Tom Peters/Y2K Seminar

Kuwait29 May 2000

BiasesAmerican

CalifornianSilicon Valley Resident [29 years]

***I ardently believe in the power of

free markets and animated entrepreneurs.

1 Year = 1.5 Wal*Marts

03.27.99: $167B03.27.00: $555B

P.S.: Wal*Mart = #8 in 2000

Pentium III 800MHz: $42,893.00/#Hermes Scarf: $1,964.29

Saving Private Ryan on DVD: $874.75Mercedes-Benz: $18.98Hot-rolled steel: $0.19

Source: Fortune (3.20.00)

“Researchers say they have found a way to mate human cells with circuitry in a ‘bionic chip’ … The tiny device – smaller and thinner

than a strand of hair – combines a healthy human cell with an electronic circuitry chip.”

AP/AOL/02-00

No Wiggle Room!

“Incrementalism is innovation’s worst

enemy.” Nicholas Negroponte

Just Say No …

“I don’t intend to be known as the ‘King of the

Tinkerers.’ ”CEO, large financial services company

(New York, 5-99)

“It means nothing less than the total

reinvention of this company.”

Jacques’ New New Ford

Ford + MSN CarPointFord + Yahoo!Ford + Oracle

Ford + HP/MCIWorldcomEtc.Etc.

“There’s 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

“I genuinely believe we are living through the greatest intellectual moment in history.”

Matt Ridley, Genome

Seminar Y2K

Brand Everything:Distinct or Extinct!

Forget > Learn“The problem is never how to get new, innovative thoughts into your mind, but how to get old ones out.”

Dee Hock

“When asked to name just one big merger that had lived up to

expectations, the cochairman of Goldman Sachs’ Investment Policy

Committee answered: ‘I’m sure there are success stories out there, but at

this moment I draw a blank.’ ”

Mark Sirower, The Synergy Trap

“Acquisitions are about buying market share. Our challenge is to create markets. There is a big difference.”

Peter Job, CEO, Reuters

“Our ideal acquisition is a small startup that has a great technology product on the drawing board that is going to come out in six to twelve months. We buy the engineers and the next generation product. …” John Chambers, Cisco

“R & D”

Intel’s venture fund: 275 investments, $8B

Source: Fast Company , eCompany

Net World!

Act now. Analyze later.

Avram Miller

C.E.O. to

C.D.O.

“It used to be that the big ate the small. Now the fast eat the slow.”Geoff Yang, IVP/ (Institutional

Venture Partners)

E.g.: Craig Venter/Celera Genomics

The Gales of Creative Destruction

+29M = -44M + 73M

+4M = +4M - 0M

Brand Inside

Brand Org!

108 X 5vs.

8 X 1*

* 540 vs. 8

And Now the Equivalent …

White Collar Revolution!

The Pincer 5“Destructive” entrepreneurs/ Global

Competition“White Collar Robots”

THE INTERNET! [E.g.: GM + Ford + DaimlerChrysler]

Global Outsourcing [E.g.: India, Mexico]

Speed!!

RR on “Assetless” [JB] Sara Lee“The most profitable

businesses in the future will act as knowledge brokers, linking insights into what’s available

with insights into the customer’s individual needs

and preferences.”

The “&-!!+#$% in the middle”*

Jim Clark on Healtheon/WebMD

* ’twixt docs, patients, insurers and providers; $275B of $400B in waste; source: Michael

Lewis, The New New Thing

“We want to be the air traffic controllers

of electrons.”Bob Nardelli,

GE Power Systems

Buzzsaw.comBuilders, Owners, Architects,

Contractors, Suppliers

$3T industry

5,300 commercial bldg. projects’ specs on-line; +70 per day

12/31/00 (per Newsweek 04.24.00)

75% of U.S. universities will have on-line offerings/ 5.8 million students

“Unbundling” profs’ jobs (star lecturer, facilitator)/ Repackage “content”

as multi-media “event”355 studies: Equal results!

These are …

L.A.D.T.I.R.S.*

*Life-and-death-total-industry-reinvention-struggles

Brand Inside

Brand Work!

So … What will be the Basic Building Block of the

New Org Unit?

Why are there no books on how to create

a “Cool, Rocking, WOW-producing

Finance Department”?

NAPM: You are the Rock Stars

of the B2B Age!

“support function” / “cost center” / “bureaucratic

drag”or …

“Rock Stars of the ‘Age of Talent’ ”

Department Head

to …

Managing Partner, HR [IS, etc.] Inc.

PSF 1.0

Professional Service Firm Conversion Kit /

Release 1.0

The “7Ps” of PSF 1.0

Projects!Passion!

Provocation!Partnership!

Politics!Professionalism!

Performance!

“Reward excellent failures. Punish

mediocre successes.”

Phil Daniels, Sydney exec

“You really got to me. So many of our information technology projects take on a life of their own, and I know they’ll never end up as more than ‘mediocre successes.’ ”

CEO, F100 financial services company (10-98)

“Every project we take on starts with a question:

How can we do what’s never been done

before?”Stuart Hornery, CEO, Lend Lease

Measures

–WOW!–Beauty!–Raving Fans!–Impact!

Culture of Prototyping

“Effective prototyping may be the most valuable core

competence an innovative organization can hope to

have.”Michael Schrage

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

willing and able to seriously play. ‘Serious play’ is not an oxymoron;

it is the essence of innovation.”

Michael Schrage, Serious Play

“To Do”: Now!– List all projects– Carefully describe a “WOW Outcome” for you and

the Client– Score (!) all projects on WOW, Beauty, Impact,

Raving Fan-hood– Pick one project with a high combined score– Draft a one-page New Description that emphasizes

WOW, Beauty, etc.– Circulate and edit … for three days – Reduce to 5 bullet points

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

Characteristics of the “Also Rans”

“minimize risk” “respect the chain of command” “support the boss” “make budget”

Source: Fortune on “most admired global corporations” (10/26/98)

1) Turn ignition key.2) Shift into drive.

3) Press foot firmly on the throat of mediocrity.

Source: Mercedes ad

Brand Inside

Brand You!

“The fundamental unit of the new economy is not the corporation, but the individual. Tasks aren’t assigned and controlled through a stable chain of command but are carried out autonomously by independent contractors - e-lancers - who join together in fluid and temporary networks to sell goods and services. When the job is done, the network dissolves and its members become independent again, circulating through the economy, seeking the next assignment.”

Thomas Malone and Robert Laubacher

DISTINCT … OR EXTINCT!“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

Personal “Brand Equity” Evaluation– I am known for [2 to 3 things]; next year at this time I’ll

also be known for [1 more thing].– My current Project is challenging me …– New things I’ve learned in the last 90 days include …– My public “recognition program”

consists of …– Additions to my Rolodex in the last 90 days include …–My resume is discernibly different

from last year’s at this time …

R.D.A.

Rate: 15%?, 25%?

Therefore: Formal “Investment Strategy”/R.I.P.

Your R.I.P.:

IS IT … FORMAL? IS IT ... WOW!?

R.I.P.Use by yourself.

Use with your mates.Use [quantitatively?] as a measure of departmental/

P.S.F. renewal.Use in formal eval process.

H.R. to H.E.D. ???

HumanEnablement Department

“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”

Age of Auctions!

bid4geeks.com

Tomorrow’s Headlines

“Molecular biologists are up 3 points, economists

down 1/4, in moderate trading”futureWEALTH, Stan Davis and

Christopher Meyer

Seminar Y2K/Brand Inside

Message: Distinct … or

Extinct!

Brand Inside

Brand Talent!

“When land was the scarce resource, nations battled

over it. The same is happening now for talented people.”

Stan Davis & Christopher Meyer, futureWEALTH

Issue Y2K

The Great War for Talent!

Alan Kay on PARC’s Bob Taylor

“He was a connoisseur of

talent.”

A Connoisseur of Talent …– Spends time on Talent!– Becomes a student of Talent! – Puts Talent “on the agenda”!– Practices D.I.Y.– Uses Plain English! (If you want “sunny” …

ask for “sunny”!)– Creates Workspaces that foster energy,

entrepreneurship and creativity!– Recruits from oddball places! /

Recruits Oddballs!

Talent war, Web-speed!Every resume or employment

question that comes to Lucent via the Web gets answered in 30

minutes or less. [24/7.]Red Herring [06.00], on Lucent Director of

Recruitment Jim Baughman

A Connoisseur of Talent …– Recruits M.I. (Gardner: Logical-mathematical,

linguistic, artistic, musical, bodily-kinesthetic, intrapersonal-self, interpersonal-others)

– Recruits arts!– Becomes de facto C.D.O. (Chief Diversity Officer)– Turns the pay scale upside down!/ Pays Talent!– Rewards & Promotes all on Talent

Development Skills!– Spouts the Gospel of Renewal! (R.D.A./ R.I.P.)

“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

What Do We Do With Him?“He grew his hair long, played guitar in a rock band, chased

girls, got into trouble. At age 17 he was flogged by his house

master, who described him as ‘the most difficult boy I’ve ever

had to deal with.’ ”

Elect Him Prime Minister!

Tony Blair

“Conformity is the enemy of freedom

and the jailer of growth.”

J.F.K.

Talent = Brand

Brand Outside

Context:No “Commodities”!

In the Beginning …

“The audit has become a commodity.”

Big 5 audit partner to TP

Quality Not Enough!

“Quality as defined by few defects is becoming the price of entry for automotive marketers rather than

a competitive advantage.”

J.D. Power

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

What’s Special?

“Customers will try ‘low cost providers’ because the Majors have not given them any clear

reason not to.”

Leading Insurance Industry Analyst (10-98)

“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

The “10X/10X Phenomenon”

10 Times Better/

10 Times Less Different

“When we did it ‘right’ it was still pretty

ordinary.”

Barry Gibbons on “Nightmare No. 1”

Pretzel Crumb-less-ness Plus …

“The Ritz Carlton Experience enlivens the senses, instills

well-being and fulfills even the unexpressed wishes and needs of

the guest.”

from the Ritz Carlton Credo

TP’s “Mega-marketing-trends”

Rapidly aging population!Health fanaticism!

Environmental concerns!Freaky independence!

Women rule!

Context: “No” to “inevitable commoditization”

S1: Lead the Customer!S2: Master E-Commerce!

S3: Think Global!S4: Women Rule!

S5: Design Rules! (too)

S6: It’s the Experience!Net: Glorious Age of the BRAND!

Context: “No” to “inevitable commoditization”

S1: Lead the Customer!S2: Master E-Commerce!

S3: Think Global!S4: Women Rule!

S5: Design Rules! (too)

S6: It’s the Experience!Net: Glorious Age of the BRAND!

Brand Outside

Strategy 1:Lead the Customer!

“The customer is a rear view mirror, not a guide to the future.”

George Colony, Forrester Research

“If you worship at the throne of the voice of the customer, you’ll get only

incremental advances.”Joseph Morone, President, Bentley College

“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

Amen!

“The Age of the Never Satisfied

Customer”Regis McKenna

Context: “No” to “inevitable commoditization”

S1: Lead the Customer!S2: Master E-Commerce!

S3: Think Global!S4: Women Rule!

S5: Design Rules! (too)

S6: It’s the Experience!Net: Glorious Age of the BRAND!

Brand OutsideStrategy 2:

Use E-Commerce to Re-invent the

Business!

Dell’s Web sales … daily ?

$35,000,000.

2X = 100 days (Internet traffic)2X = 9 months

(network capacity)

Source: Red Herring (1-00)

Web World/05.001B pages/7B hotlinks/+1M per day

“For the first time in history, people everywhere have access to the

thoughts, products and writings of a large and growing percentage of

earth’s population.”The New Yorker/05.29.00

Tomorrow Today: Cisco!

90% of $14.4BSave $500M (service and tech

support)

C.Sat e >> C.Sat HCustomer Engineer Chat Rooms ($1B?)

B2B1999 – 2004: 50X

2004: $7.4Source: GartnerGroup (per Reuters 1-26-00)

T

GM/Ford/DaimlerChrysler (02-27)

Covisint$240B (+$500B)

I.P.O.

B2B = No.1CarStation (auto-body shops),

ChemConnect (chemicals), Collabria (commercial printing), DigitalThink (corporate training), E-Steel (steel), Medibuy (medical

supplies), Portera (knowledge workers), Etc., Etc., Etc., Etc.

Goal?Drive profits to

zero!**Remember AMR and “dynamic pricing.”

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

Anne Busquet/ American Express

Not: “Age of the Internet”

Is: “Age of Customer Control”

“In the network economy, the Website becomes the company’s primary interface to the customer.

The user interface becomes the marketing materials, store front,

store interior, sales staff and post-sales support all rolled into one.”

Jakob Nielsen, Designing Web Usability

“Even if executives of established businesses grasp the impact of new

technologies … they still face a massive competitive disadvantage precisely

because they are incumbents. … They do complex financial calculations and get

bogged down in internal political debates. Insurgents have no such

inhibitions.” Philip Evans & Thomas Wurster,

Blown to Bits

“ … if they set up a completely independent organization and let that organization attack the

parent.”

Clayton Christensen, The Innovator’s Dilemma

“Where does the Internet rank in priority? It’s No. 1, 2, 3, and 4.” Jack Welch

There are 2 Kinds of …

Defense*vs.

Offense**

*Fend off upstarts.**Reinvent our marketspace!

BIG GUYS [old economy] That “Get It”

FordGE

Merrill LynchEnron

ChevronWal*Mart

Web Strategy: GE Power Systems

“Launch and Learn”(4 sites in 30 days)

[He who has the quickest O.O.D.A. Loops* wins!

*Observe. Orient. Decide. Act. / Col. John Boyd]

Jargon Bath!Bureaucracy free …

Systemically integrated …Internet intense …

Knowledge based …Time and location free …“Instantly” responsive …

Customer centric …Mass customization enabled.

Translation …Bureaucracy free = Flat org, no B.S.

Systemically integrated = Whole supply chain tightly wired/ friction free

Internet intense = Do it all via the WebKnowledge based = Open access

Time and location free = Whenever, wherever“Instantly” responsive = Speed demons

Customer centric = Customer calls the shotsMass customization enabled = Every product

and service rapidly tailored to client requirements

“E-business is the final nail in the coffin

for bureaucracy at GE.”

Jack Welch/GE Annual Report 2000

Context: “No” to “inevitable commoditization”

S1: Lead the Customer!S2: Master E-Commerce!

S3: Think Global!S4: Women Rule!

S5: Design Rules! (too)

S6: It’s the Experience!Net: Glorious Age of the BRAND!

Brand OutsideStrategy 3:

Think Global!

Rule #1

There’s no such thing as “too small to

be global.”

Rule #2

If “it” is [truly] good … then it’s good

enough for … THE WORLD.

Rule # 3

When?

Now.

Rule #4

Hang out … vigorously!

Rule #5

Find a [modest-sized] partner …

who loves/ “gets” you!

Rule #6

Tailor!! [But don’t give away the store.]

Rule #7

Quality Guru Phil Crosby [“Do it right the first time!’]

notwithstanding, you’ll not [likely] “get it right the

first time”!

Context: “No” to “inevitable commoditization”

S1: Lead the Customer!S2: Master E-Commerce!

S3: Think Global!S4: Women Rule! S5: Design Rules! (too)

S6: It’s the Experience!Net: Glorious Age of the BRAND!

Brand Outside

Strategy 4:Women Rule!

For What It’s Worth …

A view from the West …

?????????

Home Furnishings … 94%Vacations … 92%

Houses … 91%Bank Account … 89%

Health Care … 75%Etc.

$3.3T + $1.5T = $4.8T*

* Larger than Japan!

Most Under-reported story!

9M*/28M(1 of 4)/$3.6T [> Germany]

* 400K in ’72; 132% since ’92

Sources: NFWBO, Cognetics, Business Wire (030600)

Women … 49% of Web users; 6 of 10 new users; 83% of wired women are primary decision makers for family healthcare,

finances, education.Source: Business Week (11-99)

Yeow!

1970 … 1%

2000 … 50%

Context: “No” to “inevitable commoditization”

S1: Lead the Customer!S2: Master E-Commerce!

S3: Think Global!S4: Women Rule!

S5: Design Rules! (too)

S6: It’s the Experience!Net: Glorious Age of the BRAND!

Brand Outside

Strategy 5:Design Rules!

And Tomorrow …

“Fifteen years ago companies competed on price. Now It’s quality. Tomorrow it’s

design.”Robert Hayes

All Equal Except …

“At Sony we assume that all products of our competitors have basically the same

technology, price, performance and features. Design is the only thing that differentiates one product

from another in the marketplace.”

Norio Ohga

“Design is treated like a religion at BMW.”

Fortune (10/98)

Object of Desire!“Every now and then, a design comes

along that radically changes the way we think about a particular object. Case in

point: the iMac. Suddenly, a computer is no longer an anonymous box. It is a

sculpture, an object of desire, something that you look at.”

Katherine McCoy, Michael McCoy, Illinois Institute of Technology

Design as Soul“We don’t have a good language to talk

about this kind of thing. In most people’s vocabularies, design means veneer. … But

to me, nothing could be further from the meaning of design. Design is the

fundamental soul of a man-made creation.”

Steve Jobs

Context: “No” to “inevitable commoditization”

S1: Lead the Customer!S2: Master E-Commerce!

S3: Think Global!S4: Women Rule!

S5: Design Rules! (too)

S6: It’s the Experience!Net: Glorious Age of the BRAND!

Brand Outside

Strategy 6:It’s the Experience!

“Experiences are as distinct from services as services are from

goods.”Joseph Pine & James Gilmore, The

Experience Economy: Work Is Theatre & Every Business a Stage

Experience: “Rebel Lifestyle!”

“What we sell is the ability for a 43-year-old accountant to dress in black leather, ride through small towns and have people be afraid

of him.”Harley exec, quoted in Results-based

Leadership

Mantra: “Any good can be ing-ed”

the driving experiencethe pumping experience

the sitting experiencethe reading experiencethe washing experiencethe cooking experience

Joseph Pine & James Gilmore, The Experience Economy: Work Is Theatre & Every Business a Stage

“This is the end of the pure product era. For instance, car

makers are beginning to understand that the car is a

platform for delivering services that drive the customer

experience.”Carly Fiorina, HP @ Comdex ’99

Context: “No” to “inevitable commoditization”

S1: Lead the Customer!S2: Master E-Commerce!

S3: Think Global!S4: Women Rule!

S5: Design Rules! (too)

S6: It’s the Experience!Net: Glorious Age of the BRAND!

Brand Outside

BRAND POWER!

Brand It! Now, More Than Ever!

“The increasing difficulty in differentiating between products and

the speed with which competitors take up innovations will assist in the rise

and rise of the brand.”Gillian Law and Nick Grant, Management [New Zealand]

No Room for Brands?Nike

SaturnCNN

America OnlineCharles Schwab

StarbucksThe Gap

IntelEtc.

Brand = Trust!

“Most buyers do not have a clue whether anybody else makes a better microprocessor, but ‘Intel Inside’ has become a ‘trust mark’ - a trademark that consumers put their faith in.”

The Economist

“Consumers don’t simply buy products, they buy attitudes as well. When confronted with proliferation and

diversity, choices become increasingly informed by belief. [Consumers] want to

know who is behind the products that they buy. They want to know the

company. They want to know what you think.”

Jesper Kunde, Corporate Religion

“Corporate Religion is a completely new way of thinking about companies. Today, the product is still the main communication

highway in the company. When companies make the shift to selling solutions, brands and attitudes … communicating the company’s

attitudes and values becomes the decisive parameter for success. It

demands that you find out who you are as a company.”

Jesper Kunde, Corporate Religion

Brand Power: Calling the Corporate Shrink!

“Organizational Psychotherapy”/

WHO WE ARE!

Brand = You Must Care!

“Success means never letting the competition define you. Instead you have to define

yourself based on a point of view you care deeply about.”

Tom Chappell, Tom’s of Maine

Rules of “Radical Marketing”

Love + Respect Your Customers!Hire only Passionate Missionaries!Create a Community of Customers!

Celebrate Craziness!Be insanely True to the Brand!

Sam Hill & Glenn Rifkin, Radical Marketing (e.g., Harley, Virgin, The Dead, HBS, NBA)

Context: “No” to “inevitable commoditization”

S1: Lead the Customer!S2: Master E-Commerce!

S3: Think Global!S4: Women Rule! (and the elderly)

S5: Design Rules! (too)

S6: It’s the Experience!Net: Glorious Age of the BRAND!

Brand Leadership

Passion Rules!

Brand Leadership!“A key – perhaps the key –

to leadership is the effective

communication of a story.”

Howard Gardner Leading Minds: An Anatomy of Leadership

“Leadership is a performance. You have to be

conscious of your behavior, because everybody else is.”

Carly Fiorina

Brand Leadership:ENTHUSIASM RULES!

“I am a dispenser of enthusiasm.”/ Ben

Zander

Talent “War,” Marketplace “War”“The successful company has to

create an environment that imbues its employees with a sense of

passion.”Joe Nocera, eCompany, on David Pottruck

“The challenge for IBM, AT&T and other mainstream companies is to re-instill a sense of adventure in

recruits.”Burke Stinson, AT&T

Ann Richards’ DogmaShow up!

Know your message!

PUT YOURSELF AT RISK EVERY DAY!

(Personal) Accountability?!

WHERE WERE YOU DURING THE GREAT ENTERPRISE

REVOLUTION OF Y2K?

“If things seem under control, you’re just

not going fast enough.”

Mario Andretti