Tom Peters X 25 EXCELLENCE ALWAYS RompetrolAnnual Management

Tom Peters’ X 25*: EXCELLENCE. ALWAYS. Rompetrol/Annual Management Meeting Paris/02 December 2006 *In Search of Excellence 1982 -2007

Slides* at … tompeters. com *also “LONG”

EXCELLENCE. ALL. YOU. NEED. TO. KNOW.

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EXCELLENCE. ALL. YOU. NEED. TO. KNOW. ANYWHERE. ANY MARKET. ANY TIME.

Jim’s Group

EX-CELL-ENCE. NOT.

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

: 39 members of the Class of ’ 17 were alive in ’ 87; 18 in ’ 87 F 100; 18 F 100 “survivors” significantly underperformed the market; “Forbes 100” from 1917 to 1987 just 2 (2%), GE & Kodak, outperformed the market from 1917 to 1987. S&P 500 from 1957 to 1997: ’ 97; 74 members of the Class of ’ 57 were alive in 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

Welcome to the “Club of Shattered Dreams”: Of Korea’s Top 100 companies in 1955, only 7 were still on the list in 2004. The 1997 crisis “destroyed of Korea’s half 30 largest conglomerates. ” Source: “KET Issue Report, ” Kim Jong Nyun (14. 05. 2005)

S&P Stability Ratings* 1985 Low Risk 41% Average Risk High Risk 35% 13% 24% 73% *Likelihood of stable long-term earnings growth Source: Fortune (2 October 2006) 2006 14%

The last word: There is no last word.

Flat as a Pancake (Or Worse) Wal*Mart … Dell … Intel … Home Depot … Microsoft … GE

EXCELLENCE. STARTERS. BASICS. K. I. S. S.

“Why in the world did you go to Siberia? ”

Raging Success = PSQUARED. C. E-CUBED.

People. Product. Clients. Execution. Enthusiasm. Excellence.

Excellence 1982: The Bedrock “Eight Basics” 1. A Bias for Action 2. Close to the Customer 3. Autonomy and Entrepreneurship 4. Productivity Through People 5. Hands On, Value-Driven 6. Stick to the Knitting 7. Simple Form, Lean Staff 8. Simultaneous Loose-Tight Properties”

The Hay. Group Six 1. Accountability 2. X-functional coordination 3. Execution/K. I. S. S. 4. Talent management 5. Growth, Customers take priority 6. Self-management, Empathy, Teamwork

EXCELLENCE. ASPIRATION.

The Peters Principles: Enthusiasm. Emotion. Excellence. Energy. Excitement. Service. Growth. Creativity. Imagination. Vitality. Joy. Surprise. Independence. Spirit. Community. Limitless human potential. Diversity. Profit. Innovation. Design. Quality. Entrepreneurialism. Wow.

An emotional, vital, audacious, innovative, joyful, frightening, risky, creative, entrepreneurial endeavor that breathes life & fire into our work & life & elicits maximum concerted human potential in the wholehearted effort to help others ** [**employees, clients, Business* (*at its “excellent” best) can be: suppliers, communities, owners, temporary partners] succeed & profit & imagine & reach places they’d never dreamed they could go.

In-sane-ly-great

EXCELLENCE. DEFINED. AGENDA. SETTER.

SET THE AGENDA. * Great Companies … (PERIOD. ) * “disturb the sleep of …

TP#1*: Netscape! *Where would you rather have worked for those 5 years, years Netscape or IBM-HP-Microsoft-Oracle? (Where, 25 years from now, would you rather to be able to tell someone—e. g. , grandchild—that you worked? )

Built to Last vs Built to Change/Rock the World

EXCELLENCE. INNOVATE. OR. DIE.

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

EXCELLENCE. INNOVATE. ALL. WRONG.

“I don’t believe in economies of You don’t get better by being bigger. You get worse. ” scale. Dick Kovacevich/Wells Fargo —

“When asked to name just 1 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

“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

Spinoffs systematically perform better than IPOs … track record, profits … “freed from the confines of the parent … more entrepreneurial, more nimble” nimble —Jerry Knight/ Washington Post/ 08. 05

Private Equity-financed Firm, Best *Case *Focus! *In a [Big] hurry *CEO/Top team, “skin in the game” *CEO, 100% of time on the biz *Merit! *Motivated oversight *Worst case: Rape & Pillage

There’s “A” and then there’s “A. ”

EXCELLENCE. INNOVATE. TACTICS.

y it. Try it. Try ryy it. Try it. try it. Try ryy it. try it. Try Try it.

READY. FIRE! AIM. Ross Perot (vs “Aim!” /EDS vs GM/1985)

“Experiment fearlessly” Source: BW 0821. 06, Type A Organization Strategies/ “How to Hit a Moving Target”—Tactic #1

“We made mistakes, of course. Most of them were omissions we didn’t think of when we initially wrote the software. We fixed them by doing it over and over, again and again. We do the same today. While our competitors are still sucking their thumbs trying to make the design perfect, we’re already on prototype version # 5. By the time our rivals are ready with wires and screws, we are on version #10. It gets back to planning versus acting: We act from day one; others plan how to plan—for months. ” — Bloomberg by Bloomberg

“You miss 100 percent of the shots you never take. ” —Wayne Gretzky

Excellence 1982: The Bedrock “Eight Basics” 1. A Bias for Action 2. Close to the Customer 3. Autonomy and Entrepreneurship 4. Productivity Through People 5. Hands On, Value-Driven 6. Stick to the Knitting 7. Simple Form, Lean Staff 8. Simultaneous Loose-Tight Properties”

tolerate [encourage? ] failure

Sam’s Secret #1!

“Reward excellent failures. Punish mediocre successes. ” Phil Daniels, Sydney exec

Speed/ Tempo

“We don’t sell insurance anymore. We sell speed. ” Peter Lewis, Progressive

We become who we spend time with!

Measure “Strangeness”/Portfolio Quality Staff Consultants Vendors Out-sourcing Partners (#, Quality) Innovation Alliance Partners Customers Competitors (who we “benchmark” against) Strategic Initiatives Product Portfolio (Line. Ex v. Leap) IS/IT Projects HQ Location Lunch Mates Language Board

measure

Innovation Index: How many of your Top 5 Strategic Initiatives/Key Projects score 8 or higher [out of 10] on a “Profound”/ “Amazing”/“Game- changer” Scale?

EXCELLENCE. 1966. 2006.

4/40

De-central-iza-tion!

“If if feels painful and scary —that’s real delegation” —Caspian Woods, small biz owner

The True Logic* of Decentralization: 6 divisions = 6 “tries” 6 divisions = 6 DIFFERENT leaders = 6 INDEPENDENT “tries” = Max probability of “win” 6 divisions = 6 very DIFFERENT leaders = 6 very INDEPENDENT “tries” = Max probability of “far out”/” 3 sigma” “win” *“Driver”: Law of Large #s

Ex-ecu-tion!

“Execution is the job of the business leader. ” —Larry Bossidy & Ram Charan/ Execution: The Discipline of Getting Things Done

“Execution is a process systematic of rigorously discussing hows and whats, tenaciously following through, and ensuring accountability. ” —Larry Bossidy & Ram Charan/ Execution: The Discipline of Getting Things Done

Projects = Goal (“Vision”) Milestones = Project Rapid Review + Truth-telling = accountability

Ac-counta-bil-ity!

“GE has set a standard of candor. … There is no puffery. … There isn’t an ounce of denial in the place. ” —Kevin Sharer, CEO Amgen, on the “GE mystique” (Fortune)

6: 15 A. M.

4/40: De-centralization execution accountability 6: 15 a. m.

The Hay. Group Six 1. Accountability 2. X-functional coordination 3. Execution/K. I. S. S. 4. Talent management 5. Growth, Customers take priority 6. Self-management, Empathy, Teamwork

EXCELLENCE. BEDROCK. TALENT.

Hire very good people!

“We believe companies can increase their market cap 50 percent in 3 years. Steve Macadam at Georgia- changed 20 of his 40 box plant managers to put more talented, higher paid managers in charge. He increased profitability from Pacific … $25 million to $80 million in —Ed Michaels, War for Talent 2 years. ”

EMPHASIZE THE “SOFT SKILLS. ”

“The person who is a little less conceptual but is absolutely determined to succeed will usually find the right people and get them together to achieve objectives. I’m not knocking education or looking for dumb people. But if you have to choose between someone with a staggering IQ and an elite education who’s gliding along, and someone with a lower IQ but who is absolutely determined to succeed, you’ll always do better with the second person. ” —Larry Bossidy (Larry Bossidy & Ram Charan/ Execution: The Discipline of Getting Things Done)

PUT HR AT THE HEAD OF THE HEAD TABLE. BEST PEOPLE. NOBLEST MISSION.

A review of Jack and Suzy Welch’s Winning claims there are but two key differentiators that set GE “culture” apart from the herd: First: Separating financial forecasting and performance measurement. Performance measurement based, as it usually is, on budgeting leads to an epidemic of gaming the system. GE’s performance measurement is divorced from budgeting—and instead reflects how you do relative to your past performance and relative to competitors’ performance; i. e. , it’s about how you actually do in the context of what happened in the real world, not as compared to a gamed-abstract plan developed last year. Putting HR on a par with finance and marketing. Second:

SO YOU’RE A “PEOPLE PERSON”? PROVE IT.

“The leaders of Great Groups love talent and know where to find it. They revel in the talent of others. ” —Warren Bennis & Patricia Ward Biederman, Organizing Genius

SO YOU’RE A “PEOPLE PERSON”? PROVE IT.

< CAPEX > People!

LIVE FOR TALENT!

Our Mission To develop and manage talent; to apply that talent, throughout the world, for the benefit of clients; to do so in partnership; to do so with profit. WPP

EXCELLENCE. BEDROCK. LEADERSHIP. 9 Ps.

PURPOSE. PASSION. Potential. Presence. Personal. PERSISTENCE. PEOPLE. Potent. Positive.

PURPOSE. PASSION. Potential. Presence. Personal. PERSISTENCE. PEOPLE. Potent. Positive.

“People want to be part of something larger than themselves. They want to be part of something they’re really proud of, that they’ll fight for, sacrifice for , trust. ” —Howard Schultz, Starbucks (IBD/09. 05)

Ah, kids: “What is your vision for the future? ” “What have you accomplished since your first book? ” “Close your eyes and imagine me immediately doing something about what you’ve just said. What would it be? ” “Do you feel you have an obligation to ‘Make the world a better place’? ”

PURPOSE. PASSION. Potential. Presence. Personal. PERSISTENCE. PEOPLE. Potent. Positive.

“Nothing is so contagious as enthusiasm. ” —Samuel Taylor Coleridge

“Whenever anything is being accomplished, I have learned, it is being done by a monomaniac with a mission. ” —Peter Drucker

PURPOSE. PASSION. Potential. Presence. Personal. PERSISTENCE. PEOPLE. Potent. Positive.

“In the end, management doesn’t change culture. Management invites the workforce itself to change the culture. ” —Lou Gerstner

“The role of the Director is to create a space where the actors and actresses become more than they’ve ever been before, more than they’ve dreamed of being. ” can —Robert Altman, Oscar acceptance speech

PURPOSE. PASSION. Potential. Presence. Personal. PERSISTENCE. PEOPLE. Potent. Positive.

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PURPOSE. PASSION. Potential. Presence. Personal. PERSISTENCE. PEOPLE. Potent. Positive.

“You must be the change you wish to see in the world. ” Gandhi

“The First step in a ‘dramatic’ ‘organizational change program’ is obvious—dramatic personal change!” —RG

PURPOSE. PASSION. Potential. Presence. Personal. PERSISTENCE. PEOPLE. Potent. Positive.

Relentless: “One of my superstitions had always been when I started to go anywhere or to do anything, not to turn back , or stop, until the thing intended was accomplished. ” Grant —

“It is no use saying ‘We are doing our best. ’ You have got to succeed in doing what is necessary. ” —WSC

"The reasonable man adapts himself to the world. The unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends upon the unreasonable man. ” —GB Shaw, Man and Superman: The Revolutionists' Handbook.

“Success seems to be largely a matter of hanging on after others have let go. ” —William Feather, author

PURPOSE. PASSION. Potential. Presence. Personal. PERSISTENCE. PEOPLE. Potent. Positive.

‘do’ “Leaders people. Period. ” —Anon.

PURPOSE. PASSION. Potential. Presence. Personal. PERSISTENCE. PEOPLE. Potent. Positive.

“Beware of the tyranny of making Small Changes to Small Things. Rather, make Big Changes to Big Things. ” —Roger Enrico, former Chairman, Pepsi. Co

Kevin Roberts’ Credo 1. Ready. Fire! Aim. 2. If it ain’t broke. . . Break it! 3. Hire crazies. 4. Ask dumb questions. 5. Pursue failure. 6. Lead, follow. . . or get out of the way! 7. Spread confusion. 8. Ditch your office. 9. Read odd stuff. 10. Avoid moderation!

PURPOSE. PASSION. Potential. Presence. Personal. PERSISTENCE. PEOPLE. Potent. Positive.

“[other] admirals more frightened of losing than anxious to win” On NELSON:

The greatest danger for most of us is not that our aim is too high and we miss it, but that it is too low and we reach it. Michelangelo

PURPOSE. PASSION. Potential. Presence. Personal. PERSISTENCE. PEOPLE. Potent. Positive.

“Excellence can be obtained if you: . . . care more than others think is wise; . . . risk more than others think is safe; . . . dream more than others think is practical; . . . expect more than others think is possible. ” Source: Anon. (Posted @ tompeters. com by K. Sriram, November 27, 2006 1: 17 AM)

XCELLE ALWA

EXCELLENCE. THE LEADERSHIP 23.

Leadership 23/ML 1. Enthusiasm. Energy. Exuberance. 2. Action. Execution. 3. Tempo. Metabolism. 4. Relentless. 5. Master of Plan B. 6. Accountability. 7. Meritocracy. 8. Leaders “do” people. Mentor. (“Success creation business. ”) 9. Women. Diversity. 10. Integrity. Credibility. Humanity. Grace. 11. Realism. 12. Cause. Adventures. Quests.

Leadership 23/ML 13. Legacy. 14. Best story wins. 15. On the edge. (“Wildest chimera of a moonstruck mind. ”) 16. “Reward excellent failures. Punish mediocre successes. ” 17. Different > Better. (“Only ones who do what we do. ”) 18. MBWA. Customer MBWA. 19. Laughs. 20. Repot. Curiosity. Why? 21. You = Calendar. “To Don’t. ” Two. 22. Excellence. Always. 23. Nelsonian! (“Other admirals more afraid of losing than anxious to win. ”)

“Excellence can be obtained if you: . . . care more than others think is wise; . . . risk more than others think is safe; . . . dream more than others think is practical; . . . expect more than others think is possible. ” Source: Anon. (Posted @ tompeters. com by K. Sriram, November 27, 2006 1: 17 AM)

XCELLE ALWA