Commentary Magazine

A Passion for Excellence, by Tom Peters and Nancy Austin; Innovation and Entrepreneurship, by Peter F. Drucker

Managing Managers

A Passion for Excellence: The Leadership Difference.
by Tom Peters and Nancy Austin.
Random House. 437 pp. $19.95.

Innovation and Entrepreneurship: Practice and Principles.
by Peter F. Drucker.
Harper it Row. 277 pp. $19.95.

In our society of large organizations there is a ready market for manuals of technique, advice, and consolation concerning the many problems afflicting the managerial class, and the outpouring of books and articles on the subject is consequently ceaseless. Most of these works—Lateral Thinking for Management, High Output Management, “Managers and Lovers,” to name a few recent titles—attract only a specialist readership of mid-and upper-level business or government executives. But occasionally one of them finds a broader public.

Such was the case with In Search of Excellence by Thomas J. Peters and Robert H. Waterman, published in 1982. Its tremendous popularity, encouraged by a high-powered promotion campaign, made it the best-selling business book of all time, a publishing event that became a cultural phenomenon. This book, purportedly just another treatment of how some topflight businesses were run, identifying the key issues they faced as well as the “secrets” of their success, actually provided very little information about the enterprises it discussed. Like certain contemporary treatments of Central American politics or life in the People’s Republic of China, In Search of Excellence eschewed, in the words of its authors, the “baleful influence” of facts and figures, concentrating instead on an upbeat message that no doubt helps to explain its great success. At a time of critical conditions in key sectors of the economy, notably the “smokestack” industries, Peters and Waterman painted a picture of a never-never land where the most intricate business dilemmas were readily resolved, where the “seven hunks of complexity” (by their count) were overcome, and where “people can blossom, develop self-esteem, and be . . . excited participants in society.”

How was this beautiful world achieved? Not through bottom-line analysis or financial planning, or through the other standard, arduous techniques employed in the real world of the corporation. Such “hardware” approaches were rejected by the visionaries of excellence. For them, a “people orientation,” expressed through “coaching and evangelism,” was the factor separating excellent from nonexcellent companies. “Soft is hard,” they told their readers, and their message was translated into fifteen languages.



In the period since the publication of this tract, at least a dozen of the companies chosen for idealization by Peters and Waterman have suffered serious financial setbacks, and the overall well-being of several others has fallen open to question. “Oops,” wrote Business Week, after a look at the balance sheets. Yet A Passion for Excellence, the just-published sequel to their first book, is already a best-seller in its own right. This time, Peters (now “Tom” on the title page and throughout the text) has a different co-author, Nancy Austin, herself a co-author of The Assertive Woman, “the first book written to help women take practical steps toward positive, assertive behavior.”

Here again the goal is to “keep things simple in a complex world.” But in format, at least, the second Excellence is far from simple. It is a 437-page hodgepodge of anecdotes, homilies, case studies, and lengthy “inspirational” passages drawn from the business press, the Harvard Business Review, and Mary Kay on People Management. It is no easy matter to extricate a theme from the welter of secondary material, lists, maxims, and descriptions of “momentum-makers” that make up this self-styled Whitman’s Sampler of a book. In brief, however, Peters and Austin propose to discuss the problems of innovation and entrepreneurship in the public as well as the private sector, and to offer some of the action-oriented guidelines for which management consultants are notorious.

To be sure, theirs is a timely and important subject, one to which the President has been speaking lately, and an informal and entertaining treatment of the weighty questions raised by the issue of innovation in stagnant industries would be a refreshing change from the run-of-the-mill treatises on this subject. But A Passion for Excellence, like its predecessor, provides little in the way of nuts-and-bolts analysis or empirically-tested recommendations. Aside from some observations concerning the potential value of small work groups and the dangers of overreliance on cost-cutting when flexible budgets can foster new ideas, they fail to come up with useful suggestions. And they sidestep substantive discussion of the intriguing paradox implied by the very concept of “managing for innovation,” settling instead for a series of pep talks and for propagating their doctrine of “MBWA”—Management by Wandering Around.

If the content of the second Excellence falls short of the mark, its rhetoric is of some interest, for it bespeaks the influence simultaneously of the hard and the soft Left. Workers are to be “empowered to take possession” of their own achievements; “radical decentralization” is to be brought about through a “certain militancy.” At the same time, we read that more and more “brave souls” with “lonely lives” are banding together in a move from “tough-mindedness to tenderness,” and that the reactionary values of “controlling and arranging” are to be replaced by a “visceral form of spiritual energy,” for “beauty is universally available.” Thus these two mainstream management courtiers, by no means avowed ideologues, mindlessly filter the anti-business attitudes of the 60’s and 70’s into a brew evidently palatable to millions—but utterly worthless to anyone interested in understanding the actual world of business today.



For a systematic treatment of the problem of fostering innovation, one which prefers the “genuinely attainable” to the perfectly beautiful, readers may sober up with the newest book by Peter F. Drucker. Drucker, of course, is the management consultant with the loftiest reputation and the lengthiest bibliography of them all. Since he came to this country from Germany in 1937 he has carved out a career helping executives devise logical methods for coping with tangible problems through trade-offs and the “optimization” of limited resources, rather than by reaching for “soaring meanings.” Though given to repeating himself in more than twenty books and at least five times as many articles, he has also distinguished himself (and the profession he helped create) through patient exploration of the social and political implications of even the most mundane business issue. For though he writes about the problems of managers, his underlying subject is always the importance of conserving legitimate authority in society, the need for civility, the danger of chaos.

Responsible management, Drucker once wrote in the language of political theory rather than that of the executive suite, is not just a technique but a constitutional necessity. And he explained in similar terms the practice of “management by objectives” (MBO)—the widely used method of performance evaluation that he developed many years ago. By employing the principle of self-control to transform objective needs into personal goals, MBO was conceived as a means for making “the commonweal the aim of every manager.” “This,” wrote Drucker, “is genuine freedom.”



Where the Excellence books advise us “to be true to our own aesthetic,” in the words of Tiffany’s people-oriented Walter Hoving, Drucker’s observations in Innovation and Entrepreneurship are specific and down-to-earth. Beginning with socioeconomic analysis, he notes that a major shift has taken place in the foundations of our economy, as traditional employing institutions are being supplanted by high-tech industries and also by a growing number of small- and medium-sized entrepreneurial companies in a multitude of fields. He has some cogent comments, too, about the emergence of the “fourth sector,” partnerships between private and public institutions for the delivery of such services as health care, education, and fire protection.

In contrast to the Excellence teams, Drucker warns against the “incongruity between perceived and actual reality” on the part of business leaders and public policymakers. Effective entrepreneurship is achieved by hard work, not by intuition or by wandering the corridors. “In fact,” he writes, “intuition is no good at all if by ‘intuition’ is meant ‘what I feel.’ For that usually is another way of saying ‘what I like it to be’ rather than ‘what I perceive it to be.’ ” Drucker’s hard-headed proposals include a careful assessment of the structure of the market, alertness to changes in processes of work as well as in overall demographics, and attention to capital-formation opportunities.

It was William Hazlitt who wrote that “the most sensible men to be with in society are men of business, who argue from what they see and know, instead of spinning cobweb distinctions of what things ought to be.” Peter Drucker pays a similar compliment to the business people who make up the bulk of his readership, drawing their attention to goals that are realistic while reminding them of their obligations as organization leaders in a free society. Open to the challenge of new ideas in our legislatures, schools, and administrative agencies as well as at Coca-Cola and IBM, he is wary of the unreasoned remedy, the diagnosis that is a delusion, the style “which sings, which has rhythm, which has passion.” If we are to address the problems, both domestic and international, now facing our economy, including declining productivity and outdated management practices in established industries, his is a voice that can guide us while the excellence-mongers go on singing their siren songs.



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