There’s nothing new about examining the lives of successful people to try and work out what made them surpass expectations. Steve Jobs is the most recent example of this. Nearly every management book I’ve read in the last five years has mentioned the transformative effect he had on Apple and Pixar, but the lessons we can take from his unique style are not obvious. For most of us, in fact, attempting to be Steve Jobs would be a disaster. Thorndike asks the question at the beginning of this book.
“Who is the greatest CEO of the last 50 years?”
And as he points out, the overwhelming answer people are likely to give is Jack Welch of General Electric who ran the company for 20 years. During that period shareholders enjoyed compound annual interest of 20.9 per cent. Exceptional. But Thondike believes that Welch “isn’t even in the same zip code as Henry Singleton.” Not a name we are likely to know, but then that is one of Thorndike's points.
We are interested in CEO profiles for more than human interest. Sure, it’s good to know what time they get up, whether they exercise, what their hobbies are and whether they are kind to pets, but what we really want to know is how do they do it? What’s the secret of their success? This book provides an answer of sorts to this, and although we get brief biographies of the CEOs, it’s more about their actions, and how effective analysis is, and how going against the crowd can sometimes be.
The Outsiders aims to identify eight extremely successful CEOs of the past few decades and distil their achievements to learn the “blueprint for success”. Debunking the myth of the well-known CEO as being the most successful, most of the eight are unknown to anyone outside their industries (the one female here, Katherine Graham, CEO of the Washington Post is probably one most will have heard of).
Telling their stories and then focussing on what the “nuts and bolts” of each story, William N. Thorndike, the MD of a private equity firm and a guest lecturer at both Harvard and Stanford Business Schools, sees similarities in their approach. They certainly were successful: outperforming the S&P 500 by over 20 times and their peers by over seven times.
So what did they do that was so different from the rest? The fundamental thing according to Thorndike was to think like investors.
“Each ran a highly decentralized operation, made at least one very large acquisition, developed unusual cash flow-based metrics, and bought back a significant amount of stock. None paid meaningful dividends or provided Wall Street guidance. All received the same combination of derision, wonder and scepticism from their peers and business press. All also enjoyed eye-popping, credulity-straining performance over very long tenures, twenty-plus years on average”
As Thorndike says in his introduction,
“The lessons of these iconoclastic CEOs suggest a new, more nuanced conception of the chief executive’s job, with less emphasis placed on charismatic leadership and more on thoughtful deployment of firm resources.”
There’s no doubt that this is a very American book (all the case studies are from the U.S, ignoring Europe, let along Asia and Latin America), and with the one exception all of the CEOs are male, but I don't think Thorndike can be blamed for that, since in the period he is examining, that was pretty much the way things were. The book is a little samey by the end, with the stories deliberately emphasising the similarities between the CEOs successfully, but interest in them waning a little.
Still, it’s an extremely instructive read, and at its close Thorndike attempts to make these stories relevant to the average reader (not completely successfully - perhaps more could have been done on this) and also provides a checklist for resource allocation decisions. It doesn’t sound exciting, but it’s a useful bit of research, and this book, clearly a labour of love for the writer and the various Harvard Business School students who helped him, is well worth the effort.
Tom Otley There’s nothing new about examining the lives of successful people to try and work out what made them surpass expectations. Steve Jobs is the most recent example of this. Nearly every management book I’ve read in the last five years has mentioned the transformative effect he had on Apple and Pixar, but the lessons we can take from his unique style are not obvious. For most of us, in fact, attempting to be Steve Jobs would be a disaster. Thorndike asks the question at the beginning of this book.
“Who is the greatest CEO of the last 50 years?”
And as he points out, the overwhelming answer people are likely to give is Jack Welch of General Electric who ran the company for 20 years. During that period shareholders enjoyed compound annual interest of 20.9 per cent. Exceptional. But Thondike believes that Welch “isn’t even in the same zip code as Henry Singleton.” Not a name we are likely to know, but then that is one of Thorndike's points.
We are interested in CEO profiles for more than human interest. Sure, it’s good to know what time they get up, whether they exercise, what their hobbies are and whether they are kind to pets, but what we really want to know is how do they do it? What’s the secret of their success? This book provides an answer of sorts to this, and although we get brief biographies of the CEOs, it’s more about their actions, and how effective analysis is, and how going against the crowd can sometimes be.
The Outsiders aims to identify eight extremely successful CEOs of the past few decades and distil their achievements to learn the “blueprint for success”. Debunking the myth of the well-known CEO as being the most successful, most of the eight are unknown to anyone outside their industries (the one female here, Katherine Graham, CEO of the Washington Post is probably one most will have heard of).
Telling their stories and then focussing on what the “nuts and bolts” of each story, William N. Thorndike, the MD of a private equity firm and a guest lecturer at both Harvard and Stanford Business Schools, sees similarities in their approach. They certainly were successful: outperforming the S&P 500 by over 20 times and their peers by over seven times.
So what did they do that was so different from the rest? The fundamental thing according to Thorndike was to think like investors.
“Each ran a highly decentralized operation, made at least one very large acquisition, developed unusual cash flow-based metrics, and bought back a significant amount of stock. None paid meaningful dividends or provided Wall Street guidance. All received the same combination of derision, wonder and scepticism from their peers and business press. All also enjoyed eye-popping, credulity-straining performance over very long tenures, twenty-plus years on average”
As Thorndike says in his introduction,
“The lessons of these iconoclastic CEOs suggest a new, more nuanced conception of the chief executive’s job, with less emphasis placed on charismatic leadership and more on thoughtful deployment of firm resources.”
There’s no doubt that this is a very American book (all the case studies are from the U.S, ignoring Europe, let along Asia and Latin America), and with the one exception all of the CEOs are male, but I don't think Thorndike can be blamed for that, since in the period he is examining, that was pretty much the way things were. The book is a little samey by the end, with the stories deliberately emphasising the similarities between the CEOs successfully, but interest in them waning a little.
Still, it’s an extremely instructive read, and at its close Thorndike attempts to make these stories relevant to the average reader (not completely successfully - perhaps more could have been done on this) and also provides a checklist for resource allocation decisions. It doesn’t sound exciting, but it’s a useful bit of research, and this book, clearly a labour of love for the writer and the various Harvard Business School students who helped him, is well worth the effort.
Tom Otley 
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