Tom Peters Seminar2000: Distinct or … Extinct Colombo 4 December 2000

Tom Peters Seminar2000: Distinct or … Extinct

Colombo4 December 2000

“In 25 years, you’ll probably be able to get the

sum total of all human knowledge on a personal

device.”Greg Blonder, VC [was Chief Technical

Adviser for Corporate Strategy @ AT&T] [Barron’s 13.11.2000]

NOW THAT’S B-I-G!

“The period 2000-2002 will bring the single greatest change in

worldwide economic and business conditions since we came down from the trees.”

David Schneider & Grady Means, MetaCapitalism

“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)

Pentium III 800MHz: $42,893.00/#Hermes Scarf: $1,964.29

Saving Private Ryan on DVD: $874.75Mercedes-Benz: $18.98

Hot-rolled steel: $0.19

Source: Fortune (3.20.00)

“I genuinely believe we are living through the greatest intellectual moment in history.”

Matt Ridley, Genome

“We are in a

brawl with no rules.”

Paul Allaire

The Kotler Doctrine:

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

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

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

“It used to be that the big

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

Venture Partners)

Part I: Brand InsidePart II: Brand Outside

Part III: Brand Leadership

Forces @ Work I

The Destruction Imperative!

Forget>“Learn”

“The problem is never how to get new, innovative

thoughts into your mind,

but how to get the old ones out.”

Dee Hock

“It is generally much easier to kill an

organization than change it

substantially.” Kevin Kelly, Out of Control

“Acquisitions are about buying market share.

Our challenge is to create markets. There is a big difference.”

Peter Job, CEO, Reuters

The [New] Ge Way

DYB.com

The Gales of Creative Destruction

+29M = -44M + 73M

+4M = +4M - 0M

“The secret of fast progress is

inefficiency, fast and furious and numerous

failures.”Kevin Kelly

Brand Inside

Brand Organization: Lean, Linked,

Electronic & Malleable

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

“Middle-level and senior managers are expected to be

the principal targets of the job cutbacks.”

Source: The New York Times (07.29.2000)

White Collar Revolution!

The Pincer 5

“Destructive” entrepreneurs/ Global Competition

“White Collar Robots”

THE INTERNET! [E.g.: GM + Ford + DaimlerChrysler]

Global Outsourcing [E.g.: India, Mexico]

Speed!!

“Assetless Company”

John Bryan, CEO, on selling all Sara Lee’s manufacturing

Cisco, Dell =

Brand-owning companies who sell Customer

Satisfaction

Source: David Schneider & Grady Means, MetaCapitalism [e.g.: Cisco owns 2 of 38

assembly plants]

RR on “Assetless” [J.B.] 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.”

Advance Paradigm

Data on 165,000,000 prescriptions per year; docs and insurers have access to

records

Reduces med errors; saves $2.88 per scrip [prescribing errors]; docs save

$14,000 per year in review time

Rev in ’99: $2B; $477M in ’98Source: Business Week (09.00)

Richard Rosecrance, The Rise of the Virtual State: Wealth and Power in the

Coming Century

Hong Kong: Prototypical “Virtual State”

83% Service8% Mfg.

Source: Richard Rosecrance, The Rise of the Virtual State

“The virtual corporation is research, development, design, marketing, financing, legal, and

other headquarters functions with few or no manufacturing

capabilities – a company with a head but no body.”

Richard Rosecrance, The Rise of the Virtual State

“We own all the intellectual property, we farm out all the

direct labor.”

Jim McDonnell, VP, IBM

The “Futility of Size”

“[Regarding size] the new process of virtualization fully asserts itself.

Virtualization is the recognition that territorial size does not solve

economic problems. … Economic access must become the substitute for

increasing domain.”


TP: Skill at creating, exploiting, and exiting crucial alliances beats

ownership of fixed assets.

“At the ultimate stage, competition among nations will be competition among educational systems, for the most productive and richest countries will be those with the best education and training.”


“Elementary and high school teachers should be

rewarded as patient creators of high-value capital in the

United States and elsewhere.”


“The Main crisis in school today is

irrelevance.”

Daniel Pink, Free Agent Nation

“Our education system is a second-rate, factory-style organization, pumping out

obsolete information in obsolete ways. Schools are simply not

connected to the future of the kids they’re responsible for.”

Alvin Toffler, Business 2.0 (09.00)

Brand Inside

Brand Work: The Professional Service

Firm Model & The WOW Project

So what will be the Basic Building

Block of the New Org?

Answer: PSF![Professional Service Firm]

Department Head

to …

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

The Raw Material …

The WOW Project!

“Reward excellent failures. Punish

mediocre successes.”

Phil Daniels, Sydney exec

“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)

Measures

–WOW!–Beauty!–Raving Fans!–Impact!

Silicon Valley Success [Failure?] Secrets

“Pursuit of risk”: 4 of 20 in V.C. portfolio go bust; 6 lose money;

6 do okay; 3 do well; 1 hits the jackpot

Source: The Economist

Brand Inside

Brand You: Distinct …

or Extinct

“The fundamental unit of the new economy is not the corporation, but the individual. Tasks aren’t assigned and controlled through a stable chain of command but are carried out autonomously by

independent contractors - e-lancers - who join together in fluid and temporary networks to sell goods and services. When the job is done, the network dissolves and its members become independent again, circulating through the economy, seeking the next assignment.”

Thomas Malone and Robert Laubacher

“If there is nothing very special about your work, no matter how hard you apply

yourself, you won’t get noticed, and that

increasingly means you won’t get paid much either.”

Michael Goldhaber, Wired

Minimum New Work SurvivalSkillsKit2000

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

Finishing SkillsEntrepreneurial Instinct

CEO/Leader/BusinesspersonMistress of Improv

Sense of HumorIntense Appetite for Technology

Groveling Before the YoungEmbracing “Marketing”

Passion for Renewal

[“My ancestors were printers in Amsterdam from 1510 or so until 1750 and during that entire time

they didn’t have to learn anything new.”

Peter Drucker, Business 2.0 (08.22.00)]

R.D.A.

Rate: 15%?, 25%?

Therefore: Formal “Investment

Strategy”/R.I.P.

“You must realize that how you invest your human capital matters as much as how you

invest your financial capital. Its rate of return determines your future options. Take a job for what it teaches you, not for what it pays. Instead of a potential employer asking, ‘Where do you see yourself in 5 years?’

you’ll ask, ‘If I invest my mental assets with you for 5 years, how much will they

appreciate? How much will my portfolio of career options grow?’ ”

Stan Davis & Christopher Meyer, futureWEALTH

“The average knowledge worker will outlive the average employing organization. This is the first time in history that’s happened. … So

the center of gravity of higher education is shifting from the education of the young to the

continuing education of adults.”

Peter Drucker, Business 2.0 (08.22.00)

“Knowledge becomes obsolete incredibly fast. The continuing

professional education of adults is the No. 1 industry

in the next 30 years … mostly on line.”

Peter Drucker,Business 2.0 (22August2000)

Invent. Reinvent. Repeat.

Source: HP banner ad

Seminar Y2K/Brand Inside

Message: Distinct … or

Extinct!

Brand Inside

Brand Talent: The Great War for Talent

“When land was the productive resource, nations battled over it. The same is

happening now for talented people.”

Stan Davis & Christopher Meyer, futureWEALTH

“The market’s being divided up right now. We’re in a

tough competition [with the U.S. and the U.K.] for

the best brains.”Gerhard Schroeder, on Germany’s new

tech immigration policy[Frankfurter Allgemeine/06.02.00]

“The ‘War for Talent’ is over … and ‘Talent’ has

won!”Ed Michaels, The War for Talent

“Seller’s Market”: Tomorrow’s Headline*

“Molecular biologists are up 3 points, economists

down 1/4, in moderate trading”

*futureWEALTH, Stan Davis and

Christopher Meyer

From “1, 2 or out” [JW] to … “Best talent in each

industry segment to build best proprietary intangibles” [EM]

Source: Ed Michaels, War for Talent (17.05.00)

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

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

more talented, higher paid managers in charge. He increased

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

Ed Michaels, War for Talent (17.05.00)

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

“Top performing companies are two to four times more likely

than the rest to pay what it takes to prevent losing

top performers.”


“The Rise of the Teen Guru”

“They’re brilliant, ambitious, and almost intuitively gifted at technology. A new generation

of whiz kids are gaining unprecedented power and

authority.”Source: Cover story, Brill’s Content, 7-8/00

“This is the Age of Ageism: The real innovator’s dilemma isn’t ‘disruptive technologies;’ it’s

the relentless rise of the quasi-adolescents who wield them.”

Michael Schrage

“Talented people are less likely to wait their turn. We used to

view young people as trainees; now they are authorities. Arguably

this is the first time the older generation can – and must – leverage the younger generation very early in their careers.”


Gen-X Demands

Love a new challenge. Want responsibility early. Crave freedom, independence and control. Are obsessed with

building their Human Capital. Value more than work. See a very

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

“Where do good new ideas come from? That’s simple! From

differences. Creativity comes from unlikely juxtapositions. The best way to maximize differences is to

mix ages, cultures and disciplines.”

Nicholas Negroponte

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

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

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

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

nourishes the human spirit, spurs economic growth

and empowers nations.”

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

“Capitalism and the conditions for creating wealth have changed in ways that play to the strengths of hybrid

individuals, organizations and nations. And those that wish to profit from changing economic conditions must view hybridity as their first and best option. This bold

claim warrants an explanation. The ability to apply knowledge to new situations is the most valued

currency in today’s economy. Highly creative people … are misfits on some level. They tend to question

accepted views and consider contradictory ones. This appreciation defines the mongrel mentality. Strangers

instinctively question things that natives take for granted. Many things strike them as odd or stupid. …”

G. Pascal Zachary, The Global Me

“Tomorrow belongs to women.”

Helen Fisher, The First Sex: The Natural Talents of Women and How They Are

Changing the World

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

outshine their male counterparts an almost

every measure”Title, Special Report, Business Week, 20.11.00

“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 Natural Talents and the New World of Work

Interactive style of managementProclivity to share information

Need to strive for group consensusDesire to empower workers

Comfort with ambiguitySeek win-win solutions to thorny

problems

Source: Helen Fisher, The First Sex

“TAKE THIS QUICK QUIZ: Who manages more things at once? Who puts more effort into their appearance? Who usually takes care of the details? Who finds it

easier to meet new people? Who asks more questions in a conversation? Who is a better

listener? Who has more interest in communication skills? Who is more inclined to get involved?

Who encourages harmony and agreement? Who has better intuition? Who works with a longer ‘to do’ list? Who enjoys a recap to the day’s events? Who is

better at keeping in touch with others?”

Source: Selling Is a Woman’s Game: 15 Powerful Reasons Why Women Can Outsell Men, Nicki Joy &

Susan Kane-Benson

“Boys are trained in a way that will make

them irrelevant.”

Phil Slater

The Cracked Ones Let in the Light

“Our business needs a massive transfusion of talent, and talent, I believe, is most likely to be found

among non-conformists.”David Ogilvy

“Whoever is the most impertinent

has the best chance.”

W.A. Mozart

The NAESP …

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!

One size NEVER fits all. One size fits one. Period.

“H.R.” to “H.E.D.” ???

Human Enablement Department

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

will provide opportunities to enable the employee to develop

identity and adaptability and

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

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

44 Players = 44 Projects =

44 different success measures

Insights from 80,000 managers:

“People don’t change much.“Don’t waste time trying to put in

what was left out.“Try to draw out what was left in.

“That is hard enough.”

Source: Marcus Buckingham & Curt Coffman, First, Break All the Rules: What the World’s

Greatest Managers Do Differently

Mantra2000

Talent = Brand

“We have transitioned from an asset-based strategy

to a talent-based strategy.”

Jeff Skilling, COO, Enron

The Top 5 “Revelations”

Better talent wins.

Talent management is my job as leader.

Talented leaders are looking for the moon and stars.

Over-deliver on people’s dreams – they are volunteers.

Pump talent in at all levels, from all conceivable sources, all the time.

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

Brand InsideReprise:

THINK WEIRD: The High Standard

Deviation Enterprise

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

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

• Seat 9B, UA233• Address: [email protected]• Typing: 60 WPM• Casual M-F• Approachable• We are a HOT Team • Screwing up is as normal

as breathing• I love Misfits!• I love partners

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

Pioneer [Weird] Acquisitions

Pioneer Customers & Alliance Partners [Measure the Portfolio’s S.D.]

Divide & Conquer/“Sell-by” [Lessons from the Bees, Sir Richard, Gary H.]

Pioneer Assignments/Pioneer Projects [F2F & K2K]

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. [O.O.D.A. Loops/Prototyping Mania]

Sense of Humor [Rhapsodize Over Thine Failures]

Re-enforce a “Culture of Disrespect”/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



Forces @ Work II

The Commodity Trap

Quality Not Enough!

“While everything may be better, it is also increasingly the

same.”Paul Goldberger on retail, “The Sameness

of Things,” The New York Times

“We make over three new product announcements a

day. Can you remember them?

Our customers can’t!”Carly Fiorina

“The ‘surplus society’ has a surplus of

similar companies, employing

similar people, with similar educational backgrounds, working in

similar jobs, coming up with similar

ideas, producing similar things, with

similar prices and similar quality.”

Kjell Nordstrom and Jonas Ridderstrale, Funky Business

Brand Outside

Strategy 1:

Work with Pioneers!

“Our strategies must be tied to leading edge

customers on the attack. If we focus on the defensive

customers, we will also become defensive.”

John Roth, CEO, Nortel

“Future-defining customers may account for only 2% to 3% of your total, but they represent a crucial window on the

future.”Adrian Slywotzky, Mercer Consultants

Brand Outside

Strategy 2:Use E-Commerce to

Re-invent Everything!

OVERVIEW

www.cyveillance.com

30.08.2000/0521GMT:

2,461,940,629

www.cyveillance.com

03.12.2000/1239GMT:

3,152,300,796

95 days, 7 hours, 18 minutes …

+690,360,167

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

COMMUNITY SERVICES!/ CUSTOMER CONTROL!

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)

Anne Busquet/ American Express

Not: “Age of the Internet”

Is: “Age of Customer Control”

SUMMARY: REINVENT

EVERYTHING

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.

A DREAMER’S MEDIUM!

“There is no use trying,” said Alice. “One can’t believe impossible things.”

“I daresay you haven’t had much practice,” said the Queen. “When I was

your age, I always did it for half an hour a day. Why, sometimes I’ve

believed as many as six impossible things before breakfast.”

Lewis Carroll

I’net …

… allows you to dream dreams you could never have imagined before!

Brand Outside

Strategy 3:

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

“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.”Steve Jobs

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 4:

Women Rule!

?????????

Home Furnishings … 94%Vacations … 92%

Houses … 91%Bank Account … 89%

Health Care … 80%Consumer Electronics … 51%

Cars … 50%+/80%Etc.

Women … 50+%(!!!) of Web users; 6 of 10 new users; 83% of wired women are primary decision makers for family

healthcare, finances, education.

Source: Business Week; Jupiter Communications

$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

“Men and women don’t think the same way, don’t communicate the same

way, don’t buy for the same reasons.”

“He simply wants the transaction to take place. She’s interested in creating a relationship. Every place women go,

they make connections.”

EVEolution

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

http://tompeters.com/coolfr_popcorn

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

Brand Outside

Strategy 5:

BRAND POWER!

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]

“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

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

“WHO ARE YOU [these days] ?”

TP to Client

Brand = Special = Passion = Plot =

Compelling Mythology = Cause = Connection = Heart = Integrity &

Trust

Rules of “Radical Marketing”

Love + Respect Your Customers!Hire only Passionate Missionaries!Create a Community of Customers!

Celebrate Craziness!Be insanely True to the Brand!

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



Brand Leadership

Passion Rules!

“Leadership is a performance. You have to be

conscious of your behavior, because everybody else is.”

Carly Fiorina

“A key – perhaps the key – to leadership is the effective

communication of a story.”

Howard Gardner Leading Minds: An Anatomy of Leadership

“Create a Cause, not a ‘business.’ ”

Gary Hamel, Fortune (06.00), on re-inventing a company (Exemplar #1:

Charles Schwab)

“I am a dispenser of enthusiasm.”

Ben Zander

“A leader is a dealer in hope.”

Napoleon

Leadership 2000

Talent-obsessed (Great>>>Good)Opportunity Structure (Fast, Cool,

Accountable, Rewarding) Pursuit of a Cause (Brand-driven)

Content-driven (“PSF”/WOW! Projects)State-of-the-Art (Technology!)

Adventuresome Culture (Disrespect, Short Memory, Sense of Humor)Culture of Hyper-urgency

Enthusiast-in-Chief

Tom Peters SeminarY2K

Message: Distinct … or

Extinct!

Documents

Tom Peters Seminar2000: Distinct or … Extinct Colombo 4 December 2000