Issue 6, Weds August 16, 2000
Made in New Zealand - twice winners of the America's Cup

You can't manage change. You can only be ahead of it
Peter Drucker


Welcome to the sixth issue of EDGE FIRST, an eZine dedicated to making you a better leader by providing:
- provocative thinking about what it means to be a leader
- the tools, techniques and best-practices that drive leadership improvement
In this issue
Leadership in the new economy
(i) tompeters! - new economy DNA. Flaky? Irresistable! The survival kit
(ii) Snapshots of the new economy - from Seybold to Subramanian
(iii) eStrategy - best, first, fastest, lastest ... just watch out for Wal-Mart
(iv) A better way - just don't try it on your own
(v) Gen II - who wants to be a CEO

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Start
Last week's issue of Award, our alternate eZine, began with some typically robust words from Tom Peters.

“If you're not ready to be enterprise- and industry-reinvention evangelists, then do yourself and everyone else a favor: Get out of your job.”

The clip was from an article in new economy magazine Fast Company (38, p106). He may be woven into the DNA of the 'new economy', but our only exposure to tompeters! (his web site logotype) is through the printed word, so maybe we're not making the right call. But. Don't you think he's a little, well, flaky … off the wall …? You judge – this is how he describes himself … “a prince of disorder, champion of bold failures, maestro of zest, professional loudmouth ... corporate cheerleader, lover of markets, capitalist pig ... and card-carrying member of the ACLU.” Is that flaky, or what!

”Somebody once asked me what I want my epitaph to say,” he has written. “I want it to say, 'He was a player.' It wouldn't mean that I got rich, or that I was always right. It would mean that I participated fully in these fascinating times. The most awful thing that I can imagine doing is sitting on the sidelines. Because whatever this "new economy" thing is, it is reinventing the world of commerce, the world of politics, everything. It is reinventing fundamental interaction.”

Flaky, maybe. But irresistible.

Here's some hi-lites from the Fast Company story:

“Work in my Dad's days, the 50s and 60s: Same office. (For decades.) Same colleagues. (For decades.) Same processes, mostly rote. (For decades.) (Former MCI chief Bill McGowan called yesterday's middle managers 'human message switches.') And laughably dated information. (Month's end closing of the books took weeks. Customer data was non-existent, or hopelessly unreliable).

“Now: Every project calls for a new team, with specially tailored skills. Tiny company or behemoth, we will be working with an eclectic mix of contract team-mates from around the globe, many of whom … we'll never meet face to face.

“Fact: White collar accountability has 'til now been, mostly, an oxymoron. Show up. Suck up. Bury your face in your in-box. Process your paper flow with a modicum of efficiency. And you could count on a pretty decent end-of-year evaluation, a cost of living (plus a point or two) raise, and a sure-as-death-and-taxes forty-year tenure at Desk #263 in the GM purchasing department. No longer.”

What will you – wherever and whatever you lead – need to carry with you to survive and thrive in the next decade or so, when, as Tom Peters says “The new white collar software, including enterprise resource planning systems and Internet-based application specific software packages, will wreak havoc on the vast majority of 'staff' jobs?

Here's his leaders' survival kit:
MASTERY – survival in a transparent (everyone can see and evaluate everything), team environment will mean being noticeably good at something specific that adds value. Not 'HR' or 'CPA'. Something more specific. Can't describe it in a 1/16th page Yellow Pages ad? You're doomed
ROLODEX OBSESSION – not everything's new. Who you know will still matter, but it'll be peers (future project mates), rather than the traditional power figures, who will matter the most. And forget “Logo Loyalty (to GE or even Cisco),” think Rolodex Loyalty – to your extended family of project workers
FINISHING SKILLS – it's all about delivering. “Your work will be mercilessly evaluated by the toughest audience of all: your project-peer-team-mates.
ENTREPRENEURIAL INSTINCT – project work is entrepreneurial. You don't have to start your own business. But you must - no option - act as if you were running your own business.
MISTRESS OF IMPROV – women will lead us into the future. Why? Because, Tom Peters says, “Women tend to handle ambiguity better. (Research fact: Guys thrive in rule-bound environments.) The new world is a floating crap game. New projects, new team-mates, the constant need to tack and jibe. Those who can adjust and turn fast and operate in the absence of laid-out metes and bounds will be the winners - and, more important, the leaders.
HUMOR - It's gonna be a mess, for a good while. “We are remaking the world! Business. Politics. Social interchange,” Peters says, ”With such madness afoot for the foreseeable future, we'll all get it wrong far more often than we get it right. If we can't learn to live with egg dripping down our face and a grin to go with it, then we're in for a long, tiresome, anguished ride.”
INTENSE APPETITE FOR TECHNOLOGY – believe the hype, he says. You don't need to be a techie yourself, but you better learn to love it. Not just 'cope with'. “Love. Embrace. Technology is your partner and your lover. Your lord and master, and your faithful if peculiar servant.”
BRAND YOU – brand is shorthand for distinction. You may want to stop short of shameless self promotion. But you must get your story out on the airwaves … via your personal Web site … by telling your project's story at a regional tradeshow. Whatever. Just DO IT. In a more self-reliant world, you've got to take responsibility for telling or selling your unique story.
A PASSION FOR RENEWAL – just being good is no longer sufficient. You've got to constantly improve. And – if necessary – reinvent yourself.

Want to get Tom's Observations firsthand? Email tompeters-observer-subscribe@gt.tompeters.com
Snapshots of the new economy
Fast Company's take on the new economy also polled the opinions of a long list of e-luminaries. Here's some ten-second eLeadership snapshots:

Patricia Seybold, founder and CEO, Patricia Seybold Group
A lot of people think the new economy is all about the Internet. Sure, she says, it's being fuelled by the Internet, but it's really about customers – people using the internet to vote with their feet … transforming entire industries. She worries about dot-com leaders thinking that the customer as just another part of the business – not understanding that the customer is the business.

Robert M. Howe, chairman and CEO, Scient Corp, a professional-services firm that creates, builds, and operates complete e-businesses
”I've waited a long time to see the integration of technology and business, and to watch this movie play out the way that I'd always hoped it would play out is really something. It's even more exciting than I thought it would be: It's bigger. The colors are brighter. And I don't know how it will end. No one has any idea what the end points are - what the next plateau is. That heightens the excitement.”

Kurt Andersen, novelist, and co-chair, Inside.com. Past editor in chief of New York Magazine, columnist for Time and for the New Yorker, author of Turn of the Century ( Random House, 1999)
”I like the fact that we're living in a time when there's a lack of certainty about where we're going, what's good, what's bad, and what's legitimate. You can't just cruise along on conventional wisdom today.”

Caroline Soeborg Ohlsen chief creative officer, Cell Network, CEO Mousehouse, Copenhagen, Denmark
“… new-economy [leaders] don't build companies. We tell stories - stories that make a difference for our employees, for our customers, and for the world around us. A new story about life and work is simply more exciting and fulfilling than a story about the industrial way of living.

“At Cell Network,” she says, “we like to say, 'Together, we create the new beginning.' To me, that's a vision - a mission statement of sorts - full of hope, ambition, and life. And that is exactly what should attract new employees and customers to the company: the idea that they can share in the creation of something, that they matter, that they can make a difference.”

Jonathan Hoenig, founder and portfolio manager, Capitalistpig Asset Management LLC, Chicago, Illinois
Hoenig doesn't buy the whole 'new economy' thing. He gets it, just doesn't buy it. “At a time when most people are intensely focused on the future,” he says “I'm preoccupied with the past. Why? Because, “I'm ready to conclude that nothing really ever changes.” In the markets, as in life, greed and fear still motivate, he says, always have, always will. What IT will help to illuminate, however, is that the most valuable commodity isn't soy-beans but service.

Emily Levine, stand-up commentator, Los Angeles, California
The old vs new economy dichotomy is deeper than Dow Jones versus NASDAQ, Levine says, it's classical economics (where the economy is a rational, reductive, linear, closed system ruled by negative feedback – 'Just Say No') versus new economics (open, interactive, dynamic, alive - as well as unpredictable and turbulent).

Jay Walker, founder and VC, Priceline.com. Chairman, Walker Digital. Cofounder, Priceline Webhouse Club, Stamford, Connecticut
Walker is jazzed by the fact that now, and it's never been possible before, companies can reach millions of people quickly, and scale up … from a concept to a company with 5 million customers … in less than a year. But it also keeps him up at night … the requirement not only to deal with complex software but also to develop that software with teams who haven't worked together for very long … is a leadership challenge of the first order. One that will keep Internet-company CEOs up at night for years to come.

Nathan Myhrvold, cofounder and co-president, Intellectual Ventures LLC, Bellevue, Washington
The new economy is … about producing fertile ground for radically new ideas … about the democratization of power. But it's far too early to claim victory, Myhrvold says. “We must first revolutionize the economy, and we're less than 10% of the way there. What we've created is a new approach, a new set of tools, a new model that can be applied to almost anything. Ten years ago, we didn't have the technological leverage to change human interaction totally. Now we do. If we look at where we are today, we'll see that in 20 years, we will have transformed human behavior.”

Paul Saffo, Director and Roy Amara Fellow, Institute for the Future, Menlo Park, California
Digital technology is the solvent leaching the glue out of our economic structures, Saffo says. As we build new economies, we create a whole renegotiation of culture. We forge new systems, new industries, and, above all, new relationships. If there's one rule for the new economy, he says, it's 'keep your head,' because we're in the midst of exhilarating change. But beware of over-exuberance. And despite rapid change, we can't repeal the laws of gravity … remember that a revolution doesn't happen overnight. Brace yourself: We're at the beginning of a transformation that will continue for a couple of decades.

Katherine Gehl, special assistant to the Mayor for technology, Chicago, Illinois
Today's technology allows 'public servants' to dream bigger dreams. Used to be, she says, that when you thought about change in the public sector, you had to think years. Now transformational change is possible in a much shorter timeframe, but her concern is that the public sector will drop the ball. “In the private sector, market forces drive change,” she says, but “we can't assume that change will happen naturally - and efficiently - in the public sector as well. It won't. There are more strings attached. We need extremely decisive leaders and a public-private partnership on a scale that we've never seen before, because so many of the skill sets and resources that we need right now reside in the private sector.”

Krishna Subramanian, Co-founder, Chairwoman, and CEO, Kovair Inc, San Jose, California
Here's Tom Peters' message – and it is becoming a cliché – articulated by a woman. “This is truly the era of the woman leader,” Subramanian says. “Women have more of an opportunity now than ever before to excel in business, because companies are moving toward 'complete market innovation,' a focus that puts customer relationships on the same level as technological innovation. And that business model plays directly to the strengths of women.”
eStrategy - best, or first?
So you're leading your enterprise into the rosy dawn of the new economy. One of the new 'rules,' hovering around every discussion, informing every allocation decision, is that first-mover advantage is critical – be there fast, be there first, and you win. Forget about all the normal indicators of sustainability. Just go.

Wrong, wrong, wrong, says Jim Collins (Inc. magazine, August 1, 2000).

How will driving in the first stakes protect the pioneers from the inevitable arrival of the huge companies with deep pockets and millions of existing customers? Inertia, apparently. “By the time they wake up, the game will be over, and we will have won.”

Ha, says Collins. Some chance. They may be slow – glacially slow – but when the Wal-Marts do arrive, they'll run right over the first movers.

Don't just believe me, he says, look at recent history. Being first is more likely to be a liability. VisiCalc. The first major personal-computer spreadsheet. Where is it today? Gone. Lost to Lotus 1-2-3, which itself lost to Excel. Lotus then went into a tailspin and was saved only by selling out to IBM.

Osborne Computer. Who!? The Newton MessagePad. Ha bloody ha – mine collects dust in a corner of the office – I can't bear to throw out something that cost so much, even if it's only ever had one set of batteries. What does have more than 6 million users and a cool persona? The PalmPilot.

“The pattern of the second (or third or fourth) market entrant's prevailing over the early trailblazers shows up throughout the entire history of technological and economic change,” Collins says. IBM wasn't first to market in the computer business, Boeing didn't pioneer the commercial jet. American Express dragged its feet about getting into the charge-card business, 8 years after the early leader, Diners Club International. Where is Diners Club today?

Disney was a late entrant into family theme parks. Starbucks didn't pioneer the high-end coffee chain. General Electric didn't pioneer the AC electrical system. Wal-Mart wasn't first into discount retailing. All those companies were second, third, fifth, ninth, or even further back. Yet they prevailed, while the early leaders fell behind or disappeared. No, not first. Better. And better beats first, even if it takes a long time.

There are exceptions, Collins says; ironclad patent protection, or ownership of a proprietary industry standard, such as MS-DOS, or if customers find it too much of a hassle to move over to a better solution, for example.

Are dot-coms such exceptions? Not many. Ironically, what makes most of them a threat to traditional companies – low barriers to entry (the ease and speed with which a few people can cram together in a small garage and create an alternative solution) – also makes them vulnerable when the big boys do get their stuff together.

So if you feeling a bit left out, and your board or junior managers or kids are leaning on you to get it, take heart. “It doesn't really matter who gets there first,” Collins says, “so long as you figure out a way to produce a better solution, doggedly persist in bringing that solution to the world, and continually improve.”

Jim Collins operates a management-research laboratory in Boulder, Co. He is coauthor of Built to Last: Successful Habits of Visionary Companies. His new book, Good to Great, will soon be published by HarperBusiness.
A better way
Just don't try to do it on your own, says US nationally syndicated columnist Jennifer White. “This do-it-yourself thing has got to stop,” she says. "You're already overworked, exhausted and burned out, but you insist on doing things yourself. Call it control, unwillingness to invest in the right resources, lack of capital, problems delegating … you're hindering your success by constantly doing it yourself.”

If you're overcommitted, she says, it may be because you have extremely high standards. “You get involved in a lot of different things … you expect too much from yourself. Which is where the problem with the do-it-yourself syndrome comes in. The trick to [success] is having the right resources and people in place so you can focus on what matters the most. Unless you build in the resources to support your growth either personally or professionally, you will feel exhausted and burned out.”

“It's time,” she says, “to build a support team. “ Feeling overcommitted is an indication that you failed to build a system for what you have, what you do and who you have become.
Gen II dot-com leadership
”Those dot-com CEOs are a savvy bunch,” says Larry Dignan (ZDII, August 3, 2000). First, they dazzled us with grandiose plans to conquer the world and took their fledgling companies public to raise lots of dough. Then, they had Wall Street believing profits were overrated as long as you could grow. Once Wall Street noticed the corporate blocking and tackling, many bumped themselves upstairs.

Operational issues – who needs them. Being a visionary is fun, day-to-day operations aren't. Maybe being a CEO is overrated. Enter the visionary chairman.

Recent moves – iVillage's (Nasdaq: IVIL) Candice Carpenter, a CEO with a reputation for missing quarters, blowing big ad budgets and burning through CFOs every few months – relegated to chief visionary.

VerticalNet's (Nasdaq: VERT) move to give Joe Galli, former operating chief at Amazon.com, the CEO position means that Mark Walsh, who made VerticalNet a business-to-business front-runner, will do the vision thing.

Marimba (Nasdaq: MRBA) co-founder Kim Polese took Marimba about as far as she could, turned a profit and stepped aside to focus on new business initiatives, strategic direction, mergers and acquisitions, and critical industry partnerships.

DoubleClick (Nasdaq: DCLK) went the frictionless route. CEO Kevin O'Connor handed the company over to Kevin Ryan, who had been the president and operating chief and was basically running the firm anyway.
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