In Search Of Excellence: Lessons from America’s Best-Run Companies
Today’s post is a summary and reflection on the book In Search of Excellence by Tom Peters and Robert H. Waterman. I have decided to structure this post more than previous ones by having a summary, reflection ,and key takeaways & application of the learnings sections respectively to clearly reflect on each.
The book is a careful examination of the companies that greatly succeeded in the 1980s. When reading it, it felt like a precursor of Jim Collins Good to Great, as it seemed to take similar approach was taken with careful research, interviews, and extensive time observing the companies and their practices.
There are eight attributes that described the most excellent and innovative companies of this time.
- A bias for action. “Get out there and try something.”
- Close to the customer. Companies learn from those people that they serve.
- Autonomy and entrepreneurship. The ability to foster leaders and innovators in the organization.
- Productivity through people. Listen to your employees and treat them like adults.
- Hands-on, value driven. Continually reinforcing company values and driving action towards them.
- Stick to the knitting. Business diversity rarely works, with a few exceptions like Jack Welch (GE) and Warren Buffett.
- Simple form, lean staff. Don’t get overly complex with structure and run your company efficiently in terms of resources.
- Simultaneous loose-tight properties. An intelligent approach to organizing has to involve at least seven variables: structure, strategy, people, management style, systems and procedures, guiding concepts, and shared values. At the same time, innovative companies are continually responding to changes. Essentially, this is the co-existence of firm central direction and maximum individual autonomy.
Other Key Takeaways:
- Large poor performing companies tend to focus on internal politics, on the numbers, or their financial targets. The successful ones focus on the customer, the product, the people who make and sell it, and that every man seeks meaning in their job (not just the few that are in the bonus pool).
- Top companies continually come up with new projects to hang on to valuable people and give them areas to grow and develop. This often means flexible reorganization and task teams. Optimal group size is 7 and ideally would have volunteers (people who actually want to work on it vs. assigned), limited duration, and set their own goals.
- Creativity= thinking up new things
- Innovation= doing new things
- New ideas succeed when the project has people in 3 roles: product champion, executive champion, and the godfather (aging leaders who provides role model for championing)
While the business place has evolved tremendously since the 1980s, the guiding principles of excellence identified here still hold true I believe. While some seem obvious, I think there are few companies that actually live out the principles and even fewer that have all 8 in place.
I think it is also interesting to note that sustained excellence is truly rare, as many of the companies mentioned in the book would not be viewed the same today.
The immediate thought to me is to assess the company you currently work at and how well both the company and yourself are working towards these guiding principles. Certainly those towards the top may have the upper hand in terms of influence and action for them, but thinking that you, your boss, or someone you work with can fix these is a good step forward.
The principle that stuck out to me is having a bias for action. I think it is very easy for an employee or organization to take the safe route or not dream big enough to fail with an experiment. Too often in companies there is no follow-through of what is discussed in meetings and time is spent on the immediate needs vs. the long-term projects that can make a big impact.