LONG Tom Peters Re-Imagine:Excellence NOW NOW World Strategy Forum The New Rules: Reframing Capitalism Seoul/13 June 2012 (slides @ tompeters.com and excellencenow.com)

LONGLONG

Tom Peters’Tom Peters’

Re-Imagine:Re-Imagine:ExcellenceExcellence

NOWNOW

World Strategy ForumWorld Strategy ForumThe New Rules: Reframing CapitalismThe New Rules: Reframing Capitalism

Seoul/13 June 2012Seoul/13 June 2012(slides @ tompeters.com and excellencenow.com)(slides @ tompeters.com and excellencenow.com)

19821982

““Not Dead Yet”Not Dead Yet”

““Not Dead Yet”Not Dead Yet”

BRIC/2011: $11T/$4K per capitaBRIC/2011: $11T/$4K per capitaUSA/2011: $16T/$48K per capitaUSA/2011: $16T/$48K per capita

USA/2000: 4% population/30% world GDPUSA/2000: 4% population/30% world GDPUSA/2010: 4% populattion/28% world GDPUSA/2010: 4% populattion/28% world GDP

USA productivity: ’07/1.7%; ’08/2.1%; ’09/5.4%; ’10/2.4%; USA productivity: ’07/1.7%; ’08/2.1%; ’09/5.4%; ’10/2.4%; ’11/4.1%’11/4.1%

FDIC institutions: 4Q/2008/-$38B; 2Q/2011/+$29BFDIC institutions: 4Q/2008/-$38B; 2Q/2011/+$29B

1/2008 to 9/2011: USA consumer savings 0% to 6%/$2.1T saved1/2008 to 9/2011: USA consumer savings 0% to 6%/$2.1T saved

Foreign Direct Investment: 2003: $64B; 2008: $328B; 2009: Foreign Direct Investment: 2003: $64B; 2008: $328B; 2009: $134B; 2011: $200B+$134B; 2011: $200B+

Exports/2009: USA $1.53T ($1.06T goods, $0.47T services); Exports/2009: USA $1.53T ($1.06T goods, $0.47T services); Germany $1.36T; China $1.33TGermany $1.36T; China $1.33T

USA/Refined petroleum products/1Q 2011: Imports 2.16M BPD; USA/Refined petroleum products/1Q 2011: Imports 2.16M BPD; Exports 2.49M BPDExports 2.49M BPD

““New economy”: Apple (>Exxon) + Google + Facebook = $800B New economy”: Apple (>Exxon) + Google + Facebook = $800B market capmarket cap

Source: Daniel Gross, Source: Daniel Gross, The Myth of American Decline and the Growth of a New EconomyThe Myth of American Decline and the Growth of a New Economy

iPad/$4 billioniPad/$4 billion of $300 billion negativeof $300 billion negative USA trade balance with USA trade balance with

China (2011)China (2011)

Cost/Profit Components:Cost/Profit Components:

Total labor 7%Total labor 7%

(Chinese labor: 2%)(Chinese labor: 2%)Materials 31%Materials 31%

Distribution: 15%Distribution: 15%Profit: 47%Profit: 47%

Landed iPad cost: Landed iPad cost: $275 = $275 = ImImpputeduted USA negative trade balance with ChinaUSA negative trade balance with China

((ActualActual China cost: $10) China cost: $10)

Source: Personal Computing Industry Centre (Source: Personal Computing Industry Centre (EconomistEconomist))

CostCost**/Profit Components:/Profit Components:

Total labor 7%Total labor 7%

(Chinese labor: 2%)(Chinese labor: 2%)Materials 31%Materials 31%

Distribution: 17%Distribution: 17%Profit: 47%Profit: 47%

Landed iPad cost: Landed iPad cost: $275 = $275 = ImImpputeduted USA negative trade balance with ChinaUSA negative trade balance with China

((ActualActual China cost: $10) China cost: $10)

*Biggest non-USA component: *Biggest non-USA component: KoreaKoreaSource: Personal Computing Industry Centre (Source: Personal Computing Industry Centre (EconomistEconomist))

Q3 2011/BLSQ3 2011/BLS

++3.13.1//Non-farm productivity growthNon-farm productivity growth

+3.8/+3.8/Non-farm outputNon-farm output

+0.6/+0.6/Non-farm hours workedNon-farm hours worked

++5.45.4//Manufacturing productivityManufacturing productivity

+4.7/+4.7/Manufacturing outputManufacturing output

-0.6//Manufacturing hours workedManufacturing hours worked

Source: Bureau of Labor Statistics/03 November 2011Source: Bureau of Labor Statistics/03 November 2011

It’s Getting a Little Weird OutIt’s Getting a Little Weird Out**

Bradesco’s biometric ATM Bradesco’s biometric ATM sensors/blood flowsensors/blood flow ((Economist Economist 0519)0519)

Oscar Pistorius’ sprinting Oscar Pistorius’ sprinting acumen/approved foracumen/approved for

London London ((WSJWSJ 0602) 0602)

DelFly/lighter than your DelFly/lighter than your wedding ringwedding ring ((EconomistEconomist 0602) 0602)

*Kurzweil’s Singularity is nigh?!*Kurzweil’s Singularity is nigh?!

““In some sense you can In some sense you can argue that the science argue that the science

fiction scenario is already fiction scenario is already starting to happen. starting to happen. The The comcompputers are in controluters are in control. .

We We jjust live in their ust live in their worldworld.”.” —Danny Hillis, Thinking Machines (—Danny Hillis, Thinking Machines (Wired Wired

01.2011)01.2011)

““Unless mankind Unless mankind redesigns itself by redesigns itself by changing our DNAchanging our DNA

through altering our through altering our genetic makeup, genetic makeup,

computer-generated computer-generated robots will take overrobots will take over the world.” the world.” – Stephen Hawking– Stephen Hawking

““Tom, let me tell you the Tom, let me tell you the definition of a good definition of a good lending officer. …lending officer. …

““Tom, let me tell you the Tom, let me tell you the definition of a good lending definition of a good lending

officer. After church on Sunday, officer. After church on Sunday, on the way home with his on the way home with his

family, he takes a little detour family, he takes a little detour to drive by the factory he just to drive by the factory he just

lent money to. Doesn’t go in or lent money to. Doesn’t go in or any such thing, just drives by any such thing, just drives by

and takes a look.”and takes a look.”

““The art of war does not The art of war does not require complicated require complicated

maneuvers; the simplest are maneuvers; the simplest are the best and common sense is the best and common sense is fundamental. From which one fundamental. From which one

might wonder how it is might wonder how it is

generals make blunders; generals make blunders; itit is because theis because theyy tr tryy to to

be cleverbe clever.”.” —Napoleon—Napoleon

““Too Much Cost, Not Enough Value”Too Much Cost, Not Enough Value”““Too Much Speculation, Not Enough Investment”Too Much Speculation, Not Enough Investment”““Too Much Complexity, Not Enough Simplicity”Too Much Complexity, Not Enough Simplicity”

““Too Much Counting, Not Enough Trust”Too Much Counting, Not Enough Trust”““Too Much Business Conduct, Not Enough Too Much Business Conduct, Not Enough

Professional Conduct”Professional Conduct”““Too Much Salesmanship, Not Enough Too Much Salesmanship, Not Enough

Stewardship”Stewardship”““Too Much Focus on Things, Not Enough FocusToo Much Focus on Things, Not Enough Focus

on Commitment”on Commitment”““Too Many Twenty-first Century Values, Too Many Twenty-first Century Values, Not Enough Eighteenth-Century Values”Not Enough Eighteenth-Century Values”

““Too Much ‘Success,’ Not Enough Character”Too Much ‘Success,’ Not Enough Character”

Source: Chapter titles from Jack Bogle, Source: Chapter titles from Jack Bogle, Enough. Enough.

2525

MBWMBWAA

MManaginganaging

BBy y

WWanderingandering

AAroundround

or it's simply or it's simply not worth not worth

doingdoing

““Business has to give people enriching, Business has to give people enriching,

rewarding lives … rewarding lives … or it's or it's simply not simply not

worth worth doingdoing.”.”

——Richard BransonRichard Branson

7 Steps to Sustaining Success7 Steps to Sustaining Success

You take care of the people. You take care of the people. The people take care of the service. The people take care of the service. The service takes care of the customer.The service takes care of the customer.The customer takes care of the profit. The customer takes care of the profit. The profit takes care of the re-investment.The profit takes care of the re-investment.The re-investment takes care of the re-invention. The re-investment takes care of the re-invention. The re-invention takes care of the future.The re-invention takes care of the future.(And at every step the only measure is EXCELLENCE.)(And at every step the only measure is EXCELLENCE.)

7 Steps to Sustaining Success7 Steps to Sustaining Success

You take care of the people.You take care of the people. The people take care of the service. The people take care of the service. The service takes care of the customer.The service takes care of the customer.The customer takes care of the profit. The customer takes care of the profit. The profit takes care of the re-investment.The profit takes care of the re-investment.The re-investment takes care of the re-invention. The re-investment takes care of the re-invention. The re-invention takes care of the future.The re-invention takes care of the future.(And at every step the only measure is EXCELLENCE.)(And at every step the only measure is EXCELLENCE.)

““The The ONEONE Question” Question” :: “In the last year [3 years, current “In the last year [3 years, current

job], name the … job], name the … three three peoplepeople … whose growth you’ve … whose growth you’ve

most contributed to. Please explain where they were at the most contributed to. Please explain where they were at the beginning of the year, where they are today, and where they are beginning of the year, where they are today, and where they are

heading in the next 12 months. Please explain in painstaking detail heading in the next 12 months. Please explain in painstaking detail your development strategy in each case. Please tell me your biggest your development strategy in each case. Please tell me your biggest development disappointment—looking back, could you or would you development disappointment—looking back, could you or would you have done anything differently? Please tell me about your greatest have done anything differently? Please tell me about your greatest

development triumph—and disaster—in the last five years. Whatdevelopment triumph—and disaster—in the last five years. What are the ‘three big things’ you’ve learned about helping people are the ‘three big things’ you’ve learned about helping people

grow along the way?”grow along the way?”

The Memories That MatterThe Memories That Matter

The people you developed who went on toThe people you developed who went on to stellar accomplishments inside or outsidestellar accomplishments inside or outside the company.the company. The (no more than) two or three people you developed who went on The (no more than) two or three people you developed who went on toto create create stellar institutions of their own.stellar institutions of their own.The longshots (people with “a certain something”) you bet on whoThe longshots (people with “a certain something”) you bet on who surprised themselves—surprised themselves—andand your peers. your peers.

The people of all stripes who 2/5/10/20 yearsThe people of all stripes who 2/5/10/20 years later say later say “You made a difference in my “You made a difference in my life,”life,” “ “Your belief in me changed everything.”Your belief in me changed everything.”The sort of/character of people you hired in general. (The sort of/character of people you hired in general. (And And the bad the bad apples you chucked out despite some stellar traits.)apples you chucked out despite some stellar traits.)A handful of projects (a half dozen at most) you doggedly pursued A handful of projects (a half dozen at most) you doggedly pursued thatthat still make you smile and which fundamentally changed the waystill make you smile and which fundamentally changed the way things are done inside or outside the company/industry.things are done inside or outside the company/industry. The supercharged camaraderie of a handful of Great Teams aiming The supercharged camaraderie of a handful of Great Teams aiming toto “ “change the world.”change the world.”

Organizations Organizations existexist to to serveserve. .

Period.Period.

Leaders Leaders livelive to to serveserve. Period.. Period.

"When I hire "When I hire someone, that's someone, that's when when I I ggo to o to

work for work for themthem.”.” —John DiJulius,—John DiJulius, "What's the Secret to Providing "What's the Secret to Providing

a World-Class Customer Experience"a World-Class Customer Experience"

Oath of Office:Oath of Office: Managers/Servant Leaders Managers/Servant Leaders

Our goal is to serve our customers brilliantly and profitably Our goal is to serve our customers brilliantly and profitably overover the long haul.the long haul.Serving our customers brilliantly and profitably over the longServing our customers brilliantly and profitably over the long haul is a product of brilliantly serving, over the long haul, haul is a product of brilliantly serving, over the long haul, thethe people who serve the customer.people who serve the customer.

Hence, our job as leaders—the alpha and the omega andHence, our job as leaders—the alpha and the omega and everything in between—is abetting the sustained growth everything in between—is abetting the sustained growth andand success and engagement and enthusiasm and commitment success and engagement and enthusiasm and commitment toto Excellence of those, one at a time, who directly or indirectlyExcellence of those, one at a time, who directly or indirectly serve the ultimate customer.serve the ultimate customer.

We—leaders of every stripe—are in the “Human Growth andWe—leaders of every stripe—are in the “Human Growth and Development and Success and Aspiration to ExcellenceDevelopment and Success and Aspiration to Excellence business.”business.”““We” We” [leaders][leaders] only grow when “they” only grow when “they” [each and every one of our colleagues][each and every one of our colleagues] areare growing.growing.““We” We” [leaders][leaders] only succeed when “they” only succeed when “they” [each and every one of our [each and every one of our colleagues]colleagues]

are succeeding.are succeeding.““We” We” [leaders][leaders] only energetically march toward Excellence when only energetically march toward Excellence when “ “they” they” [each and every one of our colleagues][each and every one of our colleagues] are energetically marching are energetically marching toward Excellence.toward Excellence.Period.Period.

EMPLOYEES FIRST, CUSTOMERS SECOND:EMPLOYEES FIRST, CUSTOMERS SECOND:Turning Conventional Management Upside Turning Conventional Management Upside

DownDownVineet Nayar/CEO/HCL TechnologiesVineet Nayar/CEO/HCL Technologies

"Leadership is a "Leadership is a gift. It's given by gift. It's given by those who follow. those who follow.

You have to be You have to be worthy of it.”worthy of it.”

——General Mark Welsh, Commander, U.S. Air Forces Europe General Mark Welsh, Commander, U.S. Air Forces Europe

““I start with the I start with the premise that the premise that the

function of leadership function of leadership

is tois to pproduceroduce more more leadersleaders,, not more not more followers.”followers.” ——Ralph NaderRalph Nader

In the Army, In the Army, 33--star star ggeneralsenerals worry about worry about

training. In most training. In most businesses, it's a “ho businesses, it's a “ho hum” mid-level staff hum” mid-level staff

function.function.

If the regimental commander lost most of his If the regimental commander lost most of his 2nd lieutenants and 1st lieutenants and 2nd lieutenants and 1st lieutenants and

captains and majors, it would be a tragedy. captains and majors, it would be a tragedy.

If he lost his If he lost his serserggeants it would eants it would be a catastrobe a catastropphehe. . The The

Army and the Navy are fully aware that Army and the Navy are fully aware that success on the battlefield is dependent to an success on the battlefield is dependent to an extraordinary degree on its Sergeants and extraordinary degree on its Sergeants and Chief Petty Officers. Does industry have the Chief Petty Officers. Does industry have the

same awareness?same awareness?

““People People leave leave

managers not managers not companies.”companies.”

——Dave WheelerDave Wheeler

““The The fourfour most most imimpportantortant wordswords in any in any

organization are …organization are …

The four most important words in any organizationThe four most important words in any organization

are …are … “What “What do do youyou think?”think?”

Source: courtesy Dave Wheeler, posted at tompeters.com Source: courtesy Dave Wheeler, posted at tompeters.com

““The deepest The deepest principal in human principal in human

nature is the nature is the craving* to be craving* to be appreciated.”appreciated.”

—William James—William James

*“Craving,” not “wish” or “desire” or “longing” —Dale *“Craving,” not “wish” or “desire” or “longing” —Dale Carnegie, Carnegie, How to Win Friends and Influence PeopleHow to Win Friends and Influence People (“The (“The

BIG Secret of Dealing With People”)BIG Secret of Dealing With People”)

Hard is softHard is softSoft is hardSoft is hard

Hard is Soft.Hard is Soft.Soft is Hard.Soft is Hard.

““The first step is to measure whatThe first step is to measure what can easily be measured. This is okay can easily be measured. This is okay as far as it goes. The second step isas far as it goes. The second step is to disregard that which cannot be to disregard that which cannot be measured, or give it an arbitrary measured, or give it an arbitrary

quantitative value. This is artificial quantitative value. This is artificial and misleading. The third step isand misleading. The third step is to presume that what cannot be to presume that what cannot be measured is not very important. measured is not very important.

This is blindness. The fourth step isThis is blindness. The fourth step is to say that what cannot be measured to say that what cannot be measured does not really exist. This is suicide.”does not really exist. This is suicide.”

—Daniel Yankelovich (from —Daniel Yankelovich (from Enough!Enough!, by Jack Bogle), by Jack Bogle)

Excellence1982: The Bedrock “EiExcellence1982: The Bedrock “Eigght Basics”ht Basics”

1. A Bias for 1. A Bias for ActionAction2. Close to the 2. Close to the CustomerCustomer3. 3. AutonomAutonomyy and and EntreEntreppreneurshireneurshipp4. Productivity Through 4. Productivity Through PeoPeopplele5. 5. Hands OnHands On, , Value-DrivenValue-Driven6. 6. Stick toStick to the Knitting the Knitting7. 7. SimSimpplele Form, Form, LeanLean Staff Staff8. Simultaneous 8. Simultaneous Loose-TightLoose-Tight PropertiesProperties

““Breakthrough” 82*Breakthrough” 82*

People! People! CustomersCustomers

! ! Action! Action! Values! Values!

**In Search of ExcellenceIn Search of Excellence

Why in Why in the the World World did youdid you go to go to SiberiaSiberia??

EnterpriseEnterprise* (*at its best)* (*at its best):: An An emotionalemotional, , vitalvital, , innovativeinnovative, , jojoyyfulful, , creativecreative, , entreentreppreneurialreneurial endeavor that elicits endeavor that elicits maximum maximum

concerted humanconcerted human potential in thepotential in the wholehearted wholehearted ppursuit of ursuit of EXCELLENCE in service of othersEXCELLENCE in service of others.**

**Employees, Customers, Suppliers, Communities, Owners, Temporary partners**Employees, Customers, Suppliers, Communities, Owners, Temporary partners

> EXXON> EXXON

Design Design RulesRules!!

APPLEAPPLE market market capcap

> Exxon Mobil* > Exxon Mobil*

*August 2011*August 2011

““Only one company Only one company can be the cheapest. can be the cheapest. All others must use All others must use design.”design.” —Rodney Fitch, Fitch & Co.—Rodney Fitch, Fitch & Co.

Source: Source: InsightsInsights, definitions of design, the Design Council [UK], definitions of design, the Design Council [UK]

““Design is Design is

treated like treated like a religiona religion at at

BMW.”BMW.” —Fortune—Fortune

““With its carefully conceived mix of colors and textures, With its carefully conceived mix of colors and textures,

aromas and music,aromas and music, StarbucksStarbucks is more is more indicative of our era than the iMac. It is to the indicative of our era than the iMac. It is to the AAggee ofof

AestheticsAesthetics what McDonald’s was to the what McDonald’s was to the AAggee ofof ConvenienceConvenience or Ford was to the Age of Mass Production or Ford was to the Age of Mass Production—the touchstone success story, the exemplar of … the —the touchstone success story, the exemplar of … the

aesthetic imperative. …aesthetic imperative. … ‘Every Starbucks ‘Every Starbucks store is carefully designed to store is carefully designed to

enhance the qualityenhance the quality of everything the customers see, of everything the customers see, touch, hear, smell or taste,’touch, hear, smell or taste,’ writeswrites

CEO Howard Schultz.” CEO Howard Schultz.” —Virginia Postrel, The Substance of Style: How the Rise of Aesthetic

Value Is Remaking Commerce, Culture and Consciousness

Hypothesis:Hypothesis: DESIGNDESIGN is the is the pprincirincippalal

differencedifference

between between lovelove

and and hate!*hate!**Not “like” and “dislike”

““We don’t have a good language to talk about this kindWe don’t have a good language to talk about this kind of thing. In most people’s vocabularies, design means of thing. In most people’s vocabularies, design means veneer. … But to me, nothing could be further from the veneer. … But to me, nothing could be further from the

meaning of design.meaning of design. Design is Design is the the fundamentalfundamental

soulsoul of a man-made of a man-made

creation.”creation.” —Steve Jobs*—Steve Jobs*

*Apple*Apple > > ExxonMobil ExxonMobil

HHypypothesisothesis: Men : Men

cannotcannot design for women’s design for women’s

needsneeds!!??!!??

… … this will be this will be the woman’s the woman’s century …century …

““I speak to you with a feminine voice. I speak to you with a feminine voice. It’s the voice of democracy, of equality. It’s the voice of democracy, of equality.

I am certain, ladies and gentlemen, I am certain, ladies and gentlemen,

that this will be the that this will be the woman’s centurwoman’s centuryy.. In the In the

Portuguese language, words Portuguese language, words such as life, soul, and hope aresuch as life, soul, and hope are

of the feminine gender, as are other of the feminine gender, as are other words like courage and sincerity.”words like courage and sincerity.”

——President President Dilma RousseffDilma Rousseff of Brazil, of Brazil, 1st woman to keynote the United Nations General Assembly1st woman to keynote the United Nations General Assembly

““Forget Forget ChinaChina, , IndiaIndia and the and the InternetInternet: :

Economic Growth Is Economic Growth Is Driven by Driven by

WomenWomen.”.”

Source: Headline, Economist

““One thing is certain: Women’s rise to power, which is One thing is certain: Women’s rise to power, which is linked to the increase in wealth per capita, is happening linked to the increase in wealth per capita, is happening in all domains and at all levels of society. Women are no in all domains and at all levels of society. Women are no

longer content to provide efficient labor or to be longer content to provide efficient labor or to be consumers with rising budgets and more autonomy to consumers with rising budgets and more autonomy to spend. … This is just the beginning. The phenomenon spend. … This is just the beginning. The phenomenon

will only grow as girls prove to be more successful than will only grow as girls prove to be more successful than

boys in the school system.boys in the school system. For a number For a number of observers, we have of observers, we have

already entered the age of already entered the age of ‘‘womenomics,’ the economy womenomics,’ the economy

as thought out and as thought out and practiced by a womanpracticed by a woman.”.” —Aude Zieseniss de —Aude Zieseniss de

Thuin, Women’s Forum for the Economy and SocietyThuin, Women’s Forum for the Economy and Society

““Goldman Sachs in Tokyo has Goldman Sachs in Tokyo has developed an index of 115 developed an index of 115

companies poised to benefit companies poised to benefit from women’s increased from women’s increased

purchasing power; purchasing power; over the over the past decade the value of past decade the value of

shares in Goldman’s basket shares in Goldman’s basket has risen by 96%, against the has risen by 96%, against the

Tokyo stockmarket’s Tokyo stockmarket’s rise of 13%rise of 13%.”.” —Economist—Economist

W W > > 2X2X (C + (C + I)*I)*

**“Women now drive the global economy. Globally, they control about “Women now drive the global economy. Globally, they control about $20 trillion in consumer spending, and that figure could climb as high as $20 trillion in consumer spending, and that figure could climb as high as

$28 trillion in the next five $28 trillion in the next five yyearsears. Their $13 trillion in total yearly earnings could reach $18 . Their $13 trillion in total yearly earnings could reach $18

trillion in the same period.trillion in the same period. In aggregate, women represent a growth market bigger than China and In aggregate, women represent a growth market bigger than China and India combined—more than twice as big in fact. Given those numbers, it would be foolish to ignore or underestimate India combined—more than twice as big in fact. Given those numbers, it would be foolish to ignore or underestimate the female consumer. And yet many companies do just that—even ones that are confidant that they have a winning the female consumer. And yet many companies do just that—even ones that are confidant that they have a winning

strategy when it comes to women. Consider Dell’s …”strategy when it comes to women. Consider Dell’s …”

Source: Michael Silverstein and Kate Sayre, “The Female Economy,” Source: Michael Silverstein and Kate Sayre, “The Female Economy,” HBRHBR, 09.09, 09.09

““Women areWomen are thethe majority majority

market”market” —Fara Warner/—Fara Warner/The Power of the PurseThe Power of the Purse

““AS AS LEADERS, LEADERS, WOMEN WOMEN

RULERULE:: New Studies find New Studies find

that female managers outshine their male that female managers outshine their male counterparts in almost every measure”counterparts in almost every measure”

TITLE/ Special Report/ TITLE/ Special Report/ BusinessWeekBusinessWeek

““Headline 2020:Headline 2020: Women Women

Hold Hold 8080 Percent Percent

of Management and of Management and Professional Jobs”Professional Jobs”

Source: Source: The Extreme Future: The Top Trends That Will The Extreme Future: The Top Trends That Will Reshape the World in the Next 20 YearsReshape the World in the Next 20 Years, James Canton, James Canton

Women’s Strengths Match New Women’s Strengths Match New Economy ImperativesEconomy Imperatives:: Link [rather than Link [rather than

rank] workers; rank] workers; favor interactive-favor interactive-collaborative leadership style collaborative leadership style

[empowerment beats top-down decision [empowerment beats top-down decision making];making]; sustain fruitful collaborations; sustain fruitful collaborations;

comfortable with sharing information; comfortable with sharing information; see see redistribution of power as victory, not redistribution of power as victory, not

surrendersurrender; favor multi-dimensional ; favor multi-dimensional feedback; feedback; value technical & interpersonal value technical & interpersonal

skills, individual & group contributions skills, individual & group contributions equally;equally; readily accept ambiguity; readily accept ambiguity; honor honor intuition as well as pure “rationality”;intuition as well as pure “rationality”; inherently flexible; inherently flexible; appreciate cultural appreciate cultural

diversitydiversity..

Source: Judy B. Rosener, Source: Judy B. Rosener, America’s Competitive Secret: Women ManagersAmerica’s Competitive Secret: Women Managers

““Power Women 100”/Power Women 100”/ForbesForbes 10.25.10 10.25.1026 female CEOs of Public Companies:26 female CEOs of Public Companies:

Vs. Men/Market: Vs. Men/Market: +28%+28% ** (*Post-appointment) (*Post-appointment)

Vs. Industry: Vs. Industry: +15%+15%

““Are men Are men obsolete?obsolete?

””

—Headline, —Headline, USN&WRUSN&WR

1/8/201/8/20

Date: 1/1/11Date: 1/1/11Activity: USA BoomersActivity: USA Boomers start turning 65 start turning 65

Rate: Rate: 1 every 1 every 88 secondssecondsDuration: Duration: 2020 yearsyearsImpacted: EVERYTHINGImpacted: EVERYTHING

22/122/1

22/1/1022/1/10 (USA (USA

adult population will have adult population will have grown by 23 million grown by 23 million between 2006 and 2016. between 2006 and 2016. Ages Ages 18-4918-49 will have will have grown by one million, age grown by one million, age 50+50+ will have grown will have grown by 22 million)by 22 million)

““The New Customer The New Customer

Majority is the … Majority is the … onlyonly … adult market with … adult market with

realistic prospects for realistic prospects for significant sales growth significant sales growth

in dozens of product lines in dozens of product lines for thousands of for thousands of

companies.”companies.” —David Wolfe & Robert Snyder, —David Wolfe & Robert Snyder, Ageless MarketingAgeless Marketing

IBIBMMtoto

IIBBMM

$55B*$55B**IBM Global Services/*IBM Global Services/

“Systems integrator of choice”“Systems integrator of choice”

PlanetarPlanetary y RainmakerRainmaker--inin--ChiefChief!!

“[CEO Sam] Palmisano’s “[CEO Sam] Palmisano’s strategy is to expand tech’s strategy is to expand tech’s borders by pushing users—borders by pushing users—

and entire industries—and entire industries—towardtoward radicallradically y differentdifferent businessbusiness modelsmodels.. The payoff for IBM would be The payoff for IBM would be

access to an ocean of revenue—Palmisano access to an ocean of revenue—Palmisano

estimates it atestimates it at $$500500 billionbillion aa y yearear ——that technology companies have never been that technology companies have never been

able to touch.”able to touch.” ——FortuneFortune

“ ‘“ ‘Results’ are Results’ are measured by the measured by the

successsuccess of all those of all those who have purchased who have purchased

your product or your product or service”service” —Jan Gunnarsson & Olle —Jan Gunnarsson & Olle

Blohm, Blohm, The Welcoming LeaderThe Welcoming Leader

Huge:Huge: Customer Customer

““SatisfactionSatisfaction with with product/Service”product/Service”

versus versus CustomerCustomer

““SuccessSuccess””

UPSUPS

““WHAT CAN BROWN DO FOR YOU?”WHAT CAN BROWN DO FOR YOU?”

“It’s all about “It’s all about solutionssolutions. We . We talk with customers about talk with customers about

how to run better, stronger, how to run better, stronger, cheaper supply chains. We cheaper supply chains. We have 1,000 engineers who have 1,000 engineers who work with customers …”work with customers …”

—Bob Stoffel, UPS senior exec—Bob Stoffel, UPS senior exec

““THE GIANT STALKING BIG OIL: THE GIANT STALKING BIG OIL:

How How SchlumbergerSchlumberger Is Rewriting the Rules of the Is Rewriting the Rules of the

Energy Game.”:Energy Game.”: “IPM [Integrated “IPM [Integrated Project Management] strays from Project Management] strays from [Schlumberger’s] traditional role [Schlumberger’s] traditional role as a service provider and moves as a service provider and moves

deeper into areas once dominated deeper into areas once dominated by the majors.”by the majors.”

Source: Source: BusinessWeekBusinessWeek cover story, January 2008 cover story, January 2008

IPM’s Chief:IPM’s Chief: “We’ll do “We’ll do just about anything just about anything

an oilfield owner an oilfield owner would want, from would want, from

drilling to drilling to production.”production.”

UTC/Otis + UTC/Carrier:UTC/Otis + UTC/Carrier: boxes* to boxes* to “integrated “integrated

building systems”building systems”

*elevators, air conditioners*elevators, air conditioners

““We want to be We want to be the air traffic the air traffic controllers of controllers of electrons.”electrons.”

—Bob Nardelli, then CEO, —Bob Nardelli, then CEO, GE Power Systems GE Power Systems (GE core business that has been making products(GE core business that has been making products such as transformers for decades and decades) such as transformers for decades and decades)

MasterCard MasterCard AdvisorsAdvisors

I. LAN Installation Co. (3%)

II. Geek Squad. (30%.)

III. Acquired by Best Buy.

IV. Flagship of Best BuyFlagship of Best Buy Wholesale “Solutions” Wholesale “Solutions” Strategy Makeover. Strategy Makeover.

11/46/46

““We made mistakes, of course. Most of them were We made mistakes, of course. Most of them were omissions we didn’t think of when we initially wrote the omissions we didn’t think of when we initially wrote the

software. software. We fixed them by doing it over and over, We fixed them by doing it over and over, again and again.again and again. We do the same today. While our We do the same today. While our competitors are still sucking their thumbs trying to competitors are still sucking their thumbs trying to

make the design perfect, we’re already on prototype make the design perfect, we’re already on prototype

versionversion ##55.. By the time our rivals are ready By the time our rivals are ready

with wires and screws, we are on version with wires and screws, we are on version

##1010.. It gets back to It gets back to planning versus actingplanning versus acting: : We act We act from day onefrom day one; ; others plan how others plan how

toto planplan——for monthsfor months.”.”

——Bloomberg by BloombergBloomberg by Bloomberg

““What are Rutan’s management rules? He What are Rutan’s management rules? He insists he doesn’t have any. ‘I don’t like insists he doesn’t have any. ‘I don’t like

rules,’ he says. ‘Things are so easy to change rules,’ he says. ‘Things are so easy to change if you don’t write them down.’ Rutan feels if you don’t write them down.’ Rutan feels good management works in much the same good management works in much the same

way good aircraft design does:way good aircraft design does: Instead Instead of trof tryyiningg to fi to figgure out the best ure out the best

way to do somethinway to do somethingg and and stickinstickingg to it, to it, jjust trust tryy out an out an

aapppproach and keeroach and keepp fixin fixingg it it.”.”

——Eric Abrahamson & David Freedman, Chapter 8, “Messy Eric Abrahamson & David Freedman, Chapter 8, “Messy Leadership,”Leadership,” from A Perfect Mess: The Hidden Benefits of Disorder from A Perfect Mess: The Hidden Benefits of Disorder

READY.READY.FIRE.FIRE.AIM.AIM.

H. Ross Perot (vs H. Ross Perot (vs ““Aim! Aim! Aim!”Aim! Aim! Aim!” /EDS vs GM/1985)/EDS vs GM/1985)

In Search of ExcellenceIn Search of Excellence /1982: /1982: The Bedrock “Eight Basics”The Bedrock “Eight Basics”

1. 1. A Bias for ActionA Bias for Action2. Close to the Customer2. Close to the Customer3. Autonomy and Entrepreneurship3. Autonomy and Entrepreneurship4. Productivity Through People4. Productivity Through People5. Hands On, Value-Driven5. Hands On, Value-Driven6. Stick to the Knitting6. Stick to the Knitting7. Simple Form, Lean Staff7. Simple Form, Lean Staff8. Simultaneous Loose-Tight8. Simultaneous Loose-Tight Properties Properties

““Experiment Experiment fearlessly”fearlessly”

Source: BusinessWeek, “Type A Organization Strategies: How to Hit a Moving Target”—Tactic #1Tactic #1

“relentless trial“relentless trial and error” and error”

Source: Source: Wall Street JournalWall Street Journal, cornerstone of effective approach to “rebalancing” company, cornerstone of effective approach to “rebalancing” company portfolios in the face of changing and uncertain global economic conditions (11.08.10) portfolios in the face of changing and uncertain global economic conditions (11.08.10)

Lesson45:Lesson45: WTTMSWTTMS

WW

WhoeverWhoeverTriesTriesTheTheMostMostStuffStuffWinsWins

Better yet:Better yet: WTTMSWTTMSTFTFWW

WhoeverWhoeverTriesTriesTheTheMostMostStuffStuffTheTheFastestFastestWinsWins

““Rose gardeners face a choice every spring. The long-term fate of a rose garden Rose gardeners face a choice every spring. The long-term fate of a rose garden depends on this decision. If you want to have the largest and most glorious roses of the depends on this decision. If you want to have the largest and most glorious roses of the neighborhood, you will prune hard. This represents a policy of low tolerance and tight neighborhood, you will prune hard. This represents a policy of low tolerance and tight

control. You force the plant to make the maximum use of its available resources, by control. You force the plant to make the maximum use of its available resources, by

putting them into the the rose’s ‘core business.’ putting them into the the rose’s ‘core business.’ Pruning hard is a Pruning hard is a dangerous policy in an unpredictable environment. Thus, dangerous policy in an unpredictable environment. Thus, if you are in a spot where you know nature may play tricks if you are in a spot where you know nature may play tricks on you, you may opt for a policy of high tolerance. You will on you, you may opt for a policy of high tolerance. You will

never have the biggest roses, but you have a much-never have the biggest roses, but you have a much-enhanced chance of having roses every year. You will enhanced chance of having roses every year. You will

achieve a gradual renewal of the plant. In short, tolerant achieve a gradual renewal of the plant. In short, tolerant pruning achieves two ends: (1) pruning achieves two ends: (1) It makes it easier to cope It makes it easier to cope with unexpected environmental changeswith unexpected environmental changes. (2) . (2) It leads to a It leads to a

continuous restructuring of the plantcontinuous restructuring of the plant. The policy of . The policy of tolerance admittedly wastes resources—the extra buds tolerance admittedly wastes resources—the extra buds

drain away nutrients from the main stem. But in an drain away nutrients from the main stem. But in an unpredictable environment, this policy of tolerance makes unpredictable environment, this policy of tolerance makes the rose healthier in the long run.”the rose healthier in the long run.” —Arie De Geus, —Arie De Geus, The Living CompanyThe Living Company

““RewardReward excellent failures.

PunishPunish mediocre successes.”

—Phil Daniels, Sydney exec

Read ItRead It

Richard Farson & Ralph Keyes:Richard Farson & Ralph Keyes:

Whoever MakesWhoever Makes the Most Mistakes the Most Mistakes Wins: The ParadoxWins: The Paradox

of Innovation of Innovation

““The secret of fast The secret of fast progress is progress is

inefficiency, fast , fast and furious and and furious and

numerous failures.”numerous failures.”—Kevin Kelly

The The Bottleneck Bottleneck

……

““The Billion-man The Billion-man Research Team: Research Team:

Companies offering Companies offering work to online work to online

communities are communities are reaping the benefits of reaping the benefits of

‘crowdsourcing.’”‘crowdsourcing.’” —Headline, —Headline, FTFT

““Diverse groups of problem solvers—groupsDiverse groups of problem solvers—groups of people with diverse tools—consistently of people with diverse tools—consistently outperformed groups of the best and the outperformed groups of the best and the

brightest. If I formed two groups, one brightest. If I formed two groups, one randomrandom (and therefore diverse) and one (and therefore diverse) and one

consisting of the consisting of the bestbest individual performers, individual performers, the first group almost always did better. …the first group almost always did better. …

DiversityDiversity trumped trumped abilityability.”.” —Scott Page, —Scott Page, The Difference: The Difference:

How the Power of Diversity Creates Better Groups,How the Power of Diversity Creates Better Groups, Firms, Schools, and Societies Firms, Schools, and Societies

““Who’s the most Who’s the most interesting person interesting person you’ve met in the you’ve met in the last 90 days? How last 90 days? How do I get in touch do I get in touch

with them?”with them?” —Fred Smith—Fred Smith

Vanity Fair:Vanity Fair: “What is your most marked“What is your most marked characteristic?”characteristic?”

Mike Bloomberg:Mike Bloomberg:

“Curiosity.”“Curiosity.”

“The The Bottleneck Bottleneck

……

“The Bottleneck The Bottleneck … Is at … Is at

the Top of the the Top of the Bottle”Bottle”

“Where are you likely to find people “Where are you likely to find people with the with the least diversitleast diversityy of ex of expperienceerience, ,

the the larlarggest investment in the est investment in the ppastast,, and the g and the greatest reverence for reatest reverence for

industrindustryy do doggmama … …

AtAt thethe totop!”p!”

— Gary Hamel/— Gary Hamel/Harvard Business ReviewHarvard Business Review

Human creativity Human creativity is the ultimate is the ultimate

economic economic resourceresource

““My wife and I went to a [kindergarten] parent-teacher My wife and I went to a [kindergarten] parent-teacher conference and were informed that our budding conference and were informed that our budding

refrigerator artist, Christopher, would be receiving a refrigerator artist, Christopher, would be receiving a grade of Unsatisfactory in art. We were shocked. How grade of Unsatisfactory in art. We were shocked. How

could any child—let alone our child—receive a poor grade could any child—let alone our child—receive a poor grade

in art at such a young age?in art at such a young age? His teacher His teacher informed us that he had informed us that he had

refused to color within the refused to color within the lines, which was a state lines, which was a state

requirement for requirement for demonstrating ‘grade-level demonstrating ‘grade-level motor skillsmotor skills.’ ”.’ ” —Jordan Ayan, —Jordan Ayan, AHA!AHA!

Ye gads: ““Thomas Stanley has not only found no Thomas Stanley has not only found no correlation between success in school and an abilitcorrelation between success in school and an abilityy to accumulate wealth, he’s actuallto accumulate wealth, he’s actuallyy found a ne found a neggative ative correlationcorrelation. ‘It seems that school-related evaluations . ‘It seems that school-related evaluations

are poor predictors of economic success,’ Stanley are poor predictors of economic success,’ Stanley concluded. What did predict success was a willingness concluded. What did predict success was a willingness

to take risks. Yet the success-failure standards of to take risks. Yet the success-failure standards of

most schools penalized risk takers.most schools penalized risk takers. Most Most educational seducational syystems reward stems reward those who plathose who playy it safe. As a it safe. As a result, those who do well in result, those who do well in school find it hard to take school find it hard to take

risks later onrisks later on.”.” —Richard Farson & Ralph Keyes,

Whoever Makes the Most Mistakes Wins

““Every child is Every child is born born an artist. an artist. The trick is to The trick is to

remainremain an artist.” an artist.” —Picasso—Picasso

““Human Human creativity is creativity is the ultimate the ultimate

economic economic resource.”resource.” —Richard Florida,—Richard Florida,

The Rise of the Creative ClassThe Rise of the Creative Class

18 18 ……

““The doctor The doctor interruptsinterrupts after …*after …*

*Source: Jerome Groopman, *Source: Jerome Groopman, How Doctors ThinkHow Doctors Think

18 18 ……

18 … 18 … secondsseconds!!

[An [An obsessionobsession with] Listening is ... the ultimate mark with] Listening is ... the ultimate mark

of of RespectRespect..

Listening is ... the heart and soul of Listening is ... the heart and soul of EngagementEngagement..Listening is ... the heart and soul of Listening is ... the heart and soul of KindnessKindness..Listening is ... the heart and soul of Listening is ... the heart and soul of ThoughtfulnessThoughtfulness..Listening is ... the basis for true Listening is ... the basis for true CollaborationCollaboration..Listening is ... the basis for true Listening is ... the basis for true PartnershipPartnership..Listening is ... a Listening is ... a Team SportTeam Sport..Listening is ... a Listening is ... a Developable Individual SkillDevelopable Individual Skill.* .* (*Though women (*Though women are are farfar better at it than men.) better at it than men.)

Listening is ... the basis forListening is ... the basis for CommunityCommunity..Listening is ... the bedrock of Listening is ... the bedrock of Joint Ventures that workJoint Ventures that work..Listening is ... the bedrock of Listening is ... the bedrock of Joint Ventures thatJoint Ventures that growgrow..Listening is ... the core of Listening is ... the core of effective Cross-functional effective Cross-functional CommunicationCommunication* * (*Which is in turn Attribute #1 of (*Which is in turn Attribute #1 of organizational effectiveness.)organizational effectiveness.)

[cont.][cont.]

… … and just waitand just wait

“I am often asked by I am often asked by would-be entrepreneurs would-be entrepreneurs seeking escape from life seeking escape from life within huge corporate within huge corporate structures, structures, ‘How do I build a small firm for myself?’ The answer The answer

seems obviousseems obvious … …

Source: Paul Ormerod, Why Most Things Fail: Evolution, Extinction and Economics

“I am often asked by would-be entrepreneurs seeking escape from life within huge corporate structures, ‘How

do I build a small firm for myself?’ The answer seems

obvious: Buy a very Buy a very largelarge

one and just one and just waitwait.”.” —Paul Ormerod, Why Most Things

Fail: Evolution, Extinction and Economics

““Mr. Foster and his McKinsey colleagues Mr. Foster and his McKinsey colleagues collected detailed performance data stretching collected detailed performance data stretching

back back 4040 years for years for 1,0001,000 U.S. companies. U.S. companies.

TheTheyy found that found that nonenone ofof

the lon the longg-term survivors mana-term survivors managged ed to outto outpperform the market. Worse, erform the market. Worse, the lonthe longger comer comppanies had been in anies had been in

the database, the worse thethe database, the worse theyy did did.”.”

—Financial Times—Financial Times

““Data drawn from the real world Data drawn from the real world attest to a fact that is beyond attest to a fact that is beyond

our control:our control: Everything in existence tends to deteriorate.”

—Norberto Odebrecht, —Norberto Odebrecht, Education Through WorkEducation Through Work

Dick Kovacevich: You don’t get better by being

bigger. You get worse.”

M & A success rate as measured M & A success rate as measured by adding value to theby adding value to the

acquirer:acquirer:

15%15%Source: Mark Sirower, Source: Mark Sirower, The Synergy TrapThe Synergy Trap

SpinoffsSpinoffs … …

systematically perform systematically perform better than IPOs … track better than IPOs … track

record, profits …record, profits … “freed from “freed from the confines of the parent … the confines of the parent … more entrepreneurial, more more entrepreneurial, more nimble”nimble” ——Jerry KnightJerry Knight/ Washington Post/ / Washington Post/ 08.0508.05

MittELstandMittELstand* * ****

**“agile creatures darting between the legs of“agile creatures darting between the legs of the multinational monsters”the multinational monsters” ((Bloomberg BusinessWeek, Bloomberg BusinessWeek, 10.10)10.10)

**E.g. Goldmann Produktion**E.g. Goldmann Produktion

““agile creatures agile creatures darting betweendarting between the legs of the the legs of the multinational multinational monsters”monsters”

Source:Source: Bloomberg BusinessWeek Bloomberg BusinessWeek on the Germanon the German

MITTELSTANDMITTELSTAND

Retail Superstars: Retail Superstars: Inside the 25 Best Inside the 25 Best

Independent StoresIndependent Storesin Americain America —by George Whalin—by George Whalin

““Be the best. Be the best. It’s the only It’s the only

market that’s market that’s not crowded.”not crowded.”

From: From: Retail Superstars: Inside the 25 BestRetail Superstars: Inside the 25 Best Independent Stores in America,Independent Stores in America, George Whalin George Whalin

The Red The Red Carpet Carpet StoreStore(Joel Resnick/Flemington NJ)(Joel Resnick/Flemington NJ)

There is moreThere is more than one way to than one way to

skin a cat!*skin a cat!**Every project*Every project REQUIRESREQUIRES (if you’re smart)(if you’re smart) an an

outside look by one/some Seriously Weird Cat/soutside look by one/some Seriously Weird Cat/s——in pursuit of whacked-out options.in pursuit of whacked-out options.

14,00014,00020,00020,000

3030

14,000/14,000/eeBayBay20,000/Amazon20,000/Amazon

3030/Craigslist/Craigslist

Kevin Roberts’ CredoKevin Roberts’ Credo

11. Ready. Fire! Aim.. Ready. Fire! Aim.2. If it ain’t broke ... Break it!2. If it ain’t broke ... Break it!3. Hire crazies.3. Hire crazies.4. Ask dumb questions.4. Ask dumb questions.5. Pursue failure.5. Pursue failure.6. Lead, follow ... or get out of the way!6. Lead, follow ... or get out of the way!7. Spread confusion.7. Spread confusion.8. Ditch your office.8. Ditch your office.9. Read odd stuff.9. Read odd stuff.

10. Avoid moderationAvoid moderation!!

In the beginning, In the beginning, there was the there was the daydream …daydream …

““The Discipline Of Daydreaming”:The Discipline Of Daydreaming”: “Nearly every major decision of “Nearly every major decision of my business career was, to some degree, the result of daydreaming. my business career was, to some degree, the result of daydreaming. … To be sure, in every case I had to collect a lot of data, do detailed … To be sure, in every case I had to collect a lot of data, do detailed analysis, and make a data-based argument to convince superiors, analysis, and make a data-based argument to convince superiors,

colleagues and business partners. But that all came later. colleagues and business partners. But that all came later. In In the bethe begginnininningg, there was the , there was the

dadayydreamdream.. By daydreaming, I mean loose, unstructured By daydreaming, I mean loose, unstructured thinking with no particular goal in mind. … In fact, I think thinking with no particular goal in mind. … In fact, I think

daydreaming is a distinctive mode of cognition especially well suited daydreaming is a distinctive mode of cognition especially well suited to the complex, ‘fuzzy’ problems that characterize a more turbulent to the complex, ‘fuzzy’ problems that characterize a more turbulent business environment. … Daydreaming is an effective way of coping business environment. … Daydreaming is an effective way of coping with complexity. When a problem has a high degree of complexity, with complexity. When a problem has a high degree of complexity,

the level of detail can be overwhelming. The more one focuses on the the level of detail can be overwhelming. The more one focuses on the details, the more one risks being lost in them. … Every child knows details, the more one risks being lost in them. … Every child knows

how to daydream. But many, perhaps most, lose the capacity as they how to daydream. But many, perhaps most, lose the capacity as they grow up. …”grow up. …” —Dov Frohman (& Robert Howard),—Dov Frohman (& Robert Howard), Leadership The Hard Way: Leadership The Hard Way:

Why Leadership Can’t Be Taught—And How You Can Learn It Anyway Why Leadership Can’t Be Taught—And How You Can Learn It Anyway (Chapter 5, “The Soft Skills Of Hard Leadership”) (Chapter 5, “The Soft Skills Of Hard Leadership”)