World Innovation Forum* (*Modesty is everything) EVERYTHING YOU THOUGHT YOU KNEW ABOUT INNOVATION IS WRONG* (*Except, of course, what the other presenters have said/will say) Tom Peters/New York/

World Innovation Forum YOU ONLY FIND OIL IF YOU DRILL WELLS Tom Peters/New York/

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

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

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

Case: Lesson Learned Do something. Get lucky. Attribute luck to superior planning. Get medals.

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 loud enough and you will believe it. Great news: Keep saying it and you, too, can become a “guru.”)

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”

tompeters.com* *Also: EVERYTHING.LONG

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.” —James Yorke, mathematician, chaos theory specialist, 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.” Phil Daniels, Sydney exec

Axioms.

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 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 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

“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

“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, “Troubling Exits at Microsoft” —Cover Story, BW, “ Too Big to Move Fast?” —Headline, BW,

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

GM

10,000,000,000,000* *2,000,000,000

EXCELLENCE. 4/40.

4/40

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

Ex-e- cu-tion!

“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.” — 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

Ac-count- a-bil-ity!

“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.

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 s imilar 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. Rather, make Big Changes to Big Things.” —Roger Enrico, former Chairman, PepsiCo

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

OPPORTUNITY.

“Women are the majority market” —Fara Warner/The Power of the Purse

1. Men and women are different. 2. Very different. 3. VERY, VERY DIFFERENT. 4. Women & Men have a-b-s-o-l-u-t-e-l-y nothing in common. 5. Women buy lotsa stuff. 6. WOMEN BUY A-L-L THE STUFF. 7. Women’s Market = Opportunity No Men are (STILL) in charge. 9. MEN ARE … TOTALLY, HOPELESSLY CLUELESS ABOUT WOMEN. 10. Women’s Market = Opportunity No. 1.

Cases! McDonald’s (“mom-centered” to “majority consumer”; not via kids) Home Depot (“Do it [everything!] Herself”) P&G (more than “house cleaner”) DeBeers (“right-hand rings”/$4B) AXA Financial Kodak (women = “emotional centers of the household”) Nike (> jock endorsements; new def sports; majority consumer) Avon Bratz (young girls want “friends,” not a blond stereotype) Source: Fara Warner/The Power of the Purse

10. Women’s Market = Opportunity No. 1.

10.6

“Forget China, India and the Internet: Economic Growth Is Driven by Women.” —Headline, Economist, April 15, Leader, page 14

???????? Weenie of the year, 2006 …

???????? 6/44

OPPORTUNITY.

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

44-65: “New Customer Majority” * *45% larger than 18-43; 60% larger by 2010 Source: Ageless Marketing, David Wolfe & Robert Snyder

“The New Customer Majority is the only adult market with realistic prospects for significant sales growth in dozens of product lines for thousands of companies.” —David Wolfe & Robert Snyder, Ageless Marketing

BEDROCK.

Brand = Talent.

“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. TRANSCENDENCE. THRILLS.

Synonyms Purity Transcendence Virtue Elegance Majesty Antonyms Mediocrity

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

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

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

C T O* *Chief Thrills Officer

Synonyms Purity Transcendence Virtue Elegance Majesty Antonyms Mediocrity

C T O* *Chief Transcendence Officer

C R O* *Chief Revenue Officer

Inno

Parallel universe/Exec Ed v resident 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 Crazy customers/PW-Embraer Crazy 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)

Drill more wells!