Tom Peters’ Tom Peters’

EXCELLENCEXCELLENCE. ALWAYS.E. ALWAYS.

Fortune Small Business SummitFortune Small Business SummitAtlanta/21 October 2008Atlanta/21 October 2008

NOTENOTE:: To appreciateTo appreciate this presentation this presentation [and ensure [and ensure

that it is not a that it is not a messmess],], you need you need Microsoft fonts:Microsoft fonts:

“Showcard Gothic,”“Showcard Gothic,” “Ravie,”“Ravie,” “Chiller”“Chiller”

andand “Verdana”“Verdana”

““Insanely Insanely great”great”

““You do not merely want to You do not merely want to be the best of the best.be the best of the best. You want to be You want to be considered the considered the

only ones who do only ones who do what you dowhat you do.” .” —Jerry

Garcia

Built to Lastvs

Built Built to to ChangeChange//Rock Rock the the

WorldWorld

Slides at …Slides at …

tompeters.comtompeters.com

““I [will] not accept the I [will] not accept the explanation of a recession explanation of a recession negatively effecting the negatively effecting the

[new] business. [new] business. There are There are still still ppeoeopple travelinle travelingg. We . We jjust ust have to have to gget them to staet them to stayy in in our hotelour hotel.”.” —Horst Schulze, former president of Ritz-—Horst Schulze, former president of Ritz-Carlton, on his new luxury hotel chain, Capella, from Carlton, on his new luxury hotel chain, Capella, from PrestigePrestige (06.08) (06.08)

““R.I.P. Good R.I.P. Good Times.” “Treat Times.” “Treat

every dollar you every dollar you spend as if it were spend as if it were your last.”your last.” —Sequoia Capital, —Sequoia Capital,

presentation to entrepreneurs it backs, October 2008presentation to entrepreneurs it backs, October 2008

““We’re heading for tough We’re heading for tough times. I made the decision times. I made the decision

to go very deep, very to go very deep, very quickly so we won’t have to quickly so we won’t have to

do it again. It looks like do it again. It looks like we’re having a record we’re having a record

month, but I can’t stick my month, but I can’t stick my head in the sand.”head in the sand.” —Iggy Fanio, CEO, —Iggy Fanio, CEO, AdBrite (AdBrite (FTFT, 10.20, p1, “Optimism Fades as Silicon Valley Suffers , 10.20, p1, “Optimism Fades as Silicon Valley Suffers

Job Losses”)Job Losses”)

PreludePrelude

“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 Buy a very large one very large one and just waitand just wait.”.”

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

““Mr. Foster and his McKinsey Mr. Foster and his McKinsey colleagues collected detailed colleagues collected detailed

performance data stretching back performance data stretching back 4040 years for years for 1,0001,000 U.S. companies. U.S. companies. They

found that none of the long-term survivors managed to

outperform the market. Worse, the longer companies had been in the

database, the worse they did.” —Financial —Financial TimesTimes

Dick Kovacevich: You don’t get better by

being bigger. You get worse.”

““Data drawn from the real world Data drawn from the real world attest to a fact that is beyond attest to a fact that is beyond

our control:our control: Everything in existence tends to deteriorate.” —Norberto Odebrecht, —Norberto Odebrecht, Education Through WorkEducation Through Work

#4 Japan#4 Japan#2T USA#2T USA

#2T China#2T China

#4 Japan#4 Japan#3 USA#3 USA

#2 China#2 China

#1 #1 GermanyGermany

Reason!!!Reason!!!

MittelstandMittelstand

Goldmann Goldmann ProduktionsProduktions

(11/50%/$5M/”dip and coat,” expensive (11/50%/$5M/”dip and coat,” expensive pigments vs “through coloring,” fades Bekro pigments vs “through coloring,” fades Bekro

Chemie)Chemie)

Jim’s Mowing CanadaJim’s Mowing CanadaJim’s Mowing UKJim’s Mowing UKJim’s AntennasJim’s Antennas

Jim’s BookkeepingJim’s BookkeepingJim’s Building MaintenanceJim’s Building Maintenance

Jim’s Carpet CleaningJim’s Carpet CleaningJim’s Car CleaningJim’s Car Cleaning

Jim’s Computer ServicesJim’s Computer Services

Jim’s Dog WashJim’s Dog WashJim’s Driving SchoolJim’s Driving School

Jim’s FencingJim’s FencingJim’s FloorsJim’s Floors

Jim’s PaintingJim’s PaintingJim’s PavingJim’s Paving

Jim’s Pergolas [gazebos]Jim’s Pergolas [gazebos]Jim’s Pool CareJim’s Pool Care

Jim’s Pressure CleaningJim’s Pressure CleaningJim’s RoofingJim’s Roofing

Jim’s Security DoorsJim’s Security DoorsJim’s TreesJim’s Trees

Jim’s Window CleaningJim’s Window CleaningJim’s WindscreensJim’s Windscreens

Note: Download, free, Jim Penman’s book: What Will They Franchise Next? The Story of Jim’s Group

*Basement Systems Inc.*Basement Systems Inc.*Larry Janesky*Larry Janesky**Dry Basement ScienceDry Basement Science (115,000!)(115,000!)

*1990: $0; 2003: $13M; *1990: $0; 2003: $13M; 2007: 2007:

$62,000,000$62,000,000

The PresentThe Present

““Tom let me tell you the Tom let me tell you the definition of a good lending definition of a good lending

officer. After church on officer. After church on Sunday, on the way home Sunday, on the way home with his family, he takes a with his family, he takes a little detour to drive by the little detour to drive by the factory he just lent money factory he just lent money

to. Doesn’t go in or any such to. Doesn’t go in or any such thing, just drives by and thing, just drives by and

takes a look.”takes a look.”

MBWMBWAA

““We Have Met the Enemy …We Have Met the Enemy …

ThankThank you, you,

Howard … Howard …

InternalInternal organizational organizational excellenceexcellence = =

Deepest “Blue Deepest “Blue Ocean”Ocean”

19819822

Excellence1982: The Bedrock “Eight Basics”Excellence1982: The Bedrock “Eight Basics”

1. A Bias for 1. A Bias for ActionAction2. Close to the 2. Close to the CustomerCustomer3. 3. AutonomAutonomyy and and EntreEntreppreneurshireneurshipp4. Productivity Through 4. Productivity Through PeoPeopplele5. 5. Hands OnHands On, , Value-DrivenValue-Driven6. 6. Stick toStick to the Knitting the Knitting7. 7. SimSimpplele Form, Form, LeanLean Staff Staff8. Simultaneous 8. Simultaneous Loose-TightLoose-Tight Properties” Properties”

““Breakthrough” 82*Breakthrough” 82*

People! People! CustomersCustomers

! ! Action! Action! Values! Values!

**In Search of ExcellenceIn Search of Excellence

Yes: Dilution, otherYes: Dilution, other control and share-control and share- owning issues.owning issues.Yes: Scale-as-power.Yes: Scale-as-power.Yes: Market share.Yes: Market share.No: People.No: People.No: Product.No: Product.No: Value to customer.No: Value to customer.

Yes: People.Yes: People.Yes: Product.Yes: Product.Yes: Value to Yes: Value to customer.customer.No: Dilution, otherNo: Dilution, other control and share-control and share- owning issues.owning issues.No: Scale-as-power.No: Scale-as-power.No: Market share.No: Market share.

Thank you ,Thank you ,Herb, Hal, Herb, Hal,

Robert, Siberia Robert, Siberia and Peter …and Peter …

““You have to You have to treat your treat your

employees like employees like customers.”customers.” —Herb Kelleher, —Herb Kelleher, complete answer, upon being asked his “secrets to success”complete answer, upon being asked his “secrets to success”

Source: Joe Nocera, Source: Joe Nocera, NYTNYT, “Parting Words of an Airline Pioneer,” on the occasion , “Parting Words of an Airline Pioneer,” on the occasion of Herb Kelleher’s retirement after 37 years at Southwest Airlines (SWA’s pilots of Herb Kelleher’s retirement after 37 years at Southwest Airlines (SWA’s pilots

union took out a full-page ad in USA Today thanking HK for all he had done; union took out a full-page ad in USA Today thanking HK for all he had done; across theacross the

way in Dallas American Airlines’ pilots were picketing the Annual Meeting)way in Dallas American Airlines’ pilots were picketing the Annual Meeting)

The Customer The Customer Comes Second: Put Comes Second: Put Your People First Your People First

and Watch ’Em Kick and Watch ’Em Kick ButtButt

——Hal Rosenbluth and Diane McFerrin Peters (no relation—be delighted if she Hal Rosenbluth and Diane McFerrin Peters (no relation—be delighted if she was)was)

““The role of the Director is to The role of the Director is to create a space where the actors create a space where the actors and actresses canand actresses can become become more than they’ve ever more than they’ve ever been before, more than been before, more than

they’ve dreamed of they’ve dreamed of beingbeing.”.” —Robert Altman, Oscar acceptance speech—Robert Altman, Oscar acceptance speech

Why in Why in the the World did World did youyou go to go to SiberiaSiberia??

EnterpriseEnterprise* ** (*at its best):* ** (*at its best): An An emotionalemotional, , vitalvital, , innovativeinnovative, , jojoyyfulful, , creativecreative, , entreentreppreneurialreneurial endeavor endeavor that elicits maximum that elicits maximum

concerted humanconcerted human potential in the potential in the wholeheartedwholehearted serviceservice of others of others.****Employees, Customers, Suppliers, Communities, Owners, Temporary partners**Employees, Customers, Suppliers, Communities, Owners, Temporary partners

… … no less than no less than CathedralsCathedrals in which the full and in which the full and

awesome power of the awesome power of the Imagination and Spirit and Imagination and Spirit and native Entrepreneurial flairnative Entrepreneurial flair

of diverse individualsof diverse individuals is is unleashed in passionate unleashed in passionate pursuit of … Excellence.pursuit of … Excellence.

Thank you Ben Thank you Ben & Norm, Ike, & Norm, Ike,

Nelson & Nelson & Delaware/Woody …Delaware/Woody …

GiveGive good good tea! tea!

““Allied commands depend Allied commands depend on mutual confidence on mutual confidence [and this confidence] [and this confidence] is gained, above all is gained, above all

through the through the develodeveloppmentment of friendshiof friendshippss.”.”

——General D.D. Eisenhower, General D.D. Eisenhower, Armchair General Armchair General * (05.08)* (05.08)

*“Perhaps his most outstanding ability [at West Point] was*“Perhaps his most outstanding ability [at West Point] was the ease with which he made friends and earned the trust the ease with which he made friends and earned the trust of fellow cadets who came from widely varied backgrounds;of fellow cadets who came from widely varied backgrounds; it was a quality that would pay great dividends during his it was a quality that would pay great dividends during his

future coalition command.”future coalition command.”

““eighty eighty percent of percent of success is success is

showing up.” showing up.” ——Woody AllenWoody Allen

Thank you Ben Thank you Ben & Norm, Ike, Nelson , & Norm, Ike, Nelson ,

Delaware/WoodyDelaware/Woody and and Dave …Dave …

““The four most The four most important words in any important words in any

organizationorganization

are …are … ‘What do ‘What do you think?’you think?’ ” ”

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

““The West spent … The West spent … $$2.32.3 trilliontrillion

on foreign aid over the last five decades on foreign aid over the last five decades and still has and still has not not managed to get twelve-managed to get twelve-

cent medicines to children to prevent half of cent medicines to children to prevent half of all malaria deaths. The West spent $2.3 all malaria deaths. The West spent $2.3

trillion and still trillion and still notnot managed to get three managed to get three dollars to each new mother to prevent five dollars to each new mother to prevent five

million child deaths. …million child deaths. … But I and But I and many other like-minded many other like-minded

people keep trying, not to people keep trying, not to abandon aid to the poor, but abandon aid to the poor, but

to to makemake suresure it reachesit reaches themthem.”.”

L(+21) = L(-L(+21) = L(-21)21)

““The West spent … The West spent … $$2.32.3 trilliontrillion

on foreign aid over the last five decades on foreign aid over the last five decades and still has and still has not not managed to get twelve-managed to get twelve-

cent medicines to children to prevent half of cent medicines to children to prevent half of all malaria deaths. The West spent $2.3 all malaria deaths. The West spent $2.3

trillion and still trillion and still notnot managed to get three managed to get three dollars to each new mother to prevent five dollars to each new mother to prevent five

million child deaths. …million child deaths. … But I and But I and many other like-minded many other like-minded

people keep trying, not to people keep trying, not to abandon aid to the poor, but abandon aid to the poor, but

to to makemake suresure it reachesit reaches themthem.”.”

Leadership(21A.D.) = Leadership(21A.D.) = Leadership(21B.C.)Leadership(21B.C.)

1913: 32%*1913: 32%*1960: 26%1960: 26%1980: 22%1980: 22%2000: 27%2000: 27%2007: 26%2007: 26%Source: “The Future of American Power,” Source: “The Future of American Power,” Fareed Zakaria, Fareed Zakaria, Foreign AffairsForeign Affairs, vol 87, no. 3, vol 87, no. 3

*U.S. share of world output*U.S. share of world output

ThankThank you , Dick you , Dick (& Dan) …(& Dan) …

1/401/40

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

““We made mistakes, of course. Most of them were We made mistakes, of course. Most of them were omissions we didn’t think of when we initially wrote the omissions we didn’t think of when we initially wrote the software. software. We fixed them by doing it over and over, again We fixed them by doing it over and over, again and again.and again. We do the same today. While our competitors We do the same today. While our competitors are still sucking their thumbs trying to make the design are still sucking their thumbs trying to make the design

perfect, we’re already on prototype versionperfect, we’re already on prototype version ##55.. By the time our rivals areBy the time our rivals are

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

##1010.. It gets back to It gets back to planning versus actingplanning versus acting: : We act We act from day onefrom day one; ; others plan how others plan how toto planplan——for monthsfor months.”.” —Bloomberg by —Bloomberg by

BloombergBloomberg

““RewardReward excellent failures.

PunishPunish mediocre

successes.”Phil Daniels, Sydney exec

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

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

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

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

1/401/40

ThankThank you , you ,

Peter …Peter …

Nudge.Nudge.Sway.Sway.

K.I.S.S.K.I.S.S.*Keep It Simple, Stupid*Keep It Simple, Stupid

90K in U.S.A. 90K in U.S.A. ICUsICUs on any on any given day; given day; 178178 steps/day steps/day

in ICU. in ICU.

50%50% stays result stays result in “serious complication”in “serious complication”Source: Atul Gawande, “The Checklist” (Source: Atul Gawande, “The Checklist” (New YorkerNew Yorker, 1210.07), 1210.07)

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

11% to … 11% to … 0%0% Source: Atul Gawande, “The Checklist” (Source: Atul Gawande, “The Checklist” (New YorkerNew Yorker, 1210.07), 1210.07)

““Everything matters”Everything matters”

-80%-80%Source:Source: Nudge,Nudge, Richard Thaler and Cass Sunstein , Richard Thaler and Cass Sunstein ,

X X =XFX*=XFX*

**ExcellenceExcellence = Cross-functional Excellence = Cross-functional Excellence

The “XF-50”: 50 Ways to The “XF-50”: 50 Ways to Enhance Cross-Functional Enhance Cross-Functional Effectiveness and Deliver Effectiveness and Deliver

Speed, “Service Speed, “Service Excellence” and “Value-Excellence” and “Value-

added Customer added Customer ‘Solutions’”*‘Solutions’”*

*Entire “XF-50” List is an Appendix to the LONG version *Entire “XF-50” List is an Appendix to the LONG version of this presentation, posted at tompeters.comof this presentation, posted at tompeters.com

????????

% XF % XF lunches*lunches*

*Measure!*Measure!

Thank you , Thank you , Anthelme Anthelme

Brillat-Savarin Brillat-Savarin and Ludwig and Ludwig

FeuerbachFeuerbach ……***”You are what you eat”*”You are what you eat”

1.1/41.1/400

We We areare the the companycompany we keepwe keep

Measure “Strangeness”/Portfolio QualityMeasure “Strangeness”/Portfolio QualityStaffStaff

ConsultantsConsultantsVendorsVendors

Out-sourcing Partners Out-sourcing Partners (#, Quality)(#, Quality)Innovation Alliance PartnersInnovation Alliance Partners

CustomersCustomersCompetitors Competitors (who we “benchmark” against)(who we “benchmark” against)

Strategic Initiatives Strategic Initiatives Product Portfolio Product Portfolio (LineEx v. Leap)(LineEx v. Leap)

IS/IT ProjectsIS/IT ProjectsHQ LocationHQ LocationLunch MatesLunch Mates

LanguageLanguageBoardBoard

““[CEO A.G.] Lafley has shifted P&G’s [CEO A.G.] Lafley has shifted P&G’s focus on inventing all its own focus on inventing all its own

products to developing others’ products to developing others’

inventions inventions at least at least half the timehalf the time. One . One successful example Mr. Clean Magic successful example Mr. Clean Magic Eraser, based on a product found in Eraser, based on a product found in

an Osaka market.”an Osaka market.” Source: Source: FortuneFortune, 12.18.06, 12.18.06

““Diverse groups of problem solvers—groups of Diverse groups of problem solvers—groups of people with diverse tools—consistently people with diverse tools—consistently

outperformed groups of the best and the outperformed groups of the best and the brightest. If I formed two groups, one random brightest. If I formed two groups, one random (and therefore diverse) and one consisting of (and therefore diverse) and one consisting of the best individual performers, the first group the best individual performers, the first group

almost always did better. …almost always did better. …

DiversityDiversity trumped trumped abilityability.”.” —Scott Page, —Scott Page, The Difference: How The Difference: How

the Power of Diversity Creates Better Groups,the Power of Diversity Creates Better Groups, Firms, Schools, and Societies Diversity Firms, Schools, and Societies Diversity

The “Hang Out Axiom”:The “Hang Out Axiom”: At its core, At its core, evereveryy (!!!) (!!!)

relationship-partnership relationship-partnership decision (employee, decision (employee,

vendor, customer, etc)vendor, customer, etc) is a is a stratestrateggicic decision decision

about: about: “Innovate,“Innovate,

‘Yes’ or ‘Yes’ or ‘No’‘No’ ” ”

ThankThank you , Conrad you , Conrad

& Fred …& Fred …

4/404/40

Conrad Hilton, at a gala Conrad Hilton, at a gala celebrating his life,celebrating his life,

was asked, “What was the was asked, “What was the most important lesson most important lesson

you’ve learned in your long you’ve learned in your long and distinguished career?” and distinguished career?”

His immediate answer …His immediate answer …

Conrad Hilton, at a gala celebrating his life,Conrad Hilton, at a gala celebrating his life, was asked, “What was the most important lesson you’ve learned was asked, “What was the most important lesson you’ve learned

in your long and distinguished career?” in your long and distinguished career?”

His immediate answer: His immediate answer: ““remember remember to tuck the to tuck the

shower curtain shower curtain inside the inside the bathtubbathtub””

““Execution Execution isis strategy.”strategy.”

—Fred Malek—Fred Malek

““almost inhuman almost inhuman disinterestedness disinterestedness in … strategy”in … strategy” —Josiah —Josiah Bunting on Bunting on U.S. GrantU.S. Grant (from (from Ulysses S. Ulysses S.

GrantGrant))

““This [adolescent] incident [of getting from point A to point B] is notable This [adolescent] incident [of getting from point A to point B] is notable not only because it underlines Grant’s fearless horsemanship and his not only because it underlines Grant’s fearless horsemanship and his

determination, but also it is the first known example of a very important determination, but also it is the first known example of a very important

peculiarity of his characterpeculiarity of his character:: Grant had an Grant had an extreme, almost phobic extreme, almost phobic dislike of turning back dislike of turning back

and retracing his stepsand retracing his steps.. If he If he set out for somewhere, he would get there somehow, whatever the set out for somewhere, he would get there somehow, whatever the

difficulties that lay in his way. This idiosyncrasy would turn out to be one difficulties that lay in his way. This idiosyncrasy would turn out to be one the factors that made him such a formidable general. Grant would always, the factors that made him such a formidable general. Grant would always,

always press on—turning back was not an option for him.”always press on—turning back was not an option for him.”

—Michael Korda, Ulysses Grant

EXECUTION.EXECUTION.DECENTRALIZATIONDECENTRALIZATION

..ACCOUTABILITY.ACCOUTABILITY.

66:15A.M. :15A.M.

“‘Decentralization’ is not a piece of paper. It’s not me. It’s either in

your heart, or not.”

—Brian Joffe/BIDvest

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

MH: MH: 80%80% (salesfolk)(salesfolk)

SECDEF Bob Gates:SECDEF Bob Gates: Walter Reed/Army Walter Reed/Army Sec’y; Nucs/USAF Sec’y; Nucs/USAF

Sec’y & COSSec’y & COS

Response to “most important Response to “most important contribution”:contribution”: “I focused this “I focused this

discipline on People and Power;discipline on People and Power; on Values, Structure, and on Values, Structure, and Constitution; and Constitution; and above all,above all,

on reson respponsibilitiesonsibilities—that is, —that is, focused the Discipline of focused the Discipline of

Management on management asManagement on management as a truly liberal art.”a truly liberal art.” (18 January 1999)(18 January 1999)

ThankThank you , 7-11… you , 7-11…

TP: TP: “How to flush

$500,000 down

the toilet in one easy

lesson!!”

< CAPEX< CAPEX> People!> People!

Our MissionTo develop and manage To develop and manage

talent;talent;to apply that talent,to apply that talent,

throughout the world, throughout the world, for the benefit of clients;for the benefit of clients;to do so in partnership; to do so in partnership;

to do so with profit.to do so with profit.WPP

Brand Brand = =

Talent.Talent.

#1/10#1/1000

““Best Companies toBest Companies to Work for” Work for”//20052005

WegmansWegmans

#1#1 cause of cause ofDis-satisfaction?Dis-satisfaction?

2/year 2/year = =

legacy.legacy.

The Dream ManagerThe Dream Manager —Matthew —Matthew KellyKelly

“An organization can only become the-best-version-of-“An organization can only become the-best-version-of-itself to the extent that the people who drive that itself to the extent that the people who drive that

organization are striving to become better-versions-of-organization are striving to become better-versions-of-themselves.” “A company’s purpose is to become the-themselves.” “A company’s purpose is to become the-

best-version-of-itself. The question is: What is an best-version-of-itself. The question is: What is an employee’s purpose? Most would say, ‘to help the employee’s purpose? Most would say, ‘to help the

company achieve its purpose’—but they would be wrong. company achieve its purpose’—but they would be wrong. That is certainly part of the employee’s role, but an That is certainly part of the employee’s role, but an employee’s primary purpose is to become the-best-employee’s primary purpose is to become the-best-version-of-himself or –herself. … When a company version-of-himself or –herself. … When a company

forgets that it exists to serve customers, it quickly goes forgets that it exists to serve customers, it quickly goes out of business.out of business. Our employees are our Our employees are our

first customers, and our most first customers, and our most important customers.”important customers.”

““Leaders Leaders

‘‘SERVESERVE’’ people. people.

Period.”Period.” —inspired by Robert Greenleaf

Thank you ,Thank you ,Marshall et Marshall et

al. …al. …

““To develop others, To develop others, start with yourself.”start with yourself.”

—Marshall Goldsmith—Marshall Goldsmith

““Being aware of Being aware of yourself and how you yourself and how you

affect everyone around affect everyone around you is what you is what

distinguishes a superior distinguishes a superior leader.”leader.” —Edie Seashore —Edie Seashore

((Strategy + BusinessStrategy + Business #45) #45)

““How can a high-level How can a high-level leader like _____ be so out leader like _____ be so out

of touch with the truth of touch with the truth about himself? It’s more about himself? It’s more common than you would common than you would

imagine. In fact, the imagine. In fact, the higher up the ladder a higher up the ladder a leader climbs, the less leader climbs, the less

accurate his self-accurate his self-assessment is likely to assessment is likely to be. be. The The pproblem is an roblem is an acute lack of feedbackacute lack of feedback [especially on people [especially on people

issues].”issues].” —Daniel Goleman (et al.), —Daniel Goleman (et al.), The New LeadersThe New Leaders

Habit #1/Winning Too Much:Habit #1/Winning Too Much: “ “WinninWinningg too much is easil too much is easilyy the the most common behavioral most common behavioral pproblem I observe in successful roblem I observe in successful ppeoeopplele.. [My italics.][My italics.] There’s a fine line between winning when it There’s a fine line between winning when it counts and when no one’s counting. … counts and when no one’s counting. … Winning too Winning too much underlies nearly every other behavioral much underlies nearly every other behavioral problemproblem.” “If we argue too much, it’s because we want .” “If we argue too much, it’s because we want our view to prevail over everyone else (i.e. it’s all about our view to prevail over everyone else (i.e. it’s all about winning).” “If we’re guilty of putting down other people, It’s winning).” “If we’re guilty of putting down other people, It’s our stealthy way of positioning them beneath us (again, our stealthy way of positioning them beneath us (again, winning).” “If we ignore people, again it’s about winning—by winning).” “If we ignore people, again it’s about winning—by making them fade away.”making them fade away.”

Habit #2/Adding Too Much Value:Habit #2/Adding Too Much Value: “Good idea, but …” “The “Good idea, but …” “The problem is you may have improved the content by 5%, but problem is you may have improved the content by 5%, but you’ve reduced my commitment to executing it by 50%, you’ve reduced my commitment to executing it by 50%, because you’ve taken away my ownership of the idea.”because you’ve taken away my ownership of the idea.”Habit #3: Passing JudgmentHabit #3: Passing JudgmentHabit #4: Making Destructive CommentsHabit #4: Making Destructive CommentsEtc.Etc.

Source:Source: Marshall GoldsmithMarshall Goldsmith, , What Got You Here Won’t Get You There: How What Got You Here Won’t Get You There: How Successful People Become Even More Successful.Successful People Become Even More Successful. (“The Twenty Habits That (“The Twenty Habits That Hold You Back From the Top”)Hold You Back From the Top”)

1818””

““You must You must bebe the change you the change you

wish to see in the wish to see in the world.”world.”

Gandhi

You = Your You = Your calendarcalendar***Calendars *Calendars nevernever lielie

““The The oneone thinthing you g you need to know about need to know about sustained individual sustained individual

success: Discover what success: Discover what you don’t like doing and you don’t like doing and

stopstop doing it.”doing it.”

—Marcus Buckingham, The One Thing You Need to Know

Relationships (of all varieties): THERE THERE ONCE WAS A TIME WHEN ONCE WAS A TIME WHEN A A THREETHREE--MINUTEMINUTE PHONEPHONE

CALLCALL WOULD HAVE WOULD HAVE AVOIDED SETTING OFF AVOIDED SETTING OFF

THE DOWNWARD SPIRAL THE DOWNWARD SPIRAL THAT RESULTED IN A THAT RESULTED IN A COMPLETE RUPTURE.COMPLETE RUPTURE.

THE PROBLEM IS THE PROBLEM IS RARELY/NEVER THE RARELY/NEVER THE

PROBLEM. THE PROBLEM. THE RESPONSE TO THE RESPONSE TO THE

PROBLEM INVARIABLY PROBLEM INVARIABLY ENDS UP BEING THE ENDS UP BEING THE REAL PROBLEMREAL PROBLEM.* **

*Watergate, M Stewart, BR**And: PERCEPTION IS ALL THERE IS!PERCEPTION IS ALL THERE IS!

““I regard I regard aappoloologgizinizing as the g as the most magical, healing, most magical, healing,

restorative gesture human restorative gesture human beings can make. It is the beings can make. It is the

centerpiece of my work with centerpiece of my work with executives who want to get executives who want to get better.”better.” —Marshall Goldsmith—Marshall Goldsmith, What Got You Here , What Got You Here Won’t Get You There: How Successful People Become Even Won’t Get You There: How Successful People Become Even

More Successful More Successful

ThankThank you, you,

Heather …Heather …

““Forget Forget ChinaChina, , IndiaIndia and the and the

InternetInternet: Economic : Economic Growth Is Driven Growth Is Driven

by by WomenWomen.”.” —Headline, Economist, April 15, 2006, Leader, page 14

““Women Women areare thethe

majority majority market”market”

—Fara Warner/—Fara Warner/The Power of the PurseThe Power of the Purse

““The The most most significant variablesignificant variable inin everyevery sales situation is sales situation is thethe gendergender of the buyer, of the buyer, and more importantly, how and more importantly, how

the salesperson the salesperson communicates to the communicates to the

buyer’s gender.”buyer’s gender.” —Jeffery Tobias Halter, Selling to Men, Selling to Women

The Perfect AnswerJill and Jack buy

slacks in black…

Cases! Cases! Cases!Cases! Cases! Cases!McDonald’sMcDonald’s (“mom-centered” to “majority consumer”;

not via kids)

Home DepotHome Depot (“Do it [everything!] Herself”)

P&GP&G (more than “house cleaner”)

DeBeersDeBeers (“right-hand rings”/$4B)

AXA FinancialAXA FinancialKodakKodak (women = “emotional centers of the household”)

NikeNike (> jock endorsements; new def sports; majority consumer)

AvonAvonBratzBratz (young girls want “friends,” not a blond stereotype)

Source: Fara Warner/Fara Warner/The Power of the PurseThe Power of the Purse

““Goldman Sachs in Tokyo has Goldman Sachs in Tokyo has developed an index of 115 developed an index of 115

companies poised to benefit companies poised to benefit from women’s increased from women’s increased

purchasing power; purchasing power; over the past over the past decade the value of shares in decade the value of shares in Goldman’s basket has risen by Goldman’s basket has risen by

96%, against the Tokyo 96%, against the Tokyo stockmarket’s rise stockmarket’s rise

of 13%of 13%.”.” —Economist, April 15

““AS AS LEADERS, LEADERS, WOMEN WOMEN

RULERULE:: New Studies find that female managers outshine their male

counterparts in almost every measure”

TITLE/ Special Report/ TITLE/ Special Report/ BusinessWeekBusinessWeek

10.610.6

““The growth and The growth and success of women-success of women-

owned businesses is owned businesses is one of the most one of the most

profound changes profound changes takingtaking place in the place in the

business worldbusiness world today.”today.” —Margaret Heffernan, How She Does It

10 UNASSAILABLE REASONS WOMEN RULE10 UNASSAILABLE REASONS WOMEN RULEWomenWomen make [all] the financial decisions.WomenWomen control [all] the wealth.WomenWomen [substantially] outlive men.WomenWomen start most of the new businesses.Women’sWomen’s work force participation rates have soared worldwide.WomenWomen are closing in on “same pay for same job.”WomenWomen are penetrating senior ranks rapidly [even if the pace is slow for the corner office per se].Women’sWomen’s leadership strengths are exceptionally well aligned with new organizational effectiveness imperatives.WomenWomen are better salespersons than men.WomenWomen buy [almost] everything—commercial as well as consumer goods.

So what exactly is the point of So what exactly is the point of menmen??

““One thing is certain: Women’s rise to power, which is One thing is certain: Women’s rise to power, which is linked to the increase in wealth per capita, is happening linked to the increase in wealth per capita, is happening in all domains and at all levels of society. Women are no in all domains and at all levels of society. Women are no

longer content to provide efficient labor or to be longer content to provide efficient labor or to be consumers with rising budgets and more autonomy to consumers with rising budgets and more autonomy to spend. … This is just the beginning. The phenomenon spend. … This is just the beginning. The phenomenon

will only grow as girls prove to be more successful than will only grow as girls prove to be more successful than

boys in the school system.boys in the school system. For a number For a number of observers, we have of observers, we have

already entered the age of already entered the age of ‘womenomics,’ the economy ‘womenomics,’ the economy

as thought out and as thought out and practiced by a womanpracticed by a woman.”.” —Aude

Zieseniss de Thuin, Financial Times, 10.03.2006

Thank you,Thank you,Bill …Bill …

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!““People turning 50 People turning 50 today have today have more more

thanthan halfhalf of of their adult life their adult life

ahead of them.”ahead of them.” —Bill Novelli, 50+: Igniting a Revolution to Reinvent America

7/17/133

2000-2010 Stats

18-44: 18-44: -1%-1%55+: 55+: ++2121%%(55-64: (55-64: ++4747%%))

44-65: “New “New Customer Customer Majority”Majority” *

*45% larger than 18-43; 60% larger by 2010Source: Ageless Marketing, David Wolfe & Robert Snyder

““Baby-boomer Baby-boomer WomenWomen: The : The Sweetest of Sweetest of

Sweet Spots for Sweet Spots for Marketers”Marketers” —David Wolfe and

Robert Snyder, Ageless Marketing

We are the We are the Aussies & Kiwis &Aussies & Kiwis & Americans & CanadiansAmericans & Canadians. . We are the We are the Western EuropeansWestern Europeans & & JapaneseJapanese. We are . We are

the the fastest growingfastest growing, the , the biggestbiggest, the , the wealthiestwealthiest, the , the boldestboldest, the most (yes) , the most (yes) ambitiouambitious, the most s, the most

experimental & exploratoryexperimental & exploratory, the most , the most differentdifferent, the , the most most indulgentindulgent, the most , the most difficult &difficult & demandingdemanding, the , the

most most service & experience obsessedservice & experience obsessed, the most , the most vigorousvigorous, (the , (the leastleast vigorous,) the most vigorous,) the most health health

consciousconscious, the most , the most femalefemale, the most profoundly , the most profoundly important commercial market in the history of the important commercial market in the history of the

world—andworld—and we will be the we will be the Center of Center of yyour universe our universe for the next twentfor the next twentyy-five -five

yyearsears. We have arrived!. We have arrived!

““You do not merely want to You do not merely want to be the best of the best.be the best of the best. You want to be You want to be considered the considered the

only ones who do only ones who do what you dowhat you do.” .” —Jerry

Garcia

ThankThank you, you,

Singapore Singapore and Steve …and Steve …

2-cent 2-cent candycandy

<TG<TGWWvs.vs.

>TG>TGRR[Things Gone [Things Gone WRONGWRONG/Things Gone /Things Gone RIGHTRIGHT]]

““Experiences Experiences are as distinct are as distinct

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

Stage

Experience: “Rebel Lifestyle!”

“What we sell is the “What we sell is the ability for a 43-year-old ability for a 43-year-old accountant to dress in accountant to dress in

black leather, ride black leather, ride through small towns and through small towns and

have people be afraidhave people be afraid of him.” of him.”

HarleyHarley exec, quoted in Results-Based Leadership

““You You knowknow a a designdesign is is goodgood

whenwhen you you wantwant to to licklick it.” it.” —Steve Jobs—Steve Jobs

Source: Source: Design: Intelligence Made VisibleDesign: Intelligence Made Visible,, Stephen Bayley & Terence ConranStephen Bayley & Terence Conran

Hypothesis:Hypothesis: DESIGNDESIGN is is the pthe princirincippalal

differencedifference between between lovelove

and and hate!*hate!**Not “like” and “dislike”*Not “like” and “dislike”

ThankThank you, Lou … you, Lou …

““M” = M” = $0$0

IBIBMM: : $55B*$55B*

*Also HP-EDS*Also HP-EDS

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 ServicesIBM Global Services* (*Integrated Systems

Services Corp.): $$55B55B

““THE GIANT STALKING BIG OIL: THE GIANT STALKING BIG OIL:

How How SchlumbergerSchlumberger Is Rewriting the Rules of the Is Rewriting the Rules of the

Energy Game.”:Energy Game.”: “IPM [Integrated “IPM [Integrated Project Management] strays from Project Management] strays from [Schlumberger’s] traditional role [Schlumberger’s] traditional role as a service provider and moves as a service provider and moves

deeper into areas once dominated deeper into areas once dominated by the majors.”by the majors.”

Source: Source: BusinessWeekBusinessWeek cover story, January 2008 cover story, January 2008

““Big Brown’s New Bag: UPS Big Brown’s New Bag: UPS Aims to Be the Traffic Aims to Be the Traffic

Manager for Corporate Manager for Corporate AmericaAmerica”” —Headline/—Headline/BWBW

““UPS wants to take over the UPS wants to take over the sweet spot in the endless sweet spot in the endless loop of goods, information loop of goods, information

and capital that all the and capital that all the packages packages [it moves][it moves] represent represent.”.” ——

ecompany.com ecompany.com (E.g., (E.g., UPS LogisticsUPS Logistics manages the logistics of 4.5M Ford vehicles, manages the logistics of 4.5M Ford vehicles,

from 21 mfg. sites to 6,000 NA dealers) from 21 mfg. sites to 6,000 NA dealers)

GE Enterprise SolutionsGE Enterprise Solutions** GE Enterprise Solutions delivers high-impact, GE Enterprise Solutions delivers high-impact, integrated solutions that improve customers’ integrated solutions that improve customers’

productivity and profitability. Enterprise Solutions productivity and profitability. Enterprise Solutions helps customers compete and win in a changing global helps customers compete and win in a changing global

environment by combining the power of GE’s environment by combining the power of GE’s intelligent technologies with its multi-industry intelligent technologies with its multi-industry experience and expertise. Enterprise Solutions experience and expertise. Enterprise Solutions

comprises high-tech, high-growth businesses including comprises high-tech, high-growth businesses including Sensing & Inspection Technologies, Security, GE Fanuc Sensing & Inspection Technologies, Security, GE Fanuc Intelligent Platforms, and Digital Energy. The business Intelligent Platforms, and Digital Energy. The business has 17,000 customer-focused associates in more than has 17,000 customer-focused associates in more than

60 countries around the world.60 countries around the world.

*from GE.com*from GE.com

I. LAN Installation Co. (3%)

II. Geek Squad. (30%.)

III. Acquired by Best Buy.IV. Flagship of Best BuyFlagship of Best Buy Wholesale “Solutions” Wholesale “Solutions” Strategy Makeover. Strategy Makeover.

HuHuggee:: Customer SatisfactionSatisfaction versus

Customer

SuccessSuccess

Department Head to …

ManaginManaging g

PartnerPartner, , ISIS [HR, R&D, etc.] IncInc..

Answer:

PSFPSF

Are you the …

““PrinciPrincippal al EnEnggineine of of

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

Thank you, Thank you, Eleanor, Kevin, Eleanor, Kevin,

Sheik Mohammad Sheik Mohammad and Lord Horatio and Lord Horatio

… …

““Do one Do one thing every thing every

day that day that scares you.”scares you.”

—Eleanor Roosevelt

Kevin Roberts’ CredoKevin Roberts’ Credo

11. Ready. Fire! Aim.. Ready. Fire! Aim.2. If it ain’t broke ... Break it!2. If it ain’t broke ... Break it!3. Hire crazies.3. Hire crazies.4. Ask dumb questions.4. Ask dumb questions.5. Pursue failure.5. Pursue failure.6. Lead, follow ... or get out of the way!6. Lead, follow ... or get out of the way!7. Spread confusion.7. Spread confusion.8. Ditch your office.8. Ditch your office.9. Read odd stuff.9. Read odd stuff.

10. Avoid moderationAvoid moderation!!

Does Does youryour project portfolioproject portfolio

“ “havehave a dubai”?a dubai”?

On NELSON: “[other] “[other] admirals more admirals more frightened of frightened of losing than losing than

anxious to win”anxious to win”

ThankThank you , Mike you , Mike

& Bill …& Bill …

The greatest dangerThe greatest dangerfor most of usfor most of us

is not that our aim isis not that our aim istoo hightoo high

and we miss it,and we miss it,but that it isbut that it is

too lowtoo lowand we reach it.and we reach it.

Michelangelo

"Life is not a journey to the grave with the intention of arriving safely in one pretty

and well preserved piece, but to skid across the line

broadside, thoroughly used up, worn out, leaking oil,

shouting ‘GERONIMO!’GERONIMO!’ ” —Bill McKenna, professional motorcycle racer

(Cycle magazine 02.1982)

Ger-Ger-onon-i--i-momo!!

Thank you ,Thank you ,Nassim Nicholas Nassim Nicholas

Taleb …Taleb …

The Black Swan The Black Swan 44: Tactical 44: Tactical

Rules for Rules for Survival (and Survival (and success) in success) in

Looney timesLooney times

Black Swan Tactical RulesBlack Swan Tactical Rules1. K.I.S.S.1. K.I.S.S.2. Hammer on the basics.2. Hammer on the basics.3. Focus on us, not the competition.3. Focus on us, not the competition.4. Puzzle-solving: How to turn this4. Puzzle-solving: How to turn this into an opportunity.into an opportunity.5. MBWA/X.5. MBWA/X.6. MBWA/I.6. MBWA/I.7. MBWA/Vendors.7. MBWA/Vendors.8. Waaaaay over-communicate!!!!!!8. Waaaaay over-communicate!!!!!! (With (With everyoneeveryone—start with your—start with your banker.)banker.)

Black Swan Tactical RulesBlack Swan Tactical Rules9. All work is team work.9. All work is team work.10. Transparency.10. Transparency. 11. Work the phones.11. Work the phones.12. Perception of fairness.12. Perception of fairness.13. Share the pain.13. Share the pain.14. Decency!!!!!!!14. Decency!!!!!!!15. Grace!!15. Grace!!16. “Thank you.”16. “Thank you.”17. Control your impatience—17. Control your impatience— no temper tantrums.no temper tantrums.18. Constant attitude checks—18. Constant attitude checks—youyou..

Black Swan Tactical RulesBlack Swan Tactical Rules19. Dress for success.19. Dress for success.20. Avoid burnout/you, the team,20. Avoid burnout/you, the team, the entire organization.the entire organization.21. 21. Re-emphasize the companyRe-emphasize the company values-philosophy.values-philosophy. (Now, (Now, more than ever.)more than ever.)22. Quality!!!!!! (Now, more than 22. Quality!!!!!! (Now, more than ever.)ever.)23. No corner cutting. (Now, more23. No corner cutting. (Now, more than ever.)than ever.)24. Constant reviews/War room.24. Constant reviews/War room.25. Celebration of small wins.25. Celebration of small wins.

Black Swan Tactical RulesBlack Swan Tactical Rules26. 26. People FirstPeople First/HR is King./HR is King.27. Help people with personal27. Help people with personal financial management.financial management.28. Be generous to those who are28. Be generous to those who are let go—e.g. healthcare benefits.let go—e.g. healthcare benefits.29. Don’t over-analyze.29. Don’t over-analyze.30. Don’t under-analyze.30. Don’t under-analyze.31. Cuts all at once—if possible.31. Cuts all at once—if possible.32. Cuts explained in great detail.32. Cuts explained in great detail.33. Quantitative calendar33. Quantitative calendar management—focus on “to management—focus on “to don’ts.”don’ts.”

Black Swan Tactical RulesBlack Swan Tactical Rules34. 34. IncreaseIncrease customer-service customer-service training.training.35. In general, minimize training 35. In general, minimize training cuts.cuts.36. Be(very)ware R&D cuts; R&D36. Be(very)ware R&D cuts; R&D quick pay SWAT teams.quick pay SWAT teams.37. Beware such things as sales37. Beware such things as sales travel cuts, ad cuts.travel cuts, ad cuts.38. “Across the board” = Dumb.38. “Across the board” = Dumb.39. Is this a time to over-invest if 39. Is this a time to over-invest if cash is at hand? (E.g., distressedcash is at hand? (E.g., distressed innovative start-ups?innovative start-ups?

Black Swan Tactical RulesBlack Swan Tactical Rules 40. Stealth work on the likes of 40. Stealth work on the likes of XF communication.XF communication.41. This could last a long time—41. This could last a long time— LT prep is necessary LT prep is necessary nownow..42. Prepare/Be prepared for 42. Prepare/Be prepared for moremore Black Swans.Black Swans.

43. 43. ExcellenceExcellence.. (Now, (Now, more than ever.)more than ever.)(44. Remember all this in(44. Remember all this in peacetime—Chuck Knight’speacetime—Chuck Knight’s legacy.)legacy.)