The PSF++ Solution* Tom Peters/19 February 2015 *PSF/Professional Service Firm

1. The PSF++ Solution* Tom Peters/19 February 2015 *PSF/Professional Service Firm

2. THE WORK MATTERSThe Professional Service Firm50: Fifty Ways to Transform Your “Department” into a Professional Service Firm Whose Trademarks are Passion and Innovation! The Project50: Fifty Ways to Transform Every “Task” into a Project That Matters! The Brand You50: Fifty Ways to Transform Yourself from an “Employee” into a Brand That Shouts Distinction, Commitment, and Passion!

3. After a recent presentation at the Auckland Business School, I was asked a pointed question—and flubbed the answer. I was asked if my emphasis on “people-development-first” amounted to keeping unnecessary workers on the payroll. I said of course not—and stopped there. Whoops! That stopping point (no “make work”) has in fact been my starting point since 1999, when I published a 3-book series we called “The Work Matters”:The Professional Service Firm50: Fifty Ways to Transform Your “Department” into a Professional Service Firm Whose Trademarks are Passion and Innovation! The Project50: Fifty Ways to Transform Every “Task” into a Project That Matters! The Brand You50: Fifty Ways to Transform Yourself from an “Employee” into a Brand That Shouts Distinction, Commitment, and Passion!At about the same time (actually Y2K), I had outrageously written in a Time magazine cover story, “I believe that ninety percent of white-collar jobs in the U.S. will be either destroyed or altered beyond recognition in the next 10 to 15 years.”That doesn’t look so outrageous today. E.g., consider this headline from the 11 NOV 2014 Telegraph (UK), “Ten Million Jobs at Risk from Advancing Technology: Up to 35% of Britain’s jobs will be eliminated by new computing and robotics technology over the next 20 years, say experts from Deloitte and Oxford University.”So the idea, then, in an oversimplified nutshell, is to avoid professional and organizational extinction—and in fact pursue growth—by vaulting up the value added chain. Become a remarkable “brand you” performing 100% value-added “wow projects” in an organizational unit transformed into an innovative “professional service firm”—e.g., devoted to applying intellectual capital to the organization’s products and services. (The overall “home” organization, per my model, seeks differentiation by becoming a “collection of integrated professional service firms.”) As you will see below, many are on this road. Consider this, for example, from a recent Economist story: “Rolls-Royce now earns more from tasks such as managing clients’ overall procurement strategies and maintaining aerospace engines it sells than it does from making them.”There is more than one path to salvation in the face of exponential technology change—but whatever the path, it will require in some form or other adding new “soft services” value—and transforming oneself into a distinguishable (specialist/growth-obsessed/brand you) professional.Or so I believe. (Wish I’d said all that in the first place.)

4. Destruction

5. “The root of our problem is not that we’re in a Great Recession or a Great Stagnation, but rather that we are in the early throes of a Great Restructuring. Our technologies are racing ahead, but our skills and organizations are lagging behind.” Source: Race AGAINST the Machine, Erik Brynjolfsson and Andrew McAfee

6. “Ten Million Jobs at Risk from Advancing Technology: Up to 35 percent of Britain's jobs will be eliminated by new computing and robotics technology over the next 20 years, say experts[Deloitte/Oxford University].”—Headline,Telegraph (UK), 11 November2014

7. “I believe that ninety percent of white-collar jobs in the U.S. will be either destroyed or altered beyond recognition in the next 10 to 15 years.” —Tom Peters(22 May 2000/cover/Time magazine)

8. Jobs—including high-pay white collar jobs—are evaporating; and the evaporation rate will only accelerate in the years ahead.

9. -1/+1/2

10. S&P 500 +1/-1* *Every …2weeks! Source: Richard Foster (via Rita McGrath/HBR/12.26.13

11. “Mr. Foster and his McKinsey colleagues collected detailed performance data stretching back 40 years for 1,000 U.S. companies.They found thatNONEofthe long-term survivors managed to outperform the market. Worse, the longer companies had been in the database, the worse they did.” —Financial Times

12. Big companies have never had, on average, sustaining success. This, too, is an accelerating phenomenon. And, anything like “normal employment growth” is, as “they” say, history.

13. The Magnificent Monsters of Motueka (et al.)

14. The Future Is Small: Why AIM Will Be the World’s Best Market Beyond the Credit Boom—Gervais Williams, superstar fund manager (FT /1217.14: “Research shows that new and small companies create almost all the new private sector jobs and are disproportionately innovative.”)

15. THE RED CARPET STORE (Joel Resnick/Flemington NJ)

16. Emmys? Oscars? Name the big awards ceremony—and these guys did the red carpets—they “own” the market. As do the next two—dry basements, giant sea anchors for the U.S. Navy and its ilk.I LOVE THESE GUYS!

17. “BE THE BEST. IT’S THE ONLY MARKET THAT’S NOT CROWDED.” From: Retail Superstars: Inside the 25 Best Independent Stores in America, George Whalin

18. *Basement Systems Inc. (Larry Janesky/Seymour CT)*Dry Basement Science (100,000++ copies!)*1990: $0; 2003: $13M; 2010: $80,000,000

19. The Magicians of Motueka (PLUS)! W.A. Coppins Ltd.* (Coppins Sea Anchors/ PSA/para sea anchors) *Textiles, 1898; thrive on “wicked problems” —e.g., U.S. Navy STLVAST (Small To Large Vehicle At Sea Transfer); custom fabric from W. Wiggins Ltd./Wellington (specialty nylon, “Dyneema,” from DSM/Netherlands)

20. MITTELSTAND* *“agile creatures darting between the legs of the multinational monsters”(Bloomberg BusinessWeek)

21. German economic success comes courtesy its mid-sized “niche owners”—the Mittelstand.

22. I love …Middle-sized Niche- Micro-niche Dominators! “Own” a niche through EXCELLENCE! (Writ large: Germany’s MITTELSTAND)

23. Specialized, agile providers of high value added services and products are more and more becoming an economy’s economic engine. The big guys need to understand this—as do you and I.

24. The (ENORMOUS) “Services Added” Opportunity

25. “You are headed for commodity hell if you don’t have services.”)

26. How do you hold onto jobs—or increase them in the face of these staggering forces of contraction? How do you survive—or thrive—in general? One way, perhaps the best way, is to pursue a “services added” growth strategy—which happens to also be (more or less) “people intensive.”

27. “Rolls-Royce now earns morefrom tasks such as managing clients’ overall procurement strategies and maintaining aerospace engines it sells than it does from making them.” —Economist

28. Engines—to engine and aircraft services.Or, perhaps, aircraft services and, uh, engines too? (FYI: In my view, this, especially writ large, is pretty damned extraordinary!)

29. IBMtoIBM

30. Rolls. And IBM: Machines (“M”) to business systems (“B”). And a $50 billion++ services business is born—perhaps the biggest “PSF” (Professional Service Firm) in history.Definitely the driver of future growth.

31. $55B**IBM Global Services/“Systems integrator of choice”

32. Planetary Rainmaker-in-Chief!“[Former] CEO Sam Palmisano’s strategy is to expand tech’s borders by pushing users—and entire industries—towardradically differentbusinessmodels.The payoff for IBM would be access to an ocean of revenue—Palmisano estimates it at$500billiona year—that technology companies have never been able to touch.”—Fortune

33. “Customer Satisfaction” to “Customer Success”:“We’re getting better at [Six Sigma quality improvement] 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, then chief of GE Power Systems

34. Huge:“Customer Satisfaction with product/Service” to “CUSTOMER SUCCESS”

35. UPStoUPS

36. Growth driver flips: From packages (“P”) to integrated logistics/supply chain services (“S”) including physical delivery.

37. “UPS used to be a trucking company with technology.Now it’s a technology company with trucks.”—Forbes

38. “Big Brown’s New Bag: UPS Aims to Be the Traffic Manager for Corporate America”—Headline/BW“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 “It’s all about solutions. We work with customers on creating and running better, stronger, cheaper supply chains.”—Bob Stoffel, UPS senior exec

39. “THE GIANT STALKING BIG OIL: How SchlumbergerIs Rewriting the Rules of the Energy Game.”:“IPM [Integrated Project Management] strays from [Schlumberger’s] traditional role as a service provider and moves deeper into areas once dominated by the majors.” Source: BusinessWeek cover story, January 2008

40. IPM’s Chief:“We’ll do just about anything an oilfield owner would want, from drilling to production.”

41. Medtronic: An oceanic shift from sophisticated medical devices (which are to some extent becoming commoditized) to taking advantage of in-hospital relationships to make incursions into the hospital services management business.

42. I. LAN Installation Co. (3% local market share)II. Geek Squad. (30% local market share with name change.)III. Acquired by Best Buy.IV. FLAGSHIP OF BEST BUY WHOLESALE “SOLUTIONS” STRATEGY MAKEOVER.

43. A small local service provider becomes the engine of an enormous company.

44. IDEO’s ProgressionProduct Design to Product Design Training to Corporate Innovation/ Culture Training/Consulting

45. A peerless professional service firm does not sit on its box of design awards—it dramatically expands its service offerings. The “new stuff” is now the dog that wags the tail.

46. Era #1/Obvious Value: “Our ‘it’ works, is delivered on time” (“Close”)Era #2/Augmented Value: “How our ‘it’ can add value—a ‘useful it’ ” (“Solve”)Era #3/Complex Value Networks: “How our ‘system’ can change you and deliver ‘BUSINESS ADVANTAGE’” (“Culture-Strategic change”)Source: Jeff Thull, The Prime Solution: Close the Value Gap, Increase Margins, and Win the Complex Sale

47. “The business of selling is not just about matching viable solutions to the customers that require them.It’s equally about managing the change process the customer will need to go through to implement the solution and achieve the value promised by the solution.One of the key differentiators of our position in the market is our attention to managing change and making change stick in our customer’s organization.”—Jeff Thull, The Prime Solution: Close the Value Gap, Increase Margins, and Win the Complex Sale

48. Nobody said it was easy!

49. Universal Value Added: The PSF Solution(or bust)

50. Yes, I pretty much believe “PSF” …“OR BUST.”