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First published in 1982, it is one of the biggest selling and most widely read business books ever, selling 3 million copies in its first four years, and being the most widely held library book in the United States from 1989 to 2006 (WorldCat data). The book explores the art and science of management used by leading 1980s companies with records of long-term profitability and continuing innovation.
Background
In Search of Excellence did not start out as a book, as Tom Peters explained when interviewed in 2001 to mark the 20th anniversary of In Search of Excellence: Peters and Waterman were both consultants on the margins of McKinsey, based in the San Francisco office. In 1977 McKinsey director Ron Daniel launched two projects; the first and major one, the Business Strategy project, was allocated to top consultants at McKinsey's New York corporate HQ and was given star billing. Nothing came of it. The second 'weaksister' project (as Peters called it) concerned Organisation - structure and people. The Organisation project was seen as less important, and was allocated to Peters and Waterman at San Francisco. Peters traveled the world on an infinite budget, with licence to talk to as many interesting business people he could find about teams and organisations in business. He had no particular aim or theory in mind. In 1979 McKinsey's Munich office requested Peters to present his findings to Siemens, which provided the spur for Peters to create a 700-slide two-day presentation. Word of the meeting reached the US and Peters was invited to present also to PepsiCo, but unlike the hyper-organised Siemens, the PepsiCo management required a tighter format than 700 slides, so Tom Peters produced the eight themes.
Companies Covered
A list of companies covered in the book, and their subsequent financial performance.
Eight Themes
Peters and Waterman found eight common themes which they argued were responsible for the success of the chosen corporations. The book devotes one chapter to each theme. 1. A bias for action, active decision making - 'getting on with it'. Facilitate quick decision making & problem solving tends to avoid bureaucratic control 2. Close to the customer - learning from the people served by the business. 3. Autonomy and entrepreneurship - fostering innovation and nurturing 'champions'. 4. Productivity through people- treating rank and file employees as a source of quality. 5. Hands-on, value-driven - management philosophy that guides everyday practice management showing its commitment. 6. Stick to the knitting - stay with the business that you know.
7. Simple form, lean staff - some of the best companies have minimal HQ staff. 8. Simultaneous loose-tight properties - autonomy in shop-floor activities plus centralized values.
Criticisms
As early as 1984 it was apparent, to certain analysts, that the book's choice of companies was poor to indifferent. NCR, Wang Labs, Xerox and others did not produce excellent results in their balance sheets in the 1980s. Rick Chapman titled his book on high-tech marketing fiascoes, "In Search of Stupidity," as a nod to Peters's book and the disasters that befell many of the companies it profiled. He notes that "with only a few exceptions... [the excellent companies were] large firms with dominant positions in markets that were senescent or static." In an article in Fast Company, cited below, Peters remarked that the criticism that "If these companies are so excellent, Peters, then why are they doing so badly now," in his opinion "pretty much misses the point."[1]
Were there companies that, in retrospect, didn't belong on the list of 43? I only have one word to say: Atari. Was our process fundamentally sound? Absolutely! If you want to go find smart people who are doing cool stuff from which you can learn the most useful, cutting-edge principles, then do what we did with Search: Start by using common sense, by trusting your instincts, and by soliciting the views of "strange" (that is, nonconventional) people. You can always worry about proving the facts later.[1] BusinessWeek ran an article about Fast Company's article. As related by BusinessWeek, the article was actually written by Fast Company founding editor Alan M. Webber, based on a six-hour interview with Peters. Peters reviewed and approved the article prior to publication, but the actual phrase "we faked the data" was Webber's, and Peters had not actually used these words during the interview. BusinessWeek quoted Peters as saying "Get off my case. We didn't fake the data." According to BusinessWeek, Peters says he was "pissed" when he first saw the cover. "It was his [Webber's] damn word," he says. "I'm not going to take the heat for it."[2]
8 Attributes of an Excellent Company Tom Peters and Robert H Waterman identified the following attributes of an excellent business in their book - 'In Search of Excellence" 1. 2. 3. 4. 5. 6. 7. Bias towards action Acutely aware of the needs of their customers Promote Management autonomy and entrepreneurship Pursue productivity by paying close attention to the needs of their staff The existence of a company philosophy that is clear and based on important values Focus on the business that they know best Have a simple organizational structure with lean staff
References
1. ^ a b Tom Peters (November, 2001). "Tom Peters's True Confessions". http://www.fastcompany.com/magazine/53/peters.html?page=0%2C2. Retrieved 2008-07-17.. Quoted material also includes material from web page 4 of article 2. ^ "The Real Confessions of Tom Peters: Did In Search of Excellence fake data? A magazine suggests it did". 2001-12-01. http://www.businessweek.com/magazine/content/01_49/b3760040.htm. Retrieved 2008-07-17.