Uncomfortable Truths2001

Tom Peters

SDRC/Orlando/05.30.2001

1. The Performance of Big Companies

Stinks!

Forbes100 from 1917 to 1987: 39 members of the Class of ’17 were alive in ’87; 18 are in ’87 F100; the 18 F100 “survivors” underperformed the market by

20%; just 2 (2%), GE & Kodak, outperformed the market from 1917 to 1987.

S&P 500 from 1957 to 1997: 74 members of the

Class of ’57 were alive in ’97; 12 (2.4%) of 500 outperformed the market from 1957 to 1997.

Source: Dick Foster & Sarah Kaplan, Creative Destruction: Why Companies That Are Built to Last Underperform the

Market

“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

2. The Web:

100% or Don’t Bother!

“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

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

3. Get a [NEW] Metabolism/Life!

“We don’t sell insurance

anymore. We sell speed.”

Peter Lewis, Progressive

Enron = 1000X in

12 months.

4. Web-driven White Collar Roadkill Will

Amount to about

100%

108 X 5vs.

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

90+% of White Collar Jobs Will Be Destroyed

or Re-configured Beyond Recognition in the Next

10 Years.

5. All Are in Desperate

Pursuit of New Sources of Value

Added

11 September 2000

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]

“We want to be the air traffic

controllers of electrons.”

Bob Nardelli, GE Power Systems

“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)

GE … IBM … UPS … Springs … General Mills … Anheuser-Busch …

Carpet One … Etc. … Etc.

6. Learn Not to Be Careful

“Reward excellent failures. Punish

mediocre successes.”Phil Daniels, Sydney exec

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

“Learn not to be careful.”

Photographer Diane Arbus to her students (Careful = The sidelines,

per Harriet Rubin in The Princessa)

“There is 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

Internet …

… allows you to dream dreams

you could never have dreamed

before!

7. Pursue

Radical Simplicity!

“Revenues on the Web

are determined almost completely

by usability.”Jakob Nielsen (The Economist 04.28.01)

8. Systems Must be Designed to

Cope with & Exploit Ambiguity

“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

“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 (08.00)

Think Organization & Systems Design that Promotes … Agility

… Plasticity … Impermanence.

9. (Change-the-World) Project Management Is

Politics! (Period.)

Message: eBusiness 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

eBusiness/B2B/Internet-supply chain strategy in a low-trust, bottlenecked-

communication, six-layer organization.

People.Politics.Trust.

10. Talent!

“When land was the productive asset, nations

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

Stan Davis & Christopher Meyer, futureWEALTH

Message: Some people are better than other

people. Some people are a helluva lot better than other

people.

“We have transitioned from an asset-based strategy

to a talent-based strategy.”

Jeff Skilling, CEO, Enron

Enron

COO: Louise Kitchen, F, 29; created

EnronOnline as “Skunkworks”

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

outshine their male counterparts in almost

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

“Collaboration” is a BIG Word. Hint:

Women Collaborate & Connect. Men Posture &Fight.

“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 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

QCC/Quick Culture Change

Hire Weird

Promote Deep

Rule of Three (3 = Critical Mass)

Nasser’s Triad*: The Internet Is the New Job 1

Brian Kelley, 40, head of global sales and service (GE appliances); first non-“car guy”

in the job

Karen Francis, 38, eBusiness czar (Olds brand boss)

Marv Adams, 43, CIO (Bank One’s IT infrastructure consolidator)

* All three are “direct reports”

11. THE

PRODUCT [Still] MATTERS!

“Companies have defined so much ‘best practice’

that they are now more or less identical.”

Jesper Kunde, A Unique Moment

“The ‘surplus society’ has a surplus of

similar companies, employing

similar people, with similar educational backgrounds, working in

similar jobs, coming up with similar

ideas, producing similar things, with

similar prices and similar quality.”

Kjell Nordstrom and Jonas Ridderstrale, Funky Business

“We make over three new product announcements a

day. Can you remember them?

Our customers can’t!”Carly Fiorina

12. Pursue & Engage Freaks!

“Our strategies must be tied to leading edge

customers on the attack. If we focus on the defensive

customers, we will also become defensive.”

John Roth, CEO, Nortel

“The highest performing companies have well-developed systems for killing ideas

their customers don’t want. As a result, these companies find it very difficult to invest adequate resources in disruptive

technologies—lower margin opportunities that their customers don’t want—until they

want them. And by then it’s too late.”

Clayton Christensen, The Innovator’s Dilemma

Saviors-in-Waiting

Disgruntled CustomersFringe CompetitorsRogue Employees

Edge SuppliersWayne Burkan, Wide Angle Vision: Beat the

Competition by Focusing on Fringe Competitors, Lost Customers, and Rogue

Employees

13. To Lead Is to Inflame!

“Create a Cause, not a ‘business.’

”Gary Hamel, Fortune (06.00), on re-inventing a

company (Exemplar #1: Charles Schwab)

“Let’s make a dent in the universe.”

Steve Jobs