Forewo/ard, March!

There will be a 2009 edition of Re-imagine! I was asked to write a new foreword—which I did. Finished it last Friday.

Following a rule I generally break, what follows is the first 800 words, with a continuation which you may choose to peruse. We also have a PDF version of the entire 7,000-word piece.

[Please keep in mind that the text is a draft, which Tom urged me to remind you. Changes, as always, are to come.—CM]

Preface to 2009 Edition: Re-imagine!

Does any of what follows, in a book published in 2003, make sense if, or as, the world is falling apart? That's the obvious, and only, way to start a foreword in early 2009. The answer, of course, is "Yes"—and "no."

Re-imagine describes a brave new intertwined world of commerce, organizational formats, and career strategies in which many or even most of the old rules have been broken, then shredded. While the economic system is dramatically altered in 2009, and will surely be altered more in 2010 and perhaps beyond, the old rules that were broken that animated Re-imagine in the first place are still broken; much of the work to be done in 2009, beyond dealing with day-to-day survival issues, comes from the work list we laid out in 2003—there is far more unfinished than finished business when it comes to readiness for unrelenting, global, speed-of-light 21st century marketplace competition.

Boundaries are disappearing—and, altered circumstances or not, neo-protectionism or not, we live in a global village; mind-blowing new technologies are announced, it seems, by the day, from Apple's latest to the consequences of full-blown genetic mapping, and new members of the Vital Economy Club only enhance that reality. Most any task can be done anywhere. Alliances of every imaginable flavor are created, do their thing, and evaporate. Radical tools such as "crowdsourcing" change dynamics of work and human communication that are thousands of years old—and such tools continue, regardless of macro-economic circumstances, to arrive on the scene and grow like Topsy with startling regularity. And hence the race to add value to keep one's job, or to keep lots of jobs at home, or to enable a going concern, even a small one, to survive has only intensified.

Hierarchies are dying, at least in larger firms; and the economic situation accelerates that—lard in the superstructure is first on the chopping block, and not just at GM and Citi. We do most of our work via project teams that involve members from hither, thither and yon; and that last a year—or a week. Order shouting is out. These disparate team members from disparate places asked to concoct new stuff based on combining ideas of every description can only be motivated by persuasion and passion and the promise of personal growth, not the rattling of the hierarchical saber. "Who's in charge" varies by the day; Cisco Systems, the communication equipment giant, weathering the current storm by reinventing itself once again, calls it an organization based on "emergent leadership"—the de facto leader of a critical team can emerge electronically in a literal flash from three levels down in the organization, by dint of her stellar electronic contributions made from a cramped cubicle or her bedroom at home at 3 a.m.

Those of us in the high wage nations, economic uncertainty, even chaos, notwithstanding, will only survive by moving up the same "value-added" ladder described in the 2003 edition of this book—and by being prepared, as specified in 2003, for more or less constant reinvention. The rise of the likes of China and India and Brazil proceeds apace—and even with current hiccups, or the flu, the pace of these new major players' growth is nothing short of astounding—and will be more so if your time horizon moves out to, say, 15 years, a fact for readers under 40 or so. Yesterday is over is the ultimate truism, but at the moment more true, if possible, than at any time in the last 100 years.

There is a finance tsunami.
There is a generic economics tsunami.
There is a technology tsunami, just gathering a head of steam.
There is a geo-political tsunami, just gathering a head of steam.
There is a work-structuring tsunami.
There is an organization effectiveness tsunami.
There is a careers tsunami.

And they play out differently and in different combination every day.

So does this brief recitation of forces at work now, most of which were at work then, suggest that "I wouldn't change a word"?

Of course not!
I'd change a lot.
But probably in a direction you'd not expect.

Oddly, I'd look back, not forward, mostly, if I made major modifications. As on Wall Street, I'd pay attention, lots more attention, to the bedrock.
In fact, I beat myself up daily for not having done so before.
(Frankly, I'm irritated with anyone who isn't beating themselves up.)
Oddly on yet another dimension, my re-assessment began a year or so before the fissures in the financial system's under-structure began to be visible.
I can even put an exact date on the start of my re-assessment.

April 14, 2006.

There were some very modest signs of Winter reluctantly giving way to Spring at home in Vermont. But my view that April 14th was 100% ice and snow as Air Siberia approached Novosibirsk, Siberia.

I was in Novosibirsk to lead a one-day seminar. I had been invited as even this outpost was beginning to integrate into the global economy, and local leaders were keen to hear new views of enterprise management in a universally competitive environment. Others may have been asked before me, but I was the first of my sort to make the journey to what was the most forbidden part of the world when I was a boy.

I thought, if the landscape didn't send a loud enough signal, "This is different, and requires a different approach." Not condescending—this city of scientists could turn out more IQ points in a room than any short of Cambridge MA or Palo Alto CA. Yet as I pondered my approach, somehow, as it rarely did, the past after all is the past, my mind wandered back to 1982 and In Search of Excellence, and the odd parallels to the changing scenery, economic and intellectual, from which the book emerged.

"Search," as my pals and I call it, was squarely aimed at a specific pair of challenges—a formidable U.S. competitor for the first time since the end of World War II, namely Japan; and a whopper of a recession that brought double-digit unemployment, soaring inflation and sky high interest rates to my country. But the book that was born, oddly and in many ways, was a "back to the future" tome.

From the late sixties, "strategy" and "the quantification of positively everything" were the king and crown prince at the B-schools, in the consultancies (such as my employer, prestigious McKinsey & Co.), and in the corporations themselves—this was pre-Jack Welch and his merciless focus on operational excellence, and the Giant Headquarters Strategy Corps of detached thinkers and modelers was home to the best and the brightest at what turned out to be a sagging GE.

"Get the strategy right, and the rest will take care of itself." In effect, that was the mantra—and the quantification of positively everything was the animating force; if it couldn't be reduced to and expressed in numbers, it wasn't worthy of consideration.

(Sound familiar, circa 2008-2009? More later.)

McKinsey's new boss, Ron Daniel, was troubled as he assessed the Firm's work product. He fretted about the almost total absence of emphasis on implementation, and asked me, a fresh-caught Stanford Ph.D. who'd worked on organizational effectiveness for the past five years, to "take a look around"—I was shortly joined by my Bob Waterman.

Fast forward a few months, and following a series of visits I made in the U.S. and Europe looking for those new ideas about the practice of management, and you'll find Bob and I on a road trip—black-suited McKinsey consultants to the core, quantitative credentials to die for (In my last normal assignment, I'd been working on oil-discovery simulation models, doing the Fortran programming myself). We left our San Francisco office one Spring morning in 1978 and journeyed a short 30 miles "down the Peninsula," to Palo Alto. We met there with HP president John Young.

The "Holy smokes" came fast, before we officially started for that matter. The president of a billion dollar or so company, characterized by its total commitment to sustaining innovativeness, shared a half-wall cubicle, about 8 feet by 8 feet, or 9X9, with his secretary. It was a long, long way, figuratively as well as literally, from the 15-foot (!) high doors at the entrance to the secretary's office guarding the CEO's office one floor up from us in the San Francisco tower where we worked for McKinsey. Said doors, on the 51st floor, belonged to the Big Boss of ... the Bank of America.* (*Some things never change, eh? B of A, on the dole, seeking more dole, implodes—at the same time in early 2009 HP announces far better than expected quarterly earnings.)

As the interview subsequently unspooled, John introduced Bob and me to a four-letter term that remains to this day the centerpiece of my work and philosophy.

Namely: MBWA.
Managing By Wandering Around.

It means what it sounds like—getting out and about, literally wandering around. But I've come to appreciate how much more it means than that, especially and ironically, given new communication tools, in 2009. MBWA is in its largest meaning a metaphor about being in touch and staying in touch with reality. Being in touch with the car you make—not just the numbers that surround making it.* (*The founder-CEO of a giant retailer told me about sitting next to Henry Ford at a White House dinner 20-odd years ago. He was, he said, "intimidated" by Ford's recounting tale after tale of visits with kings and presidents and prime ministers. He laughed as he said, "I woke up with a start in the middle of the night and thought, 'I sat next to Henry Ford for three hours, and he never once mentioned cars.'" To my mind, alas, decades later, that goes a long way toward explaining why the Ford I rented in New Zealand in late February 2009 was so obviously inferior to the Kia I rented for two weeks earlier in the month.) Being in touch with the people who do the work where the rubber meets the road.** (**I read another MBWA story recently, about U.S. Army General David Petraeus, as he attempted to clean up the mess in Iraq. On the wall of his office in the so-called "Green Zone" was a hand-done poster on which he'd lettered the cornerstones of his philosophy. At the top of the very short list was, in exceptionally large letters, "WALK." Get out of the compound, get out of the vehicle, get close to the neighborhoods you are trying to stabilize. "WALK!" It-"walk" has become the foundation and metaphor for a surprisingly successful turn-around in this insanely difficult situation.) Being in intimate touch with "the little things" ("little," my a#%) that make a product better or get in the way of fast approvals of this or that—the "real stuff" that determines success or failure, a job done or just talked about, excellence or mediocrity.

I thought a lot about MBWA as the sub-prime crisis escalated into global economic chaos, fully 30 years after the research for In Search of Excellence began. There's a lot to the current sorry story, to be sure, but I remembered with laserlike clarity a long ago comment from a seminar participant, Chairman of a mid-sized regional bank:

"Tom, let me tell you the definition of a good lending officer. After church on Sunday, on the way home with his family, he takes a little detour to drive by the factory he just lent money to. Doesn't go in or any such thing, just drives by and takes a look."

"Just drives by"—needs to take a look. At the tidiness, the orderliness. To see if anyone's in, beavering away after hours. Just to sniff, really, to blink in the language of Malcolm Gladwell. To, yes, tacitly stay in touch.

So MBWA is the opposite of abstractions and "models," the opposite of "by the numbers" management, the opposite of "strategy as the alpha and the omega." (And numbers can indeed lie, maybe even most of the time (?), as we learned from Enron and Worldcom and are in the seemingly endless process of relearning, painfully, from virtually all of our big banks and, of course, dear old Bernie Madoff.)

Time passed, and with a hundred or more interviews and a hundred or more presentations to test our findings under our belts, Bob and I and Harper & Row birthed In Search of Excellence in 1982. Yup, back to the future. Stuff your grandfather the shopkeeper knew:

People matter most.
Give people ample room to experiment and encourage them to grow.
Honor the front-line worker over the MBA. (Whoops, Bob and I were both Stanford MBAs.)
Listen until your ears turn red to your customers—and love 'em up day in and day out, from pre-dawn to the black of the night.
Try stuff in a flash, instead of talking and talking and talking it to death.
Don't let screw ups ruffle you, just try again—and skip the soul-sapping, time-devouring blame game.
Keep it simple, fight for simple—declare total war on your own bureaucracy, and put your best general in charge.
Lay out your guiding values, like Johnson & Johnson's fabled "Credo," values that'll make your employees and your children and your neighbors proud—and stick to them.
Walk. Walk the talk. Stay in touch. Practice MBWA Monday-through the Sunday "drive by."
And aim for Excellence in everything you do.

(*Yup, it all could have been written 200 or 500 years earlier. I don't deny it.)

Now, as I prepared for my day-in-Siberia, all the above, except the sub-prime bits that were 18 months in the offing, came back with a rush. Was I going to give my standard, hard-hitting, take-no-prisoners speech about embracing the speed-of-light global village which now included Novosibirsk? Or was I going "back to the future"?

I did both. But I leaned toward the latter. Jeff Skilling (former Enron CEO) was a colleague for a while in my McKinsey days—and as I recall he reported to jail to begin serving a, gulp, 25-year sentence, at about the time I landed in Siberia. Jeff was bright as hell and then some, but got totally caught up in the numbers game and obviously went to any length to make the numbers dance to his tune. And the "any length" made a Godawful mess of maybe millions of lives—e.g., as million-dollar pension nest eggs, earned with 30 years' work, literally evaporated to absolute zero. He epitomized the extreme end of the scale of those who lived by the numbers, for the numbers, and of the numbers—and wouldn't have known MBWA if he/they tripped over it. He and his pals didn't see the real people, one-at-a-time, screwed by Enron's playing with the California electricity market. Jeff, in short, was the enemy and villain to all that Bob Waterman and I espoused.* (*Mea culpa: Bob and I could have written more about integrity and character than we did. My lame excuse is that our parents did a pretty good job, and we took it for granted. My mea culpa is that we should have known better and sounded off—it might not have helped, but it wouldn't have hurt. B-schools deafening silence on this issue, until long after the cat had escaped the bag, is shameful at the very least—a criminal act in its own way.)

With all this churning through my mind, I labored over the approach to my Siberian seminar. To set the tone, I resorted uncharacteristically to abstract language. But I wanted to lay down the gauntlet about the bedrock of organizational life and purpose and responsibility—and set the hurdle high. Here's what the keyboard produced, almost without my intervention. I've used it probably 100 times since April 2006:

Enterprise at its best is ... an emotional, vital, innovative, joyful, creative, entrepreneurial endeavor that elicits maximum concerted human potential in pursuit of Excellence and the wholehearted provision of service to others.

I throw today and threw in Siberia that gauntlet down and, while admitting that this state is hardly the norm, asked-ask:

What could possibly be the point of organized human endeavors if not something more or less like this? ** (**Fact is, we spend the majority of our adult waking hours as members of organizations. Hence, if said organizations short-change us on growth opportunities (the majority do in fact short-change their members) than we in deep trouble—as individuals and as a nation. You might well say that National Excellence is a direct product of the collective growth opportunities offered by organizations to their workforce. This is especially true in a global economy where national growth is measured in terms of collective adult individual growth.)

Perhaps surprisingly, most in my seminars, in Amsterdam or Abu Dhabi, eventually admit, many with delight, that this is, almost obviously, the ultimate aspiration of any organized activity. From this heavenly aspiration and unstinting endorsement of human growth, excellence and service, I move/moved to the achievement thereof, offering advice consistent with the logic and tools from the first edition to this book—but never, and this is the key, and the centerpiece of my work in 2009, allowing us (me, participants) to stray for a moment from the deeper purpose of "OHB" (organized human behavior).*** (***My friend and colleague Jim Collins coined the term "BHAG"—Big Hairy Audacious Goal. I love it! One of my clients was proud of his BHAG, about transforming an industry; it was indeed a stretch, and a big and bold one. But as we talked through "the Siberia message" about higher organization purpose, he literally scuttled the old BHAG. He in fact kept the industry goal intact, but the BHAG now focused on the "total commitment to extreme human growth" within his firm that would necessarily precede marketplace success.)

I could almost, with a straight face, call the Siberian experience an "epiphany." Confronted by the strangest environment I've ever encountered, I revived my rusting clarion call for Excellence, even took it up a notch or two or three from its 1982 incarnation—and insisted on nothing less than a Jeffersonian goal for any and all organizations and units within. And furthermore insisted that any lesser aspiration was almost shameful!

(Okay, drop the "... almost" from the prior sentence. Make it "... was shameful.")

But there was another epiphany of sorts to come.

Oddly, it was the Australian Institute of Management, in September 2007, which decided to present the first major tribute to the life's work of the late & great Peter Drucker—with the likes of Doris Drucker, 9X and easily as spry as someone 25 years younger, in attendance. I was asked to keynote an event featuring many of the luminaries in the field of management studies.

I was honored.
And non-plussed.

As I carefully re-read Drucker's work, I was struck anew, in fact for the first time, by his deeply held beliefs about the power of superior management to transform all of society for the better. Hence once again I was wont to dig more deeply than my norm. The conclusion, stealing in part from, not Drucker, but Robert Greenleaf, creator of the Servant Leader "movement," was:

"Organizations exist to serve. Period.

"Leaders live to serve. Period."

And once more, as in Siberia and to my surprise, that deep digging and Mr. Greenleaf, led me to observe my keyboard, almost without my assistance, arguing that organizations, all organizations, should be ...

"Passionate servant leaders, determined to create a legacy of earthshaking transformation in their domain (a 600 square-foot retail space, a 4-person training department, an urban school, a rural school, a city, a nation), create/must necessarily create organizations which are no less than Cathedrals in which the Full and Awesome Power of the Imagination and Spirit and Native Entrepreneurial Flair (We are all entrepreneurs—Muhammad Yunus, father of micro-lending and Nobel peace prize winner) of diverse individuals (100% Creative Talent—from checkout to lab, from Apple to Wegmans, the regional grocer judged to be America's '#1 Place to Work' in 2004, to Jane's one-person accountancy in Invercargill NZ) is unleashed in passionate pursuit of jointly perceived Soaring Purpose (= win a Nobel peace prize like Yunus, or at least do something worthy of bragging about 25 years from now to your grandkids) and Personal and Community and Client Service Excellence."

I'll admit that it's a prize-grabber when it comes to the run-on sentence category, but I am not willing to edit it—tested as it is now in over 100 presentations from Baltimore to Bucharest to Bologna. And, once again, I argue to my seminar participants, be they Canadian grocers or corporate security chiefs or Silicon Valley techies:

"If not this, what?"

In fact, as time passes I find myself less and less taken aback (at myself) for arguing "no less than Cathedrals in which the Full and Awesome Power of the Imagination and Spirit and Native Entrepreneurial Flair of diverse individuals." The idea in my mind is not religious, despite my use of the term "cathedral." The idea is that the first order of business is developing people—who will in turn go all out for our customers. Frankly, I'm doing no more than stealing from Hal Rosenbluth and Dave Liniger.

Hal took Rosenbluth International from local travel agency (Philadelphia) to global travel services giant, which he subsequently sold to American Express; his winning philosophy, based entirely on maximizing internal human development, was perfectly captured by his book Putting the Customer Second—put your people first, and you'll end up giving the best service possible to your clients. Dave has made miracles for decades at RE/MAX—and calls his firm "a life success company"; make your agents successful and they'll, in turn, go all out for their customers.

I also was inspired by one of what I call "the parable books," which usually leave me (very) cold. Against my better judgment I ended up forking over a few bucks at O'Hare for Matthew Kelly's The Dream Manager. The title bugs me, too—too soft for an old engineer like me. But he captured me in a flash with a simple but profoundly important observation: We all have dreams!

The next step of Kelly's is suggesting that if we devote ourselves, in an open and deliberate fashion, to helping people—e.g., the single mother trying to raise two kids on a receptionist salary—achieve their dreams—she'd die for a college degree—we will turn them into inspired employees. Kelly summarizes:

"A company's purpose is to become the-best-version-of-itself. The question is: What is an employee's purpose? Most would say, 'to help the company achieve its purpose'—but they would be wrong. That is certainly part of the employee's role, but an employee's primary purpose is to become the-best-version-of-himself or -herself. ... When a company forgets that it exists to serve customers, it quickly goes out of business. Our employees are our first customers, and our most important customers."

So in a thoroughly revised edition of this book, there would be a long section, like the one that appeared at the start of In Search of Excellence, that dealt with the basics of the purpose of enterprise, and the duties and obligations of managers. The Great Recession of 2008-2XXX has, one hopes, taught us (taught me!) not to take the bedrock for granted. I didn't in 1982; I did, like so many others, in 2003.

In the October 2008 Harvard Business Review, Rakesh Khurana and Nitin Nohria offered us "It's Time To Make Management a True Profession." At one point the authors write, "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 hat management became a profession."

I agree—and even the ultra-reserved Peter Drucker would, I suspect, have smiled delightedly at that formulation.

One book I've read during these troubled times has influenced me far more than any other. It's by Vanguard Mutual Fund Group founder John Bogle. His extraordinary and lasting success as an investor has flowed from always attending to the bedrock of an enterprise he chooses to support. He recently penned Enough: The Measures of Money, Business, and Life. I will simply share a sample of his chapter titles:

"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."

I can do no more than say "Amen."

So there's my story of the story of 2003-2009. Except for one final thing that I've implied throughout this Foreword but not been explicit enough about to this point. In a major revision of Re-imagine I would resurrect Excellence. Beginning in Siberia (14 April 2006, remember), I fell in love all over again with the idea and ideal of Excellence. To be quite honest, Excellence wore me out in the mid-eighties. (I'm not complaining!) But I have returned to the fold with a Vengeance.

Most of my presentations these days, and since mid-2006, are titled:


And they invariably end with a slide that reads:


In a recent exercise anticipating a presentation in New Zealand, my keyboard play resulted in a list that I called "The '19Es' of Excellence." Here they are:

Enthusiasm. (Be an irresistible force of nature!)
Energy. (Be fire! Light fires!)
Exuberance. (Vibrate—cause earthquakes!)
Execution. (Do it! Now! Get it done! Barriers are baloney! Excuses are for wimps! Accountability is gospel! Per football coach Bill Parcells: "Blame no one! Expect nothing! Do something!")
Empowerment. (Respect and appreciation! Always ask, "What do you think?" Then: Listen! Liberate! Celebrate! 100% innovators or bust!)
Edginess. (Perpetually dancing at the frontier, and a little or a lot beyond.)
Enraged. (Determined to challenge & change the status quo!)
Engaged. (Addicted to MBWA/Managing By Wandering Around. In touch. Always.)
Electronic. (Partners with the world 60/60/24/7 via electronic community building and entanglement of every sort. Crowdsourcing power rules!)
Encompassing. (Relentlessly pursue diverse opinions—the more diversity the merrier! Diversity per se "works"!)
Emotion. (The alpha. The omega. The essence of leadership. The essence of sales. The essence of marketing. The essence. Period. Acknowledge it.)
Empathy. (Connect, connect, connect with others' reality and aspirations! "Walk in the other person's shoes"—until the soles have holes!)
Experience. (Life is theater! Make every activity-contact, inside the firm or out, memorable! Standard: "Insanely Great"/Steve Jobs; "Radically Thrilling"/BMW.)
Eliminate. (Keep it simple!)
Errorprone. (Ready! Fire! Aim! Try a lot of stuff and make a lot of booboos and then try some more stuff and make some more booboos—all of it at the speed of light!)
Evenhanded. (Straight as an arrow! Fair to a fault! Honest as Abe!)
Expectations. (Michelangelo: "The greatest danger for most of us is not that our aim is too high and we miss it, but that it is too low and we reach it." Amen!)
Eudaimonia. (Pursue the highest of human moral purpose—the core of Aristotle's philosophy. Be of service. Always.)
Excellence. (The only standard! Never an exception! Start now! No excuses! If not Excellence, what? If not Excellence now, when?)

The story goes that the senior Tom Watson, de facto founder of IBM, was once asked how long it takes to become excellent. He is said to have replied (three decades before the one-minute manager rode on to the scene), "a minute." Asked to explain, Watson apparently said, "It's simple. Make yourself a promise that starting right now you will not do anything in other than an excellent fashion."

As we deal with every variety of turbulence, the search for bedrock has never been so important. Make this your minute to declare for Excellence in all you do. I hope the following pages and ideas will help. And remember that it is the tough times, not the easy ones, which define a person professionally and personally. What better time for Excellence as a guiding star.

Tom Peters

Golden Bay
South Island
New Zealand

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