The reaction by many, myself included, was nothing short of amazement. "Revising" your dogma is one thing, which most all of us have done and which is a sign of flexibility, but calling your principal claim-to-fame "the dumbest idea in the world," well that's ...

Jack's successor, Jeff Immelt, in the top slot since 2001, is a different cup of tea. He is, first and foremost, juicing up R&D and placing big bets on new products and new businesses. (He's been slowed down by putrid results at GE Capital, Welch's centerpiece and the source, in its heyday, of about half of GE's earnings—reducing dependence on GE Capital is another of Immelt's strategic goals.) The fact is that long before the Great Recession, Immelt was questioning rather directly some of GE's and indeed U.S. big business's emphasis in the prior 15 or so years. Consider this, from Mr. Immelt in 2005: "Almost every personal friend I have in the world works on Wall Street. You can buy and sell the same company six times and everybody makes money, but I'm not sure we're actually innovating. ... Our challenge is to take nanotechnology into the future, to do personalized medicine ..."

Which brings us all the way to this past Wednesday and Mr. Immelt's remarks, as reported by the FT, in an address at West Point: "We are at the end of a difficult generation of business leadership [TP query: defined by you know who, Jeff?] ... Tough-mindedness, a good trait, was replaced by meanness and greed, both terrible traits. ... Rewards became perverted. The richest people made the most mistakes with the least accountability." (To be fair, accountability has long been a GE trademark.) And if that stunner was not enough, Mr. Immelt, almost alone among high-visibility CEOs, deigned to address the struggling part of our population: "The bottom 25 percent of the American population is poorer than they were 25 years ago. That is just wrong. Ethically, leaders do share a common responsibility to narrow the gap between the weak and the strong." I'd chide Mr. I on the choice of the word "weak," but all in all, it is perhaps the most stunning-amazing-incredible reversal of course I've observed since I've began watching big business about 35 years ago—though Greenspan's acknowledgement that everything he believed most dearly, such as automatic self-regulation in the financial industry, had taken a shot below the water line, comes close to Immelt's 180-degree course change. (NB: I can't help but wonder if the strength of Immelt's remarks was tied to the setting at the USMA. It's hard to sling bullshit when you are addressing several thousand kids—and they are kids—who will be off to Afghanistan in pretty short order.)

"Meanness."
"Greed."
"Terrible."
"That is just wrong."

Wow!
And: Hooray for Jeff!
(And, about bloody time!)

So here are "the real basics"—in five words. Achieve Excellence at these five things and the world (of human organizations) will pretty much be your oyster. To wit:

1. Read.


2. Write.


3. Talk.


4. Listen.


5. Appreciate.

Once the keyboard was at my command, I ended up (surprise!) extending the list to 19 words. Herewith:

1. Read.
2. Write.
3. Talk.
4. Listen.
5. Appreciate.
6. Walk.
7. Work.
8. Sweat.
9. Sweat.
10. Enthuse.
11. People.
12. Frontline.
13. Act.
14. Anger.
15. Band.
16. Apologize.
17. Weird-out.
18. Network.
19. EXCELLENCE.

Here, also in very few words, is my more or less definition of the 19 words:

1. Read. (Outstudy 'em.)


2. Write. (Clear, concise, powerful.)


3. Talk. (Presentation mastery. Study. Practice-practice-practice. Storytelling, mastery of.)


4. Listen. (Study. Practice-practice-practice. Understand enormous power thereof.)


5. Appreciate. (Engaged. Thoughtful. Compassionate. Appreciative always, enormous power thereof.)


6. Walk. (MBWA/Managing By Wandering Around. In touch. Again, learning, and learning is required, through practice.)


7. Work. (Work harder than the next person. "Balance"? Uhm ...)


8. Sweat. (Sweat the details with maniacal passion!)


9. Sweat. (Sweat the details with maniacal passion!)


10. Enthuse. (Enthusiasm moves mountains.)


11. People. (Great and engaged people>>>Great strategy. Best bosses = Best people developers.)


12. Frontline. (Firstline supervisors, quality of, determine just about everything. Must become an obsession.)


13. Act. (Most tries wins. Hence "most failures" is a concomitant reality—celebrate 'em.)


14. Anger. (Raging impatience with dumb stuff. Constantly question the status quo.)


15. Band. (Small, passionate, relentless bands of people/renegades change the world. Period. Avoid the hierarchy—it tenaciously defends the past in 9.9 cases out of 10.)


16. Apologize. ("I'm sorry," enormous power thereof. And rare, particularly among men.)


17. Weird-out. (Multiple, unusual sources of information and feedback.)


18. Network. (Develop wider-deeper-downward relationships. Think "suck down for success." Think-obsess on R.O.I.R./Return on investment in relationships. Again, women take to this instinctively.)


19. EXCELLENCE. (The only standard. ALWAYS CAPITALIZE ALL LETTERS.)

Over to you ...

Courtesies of a small and trivial character are the ones which strike deepest in the grateful and appreciating heart.—Henry Clay

In fact, I'm now making what I call "The 'Eight Courtesies'" the centerpiece of my presentations. Below you'll find the List of Eight. Also, I have included a fully annotated version of The Eight Courtesies PowerPoint. (And a shorter version, from shorter presentations, The Five Courtesies PowerPoint.)

The "Eight Courtesies"

1. Stay in touch. (MBWA.)


2. Invest in relationships. (Make friends. Obsess.)


3. Listen. (Respect. Learn. Student. PROFESSIONAL. Sustainable Competitive Advantage #1)


4. Ask. (Engage. Inspire. Consult. React.)


5. Thank. (Appreciate. Acknowledge.)


6. Network. ("Suck down." C(I)>C(E).)


7. Apologize. (Unequivocal. Rectify. Over-react. Forgive.)


8. Practice thoughtfulness. (Kindness is free. This is ... STRATEGIC.)

The "Five Courtesies"

1. Listen. (Respect. Learn. Student. PROFESSIONAL. Sustainable Competitive Advantage #1.)


2. Ask. (Engage. Inspire. Consult. React.)


3. Thank. (Appreciate. Acknowledge.)


4. Apologize. (Unequivocal. Rectify. Over-react. Forgive.)


5. Practice thoughtfulness. (Kindness is free. This is ... STRATEGIC.)

[*Tom's new book, The Little BIG Things: 163 Ways to Pursue Excellence, is to appear in early 2010.—CM]

There are hundreds of thousands of retail stores in the world. Today, millions of customers will walk into those stores and interact with owners or employees. Within hours, most of those interactions will have been forgotten by those millions of customers. Why? Because most of the retail interactions that occur today will be flat, uninspired, perfunctory, and transactional. Most interactions won't create sales, and an even greater number will not build a relationship between the store and the customer.

This represents millions of missed opportunities. Imagine if thousands of these retail interactions could be improved, so they are not flat, but instead, interesting, enthusiastic, engaging, and memorable. Would more sales be created for today? Would more relationships be created for tomorrow?

I happened to meet an interesting retail salesperson a few days ago. His name is Jacob Lahr, and he is a manager at the CUSP store for women at Water Tower Place in Chicago. "Even when the store is filled with tourists, who we may never see again, it's possible to clientele," Jacob explained.

"To what?" I asked. "Did you say 'to clientele'?" "Sure," Jacob continued. "It's always possible to clientele. It depends on how you relate to your customers."

Well, that's certainly my favorite new verb of the week. I asked Jacob if he coined the phrase "to clientele," and he couldn't remember if he did or if he had heard it when learning to work in retail. I googled "to clientele" and only found it listed as a noun, so I'm willing to give neologism credit to Jacob. Here's how I'll define it: "To clientele is to create a relationship-building encounter with your customer, so that the customer's relationship with the store is better when she leaves than it was when she came in." Notice that the definition doesn't say anything about making a purchase.

Jacob doesn't want to waste retail interactions. He knows how valuable they are. Not to clientele is to let a precious opportunity slip through your fingers.

So, when you enter stores this week, see if the person who interacts with you is doing a good job "clienteling," or is he/she just going through the basics of serving you. If you work in retail, how often are you able to clientele?

Just imagine how much loyalty stores could create if they were better at clienteling? Too bad most aren't very good at it. Yes, the retail encounter may be the business world's biggest untapped, wasted opportunity.

Many things that can't be directly measured are worth doing.

Here's a really basic example: Should you ask your receptionist to smile when guests enter your office foyer? Of course you should! There is no way to measure the impact of a smile, but you are 100% certain that it is a good idea.

There are many decisions we make every day without being able to measure their direct impact. Should you clean your office before a client visits? Should you use the same logo on your website that you use on your printed brochures?

The answers to these questions seem obvious. But there are many other ideas that are terminated prenatally for one simple reason: The executive with control of the purse strings can't, from his vantage point, see a direct return on investment from this idea.

Important point: Just because this guy can't see a return on investment doesn't mean one doesn't exist.

Continued reading The Follies of Marketing Measurement...

Posted by Steve Yastrow |

Per premier Churchillian historian Max Hastings (Financial Times, 0904.09):

"But where to fight [after successes in the Battle of Britain had staved off imminent danger to survival], given that the British Army was incapable of engaging the Wehrmacht in Europe? Churchill's policy between 1940 and 1944 was dominated by a belief in the importance of military theater. He perceived that there must be action, even if not always useful; there must be successes, even if overstated or even imagined; there must be glory, even if undeserved."

[Hastings also quotes Deputy Prime Minister Clement Attlee: "Churchill was always looking around for 'finest hours,' and if one was not immediately available, his impulse was to manufacture one."]

Talk about "story power" when the stakes are high!!

In your and my more mundane world:

Have you worked-like-a-demon on your story?

Are you clear about your story (you, your service on offer)?

Is your story Clear & Powerful & Compelling & Exciting & Dynamic?

"We have vastly underestimated how deeply ingrained are the organizational and cultural rigidities that hamper our ability to execute."

That quote reminds me of another, this one by Norberto Odebrecht, head of the Brazilian-based heavy-industrial conglomerate, Odebrecht:

"Data drawn from the real world attest to a fact that is beyond our control: Everything in existence tends to deteriorate."

"Simple" fact: Accompanying GM's longtime designation of "biggest" came Olympian accompanying "rigidities." One is reminded of yet another quote, this from Walt Kelly's Pogo:

"We have met the enemy and he is us."

Business schools, the always helpful whipping boys in my rants, focus on the "cool" FMS troika. (Finance-Marketing-Strategy.) And yet it is the internal organizational characteristics, MIA in B-schools (not sexy enough), that trip companies up. "Rigidities" that impede the ability to "execute" are the culprits behind shoddy performance in 9 out of 9.01 cases.

Toyota didn't do in GM.
Honda didn't do in GM.
Nissan didn't do in GM.

GM did in GM.

This is not news.
It is, however, worth restating.
And I shall do so.
Again.
And again.
And then again.

We have met the enemy.
He is us.

(NB: Brooks' analysis of the GM situation is frightening, and, I fear, accurate. Among other things, he suggests that we've put the foxes in charge of the chicken coop—e.g., same tired execs, same tired union bosses; and further distanced the company from outside winds.)

Throughout this series I've encouraged you to "recalibrate" your approach to your business by addressing six questions:

1. Where is the latent profit in your business?
2. How can your current customers help you unleash that latent profit?
3. How does the economic situation help you focus your new customer acquisition efforts?
4. Is your brand strategy right for the times, i.e., what do you want your customers to think about you?
5. Are you communicating optimally with customers at all touchpoints?

And ... the subject of today's post:

6. How clear and compelling is your internal brand?

[Download a PDF from Yastrow.com presenting the six steps graphically.]

Continued reading 2009 Recalibration: Part 6...

Posted by Steve Yastrow |

The topic is purportedly "negotiation." I use "purportedly" because it so thoroughly re-defines the term that the "old definition" is more or less rendered meaningless, even a distraction.

Much (most) of what we "do" in the real world, internal to our organization or vis-à-vis outsiders, is, in fact, negotiation of one sort or another. But the way the "skill" is typically approached is transactional—how to structure a single negotiation. To be sure, in the last few years we have emphasized such things as "win-win" approaches—and that's no small thing.

But Built to Win goes a country mile or ten further. First, the authors argue that internal politics make a mess of negotiation outcomes as much as the "at the table" bit—complex internal pressures (substantive, political, subjective, as much as "hard numbers") by various functions are as important as the "stuff-at-the-table," especially over the long haul—you know, that funny-ole-word, imp-le-ment-a-tion. Second, they argue that such complex "stuff" at the opposing party's organization is also crucial. "Win-win" at the negotiating table is relatively unimportant if everybody, or lots of bodies, back home (both homes) is pissed off at the result.

Third, and the real breakthrough, is the notion that negotiating per se (remember, much of what we "do") can be an incredibly important "strategic competence" that becomes a core, encompassing, pervasive (i.e., everybody!) system and "cultural trait" of a successful organization.

As you know (see my "Heart of Strategy" post—also PDF and PPT), I fervently believe that "all this stuff" is the true basis for lasting "strategic EXCELLENCE," not the battle plan for conquering markets. "We will conquer X market, a 'Blue Ocean,'" is utterly meaningless (deleterious) if not married to the "all-important last 98%" called Execution or "Implementation through the Enthusiastic Cooperation of 100% of our People."

The book is loaded (!!) with compelling examples—and practical advice for getting the "core competence" imbedded throughout the enterprise. Frankly, in the very best sense, this is not a "page turner." The idea, which of course I've grossly oversimplified, is straightforward enough, but the execution requires a lot of deep thought and very hard work. The payoff is staggering—but building the under-structure ain't no walk in the park.

Bottom line: This is a terrific book, that truly deserves the moniker "an original," and we look forward to adding Hal to our Cool Friends roster. (Incidentally, the authors' credentials are solid gold, such as intense work with the Harvard Law School—on top of extraordinary "in the trenches" work. Yadda, yadda, yadda.)

The first quote (which, I repeat, I loved) comes courtesy Freakonomics author Steven Levitt. He's launched a course, with fellow economist John List, at the Chicago B.School to teach the kind of thinking featured in the book and referred to in the quote above. It is, therefore, in effect a course on the scientific method. The "scientific method"? "He who tries the most stuff wins. Failures are not to be tolerated, they are to be celebrated."

If the course, aimed at "the best MBA students in the world" (whoever they are—they were the wizards of Wall Street, now serving as busboys in or out of prison), "works," the world will have a new "model" for doing business. List humbly (reminds me of Larry Summers) says, "We're trying to bring about a revolution in business, so this [the course for "the best MBAs"] is the first shot over the bows (sic)." [NB: The ships I served on had only one bow, as I recall.]

I conclude, personally, from the above:

(1) I contend-reiterate that "tryin' a lot a stuff" is the most important thing an enterprise, or individual, can do in pursuit of success.
(2) I report here that "An Experimental Approach to the Right Answers [whatever that means]," in the Financial Times, 0420, and from which the above was taken, made me want to puke! [Re-reading it to prep for this Post induced another wave of stomach flippin'.]

I'm upstairs in biz class in a KLM 747-400 heading for China as I write. I have fretted for days, weeks, about the direction in which I want my 3-day mini-course to go. Last night, between Midnight and 4 a.m. I "got it"—if history is a teacher, I'll undo it and redo it a couple of more times in the next 36 hours,

My "breakthrough" is a determination to pass along this message repeated in as many ways as I can conjure up:

Excellence = People first, second, third. And fourth. (And fifth and sixth and seventh.)

I'll follow that up with:

Excellence = People first, second, third. And fourth. (And fifth and sixth and seventh.)
Excellence = People first, second, third. And fourth. (And fifth and sixth and seventh.)
Excellence = People first, second, third. And fourth. (And fifth and sixth and seventh.) Excellence = People first, second, third. And fourth. (And fifth and sixth and seventh.)
Excellence = People first, second, third. And fourth. (And fifth and sixth and seventh.)
Excellence = People first, second, third. And fourth. (And fifth and sixth and seventh.)

And then I'll go home to Vermont, where Spring is Springing!

Do business leaders need a ... NEW ANALYTIC FRAMEWORK ... to replace the one Greenspan and Rubin and Summers and pals gave us? Or should they instead pay strict attention to an FT article that appeared the day after the one cited above, titled: "Business Needs to Speak Out Against Greed"?

I quasi-puked after reading the first article—and stood up in my hotel room in Amsterdam, all by my lonesome, and shouted "Bravo" and tossed a tulip at the FT after reading the next day's article.

The last thing business needs is a "new analytic framework" taught only to the "best" MBAs—guys, mostly guys, who'll end up as the next McNamara or Rumsfeld (both members of that dynamic duo score top tenth of the top one percent on "analytic excellence").

What business needs, in my (not particularly) humble opinion is to do more MBWA (Managing By Wandering Around), to really really really "put people first," à la Southwest or Wegmans; to hang out, really really really really hang out with customers à la Cisco boss John Chambers, to learn to listen and apologize, as discussed in yesterday's Post. Etc.

In short:

Business doesn't need a new framework.
Business needs a new attitude.

When I get home I'm going to print new business calling cards—after all these years I've figured out what I do (which is what Bob Waterman and I tried to do 30 years ago in In Search of Excellence). Hence, my new calling card will read:

Tom Peters
The Un-revolutionary

We don't need another "analytic model" to replace the current "analytic model." What we need, and I'm gonna put this on the back of my card:

Excellence = People first, second, third. And fourth. (And fifth and sixth and seventh.)
Excellence = Wander around.
Excellence = People first, second, third. And fourth. (And fifth and sixth and seventh.) Excellence = Wander around.
Excellence = People first, second, third. And fourth. (And fifth and sixth and seventh.)
Excellence = Wander around.

And if there's room left:

Excellence = People first, second, third. And fourth. (And fifth and sixth and seventh.)
Excellence = People first, second, third. And fourth. (And fifth and sixth and seventh.)
Excellence = People first, second, third. And fourth. (And fifth and sixth and seventh.) Excellence = People first, second, third. And fourth. (And fifth and sixth and seventh.)
Excellence = People first, second, third. And fourth. (And fifth and sixth and seventh.)
Excellence = People first, second, third. And fourth. (And fifth and sixth and seventh.)

This short piece will cover an invisible competitive advantage that you can develop over the long term—and that is to develop multiple healthy ecosystems that thrive on your success.

Let me give a few examples:

Across the world, Microsoft has more than 600,000 partners that have based their business models on one more of Microsoft's products. They build solutions on top of the Microsoft platform. Every time they succeed in selling their solution, they contribute a piece to the success of Microsoft.

The App Store on the Apple website offers more than 25,000 titles dealing with everything from business applications, maps, restaurant recommendations, puzzles, games, radio, books, and even Skype. Developers from around the world are creating applications for iPhone and iPod Touch, designed to use their advanced technology, such as the Multi-Touch interface. Though most of the applications were developed by third parties, these other companies are enriching the Apple ecosystem every day.

The latest innovation from Amazon—Kindle—thrives on the ecosystem that is created by the publishers, authors, and media companies (yes, they sell newspapers and magazine subscriptions, too). In fact, the Kindle can only be successful if companies other than Amazon contribute to its usefulness.

The same rules apply to other industries outside of software and technology, although most other industries now have some sort of technology associated with them.

For example, selling flowers. Using technology, 1-800-FLOWERS can fulfill an estimated 6 million floral arrangement and gift orders a day—in most cases, on the same day. Obviously, this can't work unless they have a network of stores to fill the orders to the specifications provided by the company. They employ a franchise model and work with thousands of stores across the U.S. Using this process, they increase their capacity as well as the capacity of all the individual participating flower shops.

Ecosystems take a long time to develop, as the participants in the ecosystem have to feel that there is a big win for them for expending their time, energy, and other resources to work within the ecosystem. The long time it takes to build these ecosystems is another factor that contributes to the competitive advantage they provide.

Yes, it takes time and energy to design an offering/product that will not only serve you well, but also serve to take care of the concerns of the participants in your ecosystem. However, that extra effort is well worth it when you look at the competitive advantage this act produces.

[You can learn more about Cool Friend Raj Setty at www.rajeshsetty.com or read his blog at Life Beyond Code or follow him on Twitter at Twitter.com/UpbeatNow.]

Our Credo/A Work in Progress

* We are dedicated to and measure our success to a significant degree by our unwavering commitment to the extreme personal growth of every one of our employees.

* We shall unfailingly aim for EXCELLENCE in all we do.

And that, in turn, got me thinking that something like "excellence at listening" is a true-blue fundamental that belongs in even a very short values statement.

And then it was off to the races!

I spent most of a dreary weekend working on the "stuff" that ought to go into a "credo" or "values statement" or "working rules" or "things we care about"—or something. As usual, there's too much here, but I thought you might like to join in the fun:

Our Credo/A Work in Progress

*We are thoughtful in all we do.
*We are excellent listeners—to each other and to all members of our extended family (vendors, customers, communities, etc.).
*We will make the four words "What do you think?" an automatic instinct in all of our internal and external dealings; moreover, "What do you think?" will precede the explication of our own view in 99 out of 100 instances.
*We are dedicated to and measure our success to a significant degree by our unwavering commitment to the extreme personal growth of every one of our employees.
*We will only be "delighted" with our managers if their employees are universally surprised by the level of their personal and professional growth.
*We will be clear that we view leadership at every level as a sacred trust—and that leaders are indeed the servants of their employees just as the effective classroom teacher is servant to the lives and growth of her or his students.
*We believe in the "inverted organization chart"—with the "leaders" at the "bottom" of a reverse pyramid.
*We will construct leaders' incentive schemes so that measureable progress in human development is weighed as highly as marketplace success.
*We will be a leader in research and development in every aspect of our business—and we will work primarily with vendors who are also fanatical about research and development; and work to attract a set of core customers willing to play at the edge of things and become our co-developers.
*We will aim to make our customer engagements adventures beyond the comfort zone, or adventures in growth to use a less intimidating phrase—we will aim to add value in novel ways that surprise and stretch our customers and ourselves.
*We will use the three words "Try it! Now!" almost as often as "What do you think?"
*We revere the experimental method, and believe success is mostly correlated with the number of things one tries.
*We wholeheartedly acknowledge the value of analysis, but in the end swear by "Actions speak louder than words."
*We "encourage" failures; that is we acknowledge that a near-religious devotion to "Try it! Now!" necessarily invites the failures that are part and parcel of trying new things.
*We will, in fact, look askance at those whose records include few or no failures—such a spotless record suggests an unwillingness to brave the unknown.
*We will, to summarize the last few items, all view ourselves as explorers-adventurers, proceeding toward individual and collective growth by actively engaging at the edge of things; we unstintingly believe that our customers will reap enormous value from our commitment to our constant, restless exploration.
*We will encourage and insist upon constant and vociferous disagreement, but be absolutely intolerant of disagreement in the form of personal attacks.
*We will cut "overhead" to zero—every "department" shall aim to be best-in-class in its arena, and hence a full-scale participant in our concerted effort to add value in all we do.
*We will exude integrity, individually and collectively.
*We will exemplify the word transparency in all of our internal and external dealings—and bend over backwards to give new meaning and breadth to the term "information sharing."
*We will individually and collectively accept blame for our mistakes, or even our rather minor contribution to others' mistakes—and apologize accordingly and with dispatch.
*We will bring to bear overwhelming and instant and collective force to redress any customer problem, real or imagined.
*We will under no circumstance badmouth a competitor.
*We will aim to turn every customer contact into a memorable experience, remembering that all of life is indeed a stage.
*We honor the word "design" in all we do, in every nook and every cranny of our organization; every system, every web page, every customer invoice, every employee restroom is part of our purposefully designed "signature," and stand out and exude exceptionalism in one way or another.
*We understand that difficult decisions must be made, but we will bend over backwards to implement such decisions with kindness and grace—the dignity of the individual will always be foremost in our mind.
*We will not intrude into our employees' lives, but we are committed to aggressively helping employees achieve a healthy lifestyle.
*We will master the art of appreciation and be profuse in our use of the words "thank you" to honor assistance of even the most minor sort.
*We will acknowledge through celebration even small successes—and always cast a wide net in our "thank yous" to include bit players, especially from other functions.
*We aim for others to always be surprised by our "vibrancy" and "vitality"—we view enthusiasm as the key to success in anything, and take particular care in leader selection to ensure that every one of our leaders is a "remarkable" "carrier" of enthusiasm through thick and, especially, thin.
*We will drop whatever we are doing and rush to the aid of those involved in tight-deadline activities—even if those involved caused some of their own problems.
*We will be careful in our planning, but also understand that nothing ever unfolds as planned—hence we will be known for our ability to muster resources in an instant, without fuss and from everywhere, to deal with the unexpected; participating in these ad hoc response activities will not be seen as a distraction from our "real work," but as a significant part of our "real work" and an opportunity to contribute to others and build our own skills in ways we might not have imagined.
*We fully acknowledge that other units-departments-functions have other points of view than ours, but we will bend over backwards to develop social connections with those in other functions so that dealings over warring perspectives are dealings among friends.
*We acknowledge that agreed upon deadlines are holy writ, and will attempt to balance requisite urgency and requisite realism in all of our commitments.
*We will fight tooth and nail to minimize the complexity that "necessarily" comes with Growth and the mere passage of time.
*We will declare total war on our own systems to ensure that they do not strangle us.
*We gladly acknowledge that anyone in the organization has the duty as well as the right to challenge anyone else when he or she believes they have a valid and useful perspective to offer—this is particularly true regarding any issue that has to do with safety, quality, or meeting agreed upon deadlines; such challenges may be firm but not rude.
*We will be civil in all our dealings with one another.
*We will bend over backwards to bring truly (not superficially) diverse views of every stripe imaginable to bear on plans and decisions of all sorts.
*We will pursue "diversity" in part so that the composition of our workforce and leadership from top to bottom is a "pretty good" reflection of the demographics of the markets we serve or aim to serve.
*We will use new technology tools to extend the definition of "our family" to every corner of the globe—we will welcome ideas and participation in our affairs from anyone and everyone.
*We will aim for gender balance in all we do and from tippy top to bottom—for reasons commercial more than reasons moral.
*We will never, in any way, compromise on the quality of our products or services—regardless of difficulties in our marketplace and economy.
*We wholeheartedly acknowledge that in the short term (as well, obviously, as the long term) we must be profitable and exhibit stellar financial performance that is consistent with the audacious efforts to serve our people and our clients as described above.
*We aim to be seen by others as "conservative" in our financial practices.
*We shall talk about EXCELLENCE constantly.
*We shall unfailingly aim for EXCELLENCE in all we do.
*We shall use EXCELLENCE as the principal benchmark in the assessment of ourselves and our work and our community.
*We shall never forget that the bedrock of EXCELLENCE is the unwavering commitment to growth of 100% of our employees—and, in fact, all of those we come in contact with.

[Above, also available as a PDF. Below, after the peepers came more snow on Saturday, as seen through our living room window at 6 p.m.—at least it was light at 6!]

Great post Tom. Is the video of the professor moving to the right available online somewhere? I tried googling it but couldn't find anything.

Posted by Brett Tilford at April 2, 2009 10:12 AM

Please, someone post a link to that video ...

Posted by Cam at April 2, 2009 10:12 AM

[I tried, too. No luck.—CM]

Pet peeve subject of mine.
Listening is NOT a skill - you can learn some techniques but this is not true listening.
Listening, above all, is an attitude. If you are/not interested in the person your body language will show it.
This is the reason why so many senior people are not good at listening - their attitude (I am Smarter, more successful, more important, have to answer this question, know the way forward etc) gets in the way.
Your interest in the other person has to be genuine. Your head needs to be totally empty of your thoughts - you need to be at one with the other person.
When preparing for a meeting (say a coaching session with an employee or a 1:1 with a customer) most people prepare notes, things to talk about etc - how many prepare their attitude and deliberately empty their mind?
Be Curious!

Posted by PaulH at April 2, 2009 10:27 AM

I agree with Paul.
I was talking to a nurse a few weeks back after a communication skills workshop. We discussed listening. She said 'Listening is a function of the ear, hearing is a function of the brain' - I like that and I now use it regularly. It's neat and says it all.

Posted by Trevor Gay at April 2, 2009 10:38 AM

Nodding not listening?
Writing not listening?
Listening is listening?
and hearing
and understanding
and acting
and caring
and respectful
and right
and occasionally you hit gold!
Pan for the gold, it's there - you just need to listen.

Posted by patrick at April 2, 2009 10:56 AM

I'm stealing this line: 'Listening is a function of the ear, hearing is a function of the brain' Thanks, Trevor!
Being in the middle of a duck-nibbling mess right now (because nobody will actually pick up a damned phone and talk to the other people. They'd rather fire emails back and forth...) - it really hits home. Aargggh.
One very valuable lesson I also learned when working for a Japanese company is that nodding doesn't mean agreement. It just means "I hear you." Something we Americans don't always grok.

Posted by Mary Schmidt at April 2, 2009 11:20 AM

I don't disagree on the attitude-skill distinction. But I'd argue that awareness may come first. Some are not aware of what lousy listeners they are--most bosses, for instance; they think they're listeners, their employees think they're interrupters.
I also think that a lot of people simply have not thought about the "strategic" importance of listening per se.
Finally, I think if you get a little better at listening-as-a-skill, you may be surprised at how interesting some of the stuff people say is--and some attitude adjustment may take place.
Finally finally: I think (no evidence) that about 60% of people, and 80% of men (there is evidence--on the gender differences) are lousy listeners--and you can't just write off that share of the population.

Posted by tom peters at April 2, 2009 11:40 AM

Learning to shut up is - well - learned behavior. That's the first step to developing the listening ability. Sure, it can be learned, to a certain extent. At least, you can practice the art of silence.
It's one of the hardest things I had to learn when I became a consultant. Since - OF COURSE - I already know what the problem is and how to solve it (um, maybe not...;-)

Posted by Mary Schmidt at April 2, 2009 12:13 PM

Continued reading The Strategic Importance of Listening...

Posted by Tom Peters |

First comes my belief that Serious Training in listening-information extraction is a "Top 5" skill for leaders, and non-leaders for that matter. And I believe, furthermore, that it can be learned/"trained in." (In Tom's GTDMBA—Getting Things Done MBA—there will, in fact, be a core course in Strategic Listening-Interviewing, and a couple of advanced electives.)

Now to the "tricks":

(1) Nod (interviewer) until your head flies off! I was interviewed several times during last week's Vilnius-Tallinn-Helsinki fling. One interviewer was a Professional Nodder. And the more she nodded the more I spilled my guts—if I'd been a mass murderer, I've no doubt that I would have fessed up on the spot! Seriously, very seriously, nodding is virtually irresistible. It, obviously, which is the "secret," plays to one's ego—"What you are saying is so profound, so true ... please keep going." That's the implicit message. Just try and stop going—and perhaps spilling your guts!

(2) The second "strategy" (trick?!) is a simple variation on the theme: Take copious notes! Of course it's a good idea in general—but, hey, you can be making a shopping list if you want. Once again, the act of note taking is an ego-stroker: "Goodness, I've got to record every word of your invaluable thoughts."

And that's it. Am I "fessing up" to a Big Ego? Nope. Or, rather, we all have big egos wired in. And actually, I don't even need the ego explanation, though I believe it. All I need is to trot out BF Skinner's rats; this is the effect of positive reinforcement at its most primitive.

(There's a wonderful social psych experiment where a classroom full of students is instructed by a psych professor to nod whenever the prof moves to his right—and not to nod when he moves to his left. The video is hilarious: In short order, the poor soul, PhD in physics notwithstanding, is backed into the far right of the classroom!)

[04.01.09 version: "Heart of Strategy" is edited once more, now 56 items.—CM]

#2/You will also find on offer a "collection" I'm calling: "Tom Peters' Thoughts About Getting Things Done, in Good Times and Bad." It includes a somewhat updated version of "Recession45: Forty-five 'Secrets' and 'Clever Strategies' For Dealing with the Recession of 2008-XXXX," which appeared last week; the aforementioned "The Heart of Business Strategy: 57 Things That Matter;" "The 'Have You 50;'" and, from among last year's offerings, "Attending to the 'Last 98%': The New 'Management Science,' or 'Hard Is Soft, Soft Is Hard.'"

All yours ...

(a) Pope converts to Lutheranism.
(b) Sun rises in the West.
(c) Jack Welch calls focusing on shareholder
     value "dumbest idea in the world."
(d) Barry Bonds never used steroids.

I see far too many of my clients, good people with good motives, obsessing on pleasing Wall Street analysts, and taking actions that may well reduce their stock's value two to three years out. They have slashed budgets on many longer-term strategies, such as research and development, talent retention and development, even preventive maintenance on their equipment. All of it in the name of improving margins and a short-term increase in share value (or so the analysts say). Here are a few points, and I will let our bloggers add theirs as well, including dissenting points of view.

• The war for talent is still ongoing. There is and will be for some time, a shortage of leadership talent as a result of the baby boomers leaving the workforce. There will be plenty of "bodies" available, but that doesn't equate to talent. Cutting back on development efforts to grow your own leaders will leave you at the mercy of the market when the economy picks back up. You will end up paying more for outside talent instead of developing your bench strength now.
• Cutting material costs and pushing suppliers to cut corners to meet cost targets is impacting quality. These short-term measures will have long-term costs with increased warranty costs and lost sales because of the damage to the "brand."
• Instead of spending so much time with the Wall Street gang, why not spend that time talking to the constituents Jack calls out; employees and customers. You might just find out that your cost-cutting measures have led to employee disengagement and a loss in brand equity.
• If you must cut costs, start at the top. In the organizations I work with, the front lines are bearing much of the cost pressure. One client has even eliminated the free coffee at the daily pre-production meetings of supervisors! The front line is the place in your organization where all the knowledge and staff work must come together as product. Be careful whom you are messing with.

There are many more examples, but this should start the conversation. The real changes necessary for a resurgence of our economy, and with it lasting shareholder value, has to start in the boardrooms and the executive suite. Maybe they ought to call Jack.

Creating new customer relationships is one of the most expensive, most ineffective things that businesses do.

Consider how many billions of ads will flash in front of people's eyes today, but go unnoticed. How many millions of direct mail offers will end up in the recycling bin, unopened? How many sales calls won't work, despite hours of preparation, starched shirts, and animated PowerPoint slides?

If there is a part of the business world that most resembles a gas-guzzling hummer, it would be new customer acquisition. There is so much waste in the sales and marketing process that, now, more than ever, we have to be smart and focused about which new customers we pursue, and how we pursue them.

Here's one of the best ways you can improve your return on investment of new customer acquisition investment efforts: Focus on the specific actions you want your prospects to take.

A CEO called me a few months ago and asked me to come in to help him and his team deal with the business challenges the economic situation has created. Finding new customers was a big priority for them, so I asked them to show me what they were doing to make that happen. They showed me ads and advertorials they were placing in trade publications, trade shows they were attending, and a series of postcard mailings to prospective customers. They showed me a Google AdWords campaign, and they told me about the many different methods their various sales people were using to find leads. Then, I asked them to map out their sales process on a white board, showing me all the steps from disinterested lead to committed customer. Within five minutes they told me that they have a 90% close rate if they can get a prospect to visit their facility. I stood up, walked to the white board, and wrote down the list of new customer acquisition efforts that they had described earlier. I then handed the pen to the head of marketing, and asked him to draw a line through all the marketing efforts that were not directly focused on getting prospects into their office. He crossed out marketing plans representing 80% of their proposed spending.

By acknowledging that the true goal of those early lead-generation efforts was to persuade someone to visit the company’s facility, we were able to cut a huge chunk of fat out of the marketing budget. They could either save those dollars or apply them to efforts that focus on this goal. The group even agreed that paying someone's way to their facility was not out of the question—especially now that they'd have the money to do it!

Focusing on specific customer actions not only helps you create a "to-don’t list" of marketing efforts, it helps you focus your message. If the purpose of an ad is just to get someone to call you or come to your website, then you can target the message specifically to that goal. The attention that a prospective customer will allot to you is very limited; by knowing what you want that prospect to do, you can use that ration of attention wisely.

[This is Part 3 of a 6-part series. To read the other entries in the series, you can use these links: Part 1 and Part 2. Or, read more by Cool Friend Steve Yastrow at his website: yastrow.com.]

At about 2 p.m. he called an abrupt halt to things, and said, "I want to make sure I cover my full fee today, and then some. We're going to stop and do a 45-minute exercise."

He explained that any operation can at any time cut one-percent of their budget. (We all have flab, regardless of circumstances.) Though I, in general, (vehemently) oppose across-the-board cuts, I have absolutely no problem with the 1% idea. He then broke the group up by function; about five functions were represented, as I recall. He gave the groups just 30 minutes to identify their team's 1%. Then he had the groups report in public for 2 or 3 minutes each—this public recitation, he told me, raised the odds of execution; it also provided others' ideas.

Indeed the groups readily identified their 1% and reported accordingly—there was actually no bitching.

I called and asked him a couple of months later how things had turned out. (He was a regular advisor to the company, and a coach, though the term really didn't exist in business yet, to the CEO. He said there was almost uniform success—and a couple of groups had decided to repeat the exercise on their own every few months. Given his closeness to the CEO, and my more general judgment, I'd guess he gave me an accurate report.

Times are tough as we all know. I want to urgently suggest that, despite recent cost cutting you've probably done, you try this exercise. (For consultants of any flavor that goes double—especially good to provide almost guaranteed value in excess of your fees.)

We usually think of business strategy as some sort of aspirational market positioning statement. Doubtless that's part of it. But I believe that the number one "strategic strength" is excellence in execution and systemic relationships (i.e., with everyone we come in contact with). Hence I offer the following 48 pieces of advice for creating a winning strategy that is inherently sustainable:

• "Thank you." Minimum several times a day. Measure it.
• "Thank you" to everyone even peripherally involved in some activity—especially those "deep in the hierarchy."
• Smile. Work on it.
• Apologize. Even if "they" are "mostly" to blame.
• Jump all over those who play the "blame game."
• Hire enthusiasm.
• Low enthusiasm. No hire. Any job.
• Hire optimists. Everywhere. ("Positive outlook on life," not mindless optimism.)
• Hiring: Would you like to go to lunch with him-her. 100% of jobs.
• Hire for good manners.
• Do not reject "trouble makers"—that is those who are uncomfortable with the status quo.
• Expose all would-be hires to something unexpected-weird. Observe their reaction.
• Overwhelm response to even the smallest screw-ups.
• Become a student of all you will meet with. Big time.
• Hang out with interesting new people. Measure it.
• Lunch with folks in other functions. Measure it.
• Listen. Hear. Become a serious student of listening-hearing.
• Work on everyone's listening skills. Practice.
• Become a student of information extraction-interviewing.
• Become a student of presentation giving. Formal. Short and spontaneous.
• Incredible care in 1st line supervisor selection.
• World's best training for 1st line supervisors.
• Construct small leadership opportunities for junior people within days of starting on the job.
• Insane care in all promotion decisions.
• Promote "people people" for all managerial jobs. Finance-logistics-R&D as much as, say, sales.
• Hire-promote for demonstrated curiosity. Check their past commitment to continuous learning.
• Small "d" diversity. Rich mixes for any and all teams.
• Hire women. Roughly 50% women on exec team.
• Exec team "looks like" customer population, actual and desired.
• Focus on creating products for and selling to women.
• Focus on creating products for and selling to boomers-geezers.
• Work on first and last impressions.
• Walls display tomorrow's aspirations, not yesterday's accomplishments.
• Simplify systems. Constantly.
• Insist that almost all material be covered by a 1-page summary. Absolutely no longer.
• Practice decency.
• Add "We are thoughtful in all we do" to corporate values list. Number 1 force for customer loyalty, employee satisfaction.
• Make some form of employee growth (for all) a formal part of values set. Above customer satisfaction. Steal from RE/MAX: "We are a life success company."
• Flowers.
• Celebrate "small wins." Often. Perhaps a "small win of the day."
• Manage your calendar religiously: Does it accurately reflect your espoused priorities?
• Use a "calendar friend" who's not very friendly to help you with this.
• Review your calendar: Work assiduously on your "To don'ts"—stuff that distracts.
• Bosses, especially near the top: Formally cultivate one advisor whose role is to tell you the truth. Regularly!
• Commit to Excellence.
• Talk up Excellence.
• Put "Excellence in all we do" in the values set.
• Measure everyone on demonstrated commitment to Excellence.

You'll find a longer version of this as a PDF—it includes two Appendices.

(Above, windblown trees near Farewell Spit, NZ.)

Ask yourself this question: How can our current customers help us unleash the latent profit in our business?

I believe this with great conviction: Almost without exception, the most lucrative source of latent profit for most companies is in their existing customer relationships.

Let's put this in the context of the tough situation the economy has put all of us in. Your customers have less money to spend, and your competitors, in their desperation, are doing everything they can to steal your business.

Now, ask yourself this question: How many of our customers are giving us all of the business they could?

If you are like most people, your answer to that question is somewhere between none and 20%. Yes, some of you may say that 50% of more of your customers are giving you all the business they could, but you'd be in the minority. Here's the bottom line; we all have significant untapped potential in our existing customer relationships.

I saw an example of this potential just this morning, while I was conducting a phone consultation with a team from a mid-size, business-to-business service company. Right at the beginning of the conversation they told me that the most important issue they face is the challenge of finding new customers in this tough economy. I asked them what percent of their existing customers are giving them all the business that is reasonably possible. Their answer: Fewer than 20% of their client relationships are fully developed. Sure, new customers would be great. But their quickest route to building their business comes from building on the relationships they already have.

We spent the next half-hour talking about their existing customer relationships, and which ones had the most potential to develop additional new business. It became clear to all of us very quickly that the biggest danger they faced was to get distracted by efforts to acquire new customers and shortchange the opportunity right in front of their face: developing existing relationships. They are now well on their way to creating and implementing a plan to mine business from current customers.

So, the first, most important thing you must do to thrive in 2009 is not to cut costs, fire people, or, heaven forbid, bury your head in the sand and wait for the recession to be over. The first, most important thing you have to do is nurture and develop your existing customer relationships.

Yes, you need new customers. But this isn't a question of "either/or," it's a case of "both/and," with existing customer relationships being the thing to attend to first, foremost, and disproportionately.

[This is part 2 of a 6 part series. Click here to read part 1. For more on the idea in today's post, you can listen to Steve Yastrow's 2009 Readiness Teleseminar, in which he presents Six Readiness Questions to help you thrive in 2009. Information related to this post starts at 17 minutes into the one-hour seminar.—CM]

FYI: Westpac is the same bank it was a few months ago—no acquisitions or other forms of expansion. Westpac didn't grow; the others have shrunk or evaporated.

Ask yourself this question: Where is the latent profit in our business?

No business, in the history of the world, has created all of the profit it could possibly produce—including yours. There is always money left on the table.

That is especially true in tough times like this. Our world has changed, profoundly and quickly, and we have yet to adjust to our new reality. Many of us are so shell-shocked at what's been taken from us that we have yet to acknowledge what is left for us to take.

Your business is filled with unrealized opportunities. It is bursting with latent profit, just waiting to be unleashed. The real question is whether you will identify those opportunities and grab them. I am 100% convinced that the state of your business on January 1, 2010, has less to do with the Dow Jones Average, the unemployment rate, or the price of gas than it does with how YOU act in the meantime. (And it is in your best interest to believe this, also.)

As a first step, you want to identify the best sources of latent profit for you in this economic climate. To do this, start out by dreaming. Get in a quiet, undistracted place, and imagine it is one year from today. As you dream, imagine that 2009 was the best, most profitable year you have ever had. (Yes, this is a good dream.) Open your mind, and imagine what happened in your business to make 2009 so successful. If you open your mind, and let yourself think positively, you'll be surprised at the ideas that flow to the surface.

I did this exercise with a client a few weeks ago. Despite the economic situation, the CEO sensed that significant opportunity was lurking below the surface. I asked the CEO and his key senior leaders to imagine the company had an incredible 2009 and 2010, and to describe the company to me on January 1, 2011. Although the company produced $15 million in revenue in 2008, it didn’t take this team long to identify a very credible, achievable $30 million business in two years.

Where did we find this opportunity?

Continued reading 2009 Recalibration: Part 1...

Posted by Steve Yastrow |