Tom Peters

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Tom Peters Re-Imagine2006!Business
Excellence in a Disruptive AgeInvestec/Mauriti
us/10March2006
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Slides at tompeters.comshort, long
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The Pepsi Challenge
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Re-imagine! Not Your Fathers World.
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THREE BILLION NEW CAPITALISTS Clyde Prestowitz
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December 9, 2005 Ogre to Slay? Outsource It to
Chinese (New York Times, page 1news section).
The factory Fuzhou, China. The workers
youngsters logging 12-hour shifts. Their
clientele youngsters from Seoul to San
Francisco. The work The Chinese youngsters
are playing the early levels of video games for
their affluent clients, who want to avoid the
pain and time associated with those annoying
first few levels.
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WE ARE BEGINNING TO ACQUIRE DIRECT AND
DELIBERATE CONTROL OVER THE EVOLUTION OF ALL
LIFE FORMS ON THE PLANET.Source Juan
Enriquez, As The Future Catches You
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the metabolically dominant soldierSource
Radical Evolution The Promise and Peril of
Enhancing Our Minds, Our Bodiesand What It Means
to Be Human, Joel Garreau
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New Economy?Genentech, Amgen gt Merck
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New Economy?Sergey, Larry gt Harvard
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1. Re-imagine Permanence The Naked Emperor
Problem!
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Pathetic!
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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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Rate of Leaving F5001970-1990 4XSource
The Company, John Micklethwait Adrian
Wooldridge (1974-200 One-half biggest 100
disappear)
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Lessons Learned. GE. Me.
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4/40
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De-cent-ral-iz-a-tion!
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Ex-e-cu-tion!
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Ac-count-a-bil-ity!
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615A.M.
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2. Re-imagine Innovateor Die!!
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Not Optional!
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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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Resist!
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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 Im sure there are success
stories out there, but at this moment I draw a
blank. Mark Sirower, The Synergy Trap
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Almost every personal friend I have in the world
works on Wall Street. You can buy and sell the
same company six times and everybody makes money,
but Im not sure were actually innovating.
Our challenge is to take nanotechnology into the
future, to do personalized medicine Jeff
Immelt/2005
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Theres A and then theres A.
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Scale?
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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/Forbes/08.04 (ROA
Wells, 1.7 Citi, 1.5 BofA, 1.3 J.P. Morgan
Chase, 0.9)
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The slumping giant needs to put more pep in its
funds. But size remains a handicap. Fortune
on Fidelity Magellan/1128.05 (Theres a
practical limitation to running a fund of that
size.Chris Traulsen, analyst, Morningstar)
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TOO BIG TO GROW Why Wall Street has soured on
many of corporate Americas most admired and
feared companies headline, Newsweek, 0313.06
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Spinoffs perform better than IPOs track record,
profits freed from the confines of the parent
more entrepreneurial, more nimble Jerry
Knight/Washington Post/08.05
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Different!
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Franchise Lost! TP How many of you 600
really crave a new Chevy?NYC/IIR/061205
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Beyond the Pension Problem Sedan, Less Than
20,000. Sedan, 20,000-30,000. Sedan,
30,000-40,000. Luxury Sedan. SUV, Less Than
30,000. SUV, More Than 30,000. Pickup Truck.
Minivan. Green Car. Fun To Drive.
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HENEVERMENTIONEDCARS
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???????????Millionaires/Deci-millionaires talk
about shareholder value.Billionaires talk
about product.BigCo CEOsGates, Ellison,
Jobs, Smith, Branson, Buffett, Walton, Schultz,
Murthy
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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)
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Immelt is now identifying technologies with
which GE will systematically set out to build
entirely new industries. StrategyBusiness,
Fall 2005
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Great Companies SET THE AGENDA. (Period.)
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AGENDA SETTERS Set the Table/ Pioneers/
Questors/ AdventurersUS Steel Ford Macys
Sears Litton Industries ITT The Gap
Limited WalMart Tesco PG 3M Intel
IBM Apple Nokia Cisco Dell MCI Sun
Oracle Microsoft Google Enron Schwab GE
Southwest Laker People Express Ogilvy
Chiat/Day Virgin eBay Amazon Sony
Genentech BMW CNN
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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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But what if former head of strategic planning
at Royal Dutch Shell Arie De Geus is wrong in
suggesting, in The Living Company, that firms
should aspire to live forever? Greatness is
fleeting and, for corporations, it will become
ever more fleeting. The ultimate aim of a
business organization, an artist, an athlete or a
stockbroker may be to explode in a dramatic
frenzy of value creation during a short space of
time, rather than to live forever. Kjell
Nordström and Jonas Ridderstråle, Funky Business
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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
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Focus!
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Scales Limitations All Strategy Is Local True
competitive advantages are harder to find and
maintain than people realize. The odds are best
in tightly drawn markets, not big, sprawling
ones Title/Bruce Greenwald Judd
Kahn/HBR09.05
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Big WinnersLousy industry Specialty
(Ignored/No competition) Smaller than
competitors4 Traits Sweet spot Agility
Discipline FOCUSSource Alfred Marcus, Big
Winners and Big Losers The 4 Secrets of
Long-term Business and Failure
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Op-ed. Wall Street Journal. 2 March 2006
Boutique vs. Behemoth Upstarts Steal Market
Share from the Investment Banks.
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The Benefits of FOCUSED EXCELLENCE
Shouldice/Hernia Repair 30 min, 1
recurrence. Avg 90 min, 10-15
recurrence.Source Complications, Atul Gawande
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Easy!
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Innovations Saviors-in-WaitingDisgruntled
CustomersOff-the-Scope CompetitorsRogue
EmployeesFringe SuppliersWayne Burkan, Wide
Angle Vision Beat the Competition by Focusing on
Fringe Competitors, Lost Customers, and Rogue
Employees
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We become who we hang out with!
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Measure Strangeness/Portfolio
QualityStaffConsultantsVendorsOut-sourcing
Partners (, Quality)Innovation Alliance
PartnersCustomersCompetitors (who we
benchmark against) Strategic Initiatives
Product Portfolio (LineEx v. Leap)IS/IT
ProjectsHQ LocationLunch MatesLanguageBoard
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Hard!
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The Bottleneck Is at the Top of the
BottleWhere 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? At the top!
Gary Hamel/Harvard Business Review
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Bold!
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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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Reward excellent failures. Punish mediocre
successes.Phil Daniels, Sydney exec
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Action!
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Execution is the job of the business leader.
Larry Bossidy Ram Charan/ Execution The
Discipline of Getting Things Done
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Execution is a systematic process of
rigorously discussing hows and whats,
tenaciously following through, and ensuring
accountability. Larry Bossidy Ram Charan/
Execution The Discipline of Getting Things Done
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Relentless!Churchill, Grant, Patton, Welch,
Bossidy, Nardelli (GE execs), UPS, FedEx,
Microsoft/Gates-Ballmer, Eisner, Weill, eBay,
Nixon-Kissinger, Gerstner, Rice, Jordan, Armstrong
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Measurable!
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Innovation Index How many of your Top 5
Strategic Initiatives/Key Projects score 8 or
higher (out of 10) on a Weirdness/
Profundity/ Wow/ Gaspworthy/
Game-changer Scale?
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Personal!
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Step 1 Buy a Mirror!
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The First step in a dramatic organizational
change program is obviousdramatic personal
change! RG
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The Pepsi Challenge
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3. Re-imagine Organizing The White-Collar
Tsunami and the Professional Service Firm (PSF)
Imperative.
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Disintermediation is overrated. Those who
fear disintermediation should in fact be afraid
of irrelevancedisintermediation is just another
way of saying that youve become irrelevant to
your customers. John Battelle/Point/Advertisin
g Age/07.05
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Answer Professional Service Firm/PSF!Departmen
t Head to Managing Partner, IS HR, RD,
etc. Inc.
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The PSF35 Thirty-Five Professional Service
Firm Marks of Excellence
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The PSF35 The Work The
Legacy1. CRYSTAL CLEAR POINT OF VIEW (Every
Practice Group If you cant explain your
position in eight words or less, you dont
have a positionSeth Godin)2. DRAMATIC
DIFFERENCE (We are the only ones who do what
we doJerry Garcia)3. Stretch Is Routine
(Never bite off less than you can
chewanon.)4. Eye-Appetite for Game-changer
Projects (Excellence at Assembling Best
TeamFast) 5. Playful Clients (Adventurous
folks who unfailingly Aim to Change the
World)6. Small Uneconomic Clients with Big
Aims 7. Life Is Too Short to Work with Jerks
(Fire lousy clients)8. OBSESSED WITH LEGACY
(Practice Group and Individual Dent the
UniverseSteve Jobs)9. Fire-on-the-spot Anyone
Who Says, Law/Architecture/Consulting/
I-banking/ Accounting/PR/Etc. has become a
commodity 10. Consistent with 9 above DO
NOT SHY AWAY FROM THE WORD (IDEA)
RADICAL
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?????Do good (excellent?!) workMake a lot of
money
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Gaspworthy!
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The PSF35 The Client
Experience11. Always team with client full
partners in achieving memorable results (Wanted
Chimeras of Moonstruck Minds!)12. We
will seek assistance Anywhere to assemble the
Best-in- Planet Team for the Project13.
Client Team Members routinely declare that
working with us was the Peak Experience
of my Career14. The jobs not done until
implementation is 100.00 complete (Those
who dont get it must go)15. IMPLEMENTATION IS
NOT COMPLETE UNTIL THE CLIENT HAS EXPERIENCED
CULTURE CHANGE16. IMPLEMENTATION IS NOT
COMPLETE UNTIL SIGNIFICANT TECHNOLOGY
TRANSFER HAS TAKEN PLACE-ROOT (Teach a man
to fish )17. The Final Exam DID WE MAKE A
DRAMATIC, LASTING, GAME-CHANGING DIFFERENCE?
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The PSF35 The People The
Leadership18. TALENT FANATICS (Best-Coolest
place to work)19. EYE FOR THE PECULIAR (Hiring
Go beyond same old, same old) 20. Early
Opportunities (vs. Wait your turn) 21. Up or
Out (Based on Legacy/Mentoring as much as
Billings/Rainmaking)22. Slide the Old
Aside/Make Room for Youth (Find oldsters
new roles?)23. TALENT IS OBSESSED WITH RENEWAL
FROM DAY 1 TO DAY R R Retirement24.
Office/Practice Leaders Evaluated Primarily on
Mentoring-Team Building Skills 25. A
PROPRIETARY TALENT DEVELOPMENT PROCESS
(GE) 26. Team Leadership Skills Valued Early27.
Partner with B.I.W. Best In World Outsiders as
Needed and to Infuse Different Views
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The PSF35 The Firm The
Brand28. EAT-SLEEP-BREATHE-OOZE INTEGRITY (My
life is my messageGandhi) 29. Excellence
in EXECUTION 100.00 of the Time30. Drop
everything/Swarm to Support a Harried-On
The Verge Team31. SPEND ON RD LIKE A TECH
FIRM. 32. A PROPRIETARY METHODOLOGY (FBR,
McKinsey, Chiat Day, IDEO, old EDS) 33.
BRAND MANIACS (Organize Around a Point of View
Worth BROADCASTING) 34. PASSION!
ENTHUSIASM! 35. EXCELLENCE. ALWAYS.
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Static/ImitativeIntegrity.Quality.Excellence.
Continuous Improvement.Superior Service (Exceeds
Expectations.)Completely Satisfactory
Transaction.Smooth Evolution.Market
Share.Dynamic/DifferentDramatic
Difference!Disruptive!Insanely Great!
(Quality)Life-(Industry-)changing
Experience!Game-changing!WOW!Surprise!Delight!
Breathtaking!Punctuated Equilibrium!Market
Creation!
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4. Re-imagine Businesss Fundamental Value
Proposition PSFs Unbound, or Fighting
Inevitable Commoditization via The
Gamechanging Solutions Imperative.
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Up, Up, Up, Up the Value-added Ladder.
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55B
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And the M Stands for ?Gerstners IBM
Systems Integrator of choice./BW (Lou, help
us turn all this into that long-promised
revolution. ) IBM Global Services
(Integrated Systems Services Corp.) 55B
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Planetary Rainmaker-in-Chief!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
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The Value-added Ladder/Stuff n ThingsGoods
Raw Materials
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The Value-added Ladder/Stuff TransactionsServ
icesGoods Raw Materials
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The Value-added Ladder/Opportunity-seeking
Gamechanging SolutionsServicesGoods Raw
Materials
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Game-changing Solutions Core Value-add
MechanismPSFs (Professional Service Firm
model)Wow Projects (Different vs
Better)Brand Yous(Distinct or Extinct)
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5. Re-imagine Enterprise as Theater A World of
Scintillating Experiences.
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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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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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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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The Value-added Ladder/Memorable
ConnectionScintillating Experiences
Gamechanging SolutionsServicesGoods Raw
Materials
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The Value-added Ladder/EmotionDreams Come
TrueScintillating Experiences Gamechanging
Solutions/Business AdvantageServicesGoods Raw
Materials
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Lovemark Dreams Come True Awesome
ExperiencesGamechanging SolutionsServicesGoods
Raw Materials
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Tattoo Brand What of users would tattoo the
brand name on their body?
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Top 10 Tattoo BrandsHarley . 18.9Disney
.... 14.8Coke . 7.7Google .... 6.6Pepsi ....
6.1Rolex . 5.6Nike . 4.6Adidas .
3.1Absolut . 2.6Nintendo . 1.5BRANDsense
Build Powerful Brands through Touch, Taste,
Smell, Sight, and Sound, Martin Lindstrom
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6. Re-imagine Excellence I The Talent Obsession.
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The Creative Age is a wide-open game.
Richard Florida, The Rise of the Creative Class
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Brand Talent.
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THE FUTURE BELONGS TO SMALL POPULATIONS
WHO BUILD EMPIRES OF THE MIND AND WHO IGNORE
THE TEMPTATION OFOR DO NOT HAVE THE OPTION
OFEXPLOITING NATURAL RESOURCES.Source Juan
Enriquez/As the Future Catches You
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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, Organizing Genius
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PARCs Bob Taylor Connoisseur of Talent
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The Cracked Ones Let in the LightOur 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
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intrepid, unprincipled, reckless, predatory,
boundless ambition, civilized in externals but a
savage at heart.
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WellingtonNelsonDisraeliChurchillMontgomeryTh
atcher
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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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A review of Jack and Suzy Welchs Winning claims
there are but two key differentiators that set GE
culture apart from the herd First Separating
financial forecasting and performance
measurement. Performance measurement based, as it
usually is, on budgeting leads to an epidemic of
gaming the system. GEs performance measurement
is divorced from budgetingand instead reflects
how you do relative to your past performance and
relative to competitors performance ie its
about how you actually do in the context of what
happened in the real world, not as compared to a
gamed-abstract plan developed last year.
Second Putting HR on a par with finance and
marketing.
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Re-imaginePeople Power The Talent50
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7. Re-imagine Leadershi The Passion Imperative.
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Create a Cause!
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Management has a lot to do with answers.
Leadership is a function of questions. And the
first question for a leader always is Who do we
intend to be? Not What are we going to do? but
Who do we intend to be? Max De Pree,
Herman Miller
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Find em!
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Leaders do people. Period. Anon.
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Make It a Grand Adventure!
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Quests!
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Organizing Genius / Warren Bennis and Patricia
Ward BiedermanGroups become great only when
everyone in them, leaders and members alike, is
free to do his or her absolute best.The best
thing a leader can do for a Great Group is to
allow its members to discover their greatness.
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Leaderships Mount Everest allow its members
to discover their greatness.
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The role of the Director is to create a space
where the actor or actress can become more than
theyve ever been before, more than theyve
dreamed of being. Robert Altman, Oscar
acceptance, 2006
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Try It!
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Sams Secret 1!
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Demand Action!
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We have a strategic plan. Its called doing
things. Herb Kelleher
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Dispense Enthusiasm!
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Nothing is so contagious as enthusiasm.
Samuel Taylor Coleridge
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Excellence. Always.
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Cirque du Soleil!
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ExIn 1982-2002/Forbes.comDJIA 10,000 yields
85,000 EI 10,000 yields 140,050
Excellence Index/Basket of 32 publicly traded
stocks
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Avoid Moderation!
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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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Nelsons secret Other admirals more
frightened of losing than anxious to win
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Free the Lunatic Within!
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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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!