tom peters’ lessons in leadership tampa 5 may 2000

TOM PETERS’ LESSONS IN LEADERSHIP

Tampa5 May 2000

Defeated Before The Starter’s Gun!

“Track 4: Managing Organization Change (Helping

Tired and Overworked Professionals with Today’s

Workplace Realities)”

You are the Rock Stars

of the B2B Age!

Pentium III 800MHz: $42,893.00/#Hermes Scarf: $1,964.29

Saving Private Ryan on DVD: $874.75Mercedes-Benz: $18.98Hot-rolled steel: $0.19

Source: Fortune (3.20.00)

1 Year = 1.5 Wal*Marts

03.27.99: $167B03.27.00: $555B

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

“Researchers say they have found a way to mate human cells with circuitry in a ‘bionic chip’ … The tiny device – smaller and thinner

than a strand of hair – combines a healthy human cell with an electronic circuitry chip.”

AP/AOL/02-00

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)

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.

“There is probably going to be more confusion in

the business world in the next decade than there has been in any decade

in history.”Steve Case (2-00)

“We are in a

brawl with no rules.”

Paul Allaire

S.A.V.

T.T.D.sThe next slide is the first of many

“T.T.D.” activities. I.e.: Things To Do. These are by and large shorthand forms of training exercises I use.

Also: Most of these T.T.D. slides have accompanying Notes.(See following slide.)

Tom Peters

T.T.D./True or False:

“incrementalism”

VERSUS

“innovation”?

Notes Page• This is a daunting issue. There is no “right answer.”

But it merits constant, conscious debate. Consider the value of incremental change. [Kaizen, etc.] And discuss whether or not this thwarts “BIG” initiatives aimed at wholesale reinvention.

• Also: Consider … “Can we do both?” [I’m not sure.] P.S.: This crucial issue holds for Finance Departments as much as Product Divisions. And it holds for the smallest and newest of businesses! THIS DEBATE IS WORTH LOTS OF TIME! KEEP IT PRACTICAL!

Seminar Y2K

Brand Everything:Distinct or Extinct!

Part I: Forces @ WorkPart II: Brand Inside

Part III: Brand OutsidePart IV: Brand Leadership

Forces @ Work

The Destruction Imperative!

Forget > Learn

“The problem is never how to get new, innovative thoughts into your mind, but how to get old ones out.”

Dee Hock

“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

“Acquisitions are about buying market share. Our challenge is to create markets. There is a big difference.”

Peter Job, CEO, Reuters

“We chose not to do a discounted cash flow analysis of their future earnings. We wanted their talent and we wanted their intellectual property.”

Art Reidel, CEO, Pharsight

“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

Dept. Head I = Sports G.M.

Dept. Head II = V.C.

G.M. = The Recruitment and Development of Top Talent.

[Period!]

V.C. = Bets on “Talent.” Bets on Projects. [Period!]

Silicon Valley Success Secrets

“Pursuit of risk”: 4 of 20 in V.C. portfolio go bust; 6 lose money; 6

do okay; 3 do well; 1 hits the jackpot

Source: The Economist

“R & D”

Intel’s venture fund: 275 investments, $3.5B

Source: Fast Company (12-99)

Net World!

Act now. Analyze later.

Avram Miller

[TP to Fitness Chain Owner …

“Do 5 deals before you go home!”]

“Steve Ross had a wonderful philosophy: People get fired for

not making mistakes.”Bob Pittman

T.T.D.

Evaluate your portfolio of projects [and people]: Are

you placing enough interesting [long shot?]

bets?

Notes Page

• Be brutally honest!

• Hint: This holds for you and me as individuals as well as for our unit.

C.E.O. to

C.D.O.

The Gales of Creative Destruction

+29M = -44M + 73M

+4M = +4M - 0M

Paradox Redux

Atlanta: +113,600 = #1 metro area

Layoffs [major]: BellSouth, Lockheed, Coca-Cola

T.T.D.

How do you rate as a …

C.D.O.?

Notes Page

• So … what … exactly … are you doing to DESTROY what you [and yours] are today? List every Project that aims to ATTACK today’s “culture” and assumptions. Be specific!

Brand Inside

PSF 1:Brand Org!

108 X 5vs.

8 X 1*

* 540 vs. 8

And Now the Equivalent …

White Collar Revolution!

ERP, ECM, Web, Etc.

IT’S THE GIANT SUCKING SOUND

OF SLACK BEING EXTRACTED FROM

THE GLOBAL ECONOMY!

“The coefficient of friction associated with the grunge

of business is amazing!”

Michael Schrage

Cemex and FDX!

Buzzsaw.com

Builders, Owners, Architects, Contractors, Suppliers

$4T industry

5,300 commercial bldg. projects’ specs on-line; +70 per day

The Pincer 5

“Destructive” entrepreneurs/ Global Competition

“White Collar Robots”

THE INTERNET! [E.g.: GM + Ford + DaimlerChrysler]

Global Outsourcing [E.g.: India, Mexico]

Speed!!

T.T.D.

Discuss: Is my “90% in 10+ years” extreme?

Notes Page

• I admit that some say I’m over-the-top here. I honestly don’t think I am. Try and imagine your HR/Whatever Dept. fully automated with numerous tasks outsourced … to India or Ireland.

“Assetless Company”

J.B.

RR on 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

12/31/00 (per Newsweek 04.24.00)

75% of U.S. universities will have on-line offerings/ 5.8 million students

“Unbundling” profs’ jobs (star lecturer, facilitator)/ Repackage “content”

as multi-media “event”

AAUP is angry! (Good news!)

355 studies: Equal results! (and one teachers union study

that disagrees!)

So what will be the Basic Building Block of the

New Org Unit?

Why are there no books on how to create

a “Cool, Rocking, WOW-producing

Finance Department”?

PSF 1.0

Professional Service Firm Conversion Kit /

Release 1.0

PSF 1.0

Department Head

to …

Managing Partner, HR [IS, etc.] Inc.

“support function” / “cost center” / “bureaucratic

drag”

or …

“Rock Stars of the ‘Age of Talent’ ”

You are the Rock Stars

of the B2B Age!

NAPM: Not “Purchasing”!NAPM: Not “Supply Chain Mgt.”

NAPM = TE/IR!*

*Total Enterprise/Industry

Reinvention!

[I.e.: Welcome to the Y2K New Orleans Jazz and Real Cool Purchasing

Dudes Festival!]

Words matter!

The “7Ps” of PSF 1.0

Projects!Passion!

Provocation!Partnership!

Politics!Professionalism!

Performance!

C.I.O. to

C.E.F.R.N.S.*

*Chief Evangelist For

Really Neat Stuff

T.T.D.

Compare: “Department Head” versus

“Managing Partner, Finance Inc.”

Notes Page

• See our book, the Professional Service Firm50, re the differences between a traditional “Dept.” and a full-fledged “PSF.” Our “The Work Matters” manifesto – at tompeters.com – also covers this.

Seminar Y2K/Brand Inside

Message: Distinct … or

Extinct!

“How long does ‘culture change’

take?”

What Do I “Do” First?

One Minute Excellence!*

*Thomas Watson

Culture Change is not “Corporate.”Culture Change is not a “Program.”

Culture change does not take “Years.”Culture Change does not start “Today.”

Culture Change starts Right Now!Culture Change

Lives in the Moment!Culture Change is

Entirely in Your Hands!

Brand Inside

PSF 2:Brand Work!

“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)

WOW Project Anatomy

I. Create!II. Sell!

III. Implement! IV. Exit!

I. Create!

Reframe! THERE ARE NO “SMALL” PROJECTS!

Observe & Record!!Head for the trenches!

You gotta love it!

Measure: WOW!, Beauty, Raving Fans, Impact!

Build a no-baloney Business PlanCreate community. Now!

Obsess on … the End User. Now!

Reframers’ Rules:

Rule 1: Never accept an assignment as given!

Rule 2: You’re never so powerful as when you are “powerless”!Rule 3: Every “small” project contains the entire enterprise

DNA!

Measures

–WOW!–Beauty!–Raving Fans!–Impact!

E.g.: WOW Scale

1. … Dull as dishwater.

5. … Gets the job done.

7. … “Good work!”.

10. … A serious “Braggable”!

T.T.D.

MEASURE … NOW … P-L-E-A-S-E!

Notes Page• NO BALONEY: THIS IS MY #1 GOAL FOR THE WHOLE DAMN SEMINAR … THAT YOU [AND YOURS] WILL MEASURE EVERY PROJECT AGAINST MY FOUR KEY CRITERIA: WOW!, BEAUTY, RAVING FANS, IMPACT.

• [P-L-E-A-S-E.]

[Just Say “No” to …

S-t-r-e-t-c-h]

“Every project we take on starts with a question:

How can we do what’s never been done

before?”Stuart Hornery, CEO, Lend Lease

II. Sell!

Master “The Pitch”!Build Buzz. Consciously.

Network maniacally!Preach to the choir!

Forget your enemies. [Surround and marginalize!]Money kills!

SELL, SELL, SELL!

III. Implement!

- Live, eat, sleep … Quick Prototype!- Play!

- Keep on recruiting! (Sell!)- Obsess on the End User Community!

(Sell!)- Become a Milestone Maniac! / a Timeline Tyrant! / a List Freak! / find Ms. Last 2%!

- Appoint a Marketing Director!- Keep the WOW! front and center!

Culture of Prototyping

“Effective prototyping may be the most valuable core

competence an innovative organization can hope to

have.”

Michael Schrage

“I view models and prototypes as the

battleground for thoughts and behaviors.”

Michael Schrage

Think about It!?

Innovation = Reaction to the Prototype

Michael Schrage

T.T.D./ Prototyper’s LawsDefine a small, practical test of something on a

page or less of text. Now.

Gather “found” materials … on the [very] cheap.

Find a/one partner-“customer” who’ll provide a test site.

Set a very tight deadline of about 5 days for the next concrete step.

Conduct the test! Debrief A.S.A.P.

Set the next test date. Now. [No more than 5 days hence.]

Notes Page

• The idea is to establish a “rhythm of prototyping” that defines every project.

T.T.D./ Secret No. 1: Forget “selling up”! Go horizontal: Find a (one!) “line” ally in “the Boonies”!

Secret No. 2: “Powerless” allies are Cool!Secret No. 3: Become a Prototyping

Maniac! Secret No. 4: Embrace Politics /

“Community Organizing”! Secret No. 5: Passion Rules! Get your

story in shape!

Notes Page

• Main Idea: YOU ARE NOT “POWERLESS.” Seek out allies in strange places … and get going! DO NOT WASTE TIME “SELLING UP.”

• Attitude: You are the Gandhi/King of your “mission.”

• So: IDENTIFY THE FOLKS YOU WANT TO PLAY WITH RE THAT INCREDIBLY COOL IDEA YOU HAVE!

Pause …

Implementation 101

“It was much later that I realized Dad’s secret. He gained respect by giving it. He talked and listened to the fourth-

grade kids in Spring Valley who shined shoes the same way he talked and listened to a bishop or a college

president. He was seriously interested in who you were and what you had to

say.”

Sara Lawrence-Lightfoot, Respect

Paradox No. 1, Circa 2000

TRUST*

*Now … more than ever!

Mark McCormack: 5,000 miles for a 5

min. meeting.

ESP to TJP: DON’T FORGET YOUR

THANK YOU NOTES!

IV. Exit!

“Sell out!” / Embrace “The Suits”!Recruit a passionate Ms./Mr.

Follow-up!Seed your freaks into the

mainstream!Celebrate!

Exit!

SOOOO … HOW MANY OF YOUR COLLEAGUES ARE

“BACK HOME” AT WORK ON NO-BALONEY …

WOW* PROJECTS!

* WOW = Will be remembered fondly/

bragged about 5+ years from now

Epitaph from Hell …

Joe T. Jones

1942 - 2000

HE WOULDA DONE SOME

REALLY COOL STUFF

BUT …

HIS BOSS WOULDN’T LET HIM!

T.T.D.: Now!– List all projects– Carefully describe a “WOW Outcome” for you

and the Client– Score (!) all projects on WOW, Beauty, Impact,

Raving Fan-hood– Pick one project with a high combined score– Draft a one-page New Description that

emphasizes WOW, Beauty, etc.– Circulate and edit … for three days – Reduce to 5 bullet points

Notes Page

•DO IT! •NOW!

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

Characteristics of the “Also Rans”

“minimize risk” “respect the chain of command” “support the boss” “make budget”

Source: Fortune on “most admired global corporations” (10/26/98)

[We are not trying to “WOW you up.”

We think you are/have WOW.

We are trying to give you permission to be WOW.]



Extinct!

Brand Inside

PSF 3: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

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 …

“You are the storyteller of your own life, and you

can create your own legend or not.”

Isabel Allende

Ike’s World Book Page

And Yours?

T.T.D./Assignment

Construct a 1/8-page or 1/4-page ad for

Brand You … for the Yellow Pages

Notes Page

•THIS IS A BIG DEAL. TAKE IT SERIOUSLY. [“Yellow Pages ads” are the centerpiece of our formal Brand You training programs.]

T.T.D./R.I.P.

Use by yourself.Use with your mates.

Use [quantitatively?] as a measure of departmental/

P.S.F. renewal.

Use in formal eval process.

Notes Page

• The whole idea is to make “R.I.P.s” a/the centerpiece – formally – of measuring unit “freshness.” E.g.: SCORE EVERYONE’S “R.I.P.” ON ITS BOLDNESS/WOW.

They “Get it”?!– stone mason– electrician– plumber– tiler– cabinet maker– contractor– blacksmith– well driller– blaster– sheep shearer– etc.

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.

R.I.P.10 … Major job change [new area of

concentration]; major offsite educational investment; extensive

sabbatical [oddball learning experience of > 2 months];

exceptional community project [presidency of fundraising drive, run

for school board].

R.I.P.

5 ... Extensive course work in oddball area of passionate interest; major off-

the-job activity [community involvement, learn to play the cello,

study Chinese].

1 … Company training, as directed.

T.T.D./Your R.I.P.

IS IT … FORMAL? IS IT ... WOW!?

Notes Page

• We think “R.I.P.s” are imperative! So … please take these two questions seriously and literally!

Women and new-economy

management …

Net N.E. Result …

Say goodbye to “command and control.”

Say goodbye to hierarchy.

Say 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



Extinct!

Bill Parcels’ World/ Brand You World!

BLAME NOBODY!EXPECT NOTHING!DO SOMETHING!

NY Post (9/99)

When you love what you do, you’re alive.

jobs.com

Brand Inside

PSF 4:Brand Talent!

Issue Y2K

The Great War for Talent!

There is no “talent shortage” …

if …

you are a GPTW*

*Great Place To Work

Alan Kay on PARC’s Bob Taylor

“He was a connoisseur of

talent.”

A Connoisseur of Talent …

– Spends time on Talent!– Becomes a student of Talent! – Puts Talent “on the agenda”!– Practices D.I.Y.– Uses Plain English! (If you want “sunny” …

ask for “sunny”!)– Creates Workspaces that foster energy,

entrepreneurship and creativity!– Recruits from oddball places!/

Recruits Oddballs!

Axiom: Never hire anyone without an aberration in their

background. (Find the One Ton Cookie Man!)

A Connoisseur of Talent …– Recruits M.I. (Gardner: Logical-mathematical,

linguistic, artistic, musical, bodily-kinesthetic, intrapersonal-self, interpersonal-others)

– Recruits arts!– Becomes de facto C.D.O. (Chief Diversity Officer)– Turns the pay scale upside down!/ Pays Talent!– Rewards & Promotes all on Talent

Development Skills!– Spouts the Gospel of Renewal! (R.D.A./ R.I.P.)

The NAESP …

Attributes of Those Who “Made” the 10th Grade History Book

– Committed!

– Determined to make a difference!

– Focused!

– Passionate!

– Irrational about their life’s project!

– Ahead of their time / Paradigm busters!

– Impatient! / Action Obsessed

Attributes of Those Who “Made” the 10th Grade

History Book –Made lots of people mad!

–Flouted the chain of command!

–Creative / Quirky / Peculiar! / Rebels! / Irreverent!

–Masters of improv / Thrive on chaos / Exploit chaos!

Attributes of Those Who “Made” the 10th Grade History Book

–Forgiveness > Permission

–Bone honest!

–Flawed as the dickens!

– “In touch” with their followers’ aspirations

–Damn good at what they do!

“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

Just Say “No” to “Grout”!

Participant: “Don’t you need ‘grout’ between the tiles?”

TP: “No!” [med staff, NFL Special Teams,waiters,

PFCs, cymbals player, bit parts, waiters]

TP’s Ideal Job:

Head of Housekeeping!

“Conformity is the enemy of freedom

and the jailer of growth.”

J.F.K.

Yes!

Director of Bringing in the Really Cool People

All You Need to Know?

Chief Evangelist For Really Neat Stuff

Director Of Bringing In The Really Cool People

T.T.D.

STEAL THESE TWO JOB TITLES!

Talent = Brand

Brand Outside=

Brand Inside



Extinct!

Brand Outside

Context:

No “Commodities”!

In the Beginning …

“The audit has become a commodity.”

Big 5 audit partner to TP

Quality Not Enough!

“Quality as defined by few defects is becoming the price of entry for automotive marketers rather than

a competitive advantage.”

J.D. Power

Quality Not Enough!

“While everything may be better, it is also increasingly

the same.”

Paul Goldberger on retail, “The Sameness of Things,” The New York Times

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”

Pretzel Crumb-less-ness Plus …

“The Ritz Carlton Experience enlivens the senses, instills

well-being and fulfills even the unexpressed wishes and needs of

the guest.”

from the Ritz Carlton Credo

“You do not merely want to be the best of the best. You

want to be considered the only ones who do

what you do.”

Jerry Garcia

Nirvana!

- Nordstrom- Four Seasons

- Adirondack Guide Boat- OXO

- Ziplocs

Why?

Cool!/Surprising!Reliable!

Friendly!/Comfortable!Aesthetically pleasing!

Consider …

What words and emotions do you use to

describe the things you love?

Context: “No” to “inevitable commoditization”

S1: Lead the Customer!S2: Master E-Commerce!

S3: Think Global!S4: Women Rule! (and the elderly)

S5: Design Rules! (too)

S6: It’s the Experience!Net: Glorious Age of the BRAND!

Brand Outside

Strategy 1:

Lead the Customer!

“The customer is a rear view mirror, not a guide to the future.”

George Colony, Forrester Research

“If you worship at the throne of the voice of the customer, you’ll get only

incremental advances.”Joseph Morone, President, Bentley College

Early Customer Rejection

Post-Its [12 years!]Chrysler Minivans

VCRsFax machines

FedExCNN

Heart-assist pumpsEtc.

Source: Fortune

Good = Bad/ 1 of 30,000

“We are crazy. We should do something when people say it is

‘crazy.’ If people say something is ‘good’, it

means someone else is already doing it.”

Hajime Mitarai, Canon

“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

Benchmarking, Perils of …

“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

“Lead” customers!

K2K redux!

Amen!

“The Age of the Never Satisfied

Customer”Regis McKenna


S1: Lead the Customer!

S2: Master E-Commerce!S3: Think Global!

S4: Women Rule! (and the elderly)



Brand Outside

Strategy 2:

Use E-Commerce

to Re-invent the Business!

“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

Tomorrow Today: Cisco!

70%Save $500M (service and tech

support)

C.Sat e >> C.Sat HCustomer Engineer

Chat Rooms($1B?)

The Motley Fool Secret?

“Strangers helping strangers”“Fools’ Logic,” IW

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!

Community …

Somewhat mediated, segmented chat rooms (must be “managed”/ seeded)User-friendly technical/ professional info

Industry “intelligence”Some very timely stuff/ attractors

Hotlinks by the gazillion (to professional and unrelated stuff)

Expert/ advisor opinions (info, chats, etc.)Opportunity for users to build

own Web page

B2B

1999 – 2004: 50X

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

T

GM/Ford/DaimlerChrysler (02-27)

Auto parts supply “Co.”$240B (+$500B)

I.P.O.

W.W. Grainger*

2X phone/fax

*$220B “MRO” market (per Business 2.0/02-00)

Goal?

Drive profits to zero!*

*Remember AMR and “dynamic pricing.”

[Jack on the Web’s “Naked Truth”

“You desperately want to have enough technology in your

product offering, so that you don’t end up being in a commodity

situation.”]

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

Shop in your Underwear

Source: SM’d logo for www.ae.comae = American Eagle Outfitters

Psych 101: Strongest Force on Earth?

My need to be in perceived control of

my universe!

Anne Busquet/ American Express

Not: “Age of the Internet”

Is: “Age of Customer Control”

T.T.D.: Message!

THE CUSTOMER IS IN CONTROL!

Notes Page

• Do you Joyfully “allow” the Customer to lead you around by the nose? Is this truly his/her site? Her/his “home”?

“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

Red Herring (01/00)

75% of online shoppers don’t complete their

purchase!

T.T.D.: Message!

SIMPLICITY!

Notes Page

• READ JAKOB NIELSEN’S BOOK! Hold your site to the Exacting Nielsen Standard! [Be ruthless … on yourself.]

“Where does the Internet rank in priority?

It’s No. 1, 2, 3, and 4.” Jack Welch

There are 2 Kinds of …

Defense*

vs.

Offense**

*Fend off upstarts.**Reinvent our marketspace!

T.T.D.

Most important Y2K question: Are you &

yours “dealing with” the Web … or “embracing it”

as “central to our being”?

Notes Page

• SPEND A LOT OF TIME ON THIS

“TTD”!

Web Strategy: GE Power Systems

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

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]

“PSF 5”: We Got One Right!

A BIAS FOR ACTION = No. 1

Web Strategy: GE Power Systems

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

S.A.V.

Ready.Fire!Aim.

Ross Perot, Wayne Calloway, Harry Quadracci, et al.

Fail. Forward.

Fast.

High-tech exec

Net World!

Act now. Analyze later.

Avram Miller

“R & D”

Intel’s venture fund: 275 investments, $3.5B

Source: Fast Company (12-99)

[TP to Chain Owner …

“Do 5 deals before you go home!”]

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

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

Culture of Prototyping

“Effective prototyping may be the most valuable core

competence an innovative organization can hope to

have.”

Michael Schrage

“I view models and prototypes as the

battleground for thoughts and behaviors.”

Michael Schrage

“You can’t be a serious innovator unless and until you are ready,

willing and able to seriously play. ‘Serious play’ is not an oxymoron;

it is the essence of innovation.”

Michael Schrage, Serious Play

ABfA [A Bias for Action]

RFA [Ready.Fire!Aim.]

SAV [Screw Around Vigorously]

FFF [Fail Forward Fast]

OODA [Observe.Orient.Decide.Act.]

The Gales of Creative Destruction

+29M = -44M + 73M

+4M = +4M - 0M

C.E.O. to

C.D.O.

“Steve Ross had a wonderful philosophy: People get fired for

not making mistakes.”Bob Pittman

Brand Outside

Strategy 4:

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!

Most Under-reported story!

9M*/28M(1 of 4)/$3.6T [> Germany]

* 400K in ’72; 132% since ’92

Sources: NFWBO, Cognetics, Business Wire (030600)

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)

New golfers … 37%Basketball … 13.5M

1 in 27 (’70) … 1 in 3 (’96)

1874 … Jock Strap1977 … Jogbra

1977 ... 25K

1996 … 42M

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

E.g.: Quicken.com: gender-neutralTheStreet.com: male-ish (“aggressive,

we-tell-you-what-to-think”)MotleyFool.com: female-ish

(“inquisitive, open, supportive”)WFN and MsMoney.com: female (e.g.:

emphasize parenting and divorce issues)

Source: Red Herring, Kathleen Morris of WFN

Marketing to Women: Help Them Save Time!

80% … work86% … cook

58% … run errands with kids38% … take child to school

21% … go to the gym21% … take outside classes

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

[ It’s Simple …

Women are more thoughtful and more deliberate

than men!]

Q: Why do guys like pagers?

A1: Sense of importance [Pager Dude]

A2: Cubicle Slaves’ replacement for “real guys” tool belts

Q: Why do women like pagers?

A: Get the news A.S.A.P. if her child is in the Nurse’s Office

Q:Why do women hate pagers?

A: They find nothing romantic about wearing a Stetson wrench or Stanley hammer attached to their waist! [Note

the pager’s clip-on device … guys ]

Not!!

“Year of the Woman”

Enterprise Reinvention!

RecruitingHiring/Rewarding/ Promoting

Structure Processes

MeasurementStrategyCulture Vision

Leadership

THE BRAND ITSELF!

“What kind of car does Mommy want?”

“I didn’t know [company] were giving

company cars to secretaries.”

Source: UK financial services CEO, 12/99

March 2000, re Women’s Influence on Home Purchases …

“But then she comes back to papa for

permission, right?”

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!”

e-Response [esponce?] to ACE Presentation [04.07.00] …

“… contract home builders! When is this industry going to wake up and realize that women not only

decide which house to buy, but also buy and pay for the

house ourselves?”B.Bosch/Toronto

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

Wanna see my “porn”

collection?

T.T.D.

DO YOU UNDERSTAND [“GET”]

THE ENORMITY OF THIS OPPORTUNITY?

Notes Page

•Discuss … AT LENGTH!

“If we are single, they say we couldn’t catch a man. If we are

married, they say we are neglecting him. If we are divorced,

they say we couldn’t keep him. If we are widowed, they say we

killed him.”

Kathleen Brown, on the joys of female political candidacy

Speaking of Enormous

[Missed] [Huge] Opportunities ...

74/55

“At each stage of their lives, the needs and desires of the baby

boomers have become the dominant concerns of American business and popular culture. If you can anticipate

the movement of the baby-boom generation’s life-span migration, you

can see the future.”Ken Dychtwald, Age Wave

Aging/“Elderly”

2X growth rate$$$$$$$$$$$$

“I’m in charge!”

Good source: Ken Dychtwald, Age Wave

Priorities: Aging/“Elderly”

Experiences … Convenience … Comfort

… Access … Respect!

Brand Outside

Strategy 5:

Design Rules!

And Tomorrow …

“Fifteen years ago companies competed on price. Now It’s

quality. Tomorrow it’s design.”Robert Hayes

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

“Design is treated like a religion at BMW.”

Fortune (10/98)

Drop-dead Charm!

“The new Beetle fails at most categories. The only

thing it doesn’t fail in is drop-dead charm.”

Jerry Hirshberg, Nissan Design International

Object of Desire!

“Every now and then, a design comes along that radically changes the way we think about a particular object. Case in

point: the iMac. Suddenly, a computer is no longer an anonymous box. It is a

sculpture, an object of desire, something that you look at.”

Katherine McCoy, Michael McCoy, Illinois Institute of Technology

Design as Soul

“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

Check Out the Language:

“Tomorrow it’s design …”“Design is the only thing …”

“Design is … religion ...”“Drop-dead charm …”“Object of desire …”

“Fundamental soul …”

T.T.D.

Where do you stand on design? [1 = Who, me? 10 = Preoccupation.]

Where do you stand on design-as-soul ?

Notes Page

• I’m at a bit of a loss here. I DON’T KNOW HOW TO “MAKE YOU” “GET” THIS. I think it is of the Utmost Importance. I want you – at least – to become “aware” of the Power of Great Design. And … I do [fervently] believe that Great-Design-Is-Soul.

Think Back …

New Beetle, iMac = Radical, “Bet the

Company”

Right?

The I.D. [International Design] Forty*

Airstream … Alfred A. Knopf … Apple Computer … Amazon.com …

Bloomberg … Caterpillar … CNN … Disney … FedEx … Gillette … IBM … Martha Stewart … New Balance …

Nickelodeon … Patagonia … The New York Yankees … 3M … Etc.

* List No. 1, 1999

Unconventional [Design] Messages

Not about ... “Lumpy Objects”!

Not about ... $79,000 objects

One-sixth Second per Item!

“During the 30 minutes you spend on an average trip to the supermarket,

about 30,000 products vie to win your attention and ultimately to make you

believe in their promise.”

Thomas Hine, The Total Package

“Car designers need to create a story. Every car provides an

opportunity to create an adventure. …“The Prowler makes you smile. Why? Because it’s focused. It has a plot, a

reason for being, a passion.”

Freeman Thomas, co-designer VW Beetle; designer Audi TT

Hmmmm(?): “Only” Words …

StoryAdventure

Smile FocusPlot

Passion

T.T.D./Message:Services are Not Intangible!

You “give off” hundreds of design cues … daily!

YOU ARE A DESIGNER!

Notes Page

• List 100 [!] “design cues” that you give off! [Okay, start with 25.]

Graceful language!

T.T.D./“Beauty Contest!”

1. Pick one form/ document: invoice, airbill, sick leave policy, returns claim

form.2. Rate it on a 1 to 10 scale

(1 = Awful; 10 = Scintillating) on three dimensions: Beauty, Grace, Clarity.

3. Repeat … every 15 days.

Notes Page

• DO THIS! USE MY TERMS! [Beauty … Grace … Clarity.] Be quantitative. [PLEASE.]

Design =

SIMPLICITY … HONESTY … ACCESSIBILITY …

ENJOYMENTJonathan Ive (iMac)

Design =

“There are three basic principles behind any well-

designed product: truth, humanity, and

simplicity.”Sohrab Vossoughi,

Ziba Design

Words (Again!)

Drop-dead Charm … Object of Desire … Truth … Humanity … Simplicity … Focus … Honesty … Accessibility … Enjoyment

… Story … Adventure … Plot … Passion

Brand Outside

Strategy 6:

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

Think …

Supply Chain-ingB2B-ing

“What’s the plot?”

Freeman Thomas, designer

T.T.D.

WHAT’S THE [your] PLOT?

Notes Page

• WHAT IS YOUR STORY? [Be specific!] Message: This applies to every [Finance] project!

“This is the end of the pure product era. For instance, car

makers are beginning to understand that the car is a

platform for delivering services that drive the customer

experience.”Carly Fiorina, HP @ Comdex ’99

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

“Medicine looks likely to change more in the next 20 years than it has in

the last 200.”

British Medical Journal (11-11-99)

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

Are You Fighting Yesterday’s War?Docs don’t know it all.

There are a lotta bad docs. There are a lotta bad medical decisions.

“Hospitals” kill far too many people. (Bad decisions, bad execution.)

Systemic waste is stratospheric. (Still.)

Patients are getting (much) smarter.Patients have had it with HMOs. (And Docs with the

“white-coat syndrome.”) You are not smarter than I am. (I am your partner.)

You are not busier than I am. (!!!!!)Patients want more data. (And can readily get it.)

Boomers will control their lives. Period. Medicine is about to be overwhelmed with a tsunami!

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

AMA: Push “Patient

Partnership” Model????

Brand Outside

BRAND POWER!

Brand It! Now, More Than Ever!

“The increasing difficulty in differentiating between products and

the speed with which competitors take

up innovations will assist in the rise and rise of the brand.”

Gillian Law and Nick Grant, Management [New Zealand]

No Room for Brands?

NikeSaturnCNN

America OnlineCharles Schwab

StarbucksThe Gap

IntelEtc.

Brand = Trust!

“Most buyers do not have a clue whether anybody else makes a better microprocessor, but ‘Intel Inside’ has become a ‘trust mark’ - a trademark that consumers put their faith in.”

The Economist

T.T.D.

HAVE YOU GENUINELY EXAMINED THE ENORMITY

OF “BRAND POWER”?

ARE YOU A NO-BALONEY STUDENT OF BRANDING?

Notes Page

•As usual: STUDENT-HOOD MATTERS!

What Can [Can’t] Be Branded?“Branding is not a problem if you have the right mentality. You go to your team and

you pin up a $200 Swiss Army Watch. Competing in the ridiculously crowded

sub-$200 watch market, they made it into a brand name, named after the most

irrelevant and useless thing in history [the Swiss Army]. And you say, ‘Gang, if they

can do it, we can do it.’ ”

Barry Gibbons

“Salt is salt is salt. Right? Not when it

comes in a blue box with a picture of a little girl carrying an umbrella. Morton International continues to dominate the U.S. salt market even though it charges more for a product that is demonstrably

the same as many other products on the shelf.”

Tom Asaker, Humanfactor Marketing

“Consumers don’t simply buy products, they buy attitudes as well. When confronted with proliferation and

diversity, choices become increasingly informed by belief. [Consumers] want to

know who is behind the products that they buy. They want to know the

company. They want to know what you think.”

Jesper Kunde, Corporate Religion

“Corporate Religion is a completely new way of thinking about companies. Today, the product is still the main communication

highway in the company. When companies make the shift to selling solutions, brands and attitudes … communicating the company’s

attitudes and values becomes the decisive parameter for success. It

demands that you find out who you are as a company.”

Jesper Kunde, Corporate Religion

[Does Phil Knight have a brain?]

T.T.D./“Brand Management”/

Calling the Corporate Shrink!

“Organizational Psychotherapy”/

WHO WE ARE!

Notes Page

• This is The Big Enchilada:

SPEND – lotsa – TIME ON IT!

Scott Bedbury/ Nike, Starbucks

“A Great Brand taps into emotions. Emotions drive most, if not all, of our decisions. A brand reaches out with a powerful connecting experience. It’s an

emotional connecting point that transcends the product.

“A Great Brand is a story that’s never completely told. A brand is a metaphorical story that

connects with something very deep - a fundamental appreciation of mythology. Stories

create the emotional context people need to locate themselves in a larger experience.”

Brand = You Must Care!

“Success means never letting the competition define you. Instead you have to define

yourself based on a point of view you care deeply about.”

Tom Chappell, Tom’s of Maine

“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

The stock must have a great story!

The company must have a product that changes the

way the world works!

Source: Technology Investor 05.00

“In the funky village, real competition no longer revolves

around marketshare. We are competing for attention –

mindshare and heartshare.”Kjell Nordstrom and Jonas Ridderstrale,

Funky Business

Rules of “Radical Marketing”

Love + Respect Your Customers!Hire only Passionate Missionaries!Create a Community of Customers!

Celebrate Craziness!Be insanely True to the Brand!

Sam Hill & Glenn Rifkin, Radical Marketing (e.g., Harley, Virgin, The Dead, HBS, NBA)

Brand Leadership

Passion Rules!

Brand Leadership!

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

communication of a story.”

Howard Gardner Leading Minds: An Anatomy of Leadership

“Leadership is a performance. You have to be

conscious of your behavior, because everybody else is.”

Carly Fiorina

Brand Leadership:ENTHUSIASM RULES!

“I am a dispenser of enthusiasm.”/ Ben

Zander

[Message to NAPM: You are Re-invention Evangelists!]

Ann Richards’ Dogma

Show up!

Know your message!

PUT YOURSELF AT RISK EVERY DAY!

“I’d rather regret the things I have done than the things I have not.”

Lucille Ball

“If things seem under control, you’re just

not going fast enough.”

Mario Andretti

tom peters’ lessons in leadership tampa 5 may 2000

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