Tom Peters’

Re-imagine!

Business Excellence in a Disruptive Age

Learning Annex/Toronto/19November 2003

“Behind Surging Productivity: The Service

Sector Delivers. Firms Once Thought Immune to

Boosting Worker Output Are Now Big Part of the Trend” —

Headline/WSJ/11.03

“As Economy Gains,

Outsourcing Surges” —Headline/Boston Globe/11.03

“14 MILLION service jobs are in

danger of being shipped overseas” —

The Dobbs Report/USN&WR/11.03/re new UCB

study

“Know we know what all that fiber-optic cable is

good for: BROADBAND’S KILLER APP, IT TURNS

OUT, IS INDIA” —Fortune/11.24.03

“WHERE IS YOUR JOB GOING”: writing software, designing chips,

reading MRIs, processing mortgages, preparing tax returns, managing

computer networks (etc: GE Capital’s 15,000 in Delhi), preparing PP slides

for McKinsey (350 in Chennai), equity analysis of U.S. companies (Morgan

Stanley) …Source: Fortune/11.24.03

“WHAT ARE PEOPLE GOING TO DO WITH

THEMSELVES?” —Headline/

Fortune/ 11.03 (“We should finally admit that we do not and cannot know, and regard that fact with serenity

rather than anxiety.”)

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

S.A.V.

“Reward excellent

failures. Punish mediocre

successes.”Phil Daniels, Sydney exec

Re-imagine!

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

No Wiggle Room!

“Incrementalism is innovation’s worst enemy.”

Nicholas Negroponte

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

“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

“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.

“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

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

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!

Steel: 75,000,000 tons in ’82 to 102,000,000 tons in

’02. 289, 000 steelworkers in ’82 to 74,000

steelworkers in ’02.

Source: Fortune/11.24.03

E.g. …

Jeff Immelt: 75% of “admin, back room, finance” “digitalized” in

3 years.

Source: BW (01.28.02)

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

First Step: E-V-E-R-Y TASK MUST BE CONVERTED INTO A “BRAGGABLE.”

(Success = Sense of Impermanence + Portfolio

of Braggables + Network Mastery.)

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).

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

“Experiences are as distinct from services as services are from

goods.”Joseph Pine & James Gilmore, The Experience Economy:

Work Is Theatre & Every Business a Stage

The “Experience Ladder”

Experiences Services

Goods Raw Materials

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

<TGWvs.

>TGR

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

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)

Westin’s …

Heavenly Bed

“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

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

“Most executives have no idea how to add value to a market in the metaphysical

world. But that is what the market will cry out for in the future. There is no lack of ‘physical’ products to

choose between.”

Jesper Kunde, Unique now ... or never [on the excellence of Nokia, Nike, Lego, Virgin et al.]

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%

$5+T > Japan

10M/28M/$3.6T > Germany

91% women: ADVERTISERS DON’T

UNDERSTAND US. (58% “ANNOYED.”)

Source: Greenfield Online for Arnold’s Women’s Insight Team (Martha Barletta, Marketing to Women)

Read This Book …

EVEolution: The Eight Truths of Marketing to Women

Faith Popcorn & Lys Marigold

“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.”

EVEolution: Truth No. 1

Connecting Your Female Consumers to Each

Other Connects Them to Your Brand

“The ‘Connection Proclivity’ in women starts early. When asked,

‘How was school today?’ a girl usually tells her mother every

detail of what happened, while a boy might grunt, ‘Fine.’ ”

EVEolution

“Women don’t buy

brands. They join them.”

EVEolution

2.6 vs. 21

Editorial/Men: Tables, rankings.*

Editorial/Women: Narratives that cohere.*

*Redwood (UK)

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.

Ad from Furniture /Today (04.01):“MEET WITH THE EXPERTS!: How

Retailing’s Most Successful Stay that Way”

Presenting Experts: M = 16;

F = ?? (94% = 272)

0

Re-imagine!

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

“ ‘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%)

Aging/“Elderly”

$$$$$$$$$$$$“I’m in charge!”

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 productive asset, nations

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

Stan Davis & Christopher Meyer, futureWEALTH

Model 25/8/53

Sports Franchise GM

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

Psssst! Wanna see my “porn” collection?

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

14 to 168*

*Leadership Positions/D&T/1992-2002/WIAR

Women Rule

Match market power

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

10M biz owners

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

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.

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.”

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!)

“Fail faster. Succeed sooner.”

David Kelley/IDEO

Fail. Forward. Fast. –High-tech Exec

“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

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

going fast enough.”

Mario Andretti