Lon g/ NEW ORDER / 1061 Tom Peters’ EXCELLENCE. ALWAYS. XAlways Master/08August2006

Long/NEW ORDER/1061

Tom Peters’

EXCELLENCE. ALWAYS.

XAlways Master/08August2006

Slides* at …

tompeters.com

“The [Union senior] officers rode past the Confederates smugly without any sign of recognition except by one. ‘When

General Grant reached the line of ragged, filthy, bloody, despairing

prisoners strung out on each side of the bridge, he lifted his hat and held it over his head until he passed the last man of that living funeral cortege. He was the only officer in that whole train

who recognized us as being on the face of the earth.’*”

*quote within a quote from diary of a Confederate soldier

The Irreducible209+/Sales122/60TIBs

Tom Peters/0607.2006

A frustrated participant at a seminar for investment bankers in Mauritius listened impatiently to my explanation of differences of opinion among me, Mike Porter,

Gary Hamel, Jim Collins, etc. Finally, he’d had enough. “What, if anything,” he asked,

“do you believe ‘for sure’?” I mumbled something, but his query started rumbling

around in my mind. Three days later, wandering on a Sunday in London, the idea of “the irreducibles” occurred to

me—and I started jotting down notes on stuff I do indeed believe “for sure.” Before

I knew it, a few days later, the list had grown to 209 items. Hence “The Irreducible209” that follows.

Tom Peters

EXCELLENCE. THE

BASICS.

This is not about …

“customer centrism”“integrated marketing”

etc.etc.etc.

It is about …

*Chief Revenue Officer

It is about …

sellin’ a whole lotta stuff and having customers go bananas

with love to the point that they tell every damn friend they have and then start buttonholing strangers on trains and planes

and busses.

Gaspworthy!

Manhole Cover

Madness and More ….

That’s a Big Number ….

Chicagoland’s

Mystery Disappearances …

THREE BILLION NEW CAPITALISTS

—Clyde Prestowitz

43,000

“There is no job that

is America’s God-given

right anymore.”

—Carly Fiorina/HP/January2004

“Deutsche Bank Moves Half of Its Back-office Jobs to India”/

headline/FT/0327 (500 of 900

Research)

“One Singaporean worker costs as much as …

3 … in Malaysia

8 … in Thailand 13 … in China 18 … in India.”

Source: The Straits Times/2003

“Thaksinomics” (after Thaksin Shinawatra, PM)/

“Bangkok Fashion City”:

“managed asset

reflation” (add to

brand value of Thai textiles by demonstrating flair and design excellence)

Source: The Straits Times/2004

Wal*Mart + Home Depot + Walt Disney +

Intel + Microsoft + Pfizer = Flat

Source: “Blue Chip Blues”, Cover, BW, 0417.06

The King Is Dead. Long Live …

Genentech09, Amgen09

> Merck09 (70K-3/394B-5)

Goodnight and Good

Unparalleled in “Our” Professional Lifetime*

TerrorismMiddle East instability

H5N1China screw-ups

Globalization backlashEnergy dependence

Environmental threatsLife sciences

“Cold War” with ChinaFraying American fabric

U.S. impotence in the face of Asia’s rise

*Current leaders were not Cold War leaders

“This is a dangerous world and it is going to become more

dangerous.”

“We may not be interested in chaos

but chaos is interested in us.”

Source: Robert Cooper, The Breaking of Nations: Order and Chaos in the Twenty-first Century

Good Morning and Good

New Economy?!

Sergey + Larry >

Harvard/370

“Forget China, India and the

Internet: Economic Growth Is Driven

by Women.” —Headline, Economist,

April 15, 2006, Leader, page 14

EXCELLENCE. THE

GENERAL’S STORY. (AND

THE ADMIRAL’S)

“If you don’t like change,

you’re going to like irrelevance even less.” —General Eric

Shinseki, Chief of Staff. U. S. Army

Nelson’s secret:

“[Other] admirals more frightened of losing than

anxious to win”

EXCELLENCE. THE

MANDATE.

“It is not the strongest of the

species that survives, nor the most intelligent, but the one most

responsive to change.” —Charles Darwin

“The most successful

people are those who

are good at plan B.”

—James Yorke, mathematician, on chaos theory in The New Scientist

“We are in a brawl with

no rules.” —Paul Allaire

Sam’s Secret

“While many people big oil finds with big companies, over the years

about 80 percent of the oil found in the United States has been

brought in by wildcatters such as Mr Findley, says Larry Nation,

spokesman for the American Association of Petroleum

Geologists.” —WSJ, “Wildcat Producer Sparks Oil

Boom in Montana,” 0405.2006

“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 No. 5. By the time our rivals are ready with wires and screws, we are on

version No. 10. It gets back to planning versus acting: We act from day one; others plan how to plan—for months.” —Bloomberg by

Bloomberg

"I think it is very important for you to do two things: act on your temporary conviction as if it was a

real conviction; and when you realize that you are

wrong, correct course very quickly.” —Andy Grove

“This is so simple it sounds stupid, but it is amazing how few oil people really

understand that you only find oil if you drill wells. You may

think you’re finding it when you’re drawing maps and

studying logs, but you have to drill.”

Source: The Hunters, by John Masters, Canadian O & G wildcatter

S.A.V.

Screw Around Vigorously

“Reward excellent failures.

Punish mediocre

successes.”Phil Daniels, Sydney exec

EXCELLENCE. STARTERS.

Radio City Music HallSeptember 2005

Franchise Lost!

TP: “How many of you [600] really

crave a new Chevy?”

NYC/IIR/061205

2P.3E.

People.Product.

Execution.Enthusiasm.Excellence.

“Pee Cee Eee-squared X-squared/PCEEXX:

PeopleCustomersEnthusiasm

EnergyeXecutioneXcellence

P.P.E.E.R.R.E.

People.Product.

Execution.Enthusiasm.Relentless.Re-invent.Excellence.

People.Product.

Execution.Enthusiasm.

Relentless.Re-invent.Excellence.

The “3Es”

Tom Peters/02.15.2006

Enthusiasm!

Execution!Excellence!

EXCELLENCE. THE WORD.

Synonyms

PurityTranscendence

VirtueEleganceMajesty

Antonyms

Mediocrity

EXCELLENCE.

GAMECHANGER.

Excellence1982: The Bedrock “Eight Basics”

1. A Bias for Action2. Close to the Customer3. Autonomy and Entrepreneurship4. Productivity Through People5. Hands On, Value-Driven6. Stick to the Knitting7. Simple Form, Lean Staff8. Simultaneous Loose-Tight Properties”

ExIn*: 1982-2002/Forbes.com

DJIA: $10,000 yields $85,000 EI: $10,000 yields $140,050

*Forbes/Excellence Index /Basket of 32 publicly traded stocks

Sorry, Jack: The New Rules

Old RuleBig Dogs Own the StreetBe No.1 or No. 2 in the MarketShareholders RuleBe Lean and MeanRank Players; Go With the A’sHire a Charismatic CEOAdmire My Might

Source: Fortune/07.24.2006

New RuleAgile Is Best; Big Can BiteCreate Something NewThe Customer Is KingLook Out, Not InHire Passionate PeopleHire a Courageous CEOAdmire My Soul

X06/Excellence2006: The Bedrock Baker’s Dozen

1. A Bias For Action/Culture of Execution = Job One! 2. DECENTRALIZATION! ACCOUNTABILITY! 3. Fail. Forward. Fast.4. Velocity! Tempo! “Metabolic Management” Matters! 5. INNOVATE … or Die.6. A Damn Good Product. A Damn Cool Product.7. Ride the Value Added Curve to the Sky: Insure “Gamechanging Solutions”; Provide “Spellbinding Experiences”; Become a “Dream Merchant”; Strive to Be a “Lovemark;” Seek “Tattoo Brand” status.8. Relentlessly Pursue the “Big Two” Markets: Women, Boomers & Geezers. 9. Best Talent Wins! Women Rule! HR at the Head Table!

10. Educate for Creativity, Entrepreneurship & “Brand You” Independence.11. Demanded: Radical Technology Strategies! 12. Passion! Enthusiasm! Energy! Excitement! Relentlessness! 13. No Less Than EXCELLENCE. Ever.

X06/Excellence2006: The Bedrock Baker’s Dozen

1. A Bias For Action/A “Culture of Execution” = Job One! (Must be a Systematic Discipline.)

2. DECENTRALIZATION! ACCOUNTABILITY! (Tom’s “Top Two,” 1965-2005.)

3. Fail. Forward. Fast. (“Reward Excellent Failures, Punish Mediocre Successes.” “Most tries wins.”)

4. Velocity! Tempo! “Metabolic Management” Matters! (Hustle! Adapt! Win the “O.O.D.A. Loop” War—Confuse Your Competitors!)

5. INNOVATE … or Die. (“Game-changers” or Bust! Lead the Customer! Shout “NO” to Imitation!)

6. A Damn Good Product. A Damn Cool Product. (Pursue “Dramatic Difference.”

Design Rules!)

7. Ride the Value Added Curve to the Sky: Insure “Gamechanging Solutions”; Provide “Spellbinding Experiences”; Become a “Dream Merchant”; Strive to Be a “Lovemark;” Seek “Tattoo Brand” status.8. Relentlessly Pursue the “Big Two” Markets: Women, Boomers & Geezers. (WOMEN Buy Everything. BOOMERS & GEEZERS Have All the Money!)

9. Best Talent Wins! Women Rule! HR at the Head Table! (“Weird” Matters Most! A Workplace to Brag About! Educate for Creativity!)

10. Educate for Creativity, Entrepreneurship & “Brand You” Independence. (The schools have it all wrong!)

11. Demanded: Radical Technology Strategies! (“Incrementalism” Is for Wimps!)

12. Passion! Enthusiasm! Energy! Relentlessness! (Hard Is Soft! Soft Is Hard!) 13. No Less Than EXCELLENCE. Ever. (Excellence … the #1 Thing That Vaults Us Out of Bed in the Morning, and Matters in the Long run.)

Re-imagine! Speech: Story Line in 100 Words

or Less

Tom Peters/2006

Re-imagine! Speech: Story Line in 100 Words or Less

1. Wildly altered context (technology, China-India, global terrorism, etc)2. Only answer: adaptive skills and bold-breathtaking

innovation (top-line focus rather than cost-cutting focus)3. Race way, way up the value-added curve (implemented

“game-altering solutions” rather than “services,” “experiences” rather than “transactions,” and much more)

4. As part of value-added exercise, pursue Ripe & Enormous “new” markets—Women, Boomers & Geezers

5. Radical (!!!) use of IS-IT6. A “Roster” of Weird & Wondrous & Entrepreneurial

“Talent” engaged in “Wow Projects”7. “Metabolic Leadership” (Passionate-Radical Leaders

who instill a Discipline of Execution, a Quick Tempo-Adaptive Culture and

an appetite to “Eat Radical Change for Breakfast”)

(96 words by my count)

Everything You Need to Know about “Strategy”: Tom’s Baker’s Dozen Axioms

1. Do you have Awesome Talent … Everywhere? Do you push that Talent to pursue … Gaspworthy Quests?2. Is your Talent Pool loaded with Wonderfully Peculiar People who others would

call “problems”? And what about your Extended Community of customers, vendors et al?3. Is your Board of Directors as Cool as your product offerings … and does it have

50 percent (or at least one-third) Women Members?4. Long-term, it’s a “Top-line World”: Is creating a “culture” that cherishes above all things

Innovation and Entrepreneurship your primary aim? Remember: Innovation … not Imitation!5. Are the Ultimate Rewards heaped upon those who exhibit an Unswerving “Bias for Action,” to

quote the co-authors of In Search of Excellence? 6. Do you routinely use hot, Aspirational Words-terms like “Excellence” and B.H.A.G. (Big Hairy

Audacious Goal, per Jim Collins) and “Let’s make a dent in the Universe” (the Word according to Steve Jobs)? Is “Reward excellent failures, punish mediocre successes” your de facto motto?

7. Do you subscribe to Jerry Garcia’s dictum: “We do not merely want to be the best of the best, we want to be the only ones who do what we do”?

8. Do you elaborate on and enhance Jerry G’s dictum by adding, “We subscribe to ‘Best Sourcing’—and only want to associate with the ‘best of the best’.”

9. Do you Embrace the New Technologies with child-like enthusiasm and a revolutionary’s zeal?10. Do you “serve” and “satisfy” customers … or “go berserk” attempting to provide every customer

with an “awesome experience” that does nothing less than transform the way she or he sees the world?

11. Do you understand … to your very marrow … that the two biggest under-served markets are Women and Boomers-Geezers? And that to “take advantage” of these two Monster “Trends” (FACTS OF LIFE) requires fundamental re-alignment of the enterprise?

12. Are your leaders Accessible? Do they wear their Passion on their sleeves? Does Integrity ooze out of every pore of the enterprise? Is “We care” your implicit motto?

13. Do you understand Business

Mantra #1 of the ’00s: DON’T TRY TO COMPETE

WITH WAL*MART ON PRICE OR CHINA

ON COST?

This I Believe: Tom’s Super-TIB25

1. TECHNICOLOR Times.2. Passion! Enthusiasm! Energy!3. Action/R.F.A./O.O.D.A. Speed.4. Screw-ups. BIG SCREW-Ups!5. Mess! Improv!6. Revolution! Re-imagine!7. INNOVATE OR DIE! 8. Decentralize!9. Bulk is BULL! (Mergers don’t work. FOCUS Does!)10 “Different” > “Better”11. eALL/Power Tools for Power Strategies!12. Forgetting/Destruction.13. Hot Language Matters!14. WOW!/WOW Projects.15. VA Bedrock: The “PSF.” (Professional Service Firm.)16. Daring.17. Talent Time! Leaders “Do” People!18. Talent+/Diversity.19. Talent++/Women Rule!20. “Brand You” Universe.21. Design!22. Gasp-worthy Experiences/Lovemarks.23. New Market Demographics/Women/Boomers & Geezers/Green/Wellness.24. Grace.25. EXCELLENCE!

“My only goal is to have no goals. The goal, every time, is that film, that very moment.” —Bernardo Bertolucci

EXCELLENCE.

CAUSES.ADVERSARIES.

Causes/1966-2006

Implementation/Small Wins (Stanford GSB/PhD thesis; 1st on implementation per se)

EXCELLENCE (as a worthy business pursuit)

Management Style/Corporate CultureSoft “Ss”/7-S (Waterman-Peters complete “business model”; waaaaay beyond Strategy & Structure)

Structure > Strategy (“We shape our structures, then they shape us …”—Churchillian paraphrase)

Soft Change Levers (> structure; symbols, patterns & settings)

Close to the Customer (novel idea, circa 1982)

MBWA (Managing By Wandering Around—courtesy a much more intimate than today HP)

Productivity through People (novel idea, circa 1982)

Chaos/Crazy Times Call for Crazy OrganizationsMiddle-sized companies are cool Re-imagine!/Innovate or Die!Small-ish/Scale & Synergy limits-delusions/anti-Big Mergers

Causes/1966-2006

Women/Market opportunityWomen/Leaders (right for the times)

Design/Design-as-soulWow! (Hot language)

Weird!Passion!/Enthusiasm!/Exuberance! (as Leader Lever #1)

Brand You (or else)

PSF = Bedrock (add value or bust—every group must demonstrate economic viability)

PSF + Brand You + WOW Projects = New Biz LogicSales/+R > -C (increasing revenue more important than cutting cost)

HealthCare/Wellness-Safety-H5N1Brand = Talent (best roster wins)

New VA Ladder/Products-Services-SOLUTIONS-EXPERIENCES-DREAMKETING (Dream Marketing)-LOVEMARKDifferent > > BetterBoomers & Geezers/marketing to new “mega-segment”

Progress?Excellence1982: The Bedrock “Eight Basics”

1. A Bias for Action 2. Close to the Customer 3. Autonomy and Entrepreneurship 4. Productivity Through People 5. Hands On, Value-Driven 6. Stick to the Knitting 7. Simple Form, Lean Staff 8. Simultaneous Loose-Tight Properties”

Hardball: Are You Playing to Play or Playing to Win? by George Stalk & Rob Lachenauer/HBS Press

“The winners in business have always played hardball.” “Unleash massive and overwhelming force.” “Exploit

anomalies.” “Threaten your competitor’s profit sanctuaries.” “Entice your competitor into retreat.”

Approximately 640 Index entries: Customer/s

(service, retention, loyalty), 4. People (employees, motivation, morale,

worker/s), 0. Innovation (product development, research &

development, new products), 0.

M.I.A.*: Talk. (Present.) Listen. (Interview.) Sell. (Life = Sales.) Do. (Execution-

Implementation.) Talent. (Recruit-Develop-Retain.) Project Management. (Create. Solicit

support. Execution. Adoption-Client “Culture Change.”) Product. (“It.”) Innovation. (Design.

Creativity. “Buzz-building.” Politics.) Leadership. (USMA, etc.) E.Q. (Connect.) “Culture”

Change. (Lasting impact.) Diversity. (Cross-

cultural Effectiveness.) Career Creation. (Brand You life-lifestyle.) Wellness. (Life.)

*B.Schools (“M.I.A.” or at most “B.I.A.”—barely in action)

Progress?Excellence1982: The Bedrock “Eight Basics”

1. A Bias for Action 2. Close to the Customer 3. Autonomy and Entrepreneurship 4. Productivity Through People 5. Hands On, Value-Driven 6. Stick to the Knitting 7. Simple Form, Lean Staff 8. Simultaneous Loose-Tight Properties”

Noble Bill

“This is not to denigrate emphasis on

leadership, entrepreneurship, management and

global business” —WFS

Source: “Brave New World, Bold New B-School”/Tim Westerbeck/BizEd/08.04

Adversaries

B-schools (crappy at soft skills, implementation, leadership)

Strategy-is-allBy-the-numbers managementDis-passionate managementFocus groupsIntuition discountedLeading as an intellectual taskLeading without passionCool language in Hot timesDilbert (accepting cubicle slavery)

Bigness per se (severe scale limitations—even at Microsoft)

White guys! (not really, but enough already)

18-44 emphasis in marketing (geezers > youth for foreseeable future)

-Cost > +Revenue (cost cutting more important than organic revenue growth)

CI (continuous improvement in an age of discontinuous world)

LESS THAN THE NO-HOLDS-BARRED PURSUIT OF EXCELLENCE

My (Les’s) Dinner with Henri

JUSTWHATIZZITUMAKE?

My (Les’s) Dinner with Henri

JUST WHAT IS IT YOU MAKE?

Did one of ’em ever turn to the other and say: “Wow,

I wonder what unimaginable new

tools, otherwise not possible, will be

brought forth for my daughter Alice, age

17, because of this deal?”

Did one of ’em ever turn to the other and say: “Wow I

wonder what unimaginable new

tools, otherwise not possible, will be

quickly brought forth for our customers

because of this deal?”

“Not long ago, I heard one studio chief utter the

unthinkable: ‘What would happen if I made a movie I actually looked forward to

seeing?’” —Peter Bart, Editor in Chief, Variety; former

Paramount exec, “Hollywood’s Model Doesn’t Produce Art, or Much Profit” (NYT/0721.06)

Them-UsTom Peters/0624.2006

“Them” “Us”

Strategy EXECUTIONPlanning ActionMarketing Selling/SalesMarkets CustomersCustomers ClientsMicro-segmentation Big Stuff (Women, Boomers)Cost minimization Revenue maximizationSynergy/“Efficiencies” Decentralization“Strategic supplier Pioneering supplierProcess ProjectEffectiveness ExcellenceMen WomenLeadership Management + LeadershipStandardization Exceptionalism (53 = 53)Big clients COOL clientsPrestigious Board INTERESTING Board

“Them” “Us”Big Mid-sizeGrowth by merger Organic growthBuy market share Create NEW marketsEfficient, streamlined Value-creating “PSF” “department” Certainty-predictability Ambiguity-opportunityFearful of losing Aggressive pursuit of winningPlan PrototypeCareful evaluation Another prototypeRevised plan Another prototypePeople/Employees TalentEffective HR department Rockin’ Talent Development Center of ExcellenceBenchmark against the Benchmark against the “best”-“industry leader” “coolest”

“Them” “Us”

Benchmark “Future”markOrderly career progression “Up or Out” (PDQ)Head HeartIQ EQ“Professional” PassionateStoic, humble leaders Noisy, emotional “characters” in chargeHire for Resume Hire for intangiblesMeasured-thoughtful Relentless, pig-headed approach determinationTeamwork comes first Teamwork and disruptive individuals equal billingListen to customers Lead customersCustomer “involvement” Intimate-Seamless customer inter-twining

“Them” “Us”MBM (Management MBWA by memo)MBA MFAShareholder Value Great people-product rule comes first Work smart Work hardBuilt to last Built to Rock the WorldReward successes Reward (EXCELLENT) failuresQuality first! Design 1TQuality first Innovation 1THigh-quality Jaw-dropping Experience transactionCVs demo consistent CVs feature Magic Moments performanceGood grades Cool stuff Operational excellence World-rocking INNOVATION

“Them” “Us”Brand LovemarkBest analysis wins Best STORY wins“Beyond politics” Politics-is-life, the rest is detailsOutsource Bestsource“Motivate” Send on QUESTS“Motivate” InviteMeasured language HOT languageProduct-Service Gamechanging SOLUTION, Thrilling EXPERIENCE, DREAM come true, LOVEMARKPastel Technicolor Better Different“Mission success” “Mission EXCELLENCE”Very good EXCELLENCE. ALWAYS.

Porter.Drucker.Bennis.Peters.

Importance of Success Factors by Various

“Gurus”/Biased Estimates by Tom Peters

Strategy Systems Passion Execution

Porter 50% 20 15 15

Drucker 35% 30 15 20

Bennis 25% 20 30 25

Peters 15% 25 25 35

Importance of Success Factors by Various “Gurus”/(Unreliable) Estimates by Tom Peters

Strategy Systems People Passion

Porter 50% 20 20 10

Drucker 25% 35 25 15

Bennis 25% 20 30 25

Peters 15% 20 40 25

good words.Bad words.

Words that may NOT be used in my presence:

“Motivate”

“Market”

“Motivate”

“In the end, management doesn’t

change culture. Management

invites

the workforce itself to change the culture.”

—Lou Gerstner

“Market”

SellSellSell

Words that may NOT be used in my presence: “Motivate” … “Market” … “MBA” … “Plan”

(mostly) … “Worker” … “Job” … “Task” … “Exceeds

expectations” … “HR” … “Employee evaluation” … “Man”

(mostly) … “Shareholder Value”

Words that MAY be used in my presence: “Invite” (v. “Motivate”) … “Sell” (v. “Market”) … “People” (we’d like to serve) (v. “Market segment”) … “Client” (v.

“Customer”) “OJT/MFA” (v. “MBA”) … “Act”/ “Execute” (v. “Plan”) … “Talent” (v. “Worker”) …

“Quest”/“Adventure-in-EXCELLENCE” (v. “Job”) … “Wow Project” (v. “Task”) … “Rockin’ (profit-makin’)

PSF” (v. “Department”) … “Theater” (v. “Office”) … “Breathtaking Experience” (v. “Transaction” that “Exceeds

expectations”) … “Talent Fanatics Inc” (v. “HR”) … “Brand You adventure” (v “Career development”)

“Annual Report development session” … (v.

“Employee evaluation”) … “Woman” (v. “Man”) …

Words that MAY be used in my presence: … “Wow!” (v. “Nice”) … “Bloody-minded”

(v. “Committed”) … “Thank you! (v. “____”) … “Attack”/Innovate (v. “defend”/Entrench)

… “Great stuff. Great people. ‘Do it’ fanatics.” (v. “shareholder value”) …

“EXCELLENCE. ALWAYS.” (v. “Good work”)

(v. “shareholder value”)

Radically Thrilling Language!

“Radically Thrilling.”

—BMW Z4 (ad)

EXCELLENCE: MANAGEMENT VERSUS (??) LEADERSHIP

LEADERSHIP (Eternal!): Invigorate a sizeable # of

people to Aspire to Excellence in pursuit of a Common

(Noble) Goal that revolves around service-of-exceptional-

value to Clients

THINGS.THINGS RIGHT.

Not!“Leadership is doing the right

things. Management is

doing things right.” —WB et al.

The Twain SHALL Meet!

Leadership: Invite Associates/Colleagues/Talent to join

a Gaspworthy Adventure in EXCELLENCE which will provide

matchless Personal and Professional Growth and be of Dramatically Different Service

to selected Clients

Management: Do it!

DRUCKER’S GREAT CONTRIBUTION: management

per se as a/the principal determinant of institutional

effectiveness

“Never forget implementation

boys. In our work it’s what I call the ‘missing 98

percent’ of the client puzzle.” —Al

McDonald

“Leadership” v. “Management”

“In [President Bush’s] belief that America needed to respond

resolutely to the dangers of terrorism, tyranny and

proliferation, he was mainly right. His chief failures stem

from incompetent execution.” —The Economist/05.13.2006

“Execution is strategy.” —TP (1983)

“Operations is policy.” —Fred Malek (1977)

EXCELLENCE.

ALWAYS.

“Why in the world did you go to Siberia?”

The Peters Principles: Enthusiasm.

Emotion. Excellence. Energy. Excitement. Service. Growth.

Creativity. Imagination. Vitality. Joy. Surprise. Independence. Spirit. Community. Limitless human potential. Diversity. Profit. Innovation. Design.

Quality. Entrepreneurialism. Wow.

Business* ** (*at its best): An emotional, vital, innovative, joyful,

creative, entrepreneurial endeavor that elicits

maximum concerted human potential in the

wholehearted service of others.***

**Excellence. Always.***Employees, Customers, Suppliers, Communities, Owners, Temporary partners

Business: The Ultimate Creative

Endeavor.

Business: The Ultimate Personal

Development-Growth

Experience.

Business: The Ultimate

Transcendent Service

Opportunity.

A Comment on Tom Peters in the Context of the Reagan Revolution …

“Tom Peters and Steve Jobs did more to make business cool ‘for the rest of us’ than any

others.” —Rich Karlgaard, publisher, Forbes

“To me business isn’t about wearing suits or pleasing stockholders. It’s about being true to

yourself, your ideas and focusing on the essentials.” —Richard Branson

EXCELLENCE.

HTSH: Engage!*

Commit! Engage! Try! Fail! Get up! Try again! Fail again! Try again! But never,

ever stop moving on! Progress for humanity is engendered by those who join and savor the fray by giving one

hundred percent of themselves to their dreams! Not by those timid souls who

remain glued to the sidelines, stifled by tradition, and fearful of losing face or

giving offense to the reigning authorities.

Key words: Commit! Engage! Try! Fail! Persist!

*HTST/Hands That Shape Humanity, Tom Peters’ contribution to a Bishop Tutu exhibit

EXCELLENCE.

DEFINED.

Great Companies … SET THE

AGENDA.*

(PERIOD.)

* “disturb the sleep of …

AGENDA SETTERS: “Set the Table”/ Pioneers/ Questors/ Adventurers

US Steel … Ford … Toyota … Sears … GM … ITT … The Gap … Limited …

Wal*Mart … Tesco … P&G … 3M … Intel … IBM … Apple … Nokia …

Cisco … Dell … MCI … Sun … Microsoft … Google … Enron …

Schwab … GE … Laker … Southwest … People Express … Ogilvy … Virgin

… eBay … Amazon … Sony … Amgen … BMW … CNN … Nike

Built to Last vs Built for Impact

“But what if [former head of strategic planning at Royal Dutch Shell] Arie De Geus is wrong in suggesting, in The

Living Company, that firms should aspire to live forever? Greatness is fleeting and, for corporations, it

will become ever more fleeting. The ultimate aim of a business organization, an artist, an athlete or a stockbroker may be to explode in a dramatic frenzy of value creation during a

short space of time, rather than to live forever.” —Kjell Nordström and Jonas Ridderstråle, Funky Business

“Life is occupied in both perpetuating itself and in surpassing itself. If all it does is maintain itself, then living is

only not dying.” —Simone de Beauvoir

“… Longevity has its place, but I’m not concerned about that now. I just want to do God’s will, and He’s allowed me to go up the mountain. And I’ve looked over.

And I have seen the Promised Land. And I don’t mind. … I may not get there

with you. …” —MLK/Memphis

TP#1*:

Netscape!

*Where would you rather have worked for those 5 years, Netscape or IBM-HP-Microsoft-Oracle? (Where, 25 years from now, would you

rather to be able to tell someone—e.g., grandchild—that you worked?)

EXCELLENCE.

YOU & ME.

“In Tom’s world, it’s always better to try

a swan dive and deliver a colossal belly flop than to

step timidly off the board while holding

your nose.” —Fast Company

/October2003

“This is the true joy of Life, the being used for a purpose recognized by yourself as a mighty one … the being a

force of Nature instead of a feverish, selfish little clod of

ailments and grievances complaining

that the world will not devote itself

to making you happy.” —GB Shaw/Man and Superman

“Life is not a journey to the grave with the

intention of arriving safely in a pretty and well-preserved body—but

rather a skid in broadside, thoroughly used up, totally worn out, and

loudly proclaiming, ‘Wow, what

a ride!’ ” —anon.

“Work on me

first.” —Kerry Patterson,

Joseph Grenny, Ron McMillan and Al Switzler/Crucial Conversations

“The First step in a ‘dramatic’

‘organizational change program’ is obvious—

dramatic personal change!” —RG

“No leader sets out to be a leader per se, but rather

to express him- or herself freely and fully.

That is leaders have no interest in proving

themselves, but an abiding interest in expressing

themselves.” —Warren Bennis, On Becoming a Leader

VALUE ADDED

EXCELLENCE.

REVENUE.MATTERS.

“Analysts … preferred cost cutting, as long as they could see two or three years of EPS growth. I

preached revenue and the analysts’ eyes would glaze over. Now revenue is ‘in’ because so many got caught, and

earnings went to hell. They said, ‘Oh my gosh, you need revenues to

grow earnings over time.’

Well, Duh!” —Dick Kovacevich, Wells

EXCELLENCE.

SELL. SELL.SELL.

This is not about …

“customer centrism”“integrated marketing”

etc.etc.etc.

It is about …

… sellin’ a whole lotta stuff and having customers go bananas

with love to the point that they tell every damn friend they have and then start buttonholing strangers on trains and planes

and busses.

M.I.A.*: Talk. (Present.) Listen. (Interview.)

Sell. (Life = Sales.) Do. (Execution-

Implementation.) Talent. (Recruit-Develop-Retain.) Project Management. (Create. Solicit support.

Execution. Adoption-Client “Culture Change.”) Product. (“It.”) Innovation. (Design. Creativity. “Buzz-building.”

Politics.) Leadership. (USMA, etc.) E.Q. (Connect.)

“Culture” Change. (Lasting impact.) Diversity. (Cross-cultural Effectiveness.) Career Creation. (Brand

You life-lifestyle.) Wellness. (Life.)

*B.Schools (“M.I.A.” or at most “B.I.A.”—barely in action)

. “Everyone lives by selling

something.”

– Robert Louis Stevenson

SellSellSell

“TAKE THIS QUICK QUIZ: Who manages more things at once? Who puts more effort into their appearance? Who usually takes care of the

details? Who finds it easier to meet new people? Who asks more questions in a

conversation? Who is a better listener? Who has more interest in communication skills? Who is more inclined to get involved? Who encourages harmony and agreement? Who

has better intuition? Who works with a longer ‘to do’ list? Who enjoys a recap to the day’s events? Who is better at keeping in touch

with others?”

Source: Selling Is a Woman’s Game: 15 Powerful Reasons Why Women Can Outsell Men, Nicki Joy & Susan Kane-Benson

TP.27 … on Selling

(Short) (Personal)

Out-prepare!! (huge time commitment!)Learn the “culture”Practice!Care-EmpathyListen-Empathetic listening (SC)“Listen”-Body languageK.I.S.S. (1-page summary. 1 = 1.)Enthusiasm-ENERGY-“Authenticity”!!OBVIOUS belief in productSelling: Solution-Success-Experience-Dream come true-Love-Dramatic DifferenceSelling: Better STORY! (“Best story wins”)Selling: Yourself! (Brand you)“Obvious” Wow!No exaggeration!Spell out commitments!SIMPLE timelineSell “inside”-First! Thorough!Relationships-“Way down”!!Time!!!! (E.g., build trust)Ooze integrityIntroduce to rest of team, esp. “mechanics”SBWA (5K for 5M)Remember: Close!Gotta-make-a-profit (be ready to walk away!)“Good loss”Don’t dis competitors!!Make her-him-target SUCCESSFUL (in a personal way)

C(I)>C(X)

“It’s always showtime.”

—David D’Alessandro, Career Warfare

GE (more or less):

The Sales122: 122 Ridiculously Obvious Thoughts About Selling Stuff

VALUE ADDED

EXCELLENCE. DRAMATIC.

DIFFERENCE.DOABLE.

EXCELLENCE.

WANTING.

This is not a “mature

category.”

This is an “undistinguishe

d category.”

“The ‘surplus society’ has a surplus of

similar companies, employing

similar people, with

similar educational backgrounds,

coming up with similar ideas,

producing similar things, with

similar prices and similar quality.”

Kjell Nordström and Jonas Ridderstråle, Funky Business

Line Extensions:

86 percent of new

products. 62 percent of revenues.

39 percent of profit.

Source: Blue Ocean Strategy, Chan Kim and Renée Mauborgne

“The Bottleneck

Is at the Top of the

Bottle”“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:

At the top!”

— Gary Hamel/Harvard Business Review

EXCELLENCE. DRAMATIC.

DIFFERENCE.DOABLE.

$415/SqFt/Wal*Mart$798/SqFt/Whole

7X. 730A-800P.

F12A.**’93-’03/10 yr annual return: CB: 29%; WM: 17%;

HD: 16%. Mkt Cap: 48% p.a.

“It’s simple, really, Tom. Hire for s,

and, above all, promote for s.”

—Starbucks middle manager/field

“A man without a smiling face must

not open a shop.” —Chinese Proverb

#1/100

“Best Companies to

Work for”/2005

Wegmans

EXCELLENCE.

Donnelly’s Weatherstrip

Service

Weymouth MA

EXCELLENCE.

Cirque du Soleil!

And the Winner is …

1. Audacity of Vision2. Innovation/R&D/Design3. Talent Acquisition & Development4. Resultant “Experience”5. Strategic Alliances6. Operations7. Financial Management8. Overall/Sustaining Excellence9. “Wow!”10. Lovemark!

Tattoo Brand: What % of users would tattoo the brand name on their

Top 10 “Tattoo Brands”*

Harley .… 18.9%Disney .... 14.8

Coke …. 7.7Google .... 6.6Pepsi .... 6.1Rolex …. 5.6Nike …. 4.6

Adidas …. 3.1Absolut …. 2.6

Nintendo …. 1.5

*BRANDsense: Build Powerful Brands through Touch, Taste, Smell, Sight, and Sound, Martin Lindstrom

Synonyms

PurityTranscendence

Antonyms

Mediocrity

“A man without a smiling face must

not open a shop.” —Chinese Proverb

EXCELLENCE. NO EXCUSES.

Summary:

WallopWal*Mart16*

*Or: Why it’s so absurdly easy to beat a GIANT Company

The “Small Guys” Guide: Wallop Wal*Mart16

*Niche-aimed. (Never, ever “all things for all people,” a “mini-Wal*Mart.)

*Never attack the monsters head on! (Instead steal niche business and lukewarm customers.)

*“Dramatically Different” (La Difference ... within our

community, our industry regionally, etc … is as obvious as the end of one’s nose!) (THIS IS WHERE MOST MIDGETS COME UP SHORT.)

*Compete on value/experience/intimacy, not price. (You ain’t gonna beat the behemoths on cost-price in 9.99 out of 10 cases.)

*Emotional bond with Clients, Vendors. (BEAT THE BIGGIES ON EMOTION/CONNECTION!!)

“This is an essay about what it takes to create and sell something remarkable. It is a plea for originality, passion, guts and daring. You can’t be remarkable by following someone else who’s remarkable. One way to

figure out a theory is to look at what’s working in the real world and determine what the successes have in common. But what could the Four Seasons and Motel 6 possibly have in common? Or Neiman-Marcus and Wal*Mart? Or Nokia (bringing out new hardware every 30 days or so) and

Nintendo (marketing the same Game Boy 14 years in a row)? It’s like trying

to drive looking in the rearview mirror. The thing that all these companies

have in common is that they have nothing in common. They

are outliers. They’re on the fringes. Superfast or superslow. Very exclusive or very cheap. Extremely big or extremely small. The reason it’s so hard to follow the leader is this: The leader is the leader precisely because he did something remarkable. And that remarkable thing is now taken—so it’s no

longer remarkable when you decide to do it.” —Seth Godin, Fast Company/02.2003

*Hands-on, emotional leadership. (“We are a great & cool & intimate & joyful & dramatically different team working to transform our Clients lives via Consistently Incredible Experiences!”)

*A community star! (“Sell” local-ness per se. Sell the hell out of it!)

*An incredible experience, from the first to last moment—and then in the follow-up! (“These guys are cool! They ‘get’ me! They love me!”)

*DESIGN DRIVEN! (“Design” is a premier weapon-in-pursuit-of-the sublime for small-ish enterprises, including the professional services.)

*Employer of choice. (A very cool, well-paid place to work/learning and growth experience in at least the short term … marked by notably progressive policies.) (THIS IS EMINENTLY DO-ABLE!!)

*Sophisticated use of information technology. (Small-“ish” is no excuse for “small aims”/execution in IS/IT!)

*Web-power! (The Web can make very small very big … if the product-service is super-cool and one purposefully masters buzz/viral marketing.)

*Innovative! (Must keep renewing and expanding and revising and re-imagining “the promise” to employees, the customer, the community.)

*Brand-Lovemark* (*Kevin Roberts) Maniacs! (“Branding” is not just for big folks with big budgets. And modest size is actually a Big Advantage in becoming a local-regional-niche “lovemark.”)

*Focus on women-as-clients. (Most don’t. How stupid.)

*Excellence! (A small player …

per me … has no right or reason to exist unless they are in Relentless Pursuit of Excellence. One earns the right—one damn day and client experience at a time!—to beat the Big Guys in your chosen niche!)

The Fab Five: What Every Small Biz Needs

Success = DDMMPR/"D-squared, M-squared, PR” = DramDiff + Money-Financial Acumen + Good “Marketing” Instincts + Stellar People +

Resilience

What I’ve Learned about

“Small Business”

Tom Peters26June2006

Passion for PRODUCT.OBSESSION With Product.

LOVE The Product.Aim To Be “ONLY ONES WHO DO WHAT WE DO.”

Keep ADDIN’ Stuff.Invest “UNWISELY” in R&D.

Reside Permanently In The DISCOMFORT Zone.“Unhealthy” PARANOIA Is A Good Thing.

Add Clients That PUSH-PULL.SELL. SELL. SELL. SELL.

Go For Broke: CUSTOMER CONTACT PEOPLE.PERFECTION: Customer Contact People.

Hire for ATTITUDE.INVITE On An Adventure. GREAT CFO/Biz Guy-Gal. NASTY CFO/Biz Guy-Gal.

QUADRANGULAR LEADERSHIP: Visionary-Talent Fanatic-Project Manager-I.P.M. (I.P.M. = Inspired Profit

Mechanic)

More @ Moore

GREAT Logo.DESIGN!

“OVERDO” Marketing Materials.WOMEN Roar. WOMEN Rule. WOMEN Buy.

Diversity = $$$$$$Be RELENTLESS. Cut And RUN.

Product Includes-Features the PACKAGING.Define Your DRAMATIC DIFFERENCE (R.P.O.V.8)

Best STORY Wins.DRESS For Success.

First Goal: AMUSE Yourself.Know YOURSELF.

DON’T Do Stuff You Hate. “Over-invest” In RELATIONSHIPS.

(R.O.I.R.: Return On Investment in Relationships)

SYSTEMATICALLY “Manage” Relationships.“Work” The SUPPORT PEOPLE In Client Orgs.

BLOG As If Your Life Depended On It.SOPHISTICATED Use Of Infotech.

RESPONSE To Problems.Make ’Em PAY.

CLOSE The Sale. Invest BIGTIME In PR.

Media FRIENDLY.Live-To-SCHMOOZE.

Fun/Laughter = $$$$ MBWA: Stay In Touch.

“You Must Be The Change You Wish To See In The World”/GANDHI

5K For 5M.Your CALENDAR Never Lies.

OUT: Pastels. IN: Technicolor

JUST SAY “NO” TO C.E.O.: CIO/Chief Innovation Officer. CSO/Chief Sales Officer.

CWO/Chief Wow Officer

EXCELLENCE Is Very Cool. “MICRO-MANAGE” Your Reputation.Wear Your Integrity On Your SLEEVE.

KEEP Your Promises.EXECUTION!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

“A Man Without A Smiling Face MUST NOT Open His Shop.”

RECOGNITION! Work HARD, Not Smart.

“Insanely Great.” THE STANDARD.

Tom/2006/Q97-Q100

Study more.Renew more.Tailor more.Offer more.Listen more.Market more.Practice more.

Challenge more.Socialize more.

Smile more.Follow-up more.

Plan execution more.Cost control more.

“A man without a smiling face

must not open a shop.” —Chinese Proverb

“It’s always

showtime.”

Small Giants: Companies That

Choose To Be Great Instead Of

Good —by Bo Burlingham

I HEREBY PLEDGE …

When asked, “What are some examples of companies stepping up to today’s

challenges?” … I will … NEVER AGAIN … offer an example of a Giant Company; instead I’ll refer to

Cirque du Soleil, Donnelly’s Weatherstrip Service, 3K tanning salons, 10.6M women-owned businesses (or the

typically female recipients of micro-lending) …*

*There is more to Biz Life than Giant Cos … LOTS MORE … that “hidden 99%”

VALUE ADDED

EXCELLENCE.

NEW MARKETS.ENORMOUS.

OPPORTUNITIES.

“Idiot” is too kind a

“That’s a very diverse* team.”

—Patrick Cescau, CEO, Unilever**

*1 of 14 Board of Directors members is a woman (not an exec); 2 of 7 Exec Team members are … Indians. (Source: FT/24-25 June.)

**Approximately 85% of Unilever’s

products are purchased by … women.

“That’s a

VERY diverse team.”

—Patrick Cescau, CEO, Unilever* **

*1 of 14 Board of Directors members is a woman (not an exec); 2 of 7 Exec Team members are … Indians. (Source: FT/24-25 June.)

**Approximately 85% of Unilever’s products are purchased by … women.

“That’s a

VERY sick man.”

—Tom Peters

“EXCELLENCE.”

PITIFUL.

????????

Weenie of the year,

2006 …

????????

EXCELLENCE.

FOUND.DUH.

“To be a leader in consumer

products, it’s critical to have

leaders who represent the population we

serve.” —Steve Reinemund/PepsiCo

“EXCELLENCE.”

AARGH.

Good Thinking, Guys!

“Kodak Sharpens Digital Focus

On Its Best Customers:

Women”

—Page 1 Headline/WSJ/0705

EXCELLENCE.

OPPORTUNITY.

“Women are the

majority market”

—Fara Warner/The Power of the Purse

USA/F.Stats: Short ’n (Very) Sweet

>50% of stock ownership, $13T total wealth (2X in 15 years)

>$7T consumer & biz spending (>50% GDP; > Japan GDP); >80% consumer spdg (Consumer = 70% all spdg)

57% BA degrees (2002); = ed & social strata, no wage gap

60% Internet users; >50% primary users of electronic equipment

>50% biz trips

WimBiz: Employees > F500; 10M+: 33% all US Biz

Pay from 62% in 1980 to 80% today; equal if education, social status, etc are equal

60% work; 46M (divorced, widowed, never married)

Source: Fara Warner, The Power of the Purse

The Perfect Answer

Jill and Jack buy slacks in black…

1. Men and women are different.2. Very different.3. VERY, VERY DIFFERENT.4. Women & Men have a-b-s-o-l-u-t-e-l-y nothing in common.5. Women buy lotsa stuff.

6. WOMEN BUY A-L-L THE STUFF.7. Women’s Market = Opportunity No. 1.8. Men are (STILL) in charge.9. MEN ARE … TOTALLY, HOPELESSLY CLUELESS ABOUT WOMEN.10. Women’s Market = Opportunity No. 1.

“Women don’t buy

brands. They join them.”

EVEolution

2.6 vs. 21

10. Women’s Market =

Opportunity No. 1.

10 UNASSAILABLE REASONS WOMEN RULE

Women make [all] the financial decisions.Women control [all] the wealth.Women [substantially] outlive men.Women start most of the new businesses.Women’s work force participation rates have soared worldwide.Women are closing in on “same pay for same job.”Women are penetrating senior ranks rapidly [even if the pace is slow for the corner office per se].Women’s leadership strengths are exceptionally well aligned with new organizational effectiveness imperatives.Women are better salespersons than men.Women buy [almost] everything—commercial as well as consumer goods.

So what exactly is the point of men?

Fara Warner

Damn it.

Cases!McDonald’s (“mom-centered” to “majority consumer”;

not via kids)

Home Depot (“Do it [everything!] Herself”)

P&G (more than “house cleaner”)

DeBeers (“right-hand rings”/$4B)

AXA FinancialKodak (women = “emotional centers of the household”)

Nike (> jock endorsements; new def sports; majority consumer)

AvonBratz (young girls want “friends,” not a blond stereotype)

Source: Fara Warner/The Power of the Purse

“To help revive the company’s sales and profits, McDonald’s

shifted its strategy toward women from one of ‘minority’ consumers who served as a

conduit to the important children’s market to one in

which women are the majority consumers and the main drivers

behind menu and promotion innovation.” —Fara Warner, The Power of the Purse

“The left hand rocks the cradle, The right hand rules the world.” —DeBeers*

(*created new $4B segment in 5 years)

“In those two simple sentences I saw a view of women I had not seen before in advertising. Here

was a company that had the guts to talk openly about what women were still struggling to understand and embrace.” —Fara

Warner, The Power of the Purse

Faith, Lys, Marti, Fara …

Targeting the New Professional Woman:

How to Market and Sell to Today’s 57 Million

Working Women.

—Gerry Myers

EXCELLENCE.

OPPORTUNITY.

EXCELLENCE.

OPPORTUNITY.

Add It Up!

Doing it right (“Men buy things that other men will buy for women. I buy things that women want.”—successful jeweler/F)

Greater workforce/global participation rate (“bigger contributor to GDP growth than technology, China, India”)

Higher wages (more seniority, promotions—even if not to CEO)

Women-owned businesses (answer to the Glass Ceiling)

EXCELLENCE.

OPPORTUNITY.

Just Say No. 18-44

Stupid Fr*&^ing Idiot-Marketers!

“Critics describe evening news in unflattering

terms— They’re old! They’re set in their

ways! They won’t buy iPods!””

Source: Advertising Age, 05.08.06

2000-2010 Stats

18-44: -1%

55+: +21%(55-64: +47% )

44-65: “New Customer Majority” *

*45% larger than 18-43; 60% larger by 2010Source: Ageless Marketing, David Wolfe & Robert Snyder

“The New Customer Majority is the only adult

market with realistic prospects for significant

sales growth in dozens of product lines for thousands of companies.” —David Wolfe & Robert Snyder,

Ageless Marketing

“Baby-boomer Women: The Sweetest of

Sweet Spots for Marketers” —David Wolfe and

Robert Snyder, Ageless Marketing

“WOMAN of the Year: She’s the most powerful

consumer in America. And as she starts to turn sixty

this month, the affluent baby boomer is doing what she’s always done—redefining

herself.” —Joan Hamilton, Town & Country, JAN06

“Sixty Is the New Thirty”

—Cover/AARP/11.03

EXCELLENCE.

OPPORTUNITY.

Women.Women business owners.

Boomers-Geezers.Single-adults (Urban)

Fastest growing demographic:

Single-person Households (>50% in

London, Stockholm, etc)

Source: Richard Scase

% of homes purchased by single women: 1981, 10%;

2005, 20%

% of homes purchased by single men: 1981, 10%;

2005, 9%

Source: USA Today/02.15.06

EXCELLENCE.

OPPORTUNITY.

Women.Women business owners.

Boomers-Geezers.Single-adults (Urban)

The Irreducible20

73. Exercise.74. Paint. (Leader. Portraits of Excellence.)75. Best story wins.76. “You must be the change you wish to see in the world.”77. Two “big ones.” Max. (Priorities.)78. No “I” in Team. (“I” in Win.)79. “I” in Win. (No “I” in Team.)

80. Different 1, Better 0. (Better = 0.1)

81. Imitation = Mistake. (Learn, from who?)82. Choose/battle the “right” competitor.83. Schools. Creativity. Entrepreneurship. (Not.)84. MBAs. Creativity. Entrepreneurship. Leadership. (Not.)85. Design. Under-rated. Wildly. (Still.) (Everything.)

VALUE ADDED

EXCELLENCE.

VALUE ADDED.UP THE LADDER.

EXCELLENCE I.

SOLVE IT.

And the “M” Stands for … ?

Gerstner’s IBM: “Systems Integrator of choice.”/BW

(“Lou, help us turn ‘all this’ into that long-promised ‘revolution.’ ” )

IBM Global Services* (*Integrated Systems

Services Corp.): $55B

“By making the Global Delivery Model both legitimate and mainstream, we have brought the battle to our territory. That is, after all, the purpose of strategy. We have become the leaders, and incumbents [IBM, Accenture]

are followers, forever playing catch-up. … However, creating a new business innovation is not enough for rules to be changed. The

innovation must impact clients, competitors, investors, and society. We have seen all this in spades. Clients have embraced the model and are

demanding it in even greater measure. The acuteness of their circumstance, coupled with the capability and value of our solution, has made the choice not a choice. Competitors have been dragged kicking

and screaming to replicate what we do. They face trauma and disruption,

but the game has changed forever. Investors have grasped that this is not a passing

fancy, but a potential restructuring of the way the world

operates and how value will be created in the future.” —Narayana Murthy,

chairman’s letter, Infosys Annual Report

The [Only?] Answer

PSF (Professional Service Firm “model”/The Organizing Principle)

Brand You(“Distinct” or “Extinct”/The Talent)

Wow! Projects (“Different” vs “Better”/The Work)

“Big Brown’s New Bag: UPS

Aims to Be the Traffic Manager for Corporate

America” —Headline/BW/2004

“SCS”/Supply Chain Solutions: 750 locations;

$2.5B; fastest growing division; 19 acquisitions,

including a bank

Source: Fast Company

MasterCard Advisors

I. LAN Installation Co. (3%)

II. Geek Squad. (30%.)

III. Acquired by BestBuy.

IV. Flagship of BestBuy Wholesale “Solutions” Strategy Makeover.

Gamechangging “Solutions”: Bet-the-Company

IBMIBMUPSUPS

XeroxXeroxMasterCardMasterCard

GEGEBestBuyBestBuy

Huge: Customer Satisfaction versus

Customer

Success

EXCELLENCE.NECESSITY.

OPPORTUNITY.

“There is no job that

is America’s God-given

right anymore.”

—Carly Fiorina/HP/January2004

“ ‘Disintermediation’ is overrated. Those who fear disintermediation should in fact be afraid of

irrelevance—disintermediation is just another way

of saying that … you’ve become

irrelevant to your

customers.”

—John Battelle/Point/Advertising Age/07.05

43,000

Chicago:

“support function” / “cost

center”/ “overhead”

or …

Are you … “Rock Stars of the

Age of Talent”

Are you the …

“Principal Engine of

Value Added”*E.g.: Your R&D budget as robust as the New Products team?

DD$21M

A review of Jack and Suzy Welch’s Winning claims there are but two key differentiators that set GE “culture” apart from the herd:

First: Separating financial forecasting and performance measurement. Performance measurement based, as it usually is, on budgeting leads to an epidemic of gaming the system. GE’s performance measurement is divorced from budgeting—and instead reflects how you do relative to your past performance and relative to competitors’ performance; i.e., it’s about how you actually do in the context of what happened in the real world, not as compared to a gamed-abstract plan developed last year.

Second: Putting HR on a par with finance and marketing.

The Irreducible20

117. Negotiation. Make all winners. (Save face.)118. Grace makes enemies friends.119. Network.

120. Invest in relationships. (Think ROIR. Return On Investment in Relationships.)118. Relationship investment. Forethought. Calendar item. Intensity.119. Innovation. Easy. (Hang out with weird.)120. Weird = Win. (Weird times.)121. “The bottleneck is at the top of the bottle.”122. Good Board = Weird Board. (At least, surprising.)123. No contention, no progress.

EXCELLENCE. NO OPTION.

“ ‘Disintermediation’ is overrated. Those who fear disintermediation should in fact be afraid of

irrelevance—disintermediation is just another way

of saying that … you’ve become

irrelevant to your

customers.”

—John Battelle/Point/Advertising Age/07.05

Department Head

to …

Managing

Partner, IS [HR, R&D, etc.] Inc.

Answer:

EXCELLENCE. NO OPTION.

PSF++.

Core Mechanism:“Game-changing Solutions”

The “PSF35”: Thirty-Five

Professional Service Firm Marks of Excellence

The PSF35: The Work & The Legacy

1. CRYSTAL CLEAR POINT OF VIEW (E very Practice Group: “If you can’t explain your position in eight words or less, you don’t have a position”—Seth Godin)2. DRAMATIC DIFFERENCE (“We are the only ones who do what we do”—Jerry Garcia)3. Stretch Is Routine (“Never bite off less than you can chew”—anon.)4. Eye-Appetite for Game-changer Projects (Excellence at Assembling “Best Team”—Fast) 5. “Playful” Clients (Adventurous folks who unfailingly Aim to Change the World)6. Small “Uneconomic” Clients with Big Aims7. Life Is Too Short to Work with Jerks (Fire lousy clients)8. OBSESSED WITH LEGACY (Practice Group and Individual: “Dent the Universe”—Steve Jobs)9. Fire-on-the-spot Anyone Who Says, “Law/Architecture/Consulting/ I-banking/ Accounting/PR/Etc. has become a ‘commodity’ ”10. Consistent with #9 above … DO NOT SHY AWAY FROM THE WORD (IDEA) “RADICAL”

Do good (excellent?!) work

Make a lot of money

Pointed Point of View!

R.POV8**Remarkable Point Of View/8 Words or less/“If you can’t state your

position in eight words or less you don’t have a position.”—SG

Are you the …

The PSF35: The People & The Leadership

18. TALENT FANATICS (“Best-Coolest place to work”) (PERIOD)19. EYE FOR THE PECULIAR (Hiring: Go beyond “same old, same old”) 20. Early Opportunities (vs. “Wait your turn”) 21. Up or Out (Based on “Legacy”/Mentoring as much as “Billings”/“Rainmaking”)22. Slide the Old Aside/Make Room for Youth (Find oldsters new roles?)23. TALENT IS OBSESSED WITH RENEWAL FROM DAY #1 TO DAY #“R” [R = Retirement]24. Office/Practice Leaders Evaluated Primarily on Mentoring-Team Building Skills25. A “PROPRIETARY” TALENT DEVELOPMENT PROCESS (GE)26. Team Leadership Skills Valued Early27. Partner with B.I.W. [Best In World] Outsiders as Needed and to Infuse Different Views

The PSF35: The Firm & The Brand

28. EAT-SLEEP-BREATHE-OOZE INTEGRITY (“My life is my message”—Gandhi)29. Excellence+ in EXECUTION … 100.00% of the Time (No such thing as a “small sins”/World Series Ring to the Batboy!) 30. “Drop everything”/“Swarm” to Support a Harried-On The Verge Team31. SPEND AS AGGRESSIVELY ON R&D AS A TECH FIRM OR CIRQUE DU SOLEIL32. A PROPRIETARY METHODOLOGY (FBR, McKinsey, Chiat Day, IDEO, old EDS)33. Web (Technology) Obsession34. BRAND/“LOVEMARK” MANIACS (Organize Around a Point of View Worth BROADCASTING: “You must be the change you wish to see in the world”—Gandhi)35. PASSION! ENTHUSIASM! (Passion & Enthusiasm have as much a place at the Head Table in a “PSF” as in a widgets factory: “You can’t behave in a calm, rational manner. You’ve got to be out there on the lunatic fringe”—Jack Welch)

The PSF35: The Firm & The Brand

28. EAT-SLEEP-BREATHE-OOZE INTEGRITY (“My life is my message”—Gandhi)

29. Excellence+ in EXECUTION … 100.00% of the Time30. “Drop everything”/“Swarm” to Support a Harried-On The Verge Team

31. SPEND ON R&D LIKE A TECH FIRM.32. A PROPRIETARY METHODOLOGY (FBR, McKinsey, Chiat Day, IDEO, old EDS)

33. BRAND MANIACS (Organize Around a Point of View Worth BROADCASTING)

34. PASSION! ENTHUSIASM!

35. EXCELLENCE. ALWAYS.

“PSF” Nirvana

Counselor

Trusted Advisor

PSF + BY + WP +

DD + E = UVA

PSF (Professional Service Firm) + BY (Brand You) + WP (WOW Projects) +

DD (Dramatic Difference)

+ E (Excellence) = UVA (Unassailable

Value-Added)

Static/Imitative

Integrity.Quality.

Excellence.Continuous Improvement.

Superior Service (Exceeds Expectations.)

Completely Satisfactory Transaction.Smooth Evolution.

Market Share.

Dynamic/Different

Dramatic Difference!Disruptive!

Insanely Great! (Quality++++)

Life-(Industry-)changing Experience!Game-changing!

WOW!Surprise!Delight!

Breathtaking!Punctuated Equilibrium!

Market Creation!

Synonyms

PurityTranscendence

Antonyms

Mediocrity

EXCELLENCE. UBIQUITOUS.

Trapper: <$20 per beaver pelt.

Source: WSJ

WDCP*: $150 to remove

“problem beaver”; $750-$1,000 for flood-control piping … so that beavers can

* “Wildlife Damage-control Professional”

Source: WSJ

Answer:

EXCELLENCE.

ATTITUDE.TRANSFORMATION.

Fleet Manager

Rolling Stock Cost Minimization Officer

Chief of Fleet Lifetime Value Maximization

Strategic Supply-chain Executive

Customer Experience Director (via drivers)

“Big Brown’s New Bag: UPS

Aims to Be the Traffic Manager for Corporate

America” —Headline/BW/2004

“Purchasing Officer” Thrust #1: Cost (at All Costs*) Minimization

Professional? Or/to: Full Partner-Leader in Lifetime

Value-added Maximization?

(*Lopez: “Arguably ‘Villain #1’ in GM tragedy”/Anon VSE-Spain)

HCare CIO: “Technology Executive” (workin’ in a hospital)

Or/to: Full-scale, Accountable (life or death)

Member-Partner of XYZ Hospital’s Senior Healing-Services Team (who happens to be a techie)

PSF Transformation: Credit Department/Trek

Was Is

Credit Dept Financial Services

Hammer on dealers until Make dealers successful so theythey pay CAN pay

AR sold to 3rd party Trek is the commercial financialcommercial co. Company

23 employees 12 employees

Oversee peak AR of $70M Oversee peak AR of $160M

Identify risky dealers Identify opportunities

Cost Center Profit Center

No products Products: Consulting, MC/Visa, Stored value of gift cards, Gift card peripherals, Online payments

Source: John Burke/0330.06

“Typically in a mortgage company or financial services company, ‘risk

management’ is an overhead, not a revenue center. We’ve become more

than that. We pay for ourselves, and we

actually make money for the company.” —Frank

Eichorn, Director of Credit Risk Data Management Group, Wells Fargo Home Mortgage (Source: sas.com)

Mantra:

“Eichorn it!”

Up, Up, Up,

the Value-added Ladder.

The Value-added Ladder/Stuff ‘n’ Things

Goods Raw Materials

The Value-added Ladder/Stuff & Transactions

ServicesGoods

Raw Materials

The Value-added Ladder/Opportunity-seeking

Gamechanging Solutions

ServicesGoods

Raw Materials

Answer:

The [Only?] Answer

Wildlife Damage-control

Professional

Are you the …

I. LAN Installation Co. (3%)

II. Geek Squad. (30%.)

III. Acquired by BestBuy.

IV. Flagship of BestBuy Wholesale “Solutions” Strategy Makeover.

EXCELLENCE II. EXPERIENCE IT.

“Experiences are as distinct

from services as services are from

goods.” —Joe Pine & Jim Gilmore, The Experience Economy:

Work Is Theatre & Every Business a Stage

“Club Med is more than just a ‘resort’; it’s a means of rediscovering oneself, of inventing an

entirely new ‘me.’ ”

Source: Jean-Marie Dru, Disruption

“The [Starbucks] Fix” Is on …

“We have identified a

‘third place.’ And I

really believe that sets us apart. The third place is that place that’s not work or home. It’s the place our customers

come for refuge.”

Nancy Orsolini, District Manager

Experience: “Rebel Lifestyle!”

“What we sell is the ability for a 43-year-old accountant to dress in

black leather, ride through small towns and have people be

afraid of him.”Harley exec, quoted in Results-Based Leadership

Up, Up, Up,

The Value-added Ladder/Memorable Connection

Spellbinding Experiences

Gamechanging SolutionsServicesGoods

Raw Materials

Warren Goes Shopping …

Q: “Why did you buy Jordan’s Furniture?”

A: “Jordan’s is spectacular. It’s all

showmanship.”

Source: Warren Buffet interview/Boston Sunday Globe/12.05.2004

CXO**Chief eXperience Officer

Extraction & Goods: Male dominance

Services & Experiences: Female

dominance

EXCELLENCE III.

DREAM IT.

Furniture vs. Dreams

“We do not sell ‘furniture’ at

Domain. We sell dreams. This is

accomplished by addressing the half-formed needs in our

customers’ heads. By uncovering these needs, we, in essence, fill in the blanks. We

convert ‘needs’ into ‘dreams.’ Sales are the

inevitable result.” — Judy George,

Domain Home Fashions

DREAM: “A dream is a complete moment in the life

of a client. Important experiences that tempt the client to commit substantial resources. The essence of

the desires of the consumer. The opportunity to help

clients become what they want to be.”

—Gian Luigi Longinotti-Buitoni

The Marketing of Dreams (Dreamketing)

Dreamketing: Touching the clients’ dreams.Dreamketing: The art of telling stories and entertaining.Dreamketing: Promote the dream, not the product.Dreamketing: Build the brand around the main dream.Dreamketing: Build the “buzz,” the “hype,” the “cult.”

Source: Gian Luigi Longinotti-Buitoni

Up, Up, Up,

The Value-added Ladder/Emotion

Dreams Come True

Spellbinding Experiences Gamechanging Solutions

ServicesGoods

Raw Materials

“The sun is setting on the Information Society—even before we have fully adjusted to its demands as

individuals and as companies. We have lived as hunters and as farmers, we have worked in factories and now we

live in an information-based society whose icon is the

computer. We stand facing the fifth kind of society: the Dream Society. … Future

products will have to appeal to our hearts, not to our heads. Now is the time to add emotional value to

products and services.”

—Rolf Jensen/The Dream Society:How the Coming Shift from Information to Imagination Will Transform Your Business

*Chief Dream Merchant

Big Blue

EXCELLENCE.

ALWAYS.

“What Isn’t Matter Is

What Matters” —section title, Branded Nation: The Marketing of

Megachurch, College Inc., and Museumworld, James Twitchell

Gas ………….….. $1.75 per gallonLipton Iced Tea .. $9.52 per gallonOcean Spray …... $10.00Gatorade ……….. $10.17Diet Snapple …... $10.32STP brake fluid .. $33.60Pepto-Bismol ….. $123.20Vicks NyQuil …... $178.13Evian water ……. $21.19 ($50B-$200B)

Source: Branded Nation: The Marketing of Megachurch, College Inc., and Museumworld, James Twitchell (2004)

VA “Teaching Moment”

“Andy pointed to a molding, about halfway up the

wall …”

EXCELLENCE IV.

LOVE IT.

“Brands have run out

of juice. They’re

dead.” —Kevin Roberts/Saatchi &

Saatchi

Kevin Roberts:

Lovemarks!

Tattoo Brand: What % of users would tattoo the brand name on their

Top 10 “Tattoo Brands”*

Harley .… 18.9%Disney .... 14.8

Coke …. 7.7Google .... 6.6Pepsi .... 6.1Rolex …. 5.6Nike …. 4.6

Adidas …. 3.1Absolut …. 2.6

Nintendo …. 1.5

*BRANDsense: Build Powerful Brands through Touch, Taste, Smell, Sight, and Sound, Martin Lindstrom

Up, Up, Up,

Lovemark Dreams Come True

Spellbinding ExperiencesGamechanging Solutions

ServicesGoods

Raw Materials

ServicesGoods

Raw Materials

Damn it …

Lovemark: IBMUPSPSF

Logistics “Department”HR “Department”

*Chief Lovemark Officer

Up, Up, Up,

ServicesGoods

Raw Materials

EXCELLENCE.

SOUL I.THE STORY.

“Storytelling

is the core of culture.”

—Branded Nation: The Marketing of Megachurch, College Inc., and Museumworld, James Twitchell

“Leaders don’t just make products and make

decisions. Leaders make

meaning.” – John Seely Brown

Best Story Wins!

“A key – perhaps the key – to leadership is

the effective communication

of a story.”—Howard Gardner/Leading Minds:

An Anatomy of Leadership

Market Power = Story Power

Exercise: Take a complex financial-market-

strategic analysis you are preparing to present

—and convert it into a high-impact, mountain-

moving number-less story.*

*Shell’s (et al.) “scenario planning”

*Chief Storytelling Officer

EXCELLENCE.

SOUL II.DESIGN.

All Equal Except …

“At Sony we assume that all products of our competitors have basically the same technology, price, performance

and features. Design is the only thing that

differentiates one product from another in the marketplace.” —

Norio Ohga

“Design is

treated like a religion at

BMW.”Fortune

“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

“With its carefully conceived mix of colors and textures,

aromas and music, Starbucks is more indicative of our era than the iMac. It is to the Age of

Aesthetics what McDonald’s was to the Age of Convenience or Ford was to the Age of Mass Production—the touchstone success story, the exemplar of all that

is good and bad about the aesthetic imperative. …

‘Every Starbucks store is carefully designed to enhance the quality of everything the customers see, touch, hear,

smell or taste,’ writes CEO Howard Schultz.”

-—Virginia Postrel, The Substance of Style: How the Rise of AestheticValue Is Remaking Commerce, Culture and Consciousness

Westin’s …

Heavenly Bed

Hypothesis: “Design” is the principle

“metaphor” for the encompassing Value-

added Imperative!

“If you can’t win on ‘cost,’ then you’re left with

‘cool.’ ” —Anon./NZ

CDO**Chief Design Officer

EXCELLENCE.

SYSTEMS. DESIGN. K.I.S.S.

“One bank is currently claiming to …

‘leverage its global footprint to provide effective financial solutions for its customers by providing a

gateway to diverse markets.”

—Charles Handy

“I assume that it is just saying that it is

there to ‘help its customers

wherever they are’.”

—Charles Handy

"A business unit strategy should be less than fifty pages

long and should be easy to understand. Its essence should be describable in one page ... If

you can't describe your strategy in twenty minutes,

simply and in plain language, you haven't got a plan.” —Larry

Bossidy

“I wanted GE to operate with the speed, informality,

and open communication of a corner store. Corner

stores often have strategy right. With their limited resources, they have to

rely on laser-like focus on doing one thing very well.”

—Jack Welch/Fortune/04.05

Lee’s Rule: Run It off a

Blackberry!

“The art of war does not require complicated maneuvers; the simplest are the best, and

common sense is fundamental. From which one might wonder

how it is generals make blunders; it is because they try to be clever.” —Napoleon on Simplicity, from Napoleon on Project Management by Jerry

Manas.

EXCELLENCE.

VALUE ADDED.NEW LADDER.NEW LEADER.

CXO**Chief eXperience Officer

*Chief Dream Merchant

*Chief Festivals Officer

CPI**Chief Portal Impresario

*Chief Conversations Officer

*Chief Lovemark Officer

*Chief Seduction Officer

*Chief Storytelling Officer

CDO**Chief Design Officer

CWO**Chief WOW Officer

EXCELLENCE. EVERYWHERE.

Better By Design: A National Strategy

NZ = Design

Excellence

New ZealandSpain

PortugalIreland

Singapore Taiwan

PhilippinesUAEChile

(Romania)

“ ‘MADE IN TAIWAN’: From

Cheap Manufacturing to Chic Branding”

—Headline/Advertising Age/06.05

Taiwan, Your Partner in InnoValue

Poster/Bucharest/03.06

London circa 1976: “You can’t build a ‘real

economy’ on services, finance, advertising,

etc.”

London circa 2006:

deliberately aims to be the “capital of the 21st

century”

The Irreducible20

163. Own up. Quick. ( Denial. Cancer.)

164. Celebrate. Often.165. 78 people = 78 approaches. (Each. Unique.)166. Weed. Ceaselessly. (Prune. Stupid. Rules. Non-stop.)

167. Get out of the way. (You = The problem.)168. Smile. Sunny. Optimism. (If it kills you.)169. Flowers. (Cheery workplace.)170. Enjoy. (Or get the hell.)

171. Be intolerant of “sour.” (1 = Major pollution)172. No “quick trigger” on promotion. (Too important.)173. Evaluation = Lots of study-time.174. Evaluation = “Life or death” to evaluee.175. “360” evaluation. No fad.

176. Exit when you’re done. (Done. Sooner than you think.)

VALUE ADDED

EXCELLENCE.BEDROCK.

INNOVATION

EXCELLENCE.

INNOVATE. OR. DIE.

What “We” Know “For Sure” About Innovation

Big mergers [by & large] don’t workScale is over-rated

Strategic planning is the last refuge of scoundrelsFocus groups are counter-productive“Built to last” is a chimera (stupid)

Success kills“Forgetting” is impossible

Re-imagine is a charming idea“Orderly innovation process” is an oxymoronic phrase

(= Believed only by morons with ox-like brains)“Tipping points” are easy to identify … long after they will do you any good

“Facts” aren’tAll information making it to the top is filtered

to the point of danger and hilarity“Success stories” are the illusions of egomaniacs (and “gurus”)

If you believe the memoirs of CEOs you should be institutionalized“Herd behavior” (XYZ is “hot”) is ubiquitous

… and amusing“Top teams” are “Dittoheads”

CEOs have little effect on performance“Expert” prediction is rarely better than rolling the dice

“A focus on cost-cutting and efficiency has helped many organizations weather the

downturn, but this approach will ultimately

render them obsolete. Only the constant pursuit of

innovation can ensure long-term

success.” —Daniel Muzyka, Dean, Sauder School of Business,

Univ of British Columbia (FT/09.17.04)

Pathetic!

“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

“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

Sluggish + Obese + Unimaginative + More

Sluggish + More Obese + More Unimaginative + Even More Sluggish + Even More

Obese + Even More Unimaginative = Nissan + Renault + GM = Innovative Challenger for Toyota????

??????????????

Crappy Management (GM) + Arrogant-Overstretched

Management (Carlos G) = Great Management

GM25/50-75: “Built to

last”????

Rate of Leaving F500

1970-1990: 4XSource: The Company, John Micklethwait & Adrian Wooldridge

(1974-200: One-half biggest 100 disappear)

Exit, Stage Right …

CEO “departure” rate, 1995-2004:

+300%Source: Booz Allen Hamilton (per USA Today/06.13.05)

“I don’t believe in

economies of scale. You don’t get better by being bigger. You get worse.” —

Dick Kovacevich/Wells Fargo/Forbes/08.04 (ROA: Wells, 1.7%; Citi, 1.5%; BofA, 1.3%;

J.P. Morgan Chase, 0.9%)

Last week’s “Invincibles”:

DellMicrosoft

Big Pharma

Scale?

“Microsoft’s Struggle With

Scale” —Headline, FT, 09.2005

“Troubling Exits at Microsoft” —Cover Story, BW, 09.2005

“Too Big to Move Fast?” —Headline, BW, 09.2005

“TOO BIG TO GROW: Why Wall

Street has soured on many of corporate America’s

most admired and feared companies”

—headline, Newsweek, 0313.06

“When asked to name just one big merger that had lived up to expectations, Leon

Cooperman, former cochairman of Goldman Sachs’ Investment Policy

Committee, answered: I’m sure there are success

stories out there, but at this moment I

draw a blank.” —Mark

Sirower, The Synergy Trap

“Almost every personal friend I have in the world works on Wall Street. You can buy and sell the same company six times and everybody makes

money, but I’m not sure we’re actually

innovating. … Our challenge is

to take nanotechnology into the future, to do

personalized medicine …” —Jeff Immelt/2005

New Economy?!

Genentech09, Amgen09

> Merck09 (70K-3/394B-5)

Wal*Mart + Home Depot + Walt Disney +

Intel + Microsoft + Pfizer = Flat

Source: “Blue Chip Blues”, Cover, BW, 0417.06

More than $$$$

#1 R&D spending,

last 25 years?

Line Extensions:

86 percent of new

products. 62 percent of revenues.

39 percent of profit.

Source: Blue Ocean Strategy, Chan Kim and Renée Mauborgne

Bacteria. (“Left tail” limits.)

Productivity of small.Failure rate of Big Mergers.

Failure rate of Big Companies.Terrorists.

Galbraith vs Hayek.

Productivity Pandemic

IMAOA: Institute of Modest Advances in (Many, Many)

Ordinary Activities

Market Share, Anyone?

— 240 industries: Market- share leader is ROA leader 29% of the time

— Profit /ROA leaders: “aggressively weed out customers who generate low returns”

Source: Donald V. Potter, Wall Street Journal

I HEREBY PLEDGE …

When asked, “What are some examples of companies stepping up to today’s

challenges?” … I will … NEVER AGAIN … offer an example of a Giant Company; instead I’ll refer to

Cirque du Soleil, Donnelly’s Weatherstrip Service, 3K tanning salons, 10.6M women-owned businesses (or the

typically female recipients of micro-lending) …*

*There is more to Biz Life than Giant Cos … LOTS MORE … that “hidden 99%”

EXCELLENCE. INNOVATION.

THE REAL STORY.

World Innovation Forum

EVERYTHING YOU THOUGHT YOU KNEW

ABOUT INNOVATION IS WRONG

Tom Peters/New York/0524.2006/Inno.new.LIST.0527

Blitzkrieg?

Case: Perceived

Rommel invents Blitzkrieg.Krauts kick the crap out of the

Frogs in two weeks.Q.E.D.

Case: Lesson Learned

Planned innovation is possible, is cool, is effective.

Write it up. Publish.

Case: Reality

Germans cross Meuse into France. Whoops: French intelligence completely drops

the ball. (Loses track of the Germans—no kidding.)

Germans keep advancing; outrun supply lines; no land-air co-ordination.

Hitler orders advance stopped.General never gets the word.

General marches to Paris, virtually unopposed.Germans shocked.

After the fact, Germans label it “Blitzkrieg.”

Case: Lessons Learned

Do something.Get lucky.

Attribute luck to superior planning.Get medals.

Smashing Conventional Wisdom

“Blitzkrieg in fact emerged in a rather haphazard way from the experience of the French campaign,

whose success surprised the Germans as much as the French. Why otherwise did the High Command try on various occasions, with Hitler’s backing, to slow the panzers down? The victory in France* came about

partly because the German High Command temporarily lost control of the battle. The decisive moment in this process was Guderian’s decision to move immediately westward on 14 May, the day

after the Meuse crossing, wrenching the whole of the rest of the army along behind him.”

*messed up traffic, little close air support, random heroics by some small bits of Guderian’s forces, Guderian not a disciple of

the WWI-derived “strategy of indirect approach”

Source: Julian Jackson, The Fall of France

Happy 50!

26April2006

Malcom McLean

Containerization

LessonsNeed-driven

A thousand “parents”Messy

Evolutionary“Trivial”

Experimentation

trial & ERRORLoooong time for systemic adaptation/s

(many innovations) (bill of lading, standard time)

Not …

“Plan-driven”The product of “Strategic Thinking/Planning”

The product of “focus groups”

“Consultants have drained a good deal of

the life from our democracy. Specialists in caution,

they fear anything they haven’t tested.” —Joe

Klein, Politics Lost

Get mad. Do something

about it. Now.

Ubiquitous “Politics”

“A man of great mediocrity.” —General George Patton about General Omar Bradley …… “A third-rate

general. He never did anything or won any battle that any other general could not have won as well or better.” —General Omar Bradley

about Sir Bernard Montgomery …… “If you want to end the war in any reasonable time, you will

have to remove Ike’s hand from the control of the land battle.” —Sir Bernard Montgomery about General Dwight Eisenhower …… “One thing that

might help win this war is to get someone to shoot King.” —General Dwight Eisenhower about Admiral Ernest King …… “Eisenhower, though

supposed to be running the land war, is on the golf links at Rhiems—entirely detached and

taking practically no part in running the war.” —Sir Alan Brooke …… “If the unhelpful British

attitude continues, then I shall go home.” —General Dwight Eisenhower

Source: David Irving, The War Between the Generals: Inside the Allied High Command

Utterback

“A pattern emphasized in the case studies in this book is the degree to which powerful competitors not only resist innovative threats, but actually resist all efforts to understand them, preferring to further their positions in older products. This results in a

surge of productivity and performance that may take the old technology to unheard of heights. But in most cases this is a sign of

impending death.” —Jim Utterback, Mastering the Dynamics of

Innovation

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

“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

“Chivalry is dead. The new code of conduct is an active strategy of

disrupting the status quo to create an unsustainable series of competitive

advantages. This is not an age of defensive castles, moats and armor. It is

rather an age of cunning, speed and surprise. It may be hard for some to

hang up the chain mail of ‘sustainable advantage’ after so many battles. But

hypercompetition, a state in which sustainable advantages are no longer

possible, is now the only level of competition.” —Rich D’Aveni, Hypercompetition: Managing

the Dynamics of Strategic Maneuvering

“Acquisitions are about buying market share.

Our challenge is to create

markets. There is a big difference.” —Peter Job, CEO, Reuters

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

“Fail . Forward.

Fast.”High Tech CEO, Pennsylvania

First-level Scientific Success:

Beyond Brains

First-level Scientific Success

The smartest guy in the room wins”

Or …

FanaticismPersistence-Dogged Tenacity

Patience (long haul/decades)-Impatience (in a hurry/”do it yesterday”)

PassionEnergy

Relentlessness (Grant-ian)

EnthusiasmDriven (nuts!)

(Brutal?) CompetitivenessEntrepreneurialPragmatic (R.F!A.)

Scrounge (“gets” the logistics-infrastructure bit)

Master of Politics (internal-external)Tactical Genius

Pursuit of (Oceanic) Excellence!High EQ/Skillful in Attracting + Keeping Talent/Magnetic

Prolific (“ground up more pig brains”)

Egocentric

Sense of History-DestinyFuturistic-In the Moment

Mono-dimensional (“Work-life balance”? Ha!)

Exceptionally IntelligentExceptionally Clever (methodological shortcuts/methodological genius)

First-level Scientific Success/Short Form

Scientific Success (Nobel-level) = Genius +

Execution + Master of Soft Skills + Enthusiasm + Magnetism + Destiny

(sense of) + Energy

Biz Bonanza Success = DDMMSTERL/

"D-squared, M-squared, STERL” = DramaticDifference + “Business”

Acumen/Money + Good “Marketing” Instinct/“Ice-to-

Eskimos” Sales Skills + Stellar Talent + Aim for Excellence +

Resilience/Tenacity/Adaptability + Luck (The “Necessary Nine”: What Every Small Biz

Requires to Excel.) (Big, too.)