LONG/ANNOTATEDLONG/ANNOTATED

Tom Peters’Tom Peters’

Re-ImagineRe-Imagine

EXCELLENCEEXCELLENCE!!2015 Distinguished Leadership and Innovation Conference2015 Distinguished Leadership and Innovation Conference

Port of Spain/13 April 2015Port of Spain/13 April 2015

(Slides at tompeters.com; and our fully annotated 23-part (Slides at tompeters.com; and our fully annotated 23-part Master Compendium at excellencenow.com)Master Compendium at excellencenow.com)

FIRST THING FIRST THING BEFORE FIRST BEFORE FIRST

THING: THING: CONRAD’S CONRAD’S

COMMANDMENTCOMMANDMENT

CONRADCONRAD HILTONHILTON, at a gala celebrating, at a gala celebrating his career, was called to the podium and his career, was called to the podium and

asked,asked, “What were the most important

lessons you learned in your long and

distinguished career?” His answer …His answer …

““Remember Remember to tuck the to tuck the

shower curtain shower curtain inside the inside the bathtubbathtub.”.”

They come for “location, location, They come for “location, location,

location.” They … location.” They … COME COME BACKBACK … because of the tucked- … because of the tucked-

in shower curtain. in shower curtain.

(And [(And [ALLALL] the profit is made on ] the profit is made on

the return visits and recommendations the return visits and recommendations to others.)to others.)

““COSTCO FIGURED OUT COSTCO FIGURED OUT

THE THE BIGBIG,, SIMPLESIMPLE THINGS THINGS

AND AND EXECUTEDEXECUTED WITH TOTAL WITH TOTAL

FANATICISMFANATICISM.”.”

—Charles Munger, Berkshire Hathaway—Charles Munger, Berkshire Hathaway

““Amateurs talk Amateurs talk about strategy. about strategy.

Professionals talk Professionals talk about logistics.”about logistics.”

——Omar Bradley, commander of American troops/D-DayOmar Bradley, commander of American troops/D-Day

EEXXCELLENCECELLENCE

X4X4

Excellence1982: The Bedrock “EiExcellence1982: The Bedrock “Eigght Basics”ht Basics”

1. A Bias for 1. A Bias for ActionAction2. Close to the 2. Close to the CustomerCustomer3. 3. AutonomAutonomyy and and EntreEntreppreneurshireneurshipp4. Productivity Through 4. Productivity Through PeoPeopplele5. 5. Hands OnHands On, , Value-DrivenValue-Driven6. 6. Stick toStick to the Knitting the Knitting7. 7. SimSimpplele Form, Form, LeanLean Staff Staff8. Simultaneous 8. Simultaneous Loose-TightLoose-Tight PropertiesProperties

ActionActionPeoplePeople

CustomersCustomersValuesValues

In Search of ExcellenceIn Search of Excellence in … in … 44 words.words.

(No kidding.)(No kidding.)

Excellence.2015: The Bedrock “Eleven Basics”

1. A Bias for 1. A Bias for Action/ExecutionAction/Execution4. 4. PeoPeopplele First/First/Training Training Mania Mania 2. Symbiosis With the 2. Symbiosis With the CustomerCustomer3. 3. AutonomAutonomyy and and EntreEntreppreneurshireneurshipp5. 5. Hands OnHands On, , Value-DrivenValue-Driven6. 6. Stick toStick to the Knitting the Knitting7. 7. SimSimpplele Form, Form, LeanLean Staff, Staff, CollaborationCollaboration Imperative Imperative8. Simultaneous 8. Simultaneous Loose-Tight Loose-Tight PropertiesProperties9. 9. DesiDesiggnn Fanaticism Fanaticism10. 10. TechnoloTechnologygy Unlimited Unlimited11. 11. SSppeedeed Demons Demons

6 Words:6 Words:But a But a

MouthfulMouthful

Hard is Soft.Hard is Soft.Soft is Hard.Soft is Hard.

The truly “hard stuff”—which can’t be faked or The truly “hard stuff”—which can’t be faked or exaggerated—are the relationships with, for exaggerated—are the relationships with, for instance, our customers and our own people.instance, our customers and our own people.

“‘“‘Hard’ is ‘soft.’Hard’ is ‘soft.’‘‘Soft’ is ‘hard.’”Soft’ is ‘hard.’”Mantra #1 from Mantra #1 from In Search of EXCELLENCE.In Search of EXCELLENCE.

X1X1

““Mr. Watson, how Mr. Watson, how long does it take to long does it take to

achieve excellence?” achieve excellence?”

““One One minute. …”minute. …”

““One minute. You One minute. You make up your mind make up your mind

to never again to never again consciously do consciously do

something that issomething that is not excellent.”not excellent.”

EXCELLENCE is EXCELLENCE is a a PERSONALPERSONAL choice … choice … NOTNOT an institutional an institutional

choice!choice!

X5X5

EXCELLENCE is EXCELLENCE is notnot a “long-term” a “long-term” "aspiration.”"aspiration.”

EXCELLENCE EXCELLENCE isis the ultimate short- the ultimate short-term strategy. EXCELLENCE term strategy. EXCELLENCE isis … …

THETHE

NEXTNEXT 55 MINUTESMINUTES..**

(*Or (*Or NOTNOT.).)

EXCELLENCE is not an "aspiration." EXCELLENCE is not an "aspiration." EXCELLENCE is … THE NEXT FIVE MINUTES.EXCELLENCE is … THE NEXT FIVE MINUTES.

EXCELLENCE is your next conversation.EXCELLENCE is your next conversation.Or not.EXCELLENCE is your next meeting.EXCELLENCE is your next meeting.Or not.EXCELLENCE is shutting up and listening—really listening.EXCELLENCE is shutting up and listening—really listening.Or not.EXCELLENCE is your next customer contact.EXCELLENCE is your next customer contact.Or not.EXCELLENCE is saying “Thank you” for something “small.”EXCELLENCE is saying “Thank you” for something “small.”Or not.EXCELLENCE is the next time you shoulder responsibility and apologize.EXCELLENCE is the next time you shoulder responsibility and apologize.Or not.EXCELLENCE is waaay over-reacting to a screw-up.EXCELLENCE is waaay over-reacting to a screw-up.Or not.EXCELLENCE is the flowers you brought to work today.EXCELLENCE is the flowers you brought to work today.Or not.EXCELLENCE is lending a hand to an “outsider” who’s fallen behind EXCELLENCE is lending a hand to an “outsider” who’s fallen behind schedule.schedule.Or not.EXCELLENCE is bothering to learn the way folks in finance (or IS or HR) EXCELLENCE is bothering to learn the way folks in finance (or IS or HR) think.think.Or not.EXCELLENCE is waaay “over”-preparing for a 3-minute presentation.EXCELLENCE is waaay “over”-preparing for a 3-minute presentation.Or not.EXCELLENCE is turning “insignificant” tasks into models of … EXCELLENCE. EXCELLENCE is turning “insignificant” tasks into models of … EXCELLENCE. Or not.

Why Why Not?Not?

“Why in the World did you

go to Siberia?”

A half-dozen years ago I went to A half-dozen years ago I went to Novosibirsk, Siberia, to give a seminar. Novosibirsk, Siberia, to give a seminar. (Novosibirsk, center of Soviet scientific (Novosibirsk, center of Soviet scientific excellence, was now confronting the global excellence, was now confronting the global economy—and looking for a new direction.) economy—and looking for a new direction.)

The unusual setting caused me to go back The unusual setting caused me to go back to “first principles” in my thinking about to “first principles” in my thinking about enterprise.enterprise.

I asked myself, for starters …I asked myself, for starters …

“WHAT’S THE POINT?”“WHAT’S THE POINT?”

EnterpriseEnterprise* (*at its best):* (*at its best): An An emotionalemotional, , vitalvital, , innovativeinnovative, , jojoyyfulful, , creativecreative, , entreentreppreneurialreneurial endeavor that elicits endeavor that elicits maximum maximum

concerted humanconcerted human potential in thepotential in the wholehearted pursuit of wholehearted pursuit of EXCELLENCE inEXCELLENCE in serviceservice of others.** of others.**

**Employees, Customers, Suppliers, Communities, Owners, Temporary partners**Employees, Customers, Suppliers, Communities, Owners, Temporary partners

Enterprise, as I note … AT ITS BEST.Enterprise, as I note … AT ITS BEST.(Obviously not always achieved—or, alas, even (Obviously not always achieved—or, alas, even aspired to.) aspired to.)

On the other hand …On the other hand …

if this or something very if this or something very much like it is much like it is notnot the aim the aim … then what … then what isis the point? the point?

Think about it.Think about it.Please.Please.

(Photo is me and my interpreter, who turned out to (Photo is me and my interpreter, who turned out to have an economics PhD from the University of have an economics PhD from the University of Maryland, on stage in Novosibirsk.)Maryland, on stage in Novosibirsk.)

““It may sound radical, unconventional, and It may sound radical, unconventional, and bordering on being a crazy business idea. bordering on being a crazy business idea. However— as ridiculous as it sounds—joy is However— as ridiculous as it sounds—joy is

the core belief of our workplace. the core belief of our workplace.

JoyJoy is the reason my company, is the reason my company,

Menlo Innovations, a customer software Menlo Innovations, a customer software design and development firm in Ann Arbor, design and development firm in Ann Arbor,

exists. It defines what we do and how we do it. exists. It defines what we do and how we do it. It is the single shared belief of our entire It is the single shared belief of our entire

team.”team.”

——Richard Sheridan, Richard Sheridan, Joy, Inc.: Joy, Inc.: How We Built a Workplace People LoveHow We Built a Workplace People Love

SERVICESERVICE..PERIODPERIOD..

ORGANIZATIONS ORGANIZATIONS EXISTEXIST TO TO SERVESERVE. .

PERIOD.PERIOD.

LEADERS LEADERS LIVELIVE TO TO SERVESERVE. PERIOD.. PERIOD.

PEOPLEPEOPLE PEOPLEPEOPLE PEOPLEPEOPLE

PEOPLEPEOPLE

People:People:1/4,0961/4,096

4,096 slides in my 23-part 4,096 slides in my 23-part MOAP/“Mother Of All Presentations,” MOAP/“Mother Of All Presentations,” three years in the making. ONE slide three years in the making. ONE slide by definition had to come first. This by definition had to come first. This one, a quote from the inimitable one, a quote from the inimitable

Richard Branson, was Richard Branson, was #1#1 … …

““Business has to Business has to give people give people enriching, enriching,

rewarding lives …rewarding lives …

1/4,096: excellencenow.com1/4,096: excellencenow.com

““Business has to give people enriching, Business has to give people enriching,

rewarding lives … rewarding lives … or it's or it's simsimppllyy not not

worth worth doindoing.”g.”

——Richard BransonRichard Branson

““You have to You have to treat your treat your

employees like employees like customers.”customers.” —Herb —Herb

Kelleher, upon being asked his “secret to success”Kelleher, upon being asked his “secret to success”

Source: Joe Nocera, Source: Joe Nocera, NYTNYT, “Parting Words of an Airline Pioneer,” , “Parting Words of an Airline Pioneer,” on the occasion of Herb Kelleher’s retirement after 37 years at on the occasion of Herb Kelleher’s retirement after 37 years at

Southwest Airlines Southwest Airlines (SWA’s pilots union took out a full-page ad in (SWA’s pilots union took out a full-page ad in USA USA TodayToday

thanking HK for all he had done) thanking HK for all he had done) ; across the way in Dallas, American ; across the way in Dallas, American Airlines’ pilots were Airlines’ pilots were picketingpicketing AA’s Annual Meeting)AA’s Annual Meeting)

EMPLOYEES FIRST, CUSTOMERS SECOND:EMPLOYEES FIRST, CUSTOMERS SECOND:Turning Conventional Management Upside Turning Conventional Management Upside

DownDownVineet Nayar/CEO/HCL TechnologiesVineet Nayar/CEO/HCL Technologies

““hostmanship”/hostmanship”/““consideration consideration

renovation”renovation”

““The path to a The path to a hostmanshihostmanshipp culture paradoxically does not go culture paradoxically does not go through the guest. In fact it wouldn’t be totally wrong to say that the guest has through the guest. In fact it wouldn’t be totally wrong to say that the guest has nothing to do with it.nothing to do with it. True hostmanship leaders focus on their employees. What True hostmanship leaders focus on their employees. What drives exceptionalism is finding the right people and getting them to love their drives exceptionalism is finding the right people and getting them to love their work and see it as a passion. ... The guest comes into the picture only when you work and see it as a passion. ... The guest comes into the picture only when you are ready to ask, ‘are ready to ask, ‘Would you prefer to stay at a hotel where the staff love their Would you prefer to stay at a hotel where the staff love their

work or where management has made customers its highest priority?’”work or where management has made customers its highest priority?’” ““We We went throuwent througgh the hotel and made ah the hotel and made a ... ... ‘‘consideration renovation.consideration renovation.’ ’ Instead of Instead of redoinredoingg bathrooms, dinin bathrooms, dining g rooms, and rooms, and gguest rooms, we uest rooms, we ggave emave empploloyyees new ees new

uniforms, bouuniforms, bougght flowers and fruit, and ht flowers and fruit, and chanchangged colors.ed colors. Our focus was totallOur focus was totallyy on on the staff.the staff. TheTheyy were the ones we wanted were the ones we wanted to make hato make happy.ppy. We wanted them to wake up everWe wanted them to wake up everyy mornin morningg excited excited

about a new daabout a new dayy at work at work.” .” —Jan Gunnarsson and Olle Blohm, —Jan Gunnarsson and Olle Blohm, Hostmanship: Hostmanship: The Art of Making People Feel WelcomeThe Art of Making People Feel Welcome..

“ … “ … The guest comes into The guest comes into the picture only when you the picture only when you are ready to ask, are ready to ask, ‘‘Would Would yyou ou pprefer to starefer to stayy at a at a

hotel where the staff love hotel where the staff love their work or where their work or where

manamanaggement has made ement has made customers its hicustomers its higghest hest

pprioritriority?’y?’””

Rocket Science. Rocket Science. NOT.NOT.

““If you want staff to If you want staff to give great service, give great service, give great service give great service

to staff.” to staff.” ——Ari Weinzweig, Zingerman’s Ari Weinzweig, Zingerman’s

Source: Source: Small Giants: Companies That Choose to Be Small Giants: Companies That Choose to Be Great Instead of Big, Great Instead of Big, Bo BurlinghamBo Burlingham

EXCELLENT EXCELLENT customer experiencecustomer experiencedepends … depends … entirely …entirely …

onon EXCELLENT EXCELLENT employee experience!employee experience!

If you want to WOW your If you want to WOW your

customers, customers, FIRSTFIRST you you

must WOW those whomust WOW those who WOW the customers!WOW the customers!

““Contrary to conventional Contrary to conventional corporate thinking, corporate thinking,

treating retail workers treating retail workers much better may make much better may make

everyone (including their everyone (including their employers) much richer.”employers) much richer.”

Source: Source: The Good Jobs StrategyThe Good Jobs Strategy, by M.I.T. professor Zeynep Ton., by M.I.T. professor Zeynep Ton.

1996-2014/12 companies every year/ 1996-2014/12 companies every year/ 341,567 new jobs/+172%:341,567 new jobs/+172%:

PublixPublixWhole FoodsWhole FoodsWegmansWegmansNordstromNordstromCisco SystemsCisco Systems

MarriottMarriottREIREIGoldman SachsGoldman Sachs

Four SeasonsFour SeasonsSAS InstituteSAS InstituteW.L. GoreW.L. GoreTDIndustriesTDIndustriesSource: Source: FortuneFortune/ “The 100 Best Companies to Work / “The 100 Best Companies to Work For”/0315.15For”/0315.15

Note: Fully Note: Fully 7/12ths7/12ths of the of the

best of the 100 best companies to work for in best of the 100 best companies to work for in the USA are in so-called “low wage” the USA are in so-called “low wage” components of the service industry. (So don’t components of the service industry. (So don’t tell me, as many have, “You can only do this tell me, as many have, “You can only do this sort of thing at the likes of Google.” sort of thing at the likes of Google.” Rubbish!)Rubbish!)

““In a world where customers wake up In a world where customers wake up every morning asking, ‘What’s new, every morning asking, ‘What’s new, what’s different, what’s amazing?’ what’s different, what’s amazing?’

success desuccess deppends on a ends on a comcomppananyy’s abilit’s abilityy to unleash to unleash initiative, imainitiative, imaggination and ination and ppassion of emassion of empploloyyees at all ees at all

levelslevels —and this can only happen if all —and this can only happen if all those folks are connected heart and soul those folks are connected heart and soul

to their work [their ‘calling’], their to their work [their ‘calling’], their company and their mission.”company and their mission.” —John Mackey and —John Mackey and

Raj Sisoda,Raj Sisoda, Conscious Capitalism: Conscious Capitalism: Liberating the Heroic Spirit of BusinessLiberating the Heroic Spirit of Business

Profit Through Putting People First Business Book ClubProfit Through Putting People First Business Book Club

Nice Companies Finish First: Why Cutthroat Management Is Over—and Nice Companies Finish First: Why Cutthroat Management Is Over—and Collaboration Is In, Collaboration Is In, by Peter Shankman with Karen Kellyby Peter Shankman with Karen KellyUncontainable: How Passion, Commitment, and Conscious Capitalism Built a Business Where Everyone Uncontainable: How Passion, Commitment, and Conscious Capitalism Built a Business Where Everyone Thrives, Thrives, by Kip Tindell, CEO Container Storeby Kip Tindell, CEO Container Store

Conscious Capitalism: Liberating the Heroic Spirit of Business, Conscious Capitalism: Liberating the Heroic Spirit of Business, by John by John Mackey, CEO Whole Foods, and Raj SisodiaMackey, CEO Whole Foods, and Raj SisodiaFirms of Endearment: How World-Class Companies Profit from Passion and Firms of Endearment: How World-Class Companies Profit from Passion and Purpose, Purpose, by Raj Sisodia, Jag Sheth, and David Wolfeby Raj Sisodia, Jag Sheth, and David WolfeThe Good Jobs Strategy: How the Smartest Companies Invest in Employees to The Good Jobs Strategy: How the Smartest Companies Invest in Employees to Lower Costs and Boost Profits, Lower Costs and Boost Profits, by Zynep Ton, MITby Zynep Ton, MITJoy, Inc.: How We Built a Workplace People Love, Joy, Inc.: How We Built a Workplace People Love, by Richard Sheridan, by Richard Sheridan, CEO Menlo InnovationsCEO Menlo InnovationsEmployees First, Customers Second: Turning Conventional Management Employees First, Customers Second: Turning Conventional Management Upside Down, Upside Down, by Vineet Nayar, CEO, HCL Technologiesby Vineet Nayar, CEO, HCL TechnologiesThe Customer Comes Second: Put Your People First and Watch ’Em Kick Butt, The Customer Comes Second: Put Your People First and Watch ’Em Kick Butt, by Hal Rosenbluth, former CEO, Rosenbluth Internationalby Hal Rosenbluth, former CEO, Rosenbluth InternationalIt’s Your Ship: Management Techniques from the Best Damn Ship in the Navy, It’s Your Ship: Management Techniques from the Best Damn Ship in the Navy, by Mike Abrashoff, former commander, USS Benfoldby Mike Abrashoff, former commander, USS BenfoldTurn This Ship Around; How to Create Leadership at Every Level, Turn This Ship Around; How to Create Leadership at Every Level, by L. David Marquet, former commander, SSN Sante Feby L. David Marquet, former commander, SSN Sante FeSmSmall Giants: Companies That Choose to Be Great Instead of Big, all Giants: Companies That Choose to Be Great Instead of Big, by Bo Burlinghamby Bo BurlinghamHidden Champions: Success Strategies of Unknown World Market LeadersHidden Champions: Success Strategies of Unknown World Market Leaders, by Hermann Simon, by Hermann SimonRetail Superstars: Inside the 25 Best Independent Stores in AmericaRetail Superstars: Inside the 25 Best Independent Stores in America, , by George Whalinby George Whalin

Joy at Work: A Revolutionary Approach to Fun on the Job, Joy at Work: A Revolutionary Approach to Fun on the Job, by Dennis Bakke, by Dennis Bakke, former CEO, AES Corporationformer CEO, AES CorporationThe Dream Manager, The Dream Manager, by Matthew Kellyby Matthew KellyThe Soft Edge: Where Great Companies Find Lasting Success, The Soft Edge: Where Great Companies Find Lasting Success, by Rich by Rich Karlgaard, publisher, ForbesKarlgaard, publisher, ForbesDelivering Happiness: A Path to ProfitsDelivering Happiness: A Path to Profits, by Tony Hseif, Zappos, by Tony Hseif, ZapposCamellia: A Very Different CompanyCamellia: A Very Different CompanyFans, Not Customers: How to Create Growth Companies in a No Growth WorldFans, Not Customers: How to Create Growth Companies in a No Growth World, by Vernon Hill, by Vernon HillLike a Virgin: Secrets They Won’t Teach You at Business SchoolLike a Virgin: Secrets They Won’t Teach You at Business School, by Richard Branson , by Richard Branson

!!

““YOUR YOUR CUSTOMERS CUSTOMERS

WILL NEVER BE WILL NEVER BE ANY HAPPIER ANY HAPPIER THAN YOUR THAN YOUR

EMPLOYEES.”EMPLOYEES.”

““What employees experience, What employees experience, Customers will. The best marketing is Customers will. The best marketing is

happy, engaged employees.happy, engaged employees. Your Your customers will customers will never be any never be any

happier than your happier than your employees.”employees.” —John DiJulius, —John DiJulius,

The Customer Service Revolution: Overthrow Conventional The Customer Service Revolution: Overthrow Conventional Business, Inspire Employees, and Change the WorldBusiness, Inspire Employees, and Change the World

I’m tempted to use this one-liner as the only I’m tempted to use this one-liner as the only slide in a presentation. It comes awfully close slide in a presentation. It comes awfully close to being “all that needs to be said.”to being “all that needs to be said.”

THE DREAM MANAGERTHE DREAM MANAGER — by Matthew Kelly— by Matthew Kelly

““AN ORGANIZATION CAN ONLY BECOME THE-AN ORGANIZATION CAN ONLY BECOME THE-BEST-VERSION-OF-ITSELF TO THE EXTENT THAT BEST-VERSION-OF-ITSELF TO THE EXTENT THAT THE PEOPLE WHO DRIVE THAT ORGANIZATION THE PEOPLE WHO DRIVE THAT ORGANIZATION ARE STRIVING TO BECOME BETTER-VERSIONS-ARE STRIVING TO BECOME BETTER-VERSIONS-OF-THEMSELVES.”OF-THEMSELVES.” “A company’s purpose is to become “A company’s purpose is to become

the-best-version-of-itself. The question is: What is an the-best-version-of-itself. The question is: What is an employee’s purpose? Most would say, ‘to help the company employee’s purpose? Most would say, ‘to help the company

achieve its purpose’—achieve its purpose’—BUT THEY WOULD BE WRONGBUT THEY WOULD BE WRONG. . That is certainly part of the employee’s role, but an employee’s That is certainly part of the employee’s role, but an employee’s primary purpose is to become the-best-version-of-himself or –primary purpose is to become the-best-version-of-himself or –

herself. … When a company forgets that it exists to serve herself. … When a company forgets that it exists to serve

customers, it quickly goes out of business.customers, it quickly goes out of business. OUR OUR EMPLOYEES AREEMPLOYEES ARE

OUR FIRST CUSTOMERS, AND OUR MOST OUR FIRST CUSTOMERS, AND OUR MOST IMPORTANT CUSTOMERS.”IMPORTANT CUSTOMERS.”

The The 7-Step7-StepMethodMethod

7 Steps to Sustaining Success7 Steps to Sustaining Success

You take care of the people. You take care of the people. The people take care of the service. The people take care of the service. The service takes care of the customer.The service takes care of the customer.The customer takes care of the profit. The customer takes care of the profit. The profit takes care of the re-investment.The profit takes care of the re-investment.The re-investment takes care of the re-invention. The re-investment takes care of the re-invention. The re-invention takes care of the future.The re-invention takes care of the future.(And at every step the only measure is EXCELLENCE.)(And at every step the only measure is EXCELLENCE.)

7 Steps to Sustaining Success: And it starts with …7 Steps to Sustaining Success: And it starts with …

YouYou take take care of the care of the people. people.

Training = Training = InvestmentInvestment

#1#1!!

In the Army, In the Army, 33--star star ggeneralsenerals worry about worry about

training. In most training. In most businesses, it's a businesses, it's a

“ho-hum” mid-level “ho-hum” mid-level staff function.staff function.

Is your CTO/Chief Training Officer your top paid “C-level” job (other than CEO/COO)?Is your CTO/Chief Training Officer your top paid “C-level” job (other than CEO/COO)?If not, why not?If not, why not?Are your top trainers paid as much as your top marketers and engineers?Are your top trainers paid as much as your top marketers and engineers?If not, why not?If not, why not?

Are your training Are your training courses so good courses so good they make you … they make you … jump up & down jump up & down with glee?with glee?If not, why not?If not, why not?Randomly stop an employee in the hall: Can she/he meticulously describe her/his development plan for the next Randomly stop an employee in the hall: Can she/he meticulously describe her/his development plan for the next 12 months?12 months?If not, why not?If not, why not?Why is your world of business any different than the (competitive) world of rugby, football, opera, theater, Why is your world of business any different than the (competitive) world of rugby, football, opera, theater, the military?the military?If “people/talent first” and hyper-intense continuous training are laughably obviously for them, why not you? If “people/talent first” and hyper-intense continuous training are laughably obviously for them, why not you?

Someone at a seminar challenged me on this. Said it was Someone at a seminar challenged me on this. Said it was unrealistic and, by the way, what does “tingle” mean. I pointed unrealistic and, by the way, what does “tingle” mean. I pointed to my sophomore year in college. For us engineers, including to my sophomore year in college. For us engineers, including civil engineers like me, an introductory chemistry course was civil engineers like me, an introductory chemistry course was required. Most of us looked forward to it as the equivalent of a required. Most of us looked forward to it as the equivalent of a 4-month long root canal. We had two well known professors, 4-month long root canal. We had two well known professors, Michell Sienko and Robert Plane. They were scholars of the Michell Sienko and Robert Plane. They were scholars of the first order and simultaneously entertainers of the first order. first order and simultaneously entertainers of the first order. Bottom line: By the end of the course, probably half of us Bottom line: By the end of the course, probably half of us (among hundreds) wanted to be chemistry majors. Ten years (among hundreds) wanted to be chemistry majors. Ten years later the same sort of lightning struck courtesy an econ prof, later the same sort of lightning struck courtesy an econ prof, Keith Lumsden, at the Stanford business school. That is, there Keith Lumsden, at the Stanford business school. That is, there are great teachers and great courses—and I do not understand are great teachers and great courses—and I do not understand why the corporate world can’t develop or recruit the Sienkos why the corporate world can’t develop or recruit the Sienkos and Planes and Lumsdens. Billions are at stake—and great and Planes and Lumsdens. Billions are at stake—and great “profs” concocting great courses could do wonders to, say, “profs” concocting great courses could do wonders to, say, recruitment and retention and productivity. As to “tingle,” I’m recruitment and retention and productivity. As to “tingle,” I’m looking for something beyond “very good”; I’d accept looking for something beyond “very good”; I’d accept “earthshaking” or “mind-blowing” or, for sure …“earthshaking” or “mind-blowing” or, for sure …

““supercalifragilisticexpialidocious.”supercalifragilisticexpialidocious.”

Is your CTO/Chief Training Officer your top paid “C-level” job (other than CEO/COO)?Is your CTO/Chief Training Officer your top paid “C-level” job (other than CEO/COO)?If not, why not?If not, why not?

Are your top trainers paid as much as your top marketers and engineers?Are your top trainers paid as much as your top marketers and engineers?If not, why not?If not, why not?

Are your training courses so good they make you giggle and tingle?Are your training courses so good they make you giggle and tingle?If not, why not?If not, why not?

Randomly stop an employee Randomly stop an employee in the hall: in the hall: Can she/he Can she/he meticulouslmeticulouslyy describe describe her/his develoher/his developpment ment pplan lan for the next 12 monthsfor the next 12 months??If not, why not?If not, why not?

Why is your world of business any different than the (competitive) world of rugby, football, Why is your world of business any different than the (competitive) world of rugby, football, opera, theater, opera, theater, the military?the military?If “people/talent first” and hyper-intense continuous training are laughably obviously for If “people/talent first” and hyper-intense continuous training are laughably obviously for them, why not you? them, why not you?

And if the answer is “No” … And if the answer is “No” … her or her or his boss should be sternly his boss should be sternly reprimanded ASAPreprimanded ASAP.. (I would (I would say “fired”—but you might accuse me say “fired”—but you might accuse me of over-the-top-ism. Heaven forbid.)of over-the-top-ism. Heaven forbid.)

Boss & RPD:Boss & RPD: Your (boss) job is Your (boss) job is safer if every one of your safer if every one of your

team members is team members is committed to committed to

RPDRPD/Radical /Radical Personal Personal

DevelopmentDevelopment. Actively . Actively support one support one

and all!and all!

““The role of the Director is to The role of the Director is to create a space where the create a space where the

actors and actresses canactors and actresses can become more than become more than thetheyy’ve ever been ’ve ever been

before,before, more than themore than they’y’ve ve dreamed of beindreamed of being.”g.”

——Robert Altman, Oscar acceptance speechRobert Altman, Oscar acceptance speech

““I start with the I start with the premise that the premise that the

function of function of leadership is to leadership is to

pproduce more roduce more leadersleaders, not more , not more

followers.”followers.” ——Ralph NaderRalph Nader

Leadership opportunities abound—for all of Leadership opportunities abound—for all of us, all the time. us, all the time. (See Betsy Myers’ wonderful (See Betsy Myers’ wonderful Take the Lead: Take the Lead: Motivate, Inspire, and Bring Out the Best in Yourself and Everyone Motivate, Inspire, and Bring Out the Best in Yourself and Everyone

Around You.)Around You.) The idea per Mr. Nader is to get The idea per Mr. Nader is to get everyone focused on growth and thinking and everyone focused on growth and thinking and acting like a leader. Development acceleratesacting like a leader. Development accelerates—and the customer is the ultimate —and the customer is the ultimate beneficiary of a skilled staff that seizes the beneficiary of a skilled staff that seizes the moment without muss, fuss, or order moment without muss, fuss, or order shouting.shouting.

Leaders all!Leaders all!(Of course!) (Of course!)

Gamblin’ ManGamblin’ Man

Bet #1: Bet #1: >> 5 of 10 CEOs see >> 5 of 10 CEOs see training as expense rather training as expense rather than investment.than investment.Bet #2: Bet #2: >> 5 of 10 CEOs see >> 5 of 10 CEOs see training as defense rather training as defense rather than offense.than offense.Bet #3: Bet #3: >> 5 of 10 CEOs see >> 5 of 10 CEOs see training as “necessary evil” training as “necessary evil” rather than “strategic rather than “strategic opportunity.”opportunity.”

Bet #4:Bet #4: >> 8 of 10 >> 8 of 10 CEOs, in 45-min CEOs, in 45-min “tour d’horizon” “tour d’horizon” of their biz, would of their biz, would NOTNOT mention mention training.training.

What is the What is the

#1#1 reason to reason to

go berserk over go berserk over training?training?

What is the best reason to go What is the best reason to go bananas over training?bananas over training?

GREED.GREED.

(It pays off.)(It pays off.)

(Also: Training should be an official part of(Also: Training should be an official part of

the the R&DR&D budget and a capital expense.) budget and a capital expense.)

Training #1: Bottom LineTraining #1: Bottom Line

NOBODYNOBODY gets off the gets off the

hook! “Training & Development hook! “Training & Development Maniac” applies as much to the Maniac” applies as much to the

leader of the leader of the 4-person 4-person businessbusiness as to the chief as to the chief of the 44,444-person business.of the 44,444-person business.

““The topic is probably the oldest and biggest debate in The topic is probably the oldest and biggest debate in

Customer service. Customer service. What is more important: What is more important: How well you hire, or the training and How well you hire, or the training and

culture you bring your employees into? culture you bring your employees into?

While both are very important,While both are very important, 7575

percent is the Customer service training percent is the Customer service training and the service culture of your companyand the service culture of your company. .

Do you really think that Disney has found 50,000 amazing Do you really think that Disney has found 50,000 amazing service-minded people? There probably aren’t 50,000 people on service-minded people? There probably aren’t 50,000 people on earth who were born to serve. Companies like Ritz-Carlton and earth who were born to serve. Companies like Ritz-Carlton and Disney find good people and put them in such a strong service Disney find good people and put them in such a strong service

and training environment that doesn’t allow for accept and training environment that doesn’t allow for accept

anything less than excellenceanything less than excellence.”.” —John DiJulius, —John DiJulius, The Customer Service The Customer Service Revolution: Overthrow Conventional Business, Inspire Employees, and Change Revolution: Overthrow Conventional Business, Inspire Employees, and Change

the Worldthe World

As John DiJulius says, this is a controversial As John DiJulius says, this is a controversial point. But I would tend to lean in his direction point. But I would tend to lean in his direction in many if not most situations. Google? in many if not most situations. Google? Maybe not. But Google is 5 standard Maybe not. But Google is 5 standard deviations away from the norm—at least.deviations away from the norm—at least.

6/2/36/2/3**

*It takes Jerry Seinfeld *It takes Jerry Seinfeld SIX SIX MONTHSMONTHS to develop to develop

TWO TWO oror THREE THREE MINUTESMINUTES of new material of new material (documentary: (documentary: ComedianComedian))

He’s the quintessential “old pro.” No He’s the quintessential “old pro.” No

matter. He still … matter. He still … trains and trains and trains and trains and trains and trains and trains some more. trains some more. (Most (Most of the “training gigs” are performed in of the “training gigs” are performed in small, out-of-the-way places.)small, out-of-the-way places.)

Practice!Practice!Training!Training!Growth!Growth!

It ain’t a walk in the park—and it applies to It ain’t a walk in the park—and it applies to each and every one of us. That goes 10 X each and every one of us. That goes 10 X

((100X100X?) in 2015.?) in 2015.

Basketball coach John Wooden, perhaps the best coach of Basketball coach John Wooden, perhaps the best coach of

anything, ever:anything, ever: “I was never “I was never much of a game coach, much of a game coach, but I was a pretty good but I was a pretty good

practice coach.”practice coach.”

Hall of fame football coach Bill Walsh on preparation:Hall of fame football coach Bill Walsh on preparation:

““The score takes care The score takes care of itself.”of itself.”

Two pretty damn good trainers. The Two pretty damn good trainers. The outcome of the game per se is (more or outcome of the game per se is (more or less) simply a byproduct of peerless less) simply a byproduct of peerless training. Does this translate to training. Does this translate to business? What a silly* (*I wish) business? What a silly* (*I wish) question, eh?question, eh?

HiringHiring

““It’s simple, really, It’s simple, really,

Tom. Hire forTom. Hire for s, s, and, and, aboveabove allall, ,

ppromoteromote for for s.”s.” —Starbucks regional manager,

on why so many smiles at Starbucks shops

““We look for ... We look for ... listening, caring, listening, caring, smiling, saying smiling, saying

‘Thank you,’ being ‘Thank you,’ being warm.” warm.” — Colleen Barrett, former President, Southwest — Colleen Barrett, former President, Southwest

AirlinesAirlines

Put it (e.g., the likes of Put it (e.g., the likes of “smiles in a way that “smiles in a way that

lights up a room”) in the lights up a room”) in the

FORMALFORMAL criteria criteria

list. list. DAMNDAMN ITIT!!

AND .. could you consider plain English? Not AND .. could you consider plain English? Not “engages the interviewer in a positive “engages the interviewer in a positive fashion.” fashion.”

Instead: Instead: “SMILES A “SMILES A LOT.”LOT.”

Observed closely: The use ofObserved closely: The use of

“I”“I” oror

“We”“We” during aduring a

job interview.job interview.

Source: Leonard Berry & Kent Seltman, chapter 6, “Hiring for Values,” Source: Leonard Berry & Kent Seltman, chapter 6, “Hiring for Values,” Management Lessons From Mayo ClinicManagement Lessons From Mayo Clinic

AND .. could you consider plain English? Not AND .. could you consider plain English? Not “exhibits traits associated with good “exhibits traits associated with good teamwork.” teamwork.”

Instead: Instead: “Uses ‘We’ “Uses ‘We’ more than ‘I’.”more than ‘I’.”(FYI: Love this!)(FYI: Love this!)(FYI 2: The Mayo Clinic book is … SUPERB.)(FYI 2: The Mayo Clinic book is … SUPERB.)

"It became necessary to develop "It became necessary to develop

medicine as a medicine as a coocoopperative scienceerative science; the ; the

clinician, clinician, the specialist, the laboratory the specialist, the laboratory

workers, the nurses uniting for the workers, the nurses uniting for the good of the patient, each assisting good of the patient, each assisting in the elucidation of the problemin the elucidation of the problem

at hand, and each dependent at hand, and each dependent upon the other for support.”upon the other for support.”

——Dr. William Mayo, Dr. William Mayo, 19101910

Team medicine—in the culture from the start Team medicine—in the culture from the start and oh so rare in the healthcare industry—is and oh so rare in the healthcare industry—is at the heart of sustaining EXCELLENCE at the at the heart of sustaining EXCELLENCE at the Mayo Clinic. Mayo Clinic.

““I am I am hundredshundreds of times better of times better herehere [than in my prior hospital assignment][than in my prior hospital assignment]

because of the support system. because of the support system. It’s It’s like like yyou were workinou were workingg in an in an

ororgganism; anism; yyou are not a sinou are not a singgle cell le cell when when yyou are out there ou are out there

ppracticinracticingg.’”.’”

——quote from Dr. Nina Schwenk, in Chapter 3, “Practicing Team Medicine,” from Leonard Berry & Kent Seltman, quote from Dr. Nina Schwenk, in Chapter 3, “Practicing Team Medicine,” from Leonard Berry & Kent Seltman, from from Management Lessons From Mayo ClinicManagement Lessons From Mayo Clinic

Docs are rarely given to overstatement. Docs are rarely given to overstatement.

Regardless … Regardless … A STUNNING REMARKA STUNNING REMARK..

""The personnel committees on all The personnel committees on all three campuses have become three campuses have become

aggressive in addressing the issue aggressive in addressing the issue of physicians who are not living of physicians who are not living

the Mayo value of exhibiting the Mayo value of exhibiting respectful, collegial behavior to all respectful, collegial behavior to all team members. team members. Some Some pphhyysicians sicians

have been sushave been susppended without ended without ppaayy or terminatedor terminated.”.” —Leonard Barry & Kent Seltman, —Leonard Barry & Kent Seltman,

Management Lessons from Mayo ClinicManagement Lessons from Mayo Clinic

Teeth.Teeth.

AndrewAndrew CarneCarneggieie’s Tombstone Inscription …’s Tombstone Inscription …

Here lies a manHere lies a manWho knew how to enlistWho knew how to enlist

In his serviceIn his serviceBetter men than himself.Better men than himself.

Source: Peter Drucker, Source: Peter Drucker, The Practice of ManagementThe Practice of Management

Such a Such a VERYVERY big deal. big deal.

And oh-so-rare.And oh-so-rare.(Alas.)(Alas.)

"When I hire "When I hire someone, that's someone, that's

when when I I ggo to o to work for work for

themthem.”.” —John DiJulius,—John DiJulius, "What's the Secret to "What's the Secret to

Providing a World-class Customer Experience"Providing a World-class Customer Experience"

QuietQuiet

Susan Cain’s Susan Cain’s Quiet: The Power of Introverts Quiet: The Power of Introverts in a World That Can’t Stop Talkingin a World That Can’t Stop Talking made a made a profound impact on me. We tend to favor profound impact on me. We tend to favor the “noisy ones”—and thence downplay the the “noisy ones”—and thence downplay the power of the 50% amongst us who are “the power of the 50% amongst us who are “the quiet ones.”quiet ones.”

I.e., we blow off (or, at least, undervalue) I.e., we blow off (or, at least, undervalue)

50%50% 0f the talent pool. 0f the talent pool.

Talk about a “missed opportunity”!Talk about a “missed opportunity”!

““The next time you see a The next time you see a person with a composed face person with a composed face and a soft voice, remember and a soft voice, remember

that inside her mind she that inside her mind she might be solving an might be solving an

equation, composing a equation, composing a sonnet, designing a hat. She sonnet, designing a hat. She might, that is, be deploying might, that is, be deploying

the power of quiet.”the power of quiet.” — —Susan Cain, Susan Cain,

Quiet: The Power of Introverts in a World That Can’t Stop TalkingQuiet: The Power of Introverts in a World That Can’t Stop Talking

2/Year = 2/Year = LegacyLegacy

Your legacy is achieved and Your legacy is achieved and maintained to a great extent by your maintained to a great extent by your promotion decisions—about two per promotion decisions—about two per year on average. In a five-year stint, year on average. In a five-year stint, that’s 10 decisions that make or break that’s 10 decisions that make or break you.you.

DO YOU DO YOU (invest in the decision-making process)(invest in the decision-making process) ACT ACCORDINGLY?ACT ACCORDINGLY? (No glib answer, please.)(No glib answer, please.)

Promotion DecisionsPromotion Decisions

“life and “life and death death

decisions”decisions”Source: Peter Drucker, Source: Peter Drucker, The Practice of ManagementThe Practice of Management

A promotion decision is akin to an A promotion decision is akin to an acquisition decision. The same degree acquisition decision. The same degree of care therewith should be exercised.of care therewith should be exercised.

““A man should A man should nevernever be promoted to a be promoted to a

managerial position if his managerial position if his vision focuses on people’s vision focuses on people’s

weaknesses rather rather than on their than on their

strengths.”.” —Peter Drucker, —Peter Drucker, The Practice of ManagementThe Practice of Management

MeMe

““Being aware of Being aware of

yourself yourself and how and how yyou affect ou affect evereveryyone one

around around yyouou is is what what distindistingguishesuishes a a

superior leader.”superior leader.” —Edie Seashore—Edie Seashore

““How can a high-level leader like _____ How can a high-level leader like _____ be so out of touch with the truth about be so out of touch with the truth about

himself? It’s more common than you himself? It’s more common than you

would imagine. would imagine. In fact, the higher up the ladder a leader climbs, the less

accurate his self-assessment is likely to be.

The problem is an acute lack of The problem is an acute lack of feedback [especially on people issues].”feedback [especially on people issues].”

—Daniel Goleman (et al.), —Daniel Goleman (et al.), The New LeadersThe New Leaders

““The biggest problem I shallThe biggest problem I shall ever face: the management ever face: the management of Dale Carnegie.” of Dale Carnegie.” —Dale Carnegie, diary —Dale Carnegie, diary

ofof

"Everyone thinks "Everyone thinks of changing the of changing the

world, but no one world, but no one thinks of thinks of changing changing

himself." himself." —Leo Tolstoy—Leo Tolstoy

The leadership gurus speak with one The leadership gurus speak with one

voice on this: voice on this: Self-Self-knowledge and self-knowledge and self-development is leader development is leader job #1.job #1.

Think about it.Think about it.(Your self assessment skills likely … (Your self assessment skills likely …

STINKSTINK. Especially if you . Especially if you

think they’re good.)think they’re good.)

11stst-Line Bosses -Line Bosses (Cadre of) = (Cadre of) =

Productivity Asset Productivity Asset

#1#1!!

If the regimental commander lost most of his If the regimental commander lost most of his 2nd lieutenants and 1st lieutenants and 2nd lieutenants and 1st lieutenants and

captains and majors, it would be a tragedy. captains and majors, it would be a tragedy.

If he lost his If he lost his serserggeants it would eants it would be a catastrobe a catastropphehe. . The The

Army and the Navy are fully aware that Army and the Navy are fully aware that success on the battlefield is dependent to an success on the battlefield is dependent to an extraordinary degree on its Sergeants and extraordinary degree on its Sergeants and Chief Petty Officers. Does industry have the Chief Petty Officers. Does industry have the

same awareness?same awareness?

““People People leave leave

manamanaggersers not not companies.”companies.”

——Dave WheelerDave Wheeler

Actually, a profound statement of the Actually, a profound statement of the utmost importance.utmost importance.

Is there Is there ONEONE “secret” “secret” to productivity and to productivity and

employee satisfaction?employee satisfaction?

YESYES!!

The Quality of your The Quality of your FULLFULL CADRECADRE of … of …1st-line Leaders.1st-line Leaders.

No way to overstate here. Companies No way to overstate here. Companies do do pay attention to 1st-line supervisors—pay attention to 1st-line supervisors—but do not/rarely consider the full cadre but do not/rarely consider the full cadre

of 1st-line leaders a … of 1st-line leaders a … 11stst--ORDER ORDER STRATEGIC ASSETSTRATEGIC ASSET

… worthy of stupendous investment in … worthy of stupendous investment in selection and development.selection and development.

(PLEASE PONDER THIS.)(PLEASE PONDER THIS.)

WOMEN RULEWOMEN RULE!!

““Research Research [by McKinsey & Co.][by McKinsey & Co.] suggests that to succeed, suggests that to succeed,

start by promoting start by promoting women.”women.”

——Nicholas Kristof, “Twitter, Women, and Power,” Nicholas Kristof, “Twitter, Women, and Power,” NYTimesNYTimes

““In my experience, women In my experience, women make much better make much better

executives than men.”executives than men.” —Kip —Kip

Tindell, CEO, Container StoreTindell, CEO, Container Store

““AS AS LEADERS, LEADERS, WOMEN WOMEN

RULERULE:: New Studies find that New Studies find that

female managers outshine their male female managers outshine their male counterparts in almost every measure”counterparts in almost every measure”

TITLE/ Special Report/ TITLE/ Special Report/ BusinessWeekBusinessWeek

““Women are rated higher in fully Women are rated higher in fully 12 of the 16 competencies that go 12 of the 16 competencies that go into outstanding leadership. into outstanding leadership. And And two of the traits where women two of the traits where women outscored men to the highest outscored men to the highest degree — degree — takintakingg initiative and initiative and drivindrivingg for results for results — have long — have long been thought of as particularly been thought of as particularly

male strengths.”male strengths.”

——Harvard Business ReviewHarvard Business Review

For One (For One (BIGBIG) Thing …) Thing …

““McKinsey & Company found that McKinsey & Company found that the international companies with the international companies with more women on their corporate more women on their corporate

boards boards far outperformedfar outperformed the average the average company in return on equity and company in return on equity and

other measures. Operating profit other measures. Operating profit

was …was … 56%56% higher.”higher.”

Source: Nicholas Kristof, “Twitter, Women, and Power,” Source: Nicholas Kristof, “Twitter, Women, and Power,” NYTimesNYTimes, 1024.13, 1024.13

Women’s Strengths Match New Women’s Strengths Match New Economy ImperativesEconomy Imperatives:: Link [rather than Link [rather than

rank] workers; rank] workers; favor interactive-favor interactive-collaborative leadership style collaborative leadership style

[empowerment beats top-down decision [empowerment beats top-down decision making];making]; sustain fruitful collaborations; sustain fruitful collaborations;

comfortable with sharing information; comfortable with sharing information; see see redistribution of powerredistribution of power

as victory, not surrender as victory, not surrender; favor multi-; favor multi-dimensional feedback; dimensional feedback; value technical & value technical & interpersonal skills, individual & group interpersonal skills, individual & group contributions equally;contributions equally; readily accept readily accept

ambiguity; ambiguity; honor intuition as well as pure honor intuition as well as pure “rationality”;“rationality”; inherently flexible; inherently flexible; appreciate appreciate

cultural diversitycultural diversity..

Source: Source: Judy B. Rosener, Judy B. Rosener, America’s Competitive Secret: Women ManagersAmerica’s Competitive Secret: Women Managers

In the “modern” organization, huffing In the “modern” organization, huffing and puffing and shouting orders is and puffing and shouting orders is dying. Gaining cooperation of dying. Gaining cooperation of scattered team members who don’t scattered team members who don’t “report to” the (formally designated) “report to” the (formally designated) leader is the emergent norm. Which leader is the emergent norm. Which plays to women’s strengths.plays to women’s strengths.

Context:Context:1,000,0001,000,000

China/Foxconn:China/Foxconn:

1,000,000

robots/next robots/next 3 years years

Source:Source: Race AGAINST the Machine, Race AGAINST the Machine, Erik Brynjolfsson and Andrew McAfeeErik Brynjolfsson and Andrew McAfee

We typically think of China in terms of We typically think of China in terms of low-cost labor. China’s labor costs are low-cost labor. China’s labor costs are soaring—and, like the rest of us, the soaring—and, like the rest of us, the Chinese are stepping up their game. Chinese are stepping up their game.

And not pussyfooting!And not pussyfooting!

““Since Since 19961996, manufacturing , manufacturing employment in China itself has actuallyemployment in China itself has actually

fallenfallen

by an estimatedby an estimated 2525 p percentercent. .

That’s overThat’s over 30,000,00030,000,000 fewerfewer Chinese workers in that Chinese workers in that

sector, even while output soared by 70 sector, even while output soared by 70 percent.percent. It’s not that American workers are being It’s not that American workers are being

replaced by Chinese workers. It’s that both American replaced by Chinese workers. It’s that both American andand Chinese workers are being made more efficient [replaced] by Chinese workers are being made more efficient [replaced] by

automation.” automation.” —Erik Brynjolfsson and Andrew McAfee, —Erik Brynjolfsson and Andrew McAfee, The Second Machine Age: Work, Progress, and Prosperity The Second Machine Age: Work, Progress, and Prosperity

in a Time of Brilliant Technologiesin a Time of Brilliant Technologies

I read this in disbelief.I read this in disbelief.But I do believe it.But I do believe it.And what testimony it is to the And what testimony it is to the ubiquity of the automation tsunami.ubiquity of the automation tsunami.

““Automation has become so Automation has become so sophisticated that on a typical sophisticated that on a typical passenger flight, a human pilot passenger flight, a human pilot

holds the controls for a grand total holds the controls for a grand total

of …of …33 minutesminutes. .

[Pilots] have become, it’s not[Pilots] have become, it’s not much of an exaggeration to say, much of an exaggeration to say,

computer operators.”computer operators.” Source: Nicholas Carr, “The Great Forgetting,” Source: Nicholas Carr, “The Great Forgetting,” The AtlanticThe Atlantic, 11.13, 11.13

Pilot as computer operator—and Pilot as computer operator—and emergency skills are atrophying.emergency skills are atrophying.

““Meet Your Meet Your Next Surgeon: Next Surgeon:

Dr. Robot”Dr. Robot”Source: Feature/Source: Feature/FortuneFortune/15 JAN 2013/on Intuitive Surgical’s/15 JAN 2013/on Intuitive Surgical’s

da Vincida Vinci /multiple bypass heart-surgery /multiple bypass heart-surgery

robotrobot

Ditto pilots.Ditto pilots.

““Las Vegas Company Las Vegas Company Could 3D Print Your Could 3D Print Your Next Car: Customers Next Car: Customers could pick up newly could pick up newly printed car within 24 printed car within 24 hours”hours” —Headline, —Headline, Las Vegas Sun/Las Vegas Sun/ 1225.14 1225.14

IoT/Sensor Pills:IoT/Sensor Pills: “Proteus Digital Health is one of several “Proteus Digital Health is one of several pioneers in sensor-based health technology. pioneers in sensor-based health technology. They make a They make a silicon chip the size of a grain of sand that is embedded silicon chip the size of a grain of sand that is embedded into a safely digested pill that is swallowed. When the into a safely digested pill that is swallowed. When the chip mixes with stomach acids, the processor is powered chip mixes with stomach acids, the processor is powered by the body’s electricity and transmits data to a patch by the body’s electricity and transmits data to a patch worn on the skin. That patch, in turn, transmits data via worn on the skin. That patch, in turn, transmits data via Bluetooth to a mobile app, which then transmits the data Bluetooth to a mobile app, which then transmits the data to a central database where a health technician can to a central database where a health technician can verify if a patient has taken her or his medicationsverify if a patient has taken her or his medications. .

““This is a bigger deal than it may seem. In 2012, it was This is a bigger deal than it may seem. In 2012, it was estimated that people not taking their prescribed medications estimated that people not taking their prescribed medications cost cost $258 BILLION$258 BILLION in emergency room visits, hospitalization, in emergency room visits, hospitalization, and doctor visits. An average of and doctor visits. An average of 130,000130,000 Americans die each Americans die each year because they don’t follow their prescription regimens year because they don’t follow their prescription regimens closely enough.” (The FDA approved placebo testing in April closely enough.” (The FDA approved placebo testing in April 2012; sensor pills are ticketed to come to market in 2015 or 2012; sensor pills are ticketed to come to market in 2015 or 2016.)2016.)

Source: Robert Scoble and Shel Israel, Source: Robert Scoble and Shel Israel, Age of Context: Mobile, Sensors, Data and Age of Context: Mobile, Sensors, Data and the Future of Privacythe Future of Privacy

IoT/The Internet of ThingsIoT/The Internet of Things IoE/The Internet of IoE/The Internet of EverythingEverything M2M/Machine-to-MachineM2M/Machine-to-Machine Ubiquitous computingUbiquitous computing Embedded computingEmbedded computing Pervasive computingPervasive computing Industrial InternetIndustrial Internet Etc.*Etc.* **** ******

*“*“More Than More Than 50 BILLION50 BILLION connected devices by 2020” —Ericsson connected devices by 2020” —Ericsson

**Estimated **Estimated 212 BILLION212 BILLION connected devices by 2020—IDC connected devices by 2020—IDC

***“By 2025 IoT could be applicable to ***“By 2025 IoT could be applicable to $82 TRILLION$82 TRILLION of output or of output or approximately one half the global economy”—GE (The WAGs to end all WAGs!)approximately one half the global economy”—GE (The WAGs to end all WAGs!)

““Software is Software is eating the eating the

world.”world.”——Marc AndreessenMarc Andreessen

““Human level Human level capability has not capability has not turned out to be a turned out to be a special stopping special stopping

point from an point from an engineering engineering

perspective. ….”perspective. ….”

Source: Illah Reza Nourbakhsh, Professor of Robotics, Carnegie Mellon, Source: Illah Reza Nourbakhsh, Professor of Robotics, Carnegie Mellon, Robot Robot FuturesFutures

““The intellectual The intellectual talents of highly talents of highly

trained professionals trained professionals are no more protected are no more protected from automation than from automation than

is the driver’s left is the driver’s left turn.”turn.”

——Nicholas Carr,Nicholas Carr, The Glass Cage: Automation and Us The Glass Cage: Automation and Us

Betterment/Betterment/““Ambitions of Ambitions of

a Robo a Robo Adviser”Adviser”

——FT/1217.14/ FT/1217.14/ “could put tens of thousands of U.S. investment

advisors out of their jobs”

““The root of our problem is notThe root of our problem is not that we’re in a Great Recessionthat we’re in a Great Recession

or a Great Stagnation, but ratheror a Great Stagnation, but rather that we are in the early that we are in the early

throes of a throes of a Great Restructuring. .

Our technologies are racing ahead,Our technologies are racing ahead, but our skills and organizationsbut our skills and organizations

are lagging behind.”are lagging behind.”

Source:Source: Race AGAINST the Machine, Race AGAINST the Machine, Erik Brynjolfsson and Andrew McAfeeErik Brynjolfsson and Andrew McAfee

This is a principal explanation as to This is a principal explanation as to why the economy is coming back—but why the economy is coming back—but new jobs and wage increases are new jobs and wage increases are lagging* lagging lagging.lagging* lagging lagging.

(*When it comes to wage-rate (*When it comes to wage-rate movement, “non-existent” or even movement, “non-existent” or even “declining” are the correct words.)“declining” are the correct words.)

The New Logic: Scale w/o EmploymentThe New Logic: Scale w/o Employment

Kodak: 1988/Kodak: 1988/145,000145,000 employees; 2012/bankruptemployees; 2012/bankrupt

Instagram: 30,000,000 customers/Instagram: 30,000,000 customers/

1313 employees employees

(WhatsApp: 450,000,000 (WhatsApp: 450,000,000

customers/ customers/ 5555 employees/ employees/Valued @ $19,000,000,000)Valued @ $19,000,000,000)

Source: Robert Reich’s Blog/0317.15Source: Robert Reich’s Blog/0317.15

Just pause and read/re-read this.Just pause and read/re-read this.Form your own conclusions about Form your own conclusions about implications.implications.

Context:Context:Let’s Not Get Let’s Not Get TooToo Carried Carried

AwayAway

Life BEFORE Clay Christensen “Invented” “Disruption”:Life BEFORE Clay Christensen “Invented” “Disruption”: My mom (1909-2005) My mom (1909-2005) lived through the advent of mass market cars, commercial radio, lived through the advent of mass market cars, commercial radio, routine long-distance phone calls, portable phones, cell phones, routine long-distance phone calls, portable phones, cell phones,

satellites, satellite phone call transmission, movies with sound, color satellites, satellite phone call transmission, movies with sound, color movies, TV, TV dinners, microwave ovens, commercial use of aircraft, movies, TV, TV dinners, microwave ovens, commercial use of aircraft, jets, extensive electrification, the Great Depression, Ty Cobb, Babe jets, extensive electrification, the Great Depression, Ty Cobb, Babe

Ruth, Walter Johnson, Bob Feller, Barry Bonds, Derek Jeter, the West Ruth, Walter Johnson, Bob Feller, Barry Bonds, Derek Jeter, the West Coast Offense, the Civil Rights Movement, an African-American Coast Offense, the Civil Rights Movement, an African-American

Chairman of the Joint Chiefs of Staff/Secretary of State, Gay Pride, Chairman of the Joint Chiefs of Staff/Secretary of State, Gay Pride, women win the right to vote, Gandhi, Churchill, WWI, WWII, the women win the right to vote, Gandhi, Churchill, WWI, WWII, the

Holocaust, the birth of the U.S. Navy Seabees, relativity, the A-bomb, Holocaust, the birth of the U.S. Navy Seabees, relativity, the A-bomb, H-bomb, the EEC, the EU, the Euro, the Korean War, the Vietnam War, H-bomb, the EEC, the EU, the Euro, the Korean War, the Vietnam War, the Iraq War, 9/11, the Cold War, the disintegration of the USSR, the the Iraq War, 9/11, the Cold War, the disintegration of the USSR, the

resurgence of China, the death and resurrection of Germany and resurgence of China, the death and resurrection of Germany and Japan, Oklahoma & New Mexico & Arizona & Hawaii & Alaska become Japan, Oklahoma & New Mexico & Arizona & Hawaii & Alaska become

states, William Howard Taft* (*just missed Teddy Rooseveltstates, William Howard Taft* (*just missed Teddy Roosevelt!!), FDR, ), FDR, Ronald Reagan, Father Coughlin, Jim and Tammy Bakker, mainframe Ronald Reagan, Father Coughlin, Jim and Tammy Bakker, mainframe computers, PCs, hyperlinks, the iPod, DARPA-net, the Internet, air computers, PCs, hyperlinks, the iPod, DARPA-net, the Internet, air

conditioning, weed whackers, Mickey Mouse, Frank Sinatra, Elvis, the conditioning, weed whackers, Mickey Mouse, Frank Sinatra, Elvis, the Beatles, Madonna, the Model T, the Cadillac Escalade, Nancy Drew, Beatles, Madonna, the Model T, the Cadillac Escalade, Nancy Drew, the first four Harry Potter books, antibiotics, MRIs, polio vaccine, the first four Harry Potter books, antibiotics, MRIs, polio vaccine,

genetic mapping,genetic mapping, WWII rockets, space flight, man-to-the-moon, probe WWII rockets, space flight, man-to-the-moon, probe on Mars, more or less permanent on Mars, more or less permanent

space station.”** space station.”** (**But, to be sure, not long enough to see the Cubs win another World Series or to take a selfie.)(**But, to be sure, not long enough to see the Cubs win another World Series or to take a selfie.)

My Mom’s life was not exactly a My Mom’s life was not exactly a yawner when it came to “disruption”!yawner when it came to “disruption”!

THE MORAL THE MORAL IMPERATIVE:IMPERATIVE:

PEOPLE PEOPLE DEVELOPMENTDEVELOPMENT

CORPORATE MANDATE #1 2014:CORPORATE MANDATE #1 2014: Your Your principal moral obligation as a principal moral obligation as a

leader is to develop the skillset, leader is to develop the skillset, “soft” and “hard,” of every one “soft” and “hard,” of every one

of the people in your charge of the people in your charge (temporary as well as semi-(temporary as well as semi-permanent) to the maximum permanent) to the maximum extent of your abilities. The extent of your abilities. The

bonus: bonus: This is also theThis is also the #1 mid- to lon#1 mid- to longg-term-term … …

p profit maximization straterofit maximization strategy!gy!

To mTo myy wa wayy of thinkin of thinkingg, , this is bthis is byy far the most far the most imimpportant ortant ppoint oint considered in this considered in this ppresentationresentation..

In In Good Business, Good Business, Mihaly Csikszentmihalyi argues Mihaly Csikszentmihalyi argues persuasively that business has become the center persuasively that business has become the center of society. As such, an obligation to community is of society. As such, an obligation to community is front & center. Business as societal bedrock, per front & center. Business as societal bedrock, per Csikszentmihalyi, has the RESPONSIBILITY to Csikszentmihalyi, has the RESPONSIBILITY to increase the … increase the …

““SUM OF HUMAN WELL-SUM OF HUMAN WELL-BEING.”BEING.” Business is Business is NOTNOT “part of the “part of the community.” In terms of how adults collectively community.” In terms of how adults collectively

spend their waking hours: Business spend their waking hours: Business ISIS the the community. And should act accordingly. The community. And should act accordingly. The (REALLY) good news: Community mindedness is a (REALLY) good news: Community mindedness is a great way (the BEST way?) to have great way (the BEST way?) to have spirited/committed/customer-centric work force—spirited/committed/customer-centric work force—and, ultimately, increase (maximize?) growth and and, ultimately, increase (maximize?) growth and profitability.profitability.

I love this!I love this!(And “buy it” 100%.)(And “buy it” 100%.)

(Read it. Re-read it. Think about it. (Read it. Re-read it. Think about it. Discuss it. Act on it.)Discuss it. Act on it.)

The Memories That MatterThe Memories That Matter

The people you developed who went on toThe people you developed who went on to stellar accomplishments inside or outsidestellar accomplishments inside or outside the company.the company. The (no more than) two or three people you developed who went on The (no more than) two or three people you developed who went on toto create create stellar institutions of their own.stellar institutions of their own.The long shots (people with “a certain something”) you bet on whoThe long shots (people with “a certain something”) you bet on who surprised themselves—surprised themselves—andand your peers. your peers.

The people of all stripes who 2/5/10/20 yearsThe people of all stripes who 2/5/10/20 years later say later say “You made a difference in my “You made a difference in my life,”life,” “ “Your belief in me changed everything.”Your belief in me changed everything.”The sort of/character of people you hired in general. (The sort of/character of people you hired in general. (And And the bad the bad apples you chucked out despite some stellar traits.)apples you chucked out despite some stellar traits.)A handful of projects (a half dozen at most) you doggedly pursued A handful of projects (a half dozen at most) you doggedly pursued thatthat still make you smile and which fundamentally changed the waystill make you smile and which fundamentally changed the way things are done inside or outside the company/industry.things are done inside or outside the company/industry. The supercharged camaraderie of a handful of Great Teams aiming The supercharged camaraderie of a handful of Great Teams aiming toto “ “change the world.”change the world.”

This is the sort of thing you’ll look back This is the sort of thing you’ll look back on at my age—71. Not the $$$ wealth on at my age—71. Not the $$$ wealth you accumulated.you accumulated.

(This is the first part of a longer list I (This is the first part of a longer list I developed for a talk to the top developed for a talk to the top management team of a $5-billion management team of a $5-billion chemical company. I.e., I was chemical company. I.e., I was addressing high-ranking general addressing high-ranking general managers.)managers.)

INNOVATIONINNOVATION

11/49:/49:

WTTMSWWTTMSW

No kidding, this truly is … No kidding, this truly is … the the only thing I’ve only thing I’ve learned learned “for sure”“for sure” … in … in the 49 years since I began my the 49 years since I began my managerial career—as a U.S. Navy managerial career—as a U.S. Navy construction battalion ensign in construction battalion ensign in Vietnam.Vietnam.

WHOEVERWHOEVERTRIESTRIESTHETHEMOSTMOSTSTUFFSTUFFWINSWINS

““Show up” and “Try it” are probably Show up” and “Try it” are probably

(UNDOUBTEDLY?)(UNDOUBTEDLY?) the two the two most durable pieces of advice that can most durable pieces of advice that can be imagined.be imagined.

1. 1. A Bias for A Bias for ActionAction2. Close to the 2. Close to the CustomerCustomer3. 3. AutonomAutonomy and y and EntreEntreppreneurshireneurshipp4. Productivity Through 4. Productivity Through PeoPeopplele5. 5. Hands OnHands On, , Value-DrivenValue-Driven6. 6. Stick toStick to the Knitting the Knitting7. 7. SimSimpplele Form, Form, LeanLean Staff Staff8. Simultaneous 8. Simultaneous Loose-TightLoose-Tight Properties Properties

If I were to update the book in 2014, If I were to update the book in 2014,

there is there is ZEROZERO doubt that doubt that

““a bias for action” would top the list—a bias for action” would top the list—with even more emphasis than 33 with even more emphasis than 33 years ago.years ago.

READY.READY.FIRE!FIRE!AIM.AIM.

H. Ross Perot (vs H. Ross Perot (vs “Aim! Aim! Aim!”“Aim! Aim! Aim!” /EDS vs GM/1985) /EDS vs GM/1985)

H. Ross Perot sold EDS to GM in the H. Ross Perot sold EDS to GM in the 1980s, and went on the car giant’s 1980s, and went on the car giant’s Board. A few years later he was asked Board. A few years later he was asked to explain the difference between the to explain the difference between the two companies. two companies.

He said that at EDS the strategy was He said that at EDS the strategy was “Ready. Fire. Aim.”“Ready. Fire. Aim.” I.e., get on with it I.e., get on with it—now. —now. At GM the “strategy” was At GM the “strategy” was

“Ready. Aim. Aim. Aim. “Ready. Aim. Aim. Aim. Aim. …”Aim. …” (Alas, well into the 1 (Alas, well into the 1stst decade of the new century GM’s decade of the new century GM’s problems/unwieldy bureaucracy problems/unwieldy bureaucracy remained pretty much unchanged.)remained pretty much unchanged.)

““WE HAVE A WE HAVE A STRATEGIC PLAN. STRATEGIC PLAN.

IT’S CALLED ‘DOING IT’S CALLED ‘DOING THINGS.’ ”THINGS.’ ” —Herb Kelleher—Herb Kelleher

“DON’T ‘PLAN.’ “DON’T ‘PLAN.’ DO STUFF.”DO STUFF.”

—David Kelley/IDEO

Screw it.Screw it.Just do it.Just do it.

——book title, Richard Bransonbook title, Richard Branson

I want to be a Photographer.I want to be a Photographer.Take a ton of photos. Start a photo blog. Take a ton of photos. Start a photo blog.

Organize an art show for your best work. Make stuff.Organize an art show for your best work. Make stuff.

I want to be a Writer.I want to be a Writer.Write a ton of pieces. Establish a voice on social media. Write a ton of pieces. Establish a voice on social media. Start a blog. Write guest posts for friends. Make stuff.Start a blog. Write guest posts for friends. Make stuff.

Talk is cheap.Talk is cheap.Just make stuff.Just make stuff.

——Reid Shilperoot, brand strategist, on the one piece ofReid Shilperoot, brand strategist, on the one piece of advice that has helped him overcome creative blocksadvice that has helped him overcome creative blocks

““We made mistakes, of course. Most of them were We made mistakes, of course. Most of them were omissions we didn’t think of when we initially wrote the omissions we didn’t think of when we initially wrote the

software. software. We fixed them by doing it over and over, We fixed them by doing it over and over, again and again.again and again. We do the same today. While our We do the same today. While our competitors are still sucking their thumbs trying to competitors are still sucking their thumbs trying to

make the design perfect, we’re already on prototype make the design perfect, we’re already on prototype

versionversion ##55.. By the time our rivals are ready By the time our rivals are ready

with wires and screws, we are on version with wires and screws, we are on version

##1010.. It gets back to It gets back to planning versus actingplanning versus acting: : We act We act from day onefrom day one; ; others plan how others plan how

toto planplan——for monthsfor months.”.”

——Bloomberg by BloombergBloomberg by Bloomberg

““DEMODEMO OR DIE!”OR DIE!”

Source: This was the approach championed by Source: This was the approach championed by NicholasNicholas NeNeggroropponteonte which vaulted his which vaulted his MITMIT MediaMedia LabLab to the forefront of IT-multimedia to the forefront of IT-multimedia

innovation. It was his successful alternative to the traditional innovation. It was his successful alternative to the traditional MIT-academic MIT-academic “publish or perish.”“publish or perish.” Negroponte’s rapid-prototyping Negroponte’s rapid-prototyping

version was emblematic of the times and the pace and the enormityversion was emblematic of the times and the pace and the enormity of the opportunity. (of the opportunity. (NYTimesNYTimes/0426.11)/0426.11)

Culture of PrototypingCulture of Prototyping

“Effective prototyping may “Effective prototyping may

be be THETHE MOST MOST VALUABLEVALUABLE CORE CORE COMPETENCECOMPETENCE an an

innovative organization can innovative organization can hope to have.”hope to have.” —Michael Schrage—Michael Schrage

Strong language.Strong language.Merited.Merited.

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

able to seriously play.able to seriously play.

‘‘Serious Serious plplaay’y’ isis not an oxymoron; it is not an oxymoron; it is

the the essenceessence of of innovationinnovation.”.”

—Michael Schrage,—Michael Schrage, Serious PlaySerious Play

I agree 100%.I agree 100%.But in 9 of 10 cases a “cultural But in 9 of 10 cases a “cultural revolution” is required to bring a revolution” is required to bring a “playful environment” into being.“playful environment” into being.

Big point: Such a playful culture, which Big point: Such a playful culture, which is, make no mistake, the bedrock of is, make no mistake, the bedrock of innovation, in 2015 is very close to:innovation, in 2015 is very close to:

NOT OPTIONALNOT OPTIONAL..

““EXPERIMENT EXPERIMENT FEARLESSLY”FEARLESSLY”

Source: BusinessWeek, “Type A Organization Strategies: How to Hit a Moving Target”—Tactic #1Tactic #1

“RELENTLESS TRIAL“RELENTLESS TRIAL AND ERROR” AND ERROR”

Source: Source: Wall Street JournalWall Street Journal, cornerstone of effective approach to “rebalancing” company, cornerstone of effective approach to “rebalancing” company portfolios in the face of changing and uncertain global economic conditions (11.08.10) portfolios in the face of changing and uncertain global economic conditions (11.08.10)

Facebook, iPod, Facebook, iPod, etc. … ordinary etc. … ordinary

ideas/SJ as ideas/SJ as “tinkerer” par “tinkerer” par

excellence excellence

WTTMSW/Corollary

“FAIL. FORWARD. “FAIL. FORWARD. FAST.”FAST.”

—High Tech CEO, Pennsylvania

“FAIL FASTER. SUCCEED “FAIL FASTER. SUCCEED SOONER.”SOONER.”

—David Kelley/IDEO

“MOVE FAST. “MOVE FAST.

BREAK THINGS.”BREAK THINGS.” —Facebook—Facebook

“ ‘“ ‘Success,’ Honda said, Success,’ Honda said, ‘can only be achieved ‘can only be achieved

through repeated failure through repeated failure and introspection. and introspection. Success Success rereppresents one resents one ppercent of ercent of yyour work, which results our work, which results onlonlyy from the ninet from the ninetyy-nine -nine

ppercent that is called ercent that is called failurefailure.’ ”.’ ” —Jeffrey Rothfeder, —Jeffrey Rothfeder, Driving Honda: Driving Honda:

Inside the World’s Most Innovative Car CompanyInside the World’s Most Innovative Car Company

““REWARDREWARD excellent failures. excellent failures. PUNISHPUNISH mediocre mediocre

successes.”successes.”—Phil Daniels, Sydney exec—Phil Daniels, Sydney exec

““In business, youIn business, you REWARDREWARD people people

for taking for taking RISKS.RISKS. WHEN IT WHEN IT DOESN’T WORK DOESN’T WORK

OUT YOU PROMOTE OUT YOU PROMOTE THEMTHEM -BECAUSE THEY WERE -BECAUSE THEY WERE

WILLING TO TRY NEW THINGSWILLING TO TRY NEW THINGS.. If If people tell me they skied all day and people tell me they skied all day and never fell down, I tell them to try a never fell down, I tell them to try a

different mountain.”different mountain.” —Michael Bloomberg—Michael Bloomberg

““What really matters is that What really matters is that companies that don’t continue to companies that don’t continue to

experiment—experiment—companies companies that don’t that don’t

embraceembrace failure failure — —they eventually get in a desperate they eventually get in a desperate

position, where the only thing position, where the only thing they can do is make a ‘Hail Mary’ they can do is make a ‘Hail Mary’

bet at the end.”bet at the end.” ——Jeff Bezos at Jeff Bezos at Business InsiderBusiness Insider “Ignition” conference, 1202.14 “Ignition” conference, 1202.14

Re-read these last three slides: When Re-read these last three slides: When it comes (in 2015) to the consequences it comes (in 2015) to the consequences of failures:of failures:

Reward.Reward.Promote.Promote.Embrace.Embrace.

(Yup, those were the three key words.)(Yup, those were the three key words.)

““Ideas Economy: Ideas Economy: CAN YOUR CAN YOUR

BUSINESS FAIL BUSINESS FAIL FAST ENOUGH TO FAST ENOUGH TO

SUCCEEDSUCCEED?”?”Source: ad for Economist Conference/0328.13/Berkeley CA (caps are Source: ad for Economist Conference/0328.13/Berkeley CA (caps are EconomistEconomist))

““The essenceThe essence of capitalism is of capitalism is

encouraging failure, encouraging failure, not rewarding not rewarding

success.”success.” —Nassim Nicholas Taleb/Reason TV/0124.13—Nassim Nicholas Taleb/Reason TV/0124.13

I know of no one more thoughtful on I know of no one more thoughtful on this topic than Taleb.this topic than Taleb.

WTTMSWTTMSASTMSUASTMSUWW

WHOEVERWHOEVERTRIESTRIESTHETHEMOSTMOSTSTUFFSTUFFAND AND SCREWSSCREWSTHETHEMOSTMOSTSTUFFSTUFFUPUPWINSWINS

OUCHOUCH!!(Oh so true.)(Oh so true.)

““YOU MISS YOU MISS

100100%% OF OF

THE SHOTS YOU THE SHOTS YOU NEVER TAKE.”NEVER TAKE.”

—Wayne—Wayne GretzkyGretzky

All you need to know in life?All you need to know in life?

Tempo/Tempo/TemperamentTemperament

““If things seem under If things seem under control, you’re just not control, you’re just not going fast enough.” going fast enough.”

——Mario Andretti, race driverMario Andretti, race driver

““I’m not comfortable I’m not comfortable unless I’m uncomfortable.” unless I’m uncomfortable.”

——Jay ChiatJay Chiat

““If it works, it’s obsolete.”If it works, it’s obsolete.”

——Marshall McLuhanMarshall McLuhan

Hustle.Hustle.

NOT OPTIONAL.NOT OPTIONAL.

WTTMSASTMSUWTTMSASTMSUTFTFWW

WHOEVERWHOEVERTRIESTRIESTHETHEMOSTMOSTSTUFFSTUFFANDANDSCREWSSCREWSTHETHEMOSTMOSTSTUFFSTUFFUP UP THETHEFASTESTFASTESTWINSWINS

WTTMSWTTMSASTMSUASTMSUTFTFWW

WHOEVERWHOEVERTRIESTRIESTHETHEMOSTMOSTSTUFFSTUFFANDANDSCREWSSCREWSTHETHEMOSTMOSTSTUFFSTUFFUP UP THETHEFASTESTFASTEST

WINSWINS

Q.E.D.Q.E.D.

LBTs*LBTs**Little BIG Things*Little BIG Things

LittleLittle BIGBIG Things: Things:

Small move.Small move.Small cost.Small cost.Enormous (potential) payoff.Enormous (potential) payoff.There for the taking.There for the taking.

((IFIF … the “culture of ‘serious play’” … the “culture of ‘serious play’” described previously is in place—a big “if.”)described previously is in place—a big “if.”)

(Message:(Message: Not every pursuit of major Not every pursuit of major innovation needs to begin with the issuance innovation needs to begin with the issuance of a $250,000 check!of a $250,000 check! ) )

Bag sizes = New markets:Bag sizes = New markets:

$B$BSource: PepsiCoSource: PepsiCo

Frito Lay, stuck some years ago with a Frito Lay, stuck some years ago with a string of failed (expensive) new product string of failed (expensive) new product introductions, goes “trivial”—adding introductions, goes “trivial”—adding (yawn) some new bag sizes to its potato (yawn) some new bag sizes to its potato chip offerings. E.g., family size, single-chip offerings. E.g., family size, single-serve, etc. Astonishingly, these became serve, etc. Astonishingly, these became fullscale new product categories—and fullscale new product categories—and

added, literally, added, literally, >$1 billion>$1 billion to the to the top line.top line.

LittleLittle = = VERYVERY BIG. BIG.

Big carts =Big carts =

1.5X1.5XSource: WalmartSource: Walmart

Walmart increases shopping cart size. Walmart increases shopping cart size.

(YAWN.)(YAWN.)

Big item—microwave ovens, etc.—sales soar Big item—microwave ovens, etc.—sales soar

… … 50%50%..

Las Vegas Casino/2X:Las Vegas Casino/2X:

“When Friedman“When Friedman slisligghtlhtly y curvedcurved the right angle of an the right angle of an

entrance corridor to one property, he was entrance corridor to one property, he was ‘amazed at the magnitude of change in ‘amazed at the magnitude of change in

pedestrians’ behavior’—the percentage who pedestrians’ behavior’—the percentage who

entered increased fromentered increased from oneone--thirdthird to to

nearlynearly twotwo--thirdsthirds.”.”

——Natasha Dow Schull, Natasha Dow Schull, Addiction By Design: Machine Gambling in Las VegasAddiction By Design: Machine Gambling in Las Vegas

Ye gads!Ye gads!Vegas!Vegas!

(Again, (Again, >$1B>$1B impact.) impact.)

(1)(1) AMENABLE TO RAPID AMENABLE TO RAPID EXPERIMENTATION/FAILURE “FREE” EXPERIMENTATION/FAILURE “FREE” (NO BAD “PR,” NO $$)(NO BAD “PR,” NO $$)(2)(2) QUICK TO IMPLEMENT/QUICK TO QUICK TO IMPLEMENT/QUICK TO ROLL OUTROLL OUT(3)(3) INEXPENSIVE TO IMPLEMENT/ INEXPENSIVE TO IMPLEMENT/ ROLL OUTROLL OUT(4)(4) HUGE MULTIPLIER HUGE MULTIPLIER(5)(5) AN “ATTITUDE” AN “ATTITUDE”(6) (6) DOES NOT BY AND LARGE REQUIRE ADOES NOT BY AND LARGE REQUIRE A “ “POWER POSITION” FROM WHICHPOWER POSITION” FROM WHICH TO LAUNCH EXPERIMENTS.TO LAUNCH EXPERIMENTS.

I could go on.I could go on.I’d love to go on.I’d love to go on.The cases are fun.The cases are fun.The payoff is enormous.The payoff is enormous.

But this section is really about a “habit of But this section is really about a “habit of serious play.” Realizing the possible BIG serious play.” Realizing the possible BIG BANG PAYOFF from constant BANG PAYOFF from constant experimentation.experimentation.

And per this slide, it’s quick, invisible, And per this slide, it’s quick, invisible, inexpensive.inexpensive.And perhaps, yes, with a payoff in the $B And perhaps, yes, with a payoff in the $B range.range.

(W(WARNINGARNING: This, to repeat, is a cultural : This, to repeat, is a cultural issue—in fact all this “TGR stuff” is.)issue—in fact all this “TGR stuff” is.)

We Are WhatWe Are What We Eat. We Eat.

We Are Who We We Are Who We Hang Out With.Hang Out With.

Diversity:Diversity: “It is hardly possible to “It is hardly possible to overrate the value of placing overrate the value of placing human beings in contact with human beings in contact with persons dis-similar to themselves, persons dis-similar to themselves, and with modes of thought and and with modes of thought and action unlike those with which action unlike those with which they are familiar. Such they are familiar. Such communication has always been, communication has always been, and is peculiarly in the present and is peculiarly in the present age, one of the primary sources of age, one of the primary sources of progress.”progress.” —John Stuart Mill—John Stuart Mill

Innovation is a life or death Innovation is a life or death proposition—as never before.proposition—as never before.WTTMSW/Whoever Tries The Most Stuff WTTMSW/Whoever Tries The Most Stuff Wins is my #1.Wins is my #1.

The HOF/Hang Out Factor is The HOF/Hang Out Factor is #2#2..

This is one This is one B-I-GB-I-G deal. deal. And, alas, largely unattended to.And, alas, largely unattended to.

THAT MUST CHANGETHAT MUST CHANGE..

And: And: THE PROCESS MUST THE PROCESS MUST BE SYSTEMATICBE SYSTEMATIC..

““You will become You will become like the five people like the five people you associate with you associate with the most—this canthe most—this can

be either a blessing be either a blessing or a curse.”or a curse.” —Billy Cox—Billy Cox

The “We are what we eat”/ The “We are what we eat”/ “We are who we hang out with”“We are who we hang out with”

Axiom: Axiom: At its core, At its core, evereveryy (!!!) (!!!)

relationship-partnership decision relationship-partnership decision (employee, vendor, customer, etc., (employee, vendor, customer, etc., etc.) is a etc.) is a stratestrateggicic decision about: decision about:

“Innovate,“Innovate, ‘ ‘YesYes’ ’ oror ‘No’ ” ”

Key word:Key word:

EVERY.EVERY.

Measure/Manage: Portfolio Measure/Manage: Portfolio “Strangeness”/“Quality”“Strangeness”/“Quality”

1. Customers1. Customers2. Vendors2. Vendors3. Out-sourcing Partners3. Out-sourcing Partners4. Acquisitions4. Acquisitions5. Purposeful “Theft”5. Purposeful “Theft”6. Diversity/“d”iversity6. Diversity/“d”iversity7. Diversity/Crowd-sourcing7. Diversity/Crowd-sourcing8.8. Diversity/Weird Diversity/Weird 9.9. Diversity/CuriosityDiversity/Curiosity10. Benchmarks10. Benchmarks11. Calendar11. Calendar12. MBWA12. MBWA13. Lunch/General13. Lunch/General14. Lunch/Other functions14. Lunch/Other functions15. Location/Internal15. Location/Internal16. Location/HQ16. Location/HQ17. Top team17. Top team18. Board18. Board

““The Billion-man The Billion-man Research Team: Research Team:

Companies offering Companies offering work to online work to online

communities are communities are reaping the benefits of reaping the benefits of

crowdsourcing.”crowdsourcing.” —Headline, —Headline, FTFT

““Crowdsourcing” can more or less Crowdsourcing” can more or less apply to … apply to … EVERYTHINGEVERYTHING..

Ouch!Ouch!

“The Bottleneck …The Bottleneck …

“The Bottleneck is at the …The Bottleneck is at the … “Where are you likely to find people “Where are you likely to find people

with the with the least diversitleast diversityy of ex of expperienceerience, , the the larlarggest investment in the est investment in the ppastast,,

and the g and the greatest reverence for reatest reverence for industrindustryy do doggmama … …

Top of the Top of the Bottle”Bottle”

— Gary Hamel/— Gary Hamel/Harvard Business ReviewHarvard Business Review

Alas.Alas.So true.So true.

““Who’s the most Who’s the most interesting person interesting person you’ve met in the you’ve met in the last 90 days? How last 90 days? How do I get in touch do I get in touch

with them?”with them?” —Fred Smith—Fred Smith

Maybe not such an easy question to Maybe not such an easy question to answer?answer?(It isn’t for me, at any rate.)(It isn’t for me, at any rate.)

Take it seriously.Take it seriously.VERY seriously.VERY seriously.((PLEASEPLEASE.).)

WE WE AREARE THE THE COMPANYCOMPANY WE KEEP!WE KEEP!

MANAGEMANAGE IT! IT!

This is not intended to be “a good This is not intended to be “a good idea.” It is a strategic asset—and idea.” It is a strategic asset—and should be consciously … should be consciously …

measuredmeasured and and managedmanaged..

(Start by considering the last 10 (Start by considering the last 10 people you went to lunch with. “Same-people you went to lunch with. “Same-same” or “stretch-stretch”?)same” or “stretch-stretch”?)

Diversity:Diversity: Hang out with cool and thou Hang out with cool and thou shalt become more cool. Hang out with shalt become more cool. Hang out with dull and thou shalt become more dull.dull and thou shalt become more dull.

Diversity:Diversity: Your “hang out with” Your “hang out with” “portfolio” can/should be as carefully “portfolio” can/should be as carefully concocted/ managed/ measured as your concocted/ managed/ measured as your strategic plan—it strategic plan—it ISIS your de facto your de facto strategic plan!strategic plan!

Diversity:Diversity: Every relationship-partnership Every relationship-partnership decision (employee/ decision (employee/ vendor/customer/etc.) is a strategic vendor/customer/etc.) is a strategic decision: “Innovate, ‘Yes’ or ‘No.’” decision: “Innovate, ‘Yes’ or ‘No.’”

XFX =XFX =

#1#1

XFX = XFX = #1#1**

*Cross-Functional *Cross-Functional eXcellence eXcellence

A project is behind schedule by three A project is behind schedule by three months? Six months? There is a mess months? Six months? There is a mess amidst the supply chain? Customer orders amidst the supply chain? Customer orders are badly backlogged? Etc. Invariably there are badly backlogged? Etc. Invariably there

is is ONE ONE reason above all others reason above all others

when such snafus occur. when such snafus occur. (As they routinely do.)(As they routinely do.) Namely: Namely:

BOTCHED BOTCHED CROSS-FUNCTIONAL CROSS-FUNCTIONAL CO-ORDINATION.CO-ORDINATION.

NEVER NEVER WASTE A WASTE A LUNCH!LUNCH!

Sounds a little lightweight if the problem is Sounds a little lightweight if the problem is such a big one. Surely a new org chart and a such a big one. Surely a new org chart and a few million more investment $$ tossed into few million more investment $$ tossed into the ERP budget tops the list. the ERP budget tops the list.

I’m hardly urging you not to invest. But I do I’m hardly urging you not to invest. But I do claim—in, still, 2015—that the social aspects claim—in, still, 2015—that the social aspects of XFX are largely ignored or given no more of XFX are largely ignored or given no more than lip service—whereas they ought to rank than lip service—whereas they ought to rank at, yes, the top of th list.at, yes, the top of th list.

And at the top of my “social factors” list is, And at the top of my “social factors” list is, no kidding …no kidding …

LUNCH.LUNCH.

The sacred The sacred 220 “ABs”.*220 “ABs”.*

*“At bats”*“At bats”

About 220 workday lunches per year = 220 About 220 workday lunches per year = 220 precious, non-repeatable opportunitiesprecious, non-repeatable opportunities (“at (“at bats” in baseball terms) to make hay of one bats” in baseball terms) to make hay of one sort or another.sort or another.

And, to be trite, once they’re gone they’re And, to be trite, once they’re gone they’re gone for good.gone for good.

Am I being obsessive?Am I being obsessive?Yup.Yup.It’s merited. It’s merited.

A lunch lost is a lunch lost.A lunch lost is a lunch lost.Starting … Starting … TODAYTODAY. .

% XF % XF

lunches*lunches***MeasureMeasure!! Monthly! Part of Monthly! Part of

evaluation! evaluation!

% of lunches with people in … % of lunches with people in … OTHER OTHER FUNCTIONSFUNCTIONS..

((BIGBIG deal.) deal.)

XFX:XFX: SOCIALSOCIAL ACCELERATORS …ACCELERATORS …

The key “XFX” attainment tools are social—The key “XFX” attainment tools are social—not technological.not technological.

XFX/Typical XFX/Typical SocialSocial Accelerators Accelerators

1. EVERYONE’s (more or less) JOB #1: Make friends in other 1. EVERYONE’s (more or less) JOB #1: Make friends in other functions! (Purposefully. Consistently. Measurably.)functions! (Purposefully. Consistently. Measurably.)2. “Do lunch” with people in other functions!! Frequently!! 2. “Do lunch” with people in other functions!! Frequently!! (Minimum 10% to 25% for everyone? Measured.)(Minimum 10% to 25% for everyone? Measured.)3. Ask peers in other functions for references so you can become 3. Ask peers in other functions for references so you can become conversant in their world. (It’s one helluva sign of ... GIVE-A-DAMN-conversant in their world. (It’s one helluva sign of ... GIVE-A-DAMN-ism.) ism.) 4. Religiously invite counterparts in other functions to your team 4. Religiously invite counterparts in other functions to your team meetings. Ask them to present “cool stuff” from “their world” to meetings. Ask them to present “cool stuff” from “their world” to your group. (Useful. Mark of respect.)your group. (Useful. Mark of respect.)

5. 5. PROACTIVELY SEEK EXAMPLES OF “TINY” PROACTIVELY SEEK EXAMPLES OF “TINY” ACTS OF “XFX” TO ACKNOWLEDGE—ACTS OF “XFX” TO ACKNOWLEDGE—PRIVATELY AND PUBLICALLY. (Bosses: ONCE PRIVATELY AND PUBLICALLY. (Bosses: ONCE A DAY … make a short call or visit or send an A DAY … make a short call or visit or send an email of “Thanks” for some sort of XFX email of “Thanks” for some sort of XFX gesture by your folks and some other gesture by your folks and some other function’s folks.)function’s folks.) 6. Present counterparts in other functions awards for service to 6. Present counterparts in other functions awards for service to your group. Tiny awards at least weekly; and an “Annualyour group. Tiny awards at least weekly; and an “Annual All-Star All-Star Supporters (from other groups) Banquet” modeled after superstar Supporters (from other groups) Banquet” modeled after superstar salesperson banquets. salesperson banquets.

XFX/ Typical XFX/ Typical SocialSocial Accelerators Accelerators

7. Routinely discuss—A SEPARATE AGENDA ITEM—good and 7. Routinely discuss—A SEPARATE AGENDA ITEM—good and problematic acts of cross-functional cooperation at every problematic acts of cross-functional cooperation at every Team Meeting. Team Meeting. 8. When someone in another function asks for assistance, 8. When someone in another function asks for assistance, respond with … more … alacrity than you would if it were the respond with … more … alacrity than you would if it were the person in the cubicle next to yours—or even more than you person in the cubicle next to yours—or even more than you would for a key external customer. (Remember, XFX is the would for a key external customer. (Remember, XFX is the key to Customer Retention which is in turn the key to “all key to Customer Retention which is in turn the key to “all good things.”)good things.”)9. Do not bad mouth ... “the damned accountants,” “the 9. Do not bad mouth ... “the damned accountants,” “the bloody HR guy.” Ever. (Bosses: Severe penalties for this—bloody HR guy.” Ever. (Bosses: Severe penalties for this—including public tongue-lashings.) including public tongue-lashings.) 10. 10. Get physical! “Co-location” may well be the most Get physical! “Co-location” may well be the most powerful “culture change lever.”powerful “culture change lever.” Physical X-functional Physical X-functional proximity is almost a … guarantee … of remarkably improved proximity is almost a … guarantee … of remarkably improved cooperation—to aid this one needs flexible workspaces that cooperation—to aid this one needs flexible workspaces that can be mobilized for a team in a flash.can be mobilized for a team in a flash.11. 11. Establish “adhocracy” as S.O.P.Establish “adhocracy” as S.O.P. To improve the new “X- To improve the new “X-functional Culture” (and business results), little XF teams functional Culture” (and business results), little XF teams should be formed on the spot to deal with an urgent issue—should be formed on the spot to deal with an urgent issue—they may live for but ten days, but it helps the XF habit, they may live for but ten days, but it helps the XF habit, making it normal to be “working the XF way.”making it normal to be “working the XF way.”

XFX/ Typical XFX/ Typical SocialSocial Accelerators Accelerators

12. Early project “management” experience. Within days, 12. Early project “management” experience. Within days, literally, of coming aboard folks should be “running” some bit literally, of coming aboard folks should be “running” some bit of a bit of a bit a project, working with folks from other of a bit of a bit a project, working with folks from other functions—hence, “all this” becomes as natural as breathing.functions—hence, “all this” becomes as natural as breathing.13. Work proactively to give as large as possible numbers of 13. Work proactively to give as large as possible numbers of people temporary assignments in other functions—especially people temporary assignments in other functions—especially Finance.Finance.14. “Get ’em out with the customer.” Rarely does the 14. “Get ’em out with the customer.” Rarely does the accountant or bench scientist call on the customer. Reverse accountant or bench scientist call on the customer. Reverse that. Give everyone more or less regular “customer-facing that. Give everyone more or less regular “customer-facing experiences.” She or he learns quickly that the customer is not experiences.” She or he learns quickly that the customer is not interested in our in-house turf battles! interested in our in-house turf battles! 15. Consider creating a special role, or even position. Specialty 15. Consider creating a special role, or even position. Specialty chemical company Buckman Labs established chemical company Buckman Labs established “knowledge “knowledge transfer facilitatorstransfer facilitators,,”” effectively former “middle managers,” effectively former “middle managers,” with 100% of discretionary pay based on success at spurring with 100% of discretionary pay based on success at spurring integration across previously impermeable barriers.integration across previously impermeable barriers.

XFX/: Typical XFX/: Typical SocialSocial Accelerators Accelerators

16. Formal evaluations. Everyone, starting with the receptionist, 16. Formal evaluations. Everyone, starting with the receptionist, should have a significant XF rating component in their evaluation. should have a significant XF rating component in their evaluation. (The “XFX Performance” should be among the Top 3 items in all (The “XFX Performance” should be among the Top 3 items in all managers’ evaluations.)managers’ evaluations.)

17. 17. Every functional unit should have strict and Every functional unit should have strict and extensive measures of “customer satisfaction” extensive measures of “customer satisfaction” based on evaluations from other functions of based on evaluations from other functions of its usefulness and effectiveness and value-its usefulness and effectiveness and value-added to the enterprise as a whole. added to the enterprise as a whole. 18. Demand XF experience for, especially, senior jobs. For example, 18. Demand XF experience for, especially, senior jobs. For example, the U.S. military requires all would-be generals and admirals to have the U.S. military requires all would-be generals and admirals to have served a full tour in a job whose only goals were cross-functional served a full tour in a job whose only goals were cross-functional achievements.achievements.19. “Deep dip.” Dive three levels down in the organization to fill a 19. “Deep dip.” Dive three levels down in the organization to fill a senior role with some one who has been noticeably pro-active on senior role with some one who has been noticeably pro-active on adding value via excellent cross-functional integration. adding value via excellent cross-functional integration. 20. XFX is … PERSONAL … as well as about organizational 20. XFX is … PERSONAL … as well as about organizational effectiveness. PXFX (Personal XFX) is arguably the #1 Accelerant to effectiveness. PXFX (Personal XFX) is arguably the #1 Accelerant to personal success—in terms of organizational career, freelancer/Brand personal success—in terms of organizational career, freelancer/Brand You, or as entrepreneur. You, or as entrepreneur.

21. 21. Excellence!Excellence! There is a “State of XF Excellence” per se. Talk There is a “State of XF Excellence” per se. Talk it up constantly. Pursue it. Aspire to nothing less.it up constantly. Pursue it. Aspire to nothing less.

EXPLICITLYEXPLICITLY & & VISIBLYVISIBLY & & RELENTLESSLYRELENTLESSLY MANAGE MANAGE

TO XFX STANDARD!TO XFX STANDARD!

ONE DAMN ACT OF XFX ONE DAMN ACT OF XFX ENHANCEMENT ENHANCEMENT

EVERYEVERY DAY! DAY!

““Allied commands depend on Allied commands depend on mutual confidence mutual confidence

and this confidence is and this confidence is gained, above all gained, above all

through thethrough the

develodeveloppmentment ofof friendshifriendshippss.”.”

——General D.D. Eisenhower, General D.D. Eisenhower, Armchair GeneralArmchair General* *

*“Perhaps his most outstanding ability [at West Point]*“Perhaps his most outstanding ability [at West Point]

was the ease with which was the ease with which he made friends and earned he made friends and earned the trust of fellow cadets who came from the trust of fellow cadets who came from

widelwidelyy varied back varied backggroundsrounds; it was a quality that would pay ; it was a quality that would pay great dividends during his future coalition command.”great dividends during his future coalition command.”

““The capacity to develop close and The capacity to develop close and enduring relationships is the mark enduring relationships is the mark of a leader. of a leader. UnfortunatelUnfortunatelyy, man, manyy

leaders of major comleaders of major comppanies believe anies believe their their jjob is to create the strateob is to create the strategy,gy,

ororgganization structure and anization structure and ororgganizational anizational pprocessesrocesses——then then

thetheyy just dele just deleggate the work to be ate the work to be done, remainindone, remainingg aloof from the aloof from the

people doinpeople doingg the work the work.”.” —Bill George,—Bill George, Authentic LeadershipAuthentic Leadership

““XFX”: Friendship drivenXFX”: Friendship driven!!

InnovateInnovate or Die: or Die:

Measure It!Measure It!

Innovation IndexInnovation Index:: How many of your Top 5Top 5

Strategic Initiatives/Key Projects score 88 or or higherhigher (out of 10) on a

“Weird”“Weird”//“Profound”“Profound”/ / “Wow”“Wow”//“Game-“Game-

changer”changer” Scale? (At least 3???)

Innovation IndexInnovation Index:: Move Move every project (definition) every project (definition)

22 notches up on the notches up on the

“WOW Scale”“WOW Scale”

… … THISTHIS WEEKWEEK. .

InnovateInnovate or Die: or Die:

Ubiquitous!Ubiquitous!

Iron Innovation Equality Law:Iron Innovation Equality Law: The quality and The quality and

quantity and quantity and imaginativenessimaginativeness

of innovation shall be of innovation shall be the same in all the same in all

functionsfunctions —e.g., in HR and —e.g., in HR and purchasing as much as in marketing or purchasing as much as in marketing or

product development.*product development.*

VALUE-ADDED VALUE-ADDED STRATEGIESSTRATEGIES

TGRs:TGRs:8/808/80

CustomersCustomers describing their service describing their service

experience as “superior”: experience as “superior”: 88%%ComComppaniesanies describing describing

the service experience they provide the service experience they provide asas

“ “superior”: superior”: 8080%%——Source: Bain & Company survey of 362 companies, reported in John DiJulius,Source: Bain & Company survey of 362 companies, reported in John DiJulius,

What's the Secret to Providing a World-class Customer Experience?What's the Secret to Providing a World-class Customer Experience?

STUNNING.STUNNING.

Conveyance: Kingfisher Air Conveyance: Kingfisher Air Location: Approach to New DelhiLocation: Approach to New Delhi

““May I clean May I clean your glasses, your glasses,

sir?”sir?”

On a Mumbai to Delhi flight, as we began On a Mumbai to Delhi flight, as we began our approach the flight attendant came our approach the flight attendant came down the aisle in business class and asked down the aisle in business class and asked us if we wished to have our glasses cleaned. us if we wished to have our glasses cleaned. No joke, that’s the sort of “little” thing one No joke, that’s the sort of “little” thing one

remembers … remembers … for a for a lifetimelifetime..

Conveyance: Southwest Airlines Conveyance: Southwest Airlines Location: Boarding, Albany NYLocation: Boarding, Albany NY

““May I help May I help you down you down

the jetway.”the jetway.”

I think I’ve chalked up about 10,000 flight legs. I think I’ve chalked up about 10,000 flight legs. Not much new under the sun for me. But then Not much new under the sun for me. But then came the day in 2013 …came the day in 2013 …

Plane (Southwest) about to board at BWI. Plane (Southwest) about to board at BWI. Three or four wheelchairs lined up at the gate. Three or four wheelchairs lined up at the gate. Crew arrives. Pilot turns to the older woman in Crew arrives. Pilot turns to the older woman in the 1the 1stst wheelchair in the line and says, “May I wheelchair in the line and says, “May I help you down the jetway?” She says yes. He help you down the jetway?” She says yes. He does.does.

Big deal?Big deal?To me, … YES.To me, … YES.

And I contend such behavior is a crystal clear And I contend such behavior is a crystal clear byproduct of Kelleher’s unswerving, byproduct of Kelleher’s unswerving, 4-decade commitment to his people.4-decade commitment to his people.

(The “BIG DUH”: Treat the staff well and (The “BIG DUH”: Treat the staff well and they’ll treat the customer well. Then sit back they’ll treat the customer well. Then sit back and count the profit.)and count the profit.)

““Courtesies of a small Courtesies of a small and trivial character and trivial character are the ones which are the ones which

strike deepest in the strike deepest in the grateful and grateful and

appreciating heart.”appreciating heart.”

—Henry Clay

7X.7X. 7:30A-8:00P. 7:30A-8:00P.

F12A.F12A.7:30AM = 7:15AM.7:30AM = 7:15AM.8:00PM = 8:15PM.8:00PM = 8:15PM.

(2,000,000)(2,000,000)Source: Vernon Hill, Source: Vernon Hill, Fans, Not CustomersFans, Not Customers

The Commerce Bank ModelThe Commerce Bank Model

“EVERY COMPUTER AT COMMERCE BANK HAS A “EVERY COMPUTER AT COMMERCE BANK HAS A

SPECIALSPECIAL REDRED KEYKEY ON IT ON IT

THAT SAYS, ‘FOUND SOMETHING STUPID THAT THAT SAYS, ‘FOUND SOMETHING STUPID THAT WE ARE DOING THAT INTERFERES WITH OUR WE ARE DOING THAT INTERFERES WITH OUR ABILITY TO SERVICE THE CUSTOMER? TELLABILITY TO SERVICE THE CUSTOMER? TELL

US ABOUT IT, AND IF WE AGREE, WE WILL GIVE US ABOUT IT, AND IF WE AGREE, WE WILL GIVE YOU $50.’”YOU $50.’”

Source: Source: Fans! Not customers. How Commerce Bank Created a Super-growth Fans! Not customers. How Commerce Bank Created a Super-growth Business in a No-growth IndustryBusiness in a No-growth Industry, Vernon Hill & Bob Andelman, Vernon Hill & Bob Andelman

It It BEGINSBEGINS (and (and ENDSENDS) )

in the …in the …

PARKINGPARKING LOTLOT**

*Disney*Disney

Don’t like it?Don’t like it?Don’t pay!Don’t pay!

Source: Graniterock Co.Source: Graniterock Co.

<TG<TGWandand … …

>TG>TGRR(Things Gone (Things Gone WRONG-Things Gone -Things Gone RIGHTRIGHT))

Quality—minimizing things gone wrong—is Quality—minimizing things gone wrong—is of the utmost importance. But fact is, most of the utmost importance. But fact is, most things work pretty well these days. Hence things work pretty well these days. Hence the emphasis associated with differentiation the emphasis associated with differentiation switches to the other side of the equation: switches to the other side of the equation:

TGRs/THINGS GONE RIGHTTGRs/THINGS GONE RIGHT..

The trick is to focus—The trick is to focus—systematicallysystematically—on adding to the TGR population.—on adding to the TGR population.

““ExExpperienceseriences are as distinct are as distinct from servicesfrom services

as services are as services are from goods.”from goods.”

—Joe Pine & Jim Gilmore, —Joe Pine & Jim Gilmore, The Experience Economy: The Experience Economy: Work Is Theatre & Every Business a StageWork Is Theatre & Every Business a Stage

““Experience” is, say, well beyond Experience” is, say, well beyond “customer satisfaction.” (In fact, “customer satisfaction.” (In fact, of an entirely different of an entirely different character.) It is about the totality character.) It is about the totality of the aesthetics and of the aesthetics and functionality of dealing with your functionality of dealing with your organization.organization.

CCXXO*O**Chief e*Chief eXXperience Officerperience Officer

I’m urging a I’m urging a “C-level”“C-level” position. position.(Or the equivalent thereto—evn in a 6-(Or the equivalent thereto—evn in a 6-person unit.)person unit.)

““Experience”:Experience”: The Law of Ubiquity The Law of Ubiquity

The experience notion applies to the The experience notion applies to the internal function dealing with its internal internal function dealing with its internal customers as much as it does with customers as much as it does with interactions with outsiders.interactions with outsiders.

TGRTGRSS..MANAGEMANAGE ’EM. ’EM.

MEASUREMEASURE ’EM. ’EM.***I use “manage-measure” a lot. Translation: These are*I use “manage-measure” a lot. Translation: These are

not “soft” ideas; they are exceedingly important things not “soft” ideas; they are exceedingly important things that can be managed—AND measured. that can be managed—AND measured.

TGRs:TGRs: 3 Minutes3 Minutes

““I regardI regard aappoloologgizinizing g as the as the most magical, healing, most magical, healing,

restorative gesture human restorative gesture human beings can make. It is thebeings can make. It is the

centercenterppieceiece of my of my work with executives who work with executives who

want to get better.”want to get better.”

——Marshall GoldsmithMarshall Goldsmith, What Got You Here Won’t Get You There: , What Got You Here Won’t Get You There: How Successful People Become Even More Successful. How Successful People Become Even More Successful.

““Centerpiece” is a mouthful. Centerpiece” is a mouthful. (And Goldsmith has few if any peers as (And Goldsmith has few if any peers as an executive coach. Hence: Take heed.)an executive coach. Hence: Take heed.)

Relationships (of all varieties): THERE ONCE THERE ONCE WAS A TIME WHEN A WAS A TIME WHEN A

THREETHREE--MINUTEMINUTE PHONEPHONE CALLCALL WOULD WOULD

HAVE AVOIDED SETTING OFF THE HAVE AVOIDED SETTING OFF THE DOWNWARD SPIRAL THAT DOWNWARD SPIRAL THAT RESULTED IN A COMPLETE RESULTED IN A COMPLETE

RUPTURE.RUPTURE.**

*Divorce, loss of a BILLION $$$ aircraft sale, etc., etc.*Divorce, loss of a BILLION $$$ aircraft sale, etc., etc.

I call this an … I call this an … “IRON LAW.”“IRON LAW.”

THE PROBLEM IS THE PROBLEM IS RARELY/RARELY/NEVERNEVER THE THE

PROBLEM. THEPROBLEM. THE

RESPONSERESPONSE TO THE TO THE PROBLEM INVARIABLY PROBLEM INVARIABLY ENDS UP BEING THE ENDS UP BEING THE

REAL PROBLEM.REAL PROBLEM.(OPPORTUNITY)(OPPORTUNITY).

Another … Another … “IRON LAW.”“IRON LAW.”

TGRs:TGRs: K = R = K = R =

PP

K = R = K = R = PP

Kindness = Kindness = Repeat Business =Repeat Business =

Profit.Profit.

K = R = P/Kindness = Repeat business = ProfitK = R = P/Kindness = Repeat business = Profit

Kindness:Kindness:

Kind.Kind.Thoughtful.Thoughtful.Decent. Decent. Caring. Caring. Attentive.Attentive.Engaged.Engaged.Listens well/obsessively.Listens well/obsessively.Appreciative.Appreciative.Open.Open.Visible.Visible.Honest.Honest.Responsive.Responsive.On time all the time.On time all the time.Apologizes with dispatch for screw-ups.Apologizes with dispatch for screw-ups.““Over”-reacts to screw-ups of any magnitude.Over”-reacts to screw-ups of any magnitude.““Professional” in all dealings.Professional” in all dealings.Optimistic.Optimistic.Understands that kindness to staff breeds kindness to Understands that kindness to staff breeds kindness to others/outsiders.others/outsiders.Applies throughout the “supply chain.”Applies throughout the “supply chain.”Applies to 100% of customer’s staff.Applies to 100% of customer’s staff.Explicit part of values statement.Explicit part of values statement.Basis for evaluation of 100% of our staff.Basis for evaluation of 100% of our staff.

"Let's not forget "Let's not forget that small that small

emotions are the emotions are the great captains of great captains of our lives."our lives." –—Van Gogh–—Van Gogh

Social Business/ Social Business/ Customer Customer

EngagementEngagement

““Customer engagement is Customer engagement is moving from relatively isolated moving from relatively isolated market transactions to deeply market transactions to deeply connected and sustained social connected and sustained social relationships. relationships. This basic chanThis basic changge e in how we do business will make in how we do business will make

an iman imppact on act on jjust about ust about evereveryythinthingg we do we do.”.”

Social Business By Design: Transformative Social Media StrategiesSocial Business By Design: Transformative Social Media Strategies For the Connected CompanyFor the Connected Company —Dion Hinchcliffe & Peter Kim —Dion Hinchcliffe & Peter Kim

Welcome to the Age of Social Media:Welcome to the Age of Social Media: “What used to be ““What used to be “wordword ofof

mouthmouth” is now “” is now “wordword ofof mousemouse.” You are either .” You are either

creating brand ambassadors creating brand ambassadors or brand terrorists doing or brand terrorists doing

brand assassination.”brand assassination.”——John DiJulius, John DiJulius, The Customer Service Revolution: Overthrow The Customer Service Revolution: Overthrow

Conventional Business, Inspire Employees, and Change the WorldConventional Business, Inspire Employees, and Change the World

Not overstated.Not overstated.

Welcome to the Age of Social Media:Welcome to the Age of Social Media: “It “It takes 20 years to takes 20 years to

build a reputation build a reputation and five minutes to and five minutes to ruin it.ruin it. Also, the Internet and Also, the Internet and

technology have made customers more technology have made customers more demanding., and they expect demanding., and they expect

information, answers, products, information, answers, products, responses, and resolutions sooner than responses, and resolutions sooner than

ASAP.”ASAP.” —John DiJulius, —John DiJulius, The Customer Service RevolutionThe Customer Service Revolution

Not overstated.Not overstated.

Welcome to the Age of Social Media:Welcome to the Age of Social Media:

“The customer is “The customer is in in comcomppletelete control of control of

communication.”communication.”——John DiJulius, John DiJulius, The Customer Service Revolution: Overthrow The Customer Service Revolution: Overthrow

Conventional Business, Inspire Employees, and Change the WorldConventional Business, Inspire Employees, and Change the World

Not overstated.Not overstated.

““I would rather enI would rather enggaagge in a e in a Twitter conversation with a Twitter conversation with a

sinsinggle customer than see our le customer than see our comcomppananyy attem attemppt to attract t to attract the attention of millions in a the attention of millions in a

coveted Sucoveted Supper Bowl er Bowl commercialcommercial.. Why? Because having people discuss your Why? Because having people discuss your

brand directly with you, actually connecting one-to-one, is far more valuable—brand directly with you, actually connecting one-to-one, is far more valuable—not to mention far cheaper!. …not to mention far cheaper!. …

““Consumers Wnt to discuss what they like, the companies they support, and Consumers Wnt to discuss what they like, the companies they support, and the organizations and leaders they resent. They want a community. They want the organizations and leaders they resent. They want a community. They want

to be heard. …to be heard. …““[I]f we engage employees, customers, and prospective customers in [I]f we engage employees, customers, and prospective customers in

meaningful dialogue about their lives, challenges, interests, and concerns, we meaningful dialogue about their lives, challenges, interests, and concerns, we can build a community of trust, loyalty, and—possibly over time—help them can build a community of trust, loyalty, and—possibly over time—help them

become advocates and champions for the brand.”become advocates and champions for the brand.”

——Peter Aceto, CEO, Peter Aceto, CEO, TangerineTangerine (from the Foreword to (from the Foreword to A World Gone Social: A World Gone Social: How Companies Must Adapt to SurviveHow Companies Must Adapt to Survive, by Ted Coine & Mark Babbit), by Ted Coine & Mark Babbit)

This extraordinary comment comes from This extraordinary comment comes from a CEO in … financial services. (Tangerine a CEO in … financial services. (Tangerine is a very successful Canadian bank.)is a very successful Canadian bank.)

““Amy HowellAmy Howell [social marketer extraordinaire, [social marketer extraordinaire,

founder of Howell Marketing]founder of Howell Marketing] ignites ignites epidemics. In a good way, epidemics. In a good way,

of course. Epidemics of of course. Epidemics of excitement. Epidemics of excitement. Epidemics of

business connections. business connections. Epidemics of influence.”Epidemics of influence.”

——Mark Schaeffer,Mark Schaeffer, ROI/Return on Influence: The Revolutionary ROI/Return on Influence: The Revolutionary Power of Klout, Social Scoring, and Influence MarketingPower of Klout, Social Scoring, and Influence Marketing

There is an entire industry of those who There is an entire industry of those who know how to play this game. The bank of know how to play this game. The bank of experiences—good and bad—is growing experiences—good and bad—is growing exponentially.exponentially.

Social Business/Social Business/New Ball GameNew Ball Game

ZMOTZMOT:: ZERO Moment Of Truth/Google ZERO Moment Of Truth/Google**

““You know what a ‘moment of truth’ is. It’s when a prospective customer You know what a ‘moment of truth’ is. It’s when a prospective customer decides either to take the next step in the purchase funnel, or to exit and decides either to take the next step in the purchase funnel, or to exit and

seek other options. … But what is a ‘zero moment of truth’? Many seek other options. … But what is a ‘zero moment of truth’? Many behaviors can serve as a zero moment of truth, but what binds them behaviors can serve as a zero moment of truth, but what binds them

together is that the purchase is being researched and considered before together is that the purchase is being researched and considered before the prospect even enters the classic sales funnel … In its research, the prospect even enters the classic sales funnel … In its research,

Google found thatGoogle found that 84%84% of shoppers of shoppers

said the new mental model, ZMOT, shapes their decisions. …” said the new mental model, ZMOT, shapes their decisions. …”

——Jay Baer, Jay Baer, Youtility: Why Smart Marketing Is About Help, Not HypeYoutility: Why Smart Marketing Is About Help, Not Hype

*See www.zeromomentoftruth.com for ZMOT in booklength format*See www.zeromomentoftruth.com for ZMOT in booklength format

The conventional game is over—before it The conventional game is over—before it starts.starts.

Social Business/Social Business/Re-Formatting Re-Formatting

EnterpriseEnterprise

*Be nimble or be dead*Be nimble or be dead*Go nano or go home *Go nano or go home [Nano corps, or fluid[Nano corps, or fluid

self-forming groups that move from one organization to another, self-forming groups that move from one organization to another, will get most projects done.] will get most projects done.]

*Management is unnecessary*Management is unnecessary*Managers cost too much*Managers cost too much*How far can you scale flat?*How far can you scale flat?*Small is here to stay*Small is here to stay*Small will be the bane of *Small will be the bane of largelarge

Source: Ted Coine & Mark Babbit,Source: Ted Coine & Mark Babbit, A World Gone Social: How Companies Must A World Gone Social: How Companies Must Adapt to SueviveAdapt to Suevive

There is more than a smidgeon of There is more than a smidgeon of exaggeration here. On the other hand, it exaggeration here. On the other hand, it is directionally correct—and these is directionally correct—and these concepts must be “front of mind.” They concepts must be “front of mind.” They are no longer pie-in-the-sky.are no longer pie-in-the-sky.

The game is on!The game is on!The stakes are enormous!The stakes are enormous!

Seven Characteristics of the Social EmployeeSeven Characteristics of the Social Employee

1. 1. Engaged Engaged 2. 2. Expects Integration of the Expects Integration of the

Personal and ProfessionalPersonal and Professional3. 3. Buys Into the Brand’s StoryBuys Into the Brand’s Story4. 4. Born CollaboratorBorn Collaborator5. 5. ListensListens6. 6. Customer-CentricCustomer-Centric7. 7. Empowered Change AgentEmpowered Change Agent

Source: Cheryl Burgess & Mark Burgess, Source: Cheryl Burgess & Mark Burgess, The Social EmployeeThe Social Employee

The “social business model” demands as The “social business model” demands as table stakes a degree of table stakes a degree of “empowerment”-employee engagement-“empowerment”-employee engagement-employee autonomy unimagined a scant employee autonomy unimagined a scant five years ago.five years ago.

Biz 2014: Get Aboard the “S-Train”Biz 2014: Get Aboard the “S-Train”

SMSM//Social Media.Social Media.

SXSX//Social eXecutives.Social eXecutives.

SESE//Social Employees.Social Employees.

SOSO//Social Social Organization.Organization.

SBSB//Social Business.Social Business.

SB/SESB/SE >> SM*>> SM*

*“Social *“Social BUSINESSBUSINESS”/“Social ”/“Social EMPLOYEEEMPLOYEE” >> “Social Media”” >> “Social Media”

““Social” is a lot more than “social Social” is a lot more than “social

media.” And that is … media.” And that is … GROSS GROSS UNDERSTATEMENTUNDERSTATEMENT..

(BIG) Data =(BIG) Data =

(BIG) $$$(BIG) $$$!!

““Caesars’ Caesars’ Entertainment Entertainment have bet have bet

their future on their future on harvestinharvestingg ppersonal ersonal

data rather than data rather than develodeveloppiningg the fanciest the fanciest

pproroppertieserties.”.” —Adam Tanner, —Adam Tanner,

What Stays in Vegas: What Stays in Vegas: The World of Personal Data—Lifeblood of Big The World of Personal Data—Lifeblood of Big Business—and the End of Privacy as We Know itBusiness—and the End of Privacy as We Know it

The (absurdly fine-grained) The (absurdly fine-grained) data about the guests/ data about the guests/ players is worth more than players is worth more than the facility.the facility.

Welcome to the New World Order.Welcome to the New World Order.(Re-read. Think about it.)(Re-read. Think about it.)

PersadoPersado (vs. copywriter): emotion words, product (vs. copywriter): emotion words, product characteristics, “call to action,” position of text, characteristics, “call to action,” position of text,

imagesimages

Up To $250 To Spend On Up To $250 To Spend On All Ships In AllAll Ships In All

Destinations. 2 Days LeftDestinations. 2 Days Left

(1.3%)(1.3%)vs.vs.

No kidding! You Qualify toNo kidding! You Qualify toExperience An IncredibleExperience An Incredible

Vacation With Us :-)Vacation With Us :-)

(4.1) (4.1)

“A creative person is good but random. We’ve taken “A creative person is good but random. We’ve taken the randomness out by building an ontology of the randomness out by building an ontology of

language”language”——Lawrence Whittle, head of salesLawrence Whittle, head of sales

Source: Wall Street Journal/ Source: Wall Street Journal/ 0825.14/ “It’s Finally Time to Take AI Seriously”0825.14/ “It’s Finally Time to Take AI Seriously”

An algorithm writes a more effective ad An algorithm writes a more effective ad than a human—given the vast horde of than a human—given the vast horde of data on prior reactions to various words, data on prior reactions to various words, sentiments, etc.sentiments, etc.

““Flash forward to dystopia. You work in a chic Flash forward to dystopia. You work in a chic cubicle, sucking chicken-flavor sustenance fromcubicle, sucking chicken-flavor sustenance from

a tube. You’re furiously maneuvering with a a tube. You’re furiously maneuvering with a joystick … Your boss stops by and gives you a joystick … Your boss stops by and gives you a

look. look. ‘We need to talk about your loyalty to this ‘We need to talk about your loyalty to this

company.’company.’ The organization you work for has deduced that you

are considering quitting. It predicts your plans and

intentions, possibly before you have even conceived them.” —Eric —Eric

Siegel,Siegel, Predictive Analytics: Predictive Analytics: The Power to Predict Who Will Click, Buy, Lie, or Die The Power to Predict Who Will Click, Buy, Lie, or Die (based on a real case, an (based on a real case, an

HP “Flight risk” PA model developed by HR, with astronomical savings potential)HP “Flight risk” PA model developed by HR, with astronomical savings potential)

Algorithmic invasion of HR is underway.Algorithmic invasion of HR is underway.

““Algorithms have already written symphonies Algorithms have already written symphonies as moving as those composed by as moving as those composed by

Beethoven, picked through legalese , picked through legalese

with the deftness of a senior with the deftness of a senior law partner, diagnosed patients with more , diagnosed patients with more

accuracy than a accuracy than a doctor, written news , written news

articles with the smooth hand of a seasonedarticles with the smooth hand of a seasoned reporter, and driven vehicles on urban , and driven vehicles on urban

highways with far better control than a human highways with far better control than a human

driver.”.”

——Christopher Steiner,Christopher Steiner, Automate This: How Algorithms Came to Rule the World

DESIGNDESIGN!!

Design Design RulesRules!!

APPLEAPPLE market cap market cap > Exxon Mobil*> Exxon Mobil*

*August 2011 (0410.15: $740B, 2X #2)*August 2011 (0410.15: $740B, 2X #2)

When Apple’s market cap shot past When Apple’s market cap shot past Exxon Mobil’s, there was no longer any Exxon Mobil’s, there was no longer any

issue about … issue about … “DESIGN “DESIGN POWER.”POWER.” Now only Now only

idiots will ignore it—in enterprises of idiots will ignore it—in enterprises of any and every size and flavor.any and every size and flavor.

““YouYou knowknow a a designdesign isis goodgood

whenwhen you you want want to to licklick itit.”.” —Steve Jobs—Steve Jobs

Source: Source: Design: Intelligence Made VisibleDesign: Intelligence Made Visible,, Stephen Bayley & Terence ConranStephen Bayley & Terence Conran

““Typically, design is a Typically, design is a vertical stripe in the vertical stripe in the chain of events in a chain of events in a

product’s delivery. product’s delivery. [At [At

Apple, it’s]Apple, it’s] a long, horizontal a long, horizontal stripe, where design is stripe, where design is

part of every part of every conversation.” conversation.”

——Robert Brunner, former Apple design chiefRobert Brunner, former Apple design chief

Design at Apple intrudes into every nook Design at Apple intrudes into every nook and cranny. While the average firm is not and cranny. While the average firm is not and cannot be Apple, there is much to and cannot be Apple, there is much to learn about the value of pervasive learn about the value of pervasive “design mindfulness.”“design mindfulness.”

Apple design:Apple design: “Huge “Huge degree of degree of

carecare.”.” —Ian Parker, —Ian Parker, New YorkerNew Yorker, 23 March 2015, on Jony Ives, 23 March 2015, on Jony Ives

““Steve and Jony would discuss corners Steve and Jony would discuss corners for hours and hours.” for hours and hours.” —Laurene Powell Jobs—Laurene Powell Jobs

““Apple’s great design secret Apple’s great design secret may be avoiding insult. Their may be avoiding insult. Their

thoughtfulness is a sign of thoughtfulness is a sign of respect. Elegance in objects is respect. Elegance in objects is

everybody’s right, and it everybody’s right, and it shouldn’t cost more than shouldn’t cost more than ugliness. So much of our ugliness. So much of our

manufacturing environment manufacturing environment testifies to carelessness.”testifies to carelessness.” —Paola —Paola

Antonelli, MOMAAntonelli, MOMA

““He craved products that He craved products that didn’t force adjustments didn’t force adjustments of behavior, that gave of behavior, that gave

people a feeling of people a feeling of gratitude that someone gratitude that someone

else thought this through else thought this through in a way that made your in a way that made your

life easier.”life easier.” ——Laurene Powell JobsLaurene Powell Jobs

I believe much of the “Apple message” I believe much of the “Apple message” applies to firms of every flavor and size. applies to firms of every flavor and size. Painstaking “aesthetic care” involving Painstaking “aesthetic care” involving every aspect of the enterprise, process every aspect of the enterprise, process

and product or service—and product or service—ifif it becomes a it becomes a

way of life—is invaluable, from the corner way of life—is invaluable, from the corner store to the accountancy to the car store to the accountancy to the car dealership to the usual suspects.dealership to the usual suspects.

Ann Landers as management guru/Ann Landers as management guru/three criteria for products, projects, a three criteria for products, projects, a communication, etc.: communication, etc.:

Good.Good. True.True. Helpful.Helpful.

Don’t flip by this slide. Ponder it. Alone Don’t flip by this slide. Ponder it. Alone and with others. Regardless of your job and with others. Regardless of your job or rank.or rank.

““Design is Design is

treated like treated like a relia religgionion at at

BMW.”BMW.” —Fortune—Fortune

““With its carefully conceived mix of colors and textures, With its carefully conceived mix of colors and textures,

aromas and music,aromas and music, STARBUCKSSTARBUCKS is more is more indicative of our era than the iMac. It is to the indicative of our era than the iMac. It is to the AAggee ofof

AestheticsAesthetics what McDonald’s was to the what McDonald’s was to the AAggee ofof ConvenienceConvenience or Ford was to the Age of Mass Production— or Ford was to the Age of Mass Production—

the touchstone success story, the exemplar of … the the touchstone success story, the exemplar of … the

aesthetic imperative. …aesthetic imperative. … ‘Every Starbucks ‘Every Starbucks store is carefully designed to store is carefully designed to

enhance the quality of everything enhance the quality of everything the customers see, touch, hear, the customers see, touch, hear,

smell or taste,’smell or taste,’ writes CEO Howard Schultz.”writes CEO Howard Schultz.” —Virginia Postrel, —Virginia Postrel, The Substance of Style: How the Rise of AestheticThe Substance of Style: How the Rise of Aesthetic

Value Is Remaking Commerce, Culture and ConsciousnessValue Is Remaking Commerce, Culture and Consciousness

CCDDOO***Chief *Chief DDesignesign Officer Officer

A … A … Chief Design OfficerChief Design Officer … is … is a clear need in any/every a clear need in any/every sizeable organization.sizeable organization.

And some form of CDO assignment is/can And some form of CDO assignment is/can be of abiding importance in the smallest of be of abiding importance in the smallest of firms. firms.

Again: Again: RegardlessRegardless of industry. of industry.

Hypothesis:Hypothesis: DESIGNDESIGN is the is the pprincirincippalal

differencedifference

between between lovelove

and and hate!*hate!**Not “like” and “dislike”

Design is …Design is …

NEVERNEVER neutralneutral..

Design, though emphasizing Design, though emphasizing functionality as well as aesthetics, is functionality as well as aesthetics, is primarily about an … primarily about an …

emotional reactionemotional reaction … to … to a product or service. a product or service.

Not “like” or “dislike.” Not “like” or “dislike.” Rather: “Love” or “hate.”Rather: “Love” or “hate.”

Powerful stuff! Powerful stuff!

HHypypothesisothesis: Men : Men

cannotcannot design for women’s design for women’s

needsneeds!!??!!??

Sooooo …..Sooooo …..

Women BUY Women BUY (Everything)(Everything)!!

““Forget CHINA, Forget CHINA, INDIA and the INDIA and the

INTERNET: Economic INTERNET: Economic Growth Is Driven by Growth Is Driven by

WOMENWOMEN.”.”

Source: Headline, Economist

Not an iota of exaggeration.Not an iota of exaggeration.(But many a missed opportunity.)(But many a missed opportunity.)

W W > > 2X2X (C + (C + I)*I)*

**“Women now drive the global economy. Globally, they control about “Women now drive the global economy. Globally, they control about $20 trillion in consumer spending, and that figure could climb as high as $20 trillion in consumer spending, and that figure could climb as high as

$28 trillion$28 trillion in the next five years. in the next five years.

Their $13 trillion in total yearly earnings could reach $18 trillion in the Their $13 trillion in total yearly earnings could reach $18 trillion in the same period.same period. In aggregate, women represent a growth market bigger than China and India combined—more In aggregate, women represent a growth market bigger than China and India combined—more than twice as big in fact. Given those numbers, it would be foolish to ignore or underestimate the female consumer. than twice as big in fact. Given those numbers, it would be foolish to ignore or underestimate the female consumer.

And yet many companies do just that—even ones that are confidant that they have a winning strategy when it And yet many companies do just that—even ones that are confidant that they have a winning strategy when it comes to women. Consider Dell’s …”comes to women. Consider Dell’s …”

Source: Michael Silverstein and Kate Sayre, “The Female Economy,” Source: Michael Silverstein and Kate Sayre, “The Female Economy,” HBRHBR, 09.09, 09.09

$28,000,000,000,00$28,000,000,000,000.0.

(Lots of ZEROS.)(Lots of ZEROS.)

““Since 1970, women have held two out of Since 1970, women have held two out of three new jobs. According to the three new jobs. According to the EconomistEconomist, ,

which compiled studies from a number of which compiled studies from a number of research firms, the arrival of this new research firms, the arrival of this new

workforce has done more to encourage workforce has done more to encourage global growth than increases in capital global growth than increases in capital

investment and improvements in investment and improvements in productivity. ‘Over the last 10 years the productivity. ‘Over the last 10 years the increase in women [in the workplace] in increase in women [in the workplace] in developed countries has made more of a developed countries has made more of a contribution to global growth than China contribution to global growth than China

has,’ concludes the British weekly.”has,’ concludes the British weekly.”

Source: “Women Are Drivers of Global Growth,” Aude Zieseniss de Thuin, Source: “Women Are Drivers of Global Growth,” Aude Zieseniss de Thuin,

founder and president of the Women’s Forum for the Economy and Society (founder and president of the Women’s Forum for the Economy and Society (FTFT))

““Since 1970, women have held two out of Since 1970, women have held two out of three new jobs. According to the three new jobs. According to the EconomistEconomist, ,

which compiled studies from a number of which compiled studies from a number of research firms, the arrival of this new research firms, the arrival of this new

workforce has done more to encourage workforce has done more to encourage global growth than increases in capital global growth than increases in capital

investment and improvements in investment and improvements in productivity. ‘Over the last 10 years the productivity. ‘Over the last 10 years the increase in women [in the workplace] in increase in women [in the workplace] in developed countries has made more of a developed countries has made more of a contribution to global growth than China contribution to global growth than China

has,’ concludes the British weekly.”has,’ concludes the British weekly.”

Source: “Women Are Drivers of Global Growth,” Aude Zieseniss de Thuin, Source: “Women Are Drivers of Global Growth,” Aude Zieseniss de Thuin,

founder and president of the Women’s Forum for the Economy and Society (founder and president of the Women’s Forum for the Economy and Society (FTFT))

““Women areWomen are THETHE majority majority

market”market” —Fara Warner/—Fara Warner/The Power of the PurseThe Power of the Purse

Women as Decision Makers/Various sourcesWomen as Decision Makers/Various sources

Home Furnishings … Home Furnishings … 94%94%Vacations … Vacations … 92%92% (Adventure Travel … 70%/ $55B travel equipment)(Adventure Travel … 70%/ $55B travel equipment)

Houses … Houses … 91%91%D.I.Y. D.I.Y. (major “home projects”)(major “home projects”) … … 80%80%

Consumer Electronics … Consumer Electronics … 51%51% (66% home computers)(66% home computers)

Cars … Cars … 68%68% (influence (influence 90%90%))

AllAll consumerconsumer p purchasesurchases … … 83%83% **

Bank Account … Bank Account … 89%89%Household investment decisions … Household investment decisions … 67%67%Small business loans/biz starts … Small business loans/biz starts … 70%70%

Health Care … Health Care … 80%80%*In the USA women hold *In the USA women hold >50%>50% managerial positions including managerial positions including >50%>50% purchasing officer positions purchasing officer positions; ;

hence women also make the majority of hence women also make the majority of commercialcommercial purchasing decisions. purchasing decisions.

Women as …Women as …

Purchasing agents: Purchasing agents: 55%55%Purchasing managers: Purchasing managers: 42%42%Wholesale/retail buyers: Wholesale/retail buyers: 52%52%Employee health-benefitEmployee health-benefit

plans: plans: 60%60%Source: Martha Barletta/TrendSight Group/0517.11Source: Martha Barletta/TrendSight Group/0517.11

With stats like these, one can see that With stats like these, one can see that women are driving the purchase of the women are driving the purchase of the

bulk of bulk of commercial goodscommercial goods, , not just consumer goods.not just consumer goods.

““The The MOST MOST SIGNIFICANT SIGNIFICANT

VARIABLEVARIABLE inin EVERYEVERY sales situation is thesales situation is the

GENDERGENDER of the buyer, and of the buyer, and more importantly, how the more importantly, how the

salesperson communicates to salesperson communicates to the buyer’s gender.”the buyer’s gender.”

—Jeffery Tobias Halter, Selling to Men, Selling to Women

The Perfect Answer

Jill and Jack buy slacks in black…

Sales/After-sales ProcessSales/After-sales Process

1.    Kick-off  – 1.    Kick-off  – WomenWomen2.    Research – 2.    Research – WomenWomen3.    Purchase  – 3.    Purchase  – Men4.    Ownership – 4.    Ownership – WomenWomen5.    Word-of-mouth – 5.    Word-of-mouth – WomenWomen

Source: Martha Barletta, Source: Martha Barletta, Marketing to Women: How to Increase Your Share of the World’s Largest MarketMarketing to Women: How to Increase Your Share of the World’s Largest Market

Gets a belly laugh in my speeches—and Gets a belly laugh in my speeches—and (almost) all agree it’s true. And while it (almost) all agree it’s true. And while it may be amusing—the consequences, as may be amusing—the consequences, as previously stated, run to trillions of previously stated, run to trillions of dollars.dollars.

(Source: Martha Barletta, The (Source: Martha Barletta, The TrendSight Group.)TrendSight Group.)

The The (ENORMOUS)(ENORMOUS) “Services “Services

Added” Added” OpportunityOpportunity

““Rolls-RoyceRolls-Royce now earns now earns

moremore from tasks such from tasks such as managing clients’ as managing clients’ overall procurement overall procurement

strategies and maintaining strategies and maintaining aerospace engines it sells aerospace engines it sells than it does from making than it does from making

them.”them.”——EconomistEconomist

Read this twice or thrice.Read this twice or thrice.It has happened quickly.It has happened quickly.The implications are wide and deep.The implications are wide and deep.

““You are headed You are headed for commodity for commodity

hell if you don’t hell if you don’t have services.”have services.”

—Lou Gerstner, on IBM’s revolution (1997)—Lou Gerstner, on IBM’s revolution (1997)

IBIBMMtoto

IIBBMM

In the 1990s, with its old businesses in In the 1990s, with its old businesses in retreat, IBM began a rapid & radical retreat, IBM began a rapid & radical transformation from hardware to transformation from hardware to services.services.

““Never mind computers Never mind computers and tech services. and tech services.

IBM’s radical new focus IBM’s radical new focus isis

on revamping on revamping customers’ operationscustomers’ operations—and running them.”—and running them.”

—Headline/ BW—Headline/ BW

PlanetarPlanetary y RainmakerRainmaker--inin--ChiefChief!!

“[CEO Sam] Palmisano’s “[CEO Sam] Palmisano’s strategy is to expand tech’s strategy is to expand tech’s borders by pushing users—borders by pushing users—

and entire industries—and entire industries—towardtoward radicallradically y differentdifferent businessbusiness modelsmodels.. The payoff for IBM would be The payoff for IBM would be

access to an ocean of revenue—Palmisano access to an ocean of revenue—Palmisano

estimates it atestimates it at $$500500 billionbillion aa y yearear ——that technology companies have never been that technology companies have never been

able to touch.”able to touch.” ——FortuneFortune

$50B*$50B**IB*IBMM Global Services/ Global Services/

“Systems integrator of choice”“Systems integrator of choice”

IBM is the poster child of this “movement.” In the IBM is the poster child of this “movement.” In the early ’90s, new CEO Lou Gerstner was ordered by early ’90s, new CEO Lou Gerstner was ordered by the board to break up the company. Before the board to break up the company. Before complying, he made a round-the-world customer complying, he made a round-the-world customer tour. He discovered that his customers were not by tour. He discovered that his customers were not by and large dissatisfied with IBM’s products—and large dissatisfied with IBM’s products—thetheyy were uwere uppset that their vast arraset that their vast arrayy of IBM of IBM pproducts had roducts had not been intenot been integgrated in a warated in a wayy that allowed the client that allowed the client to achieve to achieve ppromised enterromised enterpprise-wide gains in rise-wide gains in business effectivenessbusiness effectiveness. .

Gerstner found a small extant consulting unit—and Gerstner found a small extant consulting unit—and recast it as IBM Global Services; its goal was to use recast it as IBM Global Services; its goal was to use the new tools to enable no less than total enterprise the new tools to enable no less than total enterprise transformation. In surprisingly short order, Global transformation. In surprisingly short order, Global Services became the dog that wags the tail— a Services became the dog that wags the tail— a

$50 billion++$50 billion++ unit, essentially the world’s unit, essentially the world’s largest consultancy, that indeed assists re-largest consultancy, that indeed assists re-imagining/re-inventing/re-positioning their entire imagining/re-inventing/re-positioning their entire firm!firm!

(As to the IB(As to the IBMM on the slide—the “M”/machine is now on the slide—the “M”/machine is now more or less secondary.)more or less secondary.)

UUPPSS toto

UPUPSS

““Big Brown’s New Bag: UPS Aims Big Brown’s New Bag: UPS Aims to Be the Traffic Manager for to Be the Traffic Manager for Corporate America”Corporate America” —Headline/—Headline/BWBW

“UPS wants to take over the sweet “UPS wants to take over the sweet spot in the endless loop of goods, spot in the endless loop of goods,

information and capital that all the information and capital that all the packages packages [it moves][it moves] represent.” represent.” —ecompany.com —ecompany.com

“It’s all about “It’s all about solutionssolutions. We . We work with customers on creating work with customers on creating

and running better, stronger, and running better, stronger, cheaper supply chains.”cheaper supply chains.” —Bob Stoffel, UPS —Bob Stoffel, UPS

senior exec senior exec

UPS still has 10s of thousands of UPS still has 10s of thousands of trucks, but it is also becoming a major trucks, but it is also becoming a major provider of integrated logistics provider of integrated logistics

services—the future is UPservices—the future is UPSS as master as master of the all-important supply chain.of the all-important supply chain.

IDEOIDEO

Product DesignProduct DesignProduct Design Product Design

TrainingTrainingInnovation TrainingInnovation Training

The big company examples are readily The big company examples are readily translatable into the world of smaller translatable into the world of smaller

firms. firms. IDEOIDEO, the peerless product , the peerless product design firm based in Palo Alto, was design firm based in Palo Alto, was asked by (big/very big) clients if its asked by (big/very big) clients if its legendary approach to creativity could legendary approach to creativity could be imported into their firms. The be imported into their firms. The answer was a resounding yes—and answer was a resounding yes—and IDEO now has a thriving business IDEO now has a thriving business helping others improve their creative helping others improve their creative and product development processes.and product development processes.

““The business of selling is not just about matching The business of selling is not just about matching viable solutions to the customers that require them.viable solutions to the customers that require them.

It’s equally about managing It’s equally about managing the change process the the change process the

customer will need to go customer will need to go through to implement the through to implement the solution and achieve the solution and achieve the value promised by the value promised by the

solution.solution. One of the key differentiators of our One of the key differentiators of our position in the market is our attention to managing position in the market is our attention to managing change and making change stick in our customers’ change and making change stick in our customers’

organization.”organization.”—Jeff Thull, —Jeff Thull, The Prime Solution: Close the Value Gap, Increase Margins, and Win the Complex Sale The Prime Solution: Close the Value Gap, Increase Margins, and Win the Complex Sale

AND THE AND THE WINNERS WINNERS

AREN’TAREN’T/ARE/ARE

-1/+1/2-1/+1/2

S&P 500S&P 500

+1/-1*+1/-1*

*Every …*Every … 22 weeksweeks!!Source: Richard Foster (via Rita McGrath/Source: Richard Foster (via Rita McGrath/HBRHBR/12.26.13/12.26.13

I was flabberghasted by this. The S&P I was flabberghasted by this. The S&P 500 defines the USA economy. The 500 defines the USA economy. The BIGGEST of the BIG guys. And yet one BIGGEST of the BIG guys. And yet one

drops off the list … drops off the list … EVERY 2 EVERY 2 WEEKSWEEKS..

Wow!Wow!

“I am often asked by I am often asked by would-be entrepreneurs would-be entrepreneurs seeking escape from life seeking escape from life within huge corporate within huge corporate structures, structures, ‘How do I build a small firm for myself?’ The answer The answer

seems obviousseems obvious … …

Source: Paul Ormerod, Why Most Things Fail: Evolution, Extinction and Economics

“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: BuBuyy a ver a veryy larlarggee

one and one and jjust ust waitwait.”.” —Paul Ormerod, Why Most Things

Fail: Evolution, Extinction and Economics

““Mr. Foster and his McKinsey colleagues Mr. Foster and his McKinsey colleagues collected detailed performance data stretching collected detailed performance data stretching

back back 4040 years for years for 1,0001,000 U.S. companies. U.S. companies. TheTheyy found that found that

NONENONE ofof

the lonthe longg-term survivors mana-term survivors managged ed to outto outpperform the market. Worse, erform the market. Worse, the lonthe longger comer comppanies had been in anies had been in

the database, the worse thethe database, the worse theyy did did.” .” —Financial Times—Financial Times

““Data drawn from the real world Data drawn from the real world attest to a fact that is beyond attest to a fact that is beyond

our control:our control: EVERYTHING IN EXISTENCE TENDS TO DETERIORATE.”

—Norberto Odebrecht, —Norberto Odebrecht, Education Through WorkEducation Through Work

Big company performance is, shall we Big company performance is, shall we say, problematic. (I could provide a say, problematic. (I could provide a hundred more equally compelling hundred more equally compelling slides.)slides.)

AND THE AND THE WINNERS WINNERS

AREN’T/AREN’T/AREARE

Roll Out the Roll Out the

REDRED Carpet! Carpet!

THETHE RED RED CARPET CARPET STORESTORE

(Joel Resnick/Flemington NJ)(Joel Resnick/Flemington NJ)

My favorite company. Provide the red My favorite company. Provide the red carpet for the Oscars, etc., etc., etc.carpet for the Oscars, etc., etc., etc.

They They dominatedominate//ownown their their niche.niche.

Cool.Cool.

VERYVERY cool. cool.

**Basement Systems Inc.Basement Systems Inc. (Larry Janesky/Seymour CT)(Larry Janesky/Seymour CT)

**Dry Basement ScienceDry Basement Science (100,000++ copies!) (100,000++ copies!)

*1990: $0; 2003: $13M; *1990: $0; 2003: $13M;

2010: 2010: $80,000,000$80,000,000

Larry Janesky turns damp moldy Larry Janesky turns damp moldy basements into dry storage areas, basements into dry storage areas, family rooms, etc. He is … family rooms, etc. He is …

Mr. BasementMr. Basement … and … and

has the patents & profits to prove it.has the patents & profits to prove it.

The Magicians of The Magicians of MotuekaMotueka (PLUS) (PLUS)!!

W.A. Coppins Ltd.*W.A. Coppins Ltd.*(Coppins Sea Anchors/(Coppins Sea Anchors/PSA/para sea anchors)PSA/para sea anchors)

*Textiles, 1898; thrive on *Textiles, 1898; thrive on “wicked problems”“wicked problems”——e.g., e.g., U.S. NavyU.S. Navy STLVAST (Small To Large Vehicle At Sea STLVAST (Small To Large Vehicle At Sea

Transfer); custom fabric from Transfer); custom fabric from W. WiW. Wiggggins Ltdins Ltd./Wellington ./Wellington

(specialty nylon, “Dyneema,” from (specialty nylon, “Dyneema,” from DSMDSM/Netherlands)/Netherlands)

Motueka, New Zealand, is a peanut-Motueka, New Zealand, is a peanut-sized town. (Very near where I live in sized town. (Very near where I live in the winter.) But it sports best-in-world the winter.) But it sports best-in-world in the high-value-added business of in the high-value-added business of sea anchors. Clients include the U.S. sea anchors. Clients include the U.S. Navy and the Norwegian government.Navy and the Norwegian government.

Grooves on … Grooves on … “wicked “wicked problems.”problems.”(I organized a keynote speech to New Zealand’s business and (I organized a keynote speech to New Zealand’s business and government leaders around W.A. Coppins—an exemplar of global government leaders around W.A. Coppins—an exemplar of global business “domination” in a small corner of a small country.)business “domination” in a small corner of a small country.)

Going “Social”: Location and Size IndependentGoing “Social”: Location and Size Independent

““Today, despite the fact that we’re jToday, despite the fact that we’re just a little swimminust a little swimmingg ppool comool comppananyy in Vir in Virgginiainia, we have the most trafficked , we have the most trafficked swimming pool website in the world. Five years ago, if swimming pool website in the world. Five years ago, if you’d asked me and my business partners what we do, you’d asked me and my business partners what we do,

the answer would have been simple, ‘We build in-ground the answer would have been simple, ‘We build in-ground

fiberglass swimming pools.’ Now we say,fiberglass swimming pools.’ Now we say, ‘We ‘We are the best teachersare the best teachers … … in the worldin the world … on the … on the subject of fiberglass swimming subject of fiberglass swimming

pools, and we also happen to build pools, and we also happen to build them.’”them.’”

——Jay Baer, YJay Baer, Youtility: Why Smart Marketing Is About Help, Not Hypeoutility: Why Smart Marketing Is About Help, Not Hype

A small swimming pool firm takes to A small swimming pool firm takes to social media with a vengeance and social media with a vengeance and

becomes a major becomes a major (world)(world)

force in its market space.force in its market space.

““BE THE BEST. BE THE BEST. IT’S THE ONLY IT’S THE ONLY

MARKET THAT’S MARKET THAT’S NOT CROWDED.”NOT CROWDED.”

From: From: Retail Superstars: Inside the 25 BestRetail Superstars: Inside the 25 Best Independent Stores in America,Independent Stores in America, George Whalin George Whalin

I I LOVELOVE this sentence this sentence

——and and LOVELOVE the firms that embody the firms that embody it.it.

Retail Superstars: Retail Superstars: Inside the 25 Best Inside the 25 Best

Independent StoresIndependent Storesin Americain America —by George Whalin—by George Whalin

JUNGLE JIM’S INTERNATIONAL MARKET, FAIRFIELD, OHJUNGLE JIM’S INTERNATIONAL MARKET, FAIRFIELD, OH::

““An adventure in An adventure in ‘shoppertainment,’‘shoppertainment,’ begins in the begins in the

parking lot and goes on to parking lot and goes on to 1,6001,600 cheeses and cheeses and

1,4001,400 varieties of hot sauce—not to mention 12,000 wines varieties of hot sauce—not to mention 12,000 wines

priced from priced from

$8-$$8-$8,0008,000 a bottle; all this is brought to you a bottle; all this is brought to you

by by 4,0004,000 vendors. Customers from every corner of the vendors. Customers from every corner of the

globe.”globe.”

BRONNER’S CHRISTMAS WONDERLAND, FRANKENMUTH, MIBRONNER’S CHRISTMAS WONDERLAND, FRANKENMUTH, MI, POP , POP

5,0005,000:: 98,000-square-foot “shop” features 98,000-square-foot “shop” features 6,0006,000

Christmas ornaments, Christmas ornaments, 50,00050,000 trims, and anythingtrims, and anything else else

you can name pertaining to Christmas. …”you can name pertaining to Christmas. …”

Incredible. I give this book to Incredible. I give this book to accountants and lawyers and anyone I accountants and lawyers and anyone I can buttonhole. It amount to 25 acts of can buttonhole. It amount to 25 acts of unparalleled imagination—that define unparalleled imagination—that define excellence and differentiation. (In, often excellence and differentiation. (In, often as not, out of the way corners of the as not, out of the way corners of the world—or, at least, the USA.)world—or, at least, the USA.)

I repeat: I repeat: I LOVE THESE I LOVE THESE FOLKS. FOLKS.

I love …I love … Middle-Middle-sized Niche- sized Niche- Micro-niche Micro-niche

Dominators!Dominators!

"Own" a niche through EXCELLENCE"Own" a niche through EXCELLENCE!!(Writ large: Germany’s MITTELSTAND)(Writ large: Germany’s MITTELSTAND)

Forget the giants. (More or less.) Forget the giants. (More or less.) Economic excellence is largely built more Economic excellence is largely built more upon a hearty base of middle-sized upon a hearty base of middle-sized superstars. Such a group, called the superstars. Such a group, called the Mittelstand, are the source of Germany’s Mittelstand, are the source of Germany’s astounding/ sustaining export astounding/ sustaining export excellence. (Until recently, the world’s excellence. (Until recently, the world’s #1 exporter.)#1 exporter.)

MITTELSTANDMITTELSTAND**

**“agile creatures darting between the “agile creatures darting between the

legs of the multinational monsters”legs of the multinational monsters” ((Bloomberg Bloomberg

BusinessWeekBusinessWeek))

Michael Raynor and Mumtaz Ahmed’: Michael Raynor and Mumtaz Ahmed’: THE THREE RULES: THE THREE RULES: How Exceptional Companies Think*How Exceptional Companies Think*::

1. 1. Better before cheaper.Better before cheaper.2. 2. Revenue before cost.Revenue before cost.3. 3. There are no other rules.There are no other rules.(*From a database of over 25,000 companies from hundreds of industries covering 45 years, they uncovered (*From a database of over 25,000 companies from hundreds of industries covering 45 years, they uncovered 344 companies that qualified as statistically “exceptional.”)344 companies that qualified as statistically “exceptional.”)

Jeff Colvin, Jeff Colvin, FortuneFortune: “The Economy Is Scary … But Smart : “The Economy Is Scary … But Smart Companies Can Dominate”:Companies Can Dominate”:

They manage for value—not for EPS.They manage for value—not for EPS.They keep developing human capital.They keep developing human capital.They get radically customer-centric.They get radically customer-centric.

“‘“‘Commodity’ is a Commodity’ is a state of mind. state of mind.

ANYTHINGANYTHING can be can be DRAMATICALLYDRAMATICALLY differentiated.”differentiated.”

Truth in Truth in NumbersNumbers

Where the +201,000 new private-sectorWhere the +201,000 new private-sector jobs came from … jobs came from …

51% Small firms51% Small firms41% Medium-sized41% Medium-sized**8% Big8% BigSource: ADP National Employment Report/March 2011Source: ADP National Employment Report/March 2011

*E.g., German *E.g., German MITTELSTANDMITTELSTAND

The Future Is Small: The Future Is Small: Why AIM Will Be the Why AIM Will Be the World’s Best Market World’s Best Market Beyond the Credit Beyond the Credit BoomBoom —Gervais Williams, —Gervais Williams,

superstar fund manager (FT/1217.14: superstar fund manager (FT/1217.14: “Research shows that new and small “Research shows that new and small companies create almost all the new companies create almost all the new

private sector jobs and are private sector jobs and are disproportionately innovative.”)disproportionately innovative.”)

EntrepreneursEntrepreneurs and and

Businesspersons Businesspersons AllAll

WHITE-COLLAR SURVIVAL STRATEGY #1: WHITE-COLLAR SURVIVAL STRATEGY #1: Department as Smallish/Entrepreneurial Department as Smallish/Entrepreneurial

BUSINESSBUSINESS

E.g.:E.g.: Training Inc. Training Inc., a 14-, a 14-person unit* in a 50-person person unit* in a 50-person HR department in a $200M HR department in a $200M

business unit in a $3B business unit in a $3B corporation—aiming for corporation—aiming for

Excellence & WOW!Excellence & WOW!

**PSFPSF// Professional Service Firm (See my …Professional Service Firm (See my …

Professional Service Firm 50: Fifty Ways to Transform Your “Department” Professional Service Firm 50: Fifty Ways to Transform Your “Department” Into A Professional Service Firm Whose Trademarks Are Passion and Into A Professional Service Firm Whose Trademarks Are Passion and

Innovation.Innovation.))

The Professional Service Firm50: Fifty Ways to The Professional Service Firm50: Fifty Ways to Transform Your “Department” into a Professional Transform Your “Department” into a Professional Service Firm Whose Trademarks Are Passion and Service Firm Whose Trademarks Are Passion and

Innovation!Innovation!

Think back to the discussion of the extraordinary technology Think back to the discussion of the extraordinary technology change engulfing us—and, now, its likely impact on high-end change engulfing us—and, now, its likely impact on high-end white collar jobs. I believe there is an escape path, a route to white collar jobs. I believe there is an escape path, a route to not only survival, but flourishing. not only survival, but flourishing.

I first wrote about this in my 1999 book, I first wrote about this in my 1999 book, Professional Service Professional Service Firm 50: Fifty Ways to Transform Your “Department” Into A Firm 50: Fifty Ways to Transform Your “Department” Into A Professional Service Firm Whose Trademarks Are Passion and Professional Service Firm Whose Trademarks Are Passion and

InnovationInnovation. The idea:. The idea: CONVERT EVERY CONVERT EVERY “DEPARTMENT”/“UNIT” “DEPARTMENT”/“UNIT” (and yourself)(and yourself) INTO A INTO A FULL-FLEDGED … “PSF”/ PROFESSIONAL FULL-FLEDGED … “PSF”/ PROFESSIONAL SERVICE FIRM … WHOLLY DEDICATED TO SERVICE FIRM … WHOLLY DEDICATED TO EXCELLENCE & WOW & ADDING SKYSCRAPING EXCELLENCE & WOW & ADDING SKYSCRAPING VALUE TO THEIR CUSTOMERS’ VALUE TO THEIR CUSTOMERS’ (usually internal (usually internal

customers)customers) ACTIVITIES. ACTIVITIES.

Hence, TRAINING, INC. (Etc. Etc.)Hence, TRAINING, INC. (Etc. Etc.)This is one Big Damn Deal.This is one Big Damn Deal.

Muhammad Yunus: Muhammad Yunus: ““All human All human beinbeinggs are s are

entreentreppreneursreneurs.. When we When we

were in the caves we were all self-were in the caves we were all self-employed . . . finding our food, feeding employed . . . finding our food, feeding ourselves. That’s where human history ourselves. That’s where human history

began . . . As civilization came we began . . . As civilization came we suppressed it. We became labor because suppressed it. We became labor because

they stamped us, ‘You are labor.’ they stamped us, ‘You are labor.’ We forgot that we are entrepreneurs.”We forgot that we are entrepreneurs.”

——Muhammad Yunus,Muhammad Yunus,

Nobel Laureate/The News Hour/PBS/1122.2006Nobel Laureate/The News Hour/PBS/1122.2006

An entrepreneurial flair is not limited to An entrepreneurial flair is not limited to a handful of Mark Zuckerbergs. As micro-a handful of Mark Zuckerbergs. As micro-lending guru and Nobel Laureate lending guru and Nobel Laureate Muhammad Yunus tells us, virtually all of Muhammad Yunus tells us, virtually all of us who have survived the Darwinian us who have survived the Darwinian sorting process find that some form of sorting process find that some form of entrepreneurial behavior comes entrepreneurial behavior comes naturally.naturally.

Distinct or Distinct or

extinct!extinct!

Repeat:Repeat: “I believe that ninety percent of white-

collar/“knowledge-work” jobs (which are 80 percent

of all jobs) in the U.S. will be either destroyed or altered beyond recognition in the

next 10 to 15 years.”——Cover story/Cover story/TimeTime/22 May 2000/Tom Peters/22 May 2000/Tom Peters

Circa 2013+: Multiple Choice ExaminationCirca 2013+: Multiple Choice Examination

You will you lose your job to; You will you lose your job to; choose one …choose one …

Offshore contractor?Advanced high-speed algorithm?Robot?A re-tooled value-added “Brand You”?

Source: Derived primarily from Dan PinkSource: Derived primarily from Dan Pink

Circa 2014:Circa 2014:

Brand YOU.Brand YOU.Fabulous at … something.Fabulous at … something.

STAND OUTSTAND OUT..

Or … Or … STAND DOWNSTAND DOWN..No other options.No other options.

GROWGROW..

Or … Or … DIEDIE (professionally).(professionally).

No other options.No other options.

““The ecosystem used to The ecosystem used to funnel lots of talented funnel lots of talented people into a few clear people into a few clear

winners.winners. Now it’s Now it’s funnelinfunnelingg lots of lots of

talented talented ppeoeopple into le into lots of exlots of expperimentseriments.”.”

——Tyler Willis, business developer, to Nathan Heller in Tyler Willis, business developer, to Nathan Heller in “Bay Watched: “Bay Watched: How San Francisco’s New Entrepreneurial Culture Is How San Francisco’s New Entrepreneurial Culture Is

Changing the Country,”Changing the Country,” The New YorkerThe New Yorker, 1014.13, 1014.13

We’re beginning to “get it.”We’re beginning to “get it.”

““The average age of a The average age of a startup founder is 40. startup founder is 40. And And hihiggh-h-ggrowth starturowth startupps s are nearlare nearlyy twice as twice as

likellikelyy to be launched b to be launched byy ppeoeopple over 55 as ble over 55 as byy

ppeoeopplele 20-34 20-34.”.” —Vivek Wadhwa, Kauffman foundation (—Vivek Wadhwa, Kauffman foundation (TimeTime/0325.13)/0325.13)

Wow.Wow.(I.e., not just a youngster’s game.)(I.e., not just a youngster’s game.)

““The growth and The growth and success of women-success of women-

owned businesses is owned businesses is one of the most one of the most

profound changes profound changes takingtaking place in the place in the

business world today.”business world today.” ——

Margaret Heffernan, Margaret Heffernan, How She Does ItHow She Does It

Under-attended lynchpin of the New Under-attended lynchpin of the New

Entrepreneurial Age?Entrepreneurial Age?!!

LEADERSHIPLEADERSHIP

Not a “theory of leadership” by any Not a “theory of leadership” by any means. Just a few ideas to ponder—and, I means. Just a few ideas to ponder—and, I hope in some cases, implement.hope in some cases, implement.

2525

““I’m always stopping by our I’m always stopping by our

stores— stores— at least at least 2525

a weeka week.. I’m also in other I’m also in other

places: Home Depot, Whole Foods, Crate places: Home Depot, Whole Foods, Crate & Barrel. I try to be a sponge to pick up & Barrel. I try to be a sponge to pick up

as much as I can.”as much as I can.” —Howard Schultz—Howard Schultz

Source: Source: FortuneFortune, “Secrets of Greatness”, “Secrets of Greatness”

MBWAMBWA

MManaginganaging

BBy y

WWanderingandering

AAroundround

The MBWA idea—in touch management—The MBWA idea—in touch management—was the signature of was the signature of In Search of In Search of Excellence.Excellence.

3K3K//5M5MSource: Mark McCormackSource: Mark McCormack

3,000 miles 3,000 miles for a 5-minute for a 5-minute

faceface--toto--faceface meeting meeting

Glib But Glib But TRUETRUE

““Decisions Decisions are made by are made by those who those who show up.”show up.”

——Aaron SorkinAaron Sorkin

““IT’SIT’S

ALWAYSALWAYS SHOWTIME.”SHOWTIME.”

—

““IT’S IT’S ALWAYSALWAYS SHOWTIME.”SHOWTIME.”

—David D’Alessandro, —David D’Alessandro, Career WarfareCareer Warfare

““Nothing is Nothing is so contagious so contagious

as as enthusiasm.”enthusiasm.”

—Samuel Taylor Coleridge—Samuel Taylor Coleridge

““I am a I am a dispenser of dispenser of

enthusiasm.”enthusiasm.”

—Ben Zander, symphony conductor and management guru—Ben Zander, symphony conductor and management guru

“A man withoutA man without a smiling face a smiling face must not openmust not open a shop.” a shop.” —Chinese Proverb

BE BE EXPLICITEXPLICIT!! HIREHIRE FOR IT! FOR IT!

PROMOTEPROMOTE FOR IT! FOR IT!

11

You = Your You = Your calendarcalendar**

*The calendar *The calendar NEVERNEVER lies.lies.

YOUR CALENDAR YOUR CALENDAR KNOWSKNOWS PRECISELYPRECISELY

WHAT YOUWHAT YOUREALLY CARE ABOUT.REALLY CARE ABOUT.

DODO YOUYOU????????

Your priorities are revealed in your Your priorities are revealed in your allocation of time.allocation of time.

PERIOD.PERIOD.

““Dennis, you need a …Dennis, you need a …

‘TO-DON’T ’‘TO-DON’T ’

List !”List !”

A good friend-entrepreneur has an idea a A good friend-entrepreneur has an idea a minute—and damned if they’re not all good! minute—and damned if they’re not all good! But to move the next step in his enterprise, But to move the next step in his enterprise, namely rolling his program out to a wide namely rolling his program out to a wide audience in dozens of locations, focus is audience in dozens of locations, focus is required. His closest advisor, a former CEO required. His closest advisor, a former CEO of a big company, told my pal (I was there) of a big company, told my pal (I was there) that the key was … that the key was … managing his “To-managing his “To-don’ts.”don’ts.”

AmenAmen!!For my friend DennisFor my friend Dennis!!For meFor me!!For youFor you!!

““If there is any If there is any ONEONE ‘secret’ ‘secret’

to effectiveness, it is concentration. to effectiveness, it is concentration. Effective executives do first things first Effective executives do first things first

… … and they do and they do

ONEONE thing at a thing at a time.”time.” —Peter Drucker—Peter Drucker

Just say Just say “No”“No” to “our five strategic to “our five strategic priorities.” priorities.” One’ll do it.One’ll do it.Two’s a pipedream.Two’s a pipedream.(Per Mr. Drucker—not a bad guide.)(Per Mr. Drucker—not a bad guide.)

Monday Morning

—

Monday/Tomorrow/Courtesy NFL:Monday/Tomorrow/Courtesy NFL:

“Script” your “Script” your first 5-10 first 5-10

“plays.”“plays.” (I.e., carefully (I.e., carefully

launch the day/week in a launch the day/week in a purposefulpurposeful fashion.) fashion.)

00

““Every year, for 25 years, is a Every year, for 25 years, is a startup. For that matter, every startup. For that matter, every

event is a start up. No customers. event is a start up. No customers.

Not one sinNot one singgle le satisfied satisfied

customercustomer!! I take I take

nothingnothing for granted.” for granted.” —Jose Salibi Neto*—Jose Salibi Neto*

*Only person to push Peter Drucker around! Radio City Music Hall!*Only person to push Peter Drucker around! Radio City Music Hall!

#1#1 CEOCEO Failing?Failing?

““If I had toIf I had to pick one failing pick one failing

of CEOs, it’sof CEOs, it’s that …that …

——Co-founder of one of the largest investment services firms in the USA/worldCo-founder of one of the largest investment services firms in the USA/world

“If I had to pick one failing of

CEOs, it’s that … they don’t read enough.”

Wow.Wow.AND: Well worth considering.AND: Well worth considering.

(I.e., pause and reflect on this. (I.e., pause and reflect on this. PLEASEPLEASE.).)(FYI: I agree.)(FYI: I agree.)(The quote comes from someone who is a (The quote comes from someone who is a VERY Big Deal. Short of Warren Buffett, but VERY Big Deal. Short of Warren Buffett, but barely. Speaker not ID’d because remark at a barely. Speaker not ID’d because remark at a private social dinner.)private social dinner.)

(Regardless of your job, in 2014 you are (Regardless of your job, in 2014 you are

either a sterling student. Or … either a sterling student. Or … TOASTTOAST.).)

“In my whole life, I have known no In my whole life, I have known no wise people (over a broad subject wise people (over a broad subject matter area) who didn’t read all matter area) who didn’t read all

the time — none. the time — none.

Zero. You’d be You’d be

amazed at how much Warren amazed at how much Warren [Buffett] reads — and how much I [Buffett] reads — and how much I

read.” read.” —Charlie Munger (#2, Berkshire Hathaway)—Charlie Munger (#2, Berkshire Hathaway)

4, 8, 124, 8, 12

““The The 44 most most

important important wordswords in any in any

organization are …organization are …

THE FOUR MOST IMPORTANT WORDS IN ANY ORGANIZATIONTHE FOUR MOST IMPORTANT WORDS IN ANY ORGANIZATION

ARE …ARE … “WHAT “WHAT DO DO YOUYOU THINK?”THINK?”

Source: courtesy Dave Wheeler, posted at tompeters.com Source: courtesy Dave Wheeler, posted at tompeters.com

MBWA MBWA 88: :

Change the World With EIGHT Change the World With EIGHT WordsWords

What do you think?*What do you think?*How can I help?**How can I help?**

*Dave Wheeler: “What are the four most important words in the boss’ lexicon?”*Dave Wheeler: “What are the four most important words in the boss’ lexicon?”**Boss as CHRO/Chief Hurdle Removal Officer **Boss as CHRO/Chief Hurdle Removal Officer ********************************************************************

Are you a full-fledged Are you a full-fledged “professional” when it “professional” when it

comes to helping?comes to helping?

Helping: (Helping: (MUCHMUCH) easier said than ) easier said than done!done!(I.e., a formal skill to be studied and (I.e., a formal skill to be studied and practiced.)practiced.)

MBWA MBWA 1212: :

Change the WorldChange the World With TWELVE Words With TWELVE Words

What do you think?*What do you think?*How can I help?**How can I help?**

What have you learned?***What have you learned?***

*Dave Wheeler: “What are the four most important words in the boss’ lexicon?”*Dave Wheeler: “What are the four most important words in the boss’ lexicon?”**Boss as CHRO/Chief Hurdle Removal Officer **Boss as CHRO/Chief Hurdle Removal Officer ********************************************************************

***What (new thing) have you learned (in the last 24 hours)? ***What (new thing) have you learned (in the last 24 hours)? ********************* * ********************* *

AcknowledgementAcknowledgement!!

AcknowledgementAcknowledgement!!

I like the second title slide better than I like the second title slide better than the first.the first.

““The deepest The deepest urgeurge

in human nature in human nature is the desire to is the desire to

be important.”be important.” —John —John

DeweyDewey(In Dale Carnegie, (In Dale Carnegie, How to Win Friends and Influence How to Win Friends and Influence

People People (“The BIG Secret of Dealing With People”)(“The BIG Secret of Dealing With People”)

"Appreciative words are "Appreciative words are the most powerful forcethe most powerful force

for good on earth.”for good on earth.”——George W. Crane, physician, columnistGeorge W. Crane, physician, columnist

““The two most powerful The two most powerful things in existence: athings in existence: a

kind word and akind word and a thoughtful gesture.” thoughtful gesture.”

——Ken Langone, co-founder, Home DepotKen Langone, co-founder, Home Depot

““AcknowledAcknowledggee” … ” … perhaps the most perhaps the most

powerful word (and powerful word (and idea) in the English idea) in the English

language—and language—and manager’s tool kit!manager’s tool kit!

““Employees who Employees who don't feel significant don't feel significant

rarely make rarely make significant significant

contributions.”contributions.” —Mark Sanborn—Mark Sanborn

““PeoPeopple want to be le want to be ppartart of somethinof somethingg lar largger than er than

themselvesthemselves.. They want They want to be part of something to be part of something

they’re really they’re really pproudroud of, that of, that they’ll they’ll fifigghtht forfor,, sacrificesacrifice forfor,, trusttrust.”.” —Howard Schultz, Starbucks

AcknowledgementAcknowledgement

PLUSPLUS

““It was much later that I realized It was much later that I realized Dad’s secret. He gained respect by Dad’s secret. He gained respect by giving it. He talked and listened to giving it. He talked and listened to

the fourth-grade kids in Spring Valley the fourth-grade kids in Spring Valley who shined shoes the same way he who shined shoes the same way he talked and listened to a bishop or a talked and listened to a bishop or a

college president.college president. HE WAS HE WAS SERIOUSLY INTERESTED IN SERIOUSLY INTERESTED IN

WHO YOU WERE AND WHO YOU WERE AND WHAT YOU HAD TO SAY.”WHAT YOU HAD TO SAY.”

—Sara Lawrence-Lightfoot, Respect

““You can make more You can make more friends in two monthsfriends in two months

bbyy becomin becomingg interested interested in other in other ppeoeopple thanle than you can in two years you can in two years by trying to get other by trying to get other people interested in people interested in

you.”you.” —Dale Carnegie

““When I left the dining room after When I left the dining room after sitting next to Gladstone, I thought he sitting next to Gladstone, I thought he was the cleverest man in England. But was the cleverest man in England. But

when I sat next to Disraeliwhen I sat next to Disraeli I left I left feeling I was the cleverest feeling I was the cleverest

personperson.”.” —Jennie Jerome (WSCs American mother)—Jennie Jerome (WSCs American mother)

““When you are talking to When you are talking to [Bill Clinton][Bill Clinton], , you feel like he doesn’t care about you feel like he doesn’t care about anything or or anybody else around anything or or anybody else around

but you.but you. He makes you feel likeHe makes you feel like the most important person inthe most important person in

the roomthe room.”.” —Mark Hughes, screenwriter, —Mark Hughes, screenwriter, ForbesForbes blogger blogger

““Leadership is about how Leadership is about how you make people you make people feelfeel——about you, about the about you, about the

project or work you’re project or work you’re doing together, and doing together, and

especially about especially about themselvesthemselves.”.” —Betsy Myers, —Betsy Myers,

Take the Lead: Motivate, Inspire, and Bring Out Take the Lead: Motivate, Inspire, and Bring Out the Best in Yourself and Everyone Around Youthe Best in Yourself and Everyone Around You

I attended a memorial service for one of I attended a memorial service for one of my great mentors, the generally my great mentors, the generally acclaimed #1 leadership guru (and acclaimed #1 leadership guru (and extraordinary humanist) Warren Bennis. extraordinary humanist) Warren Bennis. About 15 of his friends and colleagues About 15 of his friends and colleagues spoke—myself included. It was eerie: We spoke—myself included. It was eerie: We each said the same thing, albeit in each said the same thing, albeit in

slightly different words. slightly different words. Warren Warren made you feel clever—and made you feel clever—and at the center of his at the center of his universe.universe. This ability may be the This ability may be the effective leader’s most valuable attribute effective leader’s most valuable attribute when it comes to engaging the mind and when it comes to engaging the mind and heart and soul and energy of others.heart and soul and energy of others.

3*3*(*Repeat)(*Repeat)

Relationships (of all varieties): THERE ONCE THERE ONCE WAS A TIME WHEN A WAS A TIME WHEN A

THREETHREE--MINUTEMINUTE PHONEPHONE CALLCALL WOULD WOULD

HAVE AVOIDED SETTING OFF THE HAVE AVOIDED SETTING OFF THE DOWNWARD SPIRAL THAT DOWNWARD SPIRAL THAT RESULTED IN A COMPLETE RESULTED IN A COMPLETE

RUPTURE.RUPTURE.**

*Divorce, loss of a BILLION $$$ aircraft sale, etc., etc.*Divorce, loss of a BILLION $$$ aircraft sale, etc., etc.

Meetings ROCKMeetings ROCK!!(Make that: SHOULD Rock)(Make that: SHOULD Rock)

Complain all Complain all you want, you want,

but but meetinmeetinggss are what you are what you (boss/leader)(boss/leader) dodo!!

Meetings are Meetings are #1#1 thing thing

bosses bosses dodo. Therefore, . Therefore, 100%100%

of those meetings:of those meetings: EXCELLENCE. EXCELLENCE. ENTHUSIASM. ENTHUSIASM. ENGAGEMENT. ENGAGEMENT.

LEARNING. TEMPO. LEARNING. TEMPO. WORK-OF-ARTWORK-OF-ART.. DAMNDAMN ITIT..

No kidding.No kidding.Think about it.Think about it.PLEASE.PLEASE.

Prepare for a Prepare for a meeting/every meeting/every

meeting as if your meeting as if your professional life and professional life and

legacy depended on it.legacy depended on it.

It does.It does.

1818

“The doctor interrupts after …*

*Source: Jerome Groopman, How Doctors Think

Harvard Med School doc Jerome Groopman Harvard Med School doc Jerome Groopman tells us that the patient is the doctor’s best tells us that the patient is the doctor’s best source of evidence about the patient’s source of evidence about the patient’s problem. problem.

Period. Period.

Then, citing hard-nosed research, Then, citing hard-nosed research, Groopman asks, Groopman asks,

“On average, how long does the patient “On average, how long does the patient speak before the doc interrupts …speak before the doc interrupts …

18 …

18 … seconds!

My larger point: My larger point: It ain’t only docs!It ain’t only docs! It’s doubtless pretty much all “experts” It’s doubtless pretty much all “experts” and bossesand bosses!! !! That is …That is …

You.You.Me.Me.

(An (An obsessionobsession with) Listening is ... the ultimate mark with) Listening is ... the ultimate mark

of of RespectRespect..

Listening is ... the heart and soul of Listening is ... the heart and soul of EngagementEngagement..Listening is ... the heart and soul of Listening is ... the heart and soul of KindnessKindness..Listening is ... the heart and soul of Listening is ... the heart and soul of ThoughtfulnessThoughtfulness..Listening is ... the basis for true Listening is ... the basis for true CollaborationCollaboration..Listening is ... the basis for true Listening is ... the basis for true PartnershipPartnership..Listening is ... a Listening is ... a Team SportTeam Sport..Listening is ... a Listening is ... a Developable Individual SkillDevelopable Individual Skill.* .* (*Though women (*Though women are are farfar better at it than men.) better at it than men.)

Listening is ... the basis forListening is ... the basis for CommunityCommunity..Listening is ... the bedrock of Listening is ... the bedrock of Joint Ventures that workJoint Ventures that work..Listening is ... the bedrock of Listening is ... the bedrock of Joint Ventures thatJoint Ventures that growgrow..Listening is ... the core of Listening is ... the core of effective Cross-functional effective Cross-functional CommunicationCommunication* * (*Which is in turn Attribute #1 of (*Which is in turn Attribute #1 of organization effectiveness.)organization effectiveness.)

(cont.)(cont.)

When it comes to … When it comes to … SUSTAINABLE SUSTAINABLE COMPARATIVECOMPARATIVE STRATEGIC STRATEGIC ADVANTAGEADVANTAGE … there is … there is nothingnothing but but nothingnothing but but nothingnothing that compares with … that compares with …

EXCELLENCEEXCELLENCE ININ STRATEGIC STRATEGIC LISTENINGLISTENING..

Period.Period.

Suggested Suggested Core Value Core Value #1:#1: “We are Effective “We are Effective

Listeners—we treat Listening Listeners—we treat Listening EXCELLENCEEXCELLENCE as the as the Centerpiece of our Centerpiece of our

Commitment to Respect and Commitment to Respect and Engagement and Community Engagement and Community

and Growth.”and Growth.”

LISTEN = “PROFESSION” =

STUDY = PRACTICE = EVALUATION =

ENTERPRISE VALUE

Listening can be Listening can be studiedstudied and and

practicedpracticed to the same extent and to the same extent and in the same fashion as learning to play in the same fashion as learning to play the piano or cello.the piano or cello.

““I always writeI always write ‘LISTEN’‘LISTEN’ on on the back of my hand the back of my hand before a meeting.”before a meeting.”

Source: Tweet viewed @tom_petersSource: Tweet viewed @tom_peters

100100

Leaders:

Communications failure …

100%*

*Your fault!

Step Up ToStep Up ToCreating/Creating/

Living/Living/Maintaining anMaintaining an

Effective CultureEffective Culture

WSJ/0910.13:WSJ/0910.13: “What matters most “What matters most to a company over time? to a company over time?

Strategy or culture? Strategy or culture?

Dominic Barton, MD, McKinsey & Co.:Dominic Barton, MD, McKinsey & Co.:

“Culture.“Culture.””

““Culture precedes Culture precedes positive results. It positive results. It doesn’t get tacked doesn’t get tacked

on as an on as an afterthought on the afterthought on the way to the victory way to the victory

stand.”stand.” —NFL Hall of Fame Coach Bill Walsh—NFL Hall of Fame Coach Bill Walsh

..

Developing and maintaining an effective Developing and maintaining an effective culture is a hard-nosed task, anything culture is a hard-nosed task, anything but ephemeral, and is … but ephemeral, and is … LEADER JOB LEADER JOB ONEONE.*.*

(*For McKinsey, McKinsey’s clients or the (*For McKinsey, McKinsey’s clients or the San Francisco 49ers.)San Francisco 49ers.)

““If I could have chosen not to tackle the IBM culture head-If I could have chosen not to tackle the IBM culture head-on,on,

I probably wouldn’t have. My bias coming in was toward I probably wouldn’t have. My bias coming in was toward strategy, analysis and measurement. In comparison, strategy, analysis and measurement. In comparison, changing the attitude and behaviors of hundreds of changing the attitude and behaviors of hundreds of

thousands of people is very, very hard.thousands of people is very, very hard. Yet I Yet I came to see in my time at came to see in my time at IBM that IBM that cultureculture isn’t just isn’t just

one aspect of the game one aspect of the game ——IT IS THE IT IS THE GGAMEAME.”.”

——Lou Gerstner, Lou Gerstner, Who Says Elephants Can’t DanceWho Says Elephants Can’t Dance

As Mr. Analysis, Lou Gerstner, says in no As Mr. Analysis, Lou Gerstner, says in no

uncertain terms: uncertain terms: Culture Culture issues issues mustmust be be squarely addressed.squarely addressed.

““The topic is probably the oldest and biggest debate in The topic is probably the oldest and biggest debate in

Customer service. Customer service. What is more important: What is more important: How well you hire, or the training and How well you hire, or the training and

culture you bring your employees into? culture you bring your employees into?

While both are very important,While both are very important, 7575

percent is the Customer service training percent is the Customer service training and the service culture of your companyand the service culture of your company. .

Do you really think that Disney has found 50,000 amazing Do you really think that Disney has found 50,000 amazing service-minded people? There probably aren’t 50,000 people on service-minded people? There probably aren’t 50,000 people on earth who were born to serve. Companies like Ritz-Carlton and earth who were born to serve. Companies like Ritz-Carlton and Disney find good people and put them in such a strong service Disney find good people and put them in such a strong service

and training environment that doesn’t allow for accept and training environment that doesn’t allow for accept

anything less than excellenceanything less than excellence.”.” —John DiJulius, —John DiJulius, The Customer Service The Customer Service Revolution: Overthrow Conventional Business, Inspire Employees, and Change Revolution: Overthrow Conventional Business, Inspire Employees, and Change

the Worldthe World

Hard is Soft.Hard is Soft.Soft is Hard.Soft is Hard.

!!

Kevin Roberts’ CredoKevin Roberts’ Credo

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

10. AVOID MODERATIONAVOID MODERATION!!

Kevin Roberts is CEO of Saatchi & Saatchi Kevin Roberts is CEO of Saatchi & Saatchi Worldwide—and a good friend.Worldwide—and a good friend.

““INSANELY GREAT”INSANELY GREAT”STEVE JOBSSTEVE JOBS

“RADICALLY THRILLING”“RADICALLY THRILLING” BMW

“ASTONISH ME”“ASTONISH ME” SERGEI DIAGHLEV, TO A LEAD DANCER

“BUILD SOMETHING GREAT”“BUILD SOMETHING GREAT” HIROSHI YAMAUCHI, NINTENDO, TO A SENIOR GAME DESIGNER

“MAKE IT IMMORTAL”“MAKE IT IMMORTAL” DAVID OGILVY, TO A COPYWRITER.

““We are crazy. We should do We are crazy. We should do something when people say it is something when people say it is

‘crazy.’‘crazy.’ If people say If people say something is ‘good’, something is ‘good’, it means someone it means someone

else is already doing else is already doing it.”it.”

—Hajime Mitarai, CEO, Canon—Hajime Mitarai, CEO, Canon

0/800/70/800/788

““Normal” =Normal” = “0 “0 forfor 800” 800”

*There are … *There are … ZEROZERO … “normal people” in the history books. … “normal people” in the history books.

““You can’t behave You can’t behave in a calm, rational in a calm, rational

manner. You’ve got manner. You’ve got to be out there on to be out there on the the lunaticlunatic frinfringgee.”.”

— Jack Welch— Jack Welch

This 78-year-old aims to do no less than This 78-year-old aims to do no less than change the world—beginning with change the world—beginning with changing dramatically the culture of a changing dramatically the culture of a 2,000+ year old hyper-rigid institution.2,000+ year old hyper-rigid institution.

(And your change agenda?)(And your change agenda?)

AppendixAppendixThe 34 The 34 BFOsBFOs**

*BFO/Blinding Flash of the Obvious*BFO/Blinding Flash of the Obvious

This Is the This Is the (OBVIOUS)(OBVIOUS) Stuff I Care About. Stuff I Care About.

This Is the This Is the (OBVIOUS)(OBVIOUS) Stuff, the Absence ofStuff, the Absence of

Which Sends Me Into a …Which Sends Me Into a …

BLIND RAGEBLIND RAGE..

Tom Peters/14 May 2014Tom Peters/14 May 2014

NOTE: In 1985, I gave a 2-day seminar to YPO members in Manhattan. As we moved to close, I asked for feedback. Early on, a chap by the name of Manny Garcia got up to speak—Manny, who became a pal, was one of Burger King’s top franchisees. He began, “I really didn’t hear anything new in the two days”—you could have heard my sharp intake of breath from the back row. He continued, “I’d add that this was probably the best seminar I’ve attended in my many years in business.” Huh? “I’d call it a ‘BLINDING FLASH OF THE OBVIOUS.’ We KNOW all these things—but time and again we fail to relentlessly practice them.” In retrospect, I consider Manny’s feedback to be the best I’ve ever gotten. There will be … GUARANTEED … nothing new in the slides in this set. We know putting people REALLY first translates into mid- to long-term growth and maximized profitability. SO WHY DON’T WE DO IT? We know … GREAT TRAINING … pays for itself 100 times over—in business just much as in sports and the arts. SO WHY DON’T WE DO IT? We know a simple “THANK YOU” is the greatest of all motivators. SO WHY DON’T WE DO IT? And on—and on—it goes.

Frankly, I am in a rotten mood. If I was preaching rocket science, and people didn’t “get it,” that’d be one thing. But each point in this section amounts to, beyond doubt, a, yes … BLINDING FLASH OF THE OBVIOUS.

Damn it! Let’s get a move on! It is indeed obvious, then … NO EXCUSES!

The 34 BFOsThe 34 BFOs**

*Blinding Flash(es) of the Obvious*Blinding Flash(es) of the Obvious

BFOBFO #1#1:: If you (RELIGIOUSLY) help people— If you (RELIGIOUSLY) help people—

EVERY SINGLE PERSON, JUNIOR OR EVERY SINGLE PERSON, JUNIOR OR SENIOR, LIFER OR TEMPSENIOR, LIFER OR TEMP—grow and —grow and reach/exceed their perceived potential, then reach/exceed their perceived potential, then they in turn will bust their individual and they in turn will bust their individual and collective butts to create great experiences for collective butts to create great experiences for Clients—and the “bottom line” will get fatter Clients—and the “bottom line” will get fatter and fatter and fatter. (ANYBODY LISTENING?) and fatter and fatter. (ANYBODY LISTENING?)

((PEOPLEPEOPLE FIRSTFIRST = = MAXIMIZEDMAXIMIZED PROFITABILITYPROFITABILITY. . PERIODPERIOD.) .) (ANYBODY LISTENING?)(ANYBODY LISTENING?) (FYI: (FYI: “People “People FIRST” message 10X more urgent than ever in FIRST” message 10X more urgent than ever in the high-engagement “AGE OF SOCIAL the high-engagement “AGE OF SOCIAL BUSINESS.”)BUSINESS.”)

BFO 2:BFO 2: ENABLING “ALL ENABLING “ALL HANDS” GROWTH/ PERSONAL HANDS” GROWTH/ PERSONAL DEVELOPMENT IS … LEADER DEVELOPMENT IS … LEADER

DUTY DUTY #1#1..

(And ALL good things flow there from.)(And ALL good things flow there from.)

BFO 3:BFO 3: The “CTO”/Chief Training Officer The “CTO”/Chief Training Officer

should (should (MUST!MUST! ) be on a par with the ) be on a par with the CFO/CMO. CFO/CMO.

TRAINING = TRAINING = INVESTMENT #1.INVESTMENT #1.

(8 of 10 CEOs see training as an “expense,” (8 of 10 CEOs see training as an “expense,” not an investment/prime asset booster.) not an investment/prime asset booster.) ( ( ““Our training courses are so good Our training courses are so good they make me want to giggle.” “Our they make me want to giggle.” “Our trainers are on the same pay scale as trainers are on the same pay scale as our engineers.”our engineers.” ) (In a 45-minute “tour ) (In a 45-minute “tour

d’horizon” of the enterprise: GUARANTEE 9 of d’horizon” of the enterprise: GUARANTEE 9 of 10 CEOs* [*10 of 10?] wouldn’t once mention 10 CEOs* [*10 of 10?] wouldn’t once mention

training. training. THAT = DISGRACE.)THAT = DISGRACE.)

BFO 4:BFO 4: OUT-READ ‘EM. OUT-READ ‘EM. AGE 17. AGE 77.AGE 17. AGE 77. 2014: READ & GROW … 2014: READ & GROW …

or wilt. or wilt. (One financial services superstar pegs CEO problem #1: “They (One financial services superstar pegs CEO problem #1: “They don’t read enough.”) STUDENTHOOOD (OBSESSION don’t read enough.”) STUDENTHOOOD (OBSESSION THEREWITH) (for ALL of us) FOR LIFE!THEREWITH) (for ALL of us) FOR LIFE!

BFO 5:BFO 5: Organizations one & all exist for ONE reason … Organizations one & all exist for ONE reason … TO TO BE OF SERVICE. BE OF SERVICE. PERIODPERIOD.. (And effective leaders in turn are … (And effective leaders in turn are …

SERVANT LEADERS. SERVANT LEADERS. PERIODPERIOD.).)

BFO 6:BFO 6: The … HEART OF THE MATTER (productivity, The … HEART OF THE MATTER (productivity, quality, service, you name it) … is the typically under-quality, service, you name it) … is the typically under-

attended … attended … FIRST-LINE BOSSFIRST-LINE BOSS.. (Your FULL (Your FULL

CADRE of 1st-line bosses is arguably … CADRE of 1st-line bosses is arguably … ASSET ASSET #1#1.) .)

BFO 7:BFO 7: WTTMSWWTTMSW. (Whoever Tries The Most . (Whoever Tries The Most Stuff Wins.) WTTMSASTMSUTFW. (Whoever Tries The Stuff Wins.) WTTMSASTMSUTFW. (Whoever Tries The Most Stuff And Screws The Most Stuff Up The Fastest Most Stuff And Screws The Most Stuff Up The Fastest Wins.) Practical translation #1: Winning through the Wins.) Practical translation #1: Winning through the Discipline of QUICK PROTOTYPES. Discipline of QUICK PROTOTYPES.

READY. FIRE. AIM.READY. FIRE. AIM. Winners:Winners:

““RELENTLESS EXPERIMENTATION.”RELENTLESS EXPERIMENTATION.”

““A Bias For Action”: A Bias For Action”: #1#1 Success Requisite in 1982. Success Requisite in 1982.

““A Bias For Action”: A Bias For Action”: #1#1 Success Requisite in 2014. Success Requisite in 2014.

..

BFO 8:BFO 8: “Fail faster. Succeed sooner.” “Fail faster. Succeed sooner.”

““FAIL. FORWARD. FAST.”FAIL. FORWARD. FAST.”““Fail. Fail again. Fail better.”Fail. Fail again. Fail better.”

““REWARD excellent failures. PUNISH REWARD excellent failures. PUNISH mediocre successes.”mediocre successes.”Book/Farson: “Whoever Makes The Most Mistakes Book/Farson: “Whoever Makes The Most Mistakes Wins.”Wins.”We do NOT “accept”/ “tolerate” failures. We do NOT “accept”/ “tolerate” failures.

WE CELEBRATE FAILURES.WE CELEBRATE FAILURES.

BFO 9:BFO 9:

Excellence is NOT an “aspiration.”Excellence is NOT an “aspiration.”Excellence IS the next 5 minutes.Excellence IS the next 5 minutes. (Or not.)(Or not.)

BFO 10:BFO 10: Enabling change Rule #1: It’s NOT NOT Enabling change Rule #1: It’s NOT NOT NOT about “vanquishing (‘ignorant’) foes.” It’s NOT about “vanquishing (‘ignorant’) foes.” It’s ALL ALL ALL about RELENTLESSLY seeking & ALL ALL ALL about RELENTLESSLY seeking &

recruiting & nurturing … recruiting & nurturing … ALLIESALLIES..

BFO 11: BFO 11: The Gospel of “SMALL WINS.”The Gospel of “SMALL WINS.” You You and your Allies cobble together a skein of and your Allies cobble together a skein of successful trials (“small wins”); momentum successful trials (“small wins”); momentum around this portfolio of demos more important around this portfolio of demos more important than any high-investment Big Victory. than any high-investment Big Victory.

(ALLLIES + SMALL WINS + (ALLLIES + SMALL WINS + MOMENTUM = UNSTOPPABLE.)MOMENTUM = UNSTOPPABLE.)

BFO 12:BFO 12: Year = 220 LUNCHES. Year = 220 LUNCHES. WASTE NOT ONEWASTE NOT ONE.. Cross-functional Cross-functional SNAFUs #1 problem for most orgs. Software … SNAFUs #1 problem for most orgs. Software … WILL NOT … fix it. ONLY … “Social Stuff” worksWILL NOT … fix it. ONLY … “Social Stuff” works—e.g., makin’ pals in other functions; LUNDH = —e.g., makin’ pals in other functions; LUNDH = Strategy #1. Strategy #1.

Goal: Goal: XFX/Cross-Functional XFX/Cross-Functional ExcellenceExcellence … or die trying. Requisite: … or die trying. Requisite: DAILY/RELENTLESS ATTENTION & ALL-HANDS-DAILY/RELENTLESS ATTENTION & ALL-HANDS-ALL-THE-TIME ENGAGEMENT.ALL-THE-TIME ENGAGEMENT.

BFO 13:BFO 13: In Search of Excellence In Search of Excellence in 6 words:in 6 words:

“Hard is soft. Soft is Hard.”“Hard is soft. Soft is Hard.” (E.g., Numbers are the “soft stuff”—witness the crash. (E.g., Numbers are the “soft stuff”—witness the crash. Solid relationships/ integrity/trust/teamwork = True Solid relationships/ integrity/trust/teamwork = True “hard stuff.”)“hard stuff.”)

Strategy is important.Strategy is important.Systems are important.Systems are important.

CULTURE is … CULTURE is … MOREMORE IMPORTANT. IMPORTANT.

(Serious change = Tackling the culture. PERIOD.)(Serious change = Tackling the culture. PERIOD.)(In his autobiography, even “Mr. Analysis,” Lou (In his autobiography, even “Mr. Analysis,” Lou Gerstner, IBM turnaround CEO, reluctantly Gerstner, IBM turnaround CEO, reluctantly acknowledged culture’s unequivocal primacy in the big-acknowledged culture’s unequivocal primacy in the big-change-game.)change-game.)

BFO 14:BFO 14: We Are What We Eat = We Are What We Eat = WE ARE WE ARE WHO WE HANG OUT WITH.WHO WE HANG OUT WITH. (“Hang out (“Hang out with ‘cool’ and thou shalt become more cool. with ‘cool’ and thou shalt become more cool. Hang out with ‘dull’ and thou shalt become Hang out with ‘dull’ and thou shalt become more dull.”) more dull.”) RELIGIOUSLY-CONSCIOUSLY MANAGE RELIGIOUSLY-CONSCIOUSLY MANAGE “HANG OUT.”“HANG OUT.” EVERY “hang out decision” EVERY “hang out decision” (employees/customers/ (employees/customers/ vendors/consultants/lunch mates/board vendors/consultants/lunch mates/board

composition/ locale/etc.) is a … composition/ locale/etc.) is a … STRATEGIC STRATEGIC INNOVATION DECISIONINNOVATION DECISION..(Diversity [ON ANY DIMENSION YOU CAN (Diversity [ON ANY DIMENSION YOU CAN NAME] is an imperative in confusing times.)NAME] is an imperative in confusing times.)

(Hire for … (Hire for … CURIOSITYCURIOSITY. EXPLICITLY.). EXPLICITLY.)

BFO 15:BFO 15: Apple market cap surpasses Exxon Mobil. Apple market cap surpasses Exxon Mobil.

Why? Why? D-E-S-I-G-ND-E-S-I-G-N. Are . Are YOUYOU obsessed by … obsessed by …

DESIGNDESIGN? (In? (In EVERYEVERY nook and cranny of nook and cranny of EVERYEVERY tiny or humongous enterprise—tiny or humongous enterprise—and in your own and in your own professional affairs.) professional affairs.) (DESIGN is an instinctive STATE OF (DESIGN is an instinctive STATE OF MIND as well as a set of practices.) (Less than MIND as well as a set of practices.) (Less than EXCELLENCE in functionality = Unacceptable.)EXCELLENCE in functionality = Unacceptable.)(Less than SUPER-COOL aesthetics = Unacceptable.) (Less than SUPER-COOL aesthetics = Unacceptable.)

BFO 16:BFO 16: LBT/TGR MULTIPLIER POWER.LBT/TGR MULTIPLIER POWER.

Ceaselessly seek the LBTs/ Ceaselessly seek the LBTs/ Little BIG ThingsLittle BIG Things. . ““Small stuff” … BIG Impact: Walmart increases (mere) Small stuff” … BIG Impact: Walmart increases (mere) shopping basket size, small appliance sales up 50%. shopping basket size, small appliance sales up 50%. Reducing TGWs/Things Gone Wrong invaluable. BUT … Reducing TGWs/Things Gone Wrong invaluable. BUT … put at least as much effort into remorselessly put at least as much effort into remorselessly

accumulating accumulating TGRs/THINGS GONE TGRs/THINGS GONE RIGHTRIGHT. . (E.g. Disney’s OBSESSION with a memorable Start & (E.g. Disney’s OBSESSION with a memorable Start & Finish courtesy … PARKING LOT EXCELLENCE.) Finish courtesy … PARKING LOT EXCELLENCE.)

BFO 17:BFO 17: WOMENWOMEN BUY EVERYTHING. BUY EVERYTHING. WOMENWOMEN ARE THE MOST EFFECTIVE LEADERS. ARE THE MOST EFFECTIVE LEADERS. WOMENWOMEN ARE THE MOST SUCCESSFUL ARE THE MOST SUCCESSFUL INVESTORS.INVESTORS. (Does your organization … UNMISTAKABLY … reflect (Does your organization … UNMISTAKABLY … reflect these immutable truths from stem to stern?) (these immutable truths from stem to stern?) (“This “This will be the women’s century.”will be the women’s century.” —Dilma Rousseff, —Dilma Rousseff, president of Brazil, opening address U.N. General president of Brazil, opening address U.N. General Assembly)Assembly)

BFO 18:BFO 18: KEEP ADDING VALUE. KEEP ADDING VALUE.

IBIBMM To I To IBBM: Machine dominance to Business M: Machine dominance to Business

Services dominance. UServices dominance. UPPS to UPS to UPSS: delivering : delivering Parcels to Managing Logistics Systems. Parcels to Managing Logistics Systems. (EVERYONE’s game: “Customer (EVERYONE’s game: “Customer SATISFACTION” to “Systemic customer SATISFACTION” to “Systemic customer SOLUTIONS”)SOLUTIONS”)

BFO 19:BFO 19: Forget B-I-G. (100% of biggies Forget B-I-G. (100% of biggies UNDER-perform long-term.) Instead UNDER-perform long-term.) Instead build national wealth around …build national wealth around …

“MITTELSTAND” companies—“MITTELSTAND” companies—MIDSIZE SUPERSTAR MIDSIZE SUPERSTAR NICHE-/MICRO-NICHE NICHE-/MICRO-NICHE DOMINATORSDOMINATORS—in ANY category you can —in ANY category you can name. (C.f., Germany’s Mittelstand worldbeaters—#1 name. (C.f., Germany’s Mittelstand worldbeaters—#1

global exporter for years.) (Battle cry: global exporter for years.) (Battle cry: “BE THE “BE THE BEST. IT’S THE ONLY MARKET THAT’S BEST. IT’S THE ONLY MARKET THAT’S NOT CROWDED.”NOT CROWDED.” WHYWHY ELSEELSE BOTHERBOTHER?)?)

(FYI: (FYI: ANYTHING/EVERYTHINGANYTHING/EVERYTHING subject to subject to

MIND-BOGGLING ADDED-VALUE/ MIND-BOGGLING ADDED-VALUE/ DIFFERENTIATIONDIFFERENTIATION. . (BANISH the word … “commodity.”)(BANISH the word … “commodity.”)

BFO 20:BFO 20: The problem is RARELY the problemThe problem is RARELY the problem. The . The lackluster RESPONSE to the problem is invariably the lackluster RESPONSE to the problem is invariably the real problem. Answer? Slavishly adhere to these two real problem. Answer? Slavishly adhere to these two

response commandments: response commandments: LIGHTENING-FAST LIGHTENING-FAST RESPONSE OVERKILL. UNEQUIVOCAL RESPONSE OVERKILL. UNEQUIVOCAL QUICK-TIME APOLOGY. QUICK-TIME APOLOGY.

BFO 21:BFO 21: What do people (MOST) desire—including thee What do people (MOST) desire—including thee

and me? and me? ACKNOWLEDGEMENTACKNOWLEDGEMENT. . So: Show your appreciation … BIG TIME/ALL THE TIME. So: Show your appreciation … BIG TIME/ALL THE TIME. (Track it … RELIGIOUSLY!) (“Acknowledgement” is … (Track it … RELIGIOUSLY!) (“Acknowledgement” is … THE MOST POWERFUL WORD IN THE LEADER’S THE MOST POWERFUL WORD IN THE LEADER’S VOCABULARY.)VOCABULARY.)

BFO 22:BFO 22: The two most powerful words in the English The two most powerful words in the English language are? language are?

No contest: No contest: “THANK YOU.”“THANK YOU.” (ACT ACCORDINGLY—e.g., OBSESSIVELY.)(ACT ACCORDINGLY—e.g., OBSESSIVELY.)

BFO 23:BFO 23: Have you done your Have you done your MBWAMBWA/ Managing By / Managing By Wandering Around … TODAY? If not, why not? (Hint: Wandering Around … TODAY? If not, why not? (Hint: There are … There are … ZEROZERO ACCEPTABLE EXCUSES.) ACCEPTABLE EXCUSES.)

BFO 24:BFO 24: Your CALENDAR knows your TRUE priorities. Your CALENDAR knows your TRUE priorities.Do YOU?Do YOU?

You … ARE … your calendar.You … ARE … your calendar.Your calendar … NEVER LIES.Your calendar … NEVER LIES.(Drucker: Best bosses do ONE thing at a Time)(Drucker: Best bosses do ONE thing at a Time)

BFO 25:BFO 25: What is the individual’s/organization’s #1 What is the individual’s/organization’s #1

enduring strategic asset? Easy: enduring strategic asset? Easy: ASSET #1ASSET #1 = = INDIVIDUAL AND COLLECTIVE EXCELLENCE AT … INDIVIDUAL AND COLLECTIVE EXCELLENCE AT …

L-I-S-T-E-N-I-N-G.L-I-S-T-E-N-I-N-G. (Listening can be … (Listening can be … TAUGHT. Listening PER SE is a … PROFESSION. Are YOU TAUGHT. Listening PER SE is a … PROFESSION. Are YOU a “stellar professional listener”? THINK ABOUT IT. a “stellar professional listener”? THINK ABOUT IT. PLEASE.)PLEASE.)

BFO 26:BFO 26: LEADERSHIP is not about ABSTRACTIONS.LEADERSHIP is not about ABSTRACTIONS.LEADERSHIP is about … MASTERING DISCREET SKILLS. LEADERSHIP is about … MASTERING DISCREET SKILLS. E.g.:E.g.:

““Aggressive ‘professional’ listener.”Aggressive ‘professional’ listener.”Meetings as leadership opportunity #1.Meetings as leadership opportunity #1.Creating a “civil society.”Creating a “civil society.”Expert at “helping.” (HelpingExpert at “helping.” (Helping “professional.”) “professional.”)Expert at holding productive conversations.Expert at holding productive conversations.Fanatic about clear communications.Fanatic about clear communications.Fanatic about training.Fanatic about training.Master of appreciation/acknowledgement.Master of appreciation/acknowledgement.Effective at apology.Effective at apology.Creating a culture of automatic helpfulness by all to all.Creating a culture of automatic helpfulness by all to all.Presentation excellence. Presentation excellence. Conscious master of body language.Conscious master of body language.Master of hiring. (Hiring Master of hiring. (Hiring “professional”)“professional”)Master of evaluating people.Master of evaluating people.Avid practitioner of MBWA/Managing By Wandering Around. Avid practitioner of MBWA/Managing By Wandering Around. Avid student of the process of influencing others per se. Avid student of the process of influencing others per se. Student of decision-making/devastating impact of irrational aspects thereof.Student of decision-making/devastating impact of irrational aspects thereof.Creating a no-nonsense execution culture.Creating a no-nonsense execution culture.Meticulous about employee development/100% of staff.Meticulous about employee development/100% of staff.Student of the power of “d”iversity (all flavors of difference).Student of the power of “d”iversity (all flavors of difference).Aggressive in pursuing gender balance.Aggressive in pursuing gender balance.Making team-building excellence everyone’s daily priority.Making team-building excellence everyone’s daily priority.Understanding value of matchless 1st-line management.Understanding value of matchless 1st-line management.

BFO 27:BFO 27: Aim to make EVERY internal and external Aim to make EVERY internal and external experience (PRODUCT/ SERVICE/SYSTEM/EMPLOYEE experience (PRODUCT/ SERVICE/SYSTEM/EMPLOYEE INTERACTION/CUSTOMER INTERACTION/ COMMUNITY INTERACTION/CUSTOMER INTERACTION/ COMMUNITY

INTERACTION) a … INTERACTION) a … WOW!WOW! (WOW = WOW. (WOW = WOW.

USE THE “W-WORD” PER SE! USE THE “W-WORD” PER SE! E.g., E.g., Do 4 out of your Top 5 projects score 8 or Do 4 out of your Top 5 projects score 8 or above on a 10-point“WOW Scale”?above on a 10-point“WOW Scale”? If not, get on it: If not, get on it: NOW. NOW. TODAY. TODAY. WITHIN THE HOUR.WITHIN THE HOUR.

WOW-ify!WOW-ify!WOW NowWOW Now.).)

BFO 28:BFO 28: While on the topic of … WOW: While on the topic of … WOW: White collar work is by and large ticketed to fall prey to White collar work is by and large ticketed to fall prey to artificial intelligence/eye-popping algorithms as well as artificial intelligence/eye-popping algorithms as well as globalization. Stand there and take it on the chin?globalization. Stand there and take it on the chin?NO.NO.My answer/1999 book/My answer/1999 book/The Professional Service Firm 50The Professional Service Firm 50::

CONVERT EVERY “DEPARTMENT”/ “UNIT” CONVERT EVERY “DEPARTMENT”/ “UNIT” [AND YOURSELF] INTO A FULL-FLEDGED … [AND YOURSELF] INTO A FULL-FLEDGED … “PSF”/PROFESSIONAL SERVICES FIRM … “PSF”/PROFESSIONAL SERVICES FIRM …

WHOLLY DEDICATED TO … WHOLLY DEDICATED TO … EXCELLENCEEXCELLENCE & & WOWWOW & & ADDINGADDING SKYSCRAPINGSKYSCRAPING VALUEVALUE TO THEIR/ YOUR CUSTOMERS’ TO THEIR/ YOUR CUSTOMERS’ [USUALLY INTERNAL CUSTOMERS] ACTIVITIES.[USUALLY INTERNAL CUSTOMERS] ACTIVITIES.Why not?Why not?There is no good reason not to proceed in this direction There is no good reason not to proceed in this direction within the fortnight!within the fortnight!

BFO 29:BFO 29: EVERYEVERY DAY PROVIDES A DOZEN DAY PROVIDES A DOZEN (LITERALLY) LEADERSHIP (LITERALLY) LEADERSHIP OPPORTUNITIES FOR OPPORTUNITIES FOR EVERYEVERY ONE OF US. ONE OF US. (Every = EVERY. From the most junior—(Every = EVERY. From the most junior—and and even the 3-day temp—even the 3-day temp—to the Big Dudes.)to the Big Dudes.)GRAB AT LEAST ONE.GRAB AT LEAST ONE.

BFO 30:BFO 30: Circa 2014+: You (me/all of Circa 2014+: You (me/all of us) totally misunderstand overall us) totally misunderstand overall econ context if you choose not to econ context if you choose not to

start today on … start today on … RPD/Radical RPD/Radical Personal Development.Personal Development.

BFO 31:BFO 31: CIVILITY WORKS. CIVILITY PAYS. CIVILITY WORKS. CIVILITY PAYS.

E.g.: E.g.: K = R = PK = R = P..

Kindness = Kindness = Repeat business =Repeat business =Profit.Profit.(ONE MORE TIME: “Kindness” is(ONE MORE TIME: “Kindness” is N-O-T N-O-T “Soft.”)“Soft.”)

BFO 32:BFO 32: Most of us/most organizations discount Most of us/most organizations discount … INTROVERTS. THAT IS A … … INTROVERTS. THAT IS A … 1ST ORDER 1ST ORDER STRATEGIC BLUNDER.STRATEGIC BLUNDER. (Please read Susan (Please read Susan Cain’s book Cain’s book QUIET. It was a no-bull life-QUIET. It was a no-bull life-changer for me.)changer for me.)

BFO 33:BFO 33: Listen (HARD) to my old D.C. boss, Listen (HARD) to my old D.C. boss, Fred Malek:Fred Malek:

““EXECUTION EXECUTION ISIS STRATEGY.” STRATEGY.” ((Kelleher/Southwest: Kelleher/Southwest: “We have a ‘strategic plan.’ “We have a ‘strategic plan.’ DOING THINGS.”DOING THINGS.”) (Welch/GE: ) (Welch/GE: “In real life, strategy is “In real life, strategy is actually very straightforward. Pick a general direction actually very straightforward. Pick a general direction … AND IMPLEMENT LIKE HELL.”… AND IMPLEMENT LIKE HELL.” ) (Charles Munger, ) (Charles Munger, Berkshire Hathaway: Berkshire Hathaway: “Costco figured out the big, “Costco figured out the big, simple things and executed with total fanaticism.”simple things and executed with total fanaticism.” ) )

(Execution: That all-important … (Execution: That all-important … “LAST 99 “LAST 99 PERCENT.”PERCENT.” ) )

BFO 34: The Works …BFO 34: The Works …

SEGEW 2014: SERVICE!-ENGAGEMENT!-GROWTH!-EXCELLENCE!-WOW!SEGEW 2014: SERVICE!-ENGAGEMENT!-GROWTH!-EXCELLENCE!-WOW!

Employees as 1st customersEmployees as 1st customers Acknowledgement & RespectAcknowledgement & Respect Commitment to Personal Growth & Training-to-Die-ForCommitment to Personal Growth & Training-to-Die-For EngagementEngagement Work Worth DoingWork Worth DoingPeerless 1st-line Leadership Cadre Committed to Employee GrowthPeerless 1st-line Leadership Cadre Committed to Employee GrowthMBWA ObsessionMBWA ObsessionSeamless Cross-functional ExcellenceSeamless Cross-functional Excellence360-degree “Social” Engagement Inside & Outside the Firm360-degree “Social” Engagement Inside & Outside the FirmCo-creation of EverythingCo-creation of EverythingA Moral Service Ethos A Moral Service Ethos (Each other/Vendors/Customers/Customers’ Customers/Communities)(Each other/Vendors/Customers/Customers’ Customers/Communities)An Ethos of Helping (“On the Bus” or “Off the Bus”)An Ethos of Helping (“On the Bus” or “Off the Bus”)Scintillating Design—Aesthetics & Functionality—Pervades EveryScintillating Design—Aesthetics & Functionality—Pervades Every Aspect of the Business (Inside & Outside)Aspect of the Business (Inside & Outside)Provision of Extraordinary Customer (& Employee) ExperiencesProvision of Extraordinary Customer (& Employee) Experiences Obsession With TGRs/Things Gone RightObsession With TGRs/Things Gone RightMatchless QualityMatchless Quality““Services Added”/Extended-Integrated-Partnered SolutionsServices Added”/Extended-Integrated-Partnered Solutions to Broad Customer Needsto Broad Customer NeedsRelentless Experimentation (“Bias for Action”/Instant Prototyping/Relentless Experimentation (“Bias for Action”/Instant Prototyping/ Celebration of “Excellent Failures”/Transparency/Celebration of “Excellent Failures”/Transparency/Pursuit of “Multipliers”)Pursuit of “Multipliers”)JOY!JOY! (In All We Do) (In All We Do)GROWTH! GROWTH! (In All We Do)(In All We Do)WOW!WOW! (In All We Do) (In All We Do)EXCELLENCE!EXCELLENCE! (In All We Do) (In All We Do)