Tom Peters Seminar2000: Distinct or … Extinct The 21 st Century CFO Deloitte & Touche Laguna Niguel 09November2000

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

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

Work I The Destruction Imperative!

“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 (08.00)

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

“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

“Acquisitions are about buying market share. Our challenge is to create markets. There is a big difference.” Peter Job, CEO, Reuters

“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

Lessons from the Bees! Since merger mania is now the rage, what lessons can the bees teach us? A simple one: Merging is not in nature. [Nature’s] process is the exact opposite: one of growth, fragmentation and dispersal. There is no megalomania, no merging for merging’s sake. The point is that unlike corporations, which just get bigger, bee colonies know when the time has come to split up into smaller colonies which can grow value faster. What the bees are telling us is that the corporate world has got it all wrong.” David Lascelles, Co-director of The Centre for the Study of Financial Innovation [UK]

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

White Collar Revolution!

“Assetless Company” John Bryan, CEO, on selling all Sara Lee’s manufacturing

RR on “Assetless” [J.B.] 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.”

Advance Paradigm Data on 165,000,000 prescriptions per year; docs and insurers have access to records Reduces med errors; saves $2.88 per scrip [prescribing errors]; docs save $14,000 per year in review time Rev in ’99: $2B; $477M in ’98 Source: Business Week (09.00)

Cisco, Dell = Brand-owning companies who sell Customer Satisfaction Source: David Schneider & Grady Means, MetaCapitalism

Brand Inside Brand Work: The Professional Service Firm Model

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.

“P.S.F.”: Summary H.V.A. Projects (100%) Pioneer Clients Hot “Talent” (see below) Adventurous “culture” Point of View (Methodology) W.W.P.F. (100%)

Brand Inside Brand Talent: The Great War for Talent

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

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

From “1, 2 or 3” [JW] to … “Best talent in each industry segment to build best proprietary intangibles” [EM] Source: Ed Michaels, War for Talent ( )

“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 ( )

“Diversity defines the health and wealth of nations in a new century. Mighty is the mongrel. … The hybrid is hip. The impure, the mélange, the adulterated, the blemished, the rough, the black-and-blue, the mix-and-match – these people are inheriting the earth. Mixing is the new norm. Mixing trumps isolation. It spawns creativity, nourishes the human spirit, spurs economic growth and empowers nations.” G. Pascal Zachary, The Global Me: New Cosmopolitans and the Competitive Edge

“The Rise of the Teen Guru” “They’re brilliant, ambitious, and almost intuitively gifted at technology. A new generation of whiz kids are gaining unprecedented power and authority.” Source: Cover story, Brill’s Content, 7-8/00

The Cracked Ones Let in the Light “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

Women and new- economy management …

The New Economy … Shout goodbye to “command and control”! Shout goodbye to hierarchy! Shout goodbye to “knowing one’s place”!

Women’s Stuff = New Economy Match Improv skills Relationship-centric Less “rank consciousness” Self determined Trust sensitive Intuitive Natural “empowerment freaks” [less threatened by strong people] Intrinsic [motivation] > Extrinsic

“TAKE THIS QUICK QUIZ: Who manages more things at once? Who puts more effort into their appearance? Who usually takes care of the details? Who finds it easier to meet new people? Who asks more questions in a conversation? Who is a better listener? Who has more interest in communication skills? Who is more inclined to get involved? Who encourages harmony and agreement? Who has better intuition? Who works with a longer ‘to do’ list? Who enjoys a recap to the day’s events? Who is better at keeping in touch with others?” Source: Selling Is a Woman’s Game: 15 Powerful Reasons Why Women Can Outsell Men, Nicki Joy & Susan Kane-Benson

“Boys are trained in a way that will make them irrelevant.” Phil Slater

Mantra2000 Talent = Brand

New Economy: Was-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: 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

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

Work II The Commodity Trap

“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

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

Brand Outside The Death Knell for Ordinary: Pursuing Difference!

The Eight Strategies Pursue Pioneering Customers Re-invent via E-commerce & the Web Scramble up the V.A. Chain Embrace Design Emphasize the Total Experience Seek Out “Opportunity #1” [& #1A] Cede Control Become Brand-obsessed

Brand Outside Strategy 1 : Hitch Your Wagon to Pioneers !

“Our strategies must be tied to leading edge customers on the attack. If we focus on the defensive customers, we will also become defensive.” John Roth, CEO, Nortel

Brand Outside Strategy 2 : Use E-Commerce to Re-invent Everything!

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% Savings in service and support from customer self-management: $500M

Enron: $400B in annual on-line trading transactions. [50% total bus.] Much stimulated by the Web per se. Schwab: $25B per week in asset transactions [80% of trades] [Transition to e.Schwab: Rev. fell, then quickly doubled]

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)

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

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

Message: eCommerce is not a technology play! It is a relationship, partnership, organizational and communications play, made possible by new technologies.

Message: There is no such thing as an effective B2B or Internet-supply chain strategy in a low-trust, bottlenecked- communication, six-layer organization.

“There is no use trying,” said Alice. “One can’t believe impossible things.” “I daresay you haven’t had much practice,” said the Queen. “When I was your age, I always did it for half an hour a day. Why, sometimes I’ve believed as many as six impossible things before breakfast.” Lewis Carroll

I’net … … allows you to dream dreams you could never have imagined before!

“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]Forbes.com

Brand Outside Strategy 3 : Fighting Back via Systems Integration!

THE CASE

GM/Ford/DaimlerChrysler (02-27) Covisint $240B (+$500B) I.P.O.

Solectron, IBM, Nortel, Matsushita, Seagate, Etc. E2Open.com $700 B

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

Goal? Drive profits to zero!* *Remember AMR and “dynamic pricing.”

Message: “BOX” SELLERS LOSE!

THE RESPONSE

: HP bids $18,000,000,000 for PricewaterhouseCoopers Consulting bus! (31,000 bods)

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

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

Brand Outside Strategy 4 : Women Rule!

????????? Home Furnishings … 94% Vacations … 92% Houses … 91% Bank Account … 89% Health Care … 80% Consumer Electronics … 51% Cars … 50%+/80% Etc.

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

Women … 50+% (!!!) of Web users; 6 of 10 new users; 83% of wired women are primary decision makers for family healthcare, finances, education. Source: Business Week; Jupiter Communications

$4.8T > Japan 9M/27.5M/$3.6T > Germany

Read This Book … EVEolution: The Eight Truths of Marketing to Women Faith Popcorn & Lys Marigold

“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.” Faith Popcorn

EVEolution: Truth No. 1 Connecting Your Female Consumers to Each Other Connects Them to Your Brand

“The ‘Connection Proclivity’ in women starts early. When asked, ‘How was school today?’ a girl usually tells her mother every detail of what happened, while a boy might grunt, ‘Fine.’ ” EVEolution

Weight Watchers International “Model” “What if ExxonMobil or Shell dipped into their credit card database to help commuting women interview and make a choice of car pool partners?” “What if American Express made a concerted effort to connect up female empty-nesters through on-line and off-line programs, geared to help women re-enter the workforce with today’s skills?” EVEolution

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

THIS JUST MIGHT BE THE BIGGEST “THING” IN THIS SEMINAR. [PLEASE: THINK ABOUT IT!]

“Honey, are you sure you have the kind of money it takes to be looking at a car like this?”

STATEMENT OF PHILOSOPHY: I am a businessperson. An analyst. A pragmatist. The enormous social good of increased women’s power is clear to me; but it is not my bailiwick. My “game” is haranguing business leaders about my fact-based conviction that women’s increasing power – leadership skills and purchasing power – is the strongest and most dynamic force at work in the American economy today. Dare I say it as a long-time Palo Altan … THIS IS EVEN BIGGER THAN THE INTERNET! Tom Peters

“If we are single, they say we couldn’t catch a man. If we are married, they say we are neglecting him. If we are divorced, they say we couldn’t keep him. If we are widowed, they say we killed him.” Kathleen Brown, on the joys of female political candidacy

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

Subject: Marketers & Stupidity It’s 18-44, stupid!

Subject: Marketers & Stupidity Or is it: is stupid, stupid!

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

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

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

Brand Leadership Passion Rules!

“Create a Cause, not a ‘business.’ ” Gary Hamel, Fortune (06.00), on re- inventing a company (Exemplar #1: Charles Schwab)

Summary Death of the Corporation? Lessons from the Bees? 90% White-collar Carnage? Rockin’ Finance Department? Talent Obsession? Same-old Same-old? Cool Customers? Total E-reinvention? Written any $18B Checks Lately? Women’s Market? Business as Cause?