It's called research: The Exceptional Company collection has been saved
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The path to discovery is seldom straight. Rarely does the reader of the final research have the opportunity to understand how the journey of discovery unfolded.
A plaque with a quotation hangs from the wall above my desk. It has been attributed, in various forms, to Albert Einstein:
“If we knew what we were doing, it wouldn’t be called research.”
Like so much of what Einstein said, this quotation communicates a very important idea in a very simple way. The path to discovery is seldom straight. Rarely does the reader of the final research have the opportunity to understand how the journey of discovery unfolded.
Einstein’s words came to mind as I read through the articles in “The Exceptional Company” collection. The articles appeared prior to the publication of The Three Rules by Michael Raynor and Mumtaz Ahmed, in May 2013. The book is a culmination of Deloitte’s “Persistence Project.” Ironically, that name identifies both the subject of the research (explaining sustained, superior financial performance) and after seven years in the works, an attribute that helped the authors see it to completion.
These eight articles appeared (with a single exception) in Deloitte Review between January 2010 and January 2013. Together, they provide a rare window into that determined but sometimes meandering journey that is original research.
Several of the articles, especially those that emerged later in the process, are clearly preludes and previews of the final results reported in The Three Rules. “To Thine Own Self Be True,” “Pulling Ahead vs. Catching Up,” and “The Profit Parfait” offer an introduction to the research that culminated in The Three Rules. These articles introduce “Miracle Workers” and “Long Runners” and consider the decomposition of, and important tradeoffs among, the elements of profitability.
Two of the other articles illustrate the underlying motivations of Raynor and Ahmed. “A Random Search for Excellence” attacks what might be the most fundamental question of all—when you see what looks like a superior performer, how do you know if they are really good—or merely lucky? I consider this piece to be required reading. “Rank Ignorance” builds on these findings to help identify the factors that should go into identifying truly superior performance and, by extension, the weaknesses of nearly every “success study” business book that has ever been published. (Hint: As Einstein would argue, it’s all relative.).
Finally, there are the detours. If we were buying DVDs instead of books, these would be the “extras,” the outtakes—and who doesn’t love those. “Survival of the Fattest,” “It’s a Mad, Mad, Mad World,” and “Growth’s Triple Crown” lend credence to the view that the effort was truly a search for insight. These findings, as important as they are, do not appear in The Three Rules. They variously apply the analytical approach of the book to topics of growth and risk, important subjects in their own rights.
Taken as a whole, “The Exceptional Company” collection stands on its own as a source of important insight not just about what drives superior performance, but how to understand performance in multiple dimensions and, even more important, how to tell the difference between skill and simple good fortune. In the delivery of that insight, these “exceptional” articles invite readers to the deeper explorations provided in The Three Rules. The understanding gained there will satisfy the first requirement specified in another of my Einstein favorites:
“You have to learn the rules of the game. And then you have to play better than anyone else.”