Before I launch into my problem with In Search Of Excellence (Harper Collins, 1982) by Tom Peters and Robert Waterman, I want to state up-front why it’s awesome. It’s refreshingly free of a priori assertions common to so many other business writings. Instead of pumping up their academic credentials and telling us how they thought the business world ought to operate, Peters and Waterman went out to organizations that were actually successful, and asked them to what they attributed that success. Distilling the results into eight characteristics of successful companies,
- a bias for action,
- staying close to the customer,
- autonomy and entrepreneurship,
- productivity through people,
- hands-on, value-driven,
- stick to the knitting,
- simple form, lean staff,
- simultaneous loose-tight properties,
…the book relays what has already been observed to work. Up to the time of its publishing, In Search of Excellence’s predecessors as the must-read books in business schools everywhere were written by Peter Drucker, whose writings had a far more top-down, way-it-ought-to-be tone. By taking a scientific approach to the business world, Peters and Waterman not only reset the conditions by which organizations were considered successful, they redefined what constituted successful writing about the management sciences.
“So, Michael” I can hear GTIM Nation say, “for a book that you admire, a massive best-seller, a virtual must-have for anyone with the word ‘manager’ in their title, what on Earth can you have against it?” The same thing that afflicts so many other business theories, books, articles, or paper presentations: it does not appear to have a limiting factor.
Back when I was writing The Variance Threshold column for PM Network, I once made a snarky comment that, to fully embrace Peters’ and Waterman’s theories, the business owner should give away all of the company’s assets to the next person who presents themselves as a “customer.” I’m in total agreement with the notion that successful organizations need an intense focus on fulfilling the customers’ wants and needs – I’m just wary of the fact that there does not appear to be a limiting factor. Retailers, for example, are infamous for operating under the axiom “the customer is always right.” And yet, even here they will (usually) not accept for refund or exchange a product they sold that has clearly been abused to the point of breakage. Obviously some level of limiting factors are in play, even if they’re not actually codified into some sort of procedure.
The absence of limiting factors is another reason why I pay the risk managers (no initial caps) no mind. In the March 2008 edition of PM Network, I engaged in a point/counterpoint discussion with Dave Hillson on a variety of risk management (NIC) topics, particularly whether or not it also encompassed “opportunity management” (whatever that is). After a segment where David discussed his usage or definitions of three different terms, I noted:
David, you redefined risk as uncertainty that matters. If the PMI Risk Specific Interest Group or special experts such as yourself have that latitude to redefine those terms in that fashion, then essentially, there's no aspect of project management that could be fairly said to lie outside the purview of risk management.[i]
Essentially, if the experts can’t tell you what something isn’t, then they really can’t tell you what it is.
The same is true of the Asset Managers’ favorite maxim, that the point of all management is to maximize shareholder wealth. If that were the case, then there would be no aspect of management – particularly and especially Project Management – that was outside of their scope, and that’s simply not the case. Nor is it true in the realm of Strategic Management, which seeks to maximize, not shareholder wealth, but market share. Since things like competitor buy-outs definitely help increase market share while hitting the profit-and-loss statement pretty hard, it’s fairly clear to me that the realm of Strategic Management provides a rather distinct limiting factor to the efficacy of at least one of the Asset Managers’ tropes.
Which brings us back to Peters and Waterman. Their message was sorely needed at a time when the Asset Managers’ rules permeated the business world, when PMI® was gaining a truly global standing by establishing a management model based on the customers’ expectations of Scope, Cost, and Schedule. An enhanced focus on the customer is excellent, but to have its desired effect the axiom “Quality – Availability – Affordability: pick any two” must inform the business model. Otherwise, it’s impossible to know at what point the limiting factor has been reached.
And you just might end up crashing the organization in the name of staying close to the customer.
[i] Hatfield, M. & Hillson, D. (2008). Danger ahead?: Some project managers contend there's a silver lining in risk management; others say it's called opportunity. PM Network, 22(3), 76–80.