Tom Peters knows what makes businesses great. Since co-authoring the 1982 management classic In Search of Excellence, Peters has devoted his career to highlighting what separates companies that excel from those that fizzle, (He’s done so to great personal success; the man has sold more than 10 million books). He’s been lauded as a management guru whose ideas are irreverent as they are important.
Ahead of his October 20 appearance at the 2016 GREAT CEOs Speaker Series in Mississauga, Ont., Peters discussed the value of short-term thinking, the beauty of mid-sized businesses and what leadership should look like today.
PROFIT: Let’s begin with the basics: How do you define excellence in business today?
Tom Peters: I give so many speeches I fear I respond to real humans like you with slogans, but my slogan du jour is that excellence is not a long-term aspiration; it’s the next five minutes, or not. As far as I’m concerned, right now, the only damned thing I have in my life is an interview with you. If I don’t put my heart and soul into this, what am I doing?
Excellence is the ultimate short-term aspiration. It’s the next customer contact or the next interaction the manager has with someone in the hallway, and it can’t be defined by metrics. Everyone puts metrics on everything today. Now, I’m an engineer with an MBA, so I’m a numbers guy. But excellence is ballet—when you finish watching a ballet, if it’s a fabulous experience you’ve seen grace and extraordinary human performance. And that will end up in more people showing up for the next ballet, and more money and profitability for the organization. It’s about soft stuff. Anyone can fake the numbers, but you can’t fake the relationships.
How do you square that imperative to pursue excellence in the immediate term with the responsibility business leaders have to think big-picture?
I live in Greater Boston, and before that I lived in Vermont for 20 years, but the essence of my life and career—the reason we’re having this conversation—are my Silicon Valley years. One of the big words in Silicon Valley now, which I despise, is scaling.
Scaling is fine if you have something excellent to scale. But just because you and a few pals came up with a clever idea over a second six-pack of Labatt’s … doesn’t mean you should be able to go to a VC tomorrow and say you’ll have 17 million customers in five years. I’d rather see you have 2,000 customers that are incredibly turned on by the very cool work that you do.
I think the cart is a bit ahead of the horse. The number of people who go to a VC, or who even do crowdsourcing online, and end up with $ 500,000 or $ 2 million, is a damned small number. All those bloody Silicon Valley unicorns, we could get ’em all into my hotel room. They are not the world.
So you believe entrepreneurs should think less about taking over the world, and more about doing great work now. What does an excellent company of this type look like?
I don’t know your numbers in Canada, but let me be so bold as to presume they’re similar to ours in the U.S., which is that 85% of us work for enterprises with fewer than 50 people. Only something like 7–8% work for the Fortune 500.
The role models should be the Germans. The Germans are not Siemans or Commerzbank. What they are is mid-sized companies of 50 or maybe 500 people who own a global market. You know when a movie production is being done, there are those weird long cranes with a camera on them? We ran into the company that made those. They have 200 people on the payroll and an 80% market share. I love companies like that so much, I nearly tear up.
For a lot of leaders, sweating the small stuff doesn’t come naturally. Do you have any advice for how they can train themselves to focus on excellence in the here and now—not the future?
Yes! And I promise I won’t talk about vision and authenticity. One guy left a wonderful tweet some time ago. He asked, ‘What are the most important words in any organization?’ The answer is “What do you think?”
The minute I ask you what you think, I’ve wildly empowered you. Assuming my body language is right, I’ve said, “Deborah, you’re really important to me, and I want to know what you think.” It’s a little thing, but it’s a big thing.
When we were writing In Search of Excellence, we went down to a mid-sized company in Palo Alto that’s reasonably well-known these days as Hewlett-Packard. We talked to the president, and he introduced us to this idea of MBWA: managing by wandering around. If you’re running a distribution company, you build a culture by talking to people at the warehouse at 3 am, by getting to know the Deborahs and Jeans and Bobs, getting an understanding of what’s going wrong with them, and whether they buy the act.
When you say, “This is a place I care about. I really want to know what you think. We have all these damned strategies at headquarters, but do any of them make sense to you at 3 am? Or are you cutting corners?” it creates the kind of intimacy, and makes a company worth working for.
You’re a vocal advocate of addressing the gender imbalance in leadership positions. Why do you believe women make better bosses?
The starting point for talking about women in leadership positions is that women buy everything. That’s a literal, not a figurative, statement. When we’re talking about consumer goods—these are numbers primarily from Canada, the U.S., New Zealand and other such markets—women are responsibile for 80-85% of purchases. Also, in the U.S., more than 50% of our purchasing officers are women. It’s likely to be a woman’s name at the top of a 10-year software request for proposal. So women do the majority of the buying in both consumer and commercial transactions.
I have a term I call the squint test. I’m not interested in quotas, but when I look at photos of the executive team, and I squint, the team ought to look more or less like the market. That means there should be a lot more women there.
Second, the organizations of tomorrow will be a hell of a lot less hierarchical than those of today. In general, women tend to be more indirect, and are able to deal with ambiguity and uncertainty better than men, who get off on hierarchy. Women don’t just count the stripes on the shoulders like my old days in the navy.
Third: Sorry boys, but the hard numbers are that women are better negotiators than men—they tend to be better at getting inside the heads of the other party. And women are proven to be better investors than men. Then you have hard-nosed profitability stuff. I worked for McKinsey for eight years. A McKinsey study of effectively gender-mixed boards found that when the gender mix was good, the companies were 56% more profitable.
If you look beyond the surface, people who are getting the gender mix right are probably doing a lot of other stuff right. So, getting more women into top roles is hugely important for immediate bottom-line reasons, and hugely important because the world doesn’t look the way it did before.
Tom Peters is speaking on Business Excellence in a Disruptive Age on October 20, 2016 in Mississauga, Ont. as part of the 2016 GREAT CEOs Speaker Series, sponsored by Canadian Business. Tickets to Peters’ talk are available here.