Two Weeks in July 2004: Not Your Father's World!

Two Weeks in July 2004: Not Your Father’s

World!

“China’s size does not merely enable low-cost manufacturing; it forces it. Increasingly, it is what

Chinese businesses and consumers choose for themselves that determines how the American

economy operates.” —Ted Fishman/“The Chinese Century”/

The New York Times Magazine /07.04.04

“One Monday this spring, a forty-three-year-old salesclerk at the Home Depot in Plano, Texas,

scribbled some updates onto an old resume and took it to his local copy shop. To his education

and work history—a bachelor’s degree in industrial engineering and technology, service in

the U.S. Marine Corps—he added a recent moonlighting job as a handyman and a new

‘career objective.’ Ten minutes later, in southern India, a middle-age Hindu man in a cavernous

workplace began to type the Home Depot clerk’s words.” —The New Yorker /07.05.2004

“The Ultimate Luxury Item Is Now

Made in China” —Headline/p1/The New York Times/

07.13.2004/Topic: Luxury Yachts made in Zhongshan

“Vaunted German Engineers Face

Competition From China” —Headline, p1/WSJ/07.15.2004

“JET BLUE has a secret weapon: a virtual

reservations center. … Jet Blue’s 600 agents all work

from home. …”

Source: Ad for Avaya/BW/07.19.2004

Colorado Springs: McDonald’s call center for Drive-

through (incl. electronic photo of customer)

Source: NYT/07.18.04

Business 2.0 outsources section

of August 2004 issue!

Source: USA Today/07.19.2004

MinuteClinic: “Next to the Express Checkout,

Express Medical Care”

Source: Headline/NYT/07.18.04 (on MinuteClinic at Targets and Cub Foods stores in Minneapolis

Tom Peters’

Re-Imagine!Business Excellence in a Disruptive Age

07.19.2004

Slides at …

tompeters.com

“Uncertainty is the only thing to be sure of.” —Anthony Muh,

head of investment in Asia, Citigroup Asset Management

“If you don’t like change, you’re going to like

irrelevance even less.” —General Eric Shinseki, Chief of Staff,

U. S. Army

“What is it that distinguishes the thousands of years of history from what we think of as modern times?

The answer goes way beyond the progress of science, technology, capitalism and democracy. … The

revolutionary idea that defines the boundary between modern times and the past is the mastery of risk: the notion that the future is more than a whim of the gods

and that men and women are not passive before nature. [ Thinkers like Luca Paccioli, Jacob Bernoulli and Abraham de Moivre] converted risk-taking into

one of the prime catalysts that drives modern Western society … and converted the future from an enemy into an opportunity.”—Peter Bernstein, Against the

Gods: The Remarkable Story of Risk

“Unless nimble and sophisticatede risk management systems are in place, the firm

will be unable to benefit from revenue growth.”

“There is a hell of a paradox. We try to model risk scenarios but end up instead

increasing the complexity of the business to the point where it is almost

unmanageable.”

Source: IBM Business Consulting Services/The Global CEO Study 2004

“We have no future because our present is too volatile.

We have only risk management. The spinning

of the given moment’s scenarios. Pattern

recognition.” —from William Gibson, Pattern Recognition

Harvey Mackay’s Meeting Ender: “What are the five

things that could go wrong, and what would we do

about each one?”

Biases.

Importance of Success Factors by Various “Gurus”/Estimates by Tom Peters

Strategy Systems Passion Execution Porter 50% 20 15 15

Drucker 35% 30 15 20

Bennis 25% 20 30 25

Peters 15% 20 35 30

“In Tom’s world, it’s always better to try a

swan dive and deliver a

colossal belly flop than to step timidly off the

board while holding your nose.” —Fast Company /October2003

Successful Businesses’ Dozen Truths: TP’s 30-Year Perspective

1. Insanely Great & Quirky Talent.2. Disrespect for Tradition.3. Totally Passionate (to the Point of Irrationality) Belief in What We Are Here to Do.4. Utter Disbelief at the BS that Marks “Normal Industry Behavior.”5. A Maniacal Bias for Execution … and Utter Contempt for Those Who Don’t “Get It.”6. Speed Demons.7. Up or Out. (Meritocracy Is Thy Name. Sycophancy Is Thy Scourge.)8. Passionate Hatred of Bureaucracy.9. Willingness to Lead the Customer … and Take the Heat Associated Therewith. (Mantra: Satan Invented Focus Groups to Derail True Believers.)10. “Reward Excellent Failures. Punish Mediocre Successes.” 11. Courage to Stand Alone on One’s Record of Accomplishment Against All the Forces of Conventional Wisdom.12. A Crystal Clear Understanding of the power of a Good Story (Brand Power).

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!

Sir Richard’s Rules:

Follow your passions.Keep it simple.

Get the best people to help you.Re-create yourself.

Play.

Source: Fortune/10.03

“It’s no longer enough to be a ‘change agent.’ You

must be a change insurgent—provoking,

prodding, warning everyone in sight that

complacency is death.” —Bob Reich

Purpose.

It is the foremost task—and responsibility—of our generation to

re-imagine our enterprises, private

and public. —from the back cover, Re-imagine!

“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

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

Joe J. Jones Joe J. Jones 1942 – 2003 1942 – 2003

HE WOULDA DONE SOME HE WOULDA DONE SOME

REALLY COOL STUFF REALLY COOL STUFF

BUT …BUT …

HIS BOSS WOULDN’T LET HIM! HIS BOSS WOULDN’T LET HIM!

T. J. Peters T. J. Peters 1942 – 2---1942 – 2---

HE WAS A PLAYER!HE WAS A PLAYER!

Characteristics of the “Also rans”*

“Minimize risk”“Respect the chain of

command”“Support the boss”

“Make budget”*Fortune, article on “Most Admired Global Corporations”

60 – 30 = 90 – 60*

*90 – 60 > 60 – 30 (??)

I. NEW BUSINESS.

NEW CONTEXT.

Montgomery Ward … Kmart … Sears … Macy’s … DEC … Wang

… Compaq … Chase Manhattan … American Motors … Chrysler …

U.S. Steel … Bethlehem Steel … AT&T … Soviet Union …

Wal*Mart … Dell … Microsoft … U.S.A. …

1. Re-imagine Everything: All Bets Are Off.

Mount Madness v.2004

Perfect Storm

X

Corporate Mal-adaptivity

Jobs Technology

Globalization War, Warfighting

& Security

Jobs New Technology

Globalization War, Warfighting &

Security

“In a global economy, the government cannot give

anybody a guaranteed success story, but you can give people the tools to make the most of

their own lives.” —WJC, from Philip Bobbitt,

The Shield of Achilles: War, Peace, and the Course of History

“14 MILLION service jobs are in

danger of being shipped overseas” —

The Dobbs Report/USN&WR/11.03/re new UCB

study

“Income Confers No Immunity as Jobs Migrate” —Headline/USA Today/02.04

“When I was growing up, my parents used to say to me:

‘Finish your dinner—people in China are starving.’ I, by contrast, find myself wanting to say to my

daughters: ‘Finish your homework—people in China and India are starving for your job.’ ” —Thomas Friedman/06.24.2004

Siemens

Total (’94 to ’04), 376K to 415K; Germany, 218K to 167K

6X Prague (“Today it’s Hungary, tomorrow it’ll be Lithuania and Estonia”—IG Metall

rep)

“Assembly-line jobs are not the only ones at risk; software work is next.”

Source: BusinessWeek/05.2004

“One Singaporean worker costs as much as …

3 … in Malaysia 8 … in Thailand 13 … in China 18 … in India.”

Source: The Straits Times/08.18.03

“Thaksinomics” (after Taksin 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/03.04.2004

“The proper role of a healthily functioning economy is to destroy

jobs and to put labor to use elsewhere. Despite this truth, layoffs and firings will always

sting, as if the invisible hand of free enterprise has slapped

workers in the face.” —Joseph Schumpeter

--79% of U.S. jobs in “structurally changed professions” (“permanently eliminated jobs”)(40K of 160K U.S. IBM)

--“As we trade we release more labor from the service sector because our highly skilled and highly paid workers lose their competitive advantage. So we go to the next big thing. We specialize in innovation. We develop new products and start new industries.” (Erica Groshen, labor economist Fed of NY)

Source: CNN/Money/01.07.2004

“There is no job that is America’s God-given right

anymore.” —Carly Fiorina/ HP/

01.08.2004

“America, like everyone else, must get used to being a loser as well as a gainer in the global economy. In the end, the

21st century is unlikely to be the American Century.” —“When the Chinese Consumer Is King”/New

York Times/12.14.2003. “The notion that God intended Americans to be permanently

wealthier than the rest of the world, that gets less and less likely as time

goes on.” —Robert Solow, Nobel laureate in economics/New York Times/12.14.2003

In Store: International Equality, Intranational Inequality

“The new organization of society implied by the triumph of individual autonomy and the true equalization of opportunity based upon merit will lead to very great

rewards for merit and great individual autonomy. This will leave individuals far more responsible for

themselves than they have been accustomed to being during the industrial period. It will also reduce the

unearned advantage in living standards that has been enjoyed by residents of advanced industrial societies

throughout the 20th century.”

James Davidson & William Rees-Mogg,The Sovereign Individual

“WHAT ARE PEOPLE GOING TO DO WITH

THEMSELVES?” —Headline/

Fortune/ 11.03 (“We should finally admit that we do not and cannot know, and regard that fact with serenity

rather than anxiety.”)

“Either we modernize or we will be modernized by the unremitting force of the markets.” —Gerhard Schroeder

+People skills & emotional intelligence (financial service sales, 78%/248K; RNs, 28%/512K; lawyers, 24%/182K)

Imagination & creativity (architects, 44%/60K; designers, 43%/230K; photographers, 38%/50K)

Analytic reasoning (legal assts, 66%/159K; electronic engs, 28%/147K; computer operators, 55%/367K)

Source: “Where the Jobs Are”/NYT/05.13.2004/data 1994-2004

-Formulaic intelligence (health record clerks, 63%/36K;

secretaries & typists, 30%/1.3M; bookkeepers, 13%/247K)

Manual dexterity (sewing machine ops, 50%/347K; lathe ops, 49%/30K; butchers, 23%/67K)

Muscle power (timber cutters, 32%/25K; farm workers, 20%/182K)

Source: “Where the Jobs Are”/NYT/05.13.2004/data 1994-2004

“Over the last decade the biggest employment gains came in occupations that rely on people skills and emotional intelligence and among

jobs that require imagination and creativity. … Trying to preserve existing jobs will prove futile

—trade and technology will transform the economy whether we like it or not. Americans will be better off if they strive to move up the hierarchy of human talents. That’s where our

future lies.” —Michael Cox, Richard Alm and Nigel Holmes/“Where the Jobs Are”/NYT/05.13.2004

Jobs Technology


Security

“Behind Surging Productivity: The Service

Sector Delivers. Firms Once Thought Immune to

Boosting Worker Output Are Now Big Part of the Trend” —

Headline/WSJ/11.03

“A bureaucrat is an expensive

microchip.”Dan Sullivan, consultant and

executive coach

E.g. …

Jeff Immelt: 75% of “admin, back room, finance” “digitalized” in

3 years.

Source: BW (01.28.02)

“UPS used to be a trucking company with technology. Now it’s a technology company

with trucks.” —Forbes, upon naming UPS

“Company of the Year” in Y2000

<1000A.D.: paradigm shift: 1000s of years1000: 100 years for paradigm shift

1800s: > prior 900 years1900s: 1st 20 years > 1800s

2000: 10 years for paradigm shift

21st century: 1000X tech

change than 20th century (“the ‘Singularity,’ a merger between humans and computers that is so rapid and profound it

represents a rupture in the fabric of human history”)

Ray Kurzweil

“We found that the pace of development from one societal type to another is

accelerating. The agricultural society originated 10,000 years ago, the industrial

society between 200 and 100 years ago, the information-based society 20 years ago.” —

Rolf Jensen/The Dream Society: How the Coming Shift from Information to Imagination Will Transform Your Business

“Unless mankind redesigns itself by changing our DNA through altering our genetic

makeup, computer-generated robots will take

over the world.” – Stephen

Hawking, in the German magazine Focus

“What strategic motto will dominate this transition from nation-state to market-state? If the slogan that animated the

liberal, parliamentary nation-states was ‘make the world safe for democracy,’ what

will the forthcoming motto be? Perhaps ‘making the world available,’ which is to say creating new worlds of choice and protecting the autonomy of persons to

choose.” —Philip Bobbitt, The Shield of Achilles: War, Peace, and the Course of History

“better material welfare” vs. “maximize the opportunity of its

people” —Philip Bobbitt, The Shield of Achilles:

War, Peace, and the Course of History

“I genuinely believe we are living through the greatest intellectual moment in history.”

Matt Ridley, Genome

“In 25 years, you’ll probably be able to get the

sum total of all human knowledge on a personal

device.”Greg Blonder, VC [was Chief Technical

Adviser for Corporate Strategy @ AT&T] [Barron’s 11.13.2000]

“A California biotechnology company has put the entire

sequence of the human genome on a single chip, allowing

researchers to conduct on the complex relationships between the 30,000 genes that make up a

human being in a single experiment.” —Page 3, Financial Times/10.03.2003

Sequenom/David Ewing Duncan/Wired11.02

“Sequenom has industrialized the SNP [single nucleotide polymorphisms] identification

process.” “This, I’m told, is the first time a healthy human has ever been screened for the

full gamut of genetic-disease markers.” “On the horizon: multi-disease gene kits, available at Wal*Mart, as easy to use as home-pregnancy tests.” “You can’t look at humanity separate from machines; we’re so intertwined we’re

almost the same species, and the difference is getting smaller.”

“Help! There’s nobody in the cockpit. In the future, will the

airlines no longer need pilots?”

Grumman Global Hawk/ 24 hours/ Edwards to South

Australia

Source: The Economist/12.21.2002

“There’s going to be a fundamental change in the

global economy unlike anything we have had since the cavemen began bartering.”

Arnold Baker, Chief Economist, Sandia National Laboratories

Jobs Technology


Security

“Asia’s rise is the economic event of our age. Should it proceed as it has over the last few decades, it

will bring the two centuries of global domination by Europe and,

subsequently, its giant North American offshoot to an end.”

—Financial Times (09.22.2003)

“The world has arrived at a rare strategic inflection point where nearly half its

population—living in China, India and Russia—have been integrated into the global market economy, many of them highly educated workers, who can do

just about any job in the world. We’re talking about three billion

people.” —Craig Barrett/Intel/01.08.2004

Cost of a Programmer, per IBM …

China: $12.50 per hourUSA: $56 per hour

Source: WSJ/01.19.2004

‘We erect walls to foreign trade and even discourage job-displacing innovations. But time and again

through our history, we have discovered merely to preserve the

comfortable features of the present, rather than reaching for new levels of

prosperity, is a sure path to stagnation.” —Alan Greenspan/03.12.2004

China Roars!

“The World Must Learn to Live with

a Wide-awake China” —Headline/FT/11.03

Chinese Industrial Growth Rate Slows!

April ’03 to April ’04: 19.1%

May ’03 to May ’04: 17.5%


“China has become a manufacturing hub for the rest of the world in low-end labor-intensive goods—and the

rest of the world is becoming a manufacturing hub for China in high-end, capital-intensive goods. …

China may be a threat to certain parts of the global supply chain that rely on low-cost labor, but it

represents an even greater opportunity via production-efficiency gains, economic welfare gains and long-term dynamic potential. Its booming exports are more than matched by booming industrial imports and foreign investment opportunities. It has become

the new engine of global growth.”Source: Glen Hodgson & Mark Worrall/Export Development Canada, in “China Takes

Off,” David Hale & Lyric Hughes Hale/Foreign Affairs/Nov-Dec2003

1990-2003: Exports 8X ($380B); 6% global exports 2003 vs. 3.9% 2000; 16% of

Total Global Growth in 2002.

Source: “China Takes Off,” David Hale & Lyric Hughes Hale/Foreign Affairs/Nov-Dec2003

1998-2003: 45,000,000 layoffs in state sector; offset by $450B in

foreign investment; foreign companies account for 50+% of exports vs. 31% in Mexico,

15% in Korea.


50% of output from private firms, 37% from state-owned

firms; 80% of workforce (incl. rural) now in private

employ.


Population growth = 1%; two-thirds of housing

privately owned, 90% of urban Chinese own a home

(vs. 61% in Japan)


200 cities with >1,000,000 population.


Shanghai. 17 million people. $10,000 p.c. (10X

China). 2000-2003: 30% p.a. growth.

Source: Washington Post/6.13.04

200,000,000 unemployed; must create 20,000,000 jobs per year

to offset layoffs; 400,000,000 elderly Chinese by 2030

(currently no pension funds).


397,000,000 fixed phone

lines = 90X since 1989.


2003: China-Hong Kong leading producer in 8 of 12 key consumer electronic product areas (>50%: DVDs, digital cameras; >33.33%:

DVD-ROM drives, personal desktop and notebook computers; >25% mobile phones, color TVs,

PDAs, car stereos).Source: “China Takes Off,” David Hale & Lyric Hughes

Hale/Foreign Affairs/Nov-Dec2003

“When the Chinese Consumer Is King:

America’s mass market is second to none.

Someday it will just be second.” —Headline, New York Times/12.14.2003

“As China becomes the world’s factory and Flextronics becomes

the biggest electronics manufacturer in China, policy makers and analysts wonder

whether there will be a future for manufacturing in Singapore, Malaysia, North America or

Europe.” —Asia Inc./02.2004

“Going Global: Flush with billions in foreign reserves,

China is embarking on a buying spree” —Cover/ Newsweek/ 03.01.04/ on

China’s aggressive offshore acquisition activity (buying brands,

technology, etc.)

Chinese Offshore Tourists

’93: 3M’03: 21M

Steel: China

20X EU.

Source: Newsweek/05.2004

World economic output: U.S.A., 21%; EU, 16%; China, 13%

(2X since1991)

Source: New York Times/12.14.2003

Indian GDP/1990-2002: Ag, 34% to 21%; services,

40% to 56%

Source: The Economist/02.04

Level 5 (top) ranking/Carnegie Mellon

Software Engineering Institute: 35 of 70

companies in world are from India

Source: Wired/02.04

“GE is a champion of India’s scientists, technicians, business analysts and

graduates, thousands of whom work at the U.S. conglomerate’s offshore service centers in India. They are the low-cost,

high capability vanguard of GE’s outsourcing to India. Along the way, GE

has transformed its cost structure, enhanced its ability to provide technology services and incubated a rare world-class

industry in India.” —FT/06.03.03

“Forget India, Let’s Go to Bulgaria” —Headline,

BW/03.04, re SAP, BMW, Siemens et al. “near-shoring”

“CLONING COLLEGE: South Korea’s

biomedical researchers, unhampered by politics, do world-class research

on the cheap” —Headline,

Newsweek/03.01.04

Jobs Technology

Globalization

War, Warfighting & Security

“The world’s new dimension (computers, Internet, globalization,

instantaneous communication, widely available instruments of mass

destruction and so on) amounts to a new metaphysics that, by empowering

individual zealots or agitated tribes with unappeasable grievances, makes the world unstable and dangerous in

radically new ways.” —Lance Morrow/Evil

The Breaking of Nations: Order and Chaos in the

Twenty-first CenturyRobert Cooper (as interpreted by Tom Peters)

“This is a dangerous world and it is going to become more dangerous.”

“We may not be interested in chaos but

chaos is interested in us.”

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

“Al-Qaeda Said to have 18,000 Militants for

Raids”Source: AP/05.25.2004/from International Institute for

Strategic Studies annual survey of world affairs

“What happened after 1945 was not so much a radically new system as the concentration and culmination of the old

one.” —Robert Cooper, on the Cold War, from The

Breaking of Nations: Order and Chaos in the Twenty-first Century

“What has been emerging into the daylight since 1989 is not a

rearrangement of the old system but a new system. Behind this lies

a new form of statehood, or at least states that are behaving in a

radically different way from the past.” —Robert Cooper, The Breaking of Nations: Order

and Chaos in the Twenty-first Century

“The image of peace and order through a single hegemonic power center [is

wrong]. … It was not the empires but the small states that proved to be a dynamic

force in the world. Empires are ill-designed for promoting change. Holding

an empire together requires an authoritarian political style; innovation

leads to instability.” —Robert Cooper, The Breaking of Nations: Order and Chaos in the Twenty-first

Century

Read This!

“The new century risks being overrun by both anarchy and technology. The two great destroyers of history may reinforce each other. Both the spread of terrorism and that of weapons of mass destruction point to a world in which

Western governments are losing control. The spread of the technology of mass destruction represents a potentially massive redistribution of power

away from the advanced industrial (and democratic) states and toward smaller states that may be less stable and have less of a stake in an orderly world; or more dramatically still, it may represent a redistribution of power

away from the state itself and towards individuals, that is to say terrorists or criminals. In the past to be damaging, an ideological movement had to be

widespread to recruit enough support to take on authority. Henceforth, comparatively small groups will be able to do the sort of damage which

before only state armies or major revolutionary movements could achieve. A few fanatics with a ‘dirty bomb’ or biological weapons will be able to cause

death on a scale not previously envisaged. … Emancipation, diversity, global communication—all of the things that promise an age of riches and creativity—could also bring a nightmare in which states lose control of the means of

violence and people lose control of their futures.”—Robert Cooper, The Breaking of Nations: Order and Chaos in the Twenty-first Century

Reflect.

“Before we can talk about the security requirements for today

and tomorrow, we have to forget the security rules of yesterday.” —Robert Cooper, The

Breaking of Nations: Order and Chaos in the Twenty-first Century

“IT MAY SOMEDAY BE SAID THAT THE 21ST CENTURY BEGAN ON SEPTEMBER 11, 2001. …

“Al-Qaeda represents a new and profoundly dangerous kind of

organization—one that might be called a ‘virtual state.’ On September 11 a virtual

state proved that modern societies are vulnerable as never before.”—Time/09.09.2002

“The deadliest strength of America’s new adversaries is their very fluidity, Defense Secretary Donald

Rumsfeld believes. Terrorist networks, unburdened by fixed borders, headquarters or conventional forces, are

free to study the way this nation responds to threats and adapt themselves to prepare for what Mr. Rumsfeld is certain will be another attack. …

“ ‘Business as usual won’t do it,’ he said. His answer is to develop swifter, more lethal ways

to fight. ‘Big institutions aren’t swift on their feet in adapting but rather ponderous and clumsy

and slow.’ ”—The New York Times/09.04.2002

From: Weapon v. Weapon

To: Org structure v. Org structure

“Our military structure today is essentially one

developed and designed by Napoleon.”

Admiral Bill Owens, former Vice Chairman, Joint Chiefs of Staff

“The organizations we created have become tyrants. They have taken

control, holding us fettered, creating barriers that hinder rather than help our businesses. The lines that we drew on our neat organizational diagrams have turned into walls

that no one can scale or penetrate or even peer over.” —Frank Lekanne Deprez &

René Tissen, Zero Space: Moving Beyond Organizational Limits.

“In an era when terrorists use satellite

phones and encrypted email, US gatekeepers stand armed against them with pencils

and paperwork, and archaic computer systems that don’t

talk to each other.”Boston Globe (09.30.2001)

Eric’s Army

Flat.Fast.Agile.Adaptable.Light … But Lethal.Talent/ “I Am an Army of One.”Info-intense.Network-centric.

“Float like a butterfly.

Sting like a bee.” —Ali

“To fight terrorism with an army is like trying to

shoot a cloud of mosquitoes with a

machine gun.” —Review of Terror in the Name

of God/NYT/11.2003

“Rather than have massive armies that people can go along and

inspect, it is now about having rapidly deployable expediency forces that can be dropped by

land, sea or air and with full support.” —MoD official, on Defense Secretary Geoff

Hoon’s defense white paper (12.2003)

“Palmisano is pushing IBM’s ability to assemble SWAT

teams of hardware, software services, research and sales

people to cure customers’ headaches.” —Fortune/06.14.04

“We must not only transform our armed forces but the Defense Department that serves them—

by encouraging a culture of creativity and intelligent risktaking. We must promote a more entrepreneurial approach: one that encourages

people to be proactive, not reactive, and to behave less like bureaucrats and more like

venture capitalists; one that does not wait for threats to emerge and be ‘validated,’ but rather

anticipates them before they appear and develops new capabilities to dissuade them and

deter them.” —Donald Rumsfeld, Foreign Affairs

OODA Loop/Boyd Cycle“Unraveling the competition”/ Quick Transients/ Quick Tempo (NOT JUST

SPEED!)/ Agility/ “So quick it is disconcerting” (adversary over-reacts or under-reacts)/ “Winners used tactics that caused the enemy to unravel before the

fight” (NEVER HEAD TO HEAD)

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

“Fast Transients”

“Buttonhook turn” (YF16: “could flick from one maneuver to another faster than any aircraft”)


“Blitzkrieg is far more than lightning thrusts that most people think of

when they hear the term; rather it was all about high operational tempo

and the rapid exploitation of opportunity.”/ “Arrange the mind of

the enemy.”—T.E. Lawrence/ “Float like a butterfly, sting like a

bee.”—Ali


F86 vs. MiG/Korea/10:1

Bubble canopy (360 degree view)

Full hydraulic controls (“The F86 driver could go from one maneuver to another faster than the MiG driver”)

MiG: “faster in raw acceleration and turning ability”; F86: “quicker in

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

“Maneuverists”


All Bets Are Off!

“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

“We are in a

brawl with no rules.”

Paul Allaire

S.A.V.

“Strategy meetings held once

or twice a year” to “Strategy meetings needed several

times a week”

Source: New York Times on Meg Whitman/eBay

“How we feel about the evolving future tells us who we are as individuals and as a civilization: Do we search for stasis—a regulated, engineered world? Or do we embrace dynamism—a world of constant creation,

discovery and competition? Do we value stability and control? Or evolution and learning? Do we think that progress requires a central blueprint? Or do we see it as a decentralized, evolutionary process? Do we see mistakes as permanent disasters? Or the correctable

byproducts of experimentation? Do we crave predictability? Or relish surprise? These two poles,

stasis and dynamism, increasingly define our political, intellectual and cultural landscape.” —Virginia Postrel,

The Future and Its Enemies

“Let’s compete—by training the best workers, investing in R & D,

erecting the best infrastructure and building an education system that graduates students who rank with the worlds best. Our goal is to be competitive with the best so we

both win and create jobs.” —Craig Barrett (Time/03.01.04)

The Winning Edge: Peters’ Big6

1. Research-Innovation2. Entrepreneurial Attitude & Support (Especially from Capital Markets)

3. Creative (“Obstreperous”) Education4. Free Trade-Open Markets5. Individual Self-reliance (& Supports Therefore)

6. Cutting-edge Infrastructure

How Nations Become Wealthy

1. Property rights 2. Scientific rationalism 3. Capital markets 4. Fast and efficient communications and transportation

Source: The Birth of Plenty: How the Prosperity of the Modern World Was Created, William Bernstein

2. Re-imagine Permanence:

The Destruction Mandate.

“It is generally much easier to kill an

organization than change it

substantially.” Kevin Kelly, Out of Control

“Wealth in this new regime flows directly from innovation, not

optimization. That is, wealth is not gained by perfecting the known,

but by imperfectly seizing the unknown.”

Kevin Kelly, New Rules for the New Economy

C.E.O. to

C.D.O.

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

“Mr. Foster and his McKinsey colleagues collected detailed

performance data stretching back 40 years for 1,000 U.S. companies. They

found that none of the long-term survivors managed to outperform the market. Worse, the longer companies had been in the database, the worse

they did.”—Financial Times/11.28.2002

“It’s just a fact: Survivors underperform.”

—Dick Foster

Rate of Leaving F500

1970-1990: 4XSource: The Company, John Micklethwait & Adrian

Wooldridge (1974-200: One-half biggest 100 disappear)

“Far from being a source of comfort,

bigness became a code for inflexibility.” —John

Micklethwait & Adrian Wooldridge, The Company

“Good management was the most powerful reason [leading firms] failed to stay atop their industries. Precisely because these firms

listened to their customers, invested aggressively in technologies that would provide their customers more

and better products of the sort they wanted, and because they carefully studied market trends and

systematically allocated investment capital to innovations that promised the best returns, they lost

their positions of leadership.”

Clayton Christensen, The Innovator’s Dilemma

“The corporation as we know it, which is now 120 years old, is

not likely to survive the next 25 years. Legally and

financially, yes, but not structurally and economically.”

Peter Drucker, Business 2.0

Forget>“Learn”

“The problem is never how to get new,

innovative thoughts into your mind, but how to

get the old ones out.”

Dee Hock

Success Kills!

“The more successful a company, the flatter its

forgetting curve.” — Gary Hamel and C.K. Prahalad

“When asked to name just one big merger that had lived up to expectations, Leon

Cooperman, former cochairman of Goldman Sachs’ Investment Policy

Committee, answered: I’m sure there are success stories

out there, but at this moment I draw a blank.”

Mark Sirower, The Synergy Trap

“Conglomerates don’t work.” —James

Surowiecki, The New Yorker (07.01.2002)

“MERGERS: Why Most Big Deals Don’t Pay Off. A

BusinessWeek analysis

shows that 61% of buyers destroyed shareholder wealth.” —BusinessWeek/10.14.2002

“Mergers and acquisitions get the headlines, but studies show they often end up destroying shareholder

value instead of creating it. That’s one reason why organic growth is so prized by corporations and

investors. In fact, if you compare the stock performance of a new index of 23 companies that are masters of organic growth to the S&P500, the Organic Growth

Index beat the S&P500 handily, 31% vs. 22% over the year ending January 2004. And looking further back at a

five-year period ending in 2002, the OGI walloped the S&P500, 25% vs. 3%.” —Fortune.com/06.03.2004 (The OGI includes

Wal*Mart, Sysco, Harley-Davidson, Bed, Bath & Beyond, NVR)

Market Share, Anyone?

— 240 industries; market-share leader

is ROA leader 29% of the time

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

Source: Donald V. Potter, Wall Street Journal

“Acquisitions are about buying market share.

Our challenge is to create markets. There is a big difference.”

Peter Job, CEO, Reuters

“The $58B hostile bid by Sanofi-Synthelabo for Aventis has been greeted skeptically, as has the news that Novartis may counterbid. Few

investors believe that Big Pharma can compensate for a deficit of new drugs by

getting bigger. Some suspect the converse is true: that size has made them sluggish. … That has led to some thinking the unthinkable: that pharmaceutical companies should leave drug

discovery to biotech companies and focus their efforts on development and marketing.”

—Financial Times/03.2004

“Active mutators in placid times tend to die off. They

are selected against. Reluctant mutators in

quickly changing times are also selected against.”

Carl Sagan & Ann Druyan, Shadows of Forgotten Ancestors

““Survival of the Fittest Not the Fattest”/John Kay/Survival of the Fittest Not the Fattest”/John Kay/FTFT03.27.200303.27.2003

“I have heard it from people who make pharmaceuticals and from people who make defense equipment. From executives in utilities and executives in advertising. Among

banks and law firms. .. They all expect their industry to develop the way the car industry has. In an increasingly globalized marketplace, maturing industries will become steadily more concentrated. Only a small number of big companies will

survive.

“There is one problem with these analogies. What is said about the motor industry is not true.The peak of concentration in the automobile industry was reached in the

early 1950s and since then there has been a substantial decline. However you look at it, small carmakers have been steadily gaining market share at the expense of large ones. Back in the 1960s, the 10 largest carmakers had a market share of 85 percent; today it is about 75 percent. Concentration has fallen, even though weak firms have

been repeatedly absorbed through mergers.

“As markets evolve, differentiation becomes steadily more important. Success in the motor industry comes not from size or scale, but from developing competitive

advantages in operations and marketing those advantages internationally. The same is true in pharmaceuticals and defense equipment, utilities and banking,

telecommunications and media.”

Lessons from the Bees!

“Since merger mania is now the rage, what lessons can the bees teach us? A simple one: Merging is not in

nature. [Nature’s] process is the exact opposite: one of growth, fragmentation and dispersal. There is no

megalomania, no merging for merging’s sake. The point is that unlike corporations, which just get bigger, bee colonies know when the time has come to split up into

smaller colonies which can grow value faster. What the bees are telling us is that the corporate

world has got it all wrong.”David Lascelles, Co-director of The Centre for the

Study of Financial Innovation [UK]

“The Industrial Revolution was about scale: vast factory complexes, skyscrapers and railway

grids concentrating power in the hands of rulers of large territories: not only responsible rulers such as Bismarck and Disraeli, but Hitler and Stalin too. But the post-Industrial Revolution

empowers any one with a cellular phone and a bag of explosives. America’s military superiority

guarantees that such new adversaries will not fight according to our notions of fairness: they will come at us by surprise, asymmetrically, at our weakest points.” —Robert Kaplan, Warrior Politics

TP on Acquisitions

1. Big + Big = Disaster. (Statistically.) (There are exceptions; e.g., Citigroup.)2. Big (GE, Cisco, Omnicom) acquires small/specialist = Good … if you can retain Top Talent.3. Odds on achieving “projected synergies” among Mixed Big “cultures”: 10%.4. Max Scale Advantages are achieved at a smaller size than imagined.5. Attacked by Big, Mediocre Medium marries Mediocre Medium to “bulk up.” Result: Big Mediocrity … or worse.6. Any size—if Great & Focused—can win, locally or globally.7. Increasingly, Alliances deliver more value than mergers —and clearly abet flexibility.

Winning the Merger Game Is Possible

--Lots of deals--Little deals

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

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

Comcast-Disney

“Most of our predictions are based

on very linear thinking. That’s why they will

most likely be wrong.”Vinod Khosla, in “GIGATRENDS,” Wired 04.01

The Gales of Creative Destruction

+29M = -44M + 73M

+4M = +4M - 0M

“The secret of fast progress is

inefficiency, fast and furious and numerous

failures.”Kevin Kelly

RM: “A lot of companies in the Valley fail.”

RN: “Maybe not enough fail.”

RM: “What do you mean by that?”

RN: “Whenever you fail, it means you’re trying new things.”

Source: Fast Company

“The Silicon Valley of today is built less atop

the spires of earlier triumphs than upon the

rubble of earlier debacles.”—Newsweek/ Paul Saffo (03.02)

“... natural selection is death. ... Without huge amounts of death, organisms do not change over time. ... Death is the mother of structure. ... It took four billion years of death ... To invent the human mind ...”

— The Cobra Event

Axiom (Hypothesis): We have been screwed by Benchmarking … Best Practice … C.I./Kaizen.

Axiom (Hypothesis): We need Masters of Discontinuity/

Masters of Ambiguity … in discontinuous/ambiguous

times.

“Organize” for … performance & customer satisfaction.

“Disorganize” for … renewal & innovation.

“Rose gardeners face a choice every spring: how to prune our roses. The long-term fate of a rose garden depends on this decision. If you want to have

the largest and most glorious roses of the neighborhood, you will prune hard. You will reduce each rose plant to a maximum of three stems. This

represents a policy of low tolerance and tight control. You force the plant to make the maximum use of its available resources, by putting them into the

the rose’s ‘core business.’ However, if this is an unlucky year [late frost, deer, green-fly invasion], you may lose the main stems or the whole plant!

Pruning hard is a dangerous policy in an unpredictable environment. Thus, if you are in a spot where you know nature may play tricks on you, you may opt for a policy of high tolerance. You will leave more stems on the plant.

You will never have the biggest roses, but you have a much-enhanced chance of having roses every year. You will achieve a gradual renewal of the plant. In short, tolerant pruning achieves two ends: (1) It makes it easier to

cope with unexpected environmental changes. (2) It leads to a continuous restructuring of the plant. The policy of tolerance admittedly wastes

resources—the extra buds drain away nutrients from the main stem. But in an unpredictable environment, this policy of tolerance makes the rose

healthier. Tolerance of internal weakness, ironically, allows the rose to be stronger in the long run.”—Arie De Geus, The Living Company

Japan’s Science Gap *

Rice farming culture: uniqueness suppressed. Gov’t control of R & D. Promotion based on

seniority. Consensus vs. debate. (U.S.: friends can be mortal enemies.) Bias for C.I. vs. “bold

leaps.” Lack of competition and critical evaluation (peer review). Syukuro Manabe:

“What we need to create is job insecurity rather than security to make people compete more.”

*Hideki Shirakawa, Nobel laureate, chemistry

December 2000: Swiss House for Advanced Research &

Education. Cambridge, Massachusetts. Xavier

Comtesse: “You never hear a Swiss say, ‘I want to change the

world.’ We need to take more risks.”

“The Word(s)” on Vitality: Gary Hamel

“Sell By” [jettison old crap]

Spin Out [support entrepreneurs]

Spin In [buy young firms]

No Wiggle Room!

“Incrementalism is innovation’s worst enemy.”

Nicholas Negroponte

Just Say No …

“I don’t intend to be known as the ‘King of

the Tinkerers.’ ”CEO, large financial services company

“Perfection is achieved only by institutions on the point of

collapse.”— C. Northcote Parkinson

“Beware of the tyranny of making Small Changes

to Small Things. Rather, make Big Changes to Big Things.” —Roger Enrico, former Chairman,

PepsiCo

Sysco!

2A. Yo, Jim Collins . Or:

Tom’s Case for …

Technicolor!

“intrepid, unprincipled, reckless, predatory, with

boundless ambition, civilized in externals but

a savage at heart.”

Herman Melville on JPJ: “intrepid, unprincipled,

reckless, predatory, with boundless ambition,

civilized in externals but a savage at heart.” —from Evan

Thomas, John Paul Jones: Sailor, Hero, Father of the American Navy

Huh?

“Humility: The Surprise Factor in Leadership … bosses with Gung-

ho Qualities and Charisma May Be Out of Fashion” —Headline/FT/

re JCollins/10.03

Jim & Tom. Joined at the

hip. Not.

I. Good to GreatII. Built to LastIII. Quiet, Humble Leaders

Good to Great: Fannie Mae … Kroger … Walgreens … Philip

Morris … Pitney Bowes … Abbott … Kimberly-Clark … Wells Fargo

Great Companies … SET THE AGENDA.

(Period.)

AGENDA SETTERS: “Set the Table”/ Pioneers/ Questors/ Adventurers

US Steel … Ford … Macy’s … Sears … Litton Industries … ITT … The Gap … Limited … Wal*Mart … P&G … 3M …

Intel … IBM … Apple … Nokia … Cisco … Dell … MCI … Sun … Oracle …

Microsoft … Enron … Schwab … GE … Southwest … Laker …People Express

… Ogilvy … Chiat/Day … Virgin … eBay … Amazon … Sony … BMW … CNN …

Built to Last v. Built to Flip

“The problem with Built to Last is that it’s a romantic notion. Large companies are

incapable of ongoing innovation, of ongoing flexibility.”

“Increasingly, successful businesses will be ephemeral. They will be built to yield

something of value – and once that value has been exhausted, they will vanish.”

Fast Company

“But what if [former head of strategic planning at Royal Dutch Shell] Arie De Geus is wrong in suggesting, in The Living Company, that firms

should aspire to live forever? Greatness is fleeting and, for corporations, it will become

ever more fleeting. The ultimate aim of a business organization, an artist, an athlete or a stockbroker may be to explode in a dramatic

frenzy of value creation during a short space of time, rather than to live forever.”

Kjell Nordström and Jonas Ridderstråle, Funky Business

“The difficulties … arise from the inherent conflict between the need to control existing operations and the need to create the kind of environment that will permit new ideas to flourish—and old ones to die a

timely death. … We believe that most corporations will find it impossible to

match or outperform the market without abandoning the assumption of continuity. … The current apocalypse—the transition from a state of continuity to state of discontinuity—has the same suddenness [as the trauma that beset civilization in

1000 A.D.]”

Richard Foster & Sarah Kaplan, “Creative Destruction” (The McKinsey Quarterly)

Warren Bennis & Patricia Ward Biederman/

Organizing Genius: Great Groups Don’t

Last Very Long!

W.A. Mozart W.A. Mozart 1756 – 17911756 – 1791

HE CHANGED THE WORLDHE CHANGED THE WORLD

AND AND

ENRICHED HUMANITY ENRICHED HUMANITY

Jane Jacobs: Exuberant Variety vs. the Great Blight of Dullness.

F.A. Hayek: Spontaneous Discovery Process. Joseph Schumpeter: the Gales of Creative Destruction.

Huh?

“Quiet, workmanlike, stoic leaders bring about the big

transformations.”--JC

WellingtonNelsonDisraeliChurchill

MontgomeryThatcher

“Humble” Pastels?

T. Paine/P. Henry/A. Hamilton/T. Jefferson/B. FranklinA. Lincoln/U.S. Grant/W.T. Sherman

TR/FDR/LBJ/RR/JFKPatton/Monty/Halsey

M.L. King/C. de Gaulle/M. Gandhi/W. ChurchillPicasso/Mozart/Copernicus/Newton/Einstein/Djarassi/Watson

H. Clinton/G. Steinem/I. Gandhi/G. Meir/M. Thatcher E. Shockley/A. Grove/J. Welch/L. Gerstner/L. Ellison/B. Gates/

S. Jobs/S. McNealy/T. Turner/R. Murdoch/W. Wriston A. Carnegie/J.P. Morgan/H. Ford/S. Honda/J.D. Rockefeller/

T.A. Edison Rummy/Norm/Henry/Wolfie

Elizabeth Cady Stanton/Susan B. Anthony/Martha Cary Thomas/Carrie Chapman Catt/Alice Paul/Anna Elizabeth

Dickinson/Arabella Babb Mansfield/Margaret Sanger

Audie Murphy was the most decorated soldier in WW2.

He won every medal we had to offer, plus 5 presented by Belgium and France. There was one common medal he

never won …

… the Good Conduct medal.

“To Hell With Well Behaved … Recently a young

mother asked for advice. What, she wanted to know, was she to do with a 7-year-old who was obstreperous, outspoken, and

inconveniently willful? ‘Keep her,’ I replied. … The suffragettes refused to be polite

in demanding what they wanted or grateful for getting what they deserved.

Works for me.” —Anna Quindlen/Newsweek

“Men with no vices have very few virtues.” —A. Lincoln

Jim Collins vs. Michael Maccoby

“quiet, workmanlike, stoic”vs.

“larger-than-life leaders”/ “egoists, charmers, risk-takers with big

visions”: Carnegie, Rockefeller, Edison, Ford, Welch, Jobs, Gates

Johannes Kepler: Quiet … humble … stoic??*

*Joshua Gilder & Anne-Lee Gilder, Heavenly Intrigue: Johannes Kepler, Tycho Brahe, and the Murder Behind One of History’s Greatest Scientific Discoveries

“In Italy for 30 years under the Borgias they had warfare, terror, murder,

bloodshed—and produced Michelangelo, da Vinci and the

Renaissance. In Switzerland they had brotherly love, 500 years of democracy and peace, and what did they produce

—the cuckoo clock.”

Orson Welles, as Harry Lime, in The Third Man

II. NEW BUSINESS. NEW TECH.

3. Re-imagine IS/ IT/ the Web:No Room for

Wimps!

“E-commerce is happening the way all the hype said it would. Internet

deployment is happening. Broadband is happening. Everything we ever said about the Internet is happening. And it

is very, very early. We can’t even glimpse IT’s potential in changing the way people work and live.” —Andy Grove

(BusinessWeek/August 2003)

100 square feet

Dell’s OptiPlex Facility

Big Job: 6 to 8 hours.(80,000 per day)

Parts Inventory: 100 square feet.

Productivity!

McKesson 2002-2003: Revenue … +$7B

Employees … +500


“Invisible Supplier Has Penney’s Shirts All

Buttoned Up: From Hong Kong, It Tracks Sales,

Restocks Shelves, Ships Right to the Store.” —Headline, Wall

Street Journal (09.11.03)

“Our entire facility is digital. No paper, no film, no medical records. Nothing. And it’s all integrated—from the lab to X-ray to records to physician order entry. Patients don’t have to wait for anything. The information from the physician’s office is

in registration and vice versa. The referring physician is immediately sent an email telling him his patient has shown up. … It’s wireless in-house. We have 800 notebook computers that are wireless. Physicians can walk around with a computer that’s

pre-programmed. If the physician wants, we’ll go out and wire their house so they can sit on the couch and connect to the

network. They can review a chart from 100 miles away.” —David Veillette, CEO, Indiana Heart Hospital (HealthLeaders/12.2002)

“MIT Everywhere: EVERY LECTURE, EVERY QUIZ, ALL

ONLINE, FOR FREE. MEET THE GLOBAL GEEKS GETTING AN MIT

EDUCATION, OPEN SOURCE-STYLE.”

—Headline/Wired/09.03

“Dawn Meyerreicks, CTO of the Defense Information Systems Agency, made one of the most fateful military calls of the 21st century. After 9/11 … her office

quickly leased all the available transponders covering Central Asia. The implications should change everything about U.S. military thinking in the

years ahead.

“The U.S. Air Force had kicked off its fight against the Taliban with an ineffective bombing campaign, and Washington was anguishing over whether to send in a few Army divisions. Donald Rumsfeld told Gen. Tommy Franks to

give the initiative to 250 Special Forces already on the ground. They used satellite phones, Predator surveillance drones, and GPS- and laser-based

targeting systems to make the air strikes brutally effective.

“In effect, they ‘Napsterized’ the battlefield by cutting out the middlemen (much of the military’s command and control) and working directly with the

real players. … The data came in so fast that HQ revised operating procedures to allow intelligence analysts and attack planners to work directly

together. Their favorite tool, incidentally, was instant messaging over a secure network.”—Ned Desmond/“Broadband’s New Killer App”/Business

2.0/ OCT2002

“The mechanical speed of combat vehicles has not

increased since Rommel’s day, so the difference is all in the

operational speed, faster communications and faster

decisions.” —Edward Luttwak, on the unprecedented pace of the move toward Baghdad

The Real “News”: X1,000,000

TowTruckNet.com

e-piphany

epicurious.com

“flash mobs” (!)

Impact No. 1/ Logistics &

Distribution: Wal*Mart … Dell … Amazon.com …

Autobytel.com … FedEx … UPS … Ryder …

Cisco … Etc. … Etc. … Ad Infinitum.

Autobytel: $400.

Wal*Mart: 13%.Source: BW(05.13.2002)

WebWorld = Everything

Web as a way to run your business’s innardsWeb as connector for your entire supply-demand chain Web as “spider’s web” which re-conceives the industry

Web/B2B as ultimate wake-up call to “commodity producers”

Web as the scourge of slack, inefficiency, sloth, bureaucracy, poor customer data

Web as an Encompassing Way of LifeWeb = Everything (P.D. to after-sales)

Web forces you to focus on what you do bestWeb as entrée, at any size, to World’s Best at Everything

as next door neighbor

“There’s no use trying,” said Alice. “One can’t believe impossible things.”

“I daresay you haven’t had much practice,” said the Queen. “When I was

your age, I always did it for half an hour a day. Why, sometimes I’ve

believed as many as six impossible things before breakfast.”

Lewis Carroll

I’net …

… allows you to dream dreams

you could never have dreamed

before!

“Suppose—just suppose—that the Web is a new world we’re just beginning to inhabit. We’re like the earlier European settlers in the United States, living on the

edge of the forest. We don’t know what’s there and we don’t know exactly what we need to do to find out: Do we pack mountain climbing gear, desert wear, canoes, or all three? Of course while the settlers may not have

known what the geography of the New World was going to be, they at least knew that there was a geography. The Web, on the other hand, has no

geography, no landscape. It has no distance. It has nothing natural in it. It has few rules of behavior and fewer lines of authority. Common sense doesn’t hold

here, and uncommon sense hasn’t yet emerged.” David Weinberger, Small Pieces Loosely Joined

Message: eCommerce is not a technology play! It is a

relationship, partnership, organizational and

communications play, made possible by new

technologies.

Message: There is no such thing as an effective B2B or

Internet-supply chain strategy in a low-trust,

bottlenecked-communication, six-layer

organization.

“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

Brand Inside Rules!

“If I could have chosen not to tackle the IBM culture head-on, I probably

wouldn’t have. My bias coming in was toward strategy, analysis and measurement. In comparison,

changing the attitude and behaviors of hundreds of thousands of people is

very, very hard.” —Lou Gerstner, Who Says Elephants Can’t Dance?

“I came to see in my time at IBM that

culture isn’t just one aspect of the game—it is the game” —Lou Gerstner,

Who Says Elephants Can’t Dance?

Read It Closely: “We don’t sell

insurance anymore. We sell speed.”

Peter Lewis, Progressive

The New Infantry Battalion/New York Times/12.01.2002

“Pentagon’s Urgent Search for Speed.” 270 soldiers (1/3rd normal complement); 140 robotic off-road armored trucks. “Every soldier is a

sensor.” “Revolutionary capabilities.” Find-to-hit: 45 minutes to 15 minutes

… in just one year.

“Hyperlinks subvert hierarchy!”

The Cluetrain Manifesto

[ Words to Live By …

“Hierarchy is an organization with its face

toward the CEO and its ass toward the customer.”

Kjell Nordstrom and Jonas Ridderstrale, Funky Business]

Case: CRM

Amen!

“The Age of the

Never Satisfied Customer”

Regis McKenna

Anne Busquet/ American Express

Not: “Age of the Internet”

Is: “Age of Customer Control”

“The Web enables total transparency. People with

access to relevant information are beginning to challenge any type of

authority. The stupid, loyal and humble customer, employee, patient

or citizen is dead.”


“Parents, doctors, stockbrokers, even military leaders are starting to

lose the authority they once had. There are all these roles premised on access to privileged information. …

What we are witnessing is a collapse of that advantage,

prestige and authority.”Michael Lewis, next

“A seismic shift is underway in healthcare. The Internet is

delivering vast knowledge and new choices to consumers—raising their

expectations and, in many cases, handing them the controls.

[Healthcare] consumers are driving radical, fundamental change.”

Deloitte Research, “Winning the Loyalty of the eHealth Consumer”

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

Psych 101: Strongest Force on Earth?

My need to be in perceived control of my universe!

“CRM has, almost universally, failed

to live up to expectations.”

Butler Group (UK)

No! No! No! FT: “The aim [of CRM] is to make customers feel as they did in the pre-

electronic age when service was more personal.”

CGE&Y (Paul Cole): “Pleasant

Transaction” vs. “Systemic Opportunity.” “Better job

of what we do today” vs. “Re-think overall

enterprise strategy.”

Here We Go Again: Except It’s Real This Time!

Bank online: 24.3M (10.2002); 2X Y2000.

Wells Fargo: 1/3rd; 3.3M; 50% lower

attrition rate; 50% higher growth in balances than off-line; more likely to cross-purchase; “happier and stay

with the bank much longer.”

Source: The Wall Street Journal/10.21.2002

DIM/Self-service Rules!

ATMsCheckoutPhones

SpeedpassThe Web (eBay, Amazon,

Travelocity, Mapquest, banking et al.)HR, Project management, etc.

Minus 1.3M secretaries

IS/IT is strategy!

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

4. Re-imagine Jobs: The White

Collar Bloodbath.

Steel: 75,000,000 tons in ’82 to 102,000,000 tons in ’02. 289,000 steelworkers

in ’82 to 74,000 steelworkers in ’02.

Source: Fortune/11.24.03

108 X 5vs.

8 X 1= 540 vs. 8 (-98.5%)

E.g. …

Jeff Immelt: 75% of “admin, back room, finance” “digitalized” in

3 years.

Source: BW (01.28.02)

“The coefficient of friction associated with the grunge of business

is amazing!”Michael Schrage

“A bureaucrat is an expensive

microchip.”Dan Sullivan, consultant and

executive coach

IBM’s Project

eLiza!** “Self-bootstrapping”/ “Artilects”

Deep Blue Redux*: 2,240 EKGs … 1,120 heart attacks.

Hans Ohlin (50 yr old chief of coronary care, Univ of

Lund/SW) : 620. Lars Edenbrandt’s

software: 738.

*Only this time it matters!

Probable parole violations: Simple model (age, # of previous offenses, type of crime)

beats M.D. shrinks.

100 studies: Statistical formulas > Human

judgment. “In virtually all cases, statistical thinking

equaled or surpassed human judgment.”—Atul Gawande,

Complications

“Unless mankind redesigns itself by changing our DNA through altering our genetic

makeup, computer-generated robots will take

over the world.” – Stephen

Hawking, in the German magazine Focus

“Don’t own nothin’ if you can help it. If you can, rent your

shoes.”F.G.

“Organizations will still be critically important in the world,

but as ‘organizers,’ not ‘employers’!” — Charles Handy

“The virtual corporation is research, development, design, marketing, financing, legal, and

other headquarters functions with few or no manufacturing

capabilities – a company with a head but no body.”

Richard Rosecrance, The Rise of the Virtual State

Ford: “Vehicle brand owner” (“design, engineer, and

market, but not actually make”)

Source: The Company, John Micklethwait & Adrian Wooldridge

“P&G Hires Out Employee Services to IBM” —Burlington Free Press/09.10.03/

on IBM’s 10-year, $400M contract with P&G (P&G farmed out IT to HP in May, Facilities to

Jones Lang LaSalle in June)

“WHERE IS YOUR JOB GOING”: writing software, designing chips,

reading MRIs, processing mortgages, preparing tax returns, managing

computer networks (etc: GE Capital’s 15,000 in Delhi), preparing PP slides

for McKinsey (350 in Chennai), equity analysis of U.S. companies (Morgan

Stanley) …Source: Fortune/11.24.03

No Limits?

“Short on Priests, U.S. Catholics Outsource Prayer to Indian Clergy” —Headline, New York

Times/06.13.04 (“Special intentions,” $.90 for Indians, $5.00 for Americans)

III. NEW BUSINESS. NEW

VALUE PROPOSITION.

5. Re-imagine the Organization: The

Professional Service Firm (“PSF”) Imperative.

Sarah: “ Daddy, what do you do?”

Daddy: “I’m a ‘cost center.’ ”

So what will be the Basic Building

Block of the New Org?

Every job done in W.C.W. is

also done “outside”

…for profit!

Answer: PSF![Professional Service Firm]

Department Head

to …

Managing Partner, HR [IS, etc.] Inc.

TP to HRMAC: You are the …

Rock Stars of the Age of

Talent!

DD$21M

TP to NAPM: You are the …

Rock Stars of the

B2B Age!

“P.S.F.”: Summary

H.V.A. Projects (100%)Pioneer Clients

WOW Work (see below)Hot “Talent” (see below)“Adventurous” “culture”

Proprietary Point of View (Methodology)W.W.P.F. (100%)/Outside Clients (25%++)

When: Now!

BMW’s Designworks/USA:

>50% from outside work

G.M. = The Recruitment and Development of Top Talent.

[Period!]

V.C. = Bets on “Talent.” Bets on Projects. [Period!]

Dept. Head I = Sports G.M.

Dept. Head II = V.C.

eHR*/PCC***All HR on the Web

**Productivity Consulting Center

Source: E-HR: A Walk through a 21st Century HR Department, John Sullivan, IHRIM

Model PSF …

(1) Translate ALL departmental activities into discrete W.W.P.F. “Products.”(2) 100% go on the Web.

(3) Non-awesome are outsourced (75%??).

(4) Remaining “Centers of Excellence” are retained & leveraged to the hilt!

“Typically in a mortgage company or financial services company, ‘risk

management’ is an overhead, not a revenue

center. We’ve become more than that.

We pay for ourselves, and we actually make money for the company.”—Frank Eichorn,

Director of Credit Risk Data Management Group, Wells Fargo Home Mortgage (Source: sas.com)

6. Re-imagine Business’

Basic Value Proposition: PSFs Unbound/ The

“Solutions Imperative.”

Base Case: The Sameness Trap

“While everything may

be better, it is also increasingly the same.”

Paul Goldberger on retail, “The Sameness of Things,” The New York Times

“When we did it ‘right’ it was still pretty ordinary.”

Barry Gibbons on “Nightmare No. 1”

Fight ’til Death!

“I thought, ‘What a dreadful mission I have in life.’ I’d love to get six-thousand restaurants up to

spec, but when I do it’s ‘Ho-hum.’ It’s bugged me ever since. It’s one of the great paradoxes of

modern business. We all know distinction is key, and yet in the last twenty years we have created a plethora of ho-hum products and services. Just

go fly in an airplane. It could be such an enlightening experience. Ho-hum. We swim in an

ocean of ho-hum, and I’m going to fight it. I’m going to die fighting it.”

— Barry Gibbons

Funky Business: “To succeed we must stop being so goddamn

normal. In a winner-takes-all world,

normal = nothing.”

“Customers will try ‘low cost

providers’ … because the Majors have not

given them any clear reason not to.”

Leading Insurance Industry Analyst

“The ‘surplus society’ has a surplus of

similar companies, employing

similar people, with similar educational backgrounds, coming up

with similar ideas, producing

similar things, with similar prices

and similar quality.”


“Companies have defined so much ‘best practice’

that they are now more or less identical.”

Jesper Kunde, Unique Now ... or Never

“This is an essay about what it takes to create and sell something remarkable. It is a plea for originality, passion, guts and daring. You can’t be remarkable by following someone else who’s remarkable. One way to figure

out a theory is to look at what’s working in the real world and determine what the successes have in common. But what could the Four Seasons and

Motel 6 possibly have in common? Or Neiman-Marcus and Wal*Mart? Or Nokia (bringing out new hardware every 30 days or so) and Nintendo

(marketing the same Game Boy 14 years in a row)? It’s like trying to drive

looking in the rearview mirror. The thing that all these companies have in common is that they have nothing in common. They are outliers. They’re on the fringes.

Superfast or superslow. Very exclusive or very cheap. Extremely big or extremely small. The reason its so hard to follow the leader is this: The

leader is the leader precisely because he did something remarkable. And that remarkable thing is now taken—so it’s no longer remarkable when you

decide to do it.” —Seth Godin, Fast Company/02.2003

“We make over three new product announcements a

day. Can you remember

them? Our customers can’t!”Carly Fiorina

09.11.2000: HP bids

$18,000,000,000for

PricewaterhouseCoopersconsulting business!

“These days, building the best server isn’t enough. That’s the

price of entry.”Ann Livermore, Hewlett-Packard

Gerstner’s IBM: Systems Integrator of

choice. Global Services:

$35B. Pledge/’99: Business Partner Charter. 72 strategic partners,

aim for 200. Drop many in-house

programs/products. (BW/12.01).

“[Sam] Palmisano’s strategy is to expand tech’s borders by pushing

users—and entire industries—toward radically different business models.

The payoff for IBM would be access to an ocean of revenue—Palmisano

estimates it at $500 billion a year—that technology companies have never been able to touch.” —Fortune/06.14.04

AT&T: President David Dorman: Back to long distance … but with “bundles of lucrative corporate services” for the likes of Merrill

Lynch, MasterCard, Hyatt. Consumer: Dump 25M subscribers

(50%)—hold on to high enders.

Source: BW/05.20.2002

Is There a There There: The Ericsson Case

1. 50+% Mfg to Solectron/Flextronics2. Substantial R&D to India3. Division for licensing technology4. JV with Sony on “crown jewel” handsets5. Net: “a wireless specialist that depends on services more than manufacturing, on knowledge more than metal”

Source: BW/11.04.02

Flextronics

--$14B; 100K employees; 60% p.a. growth (’93-’00)

-- “contract mfg” to EMS/Electronics Manufacturing Services (design, mfg, logistics,

repair); “total package of outsourcing solutions” (Pamela Gordon, Technology Forecasters)

-- “The future of manufacturing isn’t just in making things but adding value” (3,500 design

engineers)

Source: Asia Inc./02.2004

“Customer Satisfaction” to “Customer Success”

“We’re getting better at [Six Sigma] every day. But we really

need to think about the customer’s profitability. Are customers’

bottom lines really benefiting from what we provide them?”

Bob Nardelli, GE Power Systems

“We want to be the air traffic

controllers of electrons.”

Bob Nardelli, GE Power Systems

Keep In Mind: Customer

Satisfaction versus

Customer

Success

Nardelli’s goal ($50B to $100B by 2005):

“… move Home Depot beyond selling ‘goods’ to selling ‘home services.’ …

He wants to capture home improvement dollars wherever and

however they are spent.” E.g.: “house calls” (At-Home Service: $10B by ’05?) … “pros shops” (Pro Set) … “home project management”

(Project Management System … “a deeper selling relationship”).


E.g. …

UTC/Otis + Carrier: boxes to “integrated building systems”

Leased AC: Units of “Coolth”

New York-Presbyterian: 7-year, $500M consulting

(generic) and equipment contract with GE Medical

Systems


Staples

New CEO Ron Sargent: 2X to $20B, in face of Wal*Mart (et al.) via delivery and other

servicesSource: BusinessWeek/08.03

John Deere Landscapes: “This is our

future.”

“UPS wants to take over the sweet spot in the endless loop

of goods, information and capital that all the packages

[it moves] represent.”ecompany.com/06.01 (E.g., UPS Logistics

manages the logistics of 4.5M Ford vehicles, from 21 mfg. sites to 6,000 NA dealers)

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

for Corporate America” —Headline/BW/07.19.2004

“SCS”/Supply Chain Solutions: 750 locations;

$2.5B; fastest growing division; 19 acquisitions,

including a bank

Source: Fast Company/02.04

“No longer are we only an insurance provider. Today,

we also offer our customers the products and services that help them

achieve their dreams, whether it’s financial security, buying a car, paying

for home repairs, or even taking a dream vacation.”—Martin Feinstein, CEO,

Farmers Group

“VISIONS OF A BRAND-NAME OFFICE EMPIRE. Sam Zell is not a man plagued by self doubt. Mr. Zell controls public

companies that own nearly 700 office buildings in the United States. … Now Mr. Zell says he will

transform the real estate market by turning those REITs into national brands. … Mr. Zell

believes [clients] will start to view those offices as something more than a commodity chosen chiefly by price and location.” –New York Times

(12.16.2001)

“ ‘Architecture’ is becoming a commodity.

Winners will be ‘Turnkey Facilities Management’

providers.”SMPS Exec

“We are a ‘real estate facilities consulting’ organization, not just

an ‘interior design’ firm.”

Jean Bellas, founder, SPACE (from SMPS Marketer)

Omnicom: 60% (of

$7B) from marketing services

And the Winners Are …

Televisions –12%Cable TV service +5%

Toys -10%Child care +5%

Photo equipment -7%Photographer’s fees +3%

Sports Equipment -2%Admission to sporting event +3%

New car -2%Car repair +3%

Dishes & flatware -1%Eating out +2%

Gardening supplies -0.1%Gardening services +2%


IBM/Q3/10.15.03/Rev: +5%

Services/Consulting: +11%Software: +5%Hardware: -5%

PCs: -2%Technology/Chips: -33%

FEES! FEES! FEES!

—Cover Story, BW/09.29.03

Turnkey Nation/s

HP … Sun … Farmers Group … Northwestern Mutual Financial Network …

IBM … AT&T … Ericsson … GE Power Systems … GE Industrial Systems … Ford … Siemens … Home Depot …

Deere … UTC Otis … UTC Carrier … UPS … Springs Industries … RCI …

Equity Office Properties … Omnicom … India … Singapore … Etc.

Core Logic: (1) 108X5 to 8X1/ eLiza/ 100sf. (2)

Dept. to PSF/ WWPF. (3) V.A. via PSFs Unbound/ “Solutions”/ “Customer

Success.”

6A. Re-imagine Organizational Barriers: The

Solutions25.**NO MORE “SILOS.” NO MORE

“STOVEPIPES.”

1. It’s the (OUR!) organization, stupid!2. Friction free! 3. No STOVEPIPES!4. “Stovepiping” is a F.O.—Firing Offense.5. ALL on the web! (ALL = ALL.)6. Open access!6. Project Managers rule! (E.g.: Control the purse strings and evals.)7. VALUE-ADDED RULES! (Services Rule.) (Experiences Rule.) (Brand Rules.)8. SOLUTIONS RULE! (We sell SOLUTIONS. Period. We sell PRODUCTIVITY & PROFITABILITY. Period.)9. Solutions = “Our ‘culture.’ ”10. Partner with B.I.C. (Best-In-Class). Period.

“The organizations we created have become tyrants. They have taken

control, holding us fettered, creating barriers that hinder rather than help our businesses. The lines that we drew on our neat organizational diagrams have turned into walls

that no one can scale or penetrate or even peer over.” —Frank Lekanne Deprez &

René Tissen, Zero Space: Moving Beyond Organizational Limits.

“Once devised in Riyadh, the tasking order took hours to get to the Navy’s six aircraft carriers—because the

Navy had failed years earlier to procure the proper communications gear that would have connected the

Navy with its Air Force counterparts. … To compensate for the lack of communications capability, the Navy was forced to fly a daily cargo mission from

the Persian Gulf and Red Sea to Riyadh in order to pick up a computer printout of the air mission tasking

order, then fly back to the carriers, run photocopy machines at full tilt, and distribute the documents to the air wing squadrons that were planning the next

strike.” –Bill Owens, Lifting the Fog of War

Duh???*: “We’ve come up with a solution. … We’ve begun to create a form of

communications that is much better than we had before, and that’s allowed us to gather better data. We’ve finally realized

that we have an interplay with other hospitals and with pre-hospital.”—Dr. Ben Honigman, ER, U. Colorado Hospital, on “diverts” (Denver

Post/05.05.02)

*Internet + Data + Open data exchange + Barrier busting

12. All functions contribute equally—IS, HR, Finance, Purchasing, Engineering, Logistics, Sales, Etc.13. Project Management can come from any function.14. WE ARE ALL IN SALES. PERIOD.15. We all invest in “wiring” the customer organization.16. WE ALL “LIVE THE BRAND.” (Brand = Solutions. That MAKE MONEY FOR OUR CUSTOMER- PARTNER.)17. We use the word “PARTNER” until we all want to barf!18. We NEVER BLAME other parts of our organization for screw-ups.19. WE AIM TO REINVENT THIS INDUSTRY!20. We hate the word-idea “COMMODITY.”

21. We believe in “High tech, High touch.”22. We are DREAMERS.23. We deliver . (PROFITS.) (CUSTOMER SUCCESS.)24. If we play the “SOLUTIONS GAME” brilliantly, no one can touch us!25. Our TEAM needs 100% I.C.s (Imaginative Contributors). This is the ULTIMATE “All Hands” affair!

KEY WORDS: Partners with our Customers in creating Memorable, Value-added Solutions/ Successes/ Experiences.

WHICH REQUIRES: Total Enterprise Responsiveness … beyond functional walls.

IV. NEW BUSINESS. NEW

BRAND.

7. Re-imagine Enterprise as

Theater I: A World of Scintillating “Experiences.”

“Experiences are as distinct from services as services are from

goods.”Joseph Pine & James Gilmore, The Experience Economy:

Work Is Theatre & Every Business a Stage

“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

“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

“Guinness as a brand is all about community.

It’s about bringing people together and sharing

stories.”—Ralph Ardill, Imagination, in re Guinness Storehouse

Experience: “Rebel Lifestyle!”

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

through small towns and have people be afraid of him.”

Harley exec, quoted in Results-Based Leadership

WHAT CAN BROWN DO FOR YOU?

“When Pete Rozelle ran the league, it was a

football business and a good one. Now it’s truly

an entertainment business.” —Paul Much,

Investment Advisor

The “Experience Ladder”

Experiences Services

Goods Raw Materials

1940: Cake from flour, sugar (raw materials economy): $1.00

1955: Cake from Cake mix (goods economy): $2.00

1970: Bakery-made cake (service economy): $10.00

1990: Party @ Chuck E. Cheese (experience economy) $100.00

Message:

“Experience” is the

“Last 80%”

P.S.: “Experience” applies to all work!

1940: Cake from flour, sugar (raw materials economy): $1.00

1955: Cake from Cake mix (goods economy): $2.00

1970: Bakery-made cake (service

economy): $10.001990: Party @ Chuck E. Cheese

(experience economy) $100.00

Bob Lutz: “I see us as being in the art business. Art,

entertainment and mobile sculpture, which,

coincidentally, also happens to provide transportation.”

Source: NYT 10.19.01

“Lexus sells its cars as containers for our

sound systems. It’s marvelous.”—Sidney Harman/

Harman International

LAN Installation Co.

to

Geek Squad (2% to 30%/Minn.)

From “Service’ to “Cause”

7X. 730A-800P. F12A.*

*Plus: WOW Department’” “Kill a Stupid Rule” contests, etc. 2001R: 34%; P: 29%; ’90-’00: 2,048%. Commerce

Bank/NJ ($10B). Source: FC05.02.

It’s All About EXPERIENCES: “Trapper” to “Wildlife Damage-control Professional”

Trapper: <$20 per beaver pelt.

WDCP: $150/“problem beaver”; $750-$1,000 for flood-control

piping … so that beavers can stay.


Moving Companies

WSJ/08.2003: “In Texas, They’ll fill your empty fridge with brie and

wine. An outfit in New York promises quick high-speed Internet

hookup. And when Allied Van Lines finishes unloading your couch, they’ll have a feng shui

expert figure out the right spot. …”

Duet … Whirlpool … “washing machine” to “fabric care system” … white goods: “a sea of

undifferentiated boxes” … $400 to $1,300 … “the Ferrari of washing machines” …

consumer: “They are our little mechanical buddies. They have personality. When they are

running efficiently, our lives are running efficiently. They are part of my family.” …

“machine as aesthetic showpiece” … “laundry room” to “family studio” / “designer laundry

room” (complements Sub-Zero refrigerator and home-theater center)

Source: New York Times Magazine/01.11.2004

1997-2001

>$600: 10% to 18%$400-$600: 49% to 32%

<$400: 41% to 50%

Source: Trading Up, Michael Silverstein & Neil Fiske

“A Bedtime Story, for $20,000”/CNN

Int’l Sleep Products Assn: 20% of matresses sold in 2003 >$1,000 vs. 15% in 2000. Fastest growing segment: $5,000 to

$20,000.

ISPA exec: “The Baby Boomers are getting older, and more affluent. As you get older, your body changes and those aches and pains develop. So they have the money

and the inclination to upgrade.”

“Clients want either the best or

the least expensive; there

is no in between.” —John Dijulius, Secret

Service

“Car designers need to create a story. Every car provides an

opportunity to create an adventure. …“The Prowler makes you smile. Why? Because it’s focused. It has a plot, a

reason for being, a passion.”

Freeman Thomas, co-designer VW Beetle; designer Audi TT

Hmmmm(?): “Only” Words …

StoryAdventure

Smile Focus

PlotPassion

First Step (?!): Hire a theater director, as

a consultant or FTE!

Words!

— Magician of Magical Moments— Maestro of Moments of Truth— Recruiter of Raving Fans— Impresario of First Impressions— Wizard of WOW— Captain of Brilliant Comebacks— Director of Electronic Customer Experiences— Conductor of Customer Intimacy— King of Customer Community— Queen of Customer Retention— CEO of Ownership Experience— Managing Director of After-sales Experience

Experience …

Cirque du Soleil

DO YOU MEASURE UP?*

*If not, why not?

“Most executives have no idea how to add value to a market in the metaphysical

world. But that is what the market will cry out for in the future. There is no lack of ‘physical’ products to

choose between.”

Jesper Kunde, Unique Now ... or Never [on the excellence of Nokia, Nike, Lego, Virgin et al.]

Extraction & Goods: Male dominance

Services & Experiences: Female

dominance

“Women don’t buy

brands. They join them.”

EVEolution

The “Experience Ladder”

Experiences Services

Goods Raw Materials

<TGWvs.

>TGR

Dell + IBM + Harley-Davidson*

= Magic!*Frictionless throughout Supply-chain + EncompassingSolutions

+ Scintillating Experience

8. Re-imagine Enterprise as

Theater II: Embracing the

“Dream Business.”

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

“A shipping clerk earning $25,000 a year treats herself to silk pajamas at Victoria’s Secret. A dual-income couple earning

$125,000 orders a $4,000 Viking range for their townhouse even though the developer offered to throw in a perfectly serviceable

generic range at no extra charge. These purchases reflect an important worldwide behavioral shift. Consumers today are willing to pay a significant premium for goods and services that are emotionally important to them and that deliver the perceived values of quality, performance and engagement.

But in other categories that aren’t emotionally important, they become bargain hunters: a passionate Mercedes driver will shop at Target every weekend; a construction worker who

splurges on a $3,000 set of Callaway golf clubs will buy store brand groceries.” —Trading Up: The New American Luxury/Michael

Silverstein & Neil Fiske

Common Products “Dream” Products

Maxwell House StarbucksBVD Victoria’s SecretPayless FerragamoHyundai FerrariSuzuki Harley-DavidsonAtlantic City AcapulcoNew Jersey CaliforniaCarter KennedyConners PeleCNN Millionaire

Source: Gian Luigi Longinotti-Buitoni

The Marketing of Dreams (Dreamketing)

Dreamketing: Touching the clients’ dreams.Dreamketing: The art of telling stories

and entertaining.Dreamketing: Promote the dream, not

the product.Dreamketing: Build the brand around

the main dream.Dreamketing: Build the “buzz,” the

“hype,” the “cult.”Source: Gian Luigi Longinotti-Buitoni

Building the Creative Organization

Choose a creator: The cultural leader who gives the company an aesthetic point of view.Hire eclectically: Hire collaborators with different cultures and past histories in order to balance rigor with emotion.Prepare vertically: Develop a rigorous understanding of the product and the client.Develop horizontally: Promote curiosity in unrelated disciplines.Lead emotionally: Engender passionate dedication through vision and freedom.Build for the long haul: Creativity requires a lifetime commitment.


Constantly Magnify Perceived Value

Maximize your value-added by fulfilling the dreams of your clients.

Only invest in what is valuable for your client.Don’t let the short-term results weaken the

long-term value of your brand.Balance rigorous control of the financial endeavor

with the emotional management of your brand.Build a financial structure that allows risk-taking:

NO RISKS—NO DREAMS.Establish long-term “price power” in order to avoid

the trap of the commodity product.


(Revised) Experience Ladder

Dreams Come True Awesome Experiences

SolutionsServicesGoods

Raw Materials

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

HORCHOW.COMFurniture. Accessories. Dreams.

“The Ritz-Carlton experience enlivens the

senses, instills well-being, and fulfills even

the unexpressed wishes and needs of our guests.”

— from the Ritz-Carlton Credo

Safe, On-time and ...

“We defined personality as a market niche. We seek to

amaze, surprise, entertain.”— Herb Kelleher, SWA / LUV

“The sun is setting on the Information Society—even before we have fully adjusted to its demands as individuals and as

companies. We have lived as hunters and as farmers, we have worked in factories and now we live in an information-based society whose icon is the computer. We stand facing the fifth kind of society: the Dream Society. … The Dream Society is emerging this very instant—the shape of the future is visible today. Right now is the time for decisions—before the major

portion of consumer purchases are made for emotional, nonmaterialistic reasons. Future products will have to appeal to our hearts, not to our heads. Now is the time to add emotional

value to products and services.” —Rolf Jensen/The Dream Society:How the Coming Shift from Information to Imagination Will Transform Your Business

“In Denmark, eggs from free-range hens have conquered over 50 percent of the market. Consumers do not want hens to live their lives in small, confining cages. They are willing to pay 15 percent to 20 percent more for the story about animal ethics. This is classic Dream Society logic. Both kind of eggs are similar in

quality, but consumers prefer eggs with the better story. After we debated the issue and stockpiled 50

other examples, the conclusion became evident: Stories and tales speak directly to the heart rather than the brain. After a century where society was marked by

science and rationalism, the stories and values are returning to the scene.” —Rolf Jensen/The Dream Society: How the Coming Shift from Information to Imagination Will Transform Your Business

Six Market Profiles

1. Adventures for Sale2. The Market for Togetherness, Friendship and Love3. The Market for Care4. The Who-Am-I Market5. The Market for Peace of Mind6. The Market for Convictions

Rolf Jensen/The Dream Society: How the Coming Shift from Information to Imagination Will Transform Your Business

New Market Realities

Selling Dreams: How to Make Any Product Irresistible, Gian Luigi Longinotti-Buitoni

The Dream Society: How the Coming Shift from Information to Imagination Will Transform Your

Business, Rolf Jensen

Trading Up: The New American Luxury, Michael Silverstein & Neil Fiske

9. Re-imagine the “Soul” of Enterprise:

Design Rules!

Design Myths.

Unconventional [Design] Messages

Not about ... “Lumpy Objects”!

Not about ... $79,000 objects

The I.D. [International Design] Forty*

Airstream … Alfred A. Knopf … Apple Computer … Amazon.com …

Bloomberg … Caterpillar … CNN … Disney … FedEx … Gillette … IBM … Martha Stewart … New Balance …

Nickelodeon … Patagonia … The New York Yankees … 3M … Etc.

* List No. 1, 1999

Unconventional [Design] Messages

Not about ... “Lumpy Objects”!

Not about ... $79,000 objects

Design Transforms even the [Biggest] Corporations!

TARGET … “the champion of America’s new design democracy” (Time) “Marketer of the Year 2000”

(Advertising Age)

Lady Sensor, Mach3, and …

$70M on developing the OralB CrossAction toothbrush

23 patents, including 6 for the packaging

Source: www.ecompany.com [06.00]

Design2002

LISTERINE’s …

PocketPaks

Westin’s …

Heavenly Bed

Design’s place in the universe.

And Tomorrow …

“Fifteen years ago companies competed on price. Now it’s

quality. Tomorrow it’s design.”

Robert Hayes

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

“Design is treated like a religion at

BMW.”Fortune

“The new Beetle fails at most categories. The only

thing it doesn’t fail in is

drop-dead charm.”Jerry Hirshberg, Nissan Design International

Object of Desire!

“Every now and then, a design comes along that radically changes the way we think about a particular object. Case in

point: the iMac. Suddenly, a computer

is no longer an anonymous box. It is a sculpture, an object of desire, something that you look at.”

Katherine McCoy & Michael McCoy, Illinois Institute of Technology

“The good 10 percent of American product design comes

out of big-idea companies that don’t believe in talking to the

customer. They're run by passionate maniacs who make everybody’s life miserable until

they get what they want.”

Bran Ferren, Applied Minds/Wired 1-2001

“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

Check Out the Language:

“Tomorrow it’s design …”“Design is the only thing …”

“Design is … religion ...”“Drop-dead charm …”“Object of desire …”

“Passionate maniacs …” “Fundamental soul …”

Bottom Line.

Design “is” … WHAT & WHY I LOVE.

LOVE.

I LOVE my ZYLISS Garlic Peeler!

All Time No.1 (TP)

Ziplocs

Design “is” … WHY I

GET MAD. MAD.

Wanted: THE DESIGNER OF MY

RADIO SHACK PHONE. Major

Reward!

Design is never neutral.

Hypothesis: DESIGN is the principal difference between love and

hate!

THE BASE CASE: I am a design fanatic. Though not “artistic,” I love “cool stuff.” But it goes [much]

further, far beyond the personal. Design has become a professional obsession. I SIMPLY BELIEVE THAT DESIGN PER SE IS THE PRINCIPAL

REASON FOR EMOTIONAL ATTACHMENT [or detachment] RELATIVE TO A PRODUCT OR

SERVICE OR EXPERIENCE. Design, as I see it, is

arguably the #1 DETERMINANT of whether a product-service-experience stands out … or doesn’t.

Furthermore, it’s another “one of those things” that damn few companies put – consistently – on the

front burner.

Message (?????): Men cannot design for women’s

needs.

“Perhaps the macho look can be interesting … if you

want to fight dinosaurs. But now to survive you need intelligence,

not power and aggression. Modern intelligence means

intuition—it’s female.”

Source: Philippe Starck, Harvard Design Magazine (Summer 1998)

Step No. 1:

NOTEBOOK POWER!

[Start recording the awesome & the awful]

User …

STOP BLAMING

YOURSELF! (Don

Norman/Design of Everyday Things)

“Sometimes I have episodes of wild fury in rental cars. It’s not road

rage. It’s more like design rage.”

Susan Casey, www.ecompany.com

The Designer’s Ring

“For years I thought that Dante should have established a ‘designer’s ring’ in his Hell. If any

designer’s product raised a blister, caused a bruise, ripped a stocking, or caused any of the

thousand things that frustrate us with the products we use, that designer would be assigned the designer’s ring in Hell and forced to use that product for all of eternity.” — James Pirki, designer

and professor, Syracuse University

15 “Leading” Biz Schools

Design/Core: 0Design/Elective: 1Creativity/Core: 0

Creativity/Elective: 4Innovation/Core: 0

Innovation/Elective: 6

Source: DMI/Summer 2002

“There is little evidence that mastery of the knowledge

acquired in business schools enhances people’s careers, or

that even attaining the MBA credential itself has much effect on graduates’ salaries or career attainment.” —Jeffrey Pfeffer (tenured professor,

Stanford GSB/2004)

9A. Re-imagine the Infrastructure of

Enterprise: Design = “Beautiful” Systems.

Fred S.’s “mediocre” thesis. Herb K.’s

napkin.

Great design = One-page

business plan (Jim Horan)

The One-page Proposal: How to Get Your Business Pitch onto One Persuasive Page —Patrick Riley (“Why not one and a half? Why not two? Sorry, it’s one or nothing. Once the proposal extends past the first page,

the battle is lost.”)

There Are Lawyers … and Then There Are Lawyers: John De Laney/ICM

ANYTHING TRULY IMPORTANT CAN BE

BOILED DOWN TO 1/3RD PAGE.

K.I.S.S.: Gordon Bell (VAX

daddy): 500/50. Chas.

Wang (CA): Behind schedule?

Cut least productive 25%.

Systems: Must have. Must

hate. / Must design. Must un-

design.

Mgt. Team

includes … EVP (S.O.U.B.)

Executive Vice President, Stomping Out Unnecessary Bullshit

First Steps: “Beauty Contest”!

1. Select one form/document: invoice, air bill, sick leave policy, customer returns-claim form.

2. Rate the selected doc on a scale of 1 to 10 [1 = Bureaucratica Obscuranta/ Sucks; 10 = Work

of Art] on four dimensions: Beauty. Grace. Clarity. Simplicity.

3. Re-invent!4. Repeat, with a new selection, every 15 working

days.

“Beautiful”“Aesthetic Triumph”

“Breathtaking”

Was

“Deposits may be made by a minor and withdrawals thereof may be made by a

minor without the consent of a parent or guardian, neither of whom, in that

capacity, shall have any right to attach or interfere in any manner with such

deposits or withdrawals.”

Is

“Minors may make deposits and withdrawals from their accounts without the

consent or interference of a parent or guardian.”

Was

“This Grievance Procedure must be used if the nature of the complaint deals with the quality of services given to the Member, including

complaints about waiting times, physician demeanor and behavior, or adequacy of facilities (as opposed to whether or not a particular

service is a Covered service and what amount, if any, should be paid). Also, this Grievance Procedure will be applied under all circumstances to any Universal Healthcare supplemental products which the Member

may have bought independently from this SeniorPlus plan. If the nature of the Member’s complaint deals with a Covered Service stated

in this SeniorPlus or the level of payment associated with this plan,

please refer to the Medicare Appeals procedure, stated in Section X.”

Source: Siegel & Gale

Is

“If you have a complaint about quality of service received, waiting times, physician behavior, or the adequacy of medical facilities, please use our grievance process.

“lf you have a complaint about coverage or payment, please use the Medicare Appeals procedure (see Section

X).”

Source: Siegel & Gale

10. Re-imagine the Fundamental Selling Proposition: “It” all

adds up to …

THE BRAND.

The Heart of Branding …

“WHO ARE WE?”

“WHAT’S OUR

STORY?”

“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

“Apple opposes, IBM solves, Nike exhorts, Virgin enlightens,

Sony dreams, Benetton

protests. … Brands are not nouns but verbs.”

Source: Jean-Marie Dru, Disruption

Message: ALL ‘BUSINESS MODELS’

ARE IN FACT … BRAND

STATEMENTS!

DO THE HOUSEKEEPERS & CLERKS “BUY

IT”? [ARE YOU V-E-R-Y SURE?]

“EXACTLY HOW ARE WE

DRAMATICALLY DIFFERENT?”

1st Law Mktg Physics: OVERT BENEFIT (Focus: 1 or 2 > 3 or 4/“One Great Thing.” Source #1: Personal Passion)

2ND Law: REAL REASON TO BELIEVE (Stand & Deliver!)

3RD Law: DRAMATIC DIFFERENCE (Execs Don’t Get It:

See the next slide.)

Source: Jump Start Your Business Brain, Doug Hall

2 Questions:

“How likely are you to purchase this new product or service?” (95% to 100% weighting by execs)

“How unique is this new product or service?” (0% to 5%*)

*No exceptions in 20 years – Doug Hall, Jump Start Your Business Brain

“If you are not one of the major players, you have to take a position that is contrary to the global trend.”

“We have to ask ourselves: How can we be different? We have to find out what we can be best in the world at.”

Source: IBM Business Consulting Services/The Global CEO Study 2004

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

want to be considered the only ones who do

what you do.”

Jerry Garcia

“A great company is defined by the

fact that it is not compared

to its peers.”Phil Purcell, Morgan Stanley

Brand = You Must Care!

“Success means never letting the competition

define you. Instead you have to define yourself based on a point of view you care deeply

about.” Tom Chappell, Tom’s of Maine

“WHY DOES IT MATTER TO

THE CLIENT?”

“EXACTLY HOW DO I PASSIONATELY CONVEY THAT

DRAMATIC DIFFERENCE TO THE

CLIENT ?”

“Brand Promise” Exercise: (1) Who Are WE? (poem/novella/song, 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) Try ’em on a

skeptical Client!

Rules of “Radical Marketing”

Love + Respect Your Customers!Hire only Passionate Missionaries!Create a Community of Customers!

Celebrate Craziness!Be insanely True to the Brand!

Sam Hill & Glenn Rifkin, Radical Marketing (e.g., Harley, Virgin, The Dead, HBS, NBA)

Branding: Is-Is Not “Table”

TNT is not: TNT is: TNT is not:

Juvenile Contemporary Old-fashioned

Mindless Meaningful Elitist

Predictable Suspenseful Dull

Frivolous Exciting Slow

Superficial Powerful Self-important

Message …

Is Not >> Is

“Salt is salt is salt. Right? Not when it

comes in a blue box with a

picture of a little girl carrying an umbrella. Morton International continues to

dominate the U.S. salt market even though it charges more for a product that is

demonstrably the same as many other products

on the shelf.”

Tom Asaker, Humanfactor Marketing

What Can [Can’t] Be Branded?“Branding is not a problem if you have the right mentality. You go to your team and

you pin up a $200 Swiss Army Watch. Competing in the ridiculously crowded

sub-$200 watch market, they made it into a brand name, named after the most

irrelevant and useless thing in history [the Swiss Army]. And you say, ‘Gang, if they

can do it, we can do it.’ ”

Barry Gibbons

V. NEW BUSINESS.

NEW MARKETS.

11. Re-imagine the Customer I: Trends Worth

Trillion$$$ …

Women Roar.

?????????

Home Furnishings … 94%Vacations … 92% (Adventure Travel … 70%/ $55B travel equipment)

Houses … 91%D.I.Y. (major “home projects”) … 80%

Consumer Electronics … 51% (66% home computers)

Cars … 68% (90%)All consumer purchases … 83%

Bank Account … 89%Household investment decisions … 67%Small business loans/biz starts … 70%

Health Care … 80%

????

80%

Riding Lawnmowers

2/3rds working women/50+% working wives > 50%

80% checks61% bills

53% stock (mutual fund boom)

43% > $500K95% financial decisions/

29% single handed

1970-1998

Men’s median income: +0.6%Women’s median income: + 63%

Source: Martha Barletta, Marketing to Women

$5+T > Japan

10M/28M/$3.6T > Germany

Business Purchasing Power

Purchasing mgrs. & agents: 51%HR: >>50%

Admin officers: >50%


Women-owned Bus.

U.S. employees > F500 employees worldwide


New golfers … 37%Basketball … 13.5M

1 in 27 (’70) … 1 in 3 (’96)

1874 … Jock Strap1977 … Jogbra

1977 ... 25K

1996 … 42M

Yeow!

1970 … 1%

2002 … 50%

91% women: ADVERTISERS DON’T

UNDERSTAND US. (58% “ANNOYED.”)

Source: Greenfield Online for Arnold’s Women’s Insight Team (Martha Barletta, Marketing to Women)

Carol Gilligan/ In a Different Voice

Men: Get away from authority, familyWomen: Connect

Men: Self-orientedWomen: Other-oriented

Men: RightsWomen: Responsibilities

Men: Individual perspective. “Core unit is ‘me.’ ”

Pride in self-reliance.

Women: Group perspective. “Core unit is ‘we.’ ” Pride in team

accomplishment.


FemaleThink/ Popcorn

“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.”

“Men seem like loose cannons. Men always move faster through a store’s

aisles. Men spend less time looking. They usually don’t like asking where things are.

You’ll see a man move impatiently through a store to the section he wants,

pick something up, and then, almost abruptly he’s ready to buy. For a

man, ignoring the price tag is almost a sign of virility.”

Paco Underhill, Why We Buy* (*Buy this book!)

“Shopping: A Guy’s Nightmare or a Girl’s Dream Come True?”

“Buy it and be gone”vs.

“Hang out and enjoy the experience”

Source: The Charleston [WV] Gazette/06.22.2002

How Many Gigs You Got, Man?

“Hard to believe … Different criteria”

“Every research study we’ve done indicates that women really care about the relationship with their

vendor.”

Robin Sternbergh/ IBM

Women's View of Male Salespeople

Technically knowledgeable; assertive; get to the point; pushy;

condescending; insensitive to women’s needs.

Source: Judith Tingley, How to Sell to the Opposite Sex (Martha Barletta, Marketing to Women)

Women as Healthcare Decision Makers

— read vociferously— want choices

— value convenience— look for small signs of

sensitivity (gowns that close)

Source: Cheryl Stone, Rynne Marketing Group

Women and Healthcare

— Women are more dissatisfied— Women are frustrated by the way they

are treated and spoken to by physicians

— Women seek more information— Women are more pressed for time

— Women make most healthcare decisions and purchases

Source: Patricia Braus, Marketing Health Care to Women

Women and Financial Advisors

Women want ...— a plan

— to be listened to— to read about it and think about it

Women do not want ...— a high-pressure sales pitch

Source: Kathleen Boyd, SVP, Wheat First Butcher Singer

(now part of Wachovia Securities)

Read This: Barbara & Allan Pease’s

Why Men Don’t Listen & Women Can’t Read Maps

“It is obvious to a woman when another woman is upset, while a man generally has to physically witness

tears or a temper tantrum or be slapped in the face before he even has a clue that anything is going on. Like most female mammals, women are equipped with far more finely tuned

sensory skills than men.” Barbara & Allan Pease, Why Men Don’t Listen & Women Can’t Read Maps

“Resting” State: 30%, 90%: “A woman knows her children’s

friends, hopes, dreams, romances, secret fears, what they are

thinking, how they are feeling. Men are vaguely aware of some short people also living in the house.”

Barbara & Allan Pease, Why Men Don’t Listen & Women Can’t Read Maps

“As a hunter, a man needed vision that would allow him to zero in on targets in the distance … whereas a woman needed eyes

to allow a wide arc of vision so that she could monitor any predators sneaking up on the nest. This is why modern men can find their way effortlessly to a distant pub,

but can never find things in fridges, cupboards or drawers.”


“Female hearing advantage contributes significantly to what is

called ‘women’s intuition’ and is one of the reasons why a woman can read between the lines of what people say. Men, however, shouldn’t despair.

They are excellent at imitating animal sounds.”


Senses

Vision: Men, focused; Women, peripheral.

Hearing: Women’s discomfort level I/2 men’s.

Smell: Women >> Men.Touch: Most sensitive man <

Least sensitive women.


Sensitivity to differences: Twice as many card stacks.

More “contextual,” “holistic.”

“People powered”: Age 3 days, baby girls 2X eye contact.


“When a woman is upset, she talks emotionally to her friends; but an upset man rebuilds a motor or

fixes a leaking tap.”Barbara & Allan Pease, Why Men Don’t Listen &

Women Can’t Read Maps

Stress* ** Men: Fight or flee

Women: Seek the company of friends

*Source: UCLA, “Female Response to Stress: Tend and Befriend, Not Fight or Flight”/Psychological Review**90% of stress research: men

“Women speak and hear a language of connection and intimacy, and men

speak and hear a language of status and independence. Men communicate to obtain information, establish their

status, and show independence. Women communicate to create

relationships, encourage interaction, and exchange feelings.”

Judy Rosener, America’s Competitive Secret

“The Hollywood scripts that men write tend to be direct and

linear, while women’s compositions have many

conflicts, many climaxes, and many endings.”

Helen Fisher, The First Sex: The Natural Talents of Women and How They Are

Changing the World

“I only really understand myself, what I’m really thinking and

feeling, when I’ve talked it over with my circle of female friends. When days go by without that connection, I feel like a radio playing in an empty room.”

Anna Quindlen

“Women are more comfortable talking or

thinking about people and relationships, while men

prefer to contemplate things.” —research reported in the New York

Times (08.10.2003)

“Men and women have different styles of fearing. Men’s fears focus around

what we experience as our independence, and women’s around

loss of significant relationships. We fear engulfment, anything that

threatens to rob us of our power and control. Women most fear

abandonment, isolation, loss of love.” —Sam Keen, Fire in the Belly (see also Susan Rice)

Editorial/Men: Tables, rankings.*

Editorial/Women: Narratives that cohere.*

*Redwood (UK)

“Where the Girls Are: They’re Online, Solving Puzzles and Making Up Characters in Narrative-

driven Games” —Headline/WSJ/10.28

Initiate Purchase

Men: Study “facts & features.”

Women: Ask lots of people for input.


Read This Book …

EVEolution: The Eight Truths of Marketing to Women

Faith Popcorn & Lys Marigold

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

The New New Jiffy Lube

“In the male mold, Jiffy Lube was going all out to deliver quick, efficient service. But, in the

female mold, women were being turned off by the ‘let’s get it fixed fast, no conversation

required’ experience.”

New JL: “Control over her environment. Comfort in the service setting. Trust that her car

is being serviced properly. Respect for her intelligence and ability.”

EVEolution

“Women don’t buy

brands. They join them.”

EVEolution

Purchasing Patterns

Women: Harder to convince; more loyal once convinced.

Men: Snap decision; fickle.


2.6 vs. 21

Cents & Sensibility

“Our advisory sessions [with women] changed from a purely

analytical, male approach to something that starts with the heart

and ends with the figures.”

Lowe’s …

Gets it. 1989:

13%/“lumber shop” … 2002: >50%

“War has broken out over your home-improvement dollar, and Lowe’s has

superpower Home Depot on the defensive. It’s not-so-

secret ploy: Lure women.” —Forbes.com

“Home Depot is still very much a guy’s chain. But women, according to Lowe’s

research, initiate 80 percent of all home-improvement purchase decisions,

especially the big ticket orders like kitchen cabinets, flooring and bathrooms. ‘We

focused on a customer nobody in home improvement has focused on. Don’t get me

wrong, but women are far more discriminating than men,’ says CEO Robert

Tillman, 59, a Lowe’s lifer.” —Forbes.com

“Women’s Work: Do-it-yourself has become do-it-herself, and toolmakers are taking notice” —Headline/San Francisco

Chronicle/08.03

Tomboy Tools. E.g.:

smaller, lighter in weight. Tupperware “party” model.

“Darcy Winslow is a leading figure in Nike Goddess, a

companywide grassroots team whose goal is a once-and-for-all shift in how a high-testosterone outfit sells to, designs for, and

communicates with women.” —Fast

Company/08.2002

“Women weren’t comfortable in our stores. So I figured out where they would be comfortable—most likely their own homes. The [first

Nike Goddess] store has more of a residential feel. I wanted it to have furniture, not fixtures. Above all, I

didn’t want it to be girlie.” —John Hoke, designer, Nike

Yes!: “Crest Spinoff Targets Women”—cover story,

Ad Age/06.03.02

Crest Rejuvenating Effects. “Chicks in charge” team. $50M launch. Packaging.

Taste. Features.

“Mattel Sees Untapped Market for Blocks: Little Girls”—Headline,

WSJ/04.06.02

“Last year more than 90% of Lego sets purchased were for boys. Mattel says Ello

—with interconnecting plastic squares, balls, triangles, squiggles,

flowers and sticks, in pastel colors and with rounded corners—will go beyond

Lego’s linear play patterns.”

“Volvo Teams Up to Build What Women Want:

Concept Car Goes for Great Storage, Easy

Maintenance” —headline/USA Today/12.16.2003/140-person team;80%

women

Ford Hybrid SUV Wallops Expectations

Women>$100K

College EdSource: USA Today/05.14.04

Not!“Year of the

Woman”

Enterprise Reinvention!

RecruitingHiring/Rewarding/Promoting

Structure Processes

MeasurementStrategyCulture Vision

Leadership

THE BRAND ITSELF!

“Honey, are you sure you have

the kind of money it takes to

be looking at a car like this?”

STATEMENT OF PHILOSOPHY: I am a businessperson. An analyst. A pragmatist. The enormous social good of increased women’s

power is clear to me; but it is not my bailiwick. My “game” is haranguing business leaders

about my fact-based conviction that women’s increasing power – leadership skills

and purchasing power – is the strongest and most dynamic force at work in the American

economy today. Dare I say it as a long-time Palo Alto resident … THIS IS EVEN BIGGER THAN

THE INTERNET!

Tom Peters

Not a Morality Play

“It is critical that we all understand that IBM is not marketing to

women entrepreneurs because it is the thing to do, or even the right thing to do. We’re marketing to

women entrepreneurs because it is a huge opportunity.” — Cherie Piebes

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

Psssst! Wanna see my “porn” collection?

Norwegian Law: Boards must have

at least 40%

women.

Ass Of The Year2002: Maurice Greenberg, A.I.G., on the Company’s New (All Male) Leadership Team

“In a lot of countries of the world, it would be very difficult for a woman to

be a good CEO. … I have a responsibility to do the best we can for

shareholders.” * **

*Source: New York Times/05.05.02**Wouldn’t you love to watch him tell that … face-to-face

… to Margaret Thatcher or Carly Fiorina? (I would.)

Ad from Furniture /Today (04.01):“MEET WITH THE EXPERTS!: How

Retailing’s Most Successful Stay that Way”

Presenting Experts: M = 16;

F = ?? (94% = 272)

Stupid: “Amazing, now that I think about it. A bunch of

guys --developers, architects, contractors,

engineers, bankers--sitting around designing shopping centers. And the ‘end users’

will be overwhelmingly women!”

“Customer is King”: 4,440

“Customer is Queen”: 29

Source: Steve Farber/Google search/04.2002

F.Y.I.

“Women Beat Men at Art of Investing”

Source: Miami Herald, reporting on a study by Profs. Terrance Odean and Brad Barber, UC Davis (Cause: Guys are “in and out” of

stocks more often; women choose carefully and hold on for the long term)

Investment Club Returns

Women-only clubs 1997 … 17.9%Mixed … 17.3%

Men-only … 15.6%

Source: National Assoc. Investors

Value Line: Top State* Investment Clubs 2000

8 … All male19 … Coed

22 … All FEMALE

* VT & Maine not included; D.C. included

JBQ: Stop Treating Women Investors Like Idiots!

“Why all this focus on women and our lack of investment guts? A far greater problem, it seems to

me, is trigger-happy speculation, mostly by men. The kind of guys whose family savings went south

with the dot-coms. Imagine a list of their money mistakes: Shoot from the hip. Overtrade their

accounts. Believe they’re smarter than the market. Think with their mouse rather than their brain.

Praise their own genius when stocks go up. Hide their mistakes from their wives.”

Source: Newsweek 01.08.01

Notes to the CEO

--Women are not a “niche”; so get this out of the “Specialty Markets” group.--The competition is starting to catch on. (E.g.: Nike, Nokia, Wachovia, Ford, Harley-Davidson, Jiffy Lube, Charles Schwab, Citigroup, Aetna.)

--If you “dip your toes in the water,” what makes you think you’ll get splashy results?--Bust through the walls of the corporate silos.--Once you get her, don’t let her slip away.--Women ARE the long run!


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.

“And even if they manage to get the age thing right, [Marti] Barletta says companies still tend to screw up in fairly predictable ways when they add women to the equation. Too often, their first impulse is to paint the

brand pink, lavishing their ads with flowers and bows, or, conversely, pandering with images of women

warriors and other cheesy clichés. In other cases they use language intended to be empathetic that come

across instead as borderline offensive. ‘One bank took out an ad saying, We recognize women’s special

needs,’ says Barletta. ‘No offense, but doesn’t that sound like the Special Olympics?’ ” —Fast Company/03.04

“Secrets” of Marketing to Women

1. Show her “real” women and reliable scenarios.2. Focus on connection and teamwork.3. Capture her imagination by using stories.4. Make it multisensory.5. Add the little extras.6. Tap the emotional power of music.7. Create customer evangelists.8. Form brand alliances.

Source: Lisa Johnson & Andrea Learned, Don’t Think Pink:

What Really Makes Women Buy and How to Increase Your Share of This Crucial Market

Must Reads!

EVEolution: The Eight Truths of Marketing to Women, Faith Popcorn

and Lys Marigold

Marketing to Women, Martha Barletta

Don’t Think Pink: What Really Makes Women Buy, Lisa Johnson and

Andrea Learned

12. Re-imagine the Customer II: Trends Worth

Trillion$$$ … Boomer Bonanza/ Godzilla

Geezer.

“It’s like a tsunami coming at you. You know

the tidal wave is going to hit, and it’s a question

of whether we’ll be ready.” —Ed Schneider, Professor of

Gerontology, USC

Subject: Marketers & Stupidity

“It’s 18-44, stupid!”

Subject: Marketers & Stupidity

Or is it: “18-44 is stupid,

stupid!”

2000-2010 Stats

18-44: -1%

55+: +21%(55-64: +47%)

“Some 350,00 people turn 50 each month in the United

States, providing an enormous and growing pool of potential buyers [of giant RVs] for at least the next decade.” —

Craig Kennison, industry analyst/Chicago Tribune/06.07.2004

44-65: “New Consumer Majority” *

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

“The New Consumer 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

“Baby-boomer Women: The Sweetest

of Sweet Spots for Marketers” —David Wolfe and Robert

Snyder, Ageless Marketing

“Tap into a midlife woman’s renewed sense of self, and your cash registers are likely to start

ringing” —Headline/Fast Company/03.04

Aging/“Elderly”

$$$$$$$$$$$$“I’m in charge!”

“NOT ACTING THEIR AGE: As Baby Boomers

Zoom into Retirement, Will America Ever Be the

Same?”USN&WR Cover/06.01

“Sixty Is the New Thirty”

—Cover/AARP/11.03

50+

$7T wealth (70%)/$2T annual income50% all discretionary spending

79% own homes/40M credit card users41% new cars/48% luxury cars

$610B healthcare spending/74% prescription drugs

5% of advertising targets

Ken Dychtwald, Age Power: How the 21st Century Will Be Ruled by the New Old

“Advertisers pay more to reach the kid because they think that once someone hits

middle age he’s too set in his ways to be

susceptible to advertising. … In fact, this notion of impressionable kids

and hidebound geezers is little more than a fairy tale, a Madison

Avenue gloss on Hollywood’s cult of youth.”—James Surowiecki (The New

Yorker/04.01.2002)

Read This!

Carol Morgan & Doran Levy,

Marketing to the Mindset of Boomers

and Their Elders

“Marketers attempts at reaching those over 50 have

been miserably unsuccessful. No market’s motivations and needs are so poorly understood.”—Peter

Francese, founding publisher, American Demographics

“Households headed by someone 40 or older enjoy 91% ($9.7T) of

our population’s net worth. … The mature market is the dominant

market in the U.S. economy, making the majority of

expenditures in virtually every category.” —Carol Morgan & Doran Levy, Marketing to

the Mindset of Boomers and Their Elders

Median Household Net Worth

<35: $7K35-44: $44K45-54: $83K

55-64: $112K65-69: $114K70-74: $120K>74: $100K

Source: U.S. Census

50+

78M67% of wealth ($28T)

Source: U.S. Census/Federal Reserve/WSJ

Net Worth Household Heads

55-64

= 15X <35

Source: U.S. Census/WSJ

“The mature market cannot be dismissed as entrenched in its

brand loyalties.” —Carol Morgan &

Doran Levy, Marketing to the Mindset of Boomers and Their Elders

“Focused on assessing the marketplace based on lifetime

value (LTV), marketers may dismiss the mature market as

headed to its grave. The reality is that at 60 a person in the U.S. may enjoy 20 or 30 years of life.” —Carol

Morgan & Doran Levy, Marketing to the Mindset of Boomers and Their Elders

“While the average American age 12 or older watched at least five

movies per year in a theater, those 40 and older were the most

frequent moviegoers, viewing 12 or more a year.”—Carol Morgan & Doran Levy, Marketing to the Mindset of Boomers and Their Elders

“Women 65 and older spent $14.7 billion on apparel in 1999, almost as much as that spent by 25- to 34-year-

olds. While spending by the older women increased by 12% from the previous year, that of the younger group increased by only 0.1%. But

who in the fashion industry is currently pursuing this market?” —Carol

Morgan & Doran Levy, Marketing to the Mindset of Boomers and Their Elders

Possession Experiences /“Desires for things”/Young adulthood/to 38

Catered Experiences/ “Desires to be served by others”/Middle adulthood

Being Experiences/“Desires for transcending experiences”/Late

adulthood

Source: David Wolfe and Robert Snyder/Ageless Marketing

“Elderly”

— Purchase “experiences” more than just “things”

— Convenience / Comfort / Access / Need to be

appreciated = Top Priorities

Source: Ken Dychtwald, Age Wave

Starting to Reach Out:

Sony, Ford, Walt Disney, Target, Anheuser-Busch,

P & G

Source: WSJ

“ ‘Age Power’ will rule the 21st century, and we are woefully

unprepared.”Ken Dychtwald, Age Power: How the 21st

Century Will Be Ruled by the New Old

No: “Target Marketing”

Yes: “Target

Innovation” & “Target Delivery Systems”

“The baby-boom generation is the

first wellness generation.” —Paul Zane Pilzer/

The Wellness Revolution: The Next Trillion Dollar Industry

Wellness = $$$$$$$$

Currently $200B, $1T by 2013 (Source: Paul Zane

Pilzer, The Wellness Revolution: The Next Trillion Dollar Industry)

And ….

Hispanics: 38.5%

growth, 1990-2000, vs. 9.3% overall*

*Source: Communispace/2003

“Relative to the demand, the success

stories are pitifully few” —Andrew Nuttney, Research Director, The

Research & Advisory Group; on marketing effectively to Hispanics

“BofA Is Betting Its Future on the Hispanic Market” *

“We expect to get no less than

80 % of our future growth in

retail banking from the Hispanic market.” —Ken Lewis, CEO, BofA

*Fortune/04.2003

Duh!“We want our associate population to mirror our

customer population at every level, from the executive suite all the way to the retail floor. In the marketplace, basically what I want to do is draw a concentric circle around every one of our 2,300 stores, and I want the assortment in that store to match the ethnicity of the

neighborhood it’s in. Some neighborhoods are all Hispanic, so we can put in a full Hispanic format. That’s

what Super Saver is. All the signage is in both languages. There’s a 100 percent Spanish-speaking

staff in the store.”—Larry Johnston, CEO, Albertson’s

Marketing to Women, Martha Barletta

EVEolution: The Eight Truths of Marketing to Women, Faith Popcorn & Lys Marigold

Ageless Marketing, David Wolfe & Robert Snyder

Marketing to the Mindset of Boomers and Their Elders, Carol Morgan & Doran Levy

Selling Dreams: How to Make Any Product Irresistible, Gian Luigi Longinotti-Buitoni

The Dream Society: How the Coming Shift from Information to Imagination Will Transform Your Business, Rolf Jensen

Trading Up: The New American Luxury, Michael Silverstein & Neil Fiske

VI. NEW BUSINESS. NEW

WORK.

13. Re-imagine Work: The

WOW Project. (Or Bust.)

The Work Matters!

“What we do matters to us. Work may not be the most

important thing in our lives or the only thing. We may work because we must, but we still

want to love, to feel pride in, to respect ourselves for what we

do and to make a difference.” —Sara Ann Friedman, Work Matters: Women Talk About Their

Jobs and Their Lives

Your Current Project?

1. Another day’s work/Pays the rent.4. Of value.7. Pretty Damn Cool/Definitely subversive.10. WE AIM TO CHANGE THE WORLD. (Insane!/Insanely Great!/WOW!)

Measures

–WOW!–Beauty!–Raving Fans!–Impact!

Language matters! Wow! BHAG! “Takes

your breath away!”

“Astonish me!” / S.D.

“Build something great!” / H.Y.

“Immortal!” / D.O.

“Let’s make a dent in the universe.”

Steve Jobs

“Reward excellent failures. Punish

mediocre successes.”

Phil Daniels, Sydney exec

Legacy!

TP: “Your ‘signature’ is not ‘I work for Dow.’ It’s, ‘’I

accomplished [INCREDIBLY COOL PROJECT] while I

was associated with Dow.’”*

*Terms: Signature. Portfolio. Projects. Braggables.

14. Re-imagine Implementation I: The F4 Recipe.*

*Find a Fellow Freak Far away

Topic: Boss-free

Implementation of STM /Stuff That

MATTERS!

World’s Biggest Waste …

Selling “Up”

THE IDEA: Model F4

Find a Fellow

Freak Faraway

F2F!/K2K!/1@T/R.F!A.*

*Freak to Freak/ Kook to Kook/ One at a Time/ Ready.Fire!Aim.

And …

K2KK*S2SS***Kook to Kooky Kustomer

**Skunk to Scintillating Supplier

“I often noticed that while the admirals around the table vigorously shook their heads in

disagreement, the younger officers lining the back walls nodded their heads in assent. This was a huge lesson for me: If one was going to

change things, one needed to focus on the mid-level officers. Because in just a few short years, they would be running the Navy, and

they realized, intuitively, that the future threat

environment [had changed radically].” —Thomas Barnett, The Pentagon’s New Map

“Nobody gives you power.

You just take it.” —Roseanne

Kurt Carlson to young Marilyn

Carlson: “If you don’t like Sunday School,

change it!” (She did.)

“To Be somebody or to

Do something”BOYD: The Fighter Pilot Who Changed

the Art of War (Robert Coram)

14A. Re-imagine Implementation II: Getting to WOW

Through Mastery of …

The Sales25.

The Sales25: Great Salespeople …

1. Know the product. (Find cool mentors, and use them.)

2. Know the company.3. Know the customer. (Including the customer’s consultants.) (And especially the “corporate culture.”)4. Love internal politics at home and abroad.5. Religiously respect competitors. (No badmouthing, no matter how provoked.)6. Wire the customer’s org. (Relationships at all levels & functions.)7. Wire the home team’s org. and vendors’ orgs. (INVEST Big Time time in relationships at all levels & functions.) (Take junior people in all functions to client meetings.)

It’s politics, stupid! (Play or sit on the sidelines.)

Great Salespeople …

8. Never overpromise. (Even if it costs you your job.) 9. Sell only by solving problems-creating profitable opportunities. (“Our product solves these problems, creates these unimagined INCREDIBLE opportunities, and will make you a ton of money—here’s exactly how.”) (IS THIS A “PRODUCT SALE” OR A WOW-ORIGINAL SOLUTION YOU’LL BE DINING OFF 5 YEARS FROM NOW? THAT WILL BE WRITTEN UP IN THE TRADE PRESS?)10. Will involve anybody—including mortal enemies—if it enhances the scope of the problem we can solve and increases the scope of the opportunity we can encompass.11. Know the Brand Story cold; live the Brand Story. (If not, leave.)


12. Think “Turnkey.” (It’s always your problem!)

13. Act as “orchestra conductor”: You are responsible for making the whole-damn-network respond. (PERIOD.)

14. Help the customer get to know the vendor’s organization & build up their Rolodex.15. Walk away from bad business. (Even if it gets you fired.)

16. Understand the idea of a “good loss.” (A bold effort that’s sometimes better than a lousy win.)17. Think those who regularly say “It’s all a price issue” suffer from rampant immaturity & shrunken imagination.18. Will not give away the store to get a foot in the door. 19. Are wary & respectful of upstarts—the real enemy.20. Seek several “cool customers”—who’ll drag you into Tomorrowland.


21. Use the word “partnership” obsessively, even though it is way overused. (“Partnership” includes folks at all levels throughout the supply chain.)22. Send thank you notes by the truckload. (NOT E-NOTES.) (Most are for “little things.”) (50% of those notes are sent to those in our company!) Remember birthdays. Use the word “we.” 23. When you look across the table at the customer, think religiously to yourself: “HOW CAN I MAKE THIS DUDE RICH & FAMOUS & GET HIM-HER PROMOTED?” 24. Great salespeople can affirmatively respond to the query in an HP banner ad: HAVE YOU CHANGED CIVILIZATION TODAY?25. Keep your bloody PowerPoint slides simple!

15. Re-imagine Boss Work: Start a WOW Projects Epidemic!

Emphasize … Demos, Heroes, Stories!

Premise: “Ordering” Systemic Change is a Stupid Waste

of Time!

Demos! Heroes! Stories!

Culture of Prototyping

“Effective prototyping may be

the most valuable core competence an innovative organization can

hope to have.”

Michael Schrage

Think about It!?

Innovation = Reaction to the Prototype

Michael Schrage

He who has the quickest O.O.D.A.

Loops* wins!*Observe. Orient. Decide. Act. /

Col. John Boyd

Shell

Game Changer

10% of technical budget “set aside and used to fund promising but nontraditional ideas through a

staged funding process similar to that used by venture capitalists”

Source: Financial Times/08.2003

Demo = Story

“A key – perhaps the key – to leadership is the

effective communication of a story.”

Howard Gardner, Leading Minds: An Anatomy of Leadership

MBSA!*

*Managing By Story-ing Around/David Armstrong

“Find something small that you can turn

around. If you’re on a 9-game losing streak, you need to start with one great inning.”—Rudy

“Some people look for things that went wrong and

try to fix them. I look for things that went right

and try to build on them.” —Bob Stone/ Mr.Rego/ Lessons from an

Uncivil Servant

REAL Org Change: Demos & Models (“Model

Installations,” “ReGo Labs”)/ Heroes (mostly extant: “burned

to reinvent gov’t”)/ Stories & Storytellers (Props!)/

Chroniclers (Writers, Videographers, Pamphleteers, Etc.)/

Cheerleaders & Recognition (Pos>>Neg, Volume)/

New Language (Hot/Emotional/WOW)/ Seekers

(networking mania)/ Protectors/ Support Groups/

End Runs—“Pull Strategy” (weird alliances, weird

customers, weird suppliers, weird alumnae-JKC)/ Field “Real People” Focus (3 COs) (long way away)/

Speed (O.O.D.A. Loops—act before the “bad guys” can react)

C.f., Bob Stone, Lessons from an Uncivil Servant

JKC

1. Scour for renegades; wine & dine.

2. Go outside for funds.

Stories … Paint me a picture … Story “infrastructure” … Demos … Quick prototypes … Experiments

… Heroes … Renegades … Skunkworks … Demo Funds …

V.C. … G.M. … Roster … Portfolio … Stone’s Rules … JKC’s Rules

VII. NEW BUSINESS. NEW

YOU.

16. Re-imagine the Individual: Welcome

to a Brand You World … Distinct or

Extinct

New World of Work

< 1 in 10 F500#1: Manpower Inc.

Freelancers/I.C.: 16M-25MTemps: 3M (incl. CEOs & lawyers)

Microbusinesses: 12M-27M

Total: 31M-55MSource: Daniel Pink, Free Agent Nation

“JUST GOT LAID OFF? HIRE

YOURSELF!”—Cover story, Forbes, 12 May 2003

“If there is nothing very special about

your work, no matter how hard you apply yourself, you won’t get noticed, and that

increasingly means you won’t get paid much either.”

Michael Goldhaber, Wired

TIM MONICH: “the man Hollywood turns to for

the right accent”

Source: Boston Globe/01.25.2004

“Self-reliance never comes ‘naturally’ to adults because they have been so

conditioned to think non-authentically that it feels wrenching to do otherwise. … Self Reliance is a last resort to which a person is driven in desperation only when he or

she realizes ‘that imitation is suicide, that he must take himself for better, for worse,

as his portion.’ ” —Lawrence Buell, Emerson

Minimum New Work SurvivalSkillsKit2003

MasteryRolodex Obsession (vert. to horiz. “loyalty”)

Entrepreneurial InstinctCEO/Leader/Businessperson/Closer

Mistress of ImprovSense of Humor

Intense Appetite for TechnologyGroveling Before the Young

Embracing “Marketing”Passion for Renewal

Sam’s Secret #1!

Minimum New Work SurvivalSkillsKit2003

MasteryRolodex Obsession (vert. to horiz. “loyalty”)

Entrepreneurial InstinctCEO/Leader/Businessperson/Closer

Mistress of ImprovSense of Humor

Intense Appetite for TechnologyGroveling Before the Young

Embracing “Marketing”Passion for Renewal

Thriving in 24/7 (Sally Helgesen)

START AT THE CORE. Nimbleness only possible if we “locate our inner voice,” take regular inventory of

where we are.

LEARN TO ZIGZAG. Think “gigs.” Think lifelong learning. Forget “old loyalty.” Work on optimism.

CREATE OUR OWN WORK. Articulate your value. Integrate your passions. I.D. your market. Run your

own business.

WEAVE A STRONG WEB OF INCLUSION. Build your own support network. Master the art of “looking

people up.”

“My ancestors were printers in Amsterdam from 1510 or so until

1750, and during that entire time they didn’t have to learn anything

new.”Peter Drucker, Business 2.0 (08.22.00)

“Knowledge becomes obsolete incredibly fast. The

continuing professional education of adults is the

No. 1 industry in the next 30 years … mostly on line.”

Peter Drucker,Business 2.0 (22August2000)

3 Weeks in May

“Training” & Prep: 187“Work”: 41

(“Other”: 17)

1% vs.

367%

Divas do it. Violinists do it. Sprinters do it. Golfers do it.

Pilots do it. Soldiers do it. Surgeons do it. Cops do it.

Astronauts do it. Why don’t businesspeople do it?

Prep: 1 hour per 1 minute (WSC) “Forget ‘practice makes perfect.’

Substitute ‘perfect practice makes perfect.’ ” (TT) “Major difference between ‘best’ and ‘average’?

‘Best’ get as much pleasure from practice as performance.” —Ben Zander

Edward Jones’ Training Machine*

146 hours/employee/yearNew hires: 4X avg.

3.8% of payroll

* #1, “The 100 Best Companies To Work For”/Fortune/01.2003

R.D.A.

Rate: 15%?, 25%?

Therefore: Formal “Investment

Strategy”/R.I.P.

Invent. Reinvent. Repeat.

Source: HP banner ad

Personal “Brand Equity” Evaluation– I am known for [2 to 3 things]; next year at this time I’ll

also be known for [1 more thing].– My current Project is challenging me …– New things I’ve learned in the last 90 days include …– My public “recognition program”

consists of …– Additions to my Rolodex in the last 90 days include …

–My resume is discernibly different from last year’s at this time …

T.T.D./Assignment

Construct a 1/8-page or 1/4-page ad for

Brand You … for the Yellow Pages

The Rule of Positioning

“If you can’t describe your position in eight

words or less, you don’t have a position.”

— Jay Levinson and Seth Godin, Get What You Deserve!

“You are the storyteller of your own life, and you

can create your own legend or not.”

Isabel Allende

“Carpenters bend wood; fletchers bend arrows; wise men fashion themselves.”

— Buddha

THE I work for a company called

Me STREET JOURNAL

Adventures in Capitalism

THE rise up and flee your cubicle STREET JOURNAL

Adventures in Capitalism

Bill Parcells’ World/ Brand You World!

BLAME NOBODY!EXPECT NOTHING!DO SOMETHING!

NY Post (9/99)

Disagree: “Success in life is pretty much determined by forces out side our control”

Bangladesh … 9%China … 22%

Germany … 31%Mexico … 38%France … 42%

UK … 43%Japan … 52%

Canada … 62%U.S.A. … 64%*

*81% college kids predict they’ll be richer than their parentsSource: Pew Center

17. Re-imagine

Excellence I: The Talent

Obsession.

“When land was the scarce resource, nations battled

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

Stan Davis & Christopher Meyer, futureWEALTH

“Historically, smart people have always turned to where the money was. Today, money is turning to

where the smart people are.” —FT/06.03.03

Age of AgricultureIndustrial Age

Age of Information IntensificationAge of Creation Intensification

Source: Murikami Teruyasu, Nomura Research Institute

Brand = Talent.

Talent!

Tina Brown: “The first thing to do is to hire enough

talent that a critical mass of excitement starts to

grow.”Source: Business2.0/12.2002-01.2003

The Talent Ten

1. Obsession

P.O.T.* = All Consuming

*Pursuit of Talent

Model 25/8/53

Sports Franchise GM

“In most companies, the Talent Review Process is a farce. At GE, Jack Welch and his two top HR people visit each division

for a day. They review the top 20 to 50 people by name. They talk about Talent Pool strengthening issues. The Talent

Review Process is a contact sport at GE; it has the intensity and the importance of the budget process at most companies.”—Ed

Michaels

“The leaders of Great Groups love talent and know where to find it. They revel in

the talent of others.”Warren Bennis & Patricia Ward Biederman,

Organizing Genius

PARC’s Bob Taylor:

“Connoisseur of Talent”

Les Wexner: From sweaters to people!

Talent (Not) on His Mind

Norman Pearlstine, Editor-in-Chief, Time Inc., asked a magazine’s managing editor to name 10 people outside Time that the

magazine should pursue: “He said, I can’t think of any.’ ”


2. Greatness

Only The Best!

From “1, 2 or you’re out” [JW] to …

“Best Talent in each industry segment to build

best proprietary intangibles” [EM]

Source: Ed Michaels, War for Talent

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

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)

5. Youth

Grovel Before the Young!

“Why focus on these late teens and twenty-

somethings? Because they are the first young who are both in a position to change the world, and are actually doing so. … For the first time in history,

children are more comfortable, knowledgeable and literate than their parents about an

innovation central to society. … The Internet has triggered the first industrial revolution in history

to be led by the young.”

The Economist [12/2000]

8 Minutes*

—Dr. Sugata Mira, NIIT/ New Delhi/ 1999**

*Ignorance to Surfing**And then there’s oya yubi sedai, the “thumb generation”

6. Diversity

Mess Rules!

“Where do good new ideas come from? That’s simple! From

differences. Creativity comes from unlikely juxtapositions.

The best way to maximize differences is to mix ages, cultures and

disciplines.”

Nicholas Negroponte

“Diversity defines the health and wealth of nations in a new

century. Mighty is the mongrel. The hybrid is hip. The impure, the mélange, the adulterated, the

blemished, the rough, the black-and-blue, the mix-and-match – these people are inheriting the earth.

Mixing is the new norm. Mixing trumps isolation. It spawns creativity, nourishes the human spirit, spurs

economic growth and empowers nations.”

G. Pascal Zachary, The Global Me: New Cosmopolitans and the Competitive Edge

CM Prof Richard Florida on

“Creative Capital”: “You cannot get a technologically

innovative place unless it’s open to weirdness,

eccentricity and difference.”


7. 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, BusinessWeek, 11.20.00

8. Weird

The Cracked Ones Let in the Light!

The Cracked Ones Let in the Light

“Our business needs a massive transfusion of talent, and talent, I believe, is most likely to be found

among non-conformists, dissenters and rebels.”

David Ogilvy

“He wasn’t one who went along with his peers” —SPC Joe Darby’s history

teacher

Deviants, Inc. “Deviance tells the story of every mass

market ever created. What starts out weird and dangerous

becomes America’s next big corporate payday. So are you looking for the next mass market idea? It’s out there … way

out there.”

Source: Ryan Matthews & Watts Wacker, Fast Company (03.02)

9. Opportunity

Make It an Adventure!

“H.R.” to “H.E.D.” ???

Human

Enablement

Department

“Firms will not ‘manage the careers’ of their employees. They

will provide opportunities to enable the employee to develop

identity and adaptability and

thus be in charge of his or her own career.”

Tim Hall et al., “The New Protean Career Contract”

Talent Department

People Department

Center for Talent Excellence

Seriously Cool People Who Recruit & Develop Seriously Cool People

Etc.

10. Leading Genius

We are all unique!

Beware Lurking HR Types … One size

NEVER fits all. One size fits one. Period.

48 Players = 48 Projects =

48 different success measures.

100% IMAGINATION!*

The Ritz Cookie Lady

PPSI

*Damn it.

What’s your company’s …

EVP?Employee Value Proposition, per Ed

Michaels et al., The War for Talent;

IBP/Internal Brand Promise per TP

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

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

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

Talent’s “Big Two” Rules

GREAT Finance Dept. = GREAT Football Team

DIFFERENCES Among Cello Players = DIFFERENCES

Among Hotel GMs

17A. ADDENDA to Re-imagine Excellence: Tom Peters’

The

Talent50

The Talent50

1. People first!2. Soft is Hard. 3. FUNDAMENTAL PREMISE: We are in an Age of Talent/ Creativity/ Intellectual-capital Added.4. Talent “excellence” in every part of the organization.5. P.O.T./Pursuit Of Talent = Obsession.6. HR sits at The Head Table.7. HR is “cool.”

The Talent50

8. Re-name “HR.” (Talent Department, Center of Talent Excellence)9. There’s an HR Strategy10. There is a FORMAL Recruitment Strategy.11. There is a FORMAL Leadership Development Strategy.12. There is a “world class” Leadership Development Center.13. There is a FORMAL-STRATEGIC HR Review Process.14. The “Top100,” and every unit’s Top10, are consciously managed.

The Talent50

15. “People/Talent Reviews” are the FIRST reviews.16. HR Strategy = Business Strategy.17. Make it a Cause Worth Signing Up For..

18. Set Sky High Standards.19. Enlist everyone in Challenge Century21.20. Pursue the Best!21. Up or Out.22. Ensure that the Review Process has INTEGRITY.23. Pay!

The Talent50

24. Training I: Train! Train! Train!25. TII: 100% “business people.”26. TIII: 100% Leaders.27. TIV: Boss as Trainer-in-Chief.28. Open Communication I: NO BARRIERS.29. Open Communication II: Share Information. (ALL!)30. Respect!31. INTEGRITY!32. Treat the Whole Individual.

The Talent50

33. Places of “grace.”34. MBWA: The “Rudy Rule.”35. Thank You!36. Promote for “people skills.” (ALL ELSE IS SECONDARY.)37. Honor youth.38. Early leadership assignments.39. Fast Tracking is the norm.40. Create a System of Mentoring.

The Talent50

41. Diversity!42. Diversity starts on the Board of Directors.43. WOMEN RULE.44. Weird Wins.45. We are all unique. 46. Bosses “win people over.”47. GOAL: Adventures of Mutual Discovery.48. Foster Independence.49. Enthusiasm!

The Talent50

50. Talent = Brand.

17B. Re-imagine Excellence II: Meet the

New Boss … Women Rule!

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

outshine their male counterparts in almost

every measure”Title, Special Report, BusinessWeek, 11.20.00

Lawrence A. Pfaff & Assoc.

— 2 Years, 941 mgrs (672M, 269F); 360º feedback

— Women: 20 of 20; 15 of 20 with statistical significance, incl. decisiveness, planning,

setting stds.) — “Men are not rated significantly higher by

any of the raters in any of the areas measured.” (LP)

The New Economy …

Shout goodbye to “command and control”!

Shout goodbye to hierarchy!

Shout goodbye to “knowing one’s place”!

“Guys want to put everybody in their hierarchical place. Like, should I have more

respect for you, or are you somebody that’s south

of me?”Paul Biondi, Mercer Consultants [from It’s Not Business, It’s Personal, Ronna Lichtenberg]

“Society is based on male standards with women seen as anomalies deviating from the male norm.” — Bi Puvaneu, Institute

for Future Studies (Stockholm)

Women’s Strengths Match New Economy Imperatives: Link [rather than rank] workers;

favor interactive-collaborative leadership style [empowerment beats top-down decision making]; sustain fruitful collaborations; comfortable with sharing information; see redistribution of power

as victory, not surrender; favor multi-dimensional feedback; value technical & interpersonal skills, individual & group contributions equally; readily accept ambiguity; honor intuition as well as pure

“rationality”; inherently flexible; appreciate cultural diversity.

Source: Judy B. Rosener, America’s Competitive Secret: Women Managers

“On average, women and men possess a number of different innate skills. And current trends suggest that many sectors of the twenty-

first-century economic community are going to need the natural

talents of women.”Helen Fisher, The First Sex: The Natural Talents of

Women and How They Are Changing the World

“American women possess leadership abilities that are particularly effective in today’s organizations, yet their abilities remain undervalued and underutilized. In the future, what will distinguish one

organization and one country from another will be its use of human

resources. Today human resource utilization is not only a matter of social

justice but a bottom-line issue.”

Judy Rosener, America’s Competitive Secret

“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

Work’s Rewards

F: Relationships, respect, self-realization.

M: Title, salary, power. (“In all my research with men, I’ve never once heard

a mention about the importance of relationships.”)

Source: Susan Rice, former Director of Communications, BBDO Europe (from “A Dignified Woman”)

“[Women] see power in terms of influence, not

rank.” —Fortune/10.13.2003

“Thank you”

17 Men: 84 Women: 19

Ass Of The Year2002 (?): Maurice Greenberg, A.I.G., on the Company’s New (All Male) Leadership Team

“In a lot of countries of the world, it would be very difficult for a woman to

be a good CEO. … I have a responsibility to do the best we can for

shareholders.” * **

*Source: New York Times/05.05.02**Wouldn’t you love to watch him tell that … face-to-face

… to Margaret Thatcher or Carly Fiorina? (I would.)

Okay, you think I’ve gone tooooo far.

How about this: DO ANY OF YOU SUFFER

FROM TOO MUCH TALENT?

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

“It’s time for U.S. organizations to act. No other country in the

world has a comparable supply of professional women waiting to be called into action. This is America’s competitive secret.”

Judy B. Rosener, America’s Competitive Secret

Opportunity!

U.S. G.B. E.U. Ja.

M.Mgt. 41% 29% 18% 6%

T.Mgt. 4% 3% 2% <1%

Peak Partic. Age 45 22 27 19

% Coll. Stud. 52% 50% 48% 26%

Source: Judy Rosener, America’s Competitive Secret

“Internationally, the United

States ranked 60th in

women’s leadership, behind Sierra Leone and tied with Andorra.” —Marie Wilson, Closing the Leadership Gap

>1/3rd in parliament: Sweden, Denmark, Norway, Finland, Iceland, the Netherlands, Germany

(USA: 15%,14%)

France: Constitutional amendment re women on ballot (L & R); 25% to 48% local gov’t

India: Constitutional amendment, 1/3rd village council seats (1.3M)

—Marie Wilson, Closing the Leadership Gap

“Former President Vigdis Finbogadottir likes to tell of

boys who asked their mothers during her long

term if men could be president of Iceland.” —Marie Wilson,

Closing the Leadership Gap

It’s Girls, Stupid!

1996: 8.4M women, 6.7M men in college (est: 9.2 to 6.9 in 2007); more women than men in

high-level math and science courses

More girls in student govt., honor societies; girls read more books, outperform boys in artistic and musical ability, study abroad in

higher numbers

Boys do rule: crime, alcohol, drugs, failure to do homework (4:1)

Source: The Atlantic Monthly (May2000)

Degree Gap*

Wom:Men/Bachelor’s … 2000: 133; 2010: 142

Wom:Men/Master’s … 2000: 138; 2010: 151

* Whites, Blacks, Hispanics, Asians, Native Americans

Source: The New Gender Gap/BusWeek/05.26.2003

Girls lead: Student gov’t, music & performing arts, yearbook & newspaper, academic clubs.

Boys lead: Sports, learning disabilities, diagnosed with

emotional disturbances

Source: The New Gender Gap/BusWeek/05.26.03

“THE NEW GENDER GAP: From kindergarten to grad school, boys are

becoming the second sex”—Cover story,

BusinessWeek/26 May 2003

“Are men obsolete?” —Headline,

USN&WR/06.03.03

“Boys are trained in a way that will make

them irrelevant.”

Phil Slater

Read This!

“Winning the Talent War for Women: Sometimes It

Takes a Revolution” Douglas McCracken, HBR

“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]

“The process of assigning plum accounts was largely unexamined. …

Male partners made assumptions: ‘I wouldn’t put her on that kind of

company because it’s a tough manufacturing environment.’ ‘That

client is difficult to deal with.’ ‘Travel puts too much pressure on women.’ ”

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

!!!!!!!!!!!!!!!

14 to 168*

*Leadership Positions/D&T/1992-2002/WIAR

Plante & Moran (#11)

Highest % women partners (19%)

Highest % partners on non-traditional work schedules (14%)

Parenting “Buddies”; 4 weeks off, 5 after 5 years; paid 4-week sabbatical for partners

every 7 years; up to 6 months unpaid parental leave (M & F)

Exceptional growth/profitability vs. Top 100

Source: Fast Company/05.04

2004/SF’s Gavin Newsome: top 3 jobs

to women … Fire Chief, Police Chief, DA (All were

held by men)

Cirque du Soleil: Talent (12 full-time

scouts, database of 20,000). R&D (40% of

profits; 2X avg corp). Controls (shows are profit centers; partners like Disney offset costs;

$100M on $500M). Scarcity builds buzz/brand (1 new show per year. “People tell me we’re leaving money on the table by not duplicating our shows. They’re right.”—Daniel

Lamarre, president).Source: “The Phantasmagoria Factory”/Business 2.0/1-2.2004

“Would Congress [the

Boardroom—TP] be a different place if half the members

were women?”

From Sex and Power, Susan Estrich

+/-

The Boston Club: Corporate Salute (10.28.03)

Norwegian Law: Boards must have

at least 40%

women.

“I’m on the lunatic fringe of optimism.” —Shelley Lazarus, CEO,

Ogilvy & Mather, on women eventually occupying 50% of F500 CEO slots (vs. 8/1.6% in

2003)

Women Rule

Match market power

Attributes fit N.O.W. (New Org World)

10M biz owners

Girls education #1: Yields highest return on investment in developing

world*

*better nutrition for family. Better kids’ education. Better health. Higher family

income. Lower birth rate. Etc.

Source: Larry Summers, as reported in “The Payoff From Women’s Rights,” Isobel Coleman, Foreign Affairs/May-June

2004

18. Re-imagine Education.*

*Or perish

“My education was a prolonged and concerted

attack on my individuality.” —Neil Crofts, Authentic

“The boys who made the best ‘Grotties’ usually

turned out to be nonentities later; boys who hated

Groton did much better.”FDR biographer John Gunther (quoted in Whoever Makes the

Most Mistakes Wins, Richard Farson & Ralph Keyes)

Losing the War to Bismarck (and Rockefeller)

J. D. Rockefeller’s General Education Board

(1906): “In our dreams people yield themselves with perfect docility to our

molding hands. … The task is simple. We will organize children and teach

them in a perfect way the things their fathers and mothers are doing in an imperfect way.”

John Taylor Gatto, A Different Kind of Teacher

“My wife and I went to a [kindergarten] parent-teacher conference and were informed that our budding

refrigerator artist, Christopher, would be receiving a grade of Unsatisfactory in art. We were shocked. How could any child—let alone our child—receive a poor

grade in art at such a young age? His teacher informed us that he had refused to color within the lines, which was a

state requirement for demonstrating ‘grade-level motor

skills.’ ”Jordan Ayan, AHA!

“How many artists are there in the room? Would you please raise your hands. FIRST GRADE: En masse the children leapt from their seats, arms waving. Every child was an artist. SECOND

GRADE: About half the kids raised their hands, shoulder high, no higher. The hands were still. THIRD GRADE: At best, 10 kids out

of 30 would raise a hand, tentatively, self-consciously. By the time I reached SIXTH GRADE, no more than one or two kids

raised their hands, and then ever so slightly, betraying a fear of being identified by the group as a ‘closet artist.’ The point is:

Every school I visited was participating in the suppression of creative genius.”

Gordon MacKenzie, Orbiting the Giant Hairball: A Corporate Fool’s Guide to Surviving with Grace

An Unnatural Way to “Learn”

Schools’ “Kafka-like rituals”: “enforce sensory deprivation on classes of children held in

featureless rooms … sort children into rigid categories by the use of fantastic measures such as

age-grading, or standardized test scores … train children to drop whatever they are occupied with and to move as a body from room to room at the sound of a bell, buzzer, horn, or klaxon … keep children under constant surveillance, depriving

them of private time and space …


Kafka-like rituals (cont.): “assign children numbers constantly, feigning the ability to

discriminate qualities quantitatively … insist that every moment of time be filled with low-

level abstractions … forbid children their own discoveries, pretending to possess some vital secret to which children must surrender their

active learning time to acquire.”


Doing Stuff that Matters!

“What actually correlates with success are not grades but ‘engagement’—genuine involvement in courses and campus activities. Engagement leads to ‘deep learning.’ That’s very different

from just memorizing stuff for an exam. As Russ Edgerton of the Pew Forum on Undergraduate Learning notes, ‘What counts is what students

do in college, not who they are or where they go to college, or what their grades are.’” —John

Merrow/USA Today/02.2003

“During the first years of life, youngsters all over

the world master a breathtaking array of

competences with little formal tutelage.”

Howard Gardner, The Unschooled Mind

“Children should be taught in an active way by doing things and

playing games. It’s very different to what is taught in

schools which involves sitting back and absorbing

information.” —Edward de Bono/The Independent/10.28.2002

The Learner’s Manifesto

The brain is always learning.Learning does not require coercion.

Learning must be meaningful.Learning is incidental.

Learning is collaborative.The consequences of worthwhile learning

are obvious.Learning always involves feelings.

Learning must be free of risk.

Frank Smith, Insult to Intelligence

“Really bright kids who just needed to get excited” —teacher,

Oakley School

Tom’s Edu3M

Manifesto**Manifesto for Education in the 3rd Millennium

Education3MLearning is a normal state.Children are learnavores.

Prodigious feats of learning are common as dirt. [Watch an H.S. QB studying game film.]

We learn at different rates.We learn in different ways.

Boys and girls learn [very] differently.In a class of 25, there are 25 different trajectories.

Learning in 40-minutes blocks is bullshit.Learning for tests is utterly insane.

There are numerous rigorous evaluation schemes, of which testing is but one—and abnormal, by “real

world” standards.

Education3M

We learn most/fastest/most completely when we are passionate about what we are learning and it

matters to us. [Salience rules!] Think EBI/LBI: Education by Interest/

Learning by Internship.Classrooms are abnormal places.

We need changes of pace. [Japanese recesses after each class.]

International test scores are not correlated with hours-per-year in class.

Big classes are slightly problematic. Big schools suck. Period.

Education3M

“All this”—the right stuff—fits the NWW/New World of Work hand-in-glove. [NWW = Age of Creativity.]

U.S. schools circa 2001 are a vestige of the Prussian-Fordist model, more interested in shaping behavior than stoking the fires of lifelong learning.

Cutting art-music budgets is truly dumb.Learning is a matter of Intensity of Engagement, not elapsed time. [Aargh: 11 minutes on the Battle of Gettysburg.]

Teachers need enough space-time-flexibility to get to know kids as individuals.

Scientific discovery processes and the teaching of science are utterly at odds. [Exploration vs. spoon-feeding.]

Education3M

Our toughest “learning achievement”—mastering our native language—does not

require schools, or even competent parents. [It does require a desperate need-to-know.]

Great teachers are great learners, not imparters-of-knowledge.

Great teachers ask great questions—that launch kids on lifelong quests.

The world is not about “right” & “wrong” answers; it is about the pursuit of increasingly

sophisticated questions—just ask a ski instructor or neurosurgeon.

Education3M

Most schools spend most of their time setting up contexts in which kids learn not to like

particular subjects. [Evidence shows that such anti-learning sticks!]

Vigorous exploration is normal … until you are incarcerated in a school.

“Bite size” education-learning is neither education nor learning.

Learning takes place rapidly on the cheerleading squad, the football team, the school newspaper, the drama club, at the after-class job--just not in

the hyper-structured classroom.

Education3M

The “school reform” “movement” is a giant step … backwards … embracing the Prussian-Fordist paradigm with renewed vigor—at exactly the

wrong time.There are large numbers of superb schools, superb principals, superb teachers; sadly, they not only fail

to infect the [largely timid] rest, but are ordinarily supplanted by wusses & wimps.

Alas, the teaching profession does not ordinarily attract “cool dudes & dudettes.”

Schools of “education” should by and large have their charters revoked.

Education3M

Stability is dead; “education” must therefore “educate” for an unknowable,

ambiguous, changing future; thence, learning to learn & change is far more

important than mastery of a static body of “facts.”

“Education” must “develop in youth the capabilities for engaging in intense concentrated

involvement in an activity.” [James Coleman, 1974.] [Hint: It doesn’t.] [Hint: Understatement.]

Ye gads: “Thomas Stanley has not only found no correlation between success in school and an

ability to accumulate wealth, he’s actually found a negative correlation. ‘It seems that school-

related evaluations are poor predictors of economic success,’ Stanley concluded. What did predict success was a willingness to take risks.

Yet the success-failure standards of most schools penalized risk takers. Most educational

systems reward those who play it safe. As a result, those who do well in school find it hard to

take risks later on.”Richard Farson & Ralph Keyes, Whoever Makes the Most Mistakes Wins

The NAESP …

Attributes of Those Who “Made” the 10th Grade History Book

– Committed!

– Determined to make a difference!

– Focused!

– Passionate!

– Irrational about their life’s project!

– Ahead of their time / Paradigm busters!

– Impatient! / Action Obsessed

Attributes of Those Who “Made” the 10th Grade

History Book –Made lots of people mad!

–Flouted the chain of command!

–Creative / Quirky / Peculiar! / Rebels! / Irreverent!

–Masters of improv / Thrive on chaos / Exploit chaos!

Attributes of Those Who “Made” the 10th Grade History Book

–Forgiveness > Permission

–Bone honest!

–Flawed as the dickens!

– “In touch” with their followers’ aspirations

–Damn good at what they do!

VIII. NEW BUSINESS: (NEW)

BRAND INSIDE RULES

Message2003 …

BI > BO

Brand Inside Rules!

“I came to see in my time at IBM that culture isn’t just one aspect of the

game—it is the game” —Lou

Gerstner, Who Says Elephants Can’t Dance?

Brand Inside Rules!

“If I could have chosen not to tackle the IBM culture head-on, I probably

wouldn’t have. My bias coming in was toward strategy, analysis and measurement. In comparison,

changing the attitude and behaviors of hundreds of thousands of people is

very, very hard.” —Lou Gerstner, Who Says Elephants Can’t Dance?

19. Re-imagine the Roots of Innovation: THINK WEIRD … the

High Value Added Bedrock.

FLASH:

Innovation is

easy!

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

THINK WEIRD: The High Standard

Deviation Enterprise.

CUSTOMERS: “Future-defining customers may

account for only 2% to 3% of your total, but they represent a crucial

window on the future.”Adrian Slywotzky, Mercer Consultants

“If you worship at the throne of the voice of the customer, you’ll get only

incremental advances.”Joseph Morone, President,

Bentley College

“These days, you can’t succeed as a company if you’re consumer led –

because in a world so full of so much constant change, consumers can’t

anticipate the next big thing.

Companies should be idea-led and consumer-

informed.”Doug Atkin, partner, Merkley Newman Harty

“The future has already happened. It’s

just not evenly distributed.”

Adrian Slywotzky

“Generally, disruptive technologies underperform established

established products in mainstream markets. But they have

other features that a few fringe (and generally new) customers

value.”

Clayton Christensen, The Innovator’s Dilemma

W.I.W?

20 of 267 of top 10*

*P&G: Declining domestic sales in 20 of 26 categories; 7 of top 10

categories. (The “billion-dollar” problem.)

Source: Advertising Age 01.21.2002/BofA Securities

Ways to Raise a Purple Cow

Think small. One vestige of the TV-industrial complex is a need to think

mass. If it doesn’t appeal to everyone, the thinking goes, it’s not worth it. Think of the smallest conceivable

market—and describe a product that overwhelms it with remarkability. Go

from there.Source: Seth Godin, Fast Company (02.2003)

Primary Obstacles to “Marketing-driven Change”

1. Fear of “cannibalism.”2. “Excessive cult of the consumer”/ “customer driven”/ “slavery to demographics, market research and focus groups.”3.Creating “sustainable advantage.” Source: John-Marie Dru, Disruption

Account planning has become “focus group balloting.”

—Lee Clow

“Chivalry is dead. The new code of conduct is an active strategy of disrupting the status quo

to create an unsustainable series of competitive advantages. This is not an age of defensive

castles, moats and armor. It is rather an age of cunning, speed and surprise. It may be hard for some to hang up the chain mail of ‘sustainable

advantage’ after so many battles. But hypercompetition, a state in which sustainable advantages are no longer possible, is now the

only level of competition.”

Rich D’Aveni, Hypercompetition: Managing the Dynamics of Strategic Maneuvering

“HAVE MBAs KILLED OFF MARKETING? Prof Rajeev Batra says: ‘What these times call for is more creative

and breakthrough reengineering of product and service benefits, but we don’t train people to think like that.’ The way marketing is

taught across business schools is far too analytical and data-driven. ‘We’ve taken away the emphasis on creativity and big ideas that characterize real marketing breakthroughs.’ In India there is an added problem: most senior marketing jobs have been traditionally dominated by MBAs. Santosh Desai, vice

president, McCann Erickson, an MBA himself, believes in India engineer-MBAs, armed with this Lego-like approach, tend to reduce marketing into neat components. ‘This reductionist

thinking runs counter to the idea that great brands must have a core, unifying idea.’ ”—Businessworld/04Nov2002/“Why Is

Marketing Not Working?”

The Fatal Assumption: “Analysis Produces Synthesis”

“Planning by its very nature defines and preserves categories. Creativity, by its very

nature, creates categories or rearranges established ones ... The key is integration

rather than de-composition, based on holistic images rather than linear words.”

— Henry Mintzberg, The Rise and Fall of Strategic Planning

COMPETITORS: “The best swordsman in the world doesn’t need to fear

the second best swordsman in the world; no, the person for him to be afraid of is some ignorant antagonist who has never had a

sword in his hand before; he doesn’t do the thing he ought to do, and so the expert isn’t

prepared for him; he does the thing he ought not to do and often it catches the expert out and

ends him on the spot.”

Mark Twain

“To grow, companies need to break out of a vicious

cycle of competitive benchmarking and

imitation.” —W. Chan Kim & René Mauborgne,

“”Think for Yourself —Stop Copying a Rival,” Financial Times/08.11.03

“Aiming to beat the competition has the opposite effect to the one

intended. It keeps companies focused on the competition. When asked to

build competitive advantage, managers typically rate themselves

against competitors, assess what they do and try to do it better.” —W. Chan Kim &

René Mauborgne, “Think for Yourself—Stop copying a Rival”/FT/08.03

“The short road to ruin is to emulate

the methods of your adversary.”

— Winston Churchill

“How do dominant companies lose their

position? Two-thirds of the time, they pick the wrong competitor to

worry about.” —Don Listwin, CEO,

Openwave Systems/WSJ/06.01.2004 (commenting on Nokia)

Kodak …. FujiGM …. FordFord …. GM

IBM …. Siemens, FujitsuSears … Kmart

Xerox …. Kodak, IBM

“This is an essay about what it takes to create and sell something remarkable. It is a plea for originality, passion, guts and daring. You can’t be remarkable by following someone else who’s remarkable. One way to figure

out a theory is to look at what’s working in the real world and determine what the successes have in common. But what could the Four Seasons and

Motel 6 possibly have in common? Or Neiman-Marcus and Wal*Mart? Or Nokia (bringing out new hardware every 30 days or so) and Nintendo

(marketing the same Game Boy 14 years in a row)? It’s like trying to drive

looking in the rearview mirror. The thing that all these companies have in common is that they

have nothing in common. They are outliers. They’re on the fringes. Superfast or superslow. Very exclusive or very cheap. Extremely

big or extremely small. The reason its so hard to follow the leader is this: The leader is the leader precisely because he did something remarkable.

And that remarkable thing is now taken—so it’s no longer remarkable when you decide to do it.” —Seth Godin, Fast Company/02.2003

Employees: “Are there enough weird

people in the lab these days?”

V. Chmn., pharmaceutical house, to a lab director (06.01)

Suppliers: “There is an ominous downside to strategic supplier

relationships. An SSR supplier is not likely to function as any more than a mirror to your organization. Fringe suppliers that offer innovative business practices need

not apply.”

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

Boards: “Extremely contentious boards that regard dissent as an

obligation and that treat no subject as undiscussable” —Jeffrey

Sonnenfeld, Yale School of Management

“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, “Strategy or Revolution/

Harvard Business Review

“Enormous sums of money are invested to reduce cycle time, improve quality,

reengineer … Much of this money is simply wasted. The waste is due to companies’

inability to develop wide-angle vision and tap into the … power of the edge.”

Wayne Burkan, Wide Angle Vision: Beat the Competition by Focusing on Fringe

Competitors, Lost Customers, and Rogue Employees

“Corporate consciousness is predictably centered around the

mainstream. The best customers, biggest competitors, and model

employees are almost invariably the focus of attention.”

Wayne Burkan, Wide Angle Vision: Beat the Competition by Focusing on Fringe Competitors,

Lost Customers, and Rogue Employees

We become who we

hang out with!

Message: TAKE SOMEONE NEW & WEIRD TO LUNCH

TODAY OR TOMORROW. [Inundate yourself with weird.]

WEIRD IDEAS THAT WORK: (1) Hire slow learners (of the organizational code). (1.5) Hire people who make you

uncomfortable, even those you dislike. (2) Hire people you (probably) don’t need. (3) Use job interviews to get ideas, not

to screen candidates. (4) Encourage people to ignore and defy superiors and peers. (5) Find some happy people and get them to fight. (6) Reward success and failure, punish inaction.

(7) Decide to do something that will probably fail, then convince yourself and everyone else that success is certain. (8) Think of

some ridiculous, impractical things to do, then do them. (9) Avoid, distract, and bore customers, critics, and anyone who just wants to talk about money. (10) Don’t try to learn anything from people who seem to have solved the problems you face.

(11) Forget the past, particularly your company’s success.

Bob Sutton, Weird Ideas That Work: 11½ Ideas for Promoting, Managing, and Sustaining Innovation

Advice to Corporate Leaders: “Consider the metaphor of the windmill: You can harness raw

power but you can’t control it. … Hire artists, clowns, or other disrupters to come in and

challenge your corporate environment. … Hire a corporate anthropologist to analyze how tolerant

your organization is of deviants and other

innovators. … Once the anthropologist leaves, hire a shaman to drive out the

evil spirits of conformity. …”


Deviants, Inc. “Deviance tells the story of every mass

market ever created. What starts out weird and dangerous

becomes America’s next big corporate payday. So are you looking for the next mass market idea? It’s out there … way

out there.”


“ ‘Giant’ projects contain within them the almost certain seeds of mediocrity. The very fact of their size causes constant

scrutiny and thence ‘political’ interference. Such ‘oversight’ drains the passion of the

champions and risks—to the point of certainty—fatal ‘dumbing down’ and

thence loss of the very distinction and quirkiness sought in the first place.”—

Exec, Hollywood

Innovation Source No. 1*:

PPPs/Personally Pissed-off

People

“Branson started Virgin Atlantic because flying other airlines was

so dreadful.” —Fortune/05.13.2002

*And there is no No. 2!

Bernie Goldhirsh: Sailing his passion, but sailing mags for

yachtsmen only … start Sail. Sail a biz success, but biz

mags for corporate types only

… start Inc.

Big Idea/s

V.C. GM

PortfolioRoster

Innovation Index: How many of your Top 5

Strategic Initiatives score 7 or higher (out of 10) on a “Weirdness/Profundity

Scale”?

IX. NEW BUSINESS. NEW LEADERSHIP.

20. Re-imagine Leadership for Totally Screwed-Up

Times:

The Passion Imperative.

The Passion Imperative: The

Leadership50

The Basic Premise.

1. Leadership Is a …

Mutual Discovery Process.

“Ninety percent of what we call ‘management’ consists of making it

difficult for people to get things done.” – P.D.

“I don’t know.”

Quests!

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.”

Leaders-Teachers Do Not “Transform People”!

Instead leaders-mentors-teachers (1) provide a context which is marked by (2) access to a luxuriant portfolio of meaningful opportunities (projects) which

(3) allow people to fully (and safely, mostly—caveat: “they”

don’t engage unless they’re “mad about something”) express their innate curiosity and (4) engage in a vigorous

discovery voyage (alone and in small teams, assisted by an

extensive self-constructed network) by which those people (5) go to-create places they (and their mentors-teachers-

leaders) had never dreamed existed—and then the leaders-mentors-teachers (6) applaud like hell, stage

“photo-ops,” and ring the church bells 100 times to commemorate the bravery of their

“followers’ ” explorations!

The Leadership

Types.

2. Great Leaders on Snorting

Steeds Are Important – but

Great Talent Developers (Type I

Leadership) are the Bedrock of Organizations that Perform Over

the Long Haul.

25/8/53*(*Damn it!)

Whoops: Jack didn’t have a vision!

T.A.: 3

3. But Then Again, There Are Times When This “Cult of Personality”

(Type II Leadership) Stuff Actually Works!

“A leader is a dealer in hope.”

Napoleon

(+TP’s writing room pics)

USN&WR/What traits do successful activists share?

Studs Terkel, age 91: “They have hope, and

they imbue others with hope.”

4. Find the “Businesspeople”!

(Type III Leadership)

I.P.M. (Inspired Profit

Mechanic)

5. All Organizations

Need the Golden Leadership

Triangle.

The Golden Leadership Triangle: (1) Creator-

Visionary … (2) Talent Fanatic-Mentor-V.C. …

(3) Inspired Profit Mechanic.

The Essential Tension

— Keeper of the Flame of Creation (Brahma = Creator) — Keeper of the Flame of Preservation (Vishnu = Preserver) — Keeper of the Flame of Destruction (Shiva = Destroyer)

6. Leadership Mantra

#1: IT ALL DEPENDS!

Renaissance Men are … a snare, a

myth, a delusion!

7. The Leader Is Rarely/Never the Best Performer.

33 Division Titles. 26 League Pennants. 14

World Series: Earl Weaver—0. Tom Kelly—0. Jim Leyland—0.

Walter Alston—1AB. Tony LaRussa—132 games, 6 seasons. Tommy Lasorda—P, 26 games. Sparky

Anderson—1 season.

The Leadership

Dance.

8. Leaders …

SHOW UP!

“The first and greatest imperative of command

is to be present in person. Those who

impose risk must be seen to share it.” —John

Keegan, The Mask of Command

“A body can pretend to care, but they

can’t pretend to be there.” — Texas Bix Bender

P.S. …

Mark McCormack: 5,000 miles for a 5

min. meeting!

9. Leaders … LOVE the

MESS!

“I’m not comfortable unless

I’m uncomfortable.”—Jay Chiat

“If things seem under control, you’re just not

going fast enough.”

Mario Andretti

10. Leaders

DO!

The Kotler Doctrine:

1965-1980: R.A.F.(Ready.Aim.Fire.)

1980-1995: R.F.A.(Ready.Fire!Aim.)

1995-????: F.F.F.(Fire!Fire!Fire!)

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

11. Leaders

Re-do.

“If Microsoft is good at anything, it’s avoiding the trap of worrying about criticism. Microsoft fails constantly.

They’re eviscerated in public for lousy

products. Yet they persist, through version after version, until they get

something good enough. Then they leverage the power they’ve gained in

other markets to enforce their standard.”Seth Godin, Zooming

“The lesson is the importance of

relentless readjustment. At Microsoft they never get it right,

but they’re constantly, relentlessly adjusting. And somehow, through

constant readjustment practice over time, they gradually weave

their way to the right place.” —George Colony, Forrester Research

“Sony Electronics has a well-earned reputation for persistence. The company’s first entry into a

new field often isn’t very good. But,

as it has shown in laptops, Sony will keep trying until it gets

it right.”BusinessWeek (5/01)

“If it works, it’s

obsolete.”

—Marshall McLuhan

12. BUT … Leaders

Know When to Wait.

Tex Schramm: The

“too hard” box!

13. Leaders Are …

Optimists.

Hackneyed but none the less

true: LEADERS SEE CUPS AS “HALF

FULL.”

Half-full Cups: “[Ronald Reagan] radiated an almost transcendent

happiness.”Lou Cannon, George (08.2000)

“I’m not sure about his politics, but that’s not what made him great. He inspired people. He made us all feel better about ourselves.” —bystander,

California, during RR funeral

14. Leaders …

DELIVER!

“Leaders don’t

‘want to’ win.

Leaders ‘need to’ win.”

#49

“It is no use saying ‘We are doing our best.’ You have got to succeed in doing

what is necessary.” —WSC

“When assessing candidates, the first thing I looked for was energy and

enthusiasm for execution. Does she talk about the thrill of getting things

done, the obstacles overcome, the role her people played—or does she keep

wandering back to strategy or philosophy?” —Larry Bossidy,

Honeywell/AlliedSignal, in Execution

15. BUT … Leaders Are

Realists/Leaders Win Through LOGISTICS!

The “Gus Imperative”!

16. Leaders

FOCUS!

“To Don’t ” List

It’s T-H-R-E-E, Stupid!

“I used to have a rule for myself that at any point in time I wanted to have in mind — as

it so happens, also in writing, on a little card I carried around with me — the three big

things I was trying to get done. Three. Not two. Not four. Not five. Not ten. Three.”

— Richard Haass, The Power to Persuade

17. Leaders …

Set CLEAR DESIGN SPECS.

Danger: S.I.O. (Strategic

Initiative Overload)

JackWorld/1@T: (1) Neutron Jack. (Banish bureaucracy.) (2) “1, 2 or out” Jack. (Lead or leave.) (3)

“Workout” Jack. (Empowerment,

GE style.) (4) 6-Sigma Jack. (5)

Internet Jack. (Throughout)

TALENT JACK!

18. Leaders …

Send V-E-R-Y Clear Signals About

Design Specs!

Ridin’ with Roger: “What have you done to

DRAMATICALLY IMPROVE quality in the

last 90 days?”

If It Ain’t Broke … Break It.

19. Leaders …FORGET!/

Leaders … DESTROY!

Forget>“Learn”

“The problem is never how to get new, innovative

thoughts into your mind,

but how to get the old ones out.”

Dee Hock

Cortez!

Leaders “dump the ones who brung ’em” —Nokia, HP, 3M, PerkinElmer, Corning, etc.

20. BUT … Leaders

Have to Deliver, So They Worry About “Throwing the Baby Out with the

Bathwater.”

“Damned If You Do, Damned If You Don’t, Just Plain

Damned.”Subtitle in the chapter, “Own Up to the Great Paradox: Success

Is the Product of Deep Grooves/ Deep Grooves Destroy Adaptivity,” Liberation Management (1992)

New Product Timing: Only Three Options

Too early

Too late

Lucky

21. Leaders …

HONOR THE USURPERS.

Saviors-in-Waiting

Disgruntled CustomersUpstart CompetitorsRogue EmployeesFringe Suppliers

Wayne Burkan, Wide Angle Vision

22. Leaders Make [Lotsa] Mistakes

– and MAKE NO BONES ABOUT IT!

“Fail faster. Succeed sooner.”

David Kelley/IDEO

“Success is the ability to go from failure to

failure without losing your enthusiasm.”

Winston Churchill (as quoted by John Peterman)

Fail. Forward. Fast. –High-tech Exec

“No matter. Try again. Fail again. Fail

better.” —Samuel Beckett

23. Leaders Make …

BIG MISTAKES!

“Reward excellent

failures. Punish mediocre successes.”

Phil Daniels, Sydney exec (and, de facto, Jack)

Silicon Valley Success [Failure?] Secrets

“Pursuit of risk”: 4 of 20 in V.C. portfolio go bust; 6 lose money;

6 do okay; 3 do well; 1 hits the jackpot

Source: The Economist

Create.

24. Leaders Know that

THERE’S MORE TO LIFE THAN “LINE EXTENSIONS.” Leaders Love to CREATE NEW

MARKETS.

No one ever made it into the Business Hall of Fame on a record of

“line extensions.”

“Acquisitions are about

buying market share. Our challenge is to create markets.

There is a big difference.” Peter Job, CEO, Reuters

25. Leaders … Make Their Mark /

Leaders … Do Stuff That Matters

“I never, ever thought of myself

as a businessman. I was interested in creating

things I would be proud of.” —Richard Branson

“In 1933, Thomas J. Watson Sr. gave a

speech at the World’s Fair, ‘World Peace

through World Trade.’ We stood for something,

right?” —Sam Palmisano

Legacy!

CEO Assignment2002 (Bermuda):

“Please leap forward to 2007, 2012, or 2022, and write a business history of

Bermuda. What will have been said about your company during your

tenure?”

Ah, kids: “What is your vision for the future?” “What have you accomplished since your first book?” “Close your eyes and

imagine me immediately doing something about what you’ve just said. What would it be?”

“Do you feel you have an obligation to ‘Make the world a

better place’?”

“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

26. Leaders Push Their

Organizations W-a-y Up the Value-added/

Intellectual Capital Chain

09.11.2000: HP bids

$18,000,000,000for

PricewaterhouseCoopersConsulting business!

27. Leaders

LOVE the New Technology!

100 square feet

28. Needed? Type IV Leadership: Technology

Dreamer-True Believer

The Golden Leadership Quadrangle: (1) Creator-Visionary … (2) Talent

Fanatic-Mentor-V.C. … (3) Inspired Profit Mechanic. (4) Technology Dreamer-True

Believer

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

Talent.

29. When It Comes to

TALENT … Leaders Always Swing

for the Fences!

Talent’s Rules

1. Talent = 25/8/53 2. Some people are better than other people. Some people are a helluva lot better than other people3. Think “Roster”4. Think “V.C.”5. Talent = Brand6. Talent is what leaders do.

30. Leaders Don’t Create “Followers”:

THEY CREATE LEADERS!

“I start with the premise that the

function of leadership is to produce more leaders, not more

followers.”—Ralph Nader

Brand You, Big Time!

I AM AN ARMY OF

ONE

31. Leaders “Win Followers Over”

WHAT AN IDIOT: “Instead of employees being in the driver’s

seat, now we’re in the driver’s seat.”

PJ: “Coaching is winning

players over.”

“I didn’t have a ‘mission statement’ at Burger King. I had a dream. Very

simple. It was something like, ‘Burger King is 250,000 people, every one of

whom gives a shit.’ Every one. Accounting. Systems. Not just the drive through. Everyone is ‘in the brand.’ That’s what we’re talking

about, nothing less.”— Barry Gibbons

“The Cold War armies were not great armies, because all the decisions were made by generals and politicians. In

great armies, the job of generals is to back up their sergeants.” —COL Tom Wilhelm, from Robert

Kaplan, “The Man Who Would Be Khan,” The Atlantic, 03.2004

Passion.

32. Leaders …

Out Their

PASSION!

G.H.: “Create a ‘cause,’ not a ‘business.’ ”

“Vision is a love affair with an idea.”—Boyd Clarke & Ron

Crossland, The Leader’s Voice

“Coca-Cola was Roberto Goizueta’s painting. It was never finished, and he was never totally satisfied with it. But he had the Sistine Chapel in his head,

and he was always working on it.”

— Warren Buffett

33. Leaders Know: ENTHUSIASM

BEGETS ENTHUSIASM!

BZ: “I am a … Dispenser of Enthusiasm!”

“Until there is commitment there is hesitancy, the chance to draw back. Concerning all acts of initiative and creation, there is one elementary truth, the ignorance of which kills countless

ideas and splendid plans: that the moment one definitely commits oneself, then providence

moves too. All sorts of things occur to help one that would never otherwise have occurred.

Whatever you can do or dream you can, begin it. Boldness has genius, power and magic in it.

Begin it now!” —Johann Wolfgang von Goethe

“You can’t behave in a calm, rational manner. You’ve got to

be out there on the lunatic fringe.” — Jack Welch,

on GE’s quality program

“I’m looking for insane

commitment.” —Twyla

Tharp, The Creative Habit

“… a powerful and madly exuberant

work” —LA Times on Frank Gehry’s

Walt Disney Concert Hall (10.03)

34. Leaders Are …

in a Hurry

The Urgency Factor: LEADERS … have a distorted

sense of time. (E.g.:

Rummy thinks he asked months ago … it was the day before yesterday.)

35. Leaders Focus on the

SOFT STUFF!

“Soft” Is “Hard”

- ISOE

Message: Leadership is all about love! [Passion, Enthusiasms, Appetite for Life,

Engagement, Commitment, Great Causes & Determination to Make a

Damn Difference, Shared Adventures, Bizarre Failures, Growth, Insatiable

Appetite for Change.] [Otherwise, why bother? Just read Dilbert. TP’s final words: CYNICISM SUCKS.]

“Ph.D. in leadership. Short course: Make a short list of all

things done to you that you abhorred. Don’t do them to

others. Ever. Make another list of things done to you that you

loved. Do them to others. Always.”

— Dee Hock

The “Job” of Leading.

36. Leaders Know It’s

ALL SALES ALL THE TIME.

“Everybody lives by selling something.”

— Robert Louis Stevenson

TP: If you don’t LOVE SALES … find

another life. (Don’t pretend

you’re a “leader.”) (See TP’s The Project50.)

37. Leaders

LOVE “POLITICS.”

TP: If you don’t LOVE POLITICS … find

another life. (Don’t pretend

you’re a “leader.”)

38. But … Leaders Also

Break a Lot of China

If you’re not pissing people off, you’re not making

a difference!

39. Leaders

Give … RESPECT!

“It was much later that I realized Dad’s secret. He gained respect by giving it. He

talked and listened to the fourth-grade kids in Spring Valley who shined shoes the same way he talked and listened to a

bishop or a college president. He was seriously interested in who you were and what you had to say.”

Sara Lawrence-Lightfoot, Respect

Amen!

“What creates trust, in the end, is the leader’s

manifest respect for the followers.” — Jim O’Toole, Leading Change

Trust

“ ‘Empowerment has become the biggest gap between walk and talk in America. I hear

CEOs stand at podiums and say, ‘How do we get rid of five thousand more?’ We should

forget the word empowerment and go back to plain English. Empowerment is nothing more

than a fancy word for trust.”— Barry Gibbons

“The material of a strong, ethical base includes honoring the people who do the work, respecting the letter and the spirit of

the law, and believing that a company’s responsibility does not stop at the community’s edge. Such a base has been my moral compass. It guides me away from the sleek, the cut corner, and the easy path. The foment about corporate conduct has often

come close to arguing that it is wrong because it has been discovered. In truth, it is wrong because it violates the most

critical fundamental of business. One behaves honestly because it is right, because you ‘do unto others’—because you are

responsible for your life and, in your business, for the lives of others. There is no option—no alternative.”

—Sidney Harman/Harman International

40. Leaders Say

“Thank You.”

“The two most powerful things

in existence: a kind word and a thoughtful gesture.”

Ken Langone, CEO, Invemed Associates [from Ronna Lichtenberg, It’s Not Business, It’s Personal]

“The deepest human

need is the need to be appreciated.”

William James

“We look for ...

“... listening, caring, smiling, saying ‘Thank

you,’ being warm.”— Colleen Barrett, President, Southwest Airlines

41. Leaders Are …

Curious.

TP/08.2001: The Three Most Important Letters …

WHY?

42. Leadership Is a …

Performance.

“It is necessary for the President to be the

nation’s No. 1 actor.”

FDR

“You can’t lead a cavalry charge if you think you look funny on a

horse.” —John Peers, President, Logical

Machine Corporation

Seven Seconds to Make an Impression

— Amp up your attitude [It’s energy, stupid!] — Recognize “face value” [no “poker face”] — Give your message a mission [don’t forget your agenda] Source: Roger Ailes, CEO, Fox News, Fast Company

43. Leaders … Are The Brand

The BRAND lives (OR DIES) in the “minutiae” of the leader’s moment-

to-moment actions.

“You must be the change you

wish to see in the world.”

Gandhi

44. Leaders …

Have a GREAT STORY!

“A key – perhaps the key – to leadership is the effective

communication of a story.”

Howard Gardner Leading Minds: An Anatomy of Leadership

“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

Leaders don’t just make products and make decisions.

Leaders make meaning. – John Seely Brown

Introspection.

45. Leaders …

Enjoy Leading.

Whoops: “Great speech, Tom, but you missed the most important

point.”

“Warren, I know you want to ‘be’

president. But do you want to ‘do’

president?”

“[Bertelsmann’s Reinhard] Mohn wasn’t a creative type. What got him juiced was the

art of running an organization and motivating the people who work there.”

—Fortune/05.27.2002

46. Leaders …

KNOW THEMSELVES.

Individuals (would-be leaders) cannot engage in a

liberating mutual discovery process unless they are comfortable with their own skin. (“Leaders” who are not comfortable with themselves become petty

control freaks.)

47. But … Leaders

have MENTORS.

The Gospel According to TP: Upon having the Leadership

Mantle placed upon thine head, thou shalt never hear the unvarnished

truth again!* (*Therefore, thy needs one faithful

compatriot to lay it on with no jelly.)

48. Leaders … Take Breaks.

Zombie!Zombie!Zombie!Zombie!

The End Game.

49. Leaders ???

:

“Leadership is the PROCESS of

ENGAGING PEOPLE in CREATING a LEGACY

of EXCELLENCE.”

“ ‘It’s only business, not personal’ … IT

ALWAYS IS PERSONAL.”

“Hire smart – go bonkers – have grace – make mistakes – love technology – start all

over again.”

“LEADERS NEED TO BE THE ROCK OF

GIBRALTAR ON ROLLER BLADES”

50. Leaders Know

WHEN TO LEAVE!

Bonus …

The Leadership11

1. Talent Management2. Metabolic Management3. Technology Management4. Barrier Management5. Forgetful Management6. Metaphysical Management7. Opportunity Management8. Portfolio Management9. Failure Management10. Cause Management11. Passion Management

X. NEW BUSINESS. NEW

RULES.

21. A Re-imagineer’s Credo: Tom’s

60TIBs**TIB = This I Believe

1. TECHNICOLOR RULES! (Passion Moves Mountains!)2. Audacity Matters!3. Revolution Now!4. Question Authority! (& Hire Disrespectful People.) 5. Disorganization Wins! (LOVE THE MESS!)

6. Think 3M: Markets Matter Most. ONLY EXTREME COMPETITION STAVES OFF STALENESS. (You can take the boy out of Silicon Valley, but you can’t take Silicon Valley out of the boy!)7. Three Hearty Cheers for Weirdos. (Bill Gates, Steve Jobs, Larry Ellison, Scott McNealy, Craig Venter et al.) 8. Message 2003: Technology Change (Info-sciences, Biosciences) Is in Its Infancy! (WE AIN’T SEEN NOTHIN’ YET!)9. Everything Is Up For Grabs! Volatility Is Thy Name! (Forever & Ever. Amen.) RE-INVENT … OR DIE! 10. Big Sucks. (Mostly.) (VERY Mostly.)

11. “Permanence” Is a Snare & a Delusion. (Forget “Built to Last.” It’s Yesterday’s Idea.)12. Kaizen” (Continuous Improvement) Is … Dangerous.13. DESTRUCTION RULES!14. Forget It! (“Learning” = Easy. “Forgetting” = Nigh on Impossible.) 15. Innovation Is Easy: Hang Out with Freaks. (Employees, Board Members, Customers, Suppliers, Alliance Partners, Consultants.)

16. Boring Begets Boring. (Cool Begets Cool.)17. Think “Portfolio.” (We’re All V.C.s.)18. Perception Is All There Is. (“Insiders” … ALWAYS … overestimate the Radicalism of What They’re Up To.)19. Action … ALWAYS … Takes Precedence. Think: R.F!A./Ready. Fire! Aim. (REWARD SUCCESS. REWARD FAILURE. PUNISH … INACTION.) 20. He Who Makes & Tests the Quickest & Coolest Prototypes Reigns!

21. Haste Makes Waste. (SO GO WASTE!)22. Screw-ups are … the … Mark of Excellence. (“Do It Right the First Time” Is a Very Stupid Idea.) 23. Play Hard! Play Now! (Cherish Play!)24. TALENT TIME! (He/She Who Has the Best “Roster” Rules!)25. Re-do Education. Totally. (FOSTER CREATIVITY … NOT UNIFORMITY.) (THE NOISIEST CLASSROOM WINS.)

26. Diversity’s Hour Is Now!27. SHE … Is the Best Leader!28. MARKETING MANTRA: Embrace the “BIG THREE” Demographics. (1) SHE … is the Customer. (For everything.) (2) Rapidly Aging Boomers Have … ALL THE MONEY. (3) Green … Matters. (TRILLIONS OF $$$$$ Are at Stake.) (NOBODY … Gets It.) (Mere “Programs” Will Not Suffice.)29. Re-boot Healthcare. (UNDERSTATEMENT.)30. WHAT ARE WE SELLING? “Experiences” & “Solutions” > “Quality” & “Satisfaction.” (The Traditional Value-added Equation Is Being Set on Its Ear.)

31. DESIGN = New Seat of the Soul. 32. Branding Is for … EVERYONE. He Who Has the … BEST STORY … Takes Home the Marbles.33. DRAMATIC DIFFERENCE = Only Difference.34. WORDS/Language Matters … a Lot. (E.g.: Three Hearty Cheers for “Wow”!)35. WHAT MATTERS IS STUFF THAT MATTERS. (Query #1: “Are You Proud of It?”)

36. eALL. (IS/IT: Half-way = No Way.)37. DREAM … Big! DREAM … Enormous. DREAM … Gargantuan. (These Are XXXL Times.)38. THINK MIKE! (Michelangelo: “The greatest danger for most of us is not that our aim is too high and we miss it, but that it is too low and we reach it.”)39. There Is Only … ONE BIG ISSUE. Cross- functional Communication.40. Stop Doing Dumb Shit. (SYSTEMATIZE THE PROCESS OF “UN-DUMBING.”)

41. Beautiful Systems Are … BEAUTIFUL.42. The … WHITE-COLLAR REVOLUTION … Will Devour Everything in Its Path. 43. Take Charge of Your Destiny! BrandYou Moment! DISTINCT … OR EXTINCT!44. “Powerlessness” Is a State of Mind! Think: King. Gandhi. De Gaulle.45. Pursue Adventure … in Every Task.

46. EXCELLENCE … Is a State of Mind. (Excellence Takes a Minute.) (No Bull.)47. SHOW UP! (If You Care, You’re There.)48. YOUR CALENDAR KNOWS ALL. (You = Calendar.) (Mind Your “TO DON’T” List.)49. LIFE IS SALES. (The Rest Is Details.)50. Boss Mantra #1: “I DON’T KNOW.” (“I Don’t Know” = Permission to Explore.)

51. Management Role 1: GET OUT OF THE WAY. (Clear the Way.) (“Manager” = Hurdle Removal Professional.)52. Epitaph from Hell: “He Woulda Done Some Truly Cool Stuff … But His Boss Wouldn’t Let Him.”53. Change Takes However Long You Think It Takes. (Eschew … “Incrementalism.”)54. Respect! (Rule 1: Don’t Belittle!)55. “Thank You” Trumps All!

56. Integrity Matters! Integrity = Credibility. (Dennis K. Is a Jerk.)57. SOFT IS HARD. HARD IS SOFT. (Numbers Are Soft. People Are Not.)58. Try Sunny! (Sunny Begets Sunny. Gloomy Begets Gloomy.)59. DISPENSE ENTHUSIASM!60. FUN …Is Not a 4-Letter Word. So, too … JOY. (And … GRACE.)

Boil It Down!

Successful Businesses’ Dozen Truths: TP’s 30-Year Perspective

1. Insanely Great & Quirky Talent.2. Disrespect for Tradition.3. Totally Passionate (to the Point of Irrationality) Belief in What We Are Here to Do.4. Utter Disbelief at the Bullshit that Marks “Normal Industry Behavior.”5. A Maniacal Bias for Execution … and Utter Contempt for Those Who Don’t “Get It.”6. Speed Demons.7. Up or Out. (Meritocracy Is Thy Name. Sycophancy Is Thy Scourge.)8. Passionate Hatred of Bureaucracy.9. Willingness to Lead the Customer … and Take the Heat Associated Therewith. (Mantra: Satan Invented Focus Groups to Derail True Believers.)10. “Reward Excellent Failures. Punish Mediocre Successes.” 11. Courage to Stand Alone on One’s Record of Accomplishment Against All the Forces of Conventional Wisdom.12. A Crystal Clear Understanding of Brand Power.

All You Need to Know About “Strategy”

1. Do you have awesome Talent … everywhere? (“We are the Yankees of home improvement here in Omaha.”) Do you push that Talent to pursue audacious Quests?2. Is your Talent Pool loaded with wonderfully peculiar people who others wouldcall “problems”?3. Is your Board of Directors as cool as your product offerings … and does it have50% (or at least one-third) Women Members?4. Are Innovation and Entrepreneurship your primary aims?5. Do you routinely use hot, aspirational words-terms like “Excellence” and B.H.A.G. (Big Hairy Audacious Goal, per Jim Collins) and “Let’s make a dent in the Universe” (the Word according to Steve Jobs)?6. Do you subscribe to Jerry Garcia’s dictum: “We do not merely want to be the best of the best, we want to be the only ones who do what we do”?7. Do you embrace the new technologies with child-like enthusiasm/revolutionary zeal?8. Do you “serve” customers … or go berserk attempting to provide every customer with an “awesome experience” that automatically turns her/him into a “raving fan”?9. Are your leaders accessible? Do they wear their passion on their sleeves? Is yours a “hot place to hang out” and “learn cool stuff”?10. Does integrity ooze out of every pore of the enterprise? Is “We care” your implicit motto?11. Do you understand business mantra #1 of the ’00s: DON’T TRY TO COMPETE WITH WAL*MART ON PRICE OR CHINA ON COST? (And if you get this last idea, then see the 10 above!)

Re-imagine!*1.Empower one and all to vigorously seek WOW! in their work/projects. (Or else.)2. Encourage the entrepreneurial (Brand You) spirit in people of all ages; lead the parade of those aiming to “Free the Cubicle Slaves.”3. Urge education “bureaucrats” (From kindergarten to MBA schools) to emphasize the arts, creativity, entrepreneurial behavior.4. Seek out the bold, the strange, the misfits, the dreamers—and welcome their presence in our midst.5. Drag enthusiasm, passion, Technicolor and bold commitment out of the closet.6. Be a champion for: Women Roar! Women Rule!7. Underscore the importance of/stupendous opportunities associated with the “cool new markets”: women, boomers and geezers, Hispanics, greenies, wellness.8. Dramatically re-orient healthcare from after-the-fact “fixes” to before-the-fact attention to prevention-wellness.9. Nurture the “lesser” “intangibles”—such as design/experiences and innovation—as the prime basis for individual and enterprise success.10. Support Globalization as the best/only—if indeed messy—path to maximum human freedom, security and welfare.11. Fight bureaucratic rigidities, centralization and mindless gigantism to the death.12. Swear by the motto: “Reward excellent failures; punish mediocre successes.”13. Foster a “sense of grace and care” in enterprises and organization-client transactions of all flavors.

*Why I get out of bed in the morning/TP/07.12.2004

Sir Richard’s Rules:

Follow your passions.Keep it simple.

Get the best people to help you.Re-create yourself.

Play.

Source: Fortune/10.03

Parting Words

“In Tom’s world, it’s always better to try a swan dive and deliver a colossal belly flop than to step timidly off the board while holding your

nose.”—Fast Company /October2003

The Re-imagineer’s Credo … or, Pity the Poor Brown*

Technicolor Times demand …Technicolor Leaders and Boards who recruit …

Technicolor People who are sent on …Technicolor Quests to execute …

Technicolor (WOW!) Projects in partnership with …Technicolor Customers and …

Technicolor Suppliers all of whom are in pursuit of …Technicolor Goals and Aspirations fit for …

Technicolor Times.

*WSC

Have you changed

civilization today?Source: HP banner ad

“How Would You Play Today If You Knew You Could Not Play

Tomorrow”Source: Slogan for Loyola’s lacrosse season, from coach

Diane Geppi-Aikens (Lucky Every Day: The Wisdom of Diane Geppi-Aikens, by Chip Silverman)

“Never mind your happiness; do your

duty.” —Peter Drucker

(BrainyQuote.com)

“She made us close our eyes and hear the singers she was passionate about: Roberta

Flack and Aretha Franklin. ‘Listen to the joy in their voices,’ urged Diane. ‘It’s not the words or the music. They sing with such great passion,

such heart and soul. You can feel how the singers love what they’re doing. It’s not just a job to them. If you want to excel at anything,

you must be passionate. Otherwise, why waste your time?’ ”

Source: Lucky Every Day: The Wisdom of Diane Geppi-Aikens, by Chip Silverman)

“If you ask me what I have come to do in this

world, I who am an artist, I will reply: I am here to live my life out

loud.” — Émile Zola

“Life is not a journey to the grave with the intention of

arriving safely in a pretty and well-preserved body—but rather a skid in broadside, thoroughly used up, totally worn out, and

loudly proclaiming, ‘Wow, what a ride!’ ” —anon.

“Dream as if you’ll live

forever. Live as if you’ll die today.”

—James Dean

“the wildest chimera of a moonstruck

mind” —The Federalist on

Jefferson’s Louisiana Purchase

“You can’t behave in a calm, rational

manner. You’ve got to be out there on the lunatic fringe.” — Jack Welch

HTSH*

*Hands That Shape Humanity, a project of the Bishop Desmond Tutu Foundation

HTSH: Engage!

Commit! Engage! Try! Fail! Get up! Try again! Fail again! Try again! But never, ever stop

moving on! Progress for humanity is engendered by those who join and savor the

fray by giving one hundred percent of themselves to their dreams! Not by those timid souls who remain glued to the sidelines, stifled by tradition, and fearful of losing face or giving

offense to the reigning authorities.

Key words: Commit! Engage! Try! Fail! Persist!

HTSH: You Must Care

Make the time each day to offer an expression of appreciation to just one of your fellow human

beings. It is the accumulation of such “small” kindnesses and acts of recognition that add up to a life worth having been lived. In short … you

must care. You must wear your passion and compassion on your sleeve, and attend

assiduously to the moment. It will not come ‘round again.

Key word: Care

It is the foremost task—and responsibility—of our generation to

re-imagine our enterprises, private and public. —from the Foreword,

Re-imagine: Business Excellence in a Disruptive Age

Thank You!

Two Weeks in July 2004: Not Your Father's World!

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