Hidden Value: How Great Companies Achieve Extraordinary Results with Ordinary People [Hardcover]

Charles A. O'Reilly (Author), Jeffrey Pfeffer (Author)

Book Description

Publication Date: August 2000 | ISBN-10: 0875848982 | ISBN-13: 978-0875848983 | Edition: 1

Discover how the best companies win not by acquiring the right people - but by building the right organization. The 'war for talent' is one battle every company believes it should be waging. But while competitors are busy chasing after the same 'hot' individuals, smart companies are doing something infinitely more useful and far more difficult to copy - they're building organizations that make it possible for ordinary people at every desk and cubicle in their companies to perform as if they were stars. Blowing up the prevailing wisdom that companies must chase and acquire top talent in order to remain successful, "Hidden Value" argues instead that the source of sustained competitive advantage already exists within every organization. O'Reilly and Pfeffer, leading experts on organizational behavior and human resources, argue that how a firm creates and uses talent is far more important than how the firm attracts talent. The authors provide vivid, detailed case studies of several organizations in widely disparate industries - including Southwest Airlines, Cisco Systems, The Men's Wearhouse, and NUMMI - to illustrate how long-term success comes from value-driven, interrelated systems that align good people management with corporate strategy. In a refreshing break from management tomes that force-feed superficial frameworks and trite 'rules', the authors instead allow the company stories to take center stage. They guide readers in discovering for themselves how seven different firms maximize talent, why one firm hasn't fully released the hidden value in its work force, and, most importantly, how the winning companies have made it tough for competitors to imitate them. Collectively, the stories reveal a common path to success that places values before strategy, emphasizes implementation over planning, and focuses on getting the best out of all employees, not just individual stars. The authors also explore concerns or questions managers might have about how each company's experience parallels or conflicts with their own. Providing a rare opportunity for managers to actively participate in an invaluable learning process, "Hidden Value" offers a customizable template for building high-performance, people-centered organizations.

Editorial Reviews

From Publishers Weekly

In today's heated job market, companies must look within to develop and nurture talented employees, say O'Reilly and Pfeffer, both professors at Stanford Business School. They offer a detailed look at several companiesAamong them, Cisco, Men's Warehouse and PSS World MedicalAthat are profitable in competitive industries and that have successfully retained and promoted their staffs. Following a brief company history, the authors present a straightforward discussion of each company's culture and policies, in some cases including quotations from its executives. Occasionally, the secrets of a company's success are obvious: Southwest Airlines has carefully chosen a niche market; it puts high value on customer service and its employees feel as if their daily work will contribute to the future of the company. Certainly, CEO Herb Kelleher is part of the winning formula, but Southwest's business is run differently than other airlines. Its employees can work at different jobs and financial data about the company's performance as well as its competitors is shared regularly with staffers. Similarly, PSS Medical values its employees and works very hard at both recruiting and training people who will fit in at the company. With its emphasis on detailed anecdotes, this unusually engaging management book proves that concentrating on "soft issues" like employee values can give a company the competitive edge. (Sept.)
Copyright 2000 Reed Business Information, Inc.

From Booklist

Stressing the need to attract and retain the best people has become a mantra for corporate executives and human-resource departments. O'Reilly and Pfeffer warn, though, that too much effort is spent on attracting star performers and too little on fostering the creativity, drive, and ambition of current employees. Both are Stanford University business professors, and both have written popular management books. O'Reilly is coauthor of Winning through Innovation (1997); Pfeffer's titles include The Knowing-Doing Gap (1999). A common theme running through these earlier books and this new joint effort is that corporate strategy, values, culture, policies, procedures, and management practices all must be in alignment for companies to take advantage of the emotional and intellectual resources of the people that work for them. O'Reilly and Pfeffer let the stories of eight companies like Cisco Systems, Southwest Airlines, and the Men's Wearhouse "take center stage" to illustrate how internal talent can be maximized. The authors also suggest reasons why competitors of these companies have not been able to replicate their success stories. David Rouse
Copyright © American Library Association. All rights reserved

See all Editorial Reviews

Product Details

• Hardcover: 272 pages
• Publisher: Harvard Business Review Press; 1 edition (August 2000)
• Language: English
• ISBN-10: 0875848982
• ISBN-13: 978-0875848983
• Product Dimensions: 6.4 x 1.2 x 9.5 inches
• Shipping Weight: 1.4 pounds (View shipping rates and policies)
• Average Customer Review: 4.1 out of 5 stars  See all reviews (12 customer reviews)
• Amazon Best Sellers Rank: #147,330 in Books (See Top 100 in Books)

Most Helpful Customer Reviews

64 of 66 people found the following review helpful

5.0 out of 5 stars Outstanding Look at People-Centered Values for Success! September 4, 2000

By Donald Mitchell HALL OF FAMETOP 100 REVIEWERVINE™ VOICE

Format:Hardcover

In Strategy Safari, Professor Mintzberg and his coauthors describe that most people approach strategy from one of 10 different perspectives, mostly ignoring the others. That book argues that we would be better served to integrate these 10 perspectives into a combined one. In Hidden Value, Professors OReilly and Pfeffer succeed in combining four of those perspectives in a valuable synthesis. The four that are combined here are values, which people to attract and retain, determining which core competencies to build, and the role of senior management in strategy development and implementation.

At a time when there are many excellent books out on how to find and retain top talent, this book aims to do something different. "Hiring and retaining talent is great. Building a company that creates and uses talent is even better." So after you have read all about Topgrading and other useful methods, read this book next.

The book is unusual (especially for one from Stanford professors published by Harvard Business School Press) in that it uses a structure designed to allow you to learn more than frequently occurs with straight exposition (thesis, followed by examples to support the thesis, and then a conclusion).

To do this, the authors found 8 companies that exhibited people-centered values in different industries to succeed in different ways. You are invited to peruse detailed case histories to get a sense of how these companies work. Following the eight is an example of a company with many similar approaches that was not doing as well, Cypress Semiconductor. You are invited to think through what's different.... Later on, you also do mini-studies of People Express and Levi Strauss to see where they vary from the model that you have developed from the cases.

But if you do want to know what the authors think about the cases, their conclusions are summarized at the end of every chapter. Chapter 10 also looks at the overall model they discern.

They see a process whereby each of the successes starts out with a focus on people that is primarily employee centered. This focus often comes from the founder or the current CEO. The company then looks for people who share that focus. At some point, common values begin to emerge among the leadership and the rest of the company. The company continues to focus on coalescing around those values by hiring people with those values, and teaching the values to new employees. Values are reinforced everyday through communications, information flows, training, and rewards and recognition. This creates an environment of mutual trust and respect. Then the company looks at the core competencies that make sense in light of the people, values, and market opportunities and develop those core competencies The company then looks for new strategies that build on the core competencies. Senior management follows at this point in leading from and to reinforce the values.

The payoffs in the case histories relate to superior performance in key valued-added areas (which differ by case), reduced turnover of people which decreases cost of employment and improves performance further, trust and information flows that encourage useful experimentation, and consistency of focus which allows improvement to be greater and on-going.

The point of the book is that the "what" to do is pretty simple, but few people have the commitment and patience to handle the "how" to do it. Read more ›

70 of 74 people found the following review helpful

3.0 out of 5 stars OK Anecdotes Collection of People-Centric Success October 30, 2000

By Prof David T Wright

Format:Hardcover

"Hidden Value" purports to offer a new management book style and a "people-first" focus to organisational competitive advantage. This style involves a learn & do structure to 8 anecdotes, rather than the usual hypotheses, case study evidence and checklists often used by many US educators & consultants. Note `learn & do" has been practiced for decades by military and engineering schools (for both physical maneuvers/value-add as well an intellectual stratagems/ designs etc..).

The repetitive anecdotal structured (e.g. introduction; background; values, philosophy and spirit; people/system, and lesson learnt) chapters span success stories from: SouthWest Airlines; Cisco Systems; The Men's Warehouse; the SAS Institute; PSS World Medical; AES; New United Motor Manufacturing Inc; and Cypress Semiconductor.

Strengths include: the broad range of case studies from different sectors including a few non-US examples; and the extremely timely "life-balance" and "people matter" message.

Weaknesses include: repetition of text (perhaps 35% of book); content gaps & granularity problems (e.g. aligned individual/team motivation models missing); a passive observational feel; a superficiality of analysis; a lack of formal tools to carry out own "people-centric" analysis; an often colloquial cliché-filled style (dates quickly); inconsistencies in many financial table rankings and formatting; and a lack of labeling/scales on the most significant table in the book on p.239.

O'Reilly/Pfeffer suggest through this table (p.239), that exceptional performance from committed people requires the organization to use the HR levers of: values, culture and strategy alignment; hiring for fit; investing in people; widespread information sharing; team-based systems; and rewards and recognition....

Better alternatives include: "The Secrets of Software Success" by Hoch et al (100 global software companies success factors including people) (ISBN 1578511054 HBS Press 1999); and the superb "First to the Future- on Active Leadership" by Willi Railo (rigorous proven methods to coach & lead Olympic-standard people, applicable to all) (ISBN82-991169-5-3 Norbok A/S 1995).

Having recently reviewed "The Knowing-Doing Gap" also co-authored by Pfeffer, I was struck by great similarities in case studies/data from SouthWest Airlines; Cisco Systems; The Men's Warehouse; the SAS Institute; PSS World Medical; AES; and New United Motor Manufacturing Inc. (couldn't remember if Cypress Semiconductor was featured). To this reviewer, both books cover a similar subject-matter less-well, and perhaps would have better been written as one really good book. Read more ›

17 of 17 people found the following review helpful

5.0 out of 5 stars Detailed case descriptions of high performing companies December 30, 2001

By Coert Visser

Format:Hardcover|Amazon Verified Purchase

This book tells the story of eight extremely successful companies that manage to bring out the best in their people. The stories are detailed descriptions of the company's backgrounds, strategies, systems and management practices. The stories are also larded with quotes from the company's CEO's, HR managers and employees. Following this approach the authors provide the readers the opportunity to form their own hypotheses about the companies' successes. But the authors also present their interpretations of the case studies.

What these studies show is how these high performing companies have achieved their success by aligning their values, strategies and people. This is something which is easy to understand but hard to do. It requires consistent articulation and implementation of the values and vision and a relentless attention to detail in ensuring that all policies and practices support the company's values. In order to be able to show this kind of consistency a real belief and commitment are needed and a willingness to persevere.

This book shows how high performing companies consciously turn a lot of the conventional management wisdom upside down. For instance:

1. Contrary to what many people now think, recruiting, selecting and retaining unique talent is NOT the prime source of competitive advantage. Although these activities are important, the examples of these extraordinary companies show that it is much more important to build a culture and work system that enables all people to use their talents and develop their talents. A byproduct of this will be that your company will also be better at attracting and retaining people.

2. Values first instead of strategies.... The conventional view puts competitive strategy on top and derives from that what structure is needed, what competencies and behaviors are needed and so on. The companies described here work differently. Although they do have competitive strategies these are secondary to their set of guiding values and to the alignment of these values with their management practices. In other words: they have a values-based view of strategy.

3. Respectful and trusting way of dealing with people. Many companies monitor, check and try to control employee behavior. The hidden value companies work differently. In the spirit of Douglas McGregor's book The Human Side of Enterprise, they seem to understand that if you begin by designing systems to protect against the small unmotivated minority, you end up alienating the motivated majority. So they put their people first by treating them respectfully, involving them and trusting them.

Lessons like the ones presented in this book can be found in several other books by for instance Jeffrey Pfeffer himself, David Maister and Jim Collins. What makes this book different and interesting to me is the presentation in the form of detailed case descriptions. Read more ›