Tom Peters’ Seminar Y2K Leading Minds/IIR Istanbul 01 June 2000 Biases American Californian Silicon Valley Resident [29 years] An Age of Passion: 1 Year = 1.5 Wal*Marts 27.03.99: $167B 27.03.00: $555B P.S.: Wal*Mart = #8 in 2000 Pentium III 800MHz: $42,893.00/# Hermes Scarf: $1,964.29 Saving Private Ryan on DVD: $874.75 Mercedes-Benz: $18.98 Hot-rolled steel: $0.19 Source: Fortune (20.03.00) “Researchers say they have found a way to mate human cells with circuitry in a ‘bionic chip’ … The tiny device – smaller and thinner than a strand of hair – combines a healthy human cell with an electronic circuitry chip.” AP/AOL/02-00 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) “It means nothing less than the total reinvention of this company.” Jacques’ New New Ford Ford + MSN CarPoint Ford + Yahoo! Ford + Oracle Ford + HP/MCIWorldcom Etc. Etc. “There’s going to be a fundamental change in the global economy unlike anything we have had since the cavemen began bartering.” Arnold Baker, Chief Economist, Sandia National Laboratories “We are in a brawl with no rules.” Paul Allaire 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 Seminar Y2K Brand Everything: Distinct or Extinct! 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. “Acquisitions are about buying market share. Our challenge is to create markets. There is a big difference.” Peter Job, CEO, Reuters “Our ideal acquisition is a small startup that has a great technology product on the drawing board that is going to come out in six to twelve months. We buy the engineers and the next generation product. …” John Chambers, Cisco “Steve Ross had a wonderful philosophy: People get fired for not making mistakes.” Bob Pittman “R & D” Intel’s venture fund: 275 investments, $8B Source: Fast Company , eCompany Net World! Act now. Analyze later. Avram Miller C.E.O. to C.D.O. The Gales of Creative Destruction +29M = -44M + 73M +4M = +4M - 0M Brand Inside Brand Org! 108 X 5 vs. 8 X 1* * 540 vs. 8 And Now the Equivalent … White Collar Revolution! The Pincer 5 “Destructive” entrepreneurs/ Global Competition “White Collar Robots” THE INTERNET! [E.g.: GM + Ford + DaimlerChrysler] Global Outsourcing [E.g.: India, Mexico] Speed!! RR on “Assetless” [J.B.] Sara Lee “The most profitable businesses in the future will act as knowledge brokers, linking insights into what’s available with insights into the customer’s individual needs and preferences.” The “&-!!+#$% in the middle”* Jim Clark on Healtheon/WebMD * ’twixt docs, patients, insurers and providers; $275B of $400B in waste; source: Michael Lewis, The New New Thing [ Incidentally … CEO Jeff Arnold Age: 30 First Start-up: Age 24] “We want to be the air traffic controllers of electrons.” Bob Nardelli, GE Power Systems Buzzsaw.com Builders, Owners, Architects, Contractors, Suppliers $4T industry 5,300 commercial bldg. projects’ specs on-line; +70 per day 12/31/00 (per Newsweek 04.24.00) 75% of U.S. universities will have on-line offerings/ 5.8 million students “Unbundling” profs’ jobs (star lecturer, facilitator)/ Repackage “content” as multi-media “event” AAUP is angry! (Good news!) 355 studies: Equal results! (and one teachers union study that disagrees!) These are … L.A.D.T.I.R.S.* *Life-and-death-total-industry-reinventionstruggles Brand Inside Brand Work! So what will be the Basic Building Block of the New Org Unit? Why are there no books on how to create a “Cool, Rocking, WOW-producing Finance Department”? “support function” / “cost center” / “bureaucratic drag” or … “Rock Stars of the ‘Age of Talent’ ” PSF 1.0 Department Head to … Managing Partner, HR [IS, etc.] Inc. PSF 1.0 Professional Service Firm Conversion Kit / Release 1.0 The “7Ps” of PSF 1.0 Projects! Passion! Provocation! Partnership! Politics! Professionalism! Performance! “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) “Every project we take on starts with a question: How can we do what’s never been done before?” Stuart Hornery, CEO, Lend Lease 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 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 Epitaph from Hell … Joe T. Jones 1942 - 2000 HE WOULDA DONE SOME REALLY COOL STUFF BUT … HIS BOSS WOULDN’T LET HIM! Characteristics of the “Also Rans” “minimize risk” “respect the chain of command” “support the boss” “make budget” Source: Fortune on “most admired global corporations” (26/10/98) 1) Turn ignition key. 2) Shift into drive. 3) Press foot firmly on the throat of mediocrity. Source: Mercedes ad Brand Inside 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 Personal “Brand Equity” Evaluation – I am known for [2 to 3 things]; next year at this time I’ll also be known for [1 more thing]. – My current Project is challenging me … – New things I’ve learned in the last 90 days include … – My public “recognition program” consists of … – Additions to my Rolodex in the last 90 days 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 R.D.A. Rate: 15%?, 25%? Therefore: Formal “Investment Strategy”/R.I.P. Seminar Y2K/Brand Inside Message: Distinct … or Extinct! Brand Inside Brand Talent! “When land was the scarce resource, nations battled over it. The same is happening now for talented people.” Stan Davis & Christopher Meyer, futureWEALTH Issue Y2K The Great War for Talent! Alan Kay on PARC’s Bob Taylor “He was a connoisseur of talent.” Talent war, Web-speed! Every resume or employment question that comes to Lucent via the Web gets answered in 30 minutes or less. [24/7.] Red Herring [06.00], on Lucent Director of Recruitment Jim Baughman “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 What Do We Do With Him? “He grew his hair long, played guitar in a rock band, chased girls, got into trouble. At age 17 he was flogged by his house master, who described him as ‘the most difficult boy I’ve ever had to deal with.’ ” Elect Him Prime Minister! Tony Blair “Conformity is the enemy of freedom and the jailer of growth.” J.F.K. Talent = Brand Brand Outside Context: No “Commodities”! 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 “We make over three new product announcements a day. Can you remember them? Our customers can’t!” Carly Fiorina “The ‘surplus society’ has a surplus of similar companies, employing similar people, with similar educational backgrounds, coming up with similar ideas, producing similar things, with similar prices and similar quality.” Kjell Nordstrom and Jonas Ridderstrale, Funky Business The “10X/10X Phenomenon” 10 Times Better/ 10 Times Less Different “When we did it ‘right’ it was still pretty ordinary.” Barry Gibbons on “Nightmare No. 1” TP’s “Mega-marketing-trends” Rapidly aging population! Health fanaticism! Environmental concerns! Freaky independence! Women rule! Context: “No” to “inevitable commoditization” S1: Lead the Customer! S2: Master E-Commerce! S3: Think Global! S4: Women Rule! S5: Design Rules! (too) S6: It’s the Experience! Net: Glorious Age of the BRAND! Context: “No” to “inevitable commoditization” S1: Lead the Customer! S2: Master E-Commerce! S3: Think Global! S4: Women Rule! S5: Design Rules! (too) S6: It’s the Experience! Net: 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 “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 Amen! “The Age of the Never Satisfied Customer” Regis McKenna Context: “No” to “inevitable commoditization” S1: Lead the Customer! S2: Master E-Commerce! S3: Think Global! S4: Women Rule! (and the elderly) S5: Design Rules! (too) S6: It’s the Experience! Net: Glorious Age of the BRAND! Brand Outside Strategy 2: Use E-Commerce to Re-invent the Business! ???? $35,000,000. Dell’s Web sales … daily 2X = 100 days (Internet traffic) 2X = 9 months (network capacity) Source: Red Herring (1-00) Web World/05.00 1B pages/7B hotlinks/+1M per day “For the first time in history, people everywhere have access to the thoughts, products and writings of a large and growing percentage of the earth’s population.” The New Yorker/29.05.00 Tomorrow Today: Cisco! 90% of $14.4B Save $500M (service and tech support) C.Sat e >> C.Sat H Customer Engineer Chat Rooms ($1B?) B2B 1999 – 2004: 50X 2004: $7.4 T Source: GartnerGroup (per Reuters 26.01.00) GM/Ford/DaimlerChrysler (02-27) Covisint $240B (+$500B) I.P.O. B2B = No.1 CarStation (auto-body shops), ChemConnect (chemicals), Collabria (commercial printing), DigitalThink (corporate training), E-Steel (steel), Medibuy (medical supplies), Portera (knowledge workers), Etc., Etc., Etc., Etc. Goal? Drive profits to zero!* *Remember AMR and “dynamic pricing.” 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 Anne Busquet/ American Express Not: “Age of the Internet” Is: “Age of Customer Control” The Supply Side … The Age of the Choiceboard The War of the Choiceboards Source: Adrian Slywotzky, HBR 1-2/2000 [<1%] “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 “Even if executives of established businesses grasp the impact of new technologies … they still face a massive competitive disadvantage precisely because they are incumbents. … They do complex financial calculations and get bogged down in internal political debates. Insurgents have no such inhibitions.” Philip Evans & Thomas Wurster, Blown to Bits “ … if they set up a completely independent organization and let that organization attack the parent.” Clayton Christensen, The Innovator’s Dilemma “Where does the Internet rank in priority? It’s No. 1, 2, 3, and 4.” Jack Welch There are 2 Kinds of … Defense* vs. Offense** *Fend off upstarts. **Reinvent our marketspace! “Banking is necessary. Banks are not.” Dick Kovacevich, Norwest/ Wells No Room for “Competent”* Sorts Beer Wholesalers Personal Trainers [FitLinxx] Financial Planners Car Dealers * LVA, “M”VA … vs. HVA [Web-enhanced] Message: The “distributor” is dead. Long live the valueadded, knowledgeintensive “business partner.” Web Strategy: GE Power Systems “Launch and Learn” (4 sites in 30 days) “It’s better to be first with less than last with more. Success on the Web isn’t just about time to market, it’s also about ‘time to learning.’ ” Jeff Levy, eHatchery [He who has the quickest O.O.D.A. Loops* wins! *Observe. Orient. Decide. Act. / Col. John Boyd] Jargon Bath! Bureaucracy free … Systemically integrated … Internet intense … Knowledge based … Time and location free … “Instantly” responsive … Customer centric … Mass customization enabled. Translation … Bureaucracy free = Flat org, no B.S. Systemically integrated = Whole supply chain tightly wired/ friction free Internet intense = Do it all via the Web Knowledge based = Open access Time and location free = Whenever, wherever “Instantly” responsive = Speed demons Customer centric = Customer calls the shots Mass customization enabled = Every product and service rapidly tailored to client requirements Context: “No” to “inevitable commoditization” S1: Lead the Customer! S2: Master E-Commerce! S3: Think Global! S4: Women Rule! S5: Design Rules! (too) S6: It’s the Experience! Net: Glorious Age of the BRAND! Brand Outside Strategy 3: Think Global! Rule #1 There’s no such thing as “too small to be global.” Rule #2 If “it” is [truly] good … then it’s good enough for … THE WORLD. Rule # 3 When? Now. Rule #4 Hang out … vigorously! Rule #5 Latch onto a [modest-sized] partner … who loves/ “gets” you! Rule #6 Tailor!! [But don’t give away the store.] Rule #7 Quality Guru Phil Crosby [“Do it right the first time!”] notwithstanding, you’ll not [likely] “get it right the first time”! Context: “No” to “inevitable commoditization” S1: Lead the Customer! S2: Master E-Commerce! S3: Think Global! S4: Women Rule! S5: Design Rules! (too) S6: It’s the Experience! Net: Glorious Age of the BRAND! Brand Outside Strategy 4: Women Rule! ????????? Home Furnishings … 94% Vacations … 92% Houses … 91% Bank Account … 89% Health Care … 75% Etc. $3.3T + $1.5T = $4.8T* * Larger than Japan! Most Under-reported story! 9M*/28M(1 of 4)/$3.6T [> Germany] * 400K in ’72; 132% since ’92 Sources: NFWBO, Cognetics, Business Wire (06.03.00) 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) Yeow! 1970 … 1% 2000 … 50% OPPORTUNITY NO. 1! 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.” 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 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 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 Sternbergh/ IBM [ It’s Simple … Women are more thoughtful and more deliberate than men!] 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 Context: “No” to “inevitable commoditization” S1: Lead the Customer! S2: Master E-Commerce! S3: Think Global! S4: Women Rule! S5: Design Rules! (too) S6: It’s the Experience! Net: Glorious Age of the BRAND! Brand Outside Strategy 5: Design Rules! “Sometimes I have episodes of wild fury in rental cars. It’s not road rage. It’s more like design rage.” Susan Casey, www.ecompany.com 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 Ogha “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 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.” Steve Jobs Unconventional [Design] Messages Not about ... “Lumpy Objects”! Not about ... $79,000 objects Design = SIMPLICITY … HONESTY … ACCESSIBILITY … ENJOYMENT Jonathan Ive (iMac) Design = “There are three basic principles behind any welldesigned product: truth, humanity, and simplicity.” Sohrab Vossoughi, Ziba Design Clarity! Simplicity! Functionality! Focus! Beauty! Surprise! Quirkiness! Humane-ness! Context: “No” to “inevitable commoditization” S1: Lead the Customer! S2: Master E-Commerce! S3: Think Global! S4: Women Rule! S5: Design Rules! (too) S6: It’s the Experience! Net: Glorious Age of the BRAND! Brand Outside Strategy 6: 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 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 “What’s the plot?” Freeman Thomas, designer “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 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: Think Global! S4: Women Rule! S5: Design Rules! (too) S6: It’s the Experience! Net: Glorious Age of the BRAND! Brand Outside BRAND POWER! Brand Defined 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 “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 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 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 Companies will thrive on the basis of their stories and myths. Companies will need to understand that to how we work with others. their products are less important than their stories.” Rolf Jensen, Copenhagen Institute for Future Studies Rules of “Radical Marketing” Love + Respect Your Customers! Hire only Passionate Missionaries! Create a Community of Customers! Celebrate Craziness! Be insanely True to the Brand! Sam Hill & Glenn Rifkin, Radical Marketing (e.g., Harley, Virgin, The Dead, HBS, NBA) Context: “No” to “inevitable commoditization” S1: Lead the Customer! S2: Master E-Commerce! S3: Think Global! S4: Women Rule! S5: Design Rules! (too) S6: It’s the Experience! Net: Glorious Age of the BRAND! Brand Leadership Passion Rules! Brand Leadership! “A key – perhaps the key – to leadership is the effective communication of a story.” Howard Gardner Leading Minds: An Anatomy of Leadership “Leadership is a performance. You have to be conscious of your behavior, because everybody else is.” Carly Fiorina Brand Leadership: ENTHUSIASM RULES! “I am a dispenser of enthusiasm”/ Ben Zander “I don’t care how old you are. I focus on energy level.” David Beirne, VC/Headhunter, on Dotcom recruiting Talent “War,” Marketplace “War” “The successful company has to create an environment that imbues its employees with a sense of passion.” Joe Nocera, eCompany, on David Pottruck “The challenge for IBM, AT&T and other mainstream companies is to re-instill a sense of adventure in recruits.” Burke Stinson, AT&T [Message to NAPM: You are Re-invention Evangelists!] Ann Richards’ Dogma Show up! Know your message! PUT YOURSELF AT RISK EVERY DAY! (Personal) Accountability?! WHERE WERE YOU DURING THE GREAT ENTERPRISE REVOLUTION OF Y2K? “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 “If things seem under control, you’re just not going fast enough.” Mario Andretti