Long
Excellence
Tom Peters/16 August 2013
Institute of Internal Auditors/Orlando
(slides @ tompeters.com/excellencenow.com)
Context
“At a party given by a billionaire
on Shelter Island, Kurt Vonnegut
informs his pal, Joseph Heller,
that their host, a hedge fund
manager, had made more money
in a single day than Heller had
earned from his wildly popular
novel Catch-22 over its whole
history. Heller responds …
‘Yes, but I have
something
he will never
have …
Enough.
Source: John Bogle, Enough. The Measures of Money, Business,
and Life (Bogle is founder of the Vanguard Mutual Fund Group)
“Too Much Cost, Not Enough Value”
“Too Much Speculation, Not Enough
Investment”
“Too Much Complexity, Not Enough Simplicity”
“Too Much Counting, Not Enough Trust”
“Too Much Business Conduct, Not Enough
Professional Conduct”
“Too Much Salesmanship, Not Enough
Stewardship”
“Too Much Focus on Things, Not Enough Focus
on Commitment”
“Too Many Twenty-first Century Values, Not
Enough Eighteenth-Century Values”
“Too Much ‘Success,’ Not Enough Character”
Source: Chapter titles from Jack Bogle, Enough.
“The notion that corporate law requires
directors, executives, and employees to
maximize shareholder wealth simply
isn’t true. There is no solid legal
support for the claim that
directors and executives in U.S.
public corporations have an
enforceable legal duty to
maximize shareholder wealth.
The idea is fable.”
—Lynn Stout, professor of corporate
The Shareholder Value
Myth: How Putting Shareholders First Harms Investors,
Corporations, and the Public
and business law, Cornell Law school,
“Courts uniformly refuse to impose
sanctions on directors or executives
for failing to pursue one purpose
over another. In particular,
courts refuse to hold directors of
public corporations legally
accountable for failing to maximize
shareholder wealth.” —Lynn Stout,
professor of corporate and business law, Cornell Law school,
in The Shareholder Value Myth: How Putting Shareholders First
Harms Investors, Corporations, and the Public
“On the face of it,
shareholder value is the
dumbest idea in the world.
Shareholder value is a
result, not a strategy. …
Your main constituencies
are your employees, your
customers and your
products.” —Jack Welch, FT, 0313.09, page 1
“Managers have lost dignity over the past
decade in the face of wide spread institutional
breakdown of trust and self-policing in
To regain society’s trust,
we believe that business leaders
must embrace a way of looking at
their role that goes beyond their
responsibility to the shareholders
to include a civic and personal
commitment to their duty as
institutional custodians. In other
business.
words, it is time that management became a
profession.” —Rakesh Khurana & Nitin Nohria, “It’s Time To Make
Management a True Profession,” HBR/10.08
Yikes!
Corporate conscience/Keeper of the culture
Cops
Risk evaluators (strategic epicenter of the firm)
Privacy assessors/guardians
Global puzzle solvers in the Age of Infinite
Entanglements
PR managers
Systems cops (overall)
Forensic accountants
Masters of technology
Advisors/consigliore to top management
Advisors/consultants to down-the-line units
Really First
Things Before
First Things
“The doctor
interrupts
after …*
*Source: Jerome Groopman, How Doctors Think
18 …
18 …
seconds!
Listen = “Profession”
= Study = Practice =
Evaluation =
Enterprise Value
“Let Silence
Do the Heavy
Lifting”
—chapter title from Susan Scott,
Fierce Conversations: Achieving Success at Work and in Life,
One Conversation at a Time
“Everyone has a
story to tell, if only
you have the
patience to wait for
it and not get in the
way of it.”
—Charles McCarry,
Christopher’s Ghosts
Suggested addition to your statement of Core
“We are Effective
Listeners—we treat
Listening EXCELLENCE as
the Centerpiece of our
Commitment to Respect
and Engagement and
Community and Growth.”
Values:
“It’s amazing how this
seemingly small thing—
simply paying fierce
attention to another, really
asking, really listening,
even during a brief
conversation—can evoke
such a wholehearted
response.”
Fierce Conversations:
—Susan Scott,
Achieving Success at Work and in Life, One Conversation at a Time
Really First
Things Before
First Things
XFX = #1*
*Cross-Functional eXcellence
% XF
lunches*
Measure! Monthly! Part of
*
evaluation! [The PAs Club.]
George Crile (Charlie Wilson’s War) on Gust
“He had
become something of a
legend with these
people who manned the
underbelly of the
Agency [CIA].”
Avrakotos’ strategy:
Suck Down for Success!
“Success doesn’t depend on the number of
people you know; it depends on the number
of people you know in
high places!”
or
“Success doesn’t depend on the number of
people you know; it depends on the number
of people you know in
low
places!”
“I got to
know his
secretaries.”
—Dick Parsons
(as CEO Time Warner, on successfully dealing with Carl Icahn)
Really First
Things Before
First Things
If the regimental commander lost most of his
2nd lieutenants and 1st lieutenants and captains
If he
lost his sergeants it
would be a
catastrophe. The Army and the
and majors, it would be a tragedy.
Navy are fully aware that success on the
battlefield is dependent to an extraordinary
degree on its Sergeants and Chief Petty
Officers. Does industry have the same
awareness?
Really First
Things Before
First Things
In the Army, 3-star
generals worry about
training. In most
businesses, it's a “ho
hum” mid-level staff
function.
I would hazard a guess
that most CEOs see IT
investments as a
“strategic necessity,”
but see training
expenses as “a
necessary evil.”
Really First
Things Before
First Things
#1:
Every meeting
that does not stir the
imagination and curiosity of
attendees and increase
bonding and cooperation and
engagement and sense of
worth and motivate rapid
action and enhance
enthusiasm is a permanently
lost opportunity.
Meetings
Really First
Things Before
First Things
Hard is Soft.
Soft is Hard.
Hard
Soft
[numbers, plans]
[people/relationships]
is Soft.
is Hard.
“If I could have chosen not to tackle the IBM culture
head-on, I probably wouldn’t have. My bias coming in was
toward strategy, analysis and measurement. In
comparison, changing the attitude and behaviors of
hundreds of thousands of people is very, very hard. Yet I
came to see in my time at IBM that culture
isn’t just one aspect of the game …
it is the
game.”
Source: Lou Gerstner, Who Says Elephants Can’t Dance
Systems Have Their Place: SECOND Place
Case #1/United States Air Force Tactical Air Command/
GEN Bill Creech/“Drive bys”
Case #2/Milliken & Company/CEO Roger Milliken/the 45minute grilling
Case #3/Johns Hopkins/Dr. Peter Pronovost/The (real) roots
of checklist power
Case #4/Commerce Bank/CEO Vernon Hill/The RED button
commitment
Case #5/Veterans Administration/Abrogating the “culture
of hiding”
Case #6/Mayo Clinic/Dr. William Mayo/Teamwork makes me
“100 times better”
Case #7/IBM/CEO Lou Gerstner flummoxed by ingrained
beliefs
Case #8/Germany’s Mittelstand/excellence-in-the-genes
Case #9/Department of Defense/DASD Bob Stone/tracking
down the extant ”Model Installation” superstars
Case #10/Matthew Kelly/Housekeepers’ dreams
Case #11/Toyota/Growth or bust
Excellence
Tom Peters/16 August 2013
Institute of Internal Auditors/Orlando
(slides @ tompeters.com/excellencenow.com)
“Why in the
World did you
go to Siberia?”
An emotional, vital,
innovative, joyful, creative,
entrepreneurial endeavor that elicits
maximum
Enterprise* (*at its best):
concerted human
potential in the
wholehearted pursuit of
EXCELLENCE in
service of others.**
**Employees, Customers, Suppliers, Communities, Owners, Temporary partners
Excellence1982: The Bedrock “Eight Basics”
1.
2.
3.
4.
5.
6.
7.
8.
A Bias for Action
Close to the Customer
Autonomy and Entrepreneurship
Productivity Through People
Hands On, Value-Driven
Stick to the Knitting
Simple Form, Lean Staff
Simultaneous Loose-Tight
Properties
1/4,096: excellencenow.com
“Business has to give people enriching,
or it's
simply not
worth doing.”
rewarding lives …
—Richard Branson
Oath of Office: Managers/Servant Leaders
Our goal is to serve our customers brilliantly and profitably over
the long haul.
Serving our customers brilliantly and profitably over the long
haul is a product of brilliantly serving, over the long haul, the
people who serve the customer.
Hence, our job as leaders—the alpha and the omega and
everything in between—is abetting the sustained growth and
success and engagement and enthusiasm and commitment to
Excellence of those, one at a time, who directly or indirectly
serve the ultimate customer.
We—leaders of every stripe—are in the “Human Growth and
Development and Success and Aspiration to Excellence
business.”
“We” [leaders] only grow when “they” [each and every one of our colleagues] are
growing.
“We” [leaders] only succeed when “they” [each and every one of our colleagues]
are succeeding.
“We” [leaders] only energetically march toward Excellence when
“they” [each and every one of our colleagues] are energetically marching
toward Excellence.
Period.
A 15-Point Human Capital Development Manifesto
1. “Corporate social responsibility” starts at
home—i.e., inside the enterprise! MAXIMIZING
GDD/Gross Domestic Development of the
workforce is the primary source of mid-term and
beyond growth and profitability—and maximizes
national productivity and wealth. (Re profitability:
If you want to serve the customer with uniform
Excellence, then you must FIRST effectively and
faithfully serve those who serve the customer—
i.e. our employees, via maximizing tools and
professional development.)
The Memories That Matter
The people you developed who went on to
stellar accomplishments inside or outside
the company.
The (no more than) two or three people you developed who went on to
create stellar institutions of their own.
The long shots (people with “a certain something”) you bet on who
surprised themselves—and your peers.
The people of all stripes who 2/5/10/20 years
later say “You made a difference in my life,”
“Your belief in me changed everything.”
The sort of/character of people you hired in general. (And the bad
apples you chucked out despite some stellar traits.)
A handful of projects (a half dozen at most) you doggedly pursued that
still make you smile and which fundamentally changed the way
things are done inside or outside the company/industry.
The supercharged camaraderie of a handful of Great Teams aiming to
“change the world.”
“The root of our problem is not
that we’re in a Great Recession
or a Great Stagnation, but rather
that we are in the early
Great
Restructuring. Our
throes of a
technologies are racing ahead,
but our skills and organizations
are lagging behind.”
Source: Race AGAINST the Machine, Erik Brynjolfsson and Andrew McAfee
+400,000*/-2,000,000**
“new computing technologies
that destroy middle-class [whitecollar] jobs even as they create
jobs for highly skilled workers
who can exploit them”
*Manufacturing jobs
added USA 2007-2012
**White-collar jobs lost USA 2007-2012
Source: Financial Times, page 1, 0402.13
(“Clerical Staff Bears Brunt of US Jobs Crisis”)
Automate This: How Algorithms Came to
Rule Our World —Christopher Steiner
Big Data: A Revolution That Will Transform How
We Live, Work, and Think —Viktor Mayer-Schonberger and
Kenneth Cukier
Predictive Analytics: The Power to Predict Who
Will Click, Buy, Lie, or Die —Eric Siegel
Race AGAINST The Machine: How the Digital
Revolution Is Accelerating Innovation, Driving
Productivity, and Irreversibly Transforming
Employment and the Economy —Erik Brynjolfsson and
Andrew McAfee
“Algorithms have already written symphonies
as moving as those composed by
Beethoven, picked through legalese with
the deftness of a senior law partner,
diagnosed patients with more accuracy than a
doctor, written news articles with the
smooth hand of a seasoned reporter, and
driven vehicles on urban highways with far
better control than a human
driver.”
Automate This: How
Algorithms Came to Rule Our World
—Christopher Steiner,
Legal industry/Pattern
Recognition/Discovery (ediscovery algorithms):
500 lawyers to …
ONE
Source: Race AGAINST the Machine, Erik Brynjolfsson and Andrew McAfee
MetaMed
“[Michael Vassar/
founder] is creating a
better information system and new class of people to
‘Almost all healthcare
people get is going to be
done—hopefully—by
algorithms within a decade or
two. We used to rely on doctors to be experts, and we’ve
manage it.
crowded them into being something like factory workers, where
their job is to see one patient every 8 to 11 minutes and implement
a by-the-book solution. I’m talking about creating a new expert
profession’—medical quants, almost like hedgefund managers, who
could do the high-level analytical work of directing all the
information that flows into the world’s hard drives. Doctors would
now be aided by Vassar’s new information experts who would be
aided by advanced artificial intelligence.”—New York /0624.13
“ … The audience then voted on the
identity of each composition.*
[Music theory professor and contest
organizer] Larson’s pride took a
ding when his piece was fingered as
that belonging to the computer.
When the crowd decided that
[algorithm] Emmy’s piece was the
true product of the late musician
[Bach], Larson winced.”
—Christopher Steiner,
Automate This: How Algorithms Came to Rule Our World
*There were three: Bach/Larson/Emmy-the-algorithm.
“Human level
capability has not
turned out to be a
special stopping point
from an engineering
perspective. ….”
Source: Illah Reza Nourbakhsh, Professor of Robotics, Carnegie Mellon, Robot Futures
“Aviva, a large insurance firm, has studied the
idea of using credit reports and consumermarketing data as proxies for the analysis of
blood and urine samples for certain applicants.
The intent is to identify those who may be at
higher risk of illnesses like high blood pressure,
diabetes, or depression. The method uses
lifestyle data that includes hundreds of
variables such as hobbies, the websites people
visit, and the amount of television they watch,
as well as estimates of their income. Aviva’s
predictive model, developed by Deloitte
Consulting, was considered successful at
identifying health risks.”
Source: Big Data: A Revolution That Will Transform How We Live, Work,
and Think, by Viktor Mayer-Schonberger and Kenneth Cukier
“Flash forward to dystopia. You work in a chic
cubicle, sucking chicken-flavor sustenance from
a tube. You’re furiously maneuvering with a
joystick … Your boss stops by and gives you a
look. ‘We need to talk about your loyalty to this
The organization you work for
has deduced that you are considering
quitting. It predicts your plans and
intentions, possibly before you have
even conceived them.” —Eric Siegel, Predictive
company.’
Analytics: The Power to Predict Who Will Click, Buy, Lie, or Die (based on
a real case, an HP “Flight risk” PA model developed by HR, with
astronomical savings potential)
Lesson47:
WTTMSW
WHOEVER
TRIES
THE
MOST
STUFF
WINS
In Search of Excellence /1982:
The Bedrock “Eight Basics”
1.
2.
3.
4.
5.
6.
7.
8.
A Bias for Action
Close to the Customer
Autonomy and Entrepreneurship
Productivity Through People
Hands On, Value-Driven
Stick to the Knitting
Simple Form, Lean Staff
Simultaneous Loose-Tight
Properties
“We made mistakes, of course. Most of them were
omissions we didn’t think of when we initially wrote the
software. We fixed them by doing it over and over, again
and again. We do the same today. While our competitors
are still sucking their thumbs trying to make the design
perfect, we’re already on prototype version
#5.
By
the time our rivals are ready with wires and screws, we
are on version
#10. It gets back
to planning versus acting: We
act from day one; others plan
how to plan—for months.”
—Bloomberg by Bloomberg
LITTLE =
Big carts =
Source: Wal*Mart
“When Friedman slightly curved
the right angle of an entrance
corridor to one property, he was
‘amazed at the magnitude of
change in pedestrian behavior’
(the percentage who entered
increased from one-third to
nearly two-thirds.” —Natasha Dow Schull,
Addiction By Design: Machine Gambling in Las Vegas
Glaring Eyes:
-62%
Source: PLOS ONE (via The Atlantic CITIES /0429.13)
“You will become
like the five people
you associate with
the most—this can
be either a blessing
or a curse.”
—Billy Cox
WE
ARE WHAT WE
EAT/WE ARE
THE COMPANY
WE KEEP
The “Hang Out Axiom”:
The “We are what we eat”/
“We are who we hang out with”
Axiom: At its core, every (!!!)
relationship-partnership decision
(employee, vendor, customer, etc.,
etc.) is a strategic decision about:
“Innovate,
‘Yes’ or ‘No’ ”
“The prospect of contracting a gofer on an a
la carte basis is enticing. For instance, wouldn’t it
be convenient if I could outsource someone to
write a paragraph here, explaining the history of
outsourcing in America? Good idea! I went ahead
and commissioned just such a paragraph from Get
Friday, a ‘virtual personal assistant- firm based in
Bangalore. … The paragraph arrived in my in-box
ten days after I ordered it. It was 1,356 words.
There is a bibliography with eleven sources. … At
$14 an hour for seven hours of work, the cost came
to $98. …” —Patricia Marx, “Outsource Yourself,” The New Yorker,
01.14.2013 (Marx describes in detail contracting out everything associated
with hosting her book club —including the provision of “witty” comments
on Proust, since she hadn’t had time to read the book—excellent
comments only set her back $5; the writer/contractor turned
out to be a 14-year-old girl from New Jersey.)
“Who’s the most
interesting person
you’ve met in the
last 90 days? How
do I get in touch
with them?”
—Fred Smith
14,000
20,000
14,000/eBay
20,000/Amazon
30/Craigslist
Dov Frohman:
Dov Frohman:
The “50% Rule”
“Daydream!”
Source: Dov Frohman (& Robert Howard), Leadership The Hard Way: Why Leadership Can’t Be Taught
—And How You Can Learn It Anyway (Chapter 5, “The Soft Skills Of Hard Leadership”)