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The Three Rules
Book

The Three Rules

How Exceptional Companies Think

Michael E. Raynor and Mumtaz Ahmed
Portfolio, 2013

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Editorial Rating

8

Qualities

  • Innovative
  • Applicable

Recommendation

How do some companies turn in exceptional performance year after year? Deloitte’s Michael E. Raynor and Mumtaz Ahmed apply a disciplined, statistically rigorous approach to determine what makes top companies great. The fruit of their impressive research is three pivotal rules any company can follow. To uncover this strategic knowledge, the authors worked as diligent “corporate paleontologists,” carefully analyzing the “fossil record” of high-performing companies to discover what makes them special. The authors back up their research with 110 pages of detailed appendices that reflect the meritorious rigor of their approach. Their intense research methods are solid and praiseworthy, but their opaque writing style is wearying, as is their criticism of other books that offer business advice based on anecdotes and one-off observations. getAbstract recommends their thorough analysis and practical findings to CEOs, COOs, business owners, organizational strategists, business professors, entrepreneurs, investors and avid students of the application of managerial theory to practical problems.

Take-Aways

  • To determine why some companies perform exceptionally over long timespans, researchers analyzed 45 years of data concerning more than 25,000 firms.
  • The study utilized return on assets (ROA) as its leading measure of business success.
  • Consistent top performers are “Miracle Workers”; firms with admirable extended records are “Long Runners”; and solid also-rans are “Average Joes.”

About the Authors

Michael E. Raynor, a director at Deloitte Services LP, is the author of The Strategy Paradox and The Innovator’s Manifesto. Mumtaz Ahmed is chief strategy officer at Deloitte Consulting LLP.

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