Title

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

that it is not a that it is not a messmess],], you need you need Microsoft fonts:Microsoft fonts:

“Showcard Gothic,”“Showcard Gothic,” “Ravie,”“Ravie,” “Chiller”“Chiller”

andand “Verdana”“Verdana”

Tom Peters’ X25*Tom Peters’ X25*

EXCELLENCEXCELLENCE. ALWAYS.E. ALWAYS.

Thirteen Guru GaffesThirteen Guru Gaffes28 February 200828 February 2008

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

Title.Title.

Slides at …

tompeters.comtompeters.com

Tom Peters’ X25*Tom Peters’ X25*

EXCELLENCE. EXCELLENCE. ALWAYS.ALWAYS.Maybe.Maybe.

ALTERNATE Master/GaffesALTERNATE Master/Gaffes12 November 200712 November 2007

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

Better title? The “excellence” bit and the Better title? The “excellence” bit and the “always” bit are fine; it’s the analysis “always” bit are fine; it’s the analysis

thereof I wish to call into question here..thereof I wish to call into question here..

The “guru The “guru GaffeGaffess” “hall of ” “hall of

shame”: the shame”: the “Over-rated “Over-rated

Eight”!Eight”!

The “Over-The “Over-rated rated

Eight”!Eight”!

The “Over-rated Eight”:The “Over-rated Eight”:

Big companies!Public companies! “Cool” industries!

Stability!Famous CEOs!“Hard” stuff!“Success”!

Plans!

These are a few of the These are a few of the implicit or explicit things thatimplicit or explicit things that most all “gurus” most all “gurus” [incl. yrs.[incl. yrs.

truly much of the time] truly much of the time] focus on. focus on. That are mostly or wholly wrong.That are mostly or wholly wrong.

#1#1

Over-rated:Over-rated:

Big companies

!Public companies! “Cool” industries!


Plans!

It seems that all “we” talkIt seems that all “we” talk about are Big Cos. about are Big Cos.

Too big to Too big to manage?manage?

Citi/Chuck Citi/Chuck Prince?Prince?

That’s the emergent conclusionThat’s the emergent conclusion from Citi’s woes. (Yikes: Some from Citi’s woes. (Yikes: Some are muttering the same thing are muttering the same thing

about … GE.) about … GE.)

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

You get You get worse.”worse.”

““The Bigger They The Bigger They Are: Toyota Takes Are: Toyota Takes

a Tumble on a Tumble on Quality”Quality”

—headline, —headline, International HeraldInternational Herald, 1103-4.07, 1103-4.07

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

““Biters Bit: How Web Biters Bit: How Web Giants Are Losing Giants Are Losing

Business as Startups Business as Startups Scurry In.”Scurry In.” ——FTFT, 0725.07 (“The , 0725.07 (“The

disruptive innovators of the first disruptive innovators of the first Silicon Valley boom may be failing to Silicon Valley boom may be failing to keep up with a new wave of arrivals.”)keep up with a new wave of arrivals.”)

Kovacevich ran Wells Fargo brilliantly—Kovacevich ran Wells Fargo brilliantly—his other passion was a focus on revenue his other passion was a focus on revenue

growth rather than a diet of cutting, growth rather than a diet of cutting, cutting, cutting. (Reminds me of the cutting, cutting. (Reminds me of the subtitle to my 1997 book, subtitle to my 1997 book, Circle of Circle of

InnovationInnovation: “You can’t shrink your way: “You can’t shrink your way to greatness.) to greatness.)

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

no 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, 0329.07, on 0329.07, 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 a resounding ‘no.” —Citigroup analysis, 2006) —Citigroup analysis, 2006)

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

expectations, Leon Cooperman, former cochairman of Goldman Sachs’

Investment Policy Committee,

answered: I’m sure there are success stories out

there, but at this moment I draw a

blank.” —Mark Sirower, The Synergy Trap

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

money, but I’m not sure we’re actually innovating. … Our challenge is

to take nanotechnology into the future, to do

personalized medicine …” —Jeff Immelt/2005

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

“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

“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

“Forbes100” from 1917 to 1987: 3939 members members

of the Class of ’17 were alive in ’87; 18 in ’87 of the Class of ’17 were alive in ’87; 18 in ’87 F100; 18 F100 “survivors” significantly F100; 18 F100 “survivors” significantly

underunderpperformederformed the market; the market;

just just 22 (2%), (2%), GEGE & & KodakKodak, ,

outoutpperformederformed the market from the market from 1917 to 1987. 1917 to 1987.

S&P 500 from 1957 to 1997: 7474 members of the Class of ’57 were alive

in ’97; 1212 (2.4%) of 500 outperformed the market from 1957 to 1997.

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

““Mr. Foster and his McKinsey Mr. Foster and his McKinsey colleagues collected detailed colleagues collected detailed

performance data stretching back performance data stretching back 4040 years for years for 1,0001,000 U.S. companies. U.S. companies. TheTheyy

found that found that none none of the of the

lonlongg-term survivors mana-term survivors managged to ed to outoutpperform the market. Worse, the erform the market. Worse, the lonlongger comer comppanies had been in the anies had been in the

database, the worse thedatabase, the worse theyy did did.” .” —Financial —Financial

TimesTimes

““It’s just a fact:It’s just a fact:

Survivors Survivors underperform.”underperform.”

—Dick Foster—Dick Foster

““Hope For Hope For Breakup Breakup

Advocates”Advocates” —headline, FT, —headline, FT,

1105.07, re Citigroup1105.07, re Citigroup

““Jeff Bewkes, the Jeff Bewkes, the Next Boss of Time-Next Boss of Time-Warner, Is Likely to Warner, Is Likely to

Break Up the Break Up the Company”Company” —headline, —headline, EconomistEconomist, ,

1110.071110.07

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

None.None.

““Data drawn from the real world Data drawn from the real world attest to a fact that is beyond attest to a fact that is beyond

our control:our control: Everything in existence tends to deteriorate.”

—Norberto Odebrecht, —Norberto Odebrecht, Education Through WorkEducation Through Work

Odebrecht is a big (heavy industry) Odebrecht is a big (heavy industry) Brazilian engineering company.Brazilian engineering company.

Welcome to the “Club of Shattered Dreams”:

Of Korea’s Top 100Top 100 companies

in 1955, only 77 were still on the list in 2004. The 1997 crisis

“destroyed halfhalf of Korea’s

3030 largest conglomerates.”

Source: “KET Issue Report,” Kim Jong Nyun (14.05.2005)

Korea, too.Korea, too.

““Everything in existence tends Everything in existence tends to deteriorate”/ “Buy a very to deteriorate”/ “Buy a very

large one and just wait”large one and just wait”

= License = License ((MandateMandate!)!) for for RadicalRadical

Action Action

The Big Co situation is nighThe Big Co situation is nigh on hopeless—so you might on hopeless—so you might as well “go for it.” You’ve as well “go for it.” You’ve

nothing to lose.nothing to lose.

#1 Exporter?#1 Exporter?

#4 Japan#4 Japan

#4 Japan#4 Japan#2T China#2T China#2T USA#2T USA

#4 Japan#4 Japan#2T china#2T china#2t USA#2t USA

#1 #1 GermanyGermany

With just 80-million people, With just 80-million people, insanely high wages.insanely high wages.

Reason?Reason?

Daimler?Daimler?BASF?BASF?

Siemens?Siemens?Commerzbank?Commerzbank?

Reason!!!Reason!!!

MittelstandMittelstand

Middle-sized stars. (Of long Middle-sized stars. (Of long standing.*) Global masters. High-standing.*) Global masters. High-

value niches.value niches.

*The “German secret”*The “German secret”

Or …Or … Goldmann Goldmann ProduktionProduktion

ss(11/50%/$5M/“dip and coat,” expensive (11/50%/$5M/“dip and coat,” expensive

pigments vs “through coloring,” fades Bekro pigments vs “through coloring,” fades Bekro Chemie)Chemie)

When I studied them, When I studied them, Goldmann had but 11 people, most Goldmann had but 11 people, most

PhDs, and a 50% world market share!PhDs, and a 50% world market share!

GEOBRA/PlaymobilGEOBRA/PlaymobilTrumpfTrumpf

RationalRationalGoldmann ProduktionsGoldmann Produktions

BavariaBavaria: Mittelstand within Mittelstand: Mittelstand within Mittelstand

“Place to start over” post-WWII“Place to start over” post-WWII13 million13 million

66thth in EU if stand-alone in EU if stand-alone (CA #5)

4% unemployment4% unemploymentMunich government pro-businessMunich government pro-business

30 universities 30 universities (3 of 3 leading in R&D, with Baden-(3 of 3 leading in R&D, with Baden-Wuerttemberg)Wuerttemberg)

50% German patents 50% German patents (with Baden-Wuerttemberg)(with Baden-Wuerttemberg)

SMEs & Big CosSMEs & Big Cos“Hot” finance communities“Hot” finance communities

“lion’s share” of German startups“lion’s share” of German startupsMedia startups Media startups (SF: tech + media)

Source: Source: CNBC European BusinessCNBC European Business, November 2007, November 2007

City-states: Global Mittelstand?City-states: Global Mittelstand?

AthensAthensVeniceVenice

FlorenceFlorenceRomeRome

AntwerpAntwerpAmsterdamAmsterdam

LondonLondonNew YorkNew YorkSingaporeSingaporeHong KongHong KongSingaporeSingapore

Silicon Valley (California)Silicon Valley (California)Dubai (et al)Dubai (et al)

Principal Mittelstand companies I Principal Mittelstand companies I studied—I may be the only studied—I may be the only

American who’s made a serious American who’s made a serious study of the Mittelstand??study of the Mittelstand??

““Skunk Camp” #1:Skunk Camp” #1:American “Mittelstand” American “Mittelstand” (A.W.O.L.: F500)

Frank Perdue/ Frank Perdue/ Perdue FarmsPerdue Farms (“It takes a tough man to make a tender chicken.”)(“It takes a tough man to make a tender chicken.”)

Tom Malone/ Tom Malone/ Milliken and CompanyMilliken and CompanyDon Burr/ Don Burr/ People ExpressPeople Express

Tom Monaghan/ Tom Monaghan/ Domino’s PizzaDomino’s PizzaStew Leonard/ Stew Leonard/ Stew Leonard’sStew Leonard’s

Hal Rosenbluth/ Hal Rosenbluth/ Rosenbluth Rosenbluth InternationalInternational

John Fisher/ John Fisher/ Bank One of ColumbusBank One of ColumbusJohn McConnell/ John McConnell/ Worthington IndustriesWorthington Industries

Bill and Vieve Gore/ Bill and Vieve Gore/ W.L. GoreW.L. GoreBob Buckman/ Bob Buckman/ Buckman LabsBuckman Labs (Bob (Bob

almost single-handedly invented what we now callalmost single-handedly invented what we now call “ “knowledge management.”)knowledge management.”)

By accident I became enamored with the By accident I became enamored with the largely unsung “American Mittelstand.” largely unsung “American Mittelstand.” Why? They came to my big seminars—Why? They came to my big seminars—

the F500 didn’t. (the F500 didn’t. (In Search of ExcellenceIn Search of Excellence was pure Big Co.)was pure Big Co.)

chinachina!!

China’s success has effectively been China’s success has effectively been Mittelstand-ish.Mittelstand-ish. The state-run giants The state-run giants

have staggered along—the have staggered along—the successful startups (many, many are successful startups (many, many are unsuccessful) have been the Chinese unsuccessful) have been the Chinese

growth engine.growth engine.

#2#2


Big companies!

Public companies

! “Cool” industries!


Plans!

I rarely use Private/Family Co. I rarely use Private/Family Co. examples. I ain’t alone!examples. I ain’t alone!

Family BusinessesFamily Businesses

Two-thirds of total #sTwo-thirds of total #s of companies of companiesOne-half of biggest companiesOne-half of biggest companies>One-half GDP>One-half GDP>One-half employment>One-half employment6% more profitable6% more profitable7% better ROA7% better ROAHigher income growthHigher income growthHigher revenue growthHigher revenue growthSource: John Davis, HBSSource: John Davis, HBS

GEOBRA/PlaymobilGEOBRA/PlaymobilTrumpfTrumpf

RationalRationalGoldmann ProduktionsGoldmann Produktions

Private.Private.

““Skunk Camp” #1:Skunk Camp” #1:American “Mittelstand” American “Mittelstand” (A.W.O.L.: F500)

Frank Perdue/ Frank Perdue/ Perdue FarmsPerdue Farms (“It takes a tough man to make a tender chicken.”)(“It takes a tough man to make a tender chicken.”)

Tom Malone/ Tom Malone/ Milliken and CompanyMilliken and CompanyDon Burr/ Don Burr/ People ExpressPeople Express

Tom Monaghan/ Tom Monaghan/ Domino’s PizzaDomino’s PizzaStew Leonard/ Stew Leonard/ Stew Leonard’sStew Leonard’s

Hal Rosenbluth/ Hal Rosenbluth/ Rosenbluth Rosenbluth InternationalInternational

John Fisher/ John Fisher/ Bank One of ColumbusBank One of ColumbusJohn McConnell/ John McConnell/ Worthington IndustriesWorthington Industries

Bill and Vieve Gore/ Bill and Vieve Gore/ W.L. GoreW.L. GoreBob Buckman/ Bob Buckman/ Buckman LabsBuckman Labs (Bob (Bob

almost single-handedly invented what we now callalmost single-handedly invented what we now call “ “knowledge management.”)knowledge management.”)

Mostly private.Mostly private.

10.610.6

10.6 million women-owned 10.6 million women-owned companies in the U.S. Most companies in the U.S. Most

are private.are private.

U.S. firms owned or controlled by Women:U.S. firms owned or controlled by Women: 10.6 10.6 millionmillion ( (48%48% of all firms) of all firms)

Growth rate of Women-owned firms vs all firms:Growth rate of Women-owned firms vs all firms: 3X3X

Rate of jobs created by Women-owned firms vs all Rate of jobs created by Women-owned firms vs all firms:firms: 2X2X

Ratio of total payroll of Women-owned firms vs total Ratio of total payroll of Women-owned firms vs total for Fortune 500 firms:for Fortune 500 firms: >1.0>1.0

Ratio of likelihood of Women-owned firms staying in Ratio of likelihood of Women-owned firms staying in business vs all firms:business vs all firms: >1.0>1.0

Growth rate of Women-owned companies with Growth rate of Women-owned companies with revenues of >$1,000,000 and >100 employees vs all revenues of >$1,000,000 and >100 employees vs all firms:firms: 2X2X

Source: Margaret Heffernan, How She Does It

U.S. Women-owned BizU.S. Women-owned Biz

U.S. employees U.S. employees thereof > F500 thereof > F500

employees worldwideemployees worldwideSource: Martha Barletta, Source: Martha Barletta, Marketing to WomenMarketing to Women

““The growth and The growth and success of women-success of women-

owned businesses is owned businesses is one of the most one of the most

profound changes profound changes takingtaking place in the place in the

business worldbusiness world today.”today.” —Margaret Heffernan, How She Does It

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

Girls education #1:Girls education #1: Yields Yields highest return on investment highest return on investment

in developing world*in developing world*

*better nutrition for family. Better kids’ *better nutrition for family. Better kids’ education. Better health. Highereducation. Better health. Higher

family income. Lower birth rate. Etc. family income. Lower birth rate. Etc.

Source: Larry Summers, as reported in “The Payoff From Source: Larry Summers, as reported in “The Payoff From Women’s Rights,” Isobel Coleman, Women’s Rights,” Isobel Coleman,

Foreign Affairs, Foreign Affairs, May-June 2004May-June 2004

#3#3


Big companies!Public companies!

“Cool” industries!


Plans!

Jim’s Jim’s GroupGroup

Jim’s Mowing CanadaJim’s Mowing CanadaJim’s Mowing UKJim’s Mowing UKJim’s AntennasJim’s Antennas

Jim’s BookkeepingJim’s BookkeepingJim’s Building MaintenanceJim’s Building Maintenance

Jim’s Carpet CleaningJim’s Carpet CleaningJim’s Car CleaningJim’s Car Cleaning

Jim’s Computer ServicesJim’s Computer Services

Jim’s Dog WashJim’s Dog WashJim’s Driving SchoolJim’s Driving School

Jim’s FencingJim’s FencingJim’s FloorsJim’s Floors

Jim’s PaintingJim’s PaintingJim’s PavingJim’s Paving

Jim’s Pergolas [gazebos]Jim’s Pergolas [gazebos]Jim’s Pool CareJim’s Pool Care

Jim’s Pressure CleaningJim’s Pressure CleaningJim’s RoofingJim’s Roofing

Jim’s Security DoorsJim’s Security DoorsJim’s TreesJim’s Trees

Jim’s Window CleaningJim’s Window CleaningJim’s WindscreensJim’s Windscreens

Note: Download, free, Jim Penman’s book: What Will They Franchise Next? The Story of Jim’s Group

Damn few dog-wash Damn few dog-wash companies in guru companies in guru

presentations!presentations!

Basement Basement Systems Inc.Systems Inc.

*Basement Systems Inc.*Basement Systems Inc.*Larry Janesky*Larry Janesky**Dry Basement ScienceDry Basement Science (115,000!) (115,000!)

*1990: $0; 2003: $13M; *1990: $0; 2003: $13M; 2007: 2007:

$62,000,000$62,000,000

Love it! Big bucks from dry basements!!Love it! Big bucks from dry basements!!

etc.etc.

PRSX/Paragon PRSX/Paragon Railcar Railcar

Salvage*Salvage**Salvaged railcars into bridges, etc.*Salvaged railcars into bridges, etc.

I’m doing a huge landscaping project. One I’m doing a huge landscaping project. One bit is to be a little bridge over a little bit is to be a little bridge over a little

stream. Upon Googling “little bridge over stream. Upon Googling “little bridge over little stream,” I found the Essence of little stream,” I found the Essence of

the/an Economy—numerous firms doing the/an Economy—numerous firms doing little bridges. These guys salvage old rail little bridges. These guys salvage old rail cars, and use the frames for little bridges cars, and use the frames for little bridges

over little waterways. Don’t ya love it?over little waterways. Don’t ya love it?

**Lived in same town all adult lifeLived in same town all adult life*First generation that’s wealthy/*First generation that’s wealthy/ no parental support no parental support*“Don’t look like millionaires, don’t dress*“Don’t look like millionaires, don’t dress like millionaires, don’t eat like like millionaires, don’t eat like millionaires, don’t act like millionaires” millionaires, don’t act like millionaires”*“Many of the types of businesses [they]*“Many of the types of businesses [they] are in could be classified as ‘dull- are in could be classified as ‘dull- normal.’ normal.’ [They] are welding contractors, [They] are welding contractors, auctioneers, scrap-metal dealers, lessors of auctioneers, scrap-metal dealers, lessors of portable toilets, dry cleaners, re-builders of portable toilets, dry cleaners, re-builders of diesel engines, paving contractors …” diesel engines, paving contractors …”

Source: Source: The Millionaire Next DoorThe Millionaire Next Door,, Thomas Stanley & William Danko Thomas Stanley & William Danko

Ichiro-Ichiro-nomicsnomics

Great term! (See next slide.)Great term! (See next slide.)

IchironomicsIchironomics““Spokane, like Minneapolis-St Paul, Spokane, like Minneapolis-St Paul,

refuses to bet the economy on one or two refuses to bet the economy on one or two industries. Rather, it practices what one industries. Rather, it practices what one city booster calls ‘Ichironomics.’ Like the city booster calls ‘Ichironomics.’ Like the

Seattle Mariners’ center fielder, Ichiro Seattle Mariners’ center fielder, Ichiro Suzuki, we try to hit singles and doubles. Suzuki, we try to hit singles and doubles. We want to improve the overall conditions We want to improve the overall conditions for small businesses, not chase the large for small businesses, not chase the large

employeremployer.’”—Rich Karlgaard, .’”—Rich Karlgaard, ForbesForbes

(NB: In 2004 Suzuki broke the all-time record for hits(NB: In 2004 Suzuki broke the all-time record for hits in a single season, with a staggering 262.)in a single season, with a staggering 262.)

(NB II: In 2007 the mayor of Lisbon reduced the amount of time to get(NB II: In 2007 the mayor of Lisbon reduced the amount of time to get a business license from weeks or months to, literally, minutes.)a business license from weeks or months to, literally, minutes.)

#4#4



“Cool” industries!


Plans!

Q4/2006Q4/2006

+500,000+500,000 = ? = ?

Source: Source: Barron’sBarron’s 0922.07 0922.07

Jobs created in the U.S. in Q4 2006. U.S. Jobs created in the U.S. in Q4 2006. U.S. has deserved great rep in job creation.has deserved great rep in job creation.

Q4/2006Q4/2006

+500,000+500,000 = =+7,700,000+7,700,000-7,200,000-7,200,000

Source: Source: Barron’sBarron’s 0922.07 0922.07

You get to +500K jobs by destroying You get to +500K jobs by destroying 7.2 7.2 millionmillion, creating 7.7 , creating 7.7 millionmillion—in —in one quarter. Talk about “churn”!one quarter. Talk about “churn”!

““Natural selection is death. ... Natural selection is death. ...

Without huge amounts Without huge amounts of death, organisms do of death, organisms do not change over time.not change over time. ... ...

Death is the mother of Death is the mother of structure. ... It took four structure. ... It took four

billion years of death ... to billion years of death ... to invent the human mind ...”invent the human mind ...” — —

The Cobra EventThe Cobra Event

The The lastlast word: word: There There is is nono “last “last

word.”word.”

Headline, Wall Street Journal,

3 October 2007: “Wal*Mart Era Wanes Amid Big Shifts In Retail: Rivals Find Strategies To Defeat Low Prices; World Has Changed”

Sentence #1: “The Wal*Mart Era, the retailer’s time of overwhelming business and social influence in America, is drawing to a close.”

““Built to last.” Ha!Built to last.” Ha!

Cover, Cover, NewsweekNewsweek, 05 November 2007:, 05 November 2007: “Takedown? ONCE HAILED AS “Takedown? ONCE HAILED AS

A WORLDBEATER, THE A WORLDBEATER, THE INTERNET COLOSSUS NOW INTERNET COLOSSUS NOW HAS REAL RIVALS ALL OVER HAS REAL RIVALS ALL OVER

THE WORLD.”THE WORLD.”

[text followed by a massive rendition of the[text followed by a massive rendition of the

GGOOOOGGLLEE logo]logo]

““Built to last.” Ha!Built to last.” Ha!

Success Kills!Success Kills!

“The more successful “The more successful a company, the flatter a company, the flatter its forgetting curve.”its forgetting curve.”

— Gary Hamel and C.K. Prahalad— Gary Hamel and C.K. Prahalad

Wanted* ** : Corporate Corporate Senility!Senility!

*Desperately!

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

“It is generally much easier to kill an

organization than change it substantially.”

—Kevin Kelly, Out of Control

C.E.O.C.E.O. to

C.D.O.C.D.O.

Wanted: Wanted: Chief Destruction Chief Destruction Officer!Officer!

Built to Lastvs

Built Built to to ChangeChange//Rock Rock the the

WorldWorld

I’ll take the latter. (“Lasting” per se has I’ll take the latter. (“Lasting” per se has never struck me as much of an aspiration. never struck me as much of an aspiration. Apple “lasts” by re-inventing the world—Apple “lasts” by re-inventing the world—

time and again. Great!)time and again. Great!)

TP#1*:TP#1*:

NetscapeNetscape!!

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

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

My favorite company. Around as an My favorite company. Around as an independent for just a few years—independent for just a few years—

changed the world.changed the world.

““Five hundred years before Christ in a little town on Five hundred years before Christ in a little town on the far western border of the settled and civilized the far western border of the settled and civilized

world, a strange new power was at work. … world, a strange new power was at work. …

Athens had entered uAthens had entered uppon her on her brief and mabrief and maggnificent flowerinnificent floweringg of of ggenius which so molded the enius which so molded the world of mind and of sworld of mind and of sppirit that irit that our mind and sour mind and sppirit todairit todayy are are

differentdifferent.. What was then produced of art and of What was then produced of art and of thought has never been surpassed, and the stamp of thought has never been surpassed, and the stamp of

it is upon all the art and all the thought of the it is upon all the art and all the thought of the Western world.” Western world.” —Edith Hamilton, —Edith Hamilton,

The Greek WayThe Greek Way

GMGM2525/50-/50-75:75: “Built to “Built to

last”last”????????

Even GM really gave us only Even GM really gave us only 25 dominating years. Terrific, 25 dominating years. Terrific,

but hardly “forever.”but hardly “forever.”

Warren Bennis & Patricia Ward Biederman/ Warren Bennis & Patricia Ward Biederman/

Organizing GeniusOrganizing Genius:: “Great “Great Groups Groups

Don’t Last Don’t Last Very LongVery Long!”!”

Jane Jacobs:Jane Jacobs: Exuberant Exuberant VarietyVariety vs. the Great Blight of Dullness. vs. the Great Blight of Dullness.

F.A. Hayek: F.A. Hayek: Spontaneous Spontaneous Discovery ProcessDiscovery Process.. Joseph Schumpeter: theJoseph Schumpeter: the Gales of Gales of

Creative Creative Destruction.Destruction.

Legendary churnmeisters.Legendary churnmeisters.

Palo Alto/30Palo Alto/30California/35California/35

I lived in California-Silicon I lived in California-Silicon Valley for three decades plus. Valley for three decades plus.

Makes you believe in (1) Makes you believe in (1) churn, (2) death, (3) the churn, (2) death, (3) the

possibility of knocking off the possibility of knocking off the “impregnables.”“impregnables.”

#5#5



“Cool” industries!Stability!

Famous CEOs!

“Hard” stuff!“Success”!

Plans!

Mission impossible?Mission impossible?

$36B/’98$36B/’98

minus minus $675M/‘$675M/‘

0707

Chrysler had market cap of Chrysler had market cap of $36 billion when Daimler $36 billion when Daimler

bought them in 1998. In effect, bought them in 1998. In effect, Daimler had to pay the private Daimler had to pay the private

equity gang 9 years later to equity gang 9 years later to take Chrysler off their hands.take Chrysler off their hands.

Market capitalization lost per day, 1998-

2007: $10,000,00

0/Day

Holy shit!Holy shit!

“Mr Zetsche, head of Chrysler from 2000 to 2005,

denied he should

take any

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

Times /05.29.07

Holy shit!Holy shit!

**Lived in same town all adult lifeLived in same town all adult life**First generation that’s wealthy/First generation that’s wealthy/ no parental supportno parental support**“Don’t “Don’t looklook like millionaires, don’t like millionaires, don’t dressdress like millionaires, don’t like millionaires, don’t eateat like like millionaires, don’t millionaires, don’t actact like millionaires like millionaires””*“Many of the types of businesses [they] are in could be*“Many of the types of businesses [they] are in could be classified as ‘dull-normal.’ [They] are welding contractors, classified as ‘dull-normal.’ [They] are welding contractors, auctioneers, scrap-metal dealers, lessors of portable toilets, auctioneers, scrap-metal dealers, lessors of portable toilets, dry cleaners, re-builders of diesel engines, paving dry cleaners, re-builders of diesel engines, paving contractors …” contractors …”

Source: Source: The Millionaire Next DoorThe Millionaire Next Door,, Thomas Stanley & William Danko Thomas Stanley & William Danko

Deserved its popularity—a light year Deserved its popularity—a light year away from typical “guru Stuff.” CEOs away from typical “guru Stuff.” CEOs

worth talking about—emulating!worth talking about—emulating!

#6#6




Famous CEOs!

“Hard” stuff!

“Success”!Plans!

Hard Is SoftHard Is SoftSoft Is HardSoft Is Hard

The Peters-Waterman “mantra” that The Peters-Waterman “mantra” that rocked the world of “Strategy uberrocked the world of “Strategy uber

alles,” circa 1980. alles,” circa 1980.

True or FalseTrue or False

Axiom: Axiom: Setting loose a gaggle Setting loose a gaggle of the best and the brightest of the best and the brightest

with advanced degrees in math with advanced degrees in math and economics from the and economics from the

world’s best universities will world’s best universities will result in permanently reduced result in permanently reduced

risk in global financial markets.risk in global financial markets.

““Quant” nightmares, circa 2007.Quant” nightmares, circa 2007.

TrueTrue

Stan O’NealStan O’NealChuck PrinceChuck Prince“Bill Sharpe & “Bill Sharpe & The ‘Nobels’”The ‘Nobels’”

Stan and Chuck lost their jobs for “over-Stan and Chuck lost their jobs for “over-quanting” it—derivatives of derivatives, quanting” it—derivatives of derivatives,

supposedly (Ha!) taming risk. Sharpe won supposedly (Ha!) taming risk. Sharpe won a Nobel in econ for providing the base for a Nobel in econ for providing the base for this excellent adventure—the Nobel ought this excellent adventure—the Nobel ought to be pulled. (By the way, the econ Nobel to be pulled. (By the way, the econ Nobel

ain’t actually a Nobel.)ain’t actually a Nobel.)

Dumb Bastards: “Hard”?????Dumb Bastards: “Hard”?????

“Mark-to-market”“Mark-to-market” (What’s (What’s “market”???? “market”???? WhatWhat market????)market????)

CDOs/Consolidated-CDOs/Consolidated-debt Obligationdebt Obligation (Value of(Value of

underlying asset??????) underlying asset??????) (Value of (Value of $64B “super-senior” [“super-safe”] $64B “super-senior” [“super-safe”]

CDOs at Citi???????)CDOs at Citi???????) Postscript: Bye, bye Stan/Merrill and Chuck/Citi. Postscript: Bye, bye Stan/Merrill and Chuck/Citi.

You’re gonna have to learn to live on $100 million You’re gonna have to learn to live on $100 million or so [Stan/$160M severance], I guess.or so [Stan/$160M severance], I guess.

Ultimate “soft” turns out to be Ultimate “soft” turns out to be the supposedly ultimate the supposedly ultimate

“hard”—the debt instruments “hard”—the debt instruments created by the “quants” to created by the “quants” to

reduce-eliminate portfolio risk.reduce-eliminate portfolio risk.

FalseFalse

Nassim Nicholas TalebNassim Nicholas TalebWarren BuffettWarren Buffett

Buffet questioned derivatives (he’s a so-Buffet questioned derivatives (he’s a so-called “value investor”); so did NNTcalled “value investor”); so did NNT

—see next slide.—see next slide.

““Medicine used to kill Medicine used to kill more patients than it more patients than it

saved—just as financial saved—just as financial economics* endangerseconomics* endangers the system by creating the system by creating

risk.”risk.” —Nassim Nicholas Taleb, “The Pseudo-—Nassim Nicholas Taleb, “The Pseudo-

science Hurting Markets,” science Hurting Markets,” FTFT, 1024.07 , 1024.07 (NNT is author (NNT is author of of Fooled By Randomness, The Black Swan)Fooled By Randomness, The Black Swan)

*“ ‘Nobel-crowned’ methods of modern *“ ‘Nobel-crowned’ methods of modern portfolio theory; “Sveriges Riksbank Prize in portfolio theory; “Sveriges Riksbank Prize in

Economic Science in Memory of Alfred Economic Science in Memory of Alfred Nobel”Nobel”


Hard Is Hard Is SoftSoft (Plans, (Plans, ##ss))

Soft Is Soft Is HardHard (people, (people, customers, values, customers, values,

relationships))relationships))

““The 7-S Model”The 7-S Model”

StrategyStrategyStructureStructureSystemsSystems

StyleStyleSkillsSkillsStaffStaff

Super-ordinate goalSuper-ordinate goal

McKinsey “7-S” model McKinsey “7-S” model developed by Bob Waterman developed by Bob Waterman and yrs. truly in 1979—still in and yrs. truly in 1979—still in

use.use.


“Hard S“Hard Sss”” (Strategy, Structure, Systems)(Strategy, Structure, Systems)

“Soft S“Soft SSS”” (Style, Skills, Staff, Super-ordinate goal)(Style, Skills, Staff, Super-ordinate goal)


StrategyStrategyStructureStructureSystemsSystems

StyleStyle (Corporate “Culture,” “The (Corporate “Culture,” “The wayway

we do things around here”) we do things around here”)SkillsSkills (“Distinctive Competence/s)(“Distinctive Competence/s)

StaffStaff (People-Talent)(People-Talent)Super-ordinate goalSuper-ordinate goal (Vision, (Vision,

Core Values)Core Values)

“If I could have chosen not to tackle the IBM culture head-on, I probably wouldn’t have. My bias coming in was toward strategy, analysis and measurement. In comparison, changing the attitude and behaviors of

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

isn’t just one aspect of the

game ——it is the it is the gamegame.”.” —Lou Gerstner,

Who Says Elephants Can’t Dance

Gerstner, the arch-enemy of my “soft Gerstner, the arch-enemy of my “soft stuff” while he was at McKinsey is stuff” while he was at McKinsey is

forced to the wall! (I love it!)forced to the wall! (I love it!)


9595%%

95%:95%:

“Understanding “Understanding the mind’s eye of the mind’s eye of another person”another person”

““What I learned from my years What I learned from my years as a hostage3 negotiator is that as a hostage3 negotiator is that

we do not have to feel we do not have to feel powerless—and that powerless—and that

bondinbondingg is the antidote to is the antidote to the hostage situation.”the hostage situation.” —George —George

Kohlrieser, Kohlrieser, Hostage at the TableHostage at the Table

““The terms ‘hard facts,’ and The terms ‘hard facts,’ and ‘the soft stuff’ used in business ‘the soft stuff’ used in business

imply that data are somehow imply that data are somehow real and strong while emotions real and strong while emotions are weak and less important.”are weak and less important.” ——

George Kohlrieser, George Kohlrieser, Hostage at the TableHostage at the Table

““The capacity to develop close and The capacity to develop close and enduring relationships is the mark of enduring relationships is the mark of a leader. Unfortunately, many leaders a leader. Unfortunately, many leaders of major companies believe their job of major companies believe their job is to create the strategy, organization is to create the strategy, organization

structure and organizational structure and organizational processes—then they just delegate processes—then they just delegate

the work to be done, remaining aloof the work to be done, remaining aloof from the people doing from the people doing

the work.”the work.” —Bill George, —Bill George, Authentic LeadershipAuthentic Leadership

““Be kind, for Be kind, for everyone you everyone you

meet is fighting a meet is fighting a great battle.”great battle.” —Philo of —Philo of

AlexandriaAlexandria

Relationships (of all varieties): THERE THERE ONCE WAS A TIME WHEN ONCE WAS A TIME WHEN A A THREETHREE--MINUTEMINUTE PHONEPHONE

CALLCALL WOULD HAVE WOULD HAVE AVOIDED SETTING OFF AVOIDED SETTING OFF

THE DOWNWARD SPIRAL THE DOWNWARD SPIRAL THAT RESULTED IN A THAT RESULTED IN A COMPLETE RUPTURE.COMPLETE RUPTURE.

The Manager’s The Manager’s Book of Book of DecenciesDecencies: :

How Small How Small /gestures Build /gestures Build

Great Companies.Great Companies. —Steve Harrison, Adecco

Women’s NeWomen’s Neggotiatinotiatingg Stren Strenggthsths

*Ability to put themselves in their *Ability to put themselves in their counterparties’ shoes counterparties’ shoes*Comprehensive, attentive and detailed*Comprehensive, attentive and detailed communication style communication style*Empathy that facilitates trust-building*Empathy that facilitates trust-building*Curious and attentive listening*Curious and attentive listening*Less competitive attitude*Less competitive attitude*Strong sense of fairness and ability to *Strong sense of fairness and ability to persuadepersuade*Proactive risk manager*Proactive risk manager*Collaborative decision-making*Collaborative decision-making

Source: Horacio Falcao, Cover story/May 2006, World Business, “Say It Like a Woman: Why the 21st-century negotiator will need the female touch”

Work’s RewardsWork’s Rewards

FF: : Relationships, respect, self-Relationships, respect, self-realization.realization.

MM: : Title, salary, power. Title, salary, power. (“In all my (“In all my research with men, I’ve never once research with men, I’ve never once

heard a mention about the heard a mention about the importance of relationships.”)importance of relationships.”)

Source: Susan Rice, former Director of Communications, Source: Susan Rice, former Director of Communications, BBDO Europe (from “A Dignified Woman”)BBDO Europe (from “A Dignified Woman”)


TP: TP: “How to flush

$500,000 down

the toilet in one easy

lesson!!”

Spend $500K on a store upgrade—Spend $500K on a store upgrade—same crappy staff attitude. Money same crappy staff attitude. Money

wasted—or worse.wasted—or worse.

< CAPEX< CAPEX> People!> People!

Lock down your annual budget. Lock down your annual budget. Immediately go back and cut Immediately go back and cut

capital spending about 20%, put $capital spending about 20%, put $$ saved into people!$ saved into people!

profits, profits, people people or or

people, people, profits? profits?

Our Mission

To develop and manage To develop and manage talent;talent;

to apply that talent,to apply that talent,throughout the world, throughout the world,

for the benefit of clients;for the benefit of clients;to do so in partnership; to do so in partnership;

to do so with profit.to do so with profit.

WPP

#1/10#1/1000

““Best Companies toBest Companies to

Work for” Work for”//20052005

WegmansWegmans

““Best company to work for” in 2005Best company to work for” in 2005 is a regional grocery chain—“people is a regional grocery chain—“people

excellence” not limited to “sexy” excellence” not limited to “sexy” Genentechs and Googles!Genentechs and Googles!


Starbucks big secret: HireStarbucks big secret: Hire for Smiles!! (Just try and get for Smiles!! (Just try and get

a typical “HR type” to buy a typical “HR type” to buy into that!) into that!)

“A man without A man without a smiling face a smiling face

must not open a must not open a shop.”shop.” —Chinese Proverb

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

and, and, aboveabove allall, , ppromoteromote for for s.”s.”

—Starbucks middle manager/field

““Character is more crucial now Character is more crucial now than ever, because in times of than ever, because in times of

great uncertainty past great uncertainty past performance is no indicator of performance is no indicator of

future performance. future performance. Experience falls away and all Experience falls away and all

you’re left with is character.” you’re left with is character.” ——David Rothkopf, founder of a firm that helps chief David Rothkopf, founder of a firm that helps chief

executives manage risksexecutives manage risks

Promote for mostest smiles.Promote for mostest smiles.


2255

Starbucks founder Schultz Starbucks founder Schultz visits 25 stores a weekvisits 25 stores a week—”hands on” forever!—”hands on” forever!

MBWAMBWA

Bob Waterman and I Bob Waterman and I found Managing By found Managing By

Wandering Around at a Wandering Around at a much smaller HP, in 1980. much smaller HP, in 1980. We instantly fell in love. We instantly fell in love. It perfectly symbo0lized It perfectly symbo0lized all we were fighting for!all we were fighting for!

You = Your You = Your calendarcalendar***Calendars *Calendars nevernever lielie


R.O.I.RR.O.I.R..

RReturn eturn OOn n

IInvestment In nvestment In

RRelationshipselationships

The The “Ultimate “Ultimate Hard Stuff”Hard Stuff” — —

relationships. Always have relationships. Always have been! Alwaysbeen! Always

will be! will be!

C(I) > C(I) > C(E)C(E)

Internal customers at least as Internal customers at least as important as external important as external

customers—e.g., waiter totally customers—e.g., waiter totally dependent on chef’s attitude dependent on chef’s attitude

toward him-her.toward him-her.

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

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

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

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

with others?”with others?”

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

““Courtesies of a small Courtesies of a small and trivial character are and trivial character are

the ones which strike the ones which strike deepest in the grateful deepest in the grateful

and appreciating heart.”and appreciating heart.”

—Henry Clay

The … Jim Jim Jeffords Jeffords oversighoversigh

t!t!

Long story. White House failed to Long story. White House failed to invite VT Senator Jim Jeffords to a invite VT Senator Jim Jeffords to a bill signing ceremony. This was the bill signing ceremony. This was the

tipping point that led JJ to re-register tipping point that led JJ to re-register as an Independent—and therebyas an Independent—and thereby cost Republicans control of the cost Republicans control of the U.S. Senate. (Control of one of U.S. Senate. (Control of one of

world’s most august electoral bodies world’s most august electoral bodies shifts on the basis of an invitationshifts on the basis of an invitation

to a party! to a party!

““The deepest The deepest human need is human need is the need to be the need to be appreciated.”appreciated.”

William JamesWilliam James

Thank Thank

youyou!!!!!!

Thank Thank youyou

AnnAnn!!!!!!

FFLLOOWWEERRPPOOWWEERRFFLLOOWWEERRPPOOWWEERR

Relationships (of all varieties): THERE THERE ONCE WAS A TIME WHEN A ONCE WAS A TIME WHEN A

THREETHREE--MINUTEMINUTE PHONEPHONE CALLCALL WOULD HAVE AVOIDED WOULD HAVE AVOIDED

SETTING OFF THE DOWNWARD SETTING OFF THE DOWNWARD SPIRAL THAT RESULTED IN A SPIRAL THAT RESULTED IN A

COMPLETE RUPTURE.COMPLETE RUPTURE.

THE PROBLEM IS THE PROBLEM IS RARELY/NEVER THE RARELY/NEVER THE

PROBLEM.PROBLEM. THE THE RESPONSE TO THE RESPONSE TO THE

PROBLEM INVARIABLY PROBLEM INVARIABLY ENDS UP BEING THE ENDS UP BEING THE

REAL PROBLEMREAL PROBLEM.

Invariably!Invariably!

Success …

Consult Consult everyoneeveryone on on everythingeverything

“Thank you” “Thank you” note note carpetcarpet

bombingbombingSource: Roger Rosenblatt, Source: Roger Rosenblatt, Rules for AgingRules for Aging

““As you predicted …”As you predicted …”

“My mind is like a sieve …”“My mind is like a sieve …”

“Well, looks like we blew it “Well, looks like we blew it …” [“No, no. Us!” “There’s …” [“No, no. Us!” “There’s

blame enough to go blame enough to go around.”]around.”]

“I’m really sorry.” “I’m really sorry.”

““I have only one I have only one interest in you—interest in you—

whether or not you whether or not you have instant and have instant and

accurate knowledge accurate knowledge about the location about the location

of the loo.”of the loo.”

““When When attacked … attacked …

ask a ask a question.”question.”

—George Kohlrieser, —George Kohlrieser, Hostage at the TableHostage at the Table

TP:TP: Talk to one person. Talk to one person. Have a [private] Have a [private]

conversation. Use conversation. Use humor. Talk about humor. Talk about

kids, etc. Ask kids, etc. Ask questions. “Be” that questions. “Be” that

person’s world.person’s world. (Bond!)(Bond!)

Take the blame. Deserved or not. Take the blame. Deserved or not. (Every issue has at least a little (Every issue has at least a little

blameworthiness on both sides.) blameworthiness on both sides.) Taking the heat is a winning Taking the heat is a winning

strategy!!strategy!!

““Have kids?Have kids? [if [if “yes”:]“yes”:] What are What are

they up to?”they up to?”

““So why don’t we do this ‘obvious So why don’t we do this ‘obvious stuff’?”stuff’?”

Considered “soft.” Immediate Considered “soft.” Immediate priorities get in the way. The B-school priorities get in the way. The B-school idea of business pervades. Comfort idea of business pervades. Comfort

hanging out in our own confines. hanging out in our own confines. Easier. Uncomfortable with the Easier. Uncomfortable with the “relationship stuff.” “Problem “relationship stuff.” “Problem

solvers,” not “listeners” [“the 18-solvers,” not “listeners” [“the 18-second Doc]; impatient, not patient. second Doc]; impatient, not patient. Not the “sales type.” Like #s better Not the “sales type.” Like #s better

than people. Damned hard work than people. Damned hard work unless you take to it instinctively. Etc. unless you take to it instinctively. Etc.

Answer/s?Answer/s?

Formal “calendar discipline.” A new “to-Formal “calendar discipline.” A new “to-do list.” A “Life coach”/Formal mentor do list.” A “Life coach”/Formal mentor

(weekly, daily if you can afford it). (weekly, daily if you can afford it). Support group. If male, woman pal. Support group. If male, woman pal.

Training—incl. role play. Adopt Stephen Training—incl. role play. Adopt Stephen Covey or Marshall Goldsmith. Report Covey or Marshall Goldsmith. Report

card. Constant, informal as well as card. Constant, informal as well as formal “360 feedback.” A great “gotcha formal “360 feedback.” A great “gotcha pal”—e.g., monitors meetings, goes on pal”—e.g., monitors meetings, goes on

“sales” calls. Sales training!!!!! “sales” calls. Sales training!!!!! Volunteer community leadership work. Volunteer community leadership work.

Fundraising!Fundraising!


The ultimate “hard stuff” is quant finance—the product of pure mathThe ultimate “hard stuff” is quant finance—the product of pure math—“guy stuff,” the stuff that men are made for! TAKE “mark-to-market” AND —“guy stuff,” the stuff that men are made for! TAKE “mark-to-market” AND “Super-senior CDOs” [Consolidated Debt Obligations]. They are killing us!! “Super-senior CDOs” [Consolidated Debt Obligations]. They are killing us!! “Mark-to-market”? Fine! But what, my dears, is the “market”? Nobody has “Mark-to-market”? Fine! But what, my dears, is the “market”? Nobody has a sweet clue—especially the “quants.” The “market”/a market/any market a sweet clue—especially the “quants.” The “market”/a market/any market is a function of the long-forgotten [by the “quants”—“hard guys,” “real is a function of the long-forgotten [by the “quants”—“hard guys,” “real men”] men”] underlunderlyyiningg value of the real value of the real [not “modeled”] [not “modeled”] assetasset. [E.g. . [E.g. The original The original mortgage by real people on a real housemortgage by real people on a real house]. The “quant”-“hard guys”-“real ]. The “quant”-“hard guys”-“real men” mega-models know “everything about everything”—and nothing men” mega-models know “everything about everything”—and nothing about nothing about what matters, the actual value of the actual loan. about nothing about what matters, the actual value of the actual loan. Citigroup has no less than $60 billion+ tied up in “Super-senior” CDOs Citigroup has no less than $60 billion+ tied up in “Super-senior” CDOs [thought “super-safe” only weeks ago—by the “quants”]—and they have [thought “super-safe” only weeks ago—by the “quants”]—and they have no f-ing clue as to the real value of any of it!no f-ing clue as to the real value of any of it!

Soft? Soft? Hard?Hard?

Bob Waterman and I, in 1980, developed a mantra in those days of yore Bob Waterman and I, in 1980, developed a mantra in those days of yore when “strategy [strategic plans] was everything.” We said:when “strategy [strategic plans] was everything.” We said:

Hard is Hard is softsoft. . Soft is Soft is hardhard..

The readily-manipulable numbers are the true “soft stuff.” The The readily-manipulable numbers are the true “soft stuff.” The relationships-leadership-“culture”-“action bias” are the true “hard stuff.”relationships-leadership-“culture”-“action bias” are the true “hard stuff.”

Source: TP post, tompeters.com, 1112.07Source: TP post, tompeters.com, 1112.07

““Why is it that your average business person has such a Why is it that your average business person has such a hard time being human? I often wonder if the sole point hard time being human? I often wonder if the sole point of business language is to de-humanize those doing of business language is to de-humanize those doing business. I struggle to find another explanation.business. I struggle to find another explanation.

““To the rest of the world, emotion is a normal, everyday, To the rest of the world, emotion is a normal, everyday, important part of life... and people who don't get that important part of life... and people who don't get that are generally considered jerks. Only managers don't get are generally considered jerks. Only managers don't get this. this.

““I've found that the simplest (and most powerful) I've found that the simplest (and most powerful) competitive advantage comes from competitive advantage comes from CARINGCARING.. Genuinely Genuinely caring about people (customers and partners) covers a caring about people (customers and partners) covers a multitude of other shortcomings. multitude of other shortcomings. CARINGCARING about people about people is the best ‘marketing strategy’ and the best is the best ‘marketing strategy’ and the best ‘management method.’ …‘management method.’ …

““The funny thing is that in such a soulless business The funny thing is that in such a soulless business climate, climate, CARINGCARING is that much more competitive—and is that much more competitive—and translates nicely to financial performance as well! It also translates nicely to financial performance as well! It also translates into a much fuller and happier life …”translates into a much fuller and happier life …”

Posted at tompeters.com by AJ Hoge at November 12, 2007 8:11 PMPosted at tompeters.com by AJ Hoge at November 12, 2007 8:11 PM

W. Donald W. Donald

SchaeferSchaefer

1921-Forever1921-Forever

He CaredHe Cared

William Donald William Donald

SchaeferSchaefer

Mayor of Baltimore Mayor of Baltimore

He Cared.He Cared.


“Design is

treated like treated like a religiona religion at

BMW.” —Fortune

““You You knowknow a a designdesign is is goodgood

whenwhen you you wantwant to to licklick it.” it.” —Steve Jobs—Steve Jobs

Source: Source: Design: Intelligence Made VisibleDesign: Intelligence Made Visible,, Stephen Bayley & Terence ConranStephen Bayley & Terence Conran

Franchise Lost!

TP: “How many of you [600] really

cravecrave a new Chevy?”

NYC/IIR/061205

““It suddenly It suddenly occurred to me …occurred to me …

““It suddenly occurred It suddenly occurred to me that in the to me that in the

space of two or three space of two or three

hours he hours he nevernever

talked about cars.”talked about cars.” —Les —Les

WexnerWexner

Okay, you say product really is Okay, you say product really is “hard.” Fair enough—but my point“hard.” Fair enough—but my point is that the guy in question never is that the guy in question never

talked about what he really does to talked about what he really does to please the customer.please the customer.

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?”

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

wonder what wonder what unimaginable new tools, unimaginable new tools, otherwise not otherwise not ppossibleossible, , will be quickly brought will be quickly brought

forth forth for mfor myy 19- 19-yyear-old ear-old daudaugghter Annehter Anne because because

of of this deal?”this deal?”

Consider a mega-merger. In the Consider a mega-merger. In the process of CEO-to-CEO negotiations, process of CEO-to-CEO negotiations,

is the desired outcome for the is the desired outcome for the customer ever discussed?customer ever discussed?


“Better By Design”: A National Strategy

NZ = DesignNZ = Design ExcellenceExcellence

New Zealand bets its future onNew Zealand bets its future on design that shouts “cool design that shouts “cool

New Zealand.” New Zealand.”

CCDDOO* ** **** ** ****Chief *Chief DesignDesign Officer Officer

**Minister for **Minister for DesignDesign***Deputy Prime Minister for ***Deputy Prime Minister for DesignDesign and and CreativityCreativity


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

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

live in an information-based society whose icon is the live in an information-based society whose icon is the

computer. computer. We stand facinWe stand facingg the fifth kind of societthe fifth kind of society: y: the Dream Societthe Dream Society.y. … Future … Future

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

products and services.”products and services.”

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

Saatchi & Saatchi CEO Kevin Saatchi & Saatchi CEO Kevin Roberts declares brands “dead”—Roberts declares brands “dead”—

gives us “lovemarks” instead.gives us “lovemarks” instead.

Top 10 “Tattoo Brands”*

Harley .… 18.9%Harley .… 18.9%Disney .... 14.8Disney .... 14.8

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

Adidas …. 3.1Adidas …. 3.1Absolut …. 2.6Absolut …. 2.6

Nintendo …. 1.5Nintendo …. 1.5

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

What % of customers would tattoo What % of customers would tattoo the brand name somewhere on their the brand name somewhere on their

body? (Talk about “love.”)body? (Talk about “love.”)

CCLL OO*

*Chief Lovemark Officer

Ladder.2007: 4 of 7!Ladder.2007: 4 of 7!

Lovemark Lovemark Dreams Come TrueDreams Come True

Spellbinding Experiences Spellbinding ExperiencesGamechanging SolutionsGamechanging Solutions

ServicesServicesGoodsGoods

Raw MaterialsRaw Materials

Value-added beyond theValue-added beyond the old triumvirate—raw materials, old triumvirate—raw materials,

goods services. (Four new “rungs.”)goods services. (Four new “rungs.”)

$55$55BB

Backtrack re “soft”: IBM in mid-90s Backtrack re “soft”: IBM in mid-90s effectively gives up on “M” effectively gives up on “M”

[machines]; starts selling “solutions” [machines]; starts selling “solutions” [IBM Global Services]; builds world’s [IBM Global Services]; builds world’s biggest Professional Services Firm, biggest Professional Services Firm,

at close to $60 billion.at close to $60 billion.

I. LAN Installation Co. (3%)

II. Geek Squad. (30%.)

III. Acquired by BestBuy.

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

Local “LAN [Local Area Network] Local “LAN [Local Area Network] Installation Co. re-labels as “Geek Installation Co. re-labels as “Geek

Squad.” Prospers. Starts doing some Squad.” Prospers. Starts doing some work for electronics retailer Best Buy. work for electronics retailer Best Buy. Eventually BB purchases Geek SquadEventually BB purchases Geek Squad

—makes their “solutions” package —makes their “solutions” package the driver of a revised BB strategy for the driver of a revised BB strategy for

differentiation.differentiation.

Ladder.2007: 4 of 7!Ladder.2007: 4 of 7!

Lovemark Lovemark Dreams Come TrueDreams Come True

Spellbinding Experiences Spellbinding ExperiencesGamechanging SolutionsGamechanging Solutions

ServicesServicesGoodsGoods

Raw MaterialsRaw Materials

New (4 of 7) Value-added “Ladder”:New (4 of 7) Value-added “Ladder”: Plays to Women’s Inherent Strengths! Plays to Women’s Inherent Strengths!

Lovemark/Lovemark/FF Dreams Come True/Dreams Come True/FF

Spellbinding Experiences/ Spellbinding Experiences/FFGamechanging Solutions/Gamechanging Solutions/FF

Services/FGoods/M

Raw Materials/M

VA “Teaching Moment”

““Andy pointed to Andy pointed to a molding, about a molding, about halfway up the halfway up the

wall …”wall …”

PepsiCo’s former president, Andy PepsiCo’s former president, Andy Pearson, points out to TP that the Pearson, points out to TP that the

billions upon billions of Pepsi market billions upon billions of Pepsi market cap derived a “hard” half-roomfulcap derived a “hard” half-roomful

of Pepsi syrup. of Pepsi syrup.

The The BootBoot … and … and TimberlandTimberland

The The TomatoTomato// FarmerFarmer … and … and

Campbell’sCampbell’s

Farmer [“hard”] gets a couple of Farmer [“hard”] gets a couple of pennies—Campbell gets $1.50 for a pennies—Campbell gets $1.50 for a can off soup. $1.48 is “soft stuff.” can off soup. $1.48 is “soft stuff.”

Likewise Timberland, where “farmer” Likewise Timberland, where “farmer” is de facto Chinese manufacturer.is de facto Chinese manufacturer.

#7#7



Stability!Famous CEOs!“Hard” stuff!

“Success”!

Plans!

““Strive for Strive for Excellence. Excellence.

Ignore Ignore success.”success.” —Bill Young, race

car driver (courtesy Andrew Sullivan)

““Excellence can be obtained if you:Excellence can be obtained if you:

... care more than others think... care more than others think is wise;is wise; ... risk more than others think ... risk more than others think is safe;is safe; ... dream more than others think ... dream more than others think is practical;is practical; ... expect more than others think ... expect more than others think is possible.”is possible.”

Source: Anon.Source: Anon. (Posted @ tompeters.com by (Posted @ tompeters.com by K.Sriram, November 27, 2006 1:17 AM)K.Sriram, November 27, 2006 1:17 AM)

EXCELLENCEEXCELLENCE..

Circa 1982.Circa 1982.

Excellence1982: The Bedrock “Eight Basics”Excellence1982: The Bedrock “Eight Basics”

1. A Bias for 1. A Bias for ActionAction2. Close to the 2. Close to the CustomerCustomer3. 3. AutonomAutonomyy and and EntreEntreppreneurshireneurshipp4. Productivity Through 4. Productivity Through PeoPeopplele5. 5. Hands OnHands On, , Value-DrivenValue-Driven6. 6. Stick toStick to the Knitting the Knitting7. 7. SimSimpplele Form, Form, LeanLean Staff Staff8. Simultaneous 8. Simultaneous Loose-TightLoose-Tight Properties” Properties”

““Breakthrough” 82*Breakthrough” 82*

People! People! CustomersCustomers

! ! Action! Action! Values! Values!

**In Search of ExcellenceIn Search of Excellence

ExIn*: 1982-2002/Forbes.com

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

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

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

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

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

Approximately 640640 Index entries: Customer/s

(service, retention, loyalty), 44. People (employees, motivation, morale,

worker/s), 00. Innovation (product development, research &

development, new products), 00.

EXCELLENCE. EXCELLENCE. ASPIRATION.ASPIRATION.

2006.2006.

Why in Why in the the World did World did youyou go to go to SiberiaSiberia??

EnterpriseEnterprise* ** (*at its best):* ** (*at its best): An An emotionalemotional, , vitalvital, , innovativeinnovative, , jojoyyfulful, , creativecreative, , entreentreppreneurialreneurial endeavor endeavor that elicits maximum that elicits maximum

concerted humanconcerted human potential in the potential in the wholeheartedwholehearted serviceservice of others of others.****Employees, Customers, Suppliers, Communities, Owners, Temporary partners**Employees, Customers, Suppliers, Communities, Owners, Temporary partners

The Peters PrinciThe Peters Principplesles:: Enthusiasm. Enthusiasm.

Emotion. Emotion. ExcellenceExcellence.. Energy. Excitement. Service. Energy. Excitement. Service.

Growth. Creativity. Growth. Creativity. Imagination. Vitality. Joy. Imagination. Vitality. Joy.

Surprise. Independence. Spirit. Surprise. Independence. Spirit. Community. Limitless human Community. Limitless human

potential. Diversity. potential. Diversity.

Profit.Profit. Innovation. Design. Innovation. Design. Quality. Entrepreneurialism. Quality. Entrepreneurialism.

Wow!Wow!

““Back to basics” in Siberia—Back to basics” in Siberia—business at it’s best. (I pondered this business at it’s best. (I pondered this

a loooooong time.)a loooooong time.)

2007.2007.

SEPTEMBER.SEPTEMBER.SYDNEY.SYDNEY.DRUCKER DRUCKER TRIBUTE.TRIBUTE.

““I have always I have always believed that the believed that the

purpose of the purpose of the corporation is to be a corporation is to be a

blessing to the blessing to the employees.”employees.” * * —Boyd Clarke—Boyd Clarke

*TP: An “organization” is, in fact and after all*TP: An “organization” is, in fact and after all is said and done, a/the “house” in which is said and done, a/the “house” in which

most of us “live” most of the time. most of us “live” most of the time.

Organizations exist to serve. Period.Organizations exist to serve. Period.Leaders live to serve. Period.Leaders live to serve. Period.

Passionate servant leaders, determined to create a Passionate servant leaders, determined to create a legacy of earthshaking transformation in their domainlegacy of earthshaking transformation in their domain create/must create/must necessarilynecessarily create organizations which create organizations which

are …are … no less than Cathedrals in no less than Cathedrals in which the full and awesome which the full and awesome

power of the Imagination and power of the Imagination and Spirit and native Spirit and native

Entrepreneurial flairEntrepreneurial flair of of diverse individualsdiverse individuals is is

unleashedunleashed … … In passionate pursuit of jointly In passionate pursuit of jointly perceived soaring purposeperceived soaring purpose and personal and and personal and

community and client service Excellence. community and client service Excellence.

The ultimate “soft” language—butThe ultimate “soft” language—but the basis for the maximum in “hard the basis for the maximum in “hard

results.” (Think about it.)results.” (Think about it.)

““We are a We are a ‘Life ‘Life

Success’ Success’ Company.”Company.”

Dave Liniger, founder, RE/MAX


“the rules.”“the rules.”

CauseCause (worthy of commitment)(worthy of commitment)

SpaceSpace (room for/encouragement(room for/encouragement

for initiative) for initiative)

DecencyDecency (respect, (respect,

humane)humane)

Another effort to summarize.Another effort to summarize.

The Manager’s The Manager’s Book of Book of DecenciesDecencies: :

How Small How Small /gestures Build /gestures Build

Great Companies.Great Companies. ——

Steve Harrison, AdeccoSteve Harrison, Adecco

What a title! What a title! I know nothing like it!I know nothing like it!

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

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

college president. college president. He was He was seriously interested in seriously interested in

who you were and what who you were and what you had to sayyou had to say.”.”

Sara Lawrence-Lightfoot, Respect

““You can make more You can make more friends in two months friends in two months bbyy becominbecomingg interested in interested in

other other ppeoeopple thanle than you can you can in two years by trying to in two years by trying to

get other people get other people interested in you.”interested in you.” —Dale

Carnegie


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

If not If not “Excellence,“Excellence,

” what?” what?

#8#8




Famous CEOs!“Hard” stuff!“Success”!

Plans!

““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)

What makes What makes God laugh?God laugh?

PeoplePeople makingmaking plans!plans!


“one idea.” “one idea.”1966-2007.1966-2007.

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.

The only damned thing I’ve learned in The only damned thing I’ve learned in 40+ years! 40+ years! (No kidding!!!!!!)(No kidding!!!!!!)

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

captain “yes.”

Captain “No.”

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

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—Michael Schrage

““ExperimenExperiment t

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

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

““RewardReward excellent failures.

PunishPunish mediocre

successes.”Phil Daniels, Sydney exec

““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. things. If If ppeoeopple tell me le tell me thetheyy skied all da skied all dayy and never and never fell down, I tell them to trfell down, I tell them to tryy

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

““We We performed performed

more more operations.”operations.”

The Nobel laureate in medicine The Nobel laureate in medicine reveals [to me] his “success secret” reveals [to me] his “success secret”

vs others with eyes on the prize.vs others with eyes on the prize.

SERIOUS SERIOUS PLAYPLAY

““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)

!!!!!!!!!!!!!!!!!!!!

Screw. Screw. things.things.

Up.Up.

““Fail .Fail . Forward. Forward.

Fast.”Fast.”High Tech CEO, Pennsylvania

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

—Samuel Beckett

“The secret of fast progress is

inefficiency, fast and furious and

numerous failures.”

—Kevin Kelly

“Natural selection is death. ... Without huge amounts of death, organisms do not change over time. ...

Death is the mother of structure. ... It took four

billion years of death ... to invent the human mind ...” —

The Cobra Event

““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

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

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

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

Courtesy EDS founder Ross Perot—Courtesy EDS founder Ross Perot—on EDS’s strategy.on EDS’s strategy.

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

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

what you what you can’tcan’t dodo in in engineering school.engineering school. He He

started off with 20 employees, and by the middle of started off with 20 employees, and by the middle of the war had 30,000 working for him. He turned out the war had 30,000 working for him. He turned out

20,000 landing craft. D.D. Eisenhower told me, 20,000 landing craft. D.D. Eisenhower told me, ‘Andrew Higgins won the war for us. He did it ‘Andrew Higgins won the war for us. He did it

without engineers.’ ”without engineers.’ ” —Stephen Ambrose/—Stephen Ambrose/Fast CompanyFast Company

Life 101: A 40-year ReflectionLife 101: A 40-year Reflection

Go 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.

Think!Think!vs.vs.

do!do!

The Limits of “Systems The Limits of “Systems Thinking”: Thinking”:

Surprise, Surprise, Transformation & Transformation &

Excellence Excellence Through Through

Spontaneous Spontaneous DiscoveryDiscovery

F.A. Hayek described capitalism-a F.A. Hayek described capitalism-a market economy as a “spontaneous market economy as a “spontaneous

discovery process.” [TP: discovery process.” [TP: Try it!Try it!]]

“Linearist”: Plan it!Plan it!“Non-linearist”: Try it!Try it!

“Linearist”:

hypothesize!hypothesize!“Non-linearist”:

experiment!experiment!

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”

I proceeded by trial and error and instinct, I proceeded by trial and error and instinct, and each experiment led to/suggested and each experiment led to/suggested

another experiment (or 2 or 10) and to a another experiment (or 2 or 10) and to a greater understanding of potential—the greater understanding of potential—the

“plan,” though there was none, made itself. “plan,” though there was none, made itself. And it was far, far better (more ambitious, And it was far, far better (more ambitious, more interesting, more satisfying) than I more interesting, more satisfying) than I

would have imagined. In fact, the result to would have imagined. In fact, the result to date bears little or no relationship to what I date bears little or no relationship to what I

was thinking about at the start—a trivialwas thinking about at the start—a trivial self-designed chore may become the engine self-designed chore may become the engine

of my next decade; the “brushcutting of my next decade; the “brushcutting project” project”

is now leading Susan and I to view our is now leading Susan and I to view our entire property, and what it might become-entire property, and what it might become-

represent, in a new light.represent, in a new light.

F.A. My little summer project F.A. My little summer project becomes a centerpiece of my future. becomes a centerpiece of my future.

That wasn’t the “plan.” I That wasn’t the “plan.” I [spontaneously] discovered it [spontaneously] discovered it

along the way.along the way.

““Linearist”: Linearist”:

a>b*a>b*“Non-linearist”: “Non-linearist”:

b>a**b>a****Attitude shapes behaviorAttitude shapes behavior****Behavior shapes attitudeBehavior shapes attitude

Tradition says that your attitude Tradition says that your attitude determines your behavior. My sort determines your behavior. My sort

says your behavior determines your says your behavior determines your attitude—the difference is attitude—the difference is

philosophical and enormous.philosophical and enormous.


the the “Lessons.”“Lessons.”1966-2007.1966-2007.

4/404/40

You caught me out. Now I say I You caught me out. Now I say I learned FOUR things in 40 years.learned FOUR things in 40 years.

DECENTRALIZATIONDECENTRALIZATION..

EXECUTION.EXECUTION.ACCOUTABILITY.ACCOUTABILITY.

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

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

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

You caught me out. Now I say I You caught me out. Now I say I learned learned FOURFOUR things in 40 years. things in 40 years.

Conrad Hilton, at a gala celebrating his life,Conrad Hilton, at a gala celebrating his life, was asked, “What was the most important lesson you’ve learned was asked, “What was the most important lesson you’ve learned

in you long and distinguished career?” in you long and distinguished career?”

His immediate answer: His immediate answer: ““remember remember to tuck the to tuck the

shower curtain shower curtain inside the inside the bathtubbathtub””

Ex-e-cu-Ex-e-cu-tion!tion!

The “Big Three” “Justa”sThe “Big Three” “Justa”s

“The strategy is right. It’s “The strategy is right. It’s justjust a a communicationscommunications problem.” problem.”

“The plan is dead on—it’s “The plan is dead on—it’s just just anan imimpplementationlementation problem.” problem.”

“Look, we’ve got the strategy “Look, we’ve got the strategy right—we right—we justjust need to fix need to fix

the p the peoeopplele bit.” bit.”

idiots!idiots!

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.”

Organizations calcify.Organizations calcify.

CF: CF: 30%30% (no (no

salesfolk)salesfolk)

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

When Carly Fiorina ran HP, division When Carly Fiorina ran HP, division honchos controlled 30% of their honchos controlled 30% of their budgets. Under Mark Hurd, the # budgets. Under Mark Hurd, the #

jumped to 80%—which is the key to jumped to 80%—which is the key to accountability for execution.accountability for execution.




Plans!

The “Esteemed Eight”:The “Esteemed Eight”:

SMEs!SMEs!Private companies!Private companies!

“Dull” industries!“Dull” industries!Productive churn!Productive churn!Laudable CEOs!Laudable CEOs!

“Soft” stuff!“Soft” stuff!Excellence!Excellence!

Action-Execution!Action-Execution!

#9#9

One more.One more.

The The “nonsense “nonsense

nine”!nine”!

The “Nonsense Nine”:The “Nonsense Nine”:



Plans!

Men!

Not Just America …Not Just America …

“Boys Falling “Boys Falling SevenSeven Years Years Behind Girls Behind Girls

at GCSE Level”at GCSE Level” —headline, Weekly Telegraph, UK, 10.25.06

““THE NEW GENDER THE NEW GENDER GAP: From kinder-GAP: From kinder-

garten to grad garten to grad school, boys are school, boys are

becoming the becoming the second sex”second sex” —Cover story,

BusinessWeek

Girls Again Girls Again Outshine BoysOutshine Boys In CBSE Class In CBSE Class

12 Exams 12 ExamsSource: Headline, Dateline Source: Headline, Dateline New DelhiNew Delhi (0526.2007; (0526.2007; Khaleej Times)Khaleej Times)

Men [boys] race toward irrelevance.Men [boys] race toward irrelevance.

““Forget Forget ChinaChina, , IndiaIndia and the and the

InternetInternet: Economic : Economic Growth Is Driven Growth Is Driven

by by WomenWomen.”.” —Headline,

Economist, April 15, 2006, Leader, page 14

WOW!*WOW!**I believe it—it’s been my life’s work, or a big part *I believe it—it’s been my life’s work, or a big part

thereof, since 1996. But this in 2006 ices the Big Cake.thereof, since 1996. But this in 2006 ices the Big Cake.

Women’sWomen’s Trifecta+ Trifecta+

**BuyBuy * *WealthWealth

**LeadLead

++ECLIPSE OF ECLIPSE OF MALESMALES

(Old/Retire; Young/Poorly educated)

““Women Women areare thethe

majority majority market”market”

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

Repeat:Repeat: “Goldman Sachs in Tokyo “Goldman Sachs in Tokyo has developed an index of 115 has developed an index of 115 companies poised to benefit companies poised to benefit

from women’s increased from women’s increased purchasing power; purchasing power; over the past over the past

decade the value of shares in decade the value of shares in Goldman’s basket has risen by Goldman’s basket has risen by

96%, against the Tokyo 96%, against the Tokyo stockmarket’s rise stockmarket’s rise

of 13%of 13%.”.” —Economist, April 15

?????????

Home Furnishings … 94%Home Furnishings … 94%Vacations … 92% Vacations … 92% (Adventure Travel … 70%/ $55B travel equipment)

Houses … 91%Houses … 91%D.I.Y. D.I.Y. (major “home projects”) … 80% … 80%

Consumer Electronics … 51% Consumer Electronics … 51% (66% home computers)

Cars … 68% (90%)Cars … 68% (90%)AllAll consumerconsumer purchasespurchases … … 83%83%

Bank Account … 89%Bank Account … 89%Household investment decisions … 67%Household investment decisions … 67%Small business loans/biz starts … 70%Small business loans/biz starts … 70%

Health Care … 80%Health Care … 80%

Women’s Commercial Women’s Commercial Purchasing PowerPurchasing Power

Purchasing mgrs. &Purchasing mgrs. & agents: 51% agents: 51%HR: >>50%HR: >>50%

Admin officers: >50%Admin officers: >50%

Source: Martha Barletta, Source: Martha Barletta, Marketing to WomenMarketing to Women

1970-19981970-1998

Men’s median income: +0.6%Men’s median income: +0.6%

Women’s median income: Women’s median income: + 63%+ 63%

Source: Martha Barletta, Source: Martha Barletta, Marketing to WomenMarketing to Women

WomenWomenHousehold spending: 80%80%Investment decisions: 53%53%Home improvement purchase decisions: 80%80%New cars: 60%+60%+Computers: 60%60%Managers and professionals, overall: 51%51%New businesses started: 70%70%* (*Women-owned businesses as a share of all new businesses: Employee growth, 3X; Sales growth, 4X.)

Source: Marti Barletta, PrimeTime Women (2007)

USA/F.Stats: Short ’n (Very) Sweet

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

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

57% BA degrees (2002); = ed & social strata, no wage gap57% BA degrees (2002); = ed & social strata, no wage gap

60% Internet users; >50% primary users of60% Internet users; >50% primary users of electronic equipment electronic equipment

>50% biz trips>50% biz trips

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

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

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

Source: Fara Warner, The Power of the PurseThe Power of the Purse

Women > 50% of Household Income in >50% of Women > 50% of Household Income in >50% of households. In 48% of the 55% of households/married households. In 48% of the 55% of households/married

couples, women provide >50% of income. 27% of couples, women provide >50% of income. 27% of households are headed by a single female. 75% of married households are headed by a single female. 75% of married female execs with the rank of VP or above out earn their female execs with the rank of VP or above out earn their

spouse. Women control 51% of private wealth in the U.S.; spouse. Women control 51% of private wealth in the U.S.; head 40% of households with >$600K assets; 47% of head 40% of households with >$600K assets; 47% of

market investors are women.market investors are women.

Major Credit Union: pre Y2K, modal customer was 53-year-Major Credit Union: pre Y2K, modal customer was 53-year-old family man; today, 46-year-old single working woman.old family man; today, 46-year-old single working woman.

Commercial: 51% purchasing managers are women.Commercial: 51% purchasing managers are women.

Women make >80% consumer purchases; businesswomen Women make >80% consumer purchases; businesswomen make >90% of household purchasing decisions. Women: make >90% of household purchasing decisions. Women:

70% of travel decisions; purchase 57% of consumer 70% of travel decisions; purchase 57% of consumer electronics; write 80% of personal checks; purchase >50% electronics; write 80% of personal checks; purchase >50%

of cars (primary influence >80%).of cars (primary influence >80%).

Source: Don’t Think Pink: What Really Makes Women Buy—and How to Increase Your Share of This Crucial Market, Lisa Johnson & Andrea Learned

Internet Internet users: users: 60%F60%F**

*“manage their lives and the lives of their families” —Kelley Mooney, president, Resource Interactive

Source: Fara Warner, The Power of the Purse

The “91% Factor”!The “91% Factor”!

More than More than 99 in in 1010 women women age 35 - 49 say theyage 35 - 49 say they

either either makemake or at least or at least eeqquallually y influenceinfluence their their household purchaseshousehold purchases of of homehome electronicselectronics..

Source: Andrea Learned, co-author, Source: Andrea Learned, co-author, Don’t Think PinkDon’t Think Pink

2.62.6 vs.vs.

2121

“Women come out betterWomen come out better on almost everon almost everyy count count as investorsas investors … They are less likely to hold a losing investment too

long, and less likely to wait too long to sell a winner; they’re also less likely to

put too much money into a single investment or to buy a reputedly hot

stock without doing sufficient research.”

Source: The Merrill report: “When It Comes to Investing,

Gender A Strong Influence on Behavior.”, Atlantic

““Women Beat Men Women Beat Men at Art of Investing”at Art of Investing”

Source: Headline, Source: Headline, Miami HeraldMiami Herald, reporting on a study by , reporting on a study by

Profs. Terrance Odean and Brad Barber, UC DavisProfs. Terrance Odean and Brad Barber, UC Davis (Cause: Guys are “in and out” of stocks(Cause: Guys are “in and out” of stocks

more often; women choose carefully and hold more often; women choose carefully and hold on for the long term)on for the long term)

JBQ: Stop Treating Women Investors Like Idiots!

“Why all this focus on women and our lack of investment guts? A far greater problem, it seems to me, is trigger-happy speculation,

mostly by men. The kind of guys whose family savings went south with the dot-coms. Imagine a list of their money mistakes: Shoot from the hip. Overtrade their accounts. Believe they’re

smarter than the market. Think with their mouse rather than their brain. Praise their own genius when stocks go up. Hide their mistakes from

their wives.”

Source: Newsweek 01.08.01

Not just an “American phenomenon.”Not just an “American phenomenon.”

““The The most most significant variablesignificant variable

inin everyevery sales situation is sales situation is

thethe gendergender of the buyer, of the buyer, and more importantly, how and more importantly, how

the salesperson the salesperson communicates to the communicates to the

buyer’s gender.”buyer’s gender.” —Jeffery Tobias Halter, Selling to Men, Selling to Women

The Perfect Answer

Jill and Jack buy slacks in black…

Selling to men:Selling to men: The The TRANSACTIONTRANSACTION Model Model

Selling to Women:Selling to Women: The The RELATIONALRELATIONAL Model Model

Source: Source: Selling to Men, Selling to WomenSelling to Men, Selling to Women, Jeffery Tobias Halter, Jeffery Tobias Halter

P-l-e-a-s-e Read …

Fara WarnerFara Warner:: The Power of The Power of

the Pursethe Purse

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

not via kids)

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

P&GP&G (more than “house cleaner”)

DeBeersDeBeers (“right-hand rings”/$4B)

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

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

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

Source: Fara Warner/Fara Warner/The Power of the PurseThe Power of the Purse

Cases!!Cases!!

“We simply had

stopped being

relevant to women.”

—Kay Napier, SVP Marketing (Fara Warner, The Power of the Purse, “From Minority to Majority: McDonald’s Discovers the

Woman Inside the Mom”)

“Mostly Moms”

““Women were either ignored Women were either ignored in favor of focusing on men—in favor of focusing on men—

generally considered the generally considered the industry’s most frequent industry’s most frequent

users and therefore its most users and therefore its most important consumers—or they important consumers—or they were cast in the role of moms were cast in the role of moms who were simply conduits to who were simply conduits to

their children.”their children.” —Fara Warner, The Power of

the Purse, “From Minority to Majority: McDonald’s Discovers the Woman Inside the Mom”

““McDonald’s shifted its strategy McDonald’s shifted its strategy toward women from one of toward women from one of

‘minority’ consumers who served ‘minority’ consumers who served as a conduit to the important as a conduit to the important

children’s market to one in which children’s market to one in which women are the company’s women are the company’s

majority consumers and the main majority consumers and the main driver behind menu and driver behind menu and

promotion innovationpromotion innovation.”.” —Fara Warner, The Power of the Purse, “From Minority to Majority: McDonald’s Discovers the Woman Inside the Mom”

1. Men and women are different.1. Men and women are different.2. Very different.2. Very different.3. 3. VERY, VERY DIFFERENTVERY, VERY DIFFERENT..4. Women & Men have a-b-s-o-l-u-t-e-l-y4. Women & Men have a-b-s-o-l-u-t-e-l-y nothing in common. nothing in common.5. Women buy lotsa stuff.5. Women buy lotsa stuff.

6. 6. WOMEN BUY A-L-L THE WOMEN BUY A-L-L THE STUFFSTUFF..7. Women’s Market = Opportunity No. 1.7. Women’s Market = Opportunity No. 1.8. Men are (STILL) in charge.8. Men are (STILL) in charge.9. 9. MEN ARE … TOTALLY, HOPELESSLYMEN ARE … TOTALLY, HOPELESSLY CLUELESS ABOUT WOMEN. CLUELESS ABOUT WOMEN.

10. 10. Women’s Women’s Market = Market =

Opportunity Opportunity No. 1.No. 1.

My “conclusions”—tongue not My “conclusions”—tongue not particularly in cheek.particularly in cheek.

““Since Since 19701970, , women have women have

held held twotwo out of out of every every threethree new new jobs created.”jobs created.” —FT,

10.03.2006

““ForForgget China, India and the et China, India and the Internet: Economic Growth Is Driven Internet: Economic Growth Is Driven

bbyy Women Women.”.” [Headline.] “Even today in the modern, developed world, surveys show that parents still prefer to have

a boy rather than a girl. One longstanding reason boys have been seen as a greater blessing has been that they are expected to become better economic providers for their

parents’ old age. Yet it is time for parents to think again. Girls Girls may now be a better investment.”may now be a better investment.” “Girls get better grades in

school than boys, and in most developed countries more women than men go to university. Women will thus be better equipped Women will thus be better equipped for the new jobs of the 21st century, in which brains count a lot for the new jobs of the 21st century, in which brains count a lot

more than brawnmore than brawn.. … And women are more likely to provide sound advice on investing their parents’ nest—e.g.: surveys

show that women consistently achieve higher financial returns than men do. Furthermore, the increase in female employment in the rich world has been the main driving force of growth in

the last couple of decades. Those women have contributed more Those women have contributed more to global GDP growth than have either new technology or theto global GDP growth than have either new technology or the

new giants, India and China.”new giants, India and China.” Source: EconomistEconomist, April 15, Leader, page 14

Continuing on page 73: ““A Guide to Womenomics: A Guide to Womenomics: The Future of the World EconomThe Future of the World Economyy Lies Lies

IncreasinIncreasinggllyy in Female Hands in Female Hands.”.” (Headline.) More stats: Around the globe since 1980, women have filled “two

new jobs for everyone taken by a man.” “Women are becoming more important in the global marketplace not just as workers, but also as consumers, entrepreneurs, managers and investors.” Re consumption, Goldman Sachs in Tokyo has Re consumption, Goldman Sachs in Tokyo has developed an index of 115 companies poised to benefit from developed an index of 115 companies poised to benefit from women’s increased purchasing power; over the past decade women’s increased purchasing power; over the past decade the value of shares in “Goldman’s basket has risen by 96%, the value of shares in “Goldman’s basket has risen by 96%, against the Tokyo stockmarket’s rise of 13%against the Tokyo stockmarket’s rise of 13%.”.” A couple of

final assertions: (1) It is now agreed that “the single best investment that can be made in the developing world” is educating girls. (2) Also,

surprisingly, nations with the highest female laborforce participation rates, such as Sweden and the U.S., have the highest fertility rates; and those with the lowest

participation rates, such as Italy and Germany, have the lowest fertility rates.

Source: EconomistEconomist,, April 15, page 73

““AS AS LEADERS, LEADERS, WOMEN WOMEN

RULERULE:: New Studies find

that female managers outshine their male counterparts in almost every measure”

TITLE/ Special Report/ TITLE/ Special Report/ BusinessWeekBusinessWeek

Lawrence A. Pfaff & Assoc.Lawrence A. Pfaff & Assoc.

— 2 Years, 941 mgrs (672M, 269F);— 2 Years, 941 mgrs (672M, 269F); 360º feedback 360º feedback

— Women: better in 20 of 20 — Women: better in 20 of 20 categories; 15 of 20 with statistical categories; 15 of 20 with statistical

significance, incl. decisiveness, significance, incl. decisiveness, planning, setting stds.)planning, setting stds.)

— “Men are not rated significantly — “Men are not rated significantly higher by any of the raters in anyhigher by any of the raters in any

of the areas measured.” (LP) of the areas measured.” (LP)

Women’s Strengths Match New Women’s Strengths Match New Economy ImperativesEconomy Imperatives:: Link [rather than rank] Link [rather than rank]

workers; workers; favor interactive-collaborative leadership favor interactive-collaborative leadership style [empowerment beats top-down decision style [empowerment beats top-down decision

making];making]; sustain fruitful collaborations; comfortable sustain fruitful collaborations; comfortable with sharing information; with sharing information; see redistribution of power see redistribution of power

as victory, not surrenderas victory, not surrender; favor multi-dimensional ; favor multi-dimensional feedback; feedback; value technical & interpersonal skills, value technical & interpersonal skills, individual & group contributions equally;individual & group contributions equally; readily readily

accept ambiguity; accept ambiguity; honor intuition as well ashonor intuition as well as pure “rationality”; pure “rationality”; inherently flexible; inherently flexible; appreciate appreciate

cultural diversitycultural diversity. —Judy B. Rosener, America’s Competitive Secret: Women Managers

““Guys want to put everybody inGuys want to put everybody in their hierarchical place. Like, their hierarchical place. Like, should I have more respect forshould I have more respect for

you, or are you somebody that’s you, or are you somebody that’s south of me?”south of me?” —Paul Biondi, Mercer Consultants—Paul Biondi, Mercer Consultants

[from [from It’s Not Business, It’s PersonalIt’s Not Business, It’s Personal, Ronna Lichtenberg], Ronna Lichtenberg]

““On average, women and men On average, women and men possess a number of different possess a number of different

innate skills. innate skills. And current And current trends suggest that many trends suggest that many sectors of the twenty-first-sectors of the twenty-first-

century economic century economic community are going to community are going to

need the natural talents of need the natural talents of women.”women.” —Helen Fisher, —Helen Fisher, The First Sex: The The First Sex: The

Natural Talents of Women and How They Are Changing Natural Talents of Women and How They Are Changing the Worldthe World

Women Leaders’ Time Has Come …Women Leaders’ Time Has Come …

Project team (old):Project team (old): 23 people, all from our 23 people, all from our company (More or less amenable to “orders”)company (More or less amenable to “orders”)Project team (new):Project team (new): 43 people from 7 companies 43 people from 7 companies in 4 countries on 3 continents (Moved only by in 4 countries on 3 continents (Moved only by effective persuasion and development of effective persuasion and development of common commitment)common commitment)

“Worker,” circa 1982:“Worker,” circa 1982: Rote work, incl. most Rote work, incl. most white-collar work (Amenable to “orders,” power white-collar work (Amenable to “orders,” power exercised directly)exercised directly)“Worker,” circa 2007:“Worker,” circa 2007: Project work, team work, Project work, team work, mixed-group work, creative work, co-creation with mixed-group work, creative work, co-creation with client—microprocessors do the “rote stuff” client—microprocessors do the “rote stuff” (Commitment is voluntary, leadership is by (Commitment is voluntary, leadership is by developing positive relationships, inducing developing positive relationships, inducing “creatives” to stretch, power exercised indirectly)“creatives” to stretch, power exercised indirectly)

““Society is based Society is based on male standards on male standards with women seen with women seen

as anomalies as anomalies deviating from the deviating from the male norm.”male norm.” — — Bi Puvaneu, Bi Puvaneu,

Institute for Future Studies (Stockholm)Institute for Future Studies (Stockholm)

The Core Argument: Women [Ought to] Rule!The Core Argument: Women [Ought to] Rule!

1. We are in a War for Talent.1. We are in a War for Talent.2. The war will intensify.2. The war will intensify.3. There is a severe shortage of effective leaders3. There is a severe shortage of effective leaders at all levels. at all levels.4. Women are under-represented in our4. Women are under-represented in our leadership ranks at or near the top. leadership ranks at or near the top.5. Women and men are different; “new science”5. Women and men are different; “new science” reinforces this view. reinforces this view.6. Women’s strengths match the New Economy’s6. Women’s strengths match the New Economy’s leadership needs—to a striking degree. leadership needs—to a striking degree.7. Women are also the principal purchasers of7. Women are also the principal purchasers of goods and services—retail and commercial. goods and services—retail and commercial.8. 8. Ergo, women are a large part of “the answer” Ergo, women are a large part of “the answer”

to the War for Talent/leadership shortage to the War for Talent/leadership shortage issue/opportunity. issue/opportunity.

“Catalyst just completed a study showing that companies with at

least three women directors performed significantly better

than average in terms of return on equity (16.7% better), return on

sales (16.8%), and return on invested capital (10%)

Source: Newsweek, 1015.07/16% of S&P500 board members are women; 9% (45) no women

10 UNASSAILABLE REASONS WOMEN RULE10 UNASSAILABLE REASONS WOMEN RULE

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

So what exactly is the point of So what exactly is the point of menmen??

““Are men Are men obsolete?obsolete?

””

—Headline, —Headline, USN&WRUSN&WR

Q.E.D.Q.E.D.

“One thing is certain: Women’s rise to power, which is linked to the increase in wealth per capita, is happening in all domains and at all

levels of society. Women are no longer content to provide efficient labor or to be consumers with rising budgets and more autonomy to spend. … This is just the beginning. The

phenomenon will only grow as girls prove to be more successful than boys in the school

system. For a number of observers, For a number of observers, we have already entered the age we have already entered the age of ‘womenomics,’ the economy as of ‘womenomics,’ the economy as

thought out and practiced by a thought out and practiced by a womanwoman.”.” —Aude Zieseniss de Thuin, Financial Times, 10.03.2006

“ ‘“ ‘Womenomics,’ Womenomics,’ the economy as the economy as thought out and thought out and practiced by a practiced by a

woman.”woman.” —Aude Zieseniss de Thuin,

Financial Times, 10.03.2006

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

The “Nonsense Nine”:The “Nonsense Nine”:



Plans!

Men!

The “Notable Nine”:The “Notable Nine”:

SMEs!SMEs!Private companies!Private companies!

“Dull” industries!“Dull” industries!Churn!Churn!

Laudable CEOs!Laudable CEOs!“Soft” stuff!“Soft” stuff!Excellence!Excellence!

Action-Execution!Action-Execution!

Women!Women!

#1#100

And another …And another …

The The “terrible “terrible

ten”!ten”!

The “Terrible Ten”:The “Terrible Ten”:



Plans!Men!

Young!

2000-2010 Stats

18-44: -1%-1%

55+: ++2121%%(55-64: ++4747%%)

Subject: Marketers & StupiditySubject: Marketers & Stupidity

““It’s 18-It’s 18-44, 44,

stupid!”stupid!”

Subject: Marketers & StupiditySubject: Marketers & Stupidity

Or is it: “18-44 is

stupid, stupid!”

“Fifty-four years of age has been the highest cutoff point for any marketing initiative I’ve ever been involved in. Which is Which is pprettrettyy weird when weird when yyou consider aou consider agge 50 is rie 50 is rigght ht

about when about when ppeoeopple who have le who have worked all their lives start to worked all their lives start to have some monehave some moneyy to s to sppendend.”.”

—Marti Barletta, PrimeTime Women

“One particularly puzzling category of youth-obsession is the highly coveted target of men 18-34, and it’s always referred to as ‘highly

coveted category.’ Marketers have been distracted by men age 18-34 because they are getting harder to reach. So what? Who wants Who wants

to reach them?to reach them? Beyond fast food and beer, they don’t buy much of anything. … The

theory is that if you ‘get them while they’re

young, they’re yours for life.’ What What nonsensenonsense!”!”


Our marketers undervalue Our marketers undervalue women—and the surge (tsunami)women—and the surge (tsunami)

of boomers-geezers. of boomers-geezers.

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!““People turning 50 People turning 50

today have today have more more thanthan halfhalf of of their adult life their adult life

ahead of them.”ahead of them.” —Bill

Novelli, 50+: Igniting a Revolution to Reinvent America

Profound. (And more or less Profound. (And more or less profoundly new.)profoundly new.)

7/17/133

Average # of cars purchased per

household, “lifetime”: 1313Average # of cars bought per household after the “head of household” reaches

age 50: 77Source: Marti Barletta, PrimeTime Women

2020

$14,000,000,000,000$14,000,000,000,000--

$25,000,000,000,000 $25,000,000,000,000

Americans buy 13 cars in our Americans buy 13 cars in our lifetimes. We buy seven post-50!lifetimes. We buy seven post-50!

We are the We are the Aussies & Kiwis &Aussies & Kiwis & Americans & Americans & CanadiansCanadians. We are the . We are the Western EuropeansWestern Europeans & & JapaneseJapanese. We are the . We are the fastest growingfastest growing, , the the biggestbiggest, the , the wealthiestwealthiest, the , the boldestboldest, ,

the most (yes) the most (yes) ambitiouambitious, the most s, the most experimental & exploratoryexperimental & exploratory, the most , the most

differentdifferent, the most , the most indulgentindulgent, the most , the most difficult &difficult & demandingdemanding, the most , the most service & service & experience obsessedexperience obsessed, the most , the most vigorousvigorous, ,

(the (the leastleast vigorous,) the most vigorous,) the most health health consciousconscious, the most , the most femalefemale, the most , the most

profoundly important commercial market in profoundly important commercial market in the history of the world—and we will be the the history of the world—and we will be the Center of your universe for the next Center of your universe for the next twenty-twenty-

fivefive yearsyears. We have arrived!. We have arrived!

““Marketers attempts at reaching Marketers attempts at reaching those over 50 have been miserably those over 50 have been miserably

unsuccessful.unsuccessful. No market’s No market’s motivations and motivations and

needs are so poorneeds are so poorlyly understoodunderstood.”.”

——Peter Francese, founding publisher, American Demographics

Boomers’-Geezers’-Women’s Trifecta+Boomers’-Geezers’-Women’s Trifecta+

*Buy/*Buy/allall *Wealth/ *Wealth/allall

*time left/ *time left/ lotslots *Eclipse of males/*Eclipse of males/retireretire--diedie

Median Household Net WorthMedian Household Net Worth

<35: $7K35-44: $44K45-54: $83K

55-64: $112K55-64: $112K65-69: $114K65-69: $114K70-74: $120K70-74: $120K

>74: $100KSource: U.S. Census

BoomerBucks!BoomerBucks!Boomer turns 50: every 7 seconds. Boomer turns 50: every 7 seconds. 2009: majority of 2009: majority of U.S. households headed by someone over 50.U.S. households headed by someone over 50. 2006- 2006-2016: U.S. population up 22.9 million; 22.1 million in 2016: U.S. population up 22.9 million; 22.1 million in over-50 group. over-50 group. 2006: 1 in 5 adults is F, over 50.2006: 1 in 5 adults is F, over 50.

Women between 50-70 who are single: 35%. Women between 50-70 who are single: 35%. Age 45-Age 45-54: highest average income, $59, 021 (national 54: highest average income, $59, 021 (national

average is $42,209).average is $42,209). FASTEST GROWING INCOME FASTEST GROWING INCOME CATEGORY: WOMEN, 55-64CATEGORY: WOMEN, 55-64 (4X men in same category). (4X men in same category). Women, age 60-64: 50% still in workforce.Women, age 60-64: 50% still in workforce. Highest Highest net worth: families, 55-64 ($182,000). net worth: families, 55-64 ($182,000). People over People over

50: 70% to 79% of all financial assets; 80% of all 50: 70% to 79% of all financial assets; 80% of all savings accounts; 62% of all large Wall Street asset savings accounts; 62% of all large Wall Street asset accounts; 66% of $$ invested in the stock market.accounts; 66% of $$ invested in the stock market. Age 50+: 29% of population, 40% of total consumer Age 50+: 29% of population, 40% of total consumer spending, 50% of discretionary spending. spending, 50% of discretionary spending. Next 2 Next 2

decades: decades: BOOMERS WILL INHERIT $14 TRILLION-$25 BOOMERS WILL INHERIT $14 TRILLION-$25 TRILLIONTRILLION (“largest intergenerational transfer of (“largest intergenerational transfer of

wealth in history”). wealth in history”).

—Marti Barletta, —Marti Barletta, PrimeTime WomenPrimeTime Women

55-64 vs 25-34

E.g.: New cars & trucks: 20% more New cars & trucks: 20% more spending. Meals at full-service restaurants: spending. Meals at full-service restaurants:

+29%. Airfare: +38%. Sports equipment: +29%. Airfare: +38%. Sports equipment: +58%. Motorized recreational vehicles: +58%. Motorized recreational vehicles:

+103%. Wine: 113%. Maintenance, repairs +103%. Wine: 113%. Maintenance, repairs and home insurance: +127%. Vacation and home insurance: +127%. Vacation homes: +258%. Housekeeping & yard homes: +258%. Housekeeping & yard

services: +250% to +500%. services: +250% to +500%.

Source: Marti Barletta, PrimeTime Women

50+50+$7T$7T wealth (70%)/ $2T$2T annual income

50%50% all discretionary spending

79%79% own homes

40M40M credit card users41% new cars/48% luxury cars

$610B healthcare spending/74% prescription drugs

5% of advertisin5% of advertisingg tar targgetsetsKen Dychtwald, Age Power: How the 21st

Century Will Be Ruled by the New Old

44-65: “New “New Customer Customer Majority”Majority” *

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

““The New Customer The New Customer Majority is the only adult Majority is the only adult

market with realistic market with realistic prospects for significant prospects for significant sales growth in dozens of sales growth in dozens of

product lines for product lines for thousands of thousands of companies.”companies.”

—David Wolfe & Robert Snyder, Ageless Marketing

““Baby-boomer Baby-boomer WomenWomen: The : The Sweetest of Sweetest of

Sweet Spots for Sweet Spots for Marketers”Marketers” —David Wolfe and

Robert Snyder, Ageless Marketing

“‘“‘Age PowerAge Power’’ will rule the 21will rule the 21stst

century, and we are century, and we are woefully unprepared.”woefully unprepared.”

Ken Dychtwald, Age Power: How the 21st

Century Will Be Ruled by the New Old

NoNo:: “Target “Target Marketing”Marketing”

YesYes :: “Target “Target

InnovationInnovation” & ” & “Target “Target DeliverDelivery y SSyystemsstems””

PossessionPossession ExperiencesExperiences /“Desires for /“Desires for

thingsthings”/Young adulthood/to 38”/Young adulthood/to 38

CateredCatered Experiences Experiences/ “Desires to / “Desires to be be servedserved by others”/Middle by others”/Middle

adulthoodadulthood

BeinBeing Experiencesg Experiences/“Desires for /“Desires for transcending transcending experiencesexperiences”/Late ”/Late

adulthoodadulthood

Source: David Wolfe and Robert Ageless MarketingAgeless Marketing

2006/Top 10% of U.S. Earners*2006/Top 10% of U.S. Earners*

Luxury goods for the home …. Luxury goods for the home …. -5.7%-5.7%Fashion & jewelry …………...… Fashion & jewelry …………...… -8.7%-8.7%Luxury cars …………………….. Luxury cars …………………….. -0.9%-0.9%Experiential luxury** …..… Experiential luxury** …..… +10.7%+10.7%

* * “The wealthy are increasingly spending more on doing things“The wealthy are increasingly spending more on doing things than owning things” than owning things” /Unity Marketing /Unity Marketing

**Travel, dining, entertainment, spa & beauty**Travel, dining, entertainment, spa & beauty

Source: Source: European BusinessEuropean Business (04.2007) (04.2007)

““Older people have an image problem. As Older people have an image problem. As a culture, we’re conditioned toward youth. a culture, we’re conditioned toward youth.

… When we think of youth, we think … When we think of youth, we think ‘energetic and colorful;’ when we think of ‘energetic and colorful;’ when we think of

middle age or ‘mature,’ we think ‘tired middle age or ‘mature,’ we think ‘tired and washed out.’ and when we think of and washed out.’ and when we think of

‘old’ or ‘senior,’ we think either ‘old’ or ‘senior,’ we think either ‘exhausted and gray’ or, more likely, we ‘exhausted and gray’ or, more likely, we

just don’t think. … just don’t think. … The financial The financial numbers are absolutely inarguablenumbers are absolutely inarguable——the Mature Market has the moneythe Mature Market has the money..

Yet advertisers remain astonishingly Yet advertisers remain astonishingly indifferent to them. …”indifferent to them. …”


Beer:Beer: National Boh to Bud to Anchor Steam to Zilch National Boh to Bud to Anchor Steam to ZilchCar:Car: Chevrolet (1942-1962) to misc to Subaru Chevrolet (1942-1962) to misc to SubaruBiz Clothes:Biz Clothes: Various warehouses to Brooks to Nordstrom to Milan Various warehouses to Brooks to Nordstrom to MilanBiz:Biz: Big (U.S. Navy, McKinsey) to Small Big (U.S. Navy, McKinsey) to Small (de facto self-employed)(de facto self-employed)Sports clothes:Sports clothes: Misc-cheap to Northface Misc-cheap to NorthfaceSpouse:Spouse: “Sexy broad” (wife #1) to Best friend/Brainy (+sexy) “Sexy broad” (wife #1) to Best friend/Brainy (+sexy)School:School: Cornell to Stanford to RISD (Go Nads!) Cornell to Stanford to RISD (Go Nads!)Pens:Pens: Cross to Bic Cross to BicFood:Food: Safeway to Whole Foods Safeway to Whole FoodsMusic:Music: Beatles to Queen Beatles to QueenHome Furnishings:Home Furnishings: With it to Comfortable With it to ComfortableHome:Home: SF Bay Area to West Tinmouth VT SF Bay Area to West Tinmouth VTFavorite sport:Favorite sport: Lacrosse-Crew to Speed Walking-Trekking-Rowing Lacrosse-Crew to Speed Walking-Trekking-RowingFavorite MLB, NFL:Favorite MLB, NFL: Orioles- Orioles-BaltimoreBaltimore Colts to A’s-Raiders (Warriors!)Colts to A’s-Raiders (Warriors!)Favorite magazine:Favorite magazine: Life Life to to WiredWiredFavorite media:Favorite media: Print-Radio to Web-Radio Print-Radio to Web-RadioFavorite airline:Favorite airline: TWA to American to Lufthansa TWA to American to LufthansaHome:Home: East to West East to WestVacations:Vacations: USA to New Zealand USA to New Zealand Price:Price: Cheap to Varied (Wal*Mart to Milan) Cheap to Varied (Wal*Mart to Milan)Hotel:Hotel: Ramada/Holiday Inns to Four Seasons/Leading Hotels Ramada/Holiday Inns to Four Seasons/Leading HotelsRestaurants:Restaurants: McDonald’s to Hole in the wall McDonald’s to Hole in the wall Stores:Stores: Misc/Big to Little shops Misc/Big to Little shopsLoyalty:Loyalty: Serial monogamy Serial monogamy (just as loyal now as then; “love ’em, then leave (just as loyal now as then; “love ’em, then leave ’em”)’em”)

The “Terrible Ten”:The “Terrible Ten”:



Plans!Men!

Young!

The “Terrific Ten”:The “Terrific Ten”:

SMEs!SMEs!Private companies!Private companies! “Dull” industries! “Dull” industries!

Churn!Churn!Laudable CEOs!Laudable CEOs!


Action-Execution!Action-Execution!Women!Women!

Boomers-Geezers!Boomers-Geezers!

#1#111

Again.Again.

The The “egregious “egregious

eleven”!eleven”!

The “Egregious Eleven”:The “Egregious Eleven”:



Plans!“Success”!

Men!Young!

Incrementalism-Kaizen

Single Single greatest act greatest act

of pure of pure imaginationimagination

24%24%

Twenty-four percent of the world’s Twenty-four percent of the world’s construction in the postage stamp construction in the postage stamp

called …called …

dubaidubai

No Wiggle Room!No Wiggle Room!

“Incrementalis“Incrementalism is m is

innovation’s innovation’s worstworst enemy.” enemy.”

—Nicholas Negroponte—Nicholas Negroponte

The “Egregious Eleven”:The “Egregious Eleven”:




Men!Young!


The “Enviable Eleven”:The “Enviable Eleven”:





Boomers-GeezersBoomers-Geezers

Imagination Imagination Unbound!Unbound!

#1#122

And another.And another.

The The “despicable “despicable

Dozen”!Dozen”!

The “Despicable Dozen”:The “Despicable Dozen”:




Men!Young!


Minimization!

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

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

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

grow earnings over grow earnings over time.’ time.’

Well, Duh!Well, Duh!”” —Dick Kovacevich, Wells

Fargo

The Commerce Bank ModelThe Commerce Bank Model

“cost cutting “cost cutting is a is a deathdeath spiralspiral.”.”

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

The Commerce Bank story in retail The Commerce Bank story in retail banking was amazing. (They’ve just banking was amazing. (They’ve just been bought by Toronto Dominion.)been bought by Toronto Dominion.)

““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)

Hill founded the bank.Hill founded the bank.

Hill founded the bank.Hill founded the bank.

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

. “Everyone “Everyone lives by lives by selling selling

something.”something.”

– Robert Louis Stevenson

Competitive costs are important. A Competitive costs are important. A great CFO is worth her-his weight in great CFO is worth her-his weight in gold. But will somebody p-l-e-a-s-e gold. But will somebody p-l-e-a-s-e

represent the “revenue side”?represent the “revenue side”?

<TG<TGWWvs.vs.

>TG>TGRR

TGR TGR (“Things (“Things gone right”)gone right”) > > TGW TGW (“Things (“Things Gone Wrong”)Gone Wrong”)

Singapore-Singapore-CandyCandy

(Operational Excellence+)(Operational Excellence+)

Bowl with little candies at the Bowl with little candies at the Immigration cop’s booth in Immigration cop’s booth in

Singapore. Message: “WelcomeSingapore. Message: “Welcome to Singapore. We’re glad you’re to Singapore. We’re glad you’re

here.” (Not exactly typical of here.” (Not exactly typical of immigration cops!)immigration cops!)

3-cent 3-cent lemon!lemon!

Free lemon in a basket at the fish Free lemon in a basket at the fish market. Often as not I’ve made amarket. Often as not I’ve made a

$50+ purchase. But it’s the lemon $50+ purchase. But it’s the lemon I remember. I remember.

““Happy Happy Birthday!”Birthday!”

Banker in Bologna changes dollars Banker in Bologna changes dollars for Euros for me. Takes my passport for Euros for me. Takes my passport [required]. Sees that it’s my birthday. [required]. Sees that it’s my birthday.

Hands me cash … with a hearty Hands me cash … with a hearty “happy birthday.” Big deal? Little “happy birthday.” Big deal? Little

deal? Per me: deal? Per me: Big!Big!

Disney’s Disney’s Parking Lot Parking Lot

AttendantsAttendants = = Alpha Alpha and and

OmegaOmega

Disney carefully manages the all-Disney carefully manages the all-important first and last impressions. important first and last impressions.

Another “TGR.”Another “TGR.”

““Experiences Experiences are as distinct are as distinct

from services as from services as services are from services are from goods.”goods.” —Joe Pine & Jim Gilmore, The

Experience Economy: Work Is Theatre & Every Business a Stage

Experience: “Rebel Lifestyle!”

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

black leather, ride black leather, ride through small towns and through small towns and

have people be afraidhave people be afraid of him.” of him.”

HarleyHarley exec, quoted in Results-Based Leadership

Beyond the “Transaction”/ “Satisfaction” Mentality

“Good hotel”/ “Happy guest”/ “Exceeded Expectations”

vs.

“Great “Great VacationVacation”/ ”/ “Great “Great ConferenceConference”/”/ “Operation “Operation PersonalPersonal

RenewalRenewal””

The latter three are much more The latter three are much more inclusive-powerful. This is not inclusive-powerful. This is not “semantic games.” Not for the“semantic games.” Not for the

Four Seasons hotels! It’s a dollars Four Seasons hotels! It’s a dollars [many] and cents issue-opportunity-[many] and cents issue-opportunity-

strategy-brand statement-basis strategy-brand statement-basis for a Lovemark. for a Lovemark.

CCXXOO**Chief eXperience Officer

First Step (?!)First Step (?!): : Hire a Hire a theater directortheater director, , as a consultant as a consultant

or FTE!or FTE!

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

opportunity to create anopportunity to create an adventureadventure. . ……

“The Prowler makes you“The Prowler makes you smilesmile. . Why? Because it’s Why? Because it’s focusedfocused. It has a. It has a pplotlot, a reason for being, a, a reason for being, a ppassionassion.”.”

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

The “Despicable Dozen”:The “Despicable Dozen”:




Men!Young!


Minimization!

The “Delectable Dozen”:The “Delectable Dozen”:




Action-Execution!Action-Execution!Women!Women!Young!Young!

Imagination Unbound!Imagination Unbound!

Accentuate the Accentuate the Positive!Positive!

#1#133

Finally …Finally …

The The “unlucky “unlucky

Thirteen”!Thirteen”!

The “Unlucky Thirteen”:The “Unlucky Thirteen”:




Men!Young!

Incrementalism-KaizenMinimization!

Uniformity!


Big companies!Public companies! “Cool” industries!Stability!Famous CEOs!“Hard” stuff!Plans!“Success”!Men!Young!Incrementalism-KaizenMinimization!Uniformity!

Promise #1:Promise #1: “Never, ever “Never, ever again will I evaluate again will I evaluate

anyone using a anyone using a standardized instrument standardized instrument

devised bydevised by a “professional” in a “professional” in ininhuman Resources.”human Resources.”

53 = 53 = 5353

Fifty-three people equal fifty-three Fifty-three people equal fifty-three totally different cases of individual totally different cases of individual

human development. They (we!!) are human development. They (we!!) are not “standardized.” (“Great teacher” not “standardized.” (“Great teacher” … treats each kid as totally different … treats each kid as totally different

from the rest. Right?) (53 is the from the rest. Right?) (53 is the number of players on a National number of players on a National

Football Roster—the point is that in Football Roster—the point is that in sport you’d never think of using sport you’d never think of using

standardized evaluations. standardized evaluations. (Gawd, (Gawd, am I passionate about this!)am I passionate about this!)

““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

Wow! (Read the book.)Wow! (Read the book.)

WikiWorld:WikiWorld: “The “The Billion-man Research Billion-man Research

Team: Companies Team: Companies offering work to online offering work to online

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

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

Pose a problem on the Web—Pose a problem on the Web—numerous folks from numerous numerous folks from numerous

backgrounds will come to your aid.backgrounds will come to your aid.

““Human Human creativity is creativity is the ultimate the ultimate

economic economic resource.”resource.” —Richard Florida,—Richard Florida,

The Rise of the Creative ClassThe Rise of the Creative Class

“My wife and I went to a [kindergarten] parent-teacher conference and were informed that our budding

refrigerator artist, Christopher, would be receiving a grade of Unsatisfactory in art. We were shocked. How

could any child—let alone our child—receive a poor grade

in art at such a young age? His teacher His teacher informed us that he had informed us that he had

refused to color within the refused to color within the lines, which was a state lines, which was a state

requirement for requirement for demonstrating ‘grade-level demonstrating ‘grade-level

motor skillsmotor skills.’ ” —Jordan Ayan, AHA!

Yuck.Yuck.

““Every child is Every child is born an artist. born an artist. The trick is to The trick is to

remain an artistremain an artist.”.” —Picasso—Picasso

““TheThe cracked cracked onesones letlet in the in the

lightlight.”.”

Source: Santa Cruz California,Source: Santa Cruz California, psychiatrist’s bumper sticker psychiatrist’s bumper sticker

““Normal” Normal”

= = “o “o forfor 800”800”

No normal people in a history. So why No normal people in a history. So why do we avoid “abnormal”? (0 for 800: do we avoid “abnormal”? (0 for 800: 400-page text, 2 people mentioned 400-page text, 2 people mentioned

per page on average.)per page on average.)

15 “Leading” Biz Schools

DesiDesiggnn/Core: 00Design/Elective: 1

CreativitCreativityy/Core: 00Creativity/Elective: 4

InnovationInnovation/Core: 00Innovation/Elective: 6

Source: DMI/Summer 2002/Research by Thomas Lockwood

B-schools: B-schools: Yuck II.Yuck II.

40,000,000/2040,000,000/20““[Former Fed Vice-chairman Alan] [Former Fed Vice-chairman Alan] Blinder … remains an Blinder … remains an implacable opponent of tariffs and trade barriers. But implacable opponent of tariffs and trade barriers. But

now he is saying loudly that a new industrial revolutionnow he is saying loudly that a new industrial revolution—communication technology that allows services to be —communication technology that allows services to be

delivered from afar—will put as many as delivered from afar—will put as many as 4040 million Americanmillion American

jobsjobs at risk of being shipped out of the country at risk of being shipped out of the country

in the next decade or two.”*in the next decade or two.”* —Wall Street Journal —Wall Street Journal /0328/0328

*Blinder: 40 million = *Blinder: 40 million = ““only the tiponly the tip of a very big icebergof a very big iceberg.”.”

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

headline/FT/0327 (500 (500 of 900 of 900

ResearchResearch))

Not just “jobs at risk.” The Not just “jobs at risk.” The best best jobs are at risk.jobs are at risk.

BRAND BRAND YOU.YOU.NO NO

OPTION.OPTION.

No guarantees! We must behave as No guarantees! We must behave as boss-of-our-own-show!boss-of-our-own-show!

New Work SurvivalKit.2007

1. MASTERY!MASTERY! (Best/Absurdly Good at Something!)2. “Manage” to Legacy“Manage” to Legacy (All Work = “Memorable”/“Braggable” WOW Projects!)3. A “USP”/UNIQUE SELLING PROPOSITIONA “USP”/UNIQUE SELLING PROPOSITION 4. Rolodex Rolodex ObsessionObsession (From vertical/hierarchy/“suck up” loyalty to horizontal/“colleague”/“mate” loyalty)5. ENTREPRENEURIAL INSTINCTENTREPRENEURIAL INSTINCT (A sleepless … Eye for Opportunity! 6.CEO/LEADER/BUSINESSPERSON/CLOSERCEO/LEADER/BUSINESSPERSON/CLOSER (CEO, Me Inc. 24/7!)7. Master of ImprovMaster of Improv (Play a dozen parts simultaneously, from Chief Strategist to Chief Toilet Scrubber)8. Sense of HumorSense of Humor (A willingness to Screw Up & Move On)9. Comfortable with Your SkinComfortable with Your Skin (Bring “interesting you” to work!)10. Intense Appetite for TechnologyIntense Appetite for Technology (E.g.: How Cool-Active is your Web site? Do you Blog?)11. EMBRACE “MARKETING”EMBRACE “MARKETING” (Your own CSO/Chief Storytelling Officer)12. PASSION FOR RENEWALPASSION FOR RENEWAL (Your own CLO/Chief Learning Officer) 13. EXECUTION EXCELLENCE!EXECUTION EXCELLENCE! (Show up on time! Leave last!)

Stuff we need to know.Stuff we need to know.

Muhammad Yunus:Muhammad Yunus: ““All human All human beings are entrepreneursbeings are entrepreneurs..

When we were in the caves we were When we were in the caves we were all self-employed . . . finding our food, all self-employed . . . finding our food,

feeding ourselves. That’s where feeding ourselves. That’s where human history began . . . As human history began . . . As

civilization came we suppressed it. We civilization came we suppressed it. We became labor because they stamped became labor because they stamped us, ‘You are labor.’ We forgot that we us, ‘You are labor.’ We forgot that we

are entrepreneurs.”are entrepreneurs.”

Source: Muhammad Yunus/2006 Nobel Peace prize winner,

father of micro-lending /The News Hour—PBS/1122.2006

““Entrepreneurial traits” are not so Entrepreneurial traits” are not so rare—in fact, Yunus suggests they rare—in fact, Yunus suggests they

are normal as normal can be.are normal as normal can be.

Ye gads: ““Thomas Stanley has not only found Thomas Stanley has not only found no correlation between success in school and no correlation between success in school and an ability to accumulate wealth, he’s actually an ability to accumulate wealth, he’s actually found a nefound a neggative correlationative correlation. ‘It seems that . ‘It seems that

school-related evaluations are poor school-related evaluations are poor predictors of economic success,’ Stanley predictors of economic success,’ Stanley

concluded. What did predict success was a concluded. What did predict success was a willingness to take risks. Yet the success-willingness to take risks. Yet the success-

failure standards of most schools penalized failure standards of most schools penalized risk takers. risk takers. Most educational systems reward Most educational systems reward those who play it safe. As a result, those who those who play it safe. As a result, those who

do well in school find it hard to take risks do well in school find it hard to take risks

later onlater on.”.” —Richard Farson & Ralph Keyes,

Whoever Makes the Most Mistakes Wins

Measure “Strangeness”/Portfolio QualityMeasure “Strangeness”/Portfolio Quality

StaffStaffConsultantsConsultants

VendorsVendorsOut-sourcing Partners Out-sourcing Partners (#, Quality)(#, Quality)

Innovation Alliance PartnersInnovation Alliance PartnersCustomersCustomers

Competitors 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

We are as strange as the people we We are as strange as the people we hang out with—in every nook and hang out with—in every nook and

cranny of the organizational cranny of the organizational community of which we are a part. Re community of which we are a part. Re innovation [innovation [Innovate or die!Innovate or die!], this ], this

is a veeeeery big deal.is a veeeeery big deal.

““[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 the at least half the

timetime. One successful example . One successful example Mr. Clean Magic Eraser, based on Mr. Clean Magic Eraser, based on

a product found in an Osaka a product found in an Osaka

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

Another very big deal—P&G was Another very big deal—P&G was headquarters of “not invented headquarters of “not invented

here”—if we didn’t invent it, it was here”—if we didn’t invent it, it was not worth inventing!not worth inventing!

““Venture” Venture” fund fund (Gerstner/Amex, Dow/Marriott, (Gerstner/Amex, Dow/Marriott,

Grove/Intel, Bedbury/Starbucks/ Grove/Intel, Bedbury/Starbucks/ 1%1% ) )

Starbucks branding guru Scott Starbucks branding guru Scott Bedbury felt the company was getting Bedbury felt the company was getting

stale. He asked founder Howard stale. He asked founder Howard Schultz for 1% of the year’s Schultz for 1% of the year’s

construction budget … to “play with.” construction budget … to “play with.” Surrounded by the company’s coolest Surrounded by the company’s coolest people, he tried a dozen new formats. people, he tried a dozen new formats.

Most failed, as expected. A couple Most failed, as expected. A couple became big winners.became big winners.

f4f4

FFind.ind.A.A.

FFellow.ellow.FFreak.reak.

FFar Away.ar Away.

To test “weird stuff,” we needTo test “weird stuff,” we need weird playmates—as far away weird playmates—as far away

from home/HQ as possible! from home/HQ as possible!

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’ ” ”





Men!Young!

Incrementalism-KaizenMinimization!

Uniformity!

The “Lucky Thirteen”:The “Lucky Thirteen”:





Boomers-Geezers!Boomers-Geezers!Imagination Unbound!Imagination Unbound!

Accentuate the Positive!Accentuate the Positive!

Individuality!Individuality!


SMESMEss!!Private companies!Private companies! “Dull” industries! “Dull” industries!

Churn!Churn!laudable CEOs!laudable CEOs!



Boomers-Geezers!Boomers-Geezers!Imagination Unbound!Imagination Unbound!

Accentuate the Positive!Accentuate the Positive!Individuality!Individuality!


SMEs!SMEs!Private companies!Private companies!“Dull” industries!“Dull” industries!Churn!Churn!laudable CEOs!laudable CEOs!“Soft” stuff!“Soft” stuff!Excellence!Excellence!Action-Execution!Action-Execution!Women!Women!Boomers-Geezers!Boomers-Geezers!Imagination Unbound!Imagination Unbound!Accentuate the Positive!Accentuate the Positive!Individuality!Individuality!

EXCELLENCE. EXCELLENCE.

BEDROCK.BEDROCK.LEADERSHIP.LEADERSHIP.

10Ps.10Ps.

PURPOSEPURPOSE..PASSIONPASSION..PotentialPotential..PresencePresence..PersonalPersonal..

PERSISTENCEPERSISTENCE..PRIORITIESPRIORITIES..

PEOPLEPEOPLE. . PotentPotent..

PositivePositive..




PositivePositive..

““People want to be part People want to be part of something larger than of something larger than themselvesthemselves.. They want to They want to

be part of something they’re be part of something they’re really really proudproud of, that they’ll of, that they’ll

fight fight forfor,, sacrifice sacrifice forfor , , trusttrust.”.” —Howard Schultz, Starbucks (IBD/09.05)

““A leader is A leader is a a dealer in dealer in hope.” hope.” —Napoleon

(+TP’s writing room pics)(+TP’s writing room pics)

Leader Job OneLeader Job One

Paint Paint Portraits of Portraits of

ExcellenceExcellence!!

Ah, kids: “What is your vision “What is your vision for the future?” for the future?” “What have “What have you accomplished since your you accomplished since your first book?”first book?” “Close your eyes “Close your eyes and imagine me immediately and imagine me immediately doing something about what doing something about what

you’ve just said. What would it you’ve just said. What would it be?” be?” “Do you feel you have an “Do you feel you have an obligation to ‘Make the world a obligation to ‘Make the world a

better place’?”better place’?”

PURPOSEPURPOSE..

PASSIONPASSION..PotentialPotential..PresencePresence..PersonalPersonal..



PositivePositive..

““Nothing is so Nothing is so contagious as contagious as enthusiasm.”enthusiasm.”

—Samuel Taylor Coleridge

BZBZ:: “I am a … “I am a … Dispenser of Dispenser of EnthusiasmEnthusiasm!”!”

PURPOSEPURPOSE..PASSIONPASSION..

PotentialPotential..PresencePresence..PersonalPersonal..



PositivePositive..

““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

Organizing GeniusOrganizing Genius / Warren Bennis / Warren Bennis and Patricia Ward Biederman and Patricia Ward Biederman

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

members alike, 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 “The best thing a leader can do for a

Great Group is to Great Group is to allow its allow its members to discover their members to discover their

ggreatnessreatness.”.”

Leaders’ “Mt Everest Test”Leaders’ “Mt Everest Test”

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

“allow its members “allow its members to discover their to discover their

greatness.”greatness.”

PURPOSEPURPOSE..PASSIONPASSION..PotentialPotential..

PresencePresence..PersonalPersonal..



PositivePositive..

““It’s It’s alwaalwayyss showtime.”showtime.”

—David D’Alessandro, Career Warfare

PURPOSEPURPOSE..PASSIONPASSION..PotentialPotential..PresencePresence..

PersonalPersonal..PERSISTENCEPERSISTENCE..PRIORITIESPRIORITIES..


PositivePositive..

““You must You must bebe the change you the change you

wish to see in the wish to see in the world.”world.”

Gandhi

““Being aware of Being aware of yourself and how you yourself and how you

affect everyone affect everyone around you is what around you is what

distinguishes a distinguishes a superior leader.”superior leader.”

—Edie Seashore (—Edie Seashore (Strategy + BusinessStrategy + Business #45) #45)

Questions:Questions: What do others think of you? What do others think of you? [Are you sure?][Are you sure?] What What do you think of you? do you think of you? [Are you sure?][Are you sure?] What is your impact What is your impact

on others?on others? [Are you sure?][Are you sure?] What is your impact on What is your impact on others?others? [Are you sure?] [Are you sure?] What is your impact on others?What is your impact on others?

[Are you sure?][Are you sure?] What are the “little things” you (perhaps What are the “little things” you (perhaps unconsciously) do that cause people to shrivel—or blossom? unconsciously) do that cause people to shrivel—or blossom? [Are [Are you sure?]you sure?] What do you want? What do you want? [Are you sure?][Are you sure?] Are you aware Are you aware

of your changing moods? of your changing moods? [Are you sure?][Are you sure?] How fragile is your How fragile is your ego? ego? [Are you sure?][Are you sure?] Do you have a true confidant? Do you have a true confidant? [Are you [Are you sure?]sure?] Do you perform brief or not-so-brief self-assessments? Do Do you perform brief or not-so-brief self-assessments? Do you talk too much? you talk too much? [Are you sure?][Are you sure?] Do you know Do you know how how to listen? to listen? [Are you sure?][Are you sure?] DoDo you listen? you listen? [Are you sure?][Are you sure?] What is What is

your style of “hashing things out”? Are you perceived as (a) your style of “hashing things out”? Are you perceived as (a) arrogant, (b) abrasive (c) attentive, (d) genuinely interested in people, arrogant, (b) abrasive (c) attentive, (d) genuinely interested in people,

(e) etc? (e) etc? [Are you sure?][Are you sure?] Are you flexible? Have you changed Are you flexible? Have you changed your mind about anything your mind about anything important important in a while? Are you in a while? Are you

comfortable-uncomfortable with folks on the front line? comfortable-uncomfortable with folks on the front line? Do you Do you think you’re “in touch with the pulse of things around think you’re “in touch with the pulse of things around

here”?here”? [Are You Sure?][Are You Sure?] Are you too emotional/intuitive? Are Are you too emotional/intuitive? Are you too unemotional/rational? Do you spend much time with people you too unemotional/rational? Do you spend much time with people

who are new to you?who are new to you? [Do you think questions like this are [Do you think questions like this are “so much BS”?]“so much BS”?]




PositivePositive..

RelentlessRelentless:: “One of “One of

my superstitions had always been my superstitions had always been when I started to go anywhere or when I started to go anywhere or

to do anything,to do anything, notnot to to turnturn backback ,, or stop, or stop,

until the thing intended was until the thing intended was accomplished.”accomplished.” —Grant

““Success seems to Success seems to be largely a be largely a

mattermatter

of of hanginghanging onon after others after others have let go.”have let go.” —William —William

Feather, authorFeather, author

““The most The most successful successful

people are those people are those who who

are good at plan are good at plan B.”B.”

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


PERSISTENCEPERSISTENCE..

PRIORITIESPRIORITIES. . PEOPLE.PEOPLE.potentpotent..

PositivePositive..

““I used to have a rule for myself that at any point in I used to have a rule for myself that at any point in time I wanted to have in mind time I wanted to have in mind — as it so happens, — as it so happens, also in writing, on a little card I carried around with also in writing, on a little card I carried around with me — the three big things I was trying to get done. me — the three big things I was trying to get done.

ThreeThree..

Not two. Not two. Not four. Not four. Not five.Not five.Not ten.Not ten.Three.”Three.”

— Richard Haass, — Richard Haass, The Power to PersuadeThe Power to Persuade

““Dennis, you need a … Dennis, you need a …

‘To-don’t ’‘To-don’t ’

List !”List !”

““The The oneone thinthing you g you need to know about need to know about sustained individual sustained individual

success: Discover what success: Discover what you don’t like doing and you don’t like doing and

stopstop doing it.”doing it.”

—Marcus Buckingham, The One Thing You Need to Know



PEOPLE iPEOPLE i. . PotentPotent..

PositivePositive..

““Leaders Leaders

‘‘dodo’’ people. people.

Period.”Period.” —Anon.

““The leaders of Great The leaders of Great

Groups Groups lovelove talent talent and know where to find and know where to find

it. They it. They revel revel in the in the talent of others.”talent of others.”

—Warren Bennis & Patricia Ward Biederman, Organizing Genius

““Leaders Leaders

‘‘SERVESERVE’’ people. people.

Period.”Period.” —inspired by Robert Greenleaf

OfficersOfficers eat eat lastlast!!



PEOPLE iiPEOPLE ii. . PotentPotent..

PositivePositive..

“A man without A man without a smiling face a smiling face

must not open a must not open a shop.”shop.” —Chinese Proverb

““I can’t tell I can’t tell yyou how manou how manyy times we times we ppassed uassed upp hotshots hotshots

for for gguuyys we thous we thougght were better ht were better ppeoeopplele, and watched our guys do a lot better , and watched our guys do a lot better

than the big names, not just in the classroom, but on than the big names, not just in the classroom, but on the field—and, naturally, after they graduated, too. the field—and, naturally, after they graduated, too. Again and again, the blue chips faded out, and our Again and again, the blue chips faded out, and our

little up-and-comers clawed their way to all-little up-and-comers clawed their way to all-

conference and All-America teams.”conference and All-America teams.” —Bo —Bo Schembechler (and John Bacon), “Recruit for Schembechler (and John Bacon), “Recruit for

Character,” Character,” Bo’s Lasting LessonsBo’s Lasting Lessons

““Character is more crucial now Character is more crucial now than ever, because in times of than ever, because in times of

great uncertainty past great uncertainty past performance is no indicator of performance is no indicator of

future performance. future performance. Experience falls away and all Experience falls away and all

you’re left with is character.” you’re left with is character.” ——David Rothkopf, founder of a firm that helps chief David Rothkopf, founder of a firm that helps chief

executives manage risksexecutives manage risks

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

and, and, aboveabove allall, , ppromoteromote for for s.”s.”

—Starbucks middle manager/field

Go for the “soft” attributes—damn it!Go for the “soft” attributes—damn it!



PEOPLE iiiPEOPLE iii. . PotentPotent..

PositivePositive..

53 = 53 = 5353

Every human being is following their own Every human being is following their own growth trajectory—in general and relative to the growth trajectory—in general and relative to the

organization-team of which they are a part. organization-team of which they are a part. Hence standardized evaluation instruments are Hence standardized evaluation instruments are an abomination—with housekeepers as well as an abomination—with housekeepers as well as

scientists. (Our dream teacher for our kids is the scientists. (Our dream teacher for our kids is the one who treats each kid differently. The teacher-one who treats each kid differently. The teacher-

from-hell treats them all the same.) (The 53 from-hell treats them all the same.) (The 53 comes from football. The roster of an NFL team comes from football. The roster of an NFL team

is 53 players. Obviously, we’d never treat is 53 players. Obviously, we’d never treat players as interchangeable blocks. What’s the players as interchangeable blocks. What’s the

difference between a 53-person football team or difference between a 53-person football team or dance company and a 53-person finance or IS dance company and a 53-person finance or IS

department? None!)department? None!)

Promise #1:Promise #1: “Never, ever “Never, ever again will I evaluate again will I evaluate

anyone using a anyone using a standardized instrument standardized instrument

devised bydevised by a “professional” in a “professional” in ininhuman Resources.”human Resources.”

““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



PEOPLE ivPEOPLE iv. . PotentPotent..

PositivePositive..

““Forget Forget ChinaChina, , IndiaIndia and the and the

InternetInternet: Economic : Economic Growth Is Driven Growth Is Driven

by by WomenWomen.”.” —Headline,

Economist, April 15, 2006, Leader, page 14

““AS AS LEADERS, LEADERS, WOMEN WOMEN

RULERULE:: New Studies find

that female managers outshine their male counterparts in almost every measure”

TITLE/ Special Report/ TITLE/ Special Report/ BusinessWeekBusinessWeek

Women’s Strengths Match New Women’s Strengths Match New Economy ImperativesEconomy Imperatives:: Link [rather than rank] Link [rather than rank]

workers; workers; favor interactive-collaborative leadership favor interactive-collaborative leadership style [empowerment beats top-down decision style [empowerment beats top-down decision

making];making]; sustain fruitful collaborations; comfortable sustain fruitful collaborations; comfortable with sharing information; with sharing information; see redistribution of power see redistribution of power

as victory, not surrenderas victory, not surrender; favor multi-dimensional ; favor multi-dimensional feedback; feedback; value technical & interpersonal skills, value technical & interpersonal skills, individual & group contributions equally;individual & group contributions equally; readily readily

accept ambiguity; accept ambiguity; honor intuition as well ashonor intuition as well as pure “rationality”; pure “rationality”; inherently flexible; inherently flexible; appreciate appreciate

cultural diversitycultural diversity. —Judy B. Rosener, America’s Competitive Secret: Women Managers

Old days: 20-person project team. All from Old days: 20-person project team. All from our company. New days: 20-person our company. New days: 20-person

project team. Six companies in 4 countries project team. Six companies in 4 countries represented. Can’t bark orders. (This is represented. Can’t bark orders. (This is

added to when we acknowledge that our added to when we acknowledge that our value-added will come from “creatives”—value-added will come from “creatives”—

also far less amenable to standard also far less amenable to standard hierarchical approaches.) Old hierarchy hierarchical approaches.) Old hierarchy

disappearing. Men are hierarchy oriented; disappearing. Men are hierarchy oriented; women tend to lead through relationship women tend to lead through relationship

development.development.

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

14 14 toto 168168**

*Leadership Positions/D&T/1992-2002/*Leadership Positions/D&T/1992-2002/WIAR WIAR (Women’s Initiative Annual Report)(Women’s Initiative Annual Report)

Deloitte losing great women. Discover it’s Deloitte losing great women. Discover it’s because women see male-dominated because women see male-dominated

hierarchy above, and don’t want to waste hierarchy above, and don’t want to waste time since top slots not available. Deloitte time since top slots not available. Deloitte

makes female retention centerpiece of makes female retention centerpiece of strategy. Among other things, in a decade strategy. Among other things, in a decade

senior positions held by women grow senior positions held by women grow from 14 to 168. Progress publicly reported from 14 to 168. Progress publicly reported

in Women’s Initiative Annual Report. (In in Women’s Initiative Annual Report. (In 2007, Deloitte voted best company for 2007, Deloitte voted best company for

fresh-caught college grads to work for.)fresh-caught college grads to work for.)

Period??!!*Period??!!*

Start:Start: 3 0f 14 3 0f 14

18 months later:18 months later: 10 of 10 of 1818

*AIM/September 2007*AIM/September 2007

In Australia, TP pinned against wall by In Australia, TP pinned against wall by woman financial-services CEO: “What woman financial-services CEO: “What

would you do if you were made CEO of a would you do if you were made CEO of a firm light in women in senior ranks?” After firm light in women in senior ranks?” After much thought, I said I’d play it straight as a much thought, I said I’d play it straight as a

numbers game—e.g., increase my exec numbers game—e.g., increase my exec team from the current 3 women of 14 to 10 team from the current 3 women of 14 to 10

of 18 in 18 months. As to the standard, of 18 in 18 months. As to the standard, “butt no women are ready,” I’d simply “butt no women are ready,” I’d simply

“deep dip” as they say in the military—go “deep dip” as they say in the military—go down a level or two to find the best down a level or two to find the best

women, whether or not they were “100% women, whether or not they were “100% ready.”ready.”

10 UNASSAILABLE REASONS WOMEN RULE10 UNASSAILABLE REASONS WOMEN RULE

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

So what exactly is the point of So what exactly is the point of menmen??

“One thing is certain: Women’s rise to power, which is linked to the increase in wealth per capita, is happening in all

domains and at all levels of society. Women are no longer content to provide efficient labor or to be consumers with

rising budgets and more autonomy to spend. … This is just the beginning. The phenomenon will only grow as girls prove

to be more successful than boys in the school system. For For a number of observers, we a number of observers, we have already entered the have already entered the age of ‘womenomics,’ the age of ‘womenomics,’ the economy as thought out economy as thought out

and practiced by a womanand practiced by a woman.”.” —Aude Zieseniss de Thuin, Financial Times, 10.03.2006



PEOPLE vPEOPLE v. . PotentPotent..

PositivePositive..

PUT HR AT THE PUT HR AT THE HEAD OF THE HEAD OF THE HEAD TABLE. HEAD TABLE. BEST PEOPLE. BEST PEOPLE.

NOBLEST NOBLEST MISSION.MISSION.



PEOPLE viPEOPLE vi. . PotentPotent..

PositivePositive..

2 2 per Year/per Year/ 20 20 per Decade per Decade == Excellence Excellence

+ Legacy+ Legacy

In I figure one has about two key In I figure one has about two key promotion decisions per year. Collectively promotion decisions per year. Collectively the 20 in 10 years will almost totally shape the 20 in 10 years will almost totally shape one’s legacy. While we take such decisions one’s legacy. While we take such decisions

“seriously,” I suggest we typically take “seriously,” I suggest we typically take them seriously enough based on the them seriously enough based on the

analysis above. analysis above.



PEOPLE viiPEOPLE vii. . PotentPotent..

PositivePositive..

Internal Internal “brand “brand

promise”!promise”!

What’s your company’s … EVP/EVP/IBPIBP?*

*Employee Value Proposition, per Ed Michaels et al.,

The War for Talent; IBP/Internal Brand Promise per TP

EVP/IBPEVP/IBP = = Remarkable Remarkable challenge, rapid professional challenge, rapid professional growth, respect, satisfaction, growth, respect, satisfaction,

fun, stunning opportunity, fun, stunning opportunity, exceptional reward, amazing exceptional reward, amazing

peer group, full membership in peer group, full membership in Club Adventure, maximized Club Adventure, maximized

future employabilityfuture employability

Source: Ed Michaels, Source: Ed Michaels, The War for Talent; TPThe War for Talent; TP

““We are a We are a ‘Life ‘Life

Success’ Success’ Company.”Company.”

Dave Liniger, founder, RE/MAX

Brand Brand = =

Talent.Talent.



PEOPLE viiPEOPLE vii. . PotentPotent..

PositivePositive..

TP: TP: “How to flush

$500,000 down

the toilet in one easy

lesson!!”

< CAPEX< CAPEX> People!> People!

See above, slides 104-107.See above, slides 104-107.



PEOPLEPEOPLE. .

PotentPotent..PositivePositive..

On NELSON: “[other] “[other] admirals more admirals more frightened of frightened of losing than losing than

anxious to win”anxious to win”

In war or peace there is an enormous In war or peace there is an enormous difference between working to avoid difference between working to avoid loss (defense rules—cost cutting?) loss (defense rules—cost cutting?) versus working to win (a revenue-versus working to win (a revenue-

innovation focus?).innovation focus?).

Kevin Roberts’ Credo

11. Ready. Fire! Aim.. Ready. Fire! Aim.2. If it ain’t broke ... Break it!2. If it ain’t broke ... Break it!3. Hire crazies.3. Hire crazies.4. Ask dumb questions.4. Ask dumb questions.5. Pursue failure.5. Pursue failure.6. Lead, follow ... or get out of the way!6. Lead, follow ... or get out of the way!7. Spread confusion.7. Spread confusion.8. Ditch your office.8. Ditch your office.9. Read odd stuff.9. Read odd stuff.

10. Avoid moderationAvoid moderation!!

"The reasonable man adapts The reasonable man adapts himself to the world. The himself to the world. The

unreasonable one persists in unreasonable one persists in trying to adapt the world to trying to adapt the world to

himself. Therefore, all himself. Therefore, all progress depends upon the progress depends upon the unreasonable man.”unreasonable man.” —GB Shaw,

Man and Superman: The Revolutionists' Handbook.

““You do not merely want to You do not merely want to

be the best of the best.be the best of the best. You want to be You want to be considered the considered the

only ones who do only ones who do what you dowhat you do.” .” —Jerry

Garcia

““One who One who does less than does less than

he canhe can is a thief.” is a thief.” —Gandhi—Gandhi

Ouch.Ouch.




PositivePositive..

The greatest dangerThe greatest dangerfor most of usfor most of us

is not that our aim isis not that our aim istoo hightoo high

and we miss it,and we miss it,but that it isbut that it is

too lowtoo lowand we reach it.and we reach it.

Michelangelo

The “1E”The “1E”

““Excellence can be obtained if you:Excellence can be obtained if you: ... care more than others think is wise; ... care more than others think is wise; ... risk more than others think is safe; ... risk more than others think is safe; ... dream more than others think ... dream more than others think is practical;is practical; ... expect more than others think ... expect more than others think is possible.”is possible.”

Source: Anon. (Posted @ tompeters.com by K.Sriram, November 27, 2006 1:17 AM)

Ger-Ger-onon-i--i-momo!!

"Life is not a journey to the grave with the intention of arriving safely in one pretty

and well preserved piece, but to skid across the line

broadside, thoroughly used up, worn out, leaking oil,

shouting ‘GERONIMO!’GERONIMO!’ ” —Bill McKenna, professional motorcycle racer

(Cycle magazine 02.1982)

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