Brand Inside

Tom Petersv02.23.2002

1. An “Action Culture.”

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

“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

“Active mutators in placid times tend to die off. They

are selected against. Reluctant mutators in

quickly changing times are also selected against.”

Carl Sagan & Ann Druyan, Shadows of Forgotten Ancestors

“Acquisitions are about

buying market share. Our challenge is to create markets.

There is a big difference.” Peter Job, CEO, Reuters

“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

Leaders “dump the ones who brung ’em” —Nokia, HP, 3M, PerkinElmer, Corning, etc.

Cortez!

The [New] Ge Way

DYB.com

If you’re not pissing people off, you’re not making

a difference!

Wendell Phillips, abolitionist:

“Republics exist only on the tenure of being constantly

agitated. There is no republican road to safety but in constant distrust.”

Source: Louis Menand, The Metaphysical Club: A Story of Ideas in America

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.

“Leaders don’t

‘want to’ win.

Leaders ‘need to’ win.”

#49

WILLPOWER RULES! (12.12.2001) “In the end the war is not about statistics, deadlines, short

attention spans of 24 hour news cycles. It’s about will, the projection of will, the clear, unambiguous

determination of the president of the United States and the American people to see this through.—DR.

Given our lack of knowledge, LT investments made on the basis of “animal spirits—a spontaneous

urge to action rather than inaction, not as the outcome of a weighted average of quantitative benefits multiplied

by quantitative probabilities.”—JMK.

Texas’ “top ten percenters” GPAs > than those with SATs 200-300 points higher.

Hackneyed but none the less

true: LEADERS SEE CUPS AS “HALF

FULL.”

BZ: “I am a … Dispenser of Enthusiasm!”

“A leader is a dealer in hope.”

Napoleon

(+TP’s writing room pics)

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!)

Think about It!?

Innovation = Reaction to the Prototype

Michael Schrage

“Sony Electronics has a well-earned reputation for persistence. The company’s first entry into a

new field often isn’t very good. But,

as it has shown in laptops, Sony will keep trying until it gets

it right.”Business Week (5/01)

“If Microsoft is good at anything, it’s avoiding the trap of worrying about criticism. Microsoft fails constantly.

They’re eviscerated in public for lousy

products. Yet they persist, through version after version, until they get

something good enough. Then they leverage the power they’ve gained in

other markets to enforce their standard.”Seth Godin, Zooming

He who has the

quickest O.O.D.A. Loops* wins!

*Observe. Orient. Decide. Act. / Col. John Boyd

“You can’t be a serious innovator unless and until you are ready,

willing and able to seriously play. ‘Serious play’ is not an oxymoron;

it is the essence of innovation.”

Michael Schrage, Serious Play

The “Gus Imperative”!

Duct Tape Rules!

“Andrew Higgins, who built landing craft in WWII, refused to hire graduates of

engineering schools. He believed that they only teach you what you can’t do in engineering

school. He started off with 20 employees, and by the middle of the war had 30,000 working for him. He turned out 20,000 landing craft. D.D.

Eisenhower told me, ‘Andrew Higgins won the war for us. He did it without engineers.’ ”

Stephen Ambrose/Fast Company

P.S. …

Mark McCormack: 5,000 miles for a 5

min. meeting!

Scaled De-Compression, Rule Of …

5 days “on the

ground” = 5 weeks (MONTHS?) in absentia

Danger: S.I.O. (Strategic

Initiative Overload)

JackWorld/1@T: (1) Neutron Jack. (Banish bureaucracy.) (2) “1, 2 or out” Jack. (Lead or leave.) (3)

“Workout” Jack. (Empowerment,

GE style.) (4) 6-Sigma Jack. (5)

Internet Jack. (Throughout)

TALENT JACK!

Ridin’ with Roger: “What have you done to

DRAMATICALLY IMPROVE quality in the

last 90 days?”

2. Work that Matters: WOW

Projects/ BHAGs.

“Let’s make a dent in the universe.”

Steve Jobs

“Intimidate their [users] imaginations”

… “Where’s the revolution?” –J Allard,

on the Xbox

Language matters! Wow! BHAG! “Takes

your breath away!”

1st Law Mktg Physics: OVERT BENEFIT (Focus: 1 or 2 > 3 or 4/“One Great Thing.”

Source #1: Personal Passion)

2ND Law: REAL REASON TO BELIEVE (Stand & Deliver!)

3RD Law: DRAMATIC DIFFERENCE (Execs Don’t Get It: “intent to purchase”—100%; “unique”—0% to

5%)

Source: Jump Start Your Business Brain, Doug Hall

Joe J. Jones Joe J. Jones 1942 – 2001 1942 – 2001

HE WOULDA DONE SOME HE WOULDA DONE SOME

REALLY COOL STUFF REALLY COOL STUFF

BUT …BUT …

HIS BOSS WOULDN’T LET HIM! HIS BOSS WOULDN’T LET HIM!

The greatest dangerfor most of us

is not that our aim istoo high

and we miss it,but that it is

too lowand we reach it.

Michelangelo

If you are not prepared to be fired over your

beliefs … you are working on the

wrong project - TP

Charles Handy on the “alchemists”: “Passion was what drove these people, passion for their product or their cause. If you

care enough, you will find out what you need to know. Or you will experiment and not worry if the experiment goes wrong. Passion as the

secret to learning is an odd secret to propose, but I believe that it works at all levels and at all ages. Sadly, passion is not a word often heard in the elephant organizations, nor in schools,

where it can seem disruptive.”

Characteristics of the “Also rans”*

“Minimize risk”“Respect the chain of

command”“Support the boss”

“Make budget”

*Fortune, article on “Most Admired Global Corporations”

Goal: Drive out fear. (Deming et al.)

Solution: Passion (alone?) drives out fear. Source: Equinox Manifesto (12.01)

3. Demo Mania.

Demos! Heroes! Stories!

L.B.I.W.D. (Leading

By Inducing Weird Demos)

MBSA!*

*Managing By Story-ing Around/David Armstrong

“A key—perhaps the key—to leadership is the effective

communication of a story.”

Howard Gardner Leading Minds: An Anatomy of Leadership

“Early in my career in the law I learned

that … he who has the best story

wins.”JQ Adams/A Hopkins to T Joadson/M Freeman

G.M. … V.C. … W.P. …

M.B.S.A.

Each VP a V.C.: Portfolio of high-risk investments in

people & ideas from all across the company.

“Basically [Omnicom’s John] Wren makes aggressive bets on entrepreneurs and

gives them tremendous autonomy, on the assumption that the risk-taking will pay off

in new ideas, connections, businesses, and, yes, revenues and profits. …

‘Omnicom operates like a venture-capital firm,’ says Sir Martin

Sorrell [of WPP].”

Fortune (09.17.2001)

Boss Mantra #1: “So … tell me a story.”

4. Web World = ALL: The

“Friction-free Enterprise.”

108 X 5vs.

8 X 1= 540 vs. 8 (-98.5%)

N.W.O./Holy Moly:

Unemployment up 2% … Real wage growth highest since 60s … Productivity soaring.

Source: BW/02.11.2002

Dell’s OptiPlex Facility

Big Job: 6 to 8 hours.(80,000 per day)

Parts Inventory: 100 square feet.

Cisco!

90% of $20B (=$50M/day)Annual savings in service

and support from customer self-management: $550M (P.S.: C.Sat e >> C.Sat h)

The Real “News”: X1,000,000

TowTruckNet.com

WebWorld = Everything

Web as a way to run your business’s innardsWeb as connector for your entire supply-demand chain Web as “spider’s web” which re-conceives the industry

Web/B2B 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 LifeWeb = Everything (P.D. to after-sales)

Web forces you to focus on what you do bestWeb as entrée, at any size, to World’s Best at Everything

as next door neighbor

Message: eCommerce 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 B2B or

Internet-supply chain strategy in a low-trust,

bottlenecked-communication, 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 freeInternet intense = Do it all via the Web

Knowledge based = Open accessTime and location free = Whenever, wherever

“Instantly” responsive = Speed demonsCustomer centric = Customer calls the shotsMass 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)

CGE&Y (Paul Cole): “Pleasant

Transaction” vs. “Systemic Opportunity.” “Better job

of what we do today” vs. “Re-think overall

enterprise strategy.”

Suppose, just suppose, that the Web is a new world we’re just beginning to inhabit. We’re like the earlier European settlers in the United States, living on the

edge of the forest. We don’t know what’s there and we don’t know exactly what we need to do to find out: Do we pack mountain climbing gear, desert wear, canoes, or all three? Of course while the settlers may not have

known what the geography of the new world was going to be, they at least knew that there was a geography. The Web, on the other hand, has no

geography, no landscape. It has no distance. It has nothing natural in it. It has few rules of behavior and fewer lines of authority. Common sense doesn’t hold

here, and uncommon sense hasn’t yet emerged.” David Weinberger, Small Pieces Loosely Joined

“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!

Q: Is that all there is?

A: Quite possibly.

“Roche’s New Scientific Method”—

Fast Company. And? X-Functional Teams (NO STOVEPIPES!). “Fail fast.” “The only way to embrace a technological revolution, Roche has discovered, is to unleash an organizational revolution.”

5. “Beautiful” Systems.

Fred S.’s “mediocre” thesis. Herb K.’s

napkin.

Read It Closely: “We don’t sell

insurance anymore. We sell speed.”

Peter Lewis, Progressive

Great design = One-page

business plan (Jim Horan)

K.I.S.S.: Gordon Bell (VAX

daddy): 500/50. Chas.

Wang (CA): Behind schedule?

Cut least productive 25%.

“Most companies would do more business on the Internet if they

fired their entire marketing department and replaced it with

people who could produce interactive content that actually made it easier for users to buy.”

Jakob Nielsen, Nielsen Norman Group

SWA

Simple!!!!!!!!!!!! (customers call because the process is so easy they can’t

believe they’re done)

30% of revenues directly from site (vs. 6% for others)

Source: Business Week (09.00)

K.I.S.S./Jack “1@T” Welch: (1)

Neutron Jack. (Banish

bureaucracy.) (2) “1, 2 or out” Jack. (Lead or leave.) (3)

“Workout” Jack. (Empowerment,

GE style.) (4) 6-Sigma Jack. (5)

Internet Jack. (Throughout)

TALENT JACK!

Systems: Must have. Must

hate. / Must design. Must un-

design.

Mgt. Team

includes … EVP (S.O.U.B.)

Executive Vice President, Stomping Out Unnecessary Bullshit

Revised wisdom: Forget “best practice” (stultifying).

Concentrate on: Driving out “worst practice.”

Source: Equinox Manifesto (12.01)

“Ninety percent of what we call ‘management’ consists of making it difficult for people to

get things done.”—P.D.

6. “Departments” as Heroes: New Bases for Value

Added.

The Big Day!

09.11.2000: HP bids

$18,000,000,000for

PricewaterhouseCoopersconsulting business!

“These days, building the best server isn’t enough. That’s the

price of entry.”

Ann Livermore, Hewlett-Packard

“We want to be the air traffic

controllers of electrons.”

Bob Nardelli, GE Power Systems

“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)

Keep In Mind: Customer Satisfaction

versus Customer Success

7. Talent: The 25/8/53 Obsession.

25/8/53*(*Damn 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

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)

“We believe companies can increase their market cap 50 percent in 3 years. Steve

Macadam at Georgia-Pacific changed 20 of his 40 box plant managers to put

more talented, higher paid managers in charge. He increased

profitability from $25 million to $80 million in 2 years.”

Ed Michaels, War for Talent (05.17.00)

“Top performing companies are two to four times more likely

than the rest to pay what it takes to prevent losing

top performers.”

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.

8. Automatic Renewal:

The “HSDE.”

Saviors-in-Waiting

Disgruntled CustomersUpstart CompetitorsRogue EmployeesFringe Suppliers

Wayne Burkan, Wide Angle Vision

“The corporate faith in big industrial mergers [2/3rds of which

fail] is a vestige of the spats-and-spittoons era.” —James Suroweicki, The New Yorker (More, a Buffett annual-report quote: “Many managers were overexposed in

impressionable childhood years to the story in which the imprisoned handsome prince is released from a toad’s body by a kiss from the beautiful princess.”)

CUSTOMERS: “Future-defining 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)

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

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

Leaders know … WE BECOME WHO

WE HANG WITH!

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

9. Cherish FAILURES.

The Gales of Creative Destruction

+29M = -44M + 73M

+4M = +4M - 0M

“Active mutators in placid times tend to die off. They

are selected against. Reluctant mutators in

quickly changing times are also selected against.”

Carl Sagan & Ann Druyan, Shadows of Forgotten Ancestors

“The secret of fast progress is

inefficiency, fast and furious and numerous

failures.”Kevin Kelly

“Reward excellent

failures. Punish mediocre successes.”

Phil Daniels, Sydney exec (and, de facto, Jack)

Sam’s

Secret #1!

“Fail faster. Succeed sooner.”

David Kelley/IDEO

“Fail . Forward.

Fast.”High Tech CEO, Pennsylvania

Read This!

Richard Farson & Ralph Keyes: Whoever Makes the Most

Mistakes Wins: The Paradox of Innovation

10. Talent II: The “Check-out

Clerks Test.”

New World of Work

< 1 in 10 F500#1: Manpower Inc.

Freelancers/I.C.: 16M-25MTemps: 3M (incl. CEOs & lawyers)

Microbusinesses: 12M-27MTotal: 31M-55M

Source: Daniel Pink, Free Agent Nation

Leaders-Teachers Do Not “Transform People”!

Instead leaders-mentors-teachers (1) provide a context which is marked by (2) access to a luxuriant portfolio of meaningful opportunities (projects) which

(3) allow people to fully (and safely, mostly—caveat: “they”

don’t engage unless they’re “mad about something”) express their innate curiosity and (4) engage in a vigorous

discovery voyage (alone and in small teams, assisted by an

extensive self-constructed network) by which those people (5) go to-create places they (and their mentors-teachers-

leaders) had never dreamed existed—and then the leaders-mentors-teachers (6) applaud like hell, stage

“photo-ops,” and ring the church bells 100 times to commemorate the bravery of their

“followers’ ” explorations!

Minimum New Work SurvivalSkillsKit2001

MasteryRolodex Obsession (vert. to horiz. “loyalty”)

Entrepreneurial InstinctCEO/Leader/Businessperson/Closer

Mistress of ImprovSense of Humor

Intense Appetite for TechnologyGroveling Before the Young

Embracing “Marketing”Passion for Renewal

“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

Brand You, Big Time!

I AM AN ARMY OF

ONE

11. “A Place Worth Working

For.”

MantraM3

Talent = Brand

What’s your company’s …

EVP?Employee Value Proposition, per Ed

Michaels et al., The War for Talent

EVP = Challenge, professional growth, respect, satisfaction, opportunity, reward

Source: Ed Michaels et al., The War for Talent

“Soft” Is “Hard”

- ISOE

Message: Leadership is all about love! [Passion, Enthusiasms, Appetite for Life,

Engagement, Commitment, Great Causes & Determination to Make a

Damn Difference, Shared Adventures, Bizarre Failures, Growth, Insatiable

Appetite for Change.] [Otherwise, why bother? Just read Dilbert. TP’s final words: CYNICISM SUCKS.]

G.H.: “Create a

‘cause,’ not a ‘business.’ ”

1. An “Action Culture.”2. Work that Matters: WOW Projects/BHAGS.3. Demo Mania.4. Web World = ALL: The “Friction-free Enterprise.5. “Beautiful” Systems.6. “Departments” as Heroes: New Bases for Value Added.7. Talent: The 25/8/53 Obsession.8. Automatic Renewal: The “HSDE.”9. Cherish FAILURES.10. Talent II: The “Check-out Clerks Test.”11. Brand Inside: “A Place Worth Working For.”