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Title: NOTE: To appreciate this presentation and insure that it is not a mess, you need Microsoft fonts: Sh


1
NOTE To appreciate this presentation and
insure that it is not a mess, you need Microsoft
fonts Showcard Gothic, Ravie, Chiller
and Verdana
2
Part 1.2Tom Peters EXCELLENCE.
ALWAYS.NEW MASTER/21 August 2008
3
Slides at tompeters.com
4
Ten PartsP1.1, P1.2, P1.3,
P1.4/GenericP2/LeadershipP3/TalentP4/Value-add
ed LadderP5/New Markets P6/The
EquationsP7.1/ImplementationP7.2/ActionP8/13
Guru GaffesP9/HealthcareP10/The Lists
5
Part 1.2
6
The model for my MASTER presentation has
historically been Linearconsistent with my
engineering background and perhaps my 50 or so
of German genetic material. (Peters, for heaven's
sakeGranddad Peters, a contractor-engineer, came
to the U.S. in the 1870s.) But in my oral
presentations I found I often never got around to
the punchline. So in November 2007, preparing for
a speech in Madrid, I decided, The hell with it,
Im going to organize by importance of the topic
by my reckoning, and put first things firstand
the heck with linearity. That in turn coincided
with my decision to re-emphasize the basics
that often go missing but which are the bedrock
for getting things done in the real world. The
result, for now, seven months later, is this New
Annotated Master. All yours
7
10
8
EVERYTHING YOU THOUGHT YOU KNEW ABOUT
INNOVATION IS WRONG
9
What We Know For Sure About InnovationBig
mergers by large dont workScale is
over-ratedStrategic planning is the last refuge
of scoundrelsFocus groups are counter-productive
Built to last is a chimera (stupid)Success
killsForgetting is impossibleRe-imagine is a
charming ideaOrderly innovation process is an
oxymoronic phrase ( Believed only by morons
with ox-like brains)Tipping points are easy to
identify long after they will do you any
goodFacts arentAll information making it to
the top is filtered to the point of danger and
hilaritySuccess stories are the illusions of
egomaniacs (and gurus)If you believe the
memoirs of CEOs you should be institutionalizedH
erd behavior (XYZ is hot) is ubiquitous and
amusingTop teams are DittoheadsCEOs have
little effect on performanceExpert prediction
is rarely better than rolling the dice
10
Nobody knows anything William Goldman
11
The Mess Is The Message! Period!
12
What makes God laugh?
13
People making plans!
14
The Mess Is The Message! Period!
15
NOTE few ideas are more importantand more
honored in the breach. Innovation is MESSY to
the extreme. Such an assertion (reality!)
determines the success of innovation
strategies, perhaps the wrong word. This
unfolding story is one of the most important in
my efforts to alter enterprise thinking.
16
First-level Scientific SuccessBeyond Brains
17
First-level Scientific SuccessThe smartest guy
in the room winsOr
18
First-level Scientific SuccessFanaticismPersist
ence-Dogged TenacityPatience (long
haul/decades)-Impatience (in a hurry/do it
yesterday)PassionEnergyRelentlessness
(Grant-ian) EnthusiasmDriven (nuts!) (Brutal?)
CompetitivenessEntrepreneurialPragmatic
(R.F!A.)Scrounge (gets the logistics-infrastruc
ture bit)Master of Politics (internal-external)T
actical GeniusPursuit of (Oceanic)
Excellence!High EQ/Skillful in Attracting
Keeping Talent/MagneticProlific (ground up more
pig brains)EgocentricSense of
History-DestinyFuturistic-In the
MomentMono-dimensional (Work-life balance?
Ha!)Exceptionally IntelligentExceptionally
Clever (methodological shortcuts/methodological
genius)Luck
19
Blitzkrieg?
20
Case RealityGermans cross Meuse into France.
Whoops French intelligence completely drops the
ball. (Loses track of the Germansno
kidding.)Germans keep advancing outrun supply
lines no land-air co-ordination. Hitler orders
advance stopped.General never gets the word.
General marches to Paris, virtually
unopposed.Germans shocked.After the fact,
Germans label it Blitzkrieg.
21
Case Lessons LearnedDo something.Get lucky.
Attribute luck to superior planning.Get medals.
22
Blitzkrieg in fact emerged in a rather haphazard
way from the experience of the French campaign,
whose success surprised the Germans as much as
the French. Why otherwise did the High Command
try on several occasions, with Hitlers backing,
to slow the panzers down. The victory in France
partly came about because the German High Command
temporarily lost control of the battle. Julian
Jackson, The Fall of France The Nazi Invasion
of 1940
23
Happy 50!26April2006
24
An Economic Interpretation of the Constitution
of the United States Charles Beard (1913)The
Box How the Shipping Container Made the World
Smaller and the World Economy Bigger Marc
LevinsonTube The Invention of Television
David Marshall Fisher Empires of Light
Edison, Tesla, Westinghouse, and the Race to
Electrify the World Jill JonnesThe Soul of a
New Machine Tracy KidderRosalind Franklin
The Dark Lady of DNA Brenda MaddoxThe
Blitzkrieg Myth John Mosier
25
NOTE Containerization was 50 last year. The
story of its development is a thriller by any
standardand a brilliant exemplar of the tortuous
path from inkling to reality.
26
LessonsNeed-drivenA thousand
parentsMessyEvolutionaryTrivialRelentless
ExperimentationTrial many, many eRRORsReal
heroes seldom around when the battle is
wonLoooong time for systemic adaptation/s(many
innovations) (bill of lading, standard time)Not
Plan-drivenThe product of Strategic
Thinking/PlanningThe product of focus groups
27
Containerization is a remarkable achievement. No
one foresaw how the box would transform
everything it touchedfrom ships and ports to
patterns of global trade. Containerization is a
monument to the most powerful law in economics,
that of unanticipated consequences. This
history ought to be humbling to fans of modern
management methods. Careful planning and thorough
analysis, those business school basics, may have
their place, but they provide little guidance in
the face of disruptive changes that alter an
industrys very fundamentals. Marc Levinson,
FT, 0425.06 (author of The Box How the Shipping
Container Made the World Smaller and the World
Economy Bigger)
28
New technology, by itself, has little economic
benefit. The economic benefits arise not from
innovation itself, but from the entrepreneurs who
eventually discover ways to put innovation to
practical use and, most critically, from the
organizational changes through which businesses
reshape themselves to take advantage of new
technology. Marc Levinson, The Box How the
Shipping Container Made the World Smaller and
the World Economy Bigger
29
and, most critically, from the organizational
changes through which businesses reshape
themselves to take advantage of new technology.
Marc Levinson, The Box How the Shipping
Container Made the World Smaller and the World
Economy Bigger
30
Utterback
31
A pattern emphasized in the case studies in this
book is the degree to which powerful competitors
not only resist innovative threats, but actually
resist all efforts to understand them, preferring
to further their positions in older products.
This results in a surge of productivity and
performance that may take the old technology to
unheard of heights. But in most cases this is a
sign of impending death. Jim Utterback,
Mastering the Dynamics of Innovation
32
Recently I asked several corporate executives
what decisions they had made in the last year
that would not have been made were it not for
their corporate plans. All had difficulty
identifying one such decision. Since all of the
plans are marked secret or confidential, I
asked them how their competitors might benefit
from possession of their plans. Each answered
with embarrassment that their competitors would
not benefit. Russell Ackoff (from Henry
Mintzberg, The Rise and Fall of Strategic
Planning)
33
Apparently our society, not unlike the Greeks
with their Delphic oracles, takes great comfort
in believing that very talent seers removed
from the hurly-burly world of reality can tell
foretell coming events. Len Sayles/Columbia
34
The Perils of Conservatism/Industry
Leadership 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 Innovators Dilemma
35
Toms source code The eight iconic books
which are the Wellsprings of my operating values
and core assumptions05.22.07
36
Fooled by Randomness The Hidden Role of Chance
in Life and the Markets, Nassim Nicholas Taleb
The Black Swan The Impact of the Highly
Improbable, Nassim Nicholas Taleb Expert
Political Judgment How Good Is It? How Can We
know? Philip Tetlock The Difference How the
Power of Diversity Creates Better Groups, Firms,
Schools, and Societies, Scott Page The Wisdom of
Crowds, James Surowiecki Full House The Spread
of Excellence from Plato to Darwin, Stephen Jay
Gould Judgment under Uncertainty Heuristics
and Biases, Daniel Kahneman, Paul Slovic, and
Amos Tversky A Mind of Its Own How Your Brain
Distorts and Deceives, Cordelia Fine
37
Fooled by Randomness The Hidden Role of Chance
in Life and the Markets, Nassim Nicholas Taleb
This book is about luck disguised and perceived
as non-luck (that is, skills) and more generally
randomness disguised and perceived as
non-randomness. It manifests itself in the shape
of the lucky fool, defined as a person who
benefited from a disproportionate share of luck
but attributed his success to some other,
generally precise reason. The Black Swan
The Impact of the Highly Improbable, Nassim
Nicholas Taleb Expert Political Judgment How
Good Is It? How Can We know? Philip Tetlock A
fox, the thinker who knows many little things,
draws from an eclectic array of disciplines, and
is better able to improvise in response to
changing events, is more successful in
predicting the future than the hedgehog, who
knows one big thing, toils devotedly within one
tradition, and imposes formulaic solutions on ill
defined problems. The Difference How the
Power of Diversity Creates Better Groups, Firms,
Schools, and Societies, Scott Page Diverse
groups of problem solversgroups of people with
diverse toolsconsistently outperformed groups of
the best and the brightest. If I formed two
groups, one random (and therefore diverse) and
one consisting of the best individual performers,
the first group almost always did better.
Diversity trumped ability. The Wisdom of
Crowds, James Surowiecki Full House The Spread
of Excellence from Plato to Darwin, Stephen Jay
Gould Judgment under Uncertainty Heuristics
and Biases, Daniel Kahneman, Paul Slovic, and
Amos Tversky A Mind of Its Own How Your Brain
Distorts and Deceives, Cordelia Fine Your
brain has some shifty habits that leave the truth
distorted and disguised. Your brain is
vainglorious. Its emotional and immoral. It
deludes you. It is pigheaded, secretive and weak
willed. Oh, and its also a bigot.
38
The (Strange) Case of Peter Drucker Michael
Porter vs. The Non-linearistsHERBERT SIMON.
(Administrative Behavior.) JAMES MARCH. KARL
WEICK. (The Social Psychology of Organizing.)
EUGENE WEBB. Henry MINTZBERG. (The Rise and
Fall of Strategic Planning.) JAMES UTTERBACK.
THOMAS KUHN. (The Structure of Scientific
Revolutions.) CHARLES LINDBLOM. Daniel
goleman. INNOVATION BIOGRAPHERS.
(Transcontinental Railroad, Electrification,
Radio, Television, Containerization, DNA,
Computers, Military History, Etc.) MOST
POLITICAL SCIENTISTS. SILICON VALLEY. Etc.
39
Hard Stuff/Science 20Soft
Stuff/Politics 80
40
Hard Stuff/Analysis planning 25Soft
Stuff/people Politics Passion execution
75
41
Peters is the Michel Foucault of the management
world a scourge of the rationalist tradition and
a celebrant of the creative necessity of chaos
and craziness. Financial Times, 09.23.2003,
review of Re-imagine! (You Should Be Bonkers in
a Bonkers Time)
42
The 5Ps of Innovation SuccessPissed-off-ed-ne
ssPassionpalsPolitics Political
skillPersistence
43
Get mad. Do something about it. Now.
44
The Mess Is The Message! Period!
45
11
46
1/40
47
one idea.1966-2008.
48
What makes God laugh?
49
People making plans!
50
We have a strategic plan. Its called doing
things. Herb Kelleher
51
This is so simple it sounds stupid, but it is
amazing how few oil people really understand that
you only find oil if you drill wells. 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
52
We made mistakes, of course. Most of them were
omissions we didnt think of when we initially
wrote the software. We fixed them by doing it
over and over, again and again. We do the same
today. While our competitors are still sucking
their thumbs trying to make the design perfect,
were already on prototype version 5. By the
time our rivals are ready with wires and screws,
we are on version 10. It gets back to planning
versus acting We act from day one others plan
how to planfor months. Bloomberg by Bloomberg
53
Experiment fearlesslySource BW0821.06, Type
A Organization Strategies/ How to Hit a Moving
TargetTactic 1
54
Avoiding Downsides vs Journey of Learning
Two Approaches to Growth 1, focused on
avoiding downsides, treats customers only as
data, manages risk through analysis, places
big bets, slowly, frequently fails in new
situationsits rigidity and fearfulness
increases through time in a vicious circle. 2,
life as a journey of learning, treats customers
as peopleconstantly seeks new input through
direct contact therewith. Places small bets,
quickly, manages risk through hustle and an
abiding bias for test-try-adjust-action.
Relatively more successful in novel
situationscreating a virtuous circle through
which a growth mindset becomes the raison
detre of the firm itself. Source Wall Street
Journal, 0708.08, University of Virginia/ Darden
Graduate School of Business Prof Sean Carr et al,
In Search of Growth Leaders
55
"I think it is very important for you to do two
things act on your temporary conviction as if it
was a real conviction and when you realize that
you are wrong, correct course very quickly.
Andy Grove
56
You cant 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
57
Culture of PrototypingEffective prototyping
may be the most valuable core competence an
innovative organization can hope to have.
Michael Schrage

58
Fail . Forward. Fast.High Tech CEO,
Pennsylvania
59
Natural selection is death. ... Without huge
amounts of death, organisms do not change over
time. ... Death is the mother of structure. ...
It took four billion years of death ... to invent
the human mind ... The Cobra Event
60
FAIL, FAIL AGAIN. FAIL BETTER. Samuel Beckett
61
The secret of fast progress is inefficiency,
fast and furious and numerous failures.Kevin
Kelly
62
Reward excellent failures. Punish mediocre
successes.Phil Daniels, Sydney exec
63
Learn not to be careful. Photographer Diane
Arbus to her students (Careful The sidelines,
fromHarriet Rubin in The Princessa)
64
If people tell me they skied all day and never
fell down, I tell them to try a different
mountain. Michael Bloomberg (BW/0625.07)
65
READY.FIRE!AIM.Ross Perot (vs Aim! Aim!
Aim! /EDS vs GM/1985)
66
S.A.V.
67
Paul Allaire/Xerox We are in a brawl with no
rules.TP Theres literally only one
possible answer Screw Around Vigorously!
68
You miss 100 of the shots you never take.
Wayne Gretzky
69
Intelligent people can always come up with
intelligent reasons to do nothing. Scott Simon
70
Try.Try.try.
71
Try.Try.try.Try.Try. Try.Try.try.Try.Try.
Try.Try.try.Try.Try. Try.Try.try.Try.Tr
y. Try.Try.try. Try.Try. Try.Try.try
Try.Try. Try.Try.try
72
Excellence1982 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
73
try it. Try it. Try it. Try it. Try it. Try it.
Try it. Try it. Screw it up. Try it. Try it. Try
it. Try it. Try it. Try it. Screw it up. it. Try
it. Try it. try it. Try it. Screw it up. Try it.
Try it. Try it.
74
Joe J. Jones 1942 2008 HE WOULDA DONE
SOME REALLY COOL STUFF BUT HIS BOSS
WOULDNT LET HIM!
75
A year from now you may wish You had
started today. Karen Lamb
76
11.1
77
This adolescent incident of getting from
point A to point B is notable not only because
it underlines Grants fearless horsemanship and
his determination, but also it is the first known
example of a very important peculiarity of his
character Grant had an extreme, almost phobic
dislike of turning back and retracing his steps.
If he set out for somewhere, he would get there
somehow, whatever the difficulties that lay in
his way. This idiosyncrasy would turn out to be
one the factors that made him such a formidable
general. Grant would always, always press
onturning back was not an option for him.
Michael Korda, Ulysses Grant
78
Relentless One of my superstitions had always
been when I started to go anywhere or to do
anything, not to turn back , or stop, until the
thing intended was accomplished. Grant
79
Success seems to be largely a matter of
hanging on after others have let go. William
Feather, author
80
11.2
81
Speed/ Tempo/o.o.d.a. loops/ Metabolic
Management
82
Messin with their minds He who has the quickest
O.O.D.A. Loops wins!Observe. Orient.
Decide. Act. /Col. John Boyd
83
The Havlicek Principle
84
John Havlicek, Boston Celtics, Basketball Hall of
Fame He was out on the court ALL THE TIME
still among the top all-time in minutes played
and he KEPT MOVING, on offense and defense, ALL
THE TIME. This meant he was effective even
against bigger or faster opponentshe harried
and worried them to death on both ends of the
court.Source Tim Walker/tompeters.com
85
Blitzkrieg is far more than lightning thrusts
that most people think of when they hear the
term rather it was all about high operational
tempo and the rapid exploitation of
opportunity. Robert Coram, Boyd Re-arrange
the mind of the enemy T.E. Lawrence Float
like a butterfly, sting like a bee Ali
BOYD The Fighter Pilot Who Changed the Art of
War (Robert Coram)
86
If things seem under control, youre just not
going fast enough. Mario Andretti
87
12
88
4/40
89
De-cent-ral-iz-a-tion!
90
Decentralization is not a piece of paper. Its
not me. Its either in your heart, or not.
Brian Joffe/BIDvest
91
If if feels painful and scarythats real
delegation Caspian Woods, small biz owner
92
The True Logic of Decentralization6 divisions
6 tries6 divisions 6 DIFFERENT leaders
6 INDEPENDENT tries Max probability of
win6 divisions 6 very DIFFERENT leaders 6
very INDEPENDENT tries Max probability of
far out/3-sigma winDriver Law of
Large s
93
Parallel Universe China!!!!!!!
94
try it. Try it. Try it. Try it. Try it. Try it.
Try it. Try it. Screw it up. Try it. Try it. Try
it. Try it. Try it. Try it. Screw it up. it. Try
it. Try it. try it. Try it. Screw it up. Try it.
Try it. Try it.
95
Best practice ZERO Standard Deviation
96
Enemy 1I.C.D.Note 1 Inherent/Inevitable/Imm
utable Centralist DriftNote 2 Jim Burkes
1-word vocabulary No.
97
Decentralization vs Centralization Thats All
There Is (from childrearing 101 to the
Federalist Papers to Org.2007)
98
The Earls Dukes vs King John (The Magna Carta)
The Continental Congress vs the Constitution
Jefferson vs AdamsSloan vs FordGE vs All
comers HP vs HP Peters vs HammerMintzberg vs
Porter
99
1913 32 1960 26 1980 22 2000 27 2007
26
100
1913 32 1960 26 1980 22 2000
27 2007 26 Source The Future of American
Power, Fareed Zakaria, Foreign
Affairs, vol 87, no. 3 U.S. share of world
output
101
Ex-e-cu-tion!
102
Execution is strategy. Fred Malek
103
MP Get the strategy right, the rest will take
care of itself.TP Get the people and
execution right, the strategy will take care of
itself.
104
Execution is the job of the business leader.
Larry Bossidy Ram Charan/ Execution The
Discipline of Getting Things Done
105
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
106
(1) sum of Projects Goal
(Vision) (2) sum of Milestones
project(3) rapid Review
Truth-telling accountability
107
Costco figured out the big, simple things and
executed with total fanaticism. Charles
Munger, Berkshire Hathaway
108
Dick (Build!)Dan (Report on what not
builttangible v. palpable)
109
almost inhuman disinterestedness in strategy
Josiah Bunting on U.S. Grant (from Ulysses S.
Grant)
110
U. S. GrantNo
interest in grand strategy.Do the thing until
it is done.Do not over complicate.Do the next
thing.Pleasure in perseverance per se.Not ask
for help or advice.Not complain of difficulties
or ask for more time or resourcesMcClellan
delay plead for more forcesGrant When do I
start? What I want is to
advance.Source Josiah Bunting, Ulysses S.
Grant
111
Drucker, Strategy,
Leadership Classic Drucker (from the HBR), 221
pages strategy, 3 p (infotech) leadership,
0. The Practice of Management, 404 p
strategy, 0 leadership, 3 p. Management,
568 p strategy, 8 p (all on systems, none
on content), leadership, 12 p.
112
Excellence in Execution Deepest Blue Ocean
113
Ac-count-a-bil-ity!
114
Mr Zetsche, head of Chrysler from 2000 to 2005,
denied he should take any responsibility for
the U.S. carmakers troubles Financial Times
/05.29.07
115
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)
116
CF 30 (no salesfolk)MH 80 (salesfolk)
117
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)
118
SECDEF Bob Gates Walter Reed, Army Secy Nucs,
USAF Secy COS
119
Pay It Back If You Didnt Earn It headline,
New York Times, 0616.08, on 300 clawback
provisions for execs, often when earnings
re-statements occur
120
Response to most important
contribution I focused this discipline on
People and Power on Values, Structure, and
Constitution and above all, on
responsibilitiesthat is, focused the Discipline
of Management on management as a truly liberal
art. (18 January 1999)
121
615A.M.
122
DECENTRALIZATION.EXECUTION.ACCOUTABILITY.61
5A.M.
123
But its only 2am!
124
Where are you going? But its only 2am. You
see, you can live your life at 120 miles an hour,
and thats pretty impressive. But its not good
enough. Unless you live at 150 miles an hour, the
world will pass you by, HRH Prince Alwaleed
1 day 573 people met separately, 200 phone
calls, 100 text messages, etcSource Prince
Alwaleed, Inside the private world of the Middle
Easts most powerful investor cover story, The
Business, 0519.07
125
DECENTRALIZATION.EXECUTION.ACCOUTABILITY.2a.
m.
126
12.1
127
Concoct a Parallel universe!
128
Parallel Universe China!!!!!!!
129
Venture fund Gerstner/Amex, Dow/Marriott,
Grove/Intel, Bedbury/Starbucks
130
SkunkWorks/ ParallelUniversethe 1
solutionSource Scott Bedbury (Others 3M,
Google, Shell, NAVFAC)
131
SkunkWorks/ Skunks (!!!)
132
CEO A.G. Lafley has shifted PGs focus on
inventing all its own products to developing
others inventions at least half the time. One
successful example Mr. Clean Magic Eraser, based
on a product found in an Osaka market. Fortune,
12.18.06
133
GSK (7 CEDDs)
134
Build a School on top of a school (The Parallel
Universe Strategy)
135
12.2
136
Excellence The SE22 ORIGINS OF SUSTAINABLE
ENTREPRENEURSHIPMaybe
137
SE22/Origins of Sustainable
Entrepreneurship 1. Genetically disposed to
Innovations that upset apple carts (3M, Apple,
FedEx, Virgin, BMW, Sony, Nike, Schwab,
Starbucks, Oracle, Sun, Fox, Stanford
University, MIT) 2. Perpetually determined to
outdo oneself, even to the detriment of
todays winners (Apple, Cirque du Soleil,
Nokia, FedEx) 3. Treat History as the Enemy
(GE) 4. Love the Great Leap/Enjoy the Hunt
(Apple, Oracle, Intel, Nokia, Sony) 5. Use
Strategic Thrust Overlays to Attack Monster
Problems (Sysco, GSK, GE, Microsoft) 6. Establish
a Be on the COOL Team Ethos. (Most PSFs,
Microsoft) 7. Encourage Vigorous
Dissent/Genetically Noisy (Intel, Apple,
Microsoft, CitiGroup, PepsiCo) 8. Culturally as
well as organizationally Decentralized
(GE, JJ, Omnicom) 9. Multi-entrepreneurship/Many
Independent-minded Stars (GE, PepsiCo)
138
HPs Big Duh!Decentralize (90B)Undo
MatrixAccountabilitySource HP Says
Goodbye To Drama/BW/09.05/re Mark Hurds first
5 months
139
DePuySpine/JJ70/3game-changers!Still
decentralized after all these years!
140
TP Lessons LearnedInnovation DisDis
(Disciplined Disorganization)Luck is a very
good thing. (More lessons later E.g., If
you hire a bunch of disciplined weirdos and try
a lot of weird stuff, the odds of getting lucky
go up remarkably) (Career success depends on
convincing others that you knew what the hell you
were doing all along. Good news Say it long
enough and you will believe it. Great news Keep
saying it and you, too, can become a guru.)
141
SE22/Origins of Sustainable
Entrepreneurship 10. Keep decentralizingtireles
s in pursuit of wiping out Centralizing
Tendencies (JJ, Virgin) 11. Scour the world for
Ingenious Alliance Partners especially
exciting start-ups (Pfizer) 12. Acquire for
Innovation, not Market Share (Cisco, GE) 13.
Dont overdo pursuit of synergy (GE, JJ, Time
Warner) 14. Execution/Action Bias Just do it
dont obsess on how it fits the business
model. (3M, J J) 15. Find and Encourage and
Promote Strong-willed/ Hyper-smart/Independe
nt people (GE, PepsiCo, Microsoft) 16. Support
Internal Entrepreneurs (3M, Microsoft) 17. Ferret
out Talent anywhere/No limits approach to
retaining top talent (Virgin, GE, PepsiCo)
142
SE22/Origins of Sustainable Entrepreneurship 1
8. Unmistakable Results Accountability focus
from the get-go to the grave (GE, New York
Yankees, PepsiCo) 19. Up or Out (GE, McKinsey,
big consultancies and law firms and ad
agencies and movie studios in general) 20.
Competitive to a fault! (GE, New York Yankees,
News Corp/Fox, PepsiCo) 21. Bi-polar
Top Team, with Unglued Innovator 1,
powerful Control Freak 2 (Oracle, Virgin) (Watch
out when 2 is missing Enron) 22.
Masters of Loose-Tight/Hard-nosed about a very
few Core Values, Open-minded about
everything else (Virgin)
143
HOW THE COAST GUARD GETS IT RIGHT Headline,
Time, 10.31.2005AutonomyFlexibilityPerhaps
the most important distinction of the Coast
Guard is that it trusts itself
144
13
145
We are the company we keep
146
We become who we hang out with
147
The Hang Out Axiom At its core, every (!!!)
relationship-partnership decision (employee,
vendor, customer, etc) is a strategic decision
about Innovate, Yes or No
148
Measure Strangeness/Portfolio
QualityStaffConsultantsVendorsOut-sourcing
Partners (, Quality)Innovation Alliance
PartnersCustomersCompetitors (who we
benchmark against) Strategic Initiatives
Product Portfolio (LineEx v. Leap)IS/IT
ProjectsHQ LocationLunch MatesLanguageBoard
149
Innovations Saviors-in-WaitingDisgruntled
CustomersOff-the-Scope CompetitorsRogue
EmployeesFringe SuppliersWayne Burkan, Wide
Angle Vision Beat the Competition by Focusing on
Fringe Competitors, Lost Customers, and Rogue
Employees
150
Port- fol-io Think- ing
151
Big Idea/sV.C. Venture Capitalist G.M.
General Mgr/Pro SportsPortfolioRoster
152
CUSTOMERS Future-defining customers may account
for only 2 to 3 of your total, but they
represent a crucial window on the
future.Adrian Slywotzky, Mercer Consultants
153
Axiom Never use a vendor who is not in the top
quartile (decile?) in their industry on RD
spending!Inspired by Hummingbird
154
COMPETITORS The best swordsman in the world
doesnt 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 doesnt do the
thing he ought to do, and so the expert isnt
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
155
How do dominant companies lose their position?
Two-thirds of the time, they pick the wrong
competitor to worry about. Don Listwin, CEO,
Openwave Systems/WSJ
156
Kodak . FujiGM . FordFord . GMIBM .
Siemens, FujitsuSears . KmartXerox . Kodak,
IBM
157
Benchmarking, Perils of The best swordsman in
the world doesnt 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 doesnt
do the thing he ought to do, and so the expert
isnt 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
158
Dont benchmark, futuremark! Impetus The
future is already here its just not evenly
distributed William Gibson
159
Normal o for 800
160
Our most beloved products were developed by
hunch, guesswork and fanaticism, by creators who
were eccentric - or even stark raving mad. Jack
Mingo, How the Cadillac Got Its Fins
161
Freak Fridays once a month invite somebody
interesting, in any field, to have lunch with
your gang
162
Why Do I love
Freaks? (1) Because when Anything Interesting
happens it was a freak who did it. (Period.)
(2) Freaks are fun. (Freaks are also a pain.)
(Freaks are never boring.) (3) We need freaks.
Especially in freaky times. (Hint These are
freaky times, for you me the CIA the Army
Avon.) (4) A critical mass of
freaks-in-our-midst automatically make
us-who-are-not-so-freaky at least somewhat more
freaky. (Which is a Good Thing in freaky
timessee immediately above.) (5) Freaks are
the only (ONLY) ones who succeedas in, make it
into the history books. (6) Freaks keep us
from falling into ruts. (If we listen to them.)
(We seldom listen to them.) (Which is why most
organizations are in ruts. Make that chasms.)
163
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
164
Diverse groups of problem solversgroups of
people with diverse toolsconsistently
outperformed groups of the best and the
brightest. If I formed two groups, one random
(and therefore diverse) and one consisting of the
best individual performers, the first group
almost always did better. Diversity trumped
ability. Scott Page, The Difference How the
Power of Diversity Creates Better Groups, Firms,
Schools, and Societies Diversity
165
Elliott Masie, on desirable eLearning vendors I
want a sandbox partner, someone who will openly
say, This is not the last word we dont know
exactly where were going.
166
Playmate!Playpen!Prototype!Can be Client,
supplier as well as Insider
167
Where to look for Playmates F.F.F.F. (Find
a Fellow Freak Faraway)
168
Keep Austin Weird
169
13.1
170
We hang with who we hang out withWe become who
we hang out with
171
The Bottleneck Is at the Top of the
BottleWhere 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 top!
Gary Hamel/Harvard Business Review
172
Period??!!Start 3 0f 14 18 months later 10
of 18 (deep dip!)AIM/September 2007
173
The Memphis Manifesto Building a Community of
Ideas1. Cultivate reward creativity.2.
Invest in the creative ecosystem.3. Embrace
diversity.4. Nurture the creatives.5. Value
risk-taking.6. Be authentic (emphasize
uniqueness)7. Invest in and build on quality of
place.8. Remove barriers to creativity.9. Take
responsibility for change. Development as
D.I.Y.10. Ensure that every person, especially
children, has the right to creativity.
Become a Steward of creativity.2003/The
Creative 100/MemphisSource Richard Florida, The
Rise of the Creative Class
174
13.2
175
The Fury factor.
176
What drove Trippe? A fury that the future was
always being hijacked by people with smaller
ideas by his first partners who did not want to
expand airmail routes by nations that protected
flag carriers with subsidies by the elitists who
regarded flight, like luxury liners, as a
privilege that could only be enjoyed by the few
by the cartel operators who rigged prices. The
democratization he effected was as real as Henry
Fords. Harold Evans on Juan Trippe, the PanAm
boss who brought the B747 to life (WSJ/02.24.2005)
177
No!Sources of innovation?
178
Yes!Source of innovation?
179
Source, not Sources ??
180
SourcePissed off Person/people!
181
TPs motivation I am shocked out of my wits at
the grotesque stupidity of the way things are
right nowand that we tolerate the continuation
of this stupidity when what needs to be done is
as obvious as the end of your nose. It is the
sustaining stupidity per se that most pisses me
off.
182
Dreaming, necessary, or not? TP, personal
dream concrete, practical imaginings about
the opposite of things that piss me off (TP
advantages low boiling point, long memory)
183
Michael Porter Ive been thinking TP Im
mad as hell, and Im not going to take it anymore
184
Get mad. Do something about it. Now.
185
No leader sets out to be a leader per se, but
rather to express him- or herself freely and
fully. That is leaders have no interest in
proving themselves, but an abiding interest in
expressing themselves. Warren Bennis, On
Becoming a Leader
186
F(Anger/Passion) f(Pushback from Threatened
Fat-cats Bureau-crats)
187
Pissed off enough to Risk ones position,
survive the poison darts and persist, persist,
persist!
188
Pissed Off Innovation is Initiated by
Irritation. Re-imagining Results from Rage.
189
Solution Hire misfits!
190
13.2.1
191
The Three Most Important Letters WHY?
192
13.3
193
WhackyWikiWorldWow
194
Wikinomics How Mass Collaboration Changes
Everything Don Tapscott Anthony Williams
195
The Billion-man Research Team Companies
offering work to online communities are reaping
the benefits of crowdsourcing. Headline,
FT, 0110.07
196
WikinomicsWikiWorldWeapons of Mass
collaborationCrowdSourcingsmart
mobsLinuxHuman genome projectInnoCentiveYouTub
eSecond LifeWikipediaMyspace
197
Rob McEwen/CEO/Goldcorp Inc./Red Lake
goldSource Wikinomics How Mass Collaboration
Changes Everything, Don Tapscott Anthony
Williams
198
A New C-Level?C Ww OChief WikiWorld
Officer
199
Theres a fundamental shift in power happening.
Everywhere, people are getting together and,
using the Internet, disrupting whatever
activities theyre involved in. Pierre Omidyar,
founder, eBay
200
14
201
Inno64 Innovation Strategies Tactics
202
Parallel universe /Exec Ed v res MBA End run
regnant powers/JKC Find done deals-practicing
mavericks/Stone-ReGo Bell curves2016 in
2006 Non-industry benchmarking Everything
Portfolio V.C.s all! Hot language/Wow-Astonish
me-Insanely great-immortal-Make something
great Lead customers/PW-Embraer Lead suppliers
/Top decile RD Weird alliances Mottos/Paul Arden
(Whatever You Think Think the Opposite) Hire
freaks/Enough weird people? Weird Boards!!!
203
CEO track record of Innovation (nobody starts
at 45! Or 35!) System/GE-Immelt Strategic thrust
overlay Calendar Big Delta easier than
Small MBWA with freaks-weirdos/JKC MBWA/Boonies
labs V.C.-formal/Intel Acquire weird Childrens
crusade Old farts crusade Go Global at any
size Stop listening to customers Talent!/Unusual
sources-Hire innovators-V.C.s Eschew giant mergers
204
Remember scale economies max out early Assisted
suicide! (Built to last Chimera-snare-delusion
) Burn your press clippings Forgetting
strategy Fire all strategic planners Tempo! Fina
l product bears little relation to starting
notion Design! Design! Design! (culture, not
program) All innovation Pissed-off people Gut
feel rules! Focus groups suck Weird focus groups
okay Be-Do philosophy
205
Celebrations Culture-little as well as big Inno
(everyone-an-innovator) Life Wow
Projects Acknowledge messiness-pursue serendipity
(Blitzkrieg-Containers-Science-Jim
Utterback) R.F.A. Culture of execution 4/40
decentralization, execution, accountability,
615AM EVP (S.O.U.B.)/Systems-process
un-design Diversity for diversitys
sake Women-Women-Women/customers (they are the
market, not a segment)-leaders Boomers-Geezers
(all the money)
206
CRO (Chief Revenue Officer) culture/top-line
obsessed CIO (Chief INNOVATION Officer) Laughter F
acility-space configuration Experiments-prototypes
Reward excellent failures. Punish mediocre
successes. Bizarrely high incentives (
penalties) We are what we eat/We are who we hang
out with (E.g. Staff-Consultants-Vendors-Out-sour
cing 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)
207
What We Know For Sure About InnovationBig
mergers by large dont workScale is
over-ratedStrategic planning is the last refuge
of scoundrelsFocus groups are counter-productive
Built to last is a chimera (stupid)Success
killsForgetting is impossibleRe-imagine is a
charming ideaOrderly innovation process is an
oxymoronic phrase ( Believed only by morons
with ox-like brains)Tipping points are easy to
identify long after they will do you any
goodFacts arentAll information making it to
the top is filtered to the point of danger and
hilaritySuccess stories are the illusions of
egomaniacs (and gurus)If you believe the
memoirs of CEOs you should be institutionalizedH
erd behavior (XYZ is hot) is ubiquitous and
amusingTop teams are DittoheadsCEOs have
little effect on performanceExpert prediction
is rarely better than rolling the dice
208
15
209
New Old Basics
210
Lessons Learned 42/ 1966-2008
211
Lessons Learned 42/1966-2008Decentral
izationAccountabilityWild-ass
imaginationHuman developmentXFX
(Cross-functional Excellence)Untapped
MarketsValue-added fanaticismBase
Principles IBase Principles IIBase
Principles IIILeadership
212
Decentralization USA Constitution, 50
states, immigrant nation (50 Silicon Valley),
independent-minded (students no respect
teachers), entrepreneurial, Energizer
Bunny (Zakaria1960/26, 1980/22, 2000/27,
2007/26), pragmatic (Rommel),
relatively unregulated market economy
Research via wildly competitive universities
William Easterly, economic development (trust
the development experts all seven
billion of them) JJ/DePuy (Decentralization
as decentralization was meant to be) More
statistically independent tries (if
independent holds) Focus! (Focus pays.)
Economies of scale run out (much) earlier than
we think Focus on the lowest operating
unit retail store-district union and 250-
person distribution center, call center
parish Spread ideas via go see this-these
demos (infection through best practices
rather than central edict) innovation by
prototyping anywhere and everywhere
(e.g., the 1 rule) innovation by parallel
universe (mgt ed new via autonomous
exec ed divisionmain body conservative-
recalcitrant Jill Ker Conway _at_ Smithnew
money sources for new people and new
programs) You own the damn place no
bullshit excuses (i.e., Major Consequences
up down) No such thing as
Scalability Limits to synergy Power
of no (Jim Burke Rulee.g., no centralization
following screw-up, in 9 of 10 cases,
even after major boo-boo) Decentralization
is not a piece of paper. Its not me. Its either
in your heart, or not.Brian
Joffe/BIDvest
213
Accountability 30-80 ruleown your budget
(Mark Hurd-HP) Make a promise keep a promise
(GE, Milliken) Optimism but honesty No
Kill the messenger Transparency Starts
at the top!!!!!!!! (Bob Gates and Walter
Reed-USAF) Fragile??? Clear expectations
at the time of hiring Self-responsibility
Decency-culture of respect
214
Wild-ass imagination Dubai rule Hang
out with freaks as a matter of course (lead
customers, small-but-hot vendors, odd
backgrounds, etc, etcmore or less measured)
Wee cool acquisitions (hold on to founders at
all costsDisney and Pixar and Jobs on
Board Cisco) Measure division-level bosses
on crazy-assed experiments (plus Wexner Rule
no screw-ups is Black Mark) and Daniels
RuleReward excellent failures, punish
mediocre successes (!!!) Failure
tolerated-encouraged (He who makes the most
mistakes wins) 5-year Blockbuster
Initiatives with major consequences
(Demo-driven) Diversity for creativity
(bottom to top) Decentralization with teeth
Accountability (Dreamers with deadlines)
World-class research universities Government
support for RD (computers, Internet, biotech)

215
Human development Cathedral model (This
is what we do) WPP Mission HR (GE
model) Chief Human Development Officer (post-cop
world) You will be measured on Human
Development Effectiveness (e.g., how many
folks go on to be promoted at least two levels,
or are headhunted) ResilienceXP/eXtreme
Preparation (Black Swan world) Character
MBQ (Management By Quest) Project
structurePM leadership early Commitment to
decencypremium on thoughtfulness Squint test
(diversity, top team looks like customer base)
Go for the people people (emphasize
intangibles!!) Putting the customer second
Goal greatest places to work recognition
Servant leadership
216
XFX (Cross-functional Excellence) Constant
reinforcement with major rewards, punishments
(Puckett, Robinson) Mundane tactics Edict
( lunches) MBWA-demo-best practices
Edict The way we do things around here
(focus on operating unit) Manage conflict
with decentralizationartistry Reward what
the hell does he do all day sorts
Customer-centric Departments (PSF model prove
your worth, serve your customers or
else, principle engines of value added)
Partnerships Model (PSF and internal
customersmeasure satisfaction union
boss and facility boss vendor-customer teams
sales and client teams Friends in low
places Power Nudges (e.g., facilities
management) Transparency! Everything on
the Web
217
Untapped Markets Big Two!!!!!!
(Strategic-level enterprise-organizing principle)
She is your customer! (So shed better be
your boss!) Old Farts Rule! And will rule for
the next quarter century! (Welcome to
Boomer-Geezer Time!)
218
Value-added Fanaticism TGR TGW
(experience) (emphasis on little touchesthe
case of the 2-cent candy) Customer
Success Customer Satisfaction
Schlumberger-IBM-UPS (We are bold integrated
services provision) (HP-EDS) PSF structure
Design driven nation (Korea!), we are design
(Apple) Ladder (Raw materials-Goods-Services-So
lutions-Experience-Dreams come
true-Lovemark)
219
Base Principles I Try It
220
Base Principles II Try It
Decentralization MBWA Excellence
Servant leadership
221
Base Principles III Try It
Decentralization O.O.D.A. (tempo, metabolic
management, speed-of-light prototyping)
MBWA/Walk (25 Rule, 60-call Rule, 3K5M Rule,
Texas Bix Bender Rule) Excellence (Ill know
it when I see it no non-excellenceWatson
Rule OpX) Women as key leadership-senior
leadership source, masters of implementation
(Yunus), primary market
Decency-respect-transparency K.I.S.S.
(Pronovost Modelcheck list Bossidy Modelsum of
projects equals promise, etc Beautiful
Systems) We are all in Sales around here!
Cool is cool (design primacy) We thrive on
ambiguity Execution Strategy (Execution is
strategy) (Drucker) Execution Great
leaders (Execution is leadership) (Drucker)
Servant leadershipCathedral Model You
could do worse than In Search of Excellence
(People. Customers. Action.
Entrepreneurial spirit. Values. Focus.
K.I.S.S.)
222
Leadership 21L -21L MBWA
Excellence Servant leaders
223
ENDPart 1.2
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