Part seven Extended Talent & Leadership 0618.07

NOTENOTE:: To appreciateTo appreciate this presentation this presentation [and [and

insure that it is not a insure that it is not a messmess],], you need Microsoft you need Microsoft

fonts:fonts: “Showcard Gothic,”“Showcard Gothic,” “Ravie,”“Ravie,” “Chiller”“Chiller”

andand “Verdana”“Verdana”

NOTE: NOTE: To appreciate this To appreciate this presentation, you need Microsoft presentation, you need Microsoft

fonts:fonts: “Showcard Gothic,”“Showcard Gothic,” “Ravie,”“Ravie,” “Chiller”“Chiller” and and “Verdana”“Verdana”

Master*Master*ExcellenceExcellence

part part twotwo (of 7) (of 7)innovate.innovate.

Or.Or.Die.Die.

18 june 200718 june 2007



MasterMasterExcellence. Always.Excellence. Always.

part part oneone (of 7) (of 7)“all you need to know”“all you need to know”

(dwelling on the obvious)(dwelling on the obvious)

not your father’s worldnot your father’s worldintroduction to excellence.introduction to excellence.

18 june 200718 june 2007



Master/Master/Excellence. Always./Excellence. Always./

part part THREETHREE (of 7) (of 7)

upup,, up, up, up,up, upup … …the value added ladderthe value added ladder (solutions-experiences-dreams-lovemarks)(solutions-experiences-dreams-lovemarks)

18 June 200718 June 2007



Master/Master/Excellence. Always./Excellence. Always./

part part FOURFOUR (of 7) (of 7)

“new” Markets“new” Markets(Stupendous Opportunity)(Stupendous Opportunity)

18 June 200718 June 2007



MasterMasterExcellence. Always.Excellence. Always.

part part FIVEFIVE (of 7) (of 7)

people!people!(Brand you. Talent. Health. (Brand you. Talent. Health.

Education. Leadership.)Education. Leadership.)18 june 200718 june 2007



Master*Master*ExcellenceExcellence

part part SIXSIX (of 7) (of 7)excellence.excellence.summaries.summaries.

Lists.Lists.18 june 200718 june 2007

Part Part sevensevenExtended Extended Talent & Talent &

LeadershipLeadership0618.070618.07

part part twotwo

Slides at …

tompeters.comtompeters.com

NOTE: NOTE: amidst today’s amidst today’s unprecedented market turmoil, unprecedented market turmoil,

innovation is arguably and without innovation is arguably and without exaggeration “everything”—for exaggeration “everything”—for

the small, medium and large the small, medium and large enterprise. And public and non-enterprise. And public and non-

profit entities as much as for-profit profit entities as much as for-profit enterprises. Moreover, enterprises. Moreover,

transformative innovation appears transformative innovation appears nigh on impossible for giant nigh on impossible for giant

entities—which makes one wonder entities—which makes one wonder why so many “bulk up” in an effort why so many “bulk up” in an effort

to cope. (In a word … stupidity.)to cope. (In a word … stupidity.)

Tom Peters’ X25*Tom Peters’ X25*

EXCELLENCEXCELLENCE. ALWAYS.E. ALWAYS.

MASTER/0618.2007/Part TWOMASTER/0618.2007/Part TWO**In Search of ExcellenceIn Search of Excellence 1982-2007 1982-2007

EXCELLENCE. EXCELLENCE.

INNOVATE. INNOVATE. OR. OR. DIE.DIE.


INNOVATE. INNOVATE. AXIOMATICAXIOMATIC..

“To grow, companies need to break out of a

vicious cycle of competitive

benchmarking and imitation.” —W. Chan Kim & Renée

Mauborgne, “Think for Yourself —Stop Copying a Rival,” Financial Times

Characteristics of the “Also rans”*Characteristics of the “Also rans”*

“Minimize risk”“Respect the chain of

command”“Support the boss”

“Make budget”**FortuneFortune, article on “Most Admired Global Corporations”, article on “Most Admired Global Corporations”

EXCELLENCE. EXCELLENCE. INNOVATION.INNOVATION.

THE THE REALREAL STORY.STORY.

Tom Peters/03.29.2007Tom Peters/03.29.2007

The Perils of Conservatism/The Perils of Conservatism/IndustrIndustryy Leadershi Leadershipp

“ ‘“ ‘GoodGood management’ was management’ was the most powerful reason the most powerful reason

[leading firms] failed to stay [leading firms] failed to stay atop their industries.atop their industries. Precisely Precisely

because these firms listened to their because these firms listened to their customers, invested aggressively in customers, invested aggressively in

technologies that would provide their technologies that would provide their customers more and better products of the customers more and better products of the

sort they wanted, and because they sort they wanted, and because they carefully studied market trends and carefully studied market trends and

systematically allocated investment capital systematically allocated investment capital to innovations that promised the best to innovations that promised the best

returns, they lost their positions of returns, they lost their positions of leadership.”leadership.”

—Clayton Christensen, The Innovator’s Dilemma

EVERYTHING YOU EVERYTHING YOU THOUGHT YOU KNEW THOUGHT YOU KNEW ABOUT INNOVATIONABOUT INNOVATION

IS WRONG IS WRONG

What “We” Know “For Sure” About InnovationBig mergers Big mergers [by & large][by & large] don’t work don’t work

Scale is over-ratedScale is over-ratedStrategic planning is the last refuge of scoundrelsStrategic planning is the last refuge of scoundrels

Focus groups are counter-productiveFocus groups are counter-productive“Built to last” is a chimera (stupid)“Built to last” is a chimera (stupid)

Success killsSuccess kills“Forgetting” is impossible“Forgetting” is impossible

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

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

“Facts” aren’t“Facts” aren’tAll information making it to the top is filteredAll information making it to the top is filtered

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

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

… and amusing … and amusing“Top teams” are “Dittoheads”“Top teams” are “Dittoheads”

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

TheThe Mess Mess IsIs TheThe

Message! Message! Period!Period!

What makes What makes God laugh?God laugh?

PeoplePeople makingmaking plans!plans!

What makes What makes tomtom laugh? laugh?

““Gurus” Gurus” (and once-famous (and once-famous

CEOs)CEOs) giving giving LLLsLLLs (logical (logical

linear lectures)linear lectures) on on “systems”*“systems”* of of

innovationinnovation!!**especially with lots of charts and graphs and Greekespecially with lots of charts and graphs and Greek

mathematical symbols and little tiny numbers mathematical symbols and little tiny numbers



Per-Per-ii--od!od!

NOTE: NOTE: few ideas are more importantfew ideas are more important—and more honored in the breach. —and more honored in the breach.

Innovation is Innovation is MMEESSSSYY to to the extreme. Such an assertion the extreme. Such an assertion

(reality!) determines the success of (reality!) determines the success of innovation “strategies,” perhaps innovation “strategies,” perhaps the wrong word. This unfolding the wrong word. This unfolding

“story” is one of the most “story” is one of the most important in my efforts to alter important in my efforts to alter

enterprise thinking.enterprise thinking.

try it. Try it. Try it. try it. Try it. Try it. Try it. Try it. Try it.Try it. Try it. Try it.

Try it. Try it. Try it. Try it. Screw it Screw it up.up. Try it. Try it. Try Try it. Try it. Try

it. Try it. Try it. Try it. it. Try it. Try it. Try it. Try it. Try it. Screw it up.Screw it up. it. it.

Try it. Try it. try it. Try it. Try it. try it. Try it.Try it. Screw it up.Screw it up. Try it. Try it. Try it. Try it. Try it. Try it.

Get Get madmad. . Do Do somethingsomething about it. about it.

NowNow..

The “5Ps” of Innovation Success:The “5Ps” of Innovation Success:

Pissed-off-ed-nessPissed-off-ed-nessPassionPassion

palspalsPolitics Politics [Political skill][Political skill]

PersistencePersistence

““Recently I asked three corporate Recently I asked three corporate executives what decisions they had made executives what decisions they had made in the last year that would not have been in the last year that would not have been

made were it not for their corporate made were it not for their corporate plans. All had difficulty identifying one plans. All had difficulty identifying one such decision. Since all of the plans are such decision. Since all of the plans are

marked ‘secret’ or ‘confidential,’marked ‘secret’ or ‘confidential,’ I asked I asked them how their comthem how their comppetitors mietitors migght ht benefit frombenefit from p possession of their ossession of their

pplans. Each answered with lans. Each answered with embarrassment that their embarrassment that their

comcomppetitors would not benefitetitors would not benefit.”.” —Russell Ackoff (from Henry Mintzberg,

The Rise and Fall of Strategic Planning)

21C = -21C = -1c1c

Trip #1:Trip #1: The Rise The Rise and Fall of and Fall of Strategic Strategic PlanningPlanning

““Recently I asked several corporate executives Recently I asked several corporate executives what decisions they had made in the last year that what decisions they had made in the last year that

would not have been made were it not for their would not have been made were it not for their

corporate plans. corporate plans. All had difficulty All had difficulty identifying one such identifying one such

decision.decision. Since all of the plans are marked Since all of the plans are marked ‘secret’ or ‘confidential,’ I asked them how their ‘secret’ or ‘confidential,’ I asked them how their

competitors might benefit from possession of their competitors might benefit from possession of their

plans. plans. Each answered with Each answered with embarrassment that their embarrassment that their

competitors would not competitors would not benefit.”benefit.” —Russell Ackoff (from Henry

Mintzberg, The Rise and Fall of Strategic Planning)

An Economic Interpretation of the ConstitutionAn Economic Interpretation of the Constitution of the United States of the United States —Charles Beard (1913)

The Box: How the The Box: How the Shipping Container Made Shipping Container Made

the World Smaller and the World Smaller and the World Economy the World Economy

BiggerBigger —Marc LevinsonTube: The Invention of TelevisionTube: The Invention of Television

—David & Marshall Fisher

Empires of Light: Edison, Tesla,Empires of Light: Edison, Tesla, Westinghouse, and the Race to Electrify Westinghouse, and the Race to Electrify

the World the World —Jill Jonnes

The Soul of a New MachineThe Soul of a New Machine —Tracy Kidder

Rosalind Franklin: The Dark Lady of DNARosalind Franklin: The Dark Lady of DNA —Brenda Maddox

The Blitzkrieg MythThe Blitzkrieg Myth —John Mosier

““Containerization is a remarkable achievement. Containerization is a remarkable achievement. No one foresaw how the box would transform No one foresaw how the box would transform

everything it touched—from ships and ports to everything it touched—from ships and ports to patterns of global trade. Containerization is a patterns of global trade. Containerization is a

monument to the most powerful law in monument to the most powerful law in economics, that of unanticipated economics, that of unanticipated

consequences. … consequences. … This historThis historyy ou ougght to be ht to be humblinhumblingg to fans of modern to fans of modern

manamanaggement methods. Careful ement methods. Careful pplanninlanningg and thorough analand thorough analyysis, those business sis, those business

school basics, maschool basics, mayy have their have their pplace, but lace, but thetheyy provide little provide little gguidance in the face uidance in the face

of disruof disrupptive chantive changges that alter an es that alter an industrindustryy’s ver’s veryy fundamentals fundamentals.”.” —Marc Levinson,

FT, 0425.06 (author of The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger)







LessonsNeed-drivenNeed-driven

A thousand “parents”A thousand “parents”MessyMessy

EvolutionaryEvolutionary“Trivial”“Trivial”

RelentlessRelentless Experimentation ExperimentationTrial Trial & & many, many eRRORsmany, many eRRORs

“Real heroes” seldom around when the battle is won“Real heroes” seldom around when the battle is wonLoooong time for systemic adaptation/sLoooong time for systemic adaptation/s

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

Not …“Plan-driven”“Plan-driven”

The product of “Strategic Thinking/Planning”The product of “Strategic Thinking/Planning”The product of “focus groups”The product of “focus groups”

Discover, by accident, Discover, by accident, “blue ocean” “blue ocean” [women’s financial [women’s financial

needs]needs]!!Ignore your Ignore your [Dean Witter][Dean Witter] boss! boss!

Sell 750,000 copies of Sell 750,000 copies of your latest book to Wells your latest book to Wells Fargo Home Mortgage!Fargo Home Mortgage!

Source: the David Bach story, includingSource: the David Bach story, including Smart Women Finish RichSmart Women Finish Rich, per , per IBDIBD (01.08.07) (01.08.07)












““We are in a We are in a brawl with no brawl with no

rules.”rules.” —Paul Allaire

S.A.VS.A.V..

Paul Allaire: Paul Allaire: “We are in a “We are in a brawl with no rules.”brawl with no rules.”TP: TP: “There’s only one “There’s only one possible answer—S.A.V.”possible answer—S.A.V.”**

**Screw Around VigorouslyScrew Around Vigorously

Axiom: “We are in a brawl “We are in a brawl with no rules.”with no rules.” (PA)

Implication: “The world will “The world will not be kind to those who not be kind to those who ‘play by the rules’.”‘play by the rules’.”** (TP)

Strategy: S.A.V./R.F.A.S.A.V./R.F.A. (RP/TP+)

*Axiom: The microprocessor plays by the rules.

First-level First-level Scientific Scientific Success:Success:

BeBeyyond Brainsond Brains

First-level Scientific Success

The smartest guy in the room wins”

Or …Or …

First-level Scientific Success

FanaticismFanaticismPersistence-Dogged Tenacity

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

PassionPassionEnergyEnergy

Relentlessness (Grant-ian)

EnthusiasmEnthusiasmDriven (nuts!)

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

Scrounge (“gets” the logistics-infrastructure bit)Master of Politics (internal-external)

Tactical GeniusPursuit of (Oceanic) Excellence!

High EQ/Skillful in Attracting + Keeping Talent/MagneticProlific (“ground up more pig brains”)

Egocentric

Sense of History-DestinySense of History-DestinyFuturistic-In the Moment

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

Exceptionally IntelligentExceptionally IntelligentExceptionally Clever (methodological shortcuts/methodological genius)

LuckLuck

Blitzkrieg?Blitzkrieg?

Case: RealityGermans 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.Do something.Get lucky. Get lucky.

Attribute luck to superior Attribute luck to superior planning.planning.

Get medals.Get medals.

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

surprised the Germans as much as the surprised the Germans as much as the French. Why otherwise did the High French. Why otherwise did the High Command try on several occasions, Command try on several occasions, with Hitler’s backing, to slow the with Hitler’s backing, to slow the

panzers down. … The victory in France panzers down. … The victory in France partly came about because the partly came about because the

German High Command temporarily German High Command temporarily lost control of the battle.”lost control of the battle.” —Julian Jackson,

The Fall of France: The Nazi Invasion of 1940

Utterback+Utterback+

““A pattern emphasized in the case A pattern emphasized in the case studies in this book is the degree to studies in this book is the degree to

which powerful competitors which powerful competitors not onlnot onlyy resist innovative threats, but resist innovative threats, but actuallactuallyy resist all efforts to resist all efforts to

understand themunderstand them, preferring to , preferring to further their positions in older further their positions in older

products.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

“Apparently our society, not unlike the Greeks with their Delphic oracles, takes great comfort in believing

that very talent ‘seers’ removed from the hurly-burly world of reality can

tell foretell coming events.” —Len Sayles/Columbia

The Perils of Conservatism/The Perils of Conservatism/IndustrIndustryy Leadershi Leadershipp

“ ‘“ ‘GoodGood management’ was management’ was the most powerful reason the most powerful reason

[leading firms] failed to stay [leading firms] failed to stay atop their industries.atop their industries. Precisely Precisely

because these firms listened to their because these firms listened to their customers, invested aggressively in customers, invested aggressively in

technologies that would provide their technologies that would provide their customers more and better products of the customers more and better products of the

sort they wanted, and because they sort they wanted, and because they carefully studied market trends and carefully studied market trends and

systematically allocated investment capital systematically allocated investment capital to innovations that promised the best to innovations that promised the best

returns, they lost their positions of returns, they lost their positions of leadership.”leadership.”

—Clayton Christensen, The Innovator’s Dilemma

““The most thoughtful and articulate The most thoughtful and articulate strategies tend to come from big banks. strategies tend to come from big banks.

But their actual results seldom bearBut their actual results seldom bear that out. that out. When you walk the streets and When you walk the streets and

look at what’s happening, the gap look at what’s happening, the gap between strategy and execution between strategy and execution

becomes obvious. We have to see with becomes obvious. We have to see with our own eyes what customers are our own eyes what customers are

experiencing.”experiencing.” —Thomas Brown, CEO, Second Curve Capital [hedge fund] , on their annual “branch hunt”

“Mr Brown’s favorite experience came at a Chase branch where he opened a checking account. When a Chase employee asked where he

currently did business, he said he was a Citibank customer. ‘I’m surprised you want to switch,’ she replied matter of factly, ‘I have my

account at Citibank.” —Bill Taylor, “Get Out of That Rut and Into the Shower,” NYT, 0813.06

““Hard” Stuff/Hard” Stuff/Science: Science: 2020%%“Soft” Stuff/“Soft” Stuff/Politics: Politics: 8080%%

““Hard” Hard” Stuff/Analysis & Stuff/Analysis & planning: planning: 2525%%

“Soft” Stuff/people &“Soft” Stuff/people &Politics & PassionPolitics & Passion & execution: & execution: 7575%%

““Peters is the Michel Peters is the Michel Foucault of the Foucault of the

management world: a management world: a scourge of the rationalist scourge of the rationalist

tradition and a celebrant of tradition and a celebrant of the creative necessity of the creative necessity of chaos and craziness.”chaos and craziness.” ——Financial TimesFinancial Times, 09.23.2003, review of , 09.23.2003, review of Re-Re-

imagine!imagine! (“You Should Be Bonkers in a Bonkers’ (“You Should Be Bonkers in a Bonkers’ Time”)Time”)

““Most of our predictions are Most of our predictions are based on very linear based on very linear

thinking. That’s why they thinking. That’s why they will most likely be wrong.”will most likely be wrong.”

Vinod Khosla, in “GIGATRENDS,” Vinod Khosla, in “GIGATRENDS,” WiredWired 04.01 04.01

Tom’Tom’ss source code: source code: The eight iconic The eight iconic

books which are the books which are the Wellsprings Wellsprings

of my operating of my operating values and core values and core

assumptionsassumptions05.22.0705.22.07

Fooled by Randomness: The Hidden Role of Chance in Fooled by Randomness: The Hidden Role of Chance in Life and the Markets,Life and the Markets, Nassim Nicholas TalebNassim Nicholas Taleb

The Black Swan: The Impact of the Highly ImprobableThe Black Swan: The Impact of the Highly Improbable,, Nassim Nicholas TalebNassim Nicholas Taleb Expert Political Judgment: How Good Is It? How Can We Expert Political Judgment: How Good Is It? How Can We knowknow?? Philip Tetlock Philip Tetlock

The Difference: How the Power of Diversity Creates The Difference: How the Power of Diversity Creates Better Groups, Firms, Schools, and SocietiesBetter Groups, Firms, Schools, and Societies,, Scott PageScott Page

The Wisdom of CrowdsThe Wisdom of Crowds,, James Surowiecki. James Surowiecki.

Full House: The Spread of Excellence from Plato to Full House: The Spread of Excellence from Plato to DarwinDarwin,, Stephen Jay GouldStephen Jay Gould Judgment under Uncertainty: Heuristics and BiasesJudgment under Uncertainty: Heuristics and Biases,, Daniel Kahneman, Paul Slovic and Amos Tversky. Daniel Kahneman, Paul Slovic and Amos Tversky.

A Mind of Its Own: How Your Brain Distorts and A Mind of Its Own: How Your Brain Distorts and DeceivesDeceives,, Cordelia FineCordelia Fine

Fooled by Randomness: The Hidden Role of Chance in Life and the Markets,Fooled by Randomness: The Hidden Role of Chance in Life and the Markets, Nassim Nicholas Taleb Nassim Nicholas Taleb “This “This book is about luck disguised and perceived as non-luck (that is, skills) and more book is about luck disguised and perceived as non-luck (that is, skills) and more generally randomness disguised and perceived as non-randomness. It manifests generally randomness disguised and perceived as non-randomness. It manifests itself in the shape of the lucky fool, defined as a person who benefited from a itself in the shape of the lucky fool, defined as a person who benefited from a disproportionate share of luck but attributed his success to some other, disproportionate share of luck but attributed his success to some other, generally precise reason.” generally precise reason.” The Black Swan: The Impact of the Highly ImprobableThe Black Swan: The Impact of the Highly Improbable,, Nassim Nicholas TalebNassim Nicholas Taleb

Expert Political Judgment: How Good Is It? How Can We knowExpert Political Judgment: How Good Is It? How Can We know?? Philip Tetlock Philip Tetlock “A fox, the thinker who “A fox, the thinker who knows many little things, draws from an eclectic array of disciplines, and is better knows many little things, draws from an eclectic array of disciplines, and is better able to improvise in response to changing events, is more successful in able to improvise in response to changing events, is more successful in predicting the future than the hedgehog, who knows one big thing, toils devotedly predicting the future than the hedgehog, who knows one big thing, toils devotedly within one tradition, and imposes formulaic solutions on ill defined problems.” within one tradition, and imposes formulaic solutions on ill defined problems.” The Difference: How the Power of Diversity Creates Better Groups, Firms, Schools, and SocietiesThe Difference: How the Power of Diversity Creates Better Groups, Firms, Schools, and Societies,, Scott Page Scott Page .. “Diverse groups of problem solvers—groups of people with diverse tools—“Diverse groups of problem solvers—groups of people with diverse tools—consistently outperformed groups of the best and the brightest. If I formedconsistently outperformed groups of the best and the brightest. If I formed two groups, one random (and therefore diverse) and one consisting of the best two groups, one random (and therefore diverse) and one consisting of the best individual performers, the first group almost always did better. … Diversityindividual performers, the first group almost always did better. … Diversitytrumped ability.”trumped ability.” The Wisdom of CrowdsThe Wisdom of Crowds,, James Surowiecki. James Surowiecki.

Full House: The Spread of Excellence from Plato to DarwinFull House: The Spread of Excellence from Plato to Darwin, , Stephen Jay GouldStephen Jay Gould

Judgment Under Uncertainty: Heuristics and BiasesJudgment Under Uncertainty: Heuristics and Biases, , Daniel Kahneman, Paul Slovic and Amos Tversky. Daniel Kahneman, Paul Slovic and Amos Tversky.

A Mind of Its Own: How Your Brain Distorts and DeceivesA Mind of Its Own: How Your Brain Distorts and Deceives, , Cordelia Fine Cordelia Fine “Your brain has some shifty “Your brain has some shifty habits that leave the truth distorted and disguised. Your brain is vainglorious. It’s habits that leave the truth distorted and disguised. Your brain is vainglorious. It’s emotional and immoral. It deludes you. It is pigheaded, secretive and weak willed. emotional and immoral. It deludes you. It is pigheaded, secretive and weak willed. Oh, and its also a bigot.” Oh, and its also a bigot.”

The (Strange) Case of Peter Drucker & Michael Porter vs. The “Non-linearists”

HERBERT SIMON. HERBERT SIMON. (Administrative Behavior.) (Administrative Behavior.) JAMES MARCH. KARL WEICK. JAMES MARCH. KARL WEICK. (The (The

Social Psychology of Organizing.) Social Psychology of Organizing.) EUGENE WEBB. EUGENE WEBB. Henry MINTZBERG. Henry MINTZBERG. (The Rise and Fall of (The Rise and Fall of

Strategic Planning.)Strategic Planning.) JAMES UTTERBACK. JAMES UTTERBACK. THOMAS KUHN. THOMAS KUHN. (The Structure of Scientific (The Structure of Scientific

Revolutions.)Revolutions.) CHARLES LINDBLOM. CHARLES LINDBLOM. Daniel goleman. INNOVATION Daniel goleman. INNOVATION BIOGRAPHERS.*BIOGRAPHERS.* (*Transcontinental Railroad,

Electrification, Radio, Television, Containerization, DNA,

Computers, Military History, Etc.) MOST MOST POLITICAL SCIENTISTS. SILICON POLITICAL SCIENTISTS. SILICON

VALLEY. Etc.VALLEY. Etc.

An Economic Interpretation of the ConstitutionAn Economic Interpretation of the Constitution of the United States of the United States —Charles Beard (1913)

The Box: How the Shipping The Box: How the Shipping Container Made the World Smaller Container Made the World Smaller

and the World Economy Biggerand the World Economy Bigger —Marc Levinson

Tube: The Invention of TelevisionTube: The Invention of Television —David & Marshall Fisher

Empires of Light: Edison, Tesla,Empires of Light: Edison, Tesla, Westinghouse, and the Race to Electrify Westinghouse, and the Race to Electrify

the World the World —Jill Jonnes

The Soul of a New MachineThe Soul of a New Machine —Tracy Kidder

Rosalind Franklin: The Dark Lady of DNARosalind Franklin: The Dark Lady of DNA —Brenda Maddox

The Blitzkrieg MythThe Blitzkrieg Myth —John Mosier

NOTE: NOTE: Containerization was 50 Containerization was 50 last year. The story of its last year. The story of its

development is a “thriller” development is a “thriller” by any standard—and a by any standard—and a brilliant exemplar of the brilliant exemplar of the

tortuous path from inkling tortuous path from inkling to reality.to reality.

Happy 50!Happy 50!

26April2006

LessonsNeed-drivenNeed-driven

A thousand “parents”A thousand “parents”MessyMessy

EvolutionaryEvolutionary“Trivial”“Trivial”

RelentlessRelentless Experimentation ExperimentationTrial Trial & & many, many eRRORsmany, many eRRORs

“Real heroes” seldom around when the battle is won“Real heroes” seldom around when the battle is wonLoooong time for systemic adaptation/sLoooong time for systemic adaptation/s

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

Not …“Plan-driven”“Plan-driven”

The product of “Strategic Thinking/Planning”The product of “Strategic Thinking/Planning”The product of “focus groups”The product of “focus groups”

““Containerization is a remarkable achievement. Containerization is a remarkable achievement. No one foresaw how the box would transform No one foresaw how the box would transform

everything it touched—from ships and ports to everything it touched—from ships and ports to patterns of global trade. Containerization is a patterns of global trade. Containerization is a

monument to the most powerful law in monument to the most powerful law in economics, that of unanticipated consequences. economics, that of unanticipated consequences. … … This historThis historyy ou ougght to be humblinht to be humblingg to fans of to fans of

modern manamodern managgement methods. Careful ement methods. Careful pplanninlanningg and thorough analand thorough analyysis, those business school sis, those business school basics, mabasics, mayy have their have their pplace, but thelace, but theyy provide provide

little little gguidance in the face of disruuidance in the face of disrupptive chantive changges es that alter an industrthat alter an industryy’s ver’s veryy fundamentals fundamentals.”.” —Marc

Levinson, FT, 0425.06 (author of The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger)

Get mad.Get mad. Do Do something something

about it. about it. Now.Now.

The “5Ps” of Innovation Success:The “5Ps” of Innovation Success:

Pissed-off-ed-nessPissed-off-ed-nessPassionPassion

palspalsPolitics Politics [Political skill][Political skill]

PersistencePersistence



Ubiquitous Ubiquitous “Politics”“Politics”

Fooled by Fooled by Randomness: Randomness:

The Hidden Role The Hidden Role of Chance in Life of Chance in Life and the Marketsand the Markets

—Nassim Nicholas Taleb

““This book is about luck disguised and perceived as This book is about luck disguised and perceived as non-luck (that is, skills) and more generally randomness non-luck (that is, skills) and more generally randomness

disguised and perceived as non-randomness. It disguised and perceived as non-randomness. It manifests itself in the shape of the lucky fool, definedmanifests itself in the shape of the lucky fool, defined

as a person who benefited from a disproportionate as a person who benefited from a disproportionate share of luck but attributed his success to some other, share of luck but attributed his success to some other,

generally precise reason.”generally precise reason.”

“We underestimate the share of randomness in just “We underestimate the share of randomness in just about everything, a point that might not merit a about everything, a point that might not merit a book—book—exceexceppt when it is the st when it is the sppecialist who is theecialist who is the

fool of all foolsfool of all fools.”.”

“Mild success can be explainable by skills and labor.“Mild success can be explainable by skills and labor. Wild success is attributable to variance.” Wild success is attributable to variance.”

Source: Fooled by Randomness: The Hidden Role of Chance in Life and the Markets —Nassim Nicholas Taleb

““[Eisenhower][Eisenhower] chafed miserably as chafed miserably as General MacArthur’s aide in the General MacArthur’s aide in the Philippines, and in the end was Philippines, and in the end was

promoted to lieutenant colonel only promoted to lieutenant colonel only because General George C. because General George C.

Marshall remembered him, from Marshall remembered him, from years of inspecting dreary years of inspecting dreary

peacetime army bases, as peacetime army bases, as the best the best bridbridgge e pplalayyer in the U.S. Armer in the U.S. Army.”y.” ——

Ulysses S. GrantUlysses S. Grant, Michael Korda, Michael Korda

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

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

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

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

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

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

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

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

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

P P [Residual][Residual] = .00= .0004*04*

*4/10,000 [.02 X .02]*4/10,000 [.02 X .02]

The Black Swan: The Black Swan: The Impact ofThe Impact of

the Highly the Highly ImprobableImprobable

Nassim Nicholas Taleb Nassim Nicholas Taleb

1982 1982 (-)(-) = = 200 200

Years Years (+)(+)

1982/Default Latin 1982/Default Latin

America = America = 200 200 yearsyears [Total historical [Total historical

earnings]earnings]

The The Black SwanBlack Swan: The Impact of the: The Impact of the Highly Improbable Highly Improbable, Nassim Nicholas Taleb, Nassim Nicholas Taleb

TP: This book This book willwill (should!)(should!) change change your life.your life.

Siegfried and Roy Siegfried and Roy

= = 1,000X1,000X [gambling variability][gambling variability]

The The Black SwanBlack Swan: The Impact of the: The Impact of the Highly Improbable Highly Improbable, Nassim Nicholas Taleb, Nassim Nicholas Taleb

10/50/5010/50/50**

*10 days in 50 years = 50% returns*10 days in 50 years = 50% returnsThe Black Swan: The Impact of the The Black Swan: The Impact of the

Highly ImprobableHighly Improbable, Nassim Nicholas Taleb, Nassim Nicholas Taleb

Forget:Forget: Normal Normal Distributions, Distributions,

Means + Medians Means + Medians + Modes + + Modes + Standard Standard DeviationDeviation

Banking: Banking: 33 = R.O.H.: = R.O.H.: 1982/Default Latin 1982/Default Latin America = Total historical earnings; 1992/S & L; America = Total historical earnings; 1992/S & L;

2002/dot.com2002/dot.com

Las Vegas:Las Vegas: Siegfried and Roy, Siegfried and Roy,

plus a handful of others = plus a handful of others = 1,000X1,000X gambling variabilitygambling variability

Wall Street:Wall Street: “In the last 50 years, the “In the last 50 years, the 1010 most extreme most extreme dadayyss in the financial markets in the financial markets represent half of the returns. Ten days in 50 represent half of the returns. Ten days in 50

years. Meanwhile, we are mired in chitchat.” years. Meanwhile, we are mired in chitchat.”

The Black Swan: The Impact of theThe Black Swan: The Impact of the Highly Improbable Highly Improbable, Nassim Nicholas Taleb, Nassim Nicholas Taleb


INNOVATE. INNOVATE. OR. OR. DIE.DIE.

More than $$$$

#1#1 R&D

spending, last 25 years?

GGMM

BIG?BIG?????

BIG???BIG???EXCELLEEXCELLE

NCE?NCE?

HHA!A!

“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 Buy a very large one very large one and just waitand just wait.”.”

—Paul Ormerod, Why Most Things Fail: Evolution, Extinction and Economics

Dick Kovacevich: You You don’t get don’t get better by better by

being being bigger. You bigger. You get worse.”get worse.”

Scale?

“Microsoft’s Struggle With

Scale”Scale” —Headline, FT, 09.2005

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

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

““[Dell’s] predicament may be intractable.[Dell’s] predicament may be intractable. Dell Dell remained slavishly loyal to its core idea of ultra-efficient remained slavishly loyal to its core idea of ultra-efficient

supply-chain management and direct sales to customers, even supply-chain management and direct sales to customers, even as rivals have stepped up their game. … Instead of adapting, as rivals have stepped up their game. … Instead of adapting, critics say, Dell cut costs in ways that compromised customer critics say, Dell cut costs in ways that compromised customer

service and, possibly, product quality.”service and, possibly, product quality.” —BW, 0904

““They’re a one-trick pony. It was a great trick They’re a one-trick pony. It was a great trick for over 10 years.”for over 10 years.” —tech exec/BW

““Dell’s culture is not inspirational or Dell’s culture is not inspirational or aspirational.aspirational. This is when they need to be imaginative, This is when they need to be imaginative, but [Dell’s] culture only wants to talk about execution.”but [Dell’s] culture only wants to talk about execution.” —

Geoffrey Moore

““There are some organizations where people There are some organizations where people think they’re a hero if they invent a new thing. think they’re a hero if they invent a new thing.

Being a hero at Dell means saving money.”Being a hero at Dell means saving money.” —Kevin Rollins, CEO

““Despite a decade of Despite a decade of banking mergers, there is banking mergers, there is

no evidenceno evidence that big banks that big banks are any more efficient or are any more efficient or

profitable than their smaller profitable than their smaller rivals.”rivals.” —Financial Times,—Financial Times, 0329, on 0329, on

possible Barclays-ABN Amro merger possible Barclays-ABN Amro merger (“When it (“When it comes to asking the stock market whether comes to asking the stock market whether

bigger banks are better, bigger banks are better, the current answer is the current answer is a a resounding ‘noresounding ‘no.”.” —Citigroup analysis, 2006) —Citigroup analysis, 2006)

TP/DuhTP/Duh:: “The “The frugal times frugal times

forced [BA] to forced [BA] to focus on being focus on being

profitable rather profitable rather than big.”than big.” ——Economist, 04.28.07Economist, 04.28.07

“Not a single company that qualified as having made a sustained transformation ignited its leap with a big

acquisition or merger. Moreover, Moreover, comparison companies—those that failed to make a comparison companies—those that failed to make a leap or, if they did, failed to sustain it—often tried to leap or, if they did, failed to sustain it—often tried to

make themselves great with amake themselves great with a big acquisition or merger. They failed to grasp the big acquisition or merger. They failed to grasp the

simple truth that while you can buysimple truth that while you can buy your way to growth, you cannot buy your way to your way to growth, you cannot buy your way to

greatness.”greatness.” —Jim Collins/—Jim Collins/TimeTime/2004/2004

“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 I’m sure there

are success stories out are success stories out there, but at this there, but at this moment I draw a moment I draw a

blankblank.”.” —Mark Sirower, The Synergy Trap

““MERGERS: Why Most Big MERGERS: Why Most Big Deals Don’t Pay Off. A Deals Don’t Pay Off. A

BusinessWeekBusinessWeek analysis analysis shows that shows that 6161%% of buyers of buyers

destroyed shareholder destroyed shareholder wealth.”wealth.” ——BusinessWeekBusinessWeek

““Mergers and acquisitions get the headlines, but studies Mergers and acquisitions get the headlines, but studies show they often end up destroying shareholder value show they often end up destroying shareholder value instead of creating it. That’s one reason why organic instead of creating it. That’s one reason why organic

growth is so prized by corporations and investors. In fact, growth is so prized by corporations and investors. In fact, if you compare the stock performance of a new index of if you compare the stock performance of a new index of 23 companies that are masters of organic growth to the 23 companies that are masters of organic growth to the

S&P500, the Organic Growth Index beat the S&P500 S&P500, the Organic Growth Index beat the S&P500 handily, 31% vs. 22% over the year ending January 2004. handily, 31% vs. 22% over the year ending January 2004. And looking further back at a five-year period ending in And looking further back at a five-year period ending in

2002, the OGI walloped the S&P500, 25% vs. 3%.”2002, the OGI walloped the S&P500, 25% vs. 3%.”

—Fortune.com/06.03.2004 (The OGI includes Wal*Mart, Sysco,—Fortune.com/06.03.2004 (The OGI includes Wal*Mart, Sysco, Harley-Davidson, Bed, Bath & Beyond, NVR) Harley-Davidson, Bed, Bath & Beyond, NVR)

“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 but I’m not sure we’re actually sure we’re actually innovatinginnovating.. … Our challenge is

to take nanotechnology into the future, to do personalized medicine …” —Jeff Immelt/2005

Mission impossible?Mission impossible?

$36B/’98$36B/’98minus minus

$675M/‘$675M/‘0707

DDaimler.aimler. And And DDumb. umb. Both Start Both Start with “with “dd.”.”

““Marriage in Marriage in heaven”heaven” —Daimler-Benz and —Daimler-Benz and

Chrysler exchange vows, circa Chrysler exchange vows, circa 19981998 (Jürgen (Jürgen Schrempp)Schrempp)

“the “the divorce on divorce on earthearth”” —Daimler exec, —Daimler exec,

circa circa 20072007, on probable Cerberus private equity , on probable Cerberus private equity purchase of Chrysler from Daimlerpurchase of Chrysler from Daimler

““Schrempp is one of the last Schrempp is one of the last dinosaurs of Germany Inc. He dinosaurs of Germany Inc. He

represents a strategy of acquiring represents a strategy of acquiring assets and building empires thatassets and building empires that just didn’t work.” just didn’t work.” —Arndt Ellinghorst, analyst, —Arndt Ellinghorst, analyst,

Dresdner Kleinwort WassersteinDresdner Kleinwort Wasserstein

“His bets went sour one by “His bets went sour one by one.”one.” ——WSJWSJ on J on Jüürgen Schrempp’s conglomeration (05.15.2007)rgen Schrempp’s conglomeration (05.15.2007)

“Obviously, we overestimated the “Obviously, we overestimated the potential for synergies.”potential for synergies.” —Dieter Zetsche, —Dieter Zetsche,

CEO, DaimlerCEO, Daimler

DaimlerChrysler/’98-’07:DaimlerChrysler/’98-’07: DuhDuh,, Duh Duh,, Duh Duh,, Duh Duh and … and … DuhDuh

ManifoldManifold SynergiesSynergies//NoNoSevere Severe ScaleScale limits/ limits/YesYesCultureCulture clashes/ clashes/YesYes

Rushmorean Rushmorean egoego issues/ issues/YesYesCustomerCustomer acceptance acceptance

/No/No

““Mr Zetsche, Mr Zetsche, head of head of

Chrysler from Chrysler from 2000 to 2005, 2000 to 2005,

denied he denied he shouldshould

take any take any responsibility responsibility

forfor the U.S. the U.S.

carmaker’scarmaker’s troubles …” troubles …” ——Financial Financial

TimesTimes /05.29.07 /05.29.07

““Mr Zetsche, head of Mr Zetsche, head of Chrysler from 2000Chrysler from 2000

to 2005, to 2005,

denieddenied he shouldhe should

take take anyany responsibility for the U.S. responsibility for the U.S. carmaker’s troubles …”carmaker’s troubles …” ——

Financial TimesFinancial Times /05.29.07 /05.29.07

DDaimler.aimler. And And DDumb. umb. Both Start Both Start with “with “dd.”.”

$10,000,000/$10,000,000/DayDay

NOTE: NOTE: the loss in value the loss in value in the 8 years of in the 8 years of

daimler ownership of daimler ownership of chrysler has been chrysler has been about ten about ten millionmillion dollars … per dollars … per dayday..

bbig.ig. And And bbozo. ozo. Both Start Both Start with “with “bb.”.”

“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 Buy a very large one very large one and just waitand just wait.”.”

—Paul Ormerod, Why Most Things Fail: Evolution, Extinction and Economics

Dick Kovacevich: You don’t You don’t get better get better by being by being

bigger. You bigger. You get worse.”get worse.”

ccool. And ool. And CConnecticut. onnecticut. Both Start Both Start with “with “cc.”.”

Basement Basement Systems Inc.Systems Inc.

*Basement Systems Inc./Larry Janesky*Basement Systems Inc./Larry Janesky

**Dry Basement ScienceDry Basement Science (115,000!) (115,000!)

*2006: *2006:

$$50,000,000+50,000,000+

““Conglomerates Conglomerates don’t work.”don’t work.”

—James Surowiecki, The New Yorker

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

I wonder what I wonder what unimaginable new unimaginable new

tools, tools, otherwise not otherwise not ppossibleossible, will be , will be

brought forth brought forth for mfor myy daudaugghter Alice, ahter Alice, agge e

1717, because, because of this deal?” of this deal?”

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

wonder what wonder what unimaginable new unimaginable new

tools, tools, otherwise not otherwise not ppossibleossible, will be , will be

quickly brought forth quickly brought forth for our customersfor our customers

because of because of this deal?”this deal?”

““These days, everybody wants to merge. Too These days, everybody wants to merge. Too often they’re just blindly gobbling up as often they’re just blindly gobbling up as

many players as they can, in the false belief many players as they can, in the false belief that bigger has to be better. It kind of makes that bigger has to be better. It kind of makes you wonder if merger-mania isn’t really ego-you wonder if merger-mania isn’t really ego-mania.mania. Or something even more destructive. Or something even more destructive. If you look at it objectively, most mergers do If you look at it objectively, most mergers do

not revitalize companies. Rather, they not revitalize companies. Rather, they provide short-term gains for a relatively provide short-term gains for a relatively

small group of people, usually Wall Street small group of people, usually Wall Street bankers and lawyers.”bankers and lawyers.” —Lee Iacocca, —Lee Iacocca, Where Have All Where Have All

the Leaders Gone?the Leaders Gone?

SpinoffsSpinoffs systematically perform better than IPOs … track

record, profits … “freed from the “freed from the confines of the parent … more confines of the parent … more entrepreneurial, more nimbleentrepreneurial, more nimble”

—Jerry Knight/ Washington Post/ 08.05

Market Share, Anyone?

— 240 industries: — 240 industries: Market-Market- share leader is ROA share leader is ROA leaderleader 29%29% of the time of the time — Profit /ROA leaders: — Profit /ROA leaders: “aggressively weed“aggressively weed out customers who out customers who generate low returns” generate low returns” Source: Donald V. Potter, Wall Street Journal

“Acquisitions are about buying market share.

Our challenge is Our challenge is to create to create

marketsmarkets.. There is a big difference.”

—Peter Job, former CEO, Reuters

There’s “A”“A” and then

there’s “A.”“A.”

Winning the Merger Game Is Possible

--Lots of deals--Lots of deals--Little deals--Little deals

--Friendly deals--Friendly deals--Stay close to core competence--Stay close to core competence--Strategy is easy to understand--Strategy is easy to understand

Source: “The Mega-merger Mouse Trap”/Wall Street Journal/02.17.2004 / David Harding & Sam Rovit, Bain & Co./re Comcast-

Disney

TP on AcquisitionsTP on Acquisitions

1. Big + Big = Disaster. (Statistically.)1. Big + Big = Disaster. (Statistically.)2. Big (GE, Cisco, Omnicom) acquires small/specialist 2. Big (GE, Cisco, Omnicom) acquires small/specialist = Good … = Good … ifif you can retain Top Talent. you can retain Top Talent.3. Odds on achieving “projected synergies” among3. Odds on achieving “projected synergies” among Mixed Big “cultures”: 10%. Mixed Big “cultures”: 10%.4. Max Scale Advantages are achieved at a smaller size4. Max Scale Advantages are achieved at a smaller size than imagined. than imagined.5. Attacked by Big, Mediocre Medium marries Mediocre5. Attacked by Big, Mediocre Medium marries Mediocre Medium to “bulk up.” Result: Big Mediocrity … Medium to “bulk up.” Result: Big Mediocrity … or worse. or worse.6. Increasingly, Alliances deliver more value than6. Increasingly, Alliances deliver more value than mergers—and clearly abet flexibility. mergers—and clearly abet flexibility.

Private Equity-financedPrivate Equity-financed Firm, Firm, BestBest *Case *Case

*Focus! Focus! Focus!*Focus! Focus! Focus!*In a [Big] hurry*In a [Big] hurry

*CEO/Top team, “skin*CEO/Top team, “skin in the game” in the game”

*CEO, 100% of time*CEO, 100% of time on the biz on the biz

*Merit! Merit!*Merit! Merit!*Motivated oversight*Motivated oversight

*Worst case: Rape & Pillage

The “New German The “New German Miracle”* = The Miracle”* = The

“Old German “Old German Miracle” = Miracle” =

Mittlestand**Mittlestand***Among other things, #1 in exports*Among other things, #1 in exports

**”No doubt of it, tom [BASF exec/04.07]**”No doubt of it, tom [BASF exec/04.07]

InnoTacsInnoTacs

“Acquisitions are about buying market share.

Our challenge is Our challenge is to create to create

marketsmarkets.. There is a big difference.”

—Peter Job, former CEO, Reuters

Characteristics of the “Also rans”*Characteristics of the “Also rans”*

“Minimize risk”“Minimize risk”“Respect the chain of “Respect the chain of

command”command”“Support the boss”“Support the boss”

“Make budget”“Make budget”**FortuneFortune, article on “Most Admired Global Corporations”, article on “Most Admired Global Corporations”

““Companies have Companies have defined so much defined so much

‘best practice’ ‘best practice’ that they are now that they are now

more or less more or less identical.”identical.”

—Jesper Kunde, —Jesper Kunde, Unique Now ... Or NeverUnique Now ... Or Never

““It is It is notnot the the strongest of the strongest of the

species that survives, species that survives, nornor the most the most

intelligent, but intelligent, but the the one most one most responsive responsive

to changeto change.”.” —Charles Darwin

InnoTacsInnoTacs

revenue revenue matters matters most most

The Commerce Bank ModelThe Commerce Bank Model

“cost cutting “cost cutting is a death is a death spiral.”spiral.”

Source: Source: Fans! Not customers. How Commerce Bank Fans! Not customers. How Commerce Bank Created a Super-growth Business in a No-growth Created a Super-growth Business in a No-growth

IndustryIndustry, Vernon Hill & Bob Andelman, Vernon Hill & Bob Andelman

““Our whole Our whole story is story is growing growing

revenue.”revenue.” —Vernon Hill (Top-line driven; standard —Vernon Hill (Top-line driven; standard

is bottom-line driven by cost cutting)is bottom-line driven by cost cutting)

The Commerce Bank ModelThe Commerce Bank Model

““overover-invest in -invest in our people, our people, overover--

invest in our invest in our facilities.”facilities.”

Source: Source: Fans! Not customers. How Commerce Bank Fans! Not customers. How Commerce Bank Created a Super-growth Business in a No-growth Created a Super-growth Business in a No-growth

IndustryIndustry, Vernon Hill & Bob Andelman, Vernon Hill & Bob Andelman

CCRR O*

*Chief RevenueRevenue Officer

We We becomebecome who we hang who we hang

out with 1out with 1

Measure “Strangeness”/Portfolio QualityMeasure “Strangeness”/Portfolio QualityStaffStaff

ConsultantsConsultantsVendorsVendors

Out-sourcing Partners Out-sourcing Partners (#, Quality)(#, Quality)Innovation Alliance PartnersInnovation Alliance Partners

CustomersCustomersCompetitors Competitors (who we “benchmark” against)(who we “benchmark” against)

Strategic Initiatives Strategic Initiatives Product Portfolio Product Portfolio (LineEx v. Leap)(LineEx v. Leap)

IS/IT ProjectsIS/IT ProjectsHQ LocationHQ LocationLunch MatesLunch Mates

LanguageLanguageBoardBoard

CUSTOMERS: “Future-“Future-defining customers defining customers

may account for only may account for only 2%2% to to 3%3% of your total, of your total, but they represent a but they represent a

crucial window on crucial window on the future.”the future.”

Adrian Slywotzky, Mercer Consultants

Axiom: Never use a vendor who is not in the

top quartiletop quartile (decile?) in their industry on R&D

spending!*

*Inspired by Hummingbird

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

fear the second best fear the second best swordsman in the world;swordsman in the world; no, the

person for him to be afraid of is some ignorant antagonist who has never had a sword in his

hand before; he doesn’t do the thing he ought to do, and so the expert isn’t prepared for him; he does the thing he ought not to do and often it catches the expert out and ends him on the

spot.”

—Mark Twain

“How do dominant companies lose their position? Two-Two-thirds of the time, thirds of the time,

thethey py pick the wronick the wrongg competitor to worrcompetitor to worryy

aboutabout.”.” —Don Listwin, CEO, Openwave Systems/WSJ

KodakKodak …. Fuji …. FujiGMGM …. Ford …. FordFordFord …. GM …. GM

IBMIBM …. Siemens, Fujitsu …. Siemens, FujitsuSears Sears …. Kmart…. Kmart

XeroxXerox …. Kodak, IBM …. Kodak, IBM

““Port-Port- fol-iofol-io Think- Think- ing”ing”

Big Idea/sBig Idea/s

V.C. V.C. [Venture Capitalist][Venture Capitalist] G.M. G.M. [General Mgr/Pro Sports][General Mgr/Pro Sports]

PortfolioPortfolioRosterRoster

““Diverse groups of problem solvers—Diverse groups of problem solvers—groups of people with diverse tools—groups of people with diverse tools—

consistently outperformed groups of the consistently outperformed groups of the best and the brightest. If I formed two best and the brightest. If I formed two

groups, one random (and therefore groups, one random (and therefore diverse) and one consisting of the best diverse) and one consisting of the best individual performers, the first group individual performers, the first group

almost always did better. … almost always did better. …

DiversityDiversity trumped trumped abilityability.”.” —Scott Page, —Scott Page, The Difference: How The Difference: How

the Power of Diversity Creates Better Groups,the Power of Diversity Creates Better Groups, Firms, Schools, and Societies Diversity Firms, Schools, and Societies Diversity

Portfolios/Weirdness IndexPortfolios/Weirdness IndexV.C.V.C.

Micro-acquisitionsMicro-acquisitionsWee J.V.Wee J.V.ss

ButterfliesButterfliesBehavior LeversBehavior Levers

“small wins”“small wins”Parallel Universe/sParallel Universe/s

SkunkworksSkunkworksF.F.F.F.F.F.F.F.B.F.A.B.F.A.R.F.A.R.F.A.f.r.a.f.r.a.

R.F.F.F.R.F.F.F.F.F.F.R.F.F.F.R.

f.f.f.f.f.f.Prototype ManiaPrototype Mania

Portfolios/Weirdness IndexPortfolios/Weirdness IndexV.C.V.C.

Micro-acquisitionsMicro-acquisitionsWee J.V.Wee J.V.ss

ButterfliesButterfliesBehavior LeversBehavior Levers

“small wins”“small wins”Parallel Universe/sParallel Universe/s

SkunkworksSkunkworksF.F.F.F. F.F.F.F. [Find a Fellow Freak Far away][Find a Fellow Freak Far away]

B.F.A. B.F.A. [bias for action][bias for action]R.F.A. R.F.A. [ready. Fire. aim,.][ready. Fire. aim,.]f.r.a. f.r.a. [fire. Ready. Aim.][fire. Ready. Aim.]

R.F.F.F. R.F.F.F. [ready. Fire. Fire. Fire.][ready. Fire. Fire. Fire.]F.F.F.R. F.F.F.R. [fire. Fire. Fire. Ready.][fire. Fire. Fire. Ready.]

f.f.f. f.f.f. [fail. Forward. Fast.][fail. Forward. Fast.]Prototype ManiaPrototype Mania

The “Hang Out Axiom”:The “Hang Out Axiom”: At its core, At its core, evereveryy (!!!) (!!!)

relationship-partnership relationship-partnership decision (employee, decision (employee,

vendor, customer, etc)vendor, customer, etc) is a is a stratestrateggicic decision decision

about: about: “Innovate,“Innovate,

‘Yes’ or ‘Yes’ or ‘No’‘No’ ” ”

Why Do I love Freaks?

(1) Because when Anything Interesting happens … it was (1) Because when Anything Interesting happens … it was a a freakfreak who did it. (Period.) who did it. (Period.) (2) (2) FreaksFreaks are fun. (Freaks are also a pain.) (Freaks are are fun. (Freaks are also a pain.) (Freaks are never boring.) never boring.) (3) We need (3) We need freaksfreaks. Especially in freaky times. (Hint: . Especially in freaky times. (Hint: These are freaky times, for you & me & the CIA & the These are freaky times, for you & me & the CIA & the Army & Avon.) Army & Avon.) (4) A critical mass of (4) A critical mass of freaks-in-our-midstfreaks-in-our-midst automatically make us-who-are-not-so-freaky at least automatically make us-who-are-not-so-freaky at least somewhat more freaky. (Which is a Good Thing in freaky somewhat more freaky. (Which is a Good Thing in freaky times—see immediately above.) times—see immediately above.) (5)(5) FreaksFreaks are the only (ONLY) ones who succeed—as are the only (ONLY) ones who succeed—as in, make it into the history books. in, make it into the history books. (6) (6) FreaksFreaks keep us from falling into ruts. (If we listen to keep us from falling into ruts. (If we listen to them.) (We seldom listen to them.) (Which is why most them.) (We seldom listen to them.) (Which is why most organizations are in ruts. Make that chasms.)organizations are in ruts. Make that chasms.)

GetGet madmad.. Do Do somethingsomething

about it. about it. NowNow..

““Dreaming,” necessary, Dreaming,” necessary, or not? or not?

TP, personal: “dream” = TP, personal: “dream” = concrete, practical concrete, practical

imaginings about the imaginings about the opposite of things that opposite of things that piss me off piss me off (TP “advantages”: low(TP “advantages”: low

boiling point, long memory) boiling point, long memory)

Michael Porter:Michael Porter: “I’ve “I’ve been thinking …”been thinking …”

TP:TP: “I’m mad as “I’m mad as hell, and I’m not hell, and I’m not going to take it going to take it

anymore”anymore”

F(Anger/Passion)F(Anger/Passion) >>>> >>>> f(Pushback f(Pushback from Threatened from Threatened

Fat-cats & Fat-cats & Bureau-crats)Bureau-crats)

Pissed Pissed Off* Off*

*Innovation is Initiated by *Innovation is Initiated by Irritation.Irritation.

Re-imagining Results from Re-imagining Results from RageRage..

GSK:GSK: 7 “CEDDs” 7 “CEDDs” … Centers of … Centers of

Excellence for Excellence for Drug DiscoveryDrug Discovery

““Normal” Normal” = = “o “o forfor 800”800”

““There’s nothing There’s nothing worse worse

than beingthan being ordinary” ordinary” —Mena Suvari/—Mena Suvari/American BeautyAmerican Beauty

Semmelweis … ListerSemmelweis … ListerECS … SBAECS … SBA

Stokely … MLKStokely … MLKjrjr(TJP … RHWjr)(TJP … RHWjr)

CCfafaOO**Chief freaks acquisitionfreaks acquisition Officer

““You’re either You’re either going to be a going to be a millionaire or millionaire or going to jail.”going to jail.”

—Richard Branson’s Headmaster*—Richard Branson’s Headmaster* (* “He did both.”— (* “He did both.”—New YorkerNew Yorker))

Innovation’s Saviors-in-WaitingDisgruntledDisgruntled Customers Customers

Off-the-ScopeOff-the-Scope Competitors CompetitorsRogue Rogue EmployeesEmployeesFringeFringe Suppliers Suppliers

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

Keep Austin Keep Austin WeirdWeird

We We becomebecome

who who we we

hanghang out out withwith

“The The Bottleneck Bottleneck

Is at the Top Is at the Top of the of the

Bottle”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:

AtAt thethe totop!”p!”

— Gary Hamel/Harvard Business Review

futuremarkfuturemark

““To grow, companies To grow, companies need to break out of a need to break out of a

vicious cycle of vicious cycle of competitive competitive

benchmarking and benchmarking and imitation.”imitation.” —W. Chan Kim & Renée Mauborgne,

“Think for Yourself —Stop Copying a Rival,” Financial Times/2003




KodakKodak …. Fuji …. FujiGMGM …. Ford …. FordFordFord …. GM …. GM

IBMIBM …. Siemens, Fujitsu …. Siemens, FujitsuSears Sears …. Kmart…. Kmart

XeroxXerox …. Kodak, IBM …. Kodak, IBM

““Don’t Don’t benchmark, benchmark,

futuremark!”futuremark!” Impetus: “The future is already here; it’s just

not evenly distributed” —William Gibson

Portfolio Thinking

G.M.G.M. (Brand Yous)

V.C.V.C. (Wow Projects!)

M.B.S.A.M.B.S.A. (Demos. Heroes. Stories.)

We We becomebecome who we hang who we hang out with 1Aout with 1A

The The “Jay “Jay Team”Team” * *

*Allen Puckett’s *Allen Puckett’s “University“University of Weird” of Weird”

Tp “caves” Tp “caves” (a little)(a little): : Thinkers/ Thinkers/

“Thinkers Tank” … “Thinkers Tank” … notnot “Strategic “Strategic

Planners”Planners”






““Don’t Don’t benchmark … benchmark … futuremarkfuturemark!”!”

Impetus: “The future is already here; it’s just not evenly distributed” —William Gibson



WhackyWhackyWWikiikiWorldWorld

WowWow

Wikinomics:Wikinomics: How Mass How Mass

Collaboration Collaboration Changes Changes

EverythingEverything

——Don Tapscott & Anthony WilliamsDon Tapscott & Anthony Williams

““The Billion-man The Billion-man Research Team: Research Team:

Companies offering Companies offering work to online work to online

communities are communities are reaping the benefits of reaping the benefits of

‘crowdsourcing.’”‘crowdsourcing.’” —Headline, —Headline, FTFT, 0110.07, 0110.07

WikinomicsWikinomicsWikiWorldWikiWorld

Weapons of Mass collaborationWeapons of Mass collaborationCrowdSourcingCrowdSourcing

smart mobssmart mobsLinuxLinux

Human genome projectHuman genome projectInnoCentiveInnoCentive

YouTubeYouTubeSecond LifeSecond LifeWikipediaWikipediaMyspaceMyspace

Rob McEwen/CEO/CEO/Goldcorp Inc./Goldcorp Inc./

Red Lake Red Lake goldgoldSource: Source: Wikinomics: How Mass Wikinomics: How Mass

Collaboration Changes EverythingCollaboration Changes Everything, , Don Tapscott & Anthony WilliamsDon Tapscott & Anthony Williams

A New “C-Level?A New “C-Level?

C C WWww

O*O**Chief *Chief WikiWorldWikiWorld Officer Officer

““There’s a fundamental There’s a fundamental shift in power happening. shift in power happening. Everywhere, people are Everywhere, people are getting together and, getting together and,

using the Internet, using the Internet, disrupting whatever disrupting whatever

activities they’re activities they’re involved in.”involved in.” —Pierre Omidyar, founder, —Pierre Omidyar, founder,

eBayeBay

Focus Groups:Focus Groups: No!No!Continuing Continuing

Conversations:Conversations: Yes!Yes!

PlannersPlannersvs

SearchersSearchers

““Where Where pplannerslanners ** raise high expectations raise high expectations but take no responsibility for meeting them, but take no responsibility for meeting them, searcherssearchers prefer to work case-by-case, prefer to work case-by-case,

using trial and error to tailor solutions to using trial and error to tailor solutions to individual problems, fully aware that most individual problems, fully aware that most

remedies must be homegrown.” remedies must be homegrown.” ——WSJWSJ, 0822.06 (on malaria , 0822.06 (on malaria eradication, eradication,

and hedge fund manager Lance Laifer)and hedge fund manager Lance Laifer)

[*“Planners [*“Planners [WHO, World Bank, etc][WHO, World Bank, etc] see poverty as a see poverty as a technical engineering problem that their technical engineering problem that their

answers will solve.” answers will solve.” —William Easterly—William Easterly]]

“All sorts of approaches need to be “All sorts of approaches need to be tried and we need feedback.” tried and we need feedback.” —Roger Bate—Roger Bate

Find ’em!Find ’em!

““Somewhere in your Somewhere in your organization, groups of organization, groups of

people are people are alreadalreadyy doin doingg thinthinggs differentls differentlyy and and

better. To create lasting better. To create lasting change, find these areas change, find these areas of positive deviance and of positive deviance and

fan the flamesfan the flames.”.”

—Richard Pascale & Jerry Sternin, “Your Company’s Secret Change Agents,” HBR

F(Anger/Passion)F(Anger/Passion) >>>> >>>> f(Pushback f(Pushback from Threatened from Threatened

Fat-cats & Fat-cats & Bureau-crats)Bureau-crats)

““Some people look for Some people look for things that went wrong things that went wrong

and try to fix them. I and try to fix them. I look for look for things that things that

went rightwent right,, and try to and try to build off them.”build off them.” —Bob Stone (Mr

ReGo)

Stories … Paint me a Stories … Paint me a picture … Story picture … Story

“infrastructure” … Demos “infrastructure” … Demos … Quick prototypes … … Quick prototypes …

Experiments … Heroes … Experiments … Heroes … Renegades … Skunkworks Renegades … Skunkworks … Demo Funds … V.C. … … Demo Funds … V.C. …

G.M. … Roster … Portfolio G.M. … Roster … Portfolio … Stone’s Rules … JKC’s … Stone’s Rules … JKC’s

RulesRules

Demos!Demos! Heroes! Heroes! Stories!Stories!

Forward, march: The The “Sri Lanka “Sri Lanka Stratagem”Stratagem”

““Never doubt that a Never doubt that a small group of small group of

committed peoplecommitted people can change the can change the

world. Indeed it isworld. Indeed it is the only thing that the only thing that ever has.”ever has.” —Margaret Mead

Portfolio Thinking

G.M.G.M. (Brand Yous)

V.C.V.C. (Wow Projects!)

M.B.S.A.M.B.S.A. (Demos. Heroes. Stories.)

Find ’em!Find ’em!

Innovation Innovation “Tool”/“Source” # 1:“Tool”/“Source” # 1:

Pissed Off Pissed Off Person/ Person/ PeoplePeople

““What drove Trippe? What drove Trippe? A fury that A fury that the future was always the future was always

being hijacked by being hijacked by people with smaller people with smaller

ideasideas —by his first partners who did not want —by his first partners who did not want to expand airmail routes; by nations that protected to expand airmail routes; by nations that protected

flag carriers with subsidies; by the elitists who flag carriers with subsidies; by the elitists who regarded flight, like luxury liners, as a privilege that regarded flight, like luxury liners, as a privilege that

could only be enjoyed by the few; by the cartel could only be enjoyed by the few; by the cartel operators who rigged prices. The democratization operators who rigged prices. The democratization he effected was as real as Henry Ford’s.”he effected was as real as Henry Ford’s.” —Harold —Harold

Evans on Juan Trippe, the PanAm boss who brought the B747 to life Evans on Juan Trippe, the PanAm boss who brought the B747 to life ((WSJWSJ/02.24.2005)/02.24.2005)

invite invite ’em!’em!

“In the end, management doesn’t

change culture. Management

invitesinvites the workforce itself to change the culture.”

—Lou Gerstner

“If I could have chosen not to tackle the IBM culture head-on, I probably wouldn’t

have. My bias coming in was toward strategy, analysis and measurement. In comparison, changing the attitude and behaviors of hundreds of thousands of

people is very, very hard. [Yet] I [Yet] I came to see in my came to see in my time at IBM that time at IBM that

culture isn’t just one culture isn’t just one aspect of the game—it aspect of the game—it isis the game.” the game.” —Lou Gerstner,

Who Says Elephants Can’t Dance

““[Dell’s] predicament may be intractable. Dell remained [Dell’s] predicament may be intractable. Dell remained slavishly loyal to its core idea of ultra-efficient supply-chain slavishly loyal to its core idea of ultra-efficient supply-chain management and direct sales to customers, even as rivals management and direct sales to customers, even as rivals have stepped up their game. … Instead of adapting, critics have stepped up their game. … Instead of adapting, critics

say, Dell cut costs in ways that compromised customer say, Dell cut costs in ways that compromised customer service and, possibly, product quality.”service and, possibly, product quality.” —BW, 0904

““They’re a one-trick pony. It was a great trick for over 10 They’re a one-trick pony. It was a great trick for over 10 years.”years.” —tech exec/BW

““Dell’s culture is not inspirational or Dell’s culture is not inspirational or aspirational.aspirational. This is when they need to be imaginative, This is when they need to be imaginative, but [Dell’s] culture only wants to talk about execution.”but [Dell’s] culture only wants to talk about execution.” —

Geoffrey Moore

““There are some organizations where people There are some organizations where people think they’re a hero if they invent a new thing. think they’re a hero if they invent a new thing.

Being a hero at Dell means saving money.”Being a hero at Dell means saving money.” —Kevin Rollins, CEO

send ’em on send ’em on

a quest!a quest!

Leaders-Teachers Do Leaders-Teachers Do NotNot “Transform People”! “Transform People”!

Instead leaders-mentors-teachers (1) Instead leaders-mentors-teachers (1) provide a contextprovide a context which is marked by (2)which is marked by (2) access to a luxuriant portfolio access to a luxuriant portfolio of meaningful opportunitiesof meaningful opportunities (projects)(projects) which (3) which (3) allow allow

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

innate curiosityinnate curiosity and (4) and (4) engage in a vigorous engage in a vigorous discovery voyagediscovery voyage (alone and in small teams, assisted by an (alone and in small teams, assisted by an

extensive self-constructed network)extensive self-constructed network) by which those people by which those people (5) (5) go to-create places theygo to-create places they ((andand their mentors-teachers- their mentors-teachers-

leaders)leaders) had never dreamed existedhad never dreamed existed —and then the —and then the leaders-mentors-teachers (6)leaders-mentors-teachers (6) applaud like hell, stage applaud like hell, stage “photo-ops,” and ring the church bells 100 times “photo-ops,” and ring the church bells 100 times to commemorate the bravery of their “followers’ to commemorate the bravery of their “followers’

” explorations!” explorations!

Organizing Genius / Warren Bennis and Patricia Ward Biederman

“Groups become great only when everyone in them, leaders and

members alike, is free to do his or is free to do his or her absolute besther absolute best.”.”

“The best thing a leader can do for a Great Group is to allow its allow its

members to discover their members to discover their ggreatnessreatness.”.”

Leadership’s Mt Everest/Mt Excellence

“free to do his or her free to do his or her absolute best” …absolute best” …

“allow its members to “allow its members to discover their discover their greatness.”greatness.”

““The role of the Director is to The role of the Director is to create a space where the actors create a space where the actors and actresses canand actresses can become become more than they’ve ever more than they’ve ever been before, more than been before, more than

they’ve dreamed of they’ve dreamed of beingbeing.”.” —Robert Altman, Oscar acceptance speech—Robert Altman, Oscar acceptance speech

Where to look for “Playmates”:

F.F.F.F.F.F.F.F. (Find a Fellow Freak Faraway)

Playmate!*Playmate!*Playpen!Playpen!

Prototype!Prototype!*Can be Client, supplier … as well as Insider*Can be Client, supplier … as well as Insider

Demos!Demos! Heroes! Heroes! Stories!Stories!

Women as Women as innovation innovation

force!force!

““Women Women areare thethe

majority majority market”market”

—Fara Warner/—Fara Warner/The Power of the PurseThe Power of the Purse

9494%% of loans to of loans to ……

womenwomen****MMicrolending; “Banker to the poor”; Grameen Bank; icrolending; “Banker to the poor”; Grameen Bank;

Muhammad Yunus; 2006 Nobel Peace Prize winnerMuhammad Yunus; 2006 Nobel Peace Prize winner

10.610.6

Women: Women: Principal Principal Change Change Agents/ Agents/

Health, family Health, family & Finance& Finance

“Women don’t buy

brands. They They join themjoin them.”.”

EVEolution

Concoct a Concoct a Parallel Parallel

universe!universe!

““Parallel Parallel Universe” …Universe” … China!!!!!!!China!!!!!!!

““Venture” Venture” fund:fund: Gerstner/Amex, Dow/Marriott, Grove/Intel,

Bedbury/Starbucks

“SkunkWorks”/ “ParallelUniverse”

“the 1%1% solution”

Source: Scott Bedbury (Others: 3M, Google, Shell, NAVFAC)

SkunkWorks/ SkunkWorks/ “Skunks” (!!!)“Skunks” (!!!)

““[CEO A.G.] Lafley has shifted [CEO A.G.] Lafley has shifted P&G’s focus on inventing all its P&G’s focus on inventing all its

own products to developing own products to developing others’ inventions others’ inventions at least half at least half

the timethe time. One successful . One successful example Mr. Clean Magic Eraser, example Mr. Clean Magic Eraser, based on a product found in an based on a product found in an

Osaka market.”Osaka market.” ——FortuneFortune, 12.18.06, 12.18.06

Build a “School on top of Build a “School on top of a school”a school” (The Parallel

Universe Strategy)

““Strategic Thrust Overlay”*Strategic Thrust Overlay”*SyscoSysco

Microsoft (I’net, Search)Microsoft (I’net, Search)GE (6-Sigma, Workout, etc.)GE (6-Sigma, Workout, etc.)

GSK (7 CEDDs)GSK (7 CEDDs)Apple (Mac)Apple (Mac)

Hyundai (et al.) (Electronics, etc.)Hyundai (et al.) (Electronics, etc.)

*Different from Skunkworks

Multipliers:Multipliers:Broken Broken

WindowsWindows

Multipliers, science of/butterflies/Rat Psych 101:Multipliers, science of/butterflies/Rat Psych 101:

Broken Windows/safe cityBroken Windows/safe citySmall plates/empty shelves/remote parking lot/Small plates/empty shelves/remote parking lot/

distant food court/slow elevatordistant food court/slow elevatorGeologists/geophysicists Geologists/geophysicists

Contiguous offices/Office layout-location powerContiguous offices/Office layout-location powercasual gathering placescasual gathering places“renegade” buildings“renegade” buildings

“Hang out factor”/inno #1“Hang out factor”/inno #1“hero galleries”/great art“hero galleries”/great art

welcoming reception area (Insta-smell culture)welcoming reception area (Insta-smell culture)b.P.d. decals on glasses/12.31.06b.P.d. decals on glasses/12.31.06beyond escape: Bike at the door/beyond escape: Bike at the door/Running shoes next to the bedRunning shoes next to the bed

etcetcetcetc

Speed/ Speed/ Tempo/Tempo/

is-itis-it

“the FedFedExEx EconomyEconomy”

—headline/New York Times

“Any3”: Anything/ Anything/ Anywhere/ Anywhere/ AnytimeAnytime

Wal*Mart Wal*Mart (!)(!) & Katrina& Katrina

Power Tools Power Tools For Power For Power StrategiesStrategies

Sysco!Sysco!

Go for the Go for the BoldBold* * BoldBold/Aggressive/$$$$/Aggressive/$$$$* * BoldBold/GameChanger /GameChanger * * BoldBold/Creative Destruction/Creative Destruction* * BoldBold/“Cool” Supplier Portfolio/“Cool” Supplier Portfolio* * BoldBold/Web Fanaticism/Web Fanaticism

“UPS used to be a trucking company with technology.

Now it’s Now it’s a technoloa technologygy comcomppananyy with with

truckstrucks.”.” —Forbes

5%5% F500 have F500 have CIO on Board:CIO on Board: “While some

of the world’s most admired companies—companies—TescoTesco, , Wal*MartWal*Mart —are transforming the

business landscape by including technology experts on their boards, the vast majority are

missing out on ways to boost productivity, competitiveness and shareholder value.”

Source: Burson-Marsteller

Speed/ Speed/ Tempo/Tempo/o.o.d.a. o.o.d.a. loopsloops

Messin’ with Messin’ with their minds: He their minds: He

who has the who has the quickest quickest

“O.O.D.A. “O.O.D.A. Loops”* wins!Loops”* wins!

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

“Blitzkrieg is far more than lightning thrusts that most people think of when they hear the term; rather it was all

about high operational tempo and the rapid exploitation of opportunity.” —Robert Coram, Boyd

“Re-arrange the mind “Re-arrange the mind of the enemy”of the enemy” —T.E. Lawrence

“Float like a butterfly, “Float like a butterfly, sting like a bee”sting like a bee” —Ali

BOYD: The Fighter Pilot Who Changed

the Art of War (Robert Coram)

try it. Try it. Try it. try it. Try it. Try it. Try it. Try it. Try it.Try it. Try it. Try it.

Try it. Try it. Try it. Try it. Screw it Screw it up.up. Try it. Try it. Try Try it. Try it. Try

it. Try it. Try it. Try it. it. Try it. Try it. Try it. Try it. Try it. Screw it up.Screw it up. it. it.

Try it. Try it. try it. Try it. Try it. try it. Try it.Try it. Screw it up.Screw it up. Try it. Try it. Try it. Try it. Try it. Try it.

What makes What makes God laugh?God laugh?

PeoplePeople makingmaking plans!plans!

do do things.things.

““We have a We have a ‘strategic plan.’ ‘strategic plan.’ It’s called It’s called doing doing thingsthings.”.” — Herb Kelleher

do do them.them.

A man approached JP Morgan, held up an envelope, and said, “Sir, A man approached JP Morgan, held up an envelope, and said, “Sir, in my hand I hold a guaranteed formula for success, which I will in my hand I hold a guaranteed formula for success, which I will

gladly sell you for $25,000.”gladly sell you for $25,000.”

“Sir,” JP Morgan replied, “I do not know what is in the envelope, “Sir,” JP Morgan replied, “I do not know what is in the envelope, however if you show me, and I like it, Ihowever if you show me, and I like it, I

give you my word as a gentleman that I will pay you what you ask.” give you my word as a gentleman that I will pay you what you ask.”

The man agreed to the terms, and handed over the envelope. JP The man agreed to the terms, and handed over the envelope. JP Morgan opened it, and extracted a single sheet of paper. He gave it Morgan opened it, and extracted a single sheet of paper. He gave it one look, a mere glance, then handed the piece of paper back to the one look, a mere glance, then handed the piece of paper back to the

gent.gent.

And paid him the And paid him the agreed upon $25,000.agreed upon $25,000.

1. 1. Every morning, write Every morning, write a list of the things a list of the things that need to be done that need to be done that day. that day.

2.2. Do them.Do them. Source: Hugh MacLeod/tompeters.com/NPRSource: Hugh MacLeod/tompeters.com/NPR

drill.drill.

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

understand that you only you only find oil if you find oil if you drill wellsdrill 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

try try things.things.

““We made mistakes, of course. Most of them were We made mistakes, of course. Most of them were omissions we didn’t think of when we initially wrote the omissions we didn’t think of when we initially wrote the

software. software. We fixed them by doing it over and over, We fixed them by doing it over and over, again and again.again and again. We do the same today. While our We do the same today. While our competitors are still sucking their thumbs trying to competitors are still sucking their thumbs trying to

make the design perfect, we’re already on prototype make the design perfect, we’re already on prototype

versionversion ##55.. By the time our rivals areBy the time our rivals are ready with wires and screws, we are on versionready with wires and screws, we are on version

##1010.. It gets back to It gets back to planning versus actingplanning versus acting: : We act We act from day onefrom day one; ; others plan how others plan how toto planplan——for monthsfor months.”.” —Bloomberg by —Bloomberg by

BloombergBloomberg

““ExperimenExperiment t

fearlessly”fearlessly”Source: BW0821.06, Type A Organization Strategies/

“How to Hit a Moving Target”—Tactic #1Tactic #1

““We groundWe ground up more pig up more pig

brains!”brains!”

The True Logic* of Decentralization:

6 divisions = 6 “tries”6 divisions = 6 “tries”6 divisions = 6 6 divisions = 6 DIFFERENTDIFFERENT leaders = 6 leaders = 6 INDEPENDENTINDEPENDENT

“tries” = Max probability of “tries” = Max probability of “win”“win”

6 divisions = 6 6 divisions = 6 veryvery DIFFERENT DIFFERENT leaders = 6 leaders = 6 veryvery INDEPENDENT INDEPENDENT

“tries” = Max probability of “tries” = Max probability of ““far outfar out”/””/”3-sigma3-sigma”” “win” “win”

*“Driver”: Law of Large #s

SERIOUS SERIOUS

PLAYPLAY

Culture of PrototypingCulture of Prototyping

“Effective prototyping may “Effective prototyping may be be thethe most most

valuablevaluable core core competencecompetence an an

innovative organization can innovative organization can hope to have.”hope to have.” —Michael Schrage

Think about It!?Think about It!?

Innovation Innovation = = Reaction to the Reaction to the

PrototypePrototypeSource: Michael SchrageSource: Michael Schrage

““You can’t be a serious You can’t be a serious innovator unless and until innovator unless and until you are ready, willing and you are ready, willing and

able to seriously play. able to seriously play. ‘‘Serious playSerious play’ is not an ’ is not an

oxymoron; it is the oxymoron; it is the essenceessence of of innovationinnovation.” .” —Michael Schrage,—Michael Schrage, Serious PlaySerious Play

““Learn not Learn not to be to be

careful.”careful.”

—Photographer Diane Arbus to her students (Careful = The sidelinesCareful = The sidelines, from

Harriet Rubin in The Princessa)

““The key to a great The key to a great painting is the painting is the

nerve, after weeks of nerve, after weeks of effort, to ‘bet the effort, to ‘bet the

painting’ on the next painting’ on the next brush stroke,”brush stroke,” Master musician, Master musician,

San FranciscoSan Francisco

Screw. Screw. things.things.

Up.Up.

““FAIL, FAIL FAIL, FAIL AGAIN. FAIL AGAIN. FAIL BETTER.”BETTER.”

—Samuel Beckett

““Fail .Fail . Forward. Forward.

Fast.”Fast.”High Tech CEO, Pennsylvania

““Fail faster. Fail faster. Succeed Succeed Sooner.”Sooner.”

David Kelley/IDEO

Sam’s Sam’s Secret Secret

#1!#1!

““RewardReward excellent failures.

PunishPunish mediocre

successes.”Phil Daniels, Sydney exec

““If people tell me If people tell me they skied all day they skied all day

and never fell and never fell down, I tell them down, I tell them to try a different to try a different

mountain.”mountain.” —Michael Bloomberg (—Michael Bloomberg (BWBW/0625.07)/0625.07)

““In business, you In business, you rewardreward people for taking people for taking risksrisks. .

When it When it doesn’tdoesn’t workwork outout you pyou promoteromote them-because them-because they were willing to try new they were willing to try new

things. If people tell me things. If people tell me they skied all day and never they skied all day and never fell down, I tell them to tryfell down, I tell them to try

a different mountain.” a different mountain.” —Michael Bloomberg (—Michael Bloomberg (BWBW/0625.07)/0625.07)

Read This!

Richard Farson & Ralph Keyes: Whoever Makes Whoever Makes

the Most Mistakes the Most Mistakes Wins: The Paradox Wins: The Paradox

of Innovationof Innovation

““The Silicon Valley of The Silicon Valley of today is built less atop the today is built less atop the spires of earlier triumphs spires of earlier triumphs than upon the rubble of than upon the rubble of

earlier debacles.”earlier debacles.”—Newsweek—Newsweek/ Paul / Paul SaffoSaffo

““The secret of fast progress The secret of fast progress is is inefficiencyinefficiency, fast and , fast and

furious and numerous furious and numerous failures.” --failures.” --Kevin KellyKevin Kelly

try.try.Miss.Miss.try.try.

READY.READY.FIRE!FIRE!AIM.AIM.

Ross Perot (vs “Aim! Aim! Aim!” /EDS vs GM/1985)

S.A.S.A.V.V.

Paul Allaire/Xerox:Paul Allaire/Xerox: “We are in a “We are in a brawl with no rules.”brawl with no rules.”TP:TP: “There’s “There’s [literally][literally] only one only one

possible answer … possible answer … SScrew crew AAround round VVigorouslyigorously!!

RAFRAFRFARFA

RFFFA RFFFA … RFFFA RFFFA … FFFFAFFFFA

RAAAAAAAAAAA …RAAAAAAAAAAA …

IID DSS*IID DSS*INID DSS**INID DSS**

*If In Doubt … Do Some S*If In Doubt … Do Some S$%^$%^ (stuff) (stuff)**If Not In Doubt … Do Some S**If Not In Doubt … Do Some S%*&%*&

Life 101: A 40-year ReflectionLife 101: A 40-year ReflectionGo on offense. Go on offense.

Give everybody a shot. Give everybody a shot. Decentralize. Decentralize.

Try a bunch of stuff.Try a bunch of stuff.Make it up as you go along. Make it up as you go along.

Get some stuff wrong.Get some stuff wrong.Laugh a lot.Laugh a lot.

Get some stuff right. Get some stuff right. Become a “success.”Become a “success.”

Extract “lessons learned” or “best practices.”Extract “lessons learned” or “best practices.”Thicken the Book of Rules for Success.Thicken the Book of Rules for Success.

Become evermore serious.Become evermore serious.Enforce the rules to increasingly tight tolerances.Enforce the rules to increasingly tight tolerances.

Go on defense. Go on defense. Install walls. Install walls.

Protect-at-all-costs today’s franchise. Protect-at-all-costs today’s franchise. Centralize. Centralize.

Calcify. Calcify. Install taller walls.Install taller walls.Write more rules.Write more rules.

Become irrelevant and-or die.Become irrelevant and-or die.

No try. No try. No deal.No deal.

““You miss You miss

100100%% of the shots of the shots you never you never

take.”take.” —Wayne—Wayne GretzkyGretzky

““Intelligent people Intelligent people can always come up can always come up

with intelligent with intelligent reasons reasons to do to do nothingnothing.”.” —Scott Simon—Scott Simon

““Andrew Higgins , who built landing craft in Andrew Higgins , who built landing craft in WWII, refused to hire graduates of WWII, refused to hire graduates of

engineering schools. engineering schools. He believed He believed that they only teach that they only teach

you what you you what you can’tcan’t dodo in engineering school.in engineering school. He started off with 20 employees, and by He started off with 20 employees, and by the middle of the war had 30,000 working the middle of the war had 30,000 working

for him. He turned out 20,000 landing craft. for him. He turned out 20,000 landing craft. D.D. Eisenhower told me, ‘Andrew Higgins D.D. Eisenhower told me, ‘Andrew Higgins

won the war for us. He did it without won the war for us. He did it without engineers.’ ”engineers.’ ”

—Stephen Ambrose/—Stephen Ambrose/Fast CompanyFast Company

Try.Try.Try.Try.try.try.

Try.Try.Try.Try.try.try.Try.Try.Try.Try. Try. Try.Try.Try.try.try.Try.Try.Try.Try. Try. Try.Try.Try.try.try.Try.Try.Try.Try. Try. Try.Try.Try.try.try.Try.Try.Try.Try. Try. Try.Try.Try.try.try. Try. Try.Try.Try. Try. Try.Try.Try.try try Try.Try.Try.Try. Try. Try.Try.Try.trytry

Excellence1982: The Bedrock “Eight Basics”

1. 1. A Bias for ActionA Bias for Action2. Close to the Customer2. Close to the Customer3. Autonomy and Entrepreneurship3. Autonomy and Entrepreneurship4. Productivity Through People4. Productivity Through People5. Hands On, Value-Driven5. Hands On, Value-Driven6. Stick to the Knitting6. Stick to the Knitting7. Simple Form, Lean Staff7. Simple Form, Lean Staff8. Simultaneous Loose-Tight Properties” 8. Simultaneous Loose-Tight Properties”

Innovation:Innovation:

GetGet madmad.. Start Start DoingDoing

somethingsomething about it. about it. NowNow..

Focus.Focus.

““We will We will notnot, I , I repeat repeat notnot, ,

pretend to be pretend to be ‘all things to all ‘all things to all people.’”people.’” —CEO, Investec (03.06)

““Miss Anthony has Miss Anthony has one idea and she has one idea and she has

no patience with no patience with anyone who has anyone who has

two.”two.” —ECS*—ECS*

*TP: Why SBA is on the coin? *TP: Why SBA is on the coin?

Ready. Fire! Fire! Aim.Ready. Fire! Fire! Aim.“The Milken model“The Milken model,, in a nutshell, is to in a nutshell, is to

stimulate research by drastically cutting stimulate research by drastically cutting the waiting time for grant money, to the waiting time for grant money, to flood the field with fast cash, to fund flood the field with fast cash, to fund

therapy-driven ideas rather than basic therapy-driven ideas rather than basic science, to hold researchers he funds science, to hold researchers he funds

accountable for results, and to demand accountable for results, and to demand collaboration across disciplines and collaboration across disciplines and among institutions, private industry,among institutions, private industry,

and academia.” and academia.” ——Fortune/The BusinessFortune/The Business,, “The Man Who Changed Medicine” “The Man Who Changed Medicine”

The Benefits of … “FOCUSED EXCELLENCE”

Shouldice/Hernia Repair:

3030 min, 1%1% recurrence.

Avg: 9090 min, 10%-15%10%-15% recurrence.

Source: Complications, Atul Gawande

#1/Quality #1/Quality = More = More

proceduresprocedures [Main Line Lankenau][Main Line Lankenau]

Source: “In Health Care, Cost Isn’t Proof of High Quality,” Source: “In Health Care, Cost Isn’t Proof of High Quality,” NYTNYT, 0614.07 (PA data, 60 hospitals, bypass surgery), 0614.07 (PA data, 60 hospitals, bypass surgery)

Focus: “All Strategy Is Local:“All Strategy Is Local: True competitive advantages True competitive advantages

are harder to find and maintain are harder to find and maintain than people realize.than people realize. The The odds are best in odds are best in

titigghtlhtlyy drawn drawn markets, not bimarkets, not bigg, , sspprawlinrawlingg ones” ones”

—Title/ Bruce Greenwald & Judd Kahn/HBR09.05

Private Equity-financedPrivate Equity-financed Firm, Firm, BestBest *Case *Case

*Focus! Focus! Focus!*Focus! Focus! Focus!*In a [Big] hurry*In a [Big] hurry

*CEO/Top team, “skin*CEO/Top team, “skin in the game” in the game”

*CEO, 100% of time*CEO, 100% of time on the biz on the biz

*Merit! Merit!*Merit! Merit!*Motivated oversight*Motivated oversight

*Worst case: Rape & Pillage

The “New German The “New German Miracle”* = The Miracle”* = The

“Old German “Old German Miracle” = Miracle” =

Mittlestand**Mittlestand***Among other things, #1 in exports*Among other things, #1 in exports

**”No doubt of it, tom [BASF exec/04.07]**”No doubt of it, tom [BASF exec/04.07]

Conscious Conscious measurementmeasurement

Innovation IndexInnovation Index:: How many of your Top 5Top 5 Strategic

Initiatives/Key Projects score 88 or higher or higher [out of 10] on a

“Weird”“Weird”/ / “Profound”“Profound”/ / “Wow”“Wow”//“Game- changer”“Game- changer”

Scale?

personalpersonal

Step #1: Buy a Buy a Mirror!Mirror!

“The The FirstFirst stepstep in a in a ‘dramatic’ ‘dramatic’

‘organizational change ‘organizational change program’ is obvious—program’ is obvious—

dramaticdramatic personal personal changechange!”!” —RG

““To change minds To change minds effectively, leaders make effectively, leaders make

particular use of two particular use of two tools: the tools: the storiesstories that that they tell and the they tell and the liveslives that they lead.”that they lead.” —Howard Gardner, —Howard Gardner,

Changing MindsChanging Minds

““Work Work on me on me

first.”first.” —Kerry Patterson,

Joseph Grenny, Ron McMillan and Al Switzler/Crucial Conversations

““How can a high-level How can a high-level leader like _____ be so out leader like _____ be so out

of touch with the truth of touch with the truth about himself? It’s more about himself? It’s more common than you would common than you would

imagine. In fact, the imagine. In fact, the higher up the ladder a higher up the ladder a leader climbs, the less leader climbs, the less

accurate his self-accurate his self-assessment is likely to assessment is likely to be. be. The The pproblem is an roblem is an acute lack of feedbackacute lack of feedback [especially on people [especially on people

issues].”issues].” —Daniel Goleman (et al.), —Daniel Goleman (et al.), The New LeadersThe New Leaders

Inno64: Inno64: Innovation Innovation StrategiesStrategies & Tactics & Tactics

Parallel universeParallel universe /Exec Ed v res MBA/Exec Ed v res MBAEnd run regnant powers/JKCEnd run regnant powers/JKCFind done deals-practicing mavericks/Stone-ReGoFind done deals-practicing mavericks/Stone-ReGoBell curves2016 in 2006Bell curves2016 in 2006Non-industry benchmarkingNon-industry benchmarkingEverything = PortfolioEverything = PortfolioV.C.s all!V.C.s all!Hot language/Wow-Astonish me-Insanely Hot language/Wow-Astonish me-Insanely great-immortal-Make something greatgreat-immortal-Make something greatLead customers/PW-EmbraerLead customers/PW-EmbraerLead suppliers /Top decile R&DLead suppliers /Top decile R&DWeird alliancesWeird alliancesMottos/Paul Arden (“Whatever You Think Mottos/Paul Arden (“Whatever You Think Think the Opposite”)Think the Opposite”)Hire freaks/Enough weird people?Hire freaks/Enough weird people?Weird Boards!!!Weird Boards!!!

CEO track record of Innovation (nobodyCEO track record of Innovation (nobody starts at 45! Or 35!)starts at 45! Or 35!)System/GE-ImmeltSystem/GE-Immelt““Strategic thrust overlay”Strategic thrust overlay”CalendarCalendarBig Delta easier than SmallBig Delta easier than SmallMBWA with freaks-weirdos/JKCMBWA with freaks-weirdos/JKCMBWA/Boonies’ labsMBWA/Boonies’ labsV.C.-formal/IntelV.C.-formal/IntelAcquire weirdAcquire weirdChildren’s crusadeChildren’s crusadeOld farts crusadeOld farts crusadeGo Global at any sizeGo Global at any sizeStop listening to customers Stop listening to customers Talent!/Unusual sources-Hire innovators-V.C.sTalent!/Unusual sources-Hire innovators-V.C.sEschew giant mergersEschew giant mergers

Remember: scale economies max out earlyRemember: scale economies max out earlyAssisted suicide! (“Built to last” = Chimera-Assisted suicide! (“Built to last” = Chimera-snare-delusion)snare-delusion)Burn your press clippingsBurn your press clippings““Forgetting” “strategy”Forgetting” “strategy”Fire all strategic plannersFire all strategic plannersTempo!Tempo!Final product bears little relation to starting Final product bears little relation to starting notionnotionDesign! Design! Design! (“culture,” not Design! Design! Design! (“culture,” not program)program)All innovation: Pissed-off peopleAll innovation: Pissed-off peopleGut feel rules!Gut feel rules!Focus groups suckFocus groups suckWeird focus groups okayWeird focus groups okayBe-Do philosophyBe-Do philosophy

CelebrationsCelebrationsCulture-little as well as big Inno (“everyone-Culture-little as well as big Inno (“everyone-an-innovator”)an-innovator”)Life = Wow ProjectsLife = Wow ProjectsAcknowledge messiness-pursue serendipity Acknowledge messiness-pursue serendipity (Blitzkrieg-Containers-Science-Jim Utterback)(Blitzkrieg-Containers-Science-Jim Utterback)R.F.A.R.F.A.Culture of executionCulture of execution4/40: decentralization, execution, 4/40: decentralization, execution, accountability, 615AMaccountability, 615AMEVP (S.O.U.B.)/Systems-process “un-design”EVP (S.O.U.B.)/Systems-process “un-design”Diversity for diversity’s sakeDiversity for diversity’s sakeWomen-Women-Women/customers (they Women-Women-Women/customers (they “are the market,” not a “segment”)-leaders“are the market,” not a “segment”)-leadersBoomers-Geezers (“all the money”)Boomers-Geezers (“all the money”)

CRO (Chief Revenue Officer) “culture”/top-CRO (Chief Revenue Officer) “culture”/top-line obsessedline obsessedCIO (Chief INNOVATION Officer)CIO (Chief INNOVATION Officer)LaughterLaughterFacility-space configurationFacility-space configurationExperiments-prototypesExperiments-prototypes““Reward excellent failures. Punish mediocre Reward excellent failures. Punish mediocre successes.”successes.”Bizarrely high incentives (& penalties)Bizarrely high incentives (& penalties)We are what we eat/We are who we hang out We are what we eat/We are who we hang out with with (E.g.: Staff-Consultants-Vendors-Out-sourcing (E.g.: Staff-Consultants-Vendors-Out-sourcing Partners/#, Quality-Innovation Alliance Partners-Partners/#, Quality-Innovation Alliance Partners-Customers-Competitors/who we “benchmark” against -Customers-Competitors/who we “benchmark” against -Strategic Initiatives -Product Portfolio/LineEx v. Leap-Strategic Initiatives -Product Portfolio/LineEx v. Leap-IS/IT Projects-HQ Location-Lunch Mates-Language-IS/IT Projects-HQ Location-Lunch Mates-Language-Board)Board)












Pause: Case Pause: Case StudyStudy

Elizabeth Cady Elizabeth Cady Stanton, Women’s Stanton, Women’s Rights/suffrage, Rights/suffrage,

relentlessness, and relentlessness, and the messy naturethe messy nature

of movements that of movements that rock the worldrock the world

““I have very serious I have very serious objections to being called objections to being called Henry.Henry. Why are the slaves nameless Why are the slaves nameless

unless they take that of their master? Simply unless they take that of their master? Simply because they have no independent existence. because they have no independent existence. They are mere chattels, with no civil or social They are mere chattels, with no civil or social

rights. Even so with women. The custom of rights. Even so with women. The custom of calling women Mrs. John This and Mrs. Tom calling women Mrs. John This and Mrs. Tom That and colored men Sambo and Zip C___ is That and colored men Sambo and Zip C___ is founded on the principal that white men are founded on the principal that white men are the lords of all. I cannot acknowledge this the lords of all. I cannot acknowledge this

principle as just; therefore I cannot bear the principle as just; therefore I cannot bear the name of another.”name of another.” —Elizabeth Cady Stanton—Elizabeth Cady Stanton

Source: Source: In Her Own Right: The Life of In Her Own Right: The Life of Elizabeth Cady Stanton,Elizabeth Cady Stanton, Elisabeth Griffith Elisabeth Griffith

ECS:ECS: “She was “She was defeated again and defeated again and

again and again, but again and again, but she continued the she continued the

struggle with struggle with passionate passionate

impatience.”impatience.”Source: Source: In Her Own Right: The Life of In Her Own Right: The Life of

Elizabeth Cady StantonElizabeth Cady Stanton,, Elisabeth Griffith Elisabeth Griffith

72 72 years, years,

1 1 month, month, 5 days5 days

““She had She had survivedsurvived her her husband, husband, outlivedoutlived most most

of her enemies, and of her enemies, and exhaustedexhausted her allies. Her her allies. Her mind remained alert, her mind remained alert, her mood mood optimisticoptimistic, and her , and her

manner manner combativecombative.”.”Source: “Self Sovereign 1889-1902,” Source: “Self Sovereign 1889-1902,” In Her Own Right: The In Her Own Right: The

Life of Elizabeth Cady Stanton,Life of Elizabeth Cady Stanton, Elisabeth Griffith Elisabeth Griffith (50 years down, 25 to go)(50 years down, 25 to go)

Survived.Survived. (husband)(husband)

outlived.outlived. (enemies)(enemies)

exhausted.exhausted. (allies)(allies)

Optimistic.Optimistic.combativecombative..

Driven by anger!!Driven by anger!! (not “focus groups”) (not “focus groups”)Great “vision,” no “strategic plan”Great “vision,” no “strategic plan”Whoops: conflicting “vision/s”Whoops: conflicting “vision/s”Execution (& vision) (“Dreamers with deadlines”)Execution (& vision) (“Dreamers with deadlines”)OpportunisticOpportunisticInsane optimismInsane optimismFailure after failure; disappointment after disappointmentFailure after failure; disappointment after disappointment (secret to staying power: Stay pissed off!!) (secret to staying power: Stay pissed off!!)Plan B rulesPlan B rulesChanging cadresChanging cadresOpportunistic alliances (here today, gone tomorrow)Opportunistic alliances (here today, gone tomorrow)“The enemy of my enemy is my friend”“The enemy of my enemy is my friend”Creating events and groups to serve a momentary needCreating events and groups to serve a momentary needWarring leaders (Freud-Jung)Warring leaders (Freud-Jung)Petulance (human frailty amidst a Great Struggle)Petulance (human frailty amidst a Great Struggle)Agile re goal w/o sacrificing VisionAgile re goal w/o sacrificing VisionGo underground for long stretchesGo underground for long stretchesPatience (72 years) & impatiencePatience (72 years) & impatienceRelentless!!!!!!!!!!!!!!!Relentless!!!!!!!!!!!!!!! (WSC: (WSC: “Success stems from the “Success stems from the ability to go from failure without losing your enthusiasmability to go from failure without losing your enthusiasm”)”)

Hustle (Seneca Falls, ’48: 5 days)Hustle (Seneca Falls, ’48: 5 days)Fits & startsFits & startsTraitors-desertersTraitors-desertersRadicals (“good”—MLKjr)Radicals (“good”—MLKjr)Radicals (“disruptive”—Stokely)Radicals (“disruptive”—Stokely)ModeratesModeratesMentorsMentorsSchismsSchismsSetbacks (again & again & again—incl lost ground) Setbacks (again & again & again—incl lost ground) (“2-9” = Great record) (“2-9” = Great record)“Get off” on the “politics” (TP: “Life is politics—“Get off” on the “politics” (TP: “Life is politics— the rest is details.”) the rest is details.”)Managing the goal down to get to the doable (but not losingManaging the goal down to get to the doable (but not losing sight of the main game in the process) sight of the main game in the process)Small winsSmall wins“Externalities” (Civil War)“Externalities” (Civil War)Small Band of Sisters (<10; Seneca Falls 1848)Small Band of Sisters (<10; Seneca Falls 1848)Coherent, factual, emotional storyCoherent, factual, emotional storyStory altered at the margin to attract specific adherentsStory altered at the margin to attract specific adherentsStory tellers Story tellers (superb, relentless public communicators)(superb, relentless public communicators)

Elizabeth Cady StantonElizabeth Cady Stanton(more or less) (circa 0331.2007)(more or less) (circa 0331.2007)

Elizabeth Cady StantonElizabeth Cady Stanton(more or less) (circa 0331.2007)(more or less) (circa 0331.2007)

Agility (Plan B)Agility (Plan B)RelentlessRelentlessResilientResilient

Optimistic (Unreasonably so)Optimistic (Unreasonably so)Pissed OffPissed Off

“Visionary”“Visionary”Try It. Try it. Try it. …Try It. Try it. Try it. …

Action > PlansAction > PlansVirusVirus

Small WinsSmall WinsDemos-Heroes-StoriesDemos-Heroes-Stories

Wee Gestures of Decency-ThoughtfulnessWee Gestures of Decency-ThoughtfulnessPolitics >> Science (Get over it!)Politics >> Science (Get over it!)

Think: R.O.I.R. (Networker)Think: R.O.I.R. (Networker)Sales Rules!Sales Rules!

Passion (incl. speaking skills)Passion (incl. speaking skills)Women (Lead Local Change Agents)Women (Lead Local Change Agents)Women Leaders (Woman to Woman)Women Leaders (Woman to Woman)

72/172/1/5/5

Success = 72.1.5 =Success = 72.1.5 =

Elizabeth Cady StantonElizabeth Cady Stanton (1815-1902(1815-1902)), , Lucretia Mott, Martha Wright,Lucretia Mott, Martha Wright,

Mary Ann McClintock, Jane Hunt Mary Ann McClintock, Jane Hunt (07.13.1848/Seneca falls ny) (07.13.1848/Seneca falls ny)

++7272 years, years, 11 month, month, 55 daysdays (08.18.1920/nashville tn) (08.18.1920/nashville tn)

““CHANGE CHANGE

MANAGEMENT.”MANAGEMENT.”












Tom’s “Change Rules”Tom’s “Change Rules”

Cause. (pissed off.)Cause. (pissed off.)

Try it. (S.A.V.)Try it. (S.A.V.)Fail. Forward. Fast.Fail. Forward. Fast.

Quests. Demos. Heroes. Stories.Quests. Demos. Heroes. Stories. Boonies. (Parallel universe.) Boonies. (Parallel universe.)

<12.<12.Just Say No: Normal.Just Say No: Normal.

Attitude>Ability.Attitude>Ability.Wow. “Insanely great.”Wow. “Insanely great.”

Sell! Sell! Sell!Sell! Sell! Sell!Master politics!Master politics!

Tom’s “Change Rules”Tom’s “Change Rules”

Cause. (Pissed off.)Cause. (Pissed off.)RELENTLESS!!!!!!!!!!!!!!!!!!!!!!!!!!!!RELENTLESS!!!!!!!!!!!!!!!!!!!!!!!!!!!!Try it. Try it. (S.A.V.) (r.f.a.) (hustle.)(S.A.V.) (r.f.a.) (hustle.)project. Project. Project.project. Project. Project.Wow! (hot language.)Wow! (hot language.)fun. (growth opportunities.)fun. (growth opportunities.)Sky-high aspirations.Sky-high aspirations.Fail. Forward. Fast.Fail. Forward. Fast.“SMALL WINS.” MOMENTUM. INEVITABILITY.“SMALL WINS.” MOMENTUM. INEVITABILITY.Quests. Demos. Heroes. Stories. Quests. Demos. Heroes. Stories. STATISTICAL INDEPENDENCE. (DIVERSITY.)STATISTICAL INDEPENDENCE. (DIVERSITY.) Boonies. (Parallel universe. Test stuff. Buy WeeCo) Boonies. (Parallel universe. Test stuff. Buy WeeCo)V.C.: Roster = portfolio. everything = portfolio.V.C.: Roster = portfolio. everything = portfolio.Roster = brand yous.Roster = brand yous.PARTNER WITH WIERDOS. (everywhere.)PARTNER WITH WIERDOS. (everywhere.)Diversity @ top.Diversity @ top.Buy a mirror.Buy a mirror.FRUSTRATED “GODFATHER.”FRUSTRATED “GODFATHER.”<12.<12.ALREADY IN PLACE/find ’em.ALREADY IN PLACE/find ’em. JUST Say No: NORMAL. JUST Say No: NORMAL.wikiWorld.wikiWorld.Attitude > Ability.Attitude > Ability.Wow. “Insanely great.”Wow. “Insanely great.”Sell! Sell! Sell! Sell! Sell! Sell! (master-appreciate politics) (r.o.i.r.)(master-appreciate politics) (r.o.i.r.)

““You miss You miss

100100%% of the shots of the shots you never you never

take.”take.” —Wayne—Wayne GretzkyGretzky

End PauseEnd Pause


4/40.4/40.

4/404/40(Decentralization/Execution/Accountability/6:15A.M.)(Decentralization/Execution/Accountability/6:15A.M.)

DECENTRALIZATIONDECENTRALIZATION..

EXECUTION.EXECUTION.ACCOUTABILITY.ACCOUTABILITY.

66:15A.M. :15A.M.

De-cent-De-cent-ral-iz-ral-iz-a-tion!a-tion!

“‘Decentralization’ is not a piece of paper. It’s not me. It’s either in

your heart, or not.”

—Brian Joffe/BIDvest

““If if feels If if feels painful and painful and

scary—that’s scary—that’s realreal delegation” delegation”

—Caspian Woods, small biz owner

The True Logic* of Decentralization:

6 divisions = 6 “tries”6 divisions = 6 “tries”6 divisions = 6 6 divisions = 6 DIFFERENTDIFFERENT leaders = 6 leaders = 6 INDEPENDENTINDEPENDENT

“tries” = Max probability of “tries” = Max probability of “win”“win”

6 divisions = 6 6 divisions = 6 veryvery DIFFERENT DIFFERENT leaders = 6 leaders = 6 veryvery INDEPENDENT INDEPENDENT

“tries” = Max probability of “tries” = Max probability of ““far outfar out”/””/”3-sigma3-sigma”” “win” “win”

*“Driver”: Law of Large #s

“Best practice” = Best practice” = ZEROZERO Standard Standard

DeviationDeviation

Enemy Enemy #1#1

I.C.D.I.C.D.Note 1:Note 1: Inherent/Inevitable/Inherent/Inevitable/Immutable Centralist DriftImmutable Centralist Drift

Note 2: Jim Burke’s 1-word vocabulary: “No.”Note 2: Jim Burke’s 1-word vocabulary: “No.”

No problems = No problems = No progress.No progress.

[Period.][Period.]

Decentralization Decentralization vs Centralization vs Centralization

= “That’s = “That’s AllAll There Is”There Is” (from (from

childrearing 101 to the childrearing 101 to the Federalist PapersFederalist Papers to Org.2007)to Org.2007)

The Earls & Dukes vs King The Earls & Dukes vs King John John (The Magna Carta)(The Magna Carta)

The Continental CongressThe Continental Congress vs the Constitution vs the Constitution Jefferson vs Adams Jefferson vs Adams

Sloan vs FordSloan vs FordGE vs All comersGE vs All comers

HP vs HP HP vs HP Peters vs HammerPeters vs Hammer

Mintzberg vs PorterMintzberg vs Porter

Ex-e-Ex-e-cu-cu-

tion!tion!

““ExecutionExecution is is thethe jobjob of the of the

businessbusiness leaderleader.”.” —Larry Bossidy—Larry Bossidy & Ram

Charan/ Execution: The Discipline of Getting Things Done

“Execution is a

systematic systematic processprocess of rigorously

discussing hows and whats, tenaciously following through, and

ensuring accountability.” —Larry Bossidy & Ram Charan/ Execution:

The Discipline of Getting Things Done

(1)(1) sum of Projects sum of Projects == Goal (“Vision”) Goal (“Vision”)

(2)(2) sum of sum of Milestones =Milestones = project project(3)(3) rapid Review + rapid Review + Truth-telling = Truth-telling = accountability accountability

““Costco figured out Costco figured out the the bigbig, , simplesimple things things

and and executedexecuted with with total total fanaticismfanaticism.”.”

—Charles Munger, Berkshire Hathaway

.0004.0004**

*4/10,000*4/10,000

“Never forget Never forget implementationimplementation , , boys. boys. In our work, it’s what I In our work, it’s what I

call the call the ‘‘last 98 last 98 percentpercent’’ of the client of the client puzzle.”puzzle.” —Al McDonald, former Managing

Director, McKinsey & Co, to a project team that included TP







Ac-count-Ac-count-a-bil-ity!a-bil-ity!

CF: CF: 30%30% (no (no salesfolk)salesfolk)

MH: MH: 80%80% (salesfolk)(salesfolk)

“Monkeys Monkeys can’t live in can’t live in

midair!”midair!” —Bob Townsend—Bob Townsend

““GE has set a GE has set a standard of candor. standard of candor.

… There is no … There is no puffery. … puffery. … There There isn’t an ounce of isn’t an ounce of

denial in the placedenial in the place.”.” —Kevin Sharer, CEO Amgen,

on the “GE mystique” (Fortune)

Walter ReedWalter ReedSECDEFSECDEF

6:15A.M6:15A.M..

““But it’s But it’s only only

2am!”2am!”

““Where are you going? … But it’s Where are you going? … But it’s only 2am. … You see, you can live only 2am. … You see, you can live your life at 120 miles an hour, and your life at 120 miles an hour, and that’s pretty impressive. But it’s that’s pretty impressive. But it’s not good enough. Unless you live not good enough. Unless you live

at 150 miles an hour, the world will at 150 miles an hour, the world will pass you by,” pass you by,” HRH Prince Alwaleed* HRH Prince Alwaleed*

*1 day: 573 people met separately, 200 phone calls, 100 text messages, etc*1 day: 573 people met separately, 200 phone calls, 100 text messages, etc

Source: “Prince Alwaleed, Inside the private world of the Middle East’sSource: “Prince Alwaleed, Inside the private world of the Middle East’s most powerful investor” cover story, most powerful investor” cover story, The BusinessThe Business, 0519.07, 0519.07

DECENTRALIZATIONDECENTRALIZATION..

EXECUTION.EXECUTION.ACCOUTABILITY.ACCOUTABILITY.

2a.m.2a.m.

**Planetree! Commerce! Cirque!Planetree! Commerce! Cirque! (Pianos! Dog biscuits!) (Pianos! Dog biscuits!) *Jerry Garcia … or bust (“only ones*Jerry Garcia … or bust (“only ones who do what we do,” “insanelywho do what we do,” “insanely great,” “radically thrilling,”great,” “radically thrilling,” “ “gaspworthy.”) gaspworthy.”) *Think/Obsess Wegmans! (Staff: #1;*Think/Obsess Wegmans! (Staff: #1; the the Manager’s Handbook ofManager’s Handbook of Decencies;Decencies; “Kindness is free.”) “Kindness is free.”)*Leaders serve. (Leader as host.)*Leaders serve. (Leader as host.)*”Wow” is free, too.*”Wow” is free, too.*Hire nut cases (the “O for 800” rule*Hire nut cases (the “O for 800” rule holds for DDB)holds for DDB)

Pause:Pause:“The Rules”“The Rules”

Tom Peters’ X25*Tom Peters’ X25*

EXCELLENCEXCELLENCE. ALWAYS.E. ALWAYS.The rules.The rules.

**In Search of ExcellenceIn Search of Excellence 1982-2007 1982-2007

““It”It”

CauseCause (worthy of commitment)(worthy of commitment)

SpaceSpace (room for/encouragement(room for/encouragement

for initiative) for initiative)

DecencyDecency (respect, (respect, humane)humane)

It+It+


SpaceSpace (room for/encouragement(room for/encouragement for initiative-adventures) for initiative-adventures)

DecencyDecency (respect, grace,(respect, grace, integrity, humane) integrity, humane)

service service (worthy of our clients’ & (worthy of our clients’ & extended extended family’s continuing custom) family’s continuing custom)

excellenceexcellence (period) (period)


SpaceSpace (room for/encouragement for initiative-(room for/encouragement for initiative-adventures) adventures)

DecencyDecency (respect, grace, integrity, humane)(respect, grace, integrity, humane)

service service (worthy of our clients’ & extended (worthy of our clients’ & extended family’s continuing custom) family’s continuing custom)

excellenceexcellence (period) (period)

servant servant leadership leadership

CauseCause

SpaceSpace

DecencyDecency

serviceserviceexcellenceexcellence

servant leadership servant leadership

Alt. “It.”Alt. “It.”

Hire Great PeopleHire Great People (Resilient, Passionate)(Resilient, Passionate)

Try a Lot of StuffTry a Lot of Stuff (S.A.V./R.F.A.)(S.A.V./R.F.A.)

all “wow” all the timeall “wow” all the timeEnjoy It While It LastsEnjoy It While It Lasts

The Rules.The Rules.

pursue a mission that pursue a mission that rocksrocks the world the world (Pharmaceuticals, (Pharmaceuticals, Moldy basements)Moldy basements)

Hire Hire awesomeawesome//weirdweird People for People for 100%100% of jobs of jobs (Resilient, (Resilient, Passionate) (Wegmans) (Women RULE!)Passionate) (Wegmans) (Women RULE!)

give ’em lots of room to give ’em lots of room to experimentexperiment, , failfail, , growgrowmake “make “respectrespect” “” “decencydecency” “” “integrityintegrity” our watchwords” our watchwordstrytry aa LotLot of Stuff, fast of Stuff, fast tempotempo (S.A.V./Screw Around Vigorously, (S.A.V./Screw Around Vigorously, R.F.A./Ready. Fire. Aim.)R.F.A./Ready. Fire. Aim.)

Emphasize Emphasize revenuerevenue (Organic growth, Sales/“Top line” rules)(Organic growth, Sales/“Top line” rules)

have have funfun/exude /exude joyjoydemand demand excellenceexcellence/Make/Make accountability accountability instinctiveinstinctive (“Insane” standards for our mates’ and community’s sake)(“Insane” standards for our mates’ and community’s sake)

never, never forget the “never, never forget the “itit” ” (It’s the PRODUCT, Stupid.) (25!)(It’s the PRODUCT, Stupid.) (25!)

be “be “of of [‘gaspworthy’] [‘gaspworthy’] serviceservice” ” (Cirque du Soleil is our (Cirque du Soleil is our standard— “even” in finance.) (My customer is my partner.) standard— “even” in finance.) (My customer is my partner.) (Remember “She”; remember “Me.”) (“Servant”/“Host” Leadership)(Remember “She”; remember “Me.”) (“Servant”/“Host” Leadership)

Have effective/imaginative/minimalist Have effective/imaginative/minimalist infrastructureinfrastructure (K.I.S.S./Keep It Simple, Stupid) (Systems/No bull: beauty, grace, elegance) (K.I.S.S./Keep It Simple, Stupid) (Systems/No bull: beauty, grace, elegance) rere--imagineimagine as “routine” as “routine” ” ”

enjoy It enjoy It WhileWhile ItIt LastsLasts

pursue a mission that pursue a mission that rocksrocks the world the world (Pharmaceuticals, Moldy basements)(Pharmaceuticals, Moldy basements) Hire Hire awesomeawesome//weirdweird People for People for 100%100% of jobs of jobs (Resilient, Passionate) (Wegmans) (Resilient, Passionate) (Wegmans)

give ’em lots of room to give ’em lots of room to experimentexperiment, , failfail, , growgrowmake “make “respectrespect” “” “decencydecency” “” “integrityintegrity” our watchwords” our watchwordsLeaders “Serve.”Leaders “Serve.” (“Servant”/“Host” Leadership) (“Servant”/“Host” Leadership)trytry aa LotLot of Stuff, fast of Stuff, fast tempotempo (S.A.V./Screw Around Vigorously, (S.A.V./Screw Around Vigorously, R.F.A./Ready. Fire. Aim.)R.F.A./Ready. Fire. Aim.)Emphasize Emphasize revenuerevenue (Organic growth, Sales/“Top line” rules)(Organic growth, Sales/“Top line” rules)have have funfun/exude /exude joyjoydemand demand excellenceexcellence/Make/Make accountability accountability instinctiveinstinctive (“Insane” standards for our mates’ and community’s sake)(“Insane” standards for our mates’ and community’s sake)It’s all about Women!It’s all about Women!

never, never forget the “never, never forget the “itit” ” (It’s the PRODUCT, Stupid.) (It’s the PRODUCT, Stupid.) 25! 25! (Go, Howard!) (Conrad says, “Don’t for the shower curtain.)(Go, Howard!) (Conrad says, “Don’t for the shower curtain.)be “be “of of [‘gaspworthy’] [‘gaspworthy’] serviceservice” ” (Cirque du Soleil is our standard—”even” in (Cirque du Soleil is our standard—”even” in finance.) (My customer is my partner.) (Remember “She”; remember “Me.”) finance.) (My customer is my partner.) (Remember “She”; remember “Me.”) Create effective/imaginative/minimalist Create effective/imaginative/minimalist infrastructureinfrastructure (K.I.S.S./Keep It Simple, Stupid; (K.I.S.S./Keep It Simple, Stupid; RED RED BUTTON on the terminal)BUTTON on the terminal)rere--imagineimagine as “routine” as “routine” (Forget > Remember) (Forget > Remember) enjoy It enjoy It WhileWhile ItIt LastsLasts

End Pause:End Pause:“The Rules”“The Rules”

Excellence: The SE22Excellence: The SE22::

ORIGINS OF ORIGINS OF SUSTAINABLE SUSTAINABLE

ENTREPRENEURSHIENTREPRENEURSHIPP

SE22/Origins of Sustainable Entrepreneurship1. Genetically disposed to Innovations that upset apple carts 1. Genetically disposed to Innovations that upset apple carts (3M, Apple, (3M, Apple,

FedEx, Virgin, BMW, Sony, Nike, Schwab, Starbucks, Oracle, Sun,FedEx, Virgin, BMW, Sony, Nike, Schwab, Starbucks, Oracle, Sun, Fox, Stanford University, MIT)Fox, Stanford University, MIT)2. Perpetually determined to outdo oneself, even to 2. Perpetually determined to outdo oneself, even to the detriment of today’s $$$ winners the detriment of today’s $$$ winners (Apple, Cirque du Soleil, Nokia, FedEx)(Apple, Cirque du Soleil, Nokia, FedEx)3. Treat History as the Enemy 3. Treat History as the Enemy (GE)(GE)4. Love the Great Leap/Enjoy the Hunt 4. Love the Great Leap/Enjoy the Hunt (Apple, Oracle, Intel, Nokia, Sony)(Apple, Oracle, Intel, Nokia, Sony)5. Use “Strategic Thrust Overlays” to Attack Monster Problems 5. Use “Strategic Thrust Overlays” to Attack Monster Problems (Sysco, (Sysco,

GSK, GE, Microsoft)GSK, GE, Microsoft)6. Establish a “Be on the COOL Team” Ethos. 6. Establish a “Be on the COOL Team” Ethos. (Most PSFs, Microsoft)(Most PSFs, Microsoft)7. Encourage Vigorous Dissent/Genetically “Noisy” 7. Encourage Vigorous Dissent/Genetically “Noisy” (Intel, Apple, (Intel, Apple, Microsoft, CitiGroup, PepsiCo)Microsoft, CitiGroup, PepsiCo)

8. 8. ““Culturally” as well as Culturally” as well as organizationally Decentralizedorganizationally Decentralized

(GE, J&J, Omnicom)(GE, J&J, Omnicom)9. Multi-entrepreneurship/Many Independent-minded Stars 9. Multi-entrepreneurship/Many Independent-minded Stars (GE,(GE, PepsiCo)PepsiCo)

HP’s Big “Duh”!

Decentralize Decentralize ($90B)($90B)

Undo Undo “Matrix”“Matrix”AccountabilityAccountability

Source: “HP Says Goodbye To Drama”/BW/09.05/re Mark Hurd’s first 5 months

CF: CF: 30%30% (no (no salesfolk)salesfolk)

MH: MH: 80%80% (salesfolk)(salesfolk)

“No Need for Economies of Scale: Illinois Tool Revs Up Innovation by Keeping

Its 655 Units SeparateSeparate and FocusedFocused”

Source: Headline, BW, 1031.05 (“commodity” producer; R&D = 1%; Top 100 patent recipient—66th in ’04) ($12B rev in ’04; CEO David Speer: focus, lean, customer intimacy,

entrepreneurial, employee participation)

GSK:GSK: 7 “CEDDs” 7 “CEDDs” … Centers of … Centers of

Excellence for Excellence for Drug DiscoveryDrug Discovery

DePuySpine/J&J*

70/370/3game-changers!game-changers!

*Still decentralized after all these years!

TP “Lessons Learned”

Innovation = DisDisInnovation = DisDis (Disciplined Disorganization)Luck is a very good thing.* **

(*More “lessons” later: E.g., If you hire a bunch of disciplined weirdoes and (*More “lessons” later: E.g., If you hire a bunch of disciplined weirdoes and try a lot of weird stuff, the odds of getting lucky go up remarkably) try a lot of weird stuff, the odds of getting lucky go up remarkably)

(**Career success depends on convincing others that you knew what the (**Career success depends on convincing others that you knew what the hell you were doing all along. Good news: Say it long enough and you will hell you were doing all along. Good news: Say it long enough and you will believe it. Great news: Keep saying it and you, too, can become a “guru.”)believe it. Great news: Keep saying it and you, too, can become a “guru.”)

SE22/Origins of Sustainable Entrepreneurship

10. Keep decentralizing—tireless in pursuit of wiping 10. Keep decentralizing—tireless in pursuit of wiping outout Centralizing Tendencies Centralizing Tendencies (J&J, Virgin)(J&J, Virgin)11. Scour the world for Ingenious Alliance Partners— 11. Scour the world for Ingenious Alliance Partners— especially exciting start-ups especially exciting start-ups (Pfizer)(Pfizer)12. Acquire for Innovation, not Market Share 12. Acquire for Innovation, not Market Share (Cisco, GE)(Cisco, GE)13. Don’t overdo “pursuit of synergy” 13. Don’t overdo “pursuit of synergy” (GE, J&J, Time Warner)(GE, J&J, Time Warner)14. Execution/Action Bias: Just do it … don’t obsess on14. Execution/Action Bias: Just do it … don’t obsess on how it “fits the business model.”how it “fits the business model.” (3M, J & J) (3M, J & J)15. Find and Encourage and Promote Strong-willed/15. Find and Encourage and Promote Strong-willed/ Hyper-smart/Independent people Hyper-smart/Independent people (GE, PepsiCo, Microsoft)(GE, PepsiCo, Microsoft)16. Support Internal Entrepreneurs16. Support Internal Entrepreneurs (3M, Microsoft) (3M, Microsoft)17. Ferret out Talent anywhere/“No limits” approach to17. Ferret out Talent anywhere/“No limits” approach to retaining top talent retaining top talent (Virgin, GE, PepsiCo(Virgin, GE, PepsiCo))

SE22/Origins of Sustainable Entrepreneurship18. Unmistakable Results & Accountability focus from18. Unmistakable Results & Accountability focus from the get-go to the grave the get-go to the grave (GE, New York Yankees, PepsiCo)(GE, New York Yankees, PepsiCo)

19. 19. Up or OutUp or Out (GE, McKinsey, big consultancies and law (GE, McKinsey, big consultancies and law firms and ad agencies and movie studios in general)firms and ad agencies and movie studios in general)20. Competitive to a fault! 20. Competitive to a fault! (GE, New York Yankees, News(GE, New York Yankees, News Corp/Fox, PepsiCo)Corp/Fox, PepsiCo)21. “Bi-polar” Top Team, with “Unglued” Innovator #1,21. “Bi-polar” Top Team, with “Unglued” Innovator #1, powerful Control Freak #2 powerful Control Freak #2 (Oracle, Virgin) (Watch out when(Oracle, Virgin) (Watch out when #2 is missing: Enron)#2 is missing: Enron)22. Masters of Loose-Tight/Hard-nosed about a very few22. Masters of Loose-Tight/Hard-nosed about a very few Core Values, Open-minded about everything elseCore Values, Open-minded about everything else (Virgin)(Virgin)

““HOW THE COAST HOW THE COAST GUARD GETS IT GUARD GETS IT RIGHT”RIGHT” —Headline, —Headline, TimeTime, 10.31.2005, 10.31.2005

**AutonomyAutonomy**FlexibilityFlexibility**“Perhaps the most important“Perhaps the most important distinction of the Coast distinction of the Coast Guard is that it trusts itself” Guard is that it trusts itself”

Itinerant. Itinerant. Potential. Potential. Machines.Machines.

TALENT POOL TO DIE FOR.TALENT POOL TO DIE FOR. Youthful. Youthful. Insanely energetic. Value creativity. Risk Insanely energetic. Value creativity. Risk taking is routine.taking is routine. Failing is normal … if Failing is normal … if you’re stretching. Want to “make their you’re stretching. Want to “make their

bones” in “the revolution.” Love the new bones” in “the revolution.” Love the new technologies. Well rewarded. technologies. Well rewarded. Don’t plan Don’t plan

to be around 10 years from now.to be around 10 years from now.

TALENT POOL PLUS.TALENT POOL PLUS. Seek out and Seek out and work with “world’s best” as needed work with “world’s best” as needed

(it’s often needed). (it’s often needed). “We aim to change “We aim to change the world, and we need gifted the world, and we need gifted

colleagues—who well may not be on colleagues—who well may not be on our payroll.”our payroll.”

BRASSY-BUT-GROUNDED-BRASSY-BUT-GROUNDED-LEADERSHIP.LEADERSHIP. Say “I don’t know”—and Say “I don’t know”—and

then unleash the TALENT. Have a vision to then unleash the TALENT. Have a vision to be DRAMATICALLY DIFFERENT—but don’t be DRAMATICALLY DIFFERENT—but don’t

expect the co. to be around forever. Will expect the co. to be around forever. Will scrap pet projects, and change course 180 scrap pet projects, and change course 180

degrees—and take a big write-off in the degrees—and take a big write-off in the process. process. NO REGRETS FROM SCREW-UPS NO REGRETS FROM SCREW-UPS

WHOSE TIME HAS NOT-YET-COME. WHOSE TIME HAS NOT-YET-COME. GREAT REGRETS AT TIME & $$$GREAT REGRETS AT TIME & $$$

WASTED ON “ME TOO” PRODUCTS WASTED ON “ME TOO” PRODUCTS AND PROJECTS. AND PROJECTS.

BRASSY-BUT-GROUNDED-LEADERSHIP. BRASSY-BUT-GROUNDED-LEADERSHIP. (Cont.)(Cont.) “Visionary” leaders matched by leaders “Visionary” leaders matched by leaders

with shrewd business sense: “HOW DO WE with shrewd business sense: “HOW DO WE TURN A PROFIT ON THIS GORGEOUS IDEA?” TURN A PROFIT ON THIS GORGEOUS IDEA?” Appreciate “market creation” as much as or Appreciate “market creation” as much as or

more than “market share growth.” more than “market share growth.” ARE ARE INSANELY AWARE THAT MARKET LEADERS ARE INSANELY AWARE THAT MARKET LEADERS ARE ALWAYS IN PRECARIOUS POSITIONS, AND THAT ALWAYS IN PRECARIOUS POSITIONS, AND THAT

MARKET SHARE WILL NOT PROTECT US, IN MARKET SHARE WILL NOT PROTECT US, IN TODAY’S VOLATILE WORLD, FROM THE NEXT TODAY’S VOLATILE WORLD, FROM THE NEXT KILLER IDEA AND KILLER ENTREPRENEUR.KILLER IDEA AND KILLER ENTREPRENEUR.

(Gates. Ellison. Venter. McNealy. Walton. Case. (Gates. Ellison. Venter. McNealy. Walton. Case. Etc.)Etc.)

ALLIANCE MANIACS.ALLIANCE MANIACS. Don’t assume Don’t assume that “the best resides within.” that “the best resides within.” WORK WORK WITH A SHIFTING ARRAY OF STATE-WITH A SHIFTING ARRAY OF STATE-OF-THE-ART PARTNERS FROM ONE OF-THE-ART PARTNERS FROM ONE

END OF THE “SUPPLY CHAIN” TO END OF THE “SUPPLY CHAIN” TO THE OTHERTHE OTHER. Including vendors and . Including vendors and consultants and … who especially … consultants and … who especially …

PIONEERING CUSTOMERS … will PIONEERING CUSTOMERS … will “pull us into the future.”“pull us into the future.”

TECHNOLOGY-NETWORK TECHNOLOGY-NETWORK FANATICS.FANATICS. Run the whole-damn-Run the whole-damn-

company, and relations with all outsiders, company, and relations with all outsiders, on the Internet … at Internet speed. on the Internet … at Internet speed.

Reluctant to work with those who don’t Reluctant to work with those who don’t share this (radical) vision.share this (radical) vision.

““Crazy Times Call Crazy Times Call for Crazy for Crazy

Organizations”Organizations” —Subtitle, The Tom Peters Seminar (1993)

Pause …Pause …

Tom Peters’Tom Peters’

Action Action Chronicles.Chronicles.

EXCELLENCE. EXCELLENCE. ALWAYS.ALWAYS.

Think-Do.ACTION.0329.2007Think-Do.ACTION.0329.2007

The The (necessary)(necessary) war on linearity: war on linearity: One engineer’s One engineer’s

(unusual)(unusual) life’s work. life’s work.

tom peterstom peters

““Apparently our society, Apparently our society, not unlike the Greeks with not unlike the Greeks with their Delphic oracles, takes their Delphic oracles, takes great comfort in believing great comfort in believing that very talented ‘seers’ that very talented ‘seers’ removed from the hurly-removed from the hurly-burly world of reality can burly world of reality can

tell foretell coming tell foretell coming events.”events.” —Len Sayles/Columbia (from Henry

Mintzberg, The Rise and Fall of Strategic Planning)

“Nothing is more

dangerous in war than

theoreticians.”

—Marshall Petain (John Mosier, The Blitzkrieg Myth, “War as Pseudoscience: 1920-1939”)

““This book is about luck disguised and This book is about luck disguised and perceived as non-luck (that is, skills) perceived as non-luck (that is, skills)

and more generally randomness and more generally randomness disguised and perceived as non-disguised and perceived as non-

randomness. It manifests itself in the randomness. It manifests itself in the shape of the lucky fool, defined as a shape of the lucky fool, defined as a

person who benefited from a person who benefited from a disproportionate share of luck but disproportionate share of luck but

attributed his success to some other, attributed his success to some other, generally precise reason.”generally precise reason.” — —Fooled by Randomness: The Hidden Role of Chance in Life and

the Markets, by Nassim Nicholas Taleb

EXEXCELLE CELLE ALWALWAYSAYS..

End End PausePause

EXEXCELLE CELLE ALWALWAYSAYS..

End.End.PART PART TWOTWO..

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Part seven Extended Talent & Leadership 0618.07