“In Search of Excellence” Revisited

IN 1982, Tom Peters and Bob Waterman were released In Search of Profit: Lessons from America’s Best-Managed Companies. The book was a huge business bestseller and served as a guide for managers for years to come. It has become required reading in business school classes. But, 40 years later, few are now talking about the book. Maybe it’s time for that In Search of Order to find a new audience.

When the book project began in 1978, the US was in the midst of an economic quagmire. Inflation is in the double digits while productivity and personal income are stagnant – an economic condition known as stagflation. Interest rates are through the roof. Interest on real estate loans rose to 20 percent and higher. The country suffered an existential crisis, as well, amid an OPEC oil embargo along with the Vietnam War and Watergate fatigue. Feel familiar?

September 11, the wars in Iraq and Afghanistan, the Great Recession, the COVID pandemic, and polarized politics have created our own concerns. However, Peters and Waterman point out that there are bright spots in the economy. Despite the times, some companies strive for excellence in the execution of their missions. They believe that if the characteristics of the best companies are recognized and shared by corporate America, more organizations can become better and get the country out of its difficulties.

Consider the infinity of these basic characteristics:

Eight Characteristics of Good Companies

As Jim Collins did in the Good to Good: Why Some Companies Make the Leap…And Others Don’t, Peters and Waterman developed a methodology for their study. Structure, strategy, people, management style, systems and procedures, guiding concepts and shared values, and corporate strengths and skills, along with financial performance, serve as criteria for selecting the best. companies. Forty-three companies made the cut, with eight common characteristics identified among them:

A bias for action rather than overanalyzing situations
A customer-first focus in all decisions
Continuous innovation in new products, services, and processes through autonomy and entrepreneurship
Productivity through well-trained, rewarded, and empowered front-line employees
Hands-on, values-driven leadership
Stick to knitting and avoid distractions from the core business
Avoid top-heavy executive ranks and organizational bureaucracy
Simultaneously loose-tight properties where firm targets are set, but individual discretion is allowed to achieve them

The eight characteristics of excellent companies are well-known today, although most do not know their origin. But knowledge and application are two different animals. How many companies today are actually good? How many companies exhibit these eight characteristics? And is a new study needed to identify the good companies today that will serve as beacons to pull the country out of its decline?

Probably not. Buried within the text, Peters and Waterman offer the bottom line on how to identify excellence in companies. This is one that we use every day, consciously or not, every time we buy something. In the best companies, “The passion for the product and customer is palpable.”

Love the Customer

Love. It is a powerful word, which evokes romance and love. But it can be adapted to a business context to reflect the values of caring, kindness, consideration, respect, and honesty. Love is also understood by placing it at the end of a continuum with its opposite: greed. We recognize the greed of a company when it misleads, avoids doing things right by its customers, ignores the welfare of its employees, layers bureaucracy between executives and so on to avoid being- liability, poor quality, and hit the customer with subtle behaviors such as hidden. fees and charges.

Love and greed. You know them when you see them. For example, every time my local Culligan service delivery person comes with salt for my water unit, he tries to leave an unnecessary extra bag in my garage. He told me it was to reduce the number of trips to my house and save gas. He never gave me a straight answer as to why he didn’t just put the required amount in the unit and leave it at that. I now have six more bags piled up in my garage from the times I never stopped this practice personally. The corporate office didn’t solve the problem for me either. Whether it’s an accounting trick to increase sales per stop or a fuel savings for the driver, one thing is clear: Culligan made a decision that was good for them but not for the customer. That’s what greed looks like, and not customer love.

Following the Golden Rule, companies should treat customers as they would like to be treated. Fred Reichheld, the creator of the Net Promoter Score, believes that love and greed are the foundations of two different types of capitalism: customer capitalism and financial capitalism. Customer capitalists follow the Golden Rule of customers, while finance capitalists make decisions with the bottom line as their sole guide. However, treating the customer with love is the best way to increase the bottom line in the long run. Financial capitalism, on the other hand, is concerned with short-term consequences without regard for long-term consequences.

Capitalism is now being examined to see if it is the right system for the country to operate under. Could loving the customer help companies make a better case for what capitalism has to offer? Can loving the customer help companies play a role in improving the morale of the country?

Excellence Discovered in Details

You can also tell a company that strives for excellence and one that loves the customer by how much it pays attention to the details of its products and services. Consider a movie theater. Does the tasting area have supplies? Are the seats and aisles cleaned well between performances? Are the toilets well maintained? These small touches add a special atmosphere to how we experience a movie. If the theater looks like it was given the care of a messy college dorm room, we better wait for the movie to come to our big screen televisions at home.

With these qualities in mind, let’s circle back to the state of the world today. Our political climate may be difficult to change, but we all have the opportunity to improve things in our work. Because now is not the only time in which these struggles occur, nor will it be the last, the pursuit of excellence remains one of the best ways to restore purpose and satisfaction in our lives. Enlightened managers with a new commitment to efficiency and quality in the 1980s made a difference. A job well done by enough of us in these times can bring much-needed change to the world.

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Michael Goldsby is the Stoops Distinguished Professor of Entrepreneurship and Chief Entrepreneurship Officer at Ball State University. Rob Mathews is the Executive Director of the Entrepreneurial Leadership Institute at Ball University. His new book with co-authors Min Basadur and Rob Mathews, Design-Centered Entrepreneurship, Second Edition (Routledge, 2022), provides a research-driven, step-by-step approach to creative problem solving. Learn more at www.elprofile.com.

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