Tom Peters

EXCELLENCE. ALWAYS.

ZIM Integrated Shipping ServicesNEWAVE08/AgenTeam02 July 2008/Macau (Taipa-Coloane)

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Thank you Ike, Ben and Delaware

Allied commands depend on mutual confidence [and this confidence] is gained, above all through the development of friendships.

General D.D. Eisenhower, Armchair General* (05.08) *Perhaps his most outstanding ability [at West Point] was the ease with which he made friends and earned the trust of fellow cadets who came from widely varied backgrounds; it was a quality that would pay great dividends during his future coalition command

Give good tea!

eighty percent of success is showing up.

Woody Allen

l (+21) = L(-21)

Thank you Rich!

Mapping your competitive position*

or

*Rich DAveni/HBR

The Have you 50*

*See Appendix One

1. Have you in the last 10 days visited a customer?2. Have you called a customer TODAY? * *Note: See APPENDIX ONE for full list

#1

I am often asked by would-be entrepreneurs seeking escape from life within huge corporate structures, How do I build a small firm for myself? The answer seems obvious: Buy a very large one and just wait.

Paul Ormerod, Why Most Things Fail: Evolution, Extinction and Economics

Mr. Foster and his McKinsey colleagues collected detailed performance data stretching back 40 years for 1,000 U.S. companies. They found that none of the long-term survivors managed to outperform the market. Worse, the longer companies had been in the database, the worse they did. Financial Times

Dick Kovacevich: You dont get better by being bigger. You get worse.

Data drawn from the real world attest to a fact that is beyond our control: Everything in existence tends to deteriorate.

Norberto Odebrecht, Education Through Work

#1.1

#1 Exporter?

#4 Japan#3 USA#2 China#1 Germany

Reason??!!

Mittelstand

Or Goldmann Produktions(11/50%/$5M/dip and coat, expensive pigments vs through coloring, fades Bekro Chemie)

#2

1/42

This is so simple it sounds stupid, but it is amazing how few oil people really understand that you only find oil if you drill wells. You may think youre finding it when youre drawing maps and studying logs, but you have to drill.

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

We made mistakes, of course. Most of them were omissions we didnt think of when we initially wrote the software. We fixed them by doing it over and over, again and again. We do the same today. While our competitors are still sucking their thumbs trying to make the design perfect, were already on prototype version #5. By the time our rivals are ready with wires and screws, we are on version #10. It gets back to planning versus acting: We act from day one; others plan how to planfor months. Bloomberg by Bloomberg

Experiment fearlessly

Source: BW0821.06, Type A Organization Strategies/ How to Hit a Moving TargetTactic #1

Culture of Prototyping

Effective prototyping may be the most valuable core competence an innovative organization can hope to have. Michael Schrage

Excellence1982: The Bedrock Eight Basics

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

#3

2-5/42

De-cent-ral-iz-a-tion!

Enemy #1

I.C.D.

Note 1: Inherent/Inevitable/Immutable Centralist DriftNote 2: Jim Burkes 1-word vocabulary: No.

Decentralization vs Centralization = Thats All There Is (from childrearing 101 to the Federalist Papers to Org.2007)

Ex-e-cu-tion!

Execution is the job of the business leader. Larry Bossidy & Ram Charan/ Execution: The Discipline of Getting Things Done

(1) sum of Projects = Goal (Vision) (2) sum of Milestones = project

(3) rapid Review + Truth-telling = accountability

Ac-count-a-bil-ity!

CF: 30% (no salesfolk)MH: 80% (salesfolk)

GE has set a standard of candor. There is no puffery. There isnt an ounce of denial in the place. Kevin Sharer, CEO Amgen, on the GE mystique (Fortune)

6:15A.M.

DECENTRALIZATION.EXECUTION.ACCOUTABILITY.6:15A.M.

#3.1

K.i.s.s.

*Keep It Simple, Stupid

90K in U.S.A. ICUs on any given day; 178 steps/day in ICU.50% stays result in serious complication

Source: Atul Gawande, The Checklist (New Yorker, 1210.07)

Case: The simple Checklist!

**Peter Pronovost, Johns Hopkins, 2001**Checklist, line infections**1/3rd at least one error when he started**Nurses/permission to stop procedure if doc, other not following checklist**In 1 year, 10-day line-infection rate: 11% to 0%

Source: Atul Gawande, The Checklist (New Yorker, 1210.07)

**Docs, nurses make own checklists on whatever process-procedure they choose**Within weeks, average stay in ICU down 50%

Source: Atul Gawande, The Checklist (New Yorker, 1210.07)

Beware of the tyranny of making Small Changes to Small Things. Rather, make Big Changes to Big Things. Roger Enrico, former Chairman, PepsiCo

Beware of the tyranny of making Small Changes to Small Things. Rather, make Big Changes to Big Things using Small, Almost Invisible Straightforward Levers with Big Systemic Impact. TP

Everything matters

-80%

Source: Nudge, Richard Thaler and Cass Sunstein, etching of fly in the urinal reduces spillage by 80%, Schiphol Airport

#4

+1/42

X =XFX*

*Excellence = Cross-functional Excellence

**Stanford/Hagadorn/Interdisciplinary raison dtre**Conoco/geologists-geophysicists**Old HP/R&D-Sales**Schlumberger IPM-IBM Global Services- UPS Logistics, HP-EDS (bet the company on integrating others product and service delivery throughout the supply chain)**GSK/7 CEDDs**Chiat/Day**Batalden/DHMC/clinical microsystems**JCS assignment pre-Flag**Etc.**Etc.

The XF-50: 50 Ways to Enhance Cross-Functional Effectiveness and Deliver Speed, Service Excellence and Value-added Customer Solutions

1. Its our organization to make workor not. Its not them, the outside world thats the problem. The enemy is us. Period.

2. Friction-free! Dump 90% of middle managersmost are advertent or inadvertent power freaks. We are allevery one of usin the Friction Removal Business, one moment at a time, now and forevermore.3. No stovepipes! Stove-piping, Silo-ing is an Automatic Firing Offense. Period. No appeals. (Within the limits of civility, somewhat public firings are not out of the questionthat is, make one and all aware why the axe fell.)4. Everything on the Web. This helps. A lot. (Everything = Big word.)5. Open access. All available to all. Transparency, beyond a level thats sensible, is a de facto imperative in a Burn-the-Silos strategy.

6. Project managers rule!! Project managers running XF (cross-functional) projects are the Elite of the organization, and seen as such and treated as such. (The likes of construction companies have practiced this more or less forever.)

7. Value-added Proposition = Application of integrated resources. (From the entire supply-chain.) To deliver on our emergent business raison detre, and compete with the likes of our Chinese and Indian brethren, we must co-operate with anybody and everybody 24/7. IBM, UPS and many, many others are selling far more than a product or service that worksthe new it is pure and simple a product of XF co-operation; the product is the co-operation is not much of a stretch.

Never waste a lunch!*

????

% XF lunches*

*Measure!

8. XF work is the direct work of leaders!9. Integrated solutions = Our Culture. (Therefore: XF = Our culture.)10. Partner with best-in-class only. Their pursuit of Excellence helps us get beyond petty bickering. An all-star team has little time for anything other than delivering on the (big) Client promise.11. All functions are created equal! All functions contribute equally! All = All.12. All functions are PSFs, Professional Service Firms. Professionalism is the watchwordand true Professionalism rise above turf wars. You are your projects, your legacy is your projectsand the legacy will be skimpy indeed unless you pass, with flying colors, the works well with others exam!13. We are all in sales! We all (a-l-l) sell those Integrated Client Solutions. Good salespeople dont blame others for screw-upsthe Clint doesnt care. Good salespeople are quarterbacks who make the system work-deliver.

14. We all invest in wiring the Client organizationwe develop comprehensive relationships in every part (function, level) of the Clients organization. We pay special attention to the so-called lower levels, short on glamour, long on the ability to make things happen at the coalface.

15. We all live the Brandwhich is Delivery of Matchless Integrated Solutions which transform the Clients organization. To live the brand is to become a raving fan of XF co-operation.

???????

Success doesnt depend on the number of people you know; it depends on the number of people you know in high places!

or

Success doesnt depend on the number of people you know; it depends on the number of people you know in low places!

1. Most Tries Wins2. DECENTRALIZATION.3. EXECUTION.4. ACCOUTABILITY.5. 6:15A.M.6. XFX

#5

Hard Is SoftSoft Is Hard

If I could have chosen not to tackle the IBM culture head-on, I probably wouldnt have. My bias coming in was toward strategy, analysis and measurement. In comparison, changing the attitude and behaviors of hundreds of thousands of people is very, very hard. [Yet] I came to see in my time at IBM that culture isnt just one aspect of the game it is the game. Lou Gerstner, Who Says Elephants Cant Dance

#5.1

Hard Is SoftSoft Is Hard

R.O.I.R.

Return On Investment In Relationships

The capacity to develop close and enduring relationships is the mark of a leader. Unfortunately, many leaders of major companies believe their job is to create the strategy, organization structure and organizational processesthen they just delegate the work to be done, remaining aloof from the people doing the work. Bill George, Authentic Leadership

FYI: Relationship power = Monopoly power

FYI: Sustainable competitive advantage = Relationship-based advantage (period.)

#5.2

The four most important words in any organization are What do you think?

Source: courtesy Dave Wheeler, posted at tompeters.com, source of original unknown (0609.08)

18 Source: How Doctors Think, Jerome Groopman

#5.3

Hard Is SoftSoft Is Hard

Relationships (of all varieties): THERE ONCE WAS A TIME WHEN A THREE-MINUTE PHONE CALL WOULD HAVE AVOIDED SETTING OFF THE DOWNWARD SPIRAL THAT RESULTED IN A COMPLETE RUPTURE.

#5.4

Courtesies of a small and trivial character are the ones which strike deepest in the grateful and appreciating heart.

Henry Clay

#5.5

Attending to the Last 98%: The New Management Science, or Hard Is Soft, Soft Is Hard

NOTE: Complete section at APPENDIX 2

S = f( ___ )

Success Is a Function of

S = (#&DR; -2L, -3L, 4L; I&E)Number and depth of relationships 2, 3, and 4 levels down,inside and outside the organization

S = (SD>SU)Sucking down is more important than sucking upthe idea is to havethe entire organization working for you.

S = (#non-FF, #non-FL)Number of friends, number of lunches with people not in my function

S = (#FF)Number of friends in the finance function-organization

S = (OF)Oddball friends

S = (PDL)Purposeful, deep listeningthis is very hard

#6

EXCELLENCE. VALUE ADDED.UP THE LADDER.NoT Optional.

The Value-added Ladder/TRANSACTIONS

ServicesGoods Raw Materials

#6.1

EXCELLENCE.VALUE-ADDED LADDER. SOLVE IT.

M = $0

IBM: $55B*

*Also HP-EDS

And the M Stands for ?

Gerstners IBM: Systems Integrator of choice./BW (Lou, help us turn all this into that long-promised revolution. )

IBM Global Services* (*Integrated Systems Services Corp.): $55B

Planetary Rainmaker-in-Chief!

Palmisanos strategy is to expand techs borders by pushing usersand entire industriestoward radically different business models. The payoff for IBM would be access to an ocean of revenuePalmisano estimates it at $500 billion a year that technology companies have never been able to touch. Fortune

THE GIANT STALKING BIG OIL: How Schlumberger Is Rewriting the Rules of the Energy Game.: IPM [Integrated Project Management] strays from [Schlumbergers] traditional role as a service provider and moves deeper into areas once dominated by the majors.

Source: BusinessWeek cover story, January 2008

Big Browns New Bag: UPS Aims to Be the Traffic Manager for Corporate America Headline/BW

UPS wants to take over the sweet spot in the endless loop of goods, information and capital that all the packages [it moves] represent. ecompany.com (E.g., UPS Logistics manages the logistics of 4.5M Ford vehicles, from 21 mfg. sites to 6,000 NA dealers)

MasterCard Advisors

California Closets: a whole-life upgrade, not just a tidy bedroom.

WSJ/0329.07, Why the Container-Store Guy Wants to Be Your Therapist

Huge: Customer Satisfaction versus Customer Success

The Value-added Ladder/TRANSFORMATION

Customer Success/ Gamechanging Solutions

ServicesGoods Raw Materials

The business of selling is not just about matching viable solutions to the customers that require them. Its equally about managing the change process the customer will need to go through to implement the solution and achieve the value promised by the solution. One of the key differentiators of our position in the market is our attention to managing change and making change stick in our customers organization.* (*E.g.: CRM failure rate/Gartner: 70%)

Jeff Thull, The Prime Solution: Close the Value Gap, Increase Margins, and Win the Complex Sale

The Value-added Ladder/TRANSFORMATION

Customer Success through Implemented Gamechanging Solutions*ServicesGoods Raw Materials

*Subject-matter Professionals and Organization Effectiveness Experts (Degree: MBA, Organizational Psychology)

#6.1.1

EXCELLENCE.SOLVE IT. NO OPTION.PSF. (PSF++)

Organizations will still be critically important in the world, but as organizers, not employers! Charles Handy

Department Head

to

Managing Partner, IS [HR, R&D, etc.] Inc.

Answer:

PSF

Are you the

Principal Engine of Value Added

*E.g.: Your R&D budget as robust as the New Products team?

#6.1.2

The PSF35: Thirty-Five Professional Service Firm Marks of Excellence

The PSF35: The Work & The Legacy 1. CRYSTAL CLEAR POINT OF VIEW (E very Practice Group: If you cant explain your position in eight words or less, you dont have a positionSeth Godin) 2. DRAMATIC DIFFERENCE (We are the only ones who do what we doJerry Garcia) 3. Stretch Is Routine (Never bite off less than you can chewanon.) 4. Eye-Appetite for Game-changer Projects (Excellence at Assembling Best TeamFast) 5. Playful Clients (Adventurous folks who unfailingly Aim to Change the World) 6. Small Uneconomic Clients with Big Aims7. Life Is Too Short to Work with Jerks (Fire lousy clients) 8. OBSESSED WITH LEGACY (Practice Group and Individual: Dent the UniverseSteve Jobs) 9. Fire-on-the-spot Anyone Who Says, Law/Architecture/Consulting/ I-banking/ Accounting/PR/Etc. has become a commodity 10. Consistent with #9 above DO NOT SHY AWAY FROM THE WORD (IDEA) RADICAL

The PSF35: The Client Experience

11. Always team with client: full partners in achieving memorable results (Wanted: Chimeras of Moonstruck Minds!)12. We will seek assistance Anywhere to assemble the Best-in- Planet Team for the Project13. Client Team Members routinely declare that working with us was the Peak Experience of my Career14. The jobs not done until implementation is 100.00% complete (Those who dont get it must go)15. IMPLEMENTATION IS NOT COMPLETE UNTIL THE CLIENT HAS EXPERIENCED CULTURE CHANGE16. IMPLEMENTATION IS NOT COMPLETE UNTIL SIGNIFICANT TECHNOLOGY TRANSFER HAS TAKEN PLACE-ROOT (Teach a man to fish )17. The Final Exam: DID WE MAKE A DRAMATIC, LASTING, GAME-CHANGING DIFFERENCE?

UniCredit Group/ UniCredito Italiano* **

3rd party measurementCustomer-initiated measurementPrimary $$$$ incentivesFactoriesPrimary Corporate InitiativeEtc

*#13**TP/#1

Ideal finance staffer: **Full-scale business partner [CFO?] to the/each department she serves.**Not copobsessed instead with value-added**Integration first, stovepipe secondary**MBWA/bigtime**Networker to the rest of Finance

#6.1.3

Psf.Bedrock.

Purchasing Officer Thrust #1: Cost (at All Costs*) Minimization Professional? Or/to: Full Partner-Leader in Lifetime Value-added Maximization?

(*Lopez: Arguably Villain #1 in GM tragedy/Anon VSE-Spain)

Fleet Manager

Rolling Stock Cost Minimization Officer

vs/or

Chief of Fleet Lifetime Value Maximization

Strategic Supply-chain Executive

Customer Experience Director (via drivers)

Big Idea: Corporation as Mega-PSF (Professional Service Firm*)

* Virtual Collection of Entrepreneurially-minded Professionals (Talent/Roster) Creating/Applying Intellectual Capital (Work Product)

Are you the

Principal Engine of Value Added

*E.g.: Your R&D budget as robust as the New Products team?

#6.2

EXCELLENCE.VALUE-ADDED LADDER. EXPERIENCE IT.

Experiences are as distinct from services as services are from goods. Joe Pine & Jim Gilmore, The Experience Economy: Work Is Theatre & Every Business a Stage

The [Starbucks] Fix Is on

We have identified a third place. And I really believe that sets us apart. The third place is that place thats not work or home. Its the place our customers come for refuge. Nancy Orsolini, District Manager

The Value-added Ladder/ MEMORABLE CONNECTION

Spellbinding Experiences*Customer Success/Implemented Gamechanging SolutionsServicesGoods Raw Materials

*Theatrical Skills (Degree: Theater Arts)

TGR

[Things Gone WRONG/Things Gone RIGHT]

2-cent candy

#7

We are the company we keep

The Hang Out Axiom: At its core, every (!!!) relationship-partnership decision (employee, vendor, customer, etc) is a strategic decision about: Innovate, Yes or No

Measure Strangeness/Portfolio Quality

StaffConsultantsVendorsOut-sourcing Partners (#, Quality)Innovation Alliance PartnersCustomersCompetitors (who we benchmark against) Strategic Initiatives Product Portfolio (LineEx v. Leap)IS/IT ProjectsHQ LocationLunch MatesLanguageBoard

Diverse groups of problem solversgroups of people with diverse toolsconsistently outperformed groups of the best and the brightest. If I formed two groups, one random (and therefore diverse) and one consisting of the best individual performers, the first group almost always did better. Diversity trumped ability. Scott Page, The Difference: How the Power of Diversity Creates Better Groups, Firms, Schools, and Societies Diversity

#9

EXCELLENCE. BEDROCK.LEADERSHIP. THE 9Ps.

PURPOSE.PASSION.Potential.Presence.Personal.PERSISTENCE.PEOPLE. Potent.Positive.

PURPOSE.PASSION.Potential.Presence.Personal.PERSISTENCE.PEOPLE. Potent.Positive.

I am a Dispenser of Enthusiasm!Ben Zander

PURPOSE.PASSION.Potential.Presence.Personal.PERSISTENCE.PEOPLE. Potent.Positive.

The role of the Director is to create a space where the actors and actresses can become more than theyve ever been before, more than theyve dreamed of being. Robert Altman, Oscar acceptance speech

PURPOSE.PASSION.Potential.Presence.Personal.PERSISTENCE.PEOPLE. Potent.Positive.

MBWA

PURPOSE.PASSION.Potential.Presence.Personal.PERSISTENCE.PEOPLE. Potent.Positive.

You must be the change you wish to see in the world.

Gandhi

PURPOSE.PASSION.Potential.Presence.Personal.PERSISTENCE.PEOPLE. Potent.Positive.

Relentless: One of my superstitions had always been when I started to go anywhere or to do anything, not to turn back , or stop, until the thing intended was accomplished. Grant

PURPOSE.PASSION.Potential.Presence.Personal.PERSISTENCE.PEOPLE. Potent.Positive.

On NELSON: [other] admirals more frightened of losing than anxious to win

#10

Excellence can be obtained if you: ... care more than others think is wise; ... risk more than others think is safe; ... dream more than others think is practical; ... expect more than others think is possible.

Source: Anon. (Posted @ tompeters.com by K.Sriram, November 27, 2006 1:17 AM)

Excellence Is a Universal Striving.If Not Excellence, What? If not excellence now, when?

***I am an unabashed Michael Schrage fan. I admit it. AND HIS UNABASHED OBSESSION WITH PROTOTYPING MATCHES MINE!

In short: It aint real til weve done something REAL.

Good news [per Schrage and me]: You CAN do something real in short order if your head is screwed on right.********