Finally, an answer to the ultimate business question: How do some companies achieve exceptional performance over the long term?
In every sector, there’s an outlier. In the phar-maceutical industry, it’s Merck. In discount retail, it’s Family Dollar. It used to be Wrig-ley in candy and Maytag in appliances. Other superstars have been hidden in plain sight, like Heartland Express in trucking or Linear Technology in semiconductors. How do these exceptional companies deliver superior perfor-mance over the long run despite facing the same constraints as competitors? What are they doing differently? What can we learn from them?
Michael E. Raynor and Mumtaz Ahmed have analyzed data on more than 25,000 com-panies spanning forty-five years. Their five-year study began with a sophisticated statistical analysis to identify which companies have truly exceptional performance, 344 in all.
In collaboration with teams of researchers, Raynor and Ahmed then put a carefully chosen representative sample of twenty-seven com-panies under the microscope to uncover what made the stand-out performers different. They found that exceptional companies, when faced with difficult decisions, follow three rules:
MICHAEL E. RAYNOR is a director at Deloitte Services LP, where he explores cor-porate strategy, innovation, and growth with clients in a variety of industries. He is the coauthor, with Clay-ton Christensen, of The Innovator’s Solu-tion, and the author of the bestselling and critically acclaimed The Strategy Paradox and The Innovator’s Manifesto.
MUMTAZ AHMED is a principal in Deloitte Consulting LLP and the chief strategy officer of Deloitte LLP, responsible for the U.S. firm’s strategy, corporate development, innovation, eminence, and brand.