The outsiders
What makes a successful CEO? Most people call to mind a familiar definition: "a seasoned manager with deep industry expertise." Others might point to the qualities of today's so-called celebrity CEOs--charisma, virtuoso communication skills, and a confident management style. But what really matters when you run an organization? What is the hallmark of exceptional CEO performance? Quite simply, it is the returns for the shareholders of that company over the long term. In this refreshing, counterintuitive book, author Will Thorndike brings to bear the analytical wisdom of a successful career in investing, closely evaluating the performance of companies and their leaders. You will meet eight individualistic CEOs whose firms' average returns outperformed the S&P 500 by a factor of twenty--in other words, an investment of $10,000 with each of these CEOs, on average, would have been worth over $1.5 million twenty-five years later. You may not know all their names, but you will recognize their companies: General Cinema, Ralston Purina, The Washington Post Company, Berkshire Hathaway, General Dynamics, Capital Cities Broadcasting, TCI, and Teledyne. In The Outsiders, you'll learn the traits and methods--striking for their consistency and relentless rationality--that helped these unique leaders achieve such exceptional performance. Humble, unassuming, and often frugal, these "outsiders" shunned Wall Street and the press, and shied away from the hottest new management trends.
Stats for nerds
7recommend
12mentions
11people
2013–2026years
58% recommend42% neutral
Mentions per year
What Hacker News says
- After reading many business books: central planning works great as long as the benefits of centralisation outweigh the drawbacks of centralisation. After reading Outsiders by Thorndike, I’m convinced that the drawbacks outweigh the benefits surprisingly rapidly because distributed companies are shown to run much better. Historically, it has been the same with countries/states, according to Taleb. Although large countries had benefits and could stay alive for long times, small city states (e.g., Florence centuries ago or Switzerland today) and decentralized nations (e.g., Habsburg or the EU), run much more better.
- "In no way do we think that Berkshire shares should be repurchased at simply any price. I emphasize that point because American CEOs have an embarrassing record of devoting more company funds to repurchases when prices have risen than when they have tanked. Our approach is exactly the reverse."
For many companies, the approach seems to be "we've paid our dividends, we have some cash left over, let's buy back our own stock" - with a complete disregard for the valuation. Buying your own shares at too high a price (see GE and US airlines) is equivalent to incinerating money, whereas buybacks at low prices (Teledyne, Apple) do wonders for returns. If you run a listed business you have to think long and hard about what your firm is worth without just looking at the market price. William Thorndike's book "The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success" [0] makes that point beautifully
Right now it is interesting to observe that many companies are doing the opposite of buybacks at a record clip, the share issuance of firms like Twillio is astounding.
[0] https://www.goodreads.com/book/show/13586932-the-outsiders
- This article is great and actually comes to one of the core tenets from the book "The Outsiders."
If you had to choose a single core task for the CEO of a company, it is to create free cash flow and decide best how to spend it, aka capital allocation.
Book Source: https://smile.amazon.com/Outsiders-Unconventional-Radically-...
- Not specific to just tech teams, but I loved The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success by William Thorndike. So many great notes about leadership and successfully running a business in general.
https://www.amazon.com/Outsiders-Unconventional-Radically-Ra...
- Here's some: with why I like them
Thinking, problem solving related:
Superforecasting by Philip Tetlock: accurate forecasting
Thinking fast and slow by Daniel Kahneman: how to avoid bias
Misbehaving: like thinking fast and slow but more hilarious
The checklist manifesto by Atul Gawande: the power of simple process
From Darwin to Munger by Peter Bevelin: lots of mental models to add to your latticework
Business management:
The Outsiders by William Thorndike: capital allocation
The hard thing about hard things by Ben Horowitz: some mental models for managers facing the real-life struggles of startups
Zero to One by Peter Thiel and Blake masters: for the chapter on what kinds of business are always going to be tough (i.e. ones in perfectly competitive industries)
Worldview:
The Better Angels of Our Nature: Why violence has declined
The making of modern economics by Mark Skousen (audiobook): explains various economic ideas through telling the history of the fathers of those ideas.
Investing:
You can be a stock market genius by Joel Greenblatt: where to look for undervaluation
The Essays of Warren Buffett by Lawrence Cunningham: Buffett's thoughts in Buffett's words, neatly categorised by topic
Competition Demystified by Bruce Greenwald: how to identify a high quality business
- There's an excellent book (you're probably aware of) called The Outsiders. It compares the results of operations focused CEO's like Welch to capital allocators like Buffett, Singleton, and Malone. The thesis is that overtime, the good cap allocators just blow everyone else out of the water.
http://www.amazon.com/Outsiders-Unconventional-Radically-Rat...
“An outstanding book about CEOs who excelled at capital allocation.” — Warren Buffett
