Tom Peters Y 2002 The Solutions Imperative Version

Tom Peters’ Y 2002: The … Solutions Imperative Version 01. 16 -2002

1. Base Case …

“Customers will try ‘low cost providers’ … because the Majors have not given them any clear reason not to. ” Leading Insurance Industry Analyst

SWA > American + Continental + Delta + Northwest + United + USAirways. Source: Boston Globe (12. 2001)

Getting Beyond Lip Service! “No longer are we only an insurance provider. Today, we also offer our customers the products and services that help them achieve their dreams, whether it’s financial security, buying a car, paying for home repairs, or even taking a dream vacation. ”—Martin Feinstein, CEO, Farmers Group

TP 2002: GE Industrial Systems. Farmers. Message I: Same-same kills. Go way up the VA Chain. (Or else. ) Transformation or bust: Fullservice/ solutions provider. Great rep … but … NOBODY OWNS THE SPACE. Message II: All dogs must learn … lotsa … new tricks. (Bad news: Everybody’s after the same space. Mr. Darwin is on the prowl!)

Diversity Marketing … Communities of Interest … Bank of America relationship … specialized acquisitions … Farmers Agency Dashboard … Help. Point … licensed financial planners … etc.

2. The Enemy …

“Quality as defined by few defects is becoming the price of entry for automotive marketers rather than a competitive advantage. ” J. D. Power

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

“We make over three new product announcements a day. Can you remember them? Our customers can’t!” Carly Fiorina

“The ‘surplus society’ has a surplus of similar companies, employing similar people, with similar educational backgrounds, working in similar jobs, coming up with similar ideas, producing similar things, with similar prices and similar quality. ” Kjell Nordstrom and Jonas Ridderstrale, Funky Business

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

10 X/10 X

Remember: “Customers will try ‘low cost providers’ … because the Majors have not given them any clear reason not to. ” Leading Insurance Industry Analyst

3. Cut The [Internal] Crap …

Dell’s Opti. Plex Facility Big Job: 6 to 8 hours. (80, 000 per day) Parts Inventory: 100 square feet.

“In an era when terrorists use satellite phones and encrypted email, US gatekeepers stand armed against them with pencils and paperwork, and archaic computer systems that don’t talk to each other. ” Boston Globe (09. 30. 2001)

“Once devised in Riyadh, the tasking order took hours to get to the Navy’s six aircraft carriers—because the Navy had failed years earlier to procure the proper communications gear that would have connected the Navy with its Air Force counterparts. … To compensate for the lack of communications capability, the Navy was forced to fly a daily cargo mission from the Persian Gulf and Red Sea to Riyadh in order to pick up a computer printout of the air mission tasking order, then fly back to the carriers, run photocopy machines at full tilt, and distribute the documents to the air wing squadrons that were planning the next strike. ” –Bill Owens, Lifting the Fog of War

Cisco! 90% of $20 B (=$50 M/day) Annual savings in service and support from customer self-management: $550 M (P. S. : C. Sat e >> C. Sat h)

Secret Cisco: Community! Customer Engineer Chat Rooms/Collaborative Design ($1 B “free” consulting) (45, 000 customer problems a week solved via customer collaboration)

The Real “News”: X 1, 000 Tow. Truck. Net. com

Welcome to D. I. Y. Nation: “Changes in business processes will emphasize self service. Your costs as a business go down and perceived service goes up because customers are conducting it themselves. ” Ray Lane, Oracle

Anne Busquet/ American Express Not: “Age of the Internet” “Age of Customer Control” Is:

Amen! “The Age of the Never Satisfied Customer” Regis Mc. Kenna

“Teens and young adults are flocking to the Web for health-related information as much as they are downloading music and playing games online and more often than shopping online, according to a national survey from the Kaiser Family Foundation. ” Reuters (12. 11. 01):

“One in Four Internet Users Seek Religious Information” —Reuters (12. 24. 2001) (“God trumps money, sex. ”)

One Person’s Opinion TP to reporter: “Service is MUCH better! Would you go back to bank tellers and phone operators? Value that I place on a “smile”: 3 on a scale of 10. Value I place on fast & accurate “digital” response: 11 on a scale of 10!!

“CRM has, almost universally, failed to live up to expectations. ” Butler Group (UK)

CGE&Y (Paul Cole): “Pleasant “Systemic Opportunity. ” “Better job of what we do today” vs. “Rethink overall enterprise strategy. ” Transaction” vs.

Web. World = Everything Web as a way to run your business’s innards Web as connector for your entire supply-demand chain Web as “spider’s web” which re-conceives the industry Web/B 2 B as ultimate wake-up call to “commodity producers” Web as the scourge of slack, inefficiency, sloth, bureaucracy, poor customer data Web as an Encompassing Way of Life Web = Everything (P. D. to after-sales) Web forces you to focus on what you do best Web as entrée, at any size, to World’s Best at Everything as next door neighbor

Message: e. Commerce is not a technology play! It is a relationship, partnership, organizational and communications play, made possible by new technologies.

Message: There is no such thing as an effective B 2 B or Internet-supply chain strategy in a low-trust, bottleneckedcommunication, six-layer organization.

“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

Jargon Bath! Bureaucracy free … Systemically integrated … Internet intense … Knowledge based … Time and location free … “Instantly” responsive … Customer centric … Mass customization enabled.

Translation … Bureaucracy free = Flat org, no B. S. Systemically integrated = Whole supply chain tightly wired/ friction free Internet intense = Do it all via the Web Knowledge based = Open access Time and location free = Whenever, wherever “Instantly” responsive = Speed demons Customer centric = Customer calls the shots Mass customization enabled = Every product and service rapidly tailored to client requirements

“Supply Chain” 2000: “When Joe Employee at Company X launches his browser, he’s taken to Company X’s personalized home page. He can interact with the entire scope of Company X’s world – customers, other employees, distributors, suppliers, manufacturers, consultants. The browser – that is, the portal – resembles a My Yahoo for Company X and hooks into every network associated with Company X. The real trick is that Joe Employee, business partners and customers don’t have to be in the office. They can log on from a cell phone, Palm Pilot, pager or home office system. ” Red Herring (09. 2000)

The Real “New Economy” “Imagine a chess game in which, after every half dozen moves, the arrangement of the pieces on the board stays the same but the capabilities of the pieces randomly change. Knights now move like bishops, bishops like rooks … Technology does that. It rubs out boundaries that separate industries. Suddenly new competitors with new capabilities will come at you from new directions. Lowly truckers in brown vans become geeky logistics experts. …” Business 2. 0 (8. 2001)

The Real “New Economy” “Only a few times in history have interaction costs radically changed—one was the railroads, then the telegraph and telephone. We’re going through another one right now. ” Jeff Skilling, Enron

4. A Pitiful Showing …

“Our military structure today is essentially one developed and designed by Napoleon. ” Admiral Bill Owens, former Vice Chairman, Joint Chiefs of Staff

From: To: Weapon v. Weapon Org structure v. Org structure

Forbes 100 from 1917 to 1987: 39 members of the Class of ’ 17 were alive in ’ 87; 18 in ’ 87 F 100; 18 F 100 “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

“A pattern emphasized in the case studies in this book is the degree to which powerful competitors not only resist innovative threats, but actually resist all efforts to understand them, preferring to further their positions in older products. This results in a surge of productivity and performance that may take the old technology to unheard of heights. But in most cases this is a sign of impending death. ” Jim Utterback, Mastering the Dynamics of Innovation

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

“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

“Acquisitions are about buying market share. Our challenge is to create markets. There is a big difference. ” Peter Job, CEO, Reuters

5. A White Collar Revolution …

108 X 5 vs. 8 X 1 = 540 vs. 8 (-98. 5%)

The Pincer 5 1 “Destructive” entrepreneurs/ Global Competition. 2 “White Collar Robots”. 3 THE INTERNET!. [E. g. : GM + Ford + Daimler. Chrysler] 4. Global Outsourcing [E. g. : India, Mexico] 5. Speed!!

“So what does Drexel’s demise tell us about Enron? Companies may die (or commit suicide), but ideas—if they’re any good— survive. ” James Surowiecki, The New Yorker

Every job done in W. C. W. is also done “outside” …for profit!

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

“P. S. F. ”: Summary H. V. A. Projects (100%) Pioneer Clients WOW Work (see below) Hot “Talent” (see below) “Adventurous” “culture” Proprietary Point of View (Methodology) W. W. P. F. (100%)/Outside Clients (25%++)

Model PSF …

(1) Translate ALL departmental activities into discrete W. W. P. F. “Products. ” (2) 100% go on the Web. (3) Non-awesome are outsourced (75%? ? ). (4) Remaining “Centers of Excellence” are retained & leveraged to the hilt!

7 Rules for Leading/THRIVING in a Recession+ 1. It’s ALREADY too late. 2. Show up & tell the truth—CREDIBILITY rules. 3. Kill with KINDNESS. 4. Sharp pencils are imperative—but don’t forget that the CUSTOMER & our TALENT & RISKY INVESTMENTS are still our long-term Bread & Butter. 5. Everything’s different, everything’s the same—it’s the NEW ECONOMY, more than ever, stupid! 6. “Use” the trauma to mount the bold initiatives you should have long before mounted: Flux = OPPORTUNITY. 7. We’re in a War of Organizational Models—from retail to the Pentagon. IDEAS MATTER MOST.

6. Searching for New Bases for Value Added …

The Big Day!

09. 11. 2000: HP bids $18, 000, 000 for Pricewaterhouse. Coopers consulting business!

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

HP … Sun … GE … IBM … UPS … UTC … General Mills … Springs … Anheuser-Busch … Carpet One … Delphi … Etc.

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

“Customer Satisfaction” to “Customer Success” “We’re getting better at [Six Sigma] 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, GE Power Systems

Customer Satisfaction versus Keep In Mind: Customer Success

“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. 5 M Ford vehicles, from 21 mfg. sites to 6, 000 NA dealers)

New Springs = Turnkey Collections. Flexible sourcing. Packaging. Merchandising. Promotion. Systems & Site mgt.

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

Who was the number one employer of architecture school grads in the U. S. last year?

“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. ” (12. 16. 2001) –New York Times

Everybody is going after the same space! Problem:

“Assetless Company” John Bryan, CEO, on selling all Sara Lee’s manufacturing

“Don’t own nothin’ if you can help it. If you can, rent your shoes. ” F. G.

Better Red than Dead? / Better Dead than Red? “We will see more and more outsourcing of discovery processes. ” Craig Venter

Better Red than Dead? / Better Dead than Red? “If we completely outsourced all of our genetic analysis, we’d be held hostage by outside people. ” Brian Spear, Director of Pharmacogenomics, Abbott Labs

Pfizer: 1, 000 projects with academics and biotechs. Novartis: 30% of R&D is via collaborations.

“The move toward outsourced manufacturing represents an obvious opportunity for contract manufacturers [such as Flextronics: $93 M to $15 B, ’ 93 -’ 01], but it’s also a potential boon to product innovation. The future of gadget-making is not about making gadgets; it’s about imagining them. Someone else makes the imaginary real. ‘All that money that used to go to fund infrastructure is going into design and innovation, ’ says Flex CEO Michael Marks. ” Wired/11. 2001

Markets to networks. Hierarchies to networks. Sellers and buyers to suppliers and users. Ownership to access. (Age of Access. ) Marginalization of physical property. Weightless economy. Protean generation. Outsourcing of everything. Franchising of everything. (Business format franchising. ) (Leasing DNA. ) Everything is a service/platform for services delivery. (Give away the goods, charge for the services. VALUE = THE RELATIONSHIP. “Share of market” to “Share of customer. ”) Every business is show business. Source: Jeremy Rifkin, The Age of Access

7. “It” Adds Up to an “Experience” …

“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

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

The “Experience Ladder” Experiences Services Goods Raw Materials

1940: Cake from flour, sugar (raw materials economy): $1. 00 1955: Cake from Cake mix (goods economy): $2. 00 1970: Bakery-made cake (service economy): $10. 00 1990: Party @ Chuck E. Cheese (experience economy) $100. 00

Message: “Experience” is the “Last 80%” P. S. : “Experience” applies to all work!

1940: Cake from flour, sugar (raw materials economy): $1. 00 1955: Cake from Cake mix (goods economy): $2. 00 1970: Bakery-made cake (service economy): $10. 00 1990: Party @ Chuck E. Cheese (experience economy) $100. 00

“I see us as being in the art business. Art, entertainment and mobile sculpture, which, coincidentally, also happens to provide transportation. ” Bob Lutz: Source: NYT 10. 19. 01

The “Experience Ladder” Experiences Services Goods Raw Materials

Ladder Position Measure Solutions Success Services Satisfaction Goods Six-sigma

8. Renaissance Man/Woman Emerges …

“If there is nothing very special about your work, no matter how hard you apply yourself, you won’t get noticed, and that increasingly means you won’t get paid much either. ” Michael Goldhaber, Wired

Minimum New Work Survival. Skills. Kit 2001 Mastery Rolodex Obsession (vert. to horiz. “loyalty”) Entrepreneurial Instinct CEO/Leader/Businessperson/Closer Mistress of Improv Sense of Humor Intense Appetite for Technology Groveling Before the Young Embracing “Marketing” Passion for Renewal

Brand You, Big Time! I AM AN ARMY OF ONE

Distinct … or Extinct. Message:

“My ancestors were printers in Amsterdam from 1510 or so until 1750 … and during that entire time they didn’t have to learn anything new. ” Peter Drucker, Business 2. 0 (08. 22. 00)

26. 3

3 Weeks in May “Training” & Prep: 187 “Work”: 41 (“Other”: 17)

1% vs. 367%

Divas do it. Violinists do it. Sprinters do it. Golfers do it. Pilots do it. Soldiers do it. Surgeons do it. Cops do it. Astronauts do it. Why don’t businesspeople do it [very much]?

Invent. Reinvent. Repeat. Source: HP banner ad

9. “Solutions Imperative” = 100% Work That Matters [WOW Flavor] …

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

Language matters! Wow! BHAG! “Takes your breath away!”

“Intimidate their [users] imaginations” … “Where’s the revolution? ” –J Allard, on the Xbox

Your Current Project? 1. Another day’s work/Pays the rent. 4. Of value. 7. Pretty Damn Cool/Definitely subversive. 10. WE AIM TO CHANGE THE WORLD. (Insane!/Insanely Great!/WOW!)

“Learn not to be careful. ” Photographer Diane Arbus, to her students

He who has the quickest O. O. D. A. Loops* wins! *Observe. Orient. Decide. Act. / Col. John Boyd

BOTTOM LINE The Enemy!

Joe J. Jones 1942 – 2001 HE WOULDA DONE SOME REALLY COOL STUFF BUT … HIS BOSS WOULDN’T LET HIM!

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

Characteristics of the “Also rans”* “Minimize risk” “Respect the chain of command” “Support the boss” “Make budget” *Fortune, article on “Most Admired Global Corporations”

Sales 2001

The Sales 25: Great Salespeople … 1. Know the product. (Find cool mentors, and use them. ) 2. Know the company. 3. Know the customer. (Including the customer’s consultants. ) (And especially the “corporate culture. ”) 4. Love internal politics at home and abroad. 5. Religiously respect competitors. (No badmouthing, no matter how provoked. ) 6. Wire the customer’s org. (Relationships at all levels & functions. ) 7. Wire the home team’s org. and vendors’ orgs. (INVEST Big Time time in relationships at all levels & functions. ) (Take junior people in all functions to client meetings. )

Great Salespeople … 8. Never overpromise. (Even if it costs your job. ) 9. Sell only by solving problems-creating profitable opportunities. (“Our product solves these problems, creates these unimagined INCREDIBLE opportunities, and will make you a ton of money—here’s exactly how. ”) (IS THIS A “PRODUCT SALE” OR A WOW-ORIGINAL SOLUTION YOU’LL BE DINING OFF 5 YEARS FROM NOW? THAT WILL BE WRITTEN UP IN THE TRADE PRESS? ) 10. Will involve anybody—including mortal enemies—if it enhances the scope of the problem we can solve and increases the scope of the opportunity we can encompass. 11. Know the Brand Story cold; live the Brand Story. (If not, leave. )

Great Salespeople … 8. Never overpromise. (Even if it costs your job. ) 9. Sell only by solving problems-creating profitable opportunities. (“Our product solves these problems, creates these unimagined INCREDIBLE opportunities, and will make you a ton of money—here’s exactly how. ”) (IS THIS A “PRODUCT SALE” OR A WOW-ORIGINAL SOLUTION YOU’LL BE DINING OFF 5 YEARS FROM NOW? THAT WILL BE WRITTEN UP IN THE TRADE PRESS? ) 10. Will involve anybody—including mortal enemies—if it enhances the scope of the problem we can solve and increases the scope of the opportunity we can encompass. 11. Know the Brand Story cold; live the Brand Story. (If not, leave. )

Great Salespeople … 12. Think “Turnkey. ” (It’s always your problem!) 13. Act as “orchestra conductor”: You are responsible for making the whole-damn-network respond. (PERIOD. ) 14. Help the customer get to know the vendor’s organization & build up their Rolodex. 15. Walk away from bad business. (Even if it gets you fired. ) 16. Understand the idea of a “good loss. ” (A bold effort that’s sometimes better than a lousy win. ) 17. Think those who regularly say “It’s all a price issue” suffer from rampant immaturity & shrunken imagination. 18. Will not give away the store to get a foot in the door. 19. Are wary & respectful of upstarts—the real enemy. 20. Seek several “cool customers”—who’ll drag you into Tomorrowland.

Great Salespeople … 21. Use the word “partnership” obsessively, even though it is way overused. (“Partnership” includes folks at all levels throughout the supply chain. ) 22. Send thank you notes by the truckload. (NOT ENOTES. ) (Most are for “little things. ”) (50% of those notes are sent to those in our company!) Remember birthdays. Use the word “we. ” 23. When you look across the table at the customer, think religiously to yourself: “HOW CAN I MAKE THIS DUDE RICH & FAMOUS & GET HIM-HER PROMOTED? ” 24. Great salespeople can affirmatively respond to the query in an HP banner ad: HAVE YOU CHANGED CIVILIZATION TODAY? 25. Keep your bloody Power. Point slides simple!

10. The V. A. /Solutions Imperative = The Talent Imperative …

“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

Sports Franchise GM Model 25/8/53:

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 (05. 17. 00)

Message: Some people are better than other people. Some people are a helluva lot better than other people.

“Diversity defines the health and wealth of nations in a new century. Mighty is the mongrel. … The hybrid is hip. The impure, the mélange, the adulterated, the blemished, the rough, the black-and-blue, the mix-and-match – these people are inheriting the earth. Mixing is the new norm. Mixing trumps isolation. It spawns creativity, nourishes the human spirit, spurs economic growth and empowers nations. ” G. Pascal Zachary, The Global Me: New Cosmopolitans and the Competitive Edge

The Cracked Ones Let in the Light “Our business needs a massive transfusion of talent, and talent, I believe, is most likely to be found among non-conformists, dissenters and rebels. ” David Ogilvy

enough weird people in “Are the lab these days? ” V. Chmn. , pharmaceutical house, to a lab director (06. 01)

11. V. A. = “Freakiness” …

Saviors-in-Waiting Disgruntled Customers Off-the-Scope Competitors Rogue Employees Fringe Suppliers Wayne Burkan, Wide Angle Vision: Beat the Competition by Focusing on Fringe Competitors, Lost Customers, and Rogue Employees

CUSTOMERS: “Futuredefining customers may account for only 2% to 3% of your total, but they represent a crucial window on the future. ” Adrian Slywotzky, Mercer Consultants

COMPETITORS: “The best swordsman in the world doesn’t need to fear the second best swordsman in the world; no, the person for him to be afraid of is some ignorant antagonist who has never had a sword in his hand before; he doesn’t do the thing he ought to do, and so the expert isn’t prepared for him; he does the thing he ought not to do and often it catches the expert out and ends him on the spot. ” Mark Twain

Employees: “Are there enough weird people in the lab these days? ” V. Chmn. , pharmaceutical house, to a lab director (06. 01)

Suppliers: There is an ominous downside to strategic supplier relationships. An SSR supplier is not likely to function as any more than a mirror to your organization. Fringe suppliers that offer innovative business practices need not apply. ” Wayne Burkan, Wide Angle Vision: Beat the Competition by Focusing on Fringe Competitors, Lost Customers, and Rogue Employees

WEIRD IDEAS THAT WORK: (1) Hire slow learners (of the organizational code). (1. 5) Hire people who make you uncomfortable, even those you dislike. (2) Hire people you (probably) don’t need. (3) Use job interviews to get ideas, not to screen candidates. (4) Encourage people to ignore and defy superiors and peers. (5) Find some happy people and get them to fight. (6) Reward success and failure, punish inaction. (7) Decide to do something that will probably fail, then convince yourself and everyone else that success is certain. (8) Think of some ridiculous, impractical things to do, then do them. (9) Avoid, distract, and bore customers, critics, and anyone who just wants to talk about money. (10) Don’t try to learn anything from people who seem to have solved the problems you face. (11) Forget the past, particularly your company’s success. Bob Sutton, Weird Ideas that Work: 11½ Ideas for Promoting, Managing and Sustaining Innovation

The GM/VC leadership. “model” of

The Top Creators of Shareholder Value Accept depressed earnings for several quarters to support hot product Expense rather than capitalize new venture costs Bonuses without caps Source: Fortune (09. 17. 2001)

12. Tomorrow’s Organizations = Itinerant Potential Machines …

TALENT POOL TO DIE FOR. Youthful. Insanely energetic. Value creativity. Risk taking is routine. Failing is normal … if you’re stretching. Want to “make their bones” in “the revolution. ”Love the new technologies. Well rewarded. Don’t plan to be around 10 years from now.

TALENT POOL PLUS. Seek out and work with “world’s best” as needed (it’s often needed). “We aim to change the world, and we need gifted colleagues—who well may not be on our payroll. ”

BRASSY-BUT-GROUNDED-LEADERSHIP. Say “I don’t know”—and then unleash the TALENT. Have a vision to be DRAMATICALLY DIFFERENT —but don’t expect the co. to be around forever. Will scrap pet projects, and change course 180 degrees—and take a big write-off in the process. NO REGRETS FROM SCREW-UPS WHOSE TIME HAS NOT-YET-COME. GREAT REGRETS AT TIME & $$$ WASTED ON “ME TOO” PRODUCTS AND PROJECTS.

BRASSY-BUT-GROUNDED-LEADERSHIP. (Cont. ) “Visionary” leaders matched by leaders with shrewd business sense: “HOW DO WE TURN A PROFIT ON THIS GORGEOUS IDEA? ” Appreciate “market creation” as much as or more than “market share growth. ” ARE INSANELY AWARE THAT MARKET LEADERS ARE ALWAYS IN PRECARIOUS POSITIONS, AND THAT MARKET SHARE WILL NOT PROTECT US, IN TODAY’S VOLATILE WORLD, FROM THE NEXT KILLER IDEA AND KILLER ENTREPRENEUR. (Gates. Ellison. Venter. Mc. Nealy. Walton. Case. Etc. )

ALLIANCE MANIACS. Don’t assume that “the best resides within. ” WORK WITH A SHIFTING ARRAY OF STATE-OF-THE-ART PARTNERS FROM ONE END OF THE “SUPPLY CHAIN” TO THE OTHER. Including vendors and consultants and … especially … PIONEERING CUSTOMERS … who will “pull us into the future. ”

TECHNOLOGY-NETWORK FANATICS. Run the whole-damn-company, and relations with all outsiders, on the Internet … at Internet speed. Reluctant to work with those who don’t share this (radical) vision.

POTENTIAL MACHINES-ORGANISMS. Don’t know what’s coming next. But are ready to jump at opportunities, especially those that challenge -overturn our own “way of doing things. ”

13. V. A. /Solutions Imperative = The Brand …

“Brand Promise” Exercise: (1) Who Are WE? (poem/novella/song, then 25 words. ) (2) List three ways in which we are UNIQUE … to our Clients. (3) Who are THEY (competitors)? (ID, 25 words. ) (4) List 3 distinct “us”/“them” differences. (5) Try “results” on your teammates. (6) Try ’em on a friendly Client. (7) Try ’em on a skeptical Client!

1 st Law Mktg Physics: OVERT BENEFIT (Focus: 1 or 2 > 3 or 4/“One Great Thing. ” Source #1: Personal Passion) 2 ND Law: REAL REASON TO BELIEVE (Stand & Deliver!) RD 3 Law: DRAMATIC DIFFERENCE (Execs Don’t Get It: See the next slide. ) Source: Jump Start Your Business Brain, Doug Hall

2 Questions: “How likely are you to purchase this new product or service? ” (95% to 100% weighting by execs) “How unique is this new product or service? ” (0% to 5%*) *No exceptions in 20 years – Doug Hall, Jump Start Your Business Brain

The Heart of Branding …

“WHO ARE WE? ”

WHAT’S OUR STORY?

DO THE HOUSEKEEPERS & CLERKS “BUY IT”? [ARE YOU V-E-R-Y SURE? ]

“EXACTLY HOW ARE WE DRAMATICALLY DIFFERENT? ”

“ WHY DOES IT MATTER TO THE CLIENT? ”

“EXACTLY HOW DO I PASSIONATELY CONVEY THAT DRAMATIC DIFFERENCE TO THE CLIENT ? ”

14. The … Solutions Imperative …

The … Solutions 25

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! 7. Project Managers rule! (E. g. : Control the purse strings and evals. ) 8. VALUE-ADDED RULES! (Services Rule. ) (Experiences Rule. ) (Brand Rules. ) 9. SOLUTIONS RULE! (We sell SOLUTIONS. Period. We sell PRODUCTIVITY & PROFITABILITY. Period. ) 10. Solutions = “Our ‘culture. ’ ” 11. Partner with B. I. C. (Best-In-Class). Period.

12. All functions contribute equally—IS, HR, Finance, Purchasing, Engineering, Logistics, Sales, Etc. 13. Project Management can come from any function. 14. WE ARE ALL IN SALES. PERIOD. 15. We all invest in “wiring” the customer organization. 16. WE ALL “LIVE THE BRAND. ” (Brand = Solutions. That MAKE MONEY FOR OUR CUSTOMERPARTNER. ) 17. We use the word “PARTNER” until we all want to barf! 18. We NEVER BLAME other parts of our organization for screw-ups. 19. WE AIM TO REINVENT THIS INDUSTRY! 20. We hate the word-idea “COMMODITY. ”

21. We believe in “High tech, High touch. ” 22. We are DREAMERS. 23. We deliver. (PROFITS. ) (CUSTOMER SUCCESS. ) 24. If we play the “SOLUTIONS GAME” brilliantly, no one can touch us! 25. Our TEAM needs 100% I. C. s (Imaginative Contributors). This is the ULTIMATE “All Hands” affair! 26. This is a hoot!

“No longer are we only an insurance provider. Today, we also offer our customers the products and services that help them achieve their dreams, whether it’s financial security, buying a car, paying for home repairs, or even taking a dream vacation. ”—Martin Feinstein, CEO, Farmers Group

TP 2002: GE Industrial Systems. Farmers. Message I: Same-same kills. Go way up the VA Chain. (Or else. ) Transformation or bust: Fullservice/ solutions provider. Great rep … but … NOBODY OWNS THE SPACE. Message II: All dogs must learn … lotsa … new tricks. (Bad news: Everybody’s after the same space. Mr. Darwin is on the prowl!)

Thank You !