Tom Peters Seminar2000 Distinct or … Extinct

LinkageSan Francisco

05November2000

When Mike Charles gets lonely, who does he talk to …

Mike Charles. Stanford history prof. Whirlpool fridge. Out of 2%

milk. Tap keypad on door. Webvan.com delivers in hours. Next, he sends his

washer an email …Source: Business Week (09.00)

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

Saving Private Ryan on DVD: $874.75Mercedes-Benz: $18.98

Hot-rolled steel: $0.19

Source: Fortune (3.20.00)

NOW THAT’S B-I-G!

“The period 2000-2002 will bring the single greatest change in

worldwide economic and business conditions since we came down from the trees.”

David Schneider & Grady Means, MetaCapitalism

“The corporation as we know it, which is now 120 years old, is

not likely to survive the next 25 years. Legally and

financially, yes, but not structurally and economically.”

Peter Drucker, Business 2.0 (08.00)

“We are in a

brawl with no rules.”

Paul Allaire

John Roth’s “Rules” [Nortel]

1. Our strategies must be tied to leading-edge customers on the attack.

2. Time cannot be sacrificed for better quality, lower cost, or even better decisions.

3. It doesn’t matter whether you develop or acquire leading technology. Our job is to provide the technology

and products our customers need.4. Success is achieved by leading change,

not waiting for it.5. We are paranoid about our leadership – willing to cannibalize our own products to maintain our edge.

Source: Abridged from The Wall Street Journal (07.25.00)

“It used to be that the big

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

Venture Partners)

Progressive

“We don’t sell insurance anymore.

We sell speed.” – Peter Lewis

Digital cameras, wireless Net links,

etc.: SOME CLAIMS PAID WITHIN 20 MINUTES!

Source: Business Week (09.00)

Part I: Brand InsidePart II: Brand Outside

Part III: Brand Leadership

Forces @ Work I

The Destruction Imperative!

Forget>“Learn”

“The problem is never how to get new, innovative

thoughts into your mind,

but how to get the old ones out.”

Dee Hock

The [New] Ge Way

DYB.com

The Gales of Creative Destruction

+29M = -44M + 73M

+4M = +4M - 0M

Brand Inside

Brand Org: Lean, Linked,

Electronic & Malleable

Headline: “Bank of America to Cut … 10,000 Jobs”

“Middle-level and senior managers are expected to be

the principal targets of the job cutbacks.”

Source: The New York Times (07.29.2000)

White Collar Revolution!

The Pincer 5

“Destructive” entrepreneurs/ Global Competition

“White Collar Robots”

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

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

Speed!!

“Assetless Company”

John Bryan, CEO, on selling all Sara Lee’s manufacturing

“We have transitioned from an asset-based strategy

to a talent-based strategy.”

Jeff Skilling, COO, Enron

Cisco, Dell =

Brand-owning companies who sell Customer

Satisfaction

Source: David Schneider & Grady Means, MetaCapitalism

RR on “Assetless” [J.B.] Sara Lee

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

with insights into the customer’s individual needs

and preferences.”

Advance Paradigm

Data on 165,000,000 prescriptions per year; docs and insurers have access to

records

Reduces med errors; saves $2.88 per scrip [prescribing errors]; docs save

$14,000 per year in review time

Rev in ’99: $2B; $477M in ’98Source: Business Week (09.00)

Brand Inside

Brand Work: The WOW Project

“Reward excellent failures. Punish

mediocre successes.”

Phil Daniels, Sydney exec

Measures

–WOW!–Beauty!–Raving Fans!–Impact!

Brand Inside

Brand You: Distinct …

or Extinct

2010 “Demographics”:

By 2010, full-time workers will be in the

minoritySource: MIT study (28August2000)

New World of Work

< 1 in 10 F500#1: Manpower Inc.

Freelancers/I.C.: 16M-25MTemps: 3M (incl. CEOs & lawyers)

Microbusinesses: 12M-27MTotal: 31M-55M

Source: Daniel Pink, Free Agent Nation

“If there is nothing very special about your work, no matter how hard you apply

yourself, you won’t get noticed, and that

increasingly means you won’t get paid much either.”

Michael Goldhaber, Wired

Minimum New Work SurvivalSkillsKit2000

MasteryRolodex Obsession (vert. to horiz. “loyalty”)

Finishing SkillsEntrepreneurial Instinct

CEO/Leader/BusinesspersonMistress of Improv

Sense of HumorIntense Appetite for Technology

Groveling Before the YoungEmbracing “Marketing”

Passion for Renewal

Invent. Reinvent. Repeat.

Source: HP banner ad

Brand Inside

Brand Talent: The Great War for Talent

The Case

“When land was the scarce resource, nations battled

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

Stan Davis & Christopher Meyer, futureWEALTH

The Talent Ten

Home Depot: 7 new growth initiatives ($20B to $100B in 5-7 years)

Arthur Blank: BEST PERSON IN THE WORLD TO HEAD EACH

INITIATIVEE.g.: COO of IKEA to head

international expansion

Ed Michaels, War for Talent (05.17.00)

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

Macadam at Georgia Pacific changed 20 of his 40 box plant managers to put

more talented, higher paid managers in charge. He increased

profitability from $25 million to $80 million in 2 years.”

Ed Michaels, War for Talent (05.17.00)

So-so plant manager, $1M per year. Pay: $110,000 plus $60,000. Top plant manager,

$3-4M per year. Pay: $135,000 plus $90,000. Net:

$2-3M for $50K.

Source: Ed Michaels et al., The War for Talent, re Georgia Pacific

“The Rise of the Teen Guru”

“They’re brilliant, ambitious, and almost intuitively gifted at technology. A new generation

of whiz kids are gaining unprecedented power and

authority.”Source: Cover story, Brill’s Content, 7-8/00

“Talented people are less likely to wait their turn. We used to

view young people as trainees; now they are authorities. Arguably

this is the first time the older generation can – and must – leverage the younger generation very early in their careers.”

Ed Michaels, War for Talent (05.17.00)

“Where do good new ideas come from? That’s simple! From

differences. Creativity comes from unlikely juxtapositions.

The best way to maximize differences is to mix ages, cultures and

disciplines.”

Nicholas Negroponte

“Diversity defines the health and wealth of nations in a new century.

Mighty is the mongrel. … The hybrid is hip. The impure, the mélange, the adulterated, the

blemished, the rough, the black-and-blue, the mix-and-match – these people are inheriting

the earth. Mixing is the new norm. Mixing trumps isolation. It spawns creativity,

nourishes the human spirit, spurs economic growth

and empowers nations.”

G. Pascal Zachary, The Global Me: New Cosmopolitans and the Competitive Edge

Women and new-economy

management …

The New Economy …

Shout goodbye to “command and control”!

Shout goodbye to hierarchy!

Shout goodbye to “knowing one’s place”!

Women’s Stuff = New Economy Match

Improv skillsRelationship-centric

Less “rank consciousness”Self determinedTrust sensitive

IntuitiveNatural “empowerment freaks” [less

threatened by strong people]Intrinsic [motivation] > Extrinsic

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

easier to meet new people? Who asks more questions in a conversation? Who is a better

listener? Who has more interest in communication skills? Who is more inclined to get involved?

Who encourages harmony and agreement? Who has better intuition? Who works with a longer ‘to do’ list? Who enjoys a recap to the day’s events? Who is

better at keeping in touch with others?”

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

Susan Kane-Benson

“Boys are trained in a way that will make

them irrelevant.”

Phil Slater

The Cracked Ones Let in the Light

“Our business needs a massive transfusion of talent, and talent, I believe, is most likely to be found

among non-conformists, dissenters and rebels.”

David Ogilvy

Axiom: Never hire anyone without an aberration in their

background!

Mantra2000

Talent = Brand

What’s your company’s …

EVP?

Employee Value Proposition, per Ed Michaels et al., The War for Talent

EVP = Challenge, professional growth, respect, satisfaction, opportunity, reward

[EVP = “The company’s fingerprint” = B.I.]

Source: Ed Michaels et al., The War for Talent

Brand Inside

Brand Action:Getting Started … a

Personal Perspective

Topic: Boss-free

Implementation of STM /Stuff That

MATTERS!

“This is all I ‘know’ in the

world!”Tom Peters

I. THE IDEA

“4Fs”: Find a

Fellow Freak

Faraway

Heart of the Matter

F2F!*

*Freak to Freak … or K2K [Kook to Kook]

World’s Biggest Waste …

Selling “Up”

III. THE SOFT STUFF

Connect!

Message: It’s Community

Organizing, stupid!

See: Saul Alinsky’s Rules for Radicals

IV. BOTTOM LINE

The Enemy!

Epitaph from Hell … Epitaph from Hell …

Joe T. Jones Joe T. Jones

1942 – 2000 1942 – 2000

HE WOULDA DONE SOME HE WOULDA DONE SOME

REALLY COOL STUFF REALLY COOL STUFF

BUT …BUT …

HIS BOSS WOULDN’T LET HIM! HIS BOSS WOULDN’T LET HIM!

Characteristics of the “Also rans”*

“Minimize risk”“Respect the chain of

command”“Support the boss”

“Make budget”

*Fortune, article on “Most Admired Global Corporations”

The greatest dangerfor most of us

is not that our aim istoo high

and we miss it,but that it is

too lowand we reach it.

Michelangelo

New Economy: Was-Is • Pine-paneled Office• Address: 1 Big Man Plaza• Secretary• Suit • Formal • Rank conscious• Pretense (“Failures are

for fools.”)• I love “Yes men”• Self-contained

• Seat 9B, UA233• Address: Rick@Corp.com• Typing: 60 WPM• Casual M-F• Approachable• We are a HOT Team • Screwing up is as normal

as breathing• I love Misfits!• I love partners

Part I: Brand InsidePart II: Brand Outside

Part III: Brand Leadership

Forces @ Work II

The Commodity Trap

“We make over three new product announcements a

day. Can you remember them?

Our customers can’t!”Carly Fiorina

“The ‘surplus society’ has a surplus of

similar companies, employing

similar people, with similar educational backgrounds, working in

similar jobs, coming up with similar

ideas, producing similar things, with

similar prices and similar quality.”

Kjell Nordstrom and Jonas Ridderstrale, Funky Business

Brand Outside

The Death Knell for Ordinary:

Pursuing Difference!

Brand Outside

Strategy 1:

Lead the Customer!

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

incremental advances.”Joseph Morone, President,

Bentley College

“These days, you can’t succeed as a company if you’re consumer led –

because in a world so full of so much constant change, consumers can’t

anticipate the next big thing.

Companies should be idea-led and consumer-

informed.”Doug Atkin, partner, Merkley Newman Harty

“Our strategies must be tied to leading edge

customers on the attack. If we focus on the defensive

customers, we will also become defensive.”

John Roth, CEO, Nortel

Brand Outside

Strategy 2:Use E-Commerce to

Re-invent Everything!

OVERVIEW

www.cyveillance.com

08.30.2000/1221AM:

2,461,940,629

www.cyveillance.com

10.26.2000/0544AM:

2,877,822,236

57 days, 5 hours, 23 minutes …

+415,881,607

Tomorrow Today: Cisco!

90% of $20B (=$50M/day)

75% mfg. outsourced; 50% of orders routed to supplier who ships direct

Gross margin: 65%; Net margin: 28%

Savings in service and support from customer self-management: $500M

W.W. Grainger*

2X phone/fax

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

COMMUNITY SERVICES!/ CUSTOMER CONTROL!

Tomorrow Today: Cisco!

90% of $20B; save $550M

C.Sat e >> C.Sat H

Customer Engineer Chat Rooms/Collaborative

Design ($1B “free” consulting) (45,000 customer problems a week solved via

customer collaboration)

Anne Busquet/ American Express

Not: “Age of the Internet”

Is: “Age of Customer Control”

“The Web enables total transparency. People with

access to relevant information are beginning to challenge any type of

authority. The stupid, loyal and humble customer, employee, patient

or citizen is dead.”

Kjell Nordstrom and Jonas Ridderstrale, Funky Business

RADICAL STRATEGIES

REQUIRED

“One cannot be tentative about this. Excuses like ‘channel

conflict’ or ‘marketing and sales aren’t ready’ cannot be allowed. Delay and you risk being cut out of your own market, perhaps not by traditional competitors but by companies you

never heard of 24 months ago.”

Jack Welch [07.00/Forbes.com]

SUMMARY: REINVENT

EVERYTHING

WebWorld = Everything

Web as a way to run your business’ innardsWeb as connector for your entire supply-demand chain Web as “spider’s web” which re-conceives the industry

Web/B2B as ultimate wake-up call to “commodity producers”

Web as the scourge of slack, inefficiency, sloth, bureaucracy, poor customer data

Web as an Encompassing Way of LifeWeb = Everything (P.D. to after-sales)

Web forces you to focus on what you do bestWeb as entrée, at any size, to World’s Best at Everything

as next door neighbor

Message: eCommerce is not a technology play! It is a

relationship, partnership, organizational and

communications play, made possible by new

technologies.

Message: There is no such thing as an effective B2B or

Internet-supply chain strategy in a low-trust,

bottlenecked-communication, six-layer

organization.

A DREAMER’S MEDIUM!

“There is no use trying,” said Alice. “One can’t believe impossible things.”

“I daresay you haven’t had much practice,” said the Queen. “When I was

your age, I always did it for half an hour a day. Why, sometimes I’ve

believed as many as six impossible things before breakfast.”

Lewis Carroll

I’net …

… allows you to dream dreams you could never have imagined before!

“Banking is

necessary. Banks are not.”

Dick Kovacevich, Wells Fargo

Brand Outside

Strategy 3: Fighting Back via

Systems Integration!

THE CASE

B2B

1999 – 2004: 50X

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

GM/Ford/DaimlerChrysler (02-27)

Covisint$240B (+$500B)

I.P.O.

Goal?

Drive profits to zero!*

*Remember AMR and “dynamic pricing.”

“Net Nips Real Estate Sales Fees”

Headline, p.1B, USAToday 07.05.00*

*Homebytes.com, eHomes.com, YourHomeDirect.com, etc.

Message: “BOX” SELLERS LOSE!

THE RESPONSE

Message: Racing up the V.A. Ladder. Doing More & More … & More & More & More … for/with the Customer and the Supply-Demand Chain!

“We want to be the air traffic

controllers of electrons.”

Bob Nardelli, GE Power Systems

09.11.2000: HP bids $18,000,000,000

for PricewaterhouseCoopers

Consulting bus! (31,000 bods)

“These days, building the best server isn’t enough. That’s the

price of entry.”

Ann Livermore, Hewlett Packard

Brand Outside

Strategy 4:

It’s the Experience!

“Experiences are as distinct from services as services are from

goods.”Joseph Pine & James Gilmore, The

Experience Economy: Work Is Theatre & Every Business a Stage

“The [Starbucks] Fix” Is on …

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

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

customers come for refuge.”Nancy Orsolini, District Manager

Experience: “Rebel Lifestyle!”

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

through small towns and have people be afraid of him.”Harley exec, quoted in Results-based

Leadership

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

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

reason for being, a passion.”

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

Hmmmm(?): “Only” Words …

StoryAdventure

Smile Focus

PlotPassion

Plot

Williams Sonoma = 5 [was 10]Crate & Barrel = 8

Sharper Image = 9+Smith & Hawken = 8+

Garnet Hill = 9L.L. Bean = 4 [was 9+]

Colonial Williamsburg = ?

The “Experience Ladder”

Experiences Services

Goods Raw Materials

1940: Cake from flour, sugar (raw materials economy): $1.00

1955: Cake from Cake mix (goods economy): $2.00

1970: Bakery-made cake (service economy): $10.00

1985: Party @ Chuck E. Cheese (experience economy) $100.00

LAN Installation Co.

to

Geek Squad (2% to 30%/Minn.)

Extraction & Goods: Male dominance

Services & Experiences: Female

dominance

Brand Outside

Strategy 5:

Women Rule!

?????????

Home Furnishings … 94%Vacations … 92%

Houses … 91%Bank Account … 89%

Health Care … 80%Consumer Electronics … 51%

Cars … 50%+/80%Etc.

48% working wives > 50%80% checks

61% bills53% stock (mutual fund boom)

43% > $500K95% financial decisions/

29% single handed

Women … 50+%(!!!) of Web users; 6 of 10 new users; 83% of wired women are primary decision makers for family

healthcare, finances, education.

Source: Business Week; Jupiter Communications

$4.8T > Japan

9M/27.5M/$3.6T > Germany

OPPORTUNITY

NO. 1!*

[* No shit!]

FemaleThink/ Popcorn

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

way, don’t buy for the same reasons.”

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

they make connections.”

Women and Financial Advisors

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

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

Source: Kathleen Boyle, Wheat Boyle Butcher Singer

“Women Beat Men at Art of Investing”

Source: Miami Herald, reporting on a study by Profs. Terrance Odean and Brad Barber, UC Davis (Cause: Guys are “in and out” of

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

Marketing to Women: Help Them Save Time!

80% … work86% … cook

58% … run errands with kids38% … take child to school

21% … go to the gym21% … take outside classes

How Many Gigs You Got, Man?

“Hard to believe … Different criteria”

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

vendor.”

Robin Sternbergh/ IBM

Read This Book …

EVEolution: The Eight Truths of Marketing to Women

Faith Popcorn & Lys Marigold

EVEolution: Truth No. 1

Connecting Your Female Consumers to Each

Other Connects Them to Your Brand

“The ‘Connection Proclivity’ in women starts early. When asked,

‘How was school today?’ a girl usually tells her mother every

detail of what happened, while a boy might grunt, ‘Fine.’ ”

EVEolution

Weight Watchers International “Model”

“What if ExxonMobil or Shell dipped into their credit card database to help commuting women

interview and make a choice of car pool partners?”

“What if American Express made a concerted effort to connect up female empty-nesters

through on-line and off-line programs, geared to help women re-enter the workforce with today’s

skills?”

EVEolution

“Women don’t buy

brands. They join them.”

Faith Popcorn, EVEolution

Not!!

“Year of the Woman”

Enterprise Reinvention!

RecruitingHiring/Rewarding/ Promoting

Structure Processes

MeasurementStrategyCulture Vision

Leadership

THE BRAND ITSELF!

“What kind of car does Mommy want?”

“Honey, are you sure you have the kind of money it takes to be looking at a car like

this?”

THIS JUST MIGHT BE THE BIGGEST “THING” IN THIS

SEMINAR. [PLEASE: THINK ABOUT IT!]

Psssst! Wanna see my “porn”

collection?

27 March 2000: email to TP from Shelley Rae Norbeck

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

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

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

to sell us something! We have money to

spend and nobody wants it!”

STATEMENT OF PHILOSOPHY: I am a businessperson. An analyst. A pragmatist. The enormous social good of increased women’s

power is clear to me; but it is not my bailiwick. My “game” is haranguing business leaders

about my fact-based conviction that women’s increasing power – leadership skills

and purchasing power – is the strongest and most dynamic force at work in the American

economy today. Dare I say it as a long-time Palo Altan … THIS IS EVEN BIGGER THAN THE

INTERNET!

Tom Peters

Speaking of Enormous

[Missed] [Huge] Opportunities ...

Subject: Marketers & Stupidity

It’s 18-44, stupid!

Subject: Marketers & Stupidity

Or is it: 18-44 is stupid, stupid!

2000-2010 Stats

18-44: -1%55+: +21%

(55-64: +47%)

Aging/“Elderly”

$$$$$$$$$$$$“I’m in charge!”

Brand Outside

Strategy 6:

BRAND POWER!

Brand It! Now, More Than Ever!

“The increasing difficulty in differentiating between products and

the speed with which competitors take

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

Gillian Law and Nick Grant, Management [New Zealand]

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

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

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

that their products are less important than their stories.”

Rolf Jensen, Copenhagen Institute for Future Studies

Brand = You Must Care!

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

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

Tom Chappell, Tom’s of Maine

“In the funky village, real competition no longer revolves

around marketshare. We are competing for attention –

mindshare and heartshare.”Kjell Nordstrom and Jonas Ridderstrale,

Funky Business

Brand = Special = Passion = Plot =

Compelling Mythology = Cause = Connection = Heart = Integrity &

Trust

Rules of “Radical Marketing”

Love + Respect Your Customers!Hire only Passionate Missionaries!Create a Community of Customers!

Celebrate Craziness!Be insanely True to the Brand!

Sam Hill & Glenn Rifkin, Radical Marketing (e.g., Harley, Virgin, The Dead, HBS, NBA)

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

“Organizational Psychotherapy”/

WHO WE ARE!

Part I: Brand InsidePart II: Brand Outside

Part III: Brand Leadership

Brand Leadership

Passion Rules!

“Leadership is a performance. You have to be

conscious of your behavior, because everybody else is.”

Carly Fiorina

“You must be the change you want to bring about.”

Gandhi

Brand Leadership!

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

communication of a story.”

Howard Gardner Leading Minds: An Anatomy of Leadership

“Create a Cause, not a ‘business.’ ”

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

Charles Schwab)

“A leader is a dealer in hope.”

Napoleon

Brand Leadership:ENTHUSIASM RULES!

“I am a dispenser of enthusiasm.”/ Ben

Zander

“If things seem under control, you’re just

not going fast enough.”

Mario Andretti

Have you changed civilization today?

Source: HP banner ad