In Search of Excellence is a book dealing with many different principles of economics and what makes big business’ excellent. The first idea that Peters discusses is his chart of the McKinsey 7-S Framework. The graph is very simple but the ideas are fairly complex.
In their research, they found that their philosophies were too hard to explain and easily forgettable. They made this Framework to deal with strategy, structure, style, systems, staff (people), skills, and shared values (culture). This has 7 S’s (easy to remember) and a graphical representation to visualize.
This shows the businessman that the intractable, irrational, intuitive, and informal organization can be managed. For example, anyone assuming that a new manager of a Taco Bell will perform exactly as the old manager did is ridiculous. The organization of workers must adjust and adapt to the new manager’s way of business. Another more main topic of the novel is the Eight Basic Principles. Their research had shown that the excellent companies had been based on the basics.
The companies had to try to keep things simple. Sometimes, to a big business, it might seem logical that business should be run more complex the larger it is. From their research, this is usually not true. The first principle is a bias for action. This is basically saying “Stop talking and do something about it.
“When Taco Bell has a rush of customers and their supplies for making food are low, they (usually) don’t say “You know what, I have no more cheese” or “Could someone get me some more cheese?” They take action and get the cheese, make it if necessary, and get the problem solved as quickly as possible. The second Principle they deal with is to be close to the customer. This means good service and listening to what the customer has to say.
If the producer, Taco Bell, is not in touch with what the customer wants to eat, then the business will most likely fail. Although it also refers to customer satisfaction; quality food made right and courteous service: “Have a nice day and enjoy your meal!” The third principle is autonomy and entrepreneurship. This is the innovation principle. 3M is known for innovation and they welcome the changing and rearranging of old and new products.
For example, my dad took 3M’s basic arthroscopy pump and redesigned it into an in flow-out flow cannula. This innovation on his part temporarily set 3M back on its feet in that product line. The fourth basic principle is productivity through people. This deals with the individual as the best means for efficiency improvement rather than capital investment.
If Taco Bell could put everyone in the area of work they most enjoyed (drive-thru, washer,…) then they could produce more food and maximize their utilities. The fifth basic principle is hands-on, value-driven. This is the standard-setting and enforcing values in a company. This is keeping the “head honcho” in touch with the assembly line worker and projecting the company’s original ideas, instead of an image of some suited businessman lurking in a big, dark office.
The sixth and often obvious principle is to stick to the knitting. The basically says that if a company is in the food business, it should not branch off into the wood industry unless they have nowhere else to expand in the industry they are already in. A seventh basic principle is a simple form, lean staff. This means leaving few people up top to manage a company and keep the form of management simple. The eighth and final basic principle is simultaneous loose-tight properties. This is another value-based principle.
This could be described as the ability for a worker of Taco Bell to do his/her job in his/her own way as they incorporate the company’s values and philosophies into their work. These values demonstrate that they don’t just work because they work, but rather because they just make sense. Peters does a great job of explaining and giving examples of these eight principles and shows us that we would be foolish to ignore these principles. Also, we could learn a new skill from the 7 S-Framework, which is what growth is really about: the ability to learn and teach.
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