Tom Peters’ How New Business Works: Rules for Re-invention 01.07.2003

1. Tom Peters’ How New Business Works: Rules for Re-invention01.07.2003

2. “If you don’t like change, you’re going to like irrelevance even less.”—General Eric Shinseki, Chief of Staff, U. S. Army

3. Sequenom/David Ewing Duncan/Wired11.02“Sequenom has industrialized the SNP [single nucleotide polymorphisms] identification process.” “This, I’m told, is the first time a healthy human has ever been screened for the full gamut of genetic-disease markers.” “On the horizon: multi-disease gene kits, available at Wal*Mart, as easy to use as home-pregnancy tests.” “You can’t look at humanity separate from machines; we’re so intertwined we’re almost the same species, and the difference is getting smaller.”

4. “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

5. “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 11 a virtual state proved that modern societies are vulnerable as never before.”—Time/09.09.2002

6. “The deadliest strength of America’s new adversaries is their very fluidity, Defense Secretary Donald Rumsfeld believes. Terrorist networks, unburdened by fixed borders, headquarters or conventional forces, are free to study the way this nation responds to threats and adapt themselves to prepare for what Mr. Rumsfeld is certain will be another attack. …“ ‘Business as usual won’t do it,’ he said. His answer is to develop swifter, more lethal ways to fight. ‘Big institutions aren’t swift on their feet in adapting but rather ponderous and clumsy and slow.’ ”—The New York Times/09.04.2002

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

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

9. “The organizations we created have become tyrants. They have taken control, holding us fettered, creating barriers that hinder rather than help our businesses. The lines that we drew on our neat organizational diagrams have turned into walls that no one can scale or penetrate or even peer over.”—Frank Lekanne Deprez & René Tissen, Zero Space: Moving Beyond Organizational Limits.

10. “In an era when terrorists use satellite phones and encrypted email,US gatekeepers stand armed against them with pencils and paperwork, and archaic computer systems that don’t talk to each other.”Boston Globe (09.30.2001)

11. “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

12. “If early soldiers idealized Napoleon or Patton, network-centric warriors admire Wal*Mart,where point-of-sale-scanners share information on a near real-time basis with suppliers and also produce data that is mined to help leaders develop new strategic or tactical plans. Wal*Mart is an example of translating information into competitive advantage.”—Tom Stewart, Business 2.0

13. The New Infantry Battalion/New York Times/12.01.2002“Pentagon’s Urgent Search for Speed.” 270 soldiers (1/3rd normal complement); 140 robotic off-road armored trucks. “Every soldier is a sensor.” “Revolutionary capabilities.” Find-to-hit: 45 minutes to 15 minutes … in just one year.

14. Eric’s ArmyFlat.Fast.Agile.Adaptable.Light … But Lethal.Brand You/ Talent/ “I Am An ARMY Of One.”Info-intense.Network-centric.

15. The New Infantry Battalion/New York Times/12.01.2002“Pentagon’s Urgent Search for Speed.” 270 soldiers (1/3rd normal complement); 140 robotic off-road armored trucks. “Every soldier is a sensor.” “Revolutionary capabilities.” Find-to-hit: 45 minutes to 15 minutes … in just one year.

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

17. I Believe …1. Change will accelerate. DRAMATICALLY.2. We will RE-INVENT THE WORLD IN THE NEXT TWO GENERATIONS.(Business … Health Care … Politics … War … Education … Fundamentals of Human Interaction.)3. OPPORTUNITIES are matchless.4. You are either …ON THE BUS … or … OFF THE BUS.5. I WANT TO PLAY! ANDYOU?

18. I. NEW BUSINESS. NEW CONTEXT.

19. All Bets Are Off.

20. <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

21. Vernor Vinge/Mr. Singularity“The transition time from human history to post-human singularity time, Vinge thinks, will be astonishingly short—maybe one hundred hours from the first moment of computer self-awareness to computer world conquest.”—Esquire/12.2002

22. “We are at a pivotal point in history. … We are at one of a half dozen turning points that have fundamentally changed the way societies are organized for governance.”—Philip Bobbitt, The Shield of Achilles: War, Peace and the Course of History

23. “There’s going to be a fundamental change in the global economy unlike anything we have hadsince the cavemen began bartering.”Arnold Baker, Chief Economist, Sandia National Laboratories

24. NOW THAT’S B-I-G!“The period 2000-2002 will bring the single greatest change in worldwide economic and business conditions since we came down from the trees.”David Schneider & Grady Means, MetaCapitalism

25. “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]

26. “I genuinely believe we are living through the greatest intellectual moment in history.”Matt Ridley, Genome

27. “Doctors are faced with the very real threat of irrelevance in ten years. You’ll go to a lab, have a blood sample drawn, and a readout of your genetic deficiencies will be produced—along with ‘Doctor’s Orders’ for appropriate treatment; only there won’t be any doctor.”—Leading Pediatric Cardiologist (11.2002)

28. Yo, Bioinformatics!“Researchers say they have found a way to mate human cells with circuitry in a ‘bionic chip’ … The tiny device – smaller and thinner than a strand of hair – combines a healthy human cell with an electronic circuitry chip.”AP/AOL/02-00

29. “Help! There’s nobody in the cockpit. In the future, will the airlines no longer need pilots?”Grumman Global Hawk/ 24 hours/ Edwards to South AustraliaSource: The Economist/12.21.2002

30. “We are in abrawl with no rules.”Paul Allaire

31. “Strategy meetings held once or twice a year” to “Strategy meetings needed several times a week” Source: New York Times on Meg Whitman/eBay

32. 2. The Destruction Imperative.

33. “It is generally much easier to kill an organization than change it substantially.” Kevin Kelly, Out of Control

34. C.E.O.to C.D.O.

35. 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

36. “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/11.28.2002

37. “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

38. 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

39. “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

40. “Conglomerates don’t work”—James Surowiecki, The New Yorker (07.01,2002)

41. “I believe large research organizations are less transparent, with less communication and more bureaucracy and it is more difficult and problematic to produce innovations in large institutions.”—Franz Humer, CEO, Roche

42. Way to Go, Guys …2002 write downs from recent acquisitions …

43. $1,000,000,000,000**$1 trillion (Source: Harper’s Index 04.2002)

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

45. “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

46. 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]

47. TP on Acquisitions1. Big + Big = Disaster. (Statistically.) (There are exceptions; e.g., Citigroup.)2. Big (GE, Cisco, Omnicon) acquires small/specialist = Good … if you can retain Top Talent.3. Odds on achieving “projected synergies” among Mixed Big “cultures”: 10%.4. Max Scale Advantages are achieved at a smaller size than imagined.5. Attacked by Big, Mediocre Medium marries Mediocre Medium to “bulk up.” Result: Big Mediocrity … or worse.6. Any size—if Great & Focused—can win, locally or globally.7. Increasingly, Alliances deliver more value than mergers —and clearly abet flexibility.

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

49. The [New] Ge WayDYB.com

50. “Change the rules before somebody else does.”—Ralph Seferian, VP, Oracle