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NOTE : To appreciate this presentation [and ensure that it is not a mess ], you need Microsoft fonts: “Showcard Gothic,” “Ravie,” “Chiller” and “Verdana”. Tom Peters’ X25* EXCELLENCE. ALWAYS. Thirteen Guru Gaffes 28 February 2008 * In Search of Excellence 1982-2007. Title.
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NOTE:To appreciate this presentation [and ensure that it is not a mess], you need Microsoft fonts:“Showcard Gothic,”“Ravie,”“Chiller”and“Verdana”
Tom Peters’ X25*EXCELLENCE. ALWAYS.Thirteen Guru Gaffes28 February 2008*In Search of Excellence 1982-2007
Tom Peters’ X25*EXCELLENCE. ALWAYS.Maybe.ALTERNATE Master/Gaffes12 November 2007*In Search of Excellence 1982-2007
Better title? The “excellence” bit and the “always” bit are fine; it’s the analysis thereof I wish to call into question here..
The “Over-rated Eight”:Big companies!Public companies!“Cool” industries!Stability!Famous CEOs!“Hard” stuff!“Success”!Plans!
These are a few of the implicit or explicit things that most all “gurus” [incl. yrs. truly much of the time] focus on. That are mostly or wholly wrong.
Over-rated:Big companies!Public companies!“Cool” industries!Stability!Famous CEOs!“Hard” stuff!“Success”!Plans!
That’s the emergent conclusion from Citi’s woes. (Yikes: Some are muttering the same thing about … GE.)
Dick Kovacevich:You don’t get better by being bigger. You get worse.”
“The Bigger They Are: Toyota Takes a Tumble on Quality”—headline, International Herald, 1103-4.07
Scale?“Microsoft’s Struggle With Scale”—Headline, FT, 09.2005“TroublingExits at Microsoft” —Cover Story, BW, 09.2005“Too Big to Move Fast?”—Headline, BW, 09.2005
“Biters Bit: How Web Giants Are Losing Business as Startups Scurry In.”—FT, 0725.07 (“The disruptive innovators of the first Silicon Valley boom may be failing to keep up with a new wave of arrivals.”)
Kovacevich ran Wells Fargo brilliantly—his other passion was a focus on revenue growth rather than a diet of cutting, cutting, cutting. (Reminds me of the subtitle to my 1997 book, Circle of Innovation: “You can’t shrink your way to greatness.)
“Despite a decade of banking mergers, there is no evidence that big banks are any more efficient or profitable than their smaller rivals.”—Financial Times, 0329.07, on possible Barclays-ABN Amro merger (“When it comes to asking the stock market whether bigger banks are better, the current answer is a resounding ‘no.” —Citigroup analysis, 2006)
“When asked to name just one big merger that had lived up to expectations, Leon Cooperman, former cochairman of Goldman Sachs’ Investment Policy Committee, answered:I’m sure there are success stories out there, but at this moment I draw a blank.”—Mark Sirower, The Synergy Trap
“Almost every personal friend I have in the world works on Wall Street. You can buy and sell the same company six times and everybody makes money,but I’m not sure we’re actually innovating. … Our challenge is to take nanotechnology into the future, to do personalized medicine …”—Jeff Immelt/2005
Winning the Merger Game Is Possible--Lots of deals--Little deals--Friendly deals--Stay close to core competence--Strategy is easy to understandSource: “The Mega-merger Mouse Trap”/Wall Street Journal/02.17.2004 / David Harding & Sam Rovit, Bain & Co./re Comcast-Disney
“Acquisitions are about buying market share. Our challenge is to create markets. There is a big difference.”—Peter Job, former CEO, Reuters
“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
“Forbes100” from 1917 to 1987:39members of the Class of ’17 were alive in ’87; 18 in ’87 F100; 18 F100 “survivors” significantly underperformed the market; just 2 (2%), GE & Kodak, outperformed the market from 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
“Mr. Foster and his McKinsey colleagues collected detailed performance data stretching back 40 years for 1,000 U.S. companies. They found that none of the long-term survivors managed to outperform the market. Worse, the longer companies had been in the database, the worse they did.” —Financial Times
“Hope For Breakup Advocates”—headline, FT, 1105.07, re Citigroup
“Jeff Bewkes, the Next Boss of Time-Warner, Is Likely to Break Up the Company”—headline, Economist, 1110.07
Private Equity-financed Firm, Best *Case*Focus! Focus! Focus!*In a [Big] hurry*CEO/Top team, “skin in the game”*CEO, 100% of time on the biz*Merit! Merit!*Motivated oversight*Worst case: Rape & Pillage
“Data drawn from the real world attest to a fact that is beyond our control:Everything in existence tends to deteriorate.”—Norberto Odebrecht, Education Through Work
Odebrecht is a big (heavy industry) Brazilian engineering company.
Welcome to the “Club of Shattered Dreams”: Of Korea’s Top 100 companies in 1955, only 7 were still on the list in 2004. The 1997 crisis “destroyed halfof Korea’s 30 largest conglomerates.”Source: “KET Issue Report,” Kim Jong Nyun (14.05.2005)
“Everything in existence tends to deteriorate”/ “Buy a very large one and just wait”= License (Mandate!) for Radical Action
The Big Co situation is nigh on hopeless—so you might as well “go for it.” You’ve nothing to lose.
Middle-sized stars. (Of long standing.*) Global masters. High-value niches.*The “German secret”
Or … Goldmann Produktions(11/50%/$5M/“dip and coat,” expensive pigments vs “through coloring,” fades Bekro Chemie)
When I studied them, Goldmann had but 11 people, most PhDs, and a 50% world market share!
