Thomas J. Peters ON POLITICAL BOOKS
Peters, Thomas J.
Thomas J Peters ON POLITICAL BOOKS Two recent works that have received scant attention shed new light on the deep-seated problems of America’s economic performance. The first is a study...
...The authors conclude, “Winners almost always compete by delivering a product that supplies superior value to customers, rather than one which costs less...
...On the list of 45 top growth companies analyzed in ABC’s study are AT...
...98 percent had a very small or no ‘government relations staff...
...How have the schools responded...
...The part of me that was new...
...Henry’s book is a superb insider’s view of the school and a damning analysis of the tone and content of training at the world’s premier provider of corporate leadership...
...They demolish the assumption that high growth is necessarily correlated with high technology...
...From America’s leading business schools, and at the head of the list, of course, is Harvard...
...The strength of these companies is most clearly reflected in two key, and again unconventional, business strategies...
...Virtually all report spending ‘considerably more’ on customer service support (e.g., technical services, repair ‘hotlines’) than their competitors...
...The authors note that the most “widely held theory posits that commercial success lies in mastering the ‘industry experience curve’ through economies of scale, doing the same thing cheaper and cheaper...
...As of 1978, 300 of the 1,500 top people at the Fortune 500 companies had passed through its halls...
...In the words of one chief executive officer, “I’ve got to know [my customer’s] business and problems at least as well as I know my own...
...Lenox (the china makers), and Dunkin’ Donuts...
...managements that stay in close touch with customers and suppliers, and, above all, treat every employee with dignity and respect...
...Now to the findings...
...Americans are not competing effectively in market after market, from low technology to high...
...As my own examinations continue, I, too, am increasingly struck by the high correlation between top per formance-regardless of company size or kind of industry-and quality, service, and customer courtesy...
...These companies also listen...
...Noting her failure to help a colleague who physically collapsed during an exam early in her first year, she writes, “The old part of me, preschool, would have gotten up, gone over to that troubled woman, helped her out of her seat, and taken her to a lounge to lie down...
...All of which raises an important question: Where have the so-called conventional management practices that have not served us very well of late come from...
...Even Fortune took a dim view of the game in a 1982 article addressing the dubious morality of student behavior...
...Around 31 percent of the stock in these 45 companies was employee-held, as compared to 4 percent for the Fortune 500 as a whole...
...Robots and microprocessors won’t save us, nor will new techniques of analysis...
...Says one executive: “In the last analysis, it is only by encouraging an entrepreneurial attitude that things happen...
...Fifty-one percent had a very small corporate planning staff...
...She notes time and again that business is dealt with only in ways that are “so mechanical, so detached, so absolutely unfeeling...
...Arguably, the faculty methods would have some justification if what was taught had merit...
...Fran Worden Henry’s new book, Toughing It Out at Harvard: The Making of a Woman MBA, which covers her years as a student at Harvard Business School from 1980 to 1982, suggests that the answer is ‘‘not very well...
...I’ve got to show him how much I can help him-not vice versa...
...One colleague is appalled when Henry hints that she may settle in western Massachusetts, and sternly warns, “But Massachusetts has one of the highest tax rates in the country...
...They have great visions of building institutions!’ Terms like “missionary zeal” are peppered throughout the report, all the more remarkable given the unswervingly conservative, understated bias of McKinsey & Company...
...40 percent had none at all...
...From 1976-1980 their employment rose 8.6 percent a year compared with 2.8 percent for companies on the Fortune 500 list...
...She especially derides the fabled week-long “business game” exercise where “profitability and market share are the only measures of success, ” and she describes the “midnight trips to other [teams’] trash cans to dig out computer output on their cost levels...
...All in all, the authors make a superb case for the importance of these companies in the country’s economy...
...If we don’t shut them down, at the very least a wholesale examination of their impact and a reexamination of the substance of their teaching is surely called for...
...The thoughtless bluntness thus inculcated has long been observed by those who deal with the Harvard product...
...innovation at all levels...
...Similarly, faculty and students alike are ill-prepared, she says, to deal with “the lives and feelings of workers...
...The authors’ second key finding is the companies’ willingness to fight bureaucracy and encourage continuous innovation...
...The leaders, say the authors, are unfailingly “persistent to the point of obsession” and are described as “builders, not bankers:’ willing, as several executives noted, to sacrifice the short term for the long term...
...From the exciting new success tales at Apple, Tandem, The Limited, Walmart, and People Express, to the continued saga of superior performance at IBM, P&G, Hewlett-Packard, Johnson & Johnson, and 3M, the story is the same...
...The men who run these companies, instead, are obsessed by their enterprises...
...Make it cheap” seems to be the corporate motto in much of America...
...She came away at least partially satisfied...
...Equally disturbing is a faculty hell bent upon intimidating students on the one hand and encouraging brutal competitive interchange on the other...
...in 1981 and 1982, as the rest of the economy shrunk, they grew...
...Sometimes this requires the willingness to sacrifice current profits for future ones...
...This is frighteningly illustrated in their crude and unseemly responses to a case built around the movie Harlan County USA, which deals with bitter and often violent labor disputes in Kentucky coal country: “We couldn’t put ‘them’ on an equal footing with ‘us...
...It is as if understanding what it was all about for a worker might weaken us, cause us pain, make us question...
...American Business Conference, Washington, D.C...
...The companies’ insistence on constant innovation and superior quality and service requires giving employees a stake in the enterprise...
...These are the companies of America’s future, but they are not all high-tech firms, as one might expect...
...They urge people to “try it, rather than analyze it to death!’ Staffs are tiny or nonexistent in the best mid-size companies...
...Glimpses of fellow students add to the bleakness of the assessment...
...Many observers of late, from Robert Reich (The New American Frontier) to Bill Abernathy, Kim Clark, and Alan Kantrow (Industrial Renaissance), Allan Sloan (Three Plus One Equals Billions: The Bendix-Martin Marietta War), and my colleague Bob Waterman and 1 (In Search of Excellence), have noted the culpability of the business schools, or at least business school thinking, in the current decline of American economic performance...
...These companies are excellent developers of people, and, in hard terms, employee ownership is very high...
...She finds people “at ease putting themselves first” in an environment where “rude behavior was more acceptable than anywhere I had ever been...
...100 percent had .a very small or no investor relations staff, and so on...
...In the accountant- and lawyerdominated boardrooms of the Fortune 500, cost containment is the holy grail...
...Bankers, she says, now treat her as an equal, and, “Beyond the pain, a whole new world is opening up for me...
...How much you have to pay is...
...I regretfully have begun to conclude that they are doing more harm than good ! no longer flippantly say, as I used to, “close their doors, ” because now I’m beginning to believe this idea may have serious merit...
...But at what a cost...
...The authors observe, “Successful executives are supposed to be cool, rational, professional managers...
...Quality, service, customer listening, intouch managers, continuous innovation-all people issues, pure and simple-are at the heart of that problem...
...What a contrast Henry’s analysis of heartlessness and job selection based upon taxrate considerations is to the ABC study finding that America’s most successful growth company chief executive officers explicitly put “visions of building .institutions ahead of mere creation of personal wealth...
...Cross (Cross pens, etc...
...Yet the clear focus of 43 of the 45 high-growth winners is on adding special value to their products through an emphasis on superior quality and customer service...
...She responds in part by commenting on the lovely setting, to which he rebuts: “Pretty is not the issue...
...The authors observed: “The importance of gearing an organization to ‘think like the customer’ and of the important personal identification of the chief executive officer with this value [was predominant...
...The first is a study released in June by the American Business Conference (ABC), a new lobby representing America’s long-neglected midsized growth companies...
...Henry, a successful entrepreneur engaged in helping small businesses, went to Harvard at age 32...
...But Henry repeatedly observes that the case method, almost solely justified because of its “real world” virtues, has little relation to reality...
...just let her take care of herself while I took care of me...
...These companies, whose revenues range from $25 million to $1 billion, represent 1 percent of the businesses in the United States but 19 percent of the jobs...
...They add, “This emphasis on product quality and customer service is clearly evident in the priority it receives from the men who run high-growth, mid-size companies...
...Seventy-five percent had a very small or no legal affairs staff...
...I’m heading for the South...
...The most important is that management practices in these top growth companies refute almost all conventional wisdom that’s accumulated in the past quarter-century...
...What’s Right with American Business...
...Thomas J. Peters, co-author with Robert H. Waterman of In Search of Excellence, is a management consultant in Palo Alto, California...
...The business schools are out of step with this evidence...
...And they show how management practices that are unconventional by today’s standards are the most successful...
...The study, which examined the companies’ management practices, was conducted for the ABC by McKinsey & Company, a respected management consulting firm...
...Where are our business schools now when we really need them...
Vol. 15 • October 1983 • No. 7
