NAPMInternational Purchasing
Conference & Educational Exhibit
New Orleans30 April 2000
WOW!
Larry > Bill
=
Your Moment!
No Wiggle Room!
“Incrementalism is innovation’s worst
enemy.” Nicholas Negroponte
“It means nothing less than the total
reinvention of this company.”
Jacques’ New New Ford
Ford + MSN CarPointFord + Yahoo!Ford + Oracle
Ford + HP/MCIWorldcomEtc.Etc.
NAPM: Not “Purchasing”!NAPM: Not “Supply Chain Mgt.”
NAPM = TE/IR!*
*Total Enterprise/Industry
Reinvention!
Forces @ Work
The Destruction Imperative!
Forget > Learn
“The problem is never how to get new, innovative thoughts into your mind, but how to get old ones out.”
Dee Hock
“Steve Ross had a wonderful philosophy: People get fired for
not making mistakes.”Bob Pittman
The Gales of Creative Destruction
+29M = -44M + 73M
+4M = +4M - 0M
Brand Inside
Brand Org!
108 X 5vs.
8 X 1*
* 540 vs. 8
And Now the Equivalent …
White Collar Revolution!
The Pincer 5
“Destructive” entrepreneurs/ Global Competition
“White Collar Robots”
THE INTERNET! [E.g.: GM + Ford + DaimlerChrysler]
Global Outsourcing [E.g.: India, Mexico]
Speed!!
RR on Sara Lee
“The most profitable businesses in the future will act as knowledge brokers, linking insights into what’s available
with insights into the customer’s individual needs
and preferences.”
The “&-!!+#$% in the middle”*
Jim Clark on Healtheon/WebMD
* ’twixt docs, patients, insurers and providers; $275B of $400B in waste; source: Michael
Lewis, The New New Thing
[ Incidentally …
CEO Jeff ArnoldAge: 30
First Start-up: Age 24]
“We want to be the air traffic controllers
of electrons.”Bob Nardelli,
GE Power Systems
Buzzsaw.com
Builders, Owners, Architects, Contractors, Suppliers
$4T industry
5,300 commercial bldg.-project specs on-line; +70 per day
Message …
“Supply Chain Integration demands total reinvention of the corporate structure, systems … and “culture.”
E.g. …
“E-business is the final nail in the coffin
for bureaucracy at GE.”
Jack Welch/GE Annual Report 2000
Magic!
[Inter]networked Markets
meet …
[Intra]networked Workers
Source: The Cluetrain Manifesto: The End of Business as Usual
“Hyperlinks subvert hierarchy!”
The Cluetrain Manifesto
GET IT? The Character of the Web, per The Cluetrain Manifesto …
HyperlinkedDecentralized
HypertimeOpen, direct access
Rich dataBroken [no one owns it or controls it]
Borderless
[ Words to Live By …
“Hierarchy is an organization with its face
toward the CEO and its ass toward the customer.”
Kjell Nordstrom and Jonas Ridderstrale, Funky Business]
Brand Inside
Brand Work!
Why are there no books on how to create
a “Cool, Rocking, WOW-producing
Purchasing Department”?
You are the Rock Stars
of the B2B Age!
[I.e.: Welcome to the Y2K New Orleans Jazz and Real Cool Purchasing
Dudes Festival!]
“Reward excellent failures. Punish
mediocre successes.”
Phil Daniels, Sydney exec
“You really got to me. So many of our information technology projects take on a life of their own, and I know they’ll never end up as more than ‘mediocre successes.’ ”
CEO, F100 financial services company (10-98)
“Every project we take on starts with a question:
How can we do what’s never been done
before?”Stuart Hornery, CEO, Lend Lease
The greatest dangerfor most of us
is not that our aim istoo high
and we miss it,but that it is
too lowand we reach it.
Michelangelo
Brand Inside
Brand Talent!
Issue Y2K
The Great War for Talent!
There is no “talent shortage” …
if …
you are a GPTW*
*Great Place To Work
“Our business needs a massive transfusion of talent. And talent, I believe, is most likely to be found among non-conformists, dissenters and rebels.” David Ogilvy
The NAESP …
Attributes of Those Who “Made” the 10th Grade History Book
–Committed!–Determined to make a difference!–Focused!–Passionate! –Irrational about their life’s project!–Ahead of their time / Paradigm
busters!–Impatient! / Action Obsessed
Attributes of Those Who “Made” the 10th Grade
History Book –Made lots of people mad!
–Flouted the chain of command!
–Creative / Quirky / Peculiar! / Rebels! / Irreverent!
–Masters of improv / Thrive on chaos / Exploit chaos!
Attributes of Those Who “Made” the 10th Grade History Book
–Forgiveness > Permission
–Bone honest!
–Flawed as the dickens!
– “In touch” with their followers’ aspirations
–Damn good at what they do!
??????????????????
“He grew his hair long, played guitar in a rock band, chased
girls, got into trouble. At age 17 he was flogged by his house
master, who described him as ‘the most difficult boy I’ve ever
had to deal with.’ ”
Tony Blair*
*talk/May 2000
Brand Outside
Context:
No “Commodities”!
“The ‘surplus society’ has a surplus of similar companies, employing similar
people, with similar educational backgrounds, working in similar jobs,
coming up with similar ideas, producing similar things, with similar
prices and similar quality.”
Kjell Nordstrom and Jonas Ridderstrale, Funky Business
“We make over three new product announcements a
day. Can you remember them?
Our customers can’t!”Carly Fiorina
“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
Message (Bud): The “distributor” is dead.
Long live the … value-added,
knowledge-intensive “business partner.”
Brand Outside
Strategy 1:
Lead the Customer!
“Wealth in this new regime flows directly from innovation, not
optimization. That is, wealth is not gained by perfecting the known,
but by imperfectly seizing the unknown.”
Kevin Kelly, New Rules for the New Economy
My NAPM Message 04.30.00 …
LEADERSHIP!PERIOD!
Brand Outside
Strategy 2:
Use E-Commerce
to Re-invent the Business!
“In the network economy, the website becomes the company’s
primary interface to the customer. The user interface becomes the marketing materials, store front,
store interior, sales staff and post-sales support all rolled into one.”
Jakob Nielsen, Designing Web Usability
Tomorrow Today: Cisco!*
70%Save $500M (service and tech
support)
Customer Engineer Chat Rooms ($1B?)
C.Sat e >> C.Sat H*Earth’s MVC
Cherry PickingVertical Markets
Plasticsnet.com: $370B; sellers pay $5K to $8K for
“storefront”; 5% to 10% cut
Hook: community services (database, catalogs, forums,
industry job bank, etc.)
Message …
COMMUNITY!/ COMMUNITY SERVICES!
“Begin by filling the stadium.
Then offer more and more services. Hopefully, as you add
more on top, the site becomes more integrated with the work process, until it is invaluable.”
Carl Bass, CEO, Buzzsaw.com
Community …
Somewhat mediated, segmented chat rooms (must be “managed”/ seeded)User-friendly technical/ professional info
Industry “intelligence”Some very timely stuff/ attractors
Hotlinks by the gazillion (to professional and unrelated stuff)
Expert/ advisor opinions (info, chats, etc.)Opportunity for users to build
own Web page
Message …
B2B is not the “cost cutting” program du jour!
Message …
Remember the “Soft stuff”!*
*Soft = Hard [Waterman & Peters]
Message [Paradox] …
TRUST RULES!
Speaking of paradoxes …
B2B
1999 – 2004: 50X
2004: $7.4Source: GartnerGroup (per Reuters 1-26-00)
T
GM/Ford/DaimlerChrysler (02-27)
Auto parts supply “Co.”$240B (+$500B)
I.P.O.
Goal?
Drive profits to zero!*
*Remember AMR and “dynamic pricing.”
Anne Busquet/ American Express
Not: “Age of the Internet”
Is: “Age of Customer Control”
Jack on the Web’s “Naked Truth”
“You desperately want to have enough technology in your
product offering, so that you don’t end up being in a commodity
situation.”
“Where does the Internet rank in priority?
It’s No. 1, 2, 3, and 4.” Jack Welch
Web Strategy: GE Power Systems
“Launch and Learn”(4 sites in 30 days)
There are 2 Kinds of …
Defense*
vs.
Offense**
*Fend off upstarts.**Reinvent our marketspace!
Jargon Bath!
Bureaucracy free …Systemically integrated …
Internet intense …Knowledge based …
Time and location free …“Instantly” responsive …
Customer centric …Mass customization enabled.
Translation …
Bureaucracy free = Flat org, no B.S.Systemically integrated = Whole supply chain
tightly wired/ friction freeInternet intense = Do it all via the Web
Knowledge based = Open accessTime and location free = Whenever, wherever
“Instantly” responsive = Speed demonsCustomer centric = Customer calls the shotsMass customization enabled = Every product
and service rapidly tailored to client requirements
Brand Outside
Strategy 3:
It’s the Experience!
“Experiences are as distinct from services as services are from
goods.”Joseph Pine & James Gilmore, The
Experience Economy: Work Is Theatre & Every Business a Stage
“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
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
Mantra: “Any good can be ing-ed”
the driving experiencethe pumping experience
the sitting experiencethe reading experiencethe washing experiencethe cooking experience
Joseph Pine & James Gilmore, The Experience Economy: Work Is Theatre & Every Business a Stage
Think …
Supply Chain-ingB2B-ing
“This is the end of the pure product era. For instance, car
makers are beginning to understand that the car is a
platform for delivering services that drive the customer
experience.”Carly Fiorina, HP @ Comdex ’99
Brand Leadership
Passion Rules!
Brand Leadership!
“A key – perhaps the key – to leadership is the effective
communication of a story.”
Howard Gardner Leading Minds: An Anatomy of Leadership
Brand Leadership:ENTHUSIASM RULES!
“I am a dispenser of enthusiasm.”/ Ben
Zander
Message to NAPM: You are
Re-invention Evangelists!
Ann Richards’ Dogma
Show up!
Know your message!
PUT YOURSELF AT RISK EVERY DAY!
This is your moment. This is
your game to lose … or WIN. Now!
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