Transcript Tom Peters’ EXCELLENCE. ALWAYS. Hexaware.Phoenix.29September2006 Slides at … tompeters.com “I am often asked by would-be entrepreneurs seeking escape from life within huge corporate structures, ‘How do.

Tom Peters’
EXCELLENCE.
ALWAYS.
Hexaware.Phoenix.29September2006
Slides at …
tompeters.com
“I am often asked by would-be entrepreneurs
seeking escape from life within huge corporate
structures, ‘How do I build a small firm for
Buy
a very large one
and just wait.”
myself?’ The answer seems obvious:
—Paul Ormerod, Why Most Things Fail:
Evolution, Extinction and Economics
“Forbes100” from 1917 to 1987: 39
members of the Class of ’17 were alive
in ’87; 18 in ’87 F100; 18 F100
“survivors” significantly
underperformed the market;
2
just
(2%), GE & Kodak,
outperformed the market from
1917 to 1987.
S&P 500 from 1957 to 1997:
’97;
74 members of the Class of ’57 were alive in
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
Welcome to the “Club of Shattered Dreams”:
Of Korea’s Top 100 companies
in 1955, only 7 were still on
the list in 2004. The 1997 crisis
“destroyed half of Korea’s
30 largest conglomerates.”
Source: “KET Issue Report,” Kim Jong Nyun (14.05.2005)
“I don’t believe in economies of
You don’t get
better by being
bigger. You get
worse.”
scale.
—Dick Kovacevich/Wells Fargo
Scale?
“Microsoft’s Struggle With
Scale”
—Headline, FT, 09.2005
“Troubling
Exits at Microsoft”
—Cover Story, BW, 09.2005
“Too Big to Move Fast?”
—Headline, BW, 09.2005
More than $$$$
R&D
spending,
last 25 years?
“When asked to name just one big
merger that had lived up to
expectations, Leon Cooperman,
former cochairman of Goldman Sachs’
Investment Policy Committee,
I’m sure there
are success stories out
there, but at this
moment I draw a
blank.” —Mark Sirower, The Synergy Trap
answered:
“Not a single company that
qualified as having made a
sustained transformation
ignited its leap with a big
acquisition or merger. Moreover,
comparison companies—those that failed to make a
leap or, if they did, failed to sustain it—often tried to
make themselves great with a
big acquisition or merger. They failed to grasp the
simple truth that while you can buy
your way to growth, you cannot buy your way to
greatness.” —Jim Collins/Time/2004
“Almost every personal friend I have in the world
works on Wall Street. You can buy and sell the
same company six times and everybody makes
but I’m not sure
we’re actually
innovating. … Our challenge is to
money,
take nanotechnology into the future, to do
personalized medicine …” —Jeff Immelt/2005
“It is not the
strongest of the
species that survives,
nor the most
intelligent, but the
one most responsive
to change.”
—Charles Darwin
“It is generally much easier to
organization
kill an
than change it
substantially.”
—Kevin Kelly, Out of Control
C.E.O.
to
C.D.O.
A.W.O.L.
BASICS
Franchise Lost!
TP:
“How many of you really
[600]
crave
a new Chevy?”
“Ford, GM and Chrysler
do not just make cars
expensively … they make
bad
cars expensively.”
—Investec analyst, International Herald, 0805.06
Sluggish + Obese +
Unimaginative + More
Sluggish + More Obese +
More Unimaginative + Even
More Sluggish + Even More
Obese + Even More
Unimaginative = NISSAN +
RENAULT + GM = Innovative
Challenger for Toyota????
New Economy?!
Genentech09,
Amgen09
> Merck09
(70K-3/394B-5)
BASICS
K.I.S.S.
People.
Product.
Clients.
Execution.
Enthusiasm.
Excellence.
Sir Richard’s Rules:
Follow your passions.
Keep it simple.
Get the best people to help you.
Re-create yourself.
Play.
Source: Fortune on Branson
People.
Product.
Clients.
Execution.
Enthusiasm.
Excellence.
Relentlessness.
People.
Product.
Clients.
Execution.
Enthusiasm.
Excellence.
Relentlessness.
Senility.
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
“A pattern emphasized in the case studies
in this book is the degree to which powerful
not only resist
innovative threats, but
actually resist all efforts to
understand them, preferring to
competitors
further their positions in older products.
This results in a surge of productivity and
performance that may take the old
technology to unheard of heights. But in
most cases this is a sign of impending
death.”
—Jim Utterback, Mastering the
Dynamics of Innovation
The Perils of Conservatism/Industry Leadership
“ ‘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
EXCELLENCE.
THE WORD.
Synonyms
Purity
Transcendence
Virtue
Elegance
Majesty
Antonyms
Mediocrity
EXCELLENCE.
GAMECHANGER.
Excellence1982: The Bedrock “Eight Basics”
1.
2.
3.
4.
5.
6.
7.
8.
A Bias for Action
Close to the Customer
Autonomy and Entrepreneurship
Productivity Through People
Hands On, Value-Driven
Stick to the Knitting
Simple Form, Lean Staff
Simultaneous Loose-Tight
Properties”
ExIn*: 1982-2002/Forbes.com
DJIA: $10,000 yields $85,000
EI: $10,000 yields $140,050
*Forbes/Excellence Index /Basket of 32 publicly traded stocks
EXCELLENCE.
ASPIRATION.
“Why in the
world did
you go to
Siberia?”
An emotional,
vital, innovative, joyful,
creative, entrepreneurial
endeavor that elicits
maximum concerted human
potential in the
wholehearted service
of others.***
Business* ** (*at its best):
**Excellence. Always.
***Employees, Customers, Suppliers, Communities, Owners, Temporary partners
“To me business isn’t about
wearing suits or pleasing
stockholders. It’s about
being true to yourself,
your ideas and focusing on
the essentials.” —Richard Branson
EXCELLENCE.
DEFINED.
Great Companies …
SET
THE
AGENDA.*
* “disturb the sleep of …
(PERIOD.)
AGENDA SETTERS: “Set the Table”/
Pioneers/ Questors/ Adventurers
US Steel … Ford … Toyota … Sears …
GM … ITT … The Gap … Limited …
Wal*Mart … Tesco … P&G … 3M …
Intel … IBM … Apple … Nokia …
Cisco … Dell … MCI … Sun …
Microsoft … Google … Enron …
Schwab … GE … Laker … Southwest
… People Express … Ogilvy … Virgin
… eBay … Amazon … Sony …
Amgen … BMW … CNN … Nike
Built to Last vs Built for Impact
“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
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.”
will become ever more fleeting.
—Kjell Nordström and Jonas Ridderstråle,
Funky Business
GM25/50-75:
“Built to
last”????
TP#1*:
Netscape!
*Where would you rather have worked for those 5 years, Netscape
or IBM-HP-Microsoft-Oracle? (Where, 25 years from now, would you
rather to be able to tell someone—e.g., grandchild—that you worked?)
NO “LAST WORD”
S&P Stability Ratings*
1985
2006
41%
24%
35%
13%
14%
73%
Low Risk
Average Risk
High Risk
*Likelihood of stable longterm earnings growth
Source: Fortune (2 October 2006)
No “Last
word”
models.
Period.
U.S. Steel
Ford
GM
IBM
Macy’s
Sears
Microsoft?
Dell?
Wal*Mart?
“Seeking Growth
in Urban Areas,
Wal*Mart Gets Cold
Shoulder” —WSJ (09.25.06)
EXCELLENCE.
INNOVATE.
OR. DIE.
“A focus on cost-cutting and efficiency has
helped many organizations weather the
downturn, but this approach will ultimately
Only the
constant pursuit of
innovation can ensure
long-term success.”
render them obsolete.
—Daniel Muzyka, Dean, Sauder School of Business,
Univ of British Columbia
EVERYTHING YOU
THOUGHT YOU KNEW
ABOUT INNOVATION
IS WRONG
What “We” Know “For Sure” About Innovation
Big mergers [by & large] don’t work
Scale is over-rated
Strategic planning is the last refuge of scoundrels
Focus groups are counter-productive
“Built to last” is a chimera (stupid)
Success kills
“Forgetting” is impossible
Re-imagine is a charming idea
“Orderly innovation process” is an oxymoronic phrase
(= Believed only by morons with ox-like brains)
“Tipping points” are easy to identify …
long after they will do you any good
“Facts” aren’t
All information making it to the top is filtered
to the point of danger and hilarity
“Success stories” are the illusions of egomaniacs (and “gurus”)
If you believe the memoirs of CEOs you should be institutionalized
“Herd behavior” (XYZ is “hot”) is ubiquitous
… and amusing
“Top teams” are “Dittoheads”
CEOs have little effect on performance
“Expert” prediction is rarely better than rolling the dice
The Mess Is the
Message!
LIMITS TO FORMAL
“STRATEGY.”
“Recently I asked three corporate
executives what decisions they had made
in the last year that would not have been
made were it not for their corporate plans.
All had difficulty identifying one such
decision. Since all of the plans are marked
‘secret’ or ‘confidential,’ I asked them
how their competitors might benefit
from possession of their plans. Each
answered with embarrassment that
their competitors would not
benefit.” —Russell Ackoff (from Henry Mintzberg,
The Rise and Fall of Strategic Planning)
“We are in a
brawl with
no rules.”
—Paul Allaire
S.A.V.
InnoTacs
We become
who we hang
out with!
Measure “Strangeness”/Portfolio Quality
Staff
Consultants
Vendors
Out-sourcing Partners (#, Quality)
Innovation Alliance Partners
Customers
Competitors (who we “benchmark” against)
Strategic Initiatives
Product Portfolio (LineEx v. Leap)
IS/IT Projects
HQ Location
Lunch Mates
Language
Board
“The
Bottleneck Is at
the Top of the Bottle”
“Where are you likely to find people with the least diversity of
experience, the largest investment in the past, and the greatest
reverence for industry dogma:
At the top!”
— Gary Hamel/Harvard Business Review
futuremark
“To grow, companies need
to break out of a vicious
cycle of competitive
benchmarking and
imitation.”
—W. Chan Kim & Renée Mauborgne,
“Think for Yourself —Stop Copying a Rival,” Financial Times/2003
“How do dominant companies
lose their position? Two-
thirds of the time,
they pick the wrong
competitor to worry
about.”
—Don Listwin, CEO,
Openwave Systems/WSJ
Try it. Try it. Try it
Try it. Try it. Try it
Try it. Try it. Try it
Try it. Try it. Try it
Try it. try it. Try it
Try it. try it. Try it
READY.
FIRE!
AIM.
Ross Perot (vs “Aim! Aim! Aim!” /EDS vs GM/1985)
READY.
FIRE!
“This is so simple it sounds stupid, but it is amazing
how few oil people really understand that
you only find
oil if you drill
wells.
You may think you’re finding it
when you’re drawing maps and
studying logs, but you have to drill.”
Source: The Hunters, by John Masters, Canadian O & G wildcatter
You only find
oil if you
drill wells.
Source: The Hunters, by John Masters, Canadian O & G wildcatter
“We have a
‘strategic plan.’
It’s called doing
things.”
— Herb Kelleher
“Experiment
fearlessly”
Source: BW0821.06, Type A Organization Strategies/
“How to Hit a Moving Target”—Tactic #1
“You miss 100
percent of the
shots you never
take.”
—Wayne Gretzky
tolerate
[encourage?]
failure
“FAIL, FAIL
AGAIN. FAIL
BETTER.”
—Samuel Beckett
“Fail .
Forward.
Fast.”
High Tech CEO, Pennsylvania
“Fail
faster.
Succeed
Sooner.”
David Kelley/IDEO
Sam’s
Secret
#1!
“Reward
excellent failures.
Punish mediocre
successes.”
Phil Daniels, Sydney exec
Speed/
Tempo
“We don’t sell
insurance anymore.
We sell
speed.”
Peter Lewis, Progressive
He who has the
quickest “O.O.D.A.
Loops”* wins!
*Observe. Orient. Decide. Act. /Col. John Boyd
bet the
farm
“[Immelt] is now identifying
technologies with which GE
systematically
set out to build
entirely new
industries”
will …
—Strategy+Business, Fall 2005
No Wiggle Room!
“Incrementalism
is innovation’s
worst enemy.”
—Nicholas Negroponte
“Beware of the tyranny
of making Small Changes
to Small Things. Rather,
make Big Changes to
Big Things.”
—Roger Enrico, former Chairman, PepsiCo
Power Tools
For Power
Strategies
“[other]
admirals more
frightened of
losing than
anxious to win”
On NELSON:
Conscious
measurement
Innovation Index: How many
of your Top 5 Strategic
Initiatives/Key Projects score
8 or higher [out of 10] on a
“Weird”/ “Profound”/
“Wow”/“Game- changer”
Scale?
Excellence: The SE22:
ORIGINS OF
SUSTAINABLE
ENTREPRENEURSHIP
SE22/Origins of Sustainable Entrepreneurship
1. Genetically disposed to Innovations that upset apple carts (3M, Apple,
FedEx, Virgin, BMW, Sony, Nike, Schwab, Starbucks, Oracle, Sun,
Fox, Stanford University, MIT)
2. Perpetually determined to outdo oneself, even to
the detriment of today’s $$$ winners (Apple, Cirque du Soleil, Nokia, FedEx)
3. Treat History as the Enemy (GE)
4. Love the Great Leap/Enjoy the Hunt (Apple, Oracle, Intel, Nokia, Sony)
5. Use “Strategic Thrust Overlays” to Attack Monster Problems (Sysco,
GSK, GE, Microsoft)
6. Establish a “Be on the COOL Team” Ethos. (Most PSFs, Microsoft)
7. Encourage Vigorous Dissent/Genetically “Noisy” (Intel, Apple,
Microsoft, CitiGroup, PepsiCo)
8.
“Culturally” as well as
organizationally Decentralized
(GE, J&J, Omnicom)
9. Multi-entrepreneurship/Many Independent-minded Stars (GE, PepsiCo)
SE22/Origins of Sustainable Entrepreneurship
10. Keep decentralizing—tireless in pursuit of wiping out
Centralizing Tendencies (J&J, Virgin)
11. Scour the world for Ingenious Alliance Partners—
especially exciting start-ups (Pfizer)
12. Acquire for Innovation, not Market Share (Cisco, GE)
13. Don’t overdo “pursuit of synergy” (GE, J&J, Time Warner)
14. Execution/Action Bias: Just do it … don’t obsess on
how it “fits the business model.” (3M, J & J)
15. Find and Encourage and Promote Strong-willed/
Hyper-smart/Independent people (GE, PepsiCo, Microsoft)
16. Support Internal Entrepreneurs (3M, Microsoft)
17. Ferret out Talent anywhere/“No limits” approach to
retaining top talent (Virgin, GE, PepsiCo)
SE22/Origins of Sustainable Entrepreneurship
18. Unmistakable Results & Accountability focus from
the get-go to the grave (GE, New York Yankees, PepsiCo)
19. Up
or Out (GE, McKinsey, big consultancies and law
firms and ad agencies and movie studios in general)
20. Competitive to a fault! (GE, New York Yankees, News
Corp/Fox, PepsiCo)
21. “Bi-polar” Top Team, with “Unglued” Innovator #1,
powerful Control Freak #2 (Oracle, Virgin) (Watch out when
#2 is missing: Enron)
22. Masters of Loose-Tight/Hard-nosed about a very few
Core Values, Open-minded about everything else
(Virgin)
“HOW THE COAST GUARD
GETS IT RIGHT”
—Headline, Time, 10.31.2005
*Autonomy
*Flexibility
*“Perhaps the most important
distinction of the Coast
Guard is that it trusts itself”
EXCELLENCE.
4/40.
De-central-iza-tion!
The True Logic* of Decentralization:
6 divisions = 6 “tries”
6 divisions = 6 DIFFERENT leaders =
6 INDEPENDENT “tries” = Max
probability of “win”
6 divisions = 6 very DIFFERENT
leaders = 6 very INDEPENDENT
“tries” = Max probability of “far
out”/”3-sigma” “win”
*“Driver”: Law of Large #s
Ex-ecu-tion!
“Execution is
the job of the
business
leader.”
—Larry Bossidy & Ram
Charan/ Execution: The Discipline of Getting Things Done
“Execution is a
systematic
process
of rigorously
discussing hows and whats, tenaciously
following through, and ensuring
accountability.”
—Larry Bossidy & Ram Charan/ Execution:
The Discipline of Getting Things Done
“Never forget
implementation
boys. In our work it’s
what I call the
‘missing 98
percent’ of the client
puzzle.”
—Al McDonald
Ac-counta-bil-ity!
“GE has set a standard
of candor. … There is no
puffery. … There isn’t
an ounce of denial in
the place.”
—Kevin Sharer, CEO Amgen,
on the “GE mystique” (Fortune)
6:15A.M.
????????
Work Hard >
Work Smart
EXCELLENCE.
BEDROCK.
LEADERSHIP.
EXCELLENCE.
ENTHUSIASM.
ENERGY.
PASSION.
“Nothing is so
contagious as
enthusiasm.”
—Samuel Taylor Coleridge
“Whenever anything is
being accomplished, I
have learned, it is being
done by a monomaniac
with a mission.”
—Peter Drucker
“Most important,
upped the
energy level at
he
Motorola.”
—Fortune on Ed Zander/08.05
Enthusiasm
Energy
Exuberance
Voracious Curiosity
Irritability/Dis-satisfaction
Relentlessness
Self-reliance
“Closer” (Execution)
excellence
“Everyone lives
by
selling
something.”
—Robert Louis Stevenson
EXCELLENCE.
RELENTLESSNESS.
RE-LENTLESS-NESS
“One of my superstitions had
always been when I started to
go anywhere or to do
not to
turn back , or
anything,
stop, until the thing intended
was accomplished.” —Grant
EXCELLENCE.
AGILITY.
“The most
successful
people are those
who are good
at Plan B.”
—James Yorke, mathematician, on chaos
theory, in The New Scientist
EXCELLENCE.
SHOWING UP.
“You must
be
the
change you wish to
see in the world.”
Gandhi
EXCELLENCE.
STRETCH.
The greatest danger
for most of us
is not that our aim is
too high
and we miss it,
but that it is
too low
and we reach it.
Michelangelo
Kevin Roberts’ Credo
1. Ready. Fire! Aim.
2. If it ain’t broke ... Break it!
3. Hire crazies.
4. Ask dumb questions.
5. Pursue failure.
6. Lead, follow ... or get out of the way!
7. Spread confusion.
8. Ditch your office.
9. Read odd stuff.
10.
Avoid moderation!
Insanely
great”
"Life is not a journey to the
grave with the intention of
arriving safely in one pretty and
well preserved piece, but to skid
across the line broadside,
thoroughly used up, worn
out, leaking oil, shouting …
‘GERONIMO!’ ”
—Bill McKenna, professional motorcycle racer
EXCELLENCE.
DRILL.
You only
find oil if
you drill
wells.
—The Hunters, by John Masters,
Canadian O & G wildcatter
“It’s always
showtime.”
—David D’Alessandro, Career Warfare
EXCELLE
ALWAYS