Transcript Tom Peters’ X25*: EXCELLENCE. ALWAYS. Rompetrol/Annual Management Meeting Paris/02 December 2006 *In Search of Excellence 1982-2007

Tom Peters’ X25*:
EXCELLENCE.
ALWAYS.
Rompetrol/Annual Management Meeting
Paris/02 December 2006
*In Search of Excellence 1982-2007
Slides* at …
tompeters.com
*also “LONG”
EXCELLENCE.
ALL . YOU.
NEED. TO.
KNOW.
EXCELLENCE.
ALL. YOU. NEED.
TO. KNOW.
ANYWHERE.
ANY MARKET.
ANY TIME.
Jim’s
Group
EX-CELLENCE. NOT .
“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
“Forbes100” from 1917 to 1987
: 39
members of
the Class of ’17 were alive in ’87; 18 in ’87
F100; 18 F100 “survivors” significantly
underperformed the market;
just
2 (2%), GE & Kodak,
outperformed the market from
1917 to 1987.
S&P 500 from 1957 to 1997:
’97;
74 members of the Class of ’57 were alive in
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
Welcome to the “Club of Shattered Dreams”:
Of Korea’s
Top 100
7
companies in 1955, only
were
still on the list in 2004. The 1997
crisis “destroyed
half of Korea’s
30 largest conglomerates.”
Source: “KET Issue Report,” Kim Jong Nyun (14.05.2005)
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%
The last
word:
There is
no last
word.
Flat as a Pancake (Or Worse)
Wal*Mart … Dell …
Intel … Home Depot
… Microsoft … GE
EXCELLENCE.
STARTERS.
BASICS.
K.I.S.S.
“Why in the
world did
you go to
Siberia?”
Raging Success =
P-SQUARED.
C. E-CUBED.
People.
Product.
Clients.
Execution.
Enthusiasm.
Excellence.
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”
The HayGroup Six
1. Accountability
2. X-functional coordination
3. Execution/K.I.S.S.
4. Talent management
5. Growth, Customers take priority
6. Self-management, Empathy, Teamwork
EXCELLENCE.
ASPIRATION.
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.
An emotional,
vital, audacious, innovative, joyful,
frightening, risky, creative,
entrepreneurial endeavor that breathes
life & fire into our work & life & elicits
maximum concerted human potential
in the wholehearted effort to help
others ** [**employees, clients, suppliers,
communities, owners, temporary partners] succeed &
profit & imagine & reach places they’d
never dreamed they could go.
Business* (*at its “excellent” best) can be:
“In-sane-
ly-great”
EXCELLENCE.
DEFINED.
AGENDA.
SETTER.
Great Companies …
SET
THE
AGENDA.*
* “disturb the sleep of …
(PERIOD.)
TP#1*:
Netscape!
*Where would you rather have worked for those 5 years, Netscape
or IBM-HP-Microsoft-Oracle? (Where, 25 years from now, would you
rather to be able to tell someone—e.g., grandchild—that you worked?)
Built to Last
vs
Built to
Change/Rock
the World
EXCELLENCE.
INNOVATE.
OR. DIE.
“It is not the
strongest of the
species that survives,
nor the most
intelligent, but the
one most responsive
to change.”
—Charles Darwin
EXCELLENCE.
INNOVATE.
ALL. WRONG.
“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
1
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:
“Not a single company that
qualified as having made a
sustained transformation
ignited its leap with a big
acquisition or merger. Moreover,
comparison companies—those that failed to make a
leap or, if they did, failed to sustain it—often tried to
make themselves great with a big acquisition or
merger. They failed to grasp the simple truth that while
you can buy your way to growth, you cannot buy your
way to greatness.” —Jim Collins/Time/2004
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
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
There’s “A”
and then
there’s “A.”
EXCELLENCE.
INNOVATE.
TACTICS.
Try it. Try it. Try it
Try it. Try it. Try it
ry it. Try it. Try i
Try it. Try it. Try it
Try it. try it. Try it
Try it. try it. Try it
READY.
FIRE!
AIM.
Ross Perot (vs “Aim! Aim! Aim!” /EDS vs GM/1985)
“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
“You miss 100
percent of the
shots you never
take.”
—Wayne Gretzky
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”
tolerate
[encourage?]
failure
Sam’s
Secret
#1!
“Reward
excellent failures.
Punish mediocre
successes.”
Phil Daniels, Sydney exec
Speed/
Tempo
“We don’t sell
insurance anymore.
We sell
speed.”
Peter Lewis, Progressive
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
measure
Innovation Index: How many
of your Top 5 Strategic
Initiatives/Key Projects
score 8 or higher [out of 10] on a
“Profound”/
“Amazing”/“Gamechanger” Scale?
EXCELLENCE.
1966. 2006.
De-central-iza-tion!
“If if feels
painful and
scary—that’s
real delegation”
—Caspian Woods, small biz owner
The True Logic* of Decentralization:
6 divisions = 6 “tries”
6 divisions = 6 DIFFERENT leaders =
6 INDEPENDENT “tries” = Max
probability of “win”
6 divisions = 6 very DIFFERENT
leaders = 6 very INDEPENDENT
“tries” = Max probability of “far
out”/”3-sigma” “win”
*“Driver”: Law of Large #s
Ex-ecu-tion!
“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
Projects =
Goal (“Vision”)
Milestones =
Project
Rapid Review +
Truth-telling =
accountability
Ac-counta-bil-ity!
“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)
6:15A.M.
4/40:
De-centralization
execution
accountability
6:15a.m.
The HayGroup Six
1. Accountability
2. X-functional coordination
3. Execution/K.I.S.S.
4. Talent management
5. Growth, Customers take priority
6. Self-management, Empathy, Teamwork
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.”
“The person who is a little less
conceptual but is absolutely determined
to succeed will usually find the right
people and get them together to achieve
objectives. I’m not knocking education
or looking for dumb people. But if you
have to choose between someone with a
staggering IQ and an elite education
who’s gliding along, and someone with a
lower IQ but who is absolutely
determined to succeed, you’ll always do
better with the second person.”
—Larry Bossidy (Larry Bossidy & Ram Charan/
Execution: The Discipline of Getting Things Done)
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:
SO YOU’RE A
“PEOPLE
PERSON”?
PROVE IT.
“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
SO YOU’RE A
“PEOPLE
PERSON”?
PROVE IT.
< CAPEX
> People!
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
EXCELLENCE.
BEDROCK.
LEADERSHIP.
9Ps.
PURPOSE.
PASSION.
Potential.
Presence.
Personal.
PERSISTENCE.
PEOPLE.
Potent.
Positive.
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)
Ah, kids: “What is your vision for
the future?” “What have you
accomplished since your first book?”
“Close your eyes and imagine me
immediately doing something about
what you’ve just said. What would it
be?” “Do you feel you have an
obligation to ‘Make the world a
better place’?”
PURPOSE.
PASSION.
Potential.
Presence.
Personal.
PERSISTENCE.
PEOPLE.
Potent.
Positive.
“Nothing is so
contagious as
enthusiasm.”
—Samuel Taylor Coleridge
“Whenever anything is
being accomplished, I
have learned, it is being
done by a monomaniac
with a mission.”
—Peter Drucker
PURPOSE.
PASSION.
Potential.
Presence.
Personal.
PERSISTENCE.
PEOPLE.
Potent.
Positive.
“In the end, management
doesn’t change culture.
Management
invites
the workforce itself to
change the culture.”
—Lou Gerstner
“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.
PURPOSE.
PASSION.
Potential.
Presence.
Personal.
PERSISTENCE.
PEOPLE.
Potent.
Positive.
“You must
be
the change you
wish to see in the
world.”
Gandhi
“The First step in a
‘dramatic’
‘organizational change
program’ is obvious—
dramatic personal
change!” —RG
PURPOSE.
PASSION.
Potential.
Presence.
Personal.
PERSISTENCE.
PEOPLE.
Potent.
Positive.
Relentless: “One of
my superstitions had always been
when I started to go anywhere or
not to
turn back , or stop,
to do anything,
until the thing intended was
accomplished.” —Grant
“It is no use saying
‘We are doing our
best.’ You have got
to succeed in doing
what is necessary.”
—WSC
"The reasonable man adapts
himself to the world. The
unreasonable one persists in
trying to adapt the world to
himself. Therefore, all
progress depends upon the
unreasonable man.” —GB Shaw,
Man and Superman: The Revolutionists' Handbook.
“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
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!
PURPOSE.
PASSION.
Potential.
Presence.
Personal.
PERSISTENCE.
PEOPLE.
Potent.
Positive.
“[other]
admirals more
frightened of
losing than
anxious to win”
On NELSON:
The greatest danger
for most of us
is not that our aim is
too high
and we miss it,
but that it is
too low
and we reach it.
Michelangelo
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
EXCELLENCE.
THE LEADERSHIP23.
Leadership23/ML
1.
2.
3.
4.
5.
6.
7.
8.
Enthusiasm. Energy. Exuberance.
Action. Execution.
Tempo. Metabolism.
Relentless.
Master of Plan B.
Accountability.
Meritocracy.
Leaders “do” people. Mentor. (“Success
creation business.”)
9. Women. Diversity.
10. Integrity. Credibility. Humanity. Grace.
11. Realism.
12. Cause. Adventures. Quests.
Leadership23/ML
13. Legacy.
14. Best story wins.
15. On the edge. (“Wildest chimera of a
moonstruck mind.”)
16. “Reward excellent failures. Punish
mediocre successes.”
17. Different > Better. (“Only ones who do
what we do.”)
18. MBWA. Customer MBWA.
19. Laughs.
20. Repot. Curiosity. Why?
21. You = Calendar. “To Don’t.” Two.
22. Excellence. Always.
23. Nelsonian! (“Other admirals more afraid
of losing than anxious to win.”)
“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