Our research and experience have taught us that four laws provide most of the fundamental knowledge necessary to guide a successful manager's initial diagnosis and road to results. If you don't understand and master the fundamentals of business, all the expert knowledge, breakthrough ideas and cutting-edge tools won't help you much.
We conducted an analysis of a randomly selected group of 225 CEOs who left their companies in 2006. Of the 85 of this group that left or were fired for underperformance, we found that about 90 percent of the cases could be traced back to a failure to heed one or more of the four laws. In contrast, we studied and interviewed a set of CEOs who exemplified a keen understanding of these fundamental laws; their companies outperformed relevant indices on average by 5 to 1. Knowing the laws and their ramifications seem to be the hallmark of a great manager.
While some of the concepts have been around for a while, they are frequently misunderstood and misused. Managers forget them. Business schools may give them only cursory attention. This is surprising to us. It would be like a soccer coach not running fundamental footwork and passing drills. Indeed, though they are experienced businesspeople, our clients often find that the four laws provide much or most of the insight they need to clarify their options and help them make their toughest decisions.
To learn more, read summaries of each of the four laws: