Tom Peters earned his MBA and PhD at Stanford Graduate School of Business in the 1970s, under the unconventional tutelage of organizational psychologists Eugene Webb and James March. But he pegs the beginning of his management studies to 1966 and his two tours of duty as a young naval officer and combat engineer with the Seabees in Vietnam during the war.
“That left an indelible impression,” Peters says of his first leadership role. “Cut the BS. Can the excuses. Forget the fancy reports. Get moving now. Get the job done. On this score nothing has changed in 50 years, including the maddening fact that all too often a business strategy is inspiring, but the execution mania is largely AWOL.”
A lot of other things have changed in the past half-century, but a lot of what Peters learned about management — in the Navy, at Stanford, while researching and writing In Search of Excellence with Bob Waterman at McKinsey in the early ’80s, and in the decades after — remains as relevant today as it was then. All of it and more is collected in Peters’ new book, The Excellence Dividend.
The fat, red exclamation mark that Peters chose as his logo a quarter-century ago is an apt symbol for The Excellence Dividend, which Financial Times management editor Andrew Hill called “shouty.” It’s a sobriquet that Peters embraces. “I give speeches that are noisy and I write like I speak,” he laughs.
Management Isn’t Complicated
Noisy helps when you’re saying things that most leaders already know, but that far too few act upon in a consistent way. In The Excellence Dividend, Peters pinpoints the most common infractions:
“Poor cross-functional coordination and communication is the principal element in the delay of everything,” Peters says. Internal barriers, not the competitors, are the big impediment to effective execution. Getting functions to stop feuding isn’t enough; they need to actively work together in a spirited, coordinated way.
“Excellence is conventionally seen as a long-term aspiration,” he says. “I disagree. Excellence is the next five minutes.” Excellence is determined by your next customer contact, by really listening to an employee, by shouldering responsibility and apologizing when a mistake is made. Excellence comes in the form of small, everyday acts.
“CEO job No. 1 is setting — and micro-nourishing one day, one hour, one minute at a time — an effective people-truly-first, innovate-or-die, excellence-or-bust corporate culture,” Peters says. He reminds us that Lou Gerstner, IBM’s turnaround CEO in the ’90s, said that when it comes to shaping the behaviors and attitudes of thousands of employees, “culture is not just one aspect of the game — it is the game.”
Excellent customer experiences depend entirely on excellent employee experiences. It’s employees who make or break the customer connection, says Peters. So, leaders have to put employees first. That means hiring empathetic, curious people with good character and developing them. “Training is any firm’s single most important capital investment,” he adds.
“I always write ‘LISTEN’ on the back of my hand before a meeting,” Peters says. Listening is the bedrock of leadership excellence; learn how to do it well and practice it.
“This stuff is not complex; it’s incredibly straightforward, even though I will promise you that its academic roots are solid,” Peters says. “I did a seminar once and at the end, this guy, who was Burger King’s biggest franchisee, gets up and says, ‘I spent two days at this seminar and I didn’t learn one damn thing that was new.’ Then, he said, ‘But it was the best seminar I’ve ever attended. It was a blinding flash of the obvious.’”
Strategies That Add Value
Peters spends a good deal of time on the practices of effective management in The Excellence Dividend, but he doesn’t ignore strategy.
Two of those strategies are focused on what Peters calls underserved markets. The first is women. “Women buy everything,” Peters says, pointing out that they make a majority of consumer and business purchasing decisions. The problem is most companies aren’t prepared to serve the women, a consumer market that is currently estimated at $20 trillion annually. “One indicator of readiness to embrace this colossal women’s market opportunity comes from conducting what I call a ‘squint test,’” says Peters. “One, look at a photograph of your exec team. Two, squint. Three: Does the composition of the team look more or less like the composition of the market you aim to serve?”
The second underserved market derives from the rapidly aging population — there are more than 100 million people over age 50 in the U.S. alone, and between now and 2029, one Baby Boomer will turn 65 every eight seconds. “It, too, is stupendous in size,” says Peters. “In this case, however, most firms seem clueless — or worse, even seem to turn their back on the opportunity.”
Companies can’t treat the “oldies” market like an initiative, Peters declares. It requires a stem-to-stern assessment of skills, assets, and culture that could be brought to bear on the market. The payoff: A foothold in a market in which households headed by someone age 50 or older have 47 times more net wealth than households headed by people under age 35, and several decades of life to spend it.