TIME Kapalua 4 February 2000

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)

“It means nothing less than the total reinvention of this company.”

Jacques’ New New Ford Ford + Microsoft Ford + Yahoo! Ford + Oracle Ford + HP Etc. Etc.

The “Commodity Trap”

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

“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

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]

“What Matters to Online Buyers”* #1: Product brand #2: Retailer brand *Source: Business 2.0

Opportunity No. 1 Coca Cola … 9 Virgin … 9 Amazon.com … 7 Yahoo! … 7 Sun … 3 HP … 2 (on a 1-10 scale) The Economist … 2

Time ?????

And with the Game Boy / Play Station Generation???

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

“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

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

Strategy 2 : Master E-Commerce!

$30,000,000. = ???

Dell’s Web sales … daily

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

“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

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

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

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

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

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.”

Strategy 3 : 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

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

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

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

Brand Work!

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

“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)

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)

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

Put Yourself at Risk!

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

Ann Richards’ Dogma Show up! Know your message! PUT YOURSELF AT RISK!

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