connect ! tom peters/01.30.2003. all to all “a big electronics show is all about connections”...
TRANSCRIPT
Connect!Tom Peters/01.30.2003
All to All
“A Big Electronics Show Is All About
Connections” —headline, New York Times/ 01.13.2003/
Consumer Electronics Show > COMDEX
NOKIAConnecting
People
UBIQUITY! “It’s the cars, not the tires, that squeal”:
NYT/Circuits/10.25.01): E-ZPass (6M in NE), tests with McD’s, gas stations and parking lots
next. OnStar (GM/1.5M). Plus: “black boxes,” GPS (the case of
the $450 ticket), CA smog offenders.
“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
Imagination!
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
“Most of our predictions are based
on very linear thinking. That’s why they will
most likely be wrong.”Vinod Khosla, in “GIGATRENDS,” Wired 04.01
“There’s 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 dreamed
before!
“Don’t rebuild. Reimagine.”
The New York Times Magazine on the future of the WTC space in Lower Manhattan/09.08.2002
“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
“Imagine a world where a citizen could search the globe to
assemble “my government,” the ultimate in customized,
customer-centric services. Health care from the Netherlands, business incorporation in
Malaysia …”
Don Tapscott
“The e-conomy is one of re-intermediation, where new
technologies make it possible to radically increase complexity and
efficiency with the introduction of new marketplaces. In these markets, value
chains constantly reorganize as the demands of the consumer and
business change.”Thomas Koulopoulos, Delphi Group
Wild, Wacky, Weird!
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)
2.5G, 3G, 4GWindowsSymbian
JavaBluetooth
Wi-FiPCs-PDAs-Cell“phones”
E-business vs. M-businessEtc.
NTT/DoCoMo/i-motion/“remote control for your life”/“If Tokyo and DoCoMo are the first capitals of the wireless
Internet industry, Helsinki and Nokia have been the wellsprings of mobile
telephony—Finland leads the world in both Internet connections and mobile
phones per capita.”Source: Howard Rheingold/Smart Mobs
Outsider’s view: (1) Billions are being spent, even in a down
market. (2) NOBODY HAS A CLUE AS TO WHO THE
WINNERS—AND LOSERS—WILL BE. (3) Yet you must play.
Now. Hard. Fast.
The Real “News”: X1,000,000
TowTruckNet.com
Yikes!
“We’re in the Internet age, and the average
patient can’t email their doctor.”
Donald Berwick, Harvard Med School
“In an era when terrorists use satellite
phones and encrypted email, US gatekeepers stand armed against them with pencils
and paperwork, and archaic computer systems that don’t
talk to each other.”Boston Globe (09.30.2001)
“Once devised in Riyadh, the tasking order took hours to get to the Navy’s six aircraft carriers—because the
Navy had failed years earlier to procure the proper communications gear that would have connected the
Navy with its Air Force counterparts. … To compensate for the lack of communications capability, the Navy was forced to fly a daily cargo mission from
the Persian Gulf and Red Sea to Riyadh in order to pick up a computer printout of the air mission tasking
order, then fly back to the carriers, run photocopy machines at full tilt, and distribute the documents to the air wing squadrons that were planning the next
strike.” –Bill Owens, Lifting the Fog of War
“Many flaws remained—flaws not from poor performance, but from an ingrained command
hierarchy and an outmoded concept of war that had taken root during World War II and then during the cold war. Desert Storm was a joint
military operation in name rather than in fact. … The battlefield was divided among service components. …
The fiefdoms existed not only because of tradition, service rivalry and the egos of the commanders; they were also there because of technological limitations.
We did not have the communications capability to do it differently.” –Bill Owens, Lifting the Fog of War
“SOS: Emergency
Agencies Often Unable to Talk to Each Other” —headline, p1, USA
Today/11.20.2002
Defective Orgs!
“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 coefficient of friction associated with the grunge of business
is amazing!”Michael Schrage
[ Words to Live By …
“Hierarchy is an organization with its face
toward the CEO and its ass toward the customer.”
Kjell Nordström and Jonas Ridderstråle, Funky Business]
“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)
“E-business is the final nail in the coffin
for bureaucracy at GE.”
Jack Welch/GE Annual Report 2000
Corporate Resistance to “It”
“It all goes back to fear of losing control!”
The Cluetrain Manifesto
m-“On” or Out of the Loop
“Managers in Finland always keep their phones on. Customers expect
fast reactions. And if you can’t reach a superior, you make many decisions
yourself. Managers who want to influence decisions of subordinates must keep their phones open.” —Risto Linturi, Finnish m-guru, in Howard Rheingold’s Smart
Mobs
“A bureaucrat is an expensive
microchip.”Dan Sullivan, consultant and
executive coach
E.g. …
Jeff Immelt: 75% of “admin, back room, finance” “digitalized” in
3 years.
Source: BW (01.28.02)
BW Cover/02.2003
“IS YOUR JOB NEXT? A New Round of GLOBALIZATION Is Sending Upscale Jobs Offshore. They Include Chip Design, Basic
Research—even Financial Analysis. Can America Lose These
Jobs and Still Prosper?”
“The Futility of Size …
“[Regarding this issue] the new process of virtualization fully asserts itself. Virtualization is the recognition
that territorial size does not solve economic problems. … Economic
access must become the substitute for increasing domain.”
Richard Rosecrance, The Rise of the Virtual State
[“Don’t own nothin’ if you can help it. If you can, rent your shoes.”
F.G.]
“The new dependence on productive assets located within someone else’s state represents
an unprecedented trust in the integrity and peacefulness of strangers.”
“In its pure form – an ideal model toward which many states are tending – the virtual state
carries within it the possibility of an entirely new system of world politics.”
Richard Rosecrance, The Rise of the Virtual State
“In 25 years, you’ll probably be able to get the
sum total of all human knowledge on a personal
device.”Greg Blonder, VC [was Chief Technical
Adviser for Corporate Strategy @ AT&T] [Barron’s 11.13.2000]
“This is the first meter of a 10-kilometer race.
Eventually, all markets will come to resemble today’s foreign exchange market.”
Hamid Biglari, Head of Corporate Strategy, Citigroup, in “GIGATRENDS”, Wired 04.01
Glimpses of the Future
“Our entire facility is digital. No paper, no film, no medical records. Nothing. And it’s all integrated—from
the lab to X-ray to records to physician order entry. Patients don’t have to wait for anything. The information from the physician’s office is in
registration and vice versa. The referring physician is immediately sent an email telling him his patient has
shown up. … It’s wireless in-house. We have 800 notebook computers that are wireless. Physicians can walk around with a computer that’s pre-programmed. If the physician wants, we’ll go out and wire their house
so they can sit on the couch and connect to the network. They can review a chart from 100 miles away.”—David Veillette, CEO, Indiana Heart Hospital
(Healthleaders/12.2002)
Read It Closely: “We don’t sell
insurance anymore. We sell speed.”
Peter Lewis, Progressive
“By combining powerful computer technology and other
modern information-based systems we could make a
revitalized, leaner military force that is designed to outsee,
outmaneuver and outfight any foe.” —Bill Owens, Lifting the Fog of War
From: Weapon v. Weapon
To: Org structure v. Org structure
“The 1990s was a decade of multiple revolutions—political, economic, technological—that
changed so thoroughly the way we live that the past no longer seems a good guide to the future (in fact the past seems precisely the wrong
guide). So it is in the world of military affairs. The RMA is our opportunity to use the new information technology to change the very nature of the military—in a way that could
reinvigorate American political, diplomatic and economic leadership in the world for decades to
come.” –Bill Owens, Lifting the Fog of War
“[The RMA] means creating a synergy in new weapons, sensors and communications that is made
possible by the successful melding of the technological
applications with an information-age military organization.” –Bill Owens,
Lifting the Fog of War
“Substituting information for armor is a disconcerting notion to a tank soldier. … Soldiers will learn that battle field awareness can be as comforting as armor.”
Source: “A Different War,” Peter Boyer (The New Yorker/07.01.2002)
“If early soldiers idealized Napoleon or Patton, network-centric warriors
admire Wal*Mart, where point-of-sale scanners share information on a near real-time basis with suppliers and also produce data that is mined to help leaders develop new strategic or tactical plans. Wal*Mart is an example of translating information into
competitive advantage.”—Tom Stewart, Business 2.0
RMA: (1) Battlespace awareness. (2) C4I.
(Command, control, communications, computers &
intelligence.) (3) Precision force use.
The New Infantry Battalion/New York Times/12.01.2002
“Pentagon’s Urgent Search for Speed.” 270 soldiers (1/3rd normal complement); 140 robotic off-road armored trucks. “Every soldier is a
sensor.” “Revolutionary capabilities.” Find-to-hit: 45 minutes to 15 minutes
… in just one year.
Old: Heavy. Seek direct contact.
New: Stryker brigade. Stealth. Avoid direct contact—“choose
your moment.” “Depend heavily on information technology, and
enhanced intelligence, surveillance and reconnaissance capabilities.”
Source: “A Different War,” Peter Boyer (The New Yorker/07.01.2002)
“We must not only transform our armed forces but the Defense Department that serves them—
by encouraging a culture of creativity and intelligent risktaking. We must promote a more entrepreneurial approach: one that encourages
people to be proactive, not reactive, and to behave less like bureaucrats and more like
venture capitalists; one that does not wait for threats to emerge and be ‘validated,’ but rather
anticipates them before they appear and develops new capabilities to dissuade them and
deter them.” —Donald Rumsfeld, Foreign Affairs
Eric’s Army
Flat.Fast.Agile.Adaptable.Light … But Lethal.Brand You/ Talent/ “I Am An ARMY Of One.”Info-intense.Network-centric.
“A seismic shift is underway in healthcare. The Internet is
delivering vast knowledge and new choices to consumers—raising their
expectations and, in many cases, handing them the controls.
[Healthcare] consumers are driving radical, fundamental change.”
Deloitte Research, “Winning the Loyalty of the eHealth Consumer”
Duh???*: “We’ve come up with a solution. … We’ve begun to create a form of
communications that is much better than we had before, and that’s allowed us to gather better data. We’ve finally realized
that we have an interplay with other hospitals and with pre-hospital.”—Dr. Ben Honigman, ER, U. Colorado Hospital, on “diverts” (Denver
Post/05.05.02)
*Internet + Data + Open data exchange + Barrier busting
Masters of information acquisition, manipulation, dissemination, and
utilization.
Networkmeisters.
Agile.
Temporary.
Virtual is thy name.
Motto: Applied information is power/wealth.
What’s the Common Denominator?
The Dutch … the British … the Rothschilds … Cargill … Sumitomo …
the KGB … the CIA … Mossad … Enron … Wal*Mart … McKinsey …
FedEx … UPS … Mr. Speaker … Henry Kissinger … Executive secretaries …
the Corner Grocer … Women-in-general?
Question Authority!
“Parents, doctors, stockbrokers, even military leaders are starting to
lose the authority they once had. There are all these roles premised on access to privileged information. …
What we are witnessing is a collapse of that advantage,
prestige and authority.”Michael Lewis, next
“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 Nordström and Jonas Ridderstråle, Funky Business
“Supply Chain” 2000:
“When Joe Employee at Company X launches his browser, he’s taken to Company X’s personalized
home page. He can interact with the entire scope of Company X’s world – customers, other employees, distributors, suppliers, manufacturers, consultants. The browser – that is, the portal – resembles a My
Yahoo for Company X and hooks into every network associated with Company X. The real trick is that Joe
Employee, business partners and customers don’t have to be in the office. They can log on from a cell phone, Palm Pilot, pager or home office system.”
Red Herring (09.2000)
“In the second half of the twentieth century a new society of individuals emerged—a breed of people
unlike any the world has ever seen. Educated, informed, traveled, they work with their brains, not
their bodies. They do not assume that their lives can be patterned after their parents’ or grandparents’.
Throughout human history, the problem of identity was settled in one way—I am my mother’s daughter; I am
my father's son. But in a discontinuous and irreversible break with the past, today’s individuals
seek the experiences and insights that enable them to find the elusive pattern in the stone, the singular
pattern that is ‘me.’ ” —Shoshana Zuboff & James Maxmin, The Support Economy
Pulling It All Together I
“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)
WHAT CAN BROWN DO FOR YOU?
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
“Our mission is to go from being the world’s premier timeshare—which is a large idea in a small industry—to being
what we call the market makers for global travel and leisure. We need to enable developers to be involved in
more travel and leisure products, rather than just the timeshare side.”—
Ken May, RCI (Source: Developments)
Is There a There There: The Ericsson Case
1. 50+% Mfg to Solectron/Flextronics2. Substantial R&D to India3. Division for licensing technology4. JV with Sony on “crown jewel” handsets5. Net: “a wireless specialist that depends on services more than manufacturing, on knowledge more than metal”
Source: BW/11.04.02
HUMANA’s Dreams. Emphesys: “Put everything on the Internet.” CEO Mike McCallister, charge to 200-person “outside” I’net unit: “Imagine an ideal Web-based health insurance system and then create a product as close as possible to
that vision.” Start with own employees: SmartSuite. Member employees: “Plan their
own coverage and shoulder more costs.” Dell is model: “Fully customized health for every individual.” Marketing pitch for employers: “Buy choice for employees through a single
source—Humana.”
Source: Fortune/05.27.2002
“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
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).
Everybody’s Doin’ It!
“The leading Indian outsourcers reckon that the
key to their long-term prosperity is bagging ever larger deals and moving ever higher up the value chain.” —The Economist/01.11.2003
From “Tank” to Future Combat System (e.g., “virtual tank”)
Analogous to switch from “circuit breaker makers” to GE Industrial
Systems, or “guys in brown trucks” to “Let Brown do it.”
Source: “A Different War,” Peter Boyer (The New Yorker/07.01.2002)
“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 “Experience Ladder”
Experiences Services
Goods Raw Materials
Ladder Position Measure
Solutions Success(Experiences)
Services Satisfaction
Goods Six-sigma
Pulling It All Together II
Case: CRM
Anne Busquet/ American Express
Not: “Age of the Internet”
Is: “Age of Customer Control”
Amen!
“The Age of the
Never Satisfied Customer”
Regis McKenna
“CRM has, almost universally, failed
to live up to expectations.”
Butler Group (UK)
Psych 101: Strongest Force on Earth?
My need to be in perceived control of my universe!
Welcome to D.I.Y. Nation: “Changes in business processes will emphasize self service. Your costs as a business
go down and perceived service goes up because
customers are conducting it themselves.” Ray Lane, Oracle
No! No! No! FT: “The aim [of CRM] is to make customers feel as they did in the pre-
electronic age when service was more personal.”
Rebuttal: (1) Service sucked in the “pre-electronic” age. (2) NewGen believes in the screen! (So do I.)
CGE&Y (Paul Cole): “Pleasant
Transaction” vs. “Systemic Opportunity.” “Better job
of what we do today” vs. “Re-think overall
enterprise strategy.”
Message CRM: Madness = 600 CRM vendors. ???: “Do it all” or “do
something.” Past: over-invest in low-value customers. Idea: better experience, not off-load work to
customer. Relationship = f(dialogue & knowledge & duration). Key: new
attitudes, DESTRUCTION of functional barriers to info & action.
Revolution Now!
“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
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.
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
Jargon Bath!
Bureaucracy free …Systemically integrated …
Internet intense …Knowledge based …
Time and location free …“Instantly” responsive …
Customer centric …Mass customization enabled.
Translation …
Bureaucracy free = Flat org, no B.S.Systemically integrated = Whole supply chain
tightly wired/ friction-freeInternet intense = Do it all via the Web
Knowledge based = Open accessTime and location free = Whenever, wherever
“Instantly” responsive = Speed demonsCustomer centric = Customer calls the shotsMass customization enabled = Every product
and service rapidly tailored to client requirements
From: Supply-chain Optimization
To: Design-chain Optimization
Source: Cadence Design Systems
Q: Is that all there is?
A: Quite possibly.
“Roche’s New Scientific Method”—Fast
Company. And? X-Functional Teams (NO STOVEPIPES!). “Fail fast.” “The only way to embrace a technological revolution, Roche has discovered, is to unleash an organizational revolution.”
Innovation & Speed’s “New Basics”*
1. XFTs are the “culture.”2. Project-centric. 3. Open “talent market.”4. “Cause-based” projects. 5. Ubiquitous “open systems” IS—at home & throughout supply chain. Web based.6. F-L-A-T.7. EVP (S.O.U.B), etc.*Innovation, Speed, CRM, “Experience”/ “Solution” demand this
“If you don’t like change, you’re going to like
irrelevance even less.” —General Eric Shinseki, Chief
of Staff, U. S. Army