Most Valuable Players 1986

Tom Peters

This year I have culled my Most Valuable Players awards against the backdrop of 12 months of unabated negative business news—from the record trade deficit to painful, necessary, and much belated corporate restructuring foisted on recalcitrant managers by corporate raiders, more than half a trillion dollars of souring third-world loans residing on big bank ledgers, a record bank-failure rate, and fiascoes in steel, auto, semiconductor, and farm industries. Nonetheless, several stars stand out:

1. TELL IT LIKE IT IS. H. Ross Perot and Deputy Treasury Secretary Dick Darman spoke out against entrenched big-business management for ignoring the product and the people who make it. Perot was ousted from General Motors for his troubles, but hopefully his plain speaking will raise the heat of the dialogue. Management is more the issue than policy.

2. BEST MANAGED COMPANY. Last year I cited Milliken & Co., the Spartanburg, South Carolina, textile giant, for its top quality program. This year it takes overall top honors. In a mercilessly depressed environment, the $2.25 billion firm keeps getting better—and is snatching many an order that had been lost to overseas competition via its newest twist, an astounding customer responsiveness program.

3. CHIEF EXECUTIVE OF THE YEAR. William Donald Schaefer, mayor of Baltimore for 16 years, was just elected governor of Maryland. His vision, passion, and penchant for detail have transformed Baltimore’s now spectacular downtown Harbor Place as well as previously decrepit neighborhoods. Every busted street light and unfilled pothole captures the attention of the peripatetic leader. He illustrates what can be done in the public sector.

4. MOST EFFECTIVE AMERICANS ABROAD. More than 1,000 small and large American subsidiaries in Japan sell more than $50 billion of goods and services to the Japanese. As I noted in recent columns, these firms should make us question loud complaints of unfair barriers to entry that daunt so many others who simply lack patience, persistence, and a passion for quality.

5. AN OBSESSION WITH CUSTOMER SERVICE. Violently competitive West Coast retailing has not been the same since Seattle-based Nordstrom upset the industry’s definition of service. Competitors are scrambling to imitate, but few can figure out how Nordstrom sells several times more per square foot than the average department store and how it has grown seven-fold since 1978 without internal acquisition. The secret is conspicuous in its dressing rooms and on its sales floor—it is abiding customer service.

6. EMERGING HEROES. My column a few months back about a Wisconsin sausage maker’s unique participatory management process triggered visits to the company by teams from General Mills, 3M, and other large firms. They seem to realize that the new bellwethers are mid-sized companies in all industries. Here’s hoping that more big guys will stop by to watch and learn from their smaller kin. It’s a needed reversal of the last 150 years’ devotion to bigness for bigness’s sake.

7. TOP-QUALITY PROGRAMS. This year the winners are Tennant Co., a Minneapolis-based floor maintenance-equipment maker, and Paul Revere Life Insurance company, a subsidiary of Textron Inc. For almost a decade Tennant has been measuring, fixing, involving everyone, celebrating, and constantly improving. Paul Revere has been at it for just over three years. Its quality circles have produced an astonishing outpouring of implementable (and implemented) suggestions from central headquarters and field offices alike. Above all, both firms demonstrate the sort of persistence required to create a true quality revolution.

8. BOOK OF THE YEAR. World Class Manufacturing by Richard Schonberger illustrates that onshore manufacturers can succeed without enormous capital outlays. Schonberger honors 84 U.S. high- and low-tech factories that have made phenomenal improvements in quality, inventory reduction, and responsiveness to customers. How? Just-In-Time inventory and other supplier partnership programs and cause-and-effect problem analysis for step-by-step quality improvement lead the way. Automation is often a useful adjunct, but redesign of work flow, stepped-up training, and other noncapital-intense devices are the primary success keys.

9. BEST U.S. INDUSTRY. Steel! LTV lost more than $2 billion in one quarter in 1986. U.S. Steel marked its de facto abandonment of the industry by changing its name to USX. Bethlehem Steel is on the ropes. Yet consider three nearly billion-dollar steel superstars. Specialty steelmaker Worthington Industries was last year’s overall most valuable player. Nucor Corp. of Charlotte, North Carolina, and Chaparral of Midlothian, Texas, are leaders in the mini-mill business. Mini-mills, beneath the dignity of giant, integrated firms, will take 40 percent of the American steel market in a few years and are snatching back millions of tons of lost overseas business.

10. POLITICIANS OF THE YEAR. This goes to the barely more than one-third of Congress who voted to sustain President Reagan’s veto of the horrible textile trade bill in August. “Protection” does anything but. Protected industries get worse.

Who would you vote for? If you cast your ballot to me in care of this newspaper, I will track your leads and report on some of the best during 1987. Your candidates will help me demonstrate that despite economic gloom and doom, roles models exist in even the toughest industries and the public sector alike.