Tom Peters’ Re-Imagine! Business Excellence in a Disruptive Age ELA/San Diego/10.13.2003

1. Tom Peters’ Re-Imagine!Business Excellence in a Disruptive AgeELA/San Diego/10.13.2003

2. Slides at …tompeters.com

3. “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

4. 1. All Bets Are Off.

5. “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

6. “The corporation as we know it, which is now 120 years old, isnot likely to survive the next 25 years.Legally and financially, yes, but not structurally and economically.”Peter Drucker, Business 2.0

7. 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

8. “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

9. 2. The White Collar Revolution & the Death of Bureaucracy.

10. 108 X 5vs. 8 X 1= 540 vs. 8(-98.5%)

11. E.g. …Jeff Immelt: 75% of “admin, back room, finance” “digitalized” in 3 years.Source: BW (01.28.02)

12. “Organizations will still be critically important in the world, but as ‘organizers,’ not ‘employers’!”— Charles Handy

13. “Don’t own nothin’ if you can help it. If you can, rent your shoes.”F.G.

14. “P&G Hires Out Employee Services to IBM”—Burlington Free Press/09.10.03/on IBM’s 10-tear, $400M contract with P&G (P&G farmed out IT to HP in May, Facilities to Jones Lang LaSalle in June)

15. Ford: “Vehicle brand owner”(“design, engineer, and market, but not actually make”)Source: The Company, John Micklethwait & Adrian Woolridge

16. 3. IS/ IT/ Web … “On the Bus” or “Off the Bus.”

17. “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.

18. 100square feet

19. “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

20. “There’s no use trying,” said Alice. “One can’t believe impossible things.” “I daresay you haven’t had much practice,” said the Queen. “When I was your age, I always did it for half an hour a day. Why, sometimes I’ve believed as many as six impossible things before breakfast.”Lewis Carroll

21. I’net …… allows you to dream dreams you could never have dreamed before!

22. “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

23. “The mechanical speed of combat vehicles has not increased since Rommel’s day, so the difference is all in the operational speed, faster communications and faster decisions.”—Edward Luttwak, on the unprecedented pace of the move toward Baghdad

24. The New Infantry Battalion/New York Times/12.01.2002“Pentagon’s Urgent Search for Speed.” 270 soldiers (1/3rd normal complement); 140 robotic off-road armored trucks. “Every soldier is a sensor.” “Revolutionary capabilities.” Find-to-hit: 45 minutes to 15 minutes … in just one year.

25. Eric’s ArmyFlat.Fast.Agile.Adaptable.Light … But Lethal.Talent/ “I Am an Army of One.”Info-intense.Network-centric.

26. Boyd

27. “Fast Transients”“Buttonhook turn” (YF16: “could flick from one maneuver to another faster than any aircraft”)BOYD: The Fighter Pilot Who Changed the Art of War (Robert Coram)

28. 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)

29. “Maneuverists”BOYD: The Fighter Pilot Who Changed the Art of War (Robert Coram)

30. Case: CRM

31. “CRM has, almost universally, failed to live up to expectations.”Butler Group (UK)

32. No! No! No!FT: “The aim [of CRM] is to make customers feel as they did in the pre-electronic age when service was more personal.”

33. CGE&Y (Paul Cole): “Pleasant Transaction” vs.“Systemic Opportunity.”“Better job of what we do today” vs.“Re-think overall enterprise strategy.”

34. Here We Go Again: Except It’s Real This Time!Bank online: 24.3M (10.2002);2XY2000.Wells Fargo: 1/3rd; 3.3M;50% lower attrition rate; 50% higher growth in balances than off-line; more likely to cross-purchase; “happier and stay with the bank much longer.”Source: The Wall Street Journal/10.21.2002

35. 4. The Heart of the Value Added Revolution: The “Solutions Imperative.”

36. “Customers will try ‘low cost providers’ … because the Majors have not given them any clear reason not to.”Leading Insurance Industry Analyst

37. “The ‘surplus society’ has a surplus of similar companies, employing similarpeople, with similar educational backgrounds, coming up with similarideas, producing similar things, with similarprices and similarquality.”Kjell Nordström and Jonas Ridderstråle, Funky Business

38. “We make over three new product announcements a day. Can you remember them? Our customers can’t!”Carly Fiorina

39. 09.11.2000: HP bids $18,000,000,000for PricewaterhouseCoopersconsulting business!

40. “These days, building the best server isn’t enough. That’s the price of entry.”Ann Livermore, Hewlett-Packard

41. Gerstner’s IBM: Systems Integrator of choice. Global Services: $35B.Pledge/’99: Business Partner Charter. 72 strategic partners, aim for 200. Drop many in-house programs/products. (BW/12.01).

42. “We want to be the air traffic controllers of electrons.”Bob Nardelli, GE Power Systems

43. “Customer Satisfaction” to “Customer Success”“We’re getting better at [Six Sigma] every day. But we really need to think about the customer’s profitability. Are customers’ bottom lines really benefiting from what we provide them?”Bob Nardelli, GE Power Systems

44. Keep In Mind: Customer Satisfactionversus Customer Success

45. Nardelli’s goal ($50B to $100B by 2005): “… move Home Depot beyond selling ‘goods’ to selling ‘home services.’ … He wants to capture home improvement dollars wherever and however they are spent.”E.g.: “house calls” (At-Home Service: $10B by ’05?) … “pros shops” (Pro Set) … “home project management” (Project Management System … “a deeper selling relationship”).Source: USA Today/06.14.2002

46. “UPS wants to take over the sweet spot in the endless loop of goods, information and capital that all the packages [it moves] represent.”ecompany.com/06.01 (E.g., UPS Logistics manages the logistics of 4.5M Ford vehicles, from 21 mfg. sites to 6,000 NA dealers)

47. Omnicom: 57% (of $6B) from marketing services

48. 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

49. “FEES! FEES!FEES!”—Title/Cover Story/BusinessWeek/09.29.03

50. 5. A World of Scintillating “Experiences.”