Tom Peters Seminar2000: Distinct or … Extinct Tom Peters Company Royal Lancaster Hotel 1 December 2000

More at … tompeters.com Slides from this seminar. Master Presentation, for in-depth. “Cool Friends” (referenced in seminar). Discussions re this stuff. Calendar of events. Etc.

“In 25 years, you’ll probably be able to get the sum total of all human knowledge on a personal device.” Greg Blonder, VC [was Chief Technical Adviser for Corporate AT&T] [Barron’s ]

“The [old] game is over” Elliott Masie, , on Napster, file sharing, and the shift of [all?] “intellectual content” and “work” to the Internet

Pentium III 800MHz: $42,893.00/# Hermes Scarf: $1, Saving Private Ryan on DVD: $ Mercedes-Benz: $18.98 Hot-rolled steel: $0.19 Source: Fortune ( )

NOW THAT’S B-I-G! “The period will bring the single greatest change in worldwide economic and business conditions since we came down from the trees.” David Schneider & Grady Means, MetaCapitalism

“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)

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

S.A.V.

John Roth’s “Rules” [Nortel] 1. Our strategies must be tied to leading-edge customers on the attack. 2. Time cannot be sacrificed for better quality, lower cost, or even better decisions. 3. It doesn’t matter whether you develop or acquire leading technology. Our job is to provide the technology and products our customers need. 4. Success is achieved by leading change, not waiting for it. 5. We are paranoid about our leadership – willing to cannibalize our own products to maintain our edge. Source: Abridged from The Wall Street Journal ( )

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

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

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

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

“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

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

“Our ideal acquisition is a small startup that has a great technology product on the drawing board that is going to come out in six to twelve months. We buy the engineers and the next generation product. …” John Chambers, Cisco

Pentium III 800MHz: $42,893.00/# Cisco Engineer: $19, Hermes Scarf: $1, Saving Private Ryan on DVD: $ Mercedes-Benz: $18.98 Hot-rolled steel: $0.19 Source: Fortune ( )

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]

The [New] G e Way DYB.com

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

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

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

Headline: “Bank of America to Cut … 10,000 Jobs” “Middle-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%)

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

“A bureaucrat is an expensive microchip.” Dan Sullivan, consultant and executive coach

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

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

“We have transitioned from an asset-based strategy to a talent-based strategy.” Jeff Skilling, COO, Enron

Cisco, Dell = Brand-owning companies who sell Customer Satisfaction Source: David Schneider & Grady Means, MetaCapitalism [e.g.: Cisco owns 2 of 38 assembly plants]

RR on “Assetless” [J.B.] Sara Lee “The most profitable businesses in the future will act as knowledge brokers, linking insights into what’s available with insights into the customer’s individual needs and preferences.”

Advance Paradigm Data on 165,000,000 prescriptions per year; docs and insurers have access to records Reduces med errors; saves $2.88 per scrip [prescribing errors]; docs save $14,000 per year in review time Rev in ’99: $2B; $477M in ’98 Source: Business Week (09.00)

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

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

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

New Orleans April 2000: NAPM

You are the … Rock Stars of the B2B Age!

Chicago November 1999: HRMAC

“support function” / “cost center” / “bureaucratic drag” or …

Are you “Rock Stars of the Age of Talent”

Credo: W.W.P.F. “WORK WORTH PAYING FOR”

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

“P.S.F.”: Summary H.V.A. Projects (100%) Pioneer Clients WOW Work (see below) Hot “Talent” (see below) “Adventurous” “culture” Point of View (Methodology) W.W.P.F. (100%) When: Now!

The Raw Material … The WOW Project!

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

Measures –WOW! –Beauty! –Raving Fans! –Impact!

T.T.D.: Now! –List all projects –Carefully describe a “WOW Outcome” for you and the Client –Score (!) all projects on WOW, Beauty, Impact, Raving Fan-hood –Pick one project with a high combined score –Draft a one-page New Description that emphasizes WOW, Beauty, etc. –Circulate and edit … for three days –Reduce to 5 bullet points

Brand Inside Brand You: Distinct … or Extinct

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

“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

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

R.D.A. Rate: 15%?, 25%? Therefore: Formal “Investment Strategy”/ R.I.P.

“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

“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)

“The next killer application for the Internet is going to be education. Education over the Internet is going to be so big it is going to make look like a rounding error.” John Chambers

“The Main crisis in school today is irrelevance.” Daniel Pink, Free Agent Nation

“Our education system is a second-rate, factory-style organization, pumping out obsolete information in obsolete ways. [Schools] are simply not connected to the future of the kids they’re responsible for.” Alvin Toffler, Business 2.0 (09.00)

Seminar Y2K/Brand Inside Message: Distinct … or Extinct!

Invent. Reinvent. Repeat. Source: HP banner ad

Brand Inside Brand Talent: The Great War for Talent

The Case

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

“Seller’s Market”: Tomorrow’s Headline* “Molecular biologists are up 3 points, economists down 1/4, in moderate trading” *futureWEALTH, Stan Davis and Christopher Meyer

The Talent Ten

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

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

2. Greatness Only The Best!

Home Depot: 7 new growth initiatives ($20B to $100B in 5-7 years) Arthur Blank: BEST PERSON IN THE WORLD TO HEAD EACH INITIATIVE E.g.: COO of IKEA to head international expansion Ed Michaels, War for Talent ( )

3. Performance Up or out!

“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 ( )

4. Pay Fork Over!

“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 ( )

So-so plant manager, $1M per year. Pay: $110,000 plus $60,000. Top plant manager, $3-4M per year. Pay: $135,000 plus $90,000. Net: $2-3M for $50K. Source: Ed Michaels et al., The War for Talent, re Georgia Pacific

5. Youth Grovel Before the Young!

“The Rise of the Teen Guru” “They’re brilliant, ambitious, and almost intuitively gifted at technology. A new generation of whiz kids are gaining unprecedented power and authority.” Source: Cover story, Brill’s Content, 7-8/00

“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 ( )

6. Diversity Mess Rules!

“Where do good new ideas come from? That’s simple! From differences. Creativity comes from unlikely juxtapositions. The best way to maximize differences is to mix ages, cultures and disciplines.” Nicholas Negroponte

“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

7. Women Born to Lead!

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

“On average, women and men possess a number of different innate skills. And current trends suggest that many sectors of the twenty- first-century economic community are going to need the natural talents of women. Helen Fisher, The First Sex: The Natural Talents of Women and How They are Changing the World

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

Women’s 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

“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

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

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)

8. Weird The Cracked Ones Let in the Light!

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

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!

9. Opportunity Make It an Adventure!

“H.R.” to “H.E.D.” ??? Human Enablement Department

“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”

10. Leading Genius We are all unique!

One size NEVER fits all. One size fits one. Period.

44 Players = 44 Projects = 44 different success measures

Insights from 80,000 managers: “People don’t change much. “Don’t waste time trying to put in what was left out. “Try to draw out what was left in. “That is hard enough.” Source: Marcus Buckingham & Curt Coffman, First, Break All the Rules: What the World’s Greatest Managers Do Differently

Employee retention & satisfaction: Overwhelmingly, based on their immediate manager! Source: Marcus Buckingham & Curt Coffman, First, Break All the Rules: What the World’s Greatest Managers Do Differently

Managing: “The people thing” [Inspire one] [Cool!] Leading: “The vision thing” [Inspire all] [Cool!]

Mantra2000 Talent = Brand

Brand Inside Brand Action: Getting Started … a Personal Perspective

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

“This is all I ‘know’ in the world!” Tom Peters

I. THE IDEA “4Fs”: F ind a F ellow F reak F araway

Heart of the Matter F2F!* *Freak to Freak … or K2K [Kook to Kook]

World’s Biggest Waste … Selling “Up”

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

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

Is It … “The Oh-Shit-I-Wish-It-Were- Over employee picnic” or “The First Annual S eriously Cool C elebration of Our Incredible Staff”

Is It … Wrestle the damn Safety Manual into line with the ridiculous new safety 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?

Is It … Fix these bloody customer problems that have cropped up with the new 2783B? Or … A chance to work with a hotshot, young division GM on … using the Internet/Internet Speed to revisit the entire process of how we get customer input – before and during the fact – into the heart of the Product Design Process?

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!

III. THE SOFT STUFF Connect!

Message: It’s Community Organizing, stupid! See: Saul Alinsky’s Rules for Radicals

IV. BOTTOM LINE The Enemy!

Epitaph from Hell … Joe T. Jones 1942 – 2000 HE WOULDA DONE SOME REALLY COOL STUFF BUT … HIS BOSS WOULDN’T LET HIM!

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

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

Reprise: Brand Inside The White Collar Revolution & The Web [DYB.com!] PSF as Building Block [Work Worth Paying For!] Work Worth Paying For = WOW Projects! Brand You [Everybody!] The Great War for Talent! Boss-free Implementation of STM! [F2F]

New Economy: Was-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

Renewal = The Weird 10 = The “High S.D.” Enterprise/Individual Pioneer [Weird] Acquisitions Pioneer Customers & Alliance Partners [Measure the Portfolio’s S.D.] Divide & Conquer/“Sell-by” [Lessons from the Bees, Sir Richard, Gary H.] Pioneer Assignments/Pioneer Projects [F2F & K2K] 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 Failures] Re-enforce a “Culture of Disrespect”/Piracy

“Enormous sums of money are invested to reduce cycle time, improve quality, reengineer … Much of this money is simply wasted. The waste is due to companies’ inability to develop wide-angle vision and tap into the … power of the edge.” Wayne Burkan, Wide Angle Vision: Beat the Competition by Focusing on Fringe Competitors, Lost Customers, and Rogue Employees

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

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

Work II The Commodity Trap

Quality Not Enough! “Quality as defined by few defects is becoming the price of entry for automotive marketers rather than a competitive advantage.” J.D. Power

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 can’t!” 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

The “10X/10X Phenomenon” 10 Times Better/ 10 Times Less Different

Brand Outside Strategy 1 : Lead the Customer!

“If you worship at the throne of the voice of the customer, you’ll get only incremental advances.” Joseph Morone, President, Bentley College

“These days, you can’t succeed as a company if you’re consumer led – because in a world so full of so much constant change, consumers can’t anticipate the next big thing. Companies should be idea- led and consumer- informed.” Doug Atkin, partner,Merkley Newman Harty

“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

“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

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.’ ”

Brand Outside Strategy 2 : Use E-Commerce to Re-invent Everything!

OVERVIEW

/0521[GMT]: 2,461,940,629

/0657[GMT]: 3,136,174,822

90 days, 12 hours, 59 minutes … +674,234,193

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

Enron: $400B in annual on-line trading transactions. [50% total bus.] Much stimulated by the Web per se. Schwab: $25B per week in asset transactions [80% of trades] [Transition to e.Schwab: Rev. fell, then quickly doubled]

W.W. Grainger* 2X phone/fax *$220B “MRO” market (per Business 2.0/02-00)

COMMUNITY SERVICES!/ CUSTOMER CONTROL!

Tomorrow Today: Cisco! 90% of $20B; save $550M C.Sat e >> C.Sat H Customer Engineer Chat Rooms/Collaborative Design ($1B “free” consulting) (45,000 customer problems a week solved via customer collaboration)

Cisco’s Secret Trust (Openness to partners!!!!!)

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

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

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

Shop in your Underwear Source: SM’d logo for ae = American Eagle Outfitters

“The Web enables total transparency. People with access to relevant information are beginning to challenge any type of authority. The stupid, loyal and humble customer, employee, patient or citizen is dead.” Kjell Nordstrom and Jonas Ridderstrale, Funky Business

“The concept of being always on, always connected, is very powerful. … Companies are going to need to reach consumers across all the different transmission media and devices – across wireless, on cell phones, into cars, onto airplanes, into cabs, into the home and TV set. … It’s not just the message – now you’ve got a connection, what do you do with that?” Marc Andreessen [Mosaic, Netscape, Loudcloud]

“In the network economy, the Website becomes the company’s primary interface to the customer. The user interface becomes the marketing materials, store front, store interior, sales staff and post- sales support all rolled into one.” Jakob Nielsen, Designing Web Usability

“Most companies would do more business on the Internet if they fired their entire marketing department and replaced it with people who could produce interactive content that actually made it easier for users to buy.” Jakob Nielsen, Nielsen Norman Group

SWA Simple!!!!!!!!!!!! (customers call because the process is so easy they can’t believe they’re done) 30% of revenues directly from site (vs. 6% for others) Source: Business Week (09.00)

RADICAL STRATEGIES REQUIRED

“One cannot be tentative about this. Excuses like ‘channel conflict’ or ‘marketing and sales aren’t 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

ACT NOW, ACT FAST, KEEP ACTING

“It’s better to be first with less than last with more. Success on the Web isn’t just about time to market, it’s also about ‘time to learning.’ ” Jeff Levy, eHatchery

SUMMARY: REINVENT EVERYTHING

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

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.

“The network becomes the social structure of everything.” Manuel Castells, UC Berkeley, The Information Age: Economy, Society and Culture

A DREAMER’S MEDIUM!

“There is 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

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

“Banking is necessary. Banks are not.” Dick Kovacevich, Wells Fargo

Brand Outside Strategy 3 : Fighting Back via Systems Integration!

THE CASE

B2B 1999 – 2004: 50X 2004: $7.4 T Source: GartnerGroup (per Reuters )

GM/Ford/DaimlerChrysler (02-27) Covisint $240B (+$500B) I.P.O.

Goal? Drive profits to zero!* *Remember AMR and “dynamic pricing.”

Message: “BOX” SELLERS LOSE!

THE RESPONSE

Message: Racing up the V.A. Ladder. Doing More & More … & More & More & More … for/with the Customer and the Supply-Demand Chain!

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

ENRON operates networks throughout the world to develop and enhance energy and broadband communication services. Networks, unlike vertically integrated business structures, facilitate the flow of information and expertise. We can spot market signals faster and respond more quickly. Networks empower individuals, freeing them to craft innovative and substantive solutions to customer problems. Networks are the foundation of our knowledge-based businesses, and they provide exceptional returns and value for our shareholders.’ from the 2000 Annual Report

Master Puppeteers [Read: “Networkers”] Holland Inc. Britain Inc. The Rothchilds Alexander Hamilton OSS/MI5/CIA/KGB Roman Catholic Church Cargill Japanese Trading Houses Sam Walton Bill Gates Michael Dell ENRON!

: HP bids $18,000,000,000 for PricewaterhouseCoopers Consulting bus! (31,000 bods)

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

Message: WHAT IS THE “VALUE [ADDED] PROPOSITION”?

Brand Outside Strategy 4 : Design Matters!

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

“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

Message: “Great - Cool Stuff” Matters. Great & Cool Trumps Not-So-Great & Ho Hum!

Message iMac: “Great Stuff” Takes Guts!!

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

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

Lady Sensor, Mach3, and … $70M on developing the OralB CrossAction toothbrush 23 patents, including 6 for the packaging Source: [06.00]

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

I LOVE my ZYLISS Garlic Peeler!

Design “is” … WHY I GET MAD. MAD.

Wanted: Dead [preferably] or Alive: THE DESIGNER OF MY TANDY PORTABLE PHONE. Major Reward!

Design is never neutral.

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

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.

Design Rules! [Literally] Palm Beach County’s U.C.B. * [*Utterly Confusing Ballot]

Brand Outside Strategy 5 : It’s the Experience!

“ 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

“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

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

“Car designers need to create a story. Every car provides an opportunity to create an adventure. … “The Prowler makes you smile. Why? Because it’s focused. It has a plot, a reason for being, a passion.” Freeman Thomas, co-designer VW Beetle; designer Audi TT

Hmmmm(?): “Only” Words … Story Adventure Smile Focus Plot Passion

Plot Williams Sonoma = 5 [was 10] Crate & Barrel = 8 Sharper Image = 9+ Smith & Hawken = 8+ Garnet Hill = 9 L.L. Bean = 4 [was 9+] Colonial Williamsburg = ?

The “Experience Ladder” Experiences Services Goods Raw Materials

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

Extraction & Goods: Male dominance Services & Experiences: Female dominance

Brand Outside Strategy 6 : Women Rule!

????????? Home Furnishings … 94% Vacations … 92% Houses … 91% Bank Account … 89% Health Care … 80% Consumer Electronics … 51% Cars … 50%+/80% Etc.

48% working wives > 50% 80% checks 61% bills 53% stock (mutual fund boom) 43% > $500K 95% financial decisions/ 29% single handed

Women … 50+% (!!!) of Web users; 6 of 10 new users; 83% of wired women are primary decision makers for family healthcare, finances, education. Source: Business Week; Jupiter Communications

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

Yeow! 1970 … 1% 2002 … 50%

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

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

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.”

“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!)

Women and Healthcare Women are … more dissatisfied, frustrated by the way they are treated and spoken down to by physicians, seek more information, are more pressed for time … and make 75% of health care decisions and control 2/3 of health care $$$$ [and constitute 2/3 of health care employees]. Source: Patricia Braus, Marketing Healthcare to Women

Women and Financial Advisors Women want … a plan, to be listened to, to be taken seriously, to read about it, to think about it. Women do not want … an in-your-face sales pitch Source: Kathleen Boyle, Wheat Boyle Butcher Singer

“Women Beat Men at Art of Investing” Source: Miami Herald, reporting on a study by Profs. Terrance Odean and Brad Barber, UC Davis (Cause: Guys are “in and out” of stocks more often; women choose carefully and hold on for the long term)

Marketing to Women: Help Them Save Time! 80% … work 86% … cook 58% … run errands with kids 38% … take child to school 21% … go to the gym 21% … take outside classes

How Many Gigs You Got, Man? “Hard to believe … Different criteria” “Every research study we’ve done indicates that women really care about the relationship with their vendor.” Robin Sternbergh/ IBM

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

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

“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

Weight Watchers International “Model” “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

“Women don’t buy brands. They join them.” Faith Popcorn, EVEolution Faith Popcorn

Not!! “Year of the Woman”

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

“What kind of car does Mommy want?”

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

“I didn’t know [company] were giving company cars to secretaries.” Source: UK financial services CEO, 12/99

THIS JUST MIGHT BE THE BIGGEST “THING” IN THIS SEMINAR. [PLEASE: THINK ABOUT IT!]

Psssst! Wanna see my “porn” collection?

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!”

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 Altan … THIS IS EVEN BIGGER THAN THE INTERNET! Tom Peters

“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

Speaking of Enormous [Missed] [Huge] Opportunities...

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

Subject: Marketers & Stupidity Or is it: is stupid, stupid!

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

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

Priorities: Aging/“Elderly” Experiences … Convenience … Comfort … Access … Respect!

“Such a critical mass of older women with a tradition of rebellion and independence and a way of making a living has not occurred before in history.” Gerda Lerner, historian

Brand Outside Strategy 7 : Embracing an Age of Self-Determination

The Individual

“You are the storyteller of your own life, and you can create your own legend or not.” Isabel Allende

The Organization: Seller’s [Talent] Market

“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 ( )

The Market: Fighting Sameness with Distinction

“These days, you can’t succeed as a company if you’re consumer led – because in a world so full of so much constant change, consumers can’t anticipate the next big thing. Companies should be idea- led and consumer- informed.” Doug Atkin, partner, Merkley Newman Harty

Web World: POWER TO THE PEOPLE

The control revolution. The potentially monumental shift in control from institutions to individuals made possible by new technology such as the Internet. The conflict over such change between individuals and powerful entities (governments, corporations, the media). Source: Introduction, The Control Revolution, Andrew Shapiro

Women Get Respect … and Take Charge

“Greater opportunity for women is probably the most significant gain for human freedom in the last century.” Andrew Sullivan, The New Republic

The Elderly Get Respect … and Take Charge

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

Our Biggest Industry: The Patient Takes Charge

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

“Online Medical Records Seen Empowering Patients” Source: Headline, Boston Globe, , re 1K docs and 700K CareGroup

1965: “ ‘Doctor’ will see you now. ‘Doctor’ will take care of you.” YES, NURSE. ME GOOD PUPPY DOG. 1995: “HMO will take care of you.” BULLSHIT. 2005: “I will take care of me. I’d like your expert help.”

The Poor Get Respect

Grameen Bank/Bangladesh “It’s not people who aren’t credit- worthy. It’s banks that aren’t people worthy.” $2.3B to 2.3M [typical 1 st loan: $15.] 98% recovery rate [94% to women!] 1/3 rd out of poverty; 1/3 rd up to non- poverty threshold Muhammad Yunus, Banker to the Poor

“The Grameen loan is not simply cash. It becomes a kind of ticket to self-discovery and self-exploration.” Muhammad Yunus

Sooooo … Is your strategy centered around customer-client empowerment & self- determination? Hint: This means letting go of traditional sources of power!

Brand Outside Strategy 8 : BRAND POWER!

Brand It! Now, More Than Ever! “The increasing difficulty in differentiating between products and the speed with which competitors take up innovations will assist in the rise and rise of the brand.” Gillian Law and Nick Grant, Management [New Zealand]

“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

Brand = You Must Care! “Success means never letting the competition define you. Instead you have to define yourself based on a point of view you care deeply about.” Tom Chappell, Tom’s of Maine

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

“In the funky village, real competition no longer revolves around marketshare. We are competing for attention – mindshare and heartshare.” Kjell Nordstrom and Jonas Ridderstrale, Funky Business

Brand = Special = Passion = Plot = Compelling Mythology = Cause = Connection = Heart = Integrity & Trust

Rules of “Radical Marketing” Love + Respect Your Customers! Hire only Passionate Missionaries! Create a Community of Customers! Celebrate Craziness! Be insanely True to the Brand! Sam Hill & Glenn Rifkin, Radical Marketing (e.g., Harley, Virgin, The Dead, HBS, NBA)

T.T.D./Calling the Corporate Shrink! “Organizational Psychotherapy”/ WHO WE ARE!

T.T.D.: “How can I know what I think till I see what I say”* Exercise : Write copy for a bookmark! (Etc.) *Graham Wallas, The Art of Thought

What Can [Can’t] Be Branded? “Branding is not a problem if you have the right mentality. You go to your team and you pin up a $200 Swiss Army Watch. Competing in the ridiculously crowded sub-$200 watch market, they made it into a brand name, named after the most irrelevant and useless thing in history [the Swiss Army]. And you say, ‘Gang, if they can do it, we can do it.’ ” Barry Gibbons

Brand Outside Reprise: Wimps & Weenies Need Not Apply!

Beyond Ordinary: The Eight Strategies Pursue Pioneering [WEIRD] Customers! Re-invent via E-commerce & the Web! Become a Master Puppeteer/ Scramble up the V.A. Chain! Embrace Design! Emphasize the Total Experience! Seek Out “Opportunity #1”! [& #1A] Cede Control! Become Brand-obsessed!

Lead the Customer: Why Tough Guts! Failures!

Re-invention via ecommerce: Why Tough Total commitment to total enterprise [and supply chain] reinvention!

Systems Integration: Why Tough Completely new view of what a “product” is.

Design: Why Tough True-believer-dom-ship Encompassing/Cultural

Ing-ing/Experience: Why Tough Total Reorientation

Women’s Market: Why Tough Encompassing Attitude CULTURAL!

Self-Determination: Why Tough Cede Control

Brand Power: Why Tough Way of Life Forever! Passion Rules! Touches Everything! It Am Me [Personal!]

Message : Not for the Faint of Heart!

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

Brand Leadership Passion Rules!

“Leadership is a performance. You have to be conscious of your behavior, because everybody else is.” Carly Fiorina

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

Brand Leadership! “A key – perhaps the key – to leadership is the effective communication of a story.” Howard Gardner Leading Minds: An Anatomy of Leadership

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

“A leader is a dealer in hope.” Napoleon

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

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

Tom Peters SeminarY2K Message: Distinct … or Extinct!

Have you changed civilization today? Source: HP banner ad