Tom Peters sees Innovation as the Key to Economic Success

By:Capacity Magazine

Issue:Fall 2006 : Articles

“In the field of organizational and management theory,” says CNN, “Tom Peters didn’t just write the book – he created an entire genre.”

Author, speaker and consultant Peters first burst on the scene with his 1982 book “In Search of Excellence,” a handy guide for managers wanting to pilot their organizations to greater heights. In the 20-plus years since, the management guru has written a whole shelf of subsequent books, while traveling the globe advising senior executives on how they can improve their companies.

In his latest book, “Re-imagine! Business Excellence in a Disruptive Age,” newly published in a paperback edition, Peters writes that “It is the foremost task – and responsibility – of our generation to re-imagine our enterprises and institutions, public and private.”

Always provocative and thought-provoking, Peters takes note of the rising economic power of countries such as China and writes that business as usual is a prescription for disaster, that focusing attention “on mergers and cost cutting just won’t get the job done any more.” Instead, he says, it’s innovation that’s the key to success in today’s challenging economic environment.

“The only way we’re going to survive is to innovate our way out of the box,” Peters says. “We’re down to one idea, which is innovation.”

In this excerpt from “Re-imagine!,” Peters argues that only by encouraging innovative ideas and “nurturing the freaks” will companies have the skills and drive they need to grow.

Along about 1984, I was stuck in a rut. My thinking was mired in the giant-company theory and practice that I’d acquired at McKinsey & Co.

Then I got lucky. I met Frank Perdue, of Perdue Farms. And Roger Milliken, of Milliken & Co. And Bill and Vieve Gorge, of W.L. Gore. And Tom Monaghan, of Domino’s Pizza. And Les Wexner, of The Limited. And Don Burr, of People Express. And Anita Roddick, of The Body Shop.

I began to hang out with these and other feisty, we-can-change-the-world-and-damn-well-are-changing it-and-isn’t-that-a-kick characters. And guess what? Their spirit rubbed off on me. I was dragged into their quirky world.

And I’ve never looked back!

Along the way, I picked up a hard lesson: INNOVATION IS EASY.

Call me insane. I can handle that. But kindly hear me out. “Innovation” – the sine qua non of achieving excellence in a disruptive age – is easy. Not hard.

Could it really be that simple?

I think so.

Though I have often been called an “organizational change consultant,” I don’t believe much in change. I don’t much believe that launching a “strategic initiative” or creating a “brilliant training program,” will suddenly cause people to lose their fear of failure, to become entrepreneurial, or whatever.

What I do believe is that if I can force myself into contact with “strange things,” then those strange things will drag me, willingly or not, toward something new and thrilling, something weird and wonderful. I will change because of one and only one thing: I’ve been forced to!

The “Big” Problem: Poor Little Rich Company

In 2002, Advertising Age claimed that domestic sales are declining in 20 of Proctor & Gamble’s 26 major product categories – including 7 of the top 10 categories.


What’s the reason? Some analysts point in particular to what they call the “billion-dollar problem”: Given P&G’s enormous size, the company rarely looks at a new product opportunity unless it has humongous potential. And in this case, “humongous” means … about a billion bucks.

But therein lies a problem. Anything with “demonstrated” billion-dollar potential is, almost by definition, “more of the same” – more of the same kind of product, sold in mostly the same way to the same kind of people whom P&G has sold to in the past. In times of change, big companies – enamored of “me-too” focus groups, and devoted to over-sized products aimed at over-sized customers – are doomed to a future of waddling after slow growth.

Simple and oft-demonstrated fact from the world of world-flipping innovation: Things that alter the world invariably enter by the side door. A small group of pioneering customers (“early adopters”), paired with a pioneering vendor, act as flag bearers for the rest of the world.

Disruptive Criticism: Being Safe and Sorry

The most articulate spokesman for the perils of playing it safe is TBWA/Chiat/Day CEO Jean-Marie Dru. He summarized his views in a magnificent book called Disruption … which he followed up with another magnificent book called Beyond Disruption. Dru claims there are three primary obstacles that keep companies from adopting “disruptive” strategies:

  1. Fear of “cannibalism.” Companies worry that introducing a Cool Product might “confuse” the marketplace and impinge on sales of their current market leaders. (Presumably, as in the case of P&G, even if those “leaders” are declining in sales.)
  2. An “excessive cult of the consumer.” Too great an emphasis on a “customer driven” approach results in “slavery to demographics, market research and focus groups.” Could that old stand-by, “listening to customers,” really be the No. 1 sin in marketing? Well, that’s more or less what Dru says, and I think he’s more or less right. Account planning at agencies, says TBWA/Chiat/Day creative director Lee Clow, “has become ‘focus group balloting.’”
  3. The sustainable advantage seduction. Sustainable advantage, Dru contends, is a snare, a myth, a delusion. Instead companies should focus on achieving a Current Advantage – and then pray that they can hold onto it long enough to invent something new.

The New Weird Thing

The statistical term “standard deviation” stands for, approximately, the average difference from the average among a given set of observations. A “low” standard deviation signal a very “tight” distribution: All the observations are close together. A “high” standard deviation, on the other hand, connotes a very “loose” distribution: The observations are all over the map.

Using this language, I would argue that we are in an Age of High Standard Deviation. All kinds of weird stuff is going on. All kinds of weird competitors are popping up – terrorists, in the real of national defense; upstarts like Dell and Wal Mart and eBay, in the realm of commerce.

How do we deal with weirdness? Get weird! We need to introduce … Weirdness in Our Midst. Weird employees. Weird customers. Weird vendors. Weird alliance partners. Weird members on Boards of Directors. And so on.

The main idea, then, is incredibly simple (and, I am quite sure, incredibly powerful): Hang with the dull … and you become dull. Dreadfully dull. Hang with the weird ... and you become weird. Wonderfully weird.

I will go way out, to the end of the limb, and argue that this is the only surefire strategy for … Continual Personal Renewal and Radical Organizational Innovation.

Reprinted from RE-IMAGINE! by Tom Peters by permission of DK Publishing. Copyright © 2003 Dorling Kindersley Limited. Text copyright © 2003 Tom Peters. All rights reserved.