Friday, June 21, 2013

"In search of excellence"- 30 years after Tom Peters book release!

This publication is a survey written by a couple of McKinsey consultants that seek to define the characteristics of successful, I mean excellent, organizations using the McKinsey 7-S framework; Structure, Systems, Style, Staff, Skills, Strategy, and Shared Values.
Their findings suggest that eight attributes are common for an excellent organization;
1. bias for action,
2. close to the customer,
3. autonomy and entrepreneurship,
4. productivity through people,
5. hands on,
6. value driven,
7. stick to the knitting (=focus on what you do best), .
8. simple form lean staff, and simultaneous loose-tight properties (balance between centralized/decentralized organization). This is it.

Although the authors have a pleasant narrative style and are eloquent in making their point, I hesitate to buy into the arguments presented, first and foremost because I question the all encompassing validity of the McKinsey 7-s approach. Secondly, the authors cite companies such as Digital and Wang as qualifying for excellency. Whatever these companies did during the eighties, it wasn't good enough in the end since their advantage was not sustained and hence I wouldn't call them excellent. Thirdly, the best before stamp is obvious.

Few people can lay claim to having created an industry. TomPeters can.
Tom Peters is widely credited with having created the management guru industry. Before him it is said that "management thinkers wrote articles in academic journals, gave the occasional seminar, and worked as consultants for a few large corporations". The biggest blockbusters sold under five hundred thousand books.

`In Search of Excellence', co-authored with Bob Waterman, is Tom Peters first book and sold over 6 million copies. Its success surprised their colleagues at McKinsey, who had laughed at the idea that Peters and Waterman would keep the royalties, "should the book sell 50 000 copies".

Two decades later, `In Search of Excellence' is still one of the most readable management books. The eight characteristics of excellent companies, a bias for action, close to the customer, autonomy and entrepreneurship, productivity through people, hands-on values driven, stick to the knitting, simple form and lean staff, simultaneous loose-tight properties are all still relevant and still ignored today. It is written clearly, painting vivid pictures with anecdotes and examples from real companies.

Peters went on to become a megastar in the field of management entertaining, able to charge up to $80 000 for a one day show. The management guru industry is estimated to exceed a billion dollars and management books, including several by Peters himself, now regularly find their way into the best seller list. Peters'later writings have sometimes inspired and sometimes puzzled a new generation of managers.

This book is a classic. Great companies struggle to remain on top over an extended period. But the lessons learned endure. 

This controversial book had a widespread impact on Wall Street analysts and corporate management at its time of publication. The word Excellence appeared on many American corporate strategy statements.

However, some few years later, a significant number of the companies highlighted in this book as fine examples of Excellence, particularly high technology companies including Atari, Data General, DEC, IBM, Lanier, NCR, Wang, Xerox and others failed to produce excellent results. The book "In search of Stupidity by Merrill Chapman" chronicles some of the fallacies propounded in the book especially with respect to the high technology companies profiled in the book.

Many of the "excellent companies" have seen very bad times or were driven out of business completely in the years following the book's release. I think that shows that the authors were missing quite a bit in understanding the real nature of excellence. Fortunately, in subsequent years authors such as John Case (Open-Book Management) and Jack Stack (The Great Game of Business) have hit upon a much simpler yet more complete model for excellence. Not only does their model explain what is correct about The Search for Excellence, but it also explains the correct elements in many management ideas since including "reengineering", "TQM", "Empowerment", and "Six Sigma".

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