Tom Peters

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Tom Peters Rules for ReinventionShinhan
Financial Group/Halla Summit/05October2002
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There will be more confusion in the business
world in the next decade than in any decade in
history. And the current pace of change will only
accelerate.Steve Case
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We are in a brawl with no rules.Paul Allaire
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IT MAY SOMEDAY BE SAID THAT THE 21ST CENTURY
BEGAN ON SEPTEMBER 11, 2001. Al-Qaeda
represents a new and profoundly dangerous kind of
organizationone that might be called a virtual
state. On September a virtual state proved that
modern societies are vulnerable as never
before.Time/09.09.2002
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The best swordsman in the world doesnt 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 doesnt do the thing he ought
to do, and so the expert isnt 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
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The deadliest strength of Americas new
adversaries is their very fluidity, Defense
Secretary Donald Rumsfeld believes. Terrorist
networks, unburdened by fixed borders,
headquarters or conventional forces, are free to
study the way this nation responds to threats and
adapt themselves to prepare for what Mr. Rumsfeld
is certain will be another attack. Business
as usual wont do it, he said. His answer is to
develop swifter, more lethal ways to fight. Big
institutions arent swift on their feet in
adapting but rather ponderous and clumsy and
slow. The New York Times/09.04.2002
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If you dont like change, youre going to like
irrelevance even less. General Eric Shinseki,
Chief of Staff, U. S. Army
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BATTLEFIELD CRM Dawn Meyerreicks, CTO of the
Defense Intelligence Systems Agency, made one of
the most fateful military calls of the 21st
century. After 9/11 her office quickly leased
all the available transponders covering Central
Asia. The implications should change everything
about U.S. military thinking in the years ahead.
The U.S. Air Force had kicked off its fight
against the Taliban with an ineffective bombing
campaign, and Washington was anguishing over
whether to send in a few Army divisions. Donald
Rumsfeld told Gen. Tommy Franks to give the
initiative to 250 Special Forces already on the
ground. They used satellite phones, Predator
surveillance drones, and GPS and laser-based
targeting systems to make the air strikes
brutally effective.In effect, they
Napsterized the battlefield by cutting out the
middlemen (much of the militarys command and
control) and working directly with the real
players. The data came in so fast that HQ
revised operating procedures to allow
intelligence analysts and attack planners to work
directly together. Their favorite tool,
incidentally, was instant messaging over a secure
network.Ned Desmond/Broadbands New Killer
App/Business 2.0/ OCT2002
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Erics ArmyFlat.Fast.Agil
e.Adaptable.Light But Lethal.Brand You/
Talent/ I Am An ARMY Of One.Info-intense.
Network-centric.
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I. NEW BUSINESS. NEW CONTEXT.
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All Bets Are Off.
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Theres 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
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In 25 years, youll probably be able to get the
sum total of all human knowledge on a personal
device.Greg Blonder, VC was Chief Technical
Adviser for Corporate Strategy _at_ ATT Barrons
11.13.2000
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The corporation as we know it, which is now 120
years old, is not likely to survive the next 25
years. Legally and financially, yes, but not
structurally and economically.Peter Drucker,
Business 2.0 (08.00)
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2. The Destruction Imperative.
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ForgetgtLearnThe problem is never how to get
new, innovative thoughts into your mind, but how
to get the old ones out.Dee Hock
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Forbes100 from 1917 to 1987 39 members of the
Class of 17 were alive in 87 18 in 87 F100
18 F100 survivors underperformed the market by
20 just 2 (2), GE Kodak, outperformed the
market 1917 to 1987.Source Dick Foster
Sarah Kaplan, Creative Destruction Why Companies
That Are Built to Last Underperform the Market
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Good management was the most powerful reason
leading firms failed to stay atop their
industries. Precisely because these firms
listened to their customers, invested
aggressively in technologies that would provide
their customers more and better products of the
sort they wanted, and because they carefully
studied market trends and systematically
allocated investment capital to innovations that
promised the best returns, they lost their
positions of leadership.Clayton Christensen,
The Innovators Dilemma
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Active mutators in placid times tend to die off.
They are selected against. Reluctant mutators in
quickly changing times are also selected
against.Carl Sagan Ann Druyan, Shadows of
Forgotten Ancestors
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Change the rules before somebody else does.
Ralph Seferian, VP, Oracle
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Just Say No I dont intend to be known as the
King of the Tinkerers. CEO, large financial
services company (New York, 5-99)
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The difficulties arise from the inherent
conflict between the need to control existing
operations and the need to create the kind of
environment that will permit new ideas to
flourishand old ones to die a timely death. We
believe that most corporations will find it
impossible to match or outperform the market
without abandoning the assumption of continuity.
The current apocalypsethe transition from a
state of continuity to state of discontinuityHas
the same suddenness as the trauma that beset
civilization in 1000 A.D. Richard Foster
Sarah Kaplan, Creative Destruction (The
McKinsey Quarterly)
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The Three Levels of Innovation
IncrementalSubstantial TransformationalSource
Dick Foster, Business 2.0 (05.01) Note Each
level requires totally different processes!
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II. NEW BUSINESS. NEW TECH.
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3. The White Collar Revolution the Death of
Bureaucracy.
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108 X 5vs. 8 X 1 540 vs. 8 (-98.5)
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E.g. Jeff Immelt 75 of admin, back room,
finance digitalized in 3 years.Source BW
(01.28.02)
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IBMs Project eLiza! Self-bootstrapping/
Artilects
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Unless mankind redesigns itself by changing our
DNA through altering our genetic makeup,
computer-generated robots will take over the
world. Stephen Hawking, in the German magazine
Focus
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4. IS/ IT/ Web On the Bus or Off the Bus.
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100 square feet9 square meters
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Ebusiness is about rebuilding the organization
from the ground up. Most companies today are not
built to exploit the Internet. Their business
processes, their approvals, their hierarchies,
the number of people they employ all of that is
wrong for running an ebusiness.Ray Lane,
Kleiner Perkins
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Read It Closely We dont sell insurance
anymore. We sell speed. Peter Lewis,
Progressive
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Case CRM
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CRM has, almost universally, failed to live up
to expectations. Butler Group (UK)
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CGEY (Paul Cole) Pleasant Transaction vs.
Systemic Opportunity. Better job of what we do
today vs. Re-think overall enterprise strategy.
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Dont rebuild. Reimagine.The New York Times
Magazine on the future of the WTC space in Lower
Manhattan/09.08.2002
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The Futility of Size and the Genius of
Alliances Virtualization is the recognition
that territorial size does not solve economic
problems. Economic access must become the
substitute for economic domain.Richard
Rosecrance, The Rise of the Virtual State
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TP Skill at creating, exploiting, and exiting
crucial alliances beats ownership of fixed assets.
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III. NEW BUSINESS. NEW VALUE PROPOSITION.
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5. The PSF SolutionThe Professional Service
Firm Model.
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Answer PSF!Professional Service
FirmDepartment Head to Managing Partner,
HR IS, etc. Inc.
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Typically in a mortgage company or financial
services company, risk management is an
overhead, not a revenue center. Weve become more
than that. We pay for ourselves, and we actually
make money for the company.Frank Eichorn,
Director of Credit Risk Data Management Group,
Wells Fargo Home Mortgage (Source sas.com)
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6. The Heart of the Value- Added Revolution The
Solutions Imperative.
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Gerstners IBM Systems Integrator of choice.
Global Services 35B. Pledge/99 Business
Partner Charter. 72 strategic partners, aim for
200. Drop many in-house programs/products.
(BW/12.01).
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We want to be the air traffic controllers of
electrons.Bob Nardelli, GE Power Systems
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Customer Satisfaction to Customer
SuccessWere getting better at Six Sigma
every day. But we really need to think about the
customers profitability. Are customers bottom
lines really benefiting from what we provide
them?Bob Nardelli, GE Power Systems
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Keep In Mind Customer Satisfaction versus
Customer Success
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No longer are we only an insurance provider.
Today, we also offer our customers the products
and services that help them achieve their dreams,
whether its financial security, buying a car,
paying for home repairs, or even taking a dream
vacation.Martin Feinstein, CEO, Farmers Group
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Our mission is to go from being the worlds
premier timesharewhich is a large idea in a
small industryto being what we call the market
makers for global travel and leisure. We need to
enable developers to be involved in more travel
and leisure products, rather than just the
timeshare side.Ken May, RCI (Source
Developments)
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Omnicom 57 (of 6B) from marketing services
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7. BARRIERS MUST BE DESTROYED!
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Ninety percent of what we call management
consists of making it difficult for people to get
things done. P.D.
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The organizations we created have become
tyrants. They have taken control, holding us
fettered, creating barriers that hinder rather
than help our businesses. The lines that we drew
on our neat organizational diagrams have turned
into walls that no one can scale or penetrate or
even peer over. Frank Lekanne Deprez René
Tissen, Zero Space Moving Beyond Organizational
Limits.
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Supply Chain 2000When Joe Employee at
Company X launches his browser, hes taken to
Company Xs personalized home page. He can
interact with the entire scope of Company Xs
world customers, other employees, distributors,
suppliers, manufacturers, consultants. The
browser that is, the portal resembles a My
Yahoo for Company X and hooks into every network
associated with Company X. The real trick is that
Joe Employee, business partners and customers
dont have to be in the office. They can log on
from a cell phone, Palm Pilot, pager or home
office system.Red Herring (09.2000)
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The Real New EconomyImagine a chess game in
which, after every half dozen moves, the
arrangement of the pieces on the board stays the
same but the capabilities of the pieces randomly
change. Knights now move like bishops, bishops
like rooks Technology does that. It rubs out
boundaries that separate industries. Suddenly new
competitors with new capabilities will come at
you from new directions. Lowly truckers in brown
vans become geeky logistics experts. Business
2.0 (8.2001)
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IV. NEW BUSINESS. NEW BRAND.
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8. A World of Scintillating/ Awesome/ WOW
Experiences.
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Experiences are as distinct from services as
services are from goods.Joseph Pine James
Gilmore, The Experience Economy Work Is Theatre
Every Business a Stage
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The Experience LadderExperiences
ServicesGoods Raw Materials
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Club Med is more than just a resort its a
means of rediscovering oneself, of inventing an
entirely new me. Source Jean-Marie Dru,
Disruption
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Guinness as a brand is all about community. Its
about bringing people together and sharing
stories.Ralph Ardill, Imagination, in re
Guinness Storehouse
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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
thats not work or home. Its the place our
customers come for refuge.Nancy Orsolini,
District Manager
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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
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WHAT CAN BROWN DO FOR YOU?
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No longer are we only an insurance provider.
Today, we also offer our customers the products
and services that help them achieve their dreams,
whether its financial security, buying a car,
paying for home repairs, or even taking a dream
vacation.Martin Feinstein, CEO, Farmers Group
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Ladder Position MeasureSolutions
Success(Experiences)Services
SatisfactionGoods Six-sigma
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9. Experiences Embracing the Dream Business.
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DREAM A dream is a complete moment in the life
of a client. Important experiences that tempt the
client to commit substantial resources. The
essence of the desires of the consumer. The
opportunity to help clients become what they want
to be. Gian Luigi Longinotti-Buitoni
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Building the Creative
OrganizationChoose a creator The cultural
leader who gives the company an aesthetic point
of view.Hire eclectically Hire collaborators
with different cultures and past histories in
order to balance rigor with emotion.Prepare
vertically Develop a rigorous understanding of
the product and the client.Develop horizontally
Promote curiosity in unrelated disciplines.Lead
emotionally Engender passionate dedication
through vision and freedom.Build for the long
haul Creativity requires a lifetime
commitment.Source Gian Luigi Longinotti-Buitoni
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Emotional Design that Interprets Dreams Zero
defects Only the starting point.Love at first
sight.Design for the five senses.Develop to
expand the Main Dream.Design so as to seduce
through the peripheral senses.Source Gian
Luigi Longinotti-Buitoni
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The marketing of Dreams (Dreamketing)Dreamketing
Touching the clients dreams.Dreamketing The
art of telling stories and entertaining.Dreamketi
ng Promote the dream, not the product.Dreamketin
g Build the brand around the main
dream.Dreamketing Build the buzz, the hype,
the cult.Source Gian Luigi Longinotti-Buitoni
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Constantly Magnify Perceived ValueMaximize your
value-added by fulfilling the dreams of your
clients.Only invest in what is valuable for
your client.Dont let the short-term results
weaken the long-term value of your
brand.Balance rigorous control of the financial
endeavor with the emotional management of your
brand.Build a financial structure that allows
risk-taking NO RISKSNO DREAMS.Establish
long-term price power in order to avoid the
trap of the commodity product.Source Gian
Luigi Longinotti-Buitoni
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10. It all adds up to THE BRAND.
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The Heart of Branding
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WHO ARE WE?
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WHATS OUR STORY?
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We are in the twilight of a society based on
data. As information and intelligence become the
domain of computers, society will place more
value on the one human ability that cannot be
automated emotion. Imagination, myth, ritual -
the language of emotion - will affect everything
from our purchasing decisions to how we work with
others. Companies will thrive on the basis of
their stories and myths. Companies will need to
understand that their products are less important
than their stories.Rolf Jensen, Copenhagen
Institute for Future Studies
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A great company is defined by the fact that it
is not compared to its peers.Phil Purcell,
Morgan Stanley
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11. BRAND TALENT!
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From 1, 2 or youre out JW to Best
Talent in each industry segment to build best
proprietary intangibles EMSource Ed
Michaels, War for Talent
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V. NEW BUSINESS. NEW LEADERSHIP.
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13. Leading in Totally Screwed-Up Times.
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Leaders dont just make products and make
decisions. Leaders make meaning. John Seeley
Brown
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G.H. Create a cause, not a business.
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I never, ever thought of myself as a
businessman. I was interested in creating things
I would be proud of. Richard Branson
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Im not comfortable unless Im
uncomfortable.Jay Chiat
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If things seem under control, youre just not
going fast enough.Mario Andretti
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Reward excellent failures. Punish mediocre
successes.Phil Daniels, Sydney exec
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Lets make a dent in the universe.
Steve Jobs
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The greatest dangerfor most of usis not that
our aim istoo highand we miss it,but that it
istoo lowand we reach it.Michelangelo
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Thank You!