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In Search of Excellence: Lessons from America's Best-Run Companies Paperback – February 7, 2006
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“One of those rare books on management that are both consistently thought-provoking and fun to read.” (Wall Street Journal)
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The now classic volume that became an immediate bestseller as well as a landmark business book. "One of those rare books on management that are both consistently thought-provoking and fun to read."--Wall Street Journal --This text refers to the Hardcover edition.
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The authors selected eight key factors that they reasoned to be drivers of success. They then identified a number of companies that they considered to be "excellent" performers, and used examples of their respective organizational structures to highlight the eight factors. The key factors include:
* Bias for Action: getting things done, open communication between employees and the management, experimentation;
* Close to the Customer: obsession with reliability, service, and quality to gain and retain customers;
* Autonomy of Entrepreneurship: in-house competition, encourage creativity, ability to tolerate failure;
* Productivity through People: treating employees with respect, make them feel important, management by wandering around the office and communicating;
* Hands-on, Value Driven: emphasizing the importance of corporate history and tradition using stories and myths, rather than bureaucratic policies;
* Stick to the Knitting: understanding what the company's primary business is, and not diversify into ventures where experience is not currently present;
* Simple Form, Lean Staff: avoiding complex management structures, increasing the ability to implement changes to the processes quickly and easily in accordance with the dynamic environment;
* Simultaneous Loose-tight Properties: balance of central direction and individual autonomy, combination of control and innovative entrepreneurship.
Many ideas developed by Peters and Waterman do appear to have a universal truth quality to them. Most successful companies today do in fact possess the aforementioned characteristics.
Interestingly, nearly two-thirds of all "excellent" companies discussed in the book, have gone bankrupt or were acquired by other firms. It appears that excellence cannot be sustainable over a long-term period, and eventually meritocracy sets in. This issue was not discussed by the authors, but one could explain it by attributing it to changes in management, which in turn led to the disappearance of the key factors.
For example, consider the recent competition faced by General Motors. With increasing prices on non-renewable resources and rising environmental awareness, American consumers began demanding more fuel efficient automobiles. Japanese competitors, such as Toyota and Honda, were able seize this marketing opportunity by delivering vehicles that outperformed those of GM. GM was too late with becoming "close to the consumer," leading to a massive loss in a market share, in turn leading to an overall fall in sales.
Another example can be provided by a once excellent mass-market electronics retailer, Circuit City. The company was praised for its level of superior service. The company spent significant amount of time on staff development, which differentiated it from other retailers. The change in management in the early 2000s also brought cost cutting measures which replaced well-trained service employees with minimum wage personnel. Forgetting its history and unique selling proposition drove consumers away from Circuit City, ultimately leading to bankruptcy of the organization in late 2008.
Some could mistakenly conclude from this that excellence is simply a temporary state, and cannot be sustained over a long-term period. Looking at the decline of some of the once great companies clearly shows which one of the eight factors had gone awry, and if addressed in time could have kept the company at its excellent condition. The authors of the book could not have perceived the fall of some of the great companies mentioned in the book, yet they did clearly say that excellent companies must not lose sight of the key factors, as doing so will lead to disappearance of overall excellence and could even escalate to complete failure, as it has been shown in the examples above.
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I will be returning this one as well
Barnes & Noble----a sure bet