The year 2012 is not only the Year of the Dragon, it also marks 30 years since In Search of Excellence was published. While there have been voices over the years which have been critical of the book’s methodology, its resulting content, and even its writing style, the case can be made that it is the most influential management book not only in these last 30 years but perhaps–just perhaps–ever.
- It created a new genre of “best seller” business books, works that were not only informative but interesting and highly readable for Everyman. With a few exceptions, such as McGregor, Chandler, Sloan, maybe Drucker, many (most?) prior books on management/leadership were arcane tomes written by academics for academics and practitioners and were rarely found on any popular “best seller” list. Now “business” is considered a book category in itself thanks in no small part to Excellence.
- Authors Peters and Waterman did not invent it but they certainly popularized the notion of identifying a short list of factors or variables about what made companies “excellent” (they had 8). And while one could argue whether the themes were absolutely correct, the point is they created a format and a common language for gauging company success beyond the traditional financial metrics. It’s an approach used regularly by business writers and researchers since.
- By and large their conclusions were right. In my book, 7 of their 8 themes/variables in Excellence have withstood the scrutiny and tests of time despite the turbulence in the business world these last 30 years. Only the theme “Stick to the knitting” has turned out to be an unwise practice, although it still makes sense for some companies and some industries, such as the auto industry. But if Apple would have stuck to the knitting it would still be a niche computer maker and Amazon would be a book-selling broker with no brick-and-mortar assets or inventory.
- The book led to the growth of the business-guru industry. You can argue whether this has been a good thing or not, but few can argue that Excellence and author Tom Peters were not major catalysts for that development.
Peters and Waterman wrote the book while they were both at the San Francisco office of McKinsey, an outpost that Peters said in a provocative 2001 interview with Fast Company “never made any money but was well known for its weirdness.” (Note: Peters was also one of the original investors in Fast Company).
The book started out as a study of 62 companies, according to Peters, and they ended up identifying 43 companies as “excellent.” The fact that Atari and Wang Labs were on the excellent list and GE was not led to some of the criticism of their work, vilification that Peters said “pretty much missed the point” in that 2001 interview. According to the authors, excellence is all about a focus on people, customers, and action.
Those three focus areas of people, customers, and action in turn created the 8 famous variables or themes identified in Excellence:
- A Bias for Action – Active decision making; “ready-fire-aim; experimentation;
- Close to the Customer – Understanding the customer; obsession with service and quality;
- Autonomy and Entrepreneurship – Fostering innovation, skunkworks, internal champions; tolerating failure;
- Productivity Through People – Creating a culture of trust and respect but with a “toughness” for results; treating people like adults, as partners;
- Hands-on, Value-Driven – Management beliefs and principles that guide everyday practice; superordinate goals that provide direction for action;
- Stick to the Knitting – Stay with the business that you know; do what you do best;
- Simple Form, Lean Staff – Dealing with complexity by keeping the organization structure as simple as possible;
- Simultaneous Loose-Tight Properties – (My personal favorite) Figuring out what needs to be standard or consistent and what can be different and autonomous; providing for appropriate latitude for people at all levels to be engaged in the work.
For those who are twenty- or thirtysomething and who are readers of best-selling business books but who have not read “Excellence,” the above list of the 8 themes might elicit a reaction of “Well, duh!” They might wonder how it is that a book full of such common sense–stuff everybody knows–sold at all. The response to that, of course, is that in 1982 those themes and best practices were anything but common sense and it was this book more than any other which created a groundswell of popular interest in leadership and management practices.
I have my hard cover edition of the book I bought and read the year it came out and having perused it for the first time in years to write this post, I’m going to put it on my reading list for this year to dig back into it page-by-page and test it with an admiring but critical eye.