Lessons from the Titans: What Companies in the New Economy Can Learn from the Great Industrial Giants to Drive Sustainable Success
Scott Davis, Carter Copeland, and Rob Wertheimer
McGraw-Hill (July 2020)
“What got you here won’t get you there.” Marshal Goldsmith
In fact, I am convinced that whatever gets an organization “here” won’t even allow it to remain wherever and whatever “here” may be.
According to Scott Davis, Carter Copeland, and Rob Wertheimer, they and their associates at Melius Research reviewed more than a century of company data “to see what patterns persist. We have a statistical sampling of winners, losers, lost souls, and comeback stories. The surviving industrial companies have found a way to thrive after decades of competition, cyclical swings, and geopolitical shifts, and their resilience has something to teach the rest of the economy. The challenges don’t end once you’ve disrupted your industry; you just get new ones.”
They focus on several of the Dow Jones Industrials. For example, “few firms have experienced prideful highs that retreated into humiliating lows like Boeing. And we dig into the power of compounding by sharing the story of two amazing value creators: Roper and TransDigm.”
These are among the passages that caught my eye:
o Navigating the Book (Pages xxiv-xxvii)
o General Electric (4-16)
o Jack Welch and GE’s CEO selection process (20-48)
o Boeing and the “airplane business” (50-84)
o Larry Culp: Exemplar of humility, integrity, and transparency (94-102)
o Danaher’s adventures in the modern age (96-99)
o Benchmarking, for better or worse (105-106, 109-110, 170-171, & 299-303)
o The rise and fall and rise of Honeywell (120-151)
o Lessons to be learned from Honeywell (154-171)
o Louis Chenevert and people-focused values (164-169)
o Caterpillar’s self-inflicted wounds (174-194)
o Roper: Exemplar of compounding (196-213)
NOTE: Kudos to Brian Jellison and his management team
o TransDigm: Another exemplar of compounding (216-233)
NOTE: Kudos to Nicholas Howley and his management team
o Stanley Black & Decker’s “repeated successes with one new edge” (236-256)
NOTE: CEO Jim Loree “has pushed the company into its business system update.”
o United Rentals: Success based on “a feedback loop of scale and continuous improvement” (260-279)
It is important to keep in mind that data without rigorous evaluation, verification, and correlation are merely items of information. Davis, Copeland, and Wertheimer, and their Melius collagues have converted an abundance of data into intelligence that serves as ta framework for lessons that can be of incalculable value to leaders in almost any other organization, whatever its size and nature may be. into “This book — a hard-headed explication of what companies can do to thrive and prosper in the coming environment — will equip you with the insights, strategies, and tactics to ensure that you can count your organization among the winners in this new economy.”
Long ago, Oliver Wendell Holmes Jr. observed, “For the simplicity that lies this side of complexity, I would not give a fig, but for the simplicity that lies on the other side of complexity, I would give my life.” I was again reminded of that statement as I worked my way through the final pages of this book. Consider these thoughts shared by Davis, Copeland, and Wertheimer:
“It’s critically important that an organization focus on the little stuff that keeps it on a flywheel. Adopt a business system that focuses the effort. Benchmark externally and to best-in-class organizations. Encourage a humble culture based on continuous improvement. And promote leadership that understands the critical importance of managing costs, generating increasingly higher cash, and redeploying that cash toward the highest returns. Not difficult at all, but somehow it gets lost with each generation of new companies that are so focused on near term success, they forget that ‘long term’ is often right around the corner.”
All of the companies throughout history that became titans (at least for a while) began as a startup. The lessons to be learned from their blunders are probably of much greater value than those learned from their achievements. As I worked my way through the final chapters, I was again reminded of what Sam Walton had learned from Sears, Montgomery Ward, and Kresge when he launched Wal-Mart in 1969 and what Jim Donegal and Jeff Brotman had learned from those three as well as from Wall-mart before co-founding Costco in 1983…and what Jeff Bezos had learned from Borders, Barnes & Noble, and Walden before launching Amazon in 1994.
With rigor and precision, Scott Davis, Carter Copeland, and Rob Wertheimer take their reader from the simplicity of business success to the other side of its complexity where their insights — and especially their conclusions — are more properly placed, supplemented by their “final thoughts.”
This book is a brilliant achievement. Bravo!