William Thorndike on the Traits and Approaches of Outsider CEOs

Shai Dardashti, managing director of The Manual of Ideas, recently had the pleasure of interviewing William N. Thorndike, author of The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success.

Will is founder and a managing director of Housatonic Partners, a private equity firm. He is a graduate of Harvard College and the Stanford Graduate School of Business and has been a guest lecturer at the Harvard and Stanford business schools. He is a director of eight companies and two not-for-profit organizations and lives in the Boston area with his wife and two children

The following transcript has been edited for space and clarity.

MOI Global: The Outsiders is described by Forbes as “one of the most important business books in America,” and Warren Buffett is on record stating this title is “an outstanding book about CEOs who excel at capital allocation.” With that backdrop, The Outsiders is a landmark book and we are truly grateful that Will Thorndike is sharing his direct insights with fellow members of MOI Global. As we begin our conversation, let’s explore how the book came about.

William Thorndike: I work at Housatonic Partners and every other year we host a conference for the CEOs of our portfolio companies. The conference format usually includes a keynote speaker, someone like Jim Collins or Michael Lewis. We’ve had Nick Howley, Tom Might, Andy Grove come and other CEOs who would be familiar to the Manual of Ideas community.

We also include a series of practical talks, and about ten years ago, I raised my hand and said I’d lead one of these sessions. I then needed to figure out what I was going to talk about. I had read about Henry Singleton and his long-term shareholder returns at Teledyne. We had an HBS student working for us that summer, between years at business school, who was terrific. I asked if he wanted to do an independent study in his second year to assist with the research on Singleton and the comparable group of 1960s era conglomerates. The student had just committed to another independent study, but connected me with his tennis doubles partner Aleem Choudhry, who had been a Phi Beta Kappa in Physics from Stanford.

Aleem and I worked on the Singleton project together over the following year, preparing for this talk. The first semester we did very detailed analytical work on Teledyne and the comparable companies and in the second semester we spoke to everyone alive who had anything to do with the Teledyne. Unfortunately, Singleton was deceased, but we spoke to members of the management team, prominent investors, Board members, competitors, employees, investment bankers, and consultants – a broad mix of people. I just found the project to be substantially more intellectually interesting than I had expected.

As I was in the process of writing up our findings – Aleem introduced me to a very talented student in the class behind him – who was also looking for independent study for his second year of studies, John Gilligan. John was a Phi Beta Kappa in Chemistry from Harvard and we together ended up researching Capital Cities.

So it started out as a presentation at our CEO conference, and then – just by happenstance – I got into a very talented vein of Harvard Business School second year students. I did about one case study per year after, so the book took a very long time, but grew organically from that first project.

MOI: I think the audience would appreciate learning more about Housatonic Partners.

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