Everything You Need to Know About Strategy:
A BakerÕs Dozen Eternal Verities
Tom PetersRe-imagine!
Technicolor Times demand ...
Technicolor Leaders and Boards who recruit ...
Technicolor People who are sent on ...
Technicolor Quests to execute ...
Technicolor Projects in partnership with ...
Technicolor Customers and ...
Technicolor Suppliers all of whom are in pursuit of ...
Technicolor Goals and Aspirations fit for ...
Technicolor Times.Everything You Need to Know About Strategy:
A BakerÕs Dozen Eternal Verities
Tom Peters
ÒStrategyÓ is essentially about ÒknowinÕ ÒGet the strategy right [big word,ÒrightÓ!],
whereyouÕre goin.ÕÓ Not, mostly, a bad and the rest, as in all good things, will
idea; though with todayÕs market gyra- more or less automatically follow.Ó In fact
tionsÑand market gyration velocityÑ I think such a viewÑadmittedly not as
thatÕs increasingly difficult to do, a prevalent today as it used to be, in the
chimera, a distraction even. For me, wake of everything from huge bankrupt-
ÒknowinÕ whoyouÕre goinÕ withÓ tops the cies to 9/11Ñis total crap.
list of imperatives in a world of whitewa-
ter, and knowinÕ that those youÕre goinÕ So what doyou need to know about
with share your passionand determina- ÒstrategyÓ? That was the question I was
tionÑand the flexibilityof mind to adjust asked recently by a rather contentious,
and adjust and adjust on a dime. All of die-hard academic strategy buff. (These
which is to say IÕm not, and never have ideas tend to die hardest in academic
been, a champion of the management settingsÑwhere the stakes are so low.)
school of thought that says, or implies, My answer, in brief, follows:*
*See ÒRecapÓon the next page for a list of all 13 assertions.
ItÕs the people, stupid! ItÕs the people on the
1.Do you have awesome Talent ... roster of your favorite baseball team or ballet
everywhere? (ÒWe are the Yankees of
companyÑor in the 6-person finance department or
home improvement here in Omaha.Ó) Do 300,000-person home improvement giant. Bob Taylor,
you push that Talent to pursue Audacious who created XeroxÕs startlingly innovative ÒPARCÓ(Palo
Quests? Alto Research Center), was described by a colleague as
aÒconnoisseur of talent.Ó(Nice!) Limited founder Les
ÒThe first thing is to hire enough talent that a critical
Wexner said he became a true institution builder
mass of excitement starts to grow.ÓÑTina Brown when he began to take as much pleasure picking
3
Everything You Need to Know About Strategy:A BakerÕs Dozen Eternal Verities Tom PetersRecap: All You Need to Know About Strategy
1. Do you have awesome Talent ... everywhere? (ÒWe are the Yankees of home improvement here in
Omaha.Ó) Do you push that Talent to pursue Audacious Quests?
2. Is your Talent Pool loaded with wonderfully peculiar people whom others would call ÒproblemsÓ?
And what about your Extended Community of customers, vendors, et al.?
3. Is your Board of Directors as cool as your product offerings ... and does it have 50 percent (or at
least one-third) Women Members?
4. Long-term, itÕs a ÒTop-line WorldÓ: Is creating a ÒcultureÓthat cherishes above all things Innovation
and Entrepreneurship your primary aim? Remember: Innovation ... not Imitation!
5. Are the Ultimate Rewards heaped upon those who exhibit an unswerving ÒBias for Action,Ó to
quote the co-authors of In Search of Excellence? Are your OODA loops shorter than the next guyÕs?
6. Do you routinely use hot, aspirational words-terms like ÒExcellenceÓand BHAG (Big Hairy
Audacious Goal, per Jim Collins) and ÒLetÕs make a dent in the UniverseÓ (the Word according to
Steve Jobs)? IsÒReward excellent failures, punish mediocre successesÓ your de facto or de jure
motto?
7. Do you subscribe to Jerry GarciaÕs dictum:ÒWe do not merely want to be the best of the best,we
want to be the only ones who do what we doÓ?
8. Do you elaborate on and enhance Jerry GÕs dictum by adding,ÒWe subscribe to ÔBest SourcingÕÑ
and only want to associate with the Ôbest of the bestÕ.Ó
9. Do you embrace the new technologies with child-like enthusiasm and a revolutionaryÕs zeal?
10. Do you ÒserveÓand ÒsatisfyÓcustomers ... or Ògo berserkÓ attempting to provide every customer with
an Òawesome experienceÓthat does nothing less than transform the way she or he sees the world?
11. Do you understand ... to your very marrow ... that the two biggest under-served markets are
Women and Boomers-Geezers? And that toÒtake advantageÓof these two Monster ÒTrendsÓ(FACTS
OF LIFE) requires fundamental realignment of the enterprise?
12. Are your leaders accessible? Do they wear their passion on their sleeves? Does integrity ooze out
of every pore of the enterprise? Is ÒWe careÓ your implicit motto?
13. Do you understand business mantra #1 of the Õ00s: DONÕT TRY TO COMPETE WITH WAL*MART ON
PRICE OR CHINA ON COST? (And if you get this last idea, then see the 12 above!)
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Everything You Need to Know About Strategy:A BakerÕs Dozen Eternal Verities Tom Peterspeople as he'd previously had picking trendy clothing. people do people. ItÕs surely true for a General
ÒPeople people do peopleÓÑto coin a not particularly Manager in the National Football League. And it
sparkling phrase. Incidentally, this is a trait, IÕve should be equally true for boss of a 4-person training
observed, that starts (or fails to start!) earlyÑwith the department. Mantra: People people do people...
class president in 10th grade who picks a Great 25/8/53.
Cabinet of intriguing talents,not just a collection of
sycophants.
The question then quickly becomes: What do we do 2.Is your Talent Pool loaded with
with this Great Talent weÕve recruited? And my wonderfully peculiar people whom others
answer is now clear: Send them out on Inspiring Quests! would call ÒproblemsÓ? And what about
I love the word ... Quest. It conjures everyone from your Extended Community of customers,
Columbus to Copernicus to King to Thatcher to Mary vendors, et al.?
Kay Ash. (But not 90 percent of the worldÕs cubicle
slavesÑalas.) The successful boss is no shrinking violet Okay, I acknowledge this is just another way of saying,
when it comes to audacious moves, but nonetheless ItÕs the people,stupid!So ... whatÕs wrong with
she or he aims to have this Great Collection of Talent repeating myself when it comes to this ÒAll-time Top
surpriseand delight(stun, amaze, etc*) (*cool words are #1Ótune? I do want to add a twist.WeÕre seeking
... cool) him or her by heading off to explore territories adventurers, right? (See my riff above on creating
(ÒHere Be DragonsÓ) that neither could have imagined; Quests.)Adventurers tend to be a bit (or more) quirky.
if the boss is not routinely surprised as to where his They travel paths of their own making.Their
Talent has taken him, then said boss is an unworthy commitment shows on their sleeves ... sometimes to
talent selector-user. the annoyance of Òcompany men.ÓI say: ItÕs a weird
time! Bring on the Misfits!
In their extraordinary book, Organizing Genius,Warren
Bennis and Patricia Ward Biederman make these two Picked up your kidÕs history book lately? A Misfits
statements: Almanac ... right? Alexander the Great. Napoleon.
Drake. Nelson.Joan dÕArc. De Gaulle. Churchill.
ÒGroups become great only when everyone in them, Jefferson.Hamilton. Copernicus. Gates. (You get the
leaders and members alike, is free to do his or her drift.) Troublemakers one and all! What we take for
absolute best.Ó granted between the covers of a 9th-grade history
text we need to import to our little-big corner of the
ÒThe best thing a leader can do for a Great Group is enterprise: Welcome history makers! I.e.: Welcome
allow its members to discover their own greatness.Ó freaks! May you become the Susan B. Anthony of
Logistics at good ole XYZ Corp!
Either statement leaves me breathless.What
monumental aspirations:Free ...do ...Absolute Best. For years, decades actually, the Oakland Raiders
Discover ...Greatness.DoesnÕt this ... perfectly ... encap- topped the league in mercilessly competitive
sulate the problem with 99 out of 100 organizations? professional football. Iconoclast (iconoclast = good
People are hardly ÒfreeÓ to Òdo absolute bestÓand word) owner Al Davis picked up misfitsÕ contracts for a
Òdiscover greatness.Ó My view:This should be every songÑand gave them a new lease on life in Raider
bossÕs mantra, every employeeÕs aimÑor else we are Silver and Black. I love the notion of ÒThe Oakland
settling for de-motivation and mediocrity, and no Raiders of ... Finance.ÓÒThe Oakland Raiders of ...
strategy, no matter how clever or wise, will save us. Housekeeping.ÓThe ÒOakland raiders of ... Drug
Discovery.Ó
One last word/caution. Re-read the above: People
5
Everything You Need to Know About Strategy:A BakerÕs Dozen Eternal Verities Tom PetersIncidentally (not so incidentally!), IÕd extend this representative board bios, and use my measure, youÕd
Keystone Idea to customers, vendors, and our entire have to assume that the firmÕs market was limited to
extended enterprise family. I embrace the idea of a V-OWGs (Very Old White Guys).
Zoo of Peculiars, pushing one another to perform on
or past the edge:ÒLead (pioneer-peculiar-audacious) Gender. Race. Age.You name it, and the board
customersÓ dragging the company toward remarkable composition is an embarrassment. No, I take that
future moonscapes; inventive-zany-audacious vendors back. Scratch Òembarrassment.ÓSubstitute:Stupid. As
causing the company to question every fundamental in, economicallystupid. (WeÕre talking profit maximiza-
assumption about doing business; and so on. tion here, not social justice.)
So: How do you do(MEASURE IT!) on the The womenÕs market is enormous.The Hispanic
Weirdness-Misfits-Pioneers Scale? market is by far the fastest growing in the U.S. (Find
me an Hispanic board member!) Youth are often
trendsetters,especially as the new technologies
increasingly come into play anywhere and
3.Is your Board of Directors as cool as everywhere. (Find me a board member under 35!)
your product offerings ... and does it have
50 percent (or at least one-third) Women But let me go back to my chief hobbyhorse ...Women.
Members? IÕll be blunt: I see no excuse,save an open acknowledge-
ment of stupidity,for less than one-third of board
ÒThe bottleneck is at the top of the bottle,Ó strategy members being female.(And IÕd like that number to
guru Gary Hamel reminds us.ÒWhere,Ó he asks be-approach 50 percent, frankly.) Hint: I think (know!)
rhetorically,Òare you likely to find people with the least this is an issue of the utmost ÒstrategicÓimportance.To
diversity of experience, the largest investment in the go to the animating spirit of this essay,Who the hell
past, and the greatest reverence for industrial cares what the ÒstrategyÓof the enterprise is ... if the
dogma?ÓHis answer, obvious to anyone except the Engine of Governance (Board) is completely,
incumbents:ÒAt the Top.Ó maliciously misaligned with the market served?
I can only say, ÒAmen!Ó And add:The Board ought to
bear at least some slight resemblance to the market
we serve/aim to serve. In general, Boards do no such 4.Long-term,itÕs a ÒTop-line WorldÓ:
thing! Is creating a ÒcultureÓthat cherishes
above all things Innovation and
For example, IÕve been studying for eight years Entrepreneurship your primary aim?
womenÕs impact on buying decisions, consumer and Remember: Innovation ... not Imitation!
commercial. ItÕs enormousÑincluding over 50 percent
of consumer electronics purchases. So why was I Flash:Jeff has halted JackÕs buying binge!
recently introduced to the just-appointed first woman Immelt is Jeff, CEO of GE. Jack is Welch, former CEO of
board member at ... Sony? GE.At the moment of transition, Jack apparently told
Jeff to blow old (JackÕs) GE up. Jeff apparently lis-
IÕm not urging quotas, but I am saying that, for tened. Consider this from Business 2.0 in its July 2004
instance, Deborah TannenÕs book title, You Just DonÕt issue:ÒWelch was to a large degree a growth-by-
Understand, perfectly captures the communications- acquisition man.ÔIn the late Õ90s,Õ Immelt says,Ôwe
understanding ÒgapÓbetween the sexes.In fact, if it became business traders and not business growers.
had been my book the title would have been, You Just Today organic growth is absolutely the biggest task of
CanÕtUnderstand.If you were to examine a set of every one of our companies. If we donÕt hit our organic
6
Everything You Need to Know About Strategy:A BakerÕs Dozen Eternal Verities Tom Petersrevenue targets, people are not going to get paid.Õ Corporate Boardroom. (Start innovating in the
Immelt has staked GEÕs future growth on the force that Boardroom itself ... see above concerning board
guided the company at its birth and for much of its homogeneity.)
history: breathtaking, mind-blowing, world-rattling
technological innovation.Ó Cultural commentator Paul Goldberger, writing about
retail in the NewYork Times Magazine, called this trou-
Love that:breathtaking ...mind-blowing ... blesome phenomenonÒthe sameness of things.Ó
world-rattling. ÒWhile everything may be better,Ó he asserted,Òit is
also increasingly the same.Ó Barry Gibbons took over
Now consider this parallel assertion from the most an ailing Burger King some years ago and made the
imaginative, free-thinking business commentator of same assessment Goldberger did. He called it
the day, Seth Godin:ÒThis is an essay about what it ÒNightmare #1,Óor, more precisely,ÒWhen we did it
takes to create and sell something remarkable. It is a ÔrightÕ it was still pretty ordinary.Ó Gibbons continues
plea for originality, passion, guts, and daring.You canÕt on a more general note:ÒI thought,ÔWhat a dreadful
be remarkable by following someone else whoÕs mission I have in life.Õ IÕd love to get six-thousand
remarkable. One way to figure out a great theory is to restaurants up to spec, but when I do itÕs ÔHo-hum.Õ ItÕs
look at whatÕs working in the real world and bugged me ever since. ItÕs one of the great paradoxes
determine what the successes have in common. But of modern business.We all know distinction is key, and
what could the Four Seasons and Motel 6 possibly yet in the last twenty years we have created a plethora
have in common? Or Neiman Marcus and Wal*Mart? of ho-hum products and services.Just go fly in an
Or Nokia (bringing out new hardware every 30 days or airplane. It could be such an enlightening experience.
so) and Nintendo (marketing the same Game Boy for Ho-hum.We swim in an ocean of ho-hum, and IÕm
14 years in a row)? ItÕs like trying to drive looking in going to fight it. IÕm going to die fighting it.Ó
the rearview mirror. The thing that all of those
companies have in common is that they have nothing in Another prominent CEO would seem to agree with
common.They are outliers.TheyÕre on the fringes. Gibbons. Soon after arriving at once premier innovator
Superfast or superslow.Very exclusive or very cheap. Hewlett-Packard, Carly Fiorina declared,ÒWe make over
Extremely big or extremely small.The reason itÕs so three new product announcements a day. Can you
hard to follow the leader is this:The leader is the remember them? Our customers canÕt!ÓLikewise, a
leader precisely because he did something remark- renowned industry analyst explained the dramatic
able.And that remarkable thing is now takenÑso itÕs incursion of the discount providers in his industry,
no longer remarkable when you decide to do it.Ó ÒCustomers will try Ôlow cost providersÕ ... because the
Majors have not given them any clear reason not to.Ó
* * * * *
ÒThe short road to ruin is to emulate the methods of your And in Funky Business, Swedish business ÒstrategyÓ
adversary.ÓÑWinston Churchill professors Kjell Nordstršm and Jonas RidderstrŒle ice
* * * * * the cake as they offer these trenchant observations:
ÒThe Ôsurplus societyÕhas a surplus of similar
Immelt and Godin (and Churchill) are onto something, companies, employing similar people, with similar
even though theyÕve traveled different roads to get educational backgrounds, coming up with similar
there.We are assaulted by a siege of Òme tooÓ ... at ideas, producing similarthings, with similar prices and
exactly the wrong time, at a time of profound and similarquality.To succeed we must stop being so
rapid change coming from every point of the compass goddamn normal. In a winner-takes-all world, normal
at literally the speed of light over a fiber optic cable. It= nothing.Ó
is thus a moment that cries out for profound innova-
tion, from the CIA and FBI headquarters to the These assertions, from a diverse set of movers and
7
Everything You Need to Know About Strategy:A BakerÕs Dozen Eternal Verities Tom Petersshakers, observers and prime movers, capture my change the odds currently stacked against continued
sentiments exactlyÑand offer the unassailable case, U.S. economic dominance.
as I see it, for a renewed emphasis on Fundamental
Innovation. Or, recall per Immelt: breathtaking ... Bo t tom line:No promotion to senior levels of pub-
mind-blowing ... earth-rattling. lic or pri vate ente rp rise should ever again be gra nte d
to anyone who does not pre s e nt a CV sat u rated by a
The problem: A Òculture changeÓof the first order is clear and co m pelling demonstration of sustained co m-
requisite, from the Boardroom to B-school.We saw the m i t m e nt to Ra d i cal Ch a n g e. Do we wish for Òg ood
boardroom is the ultimateÒsameness of things.ÓAnd a s t rate g i s t sÓ? Why not! But the heart of the mat ter goe s
recent examination of leading B-schools revealed that far beyond any plan, no mat ter how bri l l i a nt .The heart
not a single one had a Core Course on ... innovation. of the mat ter is He a rt & Wi l l . . .a re co rd of upsetting
(Good God!) apple ca rt s, d i s l odging Òe s t a b l i s h m e nt sÓand funda-
m e ntally alte ring deep-roo ted Òc u l t u re sÓto embra ce
But the problem manifested in the B-school change of the most primal sort .I titled my most re ce nt
curriculum starts much earlier. Consider this lament book Re-imagine! Business Exce l l e n ce in a Di s ru p t i ve Ag e.
from Jordan Ayan, in his book Aha!:ÒMy wife and I Ò E xce l l e n ceÓin a Òd i s ru p t i ve ageÓis not exce l l e n ce
went to a [kindergarten] parent-teacher conference amidst placid wate r s.The notion of exce l l e n ce itself
and were informed that our budding refrigerator changes ... d ra m at i ca l l y.We need our public and
artist, Christopher, would be receiving a grade of p ri vate Ch u rc h i l l s,leaders who can re - i m a g i n e, who ca n
Unsatisfactory in art.We were shocked. How could any call fo rth we l l s p rings of daring and guts and spirit and
childÑlet alone our childÑreceive a poor grade in art s p u n k , f rom one and all, to topple the way things may
at such a young age? His teacher informed us that he h ave been for many generationsÑand who inspire us
had refused to color within the lines, which was a state to ve nt u re fo rth into tod ayÕs and to m o rrowÕs white wa-
requirement for demonstrating Ôgrade-level motor ters with insouciance and bravado and dete rm i n at i o n .
skills.ÕÓ(Good God ... redux.)
* * * * *
The implications of a perverse set of educational ÒAcquisitions are about buying market share.Our chal-
incentives are all too aptly summarized by Richard lenge is to create markets.There is a big difference.Ó
Farson and Ralph Keyes in Whoever Makes the Most ÑPeter Job, former CEO, Reuters
Mistakes Wins:ÒThomas Stanley has not only found no * * * * *
correlation between success in school and an ability
to accumulate wealth, heÕs actually found a negative
correlation.ÔIt seems that school-related evaluations
5.Are the Ultimate Rewards heaped
are poor predictors of economic success,Õ Stanley
concluded.What did predict success was a willingness upon those who exhibit an unswerving
ÒBias for Action,Ó to quote the co-authors
to take risks.Yet the success-failure standards of most
schools penalized risk takers. Most educational of In Search of Excellence? Are your OODA
systems reward those who play it safe. As a result, loops shorter than the next guyÕs?
Some call the late John Boyd the most original military
those who do well in school find it hard to take risks
later on.Ó(Uncle!) strategist in 1,000 years.True or not, his influence has
been profound. His ideas about ÒmaneuverabilityÓas
In the face of an enormous set of challenges, from the sine qua non of military effectiveness, long on the
uncertainty induced by the threat of terrorism to the back burner (during the Cold War standoff between
dramatic rise of India and China as competitors, only a sluggish behemoths), have marched front and center
national (from the classroom to the boardroom) com- in the new age of instability, ambiguity, and terrorism.
mitment to re-kindling the flames of Òmind-blowing,Ó
Òearth-rattlingÓEntrepreneurship and Innovation will At the heart of BoydÕs thinking is an idea labeled
8
Everything You Need to Know About Strategy:A BakerÕs Dozen Eternal Verities Tom PetersÒOODA Loops.Ó OODA stands for the Observe-Orient- tional idea is that the leader is directly responsible for
Decide-Act cycle. In short, the player with the quickest the organizationÕs Metabolic RateÑthe Òquick tran-
OODA Loops disorients the enemy to an extreme sientsÓ and Òhigh tempoÓ which Òunravel the competi-
degree. In the world of aerial combat, for example, the tionÓin Boyd-world. My hero is actually a draft dodger.
confused adversary subjected to an opponent with That is, Captains of Industry would do well to adopt
short OODA cycles often flies into the ground rather AliÕs fabled dictum-mantra:ÒFloat like a butterfly,
than becoming the victim of machine gun fire or a sting like a bee.Ó
missile. Boyd is careful to distinguish between raw
speed and maneuverability. In aerial dogfighting in And if there is one thing that traditional enterprise
Korea (BoydÕs incubator), Soviet MiGs flown by is not designed to do, especially after bulking up via
Chinese pilots were faster and could climb higher, but monster mergers aimed at fending off yesterdayÕs
adversaries, itÕs floating like a butterfly and stinging
our F-86 had Òfaster transientsÓÑit could change
direction more quickly; hence our technically inferior like a bee.ÒThe lines that we drew on our neat
craft (by conventional design standards) achieved a organizational diagrams,Ówrite Frank Lekanne Deprez
& RenŽ Tissen in Zero Space:Moving Beyond
10:1 kill ratio. (Read more in Robert CoramÕs Boyd:The
Fighter Pilot Who Changed the Art of War.) Organizational Limits,Òhave turned into walls that no
one can scale or penetrate or even peer over.ÓErasing
those lines will arguably be Job One for todayÕs and
* * * * *
tomorrowÕs leaders.Among them is IBMÕs new chief,
ÒBlitzkrieg is far more than lightning thrusts that Sam Palmisano. At the core of his transformation
most people think of when they hear the term;rather it strategy is instilling an ability, as Fortunereported,Òto
was all about high operational tempo and the rapid assemble SWAT teams of hardware, software, services,
exploitation of opportunity.Ó research, and sales people to cure customersÕ
headaches.Ó I.e.: Learning to float like a butterfly and ...
ÑRobert Coram, Boyd
ÒWe must transform not only our armed forces but * * * * *
ÒChivalry is dead.The new code of conduct is an
also the Defense Department that serves themÑby
encouraging a culture of creativity and intelligent active strategy of disrupting the status quo to create an
unsustainable series of competitive advantages.This is
risk-taking.We must promote a more entrepreneurial not an age of defensive castles,moats and armor.It is
approach:one that encourages people to be proactive,
not reactive,and to behave less like bureaucrats and rather an age of cunning,speed and surprise.It may be
hard for some to hang up the chain mail of Ôsustainable
more like venture capitalists;one that does not wait for
threats to emerge and beÔvalidated,Õbut rather advantageÕafter so many battles.But hypercompetition,
a state in which sustainable advantages are no longer
anticipates them before they appear and develops new possible,is now the only level of competition.Ó
capabilities to dissuade and deter them.Ó
ÑDonald Rumsfeld, Foreign Affairs ÑRich DÕAveni, Hypercompetition:Managing the
Dynamics of Strategic Maneuvering
* * * * * * * * * *
The application to a war against non-traditional ene-
mies is obviously fertile ground for these notions.But I
Bob Waterman and I cottoned on to a variation of this
contend that private enterprise needs a hearty dose of idea (and our own variety of Deprez and TissenÕs
the same medicine that Secretary Donald Rumsfeld is
serving to the reluctant Navy and Army and Air Force. depressing diagnosis) over twenty years ago, as we
researched what became In Search of Excellence.We
(Not surprisingly, at least in retrospect, the Marines wandered the world of Big Organizations in search of
take to this stuff like a duck to water.) In other work,
answersÑdriven specifically by the fact that so many
my Leadership11special presentation, I call it, perhaps ÒbrilliantÓstrategies (among them ones that we at
awkwardly,Òmetabolic management.ÓThe unconven-
McKinsey had helped concoct) were executed so
9
Everything You Need to Know About Strategy:A BakerÕs Dozen Eternal Verities Tom Peterspoorly. Fact was, at the Òexcellent companiesÓwe found
6.Do you routinely use hot,aspirational
a lot less emphasis than weÕd expected on the strategy
per se, and instead a persistent focus on simply doing words-terms like ÒExcellenceÓ and BHAG
stuff, not talking it to death. As IÕve come to call it: (Big Hairy Audacious Goal, per Jim Collins)
and ÒLetÕs make a dent in the UniverseÓ
ÒBusiness Problem One:Too much talk,too little do!ÓThis
finding, observed in particular in 1980 at the likes of (the Word according to Steve Jobs)? Is
ÒReward excellent failures, punish
HP and 3M, was codified as the first of our Òeight
basicsÓ of excellent performance:A Bias for Action. mediocre successesÓ your de facto or de
While some of our ideas have needed substantial bur- jure motto?
nishing in the subsequent two decades, this one, as I
see it, remains Exec Job One! By my lights,for example, Message:Hot begets Hot! (Cold begets Cold.)
And ... you heard it here first!
the abiding and sustaining feature of GEÕs success is its
determination to get resultsÑand its performance
fetish at all levels of the firm. GE was once (the Õ70s) DonÕt get me started! My lifeÕs work has been to
re-paint dry and dreary Òmanagement talkÓin
known as home to a mass of MBA-strategic planners,
but it has been trademarked from Edison to Immelt by Technicolor hues! I simply donÕt believe biz is dry and
dreary. I believe itÕs about people creating things for
an abiding bias for action/results/performance.
people. (Great Thai food at a restaurant or a
The problem is that no Òstrategy,Óno collection of pacemaker from Medtronics.) People serving people.
People growing and achieving beyond their dreamsÑ
words no matter how brilliant, will make much differ-
ence when it comes to this topic. AÒbias for actionÓis a one Wow Project at a time.
Deep Cultural issueÑtheDeep Cultural issue, for that
Yes, I am the Guru of Hot, the (Business) Maestro of
matter. Instilling such a bias begins with the front-line
recruiting process and continues all the way to the Technicolor, the Evangelist of Energy, the Wizard of
Wild & WeirdÑand damned proud of it!
selection of the CEO.ÒDoersÓwere probably frenetical-
ly doing by Age 7 ... and ÒditherersÓ were probably dis-
tractedly dithering by Age 7! IÕm still in love with Òexcellence.ÓÒExceeds
expectationsÓis catching a bus from point A to point B
* * * * * and arriving roughly on time and without anything
untoward happening.ÒExcellenceÓ is an ... Absolutely,
Kevin Roberts on ÒStrategyÓ:
Positively Supercalifragilisticexpialidocious evening
1.Ready.Fire! Aim. partaking of a Cirque du Soleil performance in Las
Vegas. So:Why canÕt a business process re-engineering
2.If it ainÕt broke,break it!
3.Hire crazies! project measure up to the CSPS? (Cirque du Soleil
Performance Standard.) Answer: If the biz project fails
4.Ask dumb questions.
5.Pursue failure. on the ÒCSPSÓscore ...it is because of the shriveled
6.Lead,follow,or get out of the way. imagination of the leader. Period. Call me corny. Call
me na•ve. (At age 61, please!) But I am unequivocally
7.Spread confusion.
8.Ditch your office. convinced that any activity, no matter how apparently
9.Read odd stuff. humble, can be turned into a Work of Magnificent Art.
(Okay, IÕm drafting this during the Athens Olympics.
10.Avoid moderation.
One can understand Gymnastics as pure art, but Table
Tennis? Give me a break.Well, Olympic table tennis is,
Note:Roberts is CEO of Saatchi & Saatchi Worldwide
literally, breathtaking ... eh?)
* * * * *
Jim Collins (most recently Good to Great) calls for
10
Everything You Need to Know About Strategy:A BakerÕs Dozen Eternal Verities Tom PetersBHAGs ... Big, Hairy Audacious Goals. Nice! AppleÕs belly flop than to step timidly off the board while
Steve Jobs exhorts a new product team,ÒLetÕs make a holding your nose.Ó Thanks!
dent in the universe.Ó Nice! The late adman David
Ogilvy charges a creative staffer with making an ad for
kids clothing thatÕsÒimmortal.Ó(Nice again.) Well, you
get the drift. Great Aspirations (CSPS) donÕt ensure 7.Do you subscribe to Jerry GarciaÕs
great results.But you canbe sure that the absence of dictum:ÒWe do not merely want to be the
Great Aspirations willensure non-great results. best of the best, we want to be the only
ones who do what we doÓ?
* * * * *
ÒYou never hear a Swiss say,ÔI want to Doug Hall, P&G vet and long-time proprietor of Eureka
change the world.ÕWe need to take more risks.Ó Ranch, is my favorite marketing guru. One reason is his
ÑXavier Comtesse, on the establishment of Swiss ... Declaration of Dramatic Difference.Well, he doesnÕt
House for Advanced Research & Education in call it thatÑI do. In Jump StartYour Business Brain, Hall
Cambridge,Massachusetts gives us his Three Laws of Marketing Physics.The Law
of Dramatic Difference is number three. It goes this
* * * * *
way. Prospective customers evaluate a new product.
Then theyÕre asked (1) if theyÕd buy it and (2) if they
ThereÕs a corollary to all this thatÕs of the utmost see it as Òunique.ÓThe firmÕs execs in turn evaluate and
importance. If reaching for the moon is routine, then
falling short will also occur more than infrequently. weigh the prospective customersÕ reactions.Without
fail, the execs deciding to launch or not bet close to
Consider Phil Daniels, a successful Australian one-hundred of their marbles on the intent-to-buy
businessman. At a seminar I gave in Sydney, he felt
question, and virtually ignore the uniqueness issue.
compelled to rise from the audience and share his The problem, or should I sayÒTHE PROBLEMÓ: In
wisdom with us. IÕm eternally grateful that he did.ÒMy
success,Óhe told us,Òis due in large measure to a actual fact the intent-to-buy response is a poor
predictor of subsequent real-world success (or failure),
simple philosophy,ÔReward excellent failures,punish while the ÒuniquenessÓassessment almost perfectly
mediocre successes.ÕÓ
predicts the true response to the product.
Wow!
Maybe all those execs Hall has been coaching for the
last twenty years should have listened to the Grateful
While DanielsÕ advice, I think, is fit for the ages, itÕs DeadÕs Jerry Garcia: ÒWe do not merely want to be the
todayÕs nutty times that are my bailiwick. And in nutty
best of the best,we want to be the only ones who do
times, with the playing fields morphing by the what we do.Ó
moment, time devoted to a Òmediocre successÓis a
tragic waste. No less.(Yes ...ÒtragicÓwaste.) I once
Cirque du Soleil redux, eh? ItÕs the ultimate BHAG:
heard legendary GE boss Jack Welch say about the Òonly ones who do what we do.Ó
same thing. Nobody at GE during his watch, he told us,
got in trouble for Òswinging for the fences and (Only = Big Word.)
missing.ÓThe mortal sin was, instead, spending two None of HallÕs client execs get it. Damn few anyw h e re
years on a project Òwhich, even if it worked, wouldnÕt
get it. I decry those 100 pe rce nt shri veled imaginat i o n s,
make the earth wobble a bit on its axis.Ó to be sure. ( Not my kind of guys. Any of Õem.) But I also
Some like it hot! I happen to be among them. Along d e c ry the subsequent poor economic pe rfo rm a n ce of
the ente rp risesÑthe co pycat s, l oo king only to do a bit
with Jobs,Ogilvy, Daniels,Welch, et al. As Fast Company m o re of what we do with a twist or two, or to co py - t h e -
put it when reviewing Re-imagine!:ÒIn TomÕs world, itÕs
l e a d e r.ÒTo grow,Ów ro te W. Chan Kim and Re n Ž
always better to try a swan dive and deliver a colossal
11
Everything You Need to Know About Strategy:A BakerÕs Dozen Eternal Verities Tom PetersMa u bo rgne in ÒThink for Yo u r s e l f Ñ Stop Co pying a I was described in public as a ÒradicalÓby a senior
Ri va lÓ( Financial Ti m e s ),Òcompanies need to break out ofJapanese official, during a Summer 2004 conference in
a vicious cycle of co m pe t i t i ve be n c h m a rking and imi-Nagano.(Actually, which I guess even amplifies the
t at i o n . Aiming to be at the co m petition has the oppo-label, he was a Japanese-American, who spent much
s i te effe ct to the one inte n d e d. It keeps co m p a n i e sof his career in Silicon Valley.) I retorted sharply that I
focused on the co m pe t i t i o n .When asked to build co m-was no such animal! Alas, heÕd been taking detailed
pe t i t i ve adva nt a g e s, managers ty p i cally rate them-notes during my presentation.ÒBut didnÕt you say you
s e l ves against co m pe t i to r s, assess what they do andcould readily imagine a $50 billion corporation, per-
s t ri ve to do it be t te r.ÓDon Listw i n , CEO of Ope n wavehaps in pharmaceuticals, which had only two full-time
Sys te m s, has the guts to put numbers around this idea: employeesÑyou and one other. And ÔoutsourcedÕ
Ò How do dominant companies lose their po s i t i o n ? everything else?ÓThen he added (see Number 3
Two - t h i rds of the time, t h ey pick the wrong co m pe t i to rabove) thatÒone of the two would, of course, be a
to wo rry abo u t .ÓL i s twin was re fe rring to No ki aÕs re ce ntwoman.Ó
p ro b l e m s,which he at t ri b u tes to co pying Mi c ro s o ft
I agreed heÕd taken accurate notesÑbut still denied
and offe ring a jillion ove rly co m p l i cated fe at u res that
c u s tomers simply we re nÕt pining fo r. But to me a thou-the radical label. I waffled a little, and allowed as how I
didnÕt expect to see anything so extreme in the near
sand alarm bells we nt off from my 35-year ca reer in
b u s i n e s s.U . S .Steel wo rries exc l u s i vely about fo re i g n-futureÑbut the concept made perfect sense to me.
ersÑand is late to the local mini-mill party (Nu co r, e t
And it does.
a l . ) .GM and Fo rd re l e ntlessly fo l l ow each otherÑand(Particularly the bit about the woman.)
dismiss the Japanese for ye a r s,even deca d e s.Xe rox
d oes the same thing, gnashing teeth over IBM and
I Õm cribbing here from British management guru
Kodak and ove rl oo king the Japanese. I B M , on the other
h a n d, sees Siemens and Fujitsu in its dre a m s Ñ a n d Ch a rles Handy, who said years ago,ÒO rg a n i z ations will
still be cri t i cally impo rt a nt in the wo rl d, but as Ôo rg a n i z-
misses Mi c ro s o ft (et al., et al.). And so on ... and on.e r s,Õnot Ôe m p l oye r s.Õ ÓThe co n fe re n ce I was at te n d i n g
Jerry G. sets a high standard ... but is there any other in was a Cl i e nt get-tog e t h e r, s po n s o red by IndiaÕs
I n fo s ysÑthe most exc i t i n g, f a r s i g hted co m p a ny IÕve
this madcap world?
come across in years and ye a r s.Thus I could imagine
I n fo s ys doing our IS/IT.The best-most inte resting of the
* * * * * b i o techs would do our R&D. UPS would handle any and
Richard Branson on ÒStrategyÓ:
all supply chain issues. Best of breed specialists wo u l d
Follow your passions. also pe rfo rm clinical tri a l s.O m n i com would exe c u te
Keep it simple. the ent i re marketing chore on a turn key basisÑand
Get the best people to help you. pe rhaps weÕd co nt ra ct with one of Òold pharm aÓto do
Re-create yourself. the selling (though I be l i eve that spe c i a l i s t, I nte rn e t -
Play. based Òs a l e sÓf i rms may usurp Big Ph a rm aÕs sales ro l e,
too ) . And on. And on.( And on.) Fi n a l l y, my female part-
Source:Fortune on Sir Richard Branson,Virgin Group ner and I would co nt ra ct with a pro j e ct management
* * * * * co n s u l t a n cy to orc h e s t rate the overall network.
Economistwriters John Micklethwait and Adrian
Wooldridge also beat me to this piece of ÒradicalÓ turf
8.Do you elaborate on and enhance in their book The Company.They imagined tomorrowÕs
Jerry GÕs dictum by adding,ÒWe subscribe Ford Motor Company as simply a Òvehicle brand
to ÔBest SourcingÕÑand only want to asso- ownerÓwhich would Òdesign, engineer, and market
ciate with the Ôbest of the best.ÕÓ cars, but not actually make them.ÓMy punch line in
12
Everything You Need to Know About Strategy:A BakerÕs Dozen Eternal Verities Tom Petersthe Infosys presentation had been:ÒNot Ôout sourcing.Õ to Small Things.Rather,make Big Changes to Big Things.Ó
Not Ôoff shoring.ÕNot Ônear shoring.ÕNot Ôin sourcing.ÕBut
...ÔBest Sourcing.ÕÓThat is, while I acknowledge the Doubtless ITÕs biggest challenge (and opportunity) lies
increasingly nasty politics of Òoff shoring,ÓI believe it in the realm of national security.Though billions upon
miscasts the long-term economic excellence debate. billions have been spent on federal, state, and local
Companies that attempt to be Òbest at everythingÓare IS/IT programs by well-intentioned professionals, the
doomed. I further believe that every unit in the tradi- results have been less than satisfactory.The whole
tional firm (logistics, IS/IT, HR, finance, R&D, marketing, idea of thoroughly modern IS/IT is the right informa-
sales, etc.) must offer proof positive that it is, to mimic tion at the right place at the right time. But as the
Mr. Garcia,Òthe only ones who do what we doÓÑor at Boston Globereported on 30 September 2001, thatÕs
least equivalent to the best of the best. hardly been the result.ÒIn an era when terrorists use
satellite phones and encrypted email,Óthe paper
Meanwhile, my partner at Lean Staffed concluded,ÒU.S. gatekeepers stand armed against
Pharmaceuticals Inc. and I will be photographed in the them with pencils and paperwork, and archaic
subcontracted Annual Report seated behind a desk computer systems that donÕt talk to each other.Ó
over which one can see a gilt-framed picture of Forrest Which is why the following report is so stunning!
Gump, with his immortal quote in bold lettering at the
bottom:ÒDONÕT OWN NOTHINÕIF YOU CAN Peacekeeping in Afghanistan and Iraq has been prob-
HELP IT. IF YOU CAN, RENT YOUR SHOES.Ó lematic,to say the least. Nonetheless, the initial
warfighting in both theaters was a sharp departure
from the pastÑdriven, make no mistake, by newfound
IS/IT effectiveness. Consider this startling (if history is
your guide) 2002 report from Business 2.0editor Ned
9.Do you embrace the new technolo-
gies with child-like enthusiasm and a Desmond, titled ÒBroadbandÕs New Killer AppÓ:
revolutionaryÕs zeal? ÒDawn Meyerreicks, CTO of the Defense Information
Sysco! Systems Agency, made one of the most fateful military
calls of the 21st century. After 9/11 ... her office quickly
Sysco bet the company. On the new technology. leased all the available transponders covering Central
Asia.The implications should change everything
The food distribution giant delayed for years IS/IT about U.S. military thinking in the years ahead.
maintenance projects that others would have
declared essential. Instead the IS/IT budget was aimed
ÒThe U.S. Air Force had kicked off its fight against the
squarely at a Òbet the companyÓstrategy to leapfrog Taliban with an ineffective bombing campaign, and
the competition by a decade.At this point implemen-
Washington was anguishing over whether to send in a
tation is on track,and the CIO claims that his boss (the few Army divisions. Donald Rumsfeld told Gen.Tommy
CEO) is squarely staking his career on this enormous,
transforming project. Franks to give the initiative to 250 Special Forces
already on the ground.They used satellite phones,
Predator surveillance drones, and GPS and laser-based
IS/IT is a mereÒtoolÓÑbut, as in Dell-world or Sysco-
world, IS/IT has the power to do ever so much more, to targeting systems to make the air strikes brutally
effective.
re-invent entire industries and upend the competitive ÒIn effect, they ÔNapsterizedÕ the battlefield by cutting
pecking order in the process. If ...
out the middlemen (much of the militaryÕs command
and control) and working directly with the real play-
If ... the boss has vision and guts. Former PepsiCo CEO
Roger Enrico lays out the challenge in no uncertain ers. ...The data came in so fast that HQ revised operat-
ing procedures to allow intelligence analysts and
terms: ÒBeware of the tyranny of making Small Changes attack planners to work directly together.Their
13
Everything You Need to Know About Strategy:A BakerÕs Dozen Eternal Verities Tom Petersfavorite tool, by the way, was instant messaging over expand techÕs borders by pushing IT usersÑand entire
a secure network.Ó industriesÑtoward radically different business
models.The payoff for IBM would be access to an
Adios, colonels (middle managers) by the personnel- ocean of potential revenueÑPalmisano estimates it at
carrier load! Welcome, direct agency and inter-service, $500 billion a yearÑthat technology companies have
bureaucracy-free communication among those who never been able to touch.Ó
do the work on the sharp end! ItÕs that simpleÑand
that profound. UPS is a collection of brown trucks. Except it wants us
to forget the trucks ... and ask ÒWhat Can Brown Do for
* * * * * Me?ÓÒUPS,Ó said ecompany.com,Òwants to take over
Not your fatherÕs health care establishment: the sweet spot in the endless loop of goods, informa-
ÒOur entire facility is digital.No paper,no film,no medical tion, and capital that all those packages [it moves] rep-
records.Nothing.And itÕs all integratedÑfrom the lab to resent.ÓBusinessWeekchimes in:ÒBig BrownÕs New Bag:
X-ray to records to physician order entry.Patients donÕt UPS Aims To Be the Traffic Manager for Corporate
have to wait for anything.The information from the America.ÓThe fastest growing element at IBM is IBM
physicianÕs office is in registration and vice versa.The Global Services,the consultancy-industry rainmaker.
referring physician is immediately sent an email telling The fastest growing element at UPS is ÒSCSÓ... Supply
him his patient has shown up....ItÕs wireless in-house.We Chain Solutions, now at $2 billion and featuring 750
have 800 notebook computers that are wireless. locations; UPS's 24 recent acquisitions include a bank
Physicians can walk around with a computer thatÕs and other financial services assets that permit the
preprogrammed.If the physician wants,weÕll go out and company to be your one-stop-shop-consultancy-sys-
wire their house so they can sit on the couch and connect tems architect for all logistical and supply chain con-
to the network.They can review a chart from 100 miles cerns and opportunities now and forever more.
away.ÓÑDavid Veillette, CEO, Indiana Heart Hospital,
from HealthLeaders Omnicom is a professional services firm thatÒmakesÓ
ads.Well, sure, but ...
* * * * *
But the Òad bitÓis now the minority partner in the $8
Nothing less than an appetite for dramatic overthrow billion firm. Omnicom would like, say, a Chevrolet or
of 250 years of Industrial Revolution enterprise struc-
tures will do. As I said: ItÕs that simpleÑand that pro- Frito-Lay toÒoutsourceÓall its marketing concernsÑ
much the same way that an EDS does 95 percent of
found. the IS/IT work for its giant clients.That is, Omnicom is
now in the Òintegrated marketing servicesÓbizÑof
which ads are an important but no longer dominant
10.Do you ÒserveÓand ÒsatisfyÓ part.
customers ... or Ògo berserkÓ attempting to Club Med doesnÕt provide Ògreat rooms on a cool
provide every customer with an Òawesome
experienceÓthat does nothing less than beach.Ó Starbucks isnÕt about a cup of java ... and
Harley-Davidson surely doesnÕt sell two-wheeled
transform the way she or he sees the transportation machines.Try instead:
world?
ÒClub Med is more than just a ÔresortÕ; itÕs a means of
The ÒMÓin IBM stands for Òmachines.ÓExcept IBM
doesnÕt make computers anymore. ItÕs effectively the rediscovering oneself, of inventing an entirely new
Ôme.ÕÓÑJean-Marie Dru, CEO TBWA/ChiatDay,
worldÕs largest consultancy. CEO Sam Palmisano aims Disruption
to be no less than system architect of industry
upheavals.ÒPalmisanoÕs strategy,Óclaims Fortune,Òis to
14
Everything You Need to Know About Strategy:A BakerÕs Dozen Eternal Verities Tom PetersÒWe have identified a Ôthird place.ÕAnd I really believe very hard.Ó GerstnerÕs was a full-fledged conversion:ÒI
that sets us apart.The third place is that place thatÕs came to see, in my time at IBM, that culture isnÕt just
not work or home.ItÕs the place our customers come one aspect of the gameÑit isthe game.Ó
for refuge.ÓÑNancy Orsolini, Starbucks District
Manager In this case even Òculture change,Ódaunting as it is, is
not a fully adequate term. Requisite is a particular type
ÒWhat we sell is the ability for a 43-year-old account- of culture change that flies in the face of most tradi-
ant to dress in black leather, ride through small towns tional training and development practices of, say, the
and have people be afraid of him.ÓÑHarley-Davidson last hundred or more years.ÒMost managers,Ó says
exec on Òexperiencing the Ôrebel lifestyleÕÓ Danish marketing guru Jesper Kunde in Unique Now ...
or Never,Òhave no idea how to add value to a market
At the heart of Re-imagine!is my extensive tour of the in the metaphysical world. But that is what the market
economy, from consumer offerings (such as Club Med, will cry out for in the future.There is no lack of Ôphysi-
Starbucks, Harley) to business-to-business services calÕ products to choose between.Ó
(such as IBM, UPS, Omnicom).The emergent story line
is the same everywhere: As global competition heats What about a new degree, an MMM (Master of
up (and up and up), merely making a Òquality productÓ Metaphysical Management) to supplant the MBA?
or Òquality serviceÓis no longer enough, not nearly Another Dane, Rolf Jensen, head of the Copenhagen
enough.We need to offer far more. One usefulÑcom- Institute for Future Studies, is poised to hop aboard
pelling, actuallyÑname for this new ÒitÓ that pre-occu- this bandwagon.ÒThe sun is setting on the
pies everyone from UPS to Starbucks is Òexperiences.Ó Information SocietyÓhe writes in The Dream Society:
As in providing remarkable experiences instead of just How the Coming Shift from Information to Imagination
products and services.The core logic is provided by Will Transform Your Business,Òeven before we have fully
Joe Pine and Jim Gilmore in their seminal The adjusted to its demands as individuals and as compa-
Experience Economy:Work IsTheatre & Every Business a nies.We have lived as hunters and as farmers, we have
Stage.ÒExperiences,Óthe authors write,Òare as distinct worked in factories, and now we live in an informa-
from services as services are from goods.Ó Former tion-based society whose icon is the computer.We
Harley CEO Rich Teerlink translates this into CFO- stand facing the fifth kind of society: the Dream
speak. He told me it took him almost a decade of Society.The Dream Society is emerging this very
relentlessly Òpounding on Wall StreetÓ to convince ana- instantÑthe shape of the future is visible today. Right
lysts that ÒWe are a Ôlifestyle company,Õ not a Ômachin- now is the time for decisionsÑbefore the major por-
ery manufacturer.ÕÓTeerlinkÕs successful sale to the tion of consumer purchases are made for emotional,
Street led to about a $10 billion leap in the former nonmaterialistic reasons. Future products will have to
machinery manufacturerÕs market cap! appeal to our hearts, not to our heads. Now is the time
to add emotional value to products and services.Ó
ItÕs all easier said than done, of course. And as usual
with true transformations,Òculture changeÓ(not con- Longtime premier brands executive Gian Luigi
cocting the Òright strategyÓ) is the necessary aim and Longinotti-Buitoni takes this line of argument to the
test. One premier strategy buff who took that lesson extreme, contending that winners will get into the
aboard, albeit reluctantly, was former IBM CEO Lou Òdream marketingÓbusiness.ÒA dream,Ó he says,Òis a
Gerstner.ÒIf I could have chosen not to tackle the IBM complete moment in the life of a client. Important
culture head-on, I probably wouldnÕt have,ÓGerstner experiences that tempt the client to commit substan-
wrote in Who Says Elephants CanÕt Dance.ÒMy bias tial resources.The essence of the desires of the con-
coming in was toward strategy, analysis, and measure- sumer.The opportunity to help clients become what
ment. In comparison, changing the attitude and they want to be.ÓLonginotti-Buitoni then shortens
behavior of hundreds of thousands of people is very, dream marketing to ... dreamketing:ÒDreamketing:
15
Everything You Need to Know About Strategy:A BakerÕs Dozen Eternal Verities Tom PetersTouching the clientsÕ dreams. Dreamketing:The art of ÒWar has broken out over your home-improvement
telling stories and entertaining. Dreamketing: Promote dollar,and LoweÕs has superpower Home Depot on the
the dream, not the product. Dreamketing: Build the defensive.Its not-so-secret ploy:Lure women.Ó
brand around the main dream.Dreamketing: Build the ÑForbes.com
buzz, the hype, the cult.Ó
ÒThe New Customer Majority [ages 44-65] is the only
* * * * * adult market with realistic prospects for significant sales
ÒWe do not sell ÔfurnitureÕat Domain.We sell dreams. growth in dozens of product lines for thousands of com-
This is accomplished by addressing the half-formed panies.Ó ÑDavid Wolfe & Robert Snyder, Ageless
needs in our customersÕheads.By uncovering these Marketing
needs,we,in essence,fill in the blanks.We convertÔneedsÕ
intoÔdreams.ÕSales are the inevitable result.Ó ÒBaby-boomer Women:The Sweetest of Sweet Spots for
Ñ Judy George, Domain Home Fashions Marketers.ÓÑDavid Wolfe and Robert Snyder, Ageless
Marketing
ÒNo longer are we only an insurance provider.
Today,we also offer our customers the products and Marketers use powerful new tools to reduce Òseg-
services that help them achieve their dreams,whether mentsÓinto ever thinner slicesÑeven Òslices of one,Ó
according to the new Dogma of One-to-One
itÕs financial security,buying a car,paying for home
repairs,or even taking a dreamvacation.Ó Marketing. IÕm an unabashed champion of the new
tools. Nonetheless their use should not be an excuse
ÑMartin Feinstein, CEO, Farmers Group for stupidly ignoring something much bigger: the
* * * * * potential of realigning the enterprise to better serve
You may or may not cotton toÒdreamketingÓ per se. Women and Boomers-Geezers.These two overwhelm-
But I contend that the evidence IÕve presented in this ing forces are still ignored or absurdly undervalued by
very truncated business tour dÕhorizon is compelling. the vast majority of companies, large or small,
And ubiquitous.ÒDreamketingÓat a home furnishings consumer oriented or business-to-business oriented.
chain (Domain)? Sure. But isnÕt the Domain story at And make no mistake:ÒGetting with the programÓ is
essence the same as ÒWhat can Brown do for you?Ó not about ÒsegmentationÓ; itÕs about (Here I go again!)
(UPS) story? I think the answer is clear as a bell, from wholesale ÒculturalÓ realignment of the enterprise.
financial services (Farmers Group) to logistics services
(UPS) and enterprise re-imaginings (IBM) ... to Women = Opportunity No. 1
vacations (Club Med) and a cuppa java (Starbucks).
Start with women. They buy everything.(Not much of
an exaggeration.) Consider these stats from the U.S.,
Feel free to choose your favorite term:Òexperience
economy,ÓÒdream society,ÓÒdreamketing,Óor some UK, Canada, Australia, and New Zealand.WomenÕs
other. No matter what your choice is, the operative share of purchases:
idea remains: NOT OPTIONAL.
Home Furnishings ... 94%
Vacations ... 92%
Houses ... 91%
D.I.Y. (major Òhome projectsÓ) ... 80%
11.Do you understand ...to your very
Consumer Electronics ... 51% (66% home computers)
marrow ... that the two biggest under- Cars ... 68%
served markets are Women and Boomers- All consumer purchases ...83%
Geezers? And that to Òtake advantageÓ of Bank Account ... 89%
these two Monster ÒTrendsÓ (FACTS OF Household investment decisions ...67%
LIFE) requires fundamental realignment of Small business loans/biz starts ... 70%
the enterprise? Health Care ... 80%
16
Everything You Need to Know About Strategy:A BakerÕs Dozen Eternal Verities Tom PetersAnd itÕs not just consumer purchases. In the U.S., for ple First Truth: ÒWomen donÕt buy brands.They join
example, women account for more than half of profes- them.Ó
sional purchasing officers, admin officers, and HR offi-
cials. Hence,ÒsheÓ is just about as likely to sign the P.O. A brilliantly successful Manhattan financial planner
for a $5 billion IS/IT outsourcing contract as for the (male!) confirmed the Popcorn-Marigold Òtruth.ÓYears
family Mercedes. (By the way, when it comes to those ago he successfully re-oriented his practice toward
consumer goods, perhaps youÕd be interested to know serving womenÕs needs. He told me that his average
that, lingering wage inequalities notwithstanding, male client recommends him to 2.6 others; his average
womenÕs income rose 63 percent over the last three female client spreads the word to 21 colleagues. Such
decades, while menÕs crept up by 0.6 percent. IÕve got striking (gaping!) differences have become staples of
hundreds of ÒgotchaÓstats like that, painstakingly col- my eight-year quest for understanding.
lected over the last eight years. Many are presented in
my book Re-imagine!) * * * * *
ÒSecretsÓof Marketing toWomen
So women buy Òall the stuff.Ó The second Big Fact is that
...you heard it here first ...women and men are different 1.Show her ÒrealÓwomen and reliable scenarios.
in their approach to purchasing things.Trendspotting 2.Focus on connection and teamwork.
guru Faith Popcorn summarizes:ÒMen and women 3.Capture her imagination by using stories.
donÕt think the same way, donÕt communicate the 4.Make it multisensory.
same way, donÕt buy for the same reasons. He simply 5.Add the little extras.
wants the transaction to take place. SheÕs interested in 6.Tap the emotional power of music.
creating a relationship. Every place that women go, 7.Create customer evangelists.
they make connections.Ó In America's Competitive 8.Form brand alliances.
Secret:Women Managers, Judy Rosener adds,ÒWomen
speak and hear a language of connection and intima- Source: Lisa Johnson & Andrea Learned,DonÕtThink
cy, and men speak and hear a language of status and Pink:What Really Makes Women Buy and How to
independence. Men communicate to obtain informa- Increase Your Share of This Crucial Market
tion, establish their status, and show independence. * * * * *
Women communicate to create relationships, encour-
age interaction, and exchange feelings.Ó Let me be clear. I am on a mission here. But, alas,it has
little to do with social justice, or any other lofty aim.
These clear and compelling truths have structural
My aims are economic. I believe the Business
implications of the first order for enterprises. Faith Opportunity is enormous (womenÕs purchasing power
Popcorn and Lys MarigoldÕs bible on this, EVEolution:
in the U.S., consumer and business goods and services
The Eight Truths of Marketing toWomen,provides one combined, is about $6 trillion) ... and that damn few
of the few roadmaps for considering such fundamen- enterprises are embracing the Business Opportunity
tal realignment. Consider ÒTruthÓNo. 1:ÒConnecting
at the level of Fundamental Enterprise Realignment.
Your Female Consumers to Each Other Connects Them Further, I believe that those who shortchange this
to Your Brand.ÓÒThe ÔConnection ProclivityÕ in women
starts early,ÓPopcorn and Marigold write.ÒWhen opportunity are simply ... stupid.
asked,ÔHow was school today?Õ a girl usually tells her To conclude on a slightly less rancorous note, IÕll
mother every detail of what happened, while a boy
offer my summary remarks as they appear on a
might grunt,ÔFine.ÕÓ PowerPoint slide I use to conclude this segment
ItÕs good for a knowing laughÑandjillions of dollars of my presentations:
in revenue, if you get it right. Bottom line on this sam-
17
Everything You Need to Know About Strategy:A BakerÕs Dozen Eternal Verities Tom Peters1. Men and women are different. 4.The Boomer-Geezer cohort mostly wants to buy ...
2.Very different. experiences.(See No. 10 immediately aboveÑmore
3.VERY,VERY DIFFERENT. reinforcement for the notion I championed.)
4.Women & Men have a-b-s-o-l-u-t-e-l-y nothing in
common. 5. One more time:VERY FEW FIRMS ARE AGRESSIVELY
5.Women buy lotsa stuff. ADDRESSING THIS ISSUE-OPPORTUNITY. (ÒAddressingÓ
6.WOMEN BUY A-L-L THE STUFF. = Realigning ÒcultureÓto Embrace the Boomers-
7.WomenÕs Market = Opportunity No. 1. Geezers.)
8. Men are (STILL) in charge.
9. MEN ARE ...TOTALLY, HOPELESSLY CLUELESS ABOUT * * * * *
WOMEN. ÒMarketersÕattempts at reaching those over 50 have
10.WomenÕs Market = Opportunity No. 1. been miserably unsuccessful.No marketÕs motivations
and needs are so poorly understood.ÓÑPeter Francese,
Boomer Bonanza/Godzilla Geezer founding publisher, American Demographics
Hooray, time to pick on marketers again! Their pre- ÒFocused on assessing the marketplace based on lifetime
ferred mantra:ÒItÕs 18-44, stupid!ÓMy suggested Òvari- value (LTV),marketers may dismiss the mature market as
antÓ:Ò18-44 is stupid,stupid!Ó(Ah,that S-word, again ... headed to its grave.The reality is that at 60 a person in
Stupid.Well, canÕt be helped.) the U.S.may enjoy 20 or 30 years of life.Ó
ÑCarol Morgan & Doran Levy, Marketing to the
Start with the simple stats:The cherished (by stupid Mindset of Boomers and Their Elders
marketers) 18-44 ÒsegmentÓ will decline in population
by 1 percent in this first decade of the new century. ÒÔAge PowerÕwill rule the 21st century,and we are
On the other hand, the 55+ ÒsegmentÓin the U.S. will woefully unprepared.ÓÑKen Dychtwald, Age Power:
increase by a hearty 21 percent ... and the 55-64 bunch How the 21st CenturyWill Be Ruled by the New Old
will leap by a staggering 47 percent. (Yikes.) (Note:
ÒBoomers,Ó born between Õ46 and Õ64, number about * * * * *
78 million in the U.S.) (Note:These U.S. numbers pale
by comparison to the even more extreme aging stats So ... two enormous opportunities. Going wanting in 9
coming out of Western Europe and Japan.) (Note: out of 10 cases.Why? Is it more than stupidity?
Another designation comes from Wolfe and SnyderÕs
Ageless Marketing, quoted above; they offer the Ònew
customer majority,Ó the enormous-wealthy group who
are currently between age 44 and age 65.)
12.Are your leaders accessible? Do
they wear their passion on their sleeves?
To cut to the chase, hereÕs the story in brief:
Does integrity ooze out of every pore of
1.The numbers of people involved are ... enormous. the enterprise? Is ÒWe careÓ your implicit
motto?
2.The wealth of these people is ... staggering. (The 50+
group in the U.S. controls 70 percent, or $7 trillion, of MaybeÒWe careÓ didnÕt matter so much in the days of
our wealth.) traditional industrial enterprise. Perhaps the old bossÕs
mantra was more like ÒShow up. Shut up. Or starve.Ó
3.This is the first ÒagingÓgroup that ... refuses toÒact But now I think itÕs fair to say, morality aside,ÒWe careÓ
their ageÓÑa very cool thing for goods and services is ... Not Optional.
producers. (ÒSixty Is the New ThirtyÓÑAARPmagazine
cover in 2003.) A researcher at Nomura SecuritiesÕNomura Research
18
Everything You Need to Know About Strategy:A BakerÕs Dozen Eternal Verities Tom PetersInstitute said weÕve been through the Age of
13.Do you understand business
Agriculture and the Industrial Age.WeÕre in the Age of
Information Intensification, but on the horizon is the mantra #1 of the Õ00s: DONÕT TRY TO COM-
next (last?) stage:the Age of Creation Intensification. PETE WITH WAL*MART ON PRICE OR
CHINA ON COST? (And if you get this last
IÕd agree. And ... the point ... an Age of Creation idea, then see the 12 above!)
Intensification is as far away as one can imagine from
ÒShow up. Shut up. Or starve.ÓIn an Age of Creation ÒClients want either the best or the least expensive;
Intensification the bossÕs mantra (is he a boss?) is more there is no in between.ÓÑJohn Di Julius, Secret Service
like:ÒHelp! Please help! Please commit your heart and
soul and imagination to inventing clever and Business as usual is dead. And I, for one, say ...ÒHurray.Ó
(See above, #12:ÒShow up. Shut up. Or starve.Ó) John Di
wonderful services-solutions-experiences-dreams
come true. Join with me in inventing an Adventure, a Juius gets it. He is a wildly successful, wildly passionate
Quest worth your time and my time and our clientsÕ service-experience fanatic ... who runs a small chain of
beauty salons. He canÕt compete with Regis on price.
time and money.Ó(ÒBoss-as-beggar-supplicant-before-
the-alter-of-TalentÓ rather than Òboss-as-drill-sergeantÓ WhatÕsÒleftÓ: BE BETTER! BE BEST! BE ÒTHE ONLY ONES
WHO DO WHAT WE DO!Ó
comes to mind as an appropriate image.)
Do I paint an unrealistic picture? In a word ...no! John Di Julius wakes up in the morning with the same
issues (and opportunities) that confront GEÕs Jeff
Technology and globalization in all of their manifesta-
tions put organizational models and career models Immelt and IBMÕs Sam Palmisano when they roll out of
and leadership models up for grabs. (Media guru bed.ÒItÕs not your fatherÕs world.Ó(In ImmeltÕs case,ÒItÕs
not Jack WelchÕs world.Ó See #4 above on JeffÕs new-
Marshall McLuhan once said,ÒIf it works, itÕs obsolete.Ó
Soooo true of organizational arrangements, circa found commitment toÒbreath-taking, mind-blowing,
world-rattlingÓinnovation.)
2004.) The current winners I described above (UPS,
IBM, and Omnicom in business Òservices,Ó for instance)
are forging completely new paths to an unknown and In short: DONÕT TRY TO COMPETE WITH WAL*MART ON
PRICE OR CHINA ON COST.Try instead to be Òthe only
unknowable future.They will only progress if there is
True Partnership among all parties to the enterpriseÑ ones who do what we doÓÑwhether the tableau is a
1-person accountancy, a 10-chair beauty salon, a
workers (Talent!!), Best Sourcing alliances, Cool &
Pushy Clients, and the remaining minimalist super- 400,000-person behemoth, or your/my career as newly
structure. And such a True Partnership demands as a minted ÒBrand You.Ó
My bottom line: HOW SWEET IT IS!
price of entry (a minimal reason for Seriously Cool
Talent toÒsign upÓ): Unstinting Integrity,Total
Cubicle slavery is on its last legs.
Transparency, Passion-on-our-sleeves, and Spirit to
burn (remember Steve Jobs:ÒLetÕs make a dent in the Commodity strategies are by and large bankrupt.
universeÓ). Once more, I remind: IÕm not suggesting the Passion and commitment matter most.
Creativity wins.
above because I think itÕs ÒcoolÓor ÒrightÓor Ògood.Ó IÕm
ÒsuggestingÓ(demanding!) such an approach because The individual reigns.
thereÕs not much likelihood that you can do otherwise WeÕre on our own.
and survive in a truly global, technology-rich,
ambiguity-laden Òage of creation intensification.Ó (Ben Franklin would chuckle with delight!)
(Henry Ford would be horrified!)
Q.E.D.
19
Everything You Need to Know About Strategy:A BakerÕs Dozen Eternal Verities Tom Peters