In Search of Excellence: Lessons from America's Best-Run Companies

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Overview

The "Greatest Business Book of All Time" (Bloomsbury UK), In Search of Excellence has long been a must-have for the boardroom, business school, and bedside table.

Based on a study of forty-three of America's best-run companies from a diverse array of business sectors, In Search of Excellence describes eight basic principles of management — action-stimulating, people-oriented, profit-maximizing practices — that made these organizations successful.

Joining the HarperBusiness Essentials series, this phenomenal bestseller features a new Authors' Note, and reintroduces these vital ...

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More About This Book

Overview

The "Greatest Business Book of All Time" (Bloomsbury UK), In Search of Excellence has long been a must-have for the boardroom, business school, and bedside table.

Based on a study of forty-three of America's best-run companies from a diverse array of business sectors, In Search of Excellence describes eight basic principles of management — action-stimulating, people-oriented, profit-maximizing practices — that made these organizations successful.

Joining the HarperBusiness Essentials series, this phenomenal bestseller features a new Authors' Note, and reintroduces these vital principles in an accessible and practical way for today's management reader.

The now classic volume which became a landmark business book.

Editorial Reviews

Wall Street Journal
“One of those rare books on management that are both consistently thought-provoking and fun to read.”
Fran R. Schumer
. . .[H]ighly readable and sensible. . .finds the secret of business success not in the head but in the heart. . .[through] respect for the individual, devotion to service and attention to the customer.
—New York Times Books of the Century, reviewed March 6, 1983
More Reviews (3) Fewer Reviews
Wall Street Journal
Exuberant and absorbing . . . one of those rare books on management that are both consistently thought-provoking and fun to read.
Fran R. Schumer
. . .[H]ighly readable and sensible. . .finds the secret of business success not in the head but in the heart. . .[through] respect for the individual, devotion to service and attention to the customer. -- New York Times Books of the Century, reviewed March 6, 1983
The Wall Street Journal
Exuberant and absorbing . . . one of those rare books on management that are both consistently thought-provoking and fun to read.

Product Details

  • ISBN-13: 9780060548780
  • Publisher: HarperCollins Publishers
  • Publication date: 3/2/2004
  • Edition description: 1st HarperBusiness Essentials Edition
  • Edition number: 1
  • Pages: 400
  • Sales rank: 81,863
  • Series: Collins Business Essentials Series
  • Product dimensions: 5.46 (w) x 8.02 (h) x 1.00 (d)

Meet the Author

Thomas J. Peters, "uber-guru of business" (Fortune and The Economist), is the author of many international bestsellers, including A Passion for Excellence and Thriving on Chaos. Peters, "the father of the post-modern corporation" (Los Angeles Times), is the chairman of Tom Peters Company and lives in Vermont.

Table of Contents

Acknowledgments
Special Acknowledgment.- David G. Anderson
Preface
Introduction
PART 1: THE SAVING REMNANT
1 Successful American Companies
PART II: TOWARD NEW THEORY
2 The Rational Model
3 Man Waiting for Motivation
PART III: BACK TO BASICS
4 Managing Ambiguity and Paradox
11 Simple Form, Lean Staff
12 Simultaneous Loose-Tight Properties
Notes
Index

First Chapter

In Search of Excellence
Lessons from America's Best-Run Companies

Author's Note

As we look back on the two decades since the publication of Excellence, our main feeling is delight. Delight that so many people embraced the book. Delight in that we think we mainly got it right.

Our main detractors point to the decline of some of the companies we featured. They miss the point, which was to learn from those who'd had a long run of success, just as we learn from athletes in their prime. We weren't writing Forever Excellent, just as it would be absurd to expect any great athlete not to age. (The sheer longevity of Procter & Gamble's success is, however, intriguing.) And to the most hardheaded of our critics on this dimension: had you bought an "excellence index" when we published and held it through 2002, your total return would have been 1,300 percent, compared to around 800 percent for the Dow and 600 percent for the S&P 500.

What we take most pleasure in is sticking to our guns in putting several theory chapters up front: "The Rational Model," "Man Waiting for Motivation," and "Managing Ambiguity and Paradox." We told the readers they could skip these. Now we don't think so. They should be read and are just as relevant today as when we originally published.

In brief, we were saying the following (but don't skip the chapters). First, people and organizations are not "rational" in the ways strategy, business, and organization are typically taught. It's dangerous to try to force a simplistic and misguided rationality on the way we manage. You cannot just manage "by the numbers." Don't even think about it.

Second, most of the management systems that treat people as "factors of production," as cogs in an industrial machine, are inherently demotivating. People are wonderfully different and complex. Leaders need to set people free to help, not try to harness them.

Third, the world is a confusing place, full of ambiguity. The hardest thing to manage is the "soft stuff," especially culture. Yet without serious attention to the so-called soft stuff, leaders will fail.

Nor would we change our eight attributes of excellence, though we're perfectly aware that another researcher, looking at the same data, might pick a different set. These eight pretty clearly describe what's different about the top performers:

A bias for action. In its simplest terms, this says "get out there and try something." Just as you don't learn anything in science without experimenting, you don't learn anything in business without trying, failing, and trying again. The trick, and it's a tough one, is a common cultural understanding of what kind of failure is okay and what kind leads to disaster. But don't kid yourself. No amount of analysis, especially market research, will lead to true innovation.

Close to the customer. This may be the hardest to accomplish and perhaps where our sample of excellent companies -- IBM, Hewlett-Packard, K Mart, and even McDonald's -- got off the track. It's hard. There's so much to pay attention to inside an organization that has time to understand customers, especially when the set of customers includes distributors and wonderfully irrational end users. Yet Procter's skill at keeping everyone in the organization in close touch with customers, combined with a formidable innovative capability, may explain that company's incredibly long history of success.

Autonomy and entrepreneurship. Even if you're big, act small. Organizations are simply collections of people, and people don't relate well to big, abstract entities. If you want to understand the success of Johnson & Johnson, 3M, Wal-Mart, and the original HP, look to the fact that they organize themselves into small, relatively independent units, held together by common goals and cultural norms.

Productivity through people. As the youngsters say, "Duh!" What else counts in an organization except people? Everyone gives lip service to the importance of their people, yet only a few really treat them as other than cannon fodder. One of the best examples we've ever seen was Delta Airlines with its "family feeling," which was so special that in 1982 employees banded together to spend a total of $30 million in payroll deductions to give their employer its first Boeing 767, the Spirit of Delta. Sadly, Delta lost that family feeling, maybe when it merged with Western Airlines.

Hands-on, value-driven. The idea is simple. Figure out what your company should stand for, what would give your people the most pride. Then actively manage toward that value system. Remember that profit is to business as breathing is to life. The top companies make meaning, not just money.

Stick to the knitting. Except for one or two notable exceptions, for example, Warren Buffett's Berkshire Hathaway and Jack Welch's GE, business diversity almost never works. Be particularly leery of the word synergy, which sounds great -- who doesn't want 1 + 1 to equal 3? Well, our observation then and now is that big mergers rarely work. Further, nothing screws up a successful business more than hyperfast growth.

Simple form, lean staff. Though organizations are inherently quite complicated, one ought not make them more so via complex organizational arrangements. Install a simple and workable structure; people will figure out the rest. Keep staff to a minimum, outsource a lot of staff activities, or use time-limited, project-oriented task forces (another form of the line organization). Big staffs, and most career staff people, always seem to get in the way of the folks in organizations who get the real work done.

Simultaneous loose-tight properties. Sorry about this chapter heading, but it does say what we mean. Any well-functioning organization is neither centralized nor decentralized but a wonderful combination of both. Around most dimensions the best companies, then and now, are loose. They give people exceptional freedom to do things their own way. At the same time, the great companies are highly centralized around a few crucial dimensions: the central values that make up their culture, one or two (no more) top strategic priorities, and a few key financial indicators.

Those are our eight attributes, then and now. Both of us have done a great deal of writing since Excellence, and we've expressed what we've seen in different terms. But we've never done better than in this book. The attributes are just that: attributes, not principles. But until something clearly better comes along, we'll stick with these.

-- Tom Peters
Bob Waterman
November 2003

In Search of Excellence
Lessons from America's Best-Run Companies. Copyright © by Thomas J. Peters. Reprinted by permission of HarperCollins Publishers, Inc. All rights reserved. Available now wherever books are sold.

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  • Posted December 4, 2010

    more from this reviewer

    Great book for business oriented people

    Its a good book that's well written. Should be a good read for almost anybody. You can pick up a lot of new vocab through this book as well!

    1 out of 1 people found this review helpful.

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  • Anonymous

    Posted May 8, 2010

    the reference on what top companies have done, and should do

    I keep losing my copy. I had the original in hardback.

    I liked this book because, to me, it is the gold standard of what a company should do to survive in today's competitive world. It covers, what to me is most important: getting and retaining employees. The part of the book that covers this details Hewlett Packard, which is a company that was admired as innovative. employees there got to go into the company components bin, and take what they needed for projects, no limits on whether it was for HP or for home development. This has stood out for many years.

    Other topics included an impressive look at how many levels of management existed between the lowest tier employee and the president of the company. It fascinated me that this was always less than seven in the best companies. Even more interesting was that this also applied to the Catholic Church.

    I love this book.

    1 out of 1 people found this review helpful.

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