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 pharmaceutical industry, it's Merck. In discount retail, it's Family Dollar. It used to be Wrigley in candy and Maytag in appliances. How do these exceptional companies delivery superior performance 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 companies spanning forty-five years. In collaboration with teams of researchers they then put a carefully chosen sample of twenty-seven companies under the microscope to uncover what made the standout performers different.
They found that exceptional companies, when faced with difficult decisions, follow three rules:
1. Better before cheaper. They rarely compete on price.
2. Revenue before cost. They drive profits through price and volume, not thrift.
3. There are no other rules. Everything else is up for grabs, and they are willing to change anything to remain true to the first two rules.
The Three Rules is built on a powerful combination of large-scale data analysis and indepth case studies. Reading it will increase the chance that your organization becomes truly exceptional.
'Here's the bad news: no advice can come with a credible promise of perpetual superiority. As every glider pilot knows, takeoffs are optional but landings are mandatory.
Here's the good news: even if defeating gravity is impossible, we can realistically hope to defy it. Despite the inevitablility of a return to earth, some glider pilots do fly higher, faster and further than others.
For these pilots, gliding is not a passive experience. They understand their aircraft and the conditions, and use that understanding to find lift or to achieve just the right angle of attack.
Similarly, some companies are exceptional. They are able to oversome inertia, and adapt to competitive or environmental changes. They create better performance and sustain it for far longer than anyone has a right to expect. Nothing lasts for ever, but that is not the goal. The objective is to deliver the best possible performance for as long as possible.
We can show you how to do that. By consciously adopting the three rules that define how exceptional companies think - better before cheaper, revenue before cost, and there are no other rules - you can reasonabley hope to deny gravity its due for just that much longer.'