Making a Habit of Success

March 4, 1933, was a turning point in American history. It was a dark, cloudy day, and the country was in an equally sullen mood. Over 13 million workers had lost their jobs. More than 10,000 banks had failed in the last four years, and $5 billion had been lost. In the preceding month, 120 million people had rushed to the banks to withdraw their deposits before they, too, were lost. On March 3, in a single day, people had withdrawn more than $300 million from the system in a state of panic. It was clear that the nation's banking system was on the verge of collapse. This was the day on which Franklin Delano Roosevelt was inaugurated as the thirty-second president of the United States of America.

Roosevelt had a plan to save the banks. His strategy was so simple that it almost defies belief. He would appeal directly to the people. A day after assuming office, he declared a national banking holiday, and a week later he addressed the nation on radio in the first of his famous "fireside chats." What did he say to the people? He explained in clear, simple language what the banking crisis was all about. It was a crisis of confidence, not of substance, and the root cause was fear. What did he tell these countless frightened millions, who had withdrawn billions of dollars from the banks? He told them there was nothing to fear, and he asked them to turn right around and return their hard-earned savings to the banks. And miracle of miracles, they did! When the banks reopened the next day, the lines of people waiting to withdraw their money did not form. The panic was stopped by a man's voice.

Most of the New Deal ideas were not actually new. Many had been aired before, some even tried by Hoover. Congress had supported Hoover, too, but he lacked the charm and spirit and homely way of speaking that FDR had perfected as an art. Roosevelt had a warm and vibrant personality, which inspired hope and trust, and he possessed consummate skill in communicating his ideas to the people. Without these two attributes—personality and skill—all his bright ideas, good intentions, and political backing could not have moved the people and saved the system.

A proper blend of personality and skill is a key attribute of corporate success as well. Personality expresses the basic qualities of people—their values, character, and temperament. It tells us whether the basic material is a piece of quartz, a ruby, or a diamond. Skill expresses the degree to which the basic human material has been shaped, refined, and polished into a fine gem. Without skills, even the finest personality is an uncut stone, rich in content but poor in form. Without personality, skills are empty, lifeless gestures.

In recruiting new employees, most companies focus on technical qualifications, educational background, and job experience. But very often the most critical factor is none of these. These are only the attributes of something more basic and more central—the person. Once Benjamin Franklin was looking for an editor to help run his newspaper. One man applied for the job, and Franklin invited him out to lunch. After lunch Franklin politely informed his guest that the job was not for him. The bewildered applicant asked why he had been rejected. Franklin replied that it was because the man salted his steak before tasting it. The job required an individual who would verify every fact before accepting it and never jump to a hasty conclusion. The man's action revealed that he was a creature of habit, who could act without prudence; therefore, he was not suited to be an editor. Franklin's technique may be a little too subtle and intuitive for most companies, but the incident does illustrate a point. Personality is important.

When we visited Delta for the first time, the taxi driver who drove us from the airport casually mentioned that he often brings over young women to be interviewed for flight attendants' jobs with the company. He said: "I can always tell in advance which ones they are going to hire. I know a Delta person when I see one." Intrigued by his remark, we eagerly asked: "Who is a Delta person?" He replied, "She is a good person, wholesome—the kind of girl that any guy would be proud to bring home to meet his parents."

Thanks to the cabdriver, we were alerted to an interesting phenomenon. Wherever we went, we began to inquire more seriously about the type of people each company is looking for. Not surprisingly, a discernible pattern emerged. Companies look for people with personalities like their own.

When we visited Apple, we asked several people, "What is an Apple person?" They replied: "An Apple person is self-starting, very entrepreneurial, flexible, bright and open to new ideas, not hung up in bureaucracy and politics, not status-conscious, people who are basically themselves, and perhaps just a little arrogant."

Apple considers recruitment so important that it hires nearly half of its new people through recommendations of existing employees rather than agency referrals. It is everybody's responsibility to find the right people. Candidates go through anywhere from 10 to 20 interviews, not only with the manager they will be working under but with their peers as well. Any employee can exercise a veto power if the employee feels the person is someone he or she cannot work with. If people have to be terminated, it is almost always for "cultural" reasons rather than for lack of technical competence.

Apple does not mind if its people are a bit arrogant. After all, you need a little spunk to keep up the fire with Big Blue hovering above your head. By contrast, at Coca-Cola arrogance is considered the deadliest of all sins. Coca-Cola looks for people who are extremely bright, articulate, with integrity and a sense of style—not those who take themselves too seriously (after all, it is not a very serious product), and definitely not those who are arrogant. "A symptom of arrogance is a serious problem," says Don Keough, the president, who is constantly looking at the character of the executives as much as or more than their professional competence.

Why knock arrogance? When you control 40 percent of the world market for anything, the worst enemy you face is your own sense of importance, satisfaction, and complacency. Coca-Cola fears that more than it fears Pepsico. Keough explains, "Woodruff said that the world belonged to the discontented, and it does. The one thing that we fight is that thumb-sucking attitude that we have arrived. The joy of this business is the joy of trying to improve on what you are doing, because success is a journey, not a destination."

The people we met at Merck seemed to be cast in the image of the company itself—intelligent, dynamic, aggressive, and articulate. How do you know Merck people when you see them? Elliot Margolis, executive director of field administration, replied:

Contrast the emphasis on independence and entrepreneurship at Coca-Cola and Merck with this description. "We're looking for someone that is going to be compatible with this environment—a caring person, a quality person, a positive person. Someone who is too independent and ambitious, with little regard for others, is not going to work out here. If they are not willing to play as a team member, they are not going to fit in," says James Ehrenstrom, vice-president of personnel at Northwestern Mutual. At Northwestern Mutual the team comes first, individual ambition only afterward.

Aside from what the companies told us, our own impression was that you simply could not shuffle people around between them without coming up with some striking mismatches. The difference in the personality of the people was as great as the contrast between the personalities of the companies themselves.

All of these corporations recognized that intelligence, education, technical training, skills, and experience are not enough to qualify a person for a particular job. But no place we visited took the task of hiring the right kind of people as seriously as Delta.

Delta has about 36,000 employees. Every six months the company receives about 150,000 new or updated job applications without even advertising; that is, 4 or 5 applications for every single position in the company. About 50,000 applications are for one of the company's 6,500 flight attendant jobs. From all these flight attendant applicants, Delta selects a total of 500 to 700 new employees a year.

You would certainly think that with so many people trying to get into the company and the high priority Delta places on thrift, it might regard recruiting as a casual affair and simply select a few from the cream of the applications on file. But that is not the Delta way. For a new class of 50 flight attendants, the company interviews about 500 applicants. Even temporary hires are sent to Atlanta from elsewhere in the country for a final round of interviews before being selected.

What is Delta looking for? Delta personnel we interviewed say that education is not a very important consideration; it just so happens that most Delta employees have a lot of it. A large number of flight attendants have MBAs or other graduate degrees. Basically, Delta is looking for members of the family. That does not mean members of their existing employees' families. That is strictly prohibited in order to avoid the possibility of hurting anyone's feelings by turning down a relative. The company is looking for people who belong, and a person's family background is one important indicator. A person's background tells a great deal that would otherwise be difficult to learn. A person's traits and talents are determined by family background, upbringing, and self-motivation. The values, beliefs, education, and occupation of the parents can be very revealing clues to a person's character.

"We're looking for someone that has wholesomeness," says Marvin Johnson, assistant vice-president for employment, "people who can express themselves, who can relate to their peers, service-oriented individuals. They don't have to be the richest, nor the best educated, because we hire them based on how they fit in and how they will grow with Delta. There is a thread of that Delta person. The fiber of the individual doesn't differ as much as it appears on their outward expressions." Delta is quite successful in discovering people with that thread. Of those that join the company, only 3 percent leave of their own accord every year. When you consider that many of those that do leave are young flight attendants interrupting their careers to become mothers, you begin to understand just how much a family Delta really is.

On April 1, 1980, Chrysler called a meeting that was attended by representatives from 400 American and foreign lending institutions to which the company owed $4.75 billion. The meeting was a last desperate effort to persuade the banks to approve $655 million in financial concessions so that Chrysler could become eligible for the $1.5 billion in loan guarantees granted by the U.S. government.

According to provisions of the government guarantees, every single one of the 400 banks and insurance companies had to agree to the concessions. They all stood to lose 90 percent of their loans to the company if it failed. Yet Chrysler found them far more difficult to persuade than the entire U.S. Congress. The bankers were constantly squabbling among themselves, and some seemed more inclined to write off their loans than to approve the package of concessions. Chrysler was making one final attempt to push the package through before it ran out of cash.

When the meeting began, Chrysler's chief financial officer, Steve Miller, rose to address the group:

Skills are the instruments through which personality translates intention into accomplished action. Our values and goals give us a direction; our character and will provide the energy and strength to pursue it; our skills are the precision tools through which we direct our energy to achieve the desired result.

Skills are habits of our personality that we have consciously acquired for effective execution of work. Every action requires an expenditure of energy. When an action is done with skill, the energy expended is less, and the act is more perfect. A skill is the capacity to carefully control the energy that is expressed in movements, making them more precise and refined, like the graceful, easy movements of a dancer or a gymnast. An action done with skill is more effective in achieving its purpose and more efficient in its utilization of energy, time, and materials.

We think of structure, systems, and values as characteristics of organizations. We usually think of skills as characteristics of individuals. It is true that a company's skills are expressed through its people, but companies do acquire characteristic skills of their own, which are not merely the sum total of skills possessed by their employees. Different companies acquire a high level of skill in certain areas, which they come to possess independently of the particular people who presently happen to be working for them. These corporate skills characterize a company's behavior and distinguish it from other companies. The courtesy and efficiency of a Marriott hotel receptionist are not just qualities of an individual. They reflect attitudes and skills that are imparted by the company to receptionists in all its hotels. The selling skills and service orientation of IBM representatives have become something of a legend in the marketplace. A combination of careful recruitment and comprehensive training is required to create such a consistently high level of behavior by thousands of employees. Even if most of the present employees at Disneyland left the company, next year you would find the new staff behaving in the same cheerful, friendly manner as the old, because at Disneyland pleasant, courteous behavior is a corporate skill.

Skills are corporate habits. They are the instruments through which an organization expresses its personality. No matter how high a company's values, how strong its character, how coordinated and integrated its systems, the practical results of corporate action depend to a very great extent on the quality of the skills it possesses. Skills are the final link in the chain connecting intentions with actions. The decisions of top management determine a company's direction; the will of the organization determines its strength; systems determine its efficiency; and skills determine the quality of its performance.

You may be wondering why we should be going back to such a basic subject as skills when every company on earth recognized their importance decades ago. Admittedly, systems is an area where every company can improve—but skills? In our view, skills is, too.

Our reasons are twofold. First, there are many types of skills, and traditionally companies recruit and train only for some of them. Every company recognizes the productive value of physical and technical skills. But there are others that are even more essential to corporate success—interpersonal, organizational, and managerial skills—that get much less attention than they deserve. And there are still others—what might be termed psychological skills—that possess an enormous productive power yet are almost completely neglected. Second, there is wide variation in the level or quality of skills companies possess. When we say that an individual is skilled, we imply that the individual possesses both the necessary types of skills for his or her work and a high level of competence in them. The phrase skilled driver does not distinguish the housewife who has been driving her children to school safely for ten years from the professional test-car driver who has survived ten years of high-speed competition without a major accident. The difference is in the level of skill. Here, too, there is an enormous scope for improvement. Let us begin by enumerating the important types of skills required by modern corporations.

A physical skill is one that involves fine control and coordination of physical movements. Typing neatly without errors, balancing dishes on your arm, flipping pancakes without dropping them, counting dollar bills quickly, serving drinks on a bouncing airplane, cleaning glass without leaving streaks on it, packing a suitcase so that clothes do not get wrinkled, keeping one's desk and drawers clean and orderly are basic physical skills required in business.

How many companies actually enumerate all of the physical skills required to do each job perfectly and recruit or train people accordingly? When hiring a typist, companies usually look for one or two skills and very often get only what they looked for. At least one middle-sized company we know did not even do that. It hired several secretaries who did not know how to type! Typing quickly without errors is only part of the job. There are secretaries who can do that but cannot fold a letter into three equal parts or file papers systematically or answer the telephone in a friendly manner or report a message accurately to the boss or remember the work that has been assigned to them. Has your secretary ever come in with a letter you drafted three weeks ago and gave for typing but that was misplaced and never went out? These are not all physical skills, but they are all essential skills for doing the job well. How sweet and easy life becomes when you have a secretary who places papers on your desk in a neat and orderly fashion with each sheet in its right, logical sequence and nothing missing. But for many executives, that is just a dream.

A technical skill is one that requires mental knowledge of a mechanical apparatus or process. Technical skills have been an essential part of production, maintenance, research, and product development for a long time. But with the extension of sophisticated automated equipment to the office, the need for technical skills has dramatically increased, even for nonproduction jobs. Many people are struggling to cope with all these newfangled gadgets. Have you ever noticed cashiers taking longer to ring up a sale on an electronic register than on the old manual machines? Probably the staff received a half-hour demonstration and a few minutes of training. They learn the skill while the customer waits.

Most companies certainly do acquire technical skills in many, if not all, of the areas where they are required. Our point is that very often the level of competence attained is barely the minimum that is necessary to function and only rarely the maximum that is required for high performance. Frequently, complete training is given to only one or two persons in a department, and the others are expected to pick it up from them. IBM learned the value of maximum-level technical skills 40 years ago. Semiskilled machine operators used to sit idle for several hours a week waiting for the set-up person to come around. Then Tom Watson suggested that the operators be taught to set the machines themselves. All that was needed was a few days of additional training. As a result, output and quality of production both increased, and so did job satisfaction. When the company made the jobs bigger, workers were more interested and more enthused about their work. Enlarging the scope of each job and expanding the skills of each worker became corporate policy at IBM.

As an engineer must have the ability to make machines work properly, an executive must be skilled in making systems run smoothly. Organizational skill is the ability to execute work in a methodical and systematic manner. Orderliness and punctuality—the capacity to arrange tasks in the most efficient sequence and to execute them at the appropriate time—are the hallmarks of organizational skill. Of this capacity Lawrence Appley, former president of the American Management Association, said:

It is easy to recognize the presence or absence of organizational skills in a company as a whole. Long lines at the service counters, late departure of shipments, sending the wrong product to the wrong customer or the right product at the wrong time, delays of all types, waste of every description and variety, disorderly stockrooms and missing inventory, misplaced correspondence, lost orders or money, and general confusion are a few of the symptoms that organizational skills are lacking.

Some companies excel in the strength of their organizational skills. Marriott's capacity to open up 15 to 20 major hotels a year while maintaining high-quality service in all its older ones is a premier example of corporate organizational skills.

A social, or interpersonal, skill is the capacity to carry out a task involving other people effectively in a socially acceptable or pleasing manner. Giving a helpful suggestion to a colleague, correcting the errors of a subordinate, revealing a fatal flaw in the boss's pet scheme, selling anything, replying to a letter politely, displaying tact in handling problems and complaints, negotiating a contract, motivating others to work harder, and clearly communicating your ideas and intentions are just a few of the areas in which social skills become important. John Huck, of Merck, says: "Most very good people who don't succeed, don't succeed because they do not relate well with people. Interpersonal skill [when it is absent] is the skill that most frequently is the reason for failure."

Social skills are required at every level and in every department of a company, because interpersonal relationships are an activity in which every employee is engaged almost all of the time. Some companies have recognized the importance of these skills and actively recruit or train for them, particularly in the areas of customer service, negotiations, communications, and sales.

At Delta social skills are of vital importance for expressing one of the company's core values—warm southern hospitality in customer service. Delta wants its flight attendants to treat every passenger as they would a guest in their own home, with natural courtesy and pleasantness. That requires selecting people with friendly and cheerful dispositions and instilling a positive attitude toward the people they serve.

Teamwork and cooperation are near to the heart of Northwestern Mutual's personality, and the company recognizes that interpersonal skills are essential for fostering these values. At Northwestern Mutual, as in many companies we visited, the most common reason for a manager's not getting along is lack of skill in working as part of a team rather than lack of technical competence.

Social skills for communicating can be of critical importance. As Ron Allen, of Delta, put it: "Generally, when we have a problem in the company, it is not a problem in policy or procedure; it is a problem in communication. We managers have not done a good enough job in communicating. We haven't been good listeners, or we haven't been clear enough or taken enough time to communicate the real intent of what we are trying to do." Since good communications are critical for maintaining a family atmosphere, Delta has institutionalized this skill through periodic meetings between top management and personnel all over the country, in which the executives discuss the company's objectives and suggestions from employees.

Communication skills are required at the lowest as well as the highest levels of a company. Anyone can answer a telephone, but not everyone can handle a call from an irate customer who just spent five days trying to make a new computer work properly, only to discover that the machine is defective. That requires calm nerves, a soft voice, plenty of patience and humility, and a genuine capacity to please other people.

Coca-Cola's recent negotiations with 250 independent bottlers illustrate the importance of social skills for negotiating. Under the perpetual-franchise contract Coca-Cola signed in 1899, its U.S. bottlers have a fair amount of leverage over the company. Yet Coca-Cola succeeded in reorganizing and revitalizing the entire distribution system through the negotiation process. As one executive expressed it: "This is a company that has to use persuasion almost above every other business ability. Every ounce that we can pull out of this bottler system is done to a great degree by persuasion."

Physical, technical, organizational, and social skills are capacities that can be possessed by an individual and expressed in his or her work without reference to the work of other people or an organization. But there are also higher-order skills that are broader in their scope and that influence a wider field of activity. These are managerial skills.

An organization consists of many individual resources—people, ideas, time, energy, money, materials, and so forth. It also consists of many physical, technical, social, and organizational skills—orderliness, punctuality, technical know-how, social poise, the ability to communicate, the capacity to organize, and so on. Managerial skills have the ability to combine, coordinate, and integrate the utilization of all these resources and the expression of all these skills in order to accomplish the goals of the organization. Managerial skills have the power to unite all these things for a common purpose. Managerial skills involve the capacity to conceive of a work in its entirety, seeing all the relationships between its component parts, to plan out all the necessary steps for its accomplishment, and to direct execution in order to complete the task with the resources available for the purpose.

Managerial skills are possessed not only by individuals. They can become institutionalized by a company as part of its capacity to execute work. In other words, companies as well as individuals can be characterized by their managerial skills. These skills are of several types.

2. Planning and decision-making skills. Thinking work out in advance, planning, and making decisions are crucial management skills. Planning identifies objectives. Decision making provides the will to achieve them. Unfortunately, these two skills are often exercised in isolation from each other. Planning without deciding is like a Barmecide feast—sheer speculation. Deciding before planning is to act before you think—impulsiveness.

3. Skill in exercising authority. The exercise of authority involves controlling people through discipline and motivating them positively through freedom and delegation of responsibility. The strength for exercising authority comes from the will, but the expression is basically a skill. A great deal of skill is required by a manager or an organization to exercise authority in the right form and measure to suit every situation. When the skill is absent, the organization is either threatened by anarchy as Chrysler was before Iacocca or stifled by authoritarianism as Ford was during the 1930s.

The manager's authority is derived from functional position and role within the organization, not from personality. Yet many managers behave as though the power they wield is their very own and they should be implicitly obeyed, just because they demand it. When authority is exercised as a form of personal power, it rubs people the wrong way and offends them. They become aggressive, defensive, resistant, or resentful.

It requires skill to exercise authority as the job requires it in order to get work done properly without asserting one's ego. It requires skill to know when to explain and when to instruct. Often an instruction cannot be executed properly unless it is preceded by a lengthy explanation to clarify the intention. But when a lengthy explanation is given to justify a disagreeable decision, it erodes the manager's authority. It requires skill to correct the shortcomings of subordinates without creating offense or bitterness. Perhaps the greatest skill of all is required for a manager to relate to subordinates in a friendly manner without undermining his or her authority or relinquishing power by becoming one of the group.

4. Time-management skills. Management of time is a complex skill that involves planning, decision making, organization, and delegation of work. Most managers are continuously involved in work, but that does not mean they maximize the utilization of time. Managing time effectively means to always be doing the most important work to be done and delegating other responsibilities to subordinates. Most managers plan out their schedule for the week or the month. How about planning for tomorrow morning?

The clearer the mind and the more detailed the planning, the better the management of time. But time management also depends on strength of will. The stronger the will, the faster the work is accomplished. When we are tired or indecisive or weak, discussions drag on, decisions get postponed, and work gets delayed.

5. Skill in developing people. The most important managerial skill for the long-term growth of the organization is the ability to identify and develop human potentials, to recognize unexpressed talents in individuals, to help them acquire new or greater skills, and to delegate responsibilities that will bring out and fully utilize all their latent capacities. The greatest power a manager or an organization can wield is not the power of money or technology. It is the power of people. The ultimate art of management is to foster the growth of the organization by fostering the personal growth of the individuals within it. When a corporation has as its highest value the development and fulfillment of the individual, and when it possesses the knowledge and the will to strive toward this goal, it releases power for endless expansion and a self-generating momentum for enduring success.

Finally, there is a whole range of abilities that are basic psychological skills of living. They are extremely useful for managing a wide range of situations in life and become more and more indispensable as one rises to higher levels of human interaction.

2. Listening. Listening is a skill and an art. Most people are anxious to talk and express their ideas. The person who knows how to let the other person speak has the skill and self-control needed for growth. As Delta's Hollis Harris said: "The most important skill for a manager is being able to deal with people. A good people person knows how to listen, has to train himself how to listen. You have to work on it. You have to have the capacity to relate to people at their level." Bill Marriott, Jr., remarked: "Managers get in trouble when they stop listening to their staff. If you stop listening to your people, you're in big trouble."

3. Empathy. Once when Churchill visited the United States to meet President Roosevelt, FDR gave instructions that no one in his party should mention the name of Jawaharlal Nehru, who was then leading India's campaign for total independence from Britain. At the mention of Nehru's name, Churchill had been known to fly into a rage, and FDR wanted to avoid any embarrassing situation. Despite the president's instructions, while he and Churchill were chatting at a reception, one of the guests asked Churchill a question about Nehru. FDR quickly intervened with a blank expression on his face, "Which Nehru?" Churchill was pleased beyond measure by Roosevelt's feigned ignorance and kept his composure.

The capacity to know how another person thinks and feels and to honor his or her thoughts and sentiments is a consummate skill in human relations. One of the keys to Delta's high quality of service is C. E. Woolman's constant admonition to his employees that they "put themselves on the other side of the counter," identify with the needs of the customer. This skill is central to Coca-Cola's management philosophy, too. "You have to be able to see things from the other person's point of view," one executive explained.

5. Self-awareness. Have you ever seen someone repeating the same old folly for the umpteenth time as if it were the very first and being shocked or outraged when it once again leads to trouble? Just about everyone does it. Our lives consist of many patterns that tend to repeat over and over. The capacity to observe these patterns in the lives of other people and of organizations gives a great and very useful knowledge. Observe, for instance, the recurring pattern of crisis that overtakes Chrysler once every decade, getting a little worse each time. The capacity to observe the same patterns in our own lives brings wisdom and power for enduring success.

Controlling the volume and intensity of speech to a soft or moderate level is far more difficult than it sounds. It requires self-restraint. When an idea or question enters the mind, it creates a powerful urge for expression that can be hard to contain. When you are able to master that urge by postponing expression until the proper moment and then speaking in a soft tone, using only the minimum number of words necessary, your words carry a far greater power for effecting results.

One of the most important applications of this skill is in meetings. Each person present in a group has his or her own ideas, opinions, preferences, and suggestions about what should or should not be done. The moment you express your idea, there is a good chance of raising opposition and counterarguments from others, which neutralize or cancel your suggestion, no matter how good the idea may be. But if you restrain the urge for expression, very often the same idea will be expressed by others or your very silence will evoke a more favorable atmosphere and an invitation to speak.

When people speak softly, they think more clearly, work more efficiently, feel calmer and fresher than otherwise. When an organization practices soft speech, it becomes charged with a tremendous power. If the effort starts with top management and works its way down, two things will become apparent. Speaking softly is one of the most effective means of improving performance, and it is also one of the most difficult! All right, if you cannot follow it completely, at least reduce the volume of voice by 10 percent. Efficiency will double.

Each person develops one or two skills to a higher level than the average. This is the individual's strong point, which he or she likes to display as often as possible. If the person is a good mechanic, she takes every opportunity to inspect or comment on the operation of a machine. If the person is a good communicator, he is always looking for somebody to communicate something to. Whether the person's skill is in settling quarrels, judging people, making people happy, designing systems, or cutting costs, he or she constantly seeks opportunities to express it.

So far, so good. The problem comes when someone insists on extending a skill to areas where it is ineffective or inappropriate. "To a hammer," says an old proverb, "everything looks like a nail." The car mechanic starts tinkering with a computer. The communicator communicates confidential information. The cost cutter tries to hold down expenditure in a new experimental R&D project. The manager who makes people happy tries to please customers by reducing prices to below cost or tries to please his or her staff when they disobey legitimate authority.

The skill of skills is to know what is the proper time and place for exercising—and refraining from exercising—each skill. The ultimate skill is the capacity to organize all our other skills, coordinate their expression, and rightly choose which one to express in each particular circumstance.

For even the simplest task, there is an almost infinite gradation of levels of skill, ranging from total incompetence to perfection. Perfection may be a difficult goal to achieve and maintain, but it is a wonderful standard by which to evaluate present performance and motivate improvement.

Take a simple physical skill like typing a letter. Speed is only one criterion of perfection. There are many other skills involved in typing: feeding paper into the typewriter straight, keeping proper margins, punctuating and hyphenating at the appropriate places, spelling correctly, spacing, numbering pages in exactly the same place on each page with the right numbers, error-free correspondence, and so on. Trying to type a single page perfectly according to all these criteria is a challenge for most typists. Typing one page perfectly may have very little value indeed, but acquiring the skill required to type every page perfectly gives a tremendous boost to any organization. There are two reasons. First, doing any activity with imperfect skill generates tension, boredom, frustration, and fatigue. Second, doing any activity with perfect skill releases energy, enthusiasm, and joy. This applies not only to typing and other physical skills but to all types of activities and all levels of skills.

Everyone has a long list of hated tasks, like driving in rush-hour traffic, processing administrative paperwork, keeping travel expense accounts, telling subordinates to shape up or ship out, presenting a new budget to the board, and so forth. But there are people who enjoy every one of these tasks and even find them a thrilling challenge. Many of the things we dislike doing are things we lack the skill to do easily and well. Instead of acquiring the necessary skills, we shun the tasks. When skills are perfect, even driving across Manhattan in late afternoon can be an exhilarating experience. Presenting a budget with brief, clean, confident, and precise explanations can be much more so.

Most acts involve many levels of skill. Driving during rush hour requires more than smooth, quick, coordinated movements. You need calm nerves, patience, and preferably a cheerful disposition that does not get angry or irritated every time another car cuts in front of you. An ability to think while you drive makes the time spent productive and reduces the strain. All of these capacities can be cultivated. How much more complex, challenging, and potentially rewarding are the other activities we consider boring, routine, or despicable? Delivering a speech, keeping accurate travel expense accounts, making a sale, interviewing a job candidate, communicating an idea—all involve a multiplicity of skills that can be improved without limit. The scope for growth is infinite.

On the surface of it, the job of a bank teller offers very little challenge or charm. But if all the relevant skills are present, this need not be so. The following scene took place a few years ago at a southern California bank branch in a middle-class, predominantly white neighborhood on the day before Christmas. All the tellers were at their windows to handle the last-minute rush for Christmas shopping. There were 7 or 8 customers waiting in front of most of the windows, and the tellers were going about their business as usual. But in front of one window there were at least 20 customers waiting patiently, many of them carrying gifts in their hands. The teller at this particular window was a tall, ungainly young black woman with rather unattractive facial features but a broad, almost irresistible, smile. The counters around her were piled high with presents that she had received in the course of the morning, and the long line in front of her window consisted of other customers waiting to wish her a Merry Christmas and perhaps give a present, too.

Everyone knew the secret of the woman's popularity. She was a naturally happy person who took pleasure in making other people happy rather than in just satisfying the customers. We satisfy customers when we provide them with a good-quality product or service at a reasonable price while treating them with courtesy and respect. We please people when we relate to them as individuals with a genuine desire to make them happy. This woman had the physical skills necessary to provide good, prompt service, the social skills required to please people, and the right temperament. Not only were customers pleased but she drew immense personal enjoyment from her work because she was so well suited for it. The right skill and the right personality combined to generate high productivity, the appreciation of customers, and personal fulfillment.

We usually think of a skill as a physical capacity for a particular type of behavior or action, like repairing a machine, writing a report, or communicating an idea. The behavioral part of the skill is what is usually acquired by training. But there is another component to every skill—the knowledge of how and why the skill is effective. Theoretically, the mechanic can repair a machine even without understanding how it works, as many people use computers without any clear idea of how they actually function. But the knowledge part of each skill is extremely important for upgrading the level of performance beyond the minimum. Merck has recognized that the effectiveness of professional representatives can be immeasurably enhanced by broadening and deepening their technical knowledge of medicine. Many Merck representatives are treated as professional peers by physicians because of the depth of their knowledge. Merck also believes that the representatives must know the importance of factual presentations. The company not only insists on honest behavior; it also imparts a clear knowledge of why credibility is so important.

The capacity to sell at the wholesale level depends on a knowledge of the product, how it is produced, how it is utilized, and how it is repaired or maintained. It also depends on a knowledge of the buyers, their business, and their customers. This capacity can be significantly improved by acquiring a greater knowledge of people and human nature as Iacocca did. The same is true for every skill involved in managing people. There is no end to the opportunities for improvement.

The knowledge of a skill has several levels. The operators of a machine must know how to run it. If they know how to repair it, too, their skill as operators is greater. If they understand how the machine is designed and constructed, it is even higher. If they also know the principle upon which the machine functions, then and then only is their knowledge complete, and the skill can be perfected.

The accountant's skill as a controller depends entirely on his or her knowledge of the smallest details of the business. The greater the accountant's knowledge of production, administration, marketing, and research, the greater the capacity to control expenses effectively with maximum benefit to the company.

The role of skills is so ubiquitous and so vital to the success of a company that it has led many to believe that skills alone are the key to excellence and that high values and organizational structures are only window dressing. There is truth in this observation, but it is a partial truth. A well-developed individual skill is a very powerful tool. A well-coordinated assortment of skills is a formidable weapon. But for enduring achievement, skill must be inspired by the vision of a goal and commanded by the determination of an inner will. The Taj Mahal is a work of awesome beauty and perfect skill, but its graceful lines and fine details were inspired by an emperor's love for his deceased wife and his desire to immortalize that love in white marble. Vision and will as much as skill are needed to build a Taj Mahal, a Great Pyramid, a great nation, or a great corporation.

It is not just managerial and psychological skills at the top and physical and technical skills at the bottom that are needed, but all types of skills at all levels of the organization. The highest psychological skills and the simplest physical ones are necessary for the smooth running of a board meeting. A spilled pot of coffee, wrongly typed numbers, a malfunctioning projector, mixed-up papers, a missing chart, an ill-planned agenda, a poorly chosen word or phrase can all interfere with a billion-dollar decision. So, too, the highest psychological and managerial abilities are necessary for perfect functioning on the factory floor or out in the field. A supervisor who acts on a false piece of information, a manager who moves too closely with his or her team to command their obedience, a sales rep who is late for an appointment, a mishandled machine, a wrongly typed price list, a telephone operator who is cold or rude to an important customer—all can have a serious impact on overall corporate performance. And they do have a serious impact on every company every day.

As the organization develops, each individual and collective skill has to become more and more smoothly coordinated and fully integrated with other skills at the same level and at other levels of the organization. Factual reporting by top executives is fruitless if the same habit is not acquired at all the levels of management below, from which data are constantly being received. The same is true of every other skill.

For an organization to become a single, unified, living whole, all these separate strands of skill have to be carefully woven together. This can be done only when top management recognizes the multiplicity of skills it requires for high performance and methodically cultivates them at all levels of the organization by education, training, and proper recruitment. This knowledge has to be translated into precise performance standards for each skill at each level, and these standards must be supported by systems for imparting, monitoring, and evaluating levels of skill.

A Delta flight attendant related a story about perfect skill. She was on a DC-9 landing at Chicago. The nose gear would not come down, so the captain instructed the crew to prepare the passengers for an emergency landing and quick evacuation in case of fire. She recalled her fright as the pilot brought down the plane. Everyone was braced for a heavy jolt. The captain landed on the rear wheels in such a way that a secondary mechanism locked the nose gear down in place. The plane rolled to a halt. "We had the smoothest landing I have ever had on any airplane!" she said. "He had to have done something which was just right. Now I like to fly with him." High corporate achievement and enduring success require the presence of physical, technical, social, organizational, managerial, and psychological skills in every area of functioning and at all levels of the company. Companies that strive for excellence cannot afford to leave anything to chance.