Revisiting the Classic: In Search of Excellence (1982)

Revisiting the Classic: In Search of Excellence (1982)

Dr. Pavan Soni 20/08/2020 3
Revisiting the Classic: In Search of Excellence (1982)

Published in 1982, 'In Search of Excellence', is arguably one of the first management books from a consulting house (McKinsey & Co.) that profoundly impacted the consulting and practice space alike.

The book outsold most other management books till the time Jim Collins hit the market with Built to Last, and Good to Great.

The book was written at a time when Americans were paranoid about Japanese industrial aggression, and obsessed by a rational model of decision making and management. The first few pages offer a healthy antidote to then prevalent overemphasis on quantitative methods, and its evils, including specialization, standardization, efficiency, productivity, and quantification. People orientation, the hallmark of Japanese management, was allegedly missing in mainstream corporate in 60s through 80s (as it seems). The authors build a case for why people, with their intrinsic motivation and values that leaders uphold, remains as the key asset to corporate excellence.

By today's standards, the book was written in a far more academic style, devoting a good 80 pages to 'literature review', much like a well written PhD thesis. The authors do a fantastic job in summarizing the works of Alfred Chandler (structure follows strategy), Elton Mayo (Hawthorne studies), Chester Barnard (functional of executive), Max Weber (bureaucracy- order by rule), Frederick Taylor (scientific management), Chris Argyris (learning organizations), Herbert Simon (bounded rationality), Karl Weick (loosely coupled systems), James March (garbage can model), Warren Bennis (leadership studies), and Henry Mintzberg (simple structures). Reading through this tightly knit narrative on development of organizational theories was a great refreshed, for it shows how to go about literature review and setup the context.

Based on a study of 62 American companies (mostly the clientele of McKinsey & Co.), of which 12 were studied in depth, the authors identify eight enduring practices of excellence companies- defined as 'continuously innovative big companies'. The eight practices, summarized in famous McKinsey 7-S Framework, read as follows:

  1. A bias for action
  2. Close to the customer
  3. Autonomy and entrepreneurship
  4. Productivity through people
  5. Hands-on, value driven
  6. Stick to the knitting
  7. Simple form, lean staff
  8. Simultaneous loose-tight properties
Revisiting the Classic: In Search of Excellence (1982)

My interest is in innovation, and I would like to present how relevant is the three plus decade old book to the current practice of innovation. My first impression is that the text is indeed very much readable, and offers compelling concepts and practices of how innovation is managed at large organizations. It is replete with practices from the likes of 3M, Boeing, Caterpillar, Dana Corporation, HP, IBM, Johnson & Johnson, McDonald's, and P&G -- organizations known for their innovation prowess.

Authors define innovative companies as 'especially adroit at continually responding to change in any sort of their environments' (p. 12). The defining feature of innovative companies, the authors lament, is the ability to manage ambiguity and paradox.

Some of the defining and counterintuitive features of innovative organizations are as follows:

  • Vast network of informal, open communication (Town Halls at Dana, personal contacts with employees at Emerson, )
  • Small and temporary teams (ten-person skunk works at Lockheed Martin; Bootlegging at GE)
  • A fluid, project-oriented environment (project teams at Honda)
  • Ad-hoc task forces (volunteer based projects at 3M)
  • Spirit of experimentation (birth of Post-it notes at 3M, Medal of Defiance at HP)
  • Customer (service) obsession (48-hours guaranteed parts serviced anywhere in the world at Caterpillar; or 99.5% service level at Frito-Lay)
  • Reliability (in products and services), by being late to the market (runners up make more money)
  • Dominating the niche (sticking to the knitting by 3M- adhesives and abrasives)
  • Better listening skills (customer, users, and employees)
  • Product champions (brand managed at P&G; executives champions at 3M, store managers at Dana, )
  • Autonomy far down the line (salesmen as problem-solvers at IBM)
  • Sub-optimal divisions (each successful idea becomes a division at 3M)
  • Internal competition (performance shootouts at IBM; sell it to the salesforce at HP)
  • Failure tolerance ("If I wasn't making mistakes, I wasn't making decisions"- General Johnson, founder of J&J)
  • Respect for the individuals (Management by Wandering Around at HP; Open-lab stock at HP; Hell Week at Dana)
  • Appropriate and inclusive language (Associates at Walmart, Crew Members at McDonald's, Cast Members at Disney)

These are some of the time-tested practices of highly innovative organizations, and widely doable too. You may also look at compilation of quotes from the book.

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  • Nick Baker

    Excellent book, thanks for sharing !

  • John Kent

    Very helpful

  • Scott Andrews

    Thanks again for another great article!!!

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Dr. Pavan Soni

Innovation Expert

Dr. Pavan is an Innovation Evangelist by profession and a teacher by passion. He is the founder of Inflexion Point, a strategy and innovation consulting. Apart from being an Adjunct Faculty at IIM Bangalore, Pavan has consulted with leading organizations on innovation and creativity, including 3M, Amazon, BCG, Deloitte, Flipkart, Honeywell, and Samsung, amongst others. Pavan was the only Indian to be shortlisted for the prestigious 'FT & McKinsey Bracken Bower Award for the Best Business Book of the Year 2016'. He has also been invited four times to speak at the TEDx. For his work on innovation, Pavan bagged the prestigious ‘On the Job Achiever’ Award at Lakshya in 2007 at NITIE Mumbai. Pavan works closely with CII, Bangalore Chamber of Industry and Commerce, European Business Group, FICCI, Karnataka Knowledge Commission, NHRD, and World Trade Centre, towards shaping their innovation activities. Pavan is a mentor for NSRCEL at IIM Bangalore, Founder Institute, Institute of Product Leadership, Brainstars, Budli, HackerEarth, and UpGrad, and is on advisory board for VC firm- Utilis Capital. Pavan is also a columnist at YourStory, Entrepreneur India, Inc 42, and People Matters. He is a Gold Medalist from MBM Engineering College Jodhpur, and did his PGDIE from NITIE Mumbai. Pavan finished his Doctoral Studies from IIM Bangalore in the domain of innovation management. More on his work is available at www.PavanSoni.com.

   

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