change2001 tom peters distinct … or extinct san francisco/01 may 2001
TRANSCRIPT
Change2001
Tom Peters
Distinct … or Extinct
San Francisco/01 May 2001
“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
“The corporation as we know it, which is now 120 years old, is
not likely to survive the next 25 years. Legally and
financially, yes, but not structurally and economically.”
Peter Drucker, Business 2.0 (08.00)
<1000A.D.: paradigm shift: 1000s of years1000: 100 years for paradigm shift
1800s: > prior 900 years1900s: 1st 20 years > 1800s
2000: 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, talk april2001
CEOs appointed after
1985 are 3X more likely to be fired than CEOs appointed before 1985
Warren Bennis, MIT Sloan Management Review
“We are in a
brawl with no rules.”
Paul Allaire
The Kotler Doctrine:
1965-1980: R.A.F.(Ready.Aim.Fire.)
1980-1995: R.F.A.(Ready.Fire!Aim.)
1995-????: F.F.F.(Fire!Fire!Fire!)
“It used to be that the big
ate the small. Now the fast eat the slow.”Geoff Yang, IVP/ (Institutional
Venture Partners)
Read It Closely: “We don’t sell insurance
anymore. We sell speed.”
Peter Lewis, Progressive
Part I: Brand InsidePart II: Brand Outside
Part III: Brand Leadership
Forces @ Work I
The Destruction Imperative!
Forget>“Learn”
“The problem is never how to get new, innovative
thoughts into your mind,
but how to get the old ones out.”
Dee Hock
The [New] Ge Way
DYB.com
The Gales of Creative Destruction
+29M = -44M + 73M
+4M = +4M - 0M
Forbes100 from 1917 to 1987: 39 members of the Class of ’17 were alive in ’87; 18 are in ’87 F100; the 18 F100 “survivors” underperformed the market by
20%; just 2 (2%), GE & Kodak, outperformed the market from 1917 to 1987.
S&P 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
Brand Inside
Brand Org: Lean, Linked,
Electronic & Malleable
Headline: “Bank of America to Cut … 10,000 Jobs”
“Middle-level and senior managers are expected to be
the principal targets of the job cutbacks.”
Source: The New York Times (07.29.2000)
White Collar
Revolution!
108 X 5vs.
8 X 1** 540 vs. 8 (-98.5%)
IBM’s Project Eliza!
Brand Inside
Brand Work: The Professional Service
Firm Model & The WOW Project
So what will be the Basic Building
Block of the New Org?
Every job done in W.C.W. is
also done “outside”
…for profit!
Answer: PSF![Professional Service Firm]
Department Head
to …
Managing Partner, HR [IS, etc.] Inc.
11 September 2000
09.11.2000: HP bids
$18,000,000,000for
PricewaterhouseCoopersConsulting business!
[“These days, building the best server isn’t enough. That’s the
price of entry.”
Ann Livermore, Hewlett Packard]
% Rev From Service:
GE (80%) … IBM (80%) … HP … Sun????
Maybe one [or more] of your “PSFs”
becomes the tail that wags the dog????? [E.g.: engineering, IS-logistics-
customer service]
The Raw Material …
The WOW Project!
“Reward excellent failures. Punish
mediocre successes.”
Phil Daniels, Sydney exec
“Every project we take on starts with a question:
How can we do what’s never been
done before?”Stuart Hornery, CEO, Lend Lease
My GOAL: Radicalize Audiences!*
*Hint: These are Radical times!
Your Current Project?
1. Another day’s work/Pays the rent.4. Of value.7. Pretty Damn Cool/Definitely subversive.10. WE AIM TO CHANGE THE WORLD. (Insane!/Insanely Great!/WOW!)
Am I full of CRAP? Wearing ROSE-
COLORED GLASSES?
Work-Life Balance????
Madeleine McGrath & the London
Suicide Hotline
Brand Inside
Brand You: Distinct …
or Extinct
“New Economy changes how
firms treat layoffs”
Headline, USA Today (03.19.2001)
“If there is nothing very special about your work, no matter how hard you apply
yourself, you won’t get noticed, and that
increasingly means you won’t get paid much either.”
Michael Goldhaber, Wired
Minimum New Work SurvivalSkillsKit2000
MasteryRolodex Obsession (vert. to horiz. “loyalty”)
Finishing SkillsEntrepreneurial Instinct
CEO/Leader/BusinesspersonMistress of Improv
Sense of HumorIntense Appetite for Technology
Groveling Before the YoungEmbracing “Marketing”
Passion for Renewal
Invent. Reinvent. Repeat.
Source: HP banner ad
Brand Inside
Brand Talent: The Great War for Talent
“When land was the productive asset, nations
battled over it. The same is happening now for talented people.”
Stan Davis & Christopher Meyer, futureWEALTH
From “1, 2 or you’re out” [JW] to …
“Best Talent in each industry segment to build
best proprietary intangibles” [EM]
Source: Ed Michaels, War for Talent (05.17.00)
“We believe companies can increase their market cap 50 percent in 3 years. Steve
Macadam at Georgia Pacific changed 20 of his 40 box plant managers to put
more talented, higher paid managers in charge. He increased
profitability from $25 million to $80 million in 2 years.”
Ed Michaels, War for Talent (05.17.00)
Message: Some people are better than other
people. Some people are a helluva lot better than other
people.
“Top performing companies are two to four times more likely
than the rest to pay what it takes to prevent losing
top performers.”
Ed Michaels, War for Talent (05.17.00)
“We value engineers like professional athletes. We value great people at 10 times an average person
in their function.”Jerry Yang, Yahoo
What gets measured gets done. What gets
paid for gets done more. What gets paid
a lot for gets done a lot more.
“Talented people are less likely to wait their turn. We used to
view young people as trainees; now they are authorities. Arguably
this is the first time the older generation can – and must – leverage the younger generation very early in their careers.”
Ed Michaels, War for Talent (05.17.00)
“Why focus on these late teens and twenty-somethings? Because they are the first
young who are both in a position to change the world, and are actually doing so. … For the first time in history, children are more comfortable, knowledgeable and literate than their parents about an innovation central to society. … The Internet has
triggered the first industrial revolution in history to be led by the young.”
The Economist [12/2000]
“Diversity defines the health and wealth of nations in a new century.
Mighty is the mongrel. … The hybrid is hip. The impure, the mélange, the adulterated, the
blemished, the rough, the black-and-blue, the mix-and-match – these people are inheriting
the earth. Mixing is the new norm. Mixing trumps isolation. It spawns creativity,
nourishes the human spirit, spurs economic growth
and empowers nations.”
G. Pascal Zachary, The Global Me: New Cosmopolitans and the Competitive Edge
“AS LEADERS, WOMEN RULE: New Studies find that female managers
outshine their male counterparts in almost
every measure”Title, Special Report, Business Week, 11.20.00
Women and new-economy
management …
The New Economy …
Shout goodbye to “command and control”!
Shout goodbye to hierarchy!
Shout goodbye to “knowing one’s place”!
Women’s Stuff = New Economy Match
Improv skillsRelationship-centric
Less “rank consciousness”Self determinedTrust sensitive
IntuitiveNatural “empowerment freaks” [less
threatened by strong people]Intrinsic [motivation] > Extrinsic
“Boys are trained in a way that will make
them irrelevant.”
Phil Slater
Okay, you think I’ve gone tooooo far.
How about this: DO ANY OF YOU SUFFER
FROM TOO MUCH TALENT?
63 of 2,500 top earners in F500
8% Big 5 partners
14% partners at top 250 law firms
43% new med students; 26% med
faculty; 7% deans
Source: Susan Estrich, Sex and Power
The Cracked Ones Let in the Light
“Our 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
Axiom: Never hire anyone without an aberration in their
background!
Beware Lurking HR Types … One size
NEVER fits all. One size fits one. Period.
48 Players = 48 Projects =
48 different success measures
“Firms will not ‘manage the careers’ of their employees. They
will provide opportunities to enable the employee to develop
identity and adaptability and
thus be in charge of his or her own career.”
Tim Hall et al., “The New Protean Career Contract”
“H.R.” to “H.E.D.” ???
Human
Enablement
Department
MantraM3
Talent = Brand
What’s your company’s …
EVP?Employee Value Proposition, per Ed Michaels et al., The War for Talent
EVP = Challenge, professional growth, respect, satisfaction, opportunity, reward
Source: Ed Michaels et al., The War for Talent
HR Folks: YOU – not
“marketing” - “OWN” THE “BRAND PROMISE”!
(If you wish.)
Brand Inside
Brand Action:Getting Started … a
Personal Perspective
The following slide begins the “Boss-Free Implementation of
Stuff That Matters” Section. The slides in this section are heavily
annotated.
Use Normal or Notes Page View to access the notes.
Topic: Boss-free
Implementation of STM /Stuff That
MATTERS!
THE IDEA
“4Fs”: Find a
Fellow Freak
Faraway
World’s Biggest Waste …
Selling “Up”
Heart of the Matter
F2F!/K2K!/1@T/R.F.A.*
*Freak to Freak/Kook to Kook/One at a Time/ Ready.Fire!Aim.
THE PROCESS
Summary
Boss-free “Selling” of a WOW! Idea
Get a Zany [WOW!] Idea/Shop it with a coupla good pals.
Surface [using your network] a list of [operational] folks who might be interested in playing.
Call, visit and choose a coupla prospects.Engage the prospects [they must “own” “it”].
Concoct a rough plan and a prototype schedule. Move forward [Ready. Fire! Aim.].
Keep on recruitin’.Get the Test Customer to recruit some buddies for Round #2 tests [Meanwhile Customer #1 expands
program]
Boss-free “Selling” of a WOW! Idea (cont.)
Get going with Round #2 prototypesStart conscious “buzz building” [Let “the word” of
successful tests trickle out]Have the “line dudes” put on a demo for, say, a coupla
“cool” regional bossesEtc.Etc.
Have the growing Network of Converts initiate a Major Program Proposal
Etc.Etc.
Boss Advice I: The “Poster Kids”/ “End Run”/“Skunks” Strategy
Chat up a cross-section of the Org.Develop a tentative list of Pioneers/“Skunks.”
Hang with those Skunks, discover their “stuff I’ve long wanted to do” list/Encourage
them to “Do it!”Begin to showcase their developing results
[with your public stamp of approval]. Dip deep[ish] and early - promote a Super
Skunk into the [New] Establishment.Incorporate the Skunks’ work into your Vision
Chatter/Welcome ALL aboard!
Boss Advice II: Starting the “Hmmmmm?” Buzz
“Event Marketing”: Idea Faire/Internal “Tradeshow”/Bragfest. Or: Seminar Series, with
“strange” outsiders/insiders (not the usual suspects); intense Web-based followup and community creation
(Neighborhoods of Common Interest).
“Play Fund,” around a topic of importance. Small-ish grants. Easy application process. Short-ish
timeframes. (Gerstner @ American Express re AI.)
“Scholarships” (not the usual suspects). Sabbatical funds (contest?). Placement on customer or supplier
project teams (not the usual suspects).
Boss Advice III: The “Flypaper Strategy”
Don’t try to “change the culture”!
Create fly paper which attracts Mavericks & Pirates!
Let the new culture (which is lurking around you) find you!
Publicize, at the appropriate moment, the New Hall of Fame; help the New Culture Adherents create & nurture Community!
BOTTOM LINE
The Enemy!
Joe J. Jones Joe J. Jones 1942 – 2001 1942 – 2001
HE WOULDA DONE SOME HE WOULDA DONE SOME
REALLY COOL STUFF REALLY COOL STUFF
BUT …BUT …
HIS BOSS WOULDN’T LET HIM! HIS BOSS WOULDN’T LET HIM!
The greatest dangerfor most of us
is not that our aim istoo high
and we miss it,but that it is
too lowand we reach it.
Michelangelo
Brand InsideReprise:
THINK WEIRD: The High Standard
Deviation Enterprise
Saviors-in-Waiting
Disgruntled CustomersFringe CompetitorsRogue Employees
Edge SuppliersWayne Burkan, Wide Angle Vision: Beat the
Competition by Focusing on Fringe Competitors, Lost Customers, and Rogue
Employees
“Our strategies must be tied to leading edge
customers on the attack. If we focus on the defensive
customers, we will also become defensive.”
John Roth, CEO, Nortel
JY: Who do you fear most, big companies or start-ups?
JC: I have a list with a dozen little companies I’m tracking closely. Guys
who can start with a fresh sheet of paper have an enormous advantage technologically. We have to carefully
integrate new capabilities into our existing product line, they don’t.”
Source: Cisco Unauthorized
Button-down Org H.S.D.E. .
• Acquire for market share• Suck up to biggest customers• Pursue “strategic vendors”• Bigger is better• Accept assignments as given• Hire 4.0s from “top schools”• Promote when they’ve “paid
their dues”• Appoint a “prestigious” board
• Hang out with my pals• R.A.F.• Be “professional” at all
times/Honor thine elders
• Acquire for innovation• Partner with cool customers• Seek out pioneering vendors• Break it up … to refresh• Reframe all tasks to innovate• Hire “intriguing,” wherever• Promote tomorrow if the work
product is weird and WOW• Appoint an interesting,
headstrong board• Take a freak to lunch today• F.F.F.• Stay loose, stay cool/The hell
with thine elders
Message: TAKE SOMEONE NEW & WEIRD TO LUNCH
TODAY OR TOMORROW. [Inundate yourself with weird.]
“But don’t we need some
grout between the tiles?”
N.W.O.: Was Is Is
• Pine-paneled Office• Address: 1 Big Man Plaza• Secretary• Suit • Formal • Rank conscious• Pretense (“Failures are
for fools.”)• I love “Yes men”• Self-contained
• Seat 9B, UA233• Address: [email protected]• Typing: 60 WPM• Casual M-F• Approachable• We are a HOT Team • Screwing up is as normal
as breathing• I love Misfits!• I love partners
Part I: Brand InsidePart II: Brand Outside
Part III: Brand Leadership
Forces @ Work II
The Commodity Trap
Quality Not Enough!
“While everything may be better, it is also increasingly the
same.”Paul Goldberger on retail, “The Sameness
of Things,” The New York Times
“We make over three new product announcements a
day. Can you remember them?
Our customers can’t!”Carly Fiorina
“The ‘surplus society’ has a surplus of
similar companies, employing
similar people, with similar educational backgrounds, working in
similar jobs, coming up with similar
ideas, producing similar things, with
similar prices and similar quality.”
Kjell Nordstrom and Jonas Ridderstrale, Funky Business
“Companies have defined so much ‘best practice’
that they are now more or less identical.”
Jesper Kunde, A Unique Moment
Brand Outside
Strategy 1:Use E-Commerce to
Re-invent Everything!
Tomorrow Today: Cisco!
90% of $20B (=$50M/day)75% mfg. outsourced; 50% of orders routed to supplier who ships direct
Gross margin: 65%; Net margin: 28%
Annual savings in service and support from customer
self-management: $550M
“One cannot be tentative about this. Excuses like ‘channel
conflict’ or ‘marketing and sales aren’t ready’ cannot be allowed. Delay and you risk being cut out of your own market, perhaps not by traditional competitors but by companies you
never heard of 24 months ago.”
Jack Welch [07.00/Forbes.com]
GE & the Web
Purchasing: 2000: $6B; 2001: $15B
Sales: 1999: $1B; 2000: $7B; 2001: $20B+
Source: Business 2.0 (05.01)
“We’ve put the word out to all of our suppliers: by the end of the year [2000] we’ll only do purchasing
over the Internet.”John Paterson, C.P.O., IBM
[$50B from 18,000 suppliers]
WebWorld = Everything
Web as a way to run your business’ innardsWeb as connector for your entire supply-demand chain Web as “spider’s web” which re-conceives the industry
Web/B2B as ultimate wake-up call to “commodity producers”
Web as the scourge of slack, inefficiency, sloth, bureaucracy, poor customer data
Web 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 World’s Best at Everything
as next door neighbor
Message: eCommerce is not a technology play! It is a
relationship, partnership, organizational and
communications play, made possible by new
technologies.
Message: There is no such thing as an effective B2B or
Internet-supply chain strategy in a low-trust,
bottlenecked-communication, six-layer
organization.
“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
“There is no use trying,” said Alice. “One can’t believe impossible things.”
“I daresay you haven’t had much practice,” said the Queen. “When I was
your age, I always did it for half an hour a day. Why, sometimes I’ve
believed as many as six impossible things before breakfast.”
Lewis Carroll
I’net …
… allows you to dream dreams you could never have imagined before!
Message 2001: Only idiots pull in their [investment]
horns during a downturn.
Brand Outside
Strategy 6:
BRAND POWER!
“WHO ARE YOU [these days] ?”
TP to Client
“We are in the twilight of a society based on data. As information and intelligence become the domain of computers, society will place more value on the one human ability that cannot be automated: emotion.
Imagination, myth, ritual - the language of emotion - will affect everything from our purchasing decisions
to how we work with others. Companies will thrive on the basis of their stories and myths. Companies will need to understand
that their products are less important than their stories.”
Rolf Jensen, Copenhagen Institute for Future Studies
“Most companies tend to equate branding with the company’s marketing. Design a new marketing
campaign and, voila, you’re on course. They are wrong. The task is much bigger. It is about fulfilling our potential … not about a new logo, no matter how
clever. WHAT IS MY MISSION IN LIFE? WHAT DO I WANT TO CONVEY TO PEOPLE? HOW DO
I MAKE SURE THAT WHAT I HAVE TO OFFER THE WORLD IS ACTUALLY UNIQUE? The brand has to give of itself, the company has to give of itself, the management has to give of itself. To
put it bluntly, it is a matter of whether – or not – you want to be … UNIQUE … NOW.”
Jesper Kunde, A Unique Moment
“Brand Promise” Exercise: (1) Who Are WE? (1 page, then 25 words.) (2) List
three ways in which we are UNIQUE … to our Clients. (3) Who are THEY (competitors)? (ID, 25 words.)
(4) List 3 distinct “us”/”them” differences. (5) Try “results” on your teammates. (6) Try ’em on a friendly Client. (7) Big Enchilada:
Try ’em on a skeptical Client!
Message: REAL Branding is personal. REAL Branding is integrity. REAL
Branding is consistency & freshness. REAL Branding is the answer to WHO
ARE WE? WHY ARE WE HERE? REAL Branding is why I/you/we [all] get out of bed in the morning. REAL Branding can’t be faked. REAL Branding is a systemic, 24/7, all departments,
all hands affair.
Part I: Brand InsidePart II: Brand Outside
Part III: Brand Leadership
Brand Leadership
Passion Rules!
“You must be the change you
wish to see in the world.”
Gandhi
“Create a Cause, not a ‘business.’
”Gary Hamel, Fortune (06.00), on re-inventing a
company (Exemplar #1: Charles Schwab)
“As Ministers of The Republic of Tea, our
not-so-covert mission is to carry out a Tea
Revolution.”Ron Rubin & Stuart Avery Gold,
success@life
“Our free and open immigration policies welcome all who wish to flee the tyranny of
coffee crazed lives and escape the frazzled fast paced race-to-stay-in-one-place existence that it fuels. In our tiny land, we have come to learn
that coffee is about speeding up and losing sight, while tea is about slowing down and
taking a look. Because tea is not just a beverage, it is a consciousness altering
substance that allows for a way of getting in touch with and taking pleasure from the beauty
and the wonder that life has to offer.”
Ron Rubin & Stuart Avery Gold, success@life
Brand Leadership: ENTHUSIASM RULES!
Ben Zander: “I am a dispenser of
enthusiasm.”
“Let’s make a dent in the universe.”
Steve Jobs