“In Search of Excellence” examined the practices of successful companies and identified eight common themes that contributed to their success, including a focus on customers, decentralized decision-making, and a commitment to employees.
Close to the customer
Successful companies focus on understanding and meeting the needs of their customers. They listen to customer feedback, involve them in product development, and prioritize customer service. By staying close to their customers, companies can better anticipate their needs and maintain a competitive advantage.
Simultaneous loose-tight properties
Companies that balance autonomy and control, decentralization and centralization, tend to be more adaptable and responsive to changing circumstances. They have clear goals and values but also allow for flexibility and creativity.
Balanced scorecard
Successful companies use a balanced scorecard approach to performance measurement, which includes financial and non-financial metrics. This approach allows companies to track progress toward their strategic goals and adjust their strategies as needed.
Managing for the long term
Companies that prioritize long-term thinking and investment tend to perform better over time. They focus on sustainable growth and are willing to make short-term sacrifices for long-term gain.
Stick to the knitting
Companies that stay focused on their core competencies and avoid diversifying too much tend to perform better. By sticking to what they do best, companies can maintain a competitive advantage and avoid spreading themselves too thin.
Autonomy and entrepreneurship
Decentralized decision-making and a culture of entrepreneurship are important factors in driving innovation and success. Companies that empower their employees to make decisions and take risks tend to be more nimble and responsive to changing market conditions.
Simple form, lean staff
Successful companies tend to have simple organizational structures with fewer layers of management. They prioritize efficiency and avoid bureaucracy, which can slow down decision-making and stifle innovation.
Cultural change
Companies that undergo successful cultural transformations tend to have a clear vision, strong leadership, and a willingness to take risks. Cultural change requires commitment and perseverance but can lead to significant improvements in performance.
Productivity through people
Companies that prioritize employee engagement, training, and development tend to have higher levels of productivity and profitability. By investing in their people, companies can create a culture of excellence that attracts and retains top talent.
Hands-on, value-driven
Successful companies have leaders who are actively involved in the day-to-day operations of their businesses. They have a clear sense of their company’s values and prioritize actions that align with those values.
