Introduction
Everybody wants to be the author of a popular management tool. But at the end of the day, it’s useful to realize that many have a lot in common – what makes the difference, as with any tool – is the skill of the person using it and the consistency with which you stick with it.
For some time now, I’ve enjoyed regular conversations and spirited exchanges between a group of thought leaders convened by Steve Denning and named, by him, as the “Fortnight Group.” Among them is Bain & Co’s own Darrell Rigby, who for many years was a co-author on Bain’s regular surveys on how executives use management tools. It’s fascinating to see tools come and go, which they do, a lot. Four have remained in the ranking since Bain first started collecting information on tool usage in 1993. These are Mission and Vision statements, customer satisfaction, total quality management and benchmarking. Others proved far less durable – I mean, who talks much about quality circles these days?
Everybody wants to claim center stage for their tool
Waterman and Peters’ book In Search of Excellence: Lessons from America’s Best Run Companies was published in 1982 and became a runaway best seller. It brought the whole consumption of management tools to a broad audience and perhaps singlehandedly created the category of the mass market business book. It also maintained that strategy was perhaps less important than organization for long-term performance. Given that Waterman and Peters were both consultants at McKinsey, a firm whose bread and butter depended on firms handing over large sums for strategy advice, this might not have been the most politically astute position to take…Peters didn’t last long at the firm after taking this position.
So what were the magical practices that characterize the best-run companies?
The authors found 8 that they argue make all the difference.
A bias for action
a preference for doing something - anything - rather than sending a question through cycles and cycles of analyses and committee reports.
2 learning customers' preferences and catering to them. Staying close to the customer 3
Autonomy and entrepreneurship
breaking the corporation into small companies and encouraging them to think independently and competitively.
Productivity through people
creating in all employees the awareness that their best efforts are essential and that they will share in the rewards of the company's success.
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Hands-on, value driven
insisting that executives keep in touch with the firm's essential business.
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remaining with the business; "The company knows best." Stick to the knitting
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So what were the magical practices that characterize the best-run companies?
The authors found 8 that they argue make all the difference.
few administrative layers, few people at the upper levels. Simple form, lean staff
Simultaneous loose–tight properties
fostering a climate where there is dedication to central values of the company combined with tolerance for all employees who accept these values
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Some tools do have a lasting impact
That being said, some tools have become so widely used and embedded in how we manage organizations that we forget that at one point they were brand-new ideas. Melinda Merino, my editor at HBR, noted that we’ve been experiencing a broad evolution, including ideas such as thinking about ecosystems and two-sided markets, the role of purpose, funnels and flywheels, growth mindset, the importance of diversity, the importance of learning, distinguishing between intelligent failures and other kinds and so on. I would even argue that we have the scaffolding of understanding of what’s necessary for ongoing innovation, which would be a lot easier to access if we eliminated some of the dysfunctional incentive systems that lead people to avoid or ignore it.
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