WebWorld: The 100% Solution Tom Peters 2001 Clarus eC Leadership Conference Chicago/15 May 2001

Today’s Slides Available at … tompeters.com (Also see “WebWorld: The 100% Solution” – the document)

“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 entering an era of no limits, with nothing to brake the cascade of human intelligence unleashed by the Information Age. The Web essentially allows all the brains on earth to communicate and share insights in real time, around the globe, all the time.” Jeffrey Young, Cisco Unauthorized

prior 900 years 1900s: 1 st 20 years > 1800s 2000: 10 years for paradigm shift 21 st century: 1000X tech change than 20 th 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, talk april2001

Part I: Brand Inside Part II: Brand Outside Part III: Brand Leadership

Work I The Destruction Imperative!

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

The [New] G e Way DYB.com

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

Message: Destroy to Create!

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 CompanyFast Company

Brand Inside Brand Org: Lean, Linked, Electronic & Malleable

“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)

White Collar Revolution!

The Pincer 5 “Destructive” entrepreneurs/ Global Competition “White Collar Robots” THE INTERNET! [E.g.: GM + Ford + DaimlerChrysler] Global Outsourcing [E.g.: India, Ghana] Speed!!

108 X 5 vs. 8 X 1* * 540 vs. 8 (-98.5%)

80,000?

Brand Inside Brand Work: The Professional Service Firm Model & The WOW Project

11 September 2000

: HP bids $18,000,000,000 for PricewaterhouseCoopers Consulting business!

[“These days, building the best server isn’t enough. That’s the price of entry.” Ann Livermore, Hewlett Packard]

% Rev From Service: GE (80%) … IBM (80%) … HP … Sun … UTC … Springs …????

Answer: PSF! [Professional Service Firm] Department Head to … Managing Partner, HR [IS, etc.] Inc.

Maybe one [or more] of your “PSFs” becomes the tail that wags the dog????? [E.g.: engineering, IS-logistics- customer service]

New Orleans April 2000: NAPM

“You are the … Rock Stars of the B2B Age!”

The Raw Material … The WOW Project!

“Reward excellent failures. Punish mediocre successes.” Phil Daniels, Sydney exec

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. Michelangelo

Joe J. Jones 1942 – 2001 HE WOULDA DONE SOME REALLY COOL STUFF BUT … HIS BOSS WOULDN’T LET HIM!

“Learn not to be careful.” Photographer Diane Arbus to her students (Careful = The sidelines, per Harriet Rubin in The Princessa)Harriet Rubin

Brand Inside Brand Talent: The Great War for Talent

“When land was the productive asset, nations battled over it. The same is happening now for talented people.” Stan Davis & Christopher Meyer, futureWEALTH

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 ( )

“We have transitioned from an asset-based strategy to a talent-based strategy.” Jeff Skilling, CEO, Enron

Message: Some people are better than other people. Some people are a helluva lot better than other people.

“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 ( )

What gets measured gets done. What gets paid for gets done more. What gets paid a lot for gets done a lot more.

“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

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

“AS LEADERS, WOMEN RULE: New Studies find that female managers outshine their male counterparts in almost every measure” Title, Special Report, Business Week,

Mantra2001 Talent = Brand

What’s your company’s … EVP? Employee Value Proposition, per Ed Michaels et al., The War for Talent

EVP = Challenge, professional growth, respect, satisfaction, opportunity, reward Source: Ed Michaels et al., The War for TalentEd Michaels

Brand Inside Reprise

N.W.O.: Was Is Is Pine-paneled Office Address: 1 Big Man Plaza Secretary Suit Formal Rank conscious Pretense (“Failures are for fools.”) I love “Yes men” Self-contained Seat 9B, UA233 Address: Typing: 60 WPM Casual M-F Approachable We are a HOT Team Screwing up is as normal as breathing I love Misfits! I love partners

Part I: Brand Inside Part II: Brand Outside Part III: Brand Leadership

Work II The Commodity Trap

“Companies have defined so much ‘best practice’ that they are now more or less identical.” Jesper Kunde, A Unique Moment Jesper Kunde

“The ‘surplus society’ has a surplus of similar companies, employing similar people, with similar educational backgrounds, working in similar jobs, coming up with similar ideas, producing similar things, with similar prices and similar quality.” Kjell Nordstrom and Jonas Ridderstrale, Funky Business

Brand Outside Strategy 1 : Use E-Commerce to Re-invent Everything!

Tomorrow Today: Cisco! 90% of $20B (=$50M/day) 75% mfg. outsourced; 50% of orders routed to supplier who ships direct Gross margin: 65%; Net margin: 28% Annual savings in service and support from customer self-management: $550M

Enron eWorld: “Price a structured trade,” per John Arnold, 26: Early 1999: 30 times a day. Late 2000: 30 times per … minute. Long-term gas contract. 1989: 9 months, 400+ deals. Late 90s: 2 weeks, 2 per week. Late 2000: 5 such deals per day Source: (1/2001)

“This is the first meter of a 10-kilometer race. Eventually, all markets will come to resemble today’s foreign exchange market.” Hamid Biglari, Head of Corporate Strategy, Citigroup, in “GIGATRENDS”, Wired 04.01

RADICAL STRATEGIES REQUIRED

“One cannot be tentative about this. Excuses like ‘channel conflict’ or ‘marketing and sales aren’t ready’ cannot be allowed. Delay and you risk being cut out of your own market, perhaps not by traditional competitors but by companies you never heard of 24 months ago.” Jack Welch [07.00/Forbes.com]07.00/Forbes.com

GE & the Web Purchasing: 2000: $6B; 2001: $15B Sales: 1999: $1B; 2000: $7B; 2001: $20B+ Source: Business 2.0 (05.01)

GE Miscellany … Appliances: $5 to 20 cents, Web vs. call Service Rep; 20 million calls per year Source: Fast Company

WebWorld = Everything Web as a way to run your business’ innards Web 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 Life Web = Everything (P.D. to after-sales) Web forces you to focus on what you do best Web as entrée, at any size, to World’s Best at Everything as next door neighbor

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

“E-business is the final nail in the coffin for bureaucracy at GE.” Jack Welch/ GE Annual Report 2000

“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

I’net … … allows you to dream dreams you could never have dreamed before!

TP Message 2001: Only idiots pull in their [investment] horns during a downturn.

“Believe in the Internet … MORE THAN EVER.” Andy Grove, Cover quote, Wired (June )

Brand Outside Strategy 5 : It’s the Experience!

“ 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

“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

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

Message: “Experience” is the “last 80%.” “Experience” applies to all work!

WebWorld Simplicity !

“Revenues on the Web are determined almost completely by usability.” Jakob Nielsen (The Economist )

Brand Outside Strategy 6 : BRAND POWER!

“WHO ARE WE?”

“EXACTLY HOW ARE WE DIFFERENT?”

WHAT’S OUR STORY?

“WHY DOES IT MATTER TO THE CLIENT?”

“EXACTLY HOW DO I CONVEY THAT DIFFERENCE TO THE CLIENT ”

WebStrategy2001 is the heart of your Brand Promise.

“This” [2001 Clarus eC Leadership Conference] is NOT about “efficiency.” It is about “WHO WE ARE.”

Part I: Brand Inside Part II: Brand Outside Part III: Brand Leadership

Brand Leadership Passion Rules!

“Let’s make a dent in the universe.” Steve Jobs