Distinct or … Extinct Tom Peters Seminar2000 HSM Porto Alegre 22 August 2000

Pentium III 800MHz: $42,893.00/# Hermes Scarf: $1, Saving Private Ryan on DVD: $ Mercedes-Benz: $18.98 Hot-rolled steel: $0.19 Source: Fortune ( )

A Year to Remember: : $167B : $555B

“Researchers say they have found a way to mate human cells with circuitry in a ‘bionic chip’ … The tiny device – smaller and thinner than a strand of hair – combines a healthy human cell with an electronic circuitry chip.” AP/AOL/02-00

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

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

Jacques’ New New Ford Ford + MSN CarPoint Ford + Yahoo! Ford + Oracle [Now Covisint] Ford + HP/Worldcom Etc.

“There’s going to be a fundamental change in the global economy unlike anything we have had since the cavemen began bartering.” Arnold Baker, Chief Economist, Sandia National Laboratories

NOW THAT’S B-I-G! “The period will bring the single greatest change in worldwide economic and business conditions since we came down from the trees.” David Schneider & Grady Means, MetaCapitalism

“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)

“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)

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

John Roth’s “Rules” [Nortel] 1. Our strategies must be tied to leading-edge customers on the attack. 2. Time cannot be sacrificed for better quality, lower cost, or even better decisions. 3. It doesn’t matter whether you develop or acquire leading technology. Our job is to provide the technology and products our customers need. 4. Success is achieved by leading change, not waiting for it. 5. We are paranoid about our leadership – willing to cannibalize our own products to maintain our edge. Source: Abridged from The Wall Street Journal ( )

Tom Peters Seminar2000 Brand Everything : Distinct or Extinct!

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!

Forget > Learn “The problem is never how to get new, innovative thoughts into your mind, but how to get 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

Pentium III 800MHz: $42,893.00/# Cisco Engineer: $19, Hermes Scarf: $1, Saving Private Ryan on DVD: $ Mercedes-Benz: $18.98 Hot-rolled steel: $0.19 Source: Fortune ( )

Expected “Batting Average”? Intel’s venture fund: 275 investments, $8B Source: Fast Company, eCompany

The [New] G e Way DYB.com

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

More “Gales” Atlanta: +113,600 = #1 metro area Layoffs [major]: BellSouth, Lockheed, Coca-Cola

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

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

White Collar Revolution!

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

The Pincer 5 “Destructive” entrepreneurs/ Global Competition “White Collar Robots” THE INTERNET! [E.g.: GM + Ford + DaimlerChrysler] Global Outsourcing [E.g.: India, Mexico] Speed!!

Headline: “Bank of America to Cut … 10,000 Jobs” “ Middle-level and senior managers are expected to be the principal targets of the job cutbacks.” Source: The New York Times ( )

“More and more companies these days want to be like Cisco. They want to focus on their core business and outsource all the superfluous stuff, like human resources, procurement and accounting.” Forbes.com, , on ASPs

“Assetless Company” J.B.

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

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.”

Brand Inside Brand Work: The Professional Service Firm Model & The WOW Project

So what will be the Basic Building Block of the New Org?

New Orleans April 2000: Jazz Festival + NAPM

Message: You are Re-invention Evangelists!

Chicago November 1999: SHRM

Message: You are Rock Stars of the “Age of Talent”

Every job done in W.C.W. is also done “outside” … for profit!

Credo “WORK WORTH PAYING FOR”

“PSF” Model Department Head to … Managing Partner, HR [IS, etc.] Inc.

The Raw Material … The WOW Project!

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

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

Characteristics of the “Also Rans” “minimize risk” “respect the chain of command” “support the boss” “make budget” Source: Fortune’s “most admired global corporations”

Brand Inside Brand You: Distinct … or Extinct

“The fundamental unit of the new economy is not the corporation, but the individual. Tasks aren’t assigned and controlled through a stable chain of command but are carried out autonomously by independent contractors - e-lancers - who join together in fluid and temporary networks to sell goods and services. When the job is done, the network dissolves and its members become independent again, circulating through the economy, seeking the next assignment.” Thomas Malone and Robert Laubacher

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

Minimum New Work SurvivalSkillsKit2000 Mastery Networking Obsession Finishing Skills Entrepreneurial Instinct Master of Improv Sense of Humor Intense Appetite for Technology Groveling Before the Young Embracing “Marketing” Passion for Renewal

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

“You must realize that how you invest your human capital matters as much as how you invest your financial capital. Its rate of return determines your future options. Take a job for what it teaches you, not for what it pays. Instead of a potential employer asking, ‘Where do you see yourself in 5 years?’ you’ll ask, ‘If I invest my mental assets with you for 5 years, how much will they appreciate? How much will my portfolio of career options grow?’ ” Stan Davis & Christopher Meyer, futureWEALTH

Seminar Y2K/Brand Inside Message: Distinct … or Extinct!

Brand Inside Brand Talent: The Great War for Talent

“Seller’s Market”: Tomorrow’s Headline* “Molecular biologists are up 3 points, economists down 1/4, in moderate trading” *futureWEALTH, Stan Davis and Christopher Meyer

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

“The market’s being divided up right now. We’re in a tough competition [with the U.S. and the U.K.] for the best brains.” Gerhard Schroeder, on Germany’s new tech immigration policy [Frankfurter Allgemeine/ ]

There is no “talent shortage” … if … you are a GPTW* *Great Place To Work

Obsession! Greatness! Performance! Pay! Youth! Diversity! Women! Weird! Opportunity!

1. Obsession! 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 ( )

“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

GE Is a “Talent Machine” “In most companies the talent review process is a farce. At GE, Welch and his two top HR people visit each division for a day. They review the top 20 to 50 people by name. They talk about Talent Pool strengthening issues. The talent review process is a contact sport. It has the intensity and the importance of the budget process at most companies.” Ed Michaels, War for Talent ( )

2. Greatness! Home Depot: 7 new growth initiatives ($20B to $100B in 5-7 years) Arthur Blank: BEST PERSON IN THE WORLD TO HEAD EACH INITIATIVE E.g.: COO of IKEA to head international expansion Ed Michaels, War for Talent ( )

3. Performance! “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 ( )

4. Pay! “Top performing companies are two to four times more likely than the rest to pay what it takes to prevent losing top performers.” Ed Michaels, War for Talent ( )

Pursuing the $3 Million Dollar Engineer! John Chambers “Gets it”!!

5. Youth! “This is the Age of Ageism: The real innovator’s dilemma isn’t ‘disruptive technologies;’ it’s the relentless rise of the quasi- adolescents who wield them.” Michael Schrage

“A good plant engineer in a paper mill may create $100K to $300K in value per year. An outstanding software product developer may create a product worth $1M to $300M. Talented people are less likely to wait their turn. We used to view young people as trainees; now they are authorities. Arguably this is the first time the older generation can – and must – leverage the younger generation very early in their careers” Ed Michaels, War for Talent ( )

6. Diversity! “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

“Capitalism and the conditions for creating wealth have changed in ways that play to the strengths of hybrid individuals, organizations and nations. And those that wish to profit from changing economic conditions must view hybridity as their first and best option. This bold claim warrants an explanation. The ability to apply knowledge to new situations is the most valued currency in today’s economy. Highly creative people … are misfits on some level. They tend to question accepted views and consider contradictory ones. This appreciation defines the mongrel mentality. Strangers instinctively question things that natives take for granted. Many things strike them as odd or stupid. …” G. Pascal Zachary, The Global Me

7. Women! 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 Strengths = 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

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

8. Weird! “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

What Do We Do With Him? “He grew his hair long, played guitar in a rock band, chased girls, got into trouble. At age 17 he was flogged by his house master, who described him as ‘the most difficult boy I’ve ever had to deal with.’ ”

Elect Him Prime Minister Tony Blair* *talk/May 2000

“Whoever is the most impertinent has the best chance.” W.A. Mozart

9. Opportunity! “H.R.” to “H.E.D.” ??? Human Enablement Department

“Firms will not ‘manage the careers’ of their employees. They will provide opportunities to enable the employee to develop identity and adaptability and thus be in charge of his or her own career.” Tim Hall et al., “The New Protean Career Contract”

Talent = Brand

Brand Outside = Brand Inside

Brand Inside Brand Action: Getting Started … a Personal Perspective

Topic: Boss-free Implementation of STM /Stuff That MATTERS!

I. THE IDEA “4Fs”: F ind a F ellow F reak F araway

World’s Biggest Waste … Selling “Up”

Heart of the Matter F2F!* *Kook to Kook

Create a Personal University of Weird!

II. THE NUGGET Do Something. Do Anything. Get Going. Now.

Opportunity ALWAYS Knocks VFCJ* “Strategy” *Volunteer For Crappy Jobs

Is It … Fix these bloody customer problems that have cropped up with the new 2783B? Or … A chance to work with a hotshot, young division GM on … using the Internet/Internet Speed to revisit the entire process of how we get customer input – before and during the fact – into the heart of the Product Design Process?

III. THE TOOL Prototyping Mania!

Culture of Prototyping “Effective prototyping may be the most valuable core competence an innovative organization can hope to have.” Michael Schrage

“You can’t be a serious innovator unless and until you are ready, willing and able to seriously play. ‘Serious play’ is not an oxymoron; it is the essence of innovation.” Michael Schrage, Serious Play

Think about It!? Innovation = Reaction to the Prototype Michael Schrage

The Kotler Doctrine: 70s: R.A.F. (Ready.Aim.Fire.) 80s: R.F.A. (Ready.Fire.Aim.) 90s-Now: F.F.F. (Fire.Fire.Fire.)

IV. BOTTOM LINE The Enemy!

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

Reprise: Brand Inside The White Collar Revolution & The Web [Destruction Rules!] PSF as Building Block [Work Worth Paying For] Work Worth Paying For = WOW Projects! Brand You [Everybody!] The Great War for Talent! Getting Going: Boss-free Imp of STM! [F2F]

Addenda 21 August 2000

Richard Rosecrance, The Rise of the Virtual State: Wealth and Power in the Coming Century

Hong Kong: Prototypical “Virtual State” 83% Service 8% Mfg. Source: Richard Rosecrance, The Rise of the Virtual State

“The virtual corporation is research, development, design, marketing, financing, legal, and other headquarters functions with few or no manufacturing capabilities – a company with a head but no body.” Richard Rosecrance, The Rise of the Virtual State

“We own all the intellectual property, we farm out all the direct labor.” Jim McDonnell, VP, IBM

“The Futility of Size … [Regarding this issue] the new process of virtualization fully exerts itself. Virtualization is the recognition that territorial size does not solve economic problems. … Economic access must become the substitute for economic domain.” Richard Rosecrance, The Rise of the Virtual State

TP: Skill at creating, exploiting, and exiting crucial alliances beats ownership of fixed assets.

“The new dependence on productive assets located within someone else’s state represents an unprecedented trust in the integrity and peacefulness of strangers.” “In its pure form – an ideal model toward which many states are tending – the virtual state carries within it the possibility of an entirely new system of world politics.” Richard Rosecrance, The Rise of the Virtual State

“At the ultimate stage, competition among nations will be competition among educational systems, for the most productive and richest countries will be those with the best education and training.” Richard Rosecrance, The Rise of the Virtual State

And the Question … $70,000

“Elementary and high school teachers should be rewarded as patient creators of high-value capital in the United States and elsewhere.” Richard Rosecrance, The Rise of the Virtual State

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

Context: “No” to “inevitable commoditization” S1: Lead the Customer! S2: Re-invent with E-Commerce! S3:Fighting Back via Systems integration! S4: Design Matters! S5: It’s the Experience! S6: Women Rule! S7: Embracing an Age of Self-Determination! S8: Think Global! S9: Brand Power & Summary!

Why These Strategies? No choice! Under-utilized!!!!!!!!!!!!!!!!

Work II 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

Context: “No” to “inevitable commoditization” S1: Lead the Customer! S2: Re-invent with E-Commerce! S3:Fighting Back via Systems integration! S4: Design Matters! S5: It’s the Experience! S6: Women Rule! S7: Embracing an Age of Self-Determination! S8: Think Global! S9: Brand Power & Summary!

Brand Outside Strategy 1 : Lead the Customer!

“These days, you can’t succeed as a company if you’re consumer led – because in a world so full of so much constant change, consumers can’t anticipate the next big thing. Companies should be idea- led and consumer- informed.” Doug Atkin, partner,Merkley Newman Harty

“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

“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

Lucent Tanks! Cause(s): (1) Listening to BIGGEST, SLUGGISH customers. (2) Failing to exploit the Web internally or externally Source: Business Week ( )

Message … Biggest is not always [often?] most beautiful! F2F Rules: How’s your “freaks” portfolio?

Context: “No” to “inevitable commoditization” S1: Lead the Customer! S2: Re-invent with E-Commerce! S3: Fighting Back via Systems integration! S4: Design Matters! S5: It’s the Experience! S6: Women Rule! S7: Embracing an Age of Self-Determination! S8: Think Global! S9: Brand Power & Summary!

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

OVERVIEW

/0511AM: 2,380,854,946

/0509AM: 2,409,656,263

95 Hours, 58 Minutes … +28,801,317

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

Tomorrow Today: Cisco! 87% of $20B* (Cisco Connection ONLINE) Save $500M (service and tech support) * = $48,000,000 … per DAY

Oracle Everything [In & Out] via Internet $1B in ’99-’00 [on a cost base of $6B] $1B more in ’00-’01

Service Call Center $ per transaction to $1.50 Savings: $550,000, Source: Ralph Seferian, Oracle

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]

COMMUNITY!/ COMMUNITY SERVICES!

Tomorrow Today: Cisco! 87% of $20B (Cisco Connection ONLINE) Save $500M (service and tech support) C.Sat e >> C.Sat H Customer Engineer Chat Rooms/Collaborative Design ($1B “free” consulting)

B2C Success “Genuine brand strength” “Build community” Source: Geoffrey Moore

Community … Somewhat mediated, segmented chat rooms (must be “managed”/ seeded) User-friendly technical/ professional info Industry “intelligence” Some very timely stuff/ attractors Hotlinks by the gazillion (to professional and unrelated stuff) Expert/ advisor opinions (info, chats, etc.) Opportunity for users to build own Web page & create own communities

CUSTOMER PERSPECTIVE: D.I.Y./ CONTROL

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

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

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

“The Web enables total transparency. People with access to relevant information are beginning to challenge any type of authority. The stupid, loyal and humble customer, employee, patient or citizen is dead.” Kjell Nordstrom and Jonas Ridderstrale, Funky Business

“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

“Most companies would do more business on the Internet if they fired their entire marketing department and replaced it with people who could produce interactive content that actually made it easier for users to buy.” Jakob Nielsen, Nielsen Norman Group

Red Herring (01/00) 75% of online shoppers don’t complete their purchase!

RADICAL STRATEGIES REQUIRED

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

[ GE Power Systems/GEPartsEdge Was: 2 weeks to analyze a major generator problem Is: 1 hour]

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

“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]

ACT NOW, ACT FAST, KEEP ACTING

“It’s better to be first with less than last with more. Success on the Web isn’t just about time to market, it’s also about ‘time to learning.’ ” Jeff Levy, eHatchery

Web Strategy: GE Power Systems “Launch and Learn” (4 sites in 30 days)

SUMMARY: REINVENT EVERYTHING

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

“There is no use trying,” said Alice. “One can’t believe impossible things.” “I dare say 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

The Web … A DREAMER’S MEDIUM!

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

“It” is real! It is “Life and Death”! Dream BIG! Start Now! Study Hard! Play Hard! Play Fast! Go on Offence! Hire great folks! (They ain’t cheap. They are young!) Don’t cut corners on infrastructure! Rem: “Age of the Never Satisfied Customer”! We ain’t seen nothin’ yet!

Context: “No” to “inevitable commoditization” S1: Lead the Customer! S2: Re-invent with E-Commerce! S3: Fighting Back via Systems integration! S4: Design Matters! S5: It’s the Experience! S6: Women Rule! S7: Embracing an Age of Self-Determination! S8: Think Global! S9: Brand Power & Summary!

Brand Outside Strategy 3 : Fighting Back via Systems Integration!

THE CASE

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

GM/Ford/DaimlerChrysler (02-25) Covisint $240B (+$500B) I.P.O.

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

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

THE RESPONSE

Message: Do More & More & More & More & More … for/with the Customer and the Supply-Demand Chain!

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

“Systems Integrators” Unite [And Conquer] Cisco’s winning strategy [USAToday 07.11]: “Become the ‘Go-to’ Systems Provider”

“Customer Satisfaction” to “Customer Success” “We’re getting better at [Six Sigma] every day. But we really need to think about the customer’s profitability. Are customers’ bottom lines really benefiting from what we provide them?” Bob Nardelli, GE Power Systems

GE’s New Six Sigma Approach Old view: Out of service 9 days. 4 days are transport, which is client responsibility. New view: ALL 9 DAYS ARE OUR RESPONSIBILITY! Why? 9 days = Client’s World. Source: Steve Kerr, VP, GE

Defense-Offense: Systems Integration/HVA Delphi, Dana United Technologies, Corning, GE, Sun, Carpet One, Bud … [Anybody in their right mind!]

E.g. … GE: boxes [transformers, etc.] to “air traffic controllers of electrons” UTC/Otis + Carrier: boxes to “integrated building systems”; P&W, etc.: boxes to major aircraft subsystems

The Supply Side … The Age of the Choiceboard The War of the Choiceboards Source: Adrian Slywotzky, HBR 1-2/2000 [<1%]

“The e-conomy is one of re-intermediation, where new technologies make it possible to radically increase complexity and efficiency with the introduction of new marketplaces. In these markets, value chains constantly reorganize as the demands of the consumer and business change.” Thomas Koulopoulos, Delphi Group

Context: “No” to “inevitable commoditization” S1: Lead the Customer! S2: Re-invent with E-Commerce! S3: Fighting Back via Systems integration! S4: Design Matters! S5: It’s the Experience! S6: Women Rule! S7: Embracing an Age of Self-Determination! S8: Think Global! S9: Brand Power & Summary!

Brand Outside Strategy 4 : Design Matters!

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 Ogha

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

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

Message: “Great - Cool Stuff” Matters. Great & Cool Trumps Not-So-Great & Ho Hum!

Message iMac: “Great Stuff” Takes Guts!!

Unconventional [Design] Messages Not about... “Lumpy Objects”! Not about... $79,000 objects

Lady Sensor, Mach3, and … $70M on developing the CrossAction toothbrush 23 patents, including 6 for the packaging Source: [06.00]

‘Message: “Services” are Not Intangible! You “give off” hundreds of design cues … daily! YOU ARE A DESIGNER!

Getting Started: The “Beauty Contest!” 1. Pick one form/ document: invoice, airbill, sick leave policy, returns claim form. 2. Rate it on a 1 to 10 scale (1 = Awful; 10 = Scintillating) on three dimensions: Beauty, Grace, Clarity. 3. Repeat … every 15 days.

Context: “No” to “inevitable commoditization” S1: Lead the Customer! S2: Re-invent with E-Commerce! S3: Fighting Back via Systems integration! S4: Design Matters! S5: It’s the Experience! S6: Women Rule! S7: Embracing an Age of Self-Determination! S8: Think Global! S9: Brand Power & Summary!

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

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

“Car designers need to create a story. Every car provides an opportunity to create an adventure. … “The Prowler makes you smile. Why? Because it’s focused. It has a plot, a reason for being, a passion.” Freeman Thomas, co-designer VW Beetle; designer Audi TT

Hmmmm(?): “Only” Words … Story Adventure Smile Focus Plot Passion

So …. WHAT’S THE [your] PLOT?

“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

“This story is bigger than shifting market share or selling a few more cars, or dodging the dealer by buying direct. Rather, it’s about the redefinition of the automobile itself, and the relationship of its owner to its maker. Think of the auto as a rolling wireless portal on wheels, connecting you to your kitchen, your bank, your kids, your office.” Business 2.0, “Four Wheel Drive,”

Context: “No” to “inevitable commoditization” S1: Lead the Customer! S2: Re-invent with E-Commerce! S3: Fighting Back via Systems integration! S4: Design Matters! S5: It’s the Experience! S6: Women Rule! S7: Embracing an Age of Self-Determination! S8: Think Global! S9: Brand Power & Summary!

Brand Outside Strategy 6 : Women Rule!

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

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

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

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)

Yeow! 1970 … 1% 2002 … 50%

OPPORTUNITY NO. 1!

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

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

Enterprise Reinvention! Recruiting Hiring/Rewarding/ Promoting Structure Processes Measurement Strategy Culture Vision Leadership THE BRAND ITSELF!

27 March 2000: to TP from Shelley Rae Norbeck “I make 1/3 rd more money than my husband does. I have as much financial ‘pull’ in the relationship as he does. I’d say this is also true of most of my women friends. Someone should wake up, smell the coffee and kiss our asses long enough to sell us something! We have money to spend and nobody wants it!”

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

Psssst! Wanna see my “porn” collection?

Context: “No” to “inevitable commoditization” S1: Lead the Customer! S2: Re-invent with E-Commerce! S3: Fighting Back via Systems integration! S4: Design Matters! S5: It’s the Experience! S6: Women Rule! S7: Embracing an Age of Self-Determination! S8: Think Global! S9: Brand Power & Summary!

Brand Outside Strategy 7 : Embracing an Age of Self-Determination

The Individual

White Collar Revolution!

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

The Work

Enter … The WOW Project!* *The Project50

Credo “WORK WORTH PAYING FOR”

The Organization: [Talent] Seller’s Market

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

“A good plant engineer in a paper mill may create $100K to $300K in value per year. An outstanding software product developer may create a product worth $1M to $300M. Talented people are less likely to wait their turn. We used to view young people as trainees; now they are authorities. Arguably this is the first time the older generation can – and must – leverage the younger generation very early in their careers” 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 Market: Fighting Sameness with Distinction

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

Web World: POWER TO THE PEOPLE

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

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

I’net Freedom Manifesto I AM IN CHARGE HERE! I CAN DO WHATEVER I NEED OR WANT TO DO WHENEVER I WANT TO DO IT!

Women Get Respect … and Take Charge

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

The Poor Get Respect

Grameen Bank/Bangladesh “It’s not people who aren’t credit- worthy. It’s banks that aren’t people worthy.” $2.3B to 2.3M [typical 1 st loan: $15.] 98% recovery rate [94% to women] 1/3 rd out of poverty; 1/3 rd up to non- poverty threshold Muhammad Yunus, Banker to the Poor

“The Grameen loan is not simply cash. It becomes a kind of ticket to self-discovery and self-exploration.” Muhammad Yunus

Self-Determination & Empowerment: Dealing in Hope

“A leader is a dealer in hope.” Napoleon

Sooooo … Is your strategy centered around customer-client empowerment & self- determination?

Context: “No” to “inevitable commoditization” S1: Lead the Customer! S2: Re-invent with E-Commerce! S3: Fighting Back via Systems integration! S4: Design Matters! S5: It’s the Experience! S6: Women Rule! S7: Embracing an Age of Self-Determination! S8: Think Global! S9: Brand Power & Summary!

Brand Outside Strategy 8 : Think Global!

THE EIGHT “RULES”

Rule #1 If “it” is [truly] good … then it’s good enough for … THE WORLD.

Rule #2 There’s no such thing as “too small to be global.”

Rule # 3 When? Now.

Rule #4 Hang out … vigorously!

Rule #5 Seek Talent! Send Talent!

Rule #6 Find a [modest- sized] partner … who loves/ “gets” you!

Rule #7 Tailor!! [But don’t give away the store.]

Rule #8 Phil Crosby notwithstanding, you’ll not [likely] “get it right the first time”!

Context: “No” to “inevitable commoditization” S1: Lead the Customer! S2: Re-invent with E-Commerce! S3: Fighting Back via Systems integration! S4: Design Matters! S5: It’s the Experience! S6: Women Rule! S7: Embracing an Age of Self-Determination! S8: Think Global! S9: Brand Power & Summary!

Brand Outside Strategy 9 & Summary: 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]

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.”

“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

“In the funky village, real competition no longer revolves around marketshare. We are competing for attention – mindshare and heartshare.” Kjell Nordstrom and Jonas Ridderstrale, Funky Business

Brand = You Must Care! “Success means never letting the competition define you. Instead you have to define yourself based on a point of view you care deeply about.” Tom Chappell, Tom’s of Maine

Branding; Call the Corporate Shrink! “Organizational Psychotherapy”/ WHO WE ARE!

Brand = Special = Passion = Plot = Compelling Mythology = Cause = Connection = Heart

To Do … Write an essay on “Who we are.”* * Jesper Kunde, Corporate Religion

Rules of “Radical Marketing” Love + Respect Your Customers! Hire only Passionate Missionaries! Create a Community of Customers! Celebrate Craziness! Be insanely True to the Brand! Sam Hill & Glenn Rifkin, Radical Marketing (e.g., Harley, Virgin, The Dead, HBS, NBA)

Brand Outside Reprise

Context: “No” to “inevitable commoditization” S1: Lead the Customer! S2: Re-invent with E-Commerce! S3: Fighting Back via Systems integration! S4: Design Matters! S5: It’s the Experience! S6: Women Rule! S7: Embracing an Age of Self-Determination! S8: Think Global! S9: Brand Power & Summary!

[“Incrementalism is innovation’s worst enemy.” Nicholas Negroponte]

Lead the Customer: Why Tough Guts! Failures!

Re-invention via ecommerce: Why Tough Total commitment to total enterprise [and supply chain] reinvention! DYB.com

Systems Integration: Why Tough Completely new view of what a “product” is.

Design: Why Tough True-believer-dom-ship Encompassing/Cultural

Experience: Why Tough Total Reorientation

Women’s Market: Why Tough Encompassing Attitude CULTURAL!

Self-Determination: Why Tough Cede Control

Going Global: Why Tough Attitude! Patience!

Brand Power: Why Tough Way of Life Forever! Passion Rules! Touches Everything! It Am Me [Personal!]

Message : Not for the Faint of Heart!

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

Brand Leadership Passion Rules!

Brand Leadership! “A key – perhaps the key – to leadership is the effective communication of a story.” Howard Gardner Leading Minds: An Anatomy of Leadership

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

“Leadership is a performance. You have to be conscious of your behavior, because everybody else is.” Carly Fiorina

“It is necessary for the President to be the nation’s No. 1 actor.” FDR

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

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