Most Valuable Players: 1987

Tom Peters

The Crash of October 19, is, of course, the business-news story of 1987. And the uncertainty it portends is surely the theme of the year, during which we read almost daily reports of countless household-name firms, including Citicorp, Procter & Gamble and Hospital Corporation of America, suffering major write-offs or undergoing fundamental restructuring.

Nonetheless, there were role models to remember, as we address these increasingly chaotic times. Thence, my third annual Most Valuable Player Awards.

1. Chief executive of the year. Gordon Forward of Chaparral Steel Co. takes the honors. Chaparral began to export from its Midlothian, Tex., headquarters to Germany this year. A unique blend of high technology and a wide-open organization style gives Forward’s Chaparral a cost per ton that is just a quarter that of the integrated steelmakers.

2. Manufacturer of the year. Deluxe Check Printers, Inc., of Minneapolis, Minn., takes this prize. Its estimated 1987 after-tax profit of $150 million on $940 million in sales can be traced to its continuing and extraordinary level of service and quality, which turns a mundane product into a 24-carat-gold winner.

3. Service firm of the year. Federal Express’s pet electronic document retrieval service, Zap Mail, became a cropper this year. But Fed Ex’s continued growth is the real story. It is an unparalleled example of the power of matchless service, and of a brilliant combination of the best people practices and the best technology.

4. Exporters of the year. Despite the dollar’s continuing plunge, most American exporters didn’t have a banner year. There were exceptions. Two surprising superstars in Japan’s tough markets were Van Buren, Ind.’s Weaver Popcorn (which successfully exports to 30 nations) and Downers Grove, Ill.’s ServiceMaster Industries. Weaver’s superior quality has rapidly earned it a 60 percent share of the Japanese popcorn market; ServiceMaster’s exceptional people programs have allowed it to quickly garner more than a dozen big-hospital cleaning contracts in Japan.

5. Comebacks of the year. Motorcycle maker Harley-Davidson, which now is beating Honda, actually asked the government to remove protectionist quotas a year before they were due to expire. Cincinnati’s U.S. Shoe—yes, a successful American shoe maker—has made dramatic productivity and responsiveness improvements, to the point that it’s exporting to Germany. While technology played a role in both stories, these turnabouts in tough circumstances are really both people tales, resulting above all from exceptional levels of employee involvement.

6. Idea of the year. Or, an idea that’s time finally seems to have come: extensive employee training and retraining. Influential Washington competitiveness expert Pat Choate has been chatting up anyone he could corner for years about Individual Training Accounts (ITAs). ITAs, which amount to an Individual Retirement Account (IRA) for retraining, to be used when needed, are not yet on the legislative books; but at least big programs, aimed at supporting training and retraining for both individuals and companies, now are starting to get serious attention. Training-driven success stories such as the General Motors joint venture (New United Motor Manufacturing, Inc.) have added fuel to the fire.

7. Lobby of the year. This may sound like a ludicrous MVP category, but the American Business Conference (ABC) deserves plaudits. It represents America’s shining stars—mid-size growth companies. And the ABC’s lonely but vociferous anti-protectionist posture is as important as its constituents.

8. Voice of sanity. One of Business Week editor-in-chief Steve Shepard’s most recent cover stories read, “Wake Up, America!” While Forbes, the Wall Street Journal and especially Fortune see nothing but sunshine in the economic sky, BusinessWeek takes a more measured view that is badly needed.

9. Books of the year. The PIMS (Profit Impact of Market Strategy) Principles by Bob Buzzell and Brad Gale provides compelling quantitative evidence as to which business strategies work and don’t work, based upon an unparalleled data base. Principle #1: “In the long run, the most important single factor affecting a business unit’s performance is the quality of its products and services, relative to those of competitors.” David Birch’s Job Creation in America (discussed in a recent column) deserves mention, too; it also quantifies an important, but long misunderstood, issue—where jobs come from, mainly smaller firms.

10. Product of the year. The Ford Taurus? No. The Honda Acura. Lest we get carried away with our budding effort to make things better in America, the Acura brings us back to reality—what a vehicle, a BMW or better for a little over $15,000.

11. Bonehead plays of the year. The absurdly restrictive and protectionist Gephardt amendment to the omnibus trade bill had this category nailed down, until October 19. Now it must share the top spot with President Reagan’s dramatic show of lackluster leadership in the face of the collapse of the world’s financial markets. Honorable mention goes to the wrongheaded semiconductor manufacturing combine, called Sematech. On a microscale, it is exactly how not to make America more competitive: Collusion between big firms that already have problems, to be overseen by the Department of Defense, hardly exudes the feel of success.

On to 1988.

(c) 1987 TPG Communications.

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