The Monthly Book Report
brought to you by Murphy Business
The winner of the dubious honor of following Decisive (reviewed rather glowingly in this space last month) is William Thorndike, author of the excellent-if-not-quite-as-Average-Joe-applicable The Outsiders. The title might bring you back to a rather popular piece of teen gangland fiction that was made into Ralph Macchio’s other 80’s movie, but focus people – it’s unrelated. The outsiders profiled here are eight renegade CEOs, you know, the type who operate outside the cardboard container. Okay, so these CEOs are known for running massive companies and you’re saying, “Hey, fancy boy, how does this apply to my small operation?” and perhaps you have a point. But note that Uncle Warren Buffett’s fingerprints are all over this work, and if you’re thinking you can’t learn something from him, I guess we can all assume you work every day for the love of it, for the tingle up the spine, right? If in fact you haven’t quite socked away all the money you’ll need for decades to come, or if you’re simply trying to figure out better ways to position against your competition, read on.
What these eight folks (Buffett among them) share in common are idiosyncratic views of the marketplace, decentralized home office operations, and a healthy disdain of Wall Street. And while surely all of them climbed their respective ladders aided by some level of ego, we’re not talking about the rock star, talk show circuit types. (Warning: If Jack Welch is your boy, note that he’s knocked around a bit in these pages, in that not only did the featured CEOs far outperform their direct peers and the S&P 500, in doing so they kinda left Welch looking like a kid behind a lemonade stand in the dead of winter.) It is stated that Tom Murphy, one-time head of Capital Cities Broadcasting, ran management retreats where a bartender “couldn’t tell who the bosses were.” We’re talking about no-nonsense types, those who believe every manager can and should be held accountable to a certain standard of performance. Lesson: set performance standards, hire people you believe can deliver, turn ’em loose, measure metrics, and repeat. And naturally, there’s not a lot of room for chickens here. The late Katharine Graham, profiled because she steered the Washington Post Company to greatness, made wildly unpopular – and equally brilliant – hiring decisions and stared down unions in an era when doing so may have made turning your key in the ignition a daily exercise in heart palpitations.
The lessons shared in The Outsiders are many and the stories compelling. The one ding is how all eight executives are portrayed as walk-on-water types. You have to figure at least one of them was caught chasing a secretary around the desk every now and again, right? (Not that we seek such tawdry tales in our serious business reading!) And when they were feeding the performance monster, accomplished in part through strategic sell-offs, layoffs, etc. was there no downside, no upset? Not much of the sort is mentioned here… and overall that’s okay as it’s not the point. The reader walks away with several ideas on eliminating bureaucracy, instilling autonomy, and building loyalty all while making stockholders very wealthy. Thorndike shares “a proven method for navigating the unpredictable, untidy world of business.” Pause here and look around. If what you see is not tidy, perhaps it’s time to wonder aloud whether or not that’s acceptable.
Originally posted by Chris Bond on November 14, 2014 at 1:00pm