In Search of Excellence - Tom Peters and Robert Waterman 31/1/2011 A book review by Joey Ng

1982. This was the year the book was first published and this edition is also the one this review
is based on. In Search of Excellence is one of the most read books on management, and till today, has been widely acclaimed to be one of the best around. Although it is penned more than 30 years ago, the key points in this book are still very relevant in todays context because sound management principles cut through time and distance - a testament to why some of the top companies studied in this book are still at the top of their industry.

Written by 2 Mckinsey consultants, Tom Peters and Robert Waterman, this work is based on their study of 43 of Fortunes Top 500 they deemed excellent (using data spanning twenty years) at that point of research, to understand what makes them tick. Names like General Electric, General Motor, Lockheed and Polaroid were not considered as excellent and did not make the 43. This is telling of how critical the selection process was. The main purpose behind the book was to challenge the effectiveness of proven management techniques during that period, such as rigorous performance measurement, economies of scales, rules driven bureaucracy and quantitative analysis. At that point in time, 1970s, most business leaders and managers were schooled in the science of using systematic method to run an organization. While the scientific management philosophies of Frederick Taylor, Peter Drucker and Robert McNamara have their advantages, they tend to focus more on the structural side of an organization and centers heavily on management theories and models. The way most companies were run, using logic and rationality, ignored the significance of the people factor. People are paradoxical creatures who hold conflicting ideas. For example, we yearn to stand out while we seek comfort in a group. We crave autonomy as we look for a sense of belonging. We are illogical and quite hard to understand.

Peters argued that the use of logic to manage irrationality would stifle the one quality that brings about excellence in people Passion. From his studies, he found eight common themes that contributed to the success of the excellent companies: 1) A bias for action: a preference for doing something anything rather than sending a question through cycles and cycles of analyses and committee reports.

2) Staying close to the customer - learning his preferences and catering to them. 3) Autonomy and entrepreneurship breaking the corporation into small companies and encouraging them to think independently and competitively. 4) Productivity through people creating in all employees the awareness that their best efforts are essential and that they will share in the rewards of the companys success. 5) Hands-on, value-driven insisting that executives keep in touch with the firms essential business. 6) Stick to the knitting remaining with the business the company knows best. 7) Simple form, lean staff few administrative layers, few people at the upper level. 8) Simultaneous loose-tight properties fostering a climate where there is dedication to the central values of the company combines with tolerance for all employees who accept those vales. These themes are based heavily on action, staying close to the field and the idea of as little structure as possible. It is not to say these excellent companies are spine-less, loose and allow employees to do whatever they want. There are certain qualities they will not compromise nor dilute to meet short-term gains. These qualities formed the spine of the excellent organizations and examples of such qualities are great customer experience, value creation and quality products.

To strike a balance between autonomy and control, these excellent companies created a culture that is govern by a set of deeply-held core values. These values set directions, guide decision making and drive actions. The gaps that exist are where employees of these companies are encouraged to innovate, take risk and challenge the status quo. This is summed up by the last principle Simultaneous loose-tight properties.

In Search of Excellence was a challenge to conventional wisdom in the 70s. Today, we see more companies organized in flatter structure and place more emphasis on educating values and building organization culture. So, it is either by chance that the Principles listed in this book 30 years ago are somehow connected to current contemporary management beliefs or, the Principles are so effective and valuable that they withstood the test of time.