Rollercoaster Days: Learning to … Rock & Roll Rollercoaster Days: Learning to … Rock & Roll! Tom Peters Treasury Management Association Windy City Summit 23 May 2001

“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

<1000A.D.: paradigm shift: 1000s of years 1000: 100 years for paradigm shift 1800s: > prior 900 years 1900s: 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, talk april2001

CEOs appointed after 1985 are 3X more likely to be fired than CEOs appointed before 1985 Warren Bennis, MIT Sloan Management Review

“We are in a brawl with no rules.” Paul Allaire

S.A.V.

The Kotler Doctrine: 1965-1980: R. A. F. (Ready. Aim. Fire 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!)

Read It Closely: “We don’t sell insurance anymore. We sell speed Read It Closely: “We don’t sell insurance anymore. We sell speed.” Peter Lewis, Progressive

The [New] Ge Way DYB.com

Job 1/Requirement 1: Systems & Procedures Fit to Deal with Utter Madness.

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

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

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

Headline: “Bank of America to Cut … 10,000 Jobs” “Middle-level and senior managers are expected to be the principal targets of the job cutbacks.” Source: The New York Times (07.29.2000)

White Collar Revolution!

80,000?

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

So what will be the Basic Building Block of the New Org?

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

11 September 2000

09.11.2000: HP bids $18,000,000,000 for PricewaterhouseCoopers Consulting business!

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

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

The Raw Material … The WOW Project!

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

Message/Query: Are Your Projects as “Mad” as the Mad Times Demand?

Message/Query: Are You Understand the Full Potential of Your “Business”/PSF?

Brand Inside Brand Talent: The Great War for Talent

“When land was the productive asset, nations battled over it “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 (05.17.00)

“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)

“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

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

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

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

Brand Inside Brand Action: Getting Started … a Personal Perspective

Topic: Boss-free Implementation of STM /Stuff That MATTERS! Implementing offbeat stuff … that matters … is the whole point! And there is a proven – if unconventional route – I believe. Basic premise: Avoid “selling up” like the plague! No surprise: If you are selling revolution … don’t bet the farm on getting the support of the current establishment. MOST OF THE FOLLOWING 53 SLIDES ARE HEAVILY ANNOTATED. That is, accompanied by an extensive [in most cases] Notes page. Please feel free to download … and steal! Tom Peters. Cape Poge. Martha’s Vineyard. 20July2000.

THE IDEA “4Fs”: Find a Fellow Freak Faraway Topic #1: THE MAIN IDEA. You need at first a [one!!!!] buddy who shares your peculiar passion … and who will play with you. [Play = Big Word. Much more later.]

World’s Biggest Waste … Selling “Up” Yes it is! BIGGEST WASTE! People – bosses especially – are not impressed by intellectual arguments, from 26-year-olds or 46-year-olds. [Particularly when it comes to revolutionary – nonestablishment – ideas. THEY ARE IMPRESSED BY RESULTS! So forget the “perfect” presentation, long labored over. Hey, forget the boss. Instead …

Heart of the Matter F2F. /K2K. /1@T/R. F. A Heart of the Matter F2F!/K2K!/1@T/R.F.A.* *Freak to Freak/Kook to Kook/ One at a Time/ Ready.Fire!Aim. The hell with B2B. Try K2K!!!! That is, Kook 2 Kook. [Or, a pal says, F2F … Freak 2 Freak. Fine!] [Or, per me redux: W2W … Weirdo 2 Weirdo.] “They” say that no revolution has ever been concocted by more than a dozen people. I’m inclined to buy that. Hence the key to your Revolution [in HR, IS, Purchasing & Logistics] is those first recruits! Your Premier Fellow Kooks [Freaks, Weirdos]! Who will risk life & professional limb for this Very Cool [Kewl] idea which will change the world. Frankly, we’d rather not have a Vice President or Div. Gen. Mgr. aboard at first. They are subject to too bright a spotlight. We’d rather labor in the distant vineyards with young, passionate pioneers … who want to change the world … JUST FOR THE HELL OF IT. To be sure, once we’ve demo-ed the idea in a few places, we’ll go after a Rad/Kewl VP to become our Management Sponsor/Protector-from-the Forces-of-Evil. But for starters, the invisible, passionate ones are the keys.

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

Brand Inside Reprise

Pretense (“Failures are for fools.”) I love “Yes men” Self-contained 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: Anne@Corp.com 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 It’s a brand new [organizational] world. A Johannesburg reporter asked me to contrast the old & new economy. I produced the following chart, literally, on a napkin. [Since tidied up.] [N.W.O. = New World Order] It is a new world. (2) Relationship to design: Standing out from the herd will be a necessity for any surviving (a) individual, (b) department, or organization-enterprise. And … I contend … there is no better [or more underutilized] tool for “standing out” than design. THINK ABOUT IT.

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

Forces @ 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

“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 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: www.ecompany.com (1/2001)

“This is the first meter of a 10-kilometer race “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

COMMUNITY SERVICES!/ CUSTOMER CONTROL! Web Secret No.1: COMMUNITY – as in, User Community – RULES! So: How do your online Community Development Activities rate?

Tomorrow Today: Cisco. 90% of $20B; save $550M C. Sat e >> C Tomorrow Today: Cisco! 90% of $20B; save $550M C.Sat e >> C.Sat H Customer Engineer Chat Rooms/Collaborative Design ($1B “free” consulting) (45,000 customer problems a week solved via customer collaboration)

RADICAL STRATEGIES REQUIRED

“One cannot be tentative about this “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]

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

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

“Ebusiness is about rebuilding the organization from the ground up “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

Message: Survivors will move all their operations to the Web. Now Message: Survivors will move all their operations to the Web. Now. Web = Encompassing … or else.

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

Brand Outside Strategy 5: It’s the Experience!

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

Experience: “Rebel Lifestyle 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

The “Experience Ladder” Experiences Services Goods Raw Materials

1940: Cake from flour, sugar (raw materials economy): $1 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% Message: “Experience” is the “last 80%.” “Experience” applies to all work!

HP Revisited PWC Consultants lead Business Re-invention Process (“Experience Economy”) Fabulous Customer Service (“Service Economy”) Terrific Servers (“Goods Economy”)

Brand Outside Strategy 6: BRAND POWER!

“WHO ARE YOU [these days] ?” TP to Client

WHAT’S YOUR STORY?

“ WHY DOES IT MATTER TO THE CLIENT?”

“Brand Promise” Exercise: (1) Who Are WE “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) Big Enchilada: Try ’em on a skeptical Client!

Message: (1) Do You Understand Your [Treasury] Brand Promise Message: (1) Do You Understand Your [Treasury] Brand Promise? (2) Does Your Work Directly Enhance The Corporate Brand Promise?

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