Here?s a book that flies in the face of the zeitgeist. Subtitled, ?Eight Unconventional CEOS and their radically rational blueprint for success?, it offers lessons from business leaders who have delivered consistently great financial returns in the long term.

Partly in response to the cult of the celebrity CEO, personified by Jack Welch, Thorndike identified all the US companies who had outperformed both their industry peers and GE under Jack Welch over a period of many years. He found only eight.

Who are these outstanding business leaders?? Apart from John Malone, whose Liberty Media recently bought Virgin Media, and Warren Buffett, the legendary ?Sage of Omaha?, you probably won?t have heard of them. Yet their returns to shareholders outstripped those of the mighty Jack Welch by far.

So what?s the blueprint?? Putting the consumer at the heart of the business? No way. For these guys (and one gal), tax planners are the only window on the outside world deemed essential. Focus on creating customer value and shareholder value will naturally follow? Nope, customers don?t get a mention in this book at all, except in passing on page 205. The CEO as cheerleader and visionary, providing inspiration to colleagues?? Not his job. Capital allocation is the only task that the CEO must handle. Everything else can, and should, be delegated. So says Thorndike, a US investment manager.

His conclusions are quite a challenge to conventional marketing wisdom. Of purpose, mission, vision and values, there?s not a cheep. No concerns about employee engagement or satisfaction here. Creating value for customers doesn?t feature. ?Instead these leaders delegated just about everything, and focused relentlessly on how the capital of the business was invested. Often that meant passing on expensive acquisitions that would have brought scale, and buying back their own shares if they felt they were undervalued. In fact share buy backs shrank their businesses in the short term ? but increased the value of each remaining share. This has been criticised as a tactic to trigger CEO incentive plans, but these CEOs were taking the long view. They looked for free cash flow rather than reported net income, and share value growth rather than earnings per share.? They seldom paid dividends and eschewed giving stock market guidance on forward earnings. Needless to say, this did not get them on the cover of Time or Newsweek.

This is a book about the CEO?s role. Thorndike has nothing to say on marketing and customer issues. As an investor, he cares about long term value creation for shareholders ? so should we all. Post RBS, no one endorses the ego-driven pursuit of scale at any price, but this book rebuts the standard assumption that growth is good for a business. Most of all, it should give courage to those who see the world differently, and believe in their strategy for the long term, to be prepared to zig when others zag.

Books | November 2014