NOTENOTE:: To appreciateTo appreciate this presentation this presentation [and [and

insure that it is not ainsure that it is not a messmess],], you need Microsoft you need Microsoft

fonts:fonts:

“Showcard Gothic,”“Showcard Gothic,” “Ravie,”“Ravie,” “Chiller”“Chiller”

and and “Verdana”“Verdana”

Part 4Part 4Tom Peters’ Tom Peters’

EXCELLENCEXCELLENCE. ALWAYS.E. ALWAYS.

New Master/21 August 2008New Master/21 August 2008

Slides at …

tompeters.comtompeters.com

Ten PartsTen Parts

P1.1, P1.2, P1.3, P1.4/GenericP1.1, P1.2, P1.3, P1.4/GenericP2/LeadershipP2/LeadershipP3/TalentP3/TalentP4/“Value-added Ladder”P4/“Value-added Ladder”P5/“New” Markets P5/“New” Markets P6/“The Equations”P6/“The Equations”P7.1/ImplementationP7.1/ImplementationP7.2/ActionP7.2/ActionP8/13 “Guru Gaffes”P8/13 “Guru Gaffes”P9/Health“care”P9/Health“care”P10/“The Lists”P10/“The Lists”

part part fourfour

EXCELLENCE. EXCELLENCE.

VALUE ADDED.VALUE ADDED.UP THE LADDER.UP THE LADDER.

Up, Up, Up,

Up

the Value-added Ladder.

EXCELLENCE.EXCELLENCE.

VALUE-ADDED LADDER I.VALUE-ADDED LADDER I. SOLVE IT. SOLVE IT.

$55$55BB

California Closets:California Closets: “a “a whole-life upgrade, not whole-life upgrade, not just a tidy bedroom.”just a tidy bedroom.” —WSJ/0329.07, —WSJ/0329.07, “Why the Container-“Why the Container-

Store Guy Wants to Be Your Therapist”Store Guy Wants to Be Your Therapist”

I. LAN Installation Co. (3%)

II. Geek Squad. (30%.)

III. Acquired by BestBuy.

IV. Flagship of BestBuyFlagship of BestBuy Wholesale “Solutions” Wholesale “Solutions” Strategy Makeover. Strategy Makeover.

HuHuggee:: Customer

SatisfactionSatisfaction versus Customer

SuccessSuccess

“ ‘“ ‘Results’ are Results’ are measured by the measured by the

successsuccess of all those of all those who have purchased who have purchased

your product or your product or service”service” —Jan Gunnarsson & Olle Blohm, The —Jan Gunnarsson & Olle Blohm, The

Welcoming LeaderWelcoming Leader

““He had done nothing to sell me on his He had done nothing to sell me on his business, yet he had given me the most business, yet he had given me the most

powerful sales pitch of my life.powerful sales pitch of my life. Because Because his his sole sole concern had concern had been been mymy welfare and welfare and

the success of the success of mymy business.”business.”

—Jim Penman, on learning how to sell (—Jim Penman, on learning how to sell (What WillWhat Will They Franchise Next? The Story of Jim’s Group They Franchise Next? The Story of Jim’s Group))

The Value-added Ladder/ STUFF ‘N’ THINGSSTUFF ‘N’ THINGS

GoodsGoods Raw Materials Raw Materials

The Value-added Ladder/Stuff & TRANSACTIONSTRANSACTIONS

ServicesServicesGoods

Raw Materials

The Value-added Ladder/ OPPORTUNITY-SEEKINGOPPORTUNITY-SEEKING

Customer Success/ Customer Success/ Gamechanging Gamechanging

SolutionsSolutionsServicesGoods

Raw Materials

““The business of selling is not just about matching viable The business of selling is not just about matching viable

solutions to the customers that require them. solutions to the customers that require them. It’s It’s equally about managing the equally about managing the

change process the customer change process the customer will need to go through to will need to go through to

implement the solution and implement the solution and achieve the value promised achieve the value promised

by the solutionby the solution.. One of the key One of the key

differentiators of our position in the market is our attention to differentiators of our position in the market is our attention to managing change and making change stick in our customers’ managing change and making change stick in our customers’

organization.”organization.”* (*E.g.: CRM failure rate/Gartner: * (*E.g.: CRM failure rate/Gartner: 7070%)%) —Jeff Thull, —Jeff Thull, The Prime Solution: Close the Value Gap, The Prime Solution: Close the Value Gap,

Increase Margins, and Win the Complex SaleIncrease Margins, and Win the Complex Sale

The Value-added Ladder/ OPPORTUNITY-SEEKINGOPPORTUNITY-SEEKING

ImImpplementedlemented Gamechanging Gamechanging

SolutionsSolutionsServicesGoods

Raw Materials

EXCELLENCE.EXCELLENCE.

SOLVE IT.SOLVE IT. NO OPTION. NO OPTION.PSF. (PSF++)PSF. (PSF++)

Chicago:

HRMACHRMAC

““support function” / support function” / “cost center”/ “cost center”/ “overhead”“overhead”

oror … …

Are you … ““Rock Rock Stars of the Stars of the

AAgge of Talente of Talent””

Department Head

to …

ManaginManaging g

PartnerPartner, , ISIS [HR, R&D, etc.] IncInc..

Every job done Every job done in W.C.W. in W.C.W. [White Collar World][White Collar World]

is also done is also done “outside” …“outside” …for profit!for profit!

Core Mechanism:“Game-changing Solutions”

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

+

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

+

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

Series/Reinventing WorkSeries/Reinventing Work

The ProThe Projject 50ect 50:: Fifty Ways To Transform Fifty Ways To Transform Every “Task” Into A Project That MattersEvery “Task” Into A Project That Matters

The Professional Service Firm 50The Professional Service Firm 50:: Fifty Fifty Ways To Transform Your “Department” Ways To Transform Your “Department” Into A Professional Service Firm Whose Into A Professional Service Firm Whose Trademarks Are Passion And InnovationTrademarks Are Passion And Innovation

The Brand You 50The Brand You 50:: Fifty Ways To Fifty Ways To Transform Yourself From An “Employee” Transform Yourself From An “Employee” Into A Brand That Shouts Distinction, Into A Brand That Shouts Distinction, Commitment And PassionCommitment And Passion

Are you the …

““PrinciPrincippal al EnEnggineine of of

Value Added”Value Added”*E.g.: Your R&D budget as robust as the New Products team?

Agriculture Age (farmers)

Industrial Age (factory workers)

Information Age (knowledge workers)

Conceptual Age*Conceptual Age* (creators)

*Murakami Teruyasu: “Age of Creation Intensification”

Source: Dan Pink, A Whole New Mind

TheThe ““PSF35PSF35””:: Thirty-Five Thirty-Five

Professional Service Firm Professional Service Firm Marks of ExcellenceMarks of Excellence

The PSF35: The Work & The Legacy

1.1. CRYSTAL CLEAR POINT OF VIEWCRYSTAL CLEAR POINT OF VIEW

(E very Practice Group: “If you can’t explain your position in eight(E very Practice Group: “If you can’t explain your position in eight words or less, you don’t have a position”—Seth Godin)words or less, you don’t have a position”—Seth Godin)2. 2. DRAMATIC DIFFERENCEDRAMATIC DIFFERENCE (“We are the only ones who do what (“We are the only ones who do what we do”—Jerry Garcia)we do”—Jerry Garcia)3. Stretch Is Routine (“Never bite off less than you can chew”—anon.)3. Stretch Is Routine (“Never bite off less than you can chew”—anon.)4. Eye-Appetite for Game-changer Projects (Excellence at Assembling4. Eye-Appetite for Game-changer Projects (Excellence at Assembling “ “Best Team”—Fast) Best Team”—Fast) 5. “Playful” Clients (Adventurous folks who unfailingly Aim to Change5. “Playful” Clients (Adventurous folks who unfailingly Aim to Change the World)the World)6. Small “Uneconomic” Clients with Big Aims6. Small “Uneconomic” Clients with Big Aims7. Life Is Too Short to Work with Jerks (Fire lousy clients)7. Life Is Too Short to Work with Jerks (Fire lousy clients)8. 8. OBSESSED WITH LEGACYOBSESSED WITH LEGACY (Practice Group and Individual: “Dent the (Practice Group and Individual: “Dent the Universe”—Steve Jobs)Universe”—Steve Jobs)9. Fire-on-the-spot Anyone Who Says, “Law/Architecture/Consulting/9. Fire-on-the-spot Anyone Who Says, “Law/Architecture/Consulting/ I-banking/ Accounting/PR/Etc. has become a ‘commodity’ ”I-banking/ Accounting/PR/Etc. has become a ‘commodity’ ”10. Consistent with #9 above … 10. Consistent with #9 above … DO NOT SHY AWAY FROM THEDO NOT SHY AWAY FROM THE WORD (IDEA) “RADICAL”WORD (IDEA) “RADICAL”

Pointed Pointed Point of Point of View!View!

“Purchasing Officer” Thrust #1: Cost (at All Costs*) Minimization

Professional? Or/to: FullFull Partner-Partner-Leader in Lifetime Leader in Lifetime

Value-added Value-added MaximizationMaximization?

(*Lopez: “Arguably ‘Villain #1’ in GM tragedy”/Anon VSE-Spain)

Fleet Manager

Rolling Stock Cost Minimization Officer

vs/or

Chief of Fleet LifetimeChief of Fleet Lifetime Value Value MaximizationMaximization

StrategicStrategic Supply-chain Executive Supply-chain Executive

Customer Customer ExperienceExperience Director Director (via drivers)

HCare CIO: “Technology Executive” (workin’ in a hospital)

Or/to: Full-scale, Full-scale, AccountableAccountable (life or death)

Member-Partner of XYZ Member-Partner of XYZ Hospital’s Hospital’s Senior Senior HealinHealingg-Services -Services TeamTeam (who happens to be a techie)

Big Idea:

“Corporation” as “Corporation” as

Mega-“PSFMega-“PSF”” (Professional (Professional Service Firm*)Service Firm*)

* “Virtual” Collection of Entrepreneurially-minded Professionals (“Talent”/“Roster”)

Creating/Applying Intellectual Capital (“Work Product”)

Are you the …

““PrinciPrincippal al EnEnggineine of of

Value Added”Value Added”*E.g.: Your R&D budget as robust as the New Products team?

Up,Up, Up,Up, Up, Up,

UpUp

the Value-added Ladder.

EXCELLENCE.EXCELLENCE.

VALUE-ADDED LADDER II.VALUE-ADDED LADDER II. EXPERIENCE IT. EXPERIENCE IT.

““Experiences Experiences are as distinct are as distinct

from services as from services as services are from services are from goods.”goods.” —Joe Pine & Jim Gilmore, The

Experience Economy: Work Is Theatre & Every Business a Stage

“The [Starbucks] Fix” Is on …

“We have “We have identified a identified a

‘third place.’‘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

Warren Goes Warren Goes Shopping …Shopping …

QQ: : “Why did you buy “Why did you buy Jordan’s Furniture?”Jordan’s Furniture?”

AA: : “Jordan’s is “Jordan’s is

spectacular.spectacular. It’s all It’s all showmanship.showmanship.””Source: Warren Buffet interview/Source: Warren Buffet interview/Boston Sunday GlobeBoston Sunday Globe/12.05.04/12.05.04

Experience: “Rebel Lifestyle!”

“What we sell is the “What we sell is the ability for a 43-year-old ability for a 43-year-old accountant to dress in accountant to dress in

black leather, ride black leather, ride through small towns and through small towns and

have people be afraidhave people be afraid of him.” of him.”

HarleyHarley exec, quoted in Results-Based Leadership

The Value-added Ladder/ MEMORABLE CONNECTIONMEMORABLE CONNECTION

Spellbinding Spellbinding ExperiencesExperiences

Gamechanging SolutionsServicesGoods

Raw Materials

Beyond the “Transaction”/ “Satisfaction” Mentality

“Good hotel”/ “Happy guest”/ “Exceeded Expectations”

vs.

“Great “Great VacationVacation”/ ”/ “Great “Great ConferenceConference”/”/ “Operation “Operation PersonalPersonal

RenewalRenewal””

CCXXOO**Chief eXperience Officer

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

or FTE!or FTE!

““Car designers need to create aCar designers need to create a storstoryy. Every car provides an . Every car provides an

opportunity to create anopportunity to create an adventureadventure. . ……

“The Prowler makes you“The Prowler makes you smilesmile. . Why? Because it’s Why? Because it’s focusedfocused. It has a. It has a pplotlot, a reason for being, a, a reason for being, a ppassionassion.”.”

Freeman Thomas, co-designer VW Beetle; designer Audi TTFreeman Thomas, co-designer VW Beetle; designer Audi TT

Hmmmm(?): “Only” Words …Hmmmm(?): “Only” Words …

StoryStoryAdventureAdventure

Smile Smile FocusFocus

PlotPlotPassionPassion

““Most executives Most executives have no idea how to have no idea how to

add value to a add value to a market in the market in the

metaphysical world.metaphysical world. But that is what the market

will cry out for in the future. There is no lack of

‘physical’ products to choose between.”

Jesper Kunde, Unique Now ... or Never [on the excellence of Nokia, Nike, Lego, Virgin et al.]

Extraction & Goods: MaleMale dominance

Services &

Experiences: FemaleFemale dominancedominance

<TG<TGWWvs.vs.

>TG>TGRR[Things Gone [Things Gone WRONGWRONG/Things Gone /Things Gone RIGHTRIGHT]]

“Perfection is achieved only by institutions on the

point of collapse.”— C. Northcote Parkinson

3M’s Innovation3M’s Innovation Crisis: How Six Crisis: How Six Sigma Almost Sigma Almost

SmotheredSmothered Its Idea Culture Its Idea Culture

Source: Title/Cover Story, Source: Title/Cover Story, BWBW, 0611.07 (, 0611.07 (“What’s remarkable is “What’s remarkable is how fast a culture can be torn apart,”how fast a culture can be torn apart,” 3M lead scientist; “In 3M lead scientist; “In

an innovation economy, [6 Sigma] is no longer a cure all”/ an innovation economy, [6 Sigma] is no longer a cure all”/BWBW))

““What Rikyu What Rikyu demanded was demanded was not cleanliness not cleanliness alone, but the alone, but the

beautiful and the beautiful and the natural also.”natural also.” —Kakuzo —Kakuzo

Okakura, Okakura, The Book of TeaThe Book of Tea

““Rikyu was watching his son Sho-an as he Rikyu was watching his son Sho-an as he swept and watered the garden path. ‘Not clean swept and watered the garden path. ‘Not clean enough,’ said Rikyu, when Sho-an had finished enough,’ said Rikyu, when Sho-an had finished his task, and bade him try again. After a weary his task, and bade him try again. After a weary hour, the son turned to Rikyu: ‘Father, there is hour, the son turned to Rikyu: ‘Father, there is nothing more to be done. The steps have been nothing more to be done. The steps have been washed for the third time, the stone planters washed for the third time, the stone planters and the trees are well sprinkled with water, and the trees are well sprinkled with water, moss and lichens are shining with a fresh moss and lichens are shining with a fresh

verdure; not a twig, not a leaf have I left on the verdure; not a twig, not a leaf have I left on the ground.’ ‘Young fool,’ chided the tea-master, ground.’ ‘Young fool,’ chided the tea-master, ‘that is not the way a garden path should be ‘that is not the way a garden path should be swept.’ Saying this, Rikyu stepped into the swept.’ Saying this, Rikyu stepped into the garden, shook a tree and scattered over the garden, shook a tree and scattered over the

garden gold and crimson leaves, scraps of the garden gold and crimson leaves, scraps of the brocade of autumn! What Rikyu demanded was brocade of autumn! What Rikyu demanded was not cleanliness alone, but the beautiful and the not cleanliness alone, but the beautiful and the

natural also.”natural also.” —Kakuzo Okakura, —Kakuzo Okakura, The Book of TeaThe Book of Tea

2-cent 2-cent candy!candy!

PlanetreePlanetree:: A Radical Model for A Radical Model for

New New Healthcare/Healing/Healthcare/Healing/Wellness Wellness ExcellenceExcellence

"All sane persons agree that 'healthcare needs an overhaul.' And that's "All sane persons agree that 'healthcare needs an overhaul.' And that's where the agreement stops. Healthcare issues are thorny, and system where the agreement stops. Healthcare issues are thorny, and system

panaceas are about as likely as the sun rising in the West. But there is good panaceas are about as likely as the sun rising in the West. But there is good news here and there--and great news courtesy the Planetree Model.news here and there--and great news courtesy the Planetree Model.

  "In the midst of ceaseless gnashing of teeth over 'healthcare issues,' the "In the midst of ceaseless gnashing of teeth over 'healthcare issues,' the

patient and frontline staff often get lost in the shuffle. Enter Planetree. While patient and frontline staff often get lost in the shuffle. Enter Planetree. While oceanic systemic solutions remain out of reach, Planetree provides a oceanic systemic solutions remain out of reach, Planetree provides a

remarkable demonstration of what healthcare--with the patient at the remarkable demonstration of what healthcare--with the patient at the center--can be all about; and is all about among Planetree Alliance members.center--can be all about; and is all about among Planetree Alliance members.

  "I know this may sound ridiculous, but everything about the 'model' works. It "I know this may sound ridiculous, but everything about the 'model' works. It

is great for patients and their families--and is truly about humanity and is great for patients and their families--and is truly about humanity and healing and health and longterm wellness, not just a 'fix' for today's problem. healing and health and longterm wellness, not just a 'fix' for today's problem.

It is great for staff--Planetree-Griffin is rightly near the top of the 'best It is great for staff--Planetree-Griffin is rightly near the top of the 'best places to work in America' list, year in and year out. And Planetree also places to work in America' list, year in and year out. And Planetree also

works as a 'business model'--any effectiveness measure you can name is in works as a 'business model'--any effectiveness measure you can name is in the Green Zone at Griffith.the Green Zone at Griffith.

  "For 25 years my 'gig' has been 'excellence.' Put simply, there is no better "For 25 years my 'gig' has been 'excellence.' Put simply, there is no better

exemplar of customer-centered, employee-friendly excellence, in any exemplar of customer-centered, employee-friendly excellence, in any industry, than Griffin-Planetree. The Planetree model works--and in my industry, than Griffin-Planetree. The Planetree model works--and in my

extensive work in the health sector, I 'sell' it shamelessly, and pray that my extensive work in the health sector, I 'sell' it shamelessly, and pray that my clients are taking it all in."clients are taking it all in."

  tom peters/response to request for comment on Planetreetom peters/response to request for comment on Planetree

  

The 9 Planetree Practices

1.1. The Importance of Human InteractionThe Importance of Human Interaction2. Informing and Empowering Diverse Populations: Consumer Informing and Empowering Diverse Populations: Consumer Health Libraries and Patient Information Health Libraries and Patient Information3. Healing Partnerships: The importance of Including Healing Partnerships: The importance of Including Friends and Family Friends and Family4. Nutrition: The Nurturing Aspect of Food Nutrition: The Nurturing Aspect of Food5. Spirituality: Inner Resources for Healing Spirituality: Inner Resources for Healing6.6. Human Touch: The Essentials of Communicating Human Touch: The Essentials of Communicating Caring Through Massage Caring Through Massage7.7. Healing Arts: Nutrition for the Soul Healing Arts: Nutrition for the Soul8.8. Integrating Complementary and Alternative Practices Integrating Complementary and Alternative Practices into Conventional Care into Conventional Care9.9. Healing Environments: Architecture and Design Healing Environments: Architecture and Design Conducive to Health Conducive to Health

Source: Putting Patients First, Susan Frampton, Laura Gilpin, Patrick Charmel

The Patient-Family Experience

“Patients are stripped of Patients are stripped of control, their clothes are control, their clothes are

taken away, they have little taken away, they have little say over their schedule, and say over their schedule, and

they are deliberately they are deliberately separated from their family separated from their family

and friends. Healthcare and friends. Healthcare professionals control all of professionals control all of the information about their the information about their patients’ bodies and access patients’ bodies and access

to the people who can to the people who can answer questions and answer questions and

connect them with helpful connect them with helpful resources. Families are resources. Families are

treated more as intruders treated more as intruders than loved ones.”than loved ones.” —Putting Patients First,

Susan Frampton, Laura Gilpin, Patrick Charmel

Press Ganey Assoc: 139,380 former patients from 225 hospitals:

nonenone of THE top 15 factors of THE top 15 factors

determining determining PPatient atient SSatisfaction atisfaction referred to patient’s health referred to patient’s health outcomeoutcome

PSPS directldirectly related to y related to StaffStaff InteractionInteraction

PSPS directldirectly correlated with y correlated with Employee Employee SatisfactionSatisfaction

Source: Putting Patients First, Susan Frampton, Laura Gilpin, Patrick Charmel

“There is a misconception that supportive interactions require more staff or more time and are therefore more costly. Although

labor costs are a substantial part of any hospital budget, the interactions themselves add nothing to the budget.

Kindness is Kindness is freefree.. Listening to patients or answering their

questions costs nothing. It can be argued that negative interactions—alienating patients, being non-responsive to their needs or limiting their sense of control—can be very costly. …

Angry, frustrated or frightened patients may be combative, withdrawn and less cooperative—requiring far more time than it would have taken to interact with them initially in a

positive way.” —Putting Patients First, Susan Frampton, Laura Gilpin, Patrick Charmel

Care Partner ProgramsCare Partner Programs (IDs, discount meals, etc.)

Unrestricted visitsUnrestricted visits (“Most Planetree hospitals have eliminated visiting restrictions altogether.”) (ER at one

hospital “has a policy of never separating the patient from the family, and there is no limitation on how many family members

may be present.”)

Collaborative Care ConferencesCollaborative Care ConferencesClinical Guidelines DiscussionsClinical Guidelines Discussions

Family SpacesFamily SpacesPet VisitsPet Visits (POP: Patients’ Own Pets)

Source: Putting Patients First, Susan Frampton, Laura Gilpin, Patrick Charmel

Griffin: Music in the parking Music in the parking lot; professional musicians in lot; professional musicians in

the lobbythe lobby (7/week, 3-4hrs/day) ;

5 pianos5 pianos ;

volunteersvolunteers (120-140 hrs arts &

entertainment per month).

Source: Putting Patients First, Susan Frampton, Laura Gilpin, Patrick Charmel

“Planetree Look”

Woods and natural materialsWoods and natural materialsIndirect lightingIndirect lighting

Homelike settingsHomelike settings

Goals: Goals: Welcome patients, friends and Welcome patients, friends and family … Value humans over family … Value humans over

technology .. Enable patients to technology .. Enable patients to participate in their care … Provide participate in their care … Provide

flexibility to personalize the care of each flexibility to personalize the care of each patient … Encourage caregivers to be patient … Encourage caregivers to be

responsive to patients … Foster a responsive to patients … Foster a connection to nature and beautyconnection to nature and beauty

Source: Putting Patients First, Susan Frampton, Laura Gilpin, Patrick Charmel

Access to nurses station:

“Happen to”“Happen to”vs

“Happen with”“Happen with”Source: Putting Patients First, Susan Frampton, Laura Gilpin, Patrick Charmel

Conclusion: Conclusion: Caring/Growth Caring/Growth “Experience“Experience””

““It was the goal of It was the goal of PlanetreePlanetree to help to help

patients not only get patients not only get well faster but also well faster but also

to stay well longer.”to stay well longer.”

—Putting Patients First, Susan Frampton, Laura Gilpin, Patrick Charmel

(Planetree Alliance/Griffin Hospital)

Care!/Love!/Spirit!Care!/Love!/Spirit!

Self-Control!Self-Control!

Connect!/learn!/Connect!/learn!/involve!/Engage!involve!/Engage!

Understanding!/Growth! Understanding!/Growth!

De-stress!/heal! De-stress!/heal!

Whole patient & family Whole patient & family & friends! & friends!

be well!/stay well!be well!/stay well!

““Planetree is about Planetree is about human beings human beings caring for other caring for other

human beings.”human beings.”

——Putting Patients FirstPutting Patients First, Susan Frampton, Laura Gilpin,, Susan Frampton, Laura Gilpin, Patrick Charmel (“Ladies and gentlemen serving Patrick Charmel (“Ladies and gentlemen serving

ladies and gentlemen”—4S credo) ladies and gentlemen”—4S credo)

f.y.i.f.y.i.

Griffin Hospital/Derby CT (Planetree Alliance “HQ”) Results:

Financially successful. Financially successful. Expanding programs-Expanding programs-

physically.physically. Growing market Growing market share. share. Only hospital in Only hospital in

“100 Best Cos to Work for”—“100 Best Cos to Work for”—7 consecutive years, 7 consecutive years,

currently #6.currently #6.

—“Five-Star Hospitals,” Joe Flower, strategy+business (#42)

““What’s Really Propping What’s Really Propping Up the Economy: Up the Economy:

Healthcare has added 1.7 Healthcare has added 1.7 million jobs since 2001. million jobs since 2001. The rest of the private The rest of the private

sector? sector? NoneNone.”.”

Source: Title, cover story, Source: Title, cover story, BusinessWeekBusinessWeek, 0925.2006, 0925.2006

Excellence.Excellence.Bank on it.Bank on it.(commerce (commerce

bank.)bank.)

““We defy conventional We defy conventional wisdom, operating more wisdom, operating more like the young bucks at like the young bucks at Starbucks than the old Starbucks than the old

farts at the Bank of farts at the Bank of America.”America.” —Vernon Hills—Vernon Hills

The Commerce Bank ModelThe Commerce Bank Model

“Are you going to “Are you going to costcost cutcut your way to prosperity?your way to prosperity?

Or …Or …

are you going to are you going to spendspend your your way to prosperity?”way to prosperity?”

Source: Source: Fans! Not customers. How Commerce Bank Fans! Not customers. How Commerce Bank Created a Super-growth Business in a No-growth Created a Super-growth Business in a No-growth

IndustryIndustry, Vernon Hill & Bob Andelman, Vernon Hill & Bob Andelman

The Commerce Bank ModelThe Commerce Bank Model

*deposit focused.*deposit focused.*Customer value-added.*Customer value-added.*Great retail experience.*Great retail experience.

*Best facilities. Best locations.*Best facilities. Best locations.*No stupid rules.*No stupid rules.

*Driven by revenue growth, *Driven by revenue growth, not cost reduction.not cost reduction.

Source: Source: Fans! Not customers. How Commerce Bank Fans! Not customers. How Commerce Bank Created a Super-growth Business in a No-growth Created a Super-growth Business in a No-growth

IndustryIndustry, Vernon Hill & Bob Andelman, Vernon Hill & Bob Andelman

The Commerce Bank ModelThe Commerce Bank Model

“cost cutting “cost cutting is a death is a death spiral.”spiral.”

Source: Source: Fans! Not customers. How Commerce Bank Fans! Not customers. How Commerce Bank Created a Super-growth Business in a No-growth Created a Super-growth Business in a No-growth

IndustryIndustry, Vernon Hill & Bob Andelman, Vernon Hill & Bob Andelman

““Our whole Our whole story is story is growing growing

revenue.”revenue.” —Vernon Hills (Top-line driven; standard —Vernon Hills (Top-line driven; standard

is bottom-line driven by cost cutting)is bottom-line driven by cost cutting)

The Commerce Bank ModelThe Commerce Bank Model

““overover-invest in -invest in our people, our people, overover--

invest in our invest in our facilities.”facilities.”

Source: Source: Fans! Not customers. How Commerce Bank Fans! Not customers. How Commerce Bank Created a Super-growth Business in a No-growth Created a Super-growth Business in a No-growth

IndustryIndustry, Vernon Hill & Bob Andelman, Vernon Hill & Bob Andelman

The Commerce Bank ModelThe Commerce Bank Model

“we “we wantwant them in our them in our

stores.”stores.”Source: Source: Fans! Not customers. How Commerce Bank Fans! Not customers. How Commerce Bank Created a Super-growth Business in a No-growth Created a Super-growth Business in a No-growth

IndustryIndustry, Vernon Hill & Bob Andelman, Vernon Hill & Bob Andelman

Commerce Bank: From “Service” to “Experience”Commerce Bank: From “Service” to “Experience”

7X. 730A-7X. 730A-800P. 800P.

F12A.F12A.**

**’93-’03/10 yr annual return: CB: 29%; ’93-’03/10 yr annual return: CB: 29%; WM: 17%; HD: 16%. Mkt Cap: 48% p.a.WM: 17%; HD: 16%. Mkt Cap: 48% p.a.

The Commerce Bank ModelThe Commerce Bank Model

“we don’t accept the 80/20 “we don’t accept the 80/20 theory. We believe every customer theory. We believe every customer has value, that you can’t tell whichhas value, that you can’t tell which

one is the high-value customer one is the high-value customer over time, and that thatover time, and that that

philosophy degrades the brand.” philosophy degrades the brand.”

Source: Source: Fans! Not customers. How Commerce Bank Fans! Not customers. How Commerce Bank Created a Super-growth Business in a No-growth Created a Super-growth Business in a No-growth

IndustryIndustry, Vernon Hill & Bob Andelman, Vernon Hill & Bob Andelman

The Commerce Bank ModelThe Commerce Bank Model

“every computer at commerce bank has a “every computer at commerce bank has a

specialspecial redred keykey on it that on it that

says, ‘found something stupid that we are says, ‘found something stupid that we are doing that interferes with our ability to service doing that interferes with our ability to service the customer? Tell us about it, and if we agree, the customer? Tell us about it, and if we agree,

we will give you $50.’”we will give you $50.’”

Source: Source: Fans! Not customers. How Commerce Bank Fans! Not customers. How Commerce Bank Created a Super-growth Business in a No-growth Created a Super-growth Business in a No-growth

IndustryIndustry, Vernon Hill & Bob Andelman, Vernon Hill & Bob Andelman

““You do not merely want to be You do not merely want to be

the best of the best.the best of the best. You You want to be want to be

considered the considered the only ones who only ones who do what you do what you

dodo.”.” —Jerry Garcia—Jerry Garcia

Up,Up, Up,Up, Up, Up,

UpUp

the Value-added Ladder.

The Value-added Ladder/ MEMORABLE CONNECTIONMEMORABLE CONNECTION

Spellbinding Spellbinding ExperiencesExperiences

Gamechanging SolutionsServicesGoods

Raw Materials

EXCELLENCE. EXCELLENCE.

SOUL I.SOUL I.DESIGN.DESIGN.

All Equal Except …

“At Sony we assume that all products of our competitors

have basically the same technology, price, performance

and features. DesiDesiggn is the n is the onlonlyy thin thingg that that

differentiates one differentiates one pproduct from another roduct from another in the marketin the marketpplacelace.”.” —

Norio Ohga

“Design is

treated like treated like a religiona religion at

BMW.” —Fortune

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

most people’s vocabularies, design means veneer. … But to me, nothing could be further from the meaning

of design. Design is the Design is the fundamentalfundamental soulsoul

of a man-made of a man-made creation.”creation.” —Steve Jobs

““You You knowknow a a designdesign is is goodgood

whenwhen you you wantwant to to licklick it.” it.” —Steve Jobs—Steve Jobs

Source: Source: Design: Intelligence Made VisibleDesign: Intelligence Made Visible,, Stephen Bayley & Terence ConranStephen Bayley & Terence Conran

“With its carefully conceived mix of colors and textures,

aromas and music, StarbucksStarbucks is more indicative of our era than the iMac. It is to the Age of

Aesthetics what McDonald’s was to the Age of Convenience or Ford was to the Age of Mass Production—the touchstone success story, the exemplar of … the

aesthetic imperative. … ‘Every Starbucks ‘Every Starbucks store is carefully designed to store is carefully designed to

enhance the quality of enhance the quality of everything the customers see, everything the customers see, touch, hear, smell or taste,’touch, hear, smell or taste,’ writes

CEO Howard Schultz.” -—Virginia Postrel, The Substance of Style: How the Rise of Aesthetic

Value Is Remaking Commerce, Culture and Consciousness

““Having spent a century or more focused on other goalsHaving spent a century or more focused on other goals—solving manufacturing problems, lowering costs, —solving manufacturing problems, lowering costs,

making goods and services widely available, increasing making goods and services widely available, increasing convenience, saving energy—we are increasingly convenience, saving energy—we are increasingly

engaged in making our world special. More people in engaged in making our world special. More people in more aspects of life are drawing pleasure and meaning more aspects of life are drawing pleasure and meaning from the way their persons, places and things look and from the way their persons, places and things look and

feel.feel. Whenever we have the Whenever we have the chance, we’re addinchance, we’re addingg sensor sensoryy, , emotional aemotional appppeal to ordinareal to ordinaryy functionfunction.”.” — Virginia Postrel, — Virginia Postrel, The Substance of The Substance of

Style: How the Rise of Aesthetic Value Is Remaking Commerce, Style: How the Rise of Aesthetic Value Is Remaking Commerce, Culture, and ConsciousnessCulture, and Consciousness

CCDDOO**Chief DesignDesign Officer

““Business people Business people don’t need to don’t need to ‘understand ‘understand

designers better.’ designers better.’ Businesspeople need Businesspeople need

to be designers.”to be designers.” —Roger Martin/Dean/Rotman Management School/—Roger Martin/Dean/Rotman Management School/

University of TorontoUniversity of Toronto

Message (?????): Message (?????):

Men Men cannotcannot

design for women’s design for women’s needs.needs.

““Perhaps the macho Perhaps the macho look can be interestinglook can be interesting

… if you want to fight … if you want to fight dinosaurs. But now to dinosaurs. But now to

survive you need survive you need intelligence, not power and intelligence, not power and

aggression. Modern aggression. Modern intelligence means intuitionintelligence means intuition

—it’s female—it’s female..””

Source: Philippe Starck, Harvard Design MagazineSource: Philippe Starck, Harvard Design Magazine

Bottom Line.

Design “is” … Design “is” … WHAT & WHY I WHAT & WHY I

LOVE. LOVE.

LOVELOVE..

I I LOVELOVE my …my …

All Time No.1 (TP)

ZiplocsZiplocs

Design “is” … Design “is” … WHY I GET MAD. WHY I GET MAD.

MADMAD..

Wanted: THE THE DESIGNER DESIGNER

OF MY OF MY KRUPPS/ KRUPPS/

CUISINART CUISINART COFFEE-COFFEE-MAKER. MAKER. Major Major

Reward!Reward!

WantedWanted:: THE THE DESIGNER DESIGNER

OF MY OF MY NEW HP NEW HP

COMPUTECOMPUTERR

Design is …Design is …

never never neutralneutral..

Hypothesis:Hypothesis: DESIGNDESIGN is is the pthe principalrincipal

differencedifference between love between love

and hate! and hate!

THE THE DESIGN49DESIGN49

Better By DesignBetter By Design

The The Design49Design49

Tom Tom Peters/Auckland/30March2005Peters/Auckland/30March2005

Better By Design: Tom’s Design49Better By Design: Tom’s Design49

1. There are only 2 rules.1. There are only 2 rules.2. Rule #1: 2. Rule #1: You can’t beat Wal*Mart on price or China on cost.You can’t beat Wal*Mart on price or China on cost.3. Rule #2: See Rule #1.3. Rule #2: See Rule #1.4. Econ Survival = Innovate and Sprint Up the Value-added4. Econ Survival = Innovate and Sprint Up the Value-addedChain … Chain … OR DIEOR DIE!!5. 5. DESIGN (WRIT LARGE) (“DESIGN MINDFULNESS”) IS THE DESIGN (WRIT LARGE) (“DESIGN MINDFULNESS”) IS THE “SOUL”/ENGINE OF THE NEW VALUE-ADDED IMPERATIVE.“SOUL”/ENGINE OF THE NEW VALUE-ADDED IMPERATIVE.6. Design as Soul-Core Competence #1 is a 6. Design as Soul-Core Competence #1 is a “cultural imperative,”“cultural imperative,” not not a “programmatic” or “process” ora “programmatic” or “process” or“throw $$$ at it” issue!“throw $$$ at it” issue!7. CDEs 7. CDEs (Culturally Design-driven Enterprises)(Culturally Design-driven Enterprises) use Design- use Design-Experiences-Dream Merchantry-Lovemarks as the LeadExperiences-Dream Merchantry-Lovemarks as the LeadDog(s) in the OlympianInnovation-“Strategy”-ValueDog(s) in the OlympianInnovation-“Strategy”-ValueProposition Struggle.Proposition Struggle. 8. “Dream Merchant” makes as much sense for IBM or GE or UPS as 8. “Dream Merchant” makes as much sense for IBM or GE or UPS as for Starbucks!for Starbucks!

Better By Design: Tom’s Design49Better By Design: Tom’s Design49

9. At CDEs, Design is the Heart of the “Emotional Branding” 9. At CDEs, Design is the Heart of the “Emotional Branding” Process.Process.10. 10. CDEs wholeheartedly embrace ideas such as “mystery,” CDEs wholeheartedly embrace ideas such as “mystery,” “surprise,” sensuality.”“surprise,” sensuality.”11. CDEs love “WOW!” and “B.H.A.G.” and “Insanely Great”11. CDEs love “WOW!” and “B.H.A.G.” and “Insanely Great”and “Gasp-worthy” and “Passion” and “Love”! and “Gasp-worthy” and “Passion” and “Love”! ((Axiom: Extreme Axiom: Extreme language breeds extreme products and serviceslanguage breeds extreme products and services.).)12. Staff at CDEs laugh and cry a lot! (Axiom: “Calm” enterprise = 12. Staff at CDEs laugh and cry a lot! (Axiom: “Calm” enterprise = Crappy enterprise.)Crappy enterprise.)13. CDEs love “strange” and “weird.”13. CDEs love “strange” and “weird.”14. CDEs scour the earth for “strange” and “weird” people. (CDEs 14. CDEs scour the earth for “strange” and “weird” people. (CDEs know: know: FREAKS RULEFREAKS RULE!)!)15. CDEs are “extremists.” (KR: “Avoid moderation.”)15. CDEs are “extremists.” (KR: “Avoid moderation.”)16. CDEs know that … 16. CDEs know that … EXCELLENCE IS NOT GOOD ENOUGH!EXCELLENCE IS NOT GOOD ENOUGH!(We must use (We must use non-linearnon-linear measures!) measures!)

Better By Design: Tom’s Design49Better By Design: Tom’s Design49

17. 17. CDEs seek Discontinuities.CDEs seek Discontinuities. (JG: “We don’t want to be the best of (JG: “We don’t want to be the best of the best, we want to be the only ones who do what we do.”) the best, we want to be the only ones who do what we do.”) 18. 18. CDEs are “respectful” of their customers, but not slaves to their CDEs are “respectful” of their customers, but not slaves to their customers! CDEs … LEAD THEIR CUSTOMERS!customers! CDEs … LEAD THEIR CUSTOMERS! (Axioms: “Listening (Axioms: “Listening to customers” is over-rated! Focus groups suck!)to customers” is over-rated! Focus groups suck!)19. But: “Lead” customers are an entirely different matter!19. But: “Lead” customers are an entirely different matter!20: Yet: CDEs turn “customers” into “Raving Fans.” (Think: “Tattoo 20: Yet: CDEs turn “customers” into “Raving Fans.” (Think: “Tattoo Brand”!)Brand”!)21. CDEs abide by Phil Daniels’ Credo: 21. CDEs abide by Phil Daniels’ Credo: “REWARD EXCELLENT “REWARD EXCELLENT FAILURES. PUNISH MEDIOCRE SUCCESSES.”FAILURES. PUNISH MEDIOCRE SUCCESSES.”22. At CDEs the Design Director is at least an Exec Vice President, a 22. At CDEs the Design Director is at least an Exec Vice President, a Member of the Senior Executive Team, perhaps on the Board, and Member of the Senior Executive Team, perhaps on the Board, and has an office within 10 meters of the CEO (unless she has an office within 10 meters of the CEO (unless she isis the CEO). the CEO). 23. Design Directors at large companies 23. Design Directors at large companies notnot worth worth $5,000,000$5,000,000 per year aren’t worth hiring! per year aren’t worth hiring! (DD$21M.)(DD$21M.)

Better By Design: Tom’s Design49Better By Design: Tom’s Design49

24. Great Designers are 24. Great Designers are “10,000X”“10,000X” better than “good designers.” better than “good designers.”25. At CDEs CFOs are 25. At CDEs CFOs are nevernever former CFOs! The CEO former CFOs! The CEO alwaysalways doubles doubles as the Chief Innovation Officer.as the Chief Innovation Officer.26. 26. CDEs are “Top-line Obsessed.”CDEs are “Top-line Obsessed.”27. CDE execs know there is a chasm between “excellent design” 27. CDE execs know there is a chasm between “excellent design” and “game-changer design.”and “game-changer design.”28. Gasp-worthy design is a moving target!28. Gasp-worthy design is a moving target!29. No Broadway shows last forever. So too, great designers!29. No Broadway shows last forever. So too, great designers!(Hire them! Pay them! Cherish them! Nurture them! (Hire them! Pay them! Cherish them! Nurture them! Fire them!Fire them!))30. Great design wrestles incessantly with the issue of “cool” 30. Great design wrestles incessantly with the issue of “cool” and/versus “usability.”! and/versus “usability.”! 31. 31. Designers “get” the stunning principles of Wabi Sabi.Designers “get” the stunning principles of Wabi Sabi. (Great (Great designers side with Chris Alexander against the A.I.A.)designers side with Chris Alexander against the A.I.A.)32. CDEs “get” the “feminine side” of life.32. CDEs “get” the “feminine side” of life.

Better By Design: Tom’s Design49Better By Design: Tom’s Design49

33. CDEs Know I: 33. CDEs Know I: WOMEN BUY EVERYTHING!WOMEN BUY EVERYTHING!34. CDEs Know II: 34. CDEs Know II: MEN ARE INCAPABLE OF DESIGNING PRODUCTS MEN ARE INCAPABLE OF DESIGNING PRODUCTS FOR WOMEN. FOR WOMEN. 35. CDEs understand that “We’re getting’ older”—and vigorously 35. CDEs understand that “We’re getting’ older”—and vigorously embrace the Boomer-Geezer market.embrace the Boomer-Geezer market.36. 36. CDEs understand: Boomers-Geezers have “ALL THE MONEY” … CDEs understand: Boomers-Geezers have “ALL THE MONEY” … are by and large healthy … and have 20 or so years left!are by and large healthy … and have 20 or so years left!37. CDEs wonder: Can 28-year-olds design “experiences” for 68-37. CDEs wonder: Can 28-year-olds design “experiences” for 68-year-olds?year-olds?38. CDEs seek the sweetest “sweet spot”: Woman-Boomer-Greenie-38. CDEs seek the sweetest “sweet spot”: Woman-Boomer-Greenie-Wellness.Wellness.39. “Design-mindfulness” is as apparent in the CDE’s facilities as in 39. “Design-mindfulness” is as apparent in the CDE’s facilities as in its products-services!its products-services!

Better By Design: Tom’s Design49Better By Design: Tom’s Design49

40. 40. “Design mindfulness” is as apparent in HR and “Design mindfulness” is as apparent in HR and Engineering and Logistics and IS/IT as in NPD.Engineering and Logistics and IS/IT as in NPD.41. 41. CDEs will settle for nothing less then “beautiful,” “gasp-CDEs will settle for nothing less then “beautiful,” “gasp-worthy” Business Processes/Infrastructure!worthy” Business Processes/Infrastructure!42. CDEs obsess on K.I.S.S. (Beware creeping feature-itis!) 42. CDEs obsess on K.I.S.S. (Beware creeping feature-itis!) (450/8.)(450/8.)43. “Design-mindfulness”/“aesthetic sensibility” is a requisite 43. “Design-mindfulness”/“aesthetic sensibility” is a requisite for Every Hire—including waiters and waitresses in Fast Food for Every Hire—including waiters and waitresses in Fast Food outlets and Housekeepers in hotels.outlets and Housekeepers in hotels. 44. Gasp-worthy Design is as essential to “service 44. Gasp-worthy Design is as essential to “service companies” as to “manufacturers.”companies” as to “manufacturers.”45. Gasp-worthy design can transform any “commodity,” 45. Gasp-worthy design can transform any “commodity,” including ag!including ag!

Better By Design: Tom’s Design49Better By Design: Tom’s Design49

46. 46. DESIGN MANIA IS A NATIONAL ECONOMIC ISSUE OF DESIGN MANIA IS A NATIONAL ECONOMIC ISSUE OF THE FIRST ORDER.THE FIRST ORDER.47. “Small” is no disadvantage in an Age of Creativity!47. “Small” is no disadvantage in an Age of Creativity!48.48. There is no such thing as a “National Design There is no such thing as a “National Design Advantage” unless the current school system is Destroyed Advantage” unless the current school system is Destroyed & Re-imagined& Re-imagined—to emphasize creativity and risk-taking and —to emphasize creativity and risk-taking and acceptance of failure. (Design Mindfulness … the acceptance of failure. (Design Mindfulness … the suppression thereof … typically begins at Age suppression thereof … typically begins at Age 44.).)

49.49. How sweet it is!How sweet it is! (If your head is screwed on right.)(If your head is screwed on right.)

EXCELLENCE.EXCELLENCE.

SYSTEMS. SYSTEMS. DESIGN. DESIGN. K.I.S.S.K.I.S.S.

450/8450/8

Great design Great design == OneOne-page -page

business planbusiness plan (Jim Horan)(Jim Horan)

Lisbon/New Biz:Lisbon/New Biz:

WeeksWeeks to …to …

Minutes Minutes (!!!!)(!!!!)

First Steps: “Beauty Contest”!

1. Select one form/document: invoice, 1. Select one form/document: invoice, airbill, sick leave policy, customer airbill, sick leave policy, customer returns claim form.returns claim form.

2.2. Rate the selected doc on a scale of 1 to Rate the selected doc on a scale of 1 to 10 [1 = Bureaucratica Obscuranta/Sucks; 10 [1 = Bureaucratica Obscuranta/Sucks; 10 = Work of Art] on four dimensions:10 = Work of Art] on four dimensions:

BeautBeauty. y. GraceGrace. . ClaritClarity. y. SimplicitSimplicity.y.3. Re-invent!3. Re-invent!4.4. Repeat, with a new selection,Repeat, with a new selection, every 15 working days.every 15 working days.

“One bank is currently One bank is currently claiming to … claiming to …

‘leverage its global footprint to provide effective financial solutions for its customers by providing a

gateway to diverse markets.’”

——Charles HandyCharles Handy

“I assume that it is I assume that it is just saying that it isjust saying that it is

there tothere to ‘‘helhelpp its its customers customers

wherever thewherever theyy are’are’.”.”

—Charles Handy

““Seek honest, minimalist management. Seek honest, minimalist management. Look for companies run by a team that Look for companies run by a team that explains things clearly and briefly. … explains things clearly and briefly. …

You can tell a lot about the firm by You can tell a lot about the firm by

reading an annual report or two. reading an annual report or two. If If management can’t explain the management can’t explain the business in business in pplain English, move lain English, move

on to another firmon to another firm.. If you see If you see phrases like ‘creating knowledge-based phrases like ‘creating knowledge-based value in emerging markets’ … someone value in emerging markets’ … someone is trying to pull the wool over your eyes, is trying to pull the wool over your eyes, you lazy Fool. Run.” you lazy Fool. Run.” —Seth Jayson, “Stocks for the

Lazy Investor,” The Motley Fool

EXCELLENCE.EXCELLENCE.

VALUE-ADDED LADDER III.VALUE-ADDED LADDER III.

DREAM IT.DREAM IT.

Furniture vs. Dreams

“We do not sell ‘furniture’ at

Domain. We sell We sell dreamsdreams. This is

accomplished by addressing the half-formed needs in our

customers’ heads. By uncovering these needs, we, in essence, fill in the blanks. We

convert ‘needs’ into ‘dreams.’ Sales are the

inevitable result.” — Judy George,

Domain Home Fashions

““No longer are we only an No longer are we only an

insurance provider.insurance provider. Today, Today, we also offer our we also offer our

customers the products customers the products and services that help and services that help

them achieve their them achieve their

dreamsdreams —whether it’s —whether it’s financial security, buying a car, financial security, buying a car,

paying for home repairs, or even paying for home repairs, or even taking a dream vacation.”taking a dream vacation.” ——Martin Martin

Feinstein, CEO, Farmers GroupFeinstein, CEO, Farmers Group

The Marketing of Dreams (Dreamketing)

DreamketingDreamketing:: Touching the clients’ Touching the clients’ dreams.dreams.DreamketingDreamketing:: The art of telling storiesThe art of telling stories and entertaining.and entertaining.DreamketingDreamketing: : Promote the dream,Promote the dream, not the product. not the product.DreamketingDreamketing:: Build the brand aroundBuild the brand around the main dream.the main dream.DreamketingDreamketing:: Build the “buzz,” theBuild the “buzz,” the “hype,” the “cult.”“hype,” the “cult.”

Source: Gian Luigi Longinotti-Buitoni

StarbucksStarbucks = = ShaShapperer ofof CultureCulture:: “At our core, “At our core,

we’re a coffee company, we’re a coffee company, but the opportunity we but the opportunity we

have to extend the brand is have to extend the brand is

beyond coffee; beyond coffee; it’s it’s entertainmententertainment.”.”

—Howard Schultz (“The Starbucks Aesthetic,” NYT, 10.22.06)

Up,Up, Up,Up, Up, Up,

UpUp

the Value-added Ladder.

The Value-added Ladder/ EMOTIONEMOTION

Dreams Come TrueDreams Come TrueSpellbinding Experiences Gamechanging Solutions

ServicesGoods

Raw Materials

CCDMDM*

*Chief Dream Merchant

Six Market Profiles

1. Adventures for Sale1. Adventures for Sale2. The Market for Togetherness,2. The Market for Togetherness, Friendship and Love Friendship and Love3. The Market for Care3. The Market for Care4. The Who-Am-I Market4. The Who-Am-I Market5. The Market for Peace of Mind5. The Market for Peace of Mind6. The Market for Convictions6. The Market for Convictions

Rolf Jensen/The Dream Society: How the Coming Shift from

Information to Imagination Will Transform Your Business

Six Market Profiles

1. Adventures for Sale/ IBM-UPSIBM-UPS2. The Market for Togetherness, Friendship and Love/ IBM-UPSIBM-UPS3. The Market for Care/ IBM-UPSIBM-UPS4. The Who-Am-I Market/ IBM-UPSIBM-UPS5. The Market for Peace of Mind/ IBM-UPSIBM-UPS6. The Market for Convictions/ IBM-UPSIBM-UPS

Rolf Jensen/The Dream Society: How the Coming Shift from Information to Imagination Will Transform Your Business

“The sun is setting on the Information Society—even before we have fully adjusted to its demands as

individuals and as companies. We have lived as hunters and as farmers, we have worked in factories and now we

live in an information-based society whose icon is the

computer. We stand facinWe stand facingg the fifth kind of societthe fifth kind of societyy: : the Dream Societthe Dream Society.y. … Future

products will have to appeal to our hearts, not to our heads. Now is the time to add emotional value to

products and services.”

Rolf Jensen/The Dream Society:How the Coming Shift from Information to Imagination Will Transform Your Business

EXCELLENCE.EXCELLENCE.

SOUL II.SOUL II.THE STORY.THE STORY.

““StorytellinStorytelling g

is the core is the core of culture.”of culture.”

—Branded Nation: The Marketing of Megachurch, College Inc., and Museumworld, James Twitchell

Best Best story story wins!wins!

MarketMarket Power = Power =

StoryStory Power Power

CCSTSTOO*

*Chief Storytelling Officer

“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.

ComComppanies will thrive anies will thrive on the basis of their on the basis of their stories and mstories and myythsths..

Companies will need to understand that their products are less important than their stories.” —Rolf Jensen, Copenhagen

Institute for Future Studies

EXCELLENCE.EXCELLENCE.

VALUE-ADDED LADDER III.VALUE-ADDED LADDER III.

ALL YOU NEED IS ALL YOU NEED IS LOVE.LOVE.

““Brands Brands have run out have run out

of juice. of juice. They’re They’re

deaddead.”.” —Kevin Roberts/Saatchi &

Saatchi

““Brands Are Out of Juice”Brands Are Out of Juice”

1. 1. Brands are worn out from overuse.Brands are worn out from overuse.2. 2. Brands are no longer mysterious.Brands are no longer mysterious.3. Brands can’t understand the new consumer.3. Brands can’t understand the new consumer.4. Brands struggle with good old-fashioned4. Brands struggle with good old-fashioned competition. competition.5. 5. Brands have been captured by formula.Brands have been captured by formula.6. 6. Brands have been smothered by creepingBrands have been smothered by creeping conservatism. conservatism.

Source: Source: Lovemarks: The Future Beyond BrandsLovemarks: The Future Beyond Brands, Kevin Roberts, Kevin Roberts

Kevin Roberts:

LovemarLovemar

ksks!!

““When I first suggested that When I first suggested that LoveLove was the was the way to transform business, grown CEOs way to transform business, grown CEOs

blushed and slid down behind annual blushed and slid down behind annual accounts. But I kept at them. I knew it was accounts. But I kept at them. I knew it was

LoveLove that was missing. I knew that that was missing. I knew that

LoveLove was the only way to ante up the was the only way to ante up the emotional temperature and create the new emotional temperature and create the new

kinds of relationships brands needed. I knew kinds of relationships brands needed. I knew

that that LoveLove was the only way business was the only way business could respond to the rapid shift in control to could respond to the rapid shift in control to

consumers.”consumers.” —Kevin Roberts/—Kevin Roberts/LovemarksLovemarks

Brand …………………………………………………. Lovemark

Recognized by consumers ………………. Loved by PeopleGeneric ………………………………………………… PersonalPresents a narrative ………………….. Creates a Love storyThe promise of quality ……………… A touch of SensualitySymbolic ………………………………………………….. IconicDefined ………………………………………………….. InfusedStatement ………………………………………………….. StoryDefined attributes ……………………... Wrapped in MysteryWrapped in MysteryValues ………………………………………………………. SpiritProfessional …………………………... Passionately CreativeAdvertising agency ………………………….. Ideas company

Source: Kevin Roberts, Lovemarks

“When we were working through the essentials of

a Lovemark,

MMyystersteryy was always at the top of the

list.” —Lovemarks: The Future Beyond Brands, Kevin Roberts

““Lovemarks are Lovemarks are owned by the owned by the people who people who

love them.”love them.” —

Lovemarks: The Future Beyond Brands, Kevin Roberts

““Shareholders very seldom love the brands they Shareholders very seldom love the brands they have invested in. And the last thing they want is an have invested in. And the last thing they want is an intimate relationship. They figure this could warp intimate relationship. They figure this could warp

their judgment. They want measurability, their judgment. They want measurability, increasing returns (always) and no surprises increasing returns (always) and no surprises

(ever). Imagine a relationship with someone like (ever). Imagine a relationship with someone like that!that!

“No wonder so many brands lost the emotional “No wonder so many brands lost the emotional thread that had led them to their extraordinary thread that had led them to their extraordinary success and turned them instead into metric-success and turned them instead into metric-

munchers of the lowest kind. Watch for the sign: munchers of the lowest kind. Watch for the sign:

HEADS, NOT HEARTS, AT WORK HEADS, NOT HEARTS, AT WORK HEREHERE.”.” —Lovemarks: The Future Beyond Brands, Kevin Roberts

Rules of “Radical Marketing”Rules of “Radical Marketing”

Love + Respect Your Customers!Love + Respect Your Customers!Hire only Passionate Missionaries!Hire only Passionate Missionaries!Create a Community of Customers!Create a Community of Customers!

Celebrate Craziness!Celebrate Craziness!Be insanely True to the Brand!Be insanely True to the Brand!

Sam Hill & Glenn Rifkin, Sam Hill & Glenn Rifkin, Radical MarketingRadical Marketing (e.g., Harley, Virgin, The Dead, HBS, NBA)(e.g., Harley, Virgin, The Dead, HBS, NBA)

Up,Up, Up,Up, Up, Up,

UpUp

the Value-added Ladder.

The Value-added Ladder/ ECSTASYECSTASY

LovemarkLovemark Dreams Come TrueDreams Come True

Spellbinding Experiences Spellbinding ExperiencesCustomer Success: Customer Success:

Implemented Gamechanging Implemented Gamechanging SolutionsSolutions

ServicesGoods

Raw Materials

CCLL OO*

*Chief Lovemark Officer

Up,Up, Up,Up, Up, Up,

UpUp

the Value-added Ladder.

Ladder.2008: 4 of Ladder.2008: 4 of 7!7!

Lovemark Lovemark Dreams Come TrueDreams Come True

Spellbinding Experiences Spellbinding ExperiencesGamechanging SolutionsGamechanging Solutions

ServicesGoods

Raw Materials

New (4 of 7) Value-added “Ladder”:New (4 of 7) Value-added “Ladder”: Plays to Women’s Inherent Strengths! Plays to Women’s Inherent Strengths!

Lovemark/Lovemark/FF Dreams Come True/Dreams Come True/FF

Spellbinding Experiences/ Spellbinding Experiences/FFGamechanging Solutions/Gamechanging Solutions/FF

Services/FGoods/M

Raw Materials/M

EXCELLENCE. EXCELLENCE. DOES MATTER DOES MATTER

MATTER?MATTER?

““What Isn’t What Isn’t Matter Is Matter Is

What What Matters”Matters”

—section title, Branded Nation: The Marketing of Megachurch, College Inc., and Museumworld, James Twitchell

VA “Teaching Moment”

““Andy pointed to Andy pointed to a molding, about a molding, about halfway up the halfway up the

wall …”wall …”

The The BootBoot … and … and TimberlandTimberland

The The TomatoTomato// FarmerFarmer … and … and

Campbell’sCampbell’s

Ladder.2007: 4 of Ladder.2007: 4 of 7!7!

Lovemark Lovemark Dreams Come TrueDreams Come True

Spellbinding Experiences Spellbinding ExperiencesGamechanging SolutionsGamechanging Solutions

ServicesGoods

Raw Materials

EXCELLENCE.EXCELLENCE.NEW VALUE NEW VALUE EQUATION.EQUATION.

NEW “C-levels”. NEW “C-levels”.

C.E.O.C.E.O. to

C.D.O.C.D.O.

CCRROO*

*Chief RevenueRevenue Officer

CCXXOO**Chief eeXXperience perience Officer

CCDMDM*

*Chief DreamDream Merchant

CCFFO*O*

*Chief Festivals Officer

CCPIPI***Chief Portal Impresario

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*Chief *Chief WikiWorldWikiWorld Maniac Maniac

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*Chief Conversations Officer

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*Chief LovemarkLovemark Officer

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*Chief Seduction Officer

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*Chief StorytellingStorytelling Officer

CCDD OO**Chief DesignDesign Officer

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*Chief talent acquisitiontalent acquisition Officer

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*Chief *Chief freaks acquisitionfreaks acquisition OfficerOfficer

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*Chief quest-meisterquest-meister

CCTTOO**Chief ThrillsThrills Officer

CCWWOO**Chief*Chief WOWWOW OfficerOfficer

CCDDoo* Chief DESTRUCTION DESTRUCTION Officer

CCTRTR oo**Chief TranscendenceTranscendence Officer

CC!!OO**Chief ! Officer

EndEndPart 4Part 4