In Search of Excellence: Conclusion

Just finished reading the book "In Search of Excellence". I would like to summarize my observations and learning.

I feel that this book is not an attempt to revolutionize but to synthesize, i.e. it does not look to come up with a radically different management theory but tries to consolidate on the existing ones. However, it is not done with a view of academic research. Instead, the synthesis has been achieved by retro-fitting the elements of old management theories with all that seems to work for excellent companies. In this, the book is very practical and hands-on in its approach. There is a lot to take away from this wonderful book. All the same, I feel it does not sufficiently highlight the role of the leader. It does mention how a leader's personality shapes the company and determines its future. But it also tends to make the reader believe that it is possible to reach that stage in a series of calculated steps. I am not sure about this. I agree that learning from experience of excellent companies can help the managers to avoid fundamental mistakes. However, I am more convinced than ever that without an able leader you are not going anywhere. No matter what you do. It is good to talk about building leaders, but only a leader can build a leader. You cannot always manufacture one in any factory, university or consultancy. Finally the company will become the embodiment of the ideals and beliefs of its top leadership. Period.

All the same, the basic principles espoused by the book can make any work place better. It can help all people with any trace of level 5 leadership to recognize what they can achieve (and for them "Built to Last" and "Good to Great" may prove to be good as well). It can also seriously burn your fingers (and more) if you seriously have no idea where you are going. Overall, I think that the basic principles advocated may be an important step in the growth of a leader or forming of an excellent company. This book is also a valuable resource for any management student who wishes to quickly re-cap the main management theories in Business History.

Easy Answers Can Be Misleading

Business executives, especially those of large corporations, do bear a responsibility to the society. Nevertheless, I find the recent attack on "executive greed" by GE chief Mr. Jeffrey Immelt in somewhat bad taste. I guess with recession in full force it is becoming increasingly fashionable to air socialist views as panacea of all evil. Why, I think Hugo Chavez would be delighted. It is true that inequality has increased in the US and the corporations have played their part in it. However, to link the current problems directly (and only) to executive greed is both absurd and far-fetched. I think it is a demagogic effort to find an easy answer to a very difficult question. If US wants to find answers to its problems, it will have to do better than trying to throttle its bankers and executives.

The American dream is about the ability to make it big, no matter who you are, by sheer force of your brain. There in lies the magic of US. America's entrepreneurial spirit defines US and ensures its dominance. All the same, US does face a multitude of problems (to name a few: a hyper-active judicial system that can really sound funny, a broken medical care system, an increasingly bureaucratic structure of governance that may stifle creativity, lack of interest in education in youngsters, the weakening family structure, tense race & religion relations, increasing number of homeless, under-privileged & unemployed). People are living much beyond their means, consuming wastefully and getting into debt. The American dream is not about being irresponsible/lazy and not all its ills result from corporate negligence. Accountability is not the domain of bankers and executives only. Unless each citizen learns to take responsibility about their finances, the size of their family, their personal life and their education, it is useless to irresponsibly point fingers. As someone has rightly said, US needs a "Statue of Responsibility" to balance the "Statue of Liberty". Bashing bankers and executives is not going to solve America's problems. But perhaps they would make convenient targets for politicians so as the Government can hide its own failures and escape the public ire. Considering a career in politics, Mr. Immelt?

Excellence: Creativity is not Innovation

As I move along this book, I see that Peter Drucker's principle of employing the "whole" person is pretty central to this book. In fact, the book actively champions the principle and supports it with umpteen anecdotes, stories and examples. It mixes it pretty nicely with having a strong focus on the end-user. In this whole mix, something that struck me as pretty important was the place of creativity and innovation in this whole equation. The writers are pretty clear: creative and new ideas come dime by dozen. What is rare is the ability to see a practical use for these ideas, the will to implement a vision and the willingness to learn by experimentation. This is termed as innovation and dubbed as one of the most critical factors behind the success of excellent companies.

I think this should serve as a stark warning for new entrepreneurs and inventors alike: if you do not get the business basics right but have a good product, ultimately you will be displaced by somebody who can take your ideas to the end customer in a better way. Or, as the book says, an innovator can be an idea-thief (not always). Patents may not always help as there can be many ways to achieve the same thing. Once anybody has proved that a market exists, everybody would want a piece of it. Fewer problems and good communication would help to retain customers. Hence, it may be worth it to go a few months late into the market if it means lesser problems with the product. Moreover, the second-mover can potentially learn from the mistakes of the first mover and cash on it. As I read somewhere, the early bird gets the worm but the second mouse gets the cheese! The vice-versa is also true: to start an enterprise one does not need a multi-million dollar research team: an innovative idea and customer focus will suffice.

One-off big bets with strong patent possibilities (as in pharma, computer chips, chemicals and biotech) may come to the mind as exception to this rule. The book points that the culture of innovation and openness fosters new products (as in 3M) and there is no substitute for innovation. Confusing it with creativity can take one down the wrong road.