Lockheed Martin ELECTRONICS PLATFORM INTEGRATION 31 January 2000.

Lockheed Martin

ELECTRONICS PLATFORM

INTEGRATION

31 January 2000

Microsoft = R.O.W.

Microsoft > GM + Ford + Boeing + Lockheed Martin + Deere + Caterpillar + USX + Weyerhauser + Union Pacific + Kodak + Sears + Marriott + Safeway + KelloggSource: Business Week data through 5-99

Microsoft = R.O.W. (II)

Microsoft > GM + Ford + Boeing + Lockheed

Martin + Deere + Caterpillar + USX + Weyerhauser + Union Pacific + Kodak + Sears + Marriott + Safeway + Kellogg +

McDonald’s + Bank One + General Mills + American Airlines + United Airlines + + Delta Air Lines + US Airways + Quaker Oats

Source: Yastrow Marketing (through 11-23-99)

No Wiggle Room!

“Incrementalism is innovation’s worst

enemy.” Nicholas Negroponte

Just Say No …

“I don’t intend to be known as the

‘King of the Tinkerers.’ ”CEO, large financial services company

(New York, 5-99)

Forces at Work

The Destruction Imperative!

Forget > Learn

“The problem is never how to get new, innovative thoughts into your mind, but how to get old ones out.”

Dee Hock

“When asked to name just one big merger that had lived up to expectations, Leon

Cooperman, former co-chairman of Goldman Sachs’ Investment Policy

Committee, answered: ‘I’m sure there are success stories out there, but at this

moment I draw a blank.’ ”

Mark Sirower, The Synergy Trap

“Acquisitions are about buying market share. Our challenge is to create markets. There is a big difference.”

— Peter Job, CEO, Reuters

“Our ideal acquisition is a small startup that has a great technology product on the drawing board that is going to come out in six to twelve months. We buy the engineers and the next generation product. …”

John Chambers, Cisco Systems

“R & D”

Intel’s venture fund: 275 investments, $3.5B

Source: Fast Company (12-99)

EcoNets/Internet Zaibatsus

“The model is about partial acquisitions and ownerships that then form a whole. Each part has to have value separately, be able to raise capital separately, and

motivate employees separately. Corporations of the past never had that.”

Flip Filipowski, divine interVentures (Red Herring)

“The brick and mortars will die, no matter what. … So you have to take

your best employees and best businesses and spin them off and just own 40 percent of everything

that’s left. Do that and you survive.”

Flip Filipowski, divine interVentures (Red Herring)

DYB.com*

*DestroyYourBusiness.com (GE)

“It used to be that the big

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

Venture Partners)

[E.g.: Craig Venter/Celera Genomics]

The Gales of Creative Destruction

+29M = -44M + 73M

+4M = +4M - 0M

Brand Inside

PSF 1:Brand Org!

108 X 5vs.

8 X 1*

* 540 vs. 8

ERP, ECM, Web, Etc.

IT’S THE GIANT SUCKING SOUND

OF SLACK BEING EXTRACTED FROM

THE GLOBAL ECONOMY!

“The coefficient of friction associated with the grunge

of business is amazing!”

Michael Schrage

Cemex and FDX!

CCC Information Services!

“Assetless Company”

J.B.

RR on Sara Lee

“The most profitable businesses in the future will act as knowledge brokers, linking insights into what’s available

with insights into the customer’s individual needs

and preferences.”

“We want to be the air traffic controllers

of electrons.”Bob Nardelli,

GE Power Systems

The “&-!!+#$% in the middle”*

Jim Clark on Healtheon

* ’twixt docs, patients and providers; $250B in waste; source: Michael Lewis,

The New New Thing

“Don’t own nothin’ if you can help it. If you can, rent your shoes.”

F.G.

R&D Outsourcing/ Big Pharma

3:1+ (70% now; 5% in 5 years)

1:2+ (5% now; 20% in 5 years)

Source: IN VIVO

PSF 1.0

Professional Service Firm Conversion Kit /

Release 1.0

PSF 1.0

Department Head

to …

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

“support function” / “cost center” / “bureaucratic

drag”

or …

“Rock Stars of the ‘Age of Talent’ ”

C.I.O. to

C.E.F.R.N.S.*

*Chief Evangelist For

Really Neat Stuff

Brand Inside

PSF 2:Brand Work!

“Reward excellent failures. Punish

mediocre successes.”

Phil Daniels, Sydney exec

But Does It Matter????

“On time, on budget … who cares?”

anon. seminar participant (4/99)

Kaiser: 4.15.29

Liberty Ship

2 years

240 days

9 hours

4 days, 15 hours, 29 minutes

“Every project we take on starts with a question: How can we do what’s never

been done before?”

Stuart Hornery, CEO, Lend Lease

WOW Project “Acid Test”

Can you explain it - with zest -

to your 14-year-old?

“You really got to me. So many of our information technology projects take on a life of their own, and I know they’ll never end up as more than ‘mediocre successes.’ ”

CEO, F100 financial services company (10-98)

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

Characteristics of the “Also Rans”

–“minimize risk”–“respect the chain of command”–“support the boss”–“make budget”

Source: Fortune on “most admired global corporations”

Brand Inside

PSF 3:Brand You!

DISTINCT … OR EXTINCT!

“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

“If one quarter can’t make the journey, that’s the way it

has to be.”

Carly Fiorina (1-00/Forbes)

Personal “Brand Equity” Eval– My current Project is challenging me …– New things I’ve learned in the last 90 days

include …– My public “recognition program”

consists of …– I am known for …– Additions to my Rolodex include …

–My resume is discernibly different from last year’s at this time …

R.D.A.Rate: 15%?, 25%?

Formal “Investment Strategy”/

R.I.P.

R.I.P.

IS IT ... WOW!?

R.I.P.10 … Major job change [new area of

concentration]; major offsite educational investment; extensive

sabbatical [oddball learning experience of > 2 months];

exceptional community project [presidency of fundraising drive, run

for school board].

R.I.P.

5 ... Extensive course work in oddball area of passionate interest; major off-

the-job activity [community involvement, learn to play the cello,

study Chinese].

1 … Company training, as directed.

Seminar Y2K

Message:

Distinct … or Extinct!

Brand Inside

PSF 4:Brand Talent!

Issue Y2K

The Great War for 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

Alan Kay on PARC’s Bob Taylor

“He was a connoisseur of

talent.”

“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. (Find the One Ton Cookie Man!)

Attributes of Those Who “Made” the 10th Grade History Book

–Committed!–Determined to make a difference!–Focused!–Passionate! –Irrational about their life’s project!–Ahead of their time/ Paradigm

busters!–Impatient/ Action Obsessed!

Attributes of Those Who “Made” the

10th Grade History Book –Made lots of people mad!–Flouted the chain of command!–Creative / Quirky / Peculiar!–Rebels!–Irreverent!–Masters of improv / Thrive on chaos/

Exploit chaos!

Attributes of Those Who “Made” the 10th Grade History Book

–Forgiveness > Permission

–Bone honest!

–Flawed as the dickens!

– “In touch” with their followers’ aspirations

–Damn good at what they do!

“Conformity is the jailer of freedom and the enemy of growth.” J.F.K.

Just Say “No” to “Grout”!

Participant: “Don’t you need ‘grout’ between the tiles?”

TP: “No!” [med staff, NFL Special Teams,waiters,

PFCs, cymbals player, bit parts, waiters]

“The boundaries for acceptable weirdness have

dramatically expanded.”

Michael Schrage

Talent War Y2K!

–All out!/ Time consuming!–Never ending!/ Unwinnable!–Includes everybody!/ Everybody’s

game! (“We’re all in sales.”)–Expensive!–Cool!/ WOW!/ Fun!/ Creative!–Strategic!/ Core competence!

Talent = Brand

Brand Outside=

Brand Inside

Brand Outside

Context:

No “Commodities”!

In the Beginning …

“The audit has become a commodity.”

Big 5 audit partner to TP

Quality Not Enough!

“Quality as defined by few defects is becoming the price of entry for automotive marketers rather than

a competitive advantage.”

J.D. Power

What’s Special?

“Customers will try ‘low cost providers’ because the Majors have not given them any clear

reason not to.”

Leading Insurance Industry

Analyst (10-98)

“We make over three new product announcements a

day. Can you remember them? Our customers

can’t!”

Carly Fiorina, HP

“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, similar warranties and

similar quality.”

Kjell Nordstrom and Jonas Ridderstrale, Funky Business

The “10X/10X” Phenomenon

10 Times Better/

10 Times Less Different

“You do not merely want to be the best of the best. You want to be considered the only ones who do what

you do.”

Jerry Garcia

“customer satisfaction” to

“customer success”

Source: GE Power Systems

Brand Outside

Strategy 1:

Lead the Customer!

“The customer is a rear view mirror, not a guide to the future.”George Colony, Forrester Research

“If you worship at the throne of the voice of the customer, you’ll get only

incremental advances.”Joseph Morone, President, Bentley College

Early Customer Rejection

Post-Its [12 years!]Chrysler Minivans

VCRsFax machines

FedExCNN

Heart-assist pumpsEtc.

Source: Fortune

Good = Bad/ 1 of 30,000

“We are crazy. We should do something when people say it is

‘crazy.’ If people say something is ‘good’, it

means someone else is already doing it.”

Hajime Mitarai, Canon

“Wealth in this new regime flows directly from innovation, not

optimization. That is, wealth is not gained by perfecting the known,

but by imperfectly seizing the unknown.”

Kevin Kelly, New Rules for the New Economy

Benchmarking, Perils of …

“The best swordsman in the world doesn’t need to fear the second best swordsman in the world; no, the person for him to be afraid of is some ignorant antagonist who has never had a

sword in his hand before; he doesn’t do the thing he ought to do, and so the expert isn’t prepared for him; he does the thing he ought not to do and often it catches the expert out

and ends him on the spot.”

Mark Twain

Amen!

“The Age of the Never Satisfied

Customer”Regis McKenna

Brand Outside

Strategy 2:Master

E-Commerce!

$30,000,000. = ???

Dell’s Web sales … daily

2X = 100 days (Internet traffic)

2X = 9 months (network capacity)

Source: Red Herring (1-00)

Tomorrow Today: Cisco!

$7B of $10BSave $500M (service and tech

support)

C.Sat e >> C.Sat HCustomer Engineer Chat

Rooms ($1B?)

And Larry?

Cherry PickingVertical Markets

Plasticsnet.com: $370B; sellers pay $5K to $8K for

“storefront”; 5% to 10% cut

Hook: community services (database, catalogs, forums, industry job bank,

etc.)

B2B

1999 – 2004: 50X

2004: $7.4Source: GartnerGroup (per Reuters 1-26-00)

T

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

Anne Busquet/ American Express

Not: “Age of the Internet”

Is: “Age of Customer Control”

“In the network economy, the Website becomes the company’s primary interface to the customer.

The user interface becomes the marketing materials, store front,

store interior, sales staff and post-sales support all rolled into one.”

Jakob Nielsen, Designing Web Usability

Nielsen/Designing Web Usability

All Web projects are customer-interface projects! Simplicity rules!

Make it easy for customers to perform useful tasks!

Less “cool,” more useful!Speed rules!

“Where does the Internet rank in priority?

It’s No. 1, 2, 3, and 4.” Jack Welch

Web Strategy: GE Power Systems

“Launch and Learn”/4 sites in 30 days

Change … Or Die!

“Most of the brick and mortars look at the Internet as an add-on business … until they get a major scare. Then they either

change or die. … You have to put all your heart and soul in that direction, the way

Charles Schwab and Dell did.”

Flip Filipowski, divine interVentures (Red Herring)

There are 2 Kinds of …

Defense*

vs.

Offense**

*Fend off upstarts.**Reinvent our marketspace!

Brand Outside

Strategy 3:

Design Rules!

And Tomorrow …

“Fifteen years ago companies competed on price. Now It’s

quality. Tomorrow it’s design.”Robert Hayes

All Equal Except …

“At Sony we assume that all products of our competitors have basically the same

technology, price, performance and

features. Design is the only thing that differentiates one product

from another in the marketplace.”

Norio Ohga

Drop-dead Charm!

“The new Beetle fails at most categories. The only

thing it doesn’t fail in is drop-dead charm.”

Jerry Hirshberg, Nissan Design International

Object of Desire!“Every now and then, a design comes

along that radically changes the way we think about a particular object. Case in

point: the iMac. Suddenly, a computer is no longer an anonymous box. It is a

sculpture, an object of desire, something that you look at.”

Katherine McCoy, Michael McCoy, Illinois Institute of Technology

[ Design as Soul

“We don’t have a good language to talk about this kind of thing. In most people’s

vocabularies, design means veneer. … But to me, nothing could be further from the

meaning of design. Design is the fundamental soul of a man-made creation

that ends up expressing itself in successive outer layers of the product or

service.”Steve Jobs]

Brand Outside

Strategy 4:

It’s the Experience!

“Experiences are as distinct from services as

services are from goods.”Joseph Pine & James Gilmore, The

Experience Economy: Work Is Theater & Every Business a Stage

“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

Safe, On Time and …

“We defined personality as a market niche. We seek to

amuse, to surprise, to entertain.”

Herb Kelleher, Main Man, LUV Airlines

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

Mantra: “Any good can be ing-ed”

the driving experiencethe pumping experience

the sitting experiencethe reading experiencethe washing experiencethe cooking experience

Joseph Pine & James Gilmore, The Experience Economy: Work Is Theater & Every Business a Stage

“This is the end of the pure product era. For instance, car

makers are beginning to understand that the car is a

platform for delivering services that drive the customer

experience.”Carly Fiorina, HP @ Comdex ’99

Brand Outside

BRAND POWER!

Brand?

DistinctionExcellence

Emotional “Signature”Trustworthiness

ConsistencyShorthand

Brand It! Now, More Than Ever!

“The increasing difficulty in differentiating between products and

the speed with which competitors take

up innovations will assist in the rise and rise of the brand.”

Gillian Law and Nick Grant, Management [New Zealand]

No Room for Brands?

NikeSaturnCNN

America OnlineCharles Schwab

StarbucksThe Gap

IntelEtc.

Brand = Trust!

“Most buyers do not have a clue whether anybody else makes a better microprocessor, but ‘Intel Inside’ has become a ‘trust mark’ - a trademark that consumers put their faith in.”

The Economist

Calling the Corporate Shrink!

“Organizational Psychotherapy”/

WHO WE ARE!

“Corporate Religion is a completely new way of thinking about companies. Today, the product is still the main communication

highway in the company. When companies make the shift to selling solutions, brands and attitudes … communicating the company’s

attitudes and values becomes the decisive parameter for success. It

demands that you find out who you are as a company.”

Jesper Kunde, Corporate Religion

Brand = You Must Care!

“Success means never letting the competition define you. Instead you have to define

yourself based on a point of view you care deeply about.”

Tom Chappell, Tom’s of Maine

Brand = Special = Passion =

Connection = Caring*

* (Way) beyond “market research”

The Ten Rules of Radical Marketing

CEO must “own” the marketing function!Hyper-lean Mktg. Dept. (No filters!)

CEO hangs out with customers!Love + Respect your customers!

Just Say No … to market research!Hire only passionate missionaries!

Create a Community of users-customers!Emphasize one-to-one marketing tools!

Celebrate craziness!Be insanely True to the Brand!

Sam Hill & Glenn Rifkin, Radical Marketing (e.g., Harley, Virgin, The Dead, HBS, NBA)

Brand Leadership

Lead Out Loud!

ENTHUSIASM RULES!*

“I am a dispenser of enthusiasm.”

Ben Zander*TP on Bob Nardelli/GE Power Systems

Ann R.’s Gospel– Show up!– Know your message!

–Put yourself at risk!

“If you ask me what I have come to do in this world, I

who am an artist, I will reply, I am here to live my

life out loud.”Emile Zola

“I’d rather regret the things I have done than the things I have not.”

Lucille Ball

“If things seem under control, you’re just not going fast enough!”

Mario Andretti

THE END