Transcript Tom Peters’ Re-Imagine2006! Business Excellence in a Disruptive Age Investec/Mauritius/10March2006 Slides* at … tompeters.com *short, long.

Tom Peters’
Re-Imagine2006!
Business Excellence
in a Disruptive Age
Investec/Mauritius/10March2006
Slides* at …
tompeters.com
*short, long
The Pepsi
Challenge …
Re-imagine!
Not Your
Father’s
World.
THREE
BILLION NEW
CAPITALISTS
—Clyde Prestowitz
December 9, 2005: “Ogre to
Slay? Outsource It to Chinese”
(New York Times, page 1—
news section). The “factory”: Fuzhou,
China. The workers: youngsters logging 12-hour
shifts. Their clientele: youngsters from “Seoul to
San Francisco.” The “work”: The Chinese
youngsters are playing the early levels of video
games for their affluent “clients,” who want to
avoid the pain and time associated with those
annoying first few levels.
“WE ARE BEGINNING TO
ACQUIRE … DIRECT AND
DELIBERATE CONTROL …
OVER THE EVOLUTION
OF ALL LIFE FORMS …
ON THE PLANET.”
Source: Juan Enriquez, As The Future Catches You
“the
metabolically
dominant
soldier”
Source: Radical Evolution: The Promise and Peril of Enhancing Our
Minds, Our Bodies—and What It Means to Be Human, Joel Garreau
New Economy?
Genentech,
Amgen
> Merck
New Economy?
Sergey, Larry
> Harvard
1. Re-imagine
Permanence: The
Naked Emperor
Problem!
“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
“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
Rate of Leaving F500
1970-1990:
Source: The Company, John Micklethwait & Adrian Wooldridge
(1974-200: One-half biggest 100 disappear)
Lessons
Learned.
GE. Me.
De-central-iza-tion!
Ex-ecu-tion!
Ac-counta-bil-ity!
6:15A.M.
2. Re-imagine:
Innovate
or
Die!!
Not
Optional!
“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 (FT/09.17.04)
“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
“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
There’s “A”
and then
there’s “A.”
“I don’t believe in economies of
You don’t get
better by being
bigger. You get
worse.”
scale.
—Dick Kovacevich/Wells
Fargo/Forbes/08.04 (ROA: Wells, 1.7%; Citi, 1.5%; BofA, 1.3%;
J.P. Morgan Chase, 0.9%)
“The slumping giant needs
to put more pep in its
But size
remains a
handicap.”
funds. …
—Fortune on Fidelity
Magellan/1128.05 (“There’s a practical limitation to running a fund of
that size.”—Chris Traulsen, analyst, Morningstar)
“TOO BIG TO GROW: Why
Wall Street has soured on
many of corporate
America’s most admired
and feared companies”
—headline, Newsweek, 0313.06
Spinoffs perform
better than IPOs … track
record, profits … “freed from
the confines of the parent …
more entrepreneurial, more
nimble” —Jerry Knight/Washington Post/08.05
Different!
Franchise Lost!
TP:
“How many of you
really
[600]
crave
a new Chevy?”
NYC/IIR/061205
Beyond the “Pension Problem”
Sedan, Less Than $20,000.
Sedan, $20,000-$30,000. Sedan,
$30,000-$40,000. Luxury Sedan.
SUV, Less Than $30,000. SUV,
More Than $30,000. Pickup
Truck. Minivan. Green Car. Fun
To Drive.*
HENEVERMENTIONEDCARS
???????????
Millionaires/Decimillionaires talk about
“shareholder value.”*
Billionaires talk about
“product.”**
*BigCo CEOs
**Gates, Ellison, Jobs, Smith, Branson,
Buffett, Walton, Schultz, Murthy
“Value innovation
is about
making the competition irrelevant
by creating uncontested market
space. We argue that beating the
competition within the confines of
the existing industry is not the
way to create profitable growth.”
—Chan Kim & Renée Mauborgne (INSEAD),
from Blue Ocean Strategy (The Times/London)
“[Immelt] is now identifying
technologies with which GE
systematically
set out to build
entirely new
industries.”
will …
—Strategy+Business, Fall 2005
Great Companies …
SET
THE
AGENDA. (Period.)
AGENDA SETTERS: “Set the Table”/
Pioneers/ Questors/ Adventurers
US Steel … Ford … Macy’s … Sears …
Litton Industries … ITT … The Gap …
Limited … Wal*Mart … Tesco … P&G …
3M … Intel … IBM … Apple … Nokia …
Cisco … Dell … MCI … Sun … Oracle …
Microsoft … Google … Enron …
Schwab … GE … Southwest … Laker …
People Express … Ogilvy … Chiat/Day
… Virgin … eBay … Amazon … Sony …
Genentech … BMW … CNN …
“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
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
death. …
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)
“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.” —Kjell Nordström and Jonas Ridderstråle, Funky
will become ever more fleeting.
Business
“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
Focus!
Scale’s Limitations: “All Strategy
Is Local: True competitive
advantages are harder to find
and maintain than people
realize. The odds are best
in tightly drawn markets,
not big, sprawling ones”
—Title/Bruce Greenwald & Judd Kahn/HBR09.05
Big Winners
Lousy industry … Specialty (Ignored/No
competition) … Smaller than competitors
Sweet spot …
Agility … Discipline
… FOCUS
4 Traits:
Source: Alfred Marcus, Big Winners and Big Losers:
The 4 Secrets of Long-term Business and Failure
Op-ed. Wall Street Journal. 2 March 2006:
“Boutique vs.
Behemoth: Upstarts
Steal Market Share
from the Investment
Banks.”
The Benefits of … FOCUSED EXCELLENCE
Shouldice/Hernia Repair:
1% recurrence.
Avg: 90 min, 10%-15%
30 min,
recurrence.
Source: Complications, Atul Gawande
Easy!
Innovation’s 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
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
Bold!
“Beware of the tyranny
of making Small Changes
to Small Things. Rather,
make Big Changes to
Big Things.”
—Roger Enrico, former Chairman, PepsiCo
“Reward excellent
failures. Punish
mediocre
successes.”
Phil Daniels, Sydney exec
Action!
“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
Relentless!*
*Churchill, Grant, Patton, Welch, Bossidy, Nardelli (GE execs),
UPS, FedEx, Microsoft/Gates-Ballmer, Eisner, Weill, eBay, NixonKissinger, Gerstner, Rice, Jordan, Armstrong
Measurable!
Innovation Index: How many
of your Top 5 Strategic
Initiatives/Key Projects
score 8 or higher (out of 10) on a
“Weirdness”/ “Profundity”/
“Wow”/ “Gaspworthy”/
“Game-changer” Scale?
Personal!
Step #1:
Buy a
Mirror!
“The First step in a
‘dramatic’ ‘organizational
change program’ is
obvious—dramatic personal
change!” —RG
The Pepsi
Challenge …
3. Re-imagine
Organizing: The WhiteCollar Tsunami and the
Professional Service Firm
(“PSF”) Imperative.
“ ‘Disintermediation’ is overrated. Those who fear
disintermediation should in fact be afraid of
irrelevance—disintermediation is just another way
you’ve
become
irrelevant to your
customers.”
of saying that …
—John Battelle/Point/Advertising Age/07.05
Answer: Professional Service Firm/PSF!
Department Head
to …
Managing Partner,
IS [HR, R&D, etc.] Inc.
The “PSF35”:
Thirty-Five
Professional Service Firm
Marks of Excellence
The PSF35: The Work & The Legacy
1.
CRYSTAL CLEAR POINT OF VIEW
(Every
Practice Group: “If you can’t explain your position in eight words or
less, you don’t have a position”—Seth Godin)
2. DRAMATIC DIFFERENCE (“We are the only ones who do what
we do”—Jerry Garcia)
3. Stretch Is Routine (“Never bite off less than you can chew”—anon.)
4. Eye-Appetite for Game-changer Projects (Excellence at Assembling
“Best Team”—Fast)
5. “Playful” Clients (Adventurous folks who unfailingly Aim to Change
the World)
6. Small “Uneconomic” Clients with Big Aims
7. Life Is Too Short to Work with Jerks (Fire lousy clients)
8. OBSESSED WITH LEGACY (Practice Group and Individual: “Dent the
Universe”—Steve Jobs)
9. Fire-on-the-spot Anyone Who Says, “Law/Architecture/Consulting/
I-banking/ Accounting/PR/Etc. has become a ‘commodity’ ”
10. Consistent with #9 above … DO NOT SHY AWAY FROM THE
WORD (IDEA) “RADICAL”
?????
Do good (excellent?!)
work
Make a lot of
money
Gaspworthy!
The PSF35: The Client Experience
11. Always team with client: “full partners in achieving memorable results” (Wanted:
“Chimeras of Moonstruck Minds”!)
12. We will seek assistance Anywhere to assemble the Best-inPlanet Team for the Project
13. Client Team Members routinely declare that working with us
was “the Peak Experience of my Career”
14. The job’s not done until implementation is
“100.00% complete” (Those who don’t “get it” must go)
IMPLEMENTATION IS NOT COMPLETE UNTIL
THE CLIENT HAS EXPERIENCED “CULTURE
CHANGE”
16. IMPLEMENTATION IS NOT COMPLETE UNTIL
SIGNIFICANT “TECHNOLOGY TRANSFER HAS
TAKEN PLACE-ROOT (“Teach a man to fish …”)
17. The Final Exam: DID WE MAKE A DRAMATIC,
LASTING, GAME-CHANGING DIFFERENCE?
15.
The PSF35: The People & The Leadership
18. TALENT
FANATICS (“Best-Coolest place to work”)
19. EYE FOR THE PECULIAR (Hiring: Go beyond “same old,
same old”)
20. Early Opportunities (vs. “Wait your turn”)
21. Up or Out (Based on “Legacy”/Mentoring as much as
“Billings”/“Rainmaking”)
22. Slide the Old Aside/Make Room for Youth (Find oldsters
new roles?)
23.
TALENT IS OBSESSED WITH RENEWAL FROM
DAY #1 TO DAY #“R” [R = Retirement]
24. Office/Practice Leaders Evaluated Primarily on
Mentoring-Team Building Skills
25.
A “PROPRIETARY” TALENT DEVELOPMENT
PROCESS (GE)
26. Team Leadership Skills Valued Early
27. Partner with B.I.W. [Best In World] Outsiders as Needed
and to Infuse Different Views
The PSF35: The Firm & The Brand
28. EAT-SLEEP-BREATHE-OOZE
is my message”—Gandhi)
INTEGRITY (“My life
29. Excellence+ in EXECUTION … 100.00% of the Time
30. “Drop everything”/“Swarm” to Support a Harried-On
The Verge Team
31. SPEND
ON R&D LIKE A TECH FIRM.
32. A PROPRIETARY METHODOLOGY (FBR, McKinsey,
Chiat Day, IDEO, old EDS)
33. BRAND
MANIACS (Organize Around a Point of View Worth
BROADCASTING)
34. PASSION!
35.
ENTHUSIASM!
EXCELLENCE. ALWAYS.
Static/Imitative
Integrity.
Quality.
Excellence.
Continuous Improvement.
Superior Service (Exceeds Expectations.)
Completely Satisfactory Transaction.
Smooth Evolution.
Market Share.
Dynamic/Different
Dramatic Difference!
Disruptive!
Insanely Great! (Quality++++)
Life-(Industry-)changing Experience!
Game-changing!
WOW!
Surprise!
Delight!
Breathtaking!
Punctuated Equilibrium!
Market Creation!
4. Re-imagine Business’s
Fundamental Value
Proposition: PSFs
Unbound, or Fighting
“Inevitable Commoditization”
via “The ‘Gamechanging
Solutions’ Imperative.”
Up,
Up,
Up,
Up
the Value-added Ladder.
And the “M” Stands for … ?
“Systems
Integrator of choice.”/BW
Gerstner’s IBM:
(“Lou, help us turn ‘all this’ into that long-promised ‘revolution.’ ” )
IBM Global Services*
(*Integrated Systems Services Corp.):
$55B
Planetary Rainmaker-in-Chief!
“Palmisano’s strategy is to
expand tech’s borders by pushing
users—and entire industries—
toward radically different business
models. The payoff for IBM would be access to an
ocean of revenue—Palmisano estimates it at $500
billion a year—that technology companies have
never been able to touch.” —Fortune
The Value-added Ladder/Stuff ‘n’ Things
Goods
Raw Materials
The Value-added Ladder/Stuff & Transactions
Services
Goods
Raw Materials
The Value-added Ladder/Opportunity-seeking
Gamechanging
Solutions
Services
Goods
Raw Materials
“Game-changing Solutions”:
Core Value-add Mechanism
PSFs
(Professional Service Firm “model”)
+
Wow Projects
(“Different” vs “Better”)
+
Brand Yous
(“Distinct” or “Extinct”)
5. Re-imagine
Enterprise as
Theater: A World
of Scintillating
“Experiences.”
“Experiences are
as distinct from
services as services
are from goods.”
—Joe Pine & Jim Gilmore, The Experience Economy:
Work Is Theatre & Every Business a Stage
“Club Med
is more
than just a ‘resort’; it’s a
means of rediscovering
oneself, of inventing an
entirely new ‘me.’ ”
Source: Jean-Marie Dru, Disruption
“The [Starbucks] Fix” Is on …
“We have
identified a ‘third
place.’ And I really believe that
sets us apart. The third place is that
place that’s not work or home. It’s the
place our customers come for refuge.”
Nancy Orsolini, District Manager
The Value-added Ladder/Memorable Connection
Scintillating
Experiences
Gamechanging Solutions
Services
Goods
Raw Materials
The Value-added Ladder/Emotion
Dreams Come True
Scintillating Experiences
Gamechanging Solutions/
Business Advantage
Services
Goods
Raw Materials
Lovemark
Dreams Come True
Awesome Experiences
Gamechanging Solutions
Services
Goods
Raw Materials
Tattoo Brand: What %
of users would tattoo the
brand name on their body?
Top 10 “Tattoo Brands”*
Harley .… 18.9%
Disney .... 14.8
Coke …. 7.7
Google .... 6.6
Pepsi .... 6.1
Rolex …. 5.6
Nike …. 4.6
Adidas …. 3.1
Absolut …. 2.6
Nintendo …. 1.5
*BRANDsense: Build Powerful Brands through Touch,
Taste, Smell, Sight, and Sound, Martin Lindstrom
6. Re-imagine
Excellence I: The
Talent
Obsession.
“The Creative Age
is a wide-open
game.”
—Richard Florida, The Rise of the Creative Class
Brand =
Talent.
“THE FUTURE BELONGS TO …
SMALL POPULATIONS … WHO
BUILD EMPIRES OF THE MIND …
AND WHO IGNORE THE TEMPTATION OF—OR DO NOT
HAVE THE OPTION OF—EXPLOITING NATURAL
RESOURCES.”
Source: Juan Enriquez/As the Future Catches You
“The leaders of Great Groups
love talent and know where
to find it. They revel in the
talent of others.”
—Warren Bennis &
Patricia Ward Biederman, Organizing Genius
PARC’s Bob Taylor:
“Connoisseur
of Talent”
The Cracked Ones Let in the Light
“Our business needs a massive transfusion
of talent, and talent, I believe, is most likely to
nonconformists, dissenters
and rebels.”
be found among
—David Ogilvy
“intrepid,
unprincipled,
reckless, predatory,
boundless
ambition, civilized
in externals but a
savage at heart.”
Wellington
Nelson
Disraeli
Churchill
Montgomery
Thatcher
Our Mission
To develop and manage talent;
to apply that talent,
throughout the world,
for the benefit of clients;
to do so in partnership;
to do so with profit.
WPP
A review of Jack and Suzy Welch’s Winning claims there are but
two key differentiators that set GE “culture” apart from the herd:
First: Separating financial forecasting and performance
measurement. Performance measurement based, as it usually is, on
budgeting leads to an epidemic of gaming the system. GE’s performance
measurement is divorced from budgeting—and instead reflects how you do
relative to your past performance and relative to competitors’ performance; ie it’s
about how you actually do in the context of what happened in the real world, not
as compared to a gamed-abstract plan developed last year.
Second: Putting HR on
a par with finance
and marketing.
Re-imagine
People Power:
The Talent50
7. Re-imagine Leadershi:
The
Passion
Imperative.
Create a
Cause!
“Management has a lot to do with
answers. Leadership is a function of
questions. And the first question for a
‘Who do
we intend to be?’
leader always is:
Not ‘What are we going to do?’ but
‘Who do we intend to be?’”
—Max De Pree, Herman Miller
Find ’em!
“Leaders
‘do’ people.
Period.”
—Anon.
Make It a
Grand
Adventure!
Quests!
Organizing Genius / Warren Bennis
and Patricia Ward Biederman
“Groups become great only when
everyone in them, leaders and
members alike, is free to do his or
her absolute best.”
“The best thing a leader can do for a
Great Group is to allow its
members to discover their
greatness.”
Leadership’s Mount Everest
“allow its
members to
discover their
greatness.”
“The role of the Director
is to create a space
where the actor or
actress can become more
than they’ve ever been
before, more than
they’ve dreamed of
being.” —Robert Altman, Oscar acceptance, 2006
Try It!
Sam’s
Secret #1!
Demand
Action!
“We have a ‘strategic’
plan. It’s called ‘doing
things.’”
— Herb Kelleher
Dispense
Enthusiasm!
“Nothing is so
contagious as
enthusiasm.”
—Samuel Taylor Coleridge
Excellence.
Always.
Cirque
du Soleil!
ExIn*: 1982-2002/Forbes.com
DJIA: $10,000 yields $85,000
EI: $10,000 yields $140,050
*Excellence Index/Basket of 32 publicly traded stocks
Avoid …
Moderation!
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!
“[Other]
admirals more
frightened of
losing than anxious
to win”
Nelson’s secret:
Free the
Lunatic
Within!
“You can’t behave in a
calm, rational manner.
You’ve got to be out
there on the lunatic
fringe.”
— Jack Welch