If your work thrills you, your business will thrive


January 16, 1995|By TOM PETERS

"What do you think of EVA as a barometer of business performance?" a Dutch seminar participant recently asked. "Not much," I replied.

I'm no expert on the pluses and minuses of Economic Value Added. I admitted as much, then confessed I wasn't that keen on earnings per share or return on investment either.

Sure I understand the importance of profitability, in my own business as well as others'. And debates over various measures have merit. It's just that they mostly put the cart before the horse.

The horse is what you make. The financial measure, important as it is, is a derivative of your product's goodness and acceptance.

In short, my bedrock performance measure for the packaged-goods maker is: "Do you get a buzz using your product?" For the grocer: "Is it a kick to walk through the store amid the noontime rush?" Consider my own measures of success:

* 1. Does the seminar I'm presenting turn me on? To do a good job, I must first satisfy myself. I've given thousands of seminars: How do I make this one stand out from the rest? If I'm to feel fresh and energetic, the material must feel fresh and energetic to * 2. Does it excite the most demanding customers? While I'd like all seminar participants to go home happy, my standard is provoking the toughest customers. In Amsterdam I worried about the chairman of a huge bakery chain, execs from Saudi Arabia, senior managers from Hewlett-Packard. While I read all the feedback I get, I read theirs first -- and if I fail them, I've failed utterly.

In fact, I'm delighted to lose customers! I want several to say, "Too far out." If I'm not too far out for the most conservative members of an audience, I'm too far in to be helpful to the risk takers in the audience.

* 3. Does it help the average customer? I haven't got it in for Joe or Jane Average. To the contrary, I insist on instant, detailed quantitative measures of customer satisfaction for all my seminars.

* 4. Does it pass my quantitative innovation test? I use hundreds of 35 mm slides to illustrate my presentations. Now and again I count the number of new ones; in general, I like to have about 20 percent new material every four months.

* 5. Does it pass my qualitative innovation test? New slides can be mere line extensions -- or brand new product families. Both are acceptable forms of innovation, but the latter is far more critical than the former. In my Amsterdam presentation, for instance, I introduced important material on product design and implementing change if you're not the big boss.

* 6. Will I brag about it next year? In five years' time? You only brag about things when you've pushed hard, made some bruising, messy leap into the unknown. Obviously not every seminar is going to pass the one-year-bragging-rights test, let alone the five-year version. But if, over a couple of months' period, no seminars qualify for memory lane, I'm in trouble.

* 7. Is the check in the mail? I like to get paid.

* 8. Is it a big check? Getting Mercedes- rather than Daihatsu-sized checks is a fair measure of competitive strength in my niche.

* 9. Is it a little check? Little checks are also important. Not just pro bono work (good stuff), but strolls down byways that allow me to explore an entirely new area. I like to give the occasional speech to folks whose business is foreign to me: To survive I must study like hell.

While this list is personal, I think it is also close to universal. As I've said before in this space, I fret ceaselessly about me-too products and services in a marketplace where good products and services from all over are arriving at a breathtaking rate.

The solution is clear: innovation that is bold, brash and stands a chance of leaving customers -- and your competitors -- breathless.

I've witnessed scores of boardroom debates on earnings-per-share targets, appropriate internal rates of return, etc.

On the other hand, I've attended far too few sessions that focus directly on whether the product adds zing to the strings of my heart. That's worrisome.

Perhaps it's just that I'm aging and fretting about my own legacy.

Nevertheless, I think there's ultimately just one question worth answering: Will you brag about it in the morning?

Tom Peters is a syndicated columnist. Write to him at Tribune Media Services Inc., Suite 1500, 435 N. Michigan Ave., Chicago, Ill. 60611; (800) 245-6536

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