tom peters’ re-imagine ! business excellence in a disruptive age deloitte/naplesfl/7november 2003

Tom Peters’

Re-imagine!

Business Excellence in a Disruptive Age

Deloitte/NaplesFL/7November 2003

Slides at …

tompeters.com

“Uncertainty is the only thing to be sure of.” –Anthony Muh,

head of investment in Asia, Citigroup Asset Management

“If you don’t like change, you’re going to like irrelevance even less.” —General Eric Shinseki, Chief of Staff,

U. S. Army

Re-imagine! Business Excellence in a Disruptive Age

1. It is the foremost task —and responsibility— of our generation to re-imagine our enterprises and institutions, public and private.

It is the foremost task—and responsibility—of our generation to

re-imagine our enterprises, private

and public. —from the cover, Re-imagine

Re-imagine!

2. War-making, commerce, politics, and the essential nature of human interchange have come unglued. We are in a … Brawl with No Rules. We have to make it up as we go along.

“We are in a

brawl with no rules.”

Paul Allaire

Re-imagine!

3. Incrementalism is .. Out. Destruction is … In. Built to last is … Out. Built to flip is … In.

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.

S&P 500 from 1957 to 1997: 74 members of the Class of ’57 were

alive in ’97; 12 (2.4%) of 500 outperformed the market from 1957 to 1997.

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

Rate of Leaving F500

1970-1990: 4XSource: The Company, John Micklethwait & Adrian Wooldridge

“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

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 difficulties … arise from the inherent conflict between the need to control existing operations and the need to create the kind of

environment that will permit new ideas to flourish—and old ones to die a timely death. We believe that most corporations will find it impossible

to match or outperform the market without abandoning the assumption of continuity. … The current apocalypse—the transition from a state of continuity to state of discontinuity—has the same suddenness as the trauma that beset civilization

in 1000 A.D.” —Richard Foster & Sarah Kaplan

The Three Levels of Innovation

Transformational

Substantial

Incremental

Source: Dick Foster, Business 2.0 (05.01) Note: Each level requires totally different processes!

No Wiggle Room!

“Incrementalism is innovation’s worst enemy.”

Nicholas Negroponte

“I don’t intend to be known as the

‘King of the Tinkerers.’ ” —CEO, large

financial services company

Re-imagine!

4. There is no higher priority than the Total Transformation of all business practice to eBusiness practice—encompassing every element of the enterprise and every member of its family of alliances and partners. The Internet changes everything. Now.

“E-commerce is happening the way all the hype said it would. Internet

deployment is happening. Broadband is happening. Everything we ever said

about the Internet is happening. And it is very, very early. We can’t even glimpse IT’s potential in changing the way people work and live.” —Andy Grove

(BusinessWeek/August 2003)

“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

“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

100 square feet

“Dawn Meyerreicks, CTO of the Defense Information 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

OODA Loop/Boyd Cycle“Unraveling the competition”/ Quick Transients/ Quick Tempo (NOT JUST

SPEED!)/ Agility/ “So quick it is disconcerting” (adversary over-reacts or under-reacts)/ “Winners used tactics that caused the enemy to unravel before the

fight” (NEVER HEAD TO HEAD)

BOYD: The Fighter Pilot Who Changed the Art of War (Robert Coram)

5. Ninety percent of white-collar jobs (90 percent of all jobs) as we know them will be disemboweled in the next 15 years. Done. Gone. Kaput.

Re-imagine!

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)

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?”

“P&G Hires Out Employee Services to IBM” —Burlington Free Press/09.10.03/

on IBM’s 10-year, $400M contract with P&G (P&G farmed out IT to HP in May, Facilities to

Jones Lang LaSalle in June)

“Outsourcing Trend Called ‘Threat’ to Middle-class Workforce” —USA

Today/08.05.03 (Mgt jobs moving: 2000: 0; 2005: 37,000)

“Loss of Factory Jobs May Have a Long Fall to Bottom” —Boston Globe/08.10.03

(75,000 per month during last 18 months)

“The New Job Reality” —Cover/USN&WR/08.11.03

(“The dearth of jobs stems from factors signaling a sea change…”)

Predicted U.S. High-wage Job Losses

2005 2010

Managers 37,000 288,000Life sciences 3,700 37,000Design 6,000 30,000Architecture 32,000 184,000Bus Ops 61,000 348,000Computer 109,000 473,000Office support 588.000 3,300,000

Source: Forrester Research (BusinessWeek/08.25.03)

!!!!!!!!!

ebookers PLC

“Don’t own nothin’ if you can

help it. If you can, rent your

shoes.”F.G.

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

6. “Winners” (survivors!) will become de facto bosses of Me Inc.

Free the Cubicle Slaves! Self-reliance replaces corporate cosseting. Hooray!

Re-imagine!

“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

Re-imagine!

7. We must learn to add value through creativity … by inventing … Extraordinary Experiences … which provide scintillating “solutions” to customers’ oft unexpressed desires and dreams. Out: Tangibles. In: Intangibles.

“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

Gerstner’s IBM: Systems Integrator of

choice. Global Services:

$40B. Pledge/’99: Business Partner

Charter. 72 strategic partners, aim for 200. Drop

many in-house programs/products. (BW/12.01).

IBM/Q3/10.15.03/Rev: +5%

Services/Consulting: +11%Software: +5%Hardware: -5%

PCs: -2%Technology/Chips: -33%

WHAT CAN BROWN DO FOR YOU?

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

And the Winners Are …

Televisions –12%Cable TV service +5%

Toys -10%Child care +5%

Photo equipment -7%Photographer’s fees +3%

Sports Equipment -2%Admission to sporting event +3%

New car -2%Car repair +3%

Dishes & flatware -1%Eating out +2%

Gardening supplies -0.1%Gardening services +2%

Source: WSJ/05.16.03

FEES! FEES! FEES!

—Cover Story, BW/09.29.03

It’s All About EXPERIENCES: “Trapper” to “Wildlife Damage-control Professional”

Trapper: <$20 per beaver pelt.

WDCP: $150/“problem beaver”; $750-$1,000 for flood-control

piping … so that beavers can stay.

Source: WSJ/05.21.2002

<TGWvs.

>TGR

Re-imagine!

8. Design Rules … in an Age of Experiences/ Dream Fulfillment.

Design Transforms even the [Biggest] Corporations!

TARGET … “the champion of America’s new design democracy” (Time) “Marketer of the Year 2000”

(Advertising Age)

Re-imagine!

9. Brand Value = All Value = Obeisance to Metaphysical Management.

“WHO ARE WE?”

“WHAT’S OUR

STORY?”

“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

Re-imagine!

10. WOMEN ROAR. Women buy (ALL) the stuff. Re-imagine the brand itself—and all business practices—around women-as- purchasers.

?????????

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%

????

80%

Riding Lawnmowers

$5+T > Japan

10M/28M/$3.6T > Germany

“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 don’t buy

brands. They join them.”

EVEolution

2.6 vs. 21

1. Men and women are different.2. Very different.3. VERY, VERY DIFFERENT.4. Women & Men have a-b-s-o-l-u-t-e-l-y nothing in common.5. Women buy lotsa stuff.6. WOMEN BUY A-L-L THE STUFF.7. Women’s Market = Opportunity No. 1.8. Men are (STILL) in charge.9. MEN ARE … TOTALLY, HOPELESSLY CLUELESS ABOUT WOMEN.10. Women’s Market = Opportunity No. 1.10A. Duh.

Re-imagine!

11. Boomers & Geezers have (ALL) the money. Pay attention!

Aging/“Elderly”

$$$$$$$$$$$$“I’m in charge!”

“ ‘Age Power’ will rule the 21st century, and we are woefully

unprepared.”Ken Dychtwald, Age Power: How the 21st

Century Will Be Ruled by the New Old

2000-2010 Stats

18-44: -1%

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

50+

$7T wealth (70%)/$2T annual income50% all discretionary spending

79% own homes/40M credit card users41% new cars/48% luxury cars

$610B healthcare spending/74% prescription drugs

5% of advertising targets

Ken Dychtwald, Age Power: How the 21st Century Will Be Ruled by the New Old

“Marketers attempts at reaching those over 50 have been

miserably unsuccessful. No market’s motivations and needs are so poorly understood.”—Peter

Francese, founding publisher, American Demographics

Re-imagine!

12. Creative Enterprises demand … Awesome (& Creative) Talent. Everywhere.

Age of AgricultureIndustrial Age

Age of Information IntensificationAge of Creation Intensification

Source: Murikami Teruyasu, Nomura Research Institute

“When land was the scarce resource, nations battled

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

Stan Davis & Christopher Meyer, futureWEALTH

Model 25/8/53

Sports Franchise GM*

*48 = $500M

Message: Some people are better than other

people. Some people are a helluva lot better than other

people.

Brand = Talent.

Re-imagine!

13. WOMEN RULE. Women are … Tomorrow’s Leaders. (Period.)

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

outshine their male counterparts in almost

every measure”Title, Special Report, BusinessWeek, 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

Women Rule

Match market power

Attributes fit N.O.W. (New Org World)

10M biz owners

Psssst! Wanna see my “porn” collection?

!!!!!!!!!!!!!!!

14 to 168*

*Leadership Positions/Deloitte/1992-2002/WIAR

“Are men obsolete?” —Headline,

USN&WR/06.03.03

Re-imagine!

14. “Talent Development” rests upon Total Re-imagining of our insipid schools. Those who “color outside the box” and “can’t sit still” are the New Heroes.

“My wife and I went to a [kindergarten] parent-teacher conference and were informed that our budding

refrigerator artist, Christopher, would be receiving a grade of Unsatisfactory in art. We were shocked. How could any child—let alone our child—receive a poor

grade in art at such a young age? His teacher informed us that he had refused to color within the lines, which was a

state requirement for demonstrating ‘grade-level motor

skills.’ ”Jordan Ayan, AHA!

Re-imagine!

15. Weird Wins … in Weird Times.

(Innovation = Easy. Hang Out with Weird = Get Weird.) (Q.E.D.)

Saviors-in-Waiting

Disgruntled CustomersOff-the-Scope Competitors

Rogue EmployeesFringe Suppliers

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

“To grow, companies need to break out of a vicious

cycle of competitive benchmarking, imitation and pursuit.” —W. Chan Kim & Renée Mauborgne, “Think

for Yourself —Stop Copying a Rival,” Financial Times/08.11.03

“Aiming to beat the competition has the opposite effect to the one

intended. It keeps companies focused on the competition. When asked to

build competitive advantage, managers typically rate themselves

against competitors, assess what they do and try to do it better.” —W. Chan Kim &

Renee Mauborgne, “Think for Yourself—Stop copying a Rival”/FT/08.03

“The Bottleneck is at the Top of the Bottle”

“Where are you likely to find people with the least diversity of experience, the largest investment in the past, and

the greatest reverence for industry dogma? At the top!” — Gary Hamel, “Strategy or

Revolution/ Harvard Business Review

Huh?

“Quiet, workmanlike, stoic leaders bring about the big

transformations.”—JC

Pastels?

T. Paine/P. Henry/A. Hamilton/T. Jefferson/B. FranklinA. Lincoln/U. S. Grant/W. T. Sherman

TR/FDR/LBJ/RR/JFKM.L. King

C. de GaulleM. Gandhi

W. ChurchillM. Thatcher

PicassoMozart

Copernicus/Newton/EinsteinJ. Welch/L. Gerstner/L. Ellison/B. Gates/S. Ballmer/S. Jobs/S.

McNealyA. Carnegie/J. P. Morgan/H. Ford/J.D. Rockefeller/T. A. Edison

Audie Murphy was the most decorated soldier in WW2.

He won every medal we had to offer, plus 5 presented by Belgium and France. There was one common medal he

never won …

… the Good Conduct

medal.

Characteristics of the “Also rans”*

“Minimize risk”“Respect the chain of

command”“Support the boss”

“Make budget”*Fortune, article on “Most Admired Global Corporations”

Re-imagine!

16. Leading = Re-imagining = Unleashing Passion in One & All. Winners … Pursue Quests to Places as Yet Unimagined. Leaders applaud their “followers’ ” Quirky Bravery … and egg them on to ever more wild & woolly experiments.

“I don’t know.”

“If things seem under control, you’re just not

going fast enough.”

Mario Andretti

“If it works, it’s

obsolete.”

—Marshall McLuhan

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!)

“We have a ‘strategic’ plan. It’s called doing things.” — Herb Kelleher

“Management has a lot to do with answers. Leadership is a function of questions. And the

first question for a leader always is: ‘Who do we

intend to be?’ Not ‘What are we going to do?’ but ‘Who do

we intend to be?’” —Max DePree, Herman Miller

CEO Assignment2002 (Bermuda):

“Please leap forward to 2007, 2012, or 2022, and write a business history of

Bermuda. What will have been said about your company during your

tenure?”

Ah, kids: “What is your vision for the future?” “What have you accomplished since your first book?” “Close your eyes and

imagine me immediately doing something about what you’ve just said. What would it be?”

“Do you feel you have an obligation to ‘Make the world a

better place’?”

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

“In Tom’s world it’s always better to try a swan dive and deliver a colossal belly flop than to step timidly off the board while holding your

nose.” —Fast Company /October2003