The Outsiders

The Outsiders, Eight Unconventional CEOs and Their Radically Rational Blueprint for Success, William N. Thorndike, Jr., Harvard Business Review Press 2012

Of the eight fascinating corporate leaders named by Thorndike - 

1.  Tom Murphy and Capital Cities Broadcasting

2.  Henry Singleton and Teledyne

3.  Bill Anders and General Dynamics

4.  John Malone and TCI

5.  Katherine Graham, and The Washington Post Company

6.  Bill Stiritz and Ralston Purina

7.  Dick Smith and General Cinema

8.  Warren Buffett and Berkshire Hathaway, 

which one would you most want to do a business trip with?  I've found that Thursday night flights followed by Friday morning plant tours and Friday private meetings have always been the best way - beyond studying the financials - to get behind the company into the executive mindset.   And in Thorndike's research, Henry Singleton, the MIT mathematician who drove Teledyne to 20.4 percent compound return, stands out.  Key to Singleton's Teledyne success was his grasp of capital allocation.... hmmm.... not inventions, not early industry domination, but capital allocation...

Singleton's path was not always stone-free, however.  Look at what happened with Packard Bell.  Likewise you may notice others of Thorndike's chosen eight teetering, but there is no argument with Warren Buffett,  whom Thorndike quotes freely throughout the book.  Buffett not only makes money-making look, like Federer's backhand, amazingly smooth and easy, but he's a survivor.  As reader's will note from Buffett Parnership (percentage) results, Table 8-1, comparing Buffett's stellar returns to the Dow Jones, he's got more than magic going on - the variance averages 21.8 percent in favor of Buffeft Parnership! And the list of Buffett's investments, starting with American Express in 1964, down through the Washington Post, GEICO, Wells Fargo, Freddie Mac, General Dynamics, General Foods, and Coca-Cola shows us what Thorndike calls his "deep-rooted contrarianism," what another analyst labels "manic-depressive (relative to the market)."  

Thorndike's book, a short and an easy fun read, takes us one level up from the prevalent corporate blather and avalanche of real-time corporate data, to the crazy simple world of some very unusual CEOs.  For that I say thanks!