The Outsiders: 8 Unconventional Ceo Book Review

Name: Vy Phan

Investments

Dr. Suhler

October 31, 2014

The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

Thorndike writes The Outsiders: Eight Unconventional CEOs and their Radically Rational Blueprint for Success, and the book becomes one of the must-read books that Warren Buffet suggests. As the book provides people an insight look of eight successful CEOs, people can learn from them ideas of investments. This essay will briefly summarizes the book, points out the key points as well as the strengths and weakness of it. In the end, I will propose an investment strategy based on the knowledge gained from the book.

Thorndike and a talented group of Harvard MBA students do a research on eight unconventional and successful CEOs. All of these CEOs pass two tests: outperforming companies in their peer group, and beating the performance of General Electric's Jack Welch, who widely considered one of the finest managers in business history. These eight CEOs are Tom Murphy of “Capital City Broadcasting”, Henry Singleton of “Teledyne”, Bill Anders of “General Dynamics”, John Malone of “TCI”, Katharina Graham of “The Washington Post Company”, Bill Stiritz of “Ralson Purina”, Dick Smith of “General Cinema” and Warren Buffett of “Berkshire Hathaway”. It is interesting to find out that these eight CEOs share some common characteristics, which are contrast to the stereotype of CEOs. If people usually think that successful CEOs are communicative, fast-moving, and greedy, the eight CEOs mentioned in the book are frugal, humiliated, independent in thinking, and conservative. In addition to common personal characteristics, they also share similar investment and management strategies.

These strategies are key points of the book and also interesting lessons for me to learn. First of all, they run a decentralized organization which releases entrepreneurial energy and keeps both costs and “rancor” down. For example, when Tom Murphy...