In their book In Search of Excellence, McKinsey consultants Tom Peters and Robert Waterman found 8 common themes which they argued were responsible for the success of 14 identified companies of “excellence.” The framework is known as the 8 Attributes of Management Excellence. The research and theorizing of this framework was based on the McKinsey 7-S Model, also authored by Peters and Waterman.
The 8 attributes are:
- A Bias for Action
- Close to the Customer
- Autonomy and Entrepreneurship
- Productivity through People
- Hands-on, Value-driven
- Stick to the Knitting
- Simple Form, Lean Staff
- Simultaneous Loose-Tight Properties
In an interview, Peters later also added a 9th attribute: Capabilities Concerning Ideas, Liberation, and Speed.
Let’s quickly explain the 8 attributes with a bit more depth.
A Bias for Action
This characterizes a company that can get things done—i.e., one that adopts a “ready, shoot, aim” philosophy. There is also a strong focus on communication. The Bias for Action attribute increases knowledge, interests, and commitments.
Close to the Customer
Companies of excellence highly value customers–customer is truly king. There is an obsession with quality, reliability, and customer service. There is a constant emphasis on customer satisfaction.
Autonomy and Entrepreneurship
Risk taking, innovation, “bootlegging,” and “championing” are highly encouraged in a company of excellence. Failure is completely tolerated. Employees are never penalized when they take a risk and things go south. Successful product or program champions rise quickly up the ranks.
Productivity through People
The ideas and actions of the frontline workforce, customers, and suppliers are the main source of productivity gains. We are enthusiastic and respectful toward others. Employees are treated with utmost respect and dignity. Likewise, employees feel a sense of job security and safety. Gains through productivity improvement are broadly shared across the organization with all employees.
Stick to the Knitting
“Never get into businesses you don’t know thoroughly or know how to run.” - Robert Wood Johnson, founder of Johnson & Johnson
Companies should always stick with what they know best. The excellent companies expanded and diversified primarily internally, one small, manageable step at a time. Thus, risk was contained and measured.
This attribute embodies the company philosophy and values of excellence companies. Two common key values were
- striving to be the best; and
- delivering superior quality and service.
We should be clear on what our company stands for. Leaders are seen as positive role models. They are also highly visible across the organization.
Simple Form, Lean Staff
Organizations of excellence have simple, decentralized organizational structures. People are know who they report to. The structure is “flat” with minimal top-level, management staffing. Also, organization realignments/restructures seldom occur in these companies.
Simultaneous Loose-Tight Properties
This last Attribute of Management Excellence is actually a summary of the other 7. There is tight financial and strategic control, but decentralized authority The key values of the organization are articulated and known. All employees are charged with tightly adhering to these values, but are given leeway as to how the daily business is performed.
Does your organization embody these 8 Attributes of Management Excellence?
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