LONG Tom Peters’ EXCELLENCE. ALWAYS LONG Tom Peters’ EXCELLENCE. ALWAYS. World Business Forum Frankfurt/24October2006

Slides at … tompeters.com

The Irreducible209+/ The Sales122/ 60TIBs/ Tom-A-to, Tom-ah-to

HA. HA. HA. HA. HA. HA. HA. HA. HA. HA. HA. HA. HA. HA. HA.

“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

“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 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

Franchise Lost! TP: “How many of you [600] really crave a new Chevy?”

“Ford, GM and Chrysler do not just make cars expensively … they make bad cars expensively.” —Investec analyst, International Herald, 0805.06

HA. HA. HA. HA. HA. HA. HA. HA. HA. HA. HA. HA. HA. HA. HA.

“It is generally much easier to kill an organization than change it substantially.” —Kevin Kelly, Out of Control

Message/Implication: go for it! C.E.O. to C.D.O.

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?)

Those Are Big Numbers …

5 (Years) /42 (New Airports)

“Deutsche Bank Moves Half of Its Back-office Jobs to India”/ headline/FT/27.03.06 (500 of 900 Research)

“There is no job that is America’s God-given right anymore “There is no job that is America’s God-given right anymore.” —Carly Fiorina/HP/January2004

“There is no job that is _____’s God-given right anymore “There is no job that is _____’s God-given right anymore.” —Carly Fiorina/HP/January2004

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

25

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Jim’s Group

EXCELLENCE. SIBERIA.

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

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”

ExIn*: 1982-2002/Forbes.com DJIA: $10,000 yields $85,000 EI: $10,000 yields $140,050 *Forbes/Excellence Index /Basket of 32 publicly traded stocks

EXCELLENCE. THE WORD.

Synonyms Purity Transcendence Virtue Elegance Majesty Antonyms Mediocrity

EXCELLENCE. SIBERIA.

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

Business* ** (*at its best): An emotional, vital, innovative, joyful, creative, entrepreneurial endeavor that elicits maximum concerted human potential in the wholehearted service of others.*** **Excellence. Always. ***Employees, Customers, Suppliers, Communities, Owners, Temporary partners

EXCELLENCE. INNOVATE. OR. DIE.

“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

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

“A focus on cost-cutting and efficiency has helped many organizations weather the downturn, but this approach will ultimately render them obsolete. Only the constant pursuit of innovation can ensure long-term success.” —Daniel Muzyka, Dean, Sauder School of Business, Univ of British Columbia (FT/2004)

More Than $$$$ #1 R&D spending, last 25 years/USA?

GM

“I don’t believe in economies of scale “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 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

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

“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

“We have a ‘strategic plan. ’ It’s called doing things “We have a ‘strategic plan.’ It’s called doing things.” — Herb Kelleher

“Experiment fearlessly” Source: BW0821 “Experiment fearlessly” Source: BW0821.06, Type A Organization Strategies/ “How to Hit a Moving Target”—Tactic #1

ready with wires and screws, we are on version “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 #10. It gets back to planning versus acting: We act from day one; others plan how to plan—for months.” —Bloomberg by Bloomberg

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

“You miss 100 percent of the shots you never take.” —Wayne Gretzky

3. Autonomy and Entrepreneurship 4. Productivity Through People 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”

tolerate [encourage?] failure

Sam’s Secret #1!

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

Speed/ Tempo

“the FedEx Economy” —headline/New York Times/10.08.05

“Any3”: Anything/ Anywhere/ Anytime

re-imagine the “value added” equation

$55B

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

Are you … “Rock Stars of the Age of Talent”

Department Head to … Managing Partner, IS [HR, R&D, etc.] Inc.

HCare CIO: “Technology Executive” (workin’ in a hospital) Or/to: Full-scale, Accountable (life or death) Member-Partner of XYZ Hospital’s Senior Healing-Services Team (who happens to be a techie)

“Experiences are as distinct from services as services are from goods “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

“Rebel Lifestyle!”/Premier “Tattoo Brand”/“Lovemark” “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-Davidson exec, Results-Based Leadership

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

Furniture vs. Dreams “We do not sell ‘furniture’ at Domain 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”: IBM

“Design is treated like a religion at BMW.” —Fortune

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

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

Women’s Trifecta+. Buy/all. Wealth/all Women’s Trifecta+ *Buy/all *Wealth/all *Lead/ better +Eclipse of males/whoops (Retire-old/Poorly educated-young)

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

“She knows more about the [Volvo] than the salesman who greets her at the door. But how is she treated? As if she has a low IQ , is slightly hard of hearing , and really has no right to be buying a luxury car; and if she brought a male friend with her, odds are 10:1 that the clueless salesperson spent most of his time speaking to him .” —Selling to Men, Selling to Women, Jeffery Tobias Halter

“Women don’t buy brands. They join them.” EVEolution

“Goldman Sachs in Tokyo has developed an index of 115 companies poised to benefit from women’s increased purchasing power; over the past decade the value of shares in Goldman’s basket has risen by 96%, against the Tokyo stockmarket’s rise of 13%.” —Economist, 15 April 2006

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

“Since 1970, women have held two out of every three new jobs created “Since 1970, women have held two out of every three new jobs created.” —FT, 10.03.2006

1. Participation rate/2 of 3 new jobs, last 30 years. 2 1. Participation rate/2 of 3 new jobs, last 30 years. 2. Male workforce departures/SENIOR male workforce departures. 3. Shrinking pay gap/same jobs. 4. More senior positions. Greater decision- making/expenditure/org design authority. More line jobs. 5. Female solo head-of-household growing. 6. Longevity. 7. Education. 8. More effective money management.

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

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

2000-2010 Stats 18-44: -1% 55+: +21% (55-64: +47%)

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

Boomers’-Geezers’-Women’s Trifecta+. Buy/all. Wealth/all Boomers’-Geezers’-Women’s Trifecta+ *Buy/all *Wealth/all *time left/ lots *Eclipse of males/retire-die

We become who we spend time with!

Measure “Strangeness”/Portfolio Quality Staff Consultants Vendors Out-sourcing Partners (#, Quality) Innovation Alliance Partners Customers Competitors (who we “benchmark” against) Strategic Initiatives Product Portfolio (LineEx v. Leap) IS/IT Projects HQ Location Lunch Mates Language Board

“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/Harvard Business Review

go for it

“[Immelt] is now identifying technologies with which GE will … systematically set out to build entirely new industries” —Strategy+Business, Fall 2005

EXCELLENCE. 1966. 2006.

4/40

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

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

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

“Execution is a systematic process of rigorously discussing hows and whats, tenaciously following through, and ensuring accountability.” —Larry Bossidy & Ram Charan/ Execution: The Discipline of Getting Things Done

“GE has set a standard of candor. … There is no puffery “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.

EXCELLENCE. BEDROCK. TALENT.

Hire very good people!

“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

EMPHASIZE THE “SOFT SKILLS.”

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INVITE THEM TO JOIN US IN A JOURNEY TO EXCELLENCE!

“In the end, management doesn’t change 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.” —Robert Altman, Oscar acceptance

PUT HR AT THE HEAD OF THE HEAD TABLE. BEST PEOPLE. NOBLEST MISSION.

Second: Putting HR on a par with finance and marketing. 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. Second: Putting HR on a par with finance and marketing.

LIVE 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

SO YOU’RE A “PEOPLE PERSON”? PROVE IT.

PARC’s Bob Taylor: “Connoisseur of Talent”

“Leaders ‘do’ people. Period.” —Anon.

Brand = Talent.

EXCELLENCE. INDIVIDUAL. BRAND YOU.

“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

Distinct … or … Extinct

New Work SurvivalKit.2006 1. MASTERY! (Best/Absurdly Good at Something!) 2. “Manage” to Legacy (All Work = “Memorable”/“Braggable” WOW Projects!) 3. A “USP”/UNIQUE SELLING PROPOSITION 4. Rolodex Obsession (From vertical/hierarchy/“suck up” loyalty to horizontal/“colleague”/“mate” loyalty) 5. ENTREPRENEURIAL INSTINCT (A sleepless … Eye for Opportunity! 6.CEO/LEADER/BUSINESSPERSON/CLOSER (CEO, Me Inc. 24/7!) 7. Master of Improv (Play a dozen parts simultaneously, from Chief Strategist to Chief Toilet Scrubber) 8. Sense of Humor (A willingness to Screw Up & Move On) 9. Comfortable with Your Skin (Bring “interesting you” to work!) 10. Intense Appetite for Technology (E.g.: How Cool-Active is your Web site? Do you Blog?) 11. EMBRACE “MARKETING” (Your own CSO/Chief Storytelling Officer) 12. PASSION FOR RENEWAL (Your own CLO/Chief Learning Officer) 13. EXECUTION EXCELLENCE! (Show up on time! Leave last!)

EXCELLENCE. BEDROCK. LEADERSHIP.

“People want to be part of something larger than themselves “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.” —Samuel Taylor Coleridge

“Most important, he upped the energy level at Motorola “Most important, he upped the energy level at Motorola.” —Fortune on Ed Zander/08.05

“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!” —RG

“Success seems to be largely a matter of hanging on after others have let go.” —William Feather, author

“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.” —Anon.

PURPOSE. PASSION. Presence. PERSISTENCE. PEOPLE.

You only find oil if you drill wells. —The Hunters, by John Masters, Canadian O & G wildcatter

EXCELLE ALWAYS.