Partner Article

Bdaily talks CEO success with author William Thorndike

The Outsiders is a new book by Founder and Managing Director of Housatonic Partners, William N. Thorndike, which examines what makes a CEO successful. The book, released on Tuesday, investigates how eight unconventional Chief Executives achieved great things, not by growing sales and earnings, but by focussing on share value. Bdaily spoke to Will about what interested him about the CEOs he looks at in the book, and how they became successful.

Will told Bdaily how the book came about, and how he selected his eight CEOs.

“The Outsiders grew out of a talk at a conference for the people who run my company. I profiled the Teledyne chief executive, Henry Singleton, in this speech, and this turned into a project at Harvard Business School. This project then looked at comparing Singleton’s performance with his peers, and that is what the book came out of.

“I chose the eight CEOs by comparing them with their peers, and those who significantly outperformed were the ones who were worthy of study. These Chief Executives were doing something different to the market, but doing something very similar to each other. This group is pretty unique.”

Will profiled the CEOs of Capital Cities Broadcasting, Tom Murphy, defence firm General Dynamics’ Bill Anders, and TCI’s John Malone in his book. He also included Katherine Graham from The Washington Post Company and CEO of Ralston Purina, Bill Stiritz.

So what is it that sets these Chief Executives apart, and why have they not been revered before? Will went into what he thinks are the characteristics of a great CEO.

“Each one of these CEOs intentionally positioned themselves as an “Outsider”, which is what the book is named after. They ignored industry conventions and stood apart from the rest, which is what makes them iconoclastic figures.

“Charisma is overrated, but it’s not unimportant. It is necessary to engender loyalty and foster a strong culture in a company, however, it is not important to have charisma to be a great CEO. It is more the ability to think independently; this is more important in the long term for the business. The brand of the company is critical, and this is built up over time, not through charisma.”

Bdaily asked Will what he thought was the most common mistake made by CEOs. He told us:

“I would say the most commonly made mistake, and it is an understandable one, is the desire to grow for the sake of growth. The examples I look at in “The Outsiders” show that by shrinking your share base and repurchasing stock, a business can increase its individual share value. This concept of success if not wedded to the idea that bigger is better.”

We asked if Will thought there was a steadfast model for success, and what advice he would give to CEOs today.

“I do believe there is a model for success, yes. If CEOs focus on capital allocation and systematically calculate your returns. Use this to make a rational decisions on investments. Make a conscious decision about how you allocate your time, and choose to spend time thinking about the value of your business, rather than how is is represented; this is how the CEO’s I’ve looked at found success.”

This was posted in Bdaily's Members' News section by Miranda Dobson .