Tom Peters’ 2002 We Are In a brawl With No Rules! Mercatus/01. 24. 2002



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Tom Peters’ 2002 We Are In A Brawl With No Rules! Mercatus/01.24.2002


All Slides Available at … tompeters.com



Confusion Reigns.



“There will be more confusion in the business world in the next decade than in any decade in history. And the current pace of change will only accelerate.” Steve Case



<1000A.D.: paradigm shift: 1000s of years 1000: 100 years for paradigm shift 1800s: > prior 900 years 1900s: 1st 20 years > 1800s 2000: 10 years for paradigm shift 21st century: 1000X tech 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



The Destruction Imperative.



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



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



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



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



“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



The [New] Ge Way DYB.com



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



“Chivalry is dead. The new code of conduct is an active strategy of disrupting the status quo to create an unsustainable series of competitive advantages. This is not an age of defensive castles, moats and armor. It is rather an age of cunning, speed and surprise. It may be hard for some to hang up the chain mail of ‘sustainable advantage’ after so many battles. But hypercompetition, a state in which sustainable advantages are no longer possible, is now the only level of competition.” Rich D’Aveni, Hypercompetition: Managing the Dynamics of Strategic Maneuvering



New Org I: A White Collar Revolution.



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



IBM’s Project eLiza!



“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



New Org II: IS/IT … “On the Bus” or “Off the Bus.”



Dell’s OptiPlex Facility Big Job: 6 to 8 hours. (80,000 per day) Parts Inventory: 100 square feet.



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



“There’s no use trying,” said Alice. “One can’t believe impossible things.” “I daresay you haven’t had much practice,” said the Queen. “When I was your age, I always did it for half an hour a day. Why, sometimes I’ve believed as many as six impossible things before breakfast.” Lewis Carroll



I’net … … allows you to dream dreams you could never have dreamed before!



“Suppose - just suppose - that the Web is a new world we’re just beginning to inhabit. We’re like the earlier European settlers in the United States, living on the edge of the forest. We don’t know what’s there and we don’t 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 doesn’t hold here, and uncommon sense hasn’t yet emerged.” David Weinberger, Small Pieces Loosely Joined



New Org III: The … SOLUTIONS IMPERATIVE.



Animating Force: The Sameness Trap



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



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



The Big Day!



09.11.2000: HP bids $18,000,000,000 for PricewaterhouseCoopers consulting business!



“These days, building the best server isn’t enough. That’s the price of entry.” Ann Livermore, Hewlett-Packard



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



“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)



“Assetless Company” John Bryan, CEO, on selling all Sara Lee’s manufacturing



“Don’t own nothin’ if you can help it. If you can, rent your shoes.” F.G.



New Org IV: Re-inventing the Individual … Ahoy BRAND YOU.



2010 “Demographics”: By 2010, full-time workers will be in the minority Source: MIT study (28August2000)



New World of Work < 1 in 10 F500 #1: Manpower Inc. Freelancers/I.C.: 16M-25M Temps: 3M (incl. CEOs & lawyers) Microbusinesses: 12M-27M Total: 31M-55M Source: Daniel Pink, Free Agent Nation



“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



“My ancestors were printers in Amsterdam from 1510 or so until 1750, and during that entire time they didn’t have to learn anything new.” Peter Drucker, Business 2.0 (08.22.00)



“Knowledge becomes obsolete incredibly fast. The continuing professional education of adults is the No. 1 industry in the next 30 years … mostly on line.” Peter Drucker, Business 2.0 (22August2000)



Message: Distinct … or Extinct.



Brand You, Big Time! I AM AN ARMY OF ONE



New Org V: Brand = Talent



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



From “1, 2 or you’re out” [JW] to … Best Talent in each industry segment to build best proprietary intangibles” [EM] Source: Ed Michaels, War for Talent (05.17.00)



“Diversity defines the health and wealth of nations in a new century. Mighty is the mongrel. … The hybrid is hip. The impure, the mélange, the adulterated, the blemished, the rough, the black-and-blue, the mix-and-match – these people are inheriting the earth. Mixing is the new norm. Mixing trumps isolation. It spawns creativity, nourishes the human spirit, spurs economic growth and empowers nations.” G. Pascal Zachary, The Global Me: New Cosmopolitans and the Competitive Edge



New Org VI: THINK WEIRD … the H.V.A. Bedrock.



THINK WEIRD: The High Standard Deviation Enterprise.



Saviors-in-Waiting Disgruntled Customers Off-the-Scope Competitors Rogue Employees Fringe Suppliers Wayne Burkan, Wide Angle Vision: Beat the Competition by Focusing on Fringe Competitors, Lost Customers, and Rogue Employees



COMPETITORS: “The best swordsman in the world doesn’t need to fear the second best swordsman in the world; no, the person for him to be afraid of is some ignorant antagonist who has never had a sword in his hand before; he doesn’t do the thing he ought to do, and so the expert isn’t prepared for him; he does the thing he ought not to do and often it catches the expert out and ends him on the spot.” Mark Twain



New Org VII: Tomorrow’s Organizations … Itinerant Potential Machines.



TALENT POOL TO DIE FOR. Youthful. Insanely energetic. Value creativity. Risk taking is routine. Failing is normal … if you’re stretching. Want to “make their bones” in “the revolution.”Love the new technologies. Well rewarded. Don’t plan to be around 10 years from now.



TALENT POOL PLUS. Seek out and work with “world’s best” as needed (it’s often needed). “We aim to change the world, and we need gifted colleagues—who well may not be on our payroll.”



BRASSY-BUT-GROUNDED-LEADERSHIP. Say “I don’t know”—and then unleash the TALENT. Have a vision to be DRAMATICALLY DIFFERENT—but don’t expect the co. to be around forever. Will scrap pet projects, and change course 180 degrees—and take a big write-off in the process. NO REGRETS FROM SCREW-UPS WHOSE TIME HAS NOT-YET-COME. GREAT REGRETS AT TIME & $$$ WASTED ON “ME TOO” PRODUCTS AND PROJECTS.



BRASSY-BUT-GROUNDED-LEADERSHIP. (Cont.) “Visionary” leaders matched by leaders with shrewd business sense: “HOW DO WE TURN A PROFIT ON THIS GORGEOUS IDEA?” Appreciate “market creation” as much as or more than “market share growth.” ARE INSANELY AWARE THAT MARKET LEADERS ARE ALWAYS IN PRECARIOUS POSITIONS, AND THAT MARKET SHARE WILL NOT PROTECT US, IN TODAY’S VOLATILE WORLD, FROM THE NEXT KILLER IDEA AND KILLER ENTREPRENEUR. (Gates. Ellison. Venter. McNealy. Walton. Case. Etc.)



ALLIANCE MANIACS. Don’t assume that “the best resides within.” WORK WITH A SHIFTING ARRAY OF STATE-OF-THE-ART PARTNERS FROM ONE END OF THE “SUPPLY CHAIN” TO THE OTHER. Including vendors and consultants and … especially … PIONEERING CUSTOMERS … who will “pull us into the future.”



TECHNOLOGY-NETWORK FANATICS. Run the whole-damn-company, and relations with all outsiders, on the Internet … at Internet speed. Reluctant to work with those who don’t share this (radical) vision.



POTENTIAL MACHINES-ORGANISMS. Don’t know what’s coming next. But are ready to jump at opportunities, especially those that challenge-overturn our own “way of doing things.”



New Org VII+: NewGov2002.



WE NEED … IDEAS!



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



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



From: Weapon v. Weapon To: Org structure v. Org structure



Ideas > Leadership



NO: “Good gov’t” YES: EFFECTIVE Gov’t (in altered/ambiguous times)



A Plea for “virtual [RESPONSIVE] government”



Agile.



WALLS MUST FALL!



“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)



“Once devised in Riyadh, the tasking order took hours to get to the Navy’s six aircraft carriers—because 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



The W.O.G. (Work-of-Government): Insta- Targeted WPTs (WOW (B.H.A.G.) Project Teams (with clout) )



Experiments rule!



Failures rule!



Talent matters!



IS/IT to the Max!



Streamlined procurement (esp. IS/IT)



“THE MARINES LEARN NEW TACTICS—FROM WAL*MART”—Business Week (12.24.2001)





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