American business held its Great Revival in 1983. Hallelujahs rang out on Wall Street. Investors flocked down the sawdust trail to brokerage houses. But the most inspiring gospel for American commerce and industry came from two California-based business authors bearing a devotion straight out of Norman Vincent Peale: the power of positive cash flow.
In Search of Excellence, by Thomas Peters and Robert Waterman Jr., offers a reassuring vision to Japanophobes chastened by books like Theory Z and The Art of Japanese Management. After 44 printings and 1.3 million hardcover copies in executive hands, Excellence has become the biggest nonfiction best-seller since Roots. It has spent nearly every week of the year as No. 1 on the New York Times list and cleared the way for business how-to books to replace the previous can’t-miss staples of sex, diet, jogging and Garfield. Perhaps the sweetest revenge of all, Excellence has conquered Japan, selling 325,000 copies in translation in the first six weeks.
The book’s success is based on a message that can warm the cockles of any capitalistic heart: “There is good news from America. Good management practice today is not resident only in Japan.” Peters and Waterman go on to cite chapter and verse of homegrown triumphs, singling out companies (e.g. IBM, Johnson & Johnson) that have succeeded by listening to workers and customers, encouraging innovation, creativity and action, and keeping bureaucracy and red tape to a minimum. “We didn’t find any magic,” says Peters. “We don’t buy the notion that these companies have better people than other companies. What we learned was that they were beehives of activity. We found a lot of hard-to-manage, sometimes crazy entrepreneurs, but they were allowed to flourish there.”
Few success stories in the book can match the nonstop super-salesmanship of the authors themselves. Peters and Waterman have indefatigably crusaded as far as Sweden, Switzerland and Venezuela, lecturing and consulting at fees of up to $20,000 a day. They are popping up before every assemblage imaginable. Peters has recently proselytized to 80 chief executives in Chicago, 600 IBM salesmen in Bermuda, 4,500 city managers in Kansas City and 1,000 bakers in San Francisco. “I haven’t spent a full weekend at home since June,” Waterman sighs.
Despite all this effort, Waterman may have to await his reward in a better world. A married father of two who lives south of San Francisco, he is a director of the giant consulting firm McKinsey & Co. Since he did research for the book as a company project, he has earned no royalties so far (but is negotiating a deal). The divorced Peters, on the other hand, left McKinsey in November 1981 and formed his own consulting and publishing companies. Now about $1.50 from each $19.95 hardcover copy is rendered unto him.
That’s a lot of mammon—but until just over a year ago even the authors were of little faith. As Waterman recalls: “On our down days when we were writing, we thought, ‘If this gets to hardback and our mothers like it, we’ll be lucky.’ ” Harper & Row cautiously printed only 15,000 copies—and reportedly expected to sell only 6,000. But then companies like Hewlett-Packard, Bell Labs and IBM began buying books by the truckload. Even Harrah’s casinos saw the light and distributed hundreds of copies to top employees. But the true place of In Search of Excellence in America’s business pantheon may soon be ratified by a hotel chain that receives favorable notice in the book’s introduction. “I hear a rumor,” says Peters, “that Four Seasons may put paperbacks of our book in their 6,575 hotel rooms. We may be the Gideon Bible of Four Seasons.”
Nonetheless, there are nonbelievers. Business schools attract a goodly share of barbs in the book, and the current Harvard Business Review returned the favor in a scathing attack entitled “A Disappointing Search for Excellence.” The Review takes the authors to task for using anecdotes and the unsupported testimony of employees, journalists and other nonexperts, rather than academic research. (Indeed, a few spoilsports noted that one of Waterman’s former McKinsey clients, Seattle’s Seafirst Corp., this year became one of the biggest failures in the history of U.S. banking.) But the collaborators are unfazed. “Once we realized that treating a customer decently was a piece of astonishing news to big companies,” says Peters, “I decided I wouldn’t feel guilty about not telling them how to implement that. We’ll save that for our next book.”