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CHAPTER FOUR

The Management Superstar

Tom Peters

The man on the stage stops talking for a moment and takes off his jacket. He is so hot that everyone can see that his shirt is wet. ‘Some people will tell you that they have all the answers,’ he says. ‘But not me. I know nothing. In this world we all know nothing. Zero. And do you know why? It’s because the business world is changing too quickly.’

Some of the people who are watching look at each other and shake their heads.

‘Look at General Motors. They knew it all. That’s why they didn’t prepare for the oil price increase in the 1970s. That’s why they didn’t notice the Japanese car industry. Oh yes, General Motors knew it all.’

A few people now start to laugh. So the man on the stage stops and points at them.

‘Why are you laughing? General Motors was the biggest company in the world. It was probably a hundred times bigger than your company. And its managers were probably a hundred times better too. But their problem was that they thought they knew it all and, really, they knew nothing. And that is my message today.’

The people who are watching are all very successful businessmen and businesswomen. They have each paid over $1,000 for their seats. So why are they watching a man who knows nothing? Why do they listen to his insults?

The reason is that the man is Tom Peters - the star of the management world. He earns over $50,000 for each talk. Millions and millions of people have bought his books. The world’s top companies ask his advice.

Tom Peters would like you to believe that he’s a little bit crazy. The serious Peter Drucker introduced the idea of management by objectives, an idea which was often called MBO. As an answer to Drucker, Peters suggested MBWA. And what did that mean? Management by walking around!

At his talks, Peters sometimes shows a painting in the style of Jackson Pollock. It looks like the artist has thrown a can of paint at the picture.

‘The plan of your organization should look like this,’ Peters tells his listeners. They shake their heads. What does he mean? But when they think about it more carefully, his ideas become clearer. He’s trying to tell them that business isn’t tidy and well ordered. Business is messy. Business is always changing. To succeed, the modern business person needs to think in new ways.

Some business people might think that Peters and his ideas are a joke. But behind his strange behaviour, Peters has always been a very serious person.

He was a young man in the 1960s. It was a time when many young Americans grew their hair long and sang songs about peace and love. But not Peters. He was a serious student and worked hard to pass his examinations in engineering at Cornell University. It was also the time of the Vietnam war. Many US students marched on the streets to show that they wanted their government to stop the fighting. But Peters didn’t. He had an arrangement with the US army. They paid for his education and he agreed to work for them when he left university. As a result, his first job was as an engineer who built roads and bridges for US soldiers in Vietnam. After his time in Vietnam, Peters studied at Stanford, one of the USA’s top business schools, and then got a job with the famous company of management consultants, McKinsey & Co.

McKinsey earns over $2 billion a year by selling advice to some of the biggest and most important companies in the world. A McKinsey report can cost several million dollars. It can do this because it employs the top people from the world’s best business schools.

After leaving McKinsey, many of its consultants have become famous people in politics or business. Lou Gerstner, the head of IBM, worked for several years as a McKinsey consultant; Robert Haas, worked there before he became boss of Levi Strauss and Co. William Hague, the leader of the UK’s Conservative party, also spent some time with the company.

When Tom Peters joined the San Francisco office of McKinsey in 1974, he was thirty-two years old and he had little real experience of the business world. He soon found that McKinsey was a tough place to work. Consultants must be ready to travel anywhere in the world at any time. They often have to work over a hundred hours a week. And if they fail, they are soon looking for another job. At McKinsey, it is not possible to stay at the same level for your whole working life. Either you are good enough to get a better job inside the company, or you are asked to leave.

McKinsey takes its name from the man who started the company, James O. McKinsey. But the person behind the company’s great success was really Marvin Bower. Bower became the boss of the company in the 1930s. He wanted McKinsey to have an image like a law company or a bank. He said that his company’s advice should always be expensive so that its customers took it seriously. He said that its consultants should never talk about its customers’ business. He said that McKinsey’s consultants should always dress in dark suits, ties and hats. And for some strange reason, he also told them always to wear long socks. Obviously, McKinsey’s consultants were not chosen for their legs!

Peters’ work at McKinsey gave him the chance to go round the world and to see businesses in many different countries. As he travelled, he became interested in the question: what makes an excellent company? More and more people wanted to hear his answer and soon McKinsey was asking him to give talks about his ideas to some of its biggest customers.

Then in July 1980, Peters had a meeting with Lew Jones, the boss of the US magazine, Business Week.

‘We like your ideas,’ said Jones. ‘Can you write something for us?’

A week later, the front cover of Business Week said, ‘Putting excellence into management.’ Inside, there was a four-page piece by Tom Peters that explained his main ideas. Although it was on page 196 of the magazine, lots of people read it and liked it. Peters says, ‘That was a huge piece of luck. The phone started ringing. It was the last day of peace I ever had.’

One of the phone calls was from a publishing company. They wanted him to write a book. Peters worked hard on the book for the rest of that year and continued into 1981. In fact, he found it very hard to stop and by late summer of that year he had written 1,300 pages. As a writer, Peters obviously had a lot to learn. The publishing company had asked him for a business book: they didn’t want another War and Peace!

Peters asked for help from one of his colleagues at McKinsey, Robert Waterman. Waterman was very different to the noisy, energetic Peters. He was a quiet man who enjoyed painting and he had a very clear mind. Waterman agreed to rewrite Peters’s book and to make it much shorter. By the spring of 1982, the work was finished. Now, they only needed a title.

Both Peters and Waterman wanted to call it ‘The Secrets of Excellence’. They liked it, the publishing company liked it, in fact everybody liked it, except the boss of McKinsey, Marvin Bower. He called the two men to his office.

‘As you know,’ he said, ‘McKinsey never tells anyone its customers’ secrets. Gentlemen, I suggest that you find a new title.’

Peters said afterwards, ‘It was like an order from God.’

Peters and Waterman thought hard about a new title. Peters suggested that they should call the book ‘Management By Walking Around’, but in the end he and Waterman decided on the title In Search of Excellence.

When the book was published in October 1982, nobody expected it to be a great success. The publishing company only produced 15,000 copies. Some magazines wrote about it, but they were not very enthusiastic. Most people simply ignored it.

But In Search of Excellence was the right book at the right time. In the early 1980s, many Americans had lost confidence in their country’s economy. The big increase in oil prices in the 1970s had had a bad effect on US business and by 1982 over 10 per cent of US workers were unemployed. Many people blamed US business for this situation. They said that Japanese companies were making products that were cheaper and better quality than *** US ones. They said that US business people had lost their way and that things were going downhill fast.

But Tom Peters and Robert Waterman disagreed. Their message was that Americans didn’t need to worry too much about the Japanese competition. They said that there were many examples of excellent companies in the USA and in their book, they described forty-three of them. Nobody was very surprised by the companies they chose. They were nearly all big businesses like IBM, Proctor & Gamble, Johnson & Johnson and Exxon. But Peters and Waterman explained that these companies were successful because they did simple things well. These were companies that were close to their customers and that made things that the market really wanted. Above all, these were companies that didn’t think of their workers as machines. They were companies that put people first.

It was exactly the message that Americans wanted. After a slow start, the book started to sell in huge quantities and passed a million in its first eleven months. By the end of 1985 around five million people had bought it.

But as Peters soon realized, the book’s success wasn’t just because of its message. In Search of Excellence had made business fashionable for the first time. People wanted a copy because it looked good on their bookshelves. Tom Peters guessed that although five million people had bought the book, only half of those people had opened it, perhaps 500,000 had read a few chapters and probably only 100,000 people had actually read it all.

Perhaps it was a good thing that so few people actually read it. Because, soon, people started to notice that the excellent companies in the book were not so excellent any more. Two years after it was published, a US business magazine showed that a quarter of the ‘excellent’ companies were having problems. Five years later two-thirds of the ‘excellent’ companies were in trouble and some had gone out of business completely!

But Tom Peters wasn’t worried about that. He has never been afraid to say that he’s wrong. And he’s always been happy to change his mind. In fact, he started his 1987 book, Thriving on Chaos, with the words, ‘There are no excellent companies.’

In the five years between In Search of Excellence and Thriving on Chaos, Peters travelled all over the world and gave thousands of talks to business people. During that time, his ideas about business changed. In Search of Excellence had accepted that in business, big was best. But in 1987, Peters thought that many businesses were too big. He believed that traditional companies suffered from too much central control and they employed too many people. In the past, the bosses of big companies had communicated with workers through middle managers. The job of a middle manager, said Peters, was really just to collect and control information. But that was now a job that could be done by a computer. Computers could allow ordinary workers to make more of their own decisions. If you were a middle manager in a large company, Peters was saying to you, ‘It’s time to find something else to do with your life!’

Once again, Peters found that his book was published at exactly the right time. The day it arrived in bookshops was 19 October 1987. In the financial world that day will always be remembered as Black Monday. On that day, billions and billions of dollars were lost as stock exchanges around the world fell by huge amounts. The message from the stock exchanges was clear: the world is a dangerous place. Peters’s message in Thriving on Chaos was clear, too: this book will help you to deal with the problem.

Events in the years after 1987 showed that many of Peters’s ideas in Thriving on Chaos were quite right. The speed of change in the business world increased greatly. Big business hit big problems. Computers became more and more important. And thousands of middle managers lost their jobs as businesses tried to become smaller.

In the 1990s Tom Peters’s ideas changed again. He said that managers needed to prepare for the changes of the modern world in new ways. Business was changing faster than ever before and he believed that traditional companies needed to learn lessons from the worlds of fashion, films, TV and computers.

He said that companies should be ready to change every day of the year. He told them they needed to be more like the US TV company, CNN. In the newsroom at CNN, careful planning was impossible. Every day, anything could happen. A war could start, a president could die, there could be a huge natural disaster. Just like CNN, said Tom Peters, every company needs to invent itself again every day.

He told businesses that they should be more like the companies of Silicon Valley, the area just south of San Francisco in California. Silicon Valley is the home of the world’s computer industry. It’s a place where people can make a billion dollars before they’re thirty. But it’s also a place where many people fail. But in Silicon Valley, nobody’s worried about that. They accept that you only learn to be a success by making plenty of mistakes.

He also admired Silicon Valley’s attitude to work. There, nobody expects a job for life. Companies come and go all the time and people are happy to move from job to job. They say that if you decide to change your job on the way to work in the morning, you just drive your car into a different company’s car park! So, in the future, will that be the situation for everybody in every industry?

Tom Peters would confidently answer, ‘Yes’.

Tom Peters is a hard man to describe. He’s probably the world’s most famous management guru and yet he says, ‘I attack managers for a living.’

He is a serious writer and thinker but he has appeared on one of his book covers without his trousers on.

He gives talks to some of the richest and most powerful bosses in the world and tells them, ‘Workers in the United States and England have been used like dog food for the past 150 years.’

So how do you really get to the heart of his ideas? As always, Tom Peters says it best himself, ‘Crazy times call for crazy people.’