eXCELLENCE21:21 - Revolutionizing Organizational Structure for Survival in the 21st Century

1. Tom Peters’ eXCELLENCE21:21 Survival PropositionseCustomerServiceWorld/05.12.2002

2. Slides at …tompeters.com

3. P1. “ECM”= Life & Death

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

5. “The deadliest strength of America’s 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 won’t do it,’ he said. His answer is to develop swifter, more lethal ways to fight. ‘Big institutions aren’t swift on their feet in adapting but rather ponderous and clumsy and slow.’ ”—The New York Times/09.04.2002

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

7. “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 don’t talk to each other.”Boston Globe (09.30.2001)

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

9. “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 & René Tissen, Zero Space: Moving Beyond Organizational Limits.

10. “Dawn Meyerreicks, CTO of the Defense Intelligence 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 military’s 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/“Broadband’s New Killer App”/Business 2.0/ OCT2002

11. “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

12. Eric’s ArmyFlat.Fast.Agile.Adaptable.Light … But Lethal.Brand You/ Talent/ “I Am An ARMY OfOne.”Info-intense.Network-centric.

13. The New Infantry Battalion/New York Times/12.01.2002“Pentagon’s 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.

14. P2. All Bets Are Off.

15. “We are in abrawl with no rules.”Paul Allaire

16. “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

17. “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 (08.00)

18. P3. Destroy.

19. 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

20. “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

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

22. “Good management was the most powerful reason [leading firms] failed to stay atop their industries.Precisely because these firms listened to their customers, invested aggressively in technologies that would provide their customers more and better products of the sort they wanted, and because they carefully studied market trends and systematically allocated investment capital to innovations that promised the best returns, they lost their positions of leadership.”Clayton Christensen, The Innovator’s Dilemma

23. Forget>“Learn”“The problem is never how to get new, innovative thoughts into your mind, but how to get the old ones out.”Dee Hock

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

25. No Wiggle Room!“Incrementalism is innovation’s worst enemy.” Nicholas Negroponte

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

27. “I don’t intend to be known as the ‘King of the Tinkerers.’ ”CEO, large financial services company

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

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

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

31. Pastels?T. Paine/P. Henry/A. Hamilton/T. Jefferson/B. FranklinA. Lincoln/U. S. Grant/W. T. ShermanTR/FDR/LBJ/RR/JFKM.L. KingC. deGaulleM. GandhiW. ChurchillM. ThatcherPicassoMozartCopernicus/Newton/EinsteinJ. Welch/L. Gerstner/L. Ellison/B. Gates/S.Ballmer/S. Jobs/S. McNealyA. Carnegie/J. P. Morgan/H. Ford/J.D. Rockefeller/T. A. Edison

32. !

33. P4. Embrace the White Collar Revolution.

34. 108 X 5vs. 8 X 1= 540 vs. 8(-98.5%)

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

36. There Is No Such Thing as the Tooth Fairy.IBM Self-healing eServers**Approximate TV ad copy (11.2002)

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

38. “Doctors are faced with the very real threat of irrelevance in ten years. You’ll go to a lab, have a blood sample drawn, and a readout of your genetic deficiencies will be produced—along with ‘Doctor’s Orders’ for appropriate treatment; only there won’t be any doctor.”—Leading Pediatric Cardiologist (11.2002)

39. Sequenom/David Ewing Duncan/Wired11.02“Sequenom has industrialized the SNP [single nucleotide polymorphisms] identification process.” “This, I’m 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 can’t look at humanity separate from machines; we’re so intertwined we’re almost the same species, and the difference is getting smaller.”

40. “A bureaucrat [or a doctor?]is an expensive microchip.”Dan Sullivan, consultant and executive coach

41. P5. eVERYTHING.

42. Nextel, Phoenix, Etc.,2.5G, 3G, 4GWindowsSymbianJavaBluetooth Wi-FiPCs-PDAs-Cell“phones”E-business vs. M-businessEtc.

43. Outsider’s view: (1) Billions are being spent, even in a down market. (2) NOBODY HAS A CLUE AS TO WHO THE WINNERS—AND LOSERS—WILL BE. (3) Yet you must play. Now. Hard. Fast.

44. 100square feet

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

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

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

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

49. “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

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