InnoTac/Act:Innovation Tactics/A Bias for Action

Tom Peters/InnoTac+Act.0622.06

PART ONE:INNOVATION

TACTICS

Tom Peters on …

Innovation tactics

Premises I

“A focus on cost-cutting and efficiency has helped many organizations weather the

downturn, but this approach will ultimately

render them obsolete. Only the constant pursuit of

innovation can ensure long-term

success.” —Daniel Muzyka, Dean, Sauder School of Business,

Univ of British Columbia (FT/09.17.04)

“Forbes100” from 1917 to 1987: 39 members of the Class of ’17 were

alive in ’87; 18 in ’87 F100; 18 F100 “survivors” underperformed the

market by 20%; just 2 (2%), GE &

Kodak, outperformed the market 1917 to 1987.

S&P 500 from 1957 to 1997: 74 members of the Class of ’57 were alive in ’97; 12 (2.4%) of 500 outperformed the market from

1957 to 1997.

Source: Dick Foster & Sarah Kaplan, Creative Destruction: Why Companies That Are Built to Last Underperform the Market

“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

More than $$$$

#1 R&D spending,

last 25 years?

GM

“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

Premises II

What “We” Know “For Sure” About Innovation

Big mergers [by & large] don’t workScale is over-rated

Strategic planning is the last refuge of scoundrelsFocus groups are counter-productive“Built to last” is a chimera (stupid)

Success kills“Forgetting” is impossible

Re-imagine is a charming idea“Orderly innovation process” is an oxymoronic phrase

(= Believed only by morons with ox-like brains)“Tipping points” are easy to identify … long after they will do you any good

“Facts” aren’tAll information making it to the top is filtered

to the point of danger and hilarity“Success stories” are the illusions of egomaniacs (and “gurus”)

If you believe the memoirs of CEOs you should be institutionalized“Herd behavior” (XYZ is “hot”) is ubiquitous

… and amusing“Top teams” are “Dittoheads”

CEOs have little effect on performance“Expert” prediction is rarely better than rolling the dice

Try It

“This is so simple it sounds stupid, but it is amazing how few oil people really

understand that you only find oil if you drill wells. You may

think you’re finding it when you’re drawing maps and

studying logs, but you have to drill.”

Source: The Hunters, by John Masters, Canadian O & G wildcatter (80%)

“While many people big oil finds with big companies, over the years

about 80 percent of the oil found in the United States has been

brought in by wildcatters such as Mr Findley, says Larry Nation,

spokesman for the American Association of Petroleum

Geologists.” —WSJ, “Wildcat Producer Sparks Oil

Boom in Montana,” 0405.2006

“We made mistakes. 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 No. 5. By the time our rivals are ready with wires and screws, we are on

version No. 10. It gets back to planning versus acting: We

act from day one; others plan how to plan—for months.”

—Bloomberg by Bloomberg

“The secret of fast progress is

inefficiency, fast and furious and

numerous failures.”

—Kevin Kelly

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

Michael Schrage

“We are in a brawl with

no rules.” —Paul Allaire

S.A.V.

Screw Around Vigorously

Screw It Up

“Fail faster. Succeed sooner.”

David Kelley/IDEO

Fail. Forward.

Fast.

–High-tech Exec/PA

“FAIL, FAIL AGAIN. FAIL BETTER.”

—Samuel Beckett

“Reward excellent failures.

Punish mediocre

successes.”Phil Daniels, Sydney exec

Read This!

Richard Farson & Ralph Keyes:

Whoever Makes the Most Mistakes Wins: The Paradox

of Innovation

Sam’s Secret

#1!

“Tom, very simple. Sam was

not afraid to fail.” —David Glass to TP, on the occasion of

Sam’s induction into The Sales & Marketing Hall of Fame

Plan B

"I think it is very important for you to do two things: act on your temporary conviction as if it was a

real conviction; and when you realize that you are

wrong, correct course very quickly.” —Andy Grove

“The most successful

people are those who

are good at plan B.”

—James Yorke, mathematician, on chaos theory in The New Scientist

Parallel Universe

Build a “School on top of a school” (The Parallel

Universe Strategy)

B.School Innovation Strategies: Exec Ed/Continuing Ed (fewer restraints).

Web (fewer restraints). “Parallel Universe” approach (JKC/Bob S)!

Recruit “weird” (in places you can get away with it—eg, students,

continuing ed faculty lesser admin jobs)!

Message: LOOK FOR/EXPLOIT THE “WEAK” (Unregulated) SPOTS!

JKC

Jill Ker Conway/Smith

1. Scour for renegades; wine & dine.

2. Go outside for funds.

Change? Ha! Try: End Run! Build Your Own! Period!

“We’re never going to persuade the

conservatives to accept [our view]. We

need to build our own institutions.” —anon.

Parallel Universe/

Venture Fund

“Venture” fund (E.g. Gerstner/Amex,

Dow/Marriott, Grove/Intel, Bedbury/Starbucks)

2/50**Scott Bedbury/Starbucks/<1%/<4 of 400/ grabbed best/all wanted to be there/2%-50%

Shell

“Game Changer”

10% of technical budget “set aside and used to fund

promising but nontraditional ideas through a staged

funding process similar to that used by venture capitalists”

Source: Financial Times/08.2003

We Are What

We Eat

We become who we hang

out with!

Measure “Strangeness”/Portfolio Quality

StaffConsultants

VendorsOut-sourcing Partners (#, Quality)

Innovation Alliance PartnersCustomers

Competitors (who we “benchmark” against)

Strategic Initiatives Product Portfolio (LineEx v. Leap)

IS/IT ProjectsHQ LocationLunch Mates

LanguageBoard

Requirement: Discomfort

“I’m not comfortable unless I’m

uncomfortable.”—Jay Chiat

Find ’em

“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 already doing things differently and

better. To create lasting change, find these areas of positive deviance and fan the flames.” —Richard Tanner

Pascale & Jerry Sternin, “Your Company’s Secret Change Agents,” HBR

Sing Them

Demos! Heroes! Stories!

REAL Org Change: Demos & Models (“Model

Installations,” “ReGo Labs”)/ Heroes (mostly extant: “burned to

reinvent gov’t”)/ Stories & Storytellers (Props!)/

Chroniclers (Writers, Videographers, Pamphleteers, Etc.)/

Cheerleaders & Recognition (Pos>>Neg, Volume)/

New Language (Hot/Emotional/WOW)/ Seekers

(networking mania)/ Protectors/ Support Groups/

End Runs—“Pull Strategy” (weird alliances, weird

customers, weird suppliers, weird alumnae-JKC)/ Field “Real People” Focus (3 COs) (long way away)/

Speed (O.O.D.A. Loops—act before the “bad guys” can react)

C.f., Bob Stone, Lessons from an Uncivil Servant

Stories … Paint me a picture … Story

“infrastructure” … Demos … Quick prototypes …

Experiments … Heroes … Renegades … Skunkworks … Demo Funds … V.C. … G.M. … Roster … Portfolio … Stone’s

Rules … JKC’s Rules

“My mission is that of a mole—

my existence only to be known by upheavals.” —Jan

Morris, Fisher’s Face, Or, Getting to Know the Admiral

Org Structure

Core Mechanism:“Game-changing Solutions”

PSF (Professional Service Firm “model”/The Organizing Principle)

+

Brand You(“Distinct” or “Extinct”/The Talent)

+

Wow! Projects (“Different” vs “Better”/The Work)

Band of Brothers

(& Sisters!)

“Never doubt that a small group of

committed people can change the

world. Indeed it is the only thing that

ever has.” —Margaret Mead

Hard is soft.Soft is hard.

First-level Scientific Success

The smartest guy in the room wins”

Or …

First-level Scientific Success

FanaticismPersistence-Dogged Tenacity

Patience (long haul/decades)-Impatience (in a hurry/”do it yesterday”)

PassionEnergy

Relentlessness (Grant-ian)

EnthusiasmDriven (nuts!)

(Brutal?) CompetitivenessEntrepreneurialPragmatic (R.F!A.)

Scrounge (“gets” the logistics-infrastructure bit)

Master of Politics (internal-external)Tactical Genius

Pursuit of (Oceanic) Excellence!High EQ/Skillful in Attracting + Keeping Talent/Magnetic

Prolific (“ground up more pig brains”)

Egocentric

Sense of History-DestinyFuturistic-In the Moment

Mono-dimensional (“Work-life balance”? Ha!)

Exceptionally IntelligentExceptionally Clever (methodological shortcuts/methodological genius)

Luck

Hard is soft.Soft is hard.

“Most important,

he upped the energy level at Motorola.” —Fortune on Ed

Zander/08.05

4/40

4/40

De-cent-ral-iz-a-tion!

Ex-e-cu-

tion!

Ac-count-a-bil-ity!

6:15A.M.

Inno64: Innovation Strategies & Tactics

Parallel universe /Exec Ed v res MBAEnd run regnant powers/JKCFind done deals-practicing mavericks/Stone-ReGoBell curves2016 in 2006Non-industry benchmarkingEverything = PortfolioV.C.s all!Hot language/Wow-Astonish me-Insanely great-immortal-Make something greatLead customers/PW-EmbraerLead suppliers /Top decile R&DWeird alliancesMottos/Paul Arden (“Whatever You Think Think the Opposite”)Hire freaks/Enough weird people?Weird Boards!!!

CEO track record of Innovation (nobody starts at 45!)System/GE-Immelt“Strategic thrust overlay”CalendarBig Delta easier than SmallMBWA with freaks-weirdos/JKCMBWA/Boonies’ labsV.C.-formal/IntelAcquire weirdChildren’s crusadeOld farts crusadeGo Global at any sizeStop listening to customers Talent!/Unusual sources-Hire innovators-V.C.sEschew giant mergers

Remember: scale economies max out earlyAssisted suicide! (“Built to last” = Chimera-snare-delusion)Burn your press clippings“Forgetting” “strategy”Fire all strategic plannersTempo!Final product bears little relation to starting notionDesign! Design! Design! (“culture,” not program)All innovation: Pissed-off peopleGut feel rules!Focus groups suckWeird focus groups okayBe-Do philosophy

CelebrationsCulture-little as well as big Inno (“everyone-an-innovator”)Life = Wow ProjectsAcknowledge messiness-pursue serendipity (Blitzkrieg-Containers-Science-Jim Utterback)R.F.A.Culture of execution4/40: decentralization, execution, accountability, 615AMEVP (S.O.U.B.)/Systems-process “un-design”Diversity for diversity’s sakeWomen-Women-Women/customers (they “are the market,” not a “segment”)-leadersBoomers-Geezers (“all the money”)

CRO (Chief Revenue Officer) “culture”/top-line obsessedCIO (Chief INNOVATION Officer)LaughterFacility-space configurationExperiments-prototypes“Reward excellent failures. Punish mediocre successes.”Bizarrely high incentives (& penalties)We are what we eat/We are who we hang out with (E.g.: 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)

PART TWO:A BIAS FOR

ACTION

TP/BW/circa 1982 on BigCo Sin #1: “too much talk,

too little do”

TP circa 2006 on BigCo Sin #1: “too much talk,

too little do”

Excellence1982: The Bedrock “Eight Basics”

1. A Bias for Action2. Close to the Customer3. Autonomy and Entrepreneurship4. Productivity Through People5. Hands On, Value-Driven6. Stick to the Knitting7. Simple Form, Lean Staff8. Simultaneous Loose-Tight Properties”

Tom Peters on …

A Bias for

Action

CONTEXT

“It is not the strongest of the

species that survives, nor the most

intelligent, but the one most

responsive to change.” —Charles

Darwin

Pathetic!

“Ninety percent of what we call

‘management’ consists of making it difficult for people to get things done.” – Peter

Drucker

“Forbes100” from 1917 to 1987: 39 members of the Class of ’17 were

alive in ’87; 18 in ’87 F100; 18 F100 “survivors” underperformed the

market by 20%; just 2 (2%), GE &

Kodak, outperformed the market 1917 to 1987.

S&P 500 from 1957 to 1997: 74 members of the Class of ’57 were alive in ’97; 12 (2.4%) of 500 outperformed the market from

1957 to 1997.

Source: Dick Foster & Sarah Kaplan, Creative Destruction: Why Companies That Are Built to Last Underperform the Market

“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

A BIAS FOR ACTION

Excellence1982: The Bedrock “Eight Basics”

1. A Bias for Action2. Close to the Customer3. Autonomy and Entrepreneurship4. Productivity Through People5. Hands On, Value-Driven6. Stick to the Knitting7. Simple Form, Lean Staff8. Simultaneous Loose-Tight Properties”

“Never forget implementation

boys. In our work it’s what I call the ‘missing 98

percent’ of the client puzzle.” —Al

McDonald/McKinsey

“We have a ‘strategic plan.’ It’s

called doing things.” — Herb Kelleher

“This is so simple it sounds stupid, but it is amazing how few oil people really

understand that you only find oil if you drill wells. You may

think you’re finding it when you’re drawing maps and

studying logs, but you have to drill.”

Source: The Hunters, by John Masters, Canadian O & G wildcatter (80%)

“We made mistakes. 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 No. 5. By the time our rivals are ready with wires and screws, we are on

version No. 10. It gets back to planning versus acting: We

act from day one; others plan how to plan—for months.”

—Bloomberg by Bloomberg

"I think it is very important for you to do two things: act on your temporary conviction as if it was a

real conviction; and when you realize that you are

wrong, correct course very quickly.” —Andy Grove

S.A.V.

Screw Around Vigorously

Sam’s Secret

#1!

“Fail faster. Succeed sooner.”

David Kelley/IDEO

Fail. Forward.

Fast.

–High-tech Exec/PA

“Reward excellent failures.

Punish mediocre

successes.”Phil Daniels, Sydney exec

Boyd on TEMPO

“The most successful

people are those who

are good at plan B.”

—James Yorke, mathematician, on chaos theory in The New Scientist

He who has the quickest

O.O.D.A. Loops* wins!

*Observe. Orient. Decide. Act./Col. John Boyd

OODA Loop/Boyd Cycle

“Unraveling the competition” Quick Transients/Quick Tempo (NOT JUST

SPEED!) Agility “So quick it is disconcerting” [adversary over-reacts

or under-reacts] “Winners used tactics that caused the enemy to unravel before the fight” (NEVER

HEAD TO HEAD)

BOYD: The Fighter Pilot Who Changed the Art of War (Robert Coram)

“The stuff has got to be implicit. If it

is explicit, you can’t do it fast enough.” —John Boyd

BOYD: The Fighter Pilot Who Changed the Art of War (Robert Coram)

Tempo!*

70-10

*Boyd/O.O.D.A. Loops/Mike Leach/Texas Tech

70-10/Nebraska/Unk QB 643 yards K.State/ Linemen spread wide/All legals go out for pass/Defenders confused & tire (Boyd/Tempo is not speed/“Re-arrange the mind of the enemy”—T.E.

Lawrence)/ “By changing the geometry of the game, and pushing the limits of

space and time on the gridiron, Mike Leach is taking Texas Tech to some far out places.” —Michael Lewis (NY Times

Magazine, 12.04.05, on Mike Leach/Texas Tech)

“In war, delay is fatal.” —Napoleon

“The only way to whip an army is

to go out and fight it.” —Grant “ … demonstrating the tactic

that would become his hallmark: the immediate

move to seek out the enemy and attack him” —John Mosier,

on Grant “A good plan executed right now is far preferable to a ‘perfect’ plan executed next

week.” —Patton

Relentless!*

*Churchill, Grant, Patton, Welch, Bossidy, Nardelli (GE execs), UPS, FedEx, Microsoft/Gates-Ballmer, Eisner, Weill, eBay, Nixon-

Kissinger, Gerstner, Rice, Jordan, Armstrong

“This [adolescent] incident [of getting from point A to point B] is notable not only because it underlines

Grant’s fearless horsemanship and his determination, but also it is the first known example of a very

important peculiarity of his character: Grant had an extreme, almost phobic dislike of turning back and retracing his steps. If he set out for somewhere, he would get

there somehow, whatever the difficulties that lay in his way. This idiosyncrasy would turn out to be one the

factors that made him such a formidable general. Grant would always, always press on—turning back was not

an option for him.” —Michael Korda, Ulysses Grant

“METABOLIC MANAGEMENT”

The Leadership11

1. Talent Management2. Metabolic Management3. Technology Management4. Barrier Management5. Forgetful Management6. Metaphysical Management7. Opportunity Management8. Portfolio Management9. Failure Management10. Cause Management11. Passion Management

“The secret of fast progress is

inefficiency, fast and furious and

numerous failures.”

—Kevin Kelly

“Active mutators in placid times tend to die off. They are selected

against. Reluctant mutators in quickly

changing times are also selected against.”

—Carl Sagan & Ann Druyan, Shadows of Forgotten Ancestors

“How we feel about the evolving future tells us who we are as individuals and as a civilization:

Do we search for stasis—a regulated, engineered world? Or do we embrace

dynamism—a world of constant creation, discovery and competition? Do we value

stability and control or evolution and learning? Do we think that progress requires a central blueprint, or do we see it as a decentralized,

evolutionary process?? Do we see mistakes as permanent disasters, or the correctable

byproducts of experimentation? Do we crave predictability or relish surprise? These two poles, stasis and dynamism, increasingly

define our political, intellectual and cultural landscape.”

—Virginia Postrel, The Future and Its Enemies

“If things seem under control, you’re just not

going fast enough.” —Mario Andretti

“I’m not comfortable unless I’m

uncomfortable.”—Jay Chiat

“If it works, it’s

obsolete.”

—Marshall McLuhan

Bossidy on EXECUTION

“I saw that leaders placed too much emphasis on what some

call high-level strategy, on intellectualizing and

philosophizing, and not enough on implementation. People would agree on a project or initiative, and then nothing would come of it.” —Larry Bossidy

& Ram Charan/Execution: The Discipline of Getting Things Done

“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 Discipline of Getting Things Done

“Realism is the heart of execution.”

—Larry Bossidy & Ram Charan/Execution: The Discipline of Getting Things Done

“robust dialogue”

—Larry Bossidy & Ram Charan/ Execution: The Discipline of Getting Things Done

“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)

“The person who is a little less conceptual but is absolutely determined to succeed will usually find the

right people and get them together to achieve objectives. I’m not knocking education or looking for

dumb people. But if you have to choose between someone with a

staggering IQ and an elite education who’s gliding along,

and someone with a lower IQ but who is absolutely determined to succeed, you’ll always do better with the second person.” —Larry

Bossidy/Execution: The Discipline of Getting Things Done

Duct Tape Rules!

“Andrew Higgins, who built landing craft in WWII, refused to hire

graduates of engineering schools. He believed that they only teach

you what you can’t do in engineering school. He started off

with 20 employees, and by the middle of the war had 30,000

working for him. He turned out 20,000 landing craft. D.D.

Eisenhower told me, ‘Andrew Higgins won the war for us. He did

it without engineers.’ ”

—Stephen Ambrose/Fast Company

The Leader’s Seven Essential Behaviors

*Know your people and your business*Insist on realism*Set clear goals and priorities*Follow through*Reward the doers*Expand people’s capabilities*Know yourself

Source: Larry Bossidy & Ram Charan, Execution:

The Discipline of Getting Things Done

Action8/VPMR+/Peters on Bossidy*External Focus (Competitors/Customers)

*Realism/Truth-telling*Vision *Projects (Must add up to Vision) *Milestones*Commitment/Energy*RapidReview*Consequences (+/-)

M + P = V

TACTIC #1

Culture of Prototyping

“Effective prototyping may

be the most valuable core competence an

innovative organization can hope to have.”

Michael Schrage

EXCELLENCE.

4/40.

4/40

De-cent-ral-iz-a-tion!

Ex-e-cu-

tion!

Ac-count-a-bil-ity!

6:15A.M.

K.I.S.S.

450/8

“I wanted GE to operate with the speed, informality,

and open communication of a corner store. Corner

stores often have strategy right. With their limited resources, they have to

rely on laser-like focus on doing one thing very well.”

—Jack Welch/Fortune/04.05

Lee’s Rule: Run It off a

Blackberry!

“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 they try to be clever.” —Napoleon on Simplicity, from Napoleon on Project Management by Jerry

Manas.

BIAS

Excellence1982: The Bedrock “Eight Basics”

1. A Bias for Action2. Close to the Customer3. Autonomy and Entrepreneurship4. Productivity Through People5. Hands On, Value-Driven6. Stick to the Knitting7. Simple Form, Lean Staff8. Simultaneous Loose-Tight Properties”

Importance of Success Factors by Various “Gurus”/

Estimates (Unreliable) by Tom Peters

Strategy Systems Passion/ Execution

Leadership

Porter 45% 20 20 15

Drucker 35% 30 15 20

Bennis 20% 20 35 25

Peters 15% 20 30 35

MBWA

MBWA

25

Mark McCormack: 5,000 miles for a 5

min. meeting!

“The first and greatest imperative of command is to be present in person. Those who impose

risk must be seen to share it.”

—John Keegan, The Mask of Command

LET US MARCH

A man approached JP Morgan, held up an envelope, and said, “Sir, in my hand I hold a guaranteed formula for

success, which I will gladly sell you for $25,000.”

“Sir,” JP Morgan replied, “I do not know what is in the envelope, however if you show me, and I like it, I

give you my word as a gentleman that I will pay you what you ask.”

The man agreed to the terms, and handed over the envelope. JP Morgan opened it, and extracted a single

sheet of paper. He gave it one look, a mere glance, then handed the piece of paper back to the gent.

And paid him the agreed-upon $25,000.

1. Every morning, write a list of the things that need to be done that day.

2. Do them. Source: Hugh MacLeod/tompeters.com/NPR

Do them!

“In classical times when Cicero had finished

speaking, the people said, ‘How well he spoke,’ but when Demosthenes had finished speaking,

they said, ‘Let us march.’” —Adlai Stevenson

Let us march.

Nelson’s secret:

“[Other] admirals more frightened of losing than

anxious to win”

“A year from now you may wish

You had started today.”

—Karen Lamb

You only find oil if you drill

wells. —T he Hunters, by John Masters,

Canadian O & G wildcatter

TP/Chile: “I don’t know

if ‘it’ is possible.’ I do know it’s ‘necessary.’”