In their 1982 book In Search of Excellence, Robert Waterman and Thomas Peters introduced the relationship management concept to the world. The men sought to integrate theory and practice — as a result, they created a set of principles to foster a successful organizational structure, built on employee engagement and active leadership.
Waterman’s management theory is most known for its eight key attributes of excellent, innovative companies. The eight points Waterman and Peters outlined were later adopted by the McKinsey 7-S Framework for business success, as each of the seven points starts with the letter “S.”
Three million copies of In Search of Excellence were sold within the first four years, and it is still widely used as a management science and leadership reference book.
Waterman’s theory, even decades after its publishing, remains one of the most well-regarded business management theory readings in any industry. Many of the principles have become best practices. The eight attributes outlined in the book are:
These eight principles were later adapted by Waterman’s employer at the time, McKinsey, into another framework for business success.
Many management theorists believed that adding parts of an organization would equal a whole organization, but Waterman and Peters knew a workplace needed interaction and synthesis to be successful – not mere addition. Since management theories have a huge impact on how managers manage, Waterman and Peters sought to integrate management theories and practice with human beings and organizations. [Read more: Human Relations Management Theory Basics]
Peters and Waterman knew that common management theories played an important role in how anxious or afraid people were in their workplace. Therefore, they developed a self-analysis tool for corporations to assess their standing, which often decreased fear and anxiety because corporations were in much better shape than originally thought. Discover the impact this team of theorists had on the working population, and consider using the theory today, with the following information:
Waterman’s management theory has clear applications to today’s world and business environments, offering a few distinct lessons leaders can apply to their own teams.
As evidenced by the title of his book, businesses can embody the spirit of excellence through Waterman’s management theory. Embodying this spirit doesn’t begin and end with the simple idea of “I want my business to be excellent.” Instead, it comes from setting high standards and having high expectations for a team, committing to continuous improvement, and prioritizing quality in every facet of a business.
Becoming an “excellent” business comes from applying Waterman’s eight principles to your own team, which means each leader’s application of the principles will differ in daily use. However, the goal of having lofty aspirations remains constant across teams’ industries, sizes and scopes.
Don’t force yourself or your team to master the eight principles immediately. Make sure you fully understand the theory behind each one before putting it into practice.
Waterman’s groundbreaking principles diluted complex theories into actionable principles, like putting both employees and customers at the forefront of a business to achieve success. While it’s easy to become entangled in numbers and lines of communication, Waterman’s principles demonstrate how straightforward it is to treat humans with respect, communicate their value and converse with them as unique individuals with something special to offer.
For employees, that means granting autonomy, providing support and offering training resources. For customers, it means valuing feedback to innovate the product or service they buy to keep you in business. [Read more about the management theory of Frederick Herzberg.]
Pursuing excellence means not only setting clear goals and expectations, but also following through on analysis to measure progress against important key performance indicators. Your team will not challenge itself to attain excellence by setting easily attainable goals, nor will your employees get the opportunity to innovate solutions to problems and challenges as they appear.
Innovation begets progress. The principle of “stick to the knitting” can be misconstrued as a direction to do something “by the book,” but it actually means inviting leaders to dig deep into their expertise. By committing to continuous improvement – and giving employees both a guiding value and the autonomy to create – leaders will foster an innovative environment that not only invites progress but creates excellence.
Waterman and Peters noted that strong organizational cultures yield strong companies. Organizational culture develops from shared assumptions, beliefs and values exhibited explicitly and implicitly. For a strong culture to emerge, there should be alignment with the organization’s strategic context and the ability to adapt to environmental changes.
As consultants for McKinsey’s New York corporate headquarters, Waterman and Peters began studying structure and people, which led to the discovery of similar outlines for excellent Fortune 500 companies. With this information, they developed the McKinsey 7-S Model to link strategy and organizational effectiveness; they effectively connected people, customers and actions as factors to study and develop.