Tom Peters on business excellence in the digital age, 'crap head' corporate tax dodgers, Telecom's name change, falling in love with bankers & the All Blacks

By Gareth Vaughan

Management guru and author Tom Peters says business excellence in the digital age is pretty much the same as it was way back in 1982 when he co-authored the international bestseller In search of excellence, lessons from America's best-run companies.

"Excellence is 'I'll know it if I see it'," Peters told interest.co.nz in a Double Shot interview.

"Excellence cannot be measured anywhere nearly, entirely by numbers. Period. Corporation or theatrical performance. If we're going to restrict our discussion to the word, at some important level it hasn't changed. And then if we even go deeper it hasn't changed," Peters said.

"This may not be true 10 years from now and I'm willing to argue either side. But there are in New Zealand, the United States and everywhere else, fabulous very low tech organisations who don't own smartphones, and fabulous very high tech organisations that obviously do own smartphones and every other devise. So it's not just a techy thing."

"In the most important sense I don't think it (excellence) has changed."

"Apple may have made a ton of money, they have. (But) that's only in the last 10 years. Apple hung on by the skin of its teeth. There was a time when Microsoft lent Apple $100 million because if Apple died then Microsoft had a monopoly and they ended up being gone anyway," said Peters.

"But from day number one Mr (Steve) Jobs never compromised on the quality of the products that he turned out. And there was a long period of time when nobody in business used Apple computers other than the graphic designers and the engineers and so on, and it was for the incredibly clever people. They weren't very profitable for 25 or 30 years."

"It (excellence) is not about profit. But I do think it's about the excellence of the service or the excellence of the product. And it's about the excellence of Lindsay's little sporting goods shop (Lindsay's Clothing & Sports) that I go into regularly in Takaka, and it's about the excellence on some dimensions at least of a Google."

Peters spends part of the North American winter in Golden Bay and visited Auckland this week to speak at the New Zealand Institute's annual members retreat.

'It stinks'

He has previously spoken of loving "obscene profit" because it enables companies to hire fantastic people and take extraordinary and interesting risks. Asked what he thought if these huge profits were assisted by tax dodging, Peters said such behaviour "stinks."

"I lived in Silicon Valley for 30 years. And we don't have to talk about the giants like Apple. The best firms pay a great deal of attention to their communities. And Apple New Zealand, Apple Saudi Arabia, Apple England and Apple the United States is a beneficiary of the community and has a moral responsibility to contribute to that community," said Peters.

"And so I think they're all crap heads or whatever term I wouldn't use here. I don't buy the act at all."

"If you invest it in people and technology I'm all for you. One thing that's happening in the United States today (is the) stock market is sky high, profits are sky high and a lot of the reason is apparently, combined, our corporations are sitting on $3 trillion effectively worth of cash that they won't invest. Not quite as bad as tax dodging, but kind of the same thing."

"We've made a pretty dramatic comeback from the pits of (20)08 but employment hasn't made the comeback that we need it to make. And I don't have any respect for a CEO who can't find investment opportunities for the cash hoard that she or he is sitting on," Peters added.

"So there's a fine use of profits and there's a more questionable use."

'No one knows what they're doing'

In terms of business leaders he said none really know what they are doing these days.

"I believe the path forward in 2014 is chaotic. I believe that any leader who thinks they know what they're doing is an idiot," said Peters. "I don't think anybody knows what they're doing from the school superintendent to the person who is leading a small or large company."

In terms of post global financial crisis banking, Peters said he'd recently come across some bankers who impressed him.

"I spoke to a group in the US called the Association of Community Bankers. We still have a lot of small banks despite the consolidation," Peters said. "I fell in love with those people because they were providing real services to their local community."

"They weren't crazy, wild lenders and if you went in for a small business loan you were approved in part because you were a solid member of the community. You weren't turned down because an algorithm told you that you couldn't make it," Peters said.

'You don't hide bad work with a good name'

I also asked him what he thought of well known companies changing their names, in light of the recent announcement that Telecom's to become Spark.

"I'll give you a very strong yes and a very strong no. We had a diversified food company in the United States and it had a really fabulous name - Consolidated Foods. And one of their divisions that had come from a bakery chain they had inherited was called Sara Lee. And they did terrific work. And at some stage of the game they changed their name to the Sara Lee Corporation," Peters said.

"And I understand that and I buy into it. But you don't hide bad work with a good name. And in fact I would argue it can be counter productive. If you run a company that has a fabulous reputation for crappy customer service and you change your name, you're going to go down two notches on my list. And maybe you're going to go down 20 in the age of social media."

"Maybe you're going to be laughed out of the planet earth in social media which did not happen in the past. But with the big guys Kiwi, American or whatever, social media's a double edged sword. If you behave like an idiot the odds are incredibly high today you're going to be convicted," added Peters.

"I'm not inherently against the idea (of name change), but I'm very against it unless there's the substance to back it up."

"Sara Lee was a fabulous company. There were pieces of the Consolidated Foods portfolio that weren't that good. But they did have a reputation. They were an acquirer. Normally I'm against acquisitions, but their acquisition strategy was 'pay too much money for great companies'. And so they had a quality record which made it not an abomination to call themselves by the name of this terrific bakery organisation."

'You have to have talent turn over'

I also asked Peters, an American football fan, whether there were cross over lessons from a business trying to stay at the top to a sports team like the All Blacks, coming off a year when they won all their matches.

"In the world of high level sport I acknowledge the role of coaches and managers, but you're as good as your talent. This is not rocket science. You have the greatest coach in the world and lousy players, you're not going to succeed," said Peters.

"I lived in San Francisco for years and we had the best of our football teams called the San Francisco 49ers. And one thing that doesn't happen very often in sport, but is exactly and directly analogous to your situation, is the coach was brilliant at getting rid of good players two years before he had to."

"Everybody peaks. You, me and everybody else."

  "The quarterback by the name of Joe Montana was seven steps above god. He (coach Bill Walsh) tossed Joe out two years before he needed to and brought in young blood," Peters said.

"It's fabulous that you had an undefeated season. The niners never did that, 18 and 1 was their best. But when you're rebuilding a team you don't go undefeated, but long-term you improve the odds dramatically."

"You do have to have talent turn over. And talent management is an almost impossible job in running a symphony and telecoms company, and it's true in sport as well."

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4 Comments

I believe that any leader who thinks they know what they're doing is an idiot," said Peters.
 
I was reminded of another gentleman who said this;
A statesman... must wait until he hears the steps of God sounding through events, then leap up and grasp the hem of His garment.

The leadership of most financial institutions, aided by politicians can fractionally steal more than most criminals ever could, since gold was turned into paper, thereby earning themselves a place in the Guiness book of Records.
Plus they knew what they were doing.
 

leader/lender
 

s/devise/device

Getting obscene profit is all good and fine when your customer gets free choice.  As yes, that means you can buy all sorts of toys and people, and is generally a good thing.  And people can make the individually responsible decision to whether or not their budget can afford it.

Doing similar when customer is forced by law or compliance, is obscene.  Doesn't matter if that profit goes to owners pocket or "to the community",