Marsh in Motion

VeLOCITY Rules!2000 Managing Directors Meeting

of the Americas

The Greenbrier22 May 2000

Defeated Before The Starter’s Gun!

“Track 4: Managing Organization Change (Helping

Tired and Overworked Professionals with Today’s

Workplace Realities)”

NAPM: You are the Rock Stars

of the B2B Age!

Message2000

“The point is the passion!”

Charles Handy

An Age of Passion:1 Year = 1.5 Wal*Marts

03.27.99: $167B03.27.00: $555B

P.S.: Wal*Mart = #8 in 2000

No Wiggle Room!

“Incrementalism is innovation’s worst

enemy.” Nicholas Negroponte

Just Say No …

“I don’t intend to be known as the ‘King of the

Tinkerers.’ ”CEO, large financial services company

(New York, 5-99)

64/24

Goal?

Welcome to the Land of the True Believers!

“We have the ability to turn the economy upside down, to enhance lives, and to drive

civilization forward.”

Michael Saylor,MicroStrategy

“It means nothing less than the total

reinvention of this company.”

Jacques’ New New Ford

Ford + MSN CarPointFord + Yahoo!Ford + Oracle

Ford + HP/MCIWorldcomEtc.Etc.

“We are in a

brawl with no rules.”

Paul Allaire

S.A.V.

Net World!

Act now. Analyze later.

Avram Miller

“R & D”

Intel’s venture fund: 275 investments, $8B

Source: Fast Company , eCompany

“Our ideal acquisition is a small startup that has a great technology product on the drawing board that is going to come out in six to twelve months. We buy the engineers and the next generation product. …” John Chambers, Cisco

Brand Inside

Brand Org!

108 X 5vs.

8 X 1*

* 540 vs. 8

And Now the Equivalent …

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!!

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.”

The “&-!!+#$% in the middle”*

Jim Clark on Healtheon/WebMD

* ’twixt docs, patients, insurers and providers; $275B of $400B in waste; source: Michael

Lewis, The New New Thing

[ Incidentally …

CEO Jeff ArnoldAge: 30

First Start-up: Age 24]

“We want to be the air traffic controllers

of electrons.”Bob Nardelli,

GE Power Systems

These are …

L.A.D.T.I.R.S.*

*Life-and-death-total-industry-reinvention-struggles

Brand Inside

Brand Work!

Why are there no books on how to create

a “Cool, Rocking, WOW-producing

Finance Department”?

[NAPM Redux: Welcome to the Y2K New Orleans

Jazz and Real Cool Purchasing Dudes

Festival!]

“Reward excellent failures. Punish

mediocre successes.”

Phil Daniels, Sydney exec

But Does It Matter ????

“On time, on budget … who cares?”

anon. seminar participant (4/99)

“You really got to me. So many of our information technology projects take on a life of their own, and I know they’ll never end up as more than ‘mediocre successes.’ ”

CEO, F100 financial services company (10-98)

Measures

–WOW!–Beauty!–Raving Fans!–Impact!

Brand Inside

Brand You!

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

“If one quarter can’t make the journey, that’s the way it

has to be.”

Carly Fiorina (1-00/Forbes)

Personal “Brand Equity” Evaluation– I am known for [2 to 3 things]; next year at this time I’ll

also be known for [1 more thing].–My current Project is challenging me …– New things I’ve learned in the last 90 days include …–My public “recognition program”

consists of …– Additions to my Rolodex in the last 90 days include …

–My resume is discernibly different from last year’s at this time …

Icon Woman …

–Totally turned on by her work!–“It” matters / a WOW Project!–“It” is … COOL!–“It” is … BEAUTIFUL!–She is … in your face!–She is an … adventurer!–She is … CEO of her own life!

Icon Woman …

- She is … at least … a little funky!–Her curiosity is … insatiable!–She thinks screwups are …

as normal as breathing!–She hangs out with some …

seriously rad Dudes!–She is not God. She is not Bionic

Woman. She is … determined to make a damned difference!

“Well-behaved women rarely make history.”

Anita Borg, Institute for Women and Technology

Icon Woman Meets the Web …–submits resume on the Web– recruited on the Web–hired on the Web– trained on the Web–creates and conducts projects with

virtual teams on the Web–manages project and client

follow-up on the Web–manages career/reputation-building

on the Web

R.D.A.

Rate: 15%?, 25%?

Therefore: Formal “Investment

Strategy”/R.I.P.

“Firms will not ‘manage the careers’ of their employees. They

will provide opportunities to enable the employee to develop

identity and adaptability and

thus be in charge of his or her own career.”

Tim Hall et al., “The New Protean Career Contract”

Seminar Y2K/Brand Inside

Message: Distinct … or

Extinct!

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

It’s Girls, Stupid!

1996: 8.4M women, 6.7M men in college (est: 9.2 to 6.9 in 2007); more women than men in

high-level math and science courses

More girls in student govt., honor societies; girls read more books, outperform boys in artistic and musical ability, study abroad in

higher numbers

Boys do rule: crime, alcohol, drugs, failure to do homework (4:1)

Source: The Atlantic Monthly (5/2000)

Brand Inside

Brand Talent!

Issue Y2K

The Great War for Talent!

Tomorrow’s Headlines

“Molecular biologists are up 3 points, economists down 1/4,

in moderate trading”futureWEALTH, Stan Davis and

Christopher Meyer

There is no “talent shortage” …

if …

you are a GPTW*

*Great Place To Work

Talent war, Web-speed!

Every resume or employment question that comes to Lucent via

the Web gets answered in 30 minutes or less. [24/7.]

Red Herring [06.00], on Lucent Director of

Recruitment Jim Baughman

“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

“He grew his hair long, played guitar in a rock band, chased

girls, got into trouble. At age 17 he was flogged by his house

master, who described him as ‘the most difficult boy I’ve ever

had to deal with.’ ”

Solution?

Ritalin [“a chemical virtually identical to cocaine”/Reason

magazine]

Or …

Elect Him Prime Minister

Tony Blair*

*talk/May 2000

“Whoever is the most impertinent

has the best chance.”

W.A. Mozart

Talent = Brand

Brand Outside=

Brand Inside

Brand Outside

Context:

No “Commodities”!

In the Beginning …

“The audit has become a commodity.”

Big 5 audit partner to TP

What’s Special?

“Customers will try ‘low cost providers’ because the Majors have not given them any clear

reason not to.”

Leading Insurance Industry

Analyst (10-98)

“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

The “10X/10X Phenomenon”

10 Times Better/

10 Times Less Different

“When we did it ‘right’ it was still pretty

ordinary.”

Barry Gibbons on

“Nightmare No. 1”

TP’s “Mega-marketing-trends”

Rapidly aging population!Health fanaticism!

Environmental concerns!Freaky independence!

Women rule!

Brand Outside

Strategy 1:

Lead the Customer!

“Wealth in this new regime flows directly from innovation, not

optimization. That is, wealth is not gained by perfecting the known,

but by imperfectly seizing the unknown.”

Kevin Kelly, New Rules for the New Economy

Amen!

“The Age of the Never Satisfied

Customer”Regis McKenna

Brand Outside

Strategy 2:

Use E-Commerce

to Re-invent the Business!

Tomorrow Today: Cisco!

90% of $14.4BSave $500M++ (service and tech

support)

C.Sat e >> C.Sat HCustomer Engineer Chat Rooms ($1B?)

Cherry PickingVertical Markets

Plasticsnet.com: $370B; sellers pay $5K to $8K for

“storefront”; 5% to 10% cut

Hook: community services (database, catalogs, forums,

industry job bank, etc.)

Message …

COMMUNITY!/ COMMUNITY SERVICES!

B2B

1999 – 2004: 50X

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

T

GM/Ford/DaimlerChrysler (02-27)

Covisint$240B (+$500B)

I.P.O.

Goal?

Drive profits to zero!*

*Remember AMR and “dynamic pricing.”

Paradox?

Community Services/V.A.

Waste Extraction

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

Anne Busquet/ American Express

Not: “Age of the Internet”

Is: “Age of Customer Control”

The Supply Side …

The Age of the ChoiceboardThe War of the Choiceboards

Source: Adrian Slywotzky, HBR 1-2/2000 [<1%]

“In the network economy, the Website becomes the company’s primary interface to the customer.

The user interface becomes the marketing materials, store front,

store interior, sales staff and post-sales support all rolled into one.”

Jakob Nielsen, Designing Web Usability

“Most companies would do more business on the Internet if they

fired their entire marketing department and replaced it with

people who could produce interactive content that actually made it easier for users to buy.”

Jakob Nielsen, Nielsen Norman Group

“Where does the Internet rank in priority?

It’s No. 1, 2, 3, and 4.” Jack Welch

[Ge Miscellany …

Polymerland: 75% to Web

Appliances: $5 to 20 cents [Web vs. call Service Rep; 20

million calls per year

Source: Fast Company]

“Even if executives of established businesses grasp the impact of new

technologies … they still face a massive competitive disadvantage precisely

because they are incumbents. … They do complex financial calculations and get

bogged down in internal political debates. Insurgents have no such

inhibitions.”

Philip Evans & Thomas Wurster, Blown to Bits

There are 2 Kinds of …

Defense*

vs.

Offense**

*Fend off upstarts.**Reinvent our marketspace!

Web Strategy: GE Power Systems

“Launch and Learn”(4 sites in 30 days)

“It’s better to be first with less than last with more. Success on

the Web isn’t just about time to market, it’s also about

‘time to learning.’ ”

Jeff Levy, eHatchery

[He who has the quickest O.O.D.A. Loops* wins!

*Observe. Orient. Decide. Act. / Col. John Boyd]

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

“E-business is the final nail in the coffin

for bureaucracy at GE.”

Jack Welch/GE Annual Report 2000

[ Words to Live By …

“Hierarchy is an organization with its face

toward the CEO and its ass toward the customer.”

Kjell Nordstrom and Jonas Ridderstrale, Funky Business]

Brand Outside

Strategy 3:

Women Rule!

?????????

Home Furnishings … 94%Vacations … 92%

Houses … 91%Bank Account … 89%

Health Care … 75%Etc.

$3.3T + $1.5T = $4.8T*

* Larger than Japan!

48% working wives > 50%80% checks

61% bills53% stock (mutual fund boom)

43% > $500K95% financial decisions/

29% single handed

Women … 49% of Web users; 6 of 10 new users; 83% of wired women are primary decision makers for family healthcare,

finances, education.

Source: Business Week (11-99)

Yeow!

1970 … 1%

2000 … 50%

OPPORTUNITY

NO. 1!*

[* No shit!]

Carol Gilligan/ In a Different Voice

Men: Get away from authority, familyWomen: Connect

Men: Self-orientedWomen: Other-oriented

Men: RightsWomen: Responsibilities

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 Healthcare

Women are … more dissatisfied, frustrated by the way they are treated

and spoken down to by physicians, seek more information, are more pressed for time … and make 75% of health care decisions and control 2/3 of health care $

$$$ [and constitute 2/3 of health care employees].

Source: Patricia Braus, Marketing Healthcare to Women

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

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

Not!!

“Year of the Woman”

Enterprise Reinvention!

RecruitingHiring/Rewarding/ Promoting

Structure Processes

MeasurementStrategyCulture Vision

Leadership

THE BRAND ITSELF!

Not a Morality Play!

“It is critical that we all understand that IBM is not marketing to women

entrepreneurs because it is the thing to do, or even the right thing to do.

We are marketing to women entrepreneurs because it is a huge

opportunity.”

Cherie Piebes

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!”

Wanna see my “porn”

collection?

TP: A Modest AttaMarsh!

Karen HornSally Bott

23% MDs in last year

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

Mantra: “Any good can be ing-ed”

the driving experiencethe pumping experience

the sitting experiencethe reading experiencethe washing experiencethe cooking experience

Joseph Pine & James Gilmore, The Experience Economy: Work Is Theatre & Every Business a Stage

And Now For A Nod To 1/7th of Our Economy!

Health Care Tsunami

Prevention/Wellness/FitnessProactive Engineering/Gene

“stuff”[Blockbuster-Bazooka to Specific-Sniper’s Rifle]

Holistic/Homeopathic/Non-traditionalPatient-centric/Web-led

No waste [Healtheon/WebMD et al.]Etc.

TP 03.26.00: AMA Riff

1965: “ ‘Doctor’ will see you now. ‘Doctor’ will take care of you.”

YES, NURSE. ME GOOD PUPPY DOG.

1995: “HMO will take care of you.”

BULLSHIT.

2005: “I will take care of me. I’d like your expert help.”* [*P.S.: THE VIAGRA, ETC.] I

ORDERED ONLINE IS GREAT.]

Patient-centric* Health Care

Wellness (Fix to prevent.)

Partnership (“Tour guide” model.)

RESPECT! (Mutual.)

WOMEN RULE!

*Not: HMO-centric, Employer-centric, Insurer-centric, Doc-centric

Brand Leadership

Passion Rules!

Brand Leadership:ENTHUSIASM RULES!

“I am a dispenser of enthusiasm.”/ Ben

Zander

Brand Leadership!

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

communication of a story.”

Howard Gardner Leading Minds: An Anatomy of Leadership

“The challenge for IBM, AT&T and other mainstream companies is to re-instill a sense of adventure in

recruits.”

Burke Stinson, AT&T

Talent “War,” Marketplace “War”

“The successful company has to create an environment that imbues

its employees with a sense of passion.”

Joe Nocera, eCompany, on David Pottruck

Ann Richards’ Dogma

Show up!

Know your message!

PUT YOURSELF AT RISK EVERY DAY!