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this presentation [and insure
that it is not a mess], you need
Microsoft fonts:
NOTE:
“Showcard Gothic,”
“Ravie,” “Chiller”
and “Verdana”
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“Showcard Gothic,” “Ravie,” “Chiller”
and “Verdana”
NOTE:
Master*
Excellence
part two (of 7)
innovate.
Or.
Die.
18 june 2007
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and “Verdana”
NOTE:
Master
Excellence. Always.
part one (of 7)
“all you need to know”
(dwelling on the obvious)
not your father’s world
introduction to excellence.
18 june 2007
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Master/
Excellence. Always./
part THREE (of 7)
up, up,
up, up …
the value added ladder
(solutions-experiences-dreams-lovemarks)
18 June 2007
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Master/
Excellence. Always./
part FOUR (of 7)
“new” Markets
(Stupendous Opportunity)
18 June 2007
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Master
Excellence. Always.
part FIVE (of 7)
people!
(Brand you. Talent. Health.
Education. Leadership.)
18 june 2007
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Master*
Excellence
part SIX (of 7)
excellence.
summaries.
Lists.
18 june 2007
Part seven
Extended
Talent &
Leadership
0618.07
part
two
Slides at …
tompeters.com
NOTE: amidst today’s unprecedented
market turmoil, innovation is
arguably and without exaggeration
“everything”—for the small, medium
and large enterprise. And public and
non-profit entities as much as forprofit enterprises. Moreover,
transformative innovation appears
nigh on impossible for giant
entities—which makes one wonder
why so many “bulk up” in an effort to
cope. (In a word … stupidity.)
Tom Peters’ X25*
EXCELLENCE.
ALWAYS.
MASTER/0618.2007/Part TWO
*In Search of Excellence 1982-2007
EXCELLENCE.
INNOVATE.
OR.
DIE.
EXCELLENCE.
INNOVATE.
AXIOMATIC.
“To grow, companies
need to break out of a
vicious cycle of
competitive
benchmarking and
imitation.”
—W. Chan Kim & Renée
Mauborgne, “Think for Yourself —
Stop Copying a Rival,” Financial Times
Characteristics of the “Also rans”*
“Minimize risk”
“Respect the chain
of command”
“Support the boss”
“Make budget”
*Fortune, article on “Most Admired Global Corporations”
EXCELLENCE.
INNOVATION.
THE REAL STORY.
Tom Peters/03.29.2007
The Perils of Conservatism/
Industry Leadership
“ ‘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
EVERYTHING YOU
THOUGHT YOU KNEW
ABOUT INNOVATION
IS WRONG
What “We” Know “For Sure” About Innovation
Big mergers [by & large] don’t work
Scale is over-rated
Strategic planning is the last refuge of scoundrels
Focus groups are counter-productive
“Built to last” is a chimera (stupid)
Success kills
“Forgetting” is impossible
Re-imagine is a charming idea
“Orderly innovation process” is an oxymoronic phrase
(= Believed only by morons with ox-like brains)
“Tipping points” are easy to identify …
long after they will do you any good
“Facts” aren’t
All information making it to the top is filtered
to the point of danger and hilarity
“Success stories” are the illusions of egomaniacs (and “gurus”)
If you believe the memoirs of CEOs you should be institutionalized
“Herd behavior” (XYZ is “hot”) is ubiquitous
… and amusing
“Top teams” are “Dittoheads”
CEOs have little effect on performance
“Expert” prediction is rarely better than rolling the dice
The Mess
Is The
Message!
Period!
What makes
God laugh?
People
making
plans!
What makes
tom laugh?
“Gurus”
(and once-
famous CEOs)
giving
LLLs
(logical linear
on
“systems”* of
innovation!
lectures)
*especially with lots of charts and graphs and Greek
mathematical symbols and little tiny numbers
The Mess
Is The
Message!
Period!
NOTE: few ideas are more important—
and more honored in the breach.
Innovation is
MESSY
to the extreme. Such an assertion
(reality!) determines the success of
innovation “strategies,” perhaps the
wrong word. This unfolding “story”
is one of the most important in my
efforts to alter enterprise thinking.
Try it. Try it. Try it
ry it. Try it. Screw
up. Try it. Try it. Try
t. Try it. Try it. Try
t. Try it. Screw it up
t. Try it. Try it. try
Get mad. Do
something
about it. Now.
The “5Ps” of Innovation Success:
Pissed-off-ed-ness
Passion
pals
Politics [Political skill]
Persistence
“Recently I asked three corporate
executives what decisions they had made
in the last year that would not have been
made were it not for their corporate plans.
All had difficulty identifying one such
decision. Since all of the plans are marked
‘secret’ or ‘confidential,’ I asked them
how their competitors might benefit
from possession of their plans. Each
answered with embarrassment that
their competitors would not
benefit.” —Russell Ackoff (from Henry Mintzberg,
The Rise and Fall of Strategic Planning)
21C = -1c
The Rise
and Fall of
Strategic
Planning
Trip #1:
“Recently I asked several corporate executives
what decisions they had made in the last year that
would not have been made were it not for their
All had difficulty
identifying one such decision.
corporate plans.
Since all of the plans are marked ‘secret’ or
‘confidential,’ I asked them how their competitors
might benefit from possession of their plans.
Each answered with
embarrassment that their
competitors would not
benefit.” —Russell Ackoff (from Henry Mintzberg,
The Rise and Fall of Strategic Planning)
An Economic Interpretation of the Constitution
of the United States —Charles Beard (1913)
The Box: How the Shipping
Container Made the World
Smaller and the World
Economy Bigger
—Marc Levinson
Tube: The Invention of Television
—David & Marshall Fisher
Empires of Light: Edison, Tesla,
Westinghouse, and the Race to Electrify
the World —Jill Jonnes
The Soul of a New Machine
—Tracy Kidder
Rosalind Franklin: The Dark Lady of DNA
—Brenda Maddox
The Blitzkrieg Myth —John Mosier
“Containerization is a remarkable achievement.
No one foresaw how the box would transform
everything it touched—from ships and ports to
patterns of global trade. Containerization is a
monument to the most powerful law in
economics, that of unanticipated consequences.
… This history ought to be humbling to
fans of modern management methods.
Careful planning and thorough analysis,
those business school basics, may have
their place, but they provide little
guidance in the face of disruptive
changes that alter an industry’s very
fundamentals.” —Marc Levinson, FT, 0425.06 (author of The
Box: How the Shipping Container Made the World Smaller and the World
Economy Bigger)
“Recently I asked three corporate
executives what decisions they had made
in the last year that would not have been
made were it not for their corporate plans.
All had difficulty identifying one such
decision. Since all of the plans are marked
‘secret’ or ‘confidential,’ I asked them
how their competitors might benefit
from possession of their plans. Each
answered with embarrassment that
their competitors would not
benefit.” —Russell Ackoff (from Henry Mintzberg,
The Rise and Fall of Strategic Planning)
Lessons
Need-driven
A thousand “parents”
Messy
Evolutionary
“Trivial”
Relentless Experimentation
Trial &
many, many eRRORs
“Real heroes” seldom around when the battle is won
Loooong time for systemic adaptation/s
(many innovations) (bill of lading, standard time)
Not …
“Plan-driven”
The product of “Strategic Thinking/Planning”
The product of “focus groups”
Discover, by accident,
“blue ocean” [women’s financial needs]!
Ignore your
[Dean Witter]
boss!
Sell 750,000 copies of your
latest book to Wells Fargo
Home Mortgage!
Source: the David Bach story, including
Smart Women Finish Rich, per IBD (01.08.07)
What “We” Know “For Sure” About Innovation
Big mergers [by & large] don’t work
Scale is over-rated
Strategic planning is the last refuge of scoundrels
Focus groups are counter-productive
“Built to last” is a chimera (stupid)
Success kills
“Forgetting” is impossible
Re-imagine is a charming idea
“Orderly innovation process” is an oxymoronic phrase
(= Believed only by morons with ox-like brains)
“Tipping points” are easy to identify …
long after they will do you any good
“Facts” aren’t
All information making it to the top is filtered
to the point of danger and hilarity
“Success stories” are the illusions of egomaniacs (and “gurus”)
If you believe the memoirs of CEOs you should be institutionalized
“Herd behavior” (XYZ is “hot”) is ubiquitous
… and amusing
“Top teams” are “Dittoheads”
CEOs have little effect on performance
“Expert” prediction is rarely better than rolling the dice
“We are in a
brawl with
no rules.”
—Paul Allaire
Paul Allaire: “We are in a
brawl with no rules.”
TP: “There’s only one
possible answer—S.A.V.”*
*Screw Around Vigorously
Axiom:
“We are in a brawl
with no rules.” (PA)
Implication:
“The world will
not be kind to those who
‘play by the rules’.”* (TP)
Strategy:
S.A.V./R.F.A. (RP/TP+)
*Axiom: The microprocessor plays by the rules.
First-level
Scientific
Success:
Beyond Brains
First-level Scientific Success
The smartest guy
in the room wins”
Or …
First-level Scientific Success
Fanaticism
Persistence-Dogged Tenacity
Patience (long haul/decades)-Impatience (in a hurry/”do it yesterday”)
Passion
Energy
Relentlessness (Grant-ian)
Enthusiasm
Driven (nuts!)
(Brutal?) Competitiveness
Entrepreneurial
Pragmatic (R.F!A.)
Scrounge (“gets” the logistics-infrastructure bit)
Master of Politics (internal-external)
Tactical Genius
Pursuit of (Oceanic) Excellence!
High EQ/Skillful in Attracting + Keeping Talent/Magnetic
Prolific (“ground up more pig brains”)
Egocentric
Sense of History-Destiny
Futuristic-In the Moment
Mono-dimensional (“Work-life balance”? Ha!)
Exceptionally Intelligent
Exceptionally Clever (methodological shortcuts/methodological genius)
Luck
Blitzkrieg?
Case: Reality
Germans cross Meuse into France.
Whoops: French intelligence completely drops
the ball. (Loses track of the Germans—no kidding.)
Germans keep advancing; outrun supply lines;
no land-air co-ordination.
Hitler orders advance stopped.
General never gets the word.
General marches to Paris, virtually unopposed.
Germans shocked.
After the fact, Germans label it “Blitzkrieg.”
Case: Lessons Learned
Do something.
Get lucky.
Attribute luck to superior
planning.
Get medals.
“Blitzkrieg in fact emerged in a rather
haphazard way from the experience of
the French campaign, whose success
surprised the Germans as much as the
French. Why otherwise did the High
Command try on several occasions,
with Hitler’s backing, to slow the
panzers down. … The victory in France
partly came about because the German
High Command temporarily lost control
of the battle.” —Julian Jackson, The Fall
of France: The Nazi Invasion of 1940
Utterback+
“A pattern emphasized in the case
studies in this book is the degree to
which powerful competitors not
only resist innovative threats,
but actually resist all efforts to
understand them, preferring to
further their positions in older
products. This results in a surge of
productivity and performance that
may take the old technology to
unheard of heights. But in most cases
this is a sign of impending death.”
—Jim Utterback, Mastering the Dynamics of Innovation
“Apparently our society,
not unlike the Greeks with
their Delphic oracles, takes
great comfort in believing
that very talent ‘seers’
removed from the hurlyburly world of reality can
tell foretell coming
events.” —Len Sayles/Columbia
The Perils of Conservatism/
Industry Leadership
“ ‘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
“The most thoughtful and articulate
strategies tend to come from big banks.
But their actual results seldom bear
that out. When you walk the streets and
look at what’s happening, the gap
between strategy and execution
becomes obvious. We have to see with
our own eyes what customers are
experiencing.” —Thomas Brown, CEO, Second Curve Capital
[hedge fund] , on their annual “branch hunt”
“Mr Brown’s favorite experience came at a Chase branch where he
opened a checking account. When a Chase employee asked where he
currently did business, he said he was a Citibank customer. ‘I’m
surprised you want to switch,’ she replied matter of factly, ‘I have my
account at Citibank.” —Bill Taylor, “Get Out of That Rut and
Into the Shower,” NYT, 0813.06
“Hard” Stuff/
Science: 20%
“Soft” Stuff/
Politics: 80%
“Hard” Stuff/Analysis
& planning: 25%
“Soft” Stuff/people &
Politics & Passion
& execution: 75%
“Peters is the Michel
Foucault of the management
world: a scourge of the
rationalist tradition and a
celebrant of the creative
necessity of chaos and
craziness.” —Financial Times, 09.23.2003,
review of Re-imagine! (“You Should Be Bonkers in
a Bonkers’ Time”)
“Most of our predictions are
based on very linear
thinking. That’s why they
will most likely be wrong.”
Vinod Khosla, in “GIGATRENDS,” Wired 04.01
Tom’s source code:
The eight iconic
books which are the
Wellsprings
of my operating
values and core
assumptions
05.22.07
Fooled by Randomness: The Hidden Role of Chance in Life
and the Markets, Nassim Nicholas Taleb
The Black Swan: The Impact of the Highly Improbable,
Nassim Nicholas Taleb
Expert Political Judgment: How Good Is It? How Can We
know? Philip Tetlock
The Difference: How the Power of Diversity Creates
Better Groups, Firms, Schools, and Societies, Scott Page
The Wisdom of Crowds,
James Surowiecki.
Full House: The Spread of Excellence from Plato to
Darwin, Stephen Jay Gould
Judgment under Uncertainty: Heuristics and Biases,
Kahneman, Paul Slovic and Amos Tversky.
Daniel
A Mind of Its Own: How Your Brain Distorts and Deceives,
Cordelia Fine
“This book
is about luck disguised and perceived as non-luck (that is, skills) and more
generally randomness disguised and perceived as non-randomness. It manifests
itself in the shape of the lucky fool, defined as a person who benefited from a
disproportionate share of luck but attributed his success to some other,
generally precise reason.”
Fooled by Randomness: The Hidden Role of Chance in Life and the Markets, Nassim Nicholas Taleb
The Black Swan: The Impact of the Highly Improbable, Nassim Nicholas Taleb
“A fox, the thinker who
knows many little things, draws from an eclectic array of disciplines, and is better
able to improvise in response to changing events, is more successful in
predicting the future than the hedgehog, who knows one big thing, toils devotedly
within one tradition, and imposes formulaic solutions on ill defined problems.”
Expert Political Judgment: How Good Is It? How Can We know? Philip Tetlock
The Difference: How the Power of Diversity Creates Better Groups, Firms, Schools, and Societies , Scott Page .
“Diverse groups of problem solvers—groups of people with diverse tools—
consistently outperformed groups of the best and the brightest. If I formed
two groups, one random (and therefore diverse) and one consisting of the best
individual performers, the first group almost always did better. … Diversity
trumped ability.”
The Wisdom of Crowds, James Surowiecki.
Full House: The Spread of Excellence from Plato to Darwin, Stephen Jay Gould
Judgment Under Uncertainty: Heuristics and Biases, Daniel Kahneman, Paul Slovic and Amos Tversky.
“Your brain has some shifty
habits that leave the truth distorted and disguised. Your brain is vainglorious. It’s
emotional and immoral. It deludes you. It is pigheaded, secretive and weak willed.
Oh, and its also a bigot.”
A Mind of Its Own: How Your Brain Distorts and Deceives , Cordelia Fine
The (Strange) Case of Peter Drucker &
Michael Porter vs. The “Non-linearists”
HERBERT SIMON. (Administrative Behavior.) JAMES
MARCH. KARL WEICK. (The Social Psychology of
Organizing.) EUGENE WEBB. Henry
MINTZBERG. (The Rise and Fall of Strategic Planning.)
JAMES UTTERBACK. THOMAS KUHN. (The
Structure of Scientific Revolutions.) CHARLES
LINDBLOM. Daniel goleman.
INNOVATION BIOGRAPHERS.* (*Transcontinental
Railroad, Electrification, Radio, Television, Containerization, DNA,
MOST POLITICAL
SCIENTISTS. SILICON VALLEY. Etc.
Computers, Military History, Etc.)
An Economic Interpretation of the Constitution
of the United States —Charles Beard (1913)
The Box: How the Shipping
Container Made the World Smaller
and the World Economy Bigger
—Marc Levinson
Tube: The Invention of Television
—David & Marshall Fisher
Empires of Light: Edison, Tesla,
Westinghouse, and the Race to Electrify
the World —Jill Jonnes
The Soul of a New Machine
—Tracy Kidder
Rosalind Franklin: The Dark Lady of DNA
—Brenda Maddox
The Blitzkrieg Myth —John Mosier
Containerization was 50
last year. The story of its
development is a “thriller” by
any standard—and a brilliant
exemplar of the tortuous
path from inkling to reality.
NOTE:
Happy 50!
26April2006
Lessons
Need-driven
A thousand “parents”
Messy
Evolutionary
“Trivial”
Relentless Experimentation
Trial &
many, many eRRORs
“Real heroes” seldom around when the battle is won
Loooong time for systemic adaptation/s
(many innovations) (bill of lading, standard time)
Not …
“Plan-driven”
The product of “Strategic Thinking/Planning”
The product of “focus groups”
“Containerization is a remarkable achievement.
No one foresaw how the box would transform
everything it touched—from ships and ports to
patterns of global trade. Containerization is a
monument to the most powerful law in
economics, that of unanticipated consequences.
… This history ought to be humbling to fans of
modern management methods. Careful planning
and thorough analysis, those business school
basics, may have their place, but they provide
little guidance in the face of disruptive changes
that alter an industry’s very fundamentals.” —Marc
Levinson, FT, 0425.06 (author of The Box: How the Shipping Container
Made the World Smaller and the World Economy Bigger)
Get mad. Do
something
about it. Now.
The “5Ps” of Innovation Success:
Pissed-off-ed-ness
Passion
pals
Politics [Political skill]
Persistence
The Mess
Is The
Message!
Period!
Ubiquitous
“Politics”
Fooled by
Randomness: The
Hidden Role of
Chance in Life and
the Markets
—Nassim Nicholas Taleb
“This book is about luck disguised and perceived as
non-luck (that is, skills) and more generally randomness
disguised and perceived as non-randomness. It manifests
itself in the shape of the lucky fool, defined
as a person who benefited from a disproportionate share
of luck but attributed his success to some other,
generally precise reason.”
“We underestimate the share of randomness in just
about everything, a point that might not merit a
book—except when it is the specialist who is the
fool of all fools.”
“Mild success can be explainable by skills and labor.
Wild success is attributable to variance.”
Source: Fooled by Randomness: The Hidden Role of Chance
in Life and the Markets —Nassim Nicholas Taleb
“[Eisenhower] chafed miserably as
General MacArthur’s aide in the
Philippines, and in the end was
promoted to lieutenant colonel only
because General George C. Marshall
remembered him, from years of
inspecting dreary peacetime army
bases, as the best bridge player in
the U.S. Army.” —Ulysses S. Grant, Michael Korda
“A man of great mediocrity.” —General George Patton
about General Omar Bradley …… “A third-rate general. He
never did anything or won any battle that any other
general could not have won as well or better.” —General
Omar Bradley about Sir Bernard Montgomery …… “If you
want to end the war in any reasonable time, you will have
to remove Ike’s hand from the control of the land battle.”
—Sir Bernard Montgomery about General Dwight
Eisenhower …… “One thing that might help win this war is
to get someone to shoot King.” —General Dwight
Eisenhower about Admiral Ernest King …… “Eisenhower,
though supposed to be running the land war, is on the
golf links at Rhiems—entirely detached and taking
practically no part in running the war.” —Sir Alan Brooke
…… “If the unhelpful British attitude continues, then I
shall go home.” —General Dwight Eisenhower
Source: David Irving, The War Between the Generals: Inside the Allied High Command
P =
.0004*
[Residual]
*4/10,000 [.02 X .02]
The Black Swan:
The Impact of
the Highly
Improbable
Nassim Nicholas Taleb
1982 (-) =
200
Years (+)
1982/Default Latin
America =
years
200
[Total historical earnings]
The Black Swan: The Impact of the
Highly Improbable, Nassim Nicholas Taleb
This book
will (should!)
TP:
change
your life.
Siegfried and Roy =
1,000X
[gambling variability]
The Black Swan: The Impact of the
Highly Improbable, Nassim Nicholas Taleb
10/50/50*
*10 days in 50 years = 50% returns
The Black Swan: The Impact of the
Highly Improbable, Nassim Nicholas Taleb
Forget: Normal
Distributions,
Means + Medians +
Modes + Standard
Deviation
Banking:
3 = R.O.H.: 1982/Default Latin
America = Total historical earnings; 1992/S & L;
2002/dot.com
Las Vegas: Siegfried and Roy,
1,000X
plus a handful of others =
gambling variability
10
Wall Street: “In the last 50 years, the
most
extreme days in the financial markets represent
half of the returns. Ten days in 50 years.
Meanwhile, we are mired in chitchat.”
The Black Swan: The Impact of the
Highly Improbable, Nassim Nicholas Taleb
EXCELLENCE.
INNOVATE.
OR.
DIE.
More than $$$$
R&D
spending,
last 25 years?
BIG???
EXCELLENCE?
“I am often asked by would-be entrepreneurs
seeking escape from life within huge corporate
structures, ‘How do I build a small firm for
Buy
a very large one
and just wait.”
myself?’ The answer seems obvious:
—Paul Ormerod, Why Most Things Fail:
Evolution, Extinction and Economics
You don’t
get better
by being
bigger. You
Dick Kovacevich:
Scale?
“Microsoft’s Struggle With
Scale”
—Headline, FT, 09.2005
“Troubling
Exits at Microsoft”
—Cover Story, BW, 09.2005
“Too Big to Move Fast?”
—Headline, BW, 09.2005
“[Dell’s] predicament may be intractable. Dell
remained slavishly loyal to its core idea of ultra-efficient
supply-chain management and direct sales to customers, even
as rivals have stepped up their game. … Instead of adapting,
critics say, Dell cut costs in ways that compromised customer
service and, possibly, product quality.” —BW, 0904
“They’re a one-trick pony. It was a great trick
for over 10 years.” —tech exec/BW
“Dell’s culture is not inspirational or
aspirational. This is when they need to be imaginative, but
[Dell’s] culture only wants to talk about execution.” —Geoffrey
Moore
“There are some organizations where people
think they’re a hero if they invent a new thing.
Being a hero at Dell means saving money.”
—Kevin Rollins, CEO
“Despite a decade of
banking mergers, there is no
evidence that big banks are
any more efficient or
profitable than their smaller
rivals.” —Financial Times, 0329, on
possible Barclays-ABN Amro merger (“When it
comes to asking the stock market whether
bigger banks are better, the current answer is a
resounding ‘no.” —Citigroup analysis, 2006)
“The
frugal times
forced [BA] to
focus on being
profitable rather
than big.”
TP/Duh:
—Economist, 04.28.07
“Not a single company that
qualified as having made a
sustained transformation
ignited its leap with a big
acquisition or merger. Moreover,
comparison companies—those that failed to make a
leap or, if they did, failed to sustain it—often tried to
make themselves great with a
big acquisition or merger. They failed to grasp the
simple truth that while you can buy
your way to growth, you cannot buy your way to
greatness.” —Jim Collins/Time/2004
“When asked to name just one big
merger that had lived up to
expectations, Leon Cooperman,
former cochairman of Goldman Sachs’
Investment Policy Committee,
I’m sure there are
success stories out
there, but at this
moment I draw a blank.”
answered:
—Mark Sirower, The Synergy Trap
“MERGERS: Why Most Big
Deals Don’t Pay Off. A
BusinessWeek analysis
shows that 61% of buyers
destroyed shareholder
wealth.” —BusinessWeek
“Mergers and acquisitions get the headlines, but studies
show they often end up destroying shareholder value
instead of creating it. That’s one reason why organic
growth is so prized by corporations and investors. In fact,
if you compare the stock performance of a new index of
23 companies that are masters of organic growth to the
S&P500, the Organic Growth Index beat the S&P500
handily, 31% vs. 22% over the year ending January 2004.
And looking further back at a five-year period ending in
2002, the OGI walloped the S&P500, 25% vs. 3%.”
—Fortune.com/06.03.2004 (The OGI includes Wal*Mart, Sysco,
Harley-Davidson, Bed, Bath & Beyond, NVR)
“Almost every personal friend I have in the world
works on Wall Street. You can buy and sell the
same company six times and everybody makes
but I’m not sure
we’re actually
innovating. … Our challenge is to
money,
take nanotechnology into the future, to do
personalized medicine …” —Jeff Immelt/2005
Mission impossible?
$36B/’98
minus
$675M/‘07
Daimler.
And Dumb.
Both Start
with “d.”
“Marriage
in heaven”
—Daimler-
Benz and Chrysler exchange vows, circa 1998
(Jürgen Schrempp)
“the divorce on
earth”
—Daimler exec, circa 2007, on
probable Cerberus private equity purchase of
Chrysler from Daimler
“Schrempp is one of the last
dinosaurs of Germany Inc. He
represents a strategy of acquiring
assets and building empires that
just didn’t work.” —Arndt Ellinghorst, analyst,
Dresdner Kleinwort Wasserstein
“His bets went sour one by
one.” —WSJ on Jürgen Schrempp’s conglomeration (05.15.2007)
“Obviously, we overestimated the
potential for synergies.” —Dieter Zetsche,
CEO, Daimler
DaimlerChrysler/’98-’07:
Duh, Duh, Duh, Duh and … Duh
Manifold Synergies/No
Severe Scale limits/Yes
Culture clashes/Yes
Rushmorean ego issues/Yes
Customer acceptance /No
“Mr Zetsche, head of
Chrysler from 2000 to
2005, denied he should
take any responsibility for
the U.S. carmaker’s
troubles …”
—Financial Times /05.29.07
“Mr Zetsche, head of Chrysler from 2000
denied
any
to 2005,
take
he should
responsibility for the U.S.
carmaker’s troubles …” —Financial Times /05.29.07
Daimler.
And Dumb.
Both Start
with “d.”
$10,000,000/Day
the loss in value in
the 8 years of daimler
ownership of
chrysler has been
about ten million
dollars … per day.
NOTE:
big.
And bozo.
Both Start
with “b.”
“I am often asked by would-be entrepreneurs
seeking escape from life within huge corporate
structures, ‘How do I build a small firm for
Buy
a very large one
and just wait.”
myself?’ The answer seems obvious:
—Paul Ormerod, Why Most Things Fail:
Evolution, Extinction and Economics
You don’t
get better
by being
bigger. You
get worse.”
Dick Kovacevich:
cool. And
Connecticut.
Both Start
with “c.”
Basement
Systems
Inc.
*Basement Systems Inc./Larry Janesky
*
Dry Basement Science
(115,000!)
*2006:
$50,000,000+
“Conglomerates
don’t work.”
—James Surowiecki, The New Yorker
Did one of ’em ever turn to
the other and say: “Wow, I
wonder what unimaginable
new tools, otherwise not
possible, will be brought
forth for my daughter
Alice, age 17, because
of this deal?”
Did one of ’em ever turn to
the other and say: “Wow I
wonder what unimaginable
new tools, otherwise not
possible, will be quickly
brought forth for our
customers because of
this deal?”
“These days, everybody wants to merge. Too
often they’re just blindly gobbling up as many
players as they can, in the false belief that
bigger has to be better. It kind of makes you
wonder if merger-mania isn’t really ego-
mania. Or something even more destructive.
If you look at it objectively, most mergers do
not revitalize companies. Rather, they provide
short-term gains for a relatively small group
of people, usually Wall Street bankers and
lawyers.” —Lee Iacocca, Where Have All the Leaders Gone?
Spinoffs
systematically
perform better than IPOs … track
record, profits … “freed from
the confines of the parent
… more entrepreneurial,
more nimble”
—Jerry Knight/ Washington Post/ 08.05
Market Share, Anyone?
— 240 industries: Marketshare leader is ROA leader
29% of the time
— Profit /ROA leaders:
“aggressively weed
out customers who
generate low returns”
Source: Donald V. Potter, Wall Street Journal
“Acquisitions are about
buying market share. Our
challenge is to
create markets.
There is a big difference.”
—Peter Job, former CEO, Reuters
There’s “A”
and then
there’s “A.”
Winning the Merger Game
Is
Possible
--Lots of deals
--Little deals
--Friendly deals
--Stay close to core competence
--Strategy is easy to understand
Source: “The Mega-merger Mouse Trap”/Wall Street Journal/02.17.2004 /
David Harding & Sam Rovit, Bain & Co./re Comcast-Disney
TP on Acquisitions
1. Big + Big = Disaster. (Statistically.)
2. Big (GE, Cisco, Omnicom) acquires small/specialist
= Good … if you can retain Top Talent.
3. Odds on achieving “projected synergies” among
Mixed Big “cultures”: 10%.
4. Max Scale Advantages are achieved at a smaller size
than imagined.
5. Attacked by Big, Mediocre Medium marries Mediocre
Medium to “bulk up.” Result: Big Mediocrity …
or worse.
6. Increasingly, Alliances deliver more value than
mergers—and clearly abet flexibility.
Private Equity-financed
Firm, Best *Case
*Focus! Focus! Focus!
*In a [Big] hurry
*CEO/Top team, “skin
in the game”
*CEO, 100% of time
on the biz
*Merit! Merit!
*Motivated oversight
*Worst case: Rape & Pillage
The “New German
Miracle”* = The “Old
German Miracle” =
Mittlestand**
*Among other things, #1 in exports
**”No doubt of it, tom [BASF exec/04.07]
InnoTacs
“Acquisitions are about
buying market share. Our
challenge is to
create markets.
There is a big difference.”
—Peter Job, former CEO, Reuters
Characteristics of the “Also rans”*
“Minimize risk”
“Respect the chain
of command”
“Support the boss”
“Make budget”
*Fortune, article on “Most Admired Global Corporations”
“Companies have
defined so much
‘best practice’
that they are now
more or less
identical.”
—Jesper Kunde, Unique Now ... Or Never
“It is not the
strongest of the
species that survives,
nor the most
intelligent, but the
one most responsive
to change.”
—Charles Darwin
InnoTacs
revenue
matters
most
The Commerce Bank Model
“cost cutting
is a death
spiral.”
Source: Fans! Not customers. How Commerce Bank
Created a Super-growth Business in a No-growth Industry,
Vernon Hill & Bob Andelman
“Our whole
story is
growing
revenue.”
—Vernon Hill (Top-line driven; standard
is bottom-line driven by cost cutting)
The Commerce Bank Model
“over-invest in our
people, over-invest
in our facilities.”
Source: Fans! Not customers. How Commerce Bank
Created a Super-growth Business in a No-growth Industry,
Vernon Hill & Bob Andelman
C
*Chief
O*
Revenue
Officer
We become
who we hang
out with 1
Measure “Strangeness”/Portfolio Quality
Staff
Consultants
Vendors
Out-sourcing Partners (#, Quality)
Innovation Alliance Partners
Customers
Competitors (who we “benchmark” against)
Strategic Initiatives
Product Portfolio (LineEx v. Leap)
IS/IT Projects
HQ Location
Lunch Mates
Language
Board
“Future-defining
customers may account for
only 2% to 3% of your total,
CUSTOMERS:
but they represent a
crucial window on the
future.”
Adrian Slywotzky, Mercer Consultants
Axiom: Never use a vendor
who is not in the top
quartile (decile?) in
their industry on R&D
spending!*
*Inspired by Hummingbird
“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
COMPETITORS:
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
“How do dominant companies
lose their position? Two-
thirds of the time,
they pick the wrong
competitor to worry
about.”
—Don Listwin, CEO,
Openwave Systems/WSJ
Kodak …. Fuji
GM …. Ford
Ford …. GM
IBM …. Siemens, Fujitsu
Sears …. Kmart
Xerox …. Kodak, IBM
“Portfol-io
Thinking”
Big Idea/s
V.C.
G.M.
Portfolio
Roster
[Venture Capitalist]
[General Mgr/Pro Sports]
“Diverse groups of problem solvers—
groups of people with diverse tools—
consistently outperformed groups of the
best and the brightest. If I formed two
groups, one random (and therefore
diverse) and one consisting of the best
individual performers, the first group
almost always did better. …
Diversity trumped
ability.”
—Scott Page, The Difference: How
the Power of Diversity Creates Better Groups,
Firms, Schools, and Societies Diversity
Portfolios/Weirdness Index
V.C.
Micro-acquisitions
Wee J.V.s
Butterflies
Behavior Levers
“small wins”
Parallel Universe/s
Skunkworks
F.F.F.F.
B.F.A.
R.F.A.
f.r.a.
R.F.F.F.
F.F.F.R.
f.f.f.
Prototype Mania
Portfolios/Weirdness Index
V.C.
Micro-acquisitions
Wee J.V.s
Butterflies
Behavior Levers
“small wins”
Parallel Universe/s
Skunkworks
F.F.F.F. [Find a Fellow Freak Far away]
B.F.A. [bias for action]
R.F.A. [ready. Fire. aim,.]
f.r.a. [fire. Ready. Aim.]
R.F.F.F. [ready. Fire. Fire. Fire.]
F.F.F.R. [fire. Fire. Fire. Ready.]
f.f.f. [fail. Forward. Fast.]
Prototype Mania
The “Hang Out Axiom”: At
its core, every (!!!)
relationship-partnership
decision (employee,
vendor, customer, etc)
is a strategic decision
about:
“Innovate,
‘Yes’ or ‘No’ ”
Why Do I love Freaks?
(1) Because when Anything Interesting happens … it was
a freak who did it. (Period.)
(2) Freaks are fun. (Freaks are also a pain.) (Freaks are
never boring.)
(3) We need freaks. Especially in freaky times. (Hint:
These are freaky times, for you & me & the CIA & the
Army & Avon.)
(4) A critical mass of freaks-in-our-midst
automatically make us-who-are-not-so-freaky at least
somewhat more freaky. (Which is a Good Thing in freaky
times—see immediately above.)
(5) Freaks are the only (ONLY) ones who succeed—as in,
make it into the history books.
(6) Freaks keep us from falling into ruts. (If we listen to
them.) (We seldom listen to them.) (Which is why most
organizations are in ruts. Make that chasms.)
Get mad. Do
something
about it. Now.
“Dreaming,” necessary,
or not?
TP, personal: “dream” =
concrete, practical
imaginings about the
opposite of things that
piss me off (TP “advantages”: low
boiling point, long memory)
“I’ve
been thinking …”
Michael Porter:
“I’m mad as
hell, and I’m not
going to take it
anymore”
TP:
F(Anger/Passion)
>>>> f(Pushback
from Threatened
Fat-cats &
Bureau-crats)
Pissed Off*
*Innovation is Initiated by Irritation.
Re-imagining Results from Rage.
GSK: 7 “CEDDs” …
Centers of
Excellence for
Drug Discovery
“Normal” =
“o for 800”
“There’s nothing
worse
than being
ordinary”
—Mena Suvari/American Beauty
Semmelweis … Lister
ECS … SBA
Stokely … MLKjr
(TJP … RHWjr)
C
O*
*Chief freaks acquisition Officer
“You’re either
going to be a
millionaire or
going to jail.”
—Richard Branson’s Headmaster*
(* “He did both.”—New Yorker)
Innovation’s 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
Keep
Austin
Weird
We become
who we hang
out with
“The
Bottleneck Is at
the Top of the Bottle”
“Where are you likely to find people with the least diversity of
experience, the largest investment in the past, and the greatest
reverence for industry dogma:
At the top!”
— Gary Hamel/Harvard Business Review
futuremark
“To grow, companies need
to break out of a vicious
cycle of competitive
benchmarking and
imitation.”
—W. Chan Kim & Renée Mauborgne,
“Think for Yourself —Stop Copying a Rival,” Financial Times/2003
“How do dominant companies
lose their position? Two-
thirds of the time,
they pick the wrong
competitor to worry
about.”
—Don Listwin, CEO,
Openwave Systems/WSJ
Kodak …. Fuji
GM …. Ford
Ford …. GM
IBM …. Siemens, Fujitsu
Sears …. Kmart
Xerox …. Kodak, IBM
“Don’t
benchmark,
futuremark!”
Impetus: “The future is already here; it’s just
not evenly distributed” —William Gibson
Portfolio Thinking
G.M.
V.C.
M.B.S.A.
(Brand Yous)
(Wow Projects!)
(Demos. Heroes. Stories.)
We become
who we hang
out with 1A
The “Jay
Team” *
*Allen Puckett’s
“University
of Weird”
Tp “caves”
:
Thinkers/
“Thinkers Tank” …
not “Strategic
Planners”
(a little)
We become
who we hang
out with 2
“How do dominant companies
lose their position? Two-
thirds of the time,
they pick the wrong
competitor to worry
about.”
—Don Listwin, CEO,
Openwave Systems/WSJ
“Don’t
benchmark …
futuremark!”
Impetus: “The future is already here; it’s just
not evenly distributed” —William Gibson
We become
who we hang
out with 3
Whacky
WikiWo
rldWow
Wikinomics:
How Mass
Collaboration
Changes
Everything
—Don Tapscott & Anthony Williams
“The Billion-man
Research Team:
Companies offering
work to online
communities are
reaping the benefits of
‘crowdsourcing.’”
—Headline, FT, 0110.07
Wikinomics
WikiWorld
Weapons of Mass collaboration
CrowdSourcing
smart mobs
Linux
Human genome project
InnoCentive
YouTube
Second Life
Wikipedia
Myspace
Rob McEwen/CEO/
Goldcorp Inc./
Red Lake
gold
Source: Wikinomics: How Mass
Collaboration Changes Everything,
Don Tapscott & Anthony Williams
A New “C-Level?
C
W
*Chief WikiWorld Officer
O*
“There’s a fundamental
shift in power happening.
Everywhere, people are
getting together and,
using the Internet,
disrupting whatever
activities they’re involved
in.” —Pierre Omidyar, founder, eBay
Focus Groups:
No!
Continuing
Conversations:
Yes!
Planners
vs
Searchers
“Where planners
* raise high expectations
but take no responsibility for meeting them,
searchers prefer to work case-by-case,
using trial and error to tailor solutions to
individual problems, fully aware that most
remedies must be homegrown.” —WSJ, 0822.06 (on malaria
eradication,
and hedge fund manager Lance Laifer)
[*“Planners [WHO, World Bank, etc] see poverty as a
technical engineering problem that their
answers will solve.” —William Easterly]
“All sorts of approaches need to be
tried and we need feedback.” —Roger Bate
Find ’em!
“Somewhere in your
organization, groups of
people are already doing
things differently and better.
To create lasting change, find
these areas of positive
deviance and fan the flames.”
—Richard Pascale & Jerry Sternin,
“Your Company’s Secret Change Agents,” HBR
F(Anger/Passion)
>>>> f(Pushback
from Threatened
Fat-cats &
Bureau-crats)
“Some people look for
things that went wrong
and try to fix them. I
look for things that
went right, and try to
build off them.”
—Bob Stone (Mr ReGo)
Stories … Paint me a picture
… Story “infrastructure” …
Demos … Quick prototypes …
Experiments … Heroes …
Renegades … Skunkworks …
Demo Funds … V.C. … G.M. …
Roster … Portfolio … Stone’s
Rules … JKC’s Rules
Demos!
Heroes!
Stories!
The
“Sri Lanka
Stratagem”
Forward, march:
“Never doubt that a
small group of
committed people
can change the
world. Indeed it is
the only thing that
ever has.”
—Margaret Mead
Portfolio Thinking
G.M.
V.C.
M.B.S.A.
(Brand Yous)
(Wow Projects!)
(Demos. Heroes. Stories.)
Find ’em!
Innovation
“Tool”/“Source” # 1:
Pissed Off
Person/
People
A fury that
the future was always
being hijacked by people
with smaller ideas —by his
“What drove Trippe?
first partners who did not want to expand airmail
routes; by nations that protected flag carriers with
subsidies; by the elitists who regarded flight, like
luxury liners, as a privilege that could only be
enjoyed by the few; by the cartel operators who
rigged prices. The democratization he effected was
as real as Henry Ford’s.” —Harold Evans on Juan Trippe, the
PanAm boss who brought the B747 to life (WSJ/02.24.2005)
invite ’em!
“In the end, management
doesn’t change culture.
Management
invites
the workforce itself to
change the culture.”
—Lou Gerstner
“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
[Yet] I
came to see in my time at
IBM that culture isn’t just
one aspect of the game—
it is the game.” —Lou Gerstner,
of people is very, very hard.
Who Says Elephants Can’t Dance
“[Dell’s] predicament may be intractable. Dell remained
slavishly loyal to its core idea of ultra-efficient supply-chain
management and direct sales to customers, even as rivals
have stepped up their game. … Instead of adapting, critics
say, Dell cut costs in ways that compromised customer service
and, possibly, product quality.” —BW, 0904
“They’re a one-trick pony. It was a great trick for over 10
years.” —tech exec/BW
“Dell’s culture is not inspirational or
aspirational. This is when they need to be imaginative, but
[Dell’s] culture only wants to talk about execution.” —Geoffrey
Moore
“There are some organizations where people
think they’re a hero if they invent a new thing.
Being a hero at Dell means saving money.”
—Kevin Rollins, CEO
send ’em on
a quest!
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!
Organizing Genius / Warren Bennis
and Patricia Ward Biederman
“Groups become great only when
everyone in them, leaders and
members alike, is free to do his or
her absolute best.”
“The best thing a leader can do for a
Great Group is to allow its
members to discover their
greatness.”
Leadership’s Mt Everest/Mt Excellence
“free to do his or her
absolute best” …
“allow its members to
discover their
greatness.”
“The role of the Director is to create a
space where the actors and
become more
than they’ve ever been
before, more than
they’ve dreamed of
being.”
actresses can
—Robert Altman, Oscar acceptance speech
Where to look for “Playmates”:
F.F.F.F.
(Find a Fellow Freak Faraway)
Playmate!*
Playpen!
Prototype!
*Can be Client, supplier … as well as Insider
Demos!
Heroes!
Stories!
Women as
innovation
force!
“Women are
the majority
market”
—Fara Warner/The Power of the Purse
94%
of loans to …
women*
*Microlending; “Banker to the poor”; Grameen Bank;
Muhammad Yunus; 2006 Nobel Peace Prize winner
Women:
Principal
Change Agents/
Health, family
& Finance
“Women don’t buy
They
join them.”
brands.
EVEolution
Concoct a
Parallel
universe!
“Parallel
Universe” …
China!!!!!!!
“Venture”
fund: Gerstner/Amex,
Dow/Marriott, Grove/Intel,
Bedbury/Starbucks
“SkunkWorks”/ “ParallelUniverse”
“the
solution”
Source: Scott Bedbury (Others: 3M, Google, Shell, NAVFAC)
SkunkWorks/
“Skunks” (!!!)
“[CEO A.G.] Lafley has shifted
P&G’s focus on inventing all its
own products to developing
others’ inventions at least half
the time. One successful example
Mr. Clean Magic Eraser, based on
a product found in an Osaka
market.” —Fortune, 12.18.06
Build a “School on top of
a school” (The Parallel
Universe Strategy)
“Strategic Thrust Overlay”*
Sysco
Microsoft (I’net, Search)
GE (6-Sigma, Workout, etc.)
GSK (7 CEDDs)
Apple (Mac)
Hyundai (et al.) (Electronics, etc.)
*Different from Skunkworks
Multipliers:
Broken
Windows
Multipliers, science of/butterflies/Rat Psych 101:
Broken Windows/safe city
Small plates/empty shelves/remote parking lot/
distant food court/slow elevator
Geologists/geophysicists
Contiguous offices/Office layout-location power
casual gathering places
“renegade” buildings
“Hang out factor”/inno #1
“hero galleries”/great art
welcoming reception area (Insta-smell culture)
b.P.d. decals on glasses/12.31.06
beyond escape: Bike at the door/
Running shoes next to the bed
etc
etc
Speed/
Tempo/
is-it
FedEx
Economy”
“the
—headline/New York Times
Anything/
Anywhere/
Anytime
“Any3”:
Wal*Mart (!)
& Katrina
Power Tools
For Power
Strategies
Sysco!
Go for the Bold
* Bold/Aggressive/$$$$
* Bold/GameChanger
* Bold/Creative Destruction
* Bold/“Cool” Supplier Portfolio
* Bold/Web Fanaticism
“UPS used to be a trucking company
Now it’s
a technology
company with
trucks.”
with technology.
—Forbes
5% F500 have CIO
on Board: “While some of the
world’s most admired companies—Tesco,
Wal*Mart —are transforming the business
landscape by including technology experts on
their boards, the vast majority are missing out
on ways to boost productivity, competitiveness
and shareholder value.”
Source: Burson-Marsteller
Speed/
Tempo/
o.o.d.a.
loops
Messin’ with their
minds: He who has
the quickest
“O.O.D.A. Loops”*
wins!
*Observe. Orient. Decide. Act. /Col. John Boyd
“Blitzkrieg is far more than lightning thrusts that most
people think of when they hear the term; rather it was all
about high operational tempo and the rapid
exploitation of opportunity.” —Robert Coram, Boyd
“Re-arrange the mind of
the enemy”
“Float like a butterfly,
sting like a bee”
—T.E. Lawrence
—Ali
BOYD: The Fighter Pilot Who Changed
the Art of War (Robert Coram)
Try it. Try it. Try it
ry it. Try it. Screw
up. Try it. Try it. Try
t. Try it. Try it. Try
t. Try it. Screw it up
t. Try it. Try it. try
What makes
God laugh?
People
making
plans!
“We have a
‘strategic plan.’
It’s called doing
things.”
— Herb Kelleher
A man approached JP Morgan, held up an envelope, and said, “Sir, in
my hand I hold a guaranteed formula for success, which I will gladly
sell you for $25,000.”
“Sir,” JP Morgan replied, “I do not know what is in the envelope,
however if you show me, and I like it, I
give you my word as a gentleman that I will pay you what you ask.”
The man agreed to the terms, and handed over the envelope. JP
Morgan opened it, and extracted a single sheet of paper. He gave it
one look, a mere glance, then handed the piece of paper back to the
gent.
And paid him the
agreed upon $25,000.
1. Every morning, write
a list of the things
that need to be done
that day.
2.
Do them.
Source: Hugh MacLeod/tompeters.com/NPR
“This is so simple it sounds stupid, but it is amazing
how few oil people really understand that
you only find
oil if you drill
wells.
You may think you’re finding it
when you’re drawing maps and
studying logs, but you have to drill.”
Source: The Hunters, by John Masters, Canadian O & G wildcatter
“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
“Experiment
fearlessly”
Source: BW0821.06, Type A Organization Strategies/
“How to Hit a Moving Target”—Tactic #1
“We ground
up more pig
brains!”
The True Logic* of Decentralization:
6 divisions = 6 “tries”
6 divisions = 6 DIFFERENT leaders =
6 INDEPENDENT “tries” = Max
probability of “win”
6 divisions = 6 very DIFFERENT
leaders = 6 very INDEPENDENT
“tries” = Max probability of “far
out”/”3-sigma” “win”
*“Driver”: Law of Large #s
SERIOUS
PLAY
Culture of Prototyping
“Effective prototyping may
the most
valuable core
competence an
be
innovative organization can
hope to have.” —Michael Schrage
Think about It!?
Innovation =
Reaction to the
Prototype
Source: 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
“Learn not to
be careful.”
—Photographer Diane Arbus
to her students (Careful = The sidelines, from
Harriet Rubin in The Princessa)
“The key to a great
painting is the nerve,
after weeks of effort,
to ‘bet the painting’
on the next brush
stroke,”
Master musician, San Francisco
Screw.
things.
“FAIL, FAIL
AGAIN. FAIL
BETTER.”
—Samuel Beckett
“Fail .
Forward.
Fast.”
High Tech CEO, Pennsylvania
“Fail faster.
Succeed Sooner.”
David Kelley/IDEO
Sam’s
Secret
#1!
“Reward
excellent failures.
Punish mediocre
successes.”
Phil Daniels, Sydney exec
“If people tell me
they skied all day
and never fell
down, I tell them to
try a different
mountain.”
—Michael Bloomberg (BW/0625.07)
“In business, you reward
people for taking risks.
When it doesn’t work out
you promote them-because
they were willing to try new
things. If people tell me
they skied all day and never
fell down, I tell them to try
a different mountain.”
—Michael Bloomberg (BW/0625.07)
Read This!
Richard Farson & Ralph Keyes:
Whoever Makes
the Most Mistakes
Wins: The Paradox
of Innovation
“The Silicon Valley of
today is built less atop
the spires of earlier
triumphs than upon the
rubble of earlier
debacles.”—Newsweek/ Paul Saffo
“The secret of fast progress
is inefficiency, fast and
furious and numerous
failures.” --Kevin Kelly
try.
Miss.
READY.
FIRE!
“We are in a
brawl with no rules.”
Paul Allaire/Xerox:
TP:
“There’s
[literally]
only one
Screw
Around Vigorously!
possible answer …
RAF
RFA
RFFFA RFFFA … FFFFA
RAAAAAAAAAAA …
IID DSS*
INID DSS**
*If In Doubt … Do Some S$%^ (stuff)
**If Not In Doubt … Do Some S%*&
Life 101: A 40-year Reflection
Go on offense.
Give everybody a shot.
Decentralize.
Try a bunch of stuff.
Make it up as you go along.
Get some stuff wrong.
Laugh a lot.
Get some stuff right.
Become a “success.”
Extract “lessons learned” or “best practices.”
Thicken the Book of Rules for Success.
Become evermore serious.
Enforce the rules to increasingly tight tolerances.
Go on defense.
Install walls.
Protect-at-all-costs today’s franchise.
Centralize.
Calcify.
Install taller walls.
Write more rules.
Become irrelevant and-or die.
No try.
No deal.
“You miss
100% of
the shots you
never take.”
—Wayne Gretzky
“Intelligent people
can always come up
with intelligent
reasons to do
nothing.”
—Scott Simon
“Andrew Higgins , who built landing craft in
WWII, refused to hire graduates of
He believed
that they only teach
you what you can’t do
in engineering school. He
engineering schools.
started off with 20 employees, and by the
middle of the war had 30,000 working for
him. He turned out 20,000 landing craft.
D.D. Eisenhower told me, ‘Andrew Higgins
won the war for us. He did it without
engineers.’ ”
—Stephen Ambrose/Fast Company
Try.
Try.
Try.
Try.
try.
Try.
Try.
Try.
Try.
try.
Try.
Try.
Try.
Try.
try.
Try.
Try.
Try.
Try.
try.
Try.
Try.
Try.
Try.
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”
Innovation:
mad. Start Doing
something
about it. Now.
Get
Focus.
“We will not, I
repeat not, pretend
to be ‘all things to
all people.’”
—CEO, Investec (03.06)
“Miss Anthony has
one idea and she has
no patience with
anyone who has
two.”
—ECS*
*TP: Why SBA is on the coin?
Ready. Fire! Fire! Aim.
“The Milken model, in a nutshell, is to
stimulate research by drastically cutting
the waiting time for grant money, to
flood the field with fast cash, to fund
therapy-driven ideas rather than basic
science, to hold researchers he funds
accountable for results, and to demand
collaboration across disciplines and
among institutions, private industry,
and academia.” —Fortune/The Business,
“The Man Who Changed Medicine”
The Benefits of … “FOCUSED EXCELLENCE”
Shouldice/Hernia Repair:
1% recurrence.
Avg: 90 min, 10%-15%
30 min,
recurrence.
Source: Complications, Atul Gawande
#1/Quality =
More
procedures
[Main Line Lankenau]
Source: “In Health Care, Cost Isn’t Proof of High Quality,”
NYT, 0614.07 (PA data, 60 hospitals, bypass surgery)
“All Strategy Is Local:
True competitive advantages
are harder to find and maintain
than people realize. The
Focus:
odds are best in
tightly drawn markets,
not big, sprawling
ones”
—Title/ Bruce Greenwald & Judd Kahn/HBR09.05
Private Equity-financed
Firm, Best *Case
*Focus! Focus! Focus!
*In a [Big] hurry
*CEO/Top team, “skin
in the game”
*CEO, 100% of time
on the biz
*Merit! Merit!
*Motivated oversight
*Worst case: Rape & Pillage
The “New German
Miracle”* = The “Old
German Miracle” =
Mittlestand**
*Among other things, #1 in exports
**”No doubt of it, tom [BASF exec/04.07]
Conscious
measurement
Innovation Index: How many
of your Top 5 Strategic
Initiatives/Key Projects score
8 or higher [out of 10] on a
“Weird”/ “Profound”/
“Wow”/“Game- changer”
Scale?
personal
Buy a
Mirror!
Step #1:
“The First step in a
‘dramatic’
‘organizational change
program’ is obvious—
dramatic personal
change!” —RG
“To change minds
effectively, leaders make
particular use of two
stories that
they tell and the lives
tools: the
that they lead.”
Changing Minds
—Howard Gardner,
“Work
on me
first.”
—Kerry Patterson,
Joseph Grenny, Ron McMillan and Al Switzler/Crucial Conversations
“How can a high-level leader like _____ be so
out of touch with the truth about himself? It’s
more common than you would imagine. In fact,
the higher up the ladder a leader climbs, the less
accurate his self-assessment is likely to be. The
problem is an acute lack of feedback [especially
on people issues].”
—Daniel Goleman (et al.), The New Leaders
Inno64:
Innovation
Strategies
& Tactics
Parallel universe /Exec Ed v res MBA
End run regnant powers/JKC
Find done deals-practicing mavericks/Stone-ReGo
Bell curves2016 in 2006
Non-industry benchmarking
Everything = Portfolio
V.C.s all!
Hot language/Wow-Astonish me-Insanely
great-immortal-Make something great
Lead customers/PW-Embraer
Lead suppliers /Top decile R&D
Weird alliances
Mottos/Paul Arden (“Whatever You Think
Think the Opposite”)
Hire freaks/Enough weird people?
Weird Boards!!!
CEO track record of Innovation (nobody
starts at 45! Or 35!)
System/GE-Immelt
“Strategic thrust overlay”
Calendar
Big Delta easier than Small
MBWA with freaks-weirdos/JKC
MBWA/Boonies’ labs
V.C.-formal/Intel
Acquire weird
Children’s crusade
Old farts crusade
Go Global at any size
Stop listening to customers
Talent!/Unusual sources-Hire innovators-V.C.s
Eschew giant mergers
Remember: scale economies max out early
Assisted suicide! (“Built to last” = Chimerasnare-delusion)
Burn your press clippings
“Forgetting” “strategy”
Fire all strategic planners
Tempo!
Final product bears little relation to starting
notion
Design! Design! Design! (“culture,” not
program)
All innovation: Pissed-off people
Gut feel rules!
Focus groups suck
Weird focus groups okay
Be-Do philosophy
Celebrations
Culture-little as well as big Inno (“everyonean-innovator”)
Life = Wow Projects
Acknowledge messiness-pursue serendipity
(Blitzkrieg-Containers-Science-Jim
Utterback)
R.F.A.
Culture of execution
4/40: decentralization, execution,
accountability, 615AM
EVP (S.O.U.B.)/Systems-process “un-design”
Diversity for diversity’s sake
Women-Women-Women/customers (they
“are the market,” not a “segment”)-leaders
Boomers-Geezers (“all the money”)
CRO (Chief Revenue Officer) “culture”/topline obsessed
CIO (Chief INNOVATION Officer)
Laughter
Facility-space configuration
Experiments-prototypes
“Reward excellent failures. Punish mediocre
successes.”
Bizarrely high incentives (& penalties)
We are what we eat/We are who we hang out
with (E.g.: Staff-Consultants-Vendors-Out-sourcing
Partners/#, Quality-Innovation Alliance PartnersCustomers-Competitors/who we “benchmark” against
-Strategic Initiatives -Product Portfolio/LineEx v. LeapIS/IT Projects-HQ Location-Lunch Mates-LanguageBoard)
What “We” Know “For Sure” About Innovation
Big mergers [by & large] don’t work
Scale is over-rated
Strategic planning is the last refuge of scoundrels
Focus groups are counter-productive
“Built to last” is a chimera (stupid)
Success kills
“Forgetting” is impossible
Re-imagine is a charming idea
“Orderly innovation process” is an oxymoronic phrase
(= Believed only by morons with ox-like brains)
“Tipping points” are easy to identify …
long after they will do you any good
“Facts” aren’t
All information making it to the top is filtered
to the point of danger and hilarity
“Success stories” are the illusions of egomaniacs (and “gurus”)
If you believe the memoirs of CEOs you should be institutionalized
“Herd behavior” (XYZ is “hot”) is ubiquitous
… and amusing
“Top teams” are “Dittoheads”
CEOs have little effect on performance
“Expert” prediction is rarely better than rolling the dice
Pause: Case
Study
Elizabeth Cady
Stanton, Women’s
Rights/suffrage,
relentlessness, and
the messy nature
of movements that
rock the world
“I have very serious
objections to being called
Henry. Why are the slaves nameless
unless they take that of their master? Simply
because they have no independent existence.
They are mere chattels, with no civil or social
rights. Even so with women. The custom of
calling women Mrs. John This and Mrs. Tom
That and colored men Sambo and Zip C___ is
founded on the principal that white men are
the lords of all. I cannot acknowledge this
principle as just; therefore I cannot bear the
name of another.” —Elizabeth Cady Stanton
Source: In Her Own Right: The Life of
Elizabeth Cady Stanton, Elisabeth Griffith
ECS: “She was defeated
again and again and
again, but she
continued the struggle
with passionate
impatience.”
Source: In Her Own Right: The Life of
Elizabeth Cady Stanton, Elisabeth Griffith
72 years,
1 month,
5 days
“She had survived her
husband, outlived most
of her enemies, and
exhausted her allies. Her
mind remained alert, her
mood optimistic, and her
manner combative.”
Source: “Self Sovereign 1889-1902,” In Her Own Right: The
Life of Elizabeth Cady Stanton, Elisabeth Griffith
(50 years down, 25 to go)
Survived.
outlived.
exhausted.
(husband)
(enemies)
(allies)
Optimistic.
combative.
Driven by anger!! (not “focus groups”)
Great “vision,” no “strategic plan”
Whoops: conflicting “vision/s”
Execution (& vision) (“Dreamers with deadlines”)
Opportunistic
Insane optimism
Failure after failure; disappointment after disappointment
(secret to staying power: Stay pissed off!!)
Plan B rules
Changing cadres
Opportunistic alliances (here today, gone tomorrow)
“The enemy of my enemy is my friend”
Creating events and groups to serve a momentary need
Warring leaders (Freud-Jung)
Petulance (human frailty amidst a Great Struggle)
Agile re goal w/o sacrificing Vision
Go underground for long stretches
Patience (72 years) & impatience
Relentless!!!!!!!!!!!!!!! (WSC: “Success stems from the ability
to go from failure without losing your enthusiasm”)
Hustle (Seneca Falls, ’48: 5 days)
Fits & starts
Traitors-deserters
Radicals (“good”—MLKjr)
Radicals (“disruptive”—Stokely)
Moderates
Mentors
Schisms
Setbacks (again & again & again—incl lost ground)
(“2-9” = Great record)
“Get off” on the “politics” (TP: “Life is politics—
the rest is details.”)
Managing the goal down to get to the doable (but not losing
sight of the main game in the process)
Small wins
“Externalities” (Civil War)
Small Band of Sisters (<10; Seneca Falls 1848)
Coherent, factual, emotional story
Story altered at the margin to attract specific adherents
Story tellers (superb, relentless public communicators)
Elizabeth Cady Stanton
(more or less) (circa 0331.2007)
Elizabeth Cady Stanton
(more or less) (circa 0331.2007)
Agility (Plan B)
Relentless
Resilient
Optimistic (Unreasonably so)
Pissed Off
“Visionary”
Try It. Try it. Try it. …
Action > Plans
Virus
Small Wins
Demos-Heroes-Stories
Wee Gestures of Decency-Thoughtfulness
Politics >> Science (Get over it!)
Think: R.O.I.R. (Networker)
Sales Rules!
Passion (incl. speaking skills)
Women (Lead Local Change Agents)
Women Leaders (Woman to Woman)
Success = 72.1.5 =
Elizabeth Cady Stanton (1815-1902),
Lucretia Mott, Martha Wright,
Mary Ann McClintock, Jane Hunt
(07.13.1848/Seneca falls ny)
+
72 years, 1 month, 5 days
(08.18.1920/nashville tn)
“CHANGE
MANAGEMENT.”
What “We” Know “For Sure” About Innovation
Big mergers [by & large] don’t work
Scale is over-rated
Strategic planning is the last refuge of scoundrels
Focus groups are counter-productive
“Built to last” is a chimera (stupid)
Success kills
“Forgetting” is impossible
Re-imagine is a charming idea
“Orderly innovation process” is an oxymoronic phrase
(= Believed only by morons with ox-like brains)
“Tipping points” are easy to identify …
long after they will do you any good
“Facts” aren’t
All information making it to the top is filtered
to the point of danger and hilarity
“Success stories” are the illusions of egomaniacs (and “gurus”)
If you believe the memoirs of CEOs you should be institutionalized
“Herd behavior” (XYZ is “hot”) is ubiquitous
… and amusing
“Top teams” are “Dittoheads”
CEOs have little effect on performance
“Expert” prediction is rarely better than rolling the dice
Tom’s “Change Rules”
Cause. (pissed off.)
Try it. (S.A.V.)
Fail. Forward. Fast.
Quests. Demos. Heroes. Stories.
Boonies. (Parallel universe.)
<12.
Just Say No: Normal.
Attitude>Ability.
Wow. “Insanely great.”
Sell! Sell! Sell!
Master politics!
Tom’s “Change Rules”
Cause. (Pissed off.)
RELENTLESS!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Try it. (S.A.V.) (r.f.a.) (hustle.)
project. Project. Project.
Wow! (hot language.)
fun. (growth opportunities.)
Sky-high aspirations.
Fail. Forward. Fast.
“SMALL WINS.” MOMENTUM. INEVITABILITY.
Quests. Demos. Heroes. Stories.
STATISTICAL INDEPENDENCE. (DIVERSITY.)
Boonies. (Parallel universe. Test stuff. Buy WeeCo)
V.C.: Roster = portfolio. everything = portfolio.
Roster = brand yous.
PARTNER WITH WIERDOS. (everywhere.)
Diversity @ top.
Buy a mirror.
FRUSTRATED “GODFATHER.”
<12.
ALREADY IN PLACE/find ’em.
JUST Say No: NORMAL.
wikiWorld.
Attitude > Ability.
Wow. “Insanely great.”
Sell! Sell! Sell! (master-appreciate politics) (r.o.i.r.)
“You miss
100% of
the shots you
never take.”
—Wayne Gretzky
End Pause
EXCELLENCE.
4/40.
(Decentralization/Execution/Accountability/6:15A.M.)
DECENTRALIZATION.
EXECUTION.
ACCOUTABILITY.
6:15A.M.
De-central-iza-tion!
“‘Decentralization’
is not a piece of
paper. It’s not me.
It’s either in your
heart, or not.”
—Brian Joffe/BIDvest
“If if feels
painful and
scary—that’s
real delegation”
—Caspian Woods, small biz owner
The True Logic* of Decentralization:
6 divisions = 6 “tries”
6 divisions = 6 DIFFERENT leaders =
6 INDEPENDENT “tries” = Max
probability of “win”
6 divisions = 6 very DIFFERENT
leaders = 6 very INDEPENDENT
“tries” = Max probability of “far
out”/”3-sigma” “win”
*“Driver”: Law of Large #s
“Best practice” =
ZERO Standard
Deviation
Enemy
#1
I.C.D.
Inherent/Inevitable/
Immutable Centralist Drift
Note 1:
Note 2: Jim Burke’s 1-word vocabulary: “No.”
No problems =
No progress.
[Period.]
Decentralization
vs Centralization
= “That’s All
There Is” (from childrearing
101 to the Federalist Papers to Org.2007)
The Earls & Dukes vs King
John (The Magna Carta)
The Continental Congress
vs the Constitution
Jefferson vs Adams
Sloan vs Ford
GE vs All comers
HP vs HP
Peters vs Hammer
Mintzberg vs Porter
Ex-ecu-tion!
“Execution is
the job of the
business
leader.”
—Larry Bossidy & Ram
Charan/ Execution: The Discipline of Getting Things Done
“Execution is a
systematic
process
of rigorously
discussing hows and whats, tenaciously
following through, and ensuring
accountability.”
—Larry Bossidy & Ram Charan/ Execution:
The Discipline of Getting Things Done
(1) sum of Projects =
Goal (“Vision”)
(2) sum of Milestones =
project
(3) rapid Review +
Truth-telling =
accountability
“Costco figured out
the big, simple things
and executed with
total fanaticism.”
—Charles Munger, Berkshire Hathaway
.0004*
*4/10,000
“Never forget
implementation , boys.
In our work, it’s what I
call the ‘last 98
percent’ of the client
puzzle.”
—Al McDonald, former Managing
Director, McKinsey & Co, to a project team that included TP
“Recently I asked three corporate
executives what decisions they had made
in the last year that would not have been
made were it not for their corporate plans.
All had difficulty identifying one such
decision. Since all of the plans are marked
‘secret’ or ‘confidential,’ I asked them
how their competitors might benefit
from possession of their plans. Each
answered with embarrassment that
their competitors would not
benefit.” —Russell Ackoff (from Henry Mintzberg,
The Rise and Fall of Strategic Planning)
Ac-counta-bil-ity!
30%
MH: 80%
CF:
(no salesfolk)
(salesfolk)
“Monkeys
can’t live in
midair!”
—Bob Townsend
“GE has set a standard
of candor. … There is no
puffery. … There isn’t
an ounce of denial in
the place.”
—Kevin Sharer, CEO Amgen,
on the “GE mystique” (Fortune)
Walter Reed
SECDEF
6:15A.M.
“But it’s
only
2am!”
“Where are you going? … But it’s
only 2am. … You see, you can live
your life at 120 miles an hour, and
that’s pretty impressive. But it’s
not good enough. Unless you live
at 150 miles an hour, the world
will pass you by,” HRH Prince Alwaleed*
*1 day: 573 people met separately, 200 phone calls, 100 text messages, etc
Source: “Prince Alwaleed, Inside the private world of the Middle East’s
most powerful investor” cover story, The Business, 0519.07
DECENTRALIZATION.
EXECUTION.
ACCOUTABILITY.
2a.m.
*Planetree! Commerce! Cirque!
(Pianos! Dog biscuits!)
*Jerry Garcia … or bust (“only ones
who do what we do,” “insanely
great,” “radically thrilling,”
“gaspworthy.”)
*Think/Obsess Wegmans! (Staff: #1;
the Manager’s Handbook of
Decencies; “Kindness is free.”)
*Leaders serve. (Leader as host.)
*”Wow” is free, too.
*Hire nut cases (the “O for 800” rule
holds for DDB)
Pause:
“The Rules”
Tom Peters’ X25*
EXCELLENCE.
ALWAYS.
The rules.
*In Search of Excellence 1982-2007
“It”
Cause
Space
(worthy of commitment)
(room for/encouragement
for initiative)
Decency
(respect, humane)
It+
Cause
Space
(worthy of commitment)
(room for/encouragement
for initiative-adventures)
Decency
(respect, grace,
integrity, humane)
service
(worthy of our clients’ & extended
family’s continuing custom)
excellence
(period)
Cause
Space
Decency
service
(worthy of commitment)
(room for/encouragement for initiative-adventures)
(respect, grace, integrity, humane)
(worthy of our clients’ & extended
family’s continuing custom)
excellence
servant leadership
(period)
Cause
Space
Decency
service
excellence
servant leadership
Alt. “It.”
Hire Great People
(Resilient, Passionate)
Try a Lot of Stuff
(S.A.V./R.F.A.)
all “wow” all the time
Enjoy It While It Lasts
The Rules.
pursue a mission that rocks the world
Moldy basements)
(Pharmaceuticals,
Hire awesome/weird People for 100% of jobs (Resilient, Passionate)
(Wegmans) (Women RULE!)
give ’em lots of room to experiment, fail, grow
make “respect” “decency” “integrity” our watchwords
try a Lot of Stuff, fast tempo (S.A.V./Screw Around Vigorously,
R.F.A./Ready. Fire. Aim.)
Emphasize revenue
(Organic growth, Sales/“Top line” rules)
have fun/exude joy
demand excellence/Make accountability instinctive
(“Insane” standards for our mates’ and community’s sake)
never, never forget the “it”
(It’s the PRODUCT, Stupid.) (25!)
be “of [‘gaspworthy’] service”
(Cirque du Soleil is our
standard— “even” in finance.) (My customer is my partner.)
(Remember “She”; remember “Me.”) (“Servant”/“Host” Leadership)
Have effective/imaginative/minimalist infrastructure
(K.I.S.S./Keep It Simple, Stupid) (Systems/No bull: beauty, grace, elegance)
re-imagine as “routine”
enjoy It While It Lasts
”
pursue a mission that rocks the world (Pharmaceuticals, Moldy basements)
Hire awesome/weird People for 100% of jobs (Resilient, Passionate) (Wegmans)
give ’em lots of room to experiment, fail, grow
make “respect” “decency” “integrity” our watchwords
Leaders “Serve.” (“Servant”/“Host” Leadership)
try a Lot of Stuff, fast tempo (S.A.V./Screw Around Vigorously,
R.F.A./Ready. Fire. Aim.)
Emphasize revenue (Organic growth, Sales/“Top line” rules)
have fun/exude joy
demand excellence/Make accountability instinctive
(“Insane” standards for our mates’ and community’s sake)
It’s all about Women!
never, never forget the “it” (It’s the PRODUCT, Stupid.)
25! (Go, Howard!) (Conrad says, “Don’t for the shower curtain.)
be “of [‘gaspworthy’] service” (Cirque du Soleil is our standard—”even” in finance.)
(My customer is my partner.) (Remember “She”; remember “Me.”)
Create effective/imaginative/minimalist infrastructure
(K.I.S.S./Keep It Simple, Stupid; RED BUTTON on the terminal)
re-imagine as “routine” (Forget > Remember)
enjoy It While It Lasts
End Pause:
“The Rules”
Excellence: The SE22:
ORIGINS OF
SUSTAINABLE
ENTREPRENEURSHIP
SE22/Origins of Sustainable Entrepreneurship
1. Genetically disposed to Innovations that upset apple carts (3M, Apple,
FedEx, Virgin, BMW, Sony, Nike, Schwab, Starbucks, Oracle, Sun,
Fox, Stanford University, MIT)
2. Perpetually determined to outdo oneself, even to
the detriment of today’s $$$ winners (Apple, Cirque du Soleil, Nokia, FedEx)
3. Treat History as the Enemy (GE)
4. Love the Great Leap/Enjoy the Hunt (Apple, Oracle, Intel, Nokia, Sony)
5. Use “Strategic Thrust Overlays” to Attack Monster Problems (Sysco,
GSK, GE, Microsoft)
6. Establish a “Be on the COOL Team” Ethos. (Most PSFs, Microsoft)
7. Encourage Vigorous Dissent/Genetically “Noisy” (Intel, Apple,
Microsoft, CitiGroup, PepsiCo)
8.
“Culturally” as well as
organizationally Decentralized
(GE, J&J, Omnicom)
9. Multi-entrepreneurship/Many Independent-minded Stars (GE, PepsiCo)
HP’s Big “Duh”!
Decentralize ($90B)
Undo “Matrix”
Accountability
Source: “HP Says Goodbye To Drama”/
BW/09.05/re Mark Hurd’s first 5 months
30%
MH: 80%
CF:
(no salesfolk)
(salesfolk)
“No Need for Economies
of Scale: Illinois Tool Revs
Up Innovation by Keeping
Its 655 Units Separate
and Focused”
Source: Headline, BW, 1031.05 (“commodity” producer;
R&D = 1%; Top 100 patent recipient—66th in ’04) ($12B rev
in ’04; CEO David Speer: focus, lean, customer intimacy,
entrepreneurial, employee participation)
GSK: 7 “CEDDs” …
Centers of
Excellence for
Drug Discovery
DePuySpine/J&J*
70/3
game-changers!
*Still decentralized after all these years!
TP “Lessons Learned”
Innovation = DisDis
(Disciplined Disorganization)
Luck is a very good thing.* **
(*More “lessons” later: E.g., If you hire a bunch of disciplined weirdoes and
try a lot of weird stuff, the odds of getting lucky go up remarkably) (**Career
success depends on convincing others that you knew what the hell you
were doing all along. Good news: Say it long enough and you will believe it.
Great news: Keep saying it and you, too, can become a “guru.”)
SE22/Origins of Sustainable Entrepreneurship
10. Keep decentralizing—tireless in pursuit of wiping out
Centralizing Tendencies (J&J, Virgin)
11. Scour the world for Ingenious Alliance Partners—
especially exciting start-ups (Pfizer)
12. Acquire for Innovation, not Market Share (Cisco, GE)
13. Don’t overdo “pursuit of synergy” (GE, J&J, Time Warner)
14. Execution/Action Bias: Just do it … don’t obsess on
how it “fits the business model.” (3M, J & J)
15. Find and Encourage and Promote Strong-willed/
Hyper-smart/Independent people (GE, PepsiCo, Microsoft)
16. Support Internal Entrepreneurs (3M, Microsoft)
17. Ferret out Talent anywhere/“No limits” approach to
retaining top talent (Virgin, GE, PepsiCo)
SE22/Origins of Sustainable Entrepreneurship
18. Unmistakable Results & Accountability focus from
the get-go to the grave (GE, New York Yankees, PepsiCo)
19. Up
or Out (GE, McKinsey, big consultancies and law
firms and ad agencies and movie studios in general)
20. Competitive to a fault! (GE, New York Yankees, News
Corp/Fox, PepsiCo)
21. “Bi-polar” Top Team, with “Unglued” Innovator #1,
powerful Control Freak #2 (Oracle, Virgin) (Watch out when
#2 is missing: Enron)
22. Masters of Loose-Tight/Hard-nosed about a very few
Core Values, Open-minded about everything else
(Virgin)
“HOW THE COAST GUARD
GETS IT RIGHT”
—Headline, Time, 10.31.2005
*Autonomy
*Flexibility
*“Perhaps the most important
distinction of the Coast
Guard is that it trusts itself”
Itinerant.
Potential.
Machines.
TALENT POOL TO DIE FOR. Youthful.
Insanely energetic. Value creativity. Risk
taking is routine. Failing is normal … if
you’re stretching. Want to “make their
bones” in “the revolution.” Love the new
technologies. Well rewarded. Don’t plan
to be around 10 years from now.
TALENT POOL PLUS. Seek out and
work with “world’s best” as needed
(it’s often needed). “We aim to change
the world, and we need gifted
colleagues—who well may not be on
our payroll.”
BRASSY-BUT-GROUNDEDLEADERSHIP. Say “I don’t know”—and
then unleash the TALENT. Have a vision to
be DRAMATICALLY DIFFERENT—but don’t
expect the co. to be around forever. Will
scrap pet projects, and change course 180
degrees—and take a big write-off in the
process. NO REGRETS FROM SCREW-UPS
WHOSE TIME HAS NOT-YET-COME.
GREAT REGRETS AT TIME & $$$
WASTED ON “ME TOO” PRODUCTS
AND PROJECTS.
BRASSY-BUT-GROUNDED-LEADERSHIP.
(Cont.) “Visionary” leaders matched by leaders
with shrewd business sense: “HOW DO WE
TURN A PROFIT ON THIS GORGEOUS IDEA?”
Appreciate “market creation” as much as or
more than “market share growth.” ARE
INSANELY AWARE THAT MARKET LEADERS
ARE ALWAYS IN PRECARIOUS POSITIONS, AND
THAT MARKET SHARE WILL NOT PROTECT US,
IN TODAY’S VOLATILE WORLD, FROM THE NEXT
KILLER IDEA AND KILLER ENTREPRENEUR.
(Gates. Ellison. Venter. McNealy. Walton. Case.
Etc.)
ALLIANCE MANIACS. Don’t assume
that “the best resides within.” WORK
WITH A SHIFTING ARRAY OF STATEOF-THE-ART PARTNERS FROM ONE
END OF THE “SUPPLY CHAIN” TO
THE OTHER. Including vendors and
consultants and … who especially …
PIONEERING CUSTOMERS … will
“pull us into the future.”
TECHNOLOGY-NETWORK
FANATICS. Run the whole-damncompany, and relations with all outsiders,
on the Internet … at Internet speed.
Reluctant to work with those who don’t
share this (radical) vision.
“Crazy Times
Call for Crazy
Organizations”
—Subtitle, The Tom Peters Seminar (1993)
Pause …
Tom Peters’
Action
Chronicles.
EXCELLENCE.
ALWAYS.
Think-Do.ACTION.0329.2007
The (necessary)
war on linearity:
One engineer’s
(unusual)
life’s work.
tom peters
“Apparently our society,
not unlike the Greeks with
their Delphic oracles, takes
great comfort in believing
that very talented ‘seers’
removed from the hurlyburly world of reality can
tell foretell coming
events.” —Len Sayles/Columbia (from Henry
Mintzberg, The Rise and Fall of Strategic Planning)
“Nothing is more
dangerous in war
than theoreticians.”
—Marshall Petain (John Mosier, The Blitzkrieg Myth,
“War as Pseudoscience: 1920-1939”)
“This book is about luck disguised and
perceived as non-luck (that is, skills) and
more generally randomness disguised and
perceived as non-randomness. It manifests
itself in the shape of the lucky fool,
defined as a person who benefited from a
disproportionate share of luck but
attributed his success to some other,
generally precise reason.” —Fooled by
Randomness: The Hidden Role of Chance in Life and
the Markets, by Nassim Nicholas Taleb
EXCELLE
ALWAYS
End
Pause
EXCELLE
ALWAYS.
End.
PART TWO