The Circle of Innovation Hardcover - 1997

First line

You've heard of the "global village."

Excerpt

1 B-I-G Idea (x15)

The Circle of Innovation is the overarching idea which animates this book. Here's a quick preview of the 15 stops along the way . . .

DISTANCE IS DEAD. We're all next-door neighbors. Incrementalism is innovation's worst enemy. Mid-to long-term: Business is about augmenting the top line...not cost minimization.

DESTRUCTION IS COOL! CDO...Chief Destruction Officer. Easier to KILL an organization--and repot it--than change it substantially. Learn to swallow it: DESTRUCTION IS JOB NO. 1 (before the competition does it to you).

YOU CAN'T LIVE WITHOUT AN ERASER. Forgetting--not learning--is the highest art. Think: ORGANIZED forgetting. STRATEGIC forgetfulness. How? Cherish WASTE...SILLINESS...FAILURE. i.e.: Ready. FIRE! Aim.

WE ARE ALL MICHELANGELOS. Convert every "jobholder" into a BUSINESS-PERSON. Convert every job into a BUSINESS. "Business" is a very different--and more encompassing--word than "empowerment." Keys: trust/respect/Michelangelos of Housekeeping/Michelangelos of Telemarketing. Boss as . . . RELENTLESS ARCHITECT OF THE POSSIBILITIES OF HUMAN BEINGS.

WELCOME TO THE WHITE-COLLAR REVOLUTION. IF YOU CAN'T SAY (SPECIFICALLY) WHY YOU MAKE YOUR COMPANY A BETTER PLACE...YOU'RE OUT! As of Now: ME, INC!/TAKE IMMEDIATE RESPONSIBILITY FOR CHANGE!/YOU (ME) ARE A BRAND. (Perform a PERSONAL BRAND EQUITY EVALUATION...NOW!) There are no guarantees...and that can be liberating (i.e., stomp out indentured servitude to BigCorp).

ALL VALUE COMES FROM THE PROFESSIONAL SERVICES. Make staff units The Vital Centers of Intellectual Capital Accumulation...rather than the prime sources of bureaucratic drag. Tool: Turn Purchasing (HR, IS, Finance) into PURCHASING, INC....a full-fledged professional service firm . . . devoted to TRANSFORMATIONAL projects/awesome CLIENT service/WOW!

THE INTERMEDIARY IS DOOMED. (Big) organizations without employees. EVERY task your organization performs is performed BETTER (higher quality, faster, more imaginatively) by some hyper-fast specialist (somewhere) who lives/eats/sleeps/breathes the narrow task. FLAT is too modest a term. (By far.) We are gutting the "center"of vertical enterprises. THE INTERMEDIARY IS DYING/DEAD! Hail the disintermediated/network "organization"...transparent to its customers (and all members of the value-creation chain).

THE SYSTEM IS THE SOLUTION. (1) Systems are the glue..in ephemeral/network "orgs." (2) Systems--great systems--are not about "nuts and bolts." They are/can be...BEAUTIFUL. Systems Engineering Dept.? NO! Dept. of Beauty?? YES!! It's W-A-Y beyond reengineering.

CREATE WAVES OF LUST. (Almost) everything works. Quality per se is not the advantage it once (recently) was. So: Just shout "NO!" to . . . commoditization (of anything)/me-too/look-alikes. Embrace: WOW!!!/lusted-after products and services! Ultimate sin: WHEN WE DO IT "RIGHT," IT'S STILL PRETTY ORDINARY.

TOMMY HILFIGER KNOWS. In a (very) crowded marketplace...branding is (far) more important than ever before. It is...THE AGE OF THE BRAND! (1) Anything can be branded (e.g., chicken, milk). (2) Branding is as much for the very wee outfit as for Levi's or Nike or Starbucks or Intel (Inside).

BECOME A CONNOISSEUR OF TALENT. RECRUIT DIVERSITY! HIRE CRAZIES! Make REVOLUTIONARY RENEWAL everyone's (LITERAL) Job No. 1. We are...ALL...RDAs... Rapidly Depreciating Assets. Therefore: (Continuing) Vitality = (Continuing) Commitment to (Bold/Formal) Renewal Programs...by...EVERYONE.

IT'S A WOMAN'S WORLD. Women purchase/are purchasing agents for well over half the U.S. GDP (commercial and consumer goods). Almost no BigCo. "gets it"--financial services, healthcare, autos, business services, etc., etc. I.e., "gets" catering-to-women-as-premier-purchasers. WHY?? It takes TOTAL TRANSFORMATION--not a "woman's initiative"--to take advantage of this bizarrely neglected COMMERCIAL OPPORTUNITY NO. 1.

LITTLE THINGS ARE THE ONLY THINGS. As markets get more and more (and more) crowded . . . DESIGN is often the best "tool"--in services and manufacturing--for sustainable differentiation. Sad fact: Most companies do anything but OBSESS (e.g., Braun-like, Sony-like) on design. Personal design sensitization is Step No. 1: Home in on (OPEN YOUR EYES TO) the pervasive role that design plays in damn near everything--signage, forms, typeface, color (a big deal), etc., etc.

LOVE ALL, SERVE ALL. Even today (WHY? WHY?? WHY???) a ridiculously small number of sizable firms seek a sustainable edge through incredible service--Disney- or Caterpillar-style. To get from (tawdry) here to (Olympian) there takes a wholesale commitment to nothing less than reconceiving the way business is done in your market/niche.

WE'RE HERE TO LIVE LIFE OUT LOUD. Transformational leaders will eschew "hands off." They will be bizarrely focused...tell the truth...and live life on the LUNATIC FRINGE. I.e., revolutionary times call for revolutionary zeal/leaders.


15 IDEAS = 1 IDEA = INNOVATION/TOP-LINE OBSESSION/WOW!!

* * *
The following excerpt is from Chapter 3, You Can't Live Without An Eraser

John Mickelthwaite, management editor for The Economist, recently produced a masterful summary of Silicon Valley's success secrets. (It's the best I've seen in 30 years.) To wit:


Failure tolerated. "Bankruptcy" in The Valley, Mickelthwaite writes, "is treated like a dueling scar in a Prussian officer's mess." It's no sin. It's almost a requisite.

As a three-decade denizen of The Valley, I think it's an accurate statement...and maybe the most important one that Mickelthwaite makes. Another Valley commentator, Michael Malone, offers his own version of this: "Failure is Silicon Valley's No. 1 strength." Amen!

Treachery tolerated. Jumping from company to company...swapping secrets over brews or the latest-release Chardonnay...or across the Nautilus machines...The Valley is not the home to traditional loyalty. The ideas flow...and flow. Such Brownian motion is one of its success keys.

Risk seeking. One Valley venture capitalist lays out his expectations for any set of 20 investments: Four will go bankrupt, six will lose money, six will do okay, three will do well...and one will hit the jackpot. That is, there's hardly an expectation of a 1.000 batting average. Not even close!

Reinvest. The enormous positive cash flow generated in The Valley is...by and large...returned in reinvestments in new enterprises.

Enthusiasm for change. "Only the paranoid survive" is the fabled tradition, associated with those words by Intel's legendary chairman Andy Grove. Cannibalization is key...remember the word according to Hewlett-Packard chairman Lew Platt. "Obsolete ourselves or the competition will"--that's the way Mickelthwaite puts it.

Promotion on merit. There is substantial "openness to immigrants and to women," Mickelthwaite writes at one point. Understatement! If the immigrants split, the Valley would have to hang up a "Closed for Business" sign. In general, things are moving so fast that politics counts for little...performance counts for all. It's no small thing!!

Obsession with the product. The Valley, Mickelthwaite says, is hooked on "the cool idea." (That is, the latest cool idea.) The No. 1 characteristic of long-term innovators, according to a major study, is that they are "in love with their product." The "it" is it...in The Valley.

Collaboration. Generations are months. Sometimes weeks (at least in Internet World). The answer: Don't reinvent the wheel. Add your new (hopefully big) twist and quickly blend with tested bits borrowed from anyone and everyone.

Variety. The Valley consists of gazillions of fly-by-night outfits, here today ...gone later today. And also a few Hewlett-Packards and Intels. It's the mix of the high-stature, in-it-for-the-long-haul firms and the overnight stars (most of whom become overnight flops) that, again, feeds that...ALL-IMPORTANT BROWNIAN MOTION.

Anybody can play. It's the old-fashioned American dream brought to life. "I can be rich"--Mickelthwaite says that each and every Valley denizen believes that. Perhaps an exaggeration. But not much of one.



I think this is a superb list. And I believe these 10 traits go a long way toward explaining The Valley's unique success. More important to this discussion: I believe this list can be translated--exactly--to the individual enterprise. Think about it! How does your company--or department--score on each of these 10 traits??

Media reviews

"[A]...breakthrough for the genre....Peters is not only the father of the postmodern corporation...he may well have produced the first piece of postmodern management literature."--Los Angeles Times

"No matter where you are in your career, this book is a must read.  The younger your thinking the more you'll get out of it."  --The Cleveland Plain Dealer

"A manual for businesses that want to survive and thrive in a world continually undergoing change."  --St. Petersburg Times

"Tom Peters has done it again."--J.W. Marriot, Jr., CEO, Marriot International, Inc.

"[Peters] yields potent insights...his keen attention to the human element in organizational growth and change shines through...No cutting-edge manager can afford to ignore it."--Publishers Weekly


From the Trade Paperback edition.