The Challenge: To Create More Value in All Negotiations

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LONG Tom Peters Re-Imagine Excellence
NOW World Strategy Forum The New Rules
Reframing Capitalism Seoul/13 June 2012 (slides _at_
tompeters.com and excellencenow.com)
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1982
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Not Dead Yet
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Not Dead
Yet BRIC/2011 11T/4K per capita USA/2011
16T/48K per capita USA/2000 4 population/30
world GDP USA/2010 4 populattion/28 world
GDP USA productivity 07/1.7 08/2.1
09/5.4 10/2.4 11/4.1 FDIC institutions
4Q/2008/-38B 2Q/2011/29B 1/2008 to 9/2011
USA consumer savings 0 to 6/2.1T
saved Foreign Direct Investment 2003 64B
2008 328B 2009 134B 2011
200B Exports/2009 USA 1.53T (1.06T goods,
0.47T services) Germany 1.36T China
1.33T USA/Refined petroleum products/1Q 2011
Imports 2.16M BPD Exports 2.49M BPD New
economy Apple (gtExxon) Google Facebook
800B market cap Source Daniel Gross, The Myth
of American Decline and the Growth of a New
Economy
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iPad/4 billion of 300 billion negative USA
trade balance with China (2011)
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Cost/Profit ComponentsTotal labor 7(Chinese
labor 2)Materials 31Distribution
15Profit 47Landed iPad cost 275 Imputed
USA negative trade balance with China(Actual
China cost 10)Source Personal Computing
Industry Centre (Economist)
7
Cost/Profit ComponentsTotal labor 7(Chinese
labor 2)Materials 31Distribution
17Profit 47Landed iPad cost 275 Imputed
USA negative trade balance with China(Actual
China cost 10)Biggest non-USA component
KoreaSource Personal Computing Industry Centre
(Economist)
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Q3 2011/BLS3.1/Non-farm
productivity growth3.8/Non-farm
output0.6/Non-farm hours worked5.4/Manufactur
ing productivity4.7/Manufacturing
output-0.6/Manufacturing hours workedSource
Bureau of Labor Statistics/03 November 2011
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Its Getting a Little Weird Out Bradescos
biometric ATM sensors/blood flow (Economist
0519) Oscar Pistorius sprinting acumen/approved
for London (WSJ 0602) DelFly/lighter than your
wedding ring (Economist 0602) Kurzweils
Singularity is nigh?!
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In some sense you can argue that the science
fiction scenario is already starting to happen.
The computers are in control. We just live in
their world. Danny Hillis, Thinking Machines
(Wired 01.2011)
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Unless mankind redesigns itself by changing our
DNA through altering our genetic makeup,
computer-generated robots will take over the
world. Stephen Hawking
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Tom, let me tell you the definition of a good
lending officer.
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Tom, let me tell you the definition of a good
lending officer. After church on Sunday, on the
way home with his family, he takes a little
detour to drive by the factory he just lent money
to. Doesnt go in or any such thing, just drives
by and takes a look.
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The art of war does not require complicated
maneuvers the simplest are the best and common
sense is fundamental. From which one might wonder
how it is generals make blunders it is because
they try to be clever. Napoleon
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Too Much Cost, Not Enough Value Too Much
Speculation, Not Enough Investment Too Much
Complexity, Not Enough Simplicity Too Much
Counting, Not Enough Trust Too Much Business
Conduct, Not Enough Professional Conduct Too
Much Salesmanship, Not Enough Stewardship Too
Much Focus on Things, Not Enough Focus on
Commitment Too Many Twenty-first Century
Values, Not Enough Eighteenth-Century
Values Too Much Success, Not Enough
Character Source Chapter titles from Jack
Bogle, Enough.
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25
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MBWA
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ManagingBy WanderingAround
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or it's simply not worth doing
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Business has to give people enriching, rewarding
lives or it's simply not worth doing.
Richard Branson
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7 Steps to Sustaining Success You take care of
the people. The people take care of the service.
The service takes care of the customer. The
customer takes care of the profit. The profit
takes care of the re-investment. The
re-investment takes care of the re-invention.
The re-invention takes care of the future. (And
at every step the only measure is EXCELLENCE.)
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7 Steps to Sustaining Success You take care of
the people. The people take care of the service.
The service takes care of the customer. The
customer takes care of the profit. The profit
takes care of the re-investment. The
re-investment takes care of the re-invention.
The re-invention takes care of the future. (And
at every step the only measure is EXCELLENCE.)
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The ONE Question In the last year 3 years,
current job, name the three people whose
growth youve most contributed to. Please explain
where they were at the beginning of the year,
where they are today, and where they are heading
in the next 12 months. Please explain in
painstaking detail your development strategy in
each case. Please tell me your biggest
development disappointmentlooking back, could
you or would you have done anything differently?
Please tell me about your greatest development
triumphand disasterin the last five years.
What are the three big things youve learned
about helping people grow along the way?
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The Memories
That Matter The people you developed who went on
to stellar accomplishments inside or outside
the company. The (no more than) two or three
people you developed who went on to create
stellar institutions of their own. The longshots
(people with a certain something) you bet on
who surprised themselvesand your peers. The
people of all stripes who 2/5/10/20 years
later say You made a difference in my life,
Your belief in me changed everything. The sort
of/character of people you hired in general. (And
the bad apples you chucked out despite some
stellar traits.) A handful of projects (a half
dozen at most) you doggedly pursued that
still make you smile and which fundamentally
changed the way things are done inside or
outside the company/industry. The supercharged
camaraderie of a handful of Great Teams aiming
to change the world.
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Organizations exist to serve. Period. Leaders
live to serve. Period.
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"When I hire someone, that's when I go to work
for them. John DiJulius, "What's the Secret to
Providing a World-Class Customer Experience"
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Oath of Office Managers/Servant
Leaders Our goal is to serve our customers
brilliantly and profitably over the long
haul. Serving our customers brilliantly and
profitably over the long haul is a product of
brilliantly serving, over the long haul, the
people who serve the customer. Hence, our job as
leadersthe alpha and the omega and everything
in betweenis abetting the sustained growth and
success and engagement and enthusiasm and
commitment to Excellence of those, one at a
time, who directly or indirectly serve the
ultimate customer. Weleaders of every
stripeare in the Human Growth and
Development and Success and Aspiration to
Excellence business. We leaders only grow
when they each and every one of our
colleagues are growing. We leaders only
succeed when they each and every one of our
colleagues are succeeding. We leaders
only energetically march toward Excellence when
they each and every one of our colleagues
are energetically marching toward
Excellence. Period.
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EMPLOYEES FIRST, CUSTOMERS SECOND Turning
Conventional Management Upside Down Vineet
Nayar/CEO/HCL Technologies
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"Leadership is a gift. It's given by those who
follow. You have to be worthy of it. General
Mark Welsh, Commander, U.S. Air Forces Europe
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I start with the premise that the function of
leadership is to produce more leaders, not more
followers. Ralph Nader
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In the Army, 3-star generals worry about
training. In most businesses, it's a ho hum
mid-level staff function.
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If the regimental commander lost most of his 2nd
lieutenants and 1st lieutenants and captains and
majors, it would be a tragedy. If he lost his
sergeants it would be a catastrophe. The Army and
the Navy are fully aware that success on the
battlefield is dependent to an extraordinary
degree on its Sergeants and Chief Petty Officers.
Does industry have the same awareness?
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People leave managers not companies. Dave
Wheeler
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The four most important words in any
organization are
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The four most important words in any
organization are What do you think?
Source courtesy Dave Wheeler, posted at
tompeters.com
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The deepest principal in human nature is the
craving to be appreciated.William
JamesCraving, not wish or desire or
longing Dale Carnegie, How to Win Friends and
Influence People (The BIG Secret of Dealing With
People)
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Hard is soft Soft is hard
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Hard is Soft. Soft is Hard.
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The first step is to measure what can easily be
measured. This is okay as far as it goes. The
second step is to disregard that which cannot be
measured, or give it an arbitrary quantitative
value. This is artificial and misleading. The
third step is to presume that what cannot be
measured is not very important. This is
blindness. The fourth step is to say that what
cannot be measured does not really exist. This is
suicide. Daniel Yankelovich (from Enough!, by
Jack Bogle)
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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
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Breakthrough 82 People! Customers! Action!
Values! In Search of Excellence
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Why in the World did you go to Siberia?
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Enterprise (at its best) An emotional, vital,
innovative, joyful, creative, entrepreneurial
endeavor that elicits maximum
concerted human
potential in the
wholehearted pursuit of EXCELLENCE in service of
others.Employees, Customers, Suppliers,
Communities, Owners, Temporary partners
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gt EXXON
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Design Rules!APPLE market cap gt Exxon
Mobil August 2011
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Only one company can be the cheapest. All
others must use design. Rodney Fitch, Fitch
Co.Source Insights, definitions of design, the
Design Council UK
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(No Transcript)
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Design is treated like a religion at BMW.
Fortune
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With its carefully conceived mix of colors and
textures, aromas and music, Starbucks is more
indicative of our era than the iMac. It is to the
Age of Aesthetics what McDonalds was to the Age
of Convenience or Ford was to the Age of Mass
Productionthe touchstone success story, the
exemplar of the aesthetic imperative. Every
Starbucks store is carefully designed to enhance
the quality of everything the customers see,
touch, hear, smell or taste, writes CEO Howard
Schultz. Virginia Postrel, The Substance of
Style How the Rise of AestheticValue Is
Remaking Commerce, Culture and Consciousness
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Hypothesis DESIGN is the principal difference
between love and hate!Not like and
dislike
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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 of
design. Design is the fundamental soul of a
man-made creation. Steve JobsApple gt
ExxonMobil
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Hypothesis Men cannot design for womens
needs!!??
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this will be the womans century
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I speak to you with a feminine voice. Its the
voice of democracy, of equality. I am certain,
ladies and gentlemen, that this will be the
womans century. In the Portuguese language,
words such as life, soul, and hope are of the
feminine gender, as are other words like courage
and sincerity. President Dilma Rousseff of
Brazil, 1st woman to keynote the United Nations
General Assembly
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Forget China, India and the Internet Economic
Growth Is Driven by Women. Source Headline,
Economist
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One thing is certain Womens rise to power,
which is linked to the increase in wealth per
capita, is happening in all domains and at all
levels of society. Women are no longer content to
provide efficient labor or to be consumers with
rising budgets and more autonomy to spend.
This is just the beginning. The phenomenon will
only grow as girls prove to be more successful
than boys in the school system. For a number of
observers, we have already entered the age of
womenomics, the economy as thought out and
practiced by a woman. Aude Zieseniss de Thuin,
Womens Forum for the Economy and Society
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Goldman Sachs in Tokyo has developed an index of
115 companies poised to benefit from womens
increased purchasing power over the past decade
the value of shares in Goldmans basket has risen
by 96, against the Tokyo stockmarkets rise of
13. Economist
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• W gt 2X (C I)
• Women now drive the global economy. Globally,
  they control about 20 trillion in consumer
  spending, and that figure could climb as high as
  28 trillion in the next five years. Their 13
  trillion in total yearly earnings could reach 18
  trillion in the same period. In aggregate, women
  represent a growth market bigger than China and
  India combinedmore than twice as big in fact.
  Given those numbers, it would be foolish to
  ignore or underestimate the female consumer. And
  yet many companies do just thateven ones that
  are confidant that they have a winning strategy
  when it comes to women. Consider Dells
• Source Michael Silverstein and Kate Sayre, The
  Female Economy, HBR, 09.09

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Women are the majority market Fara
Warner/The Power of the Purse
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AS LEADERS, WOMEN RULE New Studies find that
female managers outshine their male counterparts
in almost every measure TITLE/ Special
Report/ BusinessWeek
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Headline 2020 Women Hold 80 Percent of
Management and Professional JobsSource The
Extreme Future The Top Trends That Will Reshape
the World in the Next 20 Years, James Canton
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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. Source Judy B. Rosener, Americas
Competitive Secret Women Managers
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Power Women 100/Forbes 10.25.1026 female CEOs
of Public CompaniesVs. Men/Market 28
(Post-appointment)Vs. Industry 15
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Are men obsolete? Headline, USNWR
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1/8/20
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Date 1/1/11Activity USA Boomers
start turning 65Rate 1 every 8
secondsDuration 20 yearsImpacted EVERYTHING
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22/1
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22/1/10 (USA adult population will have grown by
23 million between 2006 and 2016. Ages 18-49 will
have grown by one million, age 50 will have
grown by 22 million)
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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
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IBMtoIBM
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55BIBM Global Services/Systems integrator
of choice
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Planetary Rainmaker-in-Chief!CEO Sam
Palmisanos strategy is to expand techs borders
by pushing usersand entire industriestoward
radically different business models. The payoff
for IBM would be access to an ocean of
revenuePalmisano estimates it at 500 billion a
year that technology companies have never been
able to touch. Fortune
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Results are measured by the success of all
those who have purchased your product or service
Jan Gunnarsson Olle Blohm, The Welcoming Leader
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Huge Customer Satisfaction with
product/Service versus Customer Success
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UPS
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WHAT CAN BROWN DO FOR YOU?Its all about
solutions. We talk with customers about how to
run better, stronger, cheaper supply chains. We
have 1,000 engineers who work with customers
Bob Stoffel, UPS senior exec
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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. Source BusinessWeek
cover story, January 2008
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IPMs Chief Well do just about anything an
oilfield owner would want, from drilling to
production.
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UTC/Otis UTC/Carrier boxes to integrated
building systemselevators, air conditioners
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We want to be the air traffic controllers of
electrons.Bob Nardelli, then CEO, GE Power
Systems (GE core business that has been making
products such as transformers for decades and
decades)
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MasterCard Advisors
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I. LAN Installation Co. (3)II. Geek
Squad. (30.)III. Acquired by Best Buy.IV.
Flagship of Best Buy Wholesale
Solutions Strategy Makeover.
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1/46
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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
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What are Rutans management rules? He insists he
doesnt have any. I dont like rules, he says.
Things are so easy to change if you dont write
them down. Rutan feels good management works in
much the same way good aircraft design does
Instead of trying to figure out the best way to
do something and sticking to it, just try out an
approach and keep fixing it. Eric
Abrahamson David Freedman, Chapter 8, Messy
Leadership, from A Perfect Mess The Hidden
Benefits of Disorder
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READY.FIRE.AIM.H. Ross Perot (vs Aim! Aim!
Aim! /EDS vs GM/1985)
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In Search of Excellence /1982 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
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Experiment fearlesslySource BusinessWeek,
Type A Organization Strategies How to Hit a
Moving TargetTactic 1relentless trial and
error Source Wall Street Journal,
cornerstone of effective approach to
rebalancing company portfolios in the face of
changing and uncertain global economic conditions
(11.08.10)
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Lesson45 WTTMSW
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Whoever Tries The Most Stuff Wins
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Better yet WTTMSTFW
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Whoever Tries The Most Stuff The Fastest Wins
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Rose gardeners face a choice every spring. The
long-term fate of a rose garden depends on this
decision. If you want to have the largest and
most glorious roses of the neighborhood, you will
prune hard. This represents a policy of low
tolerance and tight control. You force the plant
to make the maximum use of its available
resources, by putting them into the the roses
core business. Pruning hard is a dangerous
policy in an unpredictable environment. Thus, if
you are in a spot where you know nature may play
tricks on you, you may opt for a policy of high
tolerance. You will never have the biggest roses,
but you have a much-enhanced chance of having
roses every year. You will achieve a gradual
renewal of the plant. In short, tolerant pruning
achieves two ends (1) It makes it easier to cope
with unexpected environmental changes. (2) It
leads to a continuous restructuring of the plant.
The policy of tolerance admittedly wastes
resourcesthe extra buds drain away nutrients
from the main stem. But in an unpredictable
environment, this policy of tolerance makes the
rose healthier in the long run. Arie De Geus,
The Living Company
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Reward excellent failures. Punish mediocre
successes.Phil Daniels, Sydney exec
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Read ItRichard Farson Ralph Keyes Whoever
Makes the Most Mistakes Wins The Paradox of
Innovation
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The secret of fast progress is inefficiency,
fast and furious and numerous failures.Kevin
Kelly
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The Bottleneck
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The Billion-man Research Team Companies
offering work to online communities are reaping
the benefits of crowdsourcing. Headline, FT
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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
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Whos the most interesting person youve met in
the last 90 days? How do I get in touch with
them? Fred Smith
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Vanity Fair What is your most marked
characteristic? Mike Bloomberg Curiosity.
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The Bottleneck
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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
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Human creativity is the ultimate economic resource
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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 in art at
such a young age? His teacher informed us that
he had refused to color within the lines, which
was a state requirement for demonstrating
grade-level motor skills. Jordan Ayan, AHA!
108
Ye gads Thomas Stanley has not only found no
correlation between success in school and an
ability to accumulate wealth, hes actually found
a negative correlation. It seems that
school-related evaluations are poor predictors of
economic success, Stanley concluded. What did
predict success was a willingness to take risks.
Yet the success-failure standards of most schools
penalized risk takers. Most educational systems
reward those who play it safe. As a result, those
who do well in school find it hard to take risks
later on. Richard Farson Ralph Keyes,
Whoever Makes the Most Mistakes Wins
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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. Richard Florida, The Rise of the
Creative Class
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The doctor interrupts after Source
Jerome Groopman, How Doctors Think
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18
114
18 seconds!
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An obsession with Listening is ... the ultimate
mark
of Respect. Listening is ... the
heart and soul of Engagement. Listening is ...
the heart and soul of Kindness. Listening is ...
the heart and soul of Thoughtfulness. Listening
is ... the basis for true Collaboration. Listening
is ... the basis for true Partnership. Listening
is ... a Team Sport. Listening is ... a
Developable Individual Skill. (Though women
are far better at it
than men.) Listening is ... the basis for
Community. Listening is ... the bedrock of Joint
Ventures that work. Listening is ... the bedrock
of Joint Ventures that grow. Listening is ... the
core of effective Cross-functional
Communication (Which is in turn
Attribute 1 of
organizational effectiveness.) cont.
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and just wait
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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 answer seems obvious Source
Paul Ormerod, Why Most Things Fail Evolution,
Extinction and Economics
118
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 answer seems obvious Buy a very
large one and just wait. Paul Ormerod, Why
Most Things Fail Evolution, Extinction and
Economics
119
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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Data drawn from the real world attest to a fact
that is beyond our control Everything in
existence tends to deteriorate. Norberto
Odebrecht, Education Through Work
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Dick Kovacevich You dont get better by being
bigger. You get worse.
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M A success rate as measured by adding value
to the acquirer 15 Source Mark Sirower, The
Synergy Trap
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Spinoffs systematically perform better than
IPOs track record, profits freed from the
confines of the parent more entrepreneurial,
more nimble Jerry Knight/ Washington Post/
08.05
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MittELstand agile creatures darting
between the legs of the multinational monsters
(Bloomberg BusinessWeek, 10.10) E.g. Goldmann
Produktion
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agile creatures darting between the
legs of the multinational monsters Source
Bloomberg BusinessWeek on the German MITTELSTAND
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Retail Superstars Inside the 25 Best Independent
Stores in America by George Whalin
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Be the best. Its the only market thats not
crowded. From Retail Superstars Inside the 25
Best Independent Stores in America, George Whalin
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The Red Carpet Store (Joel Resnick/Flemington NJ)
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There is more than one way to skin a
cat! Every project REQUIRES (if youre smart)
an outside look by one/some Seriously Weird
Cat/s in pursuit of whacked-out options.
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14,00020,00030
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14,000/eBay20,000/Amazon30/Craigslist
132
Kevin Roberts Credo1. Ready.
Fire! Aim.2. If it aint broke ... Break it!3.
Hire crazies.4. Ask dumb questions.5. Pursue
failure.6. Lead, follow ... or get out of the
way!7. Spread confusion.8. Ditch your
office.9. Read odd stuff.10. Avoid moderation!
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In the beginning, there was the daydream
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The Discipline Of Daydreaming Nearly every
major decision of my business career was, to some
degree, the result of daydreaming. To be sure,
in every case I had to collect a lot of data, do
detailed analysis, and make a data-based argument
to convince superiors, colleagues and business
partners. But that all came later. In the
beginning, there was the daydream. By
daydreaming, I mean loose, unstructured thinking
with no particular goal in mind. In fact, I
think daydreaming is a distinctive mode of
cognition especially well suited to the complex,
fuzzy problems that characterize a more
turbulent business environment. Daydreaming is
an effective way of coping with complexity. When
a problem has a high degree of complexity, the
level of detail can be overwhelming. The more one
focuses on the details, the more one risks being
lost in them. Every child knows how to
daydream. But many, perhaps most, lose the
capacity as they grow up. Dov Frohman (
Robert Howard), Leadership The Hard Way Why
Leadership Cant Be TaughtAnd How You Can Learn
It Anyway (Chapter 5, The Soft Skills Of Hard
Leadership)