At the beginning of 1984, In Search of Excellence, by Thomas Peters and Robert Waterman, was the best-selling book in America--56 weeks after it first broke onto the charts. Five years ago, if a book with this title had achieved similar renown, its subject doubtless would have been something like "personal growth." But the subtitle of Peters' and Waterman's book--Lessons from America's Best-Run Companies--reveals that its exhortations are not aimed at affecting our behavior as individuals, but at changing how we act collectively.
The phenomenon of In Search of Excellence--and that is precisely the correct word, with [over 5 million] copies now in print--is a heartening sign of how popular tastes have undergone a sea-change in recent years. "Entrepreneurship," a world that once instantly identified the utterer as an enthusiast of Ayn Rand, is now often bandied about whenever academicians, journalists, and even presidential candidates discuss the economy. In Search of Excellence is also a best-seller on college campuses. And if the public has been enthusiastic, many in the business community have taken to the book with the guilty zeal of converts at a revival meeting. A Ford Motor Company official recently told an assembly of executives, "We weren't on the list of excellent companies, and we didn't deserve to be. We intend to be five years from now." Charles Brown, the chief executive officer of AT&T, took his top executives on a two-day retreat to discuss the book. Donald Burr, whose fledgling People's Express airline wasn't profiled in the book but well could have been, called In Search of Excellence "the most significant book about economics since Adam Smith's The Wealth of Nations." Co-author Peters says that the reaction among corporate managers has "astonished him," adding, "there seems to be a real hunger out there to know more about how business works."
The country was also hungry for In Search of Excellence's specific message. The several years preceding the book's publication were marked by the worst recession in half a century. Where American corporations had once ruled the globe, now they were running scared--in their own markets, no less--from foreign competitors. Japan, once a synonym for cheap and shoddy merchandise, suddenly was being celebrated for its high-quality products and management "culture." The public was bombarded with stories about early-morning calisthenics at Mitsubishi and quality circles at Nissan Motors.
In Search of Excellence brought welcome balm for America's battered self-image. There was a better, wholly indigenous solution to declining productivity and industrial decline, and Peters' and Waterman's argument was put in terms that most people could immediately grasp. Rather than imitate Japan, Inc., American business would do better to imitate IBM and Maytag.
Peters and Waterman based their conclusions on an exhaustive, two-year study of about 75 "excellent companies," whose excellence they measured by the same yardsticks corporate managers hold so dear: profit and rates of return. These "excellent companies," they discovered, shared common characteristics. They showed a "bias for action," preferring experimentation (and the inevitable mistakes) to painstaking study. They were almost obsessed with giving customers good service and giving their employees responsibility and rewarding good performance. They had lean staffs. They consciously avoided the acquisition of unrelated businesses and "stuck to their knitting." They eschewed rigid organizational charts, long memos,
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