Distinct or … Extinct Tom Peters Seminar2000 Manchester nh 14 June 2000

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Distinct or … Extinct Tom Peters Seminar2000 Manchester NH 14 June 2000

Defeated Before The Starter’s Gun! “Track 4: Managing Organization Change (Helping Tired and Overworked Professionals with Today’s Workplace Realities)”

NAPM:You are the Rock Stars of the B2B Age!”

An Age of Passion: 1 Year = 1.5 Wal*Marts 03.27.99: $167B 03.27.00: $555B P.S.: Wal*Mart = #8 in 2000

It Makes John Chambers Smile! “We have in our house, among two working parents, two teens and an 8-year-old, five computers (both Mac and Windows), four cell phones, seven phone lines, two Palm Pilots, one DSL, two ISP connections, a collection of personal domain names, a CD burner, a scanner and one AOL account.” Michael Wolff, writer [as reported in New York 06.00]

Pentium III 800MHz: $42,893.00/# Hermes Scarf: $1,964.29 Saving Private Ryan on DVD: $874.75 Mercedes-Benz: $18.98 Hot-rolled steel: $0.19 Source: Fortune (3.20.00)

“Researchers say they have found a way to mate human cells with circuitry in a ‘bionic chip’ … The tiny device – smaller and thinner than a strand of hair – combines a healthy human cell with an electronic circuitry chip.” AP/AOL/02-00

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

Just Say No … “I don’t intend to be known as the ‘King of the Tinkerers.’ ” CEO, large financial services company (New York, 5-99)



Welcome to the Land of the True Believers! “We have the ability to turn the economy upside down, to enhance lives, and to drive civilization forward.” Michael Saylor, MicroStrategy

“It means nothing less than the total reinvention of this company.”

Jacques’ New New Ford Ford + MSN CarPoint Ford + Yahoo! Ford + Oracle Ford + HP/MCIWorldcom Etc. Etc.

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


T.T.D.s The next slide is the first of many “T.T.D.” activities. I.e.: Things To Do. These are by and large shorthand forms of training exercises I use. Also: Each of these T.T.D. slides has accompanying Notes. (See following slide.) Tom Peters

T.T.D./True or False: “incrementalism” VERSUS “innovation”?

Notes Page

  • This is a daunting issue. There is no “right answer.” But it merits constant, conscious debate. Consider the value of incremental change. [Kaizen, etc.] And discuss whether or not this thwarts “BIG” initiatives aimed at wholesale reinvention.
  • Also: Consider … “Can we do both?” [I’m not sure.] P.S.: This crucial issue holds for Finance Departments as much as Product Divisions. And it holds for the smallest and newest of businesses! THIS DEBATE IS WORTH LOTS OF TIME! KEEP IT PRACTICAL!

Tom Peters Seminar2000 Brand Everything: Distinct or Extinct!

Structure Part I: Brand Inside Part II: Brand Outside Part III: Brand Leadership

Part I: Brand Inside Part II: Brand Outside Part III: Brand Leadership

Forces @ Work I The Destruction Imperative!

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

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

“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: ‘I’m sure there are success stories out there, but at this moment I draw a blank.’ ” Mark Sirower, The Synergy Trap

“Talent” and a $2T enterprise??????

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

“Our ideal acquisition is a small startup that has a great technology product on the drawing board that is going to come out in six to twelve months. We buy the engineers and the next generation product. …” John Chambers, Cisco

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

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

Silicon Valley Success Secrets “Pursuit of risk”: 4 of 20 in V.C. portfolio go bust; 6 lose money; 6 do okay; 3 do well; 1 hits the jackpot Source: The Economist

R & D” Intel’s venture fund: 275 investments, $8B Source: Fast Company , eCompany

Net World! Act now. Analyze later. Avram Miller

[TP to Chain Owner … “Do 5 deals before you go home!”]

“It used to be that the big ate the small. Now the fast eat the slow.” Geoff Yang, IVP/ (Institutional Venture Partners)

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

The [New] Ge Way DYB.com

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

Paradox Redux Atlanta: +113,600 = #1 metro area Layoffs [major]: BellSouth, Lockheed, Coca-Cola

Brand Inside Brand Org: Lean, Mean, Linked & Electronic

108 X 5 vs. 8 X 1* * 540 vs. 8

And Now the Equivalent … White Collar Revolution!

The Pincer 5 “Destructive” entrepreneurs/ Global Competition “White Collar Robots” THE INTERNET! [E.g.: GM + Ford + DaimlerChrysler] Global Outsourcing [E.g.: India, Mexico] Speed!!

RR on “Assetless” [J.B.] Sara Lee “The most profitable businesses in the future will act as knowledge brokers, linking insights into what’s available with insights into the customer’s individual needs and preferences.”

The “&-!!+#$% in the middle”* Jim Clark on Healtheon/WebMD * ’twixt docs, patients, insurers and providers; $275B of $400B in waste; source: Michael Lewis, The New New Thing

[ Incidentally … CEO Jeff Arnold Age: 30 First Start-up: Age 24]

“This is the Age of Ageism: The real innovator’s dilemma isn’t ‘disruptive technologies;’ it’s the relentless rise of the quasi-adolescents who wield them.” Michael Schrage (06.00/Fortune)

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

So does Enron! [et al.]

Buzzsaw.com Builders, Owners, Architects, Contractors, Suppliers $4T industry 5,300 commercial bldg. projects’ specs on-line; +70 per day

And … e-Builder.com, BuildNet.com, EqualFooting.com [et al.]

Cemex and FDX!

12/31/00 (per Newsweek 04.24.00) 75% of U.S. universities will have on-line offerings/ 5.8 million students “Unbundling” profs’ jobs (star lecturer, facilitator)/ Repackage “content” as multi-media “event” AAUP is angry! (Good news!) 355 studies: Equal results! (and one teachers union study that disagrees!)

These are … L.A.D.T.I.R.S.* *Life-and-death-total-industry-reinvention-struggles

Brand Inside Brand Work!

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

Why are there no books on how to create a “Cool, Rocking, WOW-producing Finance Department”?

You are the Rock Stars of the B2B Age!

[NAPM Redux: Welcome to the Y2K New Orleans Jazz and Real Cool Purchasing Dudes Festival!]

NAPM: Not “Purchasing”! NAPM: Not “Supply Chain Mgt.” NAPM = TE/IR!* *Total Enterprise/Industry Reinvention!

Message to NAPM: You are Re-invention Evangelists!

“support function” / “cost center” / “bureaucratic drag” or … “Rock Stars of the ‘Age of Talent’ ”

PSF 1.0 Professional Service Firm Conversion Kit / Release 1.0

PSF 1.0 Department Head to … Managing Partner, HR [IS, etc.] Inc.

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


The “7Ps” of PSF 1.0 Projects! Passion! Provocation! Partnership! Politics! Professionalism! Performance!

C.I.O. to C.E.F.R.N.S.*

*Chief Evangelist For Really Neat Stuff

“How long does ‘culture change’ take?”

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!

Enter … The WOW Project!

“Reward excellent failures. Punish mediocre successes.” Phil Daniels, Sydney exec

But Does It Matter ???? “On time, on budget … who cares?” anon. seminar participant (4/99)

“You really got to me. So many of our information technology projects take on a life of their own, and I know they’ll never end up as more than ‘mediocre successes.’ ” CEO, F100 financial services company (10-98)

WOW Project Anatomy I. Create! II. Sell! III. Implement! IV. Exit!

Create/Reframers’ Rules: Rule 1: Never accept an assignment as given! Rule 2: You’re never so powerful as when you are “powerless”! Rule 3: Every “small” project contains the entire enterprise DNA!

T.T.D. Examine that “small”/ “annoying” project you’re working on. Can it be re-cast as a WOW/ Culture Change Project? What are the hidden assumptions about customers/ suppliers/ employees?

Notes Page

  • I am adamant: Every project can be made into a “big deal” if your head is in the right place. So … now … COMPLETELY RE-INVENT THAT “SMALL” PROJECT YOU ARE WORKING ON! No bull! E.g.: What about a “Memorial Day Employee Picnic that signals a whole new attitude toward our staff”?


    • WOW!
    • Beauty!
    • Raving Fans!
    • Impact!

“Every project we take on starts with a question: How can we do what’s never been done before?” Stuart Hornery, CEO, Lend Lease

WOW Project “Acid Test” Can you explain it - with zest - to your 14-year-old?

Sell, Sell, Sell! Master “The Pitch”! Repeat: “I am a salesperson!” Read: Saul Alinsky, Rules for Radicals

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

“You can’t be a serious innovator unless and until you are ready, willing and able to seriously play. ‘Serious play’ is not an oxymoron; it is the essence of innovation.” Michael Schrage, Serious Play

Think about It!? Innovation = Reaction to the Prototype Michael Schrage

T.T.D./ Prototyper’s Laws Define a small, practical test of something on a page or less of text. Now. Gather “found” materials … on the [very] cheap. Find a/one partner-“customer” who’ll provide a test site. Set a very tight deadline of about 5 days for the next concrete step. Conduct the test! Debrief A.S.A.P. Set the next test date. Now. [No more than 5 days hence.]

Notes Page

  • The idea is to establish a “rhythm of prototyping” that defines every project.

T.T.D./ Secret No. 1: Forget “selling up”! Go horizontal: Find a (one!) “line” ally in “the Boonies”!

    • T.T.D./ Secret No. 1: Forget “selling up”! Go horizontal: Find a (one!) “line” ally in “the Boonies”!
    • Secret No. 2: “Powerless” allies are Cool!
    • Secret No. 3: Become a Prototyping Maniac!
    • Secret No. 4: Embrace Politics / “Community Organizing”!
    • Secret No. 5: Passion Rules! Get your story in shape!

Notes Page

  • Main Idea: YOU ARE NOT “POWERLESS.” Seek out allies in strange places … and get going! DO NOT WASTE TIME “SELLING UP.”
  • Attitude: You are the Gandhi/King of your “mission.”


SOOOO … HOW MANY OF YOUR COLLEAGUES ARE “BACK HOME” AT WORK ON NO-BALONEY … WOW* PROJECTS! * WOW = Will be remembered fondly/ bragged about 5+ years from now


The greatest danger for most of us is not that our aim is too high and we miss it, but that it is too low and we reach it. Michelangelo

Characteristics of the “Also Rans”

      • “minimize risk”
    • “respect the chain of command”
    • “support the boss”
    • “make budget”
  • Source: Fortune on “most admired
  • global corporations” (10/26/98)

T.T.D.: Now!

    • List all projects
    • Carefully describe a “WOW Outcome” for you and the Client
    • Score (!) all projects on WOW, Beauty, Impact, Raving Fan-hood
    • Pick one project with a high combined score
    • Draft a one-page New Description that emphasizes WOW, Beauty, etc.
    • Circulate and edit … for three days
    • Reduce to 5 bullet points

Notes Page

  • DO IT!
  • NOW!

[We are not trying to “WOW you up.” We think you are/have WOW. We are trying to give you permission to be WOW.]

1) Turn ignition key. 2) Shift into drive. 3) Press foot firmly on the throat of mediocrity. Source: Mercedes ad

Brand Inside Brand You: Distinct … or Extinct

DISTINCT … OR EXTINCT! If there is nothing very special about your work, no matter how hard you apply yourself, you won’t get noticed and that increasingly means you won’t get paid much, either.” Michael Goldhaber, Wired

Personal “Brand Equity” Evaluation

    • I am known for [2 to 3 things]; next year at this time I’ll also be known for [1 more thing].
    • My current Project is challenging me …
    • New things I’ve learned in the last 90 days include …
    • My public “recognition program” consists of …
    • Additions to my Rolodex in the last 90 days include …
    • My resume is discernibly different from last year’s at this time …

“You are the storyteller of your own life, and you can create your own legend or not.” Isabel Allende

T.T.D./Assignment Construct a 1/8-page or 1/4-page ad for Brand You … for the Yellow Pages

Notes Page

  • THIS IS A BIG DEAL. TAKE IT SERIOUSLY. [“Yellow Pages ads” are the centerpiece of our formal Brand You training programs.]

[ T.T.D.: How About It? Replace your current evaluation process with Yellow Pages ads.]

Notes Page

  • NO BULL! Some of our Clients have gone this far. And report stunning results. If you can’t do this formally, try it informally.

R.D.A. Rate: 15%?, 25%? Therefore: Formal “Investment Strategy”/R.I.P.

“You must realize that how you invest your human capital matters as much as how you invest your financial capital. Its rate of return determines your future options. Take a job for what it teaches you, not for what it pays. Instead of a potential employer asking, ‘Where do you see yourself in 5 years?’ you’ll ask, ‘If I invest my mental assets with you for 5 years, how much will they appreciate? How much will my portfolio of career options grow?’ ” Stan Davis & Christopher Meyer, futureWEALTH

T.T.D./Your R.I.P. IS IT … FORMAL? IS IT ... WOW!?

Notes Page

T.T.D./R.I.P. Use by yourself. Use with your mates. Use [quantitatively?] as a measure of departmental/ P.S.F. renewal. Use in formal eval process.

Notes Page

  • The whole idea is to make “R.I.P.s” a/the centerpiece – formally – of measuring unit “freshness.” E.g.: SCORE EVERYONE’S “R.I.P.” ON ITS BOLDNESS/WOW.

Seminar Y2K/Brand Inside Message: Distinct … or Extinct!

Bill Parcells’ World/ Brand You World! BLAME NOBODY! EXPECT NOTHING! DO SOMETHING! NY Post (9/99)

Women and new-economy management …

The New Economy … Shout goodbye to “command and control”! Shout goodbye to hierarchy! Shout goodbye to “knowing one’s place”!

Women’s Stuff = New Economy Match Improv skills Relationship-centric Less “rank consciousness” Self determined Trust sensitive Intuitive Natural “empowerment freaks” [less threatened by strong people] Intrinsic [motivation] > Extrinsic

It’s Girls, Stupid! 1996: 8.4M women, 6.7M men in college (est: 9.2 to 6.9 in 2007); more women than men in high-level math and science courses More girls in student govt., honor societies; girls read more books, outperform boys in artistic and musical ability, study abroad in higher numbers Boys do rule: crime, alcohol, drugs, failure to do homework (4:1) Source: The Atlantic Monthly (5/2000)

“Boys are trained in a way that will make them irrelevant.” Phil Slater

Brand Inside Brand Talent: The Great War for Talent

Issue Y2K The Great War for Talent!

“When land was the scarce resource, nations battled over it. The same is happening now for talented people.” Stan Davis & Christopher Meyer, futureWEALTH

“The market’s being divided up right now. We’re in a tough competition [with the U.S. and the U.K.] for the best brains.” Gerhard Schroeder, on Germany’s new tech immigration policy [Frankfurter Allgemeine/06.02.00]

Tomorrow’s Headlines “Molecular biologists are up 3 points, economists down 1/4 , in moderate trading” futureWEALTH, Stan Davis and Christopher Meyer

There is no “talent shortage” … if … you are a GPTW* *Great Place To Work

Alan Kay on PARC’s Bob Taylor “He was a connoisseur of talent.”

Connoisseur of Talent Time! Attitude > Skill Plain English! Diversity! Arts! [M.I.] Reward Talent! D.I.Y. Obsession!

Talent war, Web-speed! Every resume or employment question that comes to Lucent via the Web gets answered in 30 minutes or less. [24/7.] Red Herring [06.00], on Lucent Director of Recruitment Jim Baughman

C.O.T. Redux “Our business needs a massive transfusion of talent. And talent, I believe, is most likely to be found among non-conformists, dissenters and rebels.” David Ogilvy

Axiom: Never hire anyone without an aberration in their background. (Find the One Ton Cookie Man!)

“He grew his hair long, played guitar in a rock band, chased girls, got into trouble. At age 17 he was flogged by his house master, who described him as ‘the most difficult boy I’ve ever had to deal with.’ ”

Solution? Slip Ritalin into his food … Or …

Elect Him Prime Minister Tony Blair* *talk/May 2000

“Conformity is the enemy of freedom and the jailer of growth.” J.F.K.

Yes! Director of Bringing in the Really Cool People

All You Need to Know? Chief Evangelist For Really Neat Stuff Director Of Bringing In The Really Cool People


Talent = Brand

Brand Outside = Brand Inside

Brand inside A BIAS FOR ACTION = No. 1

Bottom Line: The new metabolism!


Net World! Act now. Analyze later. Avram Miller

[TP to Chain Owner … “Do 5 deals before you go home!”]

“Steve Ross had a wonderful philosophy: People get fired for not making mistakes.” Bob Pittman

Fail. Forward. Fast. High-tech exec

Ready. Fire! Aim. Ross Perot, Wayne Calloway, Harry Quadracci, et al.

Reprise: Brand Inside The White Collar Revolution & The Web [90% poleaxed, CDO, Healtheon/WebMD, Buzzsaw.com] PSF as Building Block [Work Worth Paying For, Real Cool Purchasing Dudes] Work Worth Paying For = WOW Projects! Brand You [Everybody!] The Great War for Talent! [Lookin’ for Dudes with ’tude] The New Metabolism [Ready. Fire! Aim.]

Part I: Brand Inside Part II: Brand Outside Part III: Brand Leadership

Forces @ Work II The Commodity Trap

In the Beginning … “The audit has become a commodity.” Big 5 audit partner to TP

Quality Not Enough! “Quality as defined by few defects is becoming the price of entry for automotive marketers rather than a competitive advantage.” J.D. Power

Quality Not Enough! “While everything may be better, it is also increasingly the same.” Paul Goldberger on retail, “The Sameness of Things,” The New York Times

What’s Special? “Customers will try ‘low cost providers’ because the Majors have not given them any clear reason not to.” Leading Insurance Industry Analyst (10-98)

“We make over three new product announcements a day. Can you remember them? Our customers can’t!” Carly Fiorina

“The ‘surplus society’ has a surplus of similar companies, employing similar people, with similar educational backgrounds, coming up with similar ideas, producing similar things, with similar prices and similar quality.” Kjell Nordstrom and Jonas Ridderstrale, Funky Business

The “10X/10X Phenomenon” 10 Times Better/ 10 Times Less Different

“When we did it ‘right’ it was still pretty ordinary.” Barry Gibbons on “Nightmare No. 1”

Pretzel Crumb-less-ness Plus … “The Ritz Carlton Experience enlivens the senses, instills well-being and fulfills even the unexpressed wishes and needs of the guest.” from the Ritz Carlton Credo

Nirvana! - Nordstrom - Four Seasons - Adirondack Guide Boat - OXO Good Grips - Ziplocs - Power Point

Why? Cool!/Surprising! Reliable! Friendly!/Comfortable! Aesthetically pleasing!

Consider … What words and emotions do you use to describe the things you love?

Context: “No” to “inevitable commoditization” S1: Lead the Customer! S2: Master E-Commerce! S3: Women Rule! (and the elderly) S4: Design Rules! (too) S5: It’s the Experience! Net: Glorious Age of the BRAND!

Context: “No” to “inevitable commoditization” S1: Lead the Customer! S2: Master E-Commerce! S3: Women Rule! (and the elderly) S4: Design Rules! (too) S5: It’s the Experience! Net: Glorious Age of the BRAND!

Brand Outside Strategy 1: Lead the Customer!

“The customer is a rear view mirror, not a guide to the future.” George Colony, Forrester Research “If you worship at the throne of the voice of the customer, you’ll get only incremental advances.” Joseph Morone, President, Bentley College

Early Customer Rejection Post-Its [12 years!] Chrysler Minivans VCRs Fax machines FedEx CNN Heart-assist pumps Etc. Source: Fortune

Good = Bad/ 1 of 30,000 “We are crazy. We should do something when people say it is ‘crazy.’ If people say something is ‘good’, it means someone else is already doing it.” Hajime Mitarai, Canon

“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

Amen! The Age of the Never Satisfied Customer” Regis McKenna

Context: “No” to “inevitable commoditization” S1: Lead the Customer! S2: Master E-Commerce! S3: Women Rule! (and the elderly) S4: Design Rules! (too) S5: It’s the Experience! Net: Glorious Age of the BRAND!

Brand Outside Strategy 2: Use E-Commerce to Re-invent the Business!

????? $35,000,000.

Dell’s Web sales … daily

2X = 100 days (Internet traffic) 2X = 9 months (network capacity) Source: Red Herring (1-00)

Web World/05.00 1B pages/7B hotlinks/+1M per day “For the first time in history, people everywhere have access to the thoughts, products and writings of a large and growing percentage of earth’s population.” The New Yorker/05.29.00

Tomorrow Today: Cisco! 90% of $14.4B (Cisco Connection ONLINE) Save $500M (service and tech support) C.Sat e >> C.Sat H Customer Engineer Chat Rooms/Collaborative Design ($1B “free” consulting)

And Larry?

Service Call Center $300.00 per transaction to $1.50 Savings: $550,000,000.00 Source: Ralph Seferian, Oracle [part of O’s $1B saving – on a rev. base of $9B; $1B addnl this year]

B2B 1999 – 2004: 50X 2004: $7.4 Source: GartnerGroup (per Reuters 1-26-00)

  • T

GM/Ford/DaimlerChrysler (02-27) Covisint $240B (+$500B) I.P.O.

B2B = No.1 CarStation (auto-body shops), ChemConnect (chemicals), Collabria (commercial printing), DigitalThink (corporate training), E-Steel (steel), Medibuy (medical supplies), Portera (knowledge workers), Etc., Etc., Etc., Etc.

Goal? Drive profits to zero!* *Remember AMR and “dynamic pricing.”

W.W. Grainger* 2X phone/fax *$220B “MRO” market (per Business 2.0/02-00)

Welcome to D.I.Y. Nation! “Changes in business processes will emphasize self service. Your costs as a business go down and perceived service 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!

Anne Busquet/ American Express Not: “Age of the Internet” Is: “Age of Customer Control”

Shop in your Underwear Source: SM’d logo for www.ae.com ae = American Eagle Outfitters

The Supply Side … The Age of the Choiceboard The War of the Choiceboards Source: Adrian Slywotzky, HBR 1-2/2000 [<1%]

“In the network economy, the Website becomes the company’s primary interface to the customer. The user interface becomes the marketing materials, store front, store interior, sales staff and post-sales support all rolled into one.” Jakob Nielsen, Designing Web Usability

“Most companies would do more business on the Internet if they fired their entire marketing department and replaced it with people who could produce interactive content that actually made it easier for users to buy.” Jakob Nielsen, Nielsen Norman Group

Red Herring (01/00) 75% of online shoppers don’t complete their purchase!

“Even if executives of established businesses grasp the impact of new technologies … they still face a massive competitive disadvantage precisely because they are incumbents. … They do complex financial calculations and get bogged down in internal political debates. Insurgents have no such inhibitions.” Philip Evans & Thomas Wurster, Blown to Bits

“ … if they set up a completely independent organization and let that organization attack the parent.”

    • “ … if they set up a completely independent organization and let that organization attack the parent.”
      • Clayton Christensen, The Innovator’s Dilemma

“Where does the Internet rank in priority? It’s No. 1, 2, 3, and 4.” Jack Welch

“E-business is the final nail in the coffin for bureaucracy at GE.” Jack Welch/ GE Annual Report 2000

[ 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]

There are 2 Kinds of … Defense* vs. Offense** *Fend off upstarts. **Reinvent our marketspace!

No Room for “Competent”* Sorts Beer Wholesalers Personal Trainers [FitLinxx] Financial Planners Car Dealers * LVA, “M”VA … vs. HVA [Web-enhanced]

Web Strategy: GE Power Systems “Launch and Learn” (4 sites in 30 days)

“It’s better to be first with less than last with more. Success on the Web isn’t just about time to market, it’s also about ‘time to learning.’ ” Jeff Levy, eHatchery

Jargon Bath! Bureaucracy free … Systemically integrated … Internet intense … Knowledge based … Time and location free … “Instantly” responsive … Customer centric … Mass customization enabled.

Translation … Bureaucracy free = Flat org, no B.S. Systemically integrated = Whole supply chain tightly wired/ friction free Internet intense = Do it all via the Web Knowledge based = Open access Time and location free = Whenever, wherever “Instantly” responsive = Speed demons Customer centric = Customer calls the shots Mass customization enabled = Every product and service rapidly tailored to client requirements

And Stuff Like … “For a dollar a month, an Ohio insurance company will rent you a GPS receiver to install in your car. As part of your policy, it signals how often, when, and which highways you drive and into which neighborhoods you go. The premium you pay reflects your actual driving risk.” Stan Davis & Christopher Meyer, futureWEALTH

Context: “No” to “inevitable commoditization” S1: Lead the Customer! S2: Master E-Commerce! S3: Women Rule! (and the elderly) S4: Design Rules! (too) S5: It’s the Experience! Net: Glorious Age of the BRAND!

Brand Outside Strategy 3: Women Rule!

????????? Home Furnishings … 94% Vacations … 92% Houses … 91% Bank Account … 89% Health Care … 75% Etc.

$3.3T + $1.5T = $4.8T* * Larger than Japan!

Most Under-reported story! 9M*/28M(1 of 4)/$3.6T [> Germany] * 400K in ’72; 132% since ’92 Sources: NFWBO, Cognetics, Business Wire (030600)

48% working wives > 50% 80% checks 61% bills 53% stock (mutual fund boom) 43% > $500K 95% financial decisions/ 29% single handed

Women … 49% of Web users; 6 of 10 new users; 83% of wired women are primary decision makers for family healthcare, finances, education. Source: Business Week (11-99)

New golfers … 37% Basketball … 13.5M 1 in 27 (’70) … 1 in 3 (’96)


1874 … Jock Strap 1977 … Jogbra 1977 ... 25K 1996 … 42M

Yeow! 1970 … 1% 2000 … 50%

OPPORTUNITY NO. 1!* [* No shit!]

Carol Gilligan/ In a Different Voice Men: Get away from authority, family Women: Connect Men: Self-oriented Women: Other-oriented Men: Rights Women: Responsibilities

FemaleThink/ Popcorn “Men and women don’t think the same way, don’t communicate the same way, don’t buy for the same reasons. “He simply wants the transaction to take place. She’s interested in creating a relationship. Every place women go, they make connections.”

Women and Healthcare Women are … more dissatisfied, frustrated by the way they are treated and spoken down to by physicians, seek more information, are more pressed for time … and make 75% of health care decisions and control 2/3 of health care $$$$ [and constitute 2/3 of health care employees]. Source: Patricia Braus, Marketing Healthcare to Women

Women and Financial Advisors Women want … a plan, to be listened to, to be taken seriously, to read about it, to think about it. Women do not want … an in-your-face sales pitch Source: Kathleen Boyle, Wheat Boyle Butcher Singer

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

Q: Why do guys like pagers? A1: Sense of importance [Pager Dude] A2: Cubicle Slaves’ replacement for “real guys” tool belts

Q: Why do women like pagers? A: Get the news A.S.A.P. if her child is in the Nurse’s Office Q:Why do women hate pagers? A: They find nothing romantic about wearing a Stetson wrench or Stanley hammer attached to their waist! [Note the pager’s clip-on device … guys ]

Read This Book … EVEolution: The Eight Truths of Marketing to Women Faith Popcorn & Lys Marigold

EVEolution: Truth No. 1 Connecting 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

Weight Watchers International “Model” “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 today’s skills?” EVEolution

EVEolution: Truth No. 2 If You’re Marketing to One of Her Lives, You’re Missing All the Others

E.g. … “Office Depot could become Life Depot, offering a selection of last-minute items for the hard-pressed female business owner.” “Weight Watchers could extend out to Family Weight Watchers.” EVEolution

Not!! “Year of the Woman”

Enterprise Reinvention! Recruiting Hiring/Rewarding/ Promoting Structure Processes Measurement Strategy Culture Vision Leadership THE BRAND ITSELF!

“What kind of car does Mommy want?”

“I didn’t know [company] were giving company cars to secretaries.” Source: UK financial services CEO, 12/99

27 March 2000: email to TP from Shelley Rae Norbeck “I make 1/3rd more money than my husband does. I have as much financial ‘pull’ in the relationship as he does. I’d say this is also true of most of my women friends. Someone should wake up, smell the coffee and kiss our asses long enough to sell us something! We have money to spend and nobody wants it!”

Not a Morality Play! “It is critical that we all understand that IBM is not marketing to women entrepreneurs because it is the thing to do, or even the right thing to do. We are marketing to women entrepreneurs because it is a huge opportunity.” Cherie Piebes

Wanna see my “porn” collection?


“If we are single, they say we couldn’t catch a man. If we are married, they say we are neglecting him. If we are divorced, they say we couldn’t keep him. If we are widowed, they say we killed him.” Kathleen Brown, on the joys of female political candidacy

Speaking of Enormous [Missed] [Huge] Opportunities ...

74/55 “At each stage of their lives, the needs and desires of the baby boomers have become the dominant concerns of American business and popular culture. If you can anticipate the movement of the baby-boom generation’s life-span migration, you can see the future.” Ken Dychtwald, Age Wave

Aging/“Elderly” 2X growth rate $$$$$$$$$$$$ “I’m in charge!” Good source: Ken Dychtwald, Age Wave

Priorities: Aging/“Elderly” Experiences … Convenience … Comfort … Access … Respect!

Context: “No” to “inevitable commoditization” S1: Lead the Customer! S2: Master E-Commerce! S3: Women Rule! (and the elderly) S4: Design Rules! (too) S5: It’s the Experience! Net: Glorious Age of the BRAND!

Brand Outside Strategy 4: Design Rules!

And Tomorrow … “Fifteen years ago companies competed on price. Now It’s quality. Tomorrow it’s 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 Ogha

Design as Soul “We don’t have a good language to talk about this kind of thing. In most people’s vocabularies, design means veneer. … But to me, nothing could be further from the meaning of design. Design is the fundamental soul of a man-made creation.” Steve Jobs

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

Unconventional [Design] Messages Not about ... “Lumpy Objects”! Not about ... $79,000 objects

T.T.D./Message: Services are Not Intangible! You “give off” hundreds of design cues … daily! YOU ARE A DESIGNER!

Notes Page

  • List 100 [!] “design cues” that you give off! [Okay, start with 25.]

Graceful language!

T.T.D./“Beauty Contest!” 1. Pick one form/ document: invoice, airbill, sick leave policy, returns claim form. 2. Rate it on a 1 to 10 scale (1 = Awful; 10 = Scintillating) on three dimensions: Beauty, Grace, Clarity. 3. Repeat … every 15 days.

Notes Page

  • DO THIS! USE MY TERMS! [Beauty … Grace … Clarity.] Be quantitative. [PLEASE.]

T.T.D./Design “Awareness”! STEP No. 1: NOTEBOOK! [Start recording the awesome and the awful.]

Notes Page

  • THIS IS MY “SECRET.” I am not “artistic.” But … I did teach myself to be … CONSTANTLY AWARE. The Key: My [simple] notebook! [I’VE NOW BEEN “RECORDING” FOR ALMOST TEN YEARS!]

Context: “No” to “inevitable commoditization” S1: Lead the Customer! S2: Master E-Commerce! S3: Women Rule! (and the elderly) S4: Design Rules! (too) S5: It’s the Experience! Net: Glorious Age of the BRAND!

Brand Outside Strategy 5: It’s the Experience!

“Experiences are as distinct from services as services are from goods.” Joseph Pine & James Gilmore, The Experience Economy: Work Is Theater & Every Business a Stage

“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 that’s not work or home. It’s the place our customers come for refuge.” Nancy Orsolini, District Manager

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

“Car designers need to create a story. Every car provides an opportunity to create an adventure. … “The Prowler makes you smile. Why? Because it’s focused. It has a plot, a reason for being, a passion.” Freeman Thomas, co-designer VW Beetle; designer Audi TT

Hmmmm(?): “Only” Words … Story Adventure Smile Focus Plot Passion

[Plot Williams Sonoma = 6 [was 10] Crate & Barrel = 8 Sharper Image = 9+ Smith & Hawken = 8+ Vermont Country Store = 8+ Garnet Hill = 9 L.L. Bean = 5 [was 9+] Land’s End = 7+ Colonial Williamsburg = ?]

And Now For A Nod To 1/7th of Our Economy!

“Medicine looks likely to change more in the next 20 years than it has in the last 200.” British Medical Journal (11-11-99)

Health Care Tsunami Prevention/Wellness/Fitness Proactive Engineering/Gene “stuff”[Blockbuster-Bazooka to Specific-Sniper’s Rifle] Holistic/Homeopathic/Non-traditional Patient-centric/Web-led No waste [Healtheon/WebMD et al.] Etc.

TP 03.26.00: AMA Riff

Are You Fighting Yesterday’s War? Docs don’t know it all. There are a lotta bad docs. There are a lotta bad medical decisions. “Hospitals” kill far too many people. (Bad decisions, bad execution.) Systemic waste is stratospheric. (Still.) Patients are getting (much) smarter. Patients have had it with HMOs. (And Docs with the “white-coat syndrome.”) You are not smarter than I am. (I am your partner.) You are not busier than I am. (!!!!!) Patients want more data. (And can readily get it.) Boomers will control their lives. Period. Medicine is about to be overwhelmed with a tsunami!

Confusing Message* Traditional indemnity: 37% to 11% [’94-’99; 77% in ’88] HMO: 23% to 30% PPO: 25% to 43% *Cut the waste & provide choice

Alternative Medicine More visits than to physicians Same $$$ expenditure [approx $27B] Stanford study: 2/3 use alt therapies “This is the first time in Western medical history that we have had a movement that is consumer driven.”/Dr. Woody Merrell, Center for Health and Healing, Beth Israel Hospital, Manhattan. [Merrell: Process = Partnership.] Source: Barron’s/05.15

SoftWatch (MS) “Manage relationships across the healthcare continuum”/ Amir Kishon Establish e-relationships with customers/retain customers/collect data Patients record info + receive feedback/ online access to nurses Community with others with MS Etc. Source: Start-Up

1965: “ ‘Doctor’ will see you now. ‘Doctor’ will take care of you.” YES, NURSE. ME GOOD PUPPY DOG. 1995: “HMO will take care of you.” BULLSHIT. 2005: “I will take care of me. I’d like your expert help.”* [*P.S.: THE VIAGRA, ETC.] I ORDERED ONLINE IS GREAT.]

Patient-centric* Health Care Wellness (Fix to prevent.) Partnership (“Tour guide” model.) RESPECT! (Mutual.) WOMEN RULE! *Not: HMO-centric, Employer-centric, Insurer-centric, Doc-centric

Reprise: Dawn of an Age of Self-Determination? E.g. … Brand You [end of corporate paternalism] D.I.Y. [the Internet] Boomers [“I’m in charge here!”] Health [“I’m in charge here!”]

“IT 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 Nordstrom and Jonas Ridderstrale, Funky Business

Context: “No” to “inevitable commoditization” S1: Lead the Customer! S2: Master e-commerce! S3: Women Rule! (and the elderly) S4: Design Rules! (too) S5: It’s the Experience! Net: Glorious Age of the BRAND!

Brand Outside BRAND POWER!

Brand It! Now, More Than Ever! “The increasing difficulty in differentiating between products and the speed with which competitors take up innovations will assist in the rise and rise of the brand.” Gillian Law and Nick Grant, Management [New Zealand]

No Room for Brands? Nike Saturn CNN America Online Charles Schwab Starbucks The Gap Intel Etc.

Brand = Trust! “Most buyers do not have a clue whether anybody else makes a better microprocessor, but ‘Intel Inside’ has become a ‘trust mark’ - a trademark that consumers put their faith in.” The Economist

What Can [Can’t] 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

“Salt is salt is salt. Right? Not when it comes in a blue box 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

T.T.D./Calling the Corporate Shrink! “Organizational Psychotherapy”/ WHO WE ARE!

Notes Page

  • This is The Big Enchilada: SPEND – lotsa – TIME ON IT!

Scott Bedbury/ Nike, Starbucks “A Great Brand taps into emotions. Emotions drive most, if not all, of our decisions. A brand reaches out with a powerful connecting experience. It’s an emotional connecting point that transcends the product. “A Great Brand is a story that’s never completely told. A brand is a metaphorical story that connects with something very deep - a fundamental appreciation of mythology. Stories create the emotional context people need to locate themselves in a larger experience.”

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, Tom’s of Maine

“Create a Cause, not a ‘business.’ ” Gary Hamel, Fortune (06.00), on re-inventing a company (Exemplar #1: Charles Schwab)

“In the funky village, real competition no longer revolves around marketshare. We are competing for attention – mindshare and heartshare.” Kjell Nordstrom and Jonas Ridderstrale, Funky Business

“Consumers don’t simply buy products, they buy attitudes as well. When confronted with proliferation and diversity, choices become increasingly informed by belief. [Consumers] want to know who is behind the products that they buy. They want to know the company. They want to know what you think.” Jesper Kunde, Corporate Religion

Brand = Special = Passion = Plot = Compelling Mythology = Cause = Connection = Caring

T.T.D./Assignment Y2K Write an essay on “Who we are.”* * Jesper Kunde, Corporate Religion

Notes Page

  • DO IT! 500 words.
  • [And then: 10 words.]

Brand Outside Reprise

Context: “No” to “inevitable commoditization” S1: Lead the Customer! S2: Master E-Commerce! S3: Women Rule! (and the elderly) S4: Design Rules! (too) S5: It’s the Experience! Net: Glorious Age of the BRAND!

[“Incrementalism is innovation’s worst enemy.” Nicholas Negroponte]

Lead the Customer: Why Tough Guts! Failures!

Re-invention via ecommerce: Why Tough Total commitment to total enterprise [and supply chain] reinvention! Yo, C.D.O.!!!!!!!!

Women’s Market: Why Tough Encompassing Attitude CULTURAL!

Design: Why Tough True-believer-dom-ship Encompassing/Cultural

Ing-ing/Experience: Why Tough What’s the Plot?/Total Reorientation

Brand Power: Why Tough Way of Life Forever! Passion Rules! Touches Everything! It Am Me [Personal!]

Message : Not for the Faint of Heart!* *Weenies need not apply

Part I: Brand Inside Part II: Brand Outside Part III: Brand Leadership

Brand Leadership Passion Rules!

Brand Leadership! “A key – perhaps the key – to leadership is the effective communication of a story.” Howard Gardner Leading Minds: An Anatomy of Leadership

“Leadership is a performance. You have to be conscious of your behavior, because everybody else is.” Carly Fiorina

“The challenge for IBM, AT&T and other mainstream companies is to re-instill a sense of adventure in recruits.” Burke Stinson, AT&T

Brand Leadership: ENTHUSIASM RULES! “I am a dispenser of enthusiasm”/ Ben Zander

Talent “War,” Marketplace “War” “The successful company has to create an environment that imbues its employees with a sense of passion.” Joe Nocera, eCompany, on David Pottruck

Sunshine … even if it kills you!

  • “It was much later that I realized Dad’s secret. He gained respect by giving it. He talked and listened to the fourth-grade kids in Spring Valley who shined shoes the same way he talked and listened to a bishop or a college president. He was seriously interested in who you were and what you had to say.
  • Sara Lawrence-Lightfoot, Respect

“The deepest human need is the ... NEED TO BE APPRECIATED.” William James

Ann Richards’ Dogma Show up! Know your message! PUT YOURSELF AT RISK EVERY DAY!

“If things seem under control, you’re just not going fast enough.” Mario Andretti

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