Change2001 Tom Peters Distinct … or Extinct San Francisco/01 May 2001

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

The corporation as we know it, which is now 120 years old, is not likely to survive the next 25 years. Legally and financially, yes, but not structurally and economically. Peter Drucker, Business 2.0 (08.00)

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, talk april2001

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

We are in a brawl with no rules. Paul Allaire

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

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

Read It Closely: We dont sell insurance anymore. We sell speed. Peter Lewis, Progressive

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

Work I The Destruction Imperative!

Forget>Learn The problem is never how to get new, innovative thoughts into your mind, but how to get the old ones out. Dee Hock

The [New] G e Way DYB.com

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

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

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

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

White Collar Revolution!

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

IBMs Project Eliza!

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

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

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

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

11 September 2000

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

[These days, building the best server isnt enough. Thats the price of entry. Ann Livermore, Hewlett Packard]

% Rev From Service: GE (80%) … IBM (80%) … HP … Sun????

Maybe one [or more] of your PSFs becomes the tail that wags the dog????? [E.g.: engineering, IS-logistics- customer service]

The Raw Material … The WOW Project!

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

Every project we take on starts with a question: How can we do whats never been done before? Stuart Hornery, CEO, Lend Lease

My GOAL: Radicalize Audiences!* *Hint: These are Radical times!

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

Am I full of CRAP? Wearing ROSE- COLORED GLASSES?

Work-Life Balance???? Madeleine McGrath & the London Suicide Hotline

Brand Inside Brand You: Distinct … or Extinct

New Economy changes how firms treat layoffs Headline, USA Today ( )

If there is nothing very special about your work, no matter how hard you apply yourself, you wont get noticed, and that increasingly means you wont get paid much either. Michael Goldhaber, Wired

Minimum New Work SurvivalSkillsKit2000 Mastery Rolodex Obsession (vert. to horiz. loyalty) Finishing Skills Entrepreneurial Instinct CEO/Leader/Businessperson Mistress of Improv Sense of Humor Intense Appetite for Technology Groveling Before the Young Embracing Marketing Passion for Renewal

Invent. Reinvent. Repeat. Source: HP banner ad

Brand Inside Brand Talent: The Great War for Talent

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

From 1, 2 or youre out [JW] to …Best Talent in each industry segment to build best proprietary intangibles [EM] Source: Ed Michaels, War for Talent ( )

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 ( )

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

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 ( )

We value engineers like professional athletes. We value great people at 10 times an average person in their function. Jerry Yang, Yahoo

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

Talented people are less likely to wait their turn. We used to view young people as trainees; now they are authorities. Arguably this is the first time the older generation can – and must – leverage the younger generation very early in their careers. Ed Michaels, War for Talent ( )

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]

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

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

Women and new- economy management …

The New Economy … Shout goodbye to command and control! Shout goodbye to hierarchy! Shout goodbye to knowing ones place!

Womens Stuff = New Economy Match Improv skills Relationship-centric Less rank consciousness Self determined Trust sensitive Intuitive Natural empowerment freaks [less threatened by strong people] Intrinsic [motivation] > Extrinsic

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

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

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

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

Axiom: Never hire anyone without an aberration in their background!

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

48 Players = 48 Projects = 48 different success measures

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

H.R. to H.E.D. ??? H uman E nablement D epartment

MantraM3 Talent = Brand

Whats your companys … EVP? Employee Value Proposition, per Ed Michaels et al., The War for Talent

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

HR Folks: YOU – not marketing - OWN THE BRAND PROMISE! (If you wish.)

Brand Inside Brand Action: Getting Started … a Personal Perspective

The following slide begins the Boss-Free Implementation of Stuff That Matters Section. The slides in this section are heavily annotated. Use Normal or Notes Page View to access the notes.

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

THE IDEA 4Fs: F ind a F ellow F reak F araway

Worlds Biggest Waste … Selling Up

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

THE PROCESS Summary

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]

Boss-free Selling of a WOW! Idea (cont.) 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.

Boss Advice I: The Poster Kids/ End Run/Skunks Strategy Chat up a cross-section of the Org. Develop a tentative list of Pioneers/Skunks. Hang with those Skunks, discover their stuff Ive long wanted to do list/Encourage them to Do it! Begin to showcase their developing results [with your public stamp of approval]. Dip deep[ish] and early - promote a Super Skunk into the [New] Establishment. Incorporate the Skunks work into your Vision Chatter/Welcome ALL aboard!

Boss Advice II: Starting the Hmmmmm? Buzz Event Marketing: Idea Faire/Internal Tradeshow/Bragfest. Or: Seminar Series, with strange outsiders/insiders (not the usual suspects); intense Web-based followup 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).

Boss Advice III: The Flypaper Strategy Dont try to change the culture! Create fly paper which attracts Mavericks & Pirates! Let the new culture (which is lurking around you) find you! Publicize, at the appropriate moment, the New Hall of Fame; help the New Culture Adherents create & nurture Community!

BOTTOM LINE The Enemy!

Joe J. Jones 1942 – 2001 HE WOULDA DONE SOME REALLY COOL STUFF BUT … HIS BOSS WOULDNT LET HIM!

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

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

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

Our strategies must be tied to leading edge customers on the attack. If we focus on the defensive customers, we will also become defensive. John Roth, CEO, Nortel

JY: Who do you fear most, big companies or start-ups? JC: I have a list with a dozen little companies Im tracking closely. Guys who can start with a fresh sheet of paper have an enormous advantage technologically. We have to carefully integrate new capabilities into our existing product line, they dont. Source: Cisco Unauthorized

Button-down Org H.S.D.E.. Acquire for market share Suck up to biggest customers Pursue strategic vendors Bigger is better Accept assignments as given Hire 4.0s from top schools Promote when theyve paid their dues Appoint a prestigious board Hang out with my pals R.A.F. Be professional at all times/Honor thine elders Acquire for innovation Partner with cool customers Seek out pioneering vendors Break it up … to refresh Reframe all tasks to innovate Hire intriguing, wherever Promote tomorrow if the work product is weird and WOW Appoint an interesting, headstrong board Take a freak to lunch today F.F.F. Stay loose, stay cool/The hell with thine elders

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

But dont we need some grout between the tiles?

N.W.O.: Was Is Is Pine-paneled Office Address: 1 Big Man Plaza Secretary Suit Formal Rank conscious Pretense (Failures are for fools.) I love Yes men Self-contained Seat 9B, UA233 Address: Typing: 60 WPM Casual M-F Approachable We are a HOT Team Screwing up is as normal as breathing I love Misfits! I love partners

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

Work II The Commodity Trap

Quality Not Enough! While everything may be better, it is also increasingly the same. Paul Goldberger on retail, The Sameness of Things, The New York Times

We make over three new product announcements a day. Can you remember them? Our customers cant! Carly Fiorina

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

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

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

Tomorrow Today: Cisco! 90% of $20B (=$50M/day) 75% mfg. outsourced; 50% of orders routed to supplier who ships direct Gross margin: 65%; Net margin: 28% Annual savings in service and support from customer self-management: $550M

One cannot be tentative about this. Excuses like channel conflict or marketing and sales arent ready cannot be allowed. Delay and you risk being cut out of your own market, perhaps not by traditional competitors but by companies you never heard of 24 months ago. Jack Welch [07.00/Forbes.com]Forbes.com

GE & the Web Purchasing: 2000: $6B; 2001: $15B Sales: 1999: $1B; 2000: $7B; 2001: $20B+ Source: Business 2.0 (05.01)

Weve put the word out to all of our suppliers: by the end of the year [2000] well only do purchasing over the Internet. John Paterson, C.P.O., IBM [$50B from 18,000 suppliers]

WebWorld = Everything Web as a way to run your business innards Web as connector for your entire supply-demand chain Web as spiders 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 Worlds Best at Everything as next door neighbor

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

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

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

There is no use trying, said Alice. One cant believe impossible things. I daresay you havent had much practice, said the Queen. When I was your age, I always did it for half an hour a day. Why, sometimes Ive believed as many as six impossible things before breakfast. Lewis Carroll

Inet … … allows you to dream dreams you could never have imagined before!

Message 2001: Only idiots pull in their [investment] horns during a downturn.

Brand Outside Strategy 6 : BRAND POWER!

WHO ARE YOU [these days] ? TP to Client

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

Most companies tend to equate branding with the companys marketing. Design a new marketing campaign and, voila, youre 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

Brand Promise Exercise: (1) Who Are WE? (1 page, 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!

Message: REAL Branding is personal. REAL Branding is integrity. REAL Branding is consistency & freshness. REAL Branding is the answer to WHO ARE WE? WHY ARE WE HERE? REAL Branding is why I/you/we [all] get out of bed in the morning. REAL Branding cant be faked. REAL Branding is a systemic, 24/7, all departments, all hands affair.

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

Brand Leadership Passion Rules!

You must be the change you wish to see in the world. Gandhi

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

As Ministers of The Republic of Tea, our not-so-covert mission is to carry out a Tea Revolution. Ron Rubin & Stuart Avery Gold,

Our free and open immigration policies welcome all who wish to flee the tyranny of coffee crazed lives and escape the frazzled fast paced race-to-stay-in-one-place existence that it fuels. In our tiny land, we have come to learn that coffee is about speeding up and losing sight, while tea is about slowing down and taking a look. Because tea is not just a beverage, it is a consciousness altering substance that allows for a way of getting in touch with and taking pleasure from the beauty and the wonder that life has to offer. Ron Rubin & Stuart Avery Gold,

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

Lets make a dent in the universe. Steve Jobs