By the Book

Boning up on excellence

The book says nothing about sex, exercise or cats. It does not tell readers how to solve Rubik's Cube, make a million dollars in real estate, or shed 20 Ibs. in ten days. Instead it deals with the mundane world of corporate management, and its authors, two business consultants, never expected to join James Michener and Jane Fonda on the bestseller lists.

They were too modest. In Search of Excellence: Lessons from America's Best-Run Companies (Harper & Row; 360 pages; $19.95) by Thomas J. Peters and Robert H. Waterman Jr. has been the No. 1 nonfiction bestseller for 14 consecutive weeks. The millionth copy of the book rolled off the presses last month, less than a year after its November 1982 publication. That milestone, claims the publisher, made Excellence the second-fastest-selling nonfiction hardcover book in U.S. history, topped only by Alex Haley's Roots.

The book, which analyzes the successful management styles of such pacesetting companies as IBM, Procter & Gamble and McDonald's, has become a how-to manual for executives eager to put their firms on the fast track. It is Topic A in seminars, skull sessions and water-cooler chitchat. Excellence themes have suddenly turned up in the advertising campaigns of businesses as diverse as the U.S. Postal Service and Bloomingdale's, the chic department-store chain. On the lecture circuit, Peters and Waterman each command up to $15,000 an appearance.

Published at the tail end of the most painful recession since the Great Depression, In Search of Excellence could hardly have been more timely. American business, criticized for its sluggish productivity growth and stung by foreign competition, was searching for solutions. For a while, books on Japanese management, like Theory Z, were the rage. Then many executives became intrigued with The One Minute Manager, a piece of pop psychology claiming that employees could be spurred to greater productivity by "one-minute praisings" and "one-minute reprimands." Written by Management Consultant Kenneth Blanchard and Psychologist Spencer Johnson, Manager has been on the nonfiction bestseller list for 54 weeks, and now ranks No. 4.

In Search of Excellence grew out of research begun in 1978 by Peters and Waterman for McKinsey & Co., a New York City-based management-consulting firm. After studying 43 model U.S. companies, the authors found that among other things, excellent firms stay close to their customers, encourage innovative ideas from rank-and-file employees, and experiment constantly to improve their products and services. Notes Waterman: "Our book was saying, 'Look, America, you're not so bad after all. Indeed, you've got some companies that are doing just great.' People were anxious to hear that."

Jack Reichert, chairman of Brunswick, a bowling-equipment manufacturer, got three copies of Excellence as gifts last Christmas and was impressed enough to buy 100 more for his staff. The book has encouraged him to spend more time touring plants and talking to employees, a practice Peters and Waterman call "management by wandering around." The Lockheed aerospace company is setting up a program called the Lockheed Way to Excellence, in which executives will meet three or four times a year for weeklong training sessions. At Weyerhaeuser, a forest-products company, Excellence spurred an effort to find out more about customer needs. Observes Weyerhaeuser Spokesman Thomas Ambrose: "Rather than just saying, 'Here's a carload of two-by-fours,' we're asking the customers how they're using the material and feeding'the information into our planning process."

Excellence has been a strong source of motivation for the archrivals of the companies like McDonald's that are praised in the book. Says Glenn Jeffrey, a senior vice president at Burger King: "We have an aggressive game plan to be the premier company in our industry. The next time Peters and Waterman write a book on excellence we want to be the company they're describing, not McDonald's."

Waterman is still a McKinsey director, but Peters left in 1981 to set up his own consulting firm in Palo Alto, Calif., and has now collaborated with Zenger-Miller Inc. to start an executive-training program called Toward Excellence. Meanwhile, McKinsey has conducted a new study of excellence in medium-size corporations such as Wyle Laboratories and Dunkin' Donuts. Several publishers have shown interest in expanding the latest report into a book, and McKinsey wags have already decided that the title should be Son of Excellence. This file is automatically generated by a robot program, so viewer discretion is required.