Tom Peters’ EXCELLENCE ! “THE WORKS” 1966-2015 Chapter TWO : EXCELLENCE 30 November 2015

1. Tom Peters’ EXCELLENCE! “THE WORKS” 1966-2015 Chapter TWO: EXCELLENCE 30 November 2015 (10+ years of presentation slides at tompeters.com)

2. Contents/“The Works”/1966-2015/EXCELLENCE! Chapter ONE: Execution/The “All-Important Last 95%” Chapter TWO: EXCELLENCE (Or Why Bother at All?) Chapter THREE: 34 BFOs/Blinding Flashes of the Obvious Chapter FOUR: People (REALLY!) First Chapter FIVE: Tech Tsunami/Software Is Eating the World++ Chapter SIX: People First/A Moral Imperative Circa 2015 Chapter SEVEN: Giants Stink/Age of SMEs/Be The Best, It’s the Only Market That’s Not Crowded Chapter EIGHT: Innovate Or Die/W.T.T.M.S.W./ Whoever Tries The Most Stuff Wins++ Chapter NINE: Nine Value-added Strategies Chapter TEN: The “PSF”/Professional Service Firm “Model” as Exemplar/“Cure All” Chapter ELEVEN: You/Me/The “Age of ‘BRAND YOU’/‘Me Inc.’” Chapter TWELVE: Women Are Market #1 For Everything/ Women Are the Most Effective Leaders Chapter THIRTEEN: Leadership/46 Scattershot Tactics Chapter FOURTEEN: Avoid Moderation!/Pursue “Insanely Great”/Just Say “NO!” to Normal

3. STATEMENT OF PURPOSEThis—circa November 2015—is my best shot. It is … “THE WORKS.” Some half-century in the making (from 1966, Vietnam, U.S. Navy ensign, combat engineer/Navy Seabees—my 1st “management” job—to today, 49 years later); but also the product of a massive program of self-directed study in the last 36 months. It includes, in effect, a 250-page book’s worth—50,000++ words—of annotation.The times are nutty—and getting nuttier at an exponential pace. I have taken as best I can the current context fully into account. But I have given equal attention to more or less eternal (i.e., human) verities that will continue to drive organizational performance and a quest for EXCELLENCE for the next several years—and perhaps beyond. (Maybe this bifurcation results from my odd adult life circumstances: 30 years in Silicon Valley, 20 years in Vermont.)Enjoy.Steal.P-L-E-A-S-E try something, better yet several somethings.* ** *** **** ******Make no mistake … THISISA14-CHAPTERBOOK. I think and write in PowerPoint; I dearly hope you will join me in this cumulative—half century—journey.**My “Life Mantra #1”: WTTMSW/Whoever Tries The Most Stuff Wins.***I am quite taken by N.N. Taleb’s term “antifragile” (it’s the title of his most recent book). The point is not “resilience” in the face of change; that’s reactive. Instead the idea is proactive—literally “getting off” on the madness per se; perhaps I somewhat anticipated this with my 1987 book, Thriving on Chaos. ****Re “new stuff,” this presentation has benefited immensely from Social Media—e.g., I have learned a great deal from my 125K+ twitter followers; that is, some fraction of this material is “crowdsourced.”*****I am not interested in providing a “good presentation.” I am interested in spurring practical action. Otherwise, why waste your time—or mine?Note: There is considerable DUPLICATION in what follows. I do not imagine you will read this book straight through. Hence, to some extent, each chapter is more or less stand-alone.

4. Epigraphs “Business has to give people enriching, rewarding lives … or it's simply not worth doing.”—Richard Branson “Your customers will never be any happier than your employees.”—John DiJulius “We have a strategic plan. It’s called ‘doing things.’ ”—Herb Kelleher “You miss 100% of the shots you never take.”—WayneGretzky “Ready. Fire. Aim.” —Ross Perot “Execution is strategy.”—Fred Malek “Avoid moderation.”—Kevin Roberts “I’m not comfortable unless I’m uncomfortable.”—Jay Chiat “It takes 20 years to build a reputation and five minutes to ruin it.” —John DiJulius on social media “Courtesies of a small and trivial character are the ones which strike deepest in the grateful and appreciating heart.” —Henry Clay “You know a design is cool when you want to lick it.” —Steve Jobs “This will be the women’s century.” —Dilma Rousseff “Be the best. It’s the only market that’s not crowded.”—George Whalin

5. First Principles. Guiding Stars. Minimums. *EXECUTION! The “Last 95%.” GET IT (Whatever) DONE. *EXCELLENCE. Always. PERIOD. *People REALLY First! Moral Obligation #1. *EXPONENTIAL Tech Tsunami. GET OFF ON CONTINUOUS UPHEAVALS! *Innovate or DIE! WTTMSW/Whoever Tries The Most Stuff Wins! *Women Buy (EVERYTHING)! Women Are the Best Leaders! Women RULE! *Oldies Have (All of) the Market Power! *DESIGN Matters! EVERYWHERE! *Maximize TGRs!/Things Gone RIGHT! *SMEs, Age of/“Be the Best, It’s the Only Market That’s Not Crowded.” *Moderation KILLS!

6. NEW WORLD ORDER?!0810/2011:Apple > Exxon*0724/2015:Amazon > Walmart***Market capitalization; Apple became #1 in the world.**Market capitalization; Walmart is a “Fortune 1” company—the biggest in the world by sales.

7. Phew.

8. Contents/“The Works”/1966-2015/EXCELLENCE! Chapter ONE: Execution/The “All-Important Last 95%” Chapter TWO: EXCELLENCE (Or Why Bother at All?) Chapter THREE: 34 BFOs/Blinding Flashes of the Obvious Chapter FOUR: People (REALLY!) First Chapter FIVE: Tech Tsunami/Software Is Eating the World++ Chapter SIX: People First/A Moral Imperative Circa 2015 Chapter SEVEN: Giants Stink/Age of SMEs/Be The Best, It’s the Only Market That’s Not Crowded Chapter EIGHT: Innovate Or Die/W.T.T.M.S.W./ Whoever Tries The Most Stuff Wins++ Chapter NINE: Nine Value-added Strategies Chapter TEN: The “PSF”/Professional Service Firm “Model” as Exemplar/“Cure All” Chapter ELEVEN: You/Me/The “Age of ‘BRAND YOU’/‘Me Inc.’” Chapter TWELVE: Women Are Market #1 For Everything/ Women Are the Most Effective Leaders Chapter THIRTEEN: Leadership/46 Scattershot Tactics Chapter FOURTEEN: Avoid Moderation!/Pursue “Insanely Great”/Just Say “NO!” to Normal

9. Chapter TWO EXCELLENCE

10. 2.1 X3/4

12. I wrote a book in 1982. A few people bought it. Then, hooray, a few more …

13. In Search of Excellence/1982: The Bedrock “Eight Basics” 1. A Bias for Action 2. Close to the Customer 3. Autonomy and Entrepreneurship 4. Productivity Through People 5. Hands On, Value-Driven 6. Stick to the Knitting 7. Simple Form, Lean Staff 8. Simultaneous Loose-Tight Properties

14. People Execution Excellence

15. PXX = People. eXecution. eXcellence.

16. In Search of Excellence … in 3 words.* (*Circa 1982. Circa 2015.)

17. Action People Customers Values

18. To be sure, the “Eight Basics.” (They’ve held up pretty darn well.) Nonetheless … In Search of Excellence in … 4 words on the prior slide. (Circa 1982. Circa 2015.)

19. Excellence.2015: The Bedrock “Eleven Basics” 1. A Bias for Action/Serious Play/Execution 4. PeopleFirst/Training-Development Mania 2. Symbiosis With the Customer 3. Autonomy and Entrepreneurship 5. Hands On, Value-Driven 6. Simple Form, Lean Staff, Collaboration Imperative 7. Simultaneous Loose-Tight Properties 8. Ubiquitous Design-mindedness 9. Technology Fanaticism 10. Antifragile/Speed Demons

20. Excellence.2015: The Bedrock “Eleven Basics” 1. A Bias for Action/Serious Play/Execution* 4. PeopleFirst/Training-Development Mania 2. Symbiosis With the Customer 3. Autonomy and Entrepreneurship 5. Hands On, Value-Driven 6. Simple Form, Lean Staff, Collaboration Imperative 7. Simultaneous Loose-Tight Properties 8. Ubiquitous Design-mindedness 9. Technology Fanaticism 10. Antifragile/Speed Demons *RED is changes from 1982 list.

21. Update 2015. Much the same. But important changes. (The changes—as well as the similarities—are imbedded in the material in this presentation.)

22. 2.2X140 Excellence “Twitter-ized”

23. In Search of Excellence “twitter-ized”/ <140 Characters:Cherish your people, cuddle your customers, wander around, “try it” beats “talk about it,” pursue Excellence, tell the truth. 127/Q.E.D.

24. In Search of Excellence.2015 … Twitter-ization.

25. My Story/40+ Years/140 Characters**Take charge of your life!**Aim high!**Be “Of service”!**Engage and empower others!**Follow the Golden Rule!**Act now!**Relentless!**No less than EXCELLENCE!

26. My life … Twitter-ized.

27. (2.3 By The Way …)

28. ExIn*: 1982-2002/Forbes.comDJIA: $10,000 yields $85,000EI: $10,000 yields $140,050* “Excellence Index”/Basket of 32 publicly traded stocks

29. I am often asked how the “Excellent companies” have fared. Some, to be sure, were bombs. But, on the 20th anniversary of the book’s publication, in 2002, Forbes.com analyzed the stock market performance of the firms. The results, FYI, are on the prior slide. (In addition to the satisfactory performance, Forbes noted that, unlike the real world of stock-picker indices, this analysis precluded selling off stocks that were tanking—hence the Index is at a big disadvantage to standard indices; yet it had still done very well.) (For no particular reason, neither I nor anyone else seems to have done a subsequent analysis. Frankly, 20 years is a pretty good test.)

30. 2.4X6 Just 6 Words*: But a Core Philosophy (*+7 Ss)

31. Hard is Soft. Soft is Hard.

32. Hard (numbers, plans)is Soft. Soft (people/relationships/culture)is Hard.

33. Action. People. Customers. Values. Some—most?—call these areas “soft”: Where are the numbers Where are the plans? Surely there is room for the numbers—and the plans. But they are the real “soft stuff”—malleable and manipulable. (As we saw again and again during the economic crisis.) The truly “hard stuff”—which can’t be faked or exaggerated—are the relationships with, for instance, our customers and our own people. “‘Hard’ is ‘soft.’ ‘Soft’ is ‘hard.’” Mantra #1 from In Search of EXCELLENCE. Mantra 1982. Mantra 2015.

34. “THE 7-S MODEL”STRATEGYSTRUCTURESYSTEMSSTYLESKILLSSTAFFSUPER-ORDINATE GOAL

35. “The 7-S Model”“Hard Ss”(Strategy, Structure, Systems)“Soft SS”(Style, Skills, Staff, Super-ordinate goal)

36. “The 7-S Model”STRATEGYSTRUCTURESYSTEMSSTYLE(CORPORATE “CULTURE,” “THE WAY WE DO THINGS AROUND HERE”)SKILLS(“DISTINCTIVE COMPETENCE/S”)STAFF(PEOPLE-TALENT)SUPER-ORDINATE GOAL(VISION, CORE VALUES)

37. The “McKinsey 7-S Model” (or simply “7-S model”) that Bob Waterman and I developed in 1979 (with Tony Athos, Richard Pascale and Julien Phillips) has stood the test of time—36 years to date. Our current-day McKinsey colleagues claim it’s still the “most useful framework for assessing Organizational Effectiveness”—it underpins a great deal of McKinsey’s current work. The idea, encompassed by the “Hard is soft, Soft is Hard” notion, is that there are “soft Ss” as well as “hard Ss” that must be considered and managed-as-one to maximize organization well-being and competitive strength. Moreover—and here’s the rub—all 7 must in effect be perfectly aligned to achieve sustaining Excellence. (No mean feat!)

38. .

39. The 7-S model was/is to be laid out this way. The diagram implicitly introduces the crucial idea of … “fit.” Each of the “Ss” must be considered in relationship to the other six. This balancing/high-tension act is at the center of the leader’s role as Enterprise Architect.

40. “If I could have chosen not to tackle the IBM culture head-on, I probably wouldn’t have. My bias coming in was toward strategy, analysis and measurement. In comparison, changing the attitude and behaviors of hundreds of thousands of people is very, very hard.[YET] I CAME TO SEE IN MY TIME AT IBM THAT CULTURE ISN’T JUST ONE ASPECT OF THE GAME—IT IS THE GAME.”—Lou Gerstner, Who Says Elephants Can’t Dance

41. Hard to describe the meaning of this to me personally. Gerstner said again and again when he an I were at McKinsey that I was full of baloney for focusing on the “soft” “culture stuff.” Per this slide, from his autobiography featuring the IBM years, he apparently became a convert!

42. THE SOFT EDGE

43. Pillars of Soft-Edge Excellence Trust Teams Taste Smarts Story Source: The Soft Edge, Rich Karlgaard

44. Rich Karlgaard is the publisher of Forbes magazine—and a Silicon Valley stalwart of the 1st order. So it is especially interesting that he would write a book on “the soft stuff.” But The Soft Edge is just that—and his arguments are compelling. The bottom line, in Silicon Valley for example, is that you will not achieve more than a smidgeon of your tech potential unless the organization which carries out your mission emphasizes Rich’s “soft edge” traits. (The idea holds elsewhere as well. But the point is that even in Silicon Valley the “soft stuff” is paramount as one seeks lasting impact and excellence.)

45. “Far too many companies invest too little time and money in their soft-edge excellence. … The three main reasons for this mistake are: 1. The hard edge is easier to quantify. … 2. Successful hard-edge investment provides a faster return on investment. … 3. CEOs, CFO, chief operating officers, boards of directors, and shareholders speak the language of finance. …” Source: The Soft Edge, Rich Karlgaard

46. Soft-Edge Advantages 1. Soft-edge strength leads to greater brand recognition, higher profit margins, … [It] is the ticket out of Commodityville. “2. Companies strong in the soft edge are better prepared to survive a big strategic mistake or cataclysmic disruption … “3. Hard-edge strength is absolutely necessary to compete, but it provides only a fleeting advantage.” Source: The Soft Edge, Rich Karlgaard

47. Amen. (Read the book. PLEASE.)

48. Hard is Soft. Soft is Hard.

49. Hard (numbers, plans)is Soft. Soft (people/relationships/culture)is Hard.

50. McKinsey: Culture > Strategy Wall Street Journal, 0910.13, interview:“What matters most to a company over time? Strategy or culture?” Dominic Barton, Managing Director, McKinsey & Co.:“Culture.” McKinsey: People > Strategy “People Before Strategy”—title, lead article, Harvard Business Review July-August 2015, by McKinsey MD Dominic Barton et al.