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Participant Materials

The Circle of Innovation


A Conversation With

Tom Peters

Satellite seminar
Produced by WNET/New York Presented by
SM

1997 PBS The Business Channel and Excel/, A California Partnership

The Circle of Innovation


A Conversation with Tom Peters

Dear Participant
Welcome to PBS The Business Channels satellite presentation of The Circle of Innovation: A Conversation With Tom Peters. The incomparable Tom Peters will shake up your perspective on how you do business. Youll learn how to look at yourself and your company from a different point of view, from an innovative point of view. The program, based on Tom Peters new book, The Circle of Innovation: You Cant Shrink Your Way to Greatness, will explain why it is crucial for organizations to think and act innovatively. In a world that is in a constant state of imbalance, constantly changing, constantly chaotic, innovation is the only way individuals or organizations are going to survive. Tom Peters will show you how. In fact, hell explain how to create an image for yourself, your product, or your service an image that can become so prevalent in the minds of others that they might actually lust after it. Youll also learn how mistakes are the major motivators behind innovation and how an eye to the purchasing power of women can be the savvy marketers secret weapon. And finally, Tom Peters will show that innovation requires you to cultivate your own talents and at the same time, cultivate the talents of the people who work for you. The next two hours are going to fly by. Get ready to innovate!

The Circle of Innovation


A Conversation with Tom Peters

Program Outline

The Circle of Innovation


A Conversation With Tom Peters Welcome
Charlie Rose, moderator

Part 1
Lust in Spades video presentation studio discussion questions and answers

Part 2
ReadyFireAim video presentation studio discussion questions and answers

Part 3
Its a Womans World video presentation studio discussion questions and answers

Part 4
Talent Rules video presentation studio discussion questions and answers

Farewell

The Circle of Innovation


A Conversation with Tom Peters

What you will learn

By participating in this satellite seminar with Tom Peters, you will learn how to apply innovation to your own work situation. Specifically, you will be able to:

Lust in Spades
Define innovation and its role in the success of a business/business person Provide examples of companies and individuals who have created a wave of lust for their products or services Recognize poor design in everyday things Recognize great design in everyday things Revise a form you use with attention to detail

ReadyFireAim
Explain how mistakes can be beneficial to an individual and/or organization Identify two mistakes you have made that led to an innovative outcome Define rapid prototyping Identify companies where rapid prototyping is an accepted way of doing business

Its A Womans World


Provide examples of companies that get it women are a major force in the economic world today Provide examples of how companies can change how they do business to take advantage of women as resources, advisors, and consumers Describe ways to turn marketing around to be aimed at women for traditionally male products

Talent Rules
Describe ways that companies gain access to the talent they desire for their business Provide examples of how an individual can market their talent to desirable employers Identify two things you do that you are known for Complete your own Personal Brand Equity Evaluation Complete your own Renewal Investment Plan

The Circle of Innovation


A Conversation with Tom Peters

How to get the most from this seminar

During the seminar...


Take notesjot down your ideas and inspirations for what you can do with this information when you go back to work...

After the seminar...


Read Tom Peters book, The Circle of Innovation: You Cant Shrink Your Way to Greatness Visit the web site at: www.PBSbusinesschannel.com Begin turning your ideas into action Complete your own Personal Brand Equity Evaluation Complete your own Renewal Investment Plan Take a step toward design mindfulness by creating a Design Opportunity Kit

The Circle of Innovation


A Conversation with Tom Peters

Participant Evaluation

Your comments about todays seminar are greatly appreciated. At the end of the program, please answer all questions and return this form to your site coordinator or mail to the address below.

The Circle of Innovation A Conversation With Tom Peters Satellite Seminar

1. Todays date: __________

Your city, state: ____________________

2. On a scale of 1 10 (with 10 being the highest), rate this program in terms of its educational value to you: 1 2 3 4 5 6 7 8 9 10

3. If asked to describe what you like best about todays program, which of the following phrases would you use? knowledgeable presenter current important topic in-depth instruction active involvement interaction with others good participant materials effective Q&A ideas for immediate use the right length of time effective program flow other: 4. If asked to describe what you didnt like, which of the following phrases would you use? program too long program difficult to follow lack of local participation out-dated materials boring presentation presenter hard to follow information not usable inadequate participant materials poor audio/visual quality useless Q&A time other: 5. What one thing will you try to do as a result of taking part in this program?
Return this form to your site coordinator or mail to: PBS The Business Channel Attn: Cutting-edge seminars 1320 Braddock Place Alexandria, VA 22314-1698

SM

Please feel free to add additional comments on the back of this sheet.

The Circle of Innovation


A Conversation With

Tom Peters

The Circle of Innovation


A Conversation with Tom Peters

The Circle of Innovation

After Kaizen (I) Innovation No. 1

After Kaizen (II) Living Out of Control

After Decentralization (I) Celebrating Destruction

After Analytic Detachment Leading with Passion

After Decentralization (II) Enshrining Forgetfulness

After TQM (VI) A Service/Loyalty Revolution

After Empowerment (I) Getting Everyone Down to Business

After TQM (V) Winning by Design

After Empowerment (II) Branding Me Inc.

After TQM (IV) Getting Womans World

The only sustainable competitive advantage comes from out-innovating the competition. James Morse

After Re-engineering (I) PSF 1.0/Conversion Kit

No business can cut its way to success. Bill Dahlberg

After TQM (III) Toward Curious Corp.

Incrementalism is innovations worst enemy. Nicholas Negroponte

After Re-engineering (II) Embracing Unlimited Dis-intermediation

After TQM (II) The Rise (and Rise) of the Brand

After Re-engineering (III) The Dept. of Beauty

After TQM (I) Just Say No to Commoditization

The Circle of Innovation


A Conversation with Tom Peters

Program Overview

Part 1 Lust In Spades: Being Innovative to Create Demand


A handful of innovative companies have done the improbable made customers crave their products and services. They have succeeded because of their unwillingness to succumb to commoditization. They innovate. In other words, they wont let their product become just another hamburger. And who wants to drink just any cup of coffee anymore. Wouldnt you love to have some Starbucks right about now? Branding is one way to guarantee you stay in the publics mind; that is, working to ensure people put your name with a product or service. Think about plastic storage containers (Rubbermaid) or flavored iced tea (Snapple). Some companies focus on design innovation to stand out and be better than the rest. Have you ever noticed how some pens feel better in your hand than others? You might even write more neatly because of it. And that chair you sit in for at least eight hours a day who designed that? A genius or Attila the Hun?

Part 2 ReadyFireAim
Mistakes are bound to happenand thats OK! You cant live life without an eraser. In other words, mistakes are inevitable, abundant, and even desirable, and they lead to innovation. MCI has a rapid prototyping system whereby innovative, new ideas are encouraged, and the development of those ideas are allowed to happen at uncharacteristic speed. If they work, great! If not, there hasnt been too much time invested, so the loss is not unmanageable. The CEO of MCI, Bert Roberts, likes to say that their growth strategy consists of running like hell, then changing direction.

Part 3 Its A Womans World


Innovative companies realize that women are major purchasers in the marketplace and have begun reevaluating their marketing strategies. They are understanding the importance of innovation in their business practices if they want to compete and win in todays marketplace. Sears has completely revamped their advertising strategies, and even the layout of their stores to entice women to shop there. Terry Precision Cycling (owned by Georgena Terry) figured out something interesting bike seats designed for men and by men hurt women. She designed a new bike and seat designed to fit the womans form more comfortably. The company is growing at a rate of about 30 percent per year. Even Ford has changed its emphasis on marketing to women from 40 percent to 60 percent. In every area of commerce, from recreation to finance, companies are innovating and learning, Its a womans world.

The Circle of Innovation


A Conversation with Tom Peters

Part 4 Talent Rules


Talent is important to both the employer and the employee. And companies are implementing new strategies to find the talent they want. Innovative companies like Cisco have made it their business to know whos tops in their business. Then, they go out and get them. But you also need to discover your own talents, realize your strengths, and use them to your advantage. You can do this with Tom Peters Personal Brand Equity evaluation tool, among other strategies that well talk about. Be innovative for your own benefit. See what different, exciting things lie ahead for you.

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The Circle of Innovation


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Discussion Questions

Part 1 Lust In Spades: Being Innovative to Create Demand


1. The mainstream is just more costly, more formulaic, more cluttered with special effects.
Robert Redford, Sundance Film Festival founder, actor, director, producer

How can you make sure your company doesnt meander in the mainstream, following its own path to sameness?

2a. Name something that you/your company does well.

2b. Name someone else/another company who also does it well.

2c. (Ho Hum.) Now What can you do to make yourself/your company STAND OUT. (Innovation!)

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The Circle of Innovation


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3. The Ritz-Carlton has a credo: The Ritz-Carlton experience enlivens the senses, instills well being, and fulfills even the unexpressed wishes and needs of our guests. Can you think of three things you can do at your place of business that will parallel the Ritz-Carlton experience for your customers?

4. Design Mindfulness Think of something you find a pleasure to usea Stanley hammer, a Braun coffee pot, a Gillette Lady Sensor razor, a Rubbermaid plastic container

Now, think of something that you just cant get, no matter how hard you trya VCR clock, a Braidini, the alarm clock in your hotel room, doing the pre-sets on a car radio, performance evaluation form, how you calculate sick time, elevators/escalators not working, new copy machines

What can you do to make the design work better for you and/or those around you?

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The Circle of Innovation


A Conversation with Tom Peters

5. Fill in the blank with the first name that comes to mind. Name a computer chip maker Name a video rental business Name an all-news network Name a long-distance telephone company Name a sport shoe maker Name a coffee shop chain Name a flavored iced tea maker Thats a Good Thing! Thats Branding! 6. How can you use branding techniques back on the job to help you/your department/your company stand out?

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The Circle of Innovation


A Conversation with Tom Peters

Discussion Questions

Part 2 ReadyFireAim
7. What does ReadyFireAim mean?

8. Fail Forward Fast. Mistakes are the Mother of Innovation. You Cant Live Without an Eraser. Think about the last doozey of a mistake you made. What was the initial outcome of the mistake?

What was the secondary outcome, or the innovation, that resulted from that mistake?

9. MCI is know for rapid prototyping, which is a way of taking an idea from its first thought to fruition quickly and with as little hassle as possible. Does your business allow this kind of growth (at the risk of making a mistake) or must you have all the is dotted and ts crossed before you can hold your first meeting to present a new idea? What are the advantages of rapid prototyping?

What are the disadvantages of rapid prototyping?

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The Circle of Innovation


A Conversation with Tom Peters

Discussion Questions

Part 3 Its a Womans World


10. Who are some companies that get it i.e., they understand that women are a major force in the economic world today?

11. How can companies change how they do business to take advantage of women as resources, advisors, and consumers?

12. Are there examples of anything that are not marketed toward women? How would you take that business/product/service and gear it more toward women?

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The Circle of Innovation


A Conversation with Tom Peters

Discussion Questions

Part 4 Talent Rules


13. Why do you make your company a better place?

14. How can you develop your talents to keep/make yourself desirable to your own or another company? The following traits are in your hands. What do you do to enhance each of these for yourself? a. Time management (Do you plan your day each morning?)

b. Choice (Do you think you have a choice about where you work? Do you have a choice about which department you work in?)

c. Power (Powerlessness is a state of mind.)

d. Authority (Leading without Authority. Did Ghandi have formal authority?)

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e. Responsibility (If I dont do something, nothing is going to get better. Nathaniel Branden, author, Taking Responsibility: Self-Reliance and the
Accountable Life.)

f. Self-motivation (Why do you do what you do? Are you doing it for yourself or someone else? What do you find meaningful in your job?)

g. Career (Careers dont need to be a ladder. How has your career moved?)

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Personal Brand Equity Evaluation

1. I am known for (24 items); by next year at this time I plan also to be known for (12 items).

2. My current project is provocative/challenging me in the following (24 ways).

3. New learnings in the last 90 days include (24 items).

4. My public (local/regional/national/global) visibility program consists of (35 items).

5. Important new additions to my rolodex in the last 90 days are (25 names); important relationships nurtured include (13 names).

6. My principal rsum enhancement activity for the next 60-90 days is (1 item).

7. My rsum is specifically different than last years (at this time) in the following (13 ways).

1996 TPG Communications. All rights reserved.

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RIP*

To: Me From: Me Date: Subject: Investment Plan I,__________________________, hereby commit to invest 20 percent of my time, directly or indirectly, on personal renewal. The following are my goals/activities for ___________. I will review these monthly with myself/spouse or significant other/best friend/small group of pals and encourage her/him/them to develop similar plans.

Activity

Goal

Date

*Renewal Investment Plan

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R.I.P./Sample Activities

Subscribe at home to Fast Company, Computerworld, Advertising Ageand review 1-3 hours per week Buy a home computer and spend 1 hour every 2 days perusing the Web Take one course at XYZ Community College Volunteer to coach/teach teens 1 night/week Sign up for a church/rotary/etc. committee...and make its activities a big part of my year Volunteer at work for a weird assignment that allows me to learn something completely different Start (join) a business-book reading group, which meets once every 3 weeks and studies in depth at least 5 books each year Plan my 1997 vacation as a learning event to a new country Schedule 1 lunch every 2 weeks with someone (way) outside my normal sphere of interest Form a support group with 24 others, which meets monthly for 12 hours to review progress on our formal R.I.P.s (Renewal Investment Plans)

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Design Opportunity Kit

Take a step toward Design Mindfulness. 1. Open your eyes Be alert. Start looking outEVERYWHEREfor little design-related things that irritate you. Create two folders: neat and crappy. Whenever you come across any thing that hits you as a good design idea, save it in the neat folder. Whenever you come across something that hits you as poor design, save it, too, but in the crappy folder. 2. Less-than-$10 buying spree Go on a buying spree for neat stuff (cheap, well-designed stuff). Post-Its, Bic pens, a postcard. The point here is to sensitize yourself to the idea that sterling design can come in 59-cent packagesas well as $59,000. (For more ideas on how to increase your design mindfulness, see Tom Peters book, The Circle of Innovation: You Cant Shrink Your Way to Greatness).

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Article Reprints

Building a Curious Corporation


What a distressing contrast there is between the radiant curiosity of the child and the feeble mentality of the average adult, Freud once wrote. Sad to say, hes got a point. In advanced societies, knowledge is the basis for almost all value. Corporations that wish to become knowledge-intensive must invest heavily in training and electronic networks. But to become knowledge-intensive as a matter of course calls for something that goes far beyond bits, bytes and hours in the classroom. Perhaps the management issue for the 90s, largely avoided by gurus and practitioners alike, is unleashing imagination. The question: How do you and I, as independent contributors on or off someones payroll, stay curious? And how do chiefs keep organizations imaginative? Hire curious people. How can you tell if people are curious? Easy. Theyve consistently avoided the mainstream: took a year off without pay to work in the inner city; keep bees as a lifelong hobby; set aside six weeks each year to travel abroad. If curiosity isnt on a persons rsum, dont expect it to bloom tomorrow in your business. The corollary is obvious: Dont hire incurious people. If they boast the solid gold resume (right school, right grades, right first job, right year for first promotion), watch out. Honest! Hire a few genuine off-the-wall sorts i.e., collect weirdos. In addition to seeking curious people in general, try to implant a few real head cases into your joint from time to time. Bankroll them until they can invent a wacky project that will spark the whole organization. Weed out the dullards. The fact is, you cant afford to have the incurious on your payroll. (This may include yourself. Think about it.) Insist that everyone takes vacations. All work and no play makes Jack a dull boy. Worry if Jack doesnt want to take a vacation; his eye may be too glued to the brass ring. In short, curiosity doesnt flourish among the burned-out, greasy-grind types. Support generous sabbaticals. If you havent shifted gears wildly in the last three or four years, youre headed for trouble. As a corporate leader, make such gear shifts policy. Foster new interaction patterns. Space management is a potent tool. Create a physical environment that (a) allows project teams to gather at a moments notice, (b) lets people clearly express their personalities, (c) encourages getting together and hanging out, and (d) aggressively ignores traditional functional groupings.

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Establish clubs, bring in outsiders, support off-beat educational programs. Expose everyone to break-the-mold activities: encourage like-minded hobbyists to form clubs that meet at work. Start a lecture series, not with business gurus, but with principal dancers from the local ballet, politicians and chefs from top restaurants. Vigorously support any educational desires, including those that are not job related. Measure curiosity. Its time for semi-annual performance reviews. Consider having each employee submit a one-page essay on: (a) the oddest thing Ive done this year off the job, (b) the craziest idea Ive tried at work, or (c) my most original screw-up, on the job or off. Using the answers to such questions, deal curiosity directly into the evaluation deck, near the top. Seek out curious work. At Britains Imagination (a marketing consultancy, more or less), founder Gary Withers, dubbed Britains Walt Disney by some pundits, says he wont take assignments that dont provide an opportunity to outdo the firms zaniest prior performance. Beware of taking on the big, prestigious job assignment that is as dull as can be. Boring clients make for boring companies (which is not to say that you cant find a way to spruce up assignments that, superficially, look dull). Model the way. If the chief isnt curious, then the troops arent likely to be (and thats an understatement). Body Shop founder Anita Roddick is as curious as they come and it rubs off on employees at more than 725 shops around the world. Teach curiosity. Brainstorming is not the answer to creativity. But it is an answer. There are techniques that can milk peoples wackier ideas. Invest heavily in making them centerpieces of your firms approach to solving all problems, mundane or grand. Make it fun. Not to have fun at work is a tragedy, bordering on the criminal. Curiosity and fun are handmaidens. Go out of your way to make laughter a workplace staple. Change pace. Go to work next Thursday and declare it miniaturegolf day. Hey, why not? Showing a training film this afternoon? Order popcorn for every participant. Curiosity has a lot to do with looking at the world through slightly cockeyed glasses. Strategies are OKd in boardrooms that even a child would say are bound to fail, said turnaround artist Victor Palmieri. The point is, there is never a child in the boardroom. Try these ideas, and you may end up with at least a virtual child or two in that boardroom and in the mailroom, too.

Tom Peters, August 1992

1992 TPG Communications. All rights reserved.

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Article Reprints

Innovativeness = Prototyping Effectiveness


Effective prototyping, writes technology guru Michael Schrage, may be the most valuable core competence an innovative organization can hope to have one around which an organization could build a successful culture. Thats bold language, from a normally circumspect business observer. Prototyping is it. A great prototyping culture is a great culture for innovation. Could it be that simple? My experience says: yes. Moreover, a flurry of research is starting to focus on the lead role prototyping styles per se play in a companys approach to new product and service development. Schrage expressed his view in The Culture(s) of Prototyping (Design Management Journal, Winter 1993), taking the aggressive posture that prototyping is a style of thinking, a complete system of language. Prototyping, he writes, becomes the media franca of the organization the essential medium for information, interaction, integration and collaboration. Or at least thats what it becomes in effective innovation cultures. For the rest, prototypes are little more than sales tools and technical stalking horses for the politically adept. The Eskimos have dozens of words for snow. Likewise, the vocabulary that surrounds prototyping at innovative companies is rich; and its thin amongst the slugabeds. Prototyping, Schrage adds, is the fundamental way in which organizations ask questions about manufacturability, functionality, feasibility, new materials, costs, appearance, usability/user interface and maintenance. Schrage contrasts spec driven organizations (that create elaborate prototypes, derived from detailed specifications written before any real-world testing is done) and prototype-driven corporations. Organizations like 3M and Sony, he writes, have lots of creative prototypes. Companies that have rigid review structureshave fewer, more elaborate, and more expensive prototypes. Schrage draws the analogy between prototyping approaches and physics. The grand tension between theoretical physicists (think, then do) and experimental physicists (do, then think) mirrors the difference between spec freaks and the just do it (prototype) nuts in enterprise. Prototyping also defines the organizational metabolism. Recalibrating the organizations sense of time, says Schrage, is one of the most dramatic ways to transform its values. When you are producing more prototypes in less time, Carnegie-Mellon professor Dan Droz told Schrage, you talk about them differently and treat them differently than folks who produce their trial balloons infrequently. In the panoply of stars, Schrage labels 3M a relentless prototyper. And Sony, where president Nobukyuki Idei claims that a hallmark of his firm is the brief time lapse between new product concept and rough working prototype: i.e., just one week. Microsoft and LSI Logic are also cultures in which mean-time-to-prototype, as Schrage labels it, is exceptionally quick.

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Some companies have addressed the issue of speed by introducing a rigid prototyping scheme unrelated to a projects particular characteristics. Harvard professors Steve Wheelwright and Kim Clark call it periodic prototyping. Regardless of whats going on, product teams at Honda and Motorola must produce regular working models. These de facto palpable benchmarks become the principal device for thinking through problems. Prototyping practices also profoundly affect organization structure. A by-product of an iterative, rapid prototyping culture is the destruction of organization barriers. Prototype-driven innovation, Schrage concludes, ends up promoting a radical deconstruction of existing organizational charts. Customer and supplier interaction with the producer are also more intimate in the best prototyping environments. Developing a prototyping culture is anything but straightforward. It is, literally, a culture, with all the subtlety that implies. Take, for example, prototyping media. Organizations that use inexpensive prototyping media, Schrage observes, tend to generate more prototypes than organizations that use more expensive medium. The strength of rough prototyping media, Carnegie-Mellons Droz adds, is that it becomes easier to play with ideas, possibilities and potentials. Their roughness transforms the prototype from a medium that answers questions into one that encourages questions. Then theres the politics of prototyping: for example, (1) who controls the prototype and (2) who gets to see it, and when. Do you just show it to fellow technocrats? How many levels of management are allowed access to prototypes? Some companies openly share prototypes. Or theres the Silicon Valley company where showing off prototypes, Schrage says, stops at the VP level. As one informant put it, Never show fools unfinished work. Ill come across a revealing quote in a business periodicalor get a fascinating question at a seminaror talk to someone sitting next to me on a plane. While still on the plane, in the latter case, I often end up phoning my office in Palo Alto and directly ordering up a new 35 mm slide. Forty-eight hours later, in Dusseldorf or Detroit, Im using the slide in a seminar for 600 people. Elaborating on the underlying story. Sometimes it falls flat. (Good-bye slide. Good-bye story.) Sometimes it begins to grow legs. In the course of the next few weeks the (successful) slide will find different homes in my seminars, as I test it, live. Often the slide per se will get me thinking. Ill notice kindred stories. Dig deeper into the original story. Make new slides. Some rejuggling of the overall presentation may occur, and in a handful of cases the seed-slide and its brothers and sisters become a completely new topic of conversation. Simultaneously, the little sets become the basis of syndicated columns, a book chapter or, on two occasions, a brand new book. Thanks to Michael Schrage, I now know what I am: a rapid prototyper. I have a passion for turning a gleam to a slide, a slide to a set of slides etc. Its the way I think. How do I know what I think until I see what I say, E.M. Forster wrote. Now theres a tribute to prototyping!

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Prototyping enthusiast Schrage admits his evidence is anecdotal. Me too. But can we go farther? Yes, say Kent Bowen, Kim Clark, Chuck Holloway and Steve Wheelwright, senior business school professors of manufacturing who formed the Manufacturing Vision Group and in 1994 gave us The Perpetual Enterprise Machine: Seven Keys to Corporate Renewal Through Successful Product and Process Development. The big seven include guiding visions, pushing the envelope, project leadership and organizationand prototyping rapid learning and early testing. Prototyping is largely under utilized, the authors write. The practice of using more prototypes early in the project and more prototypes that represent system interactions reduces the risk of failure and increases [project] payoffs. Prototypes, they add, are one of the most important tools a development team can use to resolve important questions quickly and unambiguously. In addition, prototypes provide a common understanding and [are an] integrating force for all members of the team regardless of the difference in function and culture. Bowen et al. tackle some of the same issues that Schrage does, such as timing. And offer hard-number evidence; for example, the cost of an engineering change is about $4,000 at the time of a predictive simulation (a relatively early prototype), $20,000 during testing before product releaseand $100,000 (!) per change after product release. The authors also provide a useful typology of prototypes: first, models and mockups. These include computer simulations and exciting new tools such as stereo-lithography by which a CAD image is directly converted into a solid plastic model. Then there are subsystems and mechanical prototypes. And, finally, full system and production prototypes. Prototypes which deal with issues of interaction and integration in complex projects merit special attention. In the past, products mostly have been developed as a series of suboptimal subsystems, then cobbled together right before manufacturing begins. Effective prototyping cultures, by contrast, deal with integration issues directly and early. Yeasty case studies are the centerpiece of The Perpetual Enterprise Machine. Consider Hewlett-Packard, a prototyping fanatic. Though the wildly successful Deskjet ink-jet printer required 75 percent invention and innovation, the project was finished in the short space of nine months. Hewlett-Packards project group, Bowen et al. declare, displayed exemplary use of prototypes. The team started with breadboards to confirm the technology; studied a series of rapidly constructed prototypes to check out form, fit and function; and evolved to prototypes that were tested for customer reaction and served as the basis for final tool design, thereby optimizing the chances for smooth product launch. Prototypes provided a common basis for everyones work, unifying the contributions of marketing, manufacturing and design. For HP, smart prototyping was instrumental in the speedy realization of a breakthrough project.

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HP also practiced periodic prototyping, discussed earlier. Each month, the authors report, regardless of whether the product development organization was ready or not, manufacturing built 50 prototype units. Thus rather than designers squeezing last-minute changes into prototypes and delaying the prototype, the regularity forced a better and more integrated prototype build. Or consider Kodaks FunSaver disposable camera. The teams central development strategy, the authors conclude, was the rapid manufacture and testing of prototypes. Ditto Fords successful Crown Victoria project: The project team produced the best prototypes ever seen at the company. Steel, too. Minimill superstar Chaparral makes prototyping a way of life. It is routinely carried out at the system level, the authors observe, and is largely done at full scale on the shop floor in a production environment. In this way, early prototype processes are representative of the companys manufacturing capabilities. Small project teams with strength and breadth in production are responsible for all dimensions of the programs, from fulfilling customer needs to process design and production. A general contention we took from our study, Bowen, Clark, Holloway and Wheelwright conclude, is that the best project outcomes result from rapid implementation and early use of prototypes at key development stages, and that full-system prototypes must be pursued rigorously long before [manufacturing] ramp-up begins. More hard support for the value of effective prototyping comes from a rigorous study performed by Benham Tabrizi and Kathleen Eisenhardt of Stanford Universitys Department of Industrial Engineering and Engineering Management. The authors focus on overall speed of product development, spurred by the seminal 1989 McKinsey & Co. study which showed that products getting to the market on-time and 50 percent over budget eventually earn only four percent less than those that are on time and on budget; on the other hand, projects that get to the market six months late, even if they are on budget, do 33 percent less than their on-time, on-budget kin. Lesson: If timing aint everything, its damn close. The Stanford researchers examined 72 projects from 36 companies in Asia, Europe and the United States. They unearthed two fundamentally different approaches to speeding up product development. Proponents of the methodical compression strategy, as the authors call it, argue that the key to fast pace is squeezing together a rationalized product development processThe underlying assumption is that since product development is complex, it is best to plan ahead to streamline the process, and then compress the remaining steps together. Such firms are roughly analogous to Schrages spec-driven companies. Alternatively, the experiential strategy group of firms are close kin to Schrages feisty prototypers. Their approach suggests that moving faster simply by accelerating an existingprocess, is insufficient. Rather, the underlying assumption is that product development is a highly uncertain path through foggy and shifting markets and technologies. Thus the keyis rapidly building intuition and flexible options. (Message: Bring on the prototypes.)

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The Circle of Innovation


A Conversation with Tom Peters

The authors test ten hypotheses. The first six underpin the compression strategy. No. 1: More time spent in planning is associated with faster product development time. The other five predict that speed will flow from greater supplier involvement, more designers using computer-aided design tools (e.g., speedier design, fewer errors), cross-functional teams (all key functions represented within the group), overlapping steps (concurrent engineering and production, for instance), and rewarding teams for meeting schedule. The seventh through tenth hypotheses assess the experiential strategys trademarks; e.g., No. 7: More design iterations are associated with faster development time. The remainder predict that development time will be cut by performing more intermediate tests, decreasing the time between milestones and relying on a powerful (high in the organizational pecking order) leader to focus the teams efforts. Working closely with corporate product developers, the researchers developed precise quantitative measures for each variable, which were then correlated with overall project speed. In short, though Tabrizi and Eisenhardt did not resort to such blunt language, the planning-intense compression strategy was trounced by the just-do-it/experiential/prototyping approach. More specifically, planning actually slowed the overall process (simply a waste of time); more CAD use also gummed up the works (ineffective utilization of the tool, rather than the tools impotence, is the suspected crime). Overlapping steps, greater supplier involvement and rewards or making schedule didnt make much difference one way or the other. Among the compression-strategy variables, only the use of cross-functional teams significantly shortened the development process. Of the experiential variables, more iterations, more tests and more frequent milestones all speeded things up significantly. The presence of a strong leader was helpful, though the result was not statistically significant. The preceding does not add up to an iron-clad case for prototyping-is-allthere-is-when-it-comes-to-innovation. But it does amount to a phenomenally strong, research-backed acknowledgement that ones approach to prototyping, in its largest (cultural) sense, is a much more powerful determinant of innovation success than we might imagine. On a list of, say, five things would-be innovation stars should do, working at creating a full-blown culture of rapid prototyping surely merits inclusion. And as far as Im concerned, inclusion at the top of the list. Palo Alto 1 June 1995

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The Circle of Innovation


A Conversation with Tom Peters

About Tom Peters

Tom Peters describes himself as gadfly, curmudgeon, champion of bold failures, prince of disorder, maestro of zest, professional loudmouth (as a speaker hes a spitter, according to the cartoon strip Dilbert), corporate cheerleader, lover of markets, capitalist pigand card-carrying member of the ACLU. Fortune calls him the Ur-guru (guru of gurus) of management. The Economist says hes the Uber-guru. And his unconventional views led Business Week to describe him as business best friend and worst nightmare. Moreover, research released in 1996 by Siegel & Gale/Roper Starch Worldwide (Report on American Business Executives) ranked Tom as No. 1 on Awareness and Credibility of Business Leaders; his Credibility Index score of 50 was more than twice that of runner up Bill Gates. Tom followed up on the phenomenal success of In Search of Excellence (1982, with Robert H. Waterman, Jr.) with three more hardback books A Passion for Excellence (1985, with Nancy Austin), Thriving on Chaos (1987), Liberation Management (1992) which ranked at or near the top of The New York Times bestsellers list for years; all four books have also been bestsellers throughout Asia, Latin America and Europe. In keeping with the frenetic times, Tom and Knopf/Vintage announced in early 1994 the publication of a fast-paced series of paperback originals; the first two, released in 1994 and 1995, were The Tom Peters Seminar: Crazy Times Call for Crazy Organizations, and The Pursuit of WOW!: Every Persons guide to Topsy-Turvy Times; both were international bestsellers. Toms next hardback book, You Cant Shrink Your Way to Greatness: The Circle of Innovation, will be available in October 1997. Tom presents about 75 major seminars each year, and has recently spoken in Australia, New Zealand, Malaysia, Germany, France, England, The Netherlands, India, Dubai, Saudi Arabia, South Africa, South Korea, Singapore, Thailand, Ecuador, Argentina, Chile and Brazil. He writes a bi-monthly column for Forbes ASAP and for ten years wrote a weekly newspaper column syndicated around the world. He has also written forwards to over 30 books, including the Gore report on reinventing government, and authored over 100 articles for various newspapers and popular and academic journals, including Business Week, The Economist, the Financial Times, The Wall Street Journal, The New York Times, Inc., The Washington Monthly, California Management Review, The Academy of Management Review and The Harvard Business Review. Tom has created and starred in over a dozen of the most popular corporate training films ever made, and hosted numerous BBC and PBS specials. He also chairs The Tom Peters Group, three training and communication companies headquartered in Palo Alto, California. Tom is a graduate of Cornell (B.C.E., M.C.E.) and Stanford (M.B.A., Ph.D.) and holds honorary doctorates from the University of San Francisco and Rhodes College. He served on active duty in the U.S. Navy in Vietnam (a Navy Seabee) and Washington, was a senior White House drug abuse advisor in 1973-74 and worked at McKinsey & Co. from 1974 to 1981, becoming a partner in 1977. Among other things, Tom is a Fellow of the International Academy of Management, The World Productivity Association, the International Customer Service Association and the Society for Quality and Participation. He divides his time between Silicon Valley (Palo Alto) and Vermont, where he and his wife Susan (and Max and Ben) co-habit a 1,300 acre working farm in Tinmouth...along with alpacas, chickens, goats, dogs, horses, barn cats, sheep and geese. July 1997

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The Circle of Innovation


A Conversation with Tom Peters

Suggested Reading List

Periodicals
I.D. (International Design) Advertising Age Computerworld CIO (Chief Information Officer) Fast Company

Books
The Rise and Fall of Strategic Planning, Henry Mintzberg Competing for the Future, Gary Hamel and C.K. Prahalad Beyond Maxi-Marketing, Stan Rapp and Thomas Collins Building Strong Brands, David Aaker Future Perfect, Stan Davis The Age of Unreason, Charles Handy Intelligent Enterprise, Brian Quinn Riding the Waves of Culture, Fons Trompenaars Customers for Life, Carl Sewell and Paul Brown Organizing Genius, Warren Bennis and Patricia Ward Biederman The Connected Corporation, Jordan Lewis You Just Dont Understand, Deborah Tannen Further Up the Organization, Bob Townsend The Paradox of Success, John ONeil The Fatal Conceit, F.A. Hayek 7 Kinds of Smart, Thomas Armstrong Whos Running Your Career, Caela Farren Clicking, Faith Popcorn In a Different Voice, Carol Gilligan

The Circle of Innovation


A Conversation with Tom Peters

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