tom peters’ vision21: we are in a brawl with no rules e&y/bermuda/11.21.2002

Tom Peters’

Vision21:

We Are In A Brawl With No Rules

E&Y/Bermuda/11.21.2002

“We are in a

brawl with no rules.”

Paul Allaire

“There will be more

confusion in the business world in the next decade than in any decade in history. And the current pace of

change will only accelerate.”Steve Case

All slides at …

tompeters.com

1. All Bets Are Off.

“IT MAY SOMEDAY BE SAID THAT THE 21ST CENTURY BEGAN ON SEPTEMBER 11th, 2001.

…

“Al-Qaeda represents a new and profoundly dangerous kind of

organization—one that might be called a ‘virtual state.’ On September 11th a virtual

state proved that modern societies are vulnerable as never before.”—Time/09.09.2002

“The deadliest strength of America’s new adversaries is their very fluidity, Defense Secretary Donald

Rumsfeld believes. Terrorist networks, unburdened by fixed borders, headquarters or conventional forces, are

free to study the way this nation responds to threats and adapt themselves to prepare for what Mr. Rumsfeld is certain will be another attack. …

“ ‘Business as usual won’t do it,’ he said. His answer is to develop swifter, more lethal ways

to fight. ‘Big institutions aren’t swift on their feet in adapting but rather ponderous and clumsy

and slow.’ ”—The New York Times/09.04.2002

“The organizations we created have become tyrants. They have taken

control, holding us fettered, creating barriers that hinder rather than help our businesses. The lines that we drew on our neat organizational diagrams have turned into walls

that no one can scale or penetrate or even peer over.” —Frank Lekanne Deprez &

René Tissen, Zero Space: Moving Beyond Organizational Limits.

“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)

2. Destruction Rules!

Forbes100 from 1917 to 1987: 39 members of the Class of ’17 were alive

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

by 20%; just 2 (2%), GE & Kodak, outperformed the market 1917 to 1987.

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

“Good management was the most powerful reason [leading firms] failed to

stay atop their industries. Precisely because these firms listened to their customers, invested aggressively in technologies that would

provide their customers more and better products of the sort they wanted, and because

they carefully studied market trends and systematically allocated investment capital to

innovations that promised the best returns, they lost their positions of leadership.”

Clayton Christensen, The Innovator’s Dilemma

“It is generally much easier to kill an

organization than change it

substantially.” Kevin Kelly, Out of Control

C.E.O. to

C.D.O.

The [New] Ge Way

DYB.com

The Gales of Creative Destruction

+29M = -44M + 73M

+4M = +4M - 0M

“The secret of fast progress is

inefficiency, fast and furious and numerous

failures.”Kevin Kelly

RM: “A lot of companies in the Valley fail.”

RN: “Maybe not enough fail.”

RM: “What do you mean by that?”

RN: “Whenever you fail, it means you’re trying new things.”

Source: Fast Company

“The Silicon Valley of today is built less atop

the spires of earlier triumphs than upon the

rubble of earlier debacles.”—Newsweek/ Paul Saffo (03.02)

Jim & Tom. Joined at the

hip. Not.

“But what if [former head of strategic planning at Royal Dutch Shell] Arie De Geus is wrong in suggesting, in The Living Company, that firms

should aspire to live forever? Greatness is fleeting and, for corporations, it will become

ever more fleeting. The ultimate aim of a business organization, an artist, an athlete or a stockbroker may be to explode in a dramatic

frenzy of value creation during a short space of time, rather than to live forever.”

Kjell Nordström and Jonas Ridderstråle, Funky Business

“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

“Conglomerates don’t work” —James

Surowiecki, The New Yorker (07.01,2002)

“Acquisitions are about buying market share.

Our challenge is to create markets. There is a big difference.”

Peter Job, CEO, Reuters

“Active mutators in placid times tend to die off. They

are selected against. Reluctant mutators in

quickly changing times are also selected against.”

Carl Sagan & Ann Druyan, Shadows of Forgotten Ancestors

TP on Acquisitions

1. Big + Big = Disaster. (Statistically.) (There are exceptions; e.g., Citigroup.)2. Big (GE, Cisco, Omnicon) acquires small/specialist = Good … if you can retain Top Talent.3. Odds on achieving “projected synergies” among Mixed Big “cultures”: 10%.4. Max Scale Advantages are achieved at a smaller size than imagined.5. Attacked by Big, Mediocre Medium marries Mediocre Medium to “bulk up.” Result: Big Mediocrity … or worse.6. Any size—if Great & Focused—can win, locally or globally.7. Increasingly, alliances deliver more value than mergers —and clearly abet flexibility.

3. Kaizen Is an Abomination.

“Incrementalism is innovation’s worst enemy.”

Nicholas Negroponte

4. Technicolor Times Call For

Technicolor Responses.

“Don’t rebuild. Reimagine.”

The New York Times Magazine on the future of the WTC space in Lower Manhattan/09.08.2002

5. Forget It! (“Learning” = Easy.

“Forgetting” = Almost Impossible.)

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

6. Action … ALWAYS …

Takes Precedence.

The Kotler Doctrine:

1965-1980: R.A.F.(Ready.Aim.Fire.)

1980-1995: R.F.A.(Ready.Fire!Aim.)

1995-????: F.F.F.(Fire!Fire!Fire!)

7. Screw-ups are

… the … Mark of Excellence.

“Reward excellent

failures. Punish mediocre successes.”

Phil Daniels, Sydney exec (and, de facto, Jack)

8. Innovation Is Easy:

Hang Out with Freaks (Employees, Board Members,

Customers, Suppliers, Alliance Partners, Consultants.)

Saviors-in-Waiting

Disgruntled CustomersUpstart CompetitorsRogue EmployeesFringe Suppliers

Wayne Burkan, Wide Angle Vision

CUSTOMERS: “Future-defining customers may

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

window on the future.”Adrian Slywotzky, Mercer Consultants

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

the second best swordsman in the world; no, the person for him to be afraid of is some ignorant antagonist who has never had a

sword in his hand before; he doesn’t do the thing he ought to do, and so the expert isn’t

prepared for him; he does the thing he ought not to do and often it catches the expert out and

ends him on the spot.”

Mark Twain

Employees: “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

Suppliers: There is an ominous downside to strategic supplier

relationships. An SSR supplier is not likely to function as any more than a mirror to your organization. Fringe suppliers that offer innovative business practices need

not apply.”

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

Alliances: “Alliances are

the best way to stat both fresh and

agile.”—Lab Director, giant pharma

Boards: “I took a look around, as if for the first time. What a

bunch of tired old souls. I could have kicked myself for

letting them stay on.”—Retiring CEO, on his Board

9. Charge … Up the Value-added Ladder:

Sell “Solutions”/ “Success”/ “Experiences”/

“Dream Fulfillment”/Design = Soul/Brand = ALL!

“Companies have defined so much ‘best practice’

that they are now more or less identical.”

Jesper Kunde, Unique … now or never

“The ‘surplus society’ has a surplus of

similar companies, employing

similar people, with similar educational backgrounds, coming up

with similar ideas, producing

similar things, with similar prices

and similar quality.”

Kjell Nordström and Jonas Ridderstråle, Funky Business

The Value-added

5-Step

Step 1. “Satisfaction” to

“Solutions” & “Success”

The Big Day!

09.11.2000: HP bids

$18,000,000,000for

PricewaterhouseCoopersconsulting business!

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

price of entry.”Ann Livermore, Hewlett-Packard

Gerstner’s IBM: Systems Integrator of

choice. Global Services:

$35B. Pledge/’99: Business Partner Charter. 72 strategic partners,

aim for 200. Drop many in-house

programs/products. (BW/12.01).

“We want to be the air traffic

controllers of electrons.”

Bob Nardelli, GE Power Systems

“Customer Satisfaction” to “Customer Success”

“We’re getting better at [Six Sigma] every day. But we really

need to think about the customer’s profitability. Are customers’

bottom lines really benefiting from what we provide them?”

Bob Nardelli, GE Power Systems

Keep In Mind: Customer

Satisfaction versus

Customer

Success

Nardelli’s goal ($50B to $100B by 2005):

“… move Home Depot beyond selling ‘goods’ to selling ‘home services.’ …

He wants to capture home improvement dollars wherever and

however they are spent.” E.g.: “house calls” (At-Home Service: $10B by ’05?) … “pros shops” (Pro Set) … “home project management”

(Project Management System … “a deeper selling relationship”).

Source: USA Today/06.14.2002

“UPS wants to take over the sweet spot in the endless loop

of goods, information and capital that all the packages

[it moves] represent.”ecompany.com/06.01 (E.g., UPS Logistics

manages the logistics of 4.5M Ford vehicles, from 21 mfg. sites to 6,000 NA dealers)

Omnicom: 57% (of

$6B) from marketing services

Step 2. Solutions+ =

Awesome Experiences

“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

“Club Med is more than just a ‘resort’; it’s a means of rediscovering oneself, of inventing an

entirely new ‘me.’ ”

Source: Jean-Marie Dru, Disruption

“Guinness as a brand is all about community.

It’s about bringing people together and sharing

stories.”—Ralph Ardill, Imagination, in re Guinness Storehouse

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

Bob Lutz: “I see us as being in the art business. Art,

entertainment and mobile sculpture, which,

coincidentally, also happens to provide transportation.”

Source: NYT 10.19.01

WHAT CAN BROWN DO FOR YOU?

Step 3.Experiences+ =

Dream Fulfillment

DREAM: “A dream is a complete moment in the life of a client.

Important experiences that tempt the client to commit substantial resources. The essence of the desires of the consumer. The

opportunity to help clients become what they want to be.” —Gian Luigi

Longinotti-Buitoni

The marketing of Dreams (Dreamketing)

Dreamketing: Touching the clients’ dreams.

Dreamketing: The art of telling stories and entertaining.

Dreamketing: Promote the dream, not the product.

Dreamketing: Build the brand around the main dream.

Dreamketing: Build the “buzz,” the “hype,” the “cult.”

Source: Gian Luigi Longinotti-Buitoni

Getting Beyond Lip Service!

“No longer are we only an insurance provider. Today, we also offer our customers the products and services that help them achieve their dreams, whether it’s financial

security, buying a car, paying for home repairs, or even taking a dream

vacation.”—Martin Feinstein, CEO, Farmers Group

Step 4.The Bedrock:

Design = “Soul”

All Equal Except …

“At Sony we assume that all products of our competitors have basically the same

technology, price, performance and

features. Design is the only thing that differentiates one product from another in the

marketplace.”Norio Ohga

“We don’t have a good language to talk about this kind of thing. In most people’s

vocabularies, design means veneer. … But to me, nothing could be further from the

meaning of design. Design is the fundamental soul

of a man-made creation.”

Steve Jobs

Step 5.The “Bottom

Line”:

Brand Power

“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

10. SHE … Is the Customer!

?????????

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

equipment)

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

Consumer Electronics … 51% Cars … 60% (90%)

All consumer purchases … 83% Bank Account … 89%

Health Care … 80%

$4.8T > Japan

9M/27.5M/$3.6T > Germany

Business Purchasing Power

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

Admin officers: >50%

Source: Martha Barletta, Marketing to Women

91% women: ADVERTISERS DON’T

UNDERSTAND US. (58% “ANNOYED.”)

Source: Greenfield Online for Arnold’s Women’s Insight Team (Martha Barletta, Marketing to Women)

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

“Women don’t buy

brands. They join them.”

EVEolution

F.Y.I.

“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)

Investment Club Returns

Women-only clubs 1997 … 17.9%Mixed … 17.3%

Men-only … 15.6%

Source: National Assoc. Investors

Value Line: Top State* Investment Clubs 2000

8 … All male19 … Coed

22 … All FEMALE

* VT & Maine not included; D.C. included

Notes to the CEO

--Women are not a “niche”; so get this out of the “Specialty Markets” group.--The competition is starting to catch on. (E.g.: Nike, Nokia, Wachovia, Ford, Harley-Davidson, Jiffy Lube, Charles Schwab, Citigroup, Aetna.)

--If you “dip your toes in the water,” what makes you think you’ll get splashy results?--Bust through the walls of the corporate silos.--Once you get her, don’t let her slip away.--Women ARE the long run!

Source: Martha Barletta, Marketing to Women

11. TALENT TIME! (He/She Who Has the Best “Roster”

Rules!)

From “1, 2 or you’re out” [JW] to …

“Best Talent in each industry segment to build

best proprietary intangibles” [EM]

Source: Ed Michaels, War for Talent (05.17.00)

25/8/53

12. SHE … Is the Best Leader!

“AS LEADERS, WOMEN RULE: New Studies find that female managers

outshine their male counterparts in almost

every measure”Title, Special Report, Business Week, 11.20.00

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

favor interactive-collaborative leadership style [empowerment beats top-down decision making]; sustain fruitful collaborations; comfortable with sharing information; see redistribution of power

as victory, not surrender; favor multi-dimensional feedback; value technical & interpersonal skills, individual & group contributions equally; readily accept ambiguity; honor intuition as well as pure

“rationality”; inherently flexible; appreciate cultural diversity

Source: Judy B. Rosener, America’s Competitive Secret:Women Managers

Opportunity!

U.S. G.B. E.U. Ja.

M.Mgt. 41% 29% 18% 6%

T.Mgt. 4% 3% 2% <1%

Peak Partic. Age 45 22 27 19

% Coll. Stud. 52% 50% 48% 26%

Source: Judy Rosener, America’s Competitive Secret

63 of 2,500 top earners in F500

8% Big 5 partners

14% partners at top 250 law firms

43% new med students; 26% med

faculty; 7% deans

Source: Susan Estrich, Sex and Power

“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

13. eALL. (IS/IT: Half-way = No Way.)

“The organizations we created have become tyrants. They have taken

control, holding us fettered, creating barriers that hinder rather than help our businesses. The lines that we drew on our neat organizational diagrams have turned into walls

that no one can scale or penetrate or even peer over.” —Frank Lekanne Deprez & Rene Tissen, Zero Space: Moving Beyond Organization Limits.

100 square feet

Impact No. 1/ Logistics &

Distribution: Wal*Mart … Dell … Amazon.com …

Autobytel.com … FedEx … UPS … Ryder … Cisco … Etc. … Etc.

… Ad Infinitum.

Autobytel: $400.

Wal*Mart: 13%.Source: BW(05.13.2002)

The Real “News”: X1,000,000

TowTruckNet.com

WebWorld = Everything

Web as a way to run your business’s 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

“Ebusiness is about rebuilding the organization from the

ground up. Most companies today are not built to exploit the Internet.

Their business processes, their approvals, their hierarchies, the

number of people they employ … all of that is wrong for running an

ebusiness.”

Ray Lane, Kleiner Perkins

“Suppose—just suppose—that the Web is a new world we’re just beginning to inhabit. We’re like the earlier European settlers in the United States, living on the

edge of the forest. We don’t know what’s there and we don’t know exactly what we need to do to find out: Do we pack mountain climbing gear, desert wear, canoes, or all three? Of course while the settlers may not have

known what the geography of the New World was going to be, they at least knew that there was a geography. The Web, on the other hand, has no

geography, no landscape. It has no distance. It has nothing natural in it. It has few rules of behavior and fewer lines of authority. Common sense doesn’t hold

here, and uncommon sense hasn’t yet emerged.” David Weinberger, Small Pieces Loosely Joined

“Dawn Meyerreicks, CTO of the Defense Intelligence Systems Agency, made one of the most fateful military calls of the 21st century. After 9/11 … her office

quickly leased all the available transponders covering Central Asia. The implications should change everything about U.S. military thinking in the

years ahead.

“The U.S. Air Force had kicked off its fight against the Taliban with an ineffective bombing campaign, and Washington was anguishing over whether to send in a few Army divisions. Donald Rumsfeld told Gen. Tommy Franks to

give the initiative to 250 Special Forces already on the ground. They used satellite phones, Predator surveillance drones, and GPS- and laser-based

targeting systems to make the air strikes brutally effective.

“In effect, they ‘Napsterized’ the battlefield by cutting out the middlemen (much of the military’s command and control) and working directly with the

real players. … The data came in so fast that HQ revised operating procedures to allow intelligence analysts and attack planners to work directly

together. Their favorite tool, incidentally, was instant messaging over a secure network.”—Ned Desmond/“Broadband’s New Killer App”/Business

2.0/ OCT2002

Eric Shinseki’s (New) Army

Flat.Fast.Agile.Adaptable.Light … But Lethal.Info-intense.Network-centric. Talent/ “I AM AN ARMY OF ONE.”

14. The … WHITE-COLLAR REVOLUTION

Will …

Devour Everything in Its Path.

108 X 5vs.

8 X 1= 540 vs. 8 (-98.5%)

E.g. …

Jeff Immelt: 75% of “admin, back room, finance” “digitalized” in

3 years.

Source: BW (01.28.02)

IBM’s Project

eLiza!** “Self-bootstrapping”/ “Artilects”

“Unless mankind redesigns itself by changing our DNA through altering our genetic

makeup, computer-generated robots will take

over the world.” – Stephen

Hawking, in the German magazine Focus

<1000A.D.: paradigm shift: 1000s of years1000: 100 years for paradigm shift

1800s: > prior 900 years1900s: 1st 20 years > 1800s

2000: 10 years for paradigm shift

21st century: 1000X tech

change than 20th century (“the ‘Singularity,’ a merger between humans and computers that is so rapid and profound it

represents a rupture in the fabric of human history”)

Ray Kurzweil

15. Take Charge of Your Destiny!

DISTINCT … OR EXTINCT!

“If there is nothing very special about

your work, no matter how hard you apply yourself, you won’t get noticed, and that

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

Michael Goldhaber, Wired

I AM AN ARMY OF

ONE

“If you don’t like change, you’re going to like

irrelevance even less.” —General Eric Shinseki, Chief

of Staff, U. S. Army

16. YOUR CALENDAR KNOWS

ALL. (You = Calendar.)

“To Don’t ” List

Danger: S.I.O. (Strategic

Initiative Overload)

JackWorld/1@T: (1) Neutron Jack. (Banish bureaucracy.) (2) “1, 2 or out” Jack. (Lead or leave.) (3)

“Workout” Jack. (Empowerment,

GE style.) (4) 6-Sigma Jack. (5)

Internet Jack. (Throughout)

TALENT JACK!

17. SHOW UP! (If You Care,

You’re There.)

Rudy!

18. Management Role 1:

GET OUT OF THE WAY. (Clear the Way.)

(“Manager” = Hurdle Removal Professional.)

“Ninety percent of what we call ‘management’ consists of making it

difficult for people to get things done.” – P.D.

19. WHAT MATTERS IS STUFF THAT MATTERS.

“I never, ever thought of myself

as a businessman. I was interested in creating

things I would be proud of.” —Richard Branson

G.H.: “Create a ‘cause,’ not a ‘business.’ ”

20. Dispense

ENTHUSIASM!

BZ: “I am a … Dispenser of Enthusiasm!”

“A leader is a dealer in hope.”

Napoleon

(+TP’s writing room pics)

21. Shoot for the Stars!

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

Thank You!