Transcript Tom Peters’ X25* EXCELLENCE. ALWAYS. 13th Annual World Islamic Banking Conference Kingdom of Bahrain.11 December 2006 *In Search of Excellence 1982-2007

Tom Peters’ X25*
EXCELLENCE.
ALWAYS.
13th Annual World Islamic Banking Conference
Kingdom of Bahrain.11 December 2006
*In Search of Excellence 1982-2007
Slides* at …
tompeters.com
*also “long”
EXCELLENCE.
THE MANDATE
FOR CHANGE.
“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
S&P Stability Ratings*
1985
2006
Low Risk
41%
13%
Average Risk
24%
14%
High Risk 35%
*Likelihood of stable long-term earnings growth
Source: Fortune (2 October 2006)
73%
“It is not the
strongest of the
species that survives,
nor the most
intelligent, but the
one most responsive
to change.”
—Charles Darwin
EXCELLENCE.
STARTERS.
BASICS.
“Why in the
world did
you go to
Siberia?”
The Peters
Principles: Enthusiasm.
Emotion. Excellence. Energy.
Excitement. Service. Growth.
Creativity. Imagination. Vitality.
Joy. Surprise. Independence.
Spirit. Community. Limitless
human potential. Diversity. Profit.
Innovation. Design. Quality.
Entrepreneurialism. Wow.
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”
EXCELLENCE.
DEFINED.
X06
X.06.23: Whole Foods Markets …
Starbucks … Wegmans … Commerce
Bank … John Laing Homes … Apple …
London Drugs … Griffin Hospital/
Planetree Alliance … The Met School/Big
Picture … Carl Sewell … Progressive
Insurance … Stanford women’s sports …
Stanford D-School … HSM … Washington
Speakers Bureau … Build-A-Bear …
RE/MAX … Donnelly’s Weather Strip
Service … Jim’s Group … Cirque du
Soleil … (U.S. Grant) … (Horatio Nelson)
Commerce
Bank
“Our whole
story is
growing
revenue.”
—Vernon Hills (Top-line driven; standard
is bottom-line driven by cost cutting)
Commerce Bank: From “Service” to “Experience”
7X. 730A800P. F12A.*
*’93-’03/10 yr annual return: CB: 29%;
WM: 17%; HD: 16%. Mkt Cap: 48% p.a.
8,000 Radio City
Music Hall … J.D. Power/Customer
service/Bank/NYC/1st in 5 of 6; 2nd in #6 … Inspired by
Ray Kroc … $36B ($100B in 6 years); +$750M per
month/373 branches in 7 states/900 in 6 years … player
piano … Penny Arcade/$25K per machine … 9M lollipops,
2M dog biscuits … stupid rule (red) button … call center
not “cost center,” but opportunity/human by second
operation … over-invest in real estate … designexperience fanaticism … Red!/Red Friday/Hot music …
deposits available next day (vs ½ on 3rd; ½ on 5th; focus
on 99%, not 1%) … LONG HOURS!!!! (7/week/12
hours/Fridays/15 minutes before) … “Do whacky things
for customers” (VH) … “create magical moments of
surprise and delight for employees” (VH) … “Hire for
attitude. Train for skills.” (VH) … Chinatown/10K first
day; 28K first week … Commerce U in ’93 (“underlying
theme is fun”—VH)
“ … cut costs at most banks.
‘We have to push them out
of the branches.’ ‘We have
to push them to machines.’
We have to push them to
the Internet.”
Source: Vernon Hill
TP: Experience-Design …
Top-line fanaticism (vs
Cost-fanaticism) … Deposits
… Drive ’em to the branch …
Experience/Wow! … little
touches … no stupid rules …
Talent/Attitude/Recognition
The Power of WOW!
How Commerce Bank
Created a SuperGrowth Business in a
No-Growth Industry
Vernon W. Hill, II
John Laing
Homes
“Soft Skills,
Hard Dollars”
Source: Headline, BigBuilder, September 2006
“Builder of the Year”/Professional
Builder … Experience … Communities/
Family values/ Relationships/After-sale “
…talk to our customers …” J.D. Power
awards … Warranties … Price premiums …
Design!!!! (all Divisions winners) (Top
“names”) … Data/market research … Top
company to work for … Team development
… “I just love being a home builder.” (LW)
… Brand … Emaar Properties* (Robert
Booth/Int’l: “They have a tremendous
focus on the customer, and that is hugely
important to us.”)
*Pay premium for Excellence. Invest for the longterm.
sewell
Customers
for Life
FLOWER
POWER
jim’s group
Jim’s Group: Jim Penman.*
1984: Jim’s Mowing. 2006: Jim’s Group.
2,600 franchisees (Australia, NZ, UK).
Cleaning. Dog washing. Handyman.
Fencing. Paving. Pool care. Etc.
“People first.” Private. Small staff. Franchisees
can leave at will. 0-1 complaint per year is
norm; cut bad ones quickly.
*Ph.D. cross-cultural anthropology; mowing on the side
Source: MT/Management Today (Australia), Jan-Feb 2006
*Focused on growth and revenue and “offense,”
not defense and cost containment.
*People-talent obsession.
*Provide mind-bending experiences. (Driven
by design primacy.)
*Love affair with customers.
*Happy to use words like “Wow.”
*Pretty close to the high end of the market.
[*Ability to make silk purses filled with gold out of
sows’ ears: Wegmans-Whole Foods-Stew Leonard’s
and groceries; Jim’s Group and dog-walking;
Donnelly and weather strip installation; DeMar
and plumbing.]
*Execution!
Cirque du
Soleil
“Every time we come to a comfort zone,
we will find a way out.” “No Cloning.”
“‘Reinvent the brand’ with each new
show.” “A typical day at the office for me
‘What is
impossible that I
am going to do
today?’”
begins by asking,
—Daniel Lamarre,
president, Cirque du Soleil
Apple
“Insanely
Great”
EXCELLENCE.
INNOVATE.
OR. DIE.
“I don’t believe in economies of
You don’t get
better by being
bigger. You get
worse.”
scale.
—Dick Kovacevich/Wells Fargo
“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:
Spinoffs
systematically
perform better than IPOs … track
record, profits … “freed from
the confines of the parent
… more entrepreneurial,
more nimble”
—Jerry Knight/ Washington Post/ 08.05
InnoTacs
We become
who we spend
time 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
“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
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
“Experiment
fearlessly”
Source: BW0821.06, Type A Organization Strategies/
“How to Hit a Moving Target”—Tactic #1
“We made mistakes, of course. Most of them were
omissions we didn’t think of when we initially wrote the
software. We fixed them by doing it over and over, again
and again. We do the same today. While our competitors
are still sucking their thumbs trying to make the design
perfect, we’re already on prototype version
#5.
By the time our rivals are
ready with wires and screws, we are on version
#10. It gets back to planning
versus acting: We act from day
one; others plan how to plan—
for months.” —Bloomberg by Bloomberg
tolerate
[encourage?]
failure
“Reward
excellent failures.
Punish mediocre
successes.”
Phil Daniels, Sydney exec
focus
“We will not, I
repeat not, pretend
to be ‘all things to
all people.’”
—CEO, Investec (03.06)
Private Equity-financed
Firm, Best *Case
*Focus! Focus! Focus!
*In a [Big] hurry
*CEO/Top team, “skin
in the game”
*CEO, 100% of time
on the biz
*Merit! Merit!
*Motivated oversight
*Worst case: Rape & Pillage
EXCELLENCE.
1966. 2006.
De-centralization
execution
accountability
6:15a.m.
“If if feels
painful and
scary—that’s
real delegation”
—Caspian Woods, small biz owner
De-centralization
execution
accountability
6:15a.m.
“Execution is
the job of the
business
leader.”
—Larry Bossidy & Ram
Charan/ Execution: The Discipline of Getting Things Done
De-centralization
execution
accountability
6:15a.m.
“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)
De-centralization
execution
accountability
6:15a.m.
EXCELLENCE.
BEDROCK.
TALENT.
Hire very
good
people!
“We believe companies can increase their market cap
50 percent in 3 years. Steve Macadam at Georgia-
changed 20 of his
40 box plant managers
to put more talented,
higher paid managers in
charge. He increased profitability from
Pacific …
$25
million to
$80
million in
—Ed Michaels, War for Talent
2
years.”
EMPHASIZE
THE “SOFT
SKILLS.”
PUT HR AT THE
HEAD OF THE HEAD
TABLE. BEST
PEOPLE. NOBLEST
MISSION.
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; i.e., 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.
Putting HR on
a par with finance
and marketing.
Second:
LIVE FOR
TALENT!
Our Mission
To develop and manage talent;
to apply that talent,
throughout the world,
for the benefit of clients;
to do so in partnership;
to do so with profit.
WPP
< CAPEX
> People!
Brand =
Talent.
EXCELLENCE.
BEDROCK.
LEADERSHIP.
9Ps.
PURPOSE.
PASSION.
Potential.
Presence.
Personal.
PERSISTENCE.
PEOPLE.
Potent.
Positive.
“People want to be part of
something larger than
themselves. They want to be
part of something they’re
really proud of, that they’ll
fight for, sacrifice for ,
trust.”
—Howard Schultz, Starbucks (IBD/09.05)
PURPOSE.
PASSION.
Potential.
Presence.
Personal.
PERSISTENCE.
PEOPLE.
Potent.
Positive.
“Nothing is so
contagious as
enthusiasm.”
—Samuel Taylor Coleridge
PURPOSE.
PASSION.
Potential.
Presence.
Personal.
PERSISTENCE.
PEOPLE.
Potent.
Positive.
“The role of the Director is to create a
space where the actors and
become more
than they’ve ever been
before, more than
they’ve dreamed of
being.”
actresses can
—Robert Altman, Oscar acceptance speech
PURPOSE.
PASSION.
Potential.
Presence.
Personal.
PERSISTENCE.
PEOPLE.
Potent.
Positive.
“You must
be
the change you
wish to see in the
world.”
Gandhi
PURPOSE.
PASSION.
Potential.
Presence.
Personal.
PERSISTENCE.
PEOPLE.
Potent.
Positive.
“Success seems to be
largely a matter
of hanging on
after others have
let go.”
—William Feather, author
PURPOSE.
PASSION.
Potential.
Presence.
Personal.
PERSISTENCE.
PEOPLE.
Potent.
Positive.
‘do’
“Leaders
people.
Period.”
—Anon.
PURPOSE.
PASSION.
Potential.
Presence.
Personal.
PERSISTENCE.
PEOPLE.
Potent.
Positive.
“Beware of the tyranny
of making Small Changes
to Small Things. Rather,
make Big Changes to
Big Things.”
—Roger Enrico, former Chairman, PepsiCo
PURPOSE.
PASSION.
Potential.
Presence.
Personal.
PERSISTENCE.
PEOPLE.
Potent.
Positive.
“[other]
admirals more
frightened of
losing than
anxious to win”
On NELSON:
PURPOSE.
PASSION.
Potential.
Presence.
Personal.
PERSISTENCE.
PEOPLE.
Potent.
Positive.
“Excellence can be obtained if you:
... care more than others think is wise;
... risk more than others think is safe;
... dream more than others think
is practical;
... expect more than others think
is possible.”
Source: Anon. (Posted @ tompeters.com by
K.Sriram, November 27, 2006 1:17 AM)
EXCELLE
ALWAYS