Tom Peters’ New Business2002: Rules for Re-invention Dallas/06.04.2002

1. Tom Peters’ New Business2002: Rules for Re-inventionDallas/06.04.2002

2. All Slides Available at …tompeters.comNote: Lavender text in this file is a link.

3. NEW BUSINESS: NEW CONTEXT

4. All Bets Are Off.

5. “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

6. The Destruction Imperative.

7. 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

8. “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

9. 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

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

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

12. Axiom (Hypothesis): We have been screwed by Benchmarking … Best Practice … C.I./Kaizen.Axiom (Hypothesis): We need Masters of Discontinuity/ Masters of Ambiguity … in discontinuous/ambiguous times.

13. 20 of 267 of top 10*

14. *P&G:Declining domestic sales in 20 of 26 categories; 7 of top 10 categories.(The “billion-dollar” problem.)Source: Advertising Age 01.21.2002/BofA Securities

15. Primary Obstacles to “Marketing-driven Change”1. Fear of “cannibalism.”2. “Excessive cult of the consumer”/ “customer driven”/ “slavery to demographics, market research and focus groups.”3.Creating “sustainable advantage.”Source: John-Marie Dru, Disruption

16. “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

17. “They [consumer goods company] have acquired a bunch of products, which is what everyone is doing. But what’s the point, the message, the story line, the Big Idea that makes ‘it’ all hang together?”—Exec, major consumer goods company

18. BEWARE “EVAPORATING DISTINCTION”*: Formerly (legitimately) “Great Products” that have become “A Little Bit Better.”*Only “We” can appreciate The Difference

19. “Generally, disruptive technologies underperform established products in mainstream markets. But they have other features that a few fringe (and generally new) customers value.”Clayton Christensen, The Innovator’s Dilemma

20. Jim & Tom. Joined at the hip. Not.

21. Built to Last v. Built to Flip“The problem with Built to Last is that it’s a romantic notion. Large companies are incapable of ongoing innovation, of ongoing flexibility.”“Increasingly, successful businesses will be ephemeral. They will be built to yield something of value – and once that value has been exhausted, they will vanish.”Fast Company (03-00)

22. “But what if [former head of strategic planning at Royal Dutch Shell] Arie de Geus is wrong in suggesting, in The Living Company, that firms should aspire to live forever? Greatness is fleeting and, for corporations, it will become ever more fleeting. The ultimate aim of a business organization, an artist, an athlete or a stockbroker may be to explode in a dramatic frenzy of value creation during a short space of time, rather than to live forever.”Kjell Nordström and Jonas Ridderstråle,Funky Business

23. “The difficulties … arise from the inherent conflict between the need to control existing operations and the need to create the kind of environment that will permit new ideas to flourish—and old ones to die a timely death. … We believe that most corporations will find it impossible to match or outperform the market without abandoning the assumption of continuity. … The current apocalypse—the transition from a state of continuity to state of discontinuity—has the same suddenness [as the trauma that beset civilization in 1000 A.D.]” Richard Foster & Sarah Kaplan, “Creative Destruction” (The McKinsey Quarterly)

24. NEW BUSINESS: NEW TECH

25. The White Collar Revolution.

26. 108 X 5vs. 8 X 1= 540 vs. 8(-98.5%)

27. E.g. …Jeff Immelt: 75% of “admin, back room, finance” “digitalized” in 3 years.Source: BW (01.28.02)

28. IBM’s Project eLiza!** “Self-bootstrapping”/ “Artilects”

29. Deep Blue Redux*: 2,240 EKGs … 1,120 heart attacks. Hans Ohlin (50 yr old chief of coronary care, Univ of Lund/SW) : 620. Lars Edenbrandt’s software: 738.*Only this time it matters!

30. “Most physicians believe that diagnosis can’t be reduced to a set of generalizations—to a ‘cookbook.’ … How often does my intuition lead me astray? The radical implication of the Swedish study is that the individualized, intuitive approach that lies at the center of modern medicine is flawed—it causes more mistakes than it prevents.” —Atul Gawande, Complications

31. “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

32. IS/IT/Web … “On the Bus” or “Off the Bus.”

33. 100square feet

34. The Real “News”: X1,000,000TowTruckNet.com

35. Autobytel:$400.Wal*Mart:13%.Source: BW(05.13.2002)

36. WebWorld = EverythingWeb as a way to run your business’s innardsWeb as connector for your entire supply-demand chainWebas “spider’s web” which re-conceives the industryWeb/B2B as ultimate wake-up call to “commodity producers”Web as the scourge of slack, inefficiency, sloth, bureaucracy, poor customer dataWeb as an Encompassing Way of LifeWeb = Everything (P.D. to after-sales)Web forces you to focus on what you do bestWebas entrée, at any size, to World’s Best at Everything as next door neighbor

37. Message: eCommerce is not a technology play! It is a relationship, partnership, organizational and communications play, made possible by new technologies.

38. Message: There is no such thing as an effective B2B or Internet-supply chain strategy in a low-trust, bottlenecked-communication, six-layer organization.

39. “Ebusiness is about rebuilding the organization from the ground up. Most companies today are not built to exploit the Internet. Their business processes, their approvals, their hierarchies, the number of people they employ … all of that is wrong for running an ebusiness.”Ray Lane, Kleiner Perkins

40. Read It Closely:“We don’t sell insurance anymore.Wesell speed.”Peter Lewis, Progressive

41. “There’s no use trying,” said Alice. “One can’t believe impossible things.” “I daresay you haven’t had much practice,” said the Queen. “When I was your age, I always did it for half an hour a day. Why, sometimes I’ve believed as many as six impossible things before breakfast.”Lewis Carroll

42. I’net …… allows you to dream dreams you could never have dreamed before!

43. NEW BUSINESS: NEW VALUE PROPOSITION

44. The “PSF Solution”:The Professional Service Firm Model.

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

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

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

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

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

50. Model PSF …