Tom Peters’ EXCELLENCE. ALWAYS. ONO/Management Forum Madrid/30 November 2006

tompeters.com Slides* at … tompeters.com *also see LONG version

EXCELLENCE. ALL. YOU. NEED. TO. KNOW.

25

EXCELLENCE. ANY MARKET. ANYWHERE. ANY TIME.

Jim’s Group

EX-CELL- ENCE. NOT.

Buy a very large one and just wait.” “I am often asked by would-be entrepreneurs seeking escape from life within huge corporate structures, ‘How do I build a small firm for myself?’ The answer seems obvious: Buy a very large one and just wait.” —Paul Ormerod, Why Most Things Fail: Evolution, Extinction and Economics

, outperformed the market from 1917 to “Forbes100” from 1917 to 1987 : 39 members of the Class of ’17 were alive in ’87; 18 in ’87 F100; 18 F100 “survivors” significantly underperformed the market; just 2 (2%), GE & Kodak, outperformed the market from 1917 to Source: Dick Foster & Sarah Kaplan, Creative Destruction: Why Companies That Are Built to Last Underperform the Market

Top half 30 Welcome to the “Club of Shattered Dreams”: Of Korea’s Top 100 companies in 1955, only 7 were still on the list in The 1997 crisis “destroyed half of Korea’s 30 largest conglomerates.” Source: “KET Issue Report,” Kim Jong Nyun ( )

Low Risk 41% 13% High Risk35% 73% S&P Stability Ratings* Low Risk 41% 13% Average Risk 24% 14% High Risk 35% 73% *Likelihood of stable long-term earnings growth Source: Fortune (2 October 2006)

Netscape! Where would you rather have worked for those 5 years TP#1*: Netscape! *Where would you rather have worked for those 5 years, Netscape or IBM-HP-Microsoft-Oracle? (Where, 25 years from now, would you rather to be able to tell someone—e.g., grandchild—that you worked?)

EXCELLENCE. SIBERIA.

“Why in the world did you go to Siberia?”

Raging Success = P-SQUARED. C. E-CUBED.

People. Product. Clients. Execution. Enthusiasm. Excellence.

Excellence1982: The Bedrock “Eight Basics” 1. A Bias for Action 2. Close to the Customer 3. Autonomy and Entrepreneurship 4. Productivity Through People 5. Hands On, Value-Driven 6. Stick to the Knitting 7. Simple Form, Lean Staff 8. Simultaneous Loose-Tight Properties”

The older I get the less boring the “basics” become!

EXCELLENCE. INNOVATE. OR. DIE.

“ It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.” “ It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.” —Charles Darwin

EXCELLENCE. INNOVATE. ALL. WRONG.

“ I don’t believe in economies of scale. You don’t get better by being bigger. You get worse.” —Dick Kovacevich/Wells Fargo

“When asked to name just 1 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

EXCELLENCE. INNOVATE.. EXCELLENCE. INNOVATE. TACTICS.

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

you only find oil if you drill wells. “ This is so simple it sounds stupid, but it is amazing how few oil people really understand that you only find oil if you drill wells. You may think you’re finding it when you’re drawing maps and studying logs, but you have to drill.” Source: The Hunters, by John Masters, Canadian O & G wildcatter

READY. FIRE! AIM. READY. FIRE! AIM. Ross Perot (vs “ Aim! Aim! Aim!” /EDS vs GM/1985)

“We made mistakes, of course. Most of them were omissions we didn’t think of when we initially wrote the software. We fixed them by doing it over and over, again and again. We do the same today. While our competitors are still sucking their thumbs trying to make the design perfect, we’re already on prototype version # 5. By the time our rivals are ready with wires and screws, we are on version ready with wires and screws, we are on version # 10. It gets back to planning versus acting: We act from day one; others plan how to plan— for months.” —Bloomberg by Bloomberg # 10. It gets back to planning versus acting: We act from day one; others plan how to plan— for months.” —Bloomberg by Bloomberg

tolerate [encourage?] failure

Sam’s Secret #1!

Speed/ Tempo/ is-it-Telecom

FedEx Economy “the FedEx Economy” —headline/New York Times/

Anything/ Anywhere/ Anytime “Any3”: Anything/ Anywhere/ Anytime

Wal*Mart (!) & Katrina

Power Tools For Power Strategies

place big bets

Big Big “ Beware of the tyranny of making Small Changes to Small Things. Rather, make Big Changes to Big Things.” —Roger Enrico, former Chairman, PepsiCo

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

measure

Innovation Index: How many of your Top 5 Strategic Initiatives/Key Projects score 8 or higher [out of 10] on a “Profound”/ “Amazing”/“Game- changer” Scale?

re-imagine the “value added” equation

Up, Up, Up, Up Up, Up, Up, Up the Value-added Ladder.

$55B

“Big Brown’s New Bag: UPS Aims to Be the Traffic Manager for Corporate America” “Big Brown’s New Bag: UPS Aims to Be the Traffic Manager for Corporate America” —Headline/BW/2004

Gamechanging Solutions/ Implemented Customer culture change & success The [NEW] “Value-added Ladder” Gamechanging Solutions/ Implemented Customer culture change & success Services/Transactions Manufactured Goods/Things Extracted Raw Materials/Stuff

PSF

Up, Up, Up, Up Up, Up, Up, Up the Value-added Ladder.

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

“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 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

spellbinding Experiences Gamechanging Solutions The [NEW] “Value-added Ladder” spellbinding Experiences Gamechanging Solutions Services Goods Raw Materials

Up, Up, Up, Up Up, Up, Up, Up the Value-added Ladder.

We sell dreams We convert ‘needs’ into ‘dreams.’ Sales are the inevitable result.” 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

dreams come true spellbinding Experiences Gamechanging Solutions The [NEW] “Value-added Ladder” dreams come true spellbinding Experiences Gamechanging Solutions Services Goods Raw Materials

Dream Merchants : IBM UPS

[totally] re-imagine the business around the two staggering “new” opportunities

women

the “Women are the majority market” —Fara Warner/The Power of the Purse

“Forget China, India and the Internet : Economic Growth Is Driven by Women. ” —Headline, Economist, April 15, 2006, Leader, page 14

“One thing is certain: Women’s rise to power, which is linked to the increase in wealth per capita, is happening in all domains and at all levels of society. Women are no longer content to provide efficient labor or to be consumers with rising budgets and more autonomy to spend. … This is just the beginning. The phenomenon will only grow as girls prove to be more successful than boys in the school system. For a number of observers, we have already entered the age of ‘womenomics,’ the economy as thought out and practiced by a woman.” “One thing is certain: Women’s rise to power, which is linked to the increase in wealth per capita, is happening in all domains and at all levels of society. Women are no longer content to provide efficient labor or to be consumers with rising budgets and more autonomy to spend. … This is just the beginning. The phenomenon will only grow as girls prove to be more successful than boys in the school system. For a number of observers, we have already entered the age of ‘womenomics,’ the economy as thought out and practiced by a woman.” —Aude Zieseniss de Thuin, Financial Times,

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

94% of loans to … women* *M icrolending; “Banker to the poor”; Grameen Bank; Muhammad Yunus; 2006 Nobel Peace Prize winner

rapidly aging population

Stats Stats 18-44: -1% 55+: +21% (55-64: +47% )

“New Customer Majority” 44-65: “New Customer Majority” * *45% larger than 18-43; 60% larger by 2010 Source: Ageless Marketing, David Wolfe & Robert Snyder

!!!!!!!!!!!!!!!!! “People turning 50 today have more than half of their adult life ahead of them.” “People turning 50 today have more than half of their adult life ahead of them.” —Bill Novelli, 50+: Igniting a Revolution to Reinvent America

EXCELLENCE

4/40

De-centralization execution accountability 6:15a.m.

“If if feels painful and scary—that’s real delegation” “If if feels painful and scary—that’s real delegation” —Caspian Woods, small biz owner

De-centralization execution accountability 6:15a.m.

“ Execution is the job of the business leader.” —Larry Bossidy “ Execution is the job of the business leader.” —Larry Bossidy & Ram Charan/ Execution: The Discipline of Getting Things Done

De-centralization execution accountability 6:15a.m.

“GE has set a standard of candor. … There is no puffery. … There isn’t an ounce of denial in the place.” “GE has set a standard of candor. … There is no puffery. … There isn’t an ounce of denial in the place.” —Kevin Sharer, CEO Amgen, on the “GE mystique” (Fortune)

De-centralization execution accountability 6:15a.m.

6:15a.m.

EXCELLENCE. BEDROCK. TALENT.

Hire very good people!

20 40 $25$802 “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

INVITE THEM TO JOIN US IN A JOURNEY TO EXCELLENCE!

“In the end, management doesn’t change culture. Management … invites the workforce itself to change the culture.” “In the end, management doesn’t change culture. Management … invites the workforce itself to change the culture.” —Lou Gerstner

“The role of the Director is to create a space where the actor or actress can become more than they’ve ever been before, more than they’ve dreamed of being.” “The role of the Director is to create a space where the actor or actress can become more than they’ve ever been before, more than they’ve dreamed of being.” —Robert Altman, Oscar acceptance

PUT HR AT THE HEAD OF THE HEAD TABLE.

A review of Jack and Suzy Welch’s Winning claims there are but two key differentiators that set GE “culture” apart from the herd: First: Separating financial forecasting and performance measurement. Performance measurement based, as it usually is, on budgeting leads to an epidemic of gaming the system. GE’s performance measurement is divorced from budgeting—and instead reflects how you do relative to your past performance and relative to competitors’ performance; i.e., it’s about how you actually do in the context of what happened in the real world, not as compared to a gamed-abstract plan developed last year. Putting HR on a par with finance and marketing. Second: Putting HR on a par with finance and marketing.

LIVE FOR TALENT!

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. 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

Brand = Talent.

People! People!

EXCELLENCE. BEDROCK. LEADERSHIP.

“People want to be part of something larger than themselves. They want to be part of something they’re really proud of, that they’ll fight for, sacrifice for, trust.” “People want to be part of something larger than themselves. They want to be part of something they’re really proud of, that they’ll fight for, sacrifice for, trust.” — Howard Schultz, Starbucks (IBD/09.05)

“ Nothing is so contagious as enthusiasm.” “ Nothing is so contagious as enthusiasm.” —Samuel Taylor Coleridge

“ You must be the change you wish to see in the world.” “ You must be the change you wish to see in the world.” Gandhi

The First step in a ‘dramatic’ ‘organizational change program’ is obvious— dramatic personal change!” “The First step in a ‘dramatic’ ‘organizational change program’ is obvious— dramatic personal change!” —RG

Relentless: “One of my superstitions had always been when I started to go anywhere or to do anything, not to turn back, or stop, until the thing intended was accomplished.” Relentless: “One of my superstitions had always been when I started to go anywhere or to do anything, not to turn back, or stop, until the thing intended was accomplished.” —Grant

“Leaders ‘do’ people. Period.” “Leaders ‘do’ people. Period.” —Anon.

PURPOSE. PASSION. Presence. Personal. PERSISTENCE. PEOPLE.

EXCELLE ALWAYS.