Tom Peters’Tom Peters’

EXCELLENCE:EXCELLENCE:31 Numbers31 Numbers

15 October 201315 October 2013

The whole story?The whole story?Far from it!Far from it!

Nonetheless, herewith a small selection of Nonetheless, herewith a small selection of

NUMBERSNUMBERS from my MASTER presentation. from my MASTER presentation. Actually, they tell a lot of the story.Actually, they tell a lot of the story.

1,000,0001,000,000

China, the “low wage nation”? Yet: ONE Chinese China, the “low wage nation”? Yet: ONE Chinese company—China’s Foxconn—will implant company—China’s Foxconn—will implant

1,000,0001,000,000 robots in just the robots in just the

next three years.next three years.

+26/0+26/0

What about the people part of the equation? What about the people part of the equation? Post-Great Recession: Equipment Expenditures Post-Great Recession: Equipment Expenditures

+26%+26%; payrolls ; payrolls 0%0%

500:1500:1

Portent of things to come? Algorithms are now Portent of things to come? Algorithms are now encroaching on high-wage jobs: Legal industry/encroaching on high-wage jobs: Legal industry/

Pattern Recognition/Discovery. Use of eDiscovery Pattern Recognition/Discovery. Use of eDiscovery

algorithms translates into a need for algorithms translates into a need for 500500 lawyers lawyers

being reduced a need for … being reduced a need for … ONEONE..

Source:Source: Race AGAINST the Machine, Race AGAINST the Machine, Erik Erik Brynjolfsson and Andrew McAfeeBrynjolfsson and Andrew McAfee

2,7002,700

““Gamification” of everything is touted by some: Gamification” of everything is touted by some: “Gamification presents the best tools humanity has “Gamification presents the best tools humanity has

ever had to create and sustain engagement in ever had to create and sustain engagement in people.” people.” —Gabe Zichermann & Joselin Linder, —Gabe Zichermann & Joselin Linder,

Gamification: How Leaders Leverage Game Gamification: How Leaders Leverage Game Mechanics to Crush the CompetitionMechanics to Crush the Competition

But “gamification” is not easy. This is what it But “gamification” is not easy. This is what it means in game-world: “You get a sense of the scale means in game-world: “You get a sense of the scale and intricacy of the task by considering the sound and intricacy of the task by considering the sound effects alone: The game contains 54,000 pieces of effects alone: The game contains 54,000 pieces of

audio and 40,000 lines of dialogue. There areaudio and 40,000 lines of dialogue. There are

2,7002,700 different noises for footsteps different noises for footsteps

alone depending on whose foot is stepping on alone depending on whose foot is stepping on what.”what.” ——Sam LeithSam Leith onon Halo 3, Halo 3, from Jane McGonigal, from Jane McGonigal, Reality Is Broken: Reality Is Broken:

Why Games Make Us Better and How They Can Change the WorldWhy Games Make Us Better and How They Can Change the World

2525

MBWA/Managing By Wandering Around, Big Time: “I’m MBWA/Managing By Wandering Around, Big Time: “I’m

always stopping by our stores— at leastalways stopping by our stores— at least

2525 a week. I’m also in other places: a week. I’m also in other places:

Home Depot, Whole Foods, Crate & Barrel. I try to be a Home Depot, Whole Foods, Crate & Barrel. I try to be a sponge to pick up as much as I can.” —Howard Schultzsponge to pick up as much as I can.” —Howard Schultz

3K/5M3K/5M

More MBWA: Peerless sports agent Mark McCormack said More MBWA: Peerless sports agent Mark McCormack said

it’s not-infrequently essential to travel it’s not-infrequently essential to travel 3,0003,000

miles for a miles for a 55 minute meeting. minute meeting.

5050

““Most managers spend a great deal of time thinking about what they plan to Most managers spend a great deal of time thinking about what they plan to do, but relatively little time thinking about what they plan not to do. As a do, but relatively little time thinking about what they plan not to do. As a

result, they become so caught up … in fighting the fires of the moment that result, they become so caught up … in fighting the fires of the moment that they cannot really attend to the long-term threats and risks facing the they cannot really attend to the long-term threats and risks facing the

organization. So the first soft skill of leadership the hard way is to cultivate the organization. So the first soft skill of leadership the hard way is to cultivate the perspective of Marcus Aurelius: avoid busyness, free up your time, stay focused perspective of Marcus Aurelius: avoid busyness, free up your time, stay focused

on what really matters. Let me put it bluntly: every leader should routinely on what really matters. Let me put it bluntly: every leader should routinely keep a substantial portion of his or her time—I would say as much as keep a substantial portion of his or her time—I would say as much as

5050 percent—percent—unscheduledunscheduled..

Only when you have substantial ‘slop’ in your schedule—unscheduled time—will Only when you have substantial ‘slop’ in your schedule—unscheduled time—will you have the space to reflect on what you are doing, learn from experience, you have the space to reflect on what you are doing, learn from experience,

and recover from your inevitable mistakes. Leaders without such free time end and recover from your inevitable mistakes. Leaders without such free time end up tackling issues —Dov Frohman (& Robert Howardup tackling issues —Dov Frohman (& Robert Howard), Leadership The Hard ), Leadership The Hard Way: Why Leadership Can’t Be Taught—And How You Can Learn It Anyway Way: Why Leadership Can’t Be Taught—And How You Can Learn It Anyway

(Chapter 5, “The Soft Skills Of Hard Leadership”)(Chapter 5, “The Soft Skills Of Hard Leadership”)

44

Not an exaggeration: The Not an exaggeration: The 44 most important most important

words in any organization are … words in any organization are … “WHAT DO “WHAT DO YOUYOU THINK?”THINK?”

— —Dave Wheeler,Dave Wheeler,

88

Change the World With Change the World With 88 Words: Words:

“What do you think?”“What do you think?”

“How can I help?”“How can I help?”

1212

Change the World With Change the World With 1212 Words: Words:

“What do you think?”“What do you think?”“How can I help?”“How can I help?”

“What have you learned?” “What have you learned?”

7/38/557/38/55

Albert Mehrabian’s [directional] “7-38-55 Rule”Albert Mehrabian’s [directional] “7-38-55 Rule”

Your words: Your words: 7%7%Your tone of voice: Your tone of voice: 38%38%Your body language: Your body language: 55%55%7% of message pertaining to feelings and attitudes is 7% of message pertaining to feelings and attitudes is in the words that are spoken. in the words that are spoken.

38% of message pertaining to feelings and attitudes is 38% of message pertaining to feelings and attitudes is paralinguistic (the way that the words are said). paralinguistic (the way that the words are said).

55% of message pertaining to feelings and attitudes is 55% of message pertaining to feelings and attitudes is in facial expression.in facial expression.

5/136 5/136

““There is now [1996] a meta-analysis of studies of the There is now [1996] a meta-analysis of studies of the comparative efficacy of clinical judgment and actuarial comparative efficacy of clinical judgment and actuarial

prediction methods. … Of prediction methods. … Of 136136 research studies from a research studies from a

wide variety of predictive domains, not more than wide variety of predictive domains, not more than

55 percent percent show the clinician’s predictive procedure show the clinician’s predictive procedure

to be more accurate than a statistical one.” to be more accurate than a statistical one.” —Paul Meehl, —Paul Meehl, Clinical versus Statistical PredictionClinical versus Statistical Prediction

1818

Listening skills? The best information concerning a Listening skills? The best information concerning a patient’s malady is … the patient says Dr. Jerome patient’s malady is … the patient says Dr. Jerome

Groopman in Groopman in How Doctors Think.How Doctors Think. Yet research Yet research shows that the average doctor interrupts the shows that the average doctor interrupts the

patient after: patient after: 1818 … …

SECONDSSECONDS. .

0/150/15

Press Ganey Associates study of 139,380 patients from Press Ganey Associates study of 139,380 patients from

225 hospitals: 225 hospitals: 00 of the top of the top 1515 factors determining factors determining

Patient Satisfaction referred to patient’s health Patient Satisfaction referred to patient’s health outcome.outcome.

Instead: Satisfaction is directly related to Staff Instead: Satisfaction is directly related to Staff Interaction; directly correlated with Employee Satisfaction Interaction; directly correlated with Employee Satisfaction

Source: Source: Putting Patients FirstPutting Patients First, Susan Frampton, , Susan Frampton, Laura Gilpin, Patrick CharmelLaura Gilpin, Patrick Charmel

53 = 53 53 = 53

There are 53 players on the active roster of a professional There are 53 players on the active roster of a professional foot ball team in the U.S. Needless to say, each one has a foot ball team in the U.S. Needless to say, each one has a different role. Coaches and their general managers spend different role. Coaches and their general managers spend

countless (literally) hours evaluating those players in countless (literally) hours evaluating those players in terms of there immediate and longterm usefulness. terms of there immediate and longterm usefulness.

Message:Message:

53 = 5353 = 53. Each player is different and . Each player is different and

perceived so. My “bottom line”: What holds for a perceived so. My “bottom line”: What holds for a professional football team holds for the “players” in any professional football team holds for the “players” in any and every organization. Standardized evaluations are an and every organization. Standardized evaluations are an

abomination. abomination.

#1#1

That paragon of excellent management, GE, says that That paragon of excellent management, GE, says that

skills at evaluating people is its skills at evaluating people is its #1#1

differentiatordifferentiator. . This from the mouth of Jack Welch and his successor, This from the mouth of Jack Welch and his successor,

Jeff Immelt. Jeff Immelt.

#1#1

I contend that the I contend that the #1#1 problem in almost every problem in almost every

organization is failures of XF/cross-functional co-organization is failures of XF/cross-functional co-ordination. Pursuing “XFX”/cross-functional eXcellence ordination. Pursuing “XFX”/cross-functional eXcellence

thence becomes the thence becomes the #1#1 enterprise opportunity. enterprise opportunity.

The pursuit ofThe pursuit of XFX requires conscious and visible management each XFX requires conscious and visible management each

and every day. and every day.

7070

Hiring is hardly “overlooked,” but is rarely Hiring is hardly “overlooked,” but is rarely taken anywhere nearly as seriously as it taken anywhere nearly as seriously as it

ought to be: “Development can help great ought to be: “Development can help great people be even people be even better—BUT IF I HAD A better—BUT IF I HAD A

DOLLAR TO SPEND, I’D SPEND DOLLAR TO SPEND, I’D SPEND 7070

CENTSCENTS GETTING THE RIGHT PERSON IN GETTING THE RIGHT PERSON IN THE DOOR.”THE DOOR.”

—Paul Russell, Director, Leadership—Paul Russell, Director, Leadership and Development, Google and Development, Google

270/<10270/<10

I often believe that CEOs see big spending on, say,I often believe that CEOs see big spending on, say, IT as a “crucial strategic investment.” And see IT as a “crucial strategic investment.” And see

training, by contrast, as a “necessary evil.” To my training, by contrast, as a “necessary evil.” To my mind, that’s ass backwards. Training is our most mind, that’s ass backwards. Training is our most

important investment—and the CTO/Chief Training important investment—and the CTO/Chief Training Officer ought to sit next to the, say, CFO on the Officer ought to sit next to the, say, CFO on the

executive floor. That’s obviously the story for the executive floor. That’s obviously the story for the military, sports, and the arts to name a few.military, sports, and the arts to name a few.

The Container Store, invariably in the Top 10 “best The Container Store, invariably in the Top 10 “best companies to work for in the USA,” believes. The companies to work for in the USA,” believes. The

average retail employee gets 16 hours of training The average retail employee gets 16 hours of training The

# at the Container Store: # at the Container Store: 270270 hours hours. .

Among other things, employee turnover is Among other things, employee turnover is <10%<10%

versus a retail average of >100%.versus a retail average of >100%.

>2X/28T>2X/28T

W > W > 2X2X (C + I)* (C + I)**“Women now drive the global economy. Globally, they control about *“Women now drive the global economy. Globally, they control about

$20 trillion in consumer spending, and that figure could climb as high as $20 trillion in consumer spending, and that figure could climb as high as

$28$28 trillion in the next trillion in the next five yearsfive years. . Their $13 trillion in total yearly earnings could reach Their $13 trillion in total yearly earnings could reach

$18 trillion in the same period.$18 trillion in the same period. In aggregate, women represent a growth market In aggregate, women represent a growth market bigger than China and India combined—more than twice as big in fact. Given bigger than China and India combined—more than twice as big in fact. Given

those numbers, it would be foolish to ignore or underestimate the female those numbers, it would be foolish to ignore or underestimate the female consumer. And yet many companies do just that—even ones that are confidant consumer. And yet many companies do just that—even ones that are confidant that they have a winning strategy when it comes to women. Consider Dell’s …”that they have a winning strategy when it comes to women. Consider Dell’s …”

Source: Michael Silverstein and Kate Sayre, “The Female Economy,” Source: Michael Silverstein and Kate Sayre, “The Female Economy,” HBRHBR, 09.09, 09.09

2.62.6//2121

At a Manhattan event, I got into conversation with a very At a Manhattan event, I got into conversation with a very successful financial planner. He told me that, having successful financial planner. He told me that, having sensed an enormous opportunity, he had re-oriented his sensed an enormous opportunity, he had re-oriented his practice in directions consistent with an assessment of practice in directions consistent with an assessment of the attributes women sought in a financial advisor. the attributes women sought in a financial advisor.

He offered this startling (and powerful) observation: He offered this startling (and powerful) observation: “The “The ‘relationships’ orientation among women, Tom, is very ‘relationships’ orientation among women, Tom, is very real. For instance, my male clients on average real. For instance, my male clients on average recommend me to 2.6 others. The comparable number of recommend me to 2.6 others. The comparable number of recommendations by my women clients is 21!”recommendations by my women clients is 21!”

2.6.2.6.21.21.Wow!Wow!

8080

““Headline 2020:Headline 2020: Women Hold Women Hold

8080 Percent of Percent of

Management and Management and Professional Jobs”Professional Jobs”

Source: Source: The Extreme Future: The Top Trends That Will The Extreme Future: The Top Trends That Will Reshape the World in the Next 20 YearsReshape the World in the Next 20 Years, James Canton, James Canton

3030

“ “Social Business”Social Business”

MillerCoors: Gender imbalance. Women of Sales peer support. MillerCoors: Gender imbalance. Women of Sales peer support. Private network, Attrition plummeted.Private network, Attrition plummeted.

Teva Canada: Supply chain excellence achieved. Teva Canada: Supply chain excellence achieved. Share-Point/troubleshooting/Strategy-Nets/hooked to other Share-Point/troubleshooting/Strategy-Nets/hooked to other functions; Moxie social tools, document editing, etc.functions; Moxie social tools, document editing, etc.

IBM: Social business tools/ IBM: Social business tools/ 30%30% drop in project drop in project

completion time/300K on LinkedIn, 200K on Facebook.completion time/300K on LinkedIn, 200K on Facebook.

Bloomberg: Mobi social media analytics prelude to stock Bloomberg: Mobi social media analytics prelude to stock performance.performance.

Intuit: struggling against H&R Block temp staffing/customers #1 Intuit: struggling against H&R Block temp staffing/customers #1 asset/Live Community, focused on help with transactions (not asset/Live Community, focused on help with transactions (not general, embedded in TurboTax).general, embedded in TurboTax).

Social Business By Design: Transformative Social Media StrategiesSocial Business By Design: Transformative Social Media Strategies For the Connected CompanyFor the Connected Company —Dion Hinchcliffe & Peter Kim —Dion Hinchcliffe & Peter Kim

11/47/47

No Kidding: There is onlyNo Kidding: There is only11 thing I’ve come to believe “for thing I’ve come to believe “for

sure” in the sure” in the 4747 years between my first “real job” (as a junior years between my first “real job” (as a junior

officer in a Seabee battalion in Vietnam) and today. Sometimes I officer in a Seabee battalion in Vietnam) and today. Sometimes I call it WTTMSW: Whoever Tries The Most Stuff Wins. That is, life call it WTTMSW: Whoever Tries The Most Stuff Wins. That is, life to a large extent is a numbers came and a hustler’s game. Try to a large extent is a numbers came and a hustler’s game. Try more stuff. Try it fast. And perhaps the world will become your more stuff. Try it fast. And perhaps the world will become your oyster. Actually, my favorite formulation comes not from myself, oyster. Actually, my favorite formulation comes not from myself, but from iconoclastic EDS founder Ross Perot: RFA. Or: but from iconoclastic EDS founder Ross Perot: RFA. Or:

Ready. Fire. Aim.Ready. Fire. Aim. Ross sold EDS to GM, Ross sold EDS to GM,

went on the Board, and was ultimately frustrated. He put it this went on the Board, and was ultimately frustrated. He put it this way: way: “The first EDSer to see a snake kills it. At GM, the first “The first EDSer to see a snake kills it. At GM, the first thing you do is organize a committee on snakes. Then you bring thing you do is organize a committee on snakes. Then you bring in a consultant who knows a lot about snakes. Third thing you do in a consultant who knows a lot about snakes. Third thing you do is talk about it for a year.”is talk about it for a year.”

Amen.Amen.

100100

My favorite slide in my set of >4,000:My favorite slide in my set of >4,000: “YOU “YOU

MISS MISS 100%100% OF OF

THE SHOTS YOUTHE SHOTS YOU NEVER TAKE.” NEVER TAKE.”

—Wayne—Wayne GretzkyGretzky

5050

I call it the all-important I call it the all-important “Hangout “Hangout Factor.”Factor.” We are what we eat/We are We are what we eat/We are who we hang out with:who we hang out with: “[CEO A.G.] Lafley “[CEO A.G.] Lafley

has shifted has shifted P&G’s P&G’s focus on inventing all its own products focus on inventing all its own products

to developing …to developing … OTHERSOTHERS’ ’ INVENTIONSINVENTIONS

AT LEAST AT LEAST 50%50% OF THE TIME OF THE TIME.. One successfulOne successful

example, Mr. Clean Magic Eraser, based on a product example, Mr. Clean Magic Eraser, based on a product found in an Osaka market.” found in an Osaka market.” ——FortuneFortune

1.5X1.5X

I call “them” the I call “them” the “Little BIG Things.”“Little BIG Things.” Seemingly small changes Seemingly small changes with E-N-O-R-M-O-U-S LEVERAGE. (And little capital required. For with E-N-O-R-M-O-U-S LEVERAGE. (And little capital required. For instance:instance:

Walmart sells a lot of big items—e.g. microwave ovens, TVs, etc. Walmart sells a lot of big items—e.g. microwave ovens, TVs, etc. Some time back, Walmart tested—significantly increased—shopping Some time back, Walmart tested—significantly increased—shopping cart size.cart size.

Big item sales jumped ….… Big item sales jumped ….… 50%50%!!(With a smaller cart, you pick up the big item and head for the (With a smaller cart, you pick up the big item and head for the checkout. With a big cart you are likely to … keep on truckin’ or checkout. With a big cart you are likely to … keep on truckin’ or shoppin’.)shoppin’.)

LittleLittle = = BIG BIGBIG BIG in a in a BIG BIGBIG BIG system. system.

45/8645/86

Signing up—or not—for a 401(k) program is a major “life” Signing up—or not—for a 401(k) program is a major “life” planning decision. planning decision.

Nonetheless: In one test, if a prospective participant went Nonetheless: In one test, if a prospective participant went through the on-line registration process and in order to get in through the on-line registration process and in order to get in he needed to click on, in effect, “OPT IN,” the share of those he needed to click on, in effect, “OPT IN,” the share of those

proactively “clicking” to join was proactively “clicking” to join was 45%45%. (Opt in = . (Opt in = ClickClick = =

45% join)45% join)

In the alternative version of the process, the user was In the alternative version of the process, the user was effectively automatically “in” effectively automatically “in” (it was the “default position”),(it was the “default position”), and he/she had to proactively click on “no, don’t want to join” and he/she had to proactively click on “no, don’t want to join”

in order to opt out. In that case fully in order to opt out. In that case fully 86%86% ended up ended up

joining. (In = joining. (In = DefaultDefault = 86% join.) = 86% join.)

Which is to say—concerning a decision of the utmost Which is to say—concerning a decision of the utmost importance to oneself and one’s family—the “mere” change of importance to oneself and one’s family—the “mere” change of the single-click OPT IN-OPT OUT process led to an almost … the single-click OPT IN-OPT OUT process led to an almost …

2:12:1 … difference in outcome! … difference in outcome!

Talk about … Talk about … LittleLittle = = BIGBIG..

2X2X

Little = Little = BIGBIG = $Billions = $Billions

2X2X: : “When [designer] Friedman “When [designer] Friedman

slisligghtlhtly y curvedcurved the the

right angle of an entrance corridor to one right angle of an entrance corridor to one property, he was ‘amazed at the magnitude of property, he was ‘amazed at the magnitude of

change in pedestrians’ behavior’—the change in pedestrians’ behavior’—the percentage who entered increased from percentage who entered increased from oneone--

thirdthird to nearly to nearly twotwo--thirdsthirds.”.” —Natasha Dow Schull, —Natasha Dow Schull, Addiction By Design: Machine Gambling in Las VegasAddiction By Design: Machine Gambling in Las Vegas

8/808/80

TALK ABOUT A MISMATCH: Customers TALK ABOUT A MISMATCH: Customers describing their service experience asdescribing their service experience as

“ “superior”: superior”: 88%%Companies describingCompanies describing

the service experience they provide asthe service experience they provide as

“ “superior”: superior”: 80%80%——Source: Bain & Company survey of 362 companies, reported in John DiJulius,Source: Bain & Company survey of 362 companies, reported in John DiJulius,

What's the Secret to Providing a World-class Customer Experience?What's the Secret to Providing a World-class Customer Experience?

14,00014,00020,00020,000

3030

eBay: eBay: 14,00014,000 employees employees

Amazon: Amazon: 20,00020,000 employees employees

Craigslist: Craigslist: 3030 employees employees

While Craigslist While Craigslist isis different from Amazon and eBay, it has many different from Amazon and eBay, it has many similarities, is wildly successful (for one thing, more visitors than the similarities, is wildly successful (for one thing, more visitors than the other two), has changed the world—and has an imputed market cap in other two), has changed the world—and has an imputed market cap in the billion$$$$.the billion$$$$.

And all that with And all that with 3030 people! people!

My message in using this example is simply that there is indeed “more My message in using this example is simply that there is indeed “more than one way to skin a cat”!than one way to skin a cat”!

And differences among the three companies cited notwithstanding, I And differences among the three companies cited notwithstanding, I believe that in today’s whacky world, any consideration of options, believe that in today’s whacky world, any consideration of options, when determining how to tackle a project, any and every project, ought when determining how to tackle a project, any and every project, ought

to include what I call to include what I call “the Craigslist option”“the Craigslist option” —that is, something —that is, something “completely different.” “completely different.”

You maYou mayy not choose that extreme o not choose that extreme opption, but the odds are tion, but the odds are pprettrettyy hi higgh h that its that its ppresence resence pper se will exert sier se will exert siggnificant influence on the onificant influence on the opption tion you do chooseyou do choose..