Monday, August 23, 2004

UnPatriotic Arrogance on High: Off with the American Workforce's Head

Re-Imagining the Enterprise: The Tom Peters Interview

The most influential business thinker of our time, on post-9/11 business, the tech bust that wasn't, and new wireless technologies that offer great promise - and untold peril - to companies great and small
By Rick Mathieson

The responsibility to re-imagine

In his latest book, Re-imagine: Business Excellence in a Disruptive Age, Tom Peters lays the ground rules for a new world of high-risk, high-value innovation driven by those who fearlessly allow themselves to screw up, think weird, and throw out the old business playbooks.

Tom Peters is ticked off.

Even in the face of the dot-com bust, corporate scandals, a tepid economy and a worldwide war on terrorism, Peters is peeved about the prevailing power of bureaucrats, today's risk-averse, play-it-safe corporate mindset and business-as-usual in these frightfully unusual times.

In his first major book since 9/11, Re-imagine: Business Excellence in a Disruptive Age, Peters is in top form. Part polemicist, part unabashed cheerleader, Peters lays the ground rules for a new world of high-risk, high-value innovation driven by those who fearlessly allow themselves to screw up, think weird, and throw out the old business playbooks.

"It is the foremost task - and responsibility - of our generation to re-imagine our enterprises and institutions, public and private," he writes, adding that emerging technologies make anything imaginable eminently possible.

The Peters principles

Of course, Peters has always had a sensationalist streak. Beginning with the success of his groundbreaking book In Search of Excellence (1982), and in a dozen bestsellers since, Peters invented the manager-as-rock-star ethos of the '80s, and the "Me, Inc." entrepreneurialism of the '90s. The Los Angeles Times has called him "the father of the post-modern corporation." And companies pay the 60-year old rabble-rouser up to $50,000 for a one-hour speech in hopes of gleaning some secret to success in the new millennium.

With Re-imagine, Peters rants as well as he raves - "Pursue failure (damn it!)" "Fire all the male salespeople!" "Info-tech changes everything! Embrace it - or else!" - all with his trademark CAPITALS, (endless parentheticals), incessant exclamation points!!!! And short. Declarative. Sentences.

"White-collar employment as we've known it is dead," he proclaims. "All job security, as we have known it over the past three or four generations, is over. Over and gone."

In Peters' eyes, tomorrow's increasingly messy and chaotic world belongs to those who embrace "creative destruction;" nimble, creative innovators who go beyond the production of mere products and services to master the all-powerful customer experience.

We felt a self-preserving mpulse to find out more.

[Mathieson] A lot has happened since your last big book, Circle of Innovation, in 1998. The dot-com bust. Accounting scandals. 9/11. Two wars. What are the primary lessons we should take from the current chaos, and how do we use it to empower ourselves?

[Peters] To me the primary lesson is, don't pull in your horns. This thing is only beginning. Yes, we had the collapse of the dot-com bubble, which frankly I don't find quite as interesting as other people do, meaning that I don't think it was this profound or significant change. I think it was an intense contraction following intense expansion, and this whole new technology thing, whether we're talking Napster, whether we're talking the Recording Industry of America, whether we're talking about the studios, whether we're talking about war with terrorists, we're engaged in this exceptionally energetic process of redefinition, which will generate some number of winners, and lots of losers. And participation vigorously therein is what it's all about.

Nothing, nothing, nothing has changed for me in the last two or three years since the so-called tech bubble imploded. I will acknowledge that the vacancy rate in South San Francisco is a hell of a lot higher than it was.

But the larger point is that something quite exceptional is going down. Particularly in terms of you and me who are Californians, who are right in the center of it, nothing has changed. If anything, I think the strength of the signal, if you will, is higher than ever before.

Whenever I speak to a group, I always say to them, look, for better or worse you've got a Californian of 35 year standing, and a Silicon Valley-ite of 35 years standing, and I love that milieu. I love the Jobs, I love the McNealy's, I love the Gates, albeit he is little bit north of our normal turf. I love the Ellison's, I love the Groves. And I love some of those who made a trillion dollars and some who are less well known who have lost a trillion dollars, but were vigorously engaged in the fray. This book is about those who are in the fray at a time of truly dramatic change.

[Mathieson] In the book, you talk a lot about the war on terror. Donald Rumsfeld would probably embrace your ideals of nimble, responsive teams and decentralized power. In Iraq, that's been great at winning battles, but it's proving underwhelming in securing peace. In business, how do we marshal the power of agility and nimble organizational structures to make strategic moves with the critical mass to ensure category dominance?

[Peters] Well, let's forget for a moment whether it was correct to go into Iraq. The president made a decision, and then following that decision, the military executed the Iraqi campaign with incredible skill, and I think there is no issue about that, meaning the part called "the military victory." And I think Rumsfeld gets a lot of the credit. [But] peacemaking is ten times tougher.

That said, obviously, the stakes are a lot lower in the world of business then they are in the world of war and peace. As I say in the book, I'm not terribly concerned about companies that go out of business. I'm a lot more concerned about countries that go out of business. I'm probably among the sinners, and I'm vulnerable for some of the stuff I talk about in the book, but I think we make a bit of a mistake by drawing an exact analog between war and peace and commerce.

I had a chapter in my book Liberation Management, ten years ago, and the charming title of the chapter was "Dammed If You Do. Dammed If You Don't. Just Plain Damned." And the comment that I made, which I think is the eternal truth, is that in order to be excellent you must be consistent. And as soon as you're consistent, you are vulnerable to attack from the outside.

And so I think the real answer to your question is that companies vacillate back and forth between being energetic and entrepreneurial, and then trying to make some money out of it, which means being a lot more persistent and consistent.

[Mathieson] And as soon as you get there, you'd better change - or "re-imagine" your game.

[Peters] That's exactly right. Look, I don't know how to be Secretary of State, but I know how to be the Secretary of the Treasury. If I'm the Secretary of Treasury, I just want a lot of damned energy in the economy, and I don't care who dies, okay?

You can kill GE off as far I'm concerned. I don't care if Microsoft or GE exists; that's my view as an economist. As long as they made an extraordinary contribution and did great work, then when their time comes, ala Sears, let them die. I mean who cares if Microsoft is around? It doesn't make any difference because the kids who are working for Microsoft are exceptionally well talented, and so if for some strange reason Microsoft died tomorrow morning, the reality is that 99% of their employees would get good new jobs, right? And so we Americans don't have to sweat that.

[Mathieson] One of the major themes in Re-Imagine is the power of disruptive technology, especially for enabling unfettered communications throughout the organization. You say that you are fighting for a day when "a fresh-caught, 26-year old front line CIA operative is able to communicate with her counterpart, a fresh-caught, 26-year old, front-line FBI agent, through the latest technology, and without needing to wade through" several levels of supervisors. How do you think the emergence of mobile technologies and pervasive computing can best be put to use to enhance the way organizations work?

[Peters] The most important thing I can say is, "I don't know." And anybody who says they do know is an idiot, and you may quote me on that. And what I mean by that is, I think the change is so profound, particularly relative to the extremely young men and extremely young women who will be peopling organizations ten years from now, that I think we've got to make the whole damn thing up anew.

I think that's why I titled the book, Re-imagine. I don't know what a world looks like where literally 98% of middle management, from the world of the army to the world of enterprise, gets decapitated. And I refuse to consider that I'm the genius who has mapped the path out.

I think I've said some things that are not silly. But as Peter Drucker said, we're still looking for the Copernicus of the New Organization. I quote a lot of people like, David Weinberger, who I adore, who wrote this book called Small Pieces Loosely Joined, and Howard Rheingold with Smart Mobs and so on. I think that there are a whole lot of very smart people who are painting some very interesting pictures right now. But to say that somebody has painted the correct picture is gross exaggeration and it sure as hell isn't me.

[Mathieson] Much of the point of these and other new technologies is to optimize efficiencies. Wal-Mart's a master of it. And you point to Cisco, Oracle and others. But as Re-imagine hits book shelves, headlines are dominated by how new efficiencies are resulting in a jobless recovery, salary deflation and offshore outsourcing of many business functions - both blue collar and white. What should our game plan be if all the good jobs are going away?

[Peters] It depends upon your age. My sympathy/empathy goes out to the 49- or 52-year old who was told that they had this lifetime deal, and God would take care of them, and God was called PG&E or BofA, IBM or whoever. In simple language, they're screwed.

The youngsters, and I don't know what that means - 26, 36, 18, 32 - I don't think young men and young women grow up thinking they're going to work at the same place for 50 years.

But, on the flip side of that, it's also kind of cool. I would rather be in charge of me than have PG&E be in charge of me. But your head has got to be screwed on right for that because we went through two, three, four, five generations where people thought that Big Brother would take care of them.

Our national policies such as the absence of relatively universal healthcare make it more difficult, but I think the notion is not so much I'm on my own, but I'm responsible for myself. I think that's going to be part of the American litany over the next 10 to 25 years, but the transition isn't going to be pretty.

[Mathieson] Some of the most exciting themes in the book are around branding and creating memorable customer experiences. Today, when companies look at new technology, the focus has been on the creation of the aforementioned efficiencies. How should we move the discussion about technology from efficiency to experiences - the value technology can bring to your brand?

[Peters] Part of the answer is, ask Carly [Fiorina]. When the whole HP-Compaq deal went down, the young Hewlett and the young Packard said we should just be happy being a printing company, and we can sell these cartridges and we can make a ton of money and we can get higher ROI. Carly made the more dangerous bet on Compaq, and I think it had less to do with the hard technology, and more to do with acquiring a whole digital service force and being a true competitor to IBM Global Services.

And obviously, even though it's technologically driven, Apple/Pixar has always created great experiences, albeit at a price, that are driven more by the bits and bytes then by the consultants.

Look, we're moving to a more and more ethereal society where the manufactured product is less significant than before. And as we continue to shift these very expensive jobs offshore, the question, the issue, the struggle is, 'What's left?' And presumably what's left increasingly is the very high value-added stuff, and that value-added stuff being the stuff Carly presumably understands, and certainly Steve has understood since the beginning of time.

[Mathieson] And that being the intellectual property of it all.

[Peters] That's right. And Grove got it too. Just this week, Motorola just sold off the semiconductor division. And remember when Intel, and a lot of people don't because they're so damn big now, but remember when Intel bet the company by dumping the low-end semiconductors that they were so very good at, and leaping into the microprocessor market, which, after all is the intellectual capital market albeit embedded on a chip. That was way ahead of the game.

I remember when Intel's Bob Noyce became a protectionist, and the Japanese were going to kick our buns and everyone said we should spend our time lobbying in Sacramento and Washington. At the same time, Intel made this incredible decision that we can't compete with the Japanese. And of course the Japanese couldn't either, and they shipped semiconductor manufacturing out to Korea. But Intel made that shift from commodity semiconductors to very leading-edge microprocessors. Today the microprocessor sounds like a commodity, but it's sure as hell wasn't then.

[Mathieson] In terms of creating the brand experience, you go to great lengths about the ascendancy of women in the workplace. You even facetiously call for the firing of all male sales people. What in your view is key to the power of women in the workplace?

[Peters] Well, there's a huge piece of it that's about as simple minded as it comes, and that is that women control the professional, commercial, and the consumer purse strings. And the simple fact is, from Silicon Valley to Madison Avenue, the upper hierarchies of most enterprises are still controlled by males who I find to be relatively clueless to the perceived needs and desires of women and the way that women make purchase and service decisions. And they're much more adept at key business functions such as relationship building, which you and I just ain't wired to do.

[Mathieson] You write that the story of "why this book" has to do with your tombstone, and wanting to be remembered as "a player." What about tombstones is so key to your message about re-imagining business in a disruptive age?

[Peters] I'm older than you are, that's the easy answer. People at 60 think about things that people who are significantly less therein don't. I'm almost in a sappy way taking advantage of my age here. But I think the big message here is, Al-Qaeda notwithstanding, Anthrax notwithstanding, WMDs-strapped-in-a-belly-pack notwithstanding, I think it's a very cool time to be alive. Let's participate vigorously.

I look at all the people who are sour, including Silicon Valley people who thought God put them on Earth to make a $1 million by the age of 26, if not $10 million, and I say how cool to be part of this. It's a wonderful time. It's wonderful in Santa Clara County. It's wonderful in Austin, It's wonderful in Seattle. We're just re-inventing everything,

I also think - and people are going to get quite confused by this, which is fine with me - I think being in the military right now is cool. Because the military is also shedding 150 years worth of tradition as they try to figure out how to preserve the peace and fight wars in a totally different environment. It's scary, and it's weird and it's uncomfortable. But in the best sense of the word - and not said with naivety or rose-colored glasses - it's a very cool time to be alive.

Now you can inform the immigrants still coming here:" Why you coming to America for? ... Turn around 180 degrees and head in that direction, down and around the Cape of Africa, across the Indian Ocean towards India or China for Life, Liberty, Justice, & Whatever... We are just fresh out of opportunity here."

Yeah, just take whatever you have and send on down to highway 61.

If this is the caliber of advice that's being pedaled out there to our business leaders, we have a damn big problem on our hands that is not simply going to disappear all by itself.

If this doesn't incite you people with rage, I don't know what else to show you that will move you.


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