Tom Peters’ Sustaining ! EXCELLENCE Jabil Circuit/Officers Meeting 2013 TradeWinds Resort/St. Pete Beach/02 May 2013 (slides @ tompeters.com/excellencenow.com) “I am often asked by would-be entrepreneurs seeking escape from life within huge corporate structures, ‘How do I build a small firm for myself?’ The answer seems obvious … Source: Paul Ormerod, Why Most Things Fail: Evolution, Extinction and Economics “I am often asked by would-be entrepreneurs seeking escape from life within huge corporate structures, ‘How do I build a small firm for Buy a very large one and just wait.” myself?’ The answer seems obvious: —Paul Ormerod, Why Most Things Fail: Evolution, Extinction and Economics “Mr. Foster and his McKinsey colleagues collected detailed performance data stretching back years for 1,000 found that U.S. companies. 40 They NONE of the long-term survivors managed to outperform the market. Worse, the longer companies had been in the database, the worse they did.” —Financial Times “Data drawn from the real world attest to a fact that is beyond Everything in existence tends to deteriorate.” our control: —Norberto Odebrecht, Education Through Work Conrad Hilton, at a gala celebrating his career … Conrad Hilton, at a gala celebrating his career, was called to the podium and “What were the most important lessons you learned in your long and distinguished career?” His answer … asked, “Remember to tuck the shower curtain inside the bathtub.” is “Execution strategy.” —Fred Malek “Costco figured out the big, simple things and executed with total fanaticism.” —Charles Munger, Berkshire Hathaway “In real life, strategy is actually very straightforward. Pick a general direction … and implement like hell.” —Jack Welch “The art of war does not require complicated maneuvers; the simplest are the best and common sense is fundamental. From which one might wonder how it is it is because they try to be clever.” generals make blunders; —Napoleon You beat yourself! Sports*: *Sports/Business/Life “We” “When assessing candidates, the first thing I looked for was energy and enthusiasm for execution: Does she talk about the thrill of getting things done, the obstacles overcome, the role her people played —or does she keep wandering back to strategy or philosophy?” —Larry Bossidy, Execution WOW!! Observed closely: The use of or “I” “we” during a job interview. Source: Leonard Berry & Kent Seltman, chapter 6, “Hiring for Values,” Management Lessons From Mayo Clinic hundreds of times better here “I am [than in my prior hospital assignment] because of the support system. It’s like you are working in an organism; you are not a single cell when you are out there practicing.” —quote from Dr. Nina Schwenk, in Chapter 3, “Practicing Team Medicine,” from Leonard Berry & Kent Seltman, from Management Lessons From Mayo Clinic “On the face of it, shareholder value is the dumbest idea in the world. Shareholder value is a result, not a strategy. … Your main constituencies are your employees, your customers and your products.” —Jack Welch, FT, 0313.09, page 1 Really First Things Before First Things If the regimental commander lost most of his 2nd lieutenants and 1st lieutenants and captains If he lost his sergeants it would be a catastrophe. The Army and the and majors, it would be a tragedy. Navy are fully aware that success on the battlefield is dependent to an extraordinary degree on its Sergeants and Chief Petty Officers. Does industry have the same awareness? “People leave managers not companies.” —Dave Wheeler Really First Things Before First Things XFX = #1* *Cross-Functional eXcellence % XF lunches* Measure! Monthly! Part of * evaluation! [The PAs Club.] Everyone, starting with the receptionist, should have a significant XFX rating component in their evaluation. (The “XFX Performance” should be among the Top 3 items in all managers’ evaluations.) Formal evaluations. Present counterparts in other functions recognition/awards for service to your group: Tiny awards at least weekly. An “Annual All-Star Supporters [from other groups] Banquet” modeled after [and equivalent to!] superstar salesperson banquets. XFX/Typical Social Accelerators 1. EVERYONE’s [more or less] JOB #1: Make friends in other functions! (Purposefully. Consistently. Measurably.) 2. “Do lunch” with people in other functions!! Frequently!! (Minimum 10% to 25% for everyone? Measured.) 3. Ask peers in other functions for references so you can become conversant in their world. (It’s one helluva sign of ... GIVE-A-DAMNism.) 4. Religiously invite counterparts in other functions to your team meetings. Ask them to present “cool stuff” from “their world” to your group. (Useful. Mark of respect.) 5. PROACTIVELY SEEK EXAMPLES OF “TINY” ACTS OF “XFX” TO ACKNOWLEDGE—PRIVATELY AND PUBLICALLY. (Bosses: ONCE A DAY … make a short call or visit or send an email of “Thanks” for some sort of XFX gesture by your folks and some other function’s folks.) 6. Present counterparts in other functions awards for service to your group. Tiny awards at least weekly; and an “Annual All-Star Supporters [from other groups] Banquet” modeled after superstar salesperson banquets. ONE Act of XFX Enhancement every day! Really First Things Before First Things “The doctor interrupts after …* *Source: Jerome Groopman, How Doctors Think 18 … 18 … seconds! [An obsession with] Listening is ... the ultimate mark of Listening Listening Listening Listening Listening Listening Listening is is is is is is is ... ... ... ... ... ... ... Listening Listening Listening Listening is is is is ... ... ... ... the heart and soul of Engagement. the heart and soul of Kindness. the heart and soul of Thoughtfulness. the basis for true Collaboration. the basis for true Partnership. a Team Sport. a Developable Individual Skill.* (*Though women are far better at it than men.) the basis for Community. the bedrock of Joint Ventures that work. the bedrock of Joint Ventures that grow. the core of effective Cross-functional Communication* (*Which is in turn Attribute #1 of organization effectiveness.) [cont.] Respect . Listen = “Profession” = Study = practice = evaluation = Enterprise value Really First Things Before First Things Whine all you want, but meetings are what you [boss] do! Every meeting that does not stir the imagination and curiosity of attendees and increase bonding and cooperation and engagement and sense of worth and motivate rapid action and enhance enthusiasm is a permanently lost opportunity. Meeting: Tom Peters’ Sustaining ! EXCELLENCE Jabil Circuit/Officers Meeting 2013 TradeWinds Resort/St. Pete Beach/02 May 2013 (slides @ tompeters.com/excellencenow.com) 1/4,096: excellencenow.com “Business has to give people enriching, or it's simply not worth doing.” rewarding lives … —Richard Branson “You have to treat your employees like customers.” —Herb Kelleher, upon being asked his “secret to success” Source: Joe Nocera, NYT, “Parting Words of an Airline Pioneer,” on the occasion of Herb Kelleher’s retirement after 37 years at Southwest Airlines (SWA’s pilots union took out a full-page ad in USA Today thanking HK for all he had done) ; across the way in Dallas, American Airlines’ pilots were picketing AA’s Annual Meeting) "If you want staff to give great service, give great service to staff." —Ari Weinzweig, Zingerman's “I didn’t have a ‘mission statement’ at Burger King. I had a dream. Very simple. It was something like, ‘Burger King is 250,000 people, every one of whom gives a shit.’ Every one. Accounting. Systems. Not just the drive through. Everyone is ‘in the brand.’ That’s what we’re talking about, nothing less.” — Barry Gibbons Brand = Talent. Oath of Office: Managers/Servant Leaders Our goal is to serve our customers brilliantly and profitably over the long haul. Serving our customers brilliantly and profitably over the long haul is a product of brilliantly serving, over the long haul, the people who serve the customer. Hence, our job as leaders—the alpha and the omega and everything in between—is abetting the sustained growth and success and engagement and enthusiasm and commitment to Excellence of those, one at a time, who directly or indirectly serve the ultimate customer. We—leaders of every stripe—are in the “Human Growth and Development and Success and Aspiration to Excellence business.” “We” [leaders] only grow when “they” [each and every one of our colleagues] are growing. “We” [leaders] only succeed when “they” [each and every one of our colleagues] are succeeding. “We” [leaders] only energetically march toward Excellence when “they” [each and every one of our colleagues] are energetically marching toward Excellence. Period. 2/year Promotion Decisions “life and death decisions” Source: Peter Drucker, The Practice of Management 2/year = legacy. From sweaters to people!* Les Wexner: *Limited Brands founder Les Wexner queried on astounding longterm success—said, in effect, it happened because he got as excited about developing people as he had been about predicting fashion trends in his early years 70 Cents “Development can help great people be even better—but if I had a dollar to spend, I’d spend 70 cents getting the right person in the door.” —Paul Russell, Director, Leadership and Development, Google the most important aspect of business and yet remains woefully misunderstood.” “In short, hiring is Source: Wall Street Journal, 10.29.08, review of Who: The A Method for Hiring, Geoff Smart and Randy Street ! “C-level”? In the Army, 3-star generals worry about training. In most businesses, it's a “ho hum” mid-level staff function. I would hazard a guess that most CEOs see IT investments as a “strategic necessity,” but see training expenses as “a necessary evil.” (1) Training merits “C-level” status! (2) Top trainers should be paid a king’s ransom—and be of the same caliber as top marketers or researchers. The Memories That Matter. The Memories That Matter The people you developed who went on to stellar accomplishments inside or outside the company. The (no more than) two or three people you developed who went on to create stellar institutions of their own. The long shots (people with “a certain something”) you bet on who surprised themselves—and your peers. The people of all stripes who 2/5/10/20 years later say “You made a difference in my life,” “Your belief in me changed everything.” The sort of/character of people you hired in general. (And the bad apples you chucked out despite some stellar traits.) A handful of projects (a half dozen at most) you doggedly pursued that still make you smile and which fundamentally changed the way things are done inside or outside the company/industry. The supercharged camaraderie of a handful of Great Teams aiming to “change the world.” Joe J. Jones 1966 – 2013 Net Worth $21,543,672.48 Not. “Too Much Cost, Not Enough Value” “Too Much Speculation, Not Enough Investment” “Too Much Complexity, Not Enough Simplicity” “Too Much Counting, Not Enough Trust” “Too Much Business Conduct, Not Enough Professional Conduct” “Too Much Salesmanship, Not Enough Stewardship” “Too Much Focus on Things, Not Enough Focus on Commitment” “Too Many Twenty-first Century Values, Not Enough Eighteenth-Century Values” “Too Much ‘Success,’ Not Enough Character” Source: Chapter titles from Jack Bogle, Enough. Hard is Soft. Soft is Hard. Hard Soft [numbers, plans] [people/relationships] is Soft. is Hard. “Why in the World did you go to Siberia?” An emotional, vital, innovative, joyful, creative, entrepreneurial endeavor that elicits maximum Enterprise* (*at its best): concerted human potential in the wholehearted pursuit of EXCELLENCE in service of others.** **Employees, Customers, Suppliers, Communities, Owners, Temporary partners In Search of Excellence /1982: The Bedrock “Eight Basics” 1. 2. 3. 4. 5. 6. 7. 8. A Bias for Action Close to the Customer Autonomy and Entrepreneurship Productivity Through People Hands On, Value-Driven Stick to the Knitting Simple Form, Lean Staff Simultaneous Loose-Tight Properties READY. FIRE! AIM. H. Ross Perot (vs “Aim! Aim! Aim!” /EDS vs GM/1985) /47 Lesson47: WTTMSW WHOEVER TRIES THE MOST STUFF WINS Better yet: WTTMSTFW WHOEVER TRIES THE MOST STUFF THE FASTEST WINS “We made mistakes, of course. Most of them were omissions we didn’t think of when we initially wrote the software. We fixed them by doing it over and over, again and again. We do the same today. While our competitors are still sucking their thumbs trying to make the design perfect, we’re already on prototype version #5. By the time our rivals are ready with wires and screws, we are on version #10. It gets back to planning versus acting: We act from day one; others plan how to plan—for months.” —Bloomberg by Bloomberg “Burt Rutan wasn’t a fighter jock; he was an engineer who had been asked to figure out why the F-4 Phantom was flying pilots into the ground in Vietnam. While his fellow engineers attacked such tasks with calculators, Rutan insisted on considering the problem in the air. A near-fatal flight not only led to a critical F-4 modification, it also confirmed for Rutan a notion he had held ever since he had built model The way to make a better aircraft wasn’t to sit around perfecting a design, it was to get something up in the air and see what happens, then try to fix whatever goes wrong.” airplanes as a child. —Eric Abrahamson & David Freedman, Chapter 8, “Messy Leadership,” from A Perfect Mess: The Hidden Benefits of Disorder Culture of Prototyping “Effective prototyping may THE MOST VALUABLE CORE COMPETENCE an be innovative organization can hope to have.” —Michael Schrage “mean-timeto-prototype” Source: Sony, via Michael Schrage “EXPERIMENT FEARLESSLY” Tactic #1 Source: BusinessWeek, “Type A Organization Strategies: How to Hit a Moving Target”— “RELENTLESS TRIAL AND ERROR” Source: Wall Street Journal, cornerstone of effective approach to “rebalancing” company portfolios in the face of changing and uncertain global economic conditions (11.08.10) “FAIL. FORWARD. FAST.” High Tech CEO, Pennsylvania “REWARD excellent failures. PUNISH mediocre successes.” —Phil Daniels, Sydney exec /4,096 “YOU MISS 100% OF THE SHOTS YOU NEVER TAKE.” —Wayne Gretzky /47 Decentralization vs Centralization ALL = “That’s There Is” (from childrearing 101 to the Federalist Papers to Org.2013) Resilience per se should/must become a corporate value and explicit part of business strategy! The True Logic* of Decentralization: 6 DIVISIONS = 6 “TRIES” 6 DIVISIONS = 6 DIFFERENT LEADERS = 6 INDEPENDENT “TRIES” = MAX PROBABILITY OF “WIN” 6 DIVISIONS = 6 VERY DIFFERENT LEADERS = 6 VERY INDEPENDENT “TRIES” = MAX PROBABILITY OF “FAR OUT”/”3-SIGMA” “WIN” *“Driver”: Law of Large #s “Rose gardeners face a choice every spring. The long-term fate of a rose garden depends on this decision. If you want to have the largest and most glorious roses of the neighborhood, you will prune hard. This represents a policy of low tolerance and tight control. You force the plant to make the maximum use of its available resources, by putting them into the the rose’s ‘core business.’ Pruning hard is a dangerous policy in an unpredictable environment. Thus, if you are in a spot where you know nature may play tricks on you, you may opt for a policy of higher tolerance. You will not have the biggest roses, but you have a much-enhanced chance of having roses every year. You In short, tolerant pruning achieves two ends: (1) It makes it easier to cope with unexpected environmental changes. (2) It leads to a continuous restructuring of the plant. The policy of tolerance admittedly wastes resources—the extra buds drain away nutrients from the main stem. But in an unpredictable environment, this policy of tolerance makes the rose healthier in the long run.” —Arie De Geus, The Living Company will achieve a gradual renewal of the plant. Innovation Enemy #1 I.C.D. Inherent/Inevitable/ Immutable Centralist Drift Note 1: Note 2: Jim Burke’s 1-word vocabulary: “No.” “I do not rule Russia. Tenthousand clerks do.” —Czar Nicholas I “You will become like the five people you associate with the most—this can be either a blessing or a curse.” —Billy Cox WE ARE WHAT WE EAT/WE ARE THE COMPANY WE KEEP The “Hang Out Axiom”: The “We are what we eat”/ “We are who we hang out with” Axiom: At its core, every (!!!) relationship-partnership decision (employee, vendor, customer, etc., etc.) is a strategic decision about: “Innovate, ‘Yes’ or ‘No’ ” “DON’T BENCHMARK, FUTUREMARK!” Impetus: “The future is already here; it’s just not evenly distributed” —William Gibson “DON’T BENCHMARK, ‘OTHER’ MARK!” “Who’s the most interesting person you’ve met in the last 90 days? How do I get in touch with them?” —Fred Smith Vanity Fair: “What is your most marked characteristic?” Mike Bloomberg: “Curiosity.” Forget>“Learn” “The problem is never how to get new, innovative thoughts into your mind, but how to get the old ones out.” —Dee Hock Forgetting >> Learning “The Bottleneck … “The Bottleneck is at the … “Where are you likely to find people with the least diversity of experience, the largest investment in the past, and the greatest reverence for industry dogma … Top of the Bottle” — Gary Hamel/Harvard Business Review MORE MOORE $55B* *IBM Global Services/ “Systems integrator of choice” “Big Brown’s New Bag: UPS Aims to Be the Traffic Manager for Corporate America” —Headline/BW “UPS wants to take over the sweet spot in the endless loop of goods, information and capital that all the packages [it moves] represent.” —ecompany.com (E.g., UPS Logistics manages the logistics of 4.5M Ford vehicles, from 21 mfg. sites to 6,000 NA dealers) “THE GIANT STALKING BIG OIL: HOW SCHLUMBERGER IS REWRITING THE RULES OF THE ENERGY GAME.”: “IPM [Integrated Project Management] strays from [Schlumberger’s] traditional role as a service provider and moves deeper into areas once dominated by the majors.” Source: BusinessWeek cover story “We’ll do just about anything an oilfield owner would want, from drilling to production.” IPM’s Chief: LEAVE IT TO BEAVER. Trapper: <$20 per beaver pelt. Source: WSJ WDCP/“WILDLIFE DAMAGE-CONTROL PROFESSIONAL”: $150 to “remove” “problem beaver”; $750-$1,000 for flood-control piping … so that beavers can stay. Source: WSJ 7X to 40X for “Solution” [rather than “service transaction”] LITTLE = Big carts = Source: Wal*Mart Bag sizes = New markets: Source: PepsiCo Machine Gambling “Pleasing” odor #1 vs. “pleasing” odor #2: +45% revenue Source: “Effects of Ambient Odors on Slot-Machine Useage in Las Vegas Casinos,” reported in Natasha Dow Schull, Addiction By Design: Machine Gambling in Las Vegas (66% revenue, 85% profit) “When Friedman slightly curved the right angle of an entrance corridor to one property, he was ‘amazed at the magnitude of change in pedestrians’ behavior’ (the percentage who entered increased from one-third to nearly two-thirds.” —Natasha Dow Schull, Addiction By Design: Machine Gambling in Las Vegas Glaring Eyes: -62% Source: PLOS ONE (via The Atlantic CITIES /0429.13) (1) Amenable to rapid experimentation/ failure “free” (PR, $$) (2) Quick to implement/ Quick to Roll out (3) Inexpensive to implement/Roll out (4) Huge multiplier (5) An “Attitude” MBWA Managing By Wandering Around/HP MBWA 4 four most important words in any “The organization are … MBWA 8: Change the World With Four Words “WHAT DO YOU THINK?” Source: courtesy Dave Wheeler, posted at tompeters.com “Acknowledge” … perhaps the most powerful word (and idea) in the English language—and in the manager’s tool kit! MBWA 8 MBWA 8: Change the World With EIGHT Words What do you think?* How can I help?** *Dave Wheeler: “What are the four most important words in the boss’ lexicon?” **Boss as CHRO/Chief Hurdle Removal Officer ********************************** “No matter what the situation, [the great manager’s] first response is always to think about the individual concerned and how things can be arranged to help that individual experience success.” —Marcus Buckingham, The One Thing You Need to Know You = Your Calendar You = Your calendar* *The calendar NEVER lies. one “If there is any ‘secret’ to effectiveness, it is concentration. Effective executives do first things first and they do one thing at a time.” … —Peter Drucker Me first! “Being aware of yourself and how you affect everyone around you is what distinguishes a superior leader.” —Edie Seashore (Strategy + Business #45) “How can a high-level leader like _____ be so out of touch with the truth about himself? It’s In fact, the higher up the ladder a leader climbs, the less accurate his selfassessment is likely to be. The problem is an acute lack of feedback more common than you would imagine. [especially on people issues].” —Daniel Goleman (et al.), The New Leaders "Everyone thinks of changing the world, but no one thinks of changing himself" —Leo Tolstoy Hard Soft [numbers, plans] [people/relationships] is Soft. is Hard. 139,380 former patients from 225 hospitals: Press Ganey Assoc: NONE of THE top 15 factors determining Patient Satisfaction referred to patient’s health outcome. Instead: directly related to Staff Interaction; directly correlated with Employee Satisfaction Source: Putting Patients First, Susan Frampton, Laura Gilpin, Patrick Charmel “There is a misconception that supportive interactions require more staff or more time and are therefore more costly. Although labor costs are a substantial part of any hospital budget, the interactions themselves add nothing to the budget. KINDNESS IS FREE. Listening to patients or answering their questions costs nothing. It can be argued that negative interactions—alienating patients, being non-responsive to their needs or limiting their sense of control—can be very costly. … Angry, frustrated or frightened patients may be combative, withdrawn and less cooperative—requiring far more time than it would have taken to interact with them initially in a positive way.” Source: Putting Patients First, Susan Frampton, Laura Gilpin, Patrick Charmel (Griffin Hospital/Derby CT; Planetree Alliance) K=R=P KINDNESS = REPEAT BUSINESS = PROFIT. Kindness … WORKS! Kindness … PAYS! “I regard apologizing as the most magical, healing, restorative gesture human beings can make. It is the centerpiece of my work with executives who want to get better.” —Marshall Goldsmith, What Got You Here Won’t Get You There: How Successful People Become Even More Successful. Toro, the lawn mower folks, reduced the average cost of With a new and forthcoming policy on apologies … settling a claim from $115,000 in 1991 to $35,000 in 2008—and the company hasn’t been to trial in the last 15 years! The VA hospital in Lexington, Massachusetts, developed an approach, totally uncharacteristic in healthcare, to apologizing for errors—even when no patient request or claim was made. In 2000, the systemic mean VA hospital malpractice settlement throughout the United $413,000; the Lexington VA hospital settlement number was $36,000 — States was and there were far fewer per patient claims to begin with.) Source: John Kador, Effective Apology Relationships (of all varieties): THERE ONCE WAS A TIME WHEN A THREE-MINUTE PHONE CALL WOULD HAVE AVOIDED SETTING OFF THE DOWNWARD SPIRAL THAT RESULTED IN A COMPLETE RUPTURE.* *divorce, loss of a BILLION $$$ aircraft sale, etc., etc. THE PROBLEM IS RARELY/NEVER THE PROBLEM. THE RESPONSE TO THE PROBLEM INVARIABLY ENDS UP BEING THE REAL PROBLEM.* *PERCEPTION IS ALL THERE IS! COMEBACK [BIG, QUICK RESPONSE] >> PERFECTION THE RED CARPET STORE (Joel Resnick/Flemington NJ) Basement Systems Inc. Retail Superstars: Inside the 25 Best Independent Stores in America —by George Whalin Jungle Jim’s International Market, Fairfield, Ohio: “An adventure in ‘shoppertainment,’ as Jungle Jim’s 1,600 cheeses and, yes, 1,400 varieties of hot sauce —not to mention 12,000 wines priced from $8 to $8,000 a bottle; all this is brought to you by 4,000 vendors. Customers come from every calls it, begins in the parking lot and goes on to corner of the globe.” Bronner’s Christmas Wonderland, Frankenmuth, Michigan, 98,000-square-foot “shop” features the likes of 6,000 Christmas ornaments, 50,000 trims, and anything else you can name if it pertains to pop 5,000: Christmas. Source: George Whalin, Retail Superstars MITTELSTAND* ** *“agile creatures darting between the legs of the multinational monsters” (Bloomberg BusinessWeek, 10.10) **E.g. Goldmann Produktion “Be the best. It’s the only market that’s not crowded.” From: Retail Superstars: Inside the 25 Best Independent Stores in America, George Whalin “INSANELY GREAT” Steve Jobs “RADICALLY THRILLING” BMW Motueka, New Zealand Coppins Sea Anchors* *PSA/Para-sea anchors Source: Kia Ora/Air New Zealand magazine Kevin Roberts’ Credo 1. Ready. Fire! Aim. 2. 3. 4. 5. 6. 7. 8. 9. If it ain’t broke ... Break it! Hire crazies. Ask dumb questions. Pursue failure. Lead, follow ... or get out of the way! Spread confusion. Ditch your office. Read odd stuff. 10. AVOID MODERATION! EXCELLENCE is not an "aspiration.” EXCELLENCE is … THE NEXT FIVE MINUTES. Or not.