The Case for Internal Focus: “Brand inside” Rules! Tom Peters/16 September 2007

1. The Case for Internal Focus: “Brand inside” Rules!Tom Peters/16 September 2007

2. NOTE:To appreciate this presentation [and ensure that it is not a mess], you need Microsoft fonts:“Showcard Gothic,”“Ravie,”“Chiller”and“Verdana”

3. I have been among those leading the charge, for over a quarter century, to reduce corporate myopia by emphasizing external focus—e.g., on the customer and the market. I wouldn’t revise a word. Still, an ancient incident sticks in my mind. I did a video of case studies in Excellence in the mid-1980s. A couple of pieces focused on customer service, and a couple emphasized superb “people programs.” The distributor, out to make a buck (not all bad), would customize the film, editing out a case or two, upon request. There were, no surprise, few such requests. But one does stick in my mind, and since I heard about it second hand I will not confirm the corporation by name. I will report that it was a major, at the time, airline. The company ordered a ton of our films—bravo! But … they kept all the “customer service stuff,” and insisted that we excise all the “people stuff.”* (*The airline is now defunct—not by takeover but by bankruptcy and disappearance.)All of which is to say the obvious: There is no great “external focus” unless the bedrock great “internal focus” is in place. This “obvious” issue reared its head recently …

4. Isn’t:A (externally focused) “War for Talent “competing” “against” others for the same peopleIs:A competition “against” myself to create the most amazing workplace imaginable (see IBP) and define “different” kinds of people we’d love to have aboard (e.g., Anita R, Planetree)

5. Fact is, and I’m not happy about this, I got into a bit of a verbal tussle with my client over some “word issues.” It was a meeting of HR execs, and the topic was the, yes, the “war for talent.” Now I’ve used the term—and God only knows I believe that in this age of “intellectual capital” top talent is arguably more important than ever. (Whoops, I actually think that’s 86% bullshit; top talent has always been the difference—e.g., the quality of the sea captains in the Royal (British) Navy, circa 18th and 19th century, comes quickly to mind.) But I digress. The point is that the discussion at the meeting in question was warfare-ish to a significant degree—how to quickly nab the best people, etc. I doubtless exaggerate, but to stick with the ancient Navy theme, it was like building tools to create the best Press Gangs for “recruiting” sailors from the pubs of Liverpool in 1790. Well, I think that’s all (98%) wrong. As I write in the slide, I contend that the bedrock of finding and keeping and co-creating with great folks is not about clever tools to induce prospective “thems” to “shop [live] with us,” but a 99% internal effort to create such an exciting, spirited, entrepreneurial, diverse, humane “professional home” that people will be lining up by the gazillions (physically or electronically) to try and get a chance to come and live in our house and become what they’d never imagined they could become!I.e., it’s not an externally directed “war to snatch talent from the other guy” by being more aggressive than the competition—but an internally directed competition against ourselves (and our outrageously strong beliefs about people) in which we aim to create an unimaginably attractive workplace. Think Apple, BMW, Cirque du Soleil, Wegmans. And back to the Royal Navy, the Brits built a model of Excellence that had no parallels in its sphere in human history—it was a model about what could be that had never been before, and it was “the other guys” who were forced into the externally aimed “competitive,” inferior, reactive, copyist mode.

6. What’s your company’s …EVP/IBP?**Employee Value Proposition(Ed Michaels et al., McKinsey);IBP/Internal Brand Promise (TP)

7. EVP/IBP = Remarkable challenge, rapid professional growth, respect, satisfaction, fun, stunning opportunity, exceptional reward, amazing peer group, full membership in Club Adventure, maximized future employabilitySource: Ed Michaels,TP

8. To translate this point into practice, for better or for worse, a few years ago I started talking about what I called “BRAND INSIDE.” The idea is simple (to articulate): To make money (or serve any constituency) one needs an external “brand perception” (we overuse the word today—but the idea is unassailable and it is based as much on “perception” as on “substance”); to create and maintain said external excellence (Brand Outside) one needs, and needs before the fact, excellent & distinct innards—enter “the way we do things around here” (circa 1970), “corporate culture” (circa 1980) and, I now propose, “Brand Inside” (circa 2000). My old McKinsey pal, Ed Michaels, spent five years on the topic of attracting the best Talent and part of it was what he called the EVP/Employee Value Proposition. I am 100% happy with that idea, but chose to add a carbon copy alternative that picked up on my Brand Inside idea—I called Ed’s thing IBP/Internal Brand Promise. Between the two of us, you’ll see a list of the sorts of elements that might constitute a robust EVP-IBP.

9. “If I could have chosen not to tackle the IBM culture head-on, I probably wouldn’t have. My bias coming in was toward strategy, analysis and measurement. In comparison, changing the attitude and behaviors of hundreds of thousands of people is very, very hard.[Yet] I came to see in my time at IBM that culture isn’t just one aspect of the game—it is the game.”—Lou Gerstner, Who Says Elephants Can’t Dance

10. Lou Gerstner and I overlapped a bit at McKinsey. (He was very senior, about to leave to run most of American Express; I was junior, working on the amorphous thing that became In Search of Excellence). He was not my friend! He was the Prime Mover of the “strategy-is-everything” crowd—and I was the kid who didn’t buy the act. And he, vociferously, didn’t buy my act.Lou went on to transform IBM, the most extraordinary BigCo transformation I’ve witnessed—much more profound than Jack Welch’s parallel act at GE. As the prior slide suggests, in his autobiography no less, he apparently came to see the importance of “the Brand Inside stuff.” I’m not boasting, though I am chortling. Hey, he’s the guy with the billion$$$ bank account and I’m not—though I do handily out-Google him, which along with $5 will get you a “venti” ice coffee at S’bucks.Brand Inside rules!

11. Brand Inside: Core Mechanism:PSF(Professional Service Firm “model”/The Organizing Principle)+Brand You(“Distinct” or “Extinct”/The Talent) +Wow! Projects (“Different” vs “Better”/TheWork)

12. Big Idea/“Meta”-Idea/Premier “Engine of Century21 Value Added”(1) The Talent: “Best Roster” of Entrepreneurial-minded Brand Yous.(2) The (Virtual) Organization: Internal or External “PSF”/Professional Service Firmworking with “Best Anywhere” = Engine of Value Added through the Application of Creative “Intellectual Capital”(3) The Work Product: “Game Changer”/ “Gaspworthy” WOW Projects

13. PSF (Professional Service Firm) + BY(Brand You) + WP (WOW Projects) + DD (Dramatic Difference) + E (Excellence) = UVA (Unassailable Value-Added)

14. I’ve in fact written tens of thousands of words on the Brand Inside topic (including a 3-book set in 1999), but the nub of it is the structural idea that the innards of the Firm that exploits intellectual capital is independent-minded people (Brand You/s), extraordinary work product (Wow Projects) and a “professional” structure which harnesses said intellectual capital (the “PSF”/Professional Service Firm). The prior few slides are the barest of a bare-bones summary.

15. The Customer Comes Second: Put Your People First and Watch ’em Kick Butt—Hal Rosenbluth and Diane McFerrin Peters* (*no relation)

16. “We are a ‘Life Success’ Company.”Dave Liniger, founder, RE/MAX

17. The Dream Manager—Matthew KellyE.g.: “An organization can only become the-best-version-of-itself to the extent that the people who drive that organization are striving to become better-versions-of-themselves.” “A company’s purpose is to become the-best-version-of-itself. The question is: What is an employee’s purpose? Most would say, ‘to help the company achieve its purpose’—but they would be wrong. That is certainly part of the employee’s role, but an employee’s primary purpose is to become the-best-version-of-himself or –herself. … When a company forgets that it exists to serve customers, it quickly goes out of business. Our employees are our first customers, and our most important customers.”

18. Organizing Genius / Warren Bennis and Patricia Ward Biederman“Groups become great only when everyone in them, leaders and members alike, is free to do his or her absolute best.”“The best thing a leader can do for a Great Group is to allow its members to discover their greatness.”

19. Leaders’ “Mt Everest Test”“free to do his or her absolute best” … “allow its members to discover their greatness.”

20. Leaders-Teachers Do Not “Transform People”!Instead leaders-mentors-teachers (1) provide a contextwhich is marked by (2)access to a luxuriant portfolio of meaningful opportunities(projects) which (3) allow people to fully(and safely, mostly—caveat: “they” don’t engage unless they’re “mad about something”)express their innate curiosity and (4) engage in a vigorous discovery voyage(alone and in small teams, assisted by an extensive self-constructed network) by which those people (5) go to-create places they(and their mentors-teachers-leaders)had never dreamed existed—and then the leaders-mentors-teachers (6)applaud like hell, stage “photo-ops,” and ring the church bells 100 times to commemorate the bravery of their “followers’ ” explorations!

21. Hal Rosenbluth took a small family-run travel agency and turned it into a progressive, multi-billion giant, which he recently sold to American Express. The title of his book about Rosenbluth International, The Customer Comes Second, reveals a/the key to his extraordinary success. Likewise Dave Linegar successfully (!!!) re-invented real estate practice with RE/MAX. The (novel) idea was to free the individual agent’s entrepreneurial spirit—to turn her or him into a “life success.” Linegar was clear, like Hal, that the home buyer came second—and would only truly come first if the agent was “more first” (my ugly term, not Dave’s). Matthew Kelly’s wonderful Dream Manager “simply” argues that we all have dreams; and that the role of the company’s leadership is to help people to achieve those dreams—whether they are company related dreams or not, people chasing dreams will be more engaged and self-motivated on the from the janitorial staff to the lab bench. Warren Bennis and Patricia ward Biederman, with “free to do his or her absolute best,” capture the same (BIG) idea in their book about what they call Great Groups —groups that have literally changed the world. And my halting effort on the slide immediately preceding this one is extracted from my “Leadership 50” list—it is in fact principal #1, Leaders “engage in a mutual discovery process.” (The title of the slide, not so incidentally, asserts that leaders do not “transform” people—I’m wild eyed on this, as I suspect Matthew Kelly would be; to the extent that they do, people transform themselves—the leader is importantly but merely a spur. All of theses case are clearcut examples of “Brand Inside first”!

22. Little shop in LAX:They felt they knew her personally

23. The Manager’s Book of Decencies: How Small gestures Build Great Companies.—Steve Harrison, Adecco Servant Leadership —Robert Greenleaf One: The Art and Practice of Conscious Leadership—Lance Secretan, founder of Manpower, Inc. (“What would happen if we looked at a customer and saw the face of God in them?”)

24. “What would happen if we looked at a customer and saw the face of God in them? To most people it sounds like a lofty idea. But if you see the face of God in a flower, why wouldn’t you see it in the face of a customer? If we treated customers and honored the God within them—if we loved them—we would not need a ‘quality program’.”—Lance Secretan, founder of Manpower, Inc. and most recently author of One: The Art and Practice of Conscious Leadership

25. Shortly after Anita Roddick’s (Body Shop) tragic death at age 64, I was in a Body Shop at LAX. Anita had visited briefly some few years before. When I expressed my sorrow to the employee, I half expected the young-ish woman to ask, “Who’s Anita Roddick?” I should have known better. Though her personal contact with AR had lasted but seconds or, at most, a couple of minutes, she responded as if Anita were an intimate best pal. Anita was exactly that human—she had that effect on me. (I’m not boasting—it’s just that I miss my friend, who passed away less than a week before I wrote this.) That, I contend is another classic “Brand Inside first” story! As to the three books listed on the next slide—Wow! Each is a classic, classic in the making, about workplaces that honor what is deeply human in our “workers.” “Decencies” and “servant” (leader) are powerful, nay, transforming, concepts. (As for “face of God” in the customer, well that may be a little too much for some of us—e.g., me, I think—but if you treat each human you encounter with the incredible respect they are due, that’s pretty much the same thing, I’d judge. It reminds me in a way, of this challenging statement: “Be kind, for everyone you meet is fighting a great battle.”—Philo of Alexandria)

26. An “organization” is, in fact, a/the “house” in which most of us “live” most of the time.

27. I believe this.

28. 10%: Recruiting skills90%: attractive (literally) “culture”

29. No: “Outwit” your competitorsYes: a “Culture”- Infrastructure that is unique (JG)

30. “You do not merely want to be the best of the best.You want to be considered the only ones who do what you do.” —Jerry Garcia

31. It’s not about clever recruiting devices (though I’m in favor of them as “aids.”). And business in general is not about “outwitting” the competitor—that is a temporary state at best. Success with Market #1 (our people) and Market #2 (customers) is a function of our culture-aspirations of Excellence.

32. TP: I “benchmark” against myself!**I don’t compete with GEN Powell, I compete with me!

33. “Parcells thought that Taylor’s size and speed were closer to the beginning than the end of the explanation. [The difference was] Taylor’s peculiar energy and mind: relentless, manic, with grandiose ambitions and private standards of performance. Parcells believed that even in the NFL a lot of players were more concerned with seeming to want to win than with actual winning, and that many of them did not know the difference. What they wanted, deep down, was to keep their jobs, make their money, and go home. Lawrence Taylor wanted to win. He expected more of himself on the field than any coach would dare to ask of any player.”—Michael Lewis, The Blind Side

34. Not a “do gooder,” but a fierce competitor who lives by the Robert Francis Kennedy dogma,"Some men see things as they are and say why. I dream things that never were and say why not."

35. George W. Bush effectively discards General Powell in 2004. Suddenly I have a formidable new competitor on the speaking circuit. Wrong. Lucky me: My speakers’ bureau has in fact just gotten much more attractive with GEN/Secretary Powell in the portfolio. As for me, I can’t mimic a Secretary of State. But I can redouble my “competitive” effort; I can do what I love most—compete against myself (as an actor, athlete, dancer, musician or Lawrence Taylor does/did) to become more than I dreamed of becoming—yup, I’m one of those career Dream Chasers—and, hackneyed as it may sound, the journey is indeed more important than the arriving, which I’ll never do in any event. Sure I Google myself against my peers, and worry about my backlog—but to play in the A game, and try to do the Jerry Garcia thing (“only ones who do what we do”) is all about brutal and exhilarating competition with myself. As I’ve said to many, all I have (professionally) is the speech as I give it; for that hour, or eight, the speech and each member of an audience of 5 or 5,000 are my life! I live only to help them remember their Dreams and find a way to pursue them. Brand Inside rules!! Wow project front and center!!

36. "Life is not a journey to the grave with the intention of arriving safely in one pretty and well preserved piece, but to skid across the line broadside, thoroughly used up, worn out, leaking oil, shouting ‘GERONIMO!’ ” —Bill McKenna, professional motorcycle racer (Cycle magazine 02.1982)

37. Ger-on-i-mo!