Here are 10 key takeaways from William Thorndike’s book “The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success”:

  1. Focus on Capital Allocation: The most important job of a CEO is allocating the company’s capital, not just managing operations. Example: Henry Singleton of Teledyne focused on capital allocation and made over 130 acquisitions using his company’s undervalued stock.

  2. Decentralize Operations: Pushing decision-making down to the business unit level keeps costs down and entrepreneurial energy high. Example: Tom Murphy of Capital Cities/ABC had a decentralized structure with local managers having significant autonomy.

  3. Avoid Diversification: Stick to businesses you know well and can be #1 or #2 in. Example: Bill Anders of General Dynamics focused the company on its core defense business after becoming CEO.

  4. Repurchase Shares: Buy back your own undervalued stock to increase per-share value. Example: Henry Singleton bought back over 90% of Teledyne’s shares when they became undervalued.

  5. Maintain Pricing Discipline: Don’t chase growth at the expense of returns. Example: John Malone of TCI focused on cash flow and returns rather than market share.

  6. Eschew Debt: Maintain a conservative balance sheet with low debt levels. Example: Malone kept TCI’s debt low to maintain flexibility.

  7. Avoid Wall Street: Minimize time spent on investor relations and conferences. Example: Singleton rarely spoke to Wall Street analysts.

  8. Hire Well, Manage Little: Empower talented managers and get out of their way. Example: Buffett hires well and focuses on capital allocation rather than operations.

  9. Patience and Boldness: Be patient for the right opportunity, then be bold. Example: Malone made bold moves like acquiring cable systems when others were selling.

  10. Humility and Rationality: Maintain a rational, unemotional approach and avoid ego. Example: The CEOs in the book were not charismatic leaders but quiet, rational capital allocators.