tom peters’ seminar2002: we are in a brawl with no rules! mastercard/sevilla/28may2002

Tom Peters’ Seminar2002:

We Are In A Brawl With No

Rules!MasterCard/Sevilla/28May2002

CONTEXT

Confusion Reigns.

“There will be more

confusion in the business world in the next decade than in any decade in history. And the current pace of

change will only accelerate.”Steve Case

The Destruction Imperative.

“Good management was the most powerful reason [leading firms] failed to stay atop their industries. Precisely because these firms

listened to their customers, invested aggressively in technologies that would provide their customers more

and better products of the sort they wanted, and because they carefully studied market trends and

systematically allocated investment capital to innovations that promised the best returns, they lost

their positions of leadership.”

Clayton Christensen, The Innovator’s Dilemma

W.I.W.?

20 of 26(7 of top 10*)

*P&G: Declining domestic sales in 20 of 26 categories; 7 of top 10

categories. (The “billion-dollar” problem.)

Source: Advertising Age 01.21.2002/BofA Securities

“Instead of having the brand be seen as good-better-best for the same type of clothing, they’ve

got to give it more uniqueness.” —David Martin,

Interbrand US, on The Gap’s problems

Deviants, Inc. “Deviance tells the story of every mass

market ever created. What starts out weird and dangerous

becomes America’s next big corporate payday. So are you looking for the next mass market idea? It’s out there … way

out there.”

Source: Ryan Matthews & Watts Wacker, Fast Company (03.02)

IS/IT/Web … “On the Bus” or “Off the Bus.”

E.g. …

Jeff Immelt: 75% of “admin, back room, finance” “digitalized” in

3 years.

Source: BW (01.28.02)

IBM’s Project

eLiza!** “Self-bootstrapping”/ “Artilects”

“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

Case: CRM

“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.”

RESPONSE

The Heart of the Value- Added Revolution:

The “Solutions Imperative.”

Base Case: The Sameness Trap

“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

“Customers will try ‘low cost

providers’ … because the Majors have not

given them any clear reason not to.”

Leading Insurance Industry Analyst

Getting Beyond Lip Service!

“No longer are we only an insurance provider. Today, we also offer our customers the products and services that help them achieve their dreams, whether it’s financial

security, buying a car, paying for home repairs, or even taking a dream

vacation.”—Martin Feinstein, CEO, Farmers Group

PSF Unbound+: 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

“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

“Guinness as a brand is all about community.

It’s about bringing people together and sharing

stories.”—Ralph Ardill, Imagination, in re Guinness Storehouse

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

Bob Lutz: “I see us as being in the art business. Art,

entertainment and mobile sculpture, which,

coincidentally, also happens to provide transportation.”

Source: NYT 10.19.01

Getting Beyond Lip Service!

“No longer are we only an insurance provider. Today, we also offer our customers the products and services that help them achieve their dreams, whether it’s financial

security, buying a car, paying for home repairs, or even taking a dream

vacation.”—Martin Feinstein, CEO, Farmers Group

The “Experience Ladder”

Experiences Services

Goods Raw Materials

1940: Cake from flour, sugar (raw materials economy): $1.00

1955: Cake from Cake mix (goods economy): $2.00

1970: Bakery-made cake (service economy): $10.00

1990: Party @ Chuck E. Cheese (experience economy) $100.00

Message:

“Experience” is the

“Last 80%”

P.S.: “Experience” applies to all work!

1940: Cake from flour, sugar (raw materials economy): $1.00

1955: Cake from Cake mix (goods economy): $2.00

1970: Bakery-made cake (service

economy): $10.001990: Party @ Chuck E. Cheese

(experience economy) $100.00

The “Experience Ladder”

Experiences Services

Goods Raw Materials

Ladder Position Measure

Solutions Success(Experiences)

Services Satisfaction

Goods Six-sigma

The “Soul” of “Experiences”:

Design Mindfulness.

What is it?

The I.D. [International Design] Forty*

Airstream … Alfred A. Knopf … Apple Computer … Amazon.com …

Bloomberg … Caterpillar … CNN … Disney … FedEx … Gillette … IBM … Martha Stewart … New Balance …

Nickelodeon … Patagonia … The New York Yankees … 3M … Etc.

* List No. 1, 1999

Design’s place in the universe.

All Equal Except …

“At Sony we assume that all products of our competitors have basically the same

technology, price, performance and

features. Design is the only thing that differentiates one product from another in the

marketplace.”Norio Ohga

Bottom Line.

THE BASE CASE: I am a design fanatic. Though not “artistic,” I love “cool stuff.” But it goes [much]

further, far beyond the personal. Design has become a professional obsession. I SIMPLY BELIEVE THAT DESIGN PER SE IS THE PRINCIPAL

REASON FOR EMOTIONAL ATTACHMENT [or detachment] RELATIVE TO A PRODUCT OR

SERVICE OR EXPERIENCE. Design, as I see it, is

arguably the #1 DETERMINANT of whether a product-service-experience stands out … or doesn’t.

Furthermore, it’s another “one of those things” that damn few companies put – consistently – on the

front burner.

KEY WORDS: Partners in creating Memorable, Value-added Solutions/ Successes/ Experiences for our Customers.

WHICH REQUIRES: Total Enterprise Responsiveness … beyond functional walls.

It all adds up to …

THE BRAND.

The Heart of Branding …

“WHO ARE WE?”

“Most companies tend to equate branding with the company’s marketing. Design a new marketing

campaign and, voilà, you’re on course. They are wrong. The task is much bigger. It is about fulfilling our potential … not about a new logo, no matter how

clever. WHAT IS MY MISSION IN LIFE? WHAT DO I WANT TO CONVEY TO PEOPLE? HOW DO

I MAKE SURE THAT WHAT I HAVE TO OFFER THE WORLD IS ACTUALLY UNIQUE? The brand has to give of itself, the company has to give of itself, the management has to give of itself. To

put it bluntly, it is a matter of whether – or not – you want to be … UNIQUE … NOW.”

Jesper Kunde, A Unique Moment

“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

“Apple opposes, IBM solves, Nike exhorts,

Virgin enlightens, Sony dreams, Benetton

protests. … Brands are not nouns but verbs.”

Source: Jean-Marie Dru, Disruption

“EXACTLY HOW ARE WE

DRAMATICALLY DIFFERENT?”

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

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

3RD Law: DRAMATIC DIFFERENCE (Execs Don’t Get It.)

Source: Jump Start Your Business Brain, Doug Hall

“EXACTLY HOW DO I PASSIONATELY CONVEY THAT

DRAMATIC DIFFERENCE TO THE

CLIENT ?”

A TREND WORTH

TRILLIONS

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%

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: Barbara & Allan Pease’s

Why Men Don’t Listen & Women Can’t Read Maps

“As a hunter, a man needed vision that would allow him to zero in on targets in the distance … whereas a woman needed eyes

to allow a wide arc of vision so that she could monitor any predators sneaking up on the nest. This is why modern men can find their way effortlessly to a distant pub,

but can never find things in fridges, cupboards or drawers.”

Barbara & Allan Pease, Why Men Don’t Listen & Women Can’t Read Maps

“Resting” State: 30%, 90%: “A woman knows her children’s

friends, hopes, dreams, romances, secret fears, what they are

thinking, how they are feeling. Men are vaguely aware of some short people also living in the house.”

Barbara & Allan Pease, Why Men Don’t Listen & Women Can’t Read Maps

“Female hearing advantage contributes significantly to what is

called ‘women’s intuition’ and is one of the reasons why a woman can read between the lines of what people say. Men, however, shouldn’t despair.

They are excellent at imitating animal sounds.”

Barbara & Allan Pease, Why Men Don’t Listen & Women Can’t Read Maps

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

“The ‘Connection Proclivity’ in women starts early. When asked,

‘How was school today?’ a girl usually tells her mother every

detail of what happened, while a boy might grunt, ‘Fine.’ ”

EVEolution

What If …

“What if ExxonMobil or Shell dipped into their credit card database to help commuting women

interview and make a choice of car pool partners?”

“What if American Express made a concerted effort to connect up female empty-nesters

through on-line and off-line programs, geared to help women re-enter the workforce with today’s

skills?”

EVEolution

“Women don’t buy

brands. They join them.”

EVEolution

Lowe’s …

Gets it. 1989:

13%/“lumber shop” … 2002: >50%

BOTTOM LINE: LEADING IN

TOTALLY SCREWED- UP TIMES

The Kotler Doctrine:

1965-1980: R.A.F.(Ready.Aim.Fire.)

1980-1995: R.F.A.(Ready.Fire!Aim.)

1995-????: F.F.F.(Fire!Fire!Fire!)

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

new field often isn’t very good. But,

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

it right.”Business Week (5/01)

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

They’re eviscerated in public for lousy

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

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

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

“Fail faster. Succeed sooner.”

David Kelley/IDEO

“I’m not comfortable unless

I’m uncomfortable.”—Jay Chiat

G.H.: “Create a ‘cause,’ not a ‘business.’ ”

Leaders don’t just make products and make decisions.

Leaders make meaning. —John Seeley Brown

Bottom Line: POTENTIAL FOR TRANSFORMATION (not “change”) =

ENORMOUSCheck & Cash to Cards

Lifestyle Segmentation/ Infinite Customization

Bold Technological Experimentation

WORDS TO REMEMBER: Kids … Women … Design-

intensive Experience … Experiment … “Infinite

Segmentation.”

Thank You!