Tom Peters’ EXCELLENCE . ALWAYS . ONO/Management Forum Madrid/30 November 2006

Tom Peters’Tom Peters’

EXCELLENCEXCELLENCEE. . ALWAYSALWAYS..

ONO/Management ForumONO/Management ForumMadrid/30 November 2006Madrid/30 November 2006

Slides* at …

tompeters.comtompeters.com

*also see LONG version

EXCELLENCE. EXCELLENCE.

ALLALL . YOU. . YOU. NEED. TO. NEED. TO.

KNOW.KNOW.

2255

EXCELLENCE.EXCELLENCE. ANYANY MARKET. MARKET. ANYANYWHERE.WHERE. ANYANY TIME. TIME.

Jim’s Jim’s GroupGroup

EX-CELL-ENCE. EX-CELL-ENCE.

NOTNOT . .

“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: 39 members of the Class of ’17 were

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

just 2 (2%), GE & Kodak,,

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

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

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)

S&P Stability Ratings*

1985 2006

Low Risk 41% Low Risk 41% 13%13% Average Risk 24% 14%

High RiskHigh Risk 35% 35% 73%73%

*Likelihood of stable long-term earnings growth

Source: Fortune (2 October 2006)

TP#1*:

NetscapeNetscape!!

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

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


SIBERIA.SIBERIA.

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

Raging Success Raging Success == P P-SQUARED-SQUARED. .

CC. . EE-CUBED-CUBED..

PPeople.eople.PProduct.roduct.CClients.lients.

EExecution.xecution.EEnthusiasm.nthusiasm.EExcellence.xcellence.

Excellence1982: The Bedrock “Eight Basics”

1. A Bias for 1. A Bias for ActionAction2. Close to the 2. Close to the CustomerCustomer3. Autonomy and Entrepreneurship3. Autonomy and Entrepreneurship

4. Productivity Through 4. Productivity Through PeoplePeople5. 5. HandsHands OnOn, Value-Driven, Value-Driven6. Stick to the Knitting6. Stick to the Knitting

7. 7. SimpleSimple Form, Form, LeanLean StaffStaff8. Simultaneous Loose-Tight Properties” 8. Simultaneous Loose-Tight Properties”

The older I The older I get the get the lessless boring the boring the “basics” “basics” become!become!


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

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

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

intelligent, but intelligent, but the the one most responsive one most responsive to changeto change.”.” —Charles Darwin


INNOVATE. INNOVATE. ALL. ALL. WRONGWRONG..

“I don’t believe in

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

Dick Kovacevich/Wells Fargo

“When asked to name just 1 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


INNOVATE. INNOVATE. TACTICS..

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. Try it.Try it. Try it. Try it. TrTryy it 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. 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.

“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

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

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

““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

tolerate tolerate [encourage?] [encourage?]

failurefailure

Sam’s Sam’s Secret Secret

#1!#1!

Speed/ Speed/ Tempo/Tempo/

is-it-Telecomis-it-Telecom

“the FedFedExEx EconomyEconomy”

—headline/New York Times/10.08.05

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

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

Power Tools Power Tools For Power For Power StrategiesStrategies

place big place big betsbets

“Beware of the tyranny of making

Small Changes to Small

Things. Rather,

make BigBig Changes

to BigBig Things.”

—Roger Enrico, former Chairman, PepsiCo

““RewardReward excellent failures.

PunishPunish mediocre

successes.”Phil Daniels, Sydney exec

measuremeasure

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

Strategic Initiatives/Key Strategic Initiatives/Key Projects score Projects score 88 or higher or higher

[out of 10][out of 10] on a on a “Profound”“Profound”// “Amazing”“Amazing”//“Game- “Game-

changer”changer” Scale? Scale?

re-imagine re-imagine the “value the “value

added” added” equationequation

Up,Up, Up,Up, Up, Up,

UpUp

the Value-added Ladder.

$55$55BB

““Big Brown’s New Bag: UPSBig Brown’s New Bag: UPS

Aims to Be theAims to Be the Traffic Traffic ManagerManager for for Corporate Corporate

AmericaAmerica”” —Headline/BW/2004

The [NEW] “Value-added Ladder”

Gamechanging Gamechanging SolutionsSolutions/ / Implemented Customer Implemented Customer

culture change & culture change & successsuccess

Services/TransactionsManufactured Goods/Things

Extracted Raw Materials/Stuff

PSFPSF


UpUp


“Experiences are as distinct

from services as services are from

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

Work Is Theatre & Every Business a Stage

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


spellbindingspellbinding ExperiencesExperiences Gamechanging SolutionsGamechanging Solutions

ServicesGoods

Raw Materials


UpUp


Furniture vs. Dreams

“We do not sell ‘furniture’ at

Domain. We sell We sell dreamsdreams. This is

accomplished by addressing the half-formed needs in our

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

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

inevitable resultinevitable result.”.” — Judy George,

Domain Home Fashions


dreamsdreams comecome truetruespellbinding Experiencesspellbinding Experiences Gamechanging SolutionsGamechanging Solutions

ServicesGoods

Raw Materials

Dream MerchantsDream Merchants::

IBMIBMUPSUPS

[totally] re-imagine [totally] re-imagine the business around the business around the the twotwo staggering staggering

“new” opportunities“new” opportunities

womenwomen

“Women are thethe

majority market”

—Fara Warner/The Power of the Purse

““Forget Forget ChinaChina, , IndiaIndia andand the the

InternetInternet: Economic : Economic Growth Is Driven Growth Is Driven

by by WomenWomen..””

—Headline, Economist, April 15, 2006, Leader, page 14

““One thing is certain: Women’s rise to power, which is One thing is certain: Women’s rise to power, which is linked to the increase in wealth per capita, is happening linked to the increase in wealth per capita, is happening in all domains and at all levels of society. Women are no in all domains and at all levels of society. Women are no

longer content to provide efficient labor or to be longer content to provide efficient labor or to be consumers with rising budgets and more autonomy to consumers with rising budgets and more autonomy to spend. … This is just the beginning. The phenomenon spend. … This is just the beginning. The phenomenon

will only grow as girls prove to be more successful than will only grow as girls prove to be more successful than

boys in the school system.boys in the school system. For a number of For a number of observers, we have already observers, we have already

entered the entered the ageage of of ‘‘womenomicswomenomics,’ the economy as ,’ the economy as thought out and practiced by a thought out and practiced by a

woman.”woman.”

—Aude Zieseniss de Thuin, Financial Times, 10.03.2006

10 UNASSAILABLE REASONS WOMEN RULE10 UNASSAILABLE REASONS WOMEN RULE

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

SoSo whatwhat exactlyexactly isis … … thethe pointpoint ofof menmen??

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

rapidly rapidly aging aging

populationpopulation

2000-2010 Stats2000-2010 Stats

18-44: -1%

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

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

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

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!““People turning 50 People turning 50 today have today have more more thanthan halfhalf of their of their

adult life ahead of adult life ahead of them.”them.” —Bill Novelli, 50+: Igniting a

Revolution to Reinvent America

EXCELLENCE.EXCELLENCE.1966. 2006.1966. 2006.

4/404/40

De-centralizationDe-centralizationexecutionexecution

accountabilityaccountability6:15a.m.6:15a.m.

““If if feels If if feels painfulpainful and and

scaryscary—that’s —that’s realreal delegation”delegation”

—Caspian Woods, small biz owner



““ExecutionExecution is is the the jobjob of the of the

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

Charan/ Execution: The Discipline of Getting Things Done



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

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

denial in the placedenial in the place.”.” —

Kevin Sharer, CEO Amgen, on the “GE mystique” (Fortune)



6:15a.m6:15a.m..


BEDROCK.BEDROCK.TALENT.TALENT.

Hire Hire veryvery good good

people!people!

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

Pacific … changed 2020 of his

4040 box plant managers to put more talented,

higher paid managers in charge. He increased profitability from

$$2525 million to $$8080 million in 22 years.”

—Ed Michaels, War for Talent

INVITE THEM INVITE THEM TO JOIN US IN TO JOIN US IN A JOURNEY TO A JOURNEY TO EXCELLENCE!EXCELLENCE!

““In the end, In the end, management doesn’t management doesn’t

change culture. change culture. Management … Management …

invitesinvites the workforce itself to the workforce itself to change the culture.”change the culture.”

—Lou Gerstner

““The role of the Director The role of the Director is to create a space where is to create a space where

the actor or actress canthe actor or actress can become more than become more than they’ve ever been they’ve ever been before, more than before, more than

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

PUT PUT HRHR AT AT THE THE HEADHEAD OF OF

THETHE HEADHEAD TABLETABLE. .

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

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

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

LIVE FOR LIVE FOR TALENT!TALENT!

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

Brand Brand = =

Talent.Talent.

< CAPEX< CAPEX> People!> People!


BEDROCK.BEDROCK.LEADERSHIP.LEADERSHIP.

““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)

““Nothing is so Nothing is so contagious as contagious as enthusiasm.”enthusiasm.”

—Samuel Taylor Coleridge

““You must You must bebe the change you the change you

wish to see in the wish to see in the world.”world.”

Gandhi

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

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

dramaticdramatic personalpersonal changechange!”!” —RG

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

““Leaders Leaders

‘‘dodo’’ people. people.

Period.”Period.” —Anon.

PURPOSEPURPOSE..PASSIONPASSION..PresencePresence..PersonalPersonal..

PERSISTENCEPERSISTENCE..PEOPLEPEOPLE..

EXEXCELLE CELLE ALWALWAYSAYS..

Documents

Tom Peters’ EXCELLENCE . ALWAYS . ONO/Management Forum Madrid/30 November 2006