Tom%20Peters

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Tom PetersEXCELLENCE. ALWAYS.Hexaware.Pho
enix.29September2006
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Slides at tompeters.com
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I am often asked by would-be entrepreneurs
seeking escape from life within huge corporate
structures, How do I build a small firm for
myself? The answer seems obvious Buy a very
large one and just wait. Paul Ormerod, Why
Most Things Fail Evolution, Extinction and
Economics
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Forbes100 from 1917 to 1987 39 members of the
Class of 17 were alive in 87 18 in 87 F100
18 F100 survivors significantly underperformed
the market just 2 (2), GE Kodak,
outperformed the market from 1917 to 1987.SP
500 from 1957 to 1997 74 members of the Class of
57 were alive in 97 12 (2.4) of 500
outperformed the market from 1957 to
1997.Source Dick Foster Sarah Kaplan,
Creative Destruction Why Companies That Are
Built to Last Underperform the Market
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Welcome to the Club of Shattered Dreams Of
Koreas Top 100 companies in 1955, only 7 were
still on the list in 2004. The 1997 crisis
destroyed half of Koreas 30 largest
conglomerates.Source KET Issue Report, Kim
Jong Nyun (14.05.2005)
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I dont believe in economies of scale. You dont
get better by being bigger. You get worse.
Dick Kovacevich/Wells Fargo
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Scale?Microsofts Struggle With Scale
Headline, FT, 09.2005Troubling Exits at
Microsoft Cover Story, BW, 09.2005Too Big
to Move Fast? Headline, BW, 09.2005
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More than 1 RD spending, last 25 years?
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GM
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When asked to name just one big merger that had
lived up to expectations, Leon Cooperman, former
cochairman of Goldman Sachs Investment Policy
Committee, answered Im sure there are success
stories out there, but at this moment I draw a
blank. Mark Sirower, The Synergy Trap
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Not a single company that qualified as having
made a sustained transformation ignited its leap
with a big acquisition or merger. Moreover,
comparison companiesthose that failed to make a
leap or, if they did, failed to sustain itoften
tried to make themselves great with a big
acquisition or merger. They failed to grasp the
simple truth that while you can buy your way to
growth, you cannot buy your way to greatness.
Jim Collins/Time/2004
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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 Im not sure were actually innovating.
Our challenge is to take nanotechnology into the
future, to do personalized medicine Jeff
Immelt/2005
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It is not the strongest of the species that
survives, nor the most intelligent, but the one
most responsive to change. Charles Darwin
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It is generally much easier to kill an
organization than change it substantially.
Kevin Kelly, Out of Control
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C.E.O. to C.D.O.
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A.W.O.L.BASICS
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Franchise Lost! TP How many of you 600
really crave a new Chevy?
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Ford, GM and Chrysler do not just make cars
expensively they make bad cars expensively.
Investec analyst, International Herald, 0805.06
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Sluggish Obese Unimaginative More Sluggish
More Obese More Unimaginative Even More
Sluggish Even More Obese Even More
Unimaginative NISSAN RENAULT GM
Innovative Challenger for Toyota????
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New Economy?!Genentech09, Amgen09 gt Merck09
(70K-3/394B-5)
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BASICSK.I.S.S.
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People.Product.Clients.Execution.Enthusiasm.E
xcellence.
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Sir Richards RulesFollow your passions.Keep
it simple.Get the best people to help
you.Re-create yourself.Play.Source Fortune
on Branson
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People.Product.Clients.Execution.Enthusiasm.E
xcellence.Relentlessness.
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People.Product.Clients.Execution.Enthusiasm.E
xcellence.Relentlessness. Senility.
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ForgetgtLearnThe problem is never how to get
new, innovative thoughts into your mind, but how
to get the old ones out. Dee Hock
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A pattern emphasized in the case studies in this
book is the degree to which powerful competitors
not only resist innovative threats, but actually
resist all efforts to understand them, preferring
to further their positions in older products.
This results in a surge of productivity and
performance that may take the old technology to
unheard of heights. But in most cases this is a
sign of impending death. Jim Utterback,
Mastering the Dynamics of Innovation
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The Perils of Conservatism/Industry
Leadership Good management was the most
powerful reason leading firms failed to stay
atop their industries. Precisely because these
firms listened to their customers, invested
aggressively in technologies that would provide
their customers more and better products of the
sort they wanted, and because they carefully
studied market trends and systematically
allocated investment capital to innovations that
promised the best returns, they lost their
positions of leadership. Clayton Christensen,
The Innovators Dilemma
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EXCELLENCE. THE WORD.
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SynonymsPurityTranscendenceVirtueEleganceMaj
estyAntonymsMediocrity
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EXCELLENCE. GAMECHANGER.
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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
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ExIn 1982-2002/Forbes.comDJIA 10,000 yields
85,000 EI 10,000 yields 140,050
Forbes/Excellence Index /Basket of 32
publicly traded stocks
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EXCELLENCE. ASPIRATION.
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Why in the world did you go to Siberia?
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Business (at its best) An emotional, vital,
innovative, joyful, creative, entrepreneurial
endeavor that elicits maximum concerted human
potential in the wholehearted service of
others.Excellence. Always.Employees,
Customers, Suppliers, Communities, Owners,
Temporary partners
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To me business isnt about wearing suits or
pleasing stockholders. Its about being true to
yourself, your ideas and focusing on the
essentials. Richard Branson
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EXCELLENCE. DEFINED.
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Great Companies SET THE AGENDA. (PERIOD.)
disturb the sleep of
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AGENDA SETTERS Set the Table/ Pioneers/
Questors/ AdventurersUS Steel Ford Toyota
Sears GM ITT The Gap Limited WalMart
Tesco PG 3M Intel IBM Apple Nokia
Cisco Dell MCI Sun Microsoft Google
Enron Schwab GE Laker Southwest People
Express Ogilvy Virgin eBay Amazon Sony
Amgen BMW CNN Nike
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Built to Last vs Built for ImpactBut what if
former head of strategic planning at Royal Dutch
Shell Arie De Geus is wrong in suggesting, in
The Living Company, that firms should aspire to
live forever? Greatness is fleeting and, for
corporations, it will become ever more fleeting.
The ultimate aim of a business organization, an
artist, an athlete or a stockbroker may be to
explode in a dramatic frenzy of value creation
during a short space of time, rather than to live
forever. Kjell Nordström and Jonas
Ridderstråle, Funky Business
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GM25/50-75 Built to last????
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TP1 Netscape!Where would you rather have
worked for those 5 years, Netscape or
IBM-HP-Microsoft-Oracle? (Where, 25 years from
now, would you rather to be able to tell
someonee.g., grandchildthat you worked?)
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NO LAST WORD
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SP Stability Ratings
1985 2006Low Risk
41 13 Average Risk
24 14High Risk 35
73Likelihood of stable longterm earnings
growthSource Fortune (2 October 2006)
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No Last word models. Period.
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U.S. SteelFord GMIBMMacysSearsMicrosoft?D
ell?WalMart?
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Seeking Growth in Urban Areas, WalMart Gets
Cold Shoulder WSJ (09.25.06)
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EXCELLENCE. INNOVATE. OR. DIE.
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A focus on cost-cutting and efficiency has
helped many organizations weather the downturn,
but this approach will ultimately render them
obsolete. Only the constant pursuit of innovation
can ensure long-term success. Daniel Muzyka,
Dean, Sauder School of Business, Univ of British
Columbia
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EVERYTHING YOU THOUGHT YOU KNEW ABOUT
INNOVATION IS WRONG
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What We Know For Sure About InnovationBig
mergers by large dont workScale is
over-ratedStrategic planning is the last refuge
of scoundrelsFocus groups are counter-productive
Built to last is a chimera (stupid)Success
killsForgetting is impossibleRe-imagine is a
charming ideaOrderly innovation process is an
oxymoronic phrase ( Believed only by morons
with ox-like brains)Tipping points are easy to
identify long after they will do you any
goodFacts arentAll information making it to
the top is filtered to the point of danger and
hilaritySuccess stories are the illusions of
egomaniacs (and gurus)If you believe the
memoirs of CEOs you should be institutionalizedH
erd behavior (XYZ is hot) is ubiquitous and
amusingTop teams are DittoheadsCEOs have
little effect on performanceExpert prediction
is rarely better than rolling the dice
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The Mess Is the Message! LIMITS TO FORMAL
STRATEGY.
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Recently I asked three corporate executives what
decisions they had made in the last year that
would not have been made were it not for their
corporate plans. All had difficulty identifying
one such decision. Since all of the plans are
marked secret or confidential, I asked them
how their competitors might benefit from
possession of their plans. Each answered with
embarrassment that their competitors would not
benefit. Russell Ackoff (from Henry Mintzberg,
The Rise and Fall of Strategic Planning)
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We are in a brawl with no rules. Paul Allaire
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S.A.V.
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InnoTacs
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We become who we hang out with!
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Measure Strangeness/Portfolio
QualityStaffConsultantsVendorsOut-sourcing
Partners (, Quality)Innovation Alliance
PartnersCustomersCompetitors (who we
benchmark against) Strategic Initiatives
Product Portfolio (LineEx v. Leap)IS/IT
ProjectsHQ LocationLunch MatesLanguageBoard
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The Bottleneck Is at the Top of the
BottleWhere are you likely to find people
with the least diversity of experience, the
largest investment in the past, and the greatest
reverence for industry dogma At the top!
Gary Hamel/Harvard Business Review
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futuremark
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To grow, companies need to break out of a
vicious cycle of competitive benchmarking and
imitation. W. Chan Kim Renée Mauborgne,
Think for Yourself Stop Copying a Rival,
Financial Times/2003
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How do dominant companies lose their position?
Two-thirds of the time, they pick the wrong
competitor to worry about. Don Listwin, CEO,
Openwave Systems/WSJ
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try it. Try it. Try it. Try it. Try it. Try it.
Try it. Try it. Try it. Try it. Try it. Try it.
Try it. Try it. Try it. Try it. try it. Try it.
Try it. try it. Try it. Try it. Try it. Try it.
Try it.
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READY.FIRE!AIM.Ross Perot (vs Aim! Aim!
Aim! /EDS vs GM/1985)
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READY.FIRE!AIM.Ross Perot (vs Aim! Aim!
Aim! /EDS vs GM/1985)
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This is so simple it sounds stupid, but it is
amazing how few oil people really understand that
you only find oil if you drill wells. You may
think youre finding it when youre drawing maps
and studying logs, but you have to drill.
Source The Hunters, by John Masters, Canadian
O G wildcatter
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You only find oil if you drill wells.
Source The Hunters, by John Masters, Canadian
O G wildcatter
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drill.
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We have a strategic plan. Its called doing
things. Herb Kelleher
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do things.
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Experiment fearlesslySource BW0821.06, Type
A Organization Strategies/ How to Hit a Moving
TargetTactic 1
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You miss 100 percent of the shots you never
take. Wayne Gretzky
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tolerate encourage? failure
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FAIL, FAIL AGAIN. FAIL BETTER. Samuel Beckett
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Fail . Forward. Fast.High Tech CEO,
Pennsylvania
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Fail faster. Succeed Sooner.David
Kelley/IDEO
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Sams Secret 1!
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Reward excellent failures. Punish mediocre
successes.Phil Daniels, Sydney exec
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Speed/ Tempo
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We dont sell insurance anymore. We sell
speed. Peter Lewis, Progressive
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He who has the quickest O.O.D.A. Loops
wins!Observe. Orient. Decide. Act. /Col. John
Boyd
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bet the farm
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Immelt is now identifying technologies with
which GE will systematically set out to
build entirely new industries
StrategyBusiness, Fall 2005
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No Wiggle Room! Incrementalism is
innovations worst enemy. Nicholas
Negroponte
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Beware of the tyranny of making Small Changes
to Small Things. Rather, make Big Changes to Big
Things. Roger Enrico, former Chairman,
PepsiCo
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Power Tools For Power Strategies
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On NELSON other admirals more frightened of
losing than anxious to win
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Conscious measurement
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Innovation Index How many of your Top 5
Strategic Initiatives/Key Projects score 8 or
higher out of 10 on a Weird/ Profound/
Wow/Game- changer Scale?
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Excellence The SE22 ORIGINS OF SUSTAINABLE
ENTREPRENEURSHIP
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SE22/Origins of Sustainable
Entrepreneurship 1. Genetically disposed to
Innovations that upset apple carts (3M, Apple,
FedEx, Virgin, BMW, Sony, Nike, Schwab,
Starbucks, Oracle, Sun, Fox, Stanford
University, MIT) 2. Perpetually determined to
outdo oneself, even to the detriment of
todays winners (Apple, Cirque du Soleil,
Nokia, FedEx) 3. Treat History as the Enemy
(GE) 4. Love the Great Leap/Enjoy the Hunt
(Apple, Oracle, Intel, Nokia, Sony) 5. Use
Strategic Thrust Overlays to Attack Monster
Problems (Sysco, GSK, GE, Microsoft) 6. Establish
a Be on the COOL Team Ethos. (Most PSFs,
Microsoft) 7. Encourage Vigorous
Dissent/Genetically Noisy (Intel, Apple,
Microsoft, CitiGroup, PepsiCo) 8. Culturally as
well as organizationally Decentralized
(GE, JJ, Omnicom) 9. Multi-entrepreneurship/Many
Independent-minded Stars (GE, PepsiCo)
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SE22/Origins of Sustainable
Entrepreneurship 10. Keep decentralizingtireles
s in pursuit of wiping out Centralizing
Tendencies (JJ, Virgin) 11. Scour the world for
Ingenious Alliance Partners especially
exciting start-ups (Pfizer) 12. Acquire for
Innovation, not Market Share (Cisco, GE) 13.
Dont overdo pursuit of synergy (GE, JJ, Time
Warner) 14. Execution/Action Bias Just do it
dont obsess on how it fits the business
model. (3M, J J) 15. Find and Encourage and
Promote Strong-willed/ Hyper-smart/Independe
nt people (GE, PepsiCo, Microsoft) 16. Support
Internal Entrepreneurs (3M, Microsoft) 17. Ferret
out Talent anywhere/No limits approach to
retaining top talent (Virgin, GE, PepsiCo)
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SE22/Origins of Sustainable Entrepreneurship 1
8. Unmistakable Results Accountability focus
from the get-go to the grave (GE, New York
Yankees, PepsiCo) 19. Up or Out (GE, McKinsey,
big consultancies and law firms and ad
agencies and movie studios in general) 20.
Competitive to a fault! (GE, New York Yankees,
News Corp/Fox, PepsiCo) 21. Bi-polar
Top Team, with Unglued Innovator 1,
powerful Control Freak 2 (Oracle, Virgin) (Watch
out when 2 is missing Enron) 22.
Masters of Loose-Tight/Hard-nosed about a very
few Core Values, Open-minded about
everything else (Virgin)
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HOW THE COAST GUARD GETS IT RIGHT Headline,
Time, 10.31.2005AutonomyFlexibilityPerhaps
the most important distinction of the Coast
Guard is that it trusts itself
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EXCELLENCE. 4/40.
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4/40
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De-cent-ral-iz-a-tion!
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The True Logic of Decentralization6 divisions
6 tries6 divisions 6 DIFFERENT leaders
6 INDEPENDENT tries Max probability of
win6 divisions 6 very DIFFERENT leaders 6
very INDEPENDENT tries Max probability of
far out/3-sigma winDriver Law of
Large s
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Ex-e-cu-tion!
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Execution is the job of the business leader.
Larry Bossidy Ram Charan/ Execution The
Discipline of Getting Things Done
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Execution is a systematic process of
rigorously discussing hows and whats,
tenaciously following through, and ensuring
accountability. Larry Bossidy Ram Charan/
Execution The Discipline of Getting Things Done
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Never forget implementation boys. In our work
its what I call the missing 98 percent of the
client puzzle. Al McDonald
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Ac-count-a-bil-ity!
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GE has set a standard of candor. There is no
puffery. There isnt an ounce of denial in the
place. Kevin Sharer, CEO Amgen, on the GE
mystique (Fortune)
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615A.M.
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????????Work Hard gt Work Smart
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EXCELLENCE. BEDROCK.LEADERSHIP.
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EXCELLENCE.ENTHUSIASM.ENERGY. PASSION.
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Nothing is so contagious as enthusiasm.
Samuel Taylor Coleridge
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Whenever anything is being accomplished, I have
learned, it is being done by a monomaniac with a
mission. Peter Drucker
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Most important, he upped the energy level at
Motorola. Fortune on Ed Zander/08.05
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EnthusiasmEnergyExuberanceVoracious
CuriosityIrritability/Dis-satisfactionRelentless
nessSelf-relianceCloser (Execution)excellence

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Everyone lives by selling something. Robert
Louis Stevenson
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EXCELLENCE. RELENTLESSNESS.
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RE-LENT-LESS-NESS
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One of my superstitions had always been when I
started to go anywhere or to do anything, not to
turn back , or stop, until the thing intended was
accomplished. Grant
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EXCELLENCE. AGILITY.
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The most successful people are those who are
good at Plan B. James Yorke, mathematician,
on chaos theory, in The New Scientist
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EXCELLENCE. SHOWING UP.
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You must be the change you wish to see in the
world.Gandhi
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25
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EXCELLENCE. STRETCH.
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The greatest dangerfor most of usis not that
our aim istoo highand we miss it,but that it
istoo lowand we reach it.Michelangelo
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Kevin Roberts Credo1.
Ready. Fire! Aim.2. If it aint broke ... Break
it!3. Hire crazies.4. Ask dumb questions.5.
Pursue failure.6. Lead, follow ... or get out of
the way!7. Spread confusion.8. Ditch your
office.9. Read odd stuff.10. Avoid moderation!
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Insanely great
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"Life is not a journey to the grave with the
intention of arriving safely in one pretty and
well preserved piece, but to skid across the line
broadside, thoroughly used up, worn out, leaking
oil, shouting GERONIMO! Bill McKenna,
professional motorcycle racer
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EXCELLENCE. DRILL.
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You only find oil if you drill wells. The
Hunters, by John Masters, Canadian O G
wildcatter
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Its always showtime. David DAlessandro,
Career Warfare
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EXCELLE ALWAYS.