Brand Inside Tom Peters Omnicom02.28.2002

Brand Inside

Tom PetersOmnicom02.28.2002

1. An “Action Culture.”

Forbes100 from 1917 to 1987: 39 members of the Class of ’17 were alive

in ’87; 18 in ’87 F100; 18 F100 “survivors” underperformed the market

by 20%; just 2 (2%), GE & Kodak, outperformed the market 1917 to 1987.S&P 500 from 1957 to 1997: 74 members of the Class of ’57 were

alive in ’97; 12 (2.4%) of 500 outperformed the market from 1957 to 1997.

Source: Dick Foster & Sarah Kaplan, Creative Destruction: Why Companies That Are Built to Last Underperform the Market

“Good management was the most powerful reason [leading firms] failed to

stay atop their industries. Precisely because these firms listened to their customers, invested aggressively in technologies that would

provide their customers more and better products of the sort they wanted, and because

they carefully studied market trends and systematically allocated investment capital to

innovations that promised the best returns, they lost their positions of leadership.”

Clayton Christensen, The Innovator’s Dilemma

“Active mutators in placid times tend to die off. They

are selected against. Reluctant mutators in

quickly changing times are also selected against.”

Carl Sagan & Ann Druyan, Shadows of Forgotten Ancestors

Wendell Phillips, abolitionist: “Republics exist only on the tenure of being constantly

agitated. There is no republican road to safety but in constant distrust.”

Source: Louis Menand, The Metaphysical Club: A Story of Ideas in America

Cortez!

The [New] Ge Way

DYB.com

Leaders “dump the ones who brung ’em” —Nokia, HP, 3M, PerkinElmer, Corning, etc.

Forget>“Learn”

“The problem is never how to get new, innovative

thoughts into your mind, but how to get the old

ones out.”Dee Hock

The Kotler Doctrine:

1965-1980: R.A.F.(Ready.Aim.Fire.)

1980-1995: R.F.A.(Ready.Fire!Aim.)

1995-????: F.F.F.(Fire!Fire!Fire!)

“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

2. Work that Matters: WOW

Projects/ BHAGs.

“Let’s make a dent in the universe.”

Steve Jobs

“Intimidate their [users] imaginations”

… “Where’s the revolution?” –J Allard,

on the Xbox

Language matters! Wow! BHAG! “Takes

your breath away!”

1st Law Mktg Physics: OVERT BENEFIT (Focus: 1 or 2 > 3 or 4/“One Great Thing.”

Source #1: Personal Passion)

2ND Law: REAL REASON TO BELIEVE (Stand & Deliver!)

3RD Law: DRAMATIC DIFFERENCE (Execs Don’t Get It: “intent to purchase” – 100%; “unique” – 0% to

5%)

Source: Jump Start Your Business Brain, Doug Hall

Characteristics of the “Also rans”*

“Minimize risk”“Respect the chain of

command”“Support the boss”

“Make budget”*Fortune, article on

“Most Admired Global Corporations”

3. Demo Mania.

Demos! Heroes! Stories!

“A key – perhaps the key – to leadership is the effective

communication of a story.”

Howard Gardner Leading Minds: An Anatomy of Leadership

G.M. … V.C. … W.P. … M.B.S.A.

Each VP a V.C.: Portfolio of high-risk investments in

people & ideas from all across the company.

4. Web World = ALL: The

“Friction-free Enterprise.”

108 X 5vs.

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

N.W.O./Holy Moly: Unemployment up 2% … Real wage growth highest since 60s … Productivity soaring.

Source: BW/02.11.2002

Dell’s OptiPlex Facility

Big Job: 6 to 8 hours.(80,000 per day)

Parts Inventory: 100 square feet.

Cisco!

90% of $20B (=$50M/day)Annual savings in service

and support from customer self-management: $550M (P.S.: C.Sat e >> C.Sat h)

The Real “News”: X1,000,000

TowTruckNet.com

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

Web as connector for your entire supply-demand chain Web as “spider’s web” which re-conceives the industry

Web/B2B as ultimate wake-up call to “commodity producers”

Web as the scourge of slack, inefficiency, sloth, bureaucracy, poor customer data

Web as an Encompassing Way of LifeWeb = Everything (P.D. to after-sales)

Web forces you to focus on what you do bestWeb as entrée, at any size, to World’s Best at Everything

as next door neighbor

Message: eCommerce is not a technology play! It is a

relationship, partnership, organizational and

communications play, made possible by new

technologies.

Message: There is no such thing as an effective B2B or

Internet-supply chain strategy in a low-trust,

bottlenecked-communication, six-layer

organization.

“Ebusiness is about rebuilding the organization from the

ground up. Most companies today are not built to exploit the Internet.

Their business processes, their approvals, their hierarchies, the

number of people they employ … all of that is wrong for running an

ebusiness.”Ray Lane, Kleiner Perkins

CGE&Y (Paul Cole): “Pleasant

Transaction” vs. “Systemic Opportunity.” “Better job

of what we do today” vs. “Re-think overall

enterprise strategy.”

Suppose, just suppose, that the Web is a new world we’re just beginning to inhabit. We’re like the earlier European settlers in the United States, living on the

edge of the forest. We don’t know what’s there and we don’t know exactly what we need to do to find out: Do we pack mountain climbing gear, desert wear, canoes, or all three? Of course while the settlers may not have

known what the geography of the new world was going to be, they at least knew that there was a geography. The Web, on the other hand, has no

geography, no landscape. It has no distance. It has nothing natural in it. It has few rules of behavior and fewer lines of authority. Common sense doesn’t hold

here, and uncommon sense hasn’t yet emerged.” David Weinberger, Small Pieces Loosely Joined

“There’s no use trying,” said Alice. “One can’t believe impossible things.”

“I daresay you haven’t had much practice,” said the Queen. “When I was

your age, I always did it for half an hour a day. Why, sometimes I’ve

believed as many as six impossible things before breakfast.”

Lewis Carroll

I’net …

… allows you to dream dreams

you could never have dreamed

before!

Q: Is that all there is?A: Quite possibly.

“Roche’s New Scientific Method”—Fast Company. And? X-Functional Teams (NO STOVEPIPES!). “Fail fast.” “The only way to embrace a technological revolution, Roche has discovered, is to unleash an organizational revolution.”

5. “Beautiful” Systems.

Fred S.’s “mediocre” thesis. Herb K.’s

napkin.

Read It Closely: “We don’t sell

insurance anymore. We sell speed.”

Peter Lewis, Progressive

Great design = One-page

business plan (Jim Horan)

K.I.S.S.: Gordon Bell (VAX

daddy): 500/50. Chas. Wang (CA): Behind schedule?

Cut least productive 25%.

“Most companies would do more business on the Internet if they

fired their entire marketing department and replaced it with

people who could produce interactive content that actually made it easier for users to buy.”

Jakob Nielsen, Nielsen Norman Group

SWA

Simple!!!!!!!!!!!! (customers call because the process is so easy they can’t

believe they’re done)

30% of revenues directly from site (vs. 6% for others)

Source: Business Week (09.00)

Danger: S.I.O. (Strategic Initiative Overload)

JackWorld/1@T: (1) Neutron Jack. (Banish bureaucracy.) (2) “1, 2 or out” Jack. (Lead or leave.) (3)

“Workout” Jack. (Empowerment,

GE style.) (4) 6-Sigma Jack. (5) Internet Jack. (Throughout)

TALENT JACK!

Systems: Must have. Must

hate. / Must design. Must un-

design.

Mgt. Team includes … EVP

(S.O.U.B.)

Executive Vice President, Stomping Out Unnecessary Bullshit

Revised wisdom: Forget “best practice” (stultifying).

Concentrate on: Driving out “worst practice.”

Source: Equinox Manifesto (12.01)

“Ninety percent of what we call ‘management’ consists of making it difficult for people to

get things done.” – P.D.

6. The “Solutions Imperative”: New Bases for Value

Added.

The Big Day!

09.11.2000: HP bids

$18,000,000,000for

PricewaterhouseCoopersconsulting business!

“These days, building the best server isn’t enough. That’s the

price of entry.”Ann Livermore, Hewlett-Packard

“We want to be the air traffic

controllers of electrons.”

Bob Nardelli, GE Power Systems

“UPS wants to take over the sweet spot in the endless loop

of goods, information and capital that all the packages

[it moves] represent.”ecompany.com/06.01 (E.g., UPS Logistics manages

the logistics of 4.5M Ford vehicles, from 21 mfg. sites to 6,000 NA dealers)

Keep In Mind: Customer Satisfaction

versus Customer Success

7. Talent: The 25/8/53 Obsession.

25/8/53*(*Damn it!)

“The leaders of Great Groups love talent and know where to find it. They revel in

the talent of others.”Warren Bennis & Patricia Ward Biederman,

Organizing Genius

From “1, 2 or you’re out” [JW] to …

“Best Talent in each industry segment to build

best proprietary intangibles” [EM]

Source: Ed Michaels, War for Talent (05.17.00)

“We believe companies can increase their market cap 50 percent in 3 years. Steve

Macadam at Georgia-Pacific changed 20 of his 40 box plant managers to put

more talented, higher paid managers in charge. He increased

profitability from $25 million to $80 million in 2 years.”

Ed Michaels, War for Talent (05.17.00)

Message: Some people are better than other

people. Some people are a helluva lot better than other

people.

8. Automatic Renewal:

The “HSDE.”

Saviors-in-Waiting

Disgruntled CustomersUpstart CompetitorsRogue EmployeesFringe Suppliers

Wayne Burkan, Wide Angle Vision

“The corporate faith in big industrial mergers [2/3rds of which

fail] is a vestige of the spats-and-spittoons era.”

—James Suroweicki, The New Yorker (More, a Buffett annual-report quote: “Many managers were overexposed in

impressionable childhood years to the story in which the imprisoned handsome prince is released from a toad’s body by a kiss from the beautiful princess.”)

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

COMPETITORS: “The best swordsman in the world doesn’t need to fear

the second best swordsman in the world; no, the person for him to be afraid of is some ignorant antagonist who has never had a

sword in his hand before; he doesn’t do the thing he ought to do, and so the expert isn’t

prepared for him; he does the thing he ought not to do and often it catches the expert out and

ends him on the spot.” Mark Twain

Employees: “Are there enough weird

people in the lab these days?”

V. Chmn., pharmaceutical house, to a lab director (06.01)

The Cracked Ones Let in the Light“Our business needs a massive

transfusion of talent, and talent, I believe, is most likely to be found

among non-conformists, dissenters and rebels.”

David Ogilvy

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. Fringe suppliers that offer innovative business practices need

not apply.”

Wayne Burkan, Wide Angle Vision: Beat the Competition by Focusing on Fringe Competitors, Lost Customers, and Rogue Employees

Leaders know … WE BECOME WHO

WE HANG WITH!

WEIRD IDEAS THAT WORK: (1) Hire slow learners (of the organizational code). (1.5) Hire people who make you

uncomfortable, even those you dislike. (2) Hire people you (probably) don’t need. (3) Use job interviews to get ideas, not

to screen candidates. (4) Encourage people to ignore and defy superiors and peers. (5) Find some happy people and get them to fight. (6) Reward success and failure, punish inaction.

(7) Decide to do something that will probably fail, then convince yourself and everyone else that success is certain. (8) Think of

some ridiculous, impractical things to do, then do them. (9) Avoid, distract, and bore customers, critics, and anyone who just wants to talk about money. (10) Don’t try to learn anything from people who seem to have solved the problems you face.

(11) Forget the past, particularly your company’s success.

Bob Sutton, Weird Ideas that Work: 11½ Ideas for Promoting, Managing and Sustaining Innovation

9. Cherish FAILURES.

The Gales of Creative Destruction

+29M = -44M + 73M

+4M = +4M - 0M

“The secret of fast progress is

inefficiency, fast and furious and numerous

failures.”Kevin Kelly

“Reward excellent

failures. Punish mediocre successes.”

Phil Daniels, Sydney exec (and, de facto, Jack)

Read This!

Richard Farson & Ralph Keyes: Whoever Makes the Most

Mistakes Wins: The Paradox of Innovation

10. Talent II: The “Check-out

Clerks Test.”

New World of Work< 1 in 10 F500

#1: Manpower Inc.Freelancers/I.C.: 16M-25MTemps: 3M (incl. CEOs & lawyers)

Microbusinesses: 12M-27MTotal: 31M-55M

Source: Daniel Pink, Free Agent Nation

Leaders-Teachers Do Not “Transform People”!

Instead leaders-mentors-teachers (1) provide a context which is marked by (2) access to a luxuriant portfolio of meaningful opportunities (projects) which

(3) allow people to fully (and safely, mostly—caveat: “they” don’t engage unless they’re “mad about something”) express

their innate curiosity and (4) engage in a vigorous discovery voyage (alone and in small teams, assisted by an extensive self-constructed network) by which those people (5) go to-create places they (and their mentors-teachers-

leaders) had never dreamed existed—and then the leaders-mentors-teachers (6) applaud like hell, stage

“photo-ops,” and ring the church bells 100 times to commemorate the bravery of their

“followers’ ” explorations!

Minimum New Work SurvivalSkillsKit2001Mastery

Rolodex Obsession (vert. to horiz. “loyalty”)Entrepreneurial Instinct

CEO/Leader/Businessperson/CloserMistress of Improv

Sense of HumorIntense Appetite for Technology

Groveling Before the YoungEmbracing “Marketing”

Passion for Renewal

“If there is nothing very special about your work, no matter how hard you apply

yourself, you won’t get noticed, and that

increasingly means you won’t get paid much either.”

Michael Goldhaber, Wired

Brand You, Big Time!

I AM AN ARMY OF

ONE

11. “A Place Worth Working

For.”

MantraM3

Talent = Brand

What’s your company’s …

EVP?Employee Value Proposition, per Ed

Michaels et al., The War for Talent

EVP = Challenge, professional growth, respect, satisfaction, opportunity, reward

Source: Ed Michaels et al., The War for Talent

“Soft” Is “Hard”

- ISOE

Message: Leadership is all about love! [Passion, Enthusiasms, Appetite for Life,

Engagement, Commitment, Great Causes & Determination to Make a

Damn Difference, Shared Adventures, Bizarre Failures, Growth, Insatiable

Appetite for Change.] [Otherwise, why bother? Just read Dilbert. TP’s final words: CYNICISM SUCKS.]

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

1. An “Action Culture.”2. Work that Matters: WOW Projects/BHAGS.3. Demo Mania.4. Web World = ALL: The “Friction-free Enterprise.5. “Beautiful” Systems.6. “Departments” as Heroes: New Bases for Value Added.7. Talent: The 25/8/53 Obsession.8. Automatic Renewal: The “HSDE.”9. Cherish FAILURES.10. Talent II: The “Check-out Clerks Test.”11. Brand Inside: “A Place Worth Working For.”