For the past four decades, management guru Tom Peters has examined the qualities of exceptional organizations, from leadership, hiring practices and innovation, to the use of technology, the execution of marketing and the ways strategies are developed. His first book, In Search of Excellence – Lessons From America’s Best Run Companies (1982) is widely considered to be the best business book ever written.
His most recent book, The Excellence Dividend (2018) continues to preach the gospel of putting people first, having a culture that is obsessively committed to the customer, and adding value to generate revenues. And, despite all of the change that is occurring as a result of COVID-19, Peters believes more than ever that, “Excellence is a human-driven affair – a state of mind – and not a computer-generated algorithm.”
Peters believes that the best and most respected leaders shine the brightest during times of crisis. Not relying on a crisis management plan, the best managers surround themselves with the best people and provide a platform for growth for those within the organization. As a result, moving to a work-from-home environment should not disrupt an organization, but simply change the environment from where work is done. In all industries, especially banking, those institutions that have the most-respected leaders will be the winners.
I was very fortunate to be granted an exclusive interview of Tom Peters as part of the Banking Transformed podcast. I’ve been a raving fan of his writings over the years, having many of his heavily dog-eared and highlighted books autographed decades ago. His perspective on what it takes to be a leader and how to guide an organization through change is as important today as it was 40 years ago.
The following is an excerpt from the great discussion we recorded for the podcast.
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What has changed in the qualities of a successful leader and organization?
Peters: Everything — and nothing. The message in my first book was “people first.” And the message today is still “people first.” My argument is that, as artificial intelligence grows more and more extraordinary, those who are going to be able to continue to humanize things are going to be winners.
For instance, USAA has the best call center in the history of humanity. And, despite being a huge company, they answer on the first ring. So, anybody who tells me that kind of stuff cannot be personalized, my response is that’s a load of crap.
I once was on the line with a call center rep from USAA talking his ear off when I realized I was impacting his efficiency. He told me, “Our first and foremost requirement is to build the relationship with you. And so, yeah, if we talk all day, I’ve got a problem.” But he said, “They’re delighted when you and I BS for five or ten minutes.”
So, even though they are a very, very, very big institution, they continue to show that “being human” can be done.
So, is it a combination of ‘soft skills’ and technology?
Peters: Google found that there were eight attributes of best employees identified. Seven of them were “soft” stuff, and number eight on the list was the STEM (science, technology, engineering and math) stuff. They also found that the most innovative teams were not those made of people with the highest IQs and the best degrees. It was the teams filled with people who listened, shared and had empathy for each other.
When I heard about their study, I loved it. I started weeping when I read the study. And you don’t know me personally, but that is almost the truth.
What do firms today need to do to be prepared for the future?
Peters: The two most important things that you do in an organization are hire and promote. And if you want to focus on the soft stuff, hire it. The number one hiring criteria for some of the best leaders is to hire people who are nice. Remember, there are a lot of people who have great degrees. Just don’t hire the jerks.
Bo Schembechler, the great coach from the University of Michigan, said that his secret to success was, “We never recruited the hot shots. We looked for good people.” And he said, “The other thing about recruiting people like that is they had much better after-football lives.”
Bottom line, hire and promote “good” people.
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Has COVID-19 been a ‘Great Reveal’ of organizations that are getting it right?
Peters: David Brooks, the New York Times columnist, once wrote, “There are two kinds of success measures. There are resume successes and there are eulogy successes.” He continued, “Resume successes are that you had a 4.0 grade point average at MIT. The eulogy virtues are, he was really a great guy and he really helped people.”
I have yet to see a tombstone that said, “Joe T. Jones, net worth at the time of death $9,372,842.14.'” You don’t put net worth on a tombstone. You talk about what kind of a human being the person was. It’s the same with business organizations. How much do they serve their community?
If you are incredibly engaged in your community, you’re going to end up with customers who are more attached to you. And you’re going to end up with a better balance sheet and a better P&L. If you do the people stuff right over the mid to long-term, you’re going to have to have big burlap sacks to carry the money to the bank.
How should smaller organizations compete with the big banks?
Peters: Despite all of the technology advantages and capital advantages and cost of compliance disadvantages, I believe there is still a market for what I call “extreme humanization.” In other words, the ability to really focus on the humanization aspect of doing business is going to continue to be a winning strategy and a differentiating strategy.
There’s a comparison that I like, and it is AI versus IA. AI is artificial intelligence, where you replace people with software. IA is “intelligence augmented,” where you use the software to help people be able to give the kind of customer service that will continue to attract human beings.
How do companies become ‘more human’ in a remote work environment?
Peters: Part of the answer is we don’t know because we are truly carrying on a very, very large scale experiment as we speak. I think we’ve got an enormous amount to learn about socialization and teamwork and innovation. Innovation is not a one-person game. Innovation is a team game. I believe that’s going to require leadership that focuses on humanization, even if the humanization is delivered through the most extraordinarily sexy software known to humankind.
However it is delivered, delivering more and more humanized experiences is going to continue to be a winning strategy.
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You have become a major advocate for more women in management.
Peters: It is a women’s world, period. There is a ton of research that says that women leaders are more effective than male leaders. And women leaders tend to do these very, very strange things, like listen before they open their mouth. I’ve been obsessed with the women’s issue since 1996 — which was too late.
For 15 years, I did not talk about women as better leaders. What I talked about was that women were not a significant part of the marketplace … they were the damn marketplace. Women make all the family healthcare decision. Women make all the family financial decisions. In fact, $22 trillion of wealth will come under the control of women within the space of the next five years.
Moreover, women purchase somewhere in the neighborhood of 85% of all consumer goods. In addition, women now constitute well over 50% of professional, commercial purchasing officers. It is now a women’s world. And any financial services person who doesn’t understand that is a blooming idiot.
And, bringing it back to hiring and promoting, you should hire and promote people primarily for empathy in 100% of jobs. Leadership is about empathy. And history shows that women, as a group, have much more empathy than men. They often make fantastic leaders.
Any last words on leadership during and after the COVID-19 crisis?
Peters: Leaders need to live with themselves and the decisions they are making today about furloughs and layoffs and supporting people with continuing healthcare. I do understand that your customer base is dried up. And, I do understand you’re making insanely difficult decisions. But you’ve got to get a second mortgage on your house, dude, to help your employees.
You told them you were going to bring them into this world to help them. You’ve got to be able to look at yourself in the mirror when you get to be my age and know you did what was right. COVID is the deal breaker on how you are going to be perceived as a human being for the rest of your darn life.