Tom Peters‟
Re-Imagine!
Business Excellence
in a Disruptive Age
Hitachi Data Systems/i0.20.2003
Slides at …
tompeters.com
It is the foremost task—
and responsibility—
of our generation to
re-imagine our
enterprises, private
and public. —from the
Foreword, Re-imagine
1. All Bets
Are Off.
―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
―We are in a
brawl with no
rules.”
Paul Allaire
―Strategy meetings held once
or twice a year‖ to “Strategy
meetings needed several
times a week”
Source: New York Times on Meg Whitman/eBay
―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
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
―Most of our
predictions are based
on very linear thinking.
That‘s why they will
most likely be wrong.‖
Vinod Khosla, in ―GIGATRENDS,‖ Wired 04.01
No Wiggle Room!
―Incrementalism
is innovation‘s
worst enemy.‖
Nicholas Negroponte
Just Say No …
―I don‘t intend to be
known as the ‗King of
the Tinkerers.‘ ‖
CEO, large financial services company
―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
―The difficulties … arise from the inherent conflict
between the need to control existing operations and
the need to create the kind of environment that will
permit new ideas to flourish—and old ones to die a
timely death. … We believe that most
corporations will find it impossible to
match or outperform the market without
abandoning the assumption of continuity.
… The current apocalypse—the transition from a state
of continuity to state of discontinuity—Has the same
suddenness [as the trauma that beset civilization in
1000 A.D.]‖
Richard Foster & Sarah Kaplan, ―Creative Destruction‖ (The McKinsey Quarterly)
The Three Levels of Innovation
Transformational
Substantial
Incremental
Source: Dick Foster, Business 2.0 (05.01) Note:
Each level requires totally different processes!
2. The White
Collar Revolution
& the Death of
Bureaucracy.
108 X 5
vs.
8X1
= 540 vs. 8 (-98.5%)
E.g. …
Jeff Immelt: 75% of ―admin, back
room, finance‖ ―digitalized‖ in
years.
Source: BW (01.28.02)
―Don‘t own nothin‘
if you can help it.
If you can, rent
your shoes.‖
F.G.
―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)
3. IS/ IT/ Web …
―On the Bus‖ or
―Off the Bus.‖
―E-commerce is happening the way all
the hype said it would. Internet
deployment is happening. Broadband
is happening. Everything we ever said
about the Internet is happening. And it
is very, very early. We can‘t even
glimpse IT‘s potential in changing the
way people work and live.‖ —Andy Grove
(BusinessWeek/August 2003)
square feet
―Our entire facility is digital. No paper, no film, no
medical records. Nothing. And it‘s all integrated—from
the lab to X-ray to records to physician order entry.
Patients don‘t have to wait for anything. The
information from the physician‘s office is in
registration and vice versa. The referring physician is
immediately sent an email telling him his patient has
shown up. … It‘s wireless in-house. We have 800
notebook computers that are wireless. Physicians can
walk around with a computer that‘s pre-programmed. If
the physician wants, we‘ll go out and wire their house
so they can sit on the couch and connect to the
network. They can review a chart from 100 miles
away.‖—David Veillette, CEO, Indiana Heart Hospital
(HealthLeaders/12.2002)
eRevolution
40,000,000 Americans
(1 of 2 singles/40% of American
adults) went to an online
matchmaking site last month
(USN&WR/09.29.03)
“flash mobs”(!)
Impact No. 1/ Logistics &
Wal*Mart …
Distribution:
Dell … Amazon.com …
Autobytel.com …
FedEx … UPS … Ryder
… Cisco … Etc. … Etc.
… Ad Infinitum.
Autobytel:$400.
Wal*Mart: 13%.
Source: BW(05.13.2002)
“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
―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.
“Our military structure
today is essentially one
developed and
designed by
Napoleon.”
Admiral Bill Owens, former Vice Chairman, Joint Chiefs of Staff
From: Weapon v.
Weapon
To: Org structure v.
Org structure
―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
―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
Eric‘s Army
Flat.
Fast.
Agile.
Adaptable.
Light … But Lethal.
Talent/ ―I Am an Army of One.‖
Info-intense.
Network-centric.
―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
I‘net …
… allows you to
dream dreams
you could never
have dreamed
before!
Case: CRM
“CRM has, almost
universally, failed
to live up to
expectations.”
Butler Group (UK)
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.‖
CGE&Y (Paul Cole): ―Pleasant
Transaction‖ vs.“Systemic
Opportunity.” ―Better job
of what we do today‖ vs. “Re-
think overall
enterprise strategy.”
Here We Go Again: Except It‟s Real This Time!
Bank online: 24.3M (10.2002); 2X Y2000.
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
4. The Heart of the Value
Added Revolution: The
―Solutions
Imperative.‖
―Customers will try ‗low cost
the
providers‘ … because
Majors have not
given them any clear
reason not to.”
Leading Insurance Industry Analyst
―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
―Companies have defined
so much ‗best practice‘
that they are now more or
less identical.‖
Jesper Kunde, Unique now ... or never
―We make over three new
product announcements a
day. Can you remember
them? Ourcustomers
can‟t!”
Carly Fiorina
09.11.2000: HP bids
$18,000,000,000
for
PricewaterhouseCoopers
consulting business!
“These days, building
the best server isn‟t
enough. That‟s the
price of entry.”
Ann Livermore, Hewlett-Packard
Systems
Gerstner‘s IBM:
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).
“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)
Omnicom: 57% (of
$6B) from marketing services
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
IBM/Q3/10.15.03/Rev: +5%
Services/Consulting: +11%
Software: +5%
Hardware: -5%
PCs: -2%
Technology/Chips: -33%
5. A World of
Scintillating
―Experiences.‖
“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
“Club Med is more
than just a ‗resort‘; it‘s a
means of rediscovering
oneself, of inventing an
entirely new ‗me.‘ ‖
Source: Jean-Marie Dru, Disruption
―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
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
WHAT CAN BROWN DO FOR YOU?
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
Moving Companies
WSJ/08.2003: ―In Texas, They‘ll fill
your empty fridge with brie and
wine. An outfit in New York
promises quick high-speed Internet
hookup. And when Allied Van
Lines finishes unloading your
couch, they‘ll have a feng shui
expert figure out the right spot. …‖
6. ―It‖ all adds up
to … THE
BRAND.
“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
Companies will
to how we work with others.
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
7. Boss Job One:
The Talent
Obsession.
“When land was the scarce
resource, nations battled
over it. The same is
happening now for
talented people.”
Stan Davis & Christopher Meyer, futureWEALTH
Age of Agriculture
Industrial Age
Age of Information Intensification
Age of Creation Intensification
Source: Murikami Teruyasu, Nomura Research Institute
Talent!
Tina Brown: “The first thing
to do is to hire enough
talent that a critical mass
of excitement starts to
grow.”
Source: Business2.0/12.2002-01.2003
Model 25/8/53
Sports Franchise GM*
*48 = $500M
From ―1, 2 or you‘re out‖ [JW]
to …
“Best Talent in
each industry segment to
build best proprietary
intangibles” [EM]
Source: Ed Michaels, War for Talent
people are
Message: Some
better than other
people. Some people
are a helluva lot
better than other
people.
Brand =
Talent.
8. Leading in Totally
Screwed-Up Times: The
Passion Imperative!
“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!)
―We have a ‗strategic‘
plan. It‘s called doing
things.‖
— Herb Kelleher
―If things seem
under control,
you‘re just not
going
fast enough.‖
Mario Andretti
DG to TP: ―Sam
is not afraid
to fail.‖ *
*NASA failing #1, from the shuttle disaster report (July 2003):
―fear of retribution by lower-level employees.‖
“Reward
excellent
failures. Punish
mediocre successes.”
Phil Daniels, Sydney exec (and, de facto, Jack)
Cortez!
―I never, ever thought of myself
as a businessman.I was
interested in creating
things I would be
proud of.” —Richard Branson
―Management has a lot to do
with answers. Leadership is a
function of questions. And the
first question for a leader
always is: ‗Who do we intend
to be?‘ Not ‗What are we going
to do?‘ but ‗Who do we intend to
be?‘‖ —Max DePree, Herman Miller
G.H.:―Create a
„cause,‟ not a
‗business.‘ ‖
―Coca-Cola was Roberto Goizueta‘s
painting. It was never finished, and he
was never totally satisfied with it. But
he had the Sistine Chapel in his head,
and he was always working on it.‖
— Warren Buffett
Have you
changed
civilization
today?
Source: HP banner ad
T. J. Peters
1942 – 2---
HE WAS A PLAYER!
Thank You