Transcript The European Conference on Customer Management st In Search of Century Excellence Tom Peters London 24.04.2001

The European Conference
on Customer Management
st
21
In Search of
Century Excellence
Tom Peters
London 24.04.2001
“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
“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]
“We are entering an era of no
limits, with nothing to brake the
cascade of human intelligence
unleashed by the Information Age.
The Web essentially allows all the
brains on earth to communicate
and share insights in real time,
around the globe, all the time.”
Jeffrey Young, Cisco Unauthorized
<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, talk april2001
“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 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)
“We are in a
brawl with no
rules.”
Paul Allaire
TP: “So nobody really knows what
they’re doing?” CL: “Pretty much
right.” TP: “Will this channel
cannibalize that? WHO KNOWS?”
CL: “Right.” TP: “So?” CL:
“Well, you just gotta cut the crap,
and try something. And see what
happens. Don’t form a ‘Debating
Society.’ ” TP: “Amen!”
“It used to be that the big
ate the small. Now the
fast eat the slow.”
Geoff Yang, IVP/ (Institutional
Venture Partners)
“We don’t
sell insurance
anymore. We sell
Read It Closely:
speed.”
Peter Lewis, Progressive
21st Century Excellence:
The Kotler (Peters) Doctrine
1965-1980:
R.A.F.
(Ready.Aim.Fire.)
1980-1995:
R.F.A.
(Ready.Fire!Aim.)
1995-????:
F.F.F.
(Fire!Fire!Fire!)
Part I: Brand Inside
Part II: Brand Outside
Part III: Brand Leadership
Forces @ Work I
The Destruction
Imperative!
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
The [New] Ge Way
DYB.com
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 Gales of Creative Destruction
+29M = -44M + 73M
+4M = +4M - 0M
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
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.
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
Brand Inside
Brand Work: The
Professional Service
Firm Model & The
WOW Project
White Collar
Revolution!
“Assetless
Company”
John Bryan, CEO, on selling all
Sara Lee’s manufacturing
“Don’t own nothin’ if
you can help it. If you
can, rent your shoes.”
F.G.
Cisco, Dell =
Brand-owning companies
who sell Customer
Satisfaction
Source: David Schneider & Grady Means,
MetaCapitalism [e.g.: Cisco owns 2 of 38
assembly plants]
So what will be the
Basic Building
Block of the
New Org?
Answer: PSF!
[Professional Service Firm]
Department Head
to …
Managing Partner,
HR [IS, etc.] Inc.
09.11.2000: HP bids
$18,000,000,000
for
PricewaterhouseCoopers
Consulting business!
(31K bods)
[“These days, building
the best server isn’t
enough. That’s the
price of entry.”
Ann Livermore, Hewlett Packard]
% Rev From Service:
… IBM
… HP …
Sun … UT …
GE
(80%)
(80%)
Maybe one [or more]
of your “PSFs”
becomes the tail that
wags the dog?????
[E.g.: engineering, IS-logisticscustomer service]
Mystery Co.: The NEW “Service”
Collections.
Flexible sourcing.
Packaging.
Merchandising.
Promotion.
Design.
Systems & Site mgt.
Turnkey.
Brand Inside
Brand You:
Distinct …
or
Extinct
“New Economy
changes how
firms treat
layoffs”
Headline, USA Today (03.19.2001)
“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
Minimum New Work SurvivalSkillsKit2000
Mastery
Rolodex Obsession (vert. to horiz. “loyalty”)
Finishing Skills
Entrepreneurial Instinct
CEO/Leader/Businessperson
Mistress of Improv
Sense of Humor
Intense Appetite for Technology
Groveling Before the Young
Embracing “Marketing”
Passion for Renewal
The Raw Material …
The WOW
Project!
Getting Started
F2F!/K2K!/1@T/R.F.A.*
*Freak to Freak/Kook to Kook/
One at a Time/ Ready.Fire!Aim.
World’s Biggest Waste …
Selling “Up”
Characteristics of the “Also rans”*
“Minimize risk”
“Respect the chain of
command”
“Support the boss”
“Make budget”
*Fortune, article on
“Most Admired Global Corporations”
Joe J. Jones
1942 – 2001
HE WOULDA DONE SOME
REALLY COOL STUFF
BUT …
HIS BOSS WOULDN’T
HIM!
LET
“Success is the ability
to go from failure to
failure without losing
your enthusiasm.”
Winston Churchill
(as quoted by John Peterman)
“Fail faster.
Succeed sooner.”
DK/IDEO
“Reward excellent
failures. Punish
mediocre
successes.”
Phil Daniels, Sydney exec
Distinct
… or Extinct.
Message:
Brand Inside
Brand Talent: The
Great War for Talent
“We have
transitioned from an
asset-based strategy
to a talent-based
strategy.”
Jeff Skilling, COO, Enron
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 (05.17.00)
“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 (05.17.00)
Message: Some
people are
better than other
people. Some people
are a helluva lot
better than other
people.
“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)
“We value engineers like
professional athletes. We
value great people at 10
times an average person
in their function.”
Jerry Yang, Yahoo
What gets measured
gets done. What gets
paid for gets done
more. What gets paid
a lot for gets done
a lot more.
“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]
“Talented people are less likely
to wait their turn. We used to
view young people as trainees;
now they are authorities. Arguably
this is the first time the older generation
can – and must – leverage the younger
generation very early in their careers.”
Ed Michaels, War for Talent (05.17.00)
“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”!
Women’s Stuff =
New Economy Match
Improv skills
Relationship-centric
Less “rank consciousness”
Self determined
Trust sensitive
Intuitive
Natural “empowerment freaks” [less
threatened by strong people]
Intrinsic [motivation] > Extrinsic
“Boys are trained in
a way that will make
them irrelevant.”
Phil Slater
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
“But don’t we
need some
grout between
the tiles?”
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
[EVP = “The company’s
fingerprint” = B.P.]
Source: Ed Michaels et al., The War for Talent
It’s your
fault!*
*Sam Culbert
Brand Inside
Reprise:
THINK WEIRD: The
High Standard
Deviation Enterprise
Saviors-in-Waiting
Disgruntled Customers
Fringe Competitors
Rogue Employees
Edge Suppliers
Wayne Burkan, Wide Angle Vision: Beat the
Competition by Focusing on Fringe Competitors,
Lost Customers, and Rogue Employees
“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
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
N.W.O.:
•
•
•
•
•
•
•
Was
Pine-paneled Office
•
Address: 1 Big Man Plaza •
Secretary
•
Suit
•
Formal
•
Rank conscious
•
Pretense (“Failures are •
for fools.”)
•
• I love “Yes men”
•
• Self-contained
Is
Is
Seat 9B, UA233
Address: [email protected]
Typing: 60 WPM
Casual M-F
Approachable
We are a HOT Team
Screwing up is as normal
as breathing
I love Misfits!
I love partners
Message 2001: I’m …
Comfortable with … CHAOS.
UN-Comfortable with …
B.S.
Truth
1000X
more important in times of
Madness!
Part I: Brand Inside
Part II: Brand Outside
Part III: Brand Leadership
Forces @ Work II
The Commodity Trap
Quality Not Enough!
“While everything may
be better, it is also
increasingly the
same.”
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, working in
similar jobs, coming up with similar
ideas, producing similar things, with
similar prices and similar quality.”
Kjell Nordstrom and Jonas Ridderstrale,
Funky Business
“Companies have defined
so much ‘best practice’
that they are now more or
less identical.”
Jesper Kunde, A Unique Moment
Brand Outside
Strategy 1:
Use E-Commerce to
Re-invent Everything!
Tomorrow Today: Cisco!
90% of $20B (=$50M/day)
75% mfg. outsourced; 50% of orders
routed to supplier who ships direct
Gross margin: 65%; Net margin: 28%
Annual savings in service
and support from customer
self-management: $550M
Enron eWorld: “Price a structured
trade,” per John Arnold, 26: Early
1999: 30 times a day. Late 2000: 30
times per … minute.
Long-term gas contract. 1989: 9
months, 400+ deals. Late 90s:
2 weeks, 2 per week. Late 2000:
5 such deals per day
Source: www.ecompany.com (1/2001)
RADICAL
STRATEGIES
REQUIRED
“One cannot be tentative
about this. Excuses like ‘channel
conflict’ or ‘marketing and sales aren’t
ready’ cannot be allowed. Delay and
you risk being cut out of your own
market, perhaps not by traditional
competitors but by companies you
never heard of 24 months ago.”
Jack Welch [07.00/Forbes.com]
GE & the Web
Purchasing: 2000: $6B;
2001: $15B
Sales: 1999: $1B;
2000: $7B; 2001: $20B+
Source: Business 2.0 (05.01)
“We’ve put the word out
to all of our suppliers: by
the end of the year [2000]
we’ll only do purchasing
over the Internet.”
John Paterson, C.P.O., IBM
[$50B from 18,000 suppliers]
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
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
A DREAMER’S
MEDIUM!
“There is 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
imagined before!
…
Message: Survivors will
move all their operations
to the Web. Now. Web =
Encompassing … or else.
Only idiots
pull in their
[investment] horns
during a downturn.
Message 2001:
“Customer Service” is DEAD.
“One-to-One” is DEAD.
Welcome to: ????
[??? = We live together in seamlessresponsive harmony with all Members of
the Value Chain. We Create together. We
Fulfill together. We Learn together. We
Adjust together. All old categories –
which imply separation and linearity and
hierarchy and do-it-to-themism –
must die.]
Brand Outside
Strategy 1A
Embracing an
e-Led Age of
Self-Determination
The control revolution. The
potentially monumental shift in
control from institutions to
individuals made possible by new
technology such as the Internet.
Source: Introduction, The Control Revolution,
Andrew Shapiro
“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 Nordstrom and Jonas Ridderstrale,
Funky Business
Anne Busquet/ American Express
Not: “Age of the Internet”
“Age of
Customer
Control”
Is:
Message: We are on the
cusp of a “People’s
[customer/ patient/ citizen/ etc.]
Revolution.”
Brand Outside
Strategy 2:
Design Matters!
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
“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
Design “is” … WHAT &
WHY I LOVE.
LOVE.
I
LOVE
my ZYLISS
Garlic Peeler!
Design “is” … WHY I
GET MAD.
MAD.
Wanted: Dead
[preferably] or Alive:
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. Personally,
though not “artistic,” I’m a cool-stuff guy. I love what
I love and I hate what I hate. [Openly.]
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 product-service-experience stands out … or
doesn’t. Furthermore, it’s “one of those things” …
that damn few companies put – consistently – on the
front burner.
Message: Design is
the wellspring of
branding. Great design
takes guts and is “soul
deep.”
Message:
“Services” are Not Intangible!
You “give off” hundreds of
design cues … daily!
YOU ARE A DESIGNER!
First Steps: “Beauty Contest”!
• Select one form/document: invoice, air
bill, sick leave policy, customer returnsclaim form
• Rate the selected doc on a scale of 1 to 10
[1 = Bureaucratica Obscuranta/ Sucks; 10
= Work of Art] on three dimensions:
Beauty, Grace, Clarity
• Re-invent!
• Repeat, with a new selection, every 15
working days.
Life 101: Contracts
What are the 5 (not, 4, not 6) Main Points?
Please summarize on ONE page.
(ENGLISH, PLEASE.)
(Let the bloody lawyers and agents do their masturbatory
acts on the “last 98%.”)
Understand that if it’s “good,” we’ll all be
healthy & wealthy & wise; if it’s bad,
somebody’s lawyer will figure a Way Out …
fast.
Brand Outside
Strategy 2A:
It’s the Experience!
“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
“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
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 “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
1985: Party @ Chuck E. Cheese
(experience economy) $100.00
Message: “Experience”
is the “last 80%.”
“Experience” applies to
all work!
Brand Outside
Strategy 4:
BRAND POWER!
“WHO ARE
YOU [these days] ?”
TP to Client
“The idea that business is just a numbers
affair has always struck me as preposterous.
For one thing, I’ve never been particularly
good at numbers, but I think I’ve done a
reasonable job with feelings. And I’m
convinced that it is feelings – and
feelings alone – that account for the
success of the Virgin brand in all of
its myriad forms.”
Richard Branson
“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
“Most companies tend to equate branding with the
company’s marketing. Design a new marketing
campaign and, voila, 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, A Unique Moment
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
“Brand Promise” Exercise: (1) Who
Are WE? (1 page, 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) Big Enchilada:
Try ’em on a skeptical Client!
Message: REAL Branding is personal.
REAL Branding is integrity. REAL
Branding is consistency & freshness.
REAL Branding is the answer to WHO
ARE WE? WHY ARE WE HERE? REAL
Branding is why I/you/we [all] get out of
bed in the morning. REAL Branding
can’t be faked. REAL Branding is
a systemic, 24/7, all departments,
all hands affair.
[Tell the
TRUTH
P-l-e-a-s-e ]
“WHO ARE
WE?”
“WHO
AM I ?”
[“Me and the Brand Promise, a Passionate
Saga” – We hope!]
“EXACTLY
HOW AM I/
ARE WE
DIFFERENT?”
“ WHY DOES IT
MATTER TO
THE CLIENT?”
“EXACTLY HOW
DO I CONVEY
THAT DIFFERENCE
TO THE CLIENT ”
Part I: Brand Inside
Part II: Brand Outside
Part III: Brand Leadership
Brand Leadership
Passion Rules!
“Leadership is a
performance. You have to be
conscious of your behavior,
because everybody else is.”
Carly Fiorina
“You must be the
change you wish
to see in the
world.”
Gandhi
“Leaders achieve their
through
the stories they relate.
effectiveness chiefly
In addition to communicating
stories, leaders embody those
stories.”
Howard Gardner, Leading Minds:
An Anatomy of Leadership
“Create a
Cause, not
a ‘business.’ ”
Gary Hamel, Fortune (06.00), on re-inventing a
company (Exemplar #1: Charles Schwab)
Brand Leadership: ENTHUSIASM RULES!
“I am a
dispenser of
enthusiasm.”
Ben Zander:
“Entusiasmatore”
Word invented by Silvio Berlusconi, meaning
enthusiast-salesman
“A leader is a
dealer in hope.”
Napoleon
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.]
“Let’s make a
dent in the
universe.”
Steve Jobs