Tom Peters’

Rules for Radicals

MGM/Las Vegas/02.26.03

1. New World Order: The Race Goes to the Swift

& Wily.

“IT MAY SOMEDAY BE SAID THAT THE 21ST CENTURY BEGAN ON SEPTEMBER 11, 2001. …

“Al-Qaeda represents a new and profoundly dangerous kind of

organization—one that might be called a ‘virtual state.’ On September 11 a virtual

state proved that modern societies are vulnerable as never before.”—Time/09.09.2002

“The deadliest strength of America’s new adversaries is their very fluidity, Defense Secretary Donald

Rumsfeld believes. Terrorist networks, unburdened by fixed borders, headquarters or conventional forces, are

free to study the way this nation responds to threats and adapt themselves to prepare for what Mr. Rumsfeld is certain will be another attack. …

“ ‘Business as usual won’t do it,’ he said. His answer is to develop swifter, more lethal ways

to fight. ‘Big institutions aren’t swift on their feet in adapting but rather ponderous and clumsy

and slow.’ ”—The New York Times/09.04.2002

Eric’s Army

Flat.Fast.Agile.Adaptable.Light … But Lethal.

From BLOCKBUSTER vs. BLOCKBUSTER to

AGILITY, ELUSIVENESS,

PERFECT TARGETING.

Forget>“Learn”

“The problem is never how to get new, innovative

thoughts into your mind, but how to get the old

ones out.”Dee Hock

2. Destruction

Rules!

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

“Mr. Foster and his McKinsey colleagues collected detailed

performance data stretching back 40 years for 1,000 U.S. companies. They

found that none of the long-term survivors managed to outperform the market. Worse, the longer companies had been in the database, the worse

they did.”—Financial Times/11.28.2002

“It’s just a fact: Survivors underperform.”

—Dick Foster

“Conglomerates don’t work” —James

Surowiecki, The New Yorker (07.01,2002)

“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

“Facing Crisis, Media Giants Scrounge for

Fresh Strategies” —Headline, P1, Wall Street Journal/ 01.14.2003

“The corporation as we know it, which is now 120 years old, is not likely to survive the next 25 years. Legally and

financially, yes, but not structurally and economically.”

Peter Drucker, Business 2.0 (08.00)

The [New] Ge Way

DYB.com

C.E.O. to

C.D.O.

“Don’t rebuild. Reimagine.”

The New York Times Magazine on the future of the WTC space in Lower Manhattan/09.08.2002

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)

“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

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

Peter Job, CEO, Reuters

The Gales of Creative Destruction

+29M = -44M + 73M

+4M = +4M - 0M

“The secret of fast progress is

inefficiency, fast and furious and numerous

failures.”Kevin Kelly

Jane Jacobs: Exuberant Variety vs. the Great Blight of Dullness.

F.A. Hayek: Spontaneous Discovery Process. Joseph Schumpeter: the Gales of Creative Destruction.

Silicon Valley Success Secrets: The 1 in 20 Rule

“Pursuit of risk”: 4 of 20 in V.C. portfolio go bust; 6 lose money;

6 do okay; 3 do well; 1 hits the jackpot

Source: The Economist

Jim & Tom. Joined at the

hip. Not.

Huh?“Quiet, workmanlike, stoic leaders bring about the big

transformations.”--JC

Pastels?

T. Paine/P. Henry/A. Hamilton/T. Jefferson/B. FranklinA. Lincoln/U. S. Grant/W. T. Sherman

TR/FDR/LBJ/RR/JFKM.L. King

C. de GaulleM. Gandhi

W. ChurchillM. Thatcher

PicassoMozart

Copernicus/Newton/EinsteinJ. Welch/L. Gerstner/L. Ellison/B. Gates/S. Ballmer/S. Jobs/

S. McNealyA. Carnegie/J. P. Morgan/H. Ford/J.D. Rockefeller/T. A. Edison

“Pity the poor

brown.” —WSC

“In Italy for 30 years under the Borgias they had warfare, terror, murder,

bloodshed—and produced Michelangelo, da Vinci and the

Renaissance. In Switzerland they had brotherly love, 500 years of democracy and peace, and what did they produce

—the cuckoo clock.”Orson Welles, as Harry Lime, in “The Third Man”

3. The Same-

Same Trap.

“While everything may

be better, it is also increasingly the same.”

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

“When McDonald’s first started exporting its formula of quality, cleanliness and service, it was

something of a novelty. … These days, quality, cleanliness and

service are a given—and people are becoming more interested in what they are eating.” —FT/12.21.2002

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

educational backgrounds, coming up with similar ideas, producing

similar things, with similar prices and similar quality.”

Kjell Nordström and Jonas Ridderstråle, Funky Business

Funky Business: “To succeed we must stop being so goddamn normal. In a winner-takes-all

world … normal = nothing.”

“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

Saviors-in-Waiting

Disgruntled CustomersOff-the-Scope Competitors

Rogue EmployeesFringe Suppliers

Wayne Burkan, Wide Angle Vision: Beat the Competition by Focusing on Fringe Competitors, Lost Customers, and Rogue Employees

CUSTOMERS: “Future-defining customers may

account for only 2% to 3% of your total, but they represent a crucial

window on the future.”Adrian Slywotzky, Mercer Consultants

W.I.W?

20 of 267 of top 10*

*P&G: Declining domestic sales in 20 of 26 categories; 7 of top 10

categories. (The “billion-dollar” problem.)

Source: Advertising Age 01.21.2002/BofA Securities

Primary Obstacles to “Marketing-driven Change”

1. Fear of “cannibalism.”2. “Excessive cult of the consumer”/ “customer driven”/ “slavery to demographics, market research and focus groups.”3.Creating “sustainable advantage.” Source: John-Marie Dru, Disruption

Account planning has become “focus group balloting.”

—Lee Clow

“Chivalry is dead. The new code of conduct is an active strategy of disrupting the status quo

to create an unsustainable series of competitive advantages. This is not an age of defensive

castles, moats and armor. It is rather an age of cunning, speed and surprise. It may be hard for some to hang up the chain mail of ‘sustainable

advantage’ after so many battles. But hypercompetition, a state in which sustainable advantages are no longer possible, is now the

only level of competition.”Rich D’Aveni, Hypercompetition: Managing the Dynamics of

Strategic Maneuvering

Deviants, Inc. “Deviance tells the story of every mass

market ever created. What starts out weird and dangerous

becomes America’s next big corporate payday. So are you looking for the next mass market idea? It’s out there … way

out there.”Source: Ryan Matthews & Watts Wacker, Fast Company (03.02)

“A great idea always comes from one person’s

mind, someone who is, by definition, local. If you place 10

people in Brussels to conceive a European [ad/marketing]

campaign, you’ll get nothing.”Source: Jean-Marie Dru, Disruption

Ways to Raise a Purple Cow

Think small. One vestige of the TV-industrial complex is a need to think

mass. If it doesn’t appeal to everyone, the thinking goes, it’s not worth it. Think of the smallest conceivable

market—and describe a product that overwhelms it with remarkability. Go

from there.Source: Seth Godin, Fast Company (02.2003)

“HAVE MBAs KILLED OFF MARKETING? Prof Rajeev Batra says: ‘What these times call for is more creative

and breakthrough reengineering of product and service benefits, but we don’t train people to think like that.’ The way marketing is

taught across business schools is far too analytical and data-driven. ‘We’ve taken away the emphasis on creativity and big ideas that characterize real marketing breakthroughs.’ In India there is an added problem: most senior marketing jobs have been traditionally dominated by MBAs. Santosh Desai, vice

president, McCann Erickson, an MBA himself, believes in India engineer-MBAs, armed with this Lego-like approach, tend to reduce marketing into neat components. ‘This reductionist

thinking runs counter to the idea that great brands must have a core, unifying idea.’ ”—Businessworld/04Nov2002/“Why Is

Marketing Not Working?”

WEIRD IDEAS THAT WORK: (1) Hire slow learners (of the organizational code). (1.5) Hire people who make you

uncomfortable, even those you dislike. (2) Hire people you (probably) don’t need. (3) Use job interviews to get ideas, not

to screen candidates. (4) Encourage people to ignore and defy superiors and peers. (5) Find some happy people and get them to fight. (6) Reward success and failure, punish inaction.

(7) Decide to do something that will probably fail, then convince yourself and everyone else that success is certain. (8) Think of

some ridiculous, impractical things to do, then do them. (9) Avoid, distract, and bore customers, critics, and anyone who just wants to talk about money. (10) Don’t try to learn anything from people who seem to have solved the problems you face.

(11) Forget the past, particularly your company’s success.

Bob Sutton, Weird Ideas That Work: 11½ Ideas for Promoting, Managing, and Sustaining Innovation

4. Weird Wins.

“Are there enough weird people in

the lab these days?”V. Chmn., pharmaceutical house, to a lab director (06.01)

Innovation Source No. 1*:

PPPs/Personally Pissed-off People

“Branson started Virgin Atlantic because flying other airlines was

so dreadful.” —Fortune/05.13.2002

*And there is no No. 2!

“Reward excellent failures. Punish

mediocre successes.”

Phil Daniels, Sydney exec

Boyd

Eglin Flag: “100% AGAINST ZERO DEFECTS”

“General, if you’re not having accidents, your training program is not what it should be. … You need

to kill some pilots.”

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

“Blitzkrieg is far more than lightning thrusts that most people think of

when they hear the term; rather it was all about high operational tempo

and the rapid exploitation of opportunity.”/ “Arrange the mind of

the enemy.”—T.E. Lawrence/ “Float like a butterfly, sting like a

bee.”—Ali BOYD: The Fighter Pilot Who Changed

the Art of War (Robert Coram)

“Maneuverists”

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

The Kotler Doctrine:

1965-1980: R.A.F.(Ready.Aim.Fire.)

1980-1995: R.F.A.(Ready.Fire!Aim.)

1995-????: F.F.F.(Fire!Fire!Fire!)

5. Astonish

Me!

“This is an essay about what it takes to create and sell something remarkable. It is a plea for originality, passion, guts and daring. You can’t be remarkable by following someone else who’s remarkable. One way to figure out a theory is to look at

what’s working in the real world and determine what the successes have in common. But what could the Four Seasons and Motel 6 possibly have in common? Or Neiman-Marcus and Wal*Mart? Or Nokia (bringing out new hardware every 30 days or so) and Nintendo (marketing the same Gameboy 14 years in a row)? It’s like trying to drive looking in the rearview mirror.

The thing that all these companies have in common is that they have nothing in common. They are outliers. They’re on the

fringes. Superfast or superslow. Very exclusive or very cheap. Extremely big or extremely small. The reason its so hard to follow the leader is this: The leader is the leader precisely

because he did something remarkable. And that remarkable thing is now taken—so it’s no longer remarkable when you

decide to do it.” —Seth Godin, Fast Company/02.2003

“Let’s make a dent in the universe.”

Steve Jobs

“Astonish me!” / S.D.

“Build something great!” / H.Y.

“Immortal!” / D.O.

Legacy!

CEO Assignment2002 (Bermuda): “Please leap forward to 2007, 2012, or 2022, and write a business history of

Bermuda. What will have been said about your company during your

tenure?”

Ah, kids: “What is your vision for the future?” “What have you accomplished since your first book?” “Close your eyes and

imagine me immediately doing something about what you’ve just said. What would it be?”

“Do you feel you have an obligation to ‘Make the world a

better place’?”

Have you changed

civilization today?Source: HP banner ad

6. Distinction.

Branding: Is-Is Not “Table”

TNT is not: TNT is: TNT is not:Juvenile Contemporary Old-fashionedMindless Meaningful ElitistPredictable Suspenseful DullFrivolous Exciting SlowSuperficial Powerful Self-important

“WCW Monday Nitro was our top rated show by more than double anything else [and the top rated show on basic cable],

and we dumped it! Can you name another network that dropped its top-rated show? I

don’t know if consumers noticed, but it said everything to our staff.”—Scot Safon,

on the successful reinvention of TNT to embody its new vision: “TNT: We

Know Drama.”

“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

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

“Club Med is more than just a ‘resort’; it’s a means of rediscovering oneself, of inventing an

entirely new ‘me.’ ”Source: Jean-Marie Dru, Disruption

Bob Lutz: “I see us as being in the art business. Art,

entertainment and mobile sculpture, which,

coincidentally, also happens to provide transportation.”

Source: NYT 10.19.01

7. Speed!

“It takes six years to develop a new car. That’s

ridiculous. It only took four years to win World

War II.” —Ross Perot

K.I.S.S.: Gordon Bell (VAX

daddy): 500/50. Chas. Wang (CA): Behind schedule?

Cut least productive 25%.

Fred S.’s “mediocre” thesis. Herb K.’s

napkin.

There Are Lawyers … and Then There Are Lawyers: John De Laney/ICM

ANYTHING TRULY IMPORTANT CAN BE

BOILED DOWN TO 1/3RD PAGE.*

(*NO SHIT.)

Systems: Must have. Must

hate. / Must design. Must un-

design.

Mgt. Team includes … EVP

(S.O.U.B.)

Executive Vice President, Stomping Out Unnecessary Bullshit

8. Missing the Demographic

Boat I: Women

?????????Home Furnishings … 94%

Vacations … 92% (Adventure Travel … 70%/ $55B travel equipment)

Houses … 91%D.I.Y. (“home projects”) … 80%

Consumer Electronics … 51% Cars … 60% (90%)

All consumer purchases … 83% Bank Account … 89%

Health Care … 80%

2/3rds working women/50+% working wives > 50%

80% checks61% bills

53% stock (mutual fund boom)

43% > $500K95% financial decisions/

29% single handed

1970-1998

Men’s median income: +0.6%Women’s median income: + 63%

Source: Martha Barletta, Marketing to Women

91% women: ADVERTISERS DON’T

UNDERSTAND US. (58% “ANNOYED.”)

Source: Greenfield Online for Arnold’s Women’s Insight Team (Martha Barletta, Marketing to Women)

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.”

“Shopping: A Guy’s Nightmare or a Girl’s Dream Come True?”

“Buy it and be gone”vs.

“Hang out and enjoy the experience”

Source: The Charleston [WV] Gazette/06.22.2002

Women's View of Male Salespeople

Technically knowledgeable; assertive; get to the point; pushy;

condescending; insensitive to women’s needs.

Source: Judith Tingley, How to Sell to the Opposite Sex (Martha Barletta, Marketing to Women)

Read This: Barbara & Allan Pease’s

Why Men Don’t Listen & Women Can’t Read Maps

“It is obvious to a woman when another woman is upset, while a man generally has to physically witness

tears or a temper tantrum or be slapped in the face before he even has a clue that anything is going on. Like most female mammals, women are equipped with far more finely tuned

sensory skills than men.” Barbara & Allan Pease, Why Men Don’t Listen & Women Can’t Read Maps

“Resting” State: 30%, 90%: “A woman knows her children’s

friends, hopes, dreams, romances, secret fears, what they are

thinking, how they are feeling. Men are vaguely aware of some short people also living in the house.”

Barbara & Allan Pease, Why Men Don’t Listen & Women Can’t Read Maps

“As a hunter, a man needed vision that would allow him to zero in on targets in the distance … whereas a woman needed eyes

to allow a wide arc of vision so that she could monitor any predators sneaking up on the nest. This is why modern men can find their way effortlessly to a distant pub,

but can never find things in fridges, cupboards or drawers.”

Barbara & Allan Pease, Why Men Don’t Listen & Women Can’t Read Maps

“Female hearing advantage contributes significantly to what is

called ‘women’s intuition’ and is one of the reasons why a woman can read between the lines of what people say. Men, however, shouldn’t despair.

They are excellent at imitating animal sounds.”

Barbara & Allan Pease, Why Men Don’t Listen & Women Can’t Read Maps

SensesVision: Men, focused; Women,

peripheral.Hearing: Women’s discomfort

level I/2 men’s.Smell: Women >> Men.

Touch: Most sensitive man < Least sensitive women.

Source: Martha Barletta, Marketing to Women

We Really … Don’t Get It!Review of “Unfaithful”: “ … the latest entry in the category of

male directors’ clueless fantasies concerning what

women fantasize about in their nonexistent free time.”

Source: NYT (05.19.2002)

Men & Women on Thelma & Louise. MEN: Sundance Kid; women who get angry, swear, go to bars, leave

their mate. WOMEN: women controlled by the men in their lives,

who would rather be dead than oppressed.

Source: Judy Rosener, America’s Competitive Secret

“The Hollywood scripts that men write tend to be direct and

linear, while women’s compositions have many

conflicts, many climaxes, and many endings.”

Helen Fisher, The First Sex: The Natural Talents of

Women and How They Are Changing the World

“Women speak and hear a language of connection and intimacy, and men

speak and hear a language of status and independence. Men communicate to obtain information, establish their

status, and show independence. Women communicate to create

relationships, encourage interaction, and exchange feelings.”

Judy Rosener, America’s Competitive Secret

“I only really understand myself, what I’m really thinking and feeling, when I’ve talked it over with my circle of female

friends. When days go by without that connection, I feel

like a radio playing in an empty room.”

Anna Quindlen

Editorial/Men: Tables, rankings.*

Editorial/Women: Narratives that cohere.*

TP/Furniture: “Tech Specs” vs. “Soul.” **

*Redwood (UK)**High Point furniture mart (04.2002)

Read This Book …

EVEolution: The Eight Truths of Marketing to Women

Faith Popcorn & Lys Marigold

EVEolution: Truth No. 1

Connecting Your Female Consumers to Each

Other Connects Them to Your Brand

“The ‘Connection Proclivity’ in women starts early. When asked,

‘How was school today?’ a girl usually tells her mother every

detail of what happened, while a boy might grunt, ‘Fine.’ ”

EVEolution

“Women don’t buy

brands. They join them.”

EVEolution

STATEMENT OF PHILOSOPHY: I am a businessperson. An analyst. A pragmatist. The enormous social good of increased women’s

power is clear to me; but it is not my bailiwick. My “game” is haranguing business leaders

about my fact-based conviction that women’s increasing power – leadership skills

and purchasing power – is the strongest and most dynamic force at work in the American

economy today. Dare I say it as a long-time Palo Alto resident … THIS IS EVEN BIGGER THAN

THE INTERNET!Tom Peters

“Customer is King”: 4,440

“Customer is Queen”: 29Source: Steve Farber/Google search/04.2002

1. Men and women are different.2. Very different.3. VERY, VERY DIFFERENT.4. Women & Men have a-b-s-o-l-u-t-e-l-y nothing in common.4. Women buy lotsa stuff.5. WOMEN BUY A-L-L THE STUFF.6. Women’s Market = Opportunity No. 1.7. Men are (STILL) in charge.8. MEN ARE … TOTALLY, HOPELESSLY CLUELESS ABOUT WOMEN.9. Women’s Market = Opportunity No. 1.10. NO SHIT.

9. Missing the Demographic

Boat II: Boomers.

Subject: Marketers & Stupidity

“It’s 18-44, stupid!”

Subject: Marketers & Stupidity

Or is it: “18-44 is stupid,

stupid!”

2000-2010 Stats

18-44: -1%55+: +21%

(55-64: +47%)

Aging/“Elderly”

$$$$$$$$$$$$“I’m in charge!”

“NOT ACTING THEIR AGE: As Baby Boomers

Zoom into Retirement, Will America Ever Be the

Same?”USN&WR Cover/06.01

50+

$7T wealth (70%)/$2T annual income50% all discretionary spending

79% own homes/40M credit card users41% new cars/48% luxury cars

$610B healthcare spending/74% prescription drugs

5% of advertising targetsKen Dychtwald, Age Power: How the 21st

Century Will Be Ruled by the New Old

“Advertisers pay more to reach the kid because they think that once someone hits

middle age he’s too set in his ways to be susceptible to advertising. … In fact this notion of impressionable kids and hidebound geezers is little more

than a fairy tale, a Madison Avenue gloss on Hollywood’s cult of youth.”—James Surowiecki (The New

Yorker/04.01.2002)

Read This!

Carol Morgan & Doran Levy,

Marketing to the Mindset of Boomers

and Their Elders

“Marketers attempts at reaching those over 50 have

been miserably unsuccessful. No market’s motivations and needs are so poorly understood.”—Peter

Francese, founding publisher, American Demographics

“Households headed by someone 40 or older enjoy 91% ($9.7T) of

our population’s net worth. … The mature market is the dominant

market in the U.S. economy, making the majority of

expenditures in virtually every category.” —Carol Morgan & Doran Levy, Marketing to

the Mindset of Boomers and Their Elders

“Women 65 and older spent $14.7 billion on apparel in 1999, almost as much as that spent by 25- to 34-year-

olds. While spending by the older women increased by 12% from the previous year, that of the younger group increased by only 0.1%. But

who in the fashion industry is currently pursuing this market?” —Carol

Morgan & Doran Levy, Marketing to the Mindset of Boomers and Their Elders

“While the average American age 12 or older watched at least five

movies per year in a theater, those 40 and older were the most

frequent moviegoers, viewing 12 or more a year.” —Carol Morgan & Doran

Levy, Marketing to the Mindset of Boomers and Their Elders

“ ‘Age Power’ will rule the 21st century, and we are woefully

unprepared.”Ken Dychtwald, Age Power: How the 21st

Century Will Be Ruled by the New Old

The Royal Tenenbaums

10. Michelangelo’s

BIG TRUTH!

The greatest dangerfor most of us

is not that our aim istoo high

and we miss it,but that it is

too lowand we reach it.

Michelangelo

Successful Businesses’ Dozen Truths: TP’s 30-Year Perspective

1. Insanely Great & Quirky Talent.2. Disrespect for Tradition.3. Totally Passionate (to the Point of Irrationality) Belief in What We Are Here to Do.4. Utter Disbelief at the Bullshit that Marks “Normal Industry Behavior.”5. A Maniacal Bias for Execution … and Utter Contempt for Those Who Don’t “Get It.”6. Speed Demons.7. Up or Out. (Meritocracy Is Thy Name. Sycophancy Is Thy Scourge.)8. Passionate Hatred of Bureaucracy.9. Willingness to Lead the Customer … and Take the Heat Associated Therewith. (Mantra: Satan Invented Focus Groups to Derail True Believers.)10. “Reward Excellent Failures. Punish Mediocre Successes.” 11. Courage to Stand Alone on One’s Record of Accomplishment Against All the Forces of Conventional Wisdom.12. A Crystal Clear Understanding of Brand Power.