The Excellence Dividend: Fundamentals

The Excellence Dividend: Fundamentals
Tom Peters’ The Excellence Dividend: Fundamentals (Heavily annotated) 24 October 2018 (This presentation/10+ years of presentation slides at tompeters.com; also see our annotated 23-part Monster-Master at excellencenow.com) 1 1

Dr. D.A. Henderson, who led the international effort to eradicate smallpox, was asked what he wanted to eradicate next. His answer … Source: Sabin Vaccine Institute

Dr. D.A. Henderson, who led the international effort to eradicate smallpox, was asked what he wanted to eradicate next. His answer: “Bad management.” Source: Sabin Vaccine Institute

World’s #1 Problem!? (Wow.)

70%, 85%, 87%

Explanation to come … 6

FIRST THINGS BEFORE FIRST THINGS: THE SHOWER CURTAIN SAGA
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E-X-E-C-U-T-I-O-N: THE ALL-IMPORTANT “LAST 95%”
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The number “95” is chosen with great care.

CONRAD HILTON, at a gala celebrating his career, was called to the podium and asked, “What were the most important lessons you learned in your long and distinguished career?” His answer … 10 10 10

“Remember to tuck the shower curtain inside the bathtub.”
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In the hotel business, “location location location” (and a great architect and a glitzy marketing campaign) matter, they entice me through your door— but it’s the tucked in shower curtain that brings me back and induces me to recommend your home-away-from-home to my “live” and social media friends. And as businesspeople know so well, you lose money on the 1st transaction and roll in the $$$ on #18, #19, #20 … and via that vital word of mouth/touch screen. (And what holds for hotels holds, well, universally.) (And of course, anticipating my coming, intense riff on people [REALLY] first, this elevates enormously the attention, love and care we should shower, as it were, upon our cadre of shower-curtain-tuckers! ) (NOTE: I thrive on tailoring my presentations. With one exception. The tucked in shower curtain has come 1st in every presentation I’ve given in the last half dozen years!) 12

“Amateurs talk about strategy. Professionals talk about logistics.”
EXECUTION: The All-Important “Last 95%” “Amateurs talk about strategy. Professionals talk about logistics.” —General Omar Bradley, commander of American troops/D-Day

“EXECUTION IS THE JOB OF THE BUSINESS LEADER
“EXECUTION IS THE JOB OF THE BUSINESS LEADER.” —Larry Bossidy & Ram Charan/Execution: The Discipline of Getting Things Done 14

Larry Bossidy, former GE Vice-chairman and then CEO of Allied, may have written the 1st book with the simple title … EXECUTION. Why 10,000 books on accounting or marketing … and ONE on EXECUTION? God alone knows. I surely don’t. The point of the previous slide, from Execution: “Execution” isn’t “the grunt work” to be overseen by others—a “culture of execution-accountability” starts at the tippy top, and must be the relentless, visible concern of the CEO and her/his top lieutenants. (FYI: Bossidy’s book is superb! ) 15

THE IRON LAW OF EXECUTION
When you talk all the time about execution, it’s likely to happen. When you don’t, it doesn’t. Q: “Could it be this simple?” A: “To a significant degree, yes.”

Q: “Could it be this simple?”
A: “To a significant degree, yes.” This in fact translates into a practical action item; and starts … today. Monitor and assess your conversations and meetings: Is the execution/implementation/who-what-when-next milestones discussion front and center and dominant and committed to paper and re-iterated more or less immediately in follow-up written communications? In the next presentation you view, is implementation front/center/dense—or a coupla “Next steps” slides at the end?

PEOPLE! SERVICE! EXCELLENCE!
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The EXCELLENCE Dividend:
Tom Peters’ The EXCELLENCE Dividend: The Business of Business Is PEOPLE Serving PEOPLE Serving PEOPLE 24 October 2018 20 20

This section is a … RANT … pure and simple
This section is a … RANT … pure and simple. It’s been 40 or so years in the making. The story line, in my view, could not be more straightforward. And yet these ideas, this de facto approach, is honored in the breach far more frequently than not—far far far more frequently. I’ve had it up to my ears. I want to know: WHY NOT??? Of course I know why to a certain extent—the “MBA-ing” of business, business reduced to cold logic rather than warm bodies. So, yes, a rant, and here goes … 21

70%, 85%, 87%

70%, 85%, 87%* = Shame on Us!! *% of people who dislike their job, are not engaged at work, unhappy, “sleepwalking,” etc. (These numbers are extraordinarily consistent around the world.) Source: Inc., Gallup, Washington Post, etc.

Indeed: SHAME ON YOU/ME/US
Indeed: SHAME ON YOU/ME/US! That is, this is de facto a brutal condemnation of the vast majority of managers/“leaders.” (A leader cannot make heaven out of hell—but it is her/his duty to die trying.) (And this is, make no mistake, a slap in the face for those of us who have tried to make things better—and, it would appear, have a pitiful track record.) 24

Given/Axiomatic … THERE IS NO EXCUSE FOR NOT
MAKING ANY ORGANIZATION OF ANY SIZE IN ANY BUSINESS A … GREAT PLACE TO WORK EVERY LEADER/2018 HAS A MORAL OBLIGATION TO DEVELOP PEOPLE SO THAT WHEN THEY LEAVE THEY ARE BETTER PREPARED FOR [CRAZY] TOMORROW THAN THEY WERE WHEN THEY ARRIVED.

NO EXCUSE. MORAL OBLIGATION.
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How We Built a Workplace People Love
“It may sound radical, unconventional, and bordering on being a crazy business idea. However— as ridiculous as it sounds—joy is the core belief of our workplace. Joy is the reason my company, Menlo Innovations, a customer software design and development firm in Ann Arbor, exists. It defines what we do and how we do it. It is the single shared belief of our entire team.” —Richard Sheridan, Joy, Inc.: How We Built a Workplace People Love

As tough an industry as there is. And “it” [JOY AT WORK] can be done
As tough an industry as there is. And “it” [JOY AT WORK] can be done. A fabulous book. A fabulous challenge. 28

Joy, Inc.: How We Built a Workplace People Love,
Profit Through Putting People [REALLY] First Business Book Club Nice Companies Finish First: Why Cutthroat Management Is Over—and Collaboration Is In, by Peter Shankman with Karen Kelly Uncontainable: How Passion, Commitment, and Conscious Capitalism Built a Business Where Everyone Thrives, by Kip Tindell, CEO Container Store Conscious Capitalism: Liberating the Heroic Spirit of Business, by John Mackey, CEO Whole Foods, and Raj Sisodia Firms of Endearment: How World-Class Companies Profit from Passion and Purpose, by Raj Sisodia, Jag Sheth, and David Wolfe The Good Jobs Strategy: How the Smartest Companies Invest in Employees to Lower Costs and Boost Profits, by Zeynep Ton, MIT Small Giants: Companies That Choose to Be Great Instead of Big, by Bo Burlingham Joy at Work: A Revolutionary Approach to Fun on the Job, by Dennis Bakke, former CEO, AES Corporation Joy, Inc.: How We Built a Workplace People Love, by Richard Sheridan, CEO Menlo Innovations It’s Your Ship: Management Techniques from the Best Damn Ship in the Navy, by Mike Abrashoff, former commander, USS Benfold Turn This Ship Around; How to Create Leadership at Every Level, by L. David Marquet, former commander, SSN Santa Fe Employees First, Customers Second: Turning Conventional Management Upside Down, by Vineet Nayar, CEO, HCL Technologies Patients Come Second: Leading Change By Changing the Way You Lead by Paul Spiegelman & Britt Berrett The Customer Comes Second: Put Your People First and Watch ’Em Kick Butt, by Hal Rosenbluth, former CEO, Rosenbluth International Hidden Champions: Success Strategies of Unknown World Market Leaders, by Hermann Simon Retail Superstars: Inside the 25 Best Independent Stores in America, by George Whalin The Dream Manager, by Matthew Kelly The Soft Edge: Where Great Companies Find Lasting Success, by Rich Karlgaard, publisher, Forbes Delivering Happiness: A Path to Profits, by Tony Hsieh, Zappos Camellia: A Very Different Company Fans, Not Customers: How to Create Growth Companies in a No Growth World, by Vernon Hill Like a Virgin: Secrets They Won’t Teach You at Business School, by Richard Branson

NO COPOUTS PLEASE! There are those who “do it right”—from whom we all can learn.
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“BUSINESS HAS TO GIVE PEOPLE ENRICHING, REWARDING LIVES … OR IT’S SIMPLY NOT WORTH DOING.” —Richard Branson (#1/4,096) “[Business has the] responsibility to increase the sum of human well-being.” —Mihaly Csikszentmihalyi, Good Business “Business was originated to produce happiness, not pile up millions.” —B.C. FORBES, 1917/first issue/Forbes

#1/4,096: I put all my slides together a few years ago—and ended up with a 17-chapter/4,096 slide monster. (We called it MOAP—the Mother Of All Presentations.) Only one of the 4,096 could come first. I chose Mr. Branson’s declaration for pride of place! (Please consider—carefully—each of these three commentaries. As to the last, fascinating that it would come from the father of Forbes, which calls itself “the capitalist tool.”) 32

MANAGING: A PAIN IN THE BUTT
MANAGING: A PAIN IN THE BUTT. Somebody’s got to do it; punching bag for higher ups on one end, grouchy employees on the other; blame magnet if things go wrong, big bosses abscond with the credit if things go right. MANAGING: THE PINNACLE OF HUMAN ACHIEVEMENT. The greatest life opportunity one can have [literally]. Mid- to long-term success is no more and no less than a function of one’s dedication to and effectiveness at helping team members grow and flourish as individuals and as contributing members to an energetic, self-renewing organization dedicated to the relentless pursuit of EXCELLENCE.

It’s simple, really. An “ordinary” manager [not a big company CEO] can profoundly re-direct more lives than the best of neurosurgeons. A manager—every day—has the opportunity to dramatically [no hyperbole] affect the life trajectory of every employee on her or his team or in her or his department. (And over a career this could add up to re-shaping the lives of hundreds [or more, even many more] of co-workers.) 34

—Robert Altman, Oscar acceptance speech
“The role of the Director is to create a space where the actors and actresses can become more than they have ever been before, more than they have ever dreamed of being.” —Robert Altman, Oscar acceptance speech 35 35

That, dear manager/leader friends, is your challenge (with your team members*) (*and don’t give me any, “Well, that’s Hollywood” crap): “ … become more than they have ever been before, more than they’ve dreamed of being” . 36

Les Wexner: FROM FASHION TRENDS GURU TO JOY FROM PICKING/
DEVELOPING PEOPLE!* *Limited Brands founder Les Wexner queried on astounding (>>Jack Welch) longterm growth & profitability: It happened, he said, because “I got as excited about developing people” as he had been about predicting fashion trends in his early years. 37

Jack Welch was the poster-child CEO for years
Jack Welch was the poster-child CEO for years. After he retired, BusinessWeek identified a passel of CEOs who had actually outperformed Welch financially during the time Welch had led GE. One was Limited Brands’ Les Wexner. As to his secret, Wexner said it was moving “people development” to the top of his agenda. 38

THE LAST WORD: PEOPLE SERVING PEOPLE SERVING PEOPLE People are NOT “human resources.” People are NOT “our” “#1 asset.” Business IS people. Business IS people (leaders) serving people (employees) serving people (customers).

PEOPLE SERVING PEOPLE SERVING PEOPLE
PEOPLE SERVING PEOPLE SERVING PEOPLE. (A “no brainer”—though an incredible challenge.) . 40

People are NOT “human resources. ” People are NOT “our” “#1 asset
People are NOT “human resources.” People are NOT “our” “#1 asset.” Business IS people. Business IS people (leaders) serving people (employees) serving people (customers/community). Repeat after me: I hereby pledge that I will never again utter the [wretched/inhuman] term “HR.”

I [Tom Peters, Social Security # 2_____ ] am NOT a “human resource
I [Tom Peters, Social Security # 2_____ ] am NOT a “human resource.” DAMN IT. . 42

FYI: The ideas above are “a good [and imperative] thing to do for individuals and communities.” But make no mistake, the ideas just reviewed and implied are … MONEY MAKERS. And money makers … BIG TIME.

The Commerce Bank/Metro Bank Model “COST CUTTING IS A DEATH SPIRAL
The Commerce Bank/Metro Bank Model “COST CUTTING IS A DEATH SPIRAL. OUR WHOLE STORY IS GROWING REVENUE.” “ARE YOU GOING TO COST CUT YOUR WAY TO PROSPERITY? or … ARE YOU GOING TO SPEND YOUR WAY TO PROSPERITY?” “OVER-INVEST IN OUR PEOPLE, OVER-INVEST IN OUR FACILITIES.” Source: Source: Source: Vernon Hill, Fans! Not customers. How to Create Growth companies in a No Growth World

Exemplar #1 in The Excellence Dividend is Commerce Bank/Metro Bank—a retail banking superstar, first in the U.S. (Commerce), now in the UK (Metro). [You’ll first meet the company on the book’s page xvii.] Commerce/Metro founder Vernon Hill turned conventional logic on its head. While others shuttered branches and dumped employees on the streets by the thousand, Hill wanted customers in his physical branches—where he could turn them into “fans.” The contrarian idea—summarized by the philosophy spelled out on the prior slide —worked. Oh boy, did it work. When Hill exited Commerce and headed to the UK to start Metro, he sold the U.S. bank to TD Bank … for $8.6 billion. And while conventional retail banking practice has indeed spilled blood on the streets (jobs), Hill and his associates have created 17,000 new jobs. (You’ll see more of the Commerce/Metro saga later on—but I wanted to introduce it here as a “have your cake and eat it too” phenomenon: create jobs and treat people brilliantly … AND have over-the-moon financial success.) 45

REPEAT: Given/Axiomatic … THERE IS NO EXCUSE FOR NOT MAKING ANY ORGANIZATION OF ANY SIZE IN ANY BUSINESS A GREAT PLACE TO WORK EVERY LEADER HAS A MORAL OBLIGATION CIRCA 2018 TO DEVELOP PEOPLE SO THAT WHEN THEY LEAVE THEY ARE BETTER PREPARED FOR TOMORROW THAN THEY WERE WHEN THEY ARRIVED.

EXCELLENCE THE LAW OF 5 47 47

EXCELLENCE is not a “long-term” “aspiration.”
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EXCELLENCE is not a “long-term” "aspiration.”
EXCELLENCE is the ultimate short-term strategy. EXCELLENCE is THE … NEXT 5 MINUTES.* (*Or NOT.) 49

EXCELLENCE is not an "aspiration."
EXCELLENCE is … THE NEXT FIVE MINUTES. EXCELLENCE is your next conversation. Or not. EXCELLENCE is your next meeting. EXCELLENCE is shutting up and listening—really listening. EXCELLENCE is your next customer contact. EXCELLENCE is saying “Thank you” for something “small.” EXCELLENCE is the next time you shoulder responsibility and apologize. EXCELLENCE is waaay over-reacting to a screw-up. EXCELLENCE is the flowers you brought to work today. EXCELLENCE is lending a hand to an “outsider” who’s fallen behind schedule. EXCELLENCE is bothering to learn the way folks in finance [or IS or HR] think. EXCELLENCE is waaay “over”-preparing for a 3-minute presentation. EXCELLENCE is turning “insignificant” tasks into models of … EXCELLENCE. 50

My new book was almost titled: Excellence Is the Next Five Minutes
My new book was almost titled: Excellence Is the Next Five Minutes. We wanted the title to be more timely, so chose The Excellence Dividend. Fact is, I would have been delighted with “next five minutes.” I’m not a Zen practitioner or the like, but I do passionately believe “it” (success/excellence) is what you do (or fail to do) … RIGHT NOW. In the book, I quote Linda Kaplan Thaler, who built from the ground up a huge ad agency—and has been inducted into the Advertising Hall of Fame. She explains her success: “We never concentrated one minute on the future. We always focused on what can we do today. I always tell people don't spend one second thinking about a vision, forget about it. Don't dream your way to success. … We never thought about becoming too big or hugely successful, we just did the best we could every day.” As I said: EXCELLENCE = RIGHT NOW (Or not.) 51

WHO YOU ARE/WHAT YOU CARE ABOUT IS FULLY REVEALED IN YOUR NEXT
Excellence (or not): WHO YOU ARE/WHAT YOU CARE ABOUT IS FULLY REVEALED IN YOUR NEXT 5-LINE !

Truth. Let me read that email
Truth! Let me read that . I contend that your entire personality and approach to life and leadership will be revealed in those five lines. Excellence?????? It’s either imbedded in those five lines. Or it is not. 53

36 YEARS 6 WORDS 54 54

“Hard is soft. Soft is hard.”
52 Years/36 Years/18 Books/ 2,500 Speeches = 6 Words “Hard is soft. Soft is hard.” (You can Google it!)

Hard [numbers/plans] is Soft. Soft [relationships/culture] is Hard.
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I’ve often said—and I mean it—that the last several decades of my professional life can be summarized in six words: Hard is soft. Soft is hard. That is the so-called “hard stuff” (e.g., the numbers, the plans, the org charts) are actually soft—easy to manipulate. The traditionally labeled “soft stuff” (e.g., people, relationships, culture) are the true “hard” stuff—the basis for lasting effectiveness. “Selling” this idea has so far taken 18 books and 2,500 speeches in 63 countries. Progress may have been made—but implementation is still spotty. Hence, I keep on keepin’ on … 57

GOOGLE GETS A SURPRISE I “Project Oxygen [data from founding in 1998 to 2013] shocked everyone by concluding that, among the eight most important qualities of Google’s top employees, STEM [Science, Technology, Engineering, and Mathematics] expertise comes in dead last. The seven top characteristics of success at Google are all SOFT SKILLS: being a good coach; communicating and listening well; possessing insights into others (including others’ different values and points of view); having empathy toward and being supportive of one’s colleagues; being a good critical thinker and problem solver; and being able to make connections across complex ideas. Those traits sound more like what one gets as an English or theater major than as a programmer. … Source: Valerie Strauss, “The surprising thing Google learned about its employees —and what it means for today’s students” (Washington Post, 20 December 2017)

“Among the eight most important qualities of Google’s top employees, STEM [Science, Technology, Engineering, and Mathematics] expertise comes in dead last. The seven top characteristics of success at Google are all soft skills …” I was literally staggered. Of course it is a message I have preached for decades (hard is …). But to see the extraordinary confirmation in the most unlikely of places was, yes … STAGGERING. 59

GOOGLE GETS A SURPRISE II “Project Aristotle [2017] further supports the importance of soft skills even in high-tech environments. Project Aristotle analyzes data on inventive and productive teams,. Google takes pride in it’s A-teams, assembled with top scientists, each with the most specialized knowledge and able to throw down one cutting-edge idea after another. Its data analysis revealed, however, that the company’s most important and productive ideas come from B-teams comprised of employees that don’t always have to be the smartest people in the room. Project Aristotle shows that that the best teams at Google exhibit a range of soft skills: equality, generosity, curiosity toward the ideas of your teammates, empathy and emotional intelligence. And topping the list: emotional safety. No bullying. … Source: Valerie Strauss, “The surprising thing Google learned about its employees —and what it means for today’s students” (Washington Post, 20 December 2017)

Ditto. Or perhaps even more extraordinary
Ditto. Or perhaps even more extraordinary. Bless those “B” players who do all sorts of weird things such as … listen to one another and don’t act like intellectual bullies. 61

AT GRADUATION: Business and professional degree holders in general [MBAs, engineers, lawyers, etc.] have higher interview and hire rates, and higher starting salaries, than new liberal arts grads. YEAR 20: Liberal arts grads have risen farther than their biz-professional degree holder peers. At one giant tech firm, 43 percent of liberal arts grads had made it to upper-middle management compared to 32 percent of engineering grads. At one giant financial services firm, 60 percent of the worst managers, according to company evaluations, had MBAs, while 60 percent of the best had only BAs. Source: Henry Mintzberg, Managers Not MBAs: A Hard Look at the Soft Practice of Managing and Management Development,

More/consistent with the Google findings
More/consistent with the Google findings. By year 20 following graduation … liberal arts grads have risen farther than their biz-professional degree holder peers. (The study from which this conclusion emerged is reported by Henry Mintzberg [there is no one in my arena whose work I more admire] in his book, Managers Not MBAs: A Hard Look at the Soft Practice of Managing and Management Development.) 63

The “Hard-Edge-First” Logic
“Far too many companies invest too little time and money in their soft-edge excellence. … The three main reasons for this mistake are: 1. The hard edge is easier to quantify. 2. Successful hard-edge investment provides a faster return on investment 3. CEOs, CFO, chief operating officers, boards of directors, and shareholders speak the language of finance.” Source: The Soft Edge, Rich Karlgaard

“1. Soft-edge strengths lead to greater
Soft-Edge Advantages “1. Soft-edge strengths lead to greater brand recognition, higher profit margins, … [It] is the ticket out of Commodityville. “2. Companies strong in the soft edge are better prepared to survive a big strategic mistake or cataclysmic disruption … “3. Hard-edge strength is absolutely necessary to compete, but it provides only a fleeting advantage.” Source: The Soft Edge, Rich Karlgaard

Forbes publisher Rich Karlgaard’s book, The Soft Edge: Where Great Companies find Lasting Success, is a gem through and through. (Which is to say, I agree with pretty much every word. FYI: I wrote the Foreword.) I urge/b-e-g you to read the book. The words here are obviously no more than suggestive—a thorough study of The Soft Edge will, I guarantee, pay off smartly. (And what I doubly like is that Rich is a primo player in Silicon Valley; hence his long paean to “soft” is particularly surprising, and thence particularly credible and powerful.) 66

THE EIGHTEEN “NUMBER ONES”
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The Excellence Dividend *52 YEARS [1966-2018] BOILED DOWN TO 1 PAGE …
THE EIGHTEEN “NUMBER ONES”* *52 YEARS [ ] BOILED DOWN TO 1 PAGE … 68 68

The Excellence Dividend
THE EIGHTEEN “NUMBER ONES” *Investment #1: TRAINING (“Radical personal development” for all = Moral Responsibility = Immeasurable longterm strategic-differentiation opportunity = $$$$$. 10X more important in the Age of AI.) *Asset #1: PORTFOLIO OF FIRST-LINE MANAGERS (Key #1 to employee productivity/retention/product-service quality/customer fan-hood. Selection/training/mentoring of 1st-line chiefs a strategic priority.) *Core Value #1: LISTENING EXCELLENCE!!! (“Fierce listening”/“Aggressive listening” to staff, outsiders. Note: Effective listening is time-consuming/exhausting! Effective listening is train-able!) Branson: Listening is Leadership Key #1.) *Obsession #1: EXECUTION/“THE LAST 95%” (Omar Bradley: “Amateurs talk about strategy. Professionals talk about logistics.” Fred Malek: “Execution is strategy.” Conrad Hilton Secret #1: “Don’t forget to tuck the shower curtain into the bathtub.”) *Job #1: ESTABLISHING/MAINTAINING “60/60/24/7/365” A CULTURE OF EXCELLENCE-BY-PUTTING-PEOPLE-REALLY-FIRST (Plausible/ Profitable /Ennobling: No less than a “joyful” workplace!!!!/FYI: “PEOPLE [REALLY] FIRST” = CUSTOMERS FIRST = $$$$ = SOCIETAL CONTRIBUTION.) (Branson/“Business has to give people enriching rewarding lives, or it’s not worth doing.” DeJulius/“Your customers will never be happier than your employees.”) *Calling #1: LEADING IS A HUMAN-POTENTIAL-MAXIMIZATION ACTIVITY—THERE IS NO HIGHER CALLING. Any leader absolutely has the opportunity to dramatically affect the lives of thousands—far more than any surgeon. *Value-Added Strategy #1: DESIGN EXCELLENCE/RADICAL HUMANIZATION (Apple: “Steve and Jony spent hours discussing corners.”/Review of MINI Cooper S: “No vehicle in recent memory has provoked more smiles.”/Metro Bank: A jillion little touches, e.g., dog biscuits, scintillating branches, and wonderfully welcoming staff./Healthcare: Human kindness in its delivery promotes healing/DesignX and RadHumanization by and large beyond the foreseeable reach of AI) (And a great-legacy.) *Success Credo #1: “ARE YOU GOING TO COST CUT YOUR WAY TO PROSPERITY? OR ARE YOU GOING TO SPEND YOUR WAY TO PROSPERITY?” “OVER-INVEST IN OUR PEOPLE, OVER-INVEST IN OUR FACILITIES.” “COST CUTTING IS A DEATH SPIRAL. OUR WHOLE STORY IS GROWING REVENUE.” (Metro Bank/Commerce Bank mantra/hyper-contrarian consumer banking mega-success USA/UK.) *Organization Effectiveness/$$$$ Payoff #1: WOMEN BUY EVERYTHING (Consumer/ Commercial) WOMEN HAVE ALL THE MONEY (Another $22 trillion wealth transfer to women next 5 years) WOMEN ARE BETTER LEADERS (Solid research on this: E.g., F>M in 12 of 16 key leadership traits per Harvard Business Review/50-50 MF Boards = Plus 58% profitability per McKinsey. SO WHAT’S YOUR LEADERSHIP TEAM AND PRODUCT DEVELOPMENT TEAM F-M COMPOSITION????) *Missed Opportunity #1: OLDIES/RICH, MEGA-NUMEROUS, IGNORED—PLENTY OF TIME LEFT (“People at 50 have more than half their adult life ahead of them”—e.g., Americans buy 13 cars in a lifetime, 7 after age 50. Household net worth 65 plus is 47X > 35 minus. “Marketers attempts at reaching those over 50 have been miserably unsuccessful.”) *Economic Cornerstone #1: SMEs RULE/“BE THE BEST, IT’S THE ONLY MARKET THAT’S NOT CROWDED” (SMEs/Small and Medium-size Enterprises create the jobs, employ almost all of us, are the prime innovators—every economy’s backbone. Monster-size businesses cut costs, dump people over the side, underperform the market.) *Innovation Strategy #1: WTTMSW/WHOEVER TRIES THE MOST STUFF WINS Extended: WTTMS(ASTMSUTF)W/WHOEVER TRIES THE MOST STUFF (AND SCREWS THE MOST STUFFUP THE FASTEST) WINS (Innovation guaranteed!!!/But requires supportive culture: “Try it. NOW.” “Fail Forward. Fast” “Reward excellent failures. Punish mediocre successes.” Wayne Gretzky: “You miss 100% of the shots you never take.”) *Personal Habit #1: READ. READ. READ. READ. READ. (Investor superstar: Not reading enough = CEO Deficit #1.) *Time Management Must #1: SLOW DOWN (All the important things—relationship building and maintenance, culture maintenance, aggressive listening, Excellence—take time, lots of.) *Making Things Happen Dictate #1: LUNCH!!! (The “Sacred 225 At Bats” = 225 Lunch Opportunities/Year = 225 Golden-Never-to-Be-Repeated Opportunities to meet new people, learn new things, establish and cement relationships up/down the organization and way beyond. LUNCH = NETWORKING OPPORTUNITY #1. Do NOT waste a single lunch opportunity/Keep score!) *Daily Activity #1: MBWA/MANAGING BY WANDERING AROUND (Daily. Daily = EVERY DAY. No excuses. Ever./And: If you don’t LOVE doing regular MBWA, choose another career!!!) *Commandment #1: EXCELLENCE IS THE NEXT FIVE MINUTES (Excellence = ULTIMATE SHORT-TERM STRATEGY = Next /Chance hallway meeting/Saying “Thank you” for something small/Lending a helping hand for a half-hour when you’re busy …) *Axiom #1: HARD (NUMBERS, PLANS, ORG CHARTS) IS SOFT. SOFT (RELATIONSHIPS, CULTURE, LISTENING, EXCELLENCE) IS HARD. Sustaining winners: THE MIS-NAMED “SOFT STUFF” COMES F-I-R-S-T!!!!!!

What is this. It’s the product of an insane amount of work
What is this? It’s the product of an insane amount of work. I was determined to, in effect, “get it all” (my professional life) on one 8.5X11 piece of paper. I DID. (More or less.) To be sure, the typeface was small. Well, I’m trying the same thing here in PowerPoint—and the typeface is v-e-r-y small. So, cheating a bit, I also put the one page on five slides. … 70

*Okay, a single slide was unreadable—herewith, larger type
The Excellence Dividend THE EIGHTEEN “NUMBER ONES” *Investment #1: TRAINING (“Radical personal development” for all = Moral Responsibility = Immeasurable longterm strategic-differentiation opportunity = $$$$$. 10X more important in the Age of AI.) *Asset #1: PORTFOLIO OF FIRST-LINE MANAGERS (Key #1 to employee productivity/retention/product-service quality/ customer fan-hood. Selection/training/mentoring of 1st-line chiefs a strategic priority.) *Core Value #1: LISTENING EXCELLENCE!!! (“Fierce listening”/ “Aggressive listening” to staff, outsiders. Note: Effective listening is time-consuming/exhausting! Effective listening is train-able!) (Branson: Listening is Leadership Key #1.) *Obsession #1: EXECUTION/“THE LAST 95%” (General Omar Bradley: “Amateurs talk about strategy. Professionals talk about logistics.” Fred Malek: “Execution is strategy.” Conrad Hilton Secret #1: “Don’t forget to tuck the shower curtain into the bathtub.”) *Okay, a single slide was unreadable—herewith, larger type

THE EIGHTEEN “NUMBER ONES” *Job #1: ESTABLISHING/MAINTAINING “60/60/24/7/365” A CULTURE OF EXCELLENCE-BY-PUTTING-PEOPLE-REALLY-FIRST (Plausible/ Profitable/Ennobling: No less than a “joyful” workplace!!!!/FYI: “PEOPLE [REALLY] FIRST” = CUSTOMERS FIRST = $$$$ = SOCIETAL CONTRIBUTION.) (Branson/“Business has to give people enriching rewarding lives, or it’s not worth doing.” DeJulius/“Your customers will never be happier than your employees.”) *Calling #1: LEADING IS A HUMAN-POTENTIAL-MAXIMIZATION ACTIVITY—THERE IS NO HIGHER CALLING. Any leader absolutely has the opportunity to dramatically affect the lives of thousands—far more than any surgeon. *Value-Added Strategy #1: DESIGN EXCELLENCE/RADICAL HUMANIZATION (Apple: “Steve and Jony spent hours discussing corners.”/Review of MINI Cooper S: “No vehicle in recent memory has provoked more smiles.”/Metro Bank: A jillion little touches, e.g., dog biscuits, scintillating branches, and wonderfully welcoming staff./Healthcare: Human kindness in its delivery promotes healing/DesignX and RadHumanization by and large beyond the foreseeable reach of AI) (And a great-legacy.)

THE EIGHTEEN “NUMBER ONES” *Success Credo #1: “ARE YOU GOING TO COST CUT YOUR WAY TO PROSPERITY? OR ARE YOU GOING TO SPEND YOUR WAY TO PROSPERITY?” “OVER-INVEST IN OUR PEOPLE, OVER-INVEST IN OUR FACILITIES.” “COST CUTTING IS A DEATH SPIRAL. OUR WHOLE STORY IS GROWING REVENUE.” (Metro Bank/Commerce Bank mantra/hyper-contrarian consumer banking mega-success USA/UK.) *Organization Effectiveness/$$$$ Payoff #1: WOMEN BUY EVERYTHING (Consumer/ Commercial) WOMEN HAVE ALL THE MONEY (Another $22 trillion wealth transfer to women next 5 years/USA) WOMEN ARE BETTER LEADERS (Solid research on this: E.g., F>M in 12 of 16 key leadership traits per Harvard Business Review/50-50 MF Boards = Plus 58% profitability per McKinsey. SO WHAT’S YOUR LEADERSHIP TEAM AND PRODUCT DEVELOPMENT TEAM F-M COMPOSITION????) *Missed Opportunity #1: OLDIES/RICH, MEGA-NUMEROUS, IGNORED—PLENTY OF TIME LEFT (“People at 50 have more than half their adult life ahead of them”—e.g., Americans buy 13 cars in a lifetime, 7 after age 50. Household net worth 65 plus is 47X > 35 minus. “Marketers attempts at reaching those over 50 have been miserably unsuccessful.”)

THE EIGHTEEN “NUMBER ONES” *Economic Cornerstone #1: SMEs RULE/“BE THE BEST, IT’S THE ONLY MARKET THAT’S NOT CROWDED” (SMEs/Small and Medium-size Enterprises create the jobs, employ almost all of us, are the prime innovators—every economy’s backbone. Monster-size businesses cut costs, dump people over the side, underperform the market. ) *Innovation Strategy #1: WTTMSW/WHOEVER TRIES THE MOST STUFF WINS Extended: WTTMS(ASTMSUTF)W/WHOEVER TRIES THE MOST STUFF (AND SCREWS THE MOST STUFF UP THE FASTEST) WINS (Innovation guaranteed!!!/But requires supportive culture: “Try it. NOW.” “Fail Forward. Fast.” “Reward excellent failures. Punish mediocre successes.” Wayne Gretzky: “You miss 100% of the shots you never take.”) *Personal Habit #1: READ. READ. READ. READ. READ. (Investor superstar: Not reading enough = CEO Deficit #1.) *Time Management Must #1: SLOW DOWN (All the important things—relationship building and maintenance, culture maintenance, aggressive listening, Excellence—take time, lots of.)

THE EIGHTEEN “NUMBER ONES” *Making Things Happen Dictate #1: LUNCH!!! (The “Sacred 225 At Bats” = 225 Lunch Opportunities/Year = 225 Golden-Never-to-Be-Repeated Opportunities to meet new people, learn new things, establish and cement relationships up/down the organization and way beyond. LUNCH = NETWORKING OPPORTUNITY #1. Do NOT waste a single lunch opportunity/Keep score!) *Daily Activity #1: MBWA/MANAGING BY WANDERING AROUND (Daily. Daily = EVERY DAY. No excuses. Ever./And: If you don’t LOVE doing regular MBWA, choose another career!!!) *Commandment #1: EXCELLENCE IS THE NEXT FIVE MINUTES (Excellence = ULTIMATE SHORT-TERM STRATEGY = Next /Chance hallway meeting/Saying “Thank you” for something small/Lending a helping hand for a half-hour when you’re busy …) *Axiom #1: HARD (NUMBERS, PLANS, ORG CHARTS) IS SOFT. SOFT (RELATIONSHIPS, CULTURE, LISTENING,, EXCELLENCE) IS HARD. Sustaining winners: THE MIS-NAMED “SOFT STUFF” COMES F-I-R-S-T!!!!!!

And there you have it … 76

CULTURE IS THE GAME 77 77

CULTURE: IT IS THE GAME

Dominic Barton, Managing Director, McKinsey & Co.: “Culture.”
WSJ/ : “What matters most to a company over time? Strategy or culture? Dominic Barton, Managing Director, McKinsey & Co.: “Culture.”

Soon after the research for In Search of Excellence began, total war broke out between me and McKinsey. That, of course, is nonsense. But it is a fact that the McKinsey mantra at the time was “strategy first, second, third …” And what my research was telling me was that the “soft stuff”—people, culture, and the like—were the Pillars of Excellence. Well, times do change. To my selfish satisfaction, the Managing Director of McKinsey appears to be on board, per this 2013 quote. In fact, “soft-stuff”-related work now constitutes a very significant share of McKinsey’s business. 80

“Culture eats strategy for breakfast.” —Ed Schein/1986
81

MIT’s Ed Schein is often called the father of the “corporate culture” revolution. I’ve always loved this to-the-point quote. 82

“If I could have chosen not to tackle the IBM culture head-on,
I probably wouldn’t have. My bias coming in was toward strategy, analysis and measurement. In comparison, changing the attitude and behaviors of hundreds of thousands of people is very, very hard. Yet I came to see in my time at IBM that culture isn’t just one aspect of the game —IT IS THE GAME.” —Lou Gerstner, Who Says Elephants Can’t Dance 83 83

Lou Gerstner was the take-no-prisoners captain of the good ship “Strategy First” in his McKinsey days and beyond. To his own apparent surprise, a different story emerged as he crafted his storied turnaround of IBM in the 1990s. “It [culture] IS the Game.” Indeed it is! (Welcome aboard, Lou. Better late than never.) 84

“Culture precedes positive results. It doesn’t get tacked
on as an afterthought on the way to the victory stand.” —NFL Hall of Fame Coach [San Francisco 49ers] Bill Walsh, from his book, The Score Takes Care of Itself .

The Score Takes Care of Itself. Football, too
The Score Takes Care of Itself. Football, too! Get the culture right—and the odds of winning any given game skyrocket! I 86

“Starbucks had become operationally driven, about efficiency as opposed to the romance. We’d lost the soul of the company.” —Howard Schultz on Starbucks’ problems which caused him to reclaim the CEO job (Shultz calls his association with Starbucks “a love story.” FYI: Subsequent to Schultz’s return, Starbucks has indeed gotten its mojo back!) “What’s remarkable is how fast a culture can be torn apart.” —top 3M scientist (“3M’s Innovation Crisis: How Six Sigma Almost Smothered Its Idea Culture,” Cover story, BusinessWeek)

Powerful cultures can be built. Powerful cultures can implode … QUICKLY. (In both of these instances, the below-the-waterline holes have been plugged.) (The 3M quote is particularly interesting. A very popular system—Six Sigma—made a godawful mess of the fabled 3M innovation culture. There are a lot of ways to do “good” things wrong.) 88

CULTURE/CEO JOB #1 /THE RULES:
CULTURE COMES FIRST. CULTURE IS EXCEEDINGLY DIFFICULT TO CHANGE. CULURE CHANGE CANNOT BE/MUST NOT BE EVADED OR AVOIDED. CULTURE MAINTENANCE IS ABOUT AS DIFFICULT AS CULTURE CHANGE. CULTURE MAINTENANCE: ONE DAY/ONE HOUR/ ONE MINUTE AT A TIME. CULTURE CHANGE/MAINTENANCE MUST BECOME A CONSCIOUS/PERMANENT/PERSONAL AGENDA ITEM. CULTURE CHANGE = AN “OUTSIDE-THE OFFICE JOB” = MBWA/MANAGING BY WANDERING AROUND. CULTURE CHANGE/MAINTENANCE IS MANIFEST IN “THE LITTLE THINGS” FAR MORE THAN IN THE BIG THINGS. REPEAT/CULTURE CHANGE/MAINTENANCE: ONE DAY/ONE HOUR/ONE MINUTE AT A TIME. FOREVER. AND EVER.

ONE DAY/ ONE HOUR/ ONE MINUTE AT A TIME. The gospel. (According to me
90

PUT PEOPLE [REALLY!!] FIRST
91 91

Your Customers Will Never Be Any Happier Than Your Employees
92 92

“YOU HAVE TO TREAT YOUR EMPLOYEES LIKE CUSTOMERS.” —Herb Kelleher
“What employees experience, Customers will. The best marketing is happy, engaged employees. YOUR CUSTOMERS WILL NEVER BE ANY HAPPIER THAN YOUR EMPLOYEES.” —John DiJulius, The Customer Service Revolution IF YOU WANT STAFF TO GIVE GREAT SERVICE, GIVE GREAT SERVICE TO STAFF.” —Ari Weinzweig 93 93

So damned obvious. So damned often honored in the breach. Why? Why? Why?* ** (*I honestly don’t know.) (**Each of these three is … OPERATIONAL Not “pie in the sky.”) 94

If you want to WOW your customers, FIRST you
EXCELLENT customer experience depends … entirely … on EXCELLENT employee experience! If you want to WOW your customers, FIRST you must WOW those who WOW the customers!

So damned obvious. So damned often honored in the breach. Why???? Why????? Why??????
96

/Twelve companies have been among the “100 best to work for” in the USA every year, for all 16 years of the list’s existence; along the way, they’ve added/ 341,567 new jobs, or job growth of +172%: Publix Whole Foods Wegmans Nordstrom Cisco Systems Marriott REI Goldman Sachs Four Seasons SAS Institute W.L. Gore TDIndustries Source: Fortune/ “The 100 Best Companies to Work For”/

Only 12 firms appeared on the Fortune “best companies to work for” list 18 years running [the entire existence of the list]. The stunner [for me, anyway]: 7 of the 12 [e.g., Publix, Wegmans, Marriott], over half, are in industries like groceries and hospitality, where wages are typically low and turnover sky high—places where “they” say “You can’t do all this high-minded people stuff.” This is strong evidence that clearly says: IT DAMN WELL CAN BE DONE/ANYWHERE. (FYI: The financial performance of this group was over-the-moon compared to their peers.) 98

“They take generous care of their part-timers.”
7/12: [Only] ONE THING IN COMMON “They take generous care of their part-timers.” At some of the companies on the list, the share of part-timers is low. But among the seven (of twelve) that are in industries like hotels and retail, the numbers are sky high. Whole Foods, for example, had 27,000 part-timers at the time the list was published, Nordstrom had 30,000—and Publix had a staggering 100,000. “The most important commonality among the twelve is that they all offer part-timers healthcare benefits. And most give part-timers paid time off for sick days, holidays, etc. Nordstrom part-timers, for example, have 19 paid days off, Marriott’s have 18 paid days off, and REI’s have 12. Other examples of treating part-timers as full-time members of the family include Publix’s (again) policy of making part-timers eligible for employee stock ownership plans that fund retirement savings.” Source: Fortune/ “The 100 Best Companies to Work For”/

Another stunner. The one—and only—thing the Big Twelve had in common was … TERRIFIC BENEFITS FOR … PART-TIMERS. And in Publix’ case, for example, that adds up to 100,000 part-timers … with great benefits! (Suggest you re-read the slide about a zillion times—until it sinks in. Can’t be done? CAN BE DONE.) 100

Hiring 101 101

“May I help you down the jetway …”
1/7,500 “May I help you down the jetway …” 102

A morning flight from Albany to Washington (BWI) on Southwest Airlines
A morning flight from Albany to Washington (BWI) on Southwest Airlines. Pilots coming in on a flight that was slightly delayed. I.e., they are in a rush—under unimaginably intense pressure to get their next flight out on time. At the gate where I was, there was the typical lineup of about five wheel chairs. The pilot-in-a-hurry heads toward the gate. He pauses, turns to the woman in the first wheelchair, and says [approximately], “May I help you down the jetway?” I’m a pro. I have at least 7,500 flight legs on my balance sheet. Seventy-five hundred flight legs—and this was the first time I’d seen a pilot [especially one behind schedule] push a wheelchair down a jetway. What’s up … 103

“We look for ... listening, caring, smiling, saying ‘Thank you,’ being warm.” — Colleen Barrett, former President, Southwest Airlines 104

What’s up? A lot’s up. The Southwest story of excellent service has been told many times—including several times by me. But in this instance, let’s focus on one aspect. Yes, there’s more to the story, but one can still confidently say that things like the wheelchair-event are far more likely to happen … if you explicitly hire people with a helpful bent. Former president Colleen Barrett explained that Southwest hires for “listening, caring, smiling, saying ‘Thank you,’ and being warm.” AND … this filter applies to pilots and mechanics as much as to flight attendants and gate personnel. Yes, there is much, much more to the little saga—but these uncharacteristic hiring criteria are a big part of the tale of the pilot-and-the-lady-in-the-wheelchair. (Remember: 7,500 flight legs—and the first time I’d observed the likes of this. 1/7,500.) 105

—Peter Miller, CEO Optinose (pharmaceuticals)
“The ultimate filter we use [in the hiring process] is that we only hire NICE people. … When we finish assessing skills, we do something called ‘running the gauntlet.’ We have them interact with 15 or 20 people, and everyone of them have what I call a ‘blackball vote,’ which means they can say if we should not hire that person. I believe in culture so strongly and that one bad apple can spoil the bunch. There are enough really talented people out there who are nice, you don’t really need to put up with people who act like jerks.” —Peter Miller, CEO Optinose (pharmaceuticals) “When we talk about the qualities we want in people, EMPATHY is a big one. … If you can empathize with people, then you can do a good job. If you have no ability to empathize, then it’s difficult to help people improve. Everything becomes harder. —Stewart Butterfield, founder/CEO Slack, Flickr

Quote #1: I love it that this comes from a pharmaceutical company—not a setting where you might expect “nice” to top the list of prospective employee attributes. The boss makes the point that there are actually a lot of super-technically-talented people around. Hence, there is no need to hire jerks; hire the nice ones—and preserve the supportive culture. Quote #2 (from another tech world—software): ADD … EMPATHY! (There’s a plethora of evidence that demonstrates that “nice” or ”empathy” is a longterm spur to innovation. As I suggested earlier … even Google figured it out.) 107

“I can’t tell you how many times we passed up hotshots for guys we thought were better people … and watched our guys do a lot better than the big names, not just in the classroom, but on the field—and, naturally, after they graduated, too. Again and again, the blue chips faded out, and our little up- and-comers clawed their way to all-conference and All-America teams.” —Bo Schembechler (& John Bacon), “Recruit for Character,” Bo’s Lasting Lessons 108

Add: “BETTER PEOPLE” 109

USE THESE WORDS LISTENING. CARING. SMILING. SAYING “THANK YOU.” BEING WARM. NICE. EMPATHY.

No gobbledygook, bureaucratize, psycho-babble
No gobbledygook, bureaucratize, psycho-babble. USE THESE TERMS EXACTLY [e.g., NICE = NICE. Not “exhibits a positive disposition”] AS THEY ARE. UNVARNISHED. 111

Observed closely during Mayo Clinic employment interviews (for renown surgeons as well as others): The frequency of use of “I” or “We.” Source: Leonard Berry & Kent Seltman, chapter 6, “Hiring for Values,” Management Lessons From Mayo Clinic 112

Management Lessons from the Mayo Clinic is one of the Top Five management books I’ve read in the last decade. The “We” idea goes a long way toward explaining Mayo’s hundred-year peerless performance level. (And, yes, Mayo examiners do count the “We”s and “I”s during an interview. And, in a parallel to Southwest and pilots, the “we-ness” requirement holds for top surgeon applicants.) 113

from Management Lessons From Mayo Clinic
“I am hundreds of times better here [than in my prior hospital assignment] because of the support system. It’s like you were working in an organism; you are not a single cell when you are out there practicing.’” —quote from Dr. Nina Schwenk, in Chapter 3, “Practicing Team Medicine,” from Leonard Berry & Kent Seltman, from Management Lessons From Mayo Clinic 114

100X: A byproduct of that “We” fanaticism!
115

"It became necessary to develop medicine as a cooperative science; the clinician, the specialist, the laboratory workers, the nurses uniting for the good of the patient, each assisting in the elucidation of the problem at hand, and each dependent upon the other for support.” —Dr. William Mayo, 1910

118 years of “We.” (And, alas, oh so rare—circa 2018—in healthcare.)
117

"When I was in medical school, I spent hundreds of hours looking into a microscope—a skill I never needed to know or ever use. Yet I didn't have a single class that taught me communication or teamwork skills—something I need every day I walk into the hospital.” —Peter Pronovost, Safe Patients, Smart Hospitals

Ouch. Alas, no surprise. (Dr
Ouch. Alas, no surprise. (Dr. Pronovost, on the staff at Johns Hopkins, is the father of the checklist movement that has saved so many lives. He was the de facto star of Atul Gawande’s book, The Checklist Manifesto.) 119

Training = Investment #1!

INVESTMENT #1. (Y-e-s, #1—and I have given this an enormous amount of thought over an enormous amount of time.) 121

admirals obsess In the Army and Navy, 3-star generals/
on training. In most businesses, it's a “ho-hum” mid-level staff function. 122

If you don't believe that training is “Investment #1,” ask an admiral, general, police chief, fire chief, orchestra conductor, football coach, archery coach, movie director, actor [age 22 or 62], prima ballerina, surgeon, ER or ICU chief or nurse, nuclear power plant operator ... [or me].

“training, TRAINING and M-O-R-E T-R-A-I-N-I-N-G”
—Admiral Chester Nimitz, Commander In Chief/Pacific, communication to Chief of Naval Operations Ernest King. Fact: The U.S. Navy was woefully under-prepared at the time of Pearl Harbor. The fix: T-R-A-I-N-I-N-G … more important than hardware! (Note: The capitalization, punctuation and italics In the quote above are Admiral Nimitz’s, not mine.)

Sergeants. Lieutenants. Majors. Police forces. Symphony orchestras
Sergeants. Lieutenants. Majors. Police forces. Symphony orchestras. Theater companies. Football players. Archery team members. Doctors. Scientists. Etc. For all these folks it’s training first and training forever. WHY NOT THE AVERAGE BUSINESS—TINY TO GARGANTUAN? 125

Gamblin’ Man Bet #1: >> 5 of 10 CEOs see training as expense rather than investment. Bet #2: >> 5 of 10 CEOs see training as defense rather than offense. Bet #3: >> 5 of 10 CEOs see training as “necessary evil” rather than “strategic opportunity.”

Bet #4: >> 8 of 10 CEOs, in 45-min “tour d’horizon” of their biz, would NOT mention training.

Alas, I’m quite sure I’d win all my bets. Heartbreaking. (AND STUPID.)
128

Step #1 Is your CTO/Chief Training Officer (Do you even
have a CTO?) your top paid “C-level” job (other than CEO/COO)? Are your top trainers paid/cherished as much as your top marketers/ engineers?

Ha ha ha. (But NOT funny.) 130

“Train ’em and they’ll leave.” Or …

This is the frequent infantile excuse for a limited training budget.
132

“TRAIN PEOPLE WELL ENOUGH SO THEY CAN LEAVE, TREAT THEM WELL ENOUGH SO THEY DON’T WANT TO.” —Richard Branson

Branson to the rescue. AGAIN.
134

What is the #1 reason to go berserk over training?

What is the best reason to go bananas over training? GREED.
(It pays off.) (Also: Training should be an official part of the R&D budget and a capital expense.)

1st-Line Leaders

and the Navy are fully aware that success on
If the regimental commander lost most of his 2nd lieutenants and 1st lieutenants and captains and majors, it would be a tragedy. IF HE LOST HIS SERGEANTS IT WOULD BE A CATASTROPHE. The Army and the Navy are fully aware that success on the battlefield or at sea is dependent to an extraordinary degree on its Sergeants and Chief Petty Officers. Does industry have the same awareness? 138

Once again, a military example. Once again, the military example is apt. The Sergeants DO run the Army—and the generals damn well know it. The Chief Petty Officers DO run the Navy—and the admirals damn well know it. (FYI: I spent four years in the U.S. Navy.) The logic is clear: Who do “the people” work for? Answer in full: the sergeants, the chiefs … i.e., your [full complement of] 1st-line bosses. 139

Employee retention & satisfaction: “Overwhelmingly based on the first-line manager!” —Marcus Buckingham/Curt Coffman, First, Break All the Rules “People leave managers not companies.” —Dave Wheeler 140

Front-line Chiefs [Full Complement of] :
Principal determinants of … enterprise productivity. Principal determinants of … employee retention. Principal determinants of … product/ service quality. Principal carriers/embodiments of … corporate culture. Principal visible “spear carriers” for … Excellence. Principal champions/enablers of … sustained employee development.

No way to overstate here
No way to overstate here. Companies do pay attention to 1st-line supervisors—but do not/rarely consider the full cadre of 1st-line leaders a … 1st-ORDER STRATEGIC ASSET … worthy of stupendous investment in selection and development. (PLEASE PONDER THIS.)

Suggested addition to your statement of Core Values: “We are obsessed with developing a cadre of 1st line managers that is second to none—we understand that this cadre per se is arguably one of our top two or three most important ‘Strategic Assets.’” 143 143

As I write, I’ve been banging on about this for about 18 months
As I write, I’ve been banging on about this for about 18 months. In all my experience, I have rarely hit such an exposed nerve—and have rarely observed such vigorous follow-up (interestingly, especially from giant company CEOs). Upon reflecting, most agree with the basic assertion of the “over-the-top” importance of the 1st line cadre—and, further, that they are doing a half-assed job at best with selection and development thereof, and that, upon careful examination, they’re downright embarrassed at how inadequate their selection process and training and evaluation and recognition programs are. 144

Promoting

Promotion Decisions/2 per Year = Legacy “life and death decisions” Source: Peter Drucker, The Practice of Management

Your legacy is, to a large extent, the people you promote
Your legacy is, to a large extent, the people you promote. About 6 in a 3-year assignment. A promotion decision is a de facto acquisition decision. You are turning over—lock, stock and barrel—a key element of your organization to Mary or Bob or Elizabeth or Sam. They will “own” their bit for several years. Of course we take promotion decisions “seriously”— but v-e-r-y rarely seriously enough. How about it? 147

Women Rule! 148

Source: Nicholas Kristof, “Twitter, Women, and Power,” NYTimes
For One [BIG] Thing … “McKinsey & Company found that the international companies with more women on their corporate boards far outperformed the average company in return on equity and other measures. Operating profit was … % higher.” Source: Nicholas Kristof, “Twitter, Women, and Power,” NYTimes

The data speak! McKinsey, no slouches analytically (understatement), demonstrate that gender balance on Boards yields dramatic financial rewards. (E.g., Dramatic = +56%.) 150

“Research [by McKinsey & Co.] suggests that
to succeed, start by promoting women.” —Nicholas Kristof/New York Times

The selfsame McKinsey offers a powerful generalization!
152

“In my experience, women make much better executives than men
“In my experience, women make much better executives than men.” —Kip Tindell, CEO, Container Store

Container Store is wildly successful—and is a mainstay among the “Fortune 100 Best Companies to Work For in America”—it was in fact recently ranked #1.

—Harvard Business Review
“Women are rated higher in fully 12 of the 16 competencies that go into outstanding leadership. And two of the traits where women outscored men to the highest degree — taking initiative and driving for results — have long been thought of as particularly male strengths.” —Harvard Business Review

Read carefully. Again, the source is close to unimpeachable. (Consider: All the previous quotes in this section have 5-star pedigrees.)

Women’s Strengths Match New Economy Imperatives: Link [rather than rank] workers; favor interactive-collaborative leadership style [empowerment beats top-down decision making]; sustain fruitful collaborations; comfortable with sharing information; see redistribution of power as victory, not surrender; favor multi-dimensional feedback; value technical & interpersonal skills, individual & group contributions equally; readily accept ambiguity; honor intuition as well as pure “rationality”; inherently flexible; appreciate cultural diversity. Source: Judy B. Rosener, America’s Competitive Secret: Women Managers 157

In the “modern” organization, huffing and puffing and shouting orders is dying. Gaining cooperation of scattered team members who don’t “report to” the [formally designated] leader is the emergent norm. Which—quite simply and persuasively—plays to women’s strengths.

Women’s Negotiating Strengths
Women’s Negotiating Strengths *Ability to put themselves in their counterparts’ shoes *Comprehensive, attentive and detailed communication style *Empathy that facilitates trust-building *Curious and attentive listening *Less competitive attitude *Strong sense of fairness and ability to persuade *Proactive risk manager *Collaborative decision-making Source: Horacio Falcao, Cover story/May 2006, World Business, “Say It Like a Woman: Why the 21st-century negotiator will need the female touch” 159

Quite a list, eh? (Wow!)

PORTRAIT OF A FEMALE INVESTOR 1. Trade less than men do 2
PORTRAIT OF A FEMALE INVESTOR 1. Trade less than men do 2. Exhibit less overconfidence—more likely to know what they don’t know 3. Shun risk more than male investors do 4. Less optimistic, more realistic than their male counterparts 5. Put in more time and effort researching possible investments—consider details and alternate points of view 6. More immune to peer pressure—tend to make decisions the same way regardless of who’s watching 7. Learn from their mistakes 8. Have less testosterone than men do, making them less willing to take extreme risks, which, in turn, could lead to less extreme market cycles Source: Warren Buffett Invests Like a Girl: And Why You Should Too, Louann Lofton, Chapter 2, “The Science Behind the Girl” 161

AND: Women tend to make better investment decisions
AND: Women tend to make better investment decisions. (Read in detail: another potent list!) 162

FYI/Higher math: “Gender balance” = 50%!

Gender balance = Gender balance. E. g
Gender balance = Gender balance. E.g., 10-person Board of Directors: Half of 10 is 5. Hence: 5F, 5M. PERIOD. 164

Gender Balance II: Don’t be stupid!

There are substantial reasons to believe that women in general are better leaders/ managers than men. The implication is NOT that we ought to toss male leaders out onto the street. The implication IS that if there is much less than F/M gender balance you are being … stupid.* PERIOD. (*Oh, and see below: WOMEN BUY EVERYTHING—CONSUMER AND COMMERCIAL. 166

Elizabeth Cady Stanton
(more or less) (31 March 2007)

I have been working non-stop on women’s issues since 1996
I have been working non-stop on women’s issues since To make a longish story short, in 2007 I went to a costume party in Vermont dressed as my great hero, Elizabeth Cady Stanton, by many measures the principal driving force in the USA’s Women’s Suffrage Movement. 168

THE MORAL IMPERATIVE: PEOPLE DEVELOPMENT
169

“Ten Million Jobs at Risk from Advancing Technology: Up to 35 percent of Britain's
jobs will be eliminated by new computing and robotics technology over the next 20 years, say Deloitte experts.” —Headline, Telegraph (UK), 11 November 2014 “Almost half of U.S. jobs are at high risk of computerization over the next 20 years, according to Oxford academics Carl Benedikt Frey and Michael A. Osborne.” —Harriet Taylor, CNBC, 9 March 2016

If you think being a ‘professional’ makes your job safe, think again.”
“The intellectual talents of highly trained professionals are no more protected from automation than is the driver’s left turn.” —Nicholas Carr, The Glass Cage: Automation and Us If you think being a ‘professional’ makes your job safe, think again.” —Robert Reich

There’s no way I can make a useful 100-word assessment
There’s no way I can make a useful 100-word assessment. I WILL SAY THERE IS SIGNIFICANT DISAGREEMENT AMONG TOP-TIER EXPERTS ON BOTH TIMING AND INTENSITY. On the other hand, dramatic change is on the way—and every employed person under, say, age 45 or perhaps 50 needs to be prepared for a dramatically altered tomorrow or the day after tomorrow at the latest. 172

2018/CORPORATE MANDATE #1: Your principal moral obligation as a leader is to develop the skillset, “soft” and “hard,” of every one of the people in your charge (temporary as well as semi-permanent) to the maximum extent of your abilities. The bonus: This is also the #1 mid- to long-term … profit maximization strategy! 173 173

This is arguably the most important slide in this set
This is arguably the most important slide in this set. The key phrase: MORAL OBLIGATION. Developing people has always been a winning strategy. But we are now addressing something much more profound: likely astronomic instability in the employment market. It is now the community duty of enterprise to be the lead player in addressing coming employment dislocation.* (*Remember the early-on quote by —Mihaly Csikszentmihalyi, in Good Business, “[Business has the] responsibility to increase the sum of human well-being.” ) 174

PEOPLE: “HOW YOU MAKE THEM FEEL ABOUT THEMSELVES”
175

No commentary in this section—simply read through and reflect on these quotes. PLEASE.
176

Amen! “What creates trust, in the end, is the leader’s manifest respect for the followers.” — Jim O’Toole, Leading Change

but people will never forget how you made them feel.” —Maya Angelou
“I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.” —Maya Angelou

“Leadership is about how you make people feel—about you, about the project or work you’re doing together, and especially about themselves.” —Betsy Myers, Take the Lead: Motivate, Inspire, and Bring Out the Best in Yourself and Everyone Around You

—Michael McKinney, LeadershipNow.com
“Most leaders try to get others to think highly of them, when they should be trying to get people to think more highly of themselves.” —Michael McKinney, LeadershipNow.com

“I didn’t have a ‘mission statement’ at Burger King. I had a dream
“I didn’t have a ‘mission statement’ at Burger King. I had a dream. Very simple. It was something like, ‘Burger King is 250,000 people, every one of whom gives a shit.’ Every one. Accounting. Systems. Not just the drive through. Everyone is ‘in the brand.’ That’s what we’re talking about, nothing less.” — Barry Gibbons

FIVE VALUE-ADDED STRATEGIES
182 182

The “8/80” Fiasco: TGRs/Things Gone Right LBTs/Little Big Things

Customers describing their service experience as “superior”: 8%
Companies describing the service experience they provide as “superior”: 80% —Source: Bain & Company survey of 362 companies, reported in John DiJulius, What's the Secret to Providing a World-class Customer Experience? 184

STUNNING. (The mother of all disconnects.)
185

<TGW and … >TGR [Things Gone WRONG-Things Gone RIGHT]
186 186

Quality—minimizing “TGWs”/Things Gone Wrong
Quality—minimizing “TGWs”/Things Gone Wrong*—is of the utmost importance. [*“TGWs”/Things Gone Wrong was a popular auto-defect measure for decades.] But fact is, in 2018, most things work pretty well—the former is not as sophisticated as the latter, but my Subaru is actually about as reliable as so-and-so’s Mercedes. (Squawk all you want, but I’ll stand by this statement; I just raced past the 150,000-mile mark on my Subbie’s odometer.) With TGWs more or less equal, the emphasis associated with differentiation switches to the other side of the equation: TGRs/THINGS GONE RIGHT. The trick propounded here is to focus—SYSTEMATICALLY—on adding to your product or service’s TGR population. 187

Conveyance: Kingfisher Air Location: Approach to New Delhi
188 188

“May I clean your glasses, sir?”
189 189

After a seminar in Mumbai, I flew to New Delhi to meet my wife—my 1st trip on Kingfisher Air. As we began our descent, the flight attendant walked down the business-class aisle (about ½ the aircraft), asking each of us with glasses (most of us) if we wanted those glasses cleaned. A “little thing”? Of course it was important that the plane landed safely and on time … but I will remember the glasses wiping bit until, more or less literally, my last breath! “Little BIG Thing”? Nope! Try … “Little BIG BIGGER BIGGEST Thing”! (That is, the essence of … VERY FOND/LASTING/WORD-OF-MOUTH-/MOUSE-/SCREEN-GENERATING [like now] MEMORIES.)

SMALL>>>>>BIG “Courtesies of a small and trivial character are the ones which strike deepest in the grateful and appreciating heart.” —Henry Clay "Let's not forget that small emotions are the great captains of our lives." –—van Gogh 191

I used the top quote as the epigraph for my book, The Little Big Things. It summarizes a view that I’ve held for over 40 years—instilled by academic studies and reinforced by years of business research and running my own business. The acts that move mountains are more likely to be pushing the wheelchair down the jetway [see earlier section on hiring] or polishing the glasses of the business class passengers—as opposed to spending months on crafting a “values statement” sneered at by most of our employees because it diverges so noticeably from the leadership’s moment-to-moment actions. I consider Henry Clay’s [and van Gogh’s] words here to be almost holy writ—and the heart of a strategy that retains customers and builds word of mouth/mouse/screen--the ultimate “TGR.”

COLLECTIVE SMALL >>>>>+++ BIG
193

THIS IS A CRITICAL STRATEGIC POINT
THIS IS A CRITICAL STRATEGIC POINT. Taking the “‘small’ stuff” very seriously and systematic attention thereto as a cultural-way-of-life can have enormous impact. 194

TGRs (on steroids): L(Very)BTs

Bag sizes = New markets:
Source: PepsiCo 196

Years ago, Frito Lay went through a new-product dry spell.
Sexy new this. Sexy new that. Nothing clicked. Frustrated, they gave up on “clever” and introduced—ho hum—new bag sizes. The traditional chip bag was augmented by the snack pack and the family size bag. Not only were normal-size bag sales not cannibalized, but sales of the new bags [effectively new markets] took off to the tune, eventually, of a billion $$$ or so. Little (“mere” bag size change) = BIG ($$$$).

Big carts = 1.5X Source: Walmart 198

To possibly spur bigger item [e. g
To possibly spur bigger item [e.g., appliance] sales, it occurs to Walmart to increase shopping cart size. [YAWN.] Enlarged cart: Big item—microwave ovens, etc.—sales soar … 50%. Walmart = $$$$$) 199

Las Vegas Casino/2X two-thirds.”
“When Friedman slightly curved the right angle of an entrance corridor to one property, he was ’” amazed at the percentage who entered increased from one-third to nearly two-thirds.” —Natasha Dow Schull, Addiction By Design: Machine Gambling in Las Vegas

Ye gads. Vegas. (Again, >$1B impact. ) (From … curving a driveway
Ye gads! Vegas! (Again, >$1B impact.) (From … curving a driveway ???!!! Little = B-I-G! ) 201

(1) Amenable to rapid experimentation/ failure “free” (PR, $$)
(2) Quick to implement/ Quick to Roll out (3) Inexpensive to implement/Roll out (4) Huge multiplier (5) An “Attitude” 202

I could go on. I’d love to go on. The cases are fun
I could go on. I’d love to go on. The cases are fun. The payoff is [potentially] enormous. To repeat, this section is, stripped down, about realizing the possible BIG BANG PAYOFF from constant [small-scale] experimentation. And per this slide, it’s quick, invisible, inexpensive. And perhaps, yes, with a payoff in the $B range. (WARNING: This, to repeat+++, is a … cultural … issue.) 203

DESIGN/ RADICAL HUMANIZATION

DESIGN triumphs! (10 August 2011) APPLE market cap > Exxon Mobil
205 205

I had been talking about design for 15 or 20 years
I had been talking about design for 15 or 20 years. The response was head nodding, but little in the way of action. But, as I see it, after 10 August 2011 my [and others’] efforts to put design on the front burner could no longer be ignored. That day, Apple’s market capitalization surpassed Exxon Mobil’s—and Apple became the most valuable company on earth. The rankings go up and down, to be sure, but Apple had unmistakably demonstrated that a strategy that put design at the head of the parade could pay off … [VERY] big Time. (I believe in this so much that I have a separate chapter on design in The Excellence Dividend —and I insist that design in 2018 is the #1 product or service differentiator.) (And design is one of the few things that may be—at is best—”safe” from the intrusion of artificial intelligence.) 206

“We don’t have a good language to talk about this kind of thing
“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 207

Apple design: “Huge degree of care.”
—Ian Parker, New Yorker, 23 March 2015, on Apple design chief Jony Ives

“Steve and Jony would discuss corners for hours and hours.”
—Laurene Powell Jobs

Design is indeed about soul—a topic I believe applies to the spirit and services provided by every organization or organizational unit. To product developers, sure, but to the 11-person training group as well (and with great intensity), and to the 7-person local appliance repair company, etc., etc. (Design is about soul—and, per the prior two slides, “a huge degree of care” in general; and, yes, corner fanaticism.) 210

—Robert Brunner, former Apple design chief
“Typically, design is a vertical stripe in the chain of events in a product’s delivery. [At Apple, it’s] a long, horizontal stripe, where design is part of every conversation.” —Robert Brunner, former Apple design chief

Design considerations permeate Apple. From stem to stern
Design considerations permeate Apple. From stem to stern. From top to bottom. I [repeat that I] passionately believe the same should be true for your unit or company—yes, unit too, the 11-person purchasing department, a 12-person unit in the finance department, etc. 212

“[Nest founder Tony Fadell] admitted, ‘Every business school in the world would flunk you if you came out with a business plan that said, “Oh, by the way, we’re going to design and fabricate our own screws at an exponentially higher cost than it would cost to buy them.”’ BUT THESE AREN’T JUST SCREWS. LIKE THE THERMOMETER ITSELF, THEY’RE BETTER SCREWS, EPIC SCREWS, SCREWS WITH, DARE I SAY IT, DEEPER MEANING. Functionally, they utilize a specific thread pattern that allows them to go into any surface, from wood to plaster to thin sheet metal. And the [custom] screwdriver feels balanced to the hand; it has the Nest logo on it and looks ‘Nest-y,’ just like everything from Apple looks ‘Apple-y.’” —Rich Karlgaard, The Soft Edge

DESIGN = “EPIC SCREWS WITH DEEPER MEANING. ” I love that
DESIGN = “EPIC SCREWS WITH DEEPER MEANING.” I love that. (P-L-E-A-S-E R-E-F-L-E-C-T.*) (This is NOT a “clever quote.” It is practical advice to you about the ubiquity of and value of a design obsession.) 214

Design is [EVERYTHING] …. The reception area. The restrooms
Design is [EVERYTHING] … * The reception area * The restrooms!! * Dialogues at the call center * Every electronic [or paper] form * Every business process “map” * Every * Every meeting agenda/setting/etc. * Every square meter of every facility * Every new product proposal * Every manual * Every customer contact * A consideration in every promotion decision * The presence and ubiquity of an “Aesthetic sensibility”/ “Design mindfulness” * An encompassing “design review” process * Etc. * Etc.

The ubiquity of design, value-added … DIFFERENTIATOR #1
216

Radical Humanization*
Extreme Humanization Radical Humanization* *ExtremeHumanization.com RadicalHumanization.com

as big as a Band-Aid.’” EXCELLENCE: THE TRIUMPH OF HUMANITY
“Janet Dugan, a healthcare architect, took inspiration from her recent experience having an MRI (Magnetic Resonance Image) scan. While she was lying still and waiting, she noticed a small mirror that had been placed below the head support piece. It was angled so that she could see through the barrel to the radiology technician and make eye contact with him. ‘What a small thing,’ she told me. ‘And yet what a difference it made. I felt less alone. I was connected to another person at the very moment I needed support. And even though I’m not claustrophobic, it calmed me some to be able to see out of the barrel … I [saw] that the technician was friendly and that the nurse went out of her way to make me laugh. … I firmly believe in the power of design to contribute to the healing process—that architecture can shape events and transform lives. But that day, in that experience, the thing that really gave me comfort was a tiny mirror about as big as a Band-Aid.’” —Tim Leberecht, The Business Romantic: Give Everything, Quantify Nothing, and Create Something Greater Than Yourself

Beating back—and thriving—in the Age of AI
Beating back—and thriving—in the Age of AI. A big part of my answer is: HUMANIZATION. And then some. I’ve come to call my version of humanization “radical” and/or “extreme”—yes, “a mirror about as big as a Band-Aid” merits “radical”/“extreme.” “Bottom line”: I have coined the phrase/s … RADICAL HUMANIZATION. EXTREME HUMANIZATION. (FYI: The Band-Aid quote is the epigraph of The Excellence Dividend. An indicator of the importance I give to this concept.) 219

that almost no new vehicle in recent memory has provoked more smiles.”
THE LIMITS OF AI???/ “RADICAL HUMANIZTION” “It is fair to say that almost no new vehicle in recent memory has provoked more smiles.” —review of the MINI Cooper S, reported in Donald Norman, Emotional Design: Why We Love (or Hate) Everyday Things

And: SMILES. I love that, too. (Again: Please reflect
And: SMILES. I love that, too. (Again: Please reflect.) (Epic screws, peerless corners, mirrors the size of Band-Aids, and smiles … become the centerpiece of “strategic” “value-added” conversations.) (Donald Norman is the great “functionality” design guru. He championed the idea that design meant much more than aesthetics. The ease of use, etc. was of the utmost importance. Then, just a few years ago, he had a new epiphany—call it the “more smiles” epiphany. That is great design is aesthetically pleasing, functionally excellent—AND it hooks you emotionally. From this came his great book, Emotional Design: Why We Love (or Hate) Everyday Things—the MINI Cooper S example came from that book.) 221

I believe that promise trumps fulfillment.
“As a marketing executive, I view business as one of the greatest adventures of the human enterprise—if not the greatest. But I am not just a businessman: I am also an unapologetic romantic. I believe the world would be a better place if we had more romance in our lives. I believe that promise trumps fulfillment. I believe that emotion eats reason for breakfast. I am not a daydreamer, idealist, or social activist. I am a business romantic.” —Tim Lebrecht, The Business Romantic: Give Everything, Quantify Nothing, and Create Something Greater Than Yourself

Tim Lebrecht gives his two—or ten—cents in his superb and profound book … The Business Romantic: Give Everything, Quantify Nothing, and Create Something Greater Than Yourself (Among other things, Tim was the chief marketing officer at Frog Design.) 223

Value-Added on Steroids: The [ENORMOUS] [UBIQUITOUS] “Services Added” Opportunity

“Rolls-Royce now earns MORE from tasks such as managing clients’ overall procurement strategies and maintaining aerospace engines it sells than it does from making them.” —Economist

Engines—to engine and aircraft services
Engines—to engine and aircraft services. Or, perhaps: AIRCRAFT SERVICES … and, uh, engines too? (FYI: In my view, this, especially writ large, is pretty damned extraordinary!)

UPS to UPS

“It’s all about solutions
“It’s all about solutions. We talk with customers about how to run better, stronger, cheaper supply chains. We have 1,000 engineers who work with customers …” —Bob Stoffel, UPS senior exec

Growth engine flips: From packages [“P”] to integrated logistics/supply-chain creation and management services [ “S” ].

UPS = United Problem Solvers* *Service mark

Not attempted cleverness on my part. An official UPS service mark.

The Professional Service Firm50: Fifty Ways to Transform Your “Department” into a Professional Service Firm Whose Trademarks are Passion and Innovation! 232

Another way to look at “all this” is that the organizations described immediately above [UPS, Rolls-Royce] are becoming—back to the future— professional services firms. I first wrote about this in 1999, suggesting, at the micro-level, that any “department” aiming to survive the coming tumult must become a full-fledged no-baloney professional services firm in pursuit of … measurable, profitable, externally recognized value added. E.g., …

*PSF/ Professional Service Firm (See my …
Training Inc. , a 14-person “business unit”* in a 50-person HR department in a $200M division in a $3B corporation—aiming for Excellence & WOW & Transformational Client Support! *PSF/ Professional Service Firm (See my … Professional Service Firm 50: Fifty Ways to Transform Your “Department” Into A Professional Service Firm Whose Trademarks Are Passion and Innovation.)

The extant “training department” [aiming to survive, circa 2018, in the face of outsourcing, globalization and the white-collar tech revolution] becomes a full-fledged “firm”/“business unit”/“Training, Inc.”—and its internal-to-the-corporation “client service” activities aim to add [dramatic, innovative, measurable, profitable] value for (1) those clients and, overall, for (2) the larger firm in which they are imbedded—and perhaps (3) for outsiders as well.

Department Head/“Cost center”/“Overhead” to … Managing Partner, HR [IS, R&D, etc.] Inc.
236

The boss of the former “training department” [or HR department or Purchasing department] becomes the de facto/de jure Managing Partner of that newly minted full-fledged professional services firm called “Training Inc.” [or HR Inc. or Purchasing Inc. or …].

Big Idea: “Corporation” as MEGA-“PSF”. I. e
Big Idea: “Corporation” as MEGA-“PSF”* *I.e., a de facto collection of professional service firms aligned—and integrated—to create value for customers and their ecosystems. 238

And the firm itself—e.g., Rolls Royce, UPS—becomes a de facto/de jure
“mega-PSF.”

Social Business/ Customer Engagement/
Customer Control/

“It takes 20 years to build a reputation and 5 minutes to ruin it.”
Welcome to the Age of Social Media “The customer is in complete control of communication.” “What used to be ‘word of mouth’ is now ‘word of mouse.’ You are either creating brand ambassadors or brand terrorists doing brand assassination.” “It takes 20 years to build a reputation and 5 minutes to ruin it.” Source: John DiJulius, The Customer Service Revolution

The power of each of these quotes—let alone the three taken together—is impossible to overstate. (And there is not a smidgeon of exaggeration.)

“I would rather engage in a Twitter conversation with a single customer than see our company attempt to attract the attention of millions in a coveted Super Bowl commercial. Why? Because having people discuss your brand directly with you, actually connecting one-to-one, is far more valuable—not to mention far cheaper!. … “Consumers want to discuss what they like, the companies they support, and the organizations and leaders they resent. They want a community. They want to be heard. “[I]f we engage employees, customers, and prospective customers in meaningful dialogue about their lives, challenges, interests, and concerns, we can build a community of trust, loyalty, and—possibly over time—help them become advocates and champions for the brand.” —Peter Aceto, CEO, Tangerine (from the Foreword to A World Gone Social, by Ted Coine & Mark Babbit) (FYI: See Peter Aceto’s book Weology.)

Single twitter exchange >>> Super bowl ad.
This extraordinary comment comes from a CEO in … financial services. (Tangerine is a large, wildly successful Canadian bank.) (While perhaps this is an exaggeration—the underlying point is exactly on the money. Hmmmm … perhaps it is NOT an exaggeration. Think on it.)

Going “Social”: Location and Size Independent
“Today, despite the fact that we’re just a little swimming pool company in Virginia, we have the most trafficked swimming pool website in the world. Five years ago, if you’d asked me and my business partners what we do, the answer would have been simple, ‘We build in-ground fiberglass swimming pools.’ Now we say, ‘We are the best teachers … in the world … on the subject of fiberglass swimming pools, and we also happen to build them.’” —Jay Baer, Youtility: Why Smart Marketing Is About Help, Not Hype

A small swimming pool firm from a small town takes to social media with a vengeance and becomes a major [world!] force in its market space. Cool. VERY cool.

SM More Powerful Than Nuclear Weapons
SM More Powerful Than Nuclear Weapons??? The Perfect Weapon: War, Sabotage, and Fear in the Cyber Age —David Sanger Like War: The Weaponization of Social Media —P.W. Singer and Emerson Brooking War in 140 Characters: How Social Media Is Reshaping Conflict in the Twenty-First Century —David Patrikarakos

The ultimate … CAUTION FLAG.
A doubtless unnecessary reminder: the power for good of social media is enormous. So is the power to do evil. The renown authors of these books convincingly contend that social media, used for evil ends, is greater than the power of nuclear weapons.

Women BUY … [Everything] !
249

Source: Headline, Economist
W > 2X (C + I) = $28 TRILLION “Forget CHINA, INDIA and the INTERNET: Economic Growth Is Driven by WOMEN.” Source: Headline, Economist 250 250

Women as Decision Makers/Various sources Home Furnishings … 94% Vacations … 92% (Adventure Travel … 70%/ $55B travel equipment) Houses … 91% D.I.Y. (major “home projects”) … 80% Consumer Electronics … 51% (66% home computers) Cars … 68% (influence 90%) All consumer purchases … 83% * Bank Account … 89% Household investment decisions … 67% Small business loans/biz starts … 70% Health Care … 80% *In the USA women hold >50% managerial positions including >50% purchasing officer positions; hence women also make the majority of commercial purchasing decisions. 251

Source: Martha Barletta/TrendSight Group
Women [USA] as … Purchasing agents: 55% Purchasing managers: 42% Wholesale/retail buyers: 52% Employee health-benefit plans: 60% Source: Martha Barletta/TrendSight Group 252

“Women are THE majority market” —Fara Warner/The Power of the Purse
253 253

The previous section makes a solid case that women on average are more effective leaders than men. But there is another compelling reason to examine women’s penetration of corporate leadership ranks. Namely: WOMEN BUY EVERYTHING. That is, women are the purchasing decision makers for about 80% of consumer goods. Moreover, women fill over 50% of corporate purchasing officer slots in the U.S. Hence, she is as likely to be the decision maker relative to the $150 million IS infrastructure project as she is to select the family healthcare plan. Looked at globally, the women’s market is approximately $28 trillion. As the Economist calculated it, that’s more than twice the combined Chinese and Indian GDP. Inarguably, women’s purchasing power should be reflected in both corporate strategy and corporate executive leadership. 254

in Assets Will Shift to Women by 2020”
“$22 Trillion in Assets Will Shift to Women by 2020” —The Street and Investment News (Full title of the article: “$22 in Assets Will Shift to Women by 2020: Why Men Need to Watch Out”)

$22T: Women are gaining significantly more heft in the job market
$22T: Women are gaining significantly more heft in the job market. Boomer males on average check out several years before their mates. Net [NEARTERM] result: $22,000,000,000,000. 256

Can you pass the … “Squint test” ?
257

SQUINT at a picture of the Executive Team
SQUINT at a picture of the Executive Team. Does it look APPROXIMATELY like the composition of the market?* If not (“IMHO”), there is a problem?!** *Most likely the great majority of sales are to women. **Men have notorious shortfalls when it comes to conceiving and designing and marketing products and services for women. 258

We [old folks like me] have [ALL] the $$$$$$

“PEOPLE TURNING 50 TODAY HAVE MORE THAN HALF OF THEIR ADULT LIFE AHEAD OF THEM.” —Bill Novelli, 50+: IGNITING A REVOLUTION TO REINVENT AMERICA 260

PROFOUND. >50@50: This one really put things in perspective for me.
Profound CONSEQUENCES. (It’s so obvious after the fact—though I’d never seen it laid out this way. [It floored me, silly as that may sound.] These days the odds of pretty good health until 75 or so are pretty high. So if you figure you get warmed up at about 25, and then keep steamin’ ’til 75 [or so], it is, yes, about half-to-go at 50.)

Average # of cars purchased per [USA] household, “lifetime”: 13 Average # of cars bought per household after the “head of household” > age 50: 7 Source: Marti Barletta, PrimeTime Women 262

Wouldn’t know it based on car company behavior.

“‘Age Power’ will rule the 21st century, and we are woefully unprepared.” —Ken Dychtwald, Age Power: How the 21st Century Will Be Ruled by the New Old

44-65: “NEW CUSTOMER MAJORITY” Source: Ageless Marketing, David Wolfe & Robert Snyder
265 265

BoomerBucks. Boomer turns 50: every 8 seconds. 2009: majority of U. S
BoomerBucks! Boomer turns 50: every 8 seconds : majority of U.S. households headed by someone over : U.S. population up 22.9 million; 22.1 million in over-50 group : 1 in 5 adults is F, over Women between who are single: 35%. Age 45-54: highest average income, $59, 021 (national average is $42,209). FASTEST GROWING INCOME CATEGORY: WOMEN, (4X men in same category). Women, age 60-64: 50% still in workforce. Highest net worth: families, ($182,000). People over 50: 70% to 79% of all financial assets; 80% of all savings accounts; 62% of all large Wall Street asset accounts; 66% of $$ invested in the stock market. Age 50+: 29% of population, 40% of total consumer spending, 50% of discretionary spending. Next 2 decades: BOOMERS WILL INHERIT $14 TRILLION-$25 TRILLION (“largest intergenerational transfer of wealth in history”). —Martha Barletta, PrimeTime Women

50+ $7T wealth (70%)/ $2T annual income 50% all discretionary spending 79% own homes 40M credit card users 41% new cars/48% luxury cars $610B healthcare spending/ 74% prescription drugs 5% of advertising targets Source: Ken Dychtwald, Age Power: How the 21st Century Will Be Ruled by the New Old

55-64 vs 25-34 E. g. : New cars & trucks: 20% more spending
55-64 vs E.g.: New cars & trucks: 20% more spending. Meals at full-service restaurants: +29%. Airfare: +38%. Sports equipment: +58%. Motorized recreational vehicles: +103%. Wine: 113%. Maintenance, repairs and home insurance: +127%. Vacation homes: +258%. Housekeeping & yard services: +250% to +500%. Source: Martha Barletta, PrimeTime Women

55+ > 55- Forrester Research: “[Age 55-plus] are more active in online finance, shopping and entertainment than those under 55.” 269 269

FACTS. MORE FACTS.* (*And … $$$$$$$$$$$ )

“Marketers’ attempts at reaching those over 50 have been miserably unsuccessful. No market’s motivations and needs are so poorly understood.” —Peter Francese, founding publisher, American Demographics 271

“Households headed by someone 40 or older enjoy 91% of our population’s net worth. … The mature market is the dominant market in the U.S. economy, making the majority of expenditures in virtually every category.” —Carol Morgan & Doran Levy, Marketing to the Mindset of Boomers and Their Elders 272

>50 50% spending 10% marketing budgets

THE market. WOEFULLY under-attended. STUPID.
274

“Baby-boomer Women: The Sweetest of Sweet Spots for Marketers” —David Wolfe and Robert Snyder, Ageless Marketing 275

Women + Old: “Sweetest of Sweet Spots for Marketers.” So????????????????????????????
277

NOT an “Initiative.” Wholesale STRATEGIC realignment.
278

The answer is most definitely NOT a “2018 women’s initiative” or a “2018 mature-market initiative.” The size of the opportunity/opportunities is such that EVERY ASPECT of the organization must be examined in light of any serious effort to master these markets. 279

INNOVATION: TURNING THE ORGANIZATION INTO A PLAYGROUND
280 280

INNOVATION I/Lesson50+: WTTMSW+
281 281

No kidding, this [WTTMSW] truly is … the only thing I’ve learned “for sure” … in the 50+ (!) years since I began my managerial career—as a U.S. Navy Seabee/combat construction battalion ensign in Vietnam.

WTTMSW 283

WHOEVER TRIES THE MOST STUFF WINS 284

“Show up” and “Try it” are probably (UNDOUBTEDLY
“Show up” and “Try it” are probably (UNDOUBTEDLY?) the two most durable pieces of advice that can be imagined—or offered. On the other hand, they do belong squarely in the “easier said than done” category. Some organizations thrive on playfulness (see below); most don’t. Hence the “simple” idea of a “try it” society/organization is actually the deepest of cultural issues.

WTTMSW++++ “SPONTANEOUS DISCOVERY PROCESS”

The Nobel Laureate (Economics) F. A
The Nobel Laureate (Economics) F.A. Hayek is a principal theorist of capitalism and champion of freedom from tyranny. Among his many contributions is his description of economic growth as a “spontaneous discovery process.” That is, sustained growth is stunted, or reversed, by a master plan. (His renowned anti-socialist tome was titled The Road to Serfdom.) Not unlike Adam Smith’s “hidden hand,” it is the spontaneous interaction among economic players, including producers and customers, that, through a Darwinian process of selection, results in ragged-but-almost-certain-long-term progress. Successful variants emerge through struggle—rather than arrive on a tidy train following a grand plan. (In a far less consequential fashion, Bob Waterman and I via In Search of Excellence de facto fought a war against the regnant strategic planning mavens.)

“WE HAVE A STRATEGIC PLAN. IT’S CALLED ‘DOING THINGS
“WE HAVE A STRATEGIC PLAN. IT’S CALLED ‘DOING THINGS.’ ” —Herb Kelleher “DON’T ‘PLAN.’ DO STUFF.” —David Kelley/IDEO SCREW IT. JUST DO IT. —book title, Richard Branson

—Bloomberg by Bloomberg
“We made mistakes, of course. Most of them were omissions we didn’t think of when we initially wrote the software. We fixed them by doing it over and over, again and again. We do the same today. While our competitors are still sucking their thumbs trying to make the design perfect, we’re already on prototype version #5. By the time our rivals are ready with wires and screws, we are on version #10. It gets back to planning versus acting: We act from day one; others plan how to plan—for months.” —Bloomberg by Bloomberg 289

“The difference between Bach and his forgotten peers isn’t necessarily that he had a better ratio of hits to misses. The difference is that the mediocre might have a dozen ideas, while Bach, in his lifetime, created more than a thousand full-fledged musical compositions. A genius is a genius, psychologist Paul Simonton maintains, because he can put together such a staggering number of insights, ideas, theories, random observations, and unexpected connections that he almost inevitably ends up with something great. ‘Quality,’ Simonton writes, ‘is a probabilistic function of quantity.’” * —Malcolm Gladwell, “Creation Myth,” New Yorker *Joe Murray, to TJP, on winning a Nobel in medicine for the 1st successful organ transplant: “We did more procedures.” 290

Even … Bach! 291

“You can’t be a serious innovator unless and until you are ready, willing and able to seriously play. ‘Serious play’ is not an oxymoron; it is the essence of innovation.” —Michael Schrage, Serious Play SORRY … I LOVE THIS. “SERIOUS PLAY” … OR … FUHGEDDABOUDIT!!!!!!!!!!!!!!!! No bull: I’m 57 … and I believe that this is … THE Truth. NO SHIT. 292

But there is a [BIG] problem with WTTMSW
But there is a [BIG] problem with WTTMSW. And that is that you can’t effectively “do” WTTMSW until you have in effect a “culture” of the likes of … SERIOUS PLAY. MIT Media Lab guru Michael Schrage wrote an entire book on the topic—a “bible” of sorts for me. In short, developing and maintaining a CULTURE OF SERIOUS PLAY is an enormous task—but a “must do” task in these hyper-turbulent, innovate-or-die times. (I urge you to buy the book. AND … do your damnedest to implement its prescriptions.) 293

“Fail. Forward. Fast. ” —High Tech CEO, Pennsylvania “Fail faster
“Fail. Forward. Fast.” —High Tech CEO, Pennsylvania “Fail faster. Succeed sooner.” —David Kelley/IDEO “REWARD excellent failures. PUNISH mediocre successes.” —Phil Daniels, Sydney exec “Success represents one percent of your work, which results only from the ninety-nine percent that is called failure.” —Soichiro Honda

THAT DON’T EMBRACE FAILURE — eventually get in
“What really matters is that companies that don’t continue to experiment— COMPANIES THAT DON’T EMBRACE FAILURE — eventually get in a desperate position, where the only thing they can do is make a ‘Hail Mary’ bet at the end.” —Jeff Bezos

“It is not enough to ‘tolerate’ failure—you must ‘celebrate’ failure
“It is not enough to ‘tolerate’ failure—you must ‘celebrate’ failure.” —Richard Farson (Whoever Makes the Most Mistakes Wins) 296

look at that—that’s something we want
“We normally shoot a few takes, even if the first one is terrific … because what I’m really hoping for is a ‘mistake.’ I think that most of the really great moments in my films were not planned. They were things that naturally occurred and we said, ‘Wow, look at that—that’s something we want to keep.’ That’s when you hit the truth button with the audience.” —Robert Altman, on his Academy Award winning “Gosford Park”

At the heart of the “SERIOUS PLAY” culture is instilling the essential notion that failure is an expected—and celebrated—part of life for a determined innovator. 298

“EXPERIMENT FEARLESSLY” Source: BusinessWeek, “Type A Organization Strategies: How to Hit a Moving Target”—TACTIC #1 “RELENTLESS TRIAL AND ERROR” Source: Wall Street Journal, cornerstone of effective approach to “rebalancing” company portfolios in the face of changing and uncertain global economic conditions 299 299

WTTMSW. Universal Success Strategy #1.
300

“If things seem under control, you’re just not going fast enough.”
—Mario Andretti, race driver “I’m not comfortable unless I’m uncomfortable.” —Jay Chiat “If it works, it’s obsolete.” —Marshall McLuhan

Hustle.2018. NOT OPTIONAL. “In control”.2018 NOT POSSIBLE.

WTTMSASTMSUTFW 303

WHOEVER TRIES THE MOST STUFF AND SCREWS UP FASTEST WINS 304

Hence the expanded version of WTTMSW.
305

Innovation is non-linear. Innovation is a circus.
Innovation is messy. Innovation is non-linear. Innovation is a circus. Innovation depends in full on a robust … “culture of ‘try it now.’” Innovation is fun. Innovation is heartbreaking. Innovation is not for sissies. If you know where you’re heading … you’re not innovating. If things “work out as planned” … you weren’t chasing anything interesting.

!!!!!!!* (*Innovation, all you need to know [more or less].)
307

#2/4,096: “YOU MISS 100% OF THE SHOTS YOU NEVER TAKE.” —Wayne Gretzky
308 308

All you need to know in life? FYI: I’m serious. (Or close to it.)
(This contended with the Branson quote—“Business has to give people enriching, rewarding lives or it's simply not worth doing”—as my choice for the #1 position in my 4,096-slide/MOAP/“Mother Of All Presentations.” At any rate, it ranks no lower than #2.)

“Intelligent people can always come up with intelligent reasons to do nothing.” —Scott Simon
310

“Andrew Higgins , who built landing craft in WWII, refused to hire graduates of engineering schools. He believed that they only teach you what you can’t do in engineering school. He started off with 20 employees, and by the middle of the war had 30,000 working for him. He turned out 20,000 landing craft. D.D. Eisenhower told me, ‘Andrew Higgins won the war for us. He did it without engineers.’ ” —Stephen Ambrose 311

A bit snarky. But also a bit true.

INNOVATION II: We Are What We Eat. We Are Who We Hang Out With.

Innovation is a life or death proposition—as never before.
WTTMSW/Whoever Tries The Most Stuff Wins is my #1. The HOF/Hang Out Factor is #2. . It is, alas, largely unattended to, especially as a Strategic Advantage [or disadvantage]. And: THE “[HANG OUT] PROCESS” MUST BE SYSTEMATIC. MUST BE MANAGED.

Diversity: “IT IS HARDLY POSSIBLE TO OVERRATE THE VALUE OF PLACING HUMAN BEINGS IN CONTACT WITH PERSONS DIS-SIMILAR TO THEMSELVES, AND WITH MODES OF THOUGHT AND ACTION UNLIKE THOSE WITH WHICH THEY ARE FAMILIAR. SUCH COMMUNICATION HAS ALWAYS BEEN, AND IS PECULIARLY IN THE PRESENT AGE, ONE OF THE PRIMARY SOURCES OF PROGRESS.” —John Stuart Mill ( )

“The only real voyage consists not of seeking new landscapes,
but in having new eyes; in seeing the universe through the eyes of another, one hundred others—in seeing the hundred universes that each of them sees." —Marcel Proust

Then. Now. ( “hardly possible to overate” —amen.)

be either a blessing or a curse.” —Billy Cox
“You will become like the five people you associate with the most—this can be either a blessing or a curse.” —Billy Cox 318

Worthy of a lot of thought.
Waaaaaaaaaaaaay beyond “amusing.” Instead: STRATEGIC. (So think about it. If you dare …) (For most of us most of the time the answer is “same old same old.” The “same old” may be great folks—but “same old” nonetheless. = DISASTER.2018.)

The “Hang Out Axiom”: “HANG OUT WITH ‘COOL’ AND THOU SHALT BECOME MORE COOL. HANG OUT WITH ‘DULL’ AND THOU SHALT BECOME MORE DULL. PERIOD.”

PERIOD. It really is about this simple. (To state.)

The “We are what we eat”/ “We are who we hang out with” Axiom: At its core, every (!!!) relationship-partnership decision (employee, vendor, customer, etc., etc.) is a strategic decision about: “Innovate, ‘Yes’ or ‘No’ ” 322 322

Key words: EVERY. STRATEGIC.

Measure Portfolio “Strangeness Co-efficient”: 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 composition Etc.

A measured “strangeness score” on your portfolio of contacts of every sort.
No kidding. It is that important. MEASURE.

CUSTOMERS: “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

“Our strategies must be tied to leading edge customers on the attack
“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

SUPPLIERS: “There is an ominous downside to strategic supplier relationships. An SSR supplier is not likely to function as any more than a mirror to your organization.” —Wayne Burkan, Wide Angle Vision: Beat the Competition by Focusing on Fringe Competitors, Lost Customers, and Rogue Employees

“[CEO A.G.] Lafley has shifted P&G’s focus on inventing all its own products to developing … OTHERS’ INVENTIONS AT LEAST HALF THE TIME. One successful example, Mr. Clean Magic Eraser, based on a product found in an Osaka market.” —Fortune 329

Bringing the prior list to life re customers, vendors, R&D.
(Please read these carefully—they are by and large precise assessments of what many would say are not measurable.)

“DON’T BENCHMARK, ‘OTHER’ MARK!”
331

Forget [mostly] your industry
Forget [mostly] your industry. Learn from the most interesting folks in other industries. What a way to get a jump on your rivals. There are so so so many incredible firms out and about plying oddball niches—and, moreover, they tend to love to share their “secrets.”

“The Bottleneck is at the … “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 … Top of the Bottle” — Gary Hamel/Harvard Business Review 333

On my “All-Time Top TEN” slides list
On my “All-Time Top TEN” slides list. Again: Of the utmost [STRATEGIC] importance. 334

At least two members under 30 At least three women
Diversity: Board Fit for the Age/2018 Consider a 10-person Board of Directors fit for Here are my compositional “rules” (categories not mutually exclusive)*: At least two members under 30 At least three women One IT/data analytics superstar One or, better yet, two entrepreneurs One person with a “weird” background—artist, musician, shaman, etc. No more than two (one?) over 60 No more than three (four?) with MBAs (Possible: One VC) (Possible: One designer) (*Partial inspiration: W. Ross Ashby’s “Law of Requisite Variety.” The diversity of the board should roughly match the diversity of the context/environment.)

How does your Board stack up?
336

“Who’s the most interesting person you’ve met in the last 90 days
“Who’s the most interesting person you’ve met in the last 90 days? How do I get in touch with them?” —Fred Smith 337 337

SO HAVE YOU GOT A GOOD ANSWER? )
Maybe not such an easy question to answer? (It isn’t/wasn’t for me, at any rate.) Take it seriously. VERY seriously. (P-L-E-A-S-E.) (Origin: I was once on a CNN panel with FedEx founder Fred Smith. He asked me the question on the prior slide. I didn’t have a good answer. 25 years later, I’m still mortified. SO HAVE YOU GOT A GOOD ANSWER? )

LOSERS AND WINNERS 339 339

AND THE WINNERS AREN’T/ARE
340 340

“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 … Source: Paul Ormerod, Why Most Things Fail: Evolution, Extinction and Economics 341 341 341

“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 342 342 342

Good for laughs. But is it funny?

Source: Richard Foster (via Rita McGrath/HBR/12.26.13
S&P 500 +1/-1* *Every … 2 weeks! Source: Richard Foster (via Rita McGrath/HBR/

Talk abut churn/ Instability!
I was flabbergasted by this. The S&P 500 defines the USA economy. The BIGGEST of the BIG guys. And yet one drops off the list … EVERY 2 WEEKS. Wow! Talk abut churn/ Instability!

“Mr. Foster and his McKinsey colleagues collected detailed performance data stretching back 40 years for 1,000 U.S. companies. They found that NONE of the long-term survivors managed to outperform the market. Worse, the longer companies had been in the database, the worse they did.” —Financial Times 346 346

The Giants under-perform. (1,000 times among 1,000 companies
The Giants under-perform. (1,000 times among 1,000 companies.) The Giants treat efficiency as Holy Writ. The Giants cut jobs. (And jobs … and then more jobs.) The giants boost short-term profits at the cost of jobs and innovation; death is generally nigh. The giants are lousy innovators. “Maximizing shareholder value”—which is NOT required by law—is a losing strategy. (There is a ton of evidence to support these hypotheses in The Excellence Dividend.) 347

“On the face of it, shareholder value is the dumbest idea in the world
“On the face of it, shareholder value is the dumbest idea in the world. Shareholder value is a result, not a strategy. … Your main constituencies are your employees, your customers and your products.” —Jack Welch, FT, , page 1 The notion that corporate law requires directors, executives, and employees to maximize shareholder wealth simply isn’t true. There is no solid legal support for the claim that directors and executives in U.S. public corporations have an enforceable legal duty to maximize shareholder wealth. The idea is fable.” —Lynn Stout, professor of corporate and business law, Cornell Law school, in The Shareholder Value Myth: How Putting Shareholders First Harms Investors, Corporations, and the Public

Joseph Bower (and Lynn Paine) on the failure to manage for the long term: “The Error at the Heart of Corporate Leadership” “Managing for the long term”: Long>>>Short Revenue Earnings per share Profit Market capitalization Job creation Source: HBR/May-June 2017/COVER

Much of the poor performance of the Giants can be placed squarely at the feet of the [relatively new/1970s] gospel of Shareholder Value Maximization—which, among [many] other things, leads to an all encompassing obsession with short-term profitability and an excessive drive to cut costs, including R&D, which sacrifices innovation and thence the future. The Godfather of the Harvard Business School faculty, Joseph Bower (with Lynn Paine) wrote a scathing cover article in the Harvard Business Review, “The Error at the Heart of Corporate Leadership,” damning the shareholder value maximization movement, supported to the extreme in his own school. 350

AND THE WINNERS AREN’T/ARE
351 351

Vernon Hill Commerce Bank/Metro Bank Larry Janesky Basement Systems Inc. Jim Penman Jim’s Group Jungle Jim Bonaminio Jungle Jim’s International Market

I … L-O-V-E SMEs. They create the jobs and are responsible for most innovation. The Excellence Dividend’s dedication includes four of my favorite SME chiefs, starting with Vernon Hill. 353

Basement Systems Inc. (Larry Janesky/Seymour CT)
*Basement Systems Inc. (Larry Janesky/Seymour CT) *Dry Basement Science (100,000++ copies!) *1990: $0; 2003: $13M; : $120,000,000

I especially love SMEs in industries others most likely would call boring. Drying out basements? Well, that gives you a great storage space or extra bedroom or family room. (Which is a pretty big deal.) And it’s given Larry Janesky a $120 million business. “All things basementy” he calls it. 355

W.A. Coppins Ltd.* (Coppins Sea Anchors/ PSA/para sea anchors)
The Magicians of Motueka (PLUS)! W.A. Coppins Ltd.* (Coppins Sea Anchors/ PSA/para sea anchors) *Textiles, 1898; thrive on “wicked problems” —e.g., U.S. Navy STLVAST (Small To Large Vehicle At Sea Transfer); custom fabric from W. Wiggins Ltd./Wellington (specialty nylon, “Dyneema,” from DSM/Netherlands)

Grooves on, to use its term … “wicked problems.”
Motueka, New Zealand, is a peanut-sized town. (Very near where my wife and I live in the North American winter.) But it sports BEST-IN-WORLD in the high-value-added business of sea anchors. Clients include the U.S. Navy and the Norwegian government. Grooves on, to use its term … “wicked problems.” (I organized a keynote speech to New Zealand’s business and government leaders around W.A. Coppins—an exemplar of global business “domination” in a small corner of a small country.)

Aizenkobo Indigo Workshop

VERY small business. Kyoto. Masters of INDIGO. Perhaps best in the world at what they do. The chief is a global indigo guru—lecturing around the world.

Going “Social”: Location and Size Independent
“Today, despite the fact that we’re just a little swimming pool company in Virginia, we have the most trafficked swimming pool website in the world. Five years ago, if you’d asked me and my business partners what we do, the answer would have been simple, ‘We build in-ground fiberglass swimming pools.’ Now we say, ‘We are the best teachers … in the world … on the subject of fiberglass swimming pools, and we also happen to build them.’” —Jay Baer, Youtility: Why Smart Marketing Is About Help, Not Hype

Recall from the value-added section: A small swimming pool firm takes to social media with a vengeance and becomes a major [world!] force in its market space.

Jim’s Dog Wash Jim’s Mowing Canada Jim’s Mowing UK Jim’s Antennas
Jim’s Bookkeeping Jim’s Building Maintenance Jim’s Carpet Cleaning Jim’s Car Cleaning Jim’s Computer Services Jim’s Dog Wash Jim’s Driving School Jim’s Fencing Jim’s Floors Jim’s Painting Jim’s Paving Jim’s Pergolas [gazebos] Jim’s Pool Care Jim’s Pressure Cleaning Jim’s Roofing Jim’s Security Doors Jim’s Trees Jim’s Window Cleaning Jim’s Windscreens Source: Jim Penman, What Will They Franchise Next? The Story of Jim’s Group 362 362

Jim Penman thrives on routine-ish tasks that others don’t like to do
Jim Penman thrives on routine-ish tasks that others don’t like to do. He started by mowing lawns as a grad student—and subsequently has birthed about 3,000 franchises along the way doing any damn thing you can imagine and then some. Maybe boring to you—but Jim’s Group is as good [and exiting] as it gets for me! 363

Retail Superstars: Inside the 25 Best Independent Stores in America —by George Whalin
364 364

The title speaks for itself
The title speaks for itself. Folks who’ve stayed independent, taken on the “big box” crowd—and succeeded almost beyond measure. (God alone knows how many copies of this book I’ve given away. 50? 100? More?? It consists of 25 case studies of imagination on steroids—I give it to accountants and HR folks as much as to SME owners.) 365

1,400 varieties of hot sauce—not to mention 12,000
JUNGLE JIM’S INTERNATIONAL MARKET, FAIRFIELD, OH: “An adventure in ‘shoppertainment,’ begins in the parking lot and goes on to 1,600 cheeses and 1,400 varieties of hot sauce—not to mention 12,000 wines priced from $8-$8,000 a bottle; all this is brought to you by 4,000 vendors. Customers from every corner of the globe.” Source: George Whalin, Retail Superstars: Inside the 25 Best Independent Stores in America

“Jungle Jim” Bonaminio's pride and joy.
367

—Sixth Annual competition sponsored by Cintas Corporation,
“AMERICA’S BEST RESTROOM” —Sixth Annual competition sponsored by Cintas Corporation, a supplier of restroom cleaning and hygiene products

I am NOT kidding. There is no/none/zero business award I’d rather win than “America’s Best Restroom”—an honor bagged by Jungle Jim’s. It amounts to a gigantic billboard that shouts: WE CARE! 369

Where the +201,000 new private-sector jobs came from
Where the +201,000 new private-sector jobs came from* … 51% Small firms 41% Medium-sized 8% Big *ADP National Employment Report/March 2011

The Future Is Small: Why AIM [Alternative Investment Market] Will Be the World’s Best Market Beyond the Credit Boom —Gervais Williams, superstar fund manager (FT/ : “Research shows that new and small companies create almost all the new private sector jobs and are disproportionately innovative.”)

Where [VIRTUALLY ALL] the jobs come from
Where [VIRTUALLY ALL] the jobs come from! (AND … the lion’s share of innovation.) 372

MITTELSTAND* *“agile creatures darting between the legs of the multinational monsters” (Bloomberg BusinessWeek) 373

led by or overly dependent upon enormous firms.
The long-term strength of the German economy—until recently the world’s #1 exporter, ahead the USA—can be captured in one word, and that word is not BASF. Try … Mittelstand. That is, Germany’s middle-sized, often high-tech firms that tend to dominate this or that well-defined global market niche. My simple point here is that you can have a dominant economy that is not led by or overly dependent upon enormous firms.

Hidden Champions* of the 21st Century: Success Secrets of Unknown World Market Leaders/ Hermann Simon (*1, 2, or 3 in world market; <$4B; low public awareness) Baader (Iceland/80% fish-processing systems) Gallagher (NZ/electric fences) W.E.T. (heated car seat tech) Gerriets (theater curtains and stage equipment) Electro-Nite (sensors for the steel industry) Essel Propack (India/tooth paste tubes) SGS (product auditing and certification) DELO (specialty adhesives) Amorim (Portugal/cork products) EOS (laser sintering) Beluga (heavy-lift shipping) Omicron (tunnel-grid microscopy) Universo (wristwatch hands) Dickson Constant (technical textiles) O.C. Tanner (employee recognition/$400M) Hoeganaes (powder metallurgy supplies)

A superb book. (Simon has been recognized as Germany’s “most influential management thinker.”)
Traits of these superstars include: Ambitious leadership, laser-like focus, depth, innovation, globalization and extreme closeness to the customer.

“BE THE BEST. IT’S THE ONLY MARKET THAT’S NOT CROWDED.”
From: Retail Superstars: Inside the 25 Best Independent Stores in America, George Whalin 377 377

I LOVE this sentence —and LOVE the firms that embody it. Basement Systems Inc. W.A. Coppins. Jim’s Group Jungle Jim’s International Market. The Mittelstanders and the “Hidden champions” Etc. Thousands upon thousands of “etcs.”

Sir Duffield Upends the Establishment *
(*May the Cost-Slashing Addicts Roast in Hell!)

The Commerce Bank/Metro Bank Model “WE WANT THEM IN OUR STORES
The Commerce Bank/Metro Bank Model “WE WANT THEM IN OUR STORES.” Source: Vernon Hill, Fans! Not Customers. How to Create Growth Companies in a No Growth World

Commerce Bank/Metro Bank: Get ’Em Away From the ATM and Into the Branches: 7X. 7:30A-8:00P. Fri/12A. 7:30AM = 7:15AM. 8:00PM = 8:15PM. Source: Vernon Hill, Fans, Not Customers 381

Most banks are closing retail branches and dumping thousands of employees on the street in an effort to pursue efficiencies to the last penny. But Commerce Bank/Metro Bank wants customers IN the “stores,” as they call branches, where founder Vernon Hill and his peppy crew can “Wow” them and turn them into “Fans.” One helpful device: Long/longer/longest hours! 382

“YESBANK”: “When we had a processing problem with MasterCard, it came to our attention that a customer couldn’t pay for their airline flights. A Metro Bank team member stepped in. SHE PUT THE CUSTOMER’S FLIGHTS ON HER PERSONAL CREDIT CARD so that the customer could still take advantage of a good deal, and later—with their permission, of course— transferred the money from their account.” Source: Fans! Not Customers. How to Create Growth Companies in a No Growth World, Vernon Hill with Bob Andelman

“Yesbank” defined! 384

2,0000,000 (+17,000!)

Commerce Bank/Metro Bank is dog friendly to the hilt
Commerce Bank/Metro Bank is dog friendly to the hilt. Here I am with founder Vernon Hill and the bank’s mascot—“Sir Duffield.” (He was “Duffy” in the USA.) The annual report some time back offered up the 2,000,000 statistic—the dog biscuit giveaway count that year. As to the 17,000 … well that’s the number of jobs Commerce/Metro has created! (FYI: Commerce was the U.S. incarnation of the bank. Hill sold the customer-friendly outfit to TD Bank for $8.6 billion. He subsequently opened Metro in the UK and has repeated his U.S. success.) 386

The Commerce Bank/Metro Bank Model “COST CUTTING IS A DEATH SPIRAL
The Commerce Bank/Metro Bank Model “COST CUTTING IS A DEATH SPIRAL. OUR WHOLE STORY IS GROWING REVENUE.” “ARE YOU GOING TO COST CUT YOUR WAY TO PROSPERITY? or … ARE YOU GOING TO SPEND YOUR WAY TO PROSPERITY?” “OVER-INVEST IN OUR PEOPLE, OVER-INVEST IN OUR FACILITIES.” Source: Source: Source: Vernon Hill, Fans! Not customers. How to Create Growth companies in a No Growth World

This slide captures the contrarian Commerce Bank/Metro Bank philosophy—I make this philosophy/credo/strategy a centerpiece of The Excellence Dividend, placing it in the Preface; I also introduced it near the top of this presentation as an exemplar of a brilliant, contrarian, job-creating, humanized, design-centric, people-intense approach to business. Standing out via turned on people in colorful, welcoming facilities who convert customers into “Fans” with the “YESBANK” approach at Commerce/Metro tops the breathless pursuit of the last ounce of efficiency—it is indeed a contrarian message circa (And a message I’m pushing with every ounce of energy I possess! And which is relevant in every nook and every cranny of the economy.) 388

The Excellence Dividend’s “poster child”/Commerce Bank-Metro Bank: The human touch can prevail [thrill customers and create jobs and earn big bucks] circa 2018!

Commerce Bank/Metro Bank have flown in the face of conventional wisdom—and pulled off an incredible victory over establishment thinking. Commerce/Metro have availed themselves of the best technology—but have used it to enhance a personalized/ humanized customer experience rather than reduce such an experience to a mechanical act. (Recall, for example, the YESBANK! credit card experience.) I have chosen Commerce/Metro as “lead story” in The Excellence Dividend because it illustrates what is possible in 2018—in a way that increases employment in a high-tech industry and creates lasting “fans” in an arena (retail small-business banking) where such an act would be considered by many/most to be nigh on impossible. (I firmly believe that the Commerce/Metro approach is widely applicably—very widely!) 390

3. There are no other rules.
Michael Raynor and Mumtaz Ahmed: THE THREE RULES: How Exceptional Companies Think* 1. Better before cheaper. 2. Revenue before cost. 3. There are no other rules. (*5-year study/Deloitte: From a database of over 25,000 companies from hundreds of industries covering 45 years, the authors uncovered 344 companies that qualified as statistically “exceptional,” and finally winnowed the list to 27 firms, including Thomas & Betts, Weis Markets, Hartland Express.)

Powerful confirmation of Mr
Powerful confirmation of Mr. Hill’s Commerce/ Metro mantra— the 5-year Deloitte study is remarkable for its thoroughness. 392

A FEW LEADERSHIP TIPS 393 393

MBWA 394 394

(Managing By Wandering Around)
MBWA (Managing By Wandering Around) 395

MBWA was the soul of In Search of Excellence
MBWA was the soul of In Search of Excellence. MBWA remains the soul of my work … 36 years later. Managing By Wandering Around. My In Search co-author Bob Waterman and I learned about MBWA at Hewlett-Packard in It was the heart of “The HP Way.” MBWA is what it sounds like—and so much more. MBWA is about leaders who are in touch with the people who do the work. MBWA is about leaders who love the people who are doing the work—and get a kick out of being around them. MBWA is about leaders who want to know what’s really going on in their organization. MBWA is about leaders as spear-carriers of the corporate culture. Hey, MBWA at the end of the day, is about leaders who give a shit … 396

“I’m always stopping by our stores— at least 25 a week
“I’m always stopping by our stores— at least 25 a week. I’m also in other places: Home Depot, Whole Foods, Crate & Barrel. I try to be a sponge to pick up as much as I can.” —Howard Schultz Source: Fortune, “Secrets of Greatness” 397

25. (Per week. ) Howard Schultz has a lot on his mind
25! (Per week.) Howard Schultz has a lot on his mind. Howard Schultz has a great staff. But Howard Schultz keeps up his MBWA big time. Terabytes of data notwithstanding, Schultz insists he needs to feel up close the character of transactions in a Starbucks shop. 398

Golden Bay [NZ] Revelation You do MBWA because it’s …

… FUN!

I was wandering the beach in New Zealand … and, God help me, musing on MBWA. You do it to keep in touch and learn about what’s really going on in the organization. True. But, it dawned on me after all these years, that misses the point. You do it because it’s … FUN. And if it’s not fun to hang out with the distribution team in the distribution center at 1AM, well, then, go back to the office and hand in your resignation as a leader/ manager/exec. Okay? (I am dead serious.) 401

Have you done your MBWA … TODAY?* *Damn it!

“Tom, you left out one thing …”
403

I gave a speech in Dublin which included a list of 50 leadership traits. After the speech, the head of a major marketing services company and I were chatting over, yes, a Guinness. He said my list had been “terrific”—uh, except I left out the most important item. “Which is … ,” I intoned.

“Tom, you left out the #1 thing … Leaders enjoy leading!”
405

Related to the … FUN … of MBWA: If you don’t “get off” on the messy “people stuff” and politics and uncertainty and ambiguity … well, you might have chosen the wrong job—leading, that is.

50%! 407 407

“Most managers spend a great deal of time thinking about what they plan to do, but relatively little time thinking about what they plan not to do. As a result, they become so caught up … in fighting the fires of the moment that they cannot really attend to the long-term threats and risks facing the organization. So the first soft skill of leadership the hard way is to cultivate the perspective of Marcus Aurelius: avoid busyness, free up your time, stay focused on what really matters. Let me put it bluntly: every leader should routinely keep a substantial portion of his or her time—I would say as much as 50% —unscheduled. … Only when you have substantial ‘slop’ in your schedule—unscheduled time—will you have the space to reflect on what you are doing, learn from experience, and recover from your inevitable mistakes. Leaders without such free time end up tackling issues only when there is an immediate or visible problem. Managers’ typical response to my argument about free time is, ‘That’s all well and good, but there are things I have to do.’ Yet we waste so much time in unproductive activity—it takes an enormous effort on the part of the leader to keep free time for the truly important things.” —Dov Frohman , Leadership The Hard Way (Chapter 5, “The Soft Skills Of Hard Leadership”) 408

First, Dov Frohman is the real thing
First, Dov Frohman is the real thing. He has been a wildly successful Intel exec—as tough a company in as tough a business as one can conjure up. Second, he is to a large degree a godfather of the entire Israeli tech sector. I certainly don’t imagine you’ll hit his 50% mark. But it damn well is worth considering the logic of what he says. And perhaps, realistically aiming for 20-25%? That would be a great leap forward for most. My take: OVERSCHEDULING IS AN INDICATOR OF A LACK OF DISCIPLINE—AND A SELF-IMPORTANCE STREAK THAT IS NOT VERY PRETTY. (Elsewhere in his book, in a related vein, Frohman touts the power of daydreaming and claims that virtually all of his best ideas were a byproduct of daydreaming. So my advice: read the book … and think seriously about this advice.) 409

XFX/CROSS-FUNCTIONAL EXCELLENCE
410 410

*Cross-Functional eXcellence
XFX = #1* *Cross-Functional eXcellence 411 411

The Strategic Importance of XFX (Cross-functional eXcellence) I believe that in most any organization of, say, more than a dozen people, the #1 issue is “cross-functional communication-integration.” It is both “Problem #1” and “Opportunity #1.” From intelligence pattern recognition to order execution to innovation, our INTERNAL barriers—not our competitors’ cleverness—are the principal impediment to effectiveness. I suspect we mostly agree with that. But is it—AND IT RARELY IS—literally seen as “SO1” —Strategic Opportunity #1? (Please do me the great honor of thinking about this.) 412

NEVER WASTE A LUNCH! 413 413

Sounds a little lightweight if the problem is such a big one
Sounds a little lightweight if the problem is such a big one. Surely a new org chart and a few million more investment $$ tossed into the ERP budget top the list. I’m hardly urging you not to invest. But I do claim—in, still, 2018—that the social aspects of XFX are largely ignored or given no more than lip service—whereas they ought to rank at, yes, the top of the list. And at the top of my “social factors” list is, no kidding … LUNCH.

The sacred 220 “ABs”.* *“At bats” 415

About 220 workday lunches per year = 220 precious, non-repeatable opportunities (“at bats” in baseball terms) to make hay of one sort or another. And, to be trite, once they’re gone they’re gone for good. Am I being obsessive? Yup. It’s merited. A lunch lost is a lunch lost. Starting … TODAY. 416

Monthly! Part of evaluation!
% XF lunches* *Measure! Monthly! Part of evaluation! 417 417

#/% of lunches with people in … OTHER FUNCTIONS.
(BIG deal.) (MEASURE. EXPLICITLY INCLUDE IN EVALUATIONS.)

XFX: SOCIAL ACCELERATORS …
419

The key “XFX” [CROSS-FUNCTIONAL EXCELLENCE] attainment tools are social—not technological. E.g. …
420

XFX/Typical Social Accelerators
1. EVERYONE’s [more or less] JOB #1: Make friends in other functions! (Purposefully. Consistently. Measurably.) 2. “Do lunch” with people in other functions!! Frequently!! (Minimum 10% to 25% for everyone? Measured.) 3. Ask peers in other functions for references so you can become conversant in their world. (It’s one helluva sign of ... GIVE-A-DAMN-ism.) 4. Religiously invite counterparts in other functions to your team meetings. Ask them to present “cool stuff” from “their world” to your group. (Useful. Mark of respect.) 5. PROACTIVELY SEEK EXAMPLES OF “TINY” ACTS OF “XFX” TO ACKNOWLEDGE—PRIVATELY AND PUBLICALLY. (Bosses: ONCE A DAY … make a short call or visit or send an of “Thanks” for some sort of XFX gesture by your folks and some other function’s folks.) 6. Present counterparts in other functions awards for service to your group. Tiny awards at least weekly; and an “Annual All-Star Supporters [from other groups] Banquet” modeled after superstar salesperson banquets.

XFX/ Typical Social Accelerators
7. Routinely discuss—A SEPARATE AGENDA ITEM—good and problematic acts of cross-functional co-operation at every Team Meeting. 8. When someone in another function asks for assistance, respond with … more … alacrity than you would if it were the person in the cubicle next to yours—or even more than you would for a key external customer. (Remember, XFX is the key to Customer Retention which is in turn the key to “all good things.”) 9. Do not bad mouth ... “the damned accountants,” “the bloody HR guy.” Ever. (Bosses: Severe penalties for this—including public tongue-lashings.) 10. Get physical! “Co-location” may well be the most powerful “culture change lever.” Physical X-functional proximity is almost a … guarantee … of remarkably improved co-operation—to aid this one needs flexible workspaces that can be mobilized for a team in a flash. 11. Establish “adhocracy” as S.O.P. To improve the new “X-functional Culture” (and business results), little XF teams should be formed on the spot to deal with an urgent issue—they may live for but ten days, but it helps the XF habit, making it normal to be “working the XF way.”

XFX/ Typical Social Accelerators
12. Early project “management” experience. Within days, literally, of coming aboard folks should be “running” some bit of a bit of a bit project, working with folks from other functions—hence, “all this” becomes as natural as breathing. 13. Work proactively to give as large as possible numbers of people temporary assignments in other functions—especially Finance. 14. “Get ’em out with the customer.” Rarely does the accountant or bench scientist call on the customer. Reverse that. Give everyone more or less regular “customer-facing experiences.” She or he learns quickly that the customer is not interested in our in-house turf battles! 15. Consider creating a special role, or even position. Specialty chemical company Buckman Labs established “knowledge transfer facilitators,” effectively former “middle managers,” with 100% of discretionary pay based on success at spurring integration across previously impermeable barriers.

XFX/: Typical Social Accelerators
16. Formal evaluations. Everyone, starting with the receptionist, should have a significant XF rating component in their evaluation. (The “XFX Performance” should be among the Top 3 items in all managers’ evaluations.) 17. Every functional unit should have strict and extensive measures of “customer satisfaction” based on evaluations from other functions of its usefulness and effectiveness and value-added to the enterprise as a whole. 18. Demand XF experience for, especially, senior jobs. For example, the U.S. military requires all would-be generals and admirals to have served a full tour in a job whose only goals were cross-functional achievements. 19. “Deep dip.” Dive three levels down in the organization to fill a senior role with some one who has been noticeably pro-active on adding value via excellent cross-functional integration. 20. XFX is … PERSONAL … as well as about organizational effectiveness. PXFX [Personal XFX] is arguably the #1 Accelerant to personal success—in terms of organizational career, freelancer/Brand You, or as entrepreneur. 21. Excellence! There is a “State of XF Excellence” per se. Talk it up constantly. Pursue it. Aspire to nothing less.

The preceding list is meant to be suggestive, not all inclusive—the idea is to get your juices flowing. Again … SOCIAL … is the key word. (Make your own list. It could easily be three times longer than mine. But, today … GET GOING.) (“Get going” = Pick 1 RIGHT NOW. Take 1st implementation steps in the next 3 working days.) 425

VISIBLE. CONSTANT. OBSESSION.
THE WHOLE POINT HERE IS THAT “XFX” IS ALMOST CERTAINLY THE #1 OPPORTUNITY FOR STRATEGIC DIFFERENTIATION. WHILE MANY WOULD LIKELY AGREE, IN OUR MOMENT-TO-MOMENT AFFAIRS, XFX PER SE IS NOT SO OFTEN VISIBLY & PERPETUALLY AT THE TOP OF EVERY AGENDA. I ARGUE HERE FOR NO LESS THAN … VISIBLE. CONSTANT. OBSESSION. 426

As in, what—specifically—are you going to do about “it”/XFX in the next … HOUR? DAY? WEEK? MONTH? 90 DAYS? 2 YEARS? 427

Enterprise Core Value #1

Source: Jerome Groopman, How Doctors Think
“The doctor interrupts after 18 … Source: Jerome Groopman, How Doctors Think 429 429

*Are you an “18-second manager”?
18 … seconds!* *Are you an “18-second manager”? 430 430

The best source of information for the doctor, Harvard Med School doctor and professor Groopman asserts, is … THE PATIENT. And yet research demonstrated that docs interrupt on average after 18 seconds. This presentation is not for M.D.s. It is for bosses/leaders. And I’d bet a pretty penny that many bosses/leaders reading this are, heaven forbid … 18-SECOND INTERRUPTERS. 431

[An obsession with] Listening is ... the ultimate mark of Respect.
Listening is ... the heart and soul of Engagement. Listening is ... the heart and soul of Kindness. Listening is ... the heart and soul of Thoughtfulness. Listening is ... the basis for true Collaboration. Listening is ... the basis for true Partnership. Listening is ... a Team Sport. Listening is ... a Developable Individual Skill.* (*Though women are far better at it than men.) Listening is ... the basis for Community. Listening is ... the bedrock of Joint Ventures that work. Listening is ... the bedrock of Joint Ventures that grow. Listening is ... the core of effective Cross-functional Communication* (*Which is in turn Attribute #1 of organization effectiveness.) 432

LISTENING … the ULTIMATE mark of RESPECT+++++
433

Listening is ... the engine of superior EXECUTION.
Listening is ... the key to making the Sale. Listening is ... the key to Keeping the Customer’s Business. Listening is ... Service. Listening is ... the engine of Network development. Listening is ... the engine of Network maintenance. Listening is ... the engine of Network expansion. Listening is ... Social Networking’s “secret weapon.” Listening is ... Learning. Listening is ... the sine qua non of Renewal. Listening is ... the sine qua non of Creativity. Listening is ... the sine qua non of Innovation. Listening is ... the core of taking diverse opinions aboard. Listening is ... Strategy. Listening is ... Source #1 of “Value-added.” Listening is ... Differentiator #1. Listening is ... Profitable.* (*The “R.O.I.” from listening is higher than from any other single activity.) Listening is … the bedrock which underpins a Commitment to EXCELLENCE!

No kidding! (Please reflect.)
435

Suggested Core Value #1: “We are Effective Listeners—we treat Listening EXCELLENCE as the Centerpiece of our Commitment to Respect and Engagement and Community and Growth.” 436 436

Yes! #1. (Think about it. PLEASE.)
437

is notetaking—he has hundreds of notebooks.)
Part ONE: LISTEN* (pp11-116, of 364) *“The key to every one of our [eight] leadership attributes was the vital importance of a leader’s ability to listen.” (One of Branson’s personal keys to listening is notetaking—he has hundreds of notebooks.) Source: Richard Branson, The Virgin Way: How to Listen, Learn, Laugh, and Lead

Branson again. I remember picking up the book in an airport with no particular intention to buy it. But I got hooked at the Table of Contents. What?? ONE-THIRD OF THE BOOK ON LISTENING PER SE?? The answer: Yes, fully one third. Branson thinks it’s that important. And so do I. 439

Listen! Ask! Read! Study! •Listening Leaders: The Ten Golden Rules To Listen, Lead & Succeed —Lyman Steil and Richard Bommelje •The Zen of Listening—Rebecca Shafir •Effective Listening Skills—Dennis Kratz and Abby Robinson Kratz •Are You Really Listening?—Paul Donoghue and Mary Siegel •Active Listening: Improve Your Ability to Listen and Lead—Michael Hoppe •Listening: The Forgotten Skill—Madelyn Burley-Allen •Leading with Questions: How Leaders Find the Right Solutions by Knowing What to Ask—Michael Marquardt •Smart Questions: Learn to Ask the Right Questions for Powerful Results—Gerald Nadler and William Chandon •The Art of Asking: Ask Better Questions, Get Better Answers—Terry Fadem •How to Ask Great Questions—Karen Lee-Thorp •Change Your Questions, Change Your Life—Marilee Adams •Asking the Right Questions: A Guide to Critical Thinking —Neil Browne and Stuart Keeley *Crucial Conversations—Kerry Patterson, Joseph Grenny, Ron McMillan, Al Switzler *Crucial Confrontations—Kerry Patterson, Joseph Grenny, Ron McMillan, 440

FYI: YOU CAN BECOME A FORMAL STUDENT OF LISTENING!
441

I DECIDED THAT MY JOB WAS TO LISTEN AGGRESSIVELY …”
“My education in leadership began in Washington when I was an assistant to Defense Secretary William Perry. He was universally loved and admired by heads of state … and our own and allied troops. A lot of that was because of the way he listened. Each person who talked to him had his complete, undivided attention. Everyone blossomed in his presence, because he was so respectful, and I realized I wanted to affect people the same way. “Perry became my role model but that was not enough. Something bigger had to happen, and it did. It was painful to realize how often I just pretended to hear people. How many times had I barely glanced up from my work when a subordinate came into my office? I wasn’t paying attention; I was marking time until it was my turn to give orders. That revelation led me to a new personal goal. I vowed to treat every encounter with every person on Benfold (Abrashoff was the Captain) as the most important thing at that moment. It wasn’t easy, but my crew’s enthusiasm and ideas kept me going. “It didn’t take me long to realize that my young crew was smart, talented and full of good ideas that usually came to nothing because no one in charge had ever listened to them. … I DECIDED THAT MY JOB WAS TO LISTEN AGGRESSIVELY …” —Mike Abrashoff, It’s Your Ship: Management Techniques from the Best Damn Ship in the Navy

Listening a big deal. Yup X100
Listening a big deal? Yup X100. And I love this word choice from Captain Abrashoff: AGGRESSIVE LISTENING. Yes!! Listening is not a passive activity. It is the ultimate mark of human engagement. (My view is that if you aren’t exhausted after, say, a 30-minute conversation, you were not fully engaged [NOT listening AGGRESSIVELY.]) 443

“Never miss a good chance to shut up.” —Will Rogers
“The best way to persuade someone is with your ears, by listening to them.” —former U.S. Secretary of State Dean Rusk “Never miss a good chance to shut up.” —Will Rogers

“I always write ‘LISTEN’ on the back of my hand before a meeting.”
Source: Tweet

The/my last word. 447

Acknowledgement!

“The deepest principle in human nature is the craving to be appreciated.” —William James “Employees who don't feel significant rarely make significant contributions.” —Mark Sanborn 449

How do I emphasize this adequately
How do I emphasize this adequately? “Employees who don't feel significant rarely make significant contributions.” It’s a “nice quote.” You nod your head. NOT GOOD ENOUGH. Appreciation is the key to affecting human behavior. “Appreciation,” I’ve argued elsewhere is … THE MOST POWERFUL WORD IN THE ENGLISH LANGUAGE. 450

From the Ritz-Carlton Credo: “We are ladies and gentlemen
serving ladies and gentlemen.”

Corporate credos generally do very little for me. (Understatement
Corporate credos generally do very little for me. (Understatement.) This is a very rare exception. Why? Simple: EVERY EMPLOYEE IN THE HOTEL—STARTING WITH THE HOUSEKEEPING STAFF—HAS BEEN DESIGNATED A “LADY” OR “GENTLEMAN.” That act of acknowledgement is a very-big-deal. 452

THE FOUR MOST IMPORTANT WORDS IN ANY ORGANIZATION ARE … “WHAT
DO YOU THINK?” Source: courtesy Dave Wheeler, posted at tompeters.com 453 453

I do not think this is an exaggeration: FOUR. MOST. IMPORTANT. WORDS
I do not think this is an exaggeration: FOUR. MOST. IMPORTANT. WORDS. IN. ANY. ORGANIZATION. 454

“LITTLE” >>> “BIG”. [
“LITTLE” >>> “BIG”* [*Again] CEO Doug Conant sent 30,000 handwritten ‘Thank you’ notes to employees during the 10 years [approx 15/work day] he ran Campbell Soup. Source: Bloomberg BusinessWeek

15/DAY. 10 YEARS. WHAT’S YOUR HANDWRITTEN T-NOTE COUNT TODAY?
456

“SUCK DOWN FOR SUCCESS!”
457

Loser: “He’s such a suck-up!” Winner: “He’s such a suck-down.”
458

Success at getting “getting things done”: It’s the people who do the “real work”—two or three levels “down”—who in fact deliver the goods (your goods). Hence showering attention on those “lesser” folks (“sucking down”) is a painstaking but very very high-yield strategy. (And, in my experience, rewarding as hell personally.) 459

“Success doesn’t depend on the number of people you know; it depends on the number of people you know in high places!” or “Success doesn’t depend on the number of people you know; it depends on the number of people you know in low places!” 460

“Wide and deep” “low places” network wins over the long haul
“Wide and deep” “low places” network wins over the long haul. (FYI, one more time: Women are typically better [much better?] at this than men, not so hung up on hierarchy, don’t worry so much about “who outranks whom.” I was instructed on this years ago by a wildly successful ATT system salesMAN. “Women,” he said, “but not men, are willing to invest in the network several levels down in the customer organization.”) 461

George Crile (Charlie Wilson’s War) on Gust Avrakotos’ strategy: “He had become something of a legend with these people who manned the underbelly of the Agency [CIA].”

The CIA mover and shaker in Charlie Wilson’s War was not all that senior, and was on the outs with the big guys in the agency. Nonetheless, he was able to move heaven and earth because he had the whole damn “underbelly” of the agency doing his bidding—because he had invested so much time and energy in these invisible folks over the years. (I repeat: He was reaping the rewards of a longterm investment strategy!) 463

“I got to know his [Icahn’s] secretaries
“I got to know his [Icahn’s] secretaries. They are always the keepers of everything.” —Dick Parsons, then CEO Time Warner, on dealing with an Icahn threat to his company “Parsons is not a visionary. He is, instead, a master in the art of relationship.” —Bloomberg BusinessWeek (03.11)

Utterly fascinating that the … CEO OF TIME WARNER … would say that “getting to know the secretaries” was a/the key to success, in this case dealing with the tough-as-nails Carl Icahn. (I.e., “Sucking down” is not just a strategy used by those in the middle of an organization, such as Gust Avrakotos—see above.) 465

“SUCK DOWN FOR SUCCESS!”
466

S* =ƒ(#PK“W”P) S = ƒ(#PK“L”P) # of people you know in the “wrong” places # of people you know in “low” places (*S/Success) 467

!! 468

“I’M******************* SORRY”
469 469

“I regard apologizing as the most magical, healing, restorative gesture human beings can make. It is the centerpiece of my work with executives who want to get better.” —Marshall Goldsmith, What Got You Here Won’t Get You There: How Successful People Become Even More Successful. 470 470

“Centerpiece.” Big word, eh? (Think on it.)
471

I urge you to read: John Kador’s Effective Apology: Mending Fences, Building Bridges, and Restoring Trust

Yes, there are books on this topic—in fact, a full book shelf
Yes, there are books on this topic—in fact, a full book shelf. My advice: BECOME A FULL-FLEDGED STUDENT OF APOLOGY. 474

*Divorce, loss of a BILLION $$$ aircraft sale, etc., etc.
Relationships (of all varieties): THERE ONCE WAS A TIME WHEN A THREE-MINUTE PHONE CALL WOULD HAVE AVOIDED SETTING OFF THE DOWNWARD SPIRAL THAT RESULTED IN A COMPLETE RUPTURE.* *Divorce, loss of a BILLION $$$ aircraft sale, etc., etc. 475 475

This works. Schedule the time—formally—for your “three-minute calls
This works. Schedule the time—formally—for your “three-minute calls.” Again: FORMALIZE THE PRACTICE. 476

The completed “three-minute call” often-usually-invariably leads to a strengthening of the relationship. It not only acts as atonement but also paves the path for a “better than ever” trajectory. And having taken the initiative per se is worth its weight in … 477

The “virtuous circle” effect—all but guaranteed!
478

*PERCEPTION IS ALL THERE IS!
THE PROBLEM IS RARELY/NEVER THE PROBLEM. THE RESPONSE TO THE PROBLEM INVARIABLY ENDS UP BEING THE REAL PROBLEM.* *PERCEPTION IS ALL THERE IS! 479

Time & time again (and time & time again) this is proven to be the case. You don’t get in trouble for the screw up—you get in trouble for the quality and rapidity of the response. 480

Comeback >> Perfection
[big, quick response] >> Perfection 481 481

Responding to a problem effectively usually leads to a better relationship than existed before the problem occurred. You are now seen not just as a “provider of useful goods”—but as a “trustworthy partner as we go forward.” BIG DEAL. (Understatement.) 482

100 483 483

“The problem with communication
is the illusion that it has been accomplished.” ——George Bernard Shaw

Leaders: Communications failure …

100%* *Your fault!

14 = 14

14 = 14* *14 people on your team? Bottom line; Each is radically different from the other 13. Hence each requires a different approach as you move forward. Every good 2nd grade teacher understands that!! Alas, damn few bosses seem to “get it.”

Leading/ Slow Down

Speed. NOT Excellence Thinking Culture Listening Relationships

Strategic activities—that underpin both personal and organizational success—which cannot be accomplished in a flash: *BUILDING/MAINTAINING RELATIONSHIPS … take time. *RECRUITING ALLIES TO YOUR CAUSE … takes time. *BUILDING/MAINTAINING A HIGH-PERFORMANCE CULTURE … takes time. *READING/STUDYING … take time. *FIERCE/AGGRESSIVE LISTENING … takes [lots of!] time. *PRACTICE & PREP FOR ANYTHING & EVERYTHING … takes time. *MBWA/MANAGING BY WANDERING AROUND *SLACK IN YOUR SCHEDULE … takes time. *HIRING/EVALUATING/PROMOTING … take time. *THOUGHTFULNESS/INSTINCTIVE SMALL GESTURES (SMALL>>BIG) … take time. *EXTREME HUMANIZATION/RADICAL HUMANIZATION … takes time. *GAMECHANGING DESIGN [spending “hours and hours discussing corners”] … takes time. *YOUR NEXT … takes time. *“THE LAST 1%” OF ANY TASK OR PROJECT … takes time. *E-X-C-E-L-L-E-N-C-E … takes time.

This is effectively derived from the “hard is soft/soft is hard” analysis above. “Everyone” says about the same thing in 2018: FASTER. FASTER. FASTER. … And I say that’s a load of crap. Hard is soft. Soft is hard. All the items that fall under the game-winning heading of “soft is hard” take (LOTS OF) time. 492

pick the #1 failing of CEOs, it’s that …
“If I had to pick the #1 failing of CEOs, it’s that …

“If I had to pick one failing of CEOs, it’s that … they don’t read enough.”

He is the co-founder of one of our most successful/giant investment banking firms. At dinner, and out of the blue, he said to me, “Do you know what the single biggest failure of CEOs is?” I responded with a smart-ass, “I can name 50 failings, but it’d be hard to single out one.” His answer, per the prior slide, “They don’t read enough.” You could have knocked me over with that proverbial feather. But when you think about it, given the change that is afoot, it is a great answer—as it should be from a pro of his stature. AND YOU?? 495

“In my whole life, I have known
no wise people (over a broad subject matter area) who didn’t read all the time — none. Zero. You’d be amazed at how much Warren [Buffett] reads — and how much I read.” —Charlie Munger (#2, Berkshire Hathaway)

Confirmation. (If any is necessary.)
497

That’s it. Hope it’s of use
That’s it. Hope it’s of use. P-L-E-A-S-E “steal” as much as you want—that’s the whole damn point. Tom Peters South Dartmouth MA 20 October 2018 499

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