Tom Peters

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Tom Peters Re-Imagine!Business Excellence
in a Disruptive AgeAvaya/05October2005
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Slides at tompeters.com
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Context.
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3,000,000,000
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THREE BILLION NEW CAPITALISTS Clyde Prestowitz
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26m
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43h
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3,000,000,000
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A focus on cost-cutting and efficiency has
helped many organizations weather the downturn,
but this approach will ultimately render them
obsolete. Only the constant pursuit of innovation
can ensure long-term success. Daniel Muzyka,
Dean, Sauder School of Business, Univ of British
Columbia (FT/09.17.04)
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It is not the strongest of the species that
survives, nor the most intelligent, but the one
most responsive to change. Charles Darwin
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No!
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Not a single company that qualified as having
made a sustained transformation ignited its leap
with a big acquisition or merger. Moreover,
comparison companiesthose that failed to make a
leap or, if they did, failed to sustain itoften
tried to make themselves great with a big
acquisition or merger. They failed to grasp the
simple truth that while you can buy your way to
growth, you cannot buy your way to greatness.
Jim Collins/Time/11.29.04
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I dont believe in economies of scale. You dont
get better by being bigger. You get worse. Dick
Kovacevich/Wells Fargo/Forbes08.2004 (ROA
Wells, 1.7 Citi, 1.5 BofA, 1.3 J.P. Morgan
Chase, 0.9)
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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.SP 500 from 1957 to 1997
74 members of the Class of 57 were alive in 97
12 (2.4) of 500 outperformed the market from
1957 to 1997.Source Dick Foster Sarah
Kaplan, Creative Destruction Why Companies That
Are Built to Last Underperform the Market
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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 Buy a very
large one and just wait. Paul Ormerod, Why
Most Things Fail Evolution, Extinction and
Economics
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Yes!
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To grow, companies need to break out of a
vicious cycle of competitive benchmarking and
imitation. W. Chan Kim René Mauborgne, Think
for Yourself Stop Copying a Rival, Financial
Times/08.11.03
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Innovation! NOTImitation
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Value innovation is about making the
competition irrelevant by creating uncontested
market space. We argue that beating the
competition within the confines of the existing
industry is not the way to create profitable
growth. Chan Kim Renée Mauborgne (INSEAD),
from Blue Ocean Strategy (The Times/London/01.20.2
005)
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Acquisitions are about buying market share.
Our challenge is to create markets. There is a
big difference. Peter Job, CEO, Reuters

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GH/TP Get better vs Get different
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The SE22 Origins of Sustainable
Entrepreneurship.
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SE22/Origins of Sustainable
Entrepreneurship 1. Genetically disposed to
Innovations that upset apple carts (3M, Apple,
FedEx, Virgin, BMW, Sony, Nike, Schwab,
Starbucks, Oracle, Sun, Fox, Stanford University,
MIT) 2. Perpetually determined to outdo oneself,
even to the detriment of todays winners
(Apple, Cirque du Soleil, Nokia, FedEx) 3. Treat
History as the Enemy (GE) 4. Love the Great
Leap/Enjoy the Hunt (Apple, Oracle, Intel, Nokia,
Sony) 5. Use Strategic Thrust Overlays to
Attack Monster Problems (Sysco, GSK, GE,
Microsoft) 6. Establish a Be on the COOL Team
Ethos. (Most PSFs, Microsoft) 7. Encourage
Vigorous Dissent/Genetically Noisy (Intel,
Apple, Microsoft, CitiGroup, PepsiCo) 8.
Culturally as well as organizationally
Decentralized (GE, JJ, Omnicom, Virgin) 9.
Multi-entrepreneurship/Many Independent-minded
Stars (GE, PepsiCo, J J)
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HPs Big Duh!Decentralize (90B)Undo
MatrixAccountabilitySource HP Says
Goodbye To Drama/BW/09.05/re Mark Hurds first
5 months
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SE22/Origins of Sustainable
Entrepreneurship 10. Keep decentralizingtireles
s in pursuit of wiping out Centralizing
Tendencies (JJ, Virgin) 11. Scour the world for
Ingenious Alliance Partnersespecially
exciting start-ups (Pfizer) 12. Acquire for
Innovation Talent, not Market Share
(Cisco, GE, Omnicom) 13. Dont overdo pursuit of
synergy (GE, JJ, Time Warner) 14.
Execution/Action Bias Just do it dont obsess
on how it fits the business model. (3M, J
J) 15. Find and Encourage and Promote
Strong-willed/Hyper- smart/Independent
people (GE, PepsiCo, Microsoft) 16. Support
Internal Entrepreneurs/Intrapreneurs (3M,
Microsoft) 17. Ferret out Talent anywhere and
everywhere/No limits approach to
retaining top talent (Nike, Virgin, GE, PepsiCo)
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SE22/Origins of Sustainable
Entrepreneurship 18. Unmistakable Results
Accountability focus from the get-go to the
grave (GE, New York Yankees, PepsiCo) 19. Up or
Out (GE, McKinsey, big consultancies and law
firms and ad agencies and movie studios
in general) 20. Competitive to a fault! (GE, New
York Yankees, News Corp/Fox,
PepsiCo) 21. Bi-polar Top Team, with Unglued
Innovator 1, powerful Control Freak 2
(Oracle, Virgin) (Watch out when 2 is
missing Enron) 22. Masters of Loose-Tight/Hard-no
sed about a very few Core Values,
Open-minded about everything else (Virgin,
Horatio Nelson)
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Bang!
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No Wiggle Room! Incrementalism is innovations
worst enemy. Nicholas Negroponte
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Beware of the tyranny of making Small Changes to
Small Things. Rather, make Big Changes to Big
Things. Roger Enrico, former Chairman, PepsiCo
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IS/IT Power Tools for Power Strategies! TP
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Reward excellent failures. Punish mediocre
successes.Phil Daniels, Sydney exec
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Up! Up!
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And the M Stands for ?Gerstners IBM
Systems Integrator of choice. (BW) IBM Global
Services 55B
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Big Browns New Bag UPS Aims to Be the Traffic
Manager for Corporate America Headline/BW/07.19.
2004
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Closing/selling Boeings 8,000-person facility
in Wichita was an important decision in moving
forward with Boeings long-term strategy of
becoming a large-scale integrator. The Wichita
Eagle/06.16.2005
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Answer PSF!Professional Service
FirmDepartment Head to Managing
Partner, HR IS, RD,etc. Inc.
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Experience Ladder/PG-TPSolutionsServicesGoods
Raw Materials
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Up! Up! Up!
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Experiences are as distinct from services as
services are from goods.Joe Pine Jim
Gilmore, The Experience Economy Work Is Theatre
Every Business a Stage
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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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2/503Q04
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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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With its carefully conceived mix of colors and
textures, aromas and music, Starbucks is more
indicative of our era than the iMac. It is to the
Age of Aesthetics what McDonalds was to the Age
of Convenience or Ford was to the Age of Mass
Productionthe touchstone success story, the
exemplar of all that is good and bad about the
aesthetic imperative. Every Starbucks store is
carefully designed to enhance the quality of
everything the customers see, touch, hear, smell
or taste, writes CEO Howard Schultz. Virginia
Postrel, The Substance of Style How the Rise of
Aesthetic Value Is Remaking Commerce, Culture and
Consciousness
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Experience Ladder/PG-TPAwesome
ExperiencesSolutionsServicesGoodsRaw Materials
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Sales per Square Foot/GroceryAlbertsons
384WalMart 415Whole Foods 798
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Up! Up! Up! Up!
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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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Planetary Rainmaker-in-ChiefSam Palmisanos
strategy is to expand techs borders by pushing
usersand entire industriestoward radically
different business models. The payoff for IBM
would be access to an ocean of revenuePalmisano
estimates it at 500 billion a yearthat
technology companies have never been able to
touch. Fortune/06.14.04
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Experience Ladder/PG-TPDreams Come True
Awesome ExperiencesSolutionsServicesGoodsRaw
Materials
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IBM, UPS Dream Merchants!
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One companys answer CXOChief eXperience
Officer
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CDMChief Dream Merchant
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CROChief Revenue Officer
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Analysts said we dont care about revenue, just
give us the bottom line. They preferred cost
cutting, as long as they could see two or three
years of EPS growth. I preached revenue and the
analysts eyes would glaze over. Now revenue is
in because so many got caught, and earnings
went to hell. They said, Oh my gosh, you need
revenues to grow earnings over time. Well, Duh!
Dick Kovacevich, Wells Fargo (in ABA Banking
Journal)
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Bedrock!
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Human creativity is the ultimate economic
resource. Richard Florida, The Rise of the
Creative Class
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Brand Talent.
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Leaders do people. P-e-r-i-o-d. Anon.
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Les Wexner From sweaters to people!
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Did We Say Talent Matters?The top software
developers are more productive than average
software developers not by a factor of 10X or
100X, or even 1,000X, but 10,000X. Nathan
Myhrvold, former Chief Scientist, Microsoft
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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
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Our MissionTo develop and manage talentto
apply that talent,throughout the world, for the
benefit of clientsto do so in partnership to
do so with profit.WPP
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DD21M
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Bosses.
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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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If it works, its obsolete. Marshall McLuhan
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Offense!
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Nelsons secret Other admirals more
frightened of losing than anxious to win
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Action!
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We have a strategic plan. Its called doing
things. Herb Kelleher
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Lunacy!
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Kevin Roberts Credo1. Ready.
Fire! Aim.2. If it aint broke ... Break it!3.
Hire crazies.4. Ask dumb questions.5. Pursue
failure.6. Lead, follow ... or get out of the
way!7. Spread confusion.8. Ditch your
office.9. Read odd stuff.10. Avoid moderation!
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You cant behave in a calm, rational manner.
Youve got to be out there on the lunatic
fringe. Jack Welch
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Step 1.
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The First step in a dramatic organizational
change program is obviousdramatic personal
change! RG
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You must be the change you wish to see in the
world. Gandhi