Slides* at … tompeters *Also, “Long”
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Transcript of Slides* at … tompeters *Also, “Long”
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Tom Peters’
Re-Imagine!Leading Change,
Developing Talent, Driving Innovation,
Adding Value,Achieving Excellence
Associsation of Chief Executive OfficersAthens/09May2006
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Slides* at …
tompeters.com
*Also, “Long”
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Part #1: Introduction
EXCELLENCE.ALWAYS.
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EXCELLENCE.
BASICS.
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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 competitor’s 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.
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My (Les’s) Dinner with Henri
JUST WHAT IS IT YOU MAKE?
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P.P.E.E.R.R.E.
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People.Product.
Execution.Enthusiasm.Relentless.Re-invent.Excellence.
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CRO*
*Chief Revenue Officer
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EXCELLENCE. THE WORD.
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Synonyms
PurityTranscendence
VirtueEleganceMajesty
Antonyms
Mediocrity
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EXCELLENCE.
GAMECHANGER.
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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”
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What is In Search of Excellence all about:
People. Emotion. Engagement. Exuberance. Action-Execution. Empowerment. Independence. Initiative. Imagination. Great
Stories. Incredible Adventures. Trust. Caring. Fun. Joy.
Customer-centrism. Profit. Growth. “Brand You.” “Dramatic Differences.” Experiences that Make You “Gasp.” Excellence.
Always.
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ExIn*: 1982-2002/Forbes.com
DJIA: $10,000 yields $85,000 EI: $10,000 yields $140,050
*Excellence Index /Basket of 32 publicly traded stocks
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EXCELLENCE.
ALWAYS.
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“Why in the world did you go to Siberia?”
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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.
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Business* ** (*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
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Business: The Ultimate Creative
Endeavor.
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Business: The Ultimate Personal
Development-Growth
Experience.
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Business: The Ultimate
Transcendent Service
Opportunity.
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Part #2: Principal Argument
Re-Imagine!Leading Change,
Developing Talent, Driving Innovation,
Adding Value,Achieving Excellence
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Re-imagine! Not Your Father’s World I.
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THREE BILLION NEW CAPITALISTS
—Clyde Prestowitz
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Re-imagine!
Not Your Father’s World II.
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“Income Confers No
Immunity as Jobs Migrate”
—Headline/USA Today/02.2004
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“Deutsche Bank Moves Half of Its Back-office Jobs to
India”/ headline/FT/0327/500 of 900 Research/JPMorgan
Chase/30% back-office by 12.31.07
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Re-imagine!
Not Your Father’s World III.
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“A focus on cost-cutting and efficiency has helped many organizations weather the
downturn, but this approach will ultimately
render them obsolete. Only the constant pursuit of
innovation can ensure long-term
success.” —Daniel Muzyka, Dean, Sauder School of Business,
Univ of British Columbia (FT/09.17.04)
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“Get better” versus
“Get different”
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CRO*
*Chief Revenue Officer
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The General’s Story. (And Darwin’s)
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“If you don’t like change,
you’re going to like irrelevance even less.” —General Eric
Shinseki, Chief of Staff. U. S. Army
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“It is not the strongest of the
species that survives, nor the most intelligent, but the one most
responsive to change.” —Charles Darwin
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Everybody’s Story.
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“One Singaporean worker costs as much as …
3 … in Malaysia 8 … in Thailand 13 … in China 18 … in India.”
Source: The Straits Times/2003
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“One Singaporean worker costs as much as …
3 … in Malaysia
8 … in Thailand 13 … in China 18 … in India.”
Source: The Straits Times/2003
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“Thaksinomics” (after Thaksin Shinawatra, PM)/
“Bangkok Fashion City”:
“managed asset
reflation” (add to
brand value of Thai textiles by demonstrating flair and design excellence)
Source: The Straits Times/2004
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New ZealandThailand
SpainPortugalIreland
Singapore Taiwan
PhilippinesUAEChile
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Better By Design: A National Strategy
NZ = Design
Excellence
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1. Re-imagine Permanence: The Emperor
Has No Clothes!
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“Forbes100” from 1917 to 1987: 39 members of the Class of ’17 were
alive in ’87; 18 in ’87 F100; 18 F100 “survivors” underperformed the
market by 20%; just 2 (2%), GE &
Kodak, outperformed the market 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
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“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
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4/40
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De-cent-ral-iz-a-tion!
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Ex-e-cu-
tion!
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Ac-count-a-bil-ity!
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“GE has set a standard of candor.
… There is no puffery. … There isn’t an ounce of
denial in the place.” —
Kevin Sharer, CEO Amgen, on the “GE mystique” (Fortune)
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6:15A.M.
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2. Re-imagine:
Innovateor
Die!!
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Resist!
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“Not a single company that qualified as having made a sustained transformation ignited its leap with a big
acquisition or merger. Moreover, comparison companies—those that failed to make a leap or, if they did,
failed to sustain it—often 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
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Scale?
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“I don’t believe in
economies of scale. You don’t get better by being bigger. You get worse.” —
Dick Kovacevich/Wells Fargo/Forbes/08.04 (ROA: Wells, 1.7%; Citi, 1.5%; BofA, 1.3%;
J.P. Morgan Chase, 0.9%)
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Scale?
“Microsoft’s 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
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Different!*
*“Dramatic Difference” (DH), “Remarkable Point of view” (SG)
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“To grow, companies need to break out of a
vicious cycle of competitive
benchmarking and imitation.” —W. Chan Kim & Renée
Mauborgne, “Think for Yourself —Stop Copying a Rival,” Financial Times/2003
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“Value innovation is about making the competition
irrelevant by creating uncontested market space. We argue that
beating the competition within the confines of the existing industry is
not the way to create profitable growth.”
—Chan Kim & Renée Mauborgne (INSEAD), from Blue Ocean Strategy (The Times/London)
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Focus!
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Focus: “All Strategy Is Local: True competitive advantages
are harder to find and maintain
than people realize. The odds are best in
tightly drawn markets, not big,
sprawling ones” —Title/
Bruce Greenwald & Judd Kahn/HBR09.05
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“We will not, I repeat not,
pretend to be ‘all things to all people.’” —CEO, Investec (03.06)
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Easy!
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Innovation’s Saviors-in-Waiting
Disgruntled CustomersOff-the-Scope Competitors
Rogue EmployeesFringe Suppliers
Wayne Burkan, Wide Angle Vision: Beat the Competition by Focusing on Fringe Competitors, Lost Customers, and Rogue Employees
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We become who we spend
timewith!
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Measure “Strangeness”/Portfolio Quality
StaffConsultants
VendorsOut-sourcing Partners (#, Quality)
Innovation Alliance PartnersCustomers
Competitors (who we “benchmark” against)
Strategic Initiatives Product Portfolio (LineEx v. Leap)
IS/IT ProjectsHQ LocationLunch Mates
LanguageBoard
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Hard!
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“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
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BOLD!
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“Beware of the tyranny of making
Small Changes to Small
Things. Rather,
make Big Changes
to Big Things.”
—Roger Enrico, former Chairman, PepsiCo
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Five MYTHS About Changing Behavior
*Crisis is a powerful impetus for change*Change is motivated by fear*The facts will set us free
*Small, gradual changes are always easier to make and sustain*We can’t change because our brains become “hardwired” early in life
Source: Fast Company/05.2005
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“Reward excellent failures.
Punish mediocre
successes.”Phil Daniels, Sydney exec
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Speed/
Tempo!
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“We don’t sell
insurance anymore.
We sell speed.”
Peter Lewis, Progressive
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Action
!
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“Ninety percent of what we call
‘management’ consists of making
it difficult for people to get
things done.” – Peter Drucker
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“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
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“Execution is the job of
the business leader.” —Larry Bossidy & Ram
Charan/ Execution: The Discipline of Getting Things Done
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Measurable!
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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?
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Personal!
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Step #1: Buy a Mirror!
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“The First step in a ‘dramatic’
‘organizational change program’ is obvious—
dramatic personal change!” —RG
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3. Re-imagine Organizing I:
IS/IT as Disruptive Tool!
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We all live in
Dell-Wal*Mart-
eBay-Google World!
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“the FedEx Economy”
—headline/New York Times/10.08.05
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“Any3”: Anything/ Anywhere/ Anytime
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Power Tools for Power Solutions/
Strategies! —TP
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“Ebusiness is about rebuilding the
organization from the ground up. Most companies today
are not built to exploit the Internet. Their business processes, their approvals, their
hierarchies, the number of people they employ … all of that is wrong for running
an ebusiness.” —Ray Lane, Kleiner Perkins
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5% F500 have CIO on Board: “While
some of the world’s most admired companies—
Tesco, 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
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4. Re-imagine
Organizing II: The Age of
“Best-sourcing.”
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“Organizations will still be critically important in the
world, but as ‘organizers,’ not
‘employers’!” — Charles Handy
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Not “out sourcing”Not “off shoring”
Not “near shoring”Not “in sourcing”
but …
“Best Sourcing”
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“global innovation networks”
vs
“research in large monolithic companies”
Source: George Colony/Forrester Research
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5. Re-imagine Business’s
Fundamental Value Proposition: Fighting
“Inevitable Commoditization” via “The ‘Gamechanging
Solutions’ Imperative.”
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Up, Up, Up,
Up
the Value-added Ladder.
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$55B
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And the “M” Stands for … ?
Gerstner’s 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
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And …
MasterCard Advisors
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Huge: Customer Satisfaction versus Customer
Success
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The Value-added Ladder/Stuff ‘n’ Things
Goods Raw Materials
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The Value-added Ladder/Stuff & Transactions
ServicesGoods
Raw Materials
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The Value-added Ladder/Opportunity-seeking
Gamechanging Solutions
ServicesGoods
Raw Materials
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6. Re-imagine Organizing IV: The White-Collar Tsunami and the Professional Service Firm (“PSF”)
Imperative.
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“ ‘Disintermediation’ is overrated. Those who fear disintermediation should in fact be afraid of
irrelevance—disintermediation is just another way
of saying that … you’ve become
irrelevant to your customers.”
—John Battelle/Point/Advertising Age/07.05
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Answer: Professional Service Firm/PSF!
Department Head
to …
Managing
Partner, IS [HR, R&D, etc.] Inc.
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Answer:
PSF
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The “PSF35”: Thirty-Five
Professional Service Firm Marks of Excellence
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The PSF35: The Work & The Legacy
1. CRYSTAL CLEAR POINT OF VIEW (Every Practice Group: “If you can’t explain your position in eight words or less, you don’t have a position”—Seth Godin)2. DRAMATIC DIFFERENCE (“We are the only ones who do what we do”—Jerry Garcia)3. Stretch Is Routine (“Never bite off less than you can chew”—anon.)4. Eye-Appetite for Game-changer Projects (Excellence at Assembling “Best Team”—Fast) 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 Universe”—Steve 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”
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Point of View!
Point of Dramatic
Difference!
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“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”/AnonVSE-Spain)
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7. Re-imagine Enterprise as
Theater I: A World of Scintillating “Experiences.”
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“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
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“Club Med is more than just a ‘resort’; it’s a means of rediscovering oneself, of inventing an
entirely new ‘me.’ ”
Source: Jean-Marie Dru, Disruption
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“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 that’s not work or home. It’s the place our customers
come for refuge.”
Nancy Orsolini, District Manager
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The Value-added Ladder/Memorable Connection
Spellbinding Experiences
Gamechanging SolutionsServicesGoods
Raw Materials
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Beyond the “Transaction”/ “Satisfaction” Mentality
“Good hotel”/ “Happy guest”/ “Exceeded Expectations”
vs.
“Great Vacation”/ “Great Conference”/ “Operation Personal
Renewal”
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CXO*
*Chief eXperience Officer
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8. Re-imagine Enterprise as
Theater II: Embracing the “Dream
Business.”
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DREAM: “A dream is a complete moment in the life
of a client. Important experiences that tempt the client to commit substantial resources. The essence of
the desires of the consumer. The opportunity to help
clients become what they want to be.”
—Gian Luigi Longinotti-Buitoni
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The Value-added Ladder/Emotion
Dreams Come True
Spellbinding Experiences Gamechanging Solutions
ServicesGoods
Raw Materials
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Furniture vs. Dreams
“We do not sell ‘furniture’ at
Domain. We sell dreams. This is
accomplished by addressing the half-formed needs in our
customers’ heads. By uncovering these needs, we, in essence, fill in the blanks. We
convert ‘needs’ into ‘dreams.’ Sales are the
inevitable result.” — Judy George,
Domain Home Fashions
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IBM, MasterCard …
Dream Merchants
!
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CDM*
*Chief Dream Merchant
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9. Re-imagine the “Soul” of New Value: Design
Reigns!
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Radio City Music HallSeptember 2005
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Franchise Lost!
TP: “How many of you [600] really
crave a new Chevy?”
NYC/IIR/061205
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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
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“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
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Hypothesis: “Design” is the principle
“metaphor” for the encompassing Value-
added Imperative!
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CWO*
*Chief WOW Officer
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Up, Up, Up,
Up
the Value-added Ladder.
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CRO*
*Chief Revenue Officer
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10. Re-imagine the Customer I: Trends Worth Trillion$$$ …
Women Roar.
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“Women are the
majority market”
—Fara Warner/The Power of the Purse
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The Perfect Answer
Jill and Jack buy slacks in black…
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Read This Book …
EVEolution: The Eight
Truths of Marketing
to WomenFaith Popcorn & Lys Marigold
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“Women don’t buy
brands. They join them.”
EVEolution
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1. Men and women are different.2. Very different.3. VERY, VERY DIFFERENT.4. Women & Men have a-b-s-o-l-u-t-e-l-y nothing in common.5. Women buy lotsa stuff.
6. WOMEN BUY A-L-L THE STUFF.7. Women’s Market = Opportunity No. 1.8. Men are (STILL) in charge.9. MEN ARE … TOTALLY, HOPELESSLY CLUELESS ABOUT WOMEN.10. Women’s Market = Opportunity No. 1.
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10. Women’s Market =
Opportunity No. 1.
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Why?
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2005
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Good Thinking, Guys!
“Kodak Sharpens Digital Focus
On Its Best Customers:
Women”
—Page 1 Headline/WSJ/0705
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11. Re-imagine the Customer II: Trends
Worth Trillion$$$ …
Boomer Bonanza/
Godzilla Geezer.
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2000-2010 Stats
18-44: -1%
55+: +21%(55-64: +47%)
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44-65: “New Customer Majority” *
*45% larger than 18-43; 60% larger by 2010Source: Ageless Marketing, David Wolfe & Robert Snyder
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“The New Customer Majority is the only adult
market with realistic prospects for significant
sales growth in dozens of product lines for thousands of companies.” —David Wolfe & Robert Snyder,
Ageless Marketing
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12. Re-imagine Excellence I: The Talent Obsession.
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Brand =
Talent.
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“THE FUTURE BELONGS TO …
SMALL POPULATIONS … WHO BUILD EMPIRES OF THE MIND …
AND WHO IGNORE THE TEMPTATION OF—OR DO NOT HAVE THE OPTION OF—EXPLOITING NATURAL
RESOURCES.”
Source: Juan Enriquez/As the Future Catches You
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PARC’s Bob Taylor:
“Connoisseur
of Talent”
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Hire very good
people!
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“We believe companies can increase their market cap 50 percent in 3 years. Steve Macadam at Georgia-
Pacific changed 20 of his 40 box plant managers to put more talented, higher paid
managers in charge. He increased
profitability from $25 million to $80 million
in 2 years.” —Ed Michaels, War for Talent
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DD$21M
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A review of Jack and Suzy Welch’s Winning claims there are but two key differentiators that set GE “culture” apart from the herd:
First: Separating financial forecasting and performance measurement. Performance measurement based, as it usually is, on budgeting leads to an epidemic of gaming the system. GE’s performance measurement is divorced from budgeting—and instead reflects how you do relative to your past performance and relative to competitors’ performance; ie it’s about how you actually do in the context of what happened in the real world, not as compared to a gamed-abstract plan developed last year.
Second: Putting HR on a par with finance and marketing.
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Our Mission
To develop and manage talent;
to apply that talent,throughout the world,
for the benefit of clients;to do so in partnership;
to do so with profit.WPP
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13. Re-imagine Leadership for Totally
Screwed-Up Times: The
Passion Imperative.
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Create a Cause!
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“People want to be part of something larger
than themselves. They want to be part of
something they’re really proud of, that they’ll
fight for, sacrifice for , trust.” —Howard Schultz, Starbucks (IBD/09.05)
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“Management has a lot to do with answers. Leadership is a function of questions. And the
first question for a leader always
is: ‘Who do we intend to be?’ Not ‘What are we going to do?’
but ‘Who do we intend to be?’” —Max De Pree, Herman Miller
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Find ’em!
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“The” Secret: Jack didn’t have a
“vision”!
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Respect ’em!
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Amen!
“What creates trust, in the end, is the leader’s manifest
respect for the followers.”
— Jim O’Toole, Leading Change
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Make It a Grand
Adventure!
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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.”
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Yes!!!!!!!!!!!!!!!!!
“free to do his or her absolute best” …
“allow its members to discover their
greatness.”
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“The role of the Director is to create a
space where the actor or actress can become more than they’ve ever been before, more than
they’ve dreamed of being.” —Robert Altman, Oscar
acceptance
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“We are a ‘life
success’ company”
Dave Liniger, RE/MAX
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Trumpet an Exhilarating
Story!
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Best Story Wins!
“A key – perhaps the key – to leadership is
the effective communication
of a story.”—Howard Gardner/Leading Minds:
An Anatomy of Leadership
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Live Your
Story!
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“You must
be the
change you wish to see in the
world.”Gandhi
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MBWA**HS/25+
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You = Your calendar*
*Calendars NEVER lie!!
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Try It!
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Sam’s Secret #1!
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Insist on
Speed!
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“We don’t sell
insurance anymore.
We sell speed.”
Peter Lewis, Progressive
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Demand Action!
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“We have a ‘strategic’ plan. It’s
called ‘doing
things.’” — Herb
Kelleher
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Put Women
in Charge!
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“AS LEADERS, WOMEN
RULE: New Studies find that
female managers outshine their male counterparts in almost every measure”
Title, Special Report/BusinessWeek
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????????
6/44
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“To be a leader in consumer
products, it’s critical to have
leaders who represent the population we
serve.” —Steve Reinemund/PepsiCo
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Dispense Enthusiasm!
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“Nothing is so contagious as enthusiasm.”
—Samuel Taylor Coleridge
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“Most important,
he upped the energy level at Motorola.” —Fortune on Ed Zander/08.05
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Avoid … Moderation!
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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
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Kevin Roberts’ Credo
1. Ready. Fire! Aim.2. If it ain’t broke ... Break it!3. Hire crazies.4. Ask dumb questions.5. Pursue failure.6. Lead, follow ... or get out of the way!7. Spread confusion.8. Ditch your office.9. Read odd stuff.
10. Avoid moderation!
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Avoid … Moderation!
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Insanely Great Language!
“Insanely Great.”
—Steve Jobs
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Radically Thrilling Language!
“Radically Thrilling.”
—BMW Z4 (ad)
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CTO**Chief Thrills Officer
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Synonyms
PurityTranscendence
VirtueEleganceMajesty
Antonyms
Mediocrity
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Free the Lunatic Within!
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“You can’t behave in a calm, rational manner. You’ve got to be out there on
the lunatic fringe.” — Jack Welch
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EXCELLENCE.
ALWAYS.