Distinct or … Extinct
Tom Peters Seminar2000
United Technologies
Research Center
East Hartford
26 June 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)
An Age of Passion:
1 Year = 1.5 Wal*Marts
03.27.99: $167B
03.27.00: $555B
P.S.: Wal*Mart = #8 in 2000
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)
Part I: Brand Inside
Part II: Brand Outside
Part III: Brand Leadership
Forces @ Work I
The Destruction
Imperative!
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
Headlines 06.15.00: Your Call!
Bell Atlantic-GTE
vs.
Lucent
“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
Pentium III 800MHz: $42,893.00/#
Cisco Engineer: $19,000.00
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)
Enron (per Gary Hamel/Fortune/06.00)
Design an open market for ideas
Offer an open market for capital
Open up the market for talent
Make like a cell: Divide and divide
(“We haven’t been able to start new
businesses within existing businesses”)
Pay your innovators well
– really well
Expected “Batting Average”?
Intel’s venture fund:
275 investments, $8B
Source: Fast Company , eCompany
C.E.O.
to
C.D.O.
The Gales of Creative Destruction
+29M = -44M + 73M
+4M = +4M - 0M
Paradox Redux
Atlanta: +113,600 = #1 metro area
Layoffs [major]: BellSouth,
Lockheed, Coca-Cola
Brand Inside
Brand Org:
Lean, Linked,
Electronic & Malleable
108 X 5
vs.
8 X 1*
* 540 vs. 8
The Pincer 5
“Destructive” entrepreneurs/ Global
Competition
“White Collar Robots”
THE INTERNET!
[E.g.: GM + Ford + DaimlerChrysler]
Global Outsourcing
[E.g.: India, Mexico]
Speed!!
RR on “Assetless” [J.B.] Sara Lee
“The most profitable
businesses in the future will act
as knowledge brokers, linking
insights into what’s available
with insights into the
customer’s individual needs
and preferences.”
The “&-!!+#$% 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]
“This is the Age of Ageism: The
real innovator’s dilemma isn’t
‘disruptive technologies;’ it’s
the relentless rise of the quasiadolescents who wield them.”
Michael Schrage
“A good plant engineer in a paper may create
$100,000 to $300,000 in value per year. … An
outstanding software product developer may
create a product worth $1,000,000 to
$300,000,000. … Talented people are less likely
to wait their turn. We used to view young people
as trainees; now they are authorities. Arguably
this is the first time the older generation
can – and must – leverage the younger
generation very early in their careers”
Ed Michaels, War for Talent (05.17.00)
“We want to be the
air traffic controllers
of electrons.”
Bob Nardelli,
GE Power Systems
So does Enron!
[et al.]
“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
Brand Inside
Brand Work!
So what will be the
Basic Building
Block of the
New Org?
Why are there no
books on how to create
a “Cool, Rocking,
WOW-producing
Finance Department”?
New Orleans
April 2000:
Jazz Festival +
NAPM
Welcome to the Y2K
New Orleans Jazz
and Real Cool
Purchasing Dudes
Festival!
You are the
Rock Stars
of the
B2B Age!
Message: You are
Re-invention
Evangelists!
PSF 1.0
Department Head
to …
Managing Partner,
HR [IS, etc.] Inc.
Enter …
The WOW
Project!*
*The Project50
“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
Implementation:
A 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
Think about It!?
Innovation = Reaction to
the Prototype
Michael Schrage
All-Time Prototype Champ
THE SPREAD SHEET!
The new
metabolism!
He who has the quickest
O.O.D.A. Loops* wins!
*Observe. Orient. Decide. Act. /
Col. John Boyd
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)
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
1) Turn ignition key.
2) Shift into drive.
3) Press foot firmly on the
throat of mediocrity.
Source: Mercedes ad
Brand Inside
Brand You:
Distinct …
or
Extinct
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)
“We believe companies can increase
their market cap 50 percent in 3 years.
Steve Macadam at Georgia Pacific
changed 20 of his 40 box plant
managers to put more talented, higher
paid managers in charge. He
increased profitability from $25 million
to $80 million in 2 years.”
Ed Michaels, War for Talent (05.17.00)
Seminar Y2K/Brand Inside
Message:
Distinct … or
Extinct!
Brand Inside
Brand Talent: The
Great War for Talent
Issue Y2K
The Great War
for Talent!
“When land was the scarce
resource, nations battled
over it. The same is
happening now for
talented people.”
Stan Davis & Christopher Meyer,
futureWEALTH
“The market’s being divided
up right now. We’re in a
tough competition [with the
U.S. and the U.K.] for
the best brains.”
Gerhard Schroeder, on Germany’s new
tech immigration policy
[Frankfurter Allgemeine/06.02.00]
Winner Take All!
From “1, 2 or 3” [JW] to “Best
talent in each industry segment
to build better
models and proprietary
intangibles” [EM]
Ed Michaels, War for Talent (05.17.00)
Home Depot Goes Long!
7 new growth initiatives ($20B to
$100B in 5-7 years
Arthur Blank: BEST PERSON IN
THE WORLD TO HEAD EACH
INITIATIVE
E.g.: COO of IKEA to head
international expansion
Ed Michaels, War for Talent (05.17.00)
“The Silent Battlefield”
50% of middle mgrs. In big corps. report
“moderate to high” chance they’ll change
companies within 3 years
More loyalty to geography than companies
Most companies: don’t know how many 2540 year olds they’re losing, have no special
retention programs
Ed Michaels, War for Talent (05.17.00)
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
“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
Why PWC [Etc.]?
“We acquire and manage
large stables of ‘Talent’
better.”
PWC Exec
Alan Kay on
PARC’s Bob Taylor
“He was a
connoisseur of
talent.”
“Top performing companies are
two to four times more likely
than the rest to pay what it
takes to prevent losing
top performers.”
Ed Michaels, War for Talent (05.17.00)
“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
H.R. to H.E.D. ???
Human
Enablement
Department
“Firms will not ‘manage the
careers’ of their employees. They
will provide opportunities to
enable the employee to develop
identity and adaptability and
thus be in charge of his or her
own career.”
Tim Hall et al., “The New Protean Career Contract”
“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
“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?
Slip Ritalin into his food …
Or …
Elect Him Prime Minister
Tony Blair*
*talk/May 2000
Axiom: Never hire
anyone without an
aberration in their
background. (Find the
One Ton Cookie Man!)
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 War Y2K!
–Brand You within Brand Us!
–Encompassing!/ Cultural!
(KEWLNESS: mine v. yours)
–Substantive!/ “The best
Projects win!” [Cairo 12-99]
–Basis of Brand!/ WHO WE
ARE!
Talent = Brand
Part I: Brand Inside
Part II: Brand Outside
Part III: Brand Leadership
Forces @ Work II
The Commodity Trap
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
“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
“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
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
“These days, you can’t succeed as a
company if you’re consumer led –
because in a world so full of so much
constant change, consumers can’t
anticipate the next big thing.
Companies should be idealed and consumerinformed.”
Doug Atkin, partner,Merkley Newman Harty
“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
If people say
something is ‘good’, it
means someone else is
already doing it.”
‘crazy.’
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!
“The Age of the
Never Satisfied
Customer”
Regis McKenna
Brand Outside
Strategy 2:
Use E-Commerce
to Re-invent the
Business!
?????
$35,000,000.
Dell’s Web sales
…
daily
Tomorrow Today: Cisco!
90% of $14.4B
(Cisco Connection ONLINE)
Save $500M
(service and tech support)
C.Sat e >> C.Sat H
Customer Engineer
Chat Rooms/Collaborative
Design ($1B “free” consulting)
And Larry?
Lessons from Earth’s Richest Human
Everything [In & Out] via Internet
$1B in ’99-’00
[on a cost base of $6B]
$1B in ’00-’01
Service Call Center
$300.00 per transaction
to $1.50
Savings: $550,000,000.00
Source: Ralph Seferian, VP, Oracle
B2B
1999 – 2004: 50X
2004: $7.4 T
Source: GartnerGroup
(per Reuters 1-26-00)
GM/Ford/DaimlerChrysler (02-27)
Covisint
$240B (+$500B)
I.P.O.
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%]
“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
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
Brand Outside
Strategy 3:
Design Rules!
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)
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
Lady Sensor, Mach3, and …
$70M on developing the
CrossAction toothbrush
23 patents, including 6 for the
packaging
Source: www.ecompany.com [06.00]
“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
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
Brand Outside
Strategy 4:
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
“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
“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
Brand Outside
BRAND POWER!
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]
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
“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
Part I: Brand Inside
Part II: Brand Outside
Part III: Brand Leadership
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
“The challenge for IBM, AT&T and
other mainstream companies is to
re-instill a sense of adventure in
recruits.”
Burke Stinson, AT&T
“Create a Cause, not
a ‘business.’ ”
Gary Hamel, Fortune (06.00), on reinventing a company (Exemplar #1:
Charles Schwab)
“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
Ann Richards’ Dogma
Show up!
Know your message!
PUT YOURSELF
AT RISK EVERY DAY!
“If things seem under
control, you’re just
not going
fast enough.”
Mario Andretti