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Tom Peters & Robert Waterman: In Search of Excellence

Management literature is chock-full of books about the best companies and how to emulate them. Arguably the best of all these books is Tom Peters’ and Robert Waterman’s In Search of Excellence.

After 35 years, the book remains in print and, while some of its exemplars have not proved to show such enduring excellence, the ideas persist.

Tom Peters & Robert Waterman - In Search of Excellence
Tom Peters & Robert Waterman – In Search of Excellence

Tom Peters

We have covered Tom Peters in some depth in an earlier Pocketblog. He was born in 1942 and went to Cornell University on a US Navy scholarship. He earned a bachelor’s degree in Civil Engineering and served for four years in the US Navy. Following that, he got a PhD in Organisational Behaviour from Stanford University.

In 1974, he joined US management consulting firm McKinsey in their San Fransisco office, quickly becoming a partner. There, he took on a major research project looking at the organisational and implementation aspects of companies, while colleagues in the New York office got the plum research project around strategy.

As Peter’s project matured, long-serving McKinsey colleague, Robert Waterman, became involved, and their work morphed into the McKinsey 7S Model and then into the book, In Search of Excellence.

Robert Waterman

Robert Waterman grew up in the US during the war and attended the Colorado School of Mines, where he graduated in 1958 with a Bachelor’s degree in Geophysics. He then went on to gain an MBA from Stanford University in 1961.

He joined McKinsey in 1964 and remained with the firm until 1985, leaving as a senior director and a member of the Firm’s Executive Committee. He working in Australia and the San Francisco office. It was in the latter that he met and started to work with Tom Peters on the project that would become the book, In Search of Excellence.

When Peters was fired from McKinsey for an article that was read as denigrating strategy in favour of operations and implementation, Waterman remained with the firm. Peters was granted 50 per cent of the royalties of the book the two were working on. McKinsey retained the 50per cent share for Waterman’s half.

Eventually, this hard line rankled and Waterman left the firm. He co-founded energy firm AES, and served on a number of corporate boards. Increasingly his non-executive roles focus on not-for-profits.

The McKinsey 7S Model

In researching ‘cool’ companies, Peter began to assemble a humanistic set of criteria for what made them work well. He was working against the paradigm of rigid strategic planning and financial focus. This theme would be picked up again ten years later by Kaplan and Norton.

Working with Waterman and Julien Phillips, they synthesised his findings into seven mutually interacting areas of business focus that need to be addressed and co-ordinated.

McKinsey 7-S Framework
McKinsey 7-S Framework

We have written more fully about this framework in an earlier article.

In Search of Excellence

In Search of Excellence evolved from unstructured research into a two-day, 700-slide seminar that Peters gave in Germany, to Siemens. Invited to do the same for PepsiCo, Peters was requested to trim down and focus his presentation. The result was eight key lessons he drew from his research.

These eight lessons were to become the core eight chapters of In Search of Excellence:

  1. A bias for action
    ‘Getting on with doing the job’. Rapid decision-making unhampered by bureaucracy. This has since morphed into the concept of ‘Agility’.
  2. Close to the customer
    Trying to serve each customer as an individual. This has since become business orthodoxy.
  3. Autonomy and entrepreneurship
    Each part of the business acts as an entrepreneurial centre, rather than as a part of a machine. This creates greater innovation. Now, of course, entrepreneurialism is part of the zeitgeist.
  4. Productivity through people
    Individual contributors are the source of quality. Peters and Waterman were fundamentally in the humanist management tradition.
  5. Hands-on, value-driven
    The 7-S framework started with shared vales. These need to guide everyday practice.
  6. Stick to the knitting
    Stay with the business that you know; your core competencies. Diversification carries big risks.
  7. Simple form, lean staff
    Some of the best companies have small headquarters and simple process. What company or public authority has escaped the ‘Lean’ revolution?
  8. Simultaneous loose-tight properties
    Centralised values, but autonomous operational choices combine the stability of a large organisation with the adaptability of a small one. Many start-ups are seeing the same challenge as they grow, from the opposite direction to Peters’ and Waterman’s large corporations.

After the Search

Both Peters and Waterman followed up the book with their own takes on what next and, in particular, addressing the shortcomings of their earlier research. But apart from one fascinating interview, I don’t think they have worked together since the two or three years of touring, following the release of their book.

That’s a shame. Two remarkable minds came together and, arguably, each did their best work in collaboration with the other.

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