Presented by :

Allan 0004Pragun 0024Amit 0055

A Book Revie

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Searching for excellence

“People who have accomplished work worthwhile have had a very high sense of the way to do things. They have not been content with mediocrity. They have not confined themselves to the beaten tracks; they have never been satisfied to do things just as others do them, but always a little better. They always pushed things that came to their hands a little higher up, this little farther on. That counts in the quality of life's work. It is constant effort to be first-class in everything one attempts that conquers the heights of excellence.”

Orison Swett Marden (1850-1924), Founder of Success magazine

What does the book talk about?

3m  action  almost  another  best  better  big  Business  champions  come Companies control  cost  customer  day  division  does  down  employees even  example  Excellence executive  fact  few  find  first  force  form  get  go  good group  hp  ibm  idea  important  individual  industry  innovation  job  know  leader  line  little lot  major  Management  managers  market  McDonald  need  New  now  number  often organization  own  part  People  percent  plant  point  president  problem  process Product program  project  put  quality  rather  really  research  right  sales  seem  service set  simple  simply  small  something  story  structure  Success  systems  take  task  team things  think  three  time  top  two  use  Value work years

“Almost all quality improvement comes via simplification of design, manufacturing... layout, processes, and procedures.”

 “Excellent firms don't believe in excellence -

only in constant improvement and constant change.” 

“The magic formula that successful businesses have discovered is to treat customers like guests and employees like people.”

Tom Peters 

History Of The Book

• Published in 1982• Started as a project on Organization: Structure

and People in 1977, given by McKinsey based in San Francisco.

• In 1979, presented their findings as a 700-slide two day presentation to Siemens.

• Later PepsiCo invited to present but asked to compress the findings.

• Thus, came the eight common themes responsible for the success of a corporation.

Design of the Research

Sample SizeStarted with 62 best performing McKinsey clients

and finally examine 43 Fortune 500’s top performing companies . They were:

1. High Technology Companies2. Consumer Goods Durables Companies3. General Industrial Goods Companies of Interest4. Service Companies5. Project Management Companies6. Resource Based Companies

Design of the Research…

Tools employed for data collection:

Limited interviews from different people 25 Years of Literature Review

Results and Findings:

Came up with 22 attribute of Business Excellence Brought them down to 8 Attributes

McKinsey 7S Model

Eight Common Themes of Excellence

• A bias for action• Close to the customer• Autonomy and entrepreneurship• Productivity through people• Hands-on, value-driven - management

philosophy• Stick to the knitting• Simple form, lean staff• Simultaneous loose-tight properties

The Rational Model

American Management Style and Flaws

1. The Business Schools are doing us in.2. The so-called professional managers lack the right

perspective3. Managers do not personally identify with what their

companies do.4. Managers do not take enough interest in their people5. Top managers and their staff have become isolated in

their analytic ivory towers.

Man Waiting for Motivation

Simplicity and Complexity• The excellent companies intentionally keep

corporate staff small.• Eliminate Paper work. E.g. P&G (Just one page

Memo)

Positive ReinforcementTwo ways to gain attention:1. Attempt through positive reinforcement to lead

people gently over a period of time to pay attention to new article.

2. The reinforcement should be immediacy.

Managing Ambiguity and Paradox

The test of a first rated intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function.

F. Scott Fitzgerald

As a leader, you are either authoritarian or democratic.

But in reality you are neither and both at the same time.

e.g. Messrs Watson (IBM)Kroc (McDonald)Mariot et al.

Four Stages of Theory and Leading Theorists

1. (1900-1930)WeberTaylor

2.(1930-1960)

Mayo et.al.Mc GregorBernardSeiznick

4.(1970-?)WeickMarch

Rational Actor

Social Actor

Closed System Open System

Importance of Culture and Evolution

They say that business has to be fiscally sound but their value set integrates the notions of economic health, serving customs and making money down the line.

To the extent that culture and shared values are important in unifying the social dimensions of an organization, managed evolution is important in keeping a company adaptive

A Bias for action

• Ambiguity in articulation of action orientation.

• Organizational fluidity ( presence of action devices ).

• Adhocracy

• MBWA

• E.g. Of Coning glass.

  • Chunking, E.g. Exxon, Japan.

• Experimenting organizations.

• Alacrity and sheer numbers of experiments are

ingredients of success.

• Amoco oil wells.

• Bootlegging at GE. (relative invisibility)

Close to the customer

    Customer is being ignored or considered a nuisance.

Nichemanship

Feedback

Customer Orientation

Autonomy and Entrepreneurship

• Companies making a purposeful tradeoff.

• The Champions.

• Probability of success .

• Tolerating Failure.( 3M’s 11th commanment)

Product Champion Successful executive champion Godfather

Productivity through people

• Key to people orientation – Trust.• “people” and not workers, “Crew

members” and not personnel.• Success stories.

HP

IBMWalmart

HANDS ON,VALUE DRIVEN

• Figure out your value system and decide what

your company stands for

• Value is what an organisation does that gives

everybody working in it the most pride

• Values may not be hard like Structure,

policies,strategies etc-Philips and kennedy

• However not in excellent companies

• Why does a company really fail??

 • Reason- Values cannot be copied.

• Caterpillar-dealers, J and J- railroad workers

• Examples are Being the best, superior quality and

service

• Persistence is vital when sticking to values

• HANDS ON MANAGEMENT is Management by

wandering around

• “Do not summon people to your office”

• ED Calson of United Airlines( American CEOS)

• Do not develop corporate cancer

• Maintain good relationship with line positions

STICK TO THE KNITTING

• Todays Conglomerates

• Heubleins Acquisition of Conel Sanders in liquor

business- “ Bought 5000 Stores!!!”

• Du ponts acquistion of Connocos Oil business

• Is it credible for a Electronics executive to talk

about Consumer goods?

• Most succesful diversification are those which

diversify around a single skill

eg:3M- The coating and bonding technology

  • Related diversification is ok- GE from generation

turbines to jet engines

• Least succesful is reckless diversificiation

• No synergy among most conglomerates

• Pioneering European companies prefer internal

expansion to mergers-Airbus,Benz

• “Great companies do not test new waters with

both feet”

• “Small is beautiful”

• Ill advised forays- P and G with pringles

• “ COLGATE trying to become the firm it was a

decade ago”

SIMPLE FORM,LEAN STAFF

• Along with size comes Complexity

• Most complex-Matrix Organisation structure

• It consists of product grouping,Market segment,

geographic area plus basic functions

• It dilutes priorites Eg: dual control between

production and functional managers

• Boeing- either project team or technical discipline(

gave rise to project management)

• Follow any one dimension only

• J and J- 150 independent divisions

 • Simplicity is the best form of flexibility

• LEAN STAFF- few administrators, more

operators

• Not more than 100 in corporate office

• Cut down on hierarchy

• Five levels of management in TOYOTA, 15 in ford

• Structure of 80’s- Breaking old habits , Stability

through simplicity and Entrepreneurship

SIMULTANEOUS LOOSE TIGHT PROPERTIES

• It is essence the co-existence of firm central

direction and maximum autonomy

• Best managers like procter, Hewlet packard were

strict disciplinarians but gave maximum autonomy

• “Give plenty of rope but accept the chance

that people would hang themselves”

• Culture- @ IBM it is service, chemical engineers @

3m

• Excellent companies have self defense mechanism-

customers,peers etc

 • PARADOXES• Quality vs cost- “ If u make a good with quality you

don’t have to make it twice”

• Execution vs autonomy-Classroom (autonomy is

product of discipline)

• Short vs Long term trade off-Believe more in

values

• Smart-Dumb Rule- MBA vs simpleton

• People who lead excellent companies are simple

people eg: Marriot ,procter,gamble,hewlett

packard

Thank You