Tom Peters’ New Old Basics 9 June 2008

Lessons Learned 42/ Lessons Learned 42/

Lessons Learned 42/ **Decentralization **Accountability **Wild-ass imagination **Human development **XFX (Cross-functional Excellence) **Untapped Markets **Value-added fanaticism **Base Principles I **Base Principles II **Base Principles III **Leadership Lessons Learned 42/ **Decentralization **Accountability **Wild-ass imagination **Human development **XFX (Cross-functional Excellence) **Untapped Markets **Value-added fanaticism **Base Principles I **Base Principles II **Base Principles III **Leadership

Decentralization USA: Constitution, 50 states, immigrant nation (>50% Silicon Valley), independent-minded (students ”no respect teachers”), entrepreneurial, Energizer Bunny (Zakaria—1960/26%, 1980/22%, 2000/27%, 2007/26%), pragmatic (Rommel), relatively unregulated market economy Research via wildly competitive universities William Easterly, economic development (“trust the development experts —all seven billion of them”) J&J/DePuy (Decentralization as decentralization was meant to be) More “statistically independent tries” (if “independent” holds) Focus! (Focus pays.) “Economies of scale” run out (much) earlier than we think Focus: on the “lowest operating unit”: retail store-district; union and 250- person distribution center, call center; parish Spread ideas via “go see this-these demos” (infection through “best practices” rather than central edict); innovation by prototyping anywhere and everywhere (e.g., “the 1% rule”); innovation by “parallel universe” (mgt ed new via autonomous exec ed “division”—main body conservative- recalcitrant; Jill Ker Smith—new money sources for new people and new programs) “You own the damn place; no bullshit excuses” (i.e., Major Consequences —up & down) “No such thing as ‘Scalability’” Limits to “synergy” Power of “no” (Jim Burke Rule—e.g., no centralization following screw-up, in 9 of 10 cases, even after major boo-boo) “‘Decentralization’ is not a piece of paper. It’s not me. It’s either in your heart, or not.”—Brian Joffe/BIDvest

Accountability “30%-80% rule”—own your budget (Mark Hurd-HP) Make a promise keep a promise (GE, Milliken) Optimism but honesty No: “Kill the messenger” Transparency Starts at the top!!!!!!!! (Bob Gates and Walter Reed-USAF) Fragile??? Clear expectations at the time of hiring Self-responsibility Decency-culture of respect

Wild-ass imagination “Dubai rule” Hang out with freaks as a matter of course (lead customers, small-but-hot vendors, odd backgrounds, etc, etc—more or less measured) Wee “cool” acquisitions (hold on to founders at all costs—Disney and Pixar and Jobs on Board; Cisco) Measure division-level bosses on “crazy-assed experiments” (plus Wexner Rule— no screw-ups is Black Mark); and Daniels Rule—”Reward excellent failures, punish mediocre successes” (!!!) Failure tolerated-encouraged (“He who makes the most mistakes wins”) 5-year Blockbuster Initiatives with major consequences (Demo-driven) Diversity for creativity (bottom to top) Decentralization with teeth Accountability (“Dreamers with deadlines”) World-class research universities Government support for R&D (computers, Internet, biotech) Wild-ass imagination “Dubai rule” Hang out with freaks as a matter of course (lead customers, small-but-hot vendors, odd backgrounds, etc, etc—more or less measured) Wee “cool” acquisitions (hold on to founders at all costs—Disney and Pixar and Jobs on Board; Cisco) Measure division-level bosses on “crazy-assed experiments” (plus Wexner Rule— no screw-ups is Black Mark); and Daniels Rule—”Reward excellent failures, punish mediocre successes” (!!!) Failure tolerated-encouraged (“He who makes the most mistakes wins”) 5-year Blockbuster Initiatives with major consequences (Demo-driven) Diversity for creativity (bottom to top) Decentralization with teeth Accountability (“Dreamers with deadlines”) World-class research universities Government support for R&D (computers, Internet, biotech)

Human development “Cathedral model” (“This is what we do”) WPP Mission HR (GE model); Chief Human Development Officer (post-cop world) “You will be measured on Human Development Effectiveness” (e.g., how many folks go on to be promoted at least two levels, or are headhunted) Resilience—XP/eXtreme Preparation (Black Swan world) “Character” MBQ (Management By Quest) Project structure—PM leadership early Commitment to decency—premium on thoughtfulness Squint test (diversity, top team “looks like” customer base) Go for the “people people” (emphasize intangibles!!) “Putting the customer second” Goal: “greatest places to work” recognition Servant leadership Human development “Cathedral model” (“This is what we do”) WPP Mission HR (GE model); Chief Human Development Officer (post-cop world) “You will be measured on Human Development Effectiveness” (e.g., how many folks go on to be promoted at least two levels, or are headhunted) Resilience—XP/eXtreme Preparation (Black Swan world) “Character” MBQ (Management By Quest) Project structure—PM leadership early Commitment to decency—premium on thoughtfulness Squint test (diversity, top team “looks like” customer base) Go for the “people people” (emphasize intangibles!!) “Putting the customer second” Goal: “greatest places to work” recognition Servant leadership

XFX (Cross-functional Excellence) Constant reinforcement with major rewards, punishments (Puckett, Robinson) Constant reinforcement with major rewards, punishments (Puckett, Robinson) Mundane tactics > Edict (% lunches) Mundane tactics > Edict (% lunches) MBWA-demo-”best practices” > Edict “The way we do things around here” (focus on operating unit) Manage conflict with decentralization—artistry Reward “what the hell does he do all day” sorts Customer-centric Departments (PSF model; prove your worth, serve your MBWA-demo-”best practices” > Edict “The way we do things around here” (focus on operating unit) Manage conflict with decentralization—artistry Reward “what the hell does he do all day” sorts Customer-centric Departments (PSF model; prove your worth, serve your customers or else, principal engines of value added) customers or else, principal engines of value added) “Partnerships Model” (PSF and internal customers—measure satisfaction; “Partnerships Model” (PSF and internal customers—measure satisfaction; union boss and facility boss; vendor-customer teams; sales and client teams “Friends in low places” union boss and facility boss; vendor-customer teams; sales and client teams “Friends in low places” Power Nudges (e.g., facilities management) Power Nudges (e.g., facilities management) Transparency! Transparency! Everything on the Web Everything on the Web

Untapped Markets Big Two!!!!!! (Strategic-level enterprise-organizing principle) She is your customer! (So she’d better be your boss!) She is your customer! (So she’d better be your boss!) Old Farts Rule! And will rule for the next quarter century! (Welcome to Old Farts Rule! And will rule for the next quarter century! (Welcome to Boomer-Geezer Time!) Boomer-Geezer Time!)

Value-added Fanaticism TGR > TGW (experience) (emphasis on “little touches”—“the case of the 2-cent TGR > TGW (experience) (emphasis on “little touches”—“the case of the 2-cent candy”) candy”) Customer Success >>>> Customer Satisfaction Customer Success >>>> Customer Satisfaction Schlumberger-IBM-UPS (“We are bold integrated services provision”) (HP-EDS) Schlumberger-IBM-UPS (“We are bold integrated services provision”) (HP-EDS) PSF structure PSF structure Design driven nation (Korea!), “we are design” (Apple) Design driven nation (Korea!), “we are design” (Apple) Ladder (Raw materials-Goods-Services-Solutions-Experience-Dreams come Ladder (Raw materials-Goods-Services-Solutions-Experience-Dreams come true-Lovemark) true-Lovemark)

Base Principles I “Try It”

Base Principles II “Try It” Decentralization MBWA Excellence Decentralization MBWA Excellence Servant leadership Servant leadership

Base Principles III “Try It” Decentralization O.O.D.A. (tempo, “metabolic management”, speed-of-light prototyping) MBWA/“Walk” (25 Rule, 60-call Rule, 3K5M Rule, Texas Bix Bender Rule) Excellence (“I’ll know it when I see it”; no non-excellence—Watson Rule; > OpX) Decentralization O.O.D.A. (tempo, “metabolic management”, speed-of-light prototyping) MBWA/“Walk” (25 Rule, 60-call Rule, 3K5M Rule, Texas Bix Bender Rule) Excellence (“I’ll know it when I see it”; no non-excellence—Watson Rule; > OpX) Women as key leadership-senior leadership source, masters of implementation Women as key leadership-senior leadership source, masters of implementation (Yunus), primary market (Yunus), primary market Decency-respect-transparency K.I.S.S. (Pronovost Model—check list; Bossidy Model—sum of projects equals promise, etc; “Beautiful Systems) We are all in Sales around here! Decency-respect-transparency K.I.S.S. (Pronovost Model—check list; Bossidy Model—sum of projects equals promise, etc; “Beautiful Systems) We are all in Sales around here! Cool is cool (design primacy) We thrive on ambiguity Execution > Strategy (“Execution is strategy”) (Drucker) Cool is cool (design primacy) We thrive on ambiguity Execution > Strategy (“Execution is strategy”) (Drucker) Execution > “Great leaders” (“Execution is leadership”) (Drucker) Execution > “Great leaders” (“Execution is leadership”) (Drucker) Servant leadership—”Cathedral Model” You could do worse than In Search of Excellence (People. Customers. Servant leadership—”Cathedral Model” You could do worse than In Search of Excellence (People. Customers. Action. Entrepreneurial spirit. Values. Focus. K.I.S.S.) Action. Entrepreneurial spirit. Values. Focus. K.I.S.S.)

Leadership +21L = -21L +21L = -21L MBWA MBWA Excellence Excellence Servant leaders Servant leaders