The Outsiders Quotes

“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. Think of these options collectively as a tool kit. Over the long term, returns for shareholders will be determined largely by the decisions a CEO makes in choosing which tools to use (and which to avoid) among these various options. Stated simply, two companies with identical operating results and different approaches to allocating capital will derive two very different long-term outcomes for shareholders.”
― William N. Thorndike Jr., The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

“The business of business is a lot of little decisions every day mixed up with a few big decisions.”
― William N. Thorndike, The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

“Success leaves traces. —John Templeton”
― William N. Thorndike, The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

“Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks. —Warren Buffett”
― William N. Thorndike Jr., The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

“There is a fundamental humility to decentralization, an admission that headquarters does not have all the answers and that much of the real value is created by local managers in the field.”
― William N. Thorndike, The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

“It is impossible to produce superior performance unless you do something different. —John Templeton”
― William N. Thorndike, The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

“It’s remarkable how much value can be created by a small group of really talented people. —David Wargo, Putnam Investments”
― William N. Thorndike Jr., The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

“The lessons of these iconoclastic CEOs suggest a new, more nuanced conception of the chief executive’s job, with less emphasis placed on charismatic leadership and more on careful deployment of firm resources.”
― William N. Thorndike Jr., The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

“hire the best people you can and leave them alone.”
― William N. Thorndike, The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

“You are right not because others agree with you, but because your facts and reasoning are sound. —Benjamin Graham”
― William N. Thorndike, The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

“What makes him a leader is precisely that he is able to think things through for himself. —William Deresiewicz, lecture to West Point plebe class, October 2009”
― William N. Thorndike Jr., The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

“better to pay interest than taxes.”
― William N. Thorndike Jr., The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

“In contrast, Murphy’s goal was to make his company more valuable. As he said to me, “The goal is not to have the longest train, but to arrive at the station first using the least fuel.”2”
― William N. Thorndike Jr., The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

“After orbiting the moon, mundane business problems did not faze him.”
― William N. Thorndike, The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

“One of the most important decisions any CEO makes is how he spends his time—specifically, how much time he spends in three essential areas: management of operations, capital allocation, and investor relations.”
― William N. Thorndike, The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

“There is a fundamental humility to decentralization, an admission that headquarters does not have all the answers”
― William N. Thorndike, The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

“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).”
― William N. Thorndike, The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

“was, however, a very frugal buyer, preferring opportunistic open-market purchases to larger tenders that might raise the stock price prematurely. These purchases were consistently made when P/E multiples were at cyclical low points.”
― William N. Thorndike Jr., The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

“Murphy and Burke’s unique blend of operating and capital allocation skills created a “perpetual motion machine for returns.”12 Capital Cities’ admirers also included Bill Ruane of Ruane, Cunniff, and David Wargo of State Street Research.”
― William N. Thorndike Jr., The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

“According to recent studies, somewhere around two-thirds of all acquisitions actually destroy value for shareholders.”
― William N. Thorndike Jr., The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

“Interestingly, Murphy never borrowed money to fund a share repurchase, preferring to utilize leverage for the purchase of operating businesses.”
― William N. Thorndike Jr., The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

“Murphy’s approach to the roll-up was different. He moved slowly, developed real operational expertise, and focused on a small number of large acquisitions that he knew to be high-probability bets. Under Murphy, Capital Cities combined excellence in both operations and capital allocation to an unusual degree. As Murphy told me,”
― William N. Thorndike Jr., The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

“focus on industries with attractive economic characteristics, selectively use leverage to buy occasional large properties, improve operations, pay down debt, and repeat. As”
― William N. Thorndike Jr., The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

“The goal is not to have the longest train, but to arrive at the station first using the least fuel.”
― William N. Thorndike Jr., The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

“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.”
― William N. Thorndike Jr., The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

“CEOs need to do two things well to be successful: run their operations efficiently and deploy the cash generated by those operations.”
― William N. Thorndike Jr., The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

“Buffett’s approach to managing Berkshire’s stock investments has been distinguished by two primary characteristics: a high degree of concentration and extremely long holding periods. In each of these areas, his thinking is unconventional.”
― William N. Thorndike Jr., The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

“The OOC met weekly, and Smith actively encouraged debate among his top executives. Longtime General Cinema investment banker Caesar Sweitzer characterized these sessions as “wrestling matches conducted in a constructive, collegial way.”4”
― William N. Thorndike Jr., The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

“Smith was even willing to be outvoted by the other OOC members. Woody Ives, the company’s talented CFO, remembers one of his proudest moments at General Cinema (Ives later left to lead a successful turnaround at Eastern Resources), when a joint venture to enter the cable business with Comcast and CBS was shot down by the board after Smith let Ives voice a dissenting opinion: “He gave me permission to publicly disagree with him in front of the Board. Very few CEOs would have done that.”5”
― William N. Thorndike Jr., The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

“Each ran a highly decentralized organization; made at least one very large acquisition; developed unusual, cash flow–based metrics; and bought back a significant amount of stock. None paid meaningful dividends or provided Wall Street guidance. All received the same combination of derision, wonder, and skepticism from their”
― William N. Thorndike Jr., The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success