass customization enabled = Every product and service rapidly tailored to client requirements Message: eCommerce is not a technology play! It is a relationship, partnership, organizational and communications play, made possible by new technologies. Message: There is no such thing as an effective B2B or Internet-supply chain strategy in a low-trust, bottleneckedcommunication, six-layer organization. “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 Read It Closely: “We don’t sell We sell speed.” insurance anymore. Peter Lewis, Progressive The New Infantry Battalion/ New York Times/12.01.2002 “Pentagon’s Urgent Search for Speed.” 270 soldiers (1/3rd normal complement); 140 robotic off-road armored trucks. “Every soldier is a sensor.” “Revolutionary capabilities.” Find-to-hit: 45 minutes to 15 minutes … in just one year. “There’s no use trying,” said Alice. “One can’t believe impossible things.” “I daresay you haven’t had much practice,” said the Queen. “When I was your age, I always did it for half an hour a day. Why, sometimes I’ve believed as many as six impossible things before breakfast.” Lewis Carroll I’net … allows you to dream dreams you could never have dreamed before! … “Don’t rebuild. Reimagine.” The New York Times Magazine on the future of the WTC space in Lower Manhattan/09.08.2002 HUMANA’s Dreams. Emphesys: “Put everything on the Internet.” CEO Mike McCallister, charge to 200-person “outside” I’net unit: “Imagine an ideal Web-based health insurance system and then create a product as close as possible to that vision.” Start with own employees: SmartSuite. Member employees: “Plan their own coverage and shoulder more costs.” Dell is model: “Fully customized health for every individual.” Marketing pitch for employers: “Buy choice for employees through a single source—Humana.” Source: Fortune/05.27.2002 “Suppose—just suppose—that the Web is a new world we’re just beginning to inhabit. We’re like the earlier European settlers in the United States, living on the edge of the forest. We don’t know what’s there and we don’t know exactly what we need to do to find out: Do we pack mountain climbing gear, desert wear, canoes, or all three? Of course while the settlers may not have known what the geography of the New World was going to be, they at least knew that there was a geography. The Web, on the other hand, has no geography, no landscape. It has no distance. It has nothing natural in it. It has few rules of behavior and fewer lines of authority. Common sense doesn’t hold here, and uncommon sense hasn’t yet emerged.” David Weinberger, Small Pieces Loosely Joined [ Words to Live By … “Hierarchy is an organization with its face toward the CEO and its ass toward the customer.” Kjell Nordström and Jonas Ridderstråle, Funky Business] “Hyperlinks subvert hierarchy!” The Cluetrain Manifesto Case: CRM Anne Busquet/ American Express Not: “Age of the Internet” “Age of Customer Control” Is: Amen! “The Age of the Never Satisfied Customer” Regis McKenna “The Web enables total transparency. People with access to relevant information are beginning to challenge any type of authority. The stupid, loyal and humble customer, employee, patient or citizen is dead.” Kjell Nordström and Jonas Ridderstråle, Funky Business “Parents, doctors, stockbrokers, even military leaders are starting to lose the authority they once had. There are all these roles premised on access to privileged information. … What we are witnessing is a collapse of that advantage, prestige and authority.” Michael Lewis, next “A seismic shift is underway in healthcare. The Internet is delivering vast knowledge and new choices to consumers—raising their expectations and, in many cases, handing them the controls. [Healthcare] consumers are driving radical, fundamental change.” Deloitte Research, “Winning the Loyalty of the eHealth Consumer” Welcome to D.I.Y. Nation: “Changes in business processes will emphasize self service. Your costs as a business go down and perceived service goes up because customers are conducting it themselves.” Ray Lane, Oracle Psych 101: Strongest Force on Earth? My need to be in perceived control of my universe! UBIQUITY! “It’s the cars, not the tires, that squeal”: NYT/Circuits/10.25.01): E-ZPass (6M in NE), tests with McD’s, gas stations and parking lots next. OnStar (GM/1.5M). Plus: “black boxes,” GPS (the case of the $450 ticket), CA smog offenders. “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! Rebuttal: (1) Service sucked in the “pre-electronic” age. (2) NewGen believes in the screen! (So do I.) One Person’s Opinion TP to reporter: “Service is MUCH better! Would you go back to bank tellers and phone operators? Value that I place on a “smile”: 3 on a scale of 10. Value I place on fast & accurate “digital” response: 11 on a scale of 10!! -5% defections = +25% to +85% profit. Lose 15% to 35% p.a. 69% defect as a result of lousy sales or service experience. (Q:But is this the point???? A: Yes. No.) M. Rogers: CGE&Y (Paul Cole): “Pleasant “Systemic Opportunity.” “Better job of what we do today” vs. “Rethink overall enterprise strategy.” Transaction” vs. Message CRM: Madness = 600 CRM vendors. ???: “Do it all” or “do something.” Past: over-invest in lowvalue customers. Idea: better experience, not off-load work to customer. Relationship = f(dialogue & knowledge & duration). Key: new attitudes, DESTRUCTION of functional barriers to info & action. Wells Fargo ($285B): Master of B&C 3M $900M since ’99. . 1/3rd of chk acct customers on line. 5,400 branches: 4 of 5 who do product research on line purchase at branch. Wire transfer, save 30%; 17% less calls. Material diff to bottom line. Source: BW Online (03.20.02) 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 offline; more likely to cross-purchase; “happier and stay with the bank much longer.” B of A: 4M of 15M (“… way beyond the early adopters”). Source: The Wall Street Journal/10.21.2002 The Cluetrain Manifesto “Hyperlinks subvert hierarchy!” The Cluetrain Manifesto Corporate Resistance to “It” “It all goes back to fear of losing control!” The Cluetrain Manifesto “E-business is the final nail in the coffin for bureaucracy at GE.” Jack Welch/ GE Annual Report 2000 [ Words to Live By … “Hierarchy is an organization with its face toward the CEO and its ass toward the customer.” Kjell Nordström and Jonas Ridderstråle, Funky Business] Richard Rosecrance, The Rise of the Virtual State: Wealth and Power in the Coming Century Hong Kong: Prototypical “Virtual State” 83% Service 8% Mfg. Source: Richard Rosecrance, The Rise of the Virtual State “The new dependence on productive assets located within someone else’s state represents an unprecedented trust in the integrity and peacefulness of strangers.” “In its pure form – an ideal model toward which many states are tending – the virtual state carries within it the possibility of an entirely new system of world politics.” Richard Rosecrance, The Rise of the Virtual State “Imagine a world where a citizen could search the globe to assemble “my government,” the ultimate in customized, customer-centric services. Health care from the Netherlands, business incorporation in Malaysia …” Don Tapscott “The virtual corporation is research, development, design, marketing, financing, legal, and other headquarters functions with few or no manufacturing capabilities – a company with a head but no body.” Richard Rosecrance, The Rise of the Virtual State “We own all the intellectual property, we farm out all the direct labor.” Jim McDonnell, VP, IBM 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 “The Futility of Size … “[Regarding this issue] the new process of virtualization fully asserts itself. Virtualization is the recognition that territorial size does not solve economic problems. … Economic access must become the substitute for increasing domain.” Richard Rosecrance, The Rise of the Virtual State TP: Skill at creating, exploiting, and exiting crucial alliances beats ownership of fixed assets. “At the ultimate stage, competition among nations will be competition among educational systems, for the most productive and richest countries will be those with the best education and training.” Richard Rosecrance, The Rise of the Virtual State What’s the Common Denominator? The Dutch … the British … the Rothschilds … Cargill … Sumitomo … the KGB … the CIA … Mossad … Enron … Wal*Mart … McKinsey … FedEx … UPS … Mr. Speaker … Henry Kissinger … Executive secretaries … the Corner Grocer … Women-ingeneral? Masters of information acquisition, manipulation, dissemination, and utilization. Networkmeisters. Agile. Temporary. Virtual is thy name. Motto: Applied information is power/wealth. III. NEW BUSINESS. NEW VALUE PROPOSITION. 5. The “PSF Solution”: The Professional Service Firm Model. 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 NAPM: You are the … Rock Stars of the B2B Age! Message: You are Re-invention Evangelists! Chicago November 1999: HRMAC “support function” / “cost center” / “bureaucratic drag” or … Are you “Rock Stars of the Age of Talent” “P.S.F.”: Summary H.V.A. Projects (100%) Pioneer Clients WOW Work (see below) Hot “Talent” (see below) “Adventurous” “culture” Proprietary Point of View (Methodology) W.W.P.F. (100%)/Outside Clients (25%++) When: Now! BMW’s Designworks/USA: >50% from outside work Bill of (SELECTIVE) Rights YOU HAVE THE RIGHT TO CHOOSE YOUR CLIENTS! (Wanna be-stay-get COOL … Work With Cool Clients!) (YOU ARE YOUR CLIENT LIST.) (LIFE IS TOO SHORT TO WORK WITH JERKS.) (Mass marketers: TARGET INNOVATION. E.g.: African-Americans … Hispanics … the Aging Population … Greens … Women) Culture Change is not “Corporate.” Culture Change is not a “Program.” Culture Change does not take “Years.” Culture Change does not start “Today.” Culture Change starts Right Culture Change Now! Lives in the Moment! Culture Change is Entirely in Your Hands! What Do I “Do” First? One Minute Excellence!* *Thomas Watson C.I.O. to C.E.F.R.N.S.* *Chief Evangelist For Really Neat Stuff G.M. = The Recruitment and Development of Top Talent. [Period!] V.C. = Bets on “Talent.” Bets on Projects. [Period!] 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) The “PSF Problem” “Professionalism” = Arrogance = Pseudoscience. “Hear no evil, see no evil, don’t rat out your peers” … Docs, Teachers, Clergy (Law), Accts (Berardino) 6. The Heart of the Value Added Revolution: PSFs Unbound/ The “Solutions Imperative.” Base Case: The Sameness Trap “Companies have defined so much ‘best practice’ that they are now more or less identical.” Jesper Kunde, Unique now … or never “While everything may it is also increasingly the same.” be better, Paul Goldberger on retail, “The Sameness of Things,” The New York Times “We make over three new product announcements a day. Can you remember them? Our customers can’t!” Carly Fiorina “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 Funky Business: “To succeed we must stop being so goddamn normal. In a winner-takes-all world, normal = nothing.” “When we did it ‘right’ it was still pretty ordinary.” Barry Gibbons on “Nightmare No. 1” “Customers will try ‘low cost providers’ … because the Majors have not given them any clear reason not to.” Leading Insurance Industry Analyst SWA > American + Continental + Delta + Northwest + United + USAirways. Source: Boston Globe (12.22.2001) Getting Beyond Lip Service! “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 “The Internet is the most effective profitkiller on earth … it stimulates a TRUE FRE MARKET; and a real free market is the most dangerous of marketplaces for companies selling the SAME OLD STUFF. To those with COURAGE, free markets are great—they help kill off the deadwood competitors who don’t have the courage to change—making way for them to LEVERAGE their DRAMATIC DIFFERENCE into profitable growth.”—Doug Hall The Day! 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). “You are headed for commodity hell if you don’t have services.”—Lou Gerstner on IBM’s coming revolution (1997) Service-Systems Paradox: Cut & Grow Automate 75% of “commodity” service activities and/but Add value via people-intensive “strategic/systems-integration activities” (E.g.: Could Sun’s service/sysint business be 60% of revenues?) (Hiring from PWC, etc.) AT&T: President David Dorman: Back to long distance … but with “bundles of lucrative corporate services” for the likes of Merrill Lynch, MasterCard, Hyatt. Consumer: Dump 25M subscribers (50%)—hold on to high enders. Source: BW/05.20.2002 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 “We want to be the air traffic controllers of electrons.” Bob Nardelli, GE Power Systems “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 Was: “Big Iron” Transformer Dudes Division. Is: Air Traffic Controllers of Electrons. Was: Bunch of Guys Who Make Circuit Breakers Division. Is: GE Industrial Systems. E.g. … UTC/Otis + Carrier: boxes to “integrated building systems” Units of “Coolth” Leased AC: Nardelli’s goal ($50B to $100B by 2005): “… move Home Depot beyond selling ‘goods’ to selling ‘home services.’ … He wants to capture home improvement dollars wherever and however they are spent.” E.g.: “house calls” (At-Home Service: $10B by ’05?) … “pros shops” (Pro Set) … “home project management” (Project Management System … “a deeper selling relationship”). Source: USA Today/06.14.2002 “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) New Springs = Turnkey Flexible sourcing. Collections. Packaging. Merchandising. Promotion. Systems & Site mgt. “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 “Our mission is to go from being the world’s premier timeshare—which is a large idea in a small industry—to being what we call the market makers for global travel and leisure. We need to enable developers to be involved in more travel and leisure products, rather than just the timeshare side.”— Ken May, RCI (Source: Developments) “VISIONS OF A BRAND-NAME OFFICE EMPIRE. Sam Zell is not a man plagued by self doubt. Mr. Zell controls public companies that own nearly 700 office buildings in the United States. … Now Mr. Zell says he will transform the real estate market by turning those REITs into national brands. … Mr. Zell believes [clients] will start to view those offices as something more than a commodity chosen chiefly by price and location.” –New York Times (12.16.2001) “ ‘Architecture’ is becoming a commodity. Winners will be ‘Turnkey Facilities Management’ providers.” SMPS Exec “We are a ‘real estate facilities consulting’ organization, not just an ‘interior design’ firm.” Jean Bellas, founder, SPACE (from SMPS Marketer) Omnicom: 57% (of $6B) from marketing services Who was the number one employer of architecture school grads in the U.S. last year? Eat Or Be Eaten. Message: HP. Sun. IBM. GE/PS. GE/IS. (GE/AE. GE/MD.) UTC. Farmers. Delphi. UPS/ FedEx/ Ryder. Springs. Omnicom. IDEO. Accenture. Equity Office Properties. RCI. Etc. Etc. Words: Partners … Value Added … Intellectual-capital Added … Consultative-skills Added … Implementation Added … Model “PSF” … Outsourcing (??) … Acquisitions-led (Omnicom et al.) … “Experiences”- (“Solutions”-) (“Customer Success”-) driven. (1) 108X5 to 8X1/ eLiza/ 100sf. (2) Dept. to PSF/ WWPF. (3) V.A. via PSFs Unbound/ “Solutions”/ “Customer Success.” Core Logic: Model2002/3/4/5/?? Dell* + IBM** = Magic *Cut (ALL) the bullshit **Add (LOTSA) “soft”/“integrative”/“experiences” value The Seagate Exception. (Paradox? Possibility?) 7. The … Solutions25.* *NO MORE “SILOS.” NO MORE “STOVEPIPES.” (DAMN IT.) 1. It’s the (OUR!) organization, stupid! 2. Friction free! 3. No STOVEPIPES! 4. “Stovepiping” is a F.O.—Firing Offense. 5. ALL on the web! (ALL = ALL.) 6. Open access! 6. Project Managers rule! (E.g.: Control the purse strings and evals.) 7. VALUE-ADDED RULES! (Services Rule.) (Experiences Rule.) (Brand Rules.) 8. SOLUTIONS RULE! (We sell SOLUTIONS. Period. We sell PRODUCTIVITY & PROFITABILITY. Period.) 9. Solutions = “Our ‘culture.’ ” 10. Partner with B.I.C. (Best-In-Class). Period. “The organizations we created have become tyrants. They have taken control, holding us fettered, creating barriers that hinder rather than help our businesses. The lines that we drew on our neat organizational diagrams have turned into walls that no one can scale or penetrate or even peer over.” —Frank Lekanne Deprez & René Tissen, Zero Space: Moving Beyond Organizational Limits. “In an era when terrorists use satellite phones and encrypted email, US gatekeepers stand armed against them with pencils and paperwork, and archaic computer systems that don’t talk to each other.” Boston Globe (09.30.2001) “Once devised in Riyadh, the tasking order took hours to get to the Navy’s six aircraft carriers—because the Navy had failed years earlier to procure the proper communications gear that would have connected the Navy with its Air Force counterparts. … To compensate for the lack of communications capability, the Navy was forced to fly a daily cargo mission from the Persian Gulf and Red Sea to Riyadh in order to pick up a computer printout of the air mission tasking order, then fly back to the carriers, run photocopy machines at full tilt, and distribute the documents to the air wing squadrons that were planning the next strike.” –Bill Owens, Lifting the Fog of War “By combining powerful computer technology and other modern information-based systems we could make a revitalized, leaner military force that is designed to outsee, outmaneuver and outfight any foe.” —Bill Owens, Lifting the Fog of War “P&G, Unilever and Others Are Trying an Experiment: Giving Marketing More Say Over Research” —Advertising Age (03.25.2002) 12. All functions contribute equally—IS, HR, Finance, Purchasing, Engineering, Logistics, Sales, Etc. 13. Project Management can come from any function. 14. WE ARE ALL IN SALES. PERIOD. 15. We all invest in “wiring” the customer organization. 16. WE ALL “LIVE THE BRAND.” (Brand = Solutions. That MAKE MONEY FOR OUR CUSTOMERPARTNER.) 17. We use the word “PARTNER” until we all want to barf! 18. We NEVER BLAME other parts of our organization for screw-ups. 19. WE AIM TO REINVENT THIS INDUSTRY! 20. We hate the word-idea “COMMODITY.” 21. We believe in “High tech, High touch.” 22. We are DREAMERS. 23. We deliver . (PROFITS.) (CUSTOMER SUCCESS.) 24. If we play the “SOLUTIONS GAME” brilliantly, no one can touch us! 25. Our TEAM needs 100% I.C.s (Imaginative Contributors). This is the ULTIMATE “All Hands” affair! Q: Is that all there is? A: Quite possibly. “Roche’s New Scientific Method”—Fast Company. And? X-Functional Teams (NO STOVEPIPES!). “Fail fast.” “The only way to embrace a technological revolution, Roche has discovered, is to unleash an organizational revolution.” Duh???*: “We’ve come up with a solution. … We’ve begun to create a form of communications that is much better than we had before, and that’s allowed us to gather better data. We’ve finally realized that we have an interplay with other hospitals and with pre-hospital.”—Dr. Ben Honigman, ER, U. Colorado Hospital, on “diverts” (Denver Post/05.05.02) *Internet + Data + Open data exchange + Barrier busting Innovation & Speed’s “New Basics”* 1. XFTs are the “culture.” 2. Project-centric. 3. Open “talent market.” 4. “Cause-based” projects. 5. Ubiquitous “open systems” IS—at home & throughout supply chain. Web based. 6. F-L-A-T. 7. EVP (S.O.U.B), etc. *Innovation, Speed, CRM, “Experience”/ “Solution” demand this XF25: WOW Projects (100%). Physical Co-location (geologists & geophysicists). Strategic firings of turf kings (top performer goes). Bonuses (big). Deep dipping. Job rotation (musical chairs at the top). EVP/SOUB. Lots of kids (Instant Messaging). Early Proj Mgt experience. Take techies on sales calls. Symbolic stuff (black berets). “Supply Chain” 2000: “When Joe Employee at Company X launches his browser, he’s taken to Company X’s personalized home page. He can interact with the entire scope of Company X’s world – customers, other employees, distributors, suppliers, manufacturers, consultants. The browser – that is, the portal – resembles a My Yahoo for Company X and hooks into every network associated with Company X. The real trick is that Joe Employee, business partners and customers don’t have to be in the office. They can log on from a cell phone, Palm Pilot, pager or home office system.” Red Herring (09.2000) KEY WORDS: Partners with our Customers in creating Memorable, Value-added Solutions/ Successes/ Experiences. WHICH REQUIRES: Total Enterprise Responsiveness … beyond functional walls. The Real “New Economy” “Imagine a chess game in which, after every half dozen moves, the arrangement of the pieces on the board stays the same but the capabilities of the pieces randomly change. Knights now move like bishops, bishops like rooks … Technology does that. It rubs out boundaries that separate industries. Suddenly new competitors with new capabilities will come at you from new directions. Lowly truckers in brown vans become geeky logistics experts. …” Business 2.0 (8.2001) IV. NEW BUSINESS. NEW BRAND. 8. A World of Scintillating/ Awesome/ WOW “Experiences.” “Experiences are as distinct from services as services are from goods.” Joseph Pine & James Gilmore, The Experience Economy: Work Is Theatre & Every Business a Stage 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 “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 “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 “Guinness as a brand is all about community. It’s about bringing people together and sharing stories.”—Ralph Ardill, Imagination, in re Guinness Storehouse WHAT CAN BROWN DO FOR YOU? 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. The “Experience Ladder” Experiences Services Goods Raw Materials 1940: Cake from flour, sugar (raw materials economy): $1.00 1955: Cake from Cake mix (goods economy): $2.00 1970: Bakery-made cake (service economy): $10.00 1990: Party @ Chuck E. Cheese (experience economy) $100.00 Message: “Experience” is the “Last 80%” P.S.: “Experience” applies to all work! 1940: Cake from flour, sugar (raw materials economy): $1.00 1955: Cake from Cake mix (goods economy): $2.00 1970: Bakery-made cake (service economy): $10.00 1990: Party @ Chuck E. Cheese (experience economy) $100.00 “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 It’s All About EXPERIENCES: “Trapper” to “Wildlife Damage-control Professional” Trapper: <$20 per beaver pelt. WDCP: $150/“problem beaver”; $750-$1,000 for flood-control piping … so that beavers can stay. Source: WSJ/05.21.2002 “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 LAN Installation Co. to Geek Squad (2% to 30%/Minn.) Hire a theater director, as a consultant or FTE! First Step (?!): “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 Ladder Position Measure Solutions Success (Experiences) Services Satisfaction Goods Six-sigma 9. 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 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 Emotional Design that Interprets Dreams “Zero defects”: Only the starting point. Love at first sight. Design for the five senses. Develop to expand the Main Dream. Design so as to seduce through the peripheral senses. Source: 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 Constantly Magnify Perceived Value Maximize your value-added by fulfilling the dreams of your clients. Only invest in what is valuable for your client. Don’t let the short-term results weaken the long-term value of your brand. Balance rigorous control of the financial endeavor with the emotional management of your brand. Build a financial structure that allows risk-taking: NO RISKS—NO DREAMS. Establish long-term “price power” in order to avoid the trap of the commodity product. Source: Gian Luigi Longinotti-Buitoni 10. The “Soul” of “Experiences”: [Mostly Ignored] Design Rules! Design Myths. Unconventional [Design] Messages Not about ... “Lumpy Objects”! Not about ... $79,000 objects The I.D. [International Design] Forty* Airstream … Alfred A. Knopf … Apple Computer … Amazon.com … Bloomberg … Caterpillar … CNN … Disney … FedEx … Gillette … IBM … Martha Stewart … New Balance … Nickelodeon … Patagonia … The New York Yankees … 3M … Etc. * List No. 1, 1999 Unconventional [Design] Messages Not about ... “Lumpy Objects”! Not about ... $79,000 objects Design Transforms even the [Biggest] Corporations! TARGET … “the champion of America’s new design democracy” (Time) “Marketer of the Year 2000” (Advertising Age) Lady Sensor, Mach3, and … $70M on developing the OralB CrossAction toothbrush 23 patents, including 6 for the packaging Source: www.ecompany.com [06.00] Design2002 LISTERENE’s … PocketPaks WESTIN’s … Heavenly Westin’s … Heavenly Bed Design’s place in the universe. And Tomorrow … “Fifteen years ago companies competed on price. Now it’s Tomorrow it’s design.” quality. Robert Hayes All Equal Except … “At Sony we assume that all products of our competitors have basically the same technology, price, performance and Design is the only thing that differentiates one product from another in the marketplace.” features. Norio Ohga “Design is treated like a religion at BMW.” Fortune “The new Beetle fails at most categories. The only thing it doesn’t fail in is drop-dead charm.” Jerry Hirshberg, Nissan Design International Object of Desire! “Every now and then, a design comes along that radically changes the way we think about a particular object. Case in point: the iMac. Suddenly, a computer is no longer an anonymous box. It is a sculpture, an object of desire, something that you look at.” Katherine McCoy & Michael McCoy, Illinois Institute of Technology “The good 10 percent of American product design comes out of big-idea companies that don’t believe in talking to the customer. They're run by passionate maniacs who make everybody’s life miserable until they get what they want.” Bran Ferren, Applied Minds/Wired 1-2001 “We don’t have a good language to talk about this kind of thing. In most people’s vocabularies, design means veneer. … But to me, nothing could be further from the Design is the fundamental soul meaning of design. of a man-made creation.” Steve Jobs Check Out the Language: “Tomorrow it’s design …” “Design is the only thing …” “Design is … religion ...” “Drop-dead charm …” “Object of desire …” “Passionate maniacs …” “Fundamental soul …” Bottom Line. Design “is” … WHAT & WHY I LOVE. LOVE. I LOVE my ZYLISS Garlic Peeler! All Time No.1 (TP) Ziplocs Design “is” … WHY I GET MAD. MAD. Wanted: THE DESIGNER OF MY RADIO SHACK PHONE. Major Reward! Design is never neutral. DESIGN is the principal difference between love and hate! Hypothesis: THE BASE CASE: I am a design fanatic. Though not “artistic,” I love “cool stuff.” But it goes [much] further, far beyond the personal. Design has become a professional obsession. I SIMPLY BELIEVE THAT DESIGN PER SE IS THE PRINCIPAL REASON FOR EMOTIONAL ATTACHMENT [or detachment] RELATIVE TO A PRODUCT OR SERVICE OR EXPERIENCE. Design, as I see it, is arguably the #1 DETERMINANT of whether a productservice-experience stands out … or doesn’t. Furthermore, it’s another “one of those things” that damn few companies put – consistently – on the front burner. Message (?????): Men cannot design for women’s needs. “Perhaps the macho look can be interesting … if you want to fight dinosaurs. But now to survive you need intelligence, not power and aggression. Modern intelligence means intuition—it’s female.” Source: Philippe Starck, Harvard Design Magazine (Summer 1998) Step No. 1: NOTEBOOK POWER! [Start recording the awesome & the awful] User … STOP BLAMING YOURSELF! (Don Norman/Design of Everyday Things) “Sometimes I have episodes of wild fury in rental cars. It’s not road rage. It’s more like design rage.” Susan Casey, www.ecompany.com 11. Design+ = “Beautiful” Systems. Fred S.’s “mediocre” thesis. Herb K.’s napkin. Great design = One-page business plan (Jim Horan) There Are Lawyers … and Then There Are Lawyers: John De Laney/ICM ANYTHING TRULY IMPORTANT CAN BE BOILED DOWN TO RD 1/3 PAGE.* (*NO SHIT.) K.I.S.S.: Gordon Bell (VAX 500/50. daddy): Chas. Wang (CA): Behind schedule? Cut least productive 25%. have. Must hate. / Must design. Must undesign. Systems: Must Mgt. Team includes … EVP (S.O.U.B.) Executive Vice President, Stomping Out Unnecessary Bullshit “Ninety percent of what we call ‘management’ consists of making it difficult for people to get things done.” – P.D. First Steps: “Beauty Contest”! 1. Select one form/document: invoice, air bill, sick leave policy, customer returns-claim form. 2. Rate the selected doc on a scale of 1 to 10 [1 = Bureaucratica Obscuranta/ Sucks; 10 = Work of Art] on four dimensions: Beauty. Grace. Clarity. Simplicity. 3. Re-invent! 4. Repeat, with a new selection, every 15 working days. 12. “It” all adds up to … THE BRAND. The Heart of Branding … “WHO ARE WE?” “Most companies tend to equate branding with the company’s marketing. Design a new marketing campaign and, voilà, you’re on course. They are wrong. The task is much bigger. It is about fulfilling our potential … not about a new logo, no matter how clever. WHAT IS MY MISSION IN LIFE? WHAT DO I WANT TO CONVEY TO PEOPLE? HOW DO I MAKE SURE THAT WHAT I HAVE TO OFFER THE WORLD IS ACTUALLY UNIQUE? The brand has to give of itself, the company has to give of itself, the management has to give of itself. To put it bluntly, it is a matter of whether – or not – you want to be … UNIQUE … NOW.” Jesper Kunde, Unique now … or never “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 DO THE HOUSEKEEPERS & CLERKS “BUY IT”? [ARE YOU V-E-R-Y SURE?] “EXACTLY HOW ARE WE DRAMATICALLY DIFFERENT?” 1st Law Mktg Physics: OVERT BENEFIT (Focus: 1 or 2 > 3 or 4/“One Great Thing.” Source #1: Personal Passion) 2ND Law: REAL REASON TO BELIEVE (Stand & Deliver!) RD 3 Law: DRAMATIC DIFFERENCE (Execs Don’t Get It: See the next slide.) Source: Jump Start Your Business Brain, Doug Hall 2 Questions: “How likely are you to purchase this new product or service?” (95% to 100% weighting by execs) “How unique is this new product or service?” (0% to 5%*) *No exceptions in 20 years – Doug Hall, Jump Start Your Business Brain “They [consumer goods company] have acquired a bunch of products, which is what everyone is doing. But what’s the point, the message, the story line, the Big Idea that makes ‘it’ all hang together?” —Exec, major consumer goods company “Instead of having the brand be seen as goodbetter-best for the same type of clothing, they’ve got to give it more uniqueness.” —David Martin, Interbrand US, on The Gap’s problems “You do not merely want to be the best of the best. You want to be considered the only ones who do what you do.” Jerry Garcia “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 “We’re not going to be driven by where we think a funding agency would like to see us go. We’re going to build our case … and then find an organization that agrees with us.” Stephen Spongberg, Polly Hill Arboretum “WHY DOES IT MATTER TO THE CLIENT?” “EXACTLY HOW DO I PASSIONATELY CONVEY THAT DRAMATIC DIFFERENCE TO THE CLIENT ?” “Brand Promise” Exercise: (1) Who Are WE? (poem/novella/song, then 25 words.) (2) List three ways in which we are UNIQUE … to our Clients. (3) Who are THEY (competitors)? (ID, 25 words.) (4) List 3 distinct “us”/“them” differences. (5) Try “results” on your teammates. (6) Try ’em on a friendly Client. (7) Try ’em on a skeptical 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 “Salt is salt is salt. Right? Not when it blue box comes in a with a picture of a little girl carrying an umbrella. Morton International continues to dominate the U.S. salt market even though it charges more for a product that is demonstrably the same as many other products on the shelf.” Tom Asaker, Humanfactor Marketing What Can [Can’t] Be Branded? “Branding is not a problem if you have the right mentality. You go to your team and you pin up a $200 Swiss Army Watch. Competing in the ridiculously crowded sub-$200 watch market, they made it into a brand name, named after the most irrelevant and useless thing in history [the Swiss Army]. And you say, ‘Gang, if they can do it, we can do it.’ ” Barry Gibbons V. NEW BUSINESS. NEW WORK. 13. Toward Work that Matters: The WOW Project. “Reward excellent failures. Punish mediocre successes.” Phil Daniels, Sydney exec TP: “Your ‘signature’ is not ‘I work for Dow.’ It’s, ‘’I accomplished [INCREDIBLY COOL PROJECT] while I was associated with Dow.’”* *Terms: Signature. Portfolio. Projects. Braggables. Language matters! Wow! BHAG! “Takes your breath away!” “Let’s make a dent in the universe.” Steve Jobs Your Current Project? 1. Another day’s work/Pays the rent. 4. Of value. 7. Pretty Damn Cool/Definitely subversive. 10. WE AIM TO CHANGE THE WORLD. (Insane!/Insanely Great!/WOW!) Measures –WOW! –Beauty! –Raving Fans! –Impact! Language matters! “We shape our buildings. Thereafter they shape us.”—WSC “We shape our words. Thereafter they shape us.”—TJP “Astonish me!” / S.D. “Build something great!” / H.Y. “Immortal!” / D.O. No damn J.A.M.S. Motto: Legacy! TP: “Your ‘signature’ is not ‘I work for Dow.’ It’s, ‘’I accomplished [INCREDIBLY COOL PROJECT] while I was associated with Dow.’”* *Terms: Signature. Portfolio. Projects. Braggables. Herman Edwards: “I picked up one of those Jets books and I told them, ‘What you do as a football team is your legacy. When you’re 80 years old, what you’ve done will be in this book and no one can take that away from you. Your grandkids, your kids after that, they will know what you did. It’s about leaving your name in stone.” Source: The New York Times (12.31.02) COL Richard Hallock (to incoming SECDEF James Schlesinger): “You must understand that if you want to leave a legacy it is vital for you to make a quick decision about what you want the legacy to be … because after several months you become so caught up in the business of the Pentagon, so overwhelmed, that it will be too late. Pick a few projects and put the full weight of the office behind them. Guide the projects. Nurture them. Know from the very beginning that this will be your legacy. Force them through the bureaucracy.” BOYD: The Fighter Pilot Who Changed the Art of War (Robert Coram) 14. WOW Projects for the “Powerless”: A Surefire Recipe. Topic: Boss-free Implementation of STM /Stuff That MATTERS! World’s Biggest Waste … Selling “Up” THE IDEA: Model F4 Find a Fellow Freak Faraway F2F!/K2K!/ 1@T/R.F!A.* *Freak to Freak/ Kook to Kook/ One at a Time/ Ready.Fire!Aim. And … K2KK* S2SS** *Kook to Kooky Kustomer **Skunk to Scintillating Supplier “Find something small that you can turn around. If you’re on a 9game losing streak, you need to start with one great inning.”—Rudy BOTTOM LINE The Enemy! Joe J. Jones 1942 – 2002 HE WOULDA DONE SOME REALLY COOL STUFF BUT … HIS BOSS WOULDN’T HIM! LET 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 “Nobody gives you power. You just take it.”—Roseanne Kurt Carlson to young Marilyn Carlson: “If you don’t like Sunday School, change it!” (She did.) “ ‘Obeying the rules’ is obeying their rules. [Women] can never be powerful as long as they try to be in charge in the same way men take charge.” Harriet Rubin, The Princessa: Machiavelli for Women “Don’t just express yourself. Invent yourself. And don’t restrict yourself to off-the-shelf models.”—Henry Louis Gates, Jr., commencement address, Hamilton College Characteristics of the “Also rans”* “Minimize risk” “Respect the chain of command” “Support the boss” “Make budget” *Fortune, article on “Most Admired Global Corporations” “To Be somebody or to Do something” BOYD: The Fighter Pilot Who Changed the Art of War (Robert Coram) Epitaphs from Hell Joe J. Jones 1942 – 2002 HE WOULDA DONE SOME REALLY COOL STUFF BUT … HIS BOSS WOULDN’T LET HIM! Joe J. Jones 1942 – 2002 HE MADE BUDGET! (AGAIN & AGAIN.) Joe J. Jones 1942 – 2002 HIS NET WORTH WAS $11,000,000 Joe J. Jones 1942 – 2002 HE HIT QUARTERLY EARNINGS TARGETS 44 TIMES IN A ROW. WHO WILL GO TO STOCKHOLM? (Damn it.) “Very simple. I never edited books I didn’t love.” — J.O., on her consistent success as an editor If you are not prepared to be fired over your beliefs … you are working on the wrong project - TP “If your boss demands loyalty, give him integrity. But if he demands integrity, give him loyalty.” BOYD: The Fighter Pilot Who Changed the Art of War (Robert Coram) IMPLEMENTATION SECRETS. Credibility. Demos & End Runs & Being There. Mr. OSHA Maine. Find three COs. Seek determined alumnae. Go to Bangkok. (Forget: “How do I erase the old?” Supplant rather than change the regnant heirarchs.) It’s politics, stupid! (Play or sit on the sidelines.) “White-wagon kill” BOYD: The Fighter Pilot Who Changed the Art of War (Robert Coram) 15. Bringing WOW Work to Fruition: The Sales 25. The Sales25: Great Salespeople … 1. Know the product. (Find cool mentors, and use them.) 2. Know the company. 3. Know the customer. (Including the customer’s consultants.) (And especially the “corporate culture.”) 4. Love internal politics at home and abroad. 5. Religiously respect competitors. (No badmouthing, no matter how provoked.) 6. Wire the customer’s org. (Relationships at all levels & functions.) 7. Wire the home team’s org. and vendors’ orgs. (INVEST Big Time time in relationships at all levels & functions.) (Take junior people in all functions to client meetings.) It’s politics, stupid! (Play or sit on the sidelines.) Great Salespeople … 8. Never overpromise. (Even if it costs you your job.) 9. Sell only by solving problems-creating profitable opportunities. (“Our product solves these problems, creates these unimagined INCREDIBLE opportunities, and will make you a ton of money—here’s exactly how.”) (IS THIS A “PRODUCT SALE” OR A WOW-ORIGINAL SOLUTION YOU’LL BE DINING OFF 5 YEARS FROM NOW? THAT WILL BE WRITTEN UP IN THE TRADE PRESS?) 10. Will involve anybody—including mortal enemies—if it enhances the scope of the problem we can solve and increases the scope of the opportunity we can encompass. 11. Know the Brand Story cold; live the Brand Story. (If not, leave.) Great Salespeople … 12. Think “Turnkey.” (It’s always your problem!) 13. Act as “orchestra conductor”: You are responsible for making the whole-damn-network respond. (PERIOD.) 14. Help the customer get to know the vendor’s organization & build up their Rolodex. 15. Walk away from bad business. (Even if it gets you fired.) 16. Understand the idea of a “good loss.” (A bold effort that’s sometimes better than a lousy win.) 17. Think those who regularly say “It’s all a price issue” suffer from rampant immaturity & shrunken imagination. 18. Will not give away the store to get a foot in the door. 19. Are wary & respectful of upstarts—the real enemy. 20. Seek several “cool customers”—who’ll drag you into Tomorrowland. Great Salespeople … 21. Use the word “partnership” obsessively, even though it is way overused. (“Partnership” includes folks at all levels throughout the supply chain.) 22. Send thank you notes by the truckload. (NOT ENOTES.) (Most are for “little things.”) (50% of those notes are sent to those in our company!) Remember birthdays. Use the word “we.” 23. When you look across the table at the customer, think religiously to yourself: “HOW CAN I MAKE THIS DUDE RICH & FAMOUS & GET HIM-HER PROMOTED?” 24. Great salespeople can affirmatively respond to the query in an HP banner ad: HAVE YOU CHANGED CIVILIZATION TODAY? 25. Keep your bloody PowerPoint slides simple! 16. Boss Work: Demos, Heroes, Stories … Or: Starting a WOW Projects Epidemic. “Ordering” Systemic Change is a Stupid Waste of Time! Premise: Demos! Heroes! Stories! “Lead Frogs” Leapfrog Group: Demo = Story “A key – perhaps the key – to leadership is the effective communication of a story.” Howard Gardner, Leading Minds: An Anatomy of Leadership MB A!* *Managing By Story-ing Around/David Armstrong Culture of Prototyping “Effective prototyping may be the most valuable core competence an innovative organization can hope to have.” Michael Schrage Think about It!? Innovation = Reaction to the Prototype Michael Schrage He who has the quickest O.O.D.A. Loops* wins! *Observe. Orient. Decide. Act. / Col. John Boyd “Success is the ability to go from failure to failure without losing your enthusiasm.” Winston Churchill (as quoted by John Peterman) “Some people look for things that went wrong and I look for things that went right and try to build on them.” try to fix them. —Bob Stone/ Mr.Rego/ Confessions of an Uncivil Servant “Find something small that you can turn around. If you’re on a 9game losing streak, you need to start with one great inning.”—Rudy REAL Org Change: Demos & Models (“Model Installations,” “ReGo Labs”)/ Heroes (mostly extant: “burned to reinvent gov’t”)/ Stories & Storytellers (Props!)/ Chroniclers (Writers, Videographers, Pamphleteers, Etc.)/ Cheerleaders & Recognition (Pos>>Neg, Volume)/ New Language (Hot/Emotional/WOW)/ Seekers (networking mania)/ Protectors/ Support Groups/ End Runs—“Pull Strategy” (weird alliances, weird customers, weird suppliers, weird alumnae-JKC)/ Field “Real People” Focus (3 COs) (long way away)/ Speed (O.O.D.A. Loops—act before the “bad guys” can react) C.f., Bob Stone, Confessions of an Uncivil Servant VI. NEW BUSINESS. NEW YOU. 17. Re-inventing the Individual: Brand You/ You Inc./ Free Agent Nation (Or Else.) “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 “What strategic motto will dominate this transition from nation-state to marketstate? If the slogan that animated the liberal, parliamentary nation-states was ‘make the world safe for democracy,’ what will the forthcoming motto be? Perhaps ‘making the world available,’ which is to say creating new worlds of choice and protecting the autonomy of persons to choose.” —Philip Bobbitt, The Shield of Achilles: War, Peace and the Course of History “better material welfare” vs. “maximize the opportunity of its people” —Philip Bobbitt, The Shield of Achilles: War, Peace and the Course of History “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 New World of Work < 1 in 10 F500 #1: Manpower Inc. Freelancers/I.C.: 16M-25M Temps: 3M (incl. CEOs & lawyers) Microbusinesses: 12M-27M Total: 31M-55M Source: Daniel Pink, Free Agent Nation Minimum New Work SurvivalSkillsKit2002 Mastery Rolodex Obsession (vert. to horiz. “loyalty”) Entrepreneurial Instinct CEO/Leader/Businessperson/Closer Mistress of Improv Sense of Humor Intense Appetite for Technology Groveling Before the Young Embracing “Marketing” Passion for Renewal Sam’s Secret #1! Minimum New Work SurvivalSkillsKit2001 Mastery Rolodex Obsession (vert. to horiz. “loyalty”) Entrepreneurial Instinct CEO/Leader/Businessperson/Closer Mistress of Improv Sense of Humor Intense Appetite for Technology Groveling Before the Young Embracing “Marketing” Passion for Renewal “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? R.D.A. Rate: 15%?, 25%? Therefore: Formal “Investment Strategy”/R.I.P. Invent. Reinvent. Repeat. Source: HP banner ad “You are the storyteller of your own life, and you can create your own legend or not.” Isabel Allende PRECEDENT! “No prudent man dared to be too certain of exactly who he was. Everyone had to be prepared to become someone else. To be ready for such perilous transmigrations was to become an American.”—Daniel Boorstin Personal “Brand Equity” Evaluation – I am known for [2 to 3 things]; next year at this time I’ll also be known for [1 more thing]. – My current Project is challenging me … – New things I’ve learned in the last 90 days include … – My public “recognition program” consists of … – Additions to my Rolodex in the last 90 days include … –My resume is discernibly different from last year’s at this time … T.T.D./Assignment Construct a 1/8-page or 1/4-page ad for Brand You … for the Yellow Pages They “Get it”?! – stone mason – electrician – plumber – tiler – cabinet maker – contractor – blacksmith – well driller – blaster – sheep shearer – etc. “When was the last time you asked, ‘What do I want to be?’ ” Sara Ann Friedman, Work Matters “The time seems appropriate to rethink the notions of self and identity in this rapidly changing age …” Tara Lemmey, Project LENS, past president Electronic Frontier Foundation “I am an American, Chicago born, and go at things as I have taught myself, free-style, and will make the record in my own way.” Saul Bellow, The Adventures of Augie March “I don’t think there’s anything worse than being ordinary.” American Beauty 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 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.” THE I work for a company called Me STREET JOURNAL Adventures in Capitalism THE rise up and flee your cubicle STREET JOURNAL Adventures in Capitalism Bill Parcells’ World/ Brand You World! BLAME NOBODY! EXPECT NOTHING! DO SOMETHING! NY Post (9/99) 18. Boss Job One: The Talent Obsession. Brand = Talent.* *Duh. 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 “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 Visibly energetic/ Passionate/ Enthusiastic … about everything. Engaging/ Inspires others. (Inspires the interviewer!) Loves messes & pressure. Impatient/ Action fanatic. A finisher. Exhibits: Fat “WOW Project” Portfolio. (Loves to talk about her work.) Smart. Curious/ Eclectic interests/ A little (or more) weird. Well-developed sense of humor/ Fun to be around. ****** No. 1 re bosses: Exceptional talent selection & development record. (Former co-workers: “Did you visibly grow while working with X?” / “How has the department/team grown on a ‘world-class’ scale during X’s tenure?”) 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 “Differentiation is all about being extreme, rewarding the best and weeding out the ineffective. … You build strong teams by treating individuals differently. Just look at the way baseball teams pay 20game winning pitchers and 40-plus homerun hitters.”—Jack Welch 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. $1.00 for “competence.” $249.00 for “attitude”/ “honesty.” Bonus/TP: 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] 8 Minutes* —Dr. Sugata Mira, NIIT/ New Delhi/ 1999** *Ignorance to Surfing **And then there’s oya yubi sedai, the “thumb generation” 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 “Expose yourself to the best things humans have done and then try to bring those things into what you are doing.” Steve Jobs, on the eclectic nature of the teams he concocts; people of “extraordinary tastes” with “intriguing backgrounds” “Capitalism and the conditions for creating wealth have changed in ways that play to the strengths of hybrid individuals, organizations and nations. And those that wish to profit from changing economic conditions must view hybridity as their first and best option. This bold claim warrants an explanation. The ability to apply knowledge to new situations is the most valued currency in today’s economy. Highly creative people … are misfits on some level. They tend to question accepted views and consider contradictory ones. This appreciation defines the mongrel mentality. Strangers instinctively question things that natives take for granted. Many things strike them as odd or stupid. …” G. Pascal Zachary, The Global Me 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, Business Week, 11.20.00 The New Economy … Shout goodbye to “command and control”! Shout goodbye to hierarchy! Shout goodbye to “knowing one’s place”! “Guys want to put everybody in their hierarchical place. Like, should I have more respect for you, or are you somebody that’s south of me?” Paul Biondi, Mercer Consultants [from It’s Not Business, It’s Personal, Ronna Lichtenberg] 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 “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 “American women possess leadership abilities that are particularly effective in today’s organizations, yet their abilities remain undervalued and underutilized. In the future, what will distinguish one organization and one country from another will be its use of human resources. Today human resource utilization is not only a matter of social justice but a bottom-line issue.” Judy Rosener, America’s Competitive Secret “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 “Thank you” 17 Men: 8 4 Women: 19 Ass Of The Year2002 (?): Maurice Greenberg, A.I.G., on the Company’s New (All Male) Leadership Team “In a lot of countries of the world, it would be very difficult for a woman to be a good CEO. … I have a responsibility to do the best we can for shareholders.” * ** *Source: New York Times/05.05.02 **Wouldn’t you love to watch him tell that … face-toface … to Margaret Thatcher or Carly Fiorina? (I would.) Okay, you think I’ve gone tooooo far. DO ANY OF YOU SUFFER FROM TOO MUCH TALENT? How about this: 63 of 2,500 top earners in F500 8% Big 5 partners 14% partners at top 250 law firms 43% new med students; 26% med faculty; 7% deans Source: Susan Estrich, Sex and Power 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 It’s Girls, Stupid! 1996: 8.4M women, 6.7M men in college (est: 9.2 to 6.9 in 2007); more women than men in high-level math and science courses More girls in student govt., honor societies; girls read more books, outperform boys in artistic and musical ability, study abroad in higher numbers Boys do rule: crime, alcohol, drugs, failure to do homework (4:1) Source: The Atlantic Monthly (May2000) “Boys are trained in a way that will make them irrelevant.” Phil Slater Read This! “Winning the Talent War for Women: Sometimes It Takes a Revolution” Douglas McCracken, HBR [11-12/2000] “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] “Would Congress [the Boardroom] be a different place if half the members were women?” From Sex and Power, Susan Estrich 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 enough weird people in “Are there the lab these days?” V. Chmn., pharmaceutical house, to a lab director (06.01) “A great idea always comes from one person’s mind, someone who is, by definition, local. If you place 10 people in Brussels to conceive a European [ad/marketing] campaign, you’ll get nothing.” Source: Jean-Marie Dru, Disruption “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) “The A students work for the B students. The C students run the business. The D students dedicate the buildings.” —Assertion to Kinko’s founder Paul Orfalea from his Mom (Fortune/05.13.02) “Most good ideas are born out of a little sketch. [They] probably don’t occur when everybody is sitting around a table, but rather when you’re having something to eat or having a talk in a bar.”—Adrian Caddy, Imagination 9. Opportunity Make It an Adventure! “H.R.” to “H.E.D.” ??? Human Enablement Department 10. Leading Genius We are all unique! Beware Lurking HR Types … One size NEVER fits all. One size fits one. Period. 48 Players = 48 Projects = 48 different success measures. MantraM3 Talent = Brand What’s your company’s … Employee Value Proposition, per Ed Michaels et al., The War for Talent EVP = Challenge, professional growth, respect, satisfaction, opportunity, reward Source: Ed Michaels et al., The War for Talent The Top 5 “Revelations” Better talent wins. Talent management is my job as leader. Talented leaders are looking for the moon and stars. Over-deliver on people’s dreams – they are volunteers. Pump talent in at all levels, from all conceivable sources, all the time. Source: Ed Michaels et al., The War for Talent “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” Leaders-Teachers Do Not “Transform People”! Instead leaders-mentors-teachers (1) provide a context which is marked by (2) access to a luxuriant portfolio of meaningful opportunities (projects) which (3) allow people to fully (and safely, mostly—caveat: “they” don’t engage unless they’re “mad about something”) express their innate curiosity and (4) engage in a vigorous discovery voyage (alone and in small teams, assisted by an extensive self-constructed network) by which those people (5) go to-create places they (and their mentors-teachersleaders) had never dreamed existed—and then the leaders-mentors-teachers (6) applaud like hell, stage “photo-ops,” and ring the church bells 100 times to commemorate the bravery of their “followers’ ” explorations! First Steps Make a list of the traits you really want to unearth. (TP & “sense of humor;” GR & jaywalking.) Promote for TDS/Talent Development Skills. Work up an EVP. ADDENDA: Tom Peters’ The Talent50 The Talent50 1. People first! 2. Soft is Hard. 3. FUNDAMENTAL PREMISE: We are in an Age of Talent/ Creativity/ Intellectual-capital Added. 4. Talent “excellence” in every part of the organization. 5. P.O.T./Pursuit Of Talent = Obsession. 6. HR sits at The Head Table. 7. HR is “cool.” The Talent50 8. Re-name “HR.” (Talent Department, Center of Talent Excellence) 9. There’s an HR Strategy 10. There is a FORMAL Recruitment Strategy. 11. There is a FORMAL Leadership Development Strategy. 12. There is a “world class” Leadership Development Center. 13. There is a FORMAL-STRATEGIC HR Review Process. 14. The “Top100,” and every unit’s Top10, are consciously managed. The Talent50 15. “People/Talent Reviews” are the FIRST reviews. 16. HR Strategy = Business Strategy. 17. Make it a Cause Worth Signing Up For.. 18. Set Sky High Standards. 19. Enlist everyone in Challenge Century21. 20. Pursue the Best! 21. Up or Out. 22. Ensure that the Review Process has INTEGRITY. 23. Pay! The Talent50 24. Training I: Train! Train! Train! 25. TII: 100% “business people.” 26. TIII: 100% Leaders. 27. TIV: Boss as Trainer-in-Chief. 28. Open Communication I: NO BARRIERS. 29. Open Communication II: Share Information. (ALL!) 30. Respect! 31. INTEGRITY! 32. Treat the Whole Individual. The Talent50 33. Places of “grace.” 34. MBWA: The “Rudy Rule.” 35. Thank You! 36. Promote for “people skills.” (ALL ELSE IS SECONDARY.) 37. Honor youth. 38. Early leadership assignments. 39. Fast Tracking is the norm. 40. Create a System of Mentoring. The Talent50 41. Diversity! 42. Diversity starts on the Board of Directors. 43. WOMEN RULE. 44. Weird Wins. 45. We are all unique. 46. Bosses “win people over.” 47. GOAL: Adventures of Mutual Discovery. 48. Foster Independence. 49. Enthusiasm! The Talent50 50. Talent = Brand. VII. NEW BUSINESS: (NEW) BRAND INSIDE RULES 2002 … Message BI > BO 19. THINK WEIRD … the HVA/ High Value Added Bedrock. The Cortez Strategy! The High Standard Deviation Enterprise. THINK WEIRD: Saviors-in-Waiting Disgruntled Customers Off-the-Scope Competitors Rogue Employees Fringe Suppliers Wayne Burkan, Wide Angle Vision: Beat the Competition by Focusing on Fringe Competitors, Lost Customers, and Rogue Employees CUSTOMERS: “Futuredefining customers may account for only 2% to 3% of your total, but they represent a crucial window on the future.” Adrian Slywotzky, Mercer Consultants “If you worship at the throne of the voice of the customer, you’ll get only incremental advances.” Joseph Morone, President, Bentley College “These days, you can’t succeed as a company if you’re consumer led – because in a world so full of so much constant change, consumers can’t anticipate the next big thing. Companies should be idealed and consumerinformed.” Doug Atkin, partner, Merkley Newman Harty “The future has already happened. It’s just not evenly distributed.” Adrian Slywotzky “Our strategies must be tied to leading edge customers on the attack. If we focus on the defensive customers, we will also become defensive.” John Roth, CEO, Nortel “I made a note. I’m going after [PIONEER CO.], not the two ‘establishment firms’ who were formerly at the top of my 2001 target list. We need a jolt. Things are going too well.” Sales Exec, high-tech superstar W.I.W? 20 of 26 7 of top 10* *P&G: Declining domestic sales in 20 of 26 categories; 7 of top 10 (The “billiondollar” problem.) categories. Source: Advertising Age 01.21.2002/BofA Securities Primary Obstacles to “Marketing-driven Change” 1. Fear of “cannibalism.” 2. “Excessive cult of the consumer”/ “customer driven”/ “slavery to demographics, market research and focus groups.” 3.Creating “sustainable advantage.” Source: John-Marie Dru, Disruption Account planning has become “focus group balloting.” —Lee Clow “Chivalry is dead. The new code of conduct is an active strategy of disrupting the status quo to create an unsustainable series of competitive advantages. This is not an age of defensive castles, moats and armor. It is rather an age of cunning, speed and surprise. It may be hard for some to hang up the chain mail of ‘sustainable advantage’ after so many battles. But hypercompetition, a state in which sustainable advantages are no longer possible, is now the only level of competition.” Rich D’Aveni, Hypercompetition: Managing the Dynamics of Strategic Maneuvering “HAVE MBAs KILLED OFF MARKETING? Prof Rajeev Batra says: ‘What these times call for is more creative and breakthrough reengineering of product and service benefits, but we don’t train people to think like that.’ The way marketing is taught across business schools is far too analytical and datadriven. ‘We’ve taken away the emphasis on creativity and big ideas that characterize real marketing breakthroughs.’ In India there is an added problem: most senior marketing jobs have been traditionally dominated by MBAs. Santosh Desai, vice president, McCann Erickson, an MBA himself, believes in India engineer-MBAs, armed with this Lego-like approach, tend to reduce marketing into neat components. ‘This reductionist thinking runs counter to the idea that great brands must have a core, unifying idea.’ ”—Businessworld/04Nov2002/“Why Is Marketing Not Working?” “BIG DRUG MAKERS TRY TO POSTPONE CUSTOM REGIMENS. Most drugs don’t work well for about half the patients for whom they are prescribed, and experts believe genetic differences are part of the reason. The technology for genetic testing is now in use. But the technique threatens to be so disruptive to the business of big drug companies – it could limit the market for some of their blockbuster products – that many of them are resisting its widespread use.” The Wall Street Journal (06.18.2001) “Generally, disruptive technologies underperform established products in mainstream markets. But they have other features that a few fringe (and generally new) customers value.” Clayton Christensen, The Innovator’s Dilemma It sees all its competitors’ accomplishments merely as conventions to be overturned.” “Sony is the epitome of discontinuity. Source: Jean-Marie Dru, Disruption COMPETITORS: “The best swordsman in the world doesn’t need to fear the second best swordsman in the world; no, the person for him to be afraid of is some ignorant antagonist who has never had a sword in his hand before; he doesn’t do the thing he ought to do, and so the expert isn’t prepared for him; he does the thing he ought not to do and often it catches the expert out and ends him on the spot.” Mark Twain Employees: “Are there enough weird people in the lab these days?” V. Chmn., pharmaceutical house, to a lab director (06.01) Suppliers: “There is an ominous downside to strategic supplier relationships. An SSR supplier is not likely to function as any more than a mirror to your organization. Fringe suppliers that offer innovative business practices need not apply.” Wayne Burkan, Wide Angle Vision: Beat the Competition by Focusing on Fringe Competitors, Lost Customers, and Rogue Employees “Enormous sums of money are invested to reduce cycle time, improve quality, reengineer … Much of this money is simply wasted. The waste is due to companies’ inability to develop wide-angle vision and tap into the … power of the edge.” Wayne Burkan, Wide Angle Vision: Beat the Competition by Focusing on Fringe Competitors, Lost Customers, and Rogue Employees “Corporate consciousness is predictably centered around the mainstream. The best customers, biggest competitors, and model employees are almost invariably the focus of attention.” Wayne Burkan, Wide Angle Vision: Beat the Competition by Focusing on Fringe Competitors, Lost Customers, and Rogue Employees WE BECOME WHO WE HANG WITH! Message: TAKE SOMEONE NEW & WEIRD TO LUNCH TODAY OR TOMORROW. [Inundate yourself with weird.] Big Idea/s V.C. GM Portfolio Roster ????? “Come up with three ‘Crazy Ideas,’ one of which might work.” Fr Timothy Radcliffe, Master of the Dominicans, to his friars 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 Advice to Corporate Leaders: “Consider the metaphor of the windmill: You can harness raw power but you can’t control it. … Hire artists, clowns, or other disrupters to come in and challenge your corporate environment. … Hire a corporate anthropologist to analyze how tolerant your organization is of deviants and other innovators. … Once the anthropologist leaves, hire a shaman to drive out the evil spirits of conformity. …” Source: Ryan Matthews & Watts Wacker, Fast Company (03.02) “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) Innovation Source No. 1*: PPPs/Personally Pissed-off People “Branson started Virgin Atlantic because flying other airlines was so dreadful.” —Fortune/05.13.2002 *And there is no No. 2! “As Francois Dalle, the chairman of L’Oreal, puts it, the planner must … catch what is barely beginning.” Source: Jean-Marie Dru, Disruption Renewal = The Weird 10 = The “High S.D.” Enterprise/Individual Pioneer [Weird] Acquisitions Pioneer Customers & Alliance Partners [Measure the Portfolio’s S.D.] Divide & Conquer/“Sell-by” [Lessons from the Bees, Sir Richard, Gary H.] Pioneer Assignments/Pioneer Projects [F2F & K2K] Hire Weird [Diversity]/Train Weird/Promote Weird/Pay Gobs & Promote Fast & Cherish “Six Sigma” Talent/Appoint a Weird Board Weed Un-weird [“One Sigma” “Talent,” etc.] Hang out with Weird [Univ. of Weird]/Lunch with Weird/ Read & Surf Weird/Vacate Weird R.A.F. to R.F.A. to F.F.F. [O.O.D.A. Loops/Prototyping Mania] Sense of Humor [Rhapsodize Over Thine Failures] Re-enforce a “Culture of Disrespect”/Piracy Renewal = The Weird 10 = The “High S.D.” Enterprise/Individual Pioneer [Weird] Acquisitions Pioneer [Weird] Customers & Alliance Partners [Measure the Customer-Partner Portfolios’ S.D./Weirdness Index] Divide & Conquer/“Sell-by” [Lessons from the Bees, Sir Richard, Gary H.] Pioneer Assignments/Pioneer Projects/Pioneer Partners [F2F: Freak-to-Freak/ 4F: Find a Fellow Freak Faraway] Hire Weird [Diversity]/Train Weird/Promote Weird/Pay Gobs & Promote Fast & Cherish “Six Sigma” Talent/Appoint a Weird Board Weed Un-weird [“One Sigma” “Talent,” etc.] Hang out with Weird [Univ. of Weird]/Lunch with Weird/ Read & Surf Weird/Vacate Weird R.A.F. to R.F.A. to F.F.F. [O.O.D.A. Loops/Prototyping Mania] Sense of Humor [Rhapsodize Over Thine Cool Failures!] Re-enforce a “Culture of Disrespect”/PassionatePiracy Button-down Org • • • • • • • H.S.D.E. Acquire for market share Suck up to biggest customers Pursue “strategic vendors” Bigger is better Accept assignments as given Hire 4.0s from “top schools” Promote when they’ve “paid their dues” • Appoint a “prestigious” board • • • • • • • • Hang out with my pals • R.A.F. • Be “professional” at all times/Honor thine elders • • • • . Acquire for innovation Partner with cool customers Seek out pioneering vendors Break it up … to refresh Reframe all tasks to innovate Hire “intriguing,” wherever Promote tomorrow if the work product is weird and WOW Appoint an interesting, headstrong board Take a freak to lunch today F.F.F. Stay loose, stay cool/The hell with thine elders ?????: Get better organized to do good work vs. Get better disorganized to do great work Big Idea/s V.C. GM Portfolio Roster 20. Brand Inside The 10 Basics Summary: 2002 … Message BI > BO The Brand Inside 10 BI1. The Execution Imperative: An “Action Culture” BI2. Cherish Failures BI3. Dent the Universe: WOW Projects/BHAGs BI4. “Tell Me a Story”: Demo Mania BI5. Cut the Crap: WebWorld = ALL BI6. “Beautiful” Systems BI7. The Modified Basis for Value Added: The New “Brand Inside Warriors” BI8. Talent Time BI9. The “HSDE”: Weird Begets Weird BI10. A Brand New/Brand You World 21. Tomorrow’s Organizations … Itinerant Potential Machines. New Organizational World: Shifts of Emphasis Staffing Organization Workforce Power Source Loyalty Career Asset Fat Vertical Homogeneity Status/Command Rights Company Organizational Capital Thin Horizontal Diversity Expertise/Relationships Project Reputational Capital Source: “The Workforce of the Future,” IHRIM Journal (12.2000) TALENT POOL TO DIE FOR. Youthful. Insanely energetic. Value creativity. Risk taking is routine. Failing is normal … if you’re stretching. Want to “make their bones” in “the revolution.”Love the new technologies. Well rewarded. Don’t plan to be around 10 years from now. TALENT POOL PLUS. Seek out and work with “world’s best” as needed (it’s often needed). “We aim to change the world, and we need gifted colleagues—who well may not be on our payroll.” BRASSY-BUT-GROUNDED-LEADERSHIP. Say “I don’t know”—and then unleash the TALENT. Have a vision to be DRAMATICALLY DIFFERENT—but don’t expect the co. to be around forever. Will scrap pet projects, and change course 180 degrees—and take a big write-off in the process. NO REGRETS FROM SCREW-UPS WHOSE TIME HAS NOT-YETCOME. GREAT REGRETS AT TIME & $$$ WASTED ON “ME TOO” PRODUCTS AND PROJECTS. BRASSY-BUT-GROUNDED-LEADERSHIP. (Cont.) “Visionary” leaders matched by leaders with shrewd business sense: “HOW DO WE TURN A PROFIT ON THIS GORGEOUS IDEA?” Appreciate “market creation” as much as or more than “market share growth.” ARE INSANELY AWARE THAT MARKET LEADERS ARE ALWAYS IN PRECARIOUS POSITIONS, AND THAT MARKET SHARE WILL NOT PROTECT US, IN TODAY’S VOLATILE WORLD, FROM THE NEXT KILLER IDEA AND KILLER ENTREPRENEUR. (Gates. Ellison. Venter. McNealy. Walton. Case. Etc.) ALLIANCE MANIACS. Don’t assume that “the best resides within.” WORK WITH A SHIFTING ARRAY OF STATE-OF-THE-ART PARTNERS FROM ONE END OF THE “SUPPLY CHAIN” TO THE OTHER. Including vendors and consultants and … especially … PIONEERING CUSTOMERS … who will “pull us into the future.” TECHNOLOGY-NETWORK FANATICS. Run the whole-damn-company, and relations with all outsiders, on the Internet … at Internet speed. Reluctant to work with those who don’t share this (radical) vision. POTENTIAL MACHINES-ORGANISMS. Don’t know what’s coming next. But are ready to jump at opportunities, especially those that challenge-overturn our own “way of doing things.” VIII. NEW BUSINESS. NEW BEDROCK. (Or: Upending The Big 3.) 22. Brand Talent+: Addressing the Education Fiasco “At the ultimate stage, competition among nations will be competition among educational systems, for the most productive and richest countries will be those with the best education and training.” Richard Rosecrance, The Rise of the Virtual State FES/NOV2001: New Work. New Education. The Twain Must Meet. TP Mood Anger. Despair. Hopelessness. 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 An Unnatural Way to “Learn” Schools’ “Kafka-like rituals”: “enforce sensory deprivation on classes of children held in featureless rooms … sort children into rigid categories by the use of fantastic measures such as age-grading, or standardized test scores … train children to drop whatever they are occupied with and to move as a body from room to room at the sound of a bell, buzzer, horn, or klaxon … keep children under constant surveillance, depriving them of private time and space … John Taylor Gatto, A Different Kind of Teacher Kafka-like rituals (cont.): “assign children numbers constantly, feigning the ability to discriminate qualities quantitatively … insist that every moment of time be filled with lowlevel abstractions … forbid children their own discoveries, pretending to possess some vital secret to which children must surrender their active learning time to acquire.” John Taylor Gatto, A Different Kind of Teacher Doing Stuff that Matters! “During the first years of life, youngsters all over the world master a breathtaking array of competences with little formal tutelage.” Howard Gardner, The Unschooled Mind The Learner’s Manifesto The brain is always learning. Learning does not require coercion. Learning must be meaningful. Learning is incidental. Learning is collaborative. The consequences of worthwhile learning are obvious. Learning always involves feelings. Learning must be free of risk. Frank Smith, Insult to Intelligence “Really bright kids who just needed to get excited” —teacher, Oakley School Tom’s Edu3M Manifesto* *Manifesto for Education in the 3rd Millennium Education3M Learning is a normal state. Children are learnavores. Prodigious feats of learning are common as dirt. [Watch an H.S. QB studying game film.] We learn at different rates. We learn in different ways. Boys and girls learn [very] differently. In a class of 25, there are 25 different trajectories. Learning in 40-minutes blocks is bullshit. Learning for tests is utterly insane. There are numerous rigorous evaluation schemes, of which testing is but one—and abnormal, by “real world” standards. Education3M We learn most/fastest/most completely when we are passionate about what we are learning and it matters to us. [Salience rules!] Think EBI/LBI: Education by Interest/ Learning by Internship. Classrooms are abnormal places. We need changes of pace. [Japanese recesses after each class.] International test scores are not correlated with hours-per-year in class. Big classes are slightly problematic. Big schools suck. Period. Education3M “All this”—the right stuff—fits the NWW/New World of Work hand-in-glove. [NWW = Age of Creativity.] U.S. schools circa 2001 are a vestige of the Prussian-Fordist model, more interested in shaping behavior than stoking the fires of lifelong learning. Cutting art-music budgets is truly dumb. Learning is a matter of Intensity of Engagement, not elapsed time. [Aargh: 11 minutes on the Battle of Gettysburg.] Teachers need enough space-time-flexibility to get to know kids as individuals. Scientific discovery processes and the teaching of science are utterly at odds. [Exploration vs. spoon-feeding.] Education3M Our toughest “learning achievement”— mastering our native language—does not require schools, or even competent parents. [It does require a desperate need-to-know.] Great teachers are great learners, not impartersof-knowledge. Great teachers ask great questions—that launch kids on lifelong quests. The world is not about “right” & “wrong” answers; it is about the pursuit of increasingly sophisticated questions—just ask a ski instructor or neurosurgeon. Education3M Most schools spend most of their time setting up contexts in which kids learn not to like particular subjects. [Evidence shows that such antilearning sticks!] Vigorous exploration is normal … until you are incarcerated in a school. “Bite size” education-learning is neither education nor learning. Learning takes place rapidly on the cheerleading squad, the football team, the school newspaper, the drama club, at the after-class job--just not in the hyper-structured classroom. Education3M The “school reform” “movement” is a giant step … backwards … embracing the Prussian-Fordist paradigm with renewed vigor—at exactly the wrong time. There are large numbers of superb schools, superb principals, superb teachers; sadly, they not only fail to infect the [largely timid] rest, but are ordinarily supplanted by wusses & wimps. Alas, the teaching profession does not ordinarily attract “cool dudes & dudettes.” Schools of “education” should by and large have their charters revoked. Education3M Stability is dead; “education” must therefore “educate” for an unknowable, ambiguous, changing future; thence, learning to learn & change is far more important than mastery of a static body of “facts.” “Education” must “develop in youth the capabilities for engaging in intense concentrated involvement in an activity.” [James Coleman, 1974.] [Hint: It doesn’t.] [Hint: Understatement.] “The boys who made the best ‘Grotties’ usually turned out to be nonentities later; boys who hated Groton did much better.” FDR biographer John Gunther (quoted in Whoever Makes the Most Mistakes Wins, Richard Farson & Ralph Keyes) “Fail . Forward. Fast.” High Tech CEO, Pennsylvania Read This! Whoever Makes the Most Mistakes Wins: The Paradox of Innovation Richard Farson & Ralph Keyes: 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 Who Makes the Most Mistakes Wins 23. Revolution Required: The Healthcare Mess. “Parents, doctors, stockbrokers, even military leaders are starting to lose the authority they once had. There are all these roles premised on access to privileged information. … What we are witnessing is a collapse of that advantage, prestige and authority.” Michael Lewis, next Anne Busquet/ American Express Not: “Age of the Internet” “Age of Customer Control” Is: Amen! “The Age of the Never Satisfied Customer” Regis McKenna “Teens and young adults are flocking to the Web for health-related information as much as they are downloading music and playing games online and more often than shopping online, according to a national survey from the Kaiser Family Foundation.” Reuters (12.11.01): “One in Four Internet Users Seek Religious Information”—Reuters (12.24.2001) (“God trumps money, sex.”) Impact #1: Healthcare HealthCare2001 Consumerism X Demographics X IS/Internet X Info Consolidators X Genetics & Devices = YIKES! 1. Consumerism centric Healthcare) (Patient- “A seismic shift is underway in healthcare. The Internet is delivering vast knowledge and new choices to consumers—raising their expectations and, in many cases, handing them the controls. [Healthcare] consumers are driving radical, fundamental change.” Deloitte Research, “Winning the Loyalty of the eHealth Consumer” “Teens and young adults are flocking to the Web for health-related information as much as they are downloading music and playing games online and more often than shopping online, according to a national survey from the Kaiser Family Foundation.” Reuters (12.11.01): Consumer Imperatives Choice Control (Self-care, Self-management) Shared Medical Decision-making Customer Service Information Branding Source: Institute for the Future “Consumerism”: HMO backlash (e.g., plans with more choice). Alternative Medicine, Wellness & Prevention. Info availability (disease, health, docs, support groups, outcomes). Self-care (chronic disease). High expectations (genetics, etc.). Boomers (see below). … “Savior for the Sick” vs. “Partner for Good Health” Source: NPR/VPR 08.15.00 “He shook me up. He put his hand on my shoulder, and simply said, ‘Old friend, you have got to take charge of your own medical care.’ ” Hamilton Jordan, No Such Thing as a Bad Day (on a conversation with a doctor pal, following Jordan’s cancer diagnosis) 2. Demographics: The BOOMERS Reach 55! Boomer World “From jogging to plastic surgery, from vegetarian diets to Viagra, they are fighting to preserve their youth and defy the effects of gravity.” M.W.C. Howgill, “Healthcare Consumerism, the Information Revolution and Branding” Message Boomer: (1) “There are l-o-t-s of us.” (2) “We have the $$$$$$. (3) “We’re/I’m in charge!” (4) “We’ll take no guff from anyone.” (5) “We know the emperor has no clothes.” 3. The IS/Web REVOLUTION “We’re in the Internet age, and the average patient can’t email their doctor.” Donald Berwick, Harvard Med School “In an era when terrorists use satellite phones and encrypted email, US gatekeepers stand armed against them with pencils and paperwork, and archaic computer systems that don’t talk to each other.” Boston Globe (09.30.2001) “Once devised in Riyadh, the tasking order took hours to get to the Navy’s six aircraft carriers—because the Navy had failed years earlier to procure the proper communications gear that would have connected the Navy with its Air Force counterparts. … To compensate for the lack of communications capability, the Navy was forced to fly a daily cargo mission from the Persian Gulf and Red Sea to Riyadh in order to pick up a computer printout of the air mission tasking order, then fly back to the carriers, run photocopy machines at full tilt, and distribute the documents to the air wing squadrons that were planning the next strike.” –Bill Owens, Lifting the Fog of War “By combining powerful computer technology and other modern information-based systems we could make a revitalized, leaner military force that is designed to outsee, outmaneuver and outfight any foe.” --Bill Owens, Lifting the Fog of War “Without being disrespectful, I consider the U.S. healthcare delivery system the largest cottage industry in the world. There are virtually no performance measurements and no standards. Trying to measure performance … is the next revolution in healthcare.” Richard Huber, former CEO, Aetna “As unsettling as the prevalence of inappropriate care is the enormous amount of what can only be called ignorant care. A surprising 85% of everyday medical treatments have never been scientifically validated. … For instance, when family practitioners in Washington were queried about treating a simple urinary tract infection, 82 physicians came up with an extraordinary 137 strategies.” Demanding Medical Excellence: Doctors and Accountability in the Information Age, Michael Millenson “In health care, geography is destiny.” Dartmouth Medical School 1996 report, from Demanding Medical Excellence: Doctors and Accountability in the Information Age, Michael Millenson Geography Is Destiny E.g.: Ft. Myers 4X Manhattan—back surgery. Newark 2X New Haven— prostatectomy. Rapid City SD 34X Elyria OH—breast-conserving surgery. VT, ME, IA: 3X differences in hysterectomy by age 70; 8X tonsillectomy; 4X prostatectomy (10X Baton Rouge vs. Binghampton). Breast cancer screening: 4X NE, FL, MI vs. SE, SW. (Source: various) Geography Is Destiny “Often all one must do to acquire a disease is to enter a country where a disease is recognized—leaving the country will either cure the malady or turn it into something else. … Blood pressure considered treatably high in the United States might be considered normal in England; and the low blood pressure treated with 85 drugs as well as hydrotherapy and spa treatments in Germany would entitle its sufferer to lower life insurance rates in the United States.” – Lynn Payer, Medicine & Culture “Practice variation is not caused by ‘bad’ or ‘ignorant’ doctors. Rather, it is a natural consequence of a system that systematically tracks neither its processes nor its outcomes, preferring to presume that good facilities, good intentions and good training lead automatically to good results. Providers remain more comfortable with the habits of a guild, where each craftsman trusts his fellows, than with the demands of the information age.” Michael Millenson, Demanding Medical Excellence CDC 1998: 90,000 killed and 2,000,000 injured from nosocomial [hospital-caused] drug errors & infections “Quality of care is the problem, not managed care.” Institute of Medicine (from Michael Millenson, Demanding Medical Excellence) RAND (1998): 50%, appropriate preventive care. 60%, recommended treatment, per medical studies, for chronic conditions. 20%, chronic care treatment that is wrong. 30% acute care treatment that is wrong. “In a disturbing 1991 study, 110 nurses of varying experience levels took a written test of their ability to calculate medication doses. Eight out of 10 made calculation mistakes at least 10% of the time, while four out of 10 made mistakes 30 % of the time.” Demanding Medical Excellence: Doctors and Accountability in the Information Age, Michael Millenson The EMS Myth “Speed has never saved anybody’s life. Period.”—W.H. Leonard, Medical Transportation Insurance Professionals Source: USA Today (03.21.02) 1,000,000 “serious medication errors per year” … “illegible handwriting, misplaced decimal points, and missed drug interactions and allergies.” Source: Wall Street Journal/ Institute of Medicine Answer: (1) Physician order-entry system, (2) stick to treatment guidelines for high-risk patients, (3) adequate ICU staffing. The perils/costs of folk wisdom: Pills vs. IV/$100. Per use. “Patient by patient, problem by problem—drug reactions, hospital caused infections—Salt Lake City’s LDS Hospital has attacked treatmentcaused injuries and deaths. One of the secrets of LDS’s success is a custombuilt clinical computer system that may serve as a national model for how to save patient lives.” Demanding Medical Excellence: Doctors and Accountability in the Information Age, Michael Millenson The VHA gets it! E.g.: Laptop at bedside calls up patient e-records from one of 1,300 hospitals. Barcoded wristband confirms meds. National Center for Patient Safety in Ann Arbor. Docs and researchers discuss optimal treatment regimens—research center in Durham NC. Doc measures & guidelines; e.g., pneumonia vaccinations from 50% to 84%. Blamefree system, modeled after airlines. “What’s needed in the U.S. is nothing short of a medical revolution and the VHA has gone further than most any other organization to revamp its culture and systems.”— Rand/Source:WSJ 12.10.2001 “Our entire facility is digital. No paper, no film, no medical records. Nothing. And it’s all integrated—from the lab to Xray to records to physician order entry.”—David Veillette, CEO. Indiana Heart Hospital (Healthleaders/12.2002) “When a plane crashes, they ask, ‘What happened?’ In medicine they ask: ‘Whose fault was it?’ ”—James Bagian, M.D. & former astronaut, now working with the VHA. Winning By Acknowledging Failures Wernher Von Braun, the Redstone missile engineer who “confessed” & the bottle of champagne. Award to the sailor on the Carl Vinson—for reporting the lost tool. Amy Edmonson & the successful nursing units with the highest reported adverse drug events. Source: Karl Weick & Kathleen Sutcliffe, Managing the Unexpected 4. Information Consolidators: The Network Maestros “America has twice as many hospitals and physicians as it needs.” Med Inc., Sandy Lutz, Woodrin Grossman & John Bigalke Specialty! “Without having nearly the infrastructure costs or the labor costs that a larger organization has to deal with, we can be more profitable. We can turn patients quicker, and we can have shorter lengths of stay with equal to or better outcomes.”—David Veillette, CEO. Indiana Heart Hospital (Healthleaders/12.2002) “The future of hospitals is murky. A combination of technological advances, managed care, and changes in Medicare reimbursement policy means that the underlying demand for inpatient services will continue to fall.” Institute for the Future “Virtual health care webs force providers to focus on their areas of excellence and to invest in areas where they can generate a sustainable competitive advantage.” Healthcare.com: Rx for Reform, David Friend, Watson Wyatt Worldwide WebMD & assigns) (or heirs 5. Genetics & Devices “Recognizing that a single misspelled gene means the difference between being poisoned and being cured was the first victory for the new science of pharmacogenetics.” Newsweek (06.25.01) Genetic data: 2X every 6 months. Source: FT, 11.27.2001 “Pharmacogenomics could fundamentally change the nature of drug discovery and marketing, rendering obsolete the pharmaceutical industry’s practice of spending vast amounts of time and money to craft a single medicine with mass-market appeal.” The Industry Standard (05.28.01) E.g., Genentech’s Herceptin, useful in 25% of advanced breast cancer cases. Would probably have been uneconomic if subjected to 9X patients in phase III clinical trials. Source: FT (11.27.01) 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 home-pregnancy tests.” “You can’t look at humanity separate from machines; we’re so intertwined we’re almost the same species, and the difference is getting smaller.” Pharmacogenomics: End of Blockbusters by End-of-Decade (Reuters/5-22) Barrie James, Pharma Strategy Consulting: “We’re moving from a blunderbuss approach to laserguided munitions, and it marks a sea change for the industry. The implications for existing business models are devastating.” Allen Roses, SVP Genetic Research, GlaxoSmithKline: “minibuster.” Rob Arnold, Euro head of life sciences, PWC: “Once you start dealing with minority treatments, small biotechs who are more nimble and don’t need $500-million-a-year drugs to make money could be at a real advantage.” “BIG DRUG MAKERS TRY TO POSTPONE CUSTOM REGIMENS. Most drugs don’t work well for about half the patients for whom they are prescribed, and experts believe genetic differences are part of the reason. The technology for genetic testing is now in use. But the technique threatens to be so disruptive to the business of big drug companies – it could limit the market for some of their blockbuster products – that many of them are resisting its widespread use.” The Wall Street Journal (06.18.2001) Forbes100 from 1917 to 1987: 39 members of the Class of ’17 were alive in ’87; 18 are in ’87 F100; the 18 F100 “survivors” underperformed the market by 20%; just 2 (2%), GE & Kodak, outperformed the market from 1917 to 1987. Source: Dick Foster & Sarah Kaplan, Creative Destruction: Why Companies That Are Built to Last Underperform the Market Biotechs: Amgen, Genentech, Biogen, Genzyme, Celltech, ImClone Systems. Bioinformatics: Accelrys, Cognia, Double Twist, IBM Lifesciences, NetGenics, SAS Institute. “Imagine the day that your surgeon performs your heart bypass sitting at a computer thousands of miles from the operating table. That day may come sooner than you think.” Newsweek (06.25.01) “There is no question in my mind that the future of heart surgery is in robotics.” Dr. Robert Michler, OSU Med Center, upon the FDA’s approval of robotic partialbypass surgery Golden Age of Patient-centric, Geneticsdriven Healthcare Looms! Current status: $1.3T. 30M-70M uninsured. 90K killed and 2M injured p.a. in hospitals. 85% treatments unproven. Cure depends on locale in which treated. 50% prescriptions do not work. 2X docs. 2X hospitals. IS primitive. Accountability & measurement nil. And everybody’s mad and feels powerless: docs, patients, nurses, insurers, employers, hospitals administrators and staff. Message: (1) An unparalleled time imagination for and bold action. (2) A time of unprecedented opportunities. (3) A time of unprecedented risk. HealthCare 21 HealthCare21: 21 Ideas for Century21 1. Hospitals kill people. (And many of those they don’t kill, they wound.) (And they deny it.) (ERRORS RULE!) And: Hustling ambulances kill pedestrians—and don’t save patients. 2. Doctors are spoiled brats—who don’t like measurements. Or any form of “interference.” Docs are also cover-up artists. The REAL Hippocratic Oath: “DON’T RAT ON A FELLOW DOC”. 3. Most prescription drugs don’t work—for a PARTICULAR patient. Current drugs = Blunderbusses. 4. Think … WELLNESS. Think … PREVENTION. 5. THERE IS LITTLE “SCIENCE” IN “MEDICINE.” (See state to state variations … country to country variations … the general lack of agreed upon treatments.) 6. You could save thousands of lives (think Schlindler)—if you just outlawed handwritten prescriptions. 7. “Detailers” will disappear … when GenX docs arrive. HealthCare21 (Cont.) 8. IS/IT in hospitals is sub-primitive (despite enormous expenditures). 9. Systemic IS/IT is worse—links between docs, insurers, providers, patients. 10. ELECTRONIC MEDICAL RECORDS …TO UNIFORM STANDARDS. (NOW.) (PLEASE.) 11. THE WEB WILL LIBERATE. (Info = Power.) (BELIEVE IT.) 12. 80M BOOMERS RULE. ($$$$$. Desire for c-o-m-p-l-e-t-e CONTROL. NOW. “LEADERSHIP” OF AGING PROCESS.) 13. “Drug Discovery” processes at Big Pharma are … hopelessly over-complicated. (???: Bye Bye … Big Pharma.) 14. 90% of the “healthcare fix”: HARVEST THE LOW-HANGING FRUIT. “They” are … NOT … the Enemy. “I have seen the enemy … and it am me.” Damn it. HealthCare21 (Cont.) 15. The number of U.S. un-insured is the nation’s #1 disgrace. That said, insured “consumers” are spoiled brats. They/we/me act as if healthcare were a free good … and believe that an incipient hangnail calls for at least a CAT scan … or two. ANSWER: MAKE US FEEL THE PAIN. 16. Genetic engineering & biotech change … EVERYTHING. (Within 15 years.) 17. New Medical Devices change … EVERYTHING. (Within 15 years.) 18. IS/IT changes … EVERYTHING. (Within 10 years.) 19. New Docs change … EVERYTHING. (Within 10 years.) 20. New Patients change … EVERYTHING. (Within 5 years.) * * HealthCare21 (Cont.) ALL THIS = ENORMOUS OPPORTUNITY. 21. The Opportunity of Several Lifetimes. (For the Bold & Brave.) H’Care WILL be … TOTALLY … re-invented in the next two decades. (And, hey, it is our largest “industry.”) 24. RevGov: Re-inventing Government. WE NEED … IDEAS! Uncertainty: We don’t know when things will get back to normal. We no longer know what “normal” means. Ambiguity: BMcC: (1) Hierarchy vs. “Network organization.” (2) NWO = “Doctrine as center of gravity”/source of motivation; distributed support & decisionmaking;largely self-organizing; “outside the military sphere.” “Our military structure today is essentially one developed and designed by Napoleon.” Admiral Bill Owens, former Vice Chairman, Joint Chiefs of Staff “In an era when terrorists use satellite US gatekeepers stand armed against them with pencils and paperwork, and archaic computer systems that don’t talk to each other.” phones and encrypted email, Boston Globe (09.30.2001) From: To: Weapon v. Weapon Org structure v. Org structure Ideas > Leadership NO: “Good gov’t” YES: EFFECTIVE Gov’t (in altered/ambiguous times) A Plea for “virtual [RESPONSIVE] government” WALLS MUST FALL! The W.O.G. (Work-of- Insta/ Targeted WPTs Government): (WOW Project Teams ) (B.H.A.G.) (with clout) Experiments rule! Failures rule! Talent matters! New Heroes/ Hall of Fame IS/IT to the Max! Streamlined procurement (esp. IS/IT) Bill Owens … Lifting the Fog of War Case: “The 1990s was a decade of multiple revolutions—political, economic, technological— that changed so thoroughly the way we live that the past no longer seems a good guide to the future (in fact the past seems precisely the wrong guide). So it is in the world of military affairs. The RMA is our opportunity to use the new information technology to change the very nature of the military—in a way that could reinvigorate American political, diplomatic and economic leadership in the world for decades to come.” –Bill Owens, Lifting the Fog of War “Our military is very good at doing things as they are supposed to be done, but it is not always good at changing the way things ought to be done. Highly professional militaries can be very good at maintaining the institution’s traditions, mores and cultures in the face of rapid and important change. … Equating professionalism with automatically defending the status quo can be disastrous. This is the mindset that drives service loyalties toward narrow parochialism, and congeals organizations into brittle shells. We end up ignoring opportunities that could actually offer higher military effectiveness.” –Bill Owens, Lifting the Fog of War “How dare you. If you don’t support us, our opponents will take advantage and use this to cut the force.” –CNO staffer [Flag officer] to Bill Owens, Fleet Commander th 6 “Mike [Boorda’s] self-avowed priority was to preserve and protect the size, budget and structure of the U.S. Navy—his Navy— irrespective of any other consideration— because he deeply believed that the Navy was the core of America’s military capability. My view over the years had shifted toward the conviction that we in the Navy need to implement major changes in order to become more joint—to work better and more closely with the other services.” –Bill Owens, Lifting the Fog of War “Many flaws remained—flaws not from poor performance, but from an ingrained command hierarchy and an outmoded concept of war that had taken root during World War II and then during the cold war. Desert Storm was a joint military operation in name rather than in fact. … The battlefield was divided among service components. … The fiefdoms existed not only because of tradition, service rivalry and the egos of the commanders; they were also there because of technological limitations. We did not have the communications capability to do it differently.” –Bill Owens, Lifting the Fog of War “Once devised in Riyadh, the tasking order took hours to get to the Navy’s six aircraft carriers—because the Navy had failed years earlier to procure the proper communications gear that would have connected the Navy with its Air Force counterparts. … To compensate for the lack of communications capability, the Navy was forced to fly a daily cargo mission from the Persian Gulf and Red Sea to Riyadh in order to pick up a computer printout of the air mission tasking order, then fly back to the carriers, run photocopy machines at full tilt, and distribute the documents to the air wing squadrons that were planning the next strike.” –Bill Owens, Lifting the Fog of War “By combining powerful computer technology and other modern information-based systems we could make a revitalized, leaner military force that is designed to outsee, outmaneuver and outfight any foe.” --Bill Owens, Lifting the Fog of War RMA: (1) Battlespace awareness. (2) C4I. (Command, control, communications, computers & (3) Precision force use. intelligence.) “[The RMA] means creating a synergy in new weapons, sensors and communications that is made possible by the successful melding of the technological applications with an informationage military organization.” –Bill Owens, Lifting the Fog of War “In the second half of the twentieth century a new society of individuals emerged—a breed of people unlike any the world has ever seen. Educated, informed, traveled, they work with their brains, not their bodies. They do not assume that their lives can be patterned after their parents’ or grandparents’. Throughout human history, the problem of identity was settled in one way—I am my mother’s daughter; I am my father's son. But in a discontinuous and irreversible break with the past, today’s individuals seek the experiences and insights that enable them to find the elusive pattern in the stone, the singular pattern that is ‘me.’” —Shoshana Zuboff & James Maxmin, The Support Economy “If you don’t like change, you’re going to like irrelevance even less.” —General Eric Shinseki, Chief of Staff, U. S. Army Old: Heavy. Seek direct contact. New: Stryker brigade. Stealth. Avoid direct contact—“choose your moment.” “Depend heavily on information technology, and enhanced intelligence, surveillance and reconnaissance capabilities.” Source: “A Different War,” Peter Boyer (The New Yorker/07.01.2002) “Substituting information for armor is a disconcerting notion to a tank soldier. … Soldiers will learn that battle field awareness can be as comforting as armor.” Source: “A Different War,” Peter Boyer (The New Yorker/07.01.2002) From “Tank” to Future Combat System (e.g., “virtual tank”) Analogous to switch from “circuit breaker makers” to GE Industrial Systems, or “guys in brown trucks” to “Let Brown do it.” Source: “A Different War,” Peter Boyer (The New Yorker/07.01.2002) VIII. NEW BUSINESS. NEW MARKETS. 25. Trends I: Women Roar. Women & the Marketspace. ????????? Home Furnishings … 94% Vacations … 92% (Adventure Travel … 70%/ $55B travel equipment) Houses … 91% D.I.Y. (“home projects”) … 80% Consumer Electronics … 51% Cars … 60% (90%) All consumer purchases … 83% Bank Account … 89% 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 $4.8T > Japan 9M/27.5M/$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 2000-2010 55-64: 48%; 25-54: 2% 65+/2001: M, 14.6M; F, 20.5M Source: Martha Barletta, Marketing to Women New golfers … 37% Basketball … 13.5M 1 in 27 (’70) … 1 in 3 (’96) 1874 … Jock Strap 1977 … Jogbra 1977 ... 25K 1996 … 42 M Yeow! 1970 … 1% 2002 … 50% OPPORTUNITY NO. 1!* [* No shit!] 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 Men: Individual perspective. “Core unit is ‘me.’ ” Pride in self-reliance. Women: Group perspective. “Core unit is ‘we.’ ” Pride in team accomplishment. Source: Martha Barletta, Marketing to Women 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!) “Shopping: A Guy’s Nightmare or a Girl’s Dream Come True?” “Buy it and be gone” vs. “Hang out and enjoy the experience” Source: The Charleston [WV] Gazette/06.22.2002 Antaun Hughes, Capital High School, “Women enjoy going through the actual process of everything, while guys like to get straight to the point.” on M-F shopping habits: Source: The Charleston [WV] Gazette 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 “It is obvious to a woman when another woman is upset, while a man generally has to physically witness tears or a temper tantrum or be slapped in the face before he even has a clue that anything is going on. Like most female mammals, women are equipped with far more finely tuned sensory skills than men.” Barbara & Allan Pease, 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 Barbara & Allan Pease, Why Men Don’t Listen & Women Can’t Read Maps: Women love to talk. Men talk silently to themselves. Women think aloud. Women talk, men feel nagged. Women multitask. Women are indirect. Men are direct. Women talk emotively, men are literal. Men listen like statues. Boys like things, girls like people. Boys compete, girls cooperate. Men hate to be wrong. Men hide their emotions. “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 We Really … Don’t Get It! Review of “Unfaithful”: “ … the latest entry in the category of male directors’ clueless fantasies concerning what women fantasize about in their nonexistent free time.” Source: Julie Iovine, NYT (05.19.2002) Men & Women on Thelma & Louise. MEN: Sundance Kid; women who get angry, swear, go to bars, leave their mate. WOMEN: women controlled by the men in their lives, who would rather be dead than oppressed. Source: 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 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 [“I only really understand myself, what I’m really thinking and feeling, when I’ve talked it over with my circle of female friends. When days go by without that connection, I feel like a radio playing in an empty room.” Anna Quindlen] Editorial/Men: Tables, rankings.* Editorial/Women: Narratives that cohere.* TP/Furniture: “Tech Specs” vs. “Soul.” ** *Redwood (UK) **High Point furniture mart (04.2002) Initiate Purchase Men: Study “facts & features.” Women: Ask lots of people for input. Source: Martha Barletta, Marketing to Women Storytelling: Men start with the headline. Women start with the context. Source: Martha Barletta, Marketing to Women Tomboy Tools. E.g.: smaller, lighter in weight. Tupperware “party” model. 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 What If … “What if ExxonMobil or Shell dipped into their credit card database to help commuting women interview and make a choice of car pool partners?” “What if American Express made a concerted effort to connect up female empty-nesters through on-line and off-line programs, geared to help women re-enter the workforce with today’s skills?” EVEolution The New New Jiffy Lube “In the male mold, Jiffy Lube was going all out to deliver quick, efficient service. But, in the female mold, women were being turned off by the ‘let’s get it fixed fast, no conversation required’ experience.” New JL: “Control over her environment. Comfort in the service setting. Trust that her car is being serviced properly. Respect for her intelligence and ability.” EVEolution Lowe’s … Gets it. 1989: 13%/“lumber shop” … 2002: >50% Yes!: “Crest Spinoff Targets Women”—cover story, Ad Age/06.03.02 Crest Rejuvenating Effects. “Chicks in charge” team. $50M launch. Packaging. Taste. Features. “Mattel Sees Untapped Market for Blocks: Little Girls”—Headline, WSJ/04.06.02 “Last year more than 90% of Lego sets purchased were for boys. Mattel says Ello—with interconnecting plastic squares, balls, triangles, squiggles, flowers and sticks, in pastel colors and with rounded corners—will go beyond Lego’s linear play patterns.” “Women don’t buy They join them.” brands. EVEolution 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?” STATEMENT OF PHILOSOPHY: I am a businessperson. An analyst. A pragmatist. The enormous social good of increased women’s power is clear to me; but it is not my bailiwick. My “game” is haranguing business leaders about my fact-based conviction that women’s increasing power – leadership skills and purchasing power – is the strongest and most dynamic force at work in the American economy today. Dare I say it as a long-time Palo Alto resident … THIS IS EVEN BIGGER THAN THE INTERNET! Tom Peters “If we are single, they say we couldn’t catch a man. If we are married, they say we are neglecting him. If we are divorced, they say we couldn’t keep him. If we are widowed, they say we killed him.” Kathleen Brown, on the joys of female political candidacy 27 March 2000: email to TP from Shelley Rae Norbeck “I make 1/3rd more money than my husband does. I have as much financial ‘pull’ in the relationship as he does. I’d say this is also true of most of my women friends. Someone should wake up, smell the coffee and kiss our asses long enough to sell us something! We have money to spend and nobody wants it!” Psssst! Wanna see my “porn” collection? Ass Of The Year2002: Maurice Greenberg, A.I.G., on the Company’s New (All Male) Leadership Team “In a lot of countries of the world, it would be very difficult for a woman to be a good CEO. … I have a responsibility to do the best we can for shareholders.” * ** *Source: New York Times/05.05.02 **Wouldn’t you love to watch him tell that … face-toface … to Margaret Thatcher or Carly Fiorina? (I would.) 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) “Please … just one couch or chair where my feet hit the ground!” —Owner, 5 furniture stores, UK Stupid! Stupid: “Amazing, now that I think about it. A bunch of guys --developers, architects, contractors, engineers, bankers--sitting around designing shopping centers. And the ‘end users’ will be overwhelmingly women!” Instructions: 1. Purchase ticket to symphony … 7:30 p.m. show. 2. Drink three large bottles of water between 3 p.m. and 7 p.m. 3. X-dress. 4. Wait in queue at Ladies at Intermission. 5. Realize what total wretches you are. 6. Seize a microphone and apologize publicly to every woman in the hall. “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) Purchasing Patterns Women: Harder to convince; more loyal once convinced. Men: Snap decision; fickle. Source: Martha Barletta, Marketing to Women 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 JBQ: Stop Treating Women Investors Like Idiots! “Why all this focus on women and our lack of investment guts? A far greater problem, it seems to me, is trigger-happy speculation, mostly by men. The kind of guys whose family savings went south with the dot-coms. Imagine a list of their money mistakes: Shoot from the hip. Overtrade their accounts. Believe they’re smarter than the market. Think with their mouse rather than their brain. Praise their own genius when stocks go up. Hide their mistakes from their wives.” Source: Newsweek 01.08.01 Notes to the CEO --Women are not a “niche”; so get this out of the “Specialty Markets” group. --The competition is starting to catch on. (E.g.: Nike, Nokia, Wachovia, Ford, Harley-Davidson, Jiffy Lube, Charles Schwab, Citigroup, Aetna.) --If you “dip your toes in the water,” what makes you think you’ll get splashy results? --Bust through the walls of the corporate silos. --Once you get her, don’t let her slip away. --Women ARE the long run! Source: Martha Barletta, Marketing to Women 26. Trends 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%) 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 “The Latest Golden –years Trend: Going Back to College” —Headline, Newsweek/06.10.02 Member Growth: 1987 – 1997 18 – 34: 26% 35 – 49: 63% 50+: 118% Source: IHRSA 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 “Households headed by someone 40 or older enjoy 91% ($9.7T) of our population’s net worth. … The mature market is the dominant market in the U.S. economy, making the majority of expenditures in virtually every category.” —Carol Morgan & Doran Levy, Marketing to the Mindset of Boomers and Their Elders “The mature market cannot be dismissed as entrenched in its brand loyalties.” —Carol Morgan & Doran Levy, Marketing to the Mindset of Boomers and Their Elders “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 “Take the Road Less Traveled”—Advertising Age headline re Sony, upon targeting “Zoomers,” the neglected 34% of its customers who are age 50+ Stupid! “ ‘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” Women! Boomers! Design! The Royal Tenenbaums “The New Pillow Talk: Specialty Pillows Are Big Sellers as Achy Boomers Seek Sleep” WSJ (03.22.2002) — Nice Job Title, Frito-Lay! Rebeca Johnson, VP—Ethnic and Urban Marketing 27. Trends III: Green = $$$$$$ “Of all the ways the company will be judged over the next decade, none will be greater than our response to the issue of climate change.” William Clay FORD Jr. 50% to 36%: Protect Environment > Economic Growth. And #3: GREEN?????: 58% to 34%: Protect Plants & Animals > Preserve Private Property Rights. E.g.: Genetically Altered Food Would eat: M, 71%; F, 50% Give to children: M, 59%; F, 37% Pay more for non-altered: M, 35%; F, 47% Source: www.pulse.org & USA Today Three Most Important Upgrades Home Purchasers Consider Energy efficiency/83% Kitchen cabinets/66% Indoor air quality/50% Source: Professional Builder “The U.S. building and construction industry reinvest only about 1 percent of their revenue in R & D, compared to 10 to 20 times that for cutting edge industries like electronics and pharmaceuticals. No wonder their techniques and materials are so antediluvian.” —Paul Hawken et al., Natural Capitalism No: “Target Marketing” Yes: “Target Innovation” & “Target Delivery Systems” Women’s [Aging,Green] Market: Why Tough Encompassing Attitude CULTURAL! “Of all the ways the company will be judged over the next decade, none will be greater than our response to the issue of climate change.” William Clay FORD Jr. No: “Target Marketing” Yes: “Target Innovation” & “Target Delivery Systems” 28. Trends IV: Think Global! THE EIGHT “RULES” Rule #1 There’s no such thing as “too small to be global.” [GET A LIFE.] Rule #2 If “it” is [truly] good … then it’s good enough for … THE WORLD. Rule # 3 When? Now. Rule #4 Hang out … vigorously! Rule #5 Seek Talent! Send Talent! Message(s) ABB, Shell ELITE Global Cadre Genuinely Global BOARD Rule #6 Glom onto a [modest-sized] partner … who loves/ “gets” you! Rule #7 Tailor!! [But don’t give away the store.] Rule #8 Phil Crosby notwithstanding, you’ll not [likely] “get it right the first time”! IX. NEW BUSINESS. NEW LEADERSHIP. 29. The Passion Imperative: Leadership The The Basic Premise. 1. Leadership Is a … Mutual Discovery Process. “I don’t know.” Leaders-Teachers Do Not “Transform People”! Instead leaders-mentors-teachers (1) provide a context which is marked by (2) access to a luxuriant portfolio of meaningful opportunities (projects) which (3) allow people to fully (and safely, mostly—caveat: “they” don’t engage unless they’re “mad about something”) express their innate curiosity and (4) engage in a vigorous discovery voyage (alone and in small teams, assisted by an extensive self-constructed network) by which those people (5) go to-create places they (and their mentors-teachersleaders) had never dreamed existed—and then the leaders-mentors-teachers (6) applaud like hell, stage “photo-ops,” and ring the church bells 100 times to commemorate the bravery of their “followers’ ” explorations! 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. 25/8/53* (*Damn it!) 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. 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. 33 Division Titles. 26 League Pennants. 14 World Series: Earl Weaver—0. Tom Kelly—0. Jim Leyland—0. Walter Alston—1AB. Tony LaRussa—132 games, 6 seasons. Tommy Lasorda—P, 26 games. Sparky Anderson—1 season. The Leadership Dance. 8. Leaders … SHOW UP! P.S. … 5,000 miles for a 5 min. meeting! Mark McCormack: 9. Leaders … LOVE the MESS! “I’m not comfortable unless I’m uncomfortable.” —Jay Chiat “If things seem under control, you’re just not going fast enough.” Mario Andretti 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!) 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 “When assessing candidates, the first thing I looked for was energy and enthusiasm for execution. Does she talk about the thrill of getting things done, the obstacles overcome, the role her people played—or does she keep wandering back to strategy or philosophy?” —Larry Bossidy, Honeywell/AlliedSignal, in Execution 15. BUT … Leaders Are Realists/Leaders Win Through LOGISTICS! The “Gus Imperative”! 16. Leaders FOCUS! “To Don’t ” List 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?” It’s Relationships, Stupid. 19. Leaders Trust in TRUST! Credibility $1.00 for “competence.” $249.00 for “attitude”/ “honesty.” Bonus/TP: If It Ain’t Broke … Break It. 20. Leaders … FORGET!/ Leaders … DESTROY! Cortez! Leaders “dump the ones who brung ’em” —Nokia, HP, 3M, PerkinElmer, Corning, etc. “WCW Monday Nitro was our top rated show by more than double anything else [and the top rated show on basic cable], and we dumped it! Can you name another network that dropped its top-rated show? I don’t know if consumers noticed, but it said everything to our staff.”—Scot Safon, on the successful reinvention of TNT to embody its new vision, “TNT: We know drama.” 21. 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) 22. Leaders … HONOR THE USURPERS. Saviors-in-Waiting Disgruntled Customers Upstart Competitors Rogue Employees Fringe Suppliers Wayne Burkan, Wide Angle Vision WE BECOME WHO WE HANG WITH! Leaders know … 23. Leaders Make [Lotsa] Mistakes – and MAKE NO BONES ABOUT IT! “Fail faster. Succeed sooner.” David Kelley/IDEO “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) 24. Leaders Make … BIG MISTAKES! “Reward excellent failures. Punish mediocre successes.” Phil Daniels, Sydney exec (and, de facto, Jack) Create. 25. 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.” “They [consumer goods company] have acquired a bunch of products, which is what everyone is doing. But what’s the point, the message, the story line, the Big Idea that makes ‘it’ all hang together?” —Exec, major consumer goods company “I never, ever thought of myself I was interested in creating things I would be proud of.” —Richard Branson as a businessman. 26. Leaders Pursue DRAMATIC DIFFERENCE! 1st Law Mktg Physics: OVERT BENEFIT (Focus: 1 or 2 > 3 or 4/“One Great Thing.” Source #1: Personal Passion) 2ND Law: REAL REASON TO BELIEVE (Stand & Deliver!) 3RD Law: DRAMATIC DIFFERENCE (Execs Don’t Get It: “intent to purchase” – 100%; “unique” – 0% to 5%) Source: Jump Start Your Business Brain, Doug Hall 26A. 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. Legacy! Herman Edwards: “I picked up one of those Jets books and I told them, ‘What you do as a football team is your legacy. When you’re 80 years old, what you’ve done will be in this book and no one can take that away from you. Your grandkids, your kids after that, they will know what you did. It’s about leaving your name in stone.” Source: The New York Times (12.31.02) COL Richard Hallock (to incoming SECDEF James Schlesinger): “You must understand that if you want to leave a legacy it is vital for you to make a quick decision about what you want the legacy to be … because after several months you become so caught up in the business of the Pentagon, so overwhelmed, that it will be too late. Pick a few projects and put the full weight of the office behind them. Guide the projects. Nurture them. Know from the very beginning that this will be your legacy. Force them through the bureaucracy.” BOYD: The Fighter Pilot Who Changed the Art of War (Robert Coram) TP’s least favorite term: “Stewardship”* *I want to have “exploited” resources, not “conserved” resources 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’?” Ideas > Leadership “Today the problem is not how to produce more to sell more. The fundamental question is that of the product’s right to exist. And it is the designer’s right and duty to question the legitimacy of the product.” Philippe Starck 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. TP’s least favorite term: “Stewardship”* *I want to have “exploited” resources, not “conserved” resources 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’?” NO: “Good gov’t” YES: EFFECTIVE Gov’t (in altered/ambiguous times) “By combining powerful computer technology and other modern information-based systems we could make a revitalized, leaner military force that is designed to outsee, outmaneuver and outfight any foe.” --Bill Owens, Lifting the Fog of War 27. 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! 28. Leaders LOVE the New Technology! square feet 29. 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. 30. When It Comes to TALENT … Leaders Always Swing for the Fences! Message: Some people are better than other people. Some people are a helluva lot better than other people. 31. Leaders “Manage” Their EVP/Internal Brand Promise. MantraM3 Talent = Brand 32. Leaders LOVE RAINBOWS – for Pragmatic Reasons. “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 mix-and-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 Passion. 33. 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 “A winning attitude takes a lot of hard, It begins with an assumption that we do have a choice, we can make a difference among others and within ourselves.”—James Cramer, The Greenway honest work. Group & former CEO of the AIA 34. Leaders Know: ENTHUSIASM BEGETS ENTHUSIASM! BZ: “I am a … Dispenser of Enthusiasm!” 34A. Leaders Are … in a Hurry The Urgency Factor: LEADERS … have a distorted sense of time. (E.g.: Rummy thinks he asked months ago … it was the day before yesterday.) 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 references were there; the But there was no fire, no foot halfway over the starting line eager to sprint down the track to success.”—James Cramer, The Greenway portfolio was dazzling. Group & former CEO of the AIA (on the rejection of a “famous firm”) The “Job” of Leading. 36. Leaders Know It’s ALL SALES ALL THE TIME. 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 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 “Find something small that you can turn around. If you’re on a 9game losing streak, you need to start with one great inning.”—Rudy 43. Leaders … Are The Brand The BRAND lives (OR DIES) in the “minutiae” of the leader’s momentto-moment actions. 44. Leaders … GREAT STORY! Have a Leaders don’t just make products and make decisions. Leaders make meaning. – John Seeley Brown Introspection. 45. Leaders … Enjoy Leading. “Warren, I know you want to ‘be’ president. But do you want to ‘do’ president?” “[Bertelsman’s Reinhard] Mohn wasn’t a creative type. What got him juiced was the art of running an organization and motivating the people who work there.” —Fortune/05.27.2002 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 ???: “Hire smart – go bonkers – have grace – make mistakes – love technology – start all over again.” “LEADERS NEED TO BE THE ROCK OF GIBRALTAR ON ROLLER BLADES” 50. Leaders Know WHEN TO LEAVE! XI. NEW BUSINESS. NEW RULES. 30. Tom’s 60TIBs* *TIB = This I Believe 1. TECHNICOLOR RULES! (Passion Moves Mountains!) 2. Audacity Matters! 3. Revolution Now! 4. Question Authority! (& Hire Disrespectful People.) 5. Disorganization Wins! (LOVE THE MESS!) 6. Think 3M: Markets Matter Most. ONLY EXTREME COMPETITION STAVES OFF STALENESS. (You can take the boy out of Silicon Valley, but you can’t take Silicon Valley out of the boy!) 7. Three Hearty Cheers for Weirdos. (Bill Gates, Steve Jobs, Larry Ellison, Scott McNealy, Craig Venter et al.) 8. Message 2003: Technology Change (Info-sciences, Biosciences) Is in Its Infancy! (WE AIN’T SEEN NOTHIN’ YET!) 9. Everything Is Up For Grabs! Volatility Is Thy Name! (Forever & Ever. Amen.) RE-INVENT … OR DIE! 10. Big Sucks. (Mostly.) (VERY Mostly.) 11. “Permanence” Is a Snare & a Delusion. (Forget “Built to Last.” It’s Yesterday’s Idea.) 12. Kaizen” (Continuous Improvement) Is … Dangerous. 13. DESTRUCTION RULES! 14. Forget It! (“Learning” = Easy. “Forgetting” = Nigh on Impossible.) 15. Innovation Is Easy: Hang Out with Freaks. (Employees, Board Members, Customers, Suppliers, Alliance Partners, Consultants.) 16. Boring Begets Boring. (Cool Begets Cool.) 17. Think “Portfolio.” (We’re All V.C.s.) 18. Perception Is All There Is. (“Insiders” … ALWAYS … overestimate the Radicalism of What They’re Up To.) 19. Action … ALWAYS … Takes Precedence. Think: R.F!A./Ready. Fire! Aim. (REWARD SUCCESS. REWARD FAILURE. PUNISH … INACTION.) 20. He Who Makes & Tests the Quickest & Coolest Prototypes Reigns! 21. Haste Makes Waste. (SO GO WASTE!) 22. Screwups are … the … Mark of Excellence. (“Do It Right the First Time” Is a Very Stupid Idea.) 23. Play Hard! Play Now! (Cherish Play!) 24. TALENT TIME! (He/She Who Has the Best “Roster” Rules!) 25. Re-do Education. Totally. (FOSTER CREATIVITY … NOT UNIFORMITY.) (THE NOISIEST CLASSROOM WINS.) 26. Diversity’s Hour Is Now! 27. SHE … Is the Best Leader! 28. MARKETING MANTRA: Embrace the “BIG THREE” Demographics. (1) SHE … is the Customer. (For everything.) (2) Rapidly Aging Boomers Have … ALL THE MONEY. (3) Green … Matters. (TRILLIONS OF $$$$$ Are at Stake.) (NOBODY … Gets It.) (Mere “Programs” Will Not Suffice.) 29. Re-boot Healthcare. (UNDERSTATEMENT.) 30. WHAT ARE WE SELLING? “Experiences” & “Solutions” > “Quality” & “Satisfaction.” (The Traditional Value-added Equation Is Being Set on Its Ear.) 31. DESIGN = New Seat of the Soul. 32. Branding Is for … EVERYONE. He Who Has the … BEST STORY … Takes Home the Marbles. 33. DRAMATIC DIFFERENCE = Only Difference. 34. WORDS/Language Matters … a Lot. (E.g.: Three Hearty Cheers for “Wow”!) 35. WHAT MATTERS IS STUFF THAT MATTERS. (Query #1: “Are You Proud of It?”) 36. eALL. (IS/IT: Half-way = No Way.) 37. DREAM … Big! DREAM … Enormous. DREAM … Gargantuan. (These Are XXXL Times.) 38. THINK MIKE! (Michelangelo: “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.”) 39. There Is Only … ONE BIG ISSUE. Crossfunctional Communication. 40. Stop Doing Dumb Shit. (SYSTEMATIZE THE PROCESS OF “UN-DUMBING.”) 41. Beautiful Systems Are … BEAUTIFUL. 42. The … WHITE-COLLAR REVOLUTION … Will Devour Everything in Its Path. 43. Take Charge of Your Destiny! BrandYou Moment! DISTINCT … OR EXTINCT! 44. “Powerlessness” Is a State of Mind! Think: King. Gandhi. De Gaulle. 45. Pursue Adventure … in Every Task. 46. EXCELLENCE … Is a State of Mind. (Excellence Takes a Minute.) (No Bull.) 47. SHOW UP! (If You Care, You’re There.) 48. YOUR CALENDAR KNOWS ALL. (You = Calendar.) (Mind Your “TO DON’T” List.) 49. LIFE IS SALES. (The Rest Is Details.) 50. Boss Mantra #1: “I DON’T KNOW.” (“I Don’t Know” = Permission to Explore.) 51. Management Role 1: GET OUT OF THE WAY. (Clear the Way.) (“Manager” = Hurdle Removal Professional.) 52. Epitaph from Hell: “He Woulda Done Some Truly Cool Stuff … But His Boss Wouldn’t Let Him.” 53. Change Takes However Long You Think It Takes. (Eschew … “Incrementalism.”) 54. Respect! (Rule 1: Don’t Belittle!) 55. “Thank You” Trumps All! 56. Integrity Matters! Integrity = Credibility. (Dennis K. Is a Jerk.) 57. SOFT IS HARD. HARD IS SOFT. (Numbers Are Soft. People Are Not.) 58. Try Sunny! (Sunny Begets Sunny. Gloomy Begets Gloomy.) 59. DISPENSE ENTHUSIASM! 60. FUN …Is Not a 4-Letter Word. So, too … JOY. (And … GRACE.) Have you changed civilization today? Source: HP banner ad Thank You