reading 6 tom peters on the real world

7/29/2019 Reading 6 Tom Peters on the Real World

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' Academy ol Management Pxe cufi ve, 20G2. Vol. IG, No 1

Tom Peters on the real worldof business^/nferview by W illiam C. Bognei

Executive OverviewTom Peters describes himself as a prince of disorder, champ ion of bold failures,maestro of zest, professional loudmouth (as a speaker he's "a spitter" . . . according tothe cartoon strip D ilhert), corporate cheerleader, lover of markets, capitalist pig . . . andcard-carrying m emher of the ACLU. The Economist tags him the Vher-guru. And hisunconventional views Jed Business Week to describe him as business 's "best friend andvrorst nightmare." Tom followed up on fhe success of In Search of Excellence with fourmore best-selling hardback hooks: A Passion for Excellence (1985, with Nancy Austin),Thriving on Chaos (1987), Liberation Management (1992), and The Circle of Innovation:You Can't Shrink Your Way to Greatness (1937). He has also authored hundreds of articlesfor various newspapers and popular and academic journals, including CaliforniaManagement Review, The Academy of Management Executive fthree times!), andHarvard Business Review.Tom is a graduate of Cornell (B.C.E., M.C.E.) and Stanford (M.B.A., Ph.D.). He served onactive duty in the U .S, Navy in Vietnam (as a Navy Seahee), was a senior White Housedrug-abuse advisor in 1973-74, and worked at McKinsey & Co. from 1974 to 1981, hecominga partner in 1977. He is currently the chairman and founder of a glohal training andconsulting compan y, Tom Peters Com pany (tompeterscompany). When Tom is not in anairplane, he spends his time in Vermont, where he and his wife Susan Sargent (and Maxand Ben) co-hahit a 1,500-acre working farm in Tinmou th . . . along with alpacas,chickens, goats, dogs (H umm er and Bosie and Wally . . . they all sleep on the bed), horses,barn cats, sheep, and geese.

Tom, I'd like to ask you first about the originalresponse to In Search of Excellence.^ I t generatedfar more attention when it came out than anyprior m anagem ent book. I gu es s part of theinitial question is, how much of that excitementcame because of the pent-up frustration with howsluggish U.S. competitiveness had become by thestart of the 1980s?I think it wa s 100%. As I think all of us rec all, in th eearly '80s we were getting our pants beaten off bythe Japanese. First i t was shipbuilding, part ial lyby the Koreans, then it was steel, then it was cars,and then i t was semiconductors.I was close friends and colleagues with Bill Ou-chi and Tony Athos and Richard Pascale, and theArt of Japanese Man agemen t^ and Theory Z^ hadcome out. Initially, Bob Waterman and I were to-

tal ly i rr i tated that our col leagues had come oufirst. In retrospect, it was the best thing that evehappened to us , because those two books wervery popular. By the time of In Search of Excellence, not only wa s Amer ican ma nage me nt get t ingpoun ded, but in a xenophob ic way, I think m ana gers were t i red of everybody bat tering them an dsaying that the only people who knew how to f indthe difference between their left hand and their ight were the Japanese. There was absolutelyutterly, nothing posi t ive wri t ten about Americanma nag em ent. I do want to say, an d real ly go on threcord, that th ere is not a doubt in my mind tha t threal progenitor of this taking a new look at management was the famous Bob Hayes and Bil l Abernathy piece in the Harvard Business Review"Managing Our Way to Economic Decline." '*


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2002 Peters 41

Tom Peters

One of the things you start off mentioning veryearly in In Search of Excellence is your eightbasics; you call them, repeatedly, "motherhoods."You say maybe these are trite and everyone saysthey know them, but to some extent, topmanagers weren't walking the talk back then.Was this a threat to them?Well, yes an d no. Let 's look at Mr. Drucker a nd let 'slook at Mr. Abernathy and let 's look at the HarvardBusiness School dogma; i t was very arguably theright do gm a for 1942 thro ug h 1957. My old BusinessWeek friend John Byrne wrote a marvelous bookabout six or seven yea rs ago cal led The W hiz Kids,^and it focused on Bob McNamara and Tex Thorn-ton. So al l of this hyper-analyt ic, budget-driven.Bob Anthony, McNamara stuff was done exactlyappropriately at the t ime. Then suddenly we'reget t ing the crap bea ten out of us, and I think ratherthan say that what we were doing was threaten-ing, I would say m an ag ers were befuddled. By themid-'60s or early '70s, the Europeans were scared todeath that the American way was going to takeover, and American managers bel ieved, essen-tially, that they were infallible. Then effectively, it

turned out that the emperor certainly wasn't nakedbut was wear ing a lot less clothes than had beenimag ined .So you ha d Corporate Cultures,^ you had TheoryZ, you had the Art of Japanese Mana gement, thenyou had In Search of Excellence, then a lmostwithin spitting distance of that you had Lee Iacoc-ca's book'^ and this incredible phenomenon, whichwa s the CEO as hero. Because if you go back ag ainto the '70s, I think of the difference between JackWelch on the one hand and his predecessor RegJones on the other this way: Reg was as gray asJack and Lee Iacocca are Technicolor. But it fit thet imes; again, no argument . Those were the Jones-era stuff, CEOs were bland, CEOs were unknown,and probably the average person on the streetcouldn't have n am ed their own CEO, let alone a halfdozen CEOs. There were no Sumner Redstones, noTed Turners, no Steve Cases, no Bill Gateses, noAndy Groves, let alone no Jack Welches.

W ell, I think that lack W elch an d Reg Jones aretwo of the best examples that we still use todayin contrasting CEO styles of management.My only point is that I would give them both Agrades .If we look back over those eight basics that youset out 20 years ago, did you anticipate thebreadth with which some of them would beembraced? Was the high level of response tosome of these admonitions expected?No, none oi it was expected. It was utterly unex-pected. You know, I 've often made the commentthat I think the first prin ting of the book w as either5,000 or 10,000 copies, and Waterman and I thoughtthat was opt imist ic.A few of the firms. Caterpillar, Kmart, GM andIBM, that you looked at had some tough times.How much of that difficulty was due to theirfailure to stick with these basic principles, andhow much was it simply the speed and scope ofenvironmental change that they had to face?Well, I think the answ er is , to take your two terms,failure to cope a nd spe ed of cha ng e, it 's A multi-plie d by B. You know, first of all, even tho ug h I'vesaid versions of this, in the hot book du jour, theClayton Christiansen book,^ Clayton at one pointearly on says the number-one problem that compa-nies have is good management. That is, with goodmanagement you look too hard at your current cus-tomers, you look too hard at your current model em-


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42 Academy of Management Executive Februaryployees and so on, and these folks got stuck withtheir press clippings to some extent, number one.Then the world changed on them to a degree.

The comment I've always made in my seminars,particularly, for example, if I have people from AT&Tor GM, is I say to them, and this is meant from theheart, "I am astonished." I've said to them, "I'm pes-simistic about big company change, A. I'm aston-ished at how much you've changed since 1985, B. AndC, given the environmental change, I'm astonishedat how little good it's done you relatively. That is,you've changed three times faster than I would haveimagined. The problem is, the environment hascha nge d five times faster. So even thoug h you're a lotmore agi le and a lot more effective and a lot morequality conscious and a lot more people orientedthan you were 15 years ago, we're confronted with aworld of Dells and Oracles and people who are re-ally redefining the business paradigm in a way thatI don't think anybody, including Drucker or Toffler orother futurists, even came close to imagining."

When we look at some of those firms that cameback in the '90s, IBM, C aterp illar and the like,were people like Lou Gerstner really able to atleast do that three-fifths of the environmentalchange that you need?I think in some cases yes. Certainly there 's a bigdifference between a Cat and an IBM, b e c a u s eCaterpi l la r was not confronted with particularlyfast-moving competition. But in the case of an IBM,which was confronted with Gates and the Com-p a q s and the Dells and so on, I think that IBM isone of the most effect ive turnarounds, again giventhe context of their competition, that 's ever beenseen. On the other hand, with great kudos to Ger-stner, the reality is that IBM today is a damn goodcompany, but they aren't setting the a g e n d a theway they were when we wrote about them in 1982.If you were to at tend a serious computer confer-ence or something l ike that , the conversat ion fo-cuses on the AOL Time W arners and it focuses onthe Oracles and it focuses on the Microsofts, andw e all acknowledge tha t IBM is an importantplayer , but the world is not s tea l ing Lou Gers tner ' sg a r b a g e to try to find his deepes t thoughts so tha tthey can predict what 's going to happen next .At the time In Search of Excellence came out, theother really popular book read and used in busi-ness schools was Michael Porter's book,^ and thatreally emphasized positioning the firm, position-in g the business within the industry. Now we'vesort of gone away irom that to an emphasis onbuilding resources that can be flexible.

Yes, Gary Hamel got the shift, Mike didn't. In away, Mike was like the Japanese ; he was the lastvest ige of the strategic-posi t ioning, plan-your-way-to-success environment . Exact ly as you saynow you've got Gary Hamel ta lk ing about the creation of latent corporate resources, which can respond to any damn thing tha t happens . It's alsobeen kind of amus ing , as the coauthor of In Searchof Excellence, to watch his migrat ion. Rememberalso that in In Search of Excellence we had thatlittle two-liner that said soft is hard, hard is softan d the strategy stuff is not as hard as it looks andthe people stuff and the entrepreneurial spirit stuffis the real hard stuff. Now you've got Hamel lead-in g off his current act ivi t ies by saying, "Create acause , not a business,""^ which for God's sakes iswhen I put on my sn ide ag ing old m a n ' s hat, whatwe said 20 yea r s ago. But the world wasn't qui teready for it, and we are saying things more clev-erly now than then.

The strategy stuff is not as hard as itlooks and the people stuff and theentrepreneurial spirit stuff is the realhard stuff.If we look from In Search of Excellence toLiberation Management,^* you continue to putnew dimensions or new elements into yourprescription. When I read LiberationManagement, the two things that come out big inthat book are the use of networks and the use ofknowledge management.Yes, and I had so much fun with that knowledgem a n a g e m e n t stuff, because nobody was t a lk ingabout that at the t ime.

As you move more towards discussing cultureand people, the question arises for themultinational or transnational company as tohow transferable these principles are to othernational cultures.I 've a lways been of two minds , and they are thefol lowing: If you are not ext remely sens i t ive tonat ional cul tura l d i f ferences , you shou ldn ' t bea l l owed out onto the management f i e l d . Hav ingsaid tha t , to a s igni f icant degree people are people . Let me tell you a funny litt le story. In Searchof Excellence c a m e out in '82. We got t oge thewith a t r a i n ing company t ha t ' s now been bough17 t imes and so on, cal led Zanger Mil ler . JackZ anger had b e e n the HR v ice p r e s iden t at Syntex


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2002 Pefers 43

and then s tar ted hi s own t ra ining company. Hewanted t o do a t r a i n ing p rogram based on InSearch of Excellence. But they were very interna-t ional , and so th i s program, which was ca l ledTowards Excel lence , was peddled a l l over he l land gone . We go t t he mos t amus ing r e sponsesthat I can ever reme mb er . We had Sau di A i r l inessay, "We love this program. I t 's the f i rst programba se d on the pr inc iple s of I s lam." Then w e sold itto some big company in India , who sa id i t wasthe f i rst Hindu program. Then we sold i t to some-body in the Phi l ippines who sa id i t was based onthe pr inc iples of Cathol ic i sm . I go ov erse as andI 'm s cared to death , be ca us e I say I 'm an Amer-ican for God 's s ake s . I t a lk about ba seb al l . I t a lkabout footbal l . My only signif icant t ime out of thecountry was spent in Vietnam, in the company ofAmer icans , so tha t doesn ' t exact ly count .And then I talk abou t this stuff an d peo ple iden-tify with it.

I 'd love to teach a course on the cul tural stuff,just because I 'm confused myself. You knowthere 's a book ca l led Riding the Waves of Cul-(ure , '^ by tha t Dutch consul tant Trompenaars . Ilove i t , I love i t . Even though on about page tenhe say s , "If you wan t to un de rs ta nd in tern at ion albusiness, the f i rst thing to do is to make sure younever read a word of Tom Peters or Peter Drucker,"which I loved. I 've met him and we've laughed hardabout it.

"If you want to understand internationalbusiness, the first thing to do is to makesure you never read a word of Tom Petersor Peter Drucker."

You wrote an article for the CaliforniaManagement Review^^ on your Stanford teachingexperiences that Henry Mintzberg put in histextbook about ten years ago, where youcommented on how you would get a responsesuch as, "Tom Peters teaches these reallyinteresting soft things. They're reallyenter taining, but I don't think th ose a re the too lsI'm really going to be using."Right, and incidentally, relative to this whole dis-cussion, and I 've said it in several places, I go onrecord as saying that Henry Mintzberg's Rise andFall of Strategic Planning^'^ ranks as my number-one b us ine ss book of the last fifteen ye ars . Ithought it was a brilliant piece of work.

That's an interesting observation, because asacademics would say, he writes very differentlyfrom an academic, in that he uses so much morenarrative in his presentation.Yes. One other thing is intriguing to me, which isback to the point of In Search of Excellence and soon. I ha d a good friend y ear s ago at Stanford, a ndhe said to me, "One of the most amusing things isthat when our 25-year-olds and 26-year-olds aregoing throu gh the MBA prog ram , they all love thecourses in f inance and decision science. Thenwhen they come back for an executive program at35, al l they wan t is OB, be ca us e their whole da m nlife is taken up with people problems." I thinkthat 's a bi t of an exaggerat ion, but there 's also asignificant grain of truth to that statement.

Is the search still on? Are we still searching forthe ultimate prescription, or is it a constantlychanging prescription that requires newperspectives like those in LiijerafionManagement?Well, I wou ld ho pe to God w e're not hun ting for theone best w ay any more. I would ho pe that Freder-ick Taylor has had the final spike nailed into histomb and we're l iving with quantum mechanicsinstea d of Newtonian physics, and hopefully we'reliving with something a litt le closer to that in theworld of enterprise as well.Many th ings have changed and many th ingswere done anything but perfect ly in In Search ofExcellence. But my favorite on the list is the onethat was number one, which is "a bias for action."That wa s a serious s lap in the face to the strateg icpla nn ers in 1982. And in the big com pa nie s today itremains damn near as much of a problem as i t wasin 1982. But in a world w he re you r eall y don 't kn owwhat the dimensions of the playing f ield are,you've got to try something and see what the heckhappens, and that 's a lot of what 's gone on, albei twith many business fai lures involved as well . Butin the Austins and in the Atlantas and in the Sili-con Valleys and the Seat t les and the Phoenixesand the Fort Lau derda les, I m ean the whole thingis fascinating. It's a different set of cities that areredefining the world. You know Atlanta, Fort Lau-derd ale. Phoenix, San Jose, and Aust in an d Seat t leare now telling New York, Chicago, etc. , where togo and how to go there.

My view is very straightforward and that is: Thebook was pretty good, but without any question itis a cultural icon in the world of the way businessand bus iness educat ion thought about itself. In thesense of us being worthy or the research being


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44 Academy of Managem ent Executive Februaryworthy, i t was a clear punctuat ion mark, and theworld was kind of never the same. Most of thecitations from In Search of Excellence are fromthe f i rst three pages and the last three pages. Soyou can't exactly kid yourself into believing thateverybody memorized the book. But it had to sit onpeople's desks for a couple ol years, and it was asymbol of a pretty fresh re-look at managementthat probably, if i t hadn't been us, i t would havebeen somebody else. Again, i t s tar ted with broth-ers Hayes and Abernathy, this real ly serious re-look, which co ntinues to this day. I think m ana ge-ment dogma is far from settled at this stage of theg a m e .

The hot topic right now is change management,the actual creation of dynamics in theorganization.Yes. Well, I'm ev en told that th at 's 50% of the b usi-ness at my old employer, McKinsey. It was verymuch the tai l that had been docked at the time thatWaterman and I started our thing. Now it 's half oiwhat the heck they do.I think, though, for people who do work inchange management and the l ike , th i s i s comingfrom the soft are as , the OB an d the org aniz ation aldynamics areas. Those had always been sort of thelaggards in terms of prest ige and salary andthe l ike in both the business schools and what thestudents perceived as being important . Now thatdefini tely is changing.

If I were czar, there's a half of me that says Iwould never al low kids into a busin ess school unt ilthey were at leas t 30 ye ars of ag e an d u ntil they'vebeen beaten and bat tered by the real world ofdeal ing with change. Because again, there 's toomuch oi a tendency that the 24-year-old who is justcoming out with a couple of years ' seaso nin g fromthe pr i s tine underg radu ate envi ronment i s p layingwith wond erful stuffbut it 's theory . If the re 's onething that 's damn sure, i t 's that the real world of

business, part icularly in today's environment , isn ' tabout theory.// there's one thing that's damn sure, it'sthat the real world of business,particularly in today's environm ent, isn'tabout theory.Endnotes

' Peters, T., & W aterm an, R. 1982. In sea rch of exce llenceLessons from A merica's best-run c omp anies. New York: Harper& Row.^ Richard, P., & Anthony, A. 1981. The art of Ja pa nes e ma nagement. New York: Warner Books.^ Ouchi, W. 1981. Theory Z: How American business can meethe Japanese challenge. New York: Addison-Wesley.''Ha yes , R., & Aber nathy, W. 1980. M ana ging our wa y to

economic decline. Harvard Business fleview, 58(4): 67-77.^ Byrne, J. 1993. The w hiz kids: The foun ding fath ers of Am erican businessAnd the legacy they left us. New York: Double-day.^D eal, T., & Kennedy, A. 1984. Corp orate culture s: The ritesand rituals ol corporate life. New York: Addison Wesley Long-man, Inc.'Ia co cc a, L. (with W. Novak). 1984. Iacocca: An auto biog ra-phy. New York: Bantam.^ Christensen , C. 1997. The innovator's dilem ma: W hen newtechnologies ca use g reat iirms to fail. Boston: Harvard BusinessSchool Publishing.^ Porter, M. 1980. Com petitive strate gy. New York: Free Pre ss'" Ham el, G. 2000. Leading the rev olution. Boston: Har vard

Business School Press." Peters, T. 1992. Liberation m ana gem ent : Necess ary disor-ganization for the nanosecond nineties. New York: Alfred AKnopf.' Tro mp ena ars, F., & Ham pden-T urner, C. 1998. Riding thewaves ol culture: Understanding diversity in global business2nd ed. New York: McGraw-Hill.' Peters, T. i984. Strate gy follows s tructur e: Develop ing dis -tinctive skills. Cahfornia Management Beview, 26(3): 114-128.'' ' Mintzberg, H. 1993. The rise a nd fall of strat egic pla nni ng:Reconceiving roles ior planning, plans, planners. New York:Free Press.About the AuthorWilliam C. Bogner is Retrospectives Editor of The Executive.


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reading 6 tom peters on the real world

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