Tom Peters’ 2002

We Are In A Brawl With No

Rules!GE Industrial Systems/01.06.2002

All Slides Available at …

tompeters.com

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

<1000A.D.: paradigm shift: 1000s of years1000: 100 years for paradigm shift

1800s: > prior 900 years1900s: 1st 20 years > 1800s

2000: 10 years for paradigm shift

21st century: 1000X tech

change than 20th century (“the ‘Singularity,’ a merger between humans and computers that is so rapid and profound it

represents a rupture in the fabric of human history”)

Ray Kurzweil

7 Rules for Leading/THRIVING in a Recession+

1. It’s ALREADY too late.2. Show up & tell the truth—CREDIBILITY rules.3. Kill with KINDNESS.4. Sharp pencils are imperative—but don’t forget that the CUSTOMER & our TALENT & RISKY INVESTMENTS are still our long-term Bread & Butter.

5. Everything’s different, everything’s the same—it’s the NEW ECONOMY, more than ever, stupid!6. “Use” the trauma to mount the bold initiatives you should have long before mounted: Flux = OPPORTUNITY.7. We’re in a War of Organizational Models—from retail to the Pentagon. IDEAS MATTER MOST.

SWA = American +

Continental + Delta + Northwest + United + USAirways.

(And: No post-0911 layoffs.)

Source: Boston Globe (12.22.2001)

New Org I: A White Collar Revolution.

108 X 5vs.

8 X 1= 540 vs. 8 (-98.5%)

IBM’s Project

eLiza!

“Unless mankind redesigns itself by changing our DNA through altering our genetic

makeup, computer-generated robots will take

over the world.” – Stephen

Hawking, in the German magazine Focus

New Org II: IS/IT … “On the Bus” or “Off the Bus.”

Dell’s OptiPlex Facility

Big Job: 6 to 8 hours.(80,000 per day)

Parts Inventory: 100 square feet.

Cisco!

90% of $20B (=$50M/day)Annual savings in service

and support from customer self-management: $550M (P.S.: C.Sat e >> C.Sat h)

Secret Cisco: Community!

Customer Engineer Chat Rooms/Collaborative

Design ($1B “free” consulting) (45,000 customer problems a week solved via

customer collaboration)

“We don’t sell insurance

anymore. We sell speed.”

Peter Lewis, Progressive

WebWorld = Everything

Web as a way to run your business’s innardsWeb as connector for your entire supply-demand chain Web as “spider’s web” which re-conceives the industry

Web/B2B as ultimate wake-up call to “commodity producers”

Web as the scourge of slack, inefficiency, sloth, bureaucracy, poor customer data

Web as an Encompassing Way of LifeWeb = Everything (P.D. to after-sales)

Web forces you to focus on what you do bestWeb as entrée, at any size, to World’s Best at Everything

as next door neighbor

Message: eCommerce is not a technology play! It is a

relationship, partnership, organizational and

communications play, made possible by new

technologies.

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.”

New Org III: The SOLUTIONS

IMPERATIVE.

Animating Force: The Sameness Trap

“We make over three new product announcements a

day. Can you remember them?

Our customers can’t!”Carly Fiorina

“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

The Big Day!

09.11.2000: HP bids …

$18,000,000,000for

PricewaterhouseCoopersconsulting business!

“These days, building the best server isn’t enough. That’s the

price of entry.”

Ann Livermore, Hewlett-Packard

HP … Sun … GE … IBM … UPS … UTC …

General Mills … Springs … Anheuser-Busch …

Carpet One … Delphi … Etc. … Etc.

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

of goods, information and capital that all the packages

[it moves] represent.”ecompany.com/06.01 (E.g., UPS Logistics

manages the logistics of 4.5M Ford vehicles, from 21 mfg. sites to 6,000 NA dealers)

“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

Omnicom: 57%

(of $6B) from marketing services

Who was the number one employer of

architecture school grads in the U.S.

last year?

“Assetless Company”

John Bryan, CEO, on selling all Sara Lee’s manufacturing

“Don’t own nothin’ if you can

help it. If you can, rent your

shoes.”F.G.

Bottom Line: The …

Solutions Imperative

1. It’s the (OUR!) organization, stupid!2. Friction free! 3. No STOVEPIPES!4. “Stovepiping” is an F.O.—Firing Offense.5. ALL on the web! (ALL = ALL.)6. Open access!6. Project Managers rule! (E.g.: Control the purse strings and evals.)7. VALUE-ADDED RULES! (Services Rule.) (Experiences Rule.) (Brand Rules.)8. SOLUTIONS RULE! (We sell SOLUTIONS. We sell PRODUCTIVITY & PROFITABILITY & CUSTOMER SUCCESS.)9. Solutions = “Our ‘culture.’ ”10. Partner with/Acquire B.I.C. (Best-In-Class).

11. All functions contribute equally—IS, HR, Finance, Purchasing, Engineering, Logistics, Sales, Etc.12. Project Management can come from any function.13. WE ARE ALL IN SALES. 14. We all invest in “wiring” the customer organization.15. WE ALL “LIVE THE BRAND.” (Brand = Solutions … that MAKE MONEY FOR OUR CUSTOMER- PARTNER.)16. We use the word “PARTNER” until we all want to barf!17. We NEVER BLAME other parts of our organization for screw-ups.18. WE AIM TO REINVENT THIS INDUSTRY!19. We hate the word-idea “COMMODITY.”

20. We believe in “High tech, High touch.”21. We are DREAMERS.22. We deliver . (PROFITS.) (CUSTOMER SUCCESS.)23. If we play the “SOLUTIONS GAME” brilliantly, no one can touch us!24. Our TEAM needs 100% I.C.s (Imaginative Contributors). This is the ULTIMATE “All Hands” affair!25. This is a hoot!

Solutions+ : 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

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

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!

Ladder Position Customer Measure

Solutions Success(Experience)

Services Satisfaction

Goods Six-sigma

Redefining the Work

Itself I: B.H.A.G.s and WOW Projects.

“Reward excellent failures. Punish

mediocre successes.”

Phil Daniels, Sydney exec

Each VP a V.C.: Portfolio of high-risk investments …

from all across the company.

Brand = Talent

Model 24/7*: Sports Franchise GM

*25/8/53

From “1, 2 or you’re out” [JW] to …

“Best Talent in each industry segment to build

best proprietary intangibles” [EM]

Source: Ed Michaels, War for Talent (05.17.00)

“We believe companies can increase their market cap 50 percent in 3 years. Steve

Macadam at Georgia-Pacific changed 20 of his 40 box plant managers to put

more talented, higher paid managers in charge. He increased

profitability from $25 million to $80 million in 2 years.”

Ed Michaels, War for Talent (05.17.00)

Message: Some people are better than other

people. Some people are a helluva lot better than other

people.

The Cracked Ones Let in the Light

“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

MantraM3

Talent = Brand

The Bdrock of H.V.A.:

THINK WEIRD.

Saviors-in-Waiting

Disgruntled CustomersOff-the-Scope Competitors

Rogue EmployeesFringe Suppliers

Wayne Burkan, Wide Angle Vision: Beat the Competition by Focusing on Fringe Competitors, Lost Customers, and Rogue Employees

CUSTOMERS: “Future-defining customers may

account for only 2% to 3% of your total, but they represent a crucial

window on the future.”Adrian Slywotzky, Mercer Consultants

COMPETITORS: “The best swordsman in the world doesn’t need to fear

the second best swordsman in the world; no, the person for him to be afraid of is some ignorant antagonist who has never had a

sword in his hand before; he doesn’t do the thing he ought to do, and so the expert isn’t

prepared for him; he does the thing he ought not to do and often it catches the expert out and

ends him on the spot.”

Mark Twain

Employees: “Are there enough weird

people in the lab these days?”

V. Chmn., pharmaceutical house, to a lab director (06.01)

Suppliers: There is an ominous downside to strategic supplier

relationships. An SSR supplier is not likely to function as any more than a mirror to your organization. Fringe suppliers that offer innovative business practices need

not apply.”

Wayne Burkan, Wide Angle Vision: Beat the Competition by Focusing on Fringe Competitors, Lost Customers, and Rogue Employees

It all adds up to …

THE BRAND.

“WHO ARE YOU [these days] ?”

TP to Client

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

Source: Jump Start Your Business Brain, Doug Hall

“WHO

ARE WE?”

“EXACTLY HOW ARE WE

DRAMATICALLY DIFFERENT?”

Message GE Industrial

Systems … a $20B company in 2005.

1. Recession = Opportunity. Speed rules!1A. Recession = Paradox. I.e., “Blocking and tackling” AND B.H.A.G.s.2. IS/IT/Web: “On the bus” or “Off the bus.”3. Pursue “Solutions”/ “Experiences” (Measure via “Customer Success—ONLY.)3A. It is/takes a team & project-driven revolution. E.g.: Death to STOVEPIPES. 4. Solutions “Strategy” = B.I.W. Talent.5. Pursue “Weird” (I.e.: employees, customers, vendors, acquisitions).

6. Solutions = V.A. = Opportunity = BRAND = $$$$B.

Thank You!