Tom Peters’ EXCELLENCE. ALWAYS. Global Leaders/Singapore/04August2006

1. Tom Peters’EXCELLENCE. ALWAYS.Global Leaders/Singapore/04August2006

2. Slides* at …tompeters.com*also “long”

3. “ORGANIZATION” = STRATEGY: THE GUERRILLA ADVANTAGE Tom Peters/04August2006

4. “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

5. “New Era of War, and U.S. Isn’t Ready Conflicts of Future: Nations vs. Networks”—Headline/p1/ International Herald Tribune /31.07.2006Opening:“Pound for pound and pounding, the Israeli military is one of the world’s finest. But Hezbollah, with the discipline and ferocity of its fighters and its ability to field advanced weaponry, has taken Israel by surprise. Now that surprise has rocketed back to Washington and across the U.S. military.”“We are into the first great war between nations and networks. This proves the growing strength of networks as a threat to American national security.” —John Arguilla, USNPGS, from “Net Warfare 101”

6. Small units … agile … lethal … invisible … guerrilla … network warfare … distributed … dispersed … mobile .. Flat [hierarchy] … improvisational … etc.

7. “ORGANIZATION” = STRATEGY: THE GUERILLA ADVANTAGE:Agile. (Sluggish.) Wily. (Big footprint.) Always moving. (Seldom moving.) Brownian motion per se bewilders the enemy. (Blind despite NewTech.) Momentum comes from small wins. (Small wins invisible, too small scale to execute.) Goal is converts, not territory. (Protect territory.) Offense. (Defense.) Travel light; very high “tooth to tail” ratio. (Travel heavy, low “tooth to tail.) Live off the land. (Tortuous supply chain.) UNPREDICTABLE; BEHAVIOR NEARLY RANDOM. (VERY PREDICTABLE; LONG PLANNING CYCLE; OBSERVABLE FOOTPRINT.)Dug in but not dug in. (Dug in but vulnerable.) No HQ; floating HQ. (Big HQ at home and away.) Few fixed assets. (Mostly fixed assets.) Scroungers mentality. (Methodical & complex.) Mobile communications. (Fixed communications.) Everything, including people, disposable. (Tight “asset management,” materials & humans.) No fortress to guard. (Big fortresses which must be guarded.) Replaceable leaders. (Formal, rule-based hierarchy.) Self-healing network, like Internet. (Network far more fixed.) Hackers mentality. (Planner’s mentality.) DECENTRALIZED. (CENTRALIZED.)KIAs are celebrated. (KIAs are the ultimate loss.) Natural reorganizations following cell division model. (Methodical, high-friction change.) Few formal layers. (Lotsa formal layers.) Few rules. (Lotsa rules.)

8. “ORGANIZATION” = STRATEGY: THE GUERILLA ADVANTAGE:Management By Vision. (Management by law-rule books.) Miniaturized but deadly weapons. (Fixed weapons.) Invent your own arsenal. (Gazillion-year weapons acquisition cycle.) Multiplier impact by spreading confusion. (Need set-piece victories to satisfy constituents.) Passion. (Supportive at the level of car decals.) Little value on current rules. (Value of life paramount.) Ad hoc; RFA or FFF. (R.A.F. / Ready. Aim. Aim. Aim. Fire.) SIMPLE PHILOSOPHY THAT BINDS, FLEXIBLE ORG, FLEXIBLE OPS. (COMPLEX PHILOSOPHY, INFLEXIBLE ORG, INFLEXIBLE OPS.)Different time frame; a 1,000 year conflict. (Need to show progress daily.) Attract youth with more energy and zeal than good sense. (Mature and inflexible and cautious and methodical.) Minimum need to spin; as easy to spin a loss as a win. (Battle plans designed & distorted & diluted to produce spin per se.) Ad hoc. (Due process.) “Media” looks for wins; media values small wins. (Media fixated by SNAFUs; small wins beneath the radar.) Win when enemy over-reacts. (Lose if over-react.) Ubiquitous webs. (Ubiquitous bureaucracy.) Recruit, support, impact follows Virus Model; recruit via Buzz. (All is formal.) Value of conventional scale declining exponentially. (Still citizens of a “big is beautiful” age.) Virtually no way to lose; a loss is a win as much or more than a win is a win. (Virtually no way to win; a win is often a loss as much as a loss is a loss.)

9. “It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.”—Charles Darwin

10. “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

11. “The most successful people are those who are good at plan B.”—James Yorke, mathematician, on chaos theory in The New Scientist

12. “If things seem under control, you’re just not going fast enough.”—Mario Andretti

13. Ready.Fire.Aim.Ross Perot

14. “Crazy Times Call for Crazy Organizations”—Subtitle, The Tom Peters Seminar (1993)

15. Inflexibility and mass are favored in static times. Flexible and ephemeral are favored in chaotic times.

16. Stephen Jay Gould:Bacteria rule! Sizeable cases [e.g. humans] are virtually irrelevant anomalies.

17. False AttributionsGerman citizenry low morale, no appetite for war3rd Republic government rather well regardedFrench Army in good shape, surprisingly well armed, decent strategy (in dozens of simulations, French usually win)Blitzkrieg not usedGermans very vulnerableLousy French intelligence* and luck perhaps determinant (*“intelligence information tends to be sifted to reinforce received ideas rather than to overturn them”)Many plausible competing hypothesesSource: Julian Jackson, The Fall of France (cf Nassim Nicholas Taleb, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets.)

18. “Operations is policy.”—Fred Malek**Andy Pearson. Al McDonald. Jack Welch(?). U.S. Grant. Horatio Nelson.

19. “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 between 1917 and 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

20. Sluggish + Obese + Unimaginative + More Sluggish + More Obese + More Unimaginative + Even More Sluggish + Even More Obese + Even More Unimaginative = Nissan + Renault + GM = Innovative Challenger for Toyota????

21. ??????????????Crappy Management (GM) + Arrogant-Overstretched Management (Carlos G) = Great Management

22. “How we feel about the evolving future tells us who we are as individuals and as a civilization: Do we search for stasis—a regulated, engineered world? Or do we embrace dynamism—a world of constant creation, discovery and competition? Do we value stability and control or evolution and learning? Do we think that progress requires a central blueprint, or do we see it as a decentralized, evolutionary process?? Do we see mistakes as permanent disasters, or the correctable byproducts of experimentation? Do we crave predictability or relish surprise? These two poles, stasis and dynamism, increasingly define our political, intellectual and cultural landscape.”—Virginia Postrel, The Future and Its Enemies

23. “While many people big oil finds with big companies, over the years about 80 percent of the oil found in the United States has been brought in by wildcatters such as Mr Findley, says Larry Nation, spokesman for the American Association of Petroleum Geologists.”—WSJ, “Wildcat Producer Sparks Oil Boom in Montana,” 0405.2006

24. Blitzkrieg?

25. Case: PerceivedRommel invents Blitzkrieg.Krauts kick the crap out of the Frogs in two weeks.Q.E.D.

26. Case: Lesson LearnedPlanned innovation (P.I., not C.I.) is possible, is cool, is effective. (Write it up. Publish.)

27. Case: RealityGermans cross Meuse into France. Whoops: French intelligence completely drops the ball. (Loses track of the Germans—no kidding.)Germans keep advancing; outrun supply lines; no land-air co-ordination. Hitler orders advance stopped.General never gets the word. General marches to Paris, virtually unopposed.Germans shocked.After the fact, Germans label it “Blitzkrieg.”

28. Case: Lesson LearnedDo something.Get lucky. Attribute luck to superior planning.Get medals.

29. Smashing Conventional Wisdom “Blitzkrieg in fact emerged in a rather haphazard way from the experience of the French campaign, whose success surprised the Germans as much as the French. Why otherwise did the High Command try on various occasions, with Hitler’s backing, to slow the panzers down? The victory in France* came about partly because the German High Command temporarily lost control of the battle. The decisive moment in this process was Guderian’s decision to move immediately westward on 14 May, the day after the Meuse crossing, wrenching the whole of the rest of the army along behind him.” *messed up traffic, little close air support, random heroics by some small bits of Guderian’s forces, Guderian not a disciple of the WWI-derived “strategy of indirect approach” Source: Julian Jackson, The Fall of France

30. What “We” Know “For Sure” About InnovationBig mergers [by & large] don’t workScale is over-ratedStrategic planning is the last refuge of scoundrelsFocus groups are counter-productive“Built to last” is a chimera (stupid)Success kills“Forgetting” is impossibleRe-imagine is a charming idea“Orderly innovation process” is an oxymoronic phrase (= Believed only by morons with ox-like brains)“Tipping points” are easy to identify … long after they will do you any good“Facts” aren’tAll information making it to the top is filtered to the point of danger and hilarity“Success stories” are the illusions of egomaniacs (and “gurus”)If you believe the memoirs of CEOs you should be institutionalized“Herd behavior” (XYZ is “hot”) is ubiquitous … and amusing“Top teams” are “Dittoheads”CEOs have little effect on performance“Expert” prediction is rarely better than rolling the dice

31. Tom Peters’ “XAlways”:EXCELLENCE. ALWAYS.Global Leaders/Singapore/04August2006

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34. TheIrreducible209+

35. That’s a Big Number ….

36. THREE BILLION NEW CAPITALISTS—Clyde Prestowitz

37. “There is no job that is America’s God-given right anymore.”—Carly Fiorina/HP/January2004

38. “Deutsche Bank Moves Half of Its Back-office Jobs to India”/ headline/FT/0327 (500 of 900 Research)

39. “There is no job that is America’s God-given right anymore.”—Carly Fiorina/HP/January2004

40. New Economy?!Genentech09, Amgen09 > Merck09 (70K-3/394B-5)

41. New Economy?!Sergey + Larry > Harvard/370

42. EXCELLENCE. STARTERS.

43. Franchise Lost!TP:“How many of you[600]reallycravea new Chevy?”NYC/IIR/061205

44. 2P.3E.

45. People.Product.Execution.Enthusiasm.Excellence.

46. EXCELLENCE. THE WORD.

47. SynonymsPurityTranscendenceVirtueEleganceMajestyAntonymsMediocritySynonymsPurityTranscendenceVirtueEleganceMajestyAntonymsMediocrity

48. EXCELLENCE. GAMECHANGER.

49. Excellence1982: The Bedrock “Eight Basics” 1. A Bias for Action 2. Close to the Customer 3. Autonomy and Entrepreneurship 4. Productivity Through People 5. Hands On, Value-Driven 6. Stick to the Knitting 7. Simple Form, Lean Staff 8. Simultaneous Loose-Tight Properties”

50. ExIn*: 1982-2002/Forbes.comDJIA: $10,000 yields $85,000EI: $10,000 yields $140,050*Forbes/Excellence Index/Basket of 32 publicly traded stocks