I had to read this for class. Peters and Waterman have some good concepts, but the writing is anything but "exuberant and absorbing", as the WSJ claims. Published in 1982, this book deserves a second edition with contemporary subjects of study—Apple would be a huge get—and analysis of why formerly excellent companies discussed in the first edition (HP, IBM, Exxon, Delta) are no longer that way but why Boeing and UTC still are, and why Lockheed and GE have reversed fortune. It would validate or repudiate the principles, and it would also show that those principles are timeless (or not).

The first few chapters of the book didn’t age well, most of the “findings” are now obvious business best practices. I’m sure it was insightful when published, but since the 80s widely recognized leadership principles have evolved. However, the second half of the book is more interesting, especially the stories and examples.

Read this during my MBA days.

I'm going to quote from another book (Standard Deviations by Gary Smith) which I highly recommend and which might provide some perspective here

"McKinsey, one of the world’s top consulting firms, asked two obscure consultants, Tom Peters and Robert Waterman, to take a look at several successful companies. Peters and Waterman talked to other McKinsey consultants and came up with a list of forty-three companies with good reputations and strong financials. They then talked to managers and read magazine stories, looking for common themes. This rather casual study was the basis for their wildly influential and successful book, In Search of Excellence, which identified eight common factors that Peters and Waterman found in these forty-three excellent companies—for example, a bias for action and being close to the consumer.
This, was a backward-looking study. There is no way of knowing whether companies with a “bias for action,” whatever that means, were more successful than other companies, or whether companies that had been excellent in the past would be excellent in the future.

Thirty-five of these forty-three companies have publicly traded stock. Since the book was published, fifteen have done better than the overall stock market, twenty worse. Collins, Peters, and Waterman do not provide any evidence that the characteristics they describe were responsible for these companies’ past success. To do that, they would have had to provide a theoretical justification for these characteristics. There is inherent survivor bias. If we think we know any secrets for success, a valid way to test our theory would be to identify businesses or people with these traits and see how they do over the next ten or twenty or fifty years. Otherwise, we are just staring at the past instead of predicting the future."

**************End verbatim from Standard deviations**********

Another way to put this - You can't look at just a bunch of successful companies and identify commonalities. You'll see pattern even in random number tables.

You need to say "Does this hypothesis hold good" i.e instead of selecting successful companies and looking at what is common between them, look at a larger list including unsuccessful companies and see if those factors of success exist there as well. If they exist there, then maybe , those factors don't make that much of a difference after all. That is what tells you how good or bad your model is.

The art of American business management with eight lessons from the bet-run companies.

It's incredible how many (all?) of the concepts in this book are still applicable today (although the companies mentioned are no longer amongst the top). Highly recommended but only after some hands-on entrepreneurship/exec/management experience and reading a few other "bibles" from the business books library.

What this book is about?
This a very famous book, it is also old, written almost 40 years ago. In the 80’s and 90’s it was hot. However coming now to 2019, many have forgotten it, some refute its findings and most will never have the patience to read the long winded writers, their innumerable examples, arguments and theories. The english is modern and the flow is easy , reads like a good novel. For those of you who will probably not read it but would like to know what it is about let me put this book in a five minute read context.

The two writers were management consultants working for Mckenzie, the international consulting firm. They were given ‘infinite budget’ to study various publicly listed American companies all around the world that were successful in terms of :
Compound asset growth from 1961 through 1980
Compound equity growth from 1961 through 1980
Average ratio of market value to book value from 1961 through 1980
Average return on total capital from 1961 through 1980
Average return on equity from 1961 through 1980
Average return on sales from 1961 through 1980

Some the companies they investigated and their respective industries are:
HP, Intel - High technology companies
Procter and Gamble : consumer goods companies
3M: General industrial goods
Mc Donalds: service companies
Exxon: resource based companies

Before this book the Americans were facing two major management framework problem, you may call it:
Japanese management was far better than american management because companies like Toyota basically sweeped big players like GM off their feet

Then at the same time the 7S model of management was trying the fill the gaps of the old principle of management: Planning, organizing, leading, staffing and controlling.


So after the writers completed their research of the top 62 companies that met the criteria of being in the top percentile of the above indicators, they first came up with 700 slides of insights, then they distilled into 22 attributes. But they did not fit in the 7S model. Instead their findings of the best practices of executives at the various companies fell into three dimensions:
People
Customers
Action

Based on this finding, they went back to the drawing board and devised the 8 Attributes that we now know as the essence of this books:

A bias for action, active decision making - 'getting on with it'.
Close to the customer - learning from the people served by the business.
Autonomy and entrepreneurship - fostering innovation and nurturing 'champions'.
Productivity through people - treating rank and file employees as a source of quality.
Hands-on, value-driven - management philosophy that guides everyday practice - management showing its commitment.
Stick to the knitting - stay with the business that you know.
Simple form, lean staff - some of the best companies have minimal HQ staff.
Simultaneous loose-tight properties - autonomy in shop-floor activities plus centralised values.

In 2001 the writers were asked in an interview, if they still stood by their 8 attributes after 20 years. They said “yes” but we would add one more attribute:

9. Capabilities concerning ideas, liberation, and speed.

How is it useful to you in your :
Life-
x

Business-
x

Career-
The 400 pages are filled with as mentioned earlier innumerable examples of practices by executives in the top organizations. These example help us the internalize each attribute by giving us parallels to draw when we face similar decisions to make in our organizations. For example,
The writers explains the practice of MBWA (Management By Walking Around) in HP helps in the 1st attribute of “bias for action”.
So if you are a new executive and are wondering whether it is better to sit at your office the whole day or spend the day in another way, this attribute clearly states that if you want your organization to succeed you must have a bias for action and that can be gotten by MBWA.

In another example, if you are new executive again and you are wondering what attitude to instill in your sales team, the writers give the example of IBM CEO, who told his sales force , “act as if you are in the pay roll of the customer” . so simple. So may be you can adapt such a philosphy because companies that don’t just pay lip service to cusotmer service and are really “close to the customer” in form of ingrained values like the above, succeed.

Great business book that explains what the greats do!

Such difficult read... Admittedly I cannot understand the book, except for the 8 principles of an excellent company.
Three main takeaways: Excellent companies have these things in common:
1. Sticking with their customers is a consistent habit of top companies.
2. The best businesses genuinely care about their employees.
3. Innovation and other values are the fuel for successful companies.

The fact that this book is being used in business teaching means there would be some nuances which in this first read I cannot understand. I think I can only get this book when I get to management level or business owner level. Up until then!

Also recommend by Peter Lynch in his book Learn to Earn

As a management consultant, I understood this book to be a must read yet it took everything that I have to finish reading it! The book is full of clever references and practical ideas. It is also incredibly dry, dated and not an enjoyable read. I believe that I am now a little bit smarter for having persevered all the way until the end but I did not have a good time in the process.

I liked it.

Would have had 5 stars had this been 1990.