Change2001 Tom Peters Distinct … or Extinct San Francisco/01 May 2001.

Change2001

Tom Peters

Distinct … or Extinct

San Francisco/01 May 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

“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)

<1000A.D.: paradigm shift: 1000s of years1000: 100 years for paradigm shift

1800s: > prior 900 years1900s: 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

CEOs appointed after

1985 are 3X more likely to be fired than CEOs appointed before 1985

Warren Bennis, MIT Sloan Management Review

“We are in a

brawl with no rules.”

Paul Allaire

The Kotler Doctrine:

1965-1980: R.A.F.(Ready.Aim.Fire.)

1980-1995: R.F.A.(Ready.Fire!Aim.)

1995-????: F.F.F.(Fire!Fire!Fire!)

“It used to be that the big

ate the small. Now the fast eat the slow.”Geoff Yang, IVP/ (Institutional

Venture Partners)

Read It Closely: “We don’t sell insurance

anymore. We sell speed.”

Peter Lewis, Progressive

Part I: Brand InsidePart 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

The Gales of Creative Destruction

+29M = -44M + 73M

+4M = +4M - 0M

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 Org: Lean, Linked,

Electronic & Malleable

Headline: “Bank of America to Cut … 10,000 Jobs”

“Middle-level and senior managers are expected to be

the principal targets of the job cutbacks.”

Source: The New York Times (07.29.2000)

White Collar

Revolution!

108 X 5vs.

8 X 1** 540 vs. 8 (-98.5%)

IBM’s Project Eliza!

Brand Inside

Brand Work: The Professional Service

Firm Model & The WOW Project

So what will be the Basic Building

Block of the New Org?

Every job done in W.C.W. is

also done “outside”

…for profit!

Answer: PSF![Professional Service Firm]

Department Head

to …

Managing Partner, HR [IS, etc.] Inc.

11 September 2000

09.11.2000: HP bids

$18,000,000,000for

PricewaterhouseCoopersConsulting business!

[“These days, building the best server isn’t enough. That’s the

price of entry.”

Ann Livermore, Hewlett Packard]

% Rev From Service:

GE (80%) … IBM (80%) … HP … Sun????

Maybe one [or more] of your “PSFs”

becomes the tail that wags the dog????? [E.g.: engineering, IS-logistics-

customer service]

The Raw Material …

The WOW Project!

“Reward excellent failures. Punish

mediocre successes.”

Phil Daniels, Sydney exec

“Every project we take on starts with a question:

How can we do what’s never been

done before?”Stuart Hornery, CEO, Lend Lease

My GOAL: Radicalize Audiences!*

*Hint: These are Radical times!

Your Current Project?

1. Another day’s work/Pays the rent.4. Of value.7. Pretty Damn Cool/Definitely subversive.10. WE AIM TO CHANGE THE WORLD. (Insane!/Insanely Great!/WOW!)

Am I full of CRAP? Wearing ROSE-

COLORED GLASSES?

Work-Life Balance????

Madeleine McGrath & the London

Suicide Hotline

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

MasteryRolodex Obsession (vert. to horiz. “loyalty”)

Finishing SkillsEntrepreneurial Instinct

CEO/Leader/BusinesspersonMistress of Improv

Sense of HumorIntense Appetite for Technology

Groveling Before the YoungEmbracing “Marketing”

Passion for Renewal

Invent. Reinvent. Repeat.

Source: HP banner ad

Brand Inside

Brand Talent: The Great War for Talent

“When land was the productive asset, nations

battled over it. The same is happening now for talented people.”

Stan Davis & Christopher Meyer, futureWEALTH

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

Macadam at Georgia Pacific changed 20 of his 40 box plant managers to put

more talented, higher paid managers in charge. He increased

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.

“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)

“Why focus on these late teens and twenty-somethings? 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]

“Diversity defines the health and wealth of nations in a new century.

Mighty is the mongrel. … The hybrid is hip. The impure, the mélange, the adulterated, the

blemished, the rough, the black-and-blue, the mix-and-match – these people are inheriting

the earth. Mixing is the new norm. Mixing trumps isolation. It spawns creativity,

nourishes the human spirit, spurs economic growth

and empowers nations.”

G. Pascal Zachary, The Global Me: New Cosmopolitans and the Competitive Edge

“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

Women and new-economy

management …

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 skillsRelationship-centric

Less “rank consciousness”Self determinedTrust sensitive

IntuitiveNatural “empowerment freaks” [less

threatened by strong people]Intrinsic [motivation] > Extrinsic

“Boys are trained in a way that will make

them irrelevant.”

Phil Slater

Okay, you think I’ve gone tooooo far.

How about this: DO ANY OF YOU SUFFER

FROM TOO MUCH TALENT?

63 of 2,500 top earners in F500

8% Big 5 partners

14% partners at top 250 law firms

43% new med students; 26% med

faculty; 7% deans

Source: Susan Estrich, Sex and Power

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

Axiom: Never hire anyone without an aberration in their

background!

Beware Lurking HR Types … One size

NEVER fits all. One size fits one. Period.

48 Players = 48 Projects =

48 different success measures

“Firms will not ‘manage the careers’ of their employees. They

will provide opportunities to enable the employee to develop

identity and adaptability and

thus be in charge of his or her own career.”

Tim Hall et al., “The New Protean Career Contract”

“H.R.” to “H.E.D.” ???

Human

Enablement

Department

MantraM3

Talent = Brand

What’s your company’s …

EVP?Employee Value Proposition, per Ed Michaels et al., The War for Talent

EVP = Challenge, professional growth, respect, satisfaction, opportunity, reward

Source: Ed Michaels et al., The War for Talent

HR Folks: YOU – not

“marketing” - “OWN” THE “BRAND PROMISE”!

(If you wish.)

Brand Inside

Brand Action:Getting Started … a

Personal Perspective

The following slide begins the “Boss-Free Implementation of

Stuff That Matters” Section. The slides in this section are heavily

annotated.

Use Normal or Notes Page View to access the notes.

Topic: Boss-free

Implementation of STM /Stuff That

MATTERS!

THE IDEA

“4Fs”: Find a

Fellow Freak

Faraway

World’s Biggest Waste …

Selling “Up”

Heart of the Matter

F2F!/K2K!/1@T/R.F.A.*

*Freak to Freak/Kook to Kook/One at a Time/ Ready.Fire!Aim.

THE PROCESS

Summary

Boss-free “Selling” of a WOW! Idea

Get a Zany [WOW!] Idea/Shop it with a coupla good pals.

Surface [using your network] a list of [operational] folks who might be interested in playing.

Call, visit and choose a coupla prospects.Engage the prospects [they must “own” “it”].

Concoct a rough plan and a prototype schedule. Move forward [Ready. Fire! Aim.].

Keep on recruitin’.Get the Test Customer to recruit some buddies for Round #2 tests [Meanwhile Customer #1 expands

program]

Boss-free “Selling” of a WOW! Idea (cont.)

Get going with Round #2 prototypesStart conscious “buzz building” [Let “the word” of

successful tests trickle out]Have the “line dudes” put on a demo for, say, a coupla

“cool” regional bossesEtc.Etc.

Have the growing Network of Converts initiate a Major Program Proposal

Etc.Etc.

Boss Advice I: The “Poster Kids”/ “End Run”/“Skunks” Strategy

Chat up a cross-section of the Org.Develop a tentative list of Pioneers/“Skunks.”

Hang with those Skunks, discover their “stuff I’ve long wanted to do” list/Encourage

them to “Do it!”Begin to showcase their developing results

[with your public stamp of approval]. Dip deep[ish] and early - promote a Super

Skunk into the [New] Establishment.Incorporate the Skunks’ work into your Vision

Chatter/Welcome ALL aboard!

Boss Advice II: Starting the “Hmmmmm?” Buzz

“Event Marketing”: Idea Faire/Internal “Tradeshow”/Bragfest. Or: Seminar Series, with

“strange” outsiders/insiders (not the usual suspects); intense Web-based followup and community creation

(Neighborhoods of Common Interest).

“Play Fund,” around a topic of importance. Small-ish grants. Easy application process. Short-ish

timeframes. (Gerstner @ American Express re AI.)

“Scholarships” (not the usual suspects). Sabbatical funds (contest?). Placement on customer or supplier

project teams (not the usual suspects).

Boss Advice III: The “Flypaper Strategy”

Don’t try to “change the culture”!

Create fly paper which attracts Mavericks & Pirates!

Let the new culture (which is lurking around you) find you!

Publicize, at the appropriate moment, the New Hall of Fame; help the New Culture Adherents create & nurture Community!

BOTTOM LINE

The Enemy!

Joe J. Jones Joe J. Jones 1942 – 2001 1942 – 2001

HE WOULDA DONE SOME HE WOULDA DONE SOME

REALLY COOL STUFF REALLY COOL STUFF

BUT …BUT …

HIS BOSS WOULDN’T LET HIM! HIS BOSS WOULDN’T LET HIM!

The greatest dangerfor most of us

is not that our aim istoo high

and we miss it,but that it is

too lowand we reach it.

Michelangelo

Brand InsideReprise:

THINK WEIRD: The High Standard

Deviation Enterprise

Saviors-in-Waiting

Disgruntled CustomersFringe CompetitorsRogue Employees

Edge SuppliersWayne 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

JY: Who do you fear most, big companies or start-ups?

JC: I have a list with a dozen little companies I’m tracking closely. Guys

who can start with a fresh sheet of paper have an enormous advantage technologically. We have to carefully

integrate new capabilities into our existing product line, they don’t.”

Source: Cisco Unauthorized

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

Message: TAKE SOMEONE NEW & WEIRD TO LUNCH

TODAY OR TOMORROW. [Inundate yourself with weird.]

“But don’t we need some

grout between the tiles?”

N.W.O.: Was Is Is

• Pine-paneled Office• Address: 1 Big Man Plaza• Secretary• Suit • Formal • Rank conscious• Pretense (“Failures are

for fools.”)• I love “Yes men”• Self-contained

• 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

Part I: Brand InsidePart 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

“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’ innardsWeb 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 LifeWeb = Everything (P.D. to after-sales)

Web forces you to focus on what you do bestWeb 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,

bottlenecked-communication, 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

“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 2001: Only idiots pull in their [investment]

horns during a downturn.

Brand Outside

Strategy 6:

BRAND POWER!

“WHO ARE YOU [these days] ?”

TP to Client

“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

to how we work with others. Companies will thrive on the basis of their stories and myths. Companies will need to understand

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 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.

Part I: Brand InsidePart II: Brand Outside

Part III: Brand Leadership

Brand Leadership

Passion Rules!

“You must be the change you

wish to see in the world.”

Gandhi

“Create a Cause, not a ‘business.’

”Gary Hamel, Fortune (06.00), on re-inventing a

company (Exemplar #1: Charles Schwab)

“As Ministers of The Republic of Tea, our

not-so-covert mission is to carry out a Tea

Revolution.”Ron Rubin & Stuart Avery Gold,

success@life

“Our free and open immigration policies welcome all who wish to flee the tyranny of

coffee crazed lives and escape the frazzled fast paced race-to-stay-in-one-place existence that it fuels. In our tiny land, we have come to learn

that coffee is about speeding up and losing sight, while tea is about slowing down and

taking a look. Because tea is not just a beverage, it is a consciousness altering

substance that allows for a way of getting in touch with and taking pleasure from the beauty

and the wonder that life has to offer.”

Ron Rubin & Stuart Avery Gold, success@life

Brand Leadership: ENTHUSIASM RULES!

Ben Zander: “I am a dispenser of

enthusiasm.”

“Let’s make a dent in the universe.”

Steve Jobs