long excellence ! tom peters/16 august 2013 institute of internal auditors/orlando

LongLong

ExcellenceExcellence!!

Tom Peters/16 August 2013Tom Peters/16 August 2013Institute of Internal Auditors/OrlandoInstitute of Internal Auditors/Orlando

(slides @ tompeters.com/excellencenow.com)(slides @ tompeters.com/excellencenow.com)

ContextContext

““At a party given by a billionaire At a party given by a billionaire on Shelter Island, Kurt Vonnegut on Shelter Island, Kurt Vonnegut

informs his pal, Joseph Heller, informs his pal, Joseph Heller, that their host, a hedge fund that their host, a hedge fund

manager, had made more money manager, had made more money in a single day than Heller had in a single day than Heller had earned from his wildly popular earned from his wildly popular novel novel Catch-22Catch-22 over its whole over its whole

history. Heller responds …history. Heller responds …

‘‘Yes, but I have Yes, but I have something something

he will never he will never have …have …

Enough.Enough.

Source: John Bogle, Source: John Bogle, Enough. The Measures of Money, Business, Enough. The Measures of Money, Business, and Lifeand Life (Bogle is founder of the Vanguard Mutual Fund Group) (Bogle is founder of the Vanguard Mutual Fund Group)

““Too Much Cost, Not Enough Value”Too Much Cost, Not Enough Value”““Too Much Speculation, Not Enough Too Much Speculation, Not Enough

Investment”Investment”““Too Much Complexity, Not Enough Simplicity”Too Much Complexity, Not Enough Simplicity”

““Too Much Counting, Not Enough Trust”Too Much Counting, Not Enough Trust”““Too Much Business Conduct, Not Enough Too Much Business Conduct, Not Enough

Professional Conduct”Professional Conduct”““Too Much Salesmanship, Not Enough Too Much Salesmanship, Not Enough

Stewardship”Stewardship”““Too Much Focus on Things, Not Enough Focus Too Much Focus on Things, Not Enough Focus

on Commitment”on Commitment”““Too Many Twenty-first Century Values, Not Too Many Twenty-first Century Values, Not

Enough Eighteenth-Century Values”Enough Eighteenth-Century Values”““Too Much ‘Success,’ Not Enough Character”Too Much ‘Success,’ Not Enough Character”

Source: Chapter titles from Jack Bogle, Source: Chapter titles from Jack Bogle, Enough. Enough.

““The notion that corporate law requires The notion that corporate law requires directors, executives, and employees to directors, executives, and employees to

maximize shareholder wealth simply maximize shareholder wealth simply

isn’t true.isn’t true. There is no solid leThere is no solid leggal al susupppport for the claim that ort for the claim that

directors and executives in U.S. directors and executives in U.S. ppublic corublic corpporations have an orations have an

enforceable leenforceable leggal dutal dutyy to to maximize shareholder wealthmaximize shareholder wealth.. The idea is fable.”The idea is fable.” —Lynn Stout, professor of corporate —Lynn Stout, professor of corporate

and business law, Cornell Law school, and business law, Cornell Law school, The Shareholder Value The Shareholder Value Myth: How Putting Shareholders First Harms Investors, Myth: How Putting Shareholders First Harms Investors,

Corporations, and the PublicCorporations, and the Public

““Courts uniformly refuse to impose Courts uniformly refuse to impose sanctions on directors or sanctions on directors or

executives for failing to pursue one executives for failing to pursue one purpose over another. purpose over another. In In pparticular, articular,

courts refuse to hold directors of courts refuse to hold directors of ppublic corublic corpporations leorations leggally ally

accountable for failing to maximize accountable for failing to maximize shareholder wealthshareholder wealth.”.” —Lynn Stout,—Lynn Stout,

professor of corporate and business law, Cornell Law school, professor of corporate and business law, Cornell Law school, in in The Shareholder Value Myth: How Putting Shareholders FirstThe Shareholder Value Myth: How Putting Shareholders First

Harms Investors, Corporations, and the Public Harms Investors, Corporations, and the Public

““On the face of it, On the face of it, shareholder value is the shareholder value is the

dumbest idea in the world. dumbest idea in the world. Shareholder value is a Shareholder value is a

result, not a strategy. … result, not a strategy. … Your main constituenciesYour main constituencies are your employees, your are your employees, your

customers and your customers and your products.”products.” —Jack Welch, —Jack Welch, FTFT, 0313.09, page 1 , 0313.09, page 1

““Managers have lost dignity over the past Managers have lost dignity over the past decade in the face of wide spread institutional decade in the face of wide spread institutional

breakdown of trust and self-policing in breakdown of trust and self-policing in

business. business. To reTo reggain societain societyy’s trust, ’s trust, we believe that business leaders we believe that business leaders must embrace a wamust embrace a wayy of lookin of lookingg at at their role that goes betheir role that goes beyyond their ond their resrespponsibilitonsibilityy to the shareholders to the shareholders

to include a civic and to include a civic and ppersonal ersonal commitment to their dutcommitment to their dutyy as as

institutional custodiansinstitutional custodians.. In other In other words, it is time that management became a words, it is time that management became a profession.”profession.” —Rakesh Khurana & Nitin Nohria, “It’s Time To Make —Rakesh Khurana & Nitin Nohria, “It’s Time To Make

Management a True Profession,” HBR/10.08Management a True Profession,” HBR/10.08

Yikes!Yikes!

Corporate conscience/Keeper of the cultureCorporate conscience/Keeper of the cultureCopsCopsRisk evaluators (strategic epicenter of the firm)Risk evaluators (strategic epicenter of the firm)Privacy assessors/guardiansPrivacy assessors/guardiansGlobal puzzle solvers in the Age of Infinite Global puzzle solvers in the Age of Infinite EntanglementsEntanglementsPR managersPR managersSystems cops (overall)Systems cops (overall)Forensic accountantsForensic accountantsMasters of technologyMasters of technologyAdvisors/consigliore to top managementAdvisors/consigliore to top managementAdvisors/consultants to down-the-line units Advisors/consultants to down-the-line units

Really First Really First Things Before Things Before First ThingsFirst Things

““The doctor The doctor interruptsinterrupts after …*after …*

*Source: Jerome Groopman, *Source: Jerome Groopman, How Doctors ThinkHow Doctors Think

18 …18 …

18 … 18 … secondsseconds!!

Listen = “Profession” = Study

= Practice = Evaluation =

Enterprise Value

““Let SilenceLet Silence Do the Heavy Do the Heavy Lifting”Lifting” —chapter title from Susan —chapter title from Susan

Scott, Scott, Fierce Conversations: Achieving Success at Work and in Fierce Conversations: Achieving Success at Work and in Life,Life,

One Conversation at a Time One Conversation at a Time

““EverEveryyoneone has a has a story to tell, if only story to tell, if only

you have the you have the patience to wait for patience to wait for it and not get in the it and not get in the

way of it.”way of it.” —Charles McCarry,—Charles McCarry,

Christopher’s GhostsChristopher’s Ghosts

Suggested addition to your statement of Core Suggested addition to your statement of Core

Values: Values: “We are Effective “We are Effective Listeners—we treat Listening Listeners—we treat Listening

EXCELLENCEEXCELLENCE as the as the Centerpiece of our Centerpiece of our

Commitment to Respect and Commitment to Respect and Engagement and Community Engagement and Community

and Growth.”and Growth.”

““It’s amazing how this It’s amazing how this seemingly small thing— seemingly small thing—

simsimppllyy pa payyiningg fierce fierce attention to another, reallattention to another, reallyy

askinaskingg, reall, reallyy listenin listening,g, even durineven duringg a brief a brief

conversationconversation—can evoke —can evoke such a wholehearted such a wholehearted

response.”response.” —Susan Scott, —Susan Scott, Fierce Conversations: Fierce Conversations:

Achieving Success at Work and in Life, One Conversation at a TimeAchieving Success at Work and in Life, One Conversation at a Time

Really First Really First Things Before Things Before First ThingsFirst Things

XFX = XFX = #1#1**

*Cross-Functional *Cross-Functional eXcellence eXcellence

% XF % XF

lunches*lunches***MeasureMeasure!! Monthly! Part of Monthly! Part of

evaluation! [The PAs Club.]evaluation! [The PAs Club.]

George Crile George Crile (Charlie Wilson’s War)(Charlie Wilson’s War) on Gust on Gust

Avrakotos’ strategy:Avrakotos’ strategy: “He had “He had become something of a become something of a

legend with these legend with these ppeoeopple who manned the le who manned the

underbellunderbelly of the y of the Agency [CIA].”Agency [CIA].”

Suck Down for Success!Suck Down for Success!

“Success doesn’t depend on the number of “Success doesn’t depend on the number of people you know; it depends on the number people you know; it depends on the number

of people you know in of people you know in hihigghh places!”places!”

oror

“Success doesn’t depend on the number of “Success doesn’t depend on the number of people you know; it depends on the number people you know; it depends on the number

of people you know in of people you know in lowlow places!” places!”

““I got toI got to know his know his

secretaries.”secretaries.” —Dick Parsons—Dick Parsons

(as CEO Time Warner, on successfully dealing with Carl Icahn)(as CEO Time Warner, on successfully dealing with Carl Icahn)

Really First Really First Things Before Things Before First ThingsFirst Things

If the regimental commander lost most of his If the regimental commander lost most of his 2nd lieutenants and 1st lieutenants and 2nd lieutenants and 1st lieutenants and

captains and majors, it would be a tragedy. captains and majors, it would be a tragedy.

If he lost his If he lost his serserggeants it would eants it would be a catastrobe a catastropphehe. . The The

Army and the Navy are fully aware that Army and the Navy are fully aware that success on the battlefield is dependent to an success on the battlefield is dependent to an extraordinary degree on its Sergeants and extraordinary degree on its Sergeants and Chief Petty Officers. Does industry have the Chief Petty Officers. Does industry have the

same awareness?same awareness?

Really First Really First Things Before Things Before First ThingsFirst Things

In the Army, In the Army, 33--star star ggeneralsenerals worry about worry about

training. In most training. In most businesses, it's a “ho businesses, it's a “ho hum” mid-level staff hum” mid-level staff

function.function.

I would hazard a guess I would hazard a guess that most CEOs see IT that most CEOs see IT

investments as a investments as a “strategic necessity,” “strategic necessity,”

but see training but see training expenses as “a expenses as “a

necessary evil.” necessary evil.”

Really First Really First Things Before Things Before First ThingsFirst Things

Meetings Meetings #1#1:: EverEveryy meetin meetingg that does not stir the that does not stir the

imaimaggination and curiosity of ination and curiosity of attendees and increase attendees and increase

bondinbondingg and coo and coopperation and eration and enenggaaggement and sense of ement and sense of worth and motivate raworth and motivate rappid id

action and enhance action and enhance enthusiasm is a enthusiasm is a ppermanentlermanentlyy

lost olost opppportunitortunity.y.

Really First Really First Things Before Things Before First ThingsFirst Things

Hard is Soft.Hard is Soft.Soft is Hard.Soft is Hard.

Hard Hard [numbers, plans][numbers, plans] is Soft.is Soft.Soft Soft [people/relationships][people/relationships] is Hard.is Hard.

““If I could have chosen not to tackle the IBM culture If I could have chosen not to tackle the IBM culture head-on, I probably wouldn’t have. My bias coming in head-on, I probably wouldn’t have. My bias coming in was toward strategy, analysis and measurement. In was toward strategy, analysis and measurement. In comparison, changing the attitude and behaviors of comparison, changing the attitude and behaviors of

hundreds of thousands of people is very, very hard. hundreds of thousands of people is very, very hard. Yet I came to see in my time at IBM that culture

isn’t just one aspect of the game …

it it isis the the game.”game.”

Source: Lou Gerstner, Source: Lou Gerstner, Who Says Elephants Can’t DanceWho Says Elephants Can’t Dance

Systems Have Their Place: SECOND PlaceSystems Have Their Place: SECOND Place

Case #1/United States Air Force Tactical Air Command/ Case #1/United States Air Force Tactical Air Command/ GEN Bill Creech/“Drive bys” GEN Bill Creech/“Drive bys” Case #2/Milliken & Company/CEO Roger Milliken/the 45-Case #2/Milliken & Company/CEO Roger Milliken/the 45-minute grilling minute grilling Case #3/Johns Hopkins/Dr. Peter Pronovost/The (real) Case #3/Johns Hopkins/Dr. Peter Pronovost/The (real) roots of checklist power roots of checklist power Case #4/Commerce Bank/CEO Vernon Hill/The RED Case #4/Commerce Bank/CEO Vernon Hill/The RED button commitmentbutton commitmentCase #5/Veterans Administration/Abrogating the Case #5/Veterans Administration/Abrogating the “culture of hiding”“culture of hiding”Case #6/Mayo Clinic/Dr. William Mayo/Teamwork makes Case #6/Mayo Clinic/Dr. William Mayo/Teamwork makes me “100 times better”me “100 times better”Case #7/IBM/CEO Lou Gerstner flummoxed by ingrained Case #7/IBM/CEO Lou Gerstner flummoxed by ingrained beliefsbeliefsCase #8/Germany’s Mittelstand/excellence-in-the-genesCase #8/Germany’s Mittelstand/excellence-in-the-genesCase #9/Department of Defense/DASD Bob Case #9/Department of Defense/DASD Bob Stone/tracking down the extantStone/tracking down the extant ”Model Installation” ”Model Installation” superstarssuperstarsCase #10/Matthew Kelly/Housekeepers’ dreams Case #10/Matthew Kelly/Housekeepers’ dreams Case #11/Toyota/Growth or bustCase #11/Toyota/Growth or bust

ExcellenceExcellence!!

Tom Peters/16 August 2013Tom Peters/16 August 2013Institute of Internal Auditors/OrlandoInstitute of Internal Auditors/Orlando

(slides @ tompeters.com/excellencenow.com)(slides @ tompeters.com/excellencenow.com)

““Why in the Why in the World did youWorld did you

go to go to SiberiaSiberia?”?”

EnterpriseEnterprise* (*at its best):* (*at its best): An An emotionalemotional, , vitalvital, , innovativeinnovative, , jojoyyfulful, , creativecreative, , entreentreppreneurialreneurial endeavor that elicits endeavor that elicits maximum maximum

concerted humanconcerted human potential in thepotential in the wholehearted pursuit of wholehearted pursuit of EXCELLENCE inEXCELLENCE in serviceservice of others of others.**

**Employees, Customers, Suppliers, Communities, Owners, Temporary partners**Employees, Customers, Suppliers, Communities, Owners, Temporary partners

Excellence1982: The Bedrock “EiExcellence1982: The Bedrock “Eigght Basics”ht Basics”

1. A Bias for 1. A Bias for ActionAction2. Close to the 2. Close to the CustomerCustomer3. 3. AutonomAutonomyy and and EntreEntreppreneurshireneurshipp4. Productivity Through 4. Productivity Through PeoPeopplele5. 5. Hands OnHands On, , Value-DrivenValue-Driven6. 6. Stick toStick to the Knitting the Knitting7. 7. SimSimpplele Form, Form, LeanLean Staff Staff8. Simultaneous 8. Simultaneous Loose-TightLoose-Tight PropertiesProperties

1.1.

1/4,096: excellencenow.com1/4,096: excellencenow.com

““Business has to give people enriching, Business has to give people enriching,

rewarding lives … rewarding lives … or it's or it's simsimppllyy not not

worth worth doindoing.”g.”

——Richard BransonRichard Branson

Oath of Office:Oath of Office: Managers/Servant Leaders Managers/Servant Leaders

Our goal is to serve our customers brilliantly and profitably Our goal is to serve our customers brilliantly and profitably overover the long haul.the long haul.Serving our customers brilliantly and profitably over the longServing our customers brilliantly and profitably over the long haul is a product of brilliantly serving, over the long haul, haul is a product of brilliantly serving, over the long haul, thethe people who serve the customer.people who serve the customer.

Hence, our job as leaders—the alpha and the omega andHence, our job as leaders—the alpha and the omega and everything in between—is abetting the sustained growth everything in between—is abetting the sustained growth andand success and engagement and enthusiasm and commitment success and engagement and enthusiasm and commitment toto Excellence of those, one at a time, who directly or indirectlyExcellence of those, one at a time, who directly or indirectly serve the ultimate customer.serve the ultimate customer.

We—leaders of every stripe—are in the “Human Growth andWe—leaders of every stripe—are in the “Human Growth and Development and Success and Aspiration to ExcellenceDevelopment and Success and Aspiration to Excellence business.”business.”““We” We” [leaders][leaders] only grow when “they” only grow when “they” [each and every one of our colleagues][each and every one of our colleagues] areare growing.growing.““We” We” [leaders][leaders] only succeed when “they” only succeed when “they” [each and every one of our [each and every one of our colleagues]colleagues]

are succeeding.are succeeding.““We” We” [leaders][leaders] only energetically march toward Excellence when only energetically march toward Excellence when “ “they” they” [each and every one of our colleagues][each and every one of our colleagues] are energetically marching are energetically marching toward Excellence.toward Excellence.Period.Period.

A 15-Point Human Capital Development A 15-Point Human Capital Development ManifestoManifesto

1. “Corporate social responsibility” starts at 1. “Corporate social responsibility” starts at home—i.e., inside the enterprise! MAXIMIZING home—i.e., inside the enterprise! MAXIMIZING GDD/Gross Domestic Development of the GDD/Gross Domestic Development of the workforce is the primary source of mid-term and workforce is the primary source of mid-term and beyond growth and profitability—and maximizes beyond growth and profitability—and maximizes national productivity and wealth. (Re national productivity and wealth. (Re profitability: If you want to serve the customer profitability: If you want to serve the customer with uniform Excellence, then you must FIRST with uniform Excellence, then you must FIRST effectively and faithfully serve those who serve effectively and faithfully serve those who serve the customer—i.e. our employees, via the customer—i.e. our employees, via maximizing tools and professional maximizing tools and professional development.)development.)

The Memories That MatterThe Memories That Matter

The people you developed who went on toThe people you developed who went on to stellar accomplishments inside or outsidestellar accomplishments inside or outside the company.the company. The (no more than) two or three people you developed who went on The (no more than) two or three people you developed who went on toto create create stellar institutions of their own.stellar institutions of their own.The long shots (people with “a certain something”) you bet on whoThe long shots (people with “a certain something”) you bet on who surprised themselves—surprised themselves—andand your peers. your peers.

The people of all stripes who 2/5/10/20 yearsThe people of all stripes who 2/5/10/20 years later say later say “You made a difference in my “You made a difference in my life,”life,” “ “Your belief in me changed everything.”Your belief in me changed everything.”The sort of/character of people you hired in general. (The sort of/character of people you hired in general. (And And the bad the bad apples you chucked out despite some stellar traits.)apples you chucked out despite some stellar traits.)A handful of projects (a half dozen at most) you doggedly pursued A handful of projects (a half dozen at most) you doggedly pursued thatthat still make you smile and which fundamentally changed the waystill make you smile and which fundamentally changed the way things are done inside or outside the company/industry.things are done inside or outside the company/industry. The supercharged camaraderie of a handful of Great Teams aiming The supercharged camaraderie of a handful of Great Teams aiming toto “ “change the world.”change the world.”

2.2.

““The root of our problem is notThe root of our problem is not that we’re in a Great Recessionthat we’re in a Great Recession

or a Great Stagnation, but ratheror a Great Stagnation, but rather that we are in the early that we are in the early

throes of a throes of a Great Restructuring. Our . Our

technologies are racing ahead,technologies are racing ahead, but our skills and organizationsbut our skills and organizations

are lagging behind.”are lagging behind.”

Source:Source: Race AGAINST the Machine, Race AGAINST the Machine, Erik Brynjolfsson and Andrew McAfeeErik Brynjolfsson and Andrew McAfee

+400,000+400,000*/*/-2,000,000-2,000,000****

“new computing technologies “new computing technologies that destroy middle-class that destroy middle-class

[white-collar] jobs even as they [white-collar] jobs even as they create jobs for highly skilled create jobs for highly skilled

workers who can exploit them”workers who can exploit them”

**ManufacturinManufacturingg jobs jobs addedadded USA 2007-2012 USA 2007-2012

****WhiteWhite--collarcollar jobs jobs llostost USA 2007-2012USA 2007-2012

Source: Source: Financial TimesFinancial Times, page 1, 0402.13 , page 1, 0402.13 (“Clerical Staff Bears Brunt of US Jobs Crisis”)(“Clerical Staff Bears Brunt of US Jobs Crisis”)

Automate This: How Algorithms Came to Automate This: How Algorithms Came to Rule Our WorldRule Our World —Christopher Steiner—Christopher Steiner

Big Data: A Revolution That Will Transform How Big Data: A Revolution That Will Transform How We Live, Work, and ThinkWe Live, Work, and Think —Viktor Mayer-Schonberger and —Viktor Mayer-Schonberger and Kenneth CukierKenneth Cukier

Predictive Analytics: Predictive Analytics: The Power to Predict Who The Power to Predict Who Will Click, Buy, Lie, or DieWill Click, Buy, Lie, or Die —Eric Siegel—Eric Siegel

Race AGAINST The Machine: How the Digital Race AGAINST The Machine: How the Digital Revolution Is Accelerating Innovation, Driving Revolution Is Accelerating Innovation, Driving

Productivity, and Irreversibly Transforming Productivity, and Irreversibly Transforming Employment and the EconomyEmployment and the Economy —Erik Brynjolfsson and Andrew —Erik Brynjolfsson and Andrew

McAfeeMcAfee

““Algorithms have already written symphonies Algorithms have already written symphonies as moving as those composed by as moving as those composed by

Beethoven, picked through legalese , picked through legalese

with the deftness of a senior with the deftness of a senior law partner, diagnosed patients with more , diagnosed patients with more

accuracy than a accuracy than a doctor, written news , written news

articles with the smooth hand of a seasonedarticles with the smooth hand of a seasoned reporter, and driven vehicles on urban , and driven vehicles on urban

highways with far better control than a human highways with far better control than a human

driver.”.”

——Christopher Steiner,Christopher Steiner, Automate This: How Algorithms Came to Rule Our World

Legal industry/Pattern Legal industry/Pattern Recognition/Discovery (e-Recognition/Discovery (e-

discovery algorithms):discovery algorithms):

500500 lawyers to … lawyers to …

ONEONESource:Source: Race AGAINST the Machine, Race AGAINST the Machine, Erik Brynjolfsson and Andrew McAfeeErik Brynjolfsson and Andrew McAfee

““[Michael Vassar[Michael Vassar/ MetaMed founder] is creating afounder] is creating a better information system and new class of people to better information system and new class of people to

manage itmanage it.. ‘Almost all healthcare people get is going to be

done—hopefully—by algorithms within a decade or two. We used to rely on doctors to be experts, and We used to rely on doctors to be experts, and

we’ve crowded them into being something like factory workers, we’ve crowded them into being something like factory workers, where their job is to see one patient every 8 to 11 minutes and where their job is to see one patient every 8 to 11 minutes and implement a by-the-book solution. I’m talking about creating a implement a by-the-book solution. I’m talking about creating a new expert profession’—medical quants, almost like hedgefund new expert profession’—medical quants, almost like hedgefund

managers, who could do the high-level analytical work of managers, who could do the high-level analytical work of directing all the information that flows into the world’s hard directing all the information that flows into the world’s hard

drives. Doctors would now be aided by Vassar’s new information drives. Doctors would now be aided by Vassar’s new information experts who would be aided by advanced artificial intelligenceexperts who would be aided by advanced artificial intelligence.”.”——

New YorkNew York /0624.13 /0624.13

“ … “ … The audience then voted on The audience then voted on the identity of each composition.* the identity of each composition.*

[Music theory professor and [Music theory professor and contest organizer] Larson’s pride contest organizer] Larson’s pride took a ding when his piece was took a ding when his piece was

fingered as that belonging to the fingered as that belonging to the computer. computer. When the crowd

decided that [algorithm] Emmy’s piece was the true product of the

late musician [Bach], Larson winced.” —Christopher Steiner, —Christopher Steiner,

Automate This: How Algorithms Came to Rule Our WorldAutomate This: How Algorithms Came to Rule Our World

*There were three: Bach/Larson/Emmy-the-algorithm.*There were three: Bach/Larson/Emmy-the-algorithm.

““Human level Human level capability has not capability has not turned out to be a turned out to be a special stopping special stopping

point from an point from an engineering engineering

perspective. ….”perspective. ….”

Source: Illah Reza Nourbakhsh, Professor of Robotics, Carnegie Mellon, Source: Illah Reza Nourbakhsh, Professor of Robotics, Carnegie Mellon, Robot Robot FuturesFutures

““Aviva, a large insurance firm, has studied the Aviva, a large insurance firm, has studied the idea of using credit reports and consumer-idea of using credit reports and consumer-

marketing data as marketing data as proxies for the analysis of proxies for the analysis of blood and urine samples for certain blood and urine samples for certain

applicantsapplicants. The intent is to identify those who . The intent is to identify those who may be at higher risk of illnesses like high may be at higher risk of illnesses like high

blood pressure, diabetes, or depression. blood pressure, diabetes, or depression. The The method uses lifestyle data that includes method uses lifestyle data that includes

hundreds of variables such as hobbies, the hundreds of variables such as hobbies, the websites people visit, and the amount of websites people visit, and the amount of

television they watch, as well as estimates of television they watch, as well as estimates of their incometheir income. Aviva’s predictive model, . Aviva’s predictive model, developed by Deloitte Consulting, was developed by Deloitte Consulting, was

considered successful at identifying health considered successful at identifying health risks.”risks.”

Source:Source: Big Data: A Revolution That Will Transform How We Live, Big Data: A Revolution That Will Transform How We Live, Work, and Think, by Viktor Mayer-Schonberger and Kenneth CukierWork, and Think, by Viktor Mayer-Schonberger and Kenneth Cukier

““Flash forward to dystopia. You work in a chic Flash forward to dystopia. You work in a chic cubicle, sucking chicken-flavor sustenance fromcubicle, sucking chicken-flavor sustenance from

a tube. You’re furiously maneuvering with a a tube. You’re furiously maneuvering with a joystick … Your boss stops by and gives you a joystick … Your boss stops by and gives you a

look. look. ‘We need to talk about your loyalty to this ‘We need to talk about your loyalty to this

company.’company.’ The organization you work The organization you work for has deduced that you are for has deduced that you are

considering quitting. It predicts considering quitting. It predicts your plans and intentions, pyour plans and intentions, possiblossiblyy

before before yyou have even conceived ou have even conceived themthem.”.” —Eric Siegel,—Eric Siegel, Predictive Analytics: The Power to Predict Predictive Analytics: The Power to Predict

Who Will Click, Buy, Lie, or Die Who Will Click, Buy, Lie, or Die (based on(based on a real case, an HP “Flight risk” PA model developed by HR, with a real case, an HP “Flight risk” PA model developed by HR, with

astronomical savings potential)astronomical savings potential)

3.3.

Lesson47:Lesson47: WTTMSWTTMS

WW

WHOEVERWHOEVERTRIESTRIESTHETHEMOSTMOSTSTUFFSTUFFWINSWINS

In Search of ExcellenceIn Search of Excellence /1982: /1982: The Bedrock “Eight Basics”The Bedrock “Eight Basics”

1. 1. A Bias for ActionA Bias for Action2. Close to the Customer2. Close to the Customer3. Autonomy and Entrepreneurship3. Autonomy and Entrepreneurship4. Productivity Through People4. Productivity Through People5. Hands On, Value-Driven5. Hands On, Value-Driven6. Stick to the Knitting6. Stick to the Knitting7. Simple Form, Lean Staff7. Simple Form, Lean Staff8. Simultaneous Loose-Tight8. Simultaneous Loose-Tight Properties Properties

““We made mistakes, of course. Most of them were We made mistakes, of course. Most of them were omissions we didn’t think of when we initially wrote the omissions we didn’t think of when we initially wrote the

software. software. We fixed them by doing it over and over, We fixed them by doing it over and over, again and again.again and again. We do the same today. While our We do the same today. While our competitors are still suckingcompetitors are still sucking their thumbs trying to their thumbs trying to

make the design perfect, we’re already on prototype make the design perfect, we’re already on prototype

versionversion ##55.. By the time our rivals are ready By the time our rivals are ready

with wires and screws, we are on version with wires and screws, we are on version

##1010.. It It ggets back to ets back to pplanninlanningg versus actin versus acting: g: We act We act from day onefrom day one; ; others others pplan how lan how

toto p planlan——for monthsfor months.”.”

——Bloomberg by BloombergBloomberg by Bloomberg

4.4.

LITTLE =LITTLE =

BIGBIG

Big carts =Big carts =

1.5X1.5XSource: Wal*MartSource: Wal*Mart

““When Friedman slightly curved When Friedman slightly curved the right angle of an entrance the right angle of an entrance

corridor to one property, he was corridor to one property, he was ‘amazed at the magnitude of ‘amazed at the magnitude of

change in pedestrian behavior’ change in pedestrian behavior’ (the percentage who entered (the percentage who entered increased from increased from oneone--thirdthird to to

nearly nearly twotwo--thirdsthirds.”.” —Natasha Dow Schull, —Natasha Dow Schull, Addiction By Design: Machine Gambling in Las VegasAddiction By Design: Machine Gambling in Las Vegas

Glaring Eyes:Glaring Eyes:

-62%-62%Source: PLOS ONE (via Source: PLOS ONE (via The Atlantic CITIESThe Atlantic CITIES /0429.13) /0429.13)

5.5.

““You will become You will become like the five people like the five people you associate with you associate with the most—this can the most—this can

be either a blessing be either a blessing or a curse.”or a curse.” —Billy Cox—Billy Cox

The “Hang Out Axiom”:The “Hang Out Axiom”: WE WE AREARE WHAT WE WHAT WE EAT/WE EAT/WE AREARE

THE COMPANYTHE COMPANY WE KEEPWE KEEP

The “We are what we eat”/ The “We are what we eat”/ “We are who we hang out with”“We are who we hang out with”

Axiom: Axiom: At its core, At its core, evereveryy (!!!) (!!!) relationship-partnership decision relationship-partnership decision

(employee, vendor, customer, etc., (employee, vendor, customer, etc., etc.) is a etc.) is a stratestrateggicic decision about: decision about:

“Innovate,“Innovate, ‘ ‘YesYes’ ’ oror ‘No’ ” ”

““The prospect of contracting a gofer on an aThe prospect of contracting a gofer on an a la carte basis is enticing.la carte basis is enticing. For instance, wouldn’t it For instance, wouldn’t it

be convenient if I could outsource someone to be convenient if I could outsource someone to write a paragraph here, explaining the history of write a paragraph here, explaining the history of outsourcing in Americaoutsourcing in America? ? Good idea! I went ahead Good idea! I went ahead and commissioned just such a paragraph from Get and commissioned just such a paragraph from Get Friday, a ‘virtual personal assistant- firm based in Friday, a ‘virtual personal assistant- firm based in Bangalore. … The paragraph arrived in my in-box Bangalore. … The paragraph arrived in my in-box ten days after I ordered it. It was 1,356 words. ten days after I ordered it. It was 1,356 words.

There is a bibliography with eleven sources. … At There is a bibliography with eleven sources. … At $14 an hour for seven hours of work, the cost came $14 an hour for seven hours of work, the cost came

to $98. …”to $98. …” —Patricia Marx, “Outsource Yourself,” —Patricia Marx, “Outsource Yourself,” The New Yorker, The New Yorker, 01.14.201301.14.2013 (Marx describes in detail contracting out everything associated (Marx describes in detail contracting out everything associated

with hosting her book with hosting her book club club —including the provision of “witty” —including the provision of “witty” comments on Proust, since she hadn’t had time to read the book—comments on Proust, since she hadn’t had time to read the book—

excellent comments only set her back $5;excellent comments only set her back $5; the the writer/contractor turned out to be a 14-writer/contractor turned out to be a 14-yyear-old ear-old ggirl irl

from New Jersefrom New Jerseyy.).)

““Who’s the most Who’s the most interesting person interesting person you’ve met in the you’ve met in the last 90 days? How last 90 days? How do I get in touch do I get in touch

with them?”with them?” —Fred Smith—Fred Smith

6.6.

14,00014,00020,00020,000

3030

14,000/14,000/eeBayBay20,000/Amazon20,000/Amazon

3030/Craigslist/Craigslist

Dov Frohman:Dov Frohman: The “50% The “50% Rule” Rule” Dov Frohman:Dov Frohman: “Daydream!” “Daydream!”

Source: Dov Frohman (& Robert HowardSource: Dov Frohman (& Robert Howard), Leadership The Hard Way: Why Leadership Can’t Be Taught), Leadership The Hard Way: Why Leadership Can’t Be Taught——And How You Can Learn It Anyway And How You Can Learn It Anyway (Chapter 5, “The Soft Skills Of Hard Leadership”)(Chapter 5, “The Soft Skills Of Hard Leadership”)