Innovation: Everything You Thought You Knew Is Wrong

1. NOTE:To appreciate this presentation [and insure that it is not amess], you need Microsoft fonts:“Showcard Gothic,”“Ravie,”“Chiller”and “Verdana”

2. Part 1.2Tom Peters’ EXCELLENCE. ALWAYS.NEW MASTER/21 August 2008

3. Slides at …tompeters.com

4. Ten PartsP1.1, P1.2, P1.3, P1.4/GenericP2/LeadershipP3/TalentP4/“Value-added Ladder”P5/“New” Markets P6/“The Equations”P7.1/ImplementationP7.2/ActionP8/13 “Guru Gaffes”P9/Health“care”P10/“The Lists”

5. Part 1.2

6. The “model” for my MASTER presentation has historically been Linear—consistent with my engineering background and perhaps my 50% or so of German genetic material. (Peters, for heaven's sake—Granddad Peters, a contractor-engineer, came to the U.S. in the 1870s.) But in my oral presentations I found I often never got around to the punchline. So in November 2007, preparing for a speech in Madrid, I decided, “The hell with it, I’m going to organize by importance of the topic by my reckoning, and put first things first”—and the heck with linearity. That in turn coincided with my decision to re-emphasize “the basics” that often go missing but which are the bedrock for getting things done in the real world. The result, for now, seven months later, is this New Annotated Master. All yours …

7. #10

8. EVERYTHING YOU THOUGHT YOU KNEW ABOUT INNOVATION IS WRONG

9. 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

10. “Nobody knows anything”—William Goldman

11. The Mess IsThe Message! Period!

12. What makes God laugh?

13. Peoplemakingplans!

14. The Mess IsThe Message! Period!

15. NOTE: few ideas are more important—and more honored in the breach. Innovation is MESSY to the extreme. Such an assertion (reality!) determines the success of innovation “strategies,” perhaps the wrong word. This unfolding “story” is one of the most important in my efforts to alter enterprise thinking.

16. First-level Scientific Success:Beyond Brains

17. First-level Scientific SuccessThe smartest guy in the room wins”Or …

18. First-level Scientific SuccessFanaticismPersistence-Dogged TenacityPatience (long haul/decades)-Impatience (in a hurry/”do it yesterday”)PassionEnergyRelentlessness (Grant-ian) EnthusiasmDriven (nuts!) (Brutal?) CompetitivenessEntrepreneurialPragmatic (R.F!A.)Scrounge (“gets” the logistics-infrastructure bit)Master of Politics (internal-external)Tactical GeniusPursuit of (Oceanic) Excellence!High EQ/Skillful in Attracting + Keeping Talent/MagneticProlific (“ground up more pig brains”)EgocentricSense of History-DestinyFuturistic-In the MomentMono-dimensional (“Work-life balance”? Ha!)Exceptionally IntelligentExceptionally Clever (methodological shortcuts/methodological genius)Luck

19. Blitzkrieg?

20. 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.”

21. Case: Lessons LearnedDo something.Get lucky. Attribute luck to superior planning.Get medals.

22. “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 several occasions, with Hitler’s backing, to slow the panzers down. … The victory in France partly came about because the German High Command temporarily lost control of the battle.”—Julian Jackson, The Fall of France: The Nazi Invasion of 1940

23. Happy 50!26April2006

24. An Economic Interpretation of the Constitution of the United States—Charles Beard (1913)The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger—Marc LevinsonTube: The Invention of Television—David & Marshall FisherEmpires of Light: Edison, Tesla, Westinghouse, and the Race to Electrify the World—Jill JonnesThe Soul of a New Machine—Tracy KidderRosalind Franklin: The Dark Lady of DNA—Brenda MaddoxThe Blitzkrieg Myth—John Mosier

25. NOTE: Containerization was 50 last year. The story of its development is a “thriller” by any standard—and a brilliant exemplar of the tortuous path from inkling to reality.

26. LessonsNeed-drivenA thousand “parents”MessyEvolutionary“Trivial”Relentless ExperimentationTrial & many, many eRRORs“Real heroes” seldom around when the battle is wonLoooong time for systemic adaptation/s(many innovations) (bill of lading, standard time)Not …“Plan-driven”The product of “Strategic Thinking/Planning”The product of “focus groups”

27. “Containerization is a remarkable achievement. No one foresaw how the box would transform everything it touched—from ships and ports to patterns of global trade. Containerization is a monument to the most powerful law in economics, that of unanticipated consequences. … This history ought to be humbling to fans of modern management methods. Careful planning and thorough analysis, those business school basics, may have their place, but they provide little guidance in the face of disruptive changes that alter an industry’s very fundamentals.”—Marc Levinson, FT, 0425.06 (author of The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger)

28. “New technology, by itself, has little economic benefit. … The economic benefits arise not from innovation itself, but from the entrepreneurs who eventually discover ways to put innovation to practical use —and, most critically, from the organizational changes through which businesses reshape themselves to take advantage of new technology.”—Marc Levinson, The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger

29. “… and, most critically, from the organizational changes through which businesses reshape themselves to take advantage of new technology.”—Marc Levinson, The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger

30. Utterback+

31. “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

32. “Recently I asked several corporate executives what decisions they had made in the last year that would not have been made were it not for their corporate plans. All had difficulty identifying one such decision. Since all of the plans are marked ‘secret’ or ‘confidential,’ I asked them how their competitors might benefit from possession of their plans. Each answered with embarrassment that their competitors would not benefit.”—Russell Ackoff (from Henry Mintzberg, The Rise and Fall of Strategic Planning)

33. “Apparently our society, not unlike the Greeks with their Delphic oracles, takes great comfort in believing that very talent ‘seers’ removed from the hurly-burly world of reality can tell foretell coming events.” —Len Sayles/Columbia

34. The Perils of Conservatism/Industry Leadership“ ‘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

35. Tom’s source code: The eight iconic books which are the Wellsprings of my operating values and core assumptions05.22.07

36. Fooled by Randomness: The Hidden Role of Chance in Life and the Markets,Nassim Nicholas Taleb The Black Swan: The Impact of the Highly Improbable,Nassim Nicholas Taleb Expert Political Judgment: How Good Is It? How Can We know?Philip Tetlock The Difference: How the Power of Diversity Creates Better Groups, Firms, Schools, and Societies,Scott Page The Wisdom of Crowds,James Surowiecki Full House: The Spread of Excellence from Plato to Darwin,Stephen Jay Gould Judgment under Uncertainty: Heuristics and Biases,Daniel Kahneman, Paul Slovic, and Amos Tversky A Mind of Its Own: How Your Brain Distorts and Deceives,Cordelia Fine

37. Fooled by Randomness: The Hidden Role of Chance in Life and the Markets,Nassim Nicholas Taleb “This book is about luck disguised and perceived as non-luck (that is, skills) and more generally randomness disguised and perceived as non-randomness. It manifests itself in the shape of the lucky fool, defined as a person who benefited from a disproportionate share of luck but attributed his success to some other, generally precise reason.” The Black Swan: The Impact of the Highly Improbable,Nassim Nicholas Taleb Expert Political Judgment: How Good Is It? How Can We know?Philip Tetlock “A fox, the thinker who knows many little things, draws from an eclectic array of disciplines, and is better able to improvise in response to changing events, is more successful in predicting the future than the hedgehog, who knows one big thing, toils devotedly within one tradition, and imposes formulaic solutions on ill defined problems.” The Difference: How the Power of Diversity Creates Better Groups, Firms, Schools, and Societies,Scott Page“Diverse groups of problem solvers—groups of people with diverse tools—consistently outperformed groups of the best and the brightest. If I formed two groups, one random (and therefore diverse) and one consisting of the best individual performers, the first group almost always did better. … Diversity trumped ability.” The Wisdom of Crowds,James Surowiecki Full House: The Spread of Excellence from Plato to Darwin, Stephen Jay Gould Judgment under Uncertainty: Heuristics and Biases, Daniel Kahneman, Paul Slovic, and Amos Tversky A Mind of Its Own: How Your Brain Distorts and Deceives, Cordelia Fine “Your brain has some shifty habits that leave the truth distorted and disguised. Your brain is vainglorious. It’s emotional and immoral. It deludes you. It is pigheaded, secretive and weak willed. Oh, and it’s also a bigot.”

38. The (Strange) Case of Peter Drucker & Michael Porter vs. The “Non-linearists”HERBERT SIMON. (Administrative Behavior.) JAMES MARCH. KARL WEICK. (The Social Psychology of Organizing.) EUGENE WEBB. Henry MINTZBERG. (The Rise and Fall of Strategic Planning.) JAMES UTTERBACK. THOMAS KUHN. (The Structure of Scientific Revolutions.)CHARLES LINDBLOM. Daniel goleman. INNOVATION BIOGRAPHERS.*(*Transcontinental Railroad, Electrification, Radio, Television, Containerization, DNA, Computers, Military History, Etc.)MOST POLITICAL SCIENTISTS. SILICON VALLEY. Etc.

39. “Hard” Stuff/Science: 20%“Soft” Stuff/Politics: 80%

40. “Hard” Stuff/Analysis & planning: 25%“Soft” Stuff/people &Politics & Passion & execution: 75%

41. “Peters is the Michel Foucault of the management world: a scourge of the rationalist tradition and a celebrant of the creative necessity of chaos and craziness.”—Financial Times, 09.23.2003, review of Re-imagine! (“You Should Be Bonkers in a Bonkers’ Time”)

42. The “5Ps” of Innovation Success:Pissed-off-ed-nessPassionpalsPolitics [Political skill]Persistence

43. Get mad. Do something about it. Now.

44. The Mess IsThe Message! Period!

45. #11

46. 1/40

47. “one idea.”1966-2008.

48. What makes God laugh?

49. Peoplemakingplans!

50. “We have a ‘strategic plan.’ It’s called doing things.”— Herb Kelleher