Distinct or … Extinct: Tom Peters Seminar2000 Cincinnati 05 June 2000

Distinct or … Extinct: Tom Peters Seminar2000

Cincinnati05 June 2000

Defeated Before The Starter’s Gun!

“Track 4: Managing Organization Change (Helping

Tired and Overworked Professionals with Today’s

Workplace Realities)”

NAPM: “You are the

Rock Stars of the

B2B Age!”

Pentium III 800MHz: $42,893.00/#Hermes Scarf: $1,964.29

Saving Private Ryan on DVD: $874.75Mercedes-Benz: $18.98Hot-rolled steel: $0.19

Source: Fortune (3.20.00)

“Researchers say they have found a way to mate human cells with circuitry in a ‘bionic chip’ … The tiny device – smaller and thinner

than a strand of hair – combines a healthy human cell with an electronic circuitry chip.”

AP/AOL/02-00

An Age of Passion:1 Year = 1.5 Wal*Marts

03.27.99: $167B03.27.00: $555B

P.S.: Wal*Mart = #8 in 2000

No Wiggle Room!

“Incrementalism is innovation’s worst

enemy.” Nicholas Negroponte

Just Say No …

“I don’t intend to be known as the ‘King of the

Tinkerers.’ ”CEO, large financial services company

(New York, 5-99)

64/24

Goal?

Welcome to the Land of the True Believers!

“We have the ability to turn the economy upside down, to enhance lives, and to drive

civilization forward.”

Michael Saylor,MicroStrategy

“It means nothing less than the total

reinvention of this company.”

Jacques’ New New Ford

Ford + MSN CarPointFord + Yahoo!Ford + Oracle

Ford + HP/MCIWorldcomEtc.Etc.

“We are in a

brawl with no rules.”

Paul Allaire

S.A.V.

T.T.D.sThe next slide is the first of many

“T.T.D.” activities. I.e.: Things To Do. These are by and large shorthand forms of training exercises I use.

Also: Most of these T.T.D. slideshave accompanying Notes.

(See following slide.)Tom Peters

T.T.D./True or False:

“incrementalism”

VERSUS

“innovation”?

Notes Page• This is a daunting issue. There is no “right answer.”

But it merits constant, conscious debate. Consider the value of incremental change. [Kaizen, etc.] And discuss whether or not this thwarts “BIG” initiatives aimed at wholesale reinvention.

• Also: Consider … “Can we do both?” [I’m not sure.] P.S.: This crucial issue holds for Finance Departments as much as Product Divisions. And it holds for the smallest and newest of businesses! THIS DEBATE IS WORTH LOTS OF TIME! KEEP IT PRACTICAL!

Tom Peters Seminar2000

Brand Everything:Distinct or Extinct!

Part I: Brand InsidePart II: Brand Outside

Part III: Brand Leadership

Forces @ Work I

The Destruction Imperative!

Forget > Learn

“The problem is never how to get new, innovative thoughts into your mind, but how to get old ones out.”

Dee Hock

“It is generally much easier to kill an

organization than change it

substantially.” Kevin Kelly, Out of Control

“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

“Talent” and a $2T enterprise??????

“Acquisitions are about buying market share. Our challenge is to create markets. There is a big difference.”

Peter Job, CEO, Reuters

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

Enron (per Gary Hamel/Fortune/06.00)

Design an open market for ideasOffer an open market for capital

Open up the market for talentMake like a cell: Divide and divide

(“We haven’t been able tostart new businesses within existing businesses”)

Pay your innovators well – really well

Dept. Head I = Sports G.M.

Dept. Head II = V.C.

G.M. = The Recruitment and Development of Top Talent.

[Period!]

V.C. = Bets on “Talent.” Bets on Projects. [Period!]

Silicon Valley Success Secrets

“Pursuit of risk”: 4 of 20 in V.C. portfolio go bust; 6 lose money; 6

do okay; 3 do well; 1 hits the jackpot

Source: The Economist

“R & D”

Intel’s venture fund: 275 investments, $8B

Source: Fast Company , eCompany

Net World!

Act now. Analyze later.

Avram Miller

[TP to Chain Owner …

“Do 5 deals before you go home!”]

“It used to be that the big

ate the small. Now the fast eat the slow.”Geoff Yang, IVP/ (Institutional

Venture Partners)

E.g.: Craig Venter/Celera Genomics

C.E.O. to

C.D.O.

The Gales of Creative Destruction

+29M = -44M + 73M

+4M = +4M - 0M

Paradox Redux

Atlanta: +113,600 = #1 metro area

Layoffs [major]: BellSouth, Lockheed, Coca-Cola

Brand Inside

Brand Org: Lean, Mean, Linked &

Electronic

108 X 5vs.

8 X 1*

* 540 vs. 8

And Now the Equivalent …

White Collar Revolution!

Cemex and FDX!

The Pincer 5

“Destructive” entrepreneurs/ Global Competition

“White Collar Robots”

THE INTERNET! [E.g.: GM + Ford + DaimlerChrysler]

Global Outsourcing [E.g.: India, Mexico]

Speed!!

RR on “Assetless” [J.B.] Sara Lee

“The most profitable businesses in the future will act as knowledge brokers, linking insights into what’s available

with insights into the customer’s individual needs

and preferences.”

The “&-!!+#$% in the middle”*

Jim Clark on Healtheon/WebMD

* ’twixt docs, patients, insurers and providers; $275B of $400B in waste; source: Michael

Lewis, The New New Thing

[ Incidentally …

CEO Jeff ArnoldAge: 30

First Start-up: Age 24]

“This is the Age of Ageism: The real innovator’s dilemma isn’t ‘disruptive technologies;’ it’s

the relentless rise of the quasi-adolescents who wield them.”

Michael Schrage (06.00/Fortune)

“The Triumph of the Brainiac: In today’s biotech,

dot-com world, nerds rule, and it all starts in

high school”

Cover story, The New York Times Magazine (06.04.00)

“We want to be the air traffic controllers

of electrons.”Bob Nardelli,

GE Power Systems

So does Enron![et al.]

[Water2Water.com]

Buzzsaw.com

Builders, Owners, Architects, Contractors, Suppliers

$4T industry

5,300 commercial bldg. projects’ specs on-line; +70 per day

And …

e-Builder.com, BuildNet.com,

EqualFooting.com [et al.]

12/31/00 (per Newsweek 04.24.00)

75% of U.S. universities will have on-line offerings/ 5.8 million students

“Unbundling” profs’ jobs (star lecturer, facilitator)/ Repackage “content”

as multi-media “event”

AAUP is angry! (Good news!)

355 studies: Equal results! (and one teachers union study

that disagrees!)

“The e-conomy is one of re-intermediation, where new

technologies make it possible to radically increase complexity and

efficiency with the introduction of new marketplaces. In these markets, value

chains constantly reorganize as the demands of the consumer and

business change.”Thomas Koulopoulos, Delphi Group

These are …

L.A.D.T.I.R.S.*

*Life-and-death-total-industry-reinvention-struggles

T.T.D.

Does your vision involve a critical position in the

industry’s Spider’s Web?

Notes Page

• Try to depict your industry … or your department … with all its interconnections. E.g.: What if every task you perform became a “for profit” task in which you became an “industry expert”? E.g.: As an HR Dept. in the utility industry, what if you started the premier dot.com industry Talent Bank?

The Cluetrain Manifesto

Magic!

[Inter]networked Markets

meet …

[Intra]networked Workers

Source: The Cluetrain Manifesto: The End of Business as Usual

“Hyperlinks subvert hierarchy!”


“E-business is the final nail in the coffin

for bureaucracy at GE.”

Jack Welch/GE Annual Report 2000

Corporate Resistance to “It”

“It all goes back to fear of losing control!”


[ Words to Live By …

“Hierarchy is an organization with its face

toward the CEO and its ass toward the customer.”

Kjell Nordstrom and Jonas Ridderstrale, Funky Business]

Brand Inside

Brand Work!

So what will be the Basic Building Block of the

New Org Unit?

Why are there no books on how to create

a “Cool, Rocking, WOW-producing

Finance Department”?

You are the Rock Stars

of the B2B Age!

[NAPM Redux: Welcome to the Y2K New Orleans

Jazz and Real Cool Purchasing Dudes

Festival!]

NAPM: Not “Purchasing”!NAPM: Not “Supply Chain Mgt.”

NAPM = TE/IR!*

*Total Enterprise/Industry

Reinvention!

Message to NAPM: You are

Re-invention Evangelists!

“support function” / “cost center” / “bureaucratic

drag”

or …

“Rock Stars of the ‘Age of Talent’ ”

’tude dude!

PSF 1.0

Department Head

to …

Managing Partner, HR [IS, etc.] Inc.

Every job done in W.C.W. is also done

“outside” … for profit!

Credo

“WORK WORTH

PAYING FOR”

PSF 1.0

Professional Service Firm Conversion Kit /

Release 1.0

The “7Ps” of PSF 1.0

Projects!Passion!

Provocation!Partnership!

Politics!Professionalism!

Performance!

C.I.O. to

C.E.F.R.N.S.*

*Chief Evangelist For

Really Neat Stuff

T.T.D.

Compare: “Department Head” versus

“Managing Partner, Finance Inc.”

Notes Page

• See our book, the Professional Service Firm50, re the differences between a traditional “Dept.” and a full-fledged “PSF.” Our “The Work Matters” manifesto – at tompeters.com – also covers this.

“How long does ‘culture change’

take?”

What Do I “Do” First?

One Minute Excellence!*

*Thomas Watson

Culture Change is not “Corporate.”Culture Change is not a “Program.”

Culture change does not take “Years.”Culture Change does not start “Today.”

Culture Change starts Right Now!Culture Change

Lives in the Moment!Culture Change is

Entirely in Your Hands!

“Reward excellent failures. Punish

mediocre successes.”

Phil Daniels, Sydney exec

But Does It Matter ????

“On time, on budget … who cares?”

anon. seminar participant (4/99)

“You really got to me. So many of our information technology projects take on a life of their own, and I know they’ll never end up as more than ‘mediocre successes.’ ”

CEO, F100 financial services company (10-98)

WOW Project Anatomy

I. Create!II. Sell!

III. Implement! IV. Exit!

Create/Reframers’ Rules:

Rule 1: Never accept an assignment as given!

Rule 2: You’re never so powerful as when you are “powerless”!Rule 3: Every “small” project contains the entire enterprise

DNA!

Measures

–WOW!–Beauty!–Raving Fans!–Impact!

“Every project we take on starts with a question:

How can we do what’s never been done

before?”Stuart Hornery, CEO, Lend Lease

WOW Project “Acid Test”

Can you explain it - with zest -

to your 14-year-old?

Sell, Sell, Sell!

Master “The Pitch”!

Repeat: “I am a salesperson!”

Implement/Culture of Prototyping

“Effective prototyping may be the most valuable core

competence an innovative organization can hope to

have.”

Michael Schrage

“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

T.T.D./ Prototyper’s LawsDefine a small, practical test of something on a

page or less of text. Now.

Gather “found” materials … on the [very] cheap.

Find a/one partner-“customer” who’ll provide a test site.

Set a very tight deadline of about 5 days for the next concrete step.

Conduct the test! Debrief A.S.A.P.

Set the next test date. Now. [No more than 5 days hence.]

Notes Page

• The idea is to establish a “rhythm of prototyping” that defines every project.

T.T.D./ Secret No. 1: Forget “selling up”! Go horizontal: Find a (one!) “line” ally in “the Boonies”!

Secret No. 2: “Powerless” allies are Cool!Secret No. 3: Become a Prototyping

Maniac! Secret No. 4: Embrace Politics /

“Community Organizing”! Secret No. 5: Passion Rules! Get your

story in shape!

Notes Page

• Main Idea: YOU ARE NOT “POWERLESS.” Seek out allies in strange places … and get going! DO NOT WASTE TIME “SELLING UP.”

• Attitude: You are the Gandhi/King of your “mission.”

• So: IDENTIFY THE FOLKS YOU WANT TO PLAY WITH RE THAT INCREDIBLY COOL IDEA YOU HAVE!

K2K!

Pause …

Implementation 101

Mark McCormack: 5,000 miles for a 5

min. meeting.

ESP to TJP: DON’T FORGET YOUR

THANK YOU NOTES!

“It was much later that I realized Dad’s secret. He gained respect by giving it. He talked and listened to the fourth-

grade kids in Spring Valley who shined shoes the same way he talked and listened to a bishop or a college

president. He was seriously interested in who you were and what you had to

say.”

Sara Lawrence-Lightfoot, Respect

“The deepest human need is

the ... NEED TO BE APPRECIATED.”

William James

Connection!

2 folks in Hartford …

SOOOO … HOW MANY OF YOUR COLLEAGUES ARE

“BACK HOME” AT WORK ON NO-BALONEY …

WOW* PROJECTS!

* WOW = Will be remembered fondly/

bragged about 5+ years from now

Epitaph from Hell …

Joe T. Jones

1942 - 2000

HE WOULDA DONE SOME

REALLY COOL STUFF

BUT …

HIS BOSS WOULDN’T LET HIM!

Characteristics of the “Also Rans”

“minimize risk” “respect the chain of command” “support the boss” “make budget”

Source: Fortune on “most admired global corporations” (10/26/98)

The greatest dangerfor most of us

is not that our aim istoo high

and we miss it,but that it is

too lowand we reach it.

Michelangelo

T.T.D.: Now!– List all projects– Carefully describe a “WOW Outcome” for you

and the Client– Score (!) all projects on WOW, Beauty, Impact,

Raving Fan-hood– Pick one project with a high combined score– Draft a one-page New Description that

emphasizes WOW, Beauty, etc.– Circulate and edit … for three days – Reduce to 5 bullet points

Notes Page

•DO IT! •NOW!

[We are not trying to “WOW you up.”

We think you are/have WOW.

We are trying to give you permission to be WOW.]

1) Turn ignition key.2) Shift into drive.

3) Press foot firmly on the throat of mediocrity.

Source: Mercedes ad

Brand Inside

Brand You: Distinct …

or Extinct

DISTINCT … OR EXTINCT!

“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

“If one quarter can’t make the journey, that’s the way it

has to be.”

Carly Fiorina (1-00/Forbes)

Promotion on Seniority?

Artists?Violinists?

Chefs?Ballplayers?

Personal “Brand Equity” Evaluation– I am known for [2 to 3 things]; next year at this time I’ll

also be known for [1 more thing].– My current Project is challenging me …– New things I’ve learned in the last 90 days include …– My public “recognition program”

consists of …– Additions to my Rolodex in the last 90 days include …

–My resume is discernibly different from last year’s at this time …

Resume=

Your Annual Report*

*New York Times Magazine [05.14]

Ike’s World Book Page

And Yours?

T.T.D./Assignment

Construct a 1/8-page or 1/4-page ad for

Brand You … for the Yellow Pages

Notes Page

•THIS IS A BIG DEAL. TAKE IT SERIOUSLY. [“Yellow Pages ads” are the centerpiece of our formal Brand You training programs.]

“You are the storyteller of your own life, and you

can create your own legend or not.”

Isabel Allende

[ T.T.D.: How About It?

Replace your current evaluation process with

Yellow Pages ads.]

Notes Page

• NO BULL! Some of our Clients have gone this far. And report stunning results. If you can’t do this formally, try it informally.

R.D.A.

Rate: 15%?, 25%?

Therefore: Formal “Investment

Strategy”/R.I.P.

T.T.D./Your R.I.P.

IS IT … FORMAL? IS IT ... WOW!?

Notes Page

• We think “R.I.P.s” are imperative! So … please take these two questions seriously and literally!

T.T.D./R.I.P.

Use by yourself.Use with your mates.

Use [quantitatively?] as a measure of departmental/

P.S.F. renewal.

Use in formal eval process.

Notes Page

• The whole idea is to make “R.I.P.s” a/the centerpiece – formally – of measuring unit “freshness.” E.g.: SCORE EVERYONE’S “R.I.P.” ON ITS BOLDNESS/WOW.

“You must realize that how you invest your human capital matters as much as how you

invest your financial capital. Its rate of return determines your future options. Take a job for

what it teaches you, not for what it pays. Instead of a potential employer asking, ‘Where do you see yourself in 5 years?’ you’ll ask, ‘If I invest my mental assets with you for 5 years, how

much will they appreciate? How much will my portfolio of career options grow?’ ”

Stan Davis & Christopher Meyer, futureWEALTH

Seminar Y2K/Brand Inside

Message: Distinct … or

Extinct!

“I don’t think there’s anything worse than being

ordinary.”American Beauty

When you love what you do, you’re alive.

jobs.com

Bill Parcels’ World/ Brand You World!

BLAME NOBODY!EXPECT NOTHING!DO SOMETHING!

NY Post (9/99)

Women and new-economy

management …

The New Economy …

Shout goodbye to “command and control”!

Shout goodbye to hierarchy!

Shout goodbye to “knowing one’s place”!

Women’s Stuff = New Economy Match

Improv skillsRelationship-centric

Less “rank consciousness”Self determinedTrust sensitive

IntuitiveNatural “empowerment freaks” [less

threatened by strong people]Intrinsic [motivation] > Extrinsic

“Boys are trained in a way that will make

them irrelevant.”

Phil Slater

It’s Girls, Stupid!

1996: 8.4M women, 6.7M men in college (est: 9.2 to 6.9 in 2007); more women than men in

high-level math and science courses

More girls in student govt., honor societies; girls read more books, outperform boys in artistic and musical ability, study abroad in

higher numbers

Boys do rule: crime, alcohol, drugs, failure to do homework (4:1)

Source: The Atlantic Monthly (5/2000)

[ … and women are Market Opportunity #1]

Brand Inside

Brand Talent: The Great War for Talent

Issue Y2K

The Great War for Talent!

“When land was the scarce resource, nations battled

over it. The same is happening now for talented people.”

Stan Davis & Christopher Meyer, futureWEALTH

“The market’s being divided up right now. We’re in a

tough competition [with the U.S. and the U.K.] for

the best brains.”Gerhard Schroeder, on Germany’s new

tech immigration policy[Frankfurter Allgemeine/06.02.00]

Tomorrow’s Headlines

“Molecular biologists are up 3 points, economists

down 1/4 , in moderate trading”futureWEALTH, Stan Davis and

Christopher Meyer

TALENT AGENT: Babe! Babe! You’re not hearing me. My guy is not stepping foot into your greenroom until

we have a deal, including restructured profit participation on the video and Internet rights.

DEPARTMENT HEAD: Look, Sid, your boy’s not our only option. There’s also Schwartz, Taylor, Wycoff …

TALENT AGENT: Sorry, babe, I rep them too! This summer I locked up your whole department.

DEPARTMENT HEAD: My whole math department?TALENT AGENT: You want to talk package? I can go

there!

Source: Gary Trudeau/Doonesbury

There is no “talent shortage” …

if …

you are a GPTW*

*Great Place To Work

Talent war, Web-speed!

Every resume or employment question that comes to Lucent via

the Web gets answered in 30 minutes or less. [24/7.]

Red Herring [06.00], on Lucent Director of

Recruitment Jim Baughman

“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

Alan Kay on PARC’s Bob Taylor

“He was a connoisseur of

talent.”

“Our business needs a massive transfusion of talent. And talent, I believe, is most likely to be found among non-conformists, dissenters and rebels.” David Ogilvy

Axiom: Never hire anyone without an aberration in their

background. (Find the One Ton Cookie Man!)

“He grew his hair long, played guitar in a rock band, chased

girls, got into trouble. At age 17 he was flogged by his house

master, who described him as ‘the most difficult boy I’ve ever

had to deal with.’ ”

Solution?

Ritalin [“a chemical virtually identical to cocaine”/Reason

magazine]

Or …

Elect Him Prime Minister

Tony Blair*

*talk/May 2000

“Whoever is the most impertinent

has the best chance.”

W.A. Mozart

“Conformity is the enemy of freedom

and the jailer of growth.”

J.F.K.

H.R. to H.E.D. ???

HumanEnablement Department

“Firms will not ‘manage the careers’ of their employees. They

will provide opportunities to enable the employee to develop

identity and adaptability and

thus be in charge of his or her own career.”

Tim Hall et al., “The New Protean Career Contract”

Yes!

Director of Bringing in the Really Cool People

All You Need to Know?

Chief Evangelist For Really Neat Stuff

Director Of Bringing In The Really Cool People

T.T.D.

STEAL THESE TWO JOB TITLES!

“Every school I visited was participating in the systematic suppression of creative genius.”

“From cradle to grave the pressure is on: BE NORMAL!”

Gordon MacKenzie

“The school system is absolutely not designed for creativity. Quietness, going along with the flow, keeping order – this is what’s encouraged.”

Tom Yamokoski

Talent = Brand

Brand Outside=

Brand Inside

Brand inside

A BIAS FOR ACTION = No. 1

S.A.V.

Net World!

Act now. Analyze later.

Avram Miller

[TP to Chain Owner …

“Do 5 deals before you go home!”]

Fail. Forward.

Fast.

High-tech exec

Ready.Fire!Aim.

Ross Perot, Wayne Calloway, Harry Quadracci, et al.

“Steve Ross had a wonderful philosophy: People get fired for

not making mistakes.”Bob Pittman

He who has the quickest O.O.D.A. Loops* wins!

*Observe. Orient. Decide. Act. / Col. John Boyd

Culture of Prototyping

“Effective prototyping may be the most valuable core

competence an innovative organization can hope to

have.”

Michael Schrage

“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

ABfA [A Bias for Action]

RFA [Ready.Fire!Aim.]

SAV [Screw Around Vigorously]

FFF [Fail Forward Fast]

OODA [Observe.Orient.Decide.Act.]

Bottom Line:The new

metabolism!

Forces @ Work II

The Commodity Trap

In the Beginning …

“The audit has become a commodity.”

Big 5 audit partner to TP

Quality Not Enough!

“Quality as defined by few defects is becoming the price of entry for automotive marketers rather than

a competitive advantage.”

J.D. Power

Quality Not Enough!

“While everything may be better, it is also increasingly

the same.”

Paul Goldberger on retail, “The Sameness of Things,” The New York Times

What’s Special?

“Customers will try ‘low cost providers’ because the Majors have not given them any clear

reason not to.”

Leading Insurance Industry

Analyst (10-98)

“We make over three new product announcements a

day. Can you remember them?

Our customers can’t!”Carly Fiorina

“The ‘surplus society’ has a surplus of similar companies, employing similar

people, with similar educational backgrounds, coming up with similar ideas, producing similar things, with similar prices and similar quality.”

Kjell Nordstrom and Jonas Ridderstrale, Funky Business

The “10X/10X Phenomenon”

10 Times Better/

10 Times Less Different

“When we did it ‘right’ it was still pretty

ordinary.”

Barry Gibbons on

“Nightmare No. 1”

Aarrgh!

“Quality is conformance to requirements, not

goodness.”

Phil Crosby

Pretzel Crumb-less-ness Plus …

“The Ritz Carlton Experience enlivens the senses, instills

well-being and fulfills even the unexpressed wishes and needs of

the guest.”

from the Ritz Carlton Credo

“You do not merely want to be the best of the best. You

want to be considered the only ones who do

what you do.”

Jerry Garcia

What Jerry Should Have Said???

“You do not merely want to be the best of the best, you want to be considered in conformance with

requirements.”

Nirvana!

- Nordstrom- Four Seasons

- Adirondack Guide Boat- OXO Good Grips

- Ziplocs- Power Point

Why?

Cool!/Surprising!Reliable!

Friendly!/Comfortable!Aesthetically pleasing!

Consider …

What words and emotions do you use to

describe the things you love?

Context: “No” to “inevitable commoditization”

S1: Lead the Customer!S2: Master E-Commerce!

S3: Women Rule! (and the elderly)

S4: Design Rules! (too)

S5: It’s the Experience!Net: Glorious Age of the BRAND!






Brand Outside

Strategy 1:

Lead the Customer!

“The customer is a rear view mirror, not a guide to the future.”

George Colony, Forrester Research

“If you worship at the throne of the voice of the customer, you’ll get only

incremental advances.”Joseph Morone, President, Bentley College

Early Customer Rejection

Post-Its [12 years!]Chrysler Minivans

VCRsFax machines

FedExCNN

Heart-assist pumpsEtc.

Source: Fortune

Good = Bad/ 1 of 30,000

“We are crazy. We should do something when people say it is

‘crazy.’ If people say something is ‘good’, it

means someone else is already doing it.”

Hajime Mitarai, Canon

“Wealth in this new regime flows directly from innovation, not

optimization. That is, wealth is not gained by perfecting the known,

but by imperfectly seizing the unknown.”

Kevin Kelly, New Rules for the New Economy

“Lead” customers!

K2K redux!

T.T.D.: Do You K2K?

Are you working with [numerous] weird, far out customers? [As

opposed to “biggest” customers?]

Notes Page

• Trust me! You will be as Cool as your Coolest Clients. Cool Clients co-invent the future with us. Soooo … WHAT’S YOUR COOL CLIENT PORTFOLIO LOOK LIKE? [Hint: “Biggest” are rarely “coolest.”]

T.T.D./Sooooo…

Are you pushing your customers? [Internal or

external.] ARE YOU ENGAGING THEM IN A

JOINT VENTURE-JOURNEY INTO TOMORROWLAND?

Notes Page

• No bull: Evaluate EVERY Client Relationship. Is EVERY CP/Client Project a “test”? That is, an effort to explore Uncomfortable-But-Important-Stuff?

Amen!

“The Age of the Never Satisfied

Customer”Regis McKenna


S1: Lead the Customer!

S2: Master E-Commerce!S3: Think Global!




Brand Outside

Strategy 2:

Use E-Commerce

to Re-invent the Business!

2X = 100 days (Internet traffic)

2X = 9 months (network capacity)

Source: Red Herring (1-00)

Web World/05.00

1B pages/7B hotlinks/+1M per day

“For the first time in history, people everywhere have access to the

thoughts, products and writings of a large and growing percentage of

earth’s population.”

The New Yorker/05.29.00

Tomorrow Today: Cisco!

90% of $14.4BSave $500M (service and tech

support)

C.Sat e >> C.Sat HCustomer Engineer Chat Rooms ($1B?)

B2B

1999 – 2004: 50X

2004: $7.4Source: GartnerGroup (per Reuters 1-26-00)

T

GM/Ford/DaimlerChrysler (02-27)

Covisint$240B (+$500B)

I.P.O.

B2B = No.1

CarStation (auto-body shops), ChemConnect (chemicals),

Collabria (commercial printing), DigitalThink (corporate training), E-Steel (steel), Medibuy (medical

supplies), Portera (knowledge workers), Etc., Etc., Etc., Etc.

Goal?

Drive profits to zero!*

*Remember AMR and “dynamic pricing.”

W.W. Grainger*

2X phone/fax

*$220B “MRO” market (per Business 2.0/02-00)

[Pervasive “Risk Markets”

“For a dollar a month, an Ohio insurance company will rent you a GPS receiver to

install in your car. As part of your policy, it signals how often, when, and which highways you drive and into which

neighborhoods you go. The premium you pay reflects your actual driving risk.”

Stan Davis & Christopher Meyer, futureWEALTH]

Welcome to

D.I.Y. Nation!“Changes in business processes will emphasize self service. Your costs as

a business go down and

perceived service goes up because customers are conducting it

themselves.” Ray Lane, Oracle

Shop in your Underwear

Source: SM’d logo for www.ae.comae = American Eagle Outfitters

Psych 101: Strongest Force on Earth?

My need to be in perceived control of

my universe!

Anne Busquet/ American Express

Not: “Age of the Internet”

Is: “Age of Customer Control”

The Supply Side …

The Age of the ChoiceboardThe War of the Choiceboards

Source: Adrian Slywotzky, HBR 1-2/2000 [<1%]

“In the network economy, the Website becomes the company’s primary interface to the customer.

The user interface becomes the marketing materials, store front,

store interior, sales staff and post-sales support all rolled into one.”

Jakob Nielsen, Designing Web Usability

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

fired their entire marketing department and replaced it with

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

Jakob Nielsen, Nielsen Norman Group

Red Herring (01/00)

75% of online shoppers don’t complete their

purchase!

Nielsen/Designing Web Usability

All Web projects are customer-interface projects! Simplicity rules!

Make it easy for customers to perform useful tasks!

Less “cool,” more useful!Speed rules!

“Even if executives of established businesses grasp the impact of new

technologies … they still face a massive competitive disadvantage precisely

because they are incumbents. … They do complex financial calculations and get

bogged down in internal political debates. Insurgents have no such

inhibitions.”

Philip Evans & Thomas Wurster, Blown to Bits

“ … if they set up a completely independent organization and let that organization attack the

parent.”

Clayton Christensen, The Innovator’s Dilemma

“Where does the Internet rank in priority?

It’s No. 1, 2, 3, and 4.” Jack Welch

There are 2 Kinds of …

Defense*

vs.

Offense**

*Fend off upstarts.**Reinvent our marketspace!

“Banking is

necessary. Banks are not.”

Dick Kovacevich, Norwest/ Wells

No Room for “Competent”* Sorts

Beer WholesalersPersonal Trainers [FitLinxx]

Financial PlannersCar Dealers

* LVA, “M”VA … vs. HVA [Web-enhanced]

Web Strategy: GE Power Systems

“Launch and Learn”(4 sites in 30 days)

“It’s better to be first with less than last with more. Success on

the Web isn’t just about time to market, it’s also about

‘time to learning.’ ”

Jeff Levy, eHatchery

Jargon Bath!

Bureaucracy free …Systemically integrated …

Internet intense …Knowledge based …

Time and location free …“Instantly” responsive …

Customer centric …Mass customization enabled.

Translation …

Bureaucracy free = Flat org, no B.S.Systemically integrated = Whole supply chain

tightly wired/ friction freeInternet intense = Do it all via the Web

Knowledge based = Open accessTime and location free = Whenever, wherever

“Instantly” responsive = Speed demonsCustomer centric = Customer calls the shotsMass customization enabled = Every product

and service rapidly tailored to client requirements






Brand Outside

Strategy 3:

Women Rule!

?????????

Home Furnishings … 94%Vacations … 92%

Houses … 91%Bank Account … 89%

Health Care … 75%Etc.

$3.3T + $1.5T = $4.8T*

* Larger than Japan!

Most Under-reported story!

9M*/28M(1 of 4)/$3.6T [> Germany]

* 400K in ’72; 132% since ’92

Sources: NFWBO, Cognetics, Business Wire (030600)

48% working wives > 50%80% checks

61% bills53% stock (mutual fund boom)

43% > $500K95% financial decisions/

29% single handed

Women … 49% of Web users; 6 of 10 new users; 83% of wired women are primary decision makers for family healthcare,

finances, education.

Source: Business Week (11-99)

New golfers … 37%Basketball … 13.5M

1 in 27 (’70) … 1 in 3 (’96)

1874?

1874 … Jock Strap1977 … Jogbra

1977 ... 25K

1996 … 42M

Yeow!

1970 … 1%

2000 … 50%

OPPORTUNITY

NO. 1!*

[* No shit!]

Carol Gilligan/ In a Different Voice

Men: Get away from authority, familyWomen: Connect

Men: Self-orientedWomen: Other-oriented

Men: RightsWomen: Responsibilities

FemaleThink/ Popcorn

“Men and women don’t think the same way, don’t communicate the same

way, don’t buy for the same reasons.

“He simply wants the transaction to take place. She’s interested in creating a relationship. Every place women go,

they make connections.”

Women and Healthcare

Women are … more dissatisfied, frustrated by the way they are treated

and spoken down to by physicians, seek more information, are more pressed for time … and make 75% of health care decisions and control 2/3 of health care $

$$$ [and constitute 2/3 of health care employees].

Source: Patricia Braus, Marketing Healthcare to Women

Women and Financial Advisors

Women want … a plan, to be listened to, to be taken seriously, to read about it, to think about it.

Women do not want … an in-your-face sales pitch

Source: Kathleen Boyle, Wheat Boyle Butcher Singer

E.g.: Quicken.com: gender-neutralTheStreet.com: male-ish (“aggressive,

we-tell-you-what-to-think”)MotleyFool.com: female-ish

(“inquisitive, open, supportive”)WFN and MsMoney.com: female (e.g.:

emphasize parenting and divorce issues)

Source: Red Herring, Kathleen Morris of WFN

How Many Gigs You Got, Man?

“Hard to believe … Different criteria”

“Every research study we’ve done indicates that women really care about the relationship with their

vendor.”

Robin Sternbergh/ IBM

Q: Why do guys like pagers?

A1: Sense of importance [Pager Dude]

A2: Cubicle Slaves’ replacement for “real guys” tool belts

Q: Why do women like pagers?

A: Get the news A.S.A.P. if her child is in the Nurse’s Office

Q:Why do women hate pagers?

A: They find nothing romantic about wearing a Stetson wrench or Stanley hammer attached to their waist! [Note

the pager’s clip-on device … guys ]

[ It’s Simple …

Women are more thoughtful and more deliberate

than men!]

Not!!

“Year of the Woman”

Enterprise Reinvention!

RecruitingHiring/Rewarding/ Promoting

Structure Processes

MeasurementStrategyCulture Vision

Leadership

THE BRAND ITSELF!

“What kind of car does Mommy want?”

“I didn’t know [company] were giving

company cars to secretaries.”

Source: UK financial services CEO, 12/99

27 March 2000: email to TP from Shelley Rae Norbeck

“I make 1/3rd more money than my husband does. I have as much financial

‘pull’ in the relationship as he does. I’d say this is also true of most of my women

friends. Someone should wake up, smell the coffee and kiss our asses long enough

to sell us something! We have money to

spend and nobody wants it!”

Not a Morality Play!

“It is critical that we all understand that IBM is not marketing to women

entrepreneurs because it is the thing to do, or even the right thing to do.

We are marketing to women entrepreneurs because it is a huge

opportunity.”

Cherie Piebes

Wanna see my “porn”

collection?

THIS JUST MIGHT BE THE BIGGEST “THING” IN THIS

SEMINAR. PLEASE: THINK ABOUT IT!

“If we are single, they say we couldn’t catch a man. If we are

married, they say we are neglecting him. If we are divorced,

they say we couldn’t keep him. If we are widowed, they say we

killed him.”

Kathleen Brown, on the joys of female political candidacy

Speaking of Enormous

[Missed] [Huge] Opportunities ...

74/55

“At each stage of their lives, the needs and desires of the baby

boomers have become the dominant concerns of American business and popular culture. If you can anticipate

the movement of the baby-boom generation’s life-span migration, you

can see the future.”Ken Dychtwald, Age Wave

Aging/“Elderly”

2X growth rate$$$$$$$$$$$$

“I’m in charge!”

Good source: Ken Dychtwald, Age Wave

Priorities: Aging/“Elderly”

Experiences … Convenience … Comfort

… Access … Respect!






Brand Outside

Strategy 4:

Design Rules!

And Tomorrow …

“Fifteen years ago companies competed on price. Now It’s

quality. Tomorrow it’s design.”Robert Hayes

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 (10/98)

Drop-dead Charm!

“The new Beetle fails at most categories. The only

thing it doesn’t fail in is drop-dead charm.”

Jerry Hirshberg, Nissan Design International

Object of Desire!

“Every now and then, a design comes along that radically changes the way we think about a particular object. Case in

point: the iMac. Suddenly, a computer is no longer an anonymous box. It is a

sculpture, an object of desire, something that you look at.”

Katherine McCoy, Michael McCoy, Illinois Institute of Technology

Design as Soul

“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

Check Out the Language:

“Tomorrow it’s design …”“Design is the only thing …”

“Design is … religion ...”“Drop-dead charm …”“Object of desire …”

“Fundamental soul …”

Think Back …

New Beetle, iMac = Radical, “Bet the

Company”

Right?

The I.D. [International Design] Forty*

Airstream … Alfred A. Knopf … Apple Computer … Amazon.com …

Bloomberg … Caterpillar … CNN … Disney … FedEx … Gillette … IBM … Martha Stewart … New Balance …

Nickelodeon … Patagonia … The New York Yankees … 3M … Etc.

* List No. 1, 1999

Unconventional [Design] Messages

Not about ... “Lumpy Objects”!

Not about ... $79,000 objects

“Car designers need to create a story. Every car provides an

opportunity to create an adventure. …“The Prowler makes you smile. Why? Because it’s focused. It has a plot, a

reason for being, a passion.”

Freeman Thomas, co-designer VW Beetle; designer Audi TT

Hmmmm(?): “Only” Words …

StoryAdventure

Smile FocusPlot

Passion

T.T.D./Message:Services are Not Intangible!

You “give off” hundreds of design cues … daily!

YOU ARE A DESIGNER!

Notes Page

• List 100 [!] “design cues” that you give off! [Okay, start with 25.]

Graceful language!

T.T.D./“Beauty Contest!”

1. Pick one form/ document: invoice, airbill, sick leave policy, returns claim

form.2. Rate it on a 1 to 10 scale

(1 = Awful; 10 = Scintillating) on three dimensions: Beauty, Grace, Clarity.

3. Repeat … every 15 days.

Notes Page

• DO THIS! USE MY TERMS! [Beauty … Grace … Clarity.] Be quantitative. [PLEASE.]

Design =

SIMPLICITY … HONESTY … ACCESSIBILITY …

ENJOYMENTJonathan Ive (iMac)

Design =

“There are three basic principles behind any well-

designed product: truth, humanity, and

simplicity.”Sohrab Vossoughi,

Ziba Design

Words (Again!)

Drop-dead Charm … Object of Desire … Truth … Humanity … Simplicity … Focus … Honesty … Accessibility … Enjoyment

… Story … Adventure … Plot … Passion

“My favorite word is grace – whether it’s amazing grace,

saving grace, grace under fire, Grace Kelly. How we live

contributes to beauty – whether it’s how we treat other people or

the environment.”

Celeste Cooper, designer

Grace.

T.T.D./Design “Awareness”!

STEP No. 1: NOTEBOOK![Start recording the awesome

and the awful.]

Notes Page

• THIS IS MY “SECRET.” I am not “artistic.” But … I did teach myself to be … CONSTANTLY AWARE. The Key: My [simple] notebook! [I’VE NOW BEEN “RECORDING” FOR ALMOST TEN YEARS!]






Brand Outside

Strategy 5:

It’s the Experience!

“Experiences are as distinct from services as services are from

goods.”Joseph Pine & James Gilmore, The

Experience Economy: Work Is Theater & Every Business a Stage

“The [Starbucks] Fix” Is on …

“We have identified a ‘third place.’ And I really believe that sets us apart. The third place is

that place that’s not work or home. It’s the place our

customers come for refuge.”Nancy Orsolini, District Manager

Experience: “Rebel Lifestyle!”

“What we sell is the ability for a 43-year-old accountant to dress in black leather, ride through small towns and have people be afraid

of him.”

Harley exec, quoted in Results-based Leadership

Mantra: “Any good can be ing-ed”

the driving experiencethe pumping experience

the sitting experiencethe reading experiencethe washing experiencethe cooking experience

Joseph Pine & James Gilmore, The Experience Economy: Work Is Theater & Every Business a Stage

[NAPM: Think …

Supply Chain-ingB2B-ing]

“This is the end of the pure product era. For instance, car

makers are beginning to understand that the car is a

platform for delivering services that drive the customer

experience.”Carly Fiorina, HP @ Comdex ’99

And Now For A Nod To 1/7th of Our Economy!

“Medicine looks likely to change more in the next 20 years than it has in

the last 200.”

British Medical Journal (11-11-99)

Health Care Tsunami

Prevention/Wellness/FitnessProactive Engineering/Gene

“stuff”[Blockbuster-Bazooka to Specific-Sniper’s Rifle]

Holistic/Homeopathic/Non-traditionalPatient-centric/Web-led

No waste [Healtheon/WebMD et al.]Etc.

TP 03.26.00: AMA Riff

Are You Fighting Yesterday’s War?Docs don’t know it all.

There are a lotta bad docs. There are a lotta bad medical decisions.

“Hospitals” kill far too many people. (Bad decisions, bad execution.)

Systemic waste is stratospheric. (Still.)

Patients are getting (much) smarter.Patients have had it with HMOs. (And Docs with the

“white-coat syndrome.”) You are not smarter than I am. (I am your partner.)

You are not busier than I am. (!!!!!)Patients want more data. (And can readily get it.)

Boomers will control their lives. Period. Medicine is about to be overwhelmed with a tsunami!

Confusing Message*

Traditional indemnity: 37% to 11% [’94-’99; 77% in ’88]

HMO: 23% to 30%

PPO: 25% to 43%

*Cut the waste & provide choice

Alternative Medicine

More visits than to physicians

Same $$$ expenditure [approx $27B]

Stanford study: 2/3 use alt therapies

“This is the first time in Western medical history that we have had a movement that is consumer

driven.”/Dr. Woody Merrell, Center for Health and Healing, Beth Israel Hospital, Manhattan.

[Merrell: Process = Partnership.]

Source: Barron’s/05.15

SoftWatch (MS)“Manage relationships across the

healthcare continuum”/ Amir Kishon

Establish e-relationships with customers/retain customers/collect data

Patients record info + receive feedback/ Online access to nurses

Community with others with MS

Etc.Source: Start-Up

1965: “ ‘Doctor’ will see you now. ‘Doctor’ will take care of you.”

YES, NURSE. ME GOOD PUPPY DOG.

1995: “HMO will take care of you.”

BULLSHIT.

2005: “I will take care of me. I’d like your expert help.”* [*P.S.: THE VIAGRA, ETC.] I

ORDERED ON LINE IS GREAT.]

Patient-centric* Health Care

Wellness (Fix to prevent.)

Partnership (“Tour guide” model.)

RESPECT! (Mutual.)

WOMEN RULE!

*Not: HMO-centric, Employer-centric, Insurer-centric, Doc-centric

AMA: Push “Patient

Partnership” Model????


S1: Lead the Customer!S2: Master e-commerce!




Brand Outside

BRAND POWER!

Brand It! Now, More Than Ever!

“The increasing difficulty in differentiating between products and

the speed with which competitors take

up innovations will assist in the rise and rise of the brand.”

Gillian Law and Nick Grant, Management [New Zealand]

No Room for Brands?

NikeSaturnCNN

America OnlineCharles Schwab

StarbucksThe Gap

IntelEtc.

Brand = Trust!

“Most buyers do not have a clue whether anybody else makes a better microprocessor, but ‘Intel Inside’ has become a ‘trust mark’ - a trademark that consumers put their faith in.”

The Economist

What Can [Can’t] Be Branded?“Branding is not a problem if you have the right mentality. You go to your team and

you pin up a $200 Swiss Army Watch. Competing in the ridiculously crowded

sub-$200 watch market, they made it into a brand name, named after the most

irrelevant and useless thing in history [the Swiss Army]. And you say, ‘Gang, if they

can do it, we can do it.’ ”

Barry Gibbons

“Salt is salt is salt. Right? Not when it

comes in a blue box with a picture of a little girl carrying an umbrella. Morton International continues to dominate the U.S. salt market even though it charges more for a product that is demonstrably

the same as many other products on the shelf.”

Tom Asaker, Humanfactor Marketing

“Consumers don’t simply buy products, they buy attitudes as well. When confronted with proliferation and

diversity, choices become increasingly informed by belief. [Consumers] want to

know who is behind the products that they buy. They want to know the

company. They want to know what you think.”

Jesper Kunde, Corporate Religion

T.T.D./Calling the Corporate Shrink!

“Organizational Psychotherapy”/

WHO WE ARE!

Notes Page

• This is The Big Enchilada:

SPEND – lotsa – TIME ON IT!

Brand = You Must Care!

“Success means never letting the competition define you. Instead you have to define

yourself based on a point of view you care deeply about.”

Tom Chappell, Tom’s of Maine

“We are in the twilight of a society based on data. As information and intelligence become the domain of computers, society will place more value on the one human ability that cannot be automated: emotion.

Imagination, myth, ritual - the language of emotion - will affect everything from our purchasing decisions

to how we work with others. Companies will thrive on the basis of their stories and

myths. Companies will need to understand that their products are less important than their stories.”

Rolf Jensen, Copenhagen Institute for Future Studies

“In the funky village, real competition no longer revolves

around marketshare. We are competing for attention –

mindshare and heartshare.”Kjell Nordstrom and Jonas Ridderstrale,

Funky Business

T.T.D./Assignment Y2K

Write an essay on “Who we are.”*

* Jesper Kunde, Corporate Religion

Notes Page

•DO IT! 500 words.

•[And then: 10 words.]






Brand Outside

Reprise

[“Incrementalism is innovation’s worst enemy.”

Nicholas Negroponte]

Lead the Customer: Why Tough

Guts!Failures!

Re-invention via ecommerce: Why Tough

Total commitment to total enterprise [and supply

chain] reinvention!

Yo, C.D.O.!!!!!!!!

Women’s Market: Why Tough

EncompassingAttitude

CULTURAL!

Design: Why Tough

True-believer-dom-shipEncompassing/Cultural

Ing-ing/Experience: Why Tough

Total Reorientation

Brand Power: Why Tough

Way of LifeForever!

Passion Rules!Touches Everything!It Am Me [Personal!]

Message :

Not for the Faint of Heart!*

*Weenies need not apply

Brand Leadership

Passion Rules!

Brand Leadership!

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

communication of a story.”

Howard Gardner Leading Minds: An Anatomy of Leadership

“The challenge for IBM, AT&T and other mainstream companies is to re-instill a sense of adventure in

recruits.”

Burke Stinson, AT&T

“Create a Cause, not a ‘business.’”

Gary Hamel, Fortune (06.00), on re-inventing a company (Exemplar #1:

Charles Schwab)

“Leadership is a performance. You have to be

conscious of your behavior, because everybody else is.”

Carly Fiorina

Brand Leadership:ENTHUSIASM RULES!

“I am a dispenser of enthusiasm.”/ Ben

Zander

Talent “War,” Marketplace “War”

“The successful company has to create an environment that imbues

its employees with a sense of passion.”

Joe Nocera, eCompany, on David Pottruck

Ann Richards’ Dogma

Show up!

Know your message!

PUT YOURSELF AT RISK EVERY DAY!

Documents

Distinct or … Extinct: Tom Peters Seminar2000 Cincinnati 05 June 2000