In 1982 Tom Peters and Bob Waterman published their seminal book, In Search of Excellence. It coincided with the Regan Revolution—when lowering taxes pushed America out of 22% interest rates and helped defeat 20% inflation. Jimmy Carter had been tossed from office, 1): because he thought Iranians who held Americans hostage, were reasonable, and 2): the economy was in the worst shape it had been since the depression.(Contrary to press reports our current economy—definitely a mess—is in the worst shape since the Carter administration—not since the Depression of the 30’s).

The genesis of their book was that even in tough times, some companies were doing it right. They focused on management. Their thesis that companies like Nordstrom’s, Frito Lay, and Xerox were successful, was because they adhered to 8 basic principles. (Google them).

The book was a smash success and Waterman and Peters became rock stars on the lecture circuit.

Today, it is in vogue to put down their work because (as happens in capitalism) many of their favorite companies flopped. Atari, Data General, DEC were examples of “good” companies which took it on the chin.

There’s no space to analyze the reasons here—suffice it to say, that in good times and bad there will always be companies which outperform the market and many which under perform. That is our system. Were Peters and Waterman wrong because many of their favorite companies failed? Hardly. If the formula for success were simple, we’d all be rich.

Often, it’s not just a good company philosophy which makes for success. Did you read this week about the failure of the Neiman ranch? Great idea. Humane philosophy. Why did they go under?

Sometimes it’s simply timing which is the difference between success or failure. Was Wham-O (the maker of Hula Hoop) a well run company—or did they just hit the market at the right time with the right product at the right price?

Black Swans are everywhere!

Today, we’re all headed into a rough economic cycle. Who will succeed? Who will fail?

Were I a betting man, I know where I’d toss my chips. And it wouldn’t be government largess.

We saw proof positive Saturday night, right here in St. Helena. Many criticize our town for being elitist, affluent, snobbish, closed to outsiders. At times we are all of that. But we are great, too.

The Napa Valley is built on a business unlike any other in the world. There are lots of company towns. Some are built on Lumber, tobacco, oil, or lobsters.
We’re built on the grape.

Alas, wine is different from other commodities. We get graded—publicly. Score in the 90’s and folks will beat a path to your door. Get a 70 and it’s time to find another profession. The list of failures up here is legion.

It takes a strong ego to compete in the Wine Industry. But excellence begets excellence—and mediocrity begets mediocrity.

You don’t have to live between Oakville and Rutherford to understand the dedication to excellence found in private enterprises like Harlan, Colgin, Araujo (a personal favorite) or a dozen other “cult” wines. What Mike Chellini or Rick Forman do with Chardonnay will be written about for generations. David Wight’s Lewelling (Wight Vineyard) is still “undiscovered”—though try to buy it.

Wine goes with food. It’s no accident the search for excellence in vineyards has brought culinary artists from all over to the Napa Valley. It’s a tough way to make a buck. Good wine can be sold anywhere. Folks have to come here to sample local culinary fare. More than one restaurant has gone under—and more will follow—not because they ain’t great—but because there just aren’t enough bodies in the Valley to fill the seats.

Locals are spoiled. We expect great wine and fine food. It’s what we do.
But I was struck Saturday night by the perfection in other businesses—and how they appeared to be beating the recession. Take the Cameo Cinema. It was jammed. It may be the best movie house in the country. Revitalized by Charlotte Wagner, wife of a great winemaker, new management has come made it a cornerstone of the community—-not just with first run hits, but with community events, live showings (the inauguration and Academy Awards), plus digital opera and ballet—it’s unreal.

The Cameo sits between two world class art galleries, Ira Wolk’s and the Caldwell’s. All tourist towns have galleries—but few can compete with these.

They’re across the street from surely the best candy store in the country—Woodhouse Chocolate. I rarely eat chocolate, but have you seen the designs in the windows?
What about Taylor’s Refresher? Packed on Saturday. (Wasn’t that way, back in the day, when 50 cents got you a burger and chocolate shake). Show me a better “fast food” joint anywhere!

And Jake’s Bike shop? Even Lance Armstrong goes in there.

So it’s not about $500 wine, or 13 course meals. It’s about the role of excellence in a down economy.

Every time one turns on the TV, she hears our President talking doom and gloom. No doubt he’s right. But look around our own neighborhood and you will see certain folks succeeding in spite of the obstacles. I don’t know what, specifically, they’re doing, but the market place seems to like it. The Cameo is jammed. Art is “flying off the walls.” TaylorE2s is so crowded “no one goes there, anymore.”

Finding a need and filling it—at the right price. Individuals do that. Governments can’t. It’s that simple.