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InnoTac/Innovation TacticsTom Peters/InnoTac.0621.06

Premises I

“A focus on cost-cutting and efficiency has helped many organizations weather the downturn, but this approach will ultimately render them obsolete.Only the constant pursuit of innovation can ensure long-term success.”—Daniel Muzyka, Dean, Sauder School of Business, Univ of British Columbia (FT/09.17.04)

“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

“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

More than $$$$#1R&D spending, last 25 years?


“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

Premises II

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

Try It

“This is so simple it sounds stupid, but it is amazing how few oil people really understand that you only find oil if you drill wells.You may think you’re finding it when you’re drawing maps and

studying logs, but you have to drill.”

Source: The Hunters, by John Masters,

Canadian O & G wildcatter (80%)

“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

“We made mistakes. Most of them were omissions we didn’t think of when we initially wrote the software. We fixed them by doing it over and over, again and again. We do the same today: While our competitors are still sucking their thumbs trying to make the design perfect, we’re already on prototype version No. 5. By the time our rivals are ready with wires and screws, we are on version No. 10.It gets back to planning versus acting: We

act from day one; others plan how to plan—for months.”

—Bloomberg by Bloomberg

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

Culture of Prototyping“Effective prototyping may be the most valuable core competence an innovative organization can hope to have.”Michael Schrage

Think about It!?Innovation = Reaction to the PrototypeMichael Schrage

“We are in a brawl with no rules.”—Paul Allaire


Screw Around Vigorously

Screw It Up

“Fail faster. Succeed sooner.”David Kelley/IDEO

Fail. Forward. Fast.–High-tech Exec/PA


“Rewardexcellent failures. Punishmediocre successes.”Phil Daniels, Sydney exec

Read This!Richard Farson & Ralph Keyes:Whoever Makes the Most Mistakes Wins: The Paradox of Innovation

Sam’s Secret #1!

“Tom, very simple. Sam was not afraid to fail.”—David Glass to TP, on the occasion of Sam’s induction into The Sales & Marketing Hall of Fame

Plan B

"I think it is very important for you to do two things: act on your temporary conviction as if it was a real conviction; and when you realize that you are wrong, correct course very quickly.”—Andy Grove

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

Parallel Universe

Build a “School on top of a school” (The Parallel Universe Strategy)

B.School Innovation Strategies: Exec Ed/Continuing Ed (fewer restraints). Web (fewer restraints). “Parallel Universe” approach (JKC/Bob S)! Recruit “weird” (in places you can get away with it—eg, students, continuing ed faculty lesser admin jobs)!Message: LOOK FOR/EXPLOIT THE “WEAK” (Unregulated) SPOTS!


JKC/Smith1. Scour for renegades; wine & dine.2. Go outside for funds.

Change? Ha! Try: End Run! Build Your Own! Period!“We’re never going to persuade the conservatives to accept [our view]. We need to build our own institutions.”—anon.

Parallel Universe/Venture Fund

“Venture” fund(E.g. Gerstner/Amex, Dow/Marriott, Grove/Intel, Bedbury/Starbucks)

2/50**Scott Bedbury/Starbucks/<1%/<4 of 400/ grabbed best/all wanted to be there/2%-50%

Shell“Game Changer”10% of technical budget “set aside and used to fund promising but nontraditional ideas through a staged funding process similar to that used by venture capitalists” Source: Financial Times/08.2003

We Are What We Eat

We become who we hang out with!

Measure “Strangeness”/Portfolio QualityStaffConsultantsVendorsOut-sourcing Partners (#, Quality)Innovation Alliance PartnersCustomersCompetitors (who we “benchmark” against)Strategic Initiatives Product Portfolio (LineEx v. Leap)IS/IT ProjectsHQ LocationLunch MatesLanguageBoard

Requirement: Discomfort

“I’m not comfortable unless I’m uncomfortable.”—Jay Chiat

Find ’em

“Some people look for things that went wrong and try to fix them. I look for things that went right, and try to build off them.”—Bob Stone (Mr ReGo)

“Somewhere in your organization, groups of people are already doing things differently and better. To create lasting change, find these areas of positive deviance and fan the flames.” —Richard Tanner Pascale & Jerry Sternin, “Your Company’s Secret Change Agents,” HBR

Sing Them

Demos! Heroes! Stories!

REAL Org Change:Demos & Models (“Model Installations,” “ReGo Labs”)/ Heroes(mostly extant: “burned to reinvent gov’t”)/ Stories&Storytellers (Props!)/ Chroniclers (Writers, Videographers, Pamphleteers, Etc.)/ Cheerleaders&Recognition(Pos>>Neg, Volume)/ New Language (Hot/Emotional/WOW)/ Seekers(networking mania)/ Protectors/ Support Groups/ End Runs—“Pull Strategy” (weird alliances, weird customers, weird suppliers, weird alumnae-JKC)/ Field “Real People” Focus(3 COs) (long way away)/Speed (O.O.D.A. Loops—act before the “bad guys” can react)C.f., Bob Stone, Lessons from an Uncivil Servant

Stories … Paint me a picture … Story “infrastructure” … Demos … Quick prototypes … Experiments … Heroes … Renegades … Skunkworks … Demo Funds … V.C. … G.M. … Roster … Portfolio … Stone’s Rules … JKC’s Rules

“My mission is that of a mole—my existence only to be known by upheavals.”—Jan Morris, Fisher’s Face, Or, Getting to Know the Admiral

Org Structure

Core Mechanism:“Game-changing Solutions”PSF(Professional Service Firm “model”/The Organizing Principle)+Brand You(“Distinct” or “Extinct”/The Talent) +Wow! Projects (“Different” vs “Better”/The Work)

Band of Brothers (& Sisters!)

“Never doubt that a small group of committed people can change the world. Indeed it is the only thing that ever has.”—Margaret Mead

Hard is soft.Soft is hard.

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

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

Hard is soft.Soft is hard.

“Most important, heuppedthe energy levelat Motorola.”—Fortune on Ed Zander/08.05







Inno64: Innovation Strategies & Tactics

Parallel universe/Exec Ed v res MBA

End run regnant powers/JKC

Find done deals-practicing mavericks/Stone-ReGo

Bell curves2016 in 2006

Non-industry benchmarking

Everything = Portfolio

V.C.s all!

Hot language/Wow-Astonish me-Insanely great-immortal-Make something great

Lead customers/PW-Embraer

Lead suppliers /Top decile R&D

Weird alliances

Mottos/Paul Arden (“Whatever You Think Think the Opposite”)

Hire freaks/Enough weird people?

Weird Boards!!!

CEO track record of Innovation (nobody starts at 45!)


“Strategic thrust overlay”


Big Delta easier than Small

MBWA with freaks-weirdos/JKC

MBWA/Boonies’ labs


Acquire weird

Children’s crusade

Old farts crusade

Go Global at any size

Stop listening to customers

Talent!/Unusual sources-Hire innovators-V.C.s

Eschew giant mergers

Remember: scale economies max out early

Assisted suicide! (“Built to last” = Chimera-snare-delusion)

Burn your press clippings

“Forgetting” “strategy”

Fire all strategic planners


Final product bears little relation to starting notion

Design! Design! Design! (“culture,” not program)

All innovation: Pissed-off people

Gut feel rules!

Focus groups suck

Weird focus groups okay

Be-Do philosophy


Culture-little as well as big Inno (“everyone-an-innovator”)

Life = Wow Projects

Acknowledge messiness-pursue serendipity (Blitzkrieg-Containers-Science-Jim Utterback)


Culture of execution

4/40: decentralization, execution, accountability, 615AM

EVP (S.O.U.B.)/Systems-process “un-design”

Diversity for diversity’s sake

Women-Women-Women/customers (they “are the market,” not a “segment”)-leaders

Boomers-Geezers (“all the money”)

CRO (Chief Revenue Officer) “culture”/top-line obsessed

CIO (Chief INNOVATION Officer)


Facility-space configuration


“Reward excellent failures. Punish mediocre successes.”

Bizarrely high incentives (& penalties)

We are what we eat/We are who we hang out with (E.g.: Staff-Consultants-Vendors-Out-sourcing Partners/#, Quality-Innovation Alliance Partners-Customers-Competitors/who we “benchmark” against -Strategic Initiatives -Product Portfolio/LineEx v. Leap-IS/IT Projects-HQ Location-Lunch Mates-Language-Board)

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