Tom Peters’ Re-Imagine! Business Excellence in a Disruptive Age KPMG/New York/

Slides at … tompeters.com

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

1. All Bets Are Off.

“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

“September 11 amounts to World War III—the third great totalitarian challenge to open societies in the last 100 years.” —Thomas Friedman/NYT/

“The World Must Learn to Live with a Wide-awake China” —Headline/FT/11.03

“14 MILLION service jobs are in danger of being shipped overseas” — The Dobbs Report/USN&WR/11.03/re new UCB study

“There is no job that is America’s God-given right anymore.” —Carly Fiorina/ HP/

“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

“We have no future because our present is too volatile. We have only risk management. The spinning of the given moment’s scenarios. Pattern recognition.” —from William Gibson, Pattern Recognition

“What is it that distinguishes the thousands of years of history from what we think of as modern times? The answer goes way beyond the progress of science, technology, capitalism and democracy. … The revolutionary idea that defines the boundary between modern times and the past is the mastery of risk: the notion that the future is more than a whim of the gods and that men and women are not passive before nature. [ Thinkers like Luca Paccioli, Jacob Bernoulli and Abraham de Moivre] converted risk-taking into one of the prime catalysts that drives modern Western society and in the process converted the future from an enemy into an opportunity.” —Peter Bernstein, Against the Gods: The Remarkable Story of Risk

2. The Destruction Imperative.

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 ( : One-half biggest 100 disappear)

“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

“It’s just a fact: Survivors underperform.” —Dick Foster

“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

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

3. The White Collar Revolution & the Death of Bureaucracy.

Steel: 75 million tons in ’82 to 102 million tons in ’ ,000 steelworkers in ’82 to 74,000 steelworkers in ’02. Source: Fortune/

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

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

“Organizations will still be critically important in the world, but as ‘organizers,’ not ‘employers’!” — Charles Handy

Ford: “Vehicle brand owner” (“design, engineer, and market, but not actually make”) Source: The Company, John Micklethwait & Adrian Wooldridge

4. IS/ IT/ Web … “On the Bus” or “Off the Bus.”

100 square feet

“ Our entire facility is digital. No paper, no film, no medical records. Nothing. And it’s all integrated—from the lab to X-ray to records to physician order entry. Patients don’t have to wait for anything. The information from the physician’s office is in registration and vice versa. The referring physician is immediately sent an telling him his patient has shown up. … It’s wireless in-house. We have 800 notebook computers that are wireless. Physicians can walk around with a computer that’s pre-programmed. If the physician wants, we’ll go out and wire their house so they can sit on the couch and connect to the network. They can review a chart from 100 miles away.” — David Veillette, CEO, Indiana Heart Hospital (HealthLeaders/ )

“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

“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

5. The “PSF Solution”: The Professional Service Firm Model.

Sarah: “ Daddy, what do you do?” Daddy: “I’m a ‘cost center.’ ”

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

TP to HRMAC: You are the … Rock Stars of the Age of Talent!

DD$21M

6. The Heart of the Value Added Revolution: PSFs Unbound/ The “Solutions Imperative.”

“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

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

: HP bids $18,000,000,000 for PricewaterhouseCoopers consulting business!

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

Gerstner’s IBM: Systems Integrator of choice. Global Services: $35B. Pledge/’99: Business Partner Charter. 72 strategic partners, aim for 200. Drop many in-house programs/products. (BW/12.01).

“UPS wants to take over the sweet spot in the endless loop of goods, information and capital that all the packages [it moves] represent.” ecompany.com/06.01 (E.g., UPS Logistics manages the logistics of 4.5M Ford vehicles, from 21 mfg. sites to 6,000 NA dealers)

7. A World of Scintillating “Experiences.”

“ 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

“Club Med is more than just a ‘resort’; it’s a means of rediscovering oneself, of inventing an entirely new ‘me.’ ” Source: Jean-Marie Dru, Disruption

“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

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

WHAT CAN BROWN DO FOR YOU?

Duet … Whirlpool … “washing machine” to “fabric care system” … white goods: “a sea of undifferentiated boxes” … $400 to $1,300 … “the Ferrari of washing machines” … consumer: “They are our little mechanical buddies. They have personality. When they are running efficiently, our lives are running efficiently. They are part of my family.” … “machine as aesthetic showpiece” … “laundry room” to “family studio” / “designer laundry room” (complements Sub-Zero refrigerator and home-theater center) Source: New York Times Magazine/

8. “It” all adds up to … THE BRAND.

“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

9. Boss Job One: The Talent Obsession.

Brand = Talent.

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

“The Creative Class derives its identity from its members’ roles as purveyors of creativity. Because creativity is the driving force of economic growth, in terms of influence the Creative Class has become the dominant class in society.” —Richard Florida, The Rise of the Creative Class (38M, 30%)

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

Talent! Tina Brown: “The first thing to do is to hire enough talent that a critical mass of excitement starts to grow.” Source: Business2.0/

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

“The leaders of Great Groups love talent and know where to find it. They revel in the talent of others.” Warren Bennis & Patricia Ward Biederman, Organizing Genius

PARC’s Bob Taylor: “Connoisseur of Talent”

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

“Where do good new ideas come from? That’s simple! From differences. Creativity comes from unlikely juxtapositions. The best way to maximize differences is to mix ages, cultures and disciplines.” Nicholas Negroponte

“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 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

“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

“Risk Work” Job 1: TALENT ACQUISITION!

10. THINK WEIRD … the HVA/ High Value Added Bedrock.

THINK WEIRD: The High Standard Deviation Enterprise.

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

CUSTOMERS: “Future- defining customers may account for only 2% to 3% of your total, but they represent a crucial window on the future.” Adrian Slywotzky, Mercer Consultants

COMPETITORS: “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

Employees: “Are there enough weird people in the lab these days?” V. Chmn., pharmaceutical house, to a lab director (06.01)

Kevin Roberts’ Credo 1. Ready. Fire! Aim. 2. If it ain’t broke... Break it! 3. Hire crazies. 4. Ask dumb questions. 5. Pursue failure. 6. Lead, follow... or get out of the way! 7. Spread confusion. 8. Ditch your office. 9. Read odd stuff. 10. Avoid moderation!

Innovation Index: How many of your Top 5 Strategic Initiatives score 7 or higher (out of 10) on a “Weirdness/Profundity Scale”?

11. Leading in Totally Screwed Up Times: The Passion Imperative.

“ Ninety percent of what we call ‘management’ consists of making it difficult for people to get things done.” – P.D.

Quests!

Organizing Genius / Warren Bennis and Patricia Ward Biederman “Groups become great only when everyone in them, leaders and members alike, is free to do his or her absolute best.” “The best thing a leader can do for a Great Group is to allow its members to discover their greatness.”

“I’m not comfortable unless I’m uncomfortable.” — Jay Chiat

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

“I’m looking for insane commitment.” —Twyla Tharp, The Creative Habit

“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

Hackneyed but none the less true: LEADERS SEE CUPS AS “HALF FULL.”

Half-full Cups: “[Ronald Reagan] radiated an almost transcendent happiness.” Lou Cannon, George ( )

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

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’?”

“You must be the change you wish to see in the world.” Gandhi