book review
The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success by Will Thorndike ’82 Reviewed by Greg Maffei ‘78
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ill Thorndike opens his book, The
to repurchase stock and shrink their companies when they thought their stock was inexpensive, a focus on taxes, prudent use of fixed-return debt to enhance equity returns, a long-term, non-promotional approach, and non-charismatic personalities. These Ceos were iconoclasts, willing to pursue their own path, and brought an outsider’s perspective to their businesses, even if they had been involved with them for long periods. Thorndike traces this approach back to david dodd and Benjamin Graham’s famous treatise on investing and what he characterizes as “radical rationality.” Thorndike is a good, clear writer and provides ample support for many of his theses. he brings the Ceos and their companies to life. The book has fun tidbits: speculation on whether Bill Anders of General dynamics would sell his mother if the price were right; advice provided by the consulting firm Mckinsey & Company which proves wrong; and wonderful quotes from the ever-quotable Buffett. occasionally, it feels like Thorndike stretches his theories across a diverse set of facts, and one can quibble with characterizations—it would be hard to say that Warren Buffett is not charismatic or promotional! Given the subject matter, there are a lot of numbers, which may not be to your taste. overall, this is a thoughtful, eminently readable book with some good lessons about business, whether or not you are a Ceo.
Greg Maffei ’78 is the CEO of Liberty Media, a media company that includes interests in Sirius XM, Charter Communications, Live Nation Ticketmaster, and the Atlanta Braves, and has worked for several high-profile CEOs, including Bill Gates, Larry Ellison, and John Malone.
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Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success, with a provocative question, “Who’s the greatest Ceo of the last 50 years?” You might say Jack Welch or Steve Jobs (and that might say something about your view of the world). Thorndike, a successful private equity managing director and founder at housatonic Partners, has an investment-oriented view of greatness. he defines it as high return to shareholders compared to peer companies and the overall market. While some high-profile executives have had very good financial success, Thorndike—in an attempt to determine principles for greatness—examines eight Ceos with outstanding shareholder returns, some of whom are famous (like Warren Buffett) and some of whom are more obscure (like henry Singleton of Teledyne), and at least one of whom had a Groton tie (J. Atwood “Woody” ives ’55 was the longtime CFo and business partner of dick Smith of General Cinema). Full disclosure: i was given this book by one of our investors who is a friend of Thorndike’s. My chairman, John Malone, is one of the eight Ceos profiled from his TCi days, and the company of which i am Ceo, liberty Media, the successor to TCi, is favorably mentioned in the book. Thorndike centers on the requirement for excellent capital allocation, investing and re-investing a company’s assets and cash flow wisely. he outlines common characteristics of the eight Ceos and their companies. These include an investor’s mentality, a focus on shareholder returns rather than empire building, decentralized operations, lean rather than extravagant cultures, a willingness