Slides at … tompeters

NOTE: To appreciate this presentation, you need MicrosoftWord FONTS Showcard Gothic, Ravie, Chiller and Verdana

Master*Excellencepart one (of 3)

introduction to excellence.Innovate. Or. die.Bias for action.

25 May 2007

Tom Peters X25*

EXCELLENCE. ALWAYS.

MASTER/0525.2007/Part One

*In Search of Excellence 1982-2007

Slides at

tompeters.com

All you need to know

You = Your calendar*

*Calendars never lie

The one thing you need to know about sustained individual success: Discover what you dont like doing and stop doing it.

Marcus Buckingham, The One Thing You Need to Know

20-minute rule Craig Johnson/30 yrs

>70*

*Hank Paulson, China visits, Fortune 1127.06

a blinding flash of the obvious Manny Garcia

All you need to know except for

Conrad Hilton, at a gala celebrating his life, on the most important lesson youve learned in you long and distinguished career: remember to tuck the shower curtain inside the bathtub

This is it:All you need to know

Thank you, Ann!!!

Thank you!!!

FLOWER POWER

Cause (worthy of commitment)Space (room for/encouragement for initiative) Decency (respect, humane)

The Managers Book of Decencies: How Small /gestures Build Great Companies. Steve Harrison, Adecco

Leaders SERVE people. Period. Anon.

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.

If God spoke to me by saying, Mark, youre down to your last three words: What would you want to say to your fellow humans that would make the most positive impact? It would be a close call between Love Thy Neighbor and Wash Your Hands .Mark Pettus, M.D., The Savvy Patient

The most important thing you can do to keep from getting sick is to wash your hands. CDC/National Center for Infectious Diseases

Whats Really Propping Up the Economy: Healthcare has added 1.7 million jobs since 2001. The rest of the private sector? None.

Source: Title, cover story, BusinessWeek, 0925.2006

New Economy?!

Sergey + Larry > Harvard/370

Truly All you need to know

80,000,000*

* N America, W Europe, Japan (800,000,000)

Truly, truly All you need to know

Forget China, India and the Internet: Economic Growth Is Driven by Women. Headline, Economist, April 15, 2006, Leader, page 14

New Zealand 2007

Ho hum: 2+ weeks in New Zealand

PfizerFordGapChryslerYahoomicrosoftwal*mart??????

The last word: There is no last word.

Flat as a Pancake (Or Worse)

Wal*Mart Dell Intel Home Depot Microsoft GE

We may not be interested in chaos but chaos is interested in us.

Robert Cooper, The Breaking of Nations: Order and Chaos in the Twenty-first Century

It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change. Charles Darwin

The Creative Age is a wide open game.

Richard Florida, The Rise of the Creative Class

Better By Design: A National Strategy

NZ = Design Excellence

Taiwan, Your Partner in InnoValue

Poster/Bucharest/03.06

5 (Years) /42 (New Airports)

1 Houston/Month/15

Let China sleep, for when she awakes she will shake the world. Source: Napoleon

S & P 500, circa 2007: >50% of revenue from outside the U.S., first time

Source: NYT, 0514.07

0/800:normal!

F(Anger/Passion) >>>> f(Pushback from Threatened Fat-cats & Bureau-crats)

Intelligent people can always come up with intelligent reasons to do nothing. Scott Simon

Game plan: The unvarnished Basics

Excellence. Always.

Soft is Hard. Hard is soft.

Innovate. Or die.

Up, up, up the value added ladder./New markets.

Talent time! Brand you! Creative age!

Leadership.

Excellence! Always!

Soft is hard. Hard is soft. (People, customers hard, #s soft)25 (Blinding flash of the obvious)Wow! (Passion! Enthusiasm! Hot language! Insanely greatSteve Jobs)Wow EVERYWHERE (Jims Group, Basement Systems Inc)

Innovate. Or die.Top line obsession!!! (CRO/Chief Revenue Officer; Sales>Marketing; cost cutting = death spiralVH) Innovation = Mess (What makes God laugh? People making plans.)1/100 (Big over-rated/Mega-mergers destroy value/Built to last chimeraBuilt to last v Built to rock the world (TPs love affair with Netscape) Last word = There is no last word!0/800 (We are who we hang out with/Weird for weird times)Lead the customer!Whacky Wild WikiWorld! (Electronic planetary scrum.)Try stuff!!!!!!!!! (R.F.A., S.A.V.) (Ready. Fire. Aim. Screw Around Vigorously.)Fail. Forward. Fast. (Reward excellent failures. Punish mediocre successes.)Try MORE stuff!!! (You miss 100% of the shots you dont take.)Parallel Universe (Jill Ker Conway, Starbucks 1%, Intel V.C. fund, China!)4/40 (4 learnings in 40 years: Decentralization, Execution, Accountability, 6:15AM)Lord Nelson (Other admirals more afraid of losing )

Up, Up, Up the VA Ladder (Solutions/PSF, Experience; Dreamketing; Lovemark)Women rule! (Buy all ! Control all wealth! Better leaders!)$15,000,000,000,000/7 of 13 (Boomers. Geezers. Wealth. Half of life still to go)

Brand You (Or else!)PSF!!! (All)Talent = Brand (Leaders do people, connoisseur of talent, Send em on bold Quests, HR rules! PeopleX$$$ ) (Think: Wegmans)195,000 (Healthcare: Quality-Safety/EMR/DSS, Prevention-Wellness, Public Health #1!)Teach to test = Evil! (The Creative Age is a wide-open game. Richard Florida)

Leadership/12Ps (Purpose. Passion. Potential. Presence. Personal. Pissed off.Playful. Persistence. People. Peculiar. Potent. Positive.)Do one thing every day that scares you. (Eleanor Roosevelt)Basics! (Decency. Flowers. Grace. Respect. Servant. Host. Etc.)

Honestly, All you need to know

You do not merely want to be the best of the best. You want to be considered the only ones who do what you do. Jerry Garcia

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)

EXCELLE ALWAYS.

Tom Peters X25*

EXCELLENCE. ALWAYS.

*In Search of Excellence 1982-2007

*Context/5/42/500/900.*Weeks of Whoops! *Built to Flop: Pitiful Performance!*Innovate. Or. die. *Value-added Ladder/raw materials to lovemarks. *BEDROCK: MODEL PSF.*New Markets/women. Boomers-geezers.* aside: Eternal Basics.*Talent. BRAND YOU. Education.*VIRAL Leadership.

The Irreducible209

A frustrated participant at a seminar for investment bankers in Mauritius listened impatiently to my explanation of differences of opinion among me, Mike Porter, Gary Hamel, Jim Collins, etc. Finally, hed had enough. What, if anything, he asked, do you believe for sure? I mumbled something, but his query started rumbling around in my mind. Three days later, wandering on a Sunday in London, the idea of the irreducibles occurred to meand I started jotting down notes on stuff I do indeed believe for sure. Before I knew it, a few days later, the list had grown to 209 items. Hence The Irreducible209 that follows.

Tom Peters

1. Hare 1, Tortoise 0. (Hare-y times.)2. Tempo. (O.O.D.A.)3. MBWA.4. Appreciation. (Motivator #1.) (Cant be faked. Good.)5. Decency.6. Hurry.7. Time out.8. One matters. 9. Big change. Short time. (Alt not work.)10. Excellence. Always.11. Passion. Energy. Hustle. Enthusiasm. Exuberance. (Move mountains. No alt.)12. You must care.13. Emotion.14. Hard is soft. (Soft is hard.)

EXCELLE ALWAYS.PART ONE.

EXCELL-ENCE????

Axiom: We have met the enemy and he is us.

Axiom: The adaptive capabilities of big corporations taken as a whole is problematic [read: pathetic].

Antidote: The answer is 75%+ internal. To sustain/win, we must first and foremost and in perpetuity beat back the insidious forces of darknesssize and inertia and fear and timidity and over-complexity.

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

S&P Stability Ratings*

1985 2006

Low Risk 41% 13% Average Risk 24% 14%High Risk 35% 73%

*Likelihood of stable long-term earnings growth

Source: Fortune (2 October 2006)

Uncertainty is the only thing to be sure of. Anthony Muh,head of investment in Asia, Citigroup Asset Management

Forbes100 from 1917 to 1987: 39 members of the Class of 17 were alive in 87; 18 in 87 F100; 18 F100 survivors significantly underperformed the market; 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

Welcome to the Club of Shattered Dreams:

Of Koreas Top 100 companies in 1955, only 7 were still on the list in 2004. The 1997 crisis destroyed half of Koreas 30 largest conglomerates.

Source: KET Issue Report, Kim Jong Nyun (14.05.2005)

GM25/50-75: Built to last????

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

Wanted* ** : Corporate Senility!

*Desperately!

** The problem is never how to get new, innovative thoughts into your mind, but how to get the old ones out. Dee Hock

It is generally much easier to kill an organization than change it substantially.

Kevin Kelly, Out of Control

C.E.O.

to

C.D.O.

(Practical) Implication?

Go for it! (Why notalternative is slow death, at best)

Joe J. Jones 1942 2006 HE WOULDA DONE SOME REALLY COOL STUFF BUT HIS BOSS WOULDNT LET HIM!

Hmmmmm

Do one thing every day that scares you. Eleanor Roosevelt

BIAS.BUILT.TO.LAST.NOT.

Built to Last

vs

Built to Change/Rock the World

TP#1*:

Netscape!

*Where would you rather have worked for those 5 years, Netscape or IBM-HP-Microsoft-Oracle? (Where, 25 years from now, would you rather to be able to tell someonee.g., grandchildthat you worked?)

RMcK: A lot of companies in the Valley fail.

RN: Maybe not enough fail.

RMcK: What do you mean by that?

RN: Whenever you fail, it means youre trying new things.

Source: Fast Company

Great Companies SET THE AGENDA.*

* disturb the sleep of

EXCELLENCE. CIRCA 1982.

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

The older I get the less boring the basics become!

ExIn*: 1982-2002/Forbes.com

DJIA: $10,000 yields $85,000 EI: $10,000 yields $140,050

*Forbes/Excellence Index /Basket of 32 publicly traded stocks

Importance of Success Factors by Various Gurus/(Unreliable) Estimates by Tom Peters

Strategy Systems People Passion Porter 50% 20 20 10

Drucker 25% 35 25 15

Bennis 25% 20 30 25

Peters 15% 20 35 30

Hardball: Are You Playing to Play or Playing to Win? by George Stalk & Rob Lachenauer/HBS Press

The winners in business have always played hardball. Unleash massive and overwhelming force. Exploit anomalies. Threaten your competitors profit sanctuaries. Entice your competitor into retreat.

Approximately 640 Index entries: Customer/s (service, retention, loyalty), 4. People (employees, motivation, morale, worker/s), 0. Innovation (product development, research & development, new products), 0.

EXCELLENCE. CAUSES.ADVERSARIES.

Causes/1966-2006

Women/Market opportunityWomen/Leaders (right for the times)Design/Design-as-soulWow! (Hot language)Weird!Passion!/Enthusiasm!/Exuberance! (as Leader Lever #1)Brand You (or else)PSF = Bedrock (add value or bustevery group must demonstrate economic viability)PSF + Brand You + WOW Projects = New Biz LogicSales/+R > -C (increasing revenue more important than cutting cost)HealthCare/Wellness-Safety-H5N1Brand = Talent (best roster wins)New VA Ladder/Products-Services-SOLUTIONS-EXPERIENCES-DREAMKETING (Dream Marketing)-LOVEMARKDifferent > > BetterBoomers & Geezers/marketing to new mega-segment

Adversaries

B-schools (crappy at soft skills, implementation, leadership)Strategy-is-allBy-the-numbers managementDis-passionate managementFocus groupsIntuition discountedLeading as an intellectual taskLeading without passionCool language in Hot timesDilbert (accepting cubicle slavery)Bigness per se (severe scale limitationseven at Microsoft)White guys! (not really, but enough already)18-44 emphasis in marketing (geezers > youth for foreseeable future)-Cost > +Revenue (cost cutting more important than organic revenue growth) CI (continuous improvement in an age of discontinuous world)LESS THAN THE NO-HOLDS-BARRED PURSUIT OF EXCELLENCE

good words.Bad words.

Words that may NOT be used in my presence:

Motivate

In the end, management doesnt change culture. Management invites the workforce itself to change the culture.

Lou Gerstner

Words that may NOT be used in my presence:

Marketing

SellSellSell

Words that may NOT be used in my presence: Motivate Market MBA Plan (mostly) Worker Job Task Exceeds expectations HR Employee evaluation Man (mostly) Shareholder Value

Words that MAY be used in my presence: Invite (v. Motivate) Sell (v. Market) People (wed like to serve) (v. Market segment) Client (v. Customer) OJT/MFA (v. MBA) Act/ Execute (v. Plan) Talent (v. Worker) Quest/Adventure-in-EXCELLENCE (v. Job) Wow Project (v. Task) Rockin (profit-makin) PSF (v. Department) Theater (v. Office) Breathtaking Experience (v. Transaction that Exceeds expectations) Talent Fanatics Inc (v. HR) Brand You adventure (v Career development) Annual Report development session (v. Employee evaluation) Woman (v. Man)

Words that MAY be used in my presence: Wow! (v. Nice) Bloody-minded (v. Committed) Thank you! (v. ____) Attack/Innovate (v. defend/Entrench) Great stuff. Great people. Do it fanatics. (v. shareholder value) EXCELLENCE. ALWAYS. (v. Good work) (v. shareholder value)

Radically Thrilling Language!

Radically Thrilling.

BMW Z4 (ad)

Astonish me! (SD).

Build something great! (HY).

Make it immortal! (DO)

Insanely great (SJ)

In-sane-ly-great

EXCELLENCE.1982.Hard is soft.Soft is hard.

Hard Is SoftSoft Is Hard

Hard Is Soft (#s)Soft Is Hard (people)

Hard Is Soft (Plans, #s)

Soft Is Hard (people, customers, values, relationships))

R.O.I.R.

Measure #1: R.O.I.R.*

*Return On Investment In Relationships

Axiom #65: (1) Its always about relationships. (2) Sweat the small stuffand the big stuff will take care of itself.

A man without a smiling face must not open a shop. Chinese Proverb

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 gameit is the game. Lou Gerstner, Who Says Elephants Cant Dance

The Mexican Sierra has 17 plus 15 plus 9 spines in the dorsal fin. These can easily be counted. But if the sierra strikes on the line so that our hands are burned, if the fish sounds and nearly escapes and finally comes in over the rail, his colors pulsing and his tail beating the air, a whole new relational externality has come into beingan entity which is more than the sum of the fish plus the fisherman. The only way to count the spines of the sierra unaffected by this second relational reality is to sit in a laboratory, open an evil-smelling jar, remove a stiff colorless fish from the formalin solution, count the spines and write the truth. There you have recorded a reality which cannot be assailedprobably the least important reality concerning the fish or yourself,. It is good to know what you are doing . The man with this pickled fish has set down one truth and recorded in his experience many lies. The fish is not that color, that texture, that dead, nor does he smell that way. John Steinbeck

Soft Skills, Hard Dollars

Source: Headline, BigBuilder, September 2006

The 6Es

Exuberance! Energy!Empathy!Empowerment!Execution!Excellence!

EXCELLENCE. ASPIRATION.2006.

Why in the World did you go to Siberia?

Synonyms

PurityTranscendenceVirtueEleganceMajesty

Antonyms

Mediocrity

The Peters Principles: Enthusiasm. Emotion. Excellence. Energy. Excitement. Service. Growth. Creativity. Imagination. Vitality. Joy. Surprise. Independence. Spirit. Community. Limitless human potential. Diversity. Profit. Innovation. Design. Quality. Entrepreneurialism. Wow!

Enterprise* ** (*at its best): An emotional, vital, innovative, joyful, creative, entrepreneurial endeavor that elicits maximum concerted human potential in the wholehearted service of others.***

**Excellence. Always.

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

Business: The Ultimate Creative Endeavor.

Business: The Ultimate Personal Development-Growth Experience.

Business: The Ultimate Transcendent Service Opportunity.

BUSINESS IS ABOUT POWER. Joanne Lipman, editor, on Portfolio

Make sure your executive team includes top talent in design, engineering and manufacturing, because thats your only!

priority to build! Cars! People! Want! to buy!. Hot styling sells them and quality keeps them sold. Lee Iacocca, Where Have All the Leaders Gone?

enterprises that Matter & change the game offer solutions & experiences that surprise , amaze, and transform perceptions of whats possible and stick like super-glue in customers minds.* such offerings are brilliantly conceived and flawlessly delivered by unconventional, creative, hyper-committed, energetic talent from within & outside the organization. Tom Peters

E.g.: Apple, Whole Foods, Cirque du Soleil, Starbucks, Wegmans, London Drugs, Griffin Hospital/Planetree Alliance, John Laing Homes, RE/MAX, Sewell Autos, Jims Group, The Met/Big Picture, Virgin, Commerce Bank, Google, Basement Systems Inc., Ford (circa 1917), IBM (circa 1970), Wanamakers (circa 1880)

To me business isnt about wearing suits or pleasing stockholders. Its about being true to yourself, your ideas and focusing on the essentials. Richard Branson

No leader sets out to be a leader per se, but rather to express him- or herself freely and fully. That is leaders have no interest in proving themselves, but an abiding interest in expressing themselves. Warren Bennis, On Becoming a Leader

EXCELLENCE. ASPIRATION.

Every time we come to a comfort zone, we will find a way out. No Cloning. Reinvent the brand with each new show. A typical day at the office for me begins by asking, What is impossible that I am going to do today? Daniel Lamarre, president, Cirque du Soleil

Do one thing every day that scares you. Eleanor Roosevelt

Strive for Excellence. Ignore success. Bill Young, PR driver (courtesy Andrew Sullivan)

all you need to know

Cause (worthy of commitment)Space (room for/encouragement for initiative) Decency (respect, humane)

Cause (worthy of commitment)Space (room for/encouragement for initiative-adventures) Decency (respect, grace, integrity, humane) service (worthy of our clients & extended familys continuing custom)excellence (period)

Cause (worthy of commitment)Space (room for/encouragement for initiative-adventures) Decency (respect, grace, integrity, humane) service (worthy of our clients & extended familys continuing custom)excellence (period) servant leadership

Respect.Decency.Wee Gestures.

Its not people who arent credit-worthy. Its banks that arent people worthy.

Muhammad Yunus

Excellence defined

E.G.: An amazing performanceA sunrise, a bloom, a smileThank you (a gesture, an act of Grace)Extraordinary performance in an odd place (by an unlikely personEWR) (unlikely marketJims Group) X small (Small Giants)X med (Mittelstand)X largeSets the agendaOne at bat (Bobby Thompson, Kurt Gibson)A career (Roger Clemens)A novel, a short story, a sentenceAn Olympian (any)Loser with a great story (Rutgers, George Mason)Stuff (any sort) that makes you go wow / insanely great/gaspworthy (The lives of others)

EXCELLENCE. ASPIRATION.UNIVERSAL.

Jims Group

Jims Mowing CanadaJims Mowing UKJims AntennasJims BookkeepingJims Building MaintenanceJims Carpet CleaningJims Car CleaningJims Computer ServicesJims Dog WashJims Driving SchoolJims FencingJims FloorsJims PaintingJims PavingJims Pergolas [gazebos]Jims Pool CareJims Pressure CleaningJims RoofingJims Security DoorsJims TreesJims Window CleaningJims Windscreens

Note: Download, free, Jim Penmans book: What Will They Franchise Next? The Story of Jims Group

Jims Group: Jim Penman.* 1984: Jims Mowing. 2006: Jims Group. 2,600 franchisees (Australia, NZ, UK). Cleaning. Dog washing. Handyman. Fencing. Paving. Pool care. Etc.

People first. Private. Small staff. Franchisees can leave at will. 0-1 complaint per year is norm; cut bad ones quickly.

*Ph.D. cross-cultural anthropology; mowing on the sideSource: MT/Management Today (Australia), Jan-Feb 2006

Basement Systems Inc.

*Basement Systems Inc.*Larry Janesky*Dry Basement Science (115,000!)*1993: $0; 2003: $12M; 2006: $50,000,000+

EXCELLENCE. ASPIRATION.14 MAY 2007.EUGENE OR.

EXCELLENCE. REVENUE.MATTERS.MOST. TOP LINE TOM.

Our whole story is growing revenue.

Vernon Hill (Top-line driven; standard is bottom-line driven by cost cutting)

Analysts preferred cost cutting, as long as they could see two or three years of EPS growth. I preached revenue and the analysts eyes would glaze over. Now revenue is in because so many got caught, and earnings went to hell. They said, Oh my gosh, you need revenues to grow earnings over time. Well, Duh! Dick Kovacevich, Wells Fargo

Piersons entire focus was making airplanes. Forgeards focus was blurred by ambition. He wanted to move up and become co-chairman of EADS. Newsweek, 1023.06

Radio City Music Hall/2006: Franchise Lost!

TP: How many of you [3,000] really crave

TP: How many of you [3,000] really crave a new Chevy?

CR O**Chief Revenue Officer

P = R C

. Everyone lives by selling something.

Robert Louis Stevenson

SellSellSell

If you want to gain competitive advantage fast, the best place to do it is in sales.

Larry Webb, John Laing Homes

Make sure your top team includes top talent in design, engineering and manufacturing, because thats your only priority to build cars people want to buy. Hot styling sells them and quality keeps them sold. Lee Iacocca, Where Have All the Leaders Gone?

WE ARE ALL IN SALES!

Fred Reichhelds The Ultimate Question : Customer satisfaction is best measured* by one simple question, how likely are you to recommend ______ to a friend?

* Net Promoter Score

Incidentally

TAKE THIS QUICK QUIZ: Who manages more things at once? Who puts more effort into their appearance? Who usually takes care of the details? Who finds it easier to meet new people? Who asks more questions in a conversation? Who is a better listener? Who has more interest in communication skills? Who is more inclined to get involved? Who encourages harmony and agreement? Who has better intuition? Who works with a longer to do list? Who enjoys a recap to the days events? Who is better at keeping in touch with others? Source: Selling Is a Womans Game: 15 Powerful Reasons Why Women Can Outsell Men, Nicki Joy & Susan Kane-Benson

GE (more or less):

The Sales122: 122 Ridiculously Obvious Thoughts About Selling Stuff

Tom Peters/0402.2006

Part twoinnovation

EXCELLENCE. INNOVATE. OR. DIE.

To grow, companies need to break out of a vicious cycle of competitive benchmarking and imitation. W. Chan Kim & Rene Mauborgne, Think for Yourself Stop Copying a Rival, Financial Times

Characteristics of the Also rans*

Minimize riskRespect the chain of commandSupport the bossMake budget

*Fortune, article on Most Admired Global Corporations

EXCELLENCE. INNOVATION. THE REAL STORY.

Tom Peters/03.29.2007

The Perils of Conservatism/Industry Leadership

Good management was the most powerful reason [leading firms] failed to stay atop their industries. Precisely because these firms listened to their customers, invested aggressively in technologies that would provide their customers more and better products of the sort they wanted, and because they carefully studied market trends and systematically allocated investment capital to innovations that promised the best returns, they lost their positions of leadership.

Clayton Christensen, The Innovators Dilemma

What We Know For Sure About Innovation

Big mergers [by & large] dont workScale is over-ratedStrategic planning is the last refuge of scoundrelsFocus groups are counter-productiveBuilt to last is a chimera (stupid)Success killsForgetting is impossibleRe-imagine is a charming ideaOrderly innovation process is an oxymoronic phrase (= Believed only by morons with ox-like brains)Tipping points are easy to identify long after they will do you any goodFacts arentAll information making it to the top is filtered to the point of danger and hilaritySuccess stories are the illusions of egomaniacs (and gurus)If you believe the memoirs of CEOs you should be institutionalizedHerd behavior (XYZ is hot) is ubiquitous and amusingTop teams are DittoheadsCEOs have little effect on performanceExpert prediction is rarely better than rolling the dice

The Mess Is The Message! Period!

What makes God laugh?

People making plans!

What makes tom laugh?

Gurus (and once-famous CEOs) giving LLLs (logical linear lectures) on systems* of innovation!

*especially with lots of charts and graphs and Greek mathematical symbols and little tiny numbers

21C = -1c

Trip #1: The Rise and Fall of Strategic Planning

Recently I asked several corporate executives what decisions they had made in the last year that would not have been made were it not for their corporate plans. All had difficulty identifying one such decision. Since all of the plans are marked secret or confidential, I asked them how their competitors might benefit from possession of their plans. Each answered with embarrassment that their competitors would not benefit. Russell Ackoff (from Henry Mintzberg, The Rise and Fall of Strategic Planning)

The Mess Is the Message! Period!

An Economic Interpretation of the Constitution of the United States Charles Beard (1913)

The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger Marc Levinson

Tube: The Invention of Television David & Marshall Fisher Empires of Light: Edison, Tesla, Westinghouse, and the Race to Electrify the World Jill Jonnes

The Soul of a New Machine Tracy Kidder

Rosalind Franklin: The Dark Lady of DNA Brenda Maddox

The Blitzkrieg Myth John Mosier

Containerization is a remarkable achievement. No one foresaw how the box would transform everything it touchedfrom ships and ports to patterns of global trade. Containerization is a monument to the most powerful law in economics, that of unanticipated consequences. This history ought to be humbling to fans of modern management methods. Careful planning and thorough analysis, those business school basics, may have their place, but they provide little guidance in the face of disruptive changes that alter an industrys very fundamentals. Marc Levinson, FT, 0425.06 (author of The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger)

Lessons

Need-drivenA thousand parentsMessyEvolutionaryTrivialRelentless ExperimentationTrial & many, many eRRORsReal heroes seldom around when the battle is wonLoooong time for systemic adaptation/s(many innovations) (bill of lading, standard time)

Not

Plan-drivenThe product of Strategic Thinking/PlanningThe product of focus groups

Discover, by accident, blue ocean [womens financial needs]!

Ignore your [Dean Witter] boss!

Sell 750,000 copies of your latest book to Wells Fargo Home Mortgage!

Source: the David Bach story, including Smart Women Finish Rich, per IBD (01.08.07)

We are in a brawl with no rules. Paul Allaire

S.A.V.

First-level Scientific Success:Beyond Brains

First-level Scientific Success

The smartest guy in the room wins

Or

First-level Scientific Success

FanaticismPersistence-Dogged TenacityPatience (long haul/decades)-Impatience (in a hurry/do it yesterday)PassionEnergyRelentlessness (Grant-ian) EnthusiasmDriven (nuts!) (Brutal?) CompetitivenessEntrepreneurialPragmatic (R.F!A.)Scrounge (gets the logistics-infrastructure bit)Master of Politics (internal-external)Tactical GeniusPursuit of (Oceanic) Excellence!High EQ/Skillful in Attracting + Keeping Talent/MagneticProlific (ground up more pig brains)EgocentricSense of History-DestinyFuturistic-In the MomentMono-dimensional (Work-life balance? Ha!)Exceptionally IntelligentExceptionally Clever (methodological shortcuts/methodological genius)Luck

Utterback+

A pattern emphasized in the case studies in this book is the degree to which powerful competitors not only resist innovative threats, but actually resist all efforts to understand them, preferring to further their positions in older products. This results in a surge of productivity and performance that may take the old technology to unheard of heights. But in most cases this is a sign of impending death.

Jim Utterback, Mastering the Dynamics of Innovation

Apparently our society, not unlike the Greeks with their Delphic oracles, takes great comfort in believing that very talent seers removed from the hurly-burly world of reality can tell foretell coming events. Len Sayles/Columbia

The Perils of Conservatism/Industry Leadership

Good management was the most powerful reason [leading firms] failed to stay atop their industries. Precisely because these firms listened to their customers, invested aggressively in technologies that would provide their customers more and better products of the sort they wanted, and because they carefully studied market trends and systematically allocated investment capital to innovations that promised the best returns, they lost their positions of leadership.

Clayton Christensen, The Innovators Dilemma

Hard Stuff/Science: 20%

Soft Stuff/Politics: 80%

Hard Stuff/Analysis & planning: 25%

Soft Stuff/people &Politics & Passion & execution: 75%

Peters is the Michel Foucault of the management world: a scourge of the rationalist tradition and a celebrant of the creative necessity of chaos and craziness. Financial Times, 09.23.2003, review of Re-imagine! (You Should Be Bonkers in a Bonkers Time)

Toms source code: The eight iconic books which are the Wellsprings of my operating values and core assumptions

05.22.07

Fooled by Randomness: The Hidden Role of Chance in Life and the Markets, Nassim Nicholas Taleb The Black Swan: The Impact of the Highly Improbable, Nassim Nicholas Taleb

Expert Political Judgment: How Good Is It? How Can We know? Philip Tetlock

The Difference: How the Power of Diversity Creates Better Groups, Firms, Schools, and Societies, Scott Page

The Wisdom of Crowds, James Surowiecki

Full House: The Spread of Excellence from Plato to Darwin, Stephen Jay Gould

Judgment Under Uncertainty: Heuristics and Biases, Daniel Kahneman, Paul Slovic, and Amos Tversky

A Mind of Its Own: How Your Brain Distorts and Deceives, Cordelia Fine

Fooled by Randomness: The Hidden Role of Chance in Life and the Markets, Nassim Nicholas Taleb This book is about luck disguised and perceived as non-luck (that is, skills) and more generally randomness disguised and perceived as non-randomness. It manifests itself in the shape of the lucky fool, defined as a person who benefited from a disproportionate share of luck but attributed his success to some other, generally precise reason. The Black Swan: The Impact of the Highly Improbable, Nassim Nicholas Taleb

Expert Political Judgment: How Good Is It? How Can We know? Philip Tetlock A fox, the thinker who knows many little things, draws from an eclectic array of disciplines, and is better able to improvise in response to changing events, is more successful in predicting the future than the hedgehog, who knows one big thing, toils devotedly within one tradition, and imposes formulaic solutions on ill defined problems.

The Difference: How the Power of Diversity Creates Better Groups, Firms, Schools, and Societies, Scott Page . 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. Diversitytrumped ability.

The Wisdom of Crowds, James Surowiecki

Full House: The Spread of Excellence from Plato to Darwin, Stephen Jay Gould

Judgment Under Uncertainty: Heuristics and Biases, Daniel Kahneman, Paul Slovic, and Amos Tversky

A Mind of Its Own: How Your Brain Distorts and Deceives, Cordelia Fine Your brain has some shifty habits that leave the truth distorted and disguised. Your brain is vainglorious. Its emotional and immoral. It deludes you. It is pigheaded, secretive and weak willed. Oh, and its also a bigot.

The (Strange) Case of Peter Drucker & Michael Porter vs. The Non-linearists

HERBERT SIMON. (Administrative Behavior.) JAMES MARCH. KARL WEICK. (The Social Psychology of Organizing.) EUGENE WEBB. Henry MINTZBERG. (The Rise and Fall of Strategic Planning.) JAMES UTTERBACK. THOMAS KUHN. (The Structure of Scientific Revolutions.) CHARLES LINDBLOM. Daniel goleman. INNOVATION BIOGRAPHERS.* (*Transcontinental Railroad, Electrification, Radio, Television, Containerization, DNA, Computers, Military History, Etc.) MOST POLITICAL SCIENTISTS. SILICON VALLEY. Etc.

An Economic Interpretation of the Constitution of the United States Charles Beard (1913)

The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger Marc Levinson

Tube: The Invention of Television David & Marshall Fisher Empires of Light: Edison, Tesla, Westinghouse, and the Race to Electrify the World Jill Jonnes

The Soul of a New Machine Tracy Kidder

Rosalind Franklin: The Dark Lady of DNA Brenda Maddox

The Blitzkrieg Myth John Mosier

Fooled by Randomness: The Hidden Role of Chance in Life and the Markets

Nassim Nicholas Taleb

This book is about luck disguised and perceived as non-luck (that is, skills) and more generally randomness disguised and perceived as non-randomness. It manifests itself in the shape of the lucky fool, defined as a person who benefited from a disproportionate share of luck but attributed his success to some other, generally precise reason.

We underestimate the share of randomness in just about everything, a point that might not merit a bookexcept when it is the specialist who is the fool of all fools.

Mild success can be explainable by skills and labor. Wild success is attributable to variance.

Source: Fooled by Randomness: The Hidden Role of Chance in Life and the Markets Nassim Nicholas Taleb

[Eisenhower] chafed miserably as General MacArthurs aide in the Philippines, and in the end was promoted to lieutenant colonel only because General George C. Marshall remembered him, from years of inspecting dreary peacetime army bases, as the best bridge player in the U.S. Army. Ulysses S. Grant, Michael Korda

EXCELLENCE. INNOVATE. OR. DIE.

More than $$$$

#1 R&D spending, last 25 years?

BIG???

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

Scale?

Microsofts Struggle With Scale Headline, FT, 09.2005

Troubling Exits at Microsoft Cover Story, BW, 09.2005

Too Big to Move Fast? Headline, BW, 09.2005

[Dells] predicament may be intractable. Dell remained slavishly loyal to its core idea of ultra-efficient supply-chain management and direct sales to customers, even as rivals have stepped up their game. Instead of adapting, critics say, Dell cut costs in ways that compromised customer service and, possibly, product quality. BW, 0904

Theyre a one-trick pony. It was a great trick for over 10 years. tech exec/BW

Dells culture is not inspirational or aspirational. This is when they need to be imaginative, but [Dells] culture only wants to talk about execution. Geoffrey Moore

There are some organizations where people think theyre a hero if they invent a new thing. Being a hero at Dell means saving money. Kevin Rollins, CEO

Despite a decade of banking mergers, there is no evidence that big banks are any more efficient or profitable than their smaller rivals. Financial Times, 0329, on possible Barclays-ABN Amro merger (When it comes to asking the stock market whether bigger banks are better, the current answer is a resounding no. Citigroup analysis, 2006)

TP/Duh: The frugal times forced [BA] to focus on being profitable rather than big. Economist, 04.28.07

Not a single company that qualified as having made a sustained transformation ignited its leap with a big acquisition or merger. Moreover, comparison companiesthose that failed to make a leap or, if they did, failed to sustain itoften tried to make themselves great with a big acquisition or merger. They failed to grasp the simple truth that while you can buy your way to growth, you cannot buy your way to greatness. Jim Collins/Time/2004

When asked to name just one big merger that had lived up to expectations, Leon Cooperman, former cochairman of Goldman Sachs Investment Policy Committee, answered: Im sure there are success stories out there, but at this moment I draw a blank. Mark Sirower, The Synergy Trap

Almost every personal friend I have in the world works on Wall Street. You can buy and sell the same company six times and everybody makes money, but Im not sure were actually innovating. Our challenge is to take nanotechnology into the future, to do personalized medicine Jeff Immelt/2005

Schrempp is one of the last dinosaurs of Germany Inc. He represents a strategy of acquiring assets and building empires that just didnt work. Arndt Ellinghorst/ analyst/Dresdner Kleinwort Wasserstein

Conglomerates dont work.

James Surowiecki, The New Yorker

Did one of em ever turn to the other and say: Wow, I wonder what unimaginable new tools, otherwise not possible, will be brought forth for my daughter Alice, age 17, because of this deal?

Did one of em ever turn to the other and say: Wow I wonder what unimaginable new tools, otherwise not possible, will be quickly brought forth for our customers because of this deal?

These days, everybody wants to merge. Too often theyre just blindly gobbling up as many players as they can, in the false belief that bigger has to be better. It kind of makes you wonder if merger-mania isnt really ego-mania. Or something even more destructive. If you look at it objectively, most mergers do not revitalize companies. Rather, they provide short-term gains for a relatively small group of people, usually Wall Street bankers and lawyers. Lee Iacocca, Where Have All the Leaders Gone?

Spinoffs systematically perform better than IPOs track record, profits freed from the confines of the parent more entrepreneurial, more nimble

Jerry Knight/ Washington Post/ 08.05

Market Share, Anyone?

240 industries: Market- share leader is ROA leader 29% of the time

Profit /ROA leaders: aggressively weed out customers who generate low returns

Source: Donald V. Potter, Wall Street Journal

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

Peter Job, former CEO, Reuters

Theres A and then theres A.

Winning the Merger Game Is Possible

--Lots of deals--Little deals--Friendly deals--Stay close to core competence--Strategy is easy to understand

Source: The Mega-merger Mouse Trap/Wall Street Journal/02.17.2004 / David Harding & Sam Rovit, Bain & Co./re Comcast-Disney

Private Equity-financed Firm, Best *Case

*Focus! Focus! Focus!*In a [Big] hurry*CEO/Top team, skin in the game*CEO, 100% of time on the biz*Merit! Merit!*Motivated oversight

*Worst case: Rape & Pillage

Daimler. And Dumb. Both Start with d.

Marriage in heaven Daimler-Benz and Chrysler exchange vows, circa 1998 (Jrgen Schrempp)

the divorce on earth Daimler exec, circa 2007, on probable Cerberus private equity purchase of Chrysler from Daimler

Schrempp is one of the last dinosaurs of Germany Inc. He represents a strategy of acquiring assets and building empires that just didnt work. Arndt Ellinghorst, analyst, Dresdner Kleinwort Wasserstein

His bets went sour one by one. WSJ on Jrgen Schrempps conglomeration (05.15.2007)

Obviously, we overestimated the potential for synergies. Dieter Zetsche, CEO, Daimler

DaimlerChrysler/98-07: Duh, Duh, Duh, Duh and Duh

Manifold Synergies/NoSevere Scale limits/YesCulture clashes/YesRushmorean ego issues/YesCustomer acceptance /No

Mission impossible?

$36B/98

minus $675M/07

InnoTacs

We become who we hang out with 1

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

CUSTOMERS: Future-defining customers may account for only 2% to 3% of your total, but they represent a crucial window on the future.

Adrian Slywotzky, Mercer Consultants

Port- fol-io Think-ing

Portfolios/Weirdness IndexV.C.Micro-acquisitionsWee J.V.sButterfliesBehavior Leverssmall winsParallel Universe/sSkunkworksF.F.F.F.B.F.A.R.F.A.f.r.a.R.F.F.F.F.F.F.R.f.f.f.Prototype Mania

Portfolios/Weirdness IndexV.C.Micro-acquisitionsWee J.V.sButterfliesBehavior Leverssmall winsParallel Universe/sSkunkworksF.F.F.F. [Find a Fellow Freak Far away]B.F.A. [bias for action]R.F.A. [ready. Fire. aim,.]f.r.a. [fire. Ready. Aim.]R.F.F.F. [ready. Fire. Fire. Fire.]F.F.F.R. [fire. Fire. Fire. Ready.]f.f.f. [fail. Forward. Fast.]Prototype Mania

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

Why Do I love Freaks?

(1) Because when Anything Interesting happens it was a freak who did it. (Period.) (2) Freaks are fun. (Freaks are also a pain.) (Freaks are never boring.) (3) We need freaks. Especially in freaky times. (Hint: These are freaky times, for you & me & the CIA & the Army & Avon.) (4) A critical mass of freaks-in-our-midst automatically make us-who-are-not-so-freaky at least somewhat more freaky. (Which is a Good Thing in freaky timessee immediately above.) (5) Freaks are the only (ONLY) ones who succeedas in, make it into the history books. (6) Freaks keep us from falling into ruts. (If we listen to them.) (We seldom listen to them.) (Which is why most organizations are in ruts. Make that chasms.)

Get mad. Do something about it. Now.

Dreaming, necessary, or not?

TP, personal: dream = concrete, practical imaginings about the opposite of things that piss me off (TP advantages: low boiling point, long memory)

Michael Porter: Ive been thinking

TP: Im mad as hell, and Im not going to take it anymore

Pissed Off*

*Innovation is Initiated by Irritation. Re-imagining Results from Rage.

The Bottleneck Is at the Top of the Bottle

Where are you likely to find people with the least diversity of experience, the largest investment in the past, and the greatest reverence for industry dogma:

At the top!

Gary Hamel/Harvard Business Review

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

GSK: 7 CEDDs Centers of Excellence for Drug Discovery

Normal = o for 800

Semmelweis ListerECS SBAStokely MLKjr(TJP RHWjr)

CfaO*

*Chief freaks acquisition Officer

Youre either going to be a millionaire or going to jail.

Richard Bransons Headmaster* (* He did both.New Yorker)

Innovations Saviors-in-Waiting

Disgruntled CustomersOff-the-Scope CompetitorsRogue EmployeesFringe Suppliers

Wayne Burkan, Wide Angle Vision: Beat the Competition by Focusing on Fringe Competitors, Lost Customers, and Rogue Employees

Keep Austin Weird

futuremark

To grow, companies need to break out of a vicious cycle of competitive benchmarking and imitation. W. Chan Kim & Rene Mauborgne, Think for Yourself Stop Copying a Rival, Financial Times/2003

How do dominant companies lose their position? Two-thirds of the time, they pick the wrong competitor to worry about. Don Listwin, CEO, Openwave Systems/WSJ

Kodak . FujiGM . FordFord . GMIBM . Siemens, FujitsuSears . KmartXerox . Kodak, IBM

futuremark

Dont benchmark, futuremark!

Impetus: The future is already here; its just not evenly distributed William Gibson

We become who we hang out with 1A

The Jay Team *

*Allen Pucketts University of Weird

Tp caves (a little): Thinkers/ Thinkers Tank not Strategic Planners

To grow, companies need to break out of a vicious cycle of competitive benchmarking and imitation. W. Chan Kim & Rene Mauborgne, Think for Yourself Stop Copying a Rival, Financial Times

How do dominant companies lose their position? Two-thirds of the time, they pick the wrong competitor to worry about. Don Listwin, CEO, Openwave Systems/WSJ

Dont benchmark futuremark!

Impetus: The future is already here; its just not evenly distributed William Gibson

WhackyWikiWorldWow

Wikinomics: How Mass Collaboration Changes Everything Don Tapscott & Anthony Williams

The Billion-man Research Team: Companies offering work to online communities are reaping the benefits of crowdsourcing.

Headline, FT, 0110.07

WikinomicsWikiWorldWeapons of Mass collaborationCrowdSourcingsmart mobsLinuxHuman genome projectInnoCentiveYouTubeSecond LifeWikipediaMyspace

Rob McEwen/CEO/Goldcorp Inc./Red Lake gold

Source: Wikinomics: How Mass Collaboration Changes Everything, Don Tapscott & Anthony Williams

A New C-Level?C Ww O*

*Chief WikiWorld Officer

Theres a fundamental shift in power happening. Everywhere, people are getting together and, using the Internet, disrupting whatever activities theyre involved in. Pierre Omidyar, founder, eBay

PlannersvsSearchers

Where planners * raise high expectations but take no responsibility for meeting them, searchers prefer to work case-by-case, using trial and error to tailor solutions to individual problems, fully aware that most remedies must be homegrown. WSJ, 0822.06 (on malaria eradication, and hedge fund manager Lance Laifer)

[*Planners [WHO, World Bank, etc] see poverty as a technical engineering problem that their answers will solve. William Easterly]

All sorts of approaches need to be tried and we need feedback. Roger Bate

Find em!

Somewhere in your organization, groups of people are already doing things differently and better. To create lasting change, find these areas of positive deviance and fan the flames.

Richard Pascale & Jerry Sternin, Your Companys Secret Change Agents, HBR

Some people look for things that went wrong and try to fix them. I look for things that went right, and try to build off them. Bob Stone (Mr ReGo)

Stories Paint me a picture Story infrastructure Demos Quick prototypes Experiments Heroes Renegades Skunkworks Demo Funds V.C. G.M. Roster Portfolio Stones Rules JKCs Rules

Demos! Heroes! Stories!

Forward, march: The Sri Lanka Stratagem

Never doubt that a small group of committed people can change the world. Indeed it is the only thing that ever has. Margaret Mead

futuremark

Portfolio Thinking

G.M. (Brand Yous)V.C. (Wow Projects!)M.B.S.A. (Demos. Heroes. Stories.)

Find em!

Innovation Tool/Source # 1: Pissed Off Person/ People

What drove Trippe? A fury that the future was always being hijacked by people with smaller ideas by his first partners who did not want to expand airmail routes; by nations that protected flag carriers with subsidies; by the elitists who regarded flight, like luxury liners, as a privilege that could only be enjoyed by the few; by the cartel operators who rigged prices. The democratization he effected was as real as Henry Fords. Harold Evans on Juan Trippe, the PanAm boss who brought the B747 to life (WSJ/02.24.2005)

invite em!

In the end, management doesnt change culture. Management invites the workforce itself to change the culture.

Lou Gerstner

send em on a quest!

Organizing Genius / Warren Bennis and Patricia Ward Biederman

Groups become great only when everyone in them, leaders and members alike, is free to do his or her absolute best.

The best thing a leader can do for a Great Group is to allow its members to discover their greatness.

Leaderships Mt Everest/Mt Excellence

free to do his or her absolute best

allow its members to discover their greatness.

Where to look for Playmates:

F.F.F.F. (Find a Fellow Freak Faraway)

Playmate!*Playpen!Prototype!

*Can be Client, supplier as well as Insider

Demos! Heroes! Stories!

Women as innovation force!

Women are the majority market

Fara Warner/The Power of the Purse

Women dont buy brands. They join them.

EVEolution

94% of loans to women*

*Microlending; Banker to the poor; Grameen Bank; Muhammad Yunus; 2006 Nobel Peace Prize winner

Women: Principal Change Agents/ Health, family & Finance

Concoct a Parallel universe!

Venture fund: Gerstner/Amex, Dow/Marriott, Grove/Intel, Bedbury/Starbucks

SkunkWorks/ ParallelUniverse

the 1% solution

Source: Scott Bedbury (Others: 3M, Google, Shell, NAVFAC)

SkunkWorks/ Skunks (!!!)

[CEO A.G.] Lafley has shifted P&Gs focus on inventing all its own products to developing others inventions at least half the time. One successful example Mr. Clean Magic Eraser, based on a product found in an Osaka market. Fortune, 12.18.06

Build a School on top of a school (The Parallel Universe Strategy)

Parallel Universe China!!!!!!!

Strategic Thrust Overlay*

SyscoMicrosoft (Inet, Search)GE (6-Sigma, Workout, etc.)GSK (7 CEDDs)Apple (Mac)Hyundai (et al.) (Electronics, etc.)

*Different from Skunkworks

Multipliers:Broken Windows

Multipliers, science of/butterflies/Rat Psych 101:

Broken Windows/safe citySmall plates/empty shelves/remote parking lot/distant food court/slow elevatorGeologists/geophysicists Contiguous offices/Office layout-location powercasual gathering placesrenegade buildingsHang out factor/inno #1hero galleries/great artwelcoming reception area (Insta-smell culture)b.P.d. decals on glasses/12.31.06beyond escape: Bike at the door/Running shoes next to the bedetcetc

Speed/ Tempo/is-it

the FedEx Economy

headline/New York Times

Any3: Anything/ Anywhere/ Anytime

Power Tools For Power Strategies

UPS used to be a trucking company with technology. Now its a technology company with trucks. Forbes

5% F500 have CIO on Board: While some of the worlds most admired companiesTesco, Wal*Mart are transforming the business landscape by including technology experts on their boards, the vast majority are missing out on ways to boost productivity, competitiveness and shareholder value.

Source: Burson-Marsteller

Speed/ Tempo/o.o.d.a. loops

Messin with their minds: He who has the quickest O.O.D.A. Loops* wins!

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

Blitzkrieg is far more than lightning thrusts that most people think of when they hear the term; rather it was all about high operational tempo and the rapid exploitation of opportunity. Robert Coram, Boyd

Re-arrange the mind of the enemy T.E. Lawrence

Float like a butterfly, sting like a bee Ali

BOYD: The Fighter Pilot Who Changed the Art of War (Robert Coram)

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

do things.

We have a strategic plan. Its called doing things. Herb Kelleher

drill.

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

try things.

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

We ground up more pig brains!

SERIOUS PLAY

Culture of Prototyping

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

Think about It!?

Innovation = Reaction to the Prototype

Source: Michael Schrage

You cant 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

Learn not to be careful. Photographer Diane Arbus to her students (Careful = The sidelines, fromHarriet Rubin in The Princessa)

The key to a great painting is the nerve, after weeks of effort, to bet the painting on the next brush stroke, Master musician, San Francisco

Screw. things.Up.

FAIL, FAIL AGAIN. FAIL BETTER.

Samuel Beckett

Fail . Forward. Fast.

High Tech CEO, Pennsylvania

Fail faster. Succeed Sooner.

David Kelley/IDEO

Sams Secret #1!

Reward excellent failures. Punish mediocre successes.

Phil Daniels, Sydney exec

Read This!

Richard Farson & Ralph Keyes: Whoever Makes the Most Mistakes Wins: The Paradox of Innovation

try.Miss.try.

READY.FIRE!AIM.

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

S.A.V.

Paul Allaire: We are in a brawl with no rules.

TP: Theres [literally] only one possible answerScrew Around Vigorously!

RAFRFARFFFA RFFFA FFFFARAAAAAAAAAAA

IID DSS*INID DSS**

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

No try. No deal.

You miss 100% of the shots you never take.

Wayne Gretzky

Intelligent people can always come up with intelligent reasons to do nothing. Scott Simon

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

Focus.

Miss Anthony has one idea and she has no patience with anyone who has two. ECS*

*TP: Why SBA is on the coin?

Ready. Fire! Fire! Aim.

The Milken model, in a nutshell, is to stimulate research by drastically cutting the waiting time for grant money, to flood the field with fast cash, to fund therapy-driven ideas rather than basic science, to hold researchers he funds accountable for results, and to demand collaboration across disciplines and among institutions, private industry, and academia. Fortune/The Business, The Man Who Changed Medicine

The Benefits of FOCUSED EXCELLENCE

Shouldice/Hernia Repair: 30 min, 1% recurrence. Avg: 90 min, 10%-15% recurrence.

Source: Complications, Atul Gawande

Conscious measurement

Innovation Index: How many of your Top 5 Strategic Initiatives/Key Projects score 8 or higher [out of 10] on a Weird/ Profound/ Wow/Game- changer Scale?

personal

Step #1: Buy a Mirror!

The First step in a dramatic organizational change program is obviousdramatic personal change! RG

To change minds effectively, leaders make particular use of two tools: the stories that they tell and the lives that they lead. Howard Gardner, Changing Minds

Work on me first. Kerry Patterson, Joseph Grenny, Ron McMillan and Al Switzler/Crucial Conversations

How can a high-level leader like _____ be so out of touch with the truth about himself? Its more common than you would imagine. In fact, the higher up the ladder a leader climbs, the less accurate his self-assessment is likely to be. The problem is an acute lack of feedback [especially on people issues]. Daniel Goleman (et al.), The New Leaders

Inno64: Innovation Strategies & Tactics

Parallel universe /Exec Ed v res MBAEnd run regnant powers/JKCFind done deals-practicing mavericks/Stone-ReGoBell curves2016 in 2006Non-industry benchmarkingEverything = PortfolioV.C.s all!Hot language/Wow-Astonish me-Insanely great-immortal-Make something greatLead customers/PW-EmbraerLead suppliers /Top decile R&DWeird alliancesMottos/Paul Arden (Whatever You Think Think the Opposite)Hire freaks/Enough weird people?Weird Boards!!!

CEO track record of Innovation (nobody starts at 45!)System/GE-ImmeltStrategic thrust overlayCalendarBig Delta easier than SmallMBWA with freaks-weirdos/JKCMBWA/Boonies labsV.C.-formal/IntelAcquire weirdChildrens crusadeOld farts crusadeGo Global at any sizeStop listening to customers Talent!/Unusual sources-Hire innovators-V.C.sEschew giant mergers

Remember: scale economies max out earlyAssisted suicide! (Built to last = Chimera-snare-delusion)Burn your press clippingsForgetting strategyFire all strategic plannersTempo!Final product bears little relation to starting notionDesign! Design! Design! (culture, not program)All innovation: Pissed-off peopleGut feel rules!Focus groups suckWeird focus groups okayBe-Do philosophy

CelebrationsCulture-little as well as big Inno (everyone-an-innovator)Life = Wow ProjectsAcknowledge messiness-pursue serendipity (Blitzkrieg-Containers-Science-Jim Utterback)R.F.A.Culture of execution4/40: decentralization, execution, accountability, 615AMEVP (S.O.U.B.)/Systems-process un-designDiversity for diversitys sakeWomen-Women-Women/customers (they are the market, not a segment)-leadersBoomers-Geezers (all the money)

CRO (Chief Revenue Officer) culture/top-line obsessedCIO (Chief INNOVATION Officer)LaughterFacility-space configurationExperiments-prototypesReward excellent failures. Punish mediocre successes.Bizarrely high incentives (& penalties)We are what we eat/We are who we hang out with (E.g.: Staff-Consultants-Vendors-Out-sourcing Partners/#, Quality-Innovation Alliance Partners-Customers-Competitors/who we benchmark against -Strategic Initiatives -Product Portfolio/LineEx v. Leap-IS/IT Projects-HQ Location-Lunch Mates-Language-Board)

Pause: Case Study

Elizabeth Cady Stanton, Womens Rights/sufferage, relentlessness, and movements that rock the world

I have very serious objections to being called Henry. Why are the slaves nameless unless they take that of their master? Simply because they have no independent existence. They are mere chattels, with no civil or social rights. Even so with women. The custom of calling women Mrs. John This and Mrs. Tom That and colored men Sambo and Zip C___ is founded on the principal that white men are the lords of all. I cannot acknowledge this principle as just; therefore I cannot bear the name of another. Elizabeth Cady Stanton

Source: In Her Own Right: The Life of Elizabeth Cady Stanton, Elisabeth Griffith

ECS: She was defeated again and again and again, but she continued the struggle with passionate impatience.

Source: In Her Own Right: The Life of Elizabeth Cady Stanton, Elisabeth Griffith

72 years, 1 month, 5 days

She had survived her husband, outlived most of her enemies, and exhausted her allies. Her mind remained alert, her mood optimistic, and her manner combative.

Source: Self Sovereign 1889-1902, In Her Own Right: The Life of Elizabeth Cady Stanton, Elisabeth Griffith (50 years down, 25 to go)

Driven by anger!! (not focus groups)Great vision, no strategic planWhoops: conflicting vision/sExecution (& vision) (Dreamers with deadlines)OpportunisticInsane optimismFailure after failure; disappointment after disappointment (secret to staying power: Stay pissed off!!)Plan B rulesChanging cadresOpportunistic alliances (here today, gone tomorrow)The enemy of my enemy is my friendCreating events and groups to serve a momentary needWarring leaders (Freud-Jung)Petulance (human frailty amidst a Great Struggle)Agile re goal w/o sacrificing VisionGo underground for long stretchesPatience (72 years) & impatienceRelentless!!!!!!!!!!!!!!! (WSC: Success stems from the ability to go from failure without losing your enthusiasm)

Hustle (Seneca Falls, 48: 5 days)Fits & startsTraitors-desertersRadicals (goodMLKjr)Radicals (disruptiveStokely)ModeratesMentorsSchismsSetbacks (again & again & againincl lost ground) (2-9 = Great record)Get off on the politics (TP: Life is politics the rest is details.)Managing the goal down to get to the doable (but not losing sight of the main game in the process)Small winsExternalities (Civil War)Small Band of Sisters (

Elizabeth Cady Stanton(more or less) (circa 0331.2007)

Agility (Plan B)RelentlessResilientOptimistic (Unreasonably so)Pissed OffVisionaryTry It. Try it. Try it. Action > PlansVirusSmall WinsDemos-Heroes-StoriesWee Gestures of Decency-ThoughtfulnessPolitics >> Science (Get over it!)Think: R.O.I.R. (Networker)Sales Rules!Passion (incl. speaking skills)Women (Lead Local Change Agents)Women Leaders (Woman to Woman)

Success = 72.1.5 =

Elizabeth Cady Stanton (1815-1902), Lucretia Mott, Martha Wright, Mary Ann McClintock, Jane Hunt (07.13.1848/Seneca falls ny) +72 years, 1 month, 5 days (08.18.1920/nashville tn)

End Pause

CHANGE MANAGEMENT.

Toms Change Rules Cause. (Pissed off.) RELENTLESS!!!!!!!!!!!!!!!!!!!!!!!!!!!! Try it. (S.A.V.) (r.f.a.) (hustle.) project. Project. Project. Wow! (hot language.) fun. (growth opportunities.)Sky-high aspirations.Fail. Forward. Fast. SMALL WINS. MOMENTUM. INEVITABILITY. Quests. Demos. Heroes. Stories. STATISTICAL INDEPENDENCE. (DIVERSITY.) Boonies. (Parallel universe. Test stuff. Buy WeeCo) V.C.: Roster = portfolio. everything = portfolio.Roster = brand yous.PARTNER WITH WIERDOS. (everywhere.)Diversity @ top.Buy a mirror.FRUSTRATED GODFATHER. Ability. Wow. Insanely great. Sell! Sell! Sell! (master-appreciate politics) (r.o.i.r.)

EXCELLENCE. 4/40.

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

Decentralization is not a piece of paper. Its not me. Its either in your heart, or not.

Brian Joffe/BIDvest

If if feels painful and scarythats real delegation

Caspian Woods, small biz owner

The True Logic* of Decentralization:

6 divisions = 6 tries

6 divisions = 6 DIFFERENT leaders = 6 INDEPENDENT tries = Max probability of win

6 divisions = 6 very DIFFERENT leaders = 6 very INDEPENDENT tries = Max probability of far out/3-sigma win

*Driver: Law of Large #s

Best practice = ZERO Standard Deviation

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

The Earls & Dukes vs King John (The Magna Carta) The Continental Congress vs the Constitution Jefferson vs AdamsSloan vs FordGE vs All comers HP vs HP Peters vs HammerMintzberg vs Porter

Ex-e-cu-tion!

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

Execution is a systematic process of rigorously discussing hows and whats, tenaciously following through, and ensuring accountability.

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

Costco figured out the big, simple things and executed with total fanaticism. Charles Munger, Berkshire Hathaway

.0004*

*4/10,000

Never forget implementation , boys. In our work, its what I call the last 98 percent of the client puzzle. Al McDonald, former Managing Director, McKinsey & Co, to a project team that included TP

Recently I asked three corporate executives what decisions they had made in the last year that would not have been made were it not for their corporate plans. All had difficulty identifying one such decision. Since all of the plans are marked secret or confidential, I asked them how their competitors might benefit from possession of their plans. Each answered with embarrassment that their competitors would not benefit. Russell Ackoff (from Henry Mintzberg, The Rise and Fall of Strategic Planning)

Ac-count-a-bil-ity!

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

Monkeys cant live in midair! Bob Townsend

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)

Walter ReedSECDEF

6:15A.M.

But its only 2am!

Where are you going? But its only 2am. You see, you can live your life at 120 miles an hour, and thats pretty impressive. But its not good enough. Unless you live at 150 miles an hour, the world will pass you by, HRH Prince Alwaleed*

*1 day: 573 people met separately, 200 phone calls, 100 text messages, etc

Source: Prince Alwaleed, Inside the private world of the Middle Easts most powerful investor cover story, The Business, 0519.07

DECENTRALIZATION.EXECUTION.ACCOUTABILITY.6:15A.M. (2a.m.)

Excellence: The SE22:

ORIGINS OF SUSTAINABLE ENTREPRENEURSHIP

SE22/Origins of Sustainable Entrepreneurship

1. Genetically disposed to Innovations that upset apple carts (3M, Apple, FedEx, Virgin, BMW, Sony, Nike, Schwab, Starbucks, Oracle, Sun, Fox, Stanford University, MIT)2. Perpetually determined to outdo oneself, even to the detriment of todays $$$ winners (Apple, Cirque du Soleil, Nokia, FedEx)3. Treat History as the Enemy (GE)4. Love the Great Leap/Enjoy the Hunt (Apple, Oracle, Intel, Nokia, Sony)5. Use Strategic Thrust Overlays to Attack Monster Problems (Sysco, GSK, GE, Microsoft)6. Establish a Be on the COOL Team Ethos. (Most PSFs, Microsoft)7. Encourage Vigorous Dissent/Genetically Noisy (Intel, Apple, Microsoft, CitiGroup, PepsiCo)8. Culturally as well as organizationally Decentralized (GE, J&J, Omnicom)9. Multi-entrepreneurship/Many Independent-minded Stars (GE, PepsiCo)

HPs Big Duh!

Decentralize ($90B)Undo MatrixAccountability

Source: HP Says Goodbye To Drama/BW/09.05/re Mark Hurds first 5 months

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

GSK: 7 CEDDs Centers of Excellence for Drug Discovery

DePuySpine/J&J*

70/3game-changers!

*Still decentralized after all these years!


10. Keep decentralizingtireless in pursuit of wiping out Centralizing Tendencies (J&J, Virgin)11. Scour the world for Ingenious Alliance Partners especially exciting start-ups (Pfizer)12. Acquire for Innovation, not Market Share (Cisco, GE)13. Dont overdo pursuit of synergy (GE, J&J, Time Warner)14. Execution/Action Bias: Just do it dont obsess on how it fits the business model. (3M, J & J)15. Find and Encourage and Promote Strong-willed/ Hyper-smart/Independent people (GE, PepsiCo, Microsoft)16. Support Internal Entrepreneurs (3M, Microsoft)17. Ferret out Talent anywhere/No limits approach to retaining top talent (Virgin, GE, PepsiCo)


18. Unmistakable Results & Accountability focus from the get-go to the grave (GE, New York Yankees, PepsiCo)19. Up or Out (GE, McKinsey, big consultancies and law firms and ad agencies and movie studios in general)20. Competitive to a fault! (GE, New York Yankees, News Corp/Fox, PepsiCo)21. Bi-polar Top Team, with Unglued Innovator #1, powerful Control Freak #2 (Oracle, Virgin) (Watch out when #2 is missing: Enron)22. Masters of Loose-Tight/Hard-nosed about a very few Core Values, Open-minded about everything else (Virgin)

HOW THE COAST GUARD GETS IT RIGHT Headline, Time, 10.31.2005

*Autonomy*Flexibility*Perhaps the most important distinction of the Coast Guard is that it trusts itself

Itinerant. Potential. Machines.

TALENT POOL TO DIE FOR. Youthful. Insanely energetic. Value creativity. Risk taking is routine. Failing is normal if youre stretching. Want to make their bones in the revolution. Love the new technologies. Well rewarded. Dont plan to be around 10 years from now.

TALENT POOL PLUS. Seek out and work with worlds best as needed (its often needed). We aim to change the world, and we need gifted colleagueswho well may not be on our payroll.

BRASSY-BUT-GROUNDED-LEADERSHIP. Say I dont knowand then unleash the TALENT. Have a vision to be DRAMATICALLY DIFFERENTbut dont expect the co. to be around forever. Will scrap pet projects, and change course 180 degreesand take a big write-off in the process. NO REGRETS FROM SCREW-UPS WHOSE TIME HAS NOT-YET-COME. GREAT REGRETS AT TIME & $$$ WASTED ON ME TOO PRODUCTS AND PROJECTS.

BRASSY-BUT-GROUNDED-LEADERSHIP. (Cont.) Visionary leaders matched by leaders with shrewd business sense: HOW DO WE TURN A PROFIT ON THIS GORGEOUS IDEA? Appreciate market creation as much as or more than market share growth. ARE INSANELY AWARE THAT MARKET LEADERS ARE ALWAYS IN PRECARIOUS POSITIONS, AND THAT MARKET SHARE WILL NOT PROTECT US, IN TODAYS VOLATILE WORLD, FROM THE NEXT KILLER IDEA AND KILLER ENTREPRENEUR. (Gates. Ellison. Venter. McNealy. Walton. Case. Etc.)

ALLIANCE MANIACS. Dont assume that the best resides within. WORK WITH A SHIFTING ARRAY OF STATE-OF-THE-ART PARTNERS FROM ONE END OF THE SUPPLY CHAIN TO THE OTHER. Including vendors and consultants and who especially PIONEERING CUSTOMERS will pull us into the future.

TECHNOLOGY-NETWORK FANATICS. Run the whole-damn-company, and relations with all outsiders, on the Internet at Internet speed. Reluctant to work with those who dont share this (radical) vision.

Crazy Times Call for Crazy Organizations

Subtitle, The Tom Peters Seminar (1993)

Tom PetersAction Chronicles.EXCELLENCE. ALWAYS.

Think-Do.ACTION.0329.2007

The (necessary) war on linearity: One engineers (unusual) lifes work.

tom peters

Apparently our society, not unlike the Greeks with their Delphic oracles, takes great comfort in believing that very talented seers removed from the hurly-burly world of reality can tell foretell coming events. Len Sayles/Columbia (from Henry Mintzberg, The Rise and Fall of Strategic Planning)

Nothing is more dangerous in war than theoreticians.

Marshall Petain (John Mosier, The Blitzkrieg Myth, War as Pseudoscience: 1920-1939)

This book is about luck disguised and perceived as non-luck (that is, skills) and more generally randomness disguised and perceived as non-randomness. It manifests itself in the shape of the lucky fool, defined as a person who benefited from a disproportionate share of luck but attributed his success to some other, generally precise reason. Fooled by Randomness: The Hidden Role of Chance in Life and the Markets, by Nassim Nicholas Taleb

EXCELLE ALWAYS.

End Pause

EXCELLE ALWAYS.PART TWO.

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

Call this The Big DUH. You cant get turned on by something until there is SOMETHING TO GET TURNED ON BY. In Schrage-speak, the Reaction To The Prototype IS THE INNOVATION.

Tom-speak: YOU AINT DONE NOTHIN TIL YOUVE DONE SOMETHIN!SORRY I LOVE THIS. SERIOUS PLAY OR FUHGEDDABOUDIT!!!!!!!!!!!!!!!!

No bull: Im 57 and I believe that this is THE Truth. NO SHIT.

Slides at … tompeters

Documents

Transcript of Slides at … tompeters