The Breakthrough Imperative
The Breakthrough Imperative
The Breakthrough Imperative
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Mark Gottfredson & Steve Schaubert Buy the book  |  |  Contact

To uncover the keys to success, we drew partly on our joint 50-plus years of consulting experience. We have seen and worked with many great managers over the years. We have also seen how companies can get themselves into trouble.

In addition, we drew on extensive research into corporate performance, both our own research and that of our colleagues at Bain & Company.

One set of studies, for instance, was originally conducted by our partner Chris Zook, author of a trilogy of books entitled Profit from the Core, Beyond the Core, and Unstoppable. Zook compiled a database tracking the performance of 1,804 public companies in the G8 economies over 10 years. His three books help companies understand when to focus on their core business, when to look for adjacencies to expand the core, and when the core must be redefined.

We used the latest version of Zook's database to focus on a different set of concerns, namely the role of individual managers in improving a company's performance. First we took the 202 companies in the database that maintained profitable growth of at least 5.5 percent a year over the 10-year period ending in 2005, a group Zook had labeled "sustained-value creators." Next, we examined the tenure of the 413 CEOs leading these companies during this period, and we compared the stock performance under each leader with a broader index.

Overall, we found that for the first six months of a CEO's tenure, these companies' average stock performance tracked the relevant index almost exactly: the ratio was about 1.1 to 1. Performance then crept up steadily, but not until nearly six years after the CEO took office was the company outperforming the index by an average of 2 to 1. It took the full average tenure of nine years for these companies to outperform by 3 to 1.

So we knew that one individual could make a big difference over time. But how could general managers get better results more quickly? What specific practices make some more successful in just two or three years than peers with equally stellar track records and leadership attributes?

To answer these questions, we turned from study to experience. We interviewed more than 40 leaders from industry and the nonprofit sector, most of whom had held multiple general-manager positions en route to CEO. Many were people we or our colleagues had come to know in the course of our work. Many others came from our search for successful general managers. We spoke with leaders from companies as diverse as Northrop Grumman Ship Systems, Burger King, the Australian telephone company Telstra, and the Vienna-based plastics company Borealis. We interviewed people who had turned in exceptional performance in the past, such as Paul Fulton—the man who introduced L'eggs pantyhose, one of the blockbuster consumer products of all time. We talked with leaders of business units, such as Kathleen Ligocki of Ford of Mexico, and of nonprofit organizations, including Teach For America's Wendy Kopp and Jim Yong Kim of Partners In Health, the pathbreaking international organization cofounded by Paul Farmer. We interviewed the mayor of Providence, Rhode Island, who has done much to turn around that city's government in a short period of time. We also studied (through public sources) the success of several dozen other managers, and we have included some of their stories here. The stock prices of the companies we feature outperformed relevant indices on average by 5 to 1, substantially more than the baseline of the sustained-value creators.

All of this study revealed a striking commonality in successful general managers' approach to their task. Like engineers designing a mission to Mars, they understand and apply the basic laws that govern what they do. Using those basics, they map out where they are starting from, where they are going, and how they plan to get there. And then they actually do it.

Chris Zook's book trilogy helps companies understand their core business, when to look for adjacencies and when to redefine. Learn more about the books at
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