Tom Peters’Tom Peters’

Re-Imagine:Re-Imagine:ExcellenceExcellence

NOWNOW

World Strategy ForumWorld Strategy ForumThe New Rules: Reframing CapitalismThe New Rules: Reframing Capitalism

Seoul/13 June 2012Seoul/13 June 2012(slides @ tompeters.com and excellencenow.com)(slides @ tompeters.com and excellencenow.com)

1977-19821977-1982

““Not Dead Yet”Not Dead Yet”

BRIC/2011: $11T/$4K per capitaBRIC/2011: $11T/$4K per capitaUSA/2011: $16T/$48K per capitaUSA/2011: $16T/$48K per capita

USA/2000: 4% population/30% world GDPUSA/2000: 4% population/30% world GDPUSA/2010: 4% populattion/28% world GDPUSA/2010: 4% populattion/28% world GDP

USA productivity: ’07/1.7%; ’08/2.1%; ’09/5.4%; ’10/2.4%; USA productivity: ’07/1.7%; ’08/2.1%; ’09/5.4%; ’10/2.4%; ’11/4.1%’11/4.1%

FDIC institutions: 4Q/2008/-$38B; 2Q/2011/+$29BFDIC institutions: 4Q/2008/-$38B; 2Q/2011/+$29B

1/2008 to 9/2011: USA consumer savings 0% to 6%/$2.1T saved1/2008 to 9/2011: USA consumer savings 0% to 6%/$2.1T saved

Foreign Direct Investment: 2003: $64B; 2008: $328B; 2009: Foreign Direct Investment: 2003: $64B; 2008: $328B; 2009: $134B; 2011: $200B+$134B; 2011: $200B+

Exports/2009: USA $1.53T ($1.06T goods, $0.47T services); Exports/2009: USA $1.53T ($1.06T goods, $0.47T services); Germany $1.36T; China $1.33TGermany $1.36T; China $1.33T

USA/Refined petroleum products/1Q 2011: Imports 2.16M BPD; USA/Refined petroleum products/1Q 2011: Imports 2.16M BPD; Exports 2.49M BPDExports 2.49M BPD

““New economy”: Apple (>Exxon) + Google + Facebook ~ $1T New economy”: Apple (>Exxon) + Google + Facebook ~ $1T market capmarket cap

Source: Daniel Gross, Source: Daniel Gross, The Myth of American Decline and the Growth of a New EconomyThe Myth of American Decline and the Growth of a New Economy

iPad/$4 billioniPad/$4 billion of $300 billion negative of $300 billion negative USA trade balance with USA trade balance with

China (2011)China (2011)

Cost/Profit Components:Cost/Profit Components:

Total labor 7%Total labor 7%

(Chinese labor: 2%)(Chinese labor: 2%)Materials 31%Materials 31%

Distribution: 15%Distribution: 15%Profit: 47%Profit: 47%

Landed iPad cost: Landed iPad cost: $275 = $275 = ImImpputeduted USA negative trade balance with ChinaUSA negative trade balance with China

((ActualActual China cost: $10) China cost: $10)

Source: Personal Computing Industry Centre (Source: Personal Computing Industry Centre (EconomistEconomist))

CostCost**/Profit Components:/Profit Components:

Total labor 7%Total labor 7%

(Chinese labor: 2%)(Chinese labor: 2%)Materials 31%Materials 31%

Distribution: 17%Distribution: 17%Profit: 47%Profit: 47%

Landed iPad cost: Landed iPad cost: $275 = $275 = ImImpputeduted USA negative trade balance with ChinaUSA negative trade balance with China

((ActualActual China cost: $10) China cost: $10)

*Biggest non-USA component: *Biggest non-USA component: KoreaKoreaSource: Personal Computing Industry Centre (Source: Personal Computing Industry Centre (EconomistEconomist))

Q3 2011/BLSQ3 2011/BLS

+3.1/+3.1/Non-farm productivity growthNon-farm productivity growth

+3.8/+3.8/Non-farm outputNon-farm output

+0.6/+0.6/Non-farm hours workedNon-farm hours worked

+5.4/+5.4/Manufacturing productivityManufacturing productivity

++4.74.7//Manufacturing outputManufacturing output

-0.6//Manufacturing hours workedManufacturing hours worked

Source: Bureau of Labor Statistics/03 November 2011Source: Bureau of Labor Statistics/03 November 2011

It’s Getting a Little Strange OutIt’s Getting a Little Strange Out**

DelFly/lighter than yourDelFly/lighter than your wedding ringwedding ring ((EconomistEconomist 0602) 0602)

Oscar Pistorius’ sprinting Oscar Pistorius’ sprinting acumen/approved foracumen/approved for

LondonLondon ((WSJWSJ 0602) 0602)

*See Ray Kurzweil, *See Ray Kurzweil, The Singularity Is Near: The Singularity Is Near: When Humans Transcend Biology When Humans Transcend Biology;; key keychapter, “GNR: Three Overlapping Revolutions” chapter, “GNR: Three Overlapping Revolutions” (GNR: (GNR: GeneticsGenetics, , NanotechnoloNanotechnology, gy, RoboticsRobotics) )

““In some sense you can In some sense you can argue that the science argue that the science

fiction scenario is already fiction scenario is already starting to happen. starting to happen. The The comcompputers are in control. uters are in control.

We We jjust live in their ust live in their worldworld.”.” —Danny Hillis, Thinking —Danny Hillis, Thinking

Machines Machines

““Unless mankind Unless mankind redesigns itself by redesigns itself by changing our DNAchanging our DNA

through altering our through altering our genetic makeup, genetic makeup,

comcompputeruter-g-generated enerated robots will take overrobots will take over

the worldthe world.”.” – Stephen Hawking– Stephen Hawking

Tom Peters’Tom Peters’

Re-Imagine:Re-Imagine:ExcellenceExcellence

NOWNOW

World Strategy Forum/The New Rules: World Strategy Forum/The New Rules:

ReframinReframing g OrOrgganizationanization EffectivenessEffectiveness**(*McKinsey OE Practice: 1977-present)(*McKinsey OE Practice: 1977-present)

““Tom, let me tell you the Tom, let me tell you the definition of a good definition of a good lending officer. …lending officer. …

““Tom, let me tell you the Tom, let me tell you the definition of a good lending definition of a good lending

officer.officer. After church on SundaAfter church on Sunday,y, on the waon the wayy home with his home with his

familfamilyy, he takes a little detour , he takes a little detour to drive bto drive byy the factor the factoryy he he jjust ust

lent monelent moneyy to. Doesn’t to. Doesn’t ggo in or o in or ananyy such thin such thingg, , jjust drives bust drives byy

and takes a lookand takes a look.”.”

2525

MBWMBWAA

MManaginganaging

BBy y

WWanderingandering

AAroundround

““The art of war does not The art of war does not require complicated require complicated

maneuvers; the simplest are maneuvers; the simplest are the best and common sense is the best and common sense is fundamental. From which one fundamental. From which one

might wonder how it is might wonder how it is

generals make blunders; generals make blunders; itit is because theis because theyy tr tryy to to

be cleverbe clever.”.” —Napoleon—Napoleon

ExcellenceExcellence

Excellence1982: The Bedrock “EiExcellence1982: The Bedrock “Eigght Basics”ht Basics”

1. A Bias for 1. A Bias for ActionAction2. Close to the 2. Close to the CustomerCustomer3. 3. AutonomAutonomyy and and EntreEntreppreneurshireneurshipp4. Productivity Through 4. Productivity Through PeoPeopplele5. 5. Hands OnHands On, , Value-DrivenValue-Driven6. 6. Stick toStick to the Knitting the Knitting7. 7. SimSimpplele Form, Form, LeanLean Staff Staff8. Simultaneous 8. Simultaneous Loose-TightLoose-Tight PropertiesProperties

““Breakthrough” 82*Breakthrough” 82*

People! People! CustomersCustomers

! ! Action! Action! Values! Values!

**In Search of ExcellenceIn Search of Excellence

Hard is Soft.Hard is Soft.Soft is Hard.Soft is Hard.

““The first step is to measure whatThe first step is to measure what can easily be measured. This is okay can easily be measured. This is okay as far as it goes. The second step isas far as it goes. The second step is to disregard that which cannot be to disregard that which cannot be measured, or give it an arbitrary measured, or give it an arbitrary

quantitative value. This is artificial quantitative value. This is artificial and misleading. The third step isand misleading. The third step is to presume that what cannot be to presume that what cannot be measured is not very important. measured is not very important.

This is blindness. The fourth step isThis is blindness. The fourth step is to say that what cannot be measured to say that what cannot be measured does not really exist. This is suicide.”does not really exist. This is suicide.”

—Daniel Yankelovich (from —Daniel Yankelovich (from Enough!Enough!, by Jack Bogle), by Jack Bogle)

““Diverse groups of problem solvers—groupsDiverse groups of problem solvers—groups of people with diverse tools—consistently of people with diverse tools—consistently outperformed groups of the best and the outperformed groups of the best and the

brightest. If I formed two groups, one brightest. If I formed two groups, one randomrandom (and therefore diverse) and one (and therefore diverse) and one

consisting of the consisting of the bestbest individual performers, individual performers, the first group almost always did better. …the first group almost always did better. …

DiversityDiversity trumped trumped abilityability.”.” —Scott Page, —Scott Page, The Difference: The Difference:

How the Power of Diversity Creates Better Groups,How the Power of Diversity Creates Better Groups, Firms, Schools, and Societies Firms, Schools, and Societies

or it's simply or it's simply not worth not worth

doingdoing

““Business has to give people enriching, Business has to give people enriching,

rewarding lives … rewarding lives … or it's or it's simply not simply not

worth worth doingdoing.”.”

——Richard BransonRichard Branson

Oath of Office:Oath of Office: Managers/Servant Leaders Managers/Servant Leaders

Our goal is to serve our customers brilliantly and profitably overOur goal is to serve our customers brilliantly and profitably over the long haul.the long haul.Serving our customers brilliantly and profitably over the longServing our customers brilliantly and profitably over the long haul is a product of brilliantly serving, over the long haul, thehaul is a product of brilliantly serving, over the long haul, the people who serve the customer.people who serve the customer.

Hence, our job as leaders—the alpha and the omega andHence, our job as leaders—the alpha and the omega and everything in between—is abetting the sustained growth everything in between—is abetting the sustained growth andand success and engagement and enthusiasm and commitment success and engagement and enthusiasm and commitment toto Excellence of those, one at a time, who directly or indirectlyExcellence of those, one at a time, who directly or indirectly serve the ultimate customer.serve the ultimate customer.

We—leaders of every stripe—are in the “Human Growth andWe—leaders of every stripe—are in the “Human Growth and Development and Success and Aspiration to ExcellenceDevelopment and Success and Aspiration to Excellence business.”business.”““We” We” [leaders][leaders] only grow when “they” only grow when “they” [each and every one of our colleagues][each and every one of our colleagues] are are growing.growing.““We” We” [leaders][leaders] only succeed when “they” only succeed when “they” [each and every one of our colleagues][each and every one of our colleagues]

are succeeding.are succeeding.““We” We” [leaders][leaders] only energetically march toward Excellence when only energetically march toward Excellence when “ “they” they” [each and every one of our colleagues][each and every one of our colleagues] are energetically marching are energetically marching toward Excellence.toward Excellence.Period.Period.

EMPLOYEES FIRST, CUSTOMERS SECOND:EMPLOYEES FIRST, CUSTOMERS SECOND:Turning Conventional Management Upside Turning Conventional Management Upside

DownDownVineet Nayar/CEO/HCL TechnologiesVineet Nayar/CEO/HCL Technologies

The Memories That MatterThe Memories That Matter

The people you developed who went on toThe people you developed who went on to stellar accomplishments inside or outsidestellar accomplishments inside or outside the company.the company. The (no more than) two or three people you developed who went on The (no more than) two or three people you developed who went on toto create create stellar institutions of their own.stellar institutions of their own.The longshots (people with “a certain something”) you bet on whoThe longshots (people with “a certain something”) you bet on who surprised themselves—surprised themselves—andand your peers. your peers.

The people of all stripes who 2/5/10/20 yearsThe people of all stripes who 2/5/10/20 years later say later say “You made a difference in my “You made a difference in my life,”life,” “ “Your belief in me changed everything.”Your belief in me changed everything.”The sort of/character of people you hired in general. (The sort of/character of people you hired in general. (And And the bad the bad apples you chucked out despite some stellar traits.)apples you chucked out despite some stellar traits.)A handful of projects (a half dozen at most) you doggedly pursued A handful of projects (a half dozen at most) you doggedly pursued thatthat still make you smile and which fundamentally changed the waystill make you smile and which fundamentally changed the way things are done inside or outside the company/industry.things are done inside or outside the company/industry. The supercharged camaraderie of a handful of Great Teams aiming The supercharged camaraderie of a handful of Great Teams aiming toto “ “change the world.”change the world.”

““The The fourfour most most imimpportantortant wordswords in any in any

organization are …organization are …

The four most important words in any organizationThe four most important words in any organization

are …are … “What “What do do youyou think?”think?”

Source: courtesy Dave Wheeler, posted at tompeters.com Source: courtesy Dave Wheeler, posted at tompeters.com

““The doctor The doctor interruptsinterrupts after …*after …*

*Source: Jerome Groopman, *Source: Jerome Groopman, How Doctors ThinkHow Doctors Think

18 18 ……

18 … 18 … secondsseconds!!

[An [An obsessionobsession with] Listening is ... the ultimate mark with] Listening is ... the ultimate mark

of of RespectRespect..

Listening is ... the heart and soul of Listening is ... the heart and soul of EngagementEngagement..Listening is ... the heart and soul of Listening is ... the heart and soul of KindnessKindness..Listening is ... the heart and soul of Listening is ... the heart and soul of ThoughtfulnessThoughtfulness..Listening is ... the basis for true Listening is ... the basis for true CollaborationCollaboration..Listening is ... the basis for true Listening is ... the basis for true PartnershipPartnership..Listening is ... a Listening is ... a Team SportTeam Sport..Listening is ... a Listening is ... a Developable Individual SkillDevelopable Individual Skill.* .* (*Though women (*Though women are are farfar better at it than men.) better at it than men.)

Listening is ... the basis forListening is ... the basis for CommunityCommunity..Listening is ... the bedrock of Listening is ... the bedrock of Joint Ventures that workJoint Ventures that work..Listening is ... the bedrock of Listening is ... the bedrock of Joint Ventures thatJoint Ventures that growgrow..Listening is ... the core of Listening is ... the core of effective Cross-functional effective Cross-functional CommunicationCommunication* * (*Which is in turn Attribute #1 of (*Which is in turn Attribute #1 of organizational effectiveness.)organizational effectiveness.)

[cont.][cont.]

Human creativity Human creativity is the ultimate is the ultimate

economic economic resourceresource

““Human Human creativity is creativity is the ultimate the ultimate

economic economic resource.”resource.”

—Richard Florida, —Richard Florida, The Rise of the Creative ClassThe Rise of the Creative Class

““Every child is Every child is bornborn an artist. an artist. The trick is to The trick is to

remainremain an an artist.”artist.” —Picasso—Picasso

Ye gads: ““Thomas StanleThomas Stanleyy has not onl has not onlyy found no found no correlation between success in school and an abilitcorrelation between success in school and an abilityy to accumulate entreto accumulate entreppreneurial wealth, he’s actuallreneurial wealth, he’s actuallyy found a nefound a neggative correlationative correlation. ‘It seems that school-. ‘It seems that school-related evaluations are poor predictors of economic related evaluations are poor predictors of economic

success,’ Stanley concluded. ‘What did predict success,’ Stanley concluded. ‘What did predict success was a willingness to take risks. Yet the success was a willingness to take risks. Yet the

success-failure standards of most schools penalized success-failure standards of most schools penalized

risk takers.’risk takers.’ Most educational Most educational ssyystems reward those who stems reward those who

pplalayy it safe. As a result, those it safe. As a result, those who do well in school find it who do well in school find it

hard to take risks later onhard to take risks later on.”.” —

Richard Farson & Ralph Keyes, Whoever Makes the Most Mistakes Wins

Up,Up, Up,Up, Up, Up, UpUp

the Value-added Ladder …the Value-added Ladder …

Design Design WINsWINs!!

APPLEAPPLE market market capcap

> Exxon Mobil* > Exxon Mobil*

*August 2011*August 2011

““We don’t have a good language to talk We don’t have a good language to talk about this kind of thing. In most people’s about this kind of thing. In most people’s

vocabularies, design means veneer. …vocabularies, design means veneer. … But to me, nothing could be further from But to me, nothing could be further from

the meaning of design.the meaning of design. Design Design is the is the fundamentalfundamental soulsoul of a man-made of a man-made

creation.”creation.” —Steve Jobs—Steve Jobs

““Only one company Only one company can be the cheapest. can be the cheapest. All others must use All others must use design.”design.” —Rodney Fitch, Fitch & Co.—Rodney Fitch, Fitch & Co.

Source: Source: InsightsInsights, definitions of design, the Design Council [UK], definitions of design, the Design Council [UK]

HHypypothesisothesis: Men : Men

cannotcannot design for women’s design for women’s

needsneeds!!??!!??

… … this will be this will be the woman’s the woman’s century …century …

““I speak to you with a feminine voice. I speak to you with a feminine voice.

It’s the voice of democracy, of equality. It’s the voice of democracy, of equality. I I am certain, ladies and am certain, ladies and

ggentlemen, that this will be the entlemen, that this will be the women’s centurwomen’s century.y. In the Portuguese In the Portuguese

language, words such as life, soul, and language, words such as life, soul, and hope are of the feminine gender, as are hope are of the feminine gender, as are

other words like courage and sincerity,”other words like courage and sincerity,”

——President Dilma Rousseff President Dilma Rousseff of Brazil, 2011, of Brazil, 2011, 1st1st womanwoman opening keynote, opening keynote,

United Nations General AssemblyUnited Nations General Assembly

““Forget Forget ChinaChina, , IndiaIndia and the and the InternetInternet: :

Economic Growth Is Economic Growth Is Driven by Driven by

WomenWomen.”.”

Source: Headline, Economist

W W > > 2X2X (C + (C + I)*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 trillion in the next five $28 trillion in the next five yyearsears. Their $13 trillion in total yearly earnings could reach $18 . Their $13 trillion in total yearly earnings could reach $18

trillion in the same period.trillion in the same period. In aggregate, women represent a growth market bigger than China and In aggregate, women represent a growth market bigger than China and India combined—more than twice as big in fact. Given those numbers, it would be foolish to ignore or underestimate India combined—more 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 that—even ones that are confidant that they have a winning the female 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 …”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

““Women areWomen are thethe majority majority

market”market” —Fara Warner/—Fara Warner/The Power of the PurseThe Power of the Purse

““AS AS LEADERS, LEADERS, WOMEN WOMEN

RULERULE:: New Studies find New Studies find

that female managers outshine their male that female managers outshine their male counterparts in almost every measure”counterparts in almost every measure”

TITLE/ Special Report/ TITLE/ Special Report/ BusinessWeekBusinessWeek

““Headline 2020:Headline 2020: Women Women

Hold Hold 8080 Percent Percent

of Management and of 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

22/122/1

22/1/1022/1/10 (USA (USA

adult population will have adult population will have grown by 23 million grown by 23 million between 2006 and 2016. between 2006 and 2016. Ages Ages 18-4918-49 will have will have grown by grown by oneone million, age million, age 50+50+ will have grown will have grown by by 2222 million) million)

1/8/201/8/20

Date: 1/1/11Date: 1/1/11Activity: USA BoomersActivity: USA Boomers start turning 65 start turning 65

Rate: Rate: 1 every 1 every 88 secondssecondsDuration: Duration: 2020 yearsyearsImpacted: EVERYTHINGImpacted: EVERYTHING

44-6544-65:: “New “New Customer Customer Majority”Majority”

Source: Source: Ageless MarketingAgeless Marketing, David Wolfe & Robert Snyder, David Wolfe & Robert Snyder

7/137/13

Up,Up, Up,Up, Up, Up, UpUp

the Value-added Ladder …the Value-added Ladder …

IBIBMMtoto

IIBBMM

PlanetarPlanetary y RainmakerRainmaker--inin--ChiefChief!!

“[CEO Sam] Palmisano’s “[CEO Sam] Palmisano’s strategy is to expand tech’s strategy is to expand tech’s borders by pushing users—borders by pushing users—

and entire industries—and entire industries—towardtoward radicallradically y differentdifferent businessbusiness modelsmodels.. The payoff for IBM would be The payoff for IBM would be

access to an ocean of revenue—Palmisano access to an ocean of revenue—Palmisano

estimates it atestimates it at $$500500 billionbillion aa y yearear ——that technology companies have never been that technology companies have never been

able to touch.”able to touch.” ——FortuneFortune

““Satisfaction” vs. “Success”Satisfaction” vs. “Success”

“ ‘Results’ are measured “ ‘Results’ are measured by the by the successsuccess of all of all

those who have those who have purchased your product purchased your product

or service”or service” —Jan Gunnarsson & Olle Blohm, —Jan Gunnarsson & Olle Blohm,

The Welcoming LeaderThe Welcoming Leader

““WHAT CAN BROWN DO FOR YOU?”WHAT CAN BROWN DO FOR YOU?”

“It’s all about “It’s all about solutionssolutions. We . We talk with customers about talk with customers about

how to run better, stronger, how to run better, stronger, cheaper supply chains. We cheaper supply chains. We have 1,000 engineers who have 1,000 engineers who work with customers …”work with customers …”

—Bob Stoffel, UPS senior exec—Bob Stoffel, UPS senior exec

““THE GIANT STALKING BIG OIL: THE GIANT STALKING BIG OIL:

How How SchlumbergerSchlumberger Is Rewriting the Rules of the Is Rewriting the Rules of the

Energy Game.”:Energy Game.”: “IPM [Integrated “IPM [Integrated Project Management] strays from Project Management] strays from [Schlumberger’s] traditional role [Schlumberger’s] traditional role as a service provider and moves as a service provider and moves

deeper into areas once dominated deeper into areas once dominated by the majors.”by the majors.”

Source: Source: BusinessWeekBusinessWeek cover story, January 2008 cover story, January 2008

MasterCard MasterCard AdvisorsAdvisors

11/46/46

““We made mistakes, of course. Most of them were We made mistakes, of course. Most of them were omissions we didn’t think of when we initially wrote the omissions we didn’t think of when we initially wrote the

software. software. We fixed them by doing it over and over, We fixed them by doing it over and over, again and again.again and again. We do the same today. While our We do the same today. While our competitors are still sucking their thumbs trying to competitors are still sucking their thumbs trying to

make the design perfect, we’re already on prototype make the design perfect, we’re already on prototype

versionversion ##55.. By the time our rivals are ready By the time our rivals are ready

with wires and screws, we are on version with wires and screws, we are on version

##1010.. It gets back to It gets back to planning versus actingplanning versus acting: : We act We act from day onefrom day one; ; others plan how others plan how

toto planplan——for monthsfor months.”.”

——Bloomberg by BloombergBloomberg by Bloomberg

READY.READY.FIRE.FIRE.AIM.AIM.

H. Ross Perot (vs H. Ross Perot (vs ““Aim! Aim! Aim!”Aim! Aim! Aim!” /EDS vs GM/1985)/EDS vs GM/1985)

Lesson46:Lesson46: WTTMTWWTTMTW

WhoeverWhoeverTriesTriesTheTheMostMostThingsThingsWinsWins

Better yet:Better yet: WTTMTWTTMTTFTFWW

WhoeverWhoeverTriesTriesTheTheMostMostThingsThingsTheTheFastestFastestWinsWins

““Experiment Experiment fearlessly”fearlessly”

Source: Bloomberg BusinessWeek, “Type A Organization Strategies:

How to Hit a Moving Target”—Tactic #1Tactic #1

“relentless trial“relentless trial and error” and error”

Source: Source: Wall Street JournalWall Street Journal, cornerstone of effective approach to “rebalancing” company, cornerstone of effective approach to “rebalancing” company portfolios in the face of changing and uncertain global economic conditions (11.08.10) portfolios in the face of changing and uncertain global economic conditions (11.08.10)

““The secret of fast The secret of fast progress is progress is

inefficiency, fast , fast and furious and and furious and

numerous failures.”numerous failures.”—Kevin Kelly

““Rose gardeners face a choice every spring. The long-term fate of a rose garden 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 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 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 control. You force the plant to make the maximum use of its available resources, by

putting them into the the rose’s ‘core business.’ putting them into the the rose’s ‘core business.’ Pruning hard is a Pruning hard is a dangerous policy in an unpredictable environment. Thus, dangerous policy in an unpredictable environment. Thus, if you are in a spot where you know nature may play tricks 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 on you, you may opt for a policy of high tolerance. You will

never have the biggest roses, but you have a much-never have the biggest roses, but you have a much-enhanced chance of having roses every year. You will enhanced chance of having roses every year. You will

achieve a gradual renewal of the plant. In short, tolerant achieve a gradual renewal of the plant. In short, tolerant pruning achieves two ends: (1) pruning achieves two ends: (1) It makes it easier to cope It makes it easier to cope with unexpected environmental changeswith unexpected environmental changes. (2) . (2) It leads to a It leads to a

continuous restructuring of the plantcontinuous restructuring of the plant. The policy of . The policy of tolerance admittedly wastes resources—the extra buds tolerance admittedly wastes resources—the extra buds

drain away nutrients from the main stem. But in an drain away nutrients from the main stem. But in an unpredictable environment, this policy of tolerance makes unpredictable environment, this policy of tolerance makes the rose healthier in the long run.”the rose healthier in the long run.” —Arie De Geus, —Arie De Geus, The Living CompanyThe Living Company

The Power of The Power of Co-creationCo-creation

The The BottlenecBottlenec

k …k …

“The Bottleneck The Bottleneck … Is at … Is at

the Top of the the Top of the Bottle”Bottle”

“Where are you likely to find people “Where are you likely to find people with the with the least diversitleast diversityy of ex of expperienceerience, ,

the the larlarggest investment in the est investment in the ppastast,, and the g and the greatest reverence for reatest reverence for

industrindustryy do doggmama … …

AtAt thethe totop!”p!”

— Gary Hamel/— Gary Hamel/Harvard Business ReviewHarvard Business Review

““Who’s the most Who’s the most interesting person interesting person you’ve met in the you’ve met in the last 90 days? How last 90 days? How do I get in touch do I get in touch

with them?”with them?” —Fred Smith—Fred Smith

… … and just waitand just wait

“I am often asked by I am often asked by would-be entrepreneurs would-be entrepreneurs seeking escape from life seeking escape from life within huge corporate within huge corporate structures, structures, ‘How do I build a small firm for myself?’ The answer The answer

seems obviousseems obvious … …

Source: Paul Ormerod, Why Most Things Fail: Evolution, Extinction and Economics

“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 Buy a very largelarge

one and just one and just waitwait.”.” —Paul Ormerod, Why Most Things

Fail: Evolution, Extinction and Economics

““Mr. Foster and his McKinsey colleagues Mr. Foster and his McKinsey colleagues collected detailed performance data stretching collected detailed performance data stretching

back back 4040 years for years for 1,0001,000 U.S. companies. U.S. companies.

TheTheyy found that found that nonenone ofof

the lon the longg-term survivors mana-term survivors managged ed to outto outpperform the market. Worse, erform the market. Worse, the lonthe longger comer comppanies had been in anies had been in

the database, the worse thethe database, the worse theyy did did.”.”

—Financial Times—Financial Times

““Data drawn from the real world Data drawn from the real world attest to a fact that is beyond attest to a fact that is beyond

our control:our control: Everything in existence tends to deteriorate.”

—Norberto Odebrecht, —Norberto Odebrecht, Education Through WorkEducation Through Work

MittELstandMittELstand* * ****

**““aaggile creatures dartinile creatures dartingg between the between the leleggssof the multinational monstersof the multinational monsters””((Bloomberg Bloomberg BusinessWeekBusinessWeek))

**E.g. Goldmann Produktion**E.g. Goldmann Produktion

““Be the best. Be the best. It’s the only It’s the only

market that’s market that’s not crowded.”not crowded.”

From: From: Retail Superstars: Inside the 25 BestRetail Superstars: Inside the 25 Best Independent Stores in America,Independent Stores in America, George Whalin George Whalin

14,00014,00020,00020,000

3030

14,000/14,000/eeBayBay20,000/Amazon20,000/Amazon

3030/Craigslist/Craigslist

Kevin Roberts’ CredoKevin Roberts’ Credo

11. Ready. Fire! Aim.. Ready. Fire! Aim.2. If it ain’t broke ... Break it!2. If it ain’t broke ... Break it!3. Hire crazies.3. Hire crazies.4. Ask dumb questions.4. Ask dumb questions.5. Pursue failure.5. Pursue failure.6. Lead, follow ... or get out of the way!6. Lead, follow ... or get out of the way!7. Spread confusion.7. Spread confusion.8. Ditch your office.8. Ditch your office.9. Read odd stuff.9. Read odd stuff.

10. Avoid moderationAvoid moderation!!