Book : In Search of Excellence
Author: Tom Peters & Robert H
Waterman
In search of Excellence is a book on
research using 7S (Strategy & Structure (hardware), Style, systems, Staff,
Skills, and shared Values (software)) framework of McKinsey as the authors were
working with McKinsey. The book was first published in 1982 and thought that
was striking the mind is after 22 years is it makes relevant to today’s
competitive and technology companies.
To identify the rational of the excellence companies the author had
chosen over 43 companies out of the Fortune 500 and held them up as defenders
of excellence, measured by six financial yardsticks such as Compound asset growth, Compound equity
growth, Ratio of market value to book value, Return on capital, Return on
equity and Return on sales to validate the secrete behind driving
excellence. The best part is even today these companies are doing well and
there are case studies shard in the book. However one drawback is the analysis
and comparison of these shortlisted companies are not been reported. My key insights from the book are
·
Quality and Service are invariable hallmarks.
The excellent companies require and demand extraordinary performance from
average man. Service, Quality, Reliability are the strategies aimed at loyalty
and long term revenue stream growth. Three themes in an effective service
orientation
1. Intensive,
active involvement on the part of senior Management
2. A
remarkable people orientation
3. High
intensity of measurement and feedback
·
Excellent companies has the ability to manage
ambiguity and paradox. Excellence companies had gotten to be the way they are
because of a unique set of cultural attributes that distinguish them from the
rest. The excellent companies have developed cultures that incorporated the
values and practices of the great leaders.
·
Tools are biased towards measurement and
analysis. Paralysis through analysis syndrome. Tools didn’t substitute for
thinking. Intellect didn’t overpower wisdom. Analysis didn’t impede action.
Rather these companies work hard to keep things simple in a complex world.
·
Eight
attributes of excellent, innovative companies are
1. Bias
for action, for getting on with it
2. Close
to customer
3. Autonomy
and entrepreneurship
4. Productivity
through people
5. Hands-on,
value driven.
6. Stick
to the knitting
7. Simple
form, lean Staff
8. Simultaneous
loose tight properties
·
Good mangers make meanings for people, as well
as money. Treating people – not money, machine, or minds as the key natural
resource. Majority of businessmen are incapable of original thought because
they are unable to escape from the tyranny of reason. Gamesmanship replaces
pragmatic action. Mangers job is decision making. Make the right calls. Make the
touch calls. Managers job is to keep things tidy and under control. Get the
incentives right and productivity will follow. Three items – inventories,
profits and sales – form a crucible for managers.
·
The exclusively analytic approach run wild leads
to an abstract, heartless philosophy. To be narrowly rational is often to be
negative. Today’s version of rationality does not value experimentation and
abhors mistakes. The excellent company response to complexity is fluidity. The
rational model causes us to denigrate the importance of values. Fluidity,
chunking and experimenting are interestingly abetted by the character of the
excellent companies’ formal system.
·
Managing process is an interactive flow of three
variables; Path-finding, decision making and implementation.
·
Our control systems are designed under the apparent
assumption that 90 percent of the people are lazy. Association with past
personal success apparently leads to more persistence, higher motivation, or
something that makes us to do better.
·
Negative reinforcement will produce behavioural change,
but often in strange, unpredictable, and undesirable ways. Positive
reinforcement causes behavioural changes too, but usually in the intended
direction. Two ways to accomplish shift – First we attempt through positive reinforcement
to lead people gently over the time to pay attention to new activities. Secondly the reinforcement should have
immediacy. Third system of feedback mechanisms should be account to
achievability. Listening carefully, frequently speaking with encouragement and
reinforcing words with believable action.
·
Excellent companies tap the inherent worth of
the task as a source of intrinsic motivation for their employees. Excellent companies know to manage Paradox. Excellent
companies are learning organisations. Human needs in the organisation are
1. People
need for meaning
2. People
need for modicum of control
3. People
need positive reinforcement to think of themselves as winners in some sense
4. Degree
to which actions and behaviors shape attitudes and beliefs.
·
Small group is the most visible of the chunking
devices. Small groups are quite simply the basic organisational building blocks
of excellent companies. The true power of the small group lies in the flexibility.
·
Five fundamental attributes of companies close
to the customer
1. Astute
technology manipulations
2. Pricing
skill
3. Better
segmenting
4. A
problem solving orientation
5. Willingness
to spend in order to discriminate.
· Excellent companies have 5 attributes of
communication system that seems to foster innovation
1. Communication
systems are informal
2. Communication
intensity is extraordinary
3. Communication
is given physical supports
4. Forcing
devices
5. The
intense, informal communication system act as remarkable tight control system.
- · Excellent companies do acquire; but they acquire and diversity in an experimental fashion.
