American Skandia

Leaders Council

Ojai/03.04.00

Only in Palo Alto …

CLASSIFIED AD:

WILL TRADE Domain name “thiswiredhouse.com” or “etake-

out.com” for Palo Alto living situation. Panet@nanospace.com

Source: San Jose Merc (3-22-00)

Pentium III 800MHz: $42,893.00/#Hermes Scarf: $1,964.29

Saving Private Ryan on DVD: $874.75Mercedes-Benz: $18.98Hot-rolled steel: $0.19

Source: Fortune (3.20.00)

No Wiggle Room!

“Incrementalism is innovation’s worst

enemy.” Nicholas Negroponte

Just Say No …

“I don’t intend to be known as the ‘King of the

Tinkerers.’ ”CEO, large financial services company

(New York, 5-99)

64/24

Goal?

“It means nothing less than the total

reinvention of this company.”

Jacques’ New New Ford

Ford + MSN CarPointFord + Yahoo!Ford + Oracle

Ford + HP/MCIWorldcomEtc.Etc.

TP2000: A Broken Record

GE Power SystemsAnheuser Busch

FitLinxxYellow Freight

FidelityTime Inc.

WebTotal ReinventionConsumer Control

SpeedTerror/

OpportunityBrand Power/

Communication Imperative

“There is probably going to be more confusion in

the business world in the next decade than there has been in any decade

in history.”Steve Case (2-00)

“We are in a

brawl with no rules.”

Paul Allaire

Forces @ Work

The Destruction Imperative!

Forget > Learn

“The problem is never how to get new, innovative thoughts into your mind, but how to get old ones out.”

Dee Hock

“It is generally much easier to kill an

organization than change it

substantially.” Kevin Kelly, Out of Control

Q: What do you do when you are a big,

dopey company and out of ideas?

A: You merge with another big,

dopey company that doesn’t

have any ideas either.

R: An incredibly big, incredibly dopey company

… going nowhere.

“When asked to name just one big merger that had lived up to

expectations, Leon Cooperman, former cochairman of Goldman

Sachs’ Investment Policy Committee, answered: ‘I’m sure there are success stories out there, but at this moment I

draw a blank.’ ”

Mark Sirower, The Synergy Trap

“Acquisitions are about buying market share. Our challenge is to create markets. There is a big difference.”

Peter Job, CEO, Reuters

“Our ideal acquisition is a small startup that has a great technology product on the drawing board that is going to come out in six to twelve months. We buy the engineers and the next generation product. …” John Chambers, Cisco

“R & D”

Intel’s venture fund: 275 investments, $3.5B

Source: Fast Company (12-99)

C.E.O. to

C.D.O.

The Gales of Creative Destruction

+29M = -44M + 73M

+4M = +4M - 0M

Paradox Redux

Atlanta: +113,600 = #1 metro area

Layoffs [major]: BellSouth, Lockheed, Coca-Cola

Brand Inside

Brand Org!

And Now the Equivalent …

White Collar Revolution!

108 X 5vs.

8 X 1*

* 540 vs. 8

“The coefficient of friction associated with the grunge

of business is amazing!”

Michael Schrage

And …

50M @ $20,000 = $1T*

*Michael Dertouzos, MIT, on India’s “back office” outsourcing potential

[02-08-00/Delhi]

The Pincer 5

“Destructive” entrepreneurs/ Global Competition

“White Collar Robots”

THE INTERNET! [E.g.: GM + Ford + DaimlerChrysler]

Global Outsourcing [E.g.: India, Mexico]

Speed!!

“Assetless Company”

J.B.

RR on Sara Lee

“The most profitable businesses in the future will act as knowledge brokers, linking insights into what’s available

with insights into the customer’s individual needs

and preferences.”

The “&-!!+#$% in the middle”*

Jim Clark on Healtheon/WebMD

* ’twixt docs, patients and providers; $300B in waste (?); source: Michael Lewis,

The New New Thing

“We want to be the air traffic controllers

of electrons.”Bob Nardelli,

GE Power Systems

PSF 1.0

Professional Service Firm Conversion Kit /

Release 1.0

PSF 1.0

Department Head

to …

Managing Partner, HR [IS, etc.] Inc.

Why are there no books on how to create

a “Cool, Rocking, WOW-producing

Finance Department”?

C.I.O. to

C.E.F.R.N.S.*

*Chief Evangelist For

Really Neat Stuff

Culture Change is not “Corporate.”Culture Change is not a “Program.”

Culture change does not take “Years.”Culture Change does not start “Today.”

Culture Change starts Right Now!Culture Change

Lives in the Moment!Culture Change is

Entirely in Your Hands!

Brand Inside

Brand Work!

“Reward excellent failures. Punish

mediocre successes.”

Phil Daniels, Sydney exec

But Does It Matter ????

“On time, on budget … who cares?”

anon. seminar participant (4/99)

“You really got to me. So many of our information technology projects take on a life of their own, and I know they’ll never end up as more than ‘mediocre successes.’ ”

CEO, F100 financial services company (10-98)

Kaiser: 4.15.29

Liberty Ship

2 years

240 days

9 hours

4 days, 15 hours, 29 minutes

[Just Say “No” to …

S-t-r-e-t-c-h]

“Every project we take on starts with a question:

How can we do what’s never been done

before?”Stuart Hornery, CEO, Lend Lease

Characteristics of the “Also Rans”

“minimize risk” “respect the chain of command” “support the boss” “make budget”

Source: Fortune on “most admired global corporations” (10/26/98)

Brand Inside

Brand You!

DISTINCT … OR EXTINCT!

“If there is nothing very special about your work, no matter how hard you apply yourself, you won’t get noticed and that increasingly means you won’t get paid much, either.”

Michael Goldhaber, Wired

“If one quarter can’t make the journey, that’s the way it

has to be.”

Carly Fiorina (1-00/Forbes)

Personal “Brand Equity” Evaluation– I am known for [2 to 3 things]; next year at this time I’ll

also be known for [1 more thing].– My current Project is challenging me …– New things I’ve learned in the last 90 days include …– My public “recognition program”

consists of …– Additions to my Rolodex in the last 90 days include …

–My resume is discernibly different from last year’s at this time …

Icon Woman …

–Totally turned on by her work!–“It” matters / a WOW Project!–“It” is … COOL!–“It” is … BEAUTIFUL!–She is … in your face!–She is an … adventurer!–She is … CEO of her own life!

Icon Woman …

- She is … at least … a little funky!–Her curiosity is … insatiable!–She thinks screwups are …

as normal as breathing!–She hangs out with some …

seriously rad Dudes!–She is not God. She is not Bionic

Woman. She is … determined to make a damned difference!

“Well-behaved women rarely make history.”

Anita Borg, Institute for Women and Technology

Icon Woman Meets the Web …– submits resume on the Web– recruited on the Web– hired on the Web– trained on the Web– creates and conducts projects with

virtual teams on the Web– manages project and client

follow-up on the Web– manages career/reputation-building

on the Web

“Rules” … per the Cluetrain Manifesto

Relax!Have a sense of humor!

Find your voice and use it!Tell the truth!Don’t panic!

Enjoy yourself!Be Brave!

Be curious!Play more!

Dream always!Listen up!Rap on!

Brand Inside

Brand Talent!

Issue Y2K

The Great War for Talent!

There is no “talent shortage” …

if …

you are a GPTW*

*Great Place To Work

Alan Kay on PARC’s Bob Taylor

“He was a connoisseur of

talent.”

“Our business needs a massive transfusion of talent. And talent, I believe, is most likely to be found among non-conformists, dissenters and rebels.” David Ogilvy

The NAESP …

Attributes of Those Who “Made” the 10th Grade History Book

–Committed!–Determined to make a difference!–Focused!–Passionate! –Irrational about their life’s project!–Ahead of their time / Paradigm

busters!–Impatient! / Action Obsessed

Attributes of Those Who “Made” the 10th Grade

History Book –Made lots of people mad!

–Flouted the chain of command!

–Creative / Quirky / Peculiar! / Rebels! / Irreverent!

–Masters of improv / Thrive on chaos / Exploit chaos!

Attributes of Those Who “Made” the 10th Grade History Book

–Forgiveness > Permission

–Bone honest!

–Flawed as the dickens!

– “In touch” with their followers’ aspirations

–Damn good at what they do!

Just Say “No” to “Grout”!

Participant: “Don’t you need ‘grout’ between the tiles?”

TP: “No!” [med staff, NFL Special Teams,waiters,

PFCs, cymbals player, bit parts, waiters]

Talent = Brand

Brand Outside=

Brand Inside

Brand Outside

Context:

No “Commodities”!

In the Beginning …

“The audit has become a commodity.”

Big 5 audit partner to TP

Quality Not Enough!

“Quality as defined by few defects is becoming the price of entry for automotive marketers rather than

a competitive advantage.”

J.D. Power

Quality Not Enough!

“While everything may be better, it is also increasingly

the same.”

Paul Goldberger on retail, “The Sameness of Things,” The New York Times

What’s Special?

“Customers will try ‘low cost providers’ because the Majors have not given them any clear

reason not to.”

Leading Insurance Industry

Analyst (10-98)

“We make over three new product announcements a

day. Can you remember them?

Our customers can’t!”Carly Fiorina

“The ‘surplus society’ has a surplus of similar companies, employing similar

people, with similar educational backgrounds, working in similar jobs,

coming up with similar ideas, producing similar things, with similar

prices and similar quality.”

Kjell Nordstrom and Jonas Ridderstrale, Funky Business

The “10X/10X Phenomenon”

10 Times Better/

10 Times Less Different

“When we did it ‘right’ it was still pretty

ordinary.”

Barry Gibbons on

“Nightmare No. 1”

Nirvana!

- Nordstrom- Ritz Carlton

- Adirondack Guide Boat- OXO

- Ziplocs- Magnificent Mile

Why?

Cool!/Surprising!Reliable!

Friendly!/Comfortable!Aesthetically pleasing!

Pretzel Crumb-less-ness Plus …

“The Ritz Carlton Experience enlivens the senses, instills

well-being and fulfills even the unexpressed wishes and needs of

the guest.”

from the Ritz Carlton Credo

“customer satisfaction” to “customer success”[e.g.: commissioning of plant,

not delivery of equipment]

Source: GE Power Systems

Brand Outside

Strategy 1:

Lead the Customer!

“The customer is a rear view mirror, not a guide to the future.”

George Colony, Forrester Research

“If you worship at the throne of the voice of the customer, you’ll get only

incremental advances.”Joseph Morone, President, Bentley College

Good = Bad/ 1 of 30,000

“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

“Wealth in this new regime flows directly from innovation, not

optimization. That is, wealth is not gained by perfecting the known,

but by imperfectly seizing the unknown.”

Kevin Kelly, New Rules for the New Economy

Amen!

“The Age of the Never Satisfied

Customer”Regis McKenna

Brand Outside

Strategy 2:

Use E-Commerce

to Re-invent the Business!

$35,000,000. = ???

Dell’s Web sales … daily

2X = 100 days (Internet traffic)

2X = 9 months (network capacity)

Source: Red Herring (1-00)

Tomorrow Today: Cisco!

$7B of $10BSave $500M (service and tech

support)

C.Sat e >> C.Sat HCustomer Engineer Chat Rooms ($1B?)

B2B

1999 – 2004: 50X

2004: $7.4Source: GartnerGroup (per Reuters 1-26-00)

T

GM/Ford/DaimlerChrysler (02-27)

Auto parts supply “Co.”$240B (+$500B)

I.P.O.

B2B = No.1

CarStation (auto-body shops), ChemConnect (chemicals),

Collabria (commercial printing), DigitalThink (corporate training), E-Steel (steel), Medibuy (medical

supplies), Portera (knowledge workers), Etc., Etc., Etc., Etc.

Welcome to

D.I.Y. Nation!“Changes in business processes will emphasize self service. Your costs as

a business go down and

perceived service goes up because customers are conducting it

themselves.” Ray Lane, Oracle

Shop in your Underwear

Source: SM’d logo for www.ae.comae = American Eagle Outfitters

Psych 101: Strongest Force on Earth?

My need to be in perceived control of

my universe!

Patricia Seybold’s “Basics”:The E-Customer Bill of Rights

Don’t waste my time!Remember who I am!

Make it easy for me to order and procure service!

Customize your products and services for me!

Source: customers.com

Anne Busquet/ American Express

Not: “Age of the Internet”

Is: “Age of Customer Control”

“In the network economy, the Website becomes the company’s primary interface to the customer.

The user interface becomes the marketing materials, store front,

store interior, sales staff and post-sales support all rolled into one.”

Jakob Nielsen, Designing Web Usability

“Most companies would do more business on the Internet if they

fired their entire marketing department and replaced it with

people who could produce interactive content that actually made it easier for users to buy.”

Jakob Nielsen, Nielsen Norman Group

Red Herring (01/00)

75% of online shoppers don’t complete their

purchase!

“Where does the Internet rank in priority?

It’s No. 1, 2, 3, and 4.” Jack Welch

There are 2 Kinds of …

Defense*

vs.

Offense**

*Fend off upstarts.**Reinvent our marketspace!

“E-business is the final nail in the coffin

for bureaucracy at GE.”

Jack Welch/GE Annual Report 2000

[ Words to Live By …

“Hierarchy is an organization with its face

toward the CEO and its ass toward the customer.”

Kjell Nordstrom and Jonas Ridderstrale, Funky Business]

Jargon Bath!

Bureaucracy free …Systemically integrated …

Internet intense …Knowledge based …

Time and location free …“Instantly” responsive …

Customer centric …Mass customization enabled.

Translation …

Bureaucracy free = Flat org, no B.S.Systemically integrated = Whole supply chain

tightly wired/ friction freeInternet intense = Do it all via the Web

Knowledge based = Open accessTime and location free = Whenever, wherever

“Instantly” responsive = Speed demonsCustomer centric = Customer calls the shotsMass customization enabled = Every product

and service rapidly tailored to client requirements

Getting Right Down to Brass Tacks …

Bricks & Mortar?

Clicks & Mortar?

All Clicks All the time?

#1: ANY IDIOT WHO THINKS CONSUMERS ARE GOING

TO GIVE UP THE IN-STORE SHOPPING

EXPERIENCE FOR THE INTERNET IS JUST THAT.

AN IDIOT.

#2: ANY IDIOT WHO THINKS WE ARE STILL GOING TO

BE HANGING OUT IN STORES 15 YEARS FROM

NOW IS JUST THAT. AN IDIOT.

TP: ANY IDIOT WHO THINKS THEY KNOW WHICH ONE

OF THE ABOVE TWO STATEMENTS IS TRUE IS

JUST THAT. AN IDIOT.

Brand Outside

Strategy 3:

Women Rule!

?????????

Home Furnishings … 94%Vacations … 92%

Houses … 91%Bank Account … 89%

Health Care … 75%Etc.

48% working wives > 50%80% checks

61% bills53% stock (mutual fund boom)

43% > $500K95% financial decisions/

29% single handed

Women … 49% of Web users; 6 of 10 new users; 83% of wired women are primary decision makers for family healthcare,

finances, education.

Source: Business Week (11-99)

$3.3T + $1.5T = $4.8T*

* Larger than Japan!

Most Under-reported story!

9M*/28M(1 of 4)/$3.6T [> Germany]

* 400K in ’72; 132% since ’92

Sources: NFWBO, Cognetics, Business Wire (030600)

Yeow!

1970 … 1%

2000 … 50%

Carol Gilligan/ In a Different Voice

Men: Get away from authority, familyWomen: Connect

Men: Self-orientedWomen: Other-oriented

Men: RightsWomen: Responsibilities

FemaleThink/ Popcorn

“Men and women don’t think the same way, don’t communicate the same

way, don’t buy for the same reasons.

“He simply wants the transaction to take place. She’s interested in creating a relationship. Every place women go,

they make connections.”

Women and Healthcare

Women are … more dissatisfied, frustrated by the way they are treated

and spoken down to by physicians, seek more information, are more pressed for time … and make 75% of health care decisions and control 2/3 of health care $

$$$ [and constitute 2/3 of health care employees].

Source: Patricia Braus, Marketing Healthcare to Women

Women and Financial Advisors

Women want … a plan, to be listened to, to be taken seriously, to read about it, to think about it.

Women do not want … an in-your-face sales pitch

Source: Kathleen Boyle, Wheat Boyle Butcher Singer

Marketing to Women: Help Them Save Time!

80% … work86% … cook

58% … run errands with kids38% … take child to school

21% … go to the gym21% … take outside classes

How Many Gigs You Got, Man?

“Hard to believe … Different criteria”

“Every research study we’ve done indicates that women really care about the relationship with their

vendor.”

Robin Sternbergh/ IBM

Not!!

“Year of the Woman”

Enterprise Reinvention!

RecruitingHiring/Rewarding/ Promoting

Structure Processes

MeasurementStrategyCulture Vision

Leadership

THE BRAND ITSELF!

“What kind of car does Mommy want?”

“I didn’t know [company] were giving

company cars to secretaries.”

Source: UK financial services CEO, 12/99

Not a Morality Play!

“It is critical that we all understand that IBM is not marketing to women

entrepreneurs because it is the thing to do, or even the right thing to do.

We are marketing to women entrepreneurs because it is a huge

opportunity.”

Cherie Piebes

Speaking of Enormous

[Missed] [Huge] Opportunities ...

74/55

“At each stage of their lives, the needs and desires of the baby

boomers have become the dominant concerns of American business and popular culture. If you can anticipate

the movement of the baby-boom generation’s life-span migration, you

can see the future.”Ken Dychtwald, Age Wave

Aging/“Elderly”

2X growth rate$$$$$$$$$$$$

“I’m in charge!”“Experiences” vs. Products

Design revolution!

Good source: Ken Dychtwald, Age Wave

1965: “ ‘Doctor’ will see you now. ‘Doctor’ will take care of you.”

YES, NURSE. ME GOOD PUPPY DOG.

1995: “HMO will take care of you.”

BULLSHIT.

2005: “I will take care of me. I’d like your expert help.”

P.S.: THE VIAGRA [ETC.] I ORDERED ON LINE IS GREAT.

Patient-centric* Health Care

Wellness (Fix to prevent.)

Partnership (“Tour guide” model.)

RESPECT! (Mutual.)

WOMEN RULE!

*Not: HMO-centric, Employer-centric, Insurer-centric, Doc-centric

Brand Outside

Strategy 4:

It’s the Experience!

“Experiences are as distinct from services as services are from

goods.”Joseph Pine & James Gilmore, The

Experience Economy: Work Is Theatre & Every Business a Stage

“The [Starbucks] Fix” Is on …

“We have identified a ‘third place.’ And I really believe that sets us apart. The third place is

that place that’s not work or home. It’s the place our

customers come for refuge.”Nancy Orsolini, District Manager

Experience: “Rebel Lifestyle!”

“What we sell is the ability for a 43-year-old accountant to dress in black leather, ride through small towns and have people be afraid

of him.”

Harley exec, quoted in Results-based Leadership

Mantra: “Any good can be ing-ed”

the driving experiencethe pumping experience

the sitting experiencethe reading experiencethe washing experiencethe cooking experience

Joseph Pine & James Gilmore, The Experience Economy: Work Is Theatre & Every Business a Stage

Brand Outside

BRAND POWER!

Brand It! Now, More Than Ever!

“The increasing difficulty in differentiating between products and

the speed with which competitors take

up innovations will assist in the rise and rise of the brand.”

Gillian Law and Nick Grant, Management [New Zealand]

No Room for Brands?

NikeSaturnCNN

America OnlineCharles Schwab

StarbucksThe Gap

IntelEtc.

“Branding is not a problem if you have the right mentality. You go to your team and

you pin up a $200 Swiss Army Watch. Competing in the ridiculously crowded

sub-$200 watch market, they made it into a brand name, named after the most

irrelevant and useless thing in history [the Swiss Army]. And you say, ‘Gang, if they

can do it, we can do it.’ ”

Barry Gibbons

“Corporate Religion is a completely new way of thinking about companies. Today, the product is still the main communication

highway in the company. When companies make the shift to selling solutions, brands and attitudes … communicating the company’s

attitudes and values becomes the decisive parameter for success. It

demands that you find out who you are as a company.”

Jesper Kunde, Corporate Religion

Where’s the Corporate Shrink!

“Organizational Psychotherapy”/

WHO WE ARE!

Brand = You Must Care!

“Success means never letting the competition define you. Instead you have to define

yourself based on a point of view you care deeply about.”

Tom Chappell, Tom’s of Maine

“We are in the twilight of a society based on data. As information and intelligence become the domain of computers, society will place more value on the one human ability that cannot be automated: emotion.

Imagination, myth, ritual - the language of emotion - will affect everything from our purchasing decisions

to how we work with others. Companies will thrive on the basis of their stories and

myths. Companies will need to understand that their products are less important than their stories.”

Rolf Jensen, Copenhagen Institute for Future Studies

“In the funky village, real competition no longer revolves

around marketshare. We are competing for attention –

mindshare and heartshare.”Kjell Nordstrom and Jonas Ridderstrale,

Funky Business

Brand Leadership

Lead Out Loud!

Brand Leadership!

“A key – perhaps the key – to leadership is the effective

communication of a story.”

Howard Gardner Leading Minds: An Anatomy of Leadership

“Leadership is a performance. You have to be

conscious of your behavior, because everybody else is.”

Carly Fiorina

Ann Richards’ Dogma

Show up!

Know your message!

PUT YOURSELF AT RISK EVERY DAY!