Tom peters re imagine business excellence in a disruptive age 02 07 2004
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Tom Peters Re-Imagine!Business Excellence in a Disruptive Age02.07.2004


Slides at tompeters.com


I. NEW BUSINESS. NEW CONTEXT.


Uncertainty is the only thing to be sure of.Anthony Muh,head of investment in Asia, Citigroup Asset ManagementIf you dont like change, youre going to like irrelevance even less.General Eric Shinseki, Chief of Staff, U. S. Army


All Bets Are Off.


Jobs TechnologyGlobalization War, Warfighting & Security


JobsNew TechnologyGlobalization War, Warfighting & Security


Behind Surging Productivity: The Service Sector Delivers. Firms Once Thought Immune to Boosting Worker Output Are Now Big Part of the TrendHeadline/WSJ/11.03


As Economy Gains, Outsourcing SurgesHeadline/Boston Globe/11.03


1 in 10 tech jobs headed offshore by end of 2004.Source: Gartner Group/06.03


14MILLION service jobs are in danger of being shipped overseasThe Dobbs Report/USN&WR/11.03/re new UCB study


One Singaporean workercosts as much as 3 in Malaysia 8 in Thailand 13 in China 18 in India.Source: The Straits Times/08.18.03


The proper role of a healthily functioning economy is to destroy jobs and to put labor to use elsewhere. Despite this truth, layoffs and firings will always sting, as if the invisible hand of free enterprise has slapped workers in the face. Joseph Schumpeter


--79% of U.S. jobs in structurally changed professions (permanently eliminated jobs)(40K of 160K U.S. IBM)--As we trade we release more labor from the service sector because our highly skilled and highly paid workers lose their competitive advantage. So we go to the next big thing. We specialize in innovation. We develop new products and start new industries. (Erica Groshen, labor economist Fed of NY)Source: CNN/Money/01.07.2004


There is no job that is Americas God-given right anymore.Carly Fiorina/ HP/ 01.08.2004


WHAT ARE PEOPLE GOING TO DO WITH THEMSELVES?Headline/ Fortune/ 11.03 (We should finally admit that we do not and cannot know, and regard that fact with serenity rather than anxiety.)


Either we modernize or we will be modernized by the unremitting force of the markets.Gerhard Schroeder


JobsTechnologyGlobalization War, Warfighting & Security


<1000A.D.: paradigm shift: 1000s of years1000: 100 years for paradigm shift1800s: > prior 900 years1900s: 1st 20 years > 1800s2000: 10 years for paradigm shift21st century: 1000Xtech change than 20th century (the Singularity, a merger between humans and computers that is so rapid and profound it represents a rupture in the fabric of human history)Ray Kurzweil


Vernor Vinge/Mr. SingularityThe transition time from human history to post-human singularity time, Vinge thinks, will be astonishingly shortmaybe one hundred hours from the first moment of computer self-awareness to computer world conquest.Esquire/12.2002


We found that the pace of development from one societal type to another is accelerating. The agricultural society originated 10,000 years ago, the industrial society between 200 and 100 years ago, the information-based society 20 years ago.Rolf Jensen/The Dream Society: How the Coming Shift from Information to Imagination Will Transform Your Business


I genuinely believe we are living through the greatest intellectual moment in history.Matt Ridley, Genome


In 25 years, youll probably be able to get the sum total of all human knowledge on a personal device.Greg Blonder, VC [was Chief Technical Adviser for Corporate Strategy @ AT&T] [Barrons 11.13.2000]


A California biotechnology company has put the entire sequence of the human genome on a single chip, allowing researchers to conduct on the complex relationships between the 30,000 genes that make up a human being in a single experiment.Page 1, Financial Times/10.03.2003


Sequenom/David Ewing Duncan/Wired11.02Sequenom has industrialized the SNP [single nucleotide polymorphisms] identification process. This, Im told, is the first time a healthy human has ever been screened for the full gamut of genetic-disease markers. On the horizon: multi-disease gene kits, available at Wal*Mart, as easy to use as home-pregnancy tests. You cant look at humanity separate from machines; were so intertwined were almost the same species, and the difference is getting smaller.


Help! Theres nobody in the cockpit. In the future, will the airlines no longer need pilots?Grumman Global Hawk/ 24 hours/ Edwards to South AustraliaSource: The Economist/12.21.2002


Theres going to be a fundamental change in the global economy unlike anything we have hadsince the cavemen began bartering.Arnold Baker, Chief Economist, Sandia National Laboratories


UPS used to be a trucking company with technology. Now its a technology company with trucks.Forbes, upon naming UPS Company of the Year in Y2000


JobsTechnologyGlobalization War, Warfighting & Security


The World Must Learn to Live with a Wide-awake ChinaHeadline/FT/11.03


Asias rise is the economic event of our age. Should it proceed as it has over the last few decades, it will bring the two centuries of global domination by Europe and, subsequently, its giant North American offshoot to an end. Financial Times (09.22.2003)


The world has arrived at a rare strategic inflection point where nearly half its populationliving in China, India and Russiahave been integrated into the global market economy, many of them highly educated workers, who can do just about any job in the world. Were talking about three billion people.Craig Barrett/Intel/01.08.2004


Cost of a Programmer, per IBM China: $12.50 per hourUSA: $56 per hourSource: WSJ/01.19.2004


China Roars!


China has become a manufacturing hub for the rest of the world in low-end labor-intensive goodsand the rest of the world is becoming a manufacturing hub for China in high-end, capital-intensive goods. China may be a threat to certain parts of the global supply chain that rely on low-cost labor, but it represents an even greater opportunity via production-efficiency gains, economic welfare gains and long-term dynamic potential. Its booming exports are more than matched by booming industrial imports and foreign investment opportunities. It has become the new engine of global growth.Source: Glen Hodgson & Mark Worrall/Export Development Canada, in China Takes Off, David Hale & Lyric Hughes Hale/Foreign Affairs/Nov-Dec2003


1990-2003: Exports 8X ($380B); 6% global exports 2003 vs. 3.9% 2000; 16% of Total Global Growth in 2002.Source: China Takes Off, David Hale & Lyric Hughes Hale/Foreign Affairs/Nov-Dec2003


1998-2003: 45,000,000 layoffs in state sector; offset by $450B in foreign investment; foreign companies account for 50+% of exports vs. 31% in Mexico, 15% in Korea.Source: China Takes Off, David Hale & Lyric Hughes Hale/Foreign Affairs/Nov-Dec2003


50% of output from private firms, 37% from state-owned firms; 80% of workforce (incl. rural) now in private employ.Source: China Takes Off, David Hale & Lyric Hughes Hale/Foreign Affairs/Nov-Dec2003


Population growth = 1%; two-thirds of housing privately owned, 90% of urban Chinese own a home (vs. 61% in Japan)Source: China Takes Off, David Hale & Lyric Hughes Hale/Foreign Affairs/Nov-Dec2003


200 cities with >1,000,000 population.Source: China Takes Off, David Hale & Lyric Hughes Hale/Foreign Affairs/Nov-Dec2003


200,000,000 unemployed; must create 20,000,000 jobs per year to offset layoffs; 400,000,000 elderly Chinese by 2030 (currently no pension funds).Source: China Takes Off, David Hale & Lyric Hughes Hale/Foreign Affairs/Nov-Dec2003


397,000,000 fixed phone lines = 90X since 1989.Source: China Takes Off, David Hale & Lyric Hughes Hale/Foreign Affairs/Nov-Dec2003


2003: China-Hong Kong leading producer in 8 of 12 key consumer electronic product areas (>50%: DVDs, digital cameras; >33.33%: DVD-ROM drives, personal desktop and notebook computers; >25% mobile phones, color TVs, PDAs, car stereos).Source: China Takes Off, David Hale & Lyric Hughes Hale/Foreign Affairs/Nov-Dec2003


When the Chinese Consumer Is King: Americas mass market is second to none. Someday it will just be second.Headline, New York Times/12.14.2003


World economic output: U.S.A., 21%; EU, 16%; China, 13% (2X since1991)Source: New York Times/12.14.2003


America, like everyone else, must get used to being a loser as well as a gainer in the global economy. In the end, the 21st century is unlikely to be the American Century.When the Chinese Consumer Is King/New York Times/12.14.2003.The notion that God intended Americans to be permanently wealthier than the rest of the world, that gets less and less likely as time goes on.Robert Solow, Nobel laureate in economics/New York Times/12.14.2003


JobsTechnologyGlobalizationWar, Warfighting & Security


We are at a pivotal point in history. We are at one of a half dozen turning points that have fundamentally changed the way societies are organized for governance.Philip Bobbitt, The Shield of Achilles: War, Peace, and the Course of History


September 11 amounts to World War IIIthe third great totalitarian challenge to open societies in the last 100 years.Thomas Friedman/NYT/01.08.2004


The worlds new dimension (computers, Internet, globalization, instantaneous communication, widely available instruments of mass destruction and so on) amounts to a new metaphysics that, by empowering individual zealots or agitated tribes with unappeasable grievances, makes the world unstable and dangerous in radically new ways. Lance Morrow/Evil


The Breaking of Nations: Order and Chaos in the Twenty-first CenturyRobert Cooper (as interpreted by Tom Peters)


This is a dangerous world and it is going to become more dangerous.We may not be interested in chaos but chaos is interested in us.Source: Robert Cooper, The Breaking of Nations: Order and Chaos in the Twenty-first Century


What happened after 1945 was not so much a radically new system as the concentration and culmination of the old one. Robert Cooper, on the Cold War, from The Breaking of Nations: Order and Chaos in the Twenty-first Century


What has been emerging into the daylight since 1989 is not a rearrangement of the old system but a new system. Behind this lies a new form of statehood, or at least states that are behaving in a radically different way from the past. Robert Cooper, The Breaking of Nations: Order and Chaos in the Twenty-first Century


The image of peace and order through a single hegemonic power center [is wrong]. It was not the empires but the small states that proved to be a dynamic force in the world. Empires are ll-designed for promoting change. Holding an empire together requires an authoritarian political style; innovation leads to instability.Robert Cooper, The Breaking of Nations: Order and Chaos in the Twenty-first Century


Read This!


The new century risks being overrun by both anarchy and technology. The two great destroyers of history may reinforce each other. Both the spread of terrorism and that of weapons of mass destruction point to a world in which Western governments are losing control. The spread of the technology of mass destruction represents a potentially massive redistribution of power away from the advanced industrial (and democratic) states and toward smaller states that may be less stable and have less of a stake in an orderly world; or more dramatically still, it may represent a redistribution of power away from the state itself and towards individuals, that is to say terrorists or criminals. In the past to be damaging, an ideological movement had to be widespread to recruit enough support to take on authority. Henceforth, comparatively small groups will be able to do the sort of damage which before only state armies or major revolutionary movements could achieve. A few fanatics with a dirty bomb or biological weapons will be able to cause death on a scale not previously envisaged. Emancipation, diversity, global communicationall of the things that promise an age of riches and creativitycould also bring a nightmare in which states lose control of the means of violence and people lose control of their futures.Robert Cooper, The Breaking of Nations: Order and Chaos in the Twenty-first Century


Reflect.


The two systemsthe modern based on balance and the post-modern based on opennessdo not co-exist well together.Robert Cooper, The Breaking of Nations: Order and Chaos in the Twenty-first Century


Before we can talk about the security requirements for today and tomorrow, we have to forget the security rules of yesterday.Robert Cooper,The Breaking of Nations: Order and Chaos in the Twenty-first Century


IT MAY SOMEDAY BE SAID THAT THE 21ST CENTURY BEGAN ON SEPTEMBER 11, 2001. Al-Qaeda represents a new and profoundly dangerous kind of organizationone that might be called a virtual state. On September 11 a virtual state proved that modern societies are vulnerable as never before.Time/09.09.2002


The deadliest strength of Americas new adversaries is their very fluidity, Defense Secretary Donald Rumsfeld believes. Terrorist networks, unburdened by fixed borders, headquarters or conventional forces, are free to study the way this nation responds to threats and adapt themselves to prepare for what Mr. Rumsfeld is certain will be another attack. Business as usual wont do it, he said. His answer is to develop swifter, more lethal ways to fight. Big institutions arent swift on their feet in adapting but rather ponderous and clumsy and slow. The New York Times/09.04.2002


From: Weapon v. WeaponTo:Org structure v. Org structure


Our military structure today is essentially one developed and designed by Napoleon.Admiral Bill Owens, former Vice Chairman, Joint Chiefs of Staff


The organizations we created have become tyrants. They have taken control, holding us fettered, creating barriers that hinder rather than help our businesses. The lines that we drew on our neat organizational diagrams have turned into walls that no one can scale or penetrate or even peer over.Frank Lekanne Deprez & Ren Tissen, Zero Space: Moving Beyond Organizational Limits.


In an era when terrorists use satellite phones and encrypted email,US gatekeepers stand armed against them with pencils and paperwork, and archaic computer systems that dont talk to each other.Boston Globe (09.30.2001)


Dawn Meyerreicks, CTO of the Defense Information Systems Agency, made one of the most fateful military calls of the 21st century. After 9/11 her office quickly leased all the available transponders covering Central Asia. The implications should change everything about U.S. military thinking in the years ahead. The U.S. Air Force had kicked off its fight against the Taliban with an ineffective bombing campaign, and Washington was anguishing over whether to send in a few Army divisions. Donald Rumsfeld told Gen. Tommy Franks to give the initiative to 250 Special Forces already on the ground. They used satellite phones, Predator surveillance drones, and GPS- and laser-based targeting systems to make the air strikes brutally effective.In effect, they Napsterized the battlefield by cutting out the middlemen (much of the militarys command and control) and working directly with the real players. The data came in so fast that HQ revised operating procedures to allow intelligence analysts and attack planners to work directly together. Their favorite tool, incidentally, was instant messaging over a secure network.Ned Desmond/Broadbands New Killer App/Business 2.0/ OCT2002


The mechanical speed of combat vehicles has not increased since Rommels day, so the difference is all in the operational speed, faster communications and faster decisions.Edward Luttwak, on the unprecedented pace of the move toward Baghdad


If early soldiers idealized Napoleon or Patton, network-centric warriors admire Wal*Mart,where point-of-sale scanners share information on a near real-time basis with suppliers and also produce data that is mined to help leaders develop new strategic or tactical plans. Wal*Mart is an example of translating information into competitive advantage.Tom Stewart, Business 2.0


The New Infantry Battalion/New York Times/12.01.2002Pentagons Urgent Search for Speed. 270 soldiers (1/3rd normal complement); 140 robotic off-road armored trucks. Every soldier is a sensor. Revolutionary capabilities. Find-to-hit: 45 minutes to 15 minutes in just one year.


Armies are like plants, immobile, firm-rooted, nourished through long stems to the head guerillas: might be a vapour; fighting guerillas like eating soup with a knifeSource: T.E. Lawrence


Erics ArmyFlat.Fast.Agile.Adaptable.Light But Lethal.Talent/ I Am an Army of One.Info-intense.Network-centric.


Float like a butterfly. Sting like a bee. Ali


To fight terrorism with an army is like trying to shoot a cloud of mosquitoes with a machine gun.Review of Terror in the Name of God/NYT/11.2003


Rather than have massive armies that people can go along and inspect, it is now about having rapidly deployable expediency forces that can be dropped by land, sea or air and with full support. MoD official, on Defense Secretary Geoff Hoons defense white paper (12.2003)


We must not only transform our armed forces but the Defense Department that serves themby encouraging a culture of creativity and intelligent risktaking. We must promote a more entrepreneurial approach: one that encourages people to be proactive, not reactive, and to behave less like bureaucrats and more like venture capitalists; one that does not wait for threats to emerge and be validated, but rather anticipates them before they appear and develops new capabilities to dissuade them and deter them. Donald Rumsfeld, Foreign Affairs


Boyd


OODA Loop/Boyd CycleUnraveling the competition/ Quick Transients/ Quick Tempo (NOT JUST SPEED!)/ Agility/ So quick it is disconcerting (adversary over-reacts or under-reacts)/ Winners used tactics that caused the enemy to unravel before the fight (NEVER HEAD TO HEAD)BOYD: The Fighter Pilot Who Changed the Art of War (Robert Coram)


Fast TransientsButtonhook turn (YF16: could flick from one maneuver to another faster than any aircraft)BOYD: The Fighter Pilot Who Changed the Art of War (Robert Coram)


Blitzkrieg is far more than lightning thrusts that most people think of when they hear the term; rather it was all about high operational tempo and the rapid exploitation of opportunity./ Arrange the mind of the enemy.T.E. Lawrence/ Float like a butterfly, sting like a bee.AliBOYD: The Fighter Pilot Who Changed the Art of War (Robert Coram)


F86 vs. MiG/Korea/10:1Bubble canopy (360 degree view)Full hydraulic controls (The F86 driver could go from one maneuver to another faster than the MiG driver)MiG: faster in raw acceleration and turning ability; F86: quicker in changing maneuversBOYD:The Fighter Pilot Who Changed the Art of War (Robert Coram)


ManeuveristsBOYD: The Fighter Pilot Who Changed the Art of War (Robert Coram)


Thunder Run/3rd Infantry Division/04.07.2004/We wanted to create as much chaos as possible.COL David Perkins/Disorient and demoralizeDHR


Strategy meetings held once or twice a year to Strategy meetings needed several times a week

Source: New York Times on Meg Whitman/eBay


All Bets Are Off!


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


We have no future because our present is too volatile. We have only risk management. The spinning of the given moments scenarios. Pattern recognition.from William Gibson, Pattern Recognition


Save the date. Dennis Kozlowski and Mark Swartz. Martha Stewart. Scott Sullivan. John Rigas. Walter Forbes and Kirk Shelton. Frank Quattrone. Richard Scrushy. Miscl. EnronniesSource: Headline/Business Day/NYT/01.08.2004


We are in abrawl with no rules.Paul Allaire


S.A.V.


I Believe 1. Change will accelerate. DRAMATICALLY.2. We will RE-INVENT THE WORLD IN THE NEXT TWO GENERATIONS.(Business Health Care Politics War Education Fundamentals of Human Interaction.)3. OPPORTUNITIES are matchless.4. You are either ON THE BUS or OFF THE BUS.5. I WANT TO PLAY! ANDYOU?


Successful Businesses Dozen Truths: TPs 30-Year Perspective1. Insanely Great & Quirky Talent.2. Disrespect for Tradition.3. Totally Passionate (to the Point of Irrationality) Belief in What We Are Here to Do.4. Utter Disbelief at the Bullshit that Marks Normal Industry Behavior.5. A Maniacal Bias for Execution and Utter Contempt for Those Who Dont Get It.6. Speed Demons.7. Up or Out. (Meritocracy Is Thy Name. Sycophancy Is Thy Scourge.)8. Passionate Hatred of Bureaucracy.9. Willingness to Lead the Customer and Take the Heat Associated Therewith. (Mantra: Satan Invented Focus Groups to Derail True Believers.)10. Reward Excellent Failures. Punish Mediocre Successes. 11. Courage to Stand Alone on Ones Record of Accomplishment Against All the Forces of Conventional Wisdom.12. A Crystal Clear Understanding of Brand Power.


It is the foremost taskand responsibilityof our generation to re-imagine our enterprises, private and public.from the Foreword, Re-imagine


How we feel about the evolving future tells us who we are as individuals and as a civilization: Do we search for stasisa regulated, engineered world? Or do we embrace dynamisma 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


2. The Destruction Imperative.


It is generally much easier to kill an organization than change it substantially. Kevin Kelly, Out of Control


C.E.O.to C.D.O.


Wealth in this new regime flows directly from innovation, not optimization. That is, wealth is not gained by perfecting the known, but by imperfectly seizing the unknown.Kevin Kelly, New Rules for the New Economy


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


Mr. Foster and his McKinsey colleagues collected detailed performance data stretching back 40 years for 1,000 U.S. companies. They found that none of the long-term survivors managed to outperform the market. Worse, the longer companies had been in the database, the worse they did.Financial Times/11.28.2002


Its just a fact: Survivors underperform.Dick Foster


Rate of Leaving F5001970-1990: 4XSource: The Company, John Micklethwait & Adrian Wooldridge (1974-200: One-half biggest 100 disappear)


Far from being a source of comfort, bigness became a code for inflexibility.John Micklethwait & Adrian Wooldridge, The Company


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 Innovators Dilemma


Forget>LearnThe problem is never how to get new, innovative thoughts into your mind, but how to get the old ones out.Dee Hock


Success Kills!The more successful a company, the flatter its forgetting curve. Gary Hamel and C.K. Prahalad


When asked to name just one big merger that had lived up to expectations, Leon Cooperman, former cochairman of Goldman Sachs Investment Policy Committee, answered:Im sure there are success stories out there, but at this moment I draw a blank.Mark Sirower, The Synergy Trap


Conglomerates dont work.James Surowiecki, The New Yorker (07.01,2002)


MERGERS: Why Most Big Deals Dont Pay Off. A BusinessWeek analysis shows that 61% of buyers destroyed shareholder wealth.BusinessWeek/10.14.2002


Market Share, Anyone? 240 industries; market-share leader is ROA leader 29% of the time Profit / ROA leaders: aggressively weed out customers who generate low returnsSource: Donald V. Potter, Wall Street Journal


Acquisitions are about buying market share. Our challenge is to create markets. There is a big difference.Peter Job, CEO, Reuters


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


Survival of the Fittest Not the Fattest/John Kay/FT03.27.2003I have heard it from people who make pharmaceuticals and from people who make defense equipment. From executives in utilities and executives in advertising. Among banks and law firms. .. They all expect their industry to develop the way the car industry has. In an increasingly globalized marketplace, maturing industries will become steadily more concentrated. Only a small number of big companies will survive.There is one problem with these analogies. What is said about the motor industry is not true.The peak of concentration in the automobile industry was reached in the early 1950s and since then there has been a substantial decline. However you look at it, small carmakers have been steadily gaining market share at the expense of large ones. Back in the 1960s, the 10 largest carmakers had a market share of 85 percent; today it is about 75 percent. Concentration has fallen, even though weak firms have been repeatedly absorbed through mergers.As markets evolve, differentiation becomes steadily more important. Success in the motor industry comes not from size or scale, but from developing competitive advantages in operations and marketing those advantages internationally. The same is true in pharmaceuticals and defense equipment, utilities and banking, telecommunications and media.


Lessons from the Bees!Since merger mania is now the rage, what lessons can the bees teach us? A simple one: Merging is not in nature. [Natures] process is the exact opposite: one of growth, fragmentation and dispersal. There is no megalomania, no merging for mergings sake. The point is that unlike corporations, which just get bigger, bee colonies know when the time has come to split up into smaller colonies which can grow value faster. What the bees are telling us is that the corporate world has got it all wrong.David Lascelles, Co-director of The Centre for the Study of Financial Innovation [UK]


The Industrial Revolution was about scale: vast factory complexes, skyscrapers and railway grids concentrating power in the hands of rulers of large territories: not only responsible rulers such as Bismarck and Disraeli, but Hitler and Stalin too. But the post-Industrial Revolution empowers any one with a cellular phone and a bag of explosives. Americas military superiority guarantees that such new adversaries will not fight according to our notions of fairness: they will come at us by surprise, asymmetrically, at our weakest points. Robert Kaplan, Warrior Politics


TP on Acquisitions1. Big + Big = Disaster. (Statistically.) (There are exceptions; e.g., Citigroup.)2. Big (GE, Cisco, Omnicom) acquires small/specialist = Good if you can retain Top Talent.3. Odds on achieving projected synergies among Mixed Big cultures: 10%.4. Max Scale Advantages are achieved at a smaller size than imagined.5. Attacked by Big, Mediocre Medium marries Mediocre Medium to bulk up. Result: Big Mediocrity or worse.6. Any sizeif Great & Focusedcan win, locally or globally.7. Increasingly, Alliances deliver more value than mergers and clearly abet flexibility.


The [New] Ge WayDYB.com


Change the rules before somebody else does.Ralph Seferian, VP, Oracle


Most of our predictions are based on very linear thinking. Thats why they will most likely be wrong.Vinod Khosla, in GIGATRENDS, Wired 04.01


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


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


RM: A lot of companies in the Valley fail.RN: Maybe not enough fail.RM: What do you mean by that?RN: Whenever you fail, it means youre trying new things.Source: Fast Company


The Silicon Valley of today is built less atop the spires of earlier triumphs than upon the rubble of earlier debacles.Newsweek/ Paul Saffo (03.02)


... natural selection is death. ... Without huge amounts of death, organisms do not change over time. ... Death is the mother of structure. ... It took four billion years of death ... To invent the human mind ... The Cobra Event


Silicon Valley Success [Failure?] SecretsPursuit of risk: 4 of 20 in V.C. portfolio go bust; 6 lose money; 6 do okay; 3 do well; 1 hits the jackpotSource: The Economist


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.


Organize for performance & customer satisfaction.Disorganize for renewal & innovation.


Rose gardeners face a choice every spring: how to prune our roses. The long-term fate of a rose garden depends on this decision. If you want to have the largest and most glorious roses of the neighborhood, you will prune hard. You will reduce each rose plant to a maximum of three stems. This represents a policy of low tolerance and tight control. You force the plant to make the maximum use of its available resources, by putting them into the the roses core business. However, if this is an unlucky year [late frost, deer, green-fly invasion], you may lose the main stems or the whole plant! Pruning hard is a dangerous policy in an unpredictable environment. Thus, if you are in a spot where you know nature may play tricks on you, you may opt for a policy of high tolerance. You will leave more stems on the plant. You will never have the biggest roses, but you have a much-enhanced chance of having roses every year. You will achieve a gradual renewal of the plant. In short, tolerant pruning achieves two ends: (1) It makes it easier to cope with unexpected environmental changes.(2) It leads to a continuous restructuring of the plant. The policy of tolerance admittedly wastes resourcesthe extra buds drain away nutrients from the main stem. But in an unpredictable environment, this policy of tolerance makes the rose healthier. Tolerance of internal weakness, ironically, allows the rose to be stronger in the long run.Arie De Geus, The Living Company


Japans Science Gap *Rice farming culture: uniqueness suppressed. Govt control of R & D. Promotion based on seniority. Consensus vs. debate. (U.S.: friends can be mortal enemies.) Bias for C.I. vs. bold leaps. Lack of competition and critical evaluation (peer review). Syukuro Manabe: What we need to create is job insecurity rather than security to make people compete more.*Hideki Shirakawa, Nobel laureate, chemistry


December 2000: Swiss House for Advanced Research & Education. Cambridge, Massachusetts. Xavier Comtesse: You never hear a Swiss say, I want to change the world. We need to take more risks.


The Word(s) on Vitality: Gary HamelSell By [jettison old crap]Spin Out [support entrepreneurs]Spin In [buy young firms]


No Wiggle Room!Incrementalism is innovations worst enemy. Nicholas Negroponte


Just Say No I dont intend to be known as the King of the Tinkerers. CEO, large financial services company


Perfection is achieved only by institutions on the point of collapse. C. Northcote Parkinson


2A. Yo, Jim . Or:The Case for Technicolor!


intrepid, unprincipled, reckless, predatory, with boundless ambition, civilized in externals but a savage at heart.


Herman Melville on JPJ: intrepid, unprincipled, reckless, predatory, with boundless ambition, civilized in externals but a savage at heart.from Evan Thomas, John Paul Jones: Sailor, Hero, Father of the American Navy


Huh?Humility: The Surprise Factor in Leadership bosses with Gung-ho Qualities and Charisma May Be Out of Fashion Headline/FT/re JCollins/10.03


Jim & Tom. Joined at the hip. Not.


I. Good to GreatII. Built to LastIII. Quiet, Humble Leaders


I. Good to GreatII. Built to LastIII. Quiet, Humble Leaders


Good to Great: Fannie Mae Kroger Walgreens Philip Morris Pitney Bowes Abbott Kimberly-Clark Wells Fargo


Good to Great: Fannie Mae Kroger Walgreens Philip Morris Pitney Bowes Abbott Kimberly-Clark Wells Fargo


Good to Great: Fannie Mae and Freddie Mac receive as much as $164 billion in implicit federal subsidies but have done little to increase home ownership or reduce the cost of home loans, according to a draft study by the Federal Reserve. New York Times/12.23.03 (Average rate reduction is 7 basis points, or .07%)


Great Companies SETTHEAGENDA. (Period.)


AGENDA SETTERS: Set the Table/ Pioneers/ Questors/ AdventurersUS Steel Ford Macys Sears Litton Industries ITT The Gap Limited Wal*Mart P&G 3M Intel IBM Apple Nokia Cisco Dell MCI Sun Oracle Microsoft Enron Schwab GE Southwest Laker People Express Ogilvy Chiat/Day Virgin eBay Amazon Sony BMW CNN


T & B: Atari, DEC, WANG?J vs. T: HP/Carly F?


I. Good to GreatII. Built to LastIII. Quiet, Humble Leaders


Built to Last v. Built to FlipThe problem with Built to Last is that its 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


Warren Bennis & Patricia Ward Biederman/ Organizing Genius:Great Groups Dont Last Very Long!


W.A. Mozart 1756 1791HE CHANGED THE WORLD AND ENRICHED HUMANITY


We are in abrawl with no rules.Paul Allaire


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


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 flourishand 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 apocalypsethe transition from a state of continuity to state of discontinuityhas the same suddenness [as the trauma that beset civilization in 1000 A.D.] Richard Foster & Sarah Kaplan, Creative Destruction (The McKinsey Quarterly)


The corporation as we know it, which is now 120 years old, isnot likely to survive the next 25 years.Legally and financially, yes, but not structurally and economically.Peter Drucker, Business 2.0


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 Nordstrm and Jonas Ridderstrle,Funky Business


Jane Jacobs:Exuberant Varietyvs. the Great Blight of Dullness. F.A. Hayek:Spontaneous Discovery Process.Joseph Schumpeter: theGales of Creative Destruction.


I. Good to GreatII. Built to LastIII. Quiet, Humble Leaders


Huh?Quiet, workmanlike, stoic leaders bring about the big transformations.--JC


Huh?Humility: The Surprise Factor in Leadership bosses with Gung-ho Qualities and Charisma May Be Out of Fashion Headline/FT/re JCollins/10.03 (TP: scribble: Nelson, Wellington, Montgomery, Disraeli, Churchill, Thatcher)


WellingtonNelsonDisraeliChurchillMontgomeryThatcher


Humble Pastels?T. Paine/P. Henry/A. Hamilton/T. Jefferson/B. FranklinA. Lincoln/U.S. Grant/W.T. ShermanTR/FDR/LBJ/RR/JFKPatton/Monty/HalseyM.L. King/C. de Gaulle/M. Gandhi/W. ChurchillPicasso/Mozart/Copernicus/Newton/Einstein/Djarassi/Watson H. Clinton/G. Steinem/I. Gandhi/G. Mieir/M. Thatcher E. Shockley/A. Grove/J. Welch/L. Gerstner/L. Ellison/B. Gates/S. Jobs/S. McNealy/T. Turner/R. Murdoch/W. Wriston A. Carnegie/J.P. Morgan/H. Ford/S. Honda/J.D. Rockefeller/T.A. Edison Rummy/Norm/Henry/Wolfie Elizabeth Cady Stanton/Susan B. Anthony/Martha Cary Thomas/Carrie Chapman Catt/Alice Paul/Anna Elizabeth Dickinson/Arabella Babb Mansfield/Margaret Sanger


You cant behave in a calm, rational manner. Youve got to be out there on the lunatic fringe. Jack Welch, on GEs quality program


Roosevelts duplicity, Churchills self-absorption We are all worms. But I do believe that I am a glow-worm. (WSC) Imperial and bold [WSC and TR] arrogance and instability rough, sarcastic, bullyingSource: Jon Meacham, Franklin and Winston, et al.


a vainglorious self-promoter spoiling for a fightArthur Koestler on Galileo


Audie Murphy was the most decorated soldier in WW2. He won every medal we had to offer, plus 5 presented by Belgium and France. There was one common medal he never won


the Good Conduct medal.


Men with no vices have very few virtues.A. Lincoln


Jim Collins vs. Michael Maccobyquiet, workmanlike, stoicvs. larger-than-life leaders/ egoists, charmers, risk-takers with big visions: Carnegie, Rockefeller, Edison, Ford, Welch, Jobs, Gates


In Toms world its always better to try a swan dive and deliver a colossal belly flop than to step timidly off the board while holding your nose. Fast Company /October2003


The Re-imagineers Credo or, Pity the Poor Brown*Technicolor Times demand Technicolor Leaders and Boards who recruit Technicolor People who are sent on Technicolor Quests to execute Technicolor (WOW!) Projects in partnership with Technicolor Customers and Technicolor Suppliers all of whom are in pursuit of Technicolor Goals and Aspirations fit for Technicolor Times.*WSC


In Italy for 30 years under the Borgias they had warfare, terror, murder, bloodshedand produced Michelangelo, da Vinci and the Renaissance. In Switzerland they had brotherly love, 500 years of democracy and peace, and what did they producethe cuckoo clock.Orson Welles, as Harry Lime, in The Third Man


II. NEW BUSINESS. NEW TECH.


3. IS/ IT/ Web:On the Bus or Off the Bus.


E-commerce is happening the way all the hype said it would. Internet deployment is happening. Broadband is happening. Everything we ever said about the Internet is happening. And it is very, very early. We cant even glimpse ITs potential in changing the way people work and live. Andy Grove (BusinessWeek/August 2003)


100square feet


Dells OptiPlex FacilityBig Job: 6 to 8 hours.(80,000 per day)Parts Inventory:100square feet.


Invisible Supplier Has Penneys Shirts All Buttoned Up: From Hong Kong, It Tracks Sales, Restocks Shelves, Ships Right to the Store.Headline, Wall Street Journal (09.11.03)


Our entire facility is digital. No paper, no film, no medical records. Nothing. And its all integratedfrom the lab to X-ray to records to physician order entry. Patients dont have to wait for anything. The information from the physicians office is in registration and vice versa. The referring physician is immediately sent an email telling him his patient has shown up. Its wireless in-house. We have 800 notebook computers that are wireless. Physicians can walk around with a computer thats pre-programmed. If the physician wants, well go out and wire their house so they can sit on the couch and connect to the network. They can review a chart from 100 miles away. David Veillette, CEO, Indiana Heart Hospital (HealthLeaders/12.2002)


Supply Chain 2000:When Joe Employee at Company X launches his browser, hes taken to Company Xs personalized home page. He can interact with the entire scope of Company Xs world customers, other employees, distributors, suppliers, manufacturers, consultants. The browser that is, the portal resembles a My Yahoo for Company X and hooks into every network associated with Company X. The real trick is that Joe Employee, business partners and customers dont have to be in the office. They can log on from a cell phone, Palm Pilot, pager or home office system.Red Herring (09.2000)


Dawn Meyerreicks, CTO of the Defense Information Systems Agency, made one of the most fateful military calls of the 21st century. After 9/11 her office quickly leased all the available transponders covering Central Asia. The implications should change everything about U.S. military thinking in the years ahead. The U.S. Air Force had kicked off its fight against the Taliban with an ineffective bombing campaign, and Washington was anguishing over whether to send in a few Army divisions. Donald Rumsfeld told Gen. Tommy Franks to give the initiative to 250 Special Forces already on the ground. They used satellite phones, Predator surveillance drones, and GPS- and laser-based targeting systems to make the air strikes brutally effective.In effect, they Napsterized the battlefield by cutting out the middlemen (much of the militarys command and control) and working directly with the real players. The data came in so fast that HQ revised operating procedures to allow intelligence analysts and attack planners to work directly together. Their favorite tool, incidentally, was instant messaging over a secure network.Ned Desmond/Broadbands New Killer App/Business 2.0/ OCT2002


The mechanical speed of combat vehicles has not increased since Rommels day, so the difference is all in the operational speed, faster communications and faster decisions.Edward Luttwak, on the unprecedented pace of the move toward Baghdad


The Real News: X1,000,000TowTruckNet.com


e-piphanyepicurious.com


eRevolution40,000,000Americans (1 of 2 singles/40% of American adults) went to an online matchmaking site last month (USN&WR/09.29.03)


flash mobs (!)


Open source is doing for mass innovation what the assembly line did for mass production. Get ready for the era when collaboration replaces the corporation. Thomas Goetz/ Wired/11.2003 (Current methods are not fast enough, not ambitious enough, or dont take advantage of our collective creative potential.)


MIT Everywhere: EVERY LECTURE, EVERY LECTURE, EVERY QUIZ, ALL ONLINE, FOR FREE. MEET THE GLOBAL GEEKS GETTING AN MIT EDUCATION, OPEN SOURCE-STYLE.Headline/Wired/09.03


A Big Electronics Show, the Buzz Is All About Connections headline, New York Times/ 01.13.2003/ Consumer Electronics Show


m-On or Out of the LoopManagers in Finland always keep their phones on. Customers expect fast reactions. And if you cant reach a superior, you make many decisions yourself. Managers who want to influence decisions of subordinates must keep their phones open.Risto Linturi, Finnish m-guru, in Howard Rheingolds Smart Mobs


Impact No. 1/ Logistics & Distribution: Wal*Mart Dell Amazon.com Autobytel.com FedEx UPS Ryder Cisco Etc. Etc. Ad Infinitum.


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


WebWorld = EverythingWeb as a way to run your businesss innardsWeb as connector for your entire supply-demand chainWebas spiders web which re-conceives the industryWeb/B2B as ultimate wake-up call to commodity producersWeb 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 entre, at any size, to Worlds Best at Everything as next door neighbor


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


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


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


Read It Closely:We dont sell insurance anymore.Wesell speed.Peter Lewis, Progressive


The New Infantry Battalion/New York Times/12.01.2002Pentagons Urgent Search for Speed. 270 soldiers (1/3rd normal complement); 140 robotic off-road armored trucks. Every soldier is a sensor. Revolutionary capabilities. Find-to-hit: 45 minutes to 15 minutes in just one year.


Theres no use trying, said Alice. One cant believe impossible things. I daresay you havent had much practice, said the Queen. When I was your age, I always did it for half an hour a day. Why, sometimes Ive believed as many as six impossible things before breakfast.Lewis Carroll


Inet allows you to dream dreams you could never have dreamed before!


Supposejust supposethat the Web is a new world were just beginning to inhabit. Were like the earlier European settlers in the United States, living on the edge of the forest. We dont know whats there and we dont know exactly what we need to do to find out: Do we pack mountain climbing gear, desert wear, canoes, or all three? Of course while the settlers may not have known what the geography of the New World was going to be, they at least knew that there was a geography. The Web, on the other hand, has no geography, no landscape. It has no distance. It has nothing natural in it. It has few rules of behavior and fewer lines of authority. Common sense doesnt hold here, and uncommon sense hasnt yet emerged. David Weinberger, Small Pieces Loosely Joined


Hyperlinks subvert hierarchy!The Cluetrain Manifesto


[ Words to Live By Hierarchy is an organization with its face toward the CEO and its ass toward the customer.Kjell Nordstrom and Jonas Ridderstrale,Funky Business]


Case: CRM


Anne Busquet/ American ExpressNot: Age of the InternetIs: Age of Customer Control


Amen!The Age of the NeverSatisfied CustomerRegis McKenna


The Web enables total transparency.People with access to relevant information are beginning to challenge any type of authority. The stupid, loyal and humble customer, employee, patient or citizen is dead.Kjell Nordstrm and Jonas Ridderstrle, Funky Business


Parents, doctors, stockbrokers, even military leaders are starting to lose the authority they once had. There are all these roles premised on access to privileged information. What we are witnessing is a collapse of that advantage, prestige and authority.Michael Lewis, next


A seismic shift is underway in healthcare. The Internet is delivering vast knowledge and new choices to consumersraising their expectations and, in many cases, handing them the controls. [Healthcare] consumers are driving radical, fundamental change.Deloitte Research, Winning the Loyalty of the eHealth Consumer


Welcome to D.I.Y. Nation:Changes in business processes will emphasize self service. Your costs as a business go down and perceivedservice goes up because customers are conducting it themselves.Ray Lane, Oracle


Psych 101: Strongest Force on Earth?My need to be in perceived control of my universe!


CRM has, almost universally, failed to live up to expectations.Butler Group (UK)


No! No! No!FT: The aim [of CRM] is to make customers feel as they did in the pre-electronic age when service was more personal.


CGE&Y (Paul Cole): Pleasant Transaction vs.Systemic Opportunity.Better job of what we do today vs.Re-think overall enterprise strategy.


Here We Go Again: Except Its Real This Time!Bank online: 24.3M (10.2002);2XY2000.Wells Fargo: 1/3rd; 3.3M;50% lower attrition rate; 50% higher growth in balances than off-line; more likely to cross-purchase; happier and stay with the bank much longer.Source: The Wall Street Journal/10.21.2002


4. The White Collar Revolution.


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


Steel: 75,000,000 tons in 82 to 102,000,000 tons in 02. 289, 000 steelworkers in 82 to 74,000 steelworkers in 02. Source: Fortune/11.24.03


The coefficient of friction associated with the grunge of business is amazing!Michael Schrage


A bureaucrat is an expensive microchip.Dan Sullivan, consultant and executive coach


IBMs Project eLiza!** Self-bootstrapping/ Artilects


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 Edenbrandts software: 738.*Only this time it matters!


Probable parole violations: Simple model (age, # of previous offenses, type of crime) beats M.D. shrinks. 100 studies: Statistical formulas > Human judgment. In virtually all cases, statistical thinking equaled or surpassed human judgment.Atul Gawande, Complications


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


Dont own nothin if you can help it. If you can, rent your shoes.F.G.


Organizations will still be critically important in the world, but as organizers, not employers! Charles Handy


The virtual corporation is research, development, design, marketing, financing, legal, and other headquarters functions with few or no manufacturing capabilities a company with a head but no body.Richard Rosecrance, The Rise of the Virtual State


Ford: Vehicle brand owner(design, engineer, and market, but not actually make)Source: The Company, John Micklethwait & Adrian Wooldridge


P&G Hires Out Employee Services to IBMBurlington Free Press/09.10.03/on IBMs 10-year, $400M contract with P&G (P&G farmed out IT to HP in May, Facilities to Jones Lang LaSalle in June)


WHERE IS YOUR JOB GOING: writing software, designing chips, reading MRIs, processing mortgages, preparing tax returns, managing computer networks (etc: GE Capitals 15,000 in Delhi), preparing PP slides for McKinsey (350 in Chennai), equity analysis of U.S. companies (Morgan Stanley) Source: Fortune/11.24.03


Know we know what all that fiber-optic cable is good for: BROADBANDS KILLER APP, IT TURNS OUT, IS INDIAFortune/11.24.03


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


GE is a champion of Indias scientists, technicians, business analysts and graduates, thousands of whom work at the U.S. conglomerates offshore service centers in India. They are the low-cost, high capability vanguard of GEs outsourcing to India. Along the way, GE has transformed its cost structure, enhanced its ability to provide technology services and incubated a rare world-class industry in India. FT/06.03.03


!!!!!!!!!ebookers PLC


III. NEW BUSINESS. NEW VALUE PROPOSITION.


5. The PSF Solution:The Professional Service Firm Model.


Sarah: Daddy, what do you do?Daddy: Im a cost center.


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


Every job done in W.C.W. is also done outside for profit!


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


TP to HRMAC:Youare the Rock Stars of the Age of Talent!


DD$21M


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


P.S.F.: SummaryH.V.A. Projects (100%)Pioneer ClientsWOW Work (see below)Hot Talent (see below)Adventurous cultureProprietary Point of View (Methodology)W.W.P.F. (100%)/Outside Clients (25%++) When: Now!


BMWs Designworks/USA: >50% from outside work


G.M. = The Recruitment and Development of Top Talent. [Period!]V.C. = Bets on Talent. Bets on Projects. [Period!]


Dept. Head I = Sports G.M.Dept. Head II = V.C.


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


Model PSF


(1) Translate ALL departmental activities into discrete W.W.P.F. Products.(2) 100% go on the Web.(3)Non-awesome are outsourced (75%??).(4)Remaining Centers of Excellence are retained & leveraged to the hilt!


Typically in a mortgage company or financial services company, risk management is an overhead, not a revenue center. Weve become more than that.We pay for ourselves, and we actually make money for the company.Frank Eichorn, Director of Credit Risk Data Management Group, Wells Fargo Home Mortgage (Source: sas.com)


What Do I Do First?One Minute Excellence!**Thomas Watson


Culture Change is not Corporate.Culture Change is not a Program.Culture Change does not take Years.Culture Change does not start Today.Culture Change starts Right Now!Culture Change Lives in the Moment!Culture Change is Entirely in Your Hands!


6. The Heart of the Value Added Revolution: PSFs Unbound/ The Solutions Imperative.


Base Case:The Sameness Trap


Companies have defined so much best practice that they are now more or less identical.Jesper Kunde, Unique Now ... or Never


While everything may be better, it is also increasingly the same.Paul Goldberger on retail, The Sameness of Things,The New York Times


When we did it right it was still pretty ordinary.Barry Gibbons onNightmare No. 1


Fight til Death!I thought, What a dreadful mission I have in life. Id love to get six-thousand restaurants up to spec, but when I do its Ho-hum. Its bugged me ever since. Its one of the great paradoxes of modern business. We all know distinction is key, and yet in the last twenty years we have created a plethora of ho-hum products and services. Just go fly in an airplane. It could be such an enlightening experience. Ho-hum. We swim in an ocean of ho-hum, and Im going to fight it. Im going to die fighting it. Barry Gibbons


Customers will try low cost providers because the Majors have not given them any clear reason not to.Leading Insurance Industry Analyst


The surplus society has a surplus of similar companies, employing similarpeople, with similar educational backgrounds, coming up with similarideas, producing similar things, with similarprices and similarquality.Kjell Nordstrm and Jonas Ridderstrle, Funky Business


Funky Business: To succeed we must stop being so goddamn normal. In a winner-takes-all world,normal = nothing.


We make over three new product announcements a day. Can you remember them? Our customers cant!Carly Fiorina


09.11.2000: HP bids $18,000,000,000for PricewaterhouseCoopersconsulting business!


These days, building the best server isnt enough. Thats the price of entry.Ann Livermore, Hewlett-Packard


Gerstners IBM: Systems Integrator of choice. Global Services: $35B.Pledge/99: Business Partner Charter. 72 strategic partners, aim for 200. Drop many in-house programs/products. (BW/12.01).


AT&T: President David Dorman: Back to long distance but with bundles of lucrative corporate services for the likes of Merrill Lynch, MasterCard, Hyatt. Consumer: Dump 25M subscribers (50%)hold on to high enders.Source: BW/05.20.2002


Is There a There There: The Ericsson Case1. 50+% Mfg to Solectron/Flextronics2. Substantial R&D to India3. Division for licensing technology4. JV with Sony on crown jewel handsets5. Net: a wireless specialist that depends on services more than manufacturing, on knowledge more than metalSource: BW/11.04.02


Customer Satisfaction to Customer SuccessWere getting better at [Six Sigma] every day. But we really need to think about the customers profitability. Are customers bottom lines really benefiting from what we provide them?Bob Nardelli, GE Power Systems


We want to be the air traffic controllers of electrons.Bob Nardelli, GE Power Systems


Keep In Mind: Customer Satisfactionversus Customer Success


Nardellis goal ($50B to $100B by 2005): move Home Depot beyond selling goods to selling home services. He wants to capture home improvement dollars wherever and however they are spent.E.g.: house calls (At-Home Service: $10B by 05?) pros shops (Pro Set) home project management (Project Management System a deeper selling relationship).Source: USA Today/06.14.2002


E.g. UTC/Otis + Carrier: boxes to integrated building systems


Leased AC: Units of Coolth


StaplesNew CEO Ron Sargent: 2X to $20B, in face of Wal*Mart (et al.) via delivery and other servicesSource: BusinessWeek/08.03


John Deere Landscapes: This is our future.


UPS wants to take over the sweet spot in the endless loop of goods, information and capital that all the packages [it moves] represent.ecompany.com/06.01 (E.g., UPS Logistics manages the logistics of 4.5M Ford vehicles, from 21 mfg. sites to 6,000 NA dealers)


SCS/Supply Chain Solutions: 750 locations; $2.5B; fastest growing division; 19 acquisitions, including a bankSource: Fast Company/02.04


UPS used to be a trucking company with technology. Now its a technology company with trucks.Forbes, upon naming UPS Company of the Year in Y2000


No longer are we only an insurance provider. Today, we also offer our customers the products and services that help them achieve their dreams, whether its financial security, buying a car, paying for home repairs, or even taking a dream vacation.Martin Feinstein, CEO, Farmers Group


VISIONS OF A BRAND-NAME OFFICE EMPIRE. Sam Zell is not a man plagued by self doubt. Mr. Zell controls public companies that own nearly 700 office buildings in the United States. Now Mr. Zell says he will transform the real estate market by turning those REITs into national brands. Mr. Zell believes [clients] will start to view those offices as something more than a commodity chosen chiefly by price and location. New York Times (12.16.2001)


Architecture is becoming a commodity. Winners will be Turnkey Facilities Management providers.SMPS Exec


We are a real estate facilities consulting organization, not just an interior design firm.Jean Bellas, founder, SPACE (from SMPS Marketer)


Omnicom: 60% (of $7B) from marketing services


And the Winners Are Televisions 12%Cable TV service +5%Toys -10%Child care +5%Photo equipment -7%Photographers fees +3%Sports Equipment -2%Admission to sporting event +3%New car -2%Car repair +3%Dishes & flatware -1%Eating out +2%Gardening supplies -0.1%Gardening services +2%Source: WSJ/05.16.03


IBM/Q3/10.15.03/Rev: +5%Services/Consulting: +11%Software: +5%Hardware: -5%PCs: -2%Technology/Chips: -33%


FEES! FEES!FEES!Cover Story, BW/09.29.03


Turnkey Nation/sHP Sun Farmers Group Northwestern Mutual Financial Network IBM AT&T Ericsson GE Power Systems GE Industrial Systems Ford Siemens Home Depot Deere UTC Otis UTC Carrier UPS Springs Industries RCI Equity Office Properties Omnicom India Singapore Etc.


Core Logic: (1) 108X5 to 8X1/ eLiza/ 100sf. (2) Dept. to PSF/ WWPF. (3) V.A. via PSFs Unbound/ Solutions/ Customer Success.


6A. The Solutions25.**NO MORE SILOS. NO MORE STOVEPIPES. (DAMN IT.)


1. Its the (OUR!) organization, stupid!2. Friction free! 3. No STOVEPIPES!4. Stovepiping is a F.O.Firing Offense.5. ALL on the web! (ALL = ALL.)6. Open access!6. Project Managers rule! (E.g.: Control the purse strings and evals.)7. VALUE-ADDED RULES! (Services Rule.) (Experiences Rule.) (Brand Rules.)8. SOLUTIONS RULE! (We sell SOLUTIONS. Period. We sell PRODUCTIVITY & PROFITABILITY. Period.)9. Solutions = Our culture. 10. Partner with B.I.C. (Best-In-Class). Period.


The organizations we created have become tyrants. They have taken control, holding us fettered, creating barriers that hinder rather than help our businesses. The lines that we drew on our neat organizational diagrams have turned into walls that no one can scale or penetrate or even peer over.Frank Lekanne Deprez & Ren Tissen, Zero Space: Moving Beyond Organizational Limits.


Once devised in Riyadh, the tasking order took hours to get to the Navys six aircraft carriersbecause the Navy had failed years earlier to procure the proper communications gear that would have connected the Navy with its Air Force counterparts. To compensate for the lack of communications capability, the Navy was forced to fly a daily cargo mission from the Persian Gulf and Red Sea to Riyadh in order to pick up a computer printout of the air mission tasking order, then fly back to the carriers, run photocopy machines at full tilt, and distribute the documents to the air wing squadrons that were planning the next strike. Bill Owens, Lifting the Fog of War


Duh???*: Weve come up with a solution. Weve begun to create a form of communications that is much better than we had before, and thats allowed us to gather better data. Weve finally realized that we have an interplay with other hospitals and with pre-hospital.Dr. Ben Honigman, ER, U. Colorado Hospital, on diverts (Denver Post/05.05.02)*Internet + Data + Open data exchange + Barrier busting


12. All functions contribute equallyIS, HR, Finance, Purchasing, Engineering, Logistics, Sales, Etc.13. Project Management can come from any function.14. WE ARE ALL IN SALES. PERIOD.15. We all invest in wiring the customer organization.16. WE ALL LIVE THE BRAND. (Brand = Solutions. That MAKE MONEY FOR OUR CUSTOMER- PARTNER.)17. We use the word PARTNER until we all want to barf!18. We NEVER BLAME other parts of our organization for screw-ups.19. WE AIM TO REINVENT THIS INDUSTRY!20. We hate the word-idea COMMODITY.


21. We believe in High tech, High touch.22. We are DREAMERS.23. We deliver . (PROFITS.) (CUSTOMER SUCCESS.)24. If we play the SOLUTIONS GAME brilliantly, no one can touch us!25. Our TEAM needs 100% I.C.s (Imaginative Contributors). This is the ULTIMATE All Hands affair!


KEY WORDS: Partners with our Customers in creating Memorable, Value-addedSolutions/ Successes/ Experiences.WHICH REQUIRES: Total Enterprise Responsiveness beyond functional walls.


IV. NEW BUSINESS. NEW BRAND.


7. A World of Scintillating Experiences.


Experiencesare as distinct from services as services are from goods.Joseph Pine & James Gilmore, The Experience Economy: Work Is Theatre & Every Business a Stage


Club Med is more than just a resort; its a means of rediscovering oneself, of inventing an entirely new me. Source: Jean-Marie Dru, Disruption


The [Starbucks] Fix Is on We have identified a third place. And I really believe that sets us apart. The third place is that place thats not work or home. Its the place our customers come for refuge.Nancy Orsolini, District Manager


Guinness as a brand is all about community. Its about bringing people together and sharing stories.Ralph Ardill, Imagination, in re Guinness Storehouse


Experience: Rebel Lifestyle!What we sell is the ability for a 43-year-old accountant to dress in black leather, ride through small towns and have people be afraid of him.Harley exec, quoted in Results-Based Leadership


WHAT CAN BROWN DO FOR YOU?


When Pete Rozelle ran the league, it was a football business and a good one. Now its truly an entertainment business.Paul Much, Investment Advisor


The Experience LadderExperiences ServicesGoods Raw Materials


1940: Cake from flour, sugar (raw materials economy): $1.001955: Cake from Cake mix (goods economy): $2.001970: Bakery-made cake (service economy): $10.001990: Party @ Chuck E. Cheese (experience economy) $100.00


Message:Experience is the Last 80%P.S.: Experience applies to allwork!


1940: Cake from flour, sugar (raw materials economy): $1.001955: Cake from Cake mix (goods economy): $2.001970: Bakery-made cake (service economy): $10.001990: Party @ Chuck E. Cheese (experienceeconomy) $100.00


Bob Lutz:I see us as being in the art business. Art, entertainment and mobile sculpture, which, coincidentally, also happens to provide transportation.Source: NYT 10.19.01


Lexus sells its cars as containers for our sound systems. Its marvelous.Sidney Harman/ Harman International


Its All About EXPERIENCES: Trapper to Wildlife Damage-control ProfessionalTrapper: <$20 per beaver pelt.WDCP: $150/problem beaver; $750-$1,000 for flood-control piping so that beavers can stay.Source: WSJ/05.21.2002


Moving CompaniesWSJ/08.2003: In Texas, Theyll fill your empty fridge with brie and wine. An outfit in New York promises quick high-speed Internet hookup. And when Allied Van Lines finishes unloading your couch, theyll have a feng shui expert figure out the right spot.


Duet Whirlpool washing machine to fabric care system white goods: a sea of undifferentiated boxes $400 to $1,300 the Ferrari of washing machines consumer: They are our little mechanical buddies. They have personality. When they are running efficiently, our lives are running efficiently. They are part of my family. machine as aesthetic showpiece laundry room to family studio / designer laundry room (complements Sub-Zero refrigerator and home-theater center)Source: New York Times Magazine/01.11.2004


LAN Installation Co.toGeek Squad(2% to 30%/Minn.)


From Service to Cause7X. 730A-800P. F12A.**Plus: WOW Department Kill a Stupid Rule contests, etc. 2001R: 34%; P: 29%; 90-00: 2,048%. Commerce Bank/NJ ($10B). Source: FC05.02.


Car designers need to create astory. Every car provides an opportunity to create anadventure. The Prowler makes yousmile. Why? Because its focused. It has aplot, a reason for being, apassion.Freeman Thomas, co-designer VW Beetle; designer Audi TT


Hmmmm(?): Only Words StoryAdventureSmile FocusPlotPassion


First Step (?!): Hire a theater director, as a consultant or FTE!


Words! Magician of Magical Moments Maestro of Moments of Truth Recruiter of Raving Fans Impresario of First Impressions Wizard of WOW Captain of Brilliant Comebacks Director of Electronic Customer Experiences Conductor of Customer Intimacy King of Customer Community Queen of Customer Retention CEO of Ownership Experience Managing Director of After-sales Experience


Experience Cirque du Soleil


DO YOU MEASURE UP?**If not, why not?


Cirque du Soleil: Talent(12 full-time scouts,database of 20,000).R&D(40% of profits; 2X avg corp).Controls(shows are profit centers; partners like Disney offset costs; $100M on $500M). Scarcity builds buzz/brand(1 new show per year. People tell me were leaving money on the table by not duplicating our shows. Theyre right.Daniel Lamarre, president).Source: The Phantasmagoria Factory/Business 2.0/1-2.2004


Most executives have no idea how to add value to a market in the metaphysical world. But that is what the market will cry out for in the future. There is no lack of physical products to choose between.Jesper Kunde, Unique Now ... or Never [on the excellence of Nokia, Nike, Lego, Virgin et al.]


Extraction & Goods: Male dominanceServices & Experiences: Female dominance


Women dont buy brands. They join them.EVEolution


The Experience LadderExperiences ServicesGoods Raw Materials


<TGWvs.>TGR


Dell + IBM + Harley Davidson* = Magic!*Frictionless throughout Supply-chain + EncompassingSolutions + Scintillating Experience


8. Experiences+: Embracing the Dream Business.


A shipping clerk earning $25,000 a year treats herself to silk pajamas at Victorias Secret. A dual-income couple earning $125,000 orders a $4,000 Viking range for their townhouse even though the developer offered to throw in a perfectly serviceable generic range at no extra charge. These purchases reflect an important worldwide behavioral shift. Consumers today are willing to pay a significant premium for goods and services that are emotionally important to them and that deliver the perceived values of quality, performance and engagement.But in other categories that arent emotionally important, they become bargain hunters: a passionate Mercedes driver will shop at Target every weekend; a construction worker who splurges on a $3,000 set of Callaway golf clubs will buy store brand groceries. Trading Up: The New American Luxury/Michael Silverstein & Neil Fiske


DREAM: A dream is a complete moment in the life of a client. Important experiences that tempt the client to commit substantial resources. The essence of the desires of the consumer. The opportunity to help clients become what they want to be. Gian Luigi Longinotti-Buitoni


Common Products Dream ProductsMaxwell House StarbucksBVD Victorias SecretPayless FerragamoHyundai FerrariSuzuki Harley-DavidsonAtlantic City AcapulcoNew Jersey CaliforniaCarter KennedyConners PeleCNN MillionaireSource: Gian Luigi Longinotti-Buitoni


The marketing of Dreams (Dreamketing)Dreamketing: Touching the clients dreams.Dreamketing: The art of telling stories and entertaining.Dreamketing: Promote the dream, not the product.Dreamketing: Build the brand around the main dream.Dreamketing: Build the buzz, the hype, the cult.Source: Gian Luigi Longinotti-Buitoni


Building the Creative OrganizationChoose a creator: The cultural leader who gives the company an aesthetic point of view.Hire eclectically: Hire collaborators with different cultures and past histories in order to balance rigor with emotion.Prepare vertically: Develop a rigorous understanding of the product and the client.Develop horizontally: Promote curiosity in unrelated disciplines.Lead emotionally: Engender passionate dedication through vision and freedom.Build for the long haul: Creativity requires a lifetime commitment.Source: Gian Luigi Longinotti-Buitoni


Constantly Magnify Perceived ValueMaximize your value-added by fulfilling the dreams of your clients.Only invest in what is valuable for your client.Dont let the short-term results weaken the long-term value of your brand.Balance rigorous control of the financial endeavor with the emotional management of your brand.Build a financial structure that allows risk-taking: NO RISKSNO DREAMS.Establish long-term price power in order to avoid the trap of the commodity product.Source: Gian Luigi Longinotti-Buitoni


(Revised)Experience LadderDreams Come True Awesome ExperiencesSolutionsServicesGoodsRaw Materials


Safe, On-time and ...We defined personality as a market niche. We seek to amaze, surprise, entertain. Herb Kelleher, SWA / LUV


Furniture vs. DreamsWe do not sell furniture at Domain. We sell dreams. This is accomplished by addressing the half-formed needs in our customers heads. By uncovering these needs, we, in essence, fill in the blanks. We convert needs into dreams. Sales are the inevitable result. Judy George, Domain Home Fashions


HORCHOW.COMFurniture. Accessories. Dreams.


The Ritz-Carlton experience enlivens the senses, instills well-being, and fulfills even the unexpressed wishes and needs of our guests. from the Ritz-Carlton Credo


The sun is setting on the Information Societyeven before we have fully adjusted to its demands as individuals and as companies. We have lived as hunters and as farmers, we have worked in factories and now we live in an information-based society whose icon is the computer. We stand facing the fifth kind of society: the Dream Society. The Dream Society is emerging this very instantthe shape of the future is visible today. Right now is the time for decisionsbefore the major portion of consumer purchases are made for emotional, nonmaterialistic reasons. Future products will have to appeal to our hearts, not to our heads. Now is the time to add emotional value to products and services. Rolf Jensen/The Dream Society:How the Coming Shift from Information to Imagination Will Transform Your Business


In Denmark, eggs from free-range hens have conquered over 50 percent of the market. Consumers do not want hens to live their lives in small, confining cages. They are willing to pay 15 percent to 20 percent more for the story about animal ethics. This is classic Dream Society logic. Both kind of eggs are similar in quality, but consumers prefer eggs with the better story. After we debated the issue and stockpiled 50 other examples, the conclusion became evident: Stories and tales speak directly to the heart rather than the brain. After a century where society was marked by science and rationalism, the stories and values are returning to the scene.Rolf Jensen/The Dream Society: How the Coming Shift from Information to Imagination Will Transform Your Business


Person 1 is the rational, planning being, and Person 2 is the emotional and story-buying entity. The last century disowned and repressed Person 2a rejection that is not surprising in a technological era. Now Person 2 is back in townin the shops, on the Internet, in the companies, in politics, in economics, even science. Rolf Jensen/The Dream Society: How the Coming Shift from Information to Imagination Will Transform Your Business


Six Market Profiles1. Adventures for Sale2. The Market for Togetherness, Friendship and Love3. The Market for Care4. The Who-Am-I Market5. The Market for Peace of Mind6. The Market for CnvictionsRolf Jensen/The Dream Society: How the Coming Shift from Information to Imagination Will Transform Your Business


New Market RealitiesSelling Dreams: How to Make Any Product Irresistible, Gian Luigi Longinotti-BuitoniThe Dream Society: How the Coming Shift from Information to Imagination Will Transform Your Business, Rolf JensenTrading Up: The New American Luxury, Michael Silverstein & Neil Fiske


9. The [Mostly Ignored] Soul of Experiences: Design Rules!


Design Myths.


Unconventional [Design] MessagesNot about ... Lumpy Objects!Not about ... $79,000 objects


The I.D. [International Design] Forty*Airstream Alfred A. Knopf Apple Computer Amazon.com Bloomberg Caterpillar CNN DisneyFedEx Gillette IBM Martha Stewart New Balance Nickelodeon Patagonia The New York Yankees 3M Etc. * List No. 1, 1999


Unconventional [Design] MessagesNot about ... Lumpy Objects!Not about ... $79,000 objects


Design Transforms even the [Biggest] Corporations!TARGET the champion of Americas new design democracy (Time) Marketer of the Year 2000 (Advertising Age)


Lady Sensor, Mach3, and $70M on developing the OralB CrossAction toothbrush23 patents, including 6 for the packagingSource: www.ecompany.com [06.00]


Design2002LISTERINEs PocketPaks


Westins Heavenly Bed


Designs place in the universe.


And Tomorrow Fifteen years ago companies competed on price. Now its quality.Tomorrow its design.Robert Hayes


All Equal Except At Sony we assume that all products of our competitors have basically the same technology, price, performance and features.Design is the only thing that differentiates one product from another in the marketplace.Norio Ohga


Design is treated like a religion at BMW.Fortune


The new Beetle fails at most categories. The only thing it doesnt fail in is drop-dead charm.Jerry Hirshberg, Nissan Design International


Object of Desire!Every now and then, a designcomes along that radically changes the way we think about a particular object. Case in point: the iMac. Suddenly, a computer is no longer an anonymous box. It is a sculpture, an object of desire, something that you look at.Katherine McCoy & Michael McCoy, Illinois Institute of Technology


The good 10 percent of American product design comes out of big-idea companies that dont believe in talking to the customer. They're run by passionate maniacs who make everybodys life miserable until they get what they want.Bran Ferren, Applied Minds/Wired 1-2001


We dont have a good language to talk about this kind of thing. In most peoples vocabularies, design means veneer. But to me, nothing could be further from the meaning of design. Design is the fundamentalsoul of a man-made creation.Steve Jobs


Check Out the Language:Tomorrow its design Design is the only thing Design is religion ...Drop-dead charm Object of desire Passionate maniacs Fundamental soul


Bottom Line.


Design is WHAT & WHY I LOVE. LOVE.


I LOVEmy ZYLISS Garlic Peeler!


All Time No.1 (TP)Ziplocs


Design is WHY I GET MAD. MAD.


Wanted: THE DESIGNER OF MY RADIO SHACK PHONE. Major Reward!


Design is neverneutral.


Hypothesis:DESIGN is the principaldifference between love and hate!


THE BASE CASE: I am a design fanatic. Though not artistic, I love cool stuff. But it goes [much] further, far beyond the personal. Design has become a professional obsession. I SIMPLY BELIEVE THAT DESIGN PER SE IS THE PRINCIPAL REASON FOR EMOTIONAL ATTACHMENT [or detachment] RELATIVE TO A PRODUCT OR SERVICE OR EXPERIENCE. Design, as I see it, is arguably the #1 DETERMINANT of whether a product-service-experience stands out or doesnt. Furthermore, its another one of those things that damn few companies put consistently on the front burner.


Message (?????): Men cannot design for womens needs.


Perhaps the macho look can be interesting if you want to fight dinosaurs. But now to survive you need intelligence, not power and aggression. Modern intelligence means intuitionits female.Source: Philippe Starck, Harvard Design Magazine (Summer 1998)


Step No. 1:NOTEBOOK POWER![Start recording the awesome & the awful]


User STOP BLAMING YOURSELF!(Don Norman/Design of Everyday Things)


The Designers RingFor years I thought that Dante should have established a designers ring in his Hell. If any designers product raised a blister, caused a bruise, ripped a stocking, or caused any of the thousand things that frustrate us with the products we use, that designer would be assigned the designers ring in Hell and forced to use that product for all of eternity. James Pirki, designer and professor, Syracuse University


Sometimes I have episodes of wild fury in rental cars. Its not road rage. Its more like design rage.Susan Casey, www.ecompany.com


15 Leading Biz SchoolsDesign/Core: 0Design/Elective: 1Creativity/Core: 0Creativity/Elective: 4Innovation/Core: 0Innovation/Elective: 6Source: DMI/Summer 2002


9A. Design+ = Beautiful Systems.


Fred S.s mediocre thesis. Herb K.s napkin.


Great design = One-page business plan (Jim Horan)


The One-page Proposal: How to Get Your Business Pitch onto One Persuasive PagePatrick Riley (Why not one and a half? Why not two? Sorry, its one or nothing. Once the proposal extends past the first page, the battle is lost.)


There Are Lawyers and Then There Are Lawyers: John De Laney/ICMANYTHING TRULY IMPORTANT CAN BE BOILED DOWN TO 1/3RD PAGE.


K.I.S.S.: Gordon Bell (VAX daddy): 500/50. Chas. Wang (CA): Behind schedule? Cut least productive 25%.


Systems: Must have. Must hate. / Must design. Must un-design.


Mgt. Team includes EVP (S.O.U.B.)


Executive Vice President, Stomping Out Unnecessary Bullshit


First Steps: Beauty Contest!

  • Select one form/document: invoice, air bill, sick leave policy, customer returns-claim form.

    2. Rate the selected doc on a scale of 1 to 10 [1 = Bureaucratica Obscuranta/ Sucks; 10 = Work of Art] on four dimensions: Beauty. Grace. Clarity. Simplicity.

    3. Re-invent!

    4. Repeat, with a new selection, every 15 working days.


BeautifulAesthetic TriumphBreathtaking


WasDeposits may be made by a minor and withdrawals thereof may be made by a minor without the consent of a parent or guardian, neither of whom, in that capacity, shall have any right to attach or interfere in any manner with such deposits or withdrawals.


IsMinors may make deposits and withdrawals from their accounts without the consent or interference of a parent or guardian.


WasThis Grievance Procedure must be used if the nature of the complaint deals with the quality of services given to the Member, including complaints about waiting times, physician demeanor and behavior, or adequacy of facilities (as opposed to whether or not a particular service is a Covered service and what amount, if any, should be paid). Also, this Grievance Procedure will be applied under all circumstances to any Universal Healthcare supplemental products which the Member may have bought independently from this SeniorPlus plan. If the nature of the Members complaint deals with a Covered Service stated in this SeniorPlus or the level of payment associated with this plan, please refer to the Medicare Appeals procedure, stated in Section X.Source: Siegel & Gale


IsIf you have a complaint about quality of service received, waiting times, physician behavior, or the adequacy of medical facilities, please use our grievance process.lf you have a complaint about coverage or payment, please use the Medicare Appeals procedure (see Section X).Source: Siegel & Gale


10. It all adds up to THE BRAND.


The Heart of Branding


WHO ARE WE?


WHATS OUR STORY?


We are in the twilight of a society based on data. As information and intelligence become the domain of computers, society will place more value on the one human ability that cannot be automated: emotion. Imagination, myth, ritual - the language of emotion - will affect everything from our purchasing decisions to how we work with others.Companies will thrive on the basis of their stories and myths.Companies will need to understand that their products are less important than their stories.Rolf Jensen, Copenhagen Institute for Future Studies


Apple opposes, IBM solves, Nike exhorts, Virgin enlightens, Sony dreams, Benetton protests. Brands are not nouns but verbs.Source: Jean-Marie Dru, Disruption


Message: ALL BUSINESS MODELS ARE IN FACT BRAND STATEMENTS!


DO THE HOUSEKEEPERS & CLERKS BUY IT?[ARE YOU V-E-R-Y SURE?]


EXACTLY HOW ARE WE DRAMATICALLYDIFFERENT?


1st Law Mktg Physics: OVERTBENEFIT(Focus: 1 or 2 > 3 or 4/One Great Thing. Source #1: Personal Passion)2ND Law: REALREASONTOBELIEVE(Stand & Deliver!)3RD Law: DRAMATICDIFFERENCE(Execs Dont Get It: See the next slide.)Source: Jump Start Your Business Brain, Doug Hall


2 Questions:How likely are you to purchase this new product or service?(95% to 100% weighting by execs)How unique is this new product or service?(0% to 5%*)*No exceptions in 20 years Doug Hall, Jump Start Your Business Brain


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


A great company is defined by the fact that it is not compared to its peers.Phil Purcell, Morgan Stanley


Brand = You Must Care!Success means never letting the competition define you. Instead you have to define yourself based on a point of view you care deeply about.Tom Chappell, Toms of Maine


WHY DOES IT MATTER TO THE CLIENT?


EXACTLY HOW DO I PASSIONATELYCONVEY THAT DRAMATIC DIFFERENCE TO THE CLIENT ?


Brand Promise Exercise:(1) Who Are WE?(poem/novella/song, then 25 words.) (2) List three ways in which we are UNIQUE to our Clients. (3) Who are THEY(competitors)? (ID, 25 words.) (4) List 3 distinct us/them differences. (5) Try results on your teammates. (6) Try em on a friendly Client. (7) Try em on a skeptical Client!


Rules of Radical MarketingLove + Respect Your Customers!Hire only Passionate Missionaries!Create a Community of Customers!Celebrate Craziness!Be insanely True to the Brand!Sam Hill & Glenn Rifkin, Radical Marketing(e.g., Harley, Virgin, The Dead, HBS, NBA)


Branding: Is-Is Not TableTNT is not: TNT is: TNT is not:Juvenile Contemporary Old-fashionedMindless Meaningful ElitistPredictable Suspenseful DullFrivolous Exciting SlowSuperficial Powerful Self-important


Message Is Not >> Is


Salt is salt is salt. Right? Not when it comes in a bluebox with a picture of a little girl carrying an umbrella. Morton International continues to dominate the U.S. salt market even though it charges more for a product that is demonstrably the same as many other products on the shelf.Tom Asaker, Humanfactor Marketing


What Can [Cant] Be Branded?Branding is not a problem if you have the right mentality. You go to your team and you pin up a $200 Swiss Army Watch. Competing in the ridiculously crowded sub-$200 watch market, they made it into a brand name, named after the most irrelevant and useless thing in history [the Swiss Army]. And you say, Gang, if they can do it, we can do it. Barry Gibbons


V. NEW BUSINESS. NEW MARKETS.


11. Trends Worth Trillion$$$ I:Women Roar.


?????????Home Furnishings 94%Vacations 92% (Adventure Travel 70%/ $55B travel equipment)Houses 91%D.I.Y. (major home projects) 80%Consumer Electronics 51%Cars 68% (90%)Allconsumerpurchases 83%Bank Account 89%Household investment decisions 67%Small business loans 70%Health Care 80%


????80%


Riding Lawnmowers


2/3rds working women/50+% working wives > 50%80% checks61% bills53% stock (mutual fund boom)43% > $500K95% financial decisions/ 29% single handed


1970-1998Mens median income: +0.6%Womens median income: + 63%Source: Martha Barletta, Marketing to Women


$5+T > Japan10M/28M/$3.6T> Germany


Business Purchasing PowerPurchasing mgrs. & agents: 51%HR: >>50%Admin officers: >50%Source: Martha Barletta, Marketing to Women


Women-owned Bus.U.S. employees > F500 employees worldwideSource: Martha Barletta, Marketing to Women


New golfers 37%Basketball 13.5M1 in 27 (70) 1 in 3 (96)


1874?


1874 Jock Strap1977 Jogbra1977 ... 25K1996 42M


Yeow!1970 1%2002 50%


91% women: ADVERTISERS DONT UNDERSTAND US. (58% ANNOYED.)Source: Greenfield Online for Arnolds Womens Insight Team (Martha Barletta, Marketing to Women)


Carol Gilligan/ In a Different VoiceMen: Get away from authority, familyWomen:ConnectMen: Self-orientedWomen:Other-orientedMen: RightsWomen:Responsibilities


Men: Individual perspective. Core unit is me. Pride in self-reliance.Women: Group perspective. Core unit is we. Pride in team accomplishment.Source: Martha Barletta, Marketing to Women


FemaleThink/ PopcornMen and women dont think the same way, dont communicate the same way, dont buy for the same reasons.He simply wants the transaction to take place. Shes interested in creating a relationship. Every place women go, they make connections.


Men seem like loose cannons. Men always move faster through a stores aisles. Men spend less time looking. They usually dont like asking where things are. Youll see a man move impatiently through a store to the section he wants, pick something up, and then, almost abruptly hes ready to buy. For a man, ignoring the price tag is almost a sign of virility.Paco Underhill, Why We Buy*(*Buy this book!)


Shopping: A Guys Nightmare or a Girls Dream Come True?Buy it and be gonevs.Hang out and enjoy the experienceSource: The Charleston [WV] Gazette/06.22.2002


How Many Gigs You Got, Man?Hard to believe Different criteria Every research study weve done indicates that women really care about the relationship with their vendor.Robin Sternbergh/ IBM


Women's View of Male SalespeopleTechnically knowledgeable; assertive; get to the point; pushy; condescending; insensitive to womens needs.Source: Judith Tingley, How to Sell to the Opposite Sex (Martha Barletta, Marketing to Women)


Women as Healthcare Decision Makers read vociferously want choices value convenience look for small signs of sensitivity (gowns that close)Source: Cheryl Stone, Rynne Marketing Group


Women and Healthcare Women are more dissatisfied Women are frustrated by the way they are treated and spoken to by physicians Women seek more information Women are more pressed for time Women make most healthcare decisions and purchasesSource: Patricia Braus, Marketing Health Care to Women


Women and Financial AdvisorsWomen want ... a plan to be listened to to read about it and think about itWomen do not want ... a high-pressure sales pitchSource: Kathleen Boyd, SVP, Wheat First Butcher Singer (now part of Wachovia Securities)


Read This:Barbara & Allan Peases Why Men Dont Listen & Women Cant Read Maps


It is obvious to a woman when another woman is upset, while a man generally has to physically witness tears or a temper tantrum or be slapped in the face before he even has a clue that anything is going on. Like most female mammals, women are equipped with far more finely tuned sensory skills than men. Barbara & Allan Pease, Why Men Dont Listen & Women Cant Read Maps


Resting State: 30%, 90%: A woman knows her childrens friends, hopes, dreams, romances, secret fears, what they are thinking, how they are feeling. Men are vaguely aware of some short people also living in the house.Barbara & Allan Pease, Why Men Dont Listen & Women Cant Read Maps


As a hunter, a man needed vision that would allow him to zero in on targets in the distance whereas a woman needed eyes to allow a wide arc of vision so that she could monitor any predators sneaking up on the nest. This is why modern men can find their way effortlessly to a distant pub, but can never find things in fridges, cupboards or drawers.Barbara & Allan Pease, Why Men Dont Listen & Women Cant Read Maps


Female hearing advantage contributes significantly to what is called womens intuition and is one of the reasons why a woman can read between the lines of what people say. Men, however, shouldnt despair. They are excellent at imitating animal sounds.Barbara & Allan Pease, Why Men Dont Listen & Women Cant Read Maps


SensesVision: Men, focused; Women, peripheral.Hearing: Womens discomfort level I/2 mens.Smell: Women >> Men.Touch: Most sensitive man < Least sensitive women.Source: Martha Barletta, Marketing to Women


Sensitivity to differences: Twice as many card stacks.More contextual, holistic.People powered: Age 3 days, baby girls 2X eye contact. Source: Martha Barletta, Marketing to Women


When a woman is upset, she talks emotionally to her friends; but an upset man rebuilds a motor or fixes a leaking tap.Barbara & Allan Pease, Why Men Dont Listen & Women Cant Read Maps


Stress* **Men: Fight or fleeWomen: Seek the company of friends*Source: UCLA, Female Response to Stress: Tend and Befriend, Not Fight or Flight/Psychological Review**90% of stress research: men


Women speak and hear a language of connection and intimacy, and men speak and hear a language of status and independence. Men communicate to obtain information, establish their status, and show independence. Women communicate to create relationships, encourage interaction, and exchange feelings.Judy Rosener, Americas Competitive Secret


The Hollywood scripts that men write tend to be direct and linear, while womens compositions have many conflicts, many climaxes, and many endings.Helen Fisher, The First Sex: The Natural Talents of Women and How They Are Changing the World


I only really understand myself, what Im really thinking and feeling, when Ive talked it over with my circle of female friends. When days go by without that connection, I feel like a radio playing in an empty room.Anna Quindlen


Women are more comfortable talking or thinking about people and relationships, while men prefer to contemplate things.research reported in the New York Times (08.10.2003)


Editorial/Men: Tables, rankings.*Editorial/Women: Narratives that cohere.**Redwood (UK)


Where the Girls Are: Theyre Online, Solving Puzzles and Making Up Characters in Narrative-driven Games Headline/WSJ/10.28


Initiate PurchaseMen: Study facts & features.Women: Ask lots of people for input.Source: Martha Barletta, Marketing to Women


Read This Book EVEolution: The Eight Truths of Marketing to WomenFaith Popcorn & Lys Marigold


EVEolution: Truth No. 1Connecting Your Female Consumers to Each Other Connects Them to Your Brand


The Connection Proclivity in women starts early. When asked, How was school today? a girl usually tells her mother every detail of what happened, while a boy might grunt, Fine. EVEolution


What If What if ExxonMobil or Shell dipped into their credit card database to help commuting women interview and make a choice of car pool partners?What if American Express made a concerted effort to connect up female empty-nesters through on-line and off-line programs, geared to help women re-enter the workforce with todays skills?EVEolution


The New New Jiffy LubeIn the male mold, Jiffy Lube wasgoing all out to deliver quick, efficient service. But, in the female mold, women were being turned off by the lets get it fixed fast, no conversation required experience.New JL: Control over her environment. Comfortin the service setting. Trust that her car is being serviced properly. Respectfor her intelligence and ability.EVEolution


Women dont buy brands. They join them.EVEolution


Purchasing PatternsWomen: Harder to convince; more loyal once convinced.Men: Snap decision; fickle.Source: Martha Barletta, Marketing to Women


2.6vs.21


Cents & Sensibility Our advisory sessions [with women] changed from a purely analytical, male approach to something that starts with the heart and ends with the figures.


Lowes Gets it. 1989: 13%/lumber shop 2002: >50%


War has broken out over your home-improvement dollar, and Lowes has superpower Home Depot on the defensive. Its not-so-secret ploy: Lure women.Forbes.com


Home Depot is still very much a guys chain. But women, according to Lowes research, initiate 80 percent of all home-improvement purchase decisions, especially the big ticket orders like kitchen cabinets, flooring and bathrooms. We focused on a customer nobody in home improvement has focused on. Dont get me wrong, but women are far more discriminating than men, says CEO Robert Tillman, 59, a Lowes lifer. Forbes.com


Womens Work: Do-it-yourself has become do-it-herself, and toolmakers are taking noticeHeadline/San Francisco Chronicle/08.03


Tomboy Tools. E.g.: smaller, lighter in weight. Tupperware party model.


Darcy Winslow is a leading figure in Nike Goddess, a companywide grassroots team whose goal is a once-and-for-all shift in how a high-testosterone outfit sells to, designs for, and communicates with women.Fast Company/08.2002