Re-Imagine Business Excellence in a Disruptive Age

1. Tom Peters’ Re-Imagine2006!Business Excellence in a Disruptive AgeInvestec/LONG/Mauritius/10March2006

2. Slides* at …tompeters.com*short, long

3. Re-imagine! Not Your Father’s World I.

4. THREE BILLION NEW CAPITALISTS—Clyde Prestowitz

5. 1 Houston/Month/15

6. “WE ARE BEGINNING TO ACQUIRE … DIRECT AND DELIBERATE CONTROL … OVER THE EVOLUTION OF ALL LIFE FORMS … ON THE PLANET.”Source: Juan Enriquez, As The Future Catches You

7. “the metabolically dominant soldier”Source: Radical Evolution: The Promise and Peril of Enhancing Our Minds, Our Bodies—and What It Means to Be Human, Joel Garreau

8. New Economy?Sergey, Larry > Harvard

9. New Economy?Genentech, Amgen > Merck

10. “This is a dangerous world and it is going to become more dangerous.”“We may not be interested in chaos but chaos is interested in us.”Source: Robert Cooper, The Breaking of Nations: Order and Chaos in the Twenty-first Century

11. H5N1

12. December 9, 2005: “Ogre to Slay? Outsource It to Chinese” (New York Times, page 1—news section). The “factory”: Fuzhou, China. The workers: youngsters logging 12-hour shifts. Their clientele: youngsters from “Seoul to San Francisco.” The “work”: The Chinese youngsters are playing the early levels of video games for their affluent “clients,” who want to avoid the pain and time associated with those annoying first few levels.

13. Re-imagine! Not Your Father’s World II.

14. “A focus on cost-cutting and efficiency has helped many organizations weather the downturn, but this approach will ultimately render them obsolete.Only the constant pursuit of innovation can ensure long-term success.”—Daniel Muzyka, Dean, Sauder School of Business, Univ of British Columbia (FT/09.17.04)

15. The General’s Story.(And Darwin’s)

16. “If you don’t like change, you’re going to like irrelevance even less.”—General Eric Shinseki, Chief of Staff. U. S. Army

17. “It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.”—Charles Darwin

18. 1. Re-imagine Permanence: The Naked Emperor Problem!

19. Pathetic!

20. “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

21. “I am often asked by would-be entrepreneurs seeking escape from life within huge corporate structures, ‘How do I build a small firm for myself?’ The answer seems obvious:Buy a very large one and just wait.”—Paul Ormerod, Why Most Things Fail: Evolution, Extinction and Economics

22. Lessons Learned. GE. Me.

23. 4/40

24. De-cent-ral-iz-a-tion!

25. Ex-e-cu-tion!

26. Ac-count-a-bil-ity!

27. 6:15A.M.

28. 2. Re-imagine:InnovateorDie!!

29. Brilliant!

30. “Under his former boss, Jack Welch, the skills GE prized above all others were cost-cutting, efficiency and deal-making. What mattered was the continual improvement of operations, and that mindset helped the $152 billion industrial and finance behemoth become a marvel of earnings consistency. Immelt hasn’t turned his back on the old ways.But in his GE, the new imperatives are risk-taking, sophisticated marketing and, above all, innovation.”—BW/2005

31. Resist!

32. “Not a single company that qualified as having made a sustained transformation ignited its leap with a big acquisition or merger.Moreover, comparison companies—those that failed to make a leap or, if they did, failed to sustain it—often tried to make themselves great with a big acquisition or merger. They failed to grasp the simple truth that while you can buy your way to growth, you cannot buy your way to greatness.”—Jim Collins/Time/2004

33. “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

34. “Almost every personal friend I have in the world works on Wall Street. You can buy and sell the same company six times and everybody makes money,but I’m not sure we’re actually innovating. … Our challenge is to take nanotechnology into the future, to do personalized medicine …”—Jeff Immelt/2005

35. There’s“A”and then there’s“A.”

36. Scale?

37. “I don’t believe in economies of scale.You don’t get better by being bigger. You get worse.”—Dick Kovacevich/Wells Fargo/Forbes/08.04 (ROA: Wells, 1.7%; Citi, 1.5%; BofA, 1.3%; J.P. Morgan Chase, 0.9%)

38. “The slumping giant needs to put more pep in its funds. …But size remains a handicap.”—Fortune on Fidelity Magellan/1128.05 (“There’s a practical limitation to running a fund of that size.”—Chris Traulsen, analyst, Morningstar)

39. Scale?“Microsoft’s Struggle With Scale”—Headline, FT, 09.2005“Troubling Exits at Microsoft” —Cover Story, BW, 09.2005“Too Big to Move Fast?”—Headline, BW, 09.2005

40. Op-ed. Wall Street Journal. 2 March 2006: “Boutique vs. Behemoth: Upstarts Steal Market Share from the Investment Banks.” 3 March 2006: Adidas announces crappy #s, thanks to its acquisition of Reebok.

41. “TOO BIG TO GROW: Why Wall Street has soured on many of corporate America’s most admired and feared companies”—headline, Newsweek, 0313.06

42. Spinoffsperform better than IPOs … track record, profits … “freed from the confines of the parent … more entrepreneurial, more nimble”—Jerry Knight/Washington Post/08.05

43. Focus!

44. Scale’s Limitations:“All Strategy Is Local:True competitive advantages are harder to find and maintain than people realize. The odds are best in tightly drawn markets, not big, sprawling ones” —Title/Bruce Greenwald & Judd Kahn/HBR09.05

45. Market Share, Anyone?240 industries: Market-share leader is ROA leader 29% of the timeSource: Donald V. Potter, Wall Street Journal

46. Market Share, Anyone?— 240 industries; market-share leader is ROA leader 29% of the time— Profit / ROA leaders:“aggressively weed out customers who generate low returns”Source: Donald V. Potter, Wall Street Journal

47. Big WinnersLousy industry … Specialty (Ignored/No competition) … Smaller than competitors4 Traits: Sweet spot … Agility … Discipline … FocusSource: Alfred Marcus, Big Winners and Big Losers: The 4 Secrets of Long-term Business and Failure

48. Big WinnersLousy industry … Specialty (Ignored/No competition) … Smaller than competitors4 Traits: Sweet spot … Agility … Discipline … FocusSource: Alfred Marcus, Big Winners and Big Losers: The 4 Secrets of Long-term Business and Failure

49. The Benefits of … FOCUSED EXCELLENCEShouldice/Hernia Repair:30 min, 1% recurrence. Avg: 90 min, 10%-15% recurrence.Source: Complications, Atul Gawande

50. FBR: Fundamental Intrinsic Value AnalysisFocus(You know what you’re doing)Difference(You know how you’re doing it)Culture(You understand the roots)