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Tom Peters Seminar2001 We Are in a Brawl with No Rules! MASTER/11.30.2001.

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1 Tom Peters Seminar2001 We Are in a Brawl with No Rules! MASTER/

2 “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

3 Uncertainty: We don’t know when things will get back to normal. Ambiguity: We no longer know what “normal” means.

4 BMcC: (1) Hierarchy vs. “Network organization.” (2) NWO = “Doctrine as center of gravity”/source of motivation; distributed support & decision- making;largely self-organizing; “outside the military sphere.”

5 From: Weapon v. Weapon To: Org structure v. Org structure

6 “Our military structure today is essentially one developed and designed by Napoleon.” Admiral Bill Owens, former Vice Chairman, Joint Chiefs of Staff

7 prior 900 years 1900s: 1 st 20 years > 1800s 2000: 10 years for paradigm shift 21 st century: 1000X tech change than 20 th century (“the ‘Singularity,’ a merger between humans and computers that is so rapid and profound it represents a rupture in the fabric of human history”) Ray Kurzweil

8 1 day 2001 = Year’s trade in 1949, year’s FEX in 1979, year’s global calls in day London FEX in 2001 = 30X year’s output in UK goods & services. Source: Charles Handy, The Elephant and the Flea

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

10 7 Rules for Leading/THRIVING in a Recession+ 1. It’s ALREADY too late. 2. Show up & tell the truth—CREDIBILITY rules. 3. Kill with KINDNESS. 4. Sharp pencils are imperative—but don’t forget that the CUSTOMER & our TALENT & RISKY INVESTMENTS are still our long-term Bread & Butter. 5. Everything’s different, everything’s the same—it’s the NEW ECONOMY, more than ever, stupid! 6. “Use” the trauma to mount the bold initiatives you should have long before mounted: Flux = OPPORTUNITY. 7. We’re in a War of Organizational Models—from retail to the Pentagon. IDEAS MATTER MOST.

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

12 Work I The Destruction Imperative!

13 Forbes100 from 1917 to 1987: 39 members of the Class of ’17 were alive in ’87; 18 are in ’87 F100; the 18 F100 “survivors” underperformed the market by 20%; just 2 (2%), GE & Kodak, outperformed the market from 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

14 Message*: Are all CEOs bozos? Was Darwin a genius, or what? So, Boss, whaddaya say about “risk taking” now? *And “all that” (2 of 100; 12 of 500) was in relatively placid times.

15 CEOs appointed after 1985 are 3X more likely to be fired than CEOs appointed before 1985 Warren Bennis, MIT Sloan Management Review

16 “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

17 “A pattern emphasized in the case studies in this book is the degree to which powerful competitors not only resist innovative threats, but actually resist all efforts to understand them, preferring to further their positions in older products. This results in a surge of productivity and performance that may take the old technology to unheard of heights. But in most cases this is a sign of impending death.” Jim Utterback, Mastering the Dynamics of Innovation

18 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

19 “The 1990s was a decade of multiple revolutions—political, economic, technological— that changed so thoroughly the way we live that the past no longer seems a good guide to the future (in fact the past seems precisely the wrong guide). So it is in the world of military affairs. The RMA is our opportunity to use the new information technology to change the very nature of the military—in a way that could reinvigorate American political, diplomatic and economic leadership in the world for decades to come.” –Bill Owens, Lifting the Fog of War

20 Japan’s Science Gap * Rice farming culture: Uniqueness suppressed. Gov’t control of R & D. Promotion based on seniority. Consensus vs. debate. (U.S.: friends can be mortal enemies.) Bias for C.I. vs. “bold leaps.” Lack of competition and critical evaluation (peer review). Syukuro Manabe: “What we need to create is job insecurity rather than security to make people compete more.” *Hideki Shirakawa, Nobel laureate, chemistry

21 The [New] G e Way DYB.com

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

23 “The secret of fast progress is inefficiency, fast and furious and numerous failures.” Kevin Kelly

24 “Active mutators in placid times tend to die off. They are selected against. Reluctant mutators in quickly changing times are also selected against.” Carl Sagan & Ann Druyan, Shadows of Forgotten Ancestors

25 “Chivalry is dead. The new code of conduct is an active strategy of disrupting the status quo to create an unsustainable series of competitive advantages. This is not an age of defensive castles, moats and armor. It is rather an age of cunning, speed and surprise. It may be hard for some to hang up the chain mail of ‘sustainable advantage’ after so many battles. But hypercompetition, a state in which sustainable advantages are no longer possible, is now the only level of competition.” Rich D’Aveni, Hypercompetition: Managing the Dynamics of Strategic Maneuvering

26 Jane Jacobs: Exuberant Variety vs. the Great Blight of Dullness. F.A. Hayek: Spontaneous Discovery Process. Joseph Schumpeter: the Gales of Creative Destruction.

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

28 “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

29 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]

30 “Terror cells are superb, malevolent examples of what Information Age organizations can be. So how do you kill them? … Soldiers used to idolize Napoleon or Patton. Network-centric warriors admire Wal*Mart for using ‘information superiority’ to crush rivals. … [The Navy’s John] Arquilla calls for small, fast, information- enabled units.” –America’s Secret Weapon, Business 2.0 (DEC2001)

31 Brand Inside Brand Org: Lean, Linked, Internet-driven, Virtual

32 White Collar Revolution!

33 108 X 5 vs. 8 X 1 = 540 vs. 8 (-98.5%)

34 The Pincer 5 1. “Destructive” entrepreneurs/ Global Competition 2. “White Collar Robots” 3. THE INTERNET! [E.g.: GM + Ford + DaimlerChrysler] 4. Global Outsourcing [E.g.: India, Mexico] 5. Speed!!

35 Automation+ 75% of what we do: 40 “expert” decision rules!

36 IBM’s Project eLiza !

37 “Unless mankind redesigns itself by changing our DNA through altering our genetic makeup, computer- generated robots will take over the world.” – Stephen Hawking, in the German magazine Focus

38 The Pincer 5 1. “Destructive” entrepreneurs/ Global Competition 2. “White Collar Robots” 3. THE INTERNET! [E.g.: GM + Ford + DaimlerChrysler] 4. Global Outsourcing [E.g.: India, Mexico] 5. Speed!!

39 Brand Inside Brand Work: The Professional Service Firm Model

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

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

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

43 TP to NAPM: You are the … Rock Stars of the B2B Age!

44 “P.S.F.”: Summary H.V.A. Projects (100%) Pioneer Clients WOW Work (see below) Hot “Talent” (see below) “Adventurous” “culture” Proprietary Point of View (Methodology) W.W.P.F. (100%)/Outside Clients (25%++)

45 BMW’s Designworks/USA: >50% from outside work

46 eHR*/PCC** *All HR on the Web **Productivity Consulting Center Source: E-HR: A Walk through a 21 st Century HR Department, John Sullivan, IHRIM

47 (1) Translate ALL departmental activities into discrete W.W.P.F. “Products.” (2) 100% go on the Web. (3) Non-awesome are outsourced (75%??). (4) Remaining “Centers of Excellence” are retained & leveraged to the hilt!

48 Brand Inside The Heart of the Value Creation Revolution: PSF Unbound!

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

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

51 HP … Sun … GE … IBM … UPS … UTC … General Mills … Springs … Anheuser-Busch … Carpet One … Delphi … Etc. … Etc.

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

53 “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

54 “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)

55 New Springs = Turnkey Collections. Flexible sourcing. Packaging. Merchandising. Promotion. Systems & Site mgt.

56 Omnicom: 57% (of $6B) from marketing services

57 “We are a ‘real estate facilities consulting’ organization, not just an ‘interior design’ firm.” Jean Bellas, founder, SPACE (from SMPS Marketer)

58 Who was the number one employer of architecture school grads in the U.S. last year?

59 Problem: Everybody is going after the same space!

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

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

62 Better Red than Dead?/ Better Dead than Red? “We will see more and more outsourcing of discovery processes.” Craig Venter

63 Better Red than Dead?/ Better Dead than Red? “If we completely outsourced all of our genetic analysis, we’d be held hostage by outside people.” Brian Spear, Director of Pharmacogenomics, Abbott Labs

64 NC2001: Furniture company outsources all mfg. to Asian firm. Asian firm gets financing, buys NC company. Hmmm!!??

65 “The move toward outsourced manufacturing represents an obvious opportunity for contract manufacturers [such as Flextronics: $93M to $15B, ’93-’00], but it’s also a potential boon to product innovation. The future of gadget-making is not about making gadgets; it’s about imagining them. Someone else makes the imaginary real. ‘All that money that used to go to fund infrastructure is going into design and innovation,’ says Flex CEO Michael Marks.” Wired/

66 Markets to networks. Hierarchies to networks. Sellers and buyers to suppliers and users. Ownership to access. (Age of Access.) Marginalization of physical property. Weightless economy. Protean generation. Outsourcing of everything. Franchising of everything. (Business format franchising.) (Leasing DNA.) Everything is a service/platform for services delivery. (Give away the goods, charge for the services. VALUE = THE RELATIONSHIP. “Share of market” to “Share of customer.”) Every business is show business. Source: Jeremy Rifkin, The Age of Access

67 Brand Inside Brand You: Distinct … or Extinct

68 2010 “Demographics”: By 2010, full-time workers will be in the minority Source: MIT study (28August2000)

69 New World of Work < 1 in 10 F500 #1: Manpower Inc. Freelancers/I.C.: 16M-25M Temps: 3M (incl. CEOs & lawyers) Microbusinesses: 12M-27M Total: 31M-55M Source: Daniel Pink, Free Agent NationDaniel Pink

70 “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

71 “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

72 Minimum New Work SurvivalSkillsKit2001 Mastery Rolodex Obsession (vert. to horiz. “loyalty”) Entrepreneurial Instinct CEO/Leader/Businessperson/Closer Mistress of Improv Sense of Humor Intense Appetite for Technology Groveling Before the Young Embracing “Marketing” Passion for Renewal

73 Sam’s Secret #1!

74 “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

75 [“My ancestors were printers in Amsterdam from 1510 or so until 1750 and during that entire time they didn’t have to learn anything new.” Peter Drucker, Business 2.0 ( )]

76 “Knowledge becomes obsolete incredibly fast. The continuing professional education of adults is the No. 1 industry in the next 30 years … mostly on line.” Peter Drucker, Business 2.0 (22August2000)

77 E-LEARNING: 2M students in U.S. 4,000 colleges & universities offer. Target: Developing world. E.g.: U. of Melbourne & McGill, part of U21 (with Thompson Learning), expect 100K students by 2010—mostly Asians. Army’s $500M contract with PWC (eArmyU)—includes 24 colleges. Mixed models: Fuqua—9 to 11 weeks “in residence” over 2 years. Dentist gets law degree—25 to 30 hours per week. IBM trained 200K online in 2000—saved $350M. “Tricks”: Small classes, required student involvement at U. of Phoenix Online (76% growth in Y2K.). Source: Business Week ( )

78 26.3

79 3 Weeks in May “Training” & Prep: 187 “Work”: 41 (“Other”: 17)

80 1% vs. 367%

81 Divas do it. Violinists do it. Sprinters do it. Golfers do it. Pilots do it. Soldiers do it. Surgeons do it. Cops do it. Astronauts do it. Why don’t businesspeople do it [very much]?

82 Conclusion: “We” are not serious!

83 Invent. Reinvent. Repeat. Source: HP banner ad

84 “The time seems appropriate to rethink the notions of self and identity in this rapidly changing age …” Tara Lemmey, Project LENS, past president Electronic Frontier Foundation

85 In Store: International Equality, Intranational Inequality “The new organization of society implied by the triumph of individual autonomy and the true equalization of opportunity based upon merit will lead to very great rewards for merit and great individual autonomy. This will leave individuals far more responsible for themselves than they have been accustomed to being during the industrial period. It will also reduce the unearned advantage in living standards that has been enjoyed by residents of advanced industrial societies throughout the 20 th century.” James Davidson & William Rees-Mogg,The Sovereign Individual

86 Great Great Granddad: Pushes the plow. Great Granddad: Horse now walks ahead of the plow. Granddad: Farm Hand to Factory Factotum. Dad: Factory Factotum to White Collar Cubicle Slave. And You: V.A. Player (“Brand You”) … or else!

87 America[ns] The … Beautiful Re-inventors Ben F. Ralph W.E. Dale C. N.V.P. Werner E./EST “Tony R.”/“Coals Dude” Stephen

88 Brand You, Big Time! I AM AN ARMY OF ONE

89 “When was the last time you asked, ‘What do I want to be?’ ” Sara Ann Friedman, Work Matters

90 Message: Distinct … or Extinct.

91 Brand Inside Redefining the Work Itself: The WOW Project

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

93 Language matters! Wow! BHAG! “Takes your breath away!”

94 “Astonish me!” / S.D. “Build something great!” / H.Y. “Immortal!” / D.O.

95 “Intimidate their [users] imaginations” … “Where’s the revolution?” –J Allard, on the Xbox

96 “Let’s make a dent in the universe.” Steve Jobs

97 “Learn not to be careful.” Photographer Diane Arbus to her students (Careful = The sidelines, per Harriet Rubin in The Princessa)

98 Your Current Project? 1. Another day’s work/Pays the rent. 4. Of value. 7. Pretty Damn Cool/Definitely subversive. 10. WE AIM TO CHANGE THE WORLD. (Insane!/Insanely Great!/WOW!)

99 Brand Inside WOW Projects for the “Powerless”: Getting Started … a Personal Perspective

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

101 World’s Biggest Waste … Selling “Up”

102 THE IDEA: Model F4 F ind a F ellow F reak F araway

103 Heart of the Matter F2F!/K2K!/ *Freak to Freak/Kook to Kook/ One at a Time/ Ready.Fire!Aim.

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

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

106 Is It … “The Oh-Hell-I-Wish-It-Were- Over Memorial Day picnic” or “The First Annual S eriously K ewl C elebration of Our Incredible Staff”

107 Is It … Wrestle the damn Safety Manual into line with the ridiculous new OSHA Regs? Or … A stealth opportunity to address the War for Talent via … a thoroughgoing review of how safety and environmental issues contribute to making this a Great Place to Work?

108 Reframers’ Rules: Rule 1: Never accept an assignment as given! (Please.) Rule 2: You’re never so powerful as when you are “powerless”! Rule 3: Every “small” project contains the entire enterprise DNA!

109 THE TOOL Prototyping Mania!

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

111 He who has the quickest O.O.D.A. Loops* wins! *Observe. Orient. Decide. Act. / Col. John Boyd

112 THE Process Building Buzz!

113 Boss-free “Selling” of a WOW! Idea Get a Zany [WOW!] Idea/ Shop it with a coupla good pals. Surface [using your network] a list of [operational] folks who might be interested in playing. Call, visit and choose a coupla prospects. Engage the prospects [they must “own” “it”]. Concoct a rough plan and a prototype schedule. Move forward [Ready. Fire! Aim.]. Keep on recruitin’. Get the Test Customer to recruit some buddies for Round #2 tests [Meanwhile Customer #1 expands program]

114 Get going with Round #2 prototypes Start conscious “buzz building” [Let “the word” of successful tests trickle out] Have the “line dudes” put on a demo for, say, a coupla “cool” regional bosses Etc. Etc. Have the growing Network of Converts initiate a Major Program Proposal Etc. Etc.

115 BOTTOM LINE The Enemy!

116 Joe J. Jones 1942 – 2001 HE WOULDA DONE SOME REALLY COOL STUFF BUT … HIS BOSS WOULDN’T LET HIM!

117 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

118 Characteristics of the “Also rans”* “Minimize risk” “Respect the chain of command” “Support the boss” “Make budget” *Fortune, article on “Most Admired Global Corporations”

119 “It is a glory to have broken such infamous orders.” John Adams, to Congress, on ignoring his charter and negotiating successfully with the Brits for Independence, against the will of the French

120 Message to “scientists”: It AIN’T about the science. It’s NEVER about the science. It’s ALWAYS about the PASSION for the IDEA.

121 Fact: 1000s of PLAUSIBLE drug candidates. Winners based [mostly] on desire & tenacity of Project Manager/Team

122 “In a long and honorable career, a Ph.D. scientist in a pharmaceutical house is not likely – statistically – to experience a success.” Pharmaceutical Exec

123 TP: Rubbish!

124 “Statistically speaking,” Churchill shouldn’t have been able to fend off Hitler. “Statistically speaking,” DeGaulle shouldn’t have been able to revive the French. “Statistically speaking,” Jefferson & Adams & Hamilton shouldn’t have been able to create America.* * “Statistically speaking,” Pfizer or no Pfizer, ain’t none of us gettin’ out of this alive.

125 I wonder …

126 Will one of you be awoken some December morning in Stockholm by candle-carrying kids?

127 Charles Handy on the “alchemists”: “Passion was what drove these people, passion for their product or their cause. If you care enough, you will find out what you need to know. Or you will experiment and not worry if the experiment goes wrong. Passion as the secret to learning is an odd secret to propose, but I believe that it works at all levels and at all ages. Sadly, passion is not a word often heard in the elephant organizations, nor in schools, where it can seem disruptive.”

128 Rule #1(And there are no other rules): Assigning people to projects they feel passionate about. “ ‘If you think something is really important, follow your heart—it energizes you and you give your best performance.’ That’s how you get scientists on a roll— what for athletes is called ‘being in the zone.’ ” –Lina Echeverria, fiber optics research director, Corning

129 Walsh: Height—shrimp. Arm— okay. Quickness—okay. Speed— slow. Zeal—PLANET CLASS. “People can’t measure your heart. They look at my size, my arm strength and knock me for that”—Jeff Garcia. Source: USA Today,

130 AF General John Jumper— the PREDATOR!

131 IF YOU ARE NOT PREPARED TO BE FIRED OVER YOUR BELIEFS … YOU ARE WORKING ON THE WRONG PROJECT -- TP

132 “If anyone can do it, John [Rebus], you can. I’ve always had confidence in your sheer pig-headedness and inability to listen to your senior officers.” from Ian Rankin, The Falls

133 Sales2001

134 The Sales25 : Great Salespeople … 1. Know the product. (Find cool mentors, and use them.) 2. Know the company. 3. Know the customer. (Including the customer’s consultants.) (And especially the “corporate culture.”) 4. Love internal politics at home and abroad. 5. Religiously respect competitors. (No badmouthing, no matter how provoked.) 6. Wire the customer’s org. (Relationships at all levels & functions.) 7. Wire the home team’s org. and vendors’ orgs. (INVEST Big Time time in relationships at all levels & functions.) (Take junior people in all functions to client meetings.)

135 Great Salespeople … 8. Never overpromise. (Even if it costs you your job.) 9. Sell only by solving problems-creating profitable opportunities. (“Our product solves these problems, creates these unimagined INCREDIBLE opportunities, and will make you a ton of money—here’s exactly how.”) (IS THIS A “PRODUCT SALE” OR A WOW-ORIGINAL SOLUTION YOU’LL BE DINING OFF 5 YEARS FROM NOW? THAT WILL BE WRITTEN UP IN THE TRADE PRESS?) 10. Will involve anybody—including mortal enemies—if it enhances the scope of the problem we can solve and increases the scope of the opportunity we can encompass. 11. Know the Brand Story cold; live the Brand Story. (If not, leave.)

136 Great Salespeople … 12. Think “Turnkey.” (It’s always your problem!) 13. Act as “orchestra conductor”: You are responsible for making the whole-damn-network respond. (PERIOD.) 14. Help the customer get to know the vendor’s organization & build up their Rolodex. 15. Walk away from bad business. (Even if it gets you fired.) 16. Understand the idea of a “good loss.” (A bold effort that’s sometimes better than a lousy win.) 17. Think those who regularly say “It’s all a price issue” suffer from rampant immaturity & shrunken imagination. 18. Will not give away the store to get a foot in the door. 19. Are wary & respectful of upstarts—the real enemy. 20. Seek several “cool customers”—who’ll drag you into Tomorrowland.

137 Great Salespeople … 21. Use the word “partnership” obsessively, even though it is way overused. (“Partnership” includes folks at all levels throughout the supply chain.) 22. Send thank you notes by the truckload. (NOT E- NOTES.) (Most are for “little things.”) (50% of those notes are sent to those in our company!) Remember birthdays. Use the word “we.” 23. When you look across the table at the customer, think religiously to yourself: “HOW CAN I MAKE THIS DUDE RICH & FAMOUS & GET HIM-HER PROMOTED?” 24. Great salespeople can affirmatively respond to the query in an HP banner ad: HAVE YOU CHANGED CIVILIZATION TODAY? 25. Keep your bloody PowerPoint slides simple!

138 Brand Inside Starting a Wow Projects Epidemic: Demo mania! New Hall of Fame!

139 Premise: “Ordering” Systemic Change is a Stupid Waste of Time!

140 Demos! Stories! Heroes!

141 L.B.I.W.D. (Leading By Inducing Weird Demos)

142 Demo = Story “A key – perhaps the key – to leadership is the effective communication of a story.” Howard Gardner, Leading Minds: An Anatomy of Leadership

143 MB S A!* *Managing By Story-ing Around/David Armstrong

144 Leaders aiming to change their world … troll for & identify palpable heroes, who executed palpable projects —then they point to these people and say to the masses, “See, here it is, done by one of your own.” (And then they “deep-dip” a few of those heroes to demo their seriousness.)

145 Boss Advice I: The “Poster Kids” Strategy Chat up the organization. Develop a tentative list of Pioneers. Hang with those Pioneers, discover the “stuff I’ve long wanted to do”/Encourage them to “Do it!” Begin to showcase their developing results [with your public stamp of approval]. Dip deep[ish] and early - promote a Pioneer into the [New] Establishment. Incorporate the Pioneers’ work into your Vision Chatter/Welcome ALL aboard!

146 Boss Advice II: The “Flypaper” Strategy “Event Marketing”: Idea Fair/Internal “Tradeshow”/Bragfest. Or: Seminar Series, with “strange” outsiders/insiders (not the usual suspects); intense Web-based follow-up and community creation (Neighborhoods of Common Interest). “Play Fund,” around a topic of importance. Small-ish grants. Easy application process. Short-ish timeframes. American Express re AI.) “Scholarships” (not the usual suspects). Sabbatical funds (contest?). Placement on customer or supplier project teams (not the usual suspects).

147 Each VP a V.C.: Portfolio of high-risk investments … from all across the company.

148 Silicon Valley Success [Failure?] Secrets “Pursuit of risk”: 4 of 20 in V.C. portfolio go bust; 6 lose money; 6 do okay; 3 do well; 1 hits the jackpot Source: The Economist

149 Freaks need mentors/ guardians!

150 T.A.: 3

151 Summary Don’t try to “change the culture”! Do create flypaper which attracts Mavericks & Pirates! Let the new culture (which is already lurking around you) find you! Publicize, at the appropriate moment, the New Hall of Fame; help the New Culture Adherents create & nurture Community!

152 Brand Inside Brand Talent: The Great War for Talent

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

154 Yikes: “What worries me is that I can’t see why any ambitious young person would want to join my company, or stay here for long if they did join. My most important job is to change that as fast as I can.”— CEO, giant multinational, to Charles Handy

155 The Talent Ten

156 1. Obsession P.O.T.* = All Consuming *Pursuit of Talent

157 “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

158 Model 24/7: Sports Franchise GM

159 2. Greatness Only The Best!

160 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 ( )

161 3. Performance Up or out!

162 “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 ( )

163 Message: Some people are better than other people. Some people are a helluva lot better than other people.

164 4. Pay Fork Over!

165 “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 ( )

166 What gets measured gets done. What gets paid for gets done more. What gets paid a lot for gets done a lot more.

167 5. Youth Grovel Before the Young!

168 “Why focus on these late teens and twenty- somethings? Because they are the first young who are both in a position to change the world, and are actually doing so. … For the first time in history, children are more comfortable, knowledgeable and literate than their parents about an innovation central to society. … The Internet has triggered the first industrial revolution in history to be led by the young.” The Economist [12/2000]

169 6. Diversity Mess Rules!

170 “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

171 7. Women Born to Lead!

172 “AS LEADERS, WOMEN RULE: New Studies find that female managers outshine their male counterparts in almost every measure” Title, Special Report, Business Week,

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

174 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 SecretJudy B. Rosener

175 “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

176 “Investors are looking more and more for a relationship with their financial advisers. They want someone they can trust, someone who listens. In my experience, in general, women may be better at these relationship-building skills than are men.” Hardwick Simmons, CEO, Prudential Securities

177 It’s Girls, Stupid! 1996: 8.4M women, 6.7M men in college (est: 9.2 to 6.9 in 2007); more women than men in high-level math and science courses More girls in student govt., honor societies; girls read more books, outperform boys in artistic and musical ability, study abroad in higher numbers Boys do rule: crime, alcohol, drugs, failure to do homework (4:1) Source: The Atlantic Monthly (May2000)

178 Okay, you think I’ve gone tooooo far. How about this: DO ANY OF YOU SUFFER FROM TOO MUCH TALENT?

179 63 of 2,500 top earners in F500 8% Big 5 partners 14% partners at top 250 law firms 43% new med students; 26% med faculty; 7% deans Source: Susan Estrich, Sex and Power

180 Encouraging signs: CEO, HP. CEO, eBay. CEO, Avon. CEO, Mirant. CEO, Xerox. President, Pharmaceutical Group, Pfizer. President, Chevron Products. Co- CEO, Kraft. President, PepsiCo. CEO, Ogilvy & Mather. COO, Enron Americas. COO, Colgate-Palmolive. President, Southwest Airlines.

181 8. Weird The Cracked Ones Let in the Light!

182 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

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

184 Would Craig Venter (Luciano Bennetton) come to work for us?

185 “I would like to think we could attract students with green hair. We will take pink and blue and orange hair, too.” Shirley Tilghman, Princeton

186 “Microsoft looks for people with ‘bandwidth’— that is, people who have interests in diverse fields, with a high degree of conceptual skills and a high tolerance for ambiguity, complexity and paradox. Super-logical ‘bit-heads’ (developers) work in perfect fusion with artistically sensitive designers. [Per one exec], ‘Designers are invariably female, are talkative, live in lofts, have vegetarian diets and wear round objects on their ears. Developers are invariably male, eat fast-food, and don’t talk— except to say ‘Not true’.” –LMD ( )

187 9. Opportunity Make It an Adventure!

188 “H.R.” to “H.E.D.” ??? H uman E nablement D epartment

189 Titles! Manager HRIS to Manager Human Capital Assets or Manager Employee Marketing* *IHRIM.link ( )

190 10. Leading Genius We are all unique!

191 Beware Lurking HR Types … One size NEVER fits all. One size fits one. Period.

192 48 Players = 48 Projects = 48 different success measures

193 MantraM3 Talent = Brand

194 What’s your company’s … EVP? Employee Value Proposition, per Ed Michaels et al., The War for Talent

195 EVP = Challenge, professional growth, respect, satisfaction, opportunity, reward Source: Ed Michaels et al., The War for TalentEd Michaels

196 First Steps Make a list of the traits you really want to unearth. (TP & “sense of humor;” GR & jaywalking.) Promote for TDS /Talent Development Skills. Work up an EVP.

197 Brand Inside Brand Talent+: The Education Fiasco

198 FES/NOV2001: New Work. New World. New Education. The Three Must Meet.

199 TP Mood Anger. Despair. Hopelessness.

200 Losing the War to Bismarck

201 “My wife and I went to a [kindergarten] parent-teacher conference and were informed that our budding refrigerator artist, Christopher, would be receiving a grade of Unsatisfactory in art. We were shocked. How could any child—let alone our child—receive a poor grade in art at such a young age? His teacher informed us that he had refused to color within the lines, which was a state requirement for demonstrating ‘grade-level motor skills.’ ” Jordan Ayan, AHA! Jordan Ayan

202 “How many artists are there in the room? Would you please raise your hands. FIRST GRADE: En masse the children leapt from their seats, arms waving. Every child was an artist. SECOND GRADE: About half the kids raised their hands, shoulder high, no higher. The hands were still. THIRD GRADE: At best, 10 kids out of 30 would raise a hand, tentatively, self-consciously. By the time I reached SIXTH GRADE, no more than one or two kids raised their hands, and then ever so slightly, betraying a fear of being identified by the group as a ‘closet artist.’ The point is: Every school I visited was participating in the suppression of creative genius.” Gordon MacKenzie, Orbiting the Giant Hairball: A Corporate Fool’s Guide to Surviving with Grace

203 J. D. Rockefeller’s General Education Board (1906): “ In our dreams people yield themselves with perfect docility to our molding hands. … The task is simple. We will organize children and teach them in a perfect way the things their fathers and mothers are doing in an imperfect way.” John Taylor Gatto, A Different Kind of Teacher

204 An Unnatural Way to “Learn”

205 Schools’ “Kafka-like rituals”: “enforce sensory deprivation on classes of children held in featureless rooms … sort children into rigid categories by the use of fantastic measures such as age-grading, or standardized test scores … train children to drop whatever they are occupied with and to move as a body from room to room at the sound of a bell, buzzer, horn, or klaxon … keep children under constant surveillance, depriving them of private time and space … John Taylor Gatto, A Different Kind of Teacher

206 Kafka-like rituals (cont.): “assign children numbers constantly, feigning the ability to discriminate qualities quantitatively … insist that every moment of time be filled with low- level abstractions … forbid children their own discoveries, pretending to possess some vital secret to which children must surrender their active learning time to acquire.” John Taylor Gatto, A Different Kind of Teacher

207 Doing Stuff that Matters!

208 “During the first years of life, youngsters all over the world master a breathtaking array of competences with little formal tutelage.” Howard Gardner, The Unschooled Mind

209 The Learner’s Manifesto The brain is always learning. Learning does not require coercion. Learning must be meaningful. Learning is incidental. Learning is collaborative. The consequences of worthwhile learning are obvious. Learning always involves feelings. Learning must be free of risk. Frank Smith, Insult to Intelligence

210 Tom’s Edu3M Manifesto* *Manifesto for Education in the 3 rd Millennium

211 Education3M Learning is a normal state. Children are learnavores. Prodigious feats of learning are common as dirt. [Watch a H.S. QB studying game film.] We learn at different rates. We learn in different ways. Boys and girls learn [very] differently. In a class of 25, there are 25 different trajectories. Learning in 40-minutes blocks is bullshit. Learning for tests is utterly insane. There are numerous rigorous evaluation schemes, of which testing is but one—and abnormal, by “real world” standards.

212 Education3M We learn most/fastest/most completely when we are passionate about what we are learning and it matters to us. [Salience rules!] Think EBI/LBI: Education by Interest/ Learning by Internship. Classrooms are abnormal places. We need changes of pace. [Japanese recesses after each class.] International test scores are not correlated with hours-per-year in class. Big classes are slightly problematic. Big schools suck. Period.

213 Education3M “All this”—the right stuff—fits the NWW/New World of Work hand-in-glove. [NWW = Age of Creativity.] U.S. schools circa 2001 are a vestige of the Prussian-Fordist model, more interested in shaping behavior than stoking the fires of lifelong learning. Cutting art-music budgets is truly dumb. Learning is a matter of Intensity of Engagement, not elapsed time. [Aargh: 11 minutes on the Battle of Gettysburg.] Teachers need enough space-time-flexibility to get to know kids as individuals. Scientific discovery processes and the teaching of science are utterly at odds. [Exploration vs. spoon-feeding.]

214 Education3M Our toughest “learning achievement”— mastering our native language—does not require schools, or even competent parents. [It does require a desperate need-to-know.] Great teachers are great learners, not imparters- of-knowledge. Great teachers ask great questions—that launch kids on lifelong quests. The world is not about “right” & “wrong” answers; it is about the pursuit of increasingly sophisticated questions—just ask a ski instructor or neurosurgeon.

215 Education3M Most schools spend most of their time setting up contexts in which kids learn not to like particular subjects. [Evidence shows that such anti- learning sticks!] Vigorous exploration is normal … until you are incarcerated in a school. “Bite size” education-learning is neither education nor learning. Learning takes place rapidly on the cheerleading squad, the football team, the school newspaper, the drama club, at the after-class job--just not in the hyper-structured classroom.

216 Education3M The “school reform” “movement” is a giant step … backwards … embracing the Prussian-Fordist paradigm with renewed vigor—at exactly the wrong time. There are large numbers of superb schools, superb principals, superb teachers; sadly, they not only fail to infect the [largely timid] rest, but are ordinarily supplanted by wusses & wimps. Alas, the teaching profession does not ordinarily attract “cool dudes & dudettes.” Schools of “education” should by and large have their charters revoked.

217 Education3M Stability is dead; “education” must therefore “educate” for an unknowable, ambiguous, changing future; thence, learning to learn & change is far more important than mastery of a static body of “facts.” “Education” must “develop in youth the capabilities for engaging in intense concentrated involvement in an activity.” [James Coleman, 1974.] [Hint: It doesn’t.] [Hint: Understatement.]

218 Brand Inside Reprise: THINK WEIRD: The High Standard Deviation Enterprise

219 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

220 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

221 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

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

223 Suppliers: There is an ominous downside to strategic supplier relationships. An SSR supplier is not likely to function as any more than a mirror to your organization. Fringe suppliers that offer innovative business practices need not apply.” Wayne Burkan, Wide Angle Vision: Beat the Competition by Focusing on Fringe Competitors, Lost Customers, and Rogue Employees

224 Elliott Masie, on desirable eLearning vendors: “I want a ‘sandbox partner,’ someone who will openly say, ‘This is not the last word; we don’t know exactly where we’re going.’ ”

225 The Top Creators of Shareholder Value Accept depressed earnings for several quarters to support hot product Expense rather than capitalize new venture costs Bonuses without caps Source: Fortune ( )

226 Message: TAKE SOMEONE NEW & WEIRD TO LUNCH TODAY OR TOMORROW. [Inundate yourself with weird.]

227 WEIRD IDEAS THAT WORK: (1) Hire slow learners (of the organizational code). (1.5) Hire people who make you uncomfortable, even those you dislike. (2) Hire people you (probably) don’t need. (3) Use job interviews to get ideas, not to screen candidates. (4) Encourage people to ignore and defy superiors and peers. (5) Find some happy people and get them to fight. (6) Reward success and failure, punish inaction. (7) Decide to do something that will probably fail, then convince yourself and everyone else that success is certain. (8) Think of some ridiculous, impractical things to do, then do them. (9) Avoid, distract, and bore customers, critics, and anyone who just wants to talk about money. (10) Don’t try to learn anything from people who seem to have solved the problems you face. (11) Forget the past, particularly your company’s success. Bob Sutton, Weird Ideas that Work: 11½ Ideas fro Promoting, Managing and Sustaining Innovation

228 The GM/VC “model” of leadership.

229 Renewal = The Weird 10 = The “High S.D.” Enterprise/Individual Pioneer [Weird] Acquisitions Pioneer [Weird] Customers & Alliance Partners [Measure the Customer-Partner Portfolios’ S.D./Weirdness Index] Divide & Conquer/“Sell-by” [Lessons from the Bees, Sir Richard, Gary H.] Pioneer Assignments/Pioneer Projects/Pioneer Partners [F2F: Freak-to-Freak/ 4F: Find a Fellow Freak Faraway] Hire Weird [Diversity] /Train Weird/Promote Weird/Pay Gobs & Promote Fast & Cherish “Six Sigma” Talent/Appoint a Weird Board Weed Un-weird [“One Sigma” “Talent,” etc.] Hang out with Weird [Univ. of Weird] /Lunch with Weird/ Read & Surf Weird/Vacate Weird R.A.F. to R.F.A. to F.F.F. [O.O.D.A. Loops/Prototyping Mania] Sense of Humor [Rhapsodize Over Thine Cool Failures!] Re-enforce a “Culture of Disrespect”/PassionatePiracy

230 Logic: Cut from 1,000 brands to 500 brands, for efficiency’s sake. Need 10% p.a. growth in reduced # of brands to get “guaranteed” corporate growth of 5%. (AND YOU DON’T GET “AVERAGE” GROWTH IN EVERY BRAND—DUH.) Hence, 10% across-the-board growth will mostly come from 40% growth in small # of brands (Pareto: 80/20 rule; blah, blah, blah). Axiom: 40% growth will only come from high- risk bets—and accompanying failures--across the portfolio. Hence, the “VC [GM] model.”

231 Tomorrow’s Organizations: Itinerant Potential Machines

232 TALENT POOL TO DIE FOR. Youthful. Insanely energetic. Value creativity. Risk taking is routine. Failing is normal … if you’re stretching. Want to “make their bones” in “the revolution.”Love the new technologies. Well rewarded. Don’t plan to be around 10 years from now.

233 TALENT POOL PLUS. Seek out and work with “world’s best” as needed (it’s often needed). “We aim to change the world, and we need gifted colleagues—who well may not be on our payroll.”

234 BRASSY-BUT-GROUNDED-LEADERSHIP. Say “I don’t know”—and then unleash the TALENT. Have a vision to be DRAMATICALLY DIFFERENT—but don’t expect the co. to be around forever. Will scrap pet projects, and change course 180 degrees—and take a big write-off in the process. NO REGRETS FROM SCREW-UPS WHOSE TIME HAS NOT-YET- COME. GREAT REGRETS AT TIME & $$$ WASTED ON “ME TOO” PRODUCTS AND PROJECTS.

235 BRASSY-BUT-GROUNDED-LEADERSHIP. (Cont.) “Visionary” leaders matched by leaders with shrewd business sense: “HOW DO WE TURN A PROFIT ON THIS GORGEOUS IDEA?” Appreciate “market creation” as much as or more than “market share growth.” ARE INSANELY AWARE THAT MARKET LEADERS ARE ALWAYS IN PRECARIOUS POSITIONS, AND THAT MARKET SHARE WILL NOT PROTECT US, IN TODAY’S VOLATILE WORLD, FROM THE NEXT KILLER IDEA AND KILLER ENTREPRENEUR. (Gates. Ellison. Venter. McNealy. Walton. Skilling. Case. Etc.)

236 ALLIANCE MANIACS. Don’t assume that “the best resides within.” WORK WITH A SHIFTING ARRAY OF STATE-OF-THE-ART PARTNERS FROM ONE END OF THE “SUPPLY CHAIN” TO THE OTHER. Including vendors and consultants and … especially … PIONEERING CUSTOMERS … who will “pull us into the future.”

237 TECHNOLOGY-NETWORK FANATICS. Run the whole-damn-company, and relations with all outsiders, on the Internet … at Internet speed. Reluctant to work with those who don’t share this (radical) vision.

238 POTENTIAL MACHINES-ORGANISMS. Don’t know what’s coming next. But are ready to jump at opportunities, especially those that challenge-overturn our own “way of doing things.”

239 Brand Inside NewGov2001

240 WE NEED … IDEAS!

241 “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

242 BMcC: (1) Hierarchy vs. “Network organization.” (2) NWO = “Doctrine as center of gravity”/source of motivation; distributed support & decision- making;largely self-organizing; “outside the military sphere.”

243 “Our military structure today is essentially one developed and designed by Napoleon.” Admiral Bill Owens, former Vice Chairman, Joint Chiefs of Staff

244 From: Weapon v. Weapon To: Org structure v. Org structure

245 Ideas > Leadership

246 NO: “Good gov’t” YES: EFFECTIVE Gov’t (in altered/ambiguous times)

247 A Plea for “virtual [RESPONSIVE] government”

248 Agile.

249 WALLS MUST FALL!

250 The W.O.G. (Work-of- Government): Insta/ Targeted WPTs (WOW (B.H.A.G.) Project Teams (with clout) )

251 Experiments rule!

252 Failures rule!

253 Talent matters!

254 New Heroes/ Hall of Fame

255 IS/IT to the Max!

256 S treamlined procurement (esp. IS/IT)

257 Case: Bill Owens … Lifting the Fog of War

258 “The 1990s was a decade of multiple revolutions—political, economic, technological— that changed so thoroughly the way we live that the past no longer seems a good guide to the future (in fact the past seems precisely the wrong guide). So it is in the world of military affairs. The RMA is our opportunity to use the new information technology to change the very nature of the military—in a way that could reinvigorate American political, diplomatic and economic leadership in the world for decades to come.” –Bill Owens, Lifting the Fog of War

259 “Our military is very good at doing things as they are supposed to be done, but it is not always good at changing the way things ought to be done. Highly professional militaries can be very good at maintaining the institution’s traditions, mores and cultures in the face of rapid and important change. … Equating professionalism with automatically defending the status quo can be disastrous. This is the mindset that drives service loyalties toward narrow parochialism, and congeals organizations into brittle shells. We end up ignoring opportunities that could actually offer higher military effectiveness.” –Bill Owens, Lifting the Fog of War

260 “How dare you. If you don’t support us, our opponents will take advantage and use this to cut the force.” –CNO staffer [Flag officer] to Bill Owens, 6 th Fleet Commander

261 “Mike [Boorda’s] self-avowed priority was to preserve and protect the size, budget and structure of the U.S. Navy—his Navy— irrespective of any other consideration— because he deeply believed that the Navy was the core of America’s military capability. My view over the years had shifted toward the conviction that we in the Navy need to implement major changes in order to become more joint—to work better and more closely with the other services.” –Bill Owens, Lifting the Fog of War

262 “Many flaws remained—flaws not from poor performance, but from an ingrained command hierarchy and an outmoded concept of war that had taken root during World War II and then during the cold war. Desert Storm was a joint military operation in name rather than in fact. … The battlefield was divided among service components. … The fiefdoms existed not only because of tradition, service rivalry and the egos of the commanders; they were also there because of technological limitations. We did not have the communications capability to do it differently.” –Bill Owens, Lifting the Fog of War

263 “Once devised in Riyadh, the tasking order took hours to get to the Navy’s six aircraft carriers—because the Navy had failed years earlier to procure the proper communications gear that would have connected the Navy with its Air Force counterparts. … To compensate for the lack of communications capability, the Navy was forced to fly a daily cargo mission from the Persian Gulf and Red Sea to Riyadh in order to pick up a computer printout of the air mission tasking order, then fly back to the carriers, run photocopy machines at full tilt, and distribute the documents to the air wing squadrons that were planning the next strike.” –Bill Owens, Lifting the Fog of War

264 “By combining powerful computer technology and other modern information-based systems we could make a revitalized, leaner military force that is designed to outsee, outmaneuver and outfight any foe.” --Bill Owens, Lifting the Fog of War

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

266 Work II The Sameness Trap

267 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

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

269 “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

270 “Companies have defined so much ‘best practice’ that they are now more or less identical.” Jesper Kunde, A Unique Moment

271 10X/10X

272 Brand Outside Strategy 1A : Use E-Commerce to Re-invent Everything!

273 Dell’s OptiPlex Facility Big Job: 6 to 8 hours. (80,000 per day) Parts Inventory: 100 square feet.

274 Cisco! 90% of $20B (=$50M/day) Annual savings in service and support from customer self-management: $550M (P.S.: C.Sat e >> C.Sat h)

275 Secret Cisco: Community! Customer Engineer Chat Rooms/Collaborative Design ($1B “free” consulting) (45,000 customer problems a week solved via customer collaboration)

276 X1,000,000 TowTruckNet.com

277 Webcor. Construction. Web site for each project. Instant info on status to employees, subs, architects. Mgt costs cut by 2/3rds. Huge time shrinkage. Source: Business Week (09.00)

278 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

279 Psych 101: Strongest Force on Earth? My need to be in perceived control of my universe!

280 WebWorld = Everything Web as a way to run your business’s 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

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

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

283 “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

284 Jargon Bath! Bureaucracy free … Systemically integrated … Internet intense … Knowledge based … Time and location free … “Instantly” responsive … Customer centric … Mass customization enabled.

285 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

286 “Supply Chain” 2000: “When Joe Employee at Company X launches his browser, he’s taken to Company X’s personalized home page. He can interact with the entire scope of Company X’s world – customers, other employees, distributors, suppliers, manufacturers, consultants. The browser – that is, the portal – resembles a My Yahoo for Company X and hooks into every network associated with Company X. The real trick is that Joe Employee, business partners and customers don’t have to be in the office. They can log on from a cell phone, Palm Pilot, pager or home office system.” Red Herring ( )

287 Magic! [Inter]networked Markets meet … [Intra]networked Workers Source: The Cluetrain Manifesto: The End of Business as UsualThe Cluetrain Manifesto

288 The Real “New Economy” “Imagine a chess game in which, after every half dozen moves, the arrangement of the pieces on the board stays the same but the capabilities of the pieces randomly change. Knights now move like bishops, bishops like rooks … Technology does that. It rubs out boundaries that separate industries. Suddenly new competitors with new capabilities will come at you from new directions. Lowly truckers in brown vans become geeky logistics experts. …” Business 2.0 ( )

289 The Real “New Economy” “Only a few times in history have interaction costs radically changed —one was the railroads, then the telegraph and telephone. We’re going through another one right now.” Jeff Skilling, Enron

290 Read It Closely: “We don’t sell insurance anymore. We sell speed.” Peter Lewis, Progressive

291 Case: CRM

292 UBIQUITY! “It’s the cars, not the tires, that squeal”: NYT/Circuits/ ): E-ZPass (6M in NE), tests with McD’s, gas stations and parking lots next. OnStar (GM/1.5M). Plus: “black boxes,” GPS (the case of the $450 ticket), CA smog offenders.

293 “CRM has, almost universally, failed to live up to expectations.” -- Butler Group (UK)

294 No! No! No! FT: “The aim [of CRM] is to make customers feel as they did in the pre- electronic age when service was more personal.” Rebuttal: (1) Service sucked in the “pre-electronic” age. (2) NewGen believes in the screen! (So do I.)

295 One Person’s Opinion TP to reporter: “Service is MUCH better! Would you go back to bank tellers and phone operators? Value that I place on a “smile”: 3 on a scale of 10. Value I place on fast & accurate “digital” response: 11 on a scale of 10!!

296 M. Rogers: -5% defections = +25% to +85% profit. Lose 15% to 35% p.a. 69% defect as a result of lousy sales or service experience. (Q:But is this the point???? A: Yes. No.)

297 CGE&Y (Paul Cole): “Pleasant Transaction” vs. “Systemic Opportunity.” “Better job of what we do today” vs. “Re- think overall enterprise strategy.”

298 Message CRM: Madness = 600 CRM vendors. ???: “Do it all” or “do something.” Past: over-invest in low- value customers. Idea: better experience, not off-load work to customer. Relationship = f(dialogue & knowledge & duration). Key: new attitudes, DESTRUCTION of functional barriers to info & action.

299 “There’s 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

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

301 Brand Outside Strategy 1B : Embracing an e-Led Age of Self-Determination

302 “Parents, doctors, stockbrokers, even military leaders are starting to lose the authority they once had. There are all these roles premised on access to privileged information. … What we are witnessing is a collapse of that advantage, prestige and authority.” Michael Lewis, next

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

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

305 Impact #1: Healthcare

306 HealthCare2001 Consumerism X Demographics X IS/Internet X Info Consolidators X Genetics & Devices = YIKES!

307 1. Consumerism (Patient- centric Healthcare)

308 “A seismic shift is underway in healthcare. The Internet is delivering vast knowledge and new choices to consumers—raising their expectations and, in many cases, handing them the controls. [Healthcare] consumers are driving radical, fundamental change.” Deloitte Research, “Winning the Loyalty of the eHealth Consumer”

309 Consumer Imperatives Choice Control (Self-care, Self-management) Shared Medical Decision-making Customer Service Information Branding Source: Institute for the Future

310 “Consumerism”: HMO backlash (e.g., plans with more choice). Alternative Medicine, Wellness & Prevention. Info availability (disease, health, docs, support groups, outcomes). Self-care (chronic disease). High expectations (genetics, etc.) Boomers (see below). …

311 “Savior for the Sick” vs. “Partner for Good Health” Source: NPR/VPR

312 2. Demographics : The BOOMERS Reach 55!

313 Boomer World “From jogging to plastic surgery, from vegetarian diets to Viagra, they are fighting to preserve their youth and defy the effects of gravity.” M.W.C. Howgill, “Healthcare Consumerism, the Information Revolution and Branding”

314 Message Boomer: (1) “There are l-o-t-s of us.” (2) “We have the $$$$$$. (3) “We’re/ I’m in charge!” (4) “We’ll take no guff from anyone.” (5) “We know the emperor has no clothes.”

315 3. The IS/Web REVOLUTION

316 “We’re in the Internet age, and the average patient can’t their doctor.” Donald Berwick, Harvard Med School

317 “In an era when terrorists use satellite phones and encrypted , US gatekeepers stand armed against them with pencils and paperwork, and archaic computer systems that don’t talk to each other.” Boston Globe ( )

318 “Once devised in Riyadh, the tasking order took hours to get to the Navy’s six aircraft carriers—because the Navy had failed years earlier to procure the proper communications gear that would have connected the Navy with its Air Force counterparts. … To compensate for the lack of communications capability, the Navy was forced to fly a daily cargo mission from the Persian Gulf and Red Sea to Riyadh in order to pick up a computer printout of the air mission tasking order, then fly back to the carriers, run photocopy machines at full tilt, and distribute the documents to the air wing squadrons that were planning the next strike.” –Bill Owens, Lifting the Fog of War

319 “By combining powerful computer technology and other modern information-based systems we could make a revitalized, leaner military force that is designed to outsee, outmaneuver and outfight any foe.” --Bill Owens, Lifting the Fog of War

320 “Without being disrespectful, I consider the U.S. healthcare delivery system the largest cottage industry in the world. There are virtually no performance measurements and no standards. Trying to measure performance … is the next revolution in healthcare.” Richard Huber, former CEO, Aetna

321 “As unsettling as the prevalence of inappropriate care is the enormous amount of what can only be called ignorant care. A surprising 85% of everyday medical treatments have never been scientifically validated. … For instance, when family practitioners in Washington were queried about treating a simple urinary tract infection, 82 physicians came up with an extraordinary 137 strategies.” Demanding Medical Excellence: Doctors and Accountability in the Information Age, Michael Millenson

322 “In health care, geography is destiny.” Dartmouth Medical School 1996 report, from Demanding Medical Excellence: Doctors and Accountability in the Information Age, Michael Millenson

323 Geography Is Destiny E.g.: Ft. Myers 4X Manhattan—back surgery. Newark 2X New Haven— prostatectomy. Rapid City SD 34X Elyria OH—breast-conserving surgery. VT, ME, IA: 3X differences in hysterectomy by age 70; 8X tonsillectomy; 4X prostatectomy ( 10X Baton Rouge vs. Binghampton). Breast cancer screening: 4X NE, FL, MI vs. SE, SW. (Source: various)

324 Geography Is Destiny “Often all one must do to acquire a disease is to enter a country where a disease is recognized—leaving the country will either cure the malady or turn it into something else. … Blood pressure considered treatably high in the United States might be considered normal in England; and the low blood pressure treated with 85 drugs as well as hydrotherapy and spa treatments in Germany would entitle its sufferer to lower life insurance rates in the United States.” – Lynn Payer, Medicine & Culture

325 “Practice variation is not caused by ‘bad’ or ‘ignorant’ doctors. Rather, it is a natural consequence of a system that systematically tracks neither its processes nor its outcomes, preferring to presume that good facilities, good intentions and good training lead automatically to good results. Providers remain more comfortable with the habits of a guild, where each craftsman trusts his fellows, than with the demands of the information age.” Michael Millenson, Demanding Medical Excellence

326 CDC 1998: 90,000 killed and 2,000,000 injured from nosocomial [hospital-caused] drug errors & infections

327 “Quality of care is the problem, not managed care.” Institute of Medicine (from Michael Millenson, Demanding Medical Excellence)

328 RAND (1998): 50%, appropriate preventive care. 60%, recommended treatment, per medical studies, for chronic conditions. 20%, chronic care treatment that is wrong. 30% acute care treatment that is wrong.

329 “In a disturbing 1991 study, 110 nurses of varying experience levels took a written test of their ability to calculate medication doses. Eight out of 10 made calculation mistakes at least 10% of the time, while four out of 10 made mistakes 30 % of the time.” Demanding Medical Excellence: Doctors and Accountability in the Information Age, Michael Millenson

330 “Patient by patient, problem by problem—drug reactions, hospital caused infections—Salt Lake City’s LDS Hospital has attacked treatment- caused injuries and deaths. One of the secrets of LDS’s success is a custom- built clinical computer system that may serve as a national model for how to save patient lives.” Demanding Medical Excellence: Doctors and Accountability in the Information Age, Michael Millenson

331 4. Information Consolidators: The Network Maestros

332 “America has twice as many hospitals and physicians as it needs.” Med Inc., Sandy Lutz, Woodrin Grossman & John Bigalke

333 “The future of hospitals is murky. A combination of technological advances, managed care, and changes in Medicare reimbursement policy means that the underlying demand for inpatient services will continue to fall.” Institute for the Future

334 “Virtual health care webs force providers to focus on their areas of excellence and to invest in areas where they can generate a sustainable competitive advantage.” Healthcare.com: Rx for Reform, David Friend, Watson Wyatt Worldwide

335 WebMD (or heirs & assigns)

336 5. Genetics & Devices

337 “Recognizing that a single misspelled gene means the difference between being poisoned and being cured was the first victory for the new science of pharmacogenetics.” Newsweek ( )

338 Genetic data: 2X every 6 months. Source: FT,

339 “Pharmacogenomics could fundamentally change the nature of drug discovery and marketing, rendering obsolete the pharmaceutical industry’s practice of spending vast amounts of time and money to craft a single medicine with mass-market appeal.” The Industry Standard ( )

340 Pharmacogenomics: End of Blockbusters by End-of-Decade (Reuters/5-22) Barrie James, Pharma Strategy Consulting: “We’re moving from a blunderbuss approach to laser- guided munitions, and it marks a sea change for the industry. The implications for existing business models are devastating.” Allen Roses, SVP Genetic Research, GlaxoSmithKline: “minibuster.” Rob Arnold, Euro head of life sciences, PWC : “Once you start dealing with minority treatments, small biotechs who are more nimble and don’t need $500-million-a-year drugs to make money could be at a real advantage.”

341 “BIG DRUG MAKERS TRY TO POSTPONE CUSTOM REGIMENS. Most drugs don’t work well for about half the patients for whom they are prescribed, and experts believe genetic differences are part of the reason. The technology for genetic testing is now in use. But the technique threatens to be so disruptive to the business of big drug companies – it could limit the market for some of their blockbuster products – that many of them are resisting its widespread use.” The Wall Street Journal ( )

342 Forbes100 from 1917 to 1987: 39 members of the Class of ’17 were alive in ’87; 18 are in ’87 F100; the 18 F100 “survivors” underperformed the market by 20%; just 2 (2%), GE & Kodak, outperformed the market from 1917 to Source: Dick Foster & Sarah Kaplan, Creative Destruction: Why Companies That Are Built to Last Underperform the Market

343 “Imagine the day that your surgeon performs your heart bypass sitting at a computer thousands of miles from the operating table. That day may come sooner than you think.” Newsweek ( )

344 “There is no question in my mind that the future of heart surgery is in robotics.” Dr. Robert Michler, OSU Med Center, upon the FDA’s approval of robotic partial- bypass surgery

345 Golden Age of Patient-centric, Genetics- driven Healthcare Looms! Current status: $1.3T. 30M-70M uninsured. 90K killed and 2M injured p.a. in hospitals. 85% treatments unproven. Cure depends on locale in which treated. 50% prescriptions do not work. 2X docs. 2X hospitals. IS primitive. Accountability & measurement nil. And everybody’s mad and feels powerless: docs, patients, nurses, insurers, employers, hospitals administrators and staff.

346 Message: (1) An unparalleled time for imagination and bold action. (2) A time of unprecedented opportunities. (3) A time of unprecedented risk.

347 Brand Outside Strategy 2A : Women Rule!

348 ????????? Home Furnishings … 94% Vacations … 92% Houses … 91% Consumer Electronics … 51% Cars … 60% (90%) All consumer purchases … 83% Bank Account … 89% Health Care … 80%

349 ???? 80%

350 Riding Lawnmowers

351 2/3rds working women/ 50+% working wives > 50% 80% checks 61% bills 53% stock (mutual fund boom) 43% > $500K 95% financial decisions/ 29% single handed

352 $4.8T > Japan 9M/27.5M/$3.6T > Germany

353 New golfers … 37% Basketball … 13.5M 1 in 27 (’70) … 1 in 3 (’96)

354 1874?

355 1874 … Jock Strap 1977 … Jogbra K 1996 … 42 M

356 Yeow! 1970 … 1% 2002 … 50%

357 OPPORTUNITY NO. 1! * [* No shit!]

358 Carol Gilligan/ In a Different Voice Men: Get away from authority, family Women: Connect Men: Self-oriented Women: Other-oriented Men: Rights Women: Responsibilities

359 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.”Popcorn

360 “Men seem like loose cannons. Men always move faster through a store’s aisles. Men spend less time looking. They usually don’t like asking where things are. You’ll see a man move impatiently through a store to the section he wants, pick something up, and then, almost abruptly he’s ready to buy. … For a man, ignoring the price tag is almost a sign of virility.” Paco Underhill, Why We Buy* (*Buy this book!) Paco Underhill

361 Read This: Barbara & Allan Pease’s Why Men Don’t Listen & Women Can’t Read Maps

362 “It is obvious to a woman when another woman is upset, while a man generally has to physically witness tears or a temper tantrum or be slapped in the face before he even has a clue that anything is going on. Like most female mammals, women are equipped with far more finely tuned sensory skills than men.” Barbara & Allan Pease, Why Men Don’t Listen & Women Can’t Read Maps

363 “Resting” State: 30%, 90%: “A woman knows her children’s friends, hopes, dreams, romances, secret fears, what they are thinking, how they are feeling. Men are vaguely aware of some short people also living in the house.” Barbara & Allan Pease, Why Men Don’t Listen & Women Can’t Read Maps

364 “As a hunter, a man needed vision that would allow him to zero in on targets in the distance … whereas a woman needed eyes to allow a wide arc of vision so that she could monitor any predators sneaking up on the nest. This is why modern men can find their way effortlessly to a distant pub, but can never find things in fridges, cupboards or drawers.” Barbara & Allan Pease, Why Men Don’t Listen & Women Can’t Read Maps

365 “Female hearing advantage contributes significantly to what is called ‘women’s intuition’ and is one of the reasons why a woman can read between the lines of what people say. Men, however, shouldn’t despair. They are excellent at imitating animal sounds.” Barbara & Allan Pease, Why Men Don’t Listen & Women Can’t Read Maps

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

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

368 “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

369 “Women don’t buy brands. They join them.” EVEolution

370 What If … “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

371 Not!! “Year of the Woman”

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

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

374 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!”

375 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 Alto resident … THIS IS EVEN BIGGER THAN THE INTERNET! Tom Peters

376 Psssst! Wanna see my “porn” collection?

377 “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

378 Stupid!

379 Ad from Furniture /Today (04.01): “MEET WITH THE EXPERTS!: How Retailing’s Most Successful Stay that Way” Presenting Experts: M = 16 ; F = ?? (94% = 272)

380 0

381 The Furniture Industry … doesn’t understand BRANDING doesn’t understand FASHION doesn’t understand WOMEN doesn’t understand SPEED & RESPONSIVENESS & VALUE-ADDED SERVICES doesn’t understand EXCITING RETAIL PRESENTATION & “EXPERIENCE” MARKETING. And is run by old, conservative white guys … who don’t even understand what they don’t understand.

382 Prescription … SHE is the Consumer. (PERIOD.) SHE is the Brand. (PERIOD.) 75% women designers* (*Men CANNOT design for women. PERIOD.) 75% women reps. “Cool” retail spaces in high-rent districts (à la Ethan Allen). Match furniture with accessories … i.e., create an “experience.” FOCUS ON “RELATIONSHIPS-FOR-LIFE”, not “transactions.”

383 “Amazing, now that I think about it. A bunch of guys -- developers, architects, contractors--sitting around designing shopping centers. And the ‘end users’ will be overwhelmingly women!”

384 Brand Outside Strategy 2B : Welcome to “Old World”!

385 “ ‘Age Power’ will rule the 21 st century, and we are woefully unprepared.” Ken Dychtwald, Age Power: How the 21 st Century Will Be Ruled by the New Old

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

387 Subject: Marketers & Stupidity Or is it: “18-44 is stupid, stupid!”

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

389 “NOT ACTING THEIR AGE : As Baby Boomers Zoom into Retirement, Will America Ever Be the Same?” USN&WR Cover/06.01

390 Member Growth: 1987 – – 34: 26% 35 – 49: 63% 50+: 118% Source: IHRSA

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

392 50+ $7T wealth (70%)/$2T annual income 50% all discretionary spending 79% own homes/40M credit card users 41% new cars/48% luxury $610B healthcare spending/74% prescription drugs 5% of advertising targets Ken Dychtwald, Age Power: How the 21 st Century Will Be Ruled by the New Old

393 Stupid!

394 No : “Target Marketing” Yes : “Target Innovation” & “Target Delivery Systems”

395 Brand Outside Strategy 3A : Design Matters!

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

397 The I.D. [International Design] Forty* Airstream … Alfred A. Knopf … Apple Computer … Amazon.com … Bloomberg … Caterpillar … CNN … Disney … FedEx … Gillette … IBM … Martha Stewart … New Balance … Nickelodeon … Patagonia … The New York Yankees … 3M … Etc. * List No. 1, 1999

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

399 Design Transforms even the [Biggest] Corporations! TARGET … “the champion of America’s new design democracy” (Time) “Marketer of the Year 2000” (Advertising Age)

400 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 Ohga

401 “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

402 Design “is” … WHAT & WHY I LOVE. LOVE.

403 I LOVE my ZYLISS Garlic Peeler!

404 Design “is” … WHY I GET MAD. MAD.

405 Wanted: THE DESIGNER OF MY RADIO SHACK PHONE. Major Reward!

406 “I’m just going to come right out and say it: Ericsson lost $2.3B on mobile phone handsets last year because its products are ugly.” Peter Martin (FT )

407 Design is never neutral.

408 Hypothesis: DESIGN is the principal difference between love and hate!

409 THE BASE CASE: I am a design fanatic. Personally, though not “artistic,” I’m a cool-stuff guy. I love what I love and I hate what I hate. [Openly.] But it goes [much] further, far beyond the personal. Design has become a professional obsession. I – SIMPLY – BELIEVE THAT DESIGN PER SE IS THE PRINCIPAL REASON FOR EMOTIONAL ATTACHMENT [or detachment] RELATIVE TO A PRODUCT OR SERVICE OR EXPERIENCE. Design, as I see it, is arguably the #1 determinant of whether a product-service-experience stands out … or doesn’t. Furthermore, it’s “one of those things” … that damn few companies put – consistently – on the front burner.

410 Message: Men cannot design for women’s needs. Period.

411 Philippe Starck

412 “Today the problem is not how to produce more to sell more. The fundamental question is that of the product’s right to exist. And it is the designer’s right and duty to question the legitimacy of the product.” Philippe Starck

413 “My main task when I was artistic director at Thompson for four years: to make the company virtuous. Not because there was a desire to do evil, but because they had simply forgotten their purpose in life—to be of service.” Philippe Starck

414 “I invented the slogan ‘Thompson: From Technology to Love.’ That completely repositioned the problem. Because now we were saying that technology wasn’t an end in itself, but just a means—and that the real goal was what had always been there, the original priority, humanity, whose ultimate criterion is love. That connects back to the idea of the friendly object, the good object.” Philippe Starck

415 “[At Thompson] I outlawed the word ‘consumer’ in all company meetings, and insisted it be replaced by the words ‘my friend,’ ‘my wife, ‘my daughter,’ ‘my mother,’ or ‘myself.’ It doesn’t sound the same at all, if you say: ‘It doesn’t matter, it’s shit, but the consumers will make do with it,’ or if you start over again and say, ‘It’s shit, but it doesn’t matter, my daughter will make do with it.’ All of a sudden, you can’t get away with it anymore. There is an enormous task to be done with this kind of symbolic repositioning.” Philippe Starck

416 “Today, 80 per cent of objects are unnecessarily macho. Yet it is plain: The intelligence of a truly modern society must be feminine. … Apart from a machine pistol, I can’t think of many objects which actually need to be extravagantly masculine.” Philippe Starck

417 Message: Design is the wellspring of branding. Great design takes guts and is “soul deep.”

418 Compare 10 order forms or data fields at a Web site. Save great and awful junk mail. Go on a <$10 shopping spree. Pay attention to signage. (And instruction manuals.) Start a notebook. NOW.

419 Design-Minded Company: Credo Design matters! Everywhere! The Brand Promise rules! Everywhere! All can answer: WHO ARE WE? HOW ARE WE DISTINCT? Words such as beauty & grace & emotion & connection & Wow & adventure are okay ’twixt 9 and 5. Non-Wow doesn’t cut it. Anywhere! We aim to attract Best-In-Planet TALENT; non-traditional hiring, with an emphasis on the arts, is part of this. Diversity-R-Us!

420 Design-Minded Company: Operating Philosophy All work is the product of Hot Teams of peers. Hierarchy is minimal, and usually a distraction. We understand that “disrespect” is the ultimate in respect in crazy times. The Work Matters! Wow … or bust! All work reflects design-mindfulness & the brand promise. Promotion comes immediately if the work is Wow. NO BULLSHIT. We keep our word to our teammates and other partners. Integrity = No.1 outcropping of design-mindfulness. We are a business. Results matter!

421 Brand Outside Strategy 3B : It’s the Experience!

422 “ 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

423 “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

424 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

425 The “Experience Ladder” Experiences Services Goods Raw Materials

426 1940: Cake from flour, sugar (raw materials economy): $ : Cake from Cake mix (goods economy): $ : Bakery-made cake (service economy): $ : Chuck E. Cheese (experience economy) $100.00

427 Message: “Experience” is the “Last 80%” P.S.: “Experience” applies to all work!

428 1940: Cake from flour, sugar (raw materials economy): $ : Cake from Cake mix (goods economy): $ : Bakery-made cake (service economy): $ : Chuck E. Cheese (experience economy) $100.00

429 Bob Lutz: (1) “I see us as being in the art business. Art, entertainment and mobile sculpture, which, coincidentally, also happens to provide transportation.” (2) Focus groups can be misleading. (“What did you like about that movie you just saw? Was there enough violence? Was the car chase long enough?”) (3) Design must be Priority No. 1. Source: NYT

430 Brand Outside Strategy 4 : BRAND POWER!

431 “WHO ARE YOU [these days] ?” TP to Client

432 “Most companies tend to equate branding with the company’s marketing. Design a new marketing campaign and, voila, you’re on course. They are wrong. The task is much bigger. It is about fulfilling our potential … not about a new logo, no matter how clever. WHAT IS MY MISSION IN LIFE? WHAT DO I WANT TO CONVEY TO PEOPLE? HOW DO I MAKE SURE THAT WHAT I HAVE TO OFFER THE WORLD IS ACTUALLY UNIQUE? The brand has to give of itself, the company has to give of itself, the management has to give of itself. To put it bluntly, it is a matter of whether – or not – you want to be … UNIQUE … NOW.” Jesper Kunde, A Unique Moment Jesper Kunde

433 “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

434 “Brand Promise” Exercise: (1) Who Are WE? (poem/novella/song, then 25 words.) (2) List three ways in which we are UNIQUE … to our Clients. (3) Who are THEY (competitors) ? (ID, 25 words.) (4) List 3 distinct “us”/“them” differences. (5) Try “results” on your teammates. (6) Try ’em on a friendly Client. (7) Big Enchilada: Try ’em on a skeptical Client!

435 1 st Law Mktg Physics: OVERT BENEFIT (Focus: 1 or 2 > 3 or 4/“One Great Thing.” Source #1: Personal Passion) 2 ND Law: REAL REASON TO BELIEVE (Stand & Deliver!) 3 RD Law: DRAMATIC DIFFERENCE (Execs Don’t Get It: See the next slide.) Source: Jump Start Your Business Brain, Doug Hall

436 2 Questions “How likely are you to purchase this new product or service?” (95% to 100% weighting by execs) “How unique is this new product or service?” (0% to 5%*) *No exceptions in 20 years – Doug Hall, Jump Start Your Business Brain

437 Message: “Branding” is B.S. long- term if the product is not supercalifragilisticexpealidocious (e.g., see sections on Design & Experience above)

438 The Heart of Branding …

439 “WHO ARE WE?”

440 WHAT’S OUR STORY?

441 DO THE HOUSEKEEPERS & CLERKS “BUY IT”? [ARE YOU V-E-R-Y SURE?]

442 “EXACTLY HOW ARE WE DRAMATICALLY DIFFERENT?”

443 “ WHY DOES IT MATTER TO THE CLIENT?”

444 “EXACTLY HOW DO I PASSIONATELY CONVEY THAT DIFFERENCE TO THE CLIENT ”

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

446 The Leadership50 Leading in Totally Screwed Up Times

447 1. Leadership Is a … Mutual Discovery Process.

448 Leaders-Teachers Do Not “Transform People”! Instead leaders-mentors-teachers (1) provide a context which is marked by (2) access to a luxuriant portfolio of meaningful opportunities (projects) which (3) allow people to fully (and safely, mostly—caveat: “they” don’t engage unless they’re “mad about something”) express their innate curiosity and (4) engage in a vigorous discovery voyage (alone and in small teams, assisted by an extensive self-constructed network) by which those people (5) go to-create places they (and their mentors-teachers- leaders) had never dreamed existed—and then the leaders-mentors-teachers (6) applaud like hell, stage “photo-ops,” and ring the church bells 100 times to commemorate the bravery of their “followers’ ” explorations!

449 I am inalterably opposed to “organization change,” “empowerment,” “motivation.” The goal: to awaken the latent talent already within, by providing opportunities worthy of the individual’s investment of her or his most precious resources … time and emotional commitment.

450 1A. Leaders … Cede Control.

451 “I don’t know.”

452 1B. Leaders Try … Not to Screw Things Up

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

454 2. Great Leaders on Snorting Steeds Are Important – but Great Talent Developers (Type I Leadership) are the Bedrock of Organizations that Perform Over the Long Haul.

455 25/8/53

456 Whoops: Jack didn’t have a vision!

457 2A. “Just One”: Great Leading = Great Mentoring.

458 T.A.: 3

459 Goal of the Year No. 1*: Find- Develop-Mentor ONE Extraordinary Person. *CEO, large financial advisory firm, April 2001

460 2B. Great Leaders are … Great V.C.s.

461 “Basically [Omnicom’s John] Wren makes aggressive bets on entrepreneurs and gives them tremendous autonomy, on the assumption that the risk-taking will pay off in new ideas, connections, businesses, and, yes, revenues and profits. … ‘Omnicom operates like a venture-capital firm,’ says Sir Martin Sorrell [of WPP].” Fortune ( )

462 3. But Then Again, There Are Times When This “Cult of Personality” (Type II Leadership) Stuff Actually Works!

463 “A leader is a dealer in hope.” Napoleon

464 4. Find the “Businesspeople”! (Type III Leadership)

465 I.P.M. (Inspired Profit Mechanic)

466 4A. All Organizations Need the Golden Leadership Triangle.

467 The Golden Leadership Triangle: (1) Creator- Visionary … (2) Talent Fanatic-Mentor-V.C. … (3) Inspired Profit Mechanic.

468 Project Team Golden Triangle (1) Champion-Maniac. (2) Implementer-Pol. (3) Schedule & Budgets Fanatic.

469 5. Leadership Mantra #1: IT ALL DEPENDS!

470 Renaissance Men are … a snare, a myth, a delusion!

471 6. The Leader Is Rarely/Never the Best Performer.

472 33 Division Titles. 26 League Pennants. 14 World Series: Earl Weaver—0. Tom Kelly—0. Jim Leyland—0. Walter Alston—1AB. Tony LaRussa—132 games, 6 seasons. Tommy Lasorda—P, 26 games. Sparky Anderson—1 season.

473 7. Leaders … LOVE the MESS!

474 7A. Leadership Is Improv!

475 Rudy!

476 Duct Tape Rules! “Andrew Higgins, who built landing craft in WWII, refused to hire graduates of engineering schools. He believed that they only teach you what you can’t do in engineering school. He started off with 20 employees, and by the middle of the war had 30,000 working for him. He turned out 20,000 landing craft. D.D. Eisenhower told me, ‘Andrew Higgins won the war for us. He did it without engineers.’ ” Stephen Ambrose/Fast Company

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

478 7B. Leaders Groove on AMBIGUITY!

479 “Most of our predictions are based on very linear thinking. That’s why they will most likely be wrong.” Vinod Khosla, in “GIGATRENDS,” Wired 04.01

480 8. Leaders DO!

481 The Kotler Doctrine: : R.A.F. (Ready.Aim.Fire.) : R.F.A. (Ready.Fire!Aim.) 1995-????: F.F.F. (Fire!Fire!Fire!)

482 8A. Leaders Re -do.

483 “Sony Electronics has a well- earned reputation for persistence. The company’s first entry into a new field often isn’t very good. But, as it has shown in laptops, Sony will keep trying until it gets it right.” Business Week (5/01)

484 “If Microsoft is good at anything, it’s avoiding the trap of worrying about criticism. Microsoft fails constantly. They’re eviscerated in public for lousy products. Yet they persist, through version after version, until they get something good enough. Then they leverage the power they’ve gained in other markets to enforce their standard.” Seth Godin, Zooming Seth Godin

485 8B. Leaders Are PLAYFUL.

486 “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

487 Axiom: Never trust a “boss” with no toys in his/her office!

488 9. BUT … Leaders Know When to Wait.

489 Tex Schramm: The “too hard” box!

490 Axioms: (1) Pick your battles carefully. (2) Sometimes inaction promotes sorting out & preserves options.

491 10. Leaders … DELIVER!

492 10A. Leaders Are … Optimists.

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

494 11. BUT … Leaders Are Realists/Leaders Win Through LOGISTICS!

495 The “Gus Imperative”!

496 12. Leaders FOCUS!

497 “To Don’t ” List

498 Leaders “dump the ones who brung ’em” — Nokia, HP, 3M, PerkinElmer, Corning, Enron, etc.

499 Cortez!

500 13. Leaders … Set DESIGN SPECS.

501 JackWorld/ : (1) Neutron Jack. (Banish bureaucracy.) (2) “1, 2 or out” Jack. (Lead or leave.) (3) “Workout” Jack. (Empowerment, GE style.) (4) 6-Sigma Jack. (5) Internet Jack. (Throughout) TALENT JACK!

502 14. Leaders … Send V-E-R-Y Clear Signals About Design Specs!

503 Ridin’ with Roger: “What have you done to DRAMATICALLY IMPROVE quality in the last 90 days?”

504 15. Leaders Trust in TRUST !

505 Credibility !

506 15A. Leaders Infuse the Dreaded-All Important “Evaluation Process” with CREDIBILITY!

507 25 = 100

508 Talent-minded leaders: (1) treat the evaluation process strategically ; (2) invest enormous amounts of personal time in it (to give it credibility & amass data); (3) depend on dialogue & “plain English,” not obscure, standardized “instruments.”

509 16. Leaders Understand the Ultimate Power of RELATIONSHIPS.

510 “Women speak and hear a language of connection and intimacy, and men speak and hear a language of status and independence. Men communicate to obtain information, establish their status, and show independence. Women communicate to create relationships, encourage interaction, and exchange feelings.” Judy Rosener, America’s Competitive Secret

511 16A. Leaders Wire the Joint!

512 Winners wire. Losers are slaves to rank.

513 “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

514 16B. Leaders Are Natural EMPOWERMENT FREAKS!

515 17. Leaders Know … Women Roar/ Women Rule.

516 “AS LEADERS, WOMEN RULE: New Studies find that female managers outshine their male counterparts in almost every measure” Title, Special Report, Business Week,

517 Women’s Strengths: Link [rather than rank] workers; favor interactive-collaborative leadership style [empowerment > top-down decision making]; sustain fruitful collaborations; comfortable with sharing information; see redistribution of power as victory, not surrender; favor multi-dimensional feedback; value interpersonal & technical skills, group & individual 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

518 17A. Oh Yeah … and Women Buy All the Stuff

519 $4.8T > Japan 9M/27.5M/$3.6T > Germany

520 18. Leaders LOVE RAINBOWS – for Pragmatic Reasons.

521 “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

522 18A. Leaders Pursue Poets!

523 Gardner’s MI7: Logical- mathematical, Linguistic, Spatial, Musical, Bodily-kinesthetic, Interpersonal, Intrapersonal.

524 “Expose yourself to the best things humans have done, and then try to bring those things into what you’re doing.” Steve Jobs

525 19. Leaders … FORGET!/ Leaders … DESTROY!

526 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

527 “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

528 The [New] G e Way DYB.com

529 20. BUT … Leaders Have to Deliver, So They Worry About “Throwing the Baby Out with the Bathwater.”

530 “Damned If You Do, Damned If You Don’t, Just Plain Damned” Subtitle in the chapter, “Own Up to the Great Paradox: Success Is the Product of Deep Grooves/ Deep Grooves Destroy Adaptivity,” Liberation Management (1992)

531 21. Leaders … HONOR THE USURPERS.

532 Saviors-in-Waiting Disgruntled Customers Upstart Competitors Rogue Employees Fringe Suppliers Wayne Burkan, Wide Angle Vision: Beat the Competition by Focusing on Fringe Competitors, Lost Customers, and Rogue Employees

533 22. Leaders … HANG OUT WITH FREAKS!

534 Message: TAKE SOMEONE NEW & WEIRD TO LUNCH TODAY OR TOMORROW. [Inundate yourself with weird.]

535 23. Leaders Make [Lotsa] Mistakes – and MAKE NO BONES ABOUT IT!

536 Sam’s Secret #1!

537 “Fail faster. Succeed sooner.” David Kelley/IDEO

538 24. Leaders Make … BIG MISTAKES!

539 “Reward excellent failures. Punish mediocre successes.” Phil Daniels, Sydney exec (and, de facto, Jack)

540 24A. Leaders Honor Mistakes & Create “Blame-free ‘Cultures.’ ”

541 Winning By Acknowledging Failures Wernher Von Braun, the Redstone missile engineer who “confessed” & the bottle of champagne. Award to the sailor on the Carl Vinson—for reporting the lost tool. Amy Edmonson & the successful nursing units with the highest reported adverse drug events. Source: Karl Weick & Kathleen Sutcliffe, Managing the Unexpected

542 Accountability: YES! Never-ending witch hunts: NO!

543 25. Leaders Know that THERE’S MORE TO LIFE THAN “LINE EXTENSIONS.” Leaders Love to CREATE NEW MARKETS.

544 No one ever made it into the Business Hall of Fame on a record of “line extensions.”

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

546 The Top Creators of Shareholder Value Accept depressed earnings for several quarters to support hot product Expense rather than capitalize new venture costs Bonuses without caps Source: Fortune ( )

547 26. Leaders Pursue DRAMATIC DIFFERENCE!

548 1 st Law Mktg Physics: OVERT BENEFIT (Focus: 1 or 2 > 3 or 4/“One Great Thing.” Source #1: Personal Passion) 2 ND Law: REAL REASON TO BELIEVE (Stand & Deliver!) 3 RD Law: DRAMATIC DIFFERENCE (Execs Don’t Get It: “intent to purchase” – 100%; “unique” – 0% to 5%) Source: Jump Start Your Business Brain, Doug HallDoug Hall

549 26A. Leaders Make Their Mark / Leaders Do Stuff That Matters

550 “Today the problem is not how to produce more to sell more. The fundamental question is that of the product’s right to exist. And it is the designer’s right and duty to question the legitimacy of the product.” Philippe Starck

551 27. Leaders Push Their Organizations W-a-y Up the Value-added/ Intellectual Capital Chain

552 : HP bids $18,000,000,000 for PricewaterhouseCoopers Consulting business!

553 28. Leaders LOVE the New Technology!

554 100 square feet

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

556 28A. Needed? Type IV Leadership: Technology Dreamer-True Believer

557 The Golden Leadership Quadrangle: (1) Creator- Visionary … (2) Talent Fanatic-Mentor-V.C. … (3) Inspired Profit Mechanic. (4) Technology Dreamer-True Believer