Summit Speaker: William N. Thorndike Jr.
Matthew Rarey chats with William Thorndike, a speaker at the 2014 Legatus Summit . . .
One of the more unknown, but highly anticipated speakers at Legatus’ upcoming Summit is William N. Thorndike Jr., who founded Housatonic Partners, a Boston-based private equity firm, in 1994. He currently serves as its managing partner.
Last year, Thorndike authored The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success. He profiled iconoclasts whose character and business traits were radically opposed to the “rock star” CEO image, which Thorndike says is exemplified by Donald Trump.
The seven men and one woman he wrote about had persevered in business in unconventional ways that all led to one destination: measurable success over the long term. They scored extraordinarily well according to Thorndike’s index for achievement:
“In assessing performance, what matters isn’t the absolute rate of return but the return relative to peers and the market. You really only need to know three things to evaluate a CEO’s greatness: the compound annual return to shareholders during his or her tenure and the return over the same period for peer companies and for the broader market.”
Thorndike spoke with Legatus editorial assistant Matthew A. Rarey.
What inspired your invitation to the Summit?
Tom Monaghan read The Outsiders and some of the ideas and themes resonated with him. That’s not surprising if you look at how he ran Domino’s. He thought they might resonate with CEOs attending the Summit, too, such as how best to manage businesses for a variety of shareholders over time.
What is the thrust of The Outsiders?
The overarching idea is for CEOs to be successful over the long term by optimizing profitability and investing profits back in the company. As I note in the book, sometimes the best investment opportunity is your own stock.
This book is really about deployment capitalization over longer periods of time, say 20 years, how owners can achieve that. Tom Murphy was masterful at doing that when he was CEO of Capital Cities/ABC, Inc.
Murphy is one of your featured “iconoclasts.” How do he and other such CEOs differ from “rock star” CEOs?
They tended to be first-time CEOs. They kept a low profile in their interactions with the press and Wall Street, comfortable going their own way even if it meant causing comment and disdain among their peer group and the media. They were generally humble and analytical — not charismatic backslappers. They were focused intently on creating long-term value for shareholders and in maintaining strong relationships with customers and employees. And they were often legendarily frugal, but not in their devotion to family. They were all devoted to them.
Should The Outsiders particularly resonate with Catholic business leaders?
Well, there’s this deep consistency between running a business successfully over the long term and a set of broader values and principles consistent with Christian faith. Running a business with long-term benefits for customers, employees, and shareholders means having long-term consistency. This requires enduring ethical principles compatible with Christianity.