Tom Peters’ Seminar2002 We Are In A Brawl With No Rules! GSK/Crete /04.17.2002

1. Tom Peters’ Seminar2002 We Are In A Brawl With No Rules!GSK/Crete/04.17.2002

2. All Slides Available at …tompeters.comNote: Lavender text in this file is a link.

3. CONTEXT

4. The Destruction Imperative I: A Pitiable Story

5. 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

6. “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

7. Jim & Tom. Joined at the hip. Not.

8. The Destruction Imperative II: Death by “Same Same”

9. “While everything may be better, it is also increasingly the same.”Paul Goldberger on retail, “The Sameness of Things,”The New York Times

10. “The ‘surplus society’ has a surplus of similar companies, employing similarpeople, with similar educational backgrounds, working in similar jobs, coming up with similarideas, producing similar things, with similarprices and similarquality.”Kjell Nordstrom and Jonas Ridderstrale,Funky Business

11. 20 of 267 of top 10*

12. *P&G:Declining domestic sales in 20 of 26 categories; 7 of top 10 categories.(The “billion-dollar” problem.)Source: Advertising Age 01.21.2002/BofA Securities

13. Primary Obstacles to “Marketing-driven Change”1. Fear of “cannibalism.”2. “Excessive cult of the consumer”/ “customer driven”/ “slavery to demographics, market research and focus groups.”3. Creating “sustainable advantage.”Source: John-Marie Dru, Disruption

14. “Chivalry is dead. The new code of conduct is an active strategy of disrupting the status quo to create an unsustainable series of competitive advantages. This is not an age of defensive castles, moats and armor. It is rather an age of cunning, speed and surprise. It may be hard for some to hang up the chain mail of ‘sustainable advantage’ after so many battles. But hypercompetition, a state in which sustainable advantages are no longer possible, is now the only level of competition.”Rich D’Aveni, Hypercompetition: Managing the Dynamics of Strategic Maneuvering

15. Axiom (Hypothesis): We have been screwed by Benchmarking … Best Practice … C.I./Kaizen.Axiom (Hypothesis): We need Masters of Discontinuity/ Masters of Ambiguity … in discontinuous/ambiguous times.

16. “Companies have defined so much ‘best practice’ that they are now more or less identical.”Jesper Kunde, A Unique Moment

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

18. Dell’s OptiPlex FacilityBig Job: 6 to 8 hours.(80,000 per day)Parts Inventory: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. Read It Closely:“We don’t sell insurance anymore.Wesell speed.”Peter Lewis, Progressive

21. RESPONSE

22. The “PSF Solution”:The Professional Service Firm Model.

23. Answer: PSF![Professional Service Firm]Department Headto …Managing Partner, HR [IS, etc.] Inc.

24. “Typically in a mortgage company or financial services company, ‘risk management’ is an overhead, not a revenue center. We’ve become more than that.We pay for ourselves, and we actually make money for the company.”—Frank Eichorn, Director of Credit Risk Data Management Group, Wells Fargo Home Mortgage (Source: sas.com)

25. The Big Day!

26. 09.11.2000: HP bids $18,000,000,000for PricewaterhouseCoopersconsulting business!

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

28. 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).

29. “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)

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

31. New Springs = TurnkeyFlexible sourcing.Collections.Packaging.Merchandising.Promotion.Systems & Site mgt.

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

33. “VISIONS OF A BRAND-NAME OFFICE EMPIRE. Sam Zell is not a man plagued by self doubt. Mr. Zell controls public companies that own nearly 700 office buildings in the United States. … Now Mr. Zell says he will transform the real estate market by turning those REITs into national brands. … Mr. Zell believes [clients] will start to view those offices as something more than a commodity chosen chiefly by price and location.” –New York Times (12.16.2001)

34. The …Solutions25.

35. 1. It’s the (OUR!) organization, stupid!2. Friction free! 3. No STOVEPIPES!4. “Stovepiping” is a F.O.—Firing Offense.5. ALL on the web! (ALL = ALL.)6. Open access!6. Project Managers rule! (E.g.: Control the purse strings and evals.)7. VALUE-ADDED RULES! (Services Rule.) (Experiences Rule.) (Brand Rules.)8. SOLUTIONS RULE! (We sell SOLUTIONS. Period. We sell PRODUCTIVITY & PROFITABILITY. Period.)9. Solutions = “Our ‘culture.’ ”10. Partner with B.I.C. (Best-In-Class). Period.

36. 11. All functions contribute equally—IS, HR, Finance, Purchasing, Engineering, Logistics, Sales, Etc.12. Project Management can come from any function.13. WE ARE ALL IN SALES. PERIOD.14. We all invest in “wiring” the customer organization.15. WE ALL “LIVE THE BRAND.” (Brand = Solutions. That MAKE MONEY FOR OUR CUSTOMER- PARTNER.)16. We use the word “PARTNER” until we all want to barf!17. We NEVER BLAME other parts of our organization for screw-ups.18. WE AIM TO REINVENT THIS INDUSTRY!19. We hate the word-idea “COMMODITY.”

37. 20. We believe in “High tech, High touch.”21. We are DREAMERS.22. We deliver . (PROFITS.) (CUSTOMER SUCCESS.)23. If we play the “SOLUTIONS GAME” brilliantly, no one can touch us!24. Our TEAM needs 100% I.C.s (Imaginative Contributors). This is the ULTIMATE “All Hands” affair!25. This is a hoot!

38. PSF Unbound+: It’s the EXPERIENCE.

39. “Experiencesare as distinct from services as services are from goods.”Joseph Pine & James Gilmore, The Experience Economy: Work Is Theatre & Every Business a Stage

40. 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

41. “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

42. The “Soul” of “Experiences”: Design Mindfulness.

43. Design’s place in the universe.

44. “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 fundamentalsoul of a man-made creation.”Steve Jobs

45. 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

46. “Design is treated like a religion at BMW.”Fortune

47. “The good 10 percent of product design comes out of big-idea companies that don’t believe in talking to the customer. They're run by passionate maniacs who make everybody’s life miserable until they get what they want.”Bran Ferren, Applied Minds/Wired 1-2001

48. Bottom Line.

49. Design “is” … WHAT & WHY I LOVE. LOVE.

50. Ziplocs