'UPS wants to take over the sweet spot in the endless loo

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New growth engines.New paradigm.new Korea.
New Growth Engines Convention ExpoTom
Peters/26 May 2009
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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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Slides at tompeters.com
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Palo Alto/Silicon Valley/1969-2004
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Bedrock/Transformatio
ns Gold Rush (California Dream, bet the
farm, immigrants, entrepreneurs, optimists,
latecomer-start afresh/1850-SF) Union Pacific
Railroad (Chinese labor) WWII (return via
Golden Gate Bridgeimmigrant state) Stanford
(Sterling) (3 of 10 worldwide) Defense San
Francisco flower children Reagan,
Schwarzenegger (entrepreneur, immigrant,
optimist) HP (electronic tools) Semiconducto
rs (Shockley, Fairchild Semi-conductor) 3000
Sand Hill Road (WORLDs largest concentration of
VCs) Memory chips (Intel, AMD) ICs (Intels
180-degree flip)) Computers/Big (HP,
Sun) Computers/Small (Apple) Consumer stuff
(Atari) Biotech (Stanford, UCSF, CA,
Genentech) Software/Big (Oracle) Software/Al
l Software/Search (Netscape, Yahoo,
Google) Green/Energy
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Can giant enterprises maintain
competitiveness? What are the limits to
scale (e.g., Is a GE too big to manage, or
still a paragon of RADICAL
DECENTRALIZATION?)? MIXED MODEL
Productive-"winning economy Giants and
SMEs. Think, in particular, MITTELSTAND
(Remember Germany is 1 exporter!) Critical
mass in several population centers, each a
little different. Toward an "entrepreneurial
society" CHINA (ALIBABA.COM, 32M OF 40M)
and INDIA and USA "get it,' Japan
doesn't. (YUNUS entrepreneurial flair
widespread if encouraged.)
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Mr. Foster and his McKinsey colleagues collected
detailed performance data stretching back 40
years for 1,000 U.S. companies. They found that
none of the long-term survivors managed to
outperform the market. Worse, the longer
companies had been in the database, the worse
they did. Financial Times
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Can giant enterprises maintain
competitiveness? What are the limits to scale
(e.g., Is a GE too big to manage, or still a
paragon of RADICAL DECENTRALIZATION?)? MIXED
MODEL Productive-"winning economy Giants
and SMEs. Think, in particular, MITTELSTAND
(Remember Germany is 1 exporter!) Criti
cal mass in several population centers, each
a little different. Toward an "entrepreneurial
society" CHINA (ALIBABA.COM, 32M OF 40M)
and INDIA and USA "get it,' Japan
doesn't. (YUNUS entrepreneurial flair
widespread if encouraged.)
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Germany 1 Mittelstand!!
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Can giant enterprises maintain
competitiveness? What are the limits to scale
(e.g., Is a GE too big to manage, or still a
paragon of RADICAL DECENTRALIZATION?)? MIXED
MODEL Productive-"winning economy Giants
and SMEs. Think, in particular, MITTELSTAND
(Remember Germany is 1 exporter!) Criti
cal mass in several population centers, each
a little different. Toward an "entrepreneurial
society" CHINA (ALIBABA.COM, 32M OF 40M)
and INDIA and USA "get it,' Japan
doesn't. (YUNUS entrepreneurial flair
widespread if encouraged.)
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Toward a "creative society long term
"economic value- added starts at AGE 6 in
the classroom. CULTURAL STIGMA MUST BE
REMOVED FROM FAILURESMALL OR GRAND.
Extraordinary role of RESEARCH
UNIVERSITIES nexus of research
universities-funds sources. SILICON VALLEY
Big and SME critical mass mfg and cool
incredible diversity venture money, legal
resources university (3 of worlds Top 10)
attitude tolerance for failure. Cornersto
ne of creative society DIVERSITY! (Of
every sort.) Immigrants!
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Every child is born an artist. The trick is to
remain an artist. Picasso
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Human creativity is the ultimate economic
resource. The Creative Age is a wide-open
game. Richard Florida, The Rise of the
Creative Class
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Toward a "creative societylong term
"economic value-added starts at AGE 6 in
the classroom. CULTURAL STIGMA MUST BE
REMOVED FROM FAILURE SMALL OR GRAND.
Extraordinary role of RESEARCH
UNIVERSITIES nexus of research
universities-funds sources. SILICON VALLEY
Big and SME critical mass mfg and cool
incredible diversity venture money, legal
resources university (3 of worlds Top 10)
att-i-tude tolerance for failure. Corners
tone of creative society DIVERSITY! (Of
every sort.) Immigrants!
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McKenna A lot of companies in the
Valley fail.Noyce Maybe not enough
fail.McKenna What do you mean by
that?Noyce Whenever you fail, it
means youre trying new things.Source
Fast Company
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The secret of fast progress is inefficiency,
fast and furious and numerous failures. Kevin
Kelly The Silicon Valley of today is built
less atop the spires of earlier triumphs than
upon the rubble of earlier debacles.
Newsweek/Paul Saffo
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IN SILICON VALLEY IF YOU ARE NOT STOLEN
AWAY BY SOME COMPANY EVERY FEW YEARS (OR MONTHS)
YOU ARE NOT CONSIDERED A HOT
PROPERTY.STABILITY IS AMARK
OFSHAME.Source Juan Enriquez/As the Future
Catches You
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Toward a "creative societylong term
"economic value-added starts at AGE 6 in
the classroom. CULTURAL STIGMA MUST BE
REMOVED FROM FAILURESMALL OR GRAND.
Extraordinary role of RESEARCH
UNIVERSITIES nexus of research
universities-funds sources. SILICON VALLEY
Big and SME critical mass mfg and cool
incredible diversity venture money, legal
resources university (3 of worlds Top 10)
attitude tolerance for failure. Cornerst
one of creative society DIVERSITY! (Of
every sort.) Immigrants!
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Toward a "creative societylong term
"economic value-added starts at AGE 6 in
the classroom. CULTURAL STIGMA MUST BE
REMOVED FROM FAILURESMALL OR GRAND.
Extraordinary role of RESEARCH
UNIVERSITIES nexus of research
universities-funds sources. SILICON VALLEY
Big and SME critical mass mfg and cool
incredible diversity venture money, legal
resources university (3 of worlds Top 10)
att-i-tude tolerance for failure. Corner
stone of creative society DIVERSITY! (Of
every sort.) Immigrants!
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U.S. Historical Strength Invest in
CreativityFoster new industriesFree open
societyInvestment higher ed, R D,
cultureImmigrants ( 1!)Source Richard
Florida, The Rise of the Creative Class
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Creativity Index The 3
TsTechnology (HT Index/firms ,
Innovation Index/patent growth)Talent ( with
bachelors degrees)Tolerance (Melting Pot
Index/foreigners, Bohemian Index/artists et al.,
Gay Index/rel. s)Source Richard Florida, The
Rise of the Creative Class
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RICH VARIETY OF FINANCING SOURCES, from
angels to big banks. Active IP bar CYBER
WARFARE capability. PRODUCTIVITY (AND
INNOVATION) IS A 100 PROPOSITION, from
3-person business to giant. "Best
workforce" applies as much to small service
companies as to big manufacturers. Innov
ation applies to SERVICE SECTOR as much as
manufacturing (every aspecte.g.
design) Manufacturing companies gravitate
toward/race toward "SERVICES ADDED" as
principal revenue-growth sourcethe case of
GE (!!), IBM, United Technologies and others.
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RICH VARIETY OF FINANCING SOURCES, from
angels to big banks. Active IP bar CYBER
WARFARE capability. PRODUCTIVITY (AND
INNOVATION) IS A 100 PROPOSITION, from
3-person business to giant. "Best
workforce" applies as much to small service
companies as to big manufacturers. Innovation
applies to SERVICE SECTOR as much as
manufacturing (every aspecte.g.
design) Manufacturing companies gravitate
toward/race toward "SERVICES ADDED" as
principal revenue-growth sourcethe case of
GE (!!), IBM, HP, United Technologies and
others.
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IBM 60B
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HP Style EDS
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We want to be the air traffic controllers of
electrons. Bob Nardelli, GE Power Systems
(10 to 50 in about 5 years)Immelt
Environment, Energy, HealthcareSystems
Integrator
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UTC/Otis UTC/ Carrier boxes to integrated
building systems
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THE GIANT STALKING BIG OIL How Schlumberger Is
Rewriting the Rules of the Energy Game. IPM
Integrated Project Management strays from
Schlumbergers traditional role as a service
provider and moves deeper into areas once
dominated by the majors. CEO just about
anything an oilfield owner would want, from
drilling to production Source BusinessWeek
cover story, January 2008
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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 (E.g., UPS Logistics manages the
logistics of 4.5M Ford vehicles, from 21 mfg.
sites to 6,000 NA dealers)
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Only a small fraction of manufacturing
workers work at manufacturing. Innovation is
a product of PRODUCER-USER INTERACTION
(service companies as sophisticated
usersthink UPS, FedExare as important as
producers) much of it local.
(Bhidé.) Innovation in government servicesa
significant part of economic growth. THE
WORLD IS NOT ENTIRELY "FLAT." (ABBs 125 of
300,000.) The "DESIGN ADVANTAGEan
essential source of value- added. Equal
innovation mandate in 100 of the firm (HR,
IS, Logistics, etc.)
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Only a small fraction of manufacturing
workers work at manufacturing. Innovation is
a product of PRODUCER- USER INTERACTION
(service companies as sophisticated users
think UPS, FedExare as important as
producers) much of it local. (Bhidé.) Innovat
ion in government servicesa significant
part of economic growth. THE WORLD IS NOT
ENTIRELY "FLAT." (ABBs 125 of 300,000.)
The "DESIGN ADVANTAGEan
essential source of value- added. Equal
innovation mandate in 100 of the firm (HR,
IS, Logistics, etc.)
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Sustainable Innovation Systemic. Very complex.
The NECESSARY COMBINATION (very dense network) of
EVERYTHING from the development of the Basic
Science to numerous INTERMEDIATE Stages to Sales
Recruiting and Training and Ads. Essential
Clever and numerous AGGRESSIVE CONSUMERS
(venturesome consumption). Path to success or
failure UNPREDICTABLE. FYI The World is NOT
FLAT. Source Amar Bhidé, The Venturesome
Economy How Innovation Sustains Prosperity in a
More Connected World
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Sustainable Innovation Systemic. Very complex.
The COMBINATION (very dense network) of
EVERYTHING from the Basic Science to Sales
Recruiting and Training and Ads. Essential
Clever and numerous PIONEER CONSUMERS
(venturesome consumption). Path to success or
failure UNPREDICTABLE. Of modest value
origin mostly irrelevant unless the ENTIRE
INNOVATION CHAIN is in place and aggressively
interacting-competing. Source Amar Bhidé, The
Venturesome Economy How Innovation Sustains
Prosperity in a More Connected World
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Only a small fraction of manufacturing
workers work at manufacturing. Innovation is
a product of PRODUCER-USER INTERACTION
(service companies as sophisticated
usersthink UPS, FedExare as important as
producers) much of it local.
(Bhidé.) Innovation in government servicesa
significant part of economic growth. THE
WORLD IS NOT ENTIRELY "FLAT." (ABBs 125 of
300,000.) The "DESIGN ADVANTAGEan
essential source of value- added. Equal
innovation mandate in 100 of the firm (HR,
IS, Logistics, etc.)
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The essential role of the LOCAL CONSUMER.
(The U.S. consumer CANNOT BE/WILL NOT BE
the engine of Asian growth!) "New"
marketplace demographics Primary
purchasers (Europe, North America,
Japan, etc.) are Women and "Boomers"
(members of the aging population). Maintaining
Korea's historic "BIAS FOR ACTION
(success factor 1 from In Search of
Excellence). Commitment to EXCELLENCE as
national attribute- "brand" (think
Germany-mfg, Italy- design). (I repeat such
a commitment applies to 100 of the work
force and to every enterprise.)
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The current economic situation does
not change the fundamentals of this
necessary strategic, tectonic shift.
DISRUPTIVE TECHNOLOGIES ARE PICKING UP
STEAMFLURRIES OF ACTIVITY, BUBBLES,
CONSOLIDATIONS, ETC WILL BE THE NORM FOR
THE FORSEEABLE FUTURE!. AS CREATIVE NEEDS
GROW WIDESPREAD ENTREPRENEURSHIP
WILL BE A REQUISITE FOR TRANSFORMATION-SUCCE
SS.