How the Mass Business Book Industry Emerged

It seems like popular books about business and management have always existed, but they actually only appeared in the 1980s. It all started with a book by two McKinsey consultants, Tom Peters and Robert Waterman, called In Search of Excellence, published in 1982. The book talked about management principles that made dozens of American companies successful.

These words about In Search of Excellence were not an exaggeration: “book blockbuster,” “the ultimate cult business book,” “a publishing event without precedent in the business world,” “the mother of all modern management books,” “ushered in an era of management gurus, management fads,” “the current management theory boom,” “which helped create the business book industry,” “ushered in the era of the so-called ‘big idea’ business book.”1

It became the first management book to top The New York Times bestseller list, staying there for three years, during which more than three million copies were sold, with a total print run of five million. Before that, the most popular management books were Peter Drucker’s works, which had a combined print run of no more than one hundred thousand.

Drucker didn’t like the book, and neither did many other experts. So what impressed the mass audience about In Search of Excellence? In short, it was the revolutionary content presented in a revolutionary form, and all this came at a turning point in American life.

Today, In Search of Excellence appears in almost every ranking of influential books compiled by English-language business publications. It is often called the most influential management book of the period between 1980 and 2000. It also had a significant impact on professional firm marketing, the book market, and the popularization of personal branding.

Where the book idea came from

In the 1970s, the leaders of the consulting company McKinsey (or the “Firm,” as it calls itself) began creating a system for sharing experience among consultants to find new ideas they could sell to clients. Research projects were divided into primary and secondary priorities. One of these secondary projects, which was not expected to be very important, involved summarizing data on organizational effectiveness.

On behalf of the Firm, Tom Peters and Robert Waterman Jr. tried to find out what, besides strategy and structure — the two pillars of management —makes companies effective. Previously, it was believed that if a company had problems, you had to change its strategy or structure. Alfred Chandler’s maxim, “structure follows strategy” (form follows function), was considered a law: a change in strategy required a change in structure. Peters and Waterman discovered that after two decades, this no longer worked: not every strategy had that power. So what did matter? They asked leaders of large companies and then went on to share their findings with clients.

It turned out that executives didn’t want to hear anecdotes from other executives. The first presentation failed. The second one did too. Twenty pages turned into 700 slides, 700 slides into eight short principles, but even that didn’t help: top managers remained indifferent.

The only thing that saved Peters and Waterman from complete failure was the interest of Siemens, which finally allowed the Firm to recoup the costs of sending researchers on business-class trips around the world. But one client wasn’t enough. Without the book, the research results might have gathered dust in McKinsey’s archives.

Lou Young, an editor at BusinessWeek who attended one of the presentations, published an article about the research findings, after which Harper & Row offered to publish a book. Peters and Waterman, tired of following the Firm’s rules, resigned and began working on the manuscript. The working title, The Secrets of Excellence, was changed to In Search of Excellence by the McKinsey director, because the word “secrets” might have led clients to think the Firm was revealing their confidential information.2

Why Search became a cult book

New Ideas

The book was “an indictment of American management.” It told the story of excellent companies that became successful because they did things differently — they were the ones doing stuff completely different from what the Harvard/Stanford/Chicago M.B.A. crowd was up to.3

In other words, Peters and Waterman criticized business schools, consulting firms, and the leading consultants of the time, including Peter Drucker, Robert McNamara (“the Pentagon’s Peter Drucker”, and their own company, McKinsey.

The essence of the large American corporation was Taylorism, Druckerism, and McNamaraism, while the book argued that soft skills are more important than hard skills, rigid hierarchies don’t work, and businesses lack entrepreneurial spirit, passion, and intuitive decision-making.

“You could boil all of Search down to three words: People. Customers. Action. That was about as far as you could get from the prevailing wisdom of the time, which you could also boil down to three words: Numbers. Bureaucracy. Control. And you could boil all of Search down to one idea: Soft is hard”.4

Peters and Waterman were the first to grasp the mood of the masses and introduced a new management language: “close to the customer, a bias for action, value-driven, stick to the knitting”.5

This turned the consulting business upside down, because McKinsey positioned itself as a company of analysts. According to Peters, after he wrote in a 1980 The Wall Street Journal article that employees, shared values, and special skills were more important than numbers, the management wanted to remove him from the project.6 But it wasn’t all bad: after the release of In Search of Excellence, McKinsey consultants gained a reputation as management philosophers.

New Form

Work on the book lasted two years. The authors enlisted the help of two professors and two writers.

Harvard Business School professors Anthony G. Athos and Richard T. Pascale suggested giving the ideas a clearer form and supplementing them with examples. This led to the concept now known as McKinsey’s 7-S: strategy, structure, systems, shared values, skills, staff, and style. Peters calls the alliteration an almost brilliant solution, because it made their concept memorable for decades. They chose the number “seven” because they followed an unspoken consulting rule: every message to an audience should contain an odd number of elements.7

Writers John Cox and Jennifer Futernick worked on the drafts to remove the dry, academic style. After 26 drafts, the management book became extremely easy to read.

It was the first management book written in an anecdotal style. Lightness, flair, emotion, metaphors, and case studies also became part of challenging tradition, because before Peters and Waterman, no one wrote about management this way. Placing real company cases in a book was considered bad form. For example, in his early books, Drucker didn’t mention the names of the companies he worked with, relying instead on generalizations.8

New Times

The book’s success can be partly explained by its release at the right historical moment: Americans were suffering from political and economic crises and were in urgent need of good news and new solutions.

In the 1970s, the U.S. had lost the Vietnam War and felt pressure from Japanese businesses. By the early 1980s, inflation had risen above 10%, unemployment and the prime interest rate were nearly 20%. Large corporations had long built standard suburban office complexes, filled shelves with standardized products, and saw few opportunities for further growth.

It was at this time that In Search of Excellence appeared, claiming that there are American companies that are exceptionally well managed,9 and that outstanding financial success comes not from standardization and rigid hierarchies, but from freedom. This message resonated more with the tech startups beginning to emerge in Silicon Valley than with traditional companies, which were becoming more efficient through mass layoffs.

Mass layoffs, in turn, spurred the growth of small businesses and self-employment. By the mid-20th century, Americans, having somewhat forgotten individualism and become “organization people,” grew tired of being “cogs in the corporate machine” and often left corporate careers to start their own businesses. Tom Peters and Robert Waterman, who voluntarily left McKinsey, embodied these trends.

In the 1990s, partly out of necessity and partly from a desire for change, the U.S. and the U.K. saw a revival of interest in individual entrepreneurship. Tom Peters began expressing even more radical ideas, even advising companies to turn every employee into an entrepreneur.10 It seems that Zappos and Google were the most inspired by his ideas.

Criticism from experts

Peter Drucker and scholars from Harvard Business School criticized In Search of Excellence for presenting banal truths and well-meaning wishes as major discoveries, for the contradictions in its principles, for the frivolity of its ideas, and for its anecdotal style.11

The authors did indeed describe things that were obvious to managers: the difficulty of making rational decisions amid growing information, the need for decentralization, and the importance of soft skills. That’s why McKinsey clients were not impressed by the research findings.

According to Peters, his goal was to show that almost 100% of innovations are created not by those who conduct market analysis, but by people who are frustrated with the way things are. While working on In Search of Excellence, he was frustrated by Drucker’s 1968 book The Effective Executive and by the bureaucracy at Xerox, where he worked as a consultant, because the company worshiped numbers instead of people, idolized MBAs, and had a grand strategy that it never executed.12

After publishing his own book, Peters read Drucker’s 1954 The Effective Executive and realized that Drucker had written the same ideas much earlier. Until then, Peters had believed that at least some of what he and Waterman wrote in In Search of Excellence was new. But upon rereading The Practice of Management, he was surprised to find that everything they had written had already appeared, in one form or another, in Drucker’s book.13

But the general public didn’t know this and was thrilled with In Search of Excellence. After all, who doesn’t enjoy seeing authorities toppled from their pedestals?

Two years after the release of In Search of Excellence, BusinessWeek, which had first written about Peters and Waterman’s ideas, published a critical article. The cover read “Oops!” and an inside headline slyly asked, “Who’s Excellent Now?” Two-thirds of the companies on Search’s list showed below-average financial results. From the perspective of a respected business publication, this was an attack not only on the book’s authors but also on McKinsey. The Firm’s leaders anticipated this and took every possible step to reduce the risks.14

Peters explained that the principles he and Waterman described in their 1982 book were accurate for 1982, and that as authors they had overlooked the pace of change, information technologies, and economic globalization.

Impact on the book market and professional firms

Although In Search of Excellence was aimed at managers, it captured a mass audience and helped launch the popular business and management book industry.15

Anecdotes, metaphors, and humor became the norm for discussing topics like strategy, structure, and systems. Simple, easy-to-remember concepts became fashionable: reengineering, redesign, rework. Management book titles became more engaging: Why Lawyers Should Eat Bananas and Who Says Elephants Can’t Dance? Business and management books no longer gathered dust on the shelves.

As Peters says, it was the first book to offer not just problem-solving (what consultants were paid for) but solutions that lead to success or help prevent problems.16 Later, more books of this kind by consultants and academics appeared, and in the 1980s they sold well.

As is well known, a successful book benefits its author the most. In Search of Excellence made Tom Peters the most famous and highest-paid consultant of all time. He even entered the Guinness Book of Records with an annual income of around $6.4 million.17 The second management book in history to top the New York Times bestseller list was also by Tom Peters — Passion for Excellence (1985).18

Although in the 1990s book sales by representatives of big business declined, professional firms could no longer do without books as part of their marketing.19 Peters and Waterman proved that books could generate profits and create demand for their consulting services, so employees of professional firms began investing in their personal brands.

McKinsey wasn’t fond of employee-authored books precisely because they promoted personal brands instead of the corporate brand, but the process was unstoppable. The Firm had to adapt. Before 1980, McKinsey had published only two books; after 1980, nearly a hundred.20 The process of publishing books by employees came under tighter control, but leaves of absence to work on them were not granted, as not all books paid off.

As a rule, Western professional firms do not engage in direct sales or advertising. Since their emergence in the 1930s, consulting companies in particular have promoted their services through articles in specialized publications such as Harvard Business Review, Fortune, BusinessWeek, The Wall Street Journal, as well as through professional conferences and client referrals. Some also had their own corporate journals, such as McKinsey Quarterly. Because of Peters and Waterman, for the past forty years everyone has had to publish books,21 not merely collections of articles, as before, but standalone works. Gradually, the book became the best way to build a professional reputation, and, just like articles, partners of professional firms began writing books together with ghostwriters.

«We faked the data»

Twenty years after the book’s release, Tom Peters gave an interview and, with his characteristic ease, said: “We faked the data.”22

The companies were chosen intuitively, based on a survey of consultants. This is how 62 companies that seemed excellent made it onto the list. “Then, because McKinsey is McKinsey, we felt that we had to come up with some quantitative measures of performance. Those measures dropped the list from 62 to 43 companies. General Electric, for example, was on the list of 62 companies but didn’t make the cut to 43 — which shows you how “stupid” raw insight is and how “smart” tough-minded metrics can be”.

Peters considers this approach entirely justified: “Start by using common sense, by trusting your instincts, and by soliciting the views of ‘strange’ (that is, nonconventional) people. You can always worry about proving the facts later.”

Some journalists took Peters’s words literally, and that turned out rather badly for him, as a confession that he had «fabricated the evidence to support the the oretical arguments for In Search of Excellence»23. Some reacted like children being told that Santa Claus doesn’t exist. In particular, John A. Byrne wrote in Bloomberg that Peters’s admission was nonsense, because for many years readers had believed the authors’ conclusions were objective, when in fact they were mostly intuitive.24 The book had become a cult classic because it was seen as a thorough study, and now many readers were disappointed.

Peters brushed off the criticism, saying it was just a sensational headline. But in the interview, he went into detail, explaining that after several years of research, “I had no idea what I was doing when I wrote Search. There was no carefully designed work plan. There was no theory that I was out to prove,” and later added, “This is pretty small beer, but for what it’s worth, okay, I confess: We faked the data. A lot of people suggested it at the time.”

By 2001, Peters couldn’t have said anything else. Eccentricity had become the cornerstone of his personal brand. He often made mistakes and even contradicted himself. He advised ignoring the numbers and just having fun. Doing all sorts of odd things. Making mistakes with ease.

“The book I’d write today is In Search of Weird. In Search of Curiosity. In Search of the License to Explore. Excellence is simply too static a notion. And the world is simply changing too fast.”

GAK! — God alone knows!

“Twenty years ago, we were sure that the notion of 'one best way' was wrong. We also thought that we could prescribe eight new principles that would get you close to sustaining excellence. Ask me today, and I’d say, 'GAK!'”25.

References

  1. (1) Michael S. Hopkins, Joshua Hyatt. When Everyone Was Excellent, 1999. URL: https://web.archive.org/web/20020827021741/https://www.inc.com/magazine/19990515/4703.html. (2) John A. Byrne. The Real Confessions of Tom Peters, 2001. URl: https://www.bloomberg.com/news/articles/2001-12-02/the-real-confessions-of-tom-peters. (3) Gyuri Vergouw. Mismanagement: de schuld van Business Schools? Of: Wanneer vertellen managementgoeroes onzin, wanneer niet? 2003. URL: https://www.managementsite.nl/mismanagement-schuld-business-schools. (4) Tom Peters. Fast Company. Tom Peter’s True Confessions, 2001. Part 1: https://www.fastcompany.com/44077/tom-peterss-true-confessions. Part 2: https://www.fastcompany.com/44173/tom-peterss-true-confessions-continued. (5) John A. Byrne. The Real Confessions of Tom Peters, 2001. URl: https://www.bloomberg.com/news/articles/2001-12-02/the-real-confessions-of-tom-peters. (6) Adrian Wooldridge. Masters of Management: How the Business Gurus and Their Ideas Have Changed the World — for Better and for Worse. Harper Business, 2011. (7) Tom Peters to Receive Thinkers50 Lifetime Achievement Award, 2017. URL: https://thinkers50.com/media/tom-peters-receive-thinkers50-lifetime-achievement-award/. (8) Jonathan Verney, The Corporate Storyteller Inc. In Search of Ghostwriting Excellence. URL: https://www.corporatestoryteller.ca/big-ideas.
  2. Duff McDonald. The Firm: The Story of McKinsey and Its Secret Influence on American Business. Simon Schuster (September 1, 2013).
  3. Michael S. Hopkins, Joshua Hyatt. When Everyone Was Excellent, 1999. URL: https://web.archive.org/web/20020827021741/https://www.inc.com/magazine/19990515/4703.html.
  4. Tom Peters. Fast Company. Tom Peter’s True Confessions, 2001. Part 1: https://www.fastcompany.com/44077/tom-peterss-true-confessions. Part 2: https://www.fastcompany.com/44173/tom-peterss-true-confessions-continued.
  5. Michael S. Hopkins, Joshua Hyatt. When Everyone Was Excellent, 1999. URL: https://web.archive.org/web/20020827021741/https://www.inc.com/magazine/19990515/4703.html.
  6. Tom Peters. A Brief History of the 7-S ("McKinsey 7-S") Model, 2011. URL: https://tompeters.com/2011/03/a-brief-history-of-the-7-s-mckinsey-7-s-model/. Дата звертання: 08. 11. 2023.
  7. Duff McDonald. The Firm: The Story of McKinsey and Its Secret Influence on American Business. Simon Schuster (September 1, 2013).
  8. Michael S. Hopkins, Joshua Hyatt. When Everyone Was Excellent, 1999. URL:  https://web.archive.org/web/20020827021741/https://www.inc.com/magazine/19990515/4703.html.
  9. Dan Ackman. The 20 Most Influential Business Books, 2002. URL: https://web.archive.org/web/20021002222419/http://www.forbes.com:80/2002/09/30/0930booksintro_2.html. Оновлена сторінка з поясненнями: https://www.forbes.com/2002/09/30/0930booksintro.html?sh=1b83ec7c29e1.
  10. Tom Peters. A return to self-reliance, 1903. URL: https://tompeters.com/columns/a-return-to-self-reliance/.
  11. Michael S. Hopkins, Joshua Hyatt. When Everyone Was Excellent, 1999. URL: https://web.archive.org/web/20020827021741/https://www.inc.com/magazine/19990515/4703.html.
  12. Tom Peters. Fast Company. Tom Peter’s True Confessions, 2001. Part 1: https://www.fastcompany.com/44077/tom-peterss-true-confessions. Part 2: https://www.fastcompany.com/44173/tom-peterss-true-confessions-continued.
  13. Debra Whitefield. Peter Drucker: Guiding Light to Management. Los Angeles Times. April 14, 1985. URL: https://www.latimes.com/archives/la-xpm-1985-04-14-fi-8368-story.html.
  14. Duff McDonald. The Firm: The Story of McKinsey and Its Secret Influence on American Business. Simon Schuster (September 1, 2013).
  15. Michael S. Hopkins and Joshua Hyatt. When Everyone Was Excellent, 1999. URL: https://web.archive.org/web/20020827021741/https://www.inc.com/magazine/19990515/4703.html.
  16. Макдональд посилається на Crainer. The Tom Peters Phenomenon, p. 41
  17. (1) Roger Trapp. From excellence, to liberation, to Wow! 17 April 1997. URL: https://www.independent.co.uk/life-style/from-excellence-to-liberation-to-wow-1267626.html. (2) Duff McDonald. The Firm: The Story of McKinsey and Its Secret Influence on American Business. Simon Schuster (September 1, 2013).
  18. Duff McDonald. The Firm: The Story of McKinsey and Its Secret Influence on American Business. Simon Schuster (September 1, 2013).
  19. Lawrence Buckfire. The Pros Of Being A Self-Published Lawyer, 2016. URL: https://www.forbes.com/sites/forbeslegalcouncil/2016/02/25/the-pros-of-being-a-self-published-lawyer/?sh=32585f193133.
  20. Duff McDonald. The Firm: The Story of McKinsey and Its Secret Influence on American Business. Simon Schuster (September 1, 2013).
  21. Ethan M. Rasiel. The McKinsey Way, 1999. ‎McGraw Hill; 1st edition (February 22, 1999).
  22. Tom Peters. Fast Company. Tom Peter’s True Confessions, 2001. Part 1: https://www.fastcompany.com/44077/tom-peterss-true-confessions. Part 2: https://www.fastcompany.com/44173/tom-peterss-true-confessions-continued.
  23. (1) Christopher D. McKenna. Writing the ghost-writer back in: Alfred Sloan, Alfred Chandler, John McDonald and the intellectual origins of corporate strategy, 2006. Management & Organizational History, 1:2, 107-126. Published online: 02 Jan 2013. URL: http://dx.doi.org/10.1177/1744935906064087. (2) John A. Byrne. The Real Confessions of Tom Peters, 2001. URl: https://www.bloomberg.com/news/articles/2001-12-02/the-real-confessions-of-tom-peters.
  24. John A. Byrne. The Real Confessions of Tom Peters, 2001. URl: https://www.bloomberg.com/news/articles/2001-12-02/the-real-confessions-of-tom-peters.
  25. Tom Peters. Fast Company. Tom Peter’s True Confessions, 2001. Part 1: https://www.fastcompany.com/44077/tom-peterss-true-confessions. Part 2: https://www.fastcompany.com/44173/tom-peterss-true-confessions-continued.

Change: Oct. 15, 2025, 9:58 p.m.