8 tested rules for having an excellent company

For the last couple of weeks, as I promised myself to do monthly, I read a book. I am not making a book challenge like Mark Zuckerberg, but I enjoy reading as part of my development. I hope you will enjoy this article, as a mix between what I learned from the book and what I felt to be applied on our business world.

I mixed my reading habit with the info needs that I had on working at my companies organizational culture. For me, it’s the hardest thing to build at a company, especially if that company is working for some years.


After several reviews of organizational behaviour and culture, I choose one that didn’t post itself as culture organizational book only, In search for excellence, written by Tom Peters and Robert H. Waterman, Jr. In my opinion, this not only a book, is a result, a report of years of research, interviews and other information. It has more than 30 years, but the principles from the book are still very very real. Over the years it sold over 3 millions copies, becoming one of the greatest international bestsellers. The authors are former consultants from McKinsey office based in the San Francisco, city where I look forward visiting this year.

I don’t want to bore you, so I will stick to the pattern, or framework discovered from this book. There are 8 key points that most of the successful companies keep on the highest level of importance. There are attributes of an excellent company. I will try to apply them and as soon as I will see with my own eyes the results, I will write another article. Enjoy them and I look forward seeing some feedback in the comments area.

*to be mentioned, that in every single principle I am talking about the successful or excellent companies.

  1. Bias for action
    Managers from this kind of companies are expected to make decisions even if not all the facts are on the table. The authors say that for most of important decisions, all the facts will never be in, or when they will be in, it will be too late.

    On average, according to the experiment of the authors, organisations with this bias for action culture, will outperform companies without such values.

  2. Stay close to the customer
    Companies whose organization cultures value customers over everything else, outperform companies without this value.

    My favourite quote from this book, and becoming one of my favourite in real life:

    The customer is a source of information about current products, a source of ideas about future products, and the ultimate source of a firm’s current and future financial performance.

  3. Autonomy and entrepreneurship
    Successful companies fight against the lack of innovation and the bureaucracy, usually associated with large size.
    They do this by breaking the company into smaller, more manageable pieces and then encouraging independent, innovative activities within smaller business segments.
  4. Productivity through people
    The most important asset of a company, is their people. It’s purpose is to let its people flourish, treating them with respect and dignity is not only appropriate but essential to succes.
  5. Hands-on management
    The senior or top management should be involved around the people of the company, on every level. Is not recommended to lead the company behind some closed offices, but to feel the business, live into it.
  6. Stick to the knitting
    Stick with the business that you know. Another cultural value of excellent companies is their repulsion to get into business opportunities outside their areas of expertise. These companies reject the concept of diversification, the practice of buying and operating businesses in unrelated industries
  7. Simple form, lean staff – sucessfull companies have few administrative layers and relatively small corporate staff groups. In these companies, importance levels are not measured by the number of people under a manager, but by the performance of its team. A manager over 5 person team could be more appreciated because its performance rather than the size of its team compared with the big ones.
  8. Simultaneously loose and tight organization – a contradictory attribute of a successful organizational culture. One the one hand, when they refer to a tight organization, is because all their members understand and believe in the companies values.
    On the other hand, referring to large organizations is when a company tend to have less administrative overhead, fewer staff members, and fewer rules and regulations. The result of this mixture of opposite directions is increased innovation and risk taking, likewise, faster decisions and response time.

These being said, it was my pleasure to read this very interesting book, made from real facts from real and successful businesses. Is my pleasure to share the information kept from this book and made this small book review. Soon, Business Book Club will be on again and I am looking forward sharing it there.

Till then,  I hope you enjoyed it and somehow is helpful.

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