In Search of Excellence

Peters and Waterman identify the eight virtues of excellent corporations:

1. A bias for action, active decision making - 'getting on with it'.
2. Close 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 - 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 centralised values.

Many of these are now considered conventional wisdom. IBM, the company I work for, demonstrated its understanding of the eighth principle when it renewed its values through an online jam session several years back. It recognized that it was impossible to manage an organization of 400,000 employees through command and control. It was more effective to appeal to the deep seated values its employees actually believed in. At the end of the exercise, the new set of values were not really new, but were more like an updated version of the original set of values, but it was clear they were the shared values of IBMers.

On 16 June, IBM will celebrate its centennial and I have no doubt its ability to demonstrate simultaneous loose-tight properties through management by values was critical in its ability to last for a century.