The Gospel According to Tom Peters

Perception," Tom Peters is fond of saying, "is all there is." He is usually leaning on a podium when he says this, midway through one of his almost daily appearances before business groups around the country. He is standing in front of several hundred people, some trying not to make noise with their after-lunch coffee cups, others sitting at attention with writing pads in front of them, as though they were in school. The room is often huge, with massive chandeliers and Oriental carpets, a setting more appropriate to Diana Ross in sequins than to Tom Peters in a blue blazer. After he says, "Perception is all there is," he generally looks down at the floor and shakes his head, looking very sorry about the whole thing. "There ain't no such thing as steak, sad to say," he almost whispers, "just the sizzle."

Tom Peters is very good at marketing. In addition to making the word excellence a banal din in our daily vocabulary, he has made himself a millionaire several times over. In Search of Excellence, written with Robert Waterman, Jr., is the best-selling business book in history—5,000,000 copies sold world-wide. A Passion for Excellence, written with Nancy Austin, sold more than 500,000 copies in hardcover and a paperback edition will be out this fall. Peters' share of royalties and subsidiary rights runs into the millions. But the books are only the beginning. Nearly 200 speaking engagements a year net about $1,500,000, plus expenses. (He sometimes lectures free to women's groups and to "the few dozen people who were good to me before I got outrageously expensive.") Skunk Camp, a four-day seminar given in Monterey, California, six times a year, attracts 40 executives at a clip, each willing to pay $4000 to learn the lessons of excellence. You can license a video-tape package for $13,500; you can buy The Excellence Challenge audio tapes for $49.95; you can put a leather-bound Year of Excellence diary on your desk for $25. You can run Peters' software on your computer and, soon, watch one of his three new television projects.

Yet the atmosphere that surrounds him, the things he feels compelled to talk about and the reactions of people who listen are couched not in marketing terms but in theological ones. He is a man perpetually on a crusade. "In my own half-assed way," he says, "I'm preaching to the converted. I'm essentially here to talk to the seven percent who already believe."

The crusade hinges on his exhortation that "American industry is headed downhill. We're headed for disaster, because we're managing badly. We've got to regenerate ourselves." Those who see him as an angel think of Gabriel, God's messenger. "The Word," as Peters tells it, is that our economic life is hopelessly paralyzed by "sinners," out-of-touch managers who "treat people like shit" and others who hide in fancy offices and fire off memos. These sinners (continued on page 152)Tom Peters(continued from page 81) block innovation the way a huge man's shadow blocks the sunlight.

There are some who insist that Peters is not an angel but a devil, possessed not by the Word but by the buck. And the spot-light. He's this year's snake-oil salesman, they say, pitching his "excellence" cure to the desperate; a silver-tongued barker covering up the holes in his story, waving off evidence that the cure doesn't work. He's selling a kind of corporate est, forever pushing the America can do it button.

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Tom Peters is, momentarily, a happy man. In a small chartered plane lifting above the hills of West Virginia, he is in an excellent, albeit exhausted, mood. A Democratic caucus at the Greenbrier resort has just been told how America can be saved. "We can't protect industries that make things that just don't work!" he shouted. So we must learn to compete. World peace lies in the direction of world trade. And why, now that the session is over, is he so thrilled? Because, he says, "I sure pissed off a few people."

He did more than that. He captured the crowd. Elmer Gantry in a humid tent holds not a candle to Tom Peters in an air-conditioned ballroom. Peters at the podium is a man on fire. He harangues the ceiling; he implores the floor. He paces, stomps, wrings his hands. He shrieks. He sweats. His voice grows hoarser and hoarser. A former colleague says that listening to Peters speak is like trying to get a drink from a rushing fire hydrant.

He has been honing this style longer than most people know. Since 1980, when Business Week published a portion of his excellence study, his phone hasn't stopped ringing. He has now developed, he says, "infinite respect for Johnny Carson and Bill Cosby. I learned the hard way that you can tell the same story over and over. One time, you belch in the middle, which gives people seven seconds to laugh, and the next time, you forget that's what you did, and they don't laugh."

At the Greenbrier, he wasn't trying to make people laugh. He was a man consumed by grief at how badly most companies operate. His was a soul in torment, and his suffering was contagious. When he told his listeners he was afraid of the Japanese, a frisson of fear ran through the room. Then came the parable. In this one, a woman bought an appliance at Macy's during the Christmas rush. On her way out, someone asked if she knew who the Japanese man who had sold her the appliance was. She didn't. Well, the man was the president of the Sony Corporation, working in the store to see what his customers were buying. "Imagine!" Peters shrieked. "How many C.E.O.s hang out in department stores? You can count'em on one hand after a lawn-mower accident."

So he got his laugh anyway. When he said, "Management in Silicon Valley is as rotten as it is in the Rust Bowl," a Representative from Maryland poked a Representative from Ohio and whispered, "How's that for mild?" Florida Congressman Claude Pepper rushed forward when the speech was over and said Peters was the man they should run for President.

Tony Coelho, chairman of the Democratic Congressional Campaign Committee, also thinks Peters has political potential. He likes a guy who says such things as "The only thing people understand in the board rooms of the Fortune 500 companies is terror."

People who know him well assume that Peters, now 43 years old, has overcome the initial shock of his rapid rise to celebrity. No longer overweight and disheveled-looking, he has achieved a new peace of mind. And although he can be seen sipping Scotch after his speeches, he is reportedly drinking less than he used to. He reacts badly to rumors that lectures were botched—even missed—because he was drunk. He admits to having missed three, one because an airline bumped him off a flight. "I thought I was an alcoholic, but my shrink says no," he says. After years of wearing torn running shoes, rumpled corduroys and shirts that protruded over an expanding belly, today's trimmer Peters is nattily dressed in gray slacks, a button down shirt, a red tie and a blue blazer that, to his amazement, shakes out wrinkle-free when he lifts it from the airplane seat. "Maybe," he says, "I ought to buy expensive clothes more often." On a very good day, he might resemble Harrison Ford, the far side of boyish, with unruly eyebrows, broad face, hair shaggy (by corporate standards) and a bring-on-the-beast-I'll-take-'im-with-my-bare-hands look in his eye.

There are a lot of beasts in Peters' world. And bad guys. "Tom needs an enemy," one friend says. "Life isn't worth living for him unless he has one."

The composite Peters enemy is the "button down guy in a 17-piece gray suit who never speaks above a whisper," the corporate honcho who runs a huge company and fills his life with perks, private parking spaces and executive elevators; the professional manager, rather than someone who really knows the business.

Peters' heroes and saints, on the other hand, are a ragbagful of shirt-sleeved guys: Frank Perdue, out on the loading platforms with his people; former Dana Corporation president and chairman Rene McPherson, who taught Peters the importance of "managing by wandering around"; Vince Lombardi, who talked about managing through love and whose words often find their way into Peters' speeches. Peters especially likes Baltimore's mayor, William Donald Schaefer, who drives around his city, checking out potholes. Peters grew up in Baltimore.

The one thing with which he has no patience is indifference—from friend, enemy or seminar participant. Before his speech to the Democrats, his biggest fear was not that he would be booed—that appeals to him—but that the audience "wouldn't be interested." Peters needs people to be interested, because he is not just talking about increasing corporate revenues; he is talking about salvation.

Does his own salvation lie on Capitol Hill? Is he tempted by Coelho's urging? He sets aside the airline schedule he has been scanning. No. He hates Washington, first of all. The day before, he had walked along K Street, muttering about how "turned off" he felt the minute he landed at National Airport. "It's the sense of self-importance that's been here since Kennedy," he says, "the arrogance."

Nor does a Congressman's salary have a lot of appeal. "I'm making more money than I know what to do with," he says sheepishly. His company, The Tom Peters Group, had revenues of $5,000,000 last year, he says. "I can't get past the greed phase."

So if Peters' future doesn't lie in shaking hands with constituents, where, exactly, is he headed? He likes to talk about moving "to fucking Vermont and waving to Palo Alto," to dream about playing the harpsichord and writing "thoughtful essays." But he never seems to get there. His schedule—which includes participating in an exchange program with China and establishing an arm of The Tom Peters Group in Sweden—is full until mid-1987.

The truth is, Peters can't stop what he is doing. He runs a business, and there are 17 people for whom he feels responsible. You'll find them in a brand-new, loft like office on quiet Hamilton Avenue in Palo Alto. Gray industrial carpeting covers the floors and fabric covers the sides of cubicles, into which glass windows are cut. There are few secrets here—and few appearances in the office by Peters, who's usually on the road four or five days a week. But he's big on calling in. "Tom's on line one," an amplified secretarial voice will call out. "Anybody want to talk to him?" A large number of women work in this office, which seems odd in view of the fact that the companies on his "excellent" list employ few. Peters explains that the work at his office consists mostly of "support functions."

Tom Peters' operation is a study in irreverence. On one wall are photos of Peters dressed in a skunk costume; another wall displays a bumper sticker that first surfaced last year at the American Management Association meeting: I'd rather be dead than excellent. In Search of Mediocrity, a parody published in Silicon Valley, is passed from hand to hand. And although its name is derived from a group at Lockheed Aircraft that carried on research outside the bounds of that company's R&D division, the skunks, the bumper sticker and the corporate culture of The Tom Peters Group revolve heavily around stinking things up and pissing people off. Peters, of course, sets this tone. He talks about "the search-for-excellence phenomenon—whatever the hell that might be." He calls his lectures a "tap dance" and once described his second book, A Passion for Excellence, as "more bullshit for people who believed the first bullshit." In this vein, but with a greater dose of unprovocative seriousness, he also says, "I could never work for an 'excellent' company. There are still a few crazy folks who value independence." And Peters, with no small irony, leads the pack.

Not everyone in The Tom Peters Group thinks it is an "excellent company." Mara Neiman, for one, has just resigned. Neiman began working with Peters at the time I.S. of E. (as it is called on Hamilton Avenue) was published. She booked his lectures from the gardenia-filled back porch of his house on Fulton Street, five blocks away. And she watched things change. "In the beginning," she says, "people said, 'Oh, thank God. I've been doing this for years. I feel validated!' Then it shifted. People who called said, 'I'd like to have Tom Peters speak. But I don't know what it's about.' They were managers getting brownie points for booking him, capitalizing on Tom as a product. It was a disillusioning experience for him."

And for her. Like most enterprises that begin small, entrepreneurial and close-knit, Peters' company has been changed by growth. Now, Neiman says, "It's a bureaucracy." The new offices are "too corporate" and, instead of being concerned about purpose, people "worry about whether our plants stick out over the partitions." She worries, too, about the future of the enterprise. "It doesn't take a marketing genius to know you can't have a company in which the product is one person."

The job of building "the excellence phenomenon" into an ongoing business ("leveraging Tom Peters," one staffer calls it) falls more happily to Debbie Kaplan, a former Paul Weiss, Rifkind, Wharton and Garrison lawyer from New York, who makes all the deals for Peters' products. Bob Le Duc—a friend from Stanford Business School days, a former employee of Hewlett-Packard (one of the original "excellent" companies) and an ex-Harvard Business School professor—manages the seminar business.

LeDuc is aboard the Peters express for the long run, has been since the back-porch days on Fulton Street. That was just after Peters was fired from his job at McKinsey & Company—one of the country's most prestigious consulting firms-—where the research and writing of In Search of Excellence had been done. According to a frequently told story, Peters was fired for wearing shorts to the office; it's a tale that neatly fits the image of Peck's Bad Boy in the land of gray suits. He got a part-time job at the Stanford Business School and, with LeDuc, planned to set up a consulting practice. They thought they would work 60 days a year and make $60,000 apiece and, as Peters says, "live happily ever after." Then, in 1982—a year after Peters and McKinsey had parted—in LeDuc's words, "the damned book hit."

It hit because of a fortuitous combination of historical forces. In 1982, the economy was suffering the worst recession in half a century. Unemployment was at ten percent the week the book was published. "The Japanese threat" to industry had become a byword, and Americans, accustomed to dominating the world of technology and business know-how, were suffering not only in their pocketbooks but in their pride.

"Our stuff caught people who were hungry for answers," Peters says. "The world was ready to listen. Two or three dozen other people had said the same things."

Passion co-author Nancy Austin, who has since left The Tom Peters Group, thinks that the "ridiculous success" of the first book wouldn't have happened if it had come out a year earlier: "American industry was sending troops to Japan to find out why they were outperforming us. The beauty of I.S. of E. was its patriotic message: 'Here's an American company doing things right.' It fit into the buy-American mood in the country. Everybody thought Tom was a Republican!"

Like a real Republican, Ronald Reagan, Peters had found a way to communicate with Americans: the anecdote. His speeches, seminars and books brim over with anecdotes. But, like Reagan's oft-repeated chestnuts, some are hard to verify. The story about the woman who bought an appliance from the Sony president at Macy's, for example. Peters says he heard this from the woman herself. What did she buy? He doesn't know. How can he be sure it was the Sony president? He doesn't know that, either, but he isn't sure it matters. His research methods consist of doing an enormous amount of reading and clipping and listening to what people tell him "on the road." All that matters is that the stories seem plausible, he says. He'll use one if he thinks it is "consistent with what the guy could have done."

That was not good enough for Fortune. In the spring of 1985, the magazine, preparing an excerpt from A Passion for Excellence, set its fact checkers to work. Some of the facts didn't check—such as the story about the Xerox executive who tried to make things more democratic by directing that all reserved-parking signs in the company lot be painted out. The story wasn't true. "I look like an asshole in this one," Peters says. "It's a weakness in the head. I like to tell stories; when I elaborate enough times, I believe it."

Or the bit about Frank Perdue's investing a quarter of a million dollars in a machine to blow the feathers off chickens—an example of truly excellent chicken plucking. The trouble was, Perdue's company told Fortune, the machine had already been replaced.

Which brings up another question: How excellent are Peters' choices of excellent companies? Thirteen of the 43 companies praised in In Search of Excellence were in big financial trouble three years later. Pressed on this, Peters responds, "Am I the only person in the U.S. responsible for quarterly earnings? They ran into serious problems because they took their eyes off the real world. Our point was long-term performance. If a company has a bad quarter or two, what does it mean?" Then he will talk about "comebacks at Kodak, Delta Airlines and maybe Caterpillar." Or the way Mary Kay Ash gets employees involved in her cosmetics company by putting on old-fashioned "hoopla" meetings at which everyone gets an award. Still, in recent years, Mary Kay's stock has tumbled, its sales force has dwindled and sales have plummeted. And People Express Airlines—also a Peters favorite—lost $27,500,000 last year and $58,000,000 in 1986's first quarter. Can you be excellent in the red?

James O'Toole, professor of management at the University of Southern California, says that when companies get into trouble, "Peters offers no principles to turn to. Those Silicon Valley companies"—he doesn't name it, but Apple is a prime example—"that looked so good and appeared so humanistic turned into tyrants when they got into trouble. It's at that level that Tom doesn't have anything to say. He walks away or he screams. There's nothing he says that's wrong," O'Toole insists. "It's just incomplete, therefore misleading. American businessmen love his good news. They hate to be criticized, and Tom never says anything bad. He insults the intelligence of the American business community and its members don't recognize it."

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No one seems insulted as Skunk Camp convenes on the shore of the Pacific Ocean. Participants sleep in weathered-wood condominiums and, each morning, make their way along narrow walkways to Grove House, where the lessons of excellence are taught by Peters and LeDuc. The four-day seminar is a bizarre mixture of tomfoolery and seriousness. Each day is color coordinated. T-shirts appear at the door of each condo every morning, their colors matched to the work sheets for that day's study.

The people who come to Skunk Camp are among Peters' "converted." Many are from companies he has written about: Domino's Pizza, Stew Leonard's Dairy, Burger King. New faces at this session include two Roman Catholic priests from Chicago interested in "translating the lessons of excellence" to their own enterprise. They are having trouble deciding what their translation of "dealing with competitors" is, but they heartily agree that Peters is an evangelist.

In two and three-hour chunks, Peters lectures, cajoles and leads discussions on topics that are beyond debate: creating new heroes, treating people decently, keeping things simple, learning how to innovate. In a small room with a blackboard and 40 people taking notes, his speaking style is the same as it is from a podium under the glare of spotlights:

"Nobody can deal with the word failure!" he shouts. "People talk about 'outcomes of the other variety.' I hate the term risk taking. You have to be able to say something was a screw-up, a goddamned unmitigated failure! Not 'a good try!' At Xerox, they've got a product in development that's supposed to be taking two years, and now it's seven years and"—his voice rises into the upper registers; he squeaks—"nobody will talk about it!" Quick, an anecdote about a failure that is inspirational: "John Reed was an innovator, a hero. Worked at Citicorp. Biggest loss in the history of Citicorp is associated with him. He sent 24,000,000 credit-card applications all over America and lost a fortune, but he helped create the nationwide bank. His competition for the top spot was a button down guy who never made a mistake."

When LeDuc takes over, Peters sits at one side, sipping diet sodas and taking notes. He never shows up at morning exercise workouts and doesn't linger in the evenings; too much to do. He has to drive home to Palo Alto, where he spends much of the night working on speeches, columns, Congressional testimony before the House Armed Services Committee. The deadline for filing for the Congressional race has come and gone; he has declined. He's tired. When Skunk Camp is over, he will dress up in a skunk suit and give out awards, then board another plane for another speech. Perhaps he'll "go catatonic" and the stewardess will think he has had a heart attack.

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Tom Peters flies on. "The pace," he had told Skunk Camp members, "has to be speeded up. Our objective must be the grand one. I would beg you not to waste a minute." Peters, for one, doesn't waste a millisecond. It's not enough to have put some pizzazz into business talk. It's not enough to have people across the country gathered to watch you on closed-circuit television, the way they do prize fighters. It's not enough to play David to the Goliath of the Fortune 500 and walk away with fame, money and your name mentioned as a potential Presidential candidate. Nothing is enough, because this is, after all, a holy war, the precise savagery of which only Tom Peters really knows.

"He is not just talking about increasing corporate revenues; he is talking about salvation."