What America Does Right

Mr. Waterman's book, based on findings of about 15 years ago, has its inspiring moments. However, one is apt to wonder how well the organizations he singles out for praise have prospered. Chapter-by-chapter, the book reviews Procter & Gamble (PG, Ch. 3 and 9), P.S. 94, Bronx, NY (government, Ch. 4), Steadman Hawking Clinic, Vail, CO (private, Ch. 4), Federal Express (FEDEX, Ch. 5), Applied Energy Systems (AES, Ch. 6), Levi Strauss & Co. (private, Ch. 7), Rubbermaid (NWL, since 1999 Newell Rubbermaid, Ch. 8), Merck & Co. (MRK, Ch. 10), Motorola (MOT, Ch. 11) and Apple Computer (AAPL, Ch. 12). Of these examples six have been public companies under the same organization since Mr. Waterman did his research in 1993. Their stock performance, based on adjusted exchange closing prices for September 30, 2008, and September 30, 1993, follows: . . . . . 2008. . 1993. . Rate PG. . . 69.69. 41.91. . 3.4% FEDEX. 18.50. 13.55. . 2.1% AES . . 11.69. . 7.42. . 3.1% MRK . . 31.56. 41.60. -1.8% MOT. . . 7.14. 10.10. -2.3% AAPL. 113.66. 10.36. 17.3% S & P. 1213.27. 995.97 . 1.3% A 1993 investor who bought and held the stocks would have made money on four of the six and lost money on two. Mr. Waterman's approach did not always identify potential for financial success, but it pointed to more winners than losers. The average rate of return for the six public companies he praises is about 3.6 percent or nearly triple the aggregate S & P 500 index return over the period. This average return, alas, is in line with money-market earnings over the period. In light of this history, did Mr. Waterman underplay inertia at Motorola and Merck? If he performed a new set of reviews today, could he identify potential for success more accurately?

I should start to confess that I am probably biased, as I have in my entire career been a strong believer in empowering people. Not only, because it is a very efficient way to operate a business, but I am convinced it is much more fun working in such an environment. Reading this book of Robert Waterman has been very inspiring to me. I was in the middle of a major restructuring unit I was leading at that time, introducing empowered teams. This book helped me going forward. It gives great real world descriptions of companies that in some way have been successfully in introducing elements to "put their people first". I was much inspired to bring in new elements in our own organization, which helped empowering the employees and improve the organization. The book is very easy to read and very attractive because it provides lively in-depth descriptions of what is going on in these organizations. It really provides you with the opportunity to judge for yourself what elements you like and might fit in your own organization and management style. I recommend reading this book, as it is one of the few books that really give you so much inspiring information. Even though it has been written in the first half of the nineties, I still use the stories in this book to inspire my customers and me today.

This book is a nice, contemporary follow-up to In Search of Excellence by that book's co-author (the European edition was entitled Frontiers of Excellence). The author uses fewer examples and studies them in more depth; the result: a wonderful guide for emulating the best of the best in management and leadership. The author elaborates on what motivates people, especially employees and customers and relates an organization's ability to match these needs to the organization's long-standing success. Putting all constiuents (employees, customers, community) on equal footing with shareholders, he says, is crucial.