World Innovation Forum EVERYTHING YOU THOUGHT YOU KNEW ABOUT INNOVATION IS WRONG Tom Peters/New York/0524.2006/ Inno.NEW.short.0524

World Innovation Forum: Alt Title YOU ONLY FIND OIL IF YOU DRILL WELLS

“In Italy for 30 years under the Borgias they had warfare, terror, murder, bloodshed—and produced Michelangelo, da Vinci and the Renaissance. In Switzerland they had brotherly love, 500 years of democracy and peace, and what did they produce— Source: Orson Welles, as Harry Lime, in The Third Man

—the cuckoo clock.”

Case: Perceived Rommel invents Blitzkrieg Case: Perceived Rommel invents Blitzkrieg. Germans kick the crap out of the French in two weeks. Q.E.D.

Case: Lesson Learned Planned innovation (P. I. , not C. I Case: Lesson Learned Planned innovation (P.I., not C.I.) is possible, is cool, is effective. (Write it up. Publish.)

Case: Reality Germans cross Meuse into France Case: Reality Germans cross Meuse into France. Whoops: French intelligence completely drops the ball. (Loses track of the Germans—no kidding.) Germans keep advancing; outrun supply lines; no land-air co-ordination. Hitler orders advance stopped. General Guderian never gets the word. Guderian marches to Paris, virtually unopposed. Germans as shocked as French at what transpired. After the fact, Germans label it “Blitzkrieg.”

Case: Lesson Learned Do something. Get lucky Case: Lesson Learned Do something. Get lucky. Attribute luck to superior planning. Get medals.* *P-E-A-S-E read Fooled By Randomness: The Hidden Role Of Chance In Life And Markets, by Nassim Taleb

TP “Lessons Learned” Innovation = DisDis (Disciplined Disorganization) Luck is a very good thing.* ** (*More “lessons” later: E.g., If you hire a bunch of disciplined weirdos and try a lot of weird stuff, the odds of getting lucky go up remarkably.) (**Career success depends on convincing others that you knew what the hell you were doing all along. Good news: Say it long enough and you—and “they”—will believe it. Great news: Keep saying it and you, too, can become a “guru.”)

Smashing Conventional Wisdom “Blitzkrieg in fact emerged in a rather haphazard way from the experience of the French campaign, whose success surprised the Germans as much as the French. Why otherwise did the High Command try on various occasions, with Hitler’s backing, to slow the panzers down? The victory in France* came about partly because the German High Command temporarily lost control of the battle. The decisive moment in this process was Guderian’s decision to move immediately westward on 14 May, the day after the Meuse crossing, wrenching the whole of the rest of the army along behind him.” *messed up traffic, little close air support, random heroics by some small bits of Guderian’s forces, Guderian not a disciple of the WWI-derived “strategy of indirect approach” Source: Julian Jackson, The Fall of France

Lessons: Containerization Need-driven A thousand “parents” Messy Evolutionary “Trivial” Experimentation Trial & ERROR Loooong time for systemic adaptation/s (many innovations) (bill of lading, standard time) Not … “Plan-driven” The product of “Strategic Thinking/Planning” The product of “focus groups”

First-level Scientific Success Fanaticism Persistence-Dogged Tenacity Patience (long haul/decades)-Impatience (in a hurry/”do it yesterday”) Passion Energy Relentlessness (Grant-ian) Enthusiasm Driven (nuts!) (Brutal?) Competitiveness Entrepreneurial Pragmatic (R.F!A.) Scrounge (“gets” the logistics-infrastructure bit) Master of Politics (internal-external) Tactical Genius Pursuit of (Oceanic) Excellence! High EQ/Skillful in Attracting + Keeping Talent/Magnetic Prolific (“ground up more pig brains”) Egocentric Sense of History-Destiny Futuristic-In the Moment Mono-dimensional (“Work-life balance”? Ha!) Exceptionally Intelligent Exceptionally Clever (methodological shortcuts/methodological genius) Luck

PREVIEW.

“It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.” —Charles Darwin

“The most successful people are those who are good at plan B “The most successful people are those who are good at plan B.” —James Yorke, mathematician, on chaos theory in The New Scientist

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

S.A.V.

Sam’s Secret #1!

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

What “We” Know “For Sure” About Innovation Big mergers (by & large) don’t work Scale is over-rated Strategic planning is the last refuge of scoundrels Focus groups are counter-productive “Built to last” is a chimera (stupid) Success kills “Forgetting” is impossible Re-imagine is a charming idea “Orderly innovation process” is an oxymoronic phrase (= Believed only by morons with ox-like brains) “Tipping points” are easy to identify … long after they will do you any good “Facts” aren’t All information making it to the top is filtered to the point of danger and hilarity “Success stories” are the illusions of egomaniacs (and “gurus”) If you believe the “cause & effect” memoirs of CEOs you should be institutionalized “Herd behavior” (XYZ is “hot”) is ubiquitous … and amusing “Top teams” are “Dittoheads” Statistically, CEOs have little effect on performance “Expert” prediction is rarely better than rolling the dice

Pathetic!

“Forbes100” from 1917 to 1987: 39 members of the Class of ’17 were alive in ’87; 18 in ’87 F100; 18 F100 “survivors” underperformed the market by 20%; just 2 (2%), GE & Kodak, outperformed the market 1917 to 1987. 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 1997. Source: Dick Foster & Sarah Kaplan, Creative Destruction: Why Companies That Are Built to Last Underperform the Market

“I am often asked by would-be entrepreneurs seeking escape from life within huge corporate structures, ‘How do I build a small firm for myself?’ The answer seems obvious: Buy a very large one and just wait.” —Paul Ormerod, Why Most Things Fail: Evolution, Extinction and Economics

“Not a single company that qualified as having made a sustained transformation ignited its leap with a big acquisition or merger. Moreover, comparison companies—those that failed to make a leap or, if they did, failed to sustain it—often tried to make themselves great with a big acquisition or merger. They failed to grasp the simple truth that while you can buy your way to growth, you cannot buy your way to greatness.” —Jim Collins/Time/2004

“Almost every personal friend I have in the world works on Wall Street “Almost every personal friend I have in the world works on Wall Street. You can buy and sell the same company six times and everybody makes money, but I’m not sure we’re actually innovating. … Our challenge is to take nanotechnology into the future, to do personalized medicine …” —Jeff Immelt/2005

“I don’t believe in economies of scale “I don’t believe in economies of scale. You don’t get better by being bigger. You get worse.” —Dick Kovacevich/Wells Fargo/Forbes/08.04 (ROA: Wells, 1.7%; Citi, 1.5%; BofA, 1.3%; J.P. Morgan Chase, 0.9%)

Scale. “Microsoft’s Struggle With Scale” —Headline, FT, 09 Scale? “Microsoft’s Struggle With Scale” —Headline, FT, 09.2005 “Troubling Exits at Microsoft” —Cover Story, BW, 09.2005 “Too Big to Move Fast?” —Headline, BW, 09.2005

More than $$$$ #1 R&D spending, last 25 years?

GM

“But what if [former head of strategic planning at Royal Dutch Shell] Arie De Geus is wrong in suggesting, in The Living Company, that firms should aspire to live forever? Greatness is fleeting and, for corporations, it will become ever more fleeting. The ultimate aim of a business organization, an artist, an athlete or a stockbroker may be to explode in a dramatic frenzy of value creation during a short space of time, rather than to live forever.” —Kjell Nordström and Jonas Ridderstråle, Funky Business

EXCELLENCE. 4/40.

4/40

De-cent-ral-iz- a-tion!

Ex-e- cu-tion!

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

“Execution is the job of the business leader “Execution is the job of the business leader.” —Larry Bossidy & Ram Charan/ Execution: The Discipline of Getting Things Done

“Execution is a systematic process of rigorously discussing hows and whats, tenaciously following through, and ensuring accountability.” —Larry Bossidy & Ram Charan/ Execution: The Discipline of Getting Things Done

“We have a ‘strategic plan. ’ It’s called doing things “We have a ‘strategic plan.’ It’s called doing things.” — Herb Kelleher

“This is so simple it sounds stupid, but it is amazing how few oil people really understand that you only find oil if you drill wells. You may think you’re finding it when you’re drawing maps and studying logs, but you have to drill.” Source: The Hunters, by John Masters, Canadian O & G wildcatter

“While many people big oil finds with big companies, over the years about 80 percent of the oil found in the United States has been brought in by wildcatters such as Mr Findley, says Larry Nation, spokesman for the American Association of Petroleum Geologists.” —WSJ, “Wildcat Producer Sparks Oil Boom in Montana,” 0405.2006

Ac-count-a-bil-ity!

“GE has set a standard of candor. … There is no puffery “GE has set a standard of candor. … There is no puffery. … There isn’t an ounce of denial in the place.” —Kevin Sharer, CEO Amgen, on the “GE mystique” (Fortune)

6:15A.M.

???????? Work Hard > Work Smart

FLASH! Innovation is easy!

“The ‘surplus society’ has a surplus of similar companies, employing similar people, with similar educational backgrounds, coming up with similar ideas, producing similar things, with similar prices and similar quality.” —Kjell Nordström and Jonas Ridderstråle, Funky Business

We become who we hang out with!

Measure “Strangeness”/Portfolio Quality Staff Consultants Vendors Out-sourcing Partners (#, Quality) Innovation Alliance Partners Customers Competitors (who we “benchmark” against) Strategic Initiatives Product Portfolio (LineEx v. Leap) IS/IT Projects HQ Location Lunch Mates Language Board

“The Bottleneck Is at the Top of the Bottle” “Where are you likely to find people with the least diversity of experience, the largest investment in the past, and the greatest reverence for industry dogma: At the top!” — Gary Hamel/Harvard Business Review

“Beware of the tyranny of making Small Changes to Small Things “Beware of the tyranny of making Small Changes to Small Things. Rather, make Big Changes to Big Things.” —Roger Enrico, former Chairman, PepsiCo

Five MYTHS About Changing Behavior Five MYTHS About Changing Behavior *Crisis is a powerful impetus for change *Change is motivated by fear *The facts will set us free *Small, gradual changes are always easier to make and sustain *We can’t change because our brains become “hardwired” early in life Source: Fast Company/05.2005

Line Extensions: 86 percent of new products. 62 percent of revenues. 39 percent of profit. Source: Blue Ocean Strategy, Chan Kim and Renee Mauborgne

Innovation Index: How many of your Top 5 Strategic Initiatives/Key Projects score 8 or higher (out of 10) on a “Weird”/ “Profound”/ “Wow”/“Game- changer” Scale?

EXCELLENCE. THE WORD.

Synonyms Purity Transcendence Virtue Elegance Majesty Antonyms Mediocrity

ExIn*: 1982-2002/Forbes.com DJIA: $10,000 yields $85,000 EI: $10,000 yields $140,050 *Excellence Index /Basket of 32 publicly traded stocks

EXCELLENCE. ALWAYS.

“Why in the world did you go to Siberia?”

The Peters Principles: Enthusiasm. Emotion. Excellence. Energy The Peters Principles: Enthusiasm. Emotion. Excellence. Energy. Excitement. Service. Growth. Creativity. Imagination. Vitality. Joy. Surprise. Independence. Spirit. Community. Limitless human potential. Diversity. Profit. Innovation. Design. Quality. Entrepreneurialism. Wow.

Business* ** (*at its best): An emotional, vital, innovative, joyful, creative, entrepreneurial endeavor that elicits maximum concerted human potential in the wholehearted service of others.*** **Excellence. Always. ***Employees, Customers, Suppliers, Communities, Owners, Temporary partners

Business: The Ultimate Creative Endeavor.

Business: The Ultimate Personal Development-Growth Experience.

Business: The Ultimate Transcendent Service Opportunity.

EXCELLENCE. BEDROCK.

Brand = Talent.

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

Leadership’s Mt Everest/Mt Excellence “free to do his or her absolute best” … “allow its members to discover their greatness.”

“The role of the Director is to create a space where the actor or actress can become more than they’ve ever been before, more than they’ve dreamed of being.” —Robert Altman, Oscar acceptance

Our Mission To develop and manage talent; to apply that talent, throughout the world, for the benefit of clients; to do so in partnership; to do so with profit. WPP

EXCELLENCE. LEADING.

Leadership23

Leadership23 1. Enthusiasm. Energy. Exuberance. 2. Action. Execution. 3. Tempo. Metabolism. 4. Relentless. 5. Master of Plan B. 6. Accountability. 7. Meritocracy. 8. Leaders “do” people. Mentor. (“Success creation business.”) 9. Women. Diversity. 10. Integrity. Credibility. Humanity. Grace. 11. Realism. 12. Cause. Adventures. Quests. 13. Legacy. 14. Best story wins. 15. On the edge. (“Wildest chimera of a moonstruck mind.”) 16. “Reward excellent failures. Punish mediocre successes.” 17. Different > Better. (“Only ones who do what we do.”) 18. MBWA. Customer MBWA. 19. Laughs. 20. Repot. Curiosity. Why? 21. You = Calendar. “To Don’t.” Two. 22. Excellence. Always. 23. Nelsonian! (“Other admirals more afraid of losing than anxious to win.”)

EXCELLENCE. TRANSCENDENCE. THRILLS.

Insanely Great Language! —Steve Jobs

“Radically Thrilling.” Radically Thrilling Language! “Radically Thrilling.” —BMW Z4 (ad)

CTO* *Chief Thrills Officer

Synonyms Purity Transcendence Virtue Elegance Majesty Antonyms Mediocrity

CTO* *Chief Transcendence Officer

Gaspworthy!

CGM* *Chief Gasp Master

CRO* *Chief Revenue Officer

Inno.0524.06

What “We” Know “For Sure” About Innovation Big mergers (by & large) don’t work Scale is over-rated Strategic planning is the last refuge of scoundrels Focus groups are counter-productive “Built to last” is a chimera (stupid) Success kills “Forgetting” is impossible Re-imagine is a charming idea “Orderly innovation process” is an oxymoronic phrase (= Believed only by morons with ox-like brains) “Tipping points” are easy to identify … long after they will do you any good “Facts” aren’t All information making it to the top is filtered to the point of danger and hilarity “Success stories” are the illusions of egomaniacs (and “gurus”) If you believe the “cause & effect” memoirs of CEOs you should be institutionalized “Herd behavior” (XYZ is “hot”) is ubiquitous … and amusing “Top teams” are “Dittoheads” Statistically, CEOs have little effect on performance “Expert” prediction is rarely better than rolling the dice

Parallel universe/Exec Ed v res MBA End run regnant powers/JKC Find done deals-practicing mavericks/ Stone-ReGo Bell curves/2016 in 2006 Non-industry benchmarking Everything = Portfolio V.C.s all! Hot language/Wow-Astonish me-Insanely great-immortal-Make something great Lead customers/PW-Embraer Lead suppliers /Top decile R&D Weird alliances Mottos/Paul Arden (“Whatever You Think Think the Opposite”) Hire freaks/Enough weird people? Weird Boards!!!

CEO track record of Innovation (nobody starts at 45!) System/GE-Immelt “Strategic thrust overlay” Calendar Big Delta easier than Small Delta MBWA with freaks-weirdos/JKC MBWA/Boonies’ labs V.C.-formal/Intel Acquire weird Children’s crusade Old farts crusade Women’s crusade Go Global at any size Stop listening to customers Talent!/Unusual sources-Hire innovators-V.C.s Eschew giant mergers

Remember: scale economies max out early Assisted suicide! (“Built to last” = Chimera-snare-delusion) Burn your press clippings “Forgetting” “strategy” Fire all strategic planners Tempo! Final product bears little relation to starting notion Design! Design! Design! (“culture,” not program) All innovation: Pissed-off people Gut feel rules! Focus groups suck Weird focus groups okay Be-Do philosophy

Celebrations Culture-little as well as big Inno (“everyone-an-innovator”) Life = Wow Projects Acknowledge messiness-pursue serendipity (Blitzkrieg-Containers-Science-Jim Utterback) R.F.A. Culture of execution 4/40: decentralization, execution, accountability, 615AM EVP (S.O.U.B.)/Systems-process “un-design” Diversity for diversity’s sake Women-Women-Women/customers (they “are the market,” not a “segment”)-leaders Boomers-Geezers (“all the money”)

CRO (Chief Revenue Officer) “culture”/top-line obsessed CIO (Chief INNOVATION Officer) Laughter Facility-space configuration Experiments-prototypes “Reward excellent failures. Punish mediocre successes.” Bizarrely high incentives (& penalties) We are what we eat/We are who we hang out with (E.g.: Staff-Consultants-Vendors-Out-sourcing Partners/#, Quality-Innovation Alliance Partners-Customers-Competitors/who we “benchmark” against -Strategic Initiatives -Product Portfolio/LineEx v. Leap-IS/IT Projects-HQ Location-Lunch Mates-Language-Board)

Stay Hungry. Stay Foolish. Steve Jobs