Book Club Friday's (#28) - The Outsiders
The Outsiders is a book written by William N Thorndike about 8 unconventional CEO's who aren't (for the most part) well known, but can be classed as some of the greatest CEO's of our time.
A little bit about the Authour
William Thorndike is a graduate of Harvard College and Stanford Graduate School of Business. He is the founder and managing director of Housatonic Partners, an investment firm with offices in Boston and San Francisco. He lives in the Boston area with his wife and two children.
A little bit about the book
What makes a successful CEO?
Most people are strong believers in experience, pointing fingers towards Malcolm Gladwell's claim that to be exceptional as a CEO or in fact any profession, you need to of amounted 10,000 hours of experience over the years.
However, Willam N. Thorndike perfectly highlights 8 CEOs from unconventional backgrounds with little to no experience in their fields. To put things into perspective, if you invested $10,000 with each of these individuals, (on average) it would amount to $1.5million 25 years later.
You may not recognise their names, but you would almost certainly recognise most of the companies they represent.
What is most interesting to me is how they differ from the idolized CEOs that deal with wall street most of the time. The Outsiders focus far more on the importance of:
- Capital Allocation
- Human resource allocation
- Tax understanding
- Decentralized organization structure
- No Wall Street guidance
- Repurchase of their own company's stock
- Big on acquisitions
In other words, these Outsiders were great investors as well as business leaders. They were very idiosyncratic and lived rather normal lives, not attracting the attention other CEOs get.
I loved this book because I love investing and I think it is a very necessary read for anyone seeking to invest in the best companies, or for anyone to efficiently run a great company.