Cheney/Peters: Part I

‘Reward Excellent Failure, Punish Mediocre Success’

Don't just change: 'Destroy and reimagine,' management guru Tom Peters implores CUs.

May 16, 2012

It has been 30 years since management guru/author Tom Peters published “In Search of Excellence,” named one of the “Top Three Business Books of the Century” by National Public Radio.

Since then, the pace of change in society and business has been “absolutely enormous,” he says. “You could wake up tomorrow morning and find 23 startups in your space that weren’t there when you went to bed—there’s always someone out there who’s living 2022 in 2012.”

Despite this whirlwind, the “bedrock values” most important to consumers—service and integrity—haven’t changed. Companies that forget their bedrock values risk becoming unglued from their moorings, he warns, “like a lot of your peers in the financial services world have.”

In the first of a three-part interview, CUNA President/CEO Bill Cheney visits with the man Inc. magazine recently named the “Red Bull of management thinkers.”

Peters will share more of his thoughts—and strong opinions—during the America’s Credit Union Conference, June 17-20 in San Diego.

Cheney: Tell me about your “reimagine manifesto.” How did this come about?

Peters: When I started working on this it was pretty close to Sept. 11, and we were all shaken up. That’s an understatement. And economically, we’d just watched the dotcom bubble burst.

Even though it’s commonplace to say you always have to be moving and changing, it was pretty darn clear on every dimension—from national security to careers to business—that people really needed to change fast. I decided that “change” was a grossly overused word and that we really needed to rethink things in a fundamental way.

That’s where “reimagine” came from. Quite obviously, not only have things not slowed down since 2001, they’ve accelerated many times over from the bio sciences to the use of information technology (IT), to the financial crash, to the incredible rise of China, to the outsourcing of everything.

When you look at the changes coming down the pike, you might be justified in saying we ain’t seen nothing yet. The financial crisis was a big darn deal but that’s not really the story. It’s about globalization and the use of IT, which has us all in its thrall. God alone knows—and I’m not even sure God is up to it—what the world will look like in 15 to 20 years.

One of my favorite quotes comes from [Secretary of Veterans Affairs/retired U.S. Army General] Eric Shinseki: “If you don’t like change, you’re going to like irrelevance even less.”

I love that quote. It strikes me as particularly descriptive.

Cheney: You advise companies to “destroy and reimagine.” What does that look like?

Peters: I have a strong bias that you act your way into thinking more than you think your way into acting. That means no one is smart enough to know what will work all the time. So the essence of “destroy and reimagine” is to try new stuff, with quick feedback loops and tests here and there.

I’m a strong supporter of decentralized organizations with energetic and talented people who are allowed to try any darn thing that comes to mind. During a seminar in Australia years ago, a successful businessman told me he lived off of six words: reward excellent failures, punish mediocre successes.

Cheney: What did he mean by that?

Peters: We start project after project with grand and glorious aims—and then two years later we wind up implementing something very moderate. Don’t always play it safe—try new things. If we fail faster, we’ll succeed sooner.

I would like to put an asterisk to “destroy and reimagine.” You represent institutions that didn’t forget their core values like a lot of those in the financial services world have.

I’ve spent 40 years on one topic: putting people first. So values such as service and integrity were the bedrock, are the bedrock, and will remain the bedrock.

The co-founder of Gore-Tex, Bill Gore, used to come to my seminars. He would tell employees “you’re allowed to change anything above the water line.” But not below the water line; those are the bedrock values.

In part two of this interview, Peters explains which financial services companies stand out from the rest—and what credit unions can learn from them.