39. Tom Peters searching for small business excellence in tough times
In a fast changing world the need is more than ever to be at the top of your game to survive and prosper – in recession it is tough and in the growth stage the competition gets fiercer. As a small business you generally have more control over your destiny than as an employee, so you need to exploit it.
Tom Peters was looking at US industry when it was taking a beating at the hands of the Japanese industrial machine, and its growing domination in many global markets. His book, written in conjunction with Robert Waterman, In Search of Excellence, was published in 1982. He went back to the old principle of studying what successful companies do. He looked back over the leading companies of the 1970s and early 80s based on their profitability and innovation and tried to deduce some general principles.
As usual – and as you would expect from a McKinsey consultant – he looked at large corporations but all his conclusions can easily be applied to small businesses and most to single person businesses as well.
I will talk about his conclusions in later blogs but the book came out of some famous McKinsey work called the Seven S Framework (every good business idea, it seems, must fit into an easy mnemonic to be taken seriously!). The Seven Ss themselves break into 2 groups, the 4 so-called hard elements and 3 soft ones. The Seven Ss represent the key headings under which a business’s functioning might be reviewed.
The ‘Hard Ss’ are: Strategy (how the business is going about achieving its objectives), Structure (how the business organises to implement its strategy), Style (how the business goes about looking and feeling to its stakeholders) and Systems (what the business creates to implement and manage all of these effectively and efficiently).
The 3 ‘Soft Ss) are Staff (who the business employs and recruits to implement the other Ss), Skills (what abilities those people have and what individual capabilities the business may have been able to build into its systems) and finally Shared Values or Culture (what attitudes, mindsets, ambitions etc drive the achievement of the objectives)
Within this framework Peters’ studies identified 8 core factors which seemed to distinguish the excellent companies. I will look at each of these in future blogs and how they apply to small business, and especially now as we face recession and turbulent markets, both financial and commercial.