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Master*Master*ExcellenceExcellence

part part twotwo (of 7) (of 7)innovate.innovate.

Or.Or.Die.Die.

18 june 200718 june 2007

part part twotwo

EXCELLENCE. EXCELLENCE.

INNOVATE. INNOVATE. OR. OR. DIE.DIE.

EXCELLENCE. EXCELLENCE.

INNOVATE. INNOVATE. AXIOMATICAXIOMATIC..

“To grow, companies need to break out of a

vicious cycle of competitive

benchmarking and imitation.” —W. Chan Kim & Renée

Mauborgne, “Think for Yourself —Stop Copying a Rival,” Financial Times

EXCELLENCE. EXCELLENCE. INNOVATION.INNOVATION.

THE THE REALREAL STORY.STORY.

Tom Peters/03.29.2007Tom Peters/03.29.2007

TheThe Mess Mess IsIs TheThe

Message! Message! Period!Period!

What makes What makes God laugh?God laugh?

PeoplePeople makingmaking plans!plans!

What makes What makes tomtom laugh? laugh?

““Gurus” Gurus” (and once-famous (and once-famous

CEOs)CEOs) giving giving LLLsLLLs (logical (logical

linear lectures)linear lectures) on on “systems”*“systems”* of of

innovationinnovation!!**especially with lots of charts and graphs and Greekespecially with lots of charts and graphs and Greek

mathematical symbols and little tiny numbers mathematical symbols and little tiny numbers

NOTE: NOTE: few ideas are more importantfew ideas are more important—and more honored in the breach. —and more honored in the breach.

Innovation is Innovation is MMEESSSSYYto the extreme. Such an assertion to the extreme. Such an assertion

(reality!) determines the success of (reality!) determines the success of innovation “strategies,” perhaps innovation “strategies,” perhaps the wrong word. This unfolding the wrong word. This unfolding

“story” is one of the most “story” is one of the most important in my efforts to alter important in my efforts to alter

enterprise thinking.enterprise thinking.

try it. Try it. Try it. try it. Try it. Try it. Try it. Try it. Try it.Try it. Try it. Try it.

Try it. Try it. Try it. Try it. Screw it Screw it up.up. Try it. Try it. Try Try it. Try it. Try

it. Try it. Try it. Try it. it. Try it. Try it. Try it. Try it. Try it. Screw it up.Screw it up. it. it.

Try it. Try it. try it. Try it. Try it. try it. Try it.Try it. Screw it up.Screw it up. Try it. Try it. Try it. Try it. Try it. Try it.

Get Get madmad. . Do Do somethingsomething about it. about it.

NowNow..

The “5Ps” of Innovation Success:The “5Ps” of Innovation Success:

Pissed-off-ed-nessPissed-off-ed-nessPassionPassion

palspalsPolitics Politics [Political skill][Political skill]

PersistencePersistence

InnoTacsInnoTacs

“Acquisitions are about buying market share.

Our challenge is Our challenge is to create to create

marketsmarkets.. There is a big difference.”

—Peter Job, former CEO, Reuters

Characteristics of the “Also rans”*Characteristics of the “Also rans”*

“Minimize risk”“Minimize risk”“Respect the chain of “Respect the chain of

command”command”“Support the boss”“Support the boss”

“Make budget”“Make budget”

**FortuneFortune, article on “Most Admired Global Corporations”, article on “Most Admired Global Corporations”

““Companies have Companies have defined so much defined so much

‘best practice’ ‘best practice’ that they are now that they are now

more or less more or less identical.”identical.”

—Jesper Kunde, —Jesper Kunde, Unique Now ... Or NeverUnique Now ... Or Never

““It is It is notnot the the strongest of the strongest of the

species that survives, species that survives, nornor the most the most

intelligent, but intelligent, but the the one most one most responsive responsive

to changeto change.”.” —Charles Darwin

InnoTacsInnoTacs

try it. Try it. Try it. try it. Try it. Try it. Try it. Try it. Try it.Try it. Try it. Try it.

Try it. Try it. Try it. Try it. Screw it Screw it up.up. Try it. Try it. Try Try it. Try it. Try

it. Try it. Try it. Try it. it. Try it. Try it. Try it. Try it. Try it. Screw it up.Screw it up. it. it.

Try it. Try it. try it. Try it. Try it. try it. Try it.Try it. Screw it up.Screw it up. Try it. Try it. Try it. Try it. Try it. Try it.

What makes What makes God laugh?God laugh?

PeoplePeople makingmaking plans!plans!

do do things.things.

““We have a We have a ‘strategic plan.’ ‘strategic plan.’ It’s called It’s called doing doing thingsthings.”.” — Herb Kelleher

do do them.them.

A man approached JP Morgan, held up an envelope, and said, “Sir, A man approached JP Morgan, held up an envelope, and said, “Sir, in my hand I hold a guaranteed formula for success, which I will in my hand I hold a guaranteed formula for success, which I will

gladly sell you for $25,000.”gladly sell you for $25,000.”

“Sir,” JP Morgan replied, “I do not know what is in the envelope, “Sir,” JP Morgan replied, “I do not know what is in the envelope, however if you show me, and I like it, Ihowever if you show me, and I like it, I

give you my word as a gentleman that I will pay you what you ask.” give you my word as a gentleman that I will pay you what you ask.”

The man agreed to the terms, and handed over the envelope. JP The man agreed to the terms, and handed over the envelope. JP Morgan opened it, and extracted a single sheet of paper. He gave it Morgan opened it, and extracted a single sheet of paper. He gave it one look, a mere glance, then handed the piece of paper back to the one look, a mere glance, then handed the piece of paper back to the

gent.gent.

And paid him the And paid him the agreed upon $25,000.agreed upon $25,000.

1. 1. Every morning, write Every morning, write a list of the things a list of the things that need to be done that need to be done that day. that day.

2.2. Do them.Do them. Source: Hugh MacLeod/tompeters.com/NPRSource: Hugh MacLeod/tompeters.com/NPR

drill.drill.

“This is so simple it sounds stupid, but it is amazing how few oil people really

understand that you only you only find oil if you find oil if you drill wellsdrill wells.. You may

think you’re finding it when you’re drawing maps and

studying logs, but you have to drill.”

Source: The Hunters, by John Masters, Canadian O & G wildcatter

try try things.things.

““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 sucking their thumbs trying to competitors are still sucking 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 areBy the time our rivals are

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

##1010.. It gets back to It gets back to

planning versus actingplanning versus acting: : We act We act from day onefrom day one; ; others plan how others plan how toto planplan——for monthsfor months.”.” —Bloomberg by —Bloomberg by

BloombergBloomberg

““ExperimenExperiment t

fearlessly”fearlessly”Source: BW0821.06, Type A Organization Strategies/

“How to Hit a Moving Target”—Tactic #1Tactic #1

““We groundWe ground up more pig up more pig

brains!”brains!”

The True Logic* of Decentralization:

6 divisions = 6 “tries”6 divisions = 6 “tries”

6 divisions = 6 6 divisions = 6 DIFFERENTDIFFERENT leaders = 6 leaders = 6 INDEPENDENTINDEPENDENT

“tries” = Max probability of “tries” = Max probability of “win”“win”

6 divisions = 6 6 divisions = 6 veryvery DIFFERENT DIFFERENT leaders = 6 leaders = 6 veryvery INDEPENDENT INDEPENDENT

“tries” = Max probability of “tries” = Max probability of ““far outfar out”/””/”3-sigma3-sigma”” “win” “win”

*“Driver”: Law of Large #s

SERIOUS SERIOUS PLAYPLAY

Culture of PrototypingCulture of Prototyping

“Effective prototyping may “Effective prototyping may

be be thethe most most valuablevaluable core core competencecompetence an an

innovative organization can innovative organization can hope to have.”hope to have.” —Michael Schrage

Think about It!?Think about It!?

Innovation Innovation = = Reaction to the Reaction to the

PrototypePrototype

Source: Michael SchrageSource: Michael Schrage

““You can’t be a serious You can’t be a serious innovator unless and until innovator unless and until you are ready, willing and you are ready, willing and

able to seriously play. able to seriously play. ‘‘Serious playSerious play’ is not an ’ is not an

oxymoron; it is the oxymoron; it is the essenceessence of of innovationinnovation.” .” —Michael Schrage,—Michael Schrage, Serious PlaySerious Play

““Learn not Learn not to be to be

careful.”careful.”

—Photographer Diane Arbus to her students (Careful = The sidelinesCareful = The sidelines, from

Harriet Rubin in The Princessa)

““The key to a great The key to a great painting is the painting is the

nerve, after weeks of nerve, after weeks of effort, to ‘bet the effort, to ‘bet the

painting’ on the next painting’ on the next brush stroke,”brush stroke,” Master musician, Master musician,

San FranciscoSan Francisco

Screw. Screw. things.things.

Up.Up.

““FAIL, FAIL FAIL, FAIL AGAIN. FAIL AGAIN. FAIL BETTER.”BETTER.”

—Samuel Beckett

““Fail .Fail . Forward. Forward.

Fast.”Fast.”High Tech CEO, Pennsylvania

““Fail faster. Fail faster. Succeed Succeed Sooner.”Sooner.”

David Kelley/IDEO

Sam’s Sam’s Secret Secret

#1!#1!

““RewardReward excellent failures.

PunishPunish mediocre

successes.”Phil Daniels, Sydney exec

““If people tell me If people tell me they skied all day they skied all day

and never fell and never fell down, I tell them down, I tell them to try a different to try a different

mountain.”mountain.” —Michael Bloomberg (—Michael Bloomberg (BWBW/0625.07)/0625.07)

““In business, you In business, you rewardreward people for taking people for taking risksrisks. .

When it When it doesn’tdoesn’t workwork outout you pyou promoteromote them-because them-because they were willing to try new they were willing to try new

things. If people tell me things. If people tell me they skied all day and never they skied all day and never fell down, I tell them to tryfell down, I tell them to try

a different mountain.” a different mountain.” —Michael Bloomberg (—Michael Bloomberg (BWBW/0625.07)/0625.07)

Read This!

Richard Farson & Ralph Keyes:

Whoever Makes Whoever Makes the Most Mistakes the Most Mistakes Wins: The Paradox Wins: The Paradox

of Innovationof Innovation

““The Silicon Valley of The Silicon Valley of today is built less atop the today is built less atop the spires of earlier triumphs spires of earlier triumphs than upon the rubble of than upon the rubble of

earlier debacles.”earlier debacles.”—Newsweek—Newsweek/ Paul / Paul

SaffoSaffo

““The secret of fast progress The secret of fast progress

is is inefficiencyinefficiency, fast and , fast and furious and numerous furious and numerous

failures.” --failures.” --Kevin KellyKevin Kelly

try.try.Miss.Miss.try.try.

READY.READY.FIRE!FIRE!AIM.AIM.

Ross Perot (vs “Aim! Aim! Aim!” /EDS vs GM/1985)

S.A.S.A.V.V.

Paul Allaire/Xerox:Paul Allaire/Xerox: “We are in a “We are in a brawl with no rules.”brawl with no rules.”

TP:TP: “There’s “There’s [literally][literally] only one only one

possible answer … possible answer … SScrew crew

AAround round VVigorouslyigorously!!

RAFRAFRFARFA

RFFFA RFFFA … RFFFA RFFFA … FFFFAFFFFA

RAAAAAAAAAAA …RAAAAAAAAAAA …

IID DSS*IID DSS*INID DSS**INID DSS**

*If In Doubt … Do Some S*If In Doubt … Do Some S$%^$%^ (stuff) (stuff)**If Not In Doubt … Do Some S**If Not In Doubt … Do Some S%*&%*&

Life 101: A 40-year ReflectionLife 101: A 40-year Reflection

Go on offense. Go on offense. Give everybody a shot. Give everybody a shot.

Decentralize. Decentralize. Try a bunch of stuff.Try a bunch of stuff.

Make it up as you go along. Make it up as you go along. Get some stuff wrong.Get some stuff wrong.

Laugh a lot.Laugh a lot.Get some stuff right. Get some stuff right. Become a “success.”Become a “success.”

Extract “lessons learned” or “best practices.”Extract “lessons learned” or “best practices.”Thicken the Book of Rules for Success.Thicken the Book of Rules for Success.

Become evermore serious.Become evermore serious.Enforce the rules to increasingly tight tolerances.Enforce the rules to increasingly tight tolerances.

Go on defense. Go on defense. Install walls. Install walls.

Protect-at-all-costs today’s franchise. Protect-at-all-costs today’s franchise. Centralize. Centralize.

Calcify. Calcify. Install taller walls.Install taller walls.Write more rules.Write more rules.

Become irrelevant and-or die.Become irrelevant and-or die.

No try. No try. No deal.No deal.

““You miss You miss

100100%%

of the shots of the shots you never you never

take.”take.” —Wayne—Wayne GretzkyGretzky

““Intelligent people Intelligent people can always come up can always come up

with intelligent with intelligent reasons reasons to do to do nothingnothing.”.” —Scott Simon—Scott Simon

““Andrew Higgins , who built landing craft in Andrew Higgins , who built landing craft in WWII, refused to hire graduates of WWII, refused to hire graduates of

engineering schools. engineering schools. He believed He believed that they only teach that they only teach

you what you you what you can’tcan’t dodo in engineering school.in engineering school. He started off with 20 employees, and by He started off with 20 employees, and by the middle of the war had 30,000 working the middle of the war had 30,000 working

for him. He turned out 20,000 landing craft. for him. He turned out 20,000 landing craft. D.D. Eisenhower told me, ‘Andrew Higgins D.D. Eisenhower told me, ‘Andrew Higgins

won the war for us. He did it without won the war for us. He did it without engineers.’ ”engineers.’ ”

—Stephen Ambrose/—Stephen Ambrose/Fast CompanyFast Company

Try.Try.Try.Try.try.try.

Try.Try.Try.Try.try.try.Try.Try.Try.Try. Try. Try.Try.Try.try.try.Try.Try.Try.Try. Try. Try.Try.Try.try.try.Try.Try.Try.Try. Try. Try.Try.Try.try.try.Try.Try.Try.Try. Try. Try.Try.Try.try.try. Try. Try.Try.Try. Try. Try.Try.Try.try try Try.Try.Try.Try. Try. Try.Try.Try.trytry

Excellence1982: 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-Tight Properties” 8. Simultaneous Loose-Tight Properties”

Innovation:Innovation:

GetGet madmad.. Start Start

DoingDoing

somethingsomething

about it. about it. NowNow..

EXEXCELLE CELLE ALWALWAYSAYS..

End.End.PART PART TWOTWO..