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“ORGANIZATION” = STRATEGY: THE GUERRILLA ADVANTAGE Tom Peters/04August2006

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Page 1: Guerilla Advantage

“ORGANIZATION” = STRATEGY: THE

GUERRILLA ADVANTAGETom Peters/04August2006

Page 2: Guerilla Advantage

“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: Buy a very large one and just wait.”

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

Page 3: Guerilla Advantage

“New Era of War, and U.S. Isn’t Ready Conflicts of Future:

Nations vs. Networks” —Headline/p1/

International Herald Tribune /31.07.2006

Opening: “Pound for pound and pounding, the Israeli military is one of the world’s finest. But Hezbollah, with the discipline and ferocity of its fighters and its ability

to field advanced weaponry, has taken Israel by surprise. Now that surprise has rocketed back to

Washington and across the U.S. military.”

“We are into the first great war between nations and networks. This proves the growing strength of networks as a threat to American national security.” —John Arguilla,

USNPGS, from “Net Warfare 101”

Page 4: Guerilla Advantage

Small units … agile … lethal … invisible … guerrilla …

network warfare … distributed … dispersed … mobile .. Flat [hierarchy] …

improvisational … etc.

Page 5: Guerilla Advantage

“ORGANIZATION” = STRATEGY: THE GUERILLA ADVANTAGE: Agile. (Sluggish.) Wily. (Big footprint.) Always

moving. (Seldom moving.) Brownian motion per se bewilders the enemy. (Blind despite NewTech.) Momentum comes from small

wins. (Small wins invisible, too small scale to execute.) Goal is converts, not territory. (Protect territory.) Offense. (Defense.) Travel light; very high “tooth to tail” ratio. (Travel heavy, low

“tooth to tail.) Live off the land. (Tortuous supply chain.) UNPREDICTABLE; BEHAVIOR NEARLY RANDOM. (VERY PREDICTABLE; LONG PLANNING CYCLE; OBSERVABLE

FOOTPRINT.) Dug in but not dug in. (Dug in but vulnerable.) No HQ; floating HQ. (Big HQ at home and away.) Few fixed assets.

(Mostly fixed assets.) Scroungers mentality. (Methodical & complex.) Mobile communications. (Fixed communications.) Everything,

including people, disposable. (Tight “asset management,” materials & humans.) No fortress to guard. (Big fortresses which must be

guarded.) Replaceable leaders. (Formal, rule-based hierarchy.) Self-healing network, like Internet. (Network far more fixed.) Hackers

mentality. (Planner’s mentality.) DECENTRALIZED. (CENTRALIZED.) KIAs are celebrated. (KIAs are the ultimate loss.)

Natural reorganizations following cell division model. (Methodical, high-friction change.) Few formal layers. (Lotsa formal

layers.) Few rules. (Lotsa rules.)

Page 6: Guerilla Advantage

“ORGANIZATION” = STRATEGY: THE GUERILLA ADVANTAGE: Management By Vision. (Management by law-rule

books.) Miniaturized but deadly weapons. (Fixed weapons.) Invent your own arsenal. (Gazillion-year weapons acquisition cycle.) Multiplier impact by spreading confusion. (Need set-piece victories to satisfy constituents.) Passion. (Supportive at the level of car decals.)

Little value on current rules. (Value of life paramount.) Ad hoc; RFA or FFF. (R.A.F. / Ready. Aim. Aim. Aim. Fire.) SIMPLE

PHILOSOPHY THAT BINDS, FLEXIBLE ORG, FLEXIBLE OPS. (COMPLEX PHILOSOPHY, INFLEXIBLE ORG, INFLEXIBLE OPS.)

Different time frame; a 1,000 year conflict. (Need to show progress daily.) Attract youth with more energy and zeal than good

sense. (Mature and inflexible and cautious and methodical.) Minimum need to spin; as easy to spin a loss as a win. (Battle plans designed

& distorted & diluted to produce spin per se.) Ad hoc. (Due process.) “Media” looks for wins; media values small wins. (Media fixated by SNAFUs; small wins beneath the radar.) Win when enemy over-

reacts. (Lose if over-react.) Ubiquitous webs. (Ubiquitous bureaucracy.) Recruit, support, impact follows Virus Model; recruit via Buzz. (All is formal.) Value of conventional scale

declining exponentially. (Still citizens of a “big is beautiful” age.) Virtually no way to lose; a loss is a win as much or more than a win is a win. (Virtually no way to win; a win is often a loss as much as a

loss is a loss.)

Page 7: Guerilla Advantage

“It is not the strongest of the

species that survives, nor the most intelligent, but the one most

responsive to change.” —Charles Darwin

Page 8: Guerilla Advantage

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

against. Reluctant mutators in quickly

changing times are also selected against.”

—Carl Sagan & Ann Druyan, Shadows of Forgotten Ancestors

Page 9: Guerilla Advantage

“The most successful

people are those who

are good at plan B.”

—James Yorke, mathematician, on chaos theory in The New Scientist

Page 10: Guerilla Advantage

“If things seem under control, you’re just not

going fast enough.” —Mario Andretti

Page 11: Guerilla Advantage

Ready.Fire.Aim.

Ross Perot

Page 12: Guerilla Advantage

“Crazy Times Call for Crazy

Organizations” —Subtitle, The Tom Peters Seminar (1993)

Page 13: Guerilla Advantage

Inflexibility and mass are favored in

static times. Flexible and

ephemeral are favored in chaotic

times.

Page 14: Guerilla Advantage

Stephen Jay Gould:

Bacteria rule! Sizeable cases

[e.g. humans] are virtually irrelevant anomalies.

Page 15: Guerilla Advantage

False Attributions

German citizenry low morale, no appetite for war

3rd Republic government rather well regarded

French Army in good shape, surprisingly well armed, decent strategy (in dozens of simulations, French usually win)

Blitzkrieg not used

Germans very vulnerable

Lousy French intelligence* and luck perhaps determinant (*“intelligence information tends to be sifted to reinforce

received ideas rather than to overturn them”)

Many plausible competing hypotheses

Source: Julian Jackson, The Fall of France (cf Nassim Nicholas Taleb, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets.)

Page 16: Guerilla Advantage

“Operations is policy.”—Fred Malek*

*Andy Pearson. Al McDonald. Jack Welch(?). U.S. Grant. Horatio Nelson.

Page 17: Guerilla Advantage

“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 between 1917 and 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

Page 18: Guerilla Advantage

Sluggish + Obese + Unimaginative + More

Sluggish + More Obese + More Unimaginative + Even More Sluggish + Even More

Obese + Even More Unimaginative = Nissan + Renault + GM = Innovative Challenger for Toyota????

Page 19: Guerilla Advantage

??????????????

Crappy Management (GM) + Arrogant-Overstretched

Management (Carlos G) = Great Management

Page 20: Guerilla Advantage

“How we feel about the evolving future tells us who we are as individuals and as a civilization:

Do we search for stasis—a regulated, engineered world? Or do we embrace dynamism—a world of constant creation, discovery and competition? Do we value stability and

control or evolution and learning? Do we think that progress requires a central blueprint, or do we see it as a decentralized, evolutionary process?? Do we see mistakes as permanent disasters, or the correctable byproducts of

experimentation? Do we crave predictability or relish surprise? These two poles, stasis and dynamism, increasingly define our political,

intellectual and cultural landscape.”

—Virginia Postrel, The Future and Its Enemies

Page 21: Guerilla Advantage

What “We” Know “For Sure” About Innovation

Big mergers [by & large] don’t workScale is over-rated

Strategic planning is the last refuge of scoundrelsFocus groups are counter-productive“Built to last” is a chimera (stupid)

Success kills“Forgetting” is impossible

Re-imagine is a charming idea“Orderly innovation process” is an oxymoronic phrase

(= Believed only by morons with ox-like brains)“Tipping points” are easy to identify … long after they will do you any good

“Facts” aren’tAll information making it to the top is filtered

to the point of danger and hilarity“Success stories” are the illusions of egomaniacs (and “gurus”)

If you believe the memoirs of CEOs you should be institutionalized“Herd behavior” (XYZ is “hot”) is ubiquitous

… and amusing“Top teams” are “Dittoheads”

CEOs have little effect on performance“Expert” prediction is rarely better than rolling the dice

Page 22: Guerilla Advantage

“While many people big oil finds with big companies, over the years

about 80 percent of the oil found in the United States has been

brought in by wildcatters such as Mr Findley, says Larry

Nation, spokesman for the American Association of Petroleum

Geologists.” —WSJ, “Wildcat Producer Sparks Oil Boom in Montana,” 0405.2006

Page 23: Guerilla Advantage

Blitzkrieg?

Page 24: Guerilla Advantage

Case: Perceived

Rommel invents Blitzkrieg.Krauts kick the crap out of the

Frogs in two weeks.Q.E.D.

Page 25: Guerilla Advantage

Case: Lesson Learned

Planned innovation (P.I., not C.I.) is possible, is cool, is

effective. (Write it up. Publish.)

Page 26: Guerilla Advantage

Case: Reality

Germans cross Meuse into France. Whoops: French intelligence completely drops

the ball. (Loses track of the Germans—no kidding.)

Germans keep advancing; outrun supply lines; no land-air co-ordination.

Hitler orders advance stopped.General never gets the word.

General marches to Paris, virtually unopposed.Germans shocked.

After the fact, Germans label it “Blitzkrieg.”

Page 27: Guerilla Advantage

Case: Lesson Learned

Do something.Get lucky.

Attribute luck to superior planning.

Get medals.

Page 28: Guerilla Advantage

Smashing Conventional Wisdom

“Blitzkrieg in fact emerged in a rather haphazard way from the experience of the French campaign,

whose success surprised the Germans as much as the French. Why otherwise did the High Command try on various occasions, with Hitler’s backing, to slow the panzers down? The victory in France* came about

partly because the German High Command temporarily lost control of the battle. The decisive moment in this process was Guderian’s decision to move immediately westward on 14 May, the day

after the Meuse crossing, wrenching the whole of the rest of the army along behind him.”

*messed up traffic, little close air support, random heroics by some small bits of Guderian’s forces, Guderian not a disciple of

the WWI-derived “strategy of indirect approach”

Source: Julian Jackson, The Fall of France