In 1977 two consultants, Tom Peters and Robert Waterman carried out a research project while working for McKinsy, a global management consulting firm. Economic times were changing and to study the challenges that competitive countries like Japan presented to the US, both consultants embarked on a global journey. They researched 43 out of 62 top performing companies in Fortune 500’s list to identify the basis of their success. The outcome of their study was the book “In search of Excellence,” published in 1982 and selling more than five million copies worldwide.

The duo used McKinsey’s 7-S framework which listed non hierarchical factors like business systems, staff, structure, style, strategy, skills and shared values as contributors to the effectiveness of an organization. Through interviews and in depth studies, the book concluded that the following eight themes underlined the way successful companies were run: 

A bias for action

According to the authors, the American business attitudes and habits are difficult to break making it difficult to adapt to changing market conditions. Many managers have an over-analytical and formal approach that is overridden by bureaucracy and lack understanding of the real world. Bias for action in successful companies allowed experimentation, simplified complex business structures and encouraged adaptation to changing conditions so that innovation can occur. 

Close to the customer

The importance of being close to their customers was a highly important business policy for successful companies. They showed this closeness by providing tailored products and services for their customers and treated their feedback as vital for business success. There was regular monitoring of feedback received with focused sales training and customer interaction being part and parcel of their business policies. 

Autonomy and Entrepreneurship

Successful companies gave their employees autonomy in the decision making process and allowed them the freedom to make mistakes and try again. Having smaller units made communication and exchange of ideas easier and the onus was on being competitive and remaining individual as this encouraged innovation within an organization. 

Productivity through people

They noted that a positive company environment where employees were treated with respect, shared in the rewards and felt they were part of the company like an extended family reflected in its success as they were more productive. 

Hands on, value driven

The authors placed the involvement of management in all aspects of the organization as a key contributory factor to its success. Communicating company values into their employees and leading by example were other values of successfully run companies. 

Stick to the knitting

Specializing or conducting business in areas in which the business is most knowledgeable contributed more to its success than branching out into something riskier or unfamiliar. 

Simple form, lean staff

Keeping away from complexity by having fewer administrative layers made it easier for employees to understand what was required of them and how to implement it.

Simultaneous loose-tight properties

Successful companies allowed their employees the freedom to make decisions while working around and maintaining core company values. 

In search of excellence was an eye opener for many companies that believed that they key to their success lay in a rigid, top heavy bureaucratic business systems. Focusing on the “soft” factors like the people who make up a company and the importance of its values and culture to bring about innovation is also very relevant especially in modern times. Global organizations might face differing scenarios when rigidity or bureaucratic procedures can sometimes not be bypassed. However, giving their employees the autonomy to grow within a company, concentrating on customer satisfaction and belief in company products and services will definitely put any company on the road to excellence.