Tom Peters’ Re-imagine ! Business Excellence in a Disruptive Age Deloitte/NaplesFL/7November 2003

Slides at … tompeters.com

“Uncertainty is the only thing to be sure of.” –Anthony Muh, head of investment in Asia, Citigroup Asset Management “If you don’t like change, you’re going to like irrelevance even less.” —General Eric Shinseki, Chief of Staff, U. S. Army

Re-imagine! Business Excellence in a Disruptive Age 1. It is the foremost task —and responsibility— of our generation to re-imagine our enterprises and institutions, public and private.

It is the foremost task— and responsibility— of our generation to re-imagine our enterprises, private and public. —from the cover, Re-imagine

Re-imagine! 2. War-making, commerce, politics, and the essential nature of human interchange have come unglued. We are in a … Brawl with No Rules. We have to make it up as we go along.

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

Re-imagine! 3. Incrementalism is.. Out. Destruction is … In. Built to last is … Out. Built to flip is … In.

Forbes100 from 1917 to 1987: 39 members of the Class of ’17 were alive in ’87; 18 in ’87 F100; 18 F100 “survivors” underperformed the market by 20%; just 2 (2%), GE & Kodak, outperformed the market 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

Rate of Leaving F : 4X Source: The Company, John Micklethwait & Adrian Wooldridge

“Good management was the most powerful reason [leading firms] failed to stay atop their industries. Precisely because these firms listened to their customers, invested aggressively in technologies that would provide their customers more and better products of the sort they wanted, and because they carefully studied market trends and systematically allocated investment capital to innovations that promised the best returns, they lost their positions of leadership.” Clayton Christensen, The Innovator’s Dilemma

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 difficulties … arise from the inherent conflict between the need to control existing operations and the need to create the kind of environment that will permit new ideas to flourish—and old ones to die a timely death. We believe that most corporations will find it impossible to match or outperform the market without abandoning the assumption of continuity. … The current apocalypse—the transition from a state of continuity to state of discontinuity—has the same suddenness as the trauma that beset civilization in 1000 A.D.” —Richard Foster & Sarah Kaplan

The Three Levels of Innovation Transformational Substantial Incremental Source: Dick Foster, Business 2.0 (05.01) Note: Each level requires totally different processes!

No Wiggle Room! “Incrementalism is innovation’s worst enemy.” Nicholas Negroponte

“I don’t intend to be known as the ‘King of the Tinkerers.’ ” —CEO, large financial services company

Re-imagine! 4. There is no higher priority than the Total Transformation of all business practice to eBusiness practice—encompassing every element of the enterprise and every member of its family of alliances and partners. The Internet changes everything. Now.

“E-commerce is happening the way all the hype said it would. Internet deployment is happening. Broadband is happening. Everything we ever said about the Internet is happening. And it is very, very early. We can’t even glimpse IT’s potential in changing the way people work and live.” —Andy Grove (BusinessWeek/August 2003)

“The organizations we created have become tyrants. They have taken control, holding us fettered, creating barriers that hinder rather than help our businesses. The lines that we drew on our neat organizational diagrams have turned into walls that no one can scale or penetrate or even peer over.” —Frank Lekanne Deprez & René Tissen, Zero Space: Moving Beyond Organizational Limits.

“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

“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

100 square feet

“Dawn Meyerreicks, CTO of the Defense Information Systems Agency, made one of the most fateful military calls of the 21 st century. After 9/11 … her office quickly leased all the available transponders covering Central Asia. The implications should change everything about U.S. military thinking in the years ahead. “The U.S. Air Force had kicked off its fight against the Taliban with an ineffective bombing campaign, and Washington was anguishing over whether to send in a few Army divisions. Donald Rumsfeld told Gen. Tommy Franks to give the initiative to 250 Special Forces already on the ground. They used satellite phones, Predator surveillance drones, and GPS- and laser-based targeting systems to make the air strikes brutally effective. “In effect, they ‘Napsterized’ the battlefield by cutting out the middlemen (much of the military’s command and control) and working directly with the real players. … The data came in so fast that HQ revised operating procedures to allow intelligence analysts and attack planners to work directly together. Their favorite tool, incidentally, was instant messaging over a secure network.”—Ned Desmond/“Broadband’s New Killer App”/Business 2.0/ OCT2002

OODA Loop/Boyd Cycle “Unraveling the competition”/ Quick Transients/ Quick Tempo (NOT JUST SPEED!)/ Agility/ “So quick it is disconcerting” (adversary over-reacts or under-reacts)/ “Winners used tactics that caused the enemy to unravel before the fight” (NEVER HEAD TO HEAD) BOYD: The Fighter Pilot Who Changed the Art of War (Robert Coram)

5. Ninety percent of white-collar jobs (90 percent of all jobs) as we know them will be disemboweled in the next 15 years. Done. Gone. Kaput. Re-imagine!

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

E.g. … Jeff Immelt: 75% of “admin, back room, finance” “digitalized” in 3 years. Source: BW ( )

BW Cover/ “ IS YOUR JOB NEXT? A New Round of GLOBALIZATION Is Sending Upscale Jobs Offshore. They Include Chip Design, Basic Research—even Financial Analysis. Can America Lose These Jobs and Still Prosper?”

“P&G Hires Out Employee Services to IBM” —Burlington Free Press/ / on IBM’s 10-year, $400M contract with P&G (P&G farmed out IT to HP in May, Facilities to Jones Lang LaSalle in June)

“Outsourcing Trend Called ‘Threat’ to Middle-class Workforce” —USA Today/ (Mgt jobs moving: 2000: 0; 2005: 37,000) “Loss of Factory Jobs May Have a Long Fall to Bottom” —Boston Globe/ (75,000 per month during last 18 months) “The New Job Reality” —Cover/USN&WR/ (“The dearth of jobs stems from factors signaling a sea change…”)

Predicted U.S. High-wage Job Losses Managers 37, ,000 Life sciences 3,700 37,000 Design 6,000 30,000 Architecture 32, ,000 Bus Ops 61, ,000 Computer 109, ,000 Office support ,300,000 Source: Forrester Research (BusinessWeek/ )

!!!!!!!!! ebookers PLC

“Don’t own nothin’ if you can help it. If you can, rent your shoes.” F.G.

Everybody’s Doin’ It! “The leading Indian outsourcers reckon that the key to their long-term prosperity is bagging ever larger deals and moving ever higher up the value chain.” —The Economist/

6. “Winners” (survivors!) will become de facto bosses of Me Inc. Free the Cubicle Slaves! Self-reliance replaces corporate cosseting. Hooray! Re-imagine!

“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

Re-imagine! 7. We must learn to add value through creativity … by inventing … Extraordinary Experiences … which provide scintillating “solutions” to customers’ oft unexpressed desires and dreams. Out: Tangibles. In: Intangibles.

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

Gerstner’s IBM: Systems Integrator of choice. Global Services: $40B. Pledge/’99: Business Partner Charter. 72 strategic partners, aim for 200. Drop many in-house programs/products. (BW/12.01).

IBM/Q3/ /Rev: +5% Services/Consulting: +11% Software: +5% Hardware: -5% PCs: -2% Technology/Chips: -33%

WHAT CAN BROWN DO FOR YOU?

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

And the Winners Are … Televisions –12% Cable TV service +5% Toys -10% Child care +5% Photo equipment -7% Photographer’s fees +3% Sports Equipment -2% Admission to sporting event +3% New car -2% Car repair +3% Dishes & flatware -1% Eating out +2% Gardening supplies -0.1% Gardening services +2% Source: WSJ/

FEES! FEES! FEES! —Cover Story, BW/

It’s All About EXPERIENCES: “Trapper” to “Wildlife Damage-control Professional” Trapper: <$20 per beaver pelt. WDCP: $150/“problem beaver”; $750-$1,000 for flood-control piping … so that beavers can stay. Source: WSJ/

TGR

Re-imagine! 8. Design Rules … in an Age of Experiences/ Dream Fulfillment.

Design Transforms even the [Biggest] Corporations! TARGET … “the champion of America’s new design democracy” (Time) “Marketer of the Year 2000” (Advertising Age)

Re-imagine! 9. Brand Value = All Value = Obeisance to Metaphysical Management.

“WHO ARE WE?”

“WHAT’S OUR STORY?”

“We are in the twilight of a society based on data. As information and intelligence become the domain of computers, society will place more value on the one human ability that cannot be automated: emotion. Imagination, myth, ritual - the language of emotion - will affect everything from our purchasing decisions to how we work with others. Companies will thrive on the basis of their stories and myths. Companies will need to understand that their products are less important than their stories.” Rolf Jensen, Copenhagen Institute for Future Studies

Re-imagine! 10. WOMEN ROAR. Women buy (ALL) the stuff. Re-imagine the brand itself—and all business practices—around women-as- purchasers.

????????? Home Furnishings … 94% Vacations … 92% (Adventure Travel … 70%/ $55B travel equipment) Houses … 91% D.I.Y. (“home projects”) … 80% Consumer Electronics … 51% Cars … 60% (90%) All consumer purchases … 83% Bank Account … 89% Health Care … 80%

???? 80%

Riding Lawnmowers

$5+T > Japan 10M/28M/$3.6T > Germany

“Men and women don’t think the same way, don’t communicate the same way, don’t buy for the same reasons.” “He simply wants the transaction to take place. She’s interested in creating a relationship. Every place women go, they make connections.”

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

2.6 vs. 21

1. Men and women are different. 2. Very different. 3. VERY, VERY DIFFERENT. 4. Women & Men have a-b-s-o-l-u-t-e-l-y nothing in common. 5. Women buy lotsa stuff. 6. WOMEN BUY A-L-L THE STUFF. 7. Women’s Market = Opportunity No Men are (STILL) in charge. 9. MEN ARE … TOTALLY, HOPELESSLY CLUELESS ABOUT WOMEN. 10. Women’s Market = Opportunity No A. Duh.

Re-imagine! 11. Boomers & Geezers have (ALL) the money. Pay attention!

Aging/“Elderly” $$$$$$$$$$$$ “I’m in charge!”

“ ‘Age Power’ will rule the 21 st century, and we are woefully unprepared.” Ken Dychtwald, Age Power : How the 21 st Century Will Be Ruled by the New Old

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

50+ $7T wealth (70%)/$2T annual income 50% all discretionary spending 79% own homes/40M credit card users 41% new cars/48% luxury cars $610B healthcare spending/ 74% prescription drugs 5% of advertising targets Ken Dychtwald, Age Power: How the 21 st Century Will Be Ruled by the New Old

“Marketers attempts at reaching those over 50 have been miserably unsuccessful. No market’s motivations and needs are so poorly understood.” — Peter Francese, founding publisher, American Demographics

Re-imagine! 12. Creative Enterprises demand … Awesome (& Creative) Talent. Everywhere.

Age of Agriculture Industrial Age Age of Information Intensification Age of Creation Intensification Source: Murikami Teruyasu, Nomura Research Institute

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

Model 25/8/53 Sports Franchise GM* *48 = $500M

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

Brand = Talent.

Re-imagine! 13. WOMEN RULE. Women are … Tomorrow’s Leaders. (Period.)

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

Women’s Strengths Match New Economy Imperatives: Link [rather than rank] workers; favor interactive-collaborative leadership style [empowerment beats top-down decision making]; sustain fruitful collaborations; comfortable with sharing information; see redistribution of power as victory, not surrender; favor multi-dimensional feedback; value technical & interpersonal skills, individual & group contributions equally; readily accept ambiguity; honor intuition as well as pure “rationality”; inherently flexible; appreciate cultural diversity. Source: Judy B. Rosener, America’s Competitive Secret: Women Managers

Women Rule Match market power Attributes fit N.O.W. (New Org World) 10M biz owners

Psssst! Wanna see my “porn” collection?

!!!!!!!!!!!!!!! 14 to 168* *Leadership Positions/Deloitte/ /WIAR

“Are men obsolete?” —Headline, USN&WR/

Re-imagine! 14. “Talent Development” rests upon Total Re-imagining of our insipid schools. Those who “color outside the box” and “can’t sit still” are the New Heroes.

“My wife and I went to a [kindergarten] parent-teacher conference and were informed that our budding refrigerator artist, Christopher, would be receiving a grade of Unsatisfactory in art. We were shocked. How could any child—let alone our child—receive a poor grade in art at such a young age? His teacher informed us that he had refused to color within the lines, which was a state requirement for demonstrating ‘grade-level motor skills.’ ” Jordan Ayan, AHA!

Re-imagine! 15. Weird Wins … in Weird Times. (Innovation = Easy. Hang Out with Weird = Get Weird.) (Q.E.D.)

Saviors-in-Waiting Disgruntled Customers Off-the-Scope Competitors Rogue Employees Fringe Suppliers Wayne Burkan, Wide Angle Vision: Beat the Competition by Focusing on Fringe Competitors, Lost Customers, and Rogue Employees

“To grow, companies need to break out of a vicious cycle of competitive benchmarking, imitation and pursuit.” —W. Chan Kim & Renée Mauborgne, “Think for Yourself —Stop Copying a Rival,” Financial Times/

“Aiming to beat the competition has the opposite effect to the one intended. It keeps companies focused on the competition. When asked to build competitive advantage, managers typically rate themselves against competitors, assess what they do and try to do it better.” —W. Chan Kim & Renee Mauborgne, “Think for Yourself—Stop copying a Rival”/FT/08.03

“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, “Strategy or Revolution/ Harvard Business Review

Huh? “Quiet, workmanlike, stoic leaders bring about the big transformations.”—JC

Pastels? T. Paine/P. Henry/A. Hamilton/T. Jefferson/B. Franklin A. Lincoln/U. S. Grant/W. T. Sherman TR/FDR/LBJ/RR/JFK M.L. King C. de Gaulle M. Gandhi W. Churchill M. Thatcher Picasso Mozart Copernicus/Newton/Einstein J. Welch/L. Gerstner/L. Ellison/B. Gates/S. Ballmer/S. Jobs/S. McNealy A. Carnegie/J. P. Morgan/H. Ford/J.D. Rockefeller/T. A. Edison

Audie Murphy was the most decorated soldier in WW2. He won every medal we had to offer, plus 5 presented by Belgium and France. There was one common medal he never won …

… the Good Conduct medal.

Characteristics of the “Also rans”* “Minimize risk” “Respect the chain of command” “Support the boss” “Make budget” *Fortune, article on “Most Admired Global Corporations”

Re-imagine! 16. Leading = Re-imagining = Unleashing Passion in One & All. Winners … Pursue Quests to Places as Yet Unimagined. Leaders applaud their “followers’ ” Quirky Bravery … and egg them on to ever more wild & woolly experiments.

“I don’t know.”

“If things seem under control, you’re just not going fast enough.” Mario Andretti

“If it works, it’s obsolete.” —Marshall McLuhan

The Kotler Doctrine: : R.A.F. (Ready.Aim.Fire.) : R.F.A. (Ready.Fire!Aim.) 1995-????: F.F.F. (Fire!Fire!Fire!)

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

“Management has a lot to do with answers. Leadership is a function of questions. And the first question for a leader always is: ‘Who do we intend to be?’ Not ‘What are we going to do?’ but ‘Who do we intend to be?’” —Max DePree, Herman Miller

CEO Assignment2002 (Bermuda): “Please leap forward to 2007, 2012, or 2022, and write a business history of Bermuda. What will have been said about your company during your tenure?”

Ah, kids: “What is your vision for the future?” “What have you accomplished since your first book?” “Close your eyes and imagine me immediately doing something about what you’ve just said. What would it be?” “Do you feel you have an obligation to ‘Make the world a better place’?”

G.H.: “Create a ‘cause,’ not a ‘business.’ ”

“In Tom’s world it’s always better to try a swan dive and deliver a colossal belly flop than to step timidly off the board while holding your nose.” —Fast Company /October2003