Tom Peters

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Tom Peters Re-Imagine!Business Excellence
in a Disruptive Age10.12.2003
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Slides at tompeters.com
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It is the foremost taskand responsibilityof
our generation to re-imagine our enterprises,
private and public from the Foreword, Re-imagine
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Uncertainty is the only thing to be sure of.
Anthony Muh,head of investment in Asia,
Citigroup Asset Management 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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Either we modernize or we will be modernized by
the unremitting force of the markets. Gerhard
Schroeder
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You must become an ignorant man againAnd see the
sun again with an ignorant eyeAnd see it clearly
in the idea of it. --Wallace
Stevens/Notes Toward a Supreme Fiction
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A California biotechnology company has put the
entire sequence of the human genome on a single
chip, allowing researchers to conduct on the
complex relationships between the 30,000 genes
that make up a human being in a single
experiment. Page 1, Financial Times/10.03.2003
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Sequenom/David Ewing Duncan/Wired11.02Sequenom
has industrialized the SNP single nucleotide
polymorphisms identification process. This,
Im told, is the first time a healthy human has
ever been screened for the full gamut of
genetic-disease markers. On the horizon
multi-disease gene kits, available at WalMart,
as easy to use as home-pregnancy tests. You
cant look at humanity separate from machines
were so intertwined were almost the same
species, and the difference is getting smaller.
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Help! Theres nobody in the cockpit. In the
future, will the airlines no longer need
pilots?Grumman Global Hawk/ 24 hours/ Edwards
to South AustraliaSource The
Economist/12.21.2002
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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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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 11 a virtual state proved
that modern societies are vulnerable as never
before.Time/09.09.2002
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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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From Weapon v. Weapon To
Org structure v. Org structure
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Our military structure today is essentially one
developed and designed by Napoleon.Admiral
Bill Owens, former Vice Chairman, Joint Chiefs of
Staff
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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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In an era when terrorists use satellite phones
and encrypted email, US gatekeepers stand armed
against them with pencils and paperwork, and
archaic computer systems that dont talk to each
other.Boston Globe (09.30.2001)
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Dawn Meyerreicks, CTO of the Defense Information
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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The mechanical speed of combat vehicles has not
increased since Rommels day, so the difference
is all in the operational speed, faster
communications and faster decisions. Edward
Luttwak, on the unprecedented pace of the move
toward Baghdad
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A Big Electronics Show, the Buzz Is All About
Connections headline, New York Times/
01.13.2003/ Consumer Electronics Show
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Our entire facility is digital. No paper, no
film, no medical records. Nothing. And its all
integratedfrom the lab to X-ray to records to
physician order entry. Patients dont have to
wait for anything. The information from the
physicians office is in registration and vice
versa. The referring physician is immediately
sent an email telling him his patient has shown
up. Its wireless in-house. We have 800
notebook computers that are wireless. Physicians
can walk around with a computer thats
pre-programmed. If the physician wants, well go
out and wire their house so they can sit on the
couch and connect to the network. They can review
a chart from 100 miles away.David Veillette,
CEO, Indiana Heart Hospital (HealthLeaders/12.2002
)
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If early soldiers idealized Napoleon or Patton,
network-centric warriors admire WalMart, where
point-of-sale scanners share information on a
near real-time basis with suppliers and also
produce data that is mined to help leaders
develop new strategic or tactical plans. WalMart
is an example of translating information into
competitive advantage.Tom Stewart, Business 2.0
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The New Infantry Battalion/New York
Times/12.01.2002Pentagons Urgent Search for
Speed. 270 soldiers (1/3rd normal complement)
140 robotic off-road armored trucks. Every
soldier is a sensor. Revolutionary
capabilities. Find-to-hit 45 minutes to 15
minutes in just one year.
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Erics ArmyFlat.Fast.Agil
e.Adaptable.Light But Lethal.Talent/ I Am
an Army of One.Info-intense.Network-centric.
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Float like a butterfly. Sting like a bee. Ali
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We must not only transform our armed forces but
the Defense Department that serves themby
encouraging a culture of creativity and
intelligent risktaking. We must promote a more
entrepreneurial approach one that encourages
people to be proactive, not reactive, and to
behave less like bureaucrats and more like
venture capitalists one that does not wait for
threats to emerge and be validated, but rather
anticipates them before they appear and develops
new capabilities to dissuade them and deter
them. Donald Rumsfeld, Foreign Affairs
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I Believe 1.
Change will accelerate. DRAMATICALLY.2. We will
RE-INVENT THE WORLD IN THE NEXT TWO
GENERATIONS. (Business Health Care
Politics War Education Fundamentals of
Human Interaction.)3. OPPORTUNITIES are
matchless. 4. You are either ON THE BUS
or OFF THE BUS.5. I WANT TO PLAY! AND YOU?
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How we feel about the evolving future tells us
who we are as individuals and as a civilization
Do we search for stasisa regulated, engineered
world? Or do we embrace dynamisma world of
constant creation, discovery and competition? Do
we value stability and control or evolution and
learning? Do we think that progress requires a
central blueprint, or do we see it as a
decentralized, evolutionary process?? Do we see
mistakes as permanent disasters, or the
correctable byproducts of experimentation? Do we
crave predictability or relish surprise? These
two poles, stasis and dynamism, increasingly
define our political, intellectual and cultural
landscape. Virginia Postrel, The Future and Its
Enemies
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Successful Businesses Dozen Truths TPs 30
Year Perspective1. Insanely Great Quirky
Talent.2. Disrespect for Tradition.3. Totally
Passionate (to the Point of Irrationality) Belief
in What We Are Here to Do.4. Utter
Disbelief at the Bullshit that Marks Normal
Industry Behavior.5. A Maniacal Bias for
Execution and Utter Contempt for Those Who
Dont Get It.6. Speed Demons.7. Up or Out.
(Meritocracy Is Thy Name. Sycophancy Is Thy
Scourge.)8. Passionate Hatred of Bureaucracy.9.
Willingness to Lead the Customer and Take the
Heat Associated Therewith. (Mantra Satan
Invented Focus Groups to Derail True
Believers.)10. Reward Excellent Failures.
Punish Mediocre Successes. 11. Courage to Stand
Alone on Ones Record of Accomplishment
Against All the Forces of Conventional
Wisdom.12. A Crystal Clear Understanding of
Brand Power.
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I. NEW BUSINESS. NEW CONTEXT.
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All Bets Are Off.
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lt1000A.D. paradigm shift 1000s of years1000
100 years for paradigm shift1800s gt prior 900
years1900s 1st 20 years gt 1800s2000 10 years
for paradigm shift 21st century 1000X tech
change than 20th century (the Singularity, a
merger between humans and computers that is so
rapid and profound it represents a rupture in the
fabric of human history)Ray Kurzweil
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Asias rise is the economic event of our age.
Should it proceed as it has over the last few
decades, it will bring the two centuries of
global domination by Europe and, subsequently,
its giant North American offshoot to an end.
Financial Times (09.22.2003)
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Vernor Vinge/Mr. SingularityThe transition
time from human history to post-human singularity
time, Vinge thinks, will be astonishingly
shortmaybe one hundred hours from the first
moment of computer self-awareness to computer
world conquest.Esquire/12.2002
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We are at a pivotal point in history. We are
at one of a half dozen turning points that have
fundamentally changed the way societies are
organized for governance. Philip Bobbitt, The
Shield of Achilles War, Peace, and the Course of
History
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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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I genuinely believe we are living through the
greatest intellectual moment in history.Matt
Ridley, Genome
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We are in a brawl with no rules.Paul Allaire
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S.A.V.
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Strategy meetings held once or twice a year to
Strategy meetings needed several times a week
Source New York Times on Meg Whitman/eBay
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2. The Destruction Imperative.
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It is generally much easier to kill an
organization than change it substantially.
Kevin Kelly, Out of Control
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C.E.O. to C.D.O.
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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
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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 2 or 3 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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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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Mr. Foster and his McKinsey colleagues collected
detailed performance data stretching back 40
years for 1,000 U.S. companies. They found that
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/11.28.2002
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Its just a fact Survivors underperform.
Dick Foster
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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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Far from being a source of comfort, bigness
became a code for inflexibility. John
Micklethwait Adrian Wooldridge, The Company
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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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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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Success Kills!The more successful a company,
the flatter its forgetting curve. Gary Hamel
and C.K. Prahalad
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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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Conglomerates dont work. James Surowiecki,
The New Yorker (07.01,2002)
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MERGERS Why Most Big Deals Dont Pay Off. A
BusinessWeek analysis shows that 61 of buyers
destroyed shareholder wealth. BusinessWeek/10.14
.2002
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Market Share, Anyone? 240 industries
Market-share leader is ROA leader 29 of
the time profit / ROA leaders aggressively
weed out customers who generate low
returnsSource Donald V. Potter, Wall Street
Journal (15 June 1998)
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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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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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Survival of the Fittest Not the Fattest/John
Kay/FT03.27.2003I have heard it from people
who make pharmaceuticals and from people who make
defense equipment. From executives in utilities
and executives in advertising. Among banks and
law firms. .. They all expect their industry to
develop the way the car industry has. In an
increasingly globalized marketplace, maturing
industries will become steadily more
concentrated. Only a small number of big
companies will survive.There is one problem
with these analogies. What is said about the
motor industry is not true.The peak of
concentration in the automobile industry was
reached in the early 1950s and since then there
has been a substantial decline. However you look
at it, small carmakers have been steadily gaining
market share at the expense of large ones. Back
in the 1960s, the 10 largest carmakers had a
market share of 85 percent today it is about 75
percent. Concentration has fallen, even though
weak firms have been repeatedly absorbed through
mergers.As markets evolve, differentiation
becomes steadily more important. Success in the
motor industry comes not from size or scale, but
from developing competitive advantages in
operations and marketing those advantages
internationally. The same is true in
pharmaceuticals and defense equipment, utilities
and banking, telecommunications and media.
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Lessons from the Bees!Since merger mania is
now the rage, what lessons can the bees teach us?
A simple one Merging is not in nature.
Natures process is the exact opposite one of
growth, fragmentation and dispersal. There is no
megalomania, no merging for mergings sake. The
point is that unlike corporations, which just get
bigger, bee colonies know when the time has come
to split up into smaller colonies which can grow
value faster. What the bees are telling us is
that the corporate world has got it all
wrong.David Lascelles, Co-director of The
Centre for the Study of Financial Innovation UK
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The Industrial Revolution was about scale vast
factory complexes, skyscrapers and railway grids
concentrating power in the hands of rulers of
large territories not only responsible rulers
such as Bismarck and Disraeli, but Hitler and
Stalin too. But the post-Industrial Revolution
empowers any one with a cellular phone and a bag
of explosives. Americas military superiority
guarantees that such new adversaries will not
fight according to our notions of fairness they
will come at us by surprise, asymmetrically, at
our weakest points. Robert Kaplan, Warrior
Politics
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TP on
Acquisitions1. Big Big Disaster.
(Statistically.) (There are exceptions e.g.,
Citigroup.)2. Big (GE, Cisco, Omnicon) acquires
small/specialist Good if you can
retain Top Talent.3. Odds on achieving
projected synergies among Mixed Big
cultures 10.4. Max Scale Advantages are
achieved at a smaller size than imagined.5.
Attacked by Big, Mediocre Medium marries
Mediocre Medium to bulk up. Result Big
Mediocrity or worse.6. Any sizeif Great
Focusedcan win, locally or globally.7.
Increasingly, Alliances deliver more value than
mergers and clearly abet flexibility.
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A Bakers Dozen Merger
Messages Private Sector DHS/BTSD1. Attitude
Rules Opportunity or Pain in 2. Unique time
for Deep Re-assessment. (WE MUST RE-INVENT THE
ESSENTIAL IDEA OF HOMELAND SECURITY.)3. THIS
SORT OF THING ONLY HAPPENS ONCE EVERY SEVERAL
DECADES! (I.E. Dont blow the Main Chance!)4.
Avoid getting totally caught up in (necessary)
details. (KEEP YOUR EYE ON THE B-I-G
OPPORTUNITY.)5. Lets assume you only hold this
job for the next few months. MAKE A DAMN
DIFFERENCE EVERY DAMN DAY. 6. What happens in
the next few months is the principal basis by
which your entire professional career will be
judged.7. How well (IMAGINATIVELY!!!) you do
this matters to 280,000,000 Americans.8. Every
morning, say quietly to yourself, GROW UP.
Forget Age Old Turf Disputes. (TURF WARFARE
IS OSAMAs-TERRORISMs NO. 1 OPPORTUNITY.)9.
Inclusiveness matters. Be incredibly careful
about Respect Involvement.10. Score some Quick
Wins. (Rudys Rule.) Needed New Behaviors.
Focus on the Positives. (Bobs Rule.) 11.
BE INSANELY LAVISH IN PRAISE OF SMALL ACTS OF
COOPERATION. (Be publicly brutal to the
smallest act of turf warfare.)12. GOOD
DECISIONS MADE TODAY BEAT GREAT DECISIONS
DELAYED FOR MONTHS. MOMENTUM MORALE
MATTER. DELAY CANCER.13. VISIBILITY RULES!
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The New Ge WayDYB.com
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Top-performing Companies Extremely contentious
boards that regard dissent as an obligation and
that treat no subject as undiscussable Jeffrey
Sonnenfeld, Yale School of Management
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Change the rules before somebody else does.
Ralph Seferian, VP, Oracle
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Most of our predictions are based on very linear
thinking. Thats why they will most likely be
wrong.Vinod Khosla, in GIGATRENDS, Wired
04.01
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The Gales of Creative Destruction29M -44M
73M4M 4M - 0M
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The secret of fast progress is inefficiency,
fast and furious and numerous failures.Kevin
Kelly
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RM A lot of companies in the Valley fail.RN
Maybe not enough fail.RM What do you mean
by that?RN Whenever you fail, it means
youre trying new things.Source Fast Company
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The Silicon Valley of today is built less atop
the spires of earlier triumphs than upon the
rubble of earlier debacles.Newsweek/ Paul Saffo
(03.02)
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... natural selection is death. ... Without huge
amounts of death, organisms do not change over
time. ... Death is the mother of structure. ...
It took four billion years of death ... To invent
the human mind ... The Cobra Event
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Silicon Valley Success Failure?
SecretsPursuit of risk 4 of 20 in V.C.
portfolio go bust 6 lose money 6 do okay 3 do
well 1 hits the jackpotSource The Economist
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Axiom (Hypothesis) We have been screwed by
Benchmarking Best Practice C.I./Kaizen.
Axiom (Hypothesis) We need Masters of
Discontinuity/ Masters of Ambiguity in
discontinuous/ambiguous times.
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Organize for performance customer
satisfaction.Disorganize for renewal
innovation.
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Rose gardeners face a choice every spring how
to prune our roses. 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. You will
reduce each rose plant to a maximum of three
stems. 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 roses core business.
However, if this is an unlucky year late frost,
deer, green-fly invasion, you may lose the main
stems or the whole plant! 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 high tolerance. You will leave more stems on
the plant. You will never have the biggest roses,
but you have a much-enhanced chance of having
roses every year. You will achieve a gradual
renewal of the plant. 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
resourcesthe extra buds drain away nutrients
from the main stem. But in an unpredictable
environment, this policy of tolerance makes the
rose healthier. Tolerance of internal weakness,
ironically, allows the rose to be stronger in the
long run.Arie De Geus, The Living Company
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Japans Science Gap Rice farming culture
uniqueness suppressed. Govt control of R D.
Promotion based on seniority. Consensus vs.
debate. (U.S. friends can be mortal enemies.)
Bias for C.I. vs. bold leaps. Lack of
competition and critical evaluation (peer
review). Syukuro Manabe What we need to create
is job insecurity rather than security to make
people compete more.Hideki Shirakawa, Nobel
laureate, chemistry
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December 2000 Swiss House for Advanced Research
Education. Cambridge, Massachusetts. Xavier
Comtesse You never hear a Swiss say, I want to
change the world. We need to take more risks.
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The Word(s) on Vitality Gary HamelSell By
jettison old crapSpin Out support
entrepreneursSpin In buy young firms
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No Wiggle Room! Incrementalism is innovations
worst enemy. Nicholas Negroponte
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Just Say No I dont intend to be known as the
King of the Tinkerers. CEO, large financial
services company
83
The rules of the marketplace may be cruel, but
they have taught us three valuable lessons. If we
rest on our laurels, we will wither. If we stop
being bold, we will rot. If we dont take leaps
of faith, we cannot lead. J.B. Martin,
UCSFSource Susan Gould, Kerry Weiner, Barbara
Levin, Free Agents
84
Jim Tom. Joined at the hip. Not.
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Huh?Quiet, workmanlike, stoic leaders bring
about the big transformations.--JC
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Pastels?T. Paine/P. Henry/A. Hamilton/T.
Jefferson/B. FranklinA. Lincoln/U. S. Grant/W.
T. ShermanTR/FDR/LBJ/RR/JFKM.L. KingC. de
GaulleM. GandhiW. ChurchillM.
ThatcherPicassoMozartCopernicus/Newton/Einstein
J. Welch/L. Gerstner/L. Ellison/B. Gates/S.
Ballmer/S. Jobs/S. McNealyA. Carnegie/J. P.
Morgan/H. Ford/J.D. Rockefeller/T. A. Edison
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Herman Melville on JPJ intrepid, unprincipled,
reckless, predatory, with boundless ambition,
civilized in externals but a savage at heart.
from Evan Thomas, John Paul Jones Sailor, Hero,
Father of the American Navy
88
a vainglorious self-promoter spoiling for a
fight Arthur Koestler on Galileo
89
Audie Murphy was the most decorated soldier in
WW2. He won every medal we had to offer, plus 5
presented by Belgium and France. There was one
common medal he never won
90
the Good Conduct medal.
91
Men with no vices have very few virtues. A.
Lincoln
92
Whenever anything is being done, I have learned,
it is being done by a monomaniac with a
mission. Peter DruckerWhat set Edison
apart was that, with all his boundless
exaggeration, he conveyed the feeling that he
would succeed. No matter what the obstacles, he
would pound away until they were
demolished. Robert Conot, biographer
93
A really new idea at first has only one
believer. John Masters, wildcatter,
Canadian HunterThe reasonable man adapts
himself to the world the unreasonable one
persists in trying to adapt the world to himself.
Therefore all progress depends on the
unreasonable man. George Bernard Shaw
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All great truths begin as blasphemies.
George Bernard Shaw
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Jim Collins vs. Michael Maccobyquiet,
workmanlike, stoicvs. larger-than-life
leaders/ egoists, charmers, risk-takers with
big visions Carnegie, Rockefeller, Edison,
Ford, Welch, Jobs, Gates
96
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
97
Built to Last v. Built to FlipThe problem with
Built to Last is that its a romantic notion.
Large companies are incapable of ongoing
innovation, of ongoing flexibility.Increasingl
y, successful businesses will be ephemeral. They
will be built to yield something of value and
once that value has been exhausted, they will
vanish.Fast Company (03-00)
98
The Futility of Size Virtualization is the
recognition that territorial size does not solve
economic problems. Economic access must become
the substitute for increasing domain.Richard
Rosecrance, The Rise of the Virtual State
99
In Italy for 30 years under the Borgias they had
warfare, terror, murder, bloodshedand produced
Michelangelo, da Vinci and the Renaissance. In
Switzerland they had brotherly love, 500 years of
democracy and peace, and what did they
producethe cuckoo clock.Orson Welles, as
Harry Lime, in The Third Man
100
Warren Bennis Patricia Ward Biederman/
Organizing Genius Great Groups Dont Last Very
Long!
101
W.A. Mozart 1756 1791 HE CHANGED THE
WORLD AND ENRICHED HUMANITY
102
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
103
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)
104
The Three Levels of InnovationTransformational
SubstantialIncrementalSource Dick Foster,
Business 2.0 (05.01) Note Each level requires
totally different processes!
105
Jane Jacobs Exuberant Variety vs. the Great
Blight of Dullness. F.A. Hayek Spontaneous
Discovery Process. Joseph Schumpeter the
Gales of Creative Destruction.
106
Boyd
107
Eglin Flag 100 AGAINST ZERO DEFECTSGeneral,
if youre not having accidents, your training
program is not what it should be. You need to
kill some pilots.BOYD The Fighter Pilot Who
Changed the Art of War (Robert Coram)
108
Perfection is achieved only by institutions on
the point of collapse. C. Northcote Parkinson
109
OODA Loop/Boyd CycleUnraveling the
competition/ Quick Transients/ Quick Tempo (NOT
JUST SPEED!)/ Agility/ So quick it is
disconcerting (adversary over-reacts or
under-reacts)/ Winners used tactics that caused
the enemy to unravel before the fight (NEVER
HEAD TO HEAD)BOYD The Fighter Pilot Who
Changed the Art of War (Robert Coram)
110
Fast TransientsButtonhook turn (YF16
could flick from one maneuver to another faster
than any aircraft)BOYD The Fighter Pilot Who
Changed the Art of War (Robert Coram)
111
Blitzkrieg is far more than lightning thrusts
that most people think of when they hear the
term rather it was all about high operational
tempo and the rapid exploitation of
opportunity./ Arrange the mind of the
enemy.T.E. Lawrence/ Float like a butterfly,
sting like a bee.Ali BOYD The Fighter Pilot
Who Changed the Art of War (Robert Coram)
112
F86 vs. MiG/Korea/101Bubble canopy (360 degree
view)Full hydraulic controls (The F86 driver
could go from one maneuver to another faster than
the MiG driver)MiG faster in raw
acceleration and turning ability F86 quicker
in changing maneuversBOYD The Fighter Pilot
Who Changed the Art of War (Robert Coram)
113
ManeuveristsBOYD The Fighter Pilot Who
Changed the Art of War (Robert Coram)
114
II. NEW BUSINESS. NEW TECH.
115
3. The White Collar Revolution the Death of
Bureaucracy.
116
108 X 5vs. 8 X 1 540 vs. 8 (-98.5)
117
The coefficient of friction associated with the
grunge of business is amazing!Michael Schrage
118
A bureaucrat is an expensive microchip.Dan
Sullivan, consultant and executive coach
119
IBMs Project eLiza! Self-bootstrapping/
Artilects
120
Dont own nothin if you can help it. If you
can, rent your shoes.F.G.
121
PG Hires Out Employee Services to IBM
Burlington Free Press/09.10.03/on IBMs
10-tear, 400M contract with PG (PG farmed out
IT to HP in May, Facilities to Jones Lang LaSalle
in June)
122
Remember, its emotion and feeling that make the
best song, not necessarily the best technical
rendition. 37 Recording Tips, from Disc Makers
123
Organizations will still be critically important
in the world, but as organizers, not
employers! Charles Handy
124
The virtual corporation is research,
development, design, marketing, financing, legal,
and other headquarters functions with few or no
manufacturing capabilities a company with a
head but no body.Richard Rosecrance, The Rise
of the Virtual State
125
Ford Vehicle brand owner (design, engineer,
and market, but not actually make)Source The
Company, John Micklethwait Adrian Wooldridge
126
UPS used to be a trucking company with
technology. Now its a technology company with
trucks. Forbes, upon naming UPS Company of the
Year in Y2000
127
Deep Blue Redux 2,240 EKGs 1,120 heart
attacks. Hans Ohlin (50 yr old chief of coronary
care, Univ of Lund/SW) 620. Lars Edenbrandts
software 738.Only this time it matters!
128
Most physicians believe that diagnosis cant be
reduced to a set of generalizationsto a
cookbook. How often does my intuition lead me
astray? The radical implication of the Swedish
study is that the individualized, intuitive
approach that lies at the center of modern
medicine is flawedit causes more mistakes than
it prevents. Atul Gawande, Complications
129
Probable parole violations Simple model (age,
of previous offenses, type of crime) beats M.D.
shrinks. 100 studies Statistical formulas gt
Human judgment. In virtually all cases,
statistical thinking equaled or surpassed human
judgment.Atul Gawande, Complications
130
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
131
Vernor Vinge/Mr. SingularityThe transition
time from human history to post-human singularity
time, Vinge thinks, will be astonishingly
shortmaybe one hundred hours from the first
moment of computer self-awareness to computer
world conquest.Esquire/12.2002
132
N.W.O./Holy Moly Unemployment up 2 real wage
growth highest since 60s productivity
soaring.Source BW/02.11.2002
133
E.g. Jeff Immelt 75 of admin, back room,
finance digitalized in 3 years.Source BW
(01.28.02)
134
BW Cover/02.2003IS YOUR JOB NEXT? A New Round
of GLOBALIZATION Is Sending Upscale Jobs
Offshore. They Include Chip Design, Basic
Researcheven Financial Analysis. Can America
Lose These Jobs and Still Prosper?
135
Everybodys Doin It!The leading Indian
outsourcers reckon that the key to their
long-term prosperity is bagging ever larger deals
and moving ever higher up the value chain. The
Economist/01.11.2003
136
GE is a champion of Indias scientists,
technicians, business analysts and graduates,
thousands of whom work at the U.S. conglomerates
offshore service centers in India. They are the
low-cost, high capability vanguard of GEs
outsourcing to India. Along the way, GE has
transformed its cost structure, enhanced its
ability to provide technology services and
incubated a rare world-class industry in India.
FT/06.03.03
137
One Singaporean worker costs as much
as 3 in Malaysia 8
in Thailand 13 in China
18 in India. Source The Straits
Times/08.18.03
138
Outsourcing Trend Called Threat to
Middle-class Workforce USA Today/08.05.03 (Mgt
jobs moving 2000 0 2005
37,000)Loss of Factory Jobs May Have a Long
Fall to Bottom Boston Globe/08.10.03 (75,000
per month during last 18 months)The New Job
Reality Cover/USNWR/08.11.03 (The dearth of
jobs stems from factors signaling a sea change)
139
!!!!!!!!!ebookers PLC
140
Predicted U.S. High-wage Job Losses
2005
2010Managers
37,000 288,000Life sciences
3,700 37,000Design
6,000
30,000Architecture 32,000
184,000Bus Ops
61,000 348,000Computer
109,000 473,000Office
support 588.000
3,300,000Source Forrester Research
(BusinessWeek/08.25.03)
141
4. IS/ IT/ Web On the Bus or Off the Bus.
142
E-commerce is happening the way all the hype
said it would. Internet deployment is happening.
Broadband is happening. Everything we ever said
about the Internet is happening. And it is very,
very early. We cant even glimpse ITs potential
in changing the way people work and live. Andy
Grove (BusinessWeek/August 2003)
143
2.5G, 3G, 4GWindowsSymbianJavaBluetooth
Wi-FiPCs-PDAs-CellphonesE-business vs.
M-businessEtc.
144
Outsiders view (1) Billions are being spent,
even in a down market. (2) NOBODY HAS A CLUE AS
TO WHO THE WINNERSAND LOSERSWILL BE. (3) Yet
you must play. Now. Hard. Fast.
145
100 square feet
146
Dells OptiPlex FacilityBig Job 6 to 8
hours.(80,000 per day)Parts Inventory 100
square feet.
147
Invisible Supplier Has Penneys Shirts All
Buttoned Up From hong Kong, It Tracks Sales,
Restocks Shelves, Ships Right to the Store.
Headline, Wall Street Journal (09.11.03)
148
Our entire facility is digital. No paper, no
film, no medical records. Nothing. And its all
integratedfrom the lab to X-ray to records to
physician order entry. Patients dont have to
wait for anything. The information from the
physicians office is in registration and vice
versa. The referring physician is immediately
sent an email telling him his patient has shown
up. Its wireless in-house. We have 800
notebook computers that are wireless. Physicians
can walk around with a computer thats
pre-programmed. If the physician wants, well go
out and wire their house so they can sit on the
couch and connect to the network. They can review
a chart from 100 miles away.David Veillette,
CEO. Indiana Heart Hospital (Healthleaders/12.2002
)
149
The Real News X1,000,000TowTruckNet.com
150
eRevolution40,000,000 Americans (1 of 2
singles/40 of American adults) went to an online
matchmaking site last month (USNWR/09.29.03)
151
flash mobs (!)
152
Open source is doing for mass innovation what
the assembly line did for mass production. Get
ready for the era when collaboration replaces the
corporation. Thomas Goetz/ Wired/11.2003
(Current methods are not fast enough, not
ambitious enough, or dont take advantage of our
collective creative potential.)
153
Impact No. 1/ Logistics Distribution
WalMart Dell Amazon.com Autobytel.com
FedEx UPS Ryder Cisco Etc. Etc. Ad
Infinitum.
154
Autobytel 400. WalMart 13.Source
BW(05.13.2002)
155
If early soldiers idealized Napoleon or Patton,
network-centric warriors admire WalMart, where
point-of-sale scanners share information on a
near real-time basis with suppliers and also
produce data that is mined to help leaders
develop new strategic or tactical plans. WalMart
is an example of translating information into
competitive advantage.Tom Stewart, Business 2.0
156
From Supply-chain Optimization To
Design-chain OptimizationSource Cadence Design
Systems
157
A Big Electronics Show, the Buzz Is All About
Connections headline, New York Times/
01.13.2003/ Consumer Electronics Show
158
NTT/DoCoMo/i-motion/remote control for your
life/If Tokyo and DoCoMo are the first capitals
of the wireless Internet industry, Helsinki and
Nokia have been the wellsprings of mobile
telephonyFinland leads the world in both
Internet connections and mobile phones per
capita.Source Howard Rheingold/Smart Mobs
159
m-On or Out of the LoopManagers in Finland
always keep their phones on. Customers expect
fast reactions. And if you cant reach a
superior, you make many decisions yourself.
Managers who want to influence decisions of
subordinates must keep their phones open. Risto
Linturi, Finnish m-guru, in Howard Rheingolds
Smart Mobs
160
WebWorld Everything Web as a way to run your
businesss innardsWeb as connector for your
entire supply-demand chain Web as spiders web
which re-conceives the industryWeb/B2B as
ultimate wake-up call to commodity
producersWeb as the scourge of slack,
inefficiency, sloth, bureaucracy, poor customer
dataWeb as an Encompassing Way of LifeWeb
Everything (P.D. to after-sales)Web forces you
to focus on what you do bestWeb as entrée, at
any size, to Worlds Best at Everything as next
door neighbor
161
Jargon Bath!Bureaucracy free Systemically
integrated Internet intense Knowledge based
Time and location free Instantly responsive
Customer centric Mass customization enabled.
162
Translation Bureaucracy free Flat org, no
B.S.Systemically integrated Whole supply chain
tightly wired/ friction-freeInternet intense
Do it all via the WebKnowledge based Open
accessTime and location free Whenever,
whereverInstantly responsive Speed
demonsCustomer centric Customer calls the
shotsMass customization enabled Every product
and service rapidly tailored to client
requirements
163
Message eCommerce is not a technology play! It
is a relationship, partnership, organizational
and communications play, made possible by new
technologies.
164
Message There is no such thing as an effective
B2B or Internet-supply chain strategy in a
low-trust, bottlenecked-communication, six-layer
organization.
165
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
166
Read It Closely We dont sell insurance
anymore. We sell speed. Peter Lewis,
Progressive
167
The New Infantry Battalion/New York
Times/12.01.2002Pentagons Urgent Search for
Speed. 270 soldiers (1/3rd normal complement)
140 robotic off-road armored trucks. Every
soldier is a sensor. Revolutionary
capabilities. Find-to-hit 45 minutes to 15
minutes in just one year.
168
Theres no use trying, said Alice. One cant
believe impossible things. I daresay you
havent had much practice, said the Queen. When
I was your age, I always did it for half an hour
a day. Why, sometimes Ive believed as many as
six impossible things before breakfast.Lewis
Carroll
169
Inet allows you to dream dreams you could
never have dreamed before!
170
Dont rebuild. Reimagine.The New York Times
Magazine on the future of the WTC space in Lower
Manhattan/09.08.2002
171
Supposejust supposethat the Web is a new world
were just beginning to inhabit. Were like the
earlier European settlers in the United States,
living on the edge of the forest. We dont know
whats there and we dont know exactly what we
need to do to find out Do we pack mountain
climbing gear, desert wear, canoes, or all three?
Of course while the settlers may not have known
what the geography of the New World was going to
be, they at least knew that there was a
geography. The Web, on the other hand, has no
geography, no landscape. It has no distance. It
has nothing natural in it. It has few rules of
behavior and fewer lines of authority. Common
sense doesnt hold here, and uncommon sense
hasnt yet emerged. David Weinberger, Small
Pieces Loosely Joined
172
Hyperlinks subvert hierarchy!The Cluetrain
Manifesto
173
Words to Live By Hierarchy is an
organization with its face toward the CEO and its
ass toward the customer.Kjell Nordstrom and
Jonas Ridderstrale, Funky Business
174
Case CRM
175
Anne Busquet/ American ExpressNot Age of the
InternetIs Age of Customer Control
176
Amen!The Age of the Never Satisfied
CustomerRegis McKenna
177
The Web enables total transparency. People with
access to relevant information are beginning to
challenge any type of authority. The stupid,
loyal and humble customer, employee, patient or
citizen is dead.Kjell Nordström and Jonas
Ridderstråle, Funky Business
178
Parents, doctors, stockbrokers, even military
leaders are starting to lose the authority they
once had. There are all these roles premised on
access to privileged information. What we are
witnessing is a collapse of that advantage,
prestige and authority.Michael Lewis, next
179
A seismic shift is underway in healthcare. The
Internet is delivering vast knowledge and new
choices to consumersraising their expectations
and, in many cases, handing them the controls.
Healthcare consumers are driving radical,
fundamental change.Deloitte Research, Winning
the Loyalty of the eHealth Consumer
180
Welcome to D.I.Y. Nation Changes in business
processes will emphasize self service. Your costs
as a business go down and perceived service
goes up because customers are conducting it
themselves. Ray Lane, Oracle
181
Psych 101 Strongest Force on Earth?My need to
be in perceived control of my universe!
182
CRM has, almost universally, failed to live up
to expectations. Butler Group (UK)
183
No! No! No! FT The aim of CRM is to make
customers feel as they did in the pre-electronic
age when service was more personal. Rebuttal
(1) Service sucked in the pre-electronic age.
(2) NewGen believes in the screen! (So do I.)
184
One Persons OpinionTP to reporter Service
is MUCH better! Would you go back to bank
tellers and phone operators? Value that I place
on a smile 3 on a scale of 10. Value I place
on fast accurate digital response 11 on a
scale of 10!!
185
CGEY (Paul Cole) Pleasant Transaction vs.
Systemic Opportunity. Better job of what we do
today vs. Re-think overall enterprise strategy.
186
Here We Go Again Except Its Real This
Time!Bank online 24.3M (10.2002) 2X
Y2000.Wells Fargo 1/3rd 3.3M 50 lower
attrition rate 50 higher growth in balances
than off-line more likely to cross-purchase
happier and stay with the bank much
longer.Source The Wall Street
Journal/10.21.2002
187
Richard Rosecrance, The Rise of the Virtual
State Wealth and Power in the Coming Century
188
The Futility of Size Regarding this issue
the new process of virtualization fully exerts
itself. 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
189
TP Skill at creating, exploiting, and exiting
crucial alliances beats ownership of fixed assets.
190
Whats the Common Denominator?The Dutch the
British the Rothschilds Cargill Sumitomo
the KGB the CIA Mossad Enron WalMart
McKinsey FedEx UPS Mr. Speaker Henry
Kissinger Executive secretaries the Corner
Grocer Women-in-general?
191
Masters of information acquisition, manipulation,
dissemination, and utilization.Networkmeisters.
Agile.Temporary.Virtual is thy
name.Motto Applied information is
power/wealth.
192
III. NEW BUSINESS. NEW VALUE PROPOSITION.
193
5. The PSF SolutionThe Professional Service
Firm Model.
194
Sarah Daddy, what do you do?Daddy Im a
cost center.
195
So what will be the Basic Building Block of the
New Org?
196
Every job done in W.C.W. is also done outside
for profit!
197
Answer PSF!Professional Service
FirmDepartment Head to Managing Partner,
HR IS, etc. Inc.
198
TP to NAPM You are the Rock Stars of the
B2B Age!
199
Message You are Re-invention Evangelists!
200
TP to HRMAC You are the Rock Stars of the
Age of Talent!
201
DD21M
202
Talent Department
203
P.S.F. SummaryH.V.A. Projects (100)Pioneer
ClientsWOW Work (see below)Hot Talent (see
below)Adventurous cultureProprietary Point
of View (Methodology)W.W.P.F. (100)/Outside
Clients (25) When Now!
204
BMWs Designworks/USA gt50 from outside work
205
G.M. The Recruitment and Development of Top
Talent. Period!V.C. Bets on Talent. Bets
on Projects. Period!
206
Dept. Head I Sports G.M.Dept. Head II V.C.
207
eHR/PCCAll HR on the WebProductivity
Consulting CenterSource E-HR A Walk through a
21st Century HR Department, John Sullivan, IHRIM
208
Is There a There There The Ericsson Case1.
50 Mfg to Solectron/Flextronics2. Substantial
RD to India3. Division for licensing
technology4. JV with Sony on crown jewel
handsets5. Net a wireless specialist that
depends on services more than manufacturing, on
knowledge more than metal
Source BW/11.04.02
209
Model PSF
210
(1) Translate ALL departmental
activities into discrete W.W.P.F.
Products.(2) 100 go on the Web.(3)
Non-awesome are outsourced (75??).(4)
Remaining Centers of Excellence are
retained leveraged to the hilt!
211
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)
212
What Do I Do First?One Minute
Excellence!Thomas Watson
213
Culture Change is not Corporate.Culture Change
is not a Program.Culture Change does not take
Years.Culture Change does not start
Today.Culture Change starts Right
Now!Culture Change Lives in the Moment!Culture
Change is Entirely in Your Hands!
214
6. The Heart of the Value Added Revolution PSFs
Unbound/ The Solutions Imperative.
215
Base Case The Sameness Trap
216
Companies have defined so much best practice
that they are now more or less identical.Jesper
Kunde, Unique now ... or never
217
While everything may be better, it is also
increasingly the same.Paul Goldberger on
retail, The Sameness of Things, The New York
Times
218
When we did it right it was still pretty
ordinary.Barry Gibbons on Nightmare No. 1
219
When McDonalds first started exporting its
formula of quality, cleanliness and service, it
was something of a novelty. These days,
quality, cleanliness and service are a givenand
people are becoming more interested in what they
are eating. FT/12.21.2002
220
Nobody brags about going to McDonaldsSF
professional. Subway gt McDs (USA).
221
Customers will try low cost providers
because the Majors have not given them any clear
reason not to.Leading Insurance Industry
Analyst
222
This is a dying business. Everybodys going
after the same writers, the same concepts, the
same audience. Network TV exec, to Fortune
(12 January 1998)
223
Getting Beyond Lip Service!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
224
We make over three new product announcements a
day. Can you remember them? Our customers
cant!Carly Fiorina
225
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 Nordström
and Jonas Ridderstråle, Funky Business
226
Funky Business To succeed we must stop being so
goddamn normal. In a winner-takes-all world,
normal nothing.
227
This is an essay about what it takes to create
and sell something remarkable. It is a plea for
originality, passion, guts and daring. You cant
be remarkable by following someone else whos
remarkable. One way to figure out a theory is to
look at whats working in the real world and
determine what the successes have in common. But
what could the Four Seasons and Motel 6 possibly
have in common? Or Neiman-Marcus and WalMart? Or
Nokia (bringing out new hardware every 30 days or
so) and Nintendo (marketing the same Gameboy 14
years in a row)? Its like trying to drive
looking in the rearview mirror. The thing that
all these companies have in common is that they
have nothing in common. They are outliers.
Theyre on the fringes. Superfast or superslow.
Very exclusive or very cheap. Extremely big or
extremely small. The reason its so hard to follow
the leader is this The leader is the leader
precisely because he did something remarkable.
And that remarkable thing is now takenso its no
longer remarkable when you decide to do it.
Seth Godin, Fast Company/02.2003
228
The Internet is the most effective profit-killer
on earth it stimulates a TRUE FREE MARKET and
a real free market is the most dangerous of
marketplaces for companies selling the SAME OLD
STUFF. To those with COURAGE, free markets are
greatthey help kill off the deadwood competitors
who dont have the courage to changemaking way
for them to LEVERAGE their DRAMATIC DIFFERENCE
into profitable growth.Doug Hall
229
Fight til Death!I thought, What a dreadful
mission I have in life. Id love to get
six-thousand restaurants up to spec, but when I
do its Ho-hum. Its bugged me ever since. Its
one of the great paradoxes of modern business. We
all know distinction is key, and yet in the last
twenty years we have created a plethora of ho-hum
products and services. Just go fly in an
airplane. It could be such an enlightening
experience. Ho-hum. We swim in an ocean of
ho-hum, and Im going to fight it. Im going to
die fighting it. Barry Gibbons
230
The Big Day!
231
09.11.2000 HP bids 18,000,000,000for
PricewaterhouseCoopersconsulting business!
232
These days, building the best server isnt
enough. Thats the price of entry.Ann
Livermore, Hewlett-Packard
233
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).
234
You are headed for commodity hell if you dont
have services.Lou Gerstner on IBMs coming
revolution (1997)
235
ATT President David Dorman Back to long
distance but with bundles of lucrative
corporate services for the likes of Merrill
Lynch, MasterCard, Hyatt. Consumer Dump 25M
subscribers (50)hold on to high
enders.Source BW/05.20.2002
236
Is There a There There The Erics