Customer Reviews

In search of excellence: Lessons from America's best-run companies

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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; bias for action, close to the customer, autonomy and entrepreneurship, productivity through people, hands on, value driven, stick to the knitting (=focus on what you do best), 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.

I do find the introduction and management theory review very well written and enjoyable. Ironically, (for me) the authors find that chapter the least important part of the book. I beg to differ. Overall, this would make a good intro for those interested in management theory. While you're at it, try to also take a look at Michael Porter's and Peter Drucker's work. In my view they are the authority in the field.

I don't have much to add to the other reviews here on the content, but as a couple of reviewers here have pointed out, there's a problem with the way they reached their conclusions. They chose a series of metrics as indicators of "excellence": they ranked companies on these metrics to identify a sample of "excellent companies": they then profiled these companies to find common features. Statisticians call this "selecting on the dependent variable": all excellent companies might have a certain feature, but you can only say that the feature has something to do with their excellence if non-excellent companies don't have it. The features that Peters picks out might be important, but the research they do doesn't in any way prove that.

There was a follow-up piece of research done some years later (not by the authors) in a paper called "excellence revisited", which argued that excellence was basically a temporary phenomenon, and that even these companies reverted to the mean. This looked at the "excellent companies" subsequent performance and found that on average, they had deteriorated significantly in all measures of performance. They then picked a sample of "non-excellent companies" using the same ranking criteria as the original book did at the time that the original research was done. Sure enough, these on average improved significantly in performance.

Few people can lay claim to having created an industry. TomPeters can.

Tom Peters is widely credited with having created themanagement 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. END

This book was the 1982 best-selling look at what were then excellent companies and an attempt to distill the eight attributes they had in common. It still ranks high as an important historical contribution, but two-thirds of the "excellent" companies disappeared, got acquired and disassembled, or went through extreme difficulties. Hindsight tells us the eight attributes were simply things those companies did well at the time, but were not the answer to longevity. In fact, at least five of the eight attributes appear to be detrimental now. However, this book is still a good read for those wishing to track the evolution of management thinking from at least early Drucker to the present.

Life (and business) are a lot more fun if we are excited and committed to what we are doing. This book reawakens our sense that organizations can be exciting and meaningful places to be, filled with the potential for great results and enormous impact. We all have been touched by an outstanding leader and inspired to do more. Most of us would have a hard time spelling out what those leaders do. This book is a very practical guide to being a good example and a source of daily inspiration. You can read other books to figure out what to inspire people to do specifically and so forth, but this one is unique. You may find that you do not "get" a particular recommendation. To deepen your understanding, I recommend that you read A PASSION FOR EXCELLENCE in those areas where you are unmoved or unclear. It is filled with examples on the same points as IN SEARCH OF EXCELLENCE. I also like the title. Finding excellence is a never-ending task for us all. If you want to read a terrific book on how successful companies differ from their less successful competitors, be sure to read BUILT TO LAST. It is also a great companion for IN SEARCH OF EXCELLENCE.

"In Search of Excellence" is an interesting book to read which was an international bestseller when it was first published in 1982. The book was written for the general public in simple and easy to understand language and explores the art and science of management used by leading companies with records of long-term profitability and continuing innovation. However, the information presented was not based on hard data (or based on faked data), which was its main weakness.

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.

The book is divided into eight chapters which correspond with the main themes which Peters and Waterman argued were responsible for the success of the cited corporations, as follows:

* A bias for action: active decision making or getting on with the job.
* Close to the customer: learning from the people served by the business.
* Autonomy and entrepreneurship: entails nurturing innovation and promoting champions.
* Productivity through people: treating ordinary employees as a source of quality.
* Hands-on, value-driven: a management philosophy that guides everyday practice - management showing its commitment.
* Stick to the knitting: settle for the business that you know.
* Simple form, lean staff: some of the best companies have minimal overhead personnel particularly at head office.
* Simultaneous loose-tight properties: giving autonomy in shop-floor activities whilst maintaining centralised values.

The book has some interesting features as can be seen from the themes highlighted above that it is still worth buying.

While some of the advice in "Excellence" is good standard business practice info, I recently read a very funny new book called "In Search of Stupidity: Over 20 Years of High-Tech Marketing Disasters."

It made some excellent points that people should know. For instance, the data in Excellence is faked; "Stupidity" reprints the Busines Week article in which Peter's admits this. Once I read that, I had a hard time taking Excellence seriously.

In Search of Stupidity also points out that practically *all* of the high tech companies Excellence profiles either failed or had major financial problems. In my opinion, the book is a much better look at the real world problems that face companies than Excellence.

I read this book again after a gap of nearly 20 years. The world has significantly changed since then and so have the fortunes of many of the "excellent" companies listed in this book. Some have continued to excel, some have made a comeback after facing tough times and some have ceased to exist. Excellence is neither permanent nor an assurance for "lived happily thereafter" ending for a corporate fable. As often mentioned in most management books, the only thing that is permanent is change, and change has been rapid and unforgiving in the last two decades. In this context, is this one time business bestseller flawed in its study and its findings ?. The authors themselves answer this question in their opening remarks - "Authors' Note: Excellence 2003" in this new paperback edition.

Theory first. There is a solid attack on the Rational Model ( over emphasis on quantitative approaches to management ) in American business schools which the authors feel is a main cause for the decline of American companies in the third quarter of the twentieth century. The understanding of the human side and aligning people with the Organization's goals through a deep sense of respect and involvement is at the core of success at the excellent companies is the next hypothesis. In their search for excellence, the research leads to eight prominent attributes that are common across the best run companies. All these attributes have direct and significant link to this aspect of the human side of enterprise.

The excellent companies have focussed consciously and consistently on rigorously practicing several of the eight attributes. Failure to focus on these have led to setbacks in subsequent years. An outstanding athlete cannot be expected to win gold at all the Olympics in his lifetime. Athletes age and so do companies say the authors. But is there a prescription against aging for companies that are committed to excellence ?

This book is liable for criticism on the following counts :

- Too much of theory in the first four chapters, mostly borrowed from other earlier management gurus
- Descriptive and repetitive
- Data insufficiency for backing conclusions
- Sample does not cover all industries and restricted to American companies
- Talks of the past and ignores prescriptions for the future
- Attributes need to be ranked and revisited periodically and perhaps a new list might emerge

Several books have been written on this topic since this classic was first published in 1982. Many have addressed the points listed above. But this ground breaking book continues to be the pathfinder in all that has followed. Go back to the analogy of the athlete. A gold is a gold at any contest and this book deserves one for its own excellence.

I bought this book after reading many others, some of which referenced this book as "groundbreaking", "a landmark", and the like. While this book makes some good observations, it makes critical mistakes in oversimplifying a lot of its "evidence". Yet it fails to find any ideas that simplify its "eight basic principles".

As an example of a mistaken oversimplification, the book claims that "rationality" always yields negative, i.e. pessimistic, business forecasts, but this fails to understand that projections are guided by assumptions, that in turn are guided by management. Companies that penalize those whose forecasts are too optimistic will encourage its planners to use negative assumptions. Companies that don't, won't.

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". I highly recommend their books instead of this one.

Although this book has become a teenager, it still reminds me of the fun of childhood by reading about all the successes those companies had in their "growing up" years and the problems that many had as they matured and reached older age. This is not a life cycle book, but one that points out some things that caused success for a specific company at a specific point in time. There is a lot to be learned by looking into the cultures and values of those companies. Unfortunately, the eight principles of success culled from this study do not guarantee a wonderful future, or even fleeting success for today's companies. This book is worth rereading because it makes you think about why so many of these companies fell so far. A number of recent studies indicate that the ability to change and adapt quickly is what is needed for long term success. Urgency is key. To prepare for future success, I recommend THE 2,000 PERCENT SOLUTION by Mitchell, Coles, and Metz. It motivates managers to develop new ideas and ideal practices that will leave you better off in any future environment.