Tom Peters & Strategy

Conrad Hilton, at a gala celebrating his career, was asked, “What was the most important lesson you’ve learned in you long and distinguished career?” His immediate answer …

“ remember to tuck the shower curtain inside the bathtub ”

“ Execution is strategy.” —Fred Malek

“ 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 the y tr y to be clever .” —Napoleon

Tom Peters’ Excellence. Always. Mini-MASTER/5 November 2009 (PP available to download at tompeters.com)

NOTE : To appreciate this presentation [and ensure that it is not a mess ], you need Microsoft fonts: “Showcard Gothic,” “Ravie,” “Chiller” and “Verdana”

“ Excellence … can be obtained if you: ... care more than others think is wise; ... risk more than others think is safe; ... dream more than others think is practical; ... expect more than others think is possible.” Source: Anon. (Posted @ tompeters.com by K.Sriram, November 27, 2006 1:17 AM)

The greatest danger for most of us is not that our aim is too high and we miss it, but that it is too low and we reach it. Michelangelo

Excellence. Always . If not Excellence, what ? If not Excellence now, when ?

“ Strive for Excellence. Ignore success.” —Bill Young, race car driver (courtesy Andrew Sullivan)

“ If a man is called to be a street sweeper, he should sweep streets even as Michelangelo painted, or Beethoven composed music, or Shakespeare wrote poetry. He should sweep streets so well that all the hosts of heaven and earth will pause to say, here lived a great street sweeper who did his job well.” —Martin Luther King Jr.

The failure to pursue EXCELLENCE is incomprehensible to me.

14,000/ e Bay 20,000/Amazon 30 /Craigslist* *Lockheed “Skunk Works,” 125 vs. 5,000(??)

There is more than one way to skin a cat!* *Every project REQUIRES (if you’re smart) an outside look by one/some Seriously Weird Cat/s—in pursuit of a whacked-out option. To consider

“ Insanely Great” Steve Jobs

“ You know a design is good when you want to lick it.” —Steve Jobs Source: Design: Intelligence Made Visible , Stephen Bayley & Terence Conran

“ Radically thrilling” BMW

“ Let us create such a building that future generations will take us for lunatics.” —the church hierarchs at Seville

“ You do not merely want to be the best of the best. You want to be considered the only ones who do what you do .” —Jerry Garcia

“ We are crazy. We should do something when people say it is ‘crazy.’ If people say something is ‘good’, it means someone else is already doing it.” —Hajime Mitarai, Canon

Excellence1982: The Bedrock “Eight Basics” 1. A Bias for Action 2. Close to the Customer 3. Autonom y and Entre p reneurshi p 4. Productivity Through Peo p le 5. Hands On , Value-Driven 6. Stick to the Knitting 7. Sim p le Form, Lean Staff 8. Simultaneous Loose-Tight Properties”

“ Breakthrough” 82* People! Customers! Action! Values! * In Search of Excellence

Hard Is Soft (Plans, # s ) Soft Is Hard (people, customers, values, relationships)

“ The 7-S Model” Strategy Structure Systems Style Skills Staff Super-ordinate goal

“ The 7-S Model” “Hard S s ” (Strategy, Structure, Systems) “Soft S S ” (Style, Skills, Staff, Super-ordinate goal)

“ If I could have chosen not to tackle the IBM culture head-on, I probably wouldn’t have. My bias coming in was toward strategy, analysis and measurement. In comparison, changing the attitude and behaviors of hundreds of thousands of people is very, very hard. [Yet] I came to see in my time at IBM that culture isn’t just one aspect of the game — it is the game .” —Lou Gerstner, Who Says Elephants Can’t Dance

Ken Kizer/VA 1997: “culture of cover-up that pervades healthcare” “Patient Safety Event Registry” … “looking for systemic solutions, not seeking to fix blame on individuals except in the most egregious cases. The good news was a thirt y -fold increase in the number of medical mistakes and adverse events that got reported.” “ National Center for Patient Safety Ann Arbor”

ExIn*: 1982-2002/Forbes.com DJIA: $10,000 yields $85,000 EI: $10,000 yields $140,050 *Excellence Index/Basket of 32 publicly traded stocks

MP: “Get the strategy right, the rest will take care of itself.” TP: “Get the people and execution right, the strategy will take care of itself.”

Internal organizational excellence = Deepest “Blue Ocean”

* Internal organizational excellence = “ Brand inside ”

Why in the World did you go to Siberia ?

Enterprise * ** (*at its best): An emotional , vital , innovative , joyful , creative , entrepreneurial endeavor that elicits maximum concerted human potential in the wholehearted service of others .** **Employees, Customers, Suppliers, Communities, Owners, Temporary partners

Organizations exist to serve . Period. Leaders live to serve . Period.

… no less than Cathedrals in which the full and awesome power of the Imagination and Spirit and native Entrepreneurial flair of diverse individuals is unleashed in passionate pursuit of … Excellence .

“ We are a ‘Life Success’ Company.” Dave Liniger, founder, RE/MAX

“ No matter what the situation, [the great manager’s] first res p onse is alwa y s to think about the individual concerned and how thin g s can be arran g ed to hel p that individual ex p erience success .” —Marcus Buckingham, The One Thing You Need to Know

“ Managing winds up being the management of the allocation of resources against tasks. Leadership focuses on people. M y definition of a leader is someone who hel p s p eo p le succeed .” —Carol Bartz, Yahoo!

“ The role of the Director is to create a space where the actors and actresses can become more than they’ve ever been before, more than they’ve dreamed of being .” —Robert Altman, Oscar acceptance speech

The Dream Manager —Matthew Kelly “An organization can only become the-best-version-of-itself to the extent that the people who drive that organization are striving to become better-versions-of-themselves.” “A company’s purpose is to become the-best-version-of-itself. The question is: What is an emplo y ee’s p ur p ose? Most would sa y , ‘to hel p the com p an y achieve its p ur p ose’—but the y would be wron g. That is certainl y part of the emplo y ee’s role, but an emplo y ee’s p rimar y p ur p ose is to become the-best-version-of-himself or –herself . … When a company forgets that it exists to serve customers, it quickly goes out of business. Our employees are our first customers, and our most important customers.”

Thank you Peter Drucker/AIM 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 leaders—the alpha and the omega and everything in between—is 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. Source: The Little BIG Things: 163 Ways to Pursue EXCELLENCE

We—leaders of every stripe—are 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. Source: The Little BIG Things: 163 Ways to Pursue EXCELLENCE

“ You have to treat your employees like customers.” —Herb Kelleher, complete answer, upon being asked his “secrets to success” Source: Joe Nocera, NYT , “Parting Words of an Airline Pioneer,” on the occasion of Herb Kelleher’s retirement after 37 years at Southwest Airlines (SWA’s pilots union took out a full-page ad in USA Today thanking HK for all he had done; across the way in Dallas American Airlines’ pilots were picketing the Annual Meeting)

The Customer Comes Second — Hal Rosenbluth and Diane McFerrin Peters* (*no relation)

“ The p ath to a hostmanshi p culture p aradoxicall y does not g o through the g uest. In fact it wouldn’t be totall y wron g to say that the g uest has nothin g to do with it . True hostmanship leaders focus on their employees. What drives exceptionalism is finding the right people and getting them to love their work and see it as a passion. ... The guest comes into the picture only when you are ready to ask, ‘ Would y ou p refer to sta y at a hotel where the staff love their work or where mana g ement has made customers its hi g hest p riority ?’” “ We went through the hotel and made a ... ‘consideration renovation.’ Instead of redoin g bathrooms, dinin g rooms, and g uest rooms, we g ave em p lo y ees new uniforms, bou g ht flowers and fruit, and chan g ed colors . Our focus was totally on the staff. They were the ones we wanted to make happy. We wanted them to wake up every morning excited about a new day at work.” Source: Jan Gunnarsson and Olle Blohm, Hostmanship: The Art of Making People Feel Welcome .

Our Mission To develop and manage talent; to apply that talent, throughout the world, for the benefit of clients; to do so in partnership; to do so with profit. WPP

Luiza Helena, Magazine Luiza* *Wegmans

“ Business has to give people enriching, rewarding lives … or it's simply not worth doing .” — Richard Branson

“ Leaders ‘ do ’ people. Period.” —Anon.

Leadership is a sacred trust.* *President, classroom teacher, CEO, shop foreman

TP: “How to flush $500,000 down the toilet in one easy lesson!!”

2X Source: Container Store/increase average sale per shopper

“ The ONE Question”: “In the last year [3 years, current job], name the … three people … whose growth you’ve 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 disappointment—looking back, could you or would you have done anything differently? Please tell me about your greatest development triumph—and disaster—in the last five years. What are the ‘three big things’ you’ve learned about helping people grow along the way.”

#1. Strategic . Priority. Period.

“ In short, hiring is the most im p ortant as p ect of business and yet remains woefully misunderstood.” Source: Wall Street Journal , 10.29.08, review of Who: The A Method for Hiring, Geoff Smart and Randy Street

“ Development can help great people be even better— but if I had a dollar to spend, I’d spend 70 cents getting the right person in the door .” — Paul Russell, Director, Leadership & Development, Google

“ I can’t tell y ou how man y times we p assed u p hotshots for g u y s we thou g ht were better p eo p le , and watched our guys do a lot better than the big names, not just in the classroom, but on the field—and, naturally, after they graduated, too. Again and again, the blue chips faded out, and our little up-and-comers clawed their way to all-conference and All-America teams.” —Bo Schembechler (and John Bacon), “Recruit for Character,” Bo’s Lasting Lessons

#1 cause of employee Dis-satisfaction?

Employee retention & satisfaction: Overwhelmin g l y , based on the first-line mana g er! Source: Marcus Buckingham & Curt Coffman, First, Break All the Rules: What the World’s Greatest Managers Do Differently

Capital Asset I **Selecting and training and mentoring one’s pool of front- line managers can be a “Core Competence” of surpassing strategic importance. **Put under a microscope every attribute of the cradle-to- grave process of building the capability of our cadre of front-line managers.

Capital Asset II I am sure you “spend time” on this. My question: Is it an … OBSESSION …worthy of the impact it has on enterprise performance?

1. Hiring 2. Front-line Supervisor Development 3. Promoting

“ AS LEADERS, WOMEN RULE : New Studies find that female managers outshine their male counterparts in almost every measure” TITLE/ Special Report/ BusinessWeek

Women’s 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 . —Judy B. Rosener, America’s Competitive Secret: Women Managers

Lawrence A. Pfaff & Assoc. — 2 Years, 941 mgrs (672M, 269F); 360º feedback — Women: better in 20 of 20 categories; 15 of 20 with statistical significance, incl. decisiveness, planning, setting stds.) — “Men are not rated significantly higher by any of the raters in any of the areas measured.” (LP)

“ Forget China , India and the Internet : Economic Growth Is Driven by Women .” Source: Headline, Economist

“ One thing is certain: Women’s 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, Women’s Forum for the Economy and Society

“ You must be the change you wish to see in the world.” Gandhi

“ Nothing is so contagious as enthusiasm.” —Samuel Taylor Coleridge

“ I am a dispenser of enthusiasm.” —Ben Zander

Half-full Cups: “[Ronald Reagan] radiated an almost transcendent happiness.” —L ou Cannon

“ Mandela, a model host [in his prison hospital room] smiled grandly, put [Justice Minister Kobie] Coetzee at his ease, and almost immediately, to their quietly contained surprise, prisoner and jailer found themselves chatting amiably. … [ It had mostl y ] to do with bod y lan g ua g e, with the im p act Mandela’s manner had on p eo p le he met. First there was his erect p osture. Then there was the wa y he shook hands. The effect was both re g al and intimidatin g , were it not for Mandela’s warm g aze and his bi g , eas y smile . … Coetzee was surprised by Mandela’s willingness to talk in Afrikaans, his knowledge of Afrikaans history.” Coetzee: “He was a born leader. And he was affable. He was obviously well liked by the hospital staff and yet he was respected even though they knew he was a prisoner.” Source: John Carlin, Playing the Enemy: Nelson Mandela and the Game that Made a Nation. (Mandela meets surreptitiously with justice minister after decades in prison—and turns on the charm)

“ It’s alwa y s showtime.” —David D’Alessandro, Career Warfare

“ The doctor interrupts after …* *Source: Jerome Groupman, How Doctors Think

[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 last . Listening is ... the core of effective Cross-functional Communication* (*Which is in turn Attribute #1 of organizational effectiveness.) [cont.]

Listening is ... the engine of superior EXECUTION. Listening is ... the key to making the Sale. Listening is ... the key to Keeping the Customer’s Business . Listening is ... the engine of Network development. Listening is ... the engine of Network maintenance . Listening is ... the engine of Network expansion . Listening is ... Social Networking’s “secret weapon.” Listening is ... Learning. Listening is ... the sine qua non of Renewal . Listening is ... the sine qua non of Creativity . Listening is ... the sine qua non of Innovation . Listening is ... the core of taking Diverse opinions aboard . Listening is ... Strategy . Listening is ... Source #1 of “Value-added.” Listening is ... Differentiator #1. Listening is ... Profitable.* (*The “R.O.I.” from listening is higher than from any other single activity.) Listening is … the bedrock which underpins a Commitment to EXCELLENCE

*Listening is of the utmost … strategic importance! *Listening is a proper … core value ! *Listening is … trainable ! *Listening is a … profession !

Listen = “Profession” = Study = practice = evaluation = Enterprise value

Listen = Profession = Study = practice = evaluation = Enterprise value: "We listen intently to and fully engage all with whom we work."

“ It was much later that I realized Dad’s secret. He gained respect by giving it. He talked and listened to the fourth-grade kids in Spring Valley who shined shoes the same way he talked and listened to a bishop or a college president. He was seriously interested in who you were and what you had to say.” — Sara Lawrence-Lightfoot, Respect

“ You can make more friends in two months b y becomin g interested in other p eo p le than you can in two years by trying to get other people interested in you.” —Dale Carnegie

Questioning, the art [and “profession”] of.

“ The West spent … $ 2.3 trillion on foreign aid over the last five decades and still has not managed to get twelve-cent medicines to children to prevent half of all malaria deaths. The West spent $2.3 trillion and still not managed to get three dollars to each new mother to prevent five million child deaths. … But I and many other like-minded people keep trying, not to abandon aid to the poor, but to make sure it reaches them .”

Easterly, maligned by many, is the arch-enemy of the Big Plan [his capital letters, not mine—for once] sent from afar; and the vociferous fan of practical activities of those he calls “Searchers” … who learn the ins and outs of the culture, politics and local conditions “on the ground” in order to use local levers and local players, and get those 12- cent medicines to community members. Read on, “Planners” vs “Searchers” …

“ In foreign aid, Planners announce good intentions but don’t motivate anyone to carry them out; Searchers find things that work and build on them . Planners apply global blueprints; Searchers adapt to local conditions . Planners never hear whether the planned recipients got what they needed; Searchers find out if the customer is satisfied . … A Planner thinks he already knows the answers; he thinks of poverty as a technical engineering problem that his answers will solve. A Searcher admits he doesn’t know the answers in advance; he hopes to find answers to individual p roblems onl y b y trial and error ex p erimentation . …” —William Easterly, White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and so Little Good

Derived from the above and more, I have extracted a series of “lessons” from the Easterly book. These implementation lessons are, in fact, universal: Lesson (#1 of sooooooo many): Show up! (On the ground, where the action—and possible implementation—is.) Lesson: Invest in ceaseless study of conditions “on the ground”—social and political and historical and systemic.

Lesson: Listen to the “locals.” Lesson: Hear the “locals.”

Lesson: Talk to the “locals.” Lesson: Listen to the “locals.” Lesson: Hear the “locals.” Lesson: Listen to the “locals.” Lesson: Hear the “locals.” Lesson: Listen to the “locals.” Lesson: Hear the “locals.” Lesson: Listen to the “locals.” Lesson: Hear to the “locals.” Lesson: Listen to the “locals.” Lesson: Hear to the “locals.” Lesson: Respect the “locals.” Lesson: Empathize with the “locals.”

Lesson: Have a truly crappy local office, and other un -trappings!

Lesson: Try to blend in, adopting local customs, showing deference were necessary—almost everywhere; and never interrupt the “big man” in front of his folk, even, or especially, if you think he is 180 degrees off. Lesson: Seek out the local leaders’ second cousins, etc, to gain indirect access over their uncle twice removed! (Etc & etc.) Lesson: Have a truly crappy office, and other un-trappings! Lesson: Remember, you do not in fact have the answers despite your PhD with, naturally, honors, from the University of Chicago—where you were mentored by not one, but two, Nobel Laureates in economics. Lesson: Regardless of the enormity of the problem, proceed by trial (manageable in size) and error, error, error. (Failure motto: “Do it right the first time!” Success motto: “Do it right the 37th time!” And hustle through those 37 tries—see the next slide.)

Lesson: The process of political-community engagement must also be approached as a trial and error learning process. Lesson: Always alter the experiment to accommodate local needs—the act of apparent local modification per se is critical, as every community leader, in order for them to accept “ownership” and demonstrate to their constituents that they are in charge, must feel as if they have directly and measurably influenced the experiment. [See the next four slides.] Lesson: Growth (the experimental and expansion- emulation process) must be organic , and proceed at a measured pace—nudged, not hurried. Lesson: Speed kills! (To a point.) By and large, the messiness and “inefficiency” of the local political process must be honored.

Noth - ing is “scalable”!*

Nothing is “scalable”!* * Ever y replication must exude the p erce p tion of uni q ueness —even if it means a half-step backwards . (“It wouldn’t have worked if we hadn’t done it our way.”)

Lesson: Speed kills! Lesson: Short-circuiting political process kills! Lesson: Premature rollout kills! Lesson: Too much publicity-visibility kills! Lesson: Too much money kills! Lesson: Too much technology kills!

Lesson: Outsiders, to be effective, must have genuine appreciation of and affection for the locals with whom and for whom they are working! Lesson: Condescension kills most—said “locals” know unimaginably more about life than well-intentioned “ do gooders,” young or even, alas, not so young. Lesson: Progress … MUST … be consistent with “local politics on the ground” in order to raise the odds of sustainability. Lesson: You will never-ever “fix” “everything at once” or by the time you “finish”—in our Constitutional Convention in 1787, George Washington only got about 60% of what he wanted!

Lesson: Never forget the atmospherics, such as numerous celebrations for tiny milestones reached, showering praise on the local leader and your local cohorts, while you assiduously stand at the back of the crowd—etc. Lesson: The experiment has failed until the systems and political rewards, often small, are in place, with Beta tests completed, to up the odds of repetition. Lesson: Most of your on-the-ground staff must consist of respected locals—the de facto or de jure Chairman or CEO must be a local; you must be virtually invisible. Lesson: Spend enormous “pointless” social time with the local political leaders—in Gulf War I, Norm Schwarzkopf spent his evenings, nearly all of them, drinking tea until 2AM or 3AM with the Saudi crown prince; he called it his greatest contribution!

Lesson: Keep your “start up” plan simple and short and filled with question marks in order to allow others to have the last word . (I once did the final draft of a proposal, making it as flawless as could be. I gave it to my boss, pre Microsoft Word, and he proceeded to cut it up and tape the pieces back together, and conspicuously cross out several paragraphs of my obviously and labored over brilliant prose that he had agreed to. “Tom,” he said as I recall, “we want the rest of the committee [of important, or at least self-important folks] to feel as though they are participating and that you and I are a naïve—not confront them with a beautiful plan that shouts ‘Don’t you dare alter a word.’”)

Lesson: For projects involving children or health or education or community development or sustainable small-business growth (most projects), women are by far the most reliable and most central and most indirectly powerful local players in even the most chauvinist settings—their characteristic process of “implementation by indirection” means “life or death” to sustainable project success; moreover, the expanding concentric circles of women’s traditional networking processes is by far the best way to “ scale up”/expand a program. (Men should not even try to understand what is taking place. Among other things, this networking indirection-largely invisible process will seemingly “take forever” by most men’s “action now, skip steps” S.O.P.—and then, from out of the blue, following an eternity of rambling discussions-on-top-of- rambling-discussions, you will wake up one fine morning and discover that the thing is done that everything has fallen in place “overnight” and that ownership is nearly universal. Concomitant imperative; most of your (as an outsider) staff should be women, alas,most likely not visibly “in charge.”

For projects involving children or health or education or community development or sustainable small-business growth (most projects), women are by far the most reliable and most central and most indirectly powerful local players even in the most chauvinist settings.

Reminders: Show up! (Stick around!) Listen! (Listen! Listen! Listen!) Study local conditions! Stay in the background! (Always defer to local leaders—even bad ones. Do your “workarounds” in private.) Adapt to local conditions!! (No cookie-cutters, please!!) Experiment! (Manageable in size.) (Trial and error, error, error—so, hustle.) (Celebrate the tiniest successes—no such thing as “too much.”) Get the “boring” supporting systems-infrastructure in place! Always: Local politics rules! (Like it or not.) Nudge. (Do not force things because of your schedule.) Women are our “customers,” premier “partners in sustainable implementation.”

“ if you don’t listen, you don’t sell anything.” — Carolyn Marland

“ Everybody lives by selling something.” —Robert Louis Stevenson

“ The four most important words in any organization are …

The four most important words in any organization are … “What do you think?” Source: courtesy Dave Wheeler, posted at tompeters.com

Tomorrow: How many times will you “ask the WDYT question”? [ Count! ] [Practice makes better!] [This is a STRATEGIC skill!]

From Enemy/Reluctant User to Champion/Savior/Owner: The “one line of code!” Axiom

“ The deepest human need is the … need to be a pp reciated .” —William James

“ Thank you” lingers on: 10 years

Tomorrow: How many times will you mange to blurt out, “Thank you”? [ Count ‘em! ] [Practice makes better!* *The engineer from Manchester.]] [This is a STRATEGIC skill!]

*appreciation is of the utmost … strategic importance! *appreciation is a proper … core value ! *appreciation is … trainable ! *appreciation is a … profession !

“ I regard a p olo g izin g as the most magical, healing, restorative gesture human beings can make. It is the centerpiece of my work with executives who want to get better.” —Marshall Goldsmith , What Got You Here Won’t Get You There: How Successful People Become Even More Successfu.

Relationships (of all varieties) : THERE ONCE WAS A TIME WHEN A THREE - MINUTE PHONE CALL WOULD HAVE AVOIDED SETTING OFF THE DOWNWARD SPIRAL THAT RESULTED IN A COMPLETE RUPTURE.

*effective “Repair”/Apology is of the utmost … strategic importance! *effective repair is a proper … core value ! *effective repair is … trainable ! *effective repair is a … profession !

THE PROBLEM IS RARELY/NEVER THE PROBLEM. THE RESPONSE TO THE PROBLEM INVARIABLY ENDS UP BEING THE REAL PROBLEM . * *PERCEPTION IS ALL THERE IS!

Comeback [big, quick response] >> Perfection

Acquire vs maintain*: 5X *Recession goal: Higher “market share” current customers

Press Ganey Assoc : 139,380 former patients from 225 hospitals: none of THE top 15 factors determining P atient S atisfaction referred to patient’s health outcome P.S. directl y related to Staff Interaction P.P.S. directl y correlated with Emplo y ee Satisfaction Source: Putting Patients First , Susan Frampton, Laura Gilpin, Patrick Charmel

“ There is a misconception that supportive interactions require more staff or more time and are therefore more costly. Although labor costs are a substantial part of any hospital budget, the interactions themselves add nothing to the budget. Kindness is free . Listening to patients or answering their questions costs nothing. It can be argued that negative interactions—alienating patients, being non-responsive to their needs or limiting their sense of control—can be very costly. … Angry, frustrated or frightened patients may be combative, withdrawn and less cooperative—requiring far more time than it would have taken to interact with them initially in a positive way .” — Putting Patients First , Susan Frampton, Laura Gilpin, Patrick Charmel

“ We are thoughtful in all we do.”

Thoughtfulness is key to customer retention . Thoughtfulness is key to em p lo y ee recruitment and satisfaction . Thoughtfulness is key to brand perception . Thoughtfulness is key to your ability to look in the mirror —and tell your kids about your job. “ Thoughtfulness is free .” Thoughtfulness is key to s p eedin g thin g s u p— it reduces friction . Thoughtfulness is key to trans p arenc y and even cost containment —it abets rather than stifles truth-telling.

*Thoughtfulness is of the utmost … strategic importance! *thoughtfulness is a proper … core value ! *Thoughtfulness is … trainable ! *Thoughtfulness is a … profession !

“ Courtesies of a small and trivial character are the ones which strike deepest in the grateful and appreciating heart.” —Henry Clay

The Real World’s “Little” Rule Book Ben/tea Norm/tea DDE/make friends WFBuckley/make friends-help friends Gust/Suck down Charlie/poker pal-BOF Eddie VII/dance-flatter-mingle-learn the language Vlad/birthday party of outgroup guy’s wife CIO/finance network ERP installer/consult-“one line of code” GE Energy/make friends risk assessment GWB/check the invitation list GHWB/T-notes Hank/60 calls MarkM/5K-5M Delaware/show up Oppy/snub Lewis Strauss NM/smile -$4.3T/tin ear tp.com/Big 4-What do you think? Women/genes Banker/after church Total Bloody Mess/Can they pay back the loan?

X =XFX* * Excellence = Cross-functional Excellence

The “XF-50”: 50 Ways to Enhance Cross-Functional Effectiveness and Deliver Speed, “Service Excellence” and “Value-added Customer ‘Solutions’” * *See APPENDIX

???? % XF lunches* *Measure! Monthly! Part of evaluation! [The PA’s Club.]

“ Allied commands depend on mutual confidence [and this confidence] is gained, above all through the develo p ment of friendshi p s .” — General D.D. Eisenhower, Armchair General * (05.08) *“Perhaps his most outstanding ability [at West Point] was the ease with which he made friends and earned the trust of fellow cadets who came from widely varied backgrounds; it was a quality that would pay great dividends during his future coalition command

“ Suck down for success!” * ** *** **** **** *“He [Gust Avarkotos] had become something of a legend with these people who manned the underbelly of the Agency [CIA],” from Charlie Wilson’s War **Getting to know “the risk guys” [GE Power] *** “Spend less time with your customer!” **** C(I) > C(E) *****The ATT systems sales exec

R eturn O n I nvestment In R elationships

(Way) Underutilized Lever Space! Space! Space! Space!

Geologists + Geophysicists + A little bit of love = Oil

F L O W E R P O W E R F L O W E R P O W E R

Attending to the “Last 98%”: The New “Management Science,” or “Hard” Is “Soft,” “Soft” Is “Hard”

S = ƒ ( ___ ) Success Is a Function of …

S = ƒ(#&DR; -2L, -3L, 4L, I&E) Success is a function of: Number and depth of relationships 2, 3, and 4 levels down inside and outside the organization S = ƒ(SD>SU) Sucking down is more important than sucking up—the idea is to have the [your] entire organization working for you. S = ƒ(#non-FF, #non-FL) Number of friends not in my function S = ƒ(#XFL/m) Number of lunches with colleagues in other functions per month S = ƒ(#FF) Number of friends in the finance organization

Loser: “He’s such a suck-up!” Winner: “He’s such a suck-down.”

S =ƒ(#PK“ W ”P) S = ƒ(#PK“ L ”P) # of people you know in the “wrong” places # people you know in “low” places

??????? “Success doesn’t depend on the number of people you know; it depends on the number of people you know in hi g h places!” or “Success doesn’t depend on the number of people you know; it depends on the number of people you know in low places!”

It helps to know people in … high places!”

It helps more to know people in … low places!”

Gust Avarkotos’ “boiler room” CIA pals Walter’s “enabler” P.M. Thank You notes Flexirent’s XSec’s Customer PA lunches Anybody’s XSec Anybody’s PA All customer Purchasing Dept receptionists Secy Chaffee’s letter writer McKinsey report prep staff McKinsey research staff Admiral’s Aide Congressional Committee staff drafter Congressman’s appropriate LA Anybody in Finance

“ Mapping your competitive position” or …

1. Have you in the last 10 days … visited a custome r? 2. Have you called a customer … TODAY ?

1. Have you in the last 10 days … visited a custome r? 2. Have you called a customer … TODAY ? 3. Have you in the last 60-90 days … had a seminar in which several folks from the customer’s operation (different levels, different functions, different divisions) interacted, via facilitator, with various of your folks? 4. Have you thanked a front-line employee for a small act of helpfulness … in the last three days? 5. Have you thanked a front-line employee for a small act of helpfulness … in the last three hours ? 6. Have you thanked a frontline employee for carrying around a great attitude … today? 7. Have you in the last week recognized—publicly—one of your folks for a small act of cross-functional co-operation ? 8. Have you in the last week recognized—publicly—one of “their” folks (another function) for a small act of cross-functional co-operation? 9. Have you invited in the last month a leader of another function to your weekly team priorities meeting? 10. Have you personally in the last week-month called-visited an internal or external customer to sort out, inquire, or apologize for some little or big thing that went awry? (No reason for doing so? If true—in your mind—then you’re more out of touch than I dared imagine.)

11. Have you in the last two days had a chat with someone (a couple of levels down?) about specific deadlines concerning a project’s next steps? 12. Have you in the last two days had a chat with someone (a couple of levels down?) about specific deadlines concerning a project’s next steps … and what specifically you can do to remove a hurdle ? (“Ninety percent of what we call management consists of making it difficult for people to get things done.”—Peter “His eminence” Drucker.) 13. Have you celebrated in the last week a “small” (or large!) milestone reached? (I.e., are you a milestone fanatic?) 14. Have you in the last week or month revised some estimate in the “wrong” direction and apologized for making a lousy estimate? (Somehow you must publicly reward the telling of difficult truths .) 15. Have you installed in your tenure a very comprehensive customer satisfaction scheme for all internal customers? (With major consequences for hitting or missing the mark.) 16. Have you in the last six months had a week-long, visible, very intensive visit-“tour” of external customers? 17. Have you in the last 60 days called an abrupt halt to a meeting and “ordered” everyone to get out of the office, and “into the field” and in the next eight hours , after asking those involved, fixed (f-i-x-e-d!) a nagging “small” problem through practical action? 18. Have you in the last week had a rather thorough discussion of a “cool design thing” someone has come across—away from your industry or function—at a Web site, in a product or its packaging? 19. Have you in the last two weeks had an informal meeting—at least an hour long—with a frontline employee to discuss things we do right, things we do wrong, what it would take to meet your mid- to long-term aspirations? 20. Have you had in the last 60 days had a general meeting to discuss “things we do wrong” … that we can fix in the next fourteen days ?

21. Have you had in the last year a one-day, intense offsite with each (?) of your internal customers—followed by a big celebration of “things gone right”? 22. Have you in the last week pushed someone to do some family thing that you fear might be overwhelmed by deadline pressure? 23. Have you learned the names of the children of everyone who reports to you? (If not, you have six months to fix it.) 24. Have you taken in the last month an interesting- weird outsider to lunch? 25. Have you in the last month invited an interesting-weird outsider to sit in on an important meeting? 26. Have you in the last three days discussed something interesting, beyond your industry, that you ran across in a meeting, reading, etc? 27. Have you in the last 24 hours injected into a meeting “I ran across this interesting idea in [strange place]”? 28. Have you in the last two weeks asked someone to report on something, anything that constitutes an act of brilliant service rendered in a “trivial” situation—restaurant, car wash, etc? (And then discussed the relevance to your work.) 29. Have you in the last 30 days examined in detail (hour by hour) your calendar to evaluate the degree “time actually spent” mirrors your “espoused priorities”? (And repeated this exercise with everyone on team.) 30. Have you in the last two months had a presentation to the group by a “weird” outsider?

31. Have you in the last two months had a presentation to the group by a customer, internal customer, vendor featuring “working folks” 3 or 4 levels down in the vendor organization? 32. Have you in the last two months had a presentation to the group of a cool, beyond-our-industry ideas by two of your folks? 33. Have you at every meeting today (and forever more) re-directed the conversation to the practicalities of implementation concerning some issue before the group? 34. Have you at every meeting today (and forever more) had an end-of-meeting discussion on “action items to be dealt with in the next 4, 48 hours? (And then made this list public—and followed up in 48 hours.) And made sure everyone has at least one such item.) 35. Have you had a discussion in the last six months about what it would take to get recognition in local-national poll of “best places to work”? 36. Have you in the last month approved a cool-different training course for one of your folks? 37. Have you in the last month taught a front-line training course? 38. Have you in the last week discussed the idea of Excellence ? (What it means, how to get there.) 39. Have you in the last week discussed the idea of “Wow”? (What it means, how to inject it into an ongoing “routine” project.) 40. Have you in the last 45 days assessed some major process in terms of the details of the “experience,” as well as results, it provides to its external or internal customers?

41. Have you in the last month had one of your folks attend a meeting you were supposed to go to which gives them unusual exposure to senior folks? 42. Have you in the last 60 (30?) days sat with a trusted friend or “coach” to discuss your “management style”—and its long- and short-term impact on the group? 43. Have you in the last three days considered a professional relationship that was a little rocky and made a call to the person involved to discuss issues and smooth the waters? (Taking the “blame,” fully deserved or not, for letting the thing-issue fester.) 44. Have you in the last … two hours … stopped by someone’s (two-levels “down") office-workspace for 5 minutes to ask “What do you think?” about an issue that arose at a more or less just completed meeting? (And then stuck around for 10 or so minutes to listen—and visibly taken notes.) 45. Have you … in the last day … looked around you to assess whether the diversity pretty accurately maps the diversity of the market being served? (And …) 46. Have you in the last day at some meeting gone out of your way to make sure that a normally reticent person was engaged in a conversation—and then thanked him or her, perhaps privately, for their contribution? 47. Have you during your tenure instituted very public (visible) presentations of performance? 48. Have you in the last four months had a session specifically aimed at checking on the “corporate culture” and the degree we are true to it—with all presentations by relatively junior folks, including front-line folks? (And with a determined effort to keep the conversation restricted to “real world” “small” cases—not theory.) 49. Have you in the last six months talked about the Internal Brand Promise ? 50. Have you in the last year had a full-day off site to talk about individual (and group) aspirations?

“ Design is ever y thin g. Everything is desi g n .” “ We are all designers.” Inspiration: The Power of Design: A Force for Transforming Everything, Richard Farson

Big carts = 1.5X Source: Wal*Mart

Bag sizes = New markets: $B Source: PepsiCo

6.5 feet Away = - 63 % “Seconds”* *Plate size, etc, first serving dish

“ Broken windows”: Clean the streets, fix the broken windows, ticket the open-beer-can holders, etc, etc = Sense of order = Crime way down

“ Paint it white!” — On Hashem Akbari’s [Lawrence Livermore labs] powerful program to significantly reduce greenhouse gas emissions; using conservative assumptions, it could reduce 44 billion tons of CO2 emissions by cooling buildings, roads, entire cities ( The Guardian , 0116.09)

Don’t like it? Don’t pay. Source: Granite Rock Co.

“ Power Freaks” Move Things Around!

see green = recover 20% faster

“ Everything matters” -80% Source: Nudge, Richard Thaler and Cass Sunstein, etching of fly in the urinal reduces “spillage” by 80%, Schiphol Airport

(1) Amenable to rapid experimentation/ failure “free” (PR, $$) (2) Quick to implement/ Quick to Roll out (3) Inexpensive to implement/Roll out (4) Huge multiplier (5) An “Attitude”

[object Object],[object Object],[object Object],[object Object]

<TG W and … >TG R [Things Gone WRONG -Things Gone RIGHT ]

“ May I clean your glasses, sir?”

7X. 7:30A-8:00P. F12A. 7:30AM = 7:15AM. 8:00PM = 8:15PM.

Griffin : Music in the parking lot; professional musicians in the lobby (7/week, 3-4hrs/day) ; 5 pianos ; volunteers (120-140 hrs arts & entertainment per month). Source: Putting Patients First , Susan Frampton, Laura Gilpin, Patrick Charmel

It BEGINS (and ENDS ) in the …

“ Experiences are as distinct from services as services are from goods.” —Joe Pine & Jim Gilmore, The Experience Economy: Work Is Theatre & Every Business a Stage

C X O * *Chief e X perience Officer

First Step (?!) : Hire a theater director , as a consultant or FTE!

“ Most executives have no idea how to add value to a market in the metaphysical world. But that is what the market will cry out for in the future. There is no lack of ‘physical’ products to choose between.” Jesper Kunde, Unique Now ... or Never [on the excellence of Nokia, Nike, Lego, Virgin et al.]

3M’s Innovation Crisis: How Six Sigma Almost Smothered Its Idea Culture Source: Title/Cover Story, BW , 0611.07 ( “What’s remarkable is how fast a culture can be torn apart,” 3M lead scientist; “In an innovation economy, [6 Sigma] is no longer a cure all”/ BW )

“ What Rikyu demanded was not cleanliness alone, but the beautiful and the natural also.” —Kakuzo Okakura, The Book of Tea

“ Rikyu was watching his son Sho-an as he swept and watered the garden path. ‘Not clean enough,’ said Rikyu, when Sho-an had finished his task, and bade him try again. After a weary hour, the son turned to Rikyu: ‘Father, there is nothing more to be done. The steps have been washed for the third time, the stone planters and the trees are well sprinkled with water, moss and lichens are shining with a fresh verdure; not a twig, not a leaf have I left on the ground.’ ‘Young fool,’ chided the tea-master, ‘that is not the way a garden path should be swept.’ Saying this, Rikyu stepped into the garden, shook a tree and scattered over the garden gold and crimson leaves, scraps of the brocade of autumn! What Rikyu demanded was not cleanliness alone, but the beautiful and the natural also.” —Kakuzo Okakura, The Book of Tea

All E q ual Exce p t … “At Sony we assume that all products of our competitors have basically the same technology, price, performance and features. Desi g n is the onl y thin g that differentiates one p roduct from another in the market p lace .” —Norio Ohga

“ Design is treated like a religion at BMW.” —Fortune

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

“ 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 McDonald’s was to the Age of Convenience or Ford was to the Age of Mass Production—the 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 Aesthetic Value Is Remaking Commerce, Culture and Consciousness

Hypothesis: DESIGN is the p rincipal difference between love and hate!

Wanted : THE DESIGNER OF MY KRUPPS/ CUISINART COFFEE-MAKER. Major Reward!

“ Business people don’t need to ‘understand designers better.’ Businesspeople need to be designers.” —Roger Martin/Dean/Rotman Management School/ University of Toronto

C D O * *Chief Design Officer

Message (?????): Men cannot design for women’s needs.

Lisbon/New Biz: Weeks to … Minutes (!!!!)

“ One bank is currently claiming to … ‘ levera g e its g lobal foot p rint to p rovide effective financial solutions for its customers b y p rovidin g a g atewa y to diverse markets .’” — Charles Handy

“ I assume that it is just saying that it is there to ‘ hel p its customers wherever the y are’ .” — Charles Handy

90K in U.S.A. ICUs on any given day; 178 steps/day in ICU. 50% stays result in “serious complication” Source: Atul Gawande, “The Checklist” ( New Yorker , 1210.07)

** Peter Pronovost , Johns Hopkins, 2001 **Checklist, line infections **1/3 rd at least one error when he started **Nurses/permission to stop procedure if doc, other not following checklist **In 1 year, 10-day line-infection rate: 11% to … 0% Source: Atul Gawande, “The Checklist” ( New Yorker , 1210.07)

**Docs, nurses make own checklists on whatever process-procedure they choose **Within weeks , average stay in ICU down 50% Source: Atul Gawande, “The Checklist” (New Yorker, 1210.07)

Beauty. Grace. Clarity. Simplicity.

First Steps: “Beauty Contest”! ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

The Commerce Bank Model “every computer at commerce bank has a special red key on it that says, ‘found something stupid that we are doing that interferes with our ability to service the customer? Tell us about it, and if we agree, we will give you $50.’” Source: Fans! Not customers. How Commerce Bank Created a Super-growth Business in a No-growth Industry , Vernon Hill & Bob Andelman

C GRO * *CGRO/Chief Grunge Removal Officer (CDC/Chief of De-complexification) (CAO/Chief Anti-systems Officer) (CBSD/Chief BS Destruction Officer)

“ Not only does standardization reduce accountability, but it causes workers to switch to autopilot.” “An artistic process has to rely on external measures of success, like customer feedback.” Source: “When Should a Process Be Art, Not Science?” by Joseph Hall and Eric Johnson, HBR (03.09)

“ The most significant variable in every sales situation is the gender of the buyer, and more importantly, how the salesperson communicates to the buyer’s gender.” —Jeffery Tobias Halter, Selling to Men, Selling to Women

The Perfect Answer Jill and Jack buy slacks in black…

“ Since 1970 , women have held two out of every three new jobs created.” — FT , 10.03.2006

“ Women are the majority market” —Fara Warner/ The Power of the Purse

“ Goldman Sachs in Tokyo has developed an index of 115 companies poised to benefit from women’s increased purchasing power; over the past decade the value of shares in Goldman’s basket has risen by 96%, against the Tokyo stockmarket’s rise of 13% .” —Economist , April 15

Cases! Cases! Cases! McDonald’s (“mom-centered” to “majority consumer”; not via kids) Home Depot (“Do it [everything!] Herself”) P&G (more than “house cleaner”) DeBeers (“right-hand rings”/$4B) AXA Financial Kodak (women = “emotional centers of the household”) Nike (> jock endorsements; new def sports; majority consumer) Avon Bratz (young girls want “friends,” not a blond stereotype) Source: Fara Warner/ The Power of the Purse

“ We simply had stopped being relevant to women.” — Kay Napier, SVP Marketing (Fara Warner, The Power of the Purse , “From Minority to Majority: McDonald’s Discovers the Woman Inside the Mom”)

“ Women don’t buy brands. They join them .” EVEolution

“ People powered”: Age 3 days , baby girls 2X eye contact. Source: Martha Barletta, Marketing to Women

“ Women speak and hear a language of connection and intimacy , and men speak and hear a language of status and independence. Men communicate to obtain information , establish their status , and show independence . Women communicate to create relationships , encourage interaction , and exchange feelings .” —Judy Rosener, America’s Competitive Secret

!!!!!!!!!!!!!!!!! “ People turning 50 today have more than half of their adult life ahead of them.” —Bill Novelli, 50+: Igniting a Revolution to Reinvent America

2000-2010 Stats 18-44: -1% 55+: + 21 % (55-64: + 47 % )

44-65 : “New Customer Majority” * *45% larger than 18-43; 60% larger by 2010 Source: Ageless Marketing , David Wolfe & Robert Snyder

“ Baby-boomer Women : The Sweetest of Sweet Spots for Marketers” —David Wolfe and Robert Snyder, Ageless Marketing

“ Fifty-four years of age has been the highest cutoff point for any marketing initiative I’ve ever been involved in. Which is p rett y weird when y ou consider a g e 50 is ri g ht about when p eo p le who have worked all their lives start to have some mone y to s p end .” —Marti Barletta, PrimeTime Women

“ One particularly puzzling category of youth-obsession is the highly coveted target of men 18-34, and it’s always referred to as ‘highly coveted category.’ Marketers have been distracted by men age 18-34 because they are getting harder to reach. So what? Who wants to reach them? Beyond fast food and beer, they don’t buy much of anything. … The theory is that if you ‘get them while they’re young, they’re yours for life.’ What nonsense !” — Marti Barletta, PrimeTime Women

“ Marketers attempts at reaching those over 50 have been miserably unsuccessful. No market’s motivations and needs are so poorl y understood .” — Peter Francese, founding publisher, American Demographics

We are the Aussies & Kiwis & Americans & Canadians . We are the Western Europeans & Japanese . We are the fastest growing , the biggest , the wealthiest , the boldest , the most (yes) ambitiou s, the most experimental & exploratory , the most different , the most indulgent , the most difficult & demanding , the most service & experience obsessed , the most vigorous , (the least vigorous,) the most health conscious , the most female , the most profoundly important commercial market in the history of the world—and we will be the Center of y our universe for the next twent y -five y ears . We have arrived!

Up, Up, Up, Up the Value-added Ladder.

And the “M” Stands for … ? Gerstner’s IBM: “Systems Integrator of choice.”/BW (“Lou, help us turn ‘all this’ into that long-promised ‘revolution.’ ” ) IBM Global Services * (*Integrated Systems Services Corp.): $ 55B

Planetary Rainmaker-in-Chief! “Palmisano’s strategy is to expand tech’s borders by pushing users—and entire industries— toward radicall y different business models . The payoff for IBM would be access to an ocean of revenue—Palmisano estimates it at $500 billion a year —that technology companies have never been able to touch.” — Fortune

“ Big Brown’s New Bag: UPS Aims to Be the Traffic Manager for Cor p orate America ” —Headline/ BW /2004

I. LAN Installation Co. (3%) II. Geek Squad. (30%.) III. Acquired by BestBuy. IV. Flagship of BestBuy Wholesale “Solutions” Strategy Makeover.

“ ‘ Architecture’ is becoming a commodity. Winners will be ‘Turnkey Facilities Management’ providers.” SMPS Exec

E.g. … UTC/Otis + Carrier: boxes to “integrated building systems”

Hu g e : Customer Satisfaction versus Customer Success

“ ‘ Results’ are measured by the success of all those who have purchased your product or service” —Jan Gunnarsson & Olle Blohm, The Welcoming Leader

The Value-added Ladder/ STUFF ‘N’ THINGS Goods Raw Materials

The Value-added Ladder/Stuff & TRANSACTIONS Services Goods Raw Materials

The Value-added Ladder/ OPPORTUNITY-SEEKING Customer Success/ Gamechanging Solutions Services Goods Raw Materials

“ The business of selling is not just about matching viable solutions to the customers that require them. It’s equally about managing the change process the customer will need to go through to implement the solution and achieve the value promised by the solution . One of the key differentiators of our position in the market is our attention to managing change and making change stick in our customers’ organization.” * (*E.g.: CRM failure rate/Gartner: 70 %) —Jeff Thull, The Prime Solution: Close the Value Gap, Increase Margins, and Win the Complex Sale

The Value-added Ladder/ OPPORTUNITY-SEEKING Im p lemented Gamechanging Solutions Services Goods Raw Materials

try it. Try it. Try it. Try it. Try it. Try it. Try it. Try it. Screw it up. Try it. Try it. Try it. Try it. Try it. Try it. Try it. Screw it up. it. Try it. Try it. try it. Try it. Screw it up. Try it. Try it. Try it.

“ We made mistakes, of course. Most of them were omissions we didn’t 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, we’re 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 plan — for months .” —Bloomberg by Bloomberg

“ Experiment fearlessly” Source: BusinessWeek , Type A Organization Strategies/ “How to Hit a Moving Target”— Tactic #1

Culture of Prototyping “Effective prototyping may be the most valuable core competence an innovative organization can hope to have.” —Michael Schrage

Think about It!? Innovation = Reaction to the Prototype Source: Michael Schrage

“ SkunkWorks”/ “ParallelUniverse” “the 1% solution” Source: Scott Bedbury (Others: 3M, Google, Shell, NAVFAC )

Build a “School on top of a school”/Continuing-Exec Ed (The Parallel Universe Strategy)

Forward, march: The “Sri Lanka Stratagem”

“ Never doubt that a small group of committed people can change the world. Indeed it is the only thing that ever has.” —Margaret Mead

Where to look for “Playmates” : F.F.F.F. (Find a Fellow Freak Faraway)

Playmate!* Playpen! Prototype! *Can be Client, supplier … as well as Insider

“ Fail . Forward. Fast.” High Tech CEO, Pennsylvania

“ The secret of fast progress is inefficienc y , fast and furious and numerous failures.” —Kevin Kelly

Read This! Richard Farson & Ralph Keyes: Whoever Makes the Most Mistakes Wins: The Paradox of Innovation

“ It is not enough to ‘tolerate’ failure—you must ‘celebrate’ failure.” —Richard Farson ( Whoever Makes the Most Mistakes Wins )

We learn from our failures. Period .* Failure to acknowledge failure is a fatal disease. Treating failure like a disease is a fatal disease. *Doctors, soldiers, pilots, musicians, etc.

“ In business, you reward people for taking risks . When it doesn’t work out you p romote them-because they were willing to try new things. If people tell me they skied all day and never fell down, I tell them to try a different mountain.” —Michael Bloomberg ( BW /0625.07)

“ Reward excellent failures. Punish mediocre successes.” Phil Daniels, Sydney exec

“ You miss 100 % of the shots you never take.” —Wayne Gretzky

“ Some people look for things that went wrong and try to fix them. I look for things that went right , and try to build off them.” —Bob Stone (Mr ReGo)

“ Somewhere in your organization, groups of people are alread y doin g thin g s differentl y and better. To create lasting change, find these areas of positive deviance and fan the flames .” —Richard Pascale & Jerry Sternin, “Your Company’s Secret Change Agents,” HBR

“ A key – perhaps the key – to leadership is the effective communication of a stor y.” —Howard Gardner, Leading Minds: An Anatomy of Leadership

“ Storytelling is the core of culture.” — Branded Nation: The Marketing of Megachurch, College Inc., and Museumworld , James Twitchell

“ You will become like the five people you associate with the most—this can be either a blessing or a curse.” —Billy Cox

Measure “Strangeness”/Portfolio Quality Staff Consultants Vendors Out-sourcing Partners (#, Quality) Innovation Alliance Partners Customers Competitors (who we “benchmark” against) Strategic Initiatives Product Portfolio (LineEx v. Leap) IS/IT Projects HQ Location Lunch Mates Language Board

“ [CEO A.G.] Lafley has shifted P&G’s focus on inventing all its own products to developing others’ inventions at least half the time . One successful example, Mr. Clean Magic Eraser, based on a product found in an Osaka market.” — Fortune

The “We are what we eat” axiom: At its core, ever y (!!!) relationship-partnership decision (employee, vendor, customer, etc) is a strate g ic decision about: “Innovate, ‘Yes’ or ‘No’ ”

The “We are what we eat” Axiom II: “Hang out with ‘cool’ and thou shalT become more cool. Hang out with ‘dull’ and thou shalT become more dull. Period.”

“ Don’t benchmark, futuremark!” Impetus: “The future is already here; it’s just not evenly distributed” —William Gibson

“ Who’s the most interesting person you’ve met in the last 90 days? How do I get in touch with them?” —Fred Smith

“ Freak Fridays” —once a month invite somebody interesting, in any field, to have lunch with your gang

“ Normal” = “o for 800”

“ The Bottleneck Is at the Top of the Bottle” “Where 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 to p!” — Gary Hamel/ Harvard Business Review

“ Diverse groups of problem solvers—groups of people with diverse tools—consistently 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 Diversity

Can you pass the … “Squint test”?

Vanity Fair: “What is your most marked characteristic?” Mike Bloomberg: “ Curiosity.”

“ Do one thing every day that scares you.” —Eleanor Roosevelt

Kevin Roberts’ Credo 1 . Ready. Fire! Aim. 2. If it ain’t 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 !

“ The Billion-man Research Team: Companies offering work to online communities are reaping the benefits of ‘crowdsourcing.’” —Headline, FT , 0110.07

Rob McEwen/ CEO/ Goldcorp Inc./ Red Lake gold Source: Wikinomics: How Mass Collaboration Changes Everything , Don Tapscott & Anthony Williams

All You Need to Know About “Sources of Innovation”: Angry people! [angry with the status quo]

F(Anger/Passion) >>>> f(Pushback from Threatened Fat-cats & Bureau-crats)

Iron Innovation Equality Law: The quality and quantity and imaginativeness of innovation shall be the same in all functions —e.g., in HR and purchasing as much as in marketing or product development.

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Innovation’s “Fourteen Imperatives” (8) “Strategic” Listening = Core competence. (9) Hire and promote 100% innovators. Innovator’s characteristic = Innovator. Innovator’s characteristic = Angry. (Anger > Blowback.) CEO=Innovation “bias.” (10) XFX/Cross-functional Excellence!! (#1??) (11) Chief Complexity & Systems Destruction Officer. (12) R&D Equality. All functions equal. (VA centerpiece./ All staff VA-meisters.) (13) Fun! Self-deprecating! (14) Good luck! (Entropy rules.) (Major acquisition = Dumb.) (NB: All these things work except when they don’t.)

Innovation Index : How many of your Top 5 Strategic Initiatives/Key Projects score 8 or higher [out of 10] on a “Weird” / “Profound” / “Wow” / “Game- changer” Scale?

The True Logic* of Decentralization: 6 divisions = 6 “tries” 6 divisions = 6 DIFFERENT leaders = 6 INDEPENDENT “tries” = Max probability of “win” 6 divisions = 6 very DIFFERENT leaders = 6 very INDEPENDENT “tries” = Max probability of “ far out ”/” 3-sigma ” “win” *“Driver”: Law of Large #s

“ Best practice” = ZERO Standard Deviation

“ Parallel Universe” … China!!!!!!!

“‘ Decentralization’ is not a piece of paper. It’s not me. It’s either in your heart , or not.” — Brian Joffe/BIDvest

“ If if feels painful and scary—that’s real delegation” —Caspian Woods, small biz owner

“ Centralization” vs. “Decentralization” = Everything

Institute of Public Administration, last question … Centralization vs Decentralization = EVERYTHING (Business, government, child-rearing) Jefferson vs Hamilton (D.C. vs “states rights”) Nelson, Grant: simple-clear-brief orders, then lots of leeway Ike (and CEO Koppers): plan like hell and burn the plan (literally) Ceaselessly talk through the values, then enormous space within Bossidy: 2-page strategy (pre-Welch, strategy doc was budget doc) Katrina: USCG (“history of trusting their captains”) vs US Navy Rommel on Americans in North Africa No autonomy, no resilience (Yunus: “We’re all entrepreneurs”) CIO; across the hall anti-CIO (Mr Build, Mr Destroy) Drucker: “Ninety percent …” ICD/Inherent Centralist Drift Gary Hamel and “sell by” “Anthropological analysis,” McKinsey Degree of staff diversification is also Cent. vs De-cent issue (homogeneity grows over time) Jim Burke: “No.” (Watson: “never do a System 360 today”) Norberto Odebrecht and 2 nd Law Thermodynamics (Foster’s data) Sloan: Dynamic approach, never get it right TP: dynamic approach, never get it right, lean “big time” toward decentralization, open warfare on “necessary” systems

Enemy #1 I.C.D. Note 1: Inherent/Inevitable/ Immutable Centralist Drift Note 2: Jim Burke’s 1-word vocabulary: “No.”

“ Ninety percent of what we call ‘management’ consists of making it difficult for people to get things done .” – Peter Drucker

Can’t Live Without ‘em, Can’t live With ‘em Office A, Executive Row: C.I.O. Office B (Across the hall): C.S.D.O./ Chief Systems Destruction Officer (007 License) * *Chief of Anti-matter; Deputy Chief, Grunge Removal Section; Chief, Crap Accretion Police; Chief, Office of Bullshit Detection; K.I.S.S. Kops

“ Costco figured out the big , simple things and executed with total fanaticism .” —Charles Munger, Berkshire Hathaway

“ Execution is the job of the business leader .” —Larry Bossidy & Ram Charan/ Execution: The Discipline of Getting Things Done

“ Execution is a systematic process of rigorously discussing hows and whats, tenaciously following through, and ensuring accountability.” —Larry Bossidy & Ram Charan/ Execution: The Disci p line of Getting Things Done

(1) sum of Projects = Goal (“Vision”) (2) sum of Milestones = project (3) rapid Review + Truth-telling = accountability

“ almost inhuman disinterestedness in … strategy” —Josiah Bunting on U.S. Grant (from Ulysses S. Grant )

U. S. Grant *No interest in grand strategy. *Do the thing until it is done. *Do not over complicate. *Do the next thing. *Pleasure in perseverance per se. *Not ask for help or advice. *Not complain of difficulties or ask for more time or resources McClellan: delay; plead for more forces Grant: “When do I start? What I want is to advance.” Source: Josiah Bunting, Ulysses S. Grant

Excellence in Execution = Deepest “Blue Ocean”

Mission impossible? $36B/’98 minus $675M/‘07

“ Mr Zetsche, head of Chrysler from 2000 to 2005, denied he should take any responsibility for the U.S. carmaker’s troubles …” — Financial Times /05.29.07

CF: 30% (no salesfolk) MH: 80% (salesfolk)

“ GE has set a standard of candor. … There is no puffery. … There isn’t an ounce of denial in the place .” —Kevin Sharer, CEO Amgen, on the “GE mystique” (Fortune)

DECENTRALIZATION. EXECUTION. ACCOUTABILITY. 6 :15A.M.

“ 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 …

“ 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

“ Mr. Foster and his McKinsey colleagues collected detailed performance data stretching back 40 years for 1,000 U.S. companies. The y found that none of the lon g -term survivors mana g ed to out p erform the market. Worse, the lon g er com p anies had been in the database, the worse the y did .” —Financial Times

“ Data drawn from the real world attest to a fact that is beyond our control: Ever y thin g in existence tends to deteriorate .” —Norberto Odebrecht, Education Through Work

No: People. No: Product. No: Value to customer. Yes: Dilution, other control and share- owning issues. Yes: Scale-as-power. Yes: Market share.

Yes: People. Yes: Product. Yes: Value to customer. No: Dilution, other control and share- owning issues. No: Scale-as-power. No: Market share.

“ It suddenly occurred to me that in the space of two or three hours …

“ It suddenly occurred to me that in the space of two or three hours … he never talked about cars.” — Les Wexner

Did one of ’em ever turn to the other and sa y: “Wow, I wonder what unimaginable new tools, otherwise not p ossible , will be brought forth for m y dau g hter Alice, a g e 17 , because of this deal?”

#4 Japan #3 USA #2 China #1 Germany

Productivity (Small/All) > Productivity (Big) (USA-9%/F500) (China/1 st 20 yrs.)

Jim’s Mowing Canada Jim’s Mowing UK Jim’s Antennas Jim’s Bookkeeping Jim’s Building Maintenance Jim’s Carpet Cleaning Jim’s Car Cleaning Jim’s Computer Services Jim’s Dog Wash Jim’s Driving School Jim’s Fencing Jim’s Floors Jim’s Painting Jim’s Paving Jim’s Pergolas [gazebos] Jim’s Pool Care Jim’s Pressure Cleaning Jim’s Roofing Jim’s Security Doors Jim’s Trees Jim’s Window Cleaning Jim’s Windscreens Note: Download, free, Jim Penman’s book: What Will They Franchise Next? The Story of Jim’s Group

Jim’s Group : Jim Penman.* 1984: Jim’s Mowing. 2006: Jim’s Group. 2,600 franchisees (Australia, NZ, UK). Cleaning. Dog washing. Handyman. Fencing. Paving. Pool care. Etc. “People first.” Private. Small staff. Franchisees can leave at will. 0-1 complaint per year is norm; cut bad ones quickly. *Ph.D. cross-cultural anthropology; mowing on the side Source: MT/Management Today (Australia), Jan-Feb 2006

*Basement Systems Inc. *Larry Janesky * Dry Basement Science (115,000!) *1990: $0; 2003: $13M; 2007: $62,000,000

The Red Carpet Store Joel Resnick/Flemington NJ (referenced in Fame Junkies )

etc. PRSX/ Paragon Railcar Salvage* *Salvaged railcars into bridges, etc.

* Lived in same town all adult life * First generation that’s wealthy/ no parental support * “Don’t look like millionaires, don’t dress like millionaires, don’t eat like millionaires, don’t act like millionaires ” *“Many of the types of businesses [they] are in could be classified as ‘dull-normal.’ [They] are welding contractors, auctioneers, scrap-metal dealers, lessors of portable toilets, dry cleaners, re-builders of diesel engines, paving contractors …” Source: The Millionaire Next Door , Thomas Stanley & William Danko

Muhammad Yunus: “ All human beings are entrepreneurs . When we were in the caves we were all self-employed . . . finding our food, feeding ourselves. That’s where human history began . . . As civilization came we suppressed it. We became labor because they stamped us, ‘You are labor.’ We forgot that we are entrepreneurs.” Source: Muhammad Yunus/The News Hour—PBS/1122.2006

94 % of loans to … women * * M icrolending; “Banker to the poor”; Grameen Bank; Muhammad Yunus; 2006 Nobel Peace Prize winner

“ CEMEX realized that women are the ke y drivers of savin g s in [Mexican] families . … They are entrepreneurial in nature, and they actively participate in the tanda system [neighborhood groups who pool money and save any that’s left over]. Regardless of whether they are homemakers or outside-the-home workers, they are responsible for any savings in the family. Patrimonio Hoy [Private Property Today, a CEMEX program to aid the poor in building homes] discovered that 70% of the women who saved were saving money in the tanda system to construct homes for their families. The men in the society consider their job done if they bring in their paycheck at the end of the day.” —C.K. Prahalad, from The Fortune at the Bottom of the Pyramid , on Lorenzo Zambrano and CEMEX, the Mexican company that’s the world’s #3 cement maker

“ gurugate”: The Gurus’ fixation with “the wrong stuff”* *Not “they,” but “us.”

Over-rated: Bi g companies! Public companies! “ Cool ” industries! Stabilit y (“Built to last”) ! Famous CEOs!

The “Fabulous Five”: * SMEs! * Private companies! * “Dull” industries! * Productive churn: Built to Rock the World! * Laudable CEOs!

You = Your calendar * *Calendars never lie

“ I used to have a rule for myself that at any point in time I wanted to have in mind — as it so happens, also in writing, on a little card I carried around with me — the three big things I was trying to get done. Three . Not two. Not four. Not five. Not ten. Three.” — Richard Haass, The Power to Persuade

“ Dennis, you need a … ‘To-don’t ’ List !”

John Sawhill/Major Strategic Initiative: “What areas should the Conservancy focus on and more important— what activities should we sto p doin g?” Source: Bill Birchard, Nature’s Keepers: The Remarkable Story of How The Nature Conservancy Became the Largest Environmental Organization in the World

Don’t > Do* * “Don’ting,” systematic, > WILLPOWER

“ To change minds effectively, leaders make particular use of two tools: the stories that they tell and the lives that they lead.” —Howard Gardner, Changing Minds

“ The First step in a ‘dramatic’ ‘organizational change program’ is obvious— dramatic personal change !” —RG

“ How can a high-level leader like _____ be so out of touch with the truth about himself? It’s more common than you would imagine. In fact, the higher up the ladder a leader climbs, the less accurate his self-assessment is likely to be. The p roblem is an acute lack of feedback [especially on people issues].” —Daniel Goleman (et al.), The New Leaders

“ Work on me first.” —Kerry Patterson, Joseph Grenny, Ron McMillan and Al Switzler/ Crucial Conversations

“ Being aware of yourself and how you affect everyone around you is what distinguishes a superior leader.” —Edie Seashore ( Strategy + Business #45)

“ To develop others, start with yourself.” —Marshall Goldsmith

Leadership(21A.D.) = Leadership(21B.C.)

“ eighty percent of success is showing up.” — Woody Allen

“ In the same bitter winter of 1776 that Gen. George Washington led his beleaguered troops across the Delaware River to safety, Benjamin Franklin sailed across the Atlantic to Paris to engage in an equally crucial campaign, this one diplomatic. A lot depended on the bespectacled and decidedly unfashionable 70-year-old as he entered the world’s fashion capitol sporting a simple brown suit and a fur cap. … Franklin’s miracle was that armed only with his cann y personal charm and reputation as a scientist and philosopher, he was able to cajole a wary French government into lending the fledgling American nation an enormous fortune. … The enduring image of Franklin in Paris tends to be that of a flirtatious old man, too busy visiting the city’s fashionable salons to pursue affairs of state as rigorously as John Adams. When Adams joined Franklin in Paris in 1779, he was scandalized by the late hours and French lifestyle his colleague had adopted, says [Stacy Schiff, in A Great Improvisation] Adams was clueless that it was through the dropped hints and seemingly offhand remarks at these salons that so much of French diplomacy was conducted. … Like the Beatles arriving in America, Franklin aroused a fervor—his face appeared on prints, teacups and chamber pots. The extraordinary popularity served Franklin’s diplomatic purposes splendidly. Not even King Louis XVI could ignore the enthuisiasm that had won over both the nobility and the bourgeoisie. …” Source: “In Paris, Taking the Salons By Srorm: How the Canny Ben Franklin Talked the French into Forming a Crucial Alliance,” U.S. News & World Report , 0707.08

“ The capacity to develop close and enduring relationships is the mark of a leader. Unfortunately, many leaders of major companies believe their job is to create the strategy, organization structure and organizational processes—then they just delegate the work to be done, remaining aloof from the people doing the work.” —Bill George, Authentic Leadership

“ To me business isn’t about wearing suits or pleasing stockholders. It’s about being true to yourself, your ideas and focusing on the essentials .” —Richard Branson

Appendix The “XF-50”: 50 Ways to Enhance Cross-Functional Effectiveness and Deliver Speed, “Service Excellence” and “Value-added Customer ‘Solutions’”

1. It’s our organization to make work—or not. It’s not “them,” the outside world that’s the problem. The enemy is us. Period. 2. Friction-free! Dump 90% of “middle managers”—most are advertent or inadvertent “power freaks.” We are all—every one of us—in the Friction Removal Business, one moment at a time, now and forevermore. 3. No “stovepipes”! “Stove-piping,” “Silo-ing” is an Automatic Firing Offense . Period. No appeals. (Within the limits of civility, somewhat “public” firings are not out of the question—that is, make one and all aware why the axe fell.) 4. Everything on the Web. This helps. A lot. (“Everything” = Big word.) 5. Open access. All available to all. Transparency, beyond a level that’s “sensible,” is a de facto imperative in a Burn-the-Silos strategy. 6. Project managers rule!! Project managers running XF (cross-functional) projects are the Elite of the organization, and seen as such and treated as such. (The likes of construction companies have practiced this more or less forever.) 7. “Value-added Proposition” = Application of integrated resources. (From the entire supply-chain.) To deliver on our emergent business raison d’etre, and compete with the likes of our Chinese and Indian brethren, we must co-operate with anybody and everybody “24/7.” IBM, UPS and many, many others are selling far more than a product or service that works—the new “it” is pure and simple a product of XF co-operation; “the product is the co-operation” is not much of a stretch.

8. “XF work” is the direct work of leaders! 9. “Integrated solutions” = Our “Culture.” (Therefore: XF = Our culture.) 10. Partner with “best-in-class” only. Their pursuit of Excellence helps us get beyond petty bickering. An all-star team has little time for anything other than delivering on the (big) Client promise. 11. All functions are created equal! All functions contribute equally! All = All. 12. All functions are “PSFs,” Professional Service Firms. “Professionalism” is the watchword—and true Professionalism rise above turf wars. You are your projects, your legacy is your projects—and the legacy will be skimpy indeed unless you pass, with flying colors, the “works well with others” exam! 13. We are all in sales! We all (a-l-l) “sell” those Integrated Client Solutions. Good salespeople don’t blame others for screwups—the Clint doesn’t care. Good salespeople are “quarterbacks” who make the system work-deliver. 14. We all invest in “wiring” the Client organization—we develop comprehensive relationships in every part (function, level) of the Client’s organization. We pay special attention to the so-called “lower levels,” short on glamour, long on the ability to make things happen at the “coalface.” 15. We all “live the Brand”—which is Delivery of Matchless Integrated Solutions which transform the Client’s organization. To “live the brand” is to become a raving fan of XF co-operation.

16. We use the word “partner” until we want to barf! (Words matter! A lot!) 17. We use the word “team” until we want to barf. (Words matter! A lot!) 18. We use the word “us” until we want to barf. (Words matter! A lot!) 19. We obsessively seek Inclusion—and abhor exclusion. We want more people from more places (internal, external—the whole “supply chain”) aboard in order to maximize systemic benefits. 20. Buttons & Badges matter—we work relentlessly at team (XF team) identity and solidarity. (“Corny”? Get over it.) 21. All (almost all) rewards are team rewards. 22. We keep base pay rather low—and give whopping bonuses for excellent team delivery of “seriously cool” cross-functional Client benefits. 23. WE NEVER BLAME OTHER PARTS OF THE ORGANIZATION FOR SCREWUPS . 24. WE TAKE THE HEAT—THE WHOLE TEAM. (For anything and everything.) (Losing, like winning, is a team affair.) 25. “BLAMING” IS AN AUTOMATIC FIRING OFFENSE. 26. “Women rule.” Women are simply better at the XF communications stuff—less power obsessed, less hierarchically inclined, more group-team oriented.

27. Every member of our team is an honored contributor. “XF project Excellence” is an “all hands” affair. 28. We are our XF Teams! XF project teams are how we get things done. 29. “Wow Projects” rule, large or small—Wow projects demand by definition XF Excellence. 30. We routinely attempt to unearth and then reward “small gestures” of XF co-operation. 31. We invite Functional Bigwigs to our XF project team reviews. 32. We insist on Client team participation—from all functions of the Client organization. 33. An “Open talent market” helps make the projects “silo-free.” People want in on the project because of the opportunity to do something memorable—no one will tolerate delays based on traditional functional squabbling. 34. Flat! Flat = Flattened Silos. Flat = Excellence based on XF project outcomes, not power-hoarding within functional boundaries. 35. New “C-level”? We more or less need a “C-level” job titled Chief Bullshit Removal Officer. That is, some kind of formal watchdog whose role in life is to make cross-functionality work, and I.D. those who don’t get with the program. 36. Huge (H-U-G-E) co-operation bonuses. Senior team members who conspicuously shine in the “working together” bit are rewarded Big Time. (A million bucks in one case I know—and a non-cooperating very senior was sacked.)

37. Get physical!! “Co-location” is the most powerful “culture changer. Physical X-functional proximity is almost a guarantee (yup!) of remarkably improved co-operation—to aid this one needs flexible workspaces that can be mobilized for a team in a flash. 38. Ad hoc. To improve the new “X-functional Culture,” little XF teams should be formed on the spot to deal with an urgent issue—they may live for but ten days, but it helps the XF habit, making it normal to be “working the XF way.” 39. “Deep dip.” Dive three levels down in the organization to fill a senior role with some one who has been pro-active on the XF dimension. 40. Formal evaluations. Everyone, starting with the receptionist, should have an important XF rating component in their evaluation. 41. Demand XF experience for, especially, senior jobs. The military requires all would-be generals and admirals to have served a full tour in a job whose only goals were cross-functional. Great idea! 42. Early project “management” experience. Within days, literally, of coming aboard folks should be “running” some bit of a project, working with folks from other functions—hence, “all this” becomes as natural as breathing. 43. “Get ‘em out with the customer.” Rarely does the accountant or bench scientist call one the customer. Reverse that. Give everyone more or less regular “customer-facing experiences.” One learns quickly that the customer is not interested in our in-house turf battles!

44. Put “it” on the–every agenda. XF “issues to be resolved” should be on every agenda—morning project team review, weekly exec team meeting, etc. A “next step” within 24 hours (4?) ought to be part of the resolution. 45. XF “honest broker” or ombudsman. The ombudsman examines XF “friction events” and acts as Conflict Resolution Counselor. (Perhaps a formal conflict resolution agreement?) 46. Lock it in! XF co-operation, central to any value-added mission, should be an explicit part of the “Vision Statement.” 47. Promotions. Every promotion, no exceptions, should put XF Excellence in the top 5 (3?) evaluation criteria. 48. Pick partners based on their “co-operation proclivity.” Everyone must be on board if “this thing” is going to work; hence every vendor, among others, should be formally evaluated on their commitment to XF transparency—e.g., can we access anyone at any level in any function of their organization without bureaucratic barriers? 49. Fire vendors who don’t “get it”—more than “get it,” welcome “it” with open arms.” 50. Jaw. Jaw. Jaw. Talk XF cooperation-value-added at every opportunity. Become a relentless bore! 51. Excellence! There is a state of XF Excellence per se. Talk about it. Pursue it. Aspire to nothing less.

appendix the Heart of Business Strategy: 48 Things That Matter

We usually think of business strategy as some sort of aspirational market positioning statement. Doubtless that’s part of it. But I believe that the number one “strategic strength” is excellence in execution and systemic relationships (i.e., with everyone we come in contact with). Hence I offer the following 48 pieces of advice in creating a winning “strategy” that is inherently sustainable.

“ Thank you.” Minimum several times a day. Measure it. “ Thank you” to everyone even peripherally involved in some activity—especially those “ deep in the hierarchy.” Smile. Work on it. Apologize. Even if “they” are “mostly” to blame. Jump all over those who play the “blame game.” Hire enthusiasm. Low enthusiasm. No hire. Any job. Hire optimists. Everywhere. (“Positive outlook on life,” not mindless optimism.) Hiring: Would you like to go to lunch with him-her. 100% of jobs.

Hire for good manners. Do not reject “trouble makers”—that is those who are uncomfortable with the status quo. Expose all would-be hires to something unexpected-weird. Observe their reaction. Overwhelm response to even the smallest screwups. Become a student of all you will meet with. Big time. Hang out with interesting new people. Measure it. Lunch with folks in other functions. Measure it. Listen. Hear. Become a serious student of listening-hearing. Work on everyone’s listening skills. Practice.

Become a student of information extraction- interviewing. Become a student of presentation giving. Formal. Short and spontaneous. Incredible care in 1st line supervisor selection. World’s best training for 1st line supervisors. Construct small leadership opportunities for junior people within days of starting on the job. Insane care in all promotion decisions. Promote “people people” for all managerial jobs. Finance-logistics-R&D as much as, say, sales. Hire-promote for demonstrated curiosity. Check their past commitment to continuous learning.

Small “d” diversity. Rich mixes for any and all teams. Hire women. Roughly 50% women on exec team. Exec team “looks like” customer population, actual and d

Tom Peters & Strategy

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