The Outsiders

By: William N. Thorndike

Narrated by: Brian Troxell

Length: 5 hrs and 52 mins

Publisher's Summary

"It is impossible to produce superior performance unless you do something different." - John Templeton.

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 audiobook, 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. Instead, they shared specific traits that put them and the companies they led on winning trajectories: a laser-sharp focus on per share value as opposed to earnings or sales growth; an exceptional talent for allocating capital and human resources; and the belief that cash flow, not reported earnings, determines a company's long-term value.

Drawing on years of research and experience, Thorndike tells eye-opening stories, extracting lessons and revealing a compelling alternative model for anyone interested in leading a company or investing in one and reaping extraordinary returns.

Download the accompanying reference guide.

©2012 William N. Thorndike, Jr. (P)2013 Audible, Inc.

Clear, structured presentation. Well narrated. Worth a listen!

This audiobook is certainly worth a listen. The book is laid out in a clear, concise manner with a case study on each of the Outsiders CEOs. Each of the CEOs faced a unique set of obstacles making this book an engrossing listen/read throughout.

Please note that the emphasis is on the success of the CEOs in office rather than on the formative background that made these CEOs unique. As such, the reader/listener has to take on a degree of blind faith in making sure the author uses the right metrics to identify success for these standout CEOs. For example, much is made of about the stock price CAGR during the tenure of the CEO and therefore, a heavy emphasis is placed on various methods to gain leverage (stock buybacks, debt issuance, etc.). Naturally, higher beta/leverage in a growing industry promises to substantial outperformance in a growing industry but taking on more risk in an uncertain market and have the dice fall in your favor doesn't necessarily mark great decision making. Rant over. Good book. Well narrated. Makes you think.

5 people found this helpful

Corporate Leaders Do Make a Difference

What made the experience of listening to The Outsiders the most enjoyable?

It's fascinating to see the similarities and differences in these leaders' strategies. What's remarkable is how their results were so much better than their competitors' in the same industry. These executives didn't achieve their success with blockbuster products or emerging markets. Instead, they focused on capital allocation - taking the funds that the company generated and allocating it toward its highest and best use, whether that use was to buy back stock, reduce debt, pay shareholders, expand the existing business or acquire complementary or integrated businesses.

Was there a moment in the book that particularly moved you?

What I took from this book is that leaders make a huge difference in the performance of a business. And those leaders aren't the people who make the cover of Fortune or Forbes. They're men (mostly) who take actions (divesting assets, buying back stock) that the public generally doesn't notice, but that make their shareholders substantially richer than investors in other companies in the same industry. Who expects an executive who shrinks a defense contractor to a fraction of its former size or sells his visible consumer packaged goods businesses to focus on agricultural feed or buys back her stock when its undervalued to be more successful than Jack Welsh, the standard against which our subjects are measured.

3 people found this helpful

Great summary of the 8 CEOs, lessons to learn from

I think the mix of stories and principles the CEOs blended together are good. Having 8 CEOs makes it interesting because there's a variety to look at. I do think there's a bit glossed over, but still a positive read for learning.

Here are my notes:

- Greedy when others are fearful
- Investing in the right things in big ways, cut costs everywhere else
- Funding acquisitions with debt
- Think fast and slow: fast with your initial gut-reaction, slow with your analysis
- Concentration can decrease risk
- Always do the math: data driven decisions
- Reinvest your earnings to snowball income, sheltered from tax
- Determine the hurdle rate (minimum acceptable returns for investment) and calculate & rank investments by returns and risk, use conservative assumptions
- Money allocation should be owner led, not delegated.

2 people found this helpful

Good depth of stories and business concepts

Strong on financial concepts. Good examples, well-supported. This book leans a little too much on stock repurchases, but otherwise good.

2 people found this helpful

Superb book

Amazing. Finished the book in a couple hours, couldn't put it down. Wish I could see some of the figures but the narrator does a good job with them.

1 person found this helpful

Excellent

Loved it, especially insight on Warren Buffett and Katherine Graham, fascinating story. Lots of great advice.

1 person found this helpful

A Very Good Summary of Value Focused CEOs

The book provides a to-the-point summary of value-focused CEOs, highlighting their business decisions and personality characteristics which seem to have made them effective managers. The book emphasizes these CEOs focusing less on stock growth and more on internal business growth, which then leads to greater stock values. Less focus on buybacks and dividends, with more focus on internal investment, business alignment, and making cuts where necessary.

1 person found this helpful

Great insights regarding capital allocation

The Outsiders explores high-performing, contrarian CEOs with an quantitative bent. The evaluation of performance based on shareholder return is getting back to basics in a world muddied by executives that, while experts in their chosen field, are not master allocators or capital and investment. There are many practical insights to be had, and I will be purchasing a hard copy for further review.

1 person found this helpful

It could have been better

The book's idea is great. The stories are too short to understand or enjoy.

I would give it the plus for opening the door to more investigations regarding theses CEOs

1 person found this helpful

Must read

Must read for any executive. Enjoyable and impactful.

Every CEO has two core responsibilities. 1. Business operations. 2. Capital allocation.

The latter is the difference between good and great.

Highly repetitive

I don't get the hype around this book, Buffets favorite, I am not surprised he mentioned on nearly every business example and invested in them all. Here is how every example goes to save you a credit on purchase.

Decentralized organisation with only 20 staff at HQ empowering staff to make decisions
Re-bought stock at "single digit multiples" when there was a downturn instead of acquisitions because it was a better investment
Always bought about 40% of the stock back, every time 40%??
not tight with money just careful - used on every example
made good acquisitions - because that is just easy to do you know, you just need to make good acquisitions, i always thought bad ones were the goal.
Leveraged stock
Reduced tax payments
Reduced staff and overheads
Sold assets
Streamlined non profitable arms of the business

That is pretty much every example, not how they made these good decisions or how they dealt with maintaining efficiencies in reducing staff, just that they did it.

Anyone who runs a business knows these things are what you do, its how to do them well that is hard. Reducing overheads, what business doesn't want to reduce overheads if it can.

Honestly i have saved you the read, it is the first book I DNF... EVER.

3 people found this helpful

Exceptional

Life changing for business leadership imagery and assumptions. Its the why of brilliance, simply the standard for commercial knowledge.

1 person found this helpful

Great Book! One of the best!

Great Book! One of the best! Very easy to understand. Clear messages. I definitely recommend it!

Dissapointing

the book offers nothing beyond a brief summary of appointments, key development, and departures of people. nothing interesting that you couldn't find otherwise by tapping names into google search

Institutional imperative

The book makes the case that the 8 CEOs were able achieve amazing results by not following institutional imperative. I get a sense that CEOs past, present and future often do follow the institutional imperative and I wanted the book to explore that more. Is there a problem with the current practice of selecting and recruiting CEOs? From an evolutionary perspective, ineffective CEOs should have been outcompeted pretty quickly and disappeared but I do not think that is the case. Until that problem is addressed, institutional imperative will be alive and well and shareholder's capital remains at risk.

Just Incredible

A fascinating deep dive into the practices and mindsets of high performance CEOs. Very well written, zero padding and narrator keeps you engaged the entire time.

Bravo William N. Thorndike and Brian Troxell

capital allocation

Fantastic lessons learnt on capital allocation. One of the most basic but underappreciated concepts. thanks

Excellent Advice and Proven Principles

Success is due to disciplined execution of known principles combined with your competencies. Very straight forward to understand and replicate.

Good Research <br />

This was quite useful. it just made me focus on the importance of cash flow and capital allocation for business health and longevity.

EXCELLENT

Excellent short course on Capital Allocation a must read for all aspiring CEOs investors and the like