In 1982, Tom Peters and Robert Waterman wrote the book In Search of Excellence. The book presented case studies of businesses that were thriving and outlined eight principles of how to lead and build businesses effectively. The book—which debuted when the United States economy was ailing and American businesses were in desperate need of management help—flowered into a full-grown movement, a business big bang. Business leaders had lost a sense of the value of innovation, of integrity in mission, and how to create a thriving business culture. In Search of Excellence helped business leaders to reorient.
The book gave Peters a platform for critiquing ideas and business models that had been getting him “pissed off” for over a decade. He had become increasingly incensed about the prevailing approach to business management during his work as a consultant at the firm McKinsey, where he had been since 1974, and in the research he had done prior to that for his PhD in organizational behavior at the Stanford Graduate School of Business. Following the success of the book, Peters became a management guru nonpareil, the A of the A-list in the management consulting world.
Part of his impetus in writing In Search of Excellence was his certainty that a business—much less an economy—couldn’t be assessed through the lens of the numbers and statistics that business leaders, consultants, and economists would often obsess over, to the detriment of other aspects of what makes a business—or a brand—sing. Businesses couldn’t be led through a top-down, autocratic strategy that didn’t allow for innovation and the vital contribution of the people in the organization. Customers needed to be acknowledged and revered. Emphasis needed to be placed on true innovation and on making quality products.
The overobsession with numbers remains one of Peters’ main critiques and an issue that, as he says, still pisses him off. His point is that there is a lot of psychology involved in both business leadership and in the brand choices we make as individual consumers, and the numbers don’t reflect any of it.
Brand, too, is one element of a business that remains beyond calculation, that can never be fully conveyed or explained. Part of Peters’ work, of course, is brand consulting, and he offers up some important thoughts about what brands mean in the contemporary day and age. He emphasizes the importance of design and considers the connection between brand and “story.”
Speaking of brand, Peters is well-known for coining the idea of “Brand You,” a catchphrase concept that has earned him both devotees and enmity. His identification of the individual as brand was a recognition of cultural trends that had seemed to reach an apotheosis in the ’90s. Brand thinking had become pervasive, as had the use of media as a form of personal expression and business tool alike. In our conversation, Peters bemoans the fact that the “Brand You” idea is often misinterpreted. It is related to the concept of the individual as brand, yes, but it is not the narcissistic raison d’etre that some critics say it is.
Peters has a lot to say about brands, history, innovation, and management. He has an irrepressible energy, and he’ll segue from Quaker Oats to Deng Xiaoping, from Gutenberg to containerization. He is very happy to ruffle feathers, and he is not one to censor himself. Tom himself embodies that healthy—if animated—mix of rationality and irrationality that he sees so lacking in others.
He has continued to write, offering his pointed views on business and strategy in books like The Little BIG Things: 163 ways to Pursue Excellence, Liberation Management, and Thriving on Chaos. As much as he has assailed the downsides of corporate culture, he has continually advocated for the collective good we can accomplish. “An enlightened view of any profession can result in a potentially significant contribution to society,” he says.
I was recently reading an article about Snooki, the 4’9” star of MTV’s Jersey Shore. Apparently she’s hoping for a career beyond the reality show, and she is trying to set herself up as a brand.
Jesus.
I’m wondering what your thoughts are about the “person as brand” phenomenon. I think the idea comes from your late ’90s Fast Company treatise about “the brand called You.” Not that I’m assuming that Snooki has read or been influenced by it . . .
Oh, I’m brokenhearted. [Laughs.]
I’m trying to picture her with an issue of Fast Company from the late ’90s.
Alan webber and Bill Taylor started Fast Company, and I was a supporter. I was a supporter long before it actually became a magazine, when it was just a dream.
Well, there’s no question you helped put the publication on the map.
Well, I don’t know about that. I think it was a perfect fit for the ’90s. I always saw it as a response to a changed economic reality. And of course, there were social commentators like Dinesh D’Souza who said Seinfeld and I were emblematic of everything that was wrong with the ’90s. Now, don’t get me wrong. I was delighted to be considered a cultural icon and mentioned in the same sentence as Seinfeld. But it really bugged me, because he missed the point.
Why did it bug you?
It bugged me because it suggests that Brand you was a product of a me-centric, egocentric world gone awry. I would never for a minute deny that when you’re thinking about Brand you, you’re thinking about yourself in the world. But my point was that it has developed ten times more as a result of the outsourcing of human labor and the use of modern software, which replaces human labor. People like my father, your father, and people who worked in the tall towers of Manhattan and Chicago were fundamentally—except by their three closest friends at work—not known by their name. They were known by their badge. You used to be able to survive as “Badge 129” in the purchasing department, as long as you came to work regularly and didn’t rock the boat. That was the survival tactic.
In the post–World War II environment, thanks to the GI Bill—which I think is one of the most enlightened pieces of legislation ever passed—you were able to get a college degree from a good school. You were a reasonably intelligent human being. You were not necessarily hardworking, but you were not not-hardworking, and you were a reliable person. That was enough for lifetime employment. That is gone.
In today’s environment, you’ve got to stand for something. You might not have to do this if you’re a nineteen-year-old shift manager at McDonald’s, and we certainly aren’t talking about those folks who are working at Google. But the guy who was the faceless person in the faceless purchasing department is either going to be outsourced to India or outsourced to software. The great race is between the two. To stay employable today, you’ve got to have some sort of signature. It pissed me off that Brand you was simply seen as a younger generation’s deterioration into egocentrism. Look, I’m not an idiot—I’m not advocating narcissism. But it’s true that you’ve got to think more about yourself now. But let’s explore this further, because there is a paradox to Brand you.
Yes, you have to think more about yourself and how you’re positioned, but you can no longer survive by sucking up anymore, because the boss you were sucking up to has been laid off. Now you’re more dependent than ever—by reputation and otherwise—on your horizontal network of peers. Now you have a national or international group of people, for whom you’ve done good and reliable work, and this group has become your professional family. So you have to have a greater degree of loyalty to your peers and be a significant member of a group more than you ever have had to before. So it’s a paradox. You have to think, “I’ve got to be more ‘me,’ and I’ve got to be more of a thoughtful member of an extended family than I was before, because solo doesn’t survive either.”
Writers are probably one of the few professionals who have always had to depend on horizontal reputations. You’ve had to take care of relationships with the guy who gave you the opportunity to do your prior book, or the person who knew you when you were working at the Spokane Herald and then recommended you to a job at a better paper. I’m arguing that the person who wants to be a purchasing professional now has to depend on horizontal reputations as well.
Do you think that people really aspire to be purchasing professionals?
Read David Foster wallace’s The Pale King, and you can find out whether IRS agents want to be professionals or not. I think they do.
If you’re really good at something, your obsession can become societally useful.
Presumably, if you’re a purchasing professional at Safeway or at Deloitte & Touche, and you’re a rabid believer in environmentalism or global warming, you can use your purchasing job to demonstrate to your company that if you buy green products, you’ll not only be building a better relationship with your consumer, but you’ll be helping your company and yourself in the world. An enlightened view of any profession—even the job of a prison guard—can result in a potentially significant contribution to society. We can’t all be writers and management gurus, for God’s sake.
Speaking of management gurus, The New yorker has often been quoted as saying, “In no small part, what American corporations have become is what Peters has encouraged them to be.” I have two questions about this statement. First, what have you encouraged them to be? Second, what do you think you’ve encouraged them to be?
[Laughs.] And the third question you need to ask is this: “After the great crash, is that a recommendation or a condemnation?” And I’m not sure which would be the correct answer.
Do you really think what you’ve encouraged them to be was the reason for the crash?
[Laughs.] No, neither my arrogance nor my selfabdication is that extensive.
The book In Search of Excellence was researched in the late ’70s and published in 1982. Having lost World War II, the Japanese were in the process of winning World War III by knocking out our car companies, our shipping companies, and so forth. The Carter-era recession/depression—which at the time was considered as bad as the economic situation could get—brought on interest rates of 20 percent, inflation of 15 percent, and 11 percent unemployment. These numbers were worse than what we currently have. And then we had the Reagan revolution.
The fat cats always took businesspeople seriously, but now “regular” people started taking business seriously. In Search of Excellence was one of the first business books to move from the back of the bookstore to the front of the bookstore. It not only became a best seller, but a top best seller. In many ways, it spawned a whole generation of authors who are now sitting at the front of the bookstore.
The timing of the book was perfect, but my coauthor Bob waterman and I had no way of knowing that. We spawned everything—including Brand you-ism—among professors at Harvard and Stanford, in Chicago and wharton, as well as a jillion other places. All of a sudden, there was a movement to think about organizations more self-consciously, and that happened to coincide with a situation where we were getting nailed by the Japanese on the basis of quality. The emerging movement meant that people were thinking. Because the ultimate “quality logic”—the reasoning that relates to quality—is if you have the desire to improve the quality of something, that’s a noble intention in and of itself. But if you’re really going to improve quality, then you have to pay attention to your workforce—whether you’re managing a retail bank branch or an automobile company. Organizations became a bit more people-centric. Another important influence was when significant computerization began to further influence our behavior, and suddenly you didn’t need seven levels of management.
So if there is—and I’m not necessarily willing to acknowledge this—but if there is a postmodern corporation, I and two hundred people like me in the “talker business” and two hundred people like me running consulting companies have benefitted. But even if we can’t conclude that there is a postmodern corporation, we can certainly say that something did happen, and despite the many remnants of hierarchy, it’s arguably something that’s different from the organizations we had in 1947 or 1957. So yes, I will acknowledge that I became associated with this movement more than most people, though I will not acknowledge having contributed more than a whole bunch of other people who were also involved. It was truly a community of us who, for better or worse, made the contribution. When I say this, there is no false humility at all. There were suddenly dozens, hundreds of bloody business books, good, bad, and indifferent that were housed on the front shelf of Barnes & Noble, or the late Borders, or wherever.
Why do you think In Search of Excellence changed business so much? What was it about that book that has resulted in a magazine like Fortune saying, “We live in a Tom Peters world”? Why?
As a reasonably good student of the history of innovation, I can tell you that timing is everything. Period.
A lot of people have ideas that are ahead of their time, but as we say with the introduction of a new product, there are “three times”: too early, too late, and lucky. I was lucky. I really believe that. I don’t believe that there is a lesser or greater number of interesting ideas now any more than in the era of the railroads, when we were making such phenomenal breakthroughs.
Really?
Look, there are shelves and shelves of books with titles like Empire of the Air, which investigate the radio equivalent of the Internet age. I’ve got ten books on the transcontinental railroad and railroads in general, and the stories are hilarious. If you read the commentary of the people who were around then, you can find out about the guy who rode halfway across the Midwest on a train and described how his head was swirling and how things were too fast and the world had come unglued. He actually didn’t think his head worked anymore.
I read that after the railroad was invented, people thought that if you travelled faster than forty miles per hour, the pressure on your body would be so intense that you would break up or explode.
Absolutely. In thinking about railroads, another thing consistent with today is how one invention spawned a plethora of ancillary innovations that wouldn’t have been possible otherwise. Two of the great breakthroughs inspired by the railroad were the invention of standard time, or time zones, and the invention of the bill of lading. Before that, people didn’t know how to ship goods across the country and keep track of them. And suddenly we were able to ship jillions of tons of things and know exactly where they were. I also find the history of containerization to be absolutely spellbinding. There are always going to be some things that every generation tends to think is unique only to them. But the railroad changed war, peace, technology, enterprise, and families. When the railroad came to England, the Duke of wellington—the guy who won waterloo—said, “We should not leave the railroads untrammeled, or the hoi polloi will be racing around the country.” Can you imagine? wouldn’t that be terrible? That’s just as bad as the bloody Chinese shutting down the Internet, for God’s sake.
It’s fascinating to look back over the trajectory of innovation and invention. What can seem like a minor contribution can ultimately have a tremendous impact on the way we live. Look at the plastic bag. I was recently reading an old Harvard Business School case study about the 1974 disposable diaper wars between Kimberly-Clark and Procter & Gamble.
Back in the day, you had to dispose of what was in a cloth diaper by flushing it down the toilet. It was unsanitary to put it with other household trash because paper bags couldn’t contain the excrement, and it was against the law to put it out on the street for garbage pickup. I find it so interesting that something as benign as a plastic bag can change the way we sanitize, the way that we handle our infants, and the way we reduce hazards to our health. It’s extraordinary.
I just read an article suggesting that Gutenberg’s printing press was not that big of a deal. The big deal was the industrial production of paper so that you could use the damn press. We went a long way from the monk’s parchment to the availability of paper for the hoi polloi.
But this brings us back to my point about luck. There were probably at least fifty well-formed iterations of containerization, but there was no place to unload the containers. It wasn’t until you invented and built the infrastructure that suddenly the container could change the world. But who’s the person who invented containerization? we have no idea who it is because nobody cares.
It reminds me somewhat of the current state of the rock ’n’ roll business. These days performers aren’t making money from ticket sales. They’re making money from merchandise. So now a rock band goes on the road to sell T-shirts.
The way I read the situation, they started making money from ticket sales when they stopped making money from records and CDs. Now we’re at another iteration of that: The ticket sales are irrelevant and the rock star branded T-shirts are relevant.
So branded merchandise is fueling the music business. Why do people care about branded items? What do you think it does for the human psyche?
One part of it—which is less relevant today than it was in the past—is once they got connected with companies like the Unilevers and the Kimberly-Clarks and the P&Gs, a brand was a guarantee of reliability. This did not exist in my grandfather’s store in rural Virginia. Have you read Thomas Hine’s book on packaging? One of my favorite examples from his book focuses on Quaker Oats. Hine talks about how, in 1870, oats were something you fed to an animal. And suddenly, you had a cardboard box with a Quaker on the outside, and oats became a human delicacy—due entirely to packaging—in the short space of twenty years.
First, branding was about safety and reliability, but let’s also acknowledge that human beings are an emotional species. I was in China for the first time in 1986. As soon as Deng Xiaoping took the lid off of regulation, women went from wearing gray, shapeless Mao jackets to sporting colorful wardrobes nearly overnight. This need to express our individuality and vibrancy is obviously a fundamental, basic human need.
Why do you think it’s a basic human need?
I have no idea. It may be that giraffes are colorblind, so they have patterns on their bum that other critters don’t. I assume at some point, in some sense, it’s a version of peacocking. I assume that there was probably an aspect of Darwinian selection to it. My bet would be it has something to do with this, though I do have a proclivity for being fairly Darwinian in my beliefs. Frankly, I have no idea what the history is.
Let’s assume that we are hardwired to want to be attractive to each other for some deep-seated procreational need. How is this connected to oats transforming into a delicacy when the food is put in a package decorated with the image of a Quaker?
In Darwinian terms, we’re suckers for stories. Stories are the way that humans have always communicated. The Quaker Oats box is not only visually attractive, but it’s a story.
Since Aboriginal times in Western Australia—and I’m sure if one goes back thousands of years, or hundreds of thousands of years before that, you’ll find the same dynamic—a good story has always been a good seller. A brand is a story. Period. Frankly, I would rather dump the word “brand” and use the word “story.” I think we’re in the process of wearing out the word “brand.” At some level, when I’m a brand, I’m more commercial. When I’m a story, I’m more human.
So what do you think the Quaker story was at the turn of the 20th century?
I presume that—to your point with plastic bags and diapers—as late as the beginning of the century, sanitation sucked. The pharmaceutical companies should get none of the credit for our life expectancy going from fifty to seventy-five during the 20th century. The two things that account for 90 percent of this improvement are sanitation and diet. So here comes a cereal that’s reliable and clean and that you could buy for your dearly beloved children without any fear they would get sick when they ate it.
How was the Quaker telling that story? What did the Quaker represent?
Doesn’t a Quaker, in theory, stand for reliability? If it’s good enough for a Quaker, then it’s got to be good enough for my little Martha.
One of my favorite stories revolves around the Morton Salt Girl. She is all about metaphor. Morton chemically alters a salt crystal so that it won’t stick to other crystals when it’s wet or humid outside. The Morton Salt Girl is holding an umbrella while the salt is pouring freely. So when it rains, the salt pours. But you don’t have to read a word—it’s all expressed by a visual puzzle that you have to figure out. I think this is why people like it so much. People love puzzles—they feel better about themselves when they correctly figure them out. That’s why people like the “I ♥ New York” logo so much. It’s a puzzle made out of a word, an abbreviation, and a symbol.
I remember reading an article about a social psychology experiment relating to this and being totally unsurprised, as I imagine you would be. Two sets of subjects are given two lists of the same words to memorize. One of the lists is of the words “farm,” “basement,” “bar,” and so forth. The other list is the same, except that random letters are left out, so instead of basement, you’ve got B-A-S, underscore, M-E-N-T. In terms of subsequent recall, the people who had the list with missing letters outperformed the people with the full words by a dramatic margin. Cognitively, you had to work your ass off, so it stuck in your mind.
Yes, the experience of figuring out the words creates a deeper neural pathway in the brain.
It’s extraordinary the way the brain works . . . I hate economists.
Why? Why do you hate economists?
Because they’re impersonal bastards. They believe in the rational model, which makes them dumb. When the great recession of 2007–2008 descended upon us, it was not an economics issue. It was a psychology issue.
How was it a psychology issue?
The behavior that got us there was herd behavior. The government has convinced people of the emotional need to own a house. If you look at the economics studies, in many respects the housing market doesn’t go up all that much over a long period of time. There are a million studies that will tell you that renting makes more sense than owning. But psychologically, owning a piece of turf is incredibly important. So I understand why people—who had no money and were given the chance to borrow money—were total suckers for it. And I use “sucker” not in an abusive sense, but in a realistic sense. Then again, you’ve always had herd behavior on wall Street.
They’re now saying Silicon Valley is the “green” crash. The current punch line is that any human being, including you and me, can put together a business proposal tomorrow morning. And as long as we use a computer and include the word “green” a sufficient number of times in our proposals, the venture capitalists will be showering us with money by dawn the day after.
I’m obviously using hyperbole, but that’s where we’re seeing more of this herd behavior. In terms of the rational-mindedness, I’ve trained in that. I was trained as an engineer, but now I’m a reformed engineer, a “born again” engineer. The reliance on rational models—or models in general—to me, makes economists highly suspect. I don’t believe anything they say. That is very close to not being hyperbole. In the 1970s, when I was getting my PhD, my classmates and I read books by psychologists Amos Tversky and Daniel Kahneman. Tversky and Kahneman invented “behavioral economics.” This is the hottest branch of economics right now, the “Freakonomics” branch.
Kahneman won a Nobel Prize in Economics, but he was a social psychologist, period. I am royally pissed off that these effing economists have appropriated psychology and now call it the coolest thing in economics. Screw them. These straightlaced, rationally thinking economists have appropriated social psychology, and it pisses me off for reasons that are totally childish on my part.
Why childish?
Because it’s stupid.
I’m delighted that the irrational realities are beginning to seep into economics. The rational me is delighted that irrationality is seeping into the rational profession, because maybe they’ll get some things right.
Look, I have a very strong smart-ass streak. I have learned to be “appropriate” and politically correct on many scores over the years. To the extent that I must, I guard my “smart-assery” when I’m giving speeches to middle managers from financial services companies. But the smart ass lurks no more than one glass of chardonnay below the surface.
I’ll remember that when I need to get your honest opinion on something. In the past, you’ve said, “Design is so critical it should be on the agenda of every meeting in every single department in the business.” Why do you believe that?
The term I’ve used for twenty years—and maybe I stole it from somebody or maybe by the grace of God they’ve stolen it from me—is “design-mindedness.” Design-mindedness is about bringing an aesthetic dimension into a discussion of anything. I am a great fan of Carly Fiorina. A lot of the reason was that she—kicking and screaming—brought a design aesthetic to Hewlett-Packard. I know this because I lived next door to Lew Platt, Carly’s predecessor, in college. Prior to Ms. Fiorina, Hewlett-Packard ranked 200 on a list of 199, in terms of design sensibilities. When she left, they were a significant consumer goods company, and that was Carly, pure and simple. When they gave her successor, Mark Hurd, the credit for having a great design team, it made me want to barf. Carly was not a good chief operating officer, and she probably needed to be let go at some point. I don’t deny that for a minute. And she had an ego that was a little bit out of control, and I don’t deny that for a minute either. But she brought about a cultural change at Hewlett-Packard, which makes the work that Lou Gerstner did at IBM and Jack welch did at GE look like chump change by comparison.
Do you think that anything can be successful now without being highly positioned?
Yes.
Really?
Well, we obviously would have to spend the next two weeks defining “highly.” As the ethos of quality that began to bubble up in the United States during the 1980s took root, the major fast-moving consumer goods companies started having significant problems going up against store brands. Once store brands became reliable, they began to market and brand themselves. Then wal-Mart came along, and the average American started saving something like $900 a year, which isn’t small cookies for people making $45,000 annually. The things they’re buying at Wal-Mart might be much less sexy, but as long as they’re quality products, this is perfectly acceptable. The recession obviously has pushed people even farther toward this model.
Look, I own a Subaru. I own a Subaru because they’re perfect for Vermont. But the quality revolution has taken such root that, in terms of quality, I’m probably just as well off with a Kia as I am with a Subaru or a Mercedes.
Do you really think that the quality is that comparable?
Yes.
So it is really just branding and positioning?
Well, branding, positioning, and people who like to have sex with their car. The electronics in BMW and Mercedes cars allow you to do a whole lot of things that you really don’t need to do. But in terms of a vehicle that can travel thirty thousand miles without ever having to go into a shop, I would bet that a Kia is very, very close to these other brands.