Masters Forum

Hen 37,000 feet …

Microsoft = R.O.W. Microsoft > GM + Ford + Boeing + Lockheed Martin + Deere + Caterpillar + USX + Weyerhaeuser + Union Pacific + Kodak + Sears + Marriott + Safeway + Kellogg Source: Business Week data through 5-99

Microsoft = R.O.W. (II) Microsoft > GM + Ford Boeing + Lockheed Martin + Deere + Caterpillar + USX + Weyerhaeuser + Union Pacific + Kodak + Sears + Marriott + Safeway + Kellogg + McDonald’s + Bank One + General Mills + American Airlines + United Airlines + + Delta Air Lines + US Airways + Quaker Oats Source: Yastrow Marketing (through )

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

Just Say No … “I don’t intend to be known as the ‘King of the Tinkerers.’ ” CEO, large financial services company (New York, 5-99)

64/24

Goal?

“There is probably going to be more confusion in the business world in the next decade than there has been in any decade in history.” Steve Case (2-00)

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

S.A.V.

Work The Destruction Imperative!

Forget > Learn “The problem is never how to get new, innovative thoughts into your mind, but how to get old ones out.” Dee Hock

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

“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

“Talent” and a $2T enterprise??????

“Our ideal acquisition is a small startup that has a great technology product on the drawing board that is going to come out in six to twelve months. We buy the engineers and the next generation product. …” John Chambers, Cisco

“R & D” Intel’s venture fund: 275 investments, $3.5B Source: Fast Company (12-99)

C.E.O. to C.D.O.

“It used to be that the big ate the small. Now the fast eat the slow.” Geoff Yang, IVP/ (Institutional Venture Partners)

[E.g.: Craig Venter/ Celera Genomics]

The Gales of Creative Destruction +29M = -44M + 73M +4M = +4M - 0M

Brand Inside PSF 1: Brand Org!

108 X 5 vs. 8 X 1* * 540 vs. 8

ERP, ECM, Web, Etc. IT’S THE GIANT SUCKING SOUND OF SLACK BEING EXTRACTED FROM THE GLOBAL ECONOMY!

“Assetless Company” J.B.

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

And … $20,000 = $1T* *Michael Dertouzos, MIT, on India’s “back office” outsourcing potential [ /Delhi]

RR on Sara Lee “The most profitable businesses in the future will act as knowledge brokers, linking insights into what’s available with insights into the customer’s individual needs and preferences.”

The “&-!!+#$% in the middle”* Jim Clark on Healtheon * ’twixt docs, patients and providers; $250B in waste (?); source: Michael Lewis, The New New Thing

“We want to be the air traffic controllers of electrons.” Bob Nardelli, GE Power Systems

PSF 1.0 Professional Service Firm Conversion Kit / Release 1.0

Why are there no books on how to create a “Cool, Rocking, WOW-producing Finance Department”?

Credo “WORK WORTH PAYING FOR”

PSF 1.0 Department Head to … Managing Partner, HR [IS, etc.] Inc.

“support function” / “cost center” / “bureaucratic drag” or … “Rock Stars of the ‘Age of Talent’ ”

C.I.O. to C.E.F.R.N.S.*

* C hief E vangelist F or R eally N eat S tuff

Brand Inside PSF 2: Brand Work!

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

But Does It Matter ???? “On time, on budget … who cares?” anon. seminar participant (4/99)

“You really got to me. So many of our information technology projects take on a life of their own, and I know they’ll never end up as more than ‘mediocre successes.’ ” CEO, F100 financial services company (10-98)

E.g.: WOW Scale 1. … Dull as dishwater. 5. … Gets the job done. 7. … “Good work!”. 10. … A serious “Braggable”!

Kaiser:

Liberty Ship 2 years 240 days 9 hours 4 days, 15 hours, 29 minutes

WOW Project “Acid Test” Can you explain it - with zest - to your 14-year-old?

“Every project we take on starts with a question: How can we do what’s never been done before?” Stuart Hornery, CEO, Lend Lease

SOOOO … HOW MANY OF YOUR COLLEAGUES ARE “BACK HOME” AT WORK ON NO-BALONEY … WOW* PROJECTS! * WOW = Will be remembered fondly/ bragged about 5+ years from now

Epitaph from Hell … Joe T. Jones HE WOULDA DONE SOME REALLY COOL STUFF BUT … HIS BOSS WOULDN’T LET HIM!

T.T.D.s The next slide is the first of several “T.T.D.” activities. I.e.: Things To Do. These are by and large shorthand forms of training exercises I use. Also: Most of these T.T.D. slides have accompanying Notes. (See following slide.) Tom Peters

T.T.D.: Now! –List all projects –Carefully describe a “WOW Outcome” for you and the Client –Score (!) all projects on WOW, Beauty, Impact, Raving Fan-hood –Pick one project with a high combined score –Draft a one-page New Description that emphasizes WOW, Beauty, etc. –Circulate and edit … for three days –Reduce to 5 bullet points

Notes Page DO IT! NOW!

Characteristics of the “Also Rans” “minimize risk” “respect the chain of command” “support the boss” “make budget” Source: Fortune on “most admired global corporations” (10/26/98)

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 PSF 3: Brand You!

DISTINCT … OR EXTINCT! “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

“If one quarter can’t make the journey, that’s the way it has to be.” Carly Fiorina (1-00/Forbes)

Personal “Brand Equity” Eval –I am known for [2 to 3 things] –My current Project is challenging me … –New things I’ve learned in the last 90 days include … –My public “recognition program” consists of … –Additions to my Rolodex include … –My resume is discernibly different from last year’s at this time …

Icon Woman … –Totally turned on by her work! –“It” matters / a WOW Project! –“It” is … COOL! –“It” is … BEAUTIFUL! –She is … in your face! –She is an … adventurer! –She is … CEO of her own life!

Icon Woman … - She is … at least … a little funky! –Her curiosity is … insatiable! –She thinks screwups are … as normal as breathing! –She hangs out with some … seriously rad Dudes! –She is not God. She is not Bionic Woman. She is … determined to make a damned difference!

“Well-behaved women rarely make history.” — Anita Borg, Institute for Women and Technology

Icon Woman Meets the Web … –submits resume on the Web –recruited on the Web –hired on the Web –trained on the Web –creates and conducts projects with virtual teams on the Web –manages project and client follow-up on the Web –manages career/reputation-building on the Web

R.D.A. Rate: 15%?, 25%? Therefore: Formal “Investment Strategy”/ R.I.P.

T.T.D./Your R.I.P. IS IT … FORMAL? IS IT... WOW!?

Notes Page We think “R.I.P.s” are imperative! So … please take these two questions seriously and literally!

Seminar Y2K Message: Distinct … or Extinct!

Bill Parcells’ World/ Brand You World! BLAME NOBODY! EXPECT NOTHING! DO SOMETHING! NY Post (9/99)

Brand Inside PSF 4: Brand Talent!

Issue Y2K The Great War for Talent!

“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

Axiom: Never hire anyone without an aberration in their background. (Find the One Ton Cookie Man!)

“The boundaries for acceptable weirdness have dramatically expanded.” Michael Schrage

Attributes of Those Who “Made” the 10th Grade History Book –Committed! –Determined to make a difference! –Focused! –Passionate! –Irrational about their life’s project! –Ahead of their time / Paradigm busters! –Impatient! / Action Obsessed

Attributes of Those Who “Made” the 10 th Grade History Book –Made lots of people mad! –Flouted the chain of command! –Creative / Quirky / Peculiar! / Rebels! / Irreverent! –Masters of improv / Thrive on chaos / Exploit chaos!

Attributes of Those Who “Made” the 10 th Grade History Book –Forgiveness > Permission –Bone honest! –Flawed as the dickens! – “In touch” with their followers’ aspirations –Damn good at what they do!

Just Say “No” to “Grout”! Participant: “Don’t you need ‘grout’ between the tiles?” TP: “No!” [med staff, NFL Special Teams,waiters, PFCs, cymbals player, bit parts, waiters]

“Conformity is the enemy of freedom and the jailer of growth.” J.F.K.

Yes! Director of Bringing in the Really Cool People

All You Need to Know? Chief Evangelist For Really Neat Stuff Director Of Bringing In The Really Cool People

Talent War Y2K! –All out!/ Time consuming! –Never ending!/ Unwinnable! –Includes everybody!/ Everybody’s game! (“We’re all in sales.”) –Expensive! –Cool!/ WOW!/ Fun!/ Creative! –Strategic!/ Core competence!

Talent = Brand

Brand Outside = Brand Inside

Brand Outside Context: No “Commodities”!

In the Beginning … “The audit has become a commodity.” Big 5 audit partner to TP

Quality Not Enough! “Quality as defined by few defects is becoming the price of entry for automotive marketers rather than a competitive advantage.” J.D. Power

Quality Not Enough! “While everything may be better, it is also increasingly the same.” Paul Goldberger on retail, “The Sameness of Things,” The New York Times

What’s Special? “Customers will try ‘low cost providers’ because the Majors have not given them any clear reason not to.” Leading Insurance Industry Analyst (10-98)

“We make over three new product announcements a day. Can you remember them? Our customers can’t!” Carly Fiorina

“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 Nordstrom and Jonas Ridderstrale, Funky Business

The “10X/10X Phenomenon” 10 Times Better/ 10 Times Less Different

TP’s Campaign Y2K Just say [shout] “No!” to the “inevitable commoditization” of anything.

“When we did it ‘right’ it was still pretty ordinary.” Barry Gibbons on “Nightmare No. 1”

Pretzel Crumb-less-ness Plus … “The Ritz Carlton Experience enlivens the senses, instills well-being and fulfills even the unexpressed wishes and needs of the guest.” from the Ritz Carlton Credo

“We want to create waves of lust for our product.” Andy Grove (on the Pentium Processor)

“You do not merely want to be the best of the best. You want to be considered the only ones who do what you do.” Jerry Garcia

Nirvana! - Nordstrom - Four Seasons - Adirondack Guide Boat - OXO - Ziplocs

Why? Cool!/Surprising! Reliable! Friendly!/Comfortable! Aesthetically pleasing!

T.T.D. What words do you & yours use to describe Customer Contentment? [Way] beyond “satisfaction”? [DO SUCH WORDS MATTER?]

Notes Page PLEASE [REDUX]: PAY LOTS OF ATTENTION TO WORDS … AND THE EMOTIONAL “SIGNS” THEY CONNOTE. [TomWorld: What applies to a Detroit Red Wings “performance” ought to apply to a “Purchasing Dept. performance”!

Brand Outside Strategy 1 : Lead the Customer!

“The customer is a rear view mirror, not a guide to the future.” George Colony, Forrester Research “If you worship at the throne of the voice of the customer, you’ll get only incremental advances.” Joseph Morone, President, Bentley College

Early Customer Rejection Post-Its [12 years!] Chrysler Minivans VCRs Fax machines FedEx CNN Heart-assist pumps Etc. Source: Fortune

Good = Bad/ 1 of 30,000 “We are crazy. We should do something when people say it is ‘crazy.’ If people say something is ‘good’, it means someone else is already doing it.” Hajime Mitarai, Canon

“Wealth in this new regime flows directly from innovation, not optimization. That is, wealth is not gained by perfecting the known, but by imperfectly seizing the unknown.” Kevin Kelly, New Rules for the New Economy

Benchmarking, Perils of … “The best swordsman in the world doesn’t need to fear the second best swordsman in the world; no, the person for him to be afraid of is some ignorant antagonist who has never had a sword in his hand before; he doesn’t do the thing he ought to do, and so the expert isn’t prepared for him; he does the thing he ought not to do and often it catches the expert out and ends him on the spot.” Mark Twain

Amen! “The Age of the Never Satisfied Customer” Regis McKenna

Brand Outside Strategy 2 : Master E-Commerce!

$35,000,000. = ???

Dell’s Web sales … daily

2X = 100 days (Internet traffic) 2X = 9 months (network capacity) Source: Red Herring (1-00)

Tomorrow Today: Cisco! $7B of $10B Save $500M (service and tech support) C.Sat e >> C.Sat H Customer Engineer Chat Rooms ($1B?)

Cherry Picking Vertical Markets Plasticsnet.com: $370B; sellers pay $5K to $8K for “storefront”; 5% to 10% cut Hook: community services (database, catalogs, forums, industry job bank, etc.)

T.T.D.: Message! COMMUNITY!/ COMMUNITY SERVICES!

B2B 1999 – 2004: 50X 2004: $7.4 Source: GartnerGroup (per Reuters ) T

Welcome to D.I.Y. Nation! “Changes in business processes will emphasize self service. Your costs as a business go down and perceived service goes up because customers are conducting it themselves.” Ray Lane, Oracle

Shop in your Underwear Source: SM’d logo for ae = American Eagle Outfitters

Psych 101: Strongest Force on Earth? My need to be in perceived control of my universe!

Anne Busquet/ American Express Not: “Age of the Internet” Is: “Age of Customer Control”

Patricia Seybold’s “Basics”: The E-Customer Bill of Rights Don’t waste my time! Remember who I am! Make it easy for me to order and procure service! Customize your products and services for me! Source: customers.com

“In the network economy, the Website becomes the company’s primary interface to the customer. The user interface becomes the marketing materials, store front, store interior, sales staff and post- sales support all rolled into one.” Jakob Nielsen, Designing Web Usability

“Where does the Internet rank in priority? It’s No. 1, 2, 3, and 4.” Jack Welch

Change … Or Die! “Most of the brick and mortars look at the Internet as an add-on business … until they get a major scare. Then they either change or die. … You have to put all your heart and soul in that direction, the way Charles Schwab and Dell did.” Flip Filipowski, divine interVentures (Red Herring)

There are 2 Kinds of … Defense* vs. Offense** *Fend off upstarts. ** Reinvent our marketspace!

Brand Outside Strategy 3 : Women Rule!

????????? Home Furnishings … 94% Vacations … 92% Houses … 91% Bank Account … 89% Health Care … 75% Etc.

48% working wives > 50% 80% checks 61% bills 53% stock (mutual fund boom) 43% > $500K 95% financial decisions/ 29% single handed

Women … 49% of Web users; 6 of 10 new users; 83% of wired women are primary decision makers for family healthcare, finances, education. Source: Business Week (11-99)

$3.3T + $1.5T = $4.8T* * Larger than Japan!

Most Under-reported story! 9M*/20M+/$4T [> Germany] * 400K in ’72; 132% since ’92; source: NFWBO, Cognetics

Yeow! 1970 … 1% 2000 … 50%

OPPORTUNITY NO. 1!* [* No shit!]

Carol Gilligan/ In a Different Voice Men: Get away from authority, family Women: Connect Men: Self-oriented Women: Other-oriented Men: Rights Women: Responsibilities

FemaleThink/ Popcorn “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 and Healthcare Women are … more dissatisfied, frustrated by the way they are treated and spoken down to by physicians, seek more information, are more pressed for time … and make 75% of health care decisions and control 2/3 of health care $$$$ [and constitute 2/3 of health care employees]. Source: Patricia Braus, Marketing Healthcare to Women

Women and Financial Advisors Women want … a plan, to be listened to, to be taken seriously, to read about it, to think about it. Women do not want … an in-your-face sales pitch Source: Kathleen Boyle, Wheat Boyle Butcher Singer

Marketing to Women: Help Them Save Time! 80% … work 86% … cook 58% … run errands with kids 38% … take child to school 21% … go to the gym 21% … take outside classes

How Many Gigs You Got, Man? “Hard to believe … Different criteria” “Every research study we’ve done indicates that women really care about the relationship with their vendor.” Robin Sternbergh/ IBM

Not a Morality Play! “It is critical that we all understand that IBM is not marketing to women entrepreneurs because it is the thing to do, or even the right thing to do. We are marketing to women entrepreneurs because it is a huge opportunity.” Cherie Piebes

“What kind of car does Mommy want?”

Speaking of Enormous [Missed] [Huge] Opportunities...

74/55 “At each stage of their lives, the needs and desires of the baby boomers have become the dominant concerns of American business and popular culture. If you can anticipate the movement of the baby-boom generation’s life-span migration, you can see the future.” Ken Dychtwald, Age Wave

Aging/ “Elderly’ 2X growth rate $$$$$$$$$$$$ “I’m in charge!” “Experiences” vs. Products Design revolution! Good source: Ken Dychtwald, Age Wave

Brand Outside Strategy 4 : Design Rules!

And Tomorrow … “Fifteen years ago companies competed on price. Now It’s quality. Tomorrow it’s design.” Robert Hayes

All Equal Except … “At Sony we assume that all products of our competitors have basically the same technology, price, performance and features. Design is the only thing that differentiates one product from another in the marketplace.” Norio Ohga

Drop-dead Charm! “The new Beetle fails at most categories. The only thing it doesn’t fail in is drop-dead charm.” Jerry Hirshberg, Nissan Design International

Object of Desire! “Every now and then, a design comes along that radically changes the way we think about a particular object. Case in point: the iMac. Suddenly, a computer is no longer an anonymous box. It is a sculpture, an object of desire, something that you look at.” Katherine McCoy, Michael McCoy, Illinois Institute of Technology

Design as Soul “We don’t have a good language to talk about this kind of thing. In most people’s vocabularies, design means veneer. … But to me, nothing could be further from the meaning of design. Design is the fundamental soul of a man-made creation.” Steve Jobs

The I.D. [International Design] Forty* Airstream … Alfred A. Knopf … Apple Computer … Amazon.com … Bloomberg … Caterpillar … CNN … Disney … FedEx … Gillette … IBM … Martha Stewart … New Balance … Nickelodeon … Patagonia … The New York Yankees … 3M … Etc. * List No. 1, 1999

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 Theater & 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

Safe, On Time and … “We defined personality as a market niche. We seek to amuse, to surprise, to entertain.” Herb Kelleher, Main Man, LUV Airlines

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

Mantra: “Any good can be ing -ed” the driv ing experience the pump ing experience the sitt ing experience the read ing experience the wash ing experience the cook ing experience Joseph Pine & James Gilmore, The Experience Economy: Work Is Theater & Every Business a Stage

“This is the end of the pure product era. For instance, car makers are beginning to understand that the car is a platform for delivering services that drive the customer experience.” Carly Fiorina, Comdex ’99

T.T.D. Carefully examine/think through every aspect of “the experience of us.”* *This holds for the Finance Dept. as well as the corporation’s “products”

Brand Outside BRAND POWER!

Brand It! Now, More Than Ever! “The increasing difficulty in differentiating between products and the speed with which competitors take up innovations will assist in the rise and rise of the brand.” Gillian Law and Nick Grant, Management [New Zealand]

No Room for Brands? Nike Saturn CNN America Online Charles Schwab Starbucks The Gap Intel Etc.

Brand = Trust! “Most buyers do not have a clue whether anybody else makes a better microprocessor, but ‘Intel Inside’ has become a ‘trust mark’ - a trademark that consumers put their faith in.” The Economist

“Branding is not a problem if you have the right mentality. You go to your team and you pin up a $200 Swiss Army Watch. Competing in the ridiculously crowded sub-$200 watch market, they made it into a brand name, named after the most irrelevant and useless thing in history [the Swiss Army]. And you say, ‘Gang, if they can do it, we can do it.’ ” Barry Gibbons

“Salt is salt is salt. Right? Not when it comes in a blue box with a picture of a little girl carrying an umbrella. Morton International continues to dominate the U.S. salt market even though it charges more for a product that is demonstrably the same as many other products on the shelf.” Tom Asaker, Humanfactor Marketing

T.T.D./Calling the Corporate Shrink! “Organizational Psychotherapy”/ WHO WE ARE!

Scott Bedbury/ Nike, Starbucks “A Great Brand taps into emotions. Emotions drive most, if not all, of our decisions. A brand reaches out with a powerful connecting experience. It’s an emotional connecting point that transcends the product. “A Great Brand is a story that’s never completely told. A brand is a metaphorical story that connects with something very deep - a fundamental appreciation of mythology. Stories create the emotional context people need to locate themselves in a larger experience.”

Brand Leadership Lead Out Loud!

ENTHUSIASM RULES! “I am a dispenser of enthusiasm.”/ Ben Zander

T.T.D./Follow Ann Richards’ Dogma Show up! Know your message! PUT YOURSELF AT RISK!

“If you ask me what I have come to do in this world, I who am an artist, I will reply, I am here to live my life out loud.” Emile Zola

“I’d rather regret the things I have done than the things I have not.” Lucille Ball

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