The Three Rules:How Exceptional Companies Think

How do some companies achieve exceptional performance over the long term?

In our summary of The Three Rules, Michael E. Raynor and Mumtaz Ahmed provide an answer to the ultimate business question. 

Raynor is a director at Deloitte Services LP, the co-author, with Clayton Christensen, of The Innovator’s Solution, and the author of The Strategy Paradoxand The Innovator’s Manifesto.  Ahmed is a principal in Deloitte Consulting LLP and the chief strategy officer of Deloitte LLP.

As they explain, exceptional companies deliver superior performance over the long run, despite facing the same constraints as competitors.  What are they doing differently?  What can we learn from them?

Raynor and Ahmed have analyzed data on more than 25,000 companies spanning 45 years.  Their five-year study began with a sophisticated statistical analysis to identify which companies have truly exceptional performance, 344 in all.

In collaboration with teams of researchers, Raynor and Ahmed then put a carefully chosen representative sample of 27 companies under the microscope to uncover what made the stand-out performers different.  They found that exceptional companies, when faced with difficult decisions, follow three rules that provide an indispensable compass that any company can use to chart its own path to greatness. 

By embracing the three rules, you can increase the chance that your organization will become truly exceptional.