Distinct or Extinct Tom Peters Seminar2000 United Technologies Research Center East Hartford 26 June 2000
Pentium III 800MHz: $42,893.00/# Hermes Scarf: $1,964.29 Saving Private Ryan on DVD: $874.75 Mercedes-Benz: $18.98 Hot-rolled steel: $0.19 Source: Fortune (3.20.00) An Age of Passion:
1 Year = 1.5 Wal*Marts 03.27.99: $167B 03.27.00: $555B No Wiggle Room! Incrementalism is
innovations worst enemy. Nicholas Negroponte Just Say No I dont intend to be known as the King of the
Tinkerers. CEO, large financial services company (New York, 5-99) Part I: Brand Inside Part II: Brand Outside Part III: Brand Leadership
Forces @ 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 It is generally much easier to kill an organization than
change it substantially. Kevin Kelly, Out of Control Headlines 06.15.00: Your Call! Bell Atlantic-GTE vs.
Lucent 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: $19,000.00 Hermes Scarf: $1,964.29
Saving Private Ryan on DVD: $874.75 Mercedes-Benz: $18.98 Hot-rolled steel: $0.19 Source: Fortune (3.20.00) Enron (per Gary Hamel/Fortune/06.00) Design an open market for ideas Offer an open market for capital
Open up the market for talent Make like a cell: Divide and divide (We havent been able to start new businesses within existing businesses) Pay your innovators well really well
Expected Batting Average? Intels venture fund: 275 investments, $8B Source: Fast Company , eCompany C.E.O.
to C.D.O. The Gales of Creative Destruction +29M = -44M + 73M +4M = +4M - 0M
Paradox Redux Atlanta: +113,600 = #1 metro area Layoffs [major]: BellSouth, Lockheed, Coca-Cola Brand Inside Brand Org:
Lean, Linked, Electronic & Malleable 108 X 5 vs. 8 X 1*
The Pincer 5 Destructive entrepreneurs/ Global Competition White Collar Robots THE INTERNET! [E.g.: GM + Ford + DaimlerChrysler] Global Outsourcing
[E.g.: India, Mexico] Speed!! RR on Assetless [J.B.] Sara Lee The most profitable businesses in the future will act
as knowledge brokers, linking insights into whats available with insights into the customers individual needs and preferences. The &-!!+#$% in the middle* Jim Clark on Healtheon/WebMD
* twixt docs, patients, insurers and providers; $275B of $400B in waste; source: Michael Lewis, The New New Thing [ Incidentally CEO Jeff Arnold Age: 30
First Start-up: Age 24] This is the Age of Ageism: The real innovators dilemma isnt disruptive technologies; its the relentless rise of the quasiadolescents who wield them. Michael Schrage
A good plant engineer in a paper may create $100,000 to $300,000 in value per year. An outstanding software product developer may create a product worth $1,000,000 to $300,000,000. 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 (05.17.00) We want to be the air traffic controllers of electrons.
Bob Nardelli, GE Power Systems So does Enron! [et al.] The e-conomy is one of reintermediation, 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
Brand Inside Brand Work! So what will be the Basic Building Block of the New Org?
Why are there no books on how to create a Cool, Rocking, WOW-producing Finance Department? New Orleans
April 2000: Jazz Festival + NAPM Welcome to the Y2K New Orleans Jazz and Real Cool Purchasing Dudes
Festival! You are the Rock Stars of the B2B Age! Message: You are
Re-invention Evangelists! PSF 1.0 Department Head to
Managing Partner, HR [IS, etc.] Inc. Enter The WOW Project!* *The Project50
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 theyll never end up as more than mediocre successes. CEO, F100 financial services company (10-98) Every project we take on starts with a question: How can we do whats
never been done before? Stuart Hornery, CEO, Lend Lease Implementation: A Culture of Prototyping Effective prototyping may be
the most valuable core competence an innovative organization can hope to have. Michael Schrage You cant 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 All-Time Prototype Champ THE SPREAD SHEET!
The new metabolism! He who has the quickest O.O.D.A. Loops* wins! *Observe. Orient. Decide. Act. / Col. John Boyd
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 1) Turn ignition key. 2) Shift into drive. 3) Press foot firmly on the throat of mediocrity.
Source: Mercedes ad Brand Inside Brand You: Distinct or Extinct
DISTINCT OR EXTINCT! If there is nothing very special about your work, no matter how hard you apply yourself, you wont get noticed and that increasingly means you wont get paid much, either. Michael Goldhaber, Wired
If one quarter cant make the journey, thats the way it has to be. Carly Fiorina (1-00/Forbes) 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 (05.17.00)
Seminar Y2K/Brand Inside Message: Distinct or Extinct! Brand Inside Brand Talent: The
Great War for Talent Issue Y2K 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 The markets being divided
up right now. Were in a tough competition [with the U.S. and the U.K.] for the best brains. Gerhard Schroeder, on Germanys new tech immigration policy [Frankfurter Allgemeine/06.02.00]
Winner Take All! From 1, 2 or 3 [JW] to Best talent in each industry segment to build better models and proprietary intangibles [EM] Ed Michaels, War for Talent (05.17.00)
Home Depot Goes Long! 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 (05.17.00) The Silent Battlefield 50% of middle mgrs. In big corps. report moderate to high chance theyll change companies within 3 years More loyalty to geography than companies
Most companies: dont know how many 2540 year olds theyre losing, have no special retention programs Ed Michaels, War for Talent (05.17.00) Talent war, Web-speed! Every resume or employment question that comes to Lucent via the Web gets answered in 30
minutes or less. [24/7.] Red Herring [06.00], on Lucent Director of Recruitment Jim Baughman 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 Why PWC [Etc.]? We acquire and manage large stables of Talent
better. PWC Exec Alan Kay on PARCs Bob Taylor He was a connoisseur of
talent. 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 (05.17.00)
Where do good new ideas come from? ... Thats simple! From differences. Creativity comes from unlikely juxtapositions. The best way to maximize differences is to mix ages, cultures and disciplines.
Nicholas Negroponte 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
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
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 Ive ever had to deal with.
Solution? Slip Ritalin into his food Or Elect Him Prime Minister
Tony Blair* Axiom: Never hire anyone without an aberration in their background. (Find the One Ton Cookie Man!)
Talent War Y2K! All out!/ Time consuming! Never ending!/ Unwinnable! Includes everybody!/ Everybodys game! (Were all in sales.) Expensive! Cool!/ WOW!/ Fun!/ Creative! Strategic!/ Core competence!
Talent War Y2K! Brand You within Brand Us! Encompassing!/ Cultural! (KEWLNESS: mine v. yours) Substantive!/ The best Projects win! [Cairo 12-99] Basis of Brand!/ WHO WE
ARE! Talent = Brand Part I: Brand Inside Part II: Brand Outside Part III: Brand Leadership
Forces @ Work II The Commodity Trap 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 We make over three new product announcements a day. Can you remember
them? Our customers cant! 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 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 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, youll get only incremental advances. Joseph Morone, President, Bentley College These days, you cant succeed as a
company if youre consumer led because in a world so full of so much constant change, consumers cant anticipate the next big thing. Companies should be idealed and consumerinformed. 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
Good = Bad/ 1 of 30,000 We are crazy. We should do something when people say it is If people say something is good, it means someone else is already doing it.
crazy. Hajime Mitarai, Canon Benchmarking, Perils of The best swordsman in the world doesnt 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 doesnt do the thing he ought to do, and so the expert isnt 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.
Amen! The Age of the Never Satisfied Customer Regis McKenna
Brand Outside Strategy 2: Use E-Commerce to Re-invent the Business! ?????
$35,000,000. Dells Web sales daily
Tomorrow Today: Cisco! 90% of $14.4B (Cisco Connection ONLINE) Save $500M (service and tech support)
C.Sat e >> C.Sat H Customer Engineer Chat Rooms/Collaborative Design ($1B free consulting) And Larry?
Lessons from Earths Richest Human Everything [In & Out] via Internet $1B in 99-00 [on a cost base of $6B] $1B in 00-01
Service Call Center $300.00 per transaction to $1.50 Savings: $550,000,000.00 Source: Ralph Seferian, VP, Oracle B2B
Covisint $240B (+$500B) I.P.O. Anne Busquet/ American Express Not: Age of the Internet
Is: Age of Customer Control The Supply Side The Age of the Choiceboard The War of the Choiceboards
Source: Adrian Slywotzky, HBR 1-2/2000 [<1%] Even if executives of established businesses grasp the impact of new technologies they still face a massive competitive disadvantage precisely because they are incumbents. They do
complex financial calculations and get bogged down in internal political debates. Insurgents have no such inhibitions. Philip Evans & Thomas Wurster, Blown to Bits Jargon Bath!
Bureaucracy free Systemically integrated Internet intense Knowledge based Time and location free Instantly responsive Customer centric Mass customization enabled.
Translation Bureaucracy free = Flat org, no B.S. Systemically integrated = Whole supply chain tightly wired/ friction free Internet intense = Do it all via the Web Knowledge based = Open access Time and location free = Whenever, wherever
Instantly responsive = Speed demons Customer centric = Customer calls the shots Mass customization enabled = Every product and service rapidly tailored to client requirements Brand Outside Strategy 3:
Design Rules! All Equal Except At Sony we assume that all products of our competitors have basically the same technology, price, performance and Design is the only thing
that differentiates one product from another in the marketplace. features. Norio Ogha
Design is treated like a religion at BMW. Fortune (10/98) Design as Soul We dont have a good language to talk about this kind of thing. In most peoples 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
Lady Sensor, Mach3, and $70M on developing the CrossAction toothbrush 23 patents, including 6 for the packaging Source: www.ecompany.com [06.00]
Car designers need to create a story. Every car provides an opportunity to create an adventure. The Prowler makes you smile. Why? Because its focused. It has a plot, a reason for being, a passion. Freeman Thomas, co-designer VW Beetle; designer Audi TT
Jonathan Ive (iMac) Design = There are three basic principles behind any welldesigned product: truth, humanity, and
simplicity. Sohrab Vossoughi, Ziba Design Brand Outside Strategy 4: Its 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 thats not work or home. Its 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 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, HP @ Comdex 99 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] 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, Toms of Maine Corporate Religion is a completely new way
of thinking about companies. Today, the product is still the main communication highway in the company. When companies make the shift to selling solutions, brands and attitudes communicating the companys attitudes and values becomes the decisive parameter for success. It
demands that you find out who you are as a company. Jesper Kunde, Corporate Religion 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 The challenge for IBM, AT&T and other mainstream companies is to
re-instill a sense of adventure in recruits. Burke Stinson, AT&T Create a Cause, not a business. Gary Hamel, Fortune (06.00), on reinventing a company (Exemplar #1: Charles Schwab)
Leadership is a performance. You have to be conscious of your behavior, because everybody else is. Carly Fiorina Brand Leadership:
ENTHUSIASM RULES! I am a dispenser of enthusiasm/ Ben Zander Ann Richards Dogma Show up!
Know your message! PUT YOURSELF AT RISK EVERY DAY! If things seem under control, youre just not going
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