Tom Peters’

We Are in a Brawl with No Rules

Phoenix Technologies/10.13.2002

TP’s 7 Phoenix Technologies Biases

1. Great institution.2. Great product.3. (Potentially) great story.4. Hopelessly under-branded.5. Awesome opportunities—product & branding.6. Scope ought to be expanded (dramatically)—“the Cisco of my computer’s innards.”7. Engineering is cool—but there’s more to life.8. Success: a marketer-to-marketer sale, not an engineer-to-engineer sale.

I. Confusion Reigns.

“We are in a

brawl with no rules.”

Paul Allaire

II. Destruction Rules.

“There’s going to be a fundamental change in the

global economy unlike anything we have had since the cavemen began bartering.”

Arnold Baker, Chief Economist, Sandia National Laboratories

“In 25 years, you’ll probably be able to get the

sum total of all human knowledge on a personal

device.”Greg Blonder, VC [was Chief Technical

Adviser for Corporate Strategy @ AT&T] [Barron’s 11.13.2000]

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

“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

No Wiggle Room!

“Incrementalism is innovation’s worst enemy.”

Nicholas Negroponte

“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 a virtual

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

“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

III. B-I-G “Value Added” Wins.

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

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

“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

IV. “Value Added” = Scintillating Customer

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?

The “Experience Ladder”

Experiences Services

Goods Raw Materials

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

“Lexus sells its cars as containers

for our sound systems. It’s

marvelous.”—Sidney Harman/

Harman International

Ladder Position Measure

Solutions Success(Experiences)

Services Satisfaction

Goods Six-sigma

It’s All About EXPERIENCES: “Trapper” to “Wildlife Damage-control Professional”

Trapper: <$20 per beaver pelt.

WDCP: $150/“problem beaver”; $750-$1,000 for flood-control

piping … so that beavers can stay.

Source: WSJ/05.21.2002

V. Experiences Plus: The “Dream Fulfillment Business.”

DREAM: “A dream is a complete moment in the life of a client.

Important experiences that tempt the client to commit substantial resources. The essence of the desires of the consumer. The

opportunity to help clients become what they want to be.” —Gian Luigi

Longinotti-Buitoni

Common Products “Dream” Products

Maxwell House StarbucksBVD Victoria’s SecretPayless FerragamoHyundai FerrariSuzuki Harley DavidsonAtlantic City AcapulcoNew Jersey CaliforniaCarter KennedyConners Pele

Source: Gian Luigi Longinotti-Buitoni

The marketing of Dreams (Dreamketing)

Dreamketing: Touching the clients’ dreams.

Dreamketing: The art of telling stories and entertaining.

Dreamketing: Promote the dream, not the product.

Dreamketing: Build the brand around the main dream.

Dreamketing: Build the “buzz,” the “hype,” the “cult.”

Source: Gian Luigi Longinotti-Buitoni

VI. Brands Rule!

“Salt is salt is salt. Right? Not when it

comes in a blue box with

a picture of a little girl carrying an umbrella. Morton International continues

to dominate the U.S. salt market even though it charges more for a product that is demonstrably the same as many other

products on the shelf.”

Tom Asaker, Humanfactor Marketing

What Can [Can’t] Be Branded?

“Branding is not a problem if you have the right mentality. You go to your team and you pin up a

$200 Swiss Army Watch. Competing in the ridiculously crowded sub-$200 watch market,

they made it into a brand name, named after the most irrelevant and useless thing in history [the

Swiss Army]. And you say, ‘Gang, if they can do it, we can do it.’ ”

Barry Gibbons

The Heart of Branding …

“WHAT’S OUR

STORY?”

“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, Unique Now ... or Never

TP’s plea: No jargon!

“EXACTLY HOW ARE WE

DRAMATICALLY DIFFERENT?”

“You do not merely want to be the best of the best. You

want to be considered the only ones who do

what you do.”

Jerry Garcia

Can Be Done in Tech: “Don’t Leave Home Without Us.”

IBM*Intel

Microsoft*NortonCisco*

*Clearly did not have the best technology

VII. Leadership:

GO FOR IT!

Bill Parcells’ World/ Brand You World!

BLAME NOBODY!EXPECT NOTHING!DO SOMETHING!

NY Post (9/99)

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

going fast enough.”

Mario Andretti

“Reward excellent failures. Punish

mediocre successes.”

Phil Daniels, Sydney exec

TP’s 7 Phoenix Technologies Biases

1. Great institution.2. Great product.3. (Potentially) great story.4. Hopelessly under-branded.5. Awesome opportunities—product & branding.6. Scope ought to be expanded (dramatically)—“the Cisco of my computer’s innards.”7. Engineering is cool—but there’s more to life.8. Success: a marketer-to-marketer sale, not an engineer-to-engineer sale.

“Let’s make a dent in the universe.”

Steve Jobs

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

Thank You!