Three proven rules: discovering how exceptional companies think

Abstract

Purpose

After many years of researching data for thousands of companies the authors identified a population of 377 exceptional companies in two categories: 199 Miracle Workers, or the best of the best, and 178 Long Runners – still exceptional, but at a lower level. This paper aims to examine these two categories.

Design/methodology/approach

With the flaws of previous searches for the secret to exceptional corporate performance in mind, the authors began theirs with a radical premise: that what constitutes stand‐out performance is not obvious. It is not enough simply to set up a performance benchmark, no matter how demanding it might seem, and see who clears it.

Findings

By studying how exceptional companies thought about decisions they made the authors derived three rules that were key to outstanding performance.

Research limitations/implications

The methodology behind the research is complex and deserves careful study. It is discussed in several chapters of the authors' new book Three Rules: How Exceptional Companies Beat the Odds.

Practical implications

The authors' research suggests that the most profitable course of action is to devote resources to tackling the hard problem of creating anew the non‐price value customers will pay for, not the hard problem of how to remain profitable at lower prices.

Originality/value

These three rules apply to almost every decision within the purview of senior management. When applying them, the authors conclude that the most profitable course of action is to devote company resources to tackling the hard problem of creating anew the non‐price value customers will pay for, not the hard problem of how to remain profitable at lower prices.

Citation

Raynor, M.E. and Ahmed, M. (2013), "Three proven rules: discovering how exceptional companies think", Strategy & Leadership, Vol. 41 No. 3, pp. 5-10. https://doi.org/10.1108/10878571311323163