Tom Peters Seminar2002 We Are in a Brawl with No Rules Mumbai/31October2002 Slides at … tompeters.com “We are in a brawl with no rules.” Paul Allaire “There will be more confusion in the business world in the next decade than in any decade in history. And the current pace of change will only accelerate.” Steve Case “If you don’t like change, you’re going to like irrelevance even less.” —General Eric Shinseki, Chief of Staff, U. S. Army I. NEW BUSINESS. NEW CONTEXT. 1.All Bets Are Off. “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) <1000A.D.: paradigm shift: 1000s of years 1000: 100 years for paradigm shift 1800s: > prior 900 years 1900s: 1st 20 years > 1800s 2000: 10 years for paradigm shift 21st century: 1000X tech change than 20th century (“the ‘Singularity,’ a merger between humans and computers that is so rapid and profound it represents a rupture in the fabric of human history”) Ray Kurzweil 2. The Destruction Imperative. Forbes100 from 1917 to 1987: 39 members of the Class of ’17 were alive in ’87; 18 in ’87 F100; 18 F100 “survivors” underperformed the market by 20%; just 2 (2%), GE & Kodak, outperformed the market 1917 to 1987. S&P 500 from 1957 to 1997: 74 members of the Class of ’57 were alive in ’97; 12 (2.4%) of 500 outperformed the market from 1957 to 1997. Source: Dick Foster & Sarah Kaplan, Creative Destruction: Why Companies That Are Built to Last Underperform the Market “Good management was the most powerful reason [leading firms] failed to stay atop their industries. Precisely because these firms listened to their customers, invested aggressively in technologies that would provide their customers more and better products of the sort they wanted, and because they carefully studied market trends and systematically allocated investment capital to innovations that promised the best returns, they lost their positions of leadership.” Clayton Christensen, The Innovator’s Dilemma 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 “Acquisitions are about buying market share. Our challenge is to create markets. There is a big difference.” Peter Job, CEO, Reuters “When asked to name just one big merger that had lived up to expectations, Leon Cooperman, former cochairman of Goldman Sachs’ Investment Policy I’m sure there are success stories out there, but at this moment I draw a blank.” Committee, answered: Mark Sirower, The Synergy Trap “Conglomerates don’t work” —James Surowiecki, The New Yorker (07.01,2002) (T.P.: Think $2,000,000,000,000) 7 Truths about Acquisitions: TP’s 30 Years of Observation 1. Big + Big = Disaster. (Statistically.) (There are exceptions; e.g., Citigroup.) 2. Big (GE, Cisco, Omnicon) acquires small/specialist = Good … if you can retain Top Talent. 3. Odds on achieving “projected synergies” among Mixed Big “cultures”: 10%. (Among Big + Specialist: 35%.) 4. Max Scale Advantages are achieved at a smaller size than imagined. (When New Big beats slightly less big, effectiveness, not bulk, is the reason.) 5. Attacked by Big, Mediocre Medium marries Mediocre Medium to “bulk up.” Result: Big Mediocrity … or worse. 6. Any size—if Great & Focused—can win, locally or globally. 7. Increasingly, Alliances deliver more value than mergers —and clearly abet flexibility. “It is generally much easier to kill an organization than change it substantially.” Kevin Kelly, Out of Control Leaders “dump the ones who brung ’em” —Nokia, HP, 3M, PerkinElmer, Corning, etc. C.E.O. to C.D.O. CEOs appointed after 1985 are 3X more likely to be fired than CEOs appointed before 1985 Warren Bennis, MIT Sloan Management Review The [New] Ge Way DYB.com “Organize” for … performance & customer satisfaction. “Disorganize” for … renewal & innovation. “Active mutators in placid times tend to die off. They are selected against. Reluctant mutators in quickly changing times are also selected against.” Carl Sagan & Ann Druyan, Shadows of Forgotten Ancestors 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 Silicon Valley of today is built less atop the spires of earlier triumphs than upon the rubble of earlier debacles.”—Newsweek/ Paul Saffo (03.02) “The difficulties … arise from the inherent conflict between the need to control existing operations and the need to create the kind of environment that will permit new ideas to flourish—and old ones to die a timely death. … We believe that most corporations will find it impossible to match or outperform the market without abandoning the assumption of continuity. The current apocalypse—the transition from a state of continuity to state of discontinuity—has the same suddenness [as the trauma that beset civilization in 1000 A.D.]” Richard Foster & Sarah Kaplan, “Creative Destruction” (The McKinsey Quarterly) Built to Last v. Built to Flip “The problem with Built to Last is that it’s a romantic notion. Large companies are incapable of ongoing innovation, of ongoing flexibility.” “Increasingly, successful businesses will be ephemeral. They will be built to yield something of value – and once that value has been exhausted, they will vanish.” Fast Company (03-00) No Wiggle Room! “Incrementalism is innovation’s worst enemy.” Nicholas Negroponte The High Standard Deviation Enterprise. THINK WEIRD: Saviors-in-Waiting Disgruntled Customers Off-the-Scope Competitors Rogue Employees Fringe Suppliers Wayne Burkan, Wide Angle Vision: Beat the Competition by Focusing on Fringe Competitors, Lost Customers, and Rogue Employees CUSTOMERS: “Futuredefining customers may account for only 2% to 3% of your total, but they represent a crucial window on the future.” Adrian Slywotzky, Mercer Consultants W.I.W? 20 of 26 7 of top 10* *P&G: Declining domestic sales in 20 of 26 categories; 7 of top 10 (The “billiondollar” problem.) categories. Source: Advertising Age 01.21.2002/BofA Securities Primary Obstacles to “Marketing-driven Change” 1. Fear of “cannibalism.” 2. “Excessive cult of the consumer”/ “customer driven”/ “slavery to demographics, market research and focus groups.” 3.Creating “sustainable advantage.” Source: John-Marie Dru, Disruption Account planning has become “focus group balloting.” —Lee Clow “Chivalry is dead. The new code of conduct is an active strategy of disrupting the status quo to create an unsustainable series of competitive advantages. This is not an age of defensive castles, moats and armor. It is rather an age of cunning, speed and surprise. It may be hard for some to hang up the chain mail of ‘sustainable advantage’ after so many battles. But hypercompetition, a state in which sustainable advantages are no longer possible, is now the only level of competition.” Rich D’Aveni, Hypercompetition: Managing the Dynamics of Strategic Maneuvering “BIG DRUG MAKERS TRY TO POSTPONE CUSTOM REGIMENS. Most drugs don’t work well for about half the patients for whom they are prescribed, and experts believe genetic differences are part of the reason. The technology for genetic testing is now in use. But the technique threatens to be so disruptive to the business of big drug companies – it could limit the market for some of their blockbuster products – that many of them are resisting its widespread use.” The Wall Street Journal (06.18.2001) “Generally, disruptive technologies underperform established products in mainstream markets. But they have other features that a few fringe (and generally new) customers value.” Clayton Christensen, The Innovator’s Dilemma COMPETITORS: “The best swordsman in the world doesn’t need to fear the second best swordsman in the world; no, the person for him to be afraid of is some ignorant antagonist who has never had a sword in his hand before; he doesn’t do the thing he ought to do, and so the expert isn’t prepared for him; he does the thing he ought not to do and often it catches the expert out and ends him on the spot.” Mark Twain Employees: “Are there enough weird people in the lab these days?” V. Chmn., pharmaceutical house, to a lab director (06.01) “Deviance tells the story of every mass market ever created. What Deviants, Inc. starts out weird and dangerous becomes America’s next big corporate payday. So are you looking for the next mass market idea? It’s out there … way out there.” Source: Ryan Matthews & Watts Wacker, Fast Company (03.02) Innovation Source No. 1*: PPPs/Personally Pissed-off People “Branson started Virgin Atlantic because flying other airlines was so dreadful.” —Fortune/05.13.2002 *And there is no No. 2! Suppliers: “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 “As Francois Dalle, the chairman of L’Oreal, puts it, the planner must … catch what is barely beginning.” Source: Jean-Marie Dru, Disruption 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 II. NEW BUSINESS. NEW TECH. 3. The White Collar Revolution & the Death of Bureaucracy. 108 X 5 vs. 8X1 = 540 vs. 8 (-98.5%) E.g. … Jeff Immelt: 75% of “admin, back room, finance” “digitalized” in years. Source: BW (01.28.02) IBM’s Project eLiza!* * “Self-bootstrapping”/ “Artilects” “Unless mankind redesigns itself by changing our DNA through altering our genetic makeup, computergenerated robots will take over the world.” – Stephen Hawking, in the German magazine Focus 4. IS/ IT/ Web … “On the Bus” or “Off the Bus.” “The organizations we created have become tyrants. They have taken control, holding us fettered, creating barriers that hinder rather than help our businesses. The lines that we drew on our neat organizational diagrams have turned into walls that no one can scale or penetrate or even peer over.” —Frank Lekanne Deprez & René Tissen, Zero Space: Moving Beyond Organizational Limits. “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.” Ray Lane, Kleiner Perkins square feet Impact No. 1/ Logistics & Wal*Mart … Dell … Amazon.com … Autobytel.com … FedEx … UPS … Ryder … Cisco … Etc. … Etc. … Ad Infinitum. Distribution: $400. Wal*Mart: 13%. Autobytel: Source: BW(05.13.2002) WebWorld = Everything Web as a way to run your business’s innards Web 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 Life Web = Everything (P.D. to after-sales) Web forces you to focus on what you do best Web as entrée, at any size, to World’s Best at Everything as next door neighbor “Dawn Meyerreicks, CTO of the Defense Intelligence Systems Agency, made one of the most fateful military calls of the 21st century. After 9/11 … her office quickly leased all the available transponders covering Central Asia. The implications should change everything about U.S. military thinking in the years ahead. “The U.S. Air Force had kicked off its fight against the Taliban with an ineffective bombing campaign, and Washington was anguishing over whether to send in a few Army divisions. Donald Rumsfeld told Gen. Tommy Franks to give the initiative to 250 Special Forces already on the ground. They used satellite phones, Predator surveillance drones, and GPS- and laser-based targeting systems to make the air strikes brutally effective. “In effect, they ‘Napsterized’ the battlefield by cutting out the middlemen (much of the military’s command and control) and working directly with the real players. … The data came in so fast that HQ revised operating procedures to allow intelligence analysts and attack planners to work directly together. Their favorite tool, incidentally, was instant messaging over a secure network.”—Ned Desmond/“Broadband’s New Killer App”/Business 2.0/ OCT2002 Case: CRM Anne Busquet/ American Express Not: “Age of the Internet” “Age of Customer Control” Is: “The Web enables total transparency. People with access to relevant information are beginning to challenge any type of authority. The stupid, loyal and humble customer, employee, patient or citizen is dead.” Kjell Nordström and Jonas Ridderstråle, Funky Business Welcome to D.I.Y. Nation: “Changes in business processes will emphasize self service. Your costs as a business go down and perceived service goes up because customers are conducting it themselves.” Ray Lane, Oracle Amen! “The Age of the Never Satisfied Customer” Regis McKenna “CRM has, almost universally, failed to live up to expectations.” Butler Group (UK) CGE&Y (Paul Cole): “Pleasant “Systemic Opportunity.” “Better job of what we do today” vs. “Rethink overall enterprise strategy.” Transaction” vs. “There’s 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 dreamed before! … “Don’t rebuild. Reimagine.” The New York Times Magazine on the future of the WTC space in Lower Manhattan/09.08.2002 “Suppose—just suppose—that the Web is a new world we’re just beginning to inhabit. We’re like the earlier European settlers in the United States, living on the edge of the forest. We don’t know what’s there and we don’t know exactly what we need to do to find out: Do we pack mountain climbing gear, desert wear, canoes, or all three? Of course while the settlers may not have known what the geography of the New World was going to be, they at least knew that there was a geography. The Web, on the other hand, has no geography, no landscape. It has no distance. It has nothing natural in it. It has few rules of behavior and fewer lines of authority. Common sense doesn’t hold here, and uncommon sense hasn’t yet emerged.” David Weinberger, Small Pieces Loosely Joined III. NEW BUSINESS. NEW VALUE PROPOSITION. 5. The “PSF Solution”: The Professional Service Firm Model. So what will be the Basic Building Block of the New Org? Every job done in W.C.W. is also done “outside” …for profit! Answer: PSF! [Professional Service Firm] Department Head to … Managing Partner, HR [IS, etc.] Inc. eHR*/PCC** *All HR on the Web **Productivity Consulting Center Source: E-HR: A Walk through a 21st Century HR Department, John Sullivan, IHRIM Model PSF … (1) Translate ALL departmental activities into discrete W.W.P.F. “Products.” (2) 100% go on the Web. (3) Non-awesome are outsourced (75%??). (4) Remaining “Centers of Excellence” are retained & leveraged to the hilt! “Typically in a mortgage company or financial services company, ‘risk management’ is an overhead, not a revenue center. We’ve become more than that. We pay for ourselves, and we actually make money for the company.” —Frank Eichorn, Director of Credit Risk Data Management Group, Wells Fargo Home Mortgage (Source: sas.com) 6. The Heart of the Value Added Revolution: PSFs Unbound/ The “Solutions Imperative.” Base Case: The Sameness Trap “While everything may it is also increasingly the same.” be better, 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 “Customers will try ‘low cost providers’ … because the Majors have not given them any clear reason not to.” Leading Insurance Industry Analyst “The ‘surplus society’ has a surplus of similar companies, employing similar people, with similar educational backgrounds, coming up with similar ideas, producing similar things, with similar prices and similar quality.” Kjell Nordström and Jonas Ridderstråle, Funky Business The Day! 09.11.2000: HP bids $18,000,000,000 for PricewaterhouseCoopers consulting business! “These days, building the best server isn’t enough. That’s the price of entry.” Ann Livermore, Hewlett-Packard Systems Integrator of choice. Global Services: Gerstner’s IBM: $35B. Pledge/’99: Business Partner Charter. 72 strategic partners, aim for 200. Drop many in-house programs/products. (BW/12.01). “We want to be the air traffic controllers of electrons.” Bob Nardelli, GE Power Systems “Customer Satisfaction” to “Customer Success” “We’re getting better at [Six Sigma] every day. But we really need to think about the customer’s profitability. Are customers’ bottom lines really benefiting from what we provide them?” Bob Nardelli, GE Power Systems Keep In Mind: Customer Satisfaction versus Customer Success Omnicom: 57% (of $6B) from marketing services “Customers will try ‘low cost providers’ … because the Majors have not given them any clear reason not to.” Leading Insurance Industry Analyst Getting Beyond Lip Service! “No longer are we only an insurance provider. Today, we also offer our customers the products and services that help them achieve their dreams, whether it’s financial security, buying a car, paying for home repairs, or even taking a dream vacation.”—Martin Feinstein, CEO, Farmers Group (1) 108X5 to 8X1/ eLiza/ 100sf. (2) Dept. to PSF/ WWPF. (3) V.A. via PSFs Unbound/ “Solutions”/ “Customer Success.” Core Logic: IV. NEW BUSINESS. NEW BRAND. 7. A World of Scintillating/ Awesome/ WOW “Experiences.” “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 “Club Med is more than just a ‘resort’; it’s a means of rediscovering oneself, of inventing an entirely new ‘me.’ ” Source: Jean-Marie Dru, Disruption 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 “I see us as being in the art business. Art, entertainment and mobile sculpture, which, coincidentally, also happens to provide transportation.” Bob Lutz: Source: NYT 10.19.01 “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 … Story Adventure Smile Focus Plot Passion 8. Experiences+: Embracing the “Dream Business.” DREAM: “A dream is a complete moment in the life of a client. Important experiences that tempt the client to commit substantial resources. The essence of the desires of the consumer. The opportunity to help clients become what they want to be.” —Gian Luigi Longinotti-Buitoni Common Products “Dream” Products Maxwell House BVD Payless Hyundai Suzuki Atlantic City New Jersey Carter Conners CNN Starbucks Victoria’s Secret Ferragamo Ferrari Harley Davidson Acapulco California Kennedy Pele Millionaire Source: Gian Luigi Longinotti-Buitoni Emotional Design that Interprets Dreams “Zero defects”: Only the starting point. Love at first sight. Design for the five senses. Develop to expand the Main Dream. Design so as to seduce through the peripheral senses. Source: Gian Luigi Longinotti-Buitoni The marketing of Dreams (Dreamketing) Dreamketing: Touching the clients’ dreams. Dreamketing: The art of telling stories and entertaining. Dreamketing: Promote the dream, not the product. Dreamketing: Build the brand around the main dream. Dreamketing: Build the “buzz,” the “hype,” the “cult.” Source: Gian Luigi Longinotti-Buitoni Building the Creative Organization Choose a creator: The cultural leader who gives the company an aesthetic point of view. Hire eclectically: Hire collaborators with different cultures and past histories in order to balance rigor with emotion. Prepare vertically: Develop a rigorous understanding of the product and the client. Develop horizontally: Promote curiosity in unrelated disciplines. Lead emotionally: Engender passionate dedication through vision and freedom. Build for the long haul: Creativity requires a lifetime commitment. Source: Gian Luigi Longinotti-Buitoni Constantly Magnify Perceived Value Maximize your value-added by fulfilling the dreams of your clients. Only invest in what is valuable for your client. Don’t let the short-term results weaken the long-term value of your brand. Balance rigorous control of the financial endeavor with the emotional management of your brand. Build a financial structure that allows risk-taking: NO RISKS—NO DREAMS. Establish long-term “price power” in order to avoid the trap of the commodity product. Source: Gian Luigi Longinotti-Buitoni 9. The “Soul” of “Experiences”: [Mostly Ignored] Design Rules! Design’s place in the universe. All Equal Except … “At Sony we assume that all products of our competitors have basically the same technology, price, performance and Design is the only thing that differentiates one product from another in the marketplace.” features. Norio Ohga “Design is treated like a religion at BMW.” Fortune “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 Design is the fundamental soul meaning of design. of a man-made creation.” Steve Jobs Bottom Line. Design “is” … WHAT & WHY I LOVE. LOVE. Design “is” … WHY I GET MAD. MAD. Design is never neutral. DESIGN is the principal difference between love and hate! Hypothesis: THE BASE CASE: I am a design fanatic. Though not “artistic,” I love “cool stuff.” 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 productservice-experience stands out … or doesn’t. Furthermore, it’s “one of those things” that damn few companies put – consistently – on the front burner. Message (?????): Men cannot design for women’s needs. “Perhaps the macho look can be interesting … if you want to fight dinosaurs. But now to survive you need intelligence, not power and aggression. Modern intelligence means intuition—it’s female.” Source: Philippe Starck, Harvard Design Magazine (Summer 1998) 10. Women Roar. ????????? Home Furnishings … 94% Vacations … 92% (Adventure Travel … 70%/ $55B travel equipment) Houses … 91% D.I.Y. (“home projects”) … 80% 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 91% women: ADVERTISERS DON’T UNDERSTAND US. (58% “ANNOYED.”) Source: Greenfield Online for Arnold’s Women’s Insight Team (Martha Barletta, Marketing to Women) Carol Gilligan/ In a Different Voice Men: Get away from authority, family Women: Connect Men: Self-oriented Women: Other-oriented Men: Rights Women: Responsibilities FemaleThink/ Popcorn “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.” Read This: Barbara & Allan Pease’s Why Men Don’t Listen & Women Can’t Read Maps “It is obvious to a woman when another woman is upset, while a man generally has to physically witness tears or a temper tantrum or be slapped in the face before he even has a clue that anything is going on. Like most female mammals, women are equipped with far more finely tuned sensory skills than men.” Barbara & Allan Pease, Why Men Don’t Listen & Women Can’t Read Maps “Resting” State: 30%, 90%: “A woman knows her children’s friends, hopes, dreams, romances, secret fears, what they are thinking, how they are feeling. Men are vaguely aware of some short people also living in the house.” Barbara & Allan Pease, Why Men Don’t Listen & Women Can’t Read Maps “As a hunter, a man needed vision that would allow him to zero in on targets in the distance … whereas a woman needed eyes to allow a wide arc of vision so that she could monitor any predators sneaking up on the nest. This is why modern men can find their way effortlessly to a distant pub, but can never find things in fridges, cupboards or drawers.” Barbara & Allan Pease, Why Men Don’t Listen & Women Can’t Read Maps “Female hearing advantage contributes significantly to what is called ‘women’s intuition’ and is one of the reasons why a woman can read between the lines of what people say. Men, however, shouldn’t despair. They are excellent at imitating animal sounds.” Barbara & Allan Pease, Why Men Don’t Listen & Women Can’t Read Maps Senses Vision: Men, focused; Women, peripheral. Hearing: Women’s discomfort level I/2 men’s. Smell: Women >> Men. Touch: Most sensitive man < Least sensitive women. Source: Martha Barletta, Marketing to Women Emotional Design that Interprets Dreams “Zero defects”: Only the starting point. Love at first sight. Design for the five senses. Develop to expand the Main Dream. Design so as to seduce through the peripheral senses. Source: Gian Luigi Longinotti-Buitoni 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 “The ‘Connection Proclivity’ in women starts early. When asked, ‘How was school today?’ a girl usually tells her mother every detail of what happened, while a boy might grunt, ‘Fine.’ ” EVEolution What If … “What if ExxonMobil or Shell dipped into their credit card database to help commuting women interview and make a choice of car pool partners?” “What if American Express made a concerted effort to connect up female empty-nesters through on-line and off-line programs, geared to help women re-enter the workforce with today’s skills?” EVEolution “Mattel Sees Untapped Market for Blocks: Little Girls”—Headline, WSJ/04.06.02 “Last year more than 90% of Lego sets purchased were for boys. Mattel says Ello—with interconnecting plastic squares, balls, triangles, squiggles, flowers and sticks, in pastel colors and with rounded corners—will go beyond Lego’s linear play patterns.” “Women don’t buy They join them.” brands. EVEolution Not ! “Year of the Woman” Enterprise Reinvention! Recruiting Hiring/Rewarding/Promoting Structure Processes Measurement Strategy Culture Vision Leadership THE BRAND ITSELF! 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 Alto resident … THIS IS EVEN BIGGER THAN THE INTERNET! Tom Peters Ad from Furniture /Today (04.01): “MEET WITH THE EXPERTS!: How Retailing’s Most Successful Stay that Way” Presenting Experts: M = F= ?? 16; (94% = 272) “Please … just one couch or chair where my feet hit the ground!” —Owner, 5 furniture stores, UK : “Amazing, now that I think about it. A bunch of guys --developers, architects, contractors, engineers, bankers--sitting around designing shopping centers. And the ‘end users’ will be overwhelmingly women!” Stupid! Notes to the CEO --Women are not a “niche”; so get this out of the “Specialty Markets” group. --The competition is starting to catch on. (E.g.: Nike, Nokia, Wachovia, Ford, Harley-Davidson, Jiffy Lube, Charles Schwab, Citigroup, Aetna.) --If you “dip your toes in the water,” what makes you think you’ll get splashy results? --Bust through the walls of the corporate silos. --Once you get her, don’t let her slip away. --Women ARE the long run! Source: Martha Barletta, Marketing to Women 11. “It” all adds up to … THE BRAND. Logic: 108X5 vs. 8X1/ “Cost Center” to W.W.P.F. “PSF”/ PSF Unbound/ “Satisfaction” to “Solutions” & “Success”/ “Sameness” to Experiences + Dreams + Design + Women’s Market/ = Brand The Heart of Branding … “WHO ARE WE?” “Most companies tend to equate branding with the company’s marketing. Design a new marketing campaign and, voilà, 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, Unique Now … or Never “WHAT’S OUR STORY?” “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 Companies will thrive on the basis of their stories and myths. Companies will need to understand to how we work with others. that their products are less important than their stories.” Rolf Jensen, Copenhagen Institute for Future Studies “Apple opposes, IBM solves, Nike exhorts, Virgin enlightens, Sony dreams, Benetton protests. … Brands are not nouns but verbs.” Source: Jean-Marie Dru, Disruption “EXACTLY HOW ARE WE DRAMATICALLY DIFFERENT?” 1st Law Mktg Physics: OVERT BENEFIT (Focus: 1 or 2 > 3 or 4/“One Great Thing.” Source #1: Personal Passion) 2ND Law: REAL REASON TO BELIEVE (Stand & Deliver!) RD 3 Law: DRAMATIC DIFFERENCE Source: Jump Start Your Business Brain, Doug Hall “They [consumer goods company] have acquired a bunch of products, which is what everyone is doing. But what’s the point, the message, the story line, the … Big Idea … that makes ‘it’ all hang together?” —Exec, major consumer goods company “WHY DOES IT MATTER TO THE CLIENT?” “EXACTLY HOW DO I PASSIONATELY CONVEY THAT DRAMATIC DIFFERENCE TO THE CLIENT ?” VI. NEW BUSINESS. NEW YOU. 12. Re-inventing the Individual: Brand You/ You Inc./ Free Agent Nation (Or Else.) “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 13. Toward Work that Matters: The WOW Project. “Let’s make a dent in the universe.” Steve Jobs The greatest danger for most of us is not that our aim is too high and we miss it, but that it is too low and we reach it. Michelangelo Characteristics of the “Also rans”* “Minimize risk” “Respect the chain of command” “Support the boss” “Make budget” *Fortune, article on “Most Admired Global Corporations” 14. Boss Job One: The Talent Obsession. “The leaders of Great Groups love talent and know where to find it. They revel in the talent of others.” Warren Bennis & Patricia Ward Biederman, Organizing Genius Model 25/8/53 Sports Franchise GM From “1, 2 or you’re out” [JW] to … “Best Talent in each industry segment to build best proprietary intangibles” [EM] Source: Ed Michaels, War for Talent “We believe companies can increase their market cap 50 percent in 3 years. Steve changed 20 of his 40 box plant managers to put more talented, higher paid managers in charge. He increased Macadam at Georgia-Pacific profitability from $25 million to $80 million in 2 years.” Ed Michaels, War for Talent Message: Some people are better than other people. Some people are a helluva lot better than other people. “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 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 “Why focus on these late teens and twentysomethings? Because they are the first young who are both in a position to change the world, and are actually doing so. … For the first time in history, children are more comfortable, knowledgeable and literate than their parents about an innovation central to society. … The Internet has triggered the first industrial revolution in history to be led by the young.” The Economist [12/2000] “AS LEADERS, WOMEN RULE: New Studies find that female managers outshine their male counterparts in almost every measure” Title, Special Report, Business Week, 11.20.00 Women’s Strengths Match New Economy Imperatives: Link [rather than rank] workers; favor interactive-collaborative leadership style [empowerment beats top-down decision making]; sustain fruitful collaborations; comfortable with sharing information; see redistribution of power as victory, not surrender; favor multi-dimensional feedback; value technical & interpersonal skills, individual & group contributions equally; readily accept ambiguity; honor intuition as well as pure “rationality”; inherently flexible; appreciate cultural diversity. Source: Judy B. Rosener, America’s Competitive Secret Opportunity! U.S. M.Mgt. 41% T.Mgt. 4% Peak Partic. Age 45 % Coll. Stud. 52% G.B. E.U. Ja. 29% 18% 6% 3% 2% <1% 22 27 19 50% 48% 26% Source: Judy Rosener, America’s Competitive Secret MantraM3 Talent = Brand What’s your company’s … Employee Value Proposition, per Ed Michaels et al., The War for Talent EVP = Challenge, professional growth, respect, satisfaction, opportunity, reward Source: Ed Michaels et al., The War for Talent 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 IX. NEW BUSINESS. NEW LEADERSHIP. 15. The Passion Imperative: Leadership The The Basic Premise. 1. Leadership Is a … Mutual Discovery Process. Leaders-Teachers Do Not “Transform People”! Instead leaders-mentors-teachers (1) provide a context which is marked by (2) access to a luxuriant portfolio of meaningful opportunities (projects) which (3) allow people to fully (and safely, mostly—caveat: “they” don’t engage unless they’re “mad about something”) express their innate curiosity and (4) engage in a vigorous discovery voyage (alone and in small teams, assisted by an extensive self-constructed network) by which those people (5) go to-create places they (and their mentors-teachersleaders) had never dreamed existed—and then the leaders-mentors-teachers (6) applaud like hell, stage “photo-ops,” and ring the church bells 100 times to commemorate the bravery of their “followers’ ” explorations! “Ninety percent of what we call ‘management’ consists of making it difficult for people to get things done.” – P.D. “I don’t know.” The Leadership Types. 2. Great Leaders on Snorting Steeds Are Important – but Great Talent Developers (Type I Leadership) are the Bedrock of Organizations that Perform Over the Long Haul. 25/8/53 3. But Then Again, There Are Times When This “Cult of Personality” (Type II Leadership) Stuff Actually Works! “A leader is a dealer in hope.” Napoleon (+TP’s writing room pics) 4. Find the “Businesspeople”! (Type III Leadership) I.P.M. (Inspired Profit Mechanic) 5. All Organizations Need the Golden Leadership Triangle. The Golden Leadership Triangle: (1) CreatorVisionary … (2) Talent Fanatic-Mentor-V.C. … (3) Inspired Profit Mechanic. 6. Leadership Mantra #1: IT ALL DEPENDS! Renaissance Men are … a snare, a myth, a delusion! 7. The Leader Is Rarely/Never the Best Performer. The Leadership Dance. 8. Leaders … SHOW UP! 9. Leaders … LOVE the MESS! “If things seem under control, you’re just not going fast enough.” Mario Andretti 10. Leaders 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!) “Strategy meetings held once or twice a year” to “Strategy meetings needed several times a week” Source: New York Times on Meg Whitman/eBay 11. Leaders Re -do. “If Microsoft is good at anything, it’s avoiding the trap of worrying about criticism. Microsoft fails constantly. They’re eviscerated in public for lousy products. Yet they persist, through version after version, until they get something good enough. Then they leverage the power they’ve gained in other markets to enforce their standard.” Seth Godin, Zooming 12. BUT … Leaders Know When to Wait. Tex Schramm: The “too hard” box! 13. Leaders Are … Optimists. Hackneyed but none the less LEADERS SEE CUPS AS “HALF FULL.” true: 14. BUT … Leaders Are Realists/Leaders Win Through LOGISTICS! 15. Leaders … DELIVER! “It is no use saying ‘We are doing our best.’You have got to succeed in doing what is necessary.” —WSC “When assessing candidates, the first thing I looked for was energy and enthusiasm for execution. Does she talk about the thrill of getting things done, the obstacles overcome, the role her people played—or does she keep wandering back to strategy or philosophy?” —Larry Bossidy, Honeywell/AlliedSignal, in Execution 16. Leaders FOCUS! “To Don’t ” List 17. Leaders … Set CLEAR DESIGN SPECS. Danger: S.I.O. (Strategic Initiative Overload) 1@T: (1) Neutron JackWorld/ Jack. (Banish bureaucracy.) (2) “1, 2 or out” Jack. (Lead or leave.) (3) “Workout” Jack. (Empowerment, GE style.) (4) 6-Sigma Jack. (5) Internet Jack. (Throughout) TALENT JACK! 18. Leaders … Send V-E-R-Y Clear Signals About Design Specs! Ridin’ with Roger: “What have you done to DRAMATICALLY IMPROVE quality in the last 90 days?” It’s Relationships, Stupid. 19. Leaders Trust in TRUST! Credibility If It Ain’t Broke … Break It. 20. Leaders … FORGET!/ Leaders … DESTROY! Cortez! 21. BUT … Leaders Have to Deliver, So They Worry About “Throwing the Baby Out with the Bathwater.” “Damned If You Do, Damned If You Don’t, Just Plain Damned.” Subtitle in the chapter, “Own Up to the Great Paradox: Success Is the Product of Deep Grooves/ Deep Grooves Destroy Adaptivity,” Liberation Management (1992) 22. Leaders … HONOR THE USURPERS. Saviors-in-Waiting Disgruntled Customers Upstart Competitors Rogue Employees Fringe Suppliers Wayne Burkan, Wide Angle Vision 23. Leaders Make [Lotsa] Mistakes – and MAKE NO BONES ABOUT IT! “Fail faster. Succeed sooner.” David Kelley/IDEO 24. Leaders Make … BIG MISTAKES! “Reward excellent failures. Punish mediocre successes.” Phil Daniels, Sydney exec Create. 25. Leaders Know that THERE’S MORE TO LIFE THAN “LINE EXTENSIONS.” Leaders Love to CREATE NEW MARKETS. No one ever made it into the Business Hall of Fame on a record of “line extensions.” “Acquisitions are about buying market share. Our challenge is to create markets. There is a big difference.” Peter Job, CEO, Reuters 26. Leaders … Make Their Mark / Leaders … Do Stuff That Matters “I never, ever thought of myself I was interested in creating things I would be proud of.” —Richard Branson as a businessman. 27. Leaders Push Their W-a-y Up the Value-added/ Intellectual Capital Chain Organizations 09.11.2000: HP bids $18,000,000,000 for PricewaterhouseCoopers Consulting business! 28. Leaders LOVE the New Technology! square feet 29. Needed? Type IV Leadership: Technology Dreamer-True Believer The Golden Leadership Quadrangle: (1) CreatorVisionary … (2) Talent Fanatic-Mentor-V.C. … (3) Inspired Profit Mechanic. (4) Technology Dreamer-True Believer Talent. 30. When It Comes to TALENT … Leaders Always Swing for the Fences! Message: Some people are better than other people. Some people are a helluva lot better than other people. 31. Leaders “Manage” Their EVP/Internal Brand Promise. MantraM3 Talent = Brand 32. Leaders LOVE RAINBOWS – for Pragmatic Reasons. “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 Passion. 33. Leaders … Out Their PASSION! “Create a ‘cause,’ not a ‘business.’ ” G.H.: 34. Leaders Know: ENTHUSIASM BEGETS ENTHUSIASM! BZ: “I am a … Dispenser of Enthusiasm!” 35. Leaders Focus on the SOFT STUFF! “Soft” Is “Hard” - ISOE The “Job” of Leading. 36. Leaders Know It’s ALL SALES ALL THE TIME. If you don’t LOVE SALES … find another life. (Don’t pretend TP: you’re a “leader.”) (See TP’s The Project50.) 37. Leaders LOVE “POLITICS.” If you don’t LOVE POLITICS … find another life. (Don’t pretend TP: you’re a “leader.”) 38. But … Leaders Also Break a Lot of China 39. Leaders Give … RESPECT! “It was much later that I realized Dad’s secret. He gained respect by giving it. He talked and listened to the fourth-grade kids in Spring Valley who shined shoes the same way he talked and listened to a bishop or a college president. He was seriously interested in who you were and what you had to say.” Sara Lawrence-Lightfoot, Respect 40. Leaders Say “Thank You.” “The two most powerful things a kind word and a thoughtful gesture.” in existence: Ken Langone, CEO, Invemed Associates [from Ronna Lichtenberg, It’s Not Business, It’s Personal] 41. Leaders Are … Curious. The Three Most Important Letters … TP/08.2001: 42. Leadership Is a … Performance. “It is necessary for the President to be the No. 1 actor.” nation’s FDR 43. Leaders … Are The Brand The BRAND lives (OR DIES) in the “minutiae” of the leader’s momentto-moment actions. 44. Leaders … GREAT STORY! Have a Leaders don’t just make products and make decisions. Leaders make meaning. – John Seeley Brown Introspection. 45. Leaders … Enjoy Leading. “Warren, I know you want to ‘be’ president. But do you want to ‘do’ president?” 46. Leaders … KNOW THEMSELVES. Individuals (would-be leaders) cannot engage in a liberating mutual discovery process unless they are comfortable with their own skin. (“Leaders” who are not comfortable with themselves become petty control freaks.) 47. But … Leaders have MENTORS. Upon having the Leadership Mantle placed upon thine head, thou shalt never hear the unvarnished truth again!* The Gospel According to TP: (*Therefore, thy needs one faithful compatriot to lay it on with no jelly.) 48. Leaders … Take Breaks. Zombie! Zombie! Zombie! Zombie! The End Game. 49. Leaders ???: “LEADERS NEED TO BE THE ROCK OF GIBRALTAR ON ROLLER BLADES” 50. Leaders Know WHEN TO LEAVE! XI. NEW BUSINESS. NEW RULES. 15+/Bonus: Tom’s 60TIBs* *TIB = This I Believe 1. TECHNICOLOR RULES! (Passion Moves Mountains!) 2. Audacity Matters! 3. Revolution Now! 4. Question Authority! (& Hire Disrespectful People.) 5. Disorganization Wins! (LOVE THE MESS!) 6. Think 3M: Markets Matter Most. ONLY EXTREME COMPETITION STAVES OFF STALENESS. (You can take the boy out of Silicon Valley, but you can’t take Silicon Valley out of the boy!) 7. Three Hearty Cheers for Weirdos. (Bill Gates, Steve Jobs, Larry Ellison, Scott McNealy, Craig Venter et al.) 8. Message 2003: Technology Change (Info-sciences, Biosciences) Is in Its Infancy! (WE AIN’T SEEN NOTHIN’ YET!) 9. Everything Is Up For Grabs! Volatility Is Thy Name! (Forever & Ever. Amen.) RE-INVENT … OR DIE! 10. Big Sucks. (Mostly.) (VERY Mostly.) 11. “Permanence” Is a Snare & a Delusion. (Forget “Built to Last.” It’s Yesterday’s Idea.) 12. Kaizen” (Continuous Improvement) Is … Dangerous. 13. DESTRUCTION RULES! 14. Forget It! (“Learning” = Easy. “Forgetting” = Nigh on Impossible.) 15. Innovation Is Easy: Hang Out with Freaks. (Employees, Board Members, Customers, Suppliers, Alliance Partners, Consultants.) 16. Boring Begets Boring. (Cool Begets Cool.) 17. Think “Portfolio.” (We’re All V.C.s.) 18. Perception Is All There Is. (“Insiders” … ALWAYS … overestimate the Radicalism of What They’re Up To.) 19. Action … ALWAYS … Takes Precedence. Think: R.F!A./Ready. Fire! Aim. (REWARD SUCCESS. REWARD FAILURE. PUNISH … INACTION.) 20. He Who Makes & Tests the Quickest & Coolest Prototypes Reigns! 21. Haste Makes Waste. (SO GO WASTE!) 22. Screwups are … the … Mark of Excellence. (“Do It Right the First Time” Is a Very Stupid Idea.) 23. Play Hard! Play Now! (Cherish Play!) 24. TALENT TIME! (He/She Who Has the Best “Roster” Rules!) 25. Re-do Education. Totally. (FOSTER CREATIVITY … NOT UNIFORMITY.) (THE NOISIEST CLASSROOM WINS.) 26. Diversity’s Hour Is Now! 27. SHE … Is the Best Leader! 28. MARKETING MANTRA: Embrace the “BIG THREE” Demographics. (1) SHE … is the Customer. (For everything.) (2) Rapidly Aging Boomers Have … ALL THE MONEY. (3) Green … Matters. (TRILLIONS OF $$$$$ Are at Stake.) (NOBODY … Gets It.) (Mere “Programs” Will Not Suffice.) 29. Re-boot Healthcare. (UNDERSTATEMENT.) 30. WHAT ARE WE SELLING? “Experiences” & “Solutions” > “Quality” & “Satisfaction.” (The Traditional Value-added Equation Is Being Set on Its Ear.) 31. DESIGN = New Seat of the Soul. 32. Branding Is for … EVERYONE. He Who Has the … BEST STORY … Takes Home the Marbles. 33. DRAMATIC DIFFERENCE = Only Difference. 34. WORDS/Language Matters … a Lot. (E.g.: Three Hearty Cheers for “Wow”!) 35. WHAT MATTERS IS STUFF THAT MATTERS. (Query #1: “Are You Proud of It?”) 36. eALL. (IS/IT: Half-way = No Way.) 37. DREAM … Big! DREAM … Enormous. DREAM … Gargantuan. (These Are XXXL Times.) 38. THINK MIKE! (Michelangelo: “The greatest danger for most of us is not that our aim is too high and we miss it, but that it is too low and we reach it.”) 39. There Is Only … ONE BIG ISSUE. Crossfunctional Communication. 40. Stop Doing Dumb Shit. (SYSTEMATIZE THE PROCESS OF “UN-DUMBING.”) 41. Beautiful Systems Are … BEAUTIFUL. 42. The … WHITE-COLLAR REVOLUTION … Will Devour Everything in Its Path. 43. Take Charge of Your Destiny! BrandYou Moment! DISTINCT … OR EXTINCT! 44. “Powerlessness” Is a State of Mind! Think: King. Gandhi. DeGaulle. 45. Pursue Adventure … in Every Task. 46. EXCELLENCE … Is a State of Mind. (Excellence Takes a Minute.) (No Bull.) 47. SHOW UP! (If You Care, You’re There.) 48. YOUR CALENDAR KNOWS ALL. (You = Calendar.) (Mind Your “TO DON’T” List.) 49. LIFE IS SALES. (The Rest Is Details.) 50. Boss Mantra #1: “I DON’T KNOW.” (“I Don’t Know” = Permission to Explore.) 51. Management Role 1: GET OUT OF THE WAY. (Clear the Way.) (“Manager” = Hurdle Removal Professional.) 52. Epitaph from Hell: “He Woulda Done Some Truly Cool Stuff … But His Boss Wouldn’t Let Him.” 53. Change Takes However Long You Think It Takes. (Eschew … “Incrementalism.”) 54. Respect! (Rule 1: Don’t Belittle!) 55. “Thank You” Trumps All! 56. Integrity Matters! Integrity = Credibility. (Dennis K. Is a Jerk.) 57. SOFT IS HARD. HARD IS SOFT. (Numbers Are Soft. People Are Not.) 58. Try Sunny! (Sunny Begets Sunny. Gloomy Begets Gloomy.) 59. DISPENSE ENTHUSIASM! 60. FUN …Is Not a 4-Letter Word. So, too … JOY. (And … GRACE.) Have you changed civilization today? Source: HP banner ad Thank You