Tom Peters Seminar2000 Distinct or … Extinct

Management Conference 2000ENRON

San Antonio16 November 2000

“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)

“There’s going to be a fundamental change in the

global economy unlike anything we have had since the cavemen began bartering.”

Arnold Baker, Chief Economist, Sandia National Laboratories

“We are in a

brawl with no rules.”

Paul Allaire

S.A.V.

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)

“We don’t sell insurance

anymore. We sell speed.”

Peter Lewis, Progressive

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

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

expectations, Leon Cooperman, former cochairman of Goldman

Sachs’ Investment Policy Committee,

answered: I’m sure there are success stories out there, but

at this moment I draw a blank.”Mark Sirower, The Synergy Trap

“Acquisitions are about buying market share.

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

Peter Job, CEO, Reuters

“Our ideal acquisition is a small startup that has a great technology product on the drawing board that is going to come out in six to twelve months.

We buy the engineers and the next generation product. …”

John Chambers, Cisco

Lessons from the Bees!

Since merger mania is now the rage, what lessons can the bees teach us? A simple one: Merging is not in

nature. [Nature’s] process is the exact opposite: one of growth, fragmentation and dispersal. There is no

megalomania, no merging for merging’s sake. The point is that unlike corporations, which just get bigger, bee colonies know when the time has come to split up into

smaller colonies which can grow value faster. What the bees are telling us is that the corporate

world has got it all wrong.”David Lascelles, Co-director of The Centre for the

Study of Financial Innovation [UK]

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 11.14.2000

Brand Inside

Brand Org: Lean, Linked,

Electronic & Malleable

And Now the Equivalent …

White Collar Revolution!

“Assetless Company”

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

“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

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

F.G.]

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.

Dept. Head I = Sports G.M.

Dept. Head II = V.C.

G.M. = The Recruitment and Development of Top Talent.

[Period!]

V.C. = Bets on “Talent.” Bets on Projects. [Period!]

The Raw Material …

The WOW Project!

“Reward excellent failures. Punish

mediocre successes.”

Phil Daniels, Sydney exec

Brand Inside

Brand Talent: The Great War for Talent

“When land was the scarce resource, nations battled

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

Stan Davis & Christopher Meyer, futureWEALTH

“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 3” [JW] to … “Best talent in each

industry segment to build best proprietary intangibles” [EM]

Source: Ed Michaels, War for Talent (05.17.00)

“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

“Davids vs. Corporate Goliaths: Could the

Record and Film Industries Be Brought Down by Teenagers?”Headline: The New York Times (08.06.00)

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, dissenters and rebels.”

David Ogilvy

“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

Mantra2000

Talent = Brand

Brand Inside

Brand Action:Getting Started … a

Personal Perspective

Topic: Boss-free

Implementation of STM /Stuff That

MATTERS!

I. THE IDEA

“4Fs”: Find a

Fellow Freak

Faraway

Heart of the Matter

F2F!*

*Freak to Freak … or K2K [Kook to Kook]

II. THE TOOL

Prototyping Mania!

Culture of Prototyping

“Effective prototyping may be

the most valuable core competence an innovative organization can

hope to have.”

Michael Schrage

“You can’t be a serious innovator unless and until you are ready,

willing and able to seriously play. ‘Serious play’ is not an oxymoron;

it is the essence of innovation.”

Michael Schrage, Serious Play

He who has the quickest O.O.D.A.

Loops* wins!*Observe. Orient. Decide. Act. /

Col. John Boyd

“Success is the ability to go from failure to

failure without losing your enthusiasm.”

Winston Churchill (as quoted by John Peterman)

N.W.O.: 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: Rick@Corp.com• 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 “High S.D.” Org/IndividualPioneer Acquisitions [+ “Sell-by”]

Pioneer Customers & Alliance Partners [Measure the Portfolio]

Divide & Conquer [Lessons from the Bees]Pioneer Assignments/Pioneer Projects [F2F & K2K]

Hire Weird [Diversity]/Train Weird/ Promote Weird/Acquire & Cherish & Pay & Promote “Six

Sigma” Talent Fast/Appoint Weird BoardWeed Un-weird [“One Sigma” “Talent”]

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 [Cherish Thine Failures]

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 Business

Brand Outside

Strategy 1:

Lead the Customer!

“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

Brand Outside

Strategy 2:Use E-Commerce to

Re-invent 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.

Brand Outside

Strategy 3: Fighting Back via

Systems Integration!

Message B2B:

“BOX” SELLERS LOSE!

Message: Racing up the V.A. Ladder. Doing More & More … & More & More & More … for/with the Customer and the Supply-Demand Chain!

09.11.2000: HP bids $18,000,000,000

for PricewaterhouseCoopers

Consulting bus! (31,000 bods)

“These days, building the best server isn’t enough. That’s the

price of entry.”

Ann Livermore, Hewlett Packard

Problem:

Everybody is going after the same space!

Buzzsaw.com

Builders, Owners, Architects, Contractors, Suppliers

$4T industry

5,300 commercial bldg. projects’ specs on-line; +70 per day

Brand Outside

Strategy 4:

Design Matters!

Design =

SIMPLICITY … HONESTY … ACCESSIBILITY …

ENJOYMENTJonathan Ive (iMac)

Design =

“There are three basic principles behind any well-

designed product: truth, humanity, and

simplicity.”Sohrab Vossoughi,

Ziba Design

Design + Beauty is Fred S.’s “mediocre” thesis and Herb K.’s

napkin.

Great design = One-page

business plan (Jim Horan)

Design Rules! [Literally]

Palm Beach County’s U.C.B.* [*Utterly Confusing Ballot]

Brand Outside

Strategy 5:

It’s the Experience!

“Experiences are as distinct from services as services are from

goods.”Joseph Pine & James Gilmore, The

Experience Economy: Work Is Theatre & Every Business a Stage

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

The “Experience Ladder”

Extraction/Raw MaterialsGoods

ServicesExperiences

To 1940: Cake from flour, sugar (extraction economy): $1.00

1955: Cake from Cake mix (goods economy): $2.00

1970: Bakery-made cake (service economy): $10.00

1985+: Party @ Chuck E. Cheese (experience economy) $100.00

Brand Outside

Strategy 6:

BRAND POWER!

Brand = Trust!

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

The Economist

“WHO ARE YOU [these days] ?”

TP to Client

Part I: Brand InsidePart II: Brand Outside

Part III: Brand Leadership

Brand Leadership

Passion Rules!

Brand Leadership!

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

communication of a story.”

Howard Gardner Leading Minds: An Anatomy of Leadership

Brand Leadership:ENTHUSIASM RULES!

“I am a dispenser of enthusiasm.”/ Ben

Zander