tom peters’ x25* excellence. always. 13 th annual world islamic banking conference kingdom of...

Tom Peters’ X25*Tom Peters’ X25*

EXCELLENCEXCELLENCE. ALWAYS.E. ALWAYS.

1313thth Annual World Islamic Banking Conference Annual World Islamic Banking ConferenceKingdom of Bahrain.11 December 2006Kingdom of Bahrain.11 December 2006

**In Search of ExcellenceIn Search of Excellence 1982-2007 1982-2007

Slides* at …

tompeters.comtompeters.com

*also “long”

EXCELLENCE. THE EXCELLENCE. THE

MANDATE FOR MANDATE FOR CHANGE.CHANGE.

“I am often asked by would-be entrepreneurs seeking escape from life within huge corporate structures, ‘How do I build a small firm for myself?’ The

answer seems obvious: Buy a Buy a very large one very large one and just waitand just wait.”.”

—Paul Ormerod, Why Most Things Fail: Evolution, Extinction and Economics

S&P Stability Ratings*

1985 2006

Low Risk 41% Low Risk 41% 13%13% Average Risk 24% 14%

High RiskHigh Risk 35% 35% 73%73%

*Likelihood of stable long-term earnings growth

Source: Fortune (2 October 2006)

““It is It is notnot the the strongest of the strongest of the

species that survives, species that survives, nornor the most the most

intelligent, but intelligent, but the the one most responsive one most responsive to changeto change.”.” —Charles Darwin

EXCELLENCE. EXCELLENCE. STARTERS.STARTERS.

BASICS.BASICS.

““Why in the Why in the world did world did you go to you go to SSiberiaiberia?”?”

The Peters Principles: Enthusiasm.Enthusiasm.

Emotion. Emotion. Excellence.Excellence. Energy. Energy. Excitement. Service. Growth. Excitement. Service. Growth.

Creativity. Imagination. Vitality. Creativity. Imagination. Vitality. Joy. Surprise. Independence. Joy. Surprise. Independence. Spirit. Community. Limitless Spirit. Community. Limitless human potential. Diversity. human potential. Diversity. Profit.Profit. Innovation. Design. Innovation. Design.

Quality. Entrepreneurialism. Quality. Entrepreneurialism. Wow.Wow.

Excellence1982: The Bedrock “Eight Basics”

1. A Bias for 1. A Bias for ActionAction2. Close to the 2. Close to the CustomerCustomer3. Autonomy and Entrepreneurship3. Autonomy and Entrepreneurship4. Productivity Through 4. Productivity Through PeoPeopplele5. 5. Hands OnHands On, Value-Driven, Value-Driven6. Stick to the Knitting6. Stick to the Knitting7. Simple Form, Lean Staff7. Simple Form, Lean Staff8. Simultaneous Loose-Tight8. Simultaneous Loose-Tight Properties” Properties”

EXCELLENCE. EXCELLENCE.

DEFINED.DEFINED. X06 X06

X.06.23X.06.23:: Whole Foods MarketsWhole Foods Markets …… StarbucksStarbucks … … WegmansWegmans …… Commerce Commerce

BankBank …… John Laing HomesJohn Laing Homes …… Apple Apple …… London DrugsLondon Drugs …… Griffin Hospital/ Griffin Hospital/

Planetree Alliance Planetree Alliance …… The Met The Met School/Big Picture School/Big Picture …… Carl SewellCarl Sewell …… Progressive InsuranceProgressive Insurance …… Stanford Stanford

women’s sports women’s sports …… Stanford D-School Stanford D-School …… HSM HSM …… Washington Speakers Bureau Washington Speakers Bureau … …

Build-A-Bear Build-A-Bear …… RE/MAX RE/MAX … … Donnelly’s Donnelly’s Weather Strip Service Weather Strip Service … … Jim’s GroupJim’s Group ……

CirCirqque du Soleilue du Soleil … … (U.S. Grant)(U.S. Grant) …… (Horatio Nelson)(Horatio Nelson)

Commerce Commerce BankBank

““Our whole Our whole story is story is growing growing

revenue.”revenue.” —Vernon Hills (Top-line driven; standard —Vernon Hills (Top-line driven; standard

is bottom-line driven by cost cutting)is bottom-line driven by cost cutting)

Commerce Bank: From “Service” to “Experience”Commerce Bank: From “Service” to “Experience”

7X. 730A-7X. 730A-800P. 800P.

F12A.F12A.**

**’93-’03/10 yr annual return: CB: 29%; ’93-’03/10 yr annual return: CB: 29%; WM: 17%; HD: 16%. Mkt Cap: 48% p.a.WM: 17%; HD: 16%. Mkt Cap: 48% p.a.

8,000 Radio City 8,000 Radio City Music HallMusic Hall … J.D. Power/Customer … J.D. Power/Customer

service/Bank/NYC/1service/Bank/NYC/1stst in 5 of 6; 2 in 5 of 6; 2ndnd in #6 … Inspired by Ray in #6 … Inspired by Ray Kroc … $36B ($100B in 6 years); +$750M per month/373 Kroc … $36B ($100B in 6 years); +$750M per month/373

branches in 7 states/900 in 6 years … player piano … branches in 7 states/900 in 6 years … player piano … Penny Arcade/$25K per machine … 9M lollipops, 2M dog Penny Arcade/$25K per machine … 9M lollipops, 2M dog

biscuits … stupid rule (red) button … call center not biscuits … stupid rule (red) button … call center not “cost center,” but opportunity/human by second “cost center,” but opportunity/human by second operation … over-invest in real estate … design-operation … over-invest in real estate … design-

experience fanaticism … Red!/Red Friday/Hot music … experience fanaticism … Red!/Red Friday/Hot music … deposits available next day (vs ½ on 3deposits available next day (vs ½ on 3rdrd; ½ on 5; ½ on 5thth; focus ; focus

on 99%, not 1%)on 99%, not 1%) … LONG HOURS!!!! (7/week/12 … LONG HOURS!!!! (7/week/12 hours/Fridays/15 minutes before) … “Do whacky things hours/Fridays/15 minutes before) … “Do whacky things

forfor customers” (VH) … “create magical moments of customers” (VH) … “create magical moments of surprise and delight for employees” (VH) … “Hire for surprise and delight for employees” (VH) … “Hire for attitude. Train for skills.” (VH) … Chinatown/10K first attitude. Train for skills.” (VH) … Chinatown/10K first

day; 28K first week … Commerce U in ’93 (“underlying day; 28K first week … Commerce U in ’93 (“underlying theme is fun”—VH)theme is fun”—VH)

“ … cut costs at most banks. ‘We have to push

them out of the branches.’ ‘We have to push them to

machines.’ We have to push them to the Internet.”

Source: Vernon HillSource: Vernon Hill

TP:TP: Experience-Design … Experience-Design … Top-line fanaticism (vs Cost-Top-line fanaticism (vs Cost-

fanaticism) … Deposits … fanaticism) … Deposits … Drive ’em Drive ’em toto the branch … the branch … Experience/Wow! … little Experience/Wow! … little

touches … no stupid rules … touches … no stupid rules … Talent/Attitude/RecognitionTalent/Attitude/Recognition

The Power of WOW!The Power of WOW!How Commerce Bank How Commerce Bank

Created a Super-Created a Super-Growth Business in a Growth Business in a No-Growth IndustryNo-Growth Industry

Vernon W. Hill, IIVernon W. Hill, II

John Laing John Laing HomesHomes

““Soft Skills, Soft Skills, Hard Dollars”Hard Dollars”

Source: Headline, Source: Headline, BigBuilder,BigBuilder, September 2006 September 2006

““Builder of the Year”/Builder of the Year”/Professional Professional BuilderBuilder … Experience … Communities/ … Experience … Communities/

Family values/ Relationships/After-sale “ …Family values/ Relationships/After-sale “ …talk to our customers …” J.D. Power talk to our customers …” J.D. Power

awards … Warranties … Price premiums … awards … Warranties … Price premiums … Design!!!! (all Divisions winners) (Top Design!!!! (all Divisions winners) (Top

“names”) … Data/market research … Top “names”) … Data/market research … Top company to work for … Team development company to work for … Team development … “I just love being a home builder.” (LW) … “I just love being a home builder.” (LW)

… Brand … Emaar Properties* (Robert … Brand … Emaar Properties* (Robert Booth/Int’l: “They have a tremendous Booth/Int’l: “They have a tremendous

focus on the customer, and that is hugely focus on the customer, and that is hugely important to us.”)important to us.”)

*Pay premium for Excellence. Invest for the longterm.*Pay premium for Excellence. Invest for the longterm.

sewell sewell

Customers Customers for Lifefor Life

FFLLOOWWEERRPPOOWWEERR

jim’s group jim’s group

Jim’s GroupJim’s Group:: Jim Penman.* Jim Penman.*

1984: Jim’s Mowing. 2006: Jim’s Group. 1984: Jim’s Mowing. 2006: Jim’s Group.

2,600 franchisees2,600 franchisees (Australia, NZ, UK). (Australia, NZ, UK). Cleaning. Dog washing. Handyman. Cleaning. Dog washing. Handyman.

Fencing. Paving. Pool care. Etc.Fencing. Paving. Pool care. Etc.

“People first.” Private. Small staff. Franchisees “People first.” Private. Small staff. Franchisees can leave at will. 0-1 complaint per year is can leave at will. 0-1 complaint per year is

norm; cut bad ones quickly.norm; cut bad ones quickly.

*Ph.D. cross-cultural anthropology; mowing on the side

Source: MT/Management Today (Australia), Jan-Feb 2006

**Focused on Focused on growthgrowth and and revenuerevenue and “ and “offenseoffense,”,” not defense and cost containment.not defense and cost containment.

**People-talent obsession.People-talent obsession.

**Provide mind-bending experiences. (DrivenProvide mind-bending experiences. (Driven by design primacy.)by design primacy.)

**Love affair with customers.Love affair with customers.

**Happy to use words like Happy to use words like “Wow.”“Wow.”

**Pretty close to the high end of the market.Pretty close to the high end of the market.

[*[*Ability to make silk purses filled with gold out ofAbility to make silk purses filled with gold out of sows’ ears: Wegmans-Whole Foods-Stew Leonard’ssows’ ears: Wegmans-Whole Foods-Stew Leonard’s and groceries; Jim’s Group and dog-walking;and groceries; Jim’s Group and dog-walking; Donnelly and weather strip installation; DeMarDonnelly and weather strip installation; DeMar and plumbing.and plumbing.]]

**Execution!Execution!

Cirque du Cirque du SoleilSoleil

““Every time we come to a comfort Every time we come to a comfort zone, we will find a way out.” “No zone, we will find a way out.” “No

Cloning.” “‘Reinvent the brand’ Cloning.” “‘Reinvent the brand’ with each new show.” “A typical with each new show.” “A typical

day at the office for me begins by day at the office for me begins by

asking,asking, ‘‘What is What is impossible that I impossible that I am going to do am going to do todaytoday?’”?’” —Daniel Lamarre, —Daniel Lamarre,

president, Cirque du Soleilpresident, Cirque du Soleil

AppleApple

““Insanely Insanely Great”Great”

EXCELLENCE. EXCELLENCE.

INNOVATE. INNOVATE. OR. DIE.OR. DIE.

“I don’t believe in

economies of scale. You You don’t get better don’t get better by being bigger. by being bigger. You get worseYou get worse.”.” —

Dick Kovacevich/Wells Fargo

“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 I’m sure there are success stories out are success stories out

there, but at this there, but at this moment I draw a moment I draw a

blankblank.”.” —Mark Sirower, The Synergy Trap

SpinoffsSpinoffs systematically perform better than IPOs … track

record, profits … “freed from the “freed from the confines of the parent … more confines of the parent … more entrepreneurial, more nimbleentrepreneurial, more nimble”

—Jerry Knight/ Washington Post/ 08.05

InnoTacsInnoTacs

We We becomebecome who we who we

spend time spend time with!with!

Measure “Strangeness”/Portfolio Quality

StaffStaffConsultantsConsultants

VendorsVendorsOut-sourcing Partners Out-sourcing Partners (#, Quality)(#, Quality)

Innovation Alliance PartnersInnovation Alliance PartnersCustomersCustomers

Competitors Competitors (who we “benchmark” against)(who we “benchmark” against)

Strategic Initiatives Strategic Initiatives Product Portfolio Product Portfolio (LineEx v. Leap)(LineEx v. Leap)

IS/IT ProjectsIS/IT ProjectsHQ LocationHQ Location

Lunch MatesLunch MatesLanguageLanguage

BoardBoard

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

vicious cycle of vicious cycle of competitive competitive

benchmarking and benchmarking and imitation.”imitation.” —W. Chan Kim & Renée Mauborgne,

“Think for Yourself —Stop Copying a Rival,” Financial Times/2003

try it. Try it. Try it. try it. Try it. Try it. Try it. Try it. Try it.Try it. Try it. Try it. Try it. Try it. Try it. Try it. Try it.Try it. Try it. Try it. Try itTry it. Try it. . Try it. Try it. Try it. Try it. Try it. Try it. Try it. Try it. try it. Try it. Try it. try it. Try it. Try it. try it. Try it. try it. Try it.Try it. Try it.Try it. Try it. Try it. Try it. Try it.

Try it. Try it.

““ExperimenExperiment t

fearlessly”fearlessly”Source: BW0821.06, Type A Organization Strategies/

“How to Hit a Moving Target”—Tactic #1

““We made mistakes, of course. Most of them were We made mistakes, of course. Most of them were omissions we didn’t think of when we initially wrote the omissions we didn’t think of when we initially wrote the

software. software. We fixed them by doing it over and over, We fixed them by doing it over and over, again and again.again and again. We do the same today. While our We do the same today. While our competitors are still sucking their thumbs trying to competitors are still sucking their thumbs trying to

make the design perfect, we’re already on prototype make the design perfect, we’re already on prototype

versionversion ##55.. By the time our rivals areBy the time our rivals are

ready with wires and screws, we are on versionready with wires and screws, we are on version

##1010.. It gets back to It gets back to

planning versus actingplanning versus acting: : We act We act from day onefrom day one; ; others plan how others plan how toto planplan——for monthsfor months.”.” —Bloomberg by —Bloomberg by

BloombergBloomberg

tolerate tolerate [encourage?] [encourage?]

failurefailure

““RewardReward excellent failures.

PunishPunish mediocre

successes.”Phil Daniels, Sydney exec

focusfocus

““We will We will notnot, I , I repeat repeat notnot, ,

pretend to be pretend to be ‘all things to all ‘all things to all people.’”people.’” —CEO, Investec (03.06)

Private Equity-financedPrivate Equity-financed Firm, Firm, BestBest *Case *Case

**Focus! Focus! Focus!Focus! Focus! Focus!*In a [Big] hurry*In a [Big] hurry

*CEO/Top team, “skin*CEO/Top team, “skin in the game” in the game”

*CEO, 100% of time*CEO, 100% of time on the biz on the biz

*Merit! Merit!*Merit! Merit!*Motivated oversight*Motivated oversight

*Worst case: Rape & Pillage

EXCELLENCE.EXCELLENCE.1966. 2006.1966. 2006.

4/404/40

De-centralizationDe-centralizationexecutionexecution

accountabilityaccountability6:15a.m.6:15a.m.

““If if feels If if feels painfulpainful and and

scaryscary—that’s —that’s realreal delegation”delegation”

—Caspian Woods, small biz owner

De-centralizationDe-centralizationexecutionexecution

accountabilityaccountability6:15a.m.6:15a.m.

““ExecutionExecution is is the the jobjob of the of the

businessbusiness leaderleader.”.” —Larry Bossidy—Larry Bossidy & Ram

Charan/ Execution: The Discipline of Getting Things Done

De-centralizationDe-centralizationexecutionexecution

accountabilityaccountability6:15a.m.6:15a.m.

““GE has set a GE has set a standard of candor. standard of candor.

… There is no … There is no puffery. … puffery. … There There isn’t an ounce of isn’t an ounce of

denial in the placedenial in the place.”.” —

Kevin Sharer, CEO Amgen, on the “GE mystique” (Fortune)

De-centralizationDe-centralizationexecutionexecution

accountabilityaccountability6:15a.m.6:15a.m.

EXCELLENCE. EXCELLENCE.

BEDROCK.BEDROCK.TALENT.TALENT.

Hire Hire ververy y good good

people!people!

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

Pacific … changed 2020 of his

4040 box plant managers to put more talented,

higher paid managers in charge. He increased profitability from

$$2525 million to $$8080 million in 22 years.”

—Ed Michaels, War for Talent

EMPHASIZEMPHASIZE THE E THE “SOFT “SOFT

SKILLS.”SKILLS.”

PUT HR AT THE PUT HR AT THE HEAD OF THE HEAD OF THE HEAD TABLE. HEAD TABLE. BEST PEOPLE. BEST PEOPLE.

NOBLEST NOBLEST MISSION.MISSION.

A review of Jack and Suzy Welch’s Winning claims there are but two key differentiators that set GE “culture” apart from the herd:

First: Separating financial forecasting and performance measurement. Performance measurement based, as it usually is, on budgeting leads to an epidemic of gaming the system. GE’s performance measurement is divorced from budgeting—and instead reflects how you do relative to your past performance and relative to competitors’ performance; i.e., it’s about how you actually do in the context of what happened in the real world, not as compared to a gamed-abstract plan developed last year.

Second: Putting Putting HRHR on a par with on a par with finance and finance and marketing.marketing.

LIVE FOR LIVE FOR TALENT!TALENT!

Our Mission

To develop and manage To develop and manage talent;talent;

to apply that talent,to apply that talent,throughout the world, throughout the world,

for the benefit of clients;for the benefit of clients;to do so in partnership; to do so in partnership;

to do so with profit.to do so with profit.

WPP

< CAPEX< CAPEX> People!> People!

Brand Brand = =

Talent.Talent.

EXCELLENCE. EXCELLENCE.

BEDROCK.BEDROCK.LEADERSHIP.LEADERSHIP.

9Ps.9Ps.

PURPOSEPURPOSE..PASSIONPASSION..PotentialPotential..PresencePresence..PersonalPersonal..

PERSISTENCEPERSISTENCE..PEOPLEPEOPLE. . PotentPotent..

PositivePositive..

““People want to be part People want to be part of something larger than of something larger than themselvesthemselves.. They want to They want to

be part of something they’re be part of something they’re really really proudproud of, that they’ll of, that they’ll

fight fight forfor,, sacrifice sacrifice forfor , , trusttrust.”.” —Howard Schultz, Starbucks (IBD/09.05)

PURPOSEPURPOSE..

PASSIONPASSION..PotentialPotential..PresencePresence..PersonalPersonal..

PERSISTENCEPERSISTENCE..PEOPLEPEOPLE. . PotentPotent..

PositivePositive..

““Nothing is so Nothing is so contagious as contagious as enthusiasm.”enthusiasm.”

—Samuel Taylor Coleridge

PURPOSEPURPOSE..PASSIONPASSION..

PotentialPotential..PresencePresence..PersonalPersonal..

PERSISTENCEPERSISTENCE..PEOPLEPEOPLE. . PotentPotent..

PositivePositive..

“The role of the Director is to create a space where the actors

and actresses can become become more than they’ve ever more than they’ve ever been before, more than been before, more than

they’ve dreamed of they’ve dreamed of beingbeing.”.” —Robert Altman, Oscar acceptance speech

PURPOSEPURPOSE..PASSIONPASSION..PotentialPotential..PresencePresence..

PersonalPersonal..PERSISTENCEPERSISTENCE..

PEOPLEPEOPLE. . PotentPotent..

PositivePositive..

““You must You must bebe the change you the change you

wish to see in the wish to see in the world.”world.”

Gandhi

PURPOSEPURPOSE..PASSIONPASSION..PotentialPotential..PresencePresence..PersonalPersonal..

PERSISTENCEPERSISTENCE..PEOPLEPEOPLE. . PotentPotent..

PositivePositive..

““Success seems to Success seems to be largely a be largely a

mattermatter

of of hanginghanging onon after others after others have let go.”have let go.” —William

Feather, author

PURPOSEPURPOSE..PASSIONPASSION..PotentialPotential..PresencePresence..PersonalPersonal..

PERSISTENCEPERSISTENCE..

PEOPLEPEOPLE. . PotentPotent..

PositivePositive..

““Leaders Leaders

‘‘dodo’’ people. people.

Period.”Period.” —Anon.

PURPOSEPURPOSE..PASSIONPASSION..PotentialPotential..PresencePresence..PersonalPersonal..

PERSISTENCEPERSISTENCE..PEOPLEPEOPLE. .

PotentPotent..PositivePositive..

“Beware of the tyranny of making

Small Changes to Small

Things. Rather,

make BigBig Changes

to BigBig Things.”

—Roger Enrico, former Chairman, PepsiCo

PURPOSEPURPOSE..PASSIONPASSION..PotentialPotential..PresencePresence..PersonalPersonal..

PERSISTENCEPERSISTENCE..PEOPLEPEOPLE. . PotentPotent..

PositivePositive..

On NELSON: “[other] “[other] admirals more admirals more frightened of frightened of losing than losing than

anxious to win”anxious to win”

PURPOSEPURPOSE..PASSIONPASSION..PotentialPotential..PresencePresence..PersonalPersonal..

PERSISTENCEPERSISTENCE..PEOPLEPEOPLE. . PotentPotent..

PositivePositive..

““Excellence can be obtained if you:Excellence can be obtained if you: ... care more than others think is wise; ... care more than others think is wise; ... risk more than others think is safe; ... risk more than others think is safe; ... dream more than others think ... dream more than others think is practical;is practical; ... expect more than others think ... expect more than others think is possible.”is possible.”

Source: Anon. (Posted @ tompeters.com by K.Sriram, November 27, 2006 1:17 AM)

EXEXCELLE CELLE ALWALWAYSAYS..