Tom Peters’ Seminar2002 We Are In A Brawl With No Rules! ISMA/I.D.A./

All Slides Available at … tompeters.com Note: Lavender text in this file is a link.

CONTEXT

The Destruction Imperative.

“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

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

“Good management was the most powerful reason [leading firms] failed to stay atop their industries. Precisely because these firms listened to their customers, invested aggressively in technologies that would provide their customers more and better products of the sort they wanted, and because they carefully studied market trends and systematically allocated investment capital to innovations that promised the best returns, they lost their positions of leadership.” Clayton Christensen, The Innovator’s Dilemma

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

A White Collar Revolution.

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

E.g. … Jeff Immelt: 75% of “admin, back room, finance” “digitalized” in 3 years. Source: BW ( )

IBM’s Project eLiza!* * “Self-bootstrapping”/ “Artilects”

“Unless mankind redesigns itself by changing our DNA through altering our genetic makeup, computer- generated robots will take over the world.” — Stephen Hawking, in the German magazine Focus

IS/IT/Web … “On the Bus” or “Off the Bus.”

100 square feet

The Real “News”: X1,000,000 TowTruckNet.com

Impact No. 1/ Logistics & Distribution: Wal*Mart … Dell … Amazon.com … Autobytel.com … FedEx … UPS … Ryder … Cisco … Etc. … Etc. … Ad Infinitum.

Autobytel: $400. Wal*Mart: 13%. Source: BW( )

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

RESPONSE

The Heart of the Value Added Revolution: The “Solutions Imperative.”

“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 Big Day!

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

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

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

“Customer Satisfaction” to “Customer Success” “We’re getting better at [Six Sigma] every day. But we really need to think about the customer’s profitability. Are customers’ bottom lines really benefiting from what we provide them?” Bob Nardelli, GE Power Systems

Keep In Mind: Customer Satisfaction versus Customer Success

Gerstner’s IBM: Systems Integrator of choice. Global Services: $35B. Pledge/’99: Business Partner Charter. 72 strategic partners, aim for 200. Drop many in-house programs/products. (BW/12.01).

“UPS wants to take over the sweet spot in the endless loop of goods, information and capital that all the packages [it moves] represent.” ecompany.com/06.01 (E.g., UPS Logistics manages the logistics of 4.5M Ford vehicles, from 21 mfg. sites to 6,000 NA dealers)

“No longer are we only an insurance provider. Today, we also offer our customers the products and services that help them achieve their dreams, whether it’s financial security, buying a car, paying for home repairs, or even taking a dream vacation.”—Martin Feinstein, CEO, Farmers Group

“VISIONS OF A BRAND-NAME OFFICE EMPIRE. Sam Zell is not a man plagued by self doubt. Mr. Zell controls public companies that own nearly 700 office buildings in the United States. … Now Mr. Zell says he will transform the real estate market by turning those REITs into national brands. … Mr. Zell believes [clients] will start to view those offices as something more than a commodity chosen chiefly by price and location.”— New York Times ( )

Omnicom: 57% (of $6B) from marketing services

Message: Eat Or Be Eaten.

Who was the number one employer of architecture school grads in the U.S. last year?

The Solutions Mentality: Think … 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

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

“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

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

Message: “Experience” is the “Last 80%” P.S.: “Experience” applies to all work!

The “Experience Ladder” Experiences Services Goods Raw Materials

Ladder Position Measure Solutions Success (Experiences) Services Satisfaction Goods Six-sigma

It all adds up to … THE BRAND.

“WHO ARE WE?”

“Most companies tend to equate branding with the company’s marketing. Design a new marketing campaign and, voilà, you’re 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 Jesper Kunde

“WHAT’S OUR STORY?”

“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

“EXACTLY HOW ARE WE DRAMATICALLY DIFFERENT?”

1 st Law Mktg Physics: OVERT BENEFIT (Focus: 1 or 2 > 3 or 4/“One Great Thing.” Source #1: Personal Passion) 2 ND Law: REAL REASON TO BELIEVE (Stand & Deliver!) 3 RD Law: DRAMATIC DIFFERENCE Source: Jump Start Your Business Brain, Doug HallDoug Hall

2 Questions: “How likely are you to purchase this new product or service?” (95% to 100% weighting by execs) “How unique is this new product or service?” (0% to 5%*) *No exceptions in 20 years – Doug Hall, Jump Start Your Business Brain

“WHY DOES IT MATTER TO THE CLIENT?”

“EXACTLY HOW DO I PASSIONATELY CONVEY THAT DRAMATIC DIFFERENCE TO THE CLIENT ?”

Brand = Talent.* *Duh.

Model 25/8/53 Sports Franchise GM

“The leaders of Great Groups love talent and know where to find it. They revel in the talent of others.” Warren Bennis & Patricia Ward Biederman, Organizing Genius

From “1, 2 or you’re 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 Ed Michaels

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

Redefining the Work Itself I: The WOW Project.

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

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

BOTTOM LINE: LEADING IN TOTALLY SCREWED- UP TIMES

G.H.: “Create a ‘cause,’ not a ‘business.’ ”

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

Thank You!