Transcript Tom Peters’ Re-Imagine! Business Excellence in a Disruptive Age Staffing Industry Analysts/ Chicago/03.23.2004 Slides at … tompeters.com.

Tom Peters’
Re-Imagine!
Business Excellence
in a Disruptive Age
Staffing Industry Analysts/
Chicago/03.23.2004
Slides at …
tompeters.com
1. All Bets
Are Off.
“Uncertainty is the only
thing to be sure of.” —Anthony Muh,
head of investment in Asia, Citigroup Asset Management
“If you don’t like change,
you’re going to like
irrelevance even less.” —General Eric
Shinseki, Chief of Staff,
U. S. Army
Jobs
Technology
Globalization
War, Warfighting &
Security
Jobs
New Technology
Globalization
War, Warfighting &
Security
The Perfect (Jobs) Storm
Off-shoring
WC Automation
Reluctance to hire
“14 MILLION
service jobs are in
danger of being
shipped overseas” —
The Dobbs Report/USN&WR/11.03/re new UCB
study
“Income Confers No
Immunity as Jobs
Migrate”
—Headline/USA Today/02.04
We Are Not Alone: “One
Singaporean worker
costs as much as …
3 … in Malaysia
8 … in Thailand
13 … in China
18 … in India.”
Source: The Straits Times/08.18.03
“There is no job
that is America’s
God-given right
anymore.”
—Carly Fiorina/ HP/
01.08.2004
“WHAT ARE PEOPLE
GOING TO DO WITH
THEMSELVES?” —Headline/
Fortune/ 11.03 (“We should finally admit that we do not
and cannot know, and regard that fact with serenity
rather than anxiety.”)
Jobs
Technology
Globalization
War, Warfighting &
Security
<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
Jobs
Technology
Globalization
War, Warfighting &
Security
“Asia’s rise is the economic event
of our age. Should it proceed as it
has over the last few decades, it
will bring the two centuries of
global domination by Europe and,
subsequently, its giant North
American offshoot to an end.”
—Financial Times (09.22.2003)
“The world has arrived at a rare
strategic inflection point where
nearly half its population—living in
China, India and Russia—have been
integrated into the global market
economy, many of them highly
educated workers, who can do
just about any job in the world.
We’re talking about three billion
people.” —Craig Barrett/Intel/01.08.2004
Indian GDP/1990-2002: Ag,
34% to 21%; services,
40% to 56%
Source: The Economist/02.04
Level 5 (top)
ranking/Carnegie Mellon
Software Engineering
Institute: 35 of 70
companies in world are
from India
Source: Wired/02.04
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
Jobs
Technology
Globalization
War, Warfighting &
Security
“This is a dangerous world and
it is going to become more
dangerous.”
“We may not be interested in
chaos but chaos is interested
in us.”
Source: Robert Cooper, The Breaking of Nations:
Order and Chaos in the Twenty-first Century
Staffing Industry Rant: Tom’s Top Ten
1. Permanent employment is cooked.
2. This is your moment.
3. “Staffing” is not a commodity business. It is
about … PEOPLE!
4. Client “GPA” = 1.98; modal “Grade”: D; A < 10%.
(And you wonder why margins are slipping?)
5. Consolidation/“bulking up” is not the answer.
6. He who adds the most value wins. (P.S.: There
are no limits!)
7. Add value in niches.
8. The V.A. game: Eat or be eaten!
9. Talent rules! Best talent rules (more)!
10. There is/should be no difference between a
staffing firm’s “roster” and the New York Yankees!
2. The
Destruction
Imperative.
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
Rate of Leaving F500
1970-1990:
Source: The Company, John Micklethwait & Adrian
Wooldridge (1974-200: One-half biggest 100 disappear)
“Far from being a
source of comfort,
bigness became a code
for inflexibility.”
—John Micklethwait
& Adrian Wooldridge, The Company
“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
“Conglomerates
don’t work.” —James
Surowiecki, The New Yorker (07.01.2002)
“MERGERS: Why Most Big
Deals Don’t Pay Off. A
BusinessWeek analysis
shows that 61% of buyers
destroyed shareholder
wealth.” —BusinessWeek/10.14.2002
Market Share, Anyone?
— 240 industries; market-share leader
is ROA leader 29% of the time
— Profit / ROA leaders: “aggressively
weed out customers who generate
low returns”
Source: Donald V. Potter, Wall Street Journal
Winning the Merger Game Is Possible
--Lots of deals
--Little deals
--Friendly deals
--Stay close to core competence
--Strategy is easy to understand
Source: “The Mega-merger Mouse Trap”/Wall Street
Journal/02.17.2004/David Harding & Sam Rovit, Bain & Co./re
Comcast-Disney
“Acquisitions are about
buying market share.
Our challenge is to
create markets. There
is a big difference.”
Peter Job, CEO, Reuters
3. IS/ IT/ Web:
“On the Bus” or
“Off the Bus.”
“Dawn Meyerreicks, CTO of the Defense Information 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
“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
4. The White
Collar
Revolution.
Steel: 75,000,000 tons in
’82 to 102,000,000 tons in
’02. 289,000 steelworkers
in ’82 to 74,000
steelworkers in ’02.
Source: Fortune/11.24.03
E.g. …
Jeff Immelt: 75% of “admin, back
room, finance” “digitalized” in
years.
Source: BW (01.28.02)
“A bureaucrat is an
expensive
microchip.”
Dan Sullivan, consultant and
executive coach
“Don’t own nothin’
if you can help it.
If you can, rent
your shoes.”
F.G.
“Organizations will still be
critically important in the world,
but as ‘organizers,’ not
‘employers’!” — Charles Handy
Ford: “Vehicle
brand
owner” (“design, engineer, and
market, but not actually make”)
Source: The Company, John Micklethwait & Adrian Wooldridge
5. The “PSF
Solution”:
The Professional
Service Firm Model.
Answer: PSF!
[Professional Service Firm]
Department Head
to …
Managing Partner,
HR [IS, etc.] Inc.
TP to HRMAC:
You are the …
Rock Stars
of the Age of
Talent!
DD$21M
6. The Heart of the Value
Added Revolution:
PSFs Unbound/ The
“Solutions
Imperative.”
“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
“Companies have defined
so much ‘best practice’
that they are now more or
less identical.”
Jesper Kunde, A Unique Moment
“We make over three new
product announcements a
day. Can you remember
them? Our
customers
can’t!”
Carly Fiorina
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).
“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)
“SCS”/Supply Chain
Solutions: 750 locations;
$2.5B; fastest growing
division; 19 acquisitions,
including a bank
Source: Fast Company/02.04
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
John Deere
Landscapes:
“This is our
future.”
“ ‘Architecture’ is
becoming a commodity.
Winners will be ‘Turnkey
Facilities Management’
providers.”
SMPS Exec
Omnicom:
60%
(of
$7B) from marketing services
And the Winners Are …
Televisions –12%
Cable TV service +5%
Toys -10%
Child care +5%
Photo equipment -7%
Photographer’s fees +3%
Sports Equipment -2%
Admission to sporting event +3%
New car -2%
Car repair +3%
Dishes & flatware -1%
Eating out +2%
Gardening supplies -0.1%
Gardening services +2%
Source: WSJ/05.16.03
IBM/Q3/10.15.03/Rev: +5%
Services/Consulting: +11%
Software: +5%
Hardware: -5%
PCs: -2%
Technology/Chips: -33%
FEES! FEES! FEES!
—Cover Story, BW/09.29.03
7. A World of
Scintillating
“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
“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
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
WHAT CAN BROWN DO FOR YOU?
The “Experience Ladder”
Experiences
Services
Goods
Raw Materials
“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
<TGW
vs.
>TGR
Duet … Whirlpool … “washing machine” to
“fabric care system” … white goods: “a sea of
undifferentiated boxes” … $400 to $1,300 …
“the Ferrari of washing machines” …
consumer: “They are our little mechanical
buddies. They have personality. When they are
running efficiently, our lives are running
efficiently. They are part of my family.” …
“machine as aesthetic showpiece” … “laundry
room” to “family studio” / “designer laundry
room” (complements Sub-Zero refrigerator and
home-theater center)
Source: New York Times Magazine/01.11.2004
8. Boss Job One:
The Talent
Obsession.
Age of Agriculture
Industrial Age
Age of Information Intensification
Age of Creation Intensification
Source: Murikami Teruyasu, Nomura Research Institute
Brand =
Talent.
“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
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
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)
My ideal
job!
9. Leading in Totally
Screwed Up Times: The
Passion Imperative.
“Create a
‘cause,’ not a
‘business.’ ”
G.H.:
“Reward
excellent
failures. Punish
mediocre successes.”
Phil Daniels, Sydney exec (and, de facto, Jack)
“In Tom’s world, it’s always
better to try a swan dive and
deliver a colossal belly flop
than to step timidly off the
board while holding your
nose.”—Fast Company /October2003
Staffing Industry Rant: Tom’s Top Ten
1. Permanent employment is cooked.
2. This is your moment.
3. “Staffing” is not a commodity business. It is
about … PEOPLE!
4. Client “GPA” = 1.98; modal “Grade”: D; A < 10%.
(And you wonder why margins are slipping?)
5. Consolidation/“bulking up” is not the answer.
6. He who adds the most value wins. (P.S.: There
are no limits!)
7. Add value in niches.
8. The V.A. game: Eat or be eaten!
9. Talent rules! Best talent rules (more)!
10. There is/should be no difference between a
staffing firm’s “roster” and the New York Yankees!
“If things seem
under control,
you’re just not
going
fast enough.”
Mario Andretti