Two weeks ago, I explored the importance of considering excellence and strategic coherence from a unified perspective.

Excellence and Coherence are necessary for the success of organizations.

This time, I would like to examine the question according to two key management books.

Let’s explore what the authors of "In Search of Excellence" and "Good to Great" had to say on the subject. The findings, you will see, are surprising for books written over 25 and 40 years ago! This shows how essential it is to know our management classics.

In Search of Excellence

In Search of Excellence, written by Thomas J. Peters and Robert H. Waterman Jr., is an influential management book published in 1982. It revolutionized management thinking by focusing on the common characteristics of the most successful American companies of the time.

Rather than proposing abstract theories, the authors studied a sample of companies deemed "excellent" by business experts and identified recurring traits that explained their success.

The book highlights eight main characteristics shared by these companies, the eight attributes of excellence:

1. A Bias for Action: They are action-oriented and implementation-focused, rather than over-analysis and bureaucracy. They "get things done."
   
2. Close to the Customer: They are obsessed with their customers, listen to their needs, and learn from them.
   
3. Autonomy and Entrepreneurship: They foster innovation and entrepreneurship at all levels of the organization, empowering their employees.
   
4. Productivity Through People: They treat their employees with respect, view them as a source of quality and productivity, and motivate them.
   
5. Values-Driven: They have a strong underlying philosophy and values that guide their decisions and culture.
   
6. Stick to the Knitting: They focus on their core competencies and avoid diversifying into areas they don't master.
   
7. Simple Form, Lean Staff: They have simple organizational structures and few headquarters staff, which promotes agility.
   
8. Simultaneous Loose-Tight Properties: They combine great autonomy in the field with rigorous control around a few central values and objectives.

The book emphasizes that corporate culture, shared values, and how employees are treated are more important than formal structures or technological resources.

"In Search of Excellence" had a huge impact on the world of management, prompting many companies to review their practices. However, it has also been criticized, particularly because some of the companies cited as "excellent" subsequently encountered financial difficulties, raising questions about the sustainability of these attributes and the complexity of long-term success.

This may echo Rita McGrath's “Transient Advantage” cited in "The End of Competitive Advantage," explored in episode 129 of our podcast.

"In Search of Excellence" is a foundational book that highlighted the importance of human and cultural factors in business performance. It provided a practical framework for understanding what distinguished the most successful organizations of their time.

Here are a few key points that are still relevant today:

• The importance of understanding the customer.
• The importance of innovation and a culture of collaboration.
• The consistency of choices to focus on strengths.
• The necessity of autonomy and agility.

Good to Great: Why Some Companies Make the Leap... and Others Don't

Good to Great: Why Some Companies Make the Leap... and Others Don't by Jim Collins is another very influential management book, published after "In Search of Excellence."

It stands out for its rigorous approach and in-depth research to identify the factors that enable "good" companies (average performance) to become "excellent" (exceptional and sustainable performance).

Collins argues that the main reason so many companies never become great is that they are content with being good. Complacency is a major obstacle to greatness. Good is thus the enemy of great.

As Roger Martin reminds us, it's not just about playing to play, it's about winning!

Collins' team conducted an exhaustive study of companies that successfully made the "leap" from good to great, comparing them to "comparison" companies that had similar characteristics but failed to maintain superior performance. The research spanned decades of data.

The book identifies a series of interdependent concepts that explain this transition to greatness:

1. Level 5 Leadership: These are leaders who combine deep personal humility with fierce professional will. They are modest, do not seek personal glory, but are fiercely determined to build a truly great company. They "look out the window" to attribute success to external factors or others, and "in the mirror" to take responsibility for failures.
2. First Who, Then What: Companies that make the leap to greatness focus first on getting the right people "on the bus" (hiring the right employees), then placing those right people in the "right seats" (right roles), and only then deciding on the strategic direction. If you have the right people, motivation and management problems are largely solved.
3. Confront the Brutal Facts (Yet Never Lose Faith): These companies have the discipline to confront reality, even if it is unpleasant, while maintaining unwavering faith in their ability to overcome challenges. They create an environment where the truth can be heard and where the "brutal facts" are put on the table.
4. The Hedgehog Concept: Inspired by the fable of the hedgehog and the fox, this concept invites companies to find what they can do best in the world, what fuels their economic engine, and what they are deeply passionate about. The convergence of these three circles must guide their strategy, avoiding dispersion.
5. A Culture of Discipline: This is not a rigid bureaucracy, but rather a culture of people who act with discipline, think with discipline, and are consistent in their actions. This includes respecting the "stop-doing" rule (what needs to be stopped).
6. Technology Accelerators: Companies that transition to greatness do not adopt technology for technology's sake. They use technology as an accelerator for their Hedgehog Concept, once they have defined what they want to do.
7. The Flywheel: Success does not come from a "miracle moment" or a single spectacular decision. It is the result of a series of constant and coherent efforts that accumulate over time, creating momentum. The process is often slow at first, but results accelerate over time.
8. The Doom Loop Trap: Collins also describes what happens to companies that fail to make the leap. They lack discipline, react without understanding, constantly change direction and never manage to build lasting momentum.

"Good to Great" provides a detailed framework and empirical evidence to explain how ordinary companies can become exceptional leaders by focusing on fundamental principles of leadership, people, disciplined thought, and action.

Although the work is subject to the same criticisms as Peters and Waterman's book regarding the longevity of organizations, let's point out these still relevant elements:

• The importance of a committed team, according to "first, get the right people on the bus."
• The focus on what makes the organization unique, what it does best.
• The importance of a culture of discipline, rigour, honesty, and consistency.
• The importance of discipline and consistency in execution.

The Complementarity of Excellence and Coherence

In both books, the importance of coherence between strategic choices and their execution is a central theme, although each book approaches it with a slightly different perspective.

Execution must be adapted to the strategy: agile and fast in "In Search of Excellence", disciplined and persevering in "Good to Great".

The coherence between strategy and execution is the key factor for success.

A brilliant strategy, poorly executed, is doomed to failure, and perfect execution cannot compensate for a poorly conceived strategy.

Successful companies are those that align their strategic choices and actions in a coherent and consistent way.

Eric L'Heureux

PS. We are in the process of migrating our English newsletter to Substack to better integrate it with the English version of our podcast. Stay tuned!

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