Tom Peters’ Excellence! NOW! Discover Network/Acquirer Advisory Council

“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

Tom Peters’Tom Peters’

Excellence!Excellence!

NOW!NOW!Discover Network/Acquirer Advisory CouncilDiscover Network/Acquirer Advisory CouncilJW Marriott ChicagoJW Marriott Chicago/14 September 2011/14 September 2011

(Presentation/Presentation (Presentation/Presentation LONGLONG @ tompeters.com) @ tompeters.com)

NOTENOTE:: To appreciateTo appreciate this presentation this presentation [and ensure [and ensure

that it is not a that it is not a messmess],], you need you need Microsoft fonts:Microsoft fonts:

“Showcard Gothic,”“Showcard Gothic,” “Ravie,”“Ravie,” “Chiller”“Chiller”

andand “Verdana”“Verdana”

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 Properties” Properties”

““Breakthrough” 82*Breakthrough” 82*

People! People! Customers! Customers!

Action! Action! Values!Values!

Excellence!Excellence! **In Search of ExcellenceIn Search of Excellence

“‘“‘hard’ is hard’ is ‘soft.’ ‘soft’ ‘soft.’ ‘soft’ is ‘hard.’”is ‘hard.’”

REALLY First REALLY First Things Before Things Before First ThingsFirst Things

#1#1

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?

#2#2

XFX = XFX = #1#1**

*Cross-Functional *Cross-Functional eXcellence eXcellence

Never Never waste a waste a lunch!lunch!

““Allied commands depend on Allied commands depend on mutual confidence mutual confidence

and this confidence is and this confidence is gained, above all gained, above all

through thethrough the develodeveloppmentment

ofof friendshifriendshippss.”.”

——General D.D. Eisenhower, General D.D. Eisenhower, Armchair GeneralArmchair General* *

*“Perhaps his most outstanding ability [at West Point]*“Perhaps his most outstanding ability [at West Point] was the ease with which was the ease with which he made friends and earned he made friends and earned the trust of fellow cadets who came from the trust of fellow cadets who came from

widelwidelyy varied back varied backggroundsrounds; it was a quality that would pay ; it was a quality that would pay great dividends during his future coalition command.”great dividends during his future coalition command.”

XFX/Typical XFX/Typical SocialSocial Accelerators Accelerators1. EVERYONE’s [more or less] JOB #1: Make friends in other 1. EVERYONE’s [more or less] JOB #1: Make friends in other functions! (Purposefully. Consistently. Measurably.)functions! (Purposefully. Consistently. Measurably.)2. “Do lunch” with people in other functions!! Frequently!! 2. “Do lunch” with people in other functions!! Frequently!! (Minimum 10% to 25% for everyone? Measured.)(Minimum 10% to 25% for everyone? Measured.)3. Ask peers in other functions for references so you can 3. Ask peers in other functions for references so you can become conversant in their world. (It’s one helluva sign become conversant in their world. (It’s one helluva sign of ... GIVE-A-DAMN-ism.) of ... GIVE-A-DAMN-ism.) 4. Religiously invite counterparts in other functions to your 4. Religiously invite counterparts in other functions to your team meetings. Ask them to present “cool stuff” from “their team meetings. Ask them to present “cool stuff” from “their world” to your group. (Useful. Mark of respect.)world” to your group. (Useful. Mark of respect.)5. 5. PROACTIVELY SEEK EXAMPLES OF “TINY” ACTS OF “XFX” PROACTIVELY SEEK EXAMPLES OF “TINY” ACTS OF “XFX” TO ACKNOWLEDGE—PRIVATELY AND PUBLICALLY. (Bosses: TO ACKNOWLEDGE—PRIVATELY AND PUBLICALLY. (Bosses: ONCE A DAY … make a short call or visit or send an email of ONCE A DAY … make a short call or visit or send an email of “Thanks” for some sort of XFX gesture by your folks and “Thanks” for some sort of XFX gesture by your folks and some other function’s folks.)some other function’s folks.) 6. Present counterparts in other functions awards for 6. Present counterparts in other functions awards for service to your group. Tiny awards at least weekly; and an service to your group. Tiny awards at least weekly; and an “Annual“Annual All-Star Supporters [from other groups] Banquet” All-Star Supporters [from other groups] Banquet” modeled after superstar salesperson banquets. modeled after superstar salesperson banquets.

#3#3

““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.]

Message:Message: Listening is a Listening is a … …

professionprofession!!

#4#4

Meetings = #1 Meetings = #1 leadership leadership

opportunityopportunity

Meeting:Meeting: EverEveryy meetin meetingg that that does not stir the imadoes not stir the imaggination ination

and curiosity of attendees and and curiosity of attendees and increase bondinincrease bondingg and co- and co-

oopperation and eneration and enggaaggement ement and sense of worth and and sense of worth and

motivate ramotivate rappid action and id action and enhance enthusiasm is a enhance enthusiasm is a

ppermanentlermanentlyy lost o lost opppportunitortunity.y.

Stuff Your Stuff Your Grandmother Grandmother

Taught You That Taught You That Somehow Got Somehow Got

Lost in the Lost in the [Frenetic] [Frenetic]

ShuffleShuffle

Press Ganey AssocPress Ganey Assoc:: 139,380139,380 former former patients from patients from 225225 hospitals: hospitals:

nonenone of THE top 15 factors of THE top 15 factors

determining determining PPatient atient SSatisfaction atisfaction referred to patient’s health referred to patient’s health outcomeoutcome..

Instead:Instead: directldirectly related to y related to StaffStaff Interaction;Interaction; directldirectly correlated with y correlated with

EmploEmployyee Satisfactionee Satisfaction

Source: Source: Putting Patients FirstPutting Patients First, Susan Frampton, Laura Gilpin, Patrick Charmel, Susan Frampton, Laura Gilpin, Patrick Charmel

““Courtesies of a small and Courtesies of a small and trivial character are the ones trivial character are the ones which strike deepest in the which strike deepest in the grateful and appreciating grateful and appreciating

heart.”heart.” —Henry Clay,American Statesman (1777-1852)

"Let's not forget that small "Let's not forget that small emotions are the great emotions are the great

captains of our lives."captains of our lives." –—Van Gogh–—Van Gogh

““I regard I regard aappoloologgizinizing as the g as the most magical, healing, most magical, healing,

restorative gesture human restorative gesture human beings can make. It is the beings can make. It is the

centercenterppieceiece of my work with of my work with executives who want to get executives who want to get better.”better.” —Marshall Goldsmith—Marshall Goldsmith, What Got You , What Got You

Here Won’t Get You There: How Successful People BecomeHere Won’t Get You There: How Successful People Become Even More Successful. Even More Successful.

With a new and forthcoming policy on With a new and forthcoming policy on apologies … Toro, the lawn mower apologies … Toro, the lawn mower folks, reduced the average cost of folks, reduced the average cost of

settling a claim fromsettling a claim from $$115,000115,000 in in

1991 to1991 to $$35,00035,000 in 2008 in 2008 …… and and the companthe companyy hasn’t hasn’t been to trial in the been to trial in the

lastlast1515 y yearsears!!

K = R = K = R = PP

Kindness = Kindness = Repeat Business Repeat Business

== Profit.Profit.

People 1People 1stst

People 2ndPeople 2ndPeople 3rdPeople 3rdPeople 4thPeople 4thPeople 5thPeople 5thPeople 6thPeople 6th

““You have to You have to treat your treat your

employees like employees like customers.”customers.” —Herb —Herb

Kelleher, upon being asked his “secret to success”Kelleher, upon being asked his “secret to success”

Source: Joe Nocera, Source: Joe Nocera, NYTNYT, “Parting Words of an Airline Pioneer,” , “Parting Words of an Airline Pioneer,” on the occasion of Herb Kelleher’s retirement after 37 years at on the occasion of Herb Kelleher’s retirement after 37 years at

Southwest Airlines Southwest Airlines (SWA’s pilots union took out a full-page ad in USA (SWA’s pilots union took out a full-page ad in USA Today Today

thanking HK for all he had done) thanking HK for all he had done) ; across the way in Dallas, American ; across the way in Dallas, American Airlines’ pilots were Airlines’ pilots were picketingpicketing AA’s Annual Meeting)AA’s Annual Meeting)

"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 What's the Secret? To

Providing a World-Class Customer ExperienceProviding a World-Class Customer Experience

"If you want staff to "If you want staff to give great service, give great service, give great service to give great service to staff."staff." —Ari Weinzweig, Zingerman's

… … no less than no less than CathedralsCathedrals in which the full and in which the full and

awesome power of the awesome power of the Imagination and Spirit and Imagination and Spirit and native Entrepreneurial flairnative Entrepreneurial flair

of diverse individualsof diverse individuals is is unleashed in passionate unleashed in passionate pursuit of … pursuit of … ExcellenceExcellence..

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 long shots (people with “a certain something”) you bet on whoThe long shots (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.”

2255

MBWMBWAA

Managing By Wandering Around/Managing By Wandering Around/HPHP

#4:#4: WALKWALK

““We have a We have a ‘strategic ‘strategic plan.’ It’s plan.’ It’s

called ‘doing called ‘doing things.’” things.’” —HK—HK

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)

““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)

11/45/45

Lesson45:Lesson45: WTTMSWTTMS

WW

WhoeverWhoeverTriesTriesTheTheMostMostStuffStuffWinsWins

““You miss You miss

100100%% of the shots of the shots you never you never

take.”take.” —Wayne—Wayne GretzkyGretzky

““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

We Are We Are What What

We Eat We Eat ……

““You will become You will become like the five people like the five people you associate with you associate with the most—this can the most—this can

be either a blessing be either a blessing or a curse.”or a curse.” —Billy Cox—Billy Cox

Measure/Manage: Portfolio “StranMeasure/Manage: Portfolio “Stranggeness”/Qualiteness”/Qualityy

StaffStaffConsultantsConsultants

VendorsVendorsOut-sourcing Partners Out-sourcing Partners (#, Quality, Diversity)(#, Quality, Diversity)

Innovation Alliance PartnersInnovation Alliance PartnersCustomersCustomers

Competitors Competitors (who we “benchmark” against)(who we “benchmark” against) Strategic Initiatives Strategic Initiatives

Product Portfolio Product Portfolio (Line extension v. Leap)(Line extension v. Leap)IS/IT ProjectsIS/IT ProjectsHQ LocationHQ LocationLunch MatesLunch Mates

LanguageLanguageBoardBoardEtc.Etc.

The “We are what we eat”/ The “We are what we eat”/ “We are who we hang out with”“We are who we hang out with” Axiom: Axiom: At its core, At its core, evereveryy (!!!) (!!!)

relationship-partnership decision relationship-partnership decision (employee, vendor, customer, etc, (employee, vendor, customer, etc, etc) is a etc) is a stratestrateggicic decision about: decision about:

“Innovate,“Innovate, ‘ ‘YesYes’ ’ oror ‘No’ ” ”

Can you pass the …Can you pass the … “Squint “Squint test”?test”?

“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

““TGR”-TGR”-power!power!

Conveyance: Kingfisher Air Conveyance: Kingfisher Air Location: Approach to New DelhiLocation: Approach to New Delhi

““May I clean May I clean your glasses, your glasses,

sir?”sir?”

““Let me help Let me help you down you down

the jetway.”the jetway.”

<TG<TGWWandand … …

>TG>TGRR[Things Gone [Things Gone WRONGWRONG-Things Gone -Things Gone RIGHTRIGHT]]

Little =Little =

BIBIGG

Big carts =Big carts =

1.5X1.5XSource: WalmartSource: Walmart

8/808/80

CustomersCustomers describing their describing their service experience as service experience as

“superior”: “superior”: 88%%ComComppaniesanies describing describing

the service experience they the service experience they provide asprovide as

“ “superior”: superior”: 8080%%——Source: Bain & Company survey of 362 companies, reported in John DiJulius,Source: Bain & Company survey of 362 companies, reported in John DiJulius,

What's the Secret? To Providing a World-Class Customer ExperienceWhat's the Secret? To Providing a World-Class Customer Experience

> Exxon > Exxon MobilMobil

Design Design RulesRules!!

APPLEAPPLE market market capcap

> Exxon Mobil* > Exxon Mobil*

*August 2011*August 2011

Charles Handy:Charles Handy: “One bank is currently claiming to … “One bank is currently claiming to … ‘leverage its global footprint to provide effective financial

solutions for its customers by providing a gateway to

diverse markets.’”

““I assume that it is just saying that it I assume that it is just saying that it

isis there to …there to … ‘ ‘helhelpp its its customers customers

wherever thewherever theyy areare’.”’.” —Charles Handy—Charles Handy

WOMEN WOMEN BuyBuy! !

WOMEN WOMEN RoarRoar! !

WOMEN WOMEN RuleRule!!

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

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

Economic Growth Is Economic Growth Is Driven by Driven by

WomenWomen.”.”

Source: Headline, Economist

““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

““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%

**Women Women decidedecide..**Women Women savesave..**Women Women ssppendend..**Women Women rulerule..

““Men Are Men Are Finished”Finished”

Source: Slate conference 0920/NYUSource: Slate conference 0920/NYU

7/17/133

1/8/201/8/20

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!““People turning 50 People turning 50 today have today have more more

thanthan halfhalf of of their adult life their adult life

ahead of them.”ahead of them.” —Bill Novelli, 50+: Igniting a Revolution to Reinvent America

44-6544-65:: “New “New Customer Customer Majority”Majority”

Source: Source: Ageless MarketingAgeless Marketing, David Wolfe & Robert Snyder, David Wolfe & Robert Snyder

7/17/133

3030!!

14,00014,00020,00020,000

3030

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

3030/Craigslist/Craigslist