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Title: The%20Challenge:%20%20%20To%20Create%20More%20Value%20in%20All%20Negotiations


1
Space power! Tom Peters/0415.09
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NOTE To appreciate this presentation and
ensure that it is not a mess, you need Microsoft
fonts Showcard Gothic, Ravie, Chiller
and Verdana
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Premise
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Power Freaks Move Things Around!
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Managing spacebroadly defined hereis an
incredibly powerful way to bring about change.
Moreover, it is a change tool thats typically
underutilized. And a change tool thats readily
available because of the fact that others are
unaware of the potency of the tool or the degree
to which small changes in space management can
have enormous consequences. I thought Id collect
a few examples here, from the mundane to the
grand, to make the point. And, obviously, I hope
to pique your interest if you dont happen to be
a fanatic on this topic
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Cases 1
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Geologists Geophysicists A little bit of
love Oil
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A story from my McKinsey days In an oil company
engagement, we were looking at variation in
companies success in finding oil. Its not as
simple as Im making it here, but one company did
stand outand one variable seemed to be of
extraordinary importance. Throughout history, all
functional organizations are at war with all
other functional organizations. (The famed and
ever so potent silos problem.) Scientists are
amongst the worst actors. In oil-finding there
are two particularly important scientific
regimes. Geologistswho like rocks. And
geophysicistswho like data about rocks. (I
greatly overstate.) At any rate they are
historically warring tribes. The terrific
oil-finding company was the only one which
co-mingledphysicallythe two groups. The
synergynormally a word that scares methat
came from this co-mingling was, it appeared, to
the company and to us, through results and
interviews, was extraordinary.
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2
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Stanfords Multi-disciplinary Center, GSKs
CEDDs
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Space as strategy Stanfords president says the
great institutions destiny will come via
multi-disciplinary research. Such is the nature
of the great problems confronting the world.
Executing such a strategy has many parts. But one
of the most important is a physical building
which will be specifically devoted to
multi-disciplinary research. Along the same
lines, GlaxoSmithKline aimed to speed up drug
discovery via multi-disciplinary teams. Again, a
major component was space (a home) for each of
the firms CEDDs/Centers for Excellence in Drug
Discovery.
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3
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gt100 feet 100 miles
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It was the only chart we used in In Search of
Excellence! It arrived courtesy the research of
Tom Allen and his colleagues at MIT. Studying
communication patterns, they discovered that
people more than a hundred feet apart might as
well, in terms of communication frequency, be 100
miles apart!. Internet or no Internet (these
days), that is nothing short of stunning! And
the implications are nothing short of profound!
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4
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It BEGINS (and ENDS) in the
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parking lotDisney
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Space of a sort. The psychology is clear. An
enormous share of our perception of something is
determined by first and last impressions. Duh,
you say. To which I say, Okay, I know you know
thatbut do you truly OBSESS on the design and
management of Beginnings and Endings? The
longtime master of this is Disney. Disney, in its
parks, puts as much effort into the design of the
parking lot experience as it does into their
rides. In particular, the parking lot attendants
are considered primo members of the performance
arts teamselection, uniforms, training, etc of
those attendants is a no-baloney strategic
issue.
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5
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Round 2X/allx
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Table shape as a strategic variable? Yup! At
a round table there are more or less twice as
many comments as there are at a square
tablemoreover, the of people who participate
shoots through the roof in the round (more
equitable) environment.
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6
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see green recover 20 faster
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If patients see greenery through their window,
recovery time may shrink by as much as 20.
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7
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Paint it white! On Hashem Akbaris
Lawrence Livermore labs powerful program to
significantly reduce greenhouse gas emissions
using conservative assumptions, it could
reduce 44 billion tons of CO2 emissions by
cooling buildings, roads, entire cities (The
Guardian, 0116.09)
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Okay, its not really space except in a
convoluted way (roof space), but it is such a
great story In effect, a few cans of white paint
would change the world. Paint (or otherwise coat)
roofs, roads, etc WHITE and save 44 Billion
Tons of CO2.
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8
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Trash the waste baskets
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paper recycling soars!
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No waste baskets under individual desks leads to
a jump, in fact leap, in paper recycling.
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9
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6.5 feet Away
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6.5 feet Away -63 SecondsPlate
size, etc, first serving dish
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Amazing as it sounds, experiments suggest its
true If a serving plate is six-and-a-half feet
away, the number of second helpings does down by
almost two-thirds. And on it goes smaller
plates, less food consumed. First plate out is
vegetables, and, yes, more vegetables are
consumed.
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10
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Parking lot location Van schedule Elevator
speed Food court location
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Sprint, in its old incarnation, did a bunch of
little things to enhance fitness and health.
The parking lot is a quarter mile from the
officeand the vans are scheduled infrequently.
The elevators are maddeningly slow in a
three-floor building. The food court is not
centrally locatedits as far away from as many
people as possible.
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11
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Big carts 1.5X Source WalMart
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WalMart increased shopping cart sizeand saw its
big-item purchases soar by 50.
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12
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Bag sizes New markets B Source
PepsiCo
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Frito Lay went through a period years ago of
trying to develop blockbuster productsto no
avail. At one point the idea of changing bag
sizes surfacedhardly a blockbuster! New bag
sizes were addedand revenue soared by perhaps
more than a billion . Turns out New bag size
New market. Standard bag sales stayed the same
(no cannibalization), while the picnic-tailgate
party big bag sales-market went through the
roof!
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13
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3Ms nooks, Apples dorm commons room look
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In a new HQ in Austin, 3M designed little
sitting areas near the restroomsinformal,
multi-disciplinary noodling increased markedly.
Apple, in a new RD center designed seating
areas The ones decorated formally went virtually
unused the ones with low ceilings and comfy,
unimposing furniture were always beehives of
activity.
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14
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Broken windows Clean the streets, fix the
broken windows, ticket the open-beer-can holders,
etc, etc Sense of order Crime way down
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The broken windows theory of policing has
created no less than a revolution. To make a long
story short, and a complex story simple If you
work on the little things that connote order
fix broken windows, clean up sidewalks a
communitys crime rate often tumbles. Issuing
citations for little thingssuch as an open
alcohol containeradds to the potency of the idea.
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15
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Deduction vs. cashx
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Major recessionary issue getting people into the
stores and spending! If a government incentive
comes in the form a reduced payroll tax deduction
shown on a pay stub, people tend to pay little
attention and thence save the money. (Not a bad
idea in most circumstancesbut not right now.) If
the incentive comes in the form of a check, its
seen as a windfall, and most of it will end up in
the stores coffers!
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16
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401(k) active opt-in 45 401(k) as default
86 Source New York Times, 1202.08 (research
by Richard Thaler, co-author Nudge)
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Design a form one way or another and the world
is turned upside downor not. When opting in or
out of a 401(k) plan, if opting in is the default
option 86 sign up. But if one must take an
action to opt in only 45 sign up. Hence a tiny
format leads to doubling or halving an incredibly
important decision regarding ones future
financial wellbeing.
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17
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Promised vs Delivered 15 Source Elgin
Corrugated Box
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A specialty corrugated cardboard box company,
Elgin Corrugated Box, was fanatic about finishing
and delivering orders on or ahead of time. To get
the most bang-for-the-buck from this obsession,
they changed their invoice. After each order
description, they added two columns ORDER DUE.
ORDER ARRIVED. Given their practices, the
Arrived was unfailingly on or before the Due
date. By the simple fact of the two columns which
visibly reminded the customer of Elgins
timeliness revenues increased by an estimated
15.
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18
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Item 1
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You want Customer Retention to become an
obsession. There are a raft of ways to make that
happen, including blunderbuss shots like a
significantly altered incentive scheme. But there
are visual ways as well. And one of the most
powerful is to ensure that at every meeting on
any topicHR and IS as much as marketingthe
FIRST ITEM on the/any Agenda is ALWAYS
Customer Retention. Primacy and Repetition
thereof are in fact powerful beyond measure.
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19
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Walls of yesterday?
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Walls of tomorrow?
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When Steve Jobs returned from the wilderness to
Apple a few years ago, he ordered all signs of
past glory removed from the premises. The walls
and halls would be harbingers of tomorrows
dreams, not reminders of yesterdays
accomplishments. I remember years ago seeing a
picture of a retired CEO in his studywalls
covered with photos of the great men hed met in
the past. Not all bad, but the guy didnt look
all that old, and I remember thinking, How sad,
no sign of tomorrow. I think this idea is
important.
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20
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4F/FFFF Peters (F) Waterman (Closet F)
SF (F) ISOE (F)/Re-invention of
McKinseyFind a Fellow Freak FarawayFreak,
Closet FreakSan Francisco Faraway Home of
FreaksFreak-ish Product (In Search of
Excellence)
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Place that looks like a skunk lives there
Skunkworks Innovation
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I call it the 4F Strategy. Or Find a Fellow
Freak Faraway. Its nigh on impossible to get a
real innovation going close to headquarters. Big
League corporate politics makes a mess of things.
Got a great idea as an HQ staffer? Find a testbed
(playground, a prominent friend calls it) a
long way from the power centerand a Fellow Freak
(playmate) and get on with it. The project that
launched In Search of Excellence was conducted in
San Francisco, roughly 3,000 miles away from
McKinseys HQ. Theres more to the story,
obviously, but the several degrees of separation
made a huge difference. Another moniker for all
this is the Skunkworks idea, pioneered by
Lockheed to hastily build such aircraft as the
SR-71 spy plane, crucial to Cold War success. The
point (redux) When you need something Weird
Quickput a streamlined team of Weirdos in the
boonies! While theres more to the story, the
idea of a Tight-knit, Spartan Band of Renegades
burrowed in a Distant Den has been proven to work
time and time again.
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MBWA
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When Bob Waterman and I wrote In Search of
Excellence in 1982, business was by the
numbersand the Americans were struggling (to
put it mildly) with hands on, tactile stuff, like
Japanese quality. Then, at Hewlett Packard, we
were introduced to the famed HP Way, the
centerpiece of which was in-touch management. HP
had a term for this MBWA. (Managing By
Wandering Around.) Bob and I immediately fell
in love. Not only was the idea per se important
and cool, but it symbolized everything we were
coming to cherishenterprises where
bosses-leaders were in immediate touch with and
emotionally attached to workers, customers, the
product. The idea is as important or more
important in fast-paced 2009 as it was in 1982.
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21A
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20-minute rule Craig Johnson/30 yrs
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Craig Johnson, a famed Venture Capitalist for
three decades refuses to invest in companies
that are more than a 20-minute drive from his
office. To guide them through the serpentine path
ahead, he insists that he must be in constant
touch as banker, advisor, friend.
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21B
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Pat pays a visit
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Pat Carrigan was GMs first woman assembly plant
boss. She was tough as nails. Upon taking, she
immediately went to the plant floor and paid a
visit to the local union boss. They had to
partner or lose the plantthat was her message.
But the real message was the visit itself. The
union chief told me in a TV interview, In all my
years here, whenever there was an issue, I was
summoned to the factory boss office . Literally,
Tom, in over a decade in this role, a plant boss
has never walked to the shop floor, knocked on
the door to my little office, and asked if they
could come in for a chat. Theres the concept
of partnership. And the reality of partnership.
That visit per se was as important as the verbal
message. (Obviously this act did not save GM. But
a lot more like it just might have.)
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21C
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WALK
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The key to the dramatic strategy shift instituted
by General David Petraeus in Iraq was working
with neighborhoods. In his office, he had a giant
poster with his four (only four) principles that
marked his new Strategy. The last was in enormous
in sizeand in red. Namely WALK. In a world of
soldiers in armed Humvees, a human-physical
presence was key to a new approach.
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22
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We are the company we keep
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You will become like the five people you
associate with the mostthis can be either a
blessing or a curse. Billy Cox
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We are what we eat obviously. And we are who we
hang out withjust as obviously. These are throw
away linesbut in my opinion are truly PROFOUND
lines as well. These lines, as the Cox quote
suggests, are good news or bad newsVERY good
news or VERY bad news often enough. But the GREAT
news is that this frequently invisible variable
is CONTROLLABLEand controllable from a
less-than-powerful position. Manage hang out
with as a strategic variableand you can move
mountains!
87
Measure Strangeness/Portfolio
QualityStaffConsultantsVendorsOut-sourcing
Partners (, Quality)Innovation Alliance
PartnersCustomersCompetitors (who we
benchmark against) Strategic Initiatives
Product Portfolio (Line Extension v. Leap)IS/IT
ProjectsHQ LocationLunch MatesLanguageBoard
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The We are what we eat Axiom I At its core,
every (!!!) relationship-partnership decision
(employee, vendor, customer, lunchmate, etc) is a
strategic decision about Innovate, Yes or
No
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The We are what we eat Axiom II Hang out
with cool and thou shalT become more cool. Hang
out with dull and thou shalT become more dull.
Period.
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Let me put it as plainly as I can I
THINK-INSIST THAT HANG OUT ON DAMN NEAR ANY
DIMENSION IS THE 1 MANAGEMENT-LEADERSHIP TOOL
IN DETERMINING THE INNOVATIVENESSOR LACK
THEREOFOF AN ORGANIZATION!
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Conclusion
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Little BIG
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(1) Amenable to rapid
experimentation/failure free (No bad
PR, No ) (2) Quick to implement/Quick to
Roll out (3) Inexpensive to implement/
Roll out (4) Huge multiplier (5) An
Attitude (6) Does not by and large require a
power position from which to
launch experiments.
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The wonder of all this is that it has enormous
power potential, and its inexpensive, quick and
does not require a top job from which to launch
experiments! The bad news (if it is that) that it
is an attitude rather than a programone needs
to be convinced of the potential and must be
willing to try a lot of stuff (tiny modifications
to a single variable spell doomor remarkable
success).
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  • Half-day/25 ideas
  • One week/5 experiments
  • (3) One month/Select best 2
  • (4) 60-90 days/Roll out

96
Design is everything. Everything is
design. We are all designers. Inspiration
The Power of Design A Force for Transforming
Everything, Richard Farson
97
Go for it!
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