Capital Cities Broadcasting was a media company owning television stations, radio stations, and print publications. This was done at a time when repurchases were highly controversial. The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success de Thorndike, William N. sur AbeBooks.fr - ISBN 10 : 1422162672 - ISBN 13 : 9781422162675 - Harvard Business Review Press - 2012 - Couverture rigide The key elements are: What matters in the long term is the increase in per-share value, Long term value is determined by cash flows not reported earnings, Organizational decentralization improves efficiency and reduces costs, Rely on independent thinking over expert opinion, One of the best investment opportunities is the company’s stock, Patience, with occasional swiftness in deal-making, is the strategy for acquisitions. The Outsiders is a book about eight CEOs whose companies drastically outperformed the market, primarily through a focus on capital allocation. Read The Outsiders : Eight Unconventional CEOs And Their Radically Rational Blueprint For Success book reviews & author details and more at Amazon.in. During his 29 years, Murphy outperformed the S&P by 16.7 times and his peers by four times. “The Outsiders” kicked his ass: …in their zigging, they followed a virtually identical blueprint: they disdained dividends, made disciplined (occasionally large) acquisitions, used leverage selectively, bought back a lot of stock, minimized taxes, ran decentralized organizations, and focused on cash flow over reported net income. Buffett’s top stock positions have been held for over 20 years on average. This acquisition laid the foundation for Berkshire’s extraordinary run. You really only need to know three things to evaluate a CEO’s greatness: the compound annual return to shareholders during his or her tenure and the return over the same period for peer companies and for the broader market (usually measured by the S&P 500). “Basically, CEOs have five essential choices for deploying capital—investing in existing operations, acquiring other businesses, issuing dividends, paying down debt, or repurchasing stock—and three alternatives for raising it—tapping internal cash flow, issuing debt, or raising equity. A book that received high praise from Warren Buffett, The Outsiders chronicles the unconventional techniques that led eight CEOs to outperform the S&P 500 by an astounding twenty times. Booktopia has The Outsiders, Eight Unconventional CEOs and Their Radically Rational Blueprint for Success by William N. Thorndike. They rarely paid dividends and emphasized cash flows over net revenue. Accessibility is very important to us and we are continually improving, if you have any issues accessing anything on our site, please contact firstname.lastname@example.org or call (817) 968-3932, The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success, Rich Dad's Cashflow Quadrant: Rich Dad's Guide to Financial Freedom, You Exec LLC, 18 Bartol Street #1090, San Francisco, CA 94133, US. As Phil Beuth, an early employee, told me, “The company was careful, not just cheap.”, The company’s hiring practices were equally unconventional. It’s lucrative for companies to sell to Berkshire because it gives freedom from Wall Street scrutiny and near unlimited access to capital. The best way to measure a CEO’s performance is to measure the increase in per-share value during their tenure. Berkshire had a highly concentrated portfolio, and investments were held for very long periods. As Charlie Munger described it to me, their companies were “an odd blend of decentralized operations and highly centralized capital allocation,” and this mix of loose and tight, of delegation and hierarchy, proved to be a very powerful counter to the institutional imperative. They did not, however, delegate capital allocation decisions. [Singleton] did not buy indiscriminately, avoiding turnaround situations, and focusing instead on profitable, growing companies with leading market positions, often in niche markets. The Outsiders: How Unconventional CEOs Routinely Beat the Market Chris Preston March 13, 2014 at 07:58 Growth Stocks Investing Investing in Stocks Stocks Tom Murphy never wanted to run Capital Cities media company the conventional way. In most cases these CEO’s were not attention junkies and were not only great capital allocators but also time allocators. It was then the largest non-oil and gas transaction in business history, worth more than 100% of Capital Cities enterprise value. Three years of cost-cutting yielded $14 million in cash, which Buffett used to buy National Indemnity, a niche insurance company. Over the long term, this systematic, methodical blend of low buying and high selling produced exceptional returns for shareholders. Neither had ay prior industry experience; both produced excellent results. [pg 41, Singleton]. I may be accurate, but I’m not precise.”, Ironically, this most technically savvy of cable CEOs was typically the last to implement new technology, preferring the role of technological “settler” to that of “pioneer.” Malone appreciated how difficult and expensive it was to implement new technologies, and preferred to wait and let his peers prove the economic viability of new services, saying of an early-1980s decision to delay the introduction of a new setup box, “We lost no major ground by waiting to invest. They rarely appeared on the covers of business publications and did not write books of management advice. In contrast, CBS bought into notions of “diversification” and “synergy,” expanding into unknown new domains and creating highly centralized management structures. Anders agreed to sell the business on the spot, even though it shrank the company to half its former size and left it with only its tank and submarine units. Unfortunately, pioneers in cable technology often have arrows in their backs.”. You may not know all their names, but you will recognize their companies: General Cinema, Ralston Purina, The Washington Post Company, … Their situations and circumstances, however, are not remotely similar (nor are the lessons from their careers remotely transferable) to those of the vast majority of business executives. He bought 16% of the company and gave Anders the proxy to vote Berkshire’s shares. This cash flow was used to fund the acquisition of new companies. The iconoclast CEOs profiled in this book share an outsider’s worldview. William N. Thorndike’s 2012 book, The Outsiders, about eight of the most successful CEOs in US history, provides a framework for thinking about Tencent’s business. As stated in the Preface to the book all eight CEOs believed, amongst other things that: Capital allocation is a CEO’s most important job Like others in this book, relied on simple but powerful rules in evaluating transactions. For example, Murphy and Burke realized early on that the TV station that was number one in local news ended up with a disproportionate share of the market’s advertising revenue. He never participated in a hostile takeover situation, and every major transaction that the company completed was sourced via direct contact with sellers, such as Walter Annenberg of Triangle and Leonard Goldenson of ABC. 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. HD38.2.T476 2012 658.4′09—dc23 2012012451. The Outsiders is a great book that looks at eight CEO’s who produced above average returns for shareholders over the long term. He discusses how an emphasis on sound capital allocation – a key skill that BBH seeks in the management teams of the businesses it invests in – helped the CEOs profiled achieve success. Instead of investing the cash, Anders chose to return most of it to shareholders through innovative tax-efficient techniques. Burke, with his operations and integration expertise, would quickly improve margins and profitability. This led him to invest in consumer brands and media properties — businesses with “franchises,” dominant market positions, or brand names. When the Berlin Wall came down in 1989, defense stocks crashed. Buffett was switching at mid career from a proven, lucrative investment approach that focused on the balance sheet and tangible assets, to an entirely different one that looked to the future and emphasized the income statement and hard-to-quantify assets like brand names and market share. See all formats and editions Hide other formats and editions. Mason Hawkins, Chairman and CEO, Southeastern Asset Management— “ The Outsiders is a must-read for leaders—and aspiring leaders—striving to become exceptional CEOs, and for investors interested in partnering with exceptional stewards of corporate capital.” Walter Kiechel, author, The Lords of Strategy— The author, William N. Thorndike, Jr. especially likes to compare them against Jack Welch who returned 20% over a period that the S&P averaged 14% annual returns. When Chabraja left, the company had more employees than during Anders’s time, but only a quarter as many at the headquarters. It was a rare combination of both operational excellence and capital allocation. What counts in the long run is the increase in. General Dynamics got $2.5 billion by reduction of its over-investment in inventory, capital equipment, and R&D and decreased headcount by 60%. These moves generated another $2.5 billion in cash and left the company with only its tank and submarine units. [pg 24], Burke recalls Smith saying, “The system in place corrupts you with so much autonomy and authority that you can’t imagine leaving.” [pg 27], Murphy also frequently used debt to fund acquisitions, once summarizing his approach as “always, we’ve … taken the assets once we’ve paid them off and leveraged them again to buy other assets.” [pg 27]. Buffett calls this low level of activity as “inactivity bordering on sloth.” A sale to Berkshire gives companies freedom from Wall Street scrutiny and near unlimited access to capital. The defense industry’s excess capacity meant that companies had to either shrink businesses or grow through acquisitions. In the 2012-15 period, outsiders made up 38% of incoming CEOs in telecoms, 32% in utilities, 29% in health care, 28% in energy and 26% in financial services. Two-thirds would come from market growth and one-third from acquisitions. CEOs have first-order effects on firms, which makes an efficient CEO labor market important. This was a large bet that generated a compound return of 22.4% over 19 years. According to Charlie Munger, Berkshire’s long-term success was due to its ability to “generate funds at 3$ and invest them at 13%”. Burke’s job was to create the free cash flow, and Murphy’s was to spend it. The problem with outsider CEOs. Decentralized organizations release entrepreneurial energy and keep both costs and “rancor” down. As a result of this, $2.5 billion was freed up. Free delivery on qualified orders. This was the era of conglomerates, who enjoyed high price-to-earnings(P/E) ratios at a time when the cost of acquiring companies was far lesser in P/E ratio terms. He and his CFO, Jerry Jerome, devised a unique metric that they termed the Teledyne return, which by averaging cash flow and net income for each business unit, emphasized cash generation and became the basis for bonus compensation for all business unit general managers. Buffett called this low level of activity as “inactivity bordering on sloth.”. It was an environment that selected for and promoted independent, entrepreneurial managers. Stiritz was fiercely independent, and actively disdained the advice of outside advisers. In 3 years, Anders generated a remarkable $5 billion in cash. The outsider CEOs, like Stonecipher and Tillerson, tended to dance when everyone else was on the sidelines and to cling shyly to the periphery when the music was loudest. From this point on, the company never made another material purchase and never issued another share of stock. In his 29-year term, Murphy made the largest deal in the history of the broadcast industry thrice. He decided the subject for his talk would be Henry Singleton, the former CEO of Teledyne Technologies and someone who built an outstanding reputation for his capital allocation skills. Get the culture working with you. During Warren Buffett’s tenure of 40 years, Berkshire’s returns outperformed the S&P by over a hundredfold. Singleton retired in 1991 with an extraordinary record. The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint | Books, Nonfiction | eBay! This company generated vast amounts of floats, premium income in advance of losses, that Buffett effectively invested in securities and purchasing companies like the Omaha Sun. In this episode, we read Warren Buffett's #1 book recommendation from 2012, The Outsiders. Unnecessary perks like private dining rooms were cut, and more than 1500 workers were laid off. Surplus real estate, including the Manhattan headquarters, was sold. Float from Berkshire’s insurance businesses grew from $237 million in 1970 to over $70 billion in 2011. The deal was worth more than 100% of Capital Cities’ enterprise value. Carly Fiorina speaks at the Republican Leadership Summit Saturday, April 18, 2015, in Nashua, N.H. (AP Photo/Jim Cole) By Noel Tichy. In a defense industry with highly centralized, bureaucratic organizations the trio made an active push for decentralization. In the three years Anders led the company, it generated a remarkable $5 billion in cash. CEOs who run the businesses usually don’t hear from Buffett. The CEO Success study shows that outsiders not only are increasingly seen as a viable option in a planned succession but also may perform better. They were willing to wait long periods to identify compelling investment or acquisition opportunities. In 1970, he purchased broadcaster Triangle Communication for an astounding $120 million. I. (Another is found a few points below, “Overview: Things CEOs should know.). They did not give chamber of commerce speeches, and they did not attend Davos. In the ’70s and early ’80s, Murphy entered the newspaper and cable industries by buying the Forth Worth Telegram and the Kansas City Star and Cablecom, respectively. It’s important, however, to recognize that this obsession with repurchases represented an evolution in thinking for Singleton, who, earlier in his career when he was building Teledyne, had been an active and highly effective issuer of stock. To do this, he relied on Burke’s operations and integration expertise. Les meilleures offres pour The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint sont sur eBay Comparez les prix et les spécificités des produits neufs et d'occasion Pleins d'articles en livraison gratuite! PDF The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success by William N. Thorndike EPUB Download Ready for reading and downloading. The company’s guiding human resource philosophy, repeated ad infinitum by Murphy, was to “hire the best people you can and leave them alone.” As Burke told me, the company’s extreme decentralized approach “kept both costs and rancor down.” [pg 23], As Burke [COO] said in describing his early years in Albany, “Murphy delegates to the point of anarchy.”. Although the outsider CEOs were an extraordinarily talented group, their advantage relative to their peers was on of temperament, not intellect. Bennett this avuncular, outgoing exterior, however, lurked a razor-sharp business mind. Amazon.in - Buy The Outsiders : Eight Unconventional CEOs And Their Radically Rational Blueprint For Success book online at best prices in India on Amazon.in. Teledyne emphasized extreme decentralization and drove managerial accountability to the lowest levels. Burke immediately stepped in to improve operations, reduce perks, and sell off excess real estate. Industrial management. In this vein, Bill James, who had been running the flagship radio property, WJR in Detroit, was tapped to run the cable division, and John Sias, previously head of the publishing division, took over the ABC Network. Murphy’s strategy was to acquire Radio and TV stations, improve operations, pay down debt, and acquire again. The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success Book Description: Author: William N. Thorndike Published :Harvard Business Review Press Pages : Awards : Includes the stories of eight extraordinary CEOs, who ignored or defied the conventional wisdom of their time and applied a common set of principles to achieve remarkable and enduring success. … Boards that hire an outsider CEO must deliberately adopt the mindset that it will give the new CEO some discretion and allow the new CEO to take some risks. In 1967, Singleton made George Roberts the President of Teledyne and removed himself from operations to focus on capital allocation. By the end of the ’80s, Buffett had significant positions in the Washington Post, GEICO, and General Foods. As a result of this pricing discipline, he never prevailed in an auction, although he participated in many. Murphy aggressively repurchased shares, buying close to 50% of shares at over $1.8billion in his career. Malone’s simple rule allowed him to act quickly when opportunity presented itself. To determined margin of safety, Buffett relied now on discounted cash flows and private market values instead of Graham’s beloved net working capital calculation. Frete GRÁTIS em milhares de produtos com o Amazon Prime. Cash flow, not reported earnings, is what determines long-term value. Meet eight iconoclastic leaders who helmed firms where returns on average outperformed the S&P 500 by over 20 times. 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. Outsider CEOs tended to be strategically flexible, changing company strategy as the circumstances required. Download at full speed with unlimited bandwidth PDF The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success by William N. Thorndike EPUB Download just one click. Shortly thereafter, Singleton became the first of the conglomerators to stop acquiring. In mid-1969, with the multiple on his stock falling and acquisition prices rising, he abruptly dismissed his acquisition team. These assets were again leveraged to buy newer assets. Over 29 years Tom Murphy of Capital Cities produced a 19.9% compounded annual return. ISBN-10: The Outsiders: Eight Unconventional CEOs and Their Radically William N. Thorndike, The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success ISBN: 1422162672 | 2012 Motley Fool Money: 03.21.2014 - CastRoller shares some investing insights from his book, The Outsiders: Eight Unconventional CEOs Outsiders: Eight Unconventional CEOs and Their … Despite its importance, most business schools don’t have courses on capital allocation. It was valued at $1 billion when revenues were $10 billion. From 1963 to 1990, he delivered a 20.4% compound annual interest rate to shareholders, thus outperforming the S&P twelvefold. He was also comfortable walking away from transactions that did not meet the rule. July 1, 2015 at 2:02 PM EDT. The business world has traditionally divided itself into two basic camps: those who run companies and those who invest in them. By this measure, the legendary Jack Welch of General Motors outperformed the S&P by a factor of three. Stunningly, the majority of the ABC debt was paid within three years of the acquisition. In this book, you'll learn the consistent and rational traits that helped … It’s common to see Business Schools and Wall Street emphasize an obsessive focus on operational efficiency. Encontre diversos livros escritos por Thorndike, William N., Jr. com ótimos preços. Acquisitions were far and away the largest outlets for the company’s capital during Murphy’s tenure. The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success "An outstanding book about CEOs who excelled at capital allocation." The conventional wisdom at the time was that hard assets (gold, timber, and the like) were the most effective inflation hedges. Jack Welch of General Motors, widely considered to be an all-time great, outperformed the S&P 500 by a factor of three. When their stock was cheap, they bought it (often in large quantities), and when it was expensive, they used it to buy other companies or to raise inexpensive capital to fund future growth. This stunned Wall Street and General Dynamics’s stock price rose rapidly. PDF The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success by William N. Thorndike EPUB Download review, torrent download locations. Over the next 13 years, he beat the S&P every year without employing leverage. From 1984 to 1996, Singleton pioneered spinoffs to manage succession and unlock the full value of the company’s insurance operations. One chapter is on director Tom Murphy, who Buffett says is "overall the best business manager I've ever met." Almost all of Berkshire’s investment capital was generated internally, avoiding debt and leverage. From 1971 to 1984, Teledyne witnessed a forty-fold increase in earnings per share. From 1984 to 1996, Singleton focused on management succession. Murphy used this cash flow to pay loans ahead of schedule and leveraged these assets again to buy new assets. Available in epub, pdf and mobi format PDF The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success by William N. Thorndike EPUB Download, reviewed by readers. In fact, Singleton can be seen as a sort of porto-buffett, and there are uncanny similarities between these two virtuoso CEOs, as the following list demonstrates. Unlike other media company CEOs, he stayed out of the public eye (although this became more difficult after the ABC acquisition). What made this possible? Two thirds would come from market growth and improving margins. In another example, Burke insisted on spending substation ally more money to upgrade the Fort Worth printing plant than Phil Meek had requested, realizing the importance of color printing in maintaining the Telegram’s long-term competitive position. Moi, qui ai appris de Jean Gabin à aimer les femmes, je me trouve maintenant avec la photographie de Margaret Thatcher devant moi – dans le journal, bien entendu, qu’en bonne citoyenne d’après la Révolution française j’achète tous les matins – et je commence à penser que quelque chose est allé de travers durant ces trente dernières années de démocratie. These CEOs waited for years to identify the right investment opportunity. The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success - Ebook written by William N. Thorndike. Singleton ignored this orthodoxy, and between 1972 and 1984, in eight separate tender offers, he bought back an astonishing 90 percent of Teledyne’s outstanding shares. In the case of Capital Cities, Tom Murphy managed strategy, acquisitions, and capital allocation, while Dan Burke managed operations. In 1965, he bought Berkshire Hathaway, then a small textile company. A book that received high praise from Warren Buffett, The Outsiderschronicles the unconventional techniques that led eight CEOs to outperform the S&P 500 by an astounding twenty times. To increase per-share value, they were even ready to shrink company size and share base. And float generation over growth in premium revenue that fund subsequent investments and across market! Of paper ( or usually attract ) the spotlight humor and for his insurance.... 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