Transcript Connect Tom Peters/01.30.2003 All to All “A Big Electronics Show Is All About Connections” —headline, New York Times/ 01.13.2003/ Consumer Electronics Show > COMDEX.

Connect
Tom Peters/01.30.2003
All to All
“A Big Electronics
Show Is All About
Connections” —headline,
New York Times/ 01.13.2003/
Consumer Electronics Show >
COMDEX
NOKIA
Connecting
People
UBIQUITY! “It’s the cars, not
the tires, that squeal”:
NYT/Circuits/10.25.01): E-ZPass
(6M in NE), tests with McD’s,
gas stations and parking lots
next. OnStar (GM/1.5M). Plus:
“black boxes,” GPS (the case of
the $450 ticket), CA smog
offenders.
“Dawn Meyerreicks, CTO of the Defense Intelligence 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
Imagination!
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
“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
“There’s 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 dreamed
before!
…
“Don’t rebuild.
Reimagine.”
The New York Times Magazine on the future of
the WTC space in Lower Manhattan/09.08.2002
“Suppose—just suppose—that the Web is a new world
we’re just beginning to inhabit. We’re like the earlier
European settlers in the United States, living on the
edge of the forest. We don’t know what’s there and we
don’t know exactly what we need to do to find out: Do
we pack mountain climbing gear, desert wear, canoes,
or all three? Of course while the settlers may not have
known what the geography of the New World was
going to be, they at least knew that there was a
geography. The Web, on the other hand, has no
geography, no landscape. It has no distance. It has
nothing natural in it. It has few rules of behavior and
fewer lines of authority. Common sense doesn’t hold
here, and uncommon sense hasn’t yet emerged.”
David Weinberger, Small Pieces Loosely Joined
“Imagine a world where a citizen
could search the globe to
assemble “my government,”
the ultimate in customized,
customer-centric services. Health
care from the Netherlands,
business incorporation in
Malaysia …”
Don Tapscott
“The e-conomy is one of
re-intermediation, where new
technologies make it possible to
radically increase complexity and
efficiency with the introduction of new
marketplaces. In these markets, value
chains constantly reorganize as
the demands of the consumer and
business change.”
Thomas Koulopoulos, Delphi Group
Wild,
Wacky,
Weird!
Impact No. 1/ Logistics &
Wal*Mart …
Dell … Amazon.com …
Autobytel.com …
FedEx … UPS … Ryder
… Cisco … Etc. … Etc.
… Ad Infinitum.
Distribution:
$400.
Wal*Mart: 13%.
Autobytel:
Source: BW(05.13.2002)
2.5G, 3G, 4G
Windows
Symbian
Java
Bluetooth
Wi-Fi
PCs-PDAs-Cell“phones”
E-business vs. M-business
Etc.
NTT/DoCoMo/i-motion/“remote control
for your life”/“If Tokyo and DoCoMo
are the first capitals of the wireless
Internet industry, Helsinki and Nokia
have been the wellsprings of mobile
telephony—Finland leads the world in
both Internet connections and mobile
phones per capita.”
Source: Howard Rheingold/Smart Mobs
Outsider’s view: (1) Billions are
being spent, even in a down
market. (2) NOBODY HAS A
CLUE AS TO WHO THE
WINNERS—AND LOSERS—
WILL BE. (3) Yet you must play.
Now. Hard. Fast.
The Real “News”: X1,000,000
TowTruckNet.com
Yikes!
“We’re in the Internet
age, and the average
patient can’t email
their doctor.”
Donald Berwick, Harvard Med School
“In an era when terrorists use satellite
US
gatekeepers stand armed
against them with pencils
and paperwork, and archaic
computer systems that don’t
talk to each other.”
phones and encrypted email,
Boston Globe (09.30.2001)
“Once devised in Riyadh, the tasking order took hours
to get to the Navy’s six aircraft carriers—because the
Navy had failed years earlier to procure the proper
communications gear that would have connected the
Navy with its Air Force counterparts. … To
compensate for the lack of communications capability,
the Navy was forced to fly a daily cargo mission from
the Persian Gulf and Red Sea to Riyadh in order to
pick up a computer printout of the air mission tasking
order, then fly back to the carriers, run photocopy
machines at full tilt, and distribute the documents to
the air wing squadrons that were planning the next
strike.” –Bill Owens, Lifting the Fog of War
“Many flaws remained—flaws not from poor
performance, but from an ingrained command
hierarchy and an outmoded concept of war that
had taken root during World War II and then
during the cold war. Desert Storm was a joint
military operation in name rather than in fact. … The
battlefield was divided among service components. …
The fiefdoms existed not only because of tradition,
service rivalry and the egos of the commanders; they
were also there because of technological limitations.
We did not have the communications capability to do it
differently.” –Bill Owens, Lifting the Fog of War
“SOS
: Emergency
Agencies Often Unable to Talk to
Each Other” —headline, p1, USA
Today/11.20.2002
Defective
Orgs!
“The organizations we created have
become tyrants. They have taken
control, holding us fettered, creating
barriers that hinder rather than help
our businesses. The lines that we
drew on our neat organizational
diagrams have turned into walls
that no one can scale or penetrate
or even peer over.” —Frank Lekanne Deprez &
René Tissen, Zero Space: Moving Beyond Organizational Limits.
“The coefficient of
friction associated with
the grunge of business
is amazing!”
Michael Schrage
[ Words to Live By …
“Hierarchy is an
organization with its face
toward the CEO and its ass
toward the customer.”
Kjell Nordström and Jonas Ridderstråle,
Funky 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 (08.00)
“E-business is the
final nail in the coffin
for bureaucracy at
GE.”
Jack Welch/
GE Annual Report 2000
“Hyperlinks subvert
hierarchy!”
The Cluetrain Manifesto
Corporate Resistance to “It”
“It all goes back to fear of
losing control!”
The Cluetrain Manifesto
m-“On” or Out of the Loop
“Managers in Finland always keep
their phones on. Customers expect
fast reactions. And if you can’t reach a
superior, you make many decisions
yourself. Managers who want to
influence decisions of subordinates
must keep their phones open.” —Risto
Linturi, Finnish m-guru, in Howard Rheingold’s Smart
Mobs
“A bureaucrat is an
expensive
microchip.”
Dan Sullivan, consultant and
executive coach
E.g. …
Jeff Immelt: 75% of “admin, back
room, finance” “digitalized” in
years.
Source: BW (01.28.02)
BW Cover/02.2003
“IS YOUR JOB NEXT? A
New Round of GLOBALIZATION Is
Sending Upscale Jobs Offshore.
They Include Chip Design, Basic
Research—even Financial
Analysis. Can America Lose These
Jobs and Still Prosper?”
“The Futility of Size …
“[Regarding this issue] the new
process of virtualization fully asserts
itself. Virtualization is the recognition
that territorial size does not solve
economic problems. … Economic
access must become the substitute for
increasing domain.”
Richard Rosecrance,
The Rise of the Virtual State
[“Don’t own nothin’ if
you can help it. If you
can, rent your shoes.”
F.G.]
“The new dependence on productive assets
located within someone else’s state represents
an unprecedented trust in the integrity and
peacefulness of strangers.”
“In its pure form – an ideal model toward which
many states are tending – the virtual state
carries within it the possibility of an entirely
new system of world politics.”
Richard Rosecrance, The Rise of the Virtual State
“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]
“This is the first meter of a
10-kilometer race.
Eventually, all markets will
come to resemble today’s
foreign exchange market.”
Hamid Biglari, Head of Corporate Strategy,
Citigroup, in “GIGATRENDS”, Wired 04.01
Glimpses of
the Future
“Our entire facility is digital. No paper, no film, no
medical records. Nothing. And it’s all integrated—from
the lab to X-ray to records to physician order entry.
Patients don’t have to wait for anything. The
information from the physician’s office is in
registration and vice versa. The referring physician is
immediately sent an email telling him his patient has
shown up. … It’s wireless in-house. We have 800
notebook computers that are wireless. Physicians can
walk around with a computer that’s pre-programmed. If
the physician wants, we’ll go out and wire their house
so they can sit on the couch and connect to the
network. They can review a chart from 100 miles
away.”—David Veillette, CEO, Indiana Heart Hospital
(Healthleaders/12.2002)
Read It Closely: “We
don’t sell
We
sell speed.”
insurance anymore.
Peter Lewis, Progressive
“By combining powerful
computer technology and other
modern information-based
systems we could make a
revitalized, leaner military force
that is designed to outsee,
outmaneuver and outfight any
foe.” —Bill Owens, Lifting the Fog of War
From:
To:
Weapon v.
Weapon
Org structure v.
Org structure
“The 1990s was a decade of multiple
revolutions—political, economic, technological—
that changed so thoroughly the way we live that
the past no longer seems a good guide to the
future (in fact the past seems precisely the
wrong guide). So it is in the world of military
affairs. The RMA is our opportunity to use the
new information technology to change the very
nature of the military—in a way that could
reinvigorate American political, diplomatic and
economic leadership in the world for decades to
come.” –Bill Owens, Lifting the Fog of War
“[The RMA] means creating a
synergy in new weapons, sensors
and communications that is made
possible by the successful
melding of the technological
applications with an informationage military organization.” –Bill Owens,
Lifting the Fog of War
“Substituting information for
armor is a disconcerting notion
to a tank soldier. … Soldiers will
learn that battle field awareness
can be as comforting as armor.”
Source: “A Different War,” Peter Boyer (The New Yorker/07.01.2002)
“If early soldiers idealized Napoleon or
Patton, network-centric warriors
admire Wal*Mart, where point-of-sale
scanners share information on a near realtime basis with suppliers and also produce
data that is mined to help leaders develop
new strategic or tactical plans. Wal*Mart is
an example of translating information into
competitive advantage.”—Tom Stewart,
Business 2.0
RMA: (1) Battlespace
awareness. (2) C4I.
(Command, control, communications, computers &
(3) Precision
force use.
intelligence.)
The New Infantry Battalion/
New York Times/12.01.2002
“Pentagon’s Urgent Search for
Speed.” 270 soldiers (1/3rd normal
complement); 140 robotic off-road
armored trucks. “Every soldier is a
sensor.” “Revolutionary capabilities.”
Find-to-hit: 45 minutes to 15 minutes
… in just one year.
Old: Heavy. Seek direct contact.
New: Stryker brigade. Stealth.
Avoid direct contact—“choose your
moment.” “Depend heavily on
information technology, and
enhanced intelligence, surveillance
and reconnaissance capabilities.”
Source: “A Different War,” Peter Boyer (The New Yorker/07.01.2002)
“We must not only transform our armed forces
but the Defense Department that serves them—
by encouraging a culture of creativity and
intelligent risktaking. We must promote a more
entrepreneurial approach: one that encourages
people to be proactive, not reactive, and to
behave less like bureaucrats and more like
venture capitalists; one that does not wait for
threats to emerge and be ‘validated,’ but rather
anticipates them before they appear and
develops new capabilities to dissuade them and
deter them.” —Donald Rumsfeld, Foreign Affairs
Eric’s Army
Flat.
Fast.
Agile.
Adaptable.
Light … But Lethal.
Brand You/ Talent/ “I Am An ARMY Of
One.”
Info-intense.
Network-centric.
“A seismic shift is underway in
healthcare. The Internet is
delivering vast knowledge and new
choices to consumers—raising their
expectations and, in many cases,
handing them the controls.
[Healthcare] consumers are driving
radical, fundamental change.”
Deloitte Research, “Winning the Loyalty
of the eHealth Consumer”
Duh???*: “We’ve come up with a solution.
… We’ve begun to create a form of
communications that is much better than
we had before, and that’s allowed us to
gather better data. We’ve finally realized
that we have an interplay with other
hospitals and with pre-hospital.”—Dr. Ben
Honigman, ER, U. Colorado Hospital, on “diverts” (Denver
Post/05.05.02)
*Internet + Data + Open data exchange + Barrier busting
Masters of information acquisition,
manipulation, dissemination, and
utilization.
Networkmeisters.
Agile.
Temporary.
Virtual is thy name.
Motto: Applied information is power/wealth.
What’s the Common Denominator?
The Dutch … the British … the
Rothschilds … Cargill … Sumitomo …
the KGB … the CIA … Mossad …
Enron … Wal*Mart … McKinsey …
FedEx … UPS … Mr. Speaker … Henry
Kissinger … Executive secretaries …
the Corner Grocer … Women-ingeneral?
Question
Authority!
“Parents, doctors, stockbrokers,
even military leaders are starting to
lose the authority they once had.
There are all these roles premised on
access to privileged information. …
What we are witnessing is a
collapse of that advantage,
prestige and authority.”
Michael Lewis, next
“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 Nordström and Jonas Ridderstråle,
Funky Business
“Supply Chain” 2000:
“When Joe Employee at Company X launches his
browser, he’s taken to Company X’s personalized
home page. He can interact with the entire scope of
Company X’s world – customers, other employees,
distributors, suppliers, manufacturers, consultants.
The browser – that is, the portal – resembles a My
Yahoo for Company X and hooks into every network
associated with Company X. The real trick is that Joe
Employee, business partners and customers don’t
have to be in the office. They can log on from a cell
phone, Palm Pilot, pager or home office system.”
Red Herring (09.2000)
“In the second half of the twentieth century a new
society of individuals emerged—a breed of people
unlike any the world has ever seen. Educated,
informed, traveled, they work with their brains, not
their bodies. They do not assume that their lives can
be patterned after their parents’ or grandparents’.
Throughout human history, the problem of identity was
settled in one way—I am my mother’s daughter; I am
my father's son. But in a discontinuous and
irreversible break with the past, today’s individuals
seek the experiences and insights that enable them to
find the elusive pattern in the stone, the singular
pattern that is ‘me.’ ” —Shoshana Zuboff & James Maxmin,
The Support Economy
Pulling It All
Together I
“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)
WHAT CAN BROWN DO FOR YOU?
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
“Our mission is to go from being the
world’s premier timeshare—which is a
large idea in a small industry—to being
what we call the market makers for
global travel and leisure. We need
to enable developers to be involved in
more travel and leisure products,
rather than just the timeshare side.”—
Ken May, RCI (Source: Developments)
Is There a There There: The Ericsson Case
1. 50+% Mfg to Solectron/Flextronics
2. Substantial R&D to India
3. Division for licensing technology
4. JV with Sony on “crown jewel” handsets
5. Net: “a wireless specialist that
depends on services more than
manufacturing, on knowledge more
than metal”
Source: BW/11.04.02
HUMANA’s Dreams. Emphesys: “Put everything
on the Internet.” CEO Mike McCallister, charge to
200-person “outside” I’net unit: “Imagine an
ideal Web-based health insurance system and
then create a product as close as possible to
that vision.” Start with own employees:
SmartSuite. Member employees: “Plan their
own coverage and shoulder more costs.” Dell
is model: “Fully customized health for every
individual.” Marketing pitch for employers:
“Buy choice for employees through a single
source—Humana.”
Source: Fortune/05.27.2002
“No longer are we only an
insurance provider. Today,
we also offer our customers the
products and services that help them
achieve their dreams, whether it’s
financial security, buying a car, paying
for home repairs, or even taking a
dream vacation.”—Martin Feinstein, CEO,
Farmers Group
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).
Everybody’s Doin’ It!
“The leading Indian
outsourcers reckon that the
key to their long-term
prosperity is bagging ever
larger deals and moving
ever higher up the value
chain.” —The Economist/01.11.2003
From “Tank” to Future Combat
System (e.g., “virtual tank”)
Analogous to switch from “circuit
breaker makers” to GE Industrial
Systems, or “guys in brown trucks”
to “Let Brown do it.”
Source: “A Different War,” Peter Boyer (The New Yorker/07.01.2002)
“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 “Experience Ladder”
Experiences
Services
Goods
Raw Materials
Ladder Position
Measure
Solutions
Success
(Experiences)
Services
Satisfaction
Goods
Six-sigma
Pulling It All
Together II
Case:
CRM
Anne Busquet/ American Express
Not: “Age of the Internet”
“Age of
Customer
Control”
Is:
Amen!
“The Age of the
Never Satisfied
Customer”
Regis McKenna
“CRM has, almost
universally, failed
to live up to
expectations.”
Butler Group (UK)
Psych 101:
Strongest Force on Earth?
My need to be in
perceived control
of my universe!
Welcome to D.I.Y. Nation: “Changes
in business processes will emphasize
self service. Your costs as a business
go down and
perceived
service
goes up because
customers are conducting it
themselves.”
Ray Lane, Oracle
FT: “The aim [of
CRM] is to make customers
feel as they did in the preelectronic age when service
was more personal.”
No! No! No!
Rebuttal: (1) Service sucked in the
“pre-electronic” age. (2) NewGen
believes in the screen! (So do I.)
CGE&Y (Paul Cole): “Pleasant
“Systemic
Opportunity.” “Better job
of what we do today” vs. “Rethink overall
enterprise strategy.”
Transaction” vs.
Message CRM: Madness = 600 CRM
vendors. ???: “Do it all” or “do
something.” Past: over-invest in lowvalue customers. Idea: better
experience, not off-load work to
customer. Relationship = f(dialogue
& knowledge & duration). Key: new
attitudes, DESTRUCTION of
functional barriers to info & action.
Revolution
Now!
“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
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.
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
Jargon Bath!
Bureaucracy free …
Systemically integrated …
Internet intense …
Knowledge based …
Time and location free …
“Instantly” responsive …
Customer centric …
Mass customization enabled.
Translation …
Bureaucracy free = Flat org, no B.S.
Systemically integrated = Whole supply chain
tightly wired/ friction-free
Internet intense = Do it all via the Web
Knowledge based = Open access
Time and location free = Whenever, wherever
“Instantly” responsive = Speed demons
Customer centric = Customer calls the shots
Mass customization enabled = Every product
and service rapidly tailored to client
requirements
Supply-chain
Optimization
From:
Design-chain
Optimization
To:
Source: Cadence Design Systems
Q: Is that all there is?
A: Quite possibly.
“Roche’s New Scientific Method”—Fast
Company. And? X-Functional
Teams (NO STOVEPIPES!).
“Fail fast.” “The only way to
embrace a technological revolution,
Roche has discovered, is to unleash
an organizational revolution.”
Innovation & Speed’s “New Basics”*
1. XFTs are the “culture.”
2. Project-centric.
3. Open “talent market.”
4. “Cause-based” projects.
5. Ubiquitous “open systems”
IS—at home & throughout
supply chain. Web based.
6. F-L-A-T.
7. EVP (S.O.U.B), etc.
*Innovation, Speed, CRM, “Experience”/ “Solution” demand this
“If you don’t like
change, you’re
going to like
irrelevance even
less.” —General Eric Shinseki, Chief of
Staff, U. S. Army