Long Excellence ! Tom Peters/16 August 2013 Institute of Internal Auditors/Orlando

1. Long Excellence! Tom Peters/16 August 2013 Institute of Internal Auditors/Orlando (slides @ tompeters.com/excellencenow.com)

2. “At a party given by a billionaire on Shelter Island, Kurt Vonnegut informs his pal, Joseph Heller, that their host, a hedge fund manager, had made more money in a single day than Heller had earned from his wildly popular novel Catch-22 over its whole history. Heller responds …

3. “At a party given by a billionaire on Shelter Island, Kurt Vonnegut informs his pal, Joseph Heller … that their host, a hedge fund manager, had made more money in a single day than Heller had earned from his wildly popular novel Catch-22 over its whole history. Heller responds …‘Yes, but I have something he will never have … Source: John Bogle, Enough. The Measures of Money, Business, and Life (Bogle is founder of the Vanguard Mutual Fund Group)

4. At a party given by a billionaire on Shelter Island, Kurt Vonnegut informs his pal, Joseph Heller … that their host, a hedge fund manager, had made more money in a single day than Heller had earned from his wildly popular novel Catch-22 over its whole history. Heller responds … Yes, but I have something he will never have … enough. Source: John Bogle, Enough. The Measures of Money, Business, and Life (Bogle is founder of the Vanguard Mutual Fund Group)

5. “Too Much Cost, Not Enough Value” “Too Much Speculation, Not Enough Investment” “Too Much Complexity, Not Enough Simplicity” “Too Much Counting, Not Enough Trust” “Too Much Business Conduct, Not Enough Professional Conduct” “Too Much Salesmanship, Not Enough Stewardship” “Too Much Focus on Things, Not Enough Focus on Commitment” “Too Many Twenty-first Century Values, Not Enough Eighteenth-Century Values” “Too Much ‘Success,’ Not Enough Character” Source: Chapter titles from Jack Bogle, Enough.

6. “Managers have lost dignity over the past decade in the face of wide spread institutional breakdown of trust and self-policing in business. To regain society’s trust, we believe that business leaders must embrace a way of looking at their role that goes beyond their responsibility to the shareholders to include a civic and personal commitment to their duty as institutional custodians. In other words, it is time that management became a profession.”—Rakesh Khurana & Nitin Nohria, “It’s Time To Make Management a True Profession,” HBR/10.08

7. Really First Things Before First Things

8. “The doctor interrupts after …* *Source: Jerome Groopman, How Doctors Think

9. 18 …

10. 18 … seconds!

11. [An obsession with] Listening is ... the ultimate mark of Respect. Listening is ... the heart and soul of Engagement. Listening is ... the heart and soul of Kindness. Listening is ... the heart and soul of Thoughtfulness. Listening is ... the basis for true Collaboration. Listening is ... the basis for true Partnership. Listening is ... a Team Sport. Listening is ... a Developable Individual Skill.* (*Though women are far better at it than men.) Listening is ... the basis forCommunity. Listening is ... the bedrock of Joint Ventures that work. Listening is ... the bedrock of Joint Ventures thatgrow. Listening is ... the core of effective Cross-functional Communication* (*Which is in turn Attribute #1 of organization effectiveness.) [cont.]

12. Listening is ... the engine of superior EXECUTION. Listening is ... the key to making the Sale. Listening is ... the key to Keeping the Customer’s Business. Listening is ... Service. Listening is ... the engine of Network development. Listening is ... the engine of Network maintenance. Listening is ... the engine of Network expansion. Listening is ... Social Networking’s “secret weapon.” Listening is ... Learning. Listening is ... the sine qua non of Renewal. Listening is ... the sine qua non of Creativity. Listening is ... the sine qua non of Innovation. Listening is ... the core of taking diverse opinions aboard. Listening is ... Strategy. Listening is ... Source #1 of “Value-added.” Listening is ... Differentiator #1. Listening is ... Profitable.*(*The “R.O.I.” from listening is higher than from any other single activity.) Listening is … the bedrock which underpins a Commitment to EXCELLENCE!

13. Ifyou agree with the above, shouldn’t listening be ... a Core Value? If you agree with the above, shouldn’t listening be ... perhaps Core Value #1?* (*“We are Effective Listeners—we treat Listening EXCELLENCE as the Centerpiece of our Commitment to Respect and Engagement and Community and Growth.”) If you agree, shouldn’t listening be ... a Core Competence? If you agree, shouldn’t listening be ... Core Competence #1? If you agree, shouldn’t listening be ... an explicit “agenda item” at every Meeting? If you agree, shouldn’t listening be ... our Strategy—per se? (Listening = Strategy.) If you agree, shouldn’t listening be ... the #1 skill we look for in Hiring (for every job)?

14. Suggested addition to your statement of Core Values: “We are Effective Listeners—we treat Listening EXCELLENCE as the Centerpiece of our Commitment to Respect and Engagement and Community and Growth.”

15. Listen = “Profession” = Study = practice = evaluation = Enterprise value

16. “Everyone has a story to tell, if only you have the patience to wait for it and not get in the way of it.”—Charles McCarry, Christopher’s Ghosts

17. “It’s amazing how this seemingly small thing— simply paying fierce attention to another, really asking, really listening, even during a brief conversation—can evoke such a wholehearted response.”—Susan Scott, Fierce Conversations: Achieving Success at Work and in Life, One Conversation at a Time

18. “Let Silence Do the Heavy Lifting”—chapter title from Susan Scott, Fierce Conversations: Achieving Success at Work and in Life, One Conversation at a Time

19. Really First Things Before First Things

20. If the regimental commander lost most of his 2nd lieutenants and 1st lieutenants and captains and majors, it would be a tragedy. If he lost his sergeants it would be a catastrophe. The Army and the Navy are fully aware that success on the battlefield is dependent to an extraordinary degree on its Sergeants and Chief Petty Officers. Does industry have the same awareness?

21. Really First Things Before First Things

22. XFX = #1* *Cross-Functional eXcellence

23. % XF lunches* *Measure! Monthly! Part of evaluation! [The PAs Club.]

24. Formal evaluations. Everyone, starting with the receptionist, should have a significant XFX rating component in their evaluation. (The “XFX Performance” should be among the Top 3 items in all managers’ evaluations.)

25. “Success doesn’t depend on the number of people you know; it depends on the number of people you know in highplaces!”or“Success doesn’t depend on the number of people you know; it depends on the number of people you know in low places!”

26. Loser:“He’s such a suck-up!”Winner:“He’s such a suck-down.”

27. George Crile (Charlie Wilson’s War) on Gust Avarkotos’ strategy:“He had become something of a legend with these people who manned the underbelly of the Agency [CIA].”

28. “I got to know his [Icahn’s] secretaries. They are always the keepers of everything.”—Dick Parsons, then CEO Time Warner, on dealing with an Icahn threat to his company“Parsons is not a visionary. He is, instead, a master in the art of relationship.”—Bloomberg BusinessWeek (03.11)

29. S = ƒ(#&DR; -2L, -3L, -4L, I&E) Success is a function of: Number and depth of relationships 2, 3, and 4 levels down inside and outside the organization S = ƒ(SD>SU) Sucking down is more important than sucking up—the idea is to have the [your] entire organization working for you S = ƒ(#non-FF, #non-FL) Number of friends, number of lunches with people not in my function S = ƒ(#XFL/m) Number of lunches with colleagues in other functions per month S = ƒ(#FF) Number of friends in the finance organization

30. Case

31. William Mayo, 1910, on the Clinic’s Two Core Values: Patient-centered care Team medicine (“medicine as a co-operative science”) Source: Leonard Berry & Kent Seltman, “Orchestrating the Clues of Quality,” Chapter 7 from Management Lessons From Mayo Clinic

32. “I am hundreds of times better here[than in my prior hospital assignment] because of the support system. It’s like you are working in an organism; you are not a single cell when you are out there practicing.”—quote from Dr. Nina Schwenk, in Chapter 3, “Practicing Team Medicine,” from Leonard Berry & Kent Seltman, from Management Lessons From Mayo Clinic

33. Really First Things Before First Things

34. “If I could have chosen not to tackle the IBM culture head-on, I probably wouldn’t have. My bias coming in was toward strategy, analysis and measurement. In comparison, changing the attitude and behaviors of hundreds of thousands of people is very, very hard.[Yet] I came to see in my time at IBM that culture isn’t just one aspect of the game—it is the game.” —Lou Gerstner, Who Says Elephants Can’t Dance

35. “… IT IS THE GAME.”

36. Systems Have Their Place SECOND Place Case #1/United States Air Force Tactical Air Command/ GEN Bill Creech/“Drive bys” Case #2/Milliken & Company/CEO Roger Milliken/the 45-minute grilling Case #3/Johns Hopkins/Dr. Peter Pronovost/The (real) roots of checklist power Case #4/Commerce Bank/CEO Vernon Hill/The RED button commitment Case #5/Veterans Administration/Abrogating the “culture of hiding” Case #6/Mayo Clinic/Dr. William Mayo/Teamwork makes me “100 times better” Case #7/IBM/CEO Lou Gerstner flummoxed by ingrained beliefs Case #8/Germany’s Mittelstand/excellence-in-the-genes Case #9/Department of Defense/DASD Bob Stone/tracking down the extant ”Model Installation” superstars Case #10/Matthew Kelly/Housekeepers’ dreams Case #11/Toyota/Growth or bust

37. Really First Things Before First Things

38. Meetings #1:Every meeting that does not stir the imagination and curiosity of attendees and increase bonding and co-operation and engagement and sense of worth and motivate rapid action and enhance enthusiasm is a permanently lost opportunity.

39. Excellence! Tom Peters/16 August 2013 Institute of Internal Auditors/Orlando (slides @ tompeters.com/excellencenow.com)

40. 1.

42. Hard is Soft. Soft is Hard.

43. Hard [numbers, plans] is Soft. Soft [people/relationships] is Hard.

44. “Why in the World did you go to Siberia?”

45. Enterprise* (*at its best):An emotional, vital, innovative, joyful, creative, entrepreneurial endeavor that elicits maximum concerted human potential in the wholehearted pursuit of EXCELLENCE in service of others.****Employees, Customers, Suppliers, Communities, Owners, Temporary partners

46. Excellence1982: The Bedrock “Eight Basics” 1. A Bias for Action 2. Close to the Customer 3. Autonomy and Entrepreneurship 4. Productivity Through People 5. Hands On, Value-Driven 6. Stick to the Knitting 7. Simple Form, Lean Staff 8. Simultaneous Loose-Tight Properties

47. “Breakthrough” 82* People! Customers! Action! Values! *In Search of Excellence

48. “The notion that corporate law requires directors, executives, and employees to maximize shareholder wealth simply isn’t true. There is no solid legal support for the claim that directors and executives in U.S. public corporations have an enforceable legal duty to maximize shareholder wealth. The idea is fable.”—Lynn Stout, professor of corporate and business law, Cornell Law school, in The Shareholder Value Myth: How Putting Shareholders First Harms Investors, Corporations, and the Public

49. “Courts uniformly refuse to actually impose sanctions on directors or executives for failing to pursue one purpose over another. In particular, courts refuse to hold directors of public corporations legally accountable for failing to maximize shareholder wealth.”—Lynn Stout, professor of corporate and business law, Cornell Law school, in The Shareholder Value Myth: How Putting Shareholders First Harms Investors, Corporations, and the Public

50. “[a corporation] can be formed to conduct or promote any lawful business or purpose”—from Delaware corporate code (no mandate for shareholder primacy),perLynn Stout, professor of corporate and business law, Cornell Law school, in The Shareholder Value Myth: How Putting Shareholders First Harms Investors, Corporations, and the Public