TOM PETERS’
LESSONS IN LEADERSHIP
Anchorage
16 May 2000

Defeated Before
The Starter’s Gun!
“Track 4: Managing
Organization Change (Helping
Tired and Overworked
Professionals with Today’s
Workplace Realities)”

1 Year = 1.5 Wal*Marts
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 (3.20.00)

“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!
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)

Welcome to the Land of the True Believers!
“We have the ability to turn the economy upside down, to enhance lives, and to drive civilization forward.”
Michael Saylor,
MicroStrategy

Jacques’ New New Ford
Ford + MSN CarPoint
Ford + Yahoo!
Ford + Oracle
Ford + HP/MCIWorldcom
Etc.
Etc.

“There is probably going to be more confusion in the business world in the next decade than there has been in any decade in history.”
Steve Case (2-00)

Paul Allaire

T.T.D.s
The next slide is the first of many
“T.T.D.” activities. I.e.: Things To Do.
These are by and large shorthand forms of training exercises I use.
Also: Most of these T.T.D. slides have accompanying Notes.
(See following slide.)
Tom Peters

T.T.D./True or False:
“incrementalism”
VERSUS
“innovation”?

Notes Page
• This is a daunting issue. There is no “right answer.” But it merits constant, conscious debate. Consider the value of incremental change. [Kaizen, etc.] And discuss whether or not this thwarts “BIG” initiatives aimed at wholesale reinvention.
• Also: Consider … “Can we do both?” [I’m not sure.] P.S.: This crucial issue holds for Finance
Departments as much as Product Divisions. And it holds for the smallest and newest of businesses! THIS DEBATE IS WORTH LOTS OF
TIME! KEEP IT PRACTICAL!

Part I: Forces @ Work
Part II: Brand Inside
Part III: Brand Outside
Part IV: Brand Leadership

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]

Forget > Learn
“The problem is never how to get new, innovative thoughts into your mind, but how to get old ones out.”
Dee Hock

“When asked to name just one big merger that had lived up to expectations, Leon Cooperman, former cochairman 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

“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

Dept. Head I = Sports G.M.
Dept. Head II = V.C.

G.M.
= The Recruitment and
Development of Top Talent.
[Period!]
V.C.
= Bets on “Talent.” Bets on Projects. [Period!]

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

“Steve Ross had a wonderful philosophy:
Bob Pittman

“R & D”
Intel’s venture fund:
275 investments, $8B
Source: Fast Company , eCompany

Net World!
Avram Miller

[ TP to Chain Owner …
“Do 5 deals before you go home!”]

T.T.D.
Evaluate your portfolio of projects [and people]: Are you placing enough interesting [long shot?] bets?

Notes Page
• Be brutally honest!
• Hint: This holds for you and me as individuals as well as for our unit.

“With the arrival of the Internet, corporate
control has completely disappeared. Business today is about all kinds of companies participating to make something happen. Nobody knows any more what the products will do and what the markets will be. Markets define themselves. You have to be able to react to them organically….
“Control is an illusion. I don’t think that it ever existed, but now even the illusion is gone.”
Avram Miller

C.E.O. to
C.D.O.

The Gales of Creative Destruction
+29M = -44M + 73M
+4M = +4M - 0M

Paradox Redux
Atlanta: +113,600 = #1 metro area
Layoffs [major]: BellSouth,
Lockheed, Coca-Cola

T.T.D.
How do you rate as a …

Notes Page
• So … what … exactly … are you doing to
DESTROY what you [and yours] are today? List every Project that aims to
ATTACK today’s “culture” and assumptions. Be specific!

vs.
* 540 vs. 8 (-98.5%)

And Now the Equivalent …

ERP, ASP, ECM, Web, Etc.
IT’S THE GIANT SUCKING
SOUND
OF SLACK BEING
EXTRACTED FROM
THE GLOBAL ECONOMY!

The Pincer 5
“Destructive” entrepreneurs/ Global
Competition
“White Collar Robots”
THE INTERNET!
[E.g.: GM + Ford + DaimlerChrysler]
Global Outsourcing
[E.g.: India, Mexico]
Speed!!

T.T.D.

Notes Page
• I admit that some say I’m over-the-top here. I honestly don’t think I am. Try and imagine your HR/Whatever Dept. fully automated with numerous tasks outsourced … to India or Ireland.

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.”

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]

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

And …

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 multimedia “event”
AAUP is angry! (Good news!)
355 studies: Equal results!
(and one teachers union study that disagrees!)

*Arizona Democratic primary, etc.

“The e-conomy is one of reintermediation, where new technologies make it possible to radically increase complexity and efficiency with the introduction of new marketplaces. In these markets, value chains constantly reorganize as the demands of the consumer and business change.”
Thomas Koulopoulos, Delphi Group

These are …
*Life-and-death-total-industry-reinventionstruggles

So what will be the Basic
Building Block of the
New Org?

PSF 1.0
Department Head to …
Managing Partner,
HR [IS, etc.] Inc.

“support function” / “cost center” / “bureaucratic drag” or …
“Rock Stars of the ‘Age of
Talent’ ”

[I.e.: Welcome to the Y2K
New Orleans Jazz and
Real Cool Purchasing
Dudes Festival!]

NAPM: Not “Purchasing”!
NAPM: Not “Supply Chain Mgt.”
NAPM =
*
T otal
E nterprise/
I ndustry
R einvention!

The “7Ps” of PSF 1.0
P rojects!
P assion!
P rovocation!
P artnership!
P olitics!
P rofessionalism!
P erformance!

T.T.D.
Use the prior slide as a checklist relative to every activity [project] your unit is working on.

C.I.O.
to
C.E.F.R.N.S.*

* C hief E vangelist F or
R eally N eat S tuff

Seminar Y2K/Brand Inside
Message:
Distinct … or
Extinct!

What Do I “Do” First?
*Thomas Watson

Culture Change is not “Corporate.”
Culture Change is not a “Program.”
Culture change does not take “Years.”
Culture Change does not start “Today.”
Culture Change starts Right Now!
Culture Change
Lives in the Moment!
Culture Change is
Entirely in Your Hands!

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
–
–
–
–

E.g.: WOW Scale
1. … Dull as dishwater
.
5. … Gets the job done
.
7. … “Good work!”
.
10. … A serious “Braggable”!

T.T.D.

Notes Page
• NO BALONEY:
THIS IS MY #1
GOAL FOR THE
WHOLE DAMN
SEMINAR
… THAT YOU [AND
YOURS] WILL MEASURE EVERY PROJECT
AGAINST MY FOUR KEY CRITERIA: WOW!,
BEAUTY, RAVING FANS, IMPACT.
• [P-L-E-A-S-E.]

[ Just Say “No” to …

WOW Project “Acid Test”

“Every project we take on starts with a question:
How can we do what’s never been done before?”
Stuart Hornery, CEO, Lend Lease

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

“I view models and prototypes as the battleground for thoughts and behaviors.”
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

T.T.D./ 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.]

Notes Page
• The idea is to establish a “rhythm of prototyping” that defines every project.

T.T.D./ Secret No. 1: Forget “selling up”!
Go horizontal: Find a (one!) “line” ally in “the Boonies”!
Secret No. 2: “Powerless” allies are
Cool!
Secret No. 3: Become a Prototyping
Maniac!
Secret No. 4: Embrace Politics /
“Community Organizing”!
Secret No. 5: Passion Rules! Get your story in shape!

Notes Page
• Main Idea: YOU ARE NOT “POWERLESS.” Seek out allies in strange places … and get going! DO
NOT WASTE TIME “SELLING UP.”
• Attitude: You are the Gandhi/King of your
“mission.”
• So: IDENTIFY THE FOLKS YOU WANT TO PLAY
WITH RE THAT INCREDIBLY COOL IDEA YOU
HAVE!

K2K!

Pause …

Mark McCormack:

ESP to TJP:

“It was much later that I realized Dad’s secret. He gained respect by giving it.
He talked and listened to the fourthgrade 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

“The deepest human need is the ...
William James

2 folks in Hartford …

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
NOBALONEY …
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 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

Notes Page

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” (10/26/98)

[We are not trying to “WOW you up.”
We think you are/have WOW.
We are trying to give you permission to be WOW.]

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 …

Ike’s World Book Page
And Yours?

T.T.D./Assignment
Construct a 1/8-page or
1/4-page ad for
Brand You … for the

Notes Page
. [“Yellow
Pages ads” are the centerpiece of our formal Brand You training programs.]

“You are the storyteller of your own life, and you can create your own legend or not.”
Isabel Allende

T.T.D.: How About It?
Replace your current evaluation process with
Yellow Pages ads.]

Notes Page
• NO BULL! Some of our Clients have gone this far. And report stunning results. If you can’t do this formally, try it informally.

They “Get it”?!
– stone mason
– electrician
– plumber
– tiler
– cabinet maker
– contractor
– blacksmith
– well driller
– blaster
– sheep shearer
– etc.

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!

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

Rate: 15%?, 25%?
Therefore: Formal “Investment
Strategy”/

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.

T.T.D./Your R.I.P.

Notes Page
• We think “R.I.P.s” are imperative! So … please take these two questions seriously and literally!

T.T.D./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.

Notes Page
• The whole idea is to make “R.I.P.s” a/the centerpiece – formally – of measuring unit
“freshness.” E.g.: SCORE EVERYONE’S
“R.I.P.” ON ITS BOLDNESS/WOW.

Net Result …
Say goodbye to “command and control.”
Say goodbye to hierarchy.
Say goodbye to “knowing one’s place.”

Women’s Stuff =
New Economy Match
Improv skills
Relationship-centric
Less “rank consciousness”
Self determined
Trust sensitive
Intuitive
Natural “empowerment freaks” [less threatened by strong people]
Intrinsic [motivation] > Extrinsic

“Boys are trained in a way that will make them irrelevant.”
Phil Slater

Seminar Y2K/Brand Inside
Message:
Distinct … or
Extinct!

Bill Parcels’ World/
Brand You World!
NY Post (9/99)

Issue Y2K

Jane Harper, Director of Internet
Technology and Operations, IBM

There is no “talent shortage” … if … you are a
*Great Place To Work

Alan Kay on
PARC’s Bob Taylor

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!

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

A Connoisseur of Talent …
– Recruits M.I. (Gardner: Logical-mathematical, linguistic, artistic, musical, bodily-kinesthetic, intrapersonal-self, interpersonal-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.)

T.T.D.
Use the two Connoisseur of
Talent slides as a guide for creating a Formal Talent
Development Plan

Notes Page
• Literally use the items on the two slides as a formal check list to measure yourself
[quantitatively] against.

The
…

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 10 th 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 10 th Grade
History Book
– Forgiveness > Permission
– Bone honest!
– Flawed as the dickens!
– “In touch” with their followers’ aspirations
– Damn good at what they do!

“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.’ ”

Solution?
Ritalin [“a chemical virtually identical to cocaine”/Reason magazine]
Or …

Elect Him Prime Minister
*talk/May 2000

Just Say “No” to “Grout”!
Participant : “Don’t you need
‘grout’ between the tiles?”
TP:
[med staff,
NFL Special Teams,waiters,
PFCs, cymbals player, bit parts, waiters]

TP’s Ideal Job:
Head of Housekeeping!

J.F.K.

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

T.T.D.

Seminar Y2K/Brand Inside
Message:
Distinct … or
Extinct!

No

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

“The ‘surplus society’ has a surplus of similar companies, employing similar people, with similar educational backgrounds, working in similar jobs, coming up with similar ideas, producing similar things, with similar prices and similar quality.”
Kjell Nordstrom and Jonas Ridderstrale,
Funky Business

10 Times Better/
10 Times Less Different

Barry Gibbons on

Pretzel Crumb-lessness 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

“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

Nirvana!
- Nordstrom
- Four Seasons
- Adirondack Guide Boat
- OXO Good Grips
- Ziplocs
- Power Point

Why?
Cool!/Surprising!
Reliable!
Friendly!/Comfortable!
Aesthetically pleasing!

Consider …

“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

[Old view: Out of service 9 days. 4 days are transport, which is client responsibility.
New view: ALL 9 DAYS ARE OUR
RESPONSIBILITY! Why? 9 days =
Client’s world.]
Source: Steve Kerr

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: Women Rule!
(and the elderly)
S4: Design Rules!
(too)
S5 : It’s the Experience!
Net: 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!
Net: Glorious Age of the BRAND!

1

“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

Good = Bad/ 1 of 30,000
“We are crazy. We should do something when people say it is
‘crazy.’ If people say something is ‘good’, it means someone else is already doing it.”
Hajime Mitarai, Canon

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

Amen!
Regis McKenna

T.T.D./Sooooo…
Are you pushing your customers? [Internal or external.] ARE YOU
ENGAGING THEM IN A
JOINT VENTURE-JOURNEY
INTO TOMORROWLAND?

Notes Page
• No bull: Evaluate EVERY Client
Relationship. Is EVERY CP/Client Project a
“test”? That is, an effort to explore
Uncomfortable-But-Important-Stuff?

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!
Net: Glorious Age of the BRAND!

2

2X = 100 days
(Internet traffic)
2X = 9 months
(network capacity)
Source: Red Herring (1-00)

Tomorrow Today: Cisco!
70% ($13B)
Save $500M+
(service and tech support)
C.Sat
>> C.Sat H
Customer Engineer
Chat Rooms
($1B+)

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.)

The Motley Fool Secret?
“Strangers helping strangers”
“Fools’ Logic,” IW

Message …

B2C Success
Source: Geoffrey Moore

1999 – 2004:
2004: $7.4
Source: GartnerGroup
(per Reuters 1-26-00)

GM/Ford/DaimlerChrysler (02-27)
Auto parts supply “Co.”
$240B (+$500B)
I.P.O.

W.W. Grainger*
*$220B “MRO” market (per Business 2.0/02-00)

*Remember AMR and “dynamic pricing.”

Paradox?
Community Services/V.A.
Waste Extraction

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

Source: SM’d logo for www.ae.com
ae = American Eagle Outfitters

Anne Busquet/ American Express
Not : “Age of the Internet”
Is:

Psych 101:
Strongest Force on Earth?

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

“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

“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)

T.T.D.: Message!

Notes Page
• READ JAKOB NIELSEN’S BOOK! Hold your site to the Exacting Nielsen
Standard! [Be ruthless … on yourself.]

“Where does the Internet rank in priority?
Jack Welch

There are 2 Kinds of …
Defense* vs.
Offense**
*Fend off upstarts.
** Reinvent our marketspace!

“ … if they set up a completely independent organization and let that organization attack the parent.”
Clayton Christensen,
The Innovator’s Dilemma

Room for “Competent”* Sorts
Beer Wholesalers
Personal Trainers [FitLinxx]
Financial Planners
Car Dealers
* LVA, “M”VA … vs.
HVA [Web-enhanced]

Web Strategy: GE Power Systems
(4 sites in 30 days)

Ross Perot, Wayne Calloway,
Harry Quadracci, et al.

He who has the quickest
O.O.D.A. Loops* wins!
*Observe. Orient. Decide. Act. /
Col. John Boyd ]

T.T.D.
Most important Y2K
question: Are you & yours “dealing with” the
Web … or “embracing it” as “central to our being”?

Notes Page
• SPEND A
OF TIME ON THIS
“TTD”!

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

Jack Welch/
GE Annual Report 2000

[ 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]

Getting Right Down to
Brass Tacks …
Bricks & Mortar?
Clicks & Mortar?
All Clicks All the time?

#1: ANY IDIOT WHO THINKS
CONSUMERS ARE GOING
TO GIVE UP THE
IN-STORE SHOPPING
EXPERIENCE FOR THE
INTERNET IS JUST THAT.
AN IDIOT.

#2: ANY IDIOT WHO THINKS
WE ARE STILL GOING TO
BE HANGING OUT IN
STORES 15 YEARS FROM
NOW IS JUST THAT.
AN IDIOT.

TP: ANY IDIOT WHO THINKS
THEY KNOW WHICH ONE
OF THE ABOVE TWO
STATEMENTS IS TRUE
IS THE BIGGEST IDIOT
OF ALL.

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!
Net: Glorious Age of the BRAND!

3

?????????
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!
* 400K in ’72; 132% since ’92
Sources: NFWBO, Cognetics, Business Wire (030600)

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)

New golfers … 37%
Basketball … 13.5M
1 in 27 (’70) … 1 in 3 (’96)

1874 … Jock Strap
1977 … Jogbra
1977 ... 25K
1996 … 42

Yeow!
1970 … 1%
50%

[* 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.”

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

E.g.: Quicken.com: gender-neutral
TheStreet.com: maleish (“aggressive, we-tell-you-what-tothink”)
MotleyFool.com: female-ish
(“inquisitive, open, supportive”)
WFN and MsMoney.com: female (e.g.: emphasize parenting and divorce issues)
Source: Red Herring, Kathleen Morris of WFN

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 Sternbergh/ IBM

Q: Why do guys like pagers?
A1: Sense of importance
[Pager Dude]
A2 : Cubicle Slaves’ replacement for “real guys” tool belts

Q: Why do women like pagers?
A: Get the news A.S.A.P. if her child is in the Nurse’s Office
Q:Why do women hate pagers?
A: They find nothing romantic about wearing a Stetson wrench or Stanley hammer attached to their waist! [Note the pager’s clip-on device … guys ]

T.T.D.

Notes Page
• Again:
• [It took me years to get a handle on “this stuff.”]

[ It’s Simple …

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

27 March 2000: email to TP from
Shelley Rae Norbeck
“I make 1/3 rd more money than my husband does. I have as much financial
‘pull’ in the relationship as he does. I’d say this is also true of most of my women friends. Someone should wake up, smell the coffee and kiss our asses long enough to sell us something! We have money to spend and nobody wants it!”

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

T.T.D.

Notes Page
• Discuss …

T.T.D.
What would it take to get you & yours to “Go For
It”?
First steps?

Notes Page
• What could you do – in the next 30 days – to begin to test these ideas? Define 10 actions!

“If we are single, they say we couldn’t catch a man. If we are married, they say we are neglecting him. If we are divorced, they say we couldn’t keep him.
If we are widowed, they say we killed him.”
Kathleen Brown, on the joys of female political candidacy

74/55
“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”
Good source: Ken Dychtwald,
Age Wave

Priorities: Aging/“Elderly”
Experiences …
Convenience … Comfort
… Access …

“Any student who combines an expertise in gerontology with, say, an
M.B.A. or law degree will have a license to print money.”
Newsweek

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!
Net: Glorious Age of the BRAND!

4

And Tomorrow …
“Fifteen years ago companies competed on price. Now It’s quality.
Robert Hayes

All Equal Except …
“At Sony we assume that all products of our competitors have basically the same technology, price, performance and features.
Design is the only thing that differentiates one product from another in the marketplace.”
Norio Ohga

“Design is treated like a religion at BMW.”
Fortune (10/98)

Drop-dead Charm!
fails at most categories. The only thing it doesn’t fail in is dropdead 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 manmade creation.”
Steve Jobs

Check Out the Language:
“Tomorrow it’s design …”
“Design is the only thing …”
“Design is … religion ...”
“Drop-dead charm …”
“Object of desire …”
“Fundamental soul …”

T.T.D.
Where do you stand on design?
[1 = Who, me? 10 = Preoccupation.]

Notes Page
• I’m at a bit of a loss here. I DON’T KNOW
HOW TO “MAKE YOU” “GET” THIS. I think it is of the Utmost Importance. I want you
– at least – to become “aware” of the
Power of Great Design. And … I do
[fervently] believe that Great-Design-Is-
Soul.

Think Back …
New Beetle, iMac =
Radical, “Bet the
Company”
Right?

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

“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

T.T.D./Message:
Services are Not Intangible!
You “give off” hundreds of design cues … daily!
YOU ARE A DESIGNER!

Notes Page
• List 100 [!] “design cues” that you give off! [Okay, start with 25.]

Graceful language!

T.T.D./“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.

Notes Page
• DO THIS! USE MY TERMS! [Beauty …
Grace … Clarity.] Be quantitative.
[PLEASE.]

Clarity!
Simplicity!
Functionality!
Focus!
Beauty!
Surprise!
Quirkiness!
Humane-ness!

Design = Everything!
Hence: Evaluate
Everything on These
Criteria!

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!
Net: Glorious Age of the BRAND!

5

Joseph Pine & James Gilmore, The
Experience Economy: Work Is Theatre &
Every Business a Stage

“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

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

Freeman Thomas, designer

T.T.D.
[your]

Notes Page
• WHAT IS YOUR STORY? [Be specific!]
Message: This applies to every [Finance] project!

The stock must have a great story!
The company must have a product that changes the way the world works!
Source: Technology Investor 05.00

Mantra: “Any good can be ing
ed” the driv ing experience the pump ing experience the sitt ing experience the read ing experience the wash ing experience the cook ing experience
Joseph Pine & James Gilmore, The Experience
Economy: Work Is Theatre & Every Business a Stage

[ NAPM: Think …
Supply Chain-
B2B-

“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

th

Health Care Tsunami
Prevention/Wellness/Fitness
Proactive Engineering/Gene
“stuff”[Blockbuster-Bazooka to
SpecificSniper’s Rifle]
Holistic/Homeopathic/Non-traditional
Patient-centric/Web-led
No waste [Healtheon/WebMD et al.]
Etc.

TP 03.26.00:

Are You Fighting Yesterday’s War?
Docs don’t know it all.
There are a lotta bad docs.
There are a lotta bad medical decisions.
“Hospitals” kill far too many people.
(Bad decisions, bad execution.)
Systemic waste is stratospheric. (Still.)
Patients are getting (much) smarter.
Patients have had it with HMOs. (And Docs with the
“white-coat syndrome.”)
You are not smarter than I am. (I am your partner.)
You are not busier than I am. (!!!!!)
Patients want more data.
(And can readily get it.)
Boomers will control their lives. Period.
Medicine is about to be overwhelmed with a tsunami!

1965 : “ ‘Doctor’ will see you now. ‘Doctor’ will take care of you.”
YES, NURSE.
ME GOOD PUPPY DOG.
1995 : “HMO will take care of you.”
BULLSHIT.
2005 : “I will take care of me. I’d like your expert help.”
P.S.: THE VIAGRA [ETC.] I ORDERED
ONLINE IS GREAT.

Patient-centric* Health Care
Wellness
(Fix to prevent.)
Partnership (“Tour guide” model.)
RESPECT!
(Mutual.)
WOMEN RULE!
*Not: HMO-centric, Employer-centric,
Insurer-centric, Doc-centric

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!
Net: Glorious Age of the BRAND!

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

What Can [Can’t] Be Branded?
“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 comes in a blue box 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

“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

T.T.D./Calling the
Corporate Shrink!
“Organizational
Psychotherapy”/

Notes Page
• This is The Big Enchilada:
– lotsa –

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 connects with something very deep - a fundamental appreciation of mythology. Stories create the emotional context people need to locate themselves in a larger experience.”

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

Rabbi Zusya : “In the world to come
I shall not be asked, ‘Why were you not Moses?’ I’ll be asked,
‘Why were you not Zusya?’ ”

“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

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!
Net: Glorious Age of the BRAND!

Brand Leadership!
“A key – perhaps the key – to leadership is the effective communication of a story.”
Howard Gardner
Leading Minds: An Anatomy of Leadership

“The challenge for IBM, AT&T and other mainstream companies is to re-instill a sense of adventure in recruits.”
Burke Stinson, AT&T

“Leadership is a performance.
You have to be conscious of your behavior, because everybody else is.”
Carly Fiorina

Brand Leadership:
ENTHUSIASM RULES!

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

[ IN THE END … WHAT
MATTERS … IS …
PERCEIVED INTENSITY!]

Ann Richards’ Dogma
Show up!
Know your message!