Embracing Disruption: Excelling in a Complex World

1. Tom Peters’ Re-Imagine!Business Excellence in a Disruptive AgeinfoUSA/Miami/01.23.2004

2. Slides at …tompeters.com

3. “Uncertainty is the only thing to be sure of.”—Anthony Muh,head of investment in Asia, Citigroup Asset Management“If you don’t like change, you’re going to like irrelevance even less.”—General Eric Shinseki, Chief of Staff, U. S. Army

4. Message(s)1. The world gets ever more complicated- confusing.2. The race to add more (and more) value becomes ever more challenging.3. Winners stick their necks out more than the rest.4. The Human Touch never gets old.5. Excellence is why we’re here.

5. All Bets Are Off.

6. “September 11 amounts to World War III—the third great totalitarian challenge to open societies in the last 100 years.”—Thomas Friedman/NYT/01.08.2004

7. “The World Must Learn to Live with a Wide-awake China”—Headline/FT/11.03

8. “14MILLION service jobs are in danger of being shipped overseas”—The Dobbs Report/USN&WR/11.03/re new UCB study

9. “There is no job that is America’s God-given right anymore.”—Carly Fiorina/ HP/ 01.08.2004

10. “There will be more confusion in the business world in the next decadethan in any decade in history. And the current pace of change will only accelerate.”Steve Case

11. 2. The Destruction Imperative.

12. Rate of Leaving F5001970-1990: 4XSource: The Company, John Micklethwait & Adrian Wooldridge (1974-200: One-half biggest 100 disappear)

13. Forget>“Learn”“The problem is never how to get new, innovative thoughts into your mind, but how to get the old ones out.”Dee Hock

14. 3. The White Collar Revolution & the Death of Bureaucracy.

15. Steel: 75 million tons in ’82 to 102 million tons in ’02. 289,000 steelworkers in ’82 to 74,000 steelworkers in ’02. Source: Fortune/11.24.03

16. E.g. …Jeff Immelt: 75% of “admin, back room, finance” “digitalized” in 3 years.Source: BW (01.28.02)

17. “Organizations will still be critically important in the world, but as ‘organizers,’ not ‘employers’!”— Charles Handy

18. Ford: “Vehicle brand owner”(“design, engineer, and market, but not actually make”)Source: The Company, John Micklethwait & Adrian Wooldridge

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

20. 100square feet

21. “Our entire facility is digital. No paper, no film, no medical records. Nothing. And it’s all integrated—from the lab to X-ray to records to physician order entry. Patients don’t have to wait for anything. The information from the physician’s office is in registration and vice versa. The referring physician is immediately sent an email telling him his patient has shown up. … It’s wireless in-house. We have 800 notebook computers that are wireless. Physicians can walk around with a computer that’s pre-programmed. If the physician wants, we’ll go out and wire their house so they can sit on the couch and connect to the network. They can review a chart from 100 miles away.” —David Veillette, CEO, Indiana Heart Hospital (HealthLeaders/12.2002)

22. “Dawn Meyerreicks, CTO of the Defense Information 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

23. Read It Closely:“We don’t sell insurance anymore.Wesell speed.”Peter Lewis, Progressive

24. e-piphanyepicurious.com

25. 5. The Heart of the Value Added Revolution: The “Solutions Imperative.”

26. “While everything may be better, it is also increasingly the same.”Paul Goldberger on retail, “The Sameness of Things,”The New York Times

27. “The ‘surplus society’ has a surplus of similar companies, employing similarpeople, with similar educational backgrounds, coming up with similarideas, producing similar things, with similarprices and similarquality.”Kjell Nordström and Jonas Ridderstråle, Funky Business

28. 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).

29. “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

30. Keep In Mind: Customer Satisfactionversus Customer Success

31. Nardelli’s goal ($50B to $100B by 2005): “… move Home Depot beyond selling ‘goods’ to selling ‘home services.’ … He wants to capture home improvement dollars wherever and however they are spent.”E.g.: “house calls” (At-Home Service: $10B by ’05?) … “pros shops” (Pro Set) … “home project management” (Project Management System … “a deeper selling relationship”).Source: USA Today/06.14.2002

32. “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)

33. And the Winners Are …Televisions –12%Cable TV service +5%Toys -10%Child care +5%Photo equipment -7%Photographer’s fees +3%Sports Equipment -2%Admission to sporting event +3%New car -2%Car repair +3%Dishes & flatware -1%Eating out +2%Gardening supplies -0.1%Gardening services +2%Source: WSJ/05.16.03

34. FEES! FEES!FEES!—Cover Story, BW/09.29.03

35. 6. A World of Scintillating “Experiences.”

36. “Experiencesare as distinct from services as services are from goods.”Joseph Pine & James Gilmore, The Experience Economy: Work Is Theatre & Every Business a Stage

37. “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

38. “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

39. 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

40. WHAT CAN BROWN DO FOR YOU?

41. The “Experience Ladder”Experiences ServicesGoods Raw Materials

42. 1940: Cake from flour, sugar (raw materials economy): $1.001955: Cake from Cake mix (goods economy): $2.001970: Bakery-made cake (service economy): $10.001990: Party @ Chuck E. Cheese (experience economy) $100.00

43. Message:“Experience” is the “Last 80%”P.S.: “Experience” applies to allwork!

44. 1940: Cake from flour, sugar (raw materials economy): $1.001955: Cake from Cake mix (goods economy): $2.001970: Bakery-made cake (service economy): $10.001990: Party @ Chuck E. Cheese (experienceeconomy) $100.00

45. 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

46. Duet … Whirlpool … “washing machine” to “fabric care system” … white goods: “a sea of undifferentiated boxes” … $400 to $1,300 … “the Ferrari of washing machines” … consumer: “They are our little mechanical buddies. They have personality. When they are running efficiently, our lives are running efficiently. They are part of my family.” … “machine as aesthetic showpiece” … “laundry room” to “family studio” / “designer laundry room” (complements Sub-Zero refrigerator and home-theater center)Source: New York Times Magazine/01.11.2004

47. 7. “It” all adds up to … THE BRAND.

48. “WHO ARE WE?”

49. “WHAT’S OUR STORY?”

50. “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