Tom Peters’ Marketing@Microsoft:

We Are [Still] in a Brawl with No Rules

Seattle/01.24.2003

Thank You &

Godspeed!

Slides at …

tompeters.com

“We are in a brawl with no

rules.”

Paul Allaire

“IT MAY SOMEDAY BE SAID THAT THE 21ST CENTURY BEGAN ON SEPTEMBER 11, 2001. …

“Al-Qaeda represents a new and profoundly dangerous kind of

organization—one that might be called a ‘virtual state.’ On September 11 a virtual

state proved that modern societies are vulnerable as never before.”—Time/09.09.2002

“The deadliest strength of America’s new adversaries is their very fluidity, Defense Secretary Donald

Rumsfeld believes. Terrorist networks, unburdened by fixed borders, headquarters or conventional forces, are

free to study the way this nation responds to threats and adapt themselves to prepare for what Mr. Rumsfeld is certain will be another attack. …

“ ‘Business as usual won’t do it,’ he said. His answer is to develop swifter, more lethal ways

to fight. ‘Big institutions aren’t swift on their feet in adapting but rather ponderous and clumsy

and slow.’ ”—The New York Times/09.04.2002

From: Weapon v. Weapon

To: Org structure v. Org structure

Eric Shinseki’s [New] Army

Info-intense.Network-centric. Flat.Fast.Agile.Adaptable.Light but Lethal.Talent-driven/ “I Am An Army Of One.”

“Dawn Meyerreicks, CTO of the Defense Intelligence Systems Agency, made one of the most fateful military calls of the 21st century. After 9/11 … her office

quickly leased all the available transponders covering Central Asia. The implications should change everything about U.S. military thinking in the

years ahead.

“The U.S. Air Force had kicked off its fight against the Taliban with an ineffective bombing campaign, and Washington was anguishing over whether to send in a few Army divisions. Donald Rumsfeld told Gen. Tommy Franks to

give the initiative to 250 Special Forces already on the ground. They used satellite phones, Predator surveillance drones, and GPS- and laser-based

targeting systems to make the air strikes brutally effective.

“In effect, they ‘Napsterized’ the battlefield by cutting out the middlemen (much of the military’s command and control) and working directly with the

real players. … The data came in so fast that HQ revised operating procedures to allow intelligence analysts and attack planners to work directly

together. Their favorite tool, incidentally, was instant messaging over a secure network.”—Ned Desmond/“Broadband’s New Killer App”/Business

2.0/ OCT2002

“If early soldiers idealized Napoleon or Patton, network-centric warriors

admire Wal*Mart, where point-of-sale-scanners share information on a near real-time basis with suppliers and also produce data that is mined to help leaders develop new strategic or tactical plans. Wal*Mart is an example of translating information into

competitive advantage.”—Tom Stewart, Business 2.0

1. The Destruction Imperative.

“Success is a lousy teacher. It seduces smart people into

thinking they can’t lose.” —Bill Gates

Forbes100 from 1917 to 1987: 39 members of the Class of ’17 were alive

in ’87; 18 in ’87 F100; 18 F100 “survivors” underperformed the market

by 20%; just 2 (2%), GE & Kodak, outperformed the market 1917 to 1987.S&P 500 from 1957 to 1997: 74 members of the Class of ’57 were

alive in ’97; 12 (2.4%) of 500 outperformed the market from 1957 to 1997.

Source: Dick Foster & Sarah Kaplan, Creative Destruction: Why Companies That Are Built to Last Underperform the Market

“Mr. Foster and his McKinsey colleagues collected detailed

performance data stretching back 40 years for 1,000 U.S. companies. They

found that none of the long-term survivors managed to outperform the market. Worse, the longer companies had been in the database, the worse

they did.”—Financial Times/11.28.2002

“It’s just a fact: Survivors underperform.”

—Dick Foster

The Seven Deadly Sins

ArroganceArroganceArroganceArroganceArroganceArroganceArrogance

2. IS/ IT/ Web: It’s the

Organization, Stupid

“The organizations we created have become tyrants. They have taken

control, holding us fettered, creating barriers that hinder rather than help our businesses. The lines that we drew on our neat organizational diagrams have turned into walls

that no one can scale or penetrate or even peer over.” —Frank Lekanne Deprez &

René Tissen, Zero Space: Moving Beyond Organizational Limits.

“Ebusiness is about rebuilding the organization from the

ground up. Most companies today are not built to exploit the Internet.

Their business processes, their approvals, their hierarchies, the

number of people they employ … all of that is wrong for running an

ebusiness.”Ray Lane, Kleiner Perkins

“There’s no use trying,” said Alice. “One can’t believe impossible things.”

“I daresay you haven’t had much practice,” said the Queen. “When I was

your age, I always did it for half an hour a day. Why, sometimes I’ve

believed as many as six impossible things before breakfast.”

Lewis Carroll

“Don’t rebuild. Reimagine.”

The New York Times Magazine on the future of the WTC space in Lower Manhattan/09.08.2002

“CRM has, almost universally, failed

to live up to expectations.”

Butler Group (UK)

CGE&Y (Paul Cole): “Pleasant

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

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

enterprise strategy.”

3. The Heart of the Value- Added Revolution: The

“Solutions Imperative.”

Gerstner’s IBM: Systems Integrator of

choice. Global Services:

$35B. Pledge/’99: Business Partner Charter. 72 strategic partners,

aim for 200. Drop many in-house programs/products. (BW/12.01).

“We want to be the air traffic

controllers of electrons.”

Bob Nardelli, GE Power Systems

“Customer Satisfaction” to “Customer Success”

“We’re getting better at [Six Sigma] every day. But we really

need to think about the customer’s profitability. Are customers’

bottom lines really benefiting from what we provide them?”Bob Nardelli, GE Power Systems

Keep In Mind: Customer Satisfaction

versus Customer

Success

4. A World of Scintillating/

Awesome “Experiences.”

“Experiences are as distinct from services as services are from

goods.”Joseph Pine & James Gilmore, The Experience Economy:

Work Is Theatre & Every Business a Stage

“The [Starbucks] Fix” Is on …

“We have identified a ‘third place.’ And I really believe that sets us apart. The third place is

that place that’s not work or home. It’s the place our

customers come for refuge.”Nancy Orsolini, District Manager

“Club Med is more than just a ‘resort’; it’s a means of rediscovering oneself, of inventing an

entirely new ‘me.’ ”Source: Jean-Marie Dru, Disruption

Experience: “Rebel Lifestyle!”

“What we sell is the ability for a 43-year-old accountant to dress in black leather, ride

through small towns and have people be afraid of him.”

Harley exec, quoted in Results-Based Leadership

WHAT CAN BROWN DO FOR YOU?

5. “It” all adds up to … THE BRAND.

“WHO ARE WE?”

“WHAT’S OUR

STORY?”

“We are in the twilight of a society based on data. As information and intelligence become the domain of computers, society will place more value on the one human ability that cannot be automated: emotion.

Imagination, myth, ritual - the language of emotion - will affect everything from our purchasing decisions

to how we work with others. Companies will thrive on the basis of their stories and myths. Companies will need to understand

that their products are less important than their stories.”

Rolf Jensen, Copenhagen Institute for Future Studies

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

Gandhi

“The events of the last four years and the changes in our industry make this a

good point to take stock of ourselves and our mission, to understand how

others perceive us, and to think about how we can do a better job explaining

who we are and what matters to us. Many of us feel a disconnect in the way we see ourselves and our mission and motives, and the way we are portrayed,

and only we can change that.” —Steve Ballmer/NY Times Magazine/11.24.2002

6. Boss Job One: The Talent Obsession.

Talent!

Tina Brown: “The first thing to do is to hire enough

talent that a critical mass of excitement starts to

grow.”Source: Business2.0/12.2002-01.2003

“The leaders of Great Groups love talent and know where to find it. They revel in

the talent of others.”Warren Bennis & Patricia Ward Biederman,

Organizing Genius

“AS LEADERS, WOMEN RULE: New Studies find that female managers

outshine their male counterparts in almost

every measure”Title, Special Report, Business Week, 11.20.00

Women’s Strengths Match New Economy Imperatives: Link [rather than rank] workers;

favor interactive-collaborative leadership style [empowerment beats top-down decision making]; sustain fruitful collaborations; comfortable with sharing information; see redistribution of power

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

“rationality”; inherently flexible; appreciate cultural diversity.

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

7. Trends I:

Women Roar.

?????????Home Furnishings … 94%

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

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

Consumer Electronics … 51% Cars … 60% (90%)

All consumer purchases … 83% Bank Account … 89%

Health Care … 80%

91% women: ADVERTISERS DON’T

UNDERSTAND US. (58% “ANNOYED.”)

Source: Greenfield Online for Arnold’s Women’s Insight Team (Martha Barletta, Marketing to Women)

Women's View of Male Salespeople

Technically knowledgeable; assertive; get to the point; pushy;

condescending; insensitive to women’s needs.

Source: Judith Tingley, How to Sell to the Opposite Sex (Martha Barletta, Marketing to Women)

Initiate Purchase

Men: Study “facts & features.”

Women: Ask lots of people for input.

Source: Martha Barletta, Marketing to Women

Carol Gilligan/ In a Different Voice

Men: Get away from authority, familyWomen: Connect

Men: Self-orientedWomen: Other-oriented

Men: RightsWomen: Responsibilities

FemaleThink/ Popcorn“Men and women don’t think the same

way, don’t communicate the same way, don’t buy for the same reasons.”

“He simply wants the transaction to take place. She’s interested in

creating a relationship. Every place women go, they make

connections.”

Read This Book …

EVEolution: The Eight Truths of Marketing to Women

Faith Popcorn & Lys Marigold

EVEolution: Truth No. 1

Connecting Your Female Consumers to Each

Other Connects Them to Your Brand

“Women don’t buy

brands. They join them.”

EVEolution

1. Men and women are different.2. Very different.3. VERY, VERY DIFFERENT.4. Women & Men have a-b-s-o-l-u-t-e-l-y nothing in common.4. Women buy lotsa stuff.5. WOMEN BUY A-L-L THE STUFF.6. Women’s Market = Opportunity No. 1.7. Men are (STILL) in charge.8. MEN ARE … TOTALLY, HOPELESSLY CLUELESS ABOUT WOMEN.9. Women’s Market = Opportunity No. 1.10. NO SHIT.

8. Trends II: Boomer Bonanza/ Godzilla Geezer.

“Take the Road Less Traveled”—Advertising Age

headline re Sony, upon targeting “Zoomers,” the

neglected 34% of its customers who are

age 50+

Subject: Marketers & Stupidity

“It’s 18-44, stupid!”

Subject: Marketers & Stupidity

Or is it: “18-44 is stupid,

stupid!”

“Marketers attempts at reaching those over 50 have

been miserably unsuccessful. No market’s motivations and needs are so poorly understood.”—Peter

Francese, founding publisher, American Demographics

50+

$7T wealth (70%)/$2T annual income50% all discretionary spending

79% own homes/40M credit card users41% new cars/48% luxury cars

$610B healthcare spending/74% prescription drugs

5% of advertising targetsKen Dychtwald, Age Power: How the 21st

Century Will Be Ruled by the New Old

9. Leading & Legacy: Soft Is

Hard

“Soft” Is “Hard”

- ISOE

“A leader is a dealer in hope.”

Napoleon (+TP’s writing room pics)

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

“The two most powerful things

in existence: a kind word and a thoughtful gesture.”

Ken Langone, CEO, Invemed Associates [from Ronna Lichtenberg, It’s Not Business, It’s Personal]

“It was much later that I realized Dad’s secret. He gained respect by giving it. He

talked and listened to the fourth-grade kids in Spring Valley who shined shoes the same way he talked and listened to a

bishop or a college president. He was seriously interested in who you were and what you had to say.”

Sara Lawrence-Lightfoot, Respect

“My favorite word is grace – whether it’s amazing grace, saving grace, grace under fire, Grace Kelly. How we live contributes to beauty – whether it’s how we treat other people or

the environment.”Celeste Cooper, designer

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

Engagement, Commitment, Great Causes & Determination to Make a Positive Difference in Others’ Lives, Shared Adventures, Bizarre Failures,

Growth, Insatiable Appetite for Change.]

Thank You!