Tom Peters Seminar2001 We Are in a Brawl with No Rules! MASTER / 11.30.2001

1. Tom Peters Seminar2001We Are in a Brawl with No Rules!MASTER/11.30.2001

2. “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

3. Uncertainty: We don’t know when things will get back to normal.Ambiguity: We no longer know what “normal” means.

4. BMcC: (1) Hierarchy vs. “Network organization.” (2) NWO = “Doctrine as center of gravity”/source of motivation; distributed support & decision-making;largely self-organizing; “outside the military sphere.”

5. From: Weapon v. WeaponTo:Org structure v. Org structure

6. “Our military structure today is essentially one developed and designed by Napoleon.”Admiral Bill Owens, former Vice Chairman, Joint Chiefs of Staff

7. <1000A.D.: paradigm shift: 1000s of years1000: 100 years for paradigm shift1800s: > prior 900 years1900s: 1st 20 years > 1800s2000: 10 years for paradigm shift21st century: 1000Xtech 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

8. 1 day 2001 = Year’s trade in 1949, year’s FEX in 1979, year’s global calls in 1984. 1 day London FEX in 2001 = 30X year’s output in UK goods & services.Source: Charles Handy, The Elephant and the Flea

9. StructurePart I: Brand InsidePart II: Brand OutsidePart III: Brand Leadership

10. 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.

11. Part I: Brand InsidePart II: Brand OutsidePart III: Brand Leadership

12. Forces @ Work IThe Destruction Imperative!

13. Forbes100 from 1917 to 1987: 39 members of the Class of ’17 were alive in ’87; 18 are in ’87 F100; the 18 F100 “survivors” underperformed the market by 20%; 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

14. Message*: Are all CEOs bozos? Was Darwin a genius, or what? So,Boss, whaddaya say about “risk taking” now?*And “all that” (2 of 100; 12 of 500) was in relatively placid times.

15. CEOs appointed after 1985 are 3X more likely to be fired than CEOs appointed before 1985Warren Bennis, MIT Sloan Management Review

16. “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

17. “A pattern emphasized in the case studies in this book is the degree to which powerful competitors not only resist innovative threats, but actually resist all efforts to understand them, preferring to further their positions in older products. This results in a surge of productivity and performance that may take the old technology to unheard of heights. But in most cases this is a sign of impending death.”Jim Utterback, Mastering the Dynamics of Innovation

18. 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

19. “The 1990s was a decade of multiple revolutions—political, economic, technological—that changed so thoroughly the way we live that the past no longer seems a good guide to the future (in fact the past seems precisely the wrong guide). So it is in the world of military affairs. The RMA is our opportunity to use the new information technology to change the very nature of the military—in a way that could reinvigorate American political, diplomatic and economic leadership in the world for decades to come.” –Bill Owens, Lifting the Fog of War

20. Japan’s Science Gap *Rice farming culture: Uniqueness suppressed. Gov’t control of R & D. Promotion based on seniority. Consensus vs. debate.(U.S.: friends can be mortal enemies.)Bias for C.I. vs. “bold leaps.” Lack of competition and critical evaluation (peer review). Syukuro Manabe: “What we need to create is job insecurity rather than security to make people compete more.”*Hideki Shirakawa, Nobel laureate, chemistry

21. The [New] Ge WayDYB.com

22. The Gales of Creative Destruction+29M = -44M + 73M+4M = +4M - 0M

23. “The secret of fast progress is inefficiency, fast and furious and numerous failures.”Kevin Kelly

24. “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

25. “Chivalry is dead. The new code of conduct is an active strategy of disrupting the status quo to create an unsustainable series of competitive advantages. This is not an age of defensive castles, moats and armor. It is rather an age of cunning, speed and surprise. It may be hard for some to hang up the chain mail of ‘sustainable advantage’ after so many battles. But hypercompetition, a state in which sustainable advantages are no longer possible, is now the only level of competition.”Rich D’Aveni, Hypercompetition: Managing the Dynamics of Strategic Maneuvering

26. Jane Jacobs:Exuberant Varietyvs. the Great Blight of Dullness. F.A. Hayek:Spontaneous Discovery Process.Joseph Schumpeter: theGales of Creative Destruction.

27. “Acquisitions are about buying market share. Our challenge is to create markets. There is a big difference.” Peter Job, CEO, Reuters

28. “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

29. Lessons from the Bees!“Since merger mania is now the rage, what lessons can the bees teach us? A simple one: Merging is not in nature. [Nature’s] process is the exact opposite: one of growth, fragmentation and dispersal. There is no megalomania, no merging for merging’s sake. The point is that unlike corporations, which just get bigger, bee colonies know when the time has come to split up into smaller colonies which can grow value faster. What the bees are telling us is that the corporate world has got it all wrong.”David Lascelles, Co-director of The Centre for the Study of Financial Innovation [UK]

30. “Terror cells are superb, malevolent examples of what Information Age organizations can be. So how do you kill them? … Soldiers used to idolize Napoleon or Patton. Network-centric warriors admire Wal*Mart for using ‘information superiority’ to crush rivals.… [The Navy’s John] Arquilla calls for small, fast, information-enabled units.”–America’s Secret Weapon, Business 2.0 (DEC2001)

31. Brand InsideBrand Org:Lean, Linked, Internet-driven, Virtual

32. White Collar Revolution!

33. 108 X 5vs. 8 X 1= 540 vs. 8(-98.5%)

34. The Pincer 51. “Destructive” entrepreneurs/ Global Competition2. “White Collar Robots”3. THE INTERNET![E.g.: GM + Ford + DaimlerChrysler]4. Global Outsourcing[E.g.: India, Mexico]5.Speed!!

35. Automation+75% of what we do: 40 “expert” decision rules!

36. IBM’s Project eLiza!

37. “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

38. The Pincer 51. “Destructive” entrepreneurs/ Global Competition2. “White Collar Robots”3. THE INTERNET![E.g.: GM + Ford + DaimlerChrysler]4. Global Outsourcing[E.g.: India, Mexico]5.Speed!!

39. Brand InsideBrand Work: The Professional Service Firm Model

40. So what will be the Basic Building Block of theNew Org?

41. Every job done in W.C.W. is also done “outside” …for profit!

42. Answer: PSF![Professional Service Firm]Department Headto …Managing Partner, HR [IS, etc.] Inc.

43. TP to NAPM:Youare the …Rock Stars of the B2B Age!

44. “P.S.F.”: SummaryH.V.A. Projects (100%)Pioneer ClientsWOW Work (see below)Hot “Talent” (see below)“Adventurous” “culture”Proprietary Point of View (Methodology)W.W.P.F. (100%)/Outside Clients (25%++)

45. BMW’s Designworks/USA: >50% from outside work

46. eHR*/PCC***All HR on the Web**Productivity Consulting CenterSource: E-HR: A Walk through a 21st Century HR Department, John Sullivan, IHRIM

47. (1) Translate ALL departmental activities into discrete W.W.P.F. “Products.”(2) 100% go on the Web.(3)Non-awesome are outsourced (75%??).(4)Remaining “Centers of Excellence” are retained & leveraged to the hilt!

48. Brand InsideThe Heart of the Value Creation Revolution: PSF Unbound!

49. 09.11.2000: HP bids $18,000,000,000for PricewaterhouseCoopersconsulting business!

50. “These days, building the best server isn’t enough. That’s the price of entry.”Ann Livermore, Hewlett-Packard