Tom Peters SeminarM3

Rollercoaster Days: Learning to … Rock &

Roll!

Clark/Bardes/22Feb2001

“There will be more confusion in the business world in the next decade than in any decade in history.

And the current pace of change will only accelerate.”

Steve Case

Rollercoaster Days2001: Blood on retail’s streets: Montgomery Ward,

Bradlees, Sears, Penney. Layoffs/10K+: Chrysler [27K], Lucent,

WorldCom, GM, Dana.

GE: 80,000??? [I’net driven.] Other Big: Sara Lee, Ford, Caterpillar,

Motorola. Human genome map published. Human cloning within 1

year. First space tourist in training.

108 X 5 vs. 8 X 1

White Collar Revolution!

Part I: Brand InsidePart II: Brand Outside

Part III: Brand Leadership

Brand Inside

Brand Talent: The Great War for Talent

“When land was the productive asset, nations

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

Stan Davis & Christopher Meyer, futureWEALTH

“We have transitioned from an asset-based strategy

to a talent-based strategy.”

Jeff Skilling, COO, Enron

09.11.2000: HP bids $18,000,000,000

for PricewaterhouseCoopers

Consulting bus! (31,000 bods)

1. Obsession

P.O.T.* = All Consuming

*Pursuit of Talent

From “1, 2 or 3” [JW] to …

“Best talent in each industry segment to build

best proprietary intangibles” [EM]

Source: Ed Michaels, War for Talent (05.17.00)

2. Greatness

Only The Best!

Home Depot: 7 new growth initiatives ($20B to $100B in 5-7 years)

Arthur Blank: BEST PERSON IN THE WORLD TO HEAD

EACH INITIATIVEE.g.: COO of IKEA to head

international expansion

Ed Michaels, War for Talent (05.17.00)

3. Performance

Up or out!

“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 (05.17.00)

Message: Some people are better than other

people. Some people are a helluva lot better than other

people.

4. Pay

Fork Over!

“Top performing companies are two to four times more likely

than the rest to pay what it takes to prevent losing

top performers.”

Ed Michaels, War for Talent (05.17.00)

“We value engineers like professional athletes. We value great people at 10 times an average person

in their function.”Jerry Yang, Yahoo

So-so plant manager, $1M per year. Pay: $110,000 plus $60,000. Top plant manager,

$3-4M per year. Pay: $135,000 plus $90,000. Net:

$2-3M for $50K.

Source: Ed Michaels et al., The War for Talent, re Georgia Pacific

What gets measured gets done. What gets

paid for gets done more. What gets paid

a lot for gets done a lot more.

[ Banking Incentive Pay for …

X-selling … 30%Customer Retention … 4%

Source: ABA Banking Journal ]

5. Women

Born to Lead!

“AS LEADERS, WOMEN RULE: New Studies find that female managers

outshine their male counterparts in almost

every measure”Title, Special Report, Business Week, 11.20.00

Women and new-economy

management …

The New Economy …

Shout goodbye to “command and control”!

Shout goodbye to hierarchy!

Shout goodbye to “knowing one’s place”!

Women’s Stuff = New Economy Match

Improv skillsRelationship-centric

Less “rank consciousness”Self determinedTrust sensitive

IntuitiveNatural “empowerment freaks” [less

threatened by strong people]Intrinsic [motivation] > Extrinsic

“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 day’s events? Who is

better at keeping in touch with others?”

Source: Selling Is a Woman’s Game: 15 Powerful Reasons Why Women Can Outsell Men, Nicki Joy &

Susan Kane-Benson

“Investors are looking more and more for a relationship with their

financial advisers. They want someone they can trust, someone who listens. In my experience, in general, women may be better at these relationship-building skills

than are men.”

Hardwick Simmons, CEO, Prudential Securities

Read This!

“Winning the Talent War for Women: Sometimes It

Takes a Revolution” Douglas McCracken, HBR [11-12/2000]

“Deloitte was doing a great job of hiring high-performing women; in fact, women often earned

higher performance ratings than men in their first years with the firm. Yet the percentage of women

decreased with step up the career ladder. … Most women weren’t leaving to raise families; they had weighed their options in Deloitte’s male-dominated culture and found them wanting.

Many, dissatisfied with a culture they perceived as endemic to professional service firms, switched

professions.”

Douglas McCracken, “Winning the Talent War for Women” [HBR]

63 of 2,500 top earners in F500

8% Big 5 partners

14% partners at top 250 law firms

43% new med students; 26% med

faculty; 7% deans

Source: Susan Estrich, Sex and Power

MantraM3

Talent = Brand

What’s your company’s …

EVP?

Employee Value Proposition, per Ed Michaels et al., The War for Talent

EVP = Challenge, professional growth, respect, satisfaction, opportunity, reward

[EVP = “The company’s fingerprint” = B.P.]

Source: Ed Michaels et al., The War for Talent

Dick Kovacevitch (Wells Fargo) on Talent

“You don’t just write a memo saying people are a competitive advantage. You back that up with

training, incentives and the interpersonal relationships developed over time that add up to your employees caring more about their

customers than the employees of your competitors. I can’t overstate how

differentiating that is, as opposed to a silver bullet about figuring out some way to

segment the market.”

Source: ABA Banking Journal

Part I: Brand InsidePart II: Brand Outside

Part III: Brand Leadership

The Death Knell for Ordinary:

Pursuing

Difference!

“Companies have defined so much ‘best practice’

that they are now more or less identical.”

Jesper Kunde, A Unique Moment

“Analysts said we don’t care about revenue, just give us the bottom line. They preferred cost cutting, as long as they could see 2 or 3 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 Kovacevitch, Wells Fargo (in ABA Banking Journal)

“What we’ve been doing is underserving our best customers.

It’s easy to reprice our unprofitable customers, to take away branches

from them and save some cost, but what are we doing to delight our

best customers?”James McCormick, First Manhattan Consulting Group

(ABA Banking Journal)

Forces @ Work II

The Commodity Trap

Quality Not Enough!

“While everything may be better, it is also increasingly the

same.”Paul Goldberger on retail, “The Sameness

of Things,” The New York Times

What’s Special?

“Customers will try ‘low cost providers’ because the

Majors have not given them any clear reason not to.”

Leading Insurance Industry

Analyst (10-98)

“The ‘surplus society’ has a surplus of

similar companies, employing

similar people, with similar educational backgrounds, working in

similar jobs, coming up with similar

ideas, producing similar things, with

similar prices and similar quality.”

Kjell Nordstrom and Jonas Ridderstrale, Funky Business

Brand Outside

Strategy 1:Use E-Commerce to

Re-invent Everything!

OVERVIEW

Tomorrow Today: Cisco!

90% of $20B (=$50M/day)75% mfg. outsourced; 50% of orders routed to supplier who ships direct

Gross margin: 65%; Net margin: 28%

Annual savings in service and support from customer

self-management: $550M

Enron eWorld: “Price a structured trade,” per John Arnold, 26: Early

1999: 30 times a day. Late 2000: 30 times per … minute.

Long-term gas contract. 1989: 9 months, 400+ deals. Late 90s:

2 weeks, 2 per week. Late 2000: 5 such deals per day

Source: www.ecompany.com (1/2001)

COMMUNITY SERVICES!/ CUSTOMER CONTROL!

Tomorrow Today: Cisco!

90% of $20B; save $550M

C.Sat e >> C.Sat H

Customer Engineer Chat Rooms/Collaborative

Design ($1B “free” consulting) (45,000 customer problems a week solved via

customer collaboration)

Welcome to

D.I.Y. Nation!“Changes in business processes will emphasize self service. Your costs as

a business go down and

perceived service goes up because customers are conducting it

themselves.” Ray Lane, Oracle

Anne Busquet/ American Express

Not: “Age of the Internet”

Is: “Age of Customer Control”

RADICAL STRATEGIES

REQUIRED

“One cannot be tentative about this. Excuses like ‘channel

conflict’ or ‘marketing and sales aren’t ready’ cannot be allowed. Delay and you risk being cut out of your own market, perhaps not by traditional competitors but by companies you

never heard of 24 months ago.”

Jack Welch [07.00/Forbes.com]

“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

“Banking is necessary.

Banks are not.”

Dick Kovacevitch

Brand Outside

Strategy 2:

Women Rule!

?????????

Home Furnishings … 94%Vacations … 92%

Houses … 91%Consumer Electronics … 51%

Cars … 60% (90%)All consumer purchases … 83%

Bank Account … 89%Health Care … 80%

????

80+%

Riding Lawnmowers

48% working wives > 50%80% checks

61% bills53% stock (mutual fund boom)

43% > $500K95% financial decisions/

29% single handed

Women … 50+%(!!!) of Web users; 6 of 10 new users; 83% of wired women are primary decision makers for family

healthcare, finances, education.

Source: Business Week; Jupiter Communications

Yeow!

1970 … 1%

2002 … 50%

Read This Book …

EVEolution: The Eight Truths of Marketing to Women

Faith Popcorn & Lys Marigold

Mars & Venus!

“Men and women don’t think the same way, don’t communicate the same

way, don’t buy for the same reasons.”

“He simply wants the transaction to take place. She’s interested in creating a relationship. Every place women go,

they make connections.”Faith Popcorn

EVEolution: Truth No. 1

Connecting Your Female Consumers to Each

Other Connects Them to Your Brand

“The ‘Connection Proclivity’ in women starts early. When asked,

‘How was school today?’ a girl usually tells her mother every

detail of what happened, while a boy might grunt, ‘Fine.’ ”

EVEolution

What If …

“What if ExxonMobil or Shell dipped into their credit card database to help commuting women

interview and make a choice of car pool partners?”

“What if American Express made a concerted effort to connect up female empty-nesters

through on-line and off-line programs, geared to help women re-enter the workforce with today’s

skills?”

EVEolution

“Women don’t buy

brands. They join them.”

Faith Popcorn, EVEolution

THIS JUST MIGHT BE THE BIGGEST “THING” IN THIS

SEMINAR. [PLEASE: THINK ABOUT IT!]

“Honey, are you sure you have the kind of money it takes to be looking at a car like

this?”

27 March 2000: email to TP from Shelley Rae Norbeck

“I make 1/3rd more money than my husband does. I have as much financial

‘pull’ in the relationship as he does. I’d say this is also true of most of my women

friends. Someone should wake up, smell the coffee and kiss our asses long enough

to sell us something! We have money to

spend and nobody wants it!”

“If we are single, they say we couldn’t catch a man. If we are

married, they say we are neglecting him. If we are divorced,

they say we couldn’t keep him. If we are widowed, they say we

killed him.”

Kathleen Brown, on the joys of female political candidacy

Brand Outside

Strategy 3:

BRAND POWER!

Cisco, Dell =

Brand-owning companies who sell Customer

Satisfaction

Source: David Schneider & Grady Means, MetaCapitalism [e.g.: Cisco owns 2 of 38

assembly plants]

“We are in the twilight of a society based on data. As information and intelligence become the domain of computers, society will place more value on the one human ability that cannot be automated: emotion.

Imagination, myth, ritual - the language of emotion - will affect everything from our purchasing decisions

to how we work with others. Companies will thrive on the basis of their stories and myths. Companies will need to understand

that their products are less important than their stories.”

Rolf Jensen, Copenhagen Institute for Future Studies

“WHO ARE YOU [these days] ?”

TP to Client

“Brand Promise” Exercise: (1) Who Are WE? (1 page, then 25 words.) (2) List

three ways in which we are UNIQUE … to our Clients. (3) Who are THEY (competitors)? (ID, 25 words.)

(4) List 3 distinct “us”/”them” differences. (5) Try “results” on your teammates. (6) Try ’em on a friendly Client. (7) Big Enchilada:

Try ’em on a skeptical Client!

Part I: Brand InsidePart II: Brand Outside

Part III: Brand Leadership

Brand Leadership

Passion Rules!

“Create a

Cause, not a ‘business.’ ”

Gary Hamel, Fortune (06.00), on re-inventing a company (Exemplar #1: Charles Schwab)