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Julia Cupman this week discusses how to drive excellence in companies.

I am always intrigued by what people think drives excellence in companies.  The common thread in everything that we are asked to do in our search for market intelligence is to find the nuggets and insights that show how companies can improve – how they can beat the competition.

The search for excellence has attracted many authors and ex-McKinsey consultant, Tom Peters, has written widely on the subject.  In his book "In Search Of Excellence" (1982), Peters nominated GM (among others) as a model of distinction.  A lot has happened since then and as we know, foreign competition and a lack of focus, perhaps tinged with some arrogance, have seen many of the paradigms of excellence fall from grace.

In his original work, Peters suggested eight themes result in excellence:

  1. A bias for action, active decision making – ‘getting on with it’, for quick decision making and problem solving tends to avoid bureaucratic control.
  2. Closeness to the customer – learning from the people served by the business.
  3. Autonomy and entrepreneurship – fostering innovation and nurturing ‘champions’.
  4. Productivity through people- treating rank and file employees as a source of quality.
  5. Hands-on, value-driven – a management philosophy that guides everyday practice – management showing its commitment.
  6. Stick to the knitting – stay with the business that you know.
  7. Simple form, lean staff – some of the best companies have minimal HQ staff.
  8. Simultaneous loose-tight properties – autonomy in shop-floor activities plus centralized values.

Like all good business gurus, Peters has developed his thinking, and authored an article recently in the Financial Times (29th August 2011), adding four further "obsessions" which he believes drive excellence.

  1. Frontline managers – the equivalent of the sergeants in the army.  They are the foreman in the factory, the supervisor on the shop floor – the people who know an organization intimately and who are responsible for driving productivity.
  2. Cross functional excellence – the importance of different departments working together and not against each other.
  3. Strategic listening – the importance of listening.  Indeed listening to customers as well as to staff is so easy and yet so often companies plough on with their ear plugs in.
  4. Meetings – the need not for fewer nor for more meetings, but for more actionable meetings, i.e. meetings should be used as a platform for boosting enthusiasm and motivating action.

Understanding what drives excellence in business is the Holy Grail.  Market research is not carried out to provide an elegant description of markets.  Rather it is the strategic listening that Peters refers to.  It is about understanding and spotting meanings; in particular, the opportunities that can provide a comparative advantage or help avoid a disaster.

I would like to add a fifth theme that will drive excellence: an obsession with intelligence – knowing more than the competition and using this knowledge more effectively than the competition.

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