The Challenge: To Create More Value in All Negotiations

The Challenge: To Create More Value in All Negotiations

Tom Peters Re-Imagine! Leading Change, Driving Innovation, Achieving Excellence AERCE/Madrid/21March2006

Slides at Re-imagine! Not Your Fathers World I.

THREE BILLION NEW CAPITALISTS Clyde Prestowitz Re-imagine! Not Your

Fathers World II. Income Confers No Immunity as Jobs Migrate Headline/USA Today/02.2004

no job that is Americas God-given right Sydney Morning Herald/

25October2005 Qantas. Lay off thousands of mechanics. Maintenance to China. no job that is Australias

God-given Re-imagine! Not Your Fathers World III. A focus on cost-cutting and efficiency

has helped many organizations survive, but this approach will ultimately render Only the constant pursuit of innovation can ensure long-term success.

them obsolete. Daniel Muzyka, Dean, Sauder School of Business, Univ of British Columbia [The commitment to speede.g., Nissan 10 months] is being driven by a new innovation imperative. Competition is more intense than ever because of the

rise of the Asian powerhouses and the spread of disruptive new Internet technologies and business Companies realize that all of their attention to efficiency in the past half-decade was finebut its not

nearly enough. models. If they are to thrive in this hyper-competitive environment, they must innovate more and faster. The Generals Story.

(And Darwins) If you dont like change, youre going to like irrelevance even less.

General Eric Shinseki, Chief of Staff. U. S. Army It is not the strongest of the species that survives, nor the

most intelligent, but the one most responsive to change. Charles Darwin Everybodys Story.

One Singaporean worker costs as much as 3 in Malaysia 8 in Thailand 13 in China 18 in India. Source: The Straits Times/2003

One Singaporean worker costs as much as 3 in Malaysia 8 in Thailand 13 in China 18 in India. Source: The Straits Times/2003

Thaksinomics (after Thaksin Shinawatra, PM)/ Bangkok Fashion City: managed asset reflation

(add to brand value of Thai textiles by demonstrating flair and design excellence) Source: The Straits Times/2004 Better By Design: A National Strategy

NZ = Design Excellence New Zealand Thailand Spain Portugal

Ireland Singapore Taiwan Philippines UAE Chile MADE IN

TAIWAN: From Cheap Manufacturing to Chic Branding Headline/Advertising Age/06.05 Taiwan, Your Partner in

InnoValue Poster/Bucharest/03.06 1. Re-imagine Permanence: The Emperor Has No Clothes!

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 I am often asked by would-be entrepreneurs seeking escape from life

within huge corporate structures, How do I build a small firm for myself? The Buy a very large one and just wait. answer seems obvious:

Paul Ormerod, Why Most Things Fail: Evolution, Extinction and Economics Lessons Learned. GE. Me. 4/40

Decentral-iza-tion! Ex-ecution! Account-abil-ity! 6:15A.M

. 2. Re-imagine: Innovate or Die!!

No Option! Under his former boss, Jack Welch, the skills GE prized above all others were cost-cutting, efficiency and dealmaking. What mattered was the continual improvement of operations, and that mindset helped the $152 billion industrial and finance behemoth become a marvel of earnings consistency. Immelt hasnt turned his back on

But in his GE, the new imperatives are risk-taking, sophisticated marketing and, above all, innovation. BW/2005

the old ways. Resi st! When asked to name just one big merger that had lived up to expectations, Leon Cooperman, former cochairman of

Goldman Sachs Investment Policy Im sure there are success stories out there, but at this moment I draw a blank. Mark Committee, answered:

Sirower, The Synergy Trap Different !* Companies have defined so much

best practice that they are now more or less identical. Jesper Kunde, Unique Now ... or Never [Immelt] is now identifying

technologies with which GE systematically set out to build entirely new industries will

Strategy+Business, Fall 2005 Summary: WallopWal*Mart1

6* *Or: Why its so unbelievably easy to beat a GIANT Company The Small Guys Guide: Wallop Wal*Mart16 *Niche-aimed. (Never, ever all things for all people, a miniWal*Mart.) *Never attack the monsters head niche business and lukewarm customers.)

*Dramatically on! (Instead steal Different (La Difference ... within our community, our industry regionally, etc

is as obvious as the end of ones nose!) (THIS IS WHERE MOST MIDGETS COME UP SHORT.) *Compete on value/experience/intimacy, not price. (You aint gonna beat the behemoths on cost-price in 9.99 out of 10 cases.)

*Emotional bond with Clients, BIGGIES ON EMOTION/CONNECTION!!) Vendors. (BEAT THE Focus! Focus: All Strategy Is Local:

True competitive advantages are harder to find and maintain than people realize. The odds are best in tightly drawn markets, not big,

sprawling ones Title/ Bruce Greenwald & Judd Kahn/HBR09.05 Big Winners Lousy industry Specialty (No competition) Smaller than competitors Sweet spot

Agility Discipline FOCUS 4 Traits: Source: Alfred Marcus, Big Winners and Big Losers: The 4 Secrets of Long-term Business and Failure We will not, I

repeat not, pretend to be all things to all people. CEO, Investec (03.06) Easy!

Innovations 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 We become who we hang out with! Measure Strangeness/Portfolio Quality Staff

Consultants Vendors Out-sourcing Partners (#, Quality) Innovation Alliance Partners Customers Competitors (who we benchmark against) Strategic Initiatives Product Portfolio (LineEx v. Leap)

IS/IT Projects HQ Location Lunch Mates Language Board Har

Is at the Top of the Bottle Where are you likely to find people with the least diversity of experience, the largest investment in the past, and the greatest reverence for industry dogma: At the

BOLD! Beware of the tyranny of making Small Changes to Small Things. Rather,

Big Changes to Big Things. make Roger Enrico, former Chairman, PepsiCo

Five MYTHS About Changing Behavior *Crisis is a powerful impetus for change *Change is motivated by fear *The facts will set us free *Small, gradual changes are always easier to make and sustain

*We cant change because our brains become hardwired early in life Source: Fast Company/05.2005 Reward excellent failures. Punish

mediocre successes. Phil Daniels, Sydney exec Action !

Execution is the job of the business leader. Larry Bossidy & Ram Charan/ Execution: The Discipline of Getting Things Done

Execution is a systematic process of rigorously

discussing hows and whats, tenaciously following through, and ensuring accountability. Larry Bossidy & Ram Charan/ Execution: The Discipline of Getting Things Done Speed/ Tempo!

We dont sell insurance anymore. We sell speed. Peter Lewis, Progressive

Measurable! Innovation Index: How many of your Top 5 Strategic Initiatives/Key Projects score 8 or higher (out of 10) on a Weirdness/

Profundity/ Wow/ Gaspworthy/ Game-changer Scale? Personal! Buy a Mirror!

Step #1: The First step in a dramatic organizational change program is obvious dramatic personal change! RG

3. Re-imagine Organizing I: IS/ IT as Disruptive Tool! We all live in

DellWal*MarteBay-Google World! Power Tools for Power Solutions/ Strategies!

TP 4. Re-imagine Businesss Fundamental Value Proposition: Fighting Inevitable Commoditization

via The Gamechanging Solutions Imperative. Up, Up, Up,

Up the Value-added Ladder. $55 B And the M Stands for ?

Systems Integrator of choice./BW Gerstners IBM: (Lou, help us turn all this into that longpromised revolution. ) IBM Global Services*

Services Corp.): (*Integrated Systems $55B Big Browns New Bag: UPS

Traffic Manager for Corporate America Aims to Be the

Headline/BW/2004 Huge: Customer Satisfaction versus Customer

Success The Value-added Ladder/Stuff n Things Goods Raw Materials

The Value-added Ladder/Stuff & Transactions Services Goods Raw Materials The Value-added Ladder/Opportunity-seeking

Gamechanging Solutions/ Business Advantage Services Goods Raw Materials 5. Re-imagine

Enterprise as Theater I: A World of Scintillating Experiences. Experiences are as distinct

from services as services are from goods. Joe Pine & Jim 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 The Value-added Ladder/Memorable Connection Scintillating Experiences Gamechanging Solutions/ Business Advantage

Services Goods Raw Materials Beyond the Transaction/ Satisfaction Mentality Good hotel/ Happy guest/ Exceeded Expectations

vs. Great Vacation/ Great Conference/ Operation Personal Renewal One companys answer:

CXO* 6. Re-imagine Enterprise as Theater II: Embracing the Dream

Business. 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 The Value-added Ladder/Emotion

Dreams Come True Scintillating Experiences Gamechanging Solutions/ Business Advantage Services Goods Raw Materials

Furniture vs. Dreams We do not sell furniture at We sell dreams. This is Domain.

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 IBM, UPS Dream Merchants !

C DM* 7. Re-imagine the Soul of New Value: Design

Rules! All Equal Except At Sony we assume that all products of our competitors have basically the same technology, price, performance and

Design is the only thing that differentiates one product from another in the marketplace. features. Norio Ohga

Design is treated like a religion at BMW. Fortune

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 Design is the fundamental soul

of a man-made creation. of design. Steve Jobs Design at

Apple/ Starbucks/BMW is a state of mind , not a program. 8. Re-imagine the

Fundamental Selling Proposition: It all adds up to (THE BRAND.) (THE STORY.) (THE DREAM.) The Love.

Brands have run out of juice. Theyre dead. Kevin Roberts/Saatchi &

Saatchi Kevin Roberts: Lovemarks! Tattoo Brand: What % of users would tattoo

the brand name on their body? Top 10 Tattoo Brands* Harley . 18.9% Disney .... 14.8 Coke . 7.7 Google .... 6.6

Pepsi .... 6.1 Rolex . 5.6 Nike . 4.6 Adidas . 3.1 Absolut . 2.6 Nintendo . 1.5 *BRANDsense: Build Powerful Brands through Touch, Taste, Smell, Sight, and Sound, Martin Lindstrom

Up, Up, Up, Up

the Value-added Ladder. Lovemark Dreams Come True Awesome Experiences Gamechanging Solutions Services Goods

Raw Materials C L O*

*Chief Lovemark Officer R C *Chief

O* Revenue Officer 9. Re-imagine the Customer I: Trends

Worth Trillion$$$ Women Roar. Women are the

majority market ????????? Home Furnishings 94% Vacations 92% (Adventure Travel 70%/ $55B travel equipment) Houses 91% D.I.Y. (major home projects) 80%

Consumer Electronics 51% (66% home computers) Cars 68% (90%) All consumer purchases 83% Bank Account 89% Household investment decisions 67% Small business loans/biz starts 70% Health Care 80%

The Perfect Answer Jill and Jack buy slacks in black Read This Book EVEolution: The Eight

Truths of Marketing to Women Women dont buy They join them.

brands. EVEolution 1. Men and women are different. 2. Very different. 3. VERY, VERY DIFFERENT. 4. Women & Men have a-b-s-o-l-u-t-e-l-y

nothing in common. 5. Women buy lotsa stuff. 6. WOMEN BUY A-L-L THE STUFF. 7. Womens Market = Opportunity No. 1. 8. Men are (STILL) in charge. 9. MEN ARE TOTALLY, HOPELESSLY CLUELESS ABOUT WOMEN. 10. Womens Market = Opportunity No. 1.

10. Womens Market = Opportunity Why?

2005 Good Thinking, Guys! Kodak Sharpens Digital Focus On Its Best Customers: Women

10. Re-imagine the Customer II: Trends Worth Trillion$$$ Boomer Bonanza/ Godzilla Geezer.

2000-2010 Stats 18-44: -1% 55+: +21% (55-64: +47%) B78/60

44-65: New Customer Majority * *45% larger than 18-43; 60% larger by 2010 Source: Ageless Marketing, David Wolfe & Robert Snyder The New Customer Majority is the only adult

market with realistic prospects for significant sales growth in dozens of product lines for thousands of companies. David Wolfe & Robert Snyder, Ageless Marketing

11. Re-imagine the Individual I: Welcome to a Brand You World

Distinct or Extinct Globalization1.0: Countries globalizing (1492-1800) Globalization2.0: Companies globalizing (18002000) Globalization3.0 : Individuals collaborating

& competing globally (2000+) Source: Tom Friedman/The World Is Flat If there is nothing very special about your

work, no matter how hard you apply yourself you wont get noticed, and that increasingly means you wont get paid much either. Michael Goldhaber, Wired You are the

storyteller of your own life, and you can create your own legend or not. Isabel Allende The Rule of Positioning

If you cant describe your position in eight words or less, you dont have a position. Jay Levinson and Seth

Godin, Get What You Deserve! Distinct or Extinct 12. Re-imagine

Excellence I: The Talent Obsession. The Creative Age is a

wide-open game. Richard Florida, The Rise of the Creative Class Human creativity is the ultimate economic

resource. Richard Florida, The Rise of the Creative Class Brand =


RESOURCES. Source: Juan Enriquez/As the Future Catches You The leaders of Great Groups love talent and know where to find it. They revel in

the talent of others. Warren Bennis & Patricia Ward Biederman, Organizing Genius Hire very good people!

From 1, 2 or youre out [JW] to Best Talent in each industry segment to build best proprietary intangibles [EM] Source: Ed Michaels, War for Talent

We believe companies can increase their market cap 50 percent in 3 years. Steve Macadam at Georgia- changed 20 of his 40 box plant managers to put more talented, higher paid managers in charge. He increased profitability from $25 million to $80

million in 2 years. Ed Michaels, War for Talent Pacific The Cracked Ones Let in the Light Our business needs a massive transfusion of talent, and talent, I believe, is most

nonconformists, dissenters and rebels. likely to be found among David Ogilvy

A review of Jack and Suzy Welchs Winning claims there are but two key differentiators that set GE culture apart from the herd: First: Separating financial forecasting and performance measurement. Performance measurement based, as it usually is, on budgeting leads to an epidemic of gaming the system. GEs performance measurement is divorced from budgetingand instead reflects how you do relative to your past performance and relative to competitors performance; ie its about how you

actually do in the context of what happened in the real world, not as compared to a gamed-abstract plan developed last year. Second: Putting HR on a par with finance and marketing.

DD$21 M HR doesnt tend to hire a lot of independent thinkers or people who stand up as moral

compasses. Garold Markle, Shell Offshore HR Exec (FC/08.05) Our Mission To develop and manage talent; to apply that talent, throughout the world,

for the benefit of clients; to do so in partnership; to do so with profit. WPP No Excuses! Wegmans:

#1 100 Best Companies to Work for 84%: Grocery stores are all alike 46%: additional spend if customers have an emotional connection to a grocery store rather than are satisfied (Gallup)

Going to Wegmans is not just shopping, its an event. Christopher Hoyt, grocery consultant You cannot separate their strategy as a retailer from their strategy as an employer. Darrell Rigby, Bain & Co.

Marcus Rules Marcus Buckingham: The one Thing You Need to Know No matter what the situation, [the great managers] first response is

always to think about the individual concerned and how things can be arranged to help that individual experience success. Marcus Buckingham, The One Thing You Need to Know The key difference between

checkers and chess is that in checkers the pieces all move the same way, whereas in chess all the pieces move differently. Discover what is unique about each person and capitalize on it. Marcus Buckingham, The One Thing You Need to Know

The mediocre manager believes that most things are learnable and therefore that the essence of management is to identify ach persons weaker areas and eradicate them. The great manager believes the opposite. He

believes that the most influential qualities of a person are innate and therefore that the essence of management is to deploy these innate qualities as effectively as possible and so drive performance.

13. Re-imagine Excellence II: Meet the New Boss Women Rule!

AS LEADERS, WOMEN RULE: New Studies find that female managers outshine their male counterparts in almost every measure Title, Special Report/BusinessWeek

Womens Strengths Match New Economy Imperatives: Link [rather than rank] workers; favor interactive-collaborative leadership style [empowerment beats top-down decision making]; sustain fruitful collaborations; comfortable with sharing information; see redistribution of power as victory, not surrender; favor multi-dimensional feedback; value technical & interpersonal skills,

individual & group contributions equally; readily accept ambiguity; honor intuition as well as pure rationality; inherently flexible; appreciate cultural diversity. Judy B. Rosener, Americas Competitive Secret: Women Managers For all the myths of equality that Europe

tells itself, the Continent is by and large a woeful place for a woman who aspires to lead. Newsweek/0227.06 To be a leader in consumer

products, its critical to have leaders who represent the population we serve. Steve Reinemund/PepsiCo

14. Re-imagine Excellence III: New Education for a New World. My wife and I went to a [kindergarten] parent-teacher conference and were informed that our budding

refrigerator artist, Christopher, would be receiving a grade of Unsatisfactory in art. We were shocked. How could any childlet alone our childreceive a poor grade His teacher informed us that he had refused to color within the lines, which was a state

requirement for demonstrating gradelevel motor skills. in art at such a young age? Jordan Ayan, AHA! 15 Leading Biz Schools

Design/Core: 0 Design/Elective: 1 Creativity/Core: 0 Creativity/Elective: 4 Innovation/Core: 0 Innovation/Elective: 6

Source: DMI/Summer 2002 Research by Thomas Lockwood 15. Re-imagine Leadership for Totally Screwed-Up Times:

The Passion Imperative. Create a Cause! Management has a lot to do

with answers. Leadership is a function of questions. And the first question for a leader always Who do we intend to be? is:

Not What are we going to do? but Who do we intend to be? Max De Pree, Herman Miller People want to be part of something larger than themselves. They want to be part of

something theyre really proud of, that theyll fight for, sacrifice for , trust. Howard Schultz, Starbucks (IBD/09.05) Ah, kids: What is your vision for the future? What have you accomplished since your

first book? Close your eyes and imagine me immediately doing something about what youve just said. What would it be? Do you feel you have an obligation to Make the world a better place?

Find em! Leaders do people. Period.

Anon. Respect em! It was much later that I realized Dads 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 He was seriously interested in who you were and what you had to say. president.

Sara Lawrence-Lightfoot, Respect Amen! What creates trust, in the end, is the leaders manifest

respect for the followers. Jim OToole, Leading Change Make It a Grand Adventure!

Quests ! Organizing Genius / Warren Bennis and Patricia Ward Biederman Groups become great only when everyone in them, leaders and

members alike, is free to do his or her absolute best. The best thing a leader can do for a Great Group is to allow its members to discover their greatness.

Yes!!!!!!!!!!!!!!!!! free to do his or her absolute best allow its members to discover their greatness.

The role of the Director is to create a space where the actor or actress can become more than theyve ever been before, more than

theyve dreamed of being. Robert Altman, Oscar acceptance We are a life Success Company

Trumpet an Exhilarating Story! Best Story Wins! A key perhaps the key to leadership is

the effective communication of a story. Howard Gardner/Leading Minds: An Anatomy of Leadership

Live Your Story! MBWA* *HS/25+ You must

be the change you wish to see in the world. Gandhi

You = Your calendar* *Calendars NEVER lie!! Im always stopping by our stores

at least 25 a week. Im also in other places: Home Depot, Whole Foods, Crate & Barrel. I try to be

a sponge to pick up as much as I can. Howard Schultz Try It! Sams Secret #1!

Insist on Speed! If things seem under control, youre just not going fast

enough. Mario Andretti Demand Action! This is so simple it sounds stupid, but it is amazing how few oil people really

you only find oil if you drill wells. understand that You may

think youre finding it when youre drawing maps and studying logs, but you have to drill. Source: The Hunters, by John Masters, Canadian O & G wildcatter Cut the Nonsense!

GE has set a standard of candor. There is no puffery. There isnt an ounce of denial in the place. Kevin Sharer, CEO Amgen, on the GE mystique (Fortune)

Dispense Enthusiasm! Nothing is so contagious as enthusiasm. Samuel Taylor Coleridge

Most important, upped the energy level at he Motorola.

Fortune on Ed Zander/08.05 A man without a smiling face must not open a shop. Chinese Proverb*

*Courtesy Tom Morris, The Art of Achievement Engaged. Tell me, what is it you plan to do with your one wild

and precious life? Mary Oliver Radiate Passion! Charles Handy on the Alchemists:

Passion was what drove passion for their product, passion these people,

for their cause. If you care enough, you will find out what you need to know. Or you will experiment and not worry if the experiment goes wrong. Passion

as the secret to learning is an odd secret to propose, but I believe that it works at all levels and at all ages. Sadly, passion

is not a word often heard in the elephant organizations, nor in schools, where it can seem disruptive. Keep It Simple!

Sir Richards Rules: Follow your passions. Keep it simple. Get the best people to help you. Re-create yourself. Play.

Source: Fortune on Branson JWs 4Es Energy Enthusiasm Edge* Execution

*Speed, RFA, Competitive Avoid Moderation! Kevin Roberts Credo 1. Ready. Fire! Aim. 2.

3. 4. 5. 6. 7. 8. 9.

If it aint broke ... Break it! Hire crazies. Ask dumb questions. Pursue failure. Lead, follow ... or get out of the way! Spread confusion. Ditch your office. Read odd stuff.

10. Avoid moderation! Avoid Moderation! 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

Free the Lunatic Within! You cant behave in a calm, rational manner. Youve got

to be out there on the lunatic fringe. Jack Welch

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