Tom Peters SeminarM3 Rollercoaster Days:

Learning to …Rock & Roll!

IMRA/Logistics2001Orlando 01.09.01

“There will be more confusion in the the

business world in the next decade than in any decade in history. And the

current pace of change will only accelerate.”

Steve Case

“The corporation as we know it, which is now 120 years old, is

not likely to survive the next 25 years. Legally and

financially, yes, but not structurally and economically.”

Peter Drucker, Business 2.0 (08.00)

Zounds: Bradlees. Wards. Sears/89. Same-store Xmas

sales. Olds. Cherokee. CEOs @ P&G, Coca Cola, Gillette, Xerox, Lucent, Aetna, Mattel, Chrysler USA, Home Depot (sorta). AT&T

Breakup III. NASDAQ.

Part I: Brand InsidePart II: Brand Outside

Part III: Brand Leadership

Brand Inside

Brand Org: Lean, Linked,

Electronic & Malleable

90% Doomed

White Collar Revolution!

New OrleansApril 2000:

NAPM

You are the … Rock Stars

of the B2B Age!

Brand Inside

Brand Talent: The Great War for Talent

“We have transitioned from an asset-based strategy

to a talent-based strategy.”

Jeff Skilling, Enron

“When land was the scarce resource, nations battled

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

Stan Davis & Christopher Meyer, futureWEALTH

“We believe companies can increase their market cap 50 percent in 3 years. Steve

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

more talented, higher paid managers in charge. He increased

profitability from $25 million to $80 million in 2 years.”

Ed Michaels, War for Talent (05.17.00)

So-so plant manager, $1M per year. Pay: $110,000 plus $60,000. Top plant manager,

$3-4M per year. Pay: $135,000 plus $90,000. Net:

$2-3M for $50K.

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

Women in the ’00s:

Born to Lead!

“AS LEADERS, WOMEN RULE: New Studies find that female managers

outshine their male counterparts on almost

every measure”Title, Special Report, Business Week, 11.20.00

“On average, women and men possess a number of different innate skills. And current trends suggest that many sectors of the twenty-

first-century economic community are going to need the natural

talents of women.Helen Fisher, The First Sex: The Natural Talents of

Women and How They are Changing the World

Women’s Stuff = New Economy Match

Improv skillsRelationship-centric

Less “rank consciousness”Self determinedTrust sensitive

IntuitiveNatural “empowerment freaks” [less

threatened by strong people]Intrinsic [motivation] > Extrinsic

“Boys are trained in a way that will make

them irrelevant.”

Phil Slater

Brand InsideReprise:

THINK WEIRD: The High Standard

Deviation Enterprise

Renewal = The Weird 10 = The “High S.D.” Enterprise/Individual

Pioneer [Weird] Acquisitions

Pioneer [Weird] Customers & Alliance Partners [Measure the Customer-Partner Portfolios’ S.D./Weirdness Index]

Divide & Conquer/“Sell-by” Pioneer Assignments/Pioneer Projects/Pioneer Partners

Hire Weird [Diversity]/Train Weird/Promote Weird/Pay Gobs & Promote Fast & Cherish “Six Sigma” Talent/Appoint a Weird Board

Weed Un-weird [“One Sigma” “Talent,” etc.]

Hang out with Weird [Univ. of Weird]/Lunch with Weird/Read & Surf Weird/Vacate Weird

R.A.F. to R.F.A. to F.F.F. Sense of Humor [Rhapsodize Over Thine Cool Failures!]

Re-enforce a “Culture of Disrespect”/Passionate Piracy

Saviors-in-Waiting

Disgruntled CustomersFringe CompetitorsRogue Employees

Edge SuppliersWayne Burkan, Wide Angle Vision: Beat the

Competition by Focusing on Fringe Competitors, Lost Customers, and Rogue

Employees

“There is an ominous downside to strategic supplier relationships. An

SSR supplier is not likely to function as any more than a mirror to your organization. Fringe suppliers that offer innovative business practices

need not apply.”

Wayne Burkan, Wide Angle Vision: Beat the Competition by Focusing on Fringe

Competitors, Lost Customers, and Rogue Employees

Part I: Brand InsidePart II: Brand Outside

Part III: Brand Leadership

Forces @ Work II

The Commodity Trap

“The ‘surplus society’ has a surplus of

similar companies, employing

similar people, with similar educational backgrounds, working in

similar jobs, coming up with similar

ideas, producing similar things, with

similar prices and similar quality.”

Kjell Nordstrom and Jonas Ridderstrale, Funky Businessrosecr

Brand Outside

Strategy 1:Use E-Commerce to

Re-invent Everything!

Tomorrow Today: Cisco!

90% of $20B (=$50M/day)75% mfg. outsourced; 50% of orders routed to supplier who ships direct

Gross margin:65%; Net margin: 28%

Annual savings in service and support from customer

self-management: $550M

Enron eWorld: 30 times a day (“price a structured trade”/early 1999, per John Arnold, 26); late 2000: 30 times per … minute.

Long-term gas contract, 1989: 9 months, 400+ deals; late 90s: 2 weeks, 2 per week; late 2000:

5 such deals per daySource: www.ecompany.com (1-2/2001)

Tomorrow Today: Cisco!

90% of $20B; save $550M

C.Sat e >> C.Sat H

Customer Engineer Chat Rooms/Collaborative

Design ($1B “free” consulting) (45,000 customer problems a week solved via

customer collaboration)

SUMMARY: REINVENT

EVERYTHING

“Where does the Internet rank in priority?

It’s No. 1, 2, 3, and 4.” Jack Welch

“We’ve put the word out to all of our suppliers: by the end of the year [2000] we’ll only do purchasing

over the Internet.”John Paterson, C.P.O., IBM

[$50B from 18,000 suppliers]

WebWorld = Everything

Web as a way to run your business’ innardsWeb as connector for your entire supply-demand chain Web as “spider’s web” which re-conceives the industry

Web/B2B as ultimate wake-up call to “commodity producers”

Web as the scourge of slack, inefficiency, sloth, bureaucracy, poor customer data

Web as an Encompassing Way of LifeWeb = Everything (P.D. to after-sales)

Web forces you to focus on what you do bestWeb as entrée, at any size, to World’s Best at Everything

as next door neighbor

Message: eCommerce is not a technology play! It is a

relationship, partnership, organizational and

communications play, made possible by new

technologies.

Message: There is no such thing as an effective B2B or

Internet-supply chain strategy in a low-trust,

bottlenecked-communication, six-layer

organization.

“Ebusiness is about rebuilding the organization from the ground up. Most companies today are not built to exploit the Internet. Their business

processes, their approvals, their hierarchies, the number of people they employ … all of that is

wrong for running an ebusiness. …“In a true ebusiness, customers can come to

your Website and evaluate products, be connected to the supply chain to get

commitment for delivery and pricing. It also includes all the tangential services like billing

and customer service, which should be automatic and simultaneous.”

Ray Lane, Kleiner Perkins

Brand Outside

Strategy 2:

Design Matters!

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

Design Transforms Even the [Biggest] Corporations!

TARGET … “the champion of America’s new design democracy” (Time) “Marketer of the Year 2000”

(Advertising Age)

Design “is” … WHAT &

WHY I LOVE. LOVE.

Design “is” … WHY I

GET MAD. MAD.

Design is never neutral.

Hypothesis: DESIGN is the principal difference

between love and hate!

THE BASE CASE: I am a design fanatic. Personally, though not “artistic,” I’m a cool-stuff guy. I love what

I love and I hate what I hate. [Openly.] But it goes [much] further, far beyond the personal. Design has

become a professional obsession. I - SIMPLY – BELIEVE THAT DESIGN PER SE IS

THE PRINCIPAL REASON FOR EMOTIONAL ATTACHMENT [or detachment] RELATIVE TO A

PRODUCT OR SERVICE OR EXPERIENCE. Design, as I see it, is arguably the #1 determinant of

whether a product-service-experience stands out … or doesn’t. Furthermore, it’s “one of those things” …

that damn few companies put – consistently – on the front burner.

Brand Outside

Strategy 2A:

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

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

“Car designers need to create a story. Every car provides an

opportunity to create an adventure. …“The Prowler makes you smile. Why? Because it’s focused. It has a plot, a

reason for being, a passion.”

Freeman Thomas, co-designer VW Beetle; designer Audi TT

Hmmmm(?): “Only” Words …

StoryAdventure

Smile Focus

PlotPassion

Plot

Williams Sonoma = 5 [was 10]Crate & Barrel = 8

Sharper Image = 9+Smith & Hawken = 8+

Garnet Hill = 9L.L. Bean = 4 [was 9+]

Colonial Williamsburg = ?

Brand Outside

Strategy 3:

Women Rule!

?????????

Home Furnishings … 94%Vacations … 92%

Houses … 91%Consumer Electronics … 51%

Cars … 60% (90%)All consumer purchases … 83%

Bank Account … 89%Health Care … 80%

$4.8T > Japan

9M/27.5M/$3.6T > Germany

OPPORTUNITY

NO. 1!

Read This Book …

EVEolution: The Eight Truths of Marketing to Women

Faith Popcorn & Lys Marigold

EVEolution: Truth No. 1

Connecting Your Female Consumers to Each

Other Connects Them to Your Brand

“Women don’t buy

brands. They join them.”

Faith Popcorn, EVEolution

STATEMENT OF PHILOSOPHY: I am a businessperson. An analyst. A pragmatist. The enormous social good of increased women’s

power is clear to me; but it is not my bailiwick. My “game” is haranguing business leaders

about my fact-based conviction that women’s increasing power – leadership skills

and purchasing power – is the strongest and most dynamic force at work in the American

economy today. Dare I say it as a long-time Palo Altan … THIS IS EVEN BIGGER THAN THE

INTERNET!

Tom Peters

27 March 2000: email to TP from Shelley Rae Norbeck

“I make 1/3rd more money than my husband does. I have as much financial

‘pull’ in the relationship as he does. I’d say this is also true of most of my women

friends. Someone should wake up, smell the coffee and kiss our asses long enough

to sell us something! We have money to

spend and nobody wants it!”

Speaking of Enormous

[Missed] [Huge] Opportunities ...

Subject: Marketers & Stupidity

It’s 18-44, stupid!

Subject: Marketers & Stupidity

Or is it: 18-44 is stupid, stupid!

2000-2010 Stats

18-44: -1%55+: +21%

(55-64: +47%)

Aging/“Elderly”

$$$$$$$$$$$$“I’m in charge!”

Brand Outside

Strategy 4:

BRAND POWER!

“We are in the twilight of a society based on data. As information and intelligence become the domain of computers, society will place more value on the one human ability that cannot be automated: emotion.

Imagination, myth, ritual - the language of emotion - will affect everything from our purchasing decisions

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

that their products are less important than their stories.”

Rolf Jensen, Copenhagen Institute for Future Studies

“Most executives have no idea how to add value to a market in the metaphysical

world. But that is what the market will cry out for in the future. There is no lack of ‘physical’ products to

choose between.”

Jesper Kunde, A Unique Moment [on the excellence of Nokia, Nike, Lego, Virgin et al.]

“Most companies tend to equate branding with the company’s marketing. Design a new marketing

campaign and, voila, you’re on course. They are wrong. The task is much bigger. It is about fulfilling our potential … not about a new logo, no matter how

clever. WHAT IS MY MISSION IN LIFE? WHAT DO I WANT TO CONVEY TO PEOPLE? HOW DO

I MAKE SURE THAT WHAT I HAVE TO OFFER THE WORLD IS ACTUALLY UNIQUE? The brand has to give of itself, the company has to give of itself, the management has to give of itself. To

put it bluntly, it is a matter of whether – or not – you want to be … UNIQUE … NOW.”

Jesper Kunde, A Unique Moment

“WHO ARE YOU [these days] ?”

TP to Client/11-2000

Part I: Brand InsidePart II: Brand Outside

Part III: Brand Leadership

Brand Leadership

Passion Rules!

Brand Leadership:ENTHUSIASM RULES!

“I am a dispenser of enthusiasm.”/ Ben

Zander

“Reward excellent failures. Punish

mediocre successes.”

Phil Daniels, Sydney exec

Message 2001

Mastering Madness!Best Talent Wins!

eBusEx = Reinvention!Women Rule!

Value Proposition: Who Are We?