TOM PETERS’
LESSONS IN
LEADERSHIP2000
1 FEBRUARY
ALBUQUERQUE
ALL SLIDES ARE AVAILABLE AT
tompeters.com
Seminar Y2K
Brand Everything:
Distinct or Extinct
Microsoft = R.O.W.
Microsoft > GM + Ford +
Boeing + Lockheed Martin +
Deere + Caterpillar + USX +
Weyerhauser + Union Pacific +
Kodak + Sears + Marriott +
Safeway + Kellogg
Source: Business Week data through 5-99
Microsoft = R.O.W. (II)
Microsoft > GM + Ford + Boeing + Lockheed
Martin + Deere + Caterpillar + USX + Weyerhauser + Union
Pacific + Kodak + Sears + Marriott + Safeway + Kellogg +
McDonald’s + Bank One + General
Mills + American Airlines + United
Airlines + + Delta Air Lines +
US Airways + Quaker Oats
Source: Yastrow Marketing (through 11-23-99)
No Wiggle Room!
“Incrementalism is
innovation’s worst
enemy.”
Nicholas Negroponte
Just Say No …
“I don’t intend to be
known as the
‘King of the Tinkerers.’ ”
CEO, large financial services company
(New York, 5-99)
Forces at Work
The Destruction
Imperative!
64/24
Forget > Learn
“The problem is never how
to get new, innovative
thoughts into your mind,
but how to get old
ones out.”
Dee Hock
“It is generally much
easier to kill an
organization than
change it
substantially.”
Kevin Kelly, Out of Control
Q: What do you do when
you are a big,
dopey company and out of
ideas?
A: You merge with
another big,
dopey company that
doesn’t
have any ideas either.
R: An incredibly big,
incredibly dopey
company
… going nowhere.
“When asked to name just one big
merger that had lived up to
expectations, Leon Cooperman,
former co-chairman of Goldman
Sachs’ Investment Policy Committee,
answered: ‘I’m sure there are success
stories out there, but at this moment I
draw a blank.’ ”
Mark Sirower, The Synergy Trap
“I feel betrayed. I bought stock in a
company that was going to change
the world. I didn’t buy a big, fat,
stupid conglomerate. And now
I’ve got one.”
Alan Towers, consultant, quoted in Business Week
[BW: “The irony is that AOL Time Warner is a vertically
integrated conglomerate. Not exactly the sort of nimble
competitor that will thrive in cyberspace.”]
“Acquisitions are about
buying market share.
Our challenge is to
create markets. There
is a big difference.”
— Peter Job, CEO, Reuters
“We chose not to do a
discounted cash flow
analysis of their future
earnings. We wanted their
talent and we wanted
their intellectual
property.”
Art Reidel, CEO, Pharsight
“Our ideal acquisition is a small
startup that has a great
technology product on the
drawing board that is going to
come out in six to twelve months.
We buy the engineers and the
next generation product. …”
- John Chambers, Cisco Systems
Dept. Head = Sports GM
Dept. Head = V.C.
Silicon Valley Success Secrets
“Pursuit of risk”: 4 of 20 in V.C.
portfolio go bust; 6 lose money; 6
do okay; 3 do well; 1 hits the
jackpot
Source: The Economist
“R & D”
Intel’s venture fund:
275 investments, $3.5B
Source: Fast Company (12-99)
EcoNets/Internet Zaibatsus
“The model is about partial acquisitions
and ownerships that then form a whole.
Each part has to have value separately,
be able to raise capital separately, and
motivate employees separately.
Corporations of the past never had that.”
Flip Filipowski, divine interVentures (Red
Herring)
“The brick and mortars will die, no
matter what. … So you have to take
your best employees and best
businesses and spin them off and
just own 40 percent of everything
that’s left. Do that and you
survive.”
Flip Filipowski, divine interVentures
(Red Herring)
DYB.com*
*DestroyYourBusiness.com (GE)
“It used to be that the big
ate the small. Now the
fast eat the slow.”
Geoff Yang, IVP/ (Institutional
Venture Partners)
[E.g.: Craig Venter/
Celera Genomics]
The Gales of Creative Destruction
+29M = -44M + 73M
+4M = +4M - 0M
“But what if [former head of strategic planner at
Royal Dutch Shell] Arie de Geus is wrong in
suggesting, in The Living Company, that firms
should aspire to live forever? Greatness is
fleeting and, for corporations, it will become
ever more fleeting. The ultimate aim of a
business organization, an artist, an athlete or a
stockbroker may be to explode in a dramatic
frenzy of value creation during a short
space of time, rather than to live forever.”
Kjell Nordstrom and Jonas Ridderstrale,
Funky Business
“ALL OF THESE ‘CONVERSATIONS’ TODAY ABOUT
‘THE WEB’ WILL APPEAR SO BLOODY DAMN SILLY
AND PEDESTRIAN TEN … FIVE? … THREE?
… YEARS FROM NOW.”
Tom Peters (11-99)
P.S.: Read Ray Kurzweil’s The Age of Spiritual
Machines: When Computers Exceed Human
Intelligence
BW: “human brain has only a short time left as
the smartest thing on earth”/ “subjugate
humanity by 2050”
Health Forum Journal: “In one generation or
less, every element of health care, every
assumption, will be changed or gone.”/ “We are
not aging gracefully.”
Dr. George Poste, SKB:
500 molecular targets in ’95 to 70,000 in ’99/
35 compounds per year to2M
Wired [Feb 2000]
“Cyborg
1.0: Kevin
Warwick Outlines His Plan
to Become One with His
Computer”
“Medicine looks likely to
change more in the next 20
years than it has in the last
200.”
British Medical Journal (11-11-99)
[ TTTTTurbulent Times!
Top 3 Americans >
48 poorest nations
Source: Newsweek 12-99]
Brand Inside
PSF 1:
Brand Org!
108 X 5
vs.
8 X 1*
* 540 vs. 8
ERP, ECM, Web, Etc.
IT’S THE GIANT SUCKING
SOUND
OF SLACK BEING
EXTRACTED FROM
THE GLOBAL ECONOMY!
“The coefficient of friction
associated with the grunge
of business is amazing!”
Michael Schrage
Cemex and FDX!
CCC Information Services!
“Assetless
Company”
J.B.
RR on Sara Lee
“The most profitable
businesses in the future will act
as knowledge brokers, linking
insights into what’s available
with insights into the
customer’s individual needs
and preferences.”
“We want to be the
air traffic controllers
of electrons.”
Bob Nardelli,
GE Power Systems
The “&-!!+#$% in the middle”*
Jim Clark on Healtheon
* ’twixt docs, patients and providers;
$250B in waste; source: Michael Lewis,
The New New Thing
“Don’t own nothin’ if
you can help it. If you
can, rent your shoes.”
F.G.
R&D Outsourcing/ Big Pharma
3:1+ (70% now; 5% in 5 years)
1:2+ (5% now; 20% in 5 years)
Source: IN VIVO
PSF 1.0
Professional Service
Firm Conversion Kit /
Release 1.0
White Collar Revolution
(Finally!!)
90% … in 10 years!
PSFs ….. All!
Brand Yous … All!
WOW Projects … All!
PSF 1.0
Department Head
to …
Managing Partner,
HR [IS, etc.] Inc.
Credo
“WORK
WORTH
PAYING FOR”
“support function” / “cost
center” / “bureaucratic
drag”
or …
“Rock Stars of the ‘Age of
Talent’ ”
Why are there no
books on how to create
a “Cool, Rocking,
WOW-producing
Finance Department”?
“Real” PSF …
–Think Inc. (Mindset = Step No.1!)
–Clients rule!
–Engage Clients in deep dialog/
“Join us in an Adventure”/ Fire
duds!
–Work = WOW Projects (100%)
–Practice serial monogamy
–Think impact!/ Embrace politics!
–Master “the economics”!
“Real” PSF …
– WE HELP PEOPLE!
– Co-habit with the Client!
– Create a Culture of Urgency!
– Love thy Support Staff!
– You need a Methodology!
– Obsess on R&D!
– BECOME A “CONNOISSEUR
OF TALENT”!
Real PSF …
WE OWN THIS PLACE!
THIS IS COOL STUFF!
WE ARE THE WORLD!*
*Why no books on “Cool Finance Depts.”?
The “7Ps” of PSF 1.0
Projects!
Passion!
Provocation!
Partnership!
Politics!
Professionalism!
Performance!
C.I.O.
to
C.E.F.R.N.S.*
*Chief Evangelist For
Really Neat Stuff
[ Words to Live By …
“Hierarchy is an
organization with its face
toward the CEO and its ass
toward the customer.”
Kjell Nordstrom and Jonas Ridderstrale,
Funky Business]
Brand Inside
PSF 2:
Brand Work!
“Reward excellent
failures. Punish
mediocre
successes.”
Phil Daniels, Sydney exec
But Does It Matter????
“On time, on budget …
who cares?”
anon. seminar participant (4/99)
“You really got to me. So
many of our information technology
projects take on a life of their own,
and I know they’ll never end up as
more than ‘mediocre successes.’ ”
CEO, F100 financial
services company (10-98)
WOW Project Anatomy
I. Create!
II. Sell!
III. Implement!
IV. Exit!
I. Create!
Reframe!
THERE ARE NO “SMALL” PROJECTS!
Observe & Record!!
Head for the trenches!
You gotta love it!
Measure: WOW!, Beauty, Raving Fans,
Impact!
Build a no-baloney Business Plan
Create community. Now!
Obsess on … the End User. Now!
Reframers’ Rules:
Rule 1: Never accept an
assignment as given!
Rule 2: You’re never so powerful
as when you are “powerless”!
Rule 3: Every “small” project
contains the entire enterprise
DNA!
Measures
–WOW!
–Beauty!
–Raving Fans!
–Impact!
E.g.: WOW Scale
1. … Dull as dishwater
.
5. … Gets the job done
.
7. … “Good work!”
.
10. … A serious “Braggable”!
Kaiser: 4.15.29
Liberty Ship
2 years
240 days
9 hours
4 days, 15 hours, 29 minutes
“Every project we take
on starts with a question:
How can we do what’s
never been done
before?”
Stuart Hornery, CEO, Lend Lease
WOW Project “Acid Test”
Can you explain it with zest to your 14-year-old?
The “Alumni
Meeting” Test!
II. Sell!
Master “The Pitch”!
Build Buzz. Consciously.
Network maniacally!
Preach to the choir!
Forget your enemies. [Surround and
marginalize!]
Money kills!
SELL, SELL, SELL!
III. Implement!
- Live, eat, sleep … Quick Prototype
-Play!
- Keep on recruiting! (Sell!)
- Obsess on the End User Community! (Sell!)
- Become a Milestone Maniac! / a Timeline
Tyrant! / a List Freak! / find Ms. Last 2%!
- Appoint a Marketing Director!
- Keep the “WOW” front and center!
Culture of Prototyping
“Effective prototyping may be
the most valuable core
competence an innovative
organization can hope to
have.”
Michael Schrage
“You can’t be a serious innovator
unless and until you are ready,
willing and able to seriously play.
‘Serious play’ is not an oxymoron;
it is the essence of innovation.”
Michael Schrage, Serious Play
“I view models and
prototypes as the
battleground for thoughts
and behaviors.”
Michael Schrage
Think about It!?
Innovation = Reaction to
the Prototype
Michael Schrage
Prototyper’s Laws
Define a small, practical test of something on a
page or less of text. Now.
Gather “found” materials … on the [very] cheap.
Find a/one partner-“customer” who’ll provide a
test site.
Set a very tight deadline of about 5 days for the
next concrete step.
Conduct the test! Debrief A.S.A.P.
Set the next test date. Now. [No more than 5
days hence.]
Secret No. 1: Go horizontal: Find a
(one!) “line” ally in “the Boonies”
Secret No. 2: “Powerless” allies are
Cool!
Secret No. 3: Passion Rules!
Secret No. 4: Become a Prototyping
Maniac!
Secret No. 5: Embrace Politics /
“Community Organizing”!
K2K
IV. Exit!
“Sell out!” / Embrace “The Suits”!
Recruit a passionate
Ms./Mr. Follow-up!
Seed your freaks into the
mainstream!
Celebrate!
Exit!
SOOOO … HOW MANY OF
YOUR COLLEAGUES ARE
“BACK HOME” AT WORK ON
NO-BALONEY …
WOW* PROJECTS!
* WOW = Will be remembered fondly/
bragged about 5+ years from now
Epitaph from Hell …
Joe T. Jones
1942 - 2000
HE WOULDA DONE SOME
REALLY COOL STUFF
BUT …
HIS BOSS WOULDN’T LET HIM!
T.T.D.: Now!
– List all your projects.
– Carefully describe a “WOW Outcome”
for you and the Client.
– Score (!) all projects on WOW, Beauty,
Impact, Raving Fan-hood.
– Pick one project with a high combined
score.
– Draft a one-page New Description that
emphasizes WOW, Beauty, etc.
– Circulate and edit … for three days.
– Reduce to 5 bullet points.
The greatest danger
for most of us
is not that our aim is
too high
and we miss it,
but that it is
too low
and we reach it.
Michelangelo
Characteristics of the “Also Rans”
–“minimize risk”
–“respect the chain of command”
–“support the boss”
–“make budget”
Source: Fortune on “most admired
global corporations”
[We are not trying to “WOW you
up.”
We think you are/have WOW.
We are trying to give you
permission to be WOW.]
Seminar Y2K
MESSAGE: THE
WORK MATTERS!
1) Turn ignition key.
2) Shift into drive.
3) Press foot firmly on the
throat of mediocrity.
Source: Mercedes ad
Brand Inside
PSF 3:
Brand You!
“The fundamental unit of the new economy is not
the corporation, but the individual. Tasks aren’t
assigned and controlled through a stable chain of
command but are carried out autonomously by
independent contractors - e-lancers - who join
together in fluid and temporary networks to sell
goods and services. When the job is done, the
network dissolves and its members become
independent again, circulating through the
economy, seeking the next assignment.”
Thomas Malone and Robert Laubacher
DISTINCT … OR EXTINCT!
“If there is nothing very special about
your work, no matter how hard you
apply yourself, you won’t get noticed
and that increasingly means you won’t
get paid much, either.”
Michael Goldhaber, Wired
“If one quarter can’t make
the journey, that’s the way it
has to be.”
Carly Fiorina (1-00/Forbes)
Personal “Brand Equity” Eval
– My current Project is challenging me …
– New things I’ve learned in the last 90 days
include …
– My public “recognition program”
consists of …
– I am known for …
– Additions to my Rolodex include …
– My resume is discernibly different from last
year’s at this time …
Icon Woman …
–Totally turned on by her work!
–“It” matters / a WOW Project!
–“It” is … COOL!
–“It” is … BEAUTIFUL!
–She is … in your face!
–She is an … adventurer!
–She is … CEO of her own life!
Icon Woman …
– She is … at least … a little funky!
– Her curiosity is … insatiable!
– She thinks screwups are …
as normal as breathing!
– She hangs out with some …
seriously rad Dudes!
– She is not God. She is not Bionic
Woman. She is … determined to make a
damned difference!
“Well-behaved
women rarely
make history.”
Anita Borg,
Institute for Women and Technology
Icon Woman Meets the Web …
– submits resume on the Web
– recruited on the Web
– hired on the Web
– trained on the Web
– creates and conducts projects with
virtual teams on the Web
– manages project and client
follow-up on the Web
– manages career/reputation-building
on the Web
“The Brand Called URL”/
Nathan Shedroff, Vivid Studios
“24 X 7 storefront devoted
exclusively to The Brand Called You.”
NS
“Personal publicity represents the
next big paradigm shift on the Web.”
Jerry Yang, Yahoo!
R.D.A.
Rate: 15%?, 25%?
Formal “Investment Strategy”/
R.I.P.
R.I.P.
IS IT ... WOW!?
“There is an internal and an
external pressure to keep doing
the same thing. People liked it.
You got rewarded. So do it again!
The same only different. So it
becomes something you
have to fight.”
Michael Crichton
R.I.P.
10 … Major job change [new area of
concentration]; major offsite
educational investment; extensive
sabbatical [oddball learning
experience of > 2 months];
exceptional community project
[presidency of fundraising drive, run
for school board].
R.I.P.
5 ... Extensive course work in oddball
area of passionate interest; major offthe-job activity [community
involvement, learn to play the cello,
study Chinese].
1 … Company training, as directed.
R.I.P./Practical Step No. 1
Go some place totally
different for vacation!
R.I.P.
Use by yourself.
Use with your mates.
Use [quantitatively?] as a
measure of departmental/ P.S.F.
renewal.
Use in formal eval process.
[ Training Y2K
Anytime, anywhere!
Whatever!
Concocted by the
employee/
“Training Account”]
Assignment!
Construct a 1/8-page or
1/4-page ad for
Brand You … for the
Yellow Pages
[ How About It?
Replace your current
evaluation process with
Yellow Pages ads.]
Bill Parcells’ World/
Brand You World!
BLAME NOBODY!
EXPECT NOTHING!
DO SOMETHING!
Source: NY Post
It’s Attitude, Baby!
9-10, 4.23
10-1, 1.28
Seminar Y2K
Message:
Distinct … or
Extinct!
“Everything can be taken from
man but one thing: the last of
human freedoms - to choose
one’s own attitude in any set of
circumstances, to choose
one’s own way.”
Victor Frankl, Auschwitz survivor
2 folks in Hartford …
MY ONLY GOAL - AS
YOUR BOSS - IS TO
HELP YOU DECIDE
WHAT TO MAKE OF
YOUR LIFE!
There comes a time
in everyone’s life
when they realize
they work for a dead
guy.
FreeAgent.com [ad]
Brand Inside
PSF 4:
Brand Talent!
Issue Y2K
The Great War
for Talent!
“Develop people quickly and
effectively” … 5%
“Truly know who our strongest and
weakest performers are” … 17%
Source: War for Talent research/ McKinsey & Co.
“The leaders of Great
Groups love talent and know
where to find it.
They revel in the talent
of others.”
Warren Bennis & Patricia Ward Biederman
Alan Kay on
PARC’s Bob Taylor
“He was a
connoisseur of
talent.”
A Connoisseur of Talent …
– Spends time on Talent!
– Becomes a student of Talent!
– Puts Talent “on the agenda”!
– Practices D.I.Y.
– Uses Plain English! (If you want “sunny” … ask
for “sunny”!)
– Creates Workspaces that foster energy,
entrepreneurship and creativity!
– Recruits from oddball places! /
Recruits Oddballs!
“Our business needs a
massive transfusion of
talent. And talent, I believe,
is most likely to be found
among non-conformists,
dissenters and rebels.”
David Ogilvy
Axiom: Never hire
anyone without an
aberration in their
background. (Find the
One Ton Cookie Man!)
A Connoisseur of Talent …
– Recruits M.I. (Gardner: Logical-mathematical,
linguistic, artistic, musical, bodily-kinesthetic,
intrapersonal-self, intrapersonal-others)
–Recruits arts!
– Becomes de facto C.D.O. (Chief Diversity Officer)
– Turns the pay scale upside down! / Pays Talent!
– Rewards & Promotes all on Talent
Development Skills!
– Spouts the Gospel of Renewal! (R.D.A./ R.I.P.)
“Every school I visited
was participating in
the systematic
suppression of creative
genius.”
Gordon MacKenzie
“Where do good new ideas come from? ...
That’s simple! From differences.
Creativity comes from unlikely
juxtapositions. The best way to
maximize differences is to mix ages,
cultures and disciplines.”
Nicholas Negroponte
Attributes of Those Who “Made” the
10th Grade History Book
–Committed!
–Determined to make a difference!
–Focused!
–Passionate!
–Irrational about their life’s project!
–Ahead of their time/ Paradigm
busters!
–Impatient/ Action Obsessed!
Attributes of Those Who “Made” the
10th Grade History Book
–Made lots of people mad!
–Flouted the chain of command!
–Creative / Quirky / Peculiar!
–Rebels!
–Irreverent!
–Masters of improv / Thrive on chaos/
Exploit chaos!
Attributes of Those Who “Made” the
10th Grade History Book
–Forgiveness > Permission
–Bone honest!
–Flawed as the dickens!
– “In touch” with their followers’
aspirations
–Damn good at what they do!
“Conformity is the
enemy of freedom
and the jailer
of growth.”
J.F.K.
Just Say “No” to “Grout”!
Participant: “Don’t you need
‘grout’ between the tiles?”
“No!”
TP:
[med staff,
NFL Special Teams,waiters,
PFCs, cymbals player,
bit parts, waiters]
[ TP’s Ideal Job:
Head of Housekeeping!]
“The boundaries for
acceptable weirdness have
dramatically expanded.”
Michael Schrage
Yes!
Director of Bringing in
the Really Cool People
[ All You Need to Know?
Chief Evangelist For Really
Neat Stuff
Director Of Bringing In The
Really Cool People]
Talent War Y2K!
–All out!/ Time consuming!
–Never ending!/ Unwinnable!
–Includes everybody!/ Everybody’s
game! (“We’re all in sales.”)
–Expensive!
–Cool!/ WOW!/ Fun!/ Creative!
–Strategic!/ Core competence!
Talent = Brand
Brand Outside
=
Brand Inside
“Emotional values are replacing
physical attributes as the fundamental
market influence.”
“Only with a strong spirit at its
foundation can a company achieve
strong market position.”
Jesper Kunde, Corporate Religion
PSF Y2K Final Exam
–
–
–
–
–
–
–
–
Are you working with awesome/freaky peers?
Are you working with cool/pioneering Clients?
Are you a “player”?
Are you pushing the envelope and putting yourself at risk on
every project?
Are you doing WOW work?
Are you having fun?
Are a lotta “theys” mad at you?
Will you look back on “all this” as “the time of your life”?
Brand Outside
Context:
No “Commodities”!
In the Beginning …
“The audit has become a
commodity.”
Big 5 audit partner to TP
Quality Not Enough!
“Quality as defined by few defects
is becoming the price of entry for
automotive marketers rather than
a competitive advantage.”
J.D. Power
Quality Not Enough!
“While everything may be
better, it is also increasingly
the same.”
Paul Goldberger on retail, “The Sameness
of Things,” The New York Times
What’s Special?
“Customers will try ‘low cost
providers’ because the Majors
have not given them any clear
reason not to.”
Leading Insurance Industry
Analyst (10-98)
“We make over three new
product announcements a
day. Can you remember
them? Our customers
can’t!”
Carly Fiorina, HP
“The ‘surplus society’ has a surplus of
similar companies, employing similar
people, with similar educational
backgrounds, coming up with similar
ideas, producing similar things, with
similar prices, similar warranties and
similar quality.”
Kjell Nordstrom and Jonas Ridderstrale,
Funky Business
The “10X/10X”
Phenomenon
10 Times Better/
10 Times Less Different
TP’s Campaign Y2K
Just say [shout]
“No!”
to the “inevitable
commoditization” of
anything.
“When we did it ‘right’
it was still pretty
ordinary.”
Barry Gibbons on
“Nightmare No. 1”
Pretzel Crumb-less-ness Plus …
“The Ritz Carlton Experience
enlivens the senses, instills
well-being and fulfills even the
unexpressed wishes and needs
of the guest.”
from the Ritz Carlton Credo
“We want to create waves
of lust for our product.”
Andy Grove (on the Pentium
Processor)
“You do not merely want to
be the best of the best. You
want to be considered the
only ones who do what
you do.”
Jerry Garcia
Lust Hierarchy
Satisfy … Conform to
Requirements … Exceed
Expectations …
Delight! … WOW! … Lust! …
ONLY ONES WHO DO WHAT
WE DO!
New Customer Offering
at Virgin Must Be:
… of the best quality
… innovative
… provide good value for money
… challenge existing alternatives
… add a sense of fun or cheekiness
Source: Kjell Nordstrom and Jonas Ridderstrale, Funky
Business
“customer satisfaction”
to
“customer success”
Source: GE Power Systems
“We’re getting better at [Six
Sigma] every day. But we really
need to think about the customer’s
profitability. Are customers’
bottom lines really benefiting
from what we provide them?”
Bob Nardelli, GE Power Systems
Context: “No” to “inevitable
commoditization”
S1: Lead the Customer!
S2: Master E-Commerce!
S3: Women Rule! (and the elderly)
S4: Design Rules! (too)
S5: It’s the Experience!
Bottom Line: Glorious Age of the
BRAND!
Context: “No” to “inevitable
commoditization”
S1: Lead the Customer!
S2: Master E-Commerce!
S3: Women Rule! (and the elderly)
S4: Design Rules! (too)
S5: It’s the Experience!
Bottom Line: Glorious Age of the
BRAND!
Brand Outside
Strategy 1:
Lead the Customer!
“The customer is a rear view mirror,
not a guide to the future.”
George Colony, Forrester Research
“If you worship at the throne of the
voice of the customer, you’ll get only
incremental advances.”
Joseph Morone, President, Bentley College
Early Customer Rejection
Post-Its [12 years!]
Chrysler Minivans
VCRs
Fax machines
FedEx
CNN
Heart-assist pumps
Etc.
Source: Fortune
Good = Bad/ 1 of 30,000
“We are crazy. We should do
something when people say it is
If people say
something is ‘good’, it
means someone else is
already doing it.”
‘crazy.’
Hajime Mitarai, Canon
“Wealth in this new regime flows
directly from innovation, not
optimization. That is, wealth is not
gained by perfecting the known,
but by imperfectly seizing the
unknown.”
Kevin Kelly, New Rules for the New Economy
“The numbers [declining market
share] don’t lie. Detroit’s single
biggest failure has been its
unwillingness to innovate. It is less
risky to simply develop a new version
of an existing product than to pioneer
a new category.”
Alex Taylor (Fortune)
[ Again:
BRAND OUT = BRAND IN
HIRE DULL … GET DULL!]
Benchmarking, Perils of …
“The best swordsman in the world doesn’t need
to fear the second best swordsman in the
world; no, the person for him to be afraid of is
some ignorant antagonist who has never had a
sword in his hand before; he doesn’t do the
thing he ought to do, and so the expert isn’t
prepared for him; he does the thing he ought
not to do and often it catches the expert out
and ends him on the spot.”
Mark Twain
Lead customers!
K2K redux!
Amen!
“The Age of the
Never Satisfied
Customer”
Regis McKenna
Context: “No” to “inevitable
commoditization”
S1: Lead the Customer!
S2: Master E-Commerce!
S3: Women Rule! (and the elderly)
S4: Design Rules! (too)
S5: It’s the Experience!
Bottom Line: Glorious Age of the
BRAND!
Brand Outside
Strategy 2:
Master
E-Commerce!
$30,000,000. = ???
Dell’s Web sales …
daily
350,000 = ?????
New items going on sale at eBay …
daily (12-99)
2X = 100 days (Internet traffic)
2X = 9 months (network capacity)
Source: Red Herring (1-00)
Tomorrow Today: Cisco!
$7B of $10B
Save $500M (service and tech
support)
C.Sat e >> C.Sat H
Customer Engineer Chat
Rooms ($1B?)
And Larry?
Business 2.0: “20 Industries About To Be
Fossilized by The Net” (3-99)
Travel Agents ($2B now, $30B in 2003);
Apparel (1-21); Autos (4-213);
Home Electronics (1-21); Paper and
Office Supplies (1-65); Food (<1-54);
Utilities (7-170); Computing (20-400);
Newspapers ($5B of $19B classifieds)
Cherry Picking
Vertical Markets
Plasticsnet.com: $370B;
sellers pay $5K to $8K for
“storefront”; 5% to 10% cut
Hook: community services (database,
catalogs, forums, industry job bank,
etc.)
W.W. Grainger*
2X phone/fax
*$220B “MRO” market (per Business 2.0/02-00)
B2B
1999 – 2004: 50X
2004: $7.4 T
Source: GartnerGroup
(per Reuters 1-26-00)
Consumer [Health Care] Sovereignty!*
E.g.:
“Empowered consumers influenced by
medical advertising and educated by
information on the Internet are driving
demand for new vision correction
options.”
Start Up (10-99)
* “Take your White Coat and … ”
Welcome to
D.I.Y. Nation!
“Changes in business processes will
emphasize self service. Your costs as
a business go down and
perceived service
goes up because customers are
conducting it themselves.”
Ray Lane, Oracle
“Autoweb. Take the Wheel.”
Advertising Age
Shop in your
Underwear
Source: SM’d logo for www.ae.com
ae = American Eagle Outfitters
Psych 101:
Strongest Force on Earth?
My need to be in
perceived control of my
universe!
Anne Busquet/ American Express
Not: “Age of the Internet”
Is: “Age of Customer Control”
“IT enables total
transparency. People with
access to relevant information are
beginning to challenge any type of
authority. The stupid, loyal and
humble customer, patient, employee
or citizen is dead.”
Kjell Nordstrom and Jonas Ridderstrale,
Funky Business
Patricia Seybold’s “Basics”:
The E-Customer Bill of Rights
Don’t waste my time!
Remember who I am!
Make it easy for me to order and
procure service!
Customize your products and
services for me!
Source: customers.com
“Welcome
back, Tommy!”
“In the network economy, the
Website becomes the company’s
primary interface to the customer.
The user interface becomes the
marketing materials, store front,
store interior, sales staff and postsales support all rolled into one.”
Jakob Nielsen,
Designing Web Usability
Read This. No: INGEST This!
Jakob Nielsen
Designing Web Usability:
The Practice of Simplicity*
*www.useit.com
“Most companies would do more
business on the Internet if they
fired their entire marketing
department and replaced it with
people who could produce
interactive content that actually
made it easier for users to buy.”
Jakob Nielsen, Nielsen Norman Group
Red Herring (01/00)
75% of online
shoppers don’t
complete their
purchase!
Nielsen/Designing Web Usability
All Web projects are customerinterface projects!
Simplicity rules!
Make it easy for customers to
perform useful tasks!
Less “cool,” more useful!
Speed rules!
Link … madly!
Nielsen/ Continued
Must work … on a small screen!
Must work … w/o graphics loading!
“Scannability” rules! [Users pick out
key words.]
Navigation page: No scrolling!
Remember:
25% to 50% “successful use”
“When you click on Yahoo!
today you get the same
simple, nearly graphics-free
home page you would have
seen had you clicked three
years ago.”
Fortune, on Zod Nazem,
Yahoo! CTO
“Where does the Internet rank
in priority?
It’s No. 1, 2, 3,
and 4.”
Jack Welch
Web Strategy: GE Power Systems
“Launch and Learn”/
4 sites in 30 days
Goodhome.com /
10 weeks!
Change … Or Die!
“Most of the brick and mortars look at the
Internet as an add-on business … until
they get a major scare. Then they either
change or die. … You have to put all your
heart and soul in that direction, the way
Charles Schwab and Dell did.”
Flip Filipowski, divine interVentures (Red
Herring)
“I have this chance for …
changing the world.”
Marco Boerries, Sun, re StarOffice
(Business 2.0, 2-00)
There are 2 Kinds of …
Defense*
vs.
Offense**
*Fend off upstarts.
**Reinvent our marketspace!
Mags
Advertising Age
Business 2.0
Fast Company
Red Herring
Scientific American
Wired
Context: “No” to “inevitable
commoditization”
S1: Lead the Customer!
S2: Master E-Commerce!
S3: Women Rule! (and the elderly)
S4: Design Rules! (too)
S5: It’s the Experience!
Bottom Line: Glorious Age of the
BRAND!
Brand Outside
Strategy 3:
Women Rule!
?????????
Home Furnishings … 94%
Vacations … 92%
Houses … 91%
Bank Account … 89%
Health Care … 75%
Etc.
48% working wives > 50%
80% checks
61% bills
53% stock (mutual fund boom)
43% > $500K
95% financial decisions/
29% single handed
Women … 49% of Web users; 6
of 10 new users; 83% of wired
women are primary decision
makers for family healthcare,
finances, education.
Source: Business Week (11-99)
$3.3T + $1.5T = $4.8T*
* Larger than Japan!
Most Under-reported story!
9M*/20M+/$4T
[> Germany]
* 400K in ’72; 132% since ’92;
source: NFWBO, Cognetics
New golfers … 37%
Basketball … 13.5M
1 in 27 (’70) … 1 in 3 (’96)
1874?
1874 … Jock Strap
1977 … Jogbra
1977 ... 25K
1996 … 42
M
Yikes? Ho-hum?
1970 … 1%
2000 … 50%
OPPORTUNITY
NO. 1!*
[* No shit!]
Carol Gilligan/ In a Different Voice
Men: Get away from authority, family
Women: Connect
Men: Self-oriented
Women: Other-oriented
Men: Rights
Women: Responsibilities
FemaleThink/ Popcorn
“Men and women don’t think the same
way, don’t communicate the same way,
don’t buy for the same reasons. ...
“He simply wants the transaction to
take place. She’s interested in creating
a relationship. Every place women go,
they make connections.”
“Men seem like loose cannons. Men
always move faster through a store’s
aisles. Men spend less time looking. They
usually don’t like asking where things are.
You’ll see a man move impatiently
through a store to the section he wants,
pick something up, and then, almost
abruptly he’s ready to buy. … For a man,
ignoring the price tag is almost a
sign of virility.”
Paco Underhill, Why
We Buy* [*Buy this book!]
Women and Financial Advisors
Women want … a plan, to be
listened to, to be taken seriously,
to read about it, to think about it.
Women do not want … an
in-your-face sales pitch
Source: Kathleen Boyle, Wheat Boyle Butcher Singer
Women and Healthcare
Women are … more dissatisfied,
frustrated by the way they are treated
and spoken down to by physicians,
seek more information, are more pressed
for time … and make 75% of health care
decisions and control 2/3 of health care
$$$$ [and constitute 2/3 of health care
employees].
Source: Patricia Braus, Marketing Healthcare to Women
Marketing to Women: Help Them
Save Time!
80% … work
86% … cook
58% … run errands with kids
38% … take child to school
21% … go to the gym
21% … take outside classes
How Many Gigs You Got, Man?
“Hard to believe …
Different criteria … ”
“Every research study we’ve done
indicates that women really care
about the relationship with their
vendor.”
Robin Sternberg/ IBM
[“The Net hasn’t lived up to its
hype. It’s a distant, cold, alien,
threatening world called
‘cyberspace.’ The challenge is to
make the Net into something
intimate, warm, friendly, useful,
personal.”
Carly Fiorina, CEO, HP @ Comdex ’99]
Not!!
“Year of the
Woman”
Enterprise Reinvention!
Recruiting
Hiring/Rewarding/ Promoting
Structure
Processes
Measurement
Strategy
Culture
Vision
Leadership
THE BRAND ITSELF!
“What kind of car does
Mommy want?”
“I didn’t know
[company] were giving
company cars to
secretaries.”
Source: UK financial services CEO,
12/99
Not a Morality Play!
“It is critical that we all understand
that IBM is not marketing to women
entrepreneurs because it is the thing
to do, or even the right thing to do.
We are marketing to women
entrepreneurs because it is a huge
opportunity.”
Cherie Piebes
Top 25 Cos. For Executive Women/Working
Woman/1Y2K
Avon … Chas. Schwab … Scholastic …
Fannie Mae … Dayton Hudson …
Knight Ridder … Pitney Bowes …
Advantica … Gap … Nordstrom …
Sallie Mae … Gannett … Golden West …
Aetna … Mattel … IBM … SBC Comm. …
Merck … State Street Corp. …
Sara Lee … Prudential … Baxter … P&G …
WellPoint … Xerox
Speaking of
Enormous
[Missed] [Huge]
Opportunities ...
74M/ Front Edge:55
“At each stage of their lives, the needs
and desires of the baby boomers have
become the dominant concerns of
American business and popular culture. If
you can anticipate the movement of the
baby-boom generation’s life-span
migration, you can see the future.”
Ken Dychtwald, Age Wave
Aging/“Elderly”
2X growth rate
$$$$$$$$$$$$
“I’m in charge!”
“Experiences” vs. Products
Design revolution!
Good source: Ken Dychtwald,
Age Wave
Priorities: Aging/“Elderly”
Experiences …
Convenience … Comfort
… Access … Respect!
Context: “No” to “inevitable
commoditization”
S1: Lead the Customer!
S2: Master E-Commerce!
S3: Women Rule! (and the elderly)
S4: Design Rules! (too)
S5: It’s the Experience!
Bottom Line: Glorious Age of the
BRAND!
Brand Outside
Strategy 4:
Design Rules!
And Tomorrow …
“Fifteen years ago companies
competed on price. Now It’s
quality. Tomorrow
design.”
Robert Hayes
it’s
All Equal Except …
“At Sony we assume that all products of
our competitors have basically the same
technology, price, performance and
Design is the only thing
that differentiates one product
from another in the
marketplace.”
features.
Norio Ohga
“Design is treated like a
religion at BMW.”
Fortune (10/98)
Drop-dead Charm!
“The new Beetle fails at
most categories. The only
thing it doesn’t fail in is
drop-dead charm.”
Jerry Hirshberg, Nissan Design
International
Object of Desire!
“Every now and then, a design comes
along that radically changes the way we
think about a particular object. Case in
point: the iMac. Suddenly, a computer
is no longer an anonymous box. It is a
sculpture, an object of desire, something
that you look at.”
Katherine McCoy, Michael McCoy, Illinois Institute of
Technology
[ Design as Soul
“We don’t have a good language to talk
about this kind of thing. In most people’s
vocabularies, design means veneer. … But
to me, nothing could be further from the
meaning of design. Design is the
fundamental soul of a man-made creation
that ends up expressing itself in
successive outer layers of the product or
service.”
Steve Jobs]
Check Out the Language:
“Tomorrow it’s design …”
“Design is the only thing …”
“Design is … religion ...”
“Drop-dead charm …”
“Object of desire …”
“Soul …”
The I.D. [International Design] Forty*
Airstream … Alfred A. Knopf … Apple
Computer … Amazon.com …
Bloomberg … Caterpillar … CNN …
Disney … FedEx … Gillette … IBM …
Martha Stewart … New Balance …
Nickelodeon … Patagonia … The New
York Yankees … 3M … Etc.
* List No. 1, 1999
Unconventional
[Design] Messages
Not about ... “Lumpy Objects”!
Not about ... $79,000 objects
One-sixth Second per Item!
“During the 30 minutes you spend on
an average trip to the supermarket,
about 30,000 products vie to win your
attention and ultimately to make you
believe in their promise.”
Thomas Hine, The Total Package
[ Design Moments!
Shopping cart =
2X heavy items
Source: Wall Street Journal (11-24-99) ]
“Car designers need to create a
story. Every car provides an
opportunity to create an adventure.
…
“The Prowler makes you smile. Why?
Because it’s focused. It has a plot, a
reason for being, a passion.”
Freeman Thomas, co-designer VW Beetle; designer
Audi TT
Hmmmm(?): “Only” Words …
Story
Adventure
Smile
Focus
Plot
Passion
Message:
Services are Not Intangible!
You “give off” hundreds of
design cues … daily!
YOU ARE A DESIGNER!
Graceful language!
Susan Sargent Designs:
PLEASE COMPLAIN!
Thanks for your order!
We dearly want everything
to go p-e-r-f-e-c-t-l-y!
If the order was late. Or wrong.
Or if any of the goods are damaged in the
slightest.
Or if you’re just having a lousy day and
want to unload on someone …
Call our Customer Care Hotline!
Beauty Contest!
1. Pick one form/ document: invoice,
airbill, sick leave policy, returns claim
form.
2. Rate it on a 1 to 10 scale
(1 = Awful; 10 = Scintillating) on three
dimensions: Beauty, Grace, Clarity.
3. Repeat … every 15 days.
WEB Words: TP
NO CLUTTER!
No Clutter!
CNNSI.com developed an increasingly common
problem. In the midst of adding material, its design
went bad. CNNSI became so packed with links, new
sections and graphics that it actually became hard
to find something as basic as the score of last
night’s ballgame. Then it got worse. The team tried
to make new graphic elements eye-catching enough
to stand out from the site’s clutter. But the surfers
ignored them, thinking they were ads.”
Business Week [9-99]
Huge
Opportunities
[ That Damn Few Are Pursuing! ]
Women!
The rapidly aging population!
Design!
Context: “No” to “inevitable
commoditization”
S1: Lead the Customer!
S2: Master E-Commerce!
S3: Women Rule! (and the elderly)
S4: Design Rules! (too)
S5: It’s the Experience!
Bottom Line: Glorious Age of the
BRAND!
Brand Outside
Strategy 5:
It’s the Experience!
“Experiences are as
distinct from services as
services are from goods.”
Joseph Pine & James Gilmore, The
Experience Economy: Work Is Theater &
Every Business a Stage
“What’s the plot?”
Freeman Thomas, designer
“The [Starbucks] Fix” Is on …
“We have identified a ‘third
place.’ And I really believe that
sets us apart. The third place is
that place that’s not work or
home. It’s the place our
customers come for refuge.”
Nancy Orsolini, District Manager
Safe, On Time and …
“We defined personality as a
market niche. We seek to
amuse, to surprise, to
entertain.”
Herb Kelleher, Main Man,
LUV Airlines
Experience: “Rebel Lifestyle!”
“What we sell is the ability for a
43-year-old accountant to dress
in black leather, ride through
small towns and have people
be afraid of him.”
Harley exec, quoted in Results-based
Leadership
Mantra: “Any good can be
ing-ed”
the driving experience
the pumping experience
the sitting experience
the reading experience
the washing experience
the cooking experience
Joseph Pine & James Gilmore, The Experience
Economy: Work Is Theater & Every Business a Stage
“Cars are not simply to get you
from place to place. They ought to
be entertainment. We are sort of in
the entertainment business.”
J Mays, Ford
“This is the end of the pure
product era. For instance, car
makers are beginning to
understand that the car is a
platform for delivering services
that drive the customer
experience.”
Carly Fiorina, HP @ Comdex ’99
[Experiencing:
#1 Oxymoron:
Respect … from an Airline!
I can cope with delays. I cannot
cope with lies … especially Sins of
Omission.
IT IS DISRESPECTFUL TO ME AS A
HUMAN BEING!!]
Marketing Aesthetics
“managing aesthetics experiences” …
“aesthetics strategy” … “marketing of
sensory experiences that contribute to the
organization’s or brand’s identity” …
“mapping strategic vision to sensory
stimuli”
Source: Marketing Aesthetics, Bernd Schmitt &
Alexander Simonson
Look + Feel + Taste + Touch
+ Sound + Smell + Texture +
Color + Typeface + Etc. =
EXPERIENCE*
* Bernd Schmitt & Alexander Simonson,
Marketing Aesthetics
Context: “No” to “inevitable
commoditization”
S1: Lead the Customer!
S2: Master E-Commerce!
S3: Women Rule! (and the elderly)
S4: Design Rules! (too)
S5: It’s the Experience!
Bottom Line: Glorious Age of the
BRAND!
Brand Outside
BRAND POWER!
Brand?
Distinction
Excellence
Emotional “Signature”
Trustworthiness
Consistency
Shorthand
Brand It!
Now, More Than Ever!
“The increasing difficulty in
differentiating between products and
the speed with which competitors take
up innovations will assist in the rise
and rise of the brand.”
Gillian Law and Nick Grant,
Management [New Zealand]
No Room for Brands?
Nike
Saturn
CNN
America Online
Charles Schwab
Starbucks
The Gap
Intel
Etc.
Brand = Trust!
“Most buyers do not have a clue
whether anybody else makes a better
microprocessor, but ‘Intel Inside’ has
become a ‘trust mark’ - a trademark
that consumers put their faith in.”
The Economist
“Branding is not a problem if you have the
right mentality. You go to your team and
you pin up a $200 Swiss Army Watch.
Competing in the ridiculously crowded
sub-$200 watch market, they made it into
a brand name, named after the most
irrelevant and useless thing in history [the
Swiss Army]. And you say, ‘Gang, if they
can do it, we can do it.’ ”
Barry Gibbons
“Salt is salt is salt. Right? Not when it
blue box
comes in a
with a picture
of a little girl carrying an umbrella.
Morton International continues to
dominate the U.S. salt market even though
it charges more for a product that is
demonstrably the same as many other
products on the shelf.”
Tom Asaker, Humanfactor Marketing
Calling the
Corporate Shrink!
“Organizational
Psychotherapy”/
WHO WE ARE!
Scott Bedbury/ Nike, Starbucks
“A Great Brand taps into emotions. Emotions drive
most, if not all, of our decisions. A brand reaches
out with a powerful connecting experience. It’s
an emotional connecting point that transcends
the product.
“A Great Brand is a story that’s never completely told.
A brand is a metaphorical story that’s evolving all the
time. This connects with something very deep - a
fundamental appreciation of mythology. Stories
create the emotional context people need to locate
themselves in a larger experience.”
“Consumers don’t simply buy products,
they buy attitudes as well. When
confronted with proliferation and
diversity, choices become increasingly
informed by belief. [Consumers] want to
know who is behind the products that
they buy. They want to know the
company. They want to know what
you think.”
Jesper Kunde, Corporate Religion
“Corporate Religion is a completely new way
of thinking about companies. Today, the
product is still the main communication
highway in the company. When companies
make the shift to selling solutions, brands and
attitudes … communicating the company’s
attitudes and values becomes the
decisive parameter for success. It
demands that you find out who you are
as a company.”
Jesper Kunde, Corporate Religion
Brand = You Must Care!
“Success means never letting
the competition define you.
Instead you have to define
yourself based on a point of
view you care deeply about.”
Tom Chappell, Tom’s of Maine
[“Dare to be different. Make
people notice. The world is
brimming with new competitors
and look-alike products. How do
you stand out?”
James Daly, Editor, Business 2.0]
Brand = Special =
Passion =
Connection =
Caring*
* (Way) beyond “market research”
“We are in the twilight of a society based on data. As
information and intelligence become the domain of
computers, society will place more value on the one
human ability that cannot be automated: emotion.
Imagination, myth, ritual - the language of emotion will affect everything from our purchasing decisions
to how we work with others. Companies will
thrive on the basis of their stories and
myths. Companies will need to understand that their
products are less important than their stories.”
Rolf Jensen, Copenhagen Institute for Future Studies
“In the funky village, real
competition no longer revolves
around marketshare. We are
competing for attention –
mindshare and heartshare.”
Kjell Nordstrom and Jonas Ridderstrale,
Funky Business
The Ten Rules of Radical Marketing
CEO must “own” the marketing function!
Hyper-lean Mktg. Dept. (No filters!)
CEO hangs out with customers!
Love + Respect your customers!
Just Say No … to market research!
Hire only passionate missionaries!
Create a Community of users-customers!
Emphasize one-to-one marketing tools!
Celebrate craziness!
Be insanely True to the Brand!
Sam Hill & Glenn Rifkin, Radical Marketing
(e.g., Harley, Virgin, The Dead, HBS, NBA)
P.S.: All this applies to
the Finance Department*
*Now: Finance Inc.
T.T.D. #1:
“How can I know what I
think until I see what I say”*
Exercise : Write copy
for a bookmark! (Etc.)
*Graham Wallas, The Art of Thought
Brand Leadership
Lead Out Loud!
Live the Brand!
ENTHUSIASM RULES!*
“I am a dispenser
of enthusiasm.”
Ben Zander
*TP on Bob Nardelli/GE Power Systems
“Astonish me!” S.D.
“Build something great!” H.Y.
“Immortal!” D.O.
“Leadership is a
performance. You have to be
conscious of your behavior,
because everybody else is.”
Carly Fiorina
“If you want to be persuasive, you have to
generate a high level of energy. It’s energy
that makes you visible, that gives you
presence. I call it ‘performance energy,’
and it’s the basis of dynamic leadership.
There is nothing artificial about it. Performance
energy is an authentic part of who you are. You
just have to access it.”
Martha Burgess, Theater Techniques for Business
People
Ann R.’s Gospel
– Show up!
– Know your message!
–Put yourself at
risk!
BE ASHAMED TO DIE
UNTIL YOU HAVE
WON SOME VICTORY
FOR HUMANITY!
Horace Mann, founder, Antioch College
“It was much later that I realized
Dad’s secret. He gained respect by
giving it. He talked and listened to
the fourth-grade kids in Spring
Valley who shined shoes the same
way he talked and listened to a
bishop or a college president. He
was seriously interested in
who you were and what you
had to say.”
Sara Lawrence-Lightfoot, Respect
“If you ask me what I have
come to do in this world, I
who am an artist, I will
reply, I am here to live my
life out loud.”
Emile Zola
“I’d rather regret the
things I have done than
the things I have not.”
Lucille Ball
“If things seem under
control, you’re just
not going
fast enough.”
Mario Andretti
THE END